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Salina KS (GO Int Imp Bonds) 2023-A_600596-20228_MLWTRANSCRIPT OF PROCEEDINGS AUTHORIZING THE ISSUANCE OF $2,955,000 CITY OF SALINA, KANSAS Gilmore & Bell, P.C. 07/24/2023 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A Legal Opinion Gilmore & Bell, P.C. Wichita, Kansas 600596.20228\CLOSING DOCS DATED AUGUST 17, 2023 $2,955,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A DATED AUGUST 17, 2023 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. Robert W. Baird & Co., Inc., Milwaukee, Wisconsin (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 IMPROVEMENTS 1. Charter Ordinance No. 41 · Minutes of governing body relating to First Reading of Charter Ordinance No. 41 · Minutes of governing body relating to Final Passage of Charter Ordinance No. 41 · Charter Ordinance No. 41 • Affidavit of Publication of Charter Ordinance No. 41 · Certificate of No Protest 2. Cedar Ridge Addition -Phase 2 · Project estimate · Map of Improvement District · Petition · Minutes of the governing body meeting evidencing adoption of Resolution No. 21-7983 · Resolution No. 21-7983 authorizing internal improvements (recorded) · Affidavit of Publication of Resolution No. 21-7983 600596.20228\CLOSING DOCS 3. Public Facility Improvements-Bill Burke Park • Minutes of the governing body meeting evidencing adoption of Resolution No. 22-8035 • Resolution No. 22-8035 authorizing facility improvements SPECIAL ASSESSMENT PROCEEDINGS 4. Excerpt of Minutes of the governing body meeting accepting the following documents: · Statement of Final Costs · Assessment Roll Certification • Notice of Public Hearing • Form of Notice of Hearing and Statement of Cost Proposed to be Assessed 5. Affidavit of Publication -Notice of Public Hearing 6. Certificate of Mailing -Notice of Public Hearing 7. Excerpt of Minutes of the governing body meeting evidencing passage of Ordinance No. 23-11151 8. Ordinance No. 23-11151 levying special assessments 9. Summary of Ordinance No. 23-11151 and Affidavit of Publication of Summary of Ordinance No. 23-11151 10. Certificate of Mailing -Notice of Assessment 11. Certificate of Treasurer -Assessments Paid in Cash PROCEEDINGS AUTHORIZING THE SALE AND ISSUANCE OF THE BONDS 12. Excerpt of Minutes of the governing body meeting evidencing adoption of Resolution No. 23-8135 13. Resolution No. 21-8135 authorizing the offering for sale of the Bonds 14. Notice of Bond Sale, Preliminary Official Statement and Certificate Deeming Preliminary Official Statement Final 15. Affidavit of publication of the Summary Notice of Bond Sale in the Salina Journal 16. Affidavit of publication of the Summary Notice of Bond Sale in the Kansas Register 17. Official Statement 18. Continuing Disclosure Undertaking 600596.20228\CLOSING DOCS 11 19. Excerpt of Minutes evidencing first reading of Ordinance No. 23-11155 20. Excerpt of Minutes of the governing body meeting evidencing opening of the bids, acceptance of the best bid of the Original Purchaser, passage of Ordinance No. 23-11155 and adoption of Resolution No. 23-8140 21. Ordinance No. 23-11155 authorizing the issuance of the Bonds 22. Summary of Ordinance No. 23-11155 and Affidavit of publication of Summary of Ordinance No. 23-11155 23. Resolution No. 23-8140 prescribing the form and details of the Bonds CLOSING DOCUMENTS 24. Transcript Certificate Exhibit A -Statement of Costs Exhibit B -Schedule of Outstanding General Obligation Indebtedness 25. Uniform Facsimile of Signature Certificates 26. Authorization of State Treasurer to use facsimile signature and seal 27. Specimen Bond and Bond Printer's Certificate 28. Agreement Between Issuer and Agent 29. DTC Blanket Letter of Representations 30. Rating Letter -Moody's 31. Closing Certificate 32. Federal Tax Certificate with attachments as follows: Exhibit A -Internal Revenue Service Form 8038-G and evidence of filing Exhibit B -Receipt for Purchase Price Exhibit C -Receipt and Representation Exhibit C-1 -Certificate of Municipal Advisor Exhibit D -Description of Property Comprising the Financed Improvements[ and List of Reimbursement Expenditures] Exhibit E -Sample Annual Compliance Checklist Schedule 1 -Debt Service Schedule & Proof of Yield LEGAL OPINIONS 33. Approving legal opinion of Gilmore & Bell, P.C. 34. Approval letter of Attorney General 600596.20228\CLOSING DOCS 111 MISCELLANEOUS DOCUMENTS 35. Closing Letter * * * * * 600596.20228\CLOSING DOCS iv Page I of3 ORDINANCE NO. 41 A CHARTER ORDINANCE EXEMPTING THE CITY OF SALINA, KANSAS, FROM THE PROVISIONS OF K.S.A. 13-10240 AND PROVIDING SUBSTITUTE AND ADDITIONAL PROVI- SIONS ON THE SAME SUBJECT RELATING TO GENERAL IMPROVE- MENTS ANO THE ISSUANCE OF BONDS FOR THE PURPOSE OF PAYING FOR SAID IMPROVEMENTS; AND REPEALING CHARTER ORDINANCE NUMBER 39. WHEREAS. Article 12, § 5 of the Constitution of the State of Kansas (the "Act") empowers cities to deter- mine their local affairs and government and provides that such power ond outhor- ilv granted thereby to cities shall be liberally construed for the purpose of giving to cities the largest measure of self-government, including possing charter ordinances which exemat such cities tram non-uniform statutes and acts of the Kansas Legis- lature; and WHEREAS, the City of Sallno, Kansas (the "City") is a City, as defined in the Act, duly created and orga- nized, under the laws of the State of Kansas; and WHEREAS, K.S.A. 13-102.40 is cart at on enactment at the Kon sos Legislature (K.S.A. 13 10240 et seq.) relating to general improve- ments and the issuance of bonds for such aurposes, which enactment is aaplica- ble to the Citv, but is not uniformly applicable ta all cities within the State of Kansas; and WHEREAS, the City hos arevlously passed Charter Ordinance No. 39, providing different and additional provisions to K.S.A. 13-10240; ond WHEREAS, the governing body of the City desires to repeol Chorter Ordinance No. 39 and, by new chorter ordinance, exemat the City from the provisions of K.S.A. 13-1024a and provide substi-tute ond additional provi- sions therefor. NOW,THEREFORE,BEIT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: Section 1. Exemption - K.S.A. 13-10240. The City of Sollno, Konsos (the "City") by virtue of the cowers vested in It by Article 12, Section 5, of the Constitution of the State of Kansas, hereby elects to exempt itself tram and hereby make inapplicable to it Section 13- 10240, Kansas Statutes Anno-tated, that applies to the City, but is Part of on enoct- ment which does not oapiy unlformly to all cities, ond thereby provides substitute and additlonol provisions an the same subiect as here- inafter provided. Sect Ion 2. Substitute and Additional Provision!. The City of Sollno, Konsos hereby adapts the following substitute and additional provisions of Section 13- 1024a, Kansas Statutes Anno- toted: As a complete alternative to all other methods provided bY low, the city may borrow money and issue its bonds for the puraose of paying the praiect costs (which may include acquisition of inter- ests In real estate and archi- Page2of3 tectural, engineering, and other professional services) for the following categories of prolects: Prefect Categorv Description A. ~-Construction, reconstruction, improvement or repair of anv st reef or roadwov located within or partially within the citv limits ond not designated as o main trafficawav pursuant to K.S.A. 12-685 et seq. B. 6cidses and Viaducts. Construction, reconstruction, improvement or repair of anv bridge or viaduct located within or Portialiv within the citv limits and not located on a street designated os a main lrofficwov pursuant to K.S.A. 12-685 el seq. c. PubHc Parks. Acquisition of tond for public pork purpases and acquisition, construction, reconstruction, improvement and repair of park and recreation facilltles other than those more speclf- icallv addressed under cate- gories G, H and I below, whether located Inside or outside the citv limits. o. Pyb(jc Buj(djngs. Acquisi-tion, construction, recon- struction, improvement or repair of public buildings or acquisition of land for the construction, reconstruction, improvement or repair of public buildings, whether located inside or outside the city limits. E. storm Wotec PccJnag~ iv~ Improvements, extension, or repair of the storm water drainage systems, whether located inside or outside the city limits. F. Water works qnd/or Sgnj- lll!:l1 sewer svmim. I mProvements, extension, or repair of the citv-<iwned water works and /or sanitary sewer systems, and appurte- nances thereto, whether located inside or outside the city limits. G. .E.lmlll.Y___Aouotjc Pqrk. Financing, constructing, equipping, supplying and maintaining o famlly aquatic POrk. H. Pub(jc Bui(djng for Recre-ctiong( Pur~. Acquisition or construction of a public building for recreational PUrPoses and acquisition of land for the construction of a public building for recre- ational purposes I. Bqsebg((/Softbg(( Fgcj(ltv .to,oroyemenfs. Reconstruc-tion, improvements, and repair of Citv owned Bose- boll/SOflboll facilities as intended in the Public Private Partnership Agree- ment with Solina Athletic Partners. Issuance of bonds bv the City Pursuant to this charter ordi- nance shall require autho- rization by o maJoritY of the votes cast at on election held for that purpose, except, however, that in onv calen- dar year the Citv mav issue bonds pursuant to this char-ter ordinance without on election, as follows: (1) o maximum of $1,000,000 under each of project cate- gories A through E ; (2) o maximum of $2,000,000 under each of prefect cate-gorv F; (3) o maximum of $12,500,000 under eoch of prolect cate- gorv G; (4) a maximum of $7,000,000 under each of prolect cate-gory H; and (S) o maximum of $4,000,000 under each of project cole- gorv I. Pagc3of3 Section 3. Repealer. Subiect to the effectiveness of this Charter Ordinance, Charter Ordinance No. 39 of the City is hereby repealed. section 4. SeverabilitY. If any provision or section of this Charter Ordinance is deemed or ruled unconsTitu-tionol or otherwise Illegal or invalid bY any court of competent lurisdlction, such illegality or invalidity shall not affect any other provi- sion of this Charier Ordi- nance. In such instance, this Charter Ordinance shall be construed and enforced as if such illegal or invalid provi- sion had not been contained herein. Section s. Effective Dote. This Charter Ordinance shall be published once o week for two consecutive weeks in the official Citv newspaper, and sholl take effect sh<tY-one (61) dovs ofter final publica- tion, unless a petition signed by o number of electors of the City eauol to not less than ten percent (10%) of the number of electors who voted at the lost preceding regular Cltv election shall be filed i11 the office of the Clerk, demanding that this Charter Ordinance be submitted to a vote of the electors, in which event this Charter Ordinance shall take effect when approved by a maioritv of the electors voting at on election held for such purpose. PASSED with at least a two- thirds (2/3) vote of the entire governing bodv of the City of Salina, Kansas, on Mav 9, 2022 and APPROVED AND SIGNED bY the Mover. (SEAL) Trent W. Davis, M .D .• Mayor ATTEST: JoVonna A. Rutherford, Citv Clerk #728366-4 5/13, sno12022 Cedar Ridge Addition, Phase 2 Total Cost Item# Item Quantity Unit Unit Cost Extension 1 Mobilization 1 LS 28,000.00 28,000.00 2 Clearing and Grubbing 1 LS 8,000.00 8,000.00 3 Construction Staking 1 LS 5,000.00 5,000.00 4 Traffic Control 1 LS 2,000.00 2,000.00 5 Erosion Control 1 LS 20,000.00 20,000.00 6 Construction Entrance 45 Ton 50.00 2,250.00 7 Seeding 1 LS 8,000.00 8,000.00 8 Common Excavation 1,401 CY 6.00 8,406.00 9 Embankment 1,640 CY 3.00 4,920.00 10 Concrete Pavement, 6" 3,248 SY 50.00 162,400.00 11 Subgrade Modification, 6" 4,009 SY 7.00 28,063.00 12 Curb & Gutter Type I 1,869 LF 20.00 37,380.00 13 Curb & Gutter Type III 51 LF 20.00 1,020.00 14 Sidewalk, 4" 11 SY 50.00 550.00 15 Sidewalk Ramp, Type I 7 Ea 550.00 3,850.00 16 Curb Inlet 4 Ea 10,000.00 40,000.00 17 Storm Sewer, RCP, 18" 498 LF 40.00 19,920.00 18 End Section, RC, 18" 1 Ea 1,500.00 1,500.00 19 Water Main, 6" 311 LF 25.00 7,775.00 20 Water Main, 8" 643 LF 33.00 21,219.00 21 Long Service Line, l" 5 Ea 850.00 4,250.00 22 Long Service Line, 1 ½" 1 Ea 850.00 850.00 23 Short Service Line, 1" 6 Ea 160.00 960.00 24 Fire Hydrant Assembly 2 Ea 4,500.00 9,000.00 25 Water Line Fittings 1 LS 20,000.00 20,000.00 26 Connect to Existing Water Main 2 Ea 4,000.00 8,000.00 27 Connect to Existing Sewer Line 1 Ea 500.00 500.00 28 Sanitary Sewer, 8" 901 LF 32.00 28,832.00 29 Sanitary Sewer, 4" 581 LF 26.00 15,106.00 30 Sanitary Sewer Manhole, 4' 7 Ea 9,000.00 63,000.00 31 Extra Depth Manhole 20 LF 250.00 5,000.00 32 Sanitary Sewer Tee 13 Ea 160.00 2,080.00 Subtotal $567,831.00 Developer's Engineering 25,000.00 Contingency (10%) 56,783.10 City Expenses 12-6a01 (d) (5%) 28,391.55 Interest, Bonding & Issue 22,713.24 Total $700,718.89 PETITION 4406 TO THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: We, the undersigned, owners of record of property located within the City of Salina, Kansas (the "City") and being the ownen of 100% of the area liable for assessment set forth below, do hereby respectively request that the Governing Body of the City create and designate an improvement district for the purpose of making certain improvements in the manner provided by K.S.A. 12-6a01, et seq. 1. The general nature of the proposed improvements are as follows: The curb, gutter, pavement, and grading for approximately 610 lineal feet of Timber Ridge Drive, 155 lineal feet of Timber Ridge Place, and 152 lineal feet of Timber Ridge Court (the "Street Improvements"). The installation of approximately 498 lineal feet of storm sewer pipe, inlets, manholes and all appurtenances thereto (the "Storm Drainage Improvements"). The installation of approximately 311 lineal feet of six-inch water main, 643 lineal feet of eight-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"). The installation of approximately 901 lineal feet of eight-inch sanitary sewer main, sel.Vice connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). (collectively, the "Improvements"). 2. The estimated or probable cost of the Improvements is: Seven hundred three thousand six hundred ninety-three dollars and eighty-nine cents ($703,693.89). 3. The extent of the proposed improvement district to be assessed is: Block 1, Lots 1 through 7, and Block 4, Lots 1 through 6, all in the Plat of Cedar Ridge Addition Including a Replat of Lot 1, Block 6, of Mariposa Blocks 1-6 an Addition to the City of Salina, Saline County, Kansas. (the "Improvement District"). 1 4. The proposed method of assessment shall be: Each platted lot in the Improvement District shall be assessed equally per lot. In the event all or part of the lots or parcels in the proposed Improvement District are replatted before assessments have been levied, the assessments against the replatted area shall be recalculated on the basis of the method of assessment set forth herein. Where the ownership of a single lot is or may be divided into two or more parcels, the assessment to the lot so divided shall be assessed to each ownership or parcel on a square foot basis. 5. The proposed apportfonment of cost between the Improvement District and the City at Large is: One hundred percent (100%) of the total cost of the Improvements shall be assessed to the Improvement District and zero percent (0%) shall be paid by the City at Large. The signers of this Petition hereby request that the Improvements be made without notice and hearing as required by K.S.A. 12-6a04(a). NAMES MAY NOT BE WITHDRAWN FROM THE PETITION BY THE SIGNERS THEREOF AFTER THE GOVERNING BODY COMMENCES CONSIDERATION OF THE PETITION OR LATER THAN SEVEN (7) DAYS AFTER FILING OF THE PETITION \\1TH THE CITY CLERK, WHICHEVER OCCURS FIRST. Each signer of this Petition certifies1• under oath, that: (a) The petitioner and its principals do not have a financial interest in any real estate located in the city which is subject to delinquent special assessments or ad valorem taxes as of the date of the.petition; (b) The petitioner and its principals do not have a financial interest in any real estate located in the State of Kansas on which special assessments or ad valorem taxes were delinquent for a period of more than one year during the five-year period immediately preceding the date of the petition; (c) The petitioner and its principals are not in breach of any outstanding contractual obligations owed to the city as of the date of the petition; and (d) The petitioner and its principals have not been convicted of a felony financial crime, including but not limited to fraud or embezzlement, during the five-year period immediately preceding the date of the petition. 1 These certifications are only required to be made by petitioners for special assessment financing in new developments. 2 .,, .,, z It I CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS September 27, 2021 4:00 p.m . The City Commission convened at 2:30 p.m. in Room 107, City-County Building, for a study session which consisted of a presentation on the Jerry Ivey Park water feature. Mayor Hodges asked the Clerk for verification that notice had been sent for today's City Commission meeting. The Clerk replied yes. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City- County Building. A roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Melissa Rose Hodges (presiding), Michael L. Hoppock, Aaron Peck and Karl Ryan. Also present: Mike Schrage, City Manager, Jacob Wood, Deputy City Manager; Greg Bengtson, City Attorney; and Jo Vonna A. Rutherford, City Clerk. Mike Schrage, City Manager, briefly explained certain corrections and revisions to the current agenda items. AWARDS AND PROCLAMA tIONS None. CITIZENS FORUM None. PUBLIC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME (5.1) Public Hearing regarding issuance of Taxable Multi-Family Housing Revenue Bonds l (Magnolia Pointe). 1 Mayor Hodges opened the public hearing. Lauren Driscoll, Director of Community and Development Services, explained the request, fiscal impact and action options. Ms. Driscoll also presented Resolution No. 21-7991 detennining the advisability of issuing Taxable Multi-Family Housing Revenue Bonds for the purpose of financing the acquisition, construction and equipping of a commercial facility to be located in the city and authorizing execution of related documents with possible amendments. A discussion followed regarding action to be taken. Tom Huston, Lincoln, Nebraska, on behalf of APR Salina, a company that has been fonned to !, 1 I' II undertake the project in Salina and as general counsel for Perry Reid Properties based in Lincoln, I Nebraska. Mr. Huston provided information on the projects currently under construction by the 1 company as well as existing properties that are owned by the company. Mr. Huston then addressed l the current industrial revenue bond item in front of the Governing Body and stated it was an efficient I tool for the development which they hoped to begin construction on as soon as November as there is an urgent need for housing in Salina. A discussion ensued related to rental rates and costs, anticipated occupancy timelinc as construction phases are completed, investments in and maintenance of current properties the company owns in Salina, i.e. Chapel Ridge. Erk Brown, President and CEO of the Salina Area Chamber of Commerce voiced support of the project and developer. Page 1 -, 1111111111111111111111111111111111111111111111111111 rllll 11111111111111111111111 ,~t=;;;.... REBECCA SEEMAN tf%~:,::·;;;,\~\REGISTER OF DEEDS SALINE COUNTY KANSAS {:_\,_;/;.",):}Book:1401 Page: 560-563 \,.:/,.·•;!./ Receipt #: 1375. 24 C-.. I 1/ Recording Fee: $0.00 ·~·~ Pages Recorded: 4 l'Jf'l Date Recorded: 9/28/2021 3:53:15 PM Type of Document __ _llR~egsowluJJ;tlQio~n _________________ _ Total Recording Fees _ __20,L.:.0UJ0J_ __________________ _ Return Address CITY OF SALINA ROOM 206 JOVANNA Page J o[J RESOLUTION NUMBER 21-7983 A RESOLUTION SETTING FORTH FINDINGS AND DETERMINATIONS OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS ON THE ADVIS- ABILITY OF AND AUTHO- RIZING THE CONSTRUC- TION OF CERTAIN IMPROVEMENTS PURSUANT TO K.S.A. 12-6a01 et seq. WHERE AS, a petition was flied with the City Clerk for the City of Salina, Kansas (the "City") on September 21, 2021, proposing certain improvements pursuant to K.S.A. 12-6001 et sea. (the "Petition"); and WHEREAS, the Petition sets forth: (a) the general nature of the proposed improve- ments; (b) the estimated or probable cast of the proposed improvements; (cl the extent of the proposed improvement district to be assessed for the cost of the proposed improvements; (d) the proposed method of assessment; (e) the proposed apportionment of the cost between the improvement district and the City at large; and (f} a request that such improve- ments be made without notice and hearing as required by K.S.A. 12-600-4(0); and WHEREAS, the owners of record of 100% the property Ii able to be assessed under the Petition have signed the Petition; and WHEREAS, no signatures have been withdrawn from the petition before the Governing Body began consideration of the Petition; and WHEREAS, K.S.A. 12-600-4 provides that the Governing Body may authorize and order public improvements without notice and hearing after a sufficient petition has been filed; and WHEREAS, the Governing Body hos reviewed and considered the Preliminary Engineering Estimate and Feasibility Report prepared by the City Engineer and agrees with the conclusions set forth therein. NOW THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALi NA, KANSAS, AS FOLLOWS: Section l. The Governing Body hereby finds that the Petition ls sufficient, and further finds and determines that it is necessary and advisable to make the follow- ing improvements: (a) The nature of the improvements are as follows: The curb, gutter, pavement, and grading tor approxi- mately 610 lineal feet of Timber Ridge Drive, 155 lineal feet of Timber Ridge Place, and 152 lineal feet of Timber Ridge Court (the "Street Improvements"). The installation of approxi- mately ~98 lineal feet ot storm sewer pipe, inlets, manholes and all appurte- nances thereto (the "Storm Drainage Improvements"). The installation of approxi- mately 311 lineal feet of six- inch water main, 643 lineal feet of eight-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appur- tenances thereto (the "Water System l mprovemen!s"). Page2of3 The installation of approxi- mately 901 lineal feet of eight-Inch sanitary sewer main, service connections far sewer fines, manholes, and all oppurtenc:mces thereto (the "Sanitary Sewer Improvements"). (collectively, the "Improve- ments"). Cb) The estimated cost of the Improvements is: Seven hundred three thou-sand six hundred ninety- three dollars and eighty-nine cents ($703,693.89). (c) The extent of the improvement district to be assessed are: Block l, Lots l through 7, and Block 4, Lots l through 6, all in the Plat of Cedar Ridge Addition Including o Repfat of Lot l, Block 6, of MariPOSo Blocks 1-6 on Addi· tian to the City of Solina, Saline County, Kansas. (the "Improvement District"). (d) The OPPortionment of cost between the Improve- ment District and the city at large is: One hundred percent (100%) of the total cost of the Improvements shall be assessed to the Improvement District and zero percent (0%) Sholl be paid by the Citv at Large. Ce) The method of assess- ment against Property within the Improvement District shall be: Each platted lot in the Improvement District shall be assessed equally per lot. f n the event all or part of the lots or parcels In the proposed f mpravement District are replotted before assessments have been levied, the assessments against the replotted area shall be recalculated on the bas Is of the method of assessment set forth herein. Where the ownership of a single lot is or may be divided Into two or more parcels, the assessment ta the lot so divided shall be assessed to each ownership or parcel on a square foot basis. Section 2. The Governing Body hereby declares that the Improvements described In this Resolution are neces- sary, ond authorizes them to be mode in accordance with the Petition and the findings set forth in this Resolution, and further authorizes the levying of assessments and the issuance of bonds there-for, oil in accordance with K.S.A. 12-6001 et seq .• Section 3. The Citv expects to make copitaf exPenditures from and after the date of this Resolutlon in connection with the Improvements described herein, and Intends to reimburse itself for such expenditures with the proceeds of one or more series of general obligation bonds and temparory notes (collectively, the "Bonds") of the City in the maximum Princlpof amount of $703,693.89. The Bands may be issued to reimburse expenditures mode on or after the dote which is 60 days before the date of this Resolution, pursuant to Trea- sury Regufotion 1.150-2. Section 5. The City Clerk shall file a certified copy of this Resolution with the Register of Deeds of Saline County, Konsos. Section 6. This Resolution shall take effect ofter its adaption and publication once in the official city news- paper. ADOPTED AND PASSED this 27th dcy of September, 2021 Melissa Rose Hodges, Mayor JoVonna Rutherford, City Clerk EXCERPT OF MINUTES OF A MEETING OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HELD ON APRIL 24, 2023 Gilmore & Bell, P.C. 04/04/2023 The Commission met in regular session at the usual meeting place in the City at 4:00 P.M., the Mayor presided and the following members of the Commission being present and participating, to-wit: Mayor MICHAEL L. HOPPOCK, Commissioners TRENT W. DAVIS, M.D., GREG LENKIEWICZ, BILL LONGBINE and KARL RYAN Absent: None. The Mayor declared that a quorum was present and called the meeting to order. ************** (Other Proceedings) There were presented certain documents relating to the following described improvements previously authorized by the governing body: Cedar Ridge Addition, Phase 2 -Utility, Street and Drainage Project Resolution No. 21-7983 The curb, gutter, pavement, and grading for approximately 610 lineal feet of Timber Ridge Drive, 155 lineal feet of Timber Ridge Place, and 152 lineal feet of Timber Ridge Court (the "Street Improvements"). The installation of approximately 498 lineal feet of storm sewer pipe, inlets, manholes and all appurtenances thereto (the "Storm Drainage Improvements"). The installation of approximately 311 lineal feet of six-inch water main, 643 lineal feet of eight-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"). The installation of approximately 901 lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). (collectively, the "Improvements"). The documents presented are as follows: Exhibit A -Statement of Final Costs Exhibit B -Assessment Roll Certification Exhibit C -Notice of Public Hearing Exhibit D -Form of Notice of Hearing and Statement of Cost Proposed to be Assessed. ************** 600596.20228\Assessments (Cedar Ridge Addition, Phase 2) There was presented for first reading an Ordinance entitled: AN ORDINANCE LEVYING SPECIAL ASSESSMENTS ON CERTAIN PROPERTY TO PAY THE COSTS OF INTERNAL IMPROVEMENTS IN THE CITY OF SALINA, KANSAS, AS PREVIOUSLY AUTHORIZED BY RESOLUTION NO. 21-7983 OF THE CITY; AND PROVIDING FOR THE COLLECTION OF SUCH SPECIAL ASSESSMENTS. Commissioner BILL LONGBINE moved that Exhibits A -D be approved in substantially the form presented with such administrative or clerical changes as may be necessary and the Ordinance be approved on first reading. The motion was seconded by Commissioner GREG LENKIEWICZ. The Ordinance was duly read and considered, and upon being put, the motion for approval was carried by the vote of the governing body as follows: Yea: MICHAEL L. HOPPOCK, TRENT W. DAVIS, M.D., GREG LENKIEWICZ, BILL LONGBINE and KARL RY AN Nay: NONE. ************** (Other Proceedings) [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20228\Assessments (Cedar Ridge Addition, Phase 2) 2 EXHIBIT A CITY OF SALINA, KANSAS CEDAR RIDGE ADDITION, PHASE 2 -UTILITY, STREET AND DRAINAGE RESOLUTION NO. 21-7983 STATEMENT OF FINAL COSTS CONSTRUCTION & ENGINEERING $618,383.53 CITY COSTS (5%) 30,919.18 COSTS OF ISSUANCE, NOTE INTEREST 24,735.34 TOTAL $674,038.05 600596.20228\Assessments (Cedar Ridge Addition, Phase 2) A-1 EXHIBITB ASSESSMENT ROLL CERTIFICATION The undersigned having been designated by the City of Salina, Kansas (the "City"), to determine the amounts of the respective assessments and to prepare the proposed Assessment Roll therefor in connection with certain internal improvements previously authorized by the governing body hereby reports that each and all of the respective assessments have been determined to be as shown on the Schedule(s) attached hereto and made a part hereof by reference as though fully set out herein. Dated April 24, 2023. 600596.20224\Assessments (Cedar Ridge Addition, Phase 2) B-1 SCHEDULE I CEDAR RIDGE ADDITION, PHASE 2 -UTILITY, STREET AND DRAINAGE RESOLUTION NO. 21-7983 Description of Property Amount of Proposed Assessment Lot 1 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 2 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 3 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 4 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 5 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 6 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 7 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 1 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 2 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 3 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 4 Block 4, Cedar Ridge Addition. City of Salina, Saline County, Kansas $51,849.08 Lot 5 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 6 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 600596.20228\Assessments (Cedar Ridge Addition, Phase 2) S-1 EXHIBITC (Published in the Salina Journal on April 27, 2023) NOTICE OF PUBLIC HEARING TO: RESIDENTS OF THE CITY OF SALINA, KANSAS You and each of you are hereby notified that the governing body of the City of Salina, Kansas ( the "City") will meet for the purpose of holding a public hearing, as provided by K.S.A. 12-6a01 et seq., at City-County Building, 300 W. Ash Street, Salina, KS 67401, in the City, on May 15, 2023, or as soon thereafter as may be heard, at 4:00 P.M .. The public hearing is for the purpose of hearing any and all oral or written objections to proposed assessments in connection with the following described improvements: Cedar Ridge Addition, Phase 2 -Utility, Street and Drainage Project Resolution No. 21-7983 The curb, gutter, pavement, and grading for approximately 610 lineal feet of Timber Ridge Drive, 155 lineal feet of Timber Ridge Place, and 152 lineal feet of Timber Ridge Court (the "Street Improvements"). The installation of approximately 498 lineal feet of storm sewer pipe, inlets, manholes and all appurtenances thereto (the "Storm Drainage Improvements"). The installation of approximately 311 lineal feet of six-inch water main, 643 lineal feet of eight- inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"). The installation of approximately 901 lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). (collectively, the "Improvements"). Property Description: Block 1, Lots 1 through 7, and Block 4, Lots 1 through 6, all in the Plat of Cedar Ridge Addition Including a Replat of Lot 1, Block 6, of Mariposa Blocks 1-6 an Addition to the City of Salina, Saline County, Kansas. Cost of Improvements: $674,038.05. 100% to be assessed against the Improvement District and 0% to be paid by the City-at-large An Assessment Roll prepared in accordance with the referenced Resolution(s) approved by the governing body is on file in the Office of the City Clerk and may be examined by any interested party. At the conclusion of the public hearing, the governing body will consider an Ordinance levying such special assessments. DATED April 24, 2023. Isl Jo Vonna Rutherford, City Clerk 600596.20228\Assessments (Cedar Ridge Addition, Phase 2) C-1 Property Owner: EXHIBITD NOTICE OF HEARING AND STATEMENT OF COST PROPOSED TO BE ASSESSED April 27, 2023 Salina, Kansas You are hereby notified, as owner of record of the property described on Schedule I attached hereto, that there is proposed to be assessed against the property, certain amounts for the costs of certain internal improvements (the "Improvements") previously authorized by the governing body of the City of Salina, Kansas ( the "City"). The description of the Improvements, the resolution number authorizing the same and the proposed amount of assessment are set forth on Schedule I attached hereto. You are hereby further notified that the governing body of the City will meet on May 15, 2023, at 4:00 P.M., at City-County Building, 300 W. Ash Street, Salina, KS 67401, for the purpose of considering the proposed assessments. The proposed Assessment Roll is on file in my office for public inspection. WRITTEN OR ORAL OBJECTIONS TO THE PROPOSED ASSESSMENTS WILL BE CONSIDERED AT THE PUBLIC HEARING. At the conclusion of the public hearing, the governing body of the City will consider an ordinance levying such special assessments. A subsequent Notice of Assessment will be mailed to affected property owners at that time indicating that each property owner may pay the assessment in whole or in part within thirty (30) days from the date of such notice. Any amount not so paid within the time period prescribed will be collected in 20 annual installments, together with interest on such amounts remaining unpaid at a rate not exceeding the maximum rate therefor as prescribed by KS.A. 12-6a01 et seq. Jo Vonna Rutherford, City Clerk 600596.20228\Assessments (Cedar Ridge Addition, Phase 2) D-1 SCHEDULE I CEDAR RIDGE ADDITION, PHASE 2 -UTILITY, STREET AND DRAINAGE RESOLUTION NO. 21-7983 Description of Property Amount of Proposed Assessment Lot 1 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 2 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 3 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 4 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 5 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 6 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 7 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 1 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 2 Block 4, Cedar Ridge Addition, Citv of Salina, Saline County, Kansas $51,849.08 Lot 3 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 4 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 5 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 6 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 600596.20228\Assessments (Cedar Ridge Addition, Phase 2) S-1 Department of Finance & Administration City of Debbie Pack, Director ~ 300 West Ash Street, Suite 206 ~ P.O. Box 736 Salina, Kansas 67402-0736 . S :alina NOTICE OF HEARING AND TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 E-mail: debbie.pack@salina.org Website: www.salina-ks.gov STATEMENT OF COST PROPOSED TO BE ASSESSED Cedar Ridge Development, LLC 1531 N. Burma Road Salina, KS 67401 Property Owner: April 27, 2023 Salina, Kansas You are hereby notified, as owner of record of the property described on Schedule I attached hereto, that there is proposed to be assessed against the property, certain amounts for the costs of certain internal improvements (the "Improvements") previously authorized by the governing body of the City of Salina, Kansas (the "City"). The description of the Improvements, the resolution number authorizing the same and the proposed amount of assessment are set forth on Schedule I attached hereto. You are hereby further notified that the governing body of the City will meet on May 15, 2023, at 4:00 P.M., at City-County Building, 300 W. Ash Street, Salina, KS 67401, for the purpose of considering the proposed assessments. The proposed Assessment Roll is on file in my office for public inspection. WRITTEN OR ORAL OBJECTIONS TO THE PROPOSED ASSESSMENTS WIU BE CONSIDERED AT THE PUBLIC HEARING. At the conclusion of the public hearing, the governing body of the City will consider an ordinance levying such special assessments. A subsequent Notice of Assessment will be mailed to affected property owners at that time indicating that each property owner may pay the assessment in whole or in part within thirty (30) days from U1e date of such notice. Any amount not so paid within the time period prescribed will be collected in 20 annual installments, together with interest on such amounts remaining unpaid at a rate not exceeding the maximum rate therefor as prescribed by K.S.A. 12-6a01 et seq. JoVonna Rutherford, City Clerk SCHEDULE/ CEDAR RIDGE ADDITION, PHASE 2 -UTILITY, STREET AND DRAINAGE RESOLUTION NO. 21-7983 Description of Property Amount of Proposed Assessment Lot 1 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 2 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 3 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 4 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 5 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 6 Block 1, Cedar Ridge Addition, City of Salina Saline County, Kansas $51,849.08 Lot 7 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 1 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 2 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 3 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 4 Block 4, Cedar Ridge Addition, Citv of Salina, Saline County, Kansas $51,849.08 Lot 5 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 6 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 EXCERPT OF MINUTES OF A MEETING OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HELD ON MAY 15, 2023 Gilmore & Bell, P.C. 04/04/2023 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 MICHAEL L. HOPPOCK, Commissioners TRENT W. DA VIS, M.D., GREG LENKIEWICZ, BILL LONGBINE and KARL RY AN Absent: None. The Mayor declared that a quorum was present and called the meeting to order. ************** (Other Proceedings) The Mayor opened a public hearing for the purpose of receiving written or oral objections and considering proposed assessments for the costs of certain internal improvements previously authorized by the governing body of the City. It was determined by the governing body that notice of the public hearing was duly published and mailed in accordance with KS.A. 12-6a01 et seq. Thereafter, the Mayor adjourned the public hearing. An Ordinance was presented entitled: AN ORDINANCE LEVYING SPECIAL ASSESSMENTS ON CERTAIN PROPERTY TO PAY THE COSTS OF INTERNAL IMPROVEMENTS IN THE CITY OF SALINA, KANSAS, AS PREVIOUSLY AUTHORIZED BY RESOLUTION NO. 21-7983 OF THE CITY; AND PROVIDING FOR THE COLLECTION OF SUCH SPECIAL ASSESSMENTS. The Ordinance was considered and discussed, the Ordinance having been previously approved on first reading and on motion of CommissionerTRENTW. DAVIS, M.D., seconded by Commissioner KARL RY AN, the Ordinance was passed by the following vote: Yea: MICHAEL L. HOPPOCK, TRENT W. DAVIS, M.D., GREG LENKIEWICZ, BILL LONGBINE and KARL RY AN. Nay: NONE. The Mayor declared the Ordinance duly passed and the Ordinance was then numbered Ordinance No. 23-11151, was signed by the Mayor and attested by the City Clerk and the Ordinance or a summary thereof was directed to be published one time in the official newspaper of the City. The City Clerk was further directed to cause a Notice of Assessment to be mailed to each and all of the known property owners affected thereby on the same date that the Ordinance or a summary thereof is published. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20224\Assessments (Cedar Ridge Addition, Phase 2) CERTIFICATE I h~i,:eby 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 minute~ of such proceedings are on file in my office. (SEAL) ·············•. /~t1,.GANIZ£~•• • ._ \ 1870 ; ·.. .. ..... · .. .. ·•···· ···•·· 600596.20224\Assessments (Cedar Ridge Addition, Phase 2) (Signature page to Excerpt of Minutes) ORDINANCE NO. 23-11151 Gilmore & Bell, P.C. 04/04/2023 AN ORDINANCE LEVYING SPECIAL ASSESSMENTS ON CERTAIN PROPERTY TO PAY THE COSTS OF INTERNAL IMPROVEMENTS IN THE CITY OF SALINA, KANSAS, AS PREVIOUSLY AUTHORIZED BY RESOLUTION NO. 21-7983 OF THE CITY; AND PROVIDING FOR THE COLLECTION OF SUCH SPECIAL ASSESSMENTS. WHEREAS, the governing body of the City of Salina, Kansas (the "City") has previously authorized certain internal improvements (the "Improvements") to be constructed pursuant to K.S.A. 12- 6a01 et seq. (the "Act"); and WHEREAS, the governing body has conducted a public hearing in accordance with the Act and desires to levy assessments on certain property benefited by the construction of the Improvements. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: Section 1. Levy of Assessments. For the purpose of paying the costs of the following described Improvements: Cedar Ridge Addition, Phase 2 -Utility, Street and Drainage Project Resolution No. 21-7983 The curb, gutter, pavement, and grading for approximately 610 lineal feet of Timber Ridge Drive, 155 lineal feet of Timber Ridge Place, and 152 lineal feet of Timber Ridge Court (the "Street Improvements"). The installation of approximately 498 lineal feet of storm sewer pipe, inlets, manholes and all appurtenances thereto (the "Storm Drainage Improvements"). The installation of approximately 311 lineal feet of six-inch water main, 643 lineal feet of eight- inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"). The installation of approximately 901 lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). (collectively, the "Improvements"). there are hereby levied and assessed the amounts (with such clerical or administrative amendments thereto as may be approved by the City Attorney) against the property described on Exhibit A attached hereto. Section 2. Payment of Assessments. The amounts so levied and assessed in Section I hereof shall be due and payable from and after the date of publication of this Ordinance. Such amounts may be 600596.20224\Assessments (Cedar Ridge Addition, Phase 2) paid in whole or in part within thirty (30) days from the date of publication of this Ordinance or a summary thereof. Section 3. Notification. The City Clerk shall notify the owners of the properties described in Exhibit A attached hereto (insofar as known to the City Clerk) of the amounts of their respective assessments. The notice shall also state that unless such assessments are paid within thirty (30) days from the date of publication of this Ordinance or a summary thereof, bonds will be issued therefor, and the amount of such assessment will be collected in installments with interest. Section 4. Certification. Any amount of special assessments not paid within the time prescribed in Section 2 hereof shall be certified by the City Clerk to the Clerk of Saline County, Kansas, in the same manner and at the same time as other taxes are certified and will be collected in 20 annual installments, together with interest on such amounts at a rate not exceeding the maximum rate therefor as prescribed by the Act. Interest on the assessed amount remaining unpaid between the effective date of this Ordinance and the date the first installment is payable, but not less than the amount of interest due during the coming year on any outstanding bonds issued to finance the Improvements, shall be added to the first installment. The interest for one year on all unpaid installments shall be added to each subsequent installment until paid. Section 5. Effective Date. This Ordinance shall take effect and be in force from and after its passage, approval and publication of the Ordinance or a summary thereof once in the official City newspaper. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20224\Assessments (Cedar Ridge Addition, Phase 2) 2 EXHIBIT A-I CEDAR RIDGE ADDITION, PHASE 2/UTILITY, STREET AND DRAINAGE RESOLUTION NO. 21-7983 Description of Property Amount of Assessment Lot 1 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 2 Block 1, Cedar Rid.e.e Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 3 Block 1, Cedar Rid e:e Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 4 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 5 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 6 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 7 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 1 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 2 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 3 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 4 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 5 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 6 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 600596.20224\Assessments (Cedar Ridge Addition, Phase 2) A-1 CERTIFICATE OF MAILING STATE OF KANSAS ) ) ss: COUNTY OF SALINE ) The undersigned, Director of Finance/ Administration, does hereby certify that on May 19, 2023, the date on which Ordinance No. 23-11151 (the "Ordinance") of the City was published, I caused to be mailed to the owners of the properties liable for the assessments set out in the Ordinance, at their last known post office addresses, a Notice of Assessment showing the respective assessments levied against their properties and stating the manner in which the assessments will be collected. ~ sample copy of the fonn of such Notice of Assessment is attached hereto. (Seal) [attach sample copy of form] 600596.20224\Assessments (Cedar Ridge Addition, Phase 2) NOTICE OF ASSESSMENT May 19, 2023 City of Salina, Kansas Property Owner: You are hereby notified, as owner of record of the property described on Schedule I attached hereto, that pursuant to Ordinance No. 23-11151 (the "Ordinance") of the City of Salina, Kansas (the "City") there has been assessed against the property the costs of certain internal improvements previously authorized by the governing body of the City (the "Improvements"). The description of the Improvements, the resolution number authorizing the same and the amount of assessment are set forth on Schedule I attached hereto. You may pay this assessment in whole or in part to the City Treasurer of the City within thirty (30) days from the date hereof; and if the amount is not paid within the time period, bonds will be issued therefor, and the balance of such assessment will be collected in 20 annual installments, together with interest on such amounts remaining unpaid at a rate not exceeding the maximum rate therefor as prescribed by K.S.A. 12-6a01 et seq. Interest accruing between the date set forth above and the date the first installment is payable, but not less than the amount of interest due during the coming year on any outstanding bonds issued to finance the Improvements, shall be added to the first installment. The interest for one year on all unpaid installments shall be added to each subsequent installment until paid. Debbie Pack, Director of Finance/ Administration 600596.20224\Assessments (Cedar Ridge Addition, Phase 2) SCHEDULE I CEDAR RIDGE ADDITION, PHASE 2 -UTILITY, STREET AND DRAINAGE RESOLUTION NO. 21-7983 Description of Property Amount of Assessment Lot 1 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 2 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 3 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 4 Block 1, Cedar Ridge Addition, Citv of Salina, Saline County, Kansas $51,849.08 Lot 5 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 6 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 7 Block 1, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 1 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 2 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 3 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 4 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 5 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 Lot 6 Block 4, Cedar Ridge Addition, City of Salina, Saline County, Kansas $51,849.08 600596.20224\Assessments (Cedar Ridge Addition, Phase 2) S-1 EXCERPT OF MINUTES OF A MEETING OF THE CITY COMMISSION OF THE CITY OF SALINA, KANSAS HELD ON JUNE 26, 2023 Gilmore & Bell, P.C. 06/12/2023 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 MICHAEL L. HOPPOCK, Commissioners TRENT W. DA VIS, M.D., GREG LENKIEWICZ, BILL LONGBINE and KARL RY AN Absent: None. The Mayor declared that a quorum was present and called the meeting to order. ************** (Other Proceedings) The matter of providing for the offering for sale of General Obligation Internal Improvement Bonds, Series 2023-A, came on for consideration and was discussed. Commissioner KARL RY AN presented and moved the adoption of a Resolution entitled: A RESOLUTION AUTHORIZING THE OFFERING FOR SALE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2023-A, OF THE CITY OF SALINA, KANSAS. Commissioner TRENT W. DA VIS, M.D. seconded the motion to adopt the Resolution. Thereupon, the Resolution was read and considered, and, the question being put to a roll call vote, the vote thereon was as follows: Yea: MICHAEL L. HOPPOCK, TRENT W. DAVIS, M.D., GREG LENKIEWICZ, BILL LONGBINE and KARL RY AN Nay: NONE. The Mayor declared the Resolution duly adopted by the Governing Body and the Clerk designated the same Resolution No. 23-8135. ************** (Other Proceedings) [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20228\SALEDOCS Gilmore & Bell, P.C. 06/12/2023 RESOLUTION NO. 23-8135 A RESOLUTION AUTHORIZING THE OFFERING FOR SALE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2023-A, OF THE CITY OF SALINA, KANSAS. WHEREAS, the City of Salina, Kansas (the "Issuer"), has previously authorized certain improvements described as follows (collectively the "Improvements"): Project Description Cedar Ridge Addition -Phase 2 Facility Improvements -Bill Burke Park Total: Ord./Res. No. 21-7983 22-8035 Authority (K.S.A.) K.S.A. 12-6a01 et seq., K.S.A. 13-1024a/Ch. Ord. No. 41 Amount $ 674,038.05 4,000,000.00 $4,674,038.05 WHEREAS, the Issuer proposes to issue its general obligation bonds to pay a portion of the costs of the Improvements; and WHEREAS, the City Commission of the Issuer (the "Governing Body") has selected the firm of Stifel, Nicolaus & Company, Incorporated, Kansas City, Missouri (the "Municipal Advisor"), as municipal advisor for one or more series of general obligation bonds of the Issuer to be issued in order to provide funds to permanently finance the Improvements; and WHEREAS, the Issuer desires to authorize the Municipal Advisor to proceed with the offering for sale of said general obligation bonds and related activities; and WHEREAS, one of the duties and responsibilities of the Issuer is to prepare and distribute a preliminary official statement relating to said general obligation bonds; and WHEREAS, the Issuer desires to authorize the Municipal Advisor and Gilmore & Bell, P.C., Wichita, Kansas, the Issuer's bond counsel ("Bond Counsel"), in conjunction with the Clerk and other officers and representatives of the Issuer to proceed with the preparation and distribution of a preliminary official statement and notice of bond sale and to authorize the distribution thereof and all other preliminary action necessary to sell said general obligation bonds. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. There is hereby authorized to be offered for sale the Issuer's General Obligation Internal Improvement Bonds, Series 2023-A (the "Bonds") described in the Notice of Bond Sale, which is hereby approved in substantially the form presented to the Governing Body this date (the "Notice of Bond Sale"). All proposals for the purchase of the Bonds shall be delivered to the Governing Body at its meeting to be held on the sale date referenced in the Notice of Bond Sale, at which meeting the Governing Body shall review such bids and award the sale of the Bonds or reject all proposals. 600596.20228\SALEDOCS Section 2. The Mayor, Clerk and Director of Finance in conjunction with the Municipal Advisor and Bond Counsel are hereby authorized to cause to be prepared 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. Section 3. The Clerk, in conjunction with the Municipal Advisor and Bond Counsel, is hereby authorized and directed to give notice of said bond sale by publishing a summary of the Notice of Bond Sale not less than 6 days before the date of the bond sale in a newspaper of general circulation in Saline County, Kansas, and the Kansas Register and by distributing copies of the Notice of Bond Sale and Preliminary Official Statement to prospective purchasers of the Bonds. Section 4. For the purpose of enabling the purchaser of the Bonds (the "Purchaser") to comply with the requirements of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"), the Mayor, Clerk, City Manager, Director of Finance or other appropriate officers of the Issuer are hereby authorized: (a) to approve the form of the Preliminary Official Statement and to execute the "Certificate Deeming Preliminary Official Statement Final" in substantially the form attached hereto as Exhibit A as approval of the Preiiminary Official Statement, such official's signature thereon being conclusive evidence of such official's and the Issuer's approval thereof; (b) covenant to provide continuous secondary market disclosure by annually transmitting certain financial information and operating data and other information necessary to comply with the Rule to the Municipal Securities Rulemaking Board; and ( c) take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchaser to comply with the requirement of the Rule. Section 5. The Issuer agrees to provide to the Purchaser within seven business days of the date of the sale of Bonds or within sufficient time to accompany any confirmation that requests payment from any customer of the Purchaser, whichever is earlier, sufficient copies of the final Official Statement to enable the Purchaser to comply with the requirements of the Rule and with the requirements of Rule G-32 of the Municipal Securities Rulemaking Board. Section 6. The Mayor, Clerk, City Manager, Director of Finance and the other officers and representatives of the Issuer, the Municipal Advisor and Bond Counsel are hereby authorized and directed to take such other action as may be necessary to carry out the sale of the Bonds; provided that any sale of the Bonds shall be subject to further approval by the governing body. The Mayor is hereby authorized and directed to execute the engagement letter related to services to be provided by the Municipal Advisor. 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 7. 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] 600596.20228\SALEDOCS 2 ATTEST::·, \SALEDOCS 600596.20228 to Sale Resolution) (Signature Page EXHIBIT A CERTIFICATE DEEMING PRELIMINARY OFFICIAL STATEMENT FINAL ______ ,2023 Re: $3,175,000 City of Salina, Kansas, General Obligation Internal Improvement Bonds, Series 2023-A The undersigned is the duly acting Director of Finance of the City of Salina, Kansas (the "Issuer"), and are authorized to deliver this Certificate to the purchaser (the "Purchaser") of the above- referenced bonds (the "Bonds") on behalf of the Issuer. The Issuer has previously caused to be delivered to the Purchaser copies of the Preliminary Official Statement (the "Preliminary Official Statement") relating to the Bonds. For the purpose of enabling the Purchaser to comply with the requirements of Rule 15c2-12(b)(l) of the Securities and Exchange Commission (the "Rule"), the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be final as of its date, except for the omission of such information as is permitted by the Rule, such as offering prices, interest rates, selling compensation, aggregate principal amount, principal per maturity, delivery dates, ratings, identity of the underwriters and other terms of the Bonds depending on such matters. To the knowledge of the Issuer, the information contained in the Preliminary Official Statement, other than the sections entitled "The Depository Trust Company," "Ratings," "Legal Matters," "Tax Matters," and Appendices B and C, for which the Issuer expresses no opinion, and except for the omission of certain information such as offering prices, interest rates, selling compensation, aggregate principal amount, principal per maturity, delivery dates, ratings, identity of the underwriters and other terms of the Bonds depending on such matters, is true in all material respects, does not contain any untrue statement of a material fact and does not omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. CITY OF SALINA, KANSAS By: Title Director of Finance 600596.20228\SALEDOCS NOTICE OF BOND SALE $3,005,000* CITY OF SALINA, KANSAS Gilmore & Bell, P.C. 06/12/2023 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A (GENERAL OBLIGATION BONDS PAYABLE FROM UNLIMITED AD VALOREM TAXES) Bids. Bids for the purchase of the above-referenced bonds (the "Bonds") of the City of Salina, Kansas (the "Issuer") herein described will be received on behalf of the Issuer by the Issuer's Municipal Advisor, until 11:00 A.M. applicable Central Time (the "Submittal Hour"), on JULY 24, 2023 (THE "SALE DATE") Bids may only be submitted via PARITY® or via email to the Municipal Advisor at artebern d@stifel.com. Facsimile bids and hand-delivered written bids will not be accepted. All bids will be publicly evaluated at said time and place and the award of the Bonds to the successful bidder (the "Successful Bidder") will be acted upon by the City Commission of the Issuer (the "Governing Body") at its meeting to be held at 4:00 p.m. on the Sale Date. No oral or auction bids will be considered. Any qualified bidder may bid on the Bonds. Capitalized terms not otherwise defined herein shall have the meanings set forth in the hereinafter referenced Preliminary Official Statement relating to the Bonds. Terms of the Bonds. The Bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). The Bonds will be dated August 17, 2023 (the "Dated Date"), and will become due in principal installments on October 1 in the years as follows: Principal Principal Year Amount* Year Amount* 2024 $195,000 2034 $30,000 2025 220,000 2035 35,000 2026 235,000 2036 35,000 2027 245,000 2037 35,000 2028 255,000 2038 40,000 2029 265,000 2039 40,000 2030 285,000 2040 40,000 2031 295,000 2041 40,000 2032 310,000 2042 45,000 2033 315,000 2043 45,000 600596.20228\SALEDOCS The Bonds will bear interest from the Dated Date at rates to be determined when the Bonds are sold as hereinafter provided, which interest will be payable semiannually on April 1 and October 1 in each year, beginning on April 1, 2024 (the "Interest Payment Dates"). * Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principal amount of the Bonds or the schedule of principal payments described above, depending on the purchase price and interest rates bid and the offering prices specified by the Successful Bidder but in no event will the principal amount of the Bonds exceed $3,250,000. 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 net production as a percentage of the par amount of the Bonds generated from the bid of the Successful Bidder will not be decreased as a result of any change in the principal amount of the Bonds or in the principal amount per maturity. Place of Payment. The principal of and interest on the Bonds will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The principal of each Bond will be payable at maturity or earlier redemption to the owner thereof whose name is on the registration books (the "Bond Register") of the Bond Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. Interest on each Bond will be payable to the Registered Owner of such Bond as of the fifteenth day (whether or not a business day) of the calendar month next preceding each Interest Payment Date (the "Record Date") (a) mailed by the Paying Agent to the address of such Registered Owner as shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any 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. In 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 600596.20228\SALEDOCS 2 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 the Official Statement for further information regarding the book-entry-only system of registration of the Bonds and DTC. 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 2032, and thereafter, will be subject to redemption and payment prior to maturity on October 1, 2031, 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. 12-6a01 et seq., and K.S.A. 13-1024a, as amended by Charter Ordinance No. 41, as amended, and an ordinance and a resolution adopted by the Governing Body (collectively the "Bond Resolution") for the purpose of paying a portion of the cost of certain public improvements (the "hnprovements"). 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 certain 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 600596.20228\SALEDOCS 3 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. Submission of Bids. Email bids shall be marked "Proposal for General Obigation Internal Improvment Bonds, Series 2023-A" and may be submitted to the Municipal Advisor at arteberrvd@Stifel.com. 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. Any bid submitted shall include the initial offering prices to the public for each maturity of the Bonds. If provisions of this Notice of Bond Sale conflict with those of PARITY®, this Notice of Bond Sale shall control. 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 of transmission of facsimile or delivery by mail or in person of any bid. Any bidder desiring to have the Municipal Advisor assist in the delivery of such bidder's bid should provide pertinent bidding information to the Municipal Advisor not later than 30 minutes prior to the Submittal Hour on the Sale Date. PARITY®. Information about the electronic bidding services of PARITY® may be obtained from i-Deal LLC at 1359 Broadway, 2nd Floor, New York, New York 10018, Phone No. (212) 849-5023 5023 and from the following website: www.newissuehome.i-deal.com. 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) the same rate shall apply to all Bonds of the same maturity year; (b) no interest rate may exceed 5%; (c) no supplemental interest payments will be considered; (d) each interest rate specified shall be a multiple of 1/8 or 1/20 of 1 %; and (e) no zero percent (0%) interest 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. The Successful Bidder must supply a good faith deposit (the "Deposit") in the amount of 2.00% of the principal amount of the Bonds as indicated on the first page of this Notice payable to the order of the Issuer to secure the Issuer from any loss resulting from the failure of the Successful Bidder to comply with the terms of its bid. The Deposit must be received by the Issuer by 3:00 p.m. Central Time on the Sale Date. The Deposit shall be submitted by wire transfer in Federal Reserve funds, immediately available for use by the Issuer. No interest on the Deposit will be paid by the Issuer. The Deposit will be held by the Issuer until the Successful Bidder have complied with all of the terms and conditions of this Notice at which time the amount of said Deposit shall be returned to the Successful Bidder or deducted from the purchase price at the option of the Issuer. If a bid is accepted, but the Issuer fails to deliver the Obligations to the Successful Bidder in accordance with the terms and conditions of this Notice, said Deposit, or the proceeds thereof, will be returned to the Successful Bidder. If the Successful Bidder default in the performance of any of the terms and conditions of this Notice, the proceeds of such Deposit will be retained by the Issuer as and for liquidated damages. 600596.20228\SALEDOCS 4 Basis of Award. Subject to the timely receipt of the Deposit set forth above, the award of the Bonds will be made on the basis of the lowest true interest cost ("TIC"), which will be determined as follows: the TIC is the discount rate (expressed as a per annum percentage rate) which, when used in computing the present value of all payments of principal and interest to be paid on the Bonds, from the payment dates to the Dated Date, produces an amount equal to the price bid, including any adjustments for premium if any. Present value will be computed on the basis of semiannual compounding and a 360- day year of twelve 30-day months. Bidders are requested to provide a calculation of the TIC for the Bonds on the Official Bid Form, computed as specified herein on the basis of their respective bids, which shall be considered as informative only and not binding on either the Issuer or the bidder. The Municipal Advisor will verify the TIC based on such bids. If there is any discrepancy between the TIC specified and the bid price and interest rates specified, the specified bid price and interest rates shall govern and the TIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest TIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. The Issuer reserves the right to reject any and/or all bids and to waive any irregularities in a submitted bid. Any bid received after the Submittal Hour on the Sale Date will not be considered. Any disputes arising hereunder shall be governed by the laws of the State, and any party submitting a bid agrees to be subject to jurisdiction and venue of the federal and state courts within the State with regard to such dispute. The Issuer's acceptance of the Successful Bidder's proposal for the purchase of the Bonds in accordance with this Notice of Bond Sale shall constitute a bond purchase agreement between the Issuer and the Successful Bidder for purposes of the laws of the State and a contract between the Issuer and the Successful Bidder for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") and Rule G-32 of the Municipal Securities Rulemaking Board ("Rule G-32"). The method of acceptance shall be determined solely by the Governing Body. Bond Ratings. The outstanding general obligation bonds of the Issuer are rated "Aa3" by Moody's Investors Service. The Issuer has applied to Moody's Investors Service for ratings on the Bonds herein offered for sale. Such application and ratings are further described in the Preliminary Official Statement, hereinafter described. Optional Bond Insurance. The Issuer has not applied for any policy of municipal bond insurance with respect to the Bonds. If the Bonds qualify for municipal bond insurance, and any bidder desires to purchase such policy, such indication and the name of the desired insurer must be set forth on the bidder's Official Bid Form. The Issuer specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the Issuer. If the Successful Bidder 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 600596.20228\SALEDOCS 5 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 AUGUST 17, 2023 (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 148 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." (c) Any bid submitted pursuant to this Notice shall be considered a firm offer for the purchase 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 advise the 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 600596.20228\SALEDOCS 6 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 apply 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 for the year 2022 is as follows: Equalized Assessed Valuation of Taxable Tangible Property ............................................................. . Tangible Valuation of Motor Vehicles ................................................ . Equalized Assessed Tangible Valuation for Computation of Bonded Debt Limitations ............................... . $503,880,021 54.903.252 $558,783,273 The total general obligation indebtedness of the Issuer as of the Dated Date, including the Bonds being sold, is $72,150,000. Legal Opinion. The Bonds will be sold subject to the approving legal opinion of GILMORE & BELL, P.C., WICHITA, KANSAS, 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 relating to the interest on the Bonds being excludable from gross income for federal income tax 600596.20228\SALEDOCS 7 purposes and exempt from income taxation by the State. Reference is made to the Preliminary Official Statement for further discussion of federal and State income tax matters relating to the interest on the Bonds. Electronic Transactions. The transactions described herein may be conducted and related documents may be sent, received and stored by electronic means or transmissions. All bid documents, closing documents, certificates, ordinances, resolutions and related instruments may be executed 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. Additional Information. Additional information regarding the Bonds may be obtained from the undersigned or from the Municipal Advisor at the addresses set forth below: DATED: June 26, 2023. Issuer -Good Faith Deposit Delivery Address: Debbie Pack, Director of Finance and Administration City of Salina, Kansas 300 West Ash Street, Room 206 Salina, Kansas 67 402 Phone No.: (785) 309-5735 Fax No.: (785) 309-5711 Email: debbie.pack@salina.onz Municipal Advisor -Email Bid Delivery Address: Stifel Nicolaus & Company, Incorporated 4801 Main Street, Suite 530 Kansas City, Missouri 64112 Attn: David Arteberry Phone No.: (816) 203-8773 Email: mtebem d@stifel.com 600596.20228\SALEDOCS 8 CITY OF SALINA, KANSAS By: JoVonnaRutherford, City Clerk MATURITY SCHEDULE $3,005,000111 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A Maturity 10-01-24 10-01-25 10-01-26 10-01-27 10-01-28 10-01-29 10-01-30 10-01-31 10-01-32(3) 10-01-33(3) 10-01-34(3) 10-01-35(3) 10-01-36(3) 10-01-37(3) 10-01-38(3) 10-01-39(3) 10-01-4013) 10-01-41(3) 10-01-42(3) 10-01-43(3) (l) Preliminary; subject to change. Amount $195,000 220,000 235,000 245,000 255,000 265,000 285,000 295,000 310,000 315,000 30,000 35,000 35,000 35,000 40,000 40,000 40,000 40,000 45,000 45,000 Serial Bonds Yield Base cus1P12> 794744 (2) CUSIP is a registered trademark of the American Bankers Association. CUSIP Global Services ("CGS") is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright© 2023 CUSIP Global Services. CUSIP data herein is provided by CGS. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP numbers are provided for convenience of reference only. None of the Issuer, the Underwriter, or their agents or counsel assume responsibility for the accuracy of such numbers. (3l At the option of the City, Bonds maturing on October 1, 2032 and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2031, 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 300WestAsh P. 0. Box736 Salina, Kansas 67402-0736 (785) 309-5700 CITY COMMISSION Mike Hoppock, Mayor Trent Davis, M.D., Vice Mayor Greg Lenkiewicz, Commissioner Bill Longbine, 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. Wichita, Kansas 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......................................................................................................................................... 1 THE DEPOSITORY TRUST COMPANY................................................................................................... 7 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................................................................................................................. 15 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: ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR FISCAL YEAR ENDING DECEMBER 31, 2021 APPENDIX D: UNAUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2022 [THIS PAGE INTENTIONALLY LEFr BLANK] General OFFICIAL STATEMENT CITY OF SALINA, KANSAS $3,005,000• GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A INTRODUCTORY STATEMENT The purpose of this Official Statement is to present certain information concerning the City of Salina, Kansas (the "Issuer" or "City"), and the offering of its $3,005,000* General Obligation Internal Improvement Bonds, Series 2023-A (the "Bonds"). The Bonds are being issued to provide funds to permanently finance certain public improvements with 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., Wichita, Kansas, 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 Bond Resolution (as defined in the section entitled "THE BONDS -Authority"), 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 816-203-8733. 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 K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., 12-6a01 et seq and K.S.A. 13- 1024a, as amended by Charter Ordinance No. 41 of the City,, all as amended and supplemented from time to time, * Preliminary; subject to change. 1 an Ordinance passed by the governing body of the City and a 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 2032, and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2031, 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. Mandatory Redemption. (a) 20[_] Term Bonds. The 20[_] Term Bonds shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements hereinafter set forth at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. The payments which are to be deposited into the Debt Service Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year, the following principal amounts of such 2040 Term Bonds 2 Principal Amount Year *] 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 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 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 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 Oty 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 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. 3 Designation of 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 "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 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. 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 Paying Agent and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (bl 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 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 Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, 4 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 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 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 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 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. 5 Payments Due on Saturdays, Sundays and Holidays In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. Book-Entry Bonds; Securities Depository The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of OTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through DTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b) if the Bond Registrar receives written notice from Participants having interest in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable 6 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. 7 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 OTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its 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. THE FINANCING PLAN Proceeds from the sale of the Bonds will be used to provide long term financing for a portion of the costs of certain public improvements within the City (collectively, the "Bond Projects") and to pay the costs associated with the issuance of the Bonds. The Bond Projects are as follows: Project Description Facility Improvements -Bill Burke Park Cedar Ridge Phase 2 Ordinance/ Resolution Res. 22-8035 Res. 21-7983 8 Authority K.S.A. 13-1024a/Ch. Ord. No. 41seq. K.S.A. 12-6a01 et seq. Total: Principal Amount $2,340,000 665,000 $3,005,000 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 Net Original Issue Prem ium Total Sources of Funds Uses of Funds: Deposit to Improvement Fund Costs of Issuance Underwriter's Discount Total Application 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 UNDERWRITER. 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. 9 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 "FINANCIAL INFORMATION CONCERNING THE CITY -Pension and Employee Retirement Plans," the Issuer participates in the Kansas Public Employees Retirement System ("KPERS"), as an instrumentality of the State to provide retirement and related benefits to public employees in Kansas. KPERS administers three statewide defined benefit retirement plans for public employees which are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Issuer participates in the 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 Reports, the Local Group had an UAAL of approximately $1.783 billion in calendar year 2021. Taxation of Interest on the Bonds An opinion 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 10 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. Market for the Bonds Ratings. The Bonds have been assigned the financial ratings set forth in the section hereof titled "RATING". 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. Cybersecurity Risks Security breaches, including electronic break-ins, computer viruses, attacks by hackers and similar breaches could create disruptions or shutdowns of the Issuer and the services it provides, or the unauthorized disclosure of confidential personal, health-related, credit and other information. If a security breach occurs, the Issuer may incur significant costs to re mediate possible injury to the affected persons, and the Issuer may be subject to sanctions and 11 civil penalties. Any failure to maintain proper functionality and security of information systems could interrupt the Issuer's operations, delay receipt of revenues, damage its reputation, subject it to liability claims or regulatory penalties and could have a material adverse effect on its operations, financial condition and results of operations. Natural Disasters or Terrorist Attacks The occurrence of a terrorist attack in the Issuer, or natural disasters, such as fires, tornados, earthquakes, floods or droughts, could damage the Issuer and its systems and infrastructure, and interrupt services or otherwise impair operations of the Issuer. Infectious Diseases State and local governmental authorities continue efforts to contain and limit the spread of COVID-19. Future revenue collections, including property tax collections that are essential to repayment of the Bonds, may deviate from historical or anticipated levels due to COVID-19 or other infectious diseases. 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., Wichita, Kansas, 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". 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 Bonds [(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. 12 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 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 13 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 .._f ---~l (the "Underwriter") at a price equal to the par amount of the Bonds, (plus a (net] premium of$[ L [less an underwriting discount of$[ ). ABSENCE OF MATERIAL LITIGATION The City, in the ordinary course of business, is a party to various legal proceedings. In the opinion of management of the City, any judgment rendered against the City in such proceedings would not materially adversely affect the financial position of the City. 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. 14 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, 2023. In the 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 15 [TH1S PAGE lNTENTIONAI.L Y LEFT BLANK] APPENDIX A FINANCIAL OVERVIEW OF THE CITY 2022 Estimated Actual Valuation (1) 2022 Assessed Valuation Outstanding General Obligation Bonds (2} Population (2022 U.S. Census Bureau Estimate) General Obligation Debt Per Capita Ratio of General Obligation Bonded Debt to Estimated Actual Valuation Ratio of General Obligation Bonded Debt to Estimated Assessed Valuation Outstanding Temporary Notes Outstanding State Loans (3) Outstanding Lease Purchase Obligations Outstanding Utility System Revenue Bonds Outstanding Special Obligation Revenue Bonds Overlapping General Obligation Debt (4} Direct and Overlapping General Obligation Debt (5) Direct and Overlapping General Obligation Debt Per Capita Ratio of Direct and Overlapping Debt to Estimated Actual Valuation Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation $ 3,705,559,200 $ 558,783,273 $ 72,150,000 $ $ $ $ $ $ $ $ $ 46,868 1,539 1.95% 12.91% 0 83,474,170 417,770 8,090,000 20,475,000 176,303,043 331,927,213 7,079 8.96% 59.40% (1) For a further description of how Estimated Actual Valuation is calculated and additional historical figures see the section titled "FINANCIAL INFORMATION CONCERNING THE CITY-Estimated Actual Valuation". (2) Includes the Bonds. (3} 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) Includes $72,250,000 of general obligation sales tax bonds issued by Saline County. Although such bonds are ultimately general obligations of the County, their repayment is being provided for by a dedicated countywide local options sales tax. The sales tax has generated sufficient revenue each year since its inception to provide for all debt service requirements on the bonds. For a more detailed explanation of the overlapping debt of the other jurisdictions, see "DEBT SUMMARY OF THE CITY -Overlapping Debt." (5) Includes outstanding general obligation bonds, temporary notes and state loans of the City and general obligation bonds of overlapping jurisdictions. A-1 GENERAL INFORMATION CONCERNING THE CITY Location and Size The City of Salina is located in north central Kansas, near the geographic center of the contiguous United States. It is the seventh largest city in Kansas, with a 2022 U.S. Census Bureau estimate of 46,868. The City is the county seat for Saline County, which had an estimated 2022 U.S. Census Bureau population of 53,596. Situated at the intersection of Interstate Highways 70 and 135, the City of Salina serves as the industrial, medical, retail, trade and service hub for north central Kansas. Kansas City, Kansas, and Wichita, Kansas, are 175 and 95 miles away, respectively, via the direct access of these two major highways. The City encompasses a total area of approximately 23 square miles. Government The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas. The City has had a Commission-City Manager form of government since 1921. The Commission comprises five members elected at-large. Each year the Commission chooses one member to act as Mayor. The City Manager is appointed by the Governing Body and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The Governing Body is responsible for the policy determination, and the City Manager is responsible for the administration of the municipal government. Salina became a City of the first class on July 9, 1920. There are no organized city employee unions. The present elected officials of the City, along with the expiration of their current terms of office, are as follows: Population Name Michael L. Hoppock Bill Longbine Greg Lenkiewicz Trent W. Davis, M.D. Karl F. Ryan Title Mayor Vice Mayor Commissioner Commissioner Commissioner Term Expires 2024 2026 2026 2024 2024 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. According to the U. S. Census Bureau, the City's citizens had a median age of 39 years in 2021. The following table and graph show the population for the City for selected years as provided by the U.S. Census Bureau. Year 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 A-2 U.S. Census Bureau Population 46,868 46,481 46,803 46,550 46,716 46,994 47,336 47,813 47,867 47,846 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 429 full-time employees by the City. Firefighting services are provided from four stations located throughout the City with 87 full-time firefighters. The fire department operates 50 vehicles and provides emergency medical services. The Department was recently upgraded to an Insurance Services Office rating of 2. The police department employs 123 personnel, of which 69 are sworn positions. The Department operates 52 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 approximately 6,900. 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 -Salina 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 800 students are currently enrolled in the school. Kansas Wesleyan University was founded in 1886 and is located within the City. Currently, Kansas Wesleyan maintains an enrollment of approximately 870 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 approximately 30 students and the School of Nursing has approximately 50 students. The Kansas Center for Rural Health, started in 2022, is also located on the campus. The Kansas Center for Rural Health is focused on improving health disparities and outcomes in rural Kansas through research, education and service. Transportation In addition to 1-70 and 1-135, US-81 and US-40 also intersect Salina. Several freight companies provide motor freight service in Salina with direct and connecting schedules to all cities in the United States. Bus service is available at regular intervals during each day in all directions. Union Pacific gives the City rail service in four directions out of the City and provides daily package-car service in and out of Salina. There are approximately 8 daily freights stopping in the City. Existing terminals have adequate capacity to handle present and greatly increased future capacity. Approximately 30 miles of storage tracks are available. The City is served by the Salina Regional Airport and scheduled air service is provided by United Airlines. The airline offers daily scheduled passenger air service to Denver International Airport and Chicago O'Hare International Airport. A-3 Utilities and Infrastructure Evergy, Inc. supplies electricity and Kansas Gas Service provides natural gas to the City. The City owns its own water and sewage system. Additionally, the City is responsible for street maintenance and police and fire protection for the Airport. SBC provides telephone service. Three cellular phone companies provide service to the City. Health Facilities The City is served by Salina Regional Health Center ("SRHC"), a 394-bed (207 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 $1.271 billion as of Spring, 2022. A savings bank has a branch office in the City. There are several credit unions available in the city. Source: Kansas Bank Directory Pension and Employee Retirement Plans The Issuer participates in the Kansas Public Employees Retirement System ("KPERS") established in 1962, as an instrumentality of the State, pursuant to K.S.A. 74-4901 et seq., to provide retirement and related benefits to public employees in Kansas. KPERS is governed by a board of trustees consisting of nine members each of whom serve four-year terms. The board of trustees appoints an executive director to serve as the managing officer of KPERS and manage a staff to carry out daily operations of the system. As of June 30, 2022, KPERS serves approximately 333,000 members and approximately 1,500 participating employers, including the State, school districts, counties, cities, public libraries, hospitals and other governmental units. KPERS administers the following three statewide, defined benefit retirement plans for public employees: (a) Kansas Public Employees Retirement System; (b) Kansas Police and Firemen's Retirement System; and (c) Kansas Retirement System for Judges. These three plans are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Kansas Public Employees Retirement System is the largest of the three plans, accounting for approximately 95% of the members. The Kansas Public Employees Retirement System is further divided into two separate groups, as follows: (a) State/School Group -includes members employed by the State, school districts, community colleges, vocational-technical schools and educational cooperatives. The State of Kansas makes all employer contributions for this group, the majority of which comes from the State General Fund. A-4 (b) Local Group -all participating cities, counties, library boards, water districts and political subdivisions are included in this group. Local employers contribute at a different rate than the State/School Group rate. KPERS is currently a qualified, governmental, § 401(a) defined benefit pension plan, and has received IRS determination letters attesting to the plan's qualified status dated October 14, 1999 and March 5, 2001. KPERS is also a "contributory" defined benefit plan, meaning that employees make contributions to the plan. This contrasts it from noncontributory pension plans, which are funded solely by employer contributions. The Issuer's employees currently annually contribute 6% of their gross salary to the plan if such employees are KPERS Tier 1 members (covered employment prior to July 1, 2009), KPERS Tier 2 members (covered employment on or after July 1, 2009), or KPERS Tier 3 members (covered employment on or after January 1, 2015). In 2021, the Legislature authorized the issuance of revenue bonds to provide net proceeds of up to $500 million (the "Revenue Bonds") the proceeds of which must be applied to the unfunded actuarial pension liability as directed by KPERS. The Revenue Bonds in the principal amount of $504,535,000 were issued August 26, 2021. The repayment of the Revenue Bonds shall be subject to legislative annual appropriation, shall not be an obligation of the KPERS system, and the full faith and credit or taxing power of the State shall not be pledged to the repayment of the Revenue Bonds. Due to the authorization of the Revenue Bonds, the Legislature changed the State/School employer contribution rate from 14.09% to 13.33% for fiscal year 2022 and from 13.86% to 13.11% for fiscal year 2023. In 2022, the Legislature authorized additional contributions totaling $1.125 billion in four payments to be deposited into the KPERS trust fund for the School Group. Typically when such additional contributions are made by the State, the statutory employer contribution rates for the following two fiscal years are recertified by the Legislation; however the recertification has not yet occurred. For more information about the Legislature's actions related to KPERS, please see the 2021 Valuation Report referenced below. 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 8.43% of the employee's gross salary for calendar year 2023, and is projected to change to 9.26% of the employee's gross salary for calendar year 2024. In addition, the Issuer contributes 1% of the employee's gross salary for Death and Disability Insurance for covered employees. According to the Valuation Report as of December 31, 2021 (the "2021 Valuation Report") the KPERS Local Group, of which the Issuer is a member, carried an unfunded accrued actuarial liability ("UAAL") of approximately $1. 783 billion at the end of 2021. The amount of the UAAL in 2021 changed from the previous year's amount due to the factors discussed in the 2021 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 2021 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 2021 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 2021 Valuation Report sets the employer contribution rate for the period beginning January 1, 2024, for the KPERS Local Group, and KPERS' actuaries identified that an employer contribution rate of 9.26% 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 2021 Valuation Report. The statutory contribution rate of employers currently equals the 2021 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 2021 Valuation Report, KP&F carried an UAAL of approximately $1.140 billion at the end of 2021. 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, A-5 2023, the Issuer contributes 22.86% of employees' gross salary, and is projected to change to 23.10% of the employee's gross salary for calendar year 2024. 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. 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., Vortex Global, GeoProbe Systems, Bergkamp Inc., Kasa Controls and Automation, Coperion K-Tron, Great Plains Manufacturing/Kubota, PKM Steel Service, Crestwood Cabinets, McShares, Inc., Pepsi Bottling, Rev Group, Stryten Energy, Advance Auto Parts Distribution Center, and Superior Contracting. 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's "trade pull factor" is generally within the top 10 of larger cities in Kansas 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, 2020 prepared by the Docking Institute of Public Affairs at Fort Hays State University and published in April 2021, businesses and organizations at the Salina Regional Airport and Airport Industrial Center employed 7,005 employees with a total level economic activity for 2020 of approximately $1,297,934,889. The report also cited that the Airport/Airport Industrial Center accounted for 13.0% of the employment in Saline County and 35% of the total economic activity in a seven-county area. A-6 The Kansas Department of Labor estimated the civilian labor force in the City of Salina for the year 2022 to be 25,651 persons. The estimated median household income for the City in 2022 was $52,702, and owner-occupied housing rates in the City were 63.3%. 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. In recent years, Dillon Companies, Inc., a subsidiary of Kroger Company, recently opened a 77,000 square foot grocery store. Dick's Sporting Goods and Marshalls clothing store opened in a building formerly occupied by Sutherland Lumber Company. In addition, several new restaurants have opened or expanded, including Olive Garden, Longhorn Steakhouse, Scooter's Coffee, Starbucks, Taco Bell, Daimaru Steakhouse and YaYa's Euro Bistro. These openings and expansions are in addition to other economic development activity at the Airport Industrial Center. 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. In 2012, the Salina Municipal Airport was renamed the Salina Regional Airport. Adding to the increased enplanement count is the Airport's status as an Airport of Embarkation/Debarkation by the Fort Riley, Kansas Army Installation located just 60 miles to the east of Salina on 1- 70. The Airport also accommodates a wide variety of aircraft including business jets, military, flight training and general aviation aircraft. During 2022, the Salina Air Traffic Control Tower logged over 68,000 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 2.371 million gallons of fuel to the wide variety of aircraft utilizing the Airport during 2022 and 282,730 as of February 2023. The Salina Regional Airport is served by SkyWest Airlines d/b/a United Express with daily flights to United Airlines Denver and Chicago hubs. SkyWest Airlines receives a USDOT Essential Air Service Program subsidy for daily flights at Salina. The current annual subsidy is $3,310,166 per year. During CY 2022 the Salina Airport recorded 37,835 total passengers. The Airport and Airport Industrial Center is home for over 123 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-7 Major Employers Industrial development during the past ten years has established a broad, industrial base in and around the City. A list of the major employers is as follows. All figures represent total full-time employment excluding seasonal and part-time employees. Name Salina Regional Health Center Unified School District No. 305 Schwan's Global Supply Chain, Inc. Great Plains Manufacturing Stryten Manufacturing City of Salina Salina Vortex Saline County Walmart Source: Salina Chamber of Commerce Income Product/Business Healthcare School System Manufacturing Agricultural & Landscaping Equipment Battery Manufacturer City Government Manufacturing Local Government Discount Retail Estimated Employment 1,875 1,500 1,200 1,200 700 425 385 325 250 The following table shows the per capita personal income for residents of Saline County and the State during the years indicated: Vear 2021 2020 2019 2018 2017 Source: Kansas Statistical Abstract Labor Force Saline County N/A $53,320 50,099 49,201 47,632 State of Kansas $59,324 56,099 53,203 51,139 49,033 The following tables show the labor force figures for the City of Salina and the State of Kansas. City of Salina: Total Unemployment Vear Labor Force Employed Unemployed Rate 2023 (Apr) 25,368 24,727 641 2.5% 2022 25,651 25,011 640 2.5 2021 25,029 24,236 793 3.2 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 2015 26,308 25,286 1,022 3.9 2014 26,126 24,993 1,133 4.3 A-8 State of Kansas: Total Unemployment Year Labor Force Emplol(ed Unemplol(ed Rate 2023 (Apr) 1,517,433 1,475,138 42,295 2.8% 2022 1,504,932 1,464,834 40,098 2.7 2021 1,500,677 1,451,204 49,473 3.3 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 2015 1,493,782 1,431,533 62,249 4.2 2014 1,494,203 1,426,892 67,311 4.5 Source: Kansas Department of Labor DEBT SUMMARY OF THE CITY Current Indebtedness The following is an overview of the City's outstanding indebtedness by classification as of the dated date of the Bonds. Figures do not include bonds for which payment has been provided through the creation of designated escrow accounts. General Obligation Bonds: Date Issued 02-15-13 07-29-15 07-27-16 07-27-16 07-27-17 11-27-18 04-24-19 04-29-20 11-30-20 04-29-21 09-08-21 04-28-22 08-17-23 Total Series 2013-A 2015-A 2016-A 2016-B 2017-A 2018-A 2019-A 2020-A 2020-B 2021-A 2021-B 2022-A 2023-A Purpose Taxable Improvements Revenue and Internal Imp. Internal Improvements Refunding Improvements Improvements Improvements Improvements Refunding Improvements Refunding Improvements Internal Improvements *Preliminary; subject to change Amount of Issue $1,360,000 6,825,000 6,570,000 13,750,000 9,310,000 2,090,000 11,090,000 5,210,000 8,450,000 7,645,000 6,220,000 7,840,000 3,005,000* Final Maturity 10-01-28 10-01-35 10-01-36 10-01-31 10-01-37 10-01-33 10-01-39 10-01-35 10-01-36 10-01-41 10-01-34 10-01-42 10-01-43 Amount Outstanding $630,000 4,420,000 4,925,000 8,205,000 7,520,000 1,630,000 10,015,000 4,135,000 6,785,000 7,420,000 5,620,000 7,840,000 3,005.000* $72,150,000 A portion of the City's outstanding general obligation bonds are payable from special assessments levied upon properties benefited by certain internal improvement projects, local option sales tax, and transfers from enterprise funds of the City. If such payments are not provided in a timely manner, the principal of and interest on the bonds must then be paid from the City's ability to levy unlimited ad valorem taxes. See "FINANCIAL INFORMATION -Special Assessments" for a further description of special assessment financing. Temporary Notes: None A-9 Utility System Revenue Bonds: Revenue bonds are payable solely from the net revenues derived by the City from the operation of its combined water and sewage system. Revenue bonds do not represent a general obligation indebtedness of the City for which the City's taxing ability has been pledged. Date Pledged Amount Final Amount Issued Revenue Series of Issue Maturini: Outstanding 09-11-19 Water and Sewer System 2019 $10,330,000 10-01-31 $8,090,000 Lease Obligations: Year Original Final Amount Item Issued Amount Year Outstanding HVAC System 2012 $1,100,000 2027 $417,770 Special Obligation Revenue Bonds: The following special obligation revenue bonds are payable solely from sales tax collected within certain special districts in the City. Revenue bonds do not represent a general obligation indebtedness of the City for which the City's taxing ability has been pledged. Date Pledged Amount Final Amount Issued Revenue Series of Issue Maturitll Outstanding 12-21-18 Sales Tax Revenue 2018-A $18,250,000 12-01-38 $16,155,000 12-21-18 Sales Tax Revenue 2018-B 4,320,000 12-01-38 4,320,000 Total: $20,475,000 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 Year Final Original Amount_ Number Pur(!ose Originated Pallment Date Amount Outstanding KDHE 2629 Water 2014 08-01-34 $8,562,911 $5,091,497 KDHE 2917 Water 2019 02-01-40 32,000,000 28,092,163 KDHE 2957 Water 2019 02-01-40 4,250,000 3,730,990 KDHE 2998 Water 2019 02-01-40 4,250,000 3,971,550 KDHE 2050 Sewer 2020 03-01-35 1,399,012 1,087,970 KDHE 2049* Sewer 2021 09-01-42 41,500,000 41,500,000 $83,474,170 *Design on this project is in progress. Construction is expected to begin later in 2023 and completed in 2026. The Original Amount shown above is the maximum authorized loan amount which is subject to change. As of July 13, 2023, the City has drawn down $3,142,426 of the authorized amount. A-10 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. Jurisdiction Salina Airport Authority Saline Countyf2l Unified School District No. 305 !1lAs of the closing date of the Bonds. Amount Outstandingf1J $34,670,000 72,814,135 93,575,000 Estimated Share of the City Amount Percentage $34,670,000 100.00% 54,678,323 75.09 86,954,720 92.93 $176,303,043 <2l1ncludes $72,250,000 of bonds issued by Saline County the security of which includes a pledge of both property taxes and a dedicated 0.50% countywide retailers' sales tax of the County. The bonds have historically been repaid entirely from the collections of the sales tax and the County anticipates that the bonds will continue to be so paid in the future. 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. Existing Bonds Series 2023-A Bonds Year Principal Interest Principal Interest Total 2023* $6,305,000 $2,076,616 2024 6,265,000 1,728,341 2025 6,000,000 1,551,166 2026 5,310,000 1,377,246 2027 5,120,000 1,219,388 2028 4,865,000 1,069,754 2029 4,625,000 925,046 2030 3,935,000 802,196 2031 3,870,000 702,418 2032 3,800,000 603,573 2033 3,780,000 506,798 2034 3,640,000 408,101 2035 3,485,000 313,813 2036 2,800,000 220,387 2037 1,905,000 145,225 2038 1,170,000 89,350 2039 1,200,000 57,600 2040 470,000 25,050 2041 475,000 14,450 2042 125,000 3,750 $69,145,000 $13,840,271 * Includes payments made prior to the closing date of the Bonds. A-11 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 Debtto Debt to U.S. Debt Outstanding Assessed Estimated Actual Census Per Year December 31 Valuation Valuation Po(!ulation Capita 2022 $69,145,000 12.37% 1.87% 46,868 $1,475.31 2021 59,582,649 11.54 1.76 46,481 1,281.87 2020 65,330,000 12.79 1.96 46,803 1,395.85 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 is currently considering approximately $10 million of improvement projects to several municipally owned buildings. If approved by the City Commission, these projects are anticipated to be funded within the next year with general obligation debt and/or lease purchase financing. Additionally, the City annually prepares a multi- year capital improvements plan. This plan identifies and prioritizes potential capital improvement projects within the City and includes the respective funding sources. The latest capital improvements plan presented to the City Commission includes approximately $24-28 million of projects to be funded with general obligation debt over the next three to four calendar years. This plan has been presented to the City Commission but has not been formally adopted. The plan does not include future residential subdivision improvement projects which might be 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-12 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-13 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. 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: 2018 2019 2020 2021 Property Taxes $9,743,497 $10,801,226 $11,497,684 $10,820,524 Sales Tax 32,900 13,418,742 13,697,179 16,853,083 Other Taxes 5,444,880 5,086,492 4,925,381 5,351,559 Intergovernmental 1,144,717 1,351,967 2,453,021 1,144,657 Charges for Services 6,366,094 5,816,485 4,942,217 5,841,900 Investment Revenue 45,477 613,249 256,515 78,253 Miscellaneous 452.916 609,676 981.845 719.637 Total Revenues $36,490,207 $37,778,837 $38,753,842 $40,539,613 Expenditures: General Government $5,648,579 $4,581,505 $5,505,967 $5,629,698 Public Safety 22,952,925 23,692,44S 22,435,061 23,214,758 Public Works 5,350,056 5,473,414 5,101,204 5,464,894 Public Health and Sanitation 793,780 816,636 682,439 746,880 Culture and Recreation 4,494,713 4,379,441 3,037,594 3,732,377 Planning and Development 766,471 836,690 673,564 55,174 Capital Outlay 860,115 985.861 608.460 675,363 A-14 Total Expenditures $40,866,639 $40,765,992 $38,044,289 $39,519,144 Revenues Over (Under) $(4,376,432) $(2,987, 155) $709,553 $1,020,469 Other Sources (Uses) 4,236,500 5,551,752 4,929,300 4,900,800 Net Change in Fund Balance $(139,932) 2,564,597 $5,638,853 $5,921,269 Fund Balance January 1 $6,882,509 $6,742,577 $9,503,410 $15,142,263 Restatement of Prior Year Balance 0 0 0 0 Fund Balance December 31 $6,742,577 $9,307,174 $15,142,263 $21,063,532 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 Pro~ertll Utilities Vehicle Valuation 2023* $506,218,333 $6,842,067 $23,037,764 $54,903,252 $591,001,416 2022 468,723,852 9,542,807 25,613,362 54,903,252 558,783,273 2021 427,732,694 8,154,030 23,975,182 56,545,812 516,407,718 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 2014 376,131,346 13,652,885 17,670,147 48,865,900 456,320,278 2013 370,390,092 17,769,120 16,948,264 48,882,411 453,989,887 *Estimate provided by Saline County and used for budgeting purposes. Final 2023 valuations for real estate, personal property and state assessed utilities will be released in November of 2023. Final 2023 valuation for motor vehicles will be released in January of 2024. Estimated Actual Valuation Based on assessment percentages provided by Kansas Statutes, real estate equalization ratios provided by the Kansas Department of Revenue (see "FINANCIAL INFORMATION CONCERNING THE CITY -Property Assessment Rates"), and estimated actual valuation figures provided by the Saline County Appraiser's Office, the following table provides November 1 estimated actual valuations for the City in the years indicated. Year 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Residential Real Estate Equalization Ratio 10.48% 10.87 10.79 11.44 11.17 11.04 11.36 11.28 11.65 11.55 A-15 Estimated Actual Value $3,705,559,200 3,392,138,959 3,325,193,918 3,292,557,745 3,150,409,123 3,097,885,103 3,046,949,034 2,968,008,193 2,917,267,724 2,889,385,914 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. The creation of special benefit districts, the determination of property benefited, and the method of allocating the cost of the improvement is at the discretion of the City. Property owners have the ability to suggest improvements through a petition process and to comment on the final amount of their assessment. The City may or may not be included as part of the special benefit district. All property owners have the option to pay their portion of the improvement cost with a one-time payment during a 30-day assessment prepayment period or pay in annual installments with interest over a certain number of years. Upon completion of the special benefit district improvement projects and a 30-day prepayment period, the City issues general obligation bonds to provide for permanent project financing. The payment of the principal of and interest on such bonds is paid from the special assessments levied annually on the benefited property. Special assessments are paid at the same time and in the same manner as ad valorem property taxes. If at any time the special assessments received from the property owners are insufficient to provide for the payment of the principal of and interest on the bonds, the City is obligated to provide for the balance of such payments through its ability to levy unlimited ad valorem property taxes. Tax Collections Tax statements are mailed November 1 each year and may be paid in full or one-half on or before December 20 with the remaining one-half due on or before May 10 of the following year. Taxes that are unpaid on the due dates are penalized at a statutorily prescribed rate until paid or until the property is sold for taxes. Real estate bearing unpaid taxes is advertised for sale in July of each year and is sold by the County for taxes and all legal charges on the first Tuesday in September. Properties that are sold and not redeemed within two years after the tax sale are subject to foreclosure sale, except homestead properties which are subject to foreclosure sale after three years. Personal property taxes are assessed, due and may be paid in the same manner as real estate taxes. Motor vehicle property taxes are based on valuations provided by the Kansas Department of Revenue and the county average tax rate for the county in which the vehicle is registered. Motor vehicle taxes are payable to the county treasurer at the time of the vehicle's annual registration. Vehicle registration dates are assigned by the State in a manner such as to equal registration over a twelve-month period. Motor vehicle taxes are distributed by the county to the state, city and other taxing jurisdictions based on their proportionate tax levies. Delinquent personal and motor vehicle taxes are penalized at the same rate as delinquent real property taxes. The following is a summary of tax collections for the years shown. A-16 Current Current and Delinquent Levy Tax Taxes Tax Collections Tax Collections Vear Rate Levied Amount ~ Amount ~ 2022* 30.348 $16,777,459 $16,086,452 95.9% $16,099,745 96.0% 2021 30.452 15,398,398 2020 30.650 15,226,084 2019 29.720 14,949,484 2018 28.394 13,780,643 2017 26.129 12,728,983 2016 27.603 11,564,876 2015 27.311 11,209,245 *Represents collections through April 2023. Tax Levies City of Salina Salina Library State Education & Other Unified School District No. 305 Airport Authority Central Kansas Extension District Saline County Total Largest Taxpayers Nov 2018 ~ 28.394 6.014 1.500 57.522 4.998 1.476 38.437 138.341 15,125,318 98.2 15,028,646 98.7 14,538,092 97.2 13,427,810 97.4 12,381,334 97.3 11,320,197 97.9 10,984,630 98.0 Nov 2019 ~ 29.720 5.913 1.500 55.508 4.447 1.198 41.097 Nov 2020 ~ 30.650 5.880 1.500 55.454 5.037 1.206 40.606 Nov 2021 ~ 30.452 6.028 1.500 54.903 4.838 1.196 39.782 139.383 140.333 138.699 15,310,316 15,045,546 14,732,831 13,590,888 12,602,044 11,524,101 11,169,600 Nov 2022 Levy 30.348 5.510 1.500 53.425 4.968 1.111 38.860 135.722 99.4 98.8 98.6 98.6 99.0 99.6 99.6 According to the Saline County Clerk's Office, the following table lists the largest taxpayers in the City, their November 2022 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 $16,402,623 2.94% SFC Global Supply Chain Inc Manufacturing 11,272,565 2.02 Kansas Gas Service Utility 5,746,609 1.03 Sam's Real Estate Business Trust/Walmart Discount Store 4,739,506 0.85 Salina Regional Health Properties Inc. Motel 4,346,082 0.78 Central Mall Realty Holding LLC Retail Shopping Center 3,142,587 0.56 S&B Motels Motel 2,894,902 0.52 Union Pacific Railroad Co. Railroad 2,323,522 0.42 Menard Inc. Retail Shopping Center 2,284,161 0.41 Individual Commercial 2,256,168 0.40 Total $55,408,725 9.92% A-17 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 2023* $14,366,327 2022 211,920,402 2021 27,383,463 2020 27,706,623 2019 20,544,765 2018 71,862,718 2017 59,975,197 2016 97,910,328 2015 56,989,007 2014 24,214,432 * As of March 2023 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 1.00% countywide local option sales tax. In 1992 voters of the City approved a local option 0.50% 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 in the City approved a 0.75% 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 0.40%. In November of 2020, the voters of Saline County approved an additional 0.50% 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. A-18 Year 2023(1) 2022 2021 2020 2019 2018 2017 2016(2) 2015 Citywide Local Option Sales & Use Tax Receipts $9,476,105 18,526,850 16,971,338 15,160,656 14,922,405 14,632,584 14,404,702 10,458,630 10,372,573 City's Portion of 1% Countywide Local Option Sales & Use Tax Receipts $4,982,071 9,707,849 8,798,402 7,756,909 7,608,604 7,415,804 7,368,869 7,312,618 7,376,708 !1lThrough June of 2023. Aggregate sales and use tax receipts for this period are approximately 3.7% above levels for same period in 2022. !2l Collections prior to October 1, 2016 represent taxes attributable to a 0.40% sales tax that was replaced with the 2016 sales tax of 0.75%. Prior to October 1, 2016 the citywide aggregate sales and use tax rate was 0.90%. 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. Propertv 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. A-19 Real Property: Residential Commercial and Industrial- Real Property Agricultural Land (1) Agricultural Improvements Vacant Lots Not-for-Profit (2) All Other Personal Property: {3) Mobile Homes Mineral Leaseholds (large) Mineral Leaseholds (small) Commercial & Industrial Machinery & Equipment All Other Utilities: Railroads All Other Public Utilities Motor Vehicles: Property Exempt: 11.5% 25.0 30.0 25.0 12.0 12.0 30.0 11.5% 30.0 25.0 25.0 30.0 federally mandated rate 33.0% 20.0% Property used for the following purposes, or portions thereof, are exempt from taxation provided certain statutory requirements are met: religious, educational, literary, scientific, benevolent, alumni associations, veterans' organizations, or charitable purposes, including parsonages and community service organizations providing humanitarian services. (1) Agricultural land is valued based on the productivity value of the property and not estimated market valuation. (2) A bill passed by the Kansas Legislature in 1994 clarified this class of property to include all property owned and operated by not-for-profit organizations not subject to federal income taxation pursuant to paragraphs (2), (3), (4), (7), (8), or (10) of Subsection C of Section S0l of the federal internal revenue code. This bill specifically established that private, not-for-profit country clubs would be assessed at 12% for all land that does not accommodate buildings or improvements. (3) The 2006 Kansas Legislature exempted from all property or ad valorem property taxes levied under the laws of the State, all commercial, industrial, telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existing business or creation of a new business. Equalization Ratios Annually, the Property Valuation Division of the Kansas Department of Revenue conducts a study to compare the assessed valuation of real property to estimated market value based on property sale prices. The study derives an equalization ratio which, when divided into assessed valuation, provides a means to approximate actual market value. According to the 2022 Preliminary Kansas Appraisal/Sales Ratio Study, the equalization ratio for residential real property in Saline County was 10.48%, and commercial and industrial property was 22.45%. A-20 APPENDIXB Form of Continuing Disclosure Undertaking [THIS PAGE INTENTIONALLY LEFT BLANK] CONTINUING DISCLOSURE UNDERTAKING $7,645,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2021-A $5,230,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TE1\1PORARY NOTES SERIES 2021-1 DATED APRIL 29, 2021 This CONTINUING DISCLOSURE UNDERTAKING dated as of April 29. 2021 (the "Continuing Disclosure Undertaking"), is executed and delivered by the City of Salina, Kansas (the "Issuer"). RECITALS 1. This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance of the above-described bonds and notes (collectively, the "Obligations") which are being issued simultaneously herewith as of April 29, 2021, pursuant to the Bond Resolution and Note Resolution (collectively, the "Resolution") adopted by the governing body of the Issuer. 2. The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Obligations and in order to assist the Participating Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"). The Issuer is the only "obligated person" with responsibility for continuing disclosure hereunder. The Issuer covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Continuing Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 2 of this Continuing Disclosure Undertaking, which may include the Issuer's CAFR, so long as the CAFR contains the financial information and operating data described in Section 2(a)(l) and (2). "Beneficial Owner" means any registered owner of any Obligations and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Obligations (including persons holding Obligations through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Obligations for federal income tax purposes. B-1 "Business Day" means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal office or designated payment office of the paying agent or the Dissemination Agent is located are required or authorized by law to remain closed, or ( c) a day on which the Securities Depository or the New York Stock Exchange is closed. "CAFR" means the Issuer's Comprehensive Annual Financial Report, if any. "Dissemination Agent" means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to this Continuing Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of(a) or (b) in this definition;provided however, the term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. "Fiscal Year" means the 12-month period beginning on January 1 and ending on December 31 or any other 12-month period selected by the Issuer as the Fiscal Year of the Issuer for financial reporting purposes. "Material Events" means any of the events listed in Section 3 of this Continuing Disclosure Undertaking. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "Participating Underwriter" means any of the original underwriter(s) of the Obligations required to comply with the Rule in connection with the offering of the Obligations. Section 2. Provision of Annual Reports. (a) The Issuer shall, not later than 180 days after the end of the Issuer's Fiscal Year, commencing with the Fiscal Year ending December 31, 2020, file with the MSRB, through EMMA, the following financial information and operating data (the "Annual Report"): (1) The audited financial statements of the Issuer for the prior Fiscal Year, prepared on a modified accrual basis of accounting other than GAAP. A more detailed explanation of the accounting basis is contained in the Official Statement related to the Obligations. If audited financial statements are not available by the time the Annual Report is required to be provided pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Obligations, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. B-2 (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement related to the Obligations, as described in Exhibit A, in substantially the same format contained in the final Official Statement with such adjustments to formatting or presentation determined to be reasonable by the Issuer. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been provided to the MSRB and are available through EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3, and the Annual Report deadline provided above shall automatically become 180 days after the end of the Issuer's new Fiscal Year. (b) Pursuant to Section ( d)(3) of the Rule, the provisions of Section 2 hereof shall not apply to the Notes, because they have a stated maturity of less than 18 months. ( c) The Annual Report shall be filed with the MSRB in such manner and format as is prescribed by the MSRB. Section 3. Reporting of Material Events. Not later than 10 Business Days after the occurrence of any of the following events, the Issuer shall give, or cause to be given to the MSRB, through EMMA, notice of the occurrence of any of the following events with respect to the Obligations ("Material Events"): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Obligations, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation ofa merger, consolidation, or acquisition involving the obligated person B-3 or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of the trustee, if material; (15) incurrence of a Financial Obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties. Except as provided in Section 2(b) hereof, if the Issuer has not submitted the Annual Report to the MSRB by the date required in Section 2(a), the Issuer shall send a notice to the MSRB of the failure of the Issuer to file on a timely basis the Annual Report, which notice shall be given by the Issuer in accordance with this Section 3. Section 4. Termination of Reporting Obligation. The Issuer's obligations under this Continuing Disclosure Undertaking shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Obligations. If the Issuer's obligations under this Continuing Disclosure Undertaking are assumed in full by some other entity, such person shall be responsible for compliance with this Continuing Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Obligations, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3. Section 5. Dissemination Agents. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Continuing Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Continuing Disclosure Undertaking. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Undertaking, the Issuer may amend this Continuing Disclosure Undertaking and any provision of this Continuing Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Undertaking. In the event of any amendment or waiver of a provision of this Continuing Disclosure Undertaking, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type ( or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (1) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2) the Annual Report for the year in which the B-4 change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Continuing Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Continuing Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that required by this Continuing Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that specifically required by this Continuing Disclosure Undertaking, the Issuer shall have no obligation under this Continuing Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Default. If the Issuer fails to comply with any provision of this Continuing Disclosure Undertaking, any Participating Underwriter or any Beneficial Owner of the Obligations may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Continuing Disclosure Undertaking. A default under this Continuing Disclosure Undertaking shall not be deemed an event of default under the Resolution or the Obligations, and the sole remedy under this Continuing Disclosure Undertaking in the event of any failure of the Issuer to comply with this Continuing Disclosure Undertaking shall be an action to compel performance. Section 9. Beneficiaries. This Continuing Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Participating Underwriter, and the Beneficial Owners from time to time of the Obligations, and shall create no rights in any other person or entity. Section 10. Severability. If any provision in this Continuing Disclosure Undertaking, the Resolution or the Obligations shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11. Electronic Transactions. The arrangement described herein may be conducted and related documents may be sent, received, or stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 12. Governing Law. This Continuing Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Kansas. [Remainder of Page Intentionally Left Blank.] B-5 IN WITNESS WHEREOF, the Issuer has caused this Continuing Disclosure Undertaking to be executed as of the day and year first above written. CITY OF SALINA, KANSAS (SEAL) Mayor City Clerk B-6 EXHIBIT A TO CONTINUING DISCLOSURE UNDERTAKING FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial information and operating data contained in the following sections and tables contained in Appendix A of the final Official Statement (with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer) relating to the Obligations: • Financial Overview of the City • FINANCIAL INFORMATION CONCERNING THE CITY -Assessed Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Estimated Actual Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Collections • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Levies • FINANCIAL INFORMATION CONCERNING THE CITY -Largest Taxpayers B-7 ff HIS PAGE INTENTIONALLY LEPT BLANK] APPENDIXC December 31, 2021 Annual Comprehensive Financial Report The following is the Annual Comprehensive Financial Report for the City of Salina, Kansas for the fiscal year ended December 31, 2021, including financial statements as audited by the firm of Gordon CPA LLC, Lawrence, Kansas. Other than auditing said financial statements, Gordon CPA LLC has not performed any procedures relating to this offering document. [THIS PAGE INTENTIONALLY LEFT BLANK] ANNUAL COMPREHENSIVE FINANCIAL REPORT OF CITY OF SALINA, KANSAS 300 West Ash Street P.O. Box736 Salina, Kansas 67402-0736 For the Fiscal Year Ended December 31, 2021 Prepared by Department of Finance and Administration of City of Salina, Kansas CITY OF SALINA, KANSAS Annual Comprehensive Financial Report For the year ended December 31, 2021 Letter of Transmittal Organizational Chart List of Principal Officials TABLE OF CONTENTS INTRODUCTORY SECTION FINANCIAL SECTION Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements: Government-wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet -Governmental Funds Reconciliation of the Total Governmental Fund Balance to Net Position of Governmental Activities Statement of Revenues, Expenditures, and Changes in Fund Balance -Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance with the Government-Wide Statement of Activities Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GAAP Basis) General Fund Tourism and Convention Fund Special Gas Fund Sales Tax Capital Fund Statement of Net Position -Proprietary Funds Statement of Revenues, Expenses, and Changes in Net Position -Proprietary Funds Statement of Cash Flows -Proprietary Funds Statement of Fiduciary Net Position -Fiduciary Funds Statement of Changes in Fiduciary Net Position -Fiduciary Funds i -iv V vi 1-3 4-15 16 17 18 19 20 21 22 23 24 25 26 27 28-29 30 31 CITY OF SALINA, KANSAS Annual Comprehensive Financial Report For the year ended December 31, 2021 TABLE OF CONTENTS-CONTINUED FINANCIAL SECTION -CONTINUED Notes to the Basic Financial Statements Required Supplementary Information Other Postemployment Benefits Schedule of Changes in the City's Total OPEB Liability and Related Ratios Other Postemployment Benefits -KPERS Schedule of Changes in the City's Total OPEB Liability and Related Ratios KPERS Pension Plan Schedule of City's Proportionate Share of the Net Pension Liability Schedule of City Contributions Combining Statements and Individual Fund Schedules Combining Statements -Nonmajor Funds Fund Descriptions Combining Balance Sheet -Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds Combining Balance Sheet -Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Special Revenue Funds Combining Balance Sheet -Nonmajor Permanent Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Permanent Funds Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Non-GMP Basis): Bicentennial Center Fund Business Improvement District Fund Neighborhood Park Fund Special Parks and Recreation Fund Special Alcohol Fund Sales Tax Economic Development Fund Arts & Humanities Fund Debt Service Fund Solid Waste Disposal Fund Water and Sewer Fund Sanitation Fund Golf Course Fund Workers' Compensation Reserve Fund Health Insurance Fund Central Garage Fund Page 32-70 71 72 73 73 74-75 76 77 78-79 80-81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 Internal Service Fund Descriptions CITY OF SALINA, KANSAS Annual Comprehensive Financial Report For the year ended December 31, 2021 TABLE OF CONTENTS-CONTINUED FINANCIAL SECTION -CONTINUED Combining Statement of Net Position -Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Net Position -Internal Service Funds Combining Statement of Cash Flows -Internal Service Funds STATISTICAL SECTION Net Position by Component-Last Ten Fiscal Years Changes in Net Position -Last Ten Fiscal Years Fund Balances, Governmental Fund -Last Ten Fiscal Years Changes in Fund Balances, Governmental Funds -Last Ten Fiscal Years Tax Revenues by Source, Governmental Funds -Last Ten Fiscal Years Assessed and Estimated Actual Value of Taxable Property-Last Ten Fiscal Years Direct and Overlapping Property Tax Rates -Last Ten Fiscal Years Principal Property Taxpayers Property Tax Levies and Distributions Direct Sales Rate by Taxing Entity Water Sales by Class of Customer Ratio of Outstanding Debt by Type Ratio of Net General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Pledged Revenue Coverage Demographic and Economic Statistics Principal Employers 99 100 101 102-103 Schedule 1 104 2 105 3 106 4 107 5 108 6 109 7 110 8 111 9 112 10 113 11 114 12 115 13 116 14 117 15 118 16 119 17 120 18 121 CITY OF SALINA, KANSAS Annual Comprehensive Financial Report For the year ended December 31, 2021 TABLE OF CONTENTS -CONTINUED GOVERNMENTAL AUDIT SECTION Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards Schedule of Findings and Questioned Costs 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 Independent Auditor's Report on Compliance for Each Major Federal Program and Internal Control Over Compliance Required by the Uniform Guidance 122 123 124 -125 126 -127 128 -129 INTRODUCTORY SECTION DEPARTMENT OF FINANCE AND ADMINISTRATION 300 West Ash, P.O. Box 736 Salina, Kansas 67402-0736 Cityo r Salina October 14, 2022 To the Citizens of the City of Salina, Kansas: TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 Website: www.salina-ks.gov The Annual Comprehensive Financial Report of the City of Salina, Kansas (the "City") for the year ended December 31, 2021 , 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, 2021 in the general fund and the special revenue funds. Various internal compliance procedures are implemented to ensure proper implementation of the budget as well as to maintain a degree of accountability for both revenues and expenditures. Independent Audit Kansas Statutes Annotated 75-1122 requires an annual audit of the books of account, financial records and transactions of all administrative departments of the City by independent certified public accountants selected by the City Commission. This requirement has been complied with and the auditor's opinion has been included in this report. Profile of the Community The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas, and became a City of the First Class on July 9, 1920. The City has had a Commission-City Manager form of government since 1921. The Commission is comprised of five members elected at large. Each year the commission chooses one member to 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 2022. 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, Stryten Manufacturing, Great Plains Manufacturing, 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 1.52 in 2021. 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 2021. 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 410 jobs to the Salina area. Both projects remained on track during 2021. 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. In 2021 Stiefel Theatre completed renovations and The Garage, an educational and historical exhibit about automobiles, neared completion. 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 2021, in addition to merit increases of up to 3.0%. In 2020, the City cost of living increase was 2.0%, with no merit increases. 