Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
9-08-2021 Salina KS (GO Ref Bonds) 2021-B Transcript
$6,220,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B DATED SEPTEMBER 8, 2021 CLOSING LIST The transcript of proceedings will be prepared in electronic format unless otherwise noted, for the above referenced issue (the "Bonds"), and distributed as follows: 1.City of Salina, Kansas (the "Issuer") [Original+ electronic]2.Greg Bengtson, Esq., Clark, Mize & Linville Chartered, Salina, Kansas ("Issuer's Counsel")3.Attorney General of the State of Kansas [ Original]4.State Treasurer, Topeka, Kansas (the "Paying Agent")5.UMB Bank, n.a., Kansas City, Missouri (the "Original Purchaser")6.Stifel, Nicolaus & Company, Incorporated, Kansas City, Missouri (the "Municipal Advisor")7.Gilmore & Bell, P.C., Kansas City, Missouri ("Bond Counsel")Document Number PROCEEDINGS AUTHORIZING THE SALE AND ISSUANCE OF THE BONDS 1.Excerpt of Minutes of the governing body meeting evidencing first reading of Ordinance No.21-11064 and adoption of Resolution No. 21-79692.Resolution No. 21-7969 authorizing the offering for sale of the Bonds3.Notice of Bond Sale, Preliminary Official Statement and Certificate Deeming PreliminaryOfficial Statement Final4.Official Statement5.Continuing Disclosure Undertaking6.Excerpt of Minutes of the governing body meeting evidencing acceptance of the best bid ofthe Original Purchaser, passage of Ordinance No. 21-11064 and adoption of ResolutionNo. 21-7977 600596.20219\CLOSING DOCS v.3 7.Ordinance No. 21-11064 authorizing the issuance of the Bonds.8.Summary of Ordinance No. 21-11064 and Affidavit of publication thereof.9.Resolution No. 21-7977 prescribing the form and details of the Bonds10.Ordinances and Resolutions authorizing Refunded Bonds•Ordinance No. 13-10701 and Resolution No. 13-7020 -Series 2013-B Bonds• Ordinance No. 14-10737 and Resolution No. 14-7119-Series 2014-A Bonds11.Refunded Bonds Redemption Documents· Event Notice Pursuant to SEC Rule 15c2-12(b )(5)(C)•Call for Redemption (Series 2013-B Bonds)• Notice of Call for Redemption (Series 2013-B Bonds)•Call for Redemption (Series 2013-B Bonds)• Notice of Call for Redemption (Series 2014-A Bonds)•Paying Agent's Certification (Series 2014-A Bonds)· Paying Agent's Certification (Series 2014-A Bonds)CLOSING DOCUMENTS 12.Transcript CertificateExhibit A -Statement of CostsExhibit B -Schedule of Outstanding General Obligation Indebtedness13.Uniform Facsimile of Signature Certificates14.Authorization of State Treasurer to use facsimile signature and seal15.Specimen Bond and Bond Printer's Certificate16.Agreement Between Issuer and Agent1 7. OTC Blanket Letter of Representations18.Rating Letter -Moody's19.Closing Certificate20.Federal Tax Certificate with attachments as follows:Exhibit A -Internal Revenue Service Form 8038-G and evidence of filingExhibit B -Receipt for Purchase PriceExhibit C -Receipt and RepresentationExhibit C-1 -Certificate of Municipal AdvisorExhibit D -Description of Property Comprising the Financed ImprovementsExhibit E -Sample Annual Compliance ChecklistSchedule I -Debt Service Schedule & Proof of Yield600596.20219\CLOSING DOCS v.3 11 LEGAL OPINIONS 21.Approving legal opinion of Gilmore & Bell, P.C.22.Approval letter of Attorney GeneralMISCELLANEOUS DOCUMENTS 23.Closing Letter600596.20219\CLOSING DOCS v.3 ** * * * ll1 600596.20219\BASICDOCS v.2 CERTIFICATE I hereby certify that the foregoing Excerpt of Minutes is a true and correct excerpt of the proceedings of the Governing Body of the City of Salina, Kansas, held on the date stated therein, and that the official minutes of such proceedings are on file in my office. (SEAL) ··············· /;RGAN/Z.12�•••._ . _J.\ 1870 :. .·•.�-... .•····•············· 600596.20219\SALEDOCS (Signature Page to Excerpt of Minutes) Section 2. The Mayor, Clerk, City Manager and Finance Director, in conjunction with the Municipal Advisor and Bond Counsel are hereby authorized to cause to be prepared a Preliminary Official Statement relating to the Bonds (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 Bonds. The Municipal Advisor and Bond Counsel is hereby authorized and directed to give notice of said bond sale by distributing copies of the Notice of Bond Sale and Preliminary Official Statement to prospective purchasers of the Bonds. Section 3. For the purpose of enabling the purchaser(s) of the Bonds (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, Finance Director, or other appropriate officers of the Issuer are hereby authorized: (a) to approve the form of said Preliminary Official Statement and to execute the "Certificate Deeming Preliminary Official Statement Final" in substantially the form attached hereto as Exhibit A as approval of the Preliminary Official Statement, such official's signature thereon being conclusive evidence of such official's and the Issuer's approval thereof; (b) covenant to provide continuous secondary market disclosure by annually transmitting certain financial information and operating data and other information necessary to comply with the Rule to the Municipal Securities Rulemaking Board; and ( c)take such other actions or execute such other documents as such officers in their reasonable judgmentdeem necessary to enable the Purchaser(s) to comply with the requirement of the Rule.Section 4. The Issuer agrees to provide to the Purchaser(s) within seven business days of the date of the sale of the Bonds 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 5. The Mayor, Clerk, Finance Director 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 Bonds; and (b) provide for the redemption of the Refunded Bonds. The transactions described in this Resolution may be conducted, and documents related to the Bonds 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 by electronic means or transmissions) shall be deemed to be authentic and valid counterparts of such documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 6. This Resolution shall be in full force and effect from and after its adoption by the Governing Body. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20219\SALEDOCS v .2 2 PARITY® * Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the totalprincipal amount of the Bonds or the schedule of principal payments described above, depending on the purchase price and interest rates bid, the required size of the refunding account created for the bonds to be refunded (the "Refunded Bonds"), and the offering prices specified by the Successful Bidder. The Successful Bidder may not withdraw its bid or change the 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 facsimile transmission, subsequently confirmed in writing, no later than 2:00 p.m. applicable Central Time, on the Sale Date. The actual purchase price for the Bonds shall be calculated by applying the percentage of par value bid by the Successful Bidder against the final aggregate principal amount of the Bonds, as adjusted, plus accrued interest from the Dated Date to the Closing Date (as hereinafter defined). Place of Payment. The principal of and interest on the Bonds will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The principal of each Bond will be payable at maturity 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. futerest 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 futerest 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 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 Owners. Book-Entry-Only System. The Depository Trust Company, New York, New York ("DTC"), will act as securities depository for the Bonds. The Bonds will initially be issued exclusively in "book entry" form and shall be initially registered in the name of Cede & Co., as the nominee of DTC and no beneficial owner will receive certificates representing their interests in the Bonds. During the term of the Bonds, 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 Bonds to DTC or its nominee as the Registered Owner of the Bonds, 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 Bonds to its participants who shall be responsible for transmitting payments to beneficial owners of the Bonds in accordance with agreements between such participants and the beneficial owners. The Issuer will not be responsible for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. fu the event that: (a) DTC determines not to continue to act as securities depository for the Bonds, or (b) the Issuer determines that continuation of the book-entry-only form of evidence and transfer of ownership of the Bonds would adversely affect the interests of the beneficial owners of the Bonds, the Issuer will discontinue the book-entry-only form of registration with DTC. If the Issuer fails to identify another qualified securities depository to replace DTC, the Issuer will cause to be authenticated and delivered to the beneficial owners replacement Bonds in the form of fully registered certificates. Reference is made to 600596.20219\SALEDOCS v.2 2 the Official Statement for further information regarding the book-entry-only system of registration of the Bonds and OTC. 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 2030, and thereafter, will be subject to redemption and payment prior to maturity on October 1, 2029, 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, any provider of municipal bond insurance and the Successful Bidder. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the registered owners of said Bonds. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the Redemption Date. All notices of redemption shall state the Redemption Date, the redemption price, the Bonds to be redeemed, the place of surrender of Bonds so called for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by State law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Bond be called for redemption and payment as aforesaid, all interest on such Bond shall cease from and after the Redemption Date, provided funds are available for its payment at the price hereinbefore specified. Authority, Purpose and Security. The Bonds are being issued pursuant to K.S.A. 10-427 et seq., as amended, and an ordinance and a resolution adopted by the Governing Body (collectively the "Bond Resolution") for the purpose of refunding the Refunded Bonds. The Bonds shall be general obligations of the Issuer payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of the improvements financed by the Refunded Bonds, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The 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. 600596.20219\SALEDOCS v.2 3 Submission of Bids. Electronic bids via PARITY® must be submitted in accordance with its Rules of Participation, as well as the provisions of this Notice of Bond Sale. If provisions of this Notice of Bond Sale conflict with those of PARITY®, this Notice of Bond Sale shall control. Email bids may be submitted to arteberryd@stifel.com. Bids must be received prior to the Submittal Hour on the Sale Date accompanied by the Deposit (as hereinafter defined), which may be submitted separately. The Issuer and Municipal Advisor shall not be responsible for failure, misdirection, or error in the means of transmission by any bidder. 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. Conditions of Bids. 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) no interest rate may exceed a rate equal to the daily yield for the 10-year Treasury Bond published by THE BOND BUYER, in New York, New York, on the Monday next preceding the day on which the Bonds are sold, plus 3%; (b) no supplemental interest payments will be considered; ( c) each interest rate specified shall be a multiple of 1/8 or 1/20 of 1%; and (d) no zero percent (0%) coupon rates will be permitted. No bid for less than 100% 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 described under the caption "Establishment of Issue Price" in this Notice. Good Faith Deposit. A good faith deposit (the "Deposit") in the amount of $130,000 payable to the order of the Issuer is required in order to secure the Issuer from any loss resulting from the failure of the bidder to comply with the terms of its bid. The Deposit may be submitted at the addresses hereinafter set forth in either of the following forms: (a)Certified or Cashier's Check. Certified or cashier's check drawn on a bank located in theUnited States of America received by the Issuer or the Municipal Advisor prior to the Submittal Hour; or (b)Wire Transfer. Wire transfer submitted by the Successful Bidder in Federal Reserve funds, immediately available for use by the Issuer not later than 3:00 p.m. applicable Central Time on the Sale Date (wire transfer information may be obtained from the Issuer or the Municipal Advisor at the addresses set forth below). Contemporaneously with the submission of a wire transfer Deposit, such bidder shall send an email to the Issuer at the email address set forth below, including the following information: (a) notification that a wire transfer has been made; (b) the amount of the wire transfer; and (c) return wire transfer instructions in the event such bid is unsuccessful. Checks submitted for Deposits by unsuccessful bidders will be returned; wire transfer Deposits submitted by unsuccessful bidders will not be accepted or shall be returned in the same manner received on the Sale Date. The Issuer reserves the right to withhold reasonable charges for any fees or expenses incurred in returning a wire transfer Deposit. No interest on the Deposit will be paid by the Issuer. If a bid is accepted, the Deposit, or the proceeds thereof, will be held by the Issuer until the Successful Bidder has 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 or deducted from the purchase price at the option of the Issuer. If a bid is accepted but the Issuer fails to deliver the Bonds to the Successful Bidder in accordance with the terms and conditions of this Notice, said Deposit, 600596.20219\SALEDOCS v .2 4 If the Successful Bidder elects to purchase the Bonds with municipal bond insurance, certain rating agencies will assign their ratings to the Bonds with the understanding that upon delivery of the Bonds, a policy insuring the payment when due of the principal of and interest on the Bonds will be issued by such bond insurer. All costs associated with the purchase and issuance of such municipal bond insurance policy and associated ratings and expenses ( other than any independent rating requested by the Issuer) shall be paid by the Successful Bidder. Failure of the municipal bond insurer to issue the policy after the award of the Bonds shall not constitute cause for failure or refusal by the Successful Bidder to accept delivery of the Bonds. CUSIP Numbers. CUSIP identification numbers will be assigned and printed on the Bonds, but neither the failure to print such number on any Bond nor any error with respect thereto shall constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the Bonds in accordance with the terms of this Notice. The Municipal Advisor will apply for CUSIP numbers pursuant to Rule G-34 implemented by the Municipal Securities Rulemaking Board. All expenses in relation to the assignment and printing of CUSIP numbers on the Bonds will be paid by the Issuer. Delivery and Payment. The Issuer will pay for preparation of the Bonds and will deliver the Bonds properly prepared, executed and registered without cost on or about SEPTEMBER 8, 2021 (the "Closing Date"), to DTC for the account of the Successful Bidder. The Successful Bidder will be furnished with a certified transcript of the proceedings evidencing the authorization and issuance of the Bonds and the usual closing documents, including a certificate that there is no litigation pending or threatened at the time of delivery of the Bonds affecting their validity and a certificate regarding the completeness and accuracy of the Official Statement. Payment for the Bonds shall be made in federal reserve funds, immediately available for use by the Issuer. The Issuer will deliver one Bond of each maturity registered in the nominee name of DTC. Establishment of Issue Price. (a)In order to provide the Issuer with information necessary for compliance with Section148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (collectively, the "Code"), the Successful Bidder will be required to assist the Issuer in establishing the "issue price" of the Bonds and complete, execute and deliver to the Issuer prior to the Closing Date, a written certification in a form acceptable to the Successful Bidder, the Issuer and Bond Counsel (the "Issue Price Certificate") containing the following for each maturity of the Bonds: (1) the interest rate; (2) the reasonably expected initial offering price to the "public" (as said term is used in Treasury Regulation Section 1.148-l(f) (the "Regulation")) or the sale price; and (3) pricing wires or equivalent communications supporting such offering or sale price. However, such Issue Price Certificate may indicate that the Successful Bidder has purchased the Bonds for its own account in a capacity other than as an underwriter or wholesaler, and currently has no intent to reoffer the Bonds for sale to the public. Any action to be taken or documentation to be received by the Issuer pursuant hereto may be taken or received by the Municipal Advisor or Bond Counsel on behalf of the Issuer. (b)The Issuer intends that the sale of the Bonds pursuant to this Notice shall constitute a"competitive sale" as defined in the Regulation. In support thereof: (1) the Issuer shall cause this Notice to be disseminated to potential bidders in a manner reasonably designed to reach potential bidders; (2) all bidders shall have an equal opportunity to submit a bid; (3) the Issuer reasonably expects that it will receive bids from at least three bidders that have established industry reputations for underwriting municipal bonds such as the Bonds; and (4) the Issuer anticipates awarding the sale of the Bonds to the bidder that provides a bid with the lowest TIC in accordance with the section hereof entitled "Basis of Award." 600596.20219\SALEDOCS v.2 6 (c)Any bid submitted pursuant to this Notice shall be considered a firm offer for thepurchase of the Bonds as specified therein. The Successful Bidder shall constitute an "underwriter" as said term is defined in the Regulation. By submitting its bid, the Successful Bidder confirms that it shall require any agreement among underwriters, a selling group agreement or other agreement to which it is a party relating to the initial sale of the Bonds, to include provisions requiring compliance with provisions of the Code and the Regulation regarding the initial sale of the Bonds. (d)If all of the requirements of a "competitive sale" are not satisfied, the Issuer shall advisethe Successful Bidder of such fact at the time of award of the sale of the Bonds to the Successful Bidder and the following provisions shall apply to the Bonds. In such event, any bid submitted will not be subject to cancellation or withdrawal. Within twenty-four (24) hours of the notice of award of the sale of the Bonds, the Successful Bidder shall advise the Issuer if a "substantial amount" (as defined in the Regulation (10%)) of any maturity of the Bonds has been sold to the public and the price at which such substantial amount was sold. The Issuer will treat such sale price as the "issue price" for such maturity, applied on a maturity-by-maturity basis. The Issuer will not require the Successful Bidder to comply with that portion of the Regulation commonly described as the "hold-the-offering-price" requirement for the remaining maturities, but the Successful Bidder may elect such option. If the Successful Bidder exercises such option, the Issuer will apply the initial offering price to the public provided in the bid as the issue price for such maturities. If the Successful Bidder does not exercise that option, it shall thereafter promptly provide the Issuer the prices at which a substantial amount of such maturities are sold to the public. Any change in the issue price of any of the Bonds after the Submittal Hour will not affect the purchase price for the Bonds submitted in the bid of the Successful Bidder. (e)This agreement by the Successful Bidder to provide such information will continue toapply after the Closing Time if: (a) the Issuer requests the information in connection with an audit or inquiry by the Internal Revenue Service (the "IRS") or the Securities and Exchange Commission (the "SEC") or (b) the information is required to be retained by the Issuer pursuant to future regulation or similar guidance from the IRS, the SEC or other federal or state regulatory authority. Preliminary Official Statement and Official Statement. The Issuer has prepared a Preliminary Official Statement relating to the Bonds "deemed final" by the Issuer except for the omission of certain information as provided in the Rule, copies of which may be obtained from the Municipal Advisor. Upon the sale of the Bonds, the Issuer will adopt the final Official Statement and will furnish the Successful Bidder, without cost, within seven business days of the acceptance of the Successful Bidder's proposal, with a sufficient number of copies thereof, which may be in electronic format, in order for the Successful Bidder to comply with the requirements of the Rule and Rule G-32. Additional copies may be ordered by the Successful Bidder at its expense. Continuing Disclosure. In the Bond Resolution, the Issuer has covenanted to provide annually certain financial information and operating data and other information necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. This covenant is for the benefit of and is enforceable by any Registered Owner of the Bonds. For further information, reference is made to the caption "CONTINUING DISCLOSURE" in the Preliminary Official Statement. Assessed Valuation and Indebtedness. The total assessed valuation of the taxable tangible property within the Issuer and the outstanding general obligation indebtedness of the Issuer may be found in the Preliminary Official Statement relating to the Bonds. Legal Opinion. The Bonds will be sold subject to the approving legal opinion of GILMORE & BELL, P.C., KANSAS CITY, MISSOURI, Bond Counsel to the Issuer, which opinion will be furnished 600596.20219\SALEDOCS v.2 7 PRELIMINARY OFFICIAL STATEMENT DATED AUGUST 9, 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 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 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). See TAX MATTERS in this Official Statement. New Issue Bank Qualified Moody’s Rating: “Aa3” Book-Entry Only $6,500,000* CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B Dated: Date of Delivery (the “Dated Date”) Due: As Shown Herein The General Obligation Refunding Bonds, Series 2021-B 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 or earlier redemption, 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 SCHEDULE (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 Bonds as the same becomes due. See THE BONDS - “Security” herein. The Bonds are offered when, as and if issued by the City and received by the Underwriter subject to the approval of legality by Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City. It is expected that the Bonds will be available for delivery through the facilities of DTC, in New York, New York, on or about September 8, 2021. BIDS FOR THE PURCHASE OF THE BONDS WILL BE RECEIVED PURSUANT TO THE NOTICE OF SALE: On or before 12:00 p.m., Central Daylight Time On Monday, August 16, 2021 THIS COVER PAGE CONTAINS INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THE ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. *Preliminary; subject to change 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 SCHEDULE $6,500,000(1) GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B Serial Bonds Base CUSIP(2) Maturity Amount Rate Yield 794744 10-01-22 $665,000 10-01-23 670,000 10-01-24 680,000 10-01-25 680,000 10-01-26 675,000 10-01-27 675,000 10-01-28 680,000 10-01-29(3) 420,000 10-01-30(3) 275,000 10-01-31(3) 275,000 10-01-32(3) 280,000 10-01-33(3) 290,000 10-01-34(3) 235,000 (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 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. See THE BONDS – “Redemption Provisions” herein. IN CONNECTION WITH THIS OFFERING, THE 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 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE BONDS ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE BONDS 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 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 Aaron Peck, Commissioner Karl Ryan, Commissioner CITY STAFF Mike Schrage, City Manager Debbie Pack, Finance Director JoVonna Rutherford, 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 Underwriter to give any information or to make any representations with respect to 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 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 Underwriter has 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 Underwriter does 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 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 BONDS ......................................................................................................................................... 2 THE DEPOSITORY TRUST COMPANY ................................................................................................... 6 THE FINANCING PLAN ......................................................................................................................... 8 SOURCES AND USES OF FUNDS .......................................................................................................... 9 RISK FACTORS AND INVESTMENT CONSIDERATIONS ......................................................................... 9 LEGAL MATTERS ................................................................................................................................. 12 TAX MATTERS ..................................................................................................................................... 12 RATINGS.............................................................................................................................................. 14 MUNICIPAL ADVISOR .......................................................................................................................... 14 UNDERWRITING ................................................................................................................................. 14 ABSENCE OF MATERIAL LITIGATION ................................................................................................... 14 CONTINUING DISCLOSURE ................................................................................................................. 14 CERTIFICATION OF OFFICIAL STATEMENT .......................................................................................... 15 APPENDIX A: INFORMATION CONCERNING THE CITY FINANCIAL OVERVIEW OF THE CITY .............................................................................................. A-1 GENERAL INFORMATION CONCERNING THE CITY ........................................................................ A-2 ECONOMIC INFORMATION CONCERNING THE CITY ..................................................................... A-6 DEBT SUMMARY OF THE CITY ....................................................................................................... A-9 FINANCIAL INFORMATION CONCERNING THE CITY ...................................................................... A-13 APPENDIX B: FORM OF CONTINUING DISCLOSURE UNDERTAKING APPENDIX C: AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2020 1 OFFICIAL STATEMENT CITY OF SALINA, KANSAS $6,500,000* GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B 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 $6,500,000* General Obligation Refunding Bonds, Series 2021-B (the “Bonds”). The Bonds are being issued to provide funds to refinance certain outstanding bonds 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 Bonds as the same becomes due. See 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 City and other sources deemed to be reliable. The presentation of information herein is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. 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 LEGAL MATTERS 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 ordinance and resolution of the governing body of the City authorizing the Bonds (collectively, the “Bond Resolution”), as applicable. Copies of the Bond Resolution are available upon request to the City or the Municipal Advisor. Additional Information Additional information regarding the City or the Bonds may be obtained from Stifel, Nicolaus & Company, Incorporated, 4801 Main Street, Suite 530, Kansas City, Missouri 64112, telephone 816-203-8728. *Preliminary; subject to change 2 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. 10-427 et seq., and K.S.A. 10- 620 et seq., all as amended and supplemented from time to time, and an Ordinance passed by the governing body of the City and a Bond Resolution adopted by the governing body of the City (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 benefitted by the construction of certain public improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the 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 City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. 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, 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 Issuer, Bonds maturing on October 1 in the years 2029, and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2028, and thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. 3 [Mandatory Redemption. The Bonds maturing on October 1, [_____] (the “Term Bonds”) shall be subject to mandatory redemption and payment prior to their 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] 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 4 of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Bond Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. Designation of Bond Paying Agent and Bond Registrar The City will at all times maintain a paying agent and bond registrar meeting the qualifications set forth in the Bond Resolution. The City reserves the right to appoint a successor paying agent or bond registrar. No resignation or removal of the paying agent or bond registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or bond registrar. Every paying agent or bond registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the “Bond Registrar” and “Bond Paying Agent”) has been designated by the City as paying agent for the payment of principal of and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds. Registration, Transfer and Exchange of Bonds As long as any of the Bonds remain Outstanding, each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as hereinafter provided. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner’s duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Bond Resolution. The City shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds. Any additional costs or fees 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. 5 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.” Mutilated, Lost, Stolen or Destroyed Bonds If (a) any mutilated Bond is surrendered to the Bond Registrar or the Bond Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Bond, and (b) there is delivered to the Issuer and the Bond Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the Issuer or the Bond Registrar that such Bond has been acquired by a bona fide purchaser, the Issuer shall execute and, upon the Issuer's request, the Bond Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and payable, the Issuer, in its discretion, may pay such Bond instead of issuing a new Bond. Upon the issuance of any new Bond, the Issuer may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent) connected therewith. Nonpresentment of Bonds If any Bond is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Bond have been made available to the Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Bond, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Bond Resolution or on, or with respect to, said Bond. If any Bond is not presented for payment within four (4) years following the date when such Bond becomes due at Maturity, the Paying Agent shall repay to the Issuer the funds theretofore held by it for payment of such Bond, and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the Issuer, and the Owner thereof shall 6 be entitled to look only to the Issuer for payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the Issuer shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. 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. 7 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 Bonds. The Bonds 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 will be issued for each scheduled maturity of the Bonds, 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 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds 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 Bonds 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 Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. 4. To facilitate subsequent transfers, all Bonds 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 Bonds 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 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds 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. 8 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 Bonds 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 Bonds 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Bonds 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 Bonds purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the Paying Agent. The requirement for physical delivery of the Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Bonds to the Paying Agent’s DTC account. 10. DTC may discontinue providing its services as depository with respect to the Bonds 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. 9 THE FINANCING PLAN Proceeds from the sale of the Bonds will be used to currently refund the City’s outstanding General Obligation Internal Improvement Bonds, Series 2013-B and General Obligation Internal Improvement Bonds, Series 2014-A (collectively the “Refunded Bonds”). The following is a description of the bonds to be refunded: General Obligation Internal Improvement Bonds, Series 2013-B Outstanding Amount Maturity Date Interest Rate Redemption Date Redemption Price $265,000 10/01/21 3.000% 10/01/21(1) 100% 270,000 10/01/22 3.000 10/01/21 100% 275,000 10/01/23 3.000 10/01/21 100% 285,000 10/01/24 3.000 10/01/21 100% 290,000 10/01/25 3.500 10/01/21 100% 300,000 10/01/26 3.500 10/01/21 100% 310,000 10/01/27 3.500 10/01/21 100% 315,000 10/01/28 3.500 10/01/21 100% 350,000 10/01/33 4.000 10/01/21 100% General Obligation Internal Improvement Bonds, Series 2014-A Outstanding Amount Maturity Date Interest Rate Redemption Date Redemption Price $305,000 10/01/21 3.000% 10/01/21(1) 100% 310,000 10/01/22 2.500 10/01/21 100% 315,000 10/01/23 2.500 10/01/21 100% 330,000 10/01/24 2.750 10/01/21 100% 340,000 10/01/25 2.750 10/01/21 100% 345,000 10/01/26 3.000 10/01/21 100% 350,000 10/01/27 3.000 10/01/21 100% 365,000 10/01/28 3.000 10/01/21 100% 375,000 10/01/29 3.150 10/01/21 100% 235,000 10/01/30 3.500 10/01/21 100% 500,000(2) 10/01/32 3.750 10/01/21 100% 535,000(2) 10/01/34 3.500 10/01/21 100% (1)At closing, the Issuer will transfer funds to the Paying Agent to refund the October 1, 2021 maturities of the Refunded Bonds to their Stated Maturity. (2)Denotes Term Bond with mandatory redemptions 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. Sources of Funds: Principal Amount Available Funds of the Issuer Net Original Issue Premium Total Sources of Funds Uses of Funds: Deposit to Current Redemption Fund Costs of Issuance Underwriter’s Discount Total Application 10 RISK FACTORS AND INVESTMENT CONSIDERATIONS A PROSPECTIVE PURCHASER OF THE BONDS DESCRIBED HEREIN SHOULD BE AWARE THAT THERE ARE CERTAIN RISKS ASSOCIATED WITH THE BONDS 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 BONDS. PROSPECTIVE PURCHASERS OF THE BONDS 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 Bonds. 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 Bonds The enforceability of the rights and remedies of the owners of Bonds, and the obligations incurred by the City in issuing the Bonds, 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 Bonds to judicial discretion and interpretation of their rights in bankruptcy and otherwise, and consequently may involve risks of delay, limitation or modification of their rights. Debt Service Source; Issuer’s Tax Revenues The Bonds 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 11 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 Bonds Opinions of Bond Counsel will be obtained to the effect that interest earned on the Bonds 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 Bonds includable in gross income for federal income tax purposes. The City has covenanted in the Bond Resolution and in other documents and certificates to be delivered in connection with the issuance of the Bonds 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 Bonds. Because the existence and continuation of the excludability of the interest on the Bonds depends upon events occurring after the date of issuance of the Bonds, 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 Bonds 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 Bonds to become includable in gross income as of the date of issuance. Premium on the Bonds [The initial offering prices of certain maturities of the Bonds 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 Bonds are subject to redemption at par under the various circumstances described under THE BONDS – “Redemption Provisions.” No Additional Interest or Mandatory Redemption upon Event of Taxability The Bond Resolution does not provide for the payment of additional interest or penalty on the Bonds or the mandatory redemption thereof if the interest thereon becomes includable in gross income for federal income tax purposes. Likewise, the Bond Resolution does not provide for the payment of any additional interest or penalty on the Bonds if the interest thereon becomes subject to income taxation by the State of Kansas. Suitability of Investment The tax exempt feature of the Bonds 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 Bonds are an appropriate investment. 12 Market for the Bonds Ratings. The Bonds 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 Bonds. Secondary Market. There is no assurance that a secondary market will develop for the purchase and sale of the Bonds. Prices of Bonds 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 Bonds 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 Bonds 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 Bonds being subjected to Federal income taxes, such legislation or proposals could affect the value or marketability of the Bonds. Prospective purchasers of the Bonds should consult their own tax advisers regarding the impact of any change in law on the Bonds. 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 Bonds 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 BONDS, LEGAL MATTERS, TAX MATTERS, and APPENDIX B – FORM OF CONTINUING DISCLOSURE UNDERTAKING. 13 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 Bonds. 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 Bonds 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 Bonds 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 Bonds. Opinion of Bond Counsel In the opinion of Bond Counsel, under the law existing as of the issue date of the Bonds: 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 Bonds 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). Kansas Tax Exemption. The interest on the Bonds 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 Bonds, subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The 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 Bonds in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Bonds. Other Tax Consequences [ Original Issue Discount. For federal income tax purposes, original issue discount is the excess of the stated redemption price at maturity of a Bond over its issue price. The stated redemption price at maturity of a Bond is the sum of all payments on the Bond other than “qualified stated interest” (i.e., interest unconditionally payable at least annually at a single fixed rate). The issue price of a Bond is generally the first price at which a substantial amount of the Bonds of that maturity have been sold to the public. Under Code § 1288, original issue discount on tax-exempt obligations accrues on a compound basis. The amount of original issue discount that accrues to an owner of a Bond during any accrual period generally equals (1) the issue price of that Bond, plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (2) the yield to maturity on that Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), minus (3) any interest payable on that Bond during that accrual period. The amount of original issue discount 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 that Bond. Prospective investors should consult their own tax advisors concerning the calculation and accrual of original issue 14 discount.] [ Original Issue Premium. For federal income tax purposes, premium is the excess of the issue price of a Bond over its stated redemption price at maturity. The stated redemption price at maturity of a Bond is the sum of all payments on the Bond other than “qualified stated interest” (i.e., interest unconditionally payable at least annually at a single fixed rate). The issue price of a Bond is generally the first price at which a substantial amount of the Bonds of that maturity have been sold to the public. Under Code § 171, premium on tax-exempt obligations amortizes over the term of the Bond using constant yield principles, based on the purchaser’s yield to maturity. As premium is amortized, the owner’s basis in the Bond 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 Bond 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 Bonds. Upon the sale, exchange or retirement (including redemption) of a Bond, an owner of the Bond 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 Bond (other than in respect of accrued and unpaid interest) and such owner’s adjusted tax basis in the Bond. To the extent the Bonds 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 Bond 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 Bonds, and to the proceeds paid on the sale of Bonds, 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 Bonds should be aware that ownership of the Bonds 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 Bonds. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Bonds 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 Bonds, including the possible application of state, local, foreign and other tax laws. RATING Moody's Investors Service, has assigned a rating of “Aa3” to the Bonds. Any explanation of the significance of such rating may be obtained only from said rating agency. There is no assurance that the rating 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 rating may have an adverse effect on the market price of the 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 Bonds. 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. The Municipal Advisor has also assisted the City with other matters relating to the issuance of the Securities. The fees of the Municipal Advisor are contingent upon the issuance of the Bonds. 15 UNDERWRITING The Bonds were purchased at public sale by [_______] (the “Underwriter”) at a price equal to the par amount of the Bonds, plus a net [premium/discount] of $[_______], less an underwriting discount of $[________]. 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 Bonds or the constitutionality or validity of the obligation represented by the Bonds or the means provided for the payment of the 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 shall, not later than the first day of the seventh month after the end of the Issuer’s Fiscal Year, commencing with the year ending December 31, 2021. 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) $ 72,510,000 Population (2019 U.S. Census Bureau Estimate) 46,550 General Obligation Debt Per Capita $ 1,558 Ratio of General Obligation Debt to Estimated Actual Valuation 2.18% Ratio of General Obligation Debt to Estimated Assessed Valuation 14.19% Outstanding Temporary Notes $ 5,230,000 Outstanding State Loans (3) $ 77,555,539 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 (4) $ 178,602,035 Direct and Overlapping General Obligation Debt (5) $ 333,897,574 Direct and Overlapping General Obligation Debt Per Capita $ 7,173 Ratio of Direct and Overlapping Debt to Estimated Actual Valuation 10.04% Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation 65.35% _________________ (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. Does not include bonds to be retired with proceeds from the sale of the Bonds and other available funds. (3) 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”. (4) For a more detailed explanation of the overlapping debt of the other jurisdictions, see DEBT SUMMARY OF THE CITY - “Overlapping Debt”. Includes general obligation bonds issued by Saline County which are anticipated to be repaid by a dedicated sales tax. (5) 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 2020 U.S. Census Bureau estimate of 47,707. 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. Commissioner 2024 Aaron Peck Commissioner 2022 Michael Hoppock Commissioner 2022 Karl 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 $963.522 million as of Spring, 2020. 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 8.87% of the employee’s gross salary for calendar year 2021. The Issuer’s contribution is projected to change to 8.90% of gross compensation for calendar year 2022. In addition, the Issuer contributes 1% of the employee’s gross salary for Death and Disability Insurance for covered employees; provided that starting July 1, 2021, there will be a moratorium on the Death and Disability Insurance rate, and the Issuer will contribute 0% of the employee’s gross salary for Death and Disability Insurance for covered employees after such date. 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, 2021, the Issuer contributes 22.80% of employees’ gross compensation. Beginning January 1, 2022, the Issuer’s contribution is projected to change to 22.99% of gross compensation for calendar year 2022. 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- A-7 to-suit-tenant” agreement is available on sites in the Airport Industrial Center that can provide 100% financing for land and building costs. 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. Great Plains Manufacturing announced an expansion in Salina in late 2020. 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 YaYas Bistro, Old Chicago Pizza and Barillo Grille. 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 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 2021 (May) 24,854 24,001 853 3.4% 2020 25,105 23,673 1,432 5.7 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 2021 (May) 1,509,664 1,456,978 52,686 3.5% 2020 1,497,003 1,408,995 88,008 5.9 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 0 (1) 07-30-14 2014-A Improvements 7,570,000 10-01-34 0 (1) 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 09-08-21 2021-B Refunding 6,500,000* 10-01-34 6,500,000 (2) Total $72,510,000 (1) Excludes amounts to be refunded with proceeds from the sale of the Bonds and other funds. See THE FINANCING PLAN herein. (2) 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 2021-1 04-29-21 05-01-22 5,230,000 $5,230,000 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 $ 5,669,144 KDHE 2917 Water 2019 02-01-40 32,000,000 30,080,026 KDHE 2957 Water 2019 02-01-40 4,250,000 3,995,003 KDHE 2998 Water 2019 02-01-40 4,250,000 4,250,000 KDHE 2050 Sewer 2020 03-01-35 2,250,000 2,061,363 KDHE 2049* Sewer 2021 09-01-42 31,500,000 31,500,000 $77,555,539 *Construction on this project is in progress. Principal amount shown is maximum authorized loan amount which is subject to change. 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. (1)As of the closing date of the Bonds. (2)As of the date herefo, Saline County anticipates issuing on August 26, 2021 approximately $74,900,000 of General Obligation Sales Tax Bonds to fund a portion of the costs of a new law enforcement facility. Such bonds, when issued, will be a general obligation of Saline County but are expected to be paid with the revenues produced by a dedicated 0.50% retailers’ sales tax of the county. 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(1) Amount Percentage Salina Airport Authority $ 21,095,000 $ 21,095,000 100.00% Saline County 75,527,787(2) 55,799,745 73.88 Unified School District No. 305 109,280,000 101,707,290 93.07 $178,602,035 Existing Bonds Series 2021-B Bonds Year Principal Interest Principal Interest Total 2021 $4,975,000 $886,082 2022 5,350,000 1,889,984 2023 5,305,000 1,596,014 2024 5,110,000 1,389,694 2025 4,805,000 1,246,119 2026 4,100,000 1,107,099 2027 3,875,000 984,641 2028 3,580,000 871,706 2029 3,570,000 764,999 2030 3,260,000 671,749 2031 3,170,000 584,871 2032 3,090,000 499,814 2033 3,060,000 418,363 2034 2,970,000 336,481 2035 3,035,000 258,613 2036 2,335,000 178,688 2037 1,570,000 117,475 2038 1,060,000 71,650 2039 1,085,000 43,200 2040 350,000 14,100 2041 355,000 7,100 $66,010,000 $13,938,440 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 $12,000,000 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”. 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-13 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. 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-14 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 Gordon Certified Public Accountants, Lawrence, 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, 2020 is attached hereto as APPENDIX C. 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. [REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY] 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: 2017 2018 2019 2020 Property Taxes $10,115,784 $9,743,497 $10,801,226 $11,497,684 Sales Tax 12,906,032 32,900 13,418,742 13,697,179 Other Taxes 5,215,264 5,444,880 5,086,492 4,925,381 Intergovernmental 1,133,310 1,144,717 1,351,967 2,453,021 Charges for Services 6,153,450 6,366,094 5,816,485 4,942,217 Investment Revenue 3,336 45,477 613,249 256,515 Miscellaneous 1,709,491 452,916 609,676 981,845 Total Revenues $37,236,667 $36,490,207 $37,778,837 $38,753,842 Expenditures: General Government $5,423,241 $5,648,579 $4,581,505 $5,505,967 Public Safety 21,628,730 22,952,925 23,692,445 22,435,061 Public Works 5,328,315 5,350,056 5,473,414 5,101,204 Public Health and Sanitation 749,656 793,780 816,636 682,439 Culture and Recreation 4,424,221 4,494,713 4,379,441 3,037,594 Planning and Development 752,825 766,471 836,690 673,564 Capital Outlay 896,026 860,115 985,861 608,460 Total Expenditures $39,203,014 $40,866,639 $40,765,992 $38,044,289 Revenues Over (Under) $(1,966,347) $(4,376,432) $(2,987,155) $709,553 Other Sources (Uses) 3,816,500 4,236,500 5,551,752 4,929,300 Net Change in Fund Balance 1,850,153 $(139,932) 2,564,597 $5,638,853 Fund Balance January 1 $5,032,356 $6,882,509 $6,742,577 $9,503,410 Restatement of Prior Year Balance 0 0 0 0 Fund Balance December 31 $6,882,509 $6,742,577 $9,307,174 $15,142,263 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(2) Utilities Vehicle Valuation 2021(1) $428,454,033 $7,225,265 $23,975,182 $54,589,132 $514,243,612 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 (1) Preliminary figures provided by the Saline County Clerk’s office and used for budgeting purposes. Final valuation figures will be released in November of 2021. (2) 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. Tax Collections A-17 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 $15,386,600 $13,807,323 89.8% $14,070,097 91.6% 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 May 31, 2021. 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 A-18 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* $20,487,981 2020 27,706,623 2019 20,544,765 2018 71,862,718 2017 59,975,197 2016 97,910,328 *Through June 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%. 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 A-19 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) $8,203,483 $4,249,604 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 June 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. Property Assessment Rates A-20 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. Equalization Ratios APPENDIX B Form of Continuing Disclosure Undertaking 600596.20219\DISCLOSURE UNDERTAKING Gilmore & Bell, P.C. 07/15/2021 __________________________________________ CONTINUING DISCLOSURE UNDERTAKING DATED AS OF SEPTEMBER 8, 2021 BY CITY OF SALINA, KANSAS ____________________________________ CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B DATED SEPTEMBER 8, 2021 ____________________________________ 600596.20219\DISCLOSURE UNDERTAKING CONTINUING DISCLOSURE UNDERTAKING This CONTINUING DISCLOSURE UNDERTAKING dated as of September 8, 2021 (the “Continuing Disclosure Undertaking”), is executed and delivered by CITY OF SALINA (the “Issuer”). RECITALS 1. This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance by the Issuer of its General Obligation Refunding Bonds, Series 2021-B (the “Bonds”), pursuant to an Ordinance and Resolution adopted by the governing body of the Issuer (collectively the “Bond Resolution”). 2. The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Bonds 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 Bond 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 Comprehensive Annual Financial Report, if any, so long as the Comprehensive Annual Financial Report contains the financial information and operating data described in Section 2(a)(1) and (2). “Beneficial Owner” means any registered owner of any Bonds 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 Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds 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. “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 600596.20219\DISCLOSURE UNDERTAKING 2 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 Bonds required to comply with the Rule in connection with the offering of the Bonds. Section 2. Provision of Annual Reports. (a) The Issuer shall, not later than the first day of the seventh month after the end of the Issuer’s Fiscal Year, commencing with the year ending December 31, 2021, 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, in substantially the format contained in the Official Statement relating to the Bonds. A more detailed explanation of the accounting basis and method of preparation of the financial statements is contained in the Official Statement relating to the Bonds. 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 Bonds, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement related to the Bonds, 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. 600596.20219\DISCLOSURE UNDERTAKING 3 (b) 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 Bonds (“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 Bonds, or other material events affecting the tax status of the Bonds; (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 Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation of a merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an 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. 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 Bonds. 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 Bonds, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3. 600596.20219\DISCLOSURE UNDERTAKING 4 Section 5. Dissemination Agents. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Continuing Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Continuing Disclosure Undertaking. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Undertaking, the Issuer may amend this Continuing Disclosure Undertaking and any provision of this Continuing Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Undertaking. In the event of any amendment or waiver of a provision of this Continuing Disclosure Undertaking, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (1) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) 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 Bonds 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 Bond Resolution or the Bonds, 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 Bonds, and shall create no rights in any other person or entity. 600596.20219\DISCLOSURE UNDERTAKING 5 Section 10. Severability. If any provision in this Continuing Disclosure Undertaking, the Bond Resolution or the Bonds 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. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20219\DISCLOSURE UNDERTAKING (Signature Page to Disclosure Undertaking) 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 Clerk 600596.20219\DISCLOSURE UNDERTAKING A-1 EXHIBIT A FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial information and operating data contained in tables in the following sections contained in Appendix A of the final Official Statement relating to the Bonds: • 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, 2020 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, 2020, including financial statements as audited by the firm of Gordon Certified Public Accountants, Lawrence, Kansas. Prepared by Department of Finance and Administration of the City of Salina, Kansas COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended December 31, 2020 300 West Ash Street P.O. Box 736 Salina, KS 67402-0736 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, 2020 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, 2020 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 Fiduciary Net Position -Fiduciary Funds 30 Statement of Changes in Fiduciary Net Position -Fiduciary Funds 31 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2020 TABLE OF CONTENTS -CONTINUED Page FINANCIAL SECTION -CONTINUED Notes to the Basic Financial Statements 32 -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, 2020 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 Schedule STATISTICAL SECTION Net Position by Component -Last Ten Fiscal Years 1 104 Changes in Net Position -Last Ten Fiscal Years 2 105 Fund Balances, Governmental Fund -Last Ten Fiscal Years 3 106 Changes in Fund Balances, Governmental Funds -Last Ten Fiscal Years 4 107 Tax Revenues by Source, Governmental Funds -Last Ten Fiscal Years 5 108 Assessed and Estimated Actual Value of Taxable Property –Last Ten Fiscal Years 6 109 Direct and Overlapping Property Tax Rates –Last Ten Fiscal Years 7 110 Principal Property Taxpayers 8 111 Property Tax Levies and Distributions 9 112 Direct Sales Rate by Taxing Entity 10 113 Water Sales by Class of Customer 11 114 Ratio of Outstanding Debt by Type 12 115 Ratio of Net General Bonded Debt Outstanding 13 116 Direct and Overlapping Governmental Activities Debt 14 117 Legal Debt Margin 15 118 Pledged Revenue Coverage 16 119 Demographic and Economic Statistics 17 120 Principal Employers 18 121 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2020 TABLE OF CONTENTS -CONTINUED Page GOVERNMENTAL AUDIT SECTION Schedule of Expenditures of Federal Awards 122 Notes to Schedule of Expenditures of Federal Awards 123 Schedule of Findings and Questioned Costs 124 -125 Independent Auditor’s Report on Internal Control over Financial Reporting And on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 126 -127 Independent Auditor’s Report on Compliance for Each Major Federal Program and Internal Control Over Compliance Required by the Uniform Guidance 128 -129 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 July 23, 2021 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, 2020, is hereby submitted. 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 organizational 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 procedures are reviewed by the City Commission 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, 2020 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. i Independent Audit Kansas Statutes Annotated 75-1122 requires an annual audit of the books of account, financial records and transactions of all administrative departments of the City by independent certified public accountants selected by the City Commission.This requirement has been complied with and the auditor's opinion has been included in this report. Profile of the Community The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas, and became a City of the First Class on July 9, 1920.The City has had a Commission-City Manager form of government since 1921.The Commission is comprised of five members elected at large.Each year the commission chooses one member to serve 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 City anticipates results of the 2020 decennial census during 3rd quarter 2021. 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 which is the 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 for the ownership, operation and maintenance of the City-County Building. 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 programming; 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 1.48 in 2020. 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 retail trade beyond the expected activity attributable to just the residents of that community. It is apparent from this that Salina continues to serve as a regional economic hub in 2020.Two Salina area company’s announced major expansions in the second half of 2020. Schwan’s Company announced expansion of its pizza production facility, adding approximately 225 jobs to the Salina area. Kubota announced a new plant for the production of compact track loaders, adding approximately 120 jobs to the Salina area. 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. ii In 2018, the City of Salina issued $22,570,000 in STAR bonds which funded several projects in the City’s downtown corridor. In 2020 Homewood Suites opened for business and the majority of the City’s Downtown Streetscape project was completed. 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. 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 2020. The City offered no merit increases in 2020. 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. Increases in 2020 and 2021 are a result of the anticipated beginning of the construction of the Smoky Hill River Renewal Project, Ninth Street Bridge Construction and Wastewater Treatment Plant respectively. Due to uncertain Sales Tax recovery post Covid-19, the River Renewal project has been delayed. Few major projects have been planned for 2022 and 2023 until financial resources for those years could 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 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.). iii 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 City of Salina CITIZENS CITY COMMISSION Melissa Rose Hodges, Mayor Trent Davis Karl Ryan Mike Hoppock 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 Rita Stevenson Police Brad Nelson Fire Kevin Royse Public Works Jim Teutsch 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 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 City of Salina, Kansas List of Principal Officials City Commission Melissa Rose Hodges, Mayor Dr. Trent Davis, Vice-Mayor Karl Ryan, Commissioner Mike Hoppock, 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 Rita Stevenson, Director of Computer Technology Natalie Fischer, Director of Human Resources Greg Bengtson, City Attorney Brad Nelson, Chief of Police Kevin Royse, Fire Chief Jim Teutsch, Director of Public Works Martha Tasker, Director of Utilities Chris Cotten, Director of Parks & Recreation Brad Anderson, Director of Arts & Humanities Scott Gardner, Director of Continuous Process Improvement vi FINANCIAL 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, 2020, 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, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of 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 3% 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 $46,156,436 as of December 31, 2020 and total revenues of 2,652,346 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 $7,540,021 as of June 30, 2020 and total revenues of $2,957,322 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. 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. 2 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, 2020, 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 As discussed in Note 1 to the financial statements, the City implemented GASB Statement No. 84, Fiduciary Activities that reclassified ten of the City’s funds that had been previously classified as agency funds. As a result of that implementation, certain fund balances as of January 1, 2020, were restated. Our opinion is not modified with respect to this matter. Prior Period Restatement As discussed in Note 3 to the financial statements, certain errors in amounts previously reported as of December 31, 2019, were discovered by management of the City during the current year. Accordingly, these amounts have been restated in the December 31, 2020, financial statements now presented, and adjustments have been made to net position to correct the error. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 15, the other postemployment benefit schedules on page 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 schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards, and is also not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying account and other records used to prepare the basic financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated July 23, 2021, on our consideration of the City’s internal control over financial reporting and our tests of its compliance with certain provisions, of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in compliance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Certified Public Accountant Lawrence, Kansas July 23, 2021 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 Management Discussion and Analysis 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, 2020. 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 $2.6 million from current operations with net position change of $5.7 million and $(3.1)million in governmental activities and business-type activities, respectively. At the close of 2020, the City’s governmental funds reported combined ending fund balances of $31.3 million, an increase of $15.5 million from the prior year. The Capital Projects expenditures decreased $3.6 million from prior year. The General Fund balance, Sales Tax Capital Fund balance and Other Governmental Funds increased $5.8 million, $2.8 million and 2.3 million, respectively, over the prior year. At the close of 2020, the City’s enterprise funds reported a combined ending Net Position of $96.6 million, an increase of $3.0 million over prior year. Positive performance was shared by the Water and Sewer Fund,the Sanitation Fund,Solid Waste Disposal and the Golf Fund. Revenues from governmental activities increased by $6.6 million from the prior year and revenues from business type activities decreased $1.3 million from the prior year. Other miscellaneous revenue increased $6.8 million due to fund transfers and bond proceeds. Revenues from investments continue to be minimal due to low interest rates. The Basic Financial Statements The basic financial statements of the City include the government-wide financial statements and the fund financial statements. The notes to the financial statements follow the basic financial statements and are essential for the reader’s understanding of the financial statements. Other supplementary information, including the combining schedules for non-major funds and the budgetary comparison reports, are at the end of this report to provide additional information for the reader. Government-wide Financial Statements The government-wide financial statements present the results of the City’s operations using the accrual basis of accounting, the same basis as is used by private sector businesses. These statements focus on the long-term financial picture of the City as a whole. The Statement of Net Position reports all of the City’s assets and liabilities. Net position, the difference between assets and deferred outflows of resources and liabilities, are an important measure of the City’s overall financial health. Net position represents the total accumulated and unused resources available to the City for the purpose of providing services. Over time, the increases and decreases in net position can be monitored to determine if the City’s financial position is improving or deteriorating. The Statement of Activities shows how net position has changed during the fiscal year. One unique feature of this statement is how it shows the revenues and expenses related to specific programs and how much of those programs were supported by the general taxes of the City. Since this statement is prepared on the accrual basis of accounting, all revenues and expenses are included, regardless of when cash is actually received. Both statements show the operations of the City broken down between governmental and business-type activities. Governmental activities are the operations of the City generally supported by taxes, such as public safety (police,fire, and EMS), public works, 4 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 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, 2020 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 37% ($34.9 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 decreased slightly in 2020, largely due to the 2020 COVID pandemic as most services were paused temporarily. This was offset by lower expenses. Sales taxes are the next largest component of the revenue mix, providing 25%($23.4 million) of the total revenues. The City receives a 1.25% City-wide sales tax, and also a portion of the County-wide 1.5% 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 2020, this allocation decreased slightly which did not have a significant impact on the tax revenues. In 2008, Salina voters approved an increase of the special purpose .25% tax to a .40% tax. The extended tax is to sunset March 31, 2019. The tax was also modestly re-purposed, for Capital and Economic Development purposes only, as well as retaining a property tax stabilization component.In May 2017, Salina voters approved an increase in the special purpose .40% tax to a .75% tax (thus repealing the 2008 increase). This change became effective October 1, 2017 for twenty years. Property taxes are the third major component of the revenue mix, accounting for 16%($14.9 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 4.1%. The total City mill levy increased by 8.7%. The overlapping levy increased in 2019 by 0.8%. 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 $11.2 million from its peak of $39.7 million in 2007. 6 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 Motor vehicle value increased 2.5%. Motor vehicle taxes are distributed based on a formula using prior year’s tax effort (similar to the Countywide Sales Tax Distribution). The following table summarizes the comparative property assessed values and tax levy rates: Fiscal (Budget) Year 2020 2019 Change Real Estate and Personal Property Assessed Valuation 454,467,319$ 434,451,245$ 20,016,074$ City Mill Levy ($ per $1,000) Operating (General Fund)22.285 20.339 1.946 Debt Service 6.109 5.790 0.319 Total City Rate 28.394 26.129 2.265 Total Overlapping Levy 138.341 133.140 5.201 Percent Total Taxes Collected 97.2%97.4%(0.002) Ratio of Total Taxes (including delinquent collections) to taxes levied 98.6%98.6%- Motor Vehicle Valuation 54,687,311$ 53,336,677$ 1,350,634$ Comparative Property Values and Tax Levy Rates The unemployment rate in Salina increased slightly from 3.1% at the end of 2019 to 3.5% at the end of 2020, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force decreased to 25,446 from 25,643 in 2019. In 2020, the top ten property taxpayers accounted for 10.00%of total assessed value. 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 $234.4 million at December 31, 2020. This represents an increase in net assets of $2.6 million over 2019. A comparative Condensed Statement of Net Position at December 31, 2020 and 2019: 7 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 % of % of 2020-2019 2020 2019 2020 2019 2020 Total 2019 Total change Cash and investments 42,246 31,406$ 38,876$34,957$ 81,122$19%66,363$15%14,759$ Other current assets 16,910 17,201 2,082 2,512 18,992 4%19,713 4%(721) Noncurrent (capital) assets 215,438 222,258 119,118 101,079 334,556 77%323,337 81%11,219 Total assets 274,594 270,865 160,076 138,548 434,670 100%409,413 100%25,257 Total deferred outflows of 8,761 5,073 1,117 546 9,878 100%5,619 100%4,259 resources Total assets and deferred outflows of resources 283,355 275,938 161,192 139,094 444,547 415,033 29,514 Current liabilities 17,230 23,971 3,964 3,579 21,194 11%27,550 11%(6,356) Noncurrent liabilities 106,651 98,696 60,379 41,765 167,030 89%140,461 89%26,569 Total liabilities 123,881 122,667 64,343 45,344 188,224 100%168,011 100%20,213 Total deferred inflows of resources 15,392 14,913 240 198 15,632 15,112 520 Net position: Net investment in capital assets 143,559 151,527 62,368 63,301 205,927 88%214,828 91%(8,901) Restricted for permanent funds 543 528 --543 0% 528 0% 15 Restricted for debt service 1,724 1,142 1,512 1,368 3,236 1%2,510 1% 726 Unrestricted (1,744) (14,839) 26,503 28,883 24,759 11%14,044 8%10,715 Total net position 144,082 138,358 90,383 93,552 234,465 100%231,910 100%2,555 Percent of total net position 61% 60% 39% 40% 100%100% Cash and investments as a percentage of current liabilities 245% 131% 981% 977% 383%241% Governmental Activities Business-Type Activities Total Primary Government Condensed Statement of Net Position As of December 31 (in $000) 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. 8 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 In 2020, the amount of net investment in capital assets decreased by $8.9 million. Amount restricted for debt service increased by $726 thousand. Unrestricted increased by $10.7 million. Outside of these changes, 2020 resulted in a $2.6 million increase to the net position. Total liabilities increased in governmental activities and slightly decreased in business-type activities.In governmental activities,current liabilities increased and non-current liabilities decreased primarily due to an increase in temporary notes and a decrease in general obligation bonds. Statement of Activities A Condensed Statement of Activities is shown below. 2020-2019 2020 2019 2020 2019 2020 %2019 %Change Program Revenues: Charges for Services 8,400 9,730 26,513 27,423 34,913 37%37,153 42%(2,240) Operating Grants and Contributions 4,714 4,540 - -4,714 5%4,540 5%174 General Revenues: Property Taxes 14,887 13,774 - -14,887 16%13,774 16%1,113 Sales Taxes 23,448 22,742 - -23,448 25%22,742 26%706 Other Taxes 6,117 6,975 - -6,117 7%6,975 8%(858) Investment Revenue 286 670 4 - 290 0% 670 1%(380) Other Miscellaneous 8,328 1,168 447 846 8,775 9%2,014 2%6,761 Total Revenues:66,180 59,599 26,964 28,269 93,144 100%87,868 100%5,276 Expenses: General Government 10,395 10,866 - -10,395 14%10,866 14%-471 Public Safety 24,672 25,358 - -24,672 33%25,358 32%-686 Public Works 10,511 10,528 - -10,511 14%10,528 13%-17 Public Health and Sanitation 1,323 1,156 - -1,323 2%1,156 1%167 Culture and Recreation 5,034 6,879 - -5,034 7%6,879 9%-1,845 Planning and Development 2,004 2,523 - -2,004 3%2,523 3%-519 Solid Waste Disposal - -2,056 2,871 2,056 3%2,871 4%-815 Water and Sewer - -13,386 14,294 13,386 18%14,294 18%-908 Sanitation - -2,526 2,266 2,526 3%2,266 3%260 Golf Course - -805 888 805 1% 888 1%-83 Interest on Long Term Debt 2,350 2,169 - -2,350 3%2,169 3%181 Total Expenses 56,289 59,479 18,773 20,319 75,062 100%79,798 100%-4,736 Increase in net assets before transfers 9,891 121 8,191 7,950 18,082 9,414 8,668 Transfers and other extraordinary items 5,133 4,782 (5,133) (4,782)-(58)58 Change in Net Position 15,024 4,902 3,058 3,169 18,082 9,356 8,726 Net Position January 1 138,359 133,452 93,552 90,383 231,911 203,428 28,483 Prior Period Adjustment (9,303) 4 --(9,303)--9,303 Net Position January 1 restated 129,056 133,456 93,552 90,383 222,608 203,428 19,180 Net Position December 31 144,081$138,359$96,610$93,552$240,690$212,784$27,906$ Condensed Statement of Activities For the Year Ended December 31 (in $000) Governmental Activities Business-Type Activities Total Primary Government 9 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 Governmental Activities. Charges for services attributable to governmental activities totaled $8.4 million,as operating grants for those purposes were $4.7 million.Charges for services decreased and operating grants increased slightly from the prior year due to the 2020 COVID pandemic as most services were paused temporarily.The balance was funded by general revenues. Sales taxes accounted for $23.4 million of general revenues, with property taxes providing $14.9 million. The net position increased by $5.7 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, 2020 were $56.3 million compared to $59.5 million in 2020. Governmental activities represent 75%of the City’s total expenses. The largest element of governmental activity expense was public safety, accounting for 33% of the total expenses. Business Type Activities. Business-type activities are primarily supported by user charges. Total expenses for business-type activities for the year were $18.8 million, or 25% of the City’s total expenses. The majority of this expense ($13.4 million)is attributable to water and sewer operations, with the other activities costing a combined total of $5.4 million. Net position increased by $3.1 million.This increase was primarily related to an overall decrease in business-type activity expenses due to the 2020 COVID pandemic. Fund Financial Analysis Governmental Funds Fund Balances: The table below shows the Governmental Fund balances for major funds as of December 31, 2020 and December 31, 2019. Fund 2020 2019 Change General 15,142$ 9,307$ 5,835$ Tourism and Convention 327 451 (124) Special Gas 2,866 2,191 675 Sales Tax Capital 5,209 2,406 2,803 Schilling Capital Improvement 1,494 1,949 (455) Debt Service 1,724 1,142 582 Capital Projects (4,028) (7,652) 3,624 SFH QalicB 1,561 1,310 251 Other Governmental Funds 6,989 4,671 2,318 31,284$ 15,775$ 15,509$ Governmental Fund Balances as of December 31, (in 000's) Total governmental fund balances increased by $15.5 million. The reasons for these changes are varied, including lower expenses during the 2020 COVID pandemic. The Schilling Capital Improvement Fund, which was created to account for U.S. Government and other funds received for the abatement of groundwater contamination, continues to decrease as the City uses funds previously distributed. The Capital Projects Fund decrease was largely the result of the use of funds to fund capital outlays on projects. The SFH QalicB fund was created to account for funds for the Salina Field House. Revenues and Expenditures: The following table shows a comparison of revenues and expenditures (including other sources and uses) for major funds for the years ending December 31, 2020 and 2019. 10 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 Fund 2020 2019 Change Revenues (including Other Financing Sources) General 44,560$ 44,228$ 332$ Tourism and Convention 1,192 1,889 (697) Special Gas 2,209 2,027 182 Sales Tax Capital 8,871 8,501 370 Schilling Capital Improvement 7 21 (14) Debt Service 7,740 6,241 1,499 Capital Projects 8,598 11,871 (3,273) SFH QalicB 494 499 (5) Other Governmental Funds 7,757 4,745 3,012 Total Revenues 81,428 80,022 1,406 Less Other Sources (18,515) (21,247) 2,732 Revenues, net of other sources 62,913$ 58,775$ 4,138$ Expenditures (including Other Financing Uses) General 38,921$ 41,664$ (2,743)$ Tourism and Convention 1,316 1,896 (580) Special Gas 1,534 1,368 166 Sales Tax Capital 6,067 8,060 (1,993) Schilling Capital Improvement 462 208 254 Debt Service 7,155 6,950 205 Capital Projects 4,974 18,830 (13,856) SFH QalicB 244 407 (163) Other Governmental Funds 5,865 3,954 1,911 Total Expenditures 66,538 83,337 (16,799) Less Other Uses (4,271) (5,073) 802 Expenditures, net of other uses 62,267$ 78,264$ (15,997)$ Consolidated Statement of Revenues and Expenditures for Major Governmental Funds For the years ended December 31 Modified Accrual Basis (in 000's) Total revenues, including other sources, were up $4.1 million compared to 2019, with Other Governmental Funds showing the largest increase between the two years, which was $3.0 million. Total expenditures decreased $16.0 million over 2019. The majority of that decrease, $13.9 million was in the Capital Projects Fund as a result of decreased spending on projects due to the 2020 COVID pandemic. Proprietary Funds The City of Salina operates four enterprise funds as well as five internal service funds. A summarized comparative Statement of Net Position follows for each enterprise fund: 11 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 2020 2019 Change 2020 2019 Change Current Assets 8,075$ 7,073$ 1,002$ 30,396$ 28,307$ 2,089$ Capital Assets 3,335 1,497 1,838 114,104 97,956 16,148 Deferred Outflows 137 67 70 706 371 335 Total Assets and deferred outflows 11,547$ 8,637$ 2,910$ 145,206$ 126,634$ 18,572$ Current Liabilities 448$ 103$ 345$ 3,394$ 3,273$ 121$ Noncurrent Liabilities 4,929 2,865 2,064 54,285 38,016 16,269 Deferred Inflows 33 28 5 151 126 25 Total Liabilities 5,410$ 2,996$ 2,414$ 57,830$ 41,415$ 16,415$ Net investment in capital assets 910$ 1,107$ (197)$ 61,154$ 60,568$ 586$ Restricted - - - 1,175 1,368 (193) Unrestricted 5,227 4,534 693 25,046 23,283 1,763 Total Net Position 6,137$ 5,641$ 496$ 87,375$ 85,219$ 2,156$ Current Assets as percentage of current liabilities 1802% 6867%896% 865% 2020 2019 Change 2020 2019 Change Current Assets 2,395$ 2,012$ 383$ 91$ 77$ 14$ Capital Assets 1003 1165 (162)$ 675 462 213$ Deferred Outflows 164 84 80$ 110 25 85$ Total Assets and deferred outflows 3,562$ 3,261$ 301$ 876$ 564$ 312$ Current Liabilities 97$ 137$ (40)$ 25$ 66$ (41)$ Noncurrent Liabilities 833 668 165$ 330 215 115$ Deferred Inflows 41$ 35 6$ 15$ 10$ 5$ Total Liabilities 971$ 840$ 131$ 370$ 291$ 79$ Net investment in capital assets 1,003$ 1,165$ (162)$ 675$ 462$ 213$ Restricted - --- Unrestricted 1588 1256 332$ (169)(187)$18$ Total Net Position 2,591$ 2,421$ 170$ 506$ 275$ 231$ Current Assets as percentage of current liabilities 2469%1469%364% 117% Sanitation Golf Course Comparative Summary Statement of Net Position as of December 31 (in $000's) Solid Waste Disposal Water and Sewer 12 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 Revenues, Expenses, and Changes in Net Position All enterprise funds show healthy results, with all funds reflecting increases in net position. 2020 2019 Change 2020 2019 Change Operating Revenues 3,322$ 3,499$ (177)$ 19,504$ 20,588$ (1,084)$ Operating Expenses 2,011 2,849 (838)12,460 13,013 (553) Operating Income 1,311 650 661 7,044 7,575 (531) Non-operating revenues (expenses)(45)(22) (23)(922)(1281)359 Income (Loss) before Transfers 1,266 627 639 6,122 6294 (172) Transfers in (out)(2,729)(640)(2,089) (2,006)(3,650)1,644 Change in Net Position (1,463)(13)(1,450)4,116 2644 1,472 Net Position January 1 5,640 5,653 (13)85,219 82,580 2,639 Restatement 1,960 -1,960 (1,960)(5)(1,960) Net Position January 1, restated 7,600 5,653 1,947 83,259 82,575 684 Net Position December 31 6,137$ 5,640$ 497$ 87,375$ 85,219$ 2,156$ 2020 2019 Change 2020 2019 Change Operating Revenues 3,194$ 3,276$ (82)$ 939$ 907$ 32$ Operating Expenses 2,526 2,266 260 805 888 (83) Operating Income 668 1,010 (342)134 19 115 Non-operating revenues (expenses)- - - - - 0 Income (Loss) before Transfers 668 1010 (342)134 19 115 Transfers in (out)(497)(492)(5)100 - - Change in Net Position 171 519 (348)234 19 215 Net Position January 1 2,421 1,897 524 272 253 19 Restatement - 5 - - - - Net Position January 1, restated 2,421 1,902 519 272 253 19 Net Position December 31 2,592$ 2,421$ 171$ 506$ 272$ 234$ Sanitation Golf Course Comparative Summary of Revenue, Expenses and Changes in Net Position for the Year Ended December 31 (in 000's) Solid Waste Disposal Water and Sewer 13 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 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, 2020. 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, 2020 was $334,555,753 net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets at December 31, 2020 and 2019: 2020 2019 2020 2019 2020 2019 Equipment, Furniture and Fixtures 2,309$ 2,352$ 1,280$ 1,536$ 3,589$ 3,888$ Vehicles 2,676 2,854 1,079 1,288 3,755 4,142 Buildings and Improvements 29,218 30,556 8,103 8,519 37,321 39,075 Land 24,224 24,224 2,386 2,386 26,610 26,610 Leased land under capital leases 423 423 - -423 Infrastructure 130,010 116,264 78,294 79,823 208,304 196,087 Leasehold Improvements 357 357 - -357 Construction in Progress 26,221 35,302 27,976 7,527 54,197 42,829 Total 215,438$ 212,332$ 119,118$ 101,079$ 334,556$ 312,631$ Governmental Activity Business-Type Activity Total Capital Assets Balances Net of Depreciation as of December 31 (in $000's) Changes to capital assets may be summarized as follows: Governmental Business-Type Activity Activity Total Additions 27,118 23,416 50,534 Retirements (18,281)(1,558)(19,839) Depreciation (5,731)(3,819) (9,550) Net Additions 3,106$18,039$ 21,145$ Changes to Capital Assets, 2020 (in $000's) 14 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 Additional information on the City’s capital assets can be found in Note 4,D. of the notes to the basic financial statements. 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, 2020 totaled $68,438,971. In addition, there were temporary notes outstanding in the amount of $7,050,000, as well as a financing operating lease in the amount of $583,725. Business-type activities had $10,341,160 in revenue bonds outstanding, as well as $9,107,990 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 $6,044,214. The City engaged in the following debt transactions during 2020: On April 29th, the City issued 2020-1, $7,050,000 of temporary notes. The proceeds were used to finance construction to Pheasant Ridge Addition 3, Police Training Facility, and Stone Lake 2. On April 29th, the City issued 2020A, $5,450,610 in General Obligation Bonds to finance construction costs for Landfill Cell, the Police Parking Lot, Golf Irrigation and 9th Street Bridge Design, as well as to finance the Smoky Hill River Design. On November 19th, the City issued 2020B, $9,043,333 in General Obligation Bonds to finance construction costs for the Radio Project, Quint, SCBA, as well as to finance the 2012A Refunding -Magnolia. Additional information on the City’s debt can be found in Note 4, E. of the notes to the basic financial statements. Requests for Information This financial report is intended to give the reader a general overview of the City’s finances. Questions about information in this report or requests for additional information should be directed to the Director of Finance, Room 206, 300 West Ash Street, Salina, Kansas, 67401. 15 BASIC FINANCIAL STATEMENTS Total Total Total Salina Salina Governmental Business-type Primary Housing Airport Activities Activities Government Authority Authority ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets: Cash and investments 42,246,017$ 38,875,629$ 81,121,646$ 2,047,865$ 2,255,880$ Receivables (net of allowance for uncollectibles) Accounts 1,916,733 1,664,390 3,581,123 25,280 390,970 Taxes 14,362,079 -14,362,079 -- Interest 10,392 16 10,408 -- Inventory 284,987 417,947 702,934 31,898 - Restricted cash and investments 335,497 -335,497 -- Prepaid expenses ---110,640 15,700 Total current assets 59,155,705 40,957,982 100,113,687 2,215,683 2,662,550 Noncurrent assets: Capital assets, nondepreciable Construction in progress 26,221,157 27,975,938 54,197,095 136,666 205,592 Land 24,646,334 2,386,334 27,032,668 1,557,554 9,874,567 Capital assets, depreciable 297,446,919 163,770,396 461,217,315 8,934,888 82,625,316 Less: Accumulated depreciation 132,876,276 75,015,049 207,891,325 5,362,214 50,444,301 Total noncurrent assets 215,438,134 119,117,619 334,555,753 5,266,894 42,261,174 Total assets 274,593,839 160,075,601 434,669,440 7,482,577 44,923,724 Deferred outflows of resources: KPERS OPEB deferred outflows of resources 135,741 55,982 191,723 -4,727 OPEB deferred outflows of resources 148,419 24,797 173,216 -- Pension deferred outflows of resources 8,471,181 1,035,819 9,507,000 57,444 214,164 Deferred charge on bond issuance 5,990 -5,990 -1,013,821 Total deferred outflows of resources 8,761,331 1,116,598 9,877,929 57,444 1,232,712 Total assets and deferred outflows of resources 283,355,170$ 161,192,199$ 444,547,369$ 7,540,021$ 46,156,436$ Liabilities: Current liabilities: Accounts payable 1,718,179$ 562,153$ 2,280,332$ 45,583$ 125,641$ Retainage payable 1,687,819 211,528 1,899,347 -- Accrued liabilities 788,446 -788,446 52,903 146,669 Accrued interest payable 61,875 447,048 508,923 -211,244 Deposits payable -285,259 285,259 93,237 - Current portion of compensated absences 1,224,971 273,001 1,497,972 3,068 51,799 Current portion of temporary notes payable 7,050,000 -7,050,000 -- Current portion of loans payable -375,071 375,071 -39,942 Current portion of revenue bonds payable -750,000 750,000 -- Current portion of special assessment debt payable ----2,455 Current portion of general obligation bonds payable 4,699,145 1,060,100 5,759,245 -3,730,000 Total current liabilities 17,230,435 3,964,160 21,194,595 194,791 4,307,750 Noncurrent liabilities: Accrued liabilities 263,049 -263,049 65,926 - Compensated absences 1,472,035 321,310 1,793,345 27,617 - Security deposits returnable ----83,989 OPEB obligation 3,097,540 517,514 3,615,054 -13,924 KPERS OPEB obligation 402,677 194,767 597,444 7,657 - Net pension liability 34,571,390 3,854,606 38,425,996 319,900 715,670 Loans payable 12,212,979 35,550,958 47,763,937 -420,058 Revenue bonds payable -8,865,000 8,865,000 -- Special assessment debt payable ----- General obligation bonds payable 54,631,836 8,774,050 63,405,886 -19,351,436 Landfill post-closure care liabilities -2,300,353 2,300,353 -- Total noncurrent liabilities 106,651,506 60,378,558 167,030,064 421,100 20,585,077 Total liabilities 123,881,941 64,342,718 188,224,659 615,891 24,892,827 Deferred inflows of resources: Unavailable revenue - property taxes 13,876,740 -13,876,740 53,442 - KPERS OPEB deferred inflows of resources 57,734 27,926 85,660 -- OPEB deferred inflows of resources 273,521 45,698 319,219 -7,961 Pension deferred inflows of resources 1,183,831 165,880 1,349,711 25,447 58,465 Total deferred inflows of resources 15,391,826 239,504 15,631,330 78,889 66,426 Total liabilities and deferred inflows of resources 139,273,767$ 64,582,222$ 203,855,989$ 694,780$ 24,959,253$ Net Position Net investment in capital assets 143,558,677$ 63,742,440$ 207,301,117$ 5,266,894$ 18,717,283$ Restricted for: Permanent funds: Expendable 542,755 -542,755 100,183 - Debt service 1,724,117 1,175,378 2,899,495 -- Unrestricted [1,744,146] 31,692,159 29,948,013 1,478,164 2,479,900 Total net position 144,081,403$ 96,609,977$ 240,691,380$ 6,845,241$ 21,197,183$ Primary Government CITY OF SALINA, KANSAS STATEMENT OF NET POSITION December 31, 2020 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 10,394,607$ 3,338,860$ 1,201,206$ -$[5,854,541]$ -$[5,854,541]$ -$-$ Public safety 24,671,916 4,325,391 1,477,850 -[18,868,675]-[18,868,675]-- Public works 10,510,841 294,108 1,334,047 -[8,882,686]-[8,882,686]-- Public health and sanitation 1,322,698 49,388 221,982 -[1,051,328]-[1,051,328]-- Culture and recreation 5,033,513 279,296 294,037 -[4,460,180]-[4,460,180]-- Planning and development 2,004,435 113,262 185,227 -[1,705,946]-[1,705,946]-- Interest on long-term debt 2,349,539 ---[2,349,539] -[2,349,539]-- Total governmental activities 56,287,549 8,400,305 4,714,349 -[43,172,895]-[43,172,895]-- Business-type activities: Solid Waste Disposal 2,055,825 3,289,539 ---1,233,714 1,233,714 -- Water and Sewer 13,386,267 19,448,780 ---6,062,513 6,062,513 -- Sanitation 2,526,129 3,193,904 ---667,775 667,775 -- Golf Course 804,973 581,232 ---[223,741] [223,741] -- Total business-type activities 18,773,194 26,513,455 ---7,740,261 7,740,261 -- Total primary government 75,060,743$ 34,913,760$4,714,349$ -$[43,172,895]7,740,261 [35,432,634] -- Component units: Salina Housing Authority 2,889,339$ 393,634$ 2,319,183$ 113,963$ ---[62,559] - Salina Airport Authority 8,700,408 2,652,346 - 2,100,818 ----[3,947,244] Total component units 11,589,747$ 3,045,980$ 2,319,183$ 2,214,781$ ---[62,559] [3,947,244] General Revenues: Property taxes levied for General purposes 10,308,086 -10,308,086 -2,639,481 Debt service 3,058,231 -3,058,231 -- Motor vehicle tax General purposes 1,520,297 -1,520,297 -- Sales tax General purposes 13,697,179 -13,697,179 -- Selective purposes 9,751,294 -9,751,294 -- Other taxes General purposes 6,117,168 -6,117,168 -- Investment revenues 285,623 4,144 289,767 22,125 2,161 Miscellaneous 8,328,452 446,477 8,774,929 108,417 - Transfers, net 5,132,726 [5,132,726] --- Subtotal general revenues 58,199,056 [4,682,105] 53,516,951 130,542 2,641,642 Change in net position 15,026,161 3,058,156 18,084,317 67,983 [1,305,602] Net position - beginning 138,358,514 93,551,821 231,910,335 6,777,258 22,502,785 Prior period adjustment [9,303,272] -[9,303,272]-- Net position - beginning, restated 129,055,242 93,551,821 222,607,063 6,777,258 22,502,785 Net position - ending 144,081,403$96,609,977$ 240,691,380$6,845,241$21,197,183$ Changes in Net Position Component UnitsPrimary GovernmentProgram Revenues CITY OF SALINA, KANSAS STATEMENT OF ACTIVITIES For the Year Ended December 31, 2020 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 13,353,397$ 854$ 2,580,212$ 6,534,049$ Restricted cash ---- Receivables (net) Accounts 1,587,438 326,008 -- Taxes 10,934,927 -305,807 - Interest 10,392 --- Inventory 183,768 --- Due from other funds 31,989 --- Total assets 26,101,911$ 326,862$ 2,886,019$ 6,534,049$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable 145,736$ -$20,116$ 24,791$ Retainage payable ---1,299,766 Temporary notes payable ---- Due to other funds ---- Total liabilities 145,736 -20,116 1,324,557 Deferred inflows of resources Unavailable revenue - property taxes 10,737,173 --- Unavailable revenue - other 76,739 --- Total deferred inflows of resources 10,813,912 --- Fund balance: Nonspendable 183,768 --- Restricted -326,862 2,233,811 - Committed ---4,065,778 Assigned 244,434 -632,092 1,143,714 Unassigned 14,714,061 --- Total fund balances 15,142,263 326,862 2,865,903 5,209,492 Total liabilities, deferred inflows of resources and fund balances 26,101,911$ 326,862$ 2,886,019$ 6,534,049$ CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2020 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds 1,493,977$ 1,665,599$ 4,656,684$ 3,918$ 7,239,668$ 37,528,358$ ---335,497 -335,497 ---1,235,034 3,287 3,151,767 -3,121,345 ---14,362,079 -----10,392 -----183,768 -----31,989 1,493,977$ 4,786,944$ 4,656,684$ 1,574,449$ 7,242,955$ 55,603,850$ -$-$1,260,261$ -$221,525$ 1,672,429$ --374,230 13,823 -1,687,819 --7,050,000 --7,050,000 ----31,989 31,989 --8,684,491 13,823 253,514 10,442,237 -3,062,827 ---13,800,000 -----76,739 -3,062,827 ---13,876,739 -----183,768 -1,724,117 --695,513 4,980,303 1,493,977 --1,560,626 6,104,669 13,225,050 ----189,259 2,209,499 --[4,027,807] --10,686,254 1,493,977 1,724,117 [4,027,807] 1,560,626 6,989,441 31,284,874 1,493,977$ 4,786,944$ 4,656,684$ 1,574,449$ 7,242,955$ 55,603,850$ 18 The notes to the basic financial statements are an integral part of this statement. Total Governmental Fund Balances 31,284,874$ 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 5,990 Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds The cost of capital assets is 348,146,176 Accumulated depreciation is 132,722,313 215,423,863 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.8,705,364 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.