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 Annual Comprehensive Financial Report was made possible by the dedicated Finance staff of the City of Salina and the professional advice and efforts of the Gordon CPA 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 I I Risk Municipal Management Court I Development Services Lauren Driscoll I / " Building Services Neighborhood Services Planning & Zoning Community Relations , I Arts & Humanities I Brad Anderson I Smoky Hill Museum ] I Continuous Process Improvement Scott Gardner ( City of Salina ) I CITIZENS 11 CITY CQMMISSION Trent Davis, Mayor Karl Ryan Bill Longbine Greg Lenkiewicz Mike Hoppock City Manager Michael Schrage I Deputy City Assistant City Manager Manager Jacob Wood Shawn Henessee I Parks & Recreation Police Jeff Hammond Brad Nelson l I / '\ /' '\ Parks Division Administration Recreation Division Patrol Division Golf Course Support Division Facility Maintenance Animal Services Investigative Division , Bicentennial Center ,, \,. ~ I I I Public Works I Utilities I Jim Teutsch Martha Tasker I I / / Engineering Water Plant Division Public Services Streets Traffic Control Flood Control Sanitation Solid Waste Central Garage ' Human Resources Natalie Fischer • Contract Position V Wastewater Plant Division Utility Division Water Distribution Wastewater '-Collection I Legal Services Clark Mize & Linville Chartered* Grel! Benl!tson I I Fire Tony Sneidar I /' Fire Administration Fire Suppression Fire Prevention EMS \,. I I Finance/ Administration Debbie Pack I '\ City Clerk Water Customer Accounting Finance '-.I I Computer Technology Interim-Scott Gardner City of Salina, Kansas List of Principal Officials City Commission Mayor Trent Davis Vice-Mayor Karl Ryan Commissioner Bill Longbine Commissioner Greg Lenkiewicz Commissioner Mike Hoppock City Executive Staff Mike Schrage, City Manager Jacob Wood, Deputy City Manager Shawn Henessee, Assistant City Manager Greg Bengtson, City Attorney Debbie Pack, Director of Finance & Administration Brad Anderson, Director of Arts & Humanities Lauren Driscoll, Director of Community & Development Services Natalie Fischer, Director of Human Resources Scott Gardner, Continuous Process Improvement Director & Interim Computer Technology Dir. Jeff Hammond, Director of Parks & Recreation Sean Morton, Interim Police Chief Martha Tasker, Director of Utilities Jim Teutsch, Director of Public Works Tony Sneidar, Fire Chief vi FINANCIAL SECTION In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for twelve months beyond the financial statement date. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve, collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the economic decisions of users made on the basis of these financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: • Exercise professional judgement and maintain professional skepticism throughout the audit • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amount and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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 City's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgement, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Emphasis of Matter As discussed in Note 3. to the financial statements, certain errors in amounts previously reported as of December 31, 2020, were discovered by management of the City during the current year. Accordingly, these amounts have been restated in the December 31, 2021, financial statements now presented, and adjustments have been made to fund balance 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, the schedule of the City's proportionate share of the net pension liability, the schedule of City contributions, and the schedule of changes in the City's total OPEB liability and related ratios, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2 Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The statements and schedules listed under supplementary information in the accompanying table of contents, including the schedule of expenditures of federal awards as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditors' report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 14, 2022, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is solely 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 accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Co~d,ytcPA LLC Certified Public Accountant Lawrence, Kansas October 14, 2022 3 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2021 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 , 2021 . 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 $74.1 million from current operations with net position change of $79.0 million and $(4.9) million in governmental activities and business-type activities, respectively. ♦ At the close of 2021, the City's governmental funds reported combined ending fund balances of $110.2 million, an increase of $78.9 million from the prior year. The Capital Projects expenditures increased $12.2 million from prior year. The General Fund fund balance increased $5.9 million, and all Other Governmental Funds fund balances increased $73.0 million over the prior year. The majority of this amount, $66.7 million, comes from the Former Schilling AFB Environmental Fund. ♦ At the close of 2021, the City's enterprise funds reported a combined ending Net Position of $93.5 million, a decrease of $3.1 million compared to the prior year. The Water and Sewer Fund, the Sanitation Fund, Solid Waste Disposal and the Golf Fund all reported slight decreases to net position for the year. ♦ Revenues from governmental activities increased by $67.6 million from the prior year and revenues from business type activities increased $4.5 million from the prior year. ♦ 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, 2021 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 Cemetery and Mausoleum Endowments, and the Tri-centennial Commission fund. Notes to the Financial Statements The notes to the financial statements are an integral part of the basic financial statements since they contain valuable additional information necessary for gaining a complete understanding of the City's financial statements. 5 Other Information CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2021 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 (25%) and business-type (75%) activities. Charges for services account for about 24% ($38.6 million) of the City's revenue stream. Charges for service depend on both the rate that is set for the activity, as well as the volume of services provided. Significant services include water and wastewater fees, sanitation and landfill fees, licenses and permits, inspection fees and golf course fees. Charges for services increased in 2021, largely due to the COVID pandemic as most services were paused temporarily in 2020. This was offset by lower expenses. Sales taxes are the next largest component of the revenue mix, providing 16% ($26.7 million) of the total revenues. The City receives a 1.25% City-wide sales tax, and also a portion of the County-wide 1.5% 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 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 9% ($15.5 million) of total revenues. Property taxes consist of two components: Real estate and personal property taxes which are determined by the mill levy set by the city and the assessed value of the property; and motor vehicle taxes which are established by a countywide average tax rate and the assessed value of the vehicle. Real estate assessed value increased by 1.0%. The total City mill levy decreased by 1.2%. The overlapping levy increased in 2021 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, 2021 Motor vehicle value increased 1.7%. Motor vehicle taxes are distributed based on a formula using prior year's tax effort (similar to the Countywide Sales Tax Distribution). The following table summarizes the comparative property assessed values and tax levy rates: Comparative Property Values and Tax Levy Rates Fiscal (Budget)Year 2021 2020 Change Real Estate and Personal Property Assessed Valuation $ 459,861,906 $ 456,362,518 $ 3,499,388 City Mill LelJY ($ per $1,000) Operating (General Fund) 23.847 22.908 0.939 Debt Service 6.803 6.812 (0.009) Total City Rate 30.452 30.650 (0.198) Total Overlapping LelJY 139.738 140.308 (0.570) Percent Total Taxes Collected 98.0% 97.8% 0.002 Ratio of Total Taxes (including delinquent collections) to taxes levied 99.1% 99.4% (0.003) Motor Vehicle Valuation $ 56,545,812 $ 54,589,132 1,956,680.000 The unemployment rate in Salina decreased from 3.4% at the end of 2020 to 2.3% at the end of 2021, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force was 24,962 in 2021. In 2021, the top ten property taxpayers accounted for 9.99% 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 and deferred inflows of resources by $316.5 million as of December 31, 2021 . This represents an increase in net assets of $76 million over 2020. A comparative Condensed Statement of Net Position at December 31, 2021 and 2020: 7 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2021 Condensed Statement of Net Position As of December 31 (in $000) Governmental Business-Type Activities Activities Total Prima!Y Government %of % of 2021-2020 2021 2020 2021 2020 2021 Total 2020 Total change Cash and in\€Stments 120,526 $42,246 $44,760 $38,876 $ 165,286 32% $ 81,122 19% $ 84,164 Other current assets 17,262 16,910 2,235 2,082 19,497 4% 18,992 4% 505 Noncurrent ( capital) assets 218,619 215,438 117 494 119118 336,113 65% 334,556 77% 1,557 Total assets 356,408 274,594 164,489 160,076 520,897 100% 434,670 100% 86,227 Total deferred outflov.s of 7,444 8 761 903 1117 8 347 100% 9,878 100% {1,531) resources Toiai asseis and deferred outflO'Mi of resources 363,852 283,355 165,392 161,192 529,244 444,547 84697 Current liabilities 17,292 17,230 5,539 3,964 22,831 12% 21,194 11% 1,637 Noncurrent liabilities 100,427 106,651 64,899 60,379 165,326 88% 167 030 89% (1,704) Total liabilities 117 719 123,881 70,438 64,343 188 157 100% 188,224 100% (67) Total deferred infiCl'Ml of resources 22,999 15,392 1,424 240 24,423 15,632 8 791 Net position: Net inwstment in capital assets 143,768 143,559 56,004 63,742 199,772 63% 207,301 91% (7,529) Restricted for permanent funds 559 543 559 0% 543 0% 16 Restricted for public VIOrks 66,698 66,698 21% 0% 66,698 Restricted for debt service 2,112 1,724 1,132 1,175 3,244 1% 2,899 1% 345 Unrestricted 9,997 {1,744) 36,394 31,692 46,391 15% 29,948 8% 16,443 Total net position 223,134 144,082 93,530 96,610 316,664 100% 240,692 100% 75,972 Percent of total net position 70% 61% 30% 39% 100% 100% Cash and in\€Stments as a percentage of current liabilities 697% 245% 808% 981% 724% 383% 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, 2021 In 2021, the amount of net investment in capital assets decreased by $7.5 million. Amount restricted for debt service increased by $345,000. Amount restricted for public works increased by $66.7 million. Unrestricted increased by $16.4 million. Outside of these changes, 2021 resulted in a $16,000 increase to the net position. Total liabilities slightly decreased in governmental activities and slightly increased in business-type activities. In governmental activities, current liabilities increased, and non-current liabilities decreased primarily due to an increase in unearned revenue and a decrease in general obligation bonds. Statement of Activities A Condensed Statement of Activities is shown below. Condensed Statement of Activlies For the Year Ended December 31 (in $000) Governrrental Business.. Type Total Prima[}'. Government Acti'vities Acti'vities 2021-2020 2021 2020 2021 2020 2021 ~ 2020 ~ Change Program Revenues: Charges for Ser.1ces 9,629 8,400 29,001 26,513 38,630 24% 34,913 37% 3,717 Operating Grants and Contributions 4,711 4,714 4,711 3% 4,714 5% (3) Capital Grants and Contributions 66,150 66,150 General Revenues: Property Taxes 13,885 14,887 13,885 8% 14,887 16% (1,002) Sales Taxes 26,720 23,448 26,720 16% 23,448 25% 3,272 Other Taxes 8,759 6,117 8,759 5% 6,117 7% 2,642 lmestment Revenue 158 286 4 158 0% 290 0% (132) Other Miscellaneous 2,405 81328 2,416 447 41821 3% 8,775 9% (31954) Total Revenues: 132,417 66,180 31,417 26,964 163,834 60% 93,144 100% 70,690 Expenses: General Government 16,098 10,395 16,098 18% 10,395 14% 5,703 Public Safety 23,877 24,672 23,877 27% 24,672 33% -795 Public Works 16,335 10,511 16,335 18% 10,511 14% 5,824 Public Health and Sanitation 2,315 1,323 2,315 3% 1,323 2% 992 Culture and Recreation 6,305 5,033 6,305 7% 5,033 7% 1,272 Planning and Developrrent 2,289 2,004 2,289 3% 2,004 3% 285 Solid Waste Disposal 1,836 2,056 1,836 2% 2,056 3% -220 Water and Sewer 13,310 13,386 13,310 15% 13,386 18% -76 Sanitation 3,655 2,526 3,655 4% 2,526 3% 1,129 Golf Course 878 805 878 1% 805 1% 73 Interest on Long Term Debt 2,827 2,350 21827 3% 2,350 3% 477 Total Expenses 70,046 56,288 19,678 18,773 89,725 100% 75,061 100% 141664 Increase in net assets before transfers 62,371 9,892 11,738 8,191 74,109 18,083 56,026 Transfers and other extraordinary items 16,681 5,133 (161681) (51133) (0) 0 Change in Net Position 79,052 151025 (4,943) 3,058 74,109 181083 56,027 Net Position January 1 144,081 138,359 96,610 93,552 240,691 231,911 8,780 Prior Period Adjustment (9,303) 1,862 0 1,862 -9303 \862 Net Position January 1 restaled 1441081 1291056 981472 931552 242,553 2221608 191945 Net Position December 31 $223,133 $144,081 $93,530 $96,610 $316,662 $240,691 $ 75,971 9 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2021 Governmental Activities. Charges for services attributable to governmental activities totaled $9.6 million, operating grants for those purposes were $4.7 million and capital grants totaled $66.2 million. Charges for services increased, operating grants decreased slightly from the prior year due to the 2020 COVID pandemic as most services were paused temporarily. Capital grants increased due to the City receiving a payment from the U.S. Department of Defense for environmental remediation of the former Schilling Air Force Base in 2021. The balance was funded by general revenues. Sales taxes accounted for $26.7 million of general revenues, with property taxes providing $13.9 million. The net position increased by $79 million as a result of governmental activities. This increase was primarily related to the capital contribution from the federal government and increases in sales and other taxes. Total expenses for governmental activities for the year ending December 31, 2021, were $70 million compared to $59.3 million in 2020. Governmental activities represent 78% of the City's total expenses. The largest element of governmental activity expense was public safety, accounting for 34% 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 $19.7 million, or 22% of the City's total expenses. The majority of this expense ($13.3 million) is attributable to water and sewer operations, with the other activities costing a combined total of $6.4 million. Net position decreased by $4.9 million. This increase was primarily related to an overall increase in business-type activity expenses after 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, 2021 and December 31 ,2020. Governmental Fund Balances as of December 31, (in $000's) Fund 2021 2020 Change General $ 21,064 $ 15,142 $ 5,922 Tourism and Com.ention 603 327 276 Special Gas 2,362 2,866 (504) Sales Tax Capital 9,402 5,209 4,193 Schilling Capital Improvement 1,494 (1,494) Former Schilling AFB Environmental 66,698 66,698 Debt Sennce 2,112 1,724 388 Capital Projects (922) (4,028) 3,106 SFH QalicB 1,843 1,561 282 Other Governmental Funds 7,052 6,990 62 $ 110,215 $ 31,285 $ 78,930 Total governmental fund balances increased by $78.9 million. The reasons for these changes are varied, including lower expenses during the 2020 COVID pandemic. The Former Schilling AFB Environmental Fund was created to account for funds from the U.S. Government for environmental remediation former air force base located in within City limits. 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, 2021 and 2020. 10 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2021 Consolidated Statement of Revenues and Expenditures for Major Governmental Funds For the years ended December 31 Modified Accrual Basis Fund Revenues (including Other Financing Sources) General Tourism and Convention Special Gas Sales Tax Capital Schilling Capital Improvement Former Schilling AFB Environmental Debt Service Capital Projects SFHQalicB Other Governmental Funds Total Revenues Less Other Sources Revenues, net of other sources Expenditures (including Other Financing Uses) General Tourism and Convention Special Gas Sales Tax Capital Schilling Capital Improvement Former Schilling AFB Environmental Debt Service Capital Projects SFHQalicB Other Governmental Funds Total Expenditures Less Other Uses Expenditures, net of other uses (in $000's) $ 46,346 $ 1,764 1,598 9,639 462 67,959 12,855 20,276 493 6,540 167,932 (37,405) $ 130,528 $ $ $ 40,424 $ 1,487 2,102 5,447 1,956 1,261 12,467 17,169 210 6,478 89,002 (6,399) 82,603 $ 44,560 $ 1,192 2,209 8,871 7 7,740 8,598 494 7,757 81,428 (18,515) 62,913 $ 38,921 $ 1,316 1,534 6,067 462 7,155 4,974 244 5,865 66,538 (4,271 ) 62,267 $ Change 1,786 572 (611) 768 455 67,959 5,115 11 ,678 (1) (1,217) 86,504 (18,890) 67,615 1,503 171 568 (620) 1,494 1,261 5,312 12,195 (34) 613 22,464 (2,128) 20,336 Total revenues, including other sources, increased $86.5 million compared to 2020, with Former Schilling AFB Environmental Fund showing the largest increase between the two years, which was $68 million. Total expenditures increased $22.5 million over 2020. The majority of that increase, $12.2 million was in the Capital Projects Fund as a result of increased spending on projects, which has slowed 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, 2021 Comparative Summary Statement of Net Position as of December 31 (in $000's) Solid Waste Disposal Water and Sewer 2021 2020 Change 2021 2020 Change Current Assets $ 9,164 $ 8,075 $ 1,089 $ 36,210 $ 30,396 $ 5,814 Capital Assets 3,206 3,335 (129) 112,719 114,104 (1,385) Deferred Outflows 115 137 (22} 569 706 (137} Total Assets and deferred outflows $ 12,485 $ 11,547 $ 938 $ 149,498 $ 145,206 $ 4,292 Current Liabilities $ 2,306 $ 448 $ 1,858 $ 3,134 $ 3,394 $ (260) Noncurrent Liabilities 4,360 4,929 (569) 59,760 54,285 5,475 Deferred Inflows 153 33 120 921 151 770 Total Liabilities $ 61819 $ 5,410 $ 11409 $ 63,815 $ 57,830 $ 5,985 Net investment in capital assets $ 1,185 $ 910 $ 275 $ 53,250 $ 61,154 $ (7,904) Restricted 1,132 1,175 (43) Unrestricted 4,482 5,227 (745} 31,301 25,046 6,255 Total Net Position $ 51667 $ 6,137 $ (470l $ 85,683 $ 87,375 $ (1,692) Current Assets as percentage of current liabilities 397% 1802% 1155% 896% Sanitation Golf Course 2021 2020 Change 2021 2020 Change Current Assets $ 1,508 $ 2,395 $ (887) $ 112 $ 91 $ 21 Capital Assets 1,135 1,003 132 433 675 (242) Deferred Outflows 127 164 (37) 91 110 {1 9) Total Assets and deferred outflo\NS $ 21771 $ 3,562 $ (791 ) $ 636 $ 876 $ (240) Current Liabilities $ 82 $ 97 $ (15) $ 17 $ 25 $ (8) Noncurrent Liabilities 562 833 (271) 216 330 (114) Deferred Inflows 264 41 223 86 15 71 Total Liabilities $ 909 $ 971 $ (62) $ 319 $ 370 $ {51 } Net investment in capital assets $ 1,135 $ 1,003 $ 132 $ 433 $ 675 $ (242) Restricted Unrestricted 727 1,588 (861 } (116) (1 69) 53 Total Net Position $ 11862 $ 2,591 $ (729) $ 317 $ 506 $ p 89l Current Assets as percentage of current liabilities 1839% 2469% 674% 364% 12 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2021 Revenues, Expenses, and Changes in Net Position All enterprise funds continue to show healthy net position. Comparative Summary of Revenue, Expenses and Changes in Net Position for the Year Ended December 31 (in 000's) Solid Waste Diseosal Water and Sevver 2021 2020 Change 2021 2020 Change Operating Revenues $ 3,636 $ 3,322 $ 314 $ 23,668 $ 19,504 $ 4,164 Operating Expenses 1,746 2,011 {265) 12,078 12,460 (382) Operating Income 1,890 1,311 579 11 ,590 7,044 4 546 Non-operating revenues (expenses) (90) {45) (45) (1,232} {922) {310) Income (Loss) before Transfers 1,800 1,266 534 10,359 6,122 4,237 Transfers in (out) (2,271 ) (2,729) 458 {13,913) (2,006) (11,907) Change in Net Position (471 ) {1 ,463) 992 {3,554) 4,116 (7,670) Net Position January 1 6,137 5,640 497 87,375 85,219 2,156 Restatement 1,960 (\960) 1,862 {1 ,960) 3,822 Net Position, January 1, restated 6,137 7,600 (\463) 89,237 83,259 5,978 Net Position December 31 $ 5,666 $ 6,137 $ i471 i $ 85,683 $ 87,375 $ p,692l Sanitation Golf Course 2021 2020 Change 2021 2020 Change Operating Revenues $ 3,423 $ 3,194 $ 229 $ 689 $ 939 $ (250) Operating Expenses 3,655 2,526 1,129 878 805 73 Operating Income {232) 668 (900) {1 89) 134 (323) Non-operating revenues (expenses) Income (Loss) before Transfers (232) 668 (900) (189) 134 (323) Transfers in (out) (497) (497) 100 {100) Change in Net Position {729) 171 {900) {189) 234 (423) Net Position January 1 2,591 2,420 171 506 272 234 Restatement Net Position January 1, restated 2,591 2,420 171 506 272 234 Net Position December 31 $ 1,862 $ 2,591 $ !729l $ 317 $ 506 $ p 89l 13 Budgetary Highlights CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2021 The objective of budgetary controls is to ensure compliance with legal prov1s1ons embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the fund level, in accordance with State Statutes. Management control is maintained at the departmental level. Within the departments, considerable discretion is permitted. The City uses an encumbrance accounting system, in which estimated purchase orders are recorded prior to the release of purchase orders to vendors. Open purchase orders are reported as reservations of budgetary basis fund balances as of December 31, 2021. 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 as of December 31, 2021, was $336,112,690, net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets as of December 31, 2021 and 2020: Equipment, Furniture and Fixtures Vehicles Buildings and Improvements Land Leased land under capital leases Infrastructure Leasehold Improvements Construction in Progress Total Capital Assets Balances Net of Depreciation as of December 31 (in $000's) Governmental Activi~ Business-Ty~ Activi~ 2021 2020 2021 2020 $ 2,378 $ 2,309 $ 1,042 $ 1,280 2,315 2,676 885 1,079 27,905 29,218 7,964 8,103 24,224 24,224 2,386 2,386 423 423 140,690 130,010 83,646 78,294 357 357 20,327 26,221 21 ,571 27976 $ 218,619 $ 215,438 $ 1171494 $ 119,118 Changes to capital assets may be summarized as follows: Additions Retirements Depreciation Net Additions Changes to Capital Assets, 2021 (in $000's) Governmental Business-Type Acti\ti!Y: Activi!Y: 24,371 11,074 (14,616) (8,806) (6,574} (31892} $ 3 181 $ P1624l 14 Total 2021 2020 $ 3,420 $ 3,589 3,200 3,755 35,869 37,321 26,610 26,610 423 224,336 208,304 357 41 ,898 54197 $ 3361113 $ 3331776 Total 35,444 (23,421) (1 0,466) $ 1 557 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2021 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 as of December 31 , 2021, totaled $62,624,018. In addition, there were temporary notes outstanding in the amount of $3,713,786, and loans payable outstanding in the amount of $12,226,942 related to SFH QalicB, a blended component unit of the City. Business-type activities had $9,525,145 in revenue bonds outstanding and $7,998,491 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 $43,966,366 and temporary notes outstanding totals $1,611 ,714. The City engaged in the following debt transactions during 2021 : • On April 29th, the City issued Series 2021-A, General Obligation Bonds in the amount of $7,645,000. The proceeds were used to finance construction of a Police Facility, Basketball Court, Pheasant Ridge 3, Stone Lake 2 and 9 South . • On September 9th, the City issued Series 2021-B General Obligation Refunding Bonds in the amount of $6,220,000. The proceeds were used to refund outstanding bonds, Series 2013-8 in the amount of $2 ,310 ,000 and Series 2014-A in the amount of $3,910,000. • On April 29th, the City issued Series 2021-1 , Temporary Notes in the amount of $5,230,000, to finance construction costs for the final design of the Smoky Hill River project, the 9th Street Bridge project, sanitation trucks and HVAC replacement at Heritage Hall. 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 CITY OF SALINA, KANSAS STATEMENT OF NET POSITION December 31, 2021 Prima~ Government Total Total Governmental Business-type Activities Activities ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets: Cash and investments Receivables (net of allowance for uncollectibles) Accounts Taxes Interest Inventory Restricted cash and investments Prepaid expenses Total current assets Noncurrent assets: Capital assets, nondepreciable Construction in progress Land Capital assets, depreciable Less: Accumulated depreciation Total noncurrenl assets Total assets Deferred outflows of resources: KPERS OPEB deferred outflows of resources OPEB deferred outflows of resources Pension deferred outflows of resources Deferred charge on bond issuance Total deferred outflows of resources Total assets and deferred outflows of resources Liabilities: Current liabilities: Accounts payable Retainage payable Accrued liabilities Accrued interest payable Deposits payable Unearned revenue Current portion of compensated absences Current portion of temporary notes payable Current portion of loans payable Current portion of revenue bonds payable Current portion of general obligation bonds payable Total current liabilities Noncurrent liabilities: Accrued liabilities Compensated absences Security deposits returnable OPEB obligation KPERS OPEB obligation Net pension liability Loans payable Revenue bonds payable General obligation bonds payable Landfill post-closure care liabilities Total noncurrent liabilities Total liabilities Deferred inflows of resources: Unavailable revenue -property taxes KPERS OPES deferred inflows of resources OPES deferred inflows of resources Pension deferred inflows of resources Total deferred inflows of resources Total liabilities and deferred Inflows of resourees Net Posttlon Net Investment in capilal assets Restricted for: Permanent funds: Expendable Public works Debt service Unrestricted Total net position $ 120,526,465 $ 44,759,681 2,234,136 1,827,625 14,461,875 4,144 16 304,079 407,146 258,041 137,788,740 46,994,468 20,326,839 21,570,873 24,646,334 2,386,334 313,096,294 172,443,670 139,450,408 78,907,246 218,619,059 117,493,631 356.407,799 164,488,099 63,151 30,586 303,660 49,293 7,077,223 822,774 7 444 034 902 653 $ 363,851,833 $ 165,390,752 $ 1,864,097 397,378 737,931 614,807 477,718 535,809 422,066 3,551,978 1,252,185 290,568 3,713,786 1,611,714 383,064 775,000 5,079,941 1,123,223 17,292 443 5,538,822 168,990 1,586,470 361,164 3,502,471 569,713 340,238 164,791 25,057,864 2,261,985 12,226,942 43,583,302 8,750,145 57,544,077 6,875,268 2,332 241 100,427,052 64,898,609 117,719,495 70,437,431 13,922,553 143,112 67,659 273,521 45,698 8,659,808 1,310,457 22,998,994 1,423,814 $140,718,489 $ 71,661,245 $ 143,766,099 56,003,629 558,976 66,697,767 2,111,664 1,131,606 9,996,838 36,394,272 $ 223,133,344 $ 93,529,507 The notes to the basic financial statements ere sn integral part of this statement. 16 Com~nent Units Total Salina Salina Primary Housing Airport Government Aulhori,l Authorilj $ 165,286,146 $ 2,183,089 $ 5,303,767 4,061,761 31,885 1,545,489 14,461,875 4,160 711,225 40,154 258,041 115,458 17065 184,783,208 2,370,586 6,866,321 41,897,712 234,592 1,985,221 27,032,668 1,557,554 9,920,765 485,539,964 8,999,012 80,623,761 218 357 654 5,627,631 50,002,230 336,112,690 5,163,527 42,527,517 520,895,898 7,534,113 49,393,838 93,737 300 803 352,953 7,899,997 118,765 197,575 887,276 8,346,687 119,065 1,085,654 $ 529,242,585 $ 7,653,178 $ 50,479,492 $ 2,261,475 $ 44,637 $ 769,715 737,931 614,807 20,827 145,765 1,013,527 193,171 422,066 83,553 3,551,978 9,223 1,542,753 1,937 53,228 5,325,500 383,064 40,800 775,000 6 203164 1,670,000 22,831,265 160177 2,872,679 168,990 78,909 1,947,634 17,432 91,771 4,072,184 505,029 7,868 13,911 27,319,849 392,205 509,789 55,810,244 379,258 8,750,145 64,419,345 23,547,949 2,332,241 165,325,661 496,414 24,542,678 188,156,926 656,591 27,415,357 13,922,553 210,771 5,740 10,726 319,219 9,970,265 16,827 218,778 24,422,808 22 567 229,504 $ 212,579,734 679158 27,644,861 $ 199,771,728 $ 5,163,527 $ 16,889,510 558,976 31,390 66,697,767 3,243,270 46,391,110 1 779,103 5945121 $ 316,662,851 $ 6,974,020 $ 22,834,631 CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2021 Tourism Schilling and Special Sales Tax Capital General Convention Gas Capital lmQrovement ASSETS Cash and investments $ 19,206,886 $ 854 $ 2,434,711 $ 9,589,335 $ Restricted cash Receivables (net) Accounts 1,629,294 602,631 Taxes 11,025,946 316,446 Interest 4,144 Inventory 167,703 Due from other funds 1,158 Total assets $ 32,035,131 $ 603,485 $ 2,751,157 $ 9,589,335 $ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable $ 109,494 $ -$ 31,748 $ 141,907 $ Retainage payable 357,472 45,000 Unearned revenue Temporary notes payable Due to other funds Total liabilities 109,494 389,220 186 907 Deferred inflows of resources Unavailable revenue -property taxes 10,728,135 Unavailable revenue -other 133,970 Total deferred inflows of resources 10,862,105 Fund balance: Nonspendable 167,703 Restricted 603,485 2,140,934 Committed 8,379,831 Assigned 152,402 221,003 1,022,597 Unassigned 20,743,427 Total fund balances 21,063,532 603,485 2,361,937 9,402,428 Total liabilities, deferred inflows of resources and fund balances $ 32,035,131 $ 603,485 $ 2,751,157 $ 9,589,335 $ Former Other Total Schilling AFB Debt Capital SFH Governmental Governmental Environmental Service Projects QalicB Funds Funds $ 66,742,220 $ 2,052,630 $ 4,295,503 $ 3,834 $ 10,798,509 $ 115,124,482 258,041 258,041 1,605,407 2,211 3,839,543 3,119,483 14,461,875 4,144 167,703 10,000 11,158 $ 66,742,220 $ 5,172,113 $ 4,3051503 $ 1,867,282 $ 10,800,720 $ 133,866,946 $ 44,453 $ -$ 1,258,184 $ -$ 195,690 $ 1,781,476 321,636 13,823 737,931 3,551,978 3,551,978 3,647,188 3,647,188 10,000 1,158 11,158 44,453 5,227,008 23,823 3,748,826 9,729,731 3,060,449 13,788,584 133,970 3,060,449 13,922,554 167,703 66,697,767 2,111,664 471,333 72,025,183 1,843,459 6,373,218 16,596,508 343,350 1,739,352 [921,505) [136,007) 19,685,915 66,697,767 2,111,664 [921,505] 1,843,459 7,051,894 110,214,661 $ 66,742,220 $ 5,172,113 $ 4,305,503 $ 1,867,282 $ 10,800,720 $ 133,866,946 The notes to the basic financial statements are an integral part of this statement. 18 [THIS PAGE INTENTIONALLY LEFf BLANK J CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION OF GOVERNMENTAL ACTIVITIES December 31, 2021 Total Governmental Fund Balances Amounts reported for governmental activities in the statement of net position are different because Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds The cost of capital assets is Accumulated depreciation is Pension contributions are reported as an expense in the funds and as a deferred outflow of resources in the governmental activities in the statement of net position. Pension fundings are reported as a revenue in the funds and as a deferred inflow of resources in the governmental activities in the statement of net position. Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. An internal service fund is used by the City's management to charge the costs of the worker's compensation program. The assets and liabilities of the internal service fund are included with governmental activities. The following liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These liabilities at year end consist of: Compensated absences Net OPEB obligation Net pension liability Bonds payable Loans payable Accrued interest on the bonds Net Position of Governmental Activities 357,901,233 139,296,083 2,808,600 3,834,225 24,951,955 62,624,018 12,226,942 477,718 The notes to the basic financial statements are an integral part of this statement. 19 $ 110,214,661 218,605,150 7,405,958 [9,005,574] [1,672,004] 4,508,611 [106,923,458) $ 223, 133,344 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31, 2021 Tourism Schilling and Special Sales Tax Capital General Convention Gas Capital lm1:1rovement REVENUES: Taxes Real estate taxes $ 10,521,583 $ $ $ -$ Delinquent taxes 298,941 Motor vehicle taxes 1,268,419 General sales taxes 15,314,664 Selective sales taxes 9,639,452 other taxes 5,351,559 1,763,976 Intergovernmental 1,144,657 1,357,801 Special assessments Licenses and permits Charges for services 5,841,900 Investment revenue 78,253 Donations Miscellaneous 719 637 80,373 462,374 Total revenues 40,539,613 1,763,976 1 438,174 9,639,452 462,374 EXPENDITURES: Current General government 5,629,698 Public safety 23,214,758 Public works 5,464,894 388,839 Public health and sanitation 746,880 Culture and recreation 3,732,377 Planning and development 55,174 833,830 Miscellaneous Capital outlay 675,363 1,713,301 2,753,166 Debt service Principal retirement Interest and other charges Total expenditures 39 519 144 833 830 2 102 140 2,753,166 Excess [deficiency] of revenue and other sources over [under] expenditures and other [uses] 1,020,469 930,146 [663,966) 6,886,286 462 374 OTHER FINANCING SOURCES [USES] Issuance of bonds Bond and temporary note premium Transfers in 5,806,300 160,000 Transfers [out] [905,500) [653,523) [2,693,350) [1,956,351) Total other financing sources [uses] 4,900,800 (653,523) 160,000 (2,693,350) 11,956,351) Net change in fund balance 5,921,269 276,623 [503,966] 4,192,936 [1,493,977] Fund balance -Beginning of year 15,142,263 326,862 2,865,903 5,209,492 1,493,977 Fund balance -End of year $ 21,063,532 $ 603,485 $ 2,361,937 $ 9,402,428 $ Former Other Total Schilling AFB Debt Capital SFH Governmental Governmental Environmental Service Projects QalicB Funds Funds $ -$ 2,978,243 $ ' -$ -$ -$ 13,499,826 86,458 385,399 374,619 1,643,038 15,314,664 1,765,821 11,405,273 7,115,535 65,900,000 250,000 2,239,721 70,892,179 1,405,148 1,405,148 10,300 10,300 492,917 375,649 6,710,466 65,998 45 13,873 158,169 89,647 89,647 635,492 1,897,876 65,965,998 4,844,468 250,000 492,962 5,130,503 130,527,520 5,629,698 23,214,758 312,121 6,165,854 1,549,128 2,296,008 1,584,686 5,317,063 1,189,341 2,078,345 1,880 1,880 1,261,025 16,875,459 10,085 1,650,384 24,938,783 10,549,900 10,549,900 1,917,407 293,791 200,044 2,411,242 1,261,025 12,467,307 17,169,250 210 129 6,287,540 82,603,531 64,704,973 17,622,839] 116,919,250] 282,833 [1,157,037) 47,923,989 6,167,545 7,645,000 13,812,545 592,398 592,398 1,992,794 1,842,841 11,788,154 1,409,532 22,999,621 [190,042) [6,398,766] 1,992,794 8,010,386 20,025,552 1,219,490 31,005,798 66,697,767 387,547 3,106,302 282,833 62,453 78,929,787 1,724,117 [4,027,807) 1,560,626 6,989,441 31,284,874 $ 66,697,767 $ 2,111,664 $ 19211505') $ 1,843,459 $ 7,0511894 $110,214,661 The notes to the basic financial statements are an integral part of this statement. 20 CITY OF SALINA, KANSAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2021 Total Net Change In Fund Balances -Governmental Funds Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net position and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capital outlays exceeds depreciation in the period. Capital outlays Depreciation expense Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. This is the amount by which interest increased. 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. Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. Some expenses reported in the statement of activities, such as compensated absences and other post employment benefits, do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities. Bond, temporary note, loan and lease proceeds are other financing sources in the governmental funds, but they increase long-term liabilities in the statement of net position and do not affect the statement of activities. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. 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. Changes In Net Position of Governmental Activities 9,755,057 [5,916,846] The notes to the basic financial statements are an integral part of this statement. 21 $ 78,929,787 3,838,211 [415,843] 959,307 [656,562) 477.418 [231,324] [14,900,350] 11,051,297 $ 79,051,941 Revenues Taxes Real estate taxes Delinquent taxes Motor vehicle taxes General sales tax Other taxes Intergovernmental Charges for services Investment revenue Miscellaneous Total revenues Expenditures General government Public safety Public works Public health and sanitation Culture and recreation Planning and development Capital outlay Total expenditures Excess [deficiency] of revenues over [under] expenditures Other financing sources [uses] Transfers in Transfers [out] Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January 1 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, 2021 Budgeted Amounts Actual Original Final $ 10,521,583 $ 10,737,173 $ 10,737,173 298,941 160,000 160,000 1,255,152 1,209,066 1,209,066 15,314,664 13,418,742 13,418,742 5,351,559 6,691,350 6,691 ,350 1,144,657 1,124,700 1,124,700 4,656,662 5,679,400 5,679,400 89,874 306,000 306,000 689,766 482,500 482,500 39,322,858 39,808,931 39,808,931 4,892,999 6,209,388 6,209,388 23,139,413 22,801,134 22,801,134 5,432,764 5,243,043 5,243,043 746,880 3,733,772 6,450,666 6,450,666 [291,234] 2,059,517 2,059,517 675,363 7,453,927 7,453,927 38,329,957 50,217,675 50,217,675 992,901 [10,408,744] [10,408,744) 5,806,300 4,366,500 4,366,500 [905,500) [905,500) [905,500] 4,900.800 3,461.000 3,461 000 5,893,701 [6,947,744] [6,947,744] 12,918,477 6 947,744 6 947,744 Unreserved fund balance, December 31 18,812,178 $ $ - Reconciliation to GAAP Interest receivable Accounts receivable Taxes receivable Inventory Deferred revenue Current year encumbrances GAAP Fund Balance, December 31 4,144 1,629,294 11,025,946 167,703 [10,728,135] 152402 $ 21 ,063,532 See independent auditor's report on the financial statements. 22 Variance with Final Budget Positive [Negative] $ [215,590] 138,941 46,086 1,895,922 [1,339,791] 19,957 [1,022,738] [216,126] 207,266 [486,073) 1,316,389 [338,279] [189,721] [746,880] 2,716,894 2,350,751 6,778,564 11,887,718 11,401,645 1,439,800 1,439,800 12,841,445 5,970,733 $ 18,812,178 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, 2021 Budgeted Amounts Actual Original Final Revenues Intergovernmental $ 1,347,162 $ 1,172,550 $ 1,172,550 Miscellaneous 80,373 Total revenues 1,427,535 1,172,550 1,172,550 Expenditures Public works 388,839 486,950 486,950 Capital outlay 1,302,212 1,006,243 1,006,243 Total expenditures 1,691,051 1,493,193 1,493,193 Excess [deficiency] of revenues over [under] expenditures [263,516] [320,643] [320,643] 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] [103,516] [160,643] [160,643] Unreserved fund balance, January 1 1,928,004 1,693,383 1,693,383 Unreserved fund balance, December 31 1,824,488 $ 1,532,740 $ 1,532,740 Reconciliation to GAAP Taxes receivable 316,446 Current year encumbrances 221,003 GAAP Fund Balance, December 31 $ 2,361,937 See independent auditor's report on the financial statements. 24 Variance with Final Budget Positive [Negative] $ 174,612 80,373 254,985 98,111 [295,969] [197,858] 57,127 57,127 234,621 $ 291 ,748 Revenues Taxes 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, 2021 Budgeted Amounts Actual Original Final Variance with Final Budget Positive [Negative] Selective sales taxes $ 9,639,452 $ 8,500,559 $ 8,500,559 $ 1,138,893 Total revenues Expenditures Capital outlay Total expenditures Excess [deficiency] of revenues over [under] expenditures Other financing sources [uses] Transfers [out] Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January 1 9,639,452 2,632,049 2,632,049 7,007,403 [2,693,350] [2,693,350} 4,314,053 4,065,778 8,500,559 5,050,500 5,050,500 3,450,059 [2,693,350) [2,693,350] 756,709 1,996,130 8,500,559 5,050,500 5,050,500 3,450,059 [2,693,350) [2,693,350) 756,709 1,996,130 1,138,893 2,418,451 2,418,451 3,557,344 3,557,344 2,069,648 Unreserved fund balance, December 31 8,379,831 $ 2,752,839 $ 2,752,839 $ 5,626,992 Reconciliation to GAAP Current year encumbrances GAAP Fund Balance, December 31 1,022,597 $ 9,402,428 See independent auditor's report on the financial statements. 25 CITY OF SALINA, KANSAS STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2021 Business-Type Activities: Enterprise Funds Total Internal Solid Waste Water and Enterprise Service Assets and deferred outflows of resources: Diseosal Sewer Sanitation Golf Course Funds Funds Current assets: Cash and investments $ 8,924,536 $ 34,471 ,779 $1,271,617 $ 91,749 $ 44,759,681 $5,401,983 Receivables (net of allowance for uncollectibles) Accounts 239,542 1,351,300 236,783 1,827,625 Interest 16 16 Inventory and prepaid supplies 386 967 20,179 407 146 136,375 Total current assets 9,164,094 36,210,046 1,508,400 111,928 46,994,468 5,538,358 Capital assets: Nondepreciable capital assets: Construction in progress 265 21,570,608 21 ,570,873 Land 682,000 1,689,334 15,000 2,386,334 Depreciable capital assets: Cap~al assets 13,304,495 154,979,628 2,848,648 1,310,899 172,443,670 168,234 Less: aCC001Ulated depreciation 10,780,426 65,520,383 1,713,607 892,830 78,907,246 154,325 Total capital assets 3,206,334 112,719,187 1,135,041 433,069 117,493,631 13,909 Total assets 12,370,428 148,929,233 2,643,441 544,997 164,488,099 5,552,267 Deferred outflows of resources: KPERS OPEB deferred outflows of resources 3,103 19,872 5,718 1,893 30,586 1,575 OPEB deferred outflows of resources 5,678 32,076 9,564 1,975 49,293 Pension deferred outflows of resources 106 247 517 300 111 828 87,399 822,774 36,501 Total deferred outflows of resources 115.028 569,248 127,110 91 267 902.653 38,076 Total assets and deferred outflows of resources $ 12,485.456 $ 149,498,481 $2,770,551 $ 636,264 S 165,390,752 $5,590,343 Liabilities and deferred Inflows of resources: Current liabilities Accounts payable $ 226,826 $ 163,363 s 6,764 $ 425 $ 397,378 $ 62,621 Interest payable 35,008 500,801 535,809 Meter deposits payable 422,066 422,066 Temporary notes payable 1,611,714 1,611,714 Current portion of compensated absences payable 21,557 177,561 75,275 16,175 290,568 13,400 Current portion of accrued claims payable 614,807 Current portion of loans payable 383,064 383,064 Current portion of general obligation bonds payable 411,176 712,047 1,123,223 Current portion of revenue bonds payable 775,000 775,000 Total current liabilities 2,306,281 3,133,902 82,039 16,600 5,538,822 710,828 Noncurrent liabifities: Compensated absences payable 26,794 220,702 93,563 20,105 361,164 16,655 Accrued daims payable 168,990 OPEB obligation 66,512 370,077 110,339 22,785 569,713 KPERS OPEB obligation 16,716 107,066 30,807 10,202 164,791 8,484 Net pension liability 307,465 1,463,705 327,703 183,112 2,261,985 105,909 Payable from restricted assets Loans payable 43,583,302 43,583,302 General obHgation bonds payable 1,610,134 5,265,134 6,875,268 Revenue bonds payable 8,750,145 8,750,145 Landfill post-dosure care liabilities 2,332,241 2,332,241 Total noncurrent liabilities 4,359,862 59,760,131 562,412 216,204 64,898,609 300,038 Total liabilities 6,666,143 62,894,033 644.451 232,804 70.437 431 1,010.866 Deferred Inflows of resources KPERS OPEB deferred inflows of resources 7,028 43,454 12,966 4,211 67,659 3,541 OPEB deferred inflows of resources 5,084 30,240 8,541 1,833 45,698 Pension deferred inflows of resources 140,535 847,264 242,548 80,110 1,310,457 67,325 Total deferred inflows of resources 152 647 920,958 264.055 86,154 1423814 70.866 Total lablllties and deferred inflows of resources $ 6,818,790 $ 63,814,991 $ 9081506 s 318,958 $ 711861 ,245 $1,081,732 Net position Net investment in capital assets $ 1,185,024 s 53,250,495 $1,135,041 $ 433,069 $ 56,003,629 $ 13,909 Restricted Reslricted for bond retirement 1,131,606 1,131,606 Unrestricted 4 481,642 31,301,389 727,004 [115,763) 36,394,272 4,494,702 Total net position $ 5,666,666 $ 85,683,490 $1,862.045 $ 317,306 $ 93,5291507 $4,508.611 The notes to the basic financial statements are an Integral part of this statement. 26 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2021 Business-Type Activities: Entererise Funds Solid Waste Water and Dis~osal Sewer Sanitation Golf Course Operating revenues Charges for services $ 3,548,636 $21,240,517 $3,422,158 $ 789,539 Miscellaneous 87 560 2,427,749 830 [100,443) Total operating revenues 3,636,196 23,668,266 3,422,988 689,096 Operating expenses General government Public works 1,617,278 8,510,657 3,502,147 Recreation 834,562 Depreciation 129,016 3,567,276 152,672 43,233 Total operating expenses 1,746,294 12,077,933 3,654,819 877,795 Operating income [loss] 1,889,902 11,590,333 [231,831) [188,699] Nonoperating revenues [expenses] Interest expense [89,629] [1,313,168] Accretion of bond premium 81 ,336 Total nonoperating revenues [expenses] [89,629] (1,231,832) Income [loss] before transfers 1,800,273 10,358,501 [231,831] [188,699) Transfers from [to] other funds Transfers in 153,599 Transfers [out] [2,270,914] 114,066,190) (497,350) Total transfers [2,270,914] [13,912,591) [497,350) Change in net position [470,641) [3,554,090] 1729,181 ] [188,699) Net position, January 1 6,137,307 87,375,439 2,591,226 506,005 Prior period adjustment 1 862,141 Net position, January 1, restated 6,137,307 89,237,580 2,591,226 506,005 Net position, December 31 $ 5,666,666 $85,683,490 $1,862,045 $ 317,306 The notes to the basic financial statements are an integral part of this statement. 27 Total Internal Enterprise Service Funds Funds $ 29,000,850 $ 8,223,682 2,415,696 28,852 31,416,546 8,252,534 7,372,865 13,630,082 834,562 3,892,197 362 18 356 841 7,373,227 13,059,705 879,307 [1,402,797] 81 336 [1,321,461] 11,738,244 879,307 153,599 80,000 [16,834,454] [16,680,855] 80,000 [4,942,611) 959,307 96,609,977 3,549,304 1,862,141 98,472,118 3,549,304 $ 93,529,507 $ 4,508,611 Cash flows from operating activities Cash received from customers and users Cash paid to suppliers of goods or services Cash paid to employees Other operating receipts Net cash provided by (used in] operating activities Cash flows from capital and related financing activities [Purchase and construction] sale of capital assets Proceeds from bonds Proceeds from temporary notes Proceeds from loans Principal payments -loans Principal payments -general obligation bonds Principal payments -revenue bonds Interest paid Net cash provided by (used in] capital and related financing activities Cash flows from noncapital financing activities Transfers in Transfers [out] CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2021 Business-Type Activities: Entererise Funds Solid Waste Water and Diseosal Sewer Sanitation Golf Course $3,507,381 $21,272,184 S 3,405,318 $ 789,539 [777,661] (5,395,358] [2,544,053] [378,910) [612,504) [3,738,887] [983,943) [483,864) 87,560 2,427 749 830 [100,443) 2,204,776 14,565,688 [121,848) [171,478) [265] [239,196] [284,228) 198,957 320,000 1,611,714 10,176,440 [2,136,102) [724,078) [705,422) (816,015] [93,368) [1,220,668) 1,114,003 5,059,037 [284,228) 198,957 153,599 [2,270,914) [14,066,190) [497,350) Net cash provided by [used in] noncapital financing activities [2,270,914) [13,912,591) [497,350) Net increase [decrease) in cash and cash equivalents 1,047,865 5,712,134 [903,426] 27,479 Cash and cash equivalents, January 1 7,876,671 28,759,645 2,175,043 64,270 Cash and cash equivalents, December 31 $8,924,536 $34,471,779 $1,271,617 $ 91 749 The notes to the basic financial statements are an integral part of this statement. 28 Total Internal Enterprise Service Funds Funds $28,974,422 $7,955,984 [9,093,982] [7,103,848) (5,818,998] [276,664] 2,415,696 28,852 16 477,138 604,324 [324,732] 320,000 1,611,714 10,176,440 (2,136,102] [1,429,500] (816,015] [1,314,036] 6,087,769 153,599 80,000 [16,834,454) [16,680,855) 80,000 5,884,052 684,324 38,875,629 4 717 659 $44,759,681 $ 5.401,983 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31, 2021 Business-Type Activities: Enterprise Funds Total Internal Solid Waste Water and Enterprise Disposal Sewer Sanitation Golf Course Funds Reconciliation of operating (loss] income to net cash provided by [used in] operating activities Operating income [loss] $ 1,889,902 $11,590,333 $ [231,831] $ [188,699] $13,059,705 Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense 129,016 3,567,276 152,672 43,233 3,892,197 [Increase] decrease in accounts receivable [41 ,255] [105,140] [16,840] [163,235] [Increase] decrease in inventory 3,762 7,039 10,801 [Increase] decrease in deferred outflows 22,338 136,312 36,926 18,369 213,945 Increase [decrease] in accounts payable 207,302 [346,294] (18,685] [7,098] [164,775] Increase [decrease] in retainage payable [211,528] [211,528] Increase [decrease] in accrued compensated absences 5,193 40,119 13,093 [984] 57,421 Increase [decrease] in claims payable Increase [decrease] in net pension liability [161,557] [1 ,034,740] [297,731] [98,593] [1 ,592,621] Increase [decrease] in net KPERS OPEB obligation [6,764] [9,256] 3,862 [17,818] [29,976] Increase (decrease] in net OPEB obligation 8,945 27,619 13,611 2,024 52,199 Increase [decrease] in meter deposits payable 136,807 136,807 Increase [decrease] in deferred inflows 119 768 770,418 223,075 71,049 1,184,310 Net cash provided by [used in] operating activities $ 2,204,776 $14,565,688 $ [121,848) $ [171,478) $16,477,138 The notes to the basic financial statements are an integral part of this statement. 29 $ $ Service Funds 879,307 362 (35,156] 11,901 36,871 (246] [267,698] [81 ,998] [239] 61,220 604,324 ASSETS CITY OF SALINA, KANSAS STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS December 31, 2021 C.ash and investments Total assets LIABILITIES AND NET POSITION Liabilities Accounts payable Total liabilities NET POSITION Restricted for individuals, organizations and other governments The notes to the basic financial statements are an integral part of this statement. 30 $ $ Custodial Fund CITY OF SALINA, KANSAS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS ADDITIONS Miscellaneous Total additions DEDUCTIONS Contractual services Total deductions Change in net position Net position, January 1 Net position, December 31 December 31 , 2021 The notes to the basic financial statements are an integral part of this statement. 31 $ $ Custodial Fund 25,711 25,711 26,461 26,461 [750] 751 1 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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, 2021. Blended Component Unit Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) -SFH QalicB was created to function as a qualified low-income community business, as defined in Section 45D(d)(2) of the Internal Revenue Code of 1986 for the purpose of providing an indoor sports facility in the downtown corridor of the City of Salina. The purpose of the facility is to cater to local residents as well as host regional sports tournaments with the anticipation of becoming a regional destination for youth athletics. This mix of participation is expected to provide the most consistent visitation and tourism for the downtown district. The SFH QalicB is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. The field house is staffed by City of Salina employees. SFH QalicB has a December 31 fiscal year end. SFH QalicB is a not-for-profit organization exempt from income tax under Section 501(c)(3) of the Internal Revenue Code and is exempt from similar state and local taxes. Complete financial statements for each of the individual component units may be obtained at the entity's administrative offices. Salina Airport Authority 3237 Arnold Ave. Salina, KS Joint Ventures. Housing Authority of the City of Salina 469 S. 5th Salina, KS Salina Field House QALICB, Inc. 300 W. Ast St. Salina, KS The City of Salina also participates with Saline County in one joint venture. The City and County organized the Salina County-City Building Authority to acquire, operate and maintain facilities for the administrative offices of both governments. The primary governments each have an ongoing financial responsibility for the joint venture. Separate financial statements are available from the governing board of the joint venture. 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A. Reporting Entity (Continued) Joint Ventures (Continued) Total unencumbered cash, December 31, 2021 Total change in unencumbered cash, year ended December 31, 2021 Total cash receipts, year ended December 31, 2021 Total cash receipts from City of Salina (Kansas Regulatory Basis) Building Authority (Audited) $ 2,021,068 92,869 1,644,624 510,668 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. Non major funds are aggregated and presented in a single column in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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, and central garage 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 accountfor 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. Former Schilling AFB Environmental Fund -To account for the funding provided by U.S. Government and expenditures necessary to abate groundwater contamination beneath the property formerly identified as Schilling Air Force Base. 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Debt Service Fund -To account for the accumulation of resources and payment of general obligation bond principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. Capital Projects Fund -To account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. SFH QalicB Fund -To account for the activities of Salina Field House Qualified Active Low-Income Community Business, Inc. as a component unit blended into the financial statements. The City reports the following major proprietary funds: Sanitation Fund -To account for the operations of the City's refuse collection service. Solid Waste Disposal Fund -To account for the activities of the City's landfill. Golf Course Fund -To account for the operations of the municipal golf course. Water and Sewer Fund -To account for the activities of the City's water and sewer operations. D. Assets, Liabilities, Fund Balance, and Net Position 1. Pooled cash and investments The City maintains a cash and investment pool that is available for use by all funds managed by the City. Each fund type's portion of this pool is displayed in the financial statements as "Cash and Investments." The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments in the Kansas Municipal Pool are carried at fair value. Cash balances from all funds are invested to the extent available in certificates of deposit and other authorized investments. Investments with maturity dates greater than three months are stated separately. Earnings from these investments, unless specifically designated, are allocated monthly to the investing fund based on the percentage of funds invested to total investments. All investments are carried at fair value. 2. Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the year are referred to as either "interfund receivables/payables" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Accounts Receivable. The City records revenues when services are provided. All receivables are shown net of an allowance for doubtful accounts. 35 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance and Net Position (Continued) 2. Receivables and Payables (Continued) 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. 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. Taxes remaining due and unpaid as of 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. Caoital 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: 36 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 4. Capital Assets (Continued) Assets Buildings Other equipment Vehicles Infrastructure 5. Compensated Absences Years 50 5 -15 6 -10 30-50 It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All employees of the City, except temporary and part time employees, may accumulate sick leave at a rate of 8 or 11 hours per month depending on their work duty schedule. There is no limit on the amount of sick leave that can be accumulated. Employees with more than five years of service with the City are paid for one-third of their accumulated sick leave at their current wage scale upon termination of employment in good standing. In 2001, a limited buy back policy was instituted. All regular employees are entitled to paid vacation time. Such leave is granted each year of employment. Employees must use 50% of leave accrued each calendar year and an employee's maximum accrued vacation leave balance cannot exceed 250 hours (or 350 hours for employees working 24-hour shifts). Employees are paid for all accumulated vacation leave at their current wage scale upon termination of employment. Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability in the government fund financial statements that will pay it. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave of the business-type funds and government wide financial statements are recorded as an expense and liability of those funds as the benefits accrue to employees. A liability is recorded for accumulated rights to receive sick pay benefits that are payable upon termination of employment. The General Fund, Bicentennial Center Fund, Central Garage Fund, Sanitation Fund, Solid Waste Fund, Golf Course Fund, and Water and Sewer Fund have been used in prior years to liquidate the liability for compensated absences. 6. Temporary Notes Upon authorization for the issuance of general obligation bonds for certain improvements, Kansas law permits the temporary financing of such improvements by the issuance of temporary notes. Temporary notes issued may not exceed the aggregate amount of bonds authorized, are interest bearing and have a maturity date not later than four years from the date of issuance of such temporary notes. Temporary notes outstanding are retired from the proceeds of the sale of general obligation bonds. 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long- term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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. Wien 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: Major Governmental Funds Tourism Former Other Total and Special Sales Tax Schilling AFB Debt Capital SFH Go\el'rrnental Gowrrvremal General Convention ~ Capital En~ronmental Ser\ice ~ QalicB Funds Funds Fund Balances: Nonspendable for: Inventory $ 167,703 $ $ $ $ $ $ $ $ $ 167,703 Restricted for: Pubic 1'.llrkS 2,140,934 2,140,934 Public health and sanitation 234 234 Culb.Jre and recreation 245,319 245,319 Planning and dewlopment 603,485 224,980 828,465 Capital improvements 66,697,767 66,697,767 Debt payments 2,111,664 800 2,112,464 Corrnritted for: Pubfic safety 677,239 677,239 Culture and recreation 782,574 782,574 Plc11ning and development 1,843,459 728,371 2,571,830 Cemetery 553,053 553,053 Capital improvements 8,379,831 3,631,981 12,011,812 Assigned for: General government 152,402 152,402 Public safety 105,726 105,726 Pubic works Culture and recreation 237,624 237,624 Capital impro\lements 221,003 1,022,597 1,243,600 Unassigned: 20,743,427 [921,505) __ . [136,007) 19,685,915 Total Fund Balances $21,063,532 ~ $2,361,937 $9,402,428 $66,697,767 ~ $ (921,505) $1,843,459 $ 7,051,894 $110,214,661 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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 changes in the pension and OPEB plan liability proportion and assumptions, net difference between projected and actual earnings on pension plan and OPES plan investments and differences between pension and OPES 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 OPES 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. If the City is holding a revenue neutral rate hearing, the budget timeline for adoption of the final budget has been adjusted to on or before September 20th• The City was not required to hold a revenue neutral rate hearing for this year. 39 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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 2021 budget was not amended during the year. 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, Former Schilling AFB Environmental fund, 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, North 9th 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. As of December 31, 2021, the statutory limit for the City was $155,844,910, providing a debt margin of $89,020,771. 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 3. RESTATEMENT OF EQUITY During the year ended December 31, 2021, management discovered certain errors that occurred in the prior year. The effects of these items caused a restatement to net position as follows: Net Position December 31, 2020 Prior Period Adjustment Net Position December 31, 2020, Reslated Note 4. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments Water and Sewer $87,375,439 1,862,141 $89,237,580 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 . As of December 31, 2021, the City has the following investments: lm,estment Type Kansas Municipal lm.estment Pool Total fair value 41 Fair Value Rating $ 318,091 S&P AAAf/S1+ $ 318,091 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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. V\lhen 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, 2021 the City's deposits were considered fully secured. Restricted cash is comprised of an interest reserve account (the "Interest Reserve"), and an operating 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, 2021, the balance of the Interest Reserve and Operating Reserve was $131,391 and $126,650, respectively. 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) B. Receivables Receivables as of year-end, including the applicable allowances for doubtful accounts, are as follows: Primary Government Receivables: Accounts Taxes Interest General $ 7,464,058 11,025,946 4,144 18,494,148 Tourism and Convention $ 602,631 602,631 Special Gas $ -$ 316,446 316,446 Debt SFH Other Service QalicB Governmental Subtotal -$1,605,407 $ 3,244 $ 9,675,340 3,119,483 14,461,875 4144 3,119,483 1,605,407 3,244 24,141 ,359 Gross receivables Less: allowance for uncollectibles Total [5,834,764) ---[1,033] [5,835,797] $12,659,384 $ 602,631 $316,446 $3,119,483 $1,605,407 =$ ==2, __ 21_1 $18,305,562 Primary Government Receivables: Accounts Taxes Interest Gross receivables Less: allowance for uncoUectibles Total Con,:ionent Units Salina Airport Authority Accounts Grants Less: allowance for uncollectibles Total Salina Airport Authority Salina Housing Authority Accounts Less: allowance for uncollectibles Total Salina Housing Authority Total C. lnterfund Receivables and Payables Solid Waste Disposal Water and Sewer $ 239,542 $2,243,162 $ 16 239,558 2,243,162 Sanitation Total 382,326 $12,540,370 14,461,875 4160 382,326 27,006,405 [891,862] [145,543] [6,873,202] $ 239,558 $1,351,300 $ 236,783 $20,133,203 $ 94,058 1,452,931 (1,500] 1,545,489 45,755 (13,870] 31,885 $ 1,577,374 The composition of interfund balances as of December 31, 2021, is as follows: Fund Types Due From Due To General Fund $11,158 $ Other Governmental Funds 11,158 $11,158 $11,158 The City uses interfund receivables and payables between the General Fund and Other Governmental Funds as needed when pooled cash is negative within a fund until investments mature or grant proceeds are received. All payables are cleared in less than one year. 