[1,505,440] Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit.[1,235,034] 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.3,549,304 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 2,666,706 Net OPEB obligation 3,491,494 Net pension liability 34,383,483 Bonds payable 59,330,981 Loans payable 12,212,979 Accrued interest on the bonds 61,875 [112,147,518] Net Position of Governmental Activities 144,081,403$ CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION OF GOVERNMENTAL ACTIVITIES December 31, 2020 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 10,139,044$ -$-$-$ Delinquent taxes 169,042 --- Motor vehicle taxes 1,189,598 --- General sales taxes 13,697,179 --- Selective sales taxes ---8,624,465 Other taxes 4,925,381 1,191,787 -- Intergovernmental 2,453,021 -1,328,977 - Special assessments ---- Licenses and permits ---- Charges for services 4,942,217 --- Investment revenue 256,515 --- Donations ---- Miscellaneous 981,845 -720,243 246,159 Total revenues 38,753,842 1,191,787 2,049,220 8,870,624 EXPENDITURES: Current General government 5,505,967 --- Public safety 22,435,061 --- Public works 5,101,204 -355,565 - Public health and sanitation 682,439 --- Culture and recreation 3,037,594 --- Planning and development 673,564 726,743 -- Miscellaneous ---- Capital outlay 608,460 -1,178,730 3,262,657 Debt service Principal retirement ---- Interest and other charges ---- Total expenditures 38,044,289 726,743 1,534,295 3,262,657 Excess [deficiency] of revenue and other sources over [under] expenditures and other [uses]709,553 465,044 514,925 5,607,967 OTHER FINANCING SOURCES [USES] Issuance of bonds ---- Bond premium ---- Transfers in 5,806,300 -160,000 - Transfers [out][877,000] [589,252] -[2,804,350] Total other financing sources [uses]4,929,300 [589,252] 160,000 [2,804,350] Net change in fund balance 5,638,853 [124,208] 674,925 2,803,617 Fund balance - Beginning of year 9,307,174 451,070 2,190,978 2,405,875 Prior period adjustment 196,236 --- Fund balance - Beginning of year, restated 9,503,410 451,070 2,190,978 2,405,875 Fund balance - End of year 15,142,263$ 326,862$ 2,865,903$ 5,209,492$ CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31, 2020 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds -$3,010,914$ -$-$-$13,149,958$ -47,317 ---216,359 -330,699 ---1,520,297 -----13,697,179 ----1,126,829 9,751,294 -----6,117,168 ----1,535,238 5,317,236 -1,511,279 ---1,511,279 ----5,070 5,070 ---492,917 121,417 5,556,551 7,005 --967 21,136 285,623 ----129,193 129,193 --130,108 -3,577,577 5,655,932 7,005 4,900,209 130,108 493,884 6,516,460 62,913,139 -----5,505,967 -----22,435,061 ----625,362 6,082,131 ----597,804 1,280,243 ----1,207,431 4,245,025 ---16,652 376,545 1,793,504 -53,301 --1,300,661 1,353,962 462,374 -4,760,797 26,983 1,741,294 12,041,295 -5,163,995 ---5,163,995 -1,937,284 213,299 200,044 15,496 2,366,123 462,374 7,154,580 4,974,096 243,679 5,864,593 62,267,306 [455,369] [2,254,371] [4,843,988] 250,205 651,867 645,833 -1,206,882 7,513,405 --8,720,287 --468,404 --468,404 -1,629,188 486,426 -1,241,413 9,323,327 -----[4,270,602] -2,836,070 8,468,235 -1,241,413 14,241,416 [455,369] 581,699 3,624,247 250,205 1,893,280 14,887,249 1,949,346 1,142,418 [7,652,054] 1,310,421 4,670,517 15,775,745 ----425,644 621,880 1,949,346 1,142,418 [7,652,054] 1,310,421 5,096,161 16,397,625 1,493,977$ 1,724,117$ [4,027,807]$ 1,560,626$ 6,989,441$ 31,284,874$ The notes to the basic financial statements are an integral part of this statement. 20 Total Net Change In Fund Balances - Governmental Funds 14,887,249$ 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 [34,933] Capital outlays 9,188,324 Depreciation expense [5,881,296] 3,272,095 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.16,584 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 funds are reported with governmental activities.983,576 Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit.[712,617] 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.168,922 Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities.[1,817,189] 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.[8,982,222] 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.7,209,763 Changes In Net Position of Governmental Activities 15,026,161$ 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, 2020 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Real estate taxes 10,139,044$ 10,269,618$ 10,269,618$ [130,574]$ Delinquent taxes 169,042 160,000 160,000 9,042 Motor vehicle taxes 1,183,360 1,148,859 1,148,859 34,501 General sales tax 13,697,179 13,119,090 13,119,090 578,089 Other taxes 4,925,381 7,200,990 7,200,990 [2,275,609] Intergovernmental 2,453,021 1,155,255 1,155,255 1,297,766 Charges for services 3,710,836 5,931,339 5,931,339 [2,220,503] Investment revenue 254,767 140,000 140,000 114,767 Miscellaneous 981,842 513,496 513,496 468,346 Total revenues 37,514,472 39,638,647 39,638,647 [2,124,175] Expenditures General government 4,336,448 5,627,624 5,627,624 1,291,176 Public safety 22,434,733 22,669,448 22,669,448 234,715 Public works 5,044,769 4,552,934 4,552,934 [491,835] Public health and sanitation 682,439 - - [682,439] Culture and recreation 3,050,289 7,911,847 7,911,847 4,861,558 Planning and development 553,972 3,099,280 3,099,280 2,545,308 Capital outlay 608,460 4,746,430 4,746,430 4,137,970 Total expenditures 36,711,110 48,607,563 48,607,563 11,896,453 Excess [deficiency] of revenues over [under] expenditures 803,362 [8,968,916] [8,968,916] 9,772,278 Other financing sources [uses] Transfers in 5,806,300 4,366,550 4,366,550 1,439,750 Transfers [out][877,000] [905,500] [905,500] 28,500 Total other financing sources [uses]4,929,300 3,461,050 3,461,050 1,468,250 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]5,732,662 [5,507,866] [5,507,866] 11,240,528 Unreserved fund balance, January 1, restated 7,185,815 5,507,866 5,507,866 1,677,949 Unreserved fund balance, December 31 12,918,477 -$ -$ 12,918,477$ Reconciliation to GAAP Interest receivable 10,392 Accounts receivable 1,587,438 Taxes receivable 10,934,927 Inventory 183,768 Deferred revenue [10,737,173] Current year encumbrances 244,434 GAAP Fund Balance, December 31 15,142,263$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Other taxes 1,315,996$ 1,900,000$ 1,900,000$ [584,004]$ Total revenues 1,315,996 1,900,000 1,900,000 [584,004] Expenditures Planning and development 726,743 1,045,000 1,045,000 318,257 Total expenditures 726,743 1,045,000 1,045,000 318,257 Excess [deficiency] of revenues over [under] expenditures 589,253 855,000 855,000 [265,747] Other financing sources [uses] Transfers [out][589,252] [855,000] [855,000] 265,748 Total other financing sources [uses][589,252] [855,000] [855,000] 265,748 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]1 - - 1 Unreserved fund balance, January 1 853 853 853 - Unreserved fund balance, December 31 854 853$ 853$ 1$ Reconciliation to GAAP Accounts receivable 326,008 GAAP Fund Balance, December 31 326,862$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 1,351,092$ 1,330,760$ 1,330,760$ 20,332$ Miscellaneous 720,243 --720,243 Investment revenue -3,000 3,000 [3,000] Total revenues 2,071,335 1,333,760 1,333,760 737,575 Expenditures Public works 355,565 486,950 486,950 131,385 Capital outlay 1,740,235 1,181,243 1,181,243 [558,992] Total expenditures 2,095,800 1,668,193 1,668,193 [427,607] Excess [deficiency] of revenues over [under] expenditures [24,465][334,433][334,433]309,968 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] expenditures and other [uses]135,535 [174,433] [174,433]309,968 Unreserved fund balance, January 1 1,792,469 1,867,816 1,867,816 [75,347] Unreserved fund balance, December 31 1,928,004 1,693,383$ 1,693,383$ 234,621$ Reconciliation to GAAP Taxes receivable 305,807 Current year encumbrances 632,092 GAAP Fund Balance, December 31 2,865,903$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Selective sales taxes 8,624,465$ 8,332,539$ 8,332,539$ 291,926$ Miscellaneous 246,159 --246,159 Total revenues 8,870,624 8,332,539 8,332,539 538,085 Expenditures Capital outlay 3,666,919 5,050,000 5,050,000 1,383,081 Total expenditures 3,666,919 5,050,000 5,050,000 1,383,081 Excess [deficiency] of revenues over [under] expenditures 5,203,705 3,282,539 3,282,539 1,921,166 Other financing sources [uses] Transfers [out][2,804,350][3,169,350][3,169,350]365,000 Total other financing sources [uses][2,804,350][3,169,350][3,169,350]365,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]2,399,355 113,189 113,189 2,286,166 Unreserved fund balance, January 1 1,666,423 1,882,941 1,882,941 [216,518] Unreserved fund balance, December 31 4,065,778 1,996,130$ 1,996,130$ 2,069,648$ Reconciliation to GAAP Current year encumbrances 1,143,714 GAAP Fund Balance, December 31 5,209,492$ 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 7,876,671$ 28,759,645$ 2,175,043$64,270$ 38,875,629$ 4,717,659$ Receivables (net of allowance for uncollectibles) Accounts 198,287 1,246,160 219,943 - 1,664,390 - Interest 16 - - - 16 - Inventory and prepaid supplies - 390,729 - 27,218 417,947 101,219 Total current assets 8,074,974 30,396,534 2,394,986 91,488 40,957,982 4,818,878 Capital assets: Nondepreciable capital assets: Construction in progress 1,991,469 25,727,684 - 256,785 27,975,938 - Land 682,000 1,689,334 - 15,000 2,386,334 - Depreciable capital assets: Capital assets 11,313,026 148,639,879 2,564,420 1,253,071 163,770,396 168,234 Less: accumulated depreciation 10,651,410 61,953,107 1,560,935 849,597 75,015,049 153,963 Total capital assets 3,335,085 114,103,790 1,003,485 675,259 119,117,619 14,271 Total assets 11,410,059 144,500,324 3,398,471 766,747 160,075,601 4,833,149 Deferred outflows of resources: KPERS OPEB deferred outflows of resources 6,749 33,434 7,745 8,054 55,982 2,507 OPEB deferred outflows of resources 2,758 16,409 4,635 995 24,797 - Pension deferred outflows of resources 127,859 655,717 151,656 100,587 1,035,819 47,470 Total deferred outflows of resources 137,366 705,560 164,036 109,636 1,116,598 49,977 Total assets and deferred outflows of resources 11,547,425$145,205,884$ 3,562,507$876,383$ 161,192,199$ 4,883,126$ Liabilities and deferred inflows of resources: Current liabilities Accounts payable 19,524$ 509,657$ 25,449$ 7,523$ 562,153$ 45,750$ Retainage payable - 211,528 - - 211,528 - Interest payable 38,747 408,301 - - 447,048 - Meter deposits payable - 285,259 - - 285,259 - Current portion of compensated absences payable 19,825 164,516 71,543 17,117 273,001 13,919 Current portion of accrued claims payable - - - - - 788,446 Current portion of loans payable - 375,071 - - 375,071 - Current portion of general obligation bonds payable 370,000 690,100 - - 1,060,100 - Current portion of revenue bonds payable - 750,000 - - 750,000 - Total current liabilities 448,096 3,394,432 96,992 24,640 3,964,160 848,115 Noncurrent liabilities: Compensated absences payable 23,333 193,628 84,202 20,147 321,310 16,382 Accrued claims payable - - - - - 263,049 OPEB obligation 57,567 342,458 96,728 20,761 517,514 - KPERS OPEB obligation 23,480 116,322 26,945 28,020 194,767 8,723 Net pension liability 469,022 2,498,445 625,434 261,705 3,854,606 187,907 Payable from restricted assets Loans payable - 35,550,958 - - 35,550,958 - General obligation bonds payable 2,055,388 6,718,662 - - 8,774,050 - Revenue bonds payable - 8,865,000 - - 8,865,000 - Landfill post-closure care liabilities 2,300,353 - - - 2,300,353 - Total noncurrent liabilities 4,929,143 54,285,473 833,309 330,633 60,378,558 476,061 Total liabilities 5,377,239 57,679,905 930,301 355,273 64,342,718 1,324,176 Deferred inflows of resources KPERS OPEB deferred inflows of resources 3,366 16,678 3,864 4,018 27,926 1,251 OPEB deferred inflows of resources 5,084 30,240 8,541 1,833 45,698 - Pension deferred inflows of resources 24,429 103,622 28,575 9,254 165,880 8,395 Total deferred inflows of resources 32,879 150,540 40,980 15,105 239,504 9,646 Total liabilities and deferred inflows of resources 5,410,118$ 57,830,445$ 971,281$ 370,378$ 64,582,222$ 1,333,822$ Net position Net investment in capital assets 909,697$ 61,153,999$ 1,003,485$675,259$ 63,742,440$ 14,271$ Restricted Restricted for bond retirement - 1,175,378 - - 1,175,378 - Unrestricted 5,227,610 25,046,062 1,587,741 [169,254] 31,692,159 3,535,033 Total net position 6,137,307$ 87,375,439$ 2,591,226$506,005$ 96,609,977$ 3,549,304$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2020 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 3,289,539$ 19,448,780$3,193,904$581,232$ 26,513,455$ 8,253,233$ Miscellaneous 32,720 55,774 49 357,934 446,477 42,179 Total operating revenues 3,322,259 19,504,554 3,193,953 939,166 26,959,932 8,295,412 Operating expenses General government -----7,391,474 Public works 1,858,197 8,916,947 2,364,751 -13,139,895 - Recreation ---761,739 761,739 - Depreciation 152,926 3,543,387 161,378 43,234 3,900,925 362 Total operating expenses 2,011,123 12,460,334 2,526,129 804,973 17,802,559 7,391,836 Operating income [loss]1,311,136 7,044,220 667,824 134,193 9,157,373 903,576 Nonoperating revenues [expenses] Investment revenue -4,144 --4,144 - Interest expense [44,702] [1,005,565] --[1,050,267] - Accretion of bond premium -89,557 --89,557 - Amortization of bond issuance costs -[9,925]--[9,925] - Total nonoperating revenues [expenses][44,702] [921,789]--[966,491] - Income [loss] before transfers 1,266,434 6,122,431 667,824 134,193 8,190,882 903,576 Transfers from [to] other funds Transfers in ---100,000 100,000 80,000 Transfers [out][2,729,588] [2,005,788] [497,350] -[5,232,726]- Total transfers [2,729,588] [2,005,788] [497,350] 100,000 [5,132,726] 80,000 Change in net position [1,463,154] 4,116,643 170,474 234,193 3,058,156 983,576 Net position, January 1 5,640,478 85,218,779 2,420,752 271,812 93,551,821 2,565,728 Prior period adjustment 1,959,983 [1,959,983] ---- Net position, January 1, restated 7,600,461 83,258,796 2,420,752 271,812 93,551,821 2,565,728 Net position, December 31 6,137,307$ 87,375,439$2,591,226$506,005$ 96,609,977$ 3,549,304$ 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, 2020 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 3,289,574$19,836,614$3,231,339$581,232$ 26,938,759$8,503,738$ Cash paid to suppliers of goods or services [894,526] [4,593,856] [1,412,277][288,026] [7,188,685] [7,085,946] Cash paid to employees [688,626] [3,908,975] [901,478] [468,228] [5,967,307] [274,765] Other operating receipts 32,720 55,774 49 357,934 446,477 42,179 Net cash provided by [used in] operating activities 1,739,142 11,389,557 917,633 182,912 14,229,244 1,185,206 Cash flows from capital and related financing activities Purchase and construction of capital assets [31,486] [21,561,398]-[256,785][21,849,669]- Proceeds from bonds 2,070,388 4,370,151 -- 6,440,539 - Proceeds from loans -18,475,072 --18,475,072 - Principal payments - loans -[5,088,730]--[5,088,730]- Principal payments - general obligation bonds [35,000] [1,414,063] --[1,449,063]- Principal payments - revenue bonds -[781,015]--[781,015] - Interest paid [11,217] [917,878]--[929,095] - Net cash provided by [used in] capital and related financing activities 1,992,685 [6,917,861] -[256,785][5,181,961] - Cash flows from investing activities Interest received -4,144 --4,144 - Cash flows from noncapital financing activities Transfers in ---100,000 100,000 80,000 Transfers [out][2,729,588][2,005,788] [497,350] -[5,232,726]- Net cash provided by [used in] noncapital financing activities [2,729,588][2,005,788] [497,350] 100,000 [5,132,726]80,000 Net increase [decrease] in cash and cash equivalents 1,002,239 2,470,052 420,283 26,127 3,918,701 1,265,206 Cash and cash equivalents, January 1 6,874,432 26,289,593 1,754,760 38,143 34,956,928 3,452,453 Cash and cash equivalents, December 31 7,876,671$28,759,645$2,175,043$64,270$ 38,875,629$4,717,659$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS For the Year Ended December 31, 2020 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]1,311,136$ 7,044,220$ 667,824$ 134,193$ 9,157,373$ 903,576$ Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense 152,926 3,543,387 161,378 43,234 3,900,925 362 [Increase] decrease in accounts receivable 35 332,022 37,435 -369,492 - [Increase] decrease in inventory -48,494 -11,203 59,697 26,673 [Increase] decrease in deferred outflows [70,780] [344,505][80,102] [85,115][580,502][24,376] Increase [decrease] in accounts payable [6,918] 121,544 [3,711] 3,044 113,959 [660] Increase [decrease] in retainage payable -58,119 --58,119 - Increase [decrease] in accrued compensated absences [6,276] [17,252]7,760 [46,560] [62,328][1,145] Increase [decrease] in claims payable -----250,505 Increase [decrease] in net pension liability 85,168 421,937 97,737 101,638 706,480 31,639 Increase [decrease] in net KPERS OPEB obligation 8,288 9,979 1,625 17,892 37,784 [1,405] Increase [decrease] in net OPEB obligation 8,891 91,333 21,418 [1,808] 119,834 - Increase [decrease] in meter deposits payable -55,812 --55,812 - Increase [decrease] in deferred inflows 5,215 24,467 6,269 5,191 41,142 37 Net cash provided by [used in] operating activities 1,739,142$ 11,389,557$917,633$ 182,912$ 14,229,244$1,185,206$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31, 2020 The notes to the basic financial statements are an integral part of this statement. 29 Custodial Fund ASSETS Cash and investments 751$ Total assets 751 LIABILITIES AND NET POSITION Liabilities Accounts payable - Total liabilities - NET POSITION Restricted for individuals, organizations and other governments 751$ December 31, 2020 CITY OF SALINA, KANSAS STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS The notes to the basic financial statements are an integral part of this statement. 30 Custodial Fund ADDITIONS Miscellaneous 7,314$ Total additions 7,314 DEDUCTIONS Contractual services 5,551 Total deductions 5,551 Change in net position 1,763 Net position, January 1 [1,012] Net position, December 31 751$ CITY OF SALINA, KANSAS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS December 31, 2020 The notes to the basic financial statements are an integral part of this statement. 31 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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, 2020. 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. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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, 2020 1,928,199$ Total change in unencumbered cash, year ended December 31, 2020 331,741 Total cash receipts, year ended December 31, 2020 1,636,400 Total cash receipts from City of Salina 502,042 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. 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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. The fiduciary funds are used by the City to accounts for resources held by the City for the benefit of a third part. Because the resources of these funds are not available for the City’s operations, they are not presented in the government-wide financial statements. The City’s lone fiduciary fund is reported as a custodial fund. 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. 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. 35 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C.Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) 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. Additionally, the City reports the following as a fiduciary fund: Fire insurance proceeds 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. 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 2021. 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. 36 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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. 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 183,768$ -$ -$ -$ -$ -$ -$ -$ -$ 183,768$ Restricted for: Public works - - 2,233,811 - - - - - - 2,233,811 Public health and sanitation - - - - - - - - 234 234 Culture and recreation - - - - - - - - 465,773 465,773 Planning and development - 326,862 - - - - - - 228,706 555,568 Debt payments - - - - - 1,724,117 - - 800 1,724,917 Committed for: Public safety - - - - - - - - 214,419 214,419 Culture and recreation - - - - - - - - 734,724 734,724 Planning and development - - - - - - - 1,560,626 364,668 1,925,294 Cemetery - - - - - - - - 536,838 536,838 Capital improvements - - - 4,065,778 1,493,977 - - - 4,254,020 9,813,775 Assigned for: General government 20,863 - - - - - - - - 20,863 Public safety 37,672 - - - - - - - 176,649 214,321 Public works - - - - - - - - - - Culture and recreation 12,695 - - - - - - - 12,610 25,305 Capital improvements 173,204 - 632,092 1,143,714 - - - - - 1,949,010 Unassigned:14,714,061 - - - - - [4,027,807] - - 10,686,254 Total Fund Balances 15,142,263$326,862$ 2,865,903$5,209,492$1,493,977$1,724,117$[4,027,807]$1,560,626$6,989,441$ 31,284,874$ Major Governmental Funds 39 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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. 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 2020 budget was amended for the Business Improvement District, Bicentennial Center and Sanitation 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, permanent funds, and the following special revenue funds: Community Development Revolving, Downtown TIF District #1, South 9th CID,Downtown CID, Alley CID, Downtown Hotel CID,STAR Bonds Subprojects, 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, Animal Shelter Donations, Special Assessments Escrow, Court Bond and Restitution, Police Investigation Account, Citizenship, DTF Local, DTF Reserve, Beechcraft Remediation Settlement and Bail Bond Escrow funds. A legal operating budget is not required for Internal Service Funds, however, 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, 2020, the statutory limit for the City was $152,746,389, providing a debt margin of $86,997,826. 41 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 3. RESTATEMENT OF EQUITY During the year ended December 31, 2020, the City implemented GASB Statement No. 84, Fiduciary Activities. The principal objective of this Statement is to enhance the consistency and comparability of fiduciary activity reporting by state and local governments. This Statement is also intended to improve the usefulness of fiduciary activity information primarily for assessing the accountability of governments in their roles as fiduciaries. As a result of the implementation, ten of the City’s fiduciary funds combined with the General Fund or were reclassified as special revenue funds and their fund balances as of January 1, 2019, were restated. Also during the year ended December 31, 2020, 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: Other Solid Governmental Governmental Waste Water and Activities General Funds Disposal Sewer Net Position/Fund Balance, 138,358,514$9,307,174$4,670,517$ 5,640,478$85,218,779$ December 31, 2019 Prior Period Adjustment [9,303,272] 196,236 425,644 1,959,983 [1,959,983] Net Position/Fund Balance, December 31, 2019, Restated 129,055,242$9,503,410$5,096,161$ 7,600,461$83,258,796$ 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, 2020, the City has the following investments: Investment Type Fair Value Rating Kansas Municipal Inve stment Pool 318,077$ S&P AAAf/S1+ Total fair va lue 318,077$ 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) A.Deposits and Investments (Continued) 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. 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, 2020 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, 2020, the balance of the construction account, Interest Reserve, and Operating Reserve was $0, $208,864, and $126,633, respectively. 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) B.Receivables Receivables as of year-end, including the applicable allowances for doubtful accounts, are as follows: Tourism and Special Debt SFH Other General Convention Gas Service QalicB Governmental Subtotal Primary Government Receivables: Accounts 7,642,984$ 326,008$ -$ -$ 1,235,034$11,365$ 9,215,391$ Taxes 10,934,927 - 305,807 3,121,345 - - 14,362,079 Interest 10,391 - - - - - 10,391 Gross receivables 18,588,302 326,008 305,807 3,121,345 1,235,034 11,365 23,587,861 Less: allowance for uncollectibles [6,055,545] - - - - [8,078] [6,063,623] Total 12,532,757$326,008$ 305,807$3,121,345$1,235,034$3,287$ 17,524,238$ Solid WaterWasteandDisposalSewer Sanitation Total Primary GovernmentReceivables: Accounts 198,287$ 2,146,899$368,051$ 11,928,628$ Taxes - - - 14,362,079 Interest 16 - - 10,407 Gross receivables 198,303 2,146,899 368,051 26,301,114 Less: allowance for uncollectibles - [900,739] [148,108] [7,112,470] Total 198,303$ 1,246,160$219,943$ 19,188,644$ 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 27,872 Less: allowance for uncollectibles [2,592] Total Salina Housing Authority 25,280 Total 873,529$ C.Interfund Receivables and Payables The composition of interfund balances as of December 31, 2020, is as follows: Fund Types Due From Due To General Fund 31,989$ -$ Other Governmental Funds - 31,989 31,989$ 31,989$ 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. 44 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D.Capital Assets Capital asset activity for the year ended December 31, 2020, was as follows: Balance Adj. Bal.Balance 12/31/2019 Adjustments 12/31/2019 Additions Retirements 12/31/2020 City governmental activities: Governmental activities: Capital assets, not being depreciated Construction in progress 45,227,729$ [9,925,152]$35,302,577$ 8,686,394$ 17,767,814$26,221,157$ Land 24,223,535 - 24,223,535 - - 24,223,535 Leased land under capital lease 422,799 - 422,799 - - 422,799 Capital assets, being depreciated Infrastructure 208,508,810 - 208,508,810 17,767,814 - 226,276,624 Buildings and improvements 53,158,946 - 53,158,946 - - 53,158,946 Vehicles 10,224,294 - 10,224,294 453,480 508,250 10,169,524 Equipment, furniture and fixtures 7,279,276 - 7,279,276 210,441 5,275 7,484,442 Leasehold improvements 357,383 - 357,383 - - 357,383 Total capital assets 349,402,772 [9,925,152] 339,477,620 27,118,129 18,281,339 348,314,410 Less accumulated depreciation for: Infrastructure 92,244,865 - 92,244,865 4,021,671 - 96,266,536 Buildings and improvements 22,602,874 - 22,602,874 1,337,773 - 23,940,647 Vehicles 7,370,391 - 7,370,391 597,748 474,017 7,494,122 Equipment, furniture and fixtures 4,926,799 - 4,926,799 252,747 4,575 5,174,971 Total accumulated depreciation 127,144,929 - 127,144,929 6,209,939 478,592 132,876,276 Governmental activities capital assets, net 222,257,843$ [9,925,152]$212,332,691$ 20,908,190$17,802,747$215,438,134$ Business-type activities: Capital assets, not being depreciated Construction in progress 7,526,968$ -$ 7,526,968$ 21,925,306$1,476,335$ 27,975,939$ Land 2,386,334 - 2,386,334 - - 2,386,334 Capital assets, being depreciated Infrastructure 130,167,335 - 130,167,335 1,476,335 - 131,643,670 Buildings and improvements 22,579,936 - 22,579,936 - - 22,579,936 Vehicles 3,863,039 - 3,863,039 - 81,772 3,781,267 Equipment, furniture and fixtures 5,751,603 - 5,751,603 13,921 - 5,765,524 Total capital assets 172,275,215 - 172,275,215 23,415,562 1,558,107 194,132,670 Less accumulated depreciation for: Infrastructure 50,343,716 - 50,343,716 3,006,824 - 53,350,540 Buildings and improvements 14,060,793 - 14,060,793 415,804 - 14,476,597 Vehicles 2,575,294 - 2,575,294 208,311 81,772 2,701,833 Equipment, furniture and fixtures 4,216,095 - 4,216,095 269,983 - 4,486,078 Total accumulated depreciation 71,195,898 - 71,195,898 3,900,922 81,772 75,015,048 Business-type activities capital assets, net 101,079,317$ -$ 101,079,317$ 19,514,640$1,476,335$ 119,117,622$ 45 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 59,708$ Public safety 596,885 Public works 4,391,637 Public health 31,110 Culture and recreation 797,125 Planning and development 333,474 Total depreciation 6,209,939$ Business-type Activities: Solid Waste Disposal 152,926$ Water and Sewer 3,543,385 Sanitation 161,378 Golf Course Division 43,233 Total depreciation 3,900,922$ E.Long-Term Debt Following is a summary of changes in long-term debt for fiscal year 2020: Balance Balance Amounts January 1, December 31,Due Within 2020 Additions Deletions 2020 One Year Governmental activities: General obligation bonds 57,623,908$ 8,053,404$ 6,346,331$ 59,330,981$ 4,699,145$ Loans payable 12,199,016 13,963 -12,212,979 - OPEB liability 3,121,647 437,137 461,244 3,097,540 - KPERS OPEB liability 349,412 54,788 1,523 402,677 - Net pension liability 28,968,806 5,602,584 -34,571,390 - Accrued compensation 2,786,077 1,149,819 1,238,890 2,697,006 1,238,890 Temporary notes 11,170,000 7,050,000 11,170,000 7,050,000 7,050,000 Total 116,218,866$22,361,695$19,217,988$119,362,573$12,988,035$ Business-type activities: General obligation bonds 4,116,515$ 6,440,539$ 1,449,064$ 9,107,990$ 1,118,207$ Revenue bonds 11,122,175 -781,015 10,341,160 816,015 Loans payable 22,539,686 18,475,071 5,088,730 35,926,027 375,071 OPEB liability 397,680 179,164 59,330 517,514 - KPERS OPEB liability 156,983 38,520 736 194,767 - Net pension liability 3,148,126 706,480 -3,854,606 - Accrued compensation 656,639 210,673 273,001 594,311 273,001 Total 42,137,804$ 26,050,447$7,651,876$ 60,536,375$ 2,582,294$ Component Units: General obligation bonds 22,425,000$ 2,100,000$ 1,425,000$ 23,100,000$ 3,730,000$ Less unamortized discount [17,703] -[861][18,564] - Lease purchase agreement -460,000 -[18,564]39,942 Special assessment debt 4,805 -2,350 2,455 2,455 KPERS OPEB obligation 13,338 586 -13,924 - Net pension liability 632,856 82,814 -715,670 - Total component units 23,058,296$ 2,643,400$ 1,426,489$ 23,794,921$ 3,772,397$ 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 2011A, due 10/1/2031 6,587,985$ 2.00% to 5.00%376,151$ Internal Improvements 2013A, due 10/1/28 1,369,380 3.00% to 4.00%820,005 Internal Improvements 2013B, due 10/1/33 4,485,073 0.60% to 3.65%2,760,796 Internal Improvements 2014A, due 10/1/34 7,839,050 2.50% to 3.75%4,493,337 Improvement and Refunding 2015A, due 10/1/35 7,157,688 2.00% to 4.00%5,409,518 Internal Improvements 2016A, due 10/1/36 6,681,766 2.00% to 3.00%5,594,414 Refunding 2016B, due 10/1/2031 15,141,004 2.00% to 5.00%12,877,933 Internal Improvements 2017A, due 10/1/37 9,388,370 3.00% to 3.375%8,416,616 Internal Improvements 2018A, due 10/1/33 2,090,000 3.15% to 4.00%1,925,524 Internal Improvements 2019A, due 10/1/39 11,090,000 3.00% to 4.00%11,270,734 Internal Improvements 2020A, due 10/1/35 5,450,610 2.00% to 3.00%5,450,610 Internal Improvements 2020B, due 10/1/36 9,043,333 2.00% to 3.00%9,043,333 Total general obligation bonds 68,438,971$ Revenue Bonds Revenue & Refunding 2019, due 10/1/31 11,122,175$ 3.00%10,341,160$ Total revenue bonds 10,341,160$ Temporary Notes Series 2020-1, due 5/1/21 7,050,000$ 1.00%7,050,000$ Total temporary notes 7,050,000$ Loans Payable Kansas Public Water Supply, due 8/1/34 9,330,000$ 2.12%6,044,214$ Kansas Public Water Supply, due 2/1/40 32,000,000 2.33%25,397,675 Kansas Public Water Supply, due 2/1/40 4,250,000 2.33%3,387,022 Kansas Water Pollution Control, due 3/1/35 2,250,000 2.54%1,097,118 Dakotas & CNMC Notes, due 12/10/50 12,640,000 1.58%12,212,979 Total loans payable 48,139,008$ 47 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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$2.67%600,000$ General Obligation 2017A, due 2030 10,255,000 3.04%10,010,000 General Obligation 2017B, due 2025 4,835,000 3.02%4,760,000 General Obligation 2019A, due 2029 675,000 2.78%615,000 General Obligation 2019B, due 2023 3,455,000 2.92%2,765,000 General Obligation Temporary Notes 2019-1, due 2021 2,250,000 2.50%2,250,000 General Obligation Temporary Notes 2020-1, due 2023 2,100,000 0.48%2,100,000 Less unamortized bond premium 23,116 Less unamortized bond discount [41,680] Total general obligation bonds 23,081,436 Taxable Lease Purchase Agreement Bldg. 824 Capital Lease, due 2030 460,000 Total taxable lease purchase agreement 460,000 Special Assessment Debt Hangar 600 Sanitary Sewer, due 2021 27,599 4.47%2,455 Total special assessment debt 2,455 Total 23,543,891$ Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies: Bonds Interest Year Outstanding Due Total 2021 5,809,970$ 2,023,189$ 7,833,159$ 2022 5,968,819 1,803,571 7,772,390 2023 5,838,819 1,589,204 7,428,023 2024 5,643,103 1,379,557 7,022,660 2025 5,338,103 1,233,432 6,571,535 2026-2030 20,230,297 4,273,047 24,503,344 2031-2035 14,929,360 1,876,027 16,805,387 2036-2039 4,680,500 285,393 4,965,893 General Obligation - Primary Government 48 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Bonds Interest Year Outstanding Due Total 2021 3,730,000$ 615,917$ 4,345,917$ 2022 1,525,000 518,748 2,043,748 2023 3,665,000 478,020 4,143,020 2024 1,615,000 424,235 2,039,235 2025 1,660,000 381,540 2,041,540 2026 - 2030 8,995,000 1,145,810 10,140,810 2031 1,910,000 57,300 1,967,300 Total 23,100,000$ 3,621,570$ 26,721,570$ 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 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 911,015 194,250 1,105,265 2026-2030 4,955,071 575,400 5,530,471 2031 1,071,014 30,150 1,101,164 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 2021 7,050,000$ 70,892$ 7,120,892$ Temporary Notes - Primary Government 49 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 2021 375,071$ 126,159$ 501,230 2022 383,064 118,166 501,230 2023 391,228 110,002 501,230 2024 399,566 101,664 501,230 2025 408,082 93,148 501,230 2026-2030 2,174,635 331,515 2,506,150 2031-2034 1,912,568 92,358 2,004,926 Total 6,044,214$ 973,012$ 7,017,226$ 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 due, partially in arrears and partially in advance, on the tenth day of each December 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, 2016, 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, 2020, 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 due, partially in arrears and partially in advance, on the tenth day of each December 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, 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, 2020, the note balance was $2,623,500. 50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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-CDE 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, on the tenth day of each December 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, 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, 2020, 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-CDE 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, on the tenth day of each December 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, 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, 2020, the note balance was $1,326,000. As of December 31, 2020, the principal balance of these four loans,net of $427,021 of unamortized debt issuance costs,was $12,212,979 Annual debt service requirement to maturity for Special Assessment Debt to be paid from rental revenue: Assessment Interest Year Outstanding Due Total 2020 2,455$ 110$ 2,565$ Total 2,455$ 110$ 2,565$ Special Assessment Debt - Component Units 51 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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, 2020, SFH QalicB earned $492,917 of rental income under the terms of the Net Lease. As of December 31, 2020, rental income of $94,825 remained receivable from the City. The following is a schedule, by year, of total minimum lease payments by the City to SFH QalicB under the direct financing lease as of December 31, 2020: Premises Leases between QalicB and City 2021 130,000$ 2022 130,000 2023 162,500 2024 227,500 2025 227,500 Thereafter 13,325,000 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. 52 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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, 2020, 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 $93,926 for the year ended December 31, 2020. The future minimum lease payments for the lease are as follows: Year Amount 2021 93,926$ 2022 93,926 2023 93,926 2024 93,926 2025 93,926 2026-2027 187,853 Total principal and interest 657,483 Less: interest [73,758] Total principal 583,725$ G. Interfund Transfers A reconciliation of interfund transfers follows: Transfer In Transfer Out Major Funds: General 4,366,550$ 877,000$ Tourism and Convention - 589,251 Special Gas 160,000 - Sales Tax Capital - 2,804,350 Debt Service 1,629,188 - Capital Projects 20,845,460 - Other governmental funds 1,241,413 - Solid Waste Disposal - 2,729,588 Water and Sewer 4,126,717 25,051,789 Sanitation - 497,350 Golf Course 100,000 - Central Garage 80,000 - Total transfers 32,549,328$32,549,328$ The City uses interfund transfers to share administrative costs between funds. 53 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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. 54 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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, 2020. The actuarially determined employer contribution rates (not including the 1.00% contribution rate for the Death and Disability Program) and the statutory contribution rate was 8.61% for KPERS and 21.93% for KP&F for the year ended December 31, 2020. Member contribution rates as a percentage of eligible compensation for the fiscal year 2020 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, 2020, 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, 2020. The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2020, the City’s proportion for the Local employees group was 0.767%, which was a decrease of .003% from its proportion measured at June 30, 2019. At June 30, 2020, the City’s proportion for the Police and Firemen group was 2.038%, which was a decrease of .036% from its proportion measured at June 30, 2019. Net Pension Liability. At December 31, 2020 and 2019, the City and its component units reported a liability of $39,533,871 and $32,116,932, respectively, for its total proportionate share of the net pension liability for the Local and Police and Firemen groups. 55 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2019, which was rolled forward to June 30, 2020, using the following actuarial assumptions: Assumptions Rate Price inflation 2.75% Wage inflation 3.25% Salary increases, including wage increases 3.25% to 11.75% including inflation Long-term rate of return, net of investment expense, and including price inflation 7.50% 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, 2019 valuation were based on the results of an actuarial experience study conducted for the period of January 1, 2016, through December 31, 2018. The experience study is dated January 7, 2020. 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, 2020 are summarized in the following table: Long-Term Expected Asset Long-Term Allocation Real Rate of Return US Equities 23.50%5.20% Non-US Equities 23.50%6.40% Private Equity 8.00%9.50% Private Real Estate 11.00%4.45% Yield Driven 8.00%4.70% Real Return 11.00%3.25% Fixed Income 11.00%1.55% Short Term Investments 4.00%0.25% 100.00% Discount Rate. The discount rate used to measure the total pension liability was 7.50%. 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. 56 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 7.50%, 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 (6.50%) or 1-percentage point higher (8.50%) than the current rate: 1% Decrease (6.50%)Discount Rate (7.50%)1% Increase (8.50%) Local 20,189,679$ 14,325,796$ 9,396,471$ Police & Firemen 34,403,134 25,135,770 17,396,196 Total 54,592,813$ 39,461,566$ 26,792,667$ Pension Expense. For the year ended December 31, 2020, the City recognized Local pension expense of $1,156,925 and Police and Firemen pension expense of $2,405,832, 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 $35,958 and $89,795, respectively. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2020, the City and its component units reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: 57 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Deferred outflows Deferred inflows Local of resources of resources Differences between actual and expected experience 221,907$ 170,863$ Net differences between projected and actual earnings on investments 1,550,639 - Changes in assumptions 800,513 - Changes in proportion 232,177 449,541 Total 2,805,236$ 620,404$ Deferred outflows Deferred inflows Police & Firemen of resources of resources Differences between actual and expected experience 734,702$ -$ Net differences between projected and actual earnings on investments 2,442,541 - Changes in assumptions 1,739,968 - Changes in proportion 21,294 729,307 Total 4,938,505$ 729,307$ Deferred outflows Deferred inflows Local of resources of resources Differences between actual and expected experience 700$ 8,056$ Net differences between projected and actual earnings on investments 7,527 - Changes in assumptions 9,777 648 Changes in proportion 484 12,327 Total 18,488$ 21,031$ Deferred outflows Deferred inflows Local of resources of resources Differences between actual and expected experience 11,950$ 9,201$ Net differences between projected and actual earnings on investments 83,501 - Changes in assumptions 43,107 - Changes in proportion 40,138 49,264 Total 178,696$ 58,465$ Airport Authority Housing Authority $1,763,259 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2021. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Local Police & Firemen Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31,Amount Amount Total 2021 498,387$ 1,058,828$ 1,557,215$ 2022 586,306 1,155,904 1,742,210 2023 578,511 1,086,067 1,664,578 2024 507,037 877,263 1,384,300 2025 14,591 31,136 45,727 Total 2,184,832$ 4,209,198$ 6,394,030$ 58 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) A.Defined Benefit Pension Plan (Continued) $38,910 and $35,467 reported as deferred outflows of resources related to pensions resulting from Salina Housing Authority and Salina Airport Authority contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2021. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Housing Airport Authority Authority Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31,Amount Amount Total 2021 5,237$ 30,148$ 35,385$ 2022 [6,228]38,269 32,041 2023 [879]30,520 29,641 2024 [366]21,279 20,913 2025 [307]15 [292] Total [2,543]$ 120,231$ 117,688$ 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, $183,446 is considered to be due within one year. 59 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) Changes in the balances of claims liabilities during the past two years are as follows: 2020 2019 Unpaid claims, January 1 311,572$ 238,778$ Incurred claims (including IBNRs)917,229 726,271 Claim payments [782,306] [653,477] Unpaid claims, December 31 446,495$ 311,572$ 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 $50,000. Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Health Insurance Fund because it is expected to be liquidated with expendable available financial resources. Therefore, all of the liability is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 2020 2019 Unpaid claims, January 1 489,418$ 380,980$ Incurred claims (including IBNRs)3,056,323 4,466,044 Claim payments [2,940,741][4,357,606] Unpaid claims, December 31 605,000$ 489,418$ 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, 2020. 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 $2,300,353 reported as landfill closure and postclosure care liability at December 31, 2020,represents the cumulative amount reported to date based on the use of 28.8% of the estimated capacity of the landfill. 60 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) F. Municipal Solid Waste Landfill (Continued) The City's solid waste fund will recognize the remaining estimated cost of closure and postclosure care of $5,680,356 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 2020. 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. G.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. Since 2010, 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) were completed in 2019 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 $69.5 million lump sum payment by the United States to the Salina Public Entities. The settlement payment was not received by the City or the Salina Public Entities as of December 31, 2020. The City has determined that while a possible liability exists, at this time, no reasonable estimate of the possible liability can be made. Therefore, no liability related to that matter has been recorded. 61 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) H. Capital Projects Capital projects often extend over two or more fiscal years. The following is a schedule, which compares the project authorization including allowable interest revenue to total project expenditures from project inception to December 31, 2020. Project Authorization Expenditures Markley-Magnolia VV Sewer 5,150,000$ 1,314,305$ North Lime Drying Lagoon Yearly Maintenance 120,000 37,260 Rebuild High Service Pump P-203 24,187 13,688 2017 Country Club Road Improvements 1,200,000 1,089,063 River Trail 2 956,072 11,312 Downtown Streetscape 12,165,000 11,669,107 Smoky Hill River Renewal 27,000,000 3,595,670 Water Mains 4,250,000 3,649,443 Downtown Santa Fe Water Main Replacement 1,351,100 1,415,997 Police Training Facility 4,900,000 5,936,845 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 1,991,469 Railroad Crossing Improvements 45,000 - 2018 Park Improvements 194,000 87,000 Pheasant Ridge Addition #3 Phase 2 509,233 509,878 Community Theater HVAC Replacement 46,000 207 Storm Sewer Mulberry Street 22,709 26,151 N. 9th Street Bridge 2,000,000 4,273 Golf Course Irrigation 1,488,414 1,499,452 9th South Addition 1,180,313 2,976 Smoky Hill Greenway Trail 435,637 61,934 Chorine Bluilding 2 Roof Replacement 35,000 - 2019 Water Main Replacement 4,000,000 - Magnolia Hills Estates II 1,575,240 11,285 Stone Lake Phase 2 670,166 335,794 Stone Lake Phase 3A 1,647,053 3,368 Smedley Surgical Center 45,486 36,501 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 - Mulberry Storm Sewer Repairs 461,556 417,398 Chip Seal 210,623 194,940 Microsurfacing 574,888 306 Mill & Inlay 494,196 375,247 Price Property Culvert Replacement 6,600 59,625 Waterline for SWTP 912,982 812,319 Joe Milbradt Pavillion 133,100 256,785 Fire Equipment 860,795 484,487 WWTP Owners Rep 896,790 93,595 WWTP Improvement PH I 879,193 - Public Safety Communication System 2,361,323 139,986 TPEC Improvements 270,426 - 62 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) 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 2020, the City did not contribute to the plan. At December 31, 2020, the following employees were covered by the benefit terms: Active employees 440 Retirees and covered spouses 29 Total 469 The total OPEB liability of $3,615,054 was measured as of December 31, 2019 and was determined by an actuarial valuation as of that date. The total OPEB liability in the December 31, 2019 actuarial valuation was determined using the following assumptions and other inputs, applied to all periods in the measurement, unless otherwise specified: Valuation date December 31, 2019 Actuarial cost method Entry age normal as a level percentage of payroll Inflation 2.75% Salary increases 3.50% Discount rate 2.74% Healthcare cost trend rates Medical: 6.40% for 2020, decreasing 0.50% per year to an ultimate rate of 3.7% for 2074 Dental: 5.00% to 2022, then decreasing to an ultimate rate of 3.70% in 2074 Retiree's share of benefit related costs 100% of the premium The discount rate was based on an index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. Mortality rates were based on the RP 2014 Mortality Tables, with age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2017. Changes in the total OPEB liability are as follows: Balance 1/1/2020 3,519,327$ Service cost 231,391 Interest 150,552 Benefit paid [159,018] Economic/demographic gains/losses [255,426] Changes in assumptions 128,228 Balance 12/31/2020 3,615,054$ 63 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) I.Other Postemployment Healthcare Benefits (Continued) 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 (1.74%) or one percentage point higher (3.74%) than the current discount rate: 1% Decrease Discount Rate 1% increase (1.74%)(2.74%)(3.74%) Total OPEB Liability 3,971,843$ 3,615,054$ 3,289,912$ 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 or one percentage point higher than the current healthcare cost trend rate: Healthcare Cost 1% Decrease Trend Rates 1% increase Total OPEB Liability 3,166,500$ 3,615,054$ 4,152,174$ For the year ended December 31, 2020, the City recognized OPEB expense of $356,442. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2020, the City reported deferred outflows related to other postemployment benefits from the following sources: Deferred outflows Deferred inflows of resources of resources Changes of assumptions 173,216$ [143,654]$ Differences between expected and actual experience - [226,168] Total 173,216$ [369,822]$ Amounts reported as deferred outflows of resources will be recognized in OPEB expense as follows: Year ended Deferred [Inflows] June 30,Outflows Amount 2021 [25,501]$ 2022 [25,501] 2023 [25,501] 2024 [25,501] 2025 [25,501] 2026+[69,101] Total [196,606]$ 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 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. 64 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) J.Other Postemployment Benefits (KPERS) (Continued) 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, 2020, the valuation date, the following employees were covered by the benefit terms: Active employees 281 Disabled members 3 Total 284 Total OPEB Liability. The City and its component units reported a total KPERS OPEB liability of $597,444 as of December 31, 2020,was measured as of June 30, 2020, and was determined by an actuarial valuation as of December 31, 2019, which was rolled forward to June 30, 2020, using the following actuarial assumptions: Valuation date December 31, 2019 Actuarial cost method Entry age normal Inflation 2.75% Salary increases 3.00% Discount rate (based on 20 year municipal bond rate with an average rating of AA/Aa or better, obtained through the Bond Buyer General Obligation 20-Bond Municipal Index)2.21% The discount rate was based on the bond buyer general obligation 20-bond municipal index. 65 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) J.Other Postemployment Benefits (KPERS) (Continued) Mortality rates were based on the RP 2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2019. The actuarial assumptions used in the December 31, 2019, valuation were based on the results of an actuarial experience study for the period of January 1, 2016 through December 31, 2018. Other demographic assumptions are set to be consistent with the actuarial assumptions reflected in the December 31, 2019, KPERS pension valuation. The changes in the total OPEB liability are as follows: City Housing Authority Airport Authority Total Balance 1/1/2020 506,395$ 8,186$ 13,338$ 527,919$ Service cost 57,185 1,529 3,430 62,144 Interest 19,037 376 587 20,000 Effect of economic/demographic gains or losses 17,086 [2,482] - 14,604 Changes in assumptions 37,368 49 [4,295] 33,122 Benefit payments [39,627] - 864 [38,763] Balance 12/31/2020 597,444$ 7,658$ 13,924$ 619,026$ 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 (1.21%) or 1-percentage-point higher (3.21%) than the current discount rate: 1% Decrease Discount Rate 1% increase (1.21%)(2.21%)(3.21%) Total OPEB Liability - City 618,840$ 597,444$ 575,090$ Total OPEB Liability - Housing Authority 7,745$ 7,658$ 7,511$ Total OPEB Liability - Airport Authority 14,114$ 13,924$ 13,610$ 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 597,444$ 597,444$ 597,444$ Total OPEB Liability - Housing Authority 7,658$ 7,658$ 7,658$ Total OPEB Liability - Airport Authority 13,924$ 13,924$ 13,924$ For the year ended June 30, 2020, the City recognized OPEB expense of $78,842. 66 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) J.Other Postemployment Benefits (KPERS) (Continued) Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2020, the City reported deferred outflows and inflows related to other postemployment benefits from the following sources: Deferred Deferred Deferred Deferred Deferred Deferred Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of Resources Resources Resources Resources Resources Resources Differences between expected and actual experience 67,257$ 75,665$ -$ 4,221$ 7,813$ -$ Changes of assumptions 39,638 9,995 44 195 148 897 Total 106,895$ 85,660$ 44$ 4,416$ 7,961$ 897$ Airport AuthorityCityHousing Authority $64,827 and $3,830 reported as deferred outflows of resources related to OPEB resulting from City and Airport Authority contributions subsequent to the measurement date,respectively, will be recognized as a reduction of the OPEB liability in the year ended December 31, 2021. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in OPEB expense as follows: Year Ended Housing Airport June 30,City Authority Authority 2021 2,620$ [537]$ [925]$ 2022 2,620 [537][925] 2023 2,620 [537][925] 2024 2,620 [537][925] 2025 2,620 [537][925] Thereafter 8,135 [1,687] [2,439] Total 21,235$ [4,372]$ [7,064]$ K.Tax Abatements In 2020, 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. 67 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) Company Start End %2020 Tax Abated Salina Vortex Corp (facility improvements)2015 2024 37.5%5,522$ Great Plains Mfg (facility improvements)2014 2023 50%4,073 Veris Technologies (facility addition/improvements)2015 2024 20.3%505 Twin Oaks (facility addition/improvements)2015 2024 27.5%688 Total 10,789$ 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. 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 $29,304 $178,680 Total $29,304 $178,680 2020 Reimbursements 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. 68 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) 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 2020 Eligible Reimbursement Amount South 9th Street 2.00%3/1/2016 12/31/2037 Assist with improvements to hotel and conference center $251,052 Alley 1.00%10/1/2019 9/30/2041 Assist with building of family entertainment facility in downtown $13,454 Downtown 1.00%7/1/2019 6/30/2041 Assist with Revitilization of Downtown Corridor $14,487 Downtown Hotel 1.00%10/1/2019 9/30/2041 Assist with building of downtown hotel - Total $278,993 Community Improvement District (CID) Neighborhood Revitalization Areas (NRA).NRAs are authorized under Kansas state statutes K.S.A. 12-117 and subject to City policy to spur investment and revitalization of properties which can benefit a neighborhood and the public. The program works by rebating a portion of the incremental increase in property taxes resulting from improvements back to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. Participation in the program and percentage of rebate and duration are determined separately by the City, County, and School District. The current City of Salina adopted plan is a 4-year plan running from 2015-2019. It allows for a 10-year rebate and provides rebates from 25% to 100% depending on year in plan and type of improvement. To receive an NRA, taxpayers must submit an application, which undergoes due diligence and analysis before being approved by the City. If the NRA is approved, each year, the applicant must submit proof that property taxes have been paid in full. Because the rebate is not given until after improvements are put in place and property taxes paid, there are no provisions for recapturing taxes. The City of Salina approves NRAs on an individual basis. 69 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) 2020 Property/Business Name Address Type Rebate Paid Serio Guzman 241 N. Front Street Res 32$ William & Mary Warhurst 1009 N. 8th Street Res 10 Holly Fain 219 N. Front Street Res 49 Arlene Cox 1101 N. 10th Street Res 61 Gloria Williams 714 Park Street Res 44 Michelle Rogan 204 Forest Avenue Res 59 Samuel A. Rock 200 Forest Avenue Res 15 Jessica A. Ziegler 1329 N. 4th Street Res 62 Ryan Murphy 303 S. Santa Fe Avenue Res 83 Ravey Investments LLC 227 S. Santa Fe Avenue Com 713 Lamont Outland 221 N. 2nd Street Res 105 Michelle Bunch 207 N. Penn Res 113 Jermaine and Tykea Polk 157 N. Seventh, 203 W. Ash, 205 W. Ash, 207 W. Ash & 209 W. Ash Res 128 Mary Marshall 1206 N. 7th Street Res 108 Angela Fishburn 1219 N. 8th Street Res 108 Heritage at Hawthorne Partners, LLC 937 N. 3rd Street Com 1,842 Will & Mary Warhurst 1219 N. 8th Street Res 165 Donnie & Ramona Marrs 134 S. Santa Fe Ave Res 936 TJTM, Inc. 2035 E. Iron #213C/105R/302R/202R/205R/006R/301RA/301 RB/001R/002R/003R/004R/005R Res 6,461 Troy Valcil 853 Navaho Res 79 Michelle Malone 815 N. 2nd Street Res 4 Timothy & Linda Rickman 719 E. Ash Res 71 Yvette Gelinas 1115 N. 8th Street Res 116 Charles H Carroll Jr Trust 156-158 S. Santa Fe Com 2,125 Pestinger Enterprises LLC 2035 E. Iron Avenue, Unit #306R Res 1,565 Latisha Pierce 705 N. 2nd Street Res 133 Tanya Shiehzadeh 703 N. 2nd Street Res 129 Robert & Brenda Burns 1205 N. 4th Street Res 84 Property Partners LLC 116 & 118 N. Santa Fe (2nd Floor Loft Apartments)Com 818 AP Property Holdings, LLC 201 E. Iron Avenue Com 5,359 Gregory Davis 156-158 N. 11th Street Res 280 Micheal Money 2035 E. Iron Avenue, Unit #206R Res 946 Traniesh Byrd 701 N. 2nd Street Res 165 Mark Martin Living Trust 2035 E. Iron #104R Com 797 Matthew Snyder 2035 E Iron #304R Res 529 Doyle & Maureen Comfort Trust 2035 E Iron #304R Res 1,166 Jana Endsley 1321 N. 3rd Street Res 229 Kanesha Samilton 214 W. Grand Avenue Res 269 Maria E Padilla 810 N. 5th Street Res 307 JK Webb Properties LLC 120 S. Santa Fe Avenue Com 2,867 Alan and Nancy Franzen 1413 Arapahoe Res 202 Santa Fe Properties, LLC 131 N. Santa Fe Avenue/128 S. Santa Fe Avenue Com 3,830 Rusty A Leister Living Trust 600 N. Santa Fe Avenue Com 2,137 Heritage at Hawthorne Partners II, LLC.715 N. 9th Street, Phase II Com 2,150 Christopher Helm 608 N. 11th Street Res 152 Christopher Helm 752 N. Broadway Com 6,306 Laurie Donmyer 255 N. Columbia Res 186 Eva Wright 1200 N. 8th Res 278 Foley Equipment Co.2225 N. Ohio St Com 16,750 Mark Ritter 2035 E. Iron #108R Res 1,621 Angelica Farris 846 Choctaw Ave Res 311 Christopher Vogel 2035 E. Iron #209R Res 909 Christopher Helm 619 N. 5th Street Com 806 64,770$ Neighborhood Revitalization Act (NRA) 70 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) K. Subsequent Events On April 12,2021, the City issued Series 2021-A general obligation internal improvement bonds in the amounts of $5,230,000. 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, 2022 the last payment on October 1, 2041. The interest rate on the bonds ranges from 2.00% to 4.50%. Also on April 12, 2021, the City issued Series 2021-1 temporary notes in the amounts of $5,230,000. Proceeds from the notes will be used to provide interim construction financing of certain public improvements within the City. The maturity date of the temporary notes is May 1, 2022 and the interest rate on the notes is 2.00%. On January 30, 2020 the World Health Organization declared the Coronavirus outbreak as a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions were taken to help mitigate the spread of the virus, including social-distancing, quarantines and forced closures of certain types of public places and businesses. The coronavirus and actions taken to mitigate the spread of it have had and are expected to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the City operates. It is unknown how long the adverse conditions associated with the pandemic will last and what the complete financial effect will be to the City. Management cannot quantify the financial and other impacts to the City’s financial position but believes a material impact is reasonably possible. REQUIRED SUPPLEMENTARY INFORMATION 71 CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFITS Schedule of Changes in the City’s Total OPEB Liability and Related Ratios Last Ten Fiscal Years* Total OPEB liability 2020 2019 2018 Service cost 231,391$ 249,957$ 226,762$ Interest 150,552 125,877 128,578 Benefit paid [159,018] [157,465] [265,000] Economic/demographic gains/losses [255,426] - - Changes in assumptions 128,228 [186,344] 90,918 Net change in total OPEB liability 95,727 32,025 181,258 Total OPEB liability - beginning 3,519,327 3,487,302 3,306,044 Total OPEB liability - ending 3,615,054$ 3,519,327$ 3,487,302$ Covered payroll 25,163,639$25,232,129$24,740,225$ Total OPEB liability as a percentage of 14.37%13.95%14.10% covered-employee payroll Actuarially determined contribution 159,018$ 157,465$ 265,000$ Actual contribution 159,018$ 157,465$ 265,000$ Contributions as a percentage of covered payroll 0.63%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 2020 2019 2018 Service cost 57,185$ 52,863$ 52,380$ Interest 19,037 22,667 17,061 Effect of economic/demographic gains or losses 17,086 [95,243] 75,173 Effect of assumptions changes or inputs 37,368 7,614 [6,574] Benefit payments [39,627][28,432] [30,368] Net change in total OPEB liability 91,049 [40,531] 107,672 Total OPEB liability - beginning 506,395 546,926 439,254 Total OPEB liability - ending 597,444$ 506,395$ 546,926$ Covered payroll 14,338,983$ 13,991,543$ 13,652,194$ Total OPEB liability as a percentage of 4.17%3.62%4.01% covered-employee payroll Actuarially determined contribution 144,746$ 144,746$ 109,466$ Actual contribution 144,746$ 144,746$ 109,466$ Contributions as a percentage of covered payroll 1.01%1.03%0.80% *data became available with the inception of GASB 75 during fiscal year 2018, therefore 10 years of data is unavailable. 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* 2015 2016 2017 2018 2019 2020 City's proportion of the net pension liability Local 0.764% 0.761% 0.811% 0.790% 0.796% 0.766% Police & Fire 2.258% 2.180% 2.191% 2.081% 2.074% 2.038% City's proportionate share of the net pension liability Local 10,027,679$11,770,699$11,753,246$11,014,328$11,123,112$13,290,226$ Police & Fire 16,395,794$20,251,512$20,546,882$20,019,473$20,993,820$25,135,770$ City's covered-employee payroll Local 12,931,197$13,251,236$13,548,056$13,944,989$14,366,294$14,948,415$ Police & Fire 10,161,866$10,730,033$10,593,419$10,441,055$10,859,219$11,285,465$ City's proportionate share of the net pension liability as a percentage of its its covered-employee payroll Local 77.55% 88.83% 86.75% 78.98% 77.43% 88.91% Police & Fire 161.35% 188.74% 193.96% 191.74% 193.33% 222.73% Plan fiduciary net position as a percentage of the total pension liability Local 71.98% 68.55% 72.15% 74.22% 75.02% 70.77% Police & Fire 74.60% 69.30% 70.99% 71.53% 71.22% 66.81% *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* 2015 2016 2017 2018 2019 2020 Contractually required contribution Local 1,256,217$ 1,243,711$ 1,179,745$ 1,205,334$ 1,328,915$ 1,156,925$ Police & Fire 2,527,995$ 2,361,273$ 1,986,933$ 2,181,617$ 2,497,473$ 2,405,832$ Contributions in relation to the contractually required contribution Local 1,256,217 1,243,711 1,179,745 1,205,334 1,328,915 1,156,925 Police & Fire 2,527,995 2,361,273 1,986,933 2,181,617 2,497,473 2,405,832 Contribution deficiency [excess]-$ -$-$-$-$-$ City's covered-employee payroll Local 13,251,236$13,548,056$13,944,989$14,366,294$14,948,415$13,436,992$ Police & Fire 10,730,033$10,593,419$10,441,055$10,859,219$11,285,465$10,970,505$ Contributions as a percentage of covered employee payroll Local 9.48% 9.18% 8.46% 8.39% 8.89% 8.61% Police & Fire 23.56% 22.29% 19.03% 20.09% 22.13% 21.93% *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 NONMAJOR SPECIAL REVENUE 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 district. 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 to the developers as part of the Community Improvement District formed in 2015. Downtown CID fund - To account for incremental sales tax revenues received and disbursed to the developers as part of the Community Improvement District formed in 2017. Alley CID fund - To account for incremental sales tax revenues received and disbursed to the developers as part of the Community Improvement District formed in 2016. Downtown Hotel CID fund - To account for incremental sales tax revenues received and disbursed to the developers as part of the Community Improvement District formed in 2017. STAR Bonds Subproject fund - To track disbursements and reimbursements associated with the Stiefel Theatre’s STAR Bond 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. 75 CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS -CONTINUED 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. Special assessments escrow fund -To account for property owners' prepayment on outstanding special assessments. Court bond and restitution fund -To account for bonds and restitution remitted to the court and awaiting court orders for distribution. Police investigation account fund -To account for monies held by the police department for use in investigations. Citizenship fund -To account for donations received and used for the citizenship fund. 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 the sale of assets acquired during drug enforcement activities as they related to federal cases placed in a reserve for future use. 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. 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. 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 6,696,113$ 542,755$ 800$ 7,239,668$ Receivables Accounts 3,287 --3,287 Total assets 6,699,400$ 542,755$ 800$ 7,242,955$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 221,525$ -$-$221,525$ Due to other funds 31,989 --31,989 Total liabilities 253,514 --253,514 Fund balances: Restricted 694,713 -800 695,513 Committed 5,561,914 542,755 -6,104,669 Assigned 189,259 --189,259 Total fund balances 6,445,886 542,755 800 6,989,441 Total liabilities and fund balances 6,699,400$ 542,755$ 800$ 7,242,955$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2020 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 1,126,829$ -$ -$1,126,829$ Intergovernmental 1,219,866 -315,372 1,535,238 Charges for services 108,135 13,282 -121,417 Licenses and permits 5,070 --5,070 Investment revenue 16,764 1,972 2,400 21,136 Donations 129,193 --129,193 Miscellaneous 3,518,022 -59,555 3,577,577 Total revenues 6,123,879 15,254 377,327 6,516,460 EXPENDITURES Current Culture and recreation 1,207,431 --1,207,431 Public safety 625,362 --625,362 Public health and sanitation 597,804 --597,804 Planning and development 376,545 --376,545 Miscellaneous -35 1,300,626 1,300,661 Debt service Interest and other charges --15,496 15,496 Capital outlay 1,741,294 --1,741,294 Total expenditures 4,548,436 35 1,316,122 5,864,593 Excess [deficiency] of revenues over [under] expenditures 1,575,443 15,219 [938,795] 651,867 Other financing sources [uses] Transfers in 1,241,413 --1,241,413 Total other financing sources [uses]1,241,413 --1,241,413 Net change in fund balance 2,816,856 15,219 [938,795] 1,893,280 Fund balance - Beginning of year 3,203,386 527,536 939,595 4,670,517 Prior period adjustment 425,644 --425,644 Fund balance - Beginning of year, restated 3,629,030 527,536 939,595 5,096,161 Fund balance - End of year 6,445,886$ 542,755$ 800$ 6,989,441$ For the Year Ended December 31, 2020 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 Community Sales Tax Downtown Bicentennial Improvement Neighborhood Parks &Special Development Economic TIF Center District Park Recreation Alcohol Revolving Development District #1 ASSETS Cash and investments 406,690$ 11,017$ 33,821$ 478,383$ 234$ 186,307$ 720,798$ 709,533$ Receivables Accounts -3,287 ------ Total assets 406,690$ 14,304$ 33,821$ 478,383$ 234$ 186,307$ 720,798$ 709,533$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 89,049$ -$-$-$-$-$5,112$ -$ Due to other funds -------- Total liabilities 89,049 -----5,112 - Fund balance: Restricted -14,304 -465,773 234 186,307 -- Committed 317,641 -33,821 ---715,686 709,533 Assigned ---12,610 ---- Total fund balance [deficit]317,641 14,304 33,821 478,383 234 186,307 715,686 709,533 Total liabilities and fund balances 406,690$ 14,304$ 33,821$ 478,383$ 234$ 186,307$ 720,798$ 709,533$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2020 Kenwood Special South Downtown Alley Downtown STAR Bonds State 911 Cove Law Police 9th CID CID CID Hotel CID Subprojects Grants Communications Capital Enforcement Grants 22,388$ 286,564$ 3,742$18,719$ 2,000,000$ 6,493$421,418$ 195,961$ 82$3,479$ ---------- 22,388$ 286,564$ 3,742$18,719$ 2,000,000$ 6,493$421,418$ 195,961$ 82$3,479$ 20,691$ -$-$-$-$-$79,426$3,571$-$-$ ---------- 20,691 -----79,426 3,571 -- ---------- 1,697 286,564 3,742 18,719 2,000,000 6,493 165,343 192,390 82 3,479 ------176,649 --- 1,697 286,564 3,742 18,719 2,000,000 6,493 341,992 192,390 82 3,479 22,388$ 286,564$ 3,742$18,719$ 2,000,000$ 6,493$421,418$ 195,961$ 82$3,479$ See independent auditor's report on the financial statements. 788 Police War Federal Department Federal DARE Memorial Arts &CARE Federal Homeowners'Private Grants Donations Maintenance Humanities Grant Forfeiture Funds Assistance Grants ASSETS Cash and investments -$14,031$ 30,843$ 103,587$ 26,141$ 99$19,041$ 1,954$ Receivables Accounts -------- Total assets -$14,031$ 30,843$ 103,587$ 26,141$ 99$19,041$ 1,954$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 16,440$ 825$ -$3,521$ -$-$-$-$ Due to other funds 31,989 ------- Total liabilities 48,429 825 -3,521 ---- Fund balance: Restricted ----26,141 --1,954 Committed [48,429] 13,206 30,843 100,066 -99 19,041 - Assigned -------- Total fund balance [deficit][48,429] 13,206 30,843 100,066 26,141 99 19,041 1,954 Total liabilities and fund balances -$14,031$ 30,843$ 103,587$ 26,141$ 99$19,041$ 1,954$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2020 Animal Special Court Police Beechcraft Bail Shelter Assessments Bond and Investigation DTF DTF Remediation Bond Donations Escrow Restitution Account Citizenship Local Reserve Settlement Escrow Totals 560,731$ 116,682$ 31,394$ 3,384$39,757$ 10,076$ 41,663$ 189,966$ 1,135$6,696,113$ ---------3,287 560,731$ 116,682$ 31,394$ 3,384$39,757$ 10,076$ 41,663$ 189,966$ 1,135$6,699,400$ 1,590$-$-$-$1,000$300$-$-$-$221,525$ ---------31,989 1,590 ---1,000 300 ---253,514 ---------694,713 559,141 116,682 31,394 3,384 38,757 9,776 41,663 189,966 1,135 5,561,914 ---------189,259 559,141 116,682 31,394 3,384 38,757 9,776 41,663 189,966 1,135 6,445,886 560,731$ 116,682$ 31,394$ 3,384$39,757$ 10,076$ 41,663$ 189,966$ 1,135$6,699,400$ See independent auditor's report on the financial statements. 79 Business Special Community Sales Tax Downtown Bicentennial Improvement Neighborhood Parks &Special Development Economic TIF Center District Park Recreation Alcohol Revolving Development District #1 Revenues Taxes -$-$-$-$-$-$350,004$ 291,557$ Intergovernmental ---171,982 171,982 --- Charges for services -80,807 ------ Licenses and permits --5,070 ----- Investment revenue -------2,443 Donations -------- Miscellaneous 175,000 -----1,833 - Total Revenues 175,000 80,807 5,070 171,982 171,982 -351,837 294,000 Expenditures Current Culture and recreation 713,405 ------- Public safety -------- Public health and sanitation ----171,982 --- Planning and development -73,176 -----20,109 Capital outlay ---42,465 --344,714 - Total Expenditures 713,405 73,176 -42,465 171,982 -344,714 20,109 Excess [deficiency] of revenues over [under] expenditures [538,405] 7,631 5,070 129,517 --7,123 273,891 Other financing sources [uses] Transfers in 656,063 ------- Total other financing sources [uses]656,063 ------- Net change in fund balance 117,658 7,631 5,070 129,517 --7,123 273,891 Fund balance, beginning of year 199,983 6,673 28,751 348,866 234 186,307 708,563 435,642 Prior period adjustment -------- Fund balance, beginning of year, restated 199,983 6,673 28,751 348,866 234 186,307 708,563 435,642 Fund balance, end of year 317,641$ 14,304$ 33,821$ 478,383$234$ 186,307$ 715,686$ 709,533$ CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2020 Kenwood Special South Downtown Alley Downtown STAR Bonds State 911 Cove Law Police 9th CID CID CID Hotel CID Subprojects Grants Communications Capital Enforcement Grants 216,895$ 232,549$ 17,176$ 18,648$ -$-$-$-$-$-$ -----122,055 477,372 --3,479 ---------- ---------- 33 685 20 71 --1,646 --- ---------- 11,732 67,817 --3,219,786 ----- 228,660 301,051 17,196 18,719 3,219,786 122,055 479,018 --3,479 ---------- ------586,331 --- ---------- 228,237 14,487 13,454 ------- ----1,219,786 122,055 -11,149 -- 228,237 14,487 13,454 -1,219,786 122,055 586,331 11,149 -- 423 286,564 3,742 18,719 2,000,000 -[107,313][11,149]-3,479 -------68,350 -- -------68,350 -- 423 286,564 3,742 18,719 2,000,000 -[107,313]57,201 -3,479 1,274 ----6,493 449,305 135,189 82 - ---------- 1,274 ----6,493 449,305 135,189 82 - 1,697$ 286,564$ 3,742$ 18,719$ 2,000,000$ 6,493$ 341,992$ 192,390$ 82$3,479$ See independent auditor's report on the financial statements. 8080 Police War Federal Department Federal DARE Memorial Arts &CARE Federal Homeowners'Private Grants Donations Maintenance Humanities Grant Forfeiture Funds Assistance Grants Revenues Taxes -$-$-$-$-$-$-$-$ Intergovernmental 222,996 ------- Charges for services - --27,328 ---- Licenses and permits - ------- Investment revenue - -113 ----- Donations - ------- Miscellaneous -12,175 ----2,196 - Total Revenues 222,996 12,175 113 27,328 --2,196 - Expenditures Current Culture and recreation - --494,026 ---- Public safety - ------- Public health and sanitation 312,550 ------- Planning and development -27,082 ------ Capital outlay -------- Total Expenditures 312,550 27,082 -494,026 ---- Excess [deficiency] of revenues over [under] expenditures [89,554] [14,907] 113 [466,698] --2,196 - Other financing sources [uses] Transfers in -- -517,000 ---- Total other financing sources [uses]-- -517,000 ---- Net change in fund balance [89,554] [14,907] 113 50,302 --2,196 - Fund balance, beginning of year 41,125 28,113 30,730 49,764 26,141 99 16,845 1,954 Prior period adjustment -- ------ Fund balance, beginning of year, restated 41,125 28,113 30,730 49,764 26,141 99 16,845 1,954 Fund balance, end of year [48,429]$ 13,206$ 30,843$ 100,066$ 26,141$ 99$19,041$ 1,954$ For the Year Ended December 31, 2020 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS (Continued) Animal Special Court Police Beechcraft Bail Shelter Assessments Bond and Investigation DTF DTF Remediation Bond Donations Escrow Restitution Account Citizenship Local Reserve Settlement Escrow Totals -$-$-$-$-$-$-$-$-$1,126,829$ 50,000 --------1,219,866 ---------108,135 ---------5,070 ----11,055 --698 -16,764 121,160 ------8,033 -129,193 --8,867 1 -13,265 5,350 --3,518,022 171,160 -8,867 1 11,055 13,265 5,350 8,731 -6,123,879 ---------1,207,431 -----29,031 10,000 --625,362 113,272 --------597,804 ---------376,545 ----1,125 ----1,741,294 113,272 ---1,125 29,031 10,000 --4,548,436 57,888 -8,867 1 9,930 [15,766] [4,650] 8,731 -1,575,443 ---------1,241,413 ---------1,241,413 57,888 -8,867 1 9,930 [15,766] [4,650] 8,731 -2,816,856 501,253 --------3,203,386 -116,682 22,527 3,383 28,827 25,542 46,313 181,235 1,135 425,644 501,253 116,682 22,527 3,383 28,827 25,542 46,313 181,235 1,135 3,629,030 559,141$ 116,682$ 31,394$ 3,384$ 38,757$ 9,776$ 41,663$ 189,966$ 1,135$ 6,445,886$ See independent auditor's report on the financial statements. 81 Cemetery Mausoleum Tricentennial ASSETS Endowment Endowment Commission Total Cash and investments 534,767$ 2,071$ 5,917$ 542,755$ Total assets 534,767$ 2,071$ 5,917$ 542,755$ LIABILITIES AND FUND BALANCES Liabilities Accounts payable -$-$-$-$ Total liabilities ---- Fund balances Committed 534,767 2,071 5,917 542,755 Total liabilities and fund balances 534,767$ 2,071$ 5,917$ 542,755$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET December 31, 2020 NONMAJOR PERMANENT FUNDS See independent auditor's report on the financial statements. 82 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Total Revenues Charges for services 13,282$ -$-$13,282$ Investment revenue 1,942 8 22 1,972 Total revenues 15,224 8 22 15,254 Expenditures Miscellaneous 35 --35 Total expenditures 35 --35 Net change in fund balance 15,189 8 22 15,219 Fund balances - beginning of year 519,578 2,063 5,895 527,536 Fund balances - end of year 534,767$ 2,071$ 5,917$ 542,755$ NONMAJOR PERMANENT FUNDS For the Year Ended December 31, 2020 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Miscellaneous 175,000$ -$-$175,000$ Total revenues 175,000 --175,000 Expenditures Culture and recreation 713,405 -740,000 26,595 Total expenditures 713,405 -740,000 26,595 Excess [deficiency] of revenues over [under] expenditures [538,405]-[740,000]201,595 Other financing sources [uses] Transfers in 656,063 -830,000 [173,937] Total other financing sources [uses]656,063 -830,000 [173,937] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]117,658 -90,000 27,658 Unreserved fund balance, January 1 199,983 -137,177 62,806 Unreserved fund balance/GAAP fund balance December 31 317,641$ -$227,177$ 90,464$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 79,532$ 90,500$ 90,500$ [10,968]$ Total revenues 79,532 90,500 90,500 [10,968] Expenditures Planning and development 73,176 90,500 90,500 17,324 Total expenditures 73,176 90,500 90,500 17,324 Excess [deficiency] of revenues over [under] expenditures 6,356 - - 6,356 Unreserved fund balance, January 1 4,661 4,461 4,461 200 Unreserved fund balance, December 31 11,017 4,461$ 4,461$ 6,556$ Reconciliation to GAAP Accounts receivable 3,287 GAAP Fund Balance, December 31 14,304$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Licenses and permits 5,070$ 3,000$ 3,000$ 2,070$ Total revenues 5,070 3,000 3,000 2,070 Expenditures Capital outlay -10,000 10,000 10,000 Total expenditures -10,000 10,000 10,000 Excess [deficiency] of revenues over [under] expenditures 5,070 [7,000] [7,000]12,070 Unreserved fund balance, January 1 28,751 28,751 28,751 - Unreserved fund balance/GAAP fund balance December 31 33,821$ 21,751$ 21,751$ 12,070$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 171,982$ 197,740$ 197,740$ [25,758]$ Investment revenue - 100 100 [100] Total revenues 171,982 197,840 197,840 [25,858] Expenditures Capital outlay 55,075 194,000 194,000 138,925 Total expenditures 55,075 194,000 194,000 138,925 Excess [deficiency] of revenues over [under] expenditures 116,907 3,840 3,840 113,067 Unreserved fund balance, January 1 348,866 348,866 348,866 - Unreserved fund balance, December 31 465,773 352,706$ 352,706$ 113,067$ Reconciliation to GAAP Current year encumbrances 12,610 GAAP Fund Balance, December 31 478,383$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 171,982$ 197,740$ 197,740$ [25,758]$ Total revenues 171,982 197,740 197,740 [25,758] Expenditures Public health and sanitation 171,982 197,740 197,740 25,758 Total expenditures 171,982 197,740 197,740 25,758 Excess [deficiency] of revenues over [under] expenditures ---- Unreserved fund balance, January 1 234 234 234 - Unreserved fund balance/GAAP fund balance December 31 234$ 234$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes 350,004$ 338,228$ 338,228$ 11,776$ Miscellaneous 1,833 2,000 2,000 [167] Total revenues 351,837 340,228 340,228 11,609 Expenditures Capital outlay 344,714 375,000 375,000 30,286 Total expenditures 344,714 375,000 375,000 30,286 Excess [deficiency] of revenues over [under] expenditures 7,123 [34,772] [34,772] 41,895 Unreserved fund balance, January 1 708,563 708,563 708,563 - Unreserved fund balance/GAAP fund balance December 31 715,686$ 673,791$ 673,791$ 41,895$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 27,328$ 320,400$ 320,400$ [293,072]$ Miscellaneous -78,000 78,000 [78,000] Total revenues 27,328 398,400 398,400 [371,072] Expenditures Culture and recreation 494,026 1,064,364 1,064,364 570,338 Total expenditures 494,026 1,064,364 1,064,364 570,338 Excess [deficiency] of revenues over [under] expenditures [466,698][665,964][665,964]199,266 Other financing sources [uses] Transfers in 517,000 645,500 645,500 [128,500] Total other financing sources [uses]517,000 645,500 645,500 [128,500] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]50,302 [20,464] [20,464] 70,766 Unreserved fund balance, January 1 49,764 49,764 49,764 - Unreserved fund balance/GAAP fund balance December 31 100,066$ 29,300$ 29,300$ 70,766$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Real estate taxes 3,010,914$ 3,337,038$ 3,337,038$ [326,124]$ Delinquent taxes 47,317 55,000 55,000 [7,683] Motor vehicle taxes 325,274 314,918 314,918 10,356 Special assessments 1,511,279 1,546,000 1,546,000 [34,721] Miscellaneous - 1,744,792 1,744,792 [1,744,792] Total revenues 4,894,784 6,997,748 6,997,748 [2,102,964] Expenditures Debt Service Principal retirement 5,163,995 3,196,000 3,196,000 [1,967,995] Interest and other charges 1,937,284 1,327,000 1,327,000 [610,284] Special assessments - 1,437,000 1,437,000 1,437,000 Miscellaneous 53,301 - - [53,301] Total expenditures 7,154,580 5,960,000 5,960,000 [1,194,580] Excess [deficiency] of revenues over [under] expenditures [2,259,796] 1,037,748 1,037,748 [3,297,544] Other financing sources [uses] Transfers in 1,629,188 2,000,000 2,000,000 [370,812] Bond proceeds 1,206,882 - - 1,206,882 Total other financing sources [uses]2,836,070 2,000,000 2,000,000 836,070 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]576,274 3,037,748 3,037,748 [2,461,474] Unreserved fund balance, January 1 1,089,325 1,089,325 1,089,325 - Unreserved fund balance, December 31 1,665,599 4,127,073$ 4,127,073$ [2,461,474]$ Reconciliation to GAAP Taxes receivable 3,121,345 Deferred revenue [3,062,827] GAAP Fund Balance, December 31 1,724,117$ Budgeted Amounts See independent auditor's report on the financial statements. 91 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 3,289,574$ 3,450,000$ 3,450,000$ [160,426]$ Miscellaneous 32,720 --32,720 Total revenues 3,322,294 3,450,000 3,450,000 [127,706] Expenditures Public works 2,520,556 3,109,733 3,109,733 589,177 Total expenditures 2,520,556 3,109,733 3,109,733 589,177 Excess [deficiency] of revenues over [under] expenditures 801,738 340,267 340,267 461,471 Other financing sources [uses] Transfers [out][659,200][417,350] [417,350][241,850] Total other financing sources [uses][659,200][417,350] [417,350][241,850] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]142,538 [77,083] [77,083]219,621 Unreserved fund balance, January 1 4,448,687 4,512,595 4,512,595 [63,908] Unreserved fund balance, December 31 4,591,225$ 4,435,512$ 4,435,512$ 155,713$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 20,071,807$ 21,976,800$ 21,976,800$ [1,904,993]$ Investment revenue - 90,000 90,000 [90,000] Miscellaneous 8,714 5,000 5,000 3,714 Total revenues 20,080,521 22,071,800 22,071,800 [1,991,279] Expenditures Public works 10,463,369 17,112,294 17,112,294 6,648,925 Total expenditures 10,463,369 17,112,294 17,112,294 6,648,925 Excess [deficiency] of revenues over [under] expenditures 9,617,152 4,959,506 4,959,506 4,657,646 Other financing sources [uses] Transfers [out][6,576,717] [3,889,750] [3,889,750] [2,686,967] Total other financing sources [uses][6,576,717] [3,889,750] [3,889,750] [2,686,967] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]3,040,435 1,069,756 1,069,756 1,970,679 Unreserved fund balances, January 1 13,642,411 12,603,880 12,603,880 1,038,531 Unreserved fund balances, December 31 16,682,846$ 13,673,636$ 13,673,636$ 3,009,210$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 3,292,501$ -$3,450,000$ [157,499]$ Miscellaneous 49 -- 49 Total revenues 3,292,550 -3,450,000 [157,450] Expenditures Public works 2,371,205 -3,356,138 984,933 Total expenditures 2,371,205 -3,356,138 984,933 Excess [deficiency] of revenues over [under] expenditures 921,345 -93,862 827,483 Other financing sources [uses] Transfers [out][497,350]-[417,350][80,000] Total other financing sources [uses][497,350]-[417,350][80,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]423,995 -[323,488]747,483 Unreserved fund balance, January 1 1,725,597 -1,373,911 351,686 Unreserved fund balances, December 31 2,149,592$ -$1,050,423$ 1,099,169$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 581,233$ 928,400$ 928,400$ [347,167]$ Investment revenue -350 350 [350] Miscellaneous 101,149 --101,149 Total revenues 682,382 928,750 928,750 [246,368] Expenditures Recreation 756,004 916,971 916,971 160,967 Total expenditures 756,004 916,971 916,971 160,967 Excess [deficiency] of revenues over [under] expenditures [73,622]11,779 11,779 [85,401] Other financing sources [uses] Transfers in 100,000 --100,000 Total other financing sources [uses]100,000 --100,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]26,378 11,779 11,779 14,599 Unreserved fund balance, January 1 21,709 21,709 21,709 - Unreserved fund balances, December 31 48,087$ 33,488$ 33,488$ 14,599$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 449,926$ 449,926$ 449,926$ -$ Investment revenue -2,500 2,500 [2,500] Miscellaneous -3,000 3,000 [3,000] Total revenues 449,926 455,426 455,426 [5,500] Expenditures General government 370,837 430,418 430,418 59,581 Total expenditures 370,837 430,418 430,418 59,581 Excess [deficiency] of revenues over [under] expenditures 79,089 25,008 25,008 54,081 Unreserved fund balance, January 1 1,062,930 933,944 933,944 128,986 Unreserved fund balances, December 31 1,142,019$ 958,952$ 958,952$ 183,067$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 6,535,830$ 7,523,584$ 7,523,584$ [987,754]$ Investment revenue -5,000 5,000 [5,000] Miscellaneous 36,427 25,000 25,000 11,427 Total revenues 6,572,257 7,553,584 7,553,584 [981,327] Expenditures General government 5,544,560 6,820,010 6,820,010 1,275,450 Total expenditures 5,544,560 6,820,010 6,820,010 1,275,450 Excess [deficiency] of revenues over [under] expenditures 1,027,697 733,574 733,574 294,123 Unreserved fund balance, January 1 2,188,453 2,188,453 2,188,453 - Unreserved fund balances, December 31 3,216,150$ 2,922,027$ 2,922,027$ 294,123$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 1,267,477$ 1,498,644$ 1,498,644$ [231,167]$ Investment revenue -40 40 [40] Miscellaneous 5,753 2,500 2,500 3,253 Total revenues 1,273,230 1,501,184 1,501,184 [227,954] Expenditures General government 1,194,150 1,546,186 1,546,186 352,036 Total expenditures 1,194,150 1,546,186 1,546,186 352,036 Excess [deficiency] of revenues over [under] expenditures 79,080 [45,002][45,002]124,082 Other financing sources [uses] Transfers in 80,000 80,000 80,000 - Total other financing sources [uses]80,000 80,000 80,000 - Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]159,080 34,998 34,998 124,082 Unreserved fund balance, January 1 154,658 154,658 154,658 - Unreserved fund balance, December 31 313,738$ 189,656$ 189,656$ 124,082$ 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 1,142,019$ 3,216,251$359,389$4,717,659$ Inventory and prepaid supplies --101,219 101,219 Total current assets 1,142,019 3,216,251 460,608 4,818,878 Capital assets: Capital assets --168,234 168,234 Less: accumulated depreciation --153,963 153,963 Total capital assets --14,271 14,271 Total assets 1,142,019 3,216,251 474,879 4,833,149 Deferred outflows of resources: KPERS OPEB deferred outflows of resources --2,507 2,507 Pension deferred outflows of resources --47,470 47,470 Total deferred outflows of resources --49,977 49,977 Total assets and deferred outflows of resources 1,142,019$ 3,216,251$524,856$4,883,126$ Liabilities: Current liabilities (payable from current assets): Accounts payable -$100$ 45,650$ 45,750$ Current portion of compensated absences payable --13,919 13,919 Current portion of accrued claims payable 183,446 605,000 -788,446 Total current liabilities (payable from current assets)183,446 605,100 59,569 848,115 Noncurrent liabilities: Compensated absences payable --16,382 16,382 Accrued claims payable 263,049 --263,049 Net KPERS OPEB obligation --8,723 8,723 Net pension liability --187,907 187,907 Total noncurrent liabilities 263,049 -213,012 476,061 Total liabilities 446,495 605,100 272,581 1,324,176 Deferred inflows of resources KPERS OPEB deferred inflows of resources --1,251 1,251 Pension deferred inflows of resources --8,395 8,395 Total deferred inflows of resources --9,646 9,646 Total liabilities and deferred inflows of resources 446,495$ 605,100$ 282,227$1,333,822$ Net Position Invested in capital assets, net of related debt -$-$14,271$ 14,271$ Unrestricted 695,524 2,611,151 228,358 3,535,033 Total net position 695,524$ 2,611,151$242,629$3,549,304$ CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2020 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 449,926$ 6,535,830$ 1,267,477$ 8,253,233$ Miscellaneous -36,427 5,752 42,179 Total operating revenues 449,926 6,572,257 1,273,229 8,295,412 Operating expenses General government 505,760 5,660,142 1,225,572 7,391,474 Depreciation --362 362 Total operating expenses 505,760 5,660,142 1,225,934 7,391,836 Operating income [loss][55,834] 912,115 47,295 903,576 Nonoperating revenues [expenses] Investment revenue - - - - Total other operating revenues [expenses]- - - - Income [loss] before transfers [55,834] 912,115 47,295 903,576 Transfers from [to] other funds Transfers in - - 80,000 80,000 Total transfers --80,000 80,000 Change in net position [55,834] 912,115 127,295 983,576 Net position, January 1 751,358 1,699,036 115,334 2,565,728 Net position, December 31 695,524$ 2,611,151$ 242,629$ 3,549,304$ COMBINING STATEMENT OF REVENUES, EXPENSES INTERNAL SERVICE FUND CITY OF SALINA, KANSAS For the Year Ended December 31, 2020 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 584,849$ 6,651,412$1,267,477$8,503,738$ Cash paid to suppliers of goods or services [506,685] [5,660,042] [919,219] [7,085,946] Cash paid to employees --[274,765] [274,765] Other operating receipts -36,427 5,752 42,179 Net cash provided by [used in] operating activities 78,164 1,027,797 79,245 1,185,206 Cash flows from investing activities Interest received ---- Cash flows from noncapital financing activities Transfers in --80,000 80,000 Net cash provided by [used in] noncapital financing activities --80,000 80,000 Net increase [decrease] in cash and cash equivalents 78,164 1,027,797 159,245 1,265,206 Cash and cash equivalents, January 1 1,063,855 2,188,454 200,144 3,452,453 Cash and cash equivalents, December 31 1,142,019$ 3,216,251$359,389$ 4,717,659$ For the Year Ended December 31, 2020 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS See independent auditor's report on the financial statements. 