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets Capital asset activity for the year ended December 31, 2021, was as follows: Balance Adj. Bal. Balance 12/31/2020 Adjustments 12/31/2020 Addttians Retirements 12/31/2021 City governmental activities: Governmental activities: Capital assets, not being depreciated Construction in progress $ 26,221,157 $ -$ 26,221,157 $ 8,718,691 $ 14,613,009 $ 20,326,839 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 226,276,624 226,276,624 15,030,407 241,307,031 Buildings and improvements 53,158,946 53,158,946 53,158,946 Vehicles 10,169,524 10,169,524 218,001 10,387,525 Equipment, fumtture and fixtures 7,484,442 7,484,442 403,574 2,607 7,885,409 Leasehold improvements 357,383 357,383 357,383 Total capital assets 348,314,410 348,314,410 24,370,673 14,615,616 358p69,467 Less accumulated depreciation far: Infrastructure 96,266,536 96,266,536 4,350,078 100,616,614 Buildings and impr011en1ents 23,940,647 23,940,647 1,313,174 25,253,821 Vehicles 7,494,122 7,494,122 578,TT3 8,072,895 Equipment, furniture and fixtures 5,174 971 5,174,971 334,714 2,607 5,507,078 Total accumulated depreciation 132,876,276 132,876,276 6,576,739 2,607 139,450,408 Governmental activities capltal assets, net $ 215,438,134 $ $ 215,438,134 $ 17,793,934 $ 14,613,009 $ 218,619,059 Business-type activities: Capltal assets, not being depreciated Construction in progress $ 27,975,939 $ -$ 27,975,939 $ 2,400,534 $ 8,805,600 $ 21,570,873 Land 2,386,334 2,386,334 2,386,334 Capital assets, being depreciated Infrastructure 131,643,670 131,643,670 8,388,201 140,031,871 Buildings and improvements 22,579,936 22,579,936 284,228 22,864,164 Vehicles 3,781,267 3,781,267 3,781,267 Equipment, furniture and fixtures 5?65,524 5,765,523 845 5,766,368 Total capital assets 194132,670 194,132,669 11,073,808 8,805,600 196,400,877 Less accumulated deprecialion for. Infrastructure 53,350,542 53,350,542 3,035,435 56,385,977 Buildings and improvements 14,476,597 14,476,597 423,824 14,900,421 Vehicles 2,701,833 2,701,833 194,366 2,896,199 Equipment, furniture and fixtures 4,486,078 4,486,078 238,572 4 724,650 T ala! accumulated depreciation 75,015,050 75,015,050 3,892,197 78,907,247 Business-type activities capital assets, net $ 119,117,620 $ -$ 119,117,619 $ 7,181,611 $ 8,805,600 $ 117,493,630 44 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets (Continued) The City's depreciation expense was charged to governmental functions as follows: Go..ernrnental Activities: General go..ernment $ 59,708 Public safety 660,307 Public works 4,450,051 Public health 30,651 Culture and recreation 1,042,548 Planning and de..elopment 333,474 Total depreciation $ 6,576,739 Business-type Activities: Solid Waste Disposal $ 129,016 Water and Sewer 3,567,276 Sanitation 152,672 Golf Course Division 43,233 Total depreciation $ 3,8921197 E. Long-Term Debt Following is a summary of changes in long-term debt for fiscal year 2021 : Balance Balance January 1, December 31, 2021 ~ Deletions 2021 Gowmmental actil.ities: General obligation bonds $ 56,587,549 $ 13,545,000 $ 10,549,900 $ 59,582,649 General obligation bond premium 2,743,432 793,345 495,408 3,041,369 Loans payable 12,640,000 12,640,000 Loans payable discount (427,021] [13,963] [413,058] OPEB liability 3,097,540 498,956 94,025 3,502,471 KPERS OPEB liability 402,677 53,298 115,737 340,238 Net pension liability 34,571,390 9,513,526 25,057,864 Accrued compensation 2,697,006 1,407,234 1,265,585 2,838,655 Temporary notes 7,050,000 3,647,188 7,050,000 3,647,188 Temporary note premium 66,598 66,598 Total $ 119,362,573 $ 20,011,619 $ 29,070,218 $ 110,303,974 Business-type actil.ities: General obligation bonds $ 8,742,451 $ 320,000 $ 1,390,100 $ 7,672,351 General obligation bond premium 365,539 39,399 326,140 Loans payable 35,926,027 10,176,440 2,136,101 43,966,366 Rewnue bonds 9,615,000 750,000 8,865,000 Rewnue bond premium 726,160 66,015 660,145 OPEB liability 517,514 80,995 28,796 569,713 KPERS OPEB liability 194,767 25,815 55,791 164,791 Net pension liability 3,854,606 1,592,621 2,261,985 Accrued compensation 594,311 347,989 290,568 651,732 Temporary notes 1,582,812 1,582,812 Temporary note premium 28,902 28,902 Total $ 60,536,375 $ 12,562,953 $ 6,349,391 $ 66,749,937 45 Amounts Due Within One Year $ 4,826,778 253,163 1,252,185 3,647,188 66,598 $ 10,045,912 $ 1,123,223 39,399 383,064 775,000 290,568 1,582,812 28,902 $ 4,222,968 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued} E. Long-Term Debt (Continued) The following is a detailed listing of the City's general obligation bonds outstanding as of December 31, 2021 : General Obligation Bonds -Primar1 Government Governmental Business-type Final Original Activites Activites Puri:1ose, Series Issue Date Maturi~ Interest Rates Issue Outstanding Outstanding Internal Improvements, 2013A 2/15/2013 10/1/2028 2.60% to 3.65% $1,360,000 $ 725,000 $ Improvement and Refunding, 2015A 7/29/2015 10/1/2035 3.00% to 3.50% 6,825,000 4,795,000 Internal Improvements, 2016A 7/26/2016 10/1/2036 2.00% to 3.00% 6,570,000 5,220,000 2,097,351 Refunding, 2016B 7/26/2016 10/1/2031 2.00% to 5.00% 13,750,000 8,092,649 Internal Improvements, 2017A 7/27/2017 10/1/2037 3.00% to 3.38% 9,310,000 7,940,000 Internal Improvements, 2018A 11/27/2018 10/1/2033 3.15% to 4.00% 2,090,000 1,750,000 Internal Improvements, 2019A 4/24/2019 10/1/2039 3.00% to 4.00% 11,090,000 10,440,000 Internal Improvements, 2020A 4/29/2020 10/1/2035 2.00% to 3.00% 5,210,000 3,110,000 1,605,000 Internal Improvements, 2020B 11/19/2020 10/1/2036 2.00% to 3.00% 8,450,000 3,965,000 3,650,000 Internal Improvements, 2021A 4/29/2021 10/1/2041 1.63% to 4.50% 7,645,000 7,645,000 Refunding, 20218 9/8/2021 10/1/20341 .15%to2.00% 6,220,000 5,900,000 320,000 $59,582,649 $ 7,672,351 The following is a detailed listing of the City's revenue bonds outstanding as of December 31, 2021 : Revenue Bonds-Primary Government Purpose, Series Issue Date Final Maturify Interest Rates Revenue & Refunding, 2019 9/11/2019 10/1/2031 3.00% Original Business-type Activites Issue Outstanding $10,330,000 $ 8,865,000 The following is a detailed listing of the City's temporary notes outstanding as of December 31, 2021: Temporary Notes -Primary Government Governmental Business-type Original Activites Activites ___ Pu_r_._p_os_e_,_, _S_e_rie_s ___ Issue Date Final Maturity Interest Rates Issue Outstanding Outstanding Internal Improvements, 2021-1 4/29/2021 5/1/2022 2.00% $5,230,000 $ 3,647,188 $ 1,582,812 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following is a detailed listing of the City's loans payable as of December 31, 2021 : Loans Pa:i::able -Primar:i:: Go1.ernrrent Go1.ernmental Business-type Original Activites Activites PureQse Issue Date Final Maturity Interest Rates Issue Outstanding Outstanding Kansas Public Water Supply 2629 8/1/2014 8/1/2034 2.12% $8,562,911 $ $ 5,669,144 Kansas Public Water Supply 2917 8/15/2018 2/1/2040 2.33% 32,000,000 29,736,642 Kansas Public Water Supply 2957 7/2/2018 2/1/2040 2.33% 4,250,000 3,726,201 Kansas Public Water Supply 2997 7/7/2020 8/1/2041 1.43% 4,250,000 2,172,136 Kansas Water Pollution Control 2049 2/22/2021 9/1/2042 1.30% 31,500,000 1,499,577 Kansas Water Pollution Control 2050 12/11/2018 3/1/2035 2.54% 2.250.000 1,162,666 Dakotas Note A 7/27/2016 12/10/2050 1.58% 6,016,500 6,016,500 Dakotas Note B 7/27/2016 12/10/2050 1.58% 2,623,500 2,623,500 CNMC Note A 7/27/2016 12/10/2050 1.58% 2,674,000 2,674,000 CNMC Note B 7/27/2016 12/10/2050 1.58% 1,326,000 1,326,000 $1216401000 $431966.366 The following is a detailed listing of the long-term debt outstanding of the City's component unit, the Salina Airport Authority, as of December 31 , 2021 : General Obligation Bonds -Component Units Original ____ ____;P:....u=:rccp'""o-=-se-=-1._S-=-e-=-rc.;.ie-=-s::;._ ____ Issue Date Final Maturity Interest Rates Issue Outstanding Internal Improvement & Refunding, 2015A 8/28/2015 9/1/2025 1.50% to 3.55% $3,075,000 $ 430,000 TaxableRefunding,2017A 7/12/2017 9/1/2030 1.61%to3.35% 10,255,000 9,935,000 Refunding, 2017B 7/12/2017 9/1/2031 2.00% to 3.00% 4,835,000 4,735,000 Refunding, 2019A 10/10/2019 9/1/2029 2.10% to 3.10% 675,000 555,000 Taxable Refunding, 2019B 10/10/2019 9/1/2023 2.80% to 3.00% 3,455,000 1,615,000 Refunding, 2021A 8/17/2021 9/1/2031 0.25% to 2.00% 2,345,000 2,345,000 Less: Unamortized bond premium 18,163 Plus: Unamortized bond discount [60,214] Temporary Notes -Component Units ____ ____;P_u=r-"'p--'-o-'-sec..,'-S""e""'r-'-ie=s'-------Issue Date Final Maturity Interest Rates Internal Improvements, 2020-1 9/1/2020 9/1/2023 0.48% Taxable, 2021-1 11/10/2021 9/1/2023 0.45% Purpose Building 824 Improvements Lease Purchase Agreement -Component Units Issue Date Final Maturity 8/12/2020 9/1/2030 47 Interest Rates 3.30% Original Issue $2,100,000 3,545,000 $19,572,949 Outstanding $ 2,100,000 3,545,000 $ 5,645,000 Governmental Original Activites Issue Outstanding $ 460,000 $ 420,058 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Annual debt service requirements to maturity for general obligation bonds: General Obligation Bonds -Prima!}'. Government Year Ending Governmental Activites Business-type Activites December 31 , Princii;ial Interest Total Princii;ial Interest Total 2022 $ 4,826,777 $ 253,163 $ 5,079,940 $1,123,222 $ 39,399 $ 1,162,621 2023 4,941,734 253,163 5,194,897 973,267 39,399 1,012,666 2024 4,870,140 253,163 5,123,303 869,860 39,399 909,259 2025 4,576,004 253,163 4,829,167 873,996 39,399 913,395 2026 4,312,044 253,163 4,565,207 437,956 15,322 453,278 2027 -2031 17,622,963 1,021,062 18,644,025 2,117,037 76,610 2,193,647 2032-2036 14,012,987 552,510 14,565,497 1,277,013 76,610 1,353,623 2037 -2041 4,420,000 201,985 4,621,985 4,680,500 4,680,500 Total $59,582,649 $ 3,041,372 $62,624,021 $7,672,351 $5,006,638 $12,678,989 Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues: Revenue Bonds -Prirnar:t: Go-..ernrnent Year Ending Business-type Activites December 31 , Princi12al Interest Total 2022 $ 775,000 $ 66,015 $ 841 ,015 2023 795,000 66,015 861,015 2024 820,000 66,015 886,015 2025 845,000 66,015 911,015 2026 870,000 66,015 936,015 2027 -2031 4,760,000 330,073 5,090,073 Total $ 8,865,000 $ 660,148 $ 9,525,148 Annual debt service requirements to maturity for temporary notes -to be paid through the issuance of general obligation bonds: Year Ending December 31 . 2022 Tempora!}'. Notes -Primary Government Gowrnmental Activites Business-type Activites Princii;ial Interest Total Interest Total $ 3,647,188 _$ __ 73..,,34_9 $ 3,720,537 $1,582,812 $ 31,832 $ 1,614,644 48 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Annual debt service requirements to maturity of the for loans payable: Year Ending December 31 . Total 2022 $ 2023 2024 2025 2026 Therafter Total 616,140 12,023,860 $12,640,000 Annual debt service requirements to maturity of the long-term debt outstanding of the City's component unit, the Salina Airport Authority, as of December 31, 2021: General Obligation Bonds -Component Units Year Ending Governmental Activites Dei.ember 31 , Princii;ial Interest Total 2022 $ 1,670,000 $ 541,056 $ 2,211,056 2023 1,710,000 498,754 2,208,754 2024 1,760,000 454,540 2,214,540 2025 1,810,000 411,120 2,221,120 2026 1,865,000 363,633 2,228,633 2027 -2031 9,960,000 983,284 10,943,284 2032-2036 840,000 49780 889,780 Total $19,615,000 $ 3,302,167 $22,917,167 Year Ending December 31 , 2022 $ $ Temporary Notes -Component Units Governmental Activites Princii;2al Interest Total -$ 22,975 $ 22,975 5,645,000 26,033 5,671,033 5,645,000 $ 49,008 $ 5,694,008 Lease Purchase Agreement -Component Units Year Ending Go-.ernmental Activites Decem!;!er 31, Princi12al Interest Total 2022 $ 40,800 $ 13,528 $ 54,328 2023 42,157 12,171 54,328 2024 43,560 10,768 54,328 2025 45,009 9,318 54,327 2026 46,507 7,821 54,328 2027-2030 202,025 15,287 217,311 $ 420,058 $ 68,893 $488,950 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: 49 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Loans Pat able -Prima!:1'. Government Business-type Activites Princi~al Interest Total $ 383,064 $ 118,166 $ 501,230 391,228 110,002 501,230 399,566 101,664 501 ,230 408,082 93,148 501 ,230 416,779 84,451 501 ,230 3,670,424 339,422 4,009,846 $5,669,143 $ 846,853 $ 6,515,996 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. DakotasandCNMCNotes. 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, 2021, 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 1 O, 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, 2021, the note balance was $2,623,500. CNMC Note A-On July 27, 2016, a $2,674,000 promissory note with a maturity date of December 10, 2050, was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest-only payments, partially in arrears and partially in advance, 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 1 O, 2026, and 50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) 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 , 2021, the note balance was $2,674,000. CNMC Note B -On July 27, 2016, a $1,326,000 promissory note with a maturity date of December 10, 2050, was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, 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, 2021 , the note balance was $1,326,000. As of December 31, 2021, the principal balance of these four loans, net of $413,058 of unamortized debt issuance costs, was $12,226,942. 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, 2021, SFH QalicB earned $492,917 of rental income under the terms of the Net Lease. As of December 31, 2021, rental income of $102,281 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 , 2021 : Premises Leases between QalicB and City Year Ending December 31 , Lease Pa:r:ment 2022 $ 130,000 2023 162,500 2024 227,500 2025 227,500 2026 650,000 2027 -2031 3,250,000 2032 -2036 3,250,000 2037 -2041 3,250,000 2042-2046 219251000 Total $ 14,072,500 51 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) 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 ST AR bond projects constructed within a ST AR 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 ST AR bond district. In accordance with the ST AR Bond Act, the City has no liability for payment of bonds in the event that revenues received from sources noted above are inadequate to pay the debt incurred with the issuance of the STAR bonds. 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, 2021, the outstanding balances for the 2018-A and 2018-B were $17,975,000 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, 2021. The future minimum lease payments for the lease are as follows: HVAC Oeeratin9 Lease Year Ending December 31 , Princir;1al Interest Total 2022 $ 77,682 $16,244 $ 93,926 2023 80,391 13,536 93,927 2024 83,194 10,733 93,927 2025 86,095 7,832 93,927 2026 89,096 4,829 93,925 2027 92,202 1,722 93,924 Total $508,660 $54,896 $563,556 52 Note 4. CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 DETAILED NOTES ON ALL FUNDS (Continued) G. lnterfund Transfers A reconciliation of interfund transfers follows: Transfer In Transfer Out Major Funds: General $ 5,806,300 $ 905,500 Tourism and Convention 653,523 Special Gas 160,000 Sales Tax Capital 2,693,350 Schilling Capital Improvement 1,956,351 Former Schilling AFB Environ. 1,992,794 Debt Service 1,842,841 Capital Projects 11,788,154 Other governmental funds 1,409,532 190,042 Solid Waste Disposal 2,270,914 Water and Sewer 153,599 14,066,190 Sanitation 497,350 Central Garage 80,000 Total transfers $ 23,233,220 $ 23,233,220 The City uses interfund transfers to share administrative costs between funds. 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 Annual Comprehensive Financial Report, which is available on the KPERS website at www.kpers.org. 53 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) 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. 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. 7 4-4921 . 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, 2021. 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 8.87% for KPERS and 22.80% for KP&F for the year ended December 31, 2021 . Member contribution rates as a percentage of eligible compensation for the fiscal year 2021 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: 54 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) • 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, 2021, 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 , 2021. The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2021, the City's proportion for the Local employees group was 0.701 %, which was a decrease of .066% from its proportion measured at June 30, 2020. At June 30, 2021, the City's proportion for the Police and Firemen group was 1.982%, which was a decrease of .056% from its proportion measured at June 30, 2020. Net Pension Liability. At December 31, 2021 and 2020, the City and its component units reported a liability of $28,147,530 and $39,553,871, respectively, for its total proportionate share of the net pension liability for the Local and Police and Firemen groups. Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2020, which was rolled forward to June 30, 2021, using the following actuarial assumptions: Price inflation Wage inflation Assumptions Salary increases, including wage increases Long-term rate of return, net of investment expense, and 2.75% 3.50% Rate 3.50% to 12.00% including inflation including price inflation 7.25% 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, 2020 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, 2021 are summarized in the following table: 55 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) A Defined Benefit Pension Plan (Continued) Long-Term Expected Asset Long-Term Alloc2UQn 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 I ncorne 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 7.25%. 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. 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 7.25%, 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 (6.25%) or 1-percentage point higher (8.25%) than the current rate: Local Police & Firemen Total 1% Decrease (6.25%) $ 15,194,065 28,382,810 Discount Rate {7.25%) 1% Increase (8.25%) $ 9,237,058 $ 4,241,355 18.910 472 10,986,860 $ 43,576,875 $ 28,147,530 $ 15,228,215 _________ ........... _ Pension Expense. For the year ended December 31, 2021, the City recognized Local pension expense of $585,240 and Police and Firemen pension expense of $2,404,879, 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 $33,484 and $50,292, respectively. Deferred Outflows of Resources and Deferred Inflows of Resources. As of December 31, 2021, 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: 56 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) A Defined Benefit Pension Plan (Continued) Local Differences between actual and expected experience Net differences between projected and actual earnings on im,estments Changes in assumptions Changes in proportion Total Police & Firemen Differences between actual and expected eJqJerience Net differences betvveen projected and actual earnings on im.estments Changes in assumptions Changes in proportion Total Deferred outflows of resour1.es $ 331,937 1,655,396 86,602 ! 210731935 Deferred outflows of resources $ 1,492,178 2,405,439 6,299 $ 319031916 Deferred inflows of resources $ 76,143 2,986,146 1,065,862 $ 4,1281151 Deferred inflows of resources $ 4,961 ,187 880,927 $ 5,842,114 Housing Authori!}'. Local Differences between actual and expected experience Net differences between projected and actual earnings on im.estrnents Changes in assumptions Changes in proportion Total Deferred outflows of resources $ 6,549 45,761 23,624 $ 75,934 Deferred inflows of resources $ 5,042 11 785 $ 16,827 Aireort Authori!}t Local Differences between actual and expected eJqJerience Net differences between projected and actual earnings on im.estrnents Changes in assumptions Changes in proportion Total Deferred outflows of resour1.es $ 20,123 100,353 34068 $ 154,544 Deferred inflows of resources $ 4,616 181 ,025 33137 $ 218,778 $1 ,922,146 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 , 2022. 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 2022 $ [370,233] $ [151,613} $ [521,846} 2023 [378,369] [216,057] [594,426] 2024 [443,777] [417,715] [861 ,492] 2025 [888,204] [1 ,238,756} [2, 126,960] 2026 26,367 85,941 112,308 Total $ 12,054,216] $ p ,938,200] $13,992,416) 57 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) $42,831 and $43,030 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, 2022. 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 Authori!:t Authori!:t Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31 . Amount Amount Total 2022 $ 10,375 $ [1,081] $ 9,294 2023 15,669 [8,824] 6,845 2024 16,180 [18,175] [1,995] 2025 16,263 [40,318] [24,055] 2026 620 4,164 4,784 Total $ 59,107 $ [64,234] $ [5,127] B. Deferred Compensation Plan The City offers its employees a deferred compensation plan ("Plan") created in accordance with Internal Revenue Code Section 457. The Plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Plan assets are transferred to a plan agent in a custodial trust and are not available to the claims of the City's general creditors. C. Flexible Benefit Plan (I.RC. Section 125) The City Commission has adopted by resolution a salary reduction flexible benefit plan ("Plan") under Section 125 of the Internal Revenue Code. All City employees working more than 20 hours per week are eligible to participate in the Plan beginning after two full months of employment. Each participant may elect to reduce his or her salary to purchase benefits offered through the Plan. Benefits offered through the Plan include various insurance and disability benefits. D. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters and other events for which the City carries commercial insurance. No significant reductions in insurance coverage from that of the prior year have occurred. Settlements have not exceeded insurance coverage for each of the past three years. The City has established a limited risk management program for workers' compensation. The program covers all City employees. Premiums are paid into the Workers' Compensation Reserve Fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $250,000 ($350,000 for claims involving employees classified as policemen or firemen). Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Workers' Compensation Reserve Fund because it is expected to be liquidated with expendable available financial resources. Of the liability, $197,807 is considered to be due within one year. 58 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) Changes in the balances of claims liabilities during the past two years are as follows: 2021 2020 Unpaid claims, January 1 $ 446,495 $ 311,572 Incurred claims (including IBNRs) 989,033 917,229 Claim payments [1,068,732] [782,306] Unpaid claims, December 31 $ 366,796 $ 446,495 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: E. Contingent Liabilities Unpaid claims, January 1 Incurred claims (including IBNRs) Claim payments Unpaid claims, December 31 2021 2020 $ 605,000 $ 489,418 4,560,880 [4,748,880] $ 417,000 3,056,323 [2,940,741] $ 605,000 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 as of December 31 , 2021. 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 $2,332,241 reported as landfill closure and postclosure care liability as of December 31, 2021, represents the cumulative amount reported to date based on the use of 28.82% of the estimated capacity of the landfill. 59 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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 $8,091,339 as the remaining estimated capacity is filled over the remaining life expectancy of 179.2 years. These amounts are based on what it would cost to perform all closure and postclosure care in 2021. 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 received by the City during the year ended December 31, 2021. 60 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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, 2021. Project Authorization Exoenditures Markley-Magnolia W Sel,,\/9r $ 5,150,000 $ 1,466,985 River Trail 2 956,072 11,312 Downtown Streetscape 12,787,597 11,669,107 Smoky Hill River Renewal 12,165,000 3,595,670 S Well Field & WTP Phase 1 27,000,000 17,947,528 Rehab Pump St 28,29/Repl 28 Face Main 550,000 Northbound 9th Street Bridge 103,768 619,026 N. 9th Street Bridge 2,000,000 12,005 Smoky Hill Greenway Trail 435,637 62,362 Chorine Bluilding 2 Roof Replacement 35,000 2019 Water Main Replacement 4,000,000 2,391,998 Magnolia Hills Estates II 1,575,240 13,785 Stone Lake Phase 2 670,166 456,485 Stone Lake Phase 3A 1,647,053 3,368 Sound Garden Oakdale Park 10,046 10,046 Wheafland Valley -Specials 5,474,790 9,000 LED Lighting replacement-Parks 18,223 WWTP Owners Rep 896,790 194,101 WWTP Improvement PH I _ 879,193 1,961,994 Public Safety Communication System 2,361,323 2,313,468 2021 Pavement Sealing 250,000 322,332 TPEC Improvements (Floor/HVAC) 170,426 126,961 2021 Mill and Inlay 1,000,000 835,200 2021 Major Concrete 400,000 5th Street Parking Lot 467,963 638 Bill Burke Drainage 136,849 63,246 Landfill Scale House Repairs 45,000 265 Cedar Ridge Addition #2 647,793 657 Pool Tennis Court Remodel 864,000 3,401 2021 Water Main Replacement 2,000,000 Campbell Plaza 159,632 184,399 Magnolia Road Sidewalk 25,000 Landfill Fence Project 30,000 265 TPEC Improvements (Spectra) 100,000 61 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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 2021, the City did not contribute to the plan. As of December 31, 2021, the following employees were covered by the benefit terms: Active employees 440 Retirees and covered spouses ~ Total 469 The total OPEB liability of $3,615,054 was measured as of December 31, 2020 and was determined by an actuarial valuation as of December 31, 2019. 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 Actuarial cost method Inflation Salary increases Discount rate Healthcare cost trend rates Retiree's share of benefit related costs December 31, 2019 Entry age normal as a level percentage of payroll 2.75% 3.50% 2.12% Medical: 5.90% for 2021, 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 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. Changes in the total OPEB liability are as follows: Balance 1/1/2021 Service cost Interest Benefit paid Economic/demographic gains/losses Changes in assumptions Balance 12/31/2021 62 $ $ 3,615,054 244,531 104,082 [122,821] 231,338 4,072,184 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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 (1.12%) Total OPEB Liability $ 4,473,621 Discount rate 1 % increase {2.12%) (3.12%) $ 4,072,184 $3,705,558 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 $ 3,523,416 $ 4,072,184 $4,735,426 For the year ended December 31, 2021, the City recognized OPEB expense of $349,611. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31 , 2021, the City reported deferred outflows related to other postemployment benefits from the following sources: Deferred outflo\NS Deferred inflo\NS of resources of resources Changes of assumptions $ 352,953 $ [122,309] Differences between expected and actual experience [196,910] Total $ 352,953 $ [319,219] Amounts reported as deferred outflows of resources will be recognized in OPEB expense as follows: Year ended Deferred [Inflows] June 30, Outflows Amount 2022 $ 998 2023 2024 2025 2026 2027+ Total J. Other Postemployment Benefits (KPERS) $ 998 998 998 [1,810) 31,552 33,734 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. 63 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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. As of June 30, 2021, the valuation date, the following employees were covered by the benefit terms: Active employees Disabled members Total 263 3 266 Total OPEB Liability. The City and its component units reported a total KPERS OPES liability of $526,808 as of December 31, 2021, was measured as of June 30, 2021, and was determined by an actuarial valuation as of December 31 , 2020, which was rolled forward to June 30, 2021, using the following actuarial assumptions: Valuation date December 31, 2020 Actuarial cost method Entry age normal Inflation 2.75% Salary increases 3.00% Discount rate (based on 20 year municipal bond rate v,,ith an average rating of AA/Aa or better, obtained through the Bond Buyer General Obligation 20-Bond Municipal Index) 2.16% The discount rate was based on the bond buyer general obligation 20-bond municipal index. 64 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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, 2020, 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, 2020, KPERS pension valuation. The changes in the total OPEB liability are as follows: Balance 1/1/2021 Service cost Interest Effect of economic/demographic gains or losses Changes in assumptions Benefit payments Balance 12/31/2021 Total KPERS OPEB Liability Housing Authority $ 7,658 1,670 326 [2,076] 290 Airport Authority $ 13,924 3,797 392 [4,212] 10 City $597,444 64,709 14,404 [151,608] 984 [20,904] $505,029 $ 7 868 _$ ___ 13_.,_91 .... 1 Total $619,026 70,176 15,122 [157,896] 1,284 [20,904] $526,808 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 (1.16%) or 1-percentage-point higher (3.16%) than the current discount rate: 1% decrease Discount rate 1% increase (1 .16%} (2.16%} (3.16%} Total OPES Liability -City $ 524,146 $ 505,029 $ 485,076 Total OPEB Liability -Housing Authority $ 7,888 $ 7,868 $ 7,773 Total OPES Liability -Airport Authority $ 14,040 $ 13,911 $ 13,649 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 $ 505,029 $ 505,029 $ 505,029 Total OPEB Liability -Housing Authority $ 7,868 $ 7,868 $ 7,868 Total OPEB Liability -Airport Authority $ 13,911 $ 13,911 $ 13,911 For the year ended June 30, 2021, the City recognized OPEB expense of $66,761. 65 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) J. Other Postemployment Benefits (KPERS) (Continued) Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2021, the City reported deferred outflows and inflows related to other postemployment benefits from the following sources: Differences between expected and actual experience Changes of assumptions Total City Deferred Deferred Outflows of Inflows of Resources Resources $ 57,771 $ [202,414) 35,963 [8,357) $ 93,734 $ [210,771) Housing Authority Airport Authority Deferred Deferred Deferred Deferred Outflows of Inflows of Outflows of Inflows of Resources Resources Resources Resources $ -$ [5,573] $ -$ [10,603) ____ 3'--'00~ [167] 803 [123] $ ____ 3_o_o $ [5,740] .;:;.$ __ a_o_3 $ 110,726) $0 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 OPES liability in the year ended December 31, 2022. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in OPEB expense as follows: K. Tax Abatements Year Ended June 30, 2022 2023 2024 2025 2026 Thereafter Total Housing Airport City Authority Authority $ [12,352] $ [718] $ [1,343] [12,352) [718] [1,343] [12,352] [718] [1 ,343] [12,352] [718] [1,343] [12,047] [718] [1,335] [55,582] [1,850] [3,216] $[117,037] $ [5,440] $ [9,923] In 2021 , 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. 66 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) Ad Valorem Property Tax Abatements Abatement Company Start End Salina Vortex Corp (facility improvements) 2015 2024 Great Plains Mfg (facility improvements) 2014 2023 Veris Technologies (facility addition/improvements) 2015 2024 T'Mn oaks (facility addition/improvements) 2015 2024 % 2021 Tax Abated 37.5% $ 3,539 50% 2,800 50% 479 50% 651 $ 7,469 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 Do\lllf1town Total TIF Project Plans Purpose Promote, stimulate and develop the general and economic welfare of a major commercial entertainment and tourism area Base Year Expires 2016 2036 2021 Reimbursements Sales Tax Property Tax __,$ ___ -_ $ _.$~~~-$ 306,683 306,683 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. 67 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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. Community Improvement District (CID) 2021 Eligible Rei lli>ursement Name ~ Start Expires Purpose Arrount Assist with improvements to hotel South 9th Street 2.00% 3/1/2016 12/31/2037 and conference center $246,989 Assist with building of family Alley 1.00% 10/1/2019 9/30/2041 entertainment facility in downtown 22,166 Assist with Revitilization of Downtown 1.00% 7/1/2019 6/30/2041 Downtown Corridor 349,418 Assist with building of downtown Downtown Hotel 1.00% 10/1/2019 9/30/2041 hotel 73,722 Assist wth improvements to hotel North 9th Street 2.00% 7/1/2021 6/30/2043 and conference center 12,156 Total $704 451 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. 68 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) Pro11e[t'./~u::;i□ili:ii:i ~i!lllli! Serio Guzman Wimam & Mary Warhurst Jessica A. Ziegler Ryan Murphy Ravey Investments LLC Lamont o.rtland Michelle Bunch Jermaine and Tykea Polk Mary Marshall Angela Fishburn GMN Rentals LLC Donnie & Ramona Marrs TJTM, Inc. Troy Valcil Timothy & Linda Rickman Yvette Gelinas Charles H Carroll Jr Trust Latisha Pierce Tanya Shiehzadeh Robert & Brenda Bums Neighborhood Rellitalization Act (NRA) Address 241 N. Front Street 714 Park Street 221 N. 2nd Street 207 N. Penn 157 N. Seventh, 203 W. Ash, 205 W. Ash, 207 W. Ash & 209 W . Ash 1206 N. 7th Street 634 N. 8th Street 226 N. 2nd Street 937 N. 3rd Street 1219 N. 8th Street 809 W . Ash 2035 E. Iron #300R 2035 E. Iron #213C/105R/302R/202R/205R/006R/301 RA/301 RB/001 R/002R/003R/004R/005R 853 Nawho 719 E. Ash 1115 N. 8th Street 156-158 S. Santa Fe 705 N. 2nd Street 703 N. 2nd Street 1205 N. 4th Street ~ Res Res Res Res Com Res Res Res Res Res Res Res Res Res Res Res Com Res Res Res Property Partners LLC 116 & 118 N. Santa Fe (2nd Floor LoftApartments)Com Phill Hemmer 2035 E. Iron Avenue, Unit #203R Res AP Property Holdings, LLC 201 E. Iron Avenue Com Gregory Dallis 156-158 N. 11th Street Res Micheal Money 2035 E. Iron Awnue, Unit #206R Res Traniesh Byrd 701 N. 2nd Street Res Mark Martin Lilling Trust 2035 E. Iron #104R Com Kellin & Rebecca Poland 601 Johnstown Res Jana Endsley 1321 N. 3rd Street Res Kanesha Samilton 214 W . Grand Avenue Res Maria E Padilla 810 N. 5th Street Res JK Webb Properties LLC 120 S. Santa Fe Avenue Com Alan and Nancy Franzen 1413 Arapahoe Res Brandon Sears 900 N. 12th Street Res Santa Fe Properties, LLC 131 N. Santa Fe Avenue/128 S. Santa Fe Avenue Com Rusty A Leister Lilling Trust 600 N. Santa Fe Avenue Com John & Kristin Gunn 2035 E. Iron #200BR Res Christopher Helm 608 N. 11th Street Res Christopher Helm 752 N. Broadway Com Laurie Donmyer 255 N. Columbia Res Eva Wright 1200 N. 8th Res Foley Equipment Co. 2225 N. Ohio St Com Mark Ritter 2035 E. Iron #108R Res Angelica Farris 846 Choctaw Ave Res Christopher Vogel 2035 E. Iron #209R Res Christopher Helm 619 N. 5th Street Com HPSA, LLC. 501 Bhakta Court Com Jordan Bressel 2035 E. Iron #106R Res Mary C. Roth 2035 E. Iron #208R Res Ceecee Investments LLC 200 S. Santa Fe Avenue Com Greg Huston & Terry A Swearingen 1025 W Crawford Street Com Total 69 2021 Rebate Eaii:I $ 366 380 263 416 2,088 526 565 633 495 501 696 6,471 25,581 695 680 531 2,393 533 566 1,024 1,834 8,124 22,492 1,270 787 533 2,445 327 984 1,248 1,243 8,416 954 346 10,172 10,438 5,747 312 11,944 1,552 1,122 74,096 7,167 1,190 3,786 3,294 24,911 993 5,480 1,404 8,805 $ 268,814 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) L. Subsequent Events On April 4, 2022, the City issued Series 2022-A general obligation internal improvement bonds in the amounts of $7,840,000. 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, 2023 the last payment on October 1, 2037. The interest rate on the bonds ranges from 2.50% to 4.00%. 70 REQUIRED SUPPLEMENTARY INFORMATION CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFITS Schedule of Changes in the City's Total OPEB Liability and Related Ratios Last Ten Fiscal Years* Total OPES liability 2021 2020 2019 Service cost $ 244,531 $ 231 ,391 $ 249,957 Interest 104,082 150,552 125,877 Benefit paid [122,821] [159,018] [157,465] Economic/demographic gains/losses [255,426] Changes in assumptions 231,338 128,228 [186,344] Net change in total OPES liability 457,130 95,727 32,025 Total OPES liability -beginning 3,615,054 3,519,327 3,487,302 Total OPES liability -ending $ 4,072,184 $ 3,615,054 $ 3,519,327 Co-vered payroll $25,163,639 $25,163,639 $25,232,129 Total OPEB liability as a percentage of 16.18% 14.37% 13.95% co-vered-employee payroll Actuarially determined contribution $ 122,821 $ 159,018 $ 157,465 Actual contribution $ 122,821 $ 159,018 $ 157,465 Contributions as a percentage of covered payroll 0.49% 0.63% 0.62% 2018 $ 226,762 128,578 [265,000] 90,918 181 ,258 3,306,044 $ 3,487,302 $24,740,225 14.10% $ 265,000 $ 265,000 1.07% *data became available with the inception of GASS 75 during fiscal year 2018, therefore 10 years of data is unavailable. 71 CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) OTHER POSTEMPLOYMENT BENEFITS -KPERS Schedule of Changes in the City's Total OPES Liability and Related Ratios Last Ten Fiscal Years* Total OPES liability 2021 2020 2019 Service cost $ 64,709 $ 57,185 $ 52,863 Interest 14,404 19,037 22,667 Effect of economic/demographic gains or losses [151 ,608] 17,086 [95,243] Effect of assumptions changes or inputs 984 37,368 7,614 Benefit payments [20,904] [39,627] [281432] Net change in total OPEB liability [92,415] 91,049 [40,531] Total OPES liability -beginning 597,444 506,395 546,926 Total OPES liability -ending $ 505,029 $ 5971444 $ 506,395 Co-..ered payroll $12,482,683 $14,338,983 $13,991 ,543 Total OPEB liability as a percentage of 4.05% 4.17% 3.62% covered-employee payroll Actuarially determined contribution $ 135,087 $ 144,746 $ 135,087 Actual contribution $ 135,087 $ 144,746 $ 135,087 Contributions as a percentage of covered payroll 1.08% 1.01% 0.97% 2018 $ 52,380 17,061 75,173 [6,574] [30,368) 107,672 4391254 $ 546,926 $13,652,194 4.01% $ 109,466 $ 109i4aa 0.80% *data became available with the inception of GASS 75 during fiscal year 2018, therefore 10 years of data is unavailable. 72 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 2Q12 2017 2018 2019 City's proportion of the net pension Ii ability Local 0.764% 0.761% 0.811% 0.790% 0.796% Police & Fire 2.258% 2.180% 2.191% 2.081% 2.074% 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 Police & Fire $16,395,794 $20,251,512 $20,546,882 $20,019,473 $20,993,820 City's covered-employee payroll Local $12,931,197 $13,251 ,236 $13,548,056 $13,944,989 $14,366,294 Police & Fire $10,161,866 $10,730,033 $10,593,419 $10,441,055 $10,859,219 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% Police & Fi re 161.35% 188.74% 193.96% 191.74% 193.33% Plan fiduciary net position as a percentage of the total pension liability Local 71.98% 68.55% 72.15% 74.22% 75.02% Police & Fire 74.60% 69.30% 70.99% 71 .53% 71 .22% 2020 2Q21 0.766% 0.701% 2.038% 1.982% $13,290,226 $ 8,409,377 $25,135,770 $18,910,472 $14,948,415 $13,436,992 $11,285,465 $10,970,505 88.91% 62.58% 222.73% 172.38% 70.77% 81 .14% 66.81% 76.09% *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 ru11 2020 2021 Contractually required contribution Local $ 1,256,217 $ 1,243,711 $ 1,179,745 $ 1,205,334 $ 1,328,915 $ 1,156,925 $ 1,259,601 Police & Fire $ 2,527,995 $ 2,361,273 $ 1,986,933 $ 2,181 ,617 $ 2,497,473 $ 2,405,832 $ 2,563,084 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 1,259,601 Police & Fire 2,527,995 2,361 ,273 1,986,933 2,181,617 2,497,473 2,405,832 2,563,084 Contribution deficiency [excess] $ . $ s . $ -$ . $ City's covered-employee payroll Local $13,251,236 $13,548,056 $13,944,989 $14,366,294 $14,948,415 $13,436,992 $14,200,661 Police & Fire $10,730,033 $10,593,419 $10,441,055 $10,859,219 $11,285,465 $10,970,505 $11,241 ,597 Contributions as a percentage of covered employee payroll Local 9.48% 9.18% 8.46% 8.39% 8.89% 8.61% 8.87% Police & Fire 23.56% 22.29% 19.03% 20.09% 22.13% 21 .93% 22.80% *Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. 73 COMBINING SCHEDULES AND INDIVIDUAL FUND STATEMENTS SECTION 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. North 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 2021. 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 74 CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS -CONTINUED Federal grants fund -To account for grants received from the federal government to be used to monitor and mediate fair housing complaints. D.A.R.E. donations fund -To account for donations to the D.A.R.E. program. War memorial maintenance fund -To account for monies to be used for maintenance of the local war memorial. Arts & humanities fund -To account for revenues and expenses associated with arts and humanities activities. 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. 75 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2021 Total Total Nonmajor Nonmajor Nonmajor Debt Special Revenue Permanent Service Funds Funds Fund ASSETS Cash and investments $ 10,236,853 $ 560,856 $ 800 Receivables Accounts 2,211 Total assets $ 10,239,064 $ 560,856 $ 800 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 193,810 $ 1,880 $ Unearned revenue 3,551,978 Due to other funds 1,158 Total liabilities 3,746,946 1,880 Fund balances: Restricted 470,533 Committed 5,814,242 558,976 Assigned 343,350 Unassigned [136,007] Total fund balances 6,492,118 558,976 Total liabilities and fund balances $ 10,239,064 $ 560,856 $ See independent auditor's report on the financial statements. 76 - 800 800 800 Total Nonmajor Governmental Funds $ 10,798,509 2,211 $ 10,800,720 $ 195,690 3,551,978 1,158 3,748,826 471,333 6,373,218 343,350 [136,007] 7,051,894 $ 10,800,720 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2021 Total Total Nonmajor Nonmajor Nonmajor Debt Special Revenue Permanent Service Funds Funds Fund REVENUES Taxes $ 1,765,821 $ -$ - I ntergovemmental 2,239,721 Charges for services 358,102 17,547 Licenses and permits 10,300 Investment revenue 13,319 554 Donations 89,647 Miscellaneous 635,492 Total revenues 5,112,402 18,101 EXPENDITURES Current Culture and recreation 1,584,686 Public safety 312,121 Public health and sanitation 1,549,128 Planning and development 1,189,341 Miscellaneous 1,880 Debt service Interest and other charges Capital outlay 1,650,384 Total expenditures 61285,660 1,880 Excess [deficiency] of revenues over [under] expenditures [1,173,258] 16,221 Other financing sources [uses] Transfers in 1,409,532 Transfers [out] [190,042] Total other financing sources [uses] 1,219,490 Net change in fund balance 46,232 16,221 Fund balance -Beginning of year 6,445,886 542,755 800 Fund balance -End of year $ 6,492,118 $558,976 $ See independent auditor's report on the financial statements. 77 800 Total Nonmajor Governmental Funds $ 1,765,821 2,239,721 375,649 10,300 13,873 89,647 635,492 5,130,503 1,584,686 312,121 1,549,128 1,189,341 1,880 1,650,384 6,287,540 [1, 157,037] 1,409,532 [1901042) 1,219,490 62,453 6,989,441 $ 7,051,894 [THIS PAGE INTENTION All Y LEFT BLANK] CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2021 Business Special Community Sales Tax Downtown Bicentennial Improvement Neighbomood Par1<s& Special Development Economic TIF South ~ District Par1< Recreation ~ Revolving ~lo~ent Oistrict#1 9IhCID ASSETS Cash and investments 652,457 44,121 $ 549,701 $ 234 186,307 101,846 $ 1,096,634 50,822 Receivables Accounts 2 205 Total assets $ 652.457 2,205 44121 $ 549 701 234 $ 186,307 101,846 $ 1,096 634 50822 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 94 $ 535 $ 66,758 $ 4,491 $ $ 49,104 Unearned revenue Due to other funds 1 092 Total liabilities 94 1627 66,758 4,491 49104 Fund balance: Restricted 578 245,319 234 186,307 Committed 652,363 44,121 97,355 1,096,634 1,718 Assigned 237,624 Unassigned Total fund balance (deficit] 652,363 578 44 121 482 943 234 186 307 97 355 1 096 634 1 718 Total liabilities and fund balances 652 457 2,205 $ 44121 $ 549,701 $ 234 186 307 101846 1 096,634 ! 50 B22 DOWT1town Alley Downtown CID CID Hotel CID $ 196,987 2,131 $ 71,356 $ $ 196 987 $ 2131 $ 71358 $ $ 16,613 $ 2,128 $ 10,706 16,613 2128 10 706 180,374 3 60,652 180 374 3 60652 $ 196 987 $ 2131 71,358 $ North 9th STAR Bonds State 911 CID Subprojects Grants Com[111Jnications 12,156 $ 2,000,000 $ 217,883 475,880 12,156 $ 2 000 000 $ 217 883 $ 475,880 12,156 $ $ $ 20,697 12156 20697 2,000,000 217,883 349,457 105,726 2,000,000 217,883 455183 12.156 $ 2 000,000 $ 217 883 $ 475 880 See independent auditor's report on the financial statements. 76 Kenwood Special Cove Law Police Capital Enforcement Grants 65,371 $ 82 3,479 $ 65 371 $ 82 $ 3479 $ 7,403 $ 7 403 57,968 82 3,479 57968 82 3479 $ 65 371 $ 62 3479 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2021 Police War Federal Department Animal Federal DARE Memorial Arts & CARE Federal Homeowners' Private Shelter Grants Donations Maintenance !:!.Ymini1ill Q!!!l! FgJEi!Y~ EY!l~! ~ §.!!n!! Donations ASSETS Cash and investments $ 3,416,037 $ 31,887 $ 30,873 $ 151,402 26,141 99 $ 20,595 11,954 $ 550,866 Receivables Accounts 6 Total assets $ 3.416.037 $ 31887 30.873 $ 151 408 $ 26 141 $ 99 s 20 595 $ 11954 $ 550.866 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ $ $ $ $ $ 577 Unearned revenue 3,551,978 Due to other funds Total liabilities 3.551.978 577 Fund balance: Restricted 26,141 11,954 Commtttod 31,887 30,873 151,408 99 20,595 550,289 Assigned Unassigned [135.941) Total fund balance (defictt] [135.941) 31887 30873 151 408 26,141 99 20595 11 954 550.289 Total fiabitities and fund balances $ 3 416 037 31 887 $ 30873 $ 151408 26141 $ 99 s 20.595 $ 11954 s 550 866 Special Court Police Assessments Bond and Investigation ~ Restitution Account $ 116,682 $ 28,840 $ 3,38!1 $ 116,682 s 26.840 $ 3 385 $ $ $ 116,682 26,840 3,385 116682 26840 3385 s 116682 $ 26.840 s 3 385 Beechcrafl DTF DTF Remediation Citizenship Local ~ Settlement 44,081 $ 29,704 $ 47,723 $ 44 081 $ 29704 $ 47,723 $ $ 2,548 $ $ 66 2 548 66 44,081 27,156 47,723 1661 44,081 27156 47 723 1661 $ 44 081 $ 29,704 l 47,723 $ See independent auditor's repon on the financial statements. 79 Bail Bond Escrow I2!§!! $ 1,135 $ 10,238,853 2 211 1135 $ 10,239,054 $ 193,810 3,551,978 1158 3,746946 470,533 1,135 5,814,242 343,350 1136.007J 1135 6,492,118 $ 1135 $ 10 239 084 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2021 Business Special Community Sales Tax Downtown Bicentennial Improvement Neighbortlood Parks & Special Development Economic TIF South Center District Park Recreation ~ Revolving Qevelogment ~ fil!J..Q!Q Revenues Taxes $ $ $ $ $ $ $ 391,195 $ 701,203 $ 239,914 Intergovernmental 227,127 227,127 Charges for services 94,726 Licenses and penmits 10,300 Investment revenue 1,224 21 Donations Miscellaneous 366,192 ---12,116 Total Revenues 366,192 94 726 10300 227,127 227,127 391195 702 427 252,051 Expenditures Currnnt Culture and recreation 727,152 Public safety Public health and sanitation 227,127 Planning and development 108,452 315,326 252,030 Capital outlay 222,567 1,009,526 Total Expenditures 727,152 108,452 222,567 227,127 1,009,526 315,326 252,030 Excess {deficiency) of revenues over {under] expenditures [360,960) [13,726) 10300 ~ [618,331] 387101 21 Other financing sources {uses] Transfers in 695,682 Transfers [out] Total other financing sources (uses] ~ ---------- Net change in fund balance 334,722 {13,726) 10,300 4,560 {618,331] 387,101 21 Fund balance, beginning of year 317.641 14,304 33821 478,383 ~ 186,307 715,686 709,533 1,697 Fund balance, end of year ~ $ 578 $ 44,121 $482,943 ~ $ 186,307 $ 97,355 $ 1,096,634 $ 1 718 Downtown Alley Downtown CID gQ Hotel CID $ 332,345 $ 21,324 $ 67,436 $ 291 2 47 332,636 21326 67,483 438,826 25,065 25,550 438 826 25065 25,550 [106,190] [3,739] 41933 [106,190] [3,739) 41,933 266,564 3,742 18,719 $ 180,374 $ 3 $ 60,652 $ North 9th STAR Bonds Stele 911 gQ Sub~rojects Grants Communications 12,404 $ $ $ 246,390 403,087 459 174 608 12,404 174 608 246,390 403,546 290,355 12,404 174 608 35000 12404 174 608 35,000 290 355 211,390 113191 211,390 113,191 2,000,000 6,493 341,992 $ 2,000,000 $ 217,863 $ 455,183 See independent auditors report on the financial statements. 80 Kenwood Special Cove Law Police ~ EnfQ££!![Ilent Grants $ $ $ 202 772 202772 [202,772) 68,350 6835Q [134,422] 192390 82 3479 $ 57,968 $ 82 $ 3,479 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON MAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2021 Police War Federal Department Federal DARE Memorial Arts & CARE · Federal Homeowners1 Private ~ Donations Mainte□~□!i!! Humanities 2@01 Eocteiture Funds Assistance ~ Revenues Taxes $ $ $ $ $ $ $ $ Intergovernmental 1,135,990 Charges for services 263,376 Licenses and pem,its Investment revenue 30 Donations Miscellaneous 30,369 1 554 10000 Total Revenues 1,135,990 30369 30 263,376 1 554 10000 Expenditures Current Culture and recreation 857,534 Public safety Public health and sanitation 1,223,502 Planning and development 11,688 Capital outlay Total Expenditures 1,223,502 11,688 857 534 Excess [deficiency) of revenues over [under) expenditures [87,512) 18 681 30 [594,158) 1554 10,000 Other financing sources [uses] Transfers in 645,500 Transfers [out) Total other financing sources (uses] -------645 500 ---- Net change in fund balance [87,512) 18,681 30 51,342 1,554 10,000 Fund balance, beginning of year [48,429) 13,206 30843 100,066 ~ 99 19041 1954 Fund balance, end of year $ [135,941) $ 31,887 $ 30 873 $ 151,408 ~ $ 99 $ 20,595 $ 11954 Animal Special Court Shelter Assessments Bond and Donations Escrow Restitution $ $ $ 89,647 89647 4,554 98,499 98499 4 554 [8,852) (4,554) [8,852] (4,554] 559141 116682 31394 $ 550,289 $ 116,682 $ 26,840 Police Investigation DTF DTF Account Citizenship k29l! Reserve $ $ . $ $ 11,235 34592 6060 11235 34592 6060 17,212 5,911 5911 17 212 5 324 17,380 6,060 5,324 17,380 6,060 3,384 38,757 9,776 41663 $ 3,385 $ 44,081 $ 27156 $ 47 723 See independent auditors report on lhe financial statements. 81 Beechcraft Bai Remediation Bond Settlement ~ Totals $ $ $ 1,765,821 2,239,721 358,102 10,300 10 13,319 89,647 635492 10 5,112 402 1,584,686 312,121 1,549,128 1,189,341 1650384 6,285660 10 (1,173,258) 1,409,532 [190,042) [190 042) 11!i!Q Q~2l 1,219.49Q [190,032] 46,232 189,966 1,135 6,445,886 $ [66) $ 1,135 $ 6,492 118 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR PERMANENT FUNDS December 31 , 2021 Cemetery Mausoleum Tricentennial ASSETS Endowment Endowment Commission Cash and investments $ 552,860 $ 2,073 $ 5,923 Total assets $ 552,860 $ 2,073 $ 5,923 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 1,880 $ -$ - Total liabilities 1,880 Fund balances Committed 550,980 2,073 5,923 Total liabilities and fund balances $ 552,860 $ 2,073 $ s1s23 See independent auditor's report on the financial statements. 82 Total $ 560,856 $ 560,856 $ 1,880 1,880 558,976 $ 560,856 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR PERMANENT FUNDS For the Year Ended December 31, 2021 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Revenues Charges for services $ 17,547 $ -$ Investment revenue 546 2 Total revenues 18,093 2 Expenditures Miscellaneous 1,880 Total expenditures 1,880 Net change in fund balance 16,213 2 Fund balances -beginning of year 534,767 2,071 Fund balances -end of year $ 550,980 $ 2,073 $ See independent auditor's report on the financial statements. 83 - 6 6 6 5,917 5,923 Total $ 17,547 554 18,101 1,880 1,880 16,221 542,755 $ 558,976 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, 2021 Budgeted Amounts Actual Original Final Revenues Miscellaneous $ 366,192 $ 828,674 $ 828,674 Total revenues 366,192 828,674 828,674 Expenditures Culture and recreation 727,152 740,000 740,000 Total expenditures 727,152 740,000 740,000 Excess [deficiency] of revenues over [under] expenditures {360,960] 88,674 88,674 Other financing sources [uses] Transfers in 695,682 828,674 Total other financing sources [uses] 695,682 828,674 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses) 334,722 88,674 917,348 Unreserved fund balance, January 1 317,641 137,177 Unreserved fund balance/GAAP fund balance December 31 $ 652,363 $ 88,674 $ 1,054,525 See independent auditors report on the financial statements. 84 Variance with Final Budget Positive [Negative] $ [462,482] [462,482] 12,848 12,848 [449,634] [132,992) [132,992] [582,626] 180,464 $ [402,162) 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, 2021 Budgeted Amounts Actual Original Revenues Charges for services $ 95,808 $ 90,500 $ Total revenues 95,808 90,500 Expenditures Planning and development 108,452 90,500 Total expenditures 108,452 90,500 Excess [deficiency] of revenues over [under] expenditures [12,644] Unreserved fund balance, January 1 11 ,017 4,461 Unreserved fund balance, December 31 [1,627] $ 4,461 $ Reconciliation to GAAP Accounts receivable 2,205 GAAP Fund Balance, December 31 $ 578 See independent auditor's report on the financial statements. 85 Final 90,500 90,500 90,500 90,500 4,461 4,461 Variance with Final Budget Positive [Negative] $ 5,308 5,308 [17,952] [17,952] [12,644] 6,556 $ [6,088] 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, 2021 Budget~!;! Amounts Actual Original Revenues Licenses and permits $ 10,300 $ 3,000 $ Total revenues 10,300 3,000 Expenditures Capital outlay 10,000 Total expenditures 10,000 Excess [deficiency] of revenues over [under] expenditures 10,300 [7,000] Unreserved fund balance, January 1 33,821 21 ,751 Unreserved fund balance/GAAP fund balance December 31 $ 44,121 $ 14,751 $ See independent auditor's report on the financial statements. 86 Final 4,500 4,500 10,000 10,000 [5,500] 21 ,751 16,251 Variance with Final Budget Positive [Negative] $ 5,800 5,800 10,000 10,000 15,800 12,070 $ 27,870 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, 2021 Budgeted Amounts Actual Original Revenues Intergovernmental $ 227,127 $ 227,300 $ Total revenues 227,127 227,300 Expenditures Capital outlay 447,581 251,000 Total expenditures 447,581 251,000 Excess [deficiency] of revenues over [under] expenditures [220,454] [23,700] Unreserved fund balance, January 1 465,773 352,706 Unreserved fund balance, December 31 245,319 $ 329,006 $ Reconciliation to GAAP Current year encumbrances 237,624 GAAP Fund Balance, December 31 $ 482,943 See independent auditor's report on the financial statements. 87 Final 227,300 227,300 251,000 251,000 [23,700] 352,706 329,006 Variance with Final Budget Positive [Negative] $ [173] [173] (196,581] [196,581] [196,754] 113,067 $ [83,687] 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, 2021 Budgeted Amounts Actual Original Revenues Intergovernmental $ 227,127 $ 235,000 $ Total revenues 227,127 235,000 Expenditures Public health and sanitation 227,127 235,000 Total expenditures 227,127 235,000 Excess [deficiency] of revenues over [under] expenditures Unreserved fund balance, January 1 234 234 Unreserved fund balance/GAAP fund balance December 31 $ 234 $ 234 $ See independent auditor's report on the financial statements. 88 Final 235,000 235,000 235,000 235,000 234 234 Variance with Final Budget Positive [Negative] $ [7,873] [7,873] 7,873 7,873 $ Revenues Taxes Miscellaneous Total revenues Expenditures Capital outlay Total expenditures CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX ECONOMIC DEVELOPMENT FUND For the Year Ended December 31, 2021 Budgeted Amounts Actual Original Final $ 391,195 $ 338,228 $ 344,976 2,000 391,195 340,228 344,976 1,009,526 375,000 370,000 1,009,526 375,000 370,000 Excess [deficiency] of revenues over [under] expenditures [618,331) [34,772] Unreserved fund balance, January 1 715,686 673,791 Unreserved fund balance/GAAP fund balance December 31 $ 97,355 $ 639,019 $ See independent auditor's report on the financial statements. 89 [25,024] 673,791 648,767 Variance with Final Budget Positive [Negative] $ 46,219 46,219 [639,526) [639,526) [593,307] 41,895 $ (551,412) 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, 2021 Budgeted Amounts Actual Original Revenues Charges for services $ 263,376 $ 324,600 $ Miscellaneous 78,000 Total revenues 263,376 402,600 Expenditures Culture and recreation 857,534 906,099 Total expenditures 857,534 906,099 Excess [deficiency] of revenues over [under] expenditures [594,158) [503,499) Other financing sources [uses] Transfers in 645,500 645,500 Total other financing sources [uses] 645,500 645,500 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 51,342 142,001 Unreserved fund balance, January 1 100,066 29,300 Unreserved fund balance/GAAP fund balance December 31 $ 151,408 $ 17\301 $ See independent auditor's report on the financial statements. 90 Final 324,600 78,000 402,600 906,099 906,099 [503,499] 645,500 645,500 142,001 29,300 171,301 Variance with Final Budget Positive [Negative] $ [61,224] [78,000) [139,224) 48,565 48,565 [90,659) [90,659] 70,766 $ (19,893) 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, 2021 Budgeted Amounts Actual Original Revenues Taxes Real estate taxes $ 2,978,243 $ 3,342,920 Delinquent taxes 86,458 40,000 Motor vehicle taxes 374,103 359,534 Special assessments 1,405,148 1,328,500 Miscellaneous 1?44,792 Total revenues 4,843,952 6,815,746 Expenditures Debt SeNice Principal retirement 10,549,900 2,935,000 Interest and other charges 1,917,407 1,750,000 Special assessments 1,336,700 Miscellaneous 2,420,000 Total expenditures 12,467,307 8,441,700 Excess [deficiency] of revenues over [under] expenditures [7,623,355) [1,625,954 J Other financing sources [uses] Transfers in 1,842,841 1,625,000 Bond proceeds 6,167,545 Total other financing sources [uses] 8,010,386 1,625,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 387,031 [954) Unreserved fund balance, January 1 1,665,599 4,127,073 Unreserved fund balance, December 31 2,052,630 $ 4,126,119 Reconciliation to GAAP Taxes receivable 3,119,483 Deferred revenue [3,060,449) GAAP Fund Balance, December 31 $ 2,111,664 See independent auditor's report on the financial statements. 91 Final $ 3,342,920 40,000 359,534 1,328,500 1,744,792 6,815,746 2,935,000 1,750,000 1,336,700 2,420,000 8,441,700 [1,625,954) 1,625,000 1,625,000 [954] 4,127,073 $ 41126, 119 Variance with Final Budget Positive [Negative] $ [364,677] 46,458 14,569 76,648 [1,744,792) [1,971,794) [7,614,900] [167,407] 1,336,700 2,420,000 [4,025,607) [5,997,401] 217,841 6,167,545 6,385,386 387,985 [2,461,474) $ [2,073,489] 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 , 2021 Budgeted Amounts Actual Original Revenues Charges for services $ 3,507,381 $ 3,066,100 Miscellaneous 63,483 7 300 Total revenues 3,570,864 3,073,400 Expenditures Public works 1,967,405 2,409,123 Total expenditures 1,967,405 2,409,123 Excess [deficiency] of revenues over [under] expenditures 1,603,459 664,277 Other financing sources [uses] Transfers (out] [659,200] [615,675] Total other financing sources [uses] [659,200] [615,675] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 944,259 48,602 Unreserved fund balance, January 1 4,591 ,225 4,435,512 Unreserved fund balance, December 31 $ 5,5351484 $ 4,484,114 See independent auditor's report on the financial statements. 92 Final $ 3,066,100 7 300 3,073,400 2,409,123 2,409,123 664,277 [615,675] [615,675] 48,602 4,435,512 $ 4,484,114 Variance with Final Budget Positive [Negative) $ 441,281 56,183 497 464 441 ,718 441 718 939,182 [43,525] [43,525] 895,657 155,713 $ 1,051 ,370 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) WATER AND SEWER FUND Revenues Charges for services Investment revenue Miscellaneous Total revenues Expenditures Public works Total expenditures Excess (deficiency] of revenues over (under] expenditures Other financing sources [uses] Transfers in Transfers [out] Total other financing sources (uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balances, January 1 For the Year Ended December 31 , 2021 Actual $ 20,071,807 4,470 20,076,277 8,381,112 8,381,112 11,695,165 153,599 [8,201,769] [8,048,170] 3,646,995 16,682,846 Budgeted Amounts Original Final $ 19,785,400 $ 19,785,400 179,300 179,300 4 000 4,000 19,968,700 19,968,700 14,641,296 14,641,296 14,641,296 14,641,296 5,327,404 5,327,404 [144,400] [144,400] [5,964,717] [5,964,717) [6,109,117] (6,109,117] [781,713] [781,713] 13,673,636 13,673,636 Variance with Final Budget $ Positive [Negative] 286,407 [179,300] 470 107,577 6,260,184 6,260,184 6,367,761 297,999 [2,237,052) [1,939,053) 4,428,708 3,009,210 Unreserved fund balances, December 31 $ 20,329,841 $ 12,891,923 $ 12,891,923 $ 7,4371918 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, 2021 Budgeted Amounts Actual Original Final Revenues Charges for services $ 3,407,884 $ 3,228,400 $ 3,228,400 Miscellaneous 830 Total revenues 3,408,714 3,228,400 3,228,400 Expenditures Public works 4,091,836 4,171,267 4,171,267 Total expenditures 4,091,836 4,171,267 4,171,267 Excess [deficiency] of revenues over [under) expenditures [683,122] [942,867] [942,867] Other financing sources [uses] Transfers [out) [497,350) [417,350] [417,350] Total other financing sources [uses] [497,350} [417,350] [417,350] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [1,180,472] [1,360,217) [1,360,217) Unreserved fund balance, January 1 2,149,592 1,050,423 Unreserved fund balances, December 31 $ 969,120 $ [1,360,217) $ [309,794) See independent auditor's report on the financial statements. 94 Variance with Final Budget Positive [Negative] $ 179,484 830 180,314 79,431 79,431 259,745 [80,000] [80,000] 179,745 1,099,169 $ 1,278,914 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, 2021 Budgeted Amounts Actual Original Revenues Charges for services $ 789,538 $ 870,100 $ Investment revenue 400 Miscellaneous 98,514 Total revenues 888,052 870,500 Expenditures Recreation 863,437 858,770 Total expenditures 863,437 858,770 Excess [deficiency] of revenues over [under] expenditures 24,615 11 ,730 Other financing sources [uses] Transfers in 100,000 {5,800] Total other financing sources [uses] 100,000 [5,800] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 124,615 5,930 Unreserved fund balance, January 1 48,087 33,488 Unreserved fund balances, December 31 $ 172,702 $ 39,418 $ See independent auditor's report on the financial statements. 95 Final 870,100 400 870,500 858,770 858,770 11,730 11,730 33,488 45,218 Variance with Final Budget Positive [Negative] $ [80,562] [400] 98,514 17,552 [4,667] [4,667] 12,885 100,000 100,000 112,885 14,599 $ 127,484 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, 2021 Budgeted Amounts Actual Original Revenues Charges for services $ 250,000 $ 250,000 $ Miscellaneous 1,279 Total revenues 251 ,279 250,000 Expenditures General government 322,088 430,418 Total expenditures 322,088 430,418 Excess [deficiency] of revenues over [under] expenditures [70,809] [180,418] Unreserved fund balance, January 1 1,142,019 958,952 Unreserved fund balances, December 31 $ 1,071,210 $ 778,534 $ See independent auditor's report on the financial statements. 96 Final 250,000 250,000 430,418 430,418 [180,418] 958,952 778,534 Variance with Final Budget Positive [Negative] $ 1 279 1,279 108,330 108,330 109,609 183,067 $ 292,676 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) HEAL TH INSURANCE FUND For the Year Ended December 31, 2021 Budgeted Amounts Actual Original Final Revenues Charges for services $ 6,428,331 $ 7,268,999 $ 7,268,999 Miscellaneous 24,298 49,500 49,500 Total revenues 6,452,629 7,318,499 7,318,499 Expenditures General government 5,815,054 7,151,300 7,151,300 Total expenditures 5,815,054 7,151,300 7,151,300 Excess [deficiency] of revenues over [under] expenditures 637,575 167,199 167,199 Unreserved fund balance, January 1 3,216,150 2,922,027 2,922,027 Unreserved fund balances, December 31 $ 3,853,725 $ 3,089,226 $ 3,089,226 See independent auditor's report on the financial statements. 97 Variance with Final Budget Positive [Negative] $ [840,668] [25,202) [865,870] 1,336,246 1,336,246 470,376 294,123 $ 764,499 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GMP BASIS) CENTRAL GARAGE FUND For the Year Ended December 31, 2021 Budgeted Amounts Actual Original Final Revenues Charges for services $ 1,545,351 $ 1,434,400 $ 1,434,400 Miscellaneous 3,276 Total revenues 1,548,627 1,434,400 1,434,400 Expenditures General government 1,547,939 1,500,286 1,500,286 Total expenditures 1,547,939 1,500,286 1,500,286 Excess [deficiency] of revenues over [under] expenditures 688 [65,886] [65,886] 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] 80,688 14,114 14,114 Unreserved fund balance, January 1 313,738 189,656 189,656 Unreserved fund balance, December 31 $ 394,426 $ 203,770 $ 203,770 See independent auditor's report on the financial statements. 98 Variance with Final Budget Positive [N§Aative] $ 110,951 3,276 114,227 [47,653) [47,653] 66,574 66,574 124,082 $ 190,656 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one agency to other departments or agencies of the government and to other governmental units on a cost reimbursement basis. Workers' compensation reserve fund -To account for the costs of providing a partially self-insured workers' compensation plan and for accumulating the necessary reserve amounts. Health insurance fund -To account for the costs of providing a partially self-insured health insurance and for accumulating the necessary reserve amounts. Central garage fund -To account for the accumulation and allocation for costs associated with the City's centralized vehicle repair shop. 99 CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2021 Workers' Compensation Health ASSETS Reserve Insurance Current assets: Cash and investments $ 1,071,210 $3,853,726 Inventory and prepaid supplies Total current assets 1,071,210 31853,726 Capital assets: Capital assets Less: accumulated depreciation Total capital assets Total assets 1,071,210 3,853,726 Deferred outflows of resources: KPERS OPES deferred outflows of resources Pension deferred outflows of resources Total deferred outflows of resources Total assets and deferred outflows of resources $ 1,071,210 $3,853,726 Liabilities: Current liabilities (payable from current assets): Accounts payable $ -$ - Current portion of compensated absences payable Current portion of accrued claims payable 197 807 417,000 Total current liabilities (payable from current assets) 197,807 417,000 Noncurrent liabilities: Compensated absences payable Accrued claims payable 168,990 Net KPERS OPES obligation Net pension liability Total noncurrent liabilities 168,990 Total liabilities 366,797 417,000 Deferred inflows of resources KPERS OPES deferred inflows of resources Pension deferred inflows of resources Total deferred inflows of resources Total liabilities and deferred inflows of resources $ 366,797 $ 417,000 Net Position Invested in capital assets, net of related debt $ -$ - Unrestricted 704,413 3,436,726 Total net position $ 704,413 $3,436,726 See independent auditor's report on the financial statements. 100 Total Internal Central Service Garage Funds $477,047 $5,401,983 136,375 136,375 613,422 5,538,358 168,234 168,234 154,325 154,325 13,909 13,909 627,331 51552,267 1,575 1,575 36,501 36,501 381076 38,076 $665,407 $5,590,343 $ 82,621 $ 82,621 13,400 13,400 614,807 96,021 7101828 16,655 16,655 168,990 8,484 8,484 105,909 105,909 131,048 300,038 227,069 1,010,866 3,541 3,541 67,325 67,325 70,866 70,866 $297,935 $1 ,081 ,732 $ 13,909 $ 13,909 353,563 4,494,702 $367,472 $4,508,611 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUND For the Year Ended December 31, 2021 Workers' Compensation Health Central Reserve Insurance Gara9e Operating revenues Charges for services $ 250,000 $ 6,428,331 $ 1,545,351 Miscellaneous 1,279 24,298 3,275 Total operating revenues 251,279 6,452,629 1,548,626 Operating expenses General government 242,390 5,627,054 1,503,421 Depreciation 362 Total operating expenses 242,390 5,627,054 1,503,783 Income [loss] before transfers 8,889 825,575 44,843 Transfers from [to] other funds Transfers in 80,000 Total transfers 80,000 Change in net position 8,889 825,575 124,843 Net position, January 1 695,524 2,611,151 242,629 Net position, December 31 $ 704,413 $ 3,436,726 $ 367,472 See independent auditor's report on the financial statements. 101 Total Internal Service Funds $ 8,223,682 28,852 8,252,534 7,372,865 362 7,373,227 879,307 80,000 80,000 959,307 3,549,304 $ 4,508,611 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2021 Workers' Compensation Health Reserve Insurance Cash flows from operating activities Cash received from customers and users $ 170,302 $6,240,331 Cash paid to suppliers of goods or services [242,390] [5,627,154] Cash paid to employees Other operating receipts 1,279 24,298 Net cash provided by [used in] operating activities [70,809) 637,475 Cash flows from noncapital financing activities Transfers in Net cash provided by [used in] noncapital financing activities Net increase [decrease] in cash and cash equivalents [70,809] 637,475 Cash and cash equivalents, January 1 1,142,019 3,216,251 Cash and cash equivalents, December 31 $ 11071,210 $3,853,726 See independent auditor's report on the financial statements. 