102 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][55,834]$ 912,115$ 47,295$ 903,576$ Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense --362 362 [Increase] decrease in inventory --26,673 26,673 [Increase] decrease in deferred outflows --[24,376] [24,376] Increase [decrease] in accounts payable [925]100 165 [660] Increase [decrease] in accrued compensated absences --[1,145] [1,145] Increase [decrease] in net pension liability --31,639 31,639 Increase [decrease] in KPERS OPEB liability --[1,405] [1,405] Increase [decrease] in claims payable 134,923 115,582 -250,505 Increase [decrease] in deferred inflows --37 37 Net cash provided by [used in] operating activities 78,164$ 1,027,797$ 79,245$ 1,185,206$ For the Year Ended December 31, 2020 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS (Continued) COMBINING STATEMENT OF CASH FLOWS See independent auditor's report on the financial statements. 103 STATISTICAL SECTION 2011 2012 2013 2014 2015 2016 2017 2018 Amount %Amount %Amount %Amount %Amount %Amount %Amount %Amount %Amount %Amount % Governmental activities Net investment in capital assets 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%143,559$ 100% Restricted 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%2,267 2% Unrestricted 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%(1,744) -1% Total governmental activities net position 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%144,081$ 100% Business-type activities Net investment in capital assets 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%63,742$ 66% Restricted 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%1,175 1% Unrestricted 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%31,692 33% Total business-type activities net position 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%96,610$ 100% Primary government Net investment in capital assets 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%207,301$ 86% Restricted 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%3,442 1% Unrestricted 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%29,948 12% Total primary government net position 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%240,691$ 100% Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 20202019 Fiscal Year Schedule 1 City of Salina, Kansas Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (in 000's) 104 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Expenses Governmental activities: General government 13,614$ 11,278$ 10,978$ 12,175$ 10,743$ 9,188$ 9,780$ 12,013$ 10,866$ 10,395$ Public safety 18,579 19,066 19,649 20,208 21,084 22,232 23,120 23,892 25,358 24,672 Public works 9,858 10,957 11,064 11,401 9,049 9,773 10,345 10,458 10,529 10,511 Public health and sanitation 1,368 1,383 1,369 347 995 1,095 1,126 1,256 1,156 1,323 Culture and recreation 6,693 5,338 4,809 5,156 6,517 6,612 6,880 7,040 6,879 5,034 Planning and development 3,450 3,362 3,399 3,236 1,915 2,047 1,835 2,369 2,522 2,004 Interest on long term debt 1,650 1,914 1,953 1,817 1,774 2,971 1,725 2,117 2,169 2,350 Total governmental activities expenses 55,212 53,298 53,221 54,340 52,077 53,918 54,811 59,145 59,479 56,288 Business-type activities: Solid waste disposal 2,945 2,067 3,532 1,867 1,766 2,335 2,365 2,382 2,871 2,056 Water and sewer 13,597 14,897 15,418 14,938 11,712 14,807 15,650 15,190 14,551 13,386 Sanitation 2,261 2,441 2,237 2,399 1,909 2,043 2,178 2,419 2,313 2,526 Golf course 825 723 768 837 821 792 852 926 888 805 Total business-type activities expenses 19,628 20,128 21,955 20,041 16,208 19,977 21,045 20,917 20,623 18,773 Total primary government expenses 74,840$ 73,426$ 75,176$ 74,381$ 68,285$ 73,895$ 75,856$ 80,062$ 80,102$ 75,061$ Program Revenues Governmental activities: Charges for services General government 6,106$ 6,328$ 5,548$ 5,662$ 3,151$ 3,134$ 3,470$ 3,569$ 3,401$ 3,339$ Public safety 3,766 4,290 4,656 4,222 4,600 4,891 4,601 4,815 4,357 4,325 Public works 262 306 277 255 193 238 348 285 309 294 Public health and sanitation 43 46 34 46 46 44 50 47 46 49 Culture and recreation 3,140 1,728 1,466 1,533 1,501 1,638 1,541 1,545 1,514 279 Planning and development 153 158 161 167 73 140 91 150 104 113 Operating grants and contibutions 2,907 4,495 4,200 4,015 3,394 4,332 4,541 4,299 4,540 4,714 Capital grants and contributions - - - - -733 - - - - Total governmental activities program revenues 16,377 17,351 16,342 15,900 12,958 15,150 14,642 14,710 14,271 13,115 Business-type activities: Charges for services Solid waste disposal 2,904 3,137 3,138 3,024 2,519 2,795 3,165 3,097 3,082 3,290 Water and sewer 17,904 19,099 17,938 18,742 19,059 19,322 19,855 20,202 20,510 19,449 Sanitation 2,334 2,462 2,514 2,553 2,529 2,751 2,885 3,006 3,325 3,194 Golf course 636 783 719 811 820 789 798 756 810 581 Operating grants and contributions 202 - - - - - - - - - Capital grants and contributions 3,804 274 -115 ---- -- Total business-type activities program revenues 27,784 25,755 24,309 25,245 24,927 25,657 26,703 27,061 27,727 26,513 Total primary government program revenues 44,161$ 43,106$ 40,651$ 41,145$ 37,885$ 40,807$ 41,345$ 41,771$ 41,998$ 39,628$ Net (Expense) Revenue Governmental activities (38,835)$ (35,947)$ (36,879)$ (38,440)$ (39,119)$ (38,768)$ (40,169)$ (39,800)$(45,208)$(43,173)$ Business-type activities 8,156 5,627 2,354 5,204 8,719 5,680 5,658 6,143 7,103 7,740 Total primary government net expense (30,679)$ (30,320)$ (34,525)$ (33,236)$ (30,400)$ (33,088)$ (34,511)$ (33,657)$(38,105)$(35,433)$ General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes, general purpose 7,783$ 8,272$ 8,031$ 8,315$ 8,242$ 8,196$ 9,101$ 8,623$ 9,708$ 10,308$ Property taxes, debt service 2,779 2,439 2,362 2,578 2,766 3,022 2,487 2,457 2,664 3,058 Motor vehicle taxes 1,150 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 1,520 Sales tax, general purpose 11,767 12,165 12,260 12,689 12,931 12,781 12,906 13,292 13,419 13,697 Selective sales tax 4,080 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 9,751 Other taxes 6,390 6,486 6,630 7,231 7,363 7,991 6,900 7,241 6,975 6,117 Investment revenues 77 66 67 98 86 148 92 183 670 286 Miscellaneous 872 660 9,918 1,160 2,371 5,842 2,003 1,062 1,168 8,328 Transfers, net 199 30 999 787 3,819 3,600 4,309 4,831 4,781 5,133 Total governmental activities 35,097 35,481 45,748 38,569 43,448 47,851 48,002 48,034 50,111 58,199 Business-type activities: Investment revenues 84 79 49 51 56 78 129 233 -4 Miscellaneous 330 434 279 97 - - 103 153 846 446 Reimbursements 180 132 79 - Transfers, net (199)(30)(950)-(3,781) (3,581) (4,367) (4,831) (4,781) (5,133) Total business-type activities 215 483 (622)328 (3,593) (3,424) (4,135) (4,445) (3,935) (4,682) Total primary government 35,312$ 35,964$ 45,126$ 38,897$ 39,855$ 44,427$ 43,867$ 43,589$ 46,176$ 53,517$ Change in Net Position Governmental activities (3,738)$ (466)$ 8,869$ 129$ 4,329$ 9,083$ 7,833$ 8,233 4,902 15,026 Business-type activities 8,371 6,110 1,732 5,532 5,126 2,256 1,523 1,698 3,169 3,058 Total primary government 4,633$ 5,644$ 10,601$ 5,661$ 9,455$ 11,339$ 9,356$ 9,931$ 8,071$ 18,084$ Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 Fiscal Year Schedule 2 City of Salina, Kansas Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (in 000's) 105 2012 2013 2014 2015 2016 2017 2018 2019 2020 (Note 2) General Fund Nonspendable 90$ 116$ 81$ 107$ 111$ 131$ 153$ 152$ 212$ 184$ Restricted - - - - - - - - - - Committed - - - - - - - - - - Assigned 293 540 331 239 199 136 214 340 274 244 Unreserved/unassigned 3,454 3,172 3,138 3,908 4,530 4,765 6,516 6,251 8,821 14,714 Total general fund 3,837$ 3,828$ 3,550$ 4,254$ 4,840$ 5,032$ 6,883$ 6,743$ 9,307$ 15,142$ Restatement Restated fund balance All other governmental funds Nonspendable -$ -$-$-$-$-$-$-$-$-$ Restricted 3,611 3,319 3,446 2,910 2,793 3,142 4,191 4,648 5,224 4,980 Committed 127 (516)7,486 9,886 8,695 14,284 10,072 7,325 8,086 13,225 Assigned 4,323 4,087 3,146 1,280 619 1,043 641 1,227 963 1,965 Unreserved/unassigned - - - - (10,537) (6,823) (28)(852)(7,804) (4,028) Total all other governmental funds 8,061$ 6,890$ 14,078$ 14,076$ 1,570$ 11,646$ 14,876$ 12,348$ 6,469$ 16,143$ Note 1: Prior year amounts have not been restated for the implementation of GASB Statement 54 in fiscal year 2011. Note 2: Committed fund balance increased due to changes from the implementation of GASB Statement 84 in fiscal year 2020. Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 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) 106 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Revenues Taxes (see Schedule 5)33,949$ 34,724$ 34,764$ 36,523$ 37,171$ 38,261$ 41,597$ 41,958$ 43,492$ 44,452$ Intergovernmental 2,901 4,487 4,192 4,008 3,385 4,325 4,536 4,297 4,573 5,317 Special assessments 1,535 2,315 1,706 1,810 1,679 1,669 1,539 1,546 1,596 1,511 Licenses and permits 6 8 9 7 10 7 6 3 4 5 Charges for services 9,730 8,484 8,536 8,276 6,416 6,953 6,880 7,338 6,804 5,557 Investment revenue 69 47 40 59 47 142 79 157 670 286 Reimbursements 32 36 9,015 123 491 1,406 - - - - Donations 241 83 141 111 238 90 129 Miscellaneous 599 537 810 799 1,853 4,315 1,851 884 1,545 5,656 Total revenues 48,821 50,638 59,072 51,846 51,135 57,219 56,599 56,421 58,774 62,913 Expenditures General government 3,461 3,574 4,269 3,986 5,342 5,422 5,423 5,649 4,582 5,506 Public safety 18,118 18,564 19,155 19,559 21,268 21,664 21,629 22,953 23,692 22,435 Public works 6,569 7,004 7,220 7,443 5,333 5,778 6,048 6,162 6,136 6,082 Public health and sanitation 1,330 1,343 1,344 319 982 1,078 1,097 1,236 1,121 1,280 Culture and recreation 5,900 4,449 3,939 4,292 5,659 5,817 6,143 6,255 6,047 4,245 Planning and development 3,344 3,256 3,293 3,232 1,910 2,042 1,801 2,185 2,311 1,794 Miscellaneous - - - - - - - - - 1,354 Capital outlay 9,847 7,327 13,047 11,009 25,527 24,001 18,281 16,344 21,913 12,041 Debt service Principal 4,411 8,592 5,038 5,261 6,250 17,902 5,088 14,243 10,324 5,164 Interest 2,084 2,103 1,867 1,864 1,833 3,152 1,771 2,192 2,136 2,366 Deposit to escrow - 92 - - - - - - - - Total expenditures 55,064 56,304 59,172 56,965 74,104 86,856 67,281 77,219 78,262 62,267 Other financing sources (uses) Bonds and notes issued 6,565 6,150 5,690 5,365 6,825 34,892 11,490 8,090 11,090 8,720 Bond and note premium 23 60 185 302 369 1,503 95 70 443 468 Transfers in 7,994 3,488 4,907 3,001 7,642 7,065 8,339 13,462 9,714 9,323 Transfers out (5,692) (3,458) (3,907) (2,999) (3,913) (3,555) (4,160) (4,186) (5,073) (4,271) Issuance costs - - - - - - - - - Other 156 - - - - - - - - - Total other financing sources (uses)9,046 6,240 6,875 5,669 10,923 39,905 15,764 17,436 16,174 14,241 Net change in fund balance 2,803$ 574$ 6,775$ 550$ (12,046)$ 10,268$ 5,082$ (3,362)$ (3,314)$ 14,887$ Debt service as a percentage of non-capital expenditures 17%28%18%18%20%50%16%37%28%18% Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 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 107 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Real estate 10,288$ 10,466$ 10,145$ 10,657$ 10,729$ 10,972$ 11,377$ 10,804$ 12,182$ 13,150$ Delinquent 274 245 248 235 279 246 210 276 190 216 Motor vehicle 1,150 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 1,520 General sales 11,767 12,165 12,260 12,689 12,931 12,781 12,906 13,293 13,419 13,697 Selective sales 4,080 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 9,751 Other taxes 6,390 6,485 6,630 7,231 7,362 7,991 6,900 7,240 6,975 6,117 Total taxes 33,949$ 34,724$ 34,764$ 36,523$ 37,171$ 38,261$ 41,597$ 41,958$ 43,492$ 44,452$ Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 Last Ten Fiscal Years (modified accrual basis of accounting) (in 000's) Fiscal Year City of Salina, Kansas Schedule 5 Tax Revenues by Source, Governmental Funds 108 Fiscal (Budget) Year Real Estate Personal Property State Assessed Total, Excluding Motor Vehicles Tax Rate Motor Vehicle (Note 1) Total, Taxable Assessed Value Estimated Total Market Value (Note 2) Ratio of Assessed Value to Est. Market Value 2011 367,750,803$ 19,918,188$ 14,685,585$ 402,354,576$ 26.022 50,330,252$ 452,684,828$ 2,884,188,981$15.70 2012 369,416,422$ 18,654,394$ 15,779,466$ 403,850,282$ 26.272 47,553,744$ 451,404,026$ 2,889,385,914$15.62 2013 370,390,092$ 17,769,120$ 16,948,264$ 405,107,476$ 26.927 48,882,411$ 453,989,887$ 2,917,267,724$15.56 2014 376,131,346$ 13,652,885$ 17,670,147$ 407,454,378$ 27.080 48,865,900$ 456,320,278$ 2,957,531,741$15.43 2015 381,087,426$ 12,607,815$ 18,984,453$ 412,679,694$ 27.311 50,350,566$ 463,030,260$ 2,957,531,741$15.66 2016 389,872,825$ 11,653,719$ 19,323,055$ 420,849,599$ 27.603 51,833,505$ 472,683,104$ 2,964,464,111$15.94 2017 399,918,216$ 10,900,308$ 19,671,685$ 430,490,209$ 26.129 50,970,796$ 481,461,005$ 3,097,885,103$15.54 2018 403,835,383$ 10,130,718$ 20,485,144$ 434,451,245$ 28.394 53,336,677$ 487,787,922$ 3,150,409,123$15.48 2019 421,108,311$ 11,245,813$ 22,113,195$ 454,467,319$ 29.720 54,687,311$ 509,154,630$ 3,294,115,685$15.46 2020 423,573,121$ 9,353,057$ 23,436,340$ 456,362,518$ 30.650 54,589,132$ 510,951,650$ 3,326,521,997$15.36 Note 1: The tax rate for motor vehicles is set based on the average countywide tax rate. The City of Salina then receives a share of that based on tax effort. Note 3: The Direct rate is expressed in dollars per thousand dollars of assessed value. Source: Saline County Clerk Schedule 6 City of Salina, Kansas Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Note 2: The estimated market value excludes the value of the State assessed properties. Market value information is not available for those properties. However, state assessed property is generally assessed at 33% of market value, except for railroads, which are assessed at 15% of market value. Assessed Value 109 City of Salina Saline County USD 305 (2)Other (1) Fiscal (Budget) Year Operating Millage Debt Service Millage Total City Millage Operating Millage Debt Service Millage Total County Millage Operating Millage Debt Service Millage Total USD Millage Other 2011 19.236 6.786 26.022 31.432 31.432 45.818 13.095 58.913 12.131 128.498 2012 20.326 5.946 26.272 32.576 32.576 47.127 11.693 58.820 11.989 129.657 2013 20.242 5.948 26.190 34.823 34.823 47.133 11.516 58.649 12.135 131.797 2014 20.539 6.388 26.927 37.895 37.895 46.599 11.517 58.116 12.941 135.879 2015 20.692 6.388 27.080 38.047 38.047 44.088 11.517 55.605 13.305 134.037 2016 19.950 7.361 27.311 38.275 38.275 44.465 11.655 56.120 13.293 134.999 2017 21.694 5.909 27.603 37.508 37.508 44.069 11.674 55.743 13.299 134.153 2018 20.339 5.790 26.129 37.321 37.321 45.130 11.371 56.501 13.189 133.140 2019 22.285 6.109 28.394 38.437 38.437 46.776 10.746 57.522 13.988 138.341 2020 22.908 6.812 29.720 41.097 41.097 44.761 10.747 55.508 13.983 140.308 Source: 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 by these jurisdictions. Schedule 7 City of Salina, Kansas Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) (1) The "Other" column includes the State of Kansas, the Salina Airport Authority, the Salina Public Library and Kansas State Extension District #3. Total 110 Taxpayer Type of Business Assessed Valuation % of Total Valuation Rank Assessed Valuation % of Total Valuation Rank Evergy (Westar Energy (Western Resources)Utility 5,575,032$ 1.39%4 13,682,027$ #DIV/0!1 SFC Global Supply Chain, Inc. (Schwan's)Pizza Manufacturing 8,589,167 2.15%1 6,855,966 #DIV/0!2 Kansas Gas Service Utility 3,622,225 0.90%7 4,415,353 #DIV/0!3 RAF Salina LLC Retail Shopping Mall 6,254,013 1.56%2 4,296,499 #DIV/0!4 S&B Motels Motel -N/A 3,774,927 #DIV/0!5 Central Mall Realty Holding LLC Regional Shopping Center 3,587,574 N/A 2,868,321 #DIV/0!6 Union Pacific Railroad 0.00%N/A 2,570,668 #DIV/0!7 Menard Inc.Home Improvement N/A 2,465,098 #DIV/0!8 Individual Residential 2,247,083 N/A 2,440,724 #DIV/0!9 Sams Real Estate Business Trust/Walmart Discount Retail Stores N/A 2,286,508 #DIV/0!10 Wal-mart Real Estate Business Trust Discount Retail Stores 3,468,733 0.87%5 Great Plains Manufacturing Manufacturing 2,879,602 0.72%10 Gateway Properties Shopping Mall (Midstate)-0.00%6 Southwestern Bell Telephone Utility 3,107,097 0.78%8 Sunflower Bank Banking Institution -0.00%9 Salina Regional Health Center Hospital and Medical Offices 5,589,420 1.40%3 Combined Valuation of the Ten Largest Taxpayers 44,919,946$ 45,656,091$ City Valuation 400,248,283$ -$ Percent of Total City Assessed Valuation 11.22%#DIV/0! Source: Saline County Clerk's Office or recent OS Schedule 8 City of Salina, Kansas Principal Property Taxpayers Current Year and Ten Years Ago 2020 (2019 Assessed Value)2011 (2010 Assessed Value) 111 Fiscal (Budget) Year Taxes Levied for the fiscal year Amount Percentage Delinquent Collections (1)Amount Percentage of levy 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$100.8% 2013 10,550,730$ 10,145,404$ 96.2% 354,845$ 10,500,249$99.5% 2014 10,868,225$ 10,776,688$ 99.2% 62,432$ 10,839,120$99.7% 2015 10,991,959$ 10,460,246$ 95.2% 372,726$ 10,832,972$98.6% 2016 11,209,245$ 10,984,630$ 98.0% 184,970$ 11,169,600$99.6% 2017 11,564,876$ 11,320,197$ 97.9% 203,904$ 11,524,101$99.6% 2018 11,248,278$ 10,938,457$ 97.2% 276,340$ 11,214,797$99.7% 2019 12,335,808$ 12,097,740$ 98.1% 189,587$ 12,287,327$99.6% 2020 13,506,590$ 13,203,183$ 97.8% 216,358$ 13,419,541$99.4% 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 112 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 City Direct Tax Rate General 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%0.75%0.75%0.75%0.75% County-wide Tax Rate 1.00%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)63.34%61.72%60.86%60.23%60.28%60.28%60.28%59.85%60.33%60.17% In May, 2016, the voters approved an increase in the Special Purpose Tax rate from .40% to .75%, to be effective October 1, 2016. Source: Kansas Department of Revenue In addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. Schedule 10 City of Salina, Kansas Direct Sales Rate by Taxing Entity Last Ten Fiscal Years Fiscal Year 113 # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts WaterRate Class Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Residential 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 18,238 965,782 Commercial 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 1,612 319,080 Industrial 42 174,595 40 182,529 42 193,233 44 202,407 44 191,236 44 193,503 44 211,843 44 196,229 43 164,766 Government 99 54,618 99 46,484 97 45,346 97 41,928 99 45,136 99 41,552 98 35,932 97 41,911 94 28,200 Apartment 169 70,263 168 67,155 166 60,865 164 61,400 163 57,039 163 58,378 157 71,559 157 62,127 156 58,651 Schools 81 57,027 84 44,187 84 45,328 85 45,545 85 41,176 83 36,039 81 30,810 79 31,839 78 24,518 Industrial special 1 40,448 1 20,439 - - - - - - - - - - - - - - Consumed in production 12 19,266 12 18,665 12 19,264 12 17,338 9 9,580 8 9,652 7 6,966 7 6,974 7 4,109 Rural water 1 25,930 1 21,530 1 22,993 1 21,915 1 23,384 1 25,624 1 22,345 1 21,663 1 31,776 Hospitals 10 17,896 9 26,482 10 32,184 9 31,858 9 33,728 9 35,132 9 31,856 9 29,892 9 29,483 Religious/non profit 38 5,399 37 4,810 37 4,973 37 4,986 36 5,224 36 4,749 36 4,458 35 2,780 35 2,215 Other taxable deductions - - - - - - - - - - - - - - - - - - Engineering studies 8 6,104 8 6,822 8 5,095 8 4,807 7 4,573 7 4,772 7 4,471 7 3,835 6 2,553 Providing taxable service 2 6,118 2 3,495 1 3,561 1 3,167 1 3,921 1 3,347 1 2,331 1 2,676 1 1,909 Sale of component parts 8 5,726 6 5,972 6 6,850 5 3,900 4 3,129 4 2,917 4 2,190 4 1,542 4 1,310 Fire hydrant 4 2,533 3 1,922 2 1,474 - - 3 1,727 3 1,790 3 2,829 3 1,180 3 2,106 Industrial consumed in production 3 3,543 3 4,417 3 3,588 3 2,388 3 1,930 3 1,962 3 2,107 3 2,219 3 1,946 Sales of farm equipment 1 83 1 107 1 48 1 53 1 54 1 104 1 56 1 124 1 109 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 20,291 1,638,511 Water Rate Schedule: Monthly meter charge (5/8")$4.74 $4.88 $5.03 $5.20 $5.36 $5.52 $5.74 $5.94 $6.15 Commodity charge (per 000 gal.):0 - 2000 gal.$3.88 $4.04 $4.24 $4.45 $4.48 $4.77 $4.96 $5.13 $5.31 2001 - 10,000 gal Over 10,000 gal.Excess use charge $7.76 $8.08 $8.48 $8.90 $9.16 $9.54 $9.92 $10.26 $10.62 Wastewater Rate Schedule: Monthly base charge $6.77 $6.97 $7.11 $7.22 $7.36 $7.51 $7.81 $8.08 $8.36 Unit cost (per 000 gal.):$4.61 $4.79 $4.94 $5.01 $5.19 $5.29 $5.51 $5.70 $5.90 Water sold is expressed in thousands of gallons. Number of Accounts billed is the annual number of billings for each class divided by 12. Monthly meter charge increases with the size of the meter. Residential Wastewater is calculated based on Winter Quarter water consumption. Other accounts are based on monthly water consumption. 2008 Water Consumption Rate Structure changed from a decreasing tier structure to one rate and Excess Use Charge which is double the consumption rate Source: City of Salina Water Customer Accounting Office. 20142013 20152012 Schedule 11 City of Salina, Kansas 202020192018 Water Sales by Class of Customer Last Ten Fiscal Years 20172016 114 Fiscal Year General Obligation Bonds Loans Payable Capital Lease Temporary Notes General Obligation Bonds Water Revenue Bonds Loans Payable Temporary Notes Total Primary Government Percentage of Personal Income 2011 55,225,670$-$ -$ 3,400,000$ 7,417,907$ 16,193,925$-$ -$ 82,237,502$ 4.3% 2012 49,109,575$-$ -$ 1,485,000$ 9,613,926$ 15,850,228$-$ -$ 76,058,729$ 3.8% 2013 49,631,797$-$ -$ 3,800,000$ 8,519,799$ 15,226,532$-$ -$ 77,178,128$ 3.7% 2014 50,033,555$-$ 176,235$ 5,000,000$ 9,587,351$ 14,592,836$6,208,102$ -$ 85,598,079$ 4.1% 2015 50,840,632$-$ 479,366$ 5,995,000$ 8,539,773$ 13,949,139$5,753,620$ -$ 85,557,530$ 4.1% 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% 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% 2018 51,968,310$12,185,053$ -$ 18,123,505$ 5,282,578$ 11,898,051$10,632,351$ -$ 110,089,848$ 4.9% 2019 54,607,702$12,640,000$ -$ 11,170,000$ 4,102,298$ 10,330,000$46,354,852$ -$ 139,204,852$ 6.0% 2020 56,587,549$12,640,000$ -$ 7,050,000$ 8,742,451$ 9,615,000$ 35,926,029$ -$ 130,561,029$ 5.5% Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 Governmental Activities Business-Type Activities Schedule 12 City of Salina, Kansas Ratio of Outstanding Debt by Type Last Ten Fiscal Years 115 Fiscal Year General Obligation Bonds Capital Lease Temporary Notes Total Less: Debt Service Fund Net General Bonded Debt Percentage of Actual Taxable Value of Per Capita 2011 62,443,577$3,400,000$ 65,843,577$1,236,026$ 64,607,551$14.3%1,354.26$ 2012 58,723,501$-$1,485,000$ 60,208,501$582,412$ 59,626,089$13.1%1,241.05$ 2013 58,151,596$-$3,800,000$ 61,951,596$707,763$ 61,243,833$13.4%1,280.02$ 2014 59,620,906$176,235$ 5,000,000$ 64,797,141$407,864$ 64,389,277$13.9%1,345.17$ 2015 59,380,405$479,366$ 5,995,000$ 65,854,771$745,339$ 65,109,432$13.8%1,361.75$ 2016 59,456,780$321,174$ 11,505,000$71,282,954$1,248,914$ 70,034,040$14.5%1,479.51$ 2017 62,514,738$157,868$ 6,811,742$ 69,484,348$1,509,863$ 67,974,485$13.9%1,446.45$ 2018 57,250,888$-$18,123,505$75,374,393$1,851,358$ 73,523,035$14.4%1,564.52$ 2019 58,710,000$-$11,170,000$69,880,000$1,142,418$ 68,737,582$13.5%1,471.39$ 2020 65,330,000$-$7,050,000$ 72,380,000$1,724,117$ 70,655,883$#DIV/0!1,517.85$ Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 General Bonded Debt Outstanding Schedule 13 City of Salina, Kansas Ratio of Net General Bonded Debt Outstanding Last Ten Fiscal Years 116 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 70,655,883$ 100.00%70,655,883$ Overlapping: Salina Airport Authority 20,175,000 100.00%20,175,000 Saline County 216,812 73.88%163,268 USD 305 104,270,000 93.07%101,854,179 Total Overlapping Debt 124,661,812 122,192,447 Total Direct and Overlapping Debt 195,317,695$ 192,848,330$ Per Capita Direct and Overlapping debt 4,033.39$ 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, 2020 117 Assessed Valuation -$ Debt Limit (30% of Assessed Value)- Debt applicable to limit: Total Bonded Debt 134,396,160$ Less GO Debt Attributable to Exempt Purposes (8,742,451) Less Revenue Bonds (9,615,000) Less Loans Payable (48,566,029) Less Fund Balance designated for Debt Service (1,724,117) Total Debt Applicable to Limitation 65,748,563$ Legal debt margin (65,748,563)$ 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Debt Limit 134,928,191$ 135,421,208$ 136,196,966$ 136,896,083 138,909,078 141,804,931 142,000,537 146,336,377 152,724,804 - Total net debt applicable to limit 57,747,032 49,309,445 52,724,034 54,625,691 56,090,293 62,072,485 61,296,184 68,240,457$ 66,232,649$ 65,748,563$ Legal debt margin 77,181,159$ 86,111,763$ 83,472,932$ 82,270,392$ 82,818,785$ 79,732,446$ 80,704,353$ 78,095,920$ 86,492,155$ (65,748,563)$ Total net debt applicable to the limit as a percentage of debt limit 43%36%39%40%40%44% 43% 47%43%#DIV/0! Last Ten Fiscal Years Fiscal Year Legal Debt Margin Calculation for 2020 Schedule 15 City of Salina, KansasLegal Debt Margin 118 Utility Service Less Operating Net Available Debt Service Fiscal Year Charges Expenses Revenue Principal Interest Coverage 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 2020 19,448,780$12,460,334$ 6,988,446$ 715,000$ 327,117$ 6.71 Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 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 119 Fiscal Year Population Per Capita Personal Income (Saline County) Personal Income, Salina (interpolated) Unemployment Rate Labor Force, City of Salina USD 305 Headcount Percentage Free and Reduced Lunch City .5 cent sales tax Per Capita .5 cent sales Tax As a % of per capita personal income 2010 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% 2020 46,550 50,820$ 2,365,671,000$ 3.4%30,094 7,156 59.0%5,998,424$128.86$ 0.254% 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 County Per Capita Personal income as reported by the Bureau of Economic Analysis 2017 Per Capita Personal Income staff projection 2010 -2020 Employment City of Salina USD305 headcount and free and reduced lunch data derived from Kansas Department of Education./USD 305 Budget Document Employment: Kansas Department of Labor Schedule 17 City of Salina, Kansas Demographic and Economic Statistics Last Ten Fiscal Years Free and Reduced Lunch percentage is an average of the percentages for each building reported. School Data is reported at beginning of school year, eg 2017- 2018 school year is reported as 2017. 120 Employer Type of Business Employees Rank Percentage of Labor Force Employees Rank Percentage of Labor Force Salina Regional Health Center Health Care 1082 2 4.1%1,875 1 6.2% Unified School District No 305 Public School System 935 3 3.5%1,500 2 5.0% Schwan's Global Supply Chain Frozen Pizza Manufacturing 1850 1 7.0%1,200 3 4.0% Great Plains Manufacturing Agricultrual & Landscaping Equipment 650 5 2.5%1,200 4 4.0% Exide Technologies/Stryten Manufacturing Automotive Battery Manufacturer 800 4 3.0%700 5 2.3% City of Salina City Government 493 7 1.9%425 6 1.4% Salina Vortex Manufacturing -385 7 1.3% Saline County County Government 277 8 325 8 1.1% Walmart Retail -250 9 0.8% REV Group Manufacturing -175 10 0.6% Signify Fluorescent Lamps 600 6 2.3%- Eldorado National Busses/Recreational Vehicle 255 9 1.0%- Raytheon Aircraft Aircraft Manufacturing -10 0.0%- Total 6,942 26.4%8,035 26.7% Source: Salina Chamber of Commerce 2020 Schedule 18 City of Salina, Kansas Principal Employers Current Year and Nine Years Ago 2011 121 GOVERNMENTAL AUDIT SECTION Federal Federal Grantor/Pass-Through CFDA Grantor/Program Title Number Expenditures U.S. Department of Housing and Urban Development Fair Housing Assistance Program 14.401 91,100$ Passed Through the Kansas Department of Commerce: Community Development Block Grants/Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants 14.218 122,055 Total Community Development Block Grants/Entitlement Grants Cluster 122,055 Passed Through the Kansas Housing Resources Corporation: Emergency Solutions Grant 14.231 177,407 Total U.S. Department of Housing and Urban Development 390,562 U.S. Department of Justice Edward Byrne Memorial Justice Assistance Grant 16.738 52,713 Total U.S. Department of Justice 52,713 U.S. Department of the Treasury Passed Through Saline County: Coronavirus Relief Fund 21.019 1,218,475 Total U.S. Department of the Treasury 1,218,475 U.S. Department of Homeland Security Passed Through Kansas Adjutant General: Disaster Grants - Public Assistance (Presidentially Declared Disasters)97.036 42,885 Total U.S. Department of Homeland Security 42,885 U.S. Department of Transportation Passed Through Kansas Department of Transporation: Highway Safety Cluster: State and Community Highway Safety 20.600 3,284 National Priority Safety Programs 20.616 2,262 Total Highway Safety Cluster 5,546 Total U.S. Department of Transportation 5,546 Total Expenditures of Federal Awards 1,710,181$ CITY OF SALINA, KANSAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2020 See independent auditor's report on the financial statements. 122 123 CITY OF SALINA, KANSAS NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2020 1.Organization The City of Salina, Kansas (the City), is the recipient of several federal awards. All federal awards received directly from federal agencies as well as those awards that are passed through other government agencies, are included on the Schedule of Expenditures of Federal Awards. 2.Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City and is presented on the modified accrual basis of accounting, which is described in Note 1 to the City’s basic financial statements. The information presented in this schedule is in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200,Uniform Administrative Requirements,Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in or used in the preparation of the basic financial statements. The City elected not to use the 10% de minimis indirect cost rate. 3.Local Government Contributions Local cost sharing is required by certain federal grants. The amount of cost sharing varies with each program. Only the federal share of expenditures is presented in the Schedule of Expenditures of Federal Awards. 4.Additional Audits Grantor agencies reserve the right to conduct additional audits of the City’s grant programs for economy and efficiency and program results that may result in disallowed costs to the City. However, management does not believe such audits would result in any disallowed costs that would be material to the City’s financial position at December 31, 2020. 5.Outstanding Loans The City did not have any outstanding loans under any federal grants at December 31, 2020. 6.Pass Through Numbers Pass through numbers have not been assigned to pass through grants on the Schedule of Expenditures of Federal Awards. Section I - Summary of Auditor's Results Financial Statements Type of auditor's report issued:Unmodified Internal control over financial reporting: Material weakness(es) identified?Yes X No Significant deficiency(ies) identified that are not considered to be material weaknesses?Yes X None reported Noncompliance material to financial statements noted?Yes X No Federal Awards Internal control over major programs: Material weakness(es) identified?Yes X No Significant deficiency(ies) identified that are not considered to be material weaknesses?Yes X None reported Type of auditor's report issued on compliance for major programs:Unmodified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Uniform Guidance?Yes X No Identification of major programs: CFDA Number(s) 21.019 Dollar threshold used to distinguish between type A and type B programs: Auditee qualified as low-risk auditee?Yes X No CITY OF SALINA, KANSAS Coronavirus Relief Fund $750,000 Name of Federal Program or Cluster SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2020 See independent auditor's report on the financial statements. 124 Section II - Financial Statement Findings Prior Year Findings None Noted. Current Year Findings None Noted. Section III - Federal Award Findings and Questioned Costs Prior Year Findings None Noted. Current Year Findings None Noted. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) CITY OF SALINA, KANSAS For the Year Ended December 31, 2020 See independent auditor's report on the financial statements. 125 126 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH “GOVERNMENT AUDITING STANDARDS” Mayor and City Commissioners City of Salina, Kansas We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States,the financial statements of the government 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 (the City),as of and for the year ended December 31, 2020, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated July 23,2021. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal controls exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charge with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws,regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 127 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Certified Public Accountant Lawrence, Kansas July 23,2021 128 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE Mayor and City Commissioners City of Salina, Kansas Report on Compliance for Each Major Federal Program We have audited the compliance of the City of Salina, Kansas (the City), with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on the City’s major federal program for the year ended December 31, 2020. The City’s major federal financial program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for the City’s major federal program based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United State of America; the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S.Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining,on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for the major federal program. However, our audit does not provide a legal determination on the City’s compliance. Opinion on Each Major Federal Program In our opinion,the County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended December 31, 2020. Report on Internal Control Over Compliance The management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on the major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County’s internal control over compliance. 129 A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in the internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Certified Public Accountant Lawrence, Kansas July 23, 2021 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 Bonds 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 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). See TAX MATTERS in this Official Statement. New Issue Moody’s Rating: “Aa3” Bank Qualified Book-Entry Only $6,220,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B Dated: Date of Delivery (the “Dated Date”) Due: As Shown Herein The General Obligation Refunding Bonds, Series 2021-B 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 or earlier redemption, 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 SCHEDULE (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 Bonds as the same becomes due. See THE BONDS - “Security” herein. The Bonds are offered when, as and if issued by the City and received by the Underwriter subject to the approval of legality by Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City. It is expected that the Bonds will be available for delivery through the facilities of DTC, in New York, New York, on or about September 8, 2021. This Official Statement is dated August 16, 2021. THIS COVER PAGE CONTAINS INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THE ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. MATURITY SCHEDULE $6,220,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B Serial Bonds Base CUSIP(1) Maturity Amount Rate Yield 794744 10-01-22 $600,000 2.000% 0.180% ER9 10-01-23 610,000 2.000 0.200 ES7 10-01-24 630,000 2.000 0.300 ET5 10-01-25 645,000 2.000 0.400 EU2 10-01-26 650,000 2.000 0.500 EV0 10-01-27 655,000 2.000 0.650 EW8 10-01-28 670,000 2.000 0.800 EX6 10-01-29(2) 420,000 1.000 0.900 EY4 10-01-30(2) 265,000 1.000 1.000 EZ1 10-01-31(2) 275,000 1.150 1.150 FA5 10-01-32(2) 280,000 1.250 1.250 FB3 10-01-33(2) 290,000 1.350 1.350 FC1 10-01-34(2) 230,000 1.400 1.400 FD9 (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 of the Owners of the 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 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. See THE BONDS – “Redemption Provisions” herein. IN CONNECTION WITH THIS OFFERING, THE 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 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE BONDS ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE BONDS 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 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 Aaron Peck, Commissioner Karl Ryan, Commissioner CITY STAFF Mike Schrage, City Manager Debbie Pack, Finance Director JoVonna Rutherford, 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 Underwriter to give any information or to make any representations with respect to 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 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 Underwriter has 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 Underwriter does 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 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 BONDS ......................................................................................................................................... 2 THE DEPOSITORY TRUST COMPANY ................................................................................................... 6 THE FINANCING PLAN ......................................................................................................................... 8 SOURCES AND USES OF FUNDS .......................................................................................................... 9 RISK FACTORS AND INVESTMENT CONSIDERATIONS ......................................................................... 9 LEGAL MATTERS ................................................................................................................................. 12 TAX MATTERS ..................................................................................................................................... 12 RATINGS.............................................................................................................................................. 14 MUNICIPAL ADVISOR .......................................................................................................................... 14 UNDERWRITING ................................................................................................................................. 14 ABSENCE OF MATERIAL LITIGATION ................................................................................................... 14 CONTINUING DISCLOSURE ................................................................................................................. 14 CERTIFICATION OF OFFICIAL STATEMENT .......................................................................................... 15 APPENDIX A: INFORMATION CONCERNING THE CITY FINANCIAL OVERVIEW OF THE CITY .............................................................................................. A-1 GENERAL INFORMATION CONCERNING THE CITY ........................................................................ A-2 ECONOMIC INFORMATION CONCERNING THE CITY ..................................................................... A-6 DEBT SUMMARY OF THE CITY ....................................................................................................... A-9 FINANCIAL INFORMATION CONCERNING THE CITY ...................................................................... A-13 APPENDIX B: FORM OF CONTINUING DISCLOSURE UNDERTAKING APPENDIX C: AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2020 1 OFFICIAL STATEMENT CITY OF SALINA, KANSAS $6,220,000 GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B 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 $6,220,000 General Obligation Refunding Bonds, Series 2021-B (the “Bonds”). The Bonds are being issued to provide funds to refinance certain outstanding bonds 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 Bonds as the same becomes due. See 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 City and other sources deemed to be reliable. The presentation of information herein is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. 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 LEGAL MATTERS 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 ordinance and resolution of the governing body of the City authorizing the Bonds (collectively, the “Bond Resolution”), as applicable. Copies of the Bond Resolution are available upon request to the City or the Municipal Advisor. Additional Information Additional information regarding the City or the Bonds may be obtained from Stifel, Nicolaus & Company, Incorporated, 4801 Main Street, Suite 530, Kansas City, Missouri 64112, telephone 816-203-8728. 2 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. 10-427 et seq., and K.S.A. 10- 620 et seq., all as amended and supplemented from time to time, and an Ordinance passed by the governing body of the City and 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 benefitted by the construction of certain public improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the 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 City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. 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, 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 Issuer, Bonds maturing on October 1 in the years 2029, and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2028, and thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. 3 Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the City shall determine, Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in minimum Authorized Denomination in such equitable manner as the Bond Registrar may determine. In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Bond is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner’s duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Bond Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). Notice and Effect of Call for Redemption. Unless waived by any Owner of Bonds to be redeemed, if the City shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Bonds to the Bond Registrar. In addition, the City shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Bond Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Bond Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Bond Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. 4 Designation of Bond Paying Agent and Bond Registrar The City will at all times maintain a paying agent and bond registrar meeting the qualifications set forth in the Bond Resolution. The City reserves the right to appoint a successor paying agent or bond registrar. No resignation or removal of the paying agent or bond registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or bond registrar. Every paying agent or bond registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the “Bond Registrar” and “Bond Paying Agent”) has been designated by the City as paying agent for the payment of principal of and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds. Registration, Transfer and Exchange of Bonds As long as any of the Bonds remain Outstanding, each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as hereinafter provided. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner’s duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Bond Resolution. The City shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Bond Paying Agent, the Bond Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption has been mailed by the Bond Paying Agent and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Method and Place of Payment of the Bonds The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office of the Bond Paying Agent. The interest payable on each Bond on any Bond Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Bond Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Bond Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. 5 “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.” Mutilated, Lost, Stolen or Destroyed Bonds If (a) any mutilated Bond is surrendered to the Bond Registrar or the Bond Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Bond, and (b) there is delivered to the Issuer and the Bond Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the Issuer or the Bond Registrar that such Bond has been acquired by a bona fide purchaser, the Issuer shall execute and, upon the Issuer's request, the Bond Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and payable, the Issuer, in its discretion, may pay such Bond instead of issuing a new Bond. Upon the issuance of any new Bond, the Issuer may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent) connected therewith. Nonpresentment of Bonds If any Bond is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Bond have been made available to the Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Bond, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Bond Resolution or on, or with respect to, said Bond. If any Bond is not presented for payment within four (4) years following the date when such Bond becomes due at Maturity, the Paying Agent shall repay to the Issuer the funds theretofore held by it for payment of such Bond, and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the Issuer, and the Owner thereof shall be entitled to look only to the Issuer for payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the Issuer shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. 6 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 7 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 Bonds. The Bonds 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 will be issued for each scheduled maturity of the Bonds, 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 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds 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 Bonds 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 Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. 4. To facilitate subsequent transfers, all Bonds 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 Bonds 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 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds 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. 8 6. Redemption notices shall be sent to DTC. If less than all of the Bonds 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 Bonds 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Bonds 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 Bonds purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the Paying Agent. The requirement for physical delivery of the Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Bonds to the Paying Agent’s DTC account. 10. DTC may discontinue providing its services as depository with respect to the Bonds 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. 9 THE FINANCING PLAN Proceeds from the sale of the Bonds will be used to currently refund the City’s outstanding General Obligation Internal Improvement Bonds, Series 2013-B and General Obligation Internal Improvement Bonds, Series 2014-A (collectively the “Refunded Bonds”). The following is a description of the bonds to be refunded: General Obligation Internal Improvement Bonds, Series 2013-B Outstanding Amount Maturity Date Interest Rate Redemption Date Redemption Price $265,000 10/01/21 3.000% 10/01/21(1) 100% 270,000 10/01/22 3.000 10/01/21 100% 275,000 10/01/23 3.000 10/01/21 100% 285,000 10/01/24 3.000 10/01/21 100% 290,000 10/01/25 3.500 10/01/21 100% 300,000 10/01/26 3.500 10/01/21 100% 310,000 10/01/27 3.500 10/01/21 100% 315,000 10/01/28 3.500 10/01/21 100% 350,000 10/01/33 4.000 10/01/21 100% General Obligation Internal Improvement Bonds, Series 2014-A Outstanding Amount Maturity Date Interest Rate Redemption Date Redemption Price $305,000 10/01/21 3.000% 10/01/21(1) 100% 310,000 10/01/22 2.500 10/01/21 100% 315,000 10/01/23 2.500 10/01/21 100% 330,000 10/01/24 2.750 10/01/21 100% 340,000 10/01/25 2.750 10/01/21 100% 345,000 10/01/26 3.000 10/01/21 100% 350,000 10/01/27 3.000 10/01/21 100% 365,000 10/01/28 3.000 10/01/21 100% 375,000 10/01/29 3.150 10/01/21 100% 235,000 10/01/30 3.500 10/01/21 100% 500,000(2) 10/01/32 3.750 10/01/21 100% 535,000(2) 10/01/34 3.500 10/01/21 100% (1)At closing, the Issuer will transfer funds to the Paying Agent to refund the October 1, 2021 maturities of the Refunded Bonds to their Stated Maturity. (2)Denotes Term Bond with mandatory redemptions 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. Sources of Funds: Principal Amount $6,220,000.00 Transfers from Prior Issuer Debt Service Fund 680,943.75 Reoffering Premium 267,544.95 Total Sources of Funds $7,168,488.70 Uses of Funds: Deposit to Current Refunding Fund $7,075,943.75 Costs of Issuance 67,717.58 Underwriter’s Discount & Rounding Amount 24,827.37 Total Application $7,168,488.70 10 RISK FACTORS AND INVESTMENT CONSIDERATIONS A PROSPECTIVE PURCHASER OF THE BONDS DESCRIBED HEREIN SHOULD BE AWARE THAT THERE ARE CERTAIN RISKS ASSOCIATED WITH THE BONDS 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 BONDS. PROSPECTIVE PURCHASERS OF THE BONDS 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 Bonds. 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 Bonds The enforceability of the rights and remedies of the owners of Bonds, and the obligations incurred by the City in issuing the Bonds, 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 Bonds to judicial discretion and interpretation of their rights in bankruptcy and otherwise, and consequently may involve risks of delay, limitation or modification of their rights. Debt Service Source; Issuer’s Tax Revenues The Bonds 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 11 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 Bonds Opinions of Bond Counsel will be obtained to the effect that interest earned on the Bonds 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 Bonds includable in gross income for federal income tax purposes. The City has covenanted in the Bond Resolution and in other documents and certificates to be delivered in connection with the issuance of the Bonds 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 Bonds. Because the existence and continuation of the excludability of the interest on the Bonds depends upon events occurring after the date of issuance of the Bonds, 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 Bonds 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 Bonds to become includable in gross income as of the date of issuance. Premium on the Bonds The initial offering prices of certain maturities of the Bonds 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 Bonds are subject to redemption at par under the various circumstances described under THE BONDS – “Redemption Provisions.” No Additional Interest or Mandatory Redemption upon Event of Taxability The Bond Resolution does not provide for the payment of additional interest or penalty on the Bonds or the mandatory redemption thereof if the interest thereon becomes includable in gross income for federal income tax purposes. Likewise, the Bond Resolution does not provide for the payment of any additional interest or penalty on the Bonds if the interest thereon becomes subject to income taxation by the State of Kansas. Suitability of Investment The tax exempt feature of the Bonds 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 Bonds are an appropriate investment. 12 Market for the Bonds Ratings. The Bonds 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 Bonds. Secondary Market. There is no assurance that a secondary market will develop for the purchase and sale of the Bonds. Prices of Bonds 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 Bonds 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 Bonds 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 Bonds being subjected to Federal income taxes, such legislation or proposals could affect the value or marketability of the Bonds. Prospective purchasers of the Bonds should consult their own tax advisers regarding the impact of any change in law on the Bonds. 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 Bonds 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 BONDS, LEGAL MATTERS, TAX MATTERS, and APPENDIX B – FORM OF CONTINUING DISCLOSURE UNDERTAKING. 13 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 Bonds. 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 Bonds 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 Bonds 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 Bonds. Opinion of Bond Counsel In the opinion of Bond Counsel, under the law existing as of the issue date of the Bonds: Federal Tax Exemption: The interest on the Securities is excludable from gross income for federal income tax purposes. Alternative Minimum Tax. Interest on the Bonds 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). Kansas Tax Exemption. The interest on the Bonds 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 Bonds, subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The 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 Bonds in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Bonds. Other Tax Consequences Original Issue Premium. For federal income tax purposes, premium is the excess of the issue price of a Bond over its stated redemption price at maturity. The stated redemption price at maturity of a Bond is the sum of all payments on the Bond other than “qualified stated interest” (i.e., interest unconditionally payable at least annually at a single fixed rate). The issue price of a Bond is generally the first price at which a substantial amount of the Bonds of that maturity have been sold to the public. Under Code § 171, premium on tax-exempt obligations amortizes over the term of the Bond using constant yield principles, based on the purchaser’s yield to maturity. As premium is amortized, the owner’s basis in the Bond 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 Bond 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. 14 Sale, Exchange or Retirement of Bonds. Upon the sale, exchange or retirement (including redemption) of a Bond, an owner of the Bond 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 Bond (other than in respect of accrued and unpaid interest) and such owner’s adjusted tax basis in the Bond. To the extent the Bonds 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 Bond 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 Bonds, and to the proceeds paid on the sale of Bonds, 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 Bonds should be aware that ownership of the Bonds 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 Bonds. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Bonds 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 Bonds, including the possible application of state, local, foreign and other tax laws. RATING Moody's Investors Service, has assigned a rating of “Aa3” to the Bonds. Any explanation of the significance of such rating may be obtained only from said rating agency. There is no assurance that the rating 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 rating may have an adverse effect on the market price of the 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 Bonds. 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. The Municipal Advisor has also assisted the City with other matters relating to the issuance of the Securities. The fees of the Municipal Advisor are contingent upon the issuance of the Bonds. UNDERWRITING The Bonds were purchased at public sale by UMB, N.A., Kansas City, Missouri (the “Underwriter”) at a price equal to the par amount of the Bonds, plus a premium of $267,544.95, less an underwriting discount of $24,827.37. 15 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 Bonds or the constitutionality or validity of the obligation represented by the Bonds or the means provided for the payment of the 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 Bonds, 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 shall, not later than the first day of the seventh month after the end of the Issuer’s Fiscal Year, commencing with the year ending December 31, 2021. In Bond Resolution, the Issuer covenants with the Underwriter and the Beneficial Owners to apply the provisions of the Disclosure Undertaking to the Bonds. This covenant is for the benefit of and is enforceable by the Beneficial Owners of the Bonds. 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) $ 72,230,000 Population (2019 U.S. Census Bureau Estimate) 46,550 General Obligation Debt Per Capita $ 1,552 Ratio of General Obligation Debt to Estimated Actual Valuation 2.17% Ratio of General Obligation Debt to Estimated Assessed Valuation 14.14% Outstanding Temporary Notes $ 5,230,000 Outstanding State Loans (3) $ 77,555,539 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 (4) $ 178,602,035 Direct and Overlapping General Obligation Debt (5) $ 333,617,574 Direct and Overlapping General Obligation Debt Per Capita $ 7,167 Ratio of Direct and Overlapping Debt to Estimated Actual Valuation 10.03% Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation 65.29% _________________ (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. Does not include bonds to be retired with proceeds from the sale of the Bonds and other available funds. (3) 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”. (4) For a more detailed explanation of the overlapping debt of the other jurisdictions, see DEBT SUMMARY OF THE CITY - “Overlapping Debt”. Includes general obligation bonds issued by Saline County which are anticipated to be repaid by a dedicated sales tax. (5) 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 2020 U.S. Census Bureau estimate of 47,707. 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. Commissioner 2024 Aaron Peck Commissioner 2022 Michael Hoppock Commissioner 2022 Karl 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 $963.522 million as of Spring, 2020. 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 8.87% of the employee’s gross salary for calendar year 2021. The Issuer’s contribution is projected to change to 8.90% of gross compensation for calendar year 2022. In addition, the Issuer contributes 1% of the employee’s gross salary for Death and Disability Insurance for covered employees; provided that starting July 1, 2021, there will be a moratorium on the Death and Disability Insurance rate, and the Issuer will contribute 0% of the employee’s gross salary for Death and Disability Insurance for covered employees after such date. 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, 2021, the Issuer contributes 22.80% of employees’ gross compensation. Beginning January 1, 2022, the Issuer’s contribution is projected to change to 22.99% of gross compensation for calendar year 2022. 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. Great Plains Manufacturing announced an expansion in Salina in late 2020. 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 YaYas Bistro, Old Chicago Pizza and Barillo Grille. 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 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 2021 (May) 24,854 24,001 853 3.4% 2020 25,105 23,673 1,432 5.7 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 2021 (May) 1,509,664 1,456,978 52,686 3.5% 2020 1,497,003 1,408,995 88,008 5.9 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 0 (1) 07-30-14 2014-A Improvements 7,570,000 10-01-34 0 (1) 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 09-08-21 2021-B Refunding 6,220,000 10-01-34 6,220,000 Total $72,230,000 (1) Excludes amounts to be refunded with proceeds from the sale of the Bonds and other funds. See THE FINANCING PLAN herein. 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 2021-1 04-29-21 05-01-22 5,230,000 $5,230,000 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 $ 5,669,144 KDHE 2917 Water 2019 02-01-40 32,000,000 30,080,026 KDHE 2957 Water 2019 02-01-40 4,250,000 3,995,003 KDHE 2998 Water 2019 02-01-40 4,250,000 4,250,000 KDHE 2050 Sewer 2020 03-01-35 2,250,000 2,061,363 KDHE 2049* Sewer 2021 09-01-42 31,500,000 31,500,000 $77,555,539 *Construction on this project is in progress. Principal amount shown is maximum authorized loan amount which is subject to change. 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. (1)As of the closing date of the Bonds. (2)As of the date hereof, Saline County anticipates issuing on August 26, 2021 approximately $74,900,000 of General Obligation Sales Tax Bonds to fund a portion of the costs of a new law enforcement facility. Such bonds, when issued, will be a general obligation of Saline County but are expected to be paid with the revenues produced by a dedicated 0.50% retailers’ sales tax of the county. 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(1) Amount Percentage Salina Airport Authority $ 21,095,000 $ 21,095,000 100.00% Saline County 75,527,787(2) 55,799,745 73.88 Unified School District No. 305 109,280,000 101,707,290 93.07 $178,602,035 Existing Bonds Series 2021-B Bonds Year Principal Interest Principal Interest Total 2021 $4,975,000 $886,082 - - $5,861,082 2022 5,350,000 1,889,984 $600,000 116,866 7,956,850 2023 5,305,000 1,596,014 610,000 97,848 7,608,862 2024 5,110,000 1,389,694 630,000 85,647 7,215,341 2025 4,805,000 1,246,119 645,000 73,047 6,769,166 2026 4,100,000 1,107,099 650,000 60,147 5,917,246 2027 3,875,000 984,641 655,000 47,147 5,561,788 2028 3,580,000 871,706 670,000 34,047 5,155,753 2029 3,570,000 764,999 420,000 20,647 4,775,646 2030 3,260,000 671,749 265,000 16,447 4,213,196 2031 3,170,000 584,871 275,000 13,798 4,043,668 2032 3,090,000 499,814 280,000 10,636 3,880,450 2033 3,060,000 418,363 290,000 7,136 3,775,499 2034 2,970,000 336,481 230,000 3,220 3,539,700 2035 3,035,000 258,613 - - 3,293,613 2036 2,335,000 178,688 - - 2,513,688 2037 1,570,000 117,475 - - 1,687,475 2038 1,060,000 71,650 - - 1,131,650 2039 1,085,000 43,200 - - 1,128,200 2040 350,000 14,100 - - 364,100 2041 355,000 7,100 - - 362,100 $66,010,000 $13,938,440 $6,220,000 $586,633 $86,755,073 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 $12,000,000 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”. 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-13 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. 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-14 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 Gordon Certified Public Accountants, Lawrence, 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, 2020 is attached hereto as APPENDIX C. 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. [REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY] 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: 2017 2018 2019 2020 Property Taxes $10,115,784 $9,743,497 $10,801,226 $11,497,684 Sales Tax 12,906,032 32,900 13,418,742 13,697,179 Other Taxes 5,215,264 5,444,880 5,086,492 4,925,381 Intergovernmental 1,133,310 1,144,717 1,351,967 2,453,021 Charges for Services 6,153,450 6,366,094 5,816,485 4,942,217 Investment Revenue 3,336 45,477 613,249 256,515 Miscellaneous 1,709,491 452,916 609,676 981,845 Total Revenues $37,236,667 $36,490,207 $37,778,837 $38,753,842 Expenditures: General Government $5,423,241 $5,648,579 $4,581,505 $5,505,967 Public Safety 21,628,730 22,952,925 23,692,445 22,435,061 Public Works 5,328,315 5,350,056 5,473,414 5,101,204 Public Health and Sanitation 749,656 793,780 816,636 682,439 Culture and Recreation 4,424,221 4,494,713 4,379,441 3,037,594 Planning and Development 752,825 766,471 836,690 673,564 Capital Outlay 896,026 860,115 985,861 608,460 Total Expenditures $39,203,014 $40,866,639 $40,765,992 $38,044,289 Revenues Over (Under) $(1,966,347) $(4,376,432) $(2,987,155) $709,553 Other Sources (Uses) 3,816,500 4,236,500 5,551,752 4,929,300 Net Change in Fund Balance 1,850,153 $(139,932) 2,564,597 $5,638,853 Fund Balance January 1 $5,032,356 $6,882,509 $6,742,577 $9,503,410 Restatement of Prior Year Balance 0 0 0 0 Fund Balance December 31 $6,882,509 $6,742,577 $9,307,174 $15,142,263 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(2) Utilities Vehicle Valuation 2021(1) $428,454,033 $7,225,265 $23,975,182 $54,589,132 $514,243,612 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 (1) Preliminary figures provided by the Saline County Clerk’s office and used for budgeting purposes. Final valuation figures will be released in November of 2021. (2) 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 $15,386,600 $13,807,323 89.8% $14,070,097 91.6% 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 May 31, 2021. 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* $20,487,981 2020 27,706,623 2019 20,544,765 2018 71,862,718 2017 59,975,197 2016 97,910,328 *Through June 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) $8,203,483 $4,249,604 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 June 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 600596.20219\DISCLOSURE UNDERTAKING Gilmore & Bell, P.C. 07/15/2021 __________________________________________ CONTINUING DISCLOSURE UNDERTAKING DATED AS OF SEPTEMBER 8, 2021 BY CITY OF SALINA, KANSAS ____________________________________ CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B DATED SEPTEMBER 8, 2021 ____________________________________ 600596.20219\DISCLOSURE UNDERTAKING CONTINUING DISCLOSURE UNDERTAKING This CONTINUING DISCLOSURE UNDERTAKING dated as of September 8, 2021 (the “Continuing Disclosure Undertaking”), is executed and delivered by CITY OF SALINA (the “Issuer”). RECITALS 1. This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance by the Issuer of its General Obligation Refunding Bonds, Series 2021-B (the “Bonds”), pursuant to an Ordinance and Resolution adopted by the governing body of the Issuer (collectively the “Bond Resolution”). 2. The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Bonds 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 Bond 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 Comprehensive Annual Financial Report, if any, so long as the Comprehensive Annual Financial Report contains the financial information and operating data described in Section 2(a)(1) and (2). “Beneficial Owner” means any registered owner of any Bonds 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 Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds 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. “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 600596.20219\DISCLOSURE UNDERTAKING 2 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 Bonds required to comply with the Rule in connection with the offering of the Bonds. Section 2. Provision of Annual Reports. (a) The Issuer shall, not later than the first day of the seventh month after the end of the Issuer’s Fiscal Year, commencing with the year ending December 31, 2021, 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, in substantially the format contained in the Official Statement relating to the Bonds. A more detailed explanation of the accounting basis and method of preparation of the financial statements is contained in the Official Statement relating to the Bonds. 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 Bonds, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement related to the Bonds, 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. 600596.20219\DISCLOSURE UNDERTAKING 3 (b) 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 Bonds (“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 Bonds, or other material events affecting the tax status of the Bonds; (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 Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation of a merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an 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. 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 Bonds. 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 Bonds, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3. 600596.20219\DISCLOSURE UNDERTAKING 4 Section 5. Dissemination Agents. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Continuing Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Continuing Disclosure Undertaking. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Undertaking, the Issuer may amend this Continuing Disclosure Undertaking and any provision of this Continuing Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Undertaking. In the event of any amendment or waiver of a provision of this Continuing Disclosure Undertaking, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (1) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) 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 Bonds 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 Bond Resolution or the Bonds, 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 Bonds, and shall create no rights in any other person or entity. 600596.20219\DISCLOSURE UNDERTAKING 5 Section 10. Severability. If any provision in this Continuing Disclosure Undertaking, the Bond Resolution or the Bonds 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. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20219\DISCLOSURE UNDERTAKING (Signature Page to Disclosure Undertaking) 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 Clerk 600596.20219\DISCLOSURE UNDERTAKING A-1 EXHIBIT A FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial information and operating data contained in tables in the following sections contained in Appendix A of the final Official Statement relating to the Bonds: • 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, 2020 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, 2020, including financial statements as audited by the firm of Gordon Certified Public Accountants, Lawrence, Kansas. Prepared by Department of Finance and Administration of the City of Salina, Kansas COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended December 31, 2020 300 West Ash Street P.O. Box 736 Salina, KS 67402-0736 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, 2020 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, 2020 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 Fiduciary Net Position -Fiduciary Funds 30 Statement of Changes in Fiduciary Net Position -Fiduciary Funds 31 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2020 TABLE OF CONTENTS -CONTINUED Page FINANCIAL SECTION -CONTINUED Notes to the Basic Financial Statements 32 -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, 2020 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 Schedule STATISTICAL SECTION Net Position by Component -Last Ten Fiscal Years 1 104 Changes in Net Position -Last Ten Fiscal Years 2 105 Fund Balances, Governmental Fund -Last Ten Fiscal Years 3 106 Changes in Fund Balances, Governmental Funds -Last Ten Fiscal Years 4 107 Tax Revenues by Source, Governmental Funds -Last Ten Fiscal Years 5 108 Assessed and Estimated Actual Value of Taxable Property –Last Ten Fiscal Years 6 109 Direct and Overlapping Property Tax Rates –Last Ten Fiscal Years 7 110 Principal Property Taxpayers 8 111 Property Tax Levies and Distributions 9 112 Direct Sales Rate by Taxing Entity 10 113 Water Sales by Class of Customer 11 114 Ratio of Outstanding Debt by Type 12 115 Ratio of Net General Bonded Debt Outstanding 13 116 Direct and Overlapping Governmental Activities Debt 14 117 Legal Debt Margin 15 118 Pledged Revenue Coverage 16 119 Demographic and Economic Statistics 17 120 Principal Employers 18 121 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2020 TABLE OF CONTENTS -CONTINUED Page GOVERNMENTAL AUDIT SECTION Schedule of Expenditures of Federal Awards 122 Notes to Schedule of Expenditures of Federal Awards 123 Schedule of Findings and Questioned Costs 124 -125 Independent Auditor’s Report on Internal Control over Financial Reporting And on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 126 -127 Independent Auditor’s Report on Compliance for Each Major Federal Program and Internal Control Over Compliance Required by the Uniform Guidance 128 -129 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 July 23, 2021 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, 2020, is hereby submitted. 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 organizational 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 procedures are reviewed by the City Commission 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, 2020 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. i Independent Audit Kansas Statutes Annotated 75-1122 requires an annual audit of the books of account, financial records and transactions of all administrative departments of the City by independent certified public accountants selected by the City Commission.This requirement has been complied with and the auditor's opinion has been included in this report. Profile of the Community The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas, and became a City of the First Class on July 9, 1920.The City has had a Commission-City Manager form of government since 1921.The Commission is comprised of five members elected at large.Each year the commission chooses one member to serve 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 City anticipates results of the 2020 decennial census during 3rd quarter 2021. 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 which is the 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 for the ownership, operation and maintenance of the City-County Building. 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 programming; 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 1.48 in 2020. 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 retail trade beyond the expected activity attributable to just the residents of that community. It is apparent from this that Salina continues to serve as a regional economic hub in 2020.Two Salina area company’s announced major expansions in the second half of 2020. Schwan’s Company announced expansion of its pizza production facility, adding approximately 225 jobs to the Salina area. Kubota announced a new plant for the production of compact track loaders, adding approximately 120 jobs to the Salina area. 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. ii In 2018, the City of Salina issued $22,570,000 in STAR bonds which funded several projects in the City’s downtown corridor. In 2020 Homewood Suites opened for business and the majority of the City’s Downtown Streetscape project was completed. 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. 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 2020. The City offered no merit increases in 2020. 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. Increases in 2020 and 2021 are a result of the anticipated beginning of the construction of the Smoky Hill River Renewal Project, Ninth Street Bridge Construction and Wastewater Treatment Plant respectively. Due to uncertain Sales Tax recovery post Covid-19, the River Renewal project has been delayed. Few major projects have been planned for 2022 and 2023 until financial resources for those years could 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 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.). iii 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 City of Salina CITIZENS CITY COMMISSION Melissa Rose Hodges, Mayor Trent Davis Karl Ryan Mike Hoppock 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 Rita Stevenson Police Brad Nelson Fire Kevin Royse Public Works Jim Teutsch 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 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 City of Salina, Kansas List of Principal Officials City Commission Melissa Rose Hodges, Mayor Dr. Trent Davis, Vice-Mayor Karl Ryan, Commissioner Mike Hoppock, 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 Rita Stevenson, Director of Computer Technology Natalie Fischer, Director of Human Resources Greg Bengtson, City Attorney Brad Nelson, Chief of Police Kevin Royse, Fire Chief Jim Teutsch, Director of Public Works Martha Tasker, Director of Utilities Chris Cotten, Director of Parks & Recreation Brad Anderson, Director of Arts & Humanities Scott Gardner, Director of Continuous Process Improvement vi FINANCIAL 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, 2020, 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, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of 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 3% 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 $46,156,436 as of December 31, 2020 and total revenues of 2,652,346 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 $7,540,021 as of June 30, 2020 and total revenues of $2,957,322 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. 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. 2 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, 2020, 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 As discussed in Note 1 to the financial statements, the City implemented GASB Statement No. 84, Fiduciary Activities that reclassified ten of the City’s funds that had been previously classified as agency funds. As a result of that implementation, certain fund balances as of January 1, 2020, were restated. Our opinion is not modified with respect to this matter. Prior Period Restatement As discussed in Note 3 to the financial statements, certain errors in amounts previously reported as of December 31, 2019, were discovered by management of the City during the current year. Accordingly, these amounts have been restated in the December 31, 2020, financial statements now presented, and adjustments have been made to net position to correct the error. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 15, the other postemployment benefit schedules on page 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 schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards, and is also not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying account and other records used to prepare the basic financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated July 23, 2021, on our consideration of the City’s internal control over financial reporting and our tests of its compliance with certain provisions, of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in compliance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Certified Public Accountant Lawrence, Kansas July 23, 2021 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 Management Discussion and Analysis 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, 2020. 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 $2.6 million from current operations with net position change of $5.7 million and $(3.1)million in governmental activities and business-type activities, respectively. At the close of 2020, the City’s governmental funds reported combined ending fund balances of $31.3 million, an increase of $15.5 million from the prior year. The Capital Projects expenditures decreased $3.6 million from prior year. The General Fund balance, Sales Tax Capital Fund balance and Other Governmental Funds increased $5.8 million, $2.8 million and 2.3 million, respectively, over the prior year. At the close of 2020, the City’s enterprise funds reported a combined ending Net Position of $96.6 million, an increase of $3.0 million over prior year. Positive performance was shared by the Water and Sewer Fund,the Sanitation Fund,Solid Waste Disposal and the Golf Fund. Revenues from governmental activities increased by $6.6 million from the prior year and revenues from business type activities decreased $1.3 million from the prior year. Other miscellaneous revenue increased $6.8 million due to fund transfers and bond proceeds. Revenues from investments continue to be minimal due to low interest rates. The Basic Financial Statements The basic financial statements of the City include the government-wide financial statements and the fund financial statements. The notes to the financial statements follow the basic financial statements and are essential for the reader’s understanding of the financial statements. Other supplementary information, including the combining schedules for non-major funds and the budgetary comparison reports, are at the end of this report to provide additional information for the reader. Government-wide Financial Statements The government-wide financial statements present the results of the City’s operations using the accrual basis of accounting, the same basis as is used by private sector businesses. These statements focus on the long-term financial picture of the City as a whole. The Statement of Net Position reports all of the City’s assets and liabilities. Net position, the difference between assets and deferred outflows of resources and liabilities, are an important measure of the City’s overall financial health. Net position represents the total accumulated and unused resources available to the City for the purpose of providing services. Over time, the increases and decreases in net position can be monitored to determine if the City’s financial position is improving or deteriorating. The Statement of Activities shows how net position has changed during the fiscal year. One unique feature of this statement is how it shows the revenues and expenses related to specific programs and how much of those programs were supported by the general taxes of the City. Since this statement is prepared on the accrual basis of accounting, all revenues and expenses are included, regardless of when cash is actually received. Both statements show the operations of the City broken down between governmental and business-type activities. Governmental activities are the operations of the City generally supported by taxes, such as public safety (police,fire, and EMS), public works, 4 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 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, 2020 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 37% ($34.9 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 decreased slightly in 2020, largely due to the 2020 COVID pandemic as most services were paused temporarily. This was offset by lower expenses. Sales taxes are the next largest component of the revenue mix, providing 25%($23.4 million) of the total revenues. The City receives a 1.25% City-wide sales tax, and also a portion of the County-wide 1.5% 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 2020, this allocation decreased slightly which did not have a significant impact on the tax revenues. In 2008, Salina voters approved an increase of the special purpose .25% tax to a .40% tax. The extended tax is to sunset March 31, 2019. The tax was also modestly re-purposed, for Capital and Economic Development purposes only, as well as retaining a property tax stabilization component.In May 2017, Salina voters approved an increase in the special purpose .40% tax to a .75% tax (thus repealing the 2008 increase). This change became effective October 1, 2017 for twenty years. Property taxes are the third major component of the revenue mix, accounting for 16%($14.9 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 4.1%. The total City mill levy increased by 8.7%. The overlapping levy increased in 2019 by 0.8%. 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 $11.2 million from its peak of $39.7 million in 2007. 6 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 Motor vehicle value increased 2.5%. Motor vehicle taxes are distributed based on a formula using prior year’s tax effort (similar to the Countywide Sales Tax Distribution). The following table summarizes the comparative property assessed values and tax levy rates: Fiscal (Budget) Year 2020 2019 Change Real Estate and Personal Property Assessed Valuation 454,467,319$ 434,451,245$ 20,016,074$ City Mill Levy ($ per $1,000) Operating (General Fund)22.285 20.339 1.946 Debt Service 6.109 5.790 0.319 Total City Rate 28.394 26.129 2.265 Total Overlapping Levy 138.341 133.140 5.201 Percent Total Taxes Collected 97.2%97.4%(0.002) Ratio of Total Taxes (including delinquent collections) to taxes levied 98.6%98.6%- Motor Vehicle Valuation 54,687,311$ 53,336,677$ 1,350,634$ Comparative Property Values and Tax Levy Rates The unemployment rate in Salina increased slightly from 3.1% at the end of 2019 to 3.5% at the end of 2020, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force decreased to 25,446 from 25,643 in 2019. In 2020, the top ten property taxpayers accounted for 10.00%of total assessed value. 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 $234.4 million at December 31, 2020. This represents an increase in net assets of $2.6 million over 2019. A comparative Condensed Statement of Net Position at December 31, 2020 and 2019: 7 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 % of % of 2020-2019 2020 2019 2020 2019 2020 Total 2019 Total change Cash and investments 42,246 31,406$ 38,876$34,957$ 81,122$19%66,363$15%14,759$ Other current assets 16,910 17,201 2,082 2,512 18,992 4%19,713 4%(721) Noncurrent (capital) assets 215,438 222,258 119,118 101,079 334,556 77%323,337 81%11,219 Total assets 274,594 270,865 160,076 138,548 434,670 100%409,413 100%25,257 Total deferred outflows of 8,761 5,073 1,117 546 9,878 100%5,619 100%4,259 resources Total assets and deferred outflows of resources 283,355 275,938 161,192 139,094 444,547 415,033 29,514 Current liabilities 17,230 23,971 3,964 3,579 21,194 11%27,550 11%(6,356) Noncurrent liabilities 106,651 98,696 60,379 41,765 167,030 89%140,461 89%26,569 Total liabilities 123,881 122,667 64,343 45,344 188,224 100%168,011 100%20,213 Total deferred inflows of resources 15,392 14,913 240 198 15,632 15,112 520 Net position: Net investment in capital assets 143,559 151,527 62,368 63,301 205,927 88%214,828 91%(8,901) Restricted for permanent funds 543 528 --543 0% 528 0% 15 Restricted for debt service 1,724 1,142 1,512 1,368 3,236 1%2,510 1% 726 Unrestricted (1,744) (14,839) 26,503 28,883 24,759 11%14,044 8%10,715 Total net position 144,082 138,358 90,383 93,552 234,465 100%231,910 100%2,555 Percent of total net position 61% 60% 39% 40% 100%100% Cash and investments as a percentage of current liabilities 245% 131% 981% 977% 383%241% Governmental Activities Business-Type Activities Total Primary Government Condensed Statement of Net Position As of December 31 (in $000) 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. 8 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 In 2020, the amount of net investment in capital assets decreased by $8.9 million. Amount restricted for debt service increased by $726 thousand. Unrestricted increased by $10.7 million. Outside of these changes, 2020 resulted in a $2.6 million increase to the net position. Total liabilities increased in governmental activities and slightly decreased in business-type activities.In governmental activities,current liabilities increased and non-current liabilities decreased primarily due to an increase in temporary notes and a decrease in general obligation bonds. Statement of Activities A Condensed Statement of Activities is shown below. 2020-2019 2020 2019 2020 2019 2020 %2019 %Change Program Revenues: Charges for Services 8,400 9,730 26,513 27,423 34,913 37%37,153 42%(2,240) Operating Grants and Contributions 4,714 4,540 - -4,714 5%4,540 5%174 General Revenues: Property Taxes 14,887 13,774 - -14,887 16%13,774 16%1,113 Sales Taxes 23,448 22,742 - -23,448 25%22,742 26%706 Other Taxes 6,117 6,975 - -6,117 7%6,975 8%(858) Investment Revenue 286 670 4 - 290 0% 670 1%(380) Other Miscellaneous 8,328 1,168 447 846 8,775 9%2,014 2%6,761 Total Revenues:66,180 59,599 26,964 28,269 93,144 100%87,868 100%5,276 Expenses: General Government 10,395 10,866 - -10,395 14%10,866 14%-471 Public Safety 24,672 25,358 - -24,672 33%25,358 32%-686 Public Works 10,511 10,528 - -10,511 14%10,528 13%-17 Public Health and Sanitation 1,323 1,156 - -1,323 2%1,156 1%167 Culture and Recreation 5,034 6,879 - -5,034 7%6,879 9%-1,845 Planning and Development 2,004 2,523 - -2,004 3%2,523 3%-519 Solid Waste Disposal - -2,056 2,871 2,056 3%2,871 4%-815 Water and Sewer - -13,386 14,294 13,386 18%14,294 18%-908 Sanitation - -2,526 2,266 2,526 3%2,266 3%260 Golf Course - -805 888 805 1% 888 1%-83 Interest on Long Term Debt 2,350 2,169 - -2,350 3%2,169 3%181 Total Expenses 56,289 59,479 18,773 20,319 75,062 100%79,798 100%-4,736 Increase in net assets before transfers 9,891 121 8,191 7,950 18,082 9,414 8,668 Transfers and other extraordinary items 5,133 4,782 (5,133) (4,782)-(58)58 Change in Net Position 15,024 4,902 3,058 3,169 18,082 9,356 8,726 Net Position January 1 138,359 133,452 93,552 90,383 231,911 203,428 28,483 Prior Period Adjustment (9,303) 4 --(9,303)--9,303 Net Position January 1 restated 129,056 133,456 93,552 90,383 222,608 203,428 19,180 Net Position December 31 144,081$138,359$96,610$93,552$240,690$212,784$27,906$ Condensed Statement of Activities For the Year Ended December 31 (in $000) Governmental Activities Business-Type Activities Total Primary Government 9 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 Governmental Activities. Charges for services attributable to governmental activities totaled $8.4 million,as operating grants for those purposes were $4.7 million.Charges for services decreased and operating grants increased slightly from the prior year due to the 2020 COVID pandemic as most services were paused temporarily.The balance was funded by general revenues. Sales taxes accounted for $23.4 million of general revenues, with property taxes providing $14.9 million. The net position increased by $5.7 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, 2020 were $56.3 million compared to $59.5 million in 2020. Governmental activities represent 75%of the City’s total expenses. The largest element of governmental activity expense was public safety, accounting for 33% of the total expenses. Business Type Activities. Business-type activities are primarily supported by user charges. Total expenses for business-type activities for the year were $18.8 million, or 25% of the City’s total expenses. The majority of this expense ($13.4 million)is attributable to water and sewer operations, with the other activities costing a combined total of $5.4 million. Net position increased by $3.1 million.This increase was primarily related to an overall decrease in business-type activity expenses due to the 2020 COVID pandemic. Fund Financial Analysis Governmental Funds Fund Balances: The table below shows the Governmental Fund balances for major funds as of December 31, 2020 and December 31, 2019. Fund 2020 2019 Change General 15,142$ 9,307$ 5,835$ Tourism and Convention 327 451 (124) Special Gas 2,866 2,191 675 Sales Tax Capital 5,209 2,406 2,803 Schilling Capital Improvement 1,494 1,949 (455) Debt Service 1,724 1,142 582 Capital Projects (4,028) (7,652) 3,624 SFH QalicB 1,561 1,310 251 Other Governmental Funds 6,989 4,671 2,318 31,284$ 15,775$ 15,509$ Governmental Fund Balances as of December 31, (in 000's) Total governmental fund balances increased by $15.5 million. The reasons for these changes are varied, including lower expenses during the 2020 COVID pandemic. The Schilling Capital Improvement Fund, which was created to account for U.S. Government and other funds received for the abatement of groundwater contamination, continues to decrease as the City uses funds previously distributed. The Capital Projects Fund decrease was largely the result of the use of funds to fund capital outlays on projects. The SFH QalicB fund was created to account for funds for the Salina Field House. Revenues and Expenditures: The following table shows a comparison of revenues and expenditures (including other sources and uses) for major funds for the years ending December 31, 2020 and 2019. 10 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 Fund 2020 2019 Change Revenues (including Other Financing Sources) General 44,560$ 44,228$ 332$ Tourism and Convention 1,192 1,889 (697) Special Gas 2,209 2,027 182 Sales Tax Capital 8,871 8,501 370 Schilling Capital Improvement 7 21 (14) Debt Service 7,740 6,241 1,499 Capital Projects 8,598 11,871 (3,273) SFH QalicB 494 499 (5) Other Governmental Funds 7,757 4,745 3,012 Total Revenues 81,428 80,022 1,406 Less Other Sources (18,515) (21,247) 2,732 Revenues, net of other sources 62,913$ 58,775$ 4,138$ Expenditures (including Other Financing Uses) General 38,921$ 41,664$ (2,743)$ Tourism and Convention 1,316 1,896 (580) Special Gas 1,534 1,368 166 Sales Tax Capital 6,067 8,060 (1,993) Schilling Capital Improvement 462 208 254 Debt Service 7,155 6,950 205 Capital Projects 4,974 18,830 (13,856) SFH QalicB 244 407 (163) Other Governmental Funds 5,865 3,954 1,911 Total Expenditures 66,538 83,337 (16,799) Less Other Uses (4,271) (5,073) 802 Expenditures, net of other uses 62,267$ 78,264$ (15,997)$ Consolidated Statement of Revenues and Expenditures for Major Governmental Funds For the years ended December 31 Modified Accrual Basis (in 000's) Total revenues, including other sources, were up $4.1 million compared to 2019, with Other Governmental Funds showing the largest increase between the two years, which was $3.0 million. Total expenditures decreased $16.0 million over 2019. The majority of that decrease, $13.9 million was in the Capital Projects Fund as a result of decreased spending on projects due to the 2020 COVID pandemic. Proprietary Funds The City of Salina operates four enterprise funds as well as five internal service funds. A summarized comparative Statement of Net Position follows for each enterprise fund: 11 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 2020 2019 Change 2020 2019 Change Current Assets 8,075$ 7,073$ 1,002$ 30,396$ 28,307$ 2,089$ Capital Assets 3,335 1,497 1,838 114,104 97,956 16,148 Deferred Outflows 137 67 70 706 371 335 Total Assets and deferred outflows 11,547$ 8,637$ 2,910$ 145,206$ 126,634$ 18,572$ Current Liabilities 448$ 103$ 345$ 3,394$ 3,273$ 121$ Noncurrent Liabilities 4,929 2,865 2,064 54,285 38,016 16,269 Deferred Inflows 33 28 5 151 126 25 Total Liabilities 5,410$ 2,996$ 2,414$ 57,830$ 41,415$ 16,415$ Net investment in capital assets 910$ 1,107$ (197)$ 61,154$ 60,568$ 586$ Restricted - - - 1,175 1,368 (193) Unrestricted 5,227 4,534 693 25,046 23,283 1,763 Total Net Position 6,137$ 5,641$ 496$ 87,375$ 85,219$ 2,156$ Current Assets as percentage of current liabilities 1802% 6867%896% 865% 2020 2019 Change 2020 2019 Change Current Assets 2,395$ 2,012$ 383$ 91$ 77$ 14$ Capital Assets 1003 1165 (162)$ 675 462 213$ Deferred Outflows 164 84 80$ 110 25 85$ Total Assets and deferred outflows 3,562$ 3,261$ 301$ 876$ 564$ 312$ Current Liabilities 97$ 137$ (40)$ 25$ 66$ (41)$ Noncurrent Liabilities 833 668 165$ 330 215 115$ Deferred Inflows 41$ 35 6$ 15$ 10$ 5$ Total Liabilities 971$ 840$ 131$ 370$ 291$ 79$ Net investment in capital assets 1,003$ 1,165$ (162)$ 675$ 462$ 213$ Restricted - --- Unrestricted 1588 1256 332$ (169)(187)$18$ Total Net Position 2,591$ 2,421$ 170$ 506$ 275$ 231$ Current Assets as percentage of current liabilities 2469%1469%364% 117% Sanitation Golf Course Comparative Summary Statement of Net Position as of December 31 (in $000's) Solid Waste Disposal Water and Sewer 12 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 Revenues, Expenses, and Changes in Net Position All enterprise funds show healthy results, with all funds reflecting increases in net position. 2020 2019 Change 2020 2019 Change Operating Revenues 3,322$ 3,499$ (177)$ 19,504$ 20,588$ (1,084)$ Operating Expenses 2,011 2,849 (838)12,460 13,013 (553) Operating Income 1,311 650 661 7,044 7,575 (531) Non-operating revenues (expenses)(45)(22) (23)(922)(1281)359 Income (Loss) before Transfers 1,266 627 639 6,122 6294 (172) Transfers in (out)(2,729)(640)(2,089) (2,006)(3,650)1,644 Change in Net Position (1,463)(13)(1,450)4,116 2644 1,472 Net Position January 1 5,640 5,653 (13)85,219 82,580 2,639 Restatement 1,960 -1,960 (1,960)(5)(1,960) Net Position January 1, restated 7,600 5,653 1,947 83,259 82,575 684 Net Position December 31 6,137$ 5,640$ 497$ 87,375$ 85,219$ 2,156$ 2020 2019 Change 2020 2019 Change Operating Revenues 3,194$ 3,276$ (82)$ 939$ 907$ 32$ Operating Expenses 2,526 2,266 260 805 888 (83) Operating Income 668 1,010 (342)134 19 115 Non-operating revenues (expenses)- - - - - 0 Income (Loss) before Transfers 668 1010 (342)134 19 115 Transfers in (out)(497)(492)(5)100 - - Change in Net Position 171 519 (348)234 19 215 Net Position January 1 2,421 1,897 524 272 253 19 Restatement - 5 - - - - Net Position January 1, restated 2,421 1,902 519 272 253 19 Net Position December 31 2,592$ 2,421$ 171$ 506$ 272$ 234$ Sanitation Golf Course Comparative Summary of Revenue, Expenses and Changes in Net Position for the Year Ended December 31 (in 000's) Solid Waste Disposal Water and Sewer 13 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 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, 2020. 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, 2020 was $334,555,753 net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets at December 31, 2020 and 2019: 2020 2019 2020 2019 2020 2019 Equipment, Furniture and Fixtures 2,309$ 2,352$ 1,280$ 1,536$ 3,589$ 3,888$ Vehicles 2,676 2,854 1,079 1,288 3,755 4,142 Buildings and Improvements 29,218 30,556 8,103 8,519 37,321 39,075 Land 24,224 24,224 2,386 2,386 26,610 26,610 Leased land under capital leases 423 423 - -423 Infrastructure 130,010 116,264 78,294 79,823 208,304 196,087 Leasehold Improvements 357 357 - -357 Construction in Progress 26,221 35,302 27,976 7,527 54,197 42,829 Total 215,438$ 212,332$ 119,118$ 101,079$ 334,556$ 312,631$ Governmental Activity Business-Type Activity Total Capital Assets Balances Net of Depreciation as of December 31 (in $000's) Changes to capital assets may be summarized as follows: Governmental Business-Type Activity Activity Total Additions 27,118 23,416 50,534 Retirements (18,281)(1,558)(19,839) Depreciation (5,731)(3,819) (9,550) Net Additions 3,106$18,039$ 21,145$ Changes to Capital Assets, 2020 (in $000's) 14 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2020 Additional information on the City’s capital assets can be found in Note 4,D. of the notes to the basic financial statements. 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, 2020 totaled $68,438,971. In addition, there were temporary notes outstanding in the amount of $7,050,000, as well as a financing operating lease in the amount of $583,725. Business-type activities had $10,341,160 in revenue bonds outstanding, as well as $9,107,990 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 $6,044,214. The City engaged in the following debt transactions during 2020: On April 29th, the City issued 2020-1, $7,050,000 of temporary notes. The proceeds were used to finance construction to Pheasant Ridge Addition 3, Police Training Facility, and Stone Lake 2. On April 29th, the City issued 2020A, $5,450,610 in General Obligation Bonds to finance construction costs for Landfill Cell, the Police Parking Lot, Golf Irrigation and 9th Street Bridge Design, as well as to finance the Smoky Hill River Design. On November 19th, the City issued 2020B, $9,043,333 in General Obligation Bonds to finance construction costs for the Radio Project, Quint, SCBA, as well as to finance the 2012A Refunding -Magnolia. Additional information on the City’s debt can be found in Note 4, E. of the notes to the basic financial statements. Requests for Information This financial report is intended to give the reader a general overview of the City’s finances. Questions about information in this report or requests for additional information should be directed to the Director of Finance, Room 206, 300 West Ash Street, Salina, Kansas, 67401. 15 BASIC FINANCIAL STATEMENTS Total Total Total Salina Salina Governmental Business-type Primary Housing Airport Activities Activities Government Authority Authority ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets: Cash and investments 42,246,017$ 38,875,629$ 81,121,646$ 2,047,865$ 2,255,880$ Receivables (net of allowance for uncollectibles) Accounts 1,916,733 1,664,390 3,581,123 25,280 390,970 Taxes 14,362,079 -14,362,079 -- Interest 10,392 16 10,408 -- Inventory 284,987 417,947 702,934 31,898 - Restricted cash and investments 335,497 -335,497 -- Prepaid expenses ---110,640 15,700 Total current assets 59,155,705 40,957,982 100,113,687 2,215,683 2,662,550 Noncurrent assets: Capital assets, nondepreciable Construction in progress 26,221,157 27,975,938 54,197,095 136,666 205,592 Land 24,646,334 2,386,334 27,032,668 1,557,554 9,874,567 Capital assets, depreciable 297,446,919 163,770,396 461,217,315 8,934,888 82,625,316 Less: Accumulated depreciation 132,876,276 75,015,049 207,891,325 5,362,214 50,444,301 Total noncurrent assets 215,438,134 119,117,619 334,555,753 5,266,894 42,261,174 Total assets 274,593,839 160,075,601 434,669,440 7,482,577 44,923,724 Deferred outflows of resources: KPERS OPEB deferred outflows of resources 135,741 55,982 191,723 -4,727 OPEB deferred outflows of resources 148,419 24,797 173,216 -- Pension deferred outflows of resources 8,471,181 1,035,819 9,507,000 57,444 214,164 Deferred charge on bond issuance 5,990 -5,990 -1,013,821 Total deferred outflows of resources 8,761,331 1,116,598 9,877,929 57,444 1,232,712 Total assets and deferred outflows of resources 283,355,170$ 161,192,199$ 444,547,369$ 7,540,021$ 46,156,436$ Liabilities: Current liabilities: Accounts payable 1,718,179$ 562,153$ 2,280,332$ 45,583$ 125,641$ Retainage payable 1,687,819 211,528 1,899,347 -- Accrued liabilities 788,446 -788,446 52,903 146,669 Accrued interest payable 61,875 447,048 508,923 -211,244 Deposits payable -285,259 285,259 93,237 - Current portion of compensated absences 1,224,971 273,001 1,497,972 3,068 51,799 Current portion of temporary notes payable 7,050,000 -7,050,000 -- Current portion of loans payable -375,071 375,071 -39,942 Current portion of revenue bonds payable -750,000 750,000 -- Current portion of special assessment debt payable ----2,455 Current portion of general obligation bonds payable 4,699,145 1,060,100 5,759,245 -3,730,000 Total current liabilities 17,230,435 3,964,160 21,194,595 194,791 4,307,750 Noncurrent liabilities: Accrued liabilities 263,049 -263,049 65,926 - Compensated absences 1,472,035 321,310 1,793,345 27,617 - Security deposits returnable ----83,989 OPEB obligation 3,097,540 517,514 3,615,054 -13,924 KPERS OPEB obligation 402,677 194,767 597,444 7,657 - Net pension liability 34,571,390 3,854,606 38,425,996 319,900 715,670 Loans payable 12,212,979 35,550,958 47,763,937 -420,058 Revenue bonds payable -8,865,000 8,865,000 -- Special assessment debt payable ----- General obligation bonds payable 54,631,836 8,774,050 63,405,886 -19,351,436 Landfill post-closure care liabilities -2,300,353 2,300,353 -- Total noncurrent liabilities 106,651,506 60,378,558 167,030,064 421,100 20,585,077 Total liabilities 123,881,941 64,342,718 188,224,659 615,891 24,892,827 Deferred inflows of resources: Unavailable revenue - property taxes 13,876,740 -13,876,740 53,442 - KPERS OPEB deferred inflows of resources 57,734 27,926 85,660 -- OPEB deferred inflows of resources 273,521 45,698 319,219 -7,961 Pension deferred inflows of resources 1,183,831 165,880 1,349,711 25,447 58,465 Total deferred inflows of resources 15,391,826 239,504 15,631,330 78,889 66,426 Total liabilities and deferred inflows of resources 139,273,767$ 64,582,222$ 203,855,989$ 694,780$ 24,959,253$ Net Position Net investment in capital assets 143,558,677$ 63,742,440$ 207,301,117$ 5,266,894$ 18,717,283$ Restricted for: Permanent funds: Expendable 542,755 -542,755 100,183 - Debt service 1,724,117 1,175,378 2,899,495 -- Unrestricted [1,744,146] 31,692,159 29,948,013 1,478,164 2,479,900 Total net position 144,081,403$ 96,609,977$ 240,691,380$ 6,845,241$ 21,197,183$ Primary Government CITY OF SALINA, KANSAS STATEMENT OF NET POSITION December 31, 2020 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 10,394,607$ 3,338,860$ 1,201,206$ -$[5,854,541]$ -$[5,854,541]$ -$-$ Public safety 24,671,916 4,325,391 1,477,850 -[18,868,675]-[18,868,675]-- Public works 10,510,841 294,108 1,334,047 -[8,882,686]-[8,882,686]-- Public health and sanitation 1,322,698 49,388 221,982 -[1,051,328]-[1,051,328]-- Culture and recreation 5,033,513 279,296 294,037 -[4,460,180]-[4,460,180]-- Planning and development 2,004,435 113,262 185,227 -[1,705,946]-[1,705,946]-- Interest on long-term debt 2,349,539 ---[2,349,539] -[2,349,539]-- Total governmental activities 56,287,549 8,400,305 4,714,349 -[43,172,895]-[43,172,895]-- Business-type activities: Solid Waste Disposal 2,055,825 3,289,539 ---1,233,714 1,233,714 -- Water and Sewer 13,386,267 19,448,780 ---6,062,513 6,062,513 -- Sanitation 2,526,129 3,193,904 ---667,775 667,775 -- Golf Course 804,973 581,232 ---[223,741] [223,741] -- Total business-type activities 18,773,194 26,513,455 ---7,740,261 7,740,261 -- Total primary government 75,060,743$ 34,913,760$4,714,349$ -$[43,172,895]7,740,261 [35,432,634] -- Component units: Salina Housing Authority 2,889,339$ 393,634$ 2,319,183$ 113,963$ ---[62,559] - Salina Airport Authority 8,700,408 2,652,346 - 2,100,818 ----[3,947,244] Total component units 11,589,747$ 3,045,980$ 2,319,183$ 2,214,781$ ---[62,559] [3,947,244] General Revenues: Property taxes levied for General purposes 10,308,086 -10,308,086 -2,639,481 Debt service 3,058,231 -3,058,231 -- Motor vehicle tax General purposes 1,520,297 -1,520,297 -- Sales tax General purposes 13,697,179 -13,697,179 -- Selective purposes 9,751,294 -9,751,294 -- Other taxes General purposes 6,117,168 -6,117,168 -- Investment revenues 285,623 4,144 289,767 22,125 2,161 Miscellaneous 8,328,452 446,477 8,774,929 108,417 - Transfers, net 5,132,726 [5,132,726] --- Subtotal general revenues 58,199,056 [4,682,105] 53,516,951 130,542 2,641,642 Change in net position 15,026,161 3,058,156 18,084,317 67,983 [1,305,602] Net position - beginning 138,358,514 93,551,821 231,910,335 6,777,258 22,502,785 Prior period adjustment [9,303,272] -[9,303,272]-- Net position - beginning, restated 129,055,242 93,551,821 222,607,063 6,777,258 22,502,785 Net position - ending 144,081,403$96,609,977$ 240,691,380$6,845,241$21,197,183$ Changes in Net Position Component UnitsPrimary GovernmentProgram Revenues CITY OF SALINA, KANSAS STATEMENT OF ACTIVITIES For the Year Ended December 31, 2020 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 13,353,397$ 854$ 2,580,212$ 6,534,049$ Restricted cash ---- Receivables (net) Accounts 1,587,438 326,008 -- Taxes 10,934,927 -305,807 - Interest 10,392 --- Inventory 183,768 --- Due from other funds 31,989 --- Total assets 26,101,911$ 326,862$ 2,886,019$ 6,534,049$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable 145,736$ -$20,116$ 24,791$ Retainage payable ---1,299,766 Temporary notes payable ---- Due to other funds ---- Total liabilities 145,736 -20,116 1,324,557 Deferred inflows of resources Unavailable revenue - property taxes 10,737,173 --- Unavailable revenue - other 76,739 --- Total deferred inflows of resources 10,813,912 --- Fund balance: Nonspendable 183,768 --- Restricted -326,862 2,233,811 - Committed ---4,065,778 Assigned 244,434 -632,092 1,143,714 Unassigned 14,714,061 --- Total fund balances 15,142,263 326,862 2,865,903 5,209,492 Total liabilities, deferred inflows of resources and fund balances 26,101,911$ 326,862$ 2,886,019$ 6,534,049$ CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2020 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds 1,493,977$ 1,665,599$ 4,656,684$ 3,918$ 7,239,668$ 37,528,358$ ---335,497 -335,497 ---1,235,034 3,287 3,151,767 -3,121,345 ---14,362,079 -----10,392 -----183,768 -----31,989 1,493,977$ 4,786,944$ 4,656,684$ 1,574,449$ 7,242,955$ 55,603,850$ -$-$1,260,261$ -$221,525$ 1,672,429$ --374,230 13,823 -1,687,819 --7,050,000 --7,050,000 ----31,989 31,989 --8,684,491 13,823 253,514 10,442,237 -3,062,827 ---13,800,000 -----76,739 -3,062,827 ---13,876,739 -----183,768 -1,724,117 --695,513 4,980,303 1,493,977 --1,560,626 6,104,669 13,225,050 ----189,259 2,209,499 --[4,027,807] --10,686,254 1,493,977 1,724,117 [4,027,807] 1,560,626 6,989,441 31,284,874 1,493,977$ 4,786,944$ 4,656,684$ 1,574,449$ 7,242,955$ 55,603,850$ 18 The notes to the basic financial statements are an integral part of this statement. Total Governmental Fund Balances 31,284,874$ 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 5,990 Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds The cost of capital assets is 348,146,176 Accumulated depreciation is 132,722,313 215,423,863 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.8,705,364 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.[1,505,440] Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit.[1,235,034] 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.3,549,304 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 2,666,706 Net OPEB obligation 3,491,494 Net pension liability 34,383,483 Bonds payable 59,330,981 Loans payable 12,212,979 Accrued interest on the bonds 61,875 [112,147,518] Net Position of Governmental Activities 144,081,403$ CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION OF GOVERNMENTAL ACTIVITIES December 31, 2020 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 10,139,044$ -$-$-$ Delinquent taxes 169,042 --- Motor vehicle taxes 1,189,598 --- General sales taxes 13,697,179 --- Selective sales taxes ---8,624,465 Other taxes 4,925,381 1,191,787 -- Intergovernmental 2,453,021 -1,328,977 - Special assessments ---- Licenses and permits ---- Charges for services 4,942,217 --- Investment revenue 256,515 --- Donations ---- Miscellaneous 981,845 -720,243 246,159 Total revenues 38,753,842 1,191,787 2,049,220 8,870,624 EXPENDITURES: Current General government 5,505,967 --- Public safety 22,435,061 --- Public works 5,101,204 -355,565 - Public health and sanitation 682,439 --- Culture and recreation 3,037,594 --- Planning and development 673,564 726,743 -- Miscellaneous ---- Capital outlay 608,460 -1,178,730 3,262,657 Debt service Principal retirement ---- Interest and other charges ---- Total expenditures 38,044,289 726,743 1,534,295 3,262,657 Excess [deficiency] of revenue and other sources over [under] expenditures and other [uses]709,553 465,044 514,925 5,607,967 OTHER FINANCING SOURCES [USES] Issuance of bonds ---- Bond premium ---- Transfers in 5,806,300 -160,000 - Transfers [out][877,000] [589,252] -[2,804,350] Total other financing sources [uses]4,929,300 [589,252] 160,000 [2,804,350] Net change in fund balance 5,638,853 [124,208] 674,925 2,803,617 Fund balance - Beginning of year 9,307,174 451,070 2,190,978 2,405,875 Prior period adjustment 196,236 --- Fund balance - Beginning of year, restated 9,503,410 451,070 2,190,978 2,405,875 Fund balance - End of year 15,142,263$ 326,862$ 2,865,903$ 5,209,492$ CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31, 2020 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds -$3,010,914$ -$-$-$13,149,958$ -47,317 ---216,359 -330,699 ---1,520,297 -----13,697,179 ----1,126,829 9,751,294 -----6,117,168 ----1,535,238 5,317,236 -1,511,279 ---1,511,279 ----5,070 5,070 ---492,917 121,417 5,556,551 7,005 --967 21,136 285,623 ----129,193 129,193 --130,108 -3,577,577 5,655,932 7,005 4,900,209 130,108 493,884 6,516,460 62,913,139 -----5,505,967 -----22,435,061 ----625,362 6,082,131 ----597,804 1,280,243 ----1,207,431 4,245,025 ---16,652 376,545 1,793,504 -53,301 --1,300,661 1,353,962 462,374 -4,760,797 26,983 1,741,294 12,041,295 -5,163,995 ---5,163,995 -1,937,284 213,299 200,044 15,496 2,366,123 462,374 7,154,580 4,974,096 243,679 5,864,593 62,267,306 [455,369] [2,254,371] [4,843,988] 250,205 651,867 645,833 -1,206,882 7,513,405 --8,720,287 --468,404 --468,404 -1,629,188 486,426 -1,241,413 9,323,327 -----[4,270,602] -2,836,070 8,468,235 -1,241,413 14,241,416 [455,369] 581,699 3,624,247 250,205 1,893,280 14,887,249 1,949,346 1,142,418 [7,652,054] 1,310,421 4,670,517 15,775,745 ----425,644 621,880 1,949,346 1,142,418 [7,652,054] 1,310,421 5,096,161 16,397,625 1,493,977$ 1,724,117$ [4,027,807]$ 1,560,626$ 6,989,441$ 31,284,874$ The notes to the basic financial statements are an integral part of this statement. 20 Total Net Change In Fund Balances - Governmental Funds 14,887,249$ 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 [34,933] Capital outlays 9,188,324 Depreciation expense [5,881,296] 3,272,095 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.16,584 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 funds are reported with governmental activities.983,576 Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit.[712,617] 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.168,922 Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities.[1,817,189] 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.[8,982,222] 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.7,209,763 Changes In Net Position of Governmental Activities 15,026,161$ 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, 2020 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Real estate taxes 10,139,044$ 10,269,618$ 10,269,618$ [130,574]$ Delinquent taxes 169,042 160,000 160,000 9,042 Motor vehicle taxes 1,183,360 1,148,859 1,148,859 34,501 General sales tax 13,697,179 13,119,090 13,119,090 578,089 Other taxes 4,925,381 7,200,990 7,200,990 [2,275,609] Intergovernmental 2,453,021 1,155,255 1,155,255 1,297,766 Charges for services 3,710,836 5,931,339 5,931,339 [2,220,503] Investment revenue 254,767 140,000 140,000 114,767 Miscellaneous 981,842 513,496 513,496 468,346 Total revenues 37,514,472 39,638,647 39,638,647 [2,124,175] Expenditures General government 4,336,448 5,627,624 5,627,624 1,291,176 Public safety 22,434,733 22,669,448 22,669,448 234,715 Public works 5,044,769 4,552,934 4,552,934 [491,835] Public health and sanitation 682,439 - - [682,439] Culture and recreation 3,050,289 7,911,847 7,911,847 4,861,558 Planning and development 553,972 3,099,280 3,099,280 2,545,308 Capital outlay 608,460 4,746,430 4,746,430 4,137,970 Total expenditures 36,711,110 48,607,563 48,607,563 11,896,453 Excess [deficiency] of revenues over [under] expenditures 803,362 [8,968,916] [8,968,916] 9,772,278 Other financing sources [uses] Transfers in 5,806,300 4,366,550 4,366,550 1,439,750 Transfers [out][877,000] [905,500] [905,500] 28,500 Total other financing sources [uses]4,929,300 3,461,050 3,461,050 1,468,250 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]5,732,662 [5,507,866] [5,507,866] 11,240,528 Unreserved fund balance, January 1, restated 7,185,815 5,507,866 5,507,866 1,677,949 Unreserved fund balance, December 31 12,918,477 -$ -$ 12,918,477$ Reconciliation to GAAP Interest receivable 10,392 Accounts receivable 1,587,438 Taxes receivable 10,934,927 Inventory 183,768 Deferred revenue [10,737,173] Current year encumbrances 244,434 GAAP Fund Balance, December 31 15,142,263$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Other taxes 1,315,996$ 1,900,000$ 1,900,000$ [584,004]$ Total revenues 1,315,996 1,900,000 1,900,000 [584,004] Expenditures Planning and development 726,743 1,045,000 1,045,000 318,257 Total expenditures 726,743 1,045,000 1,045,000 318,257 Excess [deficiency] of revenues over [under] expenditures 589,253 855,000 855,000 [265,747] Other financing sources [uses] Transfers [out][589,252] [855,000] [855,000] 265,748 Total other financing sources [uses][589,252] [855,000] [855,000] 265,748 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]1 - - 1 Unreserved fund balance, January 1 853 853 853 - Unreserved fund balance, December 31 854 853$ 853$ 1$ Reconciliation to GAAP Accounts receivable 326,008 GAAP Fund Balance, December 31 326,862$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 1,351,092$ 1,330,760$ 1,330,760$ 20,332$ Miscellaneous 720,243 --720,243 Investment revenue -3,000 3,000 [3,000] Total revenues 2,071,335 1,333,760 1,333,760 737,575 Expenditures Public works 355,565 486,950 486,950 131,385 Capital outlay 1,740,235 1,181,243 1,181,243 [558,992] Total expenditures 2,095,800 1,668,193 1,668,193 [427,607] Excess [deficiency] of revenues over [under] expenditures [24,465][334,433][334,433]309,968 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] expenditures and other [uses]135,535 [174,433] [174,433]309,968 Unreserved fund balance, January 1 1,792,469 1,867,816 1,867,816 [75,347] Unreserved fund balance, December 31 1,928,004 1,693,383$ 1,693,383$ 234,621$ Reconciliation to GAAP Taxes receivable 305,807 Current year encumbrances 632,092 GAAP Fund Balance, December 31 2,865,903$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Selective sales taxes 8,624,465$ 8,332,539$ 8,332,539$ 291,926$ Miscellaneous 246,159 --246,159 Total revenues 8,870,624 8,332,539 8,332,539 538,085 Expenditures Capital outlay 3,666,919 5,050,000 5,050,000 1,383,081 Total expenditures 3,666,919 5,050,000 5,050,000 1,383,081 Excess [deficiency] of revenues over [under] expenditures 5,203,705 3,282,539 3,282,539 1,921,166 Other financing sources [uses] Transfers [out][2,804,350][3,169,350][3,169,350]365,000 Total other financing sources [uses][2,804,350][3,169,350][3,169,350]365,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]2,399,355 113,189 113,189 2,286,166 Unreserved fund balance, January 1 1,666,423 1,882,941 1,882,941 [216,518] Unreserved fund balance, December 31 4,065,778 1,996,130$ 1,996,130$ 2,069,648$ Reconciliation to GAAP Current year encumbrances 1,143,714 GAAP Fund Balance, December 31 5,209,492$ 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 7,876,671$ 28,759,645$ 2,175,043$64,270$ 38,875,629$ 4,717,659$ Receivables (net of allowance for uncollectibles) Accounts 198,287 1,246,160 219,943 - 1,664,390 - Interest 16 - - - 16 - Inventory and prepaid supplies - 390,729 - 27,218 417,947 101,219 Total current assets 8,074,974 30,396,534 2,394,986 91,488 40,957,982 4,818,878 Capital assets: Nondepreciable capital assets: Construction in progress 1,991,469 25,727,684 - 256,785 27,975,938 - Land 682,000 1,689,334 - 15,000 2,386,334 - Depreciable capital assets: Capital assets 11,313,026 148,639,879 2,564,420 1,253,071 163,770,396 168,234 Less: accumulated depreciation 10,651,410 61,953,107 1,560,935 849,597 75,015,049 153,963 Total capital assets 3,335,085 114,103,790 1,003,485 675,259 119,117,619 14,271 Total assets 11,410,059 144,500,324 3,398,471 766,747 160,075,601 4,833,149 Deferred outflows of resources: KPERS OPEB deferred outflows of resources 6,749 33,434 7,745 8,054 55,982 2,507 OPEB deferred outflows of resources 2,758 16,409 4,635 995 24,797 - Pension deferred outflows of resources 127,859 655,717 151,656 100,587 1,035,819 47,470 Total deferred outflows of resources 137,366 705,560 164,036 109,636 1,116,598 49,977 Total assets and deferred outflows of resources 11,547,425$145,205,884$ 3,562,507$876,383$ 161,192,199$ 4,883,126$ Liabilities and deferred inflows of resources: Current liabilities Accounts payable 19,524$ 509,657$ 25,449$ 7,523$ 562,153$ 45,750$ Retainage payable - 211,528 - - 211,528 - Interest payable 38,747 408,301 - - 447,048 - Meter deposits payable - 285,259 - - 285,259 - Current portion of compensated absences payable 19,825 164,516 71,543 17,117 273,001 13,919 Current portion of accrued claims payable - - - - - 788,446 Current portion of loans payable - 375,071 - - 375,071 - Current portion of general obligation bonds payable 370,000 690,100 - - 1,060,100 - Current portion of revenue bonds payable - 750,000 - - 750,000 - Total current liabilities 448,096 3,394,432 96,992 24,640 3,964,160 848,115 Noncurrent liabilities: Compensated absences payable 23,333 193,628 84,202 20,147 321,310 16,382 Accrued claims payable - - - - - 263,049 OPEB obligation 57,567 342,458 96,728 20,761 517,514 - KPERS OPEB obligation 23,480 116,322 26,945 28,020 194,767 8,723 Net pension liability 469,022 2,498,445 625,434 261,705 3,854,606 187,907 Payable from restricted assets Loans payable - 35,550,958 - - 35,550,958 - General obligation bonds payable 2,055,388 6,718,662 - - 8,774,050 - Revenue bonds payable - 8,865,000 - - 8,865,000 - Landfill post-closure care liabilities 2,300,353 - - - 2,300,353 - Total noncurrent liabilities 4,929,143 54,285,473 833,309 330,633 60,378,558 476,061 Total liabilities 5,377,239 57,679,905 930,301 355,273 64,342,718 1,324,176 Deferred inflows of resources KPERS OPEB deferred inflows of resources 3,366 16,678 3,864 4,018 27,926 1,251 OPEB deferred inflows of resources 5,084 30,240 8,541 1,833 45,698 - Pension deferred inflows of resources 24,429 103,622 28,575 9,254 165,880 8,395 Total deferred inflows of resources 32,879 150,540 40,980 15,105 239,504 9,646 Total liabilities and deferred inflows of resources 5,410,118$ 57,830,445$ 971,281$ 370,378$ 64,582,222$ 1,333,822$ Net position Net investment in capital assets 909,697$ 61,153,999$ 1,003,485$675,259$ 63,742,440$ 14,271$ Restricted Restricted for bond retirement - 1,175,378 - - 1,175,378 - Unrestricted 5,227,610 25,046,062 1,587,741 [169,254] 31,692,159 3,535,033 Total net position 6,137,307$ 87,375,439$ 2,591,226$506,005$ 96,609,977$ 3,549,304$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2020 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 3,289,539$ 19,448,780$3,193,904$581,232$ 26,513,455$ 8,253,233$ Miscellaneous 32,720 55,774 49 357,934 446,477 42,179 Total operating revenues 3,322,259 19,504,554 3,193,953 939,166 26,959,932 8,295,412 Operating expenses General government -----7,391,474 Public works 1,858,197 8,916,947 2,364,751 -13,139,895 - Recreation ---761,739 761,739 - Depreciation 152,926 3,543,387 161,378 43,234 3,900,925 362 Total operating expenses 2,011,123 12,460,334 2,526,129 804,973 17,802,559 7,391,836 Operating income [loss]1,311,136 7,044,220 667,824 134,193 9,157,373 903,576 Nonoperating revenues [expenses] Investment revenue -4,144 --4,144 - Interest expense [44,702] [1,005,565] --[1,050,267] - Accretion of bond premium -89,557 --89,557 - Amortization of bond issuance costs -[9,925]--[9,925] - Total nonoperating revenues [expenses][44,702] [921,789]--[966,491] - Income [loss] before transfers 1,266,434 6,122,431 667,824 134,193 8,190,882 903,576 Transfers from [to] other funds Transfers in ---100,000 100,000 80,000 Transfers [out][2,729,588] [2,005,788] [497,350] -[5,232,726]- Total transfers [2,729,588] [2,005,788] [497,350] 100,000 [5,132,726] 80,000 Change in net position [1,463,154] 4,116,643 170,474 234,193 3,058,156 983,576 Net position, January 1 5,640,478 85,218,779 2,420,752 271,812 93,551,821 2,565,728 Prior period adjustment 1,959,983 [1,959,983] ---- Net position, January 1, restated 7,600,461 83,258,796 2,420,752 271,812 93,551,821 2,565,728 Net position, December 31 6,137,307$ 87,375,439$2,591,226$506,005$ 96,609,977$ 3,549,304$ 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, 2020 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 3,289,574$19,836,614$3,231,339$581,232$ 26,938,759$8,503,738$ Cash paid to suppliers of goods or services [894,526] [4,593,856] [1,412,277][288,026] [7,188,685] [7,085,946] Cash paid to employees [688,626] [3,908,975] [901,478] [468,228] [5,967,307] [274,765] Other operating receipts 32,720 55,774 49 357,934 446,477 42,179 Net cash provided by [used in] operating activities 1,739,142 11,389,557 917,633 182,912 14,229,244 1,185,206 Cash flows from capital and related financing activities Purchase and construction of capital assets [31,486] [21,561,398]-[256,785][21,849,669]- Proceeds from bonds 2,070,388 4,370,151 -- 6,440,539 - Proceeds from loans -18,475,072 --18,475,072 - Principal payments - loans -[5,088,730]--[5,088,730]- Principal payments - general obligation bonds [35,000] [1,414,063] --[1,449,063]- Principal payments - revenue bonds -[781,015]--[781,015] - Interest paid [11,217] [917,878]--[929,095] - Net cash provided by [used in] capital and related financing activities 1,992,685 [6,917,861] -[256,785][5,181,961] - Cash flows from investing activities Interest received -4,144 --4,144 - Cash flows from noncapital financing activities Transfers in ---100,000 100,000 80,000 Transfers [out][2,729,588][2,005,788] [497,350] -[5,232,726]- Net cash provided by [used in] noncapital financing activities [2,729,588][2,005,788] [497,350] 100,000 [5,132,726]80,000 Net increase [decrease] in cash and cash equivalents 1,002,239 2,470,052 420,283 26,127 3,918,701 1,265,206 Cash and cash equivalents, January 1 6,874,432 26,289,593 1,754,760 38,143 34,956,928 3,452,453 Cash and cash equivalents, December 31 7,876,671$28,759,645$2,175,043$64,270$ 38,875,629$4,717,659$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS For the Year Ended December 31, 2020 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]1,311,136$ 7,044,220$ 667,824$ 134,193$ 9,157,373$ 903,576$ Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense 152,926 3,543,387 161,378 43,234 3,900,925 362 [Increase] decrease in accounts receivable 35 332,022 37,435 -369,492 - [Increase] decrease in inventory -48,494 -11,203 59,697 26,673 [Increase] decrease in deferred outflows [70,780] [344,505][80,102] [85,115][580,502][24,376] Increase [decrease] in accounts payable [6,918] 121,544 [3,711] 3,044 113,959 [660] Increase [decrease] in retainage payable -58,119 --58,119 - Increase [decrease] in accrued compensated absences [6,276] [17,252]7,760 [46,560] [62,328][1,145] Increase [decrease] in claims payable -----250,505 Increase [decrease] in net pension liability 85,168 421,937 97,737 101,638 706,480 31,639 Increase [decrease] in net KPERS OPEB obligation 8,288 9,979 1,625 17,892 37,784 [1,405] Increase [decrease] in net OPEB obligation 8,891 91,333 21,418 [1,808] 119,834 - Increase [decrease] in meter deposits payable -55,812 --55,812 - Increase [decrease] in deferred inflows 5,215 24,467 6,269 5,191 41,142 37 Net cash provided by [used in] operating activities 1,739,142$ 11,389,557$917,633$ 182,912$ 14,229,244$1,185,206$ Business-Type Activities: Enterprise Funds CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31, 2020 The notes to the basic financial statements are an integral part of this statement. 29 Custodial Fund ASSETS Cash and investments 751$ Total assets 751 LIABILITIES AND NET POSITION Liabilities Accounts payable - Total liabilities - NET POSITION Restricted for individuals, organizations and other governments 751$ December 31, 2020 CITY OF SALINA, KANSAS STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS The notes to the basic financial statements are an integral part of this statement. 30 Custodial Fund ADDITIONS Miscellaneous 7,314$ Total additions 7,314 DEDUCTIONS Contractual services 5,551 Total deductions 5,551 Change in net position 1,763 Net position, January 1 [1,012] Net position, December 31 751$ CITY OF SALINA, KANSAS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS December 31, 2020 The notes to the basic financial statements are an integral part of this statement. 31 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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, 2020. 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. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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, 2020 1,928,199$ Total change in unencumbered cash, year ended December 31, 2020 331,741 Total cash receipts, year ended December 31, 2020 1,636,400 Total cash receipts from City of Salina 502,042 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. 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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. The fiduciary funds are used by the City to accounts for resources held by the City for the benefit of a third part. Because the resources of these funds are not available for the City’s operations, they are not presented in the government-wide financial statements. The City’s lone fiduciary fund is reported as a custodial fund. 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. 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. 35 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C.Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) 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. Additionally, the City reports the following as a fiduciary fund: Fire insurance proceeds 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. 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 2021. 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. 36 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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. 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 183,768$ -$ -$ -$ -$ -$ -$ -$ -$ 183,768$ Restricted for: Public works - - 2,233,811 - - - - - - 2,233,811 Public health and sanitation - - - - - - - - 234 234 Culture and recreation - - - - - - - - 465,773 465,773 Planning and development - 326,862 - - - - - - 228,706 555,568 Debt payments - - - - - 1,724,117 - - 800 1,724,917 Committed for: Public safety - - - - - - - - 214,419 214,419 Culture and recreation - - - - - - - - 734,724 734,724 Planning and development - - - - - - - 1,560,626 364,668 1,925,294 Cemetery - - - - - - - - 536,838 536,838 Capital improvements - - - 4,065,778 1,493,977 - - - 4,254,020 9,813,775 Assigned for: General government 20,863 - - - - - - - - 20,863 Public safety 37,672 - - - - - - - 176,649 214,321 Public works - - - - - - - - - - Culture and recreation 12,695 - - - - - - - 12,610 25,305 Capital improvements 173,204 - 632,092 1,143,714 - - - - - 1,949,010 Unassigned:14,714,061 - - - - - [4,027,807] - - 10,686,254 Total Fund Balances 15,142,263$326,862$ 2,865,903$5,209,492$1,493,977$1,724,117$[4,027,807]$1,560,626$6,989,441$ 31,284,874$ Major Governmental Funds 39 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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. 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 2020 budget was amended for the Business Improvement District, Bicentennial Center and Sanitation 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, permanent funds, and the following special revenue funds: Community Development Revolving, Downtown TIF District #1, South 9th CID,Downtown CID, Alley CID, Downtown Hotel CID,STAR Bonds Subprojects, 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, Animal Shelter Donations, Special Assessments Escrow, Court Bond and Restitution, Police Investigation Account, Citizenship, DTF Local, DTF Reserve, Beechcraft Remediation Settlement and Bail Bond Escrow funds. A legal operating budget is not required for Internal Service Funds, however, 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, 2020, the statutory limit for the City was $152,746,389, providing a debt margin of $86,997,826. 41 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 3. RESTATEMENT OF EQUITY During the year ended December 31, 2020, the City implemented GASB Statement No. 84, Fiduciary Activities. The principal objective of this Statement is to enhance the consistency and comparability of fiduciary activity reporting by state and local governments. This Statement is also intended to improve the usefulness of fiduciary activity information primarily for assessing the accountability of governments in their roles as fiduciaries. As a result of the implementation, ten of the City’s fiduciary funds combined with the General Fund or were reclassified as special revenue funds and their fund balances as of January 1, 2019, were restated. Also during the year ended December 31, 2020, 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: Other Solid Governmental Governmental Waste Water and Activities General Funds Disposal Sewer Net Position/Fund Balance, 138,358,514$9,307,174$4,670,517$ 5,640,478$85,218,779$ December 31, 2019 Prior Period Adjustment [9,303,272] 196,236 425,644 1,959,983 [1,959,983] Net Position/Fund Balance, December 31, 2019, Restated 129,055,242$9,503,410$5,096,161$ 7,600,461$83,258,796$ 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, 2020, the City has the following investments: Investment Type Fair Value Rating Kansas Municipal Inve stment Pool 318,077$ S&P AAAf/S1+ Total fair va lue 318,077$ 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) A.Deposits and Investments (Continued) 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. 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, 2020 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, 2020, the balance of the construction account, Interest Reserve, and Operating Reserve was $0, $208,864, and $126,633, respectively. 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) B.Receivables Receivables as of year-end, including the applicable allowances for doubtful accounts, are as follows: Tourism and Special Debt SFH Other General Convention Gas Service QalicB Governmental Subtotal Primary Government Receivables: Accounts 7,642,984$ 326,008$ -$ -$ 1,235,034$11,365$ 9,215,391$ Taxes 10,934,927 - 305,807 3,121,345 - - 14,362,079 Interest 10,391 - - - - - 10,391 Gross receivables 18,588,302 326,008 305,807 3,121,345 1,235,034 11,365 23,587,861 Less: allowance for uncollectibles [6,055,545] - - - - [8,078] [6,063,623] Total 12,532,757$326,008$ 305,807$3,121,345$1,235,034$3,287$ 17,524,238$ Solid WaterWasteandDisposalSewer Sanitation Total Primary GovernmentReceivables: Accounts 198,287$ 2,146,899$368,051$ 11,928,628$ Taxes - - - 14,362,079 Interest 16 - - 10,407 Gross receivables 198,303 2,146,899 368,051 26,301,114 Less: allowance for uncollectibles - [900,739] [148,108] [7,112,470] Total 198,303$ 1,246,160$219,943$ 19,188,644$ 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 27,872 Less: allowance for uncollectibles [2,592] Total Salina Housing Authority 25,280 Total 873,529$ C.Interfund Receivables and Payables The composition of interfund balances as of December 31, 2020, is as follows: Fund Types Due From Due To General Fund 31,989$ -$ Other Governmental Funds - 31,989 31,989$ 31,989$ 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. 44 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D.Capital Assets Capital asset activity for the year ended December 31, 2020, was as follows: Balance Adj. Bal.Balance 12/31/2019 Adjustments 12/31/2019 Additions Retirements 12/31/2020 City governmental activities: Governmental activities: Capital assets, not being depreciated Construction in progress 45,227,729$ [9,925,152]$35,302,577$ 8,686,394$ 17,767,814$26,221,157$ Land 24,223,535 - 24,223,535 - - 24,223,535 Leased land under capital lease 422,799 - 422,799 - - 422,799 Capital assets, being depreciated Infrastructure 208,508,810 - 208,508,810 17,767,814 - 226,276,624 Buildings and improvements 53,158,946 - 53,158,946 - - 53,158,946 Vehicles 10,224,294 - 10,224,294 453,480 508,250 10,169,524 Equipment, furniture and fixtures 7,279,276 - 7,279,276 210,441 5,275 7,484,442 Leasehold improvements 357,383 - 357,383 - - 357,383 Total capital assets 349,402,772 [9,925,152] 339,477,620 27,118,129 18,281,339 348,314,410 Less accumulated depreciation for: Infrastructure 92,244,865 - 92,244,865 4,021,671 - 96,266,536 Buildings and improvements 22,602,874 - 22,602,874 1,337,773 - 23,940,647 Vehicles 7,370,391 - 7,370,391 597,748 474,017 7,494,122 Equipment, furniture and fixtures 4,926,799 - 4,926,799 252,747 4,575 5,174,971 Total accumulated depreciation 127,144,929 - 127,144,929 6,209,939 478,592 132,876,276 Governmental activities capital assets, net 222,257,843$ [9,925,152]$212,332,691$ 20,908,190$17,802,747$215,438,134$ Business-type activities: Capital assets, not being depreciated Construction in progress 7,526,968$ -$ 7,526,968$ 21,925,306$1,476,335$ 27,975,939$ Land 2,386,334 - 2,386,334 - - 2,386,334 Capital assets, being depreciated Infrastructure 130,167,335 - 130,167,335 1,476,335 - 131,643,670 Buildings and improvements 22,579,936 - 22,579,936 - - 22,579,936 Vehicles 3,863,039 - 3,863,039 - 81,772 3,781,267 Equipment, furniture and fixtures 5,751,603 - 5,751,603 13,921 - 5,765,524 Total capital assets 172,275,215 - 172,275,215 23,415,562 1,558,107 194,132,670 Less accumulated depreciation for: Infrastructure 50,343,716 - 50,343,716 3,006,824 - 53,350,540 Buildings and improvements 14,060,793 - 14,060,793 415,804 - 14,476,597 Vehicles 2,575,294 - 2,575,294 208,311 81,772 2,701,833 Equipment, furniture and fixtures 4,216,095 - 4,216,095 269,983 - 4,486,078 Total accumulated depreciation 71,195,898 - 71,195,898 3,900,922 81,772 75,015,048 Business-type activities capital assets, net 101,079,317$ -$ 101,079,317$ 19,514,640$1,476,335$ 119,117,622$ 45 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 59,708$ Public safety 596,885 Public works 4,391,637 Public health 31,110 Culture and recreation 797,125 Planning and development 333,474 Total depreciation 6,209,939$ Business-type Activities: Solid Waste Disposal 152,926$ Water and Sewer 3,543,385 Sanitation 161,378 Golf Course Division 43,233 Total depreciation 3,900,922$ E.Long-Term Debt Following is a summary of changes in long-term debt for fiscal year 2020: Balance Balance Amounts January 1, December 31,Due Within 2020 Additions Deletions 2020 One Year Governmental activities: General obligation bonds 57,623,908$ 8,053,404$ 6,346,331$ 59,330,981$ 4,699,145$ Loans payable 12,199,016 13,963 -12,212,979 - OPEB liability 3,121,647 437,137 461,244 3,097,540 - KPERS OPEB liability 349,412 54,788 1,523 402,677 - Net pension liability 28,968,806 5,602,584 -34,571,390 - Accrued compensation 2,786,077 1,149,819 1,238,890 2,697,006 1,238,890 Temporary notes 11,170,000 7,050,000 11,170,000 7,050,000 7,050,000 Total 116,218,866$22,361,695$19,217,988$119,362,573$12,988,035$ Business-type activities: General obligation bonds 4,116,515$ 6,440,539$ 1,449,064$ 9,107,990$ 1,118,207$ Revenue bonds 11,122,175 -781,015 10,341,160 816,015 Loans payable 22,539,686 18,475,071 5,088,730 35,926,027 375,071 OPEB liability 397,680 179,164 59,330 517,514 - KPERS OPEB liability 156,983 38,520 736 194,767 - Net pension liability 3,148,126 706,480 -3,854,606 - Accrued compensation 656,639 210,673 273,001 594,311 273,001 Total 42,137,804$ 26,050,447$7,651,876$ 60,536,375$ 2,582,294$ Component Units: General obligation bonds 22,425,000$ 2,100,000$ 1,425,000$ 23,100,000$ 3,730,000$ Less unamortized discount [17,703] -[861][18,564] - Lease purchase agreement -460,000 -[18,564]39,942 Special assessment debt 4,805 -2,350 2,455 2,455 KPERS OPEB obligation 13,338 586 -13,924 - Net pension liability 632,856 82,814 -715,670 - Total component units 23,058,296$ 2,643,400$ 1,426,489$ 23,794,921$ 3,772,397$ 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 2011A, due 10/1/2031 6,587,985$ 2.00% to 5.00%376,151$ Internal Improvements 2013A, due 10/1/28 1,369,380 3.00% to 4.00%820,005 Internal Improvements 2013B, due 10/1/33 4,485,073 0.60% to 3.65%2,760,796 Internal Improvements 2014A, due 10/1/34 7,839,050 2.50% to 3.75%4,493,337 Improvement and Refunding 2015A, due 10/1/35 7,157,688 2.00% to 4.00%5,409,518 Internal Improvements 2016A, due 10/1/36 6,681,766 2.00% to 3.00%5,594,414 Refunding 2016B, due 10/1/2031 15,141,004 2.00% to 5.00%12,877,933 Internal Improvements 2017A, due 10/1/37 9,388,370 3.00% to 3.375%8,416,616 Internal Improvements 2018A, due 10/1/33 2,090,000 3.15% to 4.00%1,925,524 Internal Improvements 2019A, due 10/1/39 11,090,000 3.00% to 4.00%11,270,734 Internal Improvements 2020A, due 10/1/35 5,450,610 2.00% to 3.00%5,450,610 Internal Improvements 2020B, due 10/1/36 9,043,333 2.00% to 3.00%9,043,333 Total general obligation bonds 68,438,971$ Revenue Bonds Revenue & Refunding 2019, due 10/1/31 11,122,175$ 3.00%10,341,160$ Total revenue bonds 10,341,160$ Temporary Notes Series 2020-1, due 5/1/21 7,050,000$ 1.00%7,050,000$ Total temporary notes 7,050,000$ Loans Payable Kansas Public Water Supply, due 8/1/34 9,330,000$ 2.12%6,044,214$ Kansas Public Water Supply, due 2/1/40 32,000,000 2.33%25,397,675 Kansas Public Water Supply, due 2/1/40 4,250,000 2.33%3,387,022 Kansas Water Pollution Control, due 3/1/35 2,250,000 2.54%1,097,118 Dakotas & CNMC Notes, due 12/10/50 12,640,000 1.58%12,212,979 Total loans payable 48,139,008$ 47 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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$2.67%600,000$ General Obligation 2017A, due 2030 10,255,000 3.04%10,010,000 General Obligation 2017B, due 2025 4,835,000 3.02%4,760,000 General Obligation 2019A, due 2029 675,000 2.78%615,000 General Obligation 2019B, due 2023 3,455,000 2.92%2,765,000 General Obligation Temporary Notes 2019-1, due 2021 2,250,000 2.50%2,250,000 General Obligation Temporary Notes 2020-1, due 2023 2,100,000 0.48%2,100,000 Less unamortized bond premium 23,116 Less unamortized bond discount [41,680] Total general obligation bonds 23,081,436 Taxable Lease Purchase Agreement Bldg. 824 Capital Lease, due 2030 460,000 Total taxable lease purchase agreement 460,000 Special Assessment Debt Hangar 600 Sanitary Sewer, due 2021 27,599 4.47%2,455 Total special assessment debt 2,455 Total 23,543,891$ Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies: Bonds Interest Year Outstanding Due Total 2021 5,809,970$ 2,023,189$ 7,833,159$ 2022 5,968,819 1,803,571 7,772,390 2023 5,838,819 1,589,204 7,428,023 2024 5,643,103 1,379,557 7,022,660 2025 5,338,103 1,233,432 6,571,535 2026-2030 20,230,297 4,273,047 24,503,344 2031-2035 14,929,360 1,876,027 16,805,387 2036-2039 4,680,500 285,393 4,965,893 General Obligation - Primary Government 48 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Bonds Interest Year Outstanding Due Total 2021 3,730,000$ 615,917$ 4,345,917$ 2022 1,525,000 518,748 2,043,748 2023 3,665,000 478,020 4,143,020 2024 1,615,000 424,235 2,039,235 2025 1,660,000 381,540 2,041,540 2026 - 2030 8,995,000 1,145,810 10,140,810 2031 1,910,000 57,300 1,967,300 Total 23,100,000$ 3,621,570$ 26,721,570$ 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 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 911,015 194,250 1,105,265 2026-2030 4,955,071 575,400 5,530,471 2031 1,071,014 30,150 1,101,164 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 2021 7,050,000$ 70,892$ 7,120,892$ Temporary Notes - Primary Government 49 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 2021 375,071$ 126,159$ 501,230 2022 383,064 118,166 501,230 2023 391,228 110,002 501,230 2024 399,566 101,664 501,230 2025 408,082 93,148 501,230 2026-2030 2,174,635 331,515 2,506,150 2031-2034 1,912,568 92,358 2,004,926 Total 6,044,214$ 973,012$ 7,017,226$ 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 due, partially in arrears and partially in advance, on the tenth day of each December 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, 2016, 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, 2020, 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 due, partially in arrears and partially in advance, on the tenth day of each December 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, 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, 2020, the note balance was $2,623,500. 50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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-CDE 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, on the tenth day of each December 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, 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, 2020, 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-CDE 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, on the tenth day of each December 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, 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, 2020, the note balance was $1,326,000. As of December 31, 2020, the principal balance of these four loans,net of $427,021 of unamortized debt issuance costs,was $12,212,979 Annual debt service requirement to maturity for Special Assessment Debt to be paid from rental revenue: Assessment Interest Year Outstanding Due Total 2020 2,455$ 110$ 2,565$ Total 2,455$ 110$ 2,565$ Special Assessment Debt - Component Units 51 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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, 2020, SFH QalicB earned $492,917 of rental income under the terms of the Net Lease. As of December 31, 2020, rental income of $94,825 remained receivable from the City. The following is a schedule, by year, of total minimum lease payments by the City to SFH QalicB under the direct financing lease as of December 31, 2020: Premises Leases between QalicB and City 2021 130,000$ 2022 130,000 2023 162,500 2024 227,500 2025 227,500 Thereafter 13,325,000 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. 52 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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, 2020, 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 $93,926 for the year ended December 31, 2020. The future minimum lease payments for the lease are as follows: Year Amount 2021 93,926$ 2022 93,926 2023 93,926 2024 93,926 2025 93,926 2026-2027 187,853 Total principal and interest 657,483 Less: interest [73,758] Total principal 583,725$ G. Interfund Transfers A reconciliation of interfund transfers follows: Transfer In Transfer Out Major Funds: General 4,366,550$ 877,000$ Tourism and Convention - 589,251 Special Gas 160,000 - Sales Tax Capital - 2,804,350 Debt Service 1,629,188 - Capital Projects 20,845,460 - Other governmental funds 1,241,413 - Solid Waste Disposal - 2,729,588 Water and Sewer 4,126,717 25,051,789 Sanitation - 497,350 Golf Course 100,000 - Central Garage 80,000 - Total transfers 32,549,328$32,549,328$ The City uses interfund transfers to share administrative costs between funds. 53 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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. 54 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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, 2020. The actuarially determined employer contribution rates (not including the 1.00% contribution rate for the Death and Disability Program) and the statutory contribution rate was 8.61% for KPERS and 21.93% for KP&F for the year ended December 31, 2020. Member contribution rates as a percentage of eligible compensation for the fiscal year 2020 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, 2020, 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, 2020. The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2020, the City’s proportion for the Local employees group was 0.767%, which was a decrease of .003% from its proportion measured at June 30, 2019. At June 30, 2020, the City’s proportion for the Police and Firemen group was 2.038%, which was a decrease of .036% from its proportion measured at June 30, 2019. Net Pension Liability. At December 31, 2020 and 2019, the City and its component units reported a liability of $39,533,871 and $32,116,932, respectively, for its total proportionate share of the net pension liability for the Local and Police and Firemen groups. 55 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2019, which was rolled forward to June 30, 2020, using the following actuarial assumptions: Assumptions Rate Price inflation 2.75% Wage inflation 3.25% Salary increases, including wage increases 3.25% to 11.75% including inflation Long-term rate of return, net of investment expense, and including price inflation 7.50% 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, 2019 valuation were based on the results of an actuarial experience study conducted for the period of January 1, 2016, through December 31, 2018. The experience study is dated January 7, 2020. 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, 2020 are summarized in the following table: Long-Term Expected Asset Long-Term Allocation Real Rate of Return US Equities 23.50%5.20% Non-US Equities 23.50%6.40% Private Equity 8.00%9.50% Private Real Estate 11.00%4.45% Yield Driven 8.00%4.70% Real Return 11.00%3.25% Fixed Income 11.00%1.55% Short Term Investments 4.00%0.25% 100.00% Discount Rate. The discount rate used to measure the total pension liability was 7.50%. 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. 56 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 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 7.50%, 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 (6.50%) or 1-percentage point higher (8.50%) than the current rate: 1% Decrease (6.50%)Discount Rate (7.50%)1% Increase (8.50%) Local 20,189,679$ 14,325,796$ 9,396,471$ Police & Firemen 34,403,134 25,135,770 17,396,196 Total 54,592,813$ 39,461,566$ 26,792,667$ Pension Expense. For the year ended December 31, 2020, the City recognized Local pension expense of $1,156,925 and Police and Firemen pension expense of $2,405,832, 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 $35,958 and $89,795, respectively. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2020, the City and its component units reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: 57 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Deferred outflows Deferred inflows Local of resources of resources Differences between actual and expected experience 221,907$ 170,863$ Net differences between projected and actual earnings on investments 1,550,639 - Changes in assumptions 800,513 - Changes in proportion 232,177 449,541 Total 2,805,236$ 620,404$ Deferred outflows Deferred inflows Police & Firemen of resources of resources Differences between actual and expected experience 734,702$ -$ Net differences between projected and actual earnings on investments 2,442,541 - Changes in assumptions 1,739,968 - Changes in proportion 21,294 729,307 Total 4,938,505$ 729,307$ Deferred outflows Deferred inflows Local of resources of resources Differences between actual and expected experience 700$ 8,056$ Net differences between projected and actual earnings on investments 7,527 - Changes in assumptions 9,777 648 Changes in proportion 484 12,327 Total 18,488$ 21,031$ Deferred outflows Deferred inflows Local of resources of resources Differences between actual and expected experience 11,950$ 9,201$ Net differences between projected and actual earnings on investments 83,501 - Changes in assumptions 43,107 - Changes in proportion 40,138 49,264 Total 178,696$ 58,465$ Airport Authority Housing Authority $1,763,259 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2021. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Local Police & Firemen Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31,Amount Amount Total 2021 498,387$ 1,058,828$ 1,557,215$ 2022 586,306 1,155,904 1,742,210 2023 578,511 1,086,067 1,664,578 2024 507,037 877,263 1,384,300 2025 14,591 31,136 45,727 Total 2,184,832$ 4,209,198$ 6,394,030$ 58 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) A.Defined Benefit Pension Plan (Continued) $38,910 and $35,467 reported as deferred outflows of resources related to pensions resulting from Salina Housing Authority and Salina Airport Authority contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2021. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Housing Airport Authority Authority Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31,Amount Amount Total 2021 5,237$ 30,148$ 35,385$ 2022 [6,228]38,269 32,041 2023 [879]30,520 29,641 2024 [366]21,279 20,913 2025 [307]15 [292] Total [2,543]$ 120,231$ 117,688$ 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, $183,446 is considered to be due within one year. 59 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) Changes in the balances of claims liabilities during the past two years are as follows: 2020 2019 Unpaid claims, January 1 311,572$ 238,778$ Incurred claims (including IBNRs)917,229 726,271 Claim payments [782,306] [653,477] Unpaid claims, December 31 446,495$ 311,572$ 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 $50,000. Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Health Insurance Fund because it is expected to be liquidated with expendable available financial resources. Therefore, all of the liability is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 2020 2019 Unpaid claims, January 1 489,418$ 380,980$ Incurred claims (including IBNRs)3,056,323 4,466,044 Claim payments [2,940,741][4,357,606] Unpaid claims, December 31 605,000$ 489,418$ 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, 2020. 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 $2,300,353 reported as landfill closure and postclosure care liability at December 31, 2020,represents the cumulative amount reported to date based on the use of 28.8% of the estimated capacity of the landfill. 60 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) F. Municipal Solid Waste Landfill (Continued) The City's solid waste fund will recognize the remaining estimated cost of closure and postclosure care of $5,680,356 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 2020. 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. G.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. Since 2010, 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) were completed in 2019 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 $69.5 million lump sum payment by the United States to the Salina Public Entities. The settlement payment was not received by the City or the Salina Public Entities as of December 31, 2020. The City has determined that while a possible liability exists, at this time, no reasonable estimate of the possible liability can be made. Therefore, no liability related to that matter has been recorded. 61 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) H. Capital Projects Capital projects often extend over two or more fiscal years. The following is a schedule, which compares the project authorization including allowable interest revenue to total project expenditures from project inception to December 31, 2020. Project Authorization Expenditures Markley-Magnolia VV Sewer 5,150,000$ 1,314,305$ North Lime Drying Lagoon Yearly Maintenance 120,000 37,260 Rebuild High Service Pump P-203 24,187 13,688 2017 Country Club Road Improvements 1,200,000 1,089,063 River Trail 2 956,072 11,312 Downtown Streetscape 12,165,000 11,669,107 Smoky Hill River Renewal 27,000,000 3,595,670 Water Mains 4,250,000 3,649,443 Downtown Santa Fe Water Main Replacement 1,351,100 1,415,997 Police Training Facility 4,900,000 5,936,845 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 1,991,469 Railroad Crossing Improvements 45,000 - 2018 Park Improvements 194,000 87,000 Pheasant Ridge Addition #3 Phase 2 509,233 509,878 Community Theater HVAC Replacement 46,000 207 Storm Sewer Mulberry Street 22,709 26,151 N. 9th Street Bridge 2,000,000 4,273 Golf Course Irrigation 1,488,414 1,499,452 9th South Addition 1,180,313 2,976 Smoky Hill Greenway Trail 435,637 61,934 Chorine Bluilding 2 Roof Replacement 35,000 - 2019 Water Main Replacement 4,000,000 - Magnolia Hills Estates II 1,575,240 11,285 Stone Lake Phase 2 670,166 335,794 Stone Lake Phase 3A 1,647,053 3,368 Smedley Surgical Center 45,486 36,501 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 - Mulberry Storm Sewer Repairs 461,556 417,398 Chip Seal 210,623 194,940 Microsurfacing 574,888 306 Mill & Inlay 494,196 375,247 Price Property Culvert Replacement 6,600 59,625 Waterline for SWTP 912,982 812,319 Joe Milbradt Pavillion 133,100 256,785 Fire Equipment 860,795 484,487 WWTP Owners Rep 896,790 93,595 WWTP Improvement PH I 879,193 - Public Safety Communication System 2,361,323 139,986 TPEC Improvements 270,426 - 62 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) 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 2020, the City did not contribute to the plan. At December 31, 2020, the following employees were covered by the benefit terms: Active employees 440 Retirees and covered spouses 29 Total 469 The total OPEB liability of $3,615,054 was measured as of December 31, 2019 and was determined by an actuarial valuation as of that date. The total OPEB liability in the December 31, 2019 actuarial valuation was determined using the following assumptions and other inputs, applied to all periods in the measurement, unless otherwise specified: Valuation date December 31, 2019 Actuarial cost method Entry age normal as a level percentage of payroll Inflation 2.75% Salary increases 3.50% Discount rate 2.74% Healthcare cost trend rates Medical: 6.40% for 2020, decreasing 0.50% per year to an ultimate rate of 3.7% for 2074 Dental: 5.00% to 2022, then decreasing to an ultimate rate of 3.70% in 2074 Retiree's share of benefit related costs 100% of the premium The discount rate was based on an index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. Mortality rates were based on the RP 2014 Mortality Tables, with age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2017. Changes in the total OPEB liability are as follows: Balance 1/1/2020 3,519,327$ Service cost 231,391 Interest 150,552 Benefit paid [159,018] Economic/demographic gains/losses [255,426] Changes in assumptions 128,228 Balance 12/31/2020 3,615,054$ 63 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) I.Other Postemployment Healthcare Benefits (Continued) 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 (1.74%) or one percentage point higher (3.74%) than the current discount rate: 1% Decrease Discount Rate 1% increase (1.74%)(2.74%)(3.74%) Total OPEB Liability 3,971,843$ 3,615,054$ 3,289,912$ 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 or one percentage point higher than the current healthcare cost trend rate: Healthcare Cost 1% Decrease Trend Rates 1% increase Total OPEB Liability 3,166,500$ 3,615,054$ 4,152,174$ For the year ended December 31, 2020, the City recognized OPEB expense of $356,442. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2020, the City reported deferred outflows related to other postemployment benefits from the following sources: Deferred outflows Deferred inflows of resources of resources Changes of assumptions 173,216$ [143,654]$ Differences between expected and actual experience - [226,168] Total 173,216$ [369,822]$ Amounts reported as deferred outflows of resources will be recognized in OPEB expense as follows: Year ended Deferred [Inflows] June 30,Outflows Amount 2021 [25,501]$ 2022 [25,501] 2023 [25,501] 2024 [25,501] 2025 [25,501] 2026+[69,101] Total [196,606]$ 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 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. 64 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) J.Other Postemployment Benefits (KPERS) (Continued) 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, 2020, the valuation date, the following employees were covered by the benefit terms: Active employees 281 Disabled members 3 Total 284 Total OPEB Liability. The City and its component units reported a total KPERS OPEB liability of $597,444 as of December 31, 2020,was measured as of June 30, 2020, and was determined by an actuarial valuation as of December 31, 2019, which was rolled forward to June 30, 2020, using the following actuarial assumptions: Valuation date December 31, 2019 Actuarial cost method Entry age normal Inflation 2.75% Salary increases 3.00% Discount rate (based on 20 year municipal bond rate with an average rating of AA/Aa or better, obtained through the Bond Buyer General Obligation 20-Bond Municipal Index)2.21% The discount rate was based on the bond buyer general obligation 20-bond municipal index. 65 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) J.Other Postemployment Benefits (KPERS) (Continued) Mortality rates were based on the RP 2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2019. The actuarial assumptions used in the December 31, 2019, valuation were based on the results of an actuarial experience study for the period of January 1, 2016 through December 31, 2018. Other demographic assumptions are set to be consistent with the actuarial assumptions reflected in the December 31, 2019, KPERS pension valuation. The changes in the total OPEB liability are as follows: City Housing Authority Airport Authority Total Balance 1/1/2020 506,395$ 8,186$ 13,338$ 527,919$ Service cost 57,185 1,529 3,430 62,144 Interest 19,037 376 587 20,000 Effect of economic/demographic gains or losses 17,086 [2,482] - 14,604 Changes in assumptions 37,368 49 [4,295] 33,122 Benefit payments [39,627] - 864 [38,763] Balance 12/31/2020 597,444$ 7,658$ 13,924$ 619,026$ 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 (1.21%) or 1-percentage-point higher (3.21%) than the current discount rate: 1% Decrease Discount Rate 1% increase (1.21%)(2.21%)(3.21%) Total OPEB Liability - City 618,840$ 597,444$ 575,090$ Total OPEB Liability - Housing Authority 7,745$ 7,658$ 7,511$ Total OPEB Liability - Airport Authority 14,114$ 13,924$ 13,610$ 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 597,444$ 597,444$ 597,444$ Total OPEB Liability - Housing Authority 7,658$ 7,658$ 7,658$ Total OPEB Liability - Airport Authority 13,924$ 13,924$ 13,924$ For the year ended June 30, 2020, the City recognized OPEB expense of $78,842. 66 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) J.Other Postemployment Benefits (KPERS) (Continued) Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2020, the City reported deferred outflows and inflows related to other postemployment benefits from the following sources: Deferred Deferred Deferred Deferred Deferred Deferred Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of Resources Resources Resources Resources Resources Resources Differences between expected and actual experience 67,257$ 75,665$ -$ 4,221$ 7,813$ -$ Changes of assumptions 39,638 9,995 44 195 148 897 Total 106,895$ 85,660$ 44$ 4,416$ 7,961$ 897$ Airport AuthorityCityHousing Authority $64,827 and $3,830 reported as deferred outflows of resources related to OPEB resulting from City and Airport Authority contributions subsequent to the measurement date,respectively, will be recognized as a reduction of the OPEB liability in the year ended December 31, 2021. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in OPEB expense as follows: Year Ended Housing Airport June 30,City Authority Authority 2021 2,620$ [537]$ [925]$ 2022 2,620 [537][925] 2023 2,620 [537][925] 2024 2,620 [537][925] 2025 2,620 [537][925] Thereafter 8,135 [1,687] [2,439] Total 21,235$ [4,372]$ [7,064]$ K.Tax Abatements In 2020, 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. 67 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) Company Start End %2020 Tax Abated Salina Vortex Corp (facility improvements)2015 2024 37.5%5,522$ Great Plains Mfg (facility improvements)2014 2023 50%4,073 Veris Technologies (facility addition/improvements)2015 2024 20.3%505 Twin Oaks (facility addition/improvements)2015 2024 27.5%688 Total 10,789$ 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. 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 $29,304 $178,680 Total $29,304 $178,680 2020 Reimbursements 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. 68 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) 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 2020 Eligible Reimbursement Amount South 9th Street 2.00%3/1/2016 12/31/2037 Assist with improvements to hotel and conference center $251,052 Alley 1.00%10/1/2019 9/30/2041 Assist with building of family entertainment facility in downtown $13,454 Downtown 1.00%7/1/2019 6/30/2041 Assist with Revitilization of Downtown Corridor $14,487 Downtown Hotel 1.00%10/1/2019 9/30/2041 Assist with building of downtown hotel - Total $278,993 Community Improvement District (CID) Neighborhood Revitalization Areas (NRA).NRAs are authorized under Kansas state statutes K.S.A. 12-117 and subject to City policy to spur investment and revitalization of properties which can benefit a neighborhood and the public. The program works by rebating a portion of the incremental increase in property taxes resulting from improvements back to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. Participation in the program and percentage of rebate and duration are determined separately by the City, County, and School District. The current City of Salina adopted plan is a 4-year plan running from 2015-2019. It allows for a 10-year rebate and provides rebates from 25% to 100% depending on year in plan and type of improvement. To receive an NRA, taxpayers must submit an application, which undergoes due diligence and analysis before being approved by the City. If the NRA is approved, each year, the applicant must submit proof that property taxes have been paid in full. Because the rebate is not given until after improvements are put in place and property taxes paid, there are no provisions for recapturing taxes. The City of Salina approves NRAs on an individual basis. 69 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) 2020 Property/Business Name Address Type Rebate Paid Serio Guzman 241 N. Front Street Res 32$ William & Mary Warhurst 1009 N. 8th Street Res 10 Holly Fain 219 N. Front Street Res 49 Arlene Cox 1101 N. 10th Street Res 61 Gloria Williams 714 Park Street Res 44 Michelle Rogan 204 Forest Avenue Res 59 Samuel A. Rock 200 Forest Avenue Res 15 Jessica A. Ziegler 1329 N. 4th Street Res 62 Ryan Murphy 303 S. Santa Fe Avenue Res 83 Ravey Investments LLC 227 S. Santa Fe Avenue Com 713 Lamont Outland 221 N. 2nd Street Res 105 Michelle Bunch 207 N. Penn Res 113 Jermaine and Tykea Polk 157 N. Seventh, 203 W. Ash, 205 W. Ash, 207 W. Ash & 209 W. Ash Res 128 Mary Marshall 1206 N. 7th Street Res 108 Angela Fishburn 1219 N. 8th Street Res 108 Heritage at Hawthorne Partners, LLC 937 N. 3rd Street Com 1,842 Will & Mary Warhurst 1219 N. 8th Street Res 165 Donnie & Ramona Marrs 134 S. Santa Fe Ave Res 936 TJTM, Inc. 2035 E. Iron #213C/105R/302R/202R/205R/006R/301RA/301 RB/001R/002R/003R/004R/005R Res 6,461 Troy Valcil 853 Navaho Res 79 Michelle Malone 815 N. 2nd Street Res 4 Timothy & Linda Rickman 719 E. Ash Res 71 Yvette Gelinas 1115 N. 8th Street Res 116 Charles H Carroll Jr Trust 156-158 S. Santa Fe Com 2,125 Pestinger Enterprises LLC 2035 E. Iron Avenue, Unit #306R Res 1,565 Latisha Pierce 705 N. 2nd Street Res 133 Tanya Shiehzadeh 703 N. 2nd Street Res 129 Robert & Brenda Burns 1205 N. 4th Street Res 84 Property Partners LLC 116 & 118 N. Santa Fe (2nd Floor Loft Apartments)Com 818 AP Property Holdings, LLC 201 E. Iron Avenue Com 5,359 Gregory Davis 156-158 N. 11th Street Res 280 Micheal Money 2035 E. Iron Avenue, Unit #206R Res 946 Traniesh Byrd 701 N. 2nd Street Res 165 Mark Martin Living Trust 2035 E. Iron #104R Com 797 Matthew Snyder 2035 E Iron #304R Res 529 Doyle & Maureen Comfort Trust 2035 E Iron #304R Res 1,166 Jana Endsley 1321 N. 3rd Street Res 229 Kanesha Samilton 214 W. Grand Avenue Res 269 Maria E Padilla 810 N. 5th Street Res 307 JK Webb Properties LLC 120 S. Santa Fe Avenue Com 2,867 Alan and Nancy Franzen 1413 Arapahoe Res 202 Santa Fe Properties, LLC 131 N. Santa Fe Avenue/128 S. Santa Fe Avenue Com 3,830 Rusty A Leister Living Trust 600 N. Santa Fe Avenue Com 2,137 Heritage at Hawthorne Partners II, LLC.715 N. 9th Street, Phase II Com 2,150 Christopher Helm 608 N. 11th Street Res 152 Christopher Helm 752 N. Broadway Com 6,306 Laurie Donmyer 255 N. Columbia Res 186 Eva Wright 1200 N. 8th Res 278 Foley Equipment Co.2225 N. Ohio St Com 16,750 Mark Ritter 2035 E. Iron #108R Res 1,621 Angelica Farris 846 Choctaw Ave Res 311 Christopher Vogel 2035 E. Iron #209R Res 909 Christopher Helm 619 N. 5th Street Com 806 64,770$ Neighborhood Revitalization Act (NRA) 70 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2020 Note 5. OTHER INFORMATION (Continued) K. Subsequent Events On April 12,2021, the City issued Series 2021-A general obligation internal improvement bonds in the amounts of $5,230,000. 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, 2022 the last payment on October 1, 2041. The interest rate on the bonds ranges from 2.00% to 4.50%. Also on April 12, 2021, the City issued Series 2021-1 temporary notes in the amounts of $5,230,000. Proceeds from the notes will be used to provide interim construction financing of certain public improvements within the City. The maturity date of the temporary notes is May 1, 2022 and the interest rate on the notes is 2.00%. On January 30, 2020 the World Health Organization declared the Coronavirus outbreak as a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions were taken to help mitigate the spread of the virus, including social-distancing, quarantines and forced closures of certain types of public places and businesses. The coronavirus and actions taken to mitigate the spread of it have had and are expected to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the City operates. It is unknown how long the adverse conditions associated with the pandemic will last and what the complete financial effect will be to the City. Management cannot quantify the financial and other impacts to the City’s financial position but believes a material impact is reasonably possible. REQUIRED SUPPLEMENTARY INFORMATION 71 CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFITS Schedule of Changes in the City’s Total OPEB Liability and Related Ratios Last Ten Fiscal Years* Total OPEB liability 2020 2019 2018 Service cost 231,391$ 249,957$ 226,762$ Interest 150,552 125,877 128,578 Benefit paid [159,018] [157,465] [265,000] Economic/demographic gains/losses [255,426] - - Changes in assumptions 128,228 [186,344] 90,918 Net change in total OPEB liability 95,727 32,025 181,258 Total OPEB liability - beginning 3,519,327 3,487,302 3,306,044 Total OPEB liability - ending 3,615,054$ 3,519,327$ 3,487,302$ Covered payroll 25,163,639$25,232,129$24,740,225$ Total OPEB liability as a percentage of 14.37%13.95%14.10% covered-employee payroll Actuarially determined contribution 159,018$ 157,465$ 265,000$ Actual contribution 159,018$ 157,465$ 265,000$ Contributions as a percentage of covered payroll 0.63%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 2020 2019 2018 Service cost 57,185$ 52,863$ 52,380$ Interest 19,037 22,667 17,061 Effect of economic/demographic gains or losses 17,086 [95,243] 75,173 Effect of assumptions changes or inputs 37,368 7,614 [6,574] Benefit payments [39,627][28,432] [30,368] Net change in total OPEB liability 91,049 [40,531] 107,672 Total OPEB liability - beginning 506,395 546,926 439,254 Total OPEB liability - ending 597,444$ 506,395$ 546,926$ Covered payroll 14,338,983$ 13,991,543$ 13,652,194$ Total OPEB liability as a percentage of 4.17%3.62%4.01% covered-employee payroll Actuarially determined contribution 144,746$ 144,746$ 109,466$ Actual contribution 144,746$ 144,746$ 109,466$ Contributions as a percentage of covered payroll 1.01%1.03%0.80% *data became available with the inception of GASB 75 during fiscal year 2018, therefore 10 years of data is unavailable. 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* 2015 2016 2017 2018 2019 2020 City's proportion of the net pension liability Local 0.764% 0.761% 0.811% 0.790% 0.796% 0.766% Police & Fire 2.258% 2.180% 2.191% 2.081% 2.074% 2.038% City's proportionate share of the net pension liability Local 10,027,679$11,770,699$11,753,246$11,014,328$11,123,112$13,290,226$ Police & Fire 16,395,794$20,251,512$20,546,882$20,019,473$20,993,820$25,135,770$ City's covered-employee payroll Local 12,931,197$13,251,236$13,548,056$13,944,989$14,366,294$14,948,415$ Police & Fire 10,161,866$10,730,033$10,593,419$10,441,055$10,859,219$11,285,465$ City's proportionate share of the net pension liability as a percentage of its its covered-employee payroll Local 77.55% 88.83% 86.75% 78.98% 77.43% 88.91% Police & Fire 161.35% 188.74% 193.96% 191.74% 193.33% 222.73% Plan fiduciary net position as a percentage of the total pension liability Local 71.98% 68.55% 72.15% 74.22% 75.02% 70.77% Police & Fire 74.60% 69.30% 70.99% 71.53% 71.22% 66.81% *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* 2015 2016 2017 2018 2019 2020 Contractually required contribution Local 1,256,217$ 1,243,711$ 1,179,745$ 1,205,334$ 1,328,915$ 1,156,925$ Police & Fire 2,527,995$ 2,361,273$ 1,986,933$ 2,181,617$ 2,497,473$ 2,405,832$ Contributions in relation to the contractually required contribution Local 1,256,217 1,243,711 1,179,745 1,205,334 1,328,915 1,156,925 Police & Fire 2,527,995 2,361,273 1,986,933 2,181,617 2,497,473 2,405,832 Contribution deficiency [excess]-$ -$-$-$-$-$ City's covered-employee payroll Local 13,251,236$13,548,056$13,944,989$14,366,294$14,948,415$13,436,992$ Police & Fire 10,730,033$10,593,419$10,441,055$10,859,219$11,285,465$10,970,505$ Contributions as a percentage of covered employee payroll Local 9.48% 9.18% 8.46% 8.39% 8.89% 8.61% Police & Fire 23.56% 22.29% 19.03% 20.09% 22.13% 21.93% *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 NONMAJOR SPECIAL REVENUE 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 district. 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 to the developers as part of the Community Improvement District formed in 2015. Downtown CID fund - To account for incremental sales tax revenues received and disbursed to the developers as part of the Community Improvement District formed in 2017. Alley CID fund - To account for incremental sales tax revenues received and disbursed to the developers as part of the Community Improvement District formed in 2016. Downtown Hotel CID fund - To account for incremental sales tax revenues received and disbursed to the developers as part of the Community Improvement District formed in 2017. STAR Bonds Subproject fund - To track disbursements and reimbursements associated with the Stiefel Theatre’s STAR Bond 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. 75 CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS -CONTINUED 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. Special assessments escrow fund -To account for property owners' prepayment on outstanding special assessments. Court bond and restitution fund -To account for bonds and restitution remitted to the court and awaiting court orders for distribution. Police investigation account fund -To account for monies held by the police department for use in investigations. Citizenship fund -To account for donations received and used for the citizenship fund. 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 the sale of assets acquired during drug enforcement activities as they related to federal cases placed in a reserve for future use. 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. 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. 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 6,696,113$ 542,755$ 800$ 7,239,668$ Receivables Accounts 3,287 --3,287 Total assets 6,699,400$ 542,755$ 800$ 7,242,955$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 221,525$ -$-$221,525$ Due to other funds 31,989 --31,989 Total liabilities 253,514 --253,514 Fund balances: Restricted 694,713 -800 695,513 Committed 5,561,914 542,755 -6,104,669 Assigned 189,259 --189,259 Total fund balances 6,445,886 542,755 800 6,989,441 Total liabilities and fund balances 6,699,400$ 542,755$ 800$ 7,242,955$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2020 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 1,126,829$ -$ -$1,126,829$ Intergovernmental 1,219,866 -315,372 1,535,238 Charges for services 108,135 13,282 -121,417 Licenses and permits 5,070 --5,070 Investment revenue 16,764 1,972 2,400 21,136 Donations 129,193 --129,193 Miscellaneous 3,518,022 -59,555 3,577,577 Total revenues 6,123,879 15,254 377,327 6,516,460 EXPENDITURES Current Culture and recreation 1,207,431 --1,207,431 Public safety 625,362 --625,362 Public health and sanitation 597,804 --597,804 Planning and development 376,545 --376,545 Miscellaneous -35 1,300,626 1,300,661 Debt service Interest and other charges --15,496 15,496 Capital outlay 1,741,294 --1,741,294 Total expenditures 4,548,436 35 1,316,122 5,864,593 Excess [deficiency] of revenues over [under] expenditures 1,575,443 15,219 [938,795] 651,867 Other financing sources [uses] Transfers in 1,241,413 --1,241,413 Total other financing sources [uses]1,241,413 --1,241,413 Net change in fund balance 2,816,856 15,219 [938,795] 1,893,280 Fund balance - Beginning of year 3,203,386 527,536 939,595 4,670,517 Prior period adjustment 425,644 --425,644 Fund balance - Beginning of year, restated 3,629,030 527,536 939,595 5,096,161 Fund balance - End of year 6,445,886$ 542,755$ 800$ 6,989,441$ For the Year Ended December 31, 2020 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 Community Sales Tax Downtown Bicentennial Improvement Neighborhood Parks &Special Development Economic TIF Center District Park Recreation Alcohol Revolving Development District #1 ASSETS Cash and investments 406,690$ 11,017$ 33,821$ 478,383$ 234$ 186,307$ 720,798$ 709,533$ Receivables Accounts -3,287 ------ Total assets 406,690$ 14,304$ 33,821$ 478,383$ 234$ 186,307$ 720,798$ 709,533$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 89,049$ -$-$-$-$-$5,112$ -$ Due to other funds -------- Total liabilities 89,049 -----5,112 - Fund balance: Restricted -14,304 -465,773 234 186,307 -- Committed 317,641 -33,821 ---715,686 709,533 Assigned ---12,610 ---- Total fund balance [deficit]317,641 14,304 33,821 478,383 234 186,307 715,686 709,533 Total liabilities and fund balances 406,690$ 14,304$ 33,821$ 478,383$ 234$ 186,307$ 720,798$ 709,533$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2020 Kenwood Special South Downtown Alley Downtown STAR Bonds State 911 Cove Law Police 9th CID CID CID Hotel CID Subprojects Grants Communications Capital Enforcement Grants 22,388$ 286,564$ 3,742$18,719$ 2,000,000$ 6,493$421,418$ 195,961$ 82$3,479$ ---------- 22,388$ 286,564$ 3,742$18,719$ 2,000,000$ 6,493$421,418$ 195,961$ 82$3,479$ 20,691$ -$-$-$-$-$79,426$3,571$-$-$ ---------- 20,691 -----79,426 3,571 -- ---------- 1,697 286,564 3,742 18,719 2,000,000 6,493 165,343 192,390 82 3,479 ------176,649 --- 1,697 286,564 3,742 18,719 2,000,000 6,493 341,992 192,390 82 3,479 22,388$ 286,564$ 3,742$18,719$ 2,000,000$ 6,493$421,418$ 195,961$ 82$3,479$ See independent auditor's report on the financial statements. 788 Police War Federal Department Federal DARE Memorial Arts &CARE Federal Homeowners'Private Grants Donations Maintenance Humanities Grant Forfeiture Funds Assistance Grants ASSETS Cash and investments -$14,031$ 30,843$ 103,587$ 26,141$ 99$19,041$ 1,954$ Receivables Accounts -------- Total assets -$14,031$ 30,843$ 103,587$ 26,141$ 99$19,041$ 1,954$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 16,440$ 825$ -$3,521$ -$-$-$-$ Due to other funds 31,989 ------- Total liabilities 48,429 825 -3,521 ---- Fund balance: Restricted ----26,141 --1,954 Committed [48,429] 13,206 30,843 100,066 -99 19,041 - Assigned -------- Total fund balance [deficit][48,429] 13,206 30,843 100,066 26,141 99 19,041 1,954 Total liabilities and fund balances -$14,031$ 30,843$ 103,587$ 26,141$ 99$19,041$ 1,954$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2020 Animal Special Court Police Beechcraft Bail Shelter Assessments Bond and Investigation DTF DTF Remediation Bond Donations Escrow Restitution Account Citizenship Local Reserve Settlement Escrow Totals 560,731$ 116,682$ 31,394$ 3,384$39,757$ 10,076$ 41,663$ 189,966$ 1,135$6,696,113$ ---------3,287 560,731$ 116,682$ 31,394$ 3,384$39,757$ 10,076$ 41,663$ 189,966$ 1,135$6,699,400$ 1,590$-$-$-$1,000$300$-$-$-$221,525$ ---------31,989 1,590 ---1,000 300 ---253,514 ---------694,713 559,141 116,682 31,394 3,384 38,757 9,776 41,663 189,966 1,135 5,561,914 ---------189,259 559,141 116,682 31,394 3,384 38,757 9,776 41,663 189,966 1,135 6,445,886 560,731$ 116,682$ 31,394$ 3,384$39,757$ 10,076$ 41,663$ 189,966$ 1,135$6,699,400$ See independent auditor's report on the financial statements. 79 Business Special Community Sales Tax Downtown Bicentennial Improvement Neighborhood Parks &Special Development Economic TIF Center District Park Recreation Alcohol Revolving Development District #1 Revenues Taxes -$-$-$-$-$-$350,004$ 291,557$ Intergovernmental ---171,982 171,982 --- Charges for services -80,807 ------ Licenses and permits --5,070 ----- Investment revenue -------2,443 Donations -------- Miscellaneous 175,000 -----1,833 - Total Revenues 175,000 80,807 5,070 171,982 171,982 -351,837 294,000 Expenditures Current Culture and recreation 713,405 ------- Public safety -------- Public health and sanitation ----171,982 --- Planning and development -73,176 -----20,109 Capital outlay ---42,465 --344,714 - Total Expenditures 713,405 73,176 -42,465 171,982 -344,714 20,109 Excess [deficiency] of revenues over [under] expenditures [538,405] 7,631 5,070 129,517 --7,123 273,891 Other financing sources [uses] Transfers in 656,063 ------- Total other financing sources [uses]656,063 ------- Net change in fund balance 117,658 7,631 5,070 129,517 --7,123 273,891 Fund balance, beginning of year 199,983 6,673 28,751 348,866 234 186,307 708,563 435,642 Prior period adjustment -------- Fund balance, beginning of year, restated 199,983 6,673 28,751 348,866 234 186,307 708,563 435,642 Fund balance, end of year 317,641$ 14,304$ 33,821$ 478,383$234$ 186,307$ 715,686$ 709,533$ CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2020 Kenwood Special South Downtown Alley Downtown STAR Bonds State 911 Cove Law Police 9th CID CID CID Hotel CID Subprojects Grants Communications Capital Enforcement Grants 216,895$ 232,549$ 17,176$ 18,648$ -$-$-$-$-$-$ -----122,055 477,372 --3,479 ---------- ---------- 33 685 20 71 --1,646 --- ---------- 11,732 67,817 --3,219,786 ----- 228,660 301,051 17,196 18,719 3,219,786 122,055 479,018 --3,479 ---------- ------586,331 --- ---------- 228,237 14,487 13,454 ------- ----1,219,786 122,055 -11,149 -- 228,237 14,487 13,454 -1,219,786 122,055 586,331 11,149 -- 423 286,564 3,742 18,719 2,000,000 -[107,313][11,149]-3,479 -------68,350 -- -------68,350 -- 423 286,564 3,742 18,719 2,000,000 -[107,313]57,201 -3,479 1,274 ----6,493 449,305 135,189 82 - ---------- 1,274 ----6,493 449,305 135,189 82 - 1,697$ 286,564$ 3,742$ 18,719$ 2,000,000$ 6,493$ 341,992$ 192,390$ 82$3,479$ See independent auditor's report on the financial statements. 8080 Police War Federal Department Federal DARE Memorial Arts &CARE Federal Homeowners'Private Grants Donations Maintenance Humanities Grant Forfeiture Funds Assistance Grants Revenues Taxes -$-$-$-$-$-$-$-$ Intergovernmental 222,996 ------- Charges for services - --27,328 ---- Licenses and permits - ------- Investment revenue - -113 ----- Donations - ------- Miscellaneous -12,175 ----2,196 - Total Revenues 222,996 12,175 113 27,328 --2,196 - Expenditures Current Culture and recreation - --494,026 ---- Public safety - ------- Public health and sanitation 312,550 ------- Planning and development -27,082 ------ Capital outlay -------- Total Expenditures 312,550 27,082 -494,026 ---- Excess [deficiency] of revenues over [under] expenditures [89,554] [14,907] 113 [466,698] --2,196 - Other financing sources [uses] Transfers in -- -517,000 ---- Total other financing sources [uses]-- -517,000 ---- Net change in fund balance [89,554] [14,907] 113 50,302 --2,196 - Fund balance, beginning of year 41,125 28,113 30,730 49,764 26,141 99 16,845 1,954 Prior period adjustment -- ------ Fund balance, beginning of year, restated 41,125 28,113 30,730 49,764 26,141 99 16,845 1,954 Fund balance, end of year [48,429]$ 13,206$ 30,843$ 100,066$ 26,141$ 99$19,041$ 1,954$ For the Year Ended December 31, 2020 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS (Continued) Animal Special Court Police Beechcraft Bail Shelter Assessments Bond and Investigation DTF DTF Remediation Bond Donations Escrow Restitution Account Citizenship Local Reserve Settlement Escrow Totals -$-$-$-$-$-$-$-$-$1,126,829$ 50,000 --------1,219,866 ---------108,135 ---------5,070 ----11,055 --698 -16,764 121,160 ------8,033 -129,193 --8,867 1 -13,265 5,350 --3,518,022 171,160 -8,867 1 11,055 13,265 5,350 8,731 -6,123,879 ---------1,207,431 -----29,031 10,000 --625,362 113,272 --------597,804 ---------376,545 ----1,125 ----1,741,294 113,272 ---1,125 29,031 10,000 --4,548,436 57,888 -8,867 1 9,930 [15,766] [4,650] 8,731 -1,575,443 ---------1,241,413 ---------1,241,413 57,888 -8,867 1 9,930 [15,766] [4,650] 8,731 -2,816,856 501,253 --------3,203,386 -116,682 22,527 3,383 28,827 25,542 46,313 181,235 1,135 425,644 501,253 116,682 22,527 3,383 28,827 25,542 46,313 181,235 1,135 3,629,030 559,141$ 116,682$ 31,394$ 3,384$ 38,757$ 9,776$ 41,663$ 189,966$ 1,135$ 6,445,886$ See independent auditor's report on the financial statements. 81 Cemetery Mausoleum Tricentennial ASSETS Endowment Endowment Commission Total Cash and investments 534,767$ 2,071$ 5,917$ 542,755$ Total assets 534,767$ 2,071$ 5,917$ 542,755$ LIABILITIES AND FUND BALANCES Liabilities Accounts payable -$-$-$-$ Total liabilities ---- Fund balances Committed 534,767 2,071 5,917 542,755 Total liabilities and fund balances 534,767$ 2,071$ 5,917$ 542,755$ CITY OF SALINA, KANSAS COMBINING BALANCE SHEET December 31, 2020 NONMAJOR PERMANENT FUNDS See independent auditor's report on the financial statements. 