102 Total Internal Central Service Garage Funds $1,545,351 $7,955,984 [1,234,304] [7,103,848] [276,664] [276,664] 3,275 28,852 37,658 604,324 80,000 80,000 80,000 80,000 117,658 684,324 359,389 4,717,659 $ 477,047 $5,401,983 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS (Continued) For the Year Ended December 31, 2021 Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Workers' Compensation Health Reserve Insurance Central Garage Total Internal Service Funds Operating income [loss] $ 8,889 $ 825,575 $ 44,843 $ 879,307 Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense [Increase] decrease in inventory [Increase] decrease in deferred outflows Increase [decrease] in accounts payable Increase [decrease] in accrued compensated absences Increase (decrease] in net pension liability Increase (decrease] in KPERS OPES liability Increase [decrease] in claims payable Increase (decrease] in deferred inflows [79,698] [100] [188,000] 362 [35,156] 11 ,901 36,971 [246] [81,998] [239] 61,220 362 [35,156] 11,901 36,871 [246] [81,998] [239] [267,698] 61,220 Net cash provided by [used in] operating activities $ [70,809] $ 637,475 $ 37,658 $ 604,324 See independent auditor's report on the financial statements. 103 STATISTICAL SECTION Schedule 1 City of Salina, Kansas Nat Position by Component Last Ten Fiscal Years (accn.Jal basis of accounting) (in 000's) Fiscal Year gQ1Z ~ 621! 2015 W-2 2Q1l ~ ~ 2020 2021 Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Governmental activities Net investmenl in capital assets $112,929 94% S116,585 90% $115,589 90% $130,401 122% $ 124,635 108% $ 129,921 105% S144,846 109% $151,527 110% $143,559 100% $ 143,768 64% Restricted 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% 69,368 31% Unrestricted ~ 5% ~ 9% --11.fil 9% (24,922) -23% ~ -9% ~ -7% (13,759) -10% (14,839) -11% ~ -1% 8,997 4% Total governmental activities net position $119,522 100% ~ 100% ~ 100% $106,703 100% $ 115,888 100% ~ 100% $133,453 100% $138,358 100% ~ 100% $ 223,133 100% Business-type activities Net investment in capital assets $ 50,857 69% $ 57,103 75% $ 61,721 75% $ 68,107 80% $ 62,427 71% s 63,316 71% 62,368 69% 63,301 68% s 63,742 68% $ 56,004 60% Restrioted 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% 1,132 1% Unrestricted 21,450 29% 17794 23% 19 545 24% ~ 18% 23,621 27% 24255 27% 26,503 29% 28,883 31% 31,692 33% 36,394 39% Total business-type activities net position $ 73,860 100% $ 76,450 100% $ 82,778 100% ~ 100% $ 87,560 100% $ 89,063 100% $ 90,383 100% $ 93,552 100% $ 96,610 100% $ 93,530 100% Primary government Net Investment in capital assets $163,788 85% $173,688 84% $177,311 84% $198,508 103% $ 187,082 92% $ 193,237 91% $207,213 93% $214,828 93% $207,301 86% $ 199,772 63% Restricted 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% 70,500 22% Unrestricted . 26,961 14% 29,422 14% 30,959 15% ~ -5% ~ 6%1 ~ 8% 12,744 611/0 14044 6% 29,948 12% 46,391 15% Total primary government net position $193,382 100% $205,873 100% $210.658 100% $191,932 100% ~ 100% $ 212.784 100% $223,835 100% ~ 100% $ 240,691 100% $ 316,663 100% Source: City of 5alina Annual Comprehensive Financial Reports, 2012 -2021 104 Expenses Governmental activities: General government Public safety Public works Public health and sanitation Culture and recreation Planning and development Interest on long tenn debt Total governmental activities expenses Business-type activities: Solid waste disposal Water and sewer Sanitation Golf course Total business-type activities expenses Total primary government expenses Program Revenues Governmental activities: Charges for services General government Public safety Public works Public health and santtation Culture and recreation Planning and development Operating grants and contibutions Capital grants and contributions Total governmental activities program revenues Business-type activities: Charges for services Solid waste disposal Water and sewer Sanitation Golf course capital grants and contributions Total business-type activities program revenues Total primary government program revenues Net (Expense) Revenue Governmental activities Business-type activities Total primary government net expense Schedule2 Ctty of Salina, Kansas Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (in OOO's) Fiscal Year 2012 2013 ~ ~ Z,Q1§ WI ,1QJ,J! ZQ1l! 2020 ~ $ 11,278 $ 10,978 $ 12,175 $ 10,743 $ 9,188 $ 9,780 $ 12,013 $ 10,866 $ 10,395 $ 16,098 19,066 19,649 20,208 21,084 22,232 23,120 23,892 25,358 24,672 23,877 10,957 11,064 11,401 9,049 9,773 10,345 10,458 10,529 10,511 16,335 1,383 1,369 347 995 1,095 1,126 1,256 1,156 1,323 2,315 5,338 4,809 5,156 6,517 6,612 6,880 7,040 6,879 5,034 6,305 3,362 3,399 3,236 1,915 2,047 1,835 2,369 2,522 2,004 2,289 ----1.fil.1 ~ ------1..lli ~ -----1.lli -----1..ill. ----1J.l1. ____l,.1§2, ~ -----1.fil 53,298 53 221 54,340 52077 53,918 ~ 59145 59479 56288 70,046 2,067 3,532 1,867 1,766 2,335 2,365 2,382 2,871 2,056 1,836 14,897 15,418 14,938 11,712 14,807 15,650 15,190 14,551 13,386 13,310 2,441 2,237 2,399 1,909 2,043 2,178 2,419 2,313 2,526 3,655 _____m_ ---1.§§. _____fil __...!!ll ___m_ ~ ~ _..fil!§_ ~ ___fill!_ 20,128 21,955 20,041 16,208 19 977 21 045 20,917 20,623 18 773 19678 $ 73,426 $ 75,176 $ 74,381 $ 68,285 $ 73,895 $ 75,856 $ 80,062 $ 80,102 $ 75,061 $ 89,725 $ 6,328 $ 5,548 $ 5,662 $ 3,151 s 3,134 $ 3,470 $ 3,569 $ 3,401 s 3,339 $ 3,440 4,290 4,656 4,222 4,600 4,891 4,601 4,815 4,357 4,325 4,527 306 277 255 193 238 348 285 309 294 415 46 34 46 46 44 50 47 46 49 63 1,728 1,466 1,533 1,501 1,638 1,541 1,545 1,514 279 1,070 158 161 167 73 140 91 150 104 113 114 4,495 4,200 4,015 3,394 4,332 4,541 4,299 4,540 4,714 4,711 ------~ 66,150 ~ 16,342 15900 ~ ~ 14,642 ____jm.Q. ~ ---1ll1.§. 80,490 3,137 3,138 3,024 2,519 2,795 3,165 3,097 3,082 3,290 3,549 19,099 17,938 18,742 19,059 19,322 19,855 20,202 20,510 19,449 21,241 2,462 2,514 2,553 2,529 2,751 2,885 3,006 3,325 3,194 3,422 783 719 811 820 789 798 756 810 581 790 ~ 115 25,755 24,309 25,245 24,927 25657 26,703 27,061 27,727 26,513 29,001 $ 43,106 $ 40,651 S 41145 $ 37 885 $ 40,807 $ 41,345 S 41,771 $ 41,998 $ 39,628 $109,491 $ (35,947) $ (36,879) $ (38,440) $ (39,119) $ (38,768) $ (40,169) $ (39,800) $ (45,208) $ (43,173) $ 10,444 ----2.fil ~ ~ ~ ____Mfil1_ ~ _____§J_Q ~ ~ ~ $ (30,320) $ (34,525) $ (33,236) $ (30,400) $ (33,088) $ (34,511) $ (33,657) $ (38,105) $ (35,433) $ 19,766 General Revenues and Other Changes In Net Position Governmental activities: Taxes Property taxes, general purpose $ 8,272 $ 8,031 $ 8,315 $ 8,242 $ 8,196 $ 9,101 $ 8,623 $ 9,708 $ 10,308 $ 10,821 Property taxes, debt service 2,439 2,362 2,578 2,766 3,022 2,487 2,457 2,684 3,058 3,065 Motor vehicle taxes 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 1,520 1,643 Sales tax, general purpose 12,165 12,260 12,689 12,931 12,781 12,906 13,292 13,419 13,697 15,315 Selective sales tax 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 9,751 11,405 Other taxes 6,486 6,630 7,231 7,363 7,991 6,900 7,241 6,975 6,117 7,116 Investment revenues 66 67 98 86 148 92 183 670 286 158 Miscellaneous 660 9,918 1,160 2,371 5,842 2,003 1,062 1,168 8,328 2,405 Transfers, net __ 30_ ~ ---2§!_ ~ ~ ~ ~ ------1,ill ~ ----1Mll Total governmental activities 35,481 45,748 38,569 43448 47851 48,002 48034 ~ 58199 68608 Business-type activities: Investment revenues 79 49 51 56 78 129 233 4 Miscellaneous 434 279 97 103 153 846 446 2,416 Reimbursements 180 132 79 Transfers, net _______@Q) ~ __(1ill) ~ ~ ~ ~ ~ ~ Total business-type activities ~ __.J§W ~ ~ ~ __l1.ill) ~ ~ ~ (14,265) Total primary government $ 35,964 $ 45126 $ 38,897 $ 39,855 ~ $ 43,867 $ 43,589 $ 46,176 $ 53,517 $ 54,343 Change in Net Position Governmental activities $ (466) $ 8,869 $ 129 $ 4,329 $ 9,083 $ 7,833 8,233 4,902 15,026 79,052 Business-type activities _____hl1Q_ -----1,.lli. ~ ~ ____ll§§, ~ ~ ~ ~ ~ Total primary government $ 5.644 $ 10,601 $ 5661 $ 9455 $ 11 339 $ 9,356 $ 9931 S 8071 $ 18,084 $ 74,109 Source: City of Salina Annual Comprehensive Financial Reports, 2012 -2021 105 Schedule 3 City of Salina, Kansas Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in 000's) Fiscal Year 2012 2013 £l!li 2015 2016 2017 2018 2019 2020 {Note 1 l 2021 General Fund Nonspendable $ 116 $ 81 $ 107 $ 111 $ 131 $ 153 $ 152 $ 212 $ 184 $ 168 Restricted Committed Assigned 540 331 239 199 136 214 340 274 244 152 Unreserved/unassigned ~ ~ ~ ~ ~ ~ 6 251 8,821 14,714 20 743 Total general fund $ 3,828 $ 3,550 $ 4,254 ~ $ 5,032 ~ $ 6,743 $ 9,307 $ 15,142 $ 21,064 Restatement Restated fund balance All other governmental funds Nonspendable $ $ $ $ $ $ $ $ $ $ Restricted 3,319 3,446 2,910 2,793 3,142 4,191 4,648 5,224 4,980 72,025 Committed (516) 7,486 9,886 8,695 14,284 10,072 7,325 8,086 13,225 16,597 Assigned 4,087 3,146 1,280 619 1,043 641 1,227 963 1,965 1,587 Unreserved/unassigned (10,537) ~ ______@!) (852) (7,804) (4,028) (1,058) Total all other governmental funds $ 6,890 $ 14,078 $ 14,076 $ 1,570 $ 11 ,646 $ 14,876 $ 12,348 $ 6,469 $ 16,143 $ 89,151 Note 1: Committed fund balance Increased due to changes from the implementation of GASS Statement 84 in fiscal year 2020. Note 2: Restricted fund balance increased due to the City receiving $65.9 million from the federal government in 2021, restricted for the environmental cleanup of the former Schilling Air Force Base. 106 Schedule 4 City of Salina, Kansas Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Revenues Taxes (see Schedule 5) $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41,597 $ 41,958 $ 43,492 $ 44,452 $49,364 Intergovernmental 4,487 4,192 4,008 3,385 4,325 4,536 4,297 4,573 5,317 70,892 Special assessments 2,315 1,706 1,810 1,679 1,669 1,539 1,546 1,596 1,511 1,405 Licenses and permits 8 9 7 10 7 6 3 4 5 10 Charges for services 8,484 8,536 8,276 6,416 6,953 6,880 7,338 6,804 5,557 6,710 Investment revenue 47 40 59 47 142 79 157 670 286 158 Reimbursements 36 9,015 123 491 1,406 Donations 241 83 141 111 238 90 129 90 Miscellaneous 537 ~ 799 ~ 4 315 1,851 884 1 545 5,656 1,898 Total revenues 50,638 59,072 51,846 ~ 57 219 56,599 56,421 58 774 62,913 130,528 Expenditures General government 3,574 4,269 3,986 5,342 5,422 5,423 5,649 4,582 5,506 5,630 Public safety 18,564 19,155 19,559 21,268 21 ,664 21,629 22,953 23,692 22,435 23,215 Public works 7,004 7,220 7,443 5,333 5,778 6,048 6,162 6,136 6,082 6,166 Public health and sanitation 1,343 1,344 319 982 1,078 1,097 1,236 1,121 1,280 2,296 Culture and recreation 4,449 3,939 4,292 5,659 5,817 6,143 6,255 6,047 4,245 5,317 Planning and development 3,256 3,293 3,232 1,910 2,042 1,801 2,185 2,311 1,794 2,078 Miscellaneous 1,354 2 Capital outlay 7,327 13,047 11,009 25,527 24,001 18,281 16,344 21,913 12,041 24,939 Debt service Principal 8,592 5,038 5,261 6,250 17,902 5,088 14,243 10,324 5,164 10,550 Interest 2,103 1,867 1,864 1,833 3,152 1,771 2,192 2,136 2,366 2,411 Deposit to escrow 92 --- Total expenditures 56,304 59,172 56,965 74,104 86,856 67,281 77 219 78,262 62,267 82,604 Other financing sources (uses) Bonds and notes issued 6,150 5,690 5,365 6,825 34,892 11,490 8,090 11,090 8,720 13,813 Bond and note premium 60 185 302 369 1,503 95 70 443 468 592 Transfers in 3,488 4,907 3,001 7,642 7,065 8,339 13,462 9,714 9,323 23,000 Transfers out ~ ~ (2,999) ~ (3,555) (4,160) (4,186) (5,073) (4,271) ~ Total other financing sources (uses) 6,240 ~ 5,669 10,923 39,905 15,764 17,436 16174 14,241 31,006 Net change in fund balance ~ $ 6,775 L....222. $ (12,046) $ 10,268 $ 5,082 $ (3,362) $ (3,314) $ 14,887 $78,930 Debt service as a percentage of non-capital expenditures 17% 28% 18% 18% 20% 50% 16% 37% 28% 29% Source: City of Salina Annual Comprehensive Financial Reports, 2012 -2021 107 Schedule 5 City of Salina, Kansas Tax Revenues by Source, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Real estate $ 10,466 $ 10,145 $ 10,657 $ 10,729 $ 10,972 $ 11,377 $ 10,804 $ 12,182 $ 13,150 $ 13,500 Delinquent 245 248 235 279 246 210 276 190 216 385 Motor vehicle 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 1,520 1,643 General sales 12,165 12,260 12,689 12,931 12,781 12,906 13,293 13,419 13,697 15,315 Selective sales 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 9,751 11,405 Other taxes 6,485 6,630 7,231 7,362 7 991 6,900 7,240 6,975 6,117 7,116 Total taxes $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41,597 $ 41 ,958 $43,492 $ 44,452 $ 49,364 Source: City of Salina Annual Comprehensive Financial Reports, 2012 -2021 108 Schedule 6 City of Salina, Kansas Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Assessed Value Ratio of Fiscal Estimated Total Assessed (Budget) Personal Total, Excluding Motor Vehicle Total, Taxable Market Value Value to Est. Year Real Estate Proeertt State Assessed Motor Vehicles Tax Rate (Note 1) Assessed Value \Note2) Market Value 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 2021 $ 427,732,694 $ 11,229,345 $ 23,975,182 $ 459,861,906 30.452 $ 56,545,812 $ 519,483,033 $ 3,392,138,959 15.31 Note 1: The tax rate for motor vehicles is set based on the average countywide tax rate. The City of Salina then receives a share of that based on tax effort. Note 2: The estimated market value excludes the value of the State assessed properties. Market value information is not available for those properties. However, state assessed property is generally assessed at 33% of market value, except for railroads, which are assessed at 15% of market value. Note 3: The Direct rate is expressed in dollars per thousand dollars of assessed value. Source: Saline County Clerk f'year" Tax Levy Sheet) 109 City of Salina Fiscal Debt Total (Budget) Operating Service City Year Millaoe Millaoe Millaqe 2012 20.326 5.946 26.272 2013 20.242 5.948 26.190 2014 20.539 6.388 26.927 2015 20.692 6.388 27.080 2016 19.950 7.361 27.311 2017 21.694 5.909 27.603 2018 20.339 5.790 26.129 2019 22.285 6.109 28.394 2020 22.908 6.812 29.720 2021 23.847 6.803 30.650 Source: Saline County Treasurer Schedule 7 City of Salina, Kansas Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) Saline County Debt Total Operating Service County Operating Millaoe Millage MillaQe Millage 32.576 32.576 47.127 34.823 34.823 47.133 37.895 37.895 46.599 38.047 38.047 44.088 38.275 38.275 44.465 37.508 37.508 44.069 37.321 37.321 45.130 38.437 38.437 46.776 41.097 41.097 44.761 40.606 40.606 45.130 USO 305 (2) Other /1) Debt Total Service USO MillaQe Millaqe Other Total 11 .693 58.820 11.989 129.657 11.516 58.649 12.135 131 .797 11.517 58.116 12.941 135.879 11 .517 55.605 13.305 134.037 11 .655 56.120 13.293 134.999 11.674 55.743 13.299 134.153 11 .371 56.501 13.189 133.140 10.746 57.522 13.988 138.341 10.747 55.508 13.983 140.308 10.729 55.859 12.623 139.738 (1) The "Other" column includes the State of Kansas, the Salina Airport Authority, the Salina Public Library and Kansas State Extension District #3. (2) A small portion of Salina is covered by USO 306, USO 307, or USO 400. Total Tax Rates are different in the areas covered by these jurisdictions. 110 Tm:paxer Evergy (Westar Energy (Western Resources) SFC Global Supply Chain, Inc. (Schwan's) Kansas Gas Service RAF Salina LLC S&B Motels Central Mall Realty Holding LLC Union Pacific Railroad Co. Menard Inc. Individual Sams Real Estate Business TrustJVValmart Wal-mart Real Estate Business Trust Great Plains Manufacturing Gateway Properties Southwestern Bell Salina Regional Health Center Combined Valuation of the Ten largest Taxpayers City Valuation Percent oflotal City Assessed Valuation Source: Saline County Clerl<'s Office or recent OS Type of Business Utility Pizza Manufacturing Utility Retail Shopping Mall Motel Regional Shopping Center Railroad Home Improvement Residential Discount Retail Stores Discount Retail Stores Manufacturing Shopping Mall (Midstate) Telephone Utility Sd1edule8 City of Salina, Kansas Principal Property Taxpayers Current Year and Ten Yearn Ago 2012 (2011 Assessed Value) Assessed % ofT otal Valuation Valuation Rank $ 7,852,360 1.74% 8,050,871 1.78% 3,352,360 0.74% 6,160,267 1.36% 3,552,360 0.79% 3,458,708 0.77% 2,346,169 0.52% 3,551,440 0.79% 2,464,079 0.55% Hospital and Medical Offices 4,317,497 0.96% $ 45,106,111 $ 451,404,026 9.99% 111 2 $ 8 3 NIA NIA NIA 5 NIA N/A 7 10 6 9 4 $ $ 2021 12020 Assessed Value) Assessed % of Total Valuation Valuation 19,659,775 3.78% 5,927,488 1.14% 5,415,618 1.04% 4,680,507 0.90% 3,010,427 0.58% 2,851,701 0.55% 2,565,902 0.49% 2,427,090 0.47% 2,367,201 0.46% 2,195,047 0.42% 51,100,756 519,483,033 9.84% Rank 1 2 3 4 5 6 7 8 9 10 Fiscal (Budget) Taxes Levied for Year the fiscal year 2012 $ 10,570,420 2013 $ 10,550,730 2014 $ 10,868,225 2015 $ 10,991,959 2016 $ 11,209,245 2017 $ 11,564,876 2018 $ 11,248,278 2019 $ 12,335,808 2020 $ 13,506,590 2021 $ 13,958,495 Schedule 9 City of Salina, Kansas Property Tax Levies and Distributions Last Ten Fiscal Years Current Year Tax Distributions Amount Percentage $ 10,411,299 98.5% $ 10,145,404 96.2% $ 10,776,688 99.2% $ 10,460,246 95.2% $ 10,984,630 98.0% $ 11,320,197 97.9% $ 10,938,457 97.2% $ 12,097,740 98.1% $ 13,203,183 97.8% $ 13,552,390 98.0% Delinquent Collections (1) $ 245,086 $ 354,845 $ 62,432 $ 372,726 $ 184,970 $ 203,904 $ 276,340 $ 189,587 $ 216,358 $ 283,194 Total Tax Distributions Percentage Amount of levy $ 10,656,385 100.8% $10,500,249 99.5% $ 10,839, 120 99.7% $ 10,832,972 98.6% $11,169,600 99.6% $ 11,524,101 99.6% $ 11,214,797 99.7% $12,287,327 99.6% $13,419,541 99.4% $ 13,835,584 99.1% (1) Delinquent collections are reported in the aggregate for all previous years. Data is not currently available for "collected in subsequent years" Source: Saline County Treasurer's Office 112 City Direct Tax Rate General Special purpose County-wide Tax Rate Portion of County-wide tax allocated to City (July Percentage) 2012 0.50% 0.40% 1.00% 61 .72% Schedule 10 City of Salina, Kansas Direct Sales Rate by Taxing Entity Last Ten Fiscal Years Fiscal Year 2013 2014 2015 2016 2017 0.50% 0.50% 0.50% 0.50% 0.50% 0.40% 0.40% 0.40% 0.40% 0.75% 1.00% 1.00% 1.00% 1.00% 1.00% 60.86% 60.23% 60.28% 60.28% 60.28% In addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. 2018 2019 0.50% 0.50% 0.75% 0.75% 1.00% 1.00% 59.85% 60.33% 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 113 2020 2021 0.50% 0.50% 0.75% 0.75% 1.00% 1.00% 60.17% 60.17% ~ulli11 OfyofSMina Kaon5a5 W1V S1!11 by Olu of Custrin'lfJ,r LlstTen F"!kalYear■ 2012 2013 201, 2015 2010 2017 201' 2019 2020 "'21 ·-· Water flAcc:t& w .. ., IIAccts Water #Accla WalM ·-· w ... .,..,,. w-#Act:ts w-,,._ w-#Accta Wal~ . ""'" wn, R■teClass BIiied .,. Blflod ..,, ... , So1d Bltlad Sold -.,., Billed Sold Billed ... ~lt!!d .,. Bllcd .,. . ... "'" RHidenti■I 17,893 1,225,931 17,'186 989,788 18,042 1,003,100 18,086 987,5'!0 18,125 950,897 18,124 988,572 18,130 963,3117 18,155 864,810 18,238 865,782 1',303 1187,792 c«rwnc~i.1 1,555 39,547 1,!579 345,958 1,599 353,675 1,eoo 350,767 1,003 3'5,232 1,606 345,250 1,814 340,960 U07 352,051 1,ei12 319,080 1.626 3'9,956 Industrial 42 11,,595 "' 182,529 42 193,233 44 202,407 ... 191,238 " 193,500 44 211,843 44 196,229 '3 164,766 41 167,991 Govlll"M'!ent .. 5'.e,e .. 46,484 97 45,346 97 '1,928 .. 45.13ei .. 41,552 95 35,932 97 41,911 84 28,200 72 22,810 ..,...,..,. 169 70,263 168 67,155 166 60,665 16' 61,400 103 !!7,039 103 58,378 107 71,559 157 62,127 156 58,651 157 81.o:.11 . .,,,. 81 57,027 84 44,187 84 45,328 as 45,54!5 .. 41,176 83 36,039 81 30,810 79 31,839 78 24,518 78 31,960 lndul1!ilt1pecill 1 40,448 20,-439 C,onsumedlnproduction 12 19.~ 12 18,eie6 12 19,264 12 17,338 9,5&) 8 9,652 ,, ... 8,974 4,109 3,0'12 Rur11!watar 1 25,930 1 21,530 1 22,893 1 21,915 1 23,3114 1 25,624 1 22,340 1 21,663 1 31,776 22,970 ""'"'" 10 17,8915 • 20,482 10 32,18' • 31,658 ' 33,728 9 35,132 • 31,65" • 29,892 ' 29,""3 33,109 Rel'gt)l&lnoriproffl 38 '·"" 37 .C,810 37 4,973 37 4,006 ,. 5,22.C ,. 4,749 36 ..... 35 2,780 35 2,215 ,. 2,287 E,.ih.erin;studies 8 6,104 8 6,822 8 5,090 8 4,8(]7 7 .C,573 ,.112 .,,71 7 3,830 2,563 • 2,213 Pn:Piid~taxableservice ' 6,118 ' 3,'90 1 3,561 1 3,167 3,921 3,347 z331 1 2,876 1,909 1 ,.,.. SQ of componenl p;;,rtl • 5,TZfl 8 s,an • 8,850 • 3,000 3,128 2,917 2,190 ' 1,!W2 1,310 ' 1,'33 Fnh')'d!anl ' 2,533 3 1,922 2 1,47.C 1,727 1,790 ,..,. 3 1,180 2.106 3 2,146 !nlbbtal oon&t.ned kt pmdud:IDn 3 3,543 3 .C,417 3,588 3 2,388 1,930 3 '·""' 3 2,107 3 2,211:1 3 1.-1,500 Sa!Hof Par.neqlipmenl 1 83 1 107 .. 1 53 ' " 1 "" 1 58 1 12◄ 1 100 1 154 19937 1ma,, '3l51§ ,m,,, ~111 1ih'5f'7 ~,SJ 1 ffi 999 2010, 1117766 20192 17533t3 20196 t'34oe& 21)210 11821853 202$1 1638511 20~8 1 es:3079 Wat Rate Schedule: MOl1!Nymetercharge{518; $,ot.74 ..... $5.03 $520 $5.3' $5.5' $5.74 $5.94 $6.15 $5.27 Col"lfflOdity ctarge {perOOO gal.): 0•2000gal. ..... $4.04 $4.24 ..... ..... $4.77 ..... $5.13 $531 $5.42 2001 • 10,~g•l Ciler10,oooga1. ExcegauMcharga $7.76 ... ,., ..... $1HID $11.18 $9,54 $8.02 $10.26 $10.62 $10.84 Wz!Mlaler R.ile Schedule: Monlht{basecharge $8.77 $6.97 $7.11 $7.22 $7.38 $7.51 $7.81 $8.08 ..... $8.!53 lJnitcaet(perOOOgal.): $4.81 $4,79 $4,94 $5.01 $5.19 $5.29 $5.51 ... 70 58.90 $6.02 Wrl.tr aold i. expre-Aed in thousands of g21lons. Numbero1 Accoums billed ii the BIY1LIBI numberofbUllng, for Hcli c:1 .. , dlllidtd by 12. Mortht, rnelar charga Increase& w!h the &IH Qflha meter. Residerfil.l Wasl-ler is calclUted based on Winier OUlrterwalerc:.onsumptlon. other accounfl ■re based on monthly water conlUffl?lion. 21X18W•MrCa~llon Rate structure changed frcm a dec.re"1ng tier structure lo one rate and EJ:ooss Use Charge which is double lhcQ005umption r.ile Solr_.: Cly ofSals\a WaterCusbner Accounting Offlca. Governmental Activities General Obligation Fiscal Year Bands Loans Pa~able Caeital Lease Temeora!:l! Notes 2012 $49,109,575 $ $ $ 1,485,000 2013 $49,631,797 $ $ $ 3,800,000 2014 S 50,033,555 $ $ 176,235 $ 5,000,000 2015 $50,840,632 $ $ 479,366 $ 5,995,000 2016 $51,816,399 $ 12,157,127 $ 321 ,174 $ 11,505,000 2017 $55,994,305 $ 12,171,090 $ 157,868 $ 6,811,742 2018 $51,968,310 $ 12,185,053 $ $ 18,123,505 2019 $54,607,702 $ 12,640,000 $ $ 11,170,000 2020 $56,587,549 $ 12,640,000 $ $ 7,050,000 2021 $ 59,582,649 $ 12,640,000 $ $ 3,647,188 Source: City of Salina Annual Comprehensive Financial Reports, 2012 -2021 Schedule 12 City of Salina, Kansas Ratio of Outstanding Debt by Type Last Ten Fiscal Years Business-Ttpe Activities General Water Obligation Revenue Bonds Bonds Loans Pa~able $ 9,613,926 $ 15,850,228 $ $ 8,519,799 $ 15,226,532 $ $ 9,587,351 $14,592,836 $ 6,208,102 $ 8,539,773 $13,949,139 $ 5,753,620 $ 7,640,381 $13,285,443 $ 7,432,024 s 6,520,433 S 12,606,747 $ 8,862,810 $ 5,282,578 S 11,898,051 $ 10,632,351 s 4,102,298 S 10,330,000 $ 46,354,852 S 8,742,451 $ 9,615,000 $ 35,926,029 S 7,672,351 $ 8,865,000 $ 43,966,366 115 Percentage Temporary Total Primary of Personal Notes Government Income $ $ 76,058,729 3.8% $ $ 77,178,128 3.7% $ $ 85,598,079 4.1% $ $ 85,557,530 4.1% $ $ 104,157,548 5.0% $ $ 103,124,995 4.9% $ $ 110,089,848 4.9% $ $ 139,204,852 6.0% $ $ 130,561,029 5.5% $ $ 136,373,554 5.5% Schedule 13 City of Salina, Kansas Ratio of Net General Bonded Debt Outstanding Last Ten Fiscal Years General Bonded Debt Outstanding General Percentage of Obligation Temporary Less: Debt Net General Actual Taxable Fiscal Year Bonds CaeitalLease Notes Total Service Fund Bonded Debt Value of Per Caeita 2012 $58,723,501 $ $ 1,485,000 $ 60,208,501 $ 582,412 $ 59,626,089 13.1% $1,241.05 2013 $ 59,620,906 $ 176,235 $ 5,000,000 $64,797,141 $ 707,763 $ 64,089,378 13.8% $1,339.49 2014 $ 59,620,906 $ 176,235 $ 5,000,000 $64,797,141 $ 407,864 $ 64,389,277 13.6% $1,345.17 2015 $ 59,380,405 $ 479,366 $ 5,995,000 $ 65,854,771 $ 745,339 $65,109,432 13.5% $1,361 .75 2016 $62,514,738 $ 157,868 $ 6,811 ,742 $ 69,484,348 $ 1,248,914 $ 68,235,434 14.0% $1,441.51 2017 $57,250,888 $ $ 18,123,505 $ 75,374,393 $ 1,509,863 $ 73,864,530 14.5% $1 ,571 .79 2018 $58,710,000 $ $11,170,000 $ 69,880,000 $ 1,851,358 $ 68,028,642 13.3% $1,447.60 2019 $ 65,330,000 $ $ 7,050,000 $ 72,380,000 $ 1,142,418 $71,237,582 13.9% $1,524.91 2020 $ 65,330,000 $ $ 7,050,000 $ 72,380,000 $1,724,117 $ 70,655,883 13.8% $1,517.85 2021 $67,255,000 $ $ 3,647,188 $70,902,188 $ 2,111,664 $68,790,524 13.2% $1,486.59 Source: City of Salina Annual Comprehensive Financial Reports, 2012 -2021 116 Schedule 14 City of Salina, Kansas Direct and Overlapping Governmental Activities Debt As of December 31, 2021 Net General Obligation Percentage Bonded Debt Applicable to Jurisdiction Outstanding City of Salina Direct: City of Salina $ 68,790,524 100.00% Overlapping: Salina Airport Authority 19,615,000 100.00% Saline County 1 75,523,554 73.79% USO 305 99,700,000 93.10% Total Overlapping Debt 194,838,554 Total Direct and Overlapping Debt $ 263,629,078 Per Capita Direct and Overlapping debt Amount Applicable to the City of Salina $ 68,790,524 19,615,000 55,728,830 92,820,700 168,164,530 $ 2361955,054 $ 5,005.81 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. 1 Includes $74,900,000 of bonds issued by Saline County that have a pledge of both property taxes and a dedicated 0.50% retailers' sales tax of the county. However, based on historical collections, the County anticipates that such bonds will be repaid entirely from the sales tax. Source: Saline County Clerk 117 Legal Debt Margin Calculation for 2021 Assessed Valuation Debt Limit (30% of Assessed Value} Debt applicable to limit: Total Bonded Debt Less GO Debt Attributable to Exempt Purposes Less Revenue Bonds Less Loans Payable Less Fund Balance designated for Debt Service Total Debt Applicable to Limitation Legal debt margin Debt Limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit $ 519,483,033 155,844,910 $ 142,079,520 (7,672,351) (8,865,000) (56,606,366} (2,111,664) $ 66,824,139 $ 89,020,771 2012 $ 135,421,208 49,309,445 $ 86,111 ,763 36% 2013 $ 136,196,966 $ 52,724,034 $ 83,472,9'32 $ 39% 2014 Schedule 15 City of Salina, Kansas Legal Debt Margin Last Ten Fiscal Years 2015 136,896,083 $ 138,909,078 56,090,293 74,229,612 80,805,790 $ 64,679,466 41% 53% 118 Fiscal Year 2016 2017 2018 2019 2020 2021 $ 141,804,931 $ 142,000,537 $ 146,336,377 $152,724,804 $ 153,285,495 $155,844,910 62,072,485 61,296,184 68..240,457 66,232,649 65,748,563 66,824,139 $ 79,732,446 $ 80,704,353 $ 78,095,920 $ 86,492,155 $ 87,536,932 $ 89,020,771 44% 43% 47% 47% 43% 43% Schedule 16 City of Salina, Kansas Pledged Revenue Coverage Last Ten Fiscal Years Water/Sewer Revenue Bonds Utility Service Less Operating Net Available Debt Service Fiscal Year Char9es Expenses Revenue Principal Interest 2012 $19,163,426 $ 12,222,431 $ 6,940,995 $ 340,000 $ 596,992 2013 $17,974,089 $ 13,373,088 $ 4,601,001 $ 620,000 $ 590,191 2014 $18,964,164 $ 12,112,288 $ 6,851,876 $ 630,000 $ 577,791 2015 $19,139,612 $ 9,859,974 $ 9,279,638 $ 640,000 $ 565,191 2016 $ 19,389,348 $ 11,800,473 $ 7,588,875 $ 660,000 $ 549,191 2017 $ 19,958,862 $ 13,148,035 $ 6,810,827 $ 675,000 $ 529,391 2018 $ 20,382,469 $ 12,973,621 $ 7,408,848 $ 705,000 $ 509,141 2019 $ 20,842,606 $ 13,269,741 $ 7,572,865 $ 725,000 $ 487,991 2020 $19,448,780 $ 12,460,334 $ 6,988,446 $ 715,000 $ 327,117 2021 $21,240,517 $ 12,077,933 $ 9,162,584 $ 750,000 $ 282,825 Source: City of Salina Annual Comprehensive Financial Reports, 2012 -2021 City of Salina Debt Service Schedules 119 Debt Service Covera9e 7.41 3.80 5.67 7.70 6.28 5.65 6.10 6.24 6.71 8.87 Per Capita Personal Personal Income, Income Salina Fiscal Year Poeulalion (Saline Coun~} (interpolated) 2012 48,045 $ 41,762 $ 2,006,455,290 2013 47,846 $ 43,078 $ 2,061,109,988 2014 47,867 $ 43,736 $ 2,093,511,112 2015 47,813 $ 44,065 $ 2,106,879,845 2016 47,336 $ 44,230 $ 2,093,647,612 2017 46,994 $ 44,732 $ 2,102,135,608 2018 46,994 $ 47,945 $ 2,253,127,330 2019 46,716 $ 49,983 $ 2,335,005,828 2020 46,550 $ 50,820 $ 2,365,671,000 2021 46,274 $ 53,309 $ 2,466,820,666 Schedule 17 City of Salina, Kansas Demographic and Economic Statistics Last Ten Fiscal Years Unemployment Labor Force, USD 305 Rate Ci~of Salina Headcount 6.3% 26,185 7,305 5.1% 26,441 7,305 5.3% 26,303 7,388 3.9% 26,170 7,369 3.3% 27,684 7,386 2.7% 27,684 7,176 3.3% 30,174 7,180 2.9% 30,094 7,245 3.4% 30,094 7,156 2.3% 24,962 7,031 Percentage Free and Reduced Lunch 59.1% 60.7% 61.3% 61.8% 68.7% 62.1% 61.7% 59.2% 59.0% 44.3% Per Capita .5 City .5 cent cent sales sales tax Tax $5,241,205 $ 109.09 $5,326,723 $ 111.33 $5,555,601 $ 116.06 $5,670,040 $ 118.59 $5,727,260 $ 120.99 $5,755,869 $ 122.48 $5,770,174 $ 122.79 $5,968,961 $ 127.77 $5,988,424 $ 128.86 $6,687,099 $ 144.51 Sources: Increase in per capita Sales Tax (1 O years) Population: Kansas Division of the Budget. (Population Data) Increase in per capita Personal Income Employment: Kansas Department of Labor 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 2011 -2021 Employment City of Salina USD305 headcount and free and reduced lunch data derived from Kansas Department of Education./USD 305 Budget Document Asa% of per capita personal income 0.261% 0.258% 0.265% 0.269% 0.274% 0.274% 0.256% 0.256% 0.254% 0.271% 18.1% 21.7% 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 2020- 2021 school year is reported as 2020. 120 Employer Salina Regional Health Center Unified School District No 305 Schwan's Global Supply Chain Great Plains Manufacturing Exide T echnologies/Stryten Manufacturing City of Salina Salina Vortex Saline County Walmart REV Group Signify Dillon Stores Solomon Corp. Total Source: Salina Chamber of Commerce Schedule 18 City of Salina, Kansas Principal Employers Current Year and Nine Years Ago Type of Business Health Care Public Schoal System Frozen Pizza Manufacturing Agricultrual & Landscaping Equipment Automotive Battery Manufacturer City Government Manufacturing County Government Retail Manufacturing Fluorescent Lamps Retail Electrical Equipment Employees 121 1300 1659 1800 750 465 277 421 490 343 324 7 829 2012 Rank 2021 Percentage of Percentage of Labor Force Emelotees Rank Labor Force 3 5.0% 1,875 6.2% 2 6.3% 1,500 2 5.0% 1 6.9% 1,200 3 4.0% 1,200 4 4.0% 4 2.9% 700 5 2.3% 6 1.8% 425 6 1.4% 385 7 1.3% 10 1.1% 325 8 1.1% 7 1.6% 250 9 0.8% 175 10 0.6% 5 1.9% 8 1.3% 9 1.2% 29.9% 8,035 32.2% GOVERNMENTAL AUDIT SECTION CITY OF SALINA, KANSAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2021 Federal Grantor/Pass-Through Grantor/Program Title U.S. Department of Housing and Urban Development Federal CFDA Number Passed Through the Kansas Housing Resources Corporation: Emergency Solutions Grant Total U.S. Department of Housing and Urban Development U.S. Department of Justice Crime Victims Assistance Total U.S. Department of Justice U.S. Department of the Treasury Passed Through Saline County: Coronavirus Relief Fund Total U.S. Department of the Treasury U.S. Department of Transportation Passed Through Kansas Department of Transportation: Highway Safety Cluster: State and Community Highway Safety National Priority Safety Programs Total Highway Safety Cluster Total U.S. Department of Transportation Total Expenditures of Federal Awards See independent auditor's report on the financial statements. 122 14.231 16.575 21.019 20.600 20.616 Expenditures $ 1i4a1,012 1,487,072 300 300 35,000 35,000 7,651 5,685 13,336 13,336 $ 1,535,708 1. Organization CITY OF SALINA, KANSAS Notes to the Schedule of Expenditures of Federal Awards For the Year Ended December 31, 2021 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 in accordance with generally accepted accounting principles. 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. 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 as of December 31, 2021. 5. Outstanding Loans The City did not have any outstanding loans under any federal grants as of December 31 , 2021 . 6. Pass Through Numbers Pass through numbers have not been assigned to pass through grants on the Schedule of Expenditures of Federal Awards. 123 CITY OF SALINA, KANSAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2021 Section I -Summary of Auditor's Results Financial Statements Type of auditor's report issued: Internal control over financial reporting: Unmodified Yes X Material weakness(es) identified? --------No Significant deficiency(ies) identified that are not considered to be material weaknesses? ----Yes __ X __ Nonereported Noncompliance material to financial statements noted? Federal Awards Internal control over major programs: Yes ----X No ---- Material weakness(es) identified? Yes ----__ x __ No Significant deficiency(ies) identified that are not considered to be material weaknesses? ----Yes __ X __ Nonereported Type of auditor's report issued on compliance for major programs: Any audit findings disclosed that are required to be reported in accordance with section 51 0(a) of Uniform Guidance? Identification of major programs: Unmodified ____ Yes No ----X CFDA Number(s) Name of Federal Program or Cluster 14.231 Dollar threshold used to distinguish between type A and type B programs: Auditee qualified as low-risk auditee? Emergency Solutions Grant $750,000 ____ Yes ----X See independent auditor's report on the financial statements. 124 No CITY OF SALINA, KANSAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) For the Year Ended December 31, 2021 Section II -Financial Statement Findings Prior Year Findings None Noted. Current Year Findings None Noted. Section Ill -Federal Award Findings and Questioned Costs Prior Year Findings None Noted. Current Year Findings None Noted. See independent auditor's report on the financial statements. 125 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX D December 31, 2022 Unaudited Financial Report The following report shows unaudited revenues, expenditures and fund balances for the fiscal year ending December 31, 2022 for the City's major operating funds. This information is being presented on a cash basis and will be adjusted to comply with generally accepted accounting principles for presentation in the City's 2022 Annual Comprehensive Financial Report ("2022 ACFR"}. City staff anticipates that 2022 ACFR will indicate an increase in the aggregate fund balance of it major operating funds. It is currently anticipated that the 2022 ACFR will be available in late September of 2023. [THIS PAGE INTENTIONALLY LEFr BLANK] Unencumbered Unencumbered Fund Beginning Outstanding Cash Balance Fund Name Number Balance DEBITS CREDITS NET CHANGE END BALANCE Encumbrances 12/31/22 General 100 19,243,933.00 50,460,968.05 44,569,194.88 5,891,773.17 25,135,706.17 357,737.77 24,777,968.40 Sales Tax Capital 210 9,589,335.00 10,549,705.51 11,801,337.25 -1,251,631. 74 8,337,703.26 437,425.77 7,900,277.49 Gas Tax 270 2,585,219.07 1,709,106.41 1,392,937.99 316,168.42 2,901,387.49 819,146.44 2,082,241.05 Sanitation 300 1,271,616.58 3,484,399.16 3,131,058.27 353,340.89 1,624,957.47 108,437.86 1,516,519.61 Solid Waste 320 6,703,037.02 4,038,016.55 3,434,208.94 603,807.61 7,306,844.63 337,689.97 6,969,154.66 Golf 340 94,047.40 950,613.46 974,350.43 -23,736.97 70,310.43 0 70,310.43 Water/Wastewater 370 22,526,575.73 22,260,079.11 19,146,039.10 3,114,040.01 25,640,615.74 1,328,716.26 24,311,899.48 Debt Service 500 1,530,231.57 10,305,926.01 10,354,614.21 -48,688.20 1,481,543.37 0 1,481,543.37 Water/Wastewater Debt Service 510 655,428.71 0 0 0 655,428.71 0 655,428.71 Water/Wastewater Capital Reserve 735 10,775,674.94 250,000.00 216,513.41 33,486.59 10,809,161.53 260,013.73 10,549,147.80 Solid Waste Capital Reserve 750 138,213.08 0 0 1,381,213.08 0 0 Total 75,113,312.10 104,008,814.26 95,020,254.48 10,369,772.86 83,963,658.80 3,649,167.80 80,314,491.00 D-1 [THIS PAGE INTENTIONALLY LEFf BLANK] CERTIFICATE DEEMING PRELIMINARY OFFICIAL STATEMENT FINAL Re: $3,005,000* City of Salina, Kansas, General Obligation Internal Improvement Bonds, Series 2023-A The undersigned is the duly acting Director of Finance of the City of Salina, Kansas (the "Issuer"), and are authorized to deliver this Certificate to the purchaser (the "Purchaser") of the above- referenced bonds (the "Bonds") on behalf of the Issuer. The Issuer has previously caused to be delivered to the Purchaser copies of the Preliminary Official Statement (the "Preliminary Official Statement") relating to the Bonds. For the purpose of enabling the Purchaser to comply with the requirements of Rule 15c2-12(b)(l) of the Securities and Exchange Commission (the "Rule"), the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be final as of its date, except for the omission of such information as is permitted by the Rule, such as offering prices, interest rates, selling compensation, aggregate principal amount, principal per maturity, delivery dates, ratings, identity of the underwriters and other terms of the Bonds depending on such matters. To the knowledge of the Issuer, the information contained in the Preliminary Official Statement, other than the sections entitled "The Depository Trust Company," "Ratings," "Legal Matters," "Tax Matters," and Appendices B and C, for which the Issuer expresses no opinion, and except for the omission of certain information such as offering prices, interest rates, selling compensation, aggregate principal amount, principal per maturity, delivery dates, ratings, identity of the underwriters and other terms of the Bonds depending on such matters, is true in all material respects, does not contain any untrue statement of a material fact and does not omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. CITY OF SALINA, KANSAS By:~~~~ Title Director of Finance 600596.20228\SALEDOCS SUMMARY NOTICE OF BOND SALE $3,165,000** CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2023-A (GENERAL OBLIGATION BONDS PAYABLE FROM UNLIMITED AD VALOREM TAXES) Bids. SUBJECT to the Notice of Bond Sale dated June 26, 2023 (the "Notice"), electronic bids submitted through PARITY®, or emailed to the Municipal Advisor at the address below, will be received on behalf of the City of Salina, Kansas (the "Issuer") at 11 :00 A.M. applicable Central Time, on JULY 24, 2023 for the purchase of the above-referenced bonds (the "Bonds"). The minimum bid price for the Bonds shall be as specified in the Notice. Bond Details. The Bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof. The Bonds will be dated August 17, 2022, and will become due on October 1 in the years as follows: Year Principal Year Principal Amount* Amount• 2024 $220,000 2034 $35,000 2025 245,000 2035 35,000 2026 255,000 2036 35,000 2027 265,000 2037 35,000 2028 275,000 2038 40,000 2029 285,000 2039 40,000 2030 295,000 2040 40,000 2031 300,000 2041 45,000 2032 310,000 2042 45,000 2033 320,000 2043 45,000 * Subject to change, see the Notice The Bonds will bear interest from the date thereof at rates to be determined when the Bonds are sold as hereinafter provided, which interest will be payable semiannually on April 1 and October 1 in each year, beginning on April 1, 2024. Book-Entry-Only System. The Bonds shall be registered under a book-entry-only system administered through OTC. Paying Agent and Bond Registrar. Treasurer of the State of Kansas, Topeka, Kansas. Good Faith Deposit. Each bid shall be accompanied (in the manner set forth in the Notice) by a good faith deposit in the form of a cashier's or certified check drawn on a bank located in the United States of America or a wire transfer in Federal Reserve funds immediately available for use by the Issuer in the amount equal to 2% of the principal amount of the Bonds. Delivery. The Issuer will pay for preparation of the Bonds and will deliver the same properly prepared, executed and registered without cost to the successful bidder on or about August 17, 2023, to OTC for the account of the successful bidder. Assessed Valuation and Indebtedness. The Equalized Assessed Tangible Valuation for Computation of Bonded Debt Limitations for the year 2022 is $558,783,273. The total general obligation indebtedness of the Issuer as of the Dated Date, including the Bonds being sold, is $72,310,000. Approval of Bonds. The Bonds will be sold subject to the legal opinion of GILMORE & BELL, P.C., WICHITA, KANSAS, Bond Counsel to the Issuer, whose approving legal opinion as to the validity of the Bonds will be furnished and paid for by the Issuer, printed on the Bonds and delivered to the successful bidder as and when the Bonds are delivered. Additional Information. Additional information regarding the Bonds may be obtained from the undersigned Stifel Nicolaus & Company, Incorporated at the addresses set forth below: DATED: June 26, 2023. Issuer -Good Faith Deposit Delivery Address: Debbie Pack, Director of Finance and Administration City of Salina, Kansas 300 West Ash Street, Room 206 Salina, Kansas 67 402 Phone No.: (785) 309-5735 Fax No.: (785) 309-5711 Email: debbie.pack@salina.org Municipal Advisor -Email Bid Delivery Address: Stifel Nicolaus & Company, Incorporated 4801 Main Street, Suite 530 Kansas City, Missouri 64112 Attn: David Arteberry Phone No.: (816) 203-8773 Fax No.: (816) 283-5326 Email: arteberryd@stifeLcom SK-36496407 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 $2,955,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A Dated: Date of Delivery (the "Dated Date") Due: As Shown Herein The General Obligation Internal Improvement Bonds, Series 2023-A Bonds (the "Bonds") will be issued by the City of Salina, Kansas (the "Issuer" or "City"), 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, 2024 (the "Bond Interest Payment Date"). The Treasurer of the State of Kansas will be designated as paying agent and registrar or the Bonds (the "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., Wichita, Kansas, 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 August 17, 2023. This Official Statement is dated July 24, 2023. 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 $2,955,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A Serial Bonds Base cus1P'1> Maturit~ Amount Rate Yield 794744 10-01-24 $185,000 5.000% 3.200% GC0 10-01-25 215,000 5.000 3.100 GD8 10-01-26 230,000 5.000 3.000 GE6 10-01-27 240,000 5.000 2.950 GF3 10-01-28 250,000 5.000 2.900 GGl 10-01-29 260,000 5.000 2.890 GH9 10-01-30 275,000 5.000 2.840 GJ5 10-01-31 290,000 5.000 2.800 GK2 10-01-3212) 305,000 4.000 2.800 GL0 10-01-33121 315,000 4.000 2.850 GM8 Term Bonds Base cus1p111 Maturit~ Amount Rate Yield 794744 10-01-3812) $175,000 4.000% 3.600% GSS 10-01-43(2) 215,000 4.000 4.000 GX4 Ill CUSIP is a registered trademark of the American Bankers Association. CUSIP Global Services ("CGS") is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright© 2023 CUSIP Global Services. CUSIP data herein is provided by CGS. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP numbers are provided for convenience of reference only. None of the Issuer, the Underwriter, or their agents or counsel assume responsibility for the accuracy of such numbers. 12> At the option of the City, Bonds maturing on October 1, 2032 and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2031, 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 SHOUW 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-LOOK/NG STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED IN SUCH FORWARD- LOOKING STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD- LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. CITY OF SALINA, KANSAS City/County Building -Room 206 300WestAsh P.O. Box 736 Salina, Kansas 67402-0736 (785) 309-5700 CITY COMMISSION Mike Hoppock, Mayor Trent Davis, M.D., Vice Mayor Greg Lenkiewicz, Commissioner Bill Longbine, 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. Wichita, Kansas 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......................................................................................................................................... 1 THE DEPOSITORY TRUST COMPANY................................................................................................... 7 THE FINANCING PLAN......................................................................................................................... 9 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................................................................................................................. 15 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: ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR FISCAL YEAR ENDING DECEMBER 31, 2021 APPENDIX D: UNAUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2022 General OFFICIAL STATEMENT CITY OF SALINA, KANSAS $2,955,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A INTRODUCTORY STATEMENT The purpose of this Official Statement is to present certain information concerning the City of Salina, Kansas (the "Issuer" or "City"), and the offering of its $2,955,000 General Obligation Internal Improvement Bonds, Series 2023-A (the "Bonds"). The Bonds are being issued to provide funds to permanently finance certain public improvements with 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., Wichita, Kansas, 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 Bond Resolution (as defined in the section entitled "THE BONDS-Authority"), 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 816-203-8733. 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 K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., 12-6a01 et seq and K.S.A. 13- 1024a, as amended by Charter Ordinance No. 41 of the City,, all as amended and supplemented from time to time, an Ordinance passed by the governing body of the City and a resolution adopted by the governing body of the City (collectively, the "Bond Resolution"). 1 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 2032, and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2031, 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. Mandatory Redemption. (a) 2038 Term Bonds. The 2038 Term Bonds shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements hereinafter set forth at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. The payments which are to be deposited into the Debt Service Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year, the following principal amounts of such 2038 Term Bonds: 2 Principal Amount Year $30,000 2034 35,000 2035 35,000 2036 35,000 2037 40,000 2038* Mandatory Redemption. (a) 2043 Term Bonds. The 2043 Term Bonds shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements hereinafter set forth at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. The payments which are to be deposited into the Debt Service Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year, the following principal amounts of such 2043 Term Bonds: Principal Amount Year $40,000 2039 40,000 2040 45,000 2041 45,000 2042 45,000 2043* 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 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 Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. 3 Prior to any Redemption Date, the City 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. 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 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 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 "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 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. 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 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 4 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 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 Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. "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 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 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 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 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. 5 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 ls 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. 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)(l) or (a)(2) of this paragraph, the City, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. 6 In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of the Bonds to the successor Securities Depository in appropriate denominations and form as provided in the Bond Resolution. THE DEPOSITORY TRUST COMPANY 1. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the 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 OTC 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 7 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. 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. 8 THE FINANCING PLAN Proceeds from the sale of the Bonds will be used to provide long term financing for a portion of the costs of certain public improvements within the City (collectively, the "Bond Projects") and to pay the costs associated with the issuance of the Bonds. The Bond Projects are as follows: Project Description Facility Improvements -Bill Bill Burke Park Cedar Ridge Phase 2 Ordinance/ Resolution Ord. 22-8035 Res. 22-8035 Res. 21-7983 Authority K.S.A. 13-1024a/Ch. Ord. No. 4lseq. K.S.A. 12-6a01 et seq. Total: SOURCES AND USES OF FUNDS Principal Amount $2,315,000 640,000 $2,955,000 Funds to be used in the Financing Plan will be provided and applied approximately as follows, exclusive of accrued interest. Sources of Funds: Principal Amount Net Original Issue Premium Total Sources of Funds Uses of Funds: Deposit to Improvement Fund Costs of Issuance Underwriter's Discount Total Application $2,955,000.00 241,391.10 $3,196,391.10 $3,108,082.19 56,197.25 32,111.66 $3,196,391.10 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 UNDERWRITER. 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. 9 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 "FINANCIAL INFORMATION CONCERNING THE CITY -Pension and Employee Retirement Plans," the Issuer participates in the Kansas Public Employees Retirement System ("KPERS"), as an instrumentality of the State to provide retirement and related benefits to public employees in Kansas. KPERS administers three statewide defined benefit retirement plans for public employees which are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Issuer participates in the 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 Reports, the Local Group had an UAAL of approximately $1.783 billion in calendar year 2021. Taxation of Interest on the Bonds An opinion 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. 10 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. Market for the Bonds Ratings. The Bonds have been assigned the financial ratings set forth in the section hereof titled "RATING". 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. 11 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. Cybersecuritv Risks Security breaches, including electronic break-ins, computer viruses, attacks by hackers and similar breaches could create disruptions or shutdowns of the Issuer and the services it provides, or the unauthorized disclosure of confidential personal, health-related, credit and other information. If a security breach occurs, the Issuer may incur significant costs to re mediate possible injury to the affected persons, and the Issuer may be subject to sanctions and civil penalties. Any failure to maintain proper functionality and security of information systems could interrupt the Issuer's operations, delay receipt of revenues, damage its reputation, subject it to liability claims or regulatory penalties and could have a material adverse effect on its operations, financial condition and results of operations. Natural Disasters or Terrorist Attacks The occurrence of a terrorist attack in the Issuer, or natural disasters, such as fires, tornados, earthquakes, floods or droughts, could damage the Issuer and its systems and infrastructure, and interrupt services or otherwise impair operations of the Issuer. Infectious Diseases State and local governmental authorities continue efforts to contain and limit the spread of COVID-19. Future revenue collections, including property tax collections that are essential to repayment of the Bonds, may deviate from historical or anticipated levels due to COVID-19 or other infectious diseases. 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., Wichita, Kansas, 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". 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, 12 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 Bonds 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. 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. 13 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 Robert W. Baird & Company, Milwaukee, Wisconsin (the "Underwriter") at a price equal to the par amount of the Bonds, plus a premium of $241,391.10, less an underwriting discount of $32,111.66. ABSENCE OF MATERIAL LITIGATION The City, in the ordinary course of business, is a party to various legal proceedings. In the opinion of management of the City, any judgment rendered against the City in such proceedings would not materially adversely affect the financial position of the City. 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 Oty, 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. 14 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, 2023. In the 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 15 APPENDIX A FINANCIAL OVERVIEW OF THE CITY 2022 Estimated Actual Valuation (1) 2022 Assessed Valuation Outstanding General Obligation Bonds (2) Population (2022 U.S. Census Bureau Estimate) General Obligation Debt Per Capita Ratio of General Obligation Bonded Debt to Estimated Actual Valuation Ratio of General Obligation Bonded Debt to Estimated Assessed Valuation Outstanding Temporary Notes Outstanding State Loans (3) Outstanding Lease Purchase Obligations Outstanding Utility System Revenue Bonds Outstanding Special Obligation Revenue Bonds Overlapping General Obligation Debt (4) Direct and Overlapping General Obligation Debt (5) Direct and Overlapping General Obligation Debt Per Capita Ratio of Direct and Overlapping Debt to Estimated Actual Valuation Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation $ 3,705,559,200 $ 558,783,273 $ 72,100,000 $ $ $ $ $ $ $ $ $ 46,868 1,538 1.95% 12.90% 0 83,474,170 417,770 8,090,000 20,475,000 176,303,043 331,877,213 7,078 8.96% 59.39% (1) For a further description of how Estimated Actual Valuation is calculated and additional historical figures see the section titled "FINANCIAL INFORMATION CONCERNING THE CITY -Estimated Actual Valuation". (2) Includes the Bonds. (3) 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) Includes $72,250,000 of general obligation sales tax bonds issued by Saline County. Although such bonds are ultimately general obligations of the County, their repayment Is being provided for by a dedicated countywlde local options sales tax. The sales tax has generated sufficient revenue each year since its inception to provide for all debt service requirements on the bonds. For a more detailed explanation of the overlapping debt of the other jurisdictions, see "DEBT SUMMARY OF THE CITY -Overlapping Debt." (5) Includes outstanding general obligation bonds, temporary notes and state loans of the City and general obligation bonds of overlapping jurisdictions. A-1 GENERAL INFORMATION CONCERNING THE CITY Location and Size The City of Salina is located in north central Kansas, near the geographic center of the contiguous United States. It is the seventh largest city in Kansas, with a 2022 U.S. Census Bureau estimate of 46,868. The City is the county seat for Saline County, which had an estimated 2022 U.S. Census Bureau population of 53,596. Situated at the intersection of Interstate Highways 70 and 135, the City of Salina serves as the industrial, medical, retail, trade and service hub for north central Kansas. Kansas City, Kansas, and Wichita, Kansas, are 175 and 95 miles away, respectively, via the direct access of these two major highways. The City encompasses a total area of approximately 23 square miles. Government The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas. The City has had a Commission-City Manager form of government since 1921. The Commission comprises five members elected at-large. Each year the Commission chooses one member to act as Mayor. The City Manager is appointed by the Governing Body and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The Governing Body is responsible for the policy determination, and the City Manager is responsible for the administration of the municipal government. Salina became a City of the first class on July 9, 1920. There are no organized city employee unions. The present elected officials of the City, along with the expiration of their current terms of office, are as follows: Population Name Michael L. Hoppock Bill Longbine Greg Lenkiewicz Trent W. Davis, M.D. Karl F. Ryan Title Mayor Vice Mayor Commissioner Commissioner Commissioner Term Expires 2024 2026 2026 2024 2024 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. According to the U. S. Census Bureau, the City's citizens had a median age of 39 years in 2021. The following table and graph show the population for the City for selected years as provided by the U.S. Census Bureau. Year 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 A-2 U.S. Census Bureau Population 46,868 46,481 46,803 46,550 46,716 46,994 47,336 47,813 47,867 47,846 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 429 full-time employees by the City. Firefighting services are provided from four stations located throughout the City with 87 full-time firefighters. The fire department operates 50 vehicles and provides emergency medical services. The Department was recently upgraded to an Insurance Services Office rating of 2. The police department employs 123 personnel, of which 69 are sworn positions. The Department operates 52 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 approximately 6,900. 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 -Salina 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 800 students are currently enrolled in the school. Kansas Wesleyan University was founded in 1886 and is located within the City. Currently, Kansas Wesleyan maintains an enrollment of approximately 870 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 approximately 30 students and the School of Nursing has approximately 50 students. The Kansas Center for Rural Health, started in 2022, is also located on the campus. The Kansas Center for Rural Health is focused on improving health disparities and outcomes in rural Kansas through research, education and service. Transportation In addition to 1-70 and 1-135, US-81 and US-40 also intersect Salina. Several freight companies provide motor freight service in Salina with direct and connecting schedules to all cities in the United States. Bus service is available at regular intervals during each day in all directions. Union Pacific gives the City rail service in four directions out of the City and provides daily package-car service in and out of Salina. There are approximately 8 daily freights stopping in the City. Existing terminals have adequate capacity to handle present and greatly increased future capacity. Approximately 30 miles of storage tracks are available. The City is served by the Salina Regional Airport and scheduled air service is provided by United Airlines. The airline offers daily scheduled passenger air service to Denver International Airport and Chicago O'Hare International Airport. A-3 Utilities and Infrastructure Evergy, Inc. supplies electricity and Kansas Gas Service provides natural gas to the City. The City owns its own water and sewage system. Additionally, the City is responsible for street maintenance and police and fire protection for the Airport. SBC provides telephone service. Three cellular phone companies provide service to the City. Health Facilities The City is served by Salina Regional Health Center ("SRHC"), a 394-bed (207 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 $1.271 billion as of Spring, 2022. A savings bank has a branch office in the City. There are several credit unions available in the city. Source: Kansas Bank Directory Pension and Employee Retirement Plans The Issuer participates in the Kansas Public Employees Retirement System ("KPERS") established in 1962, as an instrumentality of the State, pursuant to K.S.A. 74-4901 et seq., to provide retirement and related benefits to public employees in Kansas. KPERS is governed by a board of trustees consisting of nine members each of whom serve four-year terms. The board of trustees appoints an executive director to serve as the managing officer of KPERS and manage a staff to carry out daily operations of the system. As of June 30, 2022, KPERS serves approximately 333,000 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 wh ich comes from the State General Fund. (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 A-4 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). In 2021, the Legislature authorized the issuance of revenue bonds to provide net proceeds of up to $500 million (the "Revenue Bonds") the proceeds of which must be applied to the unfunded actuarial pension liability as directed by KPERS. The Revenue Bonds in the principal amount of $504,535,000 were issued August 26, 2021. The repayment of the Revenue Bonds shall be subject to legislative annual appropriation, shall not be an obligation of the KPERS system, and the full faith and credit or taxing power of the State shall not be pledged to the repayment of the Revenue Bonds. Due to the authorization of the Revenue Bonds, the Legislature changed the State/School employer contribution rate from 14.09% to 13.33% for fiscal year 2022 and from 13.86% to 13.11% for fiscal year 2023. In 2022, the Legislature authorized additional contributions totaling $1.125 billion in four payments to be deposited into the KPERS trust fund for the School Group. Typically when such additional contributions are made by the State, the statutory employer contribution rates for the following two fiscal years are recertified by the Legislation; however the recertification has not yet occurred. For more information about the Legislature's actions related to KPERS, please see the 2021 Valuation Report referenced below. 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 8.43% of the employee's gross salary for calendar year 2023, and is projected to change to 9.26% of the employee's gross salary for calendar year 2024. In addition, the Issuer contributes 1% of the employee's gross salary for Death and Disability Insurance for covered employees. According to the Valuation Report as of December 31, 2021 (the "2021 Valuation Report") the KPERS Local Group, of which the Issuer is a member, carried an unfunded accrued actuarial liability ("UML") of approximately $1.783 billion at the end of 2021. The amount of the UML in 2021 changed from the previous year's amount due to the factors discussed in the 2021 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 2021 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 2021 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 2021 Valuation Report sets the employer contribution rate for the period beginning January 1, 2024, for the KPERS Local Group, and KPERS' actuaries identified that an employer contribution rate of 9.26% of covered payroll would be necessary, in addition to statutory contributions by covered employees, to eliminate the UML by the end of the actuarial period set forth in the 2021 Valuation Report. The statutory contribution rate of employers currently equals the 2021 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 2021 Valuation Report, KP&F carried an UML of approximately $1.140 billion at the end of 2021. 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, 2023, the Issuer contributes 22.86% of employees' gross salary, and is projected to change to 23.10% of the employee's gross salary for calendar year 2024. A-5 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. 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., Vortex Global, GeoProbe Systems, Bergkamp Inc., Kasa Controls and Automation, Coperion K-Tron, Great Plains Manufacturing/Kubota, PKM Steel Service, Crestwood Cabinets, McShares, Inc., Pepsi Bottling, Rev Group, Stryten Energy, Advance Auto Parts Distribution Center, and Superior Contracting. 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's "trade pull factor" is generally within the top 10 of larger cities in Kansas 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, 2020 prepared by the Docking Institute of Public Affairs at Fort Hays State University and published in April 2021, businesses and organizations at the Salina Regional Airport and Airport Industrial Center employed 7,005 employees with a total level economic activity for 2020 of approximately $1,297,934,889. The report also cited that the Airport/Airport Industrial Center accounted for 13.0% of the employment in Saline County and 35% 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 2022 to be 25,651 persons. The estimated median household income for the City in 2022 was $52,702, and owner-occupied housing rates in the City were 63.3%. A-6 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. In recent years, Dillon Companies, Inc., a subsidiary of Kroger Company, recently opened a 77,000 square foot grocery store. Dick's Sporting Goods and Marshalls clothing store opened in a building formerly occupied by Sutherland Lumber Company. In addition, several new restaurants have opened or expanded, including Olive Garden, Longhorn Steakhouse, Scooter's Coffee, Starbucks, Taco Bell, Daimaru Steakhouse and YaYa's Euro Bistro. These openings and expansions are in addition to other economic development activity at the Airport Industrial Center. 