82 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Total Revenues Charges for services 13,282$ -$-$13,282$ Investment revenue 1,942 8 22 1,972 Total revenues 15,224 8 22 15,254 Expenditures Miscellaneous 35 --35 Total expenditures 35 --35 Net change in fund balance 15,189 8 22 15,219 Fund balances - beginning of year 519,578 2,063 5,895 527,536 Fund balances - end of year 534,767$ 2,071$ 5,917$ 542,755$ NONMAJOR PERMANENT FUNDS For the Year Ended December 31, 2020 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Miscellaneous 175,000$ -$-$175,000$ Total revenues 175,000 --175,000 Expenditures Culture and recreation 713,405 -740,000 26,595 Total expenditures 713,405 -740,000 26,595 Excess [deficiency] of revenues over [under] expenditures [538,405]-[740,000]201,595 Other financing sources [uses] Transfers in 656,063 -830,000 [173,937] Total other financing sources [uses]656,063 -830,000 [173,937] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]117,658 -90,000 27,658 Unreserved fund balance, January 1 199,983 -137,177 62,806 Unreserved fund balance/GAAP fund balance December 31 317,641$ -$227,177$ 90,464$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 79,532$ 90,500$ 90,500$ [10,968]$ Total revenues 79,532 90,500 90,500 [10,968] Expenditures Planning and development 73,176 90,500 90,500 17,324 Total expenditures 73,176 90,500 90,500 17,324 Excess [deficiency] of revenues over [under] expenditures 6,356 - - 6,356 Unreserved fund balance, January 1 4,661 4,461 4,461 200 Unreserved fund balance, December 31 11,017 4,461$ 4,461$ 6,556$ Reconciliation to GAAP Accounts receivable 3,287 GAAP Fund Balance, December 31 14,304$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Licenses and permits 5,070$ 3,000$ 3,000$ 2,070$ Total revenues 5,070 3,000 3,000 2,070 Expenditures Capital outlay -10,000 10,000 10,000 Total expenditures -10,000 10,000 10,000 Excess [deficiency] of revenues over [under] expenditures 5,070 [7,000] [7,000]12,070 Unreserved fund balance, January 1 28,751 28,751 28,751 - Unreserved fund balance/GAAP fund balance December 31 33,821$ 21,751$ 21,751$ 12,070$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 171,982$ 197,740$ 197,740$ [25,758]$ Investment revenue - 100 100 [100] Total revenues 171,982 197,840 197,840 [25,858] Expenditures Capital outlay 55,075 194,000 194,000 138,925 Total expenditures 55,075 194,000 194,000 138,925 Excess [deficiency] of revenues over [under] expenditures 116,907 3,840 3,840 113,067 Unreserved fund balance, January 1 348,866 348,866 348,866 - Unreserved fund balance, December 31 465,773 352,706$ 352,706$ 113,067$ Reconciliation to GAAP Current year encumbrances 12,610 GAAP Fund Balance, December 31 478,383$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Intergovernmental 171,982$ 197,740$ 197,740$ [25,758]$ Total revenues 171,982 197,740 197,740 [25,758] Expenditures Public health and sanitation 171,982 197,740 197,740 25,758 Total expenditures 171,982 197,740 197,740 25,758 Excess [deficiency] of revenues over [under] expenditures ---- Unreserved fund balance, January 1 234 234 234 - Unreserved fund balance/GAAP fund balance December 31 234$ 234$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes 350,004$ 338,228$ 338,228$ 11,776$ Miscellaneous 1,833 2,000 2,000 [167] Total revenues 351,837 340,228 340,228 11,609 Expenditures Capital outlay 344,714 375,000 375,000 30,286 Total expenditures 344,714 375,000 375,000 30,286 Excess [deficiency] of revenues over [under] expenditures 7,123 [34,772] [34,772] 41,895 Unreserved fund balance, January 1 708,563 708,563 708,563 - Unreserved fund balance/GAAP fund balance December 31 715,686$ 673,791$ 673,791$ 41,895$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 27,328$ 320,400$ 320,400$ [293,072]$ Miscellaneous -78,000 78,000 [78,000] Total revenues 27,328 398,400 398,400 [371,072] Expenditures Culture and recreation 494,026 1,064,364 1,064,364 570,338 Total expenditures 494,026 1,064,364 1,064,364 570,338 Excess [deficiency] of revenues over [under] expenditures [466,698][665,964][665,964]199,266 Other financing sources [uses] Transfers in 517,000 645,500 645,500 [128,500] Total other financing sources [uses]517,000 645,500 645,500 [128,500] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]50,302 [20,464] [20,464] 70,766 Unreserved fund balance, January 1 49,764 49,764 49,764 - Unreserved fund balance/GAAP fund balance December 31 100,066$ 29,300$ 29,300$ 70,766$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Taxes Real estate taxes 3,010,914$ 3,337,038$ 3,337,038$ [326,124]$ Delinquent taxes 47,317 55,000 55,000 [7,683] Motor vehicle taxes 325,274 314,918 314,918 10,356 Special assessments 1,511,279 1,546,000 1,546,000 [34,721] Miscellaneous - 1,744,792 1,744,792 [1,744,792] Total revenues 4,894,784 6,997,748 6,997,748 [2,102,964] Expenditures Debt Service Principal retirement 5,163,995 3,196,000 3,196,000 [1,967,995] Interest and other charges 1,937,284 1,327,000 1,327,000 [610,284] Special assessments - 1,437,000 1,437,000 1,437,000 Miscellaneous 53,301 - - [53,301] Total expenditures 7,154,580 5,960,000 5,960,000 [1,194,580] Excess [deficiency] of revenues over [under] expenditures [2,259,796] 1,037,748 1,037,748 [3,297,544] Other financing sources [uses] Transfers in 1,629,188 2,000,000 2,000,000 [370,812] Bond proceeds 1,206,882 - - 1,206,882 Total other financing sources [uses]2,836,070 2,000,000 2,000,000 836,070 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]576,274 3,037,748 3,037,748 [2,461,474] Unreserved fund balance, January 1 1,089,325 1,089,325 1,089,325 - Unreserved fund balance, December 31 1,665,599 4,127,073$ 4,127,073$ [2,461,474]$ Reconciliation to GAAP Taxes receivable 3,121,345 Deferred revenue [3,062,827] GAAP Fund Balance, December 31 1,724,117$ Budgeted Amounts See independent auditor's report on the financial statements. 91 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 3,289,574$ 3,450,000$ 3,450,000$ [160,426]$ Miscellaneous 32,720 --32,720 Total revenues 3,322,294 3,450,000 3,450,000 [127,706] Expenditures Public works 2,520,556 3,109,733 3,109,733 589,177 Total expenditures 2,520,556 3,109,733 3,109,733 589,177 Excess [deficiency] of revenues over [under] expenditures 801,738 340,267 340,267 461,471 Other financing sources [uses] Transfers [out][659,200][417,350] [417,350][241,850] Total other financing sources [uses][659,200][417,350] [417,350][241,850] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]142,538 [77,083] [77,083]219,621 Unreserved fund balance, January 1 4,448,687 4,512,595 4,512,595 [63,908] Unreserved fund balance, December 31 4,591,225$ 4,435,512$ 4,435,512$ 155,713$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 20,071,807$ 21,976,800$ 21,976,800$ [1,904,993]$ Investment revenue - 90,000 90,000 [90,000] Miscellaneous 8,714 5,000 5,000 3,714 Total revenues 20,080,521 22,071,800 22,071,800 [1,991,279] Expenditures Public works 10,463,369 17,112,294 17,112,294 6,648,925 Total expenditures 10,463,369 17,112,294 17,112,294 6,648,925 Excess [deficiency] of revenues over [under] expenditures 9,617,152 4,959,506 4,959,506 4,657,646 Other financing sources [uses] Transfers [out][6,576,717] [3,889,750] [3,889,750] [2,686,967] Total other financing sources [uses][6,576,717] [3,889,750] [3,889,750] [2,686,967] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]3,040,435 1,069,756 1,069,756 1,970,679 Unreserved fund balances, January 1 13,642,411 12,603,880 12,603,880 1,038,531 Unreserved fund balances, December 31 16,682,846$ 13,673,636$ 13,673,636$ 3,009,210$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 3,292,501$ -$3,450,000$ [157,499]$ Miscellaneous 49 -- 49 Total revenues 3,292,550 -3,450,000 [157,450] Expenditures Public works 2,371,205 -3,356,138 984,933 Total expenditures 2,371,205 -3,356,138 984,933 Excess [deficiency] of revenues over [under] expenditures 921,345 -93,862 827,483 Other financing sources [uses] Transfers [out][497,350]-[417,350][80,000] Total other financing sources [uses][497,350]-[417,350][80,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]423,995 -[323,488]747,483 Unreserved fund balance, January 1 1,725,597 -1,373,911 351,686 Unreserved fund balances, December 31 2,149,592$ -$1,050,423$ 1,099,169$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 581,233$ 928,400$ 928,400$ [347,167]$ Investment revenue -350 350 [350] Miscellaneous 101,149 --101,149 Total revenues 682,382 928,750 928,750 [246,368] Expenditures Recreation 756,004 916,971 916,971 160,967 Total expenditures 756,004 916,971 916,971 160,967 Excess [deficiency] of revenues over [under] expenditures [73,622]11,779 11,779 [85,401] Other financing sources [uses] Transfers in 100,000 --100,000 Total other financing sources [uses]100,000 --100,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]26,378 11,779 11,779 14,599 Unreserved fund balance, January 1 21,709 21,709 21,709 - Unreserved fund balances, December 31 48,087$ 33,488$ 33,488$ 14,599$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 449,926$ 449,926$ 449,926$ -$ Investment revenue -2,500 2,500 [2,500] Miscellaneous -3,000 3,000 [3,000] Total revenues 449,926 455,426 455,426 [5,500] Expenditures General government 370,837 430,418 430,418 59,581 Total expenditures 370,837 430,418 430,418 59,581 Excess [deficiency] of revenues over [under] expenditures 79,089 25,008 25,008 54,081 Unreserved fund balance, January 1 1,062,930 933,944 933,944 128,986 Unreserved fund balances, December 31 1,142,019$ 958,952$ 958,952$ 183,067$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 6,535,830$ 7,523,584$ 7,523,584$ [987,754]$ Investment revenue -5,000 5,000 [5,000] Miscellaneous 36,427 25,000 25,000 11,427 Total revenues 6,572,257 7,553,584 7,553,584 [981,327] Expenditures General government 5,544,560 6,820,010 6,820,010 1,275,450 Total expenditures 5,544,560 6,820,010 6,820,010 1,275,450 Excess [deficiency] of revenues over [under] expenditures 1,027,697 733,574 733,574 294,123 Unreserved fund balance, January 1 2,188,453 2,188,453 2,188,453 - Unreserved fund balances, December 31 3,216,150$ 2,922,027$ 2,922,027$ 294,123$ 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, 2020 Variance with Final Budget Positive Actual Original Final [Negative] Revenues Charges for services 1,267,477$ 1,498,644$ 1,498,644$ [231,167]$ Investment revenue -40 40 [40] Miscellaneous 5,753 2,500 2,500 3,253 Total revenues 1,273,230 1,501,184 1,501,184 [227,954] Expenditures General government 1,194,150 1,546,186 1,546,186 352,036 Total expenditures 1,194,150 1,546,186 1,546,186 352,036 Excess [deficiency] of revenues over [under] expenditures 79,080 [45,002][45,002]124,082 Other financing sources [uses] Transfers in 80,000 80,000 80,000 - Total other financing sources [uses]80,000 80,000 80,000 - Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses]159,080 34,998 34,998 124,082 Unreserved fund balance, January 1 154,658 154,658 154,658 - Unreserved fund balance, December 31 313,738$ 189,656$ 189,656$ 124,082$ 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 1,142,019$ 3,216,251$359,389$4,717,659$ Inventory and prepaid supplies --101,219 101,219 Total current assets 1,142,019 3,216,251 460,608 4,818,878 Capital assets: Capital assets --168,234 168,234 Less: accumulated depreciation --153,963 153,963 Total capital assets --14,271 14,271 Total assets 1,142,019 3,216,251 474,879 4,833,149 Deferred outflows of resources: KPERS OPEB deferred outflows of resources --2,507 2,507 Pension deferred outflows of resources --47,470 47,470 Total deferred outflows of resources --49,977 49,977 Total assets and deferred outflows of resources 1,142,019$ 3,216,251$524,856$4,883,126$ Liabilities: Current liabilities (payable from current assets): Accounts payable -$100$ 45,650$ 45,750$ Current portion of compensated absences payable --13,919 13,919 Current portion of accrued claims payable 183,446 605,000 -788,446 Total current liabilities (payable from current assets)183,446 605,100 59,569 848,115 Noncurrent liabilities: Compensated absences payable --16,382 16,382 Accrued claims payable 263,049 --263,049 Net KPERS OPEB obligation --8,723 8,723 Net pension liability --187,907 187,907 Total noncurrent liabilities 263,049 -213,012 476,061 Total liabilities 446,495 605,100 272,581 1,324,176 Deferred inflows of resources KPERS OPEB deferred inflows of resources --1,251 1,251 Pension deferred inflows of resources --8,395 8,395 Total deferred inflows of resources --9,646 9,646 Total liabilities and deferred inflows of resources 446,495$ 605,100$ 282,227$1,333,822$ Net Position Invested in capital assets, net of related debt -$-$14,271$ 14,271$ Unrestricted 695,524 2,611,151 228,358 3,535,033 Total net position 695,524$ 2,611,151$242,629$3,549,304$ CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2020 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 449,926$ 6,535,830$ 1,267,477$ 8,253,233$ Miscellaneous -36,427 5,752 42,179 Total operating revenues 449,926 6,572,257 1,273,229 8,295,412 Operating expenses General government 505,760 5,660,142 1,225,572 7,391,474 Depreciation --362 362 Total operating expenses 505,760 5,660,142 1,225,934 7,391,836 Operating income [loss][55,834] 912,115 47,295 903,576 Nonoperating revenues [expenses] Investment revenue - - - - Total other operating revenues [expenses]- - - - Income [loss] before transfers [55,834] 912,115 47,295 903,576 Transfers from [to] other funds Transfers in - - 80,000 80,000 Total transfers --80,000 80,000 Change in net position [55,834] 912,115 127,295 983,576 Net position, January 1 751,358 1,699,036 115,334 2,565,728 Net position, December 31 695,524$ 2,611,151$ 242,629$ 3,549,304$ COMBINING STATEMENT OF REVENUES, EXPENSES INTERNAL SERVICE FUND CITY OF SALINA, KANSAS For the Year Ended December 31, 2020 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 584,849$ 6,651,412$1,267,477$8,503,738$ Cash paid to suppliers of goods or services [506,685] [5,660,042] [919,219] [7,085,946] Cash paid to employees --[274,765] [274,765] Other operating receipts -36,427 5,752 42,179 Net cash provided by [used in] operating activities 78,164 1,027,797 79,245 1,185,206 Cash flows from investing activities Interest received ---- Cash flows from noncapital financing activities Transfers in --80,000 80,000 Net cash provided by [used in] noncapital financing activities --80,000 80,000 Net increase [decrease] in cash and cash equivalents 78,164 1,027,797 159,245 1,265,206 Cash and cash equivalents, January 1 1,063,855 2,188,454 200,144 3,452,453 Cash and cash equivalents, December 31 1,142,019$ 3,216,251$359,389$ 4,717,659$ For the Year Ended December 31, 2020 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS See independent auditor's report on the financial statements. 102 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][55,834]$ 912,115$ 47,295$ 903,576$ Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense --362 362 [Increase] decrease in inventory --26,673 26,673 [Increase] decrease in deferred outflows --[24,376] [24,376] Increase [decrease] in accounts payable [925]100 165 [660] Increase [decrease] in accrued compensated absences --[1,145] [1,145] Increase [decrease] in net pension liability --31,639 31,639 Increase [decrease] in KPERS OPEB liability --[1,405] [1,405] Increase [decrease] in claims payable 134,923 115,582 -250,505 Increase [decrease] in deferred inflows --37 37 Net cash provided by [used in] operating activities 78,164$ 1,027,797$ 79,245$ 1,185,206$ For the Year Ended December 31, 2020 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS (Continued) COMBINING STATEMENT OF CASH FLOWS See independent auditor's report on the financial statements. 103 STATISTICAL SECTION 2011 2012 2013 2014 2015 2016 2017 2018 Amount %Amount %Amount %Amount %Amount %Amount %Amount %Amount %Amount %Amount % Governmental activities Net investment in capital assets 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%143,559$ 100% Restricted 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%2,267 2% Unrestricted 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%(1,744) -1% Total governmental activities net position 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%144,081$ 100% Business-type activities Net investment in capital assets 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%63,742$ 66% Restricted 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%1,175 1% Unrestricted 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%31,692 33% Total business-type activities net position 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%96,610$ 100% Primary government Net investment in capital assets 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%207,301$ 86% Restricted 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%3,442 1% Unrestricted 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%29,948 12% Total primary government net position 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%240,691$ 100% Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 20202019 Fiscal Year Schedule 1 City of Salina, Kansas Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (in 000's) 104 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Expenses Governmental activities: General government 13,614$ 11,278$ 10,978$ 12,175$ 10,743$ 9,188$ 9,780$ 12,013$ 10,866$ 10,395$ Public safety 18,579 19,066 19,649 20,208 21,084 22,232 23,120 23,892 25,358 24,672 Public works 9,858 10,957 11,064 11,401 9,049 9,773 10,345 10,458 10,529 10,511 Public health and sanitation 1,368 1,383 1,369 347 995 1,095 1,126 1,256 1,156 1,323 Culture and recreation 6,693 5,338 4,809 5,156 6,517 6,612 6,880 7,040 6,879 5,034 Planning and development 3,450 3,362 3,399 3,236 1,915 2,047 1,835 2,369 2,522 2,004 Interest on long term debt 1,650 1,914 1,953 1,817 1,774 2,971 1,725 2,117 2,169 2,350 Total governmental activities expenses 55,212 53,298 53,221 54,340 52,077 53,918 54,811 59,145 59,479 56,288 Business-type activities: Solid waste disposal 2,945 2,067 3,532 1,867 1,766 2,335 2,365 2,382 2,871 2,056 Water and sewer 13,597 14,897 15,418 14,938 11,712 14,807 15,650 15,190 14,551 13,386 Sanitation 2,261 2,441 2,237 2,399 1,909 2,043 2,178 2,419 2,313 2,526 Golf course 825 723 768 837 821 792 852 926 888 805 Total business-type activities expenses 19,628 20,128 21,955 20,041 16,208 19,977 21,045 20,917 20,623 18,773 Total primary government expenses 74,840$ 73,426$ 75,176$ 74,381$ 68,285$ 73,895$ 75,856$ 80,062$ 80,102$ 75,061$ Program Revenues Governmental activities: Charges for services General government 6,106$ 6,328$ 5,548$ 5,662$ 3,151$ 3,134$ 3,470$ 3,569$ 3,401$ 3,339$ Public safety 3,766 4,290 4,656 4,222 4,600 4,891 4,601 4,815 4,357 4,325 Public works 262 306 277 255 193 238 348 285 309 294 Public health and sanitation 43 46 34 46 46 44 50 47 46 49 Culture and recreation 3,140 1,728 1,466 1,533 1,501 1,638 1,541 1,545 1,514 279 Planning and development 153 158 161 167 73 140 91 150 104 113 Operating grants and contibutions 2,907 4,495 4,200 4,015 3,394 4,332 4,541 4,299 4,540 4,714 Capital grants and contributions - - - - -733 - - - - Total governmental activities program revenues 16,377 17,351 16,342 15,900 12,958 15,150 14,642 14,710 14,271 13,115 Business-type activities: Charges for services Solid waste disposal 2,904 3,137 3,138 3,024 2,519 2,795 3,165 3,097 3,082 3,290 Water and sewer 17,904 19,099 17,938 18,742 19,059 19,322 19,855 20,202 20,510 19,449 Sanitation 2,334 2,462 2,514 2,553 2,529 2,751 2,885 3,006 3,325 3,194 Golf course 636 783 719 811 820 789 798 756 810 581 Operating grants and contributions 202 - - - - - - - - - Capital grants and contributions 3,804 274 -115 ---- -- Total business-type activities program revenues 27,784 25,755 24,309 25,245 24,927 25,657 26,703 27,061 27,727 26,513 Total primary government program revenues 44,161$ 43,106$ 40,651$ 41,145$ 37,885$ 40,807$ 41,345$ 41,771$ 41,998$ 39,628$ Net (Expense) Revenue Governmental activities (38,835)$ (35,947)$ (36,879)$ (38,440)$ (39,119)$ (38,768)$ (40,169)$ (39,800)$(45,208)$(43,173)$ Business-type activities 8,156 5,627 2,354 5,204 8,719 5,680 5,658 6,143 7,103 7,740 Total primary government net expense (30,679)$ (30,320)$ (34,525)$ (33,236)$ (30,400)$ (33,088)$ (34,511)$ (33,657)$(38,105)$(35,433)$ General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes, general purpose 7,783$ 8,272$ 8,031$ 8,315$ 8,242$ 8,196$ 9,101$ 8,623$ 9,708$ 10,308$ Property taxes, debt service 2,779 2,439 2,362 2,578 2,766 3,022 2,487 2,457 2,664 3,058 Motor vehicle taxes 1,150 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 1,520 Sales tax, general purpose 11,767 12,165 12,260 12,689 12,931 12,781 12,906 13,292 13,419 13,697 Selective sales tax 4,080 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 9,751 Other taxes 6,390 6,486 6,630 7,231 7,363 7,991 6,900 7,241 6,975 6,117 Investment revenues 77 66 67 98 86 148 92 183 670 286 Miscellaneous 872 660 9,918 1,160 2,371 5,842 2,003 1,062 1,168 8,328 Transfers, net 199 30 999 787 3,819 3,600 4,309 4,831 4,781 5,133 Total governmental activities 35,097 35,481 45,748 38,569 43,448 47,851 48,002 48,034 50,111 58,199 Business-type activities: Investment revenues 84 79 49 51 56 78 129 233 -4 Miscellaneous 330 434 279 97 - - 103 153 846 446 Reimbursements 180 132 79 - Transfers, net (199)(30)(950)-(3,781) (3,581) (4,367) (4,831) (4,781) (5,133) Total business-type activities 215 483 (622)328 (3,593) (3,424) (4,135) (4,445) (3,935) (4,682) Total primary government 35,312$ 35,964$ 45,126$ 38,897$ 39,855$ 44,427$ 43,867$ 43,589$ 46,176$ 53,517$ Change in Net Position Governmental activities (3,738)$ (466)$ 8,869$ 129$ 4,329$ 9,083$ 7,833$ 8,233 4,902 15,026 Business-type activities 8,371 6,110 1,732 5,532 5,126 2,256 1,523 1,698 3,169 3,058 Total primary government 4,633$ 5,644$ 10,601$ 5,661$ 9,455$ 11,339$ 9,356$ 9,931$ 8,071$ 18,084$ Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 Fiscal Year Schedule 2 City of Salina, Kansas Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (in 000's) 105 2012 2013 2014 2015 2016 2017 2018 2019 2020 (Note 2) General Fund Nonspendable 90$ 116$ 81$ 107$ 111$ 131$ 153$ 152$ 212$ 184$ Restricted - - - - - - - - - - Committed - - - - - - - - - - Assigned 293 540 331 239 199 136 214 340 274 244 Unreserved/unassigned 3,454 3,172 3,138 3,908 4,530 4,765 6,516 6,251 8,821 14,714 Total general fund 3,837$ 3,828$ 3,550$ 4,254$ 4,840$ 5,032$ 6,883$ 6,743$ 9,307$ 15,142$ Restatement Restated fund balance All other governmental funds Nonspendable -$ -$-$-$-$-$-$-$-$-$ Restricted 3,611 3,319 3,446 2,910 2,793 3,142 4,191 4,648 5,224 4,980 Committed 127 (516)7,486 9,886 8,695 14,284 10,072 7,325 8,086 13,225 Assigned 4,323 4,087 3,146 1,280 619 1,043 641 1,227 963 1,965 Unreserved/unassigned - - - - (10,537) (6,823) (28)(852)(7,804) (4,028) Total all other governmental funds 8,061$ 6,890$ 14,078$ 14,076$ 1,570$ 11,646$ 14,876$ 12,348$ 6,469$ 16,143$ Note 1: Prior year amounts have not been restated for the implementation of GASB Statement 54 in fiscal year 2011. Note 2: Committed fund balance increased due to changes from the implementation of GASB Statement 84 in fiscal year 2020. Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 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) 106 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Revenues Taxes (see Schedule 5)33,949$ 34,724$ 34,764$ 36,523$ 37,171$ 38,261$ 41,597$ 41,958$ 43,492$ 44,452$ Intergovernmental 2,901 4,487 4,192 4,008 3,385 4,325 4,536 4,297 4,573 5,317 Special assessments 1,535 2,315 1,706 1,810 1,679 1,669 1,539 1,546 1,596 1,511 Licenses and permits 6 8 9 7 10 7 6 3 4 5 Charges for services 9,730 8,484 8,536 8,276 6,416 6,953 6,880 7,338 6,804 5,557 Investment revenue 69 47 40 59 47 142 79 157 670 286 Reimbursements 32 36 9,015 123 491 1,406 - - - - Donations 241 83 141 111 238 90 129 Miscellaneous 599 537 810 799 1,853 4,315 1,851 884 1,545 5,656 Total revenues 48,821 50,638 59,072 51,846 51,135 57,219 56,599 56,421 58,774 62,913 Expenditures General government 3,461 3,574 4,269 3,986 5,342 5,422 5,423 5,649 4,582 5,506 Public safety 18,118 18,564 19,155 19,559 21,268 21,664 21,629 22,953 23,692 22,435 Public works 6,569 7,004 7,220 7,443 5,333 5,778 6,048 6,162 6,136 6,082 Public health and sanitation 1,330 1,343 1,344 319 982 1,078 1,097 1,236 1,121 1,280 Culture and recreation 5,900 4,449 3,939 4,292 5,659 5,817 6,143 6,255 6,047 4,245 Planning and development 3,344 3,256 3,293 3,232 1,910 2,042 1,801 2,185 2,311 1,794 Miscellaneous - - - - - - - - - 1,354 Capital outlay 9,847 7,327 13,047 11,009 25,527 24,001 18,281 16,344 21,913 12,041 Debt service Principal 4,411 8,592 5,038 5,261 6,250 17,902 5,088 14,243 10,324 5,164 Interest 2,084 2,103 1,867 1,864 1,833 3,152 1,771 2,192 2,136 2,366 Deposit to escrow - 92 - - - - - - - - Total expenditures 55,064 56,304 59,172 56,965 74,104 86,856 67,281 77,219 78,262 62,267 Other financing sources (uses) Bonds and notes issued 6,565 6,150 5,690 5,365 6,825 34,892 11,490 8,090 11,090 8,720 Bond and note premium 23 60 185 302 369 1,503 95 70 443 468 Transfers in 7,994 3,488 4,907 3,001 7,642 7,065 8,339 13,462 9,714 9,323 Transfers out (5,692) (3,458) (3,907) (2,999) (3,913) (3,555) (4,160) (4,186) (5,073) (4,271) Issuance costs - - - - - - - - - Other 156 - - - - - - - - - Total other financing sources (uses)9,046 6,240 6,875 5,669 10,923 39,905 15,764 17,436 16,174 14,241 Net change in fund balance 2,803$ 574$ 6,775$ 550$ (12,046)$ 10,268$ 5,082$ (3,362)$ (3,314)$ 14,887$ Debt service as a percentage of non-capital expenditures 17%28%18%18%20%50%16%37%28%18% Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 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 107 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Real estate 10,288$ 10,466$ 10,145$ 10,657$ 10,729$ 10,972$ 11,377$ 10,804$ 12,182$ 13,150$ Delinquent 274 245 248 235 279 246 210 276 190 216 Motor vehicle 1,150 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 1,520 General sales 11,767 12,165 12,260 12,689 12,931 12,781 12,906 13,293 13,419 13,697 Selective sales 4,080 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 9,751 Other taxes 6,390 6,485 6,630 7,231 7,362 7,991 6,900 7,240 6,975 6,117 Total taxes 33,949$ 34,724$ 34,764$ 36,523$ 37,171$ 38,261$ 41,597$ 41,958$ 43,492$ 44,452$ Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 Last Ten Fiscal Years (modified accrual basis of accounting) (in 000's) Fiscal Year City of Salina, Kansas Schedule 5 Tax Revenues by Source, Governmental Funds 108 Fiscal (Budget) Year Real Estate Personal Property State Assessed Total, Excluding Motor Vehicles Tax Rate Motor Vehicle (Note 1) Total, Taxable Assessed Value Estimated Total Market Value (Note 2) Ratio of Assessed Value to Est. Market Value 2011 367,750,803$ 19,918,188$ 14,685,585$ 402,354,576$ 26.022 50,330,252$ 452,684,828$ 2,884,188,981$15.70 2012 369,416,422$ 18,654,394$ 15,779,466$ 403,850,282$ 26.272 47,553,744$ 451,404,026$ 2,889,385,914$15.62 2013 370,390,092$ 17,769,120$ 16,948,264$ 405,107,476$ 26.927 48,882,411$ 453,989,887$ 2,917,267,724$15.56 2014 376,131,346$ 13,652,885$ 17,670,147$ 407,454,378$ 27.080 48,865,900$ 456,320,278$ 2,957,531,741$15.43 2015 381,087,426$ 12,607,815$ 18,984,453$ 412,679,694$ 27.311 50,350,566$ 463,030,260$ 2,957,531,741$15.66 2016 389,872,825$ 11,653,719$ 19,323,055$ 420,849,599$ 27.603 51,833,505$ 472,683,104$ 2,964,464,111$15.94 2017 399,918,216$ 10,900,308$ 19,671,685$ 430,490,209$ 26.129 50,970,796$ 481,461,005$ 3,097,885,103$15.54 2018 403,835,383$ 10,130,718$ 20,485,144$ 434,451,245$ 28.394 53,336,677$ 487,787,922$ 3,150,409,123$15.48 2019 421,108,311$ 11,245,813$ 22,113,195$ 454,467,319$ 29.720 54,687,311$ 509,154,630$ 3,294,115,685$15.46 2020 423,573,121$ 9,353,057$ 23,436,340$ 456,362,518$ 30.650 54,589,132$ 510,951,650$ 3,326,521,997$15.36 Note 1: The tax rate for motor vehicles is set based on the average countywide tax rate. The City of Salina then receives a share of that based on tax effort. Note 3: The Direct rate is expressed in dollars per thousand dollars of assessed value. Source: Saline County Clerk Schedule 6 City of Salina, Kansas Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Note 2: The estimated market value excludes the value of the State assessed properties. Market value information is not available for those properties. However, state assessed property is generally assessed at 33% of market value, except for railroads, which are assessed at 15% of market value. Assessed Value 109 City of Salina Saline County USD 305 (2)Other (1) Fiscal (Budget) Year Operating Millage Debt Service Millage Total City Millage Operating Millage Debt Service Millage Total County Millage Operating Millage Debt Service Millage Total USD Millage Other 2011 19.236 6.786 26.022 31.432 31.432 45.818 13.095 58.913 12.131 128.498 2012 20.326 5.946 26.272 32.576 32.576 47.127 11.693 58.820 11.989 129.657 2013 20.242 5.948 26.190 34.823 34.823 47.133 11.516 58.649 12.135 131.797 2014 20.539 6.388 26.927 37.895 37.895 46.599 11.517 58.116 12.941 135.879 2015 20.692 6.388 27.080 38.047 38.047 44.088 11.517 55.605 13.305 134.037 2016 19.950 7.361 27.311 38.275 38.275 44.465 11.655 56.120 13.293 134.999 2017 21.694 5.909 27.603 37.508 37.508 44.069 11.674 55.743 13.299 134.153 2018 20.339 5.790 26.129 37.321 37.321 45.130 11.371 56.501 13.189 133.140 2019 22.285 6.109 28.394 38.437 38.437 46.776 10.746 57.522 13.988 138.341 2020 22.908 6.812 29.720 41.097 41.097 44.761 10.747 55.508 13.983 140.308 Source: 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 by these jurisdictions. Schedule 7 City of Salina, Kansas Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) (1) The "Other" column includes the State of Kansas, the Salina Airport Authority, the Salina Public Library and Kansas State Extension District #3. Total 110 Taxpayer Type of Business Assessed Valuation % of Total Valuation Rank Assessed Valuation % of Total Valuation Rank Evergy (Westar Energy (Western Resources)Utility 5,575,032$ 1.39%4 13,682,027$ #DIV/0!1 SFC Global Supply Chain, Inc. (Schwan's)Pizza Manufacturing 8,589,167 2.15%1 6,855,966 #DIV/0!2 Kansas Gas Service Utility 3,622,225 0.90%7 4,415,353 #DIV/0!3 RAF Salina LLC Retail Shopping Mall 6,254,013 1.56%2 4,296,499 #DIV/0!4 S&B Motels Motel -N/A 3,774,927 #DIV/0!5 Central Mall Realty Holding LLC Regional Shopping Center 3,587,574 N/A 2,868,321 #DIV/0!6 Union Pacific Railroad 0.00%N/A 2,570,668 #DIV/0!7 Menard Inc.Home Improvement N/A 2,465,098 #DIV/0!8 Individual Residential 2,247,083 N/A 2,440,724 #DIV/0!9 Sams Real Estate Business Trust/Walmart Discount Retail Stores N/A 2,286,508 #DIV/0!10 Wal-mart Real Estate Business Trust Discount Retail Stores 3,468,733 0.87%5 Great Plains Manufacturing Manufacturing 2,879,602 0.72%10 Gateway Properties Shopping Mall (Midstate)-0.00%6 Southwestern Bell Telephone Utility 3,107,097 0.78%8 Sunflower Bank Banking Institution -0.00%9 Salina Regional Health Center Hospital and Medical Offices 5,589,420 1.40%3 Combined Valuation of the Ten Largest Taxpayers 44,919,946$ 45,656,091$ City Valuation 400,248,283$ -$ Percent of Total City Assessed Valuation 11.22%#DIV/0! Source: Saline County Clerk's Office or recent OS Schedule 8 City of Salina, Kansas Principal Property Taxpayers Current Year and Ten Years Ago 2020 (2019 Assessed Value)2011 (2010 Assessed Value) 111 Fiscal (Budget) Year Taxes Levied for the fiscal year Amount Percentage Delinquent Collections (1)Amount Percentage of levy 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$100.8% 2013 10,550,730$ 10,145,404$ 96.2% 354,845$ 10,500,249$99.5% 2014 10,868,225$ 10,776,688$ 99.2% 62,432$ 10,839,120$99.7% 2015 10,991,959$ 10,460,246$ 95.2% 372,726$ 10,832,972$98.6% 2016 11,209,245$ 10,984,630$ 98.0% 184,970$ 11,169,600$99.6% 2017 11,564,876$ 11,320,197$ 97.9% 203,904$ 11,524,101$99.6% 2018 11,248,278$ 10,938,457$ 97.2% 276,340$ 11,214,797$99.7% 2019 12,335,808$ 12,097,740$ 98.1% 189,587$ 12,287,327$99.6% 2020 13,506,590$ 13,203,183$ 97.8% 216,358$ 13,419,541$99.4% 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 112 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 City Direct Tax Rate General 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%0.75%0.75%0.75%0.75% County-wide Tax Rate 1.00%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)63.34%61.72%60.86%60.23%60.28%60.28%60.28%59.85%60.33%60.17% In May, 2016, the voters approved an increase in the Special Purpose Tax rate from .40% to .75%, to be effective October 1, 2016. Source: Kansas Department of Revenue In addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. Schedule 10 City of Salina, Kansas Direct Sales Rate by Taxing Entity Last Ten Fiscal Years Fiscal Year 113 # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts Water # Accts WaterRate Class Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Billed Sold Residential 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 18,238 965,782 Commercial 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 1,612 319,080 Industrial 42 174,595 40 182,529 42 193,233 44 202,407 44 191,236 44 193,503 44 211,843 44 196,229 43 164,766 Government 99 54,618 99 46,484 97 45,346 97 41,928 99 45,136 99 41,552 98 35,932 97 41,911 94 28,200 Apartment 169 70,263 168 67,155 166 60,865 164 61,400 163 57,039 163 58,378 157 71,559 157 62,127 156 58,651 Schools 81 57,027 84 44,187 84 45,328 85 45,545 85 41,176 83 36,039 81 30,810 79 31,839 78 24,518 Industrial special 1 40,448 1 20,439 - - - - - - - - - - - - - - Consumed in production 12 19,266 12 18,665 12 19,264 12 17,338 9 9,580 8 9,652 7 6,966 7 6,974 7 4,109 Rural water 1 25,930 1 21,530 1 22,993 1 21,915 1 23,384 1 25,624 1 22,345 1 21,663 1 31,776 Hospitals 10 17,896 9 26,482 10 32,184 9 31,858 9 33,728 9 35,132 9 31,856 9 29,892 9 29,483 Religious/non profit 38 5,399 37 4,810 37 4,973 37 4,986 36 5,224 36 4,749 36 4,458 35 2,780 35 2,215 Other taxable deductions - - - - - - - - - - - - - - - - - - Engineering studies 8 6,104 8 6,822 8 5,095 8 4,807 7 4,573 7 4,772 7 4,471 7 3,835 6 2,553 Providing taxable service 2 6,118 2 3,495 1 3,561 1 3,167 1 3,921 1 3,347 1 2,331 1 2,676 1 1,909 Sale of component parts 8 5,726 6 5,972 6 6,850 5 3,900 4 3,129 4 2,917 4 2,190 4 1,542 4 1,310 Fire hydrant 4 2,533 3 1,922 2 1,474 - - 3 1,727 3 1,790 3 2,829 3 1,180 3 2,106 Industrial consumed in production 3 3,543 3 4,417 3 3,588 3 2,388 3 1,930 3 1,962 3 2,107 3 2,219 3 1,946 Sales of farm equipment 1 83 1 107 1 48 1 53 1 54 1 104 1 56 1 124 1 109 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 20,291 1,638,511 Water Rate Schedule: Monthly meter charge (5/8")$4.74 $4.88 $5.03 $5.20 $5.36 $5.52 $5.74 $5.94 $6.15 Commodity charge (per 000 gal.):0 - 2000 gal.$3.88 $4.04 $4.24 $4.45 $4.48 $4.77 $4.96 $5.13 $5.31 2001 - 10,000 gal Over 10,000 gal.Excess use charge $7.76 $8.08 $8.48 $8.90 $9.16 $9.54 $9.92 $10.26 $10.62 Wastewater Rate Schedule: Monthly base charge $6.77 $6.97 $7.11 $7.22 $7.36 $7.51 $7.81 $8.08 $8.36 Unit cost (per 000 gal.):$4.61 $4.79 $4.94 $5.01 $5.19 $5.29 $5.51 $5.70 $5.90 Water sold is expressed in thousands of gallons. Number of Accounts billed is the annual number of billings for each class divided by 12. Monthly meter charge increases with the size of the meter. Residential Wastewater is calculated based on Winter Quarter water consumption. Other accounts are based on monthly water consumption. 2008 Water Consumption Rate Structure changed from a decreasing tier structure to one rate and Excess Use Charge which is double the consumption rate Source: City of Salina Water Customer Accounting Office. 20142013 20152012 Schedule 11 City of Salina, Kansas 202020192018 Water Sales by Class of Customer Last Ten Fiscal Years 20172016 114 Fiscal Year General Obligation Bonds Loans Payable Capital Lease Temporary Notes General Obligation Bonds Water Revenue Bonds Loans Payable Temporary Notes Total Primary Government Percentage of Personal Income 2011 55,225,670$-$ -$ 3,400,000$ 7,417,907$ 16,193,925$-$ -$ 82,237,502$ 4.3% 2012 49,109,575$-$ -$ 1,485,000$ 9,613,926$ 15,850,228$-$ -$ 76,058,729$ 3.8% 2013 49,631,797$-$ -$ 3,800,000$ 8,519,799$ 15,226,532$-$ -$ 77,178,128$ 3.7% 2014 50,033,555$-$ 176,235$ 5,000,000$ 9,587,351$ 14,592,836$6,208,102$ -$ 85,598,079$ 4.1% 2015 50,840,632$-$ 479,366$ 5,995,000$ 8,539,773$ 13,949,139$5,753,620$ -$ 85,557,530$ 4.1% 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% 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% 2018 51,968,310$12,185,053$ -$ 18,123,505$ 5,282,578$ 11,898,051$10,632,351$ -$ 110,089,848$ 4.9% 2019 54,607,702$12,640,000$ -$ 11,170,000$ 4,102,298$ 10,330,000$46,354,852$ -$ 139,204,852$ 6.0% 2020 56,587,549$12,640,000$ -$ 7,050,000$ 8,742,451$ 9,615,000$ 35,926,029$ -$ 130,561,029$ 5.5% Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 Governmental Activities Business-Type Activities Schedule 12 City of Salina, Kansas Ratio of Outstanding Debt by Type Last Ten Fiscal Years 115 Fiscal Year General Obligation Bonds Capital Lease Temporary Notes Total Less: Debt Service Fund Net General Bonded Debt Percentage of Actual Taxable Value of Per Capita 2011 62,443,577$3,400,000$ 65,843,577$1,236,026$ 64,607,551$14.3%1,354.26$ 2012 58,723,501$-$1,485,000$ 60,208,501$582,412$ 59,626,089$13.1%1,241.05$ 2013 58,151,596$-$3,800,000$ 61,951,596$707,763$ 61,243,833$13.4%1,280.02$ 2014 59,620,906$176,235$ 5,000,000$ 64,797,141$407,864$ 64,389,277$13.9%1,345.17$ 2015 59,380,405$479,366$ 5,995,000$ 65,854,771$745,339$ 65,109,432$13.8%1,361.75$ 2016 59,456,780$321,174$ 11,505,000$71,282,954$1,248,914$ 70,034,040$14.5%1,479.51$ 2017 62,514,738$157,868$ 6,811,742$ 69,484,348$1,509,863$ 67,974,485$13.9%1,446.45$ 2018 57,250,888$-$18,123,505$75,374,393$1,851,358$ 73,523,035$14.4%1,564.52$ 2019 58,710,000$-$11,170,000$69,880,000$1,142,418$ 68,737,582$13.5%1,471.39$ 2020 65,330,000$-$7,050,000$ 72,380,000$1,724,117$ 70,655,883$#DIV/0!1,517.85$ Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 General Bonded Debt Outstanding Schedule 13 City of Salina, Kansas Ratio of Net General Bonded Debt Outstanding Last Ten Fiscal Years 116 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 70,655,883$ 100.00%70,655,883$ Overlapping: Salina Airport Authority 20,175,000 100.00%20,175,000 Saline County 216,812 73.88%163,268 USD 305 104,270,000 93.07%101,854,179 Total Overlapping Debt 124,661,812 122,192,447 Total Direct and Overlapping Debt 195,317,695$ 192,848,330$ Per Capita Direct and Overlapping debt 4,033.39$ 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, 2020 117 Assessed Valuation -$ Debt Limit (30% of Assessed Value)- Debt applicable to limit: Total Bonded Debt 134,396,160$ Less GO Debt Attributable to Exempt Purposes (8,742,451) Less Revenue Bonds (9,615,000) Less Loans Payable (48,566,029) Less Fund Balance designated for Debt Service (1,724,117) Total Debt Applicable to Limitation 65,748,563$ Legal debt margin (65,748,563)$ 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Debt Limit 134,928,191$ 135,421,208$ 136,196,966$ 136,896,083 138,909,078 141,804,931 142,000,537 146,336,377 152,724,804 - Total net debt applicable to limit 57,747,032 49,309,445 52,724,034 54,625,691 56,090,293 62,072,485 61,296,184 68,240,457$ 66,232,649$ 65,748,563$ Legal debt margin 77,181,159$ 86,111,763$ 83,472,932$ 82,270,392$ 82,818,785$ 79,732,446$ 80,704,353$ 78,095,920$ 86,492,155$ (65,748,563)$ Total net debt applicable to the limit as a percentage of debt limit 43%36%39%40%40%44% 43% 47%43%#DIV/0! Last Ten Fiscal Years Fiscal Year Legal Debt Margin Calculation for 2020 Schedule 15 City of Salina, KansasLegal Debt Margin 118 Utility Service Less Operating Net Available Debt Service Fiscal Year Charges Expenses Revenue Principal Interest Coverage 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 2020 19,448,780$12,460,334$ 6,988,446$ 715,000$ 327,117$ 6.71 Source: City of Salina Comprehensive Annual Financial Reports, 2011 - 2020 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 119 Fiscal Year Population Per Capita Personal Income (Saline County) Personal Income, Salina (interpolated) Unemployment Rate Labor Force, City of Salina USD 305 Headcount Percentage Free and Reduced Lunch City .5 cent sales tax Per Capita .5 cent sales Tax As a % of per capita personal income 2010 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% 2020 46,550 50,820$ 2,365,671,000$ 3.4%30,094 7,156 59.0%5,998,424$128.86$ 0.254% 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 County Per Capita Personal income as reported by the Bureau of Economic Analysis 2017 Per Capita Personal Income staff projection 2010 -2020 Employment City of Salina USD305 headcount and free and reduced lunch data derived from Kansas Department of Education./USD 305 Budget Document Employment: Kansas Department of Labor Schedule 17 City of Salina, Kansas Demographic and Economic Statistics Last Ten Fiscal Years Free and Reduced Lunch percentage is an average of the percentages for each building reported. School Data is reported at beginning of school year, eg 2017- 2018 school year is reported as 2017. 120 Employer Type of Business Employees Rank Percentage of Labor Force Employees Rank Percentage of Labor Force Salina Regional Health Center Health Care 1082 2 4.1%1,875 1 6.2% Unified School District No 305 Public School System 935 3 3.5%1,500 2 5.0% Schwan's Global Supply Chain Frozen Pizza Manufacturing 1850 1 7.0%1,200 3 4.0% Great Plains Manufacturing Agricultrual & Landscaping Equipment 650 5 2.5%1,200 4 4.0% Exide Technologies/Stryten Manufacturing Automotive Battery Manufacturer 800 4 3.0%700 5 2.3% City of Salina City Government 493 7 1.9%425 6 1.4% Salina Vortex Manufacturing -385 7 1.3% Saline County County Government 277 8 325 8 1.1% Walmart Retail -250 9 0.8% REV Group Manufacturing -175 10 0.6% Signify Fluorescent Lamps 600 6 2.3%- Eldorado National Busses/Recreational Vehicle 255 9 1.0%- Raytheon Aircraft Aircraft Manufacturing -10 0.0%- Total 6,942 26.4%8,035 26.7% Source: Salina Chamber of Commerce 2020 Schedule 18 City of Salina, Kansas Principal Employers Current Year and Nine Years Ago 2011 121 GOVERNMENTAL AUDIT SECTION Federal Federal Grantor/Pass-Through CFDA Grantor/Program Title Number Expenditures U.S. Department of Housing and Urban Development Fair Housing Assistance Program 14.401 91,100$ Passed Through the Kansas Department of Commerce: Community Development Block Grants/Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants 14.218 122,055 Total Community Development Block Grants/Entitlement Grants Cluster 122,055 Passed Through the Kansas Housing Resources Corporation: Emergency Solutions Grant 14.231 177,407 Total U.S. Department of Housing and Urban Development 390,562 U.S. Department of Justice Edward Byrne Memorial Justice Assistance Grant 16.738 52,713 Total U.S. Department of Justice 52,713 U.S. Department of the Treasury Passed Through Saline County: Coronavirus Relief Fund 21.019 1,218,475 Total U.S. Department of the Treasury 1,218,475 U.S. Department of Homeland Security Passed Through Kansas Adjutant General: Disaster Grants - Public Assistance (Presidentially Declared Disasters)97.036 42,885 Total U.S. Department of Homeland Security 42,885 U.S. Department of Transportation Passed Through Kansas Department of Transporation: Highway Safety Cluster: State and Community Highway Safety 20.600 3,284 National Priority Safety Programs 20.616 2,262 Total Highway Safety Cluster 5,546 Total U.S. Department of Transportation 5,546 Total Expenditures of Federal Awards 1,710,181$ CITY OF SALINA, KANSAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2020 See independent auditor's report on the financial statements. 122 123 CITY OF SALINA, KANSAS NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2020 1.Organization The City of Salina, Kansas (the City), is the recipient of several federal awards. All federal awards received directly from federal agencies as well as those awards that are passed through other government agencies, are included on the Schedule of Expenditures of Federal Awards. 2.Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City and is presented on the modified accrual basis of accounting, which is described in Note 1 to the City’s basic financial statements. The information presented in this schedule is in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200,Uniform Administrative Requirements,Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in or used in the preparation of the basic financial statements. The City elected not to use the 10% de minimis indirect cost rate. 3.Local Government Contributions Local cost sharing is required by certain federal grants. The amount of cost sharing varies with each program. Only the federal share of expenditures is presented in the Schedule of Expenditures of Federal Awards. 4.Additional Audits Grantor agencies reserve the right to conduct additional audits of the City’s grant programs for economy and efficiency and program results that may result in disallowed costs to the City. However, management does not believe such audits would result in any disallowed costs that would be material to the City’s financial position at December 31, 2020. 5.Outstanding Loans The City did not have any outstanding loans under any federal grants at December 31, 2020. 6.Pass Through Numbers Pass through numbers have not been assigned to pass through grants on the Schedule of Expenditures of Federal Awards. Section I - Summary of Auditor's Results Financial Statements Type of auditor's report issued:Unmodified Internal control over financial reporting: Material weakness(es) identified?Yes X No Significant deficiency(ies) identified that are not considered to be material weaknesses?Yes X None reported Noncompliance material to financial statements noted?Yes X No Federal Awards Internal control over major programs: Material weakness(es) identified?Yes X No Significant deficiency(ies) identified that are not considered to be material weaknesses?Yes X None reported Type of auditor's report issued on compliance for major programs:Unmodified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Uniform Guidance?Yes X No Identification of major programs: CFDA Number(s) 21.019 Dollar threshold used to distinguish between type A and type B programs: Auditee qualified as low-risk auditee?Yes X No CITY OF SALINA, KANSAS Coronavirus Relief Fund $750,000 Name of Federal Program or Cluster SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2020 See independent auditor's report on the financial statements. 124 Section II - Financial Statement Findings Prior Year Findings None Noted. Current Year Findings None Noted. Section III - Federal Award Findings and Questioned Costs Prior Year Findings None Noted. Current Year Findings None Noted. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) CITY OF SALINA, KANSAS For the Year Ended December 31, 2020 See independent auditor's report on the financial statements. 125 126 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH “GOVERNMENT AUDITING STANDARDS” Mayor and City Commissioners City of Salina, Kansas We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States,the financial statements of the government 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 (the City),as of and for the year ended December 31, 2020, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated July 23,2021. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal controls exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charge with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws,regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 127 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Certified Public Accountant Lawrence, Kansas July 23,2021 128 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE Mayor and City Commissioners City of Salina, Kansas Report on Compliance for Each Major Federal Program We have audited the compliance of the City of Salina, Kansas (the City), with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on the City’s major federal program for the year ended December 31, 2020. The City’s major federal financial program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for the City’s major federal program based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United State of America; the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S.Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining,on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for the major federal program. However, our audit does not provide a legal determination on the City’s compliance. Opinion on Each Major Federal Program In our opinion,the County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended December 31, 2020. Report on Internal Control Over Compliance The management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on the major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County’s internal control over compliance. 129 A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in the internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Certified Public Accountant Lawrence, Kansas July 23, 2021 CONTINUING DISCLOSURE UNDERTAKING This CONTINUING DISCLOSURE UNDERTAKING dated as of September 8, 2021 (the "Continuing Disclosure Undertaking"), is executed and delivered by CITY OF SALINA (the "Issuer"). RECITALS 1.This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance by the Issuer of its General Obligation Refunding Bonds, Series 2021-B (the "Bonds"), pursuant to an Ordinance and Resolution adopted by the governing body of the Issuer (collectively the "Bond Resolution"). 2.The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Bonds 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 Bond 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 Comprehensive Annual Financial Report, if any, so long as the Comprehensive Annual Financial Report contains the financial information and operating data described in Section 2(a)(l) and (2). "Beneficial Owner" means any registered owner of any Bonds 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 Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds 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. ''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 secuntles 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 600596.20219\DISCLOSURE UNDERTAKING 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 t�e Rule. "Participating Underwriter'' means any of the original underwriter(s) of the Bonds required to comply with the Rule in connection with the offering of the Bonds. Section 2. Provision of Annual Reports. (a)The Issuer shall, not later than the first day of the seventh month after the end of the Issuer's Fiscal Year, commencing with the year ending December 31, 2021, 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, insubstantially the format contained in the Official Statement relating to the Bonds. A more detailed explanation of the accounting basis and method of preparation of the financial statements is contained in the Official Statement relating to the Bonds. 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 Bonds, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. (2)Updates as of the end of the Fiscal Year of certain financial information andoperating data contained in the final Official Statement related to the Bonds, 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. 600596.20219\DISCLOSURE UNDERTAKING 2 (b)The Annual Report shall be filed with the MSRB m 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 Bonds ("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 othermaterial notices or determinations with respect to the tax status of the Bonds, or othermaterial events affecting the tax status of the Bonds; (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 Bonds, 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 personor the sale of all or substantially all of the assets of the obligated person, other than in theordinary course of business, the entry into a definitive agreement to undertake such anaction or the termination of a definitive agreement relating to any such actions, other thanpursuant 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 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. 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 Bonds. 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 Bonds, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3. 600596.20219\DISCLOSURE UNDERTAKING 3 Section 3, 600596.20219\DISCLOSURE UNDERTAKING 4 EXHIBIT A FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial information and operating data contained in tables in the following sections contained in Appendix A of the final Official Statement relating to the Bonds: •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 Taxpayers600596.20219\DISCLOSURE UNDERTAKING A-1 EXCERPT OF MINUTES OF A MEETING OF THE CITY COMMISSION OF THE CITY OF SALINA, KANSAS HELD ON AUGUST 16, 2021 Gilmore & Bell, P.C. 08/16/2021 The City Commission (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: Mayor, MELISSA ROSE HODGES; Commissioners, TRENT W. DAVIS, M.D., MICHAEL L. HOPPOCK, AARON PECK and KARL RYAN Absent: NONE The Mayor declared that a quorum was present and called the meeting to order. ************** (Other Proceedings) The Finance Director reported that pursuant to the Notice of Bond Sale heretofore duly given, bids for the purchase of General Obligation Refunding Bonds, Series 2021-B, dated September 8, 2021, of the City had been received. A tabulation of said bids is set forth as EXHIBIT A hereto. The Governing Body reviewed and considered the bids and it was found and determined that the bid of UMB BANK, N.A., KANSAS CITY, MISSOURI, was the best bid for the Bonds, a copy of which is attached hereto as EXHIBIT B. There was presented an Ordinance entitled: AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION REFUNDING BONDS, SERIES 2021-B, OF THE CITY OF SALINA, KANSAS, FOR THE PURPOSE OF PROVIDING FUNDS TO REFUND A PORTION OF THE CITY'S OUTSTANDING GENERAL OBLIGATION BONDS; PROVIDING FOR fflE LEVY AND COLLECTION OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWiffl; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. Commissioner MICHAEL L. HOPPOCK moved that the Ordinance be passed. The motion was seconded by Commissioner TRENT W. DAVIS, M.D. The Ordinance, having been approved by a first reading on July 19, 2021, was duly read and considered, and upon being put, the motion for the passage of said Ordinance was carried by the vote of the Governing Body as follows: Yea: MELISSA ROSE HODGES; TRENT W. DAVIS, M.D., MICHAEL L. HOPPOCK, AARON PECK and KARL RYAN. Nay: NONE. 600596.20219\BASICDOCS v.4 EXHIBIT A BID TABULATION CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS Dated: September 8, 2021 Series 2021-B Good Faith Deposit: $130,000 BIDDERS Salina Sale Date: August 16, 2021 12:00 P.M., Central Time Max Interest Rate: 4.296% $6,500,000 General Obligation Refunding Bonds, Series 2021-B 600596.20219\BASICDOCS v.4 __ B_id_d_er_N_am_e ____ j_ TIC 'UMB Bank N.A. 10.911403 'Robert W. Baird & Co .. Inc. p.933411 ICountn Club Bank ----,0.957781 1Piper Sandler_§l, Ca,---· _10.9?�88�1 The Bal.er Group .1 .0080001 --·-- J ----· ,Commerce Bank 11.056625 !Ra, mond James & Associates. Inc. ll.0826741FHN Financial Capital Markets JIJ]._3352 A-1 EXHIBITB (BID OF PURCHASER) 600596.20219\BASICDOCS v .4 B-1 8/16/2021 PARITY Sid Form UMB Bank N.A. -Kansas City , MO's Bid Salina $6,500,000 General Obligation Refunding Bonds, Series 2021-B For the aggregate principal amount of $6,500,000.00, we will pay you $6,754,222.50, plus accrued interest from the date of issue to the date of delive ry. The Bonds are to bear interest at the following rate(s): Maturity Date Amount$ Coupon% .Yield% Dollar Price Bond Insurance 10/01/2022 665M 2.0000 0.1800 101.933 10/01/2023 670M 2.0000 0.2000 103.705 10/01/2024 I 680M 2.0000 0.3000 105.180 10/01/2025 680M 2.0000 0.4000 106.443 10/01/2026 675M 2.0000 0.5000 107.491 10/01/2027 675M 2.0000 0.6500; 108.014 10/01/2028 680M 2.0000 0.8000 108.225 10/01/2029 420M 1.0000 0.9000 100.682 10/01/2030 275M 1.0000 1.0000 100.000 10/01/2031 275M 1.1500 1.1500 100.000 10/01/2032 280M 1.2500 1.2500 100.000 .. 10/01/2033 290M 1.3500 · 1.3500 100.000 -· 10/01/2034 235M 1.4000 1.4000 100.000 Total Interest Cost: $604,592.51 Premium: $254,222.50 Net Interest Cost: $350,370.01 TIC: 0.911403 Total Insurance Premium: $0.00 Time Last Bid Received On:08/16/2021 11:42:02 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. SEE ATTACHED PRCING SCHEDULE Bidder: UMB Bank N.A., Kansas City , MO Contact: Kristin Koziol Title: VP Telephone: 816-860-7223 Fax: 816-843-4325 Issuer Name: City of Salina Accepted By: ¢:: Date: B/J�!z� Company Name: UMB Bank, n.a. Accepted By: ��R Date: 8/16/21 https://www.newissuehome.i-deal.com/Parity/asp/main.asp?page=parityBidform&customer=TM3&issue_key_no=314390&bid_no=7&sec_type=BD&bi... 1/1 Type of Maturity J3ond Coupon Total Bid Information Yield Maturity Value Price $6,220,000.00 C YTM Call Date Call Price Dollar Price $6,487,544.95 Page CERTIFICATE I hereby certify that the foregoing is a true and correct copy of the original ordinance; that said Ordinance was passed on August 16, 2021; that the record of the final vote on its passage is found on page 4 of the August 16, 2021 minutes; and that the Ordinance or a summary thereof was published in the SalinaJournal on August 22, 2021. DATED: August 22, 2021. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20219\BASICDOCS (Signature Page to Bond Ordinance Certificate) Publisher's Affidavit I, _..._!aD.!,;e!o..b"'-b""'"'ie......,N._.e ... 1""'so,..nu...... ___ , being duly sworn declare that I am a T.egaJ Coordinator of THE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for five consecutive years prior to first publication of attached notice, and that the Ordinance Summary 21-11064 Notice has been correctly published in the entire issue of said newspaper one time, publication being given in the issue of August 22, Subscribed and sworn to before me, this � dayof 011�� A.D.201J_��d Notary Public\. Printer's Fee $147.50 A.CHRISTY FINK � Notary Public• State of Kansas My Appt. Expires ( 1'1Ai16hed in lhe Salina Joomal Augus122, 20211 SUMMARY OF ORDINANCE NO, 21-110N On Augullt 16. 2021, the governing 'body of Ille City : of Sllll'la, Kan$U passed an i ordinaooeentltled: AN ORDNANCE I AUTHORIZING • AND I PROVIIIING FOR THE I ISSUANCE OF GENERAL OBLIGATION REFUNDING BONDS, SERIES 21121·9, i OF THE. CITY OF SAUNA, iKANSAS, FOR THE PURPOSE OF PROVIDING FUNDS TO REFUND A PORTION OF THE CITY'S OUTSTANDING GENERAL OBLIG�TION BONDS; PROVIDING FOR THE L£VY ANO COLL.£CT10N OF AN ANNUAL TAX FOR ! THE PURPOSE OF PAYING THE PRINCIPAL OF AND ; INTEREST ON SAID BONDS AS THEY BECOME DUE; . AUTHORIZING CERTAIN 'I OTHER DOCUIIBITS AND ACTIONS IN COHNECflON THEREWllll; AND MAKING I CERTAIN COVENANTS WITH RESPECT tHERETI). The Serial 2ll2t·B Bonds I approved by Ille Onlinaooe are b"'9 lssuefl in Iii& pdncc>il anlOllll set 1of1II therein to lefund prerioolly Issued general obligalion bonda al the Cily, arid constitlie genenll oblgalilns of Ille_ City payable as to bolh p�ncipal 811d .,..._ to lheex1Jlnt necessary, ftorn ad valorem taxes whidl may be lr,led wlhoul limilalialla&toralllorllllOIJnt .,.. 811 thl tlxablt tangl)le pnipeny, real and pereonat. withi1 '1e tenmrial limits rJ the City. A , � texl of Ille Orllinance I fMf be c!Mlned or 'llewed 1ree I of ettalg88t 1tie olice ol lhe Oily Clelk. Clly,Couny Buldng, 300 1' W9!11 AB11 SINI, Salina, Kansas 67402 A 11producll0n of Ille \ Ortlna1Ki8 is available tor not less lhan 7 dr,-9 l-1ng Ille publi1:etioll date ct Illa Slirm,ary al m.Mb:k&,IIQY. Thll . &.mma,y 19 hereby ctrlilP.ul, lY/ the clly attomtly, 10 be legal� aiwate and IUlficilnl pu1S1181110 Ille laws ol Ille S1al9 afKan&ai. JoV�A.Rulltllord CityCtert Cityol� 300 W. Aah St f206 Phone: (786) 3llH73& ilM'OM •411•d9al0aaloa mg Wetieite: www,sallna-ks,qo• llllJ "Defaulted Interest" means interest on any Bond which is payable but not paid on any Interest Payment Date. "Defeasance Obligations" means any of the following obligations: (a)United States Government Obligations that are not subject to redemption in advance oftheir 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 Government Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the obligations; ( 4)such cash and United States Government Obligations serving as security for 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 satisfyany other claims, including those against the trustee or escrow agent; and (6)such obligations are rated in a rating category by Moody's or Standard & Poor's that is no lower than the rating category then assigned by that Rating Agency to United States Government Obligations. "Derivative" means any investment instrument whose market price is derived from the fluctuating value of an underlying asset, index, currency, futures contract, including futures, options and collateralized mortgage obligations. ''Disclosure Undertaking" means the Continuing Disclosure Undertaking, dated as of the Dated 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: 600596.20219\BASICDOCS v.4 3 (a)Payment of the principal and of the redemption premium, if any, of any of the Bonds 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 Bonds shall not be made when thesame shall become due; or ( c)The Issuer shall default in the due and punctual performance of any other of the covenants,conditions, agreements and provisions contained in the Bonds or in this Bond Resolution ( other than the covenants relating to continuing disclosure requirements contained herein and in the Disclosure Undertaking) on the part of the Issuer to be performed, and such default shalJ continue for thirty (30) days after written notice specifying such default and requiring same to be remedied shall have been given to the Issuer by the Owner of any of the Bonds then Outstanding. "Federal Tax Certificate" means the Issuer's Federal Tax Certificate, dated as of the Issue Date, as the same may be amended or supplemented in accordance with the provisions thereof. "Finance Director" means the duly appointed and acting Finance Director of the City or, in the Finance Director's absence, the duly appointed Deputy, Assistant or Acting Finance Director of the City. "Financeable Costs" means the amount of expenditure for an Improvement which has been duly authorized by action of the Governing Body to be financed by general obligation bonds, less: (a) the amount of any temporary notes or general obligation bonds of the Issuer which are currently Outstanding and available to pay such Financeable Costs; and (b) any amount of Financeable Costs which has been previously paid by the Issuer or by any eligible source of funds unless such amounts are entitled to be reimbursed to the Issuer under State or federal law. "Fiscal Year" means the twelve month period ending on December 31. "Funds and Accounts" means funds and accounts created pursuant to or referred to in Section 501hereof. "Governing Body" means the City Commission of the Issuer. "Independent Accountant" means an independent certified public accountant or firm of independent certified public accountants at the time employed by the Issuer for the purpose of carrying out the duties imposed on the Independent Accountant by this Bond Resolution. "Interest Payment Date(s)" means the Stated Maturity of an installment of interest on any Bond which shall be April I and October 1 of each year, commencing April 1, 2022. "Issue Date" means the date when the Issuer delivers the Bonds to the Purchaser in exchange for the Purchase Price. "Issuer" means the City and any successors or assigns. "Maturity" when used with respect to any Bond means the date on which the principal of such Bond becomes due and payable as therein and herein provided, whether at the Stated Maturity thereof or call for redemption or otherwise. 600596.20219\BASICDOCS v.4 4 "Mayor'' means the duly elected and acting Mayor, or in the Mayor's absence, the duly appointed and/or elected Vice Mayor or Acting Mayor of the Issuer. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer. "Notice Address" means with respect to the following entities: (a)To the Issuer at:City-County Building, 300 West Ash Street, Salina, Kansas 67402 Fax: (785) 309-5711 (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 Fax: (785) 296-6976 ( c)To the Purchaser:UMB Bank, n.a. 1010 Grand Blvd. Municipal Underwriting, 2nd Floor P.O. Box 419226 Kansas City, Missouri 64141-6226 Fax: (816) 843-4325 (d)To the RatingAgency(ies):Moody's Municipal Rating Desk 7 World Trade Center 250 Greenwich Street, 23rd Floor New York, New York 10007 S&P Global Ratings, a division of S&P Global Inc. 55 Water Street, 38th Floor New York, New York 10004 or such other address as is furnished in writing to the other parties referenced herein. 600596.20219\BASICDOCS v.4 5 ''Notice Representative" means: (a)With respect to the Issuer, the Clerk.(b)With respect to the Bond Registrar and Paying Agent, the Director of Fiscal 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 Bonds. "Ordinance" means Ordinance No. 21-11064 of the Issuer authorizing the issuance of the Bonds, as amended from time to time. "Outstanding" means, when used with reference to the Bonds, as of a particular date of determination, all Bonds theretofore authenticated and delivered, except the following Bonds: (a)Bonds theretofore canceled by the Paying Agent or delivered to the Paying Agent forcancellation; (b)Bonds deemed to be paid in accordance with the provisions of Article VII hereof; and( c)Bonds in exchange for or in lieu of which other Bonds have been authenticated anddelivered hereunder. "Owner" when used with respect to any Bond means the Person in whose name such Bond is registered on the Bond Register. Whenever consent of the Owners is required pursuant to the terms of this Bond Resolution, and the Owner of the Bonds, as set forth on the Bond Register, is Cede & Co., the term Owner shall be deemed to be the Beneficial Owner of the Bonds. "Participants" means those financial institutions for whom the Securities Depository effects bookentry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Paying Agent" means the State Treasurer and any successors and assigns. "Permitted Investments" shall mean the investments hereinafter described, provided, however, no moneys or funds shall be invested in a Derivative: (a) investments authorized by K.S.A. 12-1675 and amendments thereto; (b) the municipal investment pool established pursuant to K.S.A. 12-1677a, and amendments thereto; (c) direct obligations of the United States Government or any agency thereof; (d) the Issuer's temporary notes issued pursuant to K.S.A. 10-123 and amendments thereto; (e) interest-bearing time deposits in commercial banks or trust companies located in the county or counties in which the Issuer is located which are insured by the Federal Deposit Insurance Corporation or collateralized by securities described in (c); (f) obligations of the federal national mortgage association, federal home loan banks, federal home loan mortgage corporation or government national mortgage association; (g) repurchase agreements for securities described in ( c) or (f); (h) investment agreements or other obligations of a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody's or Standard & Poor' s; (i) investments and shares or units of a money market fund or trust, the portfolio of which is comprised entirely of securities described in (c) or (f); (i) receipts evidencing ownership interests in securities or portions thereof described in (c) or (f); (k) municipal bonds 600596.20219\BASICDOCS v.4 6 or other obligations issued by any municipality of the State as defined in K.S.A. 10-1101 which are general obligations of the municipality issuing the same; or (1) bonds of any municipality of the State as defined in K.S .A. 10-1101 which have been refunded in advance of their maturity and are fully secured as to paymentof principal and interest thereon by deposit in trust, under escrow agreement with a bank, of securitiesdescribed in (c) or (f) all as may be further restricted or modified by amendments to applicable State law."Person" means any natural person, corporation, partnership,joint venture, association, firm,jointstock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body. "Purchase Price" means the principal amount of the Bonds plus accrued interest to the date of delivery, plus a premium of $242,717.58. "Purchaser" means UMB Bank, n.a., Kansas City, Missouri, the original purchaser of the Bonds, and any successor and assigns. ''Rating Agency" means any company, agency or entity that provides, pursuant to request of the Issuer, financial ratings for the Bonds. "Record Dates" for the interest payable on any Interest Payment Date means the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. "Redemption Date" means, when used with respect to any Bond to be redeemed, the date fixed for the redemption of such Bond pursuant to the terms of this Bond Resolution. "Redemption Fund" means the Redemption Fund for Refunded Bonds created pursuant to Section501 hereof. "Redemption Price" means, when used with respect to any Bond to be redeemed, the price at which such Bond is to be redeemed pursuant to the terms of this Bond Resolution, including the applicable redemption premium, if any, but excluding installments of interest whose Stated Maturity is on or before the Redemption Date. "Refunded Bonds" means collectively: (a) the Series 2013-B Bonds maturing in the years 2022 to 2033, inclusive, in the aggregate principal amount of $2,395,000; and (b) the Series 2014-A Bonds maturing in the years 2022 to 2034, inclusive, in the aggregate principal amount of $4,000,000. "Refunded Bonds Paying Agent" means the respective paying agent for each series of the Refunded Bonds as designated in the respective Refunded Bonds Resolution, and any successor or successors at the time acting as paying agent for any of the Refunded Bonds. "Refunded Bonds Redemption Date" means October 1, 2021. "Refunded Bonds Resolution" means each ordinance and resolution which authorized the Refunded Bonds. "Replacement Bonds" means Bonds issued to the Beneficial Owners of the Bonds in accordance with Section 213 hereof. "SEC Rule" means Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. 600596.20219\BASICDOCS v.4 7 Maturities, subject to redemption and payment prior to their Stated Maturities as provided in Article IIIhereof, and shall bear interest at the rates per annum as follows: Stated Maturity Principal Annual Rate Stated Maturity Principal Annual Rate October 1 Amount of Interest October 1 Amount of Interest 2022 $600,000 2.00% 2029 $420,000 1.00% 2023 610,000 2.00% 2030 265,000 1.00% 2024 630,000 2.00% 2031 275,000 1.15% 2025 645,000 2.00% 2032 280,000 1.25% 2026 650,000 2.00% 2033 290,000 1.35% 2027 655,000 2.00% 2034 230,000 1.40% 2028 670,000 2.00% The Bonds shall bear interest at the above specified rates ( computed on the basis of a 3 60-day year of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner set forth in Section 204 hereof. Each of the Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be printed in accordance with the format required by the Attorney General of the State and shall be substantially in the form attached hereto as EXHIBIT A or as may be required by the Attorney General pursuant to the Notice of Systems of Registration for Kansas Municipal Bonds, 2 Kan. Reg. 921 (1983), in accordance with the Kansas Bond Registration Law, K.S.A. 10-620 et seq. Section 203. Designation of Paying Agent and Bond Registrar. The State Treasurer is hereby designated as the Paying Agent for the payment of principal of and interest on the Bonds and Bond Registrar with respect to the registration, transfer and exchange of Bonds. The Mayor of the Issuer is hereby authorized and empowered to execute on behalf of the Issuer an agreement with the Bond Registrar and Paying Agent for the Bonds. The Issuer will at all times maintain a Paying Agent and Bond Registrar meeting the qualifications herein described for the performance of the duties hereunder. The Issuer reserves the right to appoint a successor Paying Agent or Bond Registrar by (a) filing with the Paying Agent or Bond Registrar then performing such function a certified copy of the proceedings giving notice of the termination of such Paying Agent or Bond Registrar and appointing a successor, and (b) causing notice of appointment of the successor Paying Agent and Bond Registrar to be given by first class mail to each Owner. No resignation or removal of the Paying Agent or Bond Registrar shall become effective until a successor has been appointed and has accepted the duties of Paying Agent or Bond Registrar. Every Paying Agent or Bond Registrar appointed hereunder shall at all times meet the requirements ofK.S.A. 10-501 et seq. and K.S.A. 10-620 et seq., respectively. Section 204. Method and Place of Payment of the Bonds. The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office of the Paying Agent. The interest payable on each Bond on any Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by 600596.20219\BASICDOCS v.4 9 The Issuer shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds provided for by this Bond Resolution and the cost of printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. In compliance with Code § 3406, such amount may be deducted by the Paying Agent from amounts otherwise payable to such Owner hereunder or under the Bonds. The Issuer and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption has been mailed by the Paying Agent pursuant to Article III hereof and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the Issuer of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to this Article II. The Issuer and the Paying Agent may deem and treat the Person in whose name any Bond is registered on the Bond Register as the absolute Owner of such Bond, whether such Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price of and interest on said Bond and for all other purposes. All payments so made to any such Owner or upon the Owner's order shall be valid and effective to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Issuer nor the Paying Agent shall be affected by any notice to the contrary. At reasonable times and under reasonable regulations established by the Bond Registrar, the Bond Register may be inspected and copied by the Owners ( or a designated representative thereof) of 10% or more in principal amount of the Bonds then Outstanding or any designated representative of such Owners whose authority is evidenced to the satisfaction of the Bond Registrar. Section 207. Execution, Registration, Authentication and Delivery of Bonds. Each of the Bonds, including any Bonds issued in exchange or as substitutions for the Bonds initially delivered, shall be executed for and on behalf of the Issuer by the manual, 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 Bonds in the manner herein specified, and to cause the Bonds to be registered in the office of the Clerk, which registration shall be evidenced by the manual, electronic or facsimile signature of the Clerk with the seal of the Issuer affixed thereto or imprinted thereon. The Bonds shall also be registered in the office of the State Treasurer, which registration shall be evidenced by the manual, electronic or facsimile signature of the State Treasurer with the seal of the State Treasurer affixed thereto or imprinted thereon. In case any officer whose signature appears on any Bonds ceases to be such officer before the delivery of such Bonds, such signature shall nevertheless be valid and sufficient for all purposes, as if such person had remained in office until delivery. Any Bond may be signed by such persons who at the actual time of the execution of such Bond are the proper officers to sign such Bond although at the date of such Bond such persons may not have been such officers. The Mayor and Clerk are hereby authorized and directed to prepare and execute the Bonds as herein specified, and when duly executed, to deliver the Bonds to the Bond Registrar for authentication. The Bonds shall have endorsed thereon a certificate of authentication substantially in the form attached hereto as EXHIBIT A hereof, which shall be manually executed by an authorized officer or 600596.20219\BASICDOCS v.4 11 (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 Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b)if the Bond Registrar receives written notice from Participants having interests in not lessthan 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to Owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the Issuer, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the Issuer, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository in accordance with the following paragraph, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the Issuer. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the Issuer may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of Bonds to the successor Securities Depository in an Authorized Denominations and form as provided herein. Section 211. Nonpresentment of Bonds. If any Bond is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Bond have been made available to the Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Bond, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Bond Resolution or on, or with respect to, said Bond. If any Bond is not presented for payment within four ( 4) years following the date when such Bond becomes due at Maturity, the Paying Agent shall repay, without liability for interest thereon, to the Issuer the funds theretofore held by it for payment of such Bond, and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an 600596.20219\BASICDOCS v.4 13 In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption a minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of the denomination of a minimum Authorized Denomination. If it is determined that one or more, but not all, of a minimum Authorized Denomination of face value represented by any Bond is selected for redemption, then upon notice of intention to redeem a minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: ( 1)for payment of the Redemption Price and interest to the Redemption Date of a minimum AuthorizedDenomination of face value called for redemption, and (2) for exchange, without charge to the Ownerthereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of theprincipal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the PayingAgent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable onthe redemption date to the extent of a minimum Authorized Denomination of face value called forredemption (and to that extent only).Section 303. Notice and Effect of Call for Redemption. In the event the Issuer desires to call the Bonds for redemption prior to maturity, written notice of such intent shall be provided to the Bond Registrar in accordance with K.S.A. 10-129, as amended, not less than 45 days prior to the Redemption Date. The Bond Registrar shall call Bonds for redemption and payment and shall give notice of such redemption as herein provided upon receipt by the Bond Registrar at least 45 days prior to the Redemption Date of written instructions of the Issuer specifying the principal amount, Stated Maturities, Redemption Date and Redemption Prices of the Bonds to be called for redemption. Unless waived by any Owner of Bonds to be redeemed, if the Issuer shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the Bond Registrar and the Purchaser. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices ofredemption 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 caseof 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 andpayable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and ( e)the place where such Bonds are to be surrendered for payment of the Redemption Price,which shall be the principal office of the Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. 600596.20219\BASICDOCS v.4 15 Prior to any Redemption Date, the Issuer shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified in this Section to the Securities Depository. It is expected that the Securities Depository shall, in tum, notify its Participants and that the Participants, in tum, 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. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date ( unless the Issuer defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with such notice, the Redemption Price of such Bonds shall be paid by the Paying Agent. Installments of interest due on or prior to the Redemption Date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Owner a new Bond or Bonds of the same Stated Maturity in the amount of the unpaid principal as provided herein. All Bonds that have been surrendered for redemption shall be cancelled and destroyed by the Paying Agent as provided herein and shall not be reissued. In addition to the foregoing notice, the Issuer shall provide such notices of redemption as are required by the Disclosure Undertaking. Further notice may be given by the Issuer or the Bond Registrar on behalf of the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if official notice thereof is given as above prescribed: (a)Each further notice of redemption given hereunder shall contain the information requiredabove for an official notice of redemption plus (1) the CUSIP numbers of all Bonds being redeemed; (2) the date of issue of the Bonds as originally issued; (3) the rate of interest borne by each Bond being redeemed; (4) the maturity date of each Bond being redeemed; and (5) any other descriptive information needed to identify accurately the Bonds being redeemed. (b)Each further notice of redemption shall be sent at least one day before the mailing of noticeto Owners by first class, registered or certified mail or overnight delivery, as determined by the Bond Registrar, to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds. ( c)Each check or other transfer of funds issued for the payment of the Redemption Price ofBonds being redeemed shall bear or have enclosed the CUSIP number of the Bonds being redeemed with the proceeds of such check or other transfer. The Paying Agent is also directed to comply with any mandatory standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. 600596.20219\BASICDOCS v 4 16 ARTICLE IV SECURITY FOR BONDS Section 401. Security for the Bonds. The Bonds shall be general obligations of the Issuer payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of the improvements financed by the Refunded Bonds and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the 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 Issuer are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Section 402. Levy and Collection of Annual Tax; Transfer to Debt Service Account. The Governing Body shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the Issuer in the manner provided by law. The taxes and/or assessments referred to above shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes shall be deposited in the Bond and Interest Fund, shall be kept separate and apart from all other funds of the Issuer shall thereafter be transferred to the Debt Service Account and shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due, taking into account any scheduled mandatory redemptions, and the fees and expenses of the Paying Agent. If at any time said taxes and/or assessments are not collected in time to pay the principal of or interest on the Bonds when due, the Treasurer is hereby authorized and directed to pay said principal or interest out of the general funds of the Issuer and to reimburse said general funds for money so expended when said taxes are collected. ARTICLEV ESTABLISHMENT OF FUNDS AND ACCOUNTS DEPOSIT AND APPLICATION OF BOND PROCEEDS Section 501. Creation of Funds and Accounts. Simultaneously with the issuance of the Bonds, there shall be created within the Treasury of the Issuer the following Funds and Accounts: (a)Redemption Fund. (b)Debt Service Account for General Obligation Refunding Bonds, Series 2021-B (within theBond and Interest Fund). (c)Costs of Issuance Account for General Obligation Refunding Bonds, Series 2021-B.600596.20219\BASICDOCS v.4 17 The Funds and Accounts established herein shall be administered in accordance with the provisions of this Bond Resolution so long as the Bonds are Outstanding. Section 502. Deposit of Bond Proceeds. The net proceeds received from the sale of the Bonds shall be deposited simultaneously with the delivery of the Bonds as follows: (a)An amount necessary to pay the Costs of Issuance shall be deposited in the Costs of Issuance Account. (b)The remaining balance of the proceeds derived from the sale of the Bonds shall bedeposited into the Redemption Fund. Section 503. Application of Moneys in the Redemption Fund. Moneys in the Redemption Fund shall be paid and transferred to the Refunded Bonds Paying Agent, with irrevocable instructions to apply such amount to the payment of the Refunded Bonds on the Refunded Bonds Redemption Date. The Clerk is authorized and instructed to provide appropriate notice of redemption in accordance with the Refunded Bonds Resolution authorizing the issuance of such Refunded Bonds. Any moneys remaining in the Redemption Fund not needed to retire the Refunded Bonds shall be transferred to the Debt Service Account. Section 504. Application of Moneys in Debt Service Account. All amounts paid and credited to the Debt Service Account shall be expended and used by the Issuer for the sole purpose of paying the principal or Redemption Price of and interest on the Bonds as and when the same become due and the usual and customary fees and expenses of the Bond Registrar and Paying Agent. The Treasurer is authorized and directed to withdraw from the Debt Service Account sums sufficient to pay both principal or Redemption Price of and interest on the Bonds and the fees and expenses of the Bond Registrar and Paying Agent as and when the same become due, and to forward such sums to the Paying Agent in a manner which ensures that the Paying Agent will receive immediately available funds in such amounts on or before the Business Day immediately preceding the dates when such principal, interest and fees of the Bond Registrar and Paying Agent will become due. If, through the lapse of time or otherwise, the Owners of Bonds are no longer entitled to enforce payment of the Bonds or the interest thereon, the Paying Agent shall return said funds to the Issuer. All moneys deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Bond Resolution and shall be held in trust by the Paying Agent for the benefit of the Owners of the Bonds entitled to payment from such moneys. Any moneys or investments remaining in the Debt Service Account after the retirement of the Bonds shall be transferred and paid into the Bond and Interest Fund. Section 505. 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 other than the Redemption Fund may be invested in accordance with this Bond Resolution and the Federal Tax Certificate in Permitted Investments; provided, 600596.20219\BASICDOCS v.4 18 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. Section 501. Application of Moneys in the Costs of Issuance Account. Moneys in the Costs of Issuance Account shall be used by the Issuer to pay the Costs of Issuance. Any funds remaining in the Costs of Issuance Account, after payment of all Costs of Issuance, but not later than the later of 30 days prior to the first Stated Maturity of principal or one year after the date of issuance of the Bonds, shall be transferred to the Debt Service Account. ARTICLE VI DEFAULT AND REMEDIES Section 601. Remedies. The provisions of the Bond Resolution, including the covenants and agreements herein contained, shall constitute a contract between the Issuer and the Owners of the Bonds. Ifan Event of Default occurs and shall be continuing, the Owner or Owners of not less than 10% in principal amount of the Bonds at the time Outstanding shall have the right for the equal benefit and protection of all Owners of Bonds similarly situated: (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 Bond Resolution or by the Constitution and laws of the State; (b)by suit, action or other proceedings in equity or at law to require the Issuer, its officers,agents and employees to account as if they were the trustees of an express trust; and ( c)by suit, action or other proceedings in equity or at law to enjoin any acts or things which may be unlawful or in violation of the rights of the Owners of the Bonds. Section 602. Limitation on Rights of Owners. The covenants and agreements of the Issuer contained herein and in the Bonds shall be for the equal benefit, protection, and security of the Owners of any or all of the Bonds, all of which Bonds shall be of equal rank and without preference or priority of one Bond over any other Bond in the application of the funds herein pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this Bond Resolution. No one or more Owners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Outstanding Bonds. Section 603. Remedies Cumulative. No remedy conferred herein upon the Owners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred herein. No waiver of any default or breach of duty or contract by the Owner of any Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No delay or omission of any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. 600596.20219\BASICDOCS v.4 19 Every substantive right and every remedy conferred upon the Owners of the Bonds by this Bond Resolution may be enforced and exercised from time to time and as often as may be deemed expedient. If action or proceedings taken by any Owner on account of any default or to enforce any right or exercise any remedy has been discontinued or abandoned for any reason, or shall have been determined adversely to such Owner, then, and in every such case, the Issuer and the Owners of the Bonds shall, 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 Bonds, redemption premium, if any, or scheduled interest payments thereon have been paid and discharged, then the requirements contained in this Bond Resolution and the pledge of the Issuer's faith and credit hereunder and all other rights granted hereby shall terminate with respect to the Bonds or scheduled interest payments thereon so paid and discharged. Bonds, redemption premium, if any, or scheduled interest payments thereon shall be deemed to have been paid and discharged within the meaning of this Bond Resolution if there has been deposited with the Paying Agent, or other commercial bank or trust company located in the State and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Bonds or the interest payments thereon, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned on any such Defeasance Obligations, will be sufficient for the payment of the principal of or Redemption Price of said Bonds and/or interest accrued to the Stated Maturity or Redemption Date, or if default in such payment has occurred on such date, then to the date of the tender of such payments. If the amount to be so deposited is based on the Redemption Price of any Bonds, no such satisfaction shall occur until (a) the Issuer has elected to redeem such Bonds, and (b) either notice of such redemption has been given, or the Issuer has given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Bond Registrar to give such notice of redemption in compliance with Article III hereof. Any money and Defeasance Obligations that at any time shall be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the Issuer, for the purpose of paying and discharging any of the Bonds, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Owners of the Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All money and Defeasance Obligations deposited with the Paying Agent or such bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions of this Bond Resolution. ARTICLE VIII TAX COVENANTS Section 801. General Covenants. The Issuer covenants and agrees that it will comply with: (a)all applicable provisions of the Code necessary to maintain the exclusion from gross income for federalincome tax purposes of the interest on the Bonds; and (b) all provisions and requirements of the Federal Tax Certificate. The Mayor and Finance Director are hereby authorized and directed to execute the FederalTax Certificate in a form approved by Bond Counsel, for and on behalf of and as the act and deed of theIssuer. The Issuer will, in addition, adopt such other ordinances or resolutions and take such other actionsas may be necessary to comply with the Code and with all other applicable future laws, regulations, 600596.20219\BASICDOCS v.4 20 or instruments executed by such Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the Clerk, but no such modification or alteration shall: (a)extend the maturity of any payment of principal or interest due upon any Bond; (b)effect a reduction in the amount which the Issuer is required to pay as principal of or interest on any Bond; ( c)permit preference or priority of any Bond over any other Bond; or ( d)reduce the percentage in principal amount of Bonds required for the written consent to anymodification or alteration of the provisions of this Bond Resolution. Any provision of the Bonds or of this Bond Resolution may, however, be amended or modified by ordinance or resolution duly adopted by the Governing Body at any time in any legal respect with the written consent of the Owners of all of the Bonds at the time Outstanding. Without notice to or the consent of any Owners, the Issuer may amend or supplement this Bond Resolution for the purpose of curing any formal defect, omission, inconsistency or ambiguity herein, to grant to or confer upon the Owners any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Owners, to conform this Bond Resolution to the Code or future applicable federal law concerning tax-exempt obligations, or in connection with any other change therein which is not materially adverse to the interests of the Owners. Every amendment or modification of the provisions of the Bonds or of this Bond Resolution, to which the written consent of the Owners is given, as above provided, shall be expressed in a resolution or ordinance adopted by the Governing Body amending or supplementing the provisions of this Bond Resolution and shall be deemed to be a part of this Bond Resolution. A certified copy of every such amendatory or supplemental ordinance or resolution, if any, and a certified copy of this Bond Resolution shall always be kept on file in the office of the Clerk, and shall be made available for inspection by the Owner of any Bond or a prospective purchaser or owner of any Bond authorized by this Bond Resolution, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental ordinance or resolution or of this Bond Resolution will be sent by the Clerk to any such Owner or prospective Owner. Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the Clerk a copy of the ordinance or resolution of the Issuer hereinabove provided for, duly certified, as well as proof of any required consent to such modification by the Owners of the Bonds then Outstanding. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification. The Issuer shall furnish to the Paying Agent a copy of any amendment to the Bonds or this Bond Resolution which affects the duties or obligations of the Paying Agent under this Bond Resolution. Section 1003. Notices, Consents and Other Instruments by Owners. Any notice, consent, request, direction, approval or other instrument to be signed and executed by the Owners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Owners in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any 600596.20219\BASICDOCS v.4 22 of the purposes of this Bond Resolution, and shall be conclusive in favor of the Issuer and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument, namely: (a)The fact and date of the execution by any person of any such instrument may be proved 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 Bonds, the amount or amounts, numbers and other identification of Bonds, and the date of holding the same shall be proved by the Bond Register. In determining whether the Owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Bond Resolution, Bonds owned by the Issuer shall be disregarded and deemed not to be Outstanding under this Bond Resolution, except that, in determining whether the Owners shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Owners know to be so owned shall be so disregarded. Notwithstanding the foregoing, Bonds so owned which have been pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of the Owners the pledgee's right so to act with respect to such Bonds and that the pledgee is not the Issuer. Section 1004. Notices. Any notice, request, complaint, demand or other communication required or desired to be given or filed under this Bond Resolution shall be in writing, given to the Notice Representative at the Notice Address and shall be deemed duly given or filed 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 Agent and the Purchaser may from time to time designate, by notice given hereunder to the others of such parties, such other address to which subsequent notices, certificates or other communications shall be sent. All notices given by: (a) certified or registered mail as aforesaid shall be deemed duly given as of the date they are so mailed; (b) fax as aforesaid shall be deemed duly given as of the date of confinnation of receipt. If, because of the temporary or permanent suspension of regular mail service or for any other reason, it is impossible or impractical to mail any notice in the manner herein provided, then such other form of notice as shall be made with the approval of the Paying Agent shall constitute a sufficient notice. Section 1005. Electronic Transactions. The transactions described in this Bond Resolution may be conducted, and documents related to the Bonds 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 by electronic means or transmissions) shall be deemed to be authentic and valid counterparts of such documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section l 006. Further Authority. The officers and officials of the Issuer, including the Mayor, Finance Director and Clerk, are hereby authorized and directed to execute all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Bond Resolution and to make ministerial alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. 600596.20219\BASICDOCS v.4 23 REGISTERED NUMBER EXHIBIT A (FORM OF BONDS) REGISTERED $ Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York Corporation (''DTC"), to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. UNITED STA TES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA GENERAL OBLIGATION REFUNDING BOND SERIES 2021-B Interest Rate: Maturity Date: REGISTERED OWNER: PRINCIPAL AMOUNT: Dated Date: September 8, 2021 CUSIP: 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 the Maturity Date, and to pay interest thereon at the Interest Rate per annum shown above (computed on the basis of a 360-day year of twelve 30-day months), from the Dated Date shown above, or from the most recent date to which interest has been paid or duly provided for, payable semiannually on April 1 and October 1 of each year, commencing April 1, 2022 (the "Interest Payment Dates"), until the Principal Amount has been paid. Method and Place of Payment. The principal or redemption price of this Bond shall be paid at maturity or upon earlier redemption to the person in whose name this Bond is registered at the maturity or redemption date thereof, upon presentation and surrender of this Bond at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The interest payable on this Bond on any Interest Payment Date shall be paid to the person in whose name this Bond is registered on the registration books maintained by the Bond Registrar at the close of business on the Record 600596.20219\BASICDOCS v.4 A-1 Date(s) for such interest, which shall be the 15th day (whether or not a business day) of the calendar month next preceding the Interest Payment Date. Such interest shall be payable (a) by check or draft mailed by the Paying Agent to the address of such Registered Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. The principal or redemption price of and interest on the Bonds shall be payable in any coin or currency that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. Interest not punctually paid will be paid in the manner established in the within defined Bond Resolution. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the hereinafter defined Bond Resolution. Authorization of Bonds. This Bond is one of an authorized series of Bonds of the Issuer designated "General Obligation Refunding Bonds, Series 2021-B," aggregating the principal amount of $6,220,000 (the "Bonds") issued for the purposes set forth in the Ordinance of the Issuer authorizing the issuance of the Bonds and the Resolution of the Issuer prescribing the form and details of the Bonds (collectively the "Bond Resolution"). The Bonds are issued by the authority of and in full compliance with the provisions, restrictions and limitations of the Constitution and laws of the State of Kansas, including K.S.A. 10-427 et seq., as amended, and all other provisions of the laws of the State of Kansas applicable thereto. General Obligations. The Bonds constitute general obligations of the Issuer payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of the improvements financed by the Refunded Bonds and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the 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 Issuer are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Redemption Prior to Maturity. The Bonds are subject to redemption prior to maturity as set forth in the Bond Resolution. Book-Entry System. The Bonds are being issued by means of a book-entry system with no physical distribution of bond certificates to be made except as provided in the Bond Resolution. One Bond certificate with respect to each date on which the Bonds are stated to mature or with respect to each form of Bonds, registered in the nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book-entry system will evidence positions held in the Bonds by the Securities Depository's participants, beneficial ownership of the Bonds in authorized denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The Issuer and the Bond Registrar will recognize the Securities Depository nominee, while the Registered Owner of this Bond, as the owner of this Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Bond, (ii) notices and (iii) voting. Transfer of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfer of principal, 600596.20219\BASICDOCS v.4 A-2 interest and any redemption premium payments to beneficial owners of the Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The Issuer and the Bond Registrar will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Bond, notwithstanding the provision hereinabove contained, payments of principal of, redemption premium, if any, and interest on this Bond shall be made in accordance with existing arrangements among the Issuer, the Bond Registrar and the Securities Depository. Transfer and Exchange. EXCEPT AS OTHERWISE PROVIDED IN THE BOND RESOLUTION, THIS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. This Bond may be transferred or exchanged, as provided in the Bond Resolution, only on the Bond Register kept for that purpose at the principal office of the Bond Registrar, upon surrender of this Bond, together with a written instrument of transfer or authorization for exchange satisfactory to the Bond Registrar duly executed by the Registered Owner or the Registered Owner's duly authorized agent, and thereupon a new Bond or Bonds in any Authorized Denomination of the same maturity and in the same aggregate principal amount shall be issued to the transferee in exchange therefor as provided in the Bond Resolution and upon payment of the charges therein prescribed. The Issuer shall pay all costs incurred in connection with the issuance, payment and initial registration of the Bonds and the cost of a reasonable supply of bond blanks. The Issuer and the Paying Agent may deem and treat the person in whose name this Bond is registered on the Bond Register as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and for all other purposes. The Bonds are issued in fully registered form in Authorized Denominations. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Resolution until the Certificate of Authentication and Registration hereon shall have been lawfully executed by the Bond Registrar. IT IS HEREBY DECLARED AND CERTIFIED that all acts, conditions, and things required to be done and to exist precedent to and in the issuance of this Bond have been properly done and performed and do exist in due and regular form and manner as required by the Constitution and laws of the State of Kansas, and that the total indebtedness of the Issuer, including this series of bonds, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the Issuer has caused this Bond 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. CITY OF SALINA, KANSAS (Facsimile Seal) By: ----�<f=a=c=si=rm=·=1ec.,,.) _______ _ Mayor ATTEST: By: (facsimile) 600596.20219\BASICDOCS v.4 A-3 Clerk CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond is one of a series of General Obligation Refunding Bonds, Series 2021-B, of the City of Salina, Kansas, described in the within-mentioned Bond Resolution. Registration Date: _______ _ Office of the State Treasurer, Topeka, Kansas, as Bond Registrar and Paying Agent By ____________ _ Registration Number: 0322-085-090821-357 LEGAL OPINION The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, P.C., Bond Counsel, which was dated and issued as of the date of original issuance and delivery of such Bonds: GILMORE & BELL, P.C. Attorneys at Law 100 N. Main Suite 800 Wichita, Kansas 67202 (PRINTED LEGAL OPINION) BOND ASSIGNMENT FOR VALUE RECEIVED, the undersigned do(es) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identification No.) the Bond to which this assignment is affixed in the outstanding principal amount of$ ____ � standing in the name of the undersigned on the books of the Bond Registrar. The undersigned do(es) hereby irrevocably constitute and appoint _________ as agent to transfer said Bond on the books of said Bond Registrar with full power of substitution in the premises. 600596.20219\BASICDOCS v.4 A-4 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 Bond has been duly registered in my office according to law as of September 8, 2021. WITNESS my hand and official seal. (Facsimile Seal) By: (facsimile) Clerk 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 Bond has been filed in the office of the State Treasurer, and that this Bond was registered in such office according to law on ______ _ WITNESS my hand and official seal. (Facsimile Seal) By: ____ (=f=ac�s=irm=·1e"'"').___ ______ _ Treasurer of the State of Kansas 600596.20219\BASICDOCS v 4 A-5 (PUBLISHED IN THE SALINA JOURNAL ON JULY 12, 2013) ORDINANCE NO. 13-10701 AN ORDINANCE AUIBORIZING AND PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2013-B, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECI1ON OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACI1ONS IN CONNECTION THEREWITH; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. WHEREAS, the City of Salin� Kansas (the "City") is a city of the first class, duly created, organized and existing under the Constitution and laws of the State; and WHEREAS, pursuant to K.S.A. 12-6a01 et seq., K.S.A. 12-685 et seq. and K.S.A. 12-1736 etseq. as amended, and other provisions of the laws of the State of Kansas applicable thereto, by proceedings duly had, the governing body of the City has authorized the following improvements (the "Improvements") to be made in the City, to-wit: Proiect Description Magnolia Hills Subdivision Fire Station # l East Magnolia Road Bicentennial Center North Ohio Grade Separation ; and Ordinance/ Resolution No. Ord. 13-10687 Res. 09-6681 Res. 11-6812 Res. 13-6988 Res. 06-6237 Authority K.S.A. 12-6a01 et seq.K.S.A. 12-1736 et seq.K.S.A. 12-685 et seq.K.S.A. 12-1736 et seq.K.S.A. 12-685 et seq.Total: Allocable Principal Amount of Bonds $262,704.31 825,000.00 2,127,295.69 1,010,000.00 105,000.00 $4,330,000.00 WHEREAS, the governing body of the City is authorized by law to issue general obligation bonds of the City to pay a portion of the costs of the Improvements; and WHEREAS, the governing body of the City has advertised the sale of the Bonds in accordance with the law and at a meeting held in the City on this date, awarded the sale of such Bonds to the best bidder. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. Definitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following words and terms in this Ordinance shall have the meanings hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular number shall include the plural and vice versa, and words importing persons shall include firms, associations and corporations, including public bodies, as well as natural persons. "Act" means the Constitution and statutes of the State including K.S.A. 10-101 to 10-125, inclusive, KS.A. 12-6a01 et seq., K.S.A. 12-685 et seq. and K.S.A. 12-1736 et seq., all as amended and supplemented from time to time. ii f! ·')I ,(' lj Ji Publisher's Affidavit ... r. ___ C ..... b .... d ... s..,,t;y....._fl.,.'n.,.k..__ __ , being duly sworndeclare that I am a 1,egaJ Coordinatorof THE SALINA JOURNAL, a daily newspaperpublished at Salina, Saline County, Kansas, and ofgeneral circulation in said county, which new spaperhas been admitted to the mails as second class matter insaid county, and continuously and uninterruptedlypublished for five consecutive years prior to firstpublication of attached notice, and that theBond Summary Notice hasbeen correctly published in the entire issue of saidnewspaper one time, publication being given in the issueof Tuly 12, 2013Subscribed and sworn to before �e, this /dfbdayof C)u£.1(/ Punter's Fee $94.50 ,,� MELISSA WINOHOU � MyAppt.Exp. J-F-74z A.D.20 /3 PUBLICATION SUMMARY oF ORDINANCE No. t.3-Jo1ul PAssED BY THE GOVERNINGBODY OF THE CITY OF SALINA, KANSAS ON THE gm DAY OF nJLY, 2013 SUMMARY On July 8, 2013, the Governing Body of the City of Salina, Kansas, adopted Ordinance No. J3-li)7DL authorizing and providing for the issuance of $'h23cM>,:0 principal amount of General ObligationImprovement Bonds, Series 2013-B, of the City of Salina, Kansas. The purpose of the issuance of the bonds is to provide funds to finance certain public improvements in and retire a portion of previously issued temporary notes of the City. In addition, the Ordinance provides for security of the bonds, terms, details and conditions for the issuance of the bonds and the rate covenants for the bonds. The complete text of this ordinance may be obtained or viewed free of charge at the office of the City Clerk, 300 West Ash Street, Salina, Kansas, or on the City's official website address, www.salina-ks.gov, where a reproduction of the original ordinance will be available for a minimum of one week following this summary publication. mary is certified this 9th day of July, 2013. Publish one time and return one Proof of Publication to the City Clerk and one to the City Attorney. Section 603. Remedies Cumulative .................................................................................................. 21 ARTICLE VII DEFEASANCE Section 701. Defeasance ................................................................................................................... 22 ARTICLE VIII TAX COVENANTS Section 801. General Covenants ...................................................................................................... 22 Section 802. Survival of Covenants ................................................................................................. 22 Section 901. Section 902. Section 903. Section 1001. Section 1002. Section 1003. Section 1004. Section 1005. Section 1006. Section 1007. Section 1008. Section 1009. ARTICLE IX CONTINUING DISCLOSURE REQUIREMENTS Disclosure Requirements ............................................................................................. 2323 Failure to Comply with Continuing Disclosure Requirements ................................... 23ARTICLE X MISCELLANEOUS PROVISIONS Annual Audit. .............................................................................................................. 23Amendtnents ................................................................................................................ 23Notices, Consents and Other Instruments by Owners ................................................. 24Notices ......................................................................................................................... 25Electronic Transactions ............................................................................................... 25Further Authority ......................................................................................................... 25Severability .................................................................................................................. 25Governing Law ............................................................................................................ 25Effective Date .............................................................................................................. 25EXlllBIT A-FORM OF BONDS ............................................................................................................. A-1 [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] ii RESOLUTION NO. 13-7020 A RESOLUTION PRESCRIBING THE FORM AND DETAILS OF AND AUTHORIZING AND DIRECTING THE SALE AND DELIVERY OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2013-B, OF THE CITY OF SALINA, KANSAS, PREVIOUSLY AUTHORIZED BY ORDINANCE NO. 13-10701 OF THE ISSUER; MAKING CERTAIN COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED THEREWITH. WHEREAS, the Issuer has heretofore passed the Ordinance authorizing the issuance· of the Bonds; and WHEREAS, the Ordinance authorized the governing body of the Issuer to adopt a resolution prescribing certain details and conditions and to make certain covenants with respect to the issuance of the Bonds. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: ARTICLE I DEFINITIONS Section 101. Def"mitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following words and terms as used in this Bond Resolution shall have the meanings hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular nwnber shall include the plural and vice versa, and words importing persons shall include firms, associations and corporations, including public bodies, as well as natural persons. "Act" means the Constitution and statutes of the State including K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-685 et seq. and K.S.A. 12-1736 etseq. all as amended and supplemented from time to time. "Authorized Denomination" means $5,000 or any integral multiples thereof. "Beneficial Owner" of the Bonds includes any Owner of the Bonds and any other Person who, directly or indirectly has the investment power with respect to such Bonds. "Bond and Interest Fund" means the Bond and Interest Fund of the Issuer for its general obligation bonds. "Bond Counsel" means the firm of Gilmore & Bell, P.C., or any other attorney or firm of attorneys whose expertise in matters relating to the issuance of obligations by states and their political subdivisions is nationally recognized and acceptable to the Issuer. "Bond Payment Date" means any date on which principal of or interest on any Bond is payable. 1 "Bond Register" means the books for the registration, transfer and exchange of Bonds kept at the office of the Bond Registrar. "Bond Registrar" means the State Treasurer, and any successors and assigns. "Bond Resolution" means this resolution relating to the Bonds. "Bonds" means the General Obligation Internal Improvement Bonds, Series 2013-B, authorized and issued by the Issuer pursuant to the Ordinance and this Bond Resolution. "Business Day" means a day other than a Saturday, Sunday or any day designated as a holiday by the Congress of the United States or by the Legislature of the State and on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its operations. "Cede & Co." means Cede & Co., as nominee of DTC and any successor nominee of DTC. "City" means the City of Salina, Kansas. "Clerk" means the duly appointed and/or elected Clerk or, in the Clerk's absence, the duly appointed Deputy Cleric or Acting Clerk of the Issuer. "Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations promulgated thereunder by the United States Department of the Treasury. "Costs of Issuance" means all costs of issuing the Bonds, including but not limited to all publication, printing, . signing and mailing expenses in connection therewith, registration fees, financial advisory fees, all legal fees and expenses of Bond Counsel and other legal counsel, expenses incurred in connection with compliance with the Code, all expenses incurred in connection with receiving ratings on the Bonds, and any premiums or expenses incurred in obtaining municipal bond insurance on the Bonds. "Dated Date" means July 15, 2013. "Debt Service Account" means the Debt Service Account for General Obligation Internal Improvement Bonds, Series 2013-B created within the Bond and Interest Fund pursuant to Section 501hereof. "Debt Service Requirements" means the aggregate principal payments (whether at maturity or pursuant· to scheduled mandatory sinking fund redemption requirements) and interest payments on the Bonds for the period of time for which calculated; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service Requirements to the extent that such principal or interest is payable from amounts deposited in trust, escrowed or otherwise set aside for the payment thereof with the Paying Agent or other commercial bank or trust company located in the State and having full trust powers. "Defaulted Interest" means interest on any Bond which is payable but not paid on any Interest Payment Date. "Defeasance Obligations" means any of the following obligations: 2 (a)United States Government Obligations that are not subject to redemption in advance oftheir maturity dates; or (b)obligations of any state or political subdivision of any state, the interest on which isexcluded from gross income for federal �ncome tax pwposes and which meet the following conditions: (1)the obligations are (i) not subject to redemption prior to maturity or (ii) thetrustee for such obligations has been given irrevocable instructions concerning their calling and redemption and the issuer of such obligations has covenanted not to redeem such obligations other than as set forth in such instructions; (2)the obligations are secured by cash or United States Government Obligations 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 satisfyany 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 the Rating Agency to United States Government Obligations. "Derivative" means any investment instrument whose market price is derived from the fluctuating value of an underlying asset, index, currency, futures contract, including futures, options and collateralized mortgage obligations. "Disclosure Undertaking" means the Issuer's Omnibus Continuing Disclosure Undertaking relating to certain obligations contained in the SEC Rule. "DTC" means The Depository Trust Company, a limited-pwpose 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 Bondsshall not be made when the same shall become due and payable, either at Stated Maturity or by proceedings for redemption or otherwise; (b)Payment of any installment of interest on any of the Bonds shall not be made when thesame shall become due; or 3 (c)The Issuer shall default in the due and punctual performance of any other of thecovenants, conditions, agreements and provisions contained in the Bonds or in this Bond Resolution ( other than the covenants relating to continuing disclosure requirements contained herein and in the Disclosure Undertaking) on the part of the Issuer to be performed, and such default shall continue for thirty (30) days after written notice specifying such default and requiring same to be remedied shall have been given to the Issuer by the Owner of any of the Bonds then Outstanding. "Federal Tax Certificate" means the Issuer's Federal Tax Certificate dated as of the Issue Date, as the same may be amended or supplemented in accordance with the provisions thereof. "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 pursuant to or referred to in Section501 hereof. "Improvement Fund" means the Improvement Fund for General Obligation Internal Improvement Bonds, Series 2013-B created pursuant to Section 501 hereof. "Improvements" means the improvements referred to in the preamble to the Ordinance and any Substitute Improvements. "Independent Accountant" means an independent certified public accountant or firm of independent certified public accountants at the time employed by the Issuer for the purpose of carrying out the duties imposed on the Independent Accountant by this Bond Resolution. "Interest Payment Date(s)" means the Stated Maturity of an installment of interest on any Bond which shall be April 1 and October 1 of each year, commencing April 1, 2014. "Issue Date" means the date when the Issuer delivers the Bonds to the Purchaser in exchange for the Purchase Price. "Issuer" means the City and any successors or assigns. "Maturity" when used with respect to any Bond means the date on which the principal of such Bond becomes due and payable as therein and herein provided, whether at the Stated Maturity thereof or call for redemption or otherwise. "Mayor" means the duly elected and acting Mayor, or in the Mayor's absence, the duly appointed and/or elected Vice Mayor or Acting Mayor of the Issuer. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns, and, if such corporation_ shall be dissolved or 4 liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer. "Notice Address" means with respect to the following entities: (a)To the Issuer at:City of Salina. Kansas Attn: City Clerk 300WestAsh Salina, Kansas 67402 Fax: (785)309-5738 (b)To the Paying Agent at:State Treasurer of the State of KansasLandon Office Building 900 Southwest Jackson, Suite 201 Topeka; Kansas 66612-1235 Fax: (785) 296-6976 ( c)To the Purchaser:Robert W. Baird & Co. 380 Knollwood St. Winston-Salem, North Carolina 27103 (d)To the Rating Agency(ies):Moody's Municipal Rating Desk 7 World Trade Center 250 Greenwich Street 23rd Floor New York, New York 10007 or such other address as is furnished in writing to the other parties referenced herein. "Notice Representative" means: (a)With respect to the Issuer, the Clerk.(b) With respect to the Bond Registrar and Paying Agent, the Director of Bond Services.( c)With respect to any Purchaser, the manager of its Municipal Bond Department.(d)With respect to any Rating Agency, any Vice President thereof."Official Statement" means Issuer's Official Statement relating to the Bonds. "Ordinance" means Ordinance No. 13-10701 of the Issuer authorizing the issuance of the Bonds, as amended from time to time. 5 "Outstanding" means, when used with reference to the Bonds, as of a particular date of determination, all Bonds theretofore authenticated and delivered, except the following Bonds: (a)Bonds theretofore canceled by the Paying Agent or delivered to the Paying Agent forcancellation; (b)Bonds deemed to be paid in accordance with the provisions of Section 701 hereof; and (c)Bonds in exchange for or in lieu of which other Bonds have been authenticated anddelivered hereunder. "Owner" when used with respect to any Bond means the Person in whose name such Bond is registered on the Bond Register. Whenever consent of the Owners is required pursuant to the terms of this Bond Resolution, and the Owner of the Bonds, as set forth on the Bond Register, is Cede & Co., the term Owner shall be deemed to be the Beneficial Owner of the Bonds. "Participants" means those financial institutions for whom the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Paying Agent" means the State Treasurer, and any successors and assigns. "Permitted Investments" shall mean the investments hereinafter described, provided, however, no moneys or funds shall be invested in a Derivative: (a) investments authorized by K.S.A. 12-1675 and amendments thereto; (b) the municipal investment pool established pursuant to K.S.A. 12-1677a, and amendments thereto; (c) direct obligations of the United States Government or any agency thereof; (d) the Issuer's temporary notes issued pursuant to K.S.A. 10-123 and amendments thereto; (e) interest-bearing time deposits in commercial banks or trust companies located in the county or counties in which the Issuer is located which are insured by the Federal Deposit Insurance Corporation or collateralized by securities described in (c); (f) obligations of the federal national mortgage association, federal home loan banks, federal home loan mortgage corporation or government national mortgage association; (g) repurchase agreements for securities described in (c) or (f); (h) investment agreements. or other obligations of a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody's or Standard & Poor's; (i) investments and shares or units of a money market fund or trust, the portfolio of which is comprised entirely of securities described in (c) or (f); G) receipts evidencing ownership interests in securities or portions thereof described in (c) or (f); (k) municipal bonds or other obligations issued by any municipality of the State as defined in K.S.A. 10-1101 which are general obligations of the municipality issuing the same; or (1) bonds of anymunicipality of the State as defined in K.S.A. 10-1101 which have been refunded in advance of theirmaturity and are fully secured as to payment of principal and interest thereon by deposit in trust, underescrow agreement with a bank, of securities described in (c) or (f), all as may be further restricted ormodified by amendments to applicable State law. "Person" means any natural person, corporation, partnership, joint venture, association, firm, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body. "Purchase Price" means the principal amount of the Bonds plus accrued interest to the date of delivery, plus a bid premium of$105,217.87. 6 Section 501 Section 210 Section 204 Stated Maturity October 1 2014 2015 2016 2017 2018 2019 2020 2021 SERIAL BONDS Principal Amount $205,000 Annual Rate Stated Maturity Principal Amount $270,000 235,000 235,000 240,000 245,000 250,000 260,000 265,000 of Interest 3.00% 3.00 3.00 3.00 3.00 3.00 3.00 3.00 October 1 2022 2023 2024 2025 2026 2027 2028 275,000 285,000 290,000 300,000 310,000 315,000 TERMBOND Stated Maturity October 1 2033 Principal Amount $350,000 Annual Rate of Interest 4.00% Annual Rate of Interest 3.00% 3.00 3.00 3.50 3.50 3.50 3.50 The Bonds· shall bear interest at the above specified rates (computed on the basis of a 360-day year of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner set forth in Section 204 hereof. Each of the Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be printed in accordance with the format required by the Attorney General of the State and shall be substantially in the form attached hereto as EXHIBIT A or as may be required by the Attorney General pursuant to the Notice of Systems of Registration for Kansas Municipal Bonds, 2 Kan. Reg. 921 (1983), in accordance with the Kansas Bond Registration Law, KS.A. 10-620 et seq. Section 203. Designation of Paying Agent and Bond Registrar. The State Treasurer is hereby designated as the Paying Agent for the payment of principal of and interest on the Bonds and Bond Registrar with respect to the registration, transfer and exchange of Bonds. The Mayor of the Issuer is hereby authorized and empowered to execute on behalf of the Issuer an agreement with the Bond Registrar and Paying Agent for the Bonds. The Issuer will at all times maintain a Paying Agent and Bond Registrar meeting the qualifications herein described for the performance of the duties hereunder. The Issuer reserves the right to appoint a successor Paying Agent or Bond Registrar by (a) filing with the Paying Agent or Bond Registrar then performing such function a certified copy of the proceedings giving notice of the termination of such Paying Agent or Bond Registrar and appointing a successor, and (b) causing notice of · appointment of the successor Paying Agent and Bond Registrar to be given by first class mail to eachOwner. No resignation or removal of the Paying Agent or Bond Registrar shall become effective until asuccessor has been appointed and has accepted the duties of Paying Agent or Bond Registrar.Every Paying Agent or Bond Registrar appointed hereunder shall at all times nieet the requirements �fK.S.A. 10-501 et seq. and K.S.A. 10-620 et seq., respectively. Section 204. Method and Place of Payment of the Bonds. The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. 9 The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office of the Paying Agent. The interest payable on each Bond on any Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Owner; or (b) in the case of ·an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount ofBonds, by electronic transfer to such Owner upon written notice given to the Bond 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 to have such transfer directed.Notwithstanding the foregoing provisions of this Section, any Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified in this paragraph. The Issuer shall notify the Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date 'of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Paying Agent) and shall deposit with the Paying Agent at the time of such notice an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment. Following receipt of such funds the Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 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 therefore to be mailed, by first class mail, postage prepaid, to each Owner of a Bond entitled to such notice at the address of such Owner as it appears on the Bond Register not less than 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 Bonds and at least annually shall forward a copy or summary of such records to the Issuer. Section 205. Payments Due on Saturdays, Sundays and Holidays. In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. Section 206. Registration, Transfer and Exchange of Bonds. The Issuer covenants that, as long as any of the Bonds remain Outstanding, it will cause the Bond Register to be kept at the office of the Bond Registrar as herein provided. Each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as provided in this Section. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Bond or Bonds in any Authorized Denomination of the same 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 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 Bonds being issued to any Ownerother than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or(b)if the Bond Registrar receives written notice from Participants having interests in not lessthan 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 contin�tion of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to Owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the Issuer, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the Issuer, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository in accordance with the following paragraph, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the Issuer. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the Issuer may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of Bonds to the successor Securities Depository in an Authorized Denominations and form as provided herein. 13 Mandatory Redemption. The Term Bonds shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements of this Section at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. The taxes levied in Section 402 hereof which are to be deposited into the Debt Service Account shall be sufficient to redeem. and the Issuer shall redeem on October 1 in each year, the following principal amounts of such Term Bonds: 'Final Maturity Principal Amount $65,000 65,000 70,000 70,000 80,000 Year 2029 2030 2031 2032 2033• At its option, to be exercised on or before the 45th day next preceding any mandatory Redemption Date, the Issuer may: (1) deliver to the Paying Agent for cancellation Term Bonds subject to mandatory redemption on said mandatory Redemption Date, in any aggregate principal amount desired; or (2) furnish the Paying Agent funds, together with appropriate instructions, for the purpose of purchasing any Term Bonds subject to mandatory redemption on said mandatory Redemption Date from any Owner thereof whereupon the Paying Agent shall expend such funds for such purpose to such extent as may be practical; or (3) receive a credit with respect to the mandatory redemption obligation of the Issuer under this Section for any Term Bonds subject to mandatory redemption on said mandatory Redemption Date which, prior to such date, have been redeemed ( other than through the operation of the mandatory redemption requirements of this subsection) and cancelled by the Paying Agent and not theretofore applied as a credit against any redemption obligation under this subsection. Each Term Bond so delivered or previously purchased or redeemed shall be credited at 100% of the principal amount thereof on the obligation of the Issuer to redeem Term Bonds of the same Stated Maturity on such mandatory Redemption Date, and any excess of such amount shall be credited on future mandatory redemption obligations for Term Bonds of the same Stated Maturity as designated by the Issuer, and the principal amount of Term Bonds to be redeemed by operation of the requirements of this Section shall be accordingly reduced. If the Issuer intends to exercise any option granted by the provisions of clauses (1 ), (2)or (3) above, the Issuer will, on or before the 45th day next preceding each mandatory RedemptionDate, furnish the Paying Agent a written certificate indicating to what extent the provisions of said clauses(1 ), (2) and (3) are to be complied with, with respect to such mandatory redemption payment.Section 302. Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the Issuer shall determine. Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in a minimum Authorized Denomination of principal amount in such equitable manner as the Bond Registrar may 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 a minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of the denomination of a minimum Authorized Denomination. If it is determined that one or more, but not all, of a minimum Authorized Denomination of face value represented by any Bond is selected for redemption, then upon notice of intention to redeem a minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the 15 Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of a minimum Authorized Denomination of face value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of a minimum Authorized Denomination of face value called for redemption (and to that extent only). Section 303. Notice and Effect of Call for Redemption. In the event the Issuer desires to call the Bonds for redemption prior to maturity, written notice of such intent shall be provided to the Bond Registrar in accordance with K.S.A. 10-129, as amended, not less than 45 days prior to the Redemption Date. The Bond Registrar shall call Bonds for redemption and payment and shall give notice of such redemption as herein provided upon receipt by the Bond Registrar at least 45 days prior to the Redemption Date of written instructions of the Issuer specifying the principal amount, Stated Maturities, Redemption Date and Redemption Prices of the Bonds to be called for redemption. The foregoing provisions of this paragraph shall not apply in the case of any mandatory redemption of Term Bonds hereunder, and Term Bonds shall be called by the Paying Agent for redemption pursuant to such mandatory redemption requirements without the necessity of any action by the Issuer and whether or not the Paying Agent holds moneys available and sufficient to effect the required redemption. Unless waived by any Owner of Bonds to be redeemed, if the Issuer shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the Bond Registrar, the State Treasurer and the Purchaser. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a)the Redemption Date;(b)the Redemption Price;(c)if less than all Outstanding Bonds are to be redeemed, the identification (and, in the caseof 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 ceaseto accrue from and after the Redemption Date; and(e)the place where such Bonds are to be surrendered for payment of the Redemption Price,which shall be the principal office of the Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the Issuer shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. 16 For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified in this Section to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in tum. 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. 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 RedemptiQn Price therein specified, and from and after the Redemption Date (unless the Issuer defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with such notice, the Redemption Price of such Bonds shall be paid by the Paying Agent. Installments of interest due on or prior to the Redemption Date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Owner a new Bond or Bonds of the same Stated Maturity in the amount of the unpaid principal as provided herein. All Bonds that have been surrendered for redemption shall be cancelled and destroyed by the Paying Agent as provided herein and shall not be reissued. In addition to the foregoing notice, the Issuer shall provide such notices of redemption as are required by the Disclosure Undertaking. Further notice may be given by the Issuer or the Bond Registrar on behalf of the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if official notice thereof is given as above prescribed: (a)Each further notice of redemption given hereunder shall contain the information requiredabove for an official notice of redemption plus (1) the CUSIP numbers of all Bonds being redeemed; (2) the date of issue of the Bonds as originally issued; (3) the rate of interest borne by each Bond being redeemed; ( 4) the maturity date of each Bond being redeemed; and ( 5) any other descriptive information needed to identify accurately the Bonds being redeemed. (b)Each further notice of redemption shall be sent at least one day before the mailing of. notice to Owners by first class, registered or certified mail or overnight delivery, as determined by the Bond Registrar, to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds. ( c)Each check or other transfer of funds issued for the payment of the Redemption Price ofBonds being redeemed shall bear or have enclosed the CUSIP number of the Bonds being redeemed with the proceeds of such chec� or other transfer. The Paying Agent is also directed to comply with any mandatory standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. 17 ARTICLE IV SECURITY FOR BONDS Section 401. Security for the Bonds. The Bonds shall be general obligations of the Issuer payable as to both principal and interest 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 Issuer. 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 Issuer are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. �ection 402. 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. The taxes and/or assessments referred to above shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes shall be deposited in the Bond and Interest Fund, shall be kept separate an4 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, talcing into account any scheduled mandatory redemptions, and the fees and expenses of the Paying Agent. If at any time said taxes and/or assessments are not collected in time to pay the principal of or interest on the Bonds when due, the Treasurer is hereby authorized and directed to pay said principal or interest out of the general funds of the Issuer and to reimburse said general funds fo� money so expended when said taxes are collected. ARTICLE V ESTABLISHMENT OF FUNDS AND ACCOUNTS DEPOSIT AND APPLICATION OF BOND PROCEEDS Section S01. Creation of Funds and Accounts. Simultaneously with the issuance of the Bonds, there shall be created within the Treasury of the Issuer the following Funds and Accounts: (a)Improvement Fund for General Obligation Internal Improvement Bonds, Series 2013-B;(b)Debt Service Account for General Obligation Internal Improvement Bonds, Series 2013-B (within the Bond and Interest Fund); and(c)Rebate Fund for General Obligation Internal Improvement Bonds, Series 2013-B.18 The Funds and Accounts established herein shall be administered in accordance with the provisions of this Bond Resolution so long as the Bonds are Outstanding. Section 502. Deposit of Bond Proceeds. The net proceeds received from the sale of the Bonds shall be deposited simultaneously with the delivery of the Bonds as follows: (a)All accrued interest received from the sale of the Bonds plus premium in the amount of$7,009.30 shall be deposited in the Debt Service Account. (b)The remaining balance of the proceeds derived from the sale of the Bonds shall bedeposited in the Improvement Fund.· Section 503. Application of Moneys in the Improvement Fund. Moneys in the Improvement Fund shall be used for the sole pwpose 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 Bonds during construction of the Improvements; ( c) paying Costs of Issuance; ( d) retiring the Refunded Notes; and (e) transferring any amounts to the Rebate Fund required by Section 506 hereof. Upon completion of the Improvements, any surplus 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 Bonds 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 authorizing the use of the proceeds of the Bonds to pay the Financeable Costs of the Substitute Improvement has been duly adopted by the governing body of the Issuer pursuant to this Section, (3) the Attorney General of the State has approved the amendment made by such resolution to the transcript of proceedings for the Bonds to include the Substitute Improvements; and ( 4) the use of the proceeds of the Bonds to pay the Financeable Cost of the Substitute Improvement will not adversely affect the tax-exempt status of the Bonds under State or federal law. (b)The Issuer may reallocate expenditure of Bond proceeds among all Improvementsfinanced by the Bonds; 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 Bonds allocated to any Improvement to exceed the Financeable Costs of the Improvement; and (3) the reallocation will not adversely affect the tax-exempt status of the Bonds under State or federal law. Section SOS. Application of Moneys in Debt Service Account. All amounts paid and credited to the Debt Service Account shall be expended and used by the Issuer for the sole purpose of paying the principal or Redemption Price of and interest on the Bonds as and when the s�me become due and the usual and customary fees and expenses of the Bond Registrar and Paying Agent. The Treasurer is authorized and directed to withdraw from the Debt Service Account sums sufficient to pay both principal or Redemption Price of and interest on the Bonds and the fees and expenses of the Bond Registrar and Paying Agent as and when the same become due, and to forward such sums to the Paying Agent in a manner which ensures that the Paying Agent will receive immediately available funds in such amounts on or before the Business Day immediately preceding the dates when such principal, interest and fees of the Bond Registrar and Paying Agent will become due. If, through the lapse of time or otherwise, the Owners 19 of Bonds are no longer entitled to enforce payment of the Bonds or the interest thereon, the Paying Agent shall return said funds to the Issuer. All moneys deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Bond Resolution and shall be qeld in trust by the Paying Agent for the benefit of the Owners of the Bonds entitled to payment from such moneys. Any moneys or investments remaining in the Debt Service Account after the retirement of the Bonds shall be transferred and paid into the Bond and futerest Fund. Section 506. Application of Moneys in the Rebate Fund. (a)There shall be deposited in the Rebate Fund such amounts as are required to be 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 Bonds shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and the Federal Tax Certificate. (b)The Issuer shall periodically determine the arbitrage rebate, if any, under Code § 148(f) inaccordance with the Federal Tax Certificate, and the Issuer shall make payments to the United States of America at the times and in the amounts determined under the Federal Tax Certificate. Any moneys remaining in the Rebate Fund after redemption and payment of all of the Bonds and payment and satisfaction of any Rebate Amount, or provision made therefor, shall be deposited into the Bond and futerest Fund. (c)Notwithstanding any other provision of this Bond Resolution, including in particularArticle VII hereof, the obligation to pay arbitrage rebate to the United States of America and to comply with all other requirements of this Section and the Federal Tax Certificate shall survive the defeasance or payment in full of the Bonds. Section 507. Deposits and Investment of Moneys. Moneys in each of the Funds and Accounts shall be deposited in accordance with laws of the State, in a bank, savings and loan association or savings bank organized under the laws of the State, any other state or the United States: (a) which has a main or branch office located in the Issuer; or (b) if no such entity has a main or branch office located in the Issuer, with such an entity that has a main or branch office located in the county or counties in which the Issuer is located. All such depositaries shall be members of the Federal Deposit Insurance Corporation, or otherwise as permitted by State law. All such deposits shall be invested in Permitted fuvestments as set forth in this Article or shall be adequately secured as provided by the laws of the State. All moneys held in the Funds and Accounts shall be kept separate and apart from all other funds of the Issuer so that there shall be no commingling with any other funds of the Issuer. Moneys held in any Fund or Account may be invested in accordance with this Bond Resolution and the Federal Tax Certificate in Permitted Investments; provided, however, that no such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which such fund was created. All earnings on any investments held in any Fund or Account shall accrue to and become a part of such Fund or Account; provided that, during the period of construction of the Improvements, earnings on the investment of such funds may, at the discretion of the Issuer, be credited to the Debt Service Account. 20 ARTICLE VI DEFAULT AND REMEDIES Section 601. Remedies. The provisions of the Bond Resolution, including the covenants and agreements herein contained, shall constitute a contract between the Issuer and the Owners of the Bonds. If an Event of Default occurs and shall be continuing, the Owner or Owners of not less than 10% in principal amount of the Bonds at the time Outstanding shall have the right for the equal benefit and protection of all Owners of Bonds similarly situated: (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 Bond Resolution or by the Constitution and laws of the State; (b)by suit, action or other proceedings in equity or at law to require the Issuer, its officers,agents and employees to account as if they were the trustees of an express trust; and (c)by suit, action or other proceedings in equity or at law to enjoin any acts or things whichmay be unlawful or in violation of the rights of the Owners of the Bonds. Section 602. Limitation on Rights of Owners. The covenants and agreements of the Issuer contained herein and in the Bonds shall be for the equal benefit, protection, and security of the Owners of any or all of the Bonds, all of which Bonds shall be of equal rank and without preference or priority of one Bond over any other Bond in the application of the funds herein pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this Bond Resolution. No one or more Owners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and a1i proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Outstanding Bonds. Section 603. Remedies Cumulative. No remedy conferred herein upon the Owners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred herein. No waiver of any default or breach of duty or contract by the Owner of any Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No delay or omission of any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Owners of the Bonds by this Bond Resolution may be enforced and exercised from time to time and as often as may be deemed expedient. If action or proceedings taken by any Owner on account of any default or to enforce any right or exercise any remedy has been discontinued or abandoned for any reason, or shall have been determined adversely to such Owner, then, and in every such case, the Issuer and the Owners of the Bonds shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Owners shall continue as if no such suit, action or other proceedings had been brought or taken. 21 ARTICLE VII DEFEASANCE Section 701. Def easance. When any or all of the Bonds, redemption premium, if any, or scheduled interest payments thereon have been paid and discharged, then the requirements contained in this Bond Resolution and the pledge of the Issuer's faith and credit hereunder and all other rights granted hereby shall terminate with respect to the Bonds or scheduled interest payments thereon so paid and discharged. Bonds, redemption premium, if any, or scheduled interest payments thereon shall be deemed to have been paid and discharged within the meaning of this Bond Resolution if there has been deposited with the Paying Agent, or other commercial bank or trust company located in the State and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Bonds or the interest payments thereon, in trus� for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned on any such Defeasance Obligations, will be sufficient for the payment of the principal of or Redemption Price of said Bonds and/or interest accrued to the Stated Maturity or Redemption Date, or if default in such payment has occurred on such date, then to the date of the tender of such payments. If the amount to be so deposited is based on the Redemption Price of any Bonds, no such satisfaction shall occur until (a) the Issuer has elected to redeem such Bonds, and (b) either notice of such redemption has been given, or the Issuer has given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Bond Registrar to give such notice of redemption in compliance with Section 303 of this Bond Resolution. Any money and Defeasance Obligations that at any time shall be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the Issuer, for the purpose of paying and discharging any of the Bonds, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Owners of the Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All money and Defeasance Obligations deposited with the Paying Agent or such bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions of this Bond Resolution. ARTICLE VIII TAX COVENANTS Section 801. General Covenants. The Issuer covenants and agrees that it will comply with: (a)all applicable provisions of the Code necessary to maintain the exclusion from gross income forfederal income tax purposes of the interest on the Bonds; and (b) all provisions and requirements of theFederal Tax Certificate. The Mayor, Finance Director and Clerk are hereby authorized and directed toexecute the Federal Tax Certificate in a form approved by Bond Counsel, for and on behalf of and as theact and deed of the Issuer. The Issuer will, in addition, adopt such other ordinances or resolutions andtake such other actions as may be necessary to comply with the Code and with all other applicable futurelaws, regulations, published rulings and judicial decisions, in order to ensure that the interest on theBonds will remain excluded from federal gross income, to the extent any such actions can be taken by theIssuer.Section 802. Survival of Covenants. The covenants contained in this Article and in the Federal Tax Certificate shall remain in full force and effect notwithstanding the defeasance of the Bonds pursuant to Article VII hereof or any other provision o( this Bond Resolution until such time as is set forth in the Federal Tax Certificate. 22 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 incorporated herein by reference. Such covenant shall be for the benefit of and enforceable by the Purchaser and the Beneficial Owners. Section 903. . 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 IO days of receipt of such written notice, the Purchaser or any Beneficial Owner may in its discretion, without notice or demand, proceed to enforce compliance by a suit or suits in equity for the specific performance of such covenant or agreement contained in the preceding section or for the enforcement of any other appropriate legal or equitable rem(?dy, as the Purchaser and/or any Beneficial Owner shall deem effectual to protect and enforce any of the duties of the Issuer under such preceding section. Notwithstanding any other provision of this Bond Resolution, failure of the Issuer to comply with its covenants contained in the preceding section shall not be considered an Event of Default under this Bond Resolution. ARTICLEX MISCELLANEOUS PROVISIONS Section 1001. Annual Audit. Annually, promptly after the end of the Fiscal Year, the Issuer will cause an audit to be made of the financial statements of the Issuer for the preceding Fiscal Year by an Independent Accountant. Within 30 days after the completion of each such audit, a copy thereof shall be filed in the office of the Clerk. Such audit shall at all times during the usual business hours be open to the examination and inspection by any taxpayer, any Owner of any of the Bonds, or by anyone acting for or on behalf of such taxpayer or Owner. Upon payment of the reasonable cost of preparing and mailing the same, a copy of any annual audit will, upon request, be sent to any Owner or prospective Owner. As soon as possible after the completion of the annual audit, the governing body 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 Bond Resolution, the Issuer shall promptly cure such deficiency. Section 1002. Amendments. The rights and duties of the Issuer and the Owners, and the terms and provisions of the Bonds or of this Bond Resolution, may be amended or modified at any time in any respect by resolution of the Issuer with the written consent of the Owners of not less than a majority inprincipal amount of the Bonds then Outstanding, such consent to be evidenced by an instrument or instruments executed by such Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments s�all be filed with the Clerk, but no such modification or alteration shall: ( a)extend the maturity of any payment of principal or interest due upon any Bond;23 (b)effect a reduction in the amount which the Issuer is required to pay as principal of orinterest on any Bond; ( c)permit preference or priority of any Bond over any other Bond; or( d)reduce the percentage in principal amount of Bonds required· for the written consent toany modification or alteration of the provisions of this Bond Resolution. Any provision of the Bonds or of this Bond Resolution may, however, be amended or modified by resolution 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 Bonds at the time Outstanding. Without notice to or the consent of any Owners, the Issuer may amend or supplement this Bond Resolution for the purpose of curing any formal defect, omission, inconsistency or ambiguity herein, to grant to or confer upon the Owners any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Owners, to more precisely identify the Improvements, to reallocate proceeqs of the Bonds among Improvements, to provide for Substitute Improvements, to conform this Bond Resolution to the Code or future applicable federal law concerning tax-exempt obligations, or in connection with any other change therein which is not materially adverse to the interests of the Owners. Every amendment or modification of the provisions of the Bonds or of this Bond Resolution, to which the written consent of the Owners is given, as above provided, shall be expressed in a resolution adopted by the governing body of the Issuer amending or supplementing the provisions of this Bond Resolution and shall be deemed to be a part of this Bond Resolution. A certified copy of every such amendatory or supplemental resolution, if any, and a certified copy of this Bond Resolution shall always be kept on file in the office of the Clerk, and shall be made available for inspection by the Owner of any Bond or a prospective purchaser or owner of any Bond authorized by this Bond Resolution, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental resolution or of this Bond Resolution will be sent by the Clerk to any such Owner or prospective Owner. Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the Clerk a copy of the resolution of the Issuer hereinabove provided for, duly certified, as well as proof of any required consent to such modification by the Owners of the Bonds then Outstanding. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification. The Issuer shall furnish to the Paying Agent a copy of any amendment to the Bonds or this Bond Resolution which affects the duties or obligations of the Paying Agent under this Bond Resolution. Section 1003. Notices, Consents and Other Instruments by Owners. Any notice, consent, request, direction, approval or other instrument to be signed and executed by the Owners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Owners in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of this Bond Resolution, and shall be conclusive in favor of the Issuer and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument, namely: (a)The fact and date of the execution by any person of any such instrument may be provedby a certificate of any officer in any jurisdiction who by law has power to take acknowledgments within 24 such jurisdiction that the person signing such instrument acknowledged before such officer the execution thereof, or by affidavit of any witness to such execution. (b)The fact of ownership of Bonds, the amount or amounts, numbers and other identificationof Bonds, and the date of holding the same shall be proved by the Bond Register. In determining whether the Owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Bond Resolution, Bonds owned by the Issuer shall be disregarded and deemed not to be Outstanding under this Bond Resolution, except that, in determining whether the Owners shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Owners know to be so owned shall be so disregarded. Notwithstanding the foregoing, Bonds so owned which have been pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of the Owners the pledgee's right so to act with respect to such Bonds and that the pledgee is not the Issuer. Section 1004. Notices. Any notice, request, complaint, demand or other communication required or desired to be given or filed under this Bond Resolution shall be in writing, given to the Notice Representative at the Notice Address and shall be deemed duly given or filed 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. Toe Issuer, the Paying Agent and the Purchaser may from time to time designate, by notice given hereunder to the others of such parties, such other address to which subsequent notices, certificates or other communications shall be sent. All notices given by: (a) certified or registered mail as aforesaid shall be deemed duly given as of the date they are so mailed; (b) fax as aforesaid shall be deemed duly given as of the date of confirmation of receipt. If, because of the temporary or permanent suspension of regular mail service or for any other reason, it is impossible or impractical to mail any notice in the manner herein provided, then such other form of notice as shall be made with the approval of the Paying Agent shall constitute a sufficient notice. Section 1005. Electronic Transactions. The issuance of the Bonds and the transactions related thereto and described herein may be conducted and documents may be stored by electronic means. Section 1006. Further Authority. The officers and officials of the Issuer. including the Mayor and Clerk, are hereby authorized and directed to execute all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Bond Resolution and to make ministerial alterations, changes or additions in the foregoing agreements, statements. instruments and other documents herein approved, authorized and confirmed which they may approve, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. Section 1007. Severability. If any section or. other part of this Bond Resolution, whether large or small, is for any reason held invalid, the invalidity thereof shall not affect the validity of the other provisions of this Bond Resolution. Section 1008. Governing Law. This Bond Resolution shall be governed exclusively by and construed in accordance with the applicable laws of the State. Section 1009. Effective Date. This Bond Resolution shall take effect and be in full force from and after its adoption by the governing body of the Issuer. 25 2 Publisher's Affidavit ... r ____ c ..... h,...ri..._scy:y....F.,.i..,n ... k..._ __ , being duly sworn declare that I am a legal Comdim1t0r of THE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for fi\•e consecutive. _years prior to first. publication of attached notice, and that the Ordiriance 14-1073'? Notice has been correctly published in the entire issue of said newspaper one time, publication being given in the issue of July 17, 2014 Ch.u:slu M I f /7� Subscribed and sworn to be ore me, this day of Q,4 A _.....:;_o-. 2_0_/_i/-.,.. Notary Public Printer's Fee S99.50 /1'\ MEUSSA WINDHOLZ � My•""' exp 3 --8-lG, ,V,11,,,....... .,. ... C'lPublishecl Ir) 1111 Se.Ina ;,..banal July 17, 2014) {I .-PUBLICATION SlJl,f, ew.Rv OF ORDINANCE ·..,NO. 14•10737, PASSED. �SY THE GOVERHING f...BODSAUYOF THE CITY OF r- NA. l<ANSAS OH C:lliE141HDAYOF � ._ ':.ULV, :!!Ot4 , �� j���.�-. •lhel ,.,._■ml�Bildy al lh& Cl1)' al , Kansas, 1adapled Inane& No. 14-10737, -� and � far Ille Issuance or $7,570.:.� l)llnc:lpat llllOUnl m ueninr ObllgallOII 1nremar Jmprowernens � Serlet 201•-A. ol !lie Clly D1 Sa1na, Kansas, Th• PIIIPON'OI fllt•111u.:' IIIC9 OI Ille bonds Is 10 r p,o,,lde lund1 10 finance certain p11bllc lmprDYe• �l!ntl arid nllre a pxt,on/ DI J)l'IYlouSly Issued temporary notes: al lh& Qly. In addlllon, 121e Onllna11Ce �ISfor securllyellhe ��t_i llllllls, delals andl ��DIis for D11 INu-• ance illheti&ids and ina' rait covenants lo, the boftd�. The COmplllte 1111!1 Cl INS arGlnallCe may 1111 oblalned or 111ewed fret at ct,a,ge at Iha Clfla ar 1111 Clly a��I-� Wnt Ash Slri!el, .,.,...., Klusas, cir an lhe Clly's OIIICJlll wllb-J lite lldlhss, -.&alin&lcs�OI! wh� a�lion o! Iha attglnill ordl •' n■ncl WID be &valable �a mltllmum 01 an& week{ ronawrno this summary' �--· .- lhls summary Is ceruled this 15th •day al Julj,, 2014. , , �ls.'G119A.Bntsan City Aqamey • I · . 0111 TABLE OF CONTENTS RESOLUTION NO.14-7119 A RESOLUTION PRESCRIBING THE FORM AND DETAILS OF AND AUTHORIZING AND DIRECTING THE SALE AND DELIVERY OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2014-A, OF THE CITY OF SALINA, KANSAS, PREVIOUSLY AUTHORIZED BY ORDINANCE NO. 13-10701 OF THE ISSUER; MAKING CERTAIN COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED THEREWITH. WHEREAS, the Issuer has heretofore passed the Ordinance authorizing the issuance of the Bonds; and WHEREAS, the Ordinance authorized the governing body of the Issuer to adopt a resolution prescribing certain details and conditions and to make certain covenants with respect to the issuance of the Bonds. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: ARTICLE I DEFINITIONS Section 101. Definitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following words and terms as used in this Bond Resolution shall have the meanings hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular number shall include the plural and vice versa, and words importing persons shall include firms, associations and corporations, including public bodies, as well as natural persons. "Act" means the Constitution and statutes of the State including K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-685 et seq. and K.S.A. 12-2101 etseq. all as amended and supplemented from time to time. "Authorized Denomination" means $5,000 or any integral multiples thereof. "Beneficial Owner" of the Bonds includes any Owner of the Bonds and any other Person who, directly or indirectly has the investment power with respect to such Bonds. "Bond and Interest Fund" means the Bond and Interest Fund of the Issuer for its general obligation bonds. "Bond Counsel" means the firm of Gilmore & Bell, P.C., or any other attorney or firm of attorneys whose expertise in matters relating to the issuance of obligations by states and their political subdivisions is nationally recognized and acceptable to the Issuer. "Bond Payment Date" means any date on which principal of or interest on any Bond is payable. 1 "Bond Register" means the books for the registration. transfer and exchange of Bonds kept at the office of the Bond Registrar. "Bond Registrar" means the State Treasurer. and any successors and assigns. "Bond Resolution" means this resolution relating to the Bonds. "Bonds" means the General Obligation Internal Improvement Bonds, Series 2014-A. authorized and issued by the Issuer pursuant to the Ordinance and this Bond Resolution. "Business Day" means a day other than a Saturday, Sunday or any day designated as a holiday by the Congress of the United States or by the Legislature of the State and on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its operations. "Cede & Co." means Cede & Co., as nominee ofDTC and any successor nominee ofDTC. "City" means the City of Salina, Kansas. "Clerk" means the duly appointed and/or elected Clerk or, in the Clerk's absence, the duly appointed Deputy Clerk or Acting Clerk of the Issuer. "Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations promulgated thereunder by the United States Department of the Treasury. "Costs of Issuance" means all costs of issuing the Bonds, including but not limited to all publication, printing, signing and mailing expenses in connection therewith, registration fees, financial advisory fees, all legal fees and expenses of Bond Counsel and other legal counsel, expenses incurred in connection with compliance with the Code, all expenses incurred in connection with receiving ratings on the Bonds, and any premiums or expenses incurred in obtaining municipal bond insurance on the Bonds. "Dated Date" means July 30, 2014. "Debt Service Account" means the Debt Service Account for General Obligation Internal Improvement Bonds, Series 2014-A created within the Bond and Interest Fund pursuant to Section 501hereof. "Debt Service Requirements" means the aggregate principal payments (whether at maturity or pursuant to scheduled mandatory sinking fund redemption requirements) and interest payments on the Bonds for the period of time for which calculated; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service Requirements to the extent that such principal or interest is payable from amounts deposited in trust, escrowed or otheiwise 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 Bond which is payable but not paid on any Interest Payment Date. "Def easance Obligations" means any of the following obligations: 2 (a)United States Government Obligations that are not subject to redemption in advance oftheir 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) thetrustee for such obligations has been given irrevocable instructions concerning their calling and redemption and the issuer of such obligations has covenanted not to redeem such obligations other than as set forth in such instructions; (2)the obligations are secured by cash or United States Government Obligations 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 satisfyany 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 the Rating Agency to United States Government Obligations. "Derivative" means any investment instrument whose market price is derived from the fluctuating value of an underlying asset, index, currency, futures contract, including futures, options and collateralized mortgage obligations. "Disclosure Undertaking" means the Issuer's Omnibus Continuing Disclosure Undertaking 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 Bondsshall not be made when the same shall become due and payable, either at Stated Maturity or by proceedings for redemption or otherwise; (b)Payment of any installment of interest on any of the Bonds shall not be made when thesame shall become due; or 3 ( c)The Issuer shall default in the due and punctual performance of any other of thecovenants, conditions, agreements and provisions contained in the Bonds or in this Bond Resolution ( other than the covenants relating to continuing disclosure requirements contained herein and in the Disclosure Undertaking) on the part of the Issuer to be performed, and such default shall continue for thirty (30) days after written notice specifying such default and requiring same to be remedied shall have been given to the Issuer by the Owner of any of the Bonds then Outstanding. "Federal Tax Certificate" means the Issuer's Federal Tax Certificate dated as of the Issue Date, as the same may be amended or supplemented in accordance with the provisions thereof. "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 ofFinanceable 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 pursuant to or referred to in Section 501 hereof. "Improvement Fund" means the Improvement Fund for General Obligation Internal Improvement Bonds, Series 2014-A created pursuant to Section 501 hereof. "Improvements" means the improvements referred to in the preamble to the Ordinance and any Substitute Improvements. "Independent Accountant" means an independent certified public accountant or firm of independent certified public accountants at the time employed by the Issuer for the purpose of carrying out the duties imposed on the Independent Accountant by this Bond Resolution. "Interest Payment Date(s)" means the Stated Maturity of an installment of interest on any Bond which shall be April 1 and October 1 of each year, commencing April 1, 2015. "Issue Date" means the date when the Issuer delivers the Bonds to the Purchaser in exchange for the Purchase Price. "Issuer" means the City and any successors or assigns. "Maturity" when used with respect to any Bond means the date on which the principal of such Bond becomes due and payable as therein and herein provided, whether at the Stated Maturity thereof or call for redemption or otherwise. "Mayor" means the duly elected and acting Mayor, or in the Mayor's absence, the duly appointed and/or elected Vice Mayor or Acting Mayor of the Issuer. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer. 4 "Notice Address" means with respect to the following entities: (a)To the Issuer at:City of Salina, Kansas Attn: City Clerk 300WestAsh Salina, Kansas 67402 Fax: (785)309-5738 (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 Fax: (785) 296-6976 (c)To the Purchaser:Piper Jaffray & Co. 11635 Rosewood Street Leawood, Kansas 66211 (d)To the Rating Agency(ies):Moody's Municipal Rating Desk 7 World Trade Center 250 Greenwich Street 23rd Floor New York, New York 10007 or such other address as is furnished in writing to the other parties referenced herein. "Notice Representative" means: (a)With respect to the Issuer, the Clerk.(b)With respect to the Bond Registrar and Paying Agent, the Director of Bond Services.( c)With respect to any Purchaser, the manager of its Municipal Bond Department.(d)With respect to any Rating Agency, any Vice President thereof."Official Statement" means Issuer's Official Statement relating to the Bonds. "Ordinance" means Ordinance No. 14-10737 of the Issuer authorizing the issuance of the Bonds, as amended from time to time. 5 "Outstanding" means, when used with reference to the Bonds, as of a particular date of determination, all Bonds theretofore authenticated and delivered, except the following Bonds: (a)Bonds theretofore canceled by the Paying Agent or delivered to the Paying Agent forcancellation; (b)Bonds deemed to be paid in accordance with the provisions of Secdon 701 hereof; and(c)Bonds in exchange for or in lieu of which other Bonds have been authenticated anddelivered hereunder. "Owner" when used with respect to any Bond means the Person in whose name such Bond is registered on the Bond Register. Whenever consent of the Owners is required pursuant to the terms of this Bond Resolution, and the Owner of the Bonds, as set forth on the Bond Register, is Cede & Co., the term Owner shall be deemed to be the Beneficial Owner of the Bonds. "Participants" means those financial institutions for whom the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Paying Agent" means the State Treasurer, and any successors and assigns. "Permitted Investments" shall mean the investments hereinafter described, provided, however, no moneys or funds shall be invested in a Derivative: (a) investments authorized by K.S.A. 12-1675 and amendments thereto; (b) the municipal investment pool established pursuant to K.S.A. 12-1677a, and amendments thereto; (c) direct obligations of the United States Government or any agency thereof; (d) the Issuer's temporary notes issued pursuant to K.S.A. 10-123 and amendments thereto; (e) interest-bearing time deposits in commercial banks or trust companies located in the county or counties in which the Issuer is located which are insured by the Federal Deposit Insurance Corporation or collateralized by securities described in (c); (f) obligations of the federal national mortgage association, federal home loan banks, federal home loan mortgage corporation or government national mortgage association; (g) repurchase agreements for securities described in (c) or (f); (h) investment agreements or other obligations of a fmancial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody's or Standard & Poor's; (i) investments and shares or units of a money market fund or trust, the portfolio of which is comprised entirely of securities described in (c) or (f); G) receipts evidencing ownership interests in securities or portions thereof described in (c) or (f); (k) municipal bonds or other obligations issued by any municipality of the State as defined in K.S.A. 10-1101 which are general obligations of the municipality issuing the same; or (I) bonds of anymunicipality of the State as defined in K.S.A. 10-1101 which have been refunded in advance of theirmaturity and are fully secured as to payment of principal and interest thereon by deposit in trust, underescrow agreement with a bank, of securities described in (c) or (f), all as may be further restricted ormodified by amendments to-applicable State law."Person" means any natural person, corporation, partnership, joint venture, association, firm, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body. "Purchase Price" means the principal amount of the Bonds plus accrued interest to the date of delivery, plus a bid premium of $239,754.28. "Purchaser" means Piper Jaffray & Co., Leawood, Kansas the original purchaser of the Bonds, and any successor and assigns. 6 7 Section 504(a) Article Stated Maturity October 1 2015 2016 2017 2018 2019 2020 2021 2022 SERIAL BONDS Principal Amount $525,000 Annual Rate Stated Maturity Principal Amount $315,000 585,000 600,000 620,000 640,000 295,000 305,000 310,000 of Interest 3.000% 3.000 3.000 3.000 3.000 3.000 3.000 2.500 October 1 2023 2024 2025 2026 2027 2028 2029 2030 330,000 340,000 345,000 350,000 365,000 375,000 235,000 TERM BONDS Stated Maturity October 1 2032 2034 Principal Amount $500,000 535,000 Annual Rate of Interest 3.750% 3.500 Annual Rate of Interest 2.500% 2.750 2.750 3.000 3.000 3.000 3.150 3.500 The Bonds shall bear interest at the above specified rates (computed on the basis of a 360-day year of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner set forth in Section 204hereof. Each of the Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be printed in accordance with the format required by the Attorney General of the State and shall be substantially in the fonn attached hereto as EXHIBIT A or as may be required by the Attorney General pursuant to the Notice of Systems of Registration for Kansas Municipal Bonds, 2 Kan. Reg. 921 (1983), in accordance with the Kansas Bond Registration Law, K.S.A. 10-620 et seq. Section 203. Designation of Paying Agent and Bond Registrar. The State Treasurer is hereby designated as the Paying Agent for the payment of principal of and interest on the Bonds and Bond Registrar with respect to the registration, transfer and exchange of Bonds. The Mayor of the Issuer is hereby authorized and empowered to execute on behalf of the Issuer an agreement with the Bond Registrar and Paying Agent for the Bonds. The Issuer will at all times maintain a Paying Agent and Bond Registrar meeting the qualifications herein described for the performance of the duties hereunder. The Issuer reserves the right to appoint a successor Paying Agent or Bond Registrar by (a) filing with the Paying Agent or Bond Registrar then performing such function a certified copy of the proceedings giving notice of the termination of such Paying Agent or Bond Registrar and appointing a successor, and (b) causing notice of appointment of the successor Paying Agent and Bond Registrar to be given by first class mail to each Owner. No resignation or removal of the Paying Agent or Bond Registrar shall become effective until a successor has been appointed and has accepted the duties of Paying Agent or Bond Registrar. Every Paying Agent or Bond Registrar appointed hereunder shall at all times meet the requirements ofK.S.A. 10-501 et seq. and K.S.A. 10-620 et seq., respectively. 9 Section 303 Section 204 Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds as provided in this Section. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraph. The Issuer may decide, subject to the requirements of the Operational Arrangements of 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 Bonds being issued to any Ownerother than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b)if the Bond Registrar receives written notice from Participants having interests in not lessthan 50% of the Bonds Outstanding, as shown on the records of the Securities Depository ( and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to Owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the Issuer, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book•entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the Issuer, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository in accordance with the following paragraph, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the Issuer. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the Issuer may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its 13 determine) at any time, at the Redemption Price of 100% ( expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. Mandatory Redemption. The Tenn Bonds shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements of this Section at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. The taxes levied in Section 402 hereof which are to be deposited into the Debt Service Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year, the following principal amounts of such Term Bonds: Final Maturity 'Final Maturity 2032 Term Bonds Principal Amount $245,000 255,000 2034 Term Bonds Principal Amount $265,000 270,000 � 2031 2032• Year 2033 2034• At its option, to be exercised on or before the 45th day next preceding any mandatory Redemption Date, the Issuer may: (1) deliver to the Paying Agent for cancellation Term Bonds subject to mandatory redemption on said mandatory Redemption Date, in any aggregate principal amount desired; or (2) furnish the Paying Agent funds, together with appropriate instructions, for the purpose of purchasing any Term Bonds subject to mandatory redemption on said mandatory Redemption Date from any Owner thereof whereupon the Paying Agent shall expend such funds for such purpose to such extent as may be practical; or (3) receive a credit with respect to the mandatory redemption obligation of the Issuer under this Section for any Term Bonds subject to mandatory redemption on said mandatory Redemption Date which, prior to such date, have been redeemed (other than through the operation of the mandatory redemption requirements of this subsection) and cancelled by the Paying Agent and not theretofore applied as a credit against any redemption obligation under this subsection. Each Term Bond so delivered or previously purchased or redeemed shall be credited at 100% of the principal amount thereof on the obligation of the Issuer to redeem Term Bonds of the same Stated Maturity on such mandatory Redemption Date, and any excess of such amount shall be credited on future mandatory redemption obligations for Term Bonds of the same Stated Maturity as designated by the Issuer, and the principal amount of Term Bonds to be redeemed by operation of the requirements of this Section shall be accordingly reduced. If the Issuer intends to exercise any option granted by the provisions of clauses (1 ), (2)or (3) above, the Issuer will. on or before the 45th day next preceding each mandatory RedemptionDate, furnish the Paying Agent a written certificate indicating to what extent the provisions of said clauses(1), (2) and (3) are to be complied with, with respect to such mandatory redemption payment. 15 Section 302. Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the Issuer shall determine. Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in a minimum Authorized Denomination of principal amount in such equitable manner as the Bond Registrar may 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 a minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of the denomination of a minimum Authorized Denomination. If it is determined that one or more, but not all, of a minimum Authorized Denomination of face value represented by any Bond is selected for redemption, then upon notice of intention to redeem a minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of aminimum Authorized Denomination of face value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of a minimum Authorized Denomination of face value called for redemption (and to that extent only). Section 303. Notice and Effect of Call for Redemption. In the event the Issuer desires to call the Bonds for redemption prior to maturity, written notice of such intent shall be provided to the Bond Registrar in accordance with K.S.A. 10-129, as amended, not less than 45 days prior to the Redemption Date. The Bond Registrar shall call Bonds for redemption and payment and shall give notice of such redemption as herein provided upon receipt by the Bond Registrar at least 45 days prior to the Redemption Date of written instructions of the Issuer specifying the principal amount, Stated Maturities, Redemption Date and Redemption Prices of the Bonds to be called for redemption. The foregoing provisions of this paragraph shall not apply in the case of any mandatory redemption of Term Bonds hereunder, and Term Bonds shall be called by the Paying Agent for redemption pursuant to such mandatory redemption requirements without the necessity of any action by the Issuer and whether or not the Paying Agent holds moneys available and sufficient to effect the required redemption. Unless waived by any Owner of Bonds to be redeemed, if the Issuer shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the Bond Registrar, the State Treasurer and the Purchaser. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a)the Redemption Date;(b) the Redemption Price; (c)if less than all Outstanding Bonds are to be redeemed, the identification (and, in the caseof partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; 16 ( d)a statement that on the Redemption Date the Redemption Price will become due andpayable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e)the place where such Bonds are to be surrendered for payment of the Redemption Price,which shall be the principal office of the Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the Issuer shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portio:qs of Bonds that are to be redeemed on such Redemption Date. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified in this Section to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the Issuer defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with such notice, the Redemption Price of such Bonds shall be paid by the Paying Agent. Installments of interest due on or prior to the Redemption Date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Owner a new Bond or Bonds of the same Stated Maturity in the amount of the unpaid principal as provided herein. All Bonds that have been surrendered for redemption shall be cancelled and destroyed by the Paying Agent as provided herein and shall not be reissued. In addition to the foregoing notice, the Issuer shall provide such notices of redemption as are required by the Disclosure Undertaking. Further notice may be given by the Issuer or the Bond Registrar on behalf of the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if official notice thereof is given as above prescribed: (a)Each further notice of redemption given hereunder shall contain the information requiredabove for an official notice of redemption plus (1) the CUSIP numbers of all Bonds being redeemed; (2) the date of issue of the Bonds as originally issued; (3) the rate of interest home by each Bond being redeemed; (4) the maturity date of each Bond being redeemed; and (5) any other descriptive information needed to identify accurately the Bonds being redeemed. (b)Each further notice of redemption shall he sent at least one day before the mailing ofnotice to Owners by first class, registered or certified mail or overnight delivery, as determined by the Bond Registrar, to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds. 17 (c)Each check or other transfer of funds issued for the payment of the Redemption Price ofBonds being redeemed shall bear or have enclosed the CUSIP number of the Bonds being redeemed with the proceeds of such check or other transfer. The Paying Agent is also directed to comply with any mandatory standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. ARTICLE IV SECURITY FOR BONDS Section 401. Security for the Bonds. The Bonds shall be general obligations of the Issuer payable as to both principal and interest 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 Issuer. 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 Issuer are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Section 402. Levy and Collection of Annual Tax; Transfer to Debt Service Account. The governing body 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. The taxes and/or assessments referred to above shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes shall be deposited in the Bond and Interest Fund, shall be kept separate and apart from all other funds of the Issuer shall thereafter be transferred to the Debt Service Account and shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due, taking into account any scheduled mandatory redemptions, and the fees and expenses of the Paying Agent. If at any time said taxes and/or assessments are not collected in time to pay the principal of or interest on the Bonds when due, the Treasurer is hereby authorized and directed to pay said principal or interest out of the general funds of the Issuer and to reimburse said general funds for money so expended when said taxes are collected. 