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. In 2012, the Salina Municipal Airport was renamed the Salina Regional Airport. Adding to the increased enplanement count is the Airport's status as an Airport of Embarkation/Debarkation by the Fort Riley, Kansas Army Installation located just 60 miles to the east of Salina on 1- 70. The Airport also accommodates a wide variety of aircraft including business jets, military, flight training and general aviation aircraft. During 2022, the Salina Air Traffic Control Tower logged over 68,000 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 2.371 million gallons of fuel to the wide variety of aircraft utilizing the Airport during 2022 and 282,730 as of February 2023. The Salina Regional Airport is served by SkyWest Airlines d/b/a United Express with daily flights to United Airlines Denver and Chicago hubs. SkyWest Airlines receives a USDOT Essential Air Service Program subsidy for daily flights at Salina. The current annual subsidy is $3,310,166 per year. During CY 2022 the Salina Airport recorded 37,835 total passengers. The Airport and Airport Industrial Center is home for over 123 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-7 Major Employers Industrial development during the past ten years has established a broad, industrial base in and around the City. A list of the major employers is as follows. All figures represent total full-time employment excluding seasonal and part-time employees. Name Salina Regional Health Center Unified School District No. 305 Schwa n's Global Supply Chain, Inc. Great Plains Manufacturing Stryten Manufacturing City of Salina Salina Vortex Saline County Walmart Source: Salina Chamber of Commerce Income Product/Business Healthcare School System Manufacturing Agricultural & Landscaping Equipment Battery Manufacturer City Government Manufacturing Local Government Discount Retail Estimated Employment 1,875 1,500 1,200 1,200 700 425 385 325 250 The following table shows the per capita personal income for residents of Saline County and the State during the years indicated: Year 2021 2020 2019 2018 2017 Source: Kansas Statistical Abstract Labor Force Saline County N/A $53,320 50,099 49,201 47,632 State of Kansas $59,324 56,099 53,203 51,139 49,033 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 2023 (Apr) 25,368 24,727 641 2.5% 2022 25,651 25,011 640 2.5 2021 25,029 24,236 793 3.2 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 2015 26,308 25,286 1,022 3.9 2014 26,126 24,993 1,133 4.3 A-8 State of Kansas: Total Unemployment Year Labor Force Em[!IOited Unem[!loited Rate 2023 (Apr) 1,517,433 1,475,138 42,295 2.8% 2022 1,504,932 1,464,834 40,098 2.7 2021 1,500,677 1,451,204 49,473 3.3 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 2015 1,493,782 1,431,533 62,249 4.2 2014 1,494,203 1,426,892 67,311 4.5 Source: Kansas Department of Labor DEBT SUMMARY OF THE CITY Current Indebtedness The following is an overview of the City's outstanding indebtedness by classification as of the dated date of the Bonds. Figures do not include bonds for which payment has been provided through the creation of designated escrow accounts. General Obligation Bonds: Date Issued 02-15-13 07-29-15 07-27-16 07-27-16 07-27-17 11-27-18 04-24-19 04-29-20 11-30-20 04-29-21 09-08-21 04-28-22 08-17-23 Total Series 2013-A 2015-A 2016-A 2016-B 2017-A 2018-A 2019-A 2020-A 2020-B 2021-A 2021-B 2022-A 2023-A Pur[!ose Taxable Improvements Revenue and Internal Imp. Internal Improvements Refunding Improvements Improvements Improvements Improvements Refunding Improvements Refunding Improvements Internal Improvements Amount of Issue $1,360,000 6,825,000 6,570,000 13,750,000 9,310,000 2,090,000 11,090,000 5,210,000 8,450,000 7,645,000 6,220,000 7,840,000 2,955,000 Final Maturlt\t 10-01-28 10-01-35 10-01-36 10-01-31 10-01-37 10-01-33 10-01-39 10-01-35 10-01-36 10-01-41 10-01-34 10-01-42 10-01-43 Amount Outstanding $630,000 4,420,000 4,925,000 8,205,000 7,520,000 1,630,000 10,015,000 4,135,000 6,785,000 7,420,000 5,620,000 7,840,000 2,955,000 $72,100,000 A portion of the City's outstanding general obligation bonds are payable from special assessments levied upon properties benefited by certain internal improvement projects, local option sales tax, and transfers from enterprise funds of the City. If such payments are not provided in a timely manner, the principal of and interest on the bonds must then be paid from the City's ability to levy unlimited ad valorem taxes. See "FINANCIAL INFORMATION -Special Assessments" for a further description of special assessment financing. Temporary Notes: None A-9 Utility System Revenue Bonds: Revenue bonds are payable solely from the net revenues derived by the City from the operation of its combined water and sewage system. Revenue bonds do not represent a general obligation indebtedness of the City for which the City's taxing ability has been pledged. Date Pledged Amount Final Amount Issued Revenue Series of Issue Maturitll Outstanding 09-11-19 Water and Sewer System 2019 $10,330,000 10-01-31 $8,090,000 Lease Obligations: Year Original Final Amount Item Issued Amount Year Outstanding HVACSystem 2012 $1,100,000 2027 $417,770 Special Obligation Revenue Bonds: The following special obligation revenue bonds are payable solely from sales tax collected within certain special districts in the City. Revenue bonds do not represent a general obligation indebtedness of the City for which the City's taxing ability has been pledged. Date Pledged Amount Final Amount Issued Revenue Serles of Issue Maturi!}'. Outstanding 12-21-18 Sales Tax Revenue 2018-A $18,250,000 12-01-38 $16,155,000 12-21-18 Sales Tax Revenue 2018-B 4,320,000 12-01-38 4,320,000 Total: $20,475,000 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 Year Final Original Amount_ Number PUr!;!OSe Originated Pal£ment Date Amount Outstanding KDHE 2629 Water 2014 08-01-34 $8,562,911 $5,091,497 KDHE 2917 Water 2019 02-01-40 32,000,000 28,092,163 KDHE 2957 Water 2019 02-01-40 4,250,000 3,730,990 KDHE 2998 Water 2019 02-01-40 4,250,000 3,971,550 KDHE 2050 Sewer 2020 03-01-35 1,399,012 1,087,970 KDHE 2049* Sewer 2021 09-01-42 41,500,000 41,500,000 $83,474,170 *Design on this project is in progress. Construction is expected to begin later in 2023 and completed in 2026. The Original Amount shown above is the maximum authorized loan amount which is subject to change . As of July 13, 2023, the City has drawn down $3,142,426 of the authorized amount. A-10 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. Jurisdiction Salina Airport Authority Saline County(2l Unified School District No. 305 Amount Outstanding(1l $34,670,000 72,814,135 93,575,000 Estimated Share of the City Amount Percentage $34,670,000 100.00% 54,678,323 75.09 86,954,720 92.93 $176,303,043 (llAs of the closing date of the Bonds. (2l1ncludes $72,250,000 of bonds issued by Saline County the security of which includes a pledge of both property taxes and a dedicated 0.50% countywide retailers' sales tax of the County. The bonds have historically been repaid entirely from the collections of the sales tax and the County anticipates that the bonds will continue to be so paid in the future. 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. Existing Bonds Series 2023-A Bonds Year Principal Interest Principal Interest Total 2023* $6,305,000 $2,076,616 -$8,381,616 2024 6,265,000 1,728,341 185,000 154,474 8,332,815 2025 6,000,000 1,551,166 215,000 128,400 7,894,566 2026 5,310,000 1,377,246 230,000 117,650 7,034,896 2027 5,120,000 1,219,388 240,000 106,150 6,685,538 2028 4,865,000 1,069,754 250,000 94,150 6,278,904 2029 4,625,000 925,046 260,000 81,650 5,891,696 2030 3,935,000 802,196 275,000 68,650 5,080,846 2031 3,870,000 702,418 290,000 54,900 4,917,318 2032 3,800,000 603,573 305,000 40,400 4,748,973 2033 3,780,000 506,798 315,000 28,200 4,629,998 2034 3,640,000 408,101 30,000 15,600 4,093,701 2035 3,485,000 313,813 35,000 14,400 3,848,213 2036 2,800,000 220,387 35,000 13,000 3,068,387 2037 1,905,000 145,225 35,000 11,600 2,096,825 2038 1,170,000 89,350 40,000 10,200 1,309,550 2039 1,200,000 57,600 40,000 8,600 1,306,200 2040 470,000 25,050 40,000 7,000 542,050 2041 475,000 14,450 45,000 5,400 539,850 2042 125,000 3,750 45,000 3,600 177,350 $69,145,000 $13,840,271 $2,955,000 $965,824 $86,906,902 *Includes payments made prior to the closing date of the Bonds. A-11 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 2022 $69,145,000 12.37% 1.87% 46,868 $1,475.31 2021 59,582,649 11.54 1.76 46,481 1,281.87 2020 65,330,000 12.79 1.96 46,803 1,395.85 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 is currently considering approximately $10 million of improvement projects to several municipally owned buildings. If approved by the City Commission, these projects are anticipated to be funded within the next year with general obligation debt and/or lease purchase financing. Additionally, the City annually prepares a multi- year capital improvements plan. This plan identifies and prioritizes potential capital improvement projects within the City and includes the respective funding sources. The latest capital improvements plan presented to the City Commission includes approximately $24-28 million of projects to be funded with general obligation debt over the next three to four calendar years. This plan has been presented to the City Commission but has not been formally adopted. The plan does not include future residential subdivision improvement projects which might be 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-12 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 vaforem 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. ff 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. ff 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-13 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, 2021 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), (bl 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-14 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: 2018 2019 2020 2021 Property Taxes $9,743,497 $10,801,226 $11,497,684 $10,820,524 Sales Tax 32,900 13,418,742 13,697,179 16,853,083 Other Taxes 5,444,880 5,086,492 4,925,381 5,351,559 Intergovernmental 1,144,717 1,351,967 2,453,021 1,144,657 Charges for Services 6,366,094 5,816,485 4,942,217 5,841,900 Investment Revenue 45,477 613,249 256,515 78,253 Miscellaneous 452.916 609,676 981,845 719.637 Total Revenues $36,490,207 $37,778,837 $38,753,842 $40,539,613 Expenditures: General Government $5,648,579 $4,581,505 $5,505,967 $5,629,698 Public Safety 22,952,925 23,692,445 22,435,061 23,214,758 Public Works 5,350,056 5,473,414 5,101,204 5,464,894 Public Health and Sanitation 793,780 816,636 682,439 746,880 Culture and Recreation 4,494,713 4,379,441 3,037,594 3,732,377 Planning and Development 766,471 836,690 673,564 55,174 Capital Outlay 860,115 985,861 608,460 675.363 Total Expenditures $40,866,639 $40,765,992 $38,044,289 $39,519,144 Revenues Over (Under) $(4,376,432) $(2,987,155) $709,553 $1,020,469 Other Sources (Uses) 4,236,500 5,551,752 4,929,300 4.900,800 Net Change in Fund Balance $(139,932) 2,564,597 $5,638,853 $5,921,269 Fund Balance January 1 $6,882,509 $6,742,577 $9,503,410 $15,142,263 Restatement of Prior Year Balance 0 0 0 0 Fund Balance December 31 $6,742,577 $9,307,174 $15,142,263 $21,063,532 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 Pro'1ertY: Utilities Vehicle Valuation 2023* $506,218,333 $6,842,067 $23,037,764 $54,903,252 $591,001,416 2022 468,723,852 9,542,807 25,613,362 54,903,252 558,783,273 2021 427,732,694 8,154,030 23,975,182 56,545,812 516,407,718 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 2014 376,131,346 13,652,885 17,670,147 48,865,900 456,320,278 2013 370,390,092 17,769,120 16,948,264 48,882,411 453,989,887 *Estimate provided by Saline County and used for budgeting purposes. Final 2023 valuations for real estate, personal property and state assessed utilities will be released in November of 2023. Final 2023 valuation for motor vehicles will be released in January of 2024. A-15 Estimated Actual Valuation Based on assessment percentages provided by Kansas Statutes, real estate equalization ratios provided by the Kansas Department of Revenue (see "FINANCIAL INFORMATION CONCERNING THE CITY -Property Assessment Rates"), and estimated actual valuation figures provided by the Saline County Appraiser's Office, the following table provides November 1 estimated actual valuations for the City in the years indicated. Year 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Special Assessments Residential Real Estate Equalization Ratio 10.48% 10.87 10.79 11.44 11.17 11.04 11.36 11.28 11.65 11.55 Estimated Actual Value $3,705,559,200 3,392,138,959 3,325,193,918 3,292,557,745 3,150,409,123 3,097,885,103 3,046,949,034 2,968,008,193 2,917,267,724 2,889,385,914 The City has pursued a policy of utilizing special benefit districts to assign the cost of certain internal improvement projects to the property that directly benefits from the construction. Kansas statutes allow for the creation of special benefit districts to pay for the cost of a variety of improvements including street construction, storm water drains, sanitary sewer system improvements, street lighting, water system improvements, recreational facilities, flood. control projects, bridges, and parking facilities. The City has typically utilized special benefit districts to pay for the costs associated with constructing streets, sidewalks, curbs, gutters, and lighting in new residential developments within the City. When a developer requests the use of Special Assessments to finance public improvements, the City requires that they pay 20% of the estimated cost of the project in cash, or file a letter of credit equivalent to 35% of the estimated cost of the project. The letter of credit is released when Certificates of Occupancy have been issued for 35% of the lots in the development. 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-16 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 ~ 2022* 30.348 $16,777,459 $16,086,452 95.9% $16,099,745 96.0% 2021 30.452 15,398,398 15,125,318 98.2 15,310,316 99.4 2020 30.650 15,226,084 15,028,646 98.7 15,045,546 98.8 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 201S 27.311 11,209,245 10,984,630 98.0 11,169,600 99.6 *Represents collections through April 2023. Tax Levies Nov Nov Nov Nov Nov 2018 2019 2020 2021 2022 ~ ~ ~ Levy Levy City of Salina 28.394 29.720 30.650 30.452 30.348 Salina Library 6.014 5.913 5.880 6.028 5.510 State Education & Other 1.500 1.500 1.500 1.500 1.500 Unified School District No. 305 57.522 55.508 55.454 54.903 53.425 Airport Authority 4.998 4.447 5.037 4.838 4.968 Central Kansas Extension District 1.476 1.198 1.206 1.196 1.111 Saline County 38.437 41.097 40.606 39.782 38.860 Total 138.341 139.383 140.333 138.699 135.722 A-17 Largest Taxpayers According to the Saline County Clerk's Office, the following table lists the largest taxpayers in the City, their November 2022 assessed valuations, and the percentage each taxpayer comprised of the total assessed valuation of the City. Company Evergy, Inc. SFC Global Supply Chain Inc Kansas Gas Service Sam's Real Estate Business Trust/Walmart Salina Regional Health Properties Inc. Central Mall Realty Holding LLC S&B Motels Union Pacific Railroad Co. Menard Inc. Individual Total Building Permits Issued Type of Business Utility Manufacturing Utility Discount Store Motel Retail Shopping Center Motel Railroad Retail Shopping Center Commercial %of Assessed Total Valuation Valuation $16,402,623 2.94% 11,272,565 2.02 5,746,609 1.03 4,739,506 0.85 4,346,082 0.78 3,142,587 0.56 2,894,902 0.52 2,323,522 0.42 2,284,161 0.41 2,256,168 0.40 $55,408,725 9.92% 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 2023* $14,366,327 2022 211,920,402 2021 27,383,463 2020 27,706,623 2019 20,544,765 2018 71,862,718 2017 59,975,197 2016 97,910,328 2015 56,989,007 2014 24,214,432 * As of March 2023 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 1.00% countywide local option sales tax. In 1992 voters of the City approved a local option 0.50% citywide sales tax for purposes of helping fund general operations expenditures of the City. Both of these taxes were approved in perpetuity. A-18 In May of 2016, voters in the City approved a 0.75% 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 0.40%. In November of 2020, the voters of Saline County approved an additional 0.50% 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. Year 2023111 2022 2021 2020 2019 2018 2017 2016(2) 2015 Citywide Local Option Sales & Use Tax Receipts $9,476,105 18,526,850 16,971,338 15,160,656 14,922,405 14,632,584 14,404,702 10,458,630 10,372,573 City's Portion of 1% Countywide Local Option Sales & Use Tax Receipts $4,982,071 9,707,849 8,798,402 7,756,909 7,608,604 7,415,804 7,368,869 7,312,618 7,376,708 (ll Through June of 2023. Aggregate sales and use tax receipts for this period are approximately 3. 7% above levels for same period in 2022. (2l Collections prior to October 1, 2016 represent taxes attributable to a 0.40% sales tax that was replaced with the 2016 sales tax of 0.75%. Prior to October 1, 2016 the citywide aggregate sales and use tax rate was 0.90%. 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 A-19 future property tax distributions to other taxing jurisdictions an amount equal to the jurisdiction's pro rata share of such refund. Any such withholdings from future property tax distributions may have a material adverse effect on the City's financial situation. Property Assessment Rates In order to determine the assessed valuation of a parcel of property for taxation purposes, the county appraiser multiplies the appraised value of the parcel by the applicable assessment rate. Current property assessment rates were established in 1986, effective in 1989, and slightly modified in 1992. The most significant 1992 modifications involved lowering the assessment rate on commercial and industrial real property from 30% to 25% and on residential property from 12% to 11.5%. The following table shows the current assessment rates for the different classes of taxable tangible property within the State of Kansas. Real Property: Residential Commercial and Industrial- Real Property Agricultural Land (1) Agricultural Improvements Vacant Lots Not-for-Profit (2) All Other Personal Property: (3) Mobile Homes Mineral Leaseholds (large) Mineral Leaseholds (small) Commercial & Industrial Machinery & Equipment All Other Utilities: Railroads All Other Public Utilities Motor Vehicles: Property Exempt: 11.5% 25.0 30.0 25.0 12.0 12.0 30.0 11.5% 30.0 25.0 25.0 30.0 federally mandated rate 33.0% 20.0% Property used for the following purposes, or portions thereof, are exempt from taxation provided certain statutory requirements are met: religious, educational, literary, scientific, benevolent, alumni associations, veterans' organizations, or charitable purposes, including parsonages and community service organizations providing humanitarian services. (1) Agricultural land is valued based on the productivity value of the property and not estimated market valuation. (2) A bill passed by the Kansas Legislature in 1994 clarified this class of property to include all property owned and operated by not-for-profit organizations not subject to federal income taxation pursuant to paragraphs (2), (3), (4), (7), (8), or (10) of Subsection C of Section 501 of the federal internal revenue code. This bill specifically established that private, not-for-profit country clubs would be assessed at 12% for all land that does not accommodate buildings or improvements. A-20 (3) The 2006 Kansas Legislature exempted from all property or ad valorem property taxes levied under the laws of the State, all commercial, industrial, telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existing business or creation of a new business. Equalization Ratios Annually, the Property Valuation Division of the Kansas Department of Revenue conducts a study to compare the assessed valuation of real property to estimated market value based on property sale prices. The study derives an equalization ratio which, when divided into assessed valuation, provides a means to approximate actual market value. According to the 2022 Preliminary Kansas Appraisal/Sales Ratio Study, the equalization ratio for residential real property in Saline County was 10.48%, and commercial and industrial property was 22.45%. A-21 APPENDIX B Form of Continuing Disclosure Undertaking CONTINUING DISCLOSURE UNDERTAKING CITY OF SALINA, KANSAS Gilmore & Bell, P.C. 06/16/2023 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A DATED AUGUST 17, 2023 This CONTINUING DISCLOSURE UNDERTAKING dated as of AUGUST 17, 2023 (the "Continuing Disclosure Undertaking"), is executed and delivered by the City of Salina, Kansas (the "Issuer"). RECITALS 1. This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance of the above-described bonds (the "Obligations") which are being issued simultaneously herewith as of August 17, 2023, pursuant to the Bond Resolution (the "Resolution") adopted by the governing body of the Issuer. 2. The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Obligations and in order to assist the Participating Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"). The Issuer is the only "obligated person" with responsibility for continuing disclosure hereunder. The Issuer covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Continuing Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 2 of this Continuing Disclosure Undertaking, which may include the Issuer's Comprehensive Financial Report, so long as the Comprehensive 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 Obligations and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Obligations (including persons holding Obligations through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Obligations for federal income tax purposes. "Business Day" means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal office or designated payment office of the paying agent or the Dissemination Agent is located are required or authorized by law to remain closed, or ( c) a day on which the Securities Depository or the New York Stock Exchange is closed. 600596.20228\DISCLOSURE UNDERTAKING "Comprehensive Financial Report" means the Issuer's Comprehensive Annual Financial Report, if any. "Dissemination Agent" means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to this Continuing Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of (a) or (b) in this definition; provided however, the term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. "Fiscal Year" means the 12-month period beginning on January 1 and ending on December 31 or any other 12-month period selected by the Issuer as the Fiscal Year of the Issuer for financial reporting purposes. "Material Events" means any of the events listed in Section 3 of this Continuing Disclosure Undertaking. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "Participating Underwriter" means any of the original underwriter(s) of the Obligations required to comply with the Rule in connection with the offering of the Obligations. Section 2. Provision of Annual Reports. (a) The Issuer shall, not later than 180 days after the end of the Issuer's Fiscal Year, commencing with the Fiscal Year ending December 31, 2022, file with the MSRB, through EMMA, the following financial information and operating data (the "Annual Report"): (1) The audited financial statements of the Issuer for the prior Fiscal Year, prepared on a modified accrual basis of accounting other than GAAP. A more detailed explanation of the accounting basis is contained in the Official Statement related to the Obligations. If audited financial statements are not available by the time the Annual Report is required to be provided pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Obligations, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement related to the Obligations, as described in Exhibit A, in substantially the same format contained in the final 600596.20228\DISCLOSURE UNDERTAKING 2 Official Statement with such adjustments to formatting or presentation determined to be reasonable by the Issuer. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been provided to the MSRB and are available through EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3, and the Annual Report deadline provided above shall automatically become 180 days after the end of the Issuer's new Fiscal Year. (b) [Reserved] ( c) The Annual Report shall be filed with the MSRB in such manner and format as is prescribed by the MSRB. Section 3. Reporting of Material Events. Not later than 10 Business Days after the occurrence of any of the following events, the Issuer shall give, or cause to be given to the MSRB, through EMMA, notice of the occurrence of any of the following events with respect to the Obligations ("Material Events"): ( 1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Obligations, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation ofa merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; 600596.20228\DISCLOSURE UNDERTAKING 3 (14) appointment of a successor or additional trustee or the change of name of the trustee, if material; ( 15) incurrence of a Financial Obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties. Except as provided in Section 2(b) hereof, if the Issuer has not submitted the Annual Report to the MSRB by the date required in Section 2( a), the Issuer shall send a notice to the MSRB of the failure of the Issuer to file on a timely basis the Annual Report, which notice shall be given by the Issuer in accordance with this Section 3. Section 4. Termination of Reporting Obligation. The Issuer's obligations under this Continuing Disclosure Undertaking shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Obligations. If the Issuer's obligations under this Continuing Disclosure Undertaking are assumed in full by some other entity, such person shall be responsible for compliance with this Continuing Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Obligations, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3. Section 5. Dissemination Agents. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Continuing Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Continuing Disclosure Undertaking. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Undertaking, the Issuer may amend this Continuing Disclosure Undertaking and any provision of this Continuing Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Undertaking. In the event of any amendment or waiver of a provision of this Continuing Disclosure Undertaking, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type ( or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (1) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) 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. 600596.20228\DISCLOSURE UNDERTAKING 4 Section 7. Additional Information. Nothing in this Continuing Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Continuing Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that required by this Continuing Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that specifically required by this Continuing Disclosure Undertaking, the Issuer shall have no obligation under this Continuing Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Default. If the Issuer fails to comply with any provision of this Continuing Disclosure Undertaking, any Participating Underwriter or any Beneficial Owner of the Obligations may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Continuing Disclosure Undertaking. A default under this Continuing Disclosure Undertaking shall not be deemed an event of default under the Resolution or the Obligations, and the sole remedy under this Continuing Disclosure Undertaking in the event of any failure of the Issuer to comply with this Continuing Disclosure Undertaking shall be an action to compel performance. Section 9. Beneficiaries. This Continuing Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Participating Underwriter, and the Beneficial Owners from time to time of the Obligations, and shall create no rights in any other person or entity. Section 10. Severability. If any provision in this Continuing Disclosure Undertaking, the Resolution or the Obligations shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11. Electronic Transactions. The arrangement described herein may be conducted and related documents may be sent, received, or stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 12. Governing Law. This Continuing Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Kansas. [Remainder of Page Intentionally Left Blank.] 600596.20228\DISCLOSURE UNDERTAKING 5 IN WITNESS WHEREOF, the Issuer has caused this Continuing Disclosure Undertaking to be executed as of the day and year first above written. CITY OF SALINA, KANSAS (SEAL) Mayor City Clerk 600596.20228\DISCLOSURE UNDERTAKING S-1 EXHIBIT A TO CONTINUING DISCLOSURE UNDERTAKING FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial information and operating data contained in the following sections and tables contained in Appendix A of the final Official Statement (with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer) relating to the Obligations: • Financial Overview of the City • FINANCIAL INFORMATION CONCERNING THE CITY -Assessed Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Estimated Actual Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Collections • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Levies • FINANCIAL INFORMATION CONCERNING THE CITY -Largest Taxpayers 600596.20228\DISCLOSURE UNDERTAKING APPENDIXC December 31, 2021 Annual Comprehensive Financial Report The following is the Annual Comprehensive Financial Report for the City of Salina, Kansas for the fiscal year ended December 31, 2021, including financial statements as audited by the firm of Gordon CPA LLC, Lawrence, Kansas. Other than auditing said financial statements, Gordon CPA LLC has not performed any procedures relating to this offering document. ANNUAL COMPREHENSIVE 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, 2021 Prepared by Department of Finance and Administration of City of Salina, Kansas CITY OF SALINA, KANSAS Annual Comprehensive Financial Report For the year ended December 31, 2021 Letter of Transmittal Organizational Chart List of Principal Officials TABLE OF CONTENTS INTRODUCTORY SECTION FINANCIAL SECTION Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements: Government-wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet -Governmental Funds Reconciliation of the Total Governmental Fund Balance to Net Position of Governmental Activities Statement of Revenues, Expenditures, and Changes in Fund Balance -Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance with the Government-Wide Statement of Activities Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GMP Basis) General Fund Tourism and Convention Fund Special Gas Fund Sales Tax Capital Fund Statement of Net Position -Proprietary Funds Statement of Revenues, Expenses, and Changes in Net Position -Proprietary Funds Statement of Cash Flows -Proprietary Funds Statement of Fiduciary Net Position -Fiduciary Funds Statement of Changes in Fiduciary Net Position -Fiduciary Funds i-iv V vi 1-3 4-15 16 17 18 19 20 21 22 23 24 25 26 27 28-29 30 31 CITY OF SALINA, KANSAS Annual Comprehensive Financial Report For the year ended December 31, 2021 TABLE OF CONTENTS -CONTINUED FINANCIAL SECTION -CONTINUED Notes to the Basic Financial Statements Required Supplementary Information Other Postemployment Benefits Schedule of Changes in the City's Total OPEB Liability and Related Ratios Other Postemployment Benefits -KPERS Schedule of Changes in the City's Total OPEB Liability and Related Ratios KPERS Pension Plan Schedule of City's Proportionate Share of the Net Pension Liability Schedule of City Contributions Combining Statements and Individual Fund Schedules Combining Statements -Nonmajor Funds Fund Descriptions Combining Balance Sheet -Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds Combining Balance Sheet -Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Special Revenue Funds Combining Balance Sheet -Nonmajor Permanent Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Permanent Funds Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Non-GAAP Basis): Bicentennial Center Fund Business Improvement District Fund Neighborhood Park Fund Special Parks and Recreation Fund Special Alcohol Fund Sales Tax Economic Development Fund Arts & Humanities Fund Debt Service Fund Solid Waste Disposal Fund Water and Sewer Fund Sanitation Fund Golf Course Fund Workers' Compensation Reserve Fund Health Insurance Fund Central Garage Fund 32-70 71 72 73 73 74-75 76 77 78-79 80-81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 Internal Service Fund Descriptions CITY OF SALINA, KANSAS Annual Comprehensive Financial Report For the year ended December 31, 2021 TABLE OF CONTENTS -CONTINUED FINANCIAL SECTION -CONTINUED Combining Statement of Net Position -Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Net Position -Internal Service Funds Combining Statement of Cash Flows -Internal Service Funds STATISTICAL SECTION Net Position by Component -Last Ten Fiscal Years Changes in Net Position -Last Ten Fiscal Years Fund Balances, Governmental Fund -Last Ten Fiscal Years Changes in Fund Balances, Governmental Funds -Last Ten Fiscal Years Tax Revenues by Source, Governmental Funds -Last Ten Fiscal Years Assessed and Estimated Actual Value of Taxable Property-Last Ten Fiscal Years Direct and Overlapping Property Tax Rates-Last Ten Fiscal Years Principal Property Taxpayers Property Tax Levies and Distributions Direct Sales Rate by Taxing Entity Water Sales by Class of Customer Ratio of Outstanding Debt by Type Ratio of Net General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Pledged Revenue Coverage Demographic and Economic Statistics Principal Employers 99 100 101 102 -103 Schedule 1 104 2 105 3 106 4 107 5 108 6 109 7 110 8 111 9 112 10 113 11 114 12 115 13 116 14 117 15 118 16 119 17 120 18 121 CITY OF SALINA, KANSAS Annual Comprehensive Financial Report For the year ended December 31 , 2021 TABLE OF CONTENTS -CONTINUED GOVERNMENTAL AUDIT SECTION Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards Schedule of Findings and Questioned Costs 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 Independent Auditor's Report on Compliance for Each Major Federal Program and Internal Control Over Compliance Required by the Uniform Guidance 122 123 124 -125 126 -127 128 -129 INTRODUCTORY SECTION DEPARTMENT OF FINANCE AND ADMINISTRATION 300 West Ash, P.O. Box 736 Salina, Kansas 67402-0736 Cilyof ~ Salina October 14, 2022 To the Citizens of the City of Salina, Kansas: TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 Website: www.salina-ks.gov The Annual Comprehensive Financial Report of the City of Salina, Kansas (the "City") for the year ended December 31, 2021, 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, 2021 in the general fund and the special revenue funds. Various internal compliance procedures are implemented to ensure proper implementation of the budget as well as to maintain a degree of accountability for both revenues and expenditures. Independent Audit Kansas Statutes Annotated 75-1122 requires an annual audit of the books of account, financial records and transactions of all administrative departments of the City by independent certified public accountants selected by the City Commission. This requirement has been complied with and the auditor's opinion has been included in this report. Profile of the Community The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas, and became a City of the First Class on July 9, 1920. The City has had a Commission-City Manager form of government since 1921. The Commission is comprised of five members elected at large. Each year the commission chooses one member to 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 2022. 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, Stryten Manufacturing, Great Plains Manufacturing, 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 1.52 in 2021. 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 2021. 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 410 jobs to the Salina area. Both projects remained on track during 2021. 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. In 2021 Stiefel Theatre completed renovations and The Garage, an educational and historical exhibit about automobiles, neared completion. 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 2021, in addition to merit increases of up to 3.0%. In 2020, the City cost of living increase was 2.0%, with no merit increases. 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 Annual Comprehensive Financial Report was made possible by the dedicated Finance staff of the City of Salina and the professional advice and efforts of the Gordon CPA 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 I I Risk Municipal Management Court I Development Services Lauren Driscoll I / "' Building Services Neighborhood Services Planning & Zoning Community Relations \.. I Arts & Humanities I Brad Anderson I Smoky Hill Museum 1 I Continuous Process Improvement Scott Gardner ( City of Salina ) I CITIZENS 11 I CITY COMMISSION Trent Davis, Mayor Karl Ryan Bill Longbine Greg Lenkiewicz Mike Hoppock I City Manager Michael Schrage I Deputy City Assistant City Manager Manager Jacob Wood Shawn Henessee I Parks & Recreation Police Jeff Hammond Brad Nelson I I / ' / Parks Division Administration Recreation Division Patrol Division Golf Course Support Division Facility Maintenance Investigative Division Animal Services , Bicentennial Center l I Public Works Jim Teutsch I / Engineering Public Services Streets Traffic Control Flood Control Sanitation Solid Waste Central Garage ./ Human Resources Natalie Fischer • Contract Position V I I Utilities I Manha Tasker I / Water Plant Division Wastewater Plant Division Utility Division Water Distribution Wastewater '-Collection I Legal Services Clark Mize & Linville Chartered* Gree BenRtson I I Fire Tony Sneidar I ' r Fire Administration Fire Suppression Fire Prevention EMS ., l I Finance/ Administration Debbie Pack l / ' City Clerk Water Customer Accounting Finance '-.) I Computer Technology Interim-Scott Gardner City of Salina, Kansas List of Principal Officials City Commission Mayor Trent Davis Vice-Mayor Karl Ryan Commissioner Bill Longbine Commissioner Greg Lenkiewicz Commissioner Mike Hoppock City Executive Staff Mike Schrage, City Manager Jacob Wood, Deputy City Manager Shawn Henessee, Assistant City Manager Greg Bengtson, City Attorney Debbie Pack, Director of Finance & Administration Brad Anderson, Director of Arts & Humanities Lauren Driscoll, Director of Community & Development Services Natalie Fischer, Director of Human Resources Scott Gardner, Continuous Process Improvement Director & Interim Computer Technology Dir. Jeff Hammond, Director of Parks & Recreation Sean Morton, Interim Police Chief Martha Tasker, Director of Utilities Jim Teutsch, Director of Public Works Tony Sneidar, Fire Chief vi FINANCIAL SECTION In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for twelve months beyond the financial statement date. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve, collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the economic decisions of users made on the basis of these financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: • Exercise professional judgement and maintain professional skepticism throughout the audit • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amount and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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 City's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgement, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Emphasis of Matter As discussed in Note 3. to the financial statements, certain errors in amounts previously reported as of December 31, 2020, were discovered by management of the City during the current year. Accordingly, these amounts have been restated in the December 31, 2021, financial statements now presented, and adjustments have been made to fund balance 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, the schedule of the City's proportionate share of the net pension liability, the schedule of City contributions, and the schedule of changes in the City's total OPEB liability and related ratios, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2 Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The statements and schedules listed under supplementary information in the accompanying table of contents, including the schedule of expenditures of federal awards as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditors' report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 14, 2022, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is solely 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 accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Co~d,~ CP/1 L[C Certified Public Accountant Lawrence, Kansas October 14, 2022 3 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2021 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 , 202 1. 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 $74.1 million from current operations with net position change of $79.0 million and $(4.9) million in governmental activities and business-type activities, respectively. • At the close of 2021 , the City's governmental funds reported combined ending fund balances of $110.2 million, an increase of $78.9 million from the prior year. The Capital Projects expenditures increased $12.2 million from prior year. The General Fund fund balance increased $5.9 million, and all Other Governmental Funds fund balances increased $73.0 million over the prior year. The majority of this amount, $66.7 million, comes from the Former Schilling AFB Environmental Fund. • At the close of 2021, the City's enterprise funds reported a combined ending Net Position of $93.5 million, a decrease of $3.1 million compared to the prior year. The Water and Sewer Fund, the Sanitation Fund, Solid Waste Disposal and the Golf Fund all reported slight decreases to net position for the year. ♦ Revenues from governmental activities increased by $67.6 million from the prior year and revenues from business type activities increased $4.5 million from the prior year. ♦ 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, 2021 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 Cemetery and Mausoleum Endowments, and the Tri-centennial Commission fund. Notes to the Financial Statements The notes to the financial statements are an integral part of the basic financial statements since they contain valuable additional information necessary for gaining a complete understanding of the City's financial statements. 5 Other Information CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2021 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 (25%) and business-type (75%) activities. Charges for services account for about 24% ($38.6 million) of the City's revenue stream. Charges for service depend on both the rate that is set for the activity, as well as the volume of services provided. Significant services include water and wastewater fees, sanitation and landfill fees, licenses and permits, inspection fees and golf course fees. Charges for services increased in 2021, largely due to the COVID pandemic as most services were paused temporarily in 2020. This was offset by lower expenses. Sales taxes are the next largest component of the revenue mix, providing 16% ($26.7 million) of the total revenues. The City receives a 1.25% City-wide sales tax, and also a portion of the County-wide 1.5% sales tax. Forty-four percent, (a rate of .75%) of the City-wide safes 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 sates tax. This change is recognized bi-annually and can affect the overall allocation of the City's portion of the County-wide sates tax. 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 9% ($15.5 million) of total revenues. Property taxes consist of two components: Real estate and personal property taxes which are determined by the mill levy set by the city and the assessed value of the property; and motor vehicle taxes which are established by a countywide average tax rate and the assessed value of the vehicle. Real estate assessed value increased by 1.0%. The total City mill levy decreased by 1.2%. The overlapping levy increased in 2021 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, 2021 Motor vehicle value increased 1.7%. Motor vehicle taxes are distributed based on a formula using prior year's tax effort (similar to the Countywide Sales Tax Distribution). The following table summarizes the comparative property assessed values and tax levy rates: Comparative Property Values and Tax Levy Rates Fiscal (Budget) Year 2021 2020 Change Real Estate and Personal Property Assessed Valuation $ 459,861,906 $ 456,362,518 $ 3,499,388 City Mill Le\>)' ($ per $1,000) Operating (General Fund) 23.847 22.908 0.939 Debt Service 6.803 6.812 (0.009) Total City Rate 30.452 30.650 (0.198) Total Overlapping Le\>)' 139.738 140.308 (0.570) Percent Total Taxes Collected 98.0% 97.8% 0.002 Ratio of Total Taxes (including delinquent collections) to ta,es le'vied 99.1% 99.4% (0.003) Motor Vehicle Valuation $ 56,545,812 $ 54,589,132 1,956,680.000 The unemployment rate in Salina decreased from 3.4% at the end of 2020 to 2.3% at the end of 2021, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force was 24,962 in 2021. In 2021, the top ten property taxpayers accounted for 9.99% 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 and deferred inflows of resources by $316.5 million as of December 31, 2021. This represents an increase in net assets of $76 million over 2020. A comparative Condensed Statement of Net Position at December 31, 2021 and 2020: 7 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2021 Condensed Statement of Net Position As of December 31 (in $000) Governmental Business-Type Activities Activities Total Prima~ Government %of %of 2021-2020 2021 2020 2021 2020 2021 Total 2020 Total change Cash and investments 120,526 $42,246 $44,760 $38,876 $ 165,286 32% $ 81,122 19% $ 84,164 Other current assets 17,262 16,910 2,235 2,082 19,497 4% 18,992 4% 505 Noncurrent ( capital) assets 218,619 215,438 117,494 119 118 336,113 65% 334,556 77% 1,557 Total assets 356,408 274,594 164,489 160,076 520,897 100% 434,670 100% 86,227 T olal deferred outflow., of 7 444 8 761 903 1,117 8347 100% 9,878 100% (1,531) resources Total assets and deferred outflow.; of resources 363,852 283,355 165,392 161,192 529,244 444,547 84697 Current liabilities 17,292 17,230 5,539 3,964 22,831 12% 21,194 11% 1,637 Noncurrent liabilities 100,427 106,651 64,899 60,379 165,326 88% 167,030 89% (1,704) Total liabilities 117,719 123,881 70,438 64,343 188,157 100% 188,224 100% {67) Total deferred inflow.; of resources 22,999 15,392 1,424 240 24,423 15,632 8,791 Net position: Net investment in capital assets 143,768 143,559 56,004 63,742 199,772 63% 207,301 91% (7,529) Restricled for permanent funds 559 543 559 0% 543 0% 16 Restricled for public works 66,698 66,698 21% 0% 66,698 Restricled for debt service 2,112 1,724 1,132 1,175 3,244 1% 2,899 1% 345 Unrestricled 9,997 (1,744) 36,394 31,692 46,391 15% 29,948 8% 16,443 Total net position 223,134 144,082 93,530 96,610 316,664 100% 240,692 100% 75,972 Percent of total net position 70% 61% 30% 39% 100% 100% Cash and investments as a percentage of current liabilities 697% 245% 808% 981% 724% 383% 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, 2021 In 2021, the amount of net investment in capital assets decreased by $7.5 million. Amount restricted for debt service increased by $345,000. Amount restricted for public works increased by $66.7 million. Unrestricted increased by $16.4 million. Outside of these changes, 2021 resulted in a $16,000 increase to the net position. Total liabilities slightly decreased in governmental activities and slightly increased in business-type activities. In governmental activities, current liabilities increased, and non-current liabilities decreased primarily due to an increase in unearned revenue and a decrease in general obligation bonds. Statement of Activities A Condensed Statement of Activities is shown below. Condensed Statement of Activities For the Year Ended December 31 (in $000) Governmental Business-Type Total Prine~ Govemrrent Activities Activities 2021-2020 2021 2020 2021 2020 2021 ~ 2020 .% Change Program Revenues: Charges for Services 9,629 8,400 29,001 26,513 38,630 24% 34,913 37% 3,717 Operating Grants and Contributions 4,711 4,714 4,711 3% 4,714 5% (3) Capital Grants and Contributions 66,150 66,150 General Revenues: Property Taxes 13,885 14,887 13,885 8% 14,887 16% (1 ,002) Sales Taxes 26,720 23,448 26,720 16% 23,448 25% 3,272 Other Taxes 8,759 6,117 8,759 5% 6,117 7% 2,642 Investment Revenue 158 286 4 158 0% 290 0% (132) Other Miscellaneous 2,405 81328 2,416 447 4,821 3% 8,775 9% (3,954) Total Revenues: 132,417 66,180 31,417 26,964 163,834 60% 93,144 100% 70,690 Elqlenses: General Government 16,098 10,395 16,098 18% 10,395 14% 5,703 Public Safety 23,877 24,672 23,877 27% 24,672 33% -795 Public Works 16,335 10,511 16,335 18% 10,511 14% 5,824 Public Health and Sanitation 2,315 1,323 2,315 3% 1,323 2% 992 Culture and Recreation 6,305 5,033 6,305 7% 5,033 7% 1,272 Planning and Developrrent 2,289 2,004 2,289 3% 2,004 3% 285 Solid Waste Disposal 1,836 2,056 1,836 2% 2,056 3% -220 Water and Sewer 13,310 13,386 13,310 15% 13,386 18% -76 Sanitation 3,655 2,526 3,655 4% 2,526 3% 1,129 Golf Course 878 805 878 1% 805 1% 73 Interest on Long Term Debt 2,827 2,350 2,827 3% 2,350 3% 477 Total Expenses 70,046 56,288 19,678 18,773 89,725 100% 751061 100% 141664 Increase in net assets before transfers 62,371 9,892 11,738 8,191 74,109 18,083 56,026 Transfers and other extraordinary items 16,681 5,133 (16,681) (51133) (0) 0 Change in Net Position 79,052 15,025 (4,943) 3,058 74,109 18,083 56,027 Net Position January 1 144,081 138,359 96,610 93,552 240,691 231,911 8,780 Prior Period Adjustment (9,303) 1,862 0 1,862 -9303 1,862 Net Position January 1 restated 144,081 129,056 98,472 93,552 242,553 222,608 19,945 Net Position December 31 $223,133 $144,081 $93,530 $96,610 $ 3161662 $240,691 $ 751971 9 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2021 Governmental Activities. Charges for services attributable to governmental activities totaled $9.6 million , operating grants for those purposes were $4.7 million and capital grants totaled $66.2 million. Charges for services increased, operating grants decreased slightly from the prior year due to the 2020 COVID pandemic as most services were paused temporarily. Capital grants increased due to the City receiving a payment from the U.S. Department of Defense for environmental remediation of the former Schilling Air Force Base in 2021. The balance was funded by general revenues. Sales taxes accounted for $26.7 million of general revenues, with property taxes providing $13.9 million. The net position increased by $79 million as a result of governmental activities. This increase was primarily related to the capital contribution from the federal government and increases in sales and other taxes. Total expenses for governmental activities for the year ending December 31 , 2021, were $70 million compared to $59.3 million in 2020. Governmental activities represent 78% of the City's total expenses. The largest element of governmental activity expense was public safety, accounting for 34% 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 $19. 7 million, or 22% of the City's total expenses. The majority of this expense ($13.3 million) is attributable to water and sewer operations, with the other activities costing a combined total of $6.4 million. Net position decreased by $4.9 million. This increase was primarily related to an overall increase in business-type activity expenses after 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 , 2021 and December 31, 2020. Governmental Fund Balances as of December 31, (in $000's) Fund 2021 2020 Change General $ 21,064 $ 15,142 $ 5,922 Tourism and Conwntion 603 327 276 Special Gas 2,362 2,866 (504) Sales Tax Capital 9,402 5,209 4,193 Schilling Capital lmprowment 1,494 (1,494) Former Schilling AFB En\Aronmental 66,698 66,698 Debt Ser\Ace 2,112 1,724 388 Capital Projects (922) (4,028) 3,106 SFH QalicB 1,843 1,561 282 Other Go\oemmental Funds 7,052 6,990 62 $ 110,215 $ 31 ,285 $ 78,930 Total governmental fund balances increased by $78.9 million. The reasons for these changes are varied, including lower expenses during the 2020 COVID pandemic. The Former Schilling AFB Environmental Fund was created to account for funds from the U.S. Government for environmental remediation former air force base located in within City limits. 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, 2021 and 2020. 10 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2021 Consolidated Statement of Revenues and Expenditures for Major Governmental Funds For the years ended December 31 Modified Accrual Basis (in $000's) &ml 2021 2020 Changi Revenues (including Other Financing Sources) General $ 46,346 $ 44,560 $ 1,786 Tourism and Convention 1,764 1,192 572 Special Gas 1,598 2,209 (611) Sales Tax Capital 9,639 8,871 768 Schilling Capital Improvement 462 7 455 Former Schilling AFB Environmental 67,959 67,959 Debt Service 12,855 7,740 5,115 Capital Projects 20,276 8,598 11,678 SFHQalicB 493 494 (1) Other Governmental Funds 6,540 7,757 (1,217} Total Revenues 167,932 81,428 86,504 Less Other Sources {37,405} {18,515) {18,890} Revenues, net of other sources $ 130,528 $ 62,913 $ 67,615 Expenditures (including Other Financing Uses) General $ 40,424 $ 38,921 $ 1,503 Tourism and Convention 1,487 1,316 171 Special Gas 2,102 1,534 568 Sales Tax Capital 5,447 6,067 (620) Schilling Capital Improvement 1,956 462 1,494 Former Schilling AFB Environmental 1,261 1,261 Debt Service 12,467 7,155 5,312 Capital Projects 17,169 4,974 12,195 SFH QalicB 210 244 (34) Other Governmental Funds 6,478 5,865 613 Total Expenditures 89,002 66,538 22,464 Less Other Uses (6,399) {4,271) {2,128) Expenditures, net of other uses $ 82,603 $ 62,267 $ 20,336 Total revenues, including other sources, increased $86.5 million compared to 2020, with Former Schilling AFB Environmental Fund showing the largest increase between the two years, which was $68 million. Total expenditures increased $22.5 million over 2020. The majority of that increase, $12.2 million was in the Capital Projects Fund as a result of increased spending on projects, which has slowed 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 , 2021 Comparative Summary Statement of Net Position as of December 31 (in $000's) Solid Waste Diseosal Water and Sevver 2021 2020 Change 2021 2020 Change Current Assets $ 9,164 $ 8,075 $ 1,089 $ 36,210 $ 30,396 $ 5,814 Capital Assets 3,206 3,335 (129) 112,719 114,104 (1,385) Deferred Outflows 115 137 (22} 569 706 (137} Total Assets and deferred outflows $ 12,485 $ 11,547 $ 938 $ 149,498 $ 145,206 $ 4,292 Current Liabilities $ 2,306 $ 448 $ 1,858 $ 3,134 $ 3,394 $ (260) Noncurrent Liabilities 4,360 4,929 (569) 59,760 54,285 5,475 Deferred Inflows 153 33 120 921 151 770 Total Liabilities $ 61819 $ 5,410 $ 1,409 $ 63,815 $ 571830 $ 5,985 Net investment in capital assets $ 1,185 $ 910 $ 275 $ 53,250 $ 61,154 $ (7,904) Restricted 1,132 1,175 (43) Unrestricted 4,482 5,227 {745} 31,301 25,046 6,255 Total Net Position $ 5,667 $ 61137 $ C470l $ 85,683 $ 87,375 $ {1,692l Current Assets as percentage of current liabilities 397% 1802% 1155% 896% Sanitation Golf Course 2021 2020 Change 2021 2020 Change Current Assets $ 1,508 $ 2,395 $ (887) $ 112 $ 91 $ 21 Capital Assets 1,135 1,003 132 433 675 (242) Deferred Outflows 127 164 p 7} 91 110 p 9) Total Assets and deferred outflows $ 2,771 $ 3,562 $ (791 ) $ 636 $ 876 $ (240) Current Liabilities $ 82 $ 97 $ (15) $ 17 $ 25 $ (8) Noncurrent Liabilities 562 833 (271) 216 330 (114) Deferred Inflows 264 41 223 86 15 71 Total Liabilities $ 909 $ 971 $ !62l $ 319 $ 370 $ (51 l Net investment in capital assets $ 1,135 $ 1,003 $ 132 $ 433 $ 675 $ (242) Restricted Unrestricted 727 1,588 {861 } (1 16) {169} 53 Total Net Position $ 1,862 $ 2,591 $ (729) $ 317 $ 506 $ !189) Current Assets as percentage of current liabilities 1839% 2469% 674% 364% 12 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2021 Revenues, Expenses, and Changes in Net Position All enterprise funds continue to show healthy net position. 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 2021 2020 Change 2021 2.Q2Q Change Operating Revenues $ 3,636 $ 3,322 $ 314 $ 23,668 $ 19,504 $ 4,164 Operating Expenses 1,746 2,011 (265} 12,078 12,460 {382} Operating Income 1,890 1,311 579 11,590 7,044 4,546 Non-operating revenues (expenses) (90) (45) (45} (1 ,232) (922) {310} Income (Loss) before Transfers 1,800 1,266 534 10,359 6,122 4,237 Transfers in (out) (2,271} (2,729) 458 (13,913} (2,006) (11,907} Change in Net Position (471 ) (1 ,463} 992 (3,554} 4,116 (7,670) Net Position January 1 6,137 5,640 497 87,375 85,219 2,156 Restatement 1,960 (1,960} 1,862 (1,960) 3,822 Net Position, January 1, restated 6,137 7,600 (1,463} 89,237 83,259 5,978 Net Position December 31 $ 5,666 $ 6,137 $ ~471 l $ 85,683 $ 87,375 $ p,692) Sanitation Golf Course 2021 2020 Change 2021 2020 Change Operating Revenues $ 3,423 $ 3,194 $ 229 $ 689 $ 939 $ (250) Operating Expenses 3,655 2,526 1,129 878 805 73 Operating Income (232) 668 (900} (1 89} 134 (323) Non-operating revenues (expenses) Income (Loss) before Transfers (232) 668 (900) (189) 134 (323) Transfers in (out) (497} {497} 100 (100} Change in Net Position (729) 171 (900) p 89} 234 (423} Net Position January 1 2,591 2,420 171 506 272 234 Restatement Net Position January 1, restated 2,591 2,420 171 506 272 234 Net Position December 31 $ 1,862 $ 2,591 $ F 29l $ 317 $ 506 $ ~189l 13 Budgetary Highlights CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31 , 2021 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 as of December 31, 2021. 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 as of December 31, 2021, was $336, 112,690, net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets as of December 31, 2021 and 2020: Equipment, Furniture and Fixtures Vehicles Buildings and Improvements Land Leased land under capital leases Infrastructure Leasehold Improvements Construction in Progress Total Capital Assets Balances Net of Depreciation as of December 31 (in $000's) Governmental Activi!}' Business-T~ee Activi~ 2021 2020 2021 2020 $ 2,378 $ 2,309 $ 1,042 $ 1,280 2,315 2,676 885 1,079 27,905 29,218 7,964 8,103 24,224 24,224 2,386 2,386 423 423 140,690 130,010 83,646 78,294 357 357 20,327 26,221 21,571 27 976 $ 218,619 $ 2151438 $ 117,494 $ 119,118 Changes to capital assets may be summarized as follows: Additions Retirements Depreciation Net Additions Changes to Capital Assets, 2021 (in $000's) Governmental Business-Type Activi!z'. Activi!Y 24,371 11,074 (14,616) (8,806) {6,574} {3,892} $ 3,181 $ (1,624} 14 Total 2021 2020 $ 3,420 $ 3,589 3,200 3,755 35,869 37,321 26,610 26,610 423 224,336 208,304 357 41 898 54,197 $336,113 $ 333,776 Total 35,444 (23,421) {10,466~ $ 1 557 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2021 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 as of December 31, 2021, totaled $62,624,018. In addition, there were temporary notes outstanding in the amount of $3,713,786, and loans payable outstanding in the amount of$12,226,942 related to SFH QalicB, a blended component unit of the City. Business-type activities had $9,525,145 in revenue bonds outstanding and $7,998,491 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 $43,966,366 and temporary notes outstanding totals $1,611,714. The City engaged in the following debt transactions during 2021: • On April 29th, the City issued Series 2021-A, General Obligation Bonds in the amount of $7,645,000. The proceeds were used to finance construction of a Police Facility, Basketball Court, Pheasant Ridge 3, Stone Lake 2 and 9 South. • On September 9th, the City issued Series 2021-B General Obligation Refunding Bonds in the amount of $6,220,000. The proceeds were used to refund outstanding bonds, Series 2013-B in the amount of $2,310,000 and Series 2014-A in the amount of $3,910,000. • On April 29th, the City issued Series 2021-1, Temporary Notes in the amount of $5,230,000, to finance construction costs for the final design of the Smoky Hill River project, the 9th Street Bridge project, sanitation trucks and HVAC replacement at Heritage Hall. 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, 67 401. 15 CITY OF SALINA, KANSAS STATEMENT OF NET POSITION December 31, 2021 Prima!J: Government Total Total Governmental Business--type Activities Activities ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets: Cash and investments Receivables (net of allowance for uncollectibles) Accounts Taxes Interest Inventory Restricted cash and investments Prepaid expenses Total current assets Noncurrent assets: Capital assets, nondepreciable Construction in progress Land Capital assets, depreciable less: Accumulated depreciation Total noncurrent assets Total assets Deferred outflows of resources: KPERS OPEB deferred outflows of resources OPEB deferred outflows of resources Pension deferred outflows of resources Deferred charge on bond issuance Total deferred outflows of resources Total assets and deferred outflows of resources liabilities: Current liabilities: Accounts payable Retainage payable Accrued liabilities Accrued interest payable Deposits payable Unearned revenue Current portion of compensated absences Current portion of temporary notes payable Current portion of loans payable Current portion of revenue bonds payable Current portion of general obligation bonds payable Total current liabilities Noncurrent liabilities: Accrued liabilities Compensated absences Security deposits returnable OPEB obligation KPERS OPEB obligation Net pension liability Loans payable Revenue bonds payable General obligation bonds payable Landfill post-<0losure care liabilities Total noncurrent liabilities Total liablllties Deferred inflows of resources: Unavailable revenue -property tax.es KPERS OPEB deferred inflows of resources OPEB deferred inflows of resources Pension deferred Inflows of resources Total deferred inflows of resources Total liabilities and deferred inflows of resources Net Position Net investment in capital assets Restricted for. Permanent funds: Expendable Public worl<s Debt service Unrestricted Total net position $ 120,526,465 $ 44,759,681 2,234,136 1,827,625 14,461,875 4,144 16 304,079 407,146 258,041 137,768,740 46 994 468 20,326,839 21,570,873 24,646,334 2,386,334 313,096,294 172,443,670 139,450,408 78,907,246 218,619,059 117493631 356,407.799 164,488.099 63,151 30,586 303,660 49,293 7,077,223 822,774 7 444 034 902,653 $ 363,851,833 $ 165,390,752 $ 1,864,097 $ 397,378 737,931 614,807 477,718 535,809 422,066 3,551,978 1,252,185 290,568 3,713,786 1,611,714 383,064 775,000 5 079 941 1,123,223 17.292,443 5 538,822 168,990 1,586,470 361,164 3,502,471 569,713 340,238 164,791 25,057,864 2,261,985 12,226,942 43,583,302 8,750,145 57,544,077 6,875,268 2,332,241 100,427,052 64,898,609 117 719,495 70 437 431 13,922,553 143,112 67,659 273,521 45,698 8,659,808 1310457 22,998,994 1423814 $ 140,718 489 $ 71 861,245 $ 143,768,099 $ 56,003,629 558,976 66,697,767 2,111,664 1,131,606 9,996,838 36,394,272 $ 223,133,344 $ 93,529,507 The notes to the basic financial statements are an integral part of this statement 16 Comeonent Units Total Salina Salina Primary Housing Airport Government Authori!l: Authoritl $ 165,286,146 $ 2,183,089 $ 5,303,767 4,061,761 31,685 1,545,489 14,461,875 4,160 711,225 40,154 258,041 115458 17065 184,783,208 2,370,586 6,866,321 41,897,712 234,592 1,985,221 27,032,668 1,557,554 9,920,765 485,539,964 8,999,012 80,623,761 218,357,654 5627,631 501002,230 336,112,690 5,163,527 42,527.517 520,895,898 7 534,113 49,393,838 93,737 300 803 352,953 7,899,997 118,765 197,575 887,276 8346 687 119,065 1,085,654 $ 529.242,585 $ 7,653,178 $ 50,479,492 $ 2,261,475 $ 44,637 $ 769,715 737,931 614,807 20,827 145,765 1,013,527 193,171 422,066 83,553 3,551,978 9,223 1,542,753 1,937 53,228 5,325,500 383,064 40,800 775,000 6,203164 1 670000 22,831,265 160,177 2,872,679 168,990 78,909 1,947,634 17,432 91,771 4,072,184 505,029 7,868 13,911 27,319,849 392,205 509,789 55,810,244 379,258 8,750,145 64,419,345 23,547,949 2,332,241 165,325,661 496414 24.542 678 188,156,926 656,591 27,415,357 13,922,553 210,771 5,740 10,726 319,219 9,970,265 16827 218 778 24,422,808 22,567 229,504 $ 212,579,734 $ 679158 $ 27 644 861 $ 199,771 ,728 $ 5,163,527 $ 16,889,510 558,976 31,390 66,697,767 3,243,270 46391110 1779103 5,945121 $ 316,662,851 $ 6.974,020 $ 22,834,631 Governmental activities: General government Public safety Public works Public health and sanitation Culture and recreation Planning and development ln:erest on long-term debt Total governmental activities Business-type activities: Solid Waste Disposal Water and Sewer Sanitation GoWCourse Total business-type activities Total primary government Component units: Salina Housing Authority Salina Airport Authority Total component units CITY OF SALINA, KANSAS STATEMENT OF ACTIVITIES For the Year Ended December 31, 2021 Net [Expenses] Revenue and Changes in Net Position Program Revenues Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions $ 16,097,945 $ 3,440,146 $ 227,127 $ 23,877,346 4,526,565 1,198,087 16,335,127 414,928 1,368,101 66,150,000 2,315,098 63,263 1,363,117 6,304,537 1,069,993 473,517 2,289,275 114,483 80,856 2,827,085 70,046,413 9,629,378 4,710,805 66,150,000 1,835,923 3,548,636 13,309,765 21,240,517 3,654,819 3,422,158 877,795 789,539 19,678,302 29,000,850 $ 89,724,715 $38,630,228 $ 4,710,805 $66,150,000 $ 2,882,491 $ 394,196 $ 2,370,487 $ 136,111 6,700,195 2,893,724 ----2,717,177 $ 9,582,686 $ 3,287,920 $ 2,370,487 $ 2,853,288 General Revenues: Property taxes levied for General purposes Debi service Motor vehicle tax General purposes Sales tax General purposes Selective purposes Other taxes General purposes Investment revenues Miscellaneous Transfers, net Subtotal general revenues Change in net position Net position -beginning Prior period adjustment Primary Government Component Units Total Total Total Salina Salina Governmental Business-type Primary Housing Airport Activities Activities Government Authority Authority $ [12,430,672] $ $ [12,430,672] $ $ [18,152,694] [18,152,694) 51,597,902 51,597,902 [888,718) [888,718) [4,761,027) [4,761,027) [2,093,936) [2,093,936] [2,827,085] [2,827,085] 10,443,770 10,443,770 1,712,713 1,712,713 7,930,752 7,930,752 [232,661) [232,661] [88,256] [88,256) 9,322,548 9,322,548 10,443,770 9,322,548 19,766,318 18,303 11,089,294[ 18,303 [1,089,294] 10,820,524 10,820,524 2,570,657 3,064,701 3,064,701 1,643,038 1,643,038 15,314,664 15,314,664 11,405,273 11,405,273 7,115,535 7,115,535 158,169 158,169 8,980 1,311 2,405,412 2,415,696 4,821,108 101,496 154,774 16,680,855 116,680,855] 68,608,171 [14,265,159] 54,343,012 110,476 2,726,742 79,051,941 [4,942,611] 74,109,330 128,779 1,637,448 144,081,403 96,609,977 240,691,380 6,845,241 21,197,183 1,862,141 1,862,141 144,081,403 98,472,118 242,553,521 6,845,241 21,197,183 Net position -beginning, restated Net position -ending $ 223,133,344 $ 93,529,507 $316,662,851 $6,974,020 $22,834,631 The notes to the basic financial statements are an integral part of this statement. 17 CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2021 Tourism Schilling and Special Sales Tax Capital General Convention ~ Capital Improvement ASSETS Cash and investments $ 19,206,886 $ 854 $ 2,434,711 $ 9,589,335 $ Restricted cash Receivables (net) Accounts 1,629,294 602,631 Taxes 11,025,946 316,446 Interest 4,144 Inventory 167,703 Due from other funds 1,158 Total assets $ 32,035,131 $ 603,485 $ 2,751 ,157 $ 9,589,335 $ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable $ 109,494 $ -$ 31 ,748 $ 141 ,907 $ Retainage payable 357,472 45,000 Unearned revenue Temporary notes payable Due to other funds Total liabilities 109 494 389,220 186,907 Deferred inflows of resources Unavailable revenue -property taxes 10,728,135 Unavailable revenue -other 133,970 Total deferred inflows of resources 10,862,105 Fund balance: Nonspendable 167,703 Restricted 603,485 2,140,934 Committed 8,379,831 Assigned 152,402 221,003 1,022,597 Unassigned 20,743,427 Total fund balances 21 ,063,532 603,485 2,361,937 9,402,428 Total liabilities, deferred inflows of resources and fund balances $ 32,035,131 $ 603,485 $ 2,751 ,157 $ 9,589,335 $ Former Other Total Schilling AFB Debt Capital SFH Governmental Governmental Environmental Service Projects QalicB Funds Funds $ 66,742,220 $ 2,052,630 $ 4,295,503 $ 3,834 $ 10,798,509 $ 115,124,482 258,041 258,041 1,605,407 2,211 3,839,543 3,119,483 14,461,875 4,144 167,703 10,000 11,158 $ 66,742,220 $ 5,172,113 $ 4,305,503 $ 1,867,282 $ 10,8ooi720 $ 133,866,946 $ 44,453 $ -$ 1,258,184 $ -$ 195,690 $ 1,781,476 321 ,636 13,823 737,931 3,551 ,978 3,551,978 3,647,188 3,647,188 10,000 1 158 11,158 44,453 5,227,008 23,823 3,748,826 9,729,731 3,060,449 13,788,584 133,970 3,060,449 13,922,554 167,703 66,697,767 2,111,664 471 ,333 72,025,183 1,843,459 6,373,218 16,596,508 343,350 1,739,352 [921 ,505] [136,007} 19,685,915 66,697,767 2,111,664 [921,505) 1,843,459 7,051,894 110,214,661 $ 66,742,220 $ 5,172,113 $ 4,305,503 $ 1,867,282 $ 10,800,720 $ 133,866,946 The notes to the basic financial statements are an integral part of this statement. 18 CITY OF SALINA, KANSAS RECONCILIATION OF THE TOT AL GOVERNMENT AL FUND BALANCE TO NET POSITION OF GOVERNMENTAL ACTIVITIES December 31, 2021 Total Governmental Fund Balances Amounts reported for governmental activities in the statement of net position are different because Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds The cost of capital assets is Accumulated depreciation is Pension contributions are reported as an expense in the funds and as a deferred outflow of resources in the governmental activities in the statement of net position. Pension fundings are reported as a revenue in the funds and as a deferred inflow of resources in the governmental activities in the statement of net position. Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. An internal service fund is used by the City's management to charge the costs of the worker's compensation program. The assets and liabilities of the internal service fund are included with governmental activities. The following liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These liabilities at year end consist of: Compensated absences Net OPES obligation Net pension liability Bonds payable Loans payable Accrued interest on the bonds Net Position of Governmental Activities 357,901,233 139,296,083 2,808,600 3,834,225 24,951,955 62,624,018 12,226,942 477,718 The notes to the basic financial statements are an integral part of this statement. 19 $ 110,214,661 218,605,150 7,405,958 [9,005,574] [1,672,004] 4,508,611 [106,923,458) $ 223,133,344 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31, 2021 Tourism Schilling and Special Sales Tax Capital General Convention ~ Capital lmprovemenl REVENUES: Taxes Real estate taxes $ 10,521,583 $ $ -$ $ Delinquent taxes 298,941 Motor vehicle taxes 1,268,419 General sales taxes 15,314,664 Selective sales taxes 9,639,452 Other taxes 5,351,559 1,763,976 Intergovernmental 1,144,657 1,357,801 Special assessments Licenses and permits Charges for services 5,841,900 Investment revenue 78,253 Donations Miscellaneous 719,637 80,373 462,374 Total revenues 40,539,613 1,763,976 1438174 9,639,452 462374 EXPENDITURES: Current General government 5,629,698 Public safety 23,214,758 Public works 5,464,894 388,839 Public health and sanitation 746,880 Culture and recreation 3,732,377 Planning and development 55,174 833,830 Miscellaneous Capital outiay 675,363 1,713,301 2,753,166 Debt service Principal retirement Interest and other charges Total expenditures 39,519,144 833,830 2,102,140 2,753,166 Excess [deficiency] of revenue and other sources over [under] expenditures and other (uses] 1,020,469 930 146 1663,966) 6,886,286 462 374 OTHER FINANCING SOURCES [USES] Issuance of bonds Bond and temporary note premium Transfers in 5,806,300 160,000 Transfers (out] [905,500) !653,523) [2,693,350] [1,956,351) Total other financing sources [uses] 4,900,800 [653,523) 160,000 [2,693,350) [1,956,351) Net change in fund balance 5,921,269 276,623 {503,966] 4,192,936 [1,493,977] Fund balance -Beginning of year 15,142,263 326,862 2,865,903 5,209,492 1,493,977 Fund balance -End of year $ 21,063,532 $ 603,485 $ 2,361,937 $ 9,402,428 $ Former Other Total Schilling AFB Debt Capital SFH Governmental Governmental Environmental Service Projects QalicB Funds ~ $ -$ 2,978,243 $ -$ -$ -$ 13,499,826 86,458 385,399 374,619 1,643,038 15,314,664 1,765,821 11,405,273 7,115,535 65,900,000 250,000 2,239,721 70,892,179 1,405,148 1,405,148 10,300 10,300 492,917 375,649 6,710,466 65,998 45 13,873 158,169 89,647 89,647 635,492 1,897,876 65,965,998 4 844,468 250,000 492,962 5,130,503 130,527,520 5,629,698 23,214,758 312,121 6,165,854 1,549,128 2,296,008 1,584,686 5,317,063 1,189,341 2,078,345 1,880 1,880 1,261,025 16,875,459 10,085 1,650,384 24,938,783 10,549,900 10,549,900 1 917 407 293 791 200044 2,411,242 1,261,025 12,467,307 17,169,250 210,129 6,287,540 82,603,531 64,704,973 [7,622,839] [16,919,250] 282,833 [1,157,037] 47,923,989 6,167,545 7,645,000 13,812,545 592,398 592,398 1,992,794 1,842,841 11 ,788,154 1,409,532 22,999,621 1190,042) (6,398,766] 1,992,794 8,010,386 20,025,552 1,219,490 31,005,798 66,697,767 387,547 3,106,302 282,833 62,453 78,929,787 1724117 [4,027,BOZJ 1,560,626 6,989,441 31 ,284,874 $ 66,697,767 $ 2,11\664 $ [921 ,505) $ 1,843,459 $ 7,051,894 $ 110,214,661 The notes to the basic financial statements are an integral part of this statement. 20 CITY OF SALINA, KANSAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2021 Total Net Change In Fund Balances -Governmental Funds Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net position and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capital outlays exceeds depreciation in the period. Capital outlays Depreciation expense Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. This is the amount by which interest increased. 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. Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. Some expenses reported in the statement of activities, such as compensated absences and other post employment benefits, do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities. Bond, temporary note, loan and lease proceeds are other financing sources in the governmental funds, but they increase long-term liabilities in the statement of net position and do not affect the statement of activities. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. 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. Changes In Net Position of Governmental Activities 9,755,057 [5,916,846] The notes to the basic financial statements are an integral part of this statement. 21 $ 78,929,787 3,838,211 [415,843] 959,307 [656,562] 477,418 [231,324] [14,900,350] 11,051,297 $ 79,051,941 Revenues Taxes Real estate taxes Delinquent taxes Motor vehicle taxes General sales tax Other taxes Intergovernmental Charges for services Investment revenue Miscellaneous Total revenues Expenditures General government Public safety Public works Public health and sanitation Culture and recreation Planning and development Capital outlay Total expenditures Excess [deficiency] of revenues over [under] expenditures Other financing sources [uses] Transfers in Transfers [out] Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January 1 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, 2021 Variance with Final Budget BudQ!i!!!i!~ AmQ!.!n!s Positive Actual $ 10,521,583 298,941 1,255,152 15,314,664 5,351,559 1,144,657 4,656,662 89,874 689,766 39,322,858 4,892,999 23,139,413 5,432,764 746,880 3,733,772 [291,234] 675,363 38,329,957 992,901 5,806,300 [905,500) 4,900,800 5,893,701 12,918,477 Original $ 10,737,173 160,000 1,209,066 13,418,742 6,691,350 1,124,700 5,679,400 306,000 482,500 39,808,931 6,209,388 22,801,134 5,243,043 6,450,666 2,059,517 7,453,927 50,217,675 !10,408,744) 4,366,500 [905,500) 3,461,000 [6,947,744] 6,947,744 Final [Negative] $ 10,737,173 $ [215,590] 160,000 138,941 1,209,066 46,086 13,418,742 1,895,922 6,691,350 [1,339,791] 1,124,700 19,957 5,679,400 [1,022,738] 306,000 [216,126] 482,500 207,266 39,808,931 [486,073] 6,209,388 1,316,389 22,801,134 [338,279] 5,243,043 [189,721] [746,880] 6,450,666 2,716,894 2,059,517 2,350,751 7,453,927 6,778,564 50,217,675 11,887,718 [10,408,744] 11,401,645 4,366,500 1,439,800 [905,500] 3,461,000 1,439,800 [6,947,744] 12,841,445 6,947,744 5,970,733 Unreserved fund balance, December 31 18,812,178 ~$ ____ -.:.$ ____ -$ 18,812,178 Reconciliation to GAAP Interest receivable Accounts receivable Taxes receivable Inventory Deferred revenue Current year encumbrances GAAP Fund Balance, December 31 4,144 1,629,294 11,025,946 167,703 [10,728,135] 152,402 $ 21 ,063,532 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 , 2021 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative] Revenues Other taxes $ 1,487,353 $ 1,895,800 $ 1,895,800 $ [408,447} Total revenues Expenditures Planning and development Total expenditures Excess [deficiency] of revenues over [under] expenditures Other financing sources [uses] Transfers [out] Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January 1 1,487,353 833,830 833,830 653,523 [653,523) [653,523} 854 1,895,800 1,895,800 [408,447] 1,047,033 1,047,033 213,203 1,047,033 1,047,033 213,203 848,767 848,767 [195,244} [848,767) [848,767) 195,244 [848,767} [848,767] 195,244 853 853 1 Unreserved fund balance, December 31 Reconciliation to GAAP 854 $ 853 $ 853 $ 1 Accounts receivable 602,631 GAAP Fund Balance, December 31 $ 603,485 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, 2021 Budgeted Amounts Actual Original Final Revenues Intergovernmental $ 1,347,162 $ 1,172,550 $ 1,172,550 Miscellaneous 80,373 Total revenues 1,427,535 1,172,550 1,172,550 Expenditures Public works 388,839 486,950 486,950 Capital outlay 1,302,212 1,006,243 1,006,243 Total expenditures 1,691,051 1,493,193 1,493,193 Excess [deficiency] of revenues over [under] expenditures [263,516] [320,643] [320,643] 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] [103,516] [160,643] [160,643] Unreserved fund balance, January 1 1,928,004 1,693,383 1,693,383 Unreserved fund balance, December 31 1,824,488 $ 1,532,740 $ 1,532,740 Reconciliation to GAAP Taxes receivable 316,446 Current year encumbrances 221,003 GAAP Fund Balance, December 31 $ 2,361,937 See independent auditor's report on the financial statements. 24 Variance with Final Budget Positive [Negative] $ 174,612 80,373 254,985 98,111 [295,969] [197,858] 57,127 57,127 234,621 $ 291,748 Revenues Taxes 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 , 2021 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative) Selective sales taxes $ 9,639,452 $ 8,500,559 $ 8,500,559 $ 1,138,893 Total revenues Expenditures Capital outlay Total expenditures Excess [deficiency) of revenues over [under) expenditures Other financing sources [uses) Transfers [out] Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses) Unreserved fund balance, January 1 9,639,452 2,632,049 2,632,049 7,007,403 [2,693,350] [2,693,350] 4,314,053 4,065,778 8,500,559 5,050,500 5,050,500 3,450,059 [2,693,350) [2,693,350] 756,709 1,996,130 8,500,559 5,050,500 5,050,500 3,450,059 [2,693,350) [2,693,350] 756,709 1,996,130 1,138,893 2,418,451 2,418,451 3,557,344 3,557,344 2,069,648 Unreserved fund balance, December 31 Reconciliation to GAAP 8,379,831 $ 2,752,839 $ 2,752,839 $ 5,626,992 Current year encumbrances 1,022,597 GAAP Fund Balance, December 31 $ 9,402,428 See independent auditor's report on the financial statements. 25 CITY OF SALINA, KANSAS STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2021 Business-Type Activities: Ente!Erise Funds Total Internal Solid Waste Water and Enterprise Service Assets and deferred outflows of resources: Diseosal Sewer Sanitation Golf Course Funds Funds Current assets: Cash and investments $ 8,924,536 $ 34,471,779 $1,271,617 $ 91,749 $ 44,759,681 $5,401,983 Receivables (net of allowance for uncollectibles) Accounts 239,542 1,351,300 236,783 1,827,625 Interest 16 16 Inventory and prepaid supplies 386 967 20 179 407,146 136,375 Total current assets 9,164,094 36,210,046 1,508,400 111,928 46,994,468 5,538,358 Capital assets: Nondepreciable capital assets: Construction in progress 265 21,570,608 21,570,873 Land 682,000 1,689,334 15,000 2,386,334 Depreciable capital assets: Capital assets 13,304,495 154,979,628 2,848,648 1,310,899 172,443,670 168,234 Less: accumulated depreciation 10,780,426 65,520.383 1,713,607 892,830 78,907,246 154,325 Total capital assets 3,206,334 112,719,187 1,135,041 433,069 117,493,631 13,909 Total assets 12,370,428 148,929,233 2,643,441 544,997 164,488,099 5,552,267 Deferred outflows of resources: KPERS OPEB deferred outflows of resources 3,103 19,872 5,718 1,893 30,586 1,575 OPEB deferred outflows of resources 5,678 32,076 9,564 1,975 49,293 Pension deferred outflows of resources 106,247 517.300 111,828 87,399 822,774 36,501 Total deferred outflows of resources 115 028 569,248 127,110 91 267 902,653 38,076 Total assets and deferred outflows of resources $ 12.485.456 $ 149,498,481 $2,770,551 $ 636,264 $ 165,390,752 $5,590,343 Liabilities and deferred inflows of resources: Current liabilities Accounts payable $ 226,826 $ 163,363 $ 6,764 $ 425 $ 397,378 $ 82,621 Interest payable 35,008 500,801 535,809 Meter deposits payable 422,066 422,066 Temporary notes payable 1,611,714 1,611,714 Current portion of compensated absences payable 21,557 177,561 75,275 16,175 290,568 13,400 Current portion of accrued Claims payable 614,807 Current portion of loans payable 383,064 383,064 Current portion of general obligation bonds payable 411,176 712,047 1,123,223 Current portion of revenue bonds payable 775 000 775 000 Total current liabilities 2,306,281 3,133.902 82,039 16,600 5,538,822 710,828 Noncurrent liabilities: Compensated absences payable 26,794 220,702 93,563 20,105 361,164 16,655 Accrued claims payable 168,990 OPEB obligation 66,512 370,077 110,339 22,785 569,713 KPERS OPEB obligation 16,716 107,066 30,807 10,202 164,791 8,484 Net pension liability 307,465 1,463,705 327,703 163,112 2,261,985 105,909 Payable from restricted assets Loans payable 43,583,302 43,583,302 General obligation bonds payable 1,610,134 5,265,134 6,875,268 Revenue bonds payable 8,750,145 8,750,145 Landfill posl-<:losure care liabilities 2,332,241 2,332,241 Total noncurrent liabilities 4,359,862 59,760,131 562,412 216,204 64,898,609 300,038 Total liabilities 6,666,143 62,894,033 644,451 232,804 70,437,431 1,010,866 Deferred inflows of resources KPERS OPEB deferred inflows of resources 7,028 43,454 12,966 4,211 67,659 3,541 OPEB deferred inflows of resources 5,084 30,240 8,541 1,833 45,698 Pension deferred inflows of resources 140,535 847 264 242,548 80,110 1310457 67,325 Total deferred inflows of resources 152 647 920,958 264,055 86154 1,423,814 70,866 Total liabilities and deferred inflows of resources $ 6,818,790 $ 63,814,991 $ 908,506 $ 318,958 $ 71 ,861 .245 $1,081,732 Net position Net investment in capital assets $ 1,185,024 $ 53,250,495 $1,135,041 $ 433,069 $ 56,003,629 $ 13,909 Restricted Restricted for bond retirement 1,131,606 1,131,606 Unrestricted 4,481 642 31,301,389 727,004 [115,763) 36,394,272 4,494,702 Total net position $ 5,666,666 $ 85,683,490 $1,862,045 $ 317,306 $ 93,529,507 $4,508,611 The notes to the basic financial statements are an integral part of this statement. 26 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2021 Business-Type Activities: Entererise Funds Solid Waste Water and Diseosal Sewer Sanitation Golf Course Operating revenues Charges for services $ 3,548,636 $21,240,517 $3,422,158 $ 789,539 Miscellaneous 87,560 2,427,749 830 [100,443) Total operating revenues 3,636,196 23,668,266 3,422,988 689,096 Operating expenses General government Public works 1,617,278 8,510,657 3,502,147 Recreation 834,562 Depreciation 129,016 3,567,276 152,672 43,233 Total operating expenses 1,746,294 12,077,933 3,654,819 877,795 Operating income [loss] 1,889,902 11,590,333 [231,831 ] [188,699] Nonoperating revenues [expenses) Interest expense [89,629) [1 ,313,168] Accretion of bond premium 81,336 Total nonoperating revenues [expenses] [89,629] [1,231,832] Income [loss] before transfers 1,800,273 10,358,501 [231,831] {188,699] Transfers from [to] other funds Transfers in 153,599 Transfers [out] [2,270,914) [14,066,190) [497,350) Total transfers [2,270,914) [13,912,591] [497,350] Change in net position [470,641] [3,554,090] [729,181) [188.699) Net position, January 1 6,137,307 87,375,439 2,591,226 506,005 Prior period adjustment 1,862,141 Net position, January 1, restated 6,137,307 89,237,580 2,591 ,226 506,005 Net position, December 31 $ 5,666,666 $85,683,490 $1,862,045 $ 317,306 The notes to the basic financial statements are an integral part of this statement. 27 Total Internal Enterprise Service Funds Funds $ 29,000,850 $ 8,223,682 2,415,696 28,852 31,416,546 8.252,534 7,372,865 13,630,082 834,562 3,892,197 362 18,356,841 7,373,227 13,059,705 879,307 [1,402,797] 81 336 [1,321,461] 11,738 244 879,307 153,599 80,000 [16,834,454) [16,680,855] 80,000 [4,942,611 ) 959,307 96,609,977 3,549,304 1,862,141 98,472,118 3,549,304 $ 93,529,507 $ 4,508,611 Cash flows from operating activities Cash received from customers and users Cash paid to suppliers of goods or services Cash paid to employees Other operating receipts Net cash provided by [used in] operating activities Cash flows from capital and related financing activities [Purchase and construction] sale of capital assets Proceeds from bonds Proceeds from temporary notes Proceeds from loans Principal payments -loans Principal payments - general obligation bonds Principal payments -revenue bonds Interest paid Net cash provided by [used in] capital and related financing activities Cash flows from noncapital financing activities Transfers in Transfers [out) CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2021 Business-Type Activities: Entererise Funds Solid Waste Water and Dise2sal Sewer Sanitation Golf Course $3,507,381 $21 ,272,184 $3,405,318 $ 789,539 [777,661] [5,395,358] [2,544,053] [376,910] [612,504] [3,738,887] [983,943] [483,664] 87,560 2,427,749 830 [100,443] 2,204,776 14,565,688 (121 ,848) [171,478] [265] [239,196] [284,228] 198,957 320,000 1,611,714 10,176,440 [2,136,102] [724,078] [705,422] [816,015] (93,368] [1,220,668] 1,114,003 5,059,037 [284,228] 198,957 153,599 [2,270,914] [14,066,190] [497,350) Net cash provided by [used in] noncapital financing activities [2,270,914) [13,912,591] [497,350] Net increase [decrease] in cash and cash equivalents 1,047,865 5,712,134 [903,426] 27,479 Cash and cash equivalents, January 1 7,876,671 28,759,645 2,175,043 64270 Cash and cash equivalents, December 31 $8,924,536 $34.471?79 $\271 ,617 $ 91,749 The notes to the basic financial statements are an integral part of this statement. 28 Total Internal Enterprise Service Funds Funds $28,974,422 $7,955,984 [9,093,982] [7,103,848] [5,818,998] [276,664] 2,415,696 28,852 16,477,138 604,324 [324,732] 320,000 1,611 ,714 10,176,440 [2,136,102] [1,429,500] [816,015] [1,314,036] 6,087,769 153,599 80,000 {16,834,454] [16,680,855] 80,000 5,884,052 684,324 38,875,629 4,717,659 $44,759,681 $5,401,983 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31, 2021 Business-Type Activities: Enterprise Funds Total Internal Solid Waste Water and Enterprise Disposal Sewer Sanitation Golf Course Funds Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Operating income [loss] $ 1,889,902 $11,590,333 $ [231,831] $ [188,699] $13,059,705 Adjustments to reconcile operating income [loss] to net cash provided by (used in] operating activities Depreciation expense 129,016 3,567,276 152,672 43,233 3,892,197 [Increase] decrease in accounts receivable [41,255] [105,140] [16,840] [163,235] [Increase] decrease in inventory 3,762 7,039 10,801 [Increase] decrease in deferred outflows 22,338 136,312 36,926 18,369 213,945 Increase [decrease] in accounts payable 207,302 [346,294] [18,685] [7,098] [164,775] Increase [decrease] in retainage payable [211,528] [211,528] Increase [decrease] in accrued compensated absences 5,193 40,119 13,093 (984] 57,421 Increase [decrease] in claims payable Increase [decrease] in net pension liability [161,557] [1,034,740] [297,731] [98,593] [1,592,621] Increase [decrease] in net KPERS OPEB obligation [6,764] [9,256] 3,862 [17,818] [29,976] Increase [decrease] in net OPEB obligation 8,945 27,619 13,611 2,024 52,199 Increase [decrease] in meter deposits payable 136,807 136,807 Increase [decrease] in deferred inflows 119,768 770,418 223,075 71,049 1,184,310 Net cash provided by (used in] operating activities $ 2,204,776 $ 141565,688 $ p21,848J $ 1171.478) $16,4771138 The notes to the basic financial statements are an integral part of this statement. 29 $ $ Service Funds 879,307 362 [35,156] 11,901 36,871 [246] [267,698] [81,998] (239] 61,220 6041324 ASSETS CITY OF SALINA, KANSAS STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS December 31, 2021 Cash and investments Total assets LIABILITIES AND NET POSITION Liabilities Accounts payable Total liabilities NET POSITION Restricted for individuals, organizations and other governments The notes to the basic financial statements are an integral part of this statement. 30 $ $ Custodial Fund 1 1 ADDITIONS Miscellaneous Total additions DEDUCTIONS Contractual services Total deductions Change in net position CITY OF SALINA, KANSAS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS December 31, 2021 Net position, January 1 Net position, December 31 The notes to the basic financial statements are an integral part of this statement. 31 $ $ Custodial Fund 25,711 25,711 26,461 26,461 [750] 751 1 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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, 2021 . 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 50I(c)(3) of the Internal Revenue Code and is exempt from similar state and local taxes. Complete financial statements for each of the individual component units may be obtained at the entity's administrative offices. Salina Airport Authority 3237 Arnold Ave. Salina, KS Joint Ventures Housing Authority of the City of Salina 469S. 5th Salina, KS Salina Field House QALICB, Inc. 300 W. Ast St. Salina, KS The City of Salina also participates with Saline County in one joint venture. The City and County organized the Salina County-City Building Authority to acquire, operate and maintain facilities for the administrative offices of both governments. The primary governments each have an ongoing financial responsibility for the joint venture. Separate financial statements are available from the governing board of the joint venture. 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A. Reporting Entity (Continued) Joint Ventures {Continued) Total unencumbered cash, December 31, 2021 Total change in unencumbered cash, year ended December 31 , 2021 Total cash receipts, year ended December 31, 2021 Total cash receipts from City of Salina (Kansas Regulatory Basis) Building Authority (Audited) $ 2,021,068 92,869 1,644,624 510,668 Complete financial statements for the joint venture may be obtained at the entity's administrative office. Salina County-City Building Authority 300 West Ash Street Salina, KS B. Government-wide and fund financial statements The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges between the City's governmental and business-type activities. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational requirements of a particular program. Taxes and other items, which are not classified as program revenues, are presented as general revenues of the City. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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, and central garage 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. Former Schilling AFB Environmental Fund -To account for the funding provided by U.S. Government and expenditures necessary to abate groundwater contamination beneath the property formerly identified as Schilling Air Force Base. 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Debt Service Fund -To account for the accumulation of resources and payment of general obligation bond principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. Capital Projects Fund -To account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. SFH QalicB Fund -To account for the activities of Salina Field House Qualified Active Low-Income Community Business, Inc. as a component unit blended into the financial statements. The City reports the following major proprietary funds: Sanitation Fund -To account for the operations of the City's refuse collection service. Solid Waste Disposal Fund -To account for the activities of the City's landfill. Golf Course Fund -To account for the operations of the municipal golf course. Water and Sewer Fund -To account for the activities of the City's water and sewer operations. D. Assets, Liabilities, Fund Balance, and Net Position 1. Pooled cash and investments The City maintains a cash and investment pool that is available for use by all funds managed by the City. Each fund type's portion of this pool is displayed in the financial statements as "Cash and Investments." The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments in the Kansas Municipal Pool are carried at fair value. Cash balances from all funds are invested to the extent available in certificates of deposit and other authorized investments. Investments with maturity dates greater than three months are stated separately. Earnings from these investments, unless specifically designated, are allocated monthly to the investing fund based on the percentage of funds invested to total investments. All investments are carried at fair value. 2. Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the year are referred to as either "interfund receivables/payables" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Accounts Receivable. The City records revenues when services are provided. All receivables are shown net of an allowance for doubtful accounts. 35 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance and Net Position (Continued) 2. Receivables and Payables (Continued) Properly 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. 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. Taxes remaining due and unpaid as of 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: 36 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 4. Capital Assets (Continued) Assets Buildings Other equipment Vehicles Infrastructure 5. Compensated Absences Years 50 5 -15 6-10 30-50 It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All employees of the City, except temporary and part time employees, may accumulate sick leave at a rate of 8 or 11 hours per month depending on their work duty schedule. There is no limit on the amount of sick leave that can be accumulated. Employees with more than five years of service with the City are paid for one-third of their accumulated sick leave at their current wage scale upon termination of employment in good standing. In 2001, a limited buy back policy was instituted. All regular employees are entitled to paid vacation time. Such leave is granted each year of employment. Employees must use 50% of leave accrued each calendar year and an employee's maximum accrued vacation leave balance cannot exceed 250 hours (or 350 hours for employees working 24-hour shifts). Employees are paid for all accumulated vacation leave at their current wage scale upon termination of employment. Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability in the government fund financial statements that will pay it. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave of the business-type funds and government wide financial statements are recorded as an expense and liability of those funds as the benefits accrue to employees. A liability is recorded for accumulated rights to receive sick pay benefits that are payable upon termination of employment. The General Fund, Bicentennial Center Fund, Central Garage Fund, Sanitation Fund, Solid Waste Fund, Golf Course Fund, and Water and Sewer Fund have been used in prior years to liquidate the liability for compensated absences. 6. Temporary Notes Upon authorization for the issuance of general obligation bonds for certain improvements, Kansas law permits the temporary financing of such improvements by the issuance of temporary notes. Temporary notes issued may not exceed the aggregate amount of bonds authorized, are interest bearing and have a maturity date not later than four years from the date of issuance of such temporary notes. Temporary notes outstanding are retired from the proceeds of the sale of general obligation bonds. 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long- term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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 c~y 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: Maier Govemmenlal Funds Tourism Forrrer Other Total and Special Sales Tax Schilling AFB Debt Capital SFH Governrrental Governmental General Convention Gas Capital Em,ironmental Service Projects ~ Funds Funds Fund Balances: Nonspendable for: lni.entory $ 167,703 $ $ $ -$ -$ $ $ $ $ 167,703 Restricted for: Pubic works 2,140,934 2,140,934 Pubic health and sanitation 234 234 Culture and recreation 245,319 245,319 Planning and dei.elopment 603,485 224,980 828,465 Capital irr!)rovements 66,697,767 66,697,767 Debt payments 2,111,664 800 2,112,464 Conmitted for: Public safety 677,239 677,239 Culture and recreation 782,574 782,574 Planning and dei.elopment 1,843,459 728,371 2,571,830 Cemetery 553,053 553,053 Capital irr!)rovements 8,379,831 3,631,981 12,011,812 Assigned for: General government 152,402 152,402 Pubic safety 105,726 105,726 Pubic works Culture and recreation 237,624 237,624 Capital irr!)rovements 221 ,003 1,022,597 1,243,600 U1assigned: 20,743,427 ------[921,505) ---[136,007) 19,685,915 Total Fund Balances $21,063,532 $603,485 $2,361 ,937 ~ $66,697,767 ~ $ [921,505] ~ $7,051,894 $110,214,661 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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 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. If the City is holding a revenue neutral rate hearing, the budget timeline for adoption of the final budget has been adjusted to on or before September 20th. The City was not required to hold a revenue neutral rate hearing for this year. 39 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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 2021 budget was not amended during the year. 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, Former Schilling AFB Environmental fund, 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, North 9th 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 clerl< on the proceeding August 25. As of December 31, 2021 , the statutory limit for the City was $155,844,910, providing a debt margin of $89,020,771 . 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 3. RESTATEMENT OF EQUITY During the year ended December 31, 2021, management discovered certain errors that occurred in the prior year. The effects of these items caused a restatement to net position as follows: Net Position Water and Sewer December 31, 2020 $87,375,439 Prior Period Adjustment 1,862,141 Net Position December 31, 2020, Restated $89,237,580 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 . As of December 31, 2021, the City has the following investments: Investment Type Kansas Municipal Investment Pool Total fair value 41 Fair Value Rating $ 318,091 S&P AAAf/S1+ $ 318,091 CITY OF SALINA, KA~SAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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, 2021 the City's deposits were considered fully secured. Restricted cash is comprised of an interest reserve account (the "Interest Reserve"), and an operating 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, 2021, the balance of the Interest Reserve and Operating Reserve was $131,391 and $126,650, respectively. 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) B. Receivables Receivables as of year-end, including the applicable allowances for doubtful accounts, are as follows: Primary Government Receivables: Accounts Taxes Interest Gross receivables Less: allowance for General $ 7,464,058 11 ,025,946 4,144 18,494,148 Tourism and Special Convention Gas $ 602,631 $ - 316,446 602,631 316,446 Debt SFH Other Service QalicB Governmental Subtotal $ -$1,605,407 $ 3,244 $ 9,675,340 3,119,483 14,461 ,875 4,144 3,119,483 1,605,407 3,244 24,141 ,359 uncollectibles Total [5,834,764) [1,033] [5,835,797] $12,659,384 $ 602,631 $316,446 $3,119,483 $1,605,407 _$~_2 __ ,2_11 $18,305,562 Primary Government Receivables: Accounts Taxes Interest Gross receivables Less: allowance for uncollectibles Total Component Units Salina Airport Authority Accounts Grants Less: allowance for uncollectibles Total Salina Airport Authority Salina Housing Authority Accounts Less: allowance for uncollectibles Total Salina Housing Authority Total C. lnterfund Receivables and Payables Solid Waste Disposal Water and Sewer Sanitation $ 239,542 $2,243,162 $ 382,326 16 239,558 2,243, 162 382,326 Total $12,540,370 14,461,875 4,160 27,006,405 [891,862] [145,543] [6,873,202] $ 239,558 $1,351,300 $ 236,783 $20,133,203 $ 94,058 1,452,931 [1,500) 1,545,489 45,755 [13,870] 31 ,885 $ 1,577,374 The composition of interfund balances as of December 31, 2021 , is as follows: Fund Types General Fund Other Governmental Funds Due From Due To $11,158 $ 11,158 $ 11, 158 $ 11 , 158 The City uses interfund receivables and payables between the General Fund and Other Governmental Funds as needed when pooled cash is negative within a fund until investments mature or grant proceeds are received. All payables are cleared in less than one year. 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets Capital asset activity for the year ended December 31, 2021, was as follows: Balance Adj. Bal. Balance 12/31/2020 Adjustments 12/31/2020 Additions Retirements 12/31/2021 City governmental activities: Governmental activities: Capital assets, not being depreciated Construction in progress $ 26,221,157 $ $ 26,221,157 $ 8,718,691 $ 14,613,009 $ 20,326,839 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 226,276,624 226,276,624 15,030,407 241 ,307,031 Buildings and improvements 53,158,946 53,158,946 53,158,946 Vehicles 10,169,524 10,169,524 218,001 10,387,525 Equipmen~ furniture and foctures 7,484,442 7,484,442 403,574 2,607 7,885,409 Leasehold improvements 357 383 357,383 357 383 Total capital assets 348,314,410 348,314,410 24,370,673 14615616 358,069,467 Less accumulated depreciation for: Infrastructure 96,266,536 96,266,536 4,350,078 100,616,614 Buildings and improvements 23,940,647 23,940,647 1,313,174 25,253,821 Vehicles 7,494,122 7,494,122 576,773 8,072,695 Equipment, furniture and fixtures 5174 971 5 174,971 334,714 2,607 5,507,078 Total accumulated depreciation 132,876,276 132,876,276 6,576,739 2,607 139,450,408 Governmental activities capital assets, net s 21si438,134 $ -$ 215,438,134 $ 17,793,934 $ 14,613,009 $ 216,619,059 Business-type activities: Capital assets, not being depreciated Construction in progress $ 27,975,939 $ -$ 27,975,939 $ 2,400,534 $ 8,805,600 $ 21,570,873 Land 2,386,334 2,386,334 2,386,334 Capital assets, being depreciated Infrastructure 131,643,670 131,643,670 6,388,201 140,031,871 Buildings and improvements 22,579,936 22,579,936 284,228 22,864,164 Vehicles 3,781,267 3,781,267 3,761,267 Equipment, furniture and foctures 5,765,524 5,765,523 645 5,766,368 Total capital assets 194,132,670 194,132,669 11,073,808 8,805,600 196,400,677 Less accumulated depreciation for: Infrastructure 53,350,542 53,350,542 3,035,435 56,385,977 Buildings and improvements 14,476,597 14,476,597 423,824 14,900,421 Vehicles 2,701,833 2,701,833 194,366 2,896,199 Equipment, furniture and foctures 4,486,078 4 486 078 238,572 4,724,650 Total accumulated depreciation 75,015,050 75 015 050 3,892,197 78,907,247 Business-type activities capital assets, net $ 119,117,620 $ -$ 119,117,619 $ 7,1 61,611 $ 8,805,600 $ 117,493,630 44 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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 660,307 Public works 4,450,051 Public health 30,651 Culture and recreation 1,042,548 Planning and development 333,474 Total depreciation $ 6,576,739 Business-type Activities: Solid Waste Disposal $ 129,016 Water and Sewer 3,567,276 Sanitation 152,672 Golf Course Division 43,233 Total depreciation $ 3,892,197 E. Long-Term Debt Following is a summary of changes in long-term debt for fiscal year 2021: Balance Balance January 1, December 31, 2021 Additions Deletions ~ Go1.emmental actil.itles: General obligation bonds $ 56,587,549 $ 13,545,000 $ 10,549,900 $ 59,582,649 General obligation bond premium 2,743,432 793,345 495,408 3,041,369 Loans payable 12,640,000 12,640,000 Loans payable discount (427,021] [13,963] [413,058] OPEB liability 3,097,540 498,956 94,025 3,502,471 KPERS OPEB liability 402,677 53,298 115,737 340,238 Net pension llablllty 34,571,390 9,513,526 25,057,864 Accrued compensation 2,697,006 1,407,234 1,265,585 2,838,655 Temporary notes 7,050,000 3,647,188 7,050,000 3,647,188 Temporary note premium 66,598 66,598 Total $ 119,362,573 $ 20,011 ,619 $ 29,070,218 $ 110,303,974 Business-type actil.ities: General obligation bonds $ 8,742,451 $ 320,000 $ 1,390,100 $ 7,672,351 General obligation bond premium 365,539 39,399 326,140 Loans payable 35,926,027 10,176,440 2 ,136,101 43,966,366 Re1.enue bonds 9,615,000 750,000 6,865,000 Re1.enue bond premium 726,160 66,015 660,145 OPEB liability 517,514 80,995 28,796 569,713 KPERS OPEB llablllty 194,767 25,815 55,791 164,791 Net pension liability 3,654,606 1,592,621 2,261,985 Accrued compensation 594,311 347,989 290,566 651,732 Temporary notes 1,582,812 1,582,612 Temporary note premium 28,902 28,902 Total $ 60,536,375 $ 12,562,953 $ 6,349,391 $ 66,749,937 45 Amounts Due Within One Year $ 4,826,778 253,163 1,252,185 3,647,188 66,598 $ 10,045,912 $ 1,123,223 39,399 363,064 775,000 290,568 1,582,812 28,902 $ 4,222,968 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following is a detailed listing of the City's general obligation bonds outstanding as of December 31, 2021 : General Obligation Bonds -Prima!}'. Government Go-..ernmental Business-type Final Original Activites Activites Pureose, Series Issue Date Maturi~ Interest Rates Issue Outstanding Outstanding Internal Improvements, 2013A 2/15/2013 10/1/2028 2.60% to 3.65% $1,360,000 $ 725,000 $ Improvement and Refunding, 2015A 7/29/2015 10/1/2035 3.00% to 3.50% 6,825,000 4,795,000 Internal Improvements, 2016A 7/26/2016 10/1/2036 2.00% to 3.00% 6,570,000 5,220,000 2,097,351 Refunding, 2016B 7/26/2016 10/1/2031 2.00% to 5.00% 13,750,000 8,092,649 Internal Improvements, 2017A 7/27/2017 10/1/2037 3.00% to 3.38% 9,310,000 7,940,000 Internal Improvements, 2018A 11/27/2018 10/1/2033 3.15%to4.00% 2,090,000 1,750,000 Internal Improvements, 2019A 4/24/2019 10/1/2039 3.00% to 4.00% 11,090,000 10,440,000 Internal Improvements, 2020A 4/29/2020 10/1/2035 2.00% to 3.00% 5,210,000 3,110,000 1,605,000 Internal Improvements, 2020B 11/19/2020 10/1/2036 2.00% to 3.00% 8,450,000 3,965,000 3,650,000 Internal Improvements, 2021A 4/29/2021 10/1/2041 1.63%to4.50% 7,645,000 7,645,000 Refunding, 2021 B 9/8/2021 10/1/2034 1.15% to 2.00% 6,220,000 5,900,000 320,000 $59,582,649 $ 7,672,351 The following is a detailed listing of the City's revenue bonds outstanding as of December 31, 2021 : Revenue Bonds -Primary Government Business-type Original Activites Purpose, Series Issue Date Final Maturity Interest Rates Issue Outstanding Revenue & Refunding, 2019 9/11/2019 10/1/2031 3.00% $10,330,000 $ 8,865,000 The following is a detailed listing of the City's temporary notes outstanding as of December 31, 2021 : Temporary Notes -Primary Government Governmental Original Activites ___ P_u=r-"-po=s=e_,_, .;::_Se=r.c.,;:ie'-"s __ Issue Date Final Maturity Interest Rates Issue outstanding Internal Improvements, 2021-1 4/29/2021 5/1/2022 2.00% $5,230,000 $ 3,647,188 46 Business-type Activites Outstanding $ 1,582,812 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following is a detailed listing of the City's loans payable as of December 31, 2021: Loans Pa:)'.able -Primar:)'. GO\.ernment Governmental Business-type Original Activites Activites Pureose Issue Date Final Maturity Interest Rates Issue OutstandlnQ Outstanding Kansas Public Water Supply 2629 8/1/2014 8/1/2034 2.12% $8,562,911 $ $ 5,669,144 Kansas Public Water Supply 2917 8/15/2018 2/1/2040 2.33% 32,000,000 29,736,642 Kansas Public Water Supply 2957 7/2/2018 2/1/2040 2.33% 4,250,000 3,726,201 Kansas Public Water Supply 2997 7/7/2020 8/1/2041 1.43% 4,250,000 2,172,136 Kansas Water Pollution Control 2049 2/22/2021 9/1/2042 1.30% 31 ,500,000 1,499,577 Kansas Water Pollution Control 2050 12/11/2018 3/1/2035 2.54% 2,250,000 1,162,666 Dakotas Note A 7/27/2016 12/10/2050 1.58% 6,016,500 6,016,500 Dakotas Note B 7/27/2016 12/10/2050 1.58% 2,623,500 2,623,500 CNMC Note A .7/27/2016 12/10/2050 1.58% 2,674,000 2,674,000 CNMC Note B 7/27/2016 12/10/2050 1.58% 1,326,000 1,326,000 $121640,000 $4319661366 The following is a detailed listing of the long-term debt outstanding of the City's component unit, the Salina Airport Authority, as of December 31, 2021 : General Obligation Bonds -Component Units Original Purpose, Series Issue Date Final Maturity Interest Rates Issue Outstanding $ 430,000 9,935,000 4,735,000 555,000 Internal Improvement& Refunding, 2015A Taxable Refunding, 2017A 8/28/2015 9/1/2025 1.50% to 3.55% $3,075,000 Refunding, 2017B Refunding, 2019A Taxable Refunding, 2019B Refunding, 2021A Less: Unamortized bond premium Plus: Unamortized bond discount 7/12/2017 7/12/2017 10/10/2019 10/10/2019 8/17/2021 9/1/2030 1.61 % to 3.35% 9/1/2031 2.00% to 3.00% 9/1/2029 2.10% to 3.10% 9/1/2023 2.80% to 3.00% 9/1/2031 0.25% to 2.00% Temporary Notes -Component Units _____ P_u_r~po_se~,_S_e_r_ie_s _____ Issue Date Final Maturity Interest Rates Internal Improvements, 2020-1 9/1/2020 9/1/2023 0.48% Taxable, 2021-1 11/10/2021 9/1/2023 0.45% Lease Purchase Agreement -Component Units _______ P_u_r~po_s_e_______ Issue Date Final Maturity Interest Rates Building 824 Improvements 8/12/2020 9/1/2030 3.30% 47 10,255,000 4,835,000 675,000 3,455,000 2,345,000 Original Issue $2,100,000 3,545,000 1,615,000 2,345,000 18,163 [60,214] $19,5721949 Outstanding $ 2,100,000 3,545,000 $ 51645,000 Governmental Original Activites Issue Outstanding $ 460,000 $ 420,058 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Annual debt service requirements to maturity for general obligation bonds: General Obligation Bonds -Prima!}'. Government Year Ending Governmental Activites Business-type Activites December 31 , Principal Interest Total PrinciQal Interest Total 2022 $ 4,826,777 $ 253,163 $ 5,079,940 $1,123,222 $ 39,399 $ 1,162,621 2023 4,941,734 253,163 5,194,897 973,267 39,399 1,012,666 2024 4,870,140 253,163 5,123,303 869,860 39,399 909,259 2025 4,576,004 253,163 4,829,167 873,996 39,399 913,395 2026 4,312,044 253,163 4,565,207 437,956 15,322 453,278 2027 -2031 17,622,963 1,021,062 18,644,025 2,117,037 76,610 2,193,647 2032 -2036 14,012,987 552,510 14,565,497 1,277,013 76,610 1,353,623 2037 -2041 4,420,000 201,985 4,621,985 4,680,500 4,680,500 Total $59,582,649 $ 3,041 1372 $62,6241021 $7,672,351 $5,006,638 $121678,989 Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues: Revenue Bonds -Primar:l Government Year Ending Business-type Activites December 31 , Princi12al Interest Total 2022 $ 775,000 $ 66,015 $ 841,015 2023 795,000 66,015 861 ,015 2024 820,000 66,015 886,015 2025 845,000 66,015 911,015 2026 870,000 66,015 936,015 2027 -2031 4,760,000 330,073 5,090,073 Total $ 8,865,000 $ 660,148 $ 9,525,148 Annual debt service requirements to maturity for temporary notes -to be paid through the issuance of general obligation bonds: Year Ending December 31 , 2022 Tempora!}'. Notes -Primary Government Governmental Activites Business-type Activites Principal Interest Total Interest Total $ 3,647,188 $ 73,349 $ 3,720,537 $1,582,812 $ 31 ,832 $ 1,614,644 48 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Annual debt service requirements to maturity of the for loans payable: Year Ending December 31 , 2022 $ Total 2023 2024 2025 2026 Therafter Total 616,140 12,023,860 $12,640,000 Annual debt service requirements to maturity of the long-term debt outstanding of the City's component unit, the Salina Airport Authority, as of December 31, 2021: General Obligation Bonds -Component Units Year Ending December 31 , 2022 2023 2024 2025 2026 2027-2031 2032-2036 Total Year Ending December 31 . 2022 Governmental Activites Princigal Interest Total $ 1,670,000 $ 541,056 $ 2,211,056 1,710,000 498,754 2,208,754 1,760,000 454,540 2,214,540 1,810,000 411,120 2,221,120 1,865,000 363,633 2,228,633 9,960,000 983,284 10,943,284 840,000 49,780 889,780 $19,615,000 $ 3,302,167 $22,917,167 Temporary Notes -Component Units Governmental Activites Principal Interest Total $ -$ 22,975 $ 22,975 5,645,000 26,033 5,671,033 $ 5,645,000 $ 49,008 $ 5,694,008 Lease Purchase Agreement -Component Units Year Ending Governmental Activites December 31 , Princigal Interest Total 2022 $ 40,800 $ 13,528 $ 54,328 2023 42,157 12,171 54,328 2024 43,560 10,768 54,328 2025 45,009 9,318 54,327 2026 46,507 7,821 54,328 2027 -2030 202,025 15,287 217,311 $ 420,058 $ 68,893 $488,950 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 49 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31 , 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Loans Pat able -Prima~ Government Business-type Activites Princi12al Interest Total $ 383,064 $ 118,166 $ 501,230 391,228 110,002 501,230 399,566 101,664 501,230 408,082 93,148 501,230 416,779 84,451 501,230 3,670,424 339,422 4,009,846 $5,669,143 $ 846,853 $ 6,515,996 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 XX.II, 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, 2021 , 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 XX.II, 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, 2021 , the note balance was $2,623,500. CNMC Note A-On July 27, 2016, a $2,674,000 promissory note with a maturity date of December 10, 2050, was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest-only payments, partially in arrears and partially in advance, 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 50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) 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, 2021 , the note balance was $2,674,000. CNMC Note B -On July 27, 2016, a $1 ,326,000 promissory note with a maturity date of December 10, 2050, was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, 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, 2021, the note balance was $1 ,326,000. As of December 31 , 2021 , the principal balance of these four loans, net of $413,058 of unamortized debt issuance costs, was $12,226,942. 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, 2021, SFH QalicB earned $492,917 of rental income under the terms of the Net Lease. As of December 31, 2021, rental income of $102,281 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, 2021: Premises Leases between QalicB and City Year Ending December 31 , Lease Pa~rnent 2022 $ 130,000 2023 162,500 2024 227,500 2025 227,500 2026 650,000 2027 -2031 3,250,000 2032 -2036 3,250,000 2037 -2041 3,250,000 2042 -2046 2,925,000 Total $ 14,072,500 51 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) 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 ST AR bonds. 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, 2021, the outstanding balances for the 2018-A and 2018-B were $17,975,000 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, 2021. The future minimum lease payments for the lease are as follows: HVAC O~rating Lease Year Ending December 31 , Princi12al Interest Total 2022 $ 77,682 $16,244 $ 93,926 2023 80,391 13,536 93,927 2024 83,194 10,733 93,927 2025 86,095 7,832 93,927 2026 89,096 4,829 93,925 2027 92,202 1,722 93,924 Total $508,660 $54,896 $563,556 52 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) G. lnterfund Transfers A reconciliation of interfund transfers follows: Transfer In Transfer Out Major Funds: General $ 5,806,300 $ 905,500 Tourism and Convention 653,523 Special Gas 160,000 Sales Tax Capital 2,693,350 Schilling Capital Improvement 1,956,351 Former Schilling AFB Environ. 1,992,794 Debt Service 1,842,841 Capital Projects 11,788,154 Other governmental funds 1,409,532 190,042 So6d Waste Disposal 2,270,914 Water and Sewer 153,599 14,066,190 Sanitation 497,350 Central Garage 80,000 Total transfers $ 23,233,220 $ 23,233,220 The City uses interfund transfers to share administrative costs between funds. 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 Annual Comprehensive Financial Report, which is available on the KPERS website at www.kpers.org. 53 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) 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. 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, 2021. 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 8.87% for KPERS and 22.80% for KP&F for the year ended December 31, 2021. Member contribution rates as a percentage of eligible compensation for the fiscal year 2021 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: 54 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) • 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, 2021, 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, 2021. The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2021, the City's proportion for the Local employees group was 0.701%, which was a decrease of .066% from its proportion measured at June 30, 2020. At June 30, 2021, the City's proportion for the Police and Firemen group was 1.982%, which was a decrease of .056% from its proportion measured at June 30, 2020. Net Pension Liability. At December 31, 2021 and 2020, the City and its component units reported a liability of $28,147,530 and $39,553,871, respectively, for its total proportionate share of the net pension liability for the Local and Police and Firemen groups. Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2020, which was rolled forward to June 30, 2021 , using the following actuarial assumptions: Assumptions Price inflation 2. 75% Wage inflation 3.50% Salary increases, including wage increases 3.50% to 12.00% including inflation Long-term rate of return, net of investment e>q:Jense, and including price inflation 7.25% 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, 2020 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, 2021 are summarized in the following table: 55 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Long-Term Expected Asset Long-T§[ffi ~IIQQSi!~On Beal Ram 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 7.25%. 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. Sensitivity of the City's proportionate share of the net pension fiabifity 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 7.25%, 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 (6.25%) or 1-percentage point higher (8.25%) than the current rate: Local Police & Firemen Total 1 % Decrease (6.25%} $ 15,194,065 28,382,810 Discount Rate {7.25%} 1% Increase {8.25%} $ 9,237,058 $ 4,241,355 18 910 472 10,986,860 $ 43,576,875 $ 28,147,530 $ 15,228,215 =------------ Pension Expense. For the year ended December 31 , 2021 , the City recognized Local pension expense of $585,240 and Police and Firemen pension expense of $2,404,879, 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 $33,484 and $50,292, respectively. Deferred Outflows of Resources and Deferred lnffows of Resources. As of December 31, 2021, 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: 56 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Deferred outflows Deferred inflows Local Differences between actual and expected experience $ Net differences between projected and actual earnings on investments Changes in assumptions Changes in proportion of resources 331,937 1,655,396 86602 Tmal $ ---~ ............ -2,073,935 Police & Firemen Differences between actual and expected experience Net differences between projected and actual earnings on investments Changes in assumptions Changes in proportion Total Deferred outflows of resources $ 1,492,178 2,405,439 6,299 $ 3,903,916 of resources $ 76,143 2,986,146 1,065,862 $ 4, 1281151 Deferred inflows of resources $ 4,961,187 880,927 $ 5,842,114 Housing Authori~ Local Differences between actual and expected experience Net differences betv.een projected and actual earnings on investments Changes in assumptions Changes in proportion Total Deferred outflows of resources $ 6,549 45,761 23,624 $ 75,934 Deferred inflows of resources $ 5,042 11,785 $ 16,827 Ai rQort Authori!l'. Local Differences between actual and expected experience Net differences between projected and actual earnings on investments Changes in assufr4'.)tions Changes in proportion Tmal Deferred outfloV'iS of resources $ 20,123 100,353 34,068 $ 154,544 Deferred inflows of resources $ 4,616 181 ,025 33,137 $ 218,778 $1,922,146 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, 2022. 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 2022 $ [370,233] $ [151,613] $ [521,846] 2023 [378,369] [216,057] [594,426] 2024 [443,777] (417,715] [861,492] 2025 [888,204] [1,238,756] [2,126,960] 2026 26,367 85,941 112,308 Total $ [2,054,216] $ [1,938,200) $ [3,992,416) 57 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) A Defined Benefit Pension Plan (Continued) $42,831 and $43,030 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 , 2022. 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 Authori~ Author(t:'. Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31 . Amount Amount Total 2022 $ 10,375 $ [1,081] $ 9,294 2023 15,669 [8,824] 6,845 2024 16,180 [18,175) [1 ,995] 2025 16,263 [40,318] [24,055] 2026 620 4164 4,784 Total $ 59,107 $ [64,234] $ [5,127] B. Deferred Compensation Plan The City offers its employees a deferred compensation plan ("Plan") created in accordance with Internal Revenue Code Section 457. The Plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Plan assets are transferred to a plan agent in a custodial trust and are not available to the claims of the City's general creditors. C. Flexible Benefit Plan (I.RC. Section 125) The City Commission has adopted by resolution a salary reduction flexible benefit plan ("Plan") under Section 125 of the Internal Revenue Code. All City employees working more than 20 hours per week are eligible to participate in the Plan beginning after two full months of employment. Each participant may elect to reduce his or her salary to purchase benefits offered through the Plan. Benefits offered through the Plan include various insurance and disability benefits. D. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters and other events for which the City carries commercial insurance. No significant reductions in insurance coverage from that of the prior year have occurred. Settlements have not exceeded insurance coverage for each of the past three years. The City has established a limited risk management program for workers' compensation. The program covers all City employees. Premiums are paid into the Workers' Compensation Reserve Fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $250,000 ($350,000 for claims involving employees classified as policemen or firemen). Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Workers' Compensation Reserve Fund because it is expected to be liquidated with expendable available financial resources. Of the liability, $197,807 is considered to be due within one year. 58 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) Changes in the balances of claims liabilities during the past two years are as follows: Unpaid claims, January 1 Incurred claims (including IBNRs) Claim payments Unpaid claims, December 31 2021 2020 $ 446,495 $ 311,572 989,033 [1,068,732} 917,229 [782,306] $ 366,796 $ 446,495 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: E. Contingent Liabilities Unpaid claims, January 1 Incurred claims (including IBNRs) Claim payments Unpaid claims, December 31 2021 2020 $ 605,000 $ 489,418 4,560,880 3,056,323 [4,748,880] [2,940,741 } $ 417,000 $ 605,000 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 as of December 31, 2021. 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 $2,332,241 reported as landfill closure and postclosure care liability as of December 31, 2021, represents the cumulative amount reported to date based on the use of 28.82% of the estimated capacity of the landfill. 59 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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 $8,091,339 as the remaining estimated capacity is filled over the remaining life expectancy of 179.2 years. These amounts are based on what it would cost to perform all closure and postclosure care in 2021 . 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 received by the City during the year ended December 31, 2021 . 60 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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 , 2021. Project Authorization Exoenditures Markley-Magnolia W Se'Aer $ 5,150,000 $ 1,466,985 River Trail 2 956,072 11,312 Downtown Streetscape 12,787,597 11,669,107 Smoky Hill River Renewal 12,165,000 3,595,670 S Well Field & WTP Phase 1 27,000,000 17,947,528 Rehab Pump St 28,29/Repl 28 Face Main 550,000 Northbound 9th Street Bridge 103,768 619,026 N. 9th Street Bridge 2,000,000 12,005 Smoky Hill Greenway Trail 435,637 62,362 Chorine Bluilding 2 Roof Replacement 35,000 2019 Water Main Replacement 4,000,000 2,391,998 Magnolia Hills Estates II 1,575,240 13,785 Stone Lake Phase 2 670,166 456,485 Stone Lake Phase 3A 1,647,053 3,368 Sound Garden Oakdale Park 10,046 10,046 Wheatland Valley -Specials 5,474,790 9,000 LED Lighting replacement-Parks 18,223 WWTP Owners Rep 896,790 194,101 WWTP Improvement PH I 879,193 1,961,994 Public Safety Communication System 2,361,323 2,313,468 2021 Pavement Sealing 250,000 322,332 TPEC Improvements (Floor/HVAC) 170,426 126,961 2021 Mill and Inlay 1,000,000 835,200 2021 Major Concrete 400,000 5th Street Parking Lot 467,963 638 Bill Burke Drainage 136,849 63,246 Landfill Scale House Repairs 45,000 265 Cedar Ridge Addition #2 647,793 657 Pool Tennis Court Remodel 864,000 3,401 2021 Water Main Replacement 2,000,000 Campbell Plaza 159,632 184,399 Magnolia Road Sidewalk 25,000 Landfill Fence Project 30,000 265 TPEC Improvements (Spectra) 100,000 61 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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 2021, the City did not contribute to the plan. As of December 31, 2021, the following employees were covered by the benefit terms: Active employees 440 Retirees and covered spouses ~ Total 469 The total OPES liability of $3,615,054 was measured as of December 31, 2020 and was determined by an actuarial valuation as of December 31, 2019. The total OPES 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 Actuarial cost method Inflation Salary increases Discount rate Healthcare cost trend rates Retiree's share of benefit related costs December 31 , 2019 Entry age normal as a level percentage of payroll 2.75% 3.50% 2.12% Medical: 5.90% for 2021, 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 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. Changes in the total OPES liability are as follows: Balance 1/1/2021 Service cost Interest Benefit paid Economic/demographic gains/losses $ 3,615,054 244,531 104,082 [122,821] Changes in assumptions 231,338 Balance 12/31/2021 $ 4,072,184 62 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) I. Other Postemployment Healthcare Benefits (Continued) The following presents the total OPES liability of the City, as well as what the City's total OPES 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 (1 .12%) Total OPES Liability $ 4,473,621 Discount rate 1% increase (2.12%) (3.12%) $ 4,072,184 $3,705,558 The following presents the total OPES liability of the City, as well as what the City's total OPES 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 OPES Liability $ 3,523,416 $ 4,072,184 $4,735,426 For the year ended December 31, 2021, the City recognized OPES expense of $349,611. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2021, the City reported deferred outflows related to other postemployment benefits from the following sources: Deferred outflows Deferred inflows Changes of assulll)tions Differences between expected and actual experience Total $ $ of resources 352,953 $ of resources [122,309] [196,910] 352,953 _$ _ __._[3_19...,,2_1_9,] Amounts reported as deferred outflows of resources will be recognized in OPES expense as follows: Year ended June 30, 2022 2023 2024 2025 2026 2027+ Total J. Other Postemployment Benefits (KPERS) Deferred [Inflows] Outflows Amount $ 998 $ 998 998 998 [1,81 0] 31,552 33,734 Plan Description. The City participates in a multiple-employer defined benefit other postemployment benefit (OPES) 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 OPES, the trust does not meet the criteria in paragraph 4 of GASS 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. 63 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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-tern, 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. As of June 30, 2021, the valuation date, the following employees were covered by the benefit terms: Active employees Disabled members Total 263 3 266 Total OPEB Liability. The City and its component units reported a total KPERS OPEB liability of $526,808 as of December 31, 2021, was measured as of June 30, 2021, and was determined by an actuarial valuation as of December 31 , 2020, which was rolled forward to June 30, 2021 , using the following actuarial assumptions: Valuation date December 31 , 2020 Actuarial cost method Entry age normal Inflation 2.75% Salary increases 3.00% Discount rate (based on 20 year municipal bond rate with an a~rage rating of AA/Aa or better, obtained through the Bond Buyer General Obligation 20-Bond Municipal Index) 2.16% The discount rate was based on the bond buyer general obligation 20-bond municipal index. 64 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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 , 2020, 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, 2020, KPERS pension valuation. The changes in the total OPES liability are as follows: Total KPERS OPES Liability .Qi!y Housing Authori!ll Ai ri2ort Authori!ll Total Balance 1/1/2021 $597,444 $ 7,658 $ 13,924 $619,026 Service cost 64,709 1,670 3,797 70,176 Interest 14,404 326 392 15,122 Effect of economic/demographic gains or losses [151,608] [2,076] [4,212] [157,896] Changes in assumptions 984 290 10 1,284 Benefit payments [201904] [20,904] Balance 12/31/2021 $505,029 $ 7,868 $ 13,911 $526,808 Sensitivity of the total KPERS OPEB liability to changes in the discount rate. The following presented the total KPERS OPES 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 (1.16%) or 1-percentage-point higher (3.16%) than the current discount rate: 1% decrease Discount rate 1% increase (1 .16%) (2.16%) (3.16%) Total OPEB Liability -City $ 524,146 $ 505,029 $ 485,076 Total OPEB Liability -Housing Authority $ 7,888 $ 7,868 $ 7,773 Total OPEB Liability -Airport Authority $ 14,040 $ 13,911 $ 13,649 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 OPES 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 $ 505,029 $ 505,029 $ 505,029 Total OPEB Liability -Housing Authority $ 7,868 $ 7,868 $ 7,868 Total OPEB Liability -Airport Authority $ 13,911 $ 13,911 $ 13,911 For the year ended June 30, 2021, the City recognized OPES expense of $66,761. 65 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) J. Other Postemployment Benefits (KPERS) (Continued) Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31 , 2021, the City reported deferred outflows and inflows related to other postemployment benefits from the following sources: City Housin9 Authori~ Airport Authority Deferred Deferred Deferred Deferred Deferred Deferred Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of Resource§ Resources Resource§ R~§Qurces B~~Q!.!rs.