18 ARTICLEV ESTABLISHMENT OF FUNDS AND ACCOUNTS DEPOSIT AND APPLICATION OF BOND PROCEEDS Section 501. Creation of Funds and Accounts. Simultaneously with the issuance of the Bonds, there shall be created within the Treasury of the Issuer the following Funds and Accounts: (a)Improvement Fund for General Obligation Internal Improvement Bonds, Series 2014-A;(b)Debt Service Account for General Obligation Internal Improvement Bonds, Series 2014-A(within the Bond and Interest Fund); and(c)Rebate Fund for General Obligation Internal Improvement Bonds, Series 2014-A.The Funds and Accounts established herein shall be administered in accordance with the provisions of this Bond Resolution so long as the Bonds are Outstanding. Section 502. Deposit of Bond Proceeds. The net proceeds received from the sale of the Bonds shall be deposited simultaneously with the delivery of the Bonds as follows: (a)All accrued interest received from the sale of the Bonds, if any, shall be deposited in theDebt Service Account. (b)The remaining balance of the proceeds derived from the sale of the Bonds shall bedeposited in 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 Bonds during construction of the Improvements; ( c) paying Costs of Issuance; ( d) retiring the Refunded Notes; and (e) transferring any amounts to the Rebate Fund required by Section 506 hereof. Upon completion of the Improvements, any surplus 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 Bonds 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 authorizing the use of the proceeds of the Bonds to pay the Financeable Costs of the Substitute Improvement has been duly adopted by the governing body of the Issuer pursuant to this Section, (3) the Attorney General of the State has approved the amendment made by such resolution to the transcript of proceedings for the Bonds to include the Substitute Improvements; and (4) the use of the proceeds of the Bonds to pay the Financeable Cost of the Substitute Improvement will not adversely affect the tax-exempt status of the Bonds under State or federal law. 19 (b)The Issuer may reallocate expenditure of Bond proceeds among all Improvementsfinanced by the Bonds; 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 Bonds allocated to any Improvement to exceed the Financeable Costs of the Improvement; and (3) the reallocation will not adversely affect the tax-exempt status of the Bonds under State or federal law. Section 505. Application of Moneys in Debt Service Account. All amounts paid and credited to the Debt Service Account shall be expended and used by the Issuer for the sole purpose of paying the principal or Redemption Price of and interest on the Bonds as and when the same become due and the usual and customary fees and expenses of the Bond Registrar and Paying Agent. The Treasurer is authorized and directed to withdraw from the Debt Service Account sums sufficient to pay both principal or Redemption Price of and interest on the Bonds and the fees and expenses of the Bond Registrar and Paying Agent as and when the same become due, and to forward such sums to the Paying Agent in a manner which ensures that the Paying Agent will receive immediately available funds in such amounts on or before the Business Day immediately preceding the dates when such principal, interest and fees of the Bond Registrar and Paying Agent will become due. If, through the lapse of time or othetwise, the Owners of Bonds are no longer entitled to enforce payment of the Bonds or the interest thereon, the Paying Agent shall return said funds to the Issuer. All moneys deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Bond Resolution and shall be held in trust by the Paying Agent for the benefit of the Owners of the Bonds entitled to payment from such moneys. Any moneys or investments remaining in the Debt Service Account after the retirement of the Bonds shall be transferred and paid into the Bond and Interest Fund. Section 506. Application of Moneys in the Rebate Fund. (a)There shall be deposited in the Rebate Fund such amounts as are required to be 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 Bonds shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and the Federal Tax Certificate. (b)The Issuer shall periodically det�e the arbitrage rebate, if any, under Code § 148(t) inaccordance with the Federal Tax Certificate, and the Issuer shall make payments to the United States of America at the times and in the amounts determined under the Federal Tax Certificate. Any moneys remaining in the Rebate Fund after redemption and payment of all of the Bonds and payment and satisfaction of any Rebate Amount, or provision made therefor, shall be deposited into the Bond and Interest Fund. (c)Notwithstanding any other provision of this Bond Resolution, including in particularArticle VII hereof, the obligation to pay arbitrage rebate to the United States of America and to comply with all other requirements of this Section and the Federal Tax Certificate shall survive the defeasance or payment in full of the Bonds. Section 507. Deposits and Investment of Moneys. Moneys in each of the Funds and Accounts shall be deposited in accordance with laws of the State, in a bank, savings and loan association or savings bank organized under the laws of the State, any other state or the United States: (a) which has a main or branch office located in the Issuer; or (b) if no such entity has a main or branch office located in the Issuer, with such an entity that has a main or branch office located in the county or counties in which 20 the Issuer is located. All such depositaries shall be members of the Federal Deposit Insurance Corporation, or otherwise as permitted by State law. All such deposits shall be invested in Permitted Investments as set forth in this Article or shall be adequately secured as provided by the laws of the State. All moneys held in the Funds and Accounts shall be kept separate and apart from all other funds of the Issuer so that there shall be no commingling with any other funds of the Issuer. Moneys held in any Fund or Account may be invested in accordance with this Bond Resolution and the Federal Tax Certificate in Permitted Investments; provided, however, that no such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which such fund was created. All earnings on any investments held in any Fund or Account shall accrue to and become a part of such Fund or Account; provided that, during the period of construction of the Improvements, earnings on the investment of such funds may, at the discretion of the Issuer, be credited to the Debt Service Account. ARTICLE VI DEFAULT AND REMEDIES Section 601. Remedies. The provisions of the Bond Resolution, including the covenants and agreements herein contained, shall constitute a contract between the Issuer and the Owners of the Bonds. If an Event of Default occurs and shall be continuing, the Owner or Owners of not less than 10% in principal amount of the Bonds at the time Outstanding shall have the right for the equal benefit and protection of all Owners of Bonds similarly situated: (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 Bond Resolution or by the Constitution and laws of the State; (b)by suit, action or other proceedings in equity or at law to require the Issuer, its officers,agents and employees to account as if they were the trustees of an express trust; and (c)by suit, action or other proceedings in equity or at law to enjoin any acts or things whichmay be unlawful or in violation of the rights of the Owners of the Bonds. Section 602. Limitation on Rights of Owners. The covenants and agreements of the Issuer contained herein and in the Bonds shall be for the equal benefit, protection, and security of the Owners of any or all of the Bonds, all of which Bonds shall be of equal rank and without preference or priority of one Bond over any other Bond in the application of the funds herein pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this Bond Resolution. No one or more Owners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Outstanding Bonds. Section 603. Remedies Cumulative. No remedy conferred herein upon the Owners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy 21 conferred herein. No waiver of any default or breach of duty or contract by the Owner of any Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No delay or omission of any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Owners of the Bonds by this Bond Resolution may be enforced and exercised from time to time and as often as may be deemed expedient. If action or proceedings taken by any Owner on account of any default or to enforce any right or exercise any remedy has been discontinued or abandoned for any reason, or shall have been determined adversely to such Owner, then, and in every such case, the Issuer and the Owners of the Bonds shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Owners shall continue as if no such suit, action or other proceedings had been brought or taken. ARTICLE VII DEFEASANCE Section 701. Defeasance. When any or all of the Bonds, redemption premium, if any, or scheduled interest payments thereon have been paid and discharged, then the requirements contained in this Bond Resolution and the pledge of the Issuer's faith and credit hereunder and all other rights granted hereby shall terminate with respect to the Bonds or scheduled interest payments thereon so paid and discharged. Bonds, redemption premium, if any, or scheduled interest payments thereon shall be deemed to have been paid and discharged within the meaning of this Bond Resolution if there has been deposited with the Paying Agent, or other commercial bank or trust company located in the State and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Bonds or the interest payments thereon, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned on any such Def easance Obligations, will be sufficient for the payment of the principal of or Redemption Price of said Bonds and/or interest accrued to the Stated Maturity or Redemption Date, or if default in such payment has occurred on such date, then to the date of the tender of such payments. If the amount to be so deposited is based on the Redemption Price of any Bonds, no such satisfaction shall occur until (a) the Issuer has elected to redeem such Bonds, and (b) either notice of such redemption has been given, or the Issuer has given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Bond Registrar to give such notice of redemption in compliance with Seed.on 303 of this Bond Resolution. Any money and Defeasance Obligations that at any time shall be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the Issuer, for the purpose of paying and discharging any of the Bonds, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Owners of the Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All money and Defeasance Obligations deposited with the Paying Agent or such bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions of this Bond Resolution. ARTICLE VIII TAX COVENANTS Section 801. General Covenants. The Issuer covenants and agrees that it will comply with: (a)all applicable provisions of the Code necessary to maintain the exclusion from gross income forfederal income tax purposes of the interest on the Bonds; and (b) all provisions and requirements of theFederal Tax Certificate. The Mayor, Finance Director and Clerk are hereby authorized and directed to 22 Article VII Section 1002. Amendments. The rights and duties of the Issuer and the Owners, and the terms and provisions of the Bonds or of this Bond Resolution, may be amended or modified at any time in any respect by resolution of the Issuer with the written consent of the Owners of not less than a majority in principal amount of the Bonds then Outstanding, such consent to be evidenced by an instrument or instruments executed by such Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the Clerk, but no such modification or alteration shall: (a)extend the maturity of any payment of principal or interest due upon any Bond;(b)effect a reduction in the amount which the Issuer is required to pay as principal of orinterest on any Bond; ( c)permit preference or priority of any Bond over any other Bond; or( d)reduce the percentage in principal amount of Bonds required for the written consent toany modification or alteration of the provisions of this Bond Resolution. Any provision of the Bonds or of this Bond Resolution may, however, be amended or modified by resolution 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 Bonds at the time Outstanding. Without notice to or the consent of any Owners, the Issuer may amend or supplement this Bond Resolution for the purpose of curing any formal defect, omission, inconsistency or ambiguity herein, to grant to or confer upon the Owners any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Owners, to more precisely identify the Improvements, to reallocate proceeds of the Bonds among Improvements, to provide for Substitute Improvements, to conform this Bond Resolution to the Code or future applicable federal law concerning tax-exempt obligations, or in connection with any other change therein which is not materially adverse to the interests of the Owners. Every amendment or modification of the provisions of the Bonds or of this Bond Resolution, to which the written consent of the Owners is given, as above provided, shall be expressed in a resolution adopted by the governing body of the Issuer amending or supplementing the provisions of this Bond Resolution and shall be deemed to be a part of this Bond Resolution. A certified copy of every such amendatory or supplemental resolution, if any, and a certified copy of this Bond Resolution shall always be kept on file in the office of the Clerk, and shall be made available for inspection by the Owner of any Bond or a prospective purchaser or owner of any Bond authorized by this Bond Resolution, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental resolution or of this Bond Resolution will be sent by the Clerk to any such Owner or prospective Owner. Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the Clerk a copy of the resolution of the Issuer hereinabove provided for, duly certified, as well as proof of any required consent to such modification by the Owners of the Bonds then Outstanding. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification. The Issuer shall furnish to the Paying Agent a copy of any amendment to the Bonds or this Bond Resolution which affects the duties or obligations of the Paying Agent under this Bond Resolution. Section 1003. Notices, Consents and Other Instruments by Ownen. Any notice, consent, request, direction, approval or other instrument to be signed and executed by the Owners may be in any 24 number of concurrent writings of similar tenor and may be signed or executed by such Owners in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of this Bond Resolution, and shall be conclusive in favor of the Issuer and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument, namely: (a)The fact and date of the execution by any person of any such instrument may be provedby a certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such instrument acknowledged before such officer the execution thereof, or by affidavit of any witness to such execution. (b)The fact of ownership of Bonds, the amount or amounts, numbers and other identificationof Bonds, and the date of holding the same shall be proved by the Bond Register. In determining whether the Owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Bond Resolution, Bonds owned by the Issuer shall be disregarded and deemed not to be Outstanding under this Bond Resolution, except that, in determining whether the Owners shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Owners know to be so owned shall be so disregarded. Notwithstanding the foregoing, Bonds so owned which have been pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of the Owners the pledgee's right so to act with respect to such Bonds and that the pledgee is not the Issuer. Section 1004. Notices. Any notice, request, complaint, demand or other communication required or desired to be given or filed under this Bond Resolution shall be in writing, given to the Notice Representative at the Notice Address and shall be deemed duly given or filed 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 Agent and the Purchaser may from time to time designate, by notice given hereunder to the others of such parties, such other address to which . subsequent notices, certificates or other communications shall be sent. All notices given by: (a) certified or registered mail as aforesaid shall be deemed duly given as of the date they are so mailed; (b) fax as aforesaid shall be deemed duly given as of the date of confumation of receipt. If, because of the temporary or permanent suspension of regular mail service or for any other reason, it is impossible or impractical to mail any notice in the manner herein provided, then such other form of notice as shall be made with the approval of the Paying Agent shall constitute a sufficient notice. Section 1005. Electronic Transactions. The issuance of the Bonds and the transactions related thereto and described herein may be conducted and documents may be stored by electronic means. Section 1006. Further Authority. The officers and officials of the Issuer, including the Mayor and Clerk, are hereby authorized and directed to execute all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Bond Resolution and to make ministerial alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. 25 by the governing body of the Issuer on July 14, 2014. (SEAL) (Signature Page to Bond Resolution-Series 2014-A) EVENT NOTICE PURSUANT TO SEC RULE 15c2-12(b)(S)(C) TO: The Municipal Securities Rulemaking Board via the Electronic Municipal Market Access system for municipal securities disclosures www.emma.msrb.or0} Issuer/Obligated Person: City of Salina, Kansas (the "Obligated Person") Issue(s) to which this Report Relates and CUSIP Base Numbers for said Issues: Base Description Series Dated Date Maturities CUSIP No. General Obligation Internal 2013-B July 15, 2013 2022 to 2033 794743 Improvement Bonds General Obligation Internal 2014-A July 30, 2014 2022 to 2034 794743 Improvement Bonds Event Reported: Redemption of above-referenced Bonds on October 1, 2021 see attached Exhibits A-1 and A-2. The information contained in this Notice has been submitted by the Obligated Person pursuant to contractual undertakings the Obligated Person made in accordance with SEC Rule 15c2-12. Nothing contained in the undertaking or this Notice is, or should be construed as, a representation by the Obligated Person that the information included in this Notice constitutes all of the information that may be material to a decision to invest in, hold or dispose of any of the securities listed above, or any other securities of the Obligated Person. For additional information, contact: CITY OF SALINA, KANSAS City-County Building, 300 West Ash Street, Salina, Kansas 67 402 Attention: Clerk Phone No. (785) 309-5735 600596.20219\REDEMPTION DOCS A-1-1 Treasurer of the State of Kansas Landon State Office Bldg. 900 Southwest Jackson, Suite 201 Topeka, Kansas 66612-123 5 Robert W. Baird & Co. 380 Knollwood St. EXHIBITA-1 Winston-Salem, North Carolina 27103 RE: CALL FOR REDEMPTION CITY OF SALINA, KANSAS [CERTIFIED MAIL] GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2013-B, DATED JULY 15, 2013 Notice is hereby given pursuant to K.S.A. 10-129, as amended, and pursuant to the provisions of Article III of Resolution No. 13-7020 (the "Bond Resolution") of the City of Salina, Kansas (the "Issuer"), that the above mentioned bonds described in the attached Notice of Call for Redemption (the "Called Bonds"), have been called for redemption and payment on October 1, 2021, subject to the availability of funds therefor from the proceeds ofrefunding bonds to be issued by the Issuer. The Paying Agent is hereby requested to disseminate the attached Notice of Call for Redemption in accordance with K.S.A. 10-129 and the Bond Resolution. After redemption of the Called Bonds the Paying Agent is requested to complete the attached Paying Agent's Certification and forward a copy of same to the undersigned. 600596.20219\REDEMPTION DOCS A-1-1 8/9/2021 SendPro® Enterprise Ship From: Wontu Bivins Gilmore & Bell, P.C. Ship Address: Bond Calls Processing Treasurer of the State of Ka ... 900 SW Jackson St Suite 201 100 North Main, Suite 800 Wichita Topeka KS 66612-1212 US Order#: PO#: Shipment ID: 3227 Carrier: USPS Carrier Service: First-Class Mail® Shipment Weight: 0.0625 LB Packages in Shipment: KS 67202-1311 US (Ref: 600596.20219) Shipping Cost: 1 .00 USD Accessorial Cost: 5.35 USD Other Cost: 0.00 USD Total Cost: 6.35 USD Shipment Status: Processed .., Package ID Attention To Receiver Phone Tracking No. status Bond Calls Processing 94148149028297650... Processed .., / 1 > pitney bowes • Attention To: Bond Calls Processing Treasurer of the State of Kansas 900 SW Jackson St Suite 201 Topeka KS 66612-1212 US Tracking/PRO#: 9414814902829765000... Shipping Cost: 1.00 USD Package ID: 3227 Weight: 0.0625 LB Reference 1: Call for Redemption Reference 2: Reference 3: Accessorial Cost: 5.35 USD Other Cost: 0.00 USD Total Cost: 6.35 USD Package Status: Processed .., Items in Package: Part Number Quantity Description There are no contents level items to view. Unit Price Total Price Terms & Conditions Pn 1/1 [The form of this Notice is to be modified or amended to comply with the law and industry standards at the time of its distribution to the Owners of the Series 2013-B Bonds.] NOTICE OF CALL FOR REDEMPTION CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2013-B, DATED JULY 15, 2013 Notice is hereby given to the registered owners of the above-captioned bonds (the "Bonds") that pursuant to the provisions of Article III of Resolution No. 13-7020 (the "Bond Resolution") of the City of Salina, Kansas (the "Issuer"), that the above mentioned bonds described below (the "Called Bonds"), have been called for redemption and payment on October 1, 2021 (the "Redemption Date"), at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent"). Maturity Date (October 1) 2022 2023 2024 2025 2026 2027 2028 Maturity Date (October 1) 2033 SERIAL BONDS Principal Amount $270,000 275,000 285,000 290,000 300,000 310,000 315,000 TERM BONDS Principal Amount $350,000 Interest Rate 3.00% 3.00% 3.00% 3.50% 3.50% 3.50% 3.50% Interest Rate 4.00% CUSIP No. (Base: 794743) 4L5 4M3 4Nl 4P6 4Q4 4R2 4SO CUSIPNo. (Base: 794743) 4X9 On the Redemption Date there shall become due and payable, upon the presentation and surrender of each such Called Bond, the redemption price thereof equal to 100% of the principal amount thereof together with interest accrued to the Redemption Date. Interest shall cease to accrue on the Called Bonds so called for redemption from and after the Redemption Date provided such funds for redemption are on deposit with the Paying Agent, subject to the availability of funds therefor from the proceeds of refunding bonds to be issued by the Issuer. Neither the Issuer nor the Paying Agent shall be responsible for the selection or use of the CUSIP identification numbers shown above or printed on any of the Called Bonds. Said CUSIP identification numbers are included solely for the convenience of the owners of the Bonds. Under the provisions of Section 3406(a)(l) of the Internal Revenue Code of 1986, as amended, paying agents making payments of principal on municipal securities may be obligated to withhold a 28% tax on the payment of principal to registered owners who have failed to provide the paying agent with a valid taxpayer identification number. Registered Owners of the Bonds who wish to avoid the imposition of the tax should provide a certified taxpayer identification number to the Paying Agent when presenting the Bonds for payment. 600596.20219\REDEMPTION DOCS A-1-2 CITY OF SALINA, KANSAS By:-------------Treasurer of the State of Kansas, Topeka, Kansas, as Paying Agent ************************ This Notice of Redemption shall be mailed by certified mail to the Treasurer of the State of Kansas, Topeka, Kansas, not less than 45 days prior to the Redemption Date and to Robert W. Baird & Co., the original purchaser of the Called Bonds, not less than 30 days prior to the Redemption Date. Notice shall also be given to certain repositories in order to comply with the provisions of Rule 15c2-12 of the Securities and Exchange Commission. Notice may also be given in accordance with guidelines set forth in Securities and Exchange Commission Release No. 34-23856, but such notice is not required by law. The Paying Agent shall notify the registered owners of the Called Bonds as provided in K.S.A. 10-129 as amended, and the Bond Resolution. 600596.20219\REDEMPTION DOCS A-1-3 PAYING AGENT'S CERTIFICATION CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2013-B, DATED JULY 15, 2013 The State Treasurer, in its capacity as Paying Agent for the above-captioned Bonds, does hereby certify as follows: 1.Capitalized terms not defined herein, shall have the meanings ascribed thereto in theattached Notice of Call for Redemption or the Bond Resolution defined therein. 2.The Called Bonds have been called for redemption and payment on October 1, 2021 (the "Redemption Date"). 3.The full redemption price of the Called Bonds as determined pursuant to the BondResolution is calculated as follows: Principal Amount of Called Bonds Accrued Interest to Redemption Date Total $2,395,000.00 40.712.50 $2,435,712.50 4.There was deposited with the Paying Agent the sum set forth above, which has beenirrevocably pledged for the payment of the principal of, redemption premium, if any, and interest on the Called Bonds to the Redemption Date. In addition, sufficient funds have been deposited to provide for additional costs associated with such redemption. 5.The Notice of Call for Redemption, a copy of which is attached hereto, was disseminatedin accordance with K.S.A. 10-129, as amended, and the Bond Resolution. DATED as of October 1, 2021. 600596.20219\REDEMPTION DOCS TREASURER OF THE STATE OF KANSAS, TOPEKA, KANSAS By: ------------Director of Fiscal Services A-1-4 Treasurer of the State of Kansas Landon State Office Bldg. 900 Southwest Jackson, Suite 201 Topeka, Kansas 66612-1235 Piper Sandler & Co. 11635 Rosewood Street Leawood, Kansas 66211 RE: EXHIBITA-2 CALL FOR REDEMPTION CITY OF SALINA, KANSAS [CERTIFIED MAIL] GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2014-A, DATED JULY 30, 2014 Notice is hereby given pursuant to K.S.A. 10-129, as amended, and pursuant to the provisions of Article III of Resolution No. 14-7119 (the "Bond Resolution") of the City of Salina, Kansas (the "Issuer"), that the above mentioned bonds described in the attached Notice of Call for Redemption (the "Called Bonds"), have been called for redemption and payment on October I, 2021, subject to the availability of funds therefor from the proceeds of refunding bonds to be issued by the Issuer. The Paying Agent is hereby requested to disseminate the attached Notice of Call for Redemption in accordance with K.S.A. 10-129 and the Bond Resolution. After redemption of the Called Bonds the Paying Agent is requested to complete the attached Paying Agent's Certification and forward a copy of same to the undersigned. 600596.20219\REDEMPTION DOCS A-2-1 600596.20219\REDEMPTION DOCS 600596.20219\REDEMPTION DOCS PAYING AGENT'S CERTIFICATION CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2014-A, DATED JULY 30, 2014 The State Treasurer, in its capacity as Paying Agent for the above-captioned Bonds, does hereby certify as follows: 1.Capitalized terms not defined herein, shall have the meanings ascribed thereto in theattached Notice of Call for Redemption or the Bond Resolution defined therein. 2.The Called Bonds have been called for redemption and payment on October 1, 2021 (the"Redemption Date"). 3.The full redemption price of the Called Bonds as determined pursuant to the BondResolution is calculated as follows: Principal Amount of Called Bonds Accrued Interest to Redemption Date Total $4,000,000.00 61,681.25 $4,061,681.25 4.There was deposited with the Paying Agent the sum set forth above, which has beenirrevocably pledged for the payment of the principal of, redemption premium, if any, and interest on the Called Bonds to the Redemption Date. In addition, sufficient funds have been deposited to provide for additional costs associated with such redemption. S.The Notice of Call for Redemption, a copy of which is attached hereto, was disseminatedin accordance with K.S.A. 10-129, as amended, and the Bond Resolution. DATED as of October 1, 2021. 600596.20219\REDEMPTION DOCS TREASURER OF THE STATE OF KANSAS, TOPEKA,KANSAS By: Director of Fiscal Services TRANSCRIPT CERTIFICATE $6,220,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B DATED SEPTEMBER 8, 2021 Gilmore & Bell, P.C. 08/16/2021 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 bonds (the "Bonds"); and do hereby certify as of August 16, 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 Bond Resolution authorizing the Bonds. 2.Organization. The Issuer is a legally constituted city of the first class and existing underthe laws of the State of Kansas. 3.Transcript of Proceedings. The transcript of proceedings (the "Transcript") relating tothe authorization and issuance of the Bonds is to the best of our knowledge, information and belief full and complete; none of such proceedings have been modified, amended or repealed, except as might be shown in the Transcript, and the facts stated in the Transcript still exist. In each 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 timesduring these proceedings. 5.Meetings. All of the meetings of the governing body of the Issuer at which action wastaken 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 Title Tenn of Office Melissa Rose Hodges Mayor 01/2021 01/2022 Commissioner 01/2017 to 0 1/2022 Trent Davis Commissioner 09/2014 to 01/2024 Mike Hoppock Commissioner 01/2018 to 01/2022 Aaron Peck Commissioner 05/2021 to 01/2022 Karl Ryan Commissioner 04/2015 to 01/2024 JoVonna Rutherford Clerk 03/2021 to DATE 600596.20219\CLOSING DOCS v.3 7.Execution of Bonds. The Bonds have been executed with facsimile signatures; and thefacsimile signatures appearing on the face of the Bonds are facsimiles of the true and genuine signatures of the Mayor and Clerk of the Issuer; which facsimiles are ratified as a proper execution of said Bonds. Each signature has either been duly filed in the office of the Secretary of State of Kansas pursuant to K.S.A. 75-4001 et seq or executed in accordance with K.S.A. 16-1601 et seq. A facsimile of the seal of the Issuer is affixed to or imprinted on each of the Bonds and on the reverse side of each of the Bonds at the place where the Clerk has executed by facsimile signature the Certificate of Registration; and each Bond bears a Certificate of Registration evidencing the fact that it has been registered in the office of the Clerk. A true impression of the seal is set forth adjacent to the signature of the Clerk below. The specimen bond included in the Transcript is in the form adopted by the governing body of the Issuer for the Bonds. 8.Authorization and Purpose of the Bonds. The Bonds are being issued pursuant to andin full compliance with the Constitution and statutes of the State, including particularly K.S.A. 10-427 etseq., as amended, Ordinance No. 21-11064 and Resolution No. 21-7977 of the Issuer duly adopted by the Governing Body of the Issuer on August 16, 2021 (collectively the "Bond Resolution") for the purpose of refunding the following bonds of the Issuer (collectively the "Refunded Bonds"): Description G.O. Internal Improvement Bonds G.O. Internal Improvement Bonds Series 2013-B 2014-A Dated Date July 15, 2013 July 30, 2014 Years 2022 to 2033 2022 to 2034 Amount $2,395,000 4,000,000 The total principal amount of the Bonds issued to refund the Refunded Bonds does not exceed the aggregate amounts prescribed in K.S.A. 10-427, as amended. 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 Bonds on the date of the sale of the Bonds were within the maximum legal limit for interest rates under K.S.A. 10-1009, as amended. 9.Bonded Indebtedness. The currently outstanding applicable indebtedness of the Issuer,including the Bonds, does not exceed any applicable constitutional or statutory limitations. A Schedule of Bonded Indebtedness, which 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 2021 is as follows: Equalized Assessed Valuation of Taxable Tangible Property .............................................................. $459,654,480 Tangible Valuation of Motor Vehicles (2020........................................ 54,589.132 Equalized Assessed Tangible Valuation for Computation of Bonded Debt Limitations................................. $514,243,612 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 Bonds shown to be authorized in the Transcript; ( e) the validity of the Bonds, or any of the proceedings had in relation to the 600596.20219\CWSING DOCS v.3 2 EXHIBIT A STATEMENT OF COST Re: General Obligation Refunding Bonds, Series 2021-B, Dated September 8, 2021, of the City of Salina, Kansas Sources of Funds: Principal Amount of the Bonds Underwriter's Discount Premium Total Uses of Funds: Deposit to Redemption Fund Costs of Issuance Total 600596.20219\CLOSING DOCS v.3 A-1 $6,220,000.00 -24,827.37267,544.55$6,462,717.18 $6,395,000.00 67.717.58 $6,462,717.58 EXHIBITB CITY OF SALINA, KANSAS SCHEDULE OF OUTSTANDING GENERAL OBLIGATION INDEBTEDNESS (as of September 8, 2021) GENERAL OBLIGATION BONDS Date Amount Final Amount Issued Series Purpose of Issue Maturit� 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 09-05-21 2021-B Refunding 6,500,000 10-01-34 6.220,000 Total 72,230,000 TEMPORARY NOTES Final Original Date Maturity Note Amount Series Issued Date Amount Outstanding 2021-1 04-29-21 05-01-22 5,230,000 5.230,000 600596.20219\CLOSING DOCS v.3 B-1 STATE OF KANSAS OFFICE OF SECRETARY OF STATE I, ScoTT ScHWAB, Kansas Secretary of State, certify that the records of this office reveal the following: The Certificate of Manual Signature for MELISSA ROSE HODGES, MAYOR 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. ·i-N ;i'ES·'1'iMdNY ·WHEREO'.ii;I hereto set my hand and cause to be affixed my official seal. Doneat the City of Topeka, this 16th day of April, A.D. 2021 SCOTT SCHWAB KANSAS SECRETARY OF STATE STATE OF KANSAS OFFICE OF SECRETARY OF STATE I, ScoTT 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 :'I'l!;�'.1'�rf6.N�� Wl,ERiCJf•'::I.hereto set my hand and cause tobe affixed my official seal. Done at the City of Topeka, this 16th day of April, A.D. 2021 SCOTT SCHWAB KANSAS SECRETARY OF STATE Office of the Kansas State Treasurer Bond Registration Intranet 900 SW Jackson St., Ste 201 ... Topeka, KS 66612-1235 ... 785-296-3171 August 19, 2021 Wontu Bivins Gilmore & Bell Pc 100 North Main, Suite 800 Wichita, KS 67202 RE: $6,220,000.00, City of Salina, Kansas General Obligation Refunding Bonds, Series 2021-B Dated September 08, 2021, Registration #0322-085-090821-357 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 August 19, 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 REGISTERED NUMBER R-_ 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 T NSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWIS OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereo , Co., has an interest herein. ,,dJV/HJii,,_ UNITED STATES OF AMERIC W1' Interest Rate: % STATE OF KANSAS ,ti// COUNTY OF SALIN�. I' CITY OF SALi ,, i GENERAL OBLIGATION REF ; I,SERIES 2021-B Maturity Date: October 1, ,// REGISTERED OWNER: 1/l(flf�11,,,,, cEf &co. PRINCIPAL AMOUNT: ' CUSIP: 794744 KNOW ALL I SON§W,_Y hw�ESENTS: That the City of Salina, in the County ofSaline, State of Kansa: ' s ; (f�')� fo):.· value received, hereby acknowledges itself to be indebted and promises to pay to is 1, Owner s wn above, or registered assigns, but solely from the source andin the manner .. i'. ifie 1 � ." :· � • 1pal Amount shown above on the Maturity Date shown above, unless called.:f' bn prior , !ie Maturity Date, and to pay interest thereon at the Interest Rate per ann ' puted on, e basis of a 360-day year of twelve 30-day months), from the Dated Date m the most recent date to which interest has been paid or duly provided for, paya ii 1 and October 1 of each year, commencing April 1, 2022 (the "Interest Pay, rincipal Amount has been paid. lace of Payment. The principal or redemption price of this Bond shall be paid atmatunty or u lier redemption to the person in whose name this Bond is registered at the maturity or redemption date· thereof, upon presentation and surrender of this Bond at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The interest payable on this Bond on any Interest Payment Date shall be paid to the person in whose name this Bond is registered on the registration books maintained by the Bond Registrar at the close of business on the Record Date(s) for such interest, which shall be the 15th day (whether or not a business day) of the calendar month next preceding the Interest Payment Date. Such interest shall be payable (a) by check or draft mailed by the Paying Agent to the address of such Registered Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. The principal or redemption price of and interest on the Bonds shall be payable in any coin or currency that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. Interest not punctually paid will be paid in the manner established in the within defined Bond Resolution. Definitions. Capitalized terms used herein and not otherwise defined meanings assigned to such terms in the hereinafter defined Bond Resolution. Authorization of Bonds. This Bond is one of an authorized s designated "General Obligation Refunding Bonds, Series 2021-B," aggi_; ting $6,220,000 (the "Bonds") issued for the purposes set forth in the Ord' ce of the . 1er authorizing the issuance of the Bonds and the Resolution of the Issuer prescribi he for . and de · s f the Bonds (collectively the "Bond Resolution"). The Bonds are issued by t 'ty ull mpliance with the provisions, restrictions and limitations of the Constitutio · Kansas, including KS.A. 10-427 et seq., as amended, and all other provisions o f Kansas applicable thereto. Genera) Obligations. principal and interest in part from special construction of the improvements financed taxes which may be levied without limitat n as real and personal, within the territorial · the Bonds is payable from ad valorem ta · s which may be all the taxable tangible property, rea credit and resources of the Iss r ar of and interest on the Bond. · t Redemption in the Bond Resolu · ssuer payable as to both property benefited by the ot so paid, from ad valorem all the taxable tangible property, ce of the principal and interest on the t limitation as to rate or amount upon ·torial limits of the Issuer. The full faith,ged for the prompt payment of the principal ds are being issued by means of a book-entry system with no physi tes to be made except as provided in the Bond Resolution. One Bond certi .--a1c o each date on which the Bonds are stated to mature or with respect to each formof B n · nee name of the Securities Depository, is being issued and required to be dep s Depository and immobilized in its custody. The book-entry system will eviden ns the Bonds by the Securities Depository's participants, beneficial ownership of the Bonds in autho · d denominations being evidenced in the records of such participants. Transfers of ownership Sli1f41i1§1Pe1'fected on the records of the Securities Depository and its participants pursuant to rules and procedures stablished by the Securities Depository and its participants. The Issuer and the Bond Registrar will recognize the Securities Depository nominee, while the Registered Owner of this Bond, as the owner of this Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Bond, (ii) notices and (iii) voting. Transfer of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfer of principal, interest and any redemption premium payments to beneficial owners of the Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The Issuer and the Bond Registrar will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the 2 Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Bond, notwithstanding the provision hereinabove contained, payments of principal of, redemption premium, if any, and interest on this Bond shall be made in accordance with existing arrangements among the Issuer, the Bond Registrar and the Securities Depository. Transfer and Exchange. EXCEPT AS OTHERWISE PROVIDED IN THE BONDRESOLUTION, THIS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSIT RY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OE SUCCESSOR SECURITIES DEPOSITORY. This Bond may be transferred or exchanged, as prov1 din the Bond Resolution, only on the Bond Register kept for that purpose at the principal of ce of the B Registrar, upon surrender of this Bond, together with a written instrument of transfer 1111•■ change satisfactory to the Bond Registrar duly executed by the Registered Owne istere s duly authorized agent, and thereupon a new Bond or Bonds in any Au ation of the same maturity and in the same aggregate principal amount shall be issu c nge therefor as provided in the Bond Resolution and upon payment of the ch e e Issuer shall pay all costs incurred in connection with the issuance, paymen •d initi-the Bonds and the cost of a reasonable supply of bond blanks. The Issuer and the o-Agen and treat the person in whose name this Bond is registered on the Bond Register as a olute o. hereof for the purpose of receiving payment of, or on account of, the princiP. 1 or redem · on e he of and interest due hereon and for all other purposes. The Bonds are issued i · stereAuthentication. This Bond shall no ome atory for any purpose or be entitled to any security or benefit under the hereon shall have been lawfully ex be done and to exist precedent o an and do exist in due and re Kansas, and that the tot constitutional or statut ·if cate of Authentication and Registrationthat all acts, conditions, and things required to the issuance f tliis Bond have been properly done and performed ner a equired by the Constitution and laws of the State of r, including this series of bonds, does not exceed any Issuer has caused this Bond to be executed by the manual, 'layor and attested by the manual, electronic or facsimile signature ereto or imprinted hereon. CITY OF SALINA, KANSAS By: -�...-.....==-�.....__.a......,yo'+"r -�......_..J��'--'l'r-+---3 CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond is one of a series of General Obligation Refunding Bonds, Series 2021-B, of the City of Salina, Kansas, described in the within-mentioned Bond Resolution. Registration Date: September 8, 2021 Registration Number: 0322-085-090821-357 The following is a true and correct copy Office of the State Treasurer, Topeka, Kansas, as Bond Registrar and Payin Bond Counsel, which was dated and issued as the dat ion of Gilmore & Bell, P.C., ce and delivery of such Bonds: Governing Body City of Salina, Kansas Re: UMB Bank, n.a. Kansas City, Missouri ation Refunding Bonds, Series 2021-B, of the City of ·eptember 8, 2021 ���ve act s Bond Counsel in connection with the issuance by the City of Salina, Kansas (the ·"), of the above-·. ed bonds (the "Bonds"). In this capacity, we have examined the law and thecerti · . ce . 1cations and other documents that we deem necessary to render this opinion. Capital1 erms n otlierwise defined herein shall have the meanings ascribed thereto in the resolution adopted by t e gove ing body of the Issuer prescribing the details of the Bonds. Regardi g 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 Bonds have been duly authorized, executed and delivered by the Issuer and are validand legally binding general obligations of the Issuer. 4 2.The Bonds are payable as to both principal and interest in part from special assessmentslevied upon the property benefited by the construction of certain improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Bonds to the extent that necessary funds are not provided from other sources. 3.The interest on the Bonds is: (a) excludable from gross income for£ eral income taxpurposes; and (b) not an item of tax preference for purposes of the federal alternativ · nimum tax. The opinions set forth in this paragraph are subject to the condition that the Issuer complies witfi' requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be satisfied sub:s issuance of the Bonds in order that interest thereon be, or continue to be, exc federal income tax purposes. The Issuer has covenanted to comply with f the ailure come "qualified ing other to comply with certain of these requirements may cause interest on the for federal income tax purposes retroactive to the date of issuance o tax-exempt obligations" within the meaning of Code§ 265(b)(3 federal tax consequences arising with respect to the Bonds. 4.The interest on the Bonds is exempt from inco We express no opinion regarding the Statement or other offering material relating to Statement). Further, we express no opinion ti other than as expressly set forth in this opi · . n. sufficiency of the Official e ent, if any, stated in the Official es arising with respect to the Bonds The rights of the owners of t insolvency, reorganization, moratori equitable principles, whether c sid oility thereof may be limited by bankruptcy, ws affecting creditors' rights generally and by This opinion is opinion to reflect any occur after the date e assume no obligation to revise or supplement this .Wll'l'1m.mc;es that may come to our attention or any changes in law that may GILMORE & BELL, P.C. 5 CERTIFICATE OF CLERK STATE OF KANSAS ) ) ss. COUNTY OF SALINE ) The undersigned, Clerk of the City of Salina, Kansas, does hereby certify that within Bond has been duly registered in my office according to law as of September 8, 2021. WITNESS my hand and official seal. ,/ / .- / By: __!t'--===--;t.+*;16,,����:..__ CERTIFICATE OF STATE T OFFICE OF THE TREASURER, STATE OF KA LYNN W. ROGERS, Treasurer of t proceedings leading up to the issuance of that this Bond was registered in such s, does ereby certify that a transcript of the s been ·n the office of the State Treasurer, and eptember 8, 2021. 7 BOND PRINTER'S CERTIFICATE This will certify that Gilmore & Bell, P.C., Wichita, Kansas has printed and delivered registered bonds for: UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA GENERAL OBLIGATION REFUNDING BOND SERIES 2021-B These Bonds were delivered as continuous page Bonds numbered R-1 through R-13. All spoilage and press proofs needed in our manufacture have been destroyed. GILMORE & BELL, P.C. {JJ�tr,. a. t� By _________________ _ Wontu A. Bivins, Legal Practice Assistant 600596.20219\BOND PRINTER'S CERTIFICATE (Blue Safety Paper) AGREEMENT BETWEEN ISSUER AND AGENT $6,220,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B DATED SEPTEMBER 8, 2021 Gilmore & Bell, P.C. 08/16/2021 THIS AGREEMENT, dated as of September 8, 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 bonds (the "Securities"), and the Issuer wishes the Agent to act as its Paying Agent, Bond Registrar, and Transfer Agent for the Securities: Now, therefore, it is hereby agreed as follows: I.APPOINTMENT Issuer hereby appoints or has heretofore appointed the State Treasurer of Kansas to act as PayingAgent, Bond Registrar and Transfer Agent for the Securities. The State Treasurer of Kansas hereby accepts its appointment as the Paying Agent, Bond Registrar and Transfer Agent. II.BASIC DUTIES A.Issuer or its duly authorized representative agrees to furnish Agent the name(s) andaddress( 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 keep a register of the Securities and their transfer and exchange. D.Agent may rely upon any document believed by it to be genuine and to have been 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. E.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.600596.20219\CLOSING DOCS_ v.3 III.COMPENSATION Issuer covenants and agrees to pay to Agent, as reasonable compensation for the services provided as Agent, an initial setup fee of $300, a registration fee of $30, plus a fee of $3,250,which is based on "Book-entry Only" Securities. This amount will be due at the time of registration unless such fee is to be paid from the proceeds of the bond issue in which case Issuer agrees to pay such fee within two (2) business days of the closing of the bond issue. In addition to the aforementioned fee, Issuer covenants and agrees to pay to Agent the fee as stated and required by K.S.A. 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 orintegral 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 equalling 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 Securityshall 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 Agent with an adequate supply of certificates for any anticipated transfers or exchanges of thecertificates. 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) and shall notify Agent of each number( s) prior to the issuance of the applicableSecurities. C.INTEREST CALCULATIONS Agent shall calculate interest on the basis of $1,000 and $5,000 units, or in the case of oneodd denomination, calculate the unit separately. Each intermediate unit calculation is first600596.20219\CLOSING DOCS v.3 2 determined, then rounded to the sixth decimal position; i.e. whenever the seventh decimal 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.SURRENDERSecurities surrendered for payment, cancellation or partial redemption shall be cancelledby Agent and returned to Issuer in accordance with K.S.A. 10-111.E.TRANSFERS AND EXCHANGES1.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 or Ordinance of the Issuer (the"Bond Resolution"), payments of interest shall be made to the owner of record ofeach Security as of the close of business on the fifteenth day of the monthpreceding each interest payment date. The Agent shall make such payments to therecord owner of each Security as set forth on the registration books maintained byAgent 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 Bond Resolution authorizing the Securities.F.REGISTRATION DATES AND FUNDS FOR PAYMENTSDate 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 andamendments 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 SECURITIESIf 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 shallperform 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.H.REDEMPTIONS600596.20219\CLOSING DOCS v.3 3 Optional Redemption. If any Securities are to be redeemed pursuant to an optional redemption in accordance with their terms, Issuer agrees to give Agent at least fifteen ( 15) days written notice thereof prior to the notice to be given the Security owners. If there is no provision for notice to the Security owners, Issuer agrees to give at least thirty (30) days written notice to Agent. Notice of Redemption. Agent shall then notify, by ordinary mail, the owner of such Securities to be so redeemed. Agent shall select the Securities to be so redeemed. Agent shall not be required to exchange or register a transfer of any Security for a period of fifteen (15)days preceding the date notice is to be provided to the Security owners for the 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 BondResolution, Agent shall not be required to transfer or exchange any Security beginning onthe day following the 15th day preceding the date set for redemption. I.MISCELLANEOUS Agent hereby acknowledges receipt of numbered Securities of Issuer (in a number equal toone Security for each maturity) for registration and exchange, and shall safeguard any"blank" Securities held for purpose of exchange or transfer. J.REPORTS Agent shall provide Issuer an annual report of the activity with respect to the issuance ofSecurities upon written request of Issuer. K.CONSTRUCTION This Agreement shall be construed in accordance with the laws of the State of Kansas andalso the Bond Resolution authorizing the issuance of the Securities. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20219\CLOSING DOCS v.3 4 ATTACHMENT "A" SAMPLE X = I = X = $5,000.00000 ........................ Bond Unit .06875 ........................ Interest Rate 343.750000 Rounded to six decimal places 360 ........................ Days per year .954861 Rounded to six decimal places 180 ........................ Day in interest period 171.874980 (Rounded to second decimal= $171.87) Unit interest is then multiplied by the number of units in the maturity. 600596.20219\CLOSING DOCS v.3 A-1 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 ('.'linli1c oflssuct and Co-lssuer(s), if applicable) The Depository Trust Company ] 830 l Bermuda Green Drive Tampa, FL 33647 Attention: Underwriting Department Ladies and Gentlemen: 04/14/2021 (Date) This letter sets forth our understanding with respect to all issues (the "Securities") that Issuer shall request to be.made eligible for deposit by TI1e Depository Trust Company ("DTC"). Issuer is: tNote; tssuer shall represent one and cross out the other,) ���� [formed under the Jaws ofl,_ _____ t_he_S_ta_t_e_o_f_K_a_n_s_as ____ _ To induce OTC 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 ce1iai11 related matters. Address) Very truly yours, City of Salina, Kansas --- ( l'rinl Name) 300 West Ash ---------,,---,-,-,---,--------·-(Str��I Address) Salina, Kansas, USA 67402 tCityJ iSiatcJ ·-·-·--i,aun1ry) (Zip Code) (785)309-5735 (Phvnc Numln:rJ jovonna.rutherford@salina.org ---�----·-�-·---------if:-mail BLOR 06-2013 SCHEDULE A (To Blanket Issuer Letter of Representations) SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING BOOK-ENTRY-ONLY ISSUANCE (Prepared by DTC--bracketed material may be npplicable only to certain issues) l.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 of] 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, orie 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 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 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 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 befound 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 areregistered in the name ofDTC'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, wruch may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalfoftheir 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 thatcopies of notices 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 to Securities 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/RemarketingJ 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 accowit.] 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 OTC ( or asuccessor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12.The information in this section concerning OTC 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 CREDIT OPINION 9 August 2021 Contacts Heather Guss + 1.214.979.6881 Analyst heather.guss@moodys.com Tatiana Killen + 1.212.553.2895 VP-Senior Analyst tatiana.killen@moodys.com CLIENT SERVICES Americas Asia Pacific Japan EMEA 1-212-553-1653 852-3551-3077 81-3-5408-4100 44-20-7772-5454 U.S. PUBLIC FINANCE Salina (City of) KS Update to credit analysis Summary The credit profile of the City of Salina KS (Aa3) benefits from its moderately sized tax base located in the north central region of the State of Kansas (Aa2 stable) and the city serves as an economic hub for surrounding communities. The profile also reflects below average resident incomes which are offset by the below average cost of living. The financial position has improved materially in recent years and operating fund reserves are healthy. The debt, pension liabilities, and fixed costs are elevated but will remain manageable. Credit strengths »Modestly increasing tax base, resilient employment »Additional liquidity outside of the operating funds »Low cost of living Credit challenges »Elevated debt burden »Below average resident income Rating outlook Moody's does not usually assign outlooks to local government credits with this amount of debt. Factors that could lead to an upgrade »Continued growth in the tax base »Stable financial performance and maintenance of reserves at current levels >> Material moderation of the debt and pension burdens Factors that could lead to a downgrade »Contraction of the tax base »Erosion of reserves »Increased debt burden or fixed costs MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Key indicators of Finances include general and debt service funds Profile The City of Salina is in north central Kansas, approximately 95 miles north of Wichita (Aa2 stable) near the geographic center of the contiguous US. It is the seventh largest city in Kansas, with a 2019 estimated population of 47,000. Detailed credit considerations Economy and tax base The tax base will continue to grow modestly because of manufacturing expansion as well as new residential construction over the next decade. The city serves as an economic hub for the surrounding area. Assessed value has increased an average of 2.4% annually for the past five years, including a 1% increase to $3.3 billion in fiscal 2021. Taxpayer concentration is modest with the 10 largest taxpayers accounting for 11.2% of full value. Schwan's Company is undergoing a 400,000 square foot expansion of its existing pizza manufacturing facility that will add 225 new jobs by 2023. Great Plains Manufacturing announced it will occupy a former lighting plant to manufacture Kubota construction equipment and employ approximately 130 people. Further, there are various redevelopment projects in downtown. Because of the manufacturing expansion, the city reports that about 1,000 new housing units (single-and multi-family) are needed over the next five to 70 years and the city and Saline County (Aa2) are working closely together to spur the needed residential development. Financial operations and reserves Financial performance has improved annually for the past several years and operating fund reserves have grown materially since fiscal 2015. Management budgets conservatively, as shown by the.recent improvement as well as the strong fiscal 2020 surplus despite the pandemic, and the strong finances should continue. Available general fund balance grew to $15 million in fiscal 2020 (December 31 year-end), up from $4.7 million in fiscal 2015. The 2020 fund balance was equal to a healthy 33.6% of revenue, which is just slightly below the state and national Aa3 medians. But for the first time in several years, the reserves are ahead of the city's s formal fund balance policy (between 15% to 20% of budgeted expenditures) and the city intends to maintain reserves at the current level. This publIcat1011 does not announce a credit rating awon Fo1 any credit ratings referenred m this publication, please 1ee the Iat111gs tah on the issuer/entity page on www.moo�ys.c orn for the most updated uedit eating action mformat1un and roting history 9 August 2021 Salina (City of) KS: Update to credit analysis MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE When including the debt service fund, the 2020 available operating fund balance improved to $75.5 million or 30.6% of revenue. This too is slightly below the state and national Aa3 medians but is still healthy. Operating reseNes are bolstered by liquidity held in other governmental funds, namely the sales tax capital fund, which is funded by a portion of a 1.25% sales tax designated for capital, debt and human seNices purposes. At fiscal year-end 2020, the sales tax capital fund held $5.2 million, up from $2.4 million in 2019 because of delays in some capital expenditures caused by the pandemic. The fiscal 2021 general fund budget is built around fiscal 2019 actual revenue and expenditures and reflects a $500,000 surplus. Management reports that year to date operations are trending favorably because of strong sales tax receipts and stable property tax revenue, which are the city's largest general fund revenue sources at 30% and 23%, respectively. Various expenditures savings are also contributing to the positive results. There will be some drawdown of reserves in the sales tax capital fund as the city plans to address the deferred capital projects that were delayed fiscal 2020. Debt and pensions The debt burden is twice the national Aa3 median and is a credit weakness. The net direct debt burden (which excludes GO debt paid by the water and sewer system) is 2.7% of fiscal 2021 full value. The city has future debt plans, including fixing out $5.2 million of outstanding temporary GO notes that mature next year. In addition, the river renewal project and baseball facility upgrades will require debt, but the city has identified dedicated revenue sources for those projects, so at this time, they are not expected to pressure general fund operations. However, a material increase in the debt burden and/or fixed costs could lead to negative credit pressure. Total fixed costs in 2020 (debt service, pension and OPEB contributions) totaled 21.3% of operating fund revenue. The bonds are a general obligation of the city payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all taxable tangible property, real and personal, within the territorial limits of the city. Budgetary pressure is likely to remain manageable from the city's exposure to two statewide cost-sharing pension plans, the Kansas Public Employees Retirement System (KPERS) and Kansas Police and Fireman's Retirement System (KP&F). The 2020 pension contribution was $3.4 million in 2020, which represented a manageable 6.7% of operating revenue. For the third straight year, the contribution was slightly above Moody's calculated "tread water" indicator. The "tread water" indicator measures the annual government contribution required to prevent the reported net pension liability from growing, under reported assumptions. Moody's adjusted net pension liability (ANPL) increased in 2020 because of a lower discount rate. The ANPL increased to $74.5 million or 226% of fiscal 2020 operating fund revenue (combined general and debt service funds) and 3.4% of full value. The city funds OPEB on a pay-as-you-go basis; the fiscal 2020 contribution was $304,000 or only 0.6% of operating fund revenue. Moody's adjusted net OPEB liability, where we apply a standardized discount rate to compute present value of accrued benefits, is $4.3 million or a manageable 8% of operating revenue and 0.1% of full value. ESG considerations Environmental The local government sector generally has low exposure to environmental risks. According to data from Moody's affiliate Four Twenty Seven, the city has high exposure to heat and water stress and low exposure to extreme rainfall. Extreme weather events are typically accompanied by state and federal assistance, which further mitigates environmental risk. Social Social considerations do not present material risks to the city's credit profile. Below average resident income is offset by a below average cost of living. The city's May 2021 unemployment rate of 3.4% was below both state (3.7%) and national (5.5%) rates for the same period. Governance The city is managed by a commission comprised of five members elected at-large who then select one member to act as mayor. The commission appoints a city manager who is responsible for the administration of the municipal government. The city provides general 3 9 August 2021 Salina (City of) KS: Update to credit analysis 4 government along with police, fire, utilities and arts and humanities. The city demonstrates good governance by establishing formal fund balance policies and periodically reviewing the policies to ensure they continue to provide flexibility and stability. Kansas cities have an institutional framework score of Aa. Cities primarily rely on property tax and local option sales tax revenue, which in combination, are moderately predictable. Cities have moderate revenue-raising ability. Legislation in 2021 repealed the property tax lid and requires cities to hold a public hearing if the proposed budget exceeds the property tax revenue-neutral rate; the revenue neutral rate is the mill rate that would generate the same property tax revenue as levied the previous year using the current year's total assessed valuation. Expenditures are highly predictable, and cities have a strong legal ability to reduce major expenditures because cities are generally not subject to collective bargaining and typically have modest fixed costs. 9 August 2021 Salina (City of) KS: Update to credit analysis MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Rating methodology and scorecard factors The US Local Government General Obligation Debt methodology includes a scorecard, a tool providing a composite score of a local government's credit profile based on the weighted factors we consider most important, universal and measurable, as well as possible notching factors dependent on individual credit strengths and weaknesses. Its purpose is not to determine the final rating, but rather to provide a standard platform from which to analyze and compare local government credits. Exhibit 2 Salina {City of) KS Rating Factors Economy/Tax Base (30%}[1] T ax Base Size: Full Value (in 000s) Measure $3,294,116 $70,091 Full Value Per C-'ap,_i_ta_��----cc�------- Median Family Income(% of US __ M_e_d_i a_n"-) ___________________________ _91 .3% Finances (30%) Fund Balance as a % of Revenues 5-Year Dollar Change in Fund Balance as% of Revenues Cash Balance as a % of Revenues 5-Year Dollar Change in Cash B al ance as% of Revenues Management (20%) Institution al Fr amework Operating History: 5-Ye ar Average of Operating Revenues/ Operating Expenditures Debt and Pensions (20%) Net Direct Debt/ Full V alue(%) Net Direct Debt/ Oper ating Revenues (x) 3-Year Average of Moody's-Adjusted Net Pension Liability/ Full Va_l_ue�(o/c_o�) _________ _ 3-Year Average of Moody's Adjusted Net Pension Liability/ Oper ating _R_ev_e_n_u_es_(.,__x"-) _______ [1] Economy measures are based on data from the most recent year available. [2] Notching Factors are specifically defined in the US Local Government General Obligation Debt methodology. [3] Standardized adjustments are outlined in the GO Methodology Scorecard Inputs publication. Sources: US Census Bureau, Salina's financial statements and Moody's Investors Service 22.3% 11.8% 20.3% 10.9% Aa 1.0x 2.6% l.7x 2.6% 1.7x Scorec ard-Indicated Outcome Assigned R ating Score Aa Aa A a A a A a Aa Aa Aa Baa A A A A Aa3 Aa3 9 August 2021 Salina (City of) KS: Update to credit analysis 6 �, 2021 Mc,ody's Corporation, Moody's Investors Service, Inc , Moody's Analytics, Inc. and/or thelf licensors and affiliates (collectively, "MOODY'S"). All rights reserved CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARI' THEIR CURRENT OPINIONS OF THE RELATIVF FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR Df�T-UKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVH Y, "PUBLICATIONS") MAY INCLUDE SUCH CURRrnT OPINIONS MOODY'S DFFIN[S CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAi. FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED HNANCIAL LOSS IN THE EVENT OF DEFAUI.T OR IMPAIRM[NT. SH APPIICABLE MOODY'S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIG.A.TIONS ADDRESSED BY MOODY'S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITWTO: LIQUIDITY RISK, MARKH VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSISSMENl S"), AND OTHER OPINIONS fNCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS or CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY Al.SO INCi.UDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND REI.ATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY'S ANALYTICS. INC.AND/OR 11 S AHi Li ATES. MOODY'S CREDIT RATINGS. ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUll OR PROVIDE INVESTMENT OR HNANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVID� RECOMMENDATIONS 10 PURCHASE, SELi., OR HOI.D PARTICULAR SECURITffS. MOODY'S CREDIT RATINGS. ASSESSMENTS, OTHER OPINIONS AND PUBI.ICATIONS DO NOT COMM£NT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVfSTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBI.ISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CAR[, MAKE ITS OWN s ruDY AND EVALUATION Of EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. MOODY'S CREDIT RATINGS, ASSE,,MENTS, OTH[R OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RrCKL[SS AND INAPPROPRIATF FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT [)fCISION Ir IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISFR. All INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE Of SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRAN5,ERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANr SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEAN, WHATSOEVER, BY ANY rERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT MOODY'S CREDIT RATINGS, A,SESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THATTERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK. All 111format1on contained herein 1s obtained by MOODY'S from sources believed by it tu be acrnrate and reliable. Because of the possibility of human or mechamcal error as well as other factors, however, all 1nrormat1on contamed herein ,s provided "AS IS" without warranty of any kind MOODY'S adopts all necessary measures so that the ,nformation 11 uses 111 ass,grnng a credit rotmg ,s of sufficient quality and from sources MOODY'S considers to be reliable including, when appropliate, independent third-party sources. However, MOODY'S 1s not an auditor and cannot ,n every mstance independently verify ur validate ,nformation received 111 the rat,ng process or m prepanng ,ts Publications To the extent permitted by law, MOODY'S and ,ts dire<.tors, officers, employees, agents, representatives, licensors and suppliers disclaim liability tu any pe,son or entity to, any indirect. special, consequential, or inndental losses or damages whatsoevn ansing from 01 111 connection with the info, mation contamed herem 01 the usP of or mability to use any such mfo, mat1on, even ,f MOOOY'S or any of ,ts dire<tors, officers, employees, agents, representatives, licensors or suppliers i$ adv1Sed 111 advance of the possibility of such losses or damages, inrluding but not limited to: (a) any los, of present or prospective profits or (b) any lu,s or damage ans,ng where the relevant financial mstrumern 1s not the subJect of a part,wlar credit rating assigned by MOODY'S To the extent permitted by law, MOODY'S and its directors, office,s, employees, agents, 1epresentotives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, mcludmg but not limited to by any negligenre (but excluding fratid, willful misconduct or any othe, type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency w1thm or beyond the control of, MOODY'S 01 any of its directors, officers, employees, agents, representatives, Ucensors or suppliers, arising from or m connection with the information contained herein or the use of or inability to use any such information. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OK MANNER WHATSOEVER Moody's Investors Service, Inc, a wholly-owned credit raung agency su�sidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and murnnpal bonds, debentures, notes and commPrcial caper) and preferred stock rated by Moody's Investors Serv,ce, Inc. have pnor to assignment of any credit ratmg, agreed to pay to Moody's Investors Service, Inc tor credit ratings opinions and se1v1ces rendered by it fees ranging from $1,000 to approximately $5,000,000 MCO and Moody's Investors Service also maintain pnlic,es and procedures to address the independence of Moody's Investors Service credit ratings and credit 1at1ng processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between ent1t1es who hold credit ratings from Moody's Investors Service and have dlso publicly reported to trie SEC an ownerst11p 111terest ,n MCO of more than 5%, is posted annually at \J\fWw.moodys com under the heading "Investor Relat,ons-Corprnate Governance -Director and Shareholder Affiliation Policy " Additional terms tor Australia only Any publication into Australia of th,� document ,s pursuant to the Australian Finanoal Services l 1cense of MOODY'S affiliate, Moody's Investors Serv1re Pty Linuted ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty ltd ABN 94105136 972 AFSL 383569 (as applirable) This document 1s intended to be provided only to "wholesale clients" w,thm the meaning of section 761G of the Corporations Act 2001. By rontmumg to access this document from within Australia, you rep,esent to MOODY'S that you a,e, 01 are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you ,epresent will directly 01 mdirectly dissemmate th,s document or ,ts contents to "retail clients" within the meanmg of section 761G of the Corporations Act ?001 MOODY'S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer. not on the equity securities of the 1Ssuer rn any form of security that is avdilable to retail 111vestors. Additional terms frn Japan only Moody's Japan K.K. ("MJKK") 1s a wholly-owned credit rat,ng agency subsidiary of Moody's Group Japan G.K., which 1s wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO Moody's SF Japan K K ('MSFJ") IS a wholly .. owned credit rating agency subS1diary of MJKK. MSFJ IS not a Nat,onally Recog111zed Stdt1st1cal Rat,ng Orgarnzation ("NRSRO"). The,efore, credit ratings assigned by MSFJ are Non-NRSRC Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment unde1 U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan financial Services Agency and their reg,stranon numbers are FSA Comm1ss1oner (Ratings) No 2 and 3 respectively MJKK CJr MSFJ (as applKable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commerc1dl paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, pnor to assignment of any credit rnt,ng, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and se1V1ce, rendered by it fees ranging from JPY12S,000 to approximately IPYSS0,000,000 MJKK and MSFJ also mamtam poliries and procedures to address Japanese regulatory requirements. REPORT NUMBER 1297924 9 August 2021 Salina (City of) KS: Update to credit analysis MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE CLIENT SERVICES Americas Asia Pacific Japan EMEA INVESTORS SERVICE 7 9 August 2021 1-212-553-1653 852-3551-3077 81-3-5408-4100 44-20-7772-5454 Salina (City of) KS: Update to credit analysis CL OSING CERTIFICATE $6,220,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B DATED SEPTEMBER 8, 2021 Gilmore & Bell, P.C. 08/16/2021 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 bonds (the "Bonds"); and certify as of September 8, 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 Bond Resolution (defined below) authorizing the Bonds. 2.Transcript of Proceedings. The transcript of proceedings relating to the authorization andissuance of the Bonds (the "Transcript"), furnished to the Purchaser of the Bonds, is to the best of our knowledge, information and belief full and complete; none of such proceedings have been modified, amended or repealed, except as might be shown in the Transcript; and the facts stated in the Transcript still exist. In each instance where copies appear in the Transcript, such copies are true and correct duplicates of the original instruments now on file with the Clerk. All certifications made by the Issuer in the Transcript Certificate dated August 16, 2021 are true and correct as of this date and are incorporated in this Certificate by reference. 3.Authorization and Purpose of the Bonds. The Issuer is issuing and delivering the Bondssimultaneously with the delivery of this Certificate, pursuant to and in full compliance with the Constitution and statutes of the State, including particularly KS.A. 10-427 et seq., as amended, Ordinance No. 21-11064 and Resolution No. 21-7969 of the Issuer duly adopted by the Governing Body of the Issuer on August 16, 2021 (collectively the "Bond Resolution") for the purpose of refunding the following bonds of the Issuer (collectively, the "Refunded Bonds"): Description G.O. Internal Improvement Bonds G.O. Internal Improvement Bonds Series 2013-B 2014-A Dated Date July 15, 2013 July 30, 2014 Years 2022 to 2033 2022 to 2034 Amount $2,395,000 4,000,000 The purpose of the refunding is to achieve interest cost savings through early redemption of the Refunded Bonds, to reduce debt service requirements of the Issuer for certain years, to restructure the debt payments on the Refunded Bonds and to provide an orderly plan of finance for the Issuer. 4.Security for the Bonds. The Bonds are general obligations of the Issuer payable in part fromspecial assessments levied upon the property benefited by the improvements financed by the Refunded Bonds and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer, with the balance 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, 600596.20219\CLOSING DOCS v.3 credit and resources of the Issuer are pledged under the Bond Resolution to the payment of the principal of and interest on the Bonds. In the Bond Resolution, the governing body of the Issuer has covenanted to annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, by levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the Issuer in the manner provided by law. 5.Sale of Bonds. The Bonds have been sold at rates not in excess of the limitations set forth inK.S.A. 10-1009. The Notice of Bond Sale dated July 19, 2021 and included in the Transcript constitutes a full true and correct copy thereof. A copy of such Notice of Bond Sale and Preliminary Official Statement was sent to prospective purchasers of the Bonds, and to all other persons and firms requesting copies of such Notice of Bond Sale and Preliminary Official Statement. 6.Official Statement. The Official Statement contained in the Transcript constitutes a full, trueand correct copy of the Official Statement relating to the Bonds. To the best of our knowledge, the Official Statement, other than the sections entitled "The Depository Trust Company," "Bond Ratings," "Legal Matters," "Tax Matters," and Appendices B and C, 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. 7.Continuing Disclosure Undertaking. The Issuer has heretofore executed a ContinuingDisclosure Undertaking (the "Disclosure Undertaking"), wherein the Issuer has covenanted to disseminate such information as is required in accordance with the provisions of the SEC Rule and the Disclosure Undertaking. In the Bond Resolution, the Issuer has covenanted to apply the provisions of the Disclosure Undertaking to the Bonds. A copy of the Disclosure Undertaking is contained in the Transcript. 8.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 Bonds shown to be authorized in the Transcript; (e) the validity of the Bonds, or any of the proceedings had in relation to the authorization, issuance or sale thereof; (f)the levy and collection of an ad valorem property tax to pay the principal of and interest on the Bonds; or (g) the federal or state tax-exempt status of the interest on the Bonds; wherein any unfavorable decision,ruling or finding would adversely affect the Issuer, the transactions contemplated by the Bond Resolution or the Official Statement, or the validity or enforceability of the Bonds, which are not disclosed in the finalOfficial Statement. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20219\CWSING DOCS v.3 2 FEDERAL TAX CERTIFICATE THIS FEDERAL TAX CERTIFICATE (the "Tax Certificate"), is executed as of September 8, 2021 (the "Issue Date"), by the City of Salina, Kansas (the "Issuer"). RECITALS 1.This Tax Certificate is being executed and delivered in connection with the issuance by the Issuer of $6,220,000 principal amount of General Obligation Refunding Bonds, Series 2021-B (the "Bonds"), under the Bond Resolution (as herein defined), for the purposes described in this Tax Certificate and in the Bond Resolution. 2.The Internal Revenue Code of 1986, as amended (the "Code"), and the applicable Regulations and rulings issued by the U.S. Treasury Department (the "Regulations"), impose certain limitations on the uses and investment of the Bond proceeds and of certain other money relating to the Bonds and set forth the conditions under which the interest on the Bonds will be excluded from gross income for federal income tax purposes. 3.The Issuer is executing this Tax Certificate in order to set forth certain facts, covenants, representations, and expectations relating to the use of Bond proceeds and the property financed or refinanced with those proceeds and the investment of the Bond proceeds and of certain other related money, in order to establish and maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes and to provide guidance for complying with the arbitrage rebate provisions of Code § 148(£). 4.The Issuer 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 setout specific tax compliance procedures applicable to the Bonds. NOW, THEREFORE, in consideration of the foregoing and the mutual representations, covenants and agreements set forth in this Tax Certificate, the Issuer represents, covenants and agrees as follows: ARTICLE I DEFINITIONS Section 1.01 Definitions of Words and Terms. Except as otherwise provided in this Tax Certificate or unless the context otherwise requires, capitalized words and terms used in this Tax Certificate have the same meanings as set forth in the Bond Resolution, and certain other words and phrases have the meanings assigned in Code§§ 103, 141-150 and the Regulations. The following words and terms used in this Tax Certificate have the following meanings: 600596.20219\FTC V.3 1 "Annual Compliance Checklist" means a checklist for each of the Financed Improvements designed to measure compliance with the requirements of this Tax Certificate and the Tax Compliance Procedure after the Issue Date as further described in Section 4.02 and substantially in the form attached as Exhibit E. "Bona Fide Debt Service Fund" means a fund, which may include Bond proceeds, that: (a) is used primarily to achieve a proper matching of revenues with principal and interest payments within each Bond Year; and (b) is depleted at least once each Bond Year, except for a reasonable carryover amount not to exceed the greater of (1) the earnings on the fund for the immediately preceding Bond Year, or (2) onetwelfth of the principal and interest payments on the Bonds for the immediately preceding Bond Year. "Bond" or "Bonds" means any bond or bonds described in the recitals, authenticated and delivered under the Bond Resolution. ''Bond Compliance Officer'' means the Issuer's Director of Finance 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. ''Bond Resolution" means Ordinance No. 21-11064 and Resolution No. 7969 of the Issuer duly adopted by the governing body of the Issuer on August 16, 2021, as originally executed by the Issuer, as amended and supplemented in accordance with the provisions of the Bond Resolution. "Bond Year'' means each one-year period (or shorter period for the first Bond Year) ending October 1 or another one-year period selected by the Issuer. "Code" means the Internal Revenue Code of 1986, as amended. ''Final Written Allocation" means the Final Written Allocation of expenditures prepared by the Bond Compliance Officer in accordance with the Tax Compliance Procedure and Section 4.02(b) of this Tax Certificate. "Financed Improvements" means the portion of the Improvements financed or refinanced with the proceeds of the Original Obligations as described in the Bond Resolution and on Exhibit D. "Gross Proceeds" means (a) sale proceeds (any amounts actually or constructively received by the Issuer from the sale of the Bonds, including amounts used to pay underwriting discount or fees, but excluding pre-issuance accrued interest), (b) Investment proceeds (any amounts received from investing sale proceeds or other Investment proceeds), (c) any amounts held in a sinking fund for the Bonds, (d) any amounts held in a pledged fund or reserve fund for the Bonds, (e) any other replacement proceeds, and (t) any transferred proceeds (unspent sale proceeds or investment proceeds of the Refunded Bonds). Specifically, the term Gross Proceeds includes (but is not limited to) amounts held in the following funds and accounts: (1)Redemption Fund. (2)Debt Service Account. (3)Costs of Issuance Account.600596.20219\FTC V.3 2 "Original Obligations" means collectively the Series 2013-B Bonds (including interim financing provided by the Series 2012-1 Notes) and the Series 2014-A Bonds (including interim financing provided by the Series 2013-1 Notes refunded thereby), which were the initial tax-exempt governmental obligations that financed or refinanced a portion of the Financed Improvements. "Output Contract" is defined in Regulations § 1.141-7 and generally includes any contract with a Non-Qualified User that provides for the purchase of the output of Financed Improvements. "Post-Issuance Tax Requirements" means those requirements related to the use of proceeds of the Bonds, the use of the Financed Improvements and the investment of Gross Proceeds after the Issue Date of the Bonds. ''Preliminary Expenditures" means: (a) costs incurred for architectural, engineering, surveying, soil testing, costs of issuance, and similar costs prior to commencement of acquisition, construction, or rehabilitation of the Financed Improvements, other than land acquisition, site preparation, and similar costs incident to commencement of construction of the Financed Improvements up to an amount not in excess of 20 percent of the issue price of the Original Obligations; and (b) costs incurred in an amount not in excess of the lesser of $100,000 or 5% of the sale proceeds of the Original Obligations. "Purchaser" means UMB Bank, N.A., Kansas City, Missouri, the original purchaser of the Bonds, and any successors and assigns. "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 Improvements on a short-:-term basis in the ordinary course of the Issuer's governmental purposes. (b)Agreements with Qualified Users or Non-Qualified Users to use all or a portion of theFinanced Improvements for a period up to 200 days in length pursuant to an arrangement whereby (1) the use of the Financed Improvements under the same or similar arrangements is predominantly by natural persons who are not engaged in a trade or business and (2) the compensation for the use is determined based on generally applicable, fair market value rates that are in effect at the time the agreement is entered into or renewed. Any Qualified User or Non-Qualified User using all or any portion of the Financed Improvements under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. (c)Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Improvements for a period up to 100 days in length pursuant to arrangements whereby (1) the use of the property by the person would be general public use but for the fact that generally applicable and uniformly applied rates are not reasonably available to natural persons not engaged in a trade or business, (2) the compensation for the use under the arrangement is determined based on applicable, fair market value rates that are in effect at the time the agreement is entered into or renewed, and (3) the Financed Improvements was not constructed for a principal purpose of providing the property for use by that Qualified User or Non-Qualified User. Any Qualified User or Non-Qualified User using all or any portion of the Financed Improvements under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. (d)Agreements with Qualified Users or Non-Qualified Users to use all or a portion of theFinanced Improvements for a period up to 50 days in length pursuant to a negotiated arm's-length 600596.20219\FTC V.3 4 ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS Section 2.01 Representations and Covenants of the Issuer. The Issuer represents and covenants as follows: (a)Organization and Authority. The Issuer: (1) is a city of the first class, duly created,organized and existing under the Constitution and laws of the State, (2) has lawful power and authority to issue the Bonds for the purposes set forth in the Bond Resolution, to enter into, execute and deliver the Bond Resolution, the Bonds, and this Tax Certificate and to carry out its obligations under this Tax Certificate and under such documents, and (3) by all necessary action has been duly authorized to execute and deliver the Bond Resolution, the Bonds, and this Tax Certificate, acting by and through its duly authorized officials. (b)Tax-Exempt Status of Bonds-General Covenant. The Issuer (to the extent within itspower or direction) will not use any money on deposit in any fund or account maintained in connection with the Bonds. whether or not such money was derived from the proceeds of the sale of the Bonds or from any other source, in a manner that would cause the Bonds to be "arbitrage bonds," within the meaning of Code§ 148, and will not (to the extent within its power or direction) otherwise use or permit the use of any Bond proceeds or any other funds of the Issuer, directly or indirectly, in any manner, or take or permit to be taken any other action or actions, that would cause interest on the Bonds to be included in gross income for federal income tax purposes. (c) Governmental Obligations-Use of Proceeds. Governmental Obligations-Use of Proceeds. Throughout the Measurement Period: ( 1) all of the Financed Improvements are expected to be owned by the Issuer or another Qualified User; (2) any Non-Qualified Use of the Financed Improvements has not exceeded and will not exceed 10% of the Financed Improvements; and (3) the Issuer will not permit Non-Qualified Use of the Financed Improvements without first consulting with Bond Counsel. If the Non-Qualified Use of the Financed Improvements exceeds 10% of the total use over the Measurement Period, then the Issuer will take "remedial action" in accordance with Regulations § 1.141-12, as specified in advice from Bond Counsel, as necessary to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes. The Issuer understands that remedial action could include redemption or defeasance of all or a portion of the Bonds. (d)Governmental Obligations-Private Security or Payment. As of the Issue Date, theIssuer expects that not more than 10% of the principal of and interest on the Bonds will be, and not more than 10% of the principal of and interest on the Refunded Bonds has been, (under the terms of the Bonds 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 Bonds without first consulting with Bond Counsel. 600596.20219\FTC V.3 6 ' (e)No Private Loan, Special Assessments. Not more than 5% of the Net Proceeds of theBonds will be loaned directly or indirectly to any Non-Qualified User. The payment of principal of and interest on the Bonds will be funded, and the payment of principal of and interest on the Refunded Bonds was funded, in whole or in part from mandatory special assessments against the property benefiting from the Financed Improvements. The use of the proceeds of the Original Obligations is not treated as a loan of the Original Obligations proceeds because (1) the special assessment is an enforced contribution for the purpose of raising revenue for specific capital improvements; (2) the special assessment does not include any fee for services; (3) the imposition and collection of the special assessment is not dependent upon, and does not vary depending on, whether the taxpayer is engaged, or the property is used, in a trade or business; and (4) the special assessment is imposed to pay for an essential governmental function. (f)Management Agreements. As of the Issue Date, the Issuer has not entered into anyManagement Agreements with Non-Qualified Users that does not comply with IRS Revenue Procedure 2017-13. For purposes of this subsection (f), as of the Issuer Date, the Issuer has entered into the Management Agreement, dated as of March 1, 2020, with Global Spectrum, L.P. relating to the management and operations of the Issuer's public arena and exhibition center known as the Tony's Pizza Events Center (formerly, the Bicentennial Center). During the Measurement Period, the Issuer will not enter into or renew any Management Agreement with any Non-Qualified User that does not comply in all material respects with IRS Revenue Procedure 2017-13 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 Improvements other than Qualified Use Agreements. 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)Output Contracts. As of the Issue Date, the Issuer does not have any Output Contracts.During the Measurement Period, the Issuer will not enter into any Output Contracts without first consulting with Bond Counsel. (i)Other Agreements. The Issuer recognizes that there may be a de minimis amount ofNon-Qualified Use of the Issuer's public arena and exhibition center known as the Tony's Pizza Events Center (formerly, the Bicentennial Center) on account of certain naming rights agreements relating thereto, and specifically a Naming Rights, Advertising and Sponsorship Agreement, dated as of February 17, 2017, with Schwan's Shared Services, LLC, d/b/a/Tony's Pizza. However, any Non-Qualified Use of the Financed Improvements has not exceeded and will not exceed 10% of the Financed Improvements. (j) Limit on Maturity of Bonds. A list of the assets included in the Financed Improvements and a computation of the "average reasonably expected economic life" is attached to this Tax Certificate as Exhibit D. Based on this computation, the "average maturity" of the Bonds, as computed by Bond Counsel, does not exceed 120% of the average reasonably expected economic life of the Financed Improvements. The "average reasonably expected economic life" of the Financed Improvements was determined as follows: the average economic life of the Financed Improvements as of the issue date of the Original Obligations was first multiplied by 120%, then reduced by the number of years elapsed from the issue date of the Original Obligations to the Issue Date. (k)Expenditure of Bond Proceeds.(1)Reimbursement of Expenditures; Official Intent. The governing body of theIssuer adopted one or more resolutions declaring the intent of the Issuer to finance the Financed Improvements with tax-exempt bonds and to reimburse the Issuer for expenditures made for the 600596.20219\FfC V.3 7 Financed Improvements prior to the issuance of those bonds. No portion of the Net Proceeds of the Original Obligations were used to reimburse an expenditure paid by the Issuer more than 60 days prior to the date the respective resolution was adopted, except for Preliminary Expenditures or as otherwise described in the federal tax certificate or similar document for the Original Obligations. The Issuer evidenced each allocation of the proceeds of the Original Obligations to an expenditure in writing. (2)Final Allocation of Bond Proceeds to Expenditures. The Improvements wereplaced in service on the dates listed on Exhibit D. The Issuer made a final allocation of proceeds of the Original Obligations to Improvements expenditures, a copy of which is attached to this Tax Certificate as Exhibit D. The Issuer will maintain the Final Allocation and accurate supporting records of all expenditures made for the Improvements, including the amount, the date paid, a description of the purpose, and the source of funds (whether Bond proceeds or other money) allocated to each Improvement expenditure, in accordance with Section 4.02 of this Tax Certificate. (1)Registered Bonds. The Bond Resolution requires that all of the Bonds will be issued andheld in registered form within the meaning of Code§ 149(a). (m)Bonds Not Federally Guaranteed. The Issuer will not take any action or permit anyaction to be taken which would cause any Bond to be "federally guaranteed" within the meaning of Code §149(b).(n)IRS Form 8038-G. Bond Counsel will prepare IRS Form 8038-G (Information Returnfor Tax-Exempt Governmental Obligations) based on the representations and covenants of the Issuer contained in this Tax Certificate or otherwise provided by the Issuer. Bond Counsel will sign the return as a paid preparer following completion and will then deliver copies to the Issuer for execution and for the Issuer's records. The Issuer agrees to timely execute and return to Bond Counsel the execution copy of Form 8038-G for filing with the IRS. A copy of the IRS Form 8038-G as filed with the IRS with proof of filing will be included in Exhibit A of Tax Certificate. (o)Hedge Bonds. At least 85% of the net sale proceeds (the sale proceeds of the OriginalObligations less any sale proceeds invested in a reserve fund) of each issue comprising the Original Obligations were used to carry out the governmental purpose of the Original Obligations within 3 years after the respective issue date of the Original Obligations, and not more than 50% of the proceeds of each issue comprising the Original Obligations were invested in Investments having a substantially guaranteed Yield for 4 years or more. (p)Single Issue; No Other Issues. The Bonds 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 theBonds, (2) are being sold under the same plan of financing as the Bonds, and (3) are expected to be paidfrom substantially the same source of funds as the Bonds (disregarding guarantees from unrelated parties,such as bond insurance).(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 Bonds. The Issuer will not enter into any such arrangement in the future without first consulting with Bond Counsel. 600596.20219\FTC V.3 8 (r)Guaranteed Investment Contract. As of the Issue Date, the Issuer does not expect toenter into a Guaranteed Investment Contract for any Gross Proceeds of the Bonds. The Issuer will be responsible for complying with Section 4.04(d) hereof if it decides to enter into a Guaranteed Investment Contract at a later date. (s) Bank Qualified Tax-Exempt Obligations. The Bonds are "qualified tax-exempt obligations" (or bank-qualified obligations") under Code § 265(b), and with respect thereto, the Issuer represents and certifies as follows: (1) the Refunded Bonds are "qualified tax-exempt obligations" under Code § 265(b); (2) the greater of the aggregate principal amount of the Bonds and the aggregate issue price of the Bonds does not exceed $10,000,000; (3) the Bonds are current refunding the Refunded Bonds (that is, the Bonds are not advance refunding the Refunded Bonds); (4) the average maturity of the Bonds is not later than the average maturity of the Refunded Bonds; and (5) the final maturity of the Bonds is not later than 30 years after the date the Original Obligations were issued. Based on these certifications, because the amount of the Bonds does not exceed the outstanding amount of the Refunded Bonds, the Bonds are "deemed" designated as "qualified tax-exempt obligations" under Code§ 265(b)(3)(D)(ii). (t)General Allocation and Accounting. The portion of the Improvements financed by theOriginal Obligations and refinanced by the Bonds may have been financed in part with proceeds of the Original Obligations and in part with other funds of the Issuer. The portion of the Improvements financed with proceeds of the Original Obligations is referred to as the Financed Improvements. Attached as Exhibit D is a schedule showing the Improvements financed, in whole or in part, with proceeds of the Original Obligations. For purposes of determining Non-Qualified Use, if any, of the Financed Improvements during the Measurement Period, the Issuer will allocate Non-Qualified Use first to the portion of the applicable Improvements financed with other funds of the Issuer and second to the Financed Improvements. 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 Improvements financed with other funds of the Issuer and determine the extent to which the proceeds of the Bonds and the Financed Improvements are used in a Non-Qualified Use. (u)Compliance with Future Tax Requirements. The Issuer understands that the Code andthe Regulations 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 e�clusion of the interest on the Bonds from gross income for federal income tax purposes. Section 2.02 Continuing Application of Representations and Covenants. All representations, covenants and certifications contained in this Tax Certificate or in any certificate or other instrument delivered by the Issuer under this Tax Certificate, will survive the execution and delivery of such documents and the issuance of the Bonds, as representations of facts existing as of the date of execution and delivery of the instruments containing such representations. The foregoing covenants of this Section will remain in full force and effect notwithstanding the defeasance of the Bonds. ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS Section 3.01 General. The purpose of this Article is to certify, under Regulations§ 1.148-2(b), the Issuer's expectations as to the sources, uses and investment of Bond proceeds and other money, in order to support the Issuer's conclusion that the Bonds are not arbitrage bonds. The person executing this Tax Certificate on behalf of the Issuer is an officer of the Issuer responsible for issuing the Bonds. 600596.20219\FTC V.3 9 Section 3.02 Reasonable Expectations. The facts, estimates and expectations set forth in this Article are based upon and in reliance upon the Issuer's understanding of the documents and certificates that comprise the Transcript, and the representations, covenants and certifications of the parties contained therein. To the Issuer's knowledge, the facts and estimates set forth in this Tax Certificate are accurate, and the expectations of the Issuer set forth in this Tax Certificate are reasonable. The Issuer has no knowledge that would cause it to believe that the representations, warranties and certifications described in this Tax Certificate are unreasonable or inaccurate or may not be relied upon. Section 3.03 Purpose of Financing. The Bonds are being issued for the purpose of providing funds to pay the costs of refunding the Refunded Bonds to achieve interest cost savings through early redemption of the Refunded Bonds and to provide an orderly plan of finance for the Issuer. Section 3.04 Funds and Accounts. The following funds and accounts have been established under the Bond Resolution: (a)Redemption Fund.(b)Debt Service Account. ( c)Costs of Issuance Account. Section 3.05 Amount and Use of Bond Proceeds. (a)Amount of Bond Proceeds. The total proceeds to be received by the Issuer from the saleof the Bonds are as evidenced in Exhibit B attached to this Tax Certificate and calculated as follows: Principal Amount Less Underwriter's Discount Plus Original Issue Premium Total Net Purchase Price $6,220,000.00 -24,827.37 267.544.95$6,462,717.58 (b)Use of Bond Proceeds. The Bond proceeds are expected to be allocated to expendituresas follows: (1)The sum of $67,717.58 will be deposited in the Costs of Issuance Account and used to pay the Costs of Issuance of the Bonds. (2)The remaining Bond proceeds in the amount of $6,395,000.00 will be deposited into the Redemption Fund and paid and transferred to the paying agent for the Refunded Bonds, with irrevocable instructions to apply such amount to the payment of the Refunded Bonds. Section 3.06 No Advance Refunding. No proceeds of the Bonds will be used more than 90 days following the Issue Date to pay principal or interest on any other debt obligation. Section 3.07 Current Refunding. (a)Proceeds Used For Current Refunding. Proceeds of the Bonds will be used to payprincipal and interest on the Refunded Bonds. All such proceeds shall be spent not later than 90 days after the Issue Date. 600596.20219\FTC V.3 10 (b)Transferred Proceeds. There are no unspent proceeds (sale proceeds, Investmentproceeds or transferred proceeds) of the Refunded Bonds. Therefore, there are no transferred proceeds of the Bonds. Section 3.08 Completion of Financed Improvements. The Financed Improvements have previously been completed. Section 3.09 Sinking Funds. The Issuer is required to make periodic payments in amounts sufficient to pay the principal of and interest on the Bonds. Such payments will be deposited into the Debt Service Account. Except for the Debt Service Account, no sinking fund or other similar fund that is expected to be used to pay principal of or interest on the Bonds has been established or is expected to be established. The Debt Service Account is used primarily to achieve a proper matching of revenues with principal and interest payments on the Bonds within each Bond Year, and the Issuer expects that the Debt Service Account will qualify as a Bona Fide Debt Service Fund. Section 3.10 Reserve, Replacement and Pledged Funds. (a)No Reserve Fund. No reserve fund has been or will be established for the Bonds. (b)No Replacement or Pledged Funds. None of the Bond proceeds will be used as a substitute for other funds that were intended or earmarked to pay costs of the Financed Improvements, and that instead has been or will be used to acquire higher yielding Investments. Except for the Debt Service Account, there are no other funds pledged or committed in a manner that provides a reasonable assurance that such funds would be available for payment of the principal of or interest on the Bonds if the Issuer encounters financial difficulty. Section 3.11 Purpose Investment Yield. The proceeds of the Bonds will not be used to purchase an Investment for the purpose of carrying out the governmental purpose of the financing. Section 3.12 Issue Price and Bond Yield. (a)Issue Price. Based on the Purchaser's certifications in Exhibit C-1 and the MunicipalAdvisor's certifications in Exhibit C-2, the Issuer hereby elects to establish the issue prices of the Bonds pursuant to Regulations§ 1.148-l(f)(2)(iii) (relating to the so-called "competitive sales rule"). Therefore, the aggregate issue price of the Bonds for such purpose is $6,487,544.95, without accrued interest. (b)Bond Yiel.d. Based on the aggregate issue prices of the Bonds set forth in (a) hereof, theYield on the Bonds is 0.849749%, as computed by Bond Counsel and shown on Schedule 1 attached to this Certificate. The Issuer has not entered into an interest rate swap agreement with respect to any portion of the proceeds of the Bonds. Section 3.13 Miscellaneous Arbitrage Matters. (a)No Abusive Arbitrage Device. The Bonds are not and will not be part of a transaction orseries of transactions that has the effect of (1) enabling the Issuer to exploit the difference between taxexempt and taxable interest rates to gain a material financial advantage, and (2) overburdening the taxexempt bond market. 600596.20219\FfC V.3 11 (b)No Over-Issuance. The sale proceeds of the Bonds, together with expected Investmentearnings thereon and other money contributed by the Issuer, do not exceed the cost of the governmental purpose of the Bonds 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 Bond proceeds will be used in a manner that would cause any Bond to be an "arbitrage bond" within the meaning of Code § 148 and the Regulations. ARTICLE IV TAX COMPLIANCE POLICIES AND PROCEDURES Section 4.01 General. (a)Purpose of Article. The purpose of this Article is to supplement the Tax ComplianceProcedure and to set out specific policies and procedures governing compliance with the federal income tax requirements that apply after the Bonds are issued. The Issuer recognizes that interest on the Bonds will remain excludable from gross income only if the Post-Issuance Tax Requirements are followed after the Issue Date. The Issuer further acknowledges that written evidence substantiating compliance with the Post-Issuance Tax Requirements must be retained in order to permit the Bonds to be refinanced with taxexempt obligations and substantiate the position that interest on the Bonds is exempt from gross income in the event of an audit of the Bonds by the IRS. (b)Written Policies and Procedures of the Issuer. The Issuer intends for the TaxCompliance Procedure, as supplemented by this Tax Certificate, to be its primary written policies and procedures for monitoring compliance with the Post-Issuance Tax Requirements for the Bonds and to supplement any other formal policies and procedures related to the Post-Issuance Tax Requirements that the Issuer has established or establishes in the future. The provisions of this Tax Certificate are intended to be consistent with the Tax Compliance Procedure. In the event of any inconsistency between the Tax Compliance Procedure and this Tax Certificate, the terms of this Tax Certificate will govern. (c)Bond Compliance Officer. The Issuer, when necessary to fulfill the Post-Issuance TaxRequirements, will, through its Bond Compliance Officer, sign Form 8038-T in connection with the payment of arbitrage rebate or Yield reduction payments, participate in any federal income tax audit of the Bonds or related proceedings under a voluntary compliance agreement procedures (VCAP) or undertake a remedial action procedure pursuant to Regulations § 1.141-12. In each case, all costs and expenses incurred by the Issuer shall be treated as a reasonable cost of administering the Bonds and the Issuer shall be entitled to reimbursement and recovery of its costs to the same extent as provided in the Bond Resolution or State law. Section 4.02 Record Keeping; Use of Bond Proceeds and Use of Financed Improvements. (a)Record Keeping. The Bond Compliance Officer will maintain the Tax-Exempt Bond Filefor the Bonds in accordance with the Tax Compliance Procedure. Unless otherwise specifically instructed in writing from Bond Counsel or to the extent otherwise provided in this Tax Certificate, the Bond Compliance Officer shall retain records related to the Post-Issuance Tax Requirements until 3 years following the final maturity of (1) the Bonds or (2) any obligation issued to refund the Bonds. Any records maintained electronically must comply with Section 4.01 of Revenue Procedure 97-22, which generally provides that an electronic storage system must (A) ensure an accurate and complete transfer of 600596.20219\FTC V.3 12 the hardcopy records which indexes, stores, preserves, retrieves and reproduces the electronic records, (B) include reasonable controls to ensure integrity, accuracy and reliability of the electronic storage system and to prevent unauthorized alteration or deterioration of electronic records, (C) exhibit a high degree of legibility and readability both electronically and in hardcopy, (D) provide support for other books and records of the Issuer and (5) not be subject to any agreement that would limit the ability of the lRS to access and use the electronic storage system on the Issuer's premises. (b)Accounting and Allocation of Bond Proceeds to Expenditures. The Bond ComplianceOfficer will account for the investment and expenditure of Bond proceeds in the level of detail required by the Tax Compliance Procedure. A copy of the Final Written Allocation is attached as Exhibit D. (c)Annual Compliance Checklist. Attached as Exhibit Eis a sample Annual ComplianceChecklist for the Bonds. The Bond Compliance Officer will prepare and complete an Annual Compliance Checklist for the Financed Improvements at least annually in accordance with the Tax Compliance Procedure. In the event the Annual Compliance Checklist identifies a deficiency in compliance with the requirements of this Tax Certificate, the Bond Compliance Officer will take the actions identified in advice from Bond Counsel or the Tax Compliance Procedure to correct any deficiency. ( d)Advice from Bond Counsel. The Bond Compliance Officer is responsible for obtainingand delivering to the Issuer any advice received from Bond Counsel required under the provisions of this Tax Certificate or the Annual Compliance Checklist. Section 4.03 Restrictions on Investment Yield. Except as described below, Gross Proceeds must not be invested at a Yield greater than the Yield on the Bonds: (a)Redemption Fund. Proceeds of the Bonds deposited in the Redemption Fund andInvestment earnings on those proceeds may be invested without Yield restriction for a period of 90 days after the Issue Date. (b)Cost of Issuance Account. Bond proceeds deposited in the Cost of Issuance Account andInvestment earnings on those proceeds may be invested without Yield restriction for a period of 13 months after the Issue Date. (c)Debt Service Account. To the extent that the Debt Service Account qualifies as a BonaFide Debt Service Fund, money in such account may be invested without Yield restriction for 13 months after the date of deposit. Earnings on such amounts may be invested without Yield restriction for 1 year after the date of receipt of such earnings. (d)Minor Portion. In addition to the amounts described above, Gross Proceeds notexceeding the Minor Portion may be invested without Yield restriction. Section 4.04 Rebate and Yield Restriction Requirement. All Bond proceeds are expected to either be (1) allocated to pay the outstanding principal of and interest on the Refunded Bonds on the redemption date for the Refunded Bonds (October 1, 2021), or (2) used to pay costs of issuing the Bonds within 90 days of the Issue Date. Except for the Debt Service Account, which the Issuer expects will qualify as a Bona Fide Debt Service Fund in each Bond Year, the Issuer has not created or established, and does not expect to create or establish, any sinking fund or other similar fund (1) that is reasonably expected to be used to pay debt service on the Bonds, or (2) that may be used solely to prevent a default in the payment of the Bonds. If any Bond proceeds remain on deposit more than 90 days after the Issue Date, or if the Issuer establishes any other sinking fund or similar fund expected to be used to pay debt service on 600596.20219\FfC V.3 13 600596.20219\FTC V.3 EXHIBIT A IRS FORM 8038-G A-1 Form8038•G Information Return for Tax-Exempt Governmental Bonds ► Under Internal Revenue Code section 149(e)(Rev. September 2018) ► See separate instructions.OMS No. 1545-0720 Department of the Treasury Caution: If the issue price is under $100,000, use Form 8038-GC. Internal Revenue Service ► Go to www.irs.gov/F8038G for instructions and the latest information. ■!.I-:••--Reporting Authority If Amended Return, check here ► □ 1 Issuer's name 2 Issuer's employer identification number (EIN) City of Salina, Kansas 48-6017288 3a Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions) 3b Telephone number of other person shown on 3a Mitch Walter, Gilmore & Bell, P.C., Bond Counsel (316)267-2091 4 Number and street (or P.O. box if mail is not delivered to street address) I Room/suite 5 Report number (For IRS Use Only) One Main Place, 100 N. Main 800 I 3 I I 6 City, town, or post office, state, and ZIP code 7 Date of Issue Wichita, Kansas 67202 09/08/2021 8 Name of issue $6,220,000 City of Salina, Kansas, General Obligation Refunding Bonds, Series 2021-B, Dated 9 CUSIP number September 8, 2021 79744 FD9 10a Name and title of officer or other employee of the Issuer whom the IRS may call for more Information (see 10b Telephone number of officer or other Instructions) employee shown on 1 0a Debbie Pack, Director of Finance and Administration (785)309-5735 i.Type of Issue (enter the issue price). See the instructions and attach schedule. 11 Education. 12 Health and hospital 13 Transportation 14 Public safety . 15 Environment (including sewage bonds) 16 Housing 17 Utilities • • • ■ • o ■ 0 o ■ • 0 ■ o ■ ■ • 0 I • o I o 18 Other. Describe ► Various Public Improvements (streets, utilities, public safety, etc.) 19a If bonds are TANs or RANs, check only box 19a ►□ b If bonds are BANs, check only box 19b ►□ 20 If bonds are in the form of a lease or installment sale, check box ►□1:r., •• I■ Description of Bonds. Complete for the entire issue for which this form is being filed. (a) Final maturity date (bl Issue price (c) Staled redemption (d) Weighted price at maturity average maturity 21 10/01/2034 $6,487,544.95 $6,220,000 5.843 years ·�•1•• Uses of Proceeds of Bond Issue {including underwriters' discount) 22 23 24 25 26 27 28 2930 Proceeds used for accrued interest Issue price of entire issue (enter amount from line 21, column (b)) Proceeds used for bond issuance costs (including underwriters' discount) 24 Proceeds used for credit enhancement 25 Proceeds allocated to reasonably required reserve or replacement fund 26 Proceeds used to refund prior tax-exempt bonds, Complete Part V 27 Proceeds used to refund prior taxable bonds. Complete Part V 28 Total (add lines 24 through 28) . Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) 92,544 95 0 00 0 00 6,395,000 00 -- Description of Refunded Bonds. Complete this part only for refundinq bonds . 11 12 13 14 15 16 17 18 22 23 29 30 $6,487.544 95 (e) Yield 0.8497 $0 00 0 00 6,487,544 95 0 00 % 31 Enter the remaining weighted average maturity of the tax-exempt bonds to be refunded . 32 Enter the remaining weighted average maturity of the taxable bonds to be refunded . . 33 Enter the last date on which the refunded tax-exempt bonds will be called (MM/DD/YYYY) 34 Enter the date(s) the refunded bonds were issued ► (MM/DDMYYY) ► ► ► 6.0864 years For Papetwork Reduction Act Notice, see separate instructions. Cat. No. 63773S years 10/01/2021 07/15/2013; 07/30/2014 Form 8038-G (Rev. 9-2018) Form 8038-G (Rev. 9-2018) Page2 Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141 (b){5) 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract 35 0 00 (GIC). See instructions 1--3-'6;..;.a'-4--____ o�oo __ b Enter the final maturity date of the GIC ► {MM/DD/YYYY) _________ _ c Enter the name of the GIG provider► _________________ _ 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units . 37 o oo 38a If this issue is a loan made from the proceeds of another tax-exempt issue, check box ► D and enter the following information: b Enter the date of the master pool bond► (MM/DD/YYYY) _______________ _ c Enter the EIN of the issuer of the master pool bond► _________________ _ d Enter the name of the issuer of the master pool bond► _________________ _ 39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) {small issuer exception), check box 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . 41a If the issuer has identified a hedge, check here► 0 and enter the following information: b Name of hedge provider► c Type of hedge► __________________ _ d Term of hedge► ___________________ _42 If the issuer has superintegrated the hedge, check box ► ► ► 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this according to the requirements under the Code and Regulations (see instructions), check box issue are remediated ► 44 If the issuer has established written procedures to monitor the requirements of section 148, check box . 45a If some portion of the proceeds was used to reimburse expenditures, check here ► D and enter the amount of reimbursement . . ► ______________ _ b Enter the date the official intent was ado ted ► MM/DD/YY Signature and Consent Print/Type preparer's name Mitch Walter Date 09/08/2021 Check O if self-employed ► PTIN P02340422 Paid Preparer Use Only Firm's name ► Gilmore & Bell, P.C.Firm's EIN ► 43-1611738 Firm's address ► 2405 Grand Boulevard Phone no. 816-221-1000 Ill □ □ lt'.I lil Form 8038-G (Rev. 9-2018) status: EXHIBITB RECEIPT FOR PURCHASE PRICE $6,220,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B DATED SEPTEMBER 8, 2021 The undersigned Director of Finance of the City of Salina, Kansas, this day received from UMB Bank, N.A., Kansas City, Missouri, the original purchaser of the above-described bonds (the "Bonds"), the full purchase price of the Bonds, said purchase price and net amount received by the Issuer being calculated as follows: Principal Amount .................................. . $6,220,000.00 267,544.95 -24,827.37 Plus Original Issue Premium ................ . Less Underwriting Discount ................. . Total Purchase Price ................. . Less Good Faith Deposit... .................... . Net Amount Received ............... . DATED: September 8, 2021. 600596.20219\FTC V.3 B-1 $6,462,717.58 -130,000.00 $6,332,717.58 CITY OF SALINA, KANSAS By: Director of Finance EXHIBITC-1 RECEIPT AND REPRESENTATION $6,220,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B DATED SEPTEMBER 8, 2021 This Receipt and Representation (the "Certificate") is being delivered by UMB Bank, N.A., Kansas City, Missouri (the "Purchaser") in connection with the issuance of the above-described bonds (the "Bonds"), being issued on the date of this Receipt by the City of Salina, Kansas (the "Issuer"). Based on its records and information available to the undersigned which the undersigned believes to be correct, the Purchaser represents as follows: 1.Authorized Representative. The undersigned is the duly authorized representative of the Purchaser. 2.Receipt for Bonds. The Purchaser acknowledges receipt by the Depository TrustCompany on behalf of the Purchaser on the Issue Date of the Bonds consisting of fully registered "bookentry-only" bonds in Authorized Denominations in a form acceptable to the Purchaser. 3.Issue Price. (a)Public Offering. The Purchaser offered all of the Bonds to the Public in a bona fideinitial offering. (b)Expected Initial Offering Prices. As of the sale date of the Bonds (August 16, 2021), thereasonably expected initial offering prices of the Bonds to the Public by the Purchaser are the prices listed in Schedule 1 attached to this Certificate (the "Expected Offering Prices"). The Expected Offering Prices are the prices for the Maturities used by the Purchaser in formulating its bid to purchase the Bonds. ( c)Defined Terms. (i)The term "Maturity" means Bonds with the same credit and payment terms.Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. (ii)The term "Public" means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" is defined in U.S. Treasury Regulation § 1.150-l(b) which generally provides that the term related party means any two or more persons who have a greater than 50 percent common ownership, directly or indirectly. (iii)The term "Underwriter" means (A) any person that agrees pursuant to a writtencontract with the Issuer ( or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or 600596.20219\FTC V.3 C-1-1 a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). 4. Reliance. The representations set forth in this Certificate are limited to factual mattersonly. Nothing in this Certificate represents the Purchaser's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the certifications contained herein will be relied upon by the Issuer in executing and delivering its Federal Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Gilmore & Bell, P.C., Bond Counsel, in rendering its opinion relating to the exclusion from federal gross income of the interest on the Bonds and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20219\FTC V.3 C-1-2 Dated: September. 8, 2021. UMB BANK, N.A. KANSAS CITY, MISSOURI ��R By: -----------Title: __ K_r_is_ti_n_K_o_zi_o_l ____ _ 600596.20219\ITC V.3 (Signature Page to Purchaser's Receipt) SCHEDULE I EXPECTED OFFERING PRICES SERIAL BONDS Stated Annual Initial Stated Annual Initial Maturity Principal Rate of Offering Maturity Principal Rate of Offering October 1 Amount Interest Price October 1 Amount Interest Price 2022 $600,000 2.000% 101.933% 2029 $420,000 1.000% 100.682% 2023 610,000 2.000% 103.705% 2030 265,000 1.000% 100.000% 2024 630,000 2.000% 105.180% 2031 275,000 1.150% 100.000% 2025 645,000 2.000% 106.443% 2032 280,000 1.250% 100.000% 2026 650,000 2.000% 107.491% 2033 290,000 1.350% 100.000% 2027 655,000 2.000% 108.014% 2034 230,000 1.400% 100.000% 2028 670,000 2.000% 108.225% 600596.20219\FfC V.3 S-1-A EXHIBITC-2 CERTIFICATE OF MUNICIPAL ADVISOR $6,220,000CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B DATED SEPTEMBER 8, 2021 The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated, Kansas City, Missouri (the "Municipal Advisor"), as municipal advisor to the City of Salina, Kansas (the "Issuer") in connection with the issuance of the above-described bonds (the "Bonds"), has assisted the Issuer in soliciting and receiving bids from potential underwriters in connection with the sale of the Bonds in a competitive bidding process in which bids were requested for the purchase of the Bonds at specified written terms, and hereby certifies as set forth below with respect to the bidding process and award of the Bonds: 1.The Bonds were offered for sale at specified written terms more particularly described inthe Notice of Bond Sale, which was distributed to potential bidders, a copy of which is attached to this Certificate as Attachment 1. 2.The Notice of Bond Sale was disseminated electronically, information regarding the saleof the Bonds was provided to PARITY®. The method of distribution of the Notice of Bond Sale is 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 equalopportunity to bid to purchase the Bonds, and the bidding process did not afford any opportunity for bidders to review other bids before providing a bid (that is, no "last-look"). 4.The Issuer received bids from at least three bidders who represented that each has anestablished industry reputation for underwriting new issuances of municipal bonds. Based upon the Municipal Advisor's knowledge and experience in acting as the municipal advisor for other municipal issues, the Municipal Advisor believes those representations to be accurate. Copies of the bids received are attached to this Certificate as Attachment 2.5.The winning bidder was UMB Bank, N.A., Kansas City, Missouri (the "Purchaser"),whose bid was determined to be the best conforming bid in accordance with the terms set forth in the Notice of Bond Sale, as shown in the bid comparison attached to this Certificate as Attachment 3. The Issuer awarded the Bonds to the 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 its Federal Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Gilmore & Bell, P.C., Bond Counsel, in rendering its opinion relating to the exclusion from federal gross income of the interest on the Bonds and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. Dated: September 8, 2021 600596.20219\FfC V.3 C-2-1 600596.20219\FfC V.3 ATTACHMENT 1 NOTICE OF BOND SALE C-1-3 * Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principalamount of the Bonds or the schedule of principal payments described above, depending on the purchase price and interest rates bid, the required size of the refunding account created for the bonds to be refunded (the "Refunded Bonds"), and the offering prices specified by the Successful Bidder. The Successful Bidder may not withdraw its bid or change the 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 facsimile transmission, subsequently confirmed in writing, no later than 2:00 p.m. applicable Central Time, on the Sale Date. The actual purchase price for the Bonds shall be calculated by applying the percentage of par value bid by the Successful Bidder against the final aggregate principal amount of the Bonds, as adjusted, plus accrued interest from the Dated Date to the Closing Date (as hereinafter defined). Place of Payment. The principal of and interest on the Bonds will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The principal of each Bond will be payable at maturity 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 orat such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in thecase of an interest payment to Cede & Co. or any Owner of$500,000 or more in aggregate principal amountof Bonds, by wire transfer to such Registered Owner upon written notice given to the Paying Agent by suchRegistered Owner, not less than 15 days prior to the Record Date for such interest, containing the wiretransfer 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 Owners. Book-Entry-Only System. The Depository Trust Company, New York, New York ("OTC"), will act as securities depository for the Bonds. The Bonds will initially be issued exclusively in "book entry" form and shall be initially registered in the name of Cede & Co., as the nominee of OTC and no beneficial owner will receive certificates representing their interests in the Bonds. During the term of the Bonds, 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 Bonds to OTC or its nominee as the Registered Owner of the Bonds, 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 Bonds to its participants who shall be responsible for transmitting payments to beneficial owners of the Bonds in accordance with agreements between such participants and the beneficial owners. The Issuer will not be responsible for maintaining, supervising or reviewing the records maintained by OTC, its participants or persons acting through such participants. In the event that: ( a) OTC determines not to continue to act as securities depository for the Bonds, or (b) the Issuer determinesthat continuation of the book-entry-only form of evidence and transfer of ownership of the Bonds wouldadversely affect the interests of the beneficial owners of the Bonds, the Issuer will discontinue the bookentry-only form of registration with DTC. If the Issuer fails to identify another qualified securitiesdepository to replace OTC, the Issuer will cause to be authenticated and delivered to the beneficial owners600596.20219\SALEDOCS v.2 2 Redemption of Bonds Prior to Maturity. Authority, Purpose and Security. Submission of Bids. 3 Sale conflict with those of PARITY®, this Notice of Bond Sale shall control. Email bids may be submitted to arteberryd@stifel.com. Bids must be received prior to the Submittal Hour on the Sale Date accompanied by the Deposit (as hereinafter defined), which may be submitted separately. The Issuer and Municipal Advisor shall not be responsible for failure, misdirection, or error in the means of transmission by any bidder. 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. Conditions of Bids. 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) no interest rate may exceed a rate equal to the daily yield for the 10-year Treasury Bond published by THE BOND BUYER, in New York, New York, on the Monday next preceding the day on which the Bonds are sold, plus 3%; (b) no supplemental interest payments will be considered; (c) each interest rate specified shall be a multiple of 1/8 or 1/20 of 1 %; and (d) no zero percent (0%) coupon rates will be permitted. No bid for less than 100% 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 described under the caption "Establishment of Issue Price" in this Notice. Good Faith Deposit. A good faith deposit (the "Deposit") in the amount of $130,000 payable to the order of the Issuer is required in order to secure the Issuer from any loss resulting from the failure of the bidder to comply with the terms of its bid. The Deposit may be submitted at the addresses hereinafter set forth in either of the following forms: (a)Certified or Cashier's Check. Certified or cashier's check drawn on a bank located in theUnited States of America received by the Issuer or the Municipal Advisor prior to the Submittal Hour; or (b)Wire Transfer. Wire transfer submitted by the Successful Bidder in Federal Reserve funds,immediately available for use by the Issuer not later than 3:00 p.m. applicable Central Time on the Sale Date (wire transfer information may be obtained from the Issuer or the Municipal Advisor at the addresses set forth below). Contemporaneously with the submission of a wire transfer Deposit, such bidder shall send an email to the Issuer at the email address set forth below, including the following information: (a) notification that a wire transfer has been made; (b) the amount of the wire transfer; and ( c) return wire transfer instructions in the event such bid is unsuccessful. Checks submitted for Deposits by unsuccessful bidders will be returned; wire transfer Deposits submitted by unsuccessful bidders will not be accepted or shall be returned in the same manner received on the Sale Date. The Issuer reserves the right to withhold reasonable charges for any fees or expenses incurred in returning a wire transfer Deposit. No interest on the Deposit will be paid by the Issuer. If a bid is accepted, the Deposit, or the proceeds thereof, will be held by the Issuer until the Successful Bidder has 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 or deducted from the purchase price at the option of the Issuer. If a bid is accepted but the Issuer fails to deliver the Bonds to the Successful Bidder in accordance with the terms and conditions of this Notice, said Deposit, or the proceeds thereof, will be returned to the Successful Bidder. If a bid is accepted but the bidder defaults in the performance of any of the terms and conditions of this Notice, the proceeds of such Deposit will be retained by the Issuer as and for liquidated damages. 600596.20219\SALEDOCS v.2 4 policy insuring the payment when due of the principal of and interest on the Bonds will be issued by such bond insurer. All costs associated with the purchase and issuance of such municipal bond insurance policy and associated ratings and expenses ( other than any independent rating requested by the Issuer) shall be paid by the Successful Bidder. Failure of the municipal bond insurer to issue the policy after the award of the Bonds shall not constitute cause for failure or refusal by the Successful Bidder to accept delivery of the Bonds. CUSIP Numbers. CUSIP identification numbers will be assigned and printed on the Bonds, but neither the failure to print such number on any Bond nor any error with respect thereto shall constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the Bonds in accordance with the terms of this Notice. The Municipal Advisor will apply for CUSIP numbers pursuant to Rule G-34 implemented by the Municipal Securities Rulemaking Board. All expenses in relation to the assignment and printing of CUSIP numbers on the Bonds will be paid by the Issuer. Delivery and Payment. The Issuer will pay for preparation of the Bonds and will deliver the Bonds properly prepared, executed and registered without cost on or about SEPTEMBER 8, 2021 (the "Closing Date"), to DTC for the account of the Successful Bidder. The Successful Bidder will be furnished with a certified transcript of the proceedings evidencing the authorization and issuance of the Bonds and the usual closing documents, including a certificate that there is no litigation pending or threatened at the time of delivery of the Bonds affecting their validity and a certificate regarding the completeness and accuracy of the Official Statement. Payment for the Bonds shall be made in federal reserve funds, immediately available for use by the Issuer. The Issuer will deliver one Bond of each maturity registered in the nominee name of DTC. Establishment of Issue Price. (a)In order to provide the Issuer with information necessary for compliance with Section 148of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (collectively, the "Code"), the Successful Bidder will be required to assist the Issuer in establishing the "issue price" of the Bonds and complete, execute and deliver to the Issuer prior to the Closing Date, a written certification in a form acceptable to the Successful Bidder, the Issuer and Bond Counsel (the "Issue Price Certificate") containing the following for each maturity of the Bonds: (1) the interest rate; (2) the reasonably expected initial offering price to the "public" (as said term is used in Treasury Regulation Section 1.148-l(f) (the "Regulation")) or the sale price; and (3) pricing wires or equivalent communications supporting such offering or sale price. However, such Issue Price Certificate may indicate that the Successful Bidder has purchased the Bonds for its own account in a capacity other than as an underwriter or wholesaler, and currently has no intent to reoffer the Bonds for sale to the public. Any action to be taken or documentation to be received by the Issuer pursuant hereto may be taken or received by the Municipal Advisor or Bond Counsel on behalf of the Issuer. (b)The Issuer intends that the sale of the Bonds pursuant to this Notice shall constitute a"competitive sale" as defined in the Regulation. In support thereof: (1) the Issuer shall cause this Notice to be disseminated to potential bidders in a manner reasonably designed to reach potential bidders; (2) all bidders shall have an equal opportunity to submit a bid; (3) the Issuer reasonably expects that it will receive bids from at least three bidders that have established industry reputations for underwriting municipal bonds such as the Bonds; and (4) the Issuer anticipates awarding the sale of the Bonds to the bidder that provides a bid with the lowest TIC in accordance with the section hereof entitled "Basis of Award." ( c)Any bid submitted pursuant to this Notice shall be considered a firm offer for the purchaseof the Bonds as specified therein. The Successful Bidder shall constitute an "underwriter" as said term is defined in the Regulation. By submitting its bid, the Successful Bidder confirms that it shall require any 600596.20219\SALEDOCS v.2 6 agreement among underwriters, a selling group agreement or other agreement to which it is a party relating to the initial sale of the Bonds, to include provisions requiring compliance with provisions of the Code and the Regulation regarding the initial sale of the Bonds. ( d)If all of the requirements of a "competitive sale" are not satisfied, the Issuer shall advisethe Successful Bidder of such fact at the time of award of the sale of the Bonds to the Successful Bidder and the following provisions shall apply to the Bonds. In such event, any bid submitted will not be subject to cancellation or withdrawal. Within twenty-four (24) hours of the notice of award of the sale of the Bonds, the Successful Bidder shall advise the Issuer ifa "substantial amount" (as defined in the Regulation (10%)) of any maturity of the Bonds has been sold to the public and the price at which such substantial amount was sold. The Issuer will treat such sale price as the "issue price" for such maturity, applied on a maturity-by-maturity basis. The Issuer will not require the Successful Bidder to comply with that portion of the Regulation commonly described as the "hold-the-offering-price" requirement for the remaining maturities, but the Successful Bidder may elect such option. If the Successful Bidder exercises such option, the Issuer will apply the initial offering price to the public provided in the bid as the issue price for such maturities. If the Successful Bidder does not exercise that option, it shall thereafter promptly provide the Issuer the prices at which a substantial amount of such maturities are sold to the public. Any change in the issue price of any of the Bonds after the Submittal Hour will not affect the purchase price for the Bonds submitted in the bid of the Successful Bidder. ( e)This agreement by the Successful Bidder to provide such information will continue to applyafter the Closing Time if: (a) the Issuer requests the information in connection with an audit or inquiry by the Internal Revenue Service (the "IRS") or the Securities and Exchange Commission (the "SEC") or (b) the information is required to be retained by the Issuer pursuant to future regulation or similar guidance from the IRS, the SEC or other federal or state regulatory authority. Preliminary Official Statement and Official Statement. The Issuer has prepared a Preliminary Official Statement relating to the Bonds "deemed final" by the Issuer except for the omission of certain information as provided in the Rule, copies of which may be obtained from the Municipal Advisor. Upon the sale of the Bonds, the Issuer will adopt the final Official Statement and will furnish the Successful Bidder, without cost, within seven business days of the acceptance of the Successful Bidder's proposal, with a sufficient number of copies thereof, which may be in electronic format, in order for the Successful Bidder to comply with the requirements of the Rule and Rule G-32. Additional copies may be ordered by the Successful Bidder at its expense. Continuing Disclosure. In the Bond Resolution, the Issuer has covenanted to provide annually certain financial information and operating data and other information necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. This covenant is for the benefit of and is enforceable by any Registered Owner of the Bonds. For further information, reference is made to the caption "CONTINUING DISCLOSURE" in the Preliminary Official Statement. Assessed Valuation and Indebtedness. The total assessed valuation of the taxable tangible property within the Issuer and the outstanding general obligation indebtedness of the Issuer may be found in the Preliminary Official Statement relating to the Bonds. Legal Opinion. The Bonds will be sold subject to the approving legal opinion of GILMORE & BELL, P.C., KANSAS CITY, MISSOURI, Bond Counsel to the Issuer, which opinion will be furnished and paid for by the Issuer, will be printed on the Bonds, if the Bonds are printed, and will be delivered to the Successful Bidder when the Bonds are delivered. Said opinion will also include the opinion of Bond Counsel �elating to the interest on the Bonds being excludable from gross income for federal income tax 600596.20219\SALEDOCS v.2 7 600596.20219\FTC V.3 ATTACHMENT 2 BIDS RECEIVED C-1-4 UMB Bank N.A. -Kansas City ' MO'S Bid Salina $6,500,000 General Obligation Refunding Bonds, Series 2021-B PARITY Bid Form Page 1 of2 . Upqqming Calendar I Overview I Res.ult· 1 Excel I Robert W. Baird & Co., Inc. -Milwaukee , Wl's Bid .:���IRf'T\f" Salina $6,500,000 General Obligation Refunding Bonds, Series 2021-B For the aggregate principal amount of $6,500,000.00, we will pay you $7,129,833.30, plus accrued interest from the date of issue to the date of deliverv. The Bonds are to bear Interest at the followin<l rate(s : Maturity Date Amount$ Coupon% 10/01/2022 665M 4.0000 10/01/2023 670M 4.0000 10/01/2024 680M 4.0000 10/01/2025 680M 4.0000 10/01/2026 675M 4.0000 10/01/2027 675M 4.0000 10/01/2028 680M 4.0000 10/01/2029 420M 1.0000 10/01/2030 275M 1.0500 10/01/2031 275M 1.2000 10/01/2032 280M 1.3000 10/01/2033 290M 1.4000 10/01/2034 235M 1.5000 Total Interest Cost: Premium: Net Interest Cost: TIC: Total Insurance Premium: Yield% 0.1500 0.2000 0.2500 0.3500 0.5000 0.6000 0.7000 0.9000 1.0500 1.2000 1.3000 1.4000 1.5000 Dollar Price Bond Insurance 104.091 107.822 111.438 114.715 117.479 120.216 122.704 100.682 100.000 100.000 100,000 100.000 100.000 $998,628.30 $629,833.30 $368,795.00 0.933411 Time Last Bid Received On:08/16/2021 11 :53:06 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Robert W. Baird & Co., Inc., Milwaukee, WIContact: Geoff Kuczmarski Title: Telephone:414-765-7331 Fax: Issuer Name: City of Salina Accepted By: Company Name: Accepted By: file:// /G:/kc-pfin/RD/Clients/Kansas/Salina _ Master/Salina%202021-B%20( 55388)/R WB _... 8/�3/2021 PARITY Bid Form Page 1 of2 · .. • Upcoming Calendar · I Overview I Re$ult I Excel I Country Club Bank -Leawood ' KS's Bid -���ilRIJry:··Salina $6,500,000 General Obligation Refunding Bonds, Series 2021-B For the aggregate principal amount of$6,500,000.00, we will pay you $6,814,965.15, plus accrued interest from the date of issue to th d t f d I' Th B d t b . t t t th i II I t { ) e aeo e 1very. e on s are o ear m eres a e o ow ng ra e s : Maturity Date Amount$ Coupon% Yield% Dollar Price Bond Insurance 10/01/2022 665M 3.0000 0.1500 103,028 10/01/2023 670M 3.0000 0.2000 105.764 10/01/2024 680M 3.0000 0,3000 108.228 10/01/2025 680M 3.0000 0.4000 110.470 10/01/2026 675M 2.0000 0.5000 107.491 10/01/2027 675M 2.0000 0.6500 108.014 10/01/2028 680M 2.0000 0.8000 108.225 10/01/2029 420M 1.0000 1.0000 100.000 10/01/2030 275M 1.1000 1.1000 100.000 10/01/2031 275M 1.2000 1.2000 100.000 10/01/2032 280M 1.3000 1.3000 100.000 10/01/2033 290M 1.4000 1.4000 100.000 10/01/2034 235M 1.5000 1.5000 100,000 Total Interest Cost: $684,208.89 Premium: $314,965.15 Net Interest Cost: $369,243.74 TIC: ��7n1 Total Insurance Premium: $0.00 Time Last Bid Received On:08/16/2021 11 :54:23 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: Country Club Bank, Leawood , KS Contact: Lisa Roberts Title: Sr VP Telephone:816-751-1420 Fax: 913-385-0105 Issuer Name: City of Salina Accepted By: Company Name: Accepted By: file:// /G :/kc-pfin/RD/Clients/Kansas/Salina _ Master/Salina%20202 l-B%20(5 5 388)/CCB _ f... 8/23/2021 Piper Sandler & Co -Minneapolis , MN's Bid Salina $6,500,000 General Obligation Refunding Bonds, Series 2021-B PARITY Bid Form Page 1 of 2 •Upcoming Calendar I Overview I Result I ExceJ I The Baker Group - Oklahoma City , OK's Bid .=���IRl'Tlf-Salina $6,500,000 General Obligation Refunding Bonds, Series 2021-B For the aggregate principal amount of $6,500,000.00, we will pay you $7,150,286.65, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear Interest at the following rate(s : Maturity Date Amount$ Coupon% 10/01/2022 665M 4.2500 10/01/2023 670M 4.2500 10/01/2024 680M 4.2500 10/01/2025 680M 4.2500 10/01/2026 675M 4.2500 10/01/2027 675M 4.2500 10/01/2028 680M 4.2500 10/01/2029 420M 1.0000 10/01/2030 275M 1.0000 10/01/2031 275M 1.2500 10/01/2032 280M 1.2500 10/01/2033 290M 1.5000 10/01/2034 235M 1.5000 Total Interest Cost: Premium: Net Interest Cost: TIC: Total Insurance Premium: Yield% 0.1500 0.2000 0.2500 0.4000 0.5500 0.7000 0.8500 1.0000 1.1000 1.2000 1.2500 1.4000 1.4500 Dollar Price Bond Insurance 104.356 108.337 112.200 115.503 118.452 121.039 123.261 100.000 99.139 100.337 100.000 100.670 100.334 $1,048,845.07 $650,286.65 $398,558.42 1.008000 Time Last Bid Received On:08/16/2021 11 :59:52 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: The Baker Group, Oklahoma City , OK Contact: Scott Fletcher Title: Telephone:405-415-7332 Fax: Issuer Name: City of Salina Accepted By: Company Name: Accepted By: file:///G:/kc-pfin/RD/Clients/Kansas/Salina_Master/Salina%202021-B%20(55388)/Baker... 8/23/2021 PARITY Bid Form Page 1 of2 I , · Upcoming Cale_ndar I Overview I Res1,dt I Excel I Commerce Bank -Kansas City , MO's Bid .:�P,�IRIT1f ·Salina $6,500,000 General Obligation Refunding Bonds, Series 2021-B For the aggregate principal amount of $6,500,000.00, we wi!I pay you $6,839,418.50, plus accrued interest from the date of issue to h d f d I' Th d b t h i 11 t e ate o e 1verv. e Bon s are to ear interes at t e o owing rate(s): Maturity Date Amount$ Coupon% 10/01/2022 665M 2.0000 10/01/2023 670M 2.0000 10/01/2024 680M 2.0000 10101/2025 680M 2.0000 10/01/2026 675M 2.0000 10/01/2027 675M 2.0000 10/01/2028 680M 2.0000 10/01/2029 420M 2.0000 10/01/2030 275M 2.0000 10/01/2031 275M 2.0000 10/01/2032 280M 2.0000 10/01/2033 290M 2.0000 10/01/2034 235M 2.0000 Total Interest Cost: Premium: Net Interest Cost: TIC: Total Insurance Premium: Yield% 0.1400 0.1700 0.2300 0.3600 0.5000 0.6700 0.8200 0.9400 1.0500 1.1500 1.2000 1.2600 1.3100 Dollar Price Bond Insurance 101.976 103.768 105.400 106.610 107.491 107,890 108.082 107.227 106.451 105.750 105.402 104.986 104.640 $751,305.56 $339,418.50 $411,887.06 1.056625 Time Last Bid Received On:08/16/2021 9:46:56 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 Tetephone:816-234-2450 Fax: Issuer Name: City of Salina Accepted By: Company Name: Accepted By: file:///G:/kc-pfin/RD/Clients/Kansas/Salina _ Master/Salina%20202 l -B%20( 55388)/CB _ fil... 8/23/2021 Raymond James & Associates, Inc. -Dallas , TX's Bid Salina $6,500,000 General Obligation Refunding Bonds, Series 2021-B will Title: By: PARITY Bid Form Page 1 of2 ··• . Upcoming .Calendar I Overview. I Result I Excel I FHN Financial Capital Markets -Memphis ' TN's Bid .=��RB'rY.··· Salina $6,500,000 General Obligation Refunding Bonds, Series 2021-B For the aggregate principal amount of $6,500,000.00, we will pay you $6,977,004.15, plus accrued interest from the date of issue to the date of delivery, The Bonds are to bear interest at the following rate(s>: Maturity Date Amount$ Coupon% Yield% Dollar Price Bond Insurance 10/01/2022 665M 3.0000 0.2500 102.919 10/01/2023 670M 3.0000 0.3000 105.551 10/01/2024 680M 3.0000 0.4000 107.909 10/01/2025 680M 3.0000 0.4500 110.257 10/01/2026 675M 3.0000 0.5500 112.218 10/01/2027 675M 3.0000 0.6500 113.950 10/01/2028 680M 3.0000 0.8500 114.709 10/01/2029 420M 1.5000 1.0000 103.401 10/01/2030 275M 1.5000 1.0500 103.055 10/01/2031 275M 2.0000 1.1500 105.750 10/01/2032 280M 2.0000 1.2500 105.055 10/01/2033 290M 2.0000 1.3500 104.364 10/01/2034 235M 2.0000 1.5000 103.338 Total Interest Cost: $914,427.29 Premium: $477,004.15 Net Interest Cost: $437,423.14 TIC: 1.113352 Total Insurance Premium: $0.00 Time Last Bid Received On:08/16/2021 11 :45:13 COST This proposal Is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: FHN Financial Capital Markets, Memphis , TN Contact: HANK TANSEY Title: UNDERWRITER Telephone:901-435-8006 Fax: Issuer Name: C.ity of Salina Accepted By: Company Name: Accepted By: file:/ //G:/kc-pfin/RD/Clients/Kansas/Salina _ Master/Salina%202021-B%20( 55388)/FHN_ f .. , 8/23/2021 600596.20219\FTC V.3 ATTACHMENT 3 BID COMPARISON C-1-5 8/23/2021 PARITY Result Screen Wire Inbox Parity Calendar i 1 :00:28 p.m. CDST [ Upcoming Calendar7 Overview JCom;; I Summary I Bid Results Salina $6,500,000 General Obligation Refunding Bonds, Series 2021-B The following bids were submitted using PARl"f'IID and displayed ranked by lowest TIC. Click on the name of each bidder to see the respective bids. Bid Award* Bidder Name TIC D UMB Bank N.A. 0.911403 D Robert W Baird & Co., Inc. 0.933411 D Count[)'. Club Bank 0.957781 D PiRer Sandler & Co 0.979884 D The Baker GrouR, 1.008000 D Commerce Bank 1.056625 D Raymond James & Associates, Inc. 1.082674 D FHN Financial CaRital Markets 1.113352 *Awarding the Bonds to a specific bidder will provide you with the Reoffering Prices and Yields. © 1981-2002 i-Deal LLC, All rights reserved, Trademark§ https://www.newissuehome.i-deal.com/Parity/asp/main.asp?page=parityResult&customer=TM3&issue_key_no=314390&sec_type=BD 1/1 EXHIBITD DESCRIPTION OF PROPERTY COMPRISING THE FINANCED IMPROVEMENTS $6,220,000 600596.20219\FTC V.3 CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B DATED SEPTEMBER 8, 2021 D-1 1 2013-B Project Estimated Elapsed Estimated Economic Original Placed in Time Remaining Lifex Economic Service from Economic Financed Asset Description Life Date Issue Date Life Cost Cost Land Acquisition 30 Magnolia Hills 30 7/1/2013 -8.19 21.81 262,704 5,729,574 Fire Station 30 12/1/2013 -7.77 22.23 825,000 18,339,750 East Magnolia Road 20 7/1/2013 -8.19 11.81 2,127,296 25,123,366 Bicentennial Center 30 12/1/2013 -7.77 22.23 1,010,000 22,452,300 North Ohio Grade Separation 20 12/1/2007 -13.77 6.23 105,000 654,150 4,330,000 72,299,140 Less land costs Net costs, excluding land 4,330,000 Original Average, Reasonably Expected Economic Life: 16.70 years 120% of Original Economic Life 120% 20.04 years Issue Date of2013-B Bonds 9/8/2021 Issue Date of2010-B Bonds 7/15/2013 Less Years elapsed 8.15 Remaining permitted weighted average bond maturity 28.19 years 2001-A Bond Proceeds Allocated to Project Costs 4,330,000 100.00% Other Money Allocated to Project Costs 0.00% Total Proiect Costs 4,330,000 100.00% Salina, KS GOIRBs 2020-B D-2 Nov. 19, 2020 2 2014-A Project Original Economic Asset Description Life Subdivision Improvements, Airport Industrial Center 30 Subdivision Imp., Eastview Estates Add., Phase III 30 Municipal Court Expansion 30 Less land costs Net costs, excluding land Original Average, Reasonably Expected Economic Life: 120% of Original Economic Life Issue Date of 2002-B Bonds Issue Date of 2010-B Bonds Less Years elapsed Remaining permitted weighted average bond maturity 2002-B Bond Proceeds Allocated to Project Costs Other Money Allocated to Project Costs Total Pro.iect Costs 5 2010-B Bonds Estimated Placed in Service Date 7/25/2002 7/25/2002 7/25/2002 120% 7/25/2002 10/29/2010 Elapsed Estimated Time Remaining from Economic Issue Date Life 0.00 30.00 0.00 30.00 0.00 30.00 30.00 years 36.00 years {8.26) 27.74 years Cost 720,292 255,682 1,004,026 1,980,000 1,980,000 1,980,000 1,980,000 Determination of Average, Reasonably Expected Economic Life of Financed Property Use of Series Series 120% of 2010B 2010B Average Proceeds Proceeds Life (yrs) x Life 1 Refund KDHE Loan 2153 1,800,000 #REF! #REF! 2 Refund KDHE Loan 2259 3,696,953 #REF! #REF! 3 Refund Series 2001-A 1,000,000 28.19 28,186,713 4 Refund Series 2002-B 1,200,000 27.74 33,288,000 Total Net Uses: 7,696,953 #REF! 120% of Expected Economic Life of Financed Property: #REF! years Issue Date of 2010-B Bonds 10/29/2010 Issue Date of 2021-B Bonds 11/19/2020 Less Years elapsed (10.06) Remaining permitted weighted average bond maturity #REF! years Salina, KS GOIRBs 2020-B D-3 Economic Lifex Financed Cost 21,608,760 7,670,460 30,120,780 59,400,000 100.00% 0.00% 100.00% Nov. 19, 2020 6 Series 2011-1 Temporary Notes Project Original Economic Asset Description Life Magnolia Commons-Street/Water/Sewer 30 Less land costs Net costs, excluding land Original Average, Reasonably Expected Economic Life: 120% of Original Economic Life Issue Date of Series 2011-1 Temporary Notes Issue Date of 2021-B Bonds Less Years elapsed Remaining permitted weighted average bond maturity Estimated Placed in Service Date 7/28/2011 120% 7/28/2011 11/19/2020 2011-1 Temporary Note Proceeds Allocated to Project Costs Other Money Allocated to Project Costs Total Project Costs 7 Series 2012A Bonds Elapsed Estimated Time Remaining from Economic Issue Date Life 0.00 30.00 30.00 years 36.00 years (9.31) 26.69 years Cost 3,387,601 3,387,601 3,387,601 3,387,601 3,387 601 Determination of Average, Reasonably Expected Economic Life of Financed Property Use of Series Series 120% of 2012AB 2012AB Average Proceeds Proceeds Life (yrs) x Life 6 Refund 2011-1 Temporary Notes 3,414,204 26.69 91,125,117 Total Net Uses: 3,414,204 91,125,117 120% of Expected Economic Life of Financed Property: 26.69 years Salina, KS GOIRBs 2020-B D-4 Economic Life x Financed Cost 101,628,030 101,628,030 100.00% 0.00% 100.00% Nov. 19, 2020 8 KDHE Loan 2841 Project Estimated Elapsed Estimated Economic Original Placed in Time Remaining Lifex Economic Service from Economic Financed Asset Description Life Date Issue Date Life Cost Cost Replace Distribution Piping (Phase 6 & 7) 30 1/9/2014 0.00 30.00 4,250,000 127,500,000 4,250,000 127,500,000 Less land costs Net costs, excluding land 4,250,000 Original Average, Reasonably Expected Economic Life: 30.00 years 120% of Original Economic Life 120% 36.00 years Issue Date of KDHE Loan 2841 1/9/2014 Issue Date of 2021-B Bonds 11/19/2020 Less Years elapsed C6.86l Remaining permitted weighted average bond maturity 29.14 years KDHE Loan 2841 Proceeds Allocated to Project Costs 4,250,000 100.00% Other Money Allocated to Project Costs 0.00% Total Project Costs 4,250,000 100.00% 9 2021-B Project Estimated Elapsed Estimated Economic Original Placed in Time Remaining Lifex Economic Service from Economic Financed Asset Description Life Date Issue Date Life Cost Cost Fire Equipment -Quint 25 11/1/2021 0.95 25.95 845,650 21,944,610 Fire Equipment -Self-Contained Breathing Apparatus 15 6/1/2020 -0.47 14.53 472,954 6,872,018 Emergency Communications Equipment 15 1/1/2021 0.12 15.12 2,500,000 37,800,000 3,818,603 66,616,628 Less land costs Net costs, excluding land 3,818,603 Original Average, Reasonably Expected Economic Life: 17.45 years 120% of Original Economic Life 120% 20.93 2020B Bond Proceeds Allocated to Project Costs 3,420,454 89.57% Other Money Allocated to Project Costs 398,149 10.43% Total Project Costs 3,818,603 100.00% Salina, KS GO1RBs 2020-B D-5 Nov. 19, 2020 10 Series 2020-B Bonds Determination of Average, Reasonably Expected Economic Life of Financed Property Use of Series Series 120% of 2021-B 2021-B Average Proceeds Proceeds Life (yrs) xLife 8 Refund KDHE Loan 2841 3,552,313 29.14 103,514,410 5 Refund Series 2010-B 747,814 #REF! #REF! 7 Refund Series 2012-A 1,188,381 26.69 31,717,898 9 Series 2021-B 3,420,454 20.93 71,604,966 Total Net Uses: 8,908,963 #REF! 120% of Expected Economic Life of Financed Property: #REF! years Salina, KS GOIRBs 2020-B D-6 Nov. 19, 2020 EXHIBITE FORM OF ANNUAL COMPLIANCE CHECKLIST $6,220,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2021-B DATED SEPTEMBER 8, 2021 The Bond Compliance Officer is the person that the Issuer has identified in the Tax Compliance Procedure who is primarily responsible for working with other Issuer officials, departments and administrators and for consulting with Bond Counsel, other legal counsel and outside experts to the extent necessary to carry out the Post-Issuance Tax Requirements for the Bonds. On the Issue Date, the Issuer identified certain assets financed in whole or in part by the Bonds (the "Financed Improvements"), as evidenced on Exhibit D to the Federal Tax Certificate. Please complete thischecklist within 90 days after the conclusion of the Issuer's Fiscal Year. Should you have questions or need assistance in completing the checklist, please contact Bond Counsel at the address below. A completed copy of this annual checklist should be placed in the Tax-Exempt Bond File and retained in the Issuer's permanent records for at least 3 years after the final maturity of (1) the Bonds or (2) any obligation issued to refund the Bonds. Bond Compliance Officer Name: Bond Compliance Officer Signature: [ _____ __,Date of Report:Annual Period Covered by Report:['--_____ ___.] **If the answers to any of the following questions identify any compliance deficiencies, the Bond Compliance Officer should immediately contact Bond Counsel and take actions required in the Tax Compliance Procedure.** Item Question Response 1 Were all of the Financed Improvements owned by the Issuer during the entire 0Yes Ownership Annual Period? nNo If answer above was "No," was advice of Bond Counsel obtained prior to the 0Yes transfer? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. 2 During the Annual Period, was any part of the Financed Improvements leased at 0Yes Leases & Other any time pursuant to a lease or similar agreement for more than 50 days? 0No Rights to Possession If answer above was "Yes," was advice of Bond Counsel obtained prior to 0Yes entering into the lease or other arrangement? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. 600596.20219\FTC V.3 E-1 Item Question Response 3 During the Annual Period, has the management of all or any part of the □Yes Management operations of the Financed Improvements (e.g., cafeteria, gift shop, etc.) been □No or Service assumed by or transferred to another entity? Agreements If answer above was "Yes," was advice of Bond Counsel obtained prior to 0Yes entering into the management agreement? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. 4 Was any other agreement entered into with an individual or entity that grants □Yes Other Use special legal rights to the Financed Improvements? □No If answer above was "Yes," was advice from Bond Counsel obtained prior to 0Yes 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. 5 Have any Gross Proceeds of the Bonds been invested in a Guaranteed 0Yes Proceeds & Investment Contract? □NoInvestments Has the Issuer entered into an Interest Rate Swap Agreement with respect to the 0Yes Bonds? nNo Has any sinking or reserve fund for the payment of the Bonds been established 0Yes (other than funds and accounts created in the Bond Resolution)? nNo Have any of the Bonds been redeemed or refunded in advance of their scheduled 0Yes maturities? nNo If answer to any of the above questions was "Yes," notify Bond Counsel with such information and place a copy of documentation in the Tax-Exempt Bond File. Has the Issuer set aside money in any fund or account in excess of an amount 0Yes 6 needed to pay debt service on the Bonds within the next 12 months (i.e. is more □NoArbitrage & than one year of debt service pre-funded)? Yield Restriction If Yes, contact Bond Counsel and incorporate report or include description of resolution in the Tax-Exempt Bond File. 7 During the Annual Period, was any other agreement entered into with another 0Yes Other entity that grants special legal rights or privileges to the Financed Improvements 0No Contracts (e.g., an output contract)? If answer above was "Yes," was advice of Bond Counsel obtained prior to 0Yes entering into the agreement? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. 600596.20219\FTC V.3 E-2 Bond Counsel: 600596.20219\FTC V.3 Gilmore & Bell, P.C. 100 N. Main, Suite 800 Wichita, Kansas 67202 Phone: (316) 267-2091 Attn: Gina Riekhof or Mitch Walter Email: griekhof@!!ilmorebell.com or mwalter@i!ilmorebell.com E-3 SCHEDULEJ DEBT SERVICE SCHEDULE AND PROOF OF YIELD 600596.20'219\FTC V.3 S-1 Aug 17, 2021 10:39 am Prepared by Gilmore & Bell, P.C. (Finance 8.700 Salina, KS:SALINA-2021B) Page 1 SOURCES AND USES OF FUNDS City of Salina, Kansas General Obligation Refunding Bonds Series 2021-B Sources: Bond Proceeds: Par Amount Premium Other Sources of Funds: Prior DS Funds Uses: Refunding Escrow Deposits: Prior DS Funds Bond Proceeds Delivery Date Expenses: Cost oflssuance Underwriter's Discount Other Uses of Funds: Additional Proceeds Dated Date Delivery Date 09/08/2021 09/08/2021 Refund 2013-B Refund 2014-A 2,310,000.00 3,910,000.00 122,343.45 145,201.50 2,432,343.45 4,055,201.50 309,687.50 371,256.25 2,742,030.95 4,426,457.75 Refund 2013-B Refund 2014-A 309,687.50 371,256.25 2,395,000.00 4,000,000.00 2,704,687.50 4,371,256.25 24,810.21 41,994.79 9,220.45 15,606.92 34,030.66 57,601.71 3,312.79 -2,400.21 2,742,030.95 4,426,457.75 Total 6,220,000.00 267,544.95 6,487,544.95 680,943.75 7,168,488.70 Total 680,943.75 6,395,000.00 7,075,943.75 66,805.00 24,827.37 91,632.37 912.58 7,168,488.70 This information is provided based on the factual infonnation and assumptions pl'OVided to Gilmore & Bell, P.C. by a party to or a rep.-esentative of e party to the proposed transaction. This infonuation ls intended to provide factual inf01mation only and is provided in conjunction with our legal represeuration. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not a financial adviso.r 01· a "municipal advisol"n as defined in the Secmities Exchange Act of 1934, as amended. This. information is provided based OD the factual info1mntion and assumptions pmvided to Gilmore & Bell, P.C. by a party to or a representative of a party to the proposed transaction. This wfonuation is intended to provide facn1al infotmation only and is provided in conjunction with our legal .representation. It is not intended as financial advice or H financial recoiwnendation any party. Gilmore & Bell. P.C. is not a financial advisor or a "municipal advisor" as defined in the See111·ities Exchange Acl of 1934, as amended. This information is provided based on the factual infon:nation and assumptions provided to Gilmore & Bell, P.C. by a party to or a repl"esentative of n party to the proposed transaction. This information is intended to provide factuaJ info11nation only and is provided in conjunction with our legal rep1·esentation. It is not intended es financial advice 01· a financial recmwnendtttlon to any party. Oihuore & Bell, P.C. is not a financial advisor or a •�municipal advisor" as defined in the Secul"ities Exchange Act of 1934, as amended. This information is provided based on the facruaJ infonnation and assumptions provided to Gilmol'e & Bell, P.C. by a party to or a rep.-esentative of a party to the proposed transaction. This infonuadon is intended to provide factual infonnMion only and is provided in conjunction with our legal rep1·esentarion. It is not intended as financial advice 01· a financial reco1wneudatioo to any party. Gilmore & Bell, P.C. is not a financial advisor or a "municipal advisor" as defined in the Secul'ities Exchange Act of 1934. as amended. Aug 17, 2021 10:39 am Prepared by Gilmore & Bell, P.C. (Finance 8.700 Salina, KS:SALINA-20218) Page 5 BOND PRJCING City of Salina, Kansas General Obligation Refunding Bonds Series 2021-B Bond Component Maturity Date Refund 2013-B, Serial Bonds: 10/01/2022 10/01/2023 10/01/2024 10/01/2025 10/01/2026 10/01/2027 10/01/2028 10/01/2029 10/01/2030 10/01/2031 10/01/2032 10/01/2033 Refund 2014-A, Serial Bonds: 10/01/2022 10/01/2023 10/01/2024 10/01/2025 10/01/2026 10/01/2027 10/01/2028 10/01/2029 10/01/2030 10/01/2031 10/01/2032 10/01/2033 10/01/2034 Dated Date Delivery Date First Coupon Par Amount Premium Production Underwriter's Discount Purchase Price Accrued Interest Net Proceeds Amount Rate 280,000 2.000% 285,000 2.000% 290,000 2.000% 295,000 2.000% 300,000 2.000% 305,000 2.000% 305,000 2.000% 50,000 1.000% 45,000 1.000% 50,000 1.150% 50,000 1.250% 55,000 1.350% 2,310,000 320,000 2.000% 325,000 2.000% 340,000 2.000% 350,000 2.000% 350,000 2.000% 350,000 2.000% 365,000 2.000% 370,000 1.000% 220,000 1.000% 225,000 1.150% 230,000 1.250% 235,000 1.350% 230,000 1.400% 3,910,000 6,220,000 09/08/2021 09/08/2021 04/01/2022 6,220,000.00 267,544.95 6,487,544.95 -24,827.376,462,717.58 6,462,717.58 Yield Price 0.180% 101.933 0.200% 103.705 0.300% 105.180 D.400%106.443 0.500%107.491 0.650%108.014 0.800%108.225 0.900%100.682 C 1.000%100.000 1.150%100.000 1.250%100.000 1.350%100.000 0.180% 101.933 0.200% 103.705 0.300% 105.180 0.400% 106.443 0.500% 107.491 0.650% 108.014 0.800% 108.225 0.900% 100.682 C 1.000% 100.000 1.150% 100.000 1.250% 100.000 1.350% 100.000 1.400% 100.000 104.301366% -0.399154%103.902212% This infonnlltion is provided based on the factual infonnation and assumptions provided to GiJmol'e & Bell, P.C. by a party to or a representative of a party to ihe proposed 1ransaction. This infonuatlon is intended to provide factual info1mation only and is provided .i..n conjunction with our legal rep1·esentation. It is not intended as financial advice 01· a flnru1cial recmwnendation to any pruty. Gilmore & Bell, P.C. is not a financial ad\�lsor or a Hmunicipal advisor" as defined in the Securities Exchange Act of 1934, as amended. Aug 17, 2021 10:39 am Prepared by Gilmore & Bell, P.C. (Finance 8.700 Salina, KS:SALINA-202IB) Page 6 BOND SUMMARY STATISTICS City of Salina, Kansas General Obligation Refunding Bonds Series 2021-B 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 oflssue (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 Serial Bonds Par Value +Accrued Interest+ Premium (Discount)-Underwriter's Discount-Cost oflssuance Expense-Other AmountsTarget Value Target Date Yield 6,220,000.00 6,220,000.00 TIC 6,220,000.00 267,544.95 -24,827.376,462,717.58 09/08/2021 0.918395% 09/08/2021 09/08/2021 04/01/2022 10/01/2034 0.849749% 0.918395% 0.939598% 1.105020% 1.602718% 5.885 5.843 5.606 6,220,000.00 6,487,544.95 586,633.03 343,915.45 6,806,633.03 Price 104.301 718,047.50 521,026.56 3.991539 3.991539 103.902212 Average Coupon 1.603% All-In TIC 6,220,000.00 267,544.95 -24,827.37-66,805.006,395,912.58 09/08/2021 1.105020% Average Life 5.885 5.885 Arbitrage Yield 6,220,000.00 267,544.95 6,487,544.95 09/08/2021 0.849749% This infonnat1on is provided based on the factual infonnation and assumptions provided to Gilmore & Bell, P.C. by a party to or a representative ofa party to the proposed transaction. This infonnation is intended to provide fac-rual infonnation only and is provided iu conjunction with our legal rep1·esentadon. It is not inrended as financial ad,•ice o,· a financial recotwneudation to any party. Gilmore & Bell, P .C. is not a financial advisor 01· a �·municipal adv ism·" as defined in the Secudties Exchange-Act of 1934, as amended. This infonnation is provided based on the factual infonnution and assumptions provided to Gilmore &: Bell, P.C. by a party to or a representative of e party to the proposed transaction. This infonnation is intended to provide factual infonnation only and is provided in conjunction with our legal rep1·eseutation. It is not intended as financial advice or a financial reco1wnendation to any party. Gilmore & Bell, P.C. is not a financial advisor OI' a '·municipal advisor'' as def"med in the Securities Exchange Act of 1934, as amended. 101.818 278,915.40 Tllis infOLnuttjon is provided based on the facnial infonnntion and assu1nptio11S p1'0vided to Gilmore & Bell, P.C. by a party to or a representative of o party to the proposed transaction. This in:fonnntiou is intended to provide factual inf01mMtion only and is provided conjunction with our legal rep1·eseuration. It is not intended as financial advice or a financial recommeudation to any party. Gilmore & Bell, P.C. is not a financial advisor or a "municipal advisor" as defined in the Secm·itles Excbange Act of 1934. as amended. Aug 17, 2021 10:39 am Prepared by Gilmore & Bell, P.C. (Finance 8.700 Salina, KS:SALINA-20218) Page 10 SUMMARY OF REFUNDING RESULTS Dated Date Delivery Date Arbitrage yield Escrow yield Value ofNegative Arbitrage Bond Par Amount True Interest Cost Net Interest Cost All-In TICAverage Coupon Average Life Weighted Average Maturity Par amount of refunded bonds Average coupon of refunded bonds Average life of refunded bonds City of Salina, Kansas Refund 2013-B Remaining weighted average maturity of refunded bonds PY of prior debt to 09/08/2021 @ 1.105020% Net PY Savings Percentage savings of refunded bonds Percentage savings of refunding bonds 09/08/2021 09/08/2021 0.849749% 0.000000% 2,310,000.00 0.761115% 0.785113% 0.986511% 1.810932% 4.774 4.777 2,395,000.00 3.575667% 5.047 5.023 2,676,474.32 294,371.60 12.291090% 12.743359% This infom1atlon is provided based on the factual information and assumptions provided to Oilmore & Bell, P.C. by a party to or a cepresentative of n party to the proposed transaction. This infonnation is intended to provide factual infonnation only and is provided in conjunction ,vith our legal rep1·ese11tation. It is not intended es financial advice or a financial recommendation to any party. Gilmore & Bell. P.C. is not a financial adv.isor or a .. municipal advisor�• as de:fwed in the Securities Ex.change Act of 1934, as amended. This information 1s provided based on the factual infonnation and assumptions provided to Gilmore & Bell, P.C. by a party to or a representative of a party to the proposed transactjon. This infonuation is intended to provide facruol infonnation only and is pro,·ided in conjunction with our legal rep1·eseuration. It is not intended as financial advice 01· a fiWUJ.ciaJ recommendation to any party. Gilmore & Bell, P.C. is not a financial advisor or a "municipal advisorn as defined in the Securities Exchan�e Act of 1934, as amended. This information is provided based on the factual information and assumptions provided to Gilmore & Bell, P.C. by a party to 01· a representative of a party to the proposed transaction. This infonuatiou is intended to provide factual info1marion only and is provided 1n conjunction with our legal represenration. It is not intended as financial advice or a financial reconuneudation to any party. GilJUore & Bell, P.C. is not a financial advisor or a "municipal advisor·� as defined in tbe Securities Exchange Act of 1934, as amended. Aug 17, 2021 10:39 am Prepared by Gilmore & Bell, P .C. (Finance 8.700 Salina, KS:SALINA-20218) Page 13 Bond SUMMARY OF BONDS REFUNDED Maturity Date City of Salina, Kansas Refund 2014-A Interest Rate Par Amount Call Date General Obligation Internal Improvement Bonds Series 2014-A, 2014A, SERIAL: 10/01/2022 I 0/01/2023 10/01/2024 10/01/2025 10/01/2026 10/01/2027 10/01/2028 10/01/2029 10/01/2030 2.500% 310,000.00 2.500% 315,000.00 2.750% 330,000.00 2.750% 340,000.00 3.000% 345,000.00 3.000% 350,000.00 3.000% 365,000.00 3.150% 375,000.00 3.soo% ___ 2_35__.,o_o_o_.o_o2,965,000.00 10/01/2021 10/01/2021 10/01/2021 10/01/2021 10/01/2021 10/01/2021 10/01/2021 10/01/2021 10/01/2021 General Obligation Internal Improvement Bonds Series 2014-A, 2014A, TERM!: 10/01/2032 3.750% 500,000.00 10/01/2021 General Obligation Internal Improvement Bonds Series 2014-A, 2014A, TERM2: 10/01/2034 3.500% 535,000.00 10/01/2021 4,000,000.00 Call Price 100.000 100.000 100.000 100.000 100.000 100.000 100.000 100.000 100.000 100.000 100.000 This infonnntJon is provided based on the factual infonntdion and assumptions provided to Gilmore &:. Bell, P.C. by a party to or a cepreseutative of a party to the proposed transac-tion. This infonnation is intended to provide fachm1 infonnatioo only and is provided in conjunction with our Legal represeutation. It is not intended as financial advice or a financial recommeudation to any party. Gilmore & Bell, P.C. is not a financial advisor 01· a �·municipal advisor" as defined in the Securities Exchange Act of 1934, as amended. Aug 17, 2021 10:39 am Prepared by Gilmore & Bell, P.C. SAVINGS City of Salina, Kansas Refund 2013-B Prior Refunding Date Debt Service Debt Service Savings 10/01/2021 309,687.50 309,687.50 04/01/2022 40,712.50 24,863.27 15,849.23 10/01/2022 310,712.50 302,046.25 8,666.25 04/01/2023 36,662.50 19,246.25 17,416.25 10/01/2023 3ll,662.50 304,246.25 7,416.25 04/01/2024 32,537.50 16,396.25 16,141.25 10/01/2024 317,537.50 306,396.25 11,141.25 04/01/2025 28,262.50 13,496.25 14,766.25 10/01/2025 318,262.50 308,496.25 9,766.25 04/01/2026 23,187.50 10,546.25 12,641.25 10/01/2026 323,187.50 310,546.25 12,641.25 04/01/2027 17,937.50 7,546.25 10,391.25 10/01/2027 327,937.50 312,546.25 15,391.25 04/01/2028 12,512.50 4,496.25 8,016.25 10/01/2028 327,512.50 309,496.25 18,016.25 04/01/2029 7,000.00 1,446.25 5,553.75 10/01/2029 72,000.00 51,446.25 20,553.75 04/01/2030 5,700.00 1,196.25 4,503.75 10/01/2030 70,700.00 46,196.25 24,503.75 04/01/2031 4,400.00 971.25 3,428.75 10/01/2031 74,400.00 50,971.25 23,428.75 04/01/2032 3,000.00 683.75 2,316.25 10/01/2032 73,000.00 50,683.75 22,316.25 04/01/2033 1,600.00 371.25 1,228.75 10/01/2033 81,600.00 55,371.25 26,228.75 3,131,712.50 2,509,702.02 622,010.48 Savings Summary PV of savings from cash flow Less: Prior funds on hand Plus: Refunding funds on hand Net PV Savings (Finance 8.700 Salina, KS:SALINA-202IB) Page 14 Annual Savings 309,687.50 24,515.48 24,832.50 27,282.50 24,532.50 25,282.50 25,782.50 26,032.50 26,107.50 29,007.50 26,857.50 24,632.50 27,457.50 622,010.48 600,528.35 -309,687.503,312.79 294,153.64 Present Value to 09/08/2021 @ l.1050198% 309,469.54 15,751.05 8,565.24 17,ll8.67 7,249.48 15,691.59 10,771.36 14,197.57 9,338.54 12,021.21 11,955.15 9,773.27 14,396.37 7,456.89 16,667.01 5,109.60 18,806.10 4,098.16 22,174.52 3,085.78 20,969.35 2,061.71 19,754.74 1,081.73 22,963.70 600,528.35 This information 1s provided based on the factual inforuiation and assmnptious pl'ovlded to Gilmore & Bell, P.C. by a party to or ,1 n�p.-esentative of a party to the proposed transaction. This infonnatiou is intended to provide factual infonnation only and is provided in conjunction ·,vtth our legal rep1-eseutation. It is not Intended as financial advice or a financial reconunendation to any party. Gilmore & Bell, P.C. is not a financial advisor or a "municipal advisor'' as defwed in the Secm·ities E.xchange Act of 1934, as amended. Aug 17, 2021 10:39 am Prepared by Gilmore & Bell, P.C. SAVINGS City of Salina, Kansas Refund 2014-A Prior Refunding Date Debt Service Debt Service Savings 10/01/2021 371,256.25 371,256.25 04/01/2022 61,681.25 37,078.51 24,602.74 10/01/2022 371,681.25 352,877.50 18,803.75 04/01/2023 57,806.25 29,677.50 28,128.75 10/01/2023 372,806.25 354,677.50 18,128.75 04/01/2024 53,868.75 26,427.50 27,441.25 10/01/2024 383,868.75 366,427.50 17,441.25 04/01/2025 49,331.25 23,027.50 26,303.75 10/01/2025 389,331.25 373,027.50 16,303.75 04/01/2026 44,656.25 19,527.50 25,128.75 10/01/2026 389,656.25 369,527.50 20,128.75 04/01/2027 39,481.25 16,027.50 23,453.75 10/01/2027 389,481.25 366,027.50 23,453.75 04/01/2028 34,231.25 12,527.50 21,703.75 10/01/2028 399,231.25 377,527.50 21,703.75 04/01/2029 28,756.25 8,877.50 19,878.75 10/01/2029 403,756.25 378,877.50 24,878.75 04/01/2030 22,850.00 7,027.50 15,822.50 10/01/2030 257,850.00 227,027.50 30,822.50 04/01/2031 18,737.50 5,927.50 12,810.00 10/01/2031 263,737.50 230,927.50 32,810.00 04/01/2032 14,143.75 4,633.75 9,510.00 10/01/2032 269,143.75 234,633.75 34,510.00 04/01/2033 9,362.50 3,196.25 6,166.25 10/01/2033 274,362.50 238,196.25 36,166.25 04/01/2034 4,725.00 1,610.00 3,115.00 10/01/2034 274,725.00 231,610.00 43,115.00 5,250,518.75 4,296,931.01 953,587.74 Savings Summary PV of savings from cash flow Less: Prior funds on hand Plus: Refunding funds on hand Net PV Savings (Finance 8.700 Salina, KS:SALINA-2021B) Page 15 Annual Savings 371,256.25 43,406.49 46,257.50 44,882.50 42,607.50 45,257.50 46,907.50 43,407.50 44,757.50 46,645.00 45,620.00 44,020.00 42,332.50 46,230.00 953,587.74 911,405.23 -371,256.25-2,400.21 537,748.77 Present Value to 09/08/2021 @ 1.1050198% 370,994.96 24,450.33 18,584.59 27,648.14 17,721.09 26,676.79 16,862.20 25,290.74 15,589.72 23,896.20 19,036.27 22,058.93 21,937.72 20,189.29 20,078.36 18,288.98 22,763.35 14,397.59 27,892.64 11,528.64 29,365.82 8,464.93 30,548.86 5,428.48 31,664.14 2,712.25 37,334.20 911,405.23 This iufonna1io11 is provided based on the factual infonnation and assumptiollS provided to Gilmore & Bell. P.C_ by a party to or a representative of a party to the proposed transaction. This infonuatiou fa intended to pro\.·ide factual infonnation only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financial recowmeudation to ru1y party. Gilmore & Bell, P.C. is not a financial advisor or a "mu1Licipal adviso1··• as defined in the Secm·ities Exchange Act of 1934, as amended. This iufo1mation is provided based on the factual information and assumptions provided to Gilmore & Bell, P.C. by a party to or n .representative of a party to the proposed transaction. This infonuation is intended to provide facrual information only and is provided in conjunction with our legal representation. It is not intended as financial advice or a f"wancial reco1wnendatlon to any party. Gilmore & Bell, P.C. is not a financial advisor or a --mu11icipal adviso1·" as def'wed in the Secudties Exchange Act of 1934, as amended. This infonnntion is prmrided based on the facnrnl infonnntion and assumptions provided to Gilmore 8: Bell, P.C. by a party to or n repre:seutative of a party to the proposed transaction. This infonnation is intended to provide factual info1mation only and is provided Jn conjunction with our legal representation. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not a financial advisor or a .. municipal advisor�• as defined in the SeC\u·ities Exchange Act of 1934, as amended. This info1mation is provided based on the fachrnl infonnntiou and assmnptions provided to Gilmore & Bell. P.C. by a party to or a rep,·esentative of a party to the proposed transaction. This infonnation is intended to provide factual information only and is provided in conjunction with our legal rep1-eseuration. It is not intended as financial advice or a financial recoiwneudation to auy party. Gilmore & Bell, P.C. is not a financial advisor 01· a •·municipal adviso1·n as def"wed in the Securities Exchange Act of 1934, as amended. This information is provided based on the factual infonnntion and assmuptious provided to Gilmore & Bell, P .C. by a party to or a rep1-esentati"·e of R party to the proposed transaction. This information is intended to provide :facnmJ infonnation only and is provided ln conjunction with our legal represeutation. It is not intended as financial advice or a fiwmcial rec01wnendation to any party. Gilmore & Bell, P .C. is not a financial advisor 01· a •;municipal advisor•� as defined in the Securities Exchange Act o:f l as amended. Governing Body City of Salina, Kansas $ GILMOR_EBELL One Main Place -100 North Main, Suite 800 Wichita, Kansas 67202-1311 (316) 267-2091 / (316) 262-6523 FAX/ gilmorebell.com September 8, 2021 UMB Bank, n.a. Kansas City, Missouri Re: $6,220,000 General Obligation Refunding Bonds, Series 2021-B, of the City of Salina, Kansas, Dated September 8, 2021 We have acted as Bond Counsel in connection with the issuance by the City of Salina, Kansas (the "Issuer"), of the above-captioned bonds (the "Bonds"). In this capacity, we have examined the law and the certified proceedings, certifications and other documents that we deem necessary to render this opinion. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution adopted by the governing body of the Issuer prescribing the details of the Bonds. Regarding questions of fact material to our opinion, we have relied on the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify them by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1.The Bonds have been duly authorized, executed and delivered by the Issuer and are validand legally binding general obligations of the Issuer. 2.The Bonds are payable as to both principal and interest in part from special assessmentslevied upon the property benefited by the construction of certain improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Bonds to the extent that necessary funds are not provided from other sources. 3.The interest on the Bonds is: (a) excludable from gross income for federal income taxpurposes; and (b) not an item of tax preference for purposes of the federal alternative minimum tax. The opinions set forth in this paragraph are subject to the condition that the Issuer complies with all requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to b�, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to comply with certain of these requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Bonds are "qualified tax-exempt obligations" within the meaning of Code§ 265(b)(3). We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 6005 96.20219\OPINION Salina, Kansas General Obligation Refunding Bonds $6,220,000-Series 2021-B Dated September 8, 2021 Page Two 4.The interest on the Bonds is exempt from income taxation by the State of Kansas. We express no opinion regarding the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds ( except to the extent, if any, stated in the Official Statement). Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth in this opinion. The rights of the owners of the Bonds and the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at law or in equity. This opinion is given as of its date, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in Jaw that may occur after the date of this opinion. GMR/MLW:wab Ii GILMOR,.EBELL 600596.20219\OPINION August 31, 2021 CLOSING MEMORANDUM TO: FROM: SEE DISTRIBUTION LIST DAVID ARTE BERRY RE: BOND ISSUE CLOSING ARRANGEMENTS NAME OF ISSUER: AMOUNT, NAME AND DATE OF ISSUE: TIME AND DATE OF CLOSING: SETTLEMENT NUMBERS: METHOD OF FUNDS TRANSFER: City of Salina, Kansas (the "City") $6,220,000 City of Salina, Kansas General Obligation Refunding Bonds Series 2021-B Dated September 8, 2021 (the "Bonds") 10:00 a.m. Wednesday, September 8, 2021 Via telephone Par Amount of Bonds Add: Reoffering Premium Less: Underwriter's Discount Less: Good Faith Deposit Net Amount Due at Closing Wire Transfer of Federal Funds $6,220,000.00 267,544.95 (24,827.37) (130,000.00) $6,332,717.58 TRANSFER INSTRUCTIONS: (UMB) (City) DISPOSITION OF FUNDS: (Kansas State Treasurer) (City) DELIVERY OF TRANSCRIPT On Wednesday, September 8, 2021 UMB Bank N.A. ("UMB") will wire transfer an amount of $6,332,717.58 to: U.S. Bank N.A. ABA For credit to State Treasurer Operating Account Account For further credit to City of Salina Attn: Shauna Wake On Tuesday, September 7, 2021 the City will wire transfer $62,282.42 (representing a portion of the good faith deposit previously received from UMB) to: U.S. Bank N.A. ABA For credit to State Treasurer Operating Account Accoun For further credit to City of Salina Attn: Shauna Wake The Kansas State Treasurer shall use the $6,332,717.58 received from UMB and the $62,282.42 received from the City (total $6,395,000) to redeem the callable portions of the City's outstanding General Obligation Internal Improvement Bonds, Series 2013-B and General Obligation Internal Improvement Bonds, Series 2014-A (collectively, the "Refunded Bonds") on October 1, 2021. The City will make the scheduled payment of maturing principal and interest due on the Refunded Bonds on October 1, 2021 from available budgeted funds on or prior to such date. The City shall deposit $67,717.58 (representing the remaining balance of the good faith deposit received from UMB) into the Costs of Issuance Account for General Obligation Refunding Bonds, Series 2021-B (the "Costs of Issuance Account"). AND LEGAL OPINION: Upon receiving confirmation of receipt of funds, Gilmore & Bell will email a signed legal opinion to the City, UMB, and Stifel, Nicolaus & Company. Original signed legal opinions and transcripts will be mailed when completed. BOND DELIVERY INSTRUCTIONS: The Bonds 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 Bonds will be paid after closing by the City from the Costs of Issuance Account upon presentation of the proper invoices. CITY OF SALINA, KANSAS GEI\'ERAL OBLIGATION BONDS, SERIES 2021-B ISSUER CITY OF SALINA, KANSAS 300WestAsh Salina, Kansas 67402-0736 Telephone: (785) 309-5735 Fax: (785) 309-5738 Mike Schrage, City Manager E-mail: mi ke.schra!Ie@salina.or!IDebbie Pack, Finance Director E-mail: Debbie.nack@salina.omJoVonna Rutherford, City Clerk DISTRIBUTION LIST BOND COUNSEL GILMORE & 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 AssistantE-mail: wbivins@eilmorebell.com E-mail: jovonna.rutherford@sal ina.on!2405 Grand Boulevard, Suite 1100 1-----------------------1 Kansas City, Missouri 64108-2521 ISSUER'S COUNSEL CLARK, MIZE & LINVILLE CHARTERED 129 South 8th -Box 380 Salina, Kansas 67402-0380Telephone: (785)-472-3186 Greg Bengtson, Esq. Telephone: (785) 823-6325 E-mail: 2abe1H!tson@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: arteberrvd@stifel.comNikki Jackson E-mail: iacksonni@stifel.com 600596.20219/Distribution List Telephone: (816) 221-1000 Fax: (816) 221-1018 Gina Riekhof, Esq. E-mail: !Iriekhof@2:ilmorebell.comJames Dummitt, Esq. E-mail: jdummitt@!Ii lmorebell .comHeather League, Legal Assistant E-mail: hleae:ue@gilmorebell.com PAYING AGENT TREASURER OF THE ST A TE 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.newissues@treasurer.ks. oov UMB BANK, n.a. 1010 Grand Blvd. PURCHASER Municipal Underwriting, 2nd Floor P.O. Box 419226 Kansas City, Missouri 64141-6226 Telephone: (816) 860-7223 Fax: (816) 843-4325 Ms. Kristin M. Koziol, VP & Manager of Municipal Underwriting E-mail: Kristin.Koziol@umb.com 600596.20219/Distribution List