~ R~sources Differences betv.een expected and actual experience $ 57,771 $ [202,414] $ -$ [5,573) $ -$ [10,603) Changes of assumptions 35,963 18,357) 300 (167] 803 [123] Total $ 93/34 $ [210,771) $ 300 $ [5,740) $ 803 $ [10/26) $0 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 OPES liability in the year ended December 31 , 2022. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in OPES expense as follows: K. Tax Abatements Year Ended June 30, 2022 2023 2024 2025 2026 Thereafter Total Housing Airport City Authority Authority $ [12,352] $ [718] $ [1 ,343] [12,352] [718] [1,343] [12,352] [718] [1 ,343] [12,352] [718] [1 ,343] [12,047] [718] [1,335] [55,582] [1 ,850] [3,216] $(117,037] $ [5,440] $ [9 ,923] In 2021, 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. 66 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) Ad Valorem Property Tax Abatements Abatement Company Salina Vortex Corp (facility improvements) Great Plains Mfg (facility improvements) Veris Technologies (facility addition/improvements) Twin Oaks (facility addition/improvements) Start End 2015 2024 2014 2015 2015 2023 2024 2024 ~ 2021 TaxAbated 37.5% $ 3,539 50% 50% 50% 2,800 479 651 $ 7,469 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 Downtown Total Tl F Project Plans Purpose Promote, stimulate and develop the general and economic welfare of a major commercial entertainment and tourism area Base Year Expires 2016 2036 2021 Reimbursements Sales Tax Property Tax $ - $ 306,683 ~--- $ -$ 306,683 ----- 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. 67 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 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. South 9th Street Alley Downtown Downtown Hotel North 9th Street Total Community Improvement District (CID) Rate Start Expires Purpose Assist with improvements to hotel 2.00% 3/1/2016 12/31/2037 and conference center Assist with building of family 1.00% 10/1/2019 9/30/2041 entertainment facility in downtown Assist with Revitilization of 1.00% 7/1/2019 6/30/2041 Downtown Corridor Assist with building of downtown 1.00% 10/1/2019 9/30/2041 hotel Assist with improvements to hotel 2.00% 7/1/2021 6/30/2043 and conference center 2021 Eligible Reimbursement Amount $246,989 22,166 349,418 73,722 12,156 $704 451 Neighborhood Revitalization Areas (NRA). NRAs are authorized under Kansas state statutes KS.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. 68 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) K. Tax Abatements (Continued) Erooewlf!UliiD!:llzS Name Serio Guzman William & ll/lary Warhurst Jessica A Ziegler Ryan Murphy Ra\Aey I n1Aestments LLC Lamont Outland Michelle Bunch Jermaine and Tykea Polk Mary Marshall Angela Fishburn GM/I/ Renlals LLC Donnie & Ramona Marrs TJlM, Inc. TroyValcil Timothy & Linda Rickman Yvette Gelinas Charles H Carroll Jr Trust Latisha Pierce Tanya Shiehzadeh Robert & Brenda Bums Neighborhood Revilalization Act I NRA) ~ 241 N. Front Street 714 Park Street 221 N. 2nd Street 207 N. Penn 157 N. Se1Aenth, 203 W. Ash, 205 W. Ash, 207 W . Ash & 209 W . Ash 1206 N. 7th Street 634 N. 8th Street 226 N. 2nd Street 937 N. 3rd Street 1219 N. 8th Street 809W. Ash 2035 E. Iron #300R 2035 E. Iron #213C/105R/302R/202R/205R/006R/301RA/301 RB/001 R/002R/003R/004R/005R 853 Navaho 719 E. Ash 1115 N. 8th Street 156-158 S. Sanla Fe 705 N. 2nd Street 703 N. 2nd Street 1205 N. 4th Street ~ Res Res Res Res Com Res Res Res Res Res Res Res Res Res Res Res Com Res Res Res Property Partners LLC 116 & 118 N. Sanla Fe (2nd Floor Loft Apartments) Com Phil! Hemmer 2035 E. Iron A1Aenue, Unit#203R Res AP Property Holdings, LLC 201 E. Iron Avenue Com Gregory Davis 156-158 N. 11th Street Res Micheal Money 2035 E. Iron A1Aenue, Unit #206R Res Traniesh Byrd 701 N. 2nd Street Res Mark Martin Living Trust 2035 E. Iron #104R Com Kellin & Rebecca Poland 601 Johnstown Res Jana Endsley 1321 N. 3rd Street Res Kanesha Samlton 214 W . Grand Awnue Res Maria E Padilla 810 N. 5th Street Res JK Webb Properties LLC 120 S. Sanla Fe Avenue Com Alan and Nancy Franzen 1413 Arapahoe Res Brandon Sears 900 N. 12th Street Res Sanla Fe Properties, LLC 131 N. Sanla Fe Avenue/128 S. Sanla Fe A1ienue Com Rusty A Leister Living Trust 600 N. Sanla Fe Awnue Com John & Kristin Gunn 2035 E. Iron #200BR Res Christopher Helm 608 N. 11th Street Res Christopher Helm 752 N. Broadway Com Laurie Donmyer 255 N. Columbia Res Eva Wright 1200 N. 8th Res Foley Equipment Co. 2225 N. Ohio St Com Mark Riller 2035 E. Iron #108R Res Angelica Farris 846 Choctaw Ave Res Christopher Vogel 2035 E. Iron #209R Res Christopher Helm 619 N. 5th Street Com HPSA, LLC. 501 Bhakta Court Com Jordan Bressel 2035 E. Iron #106R Res Mary C. Roth 2035 E. Iron #208R Res Ceecee lnwstrnents LLC 200 S. Santa Fe Avenue Com Greg Huston & Terry A Swearingen 1025 W Crawford Street Com Total 69 2021 Bebate PaiQ $ 366 380 263 416 2,088 526 565 633 495 501 696 6,471 25,581 695 680 531 2,393 533 566 1,024 1,834 8,124 22,492 1,270 787 533 2,445 327 984 1,248 1,243 8,416 954 346 10,172 10,438 5,747 312 11 ,944 1,552 1,122 74,096 7,167 1,190 3,786 3,294 24,911 993 5,480 1,404 8,805 $ 268,814 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2021 Note 5. OTHER INFORMATION (Continued) L. Subsequent Events On April 4, 2022, the City issued Series 2022-A general obligation internal improvement bonds in the amounts of $7,840,000. 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, 2023 the last payment on October 1, 2037. The interest rate on the bonds ranges from 2.50% to 4.00%. 70 REQUIRED SUPPLEMENTARY INFORMATION CITY OF SALINA, KANSAS REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFITS Schedule of Changes in the City's Total OPES Liability and Related Ratios Last Ten Fiscal Years* Total OPES liability 2021 2020 2019 Service cost $ 244,531 $ 231,391 $ 249,957 Interest 104,082 150,552 125,877 Benefit paid [122,821] [159,018] [157,465] Economic/demographic gains/losses [255,426] Changes in assumptions 231,338 1281228 [1861344] Net change in total OPEB liability 457,130 95,727 32,025 Total OPES liability -beginning 3,615,054 31519,327 3,4871302 Total OPES liability -ending $ 4,072,184 $ 31615,054 $ 3,519,327 Covered payroll $25,163,639 $251163,639 $25,232,129 Total OPES liability as a percentage of 16.18% 14.37% 13.95% covered-employee payroll Actuarially determined contribution $ 122,821 $ 159,018 $ 157A65 Actual contribution $ 122,821 $ 159,018 $ 157,465 Contributions as a percentage of covered payroll 0.49% 0.63% 0.62% 2018 $ 226,762 128,578 [265,000] 90,918 181,258 3,306,044 $ 3,487,302 $24,740,225 14.10% $ 265,000 $ 2651000 1.07% *data became available with the inception of GASS 75 during fiscal year 2018, therefore 10 years of data is unavailable. 71 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 OPES liability 2021 2020 2019 Service cost $ 64,709 $ 57,185 $ 52,863 Interest 14,404 19,037 22,667 Effect of economic/demographic gains or losses [151,608] 17,086 [95,243] Effect of assumptions changes or inputs 984 37,368 7,614 Benefit payments [20,904] [391627] [28,432] Net change in total OPEB liability [92,415] 91,049 [40,531] Total OPEB liability -beginning 597,444 506,395 546,926 Total OPEB liability -ending $ 505,029 $ 597,444 $ 506,395 Covered payroll $12,482,683 $14,338,983 $13,991,543 Total OPEB liability as a percentage of 4.05% 4.17% 3.62% covered-employee payroll Actuarially determined contribution $ 135,087 $ 144,746 $ 135,087 Actual contribution $ 135,087 $ 144,746 $ 135,087 Contributions as a percentage of covered payroll 1.08% 1.01% 0.97% 2018 $ 52,380 17,061 75,173 [6,574] [30,368] 107,672 439,254 $ 546,926 $13,652,194 4.01% $ 109,466 $ 109,466 0.80% *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) 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 2021 City's proportion of the net pension liability Local 0.764% 0.761% 0.811% 0.790% 0.796% 0.766% 0.701% Police & Fire 2.258% 2.180% 2.191% 2.081% 2.074% 2.038% 1.982% 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 $ 8,409,377 Police & Fire $16,395,794 $20,251,512 $20,546,882 $20,019,473 $20,993,820 $25,135,770 $18,910,472 City's covered-employee payroll Local $12,931 ,197 $13,251 ,236 $13,548,056 $13,944,989 $14,366,294 $14,948,415 $13,436,992 Police & Fire $10,161,866 $10,730,033 $10,593,419 $10,441 ,055 $10,859,219 $11 ,285,465 $10,970,505 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% 62.58% Police & Fire 161 .35% 188.74% 193.96% 191 .74% 193.33% 222.73% 172.38% 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% 81.14% Police & Fire 74.60% 69.30% 70.99% 71 .53% 71.22% 66.81% 76.09% *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 2021 Contractually required contribution Local $ 1,256,217 $ 1,243,711 $ 1,179,745 $ 1,205,334 $ 1,328,915 $ 1,156,925 $ 1,259,601 Police& Fire $ 2,527,995 $ 2,361 ,273 $ 1,986,933 $ 2,181,617 $ 2,497,473 $ 2,405,832 $ 2,563,084 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 1,259,601 Police& Fire 2,527,995 2,361,273 1,986,933 2,181,617 2,497,473 2,405,832 2,563,084 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 $14,200,661 Police & Fire $10,730,033 $10,593,419 $10,441,055 $10,859,219 $11,285,465 $10,970,505 $11 ,241,597 Contributions as a percentage of covered employee payroll Local 9.48% 9.18% 8.46% 8.39% 8.89% 8.61% 8.87% Police& Fire 23.56% 22.29% 19.03% 20.09% 22.13% 21.93% 22.80% *Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. 73 COMBINING SCHEDULES AND INDIVIDUAL FUND STATEMENTS SECTION 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. North 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 2021. 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 74 CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS -CONTINUED Federal grants fund -To account for grants received from the federal government to be used to monitor and mediate fair housing complaints. D.A.R.E. donations fund -To account for donations to the D.A.R.E. program. War memorial maintenance fund -To account for monies to be used for maintenance of the local war memorial. Arts & humanities fund -To account for revenues and expenses associated with arts and humanities activities. 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. NONMAJORPERMANENTFUNDS Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government's programs. Cemetery endowment fund -To account for amounts expended for perpetual care of the City cemetery. Interest earnings are used for cemetery maintenance. Mausoleum endowment fund -To account for amounts charged for perpetual care of the City mausoleum. Interest earnings are used for mausoleum maintenance. Tricentennial commission fund -To account for donations to be used to celebrate the nation's tricentennial in the year 2076. 75 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2021 Total Total Nonmajor Nonmajor Nonmajor Debt Special Revenue Permanent Service Funds Funds Fund ASSETS Cash and investments $ 10,236,853 $ 560,856 $ 800 Receivables Accounts 2 211 Total assets $ 10,239,064 $ 560,856 $ 800 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 193,810 $ 1,880 $ - Unearned revenue 3,551,978 Due to other funds 1,158 Total liabilities 3,746,946 1,880 Fund balances: Restricted 470,533 800 Committed 5,814,242 558,976 Assigned 343,350 Unassigned [136,007] Total fund balances 6,492,118 558,976 800 Total liabilities and fund balances $ 10,239,064 $ 560,856 $ 800 See independent auditor's report on the financial statements. 76 Total Nonmajor Governmental Funds $ 10,798,509 2,211 $ 10,800,720 $ 195,690 3,551,978 1 158 3,748,826 471,333 6,373,218 343,350 [136,007] 7,051 ,894 $ 10,800,720 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2021 Total Total Nonmajor Nonmajor Nonmajor Debt Special Revenue Permanent Service Funds Funds Fund REVENUES Taxes $ 1,765,821 $ -$ - Intergovernmental 2,239,721 Charges for services 358,102 17,547 Licenses and permits 10,300 Investment revenue 13,319 554 Donations 89,647 Miscellaneous 635,492 Total revenues 5,112,402 18,101 EXPENDITURES Current Culture and recreation 1,584,686 Public safety 312,121 Public health and sanitation 1,549,128 Planning and development 1,189,341 Miscellaneous 1,880 Debt service Interest and other charges Capital outlay 1,650,384 Total expenditures 6,285,660 1,880 Excess [deficiency] of revenues over [under] expenditures [1, 173,258] 16,221 Other financing sources [uses] Transfers in 1,409,532 Transfers [out] [190,042] Total other financing sources [uses] 1,219,490 Net change in fund balance 46,232 16,221 Fund balance -Beginning of year 6,445,886 542,755 800 Fund balance -End of year $ 6,492,118 $558,976 $ See independent auditor's report on the financial statements. 77 800 Total Nonmajor Governmental Funds $ 1,765,821 2,239,721 375,649 10,300 13,873 89,647 635,492 5,130,503 1,584,686 312,121 1,549,128 1,189,341 1,880 1,650,384 6,287,540 [1,157,037] 1,409,532 [190,042) 1,219,490 62,453 6,989,441 $ 7,051,894 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS For Iha Year Ended December 31, 2021 Business Spacial Community Sales Tax Downtown Bicentennial Improvement Neighborhood Parks & Special Development Economic TIF South Center Qi§!!ji;! em Recreation ~ Revolving Qeve!o12ment l2l!t!i.tl!1 9th CID ASSETS Cash and investments $ 652,457 $ $ 44,121 $ 549,701 $ 234 $ 186,307 101,846 $ 1,096,634 $ 50,822 Receivables Accounts 2205 Total assets $ 652.457 $ 2,205 $ 44121 $ 549 701 $ 234 $ 186,307 $ 101846 $ 1,096 634 $ 50,822 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 94 $ 535 $ $ 66,758 $ $ $ 4,491 $ $ 49,104 Unearned revenue Due to olher funds l 0~2 Total liabilities 94 1627 86,758 4491 49104 Fund balance: Reslricted 578 245,319 234 186,307 Committed 652,363 44,121 97,355 1,096,634 1,718 Assigned 237,624 Unassigned Total fund balance (deficit] 652,363 578 44121 482,943 234 186,307 97355 1 096634 1718 Total liabilities and fund balances $ 652457 $ 2,205 $ 44,121 $ 549,701 $ 234 $ 186 307 $ 101,846 $ 1,096,634 $ 50,822 Downtown Alley Downtown Q!Q Q!Q ~ $ 196,987 $ 2,131 $ 71,358 $ $ 196,987 $ 2131 $ 71358 $ $ 16,613 $ 2,126 $ 10,706 $ 16,613 2,126 10,706 180,374 3 60,652 180,374 60652 $ 196,987 $ 2,131 $ 71 ,358 $ North 9th STAR Bonds 9ll. ~ 12,156 $ 2,000,000 $ 12 156 $ 2000,000 $ 12,156 $ $ 12,156 2,000,000 2,000,000 State "2rD 217,883 217,883 217,883 217 883 911 Communications $ $ $ 475,880 475,880 20,697 20697 349,457 105,726 455,183 $ $ $ 12156 $ 2000,000 $ 217,883 $ 475 880 $ See Independent auditofs report on the financial statements. 78 Kenwood Special Cove Law Police ~ l;QfQ!Scemeal Grants 65,371 s 82 $ 3,479 65 371 $ 82 $ 3479 7,403 $ s 7,403 57,968 62 3,479 57 968 82 3479 65 371 $ 82 ~$ ___ 3~,4~7~9 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2021 Police War Federal Department Animal Federal DARE Memorial Arts& CARE Federal Homeowners' Private Shelter ~ Donations Mainl§:neaee Humanities ~ EQl::fe:ill:!re F1,n:W~ Assistance ~ ~ ASSETS Cash and investments $ 3,416,037 $ 31,887 $ 30,873 $ 151,402 $ 26,141 $ 99 $ 20,595 $ 11,954 $ 550,866 Receivables Accounts 6 Total assets $ 3,416,037 $ 31887 $ 30 873 $ 151,408 $ 26,141 $ 99 $ 20595 $ 11 954 $ 550.866 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ $ $ $ $ $ s $ $ 577 Unearned revenue 3,551,978 Due to other funds Total liabilities 3,551,978 577 Fund balance: Restricted 26,141 11,954 Committed 31,887 30,873 151,408 99 20,595 550,289 Assigned Unassigned [135,941) Total fund balance (deficit] [135,941) 31887 30873 151408 26,141 99 20 595 11954 550.289 Total liabilities and fund balances $ 3,416,037 $ 31,887 $ 30873 $ 151408 $ 26141 $ 99 $ 20,595 $ 11,954 $ 550866 Special Court Police Assessments Bond and Investigation ~ Restitution ~ s 116,682 $ 26,840 $ 3,385 $ 116682 $ 26840 $ 3385 $ $ 116,682 26,840 3,385 118 682 26,840 3 385 $ 116682 $ 26840 $ 3385 Beechcraft DTF DTF Remediation Citizenship ~ ~ Settlement $ 44,081 $ 29,704 $ 47,723 $ $ 44,081 $ 29,704 $ 47723 $ $ $ 2,548 $ $ 66 2,548 66 44,081 27,156 47,723 l66J 44081 27156 47,723 (66j $ 44,081 $ 29,704 $ 47723 $ See independent audlto~s report on the financial statements. 79 Bail Bond ~ I2l!!l§. $ 1,135 $ 10,236,853 2,211 $ 1135 $ 10,239,064 $ $ 193,810 3,551,978 1158 3 746 946 470,533 1,135 5,814,242 343,350 1136 OOZJ 1,135 6 492 118 $ 1135 $ 10 239 064 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For !he Year Ended December 31, 2021 Business Special Community Sales Tax Downtown Bicentennial lmpruvemenl Neighborhood Parks & Special Development Economic TIF South Center District ~ Recreation Alcohol ~ Develoument ~ filh.QQ Revenues Taxes $ $ -$ $ $ $ $ 391,195 $ 701,203 $ 239,914 Intergovernmental 227,127 227,127 Charges for services 94,726 Licenses and pennits 10,300 Investment revenue 1,224 21 Donations Miscellaneous 366,192 12116 ---Total Revenues 366,192 94,726 10300 227,127 227,127 391,195 702,427 252 051 Expenditures Cunrent Culture and recreation 727,152 Public safely Public health and sanitation 227,127 Planning and development 108,452 315,326 252,030 Capital ouUay 222,567 1,009,526 Total Expenditures 727,152 108,452 222,567 227,127 1,009,526 315,326 252,030 Excess [deficiency] of revenues over [under) expenditures [360,960) [13,726) 10,300 ~ [618,331) 387,101 21 Other financing sources [uses] Transfers in 695,682 Transfers [out] Total other financing sources (uses] 695 682 ------ Net change in fund balance 334,722 [13,726) 10,300 4,560 [618,331] 387,101 21 Fund balance, beginning of year 317 641 14,304 33,821 478,383 ~ 186 307 715,686 709,533 1,697 Fund balance, end of year $ 652,363 $ 578 $ 44,121 ~ ~ $ 186,307 $ 97,355 $ 1,096,634 $ 1 718 Downtown Alley Downtown QQ CID Hotet CID $ 332,345 $ 21,324 $ 67,436 $ 291 2 47 332,636 21,326 67,483 438,826 25,065 25,550 438,826 25,065 25,550 [106,190] [3,739] 41,933 [106,190] [3,739] 41,933 286,564 3,742 18,719 $ 180,374 $ 3 $ 60,652 $ North 9th STAR Bonds State 911 ~ Subprojects Grants Communications 12,404 $ $ $ 246,390 403,087 459 174,608 12,404 174 608 246,390 403 546 290,355 12,404 174 608 35,000 12,404 174,608 35,000 290,355 211,390 113,191 211,390 113,191 2,000,000 6,493 341,992 $ 2,0001000 $ 217,883 $ 455,183 See Independent audito~s report on the financial statements. 80 Kenwood Special Cove Law Police Capital Enforcement Grants $ -$ $ 202,772 202,772 [202,772] 68,350 68,3/;!Q [134,422] 192,390 82 3,479 $ 571968 $ 82 $ 3479 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2021 Police War Federal Department Federal DARE Memorial Arts & CARE Federal Homeowners' Private Grants Donations Maia!~~□ce Humanities Grant E2cf~iture Funds Assistance Grants Revenues Taxes $ $ $ -$ $ $ $ $ Intergovernmental 1,135,990 Charges for services 263,376 Licenses and permits Investment revenue 30 Donations Miscellaneous 30,369 1,554 10,000 Total Revenues 1,135,990 30,369 30 263,376 1,554 10,000 Expenditures Current Culture and recreation 857,534 Public safety Public health and sanitation 1,223,502 Planning and development 11,688 Capital outlay Total Expenditures 1,223,502 11,688 857 534 Excess [deficiency] of revenues over [under) expenditures [87,512) 18,681 30 (594,158) 1,554 10,000 Other financing sources [uses] Transfers In 645,500 Transfers [out] Total other financing sources [uses] ---645 500 ---- Net change in fund balance [87,512] 18,681 30 51,342 1,554 10,000 Fund balance, beginning of year [48,429) 13,206 30.843 100,066 ~ 99 19041 1,954 Fund balance, end of year $ [135,941) !...21fil $ 30873 $ 151,408 $ 26,141 $ 99 $ 20,595 $ 11,954 Animal Special Court Shelter Assessments Bond and Donations Escrow Restitution $ $ $ 89,647 89,647 4,554 98,499 98,499 4,554 !8,852) (4,554) [8,852] [4,554] 559,141 116,682 31,394 $ 550,289 $ 116,682 $ 26,840 Police Investigation DTF DTF ~ Citizenship .Ls! ~ $ $ $ $ 11,235 34,592 6,060 11,235 34,592 6,060 17,212 5,911 5,911 17 212 5,324 17,380 6060 5,324 17,380 6,060 3,384 38,757 9776 41,663 $ 3,385 $ 44,081 $ 27,156 $ 47,723 See independent audltofs report on the financial statements. 81 Beechcraft Bail Remediation Bond Settlement ~ Totals s -$ $ 1,765,821 2,239,721 358,102 10,300 10 13,319 89,647 635,492 10 5,112,402 1,584,686 312,121 1,549,128 1,189,341 1,650,384 6,285,660 10 11 '173,258] 1,409,532 j190,042) [190,042) (190,0421 1219490 [190,032] 46,232 189,966 1,135 6,445,886 $ 166) $ 1,135 $ 6,492,118 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR PERMANENT FUNDS December 31, 2021 Cemetery Mausoleum Tricentennial ASSETS Endowment Endowment Commission Cash and investments $ 552,860 $ 2,073 $ 5,923 Total assets $ 552,860 $ 2,073 $ 5,923 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 1,880 $ -$ - Total liabilities 1,880 Fund balances Committed 550,980 2,073 5,923 Total liabilities and fund balances $ 552,860 $ 2,073 $ 5,923 See independent auditor's report on the financial statements. 82 Total $ 560,856 $ 560,856 $ 1,880 1,880 558,976 $ 560,856 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR PERMANENT FUNDS For the Year Ended December 31 , 2021 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Revenues Charges for services $ 17,547 $ -$ Investment revenue 546 2 Total revenues 18,093 2 Expenditures Miscellaneous 1,880 Total expenditures 1,880 Net change in fund balance 16,213 2 Fund balances -beginning of year 534,767 2,071 Fund balances -end of year $ 550,980 $ 2,073 $ See independent auditor's report on the financial statements. 83 - 6 6 6 5,917 5,923 Total $ 17,547 554 18,101 1,880 1,880 16,221 542,755 $ 558,976 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, 2021 Budgeted Amounts Actual Original Final Revenues Miscellaneous $ 366,192 $ 828,674 $ 828,674 Total revenues 366,192 828,674 828,674 Expenditures Culture and recreation 727,152 740,000 740,000 Total expenditures 727,152 740,000 740,000 Excess [deficiency] of revenues over [under] expenditures [360,960] 88,674 88,674 Other financing sources [uses] Transfers in 695,682 828,674 Total other financing sources [uses] 695,682 828,674 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 334,722 88,674 917,348 Unreserved fund balance, January 1 317,641 137,177 Unreserved fund balance/GAAP fund balance December 31 $ 652,363 $ 88,674 $ 1,054,525 See independent auditor's report on the financial statements. 84 Variance with Final Budget Positive [Negative] $ [462,482] [462,482] 12,848 12,848 [449,634] {132,992] [132,992] [582,626] 180,464 $ [402,162) 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 , 2021 Budgeted Amounts Actual Original Revenues Charges for services $ 95,808 $ 90,500 $ Total revenues 95,808 90,500 Expenditures Planning and development 108,452 90,500 Total expenditures 108,452 90,500 Excess [deficiency] of revenues over [under] expenditures [12,644] Unreserved fund balance, January 1 11,017 4,461 Unreserved fund balance, December 31 [1,627] $ 4,461 $ Reconciliation to GAAP Accounts receivable 2,205 GAAP Fund Balance, December 31 $ 578 See independent auditor's report on the financial statements. 85 Final 90,500 90,500 90,500 90,500 4,461 4461 Variance with Final Budget Positive [N~ative] $ 5,308 5,308 [17,952] [17,952] [12,644] 6,556 $ [6,088] 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 , 2021 Budgeted Amounts Actual Original Revenues Licenses and permits $ 10,300 $ 3,000 $ Total revenues 10,300 3,000 Expenditures Capital outlay 10,000 Total expenditures 10,000 Excess [deficiency] of revenues over [under] expenditures 10,300 [7,000] Unreserved fund balance, January 1 33,821 21 ,751 Unreserved fund balance/GAAP fund balance December 31 $ 44,121 $ 14,751 $ See independent auditor's report on the financial statements. 86 Final 4,500 4,500 10,000 10,000 [5,500] 21 ,751 16,251 Variance with Final Budget Positive [Negative] $ 5,800 5,800 10,000 10,000 15,800 12,070 $ 27,870 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, 2021 Budgeted Amounts Actual Original Revenues Intergovernmental $ 227,127 $ 227,300 $ Total revenues 227,127 227,300 Expenditures Capital outlay 447,581 251,000 Total expenditures 447,581 251 ,000 Excess [deficiency] of revenues over [under] expenditures [220,454] [23,700] Unreserved fund balance, January 1 465,773 352,706 Unreserved fund balance, December 31 245,319 $ 329,006 $ Reconciliation to GAAP Current year encumbrances 237,624 GAAP Fund Balance, December 31 $ 482,943 See independent auditor's report on the financial statements. 87 Final 227,300 227,300 251,000 251 ,000 [23,700] 352,706 329,006 Variance with Final Budget Positive [Negative] $ [173] [173] [196,581) [196,581 ] [196,754] 113,067 $ [83,687] CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GMP BASIS) SPECIAL ALCOHOL FUND For the Year Ended December 31, 2021 Budgeted Amounts Actual Original Revenues Intergovernmental $ 227,127 $ 235,000 $ Total revenues 227,127 235,000 Expenditures Public health and sanitation 227,127 235,000 Total expenditures 227,127 235,000 Excess [deficiency] of revenues over [under] expenditures Unreserved fund balance, January 1 234 234 Unreserved fund balance/GMP fund balance December 31 $ 234 $ 234 $ See independent auditor's report on the financial statements. 88 Final 235,000 235,000 235,000 235,000 234 234 Variance with Final Budget Positive [Negative] $ [7,873] [7,873] 7,873 7,873 $ Revenues Taxes Miscellaneous Total revenues Expenditures Capital outlay Total expenditures CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GMP BASIS) SALES TAX ECONOMIC DEVELOPMENT FUND For the Year Ended December 31, 2021 Budgeted Amounts Actual Original Final $ 391,195 $ 338,228 $ 344,976 2,000 391,195 340,228 344,976 1,009,526 375,000 370,000 1,009,526 375,000 370,000 Excess [deficiency] of revenues over [under] expenditures [618,331) [34,772] Unreserved fund balance, January 1 715,686 673,791 Unreserved fund balance/GMP fund balance December 31 $ 97,355 $ 639,019 $ See independent auditor's report on the financial statements. 89 [25,024] 673,791 648,767 Variance with Final Budget Positive [Negative] $ 46,219 46,219 [639,526] [639,526] [593,307] 41 ,895 $ 1551 ,412) CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) ARTS & HUMANITIES FUND Revenues Charges for services Miscellaneous Total revenues Expenditures Culture and recreation Total expenditures Excess [deficiency] of revenues over [under] expenditures Other financing sources [uses] Transfers in Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January 1 For the Year Ended December 31, 2021 $ Actual 263,376 263,376 857,534 857,534 [594,158] 645,500 645,500 51,342 100,066 $ Budgeted Amounts Original 324,600 78,000 402,600 906,099 906,099 [503,499) 645,500 645,500 142,001 29,300 $ Final 324,600 78,000 402,600 906,099 906,099 (503,499] 645,500 645,500 142,001 29,300 Variance with Final Budget $ Positive [Negative] [61,224] [78,000) [139,224) 48,565 48,565 [90,659] [90,659] 70,766 Unreserved fund balance/GAAP fund balance December 31 $ 151,408 $ 171,301 $ 171 ,301 _$_...,[_19 ... ,8;;.;;9~3] 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, 2021 Budgeted Amounts Actual Original Revenues Taxes Real estate taxes $ 2,978,243 $ 3,342,920 Delinquent taxes 86,458 40,000 Motor vehicle taxes 374,103 359,534 Special assessments 1,405,148 1,328,500 Miscellaneous 1,744,792 Total revenues 4,843,952 6,815,746 Expenditures Debt Service Principal retirement 10,549,900 2,935,000 Interest and other charges 1,917,407 1,750,000 Special assessments 1,336,700 Miscellaneous 2,420,000 Total expenditures 12,467,307 8,441,700 Excess [deficiency] of revenues over [under] expenditures [7,623,355) [1,625,954] Other financing sources [uses] Transfers in 1,842,841 1,625,000 Bond proceeds 6,167,545 Total other financing sources [uses] 8,010,386 1,625,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 387,031 [954) Unreserved fund balance, January 1 1,665,599 4,127,073 Unreserved fund balance, December 31 2,052,630 $ 4,126,119 Reconciliation to GAAP Taxes receivable 3,119,483 Deferred revenue [3,060,449) GAAP Fund Balance, December 31 $ 2,111,664 See independent auditor's report on the financial statements. 91 Final $ 3,342,920 40,000 359,534 1,328,500 1,744,792 6,815?46 2,935,000 1,750,000 1,336,700 2,420,000 8,441 ,700 [1,625,954] 1,625,000 1,625,000 [954] 4,127,073 $ 4,126,119 Variance with Final Budget Positive [Neqativ~] $ [364,677] 46,458 14,569 76,648 [1,744,792] [1,971,794] [7,614,900] [167,407] 1,336,700 2,420,000 [4,025,607] [5,997,401) 217,841 6,167,545 6,385,386 387,985 [2,461,474) $ [2,073,489] CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GMP BASIS) SOLID WASTE DISPOSAL FUND For the Year Ended December 31, 2021 Budgeted Amount~ Actual Original Revenues Charges for services $ 3,507,381 $ 3,066,100 Miscellaneous 63,483 7,300 Total revenues 3,570,864 3,073,400 Expenditures Public works 1,967,405 2,409,123 Total expenditures 1,967,405 2,409,123 Excess [deficiency] of revenues over [under] expenditures 1,603,459 664 277 Other financing sources [uses] Transfers [out] [659,200] [615,675] Total other financing sources [uses] [659,200] [615,675] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 944,259 48,602 Unreserved fund balance, January 1 4,591 ,225 4,435,512 Unreserved fund balance, December 31 $ 5,5351484 $ 4,484,114 See independent auditor's report on the financial statements. 92 Final $ 3,066,100 7 300 3,073,400 2,409,123 2,409,123 664 277 [615,675} [615,675} 48,602 4,435,512 $ 414841114 Variance with Final Budget Positive [Negative] $ 441 ,281 56183 497 464 441 718 441 718 939,182 [43,525} [43,525] 895,657 155,713 $ 1,051 ,370 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, 2021 Budgeted Amounts Actual Original Revenues Charges for services $ 20,071,807 $ 19,785,400 Investment revenue 179,300 Miscellaneous 4,470 4,000 Total revenues 20,076,277 19,968,700 Expenditures Public works 8,381 ,112 14,641,296 Total expenditures 8,381,112 14,641,296 Excess [deficiency] of revenues over [under] expenditures 11,695,165 5,327,404 Other financing sources [uses] Transfers in 153,599 [144,400) Transfers [out] [8,201,769] [5,964,717) Total other financing sources [uses] [8,048,170] [6,109,117] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 3,646,995 [781,713] Unreserved fund balances, January 1 16,682,846 13,673,636 Unreserved fund balances, December 31 $ 20,329,841 $ 12,891,923 See independent audito~s report on the financial statements. 93 Final $ 19,785,400 179,300 4,000 19,968,700 14,641,296 14,641,296 5,327,404 [144,400] [5,964,717] [6,109,117] [781,713] 13,673,636 $ 12,8911923 Variance with Final Budget Positive [Negative] $ 286,407 [179,300] 470 107,577 6,260,184 6,260,184 6,367,761 297,999 [2,237,052] [1,939,053] 4,428,708 3,009,210 $ 7,437,918 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, 2021 Budgeted Amounts Actual Original Final Revenues Charges for services $ 3,407,884 $ 3,228,400 $ 3,228,400 Miscellaneous 830 Total revenues 3,408,714 3,228,400 3,228,400 Expenditures Public works 4,091,836 4,171 ,267 4,171,267 Total expenditures 4,091,836 4,171,267 4,171,267 Excess [deficiency] of revenues over [under] expenditures [683,122] [942,867) [942,867] Other financing sources [uses] Transfers [out] [497,350] [417,350] [417,350] Total other financing sources [uses] [497,350) [417,350] [417,350] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [1,180,472] [1,360,217] [1,360,217] Unreserved fund balance, January 1 2,149,592 1,050,423 Unreserved fund balances, December 31 $ 969,120 $ [1,360,217) $ [309,794) See independent auditor's report on the financial statements. 94 Variance with Final Budget Positive [Negative] $ 179,484 830 180,314 79,431 79,431 259,745 [80,000] [80,000] 179,745 1,099,169 $ 11278,914 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, 2021 Budgeted Amounts Actual Original Revenues Charges for services $ 789,538 $ 870,100 $ Investment revenue 400 Miscellaneous 98,514 Total revenues 888,052 870,500 Expenditures Recreation 863,437 858,770 Total expenditures 863,437 858,770 Excess [deficiency] of revenues over [under] expenditures 24,615 11 ,730 Other financing sources [uses] Transfers in 100,000 [5,800] Total other financing sources [uses] 100,000 [5,800] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 124,615 5,930 Unreserved fund balance, January 1 48,087 33,488 Unreserved fund balances, December 31 $ 172,702 $ 39,418 $ See independent auditor's report on the financial statements. 95 Final 870,100 400 870,500 858,770 858,770 11,730 11 ,730 33,488 45,218 Variance with Final Budget Positive [Negative] $ [80,562] [400] 98,514 17,552 [4,667] [4,667] 12,885 100,000 100,000 112,885 14,599 $ 127,484 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, 2021 Budgeted Amounts Actual Original Revenues Charges for services $ 250,000 $ 250,000 $ Miscellaneous 1,279 Total revenues 251,279 250,000 Expenditures General government 322,088 430,418 Total expenditures 322,088 430,418 Excess [deficiency] of revenues over [under] expenditures [70,809] [180,418] Unreserved fund balance, January 1 1,142,019 958,952 Unreserved fund balances, December 31 $ 1,071,210 $ 778,534 $ See independent auditor's report on the financial statements. 96 Final 250,000 250,000 430,418 430,418 [180,418] 958,952 778,534 Variance with Final Budget Positive [Negative] $ 1 279 1,279 108,330 108,330 109,609 183,067 $ 292,676 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 , 2021 Budgeted Amounts Actual Original Final Revenues Charges for services $ 6,428,331 $ 7,268,999 $ 7,268,999 Miscellaneous 24,298 49,500 49,500 Total revenues 6,452,629 7,318,499 7,318,499 Expenditures General government 5,815,054 7,151,300 7,151 ,300 Total expenditures 5,815,054 7,151 ,300 7,151,300 Excess [deficiency] of revenues over [under] expenditures 637,575 167,199 167,199 Unreserved fund balance, January 1 3,216,150 2,922,027 2,922,027 Unreserved fund balances, December 31 $ 3,853,725 $ 3,089,226 $ 3,089,226 See independent auditor's report on the financial statements. 97 Variance with Final Budget Positive [N~ative] $ [840,668] [25,202] [865,870) 1,336,246 1,336,246 470,376 294,123 $ 764,499 Revenues CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) CENTRAL GARAGE FUND For the Year Ended December 31, 2021 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative) Charges for services Miscellaneous $ 1,545,351 $ 1,434,400 $ 1,434,400 $ 3,276 110,951 3,276 Total revenues Expenditures General government Total expenditures Excess [deficiency) of revenues over [under) expenditures Other financing sources [uses) Transfers in Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January 1 1,548,627 1,547,939 1,547,939 688 80,000 80,000 80,688 313,738 1,434,400 1,500,286 1,500,286 [65,886) 80,000 80,000 14,114 189,656 1,434,400 1,500,286 1,500,286 [65,886] 80,000 80,000 14,114 189,656 114,227 [47,653] [47,653] 66,574 66,574 124,082 Unreserved fund balance, December 31 $ 394,426 $ 203,770 $ 203,770 $ 190,656 See independent auditor's report on the financial statements. 98 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one agency to other departments or agencies of the government and to other governmental units on a cost reimbursement basis. Workers' compensation reserve fund -To account for the costs of providing a partially self-insured workers' compensation plan and for accumulating the necessary reserve amounts. Health insurance fund -To account for the costs of providing a partially self-insured health insurance and for accumulating the necessary reserve amounts. Central garage fund -To account for the accumulation and allocation for costs associated with the City's centralized vehicle repair shop. 99 CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31 , 2021 Workers' Compensation Health ASSETS Reserve Insurance Current assets: Cash and investments $ 1,071,210 $3,853,726 Inventory and prepaid supplies Total current assets 11071,210 3,853,726 Capital assets: Capital assets Less: accumulated depreciation Total capital assets Total assets 1,071,210 3,853,726 Deferred outflows of resources: KPERS OPEB deferred outflows of resources Pension deferred outflows of resources Total deferred outflows of resources Total assets and deferred outflows of resources $ 1,071,210 $3,853,726 Liabilities: Current liabilities (payable from current assets): Accounts payable $ -$ - Current portion of compensated absences payable Current portion of accrued claims payable 197,807 417,000 Total current liabilities (payable from current assets) 197,807 417,000 Noncurrent liabilities: Compensated absences payable Accrued claims payable 168,990 Net KPERS OPEB obligation Net pension liability Total noncurrent liabilities 168,990 Total liabilities 366?97 4171000 Deferred inflows of resources KPERS OPEB deferred inflows of resources Pension deferred inflows of resources Total deferred inflows of resources Total liabilities and deferred inflows of resources $ 366,797 $ 417,000 Net Position Invested in capital assets, net of related debt $ -$ - Unrestricted 704,413 3,436,726 Total net position $ 704,413 $3,436,726 See independent auditor's report on the financial statements. 100 Total Internal Central Service Garage Funds $477,047 $5,401,983 136,375 1361375 613,422 5,538,358 168,234 168,234 1541325 154,325 13,909 131909 627,331 5,552,267 1,575 1,575 36,501 36,501 38,076 38,076 $665.407 $5,590,343 $ 82,621 $ 82,621 13,400 13,400 614,807 96,021 710,828 16,655 16,655 168,990 8,484 8,484 105,909 105,909 131,048 300,038 227,069 1,010,866 3,541 3,541 67,325 67,325 70,866 70,866 $297,935 $1,081,732 $ 13,909 $ 13,909 3531563 4,494,702 $367.472 $4,508,611 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUND For the Year Ended December 31, 2021 Workers' Compensation Health Central Reserve Insurance Garage Operating revenues Charges for services $ 250,000 $ 6,428,331 $ 1,545,351 Miscellaneous 1,279 241298 3,275 Total operating revenues 251 ,279 6,452,629 1,548,626 Operating expenses General government 242,390 5,627,054 1,503,421 Depreciation 362 Total operating expenses 242,390 5,627,054 1,503,783 Income [loss] before transfers 8,889 825,575 44,843 Transfers from [to] other funds Transfers in 80,000 Total transfers 80,000 Change in net position 8,889 825,575 124,843 Net position, January 1 695,524 2,611,151 242,629 Net position, December 31 $ 704,413 $ 3,436,726 $ 367,472 See independent auditor's report on the financial statements. 101 Total Internal Service Funds $ 8,223,682 28,852 8,252,534 7,372,865 362 7,373,227 879,307 80,000 80,000 959,307 3,549,304 $ 4,508,611 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2021 Workers' Compensation Health Reserve Insurance Cash flows from operating activities Cash received from customers and users $ 170,302 $6,240,331 Cash paid to suppliers of goods or services [242,390] [5,627,154] Cash paid to employees Other operating receipts 1,279 24,298 Net cash provided by [used in] operating activities [70,809] 637,475 Cash flows from noncapital financing activities Transfers in Net cash provided by [used in] noncapital financing activities Net increase [decrease] in cash and cash equivalents [70,809] 637,475 Cash and cash equivalents, January 1 1,142,019 3,216,251 Cash and cash equivalents, December 31 $ 1,071,210 $3,853,726 See independent auditor's report on the financial statements. 102 Total Internal Central Service Garage Funds $1,545,351 $7,955,984 [1,234,304] [7,103,848] [276,664] [276,664] 3,275 28,852 37,658 604,324 80,000 80,000 80,000 80,000 117,658 684,324 359,389 4,717,659 $ 477,047 $5,401,983 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS (Continued) For the Year Ended December 31, 2021 Reconciliation of operating [loss) income to net cash provided by [used in] operating activities Workers' Compensation Health Reserve Insurance Central Garage Total Internal Service Funds Operating income [loss) $ 8,889 $ 825,575 $ 44,843 $ 879,307 Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense [Increase] decrease in inventory [Increase] decrease in deferred outflows Increase [decrease] in accounts payable Increase [decrease) in accrued compensated absences Increase [decrease] in net pension liability Increase [decrease] in KPERS OPEB liability Increase [decrease] in claims payable Increase [decrease] in deferred inflows [79,698] [100] [188,000] 362 [35,156) 11,901 36,971 [246) [81,998) [239] 61,220 362 [35,156] 11,901 36,871 [246] [81,998] [239] [267,698) 61,220 Net cash provided by [used in] operating activities $ [70,809] $ 637,475 $ 37,658 $ 604,324 See independent auditor's report on the financial statements. 103 STATISTICAL SECTION Schedule 1 City of Salina, Kansas Net Position by Component Last Ten Fiscal Years (aocrual basis of accounting) (in OOO's) Fiscal Year Wl ~ 2.Q.H 2015 .w.§. 2Q1I 2018 ~ 2020 2021 Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Governmental activities Net investment in capital assets $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% $ 143,768 64% Restlicted 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% 69,368 31% Unrestricted ____Ml! 5% ----2!m. 9% ~ 9% (24,922) -23% ~ -9% _____@,m) -7% (13,759) -10% (14,839) -11% (1,744) -1% 9,997 4% Total governmental activities net position $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% $ 223,133 100% Business-type activities Net investment in capital assets $ 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% $ 56,004 60% Restricted 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% 1,132 1% Unrestricted 21450 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% 36,394 39% ----Total business-type activities net position $ 73,860 100% ~ 100% $ 82 778 100% $ 85,229 100% $ 87,560 100% $ 89,083 100% $ 90,383 100% $ 93,552 100% $ 96,610 100% $ 93,530 100% Primary government Net investment in capital assets $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% $ 199,772 63% Restricted 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% 70,500 22% Unrestricted 26,961 14% 29,422 14% 30,959 15% ~ -5% ----1.W§. 6% 16,023 8% 12,744 6% 14044 6% ~ 12% 46,391 15% Total primary government net position $193,382 100% $205,873 100% $210,658 100% $191,932 100% $ 203,428 100% $ 212,784 100% $223,835 100% $231,910 100% ~ 100% $ 316,663 100% Source: City of Salina Annual Comprehensive Financial Reports, 2012 -2021 104 Expenses Governmental activities: General government Public safety Public works Pubfic health and sanitaUon Culture and recreation Planning and development Interest on long term debt Total governmental activities expenses Business-type activities: Solid waste disposal Water and sewer SaMation Go~course Total business-type activities expenses Total primary government expenses Program Revenues Governmental activities: Charges for services General government Public safety Publicwor1<s Public health and sanitation Culture and recreation Planning and development Operating grants and conUbutions Capital grants and contributions Total governmental activities program revenues Business-type activities: Charges for services Solid waste disposal Water and sewer Sanitation Go[course Capital grants and contributions Total business-type activities program revenues Total primary government program revenues Net (Expense) Revenue Governmental activities Business-type activities Total primary government net expense Schedule2 City of Salina, Kansas Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (in OOO's) Fiscal Year 2012 2/ill 2014 ZQ.1.§ 2016 2017 2018 2019 ~ mi $ 11,278 $ 10,978 $ 12,175 $ 10,743 $ 9,188 $ 9,780 $ 12,013 $ 10,866 $ 10,395 $ 16,098 19,066 19,649 20,208 21,084 22,232 23,120 23,892 25,358 24,672 23,877 10,957 11,064 11,401 9,049 9,773 10,345 10,458 10,529 10,511 16,335 1,383 1,369 347 995 1,095 1,126 1,256 1,156 1,323 2,315 5,338 4,809 5,156 6,517 6,612 6,880 7,040 6,879 5,034 6,305 3,362 3,399 3,236 1,915 2,047 1,835 2,369 2,522 2,004 2,289 -----1..lli. ~ ----1.fill. -----1..lli ____kill ~ ____b11Z_ ~ ~ ---1.fil 53,298 53,221 54,340 52,077 53,918 ~ 59145 59479 56,288 70046 2,067 3,532 1,867 1,756 2,335 2,365 2,382 2,871 2,056 1,836 14,897 15,418 14,938 11,712 14,807 15,650 15,190 14,551 13,386 13,310 2,441 2,237 2,399 1,909 2,043 2,178 2,419 2,313 2,526 3,655 ______m_ ~ ~ ~ ~ ~ ~ ~ ___!lQ£ ----..!!Z§. 20,128 21,955 20,041 16208 19 977 21,045 20917 20,623 18 773 19,678 $ 73,426 $ 75176 $ 74,381 $ 68,285 $ 73,895 $ 75,856 $ 80,062 $ 80,102 $ 75,061 $ 89.725 $ 6,328 $ 5,548 $ 5,662 $ 3,151 $ 3,134 $ 3,470 $ 3,569 $ 3,401 $ 3,339 $ 3,440 4,290 4,656 4,222 4,600 4,891 4,601 4,815 4,357 4,325 4,527 306 277 255 193 238 348 2B5 309 294 415 46 34 46 46 44 50 47 46 49 63 1,728 1,466 1,533 1,501 1,638 1,541 1,545 1,514 279 1,070 15B 161 167 73 140 91 150 104 113 114 4,495 4,200 4,015 3,394 4,332 4,541 4,299 4,540 4,714 4,711 ~ 66,150 ~ 16,342 15,900 12 95B ~ 14,642 _____.1Q1Q ---11.ill ~ 80490 3,137 3,138 3,024 2,519 2,795 3,165 3,097 3,082 3,290 3,549 19,099 17,938 1B,742 19,059 19,322 19,855 20,202 20,510 19,449 21,241 2,462 2,514 2,553 2,529 2,751 2,885 3,006 3,325 3,194 3,422 783 719 811 820 789 798 756 810 581 790 ___ill. -----1!§. ---25,755 24309 25,245 24,927 25,657 26,703 27 061 27,727 26,513 29,001 $ 43,106 $ 40 651 $ 41145 $ 37,885 $ 40,807 $ 41,345 $ 41771 $ 41,998 $ 39,628 $109 491 $ (35,947) $ (36,879) $ (38,440) $ (39,119) $ (38,768) $ (40,169) $ (39,800) $ (45,208) $ (43,173) $ 10,444 5,627 ~ ~ ~ ----2.fil!Q. ~ ~ ~ ~ ~ $ (30,320) $ (34,525) $ (33,236) $ (30,400) $ (33,088) $ (34,511) $ (33,657) $ (38,105) $ (35,433) $ 19,766 General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes, general purpose $ 8,272 $ 8,031 $ 8,315 $ 8,242 $ 8,196 $ 9,101 $ 8,623 $ 9,708 $ 10,308 $ 10,821 Property taxes, debt service 2,439 2,362 2,578 2,766 3,022 2,487 2,457 2,664 3,058 3,065 Motor vehicle taxes 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 1,520 1,643 Sales tax, general purpose 12,165 12,260 12,6B9 12,931 12,7B1 12,906 13,292 13,419 13,697 15,315 Selective sales tax 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 9,751 11,405 Other taxes 6,486 6,630 7,231 7,363 7,991 6,900 7,241 6,975 6,117 7,116 Investment revenues 66 67 98 86 148 92 183 670 286 158 Miscellaneous 660 9,918 1,160 2,371 5,842 2,003 1,062 1,168 8,328 2,405 Transfers, net ___ 3_0 ~ 787 ~ _____MQQ_ ~ ~ ~ ---2.lli. ~ Total governmental activities 35,481 45748 38,569 43448 47 851 48,002 48,034 ---2Q.ill. 58,199 68,608 Business-type activities: Investment revenues 79 49 51 56 7B 129 233 4 Miscellaneous 434 279 97 103 153 846 446 2,416 Reimbursements 180 132 79 Transfers, net ____QQ) __@§Q) __@,ill) _l1fil) ~ ~ ~ ~ ~ Total business-type activities ~~~ ~ ~ ~ ~ ~ (4,682) (14,285) Total primary government $ 35,964 $ 45,126 $ 38,897 $ 39,855 $ 44,427 $ 43,867 $ 43,589 $ 46,176 $ 53,517 $ 54,343 Change In Net Position Governmental activities $ (466) $ 8,869 $ 129 $ 4,329 $ 9,083 $ 7,833 8,233 4,902 15,026 79,052 Business-type activities _____§._!1Q, --1n£ ___Mg ~ ~ ~ ~ ~ ~ ~ Total primary government $ 5 644 $ 10,601 $ 5661 $ 9,455 $ 11,339 $ 9,356 $ 9931 $ 8071 $ 18,084 $ 74109 Source: City of Salina Annual Comprehensive Financial Reports, 2012 -2021 105 Schedule 3 City of Salina, Kansas Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2012 2013 2014 2015 2016 2017 ~ ~ 2020 (Note 1l 2Q21 General Fund Non spendable $ 116 $ 81 $ 107 $ 111 $ 131 $ 153 $ 152 $ 212 $ 184 $ 168 Restricted Committed Assigned 540 331 239 199 136 214 340 274 244 152 Unreserved/unassigned ~ 3,138 ~ 4,530 ~ ~ 6,251 8,821 14,714 20743 Total general fund ~ $ 3,550 $ 4,254 $ 41840 ~ $ 61883 $ 6,743 $ 9,307 $ 15,142 $ 211064 Restatement Resisted fund balance All other governmental funds Non spendable $ $ $ $ $ $ $ $ $ $ Restricted 3,319 3,446 2,910 2,793 3,142 4,191 4,648 5,224 4,980 72,025 Committed (516) 7,486 9,886 8,695 14,284 10,072 7,325 8,086 13,225 16,597 Assigned 4,087 3,146 1,280 619 1,043 641 1,227 963 1,965 1,587 Unreserved/unassigned ------(10,537) (6,823) (28) (852) (Z,804) (4,028) (1,058) Total all other governmental funds $ 6,890 $ 141078 $ 14 076 $ 1 570 $ 11,646 $ 14,876 $ 12,348 $ 6A69 $ 16143 $ 891151 Note 1: Committed fund balance increased due to changes from the implementation of GASB Statement 84 in fiscal year 2020. Note 2· Restricted fund balance increased due to the City receiving $65.9 million from the federal government in 2021, restricted for the environmental cleanup of the former Schilling Air Force Base. 106 Schedule 4 City of Salina, Kansas Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Revenues Taxes (see Schedule 5) $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41,597 $ 41 ,958 $ 43,492 $ 44,452 $49,364 Intergovernmental 4,487 4,192 4,008 3,385 4,325 4,536 4,297 4,573 5,317 70,892 Special assessments 2,315 1,706 1,810 1,679 1,669 1,539 1,546 1,596 1,511 1,405 Licenses and permits 8 9 7 10 7 6 3 4 5 10 Charges for services 8,484 8,536 8,276 6,416 6,953 6,880 7,338 6,804 5,557 6,710 Investment revenue 47 40 59 47 142 79 157 670 286 158 Reimbursements 36 9,015 123 491 1,406 Donations 241 83 141 111 238 90 129 90 Miscellaneous 537 810 799 1,853 4 315 1,851 884 1 545 5,656 1,898 Total revenues 50,638 59,072 51,846 51 ,135 57,219 56,599 56,421 58 774 62,913 130,528 Expenditures General government 3,574 4,269 3,986 5,342 5,422 5,423 5,649 4,582 5,506 5,630 Public safety 18,564 19,155 19,559 21,268 21 ,664 21,629 22,953 23,692 22,435 23,215 Public works 7,004 7,220 7,443 5,333 5,778 6,048 6,162 6,136 6,082 6,166 Public health and sanitation 1,343 1,344 319 982 1,078 1,097 1,236 1,121 1,280 2,296 Culture and recreation 4,449 3,939 4,292 5,659 5,817 6,143 6,255 6,047 4,245 5,317 Planning and development 3,256 3,293 3,232 1,910 2,042 1,801 2,185 2,311 1,794 2,078 Miscellaneous 1,354 2 Capital outlay 7,327 13,047 11,009 25,527 24,001 18,281 16,344 21,913 12,041 24,939 Debt service Principal 8,592 5,038 5,261 6,250 17,902 5,088 14,243 10,324 5,164 10,550 Interest 2,103 1,867 1,864 1,833 3,152 1,771 2,192 2,136 2,366 2,411 Deposit to escrow 92 Total expenditures 56,304 59,172 56,965 74,104 86,856 67,281 77 219 78,262 62,267 82,604 Other financing sources (uses) Bonds and notes issued 6,150 5,690 5,365 6,825 34,892 11,490 8,090 11,090 8,720 13,813 Bond and note premium 60 185 302 369 1,503 95 70 443 468 592 Transfers in 3,488 4,907 3,001 7,642 7,065 8,339 13,462 9,714 9,323 23,000 Transfers out (3,458) !3,907) (2,999) (3,913) (3,555) (4,160) (4,186) (5,073) (4,271) ____@_JW Total other financing sources (uses) 6,240 6,875 5,669 10,923 39,905 15,764 17,436 16174 14,241 31,006 Net change in fund balance $ 574 $ 6,775 $ 550 $(12,046) $ 10,268 $ 5,082 $ (3,362) $ (3,314) $ 14,887 $78,930 Debt service as a percentage of non-capital expenditures 17% 28% 18% 18% 20% 50% 16% 37% 28% 29% Source: City of Salina Annual Comprehensive Financial Reports, 2012 -2021 107 Schedule 5 City of Salina, Kansas Tax Revenues by Source, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting} (in OOO's) Fiscal Year 2012 2013 2014 ~ 2016 2017 2018 2019 2020 2021 Real estate $ 10,466 $ 10,145 $ 10,657 $ 10,729 $ 10,972 $ 11,377 $ 10,804 $ 12,182 $ 13,150 $ 13,500 Delinquent 245 248 235 279 246 210 276 190 216 385 Motor vehicle 1,153 1,200 1,250 1,312 1,370 1,372 1,428 1,403 1,520 1,643 General sales 12,165 12,260 12,689 12,931 12,781 12,906 13,293 13,419 13,697 15,315 Selective sales 4,210 4,281 4,461 4,558 4,901 8,832 8,917 9,323 9,751 11,405 Other taxes 6,485 6,630 7,231 7,362 7 991 6,900 7,240 6,975 6,117 7,116 Total taxes $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41,597 $ 41,958 $43,492 $ 44,452 $ 49,364 Source: City of Salina Annual Comprehensive Financial Reports, 2012 -2021 108 Schedule 6 City of Salina, Kansas Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Assessed Value Ratio of Fiscal Estimated Total Assessed {Budget) Personal Total, Excluding Motor Vehicle Total, Taxable Market Value Value to Est. Year Real Estate Proee!:!l: State Assessed Motor Vehicles Tax Rate (Note 1) Assessed Value (Note2) Market Value 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 $ 48,862,411 $ 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 2021 $ 427,732,694 $ 11,229,345 $ 23,975,182 $ 459,861,906 30.452 $ 56,545,812 $ 519,483,033 $ 3,392,138,959 15.31 Note 1: The tax rate for motor vehicles is set based on the average countywide tax rate. The City of Salina then receives a share of that based on tax effort. Note 2: The estimated market value excludes the value of the State assessed properties. Market value information is not available for those properties. However, state assessed property is generally assessed at 33% of market value, except for railroads, which are assessed at 15% of market value. Note 3: The Direct rate is expressed in dollars per thousand dollars of assessed value. Source: Saline County Clerk (''year'' Tax Levy Sheet) 109 City of Salina Fiscal Debt Total (Budget) Operating Service City Year Millaoe Millaoe Millaoe 2012 20.326 5.946 26.272 2013 20.242 5.948 26.190 2014 20.539 6.388 26.927 2015 20.692 6.388 27.080 2016 19.950 7.361 27.311 2017 21.694 5.909 27.603 2018 20.339 5.790 26.129 2019 22.285 6.109 28.394 2020 22.908 6.812 29.720 2021 23.847 6.803 30.650 Source: Saline County Treasurer Schedule 7 City of Salina, Kansas Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) Saline County Debt Total Operating Service County Operating Millaoe Millaoe Millaoe Millage 32.576 32.576 47.127 34.823 34.823 47.133 37.895 37.895 46.599 38.047 38.047 44.088 38.275 38.275 44.465 37.508 37.508 44.069 37.321 37.321 45.130 38.437 38.437 46.776 41.097 41.097 44.761 40.606 40.606 45.130 USD 305 (2) Other (1) Debt Total Service USD Millage Millaoe Other Total 11 .693 58.820 11.989 129.657 11.516 58.649 12.135 131.797 11.517 58.116 12.941 135.879 11.517 55.605 13.305 134.037 11.655 56.120 13.293 134.999 11.674 55.743 13.299 134.153 11.371 56.501 13.189 133.140 10.746 57.522 13.988 138.341 10.747 55.508 13.983 140.308 10.729 55.859 12.623 139.738 (1) The "Other'' column includes the State of Kansas, the Salina Airport Authority, the Salina Public Library and Kansas State Extension District #3. (2) A small portion of Salina is covered by USD 306, USD 307, or USD 400. Total Tax Rates are different in the areas covered by these jurisdictions. 110 Taxpayer Evergy (Westar Energy (Western Resources) SFC Global Supply Chain, Inc. (Schwan's) Kansas Gas Service RAF Salina LLC S&B Motels Central Mall Realty Holding LLC Union Pacific Railroad Co. Menard Inc. Individual Sams Real Estate Business Trusl/Walmart Wal-mart Real Estate Business Trust Great Plains Manufacturing Gateway Properiies Southwestern Bell Salina Regional Health Center Combined Valuation of the Ten Largest Taxpayers City Valuation Percent of Total City Assessed Valuation Source: Saline County Clerk's Office or recent OS Type of Business Utility Pizza Manufacturing Utility Retail Shopping Mall Motel Regional Shopping Center Railroad Home Improvement Residential Discount Retail Stores Discount Retail Stores Manufacturing Shopping Mall (Midstate) Telephone Utility Schedules City of Salina, Kansas Principal Property Taxpayers Current Year and Ten Years Ago 2012 (2011 Assessed Value) Assessed % of Total Valuation Valuation Rank $ 7,852,360 1.74% 8,050,871 1.78% 3,352,360 0.74% 6,160,267 1.36% 3,552,360 0.79% 3,458,708 0.77% 2,346,169 0.52% 3,551,440 0.79% 2,464,079 0.55% Hospital and Medical Offices 4,317,497 0.96% $ 45,106,111 $ 451,404,026 9.99% 111 2021 (2020 Assessed Value) Assessed % of Total Valuation Valuation Rank 2 $ 19,659,775 3.78% 1 1 5,927,488 1.14% 2 8 5,415,618 1.04% 3 3 4,680,507 0.90% 4 NIA 3,010,427 0.58% 5 NIA 2,851,701 0.55% 6 NIA 2,565,902 0.49% 7 5 2,427,090 0.47% 8 NIA 2,367,201 0.46% 9 NIA 2,195,047 0.42% 10 7 10 6 9 4 $ 51 ,100,756 $ 519,483,033 9.84% Schedule 9 City of Salina, Kansas Property Tax Levies and Distributions Last Ten Fiscal Years Current Year Tax Distributions Total Tax Distributions Fiscal (Budget) Taxes Levied for Delinquent Percentage Year the fiscal 'f_ear Amount Percentage Collections (1) Amount of levy 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% 2021 $ 13,958,495 $ 13,552,390 98.0% $ 283,194 $ 13,835,584 99.1% (1) Delinquent collections are reported in the aggregate for all previous years. Data is not currently available for "collected in subsequent years" Source: Saline County Treasurer's Office 112 City Direct Tax Rate General Special purpose County-wide Tax Rate Portion of County-wide tax allocated to City (July Percentage) 2012 0.50% 0.40% 1.00% 61 .72% Schedule 10 City of Salina, Kansas Direct Sales Rate by Taxing Entity Last Ten Fiscal Years Fiscal Year 2013 2014 2015 2016 2017 0.50% 0.50% 0.50% 0.50% 0.50% 0.40% 0.40% 0.40% 0.40% 0.75% 1.00% 1.00% 1.00% 1.00% 1.00% 60.86% 60.23% 60.28% 60.28% 60.28% In addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. 2018 2019 0.50% 0.50% 0.75% 0.75% 1.00% 1.00% 59.85% 60.33% 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 113 2020 2021 0.50% 0.50% 0.75% 0.75% 1.00% 1.00% 60.17% 60.17% Setwdul• 11 CilyQfSalina,t<an5as Wlller&ill!-abyClaaofeuatomer lallTenAsealYtffl 2012 2013 2014 2015 :2016 2017 2018 2019 202l) 2021 ·-· w-. -· Water ·-· Wo!.e< ·-· Wm ·-· w..., . ,.,,, w...-.-. wa1 .. ...... Wme, ·-Wa<..er '"""' WM&< Rat&C!ass .... SOid .... So• "'"" Sold Billod .. ~ .... Sold .... -B,led Sold Bied Sold ...., Sold .... ""' Fl...-17,893 1,225,931 17,983 989,788 18,042 1,003,100 18,086 987,"'° 18,125 950,697 18,124 988,572 18,130 963,387 18,155 864,810 1~238 965,782 18,303 987,W Commerdal 1,565 38,547 1,579 348,968 1,599 353,615 1,600 '3f:IJ,7ffl 1,603 345,232 1,606 3'5,250 1,614 340,960 1,607 352,051 1,612 319,000 1,626 349,956 lndl.$t.rial 42 17-4,595 40 182,529 42 193,233 44 202,407 44 191,236 44 193,503 44 211,843 44 196,229 43 164,766 41 167,991 G"""""'"' 99 5-4,618 99 48,'84 97 '5,346 97 41,928 98 45,136 99 41,552 98 35,932 97 41,911 94 28,200 n 22,810 Apartment 169 70,263 168 67,155 166 60,865 164 61,400 183 67,039 163 58,378 157 71,559 ,., 62,127 156 58,851 157 61,021 S<no«• 81 57,0'll 84 44,187 84 45,328 85 45,545 85 41,176 83 36,039 81 30,810 79 31,839 78 24,518 78 31,960 lndustrialspvcial 1 40,448 1 20,439 Consumed in production 12 19,266 12 18,885 12 19,264 12 17,338 9,580 • 9,652 7 6,866 6,974 7 4,109 6 3,012 RIJIWIIWl!et 1 26,930 1 21,530 1 22,993 1 21,915 1 23,384 1 25,624 1 22,345 1 21,663 1 31,ns 1 22,970 _ ... 10 17,896 9 26,482 10 32,184 9 31,858 9 33,ne 9 35,132 9 31,856 • 29,892 9 29,483 9 33,1m RellglOUl/nOnpra!it 38 5,399 37 4,810 37 4,973 37 4,968 36 5,224 36 4,749 35 4,456 36 2,780 35 2,215 35 2,257 EnQIMarin; studiC!S 8 6,104 8 6,822 • 5,095 8 4,807 7 4,'573 7 4.7n 7 4,471 7 3,835 5 2,553 6 2,213 PRJ\lldlngtaxlbleserviat 2 6,1UI 2 3,"90 1 3,561 1 3,167 1 3,921 1 3,347 1 2,331 1 2,576 1 1,9l9 1 2,585 Sale of corr.ponent parts 8 5,726 6 S,972 6 6,650 5 3,000 • 3,129 4 2,917 4 2,190 4 1,542 4 1,310 4 1,~33 Firehyd(Qnt 4 2,533 3 1,922 2 1,474 3 1,n7 3 1,790 3 2.829 3 1,180 3 2,106 3 2,146 lnch,,.rial consinied In prod don 3 3,543 ' 4,417 3 3,588 3 2,388 3 1,"30 3 1,962 3 2,107 3 2,219 3 1,946 3 1,!560 Salee af farm eqlipmert 1 83 1 107 1 48 1 53 1 54 1 104 1 .. 1 124 1 109 1 154 199'37 1 754r;JZT 20018 17@7'1 ~111 1 lio1577 '15U:~ 17'§§§§ ~,m 1,1,m ~1~ 1 ffl343 20,196 1,734 ooli E~n l~§.5j zj~ 15511 :J51m: 1 iffi5'§ WaterRata~: Moriliymeterdave(Sl8") '4.7. sue $5.03 $5.,0 $5.38 $5.52 $574 $584 $8.15 $8.27 Cornrnaditycharge (J)&fOOOgal.): Q.3'.XX)gal $3.86 $4.04 $4.2. $4.45 ..... S<.77 ..... SS.13 $5.31 $5,42 2001 ·10,0'JOgal 0~1c,oooga1. Excess uso ch!lrge $7.76 $6.08 $8.48 $8.90 $9.16 $9.5-4 $9.92 $10.26 $10.62 510.84 Wattawater Fhta Sdiadule: Monthlybasecha'ile $&77 S6.97 $7.11 $7.22 $7,36 $7.51 $7.81 $6,08 $8.36 $8,53 Unit cost (per 000 gal.): $4.61 $4.79 ..... $5.01 $5,19 $5.29 55.51 $5.70 $5,90 1602 Water &Oki !s expressed in thousands of gallons Number of Aaxiunl:a billed is the annual number of billings for each dase divided by 12 Monlhfy meter charge increases withthesizeofthe meter. Residential Wastewater ii calculated based on Winier Quarter water conslJrTlpllon. OINlr aocot.ri. are based on monthly water C01"1!5umption, 2008 Water Coo&l..fflption Rate Slndu'e cl-enged from a dec:reaq tier stnJeture to one rate and Excess Use Charge which is double the com.umption rate Source: ay of Saina Water Customer Accounting Office. 114 Schedule 12 City of Salina, Kansas Ratio of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-Tree Activities General General Water Percentage Obligation Obligation Revenue Temporary Total Primary of Personal Fiscal Year Bonds Loans Pa~able Caeital Lease Tem~rar:i: Notes Bonds Bonds Loans Parable Notes Government Income 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 $ 7,840,381 $ 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% 2021 $59,582,649 $ 12,640,000 $ $ 3,647,188 $ 7,672,351 $ 8,865,000 $ 43,966,366 $ s 136,373,554 5.5% Source: City of Salina Annual Comprehensive Financial Reports, 2012 -2021 115 Schedule 13 City of Salina, Kansas Ratio of Net General Bonded Debt Outstanding Last Ten Fiscal Years General Bonded Debt Outstanding General Percentage of Obligation Temporary Less: Debt Net General Actual Taxable Fiscal Year Bonds Capital Lease Notes Total Service Fund Bonded Debt Value of Per Caeita 2012 $58,723,501 $ $ 1,485,000 $ 60,208,501 $ 582,412 $ 59,626,089 13.1% $1 ,241.05 2013 $ 59,620,906 $ 176,235 $ 5,000,000 $64,797,141 $ 707,763 $ 64,089,378 13.8% $1,339.49 2014 $ 59,620,906 $ 176,235 $ 5,000,000 $64,797,141 $ 407,864 $64,389,277 13.6% $1,345.17 2015 $ 59,380,405 $ 479,366 $ 5,995,000 $65,854,771 $ 745,339 $65,109,432 13.5% $1,361 .75 2016 $62,514,738 $ 157,868 $ 6,811,742 $ 69,484,348 $ 1,248,914 $ 68,235,434 14.0% $1,441 .51 2017 $ 57,250,888 $ $18,123,505 $ 75,374,393 $ 1,509,863 $ 73,864,530 14.5% $1,571 .79 2018 $58,710,000 $ $11,170,000 $ 69,880,000 $ 1,851,358 $ 68,028,642 13.3% $1,447.60 2019 $ 65,330,000 $ $ 7,050,000 $ 72,380,000 $ 1,142,418 $71,237,582 13.9% $1,524.91 2020 $ 65,330,000 $ $ 7,050,000 $ 72,380,000 $ 1,724,117 $ 70,655,883 13.8% $1,517.85 2021 $ 67,255,000 $ $ 3,647,188 $70,902,188 $ 2,111,664 $68,790,524 13.2% $1,486.59 Source: City of Salina Annual Comprehensive Financial Reports, 2012 -2021 116 Schedule 14 City of Salina, Kansas Direct and Overlapping Governmental Activities Debt As of December 31, 2021 Jurisdiction Direct: City of Salina Overlapping: Salina Airport Authority Saline County 1 USD 305 Total Overlapping Debt Total Direct and Overlapping Debt Per Capita Direct and Overlapping debt Net General Obligation Percentage Bonded Debt Applicable to Outstanding City of Salina $ 68,790,524 100.00% 19,615,000 100.00% 75,523,554 73.79% 99,700,000 93.10% 194,838,554 $ 263,629,078 Amount Applicable to the City of Salina $ 68,790,524 19,615,000 55,728,830 92,820,700 168,164,530 $ 236,955,054 $ 5,005.81 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. 1 Includes $74,900,000 of bonds issued by Saline County that have a pledge of both property taxes and a dedicated 0.50% retailers' sales tax of the county. However, based on historical collections, the County anticipates that such bonds will be repaid entirely from the sales tax. Source: Saline County Clerk 117 Legal Debt Margin Calculation for 2021 Assessed Valuation Debt Limit (30% of Assessed Value) Debt applicable to limit: Total Bonded Debt Less GO Debt Attributable to Exempt Purposes Less Revenue Bonds Less Loans Payable Less Fund Balance designated for Debt Service Total Debt Applicable to Limitation Legal debt margin Debt Limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the fimit as a percentage of debt limit $ 519,483,033 155,844,910 $ 142,079,520 (7,672,351) (8,865,000) (56,606,366) (2,111,664) $ 66,824, 139 $ 69,020,771 2012 $ 135,421,208 49,309,445 $ 86,111 763 36% 2013 $ 136, 196,966 $ 52,724,034 $ 83,472,932 $ 39% 2014 Schedule 15 City of Salina, Kansas Legal Debt Margin Last Ten Fiscal Years ~ 136,896,083 $ 138,909,078 56,090,293 74,229,612 80,805,790 $ 64,679,466 41% 53% 118 . Fiscal Year 2016 2017 2018 2019 2020 2021 $ 141,804,931 $142,000,537 $146,336,377 $ 152,724,804 $153,285,495 $155,844,910 62,072,485 61 ,296,184 66,240,457 66,232,649 65,748,563 66,824,139 $ 79,732,446 $ 80,704,353 $ 78,095,920 $ 86,492,155 $ 87,536,932 $ 89,020,771 44% 43% 47% 47% 43% 43% Utility Service Fiscal Year Charl;jeS 2012 $ 19, 163,426 2013 $17,974,089 2014 $18,964,164 2015 $19,139,612 2016 $ 19,389,348 2017 $19,958,862 2018 $20,382,469 2019 $20,842,606 2020 $19,448,780 2021 $21,240,517 Schedule 16 City of Salina, Kansas Pledged Revenue Coverage Last Ten Fiscal Years Water/Sewer Revenue Bonds Less Operating Net Available Debt Service Exeenses Revenue Princieal Interest $ 12,222,431 $ 6,940,995 $ 340,000 $ 596,992 $ 13,373,088 $ 4,601,001 $ 620,000 $ 590,191 $ 12,112,288 $ 6,851 ,876 $ 630,000 $ 577,791 $ 9,859,974 $ 9,279,638 $ 640,000 $ 565,191 $ 11,800,473 $ 7,588,875 $ 660,000 $ 549,191 $ 13,148,035 $ 6,810,827 $ 675,000 $ 529,391 $ 12,973,621 $ 7,408,848 $ 705,000 $ 509,141 $ 13,269,741 $ 7,572,865 $ 725,000 $ 487,991 $ 12,460,334 $ 6,988,446 $ 715,000 $ 327,117 $ 12,077,933 $ 9,162,584 $ 750,000 $ 282,825 Source: City of Salina Annual Comprehensive Financial Reports, 2012 -2021 City of Salina Debt Service Schedules 119 Debt Service Covera~e 7.41 3.80 5.67 7.70 6.28 5.65 6.10 6.24 6.71 8.87 Per Capita Personal Personal Income, Income Salina Fiscal Year P~ulation !Saline Count~) (inte!:,Eolated) 2012 48,045 $ 41,762 $ 2,006,455,290 2013 47,846 $ 43,078 $ 2,061,109,988 2014 47,867 $ 43,736 $ 2,093,511,112 2015 47,813 $ 44,065 $ 2,106,879,845 2016 47,336 $ 44,230 $ 2,093,647,612 2017 46,994 $ 44,732 $ 2,102,135,608 2018 46,994 $ 47,945 $ 2,253,127,330 2019 46,716 $ 49,983 $ 2,335,005,828 2020 46,550 $ 50,820 $ 2,365,671,000 2021 46,274 $ 53,309 $ 2,466,820,666 Schedule 17 City of Salina, Kansas Demographic and Economic Statistics Last Ten Fiscal Years Unemployment Labor Force, USO 305 Rate Cit~ of Salina Headcount 6.3% 26,185 7,305 5.1% 26,441 7,305 5.3% 26,303 7,388 3.9% 26,170 7,369 3.3% 27,684 7,386 2.7% 27,684 7,176 3.3% 30,174 7,180 2.9% 30,094 7,245 3.4% 30,094 7,156 2.3% 24,962 7,031 Percentage Free and Per Capita .5 Reduced City .5 cent cent sales Lunch sales tax Tax 59.1% $5,241,205 $ 109.09 60.7% $5,326,723 $ 111 .33 61.3% $5,555,601 $ 116.06 61 .8% $5,670,040 $ 118.59 68.7% $5,727,260 $ 120.99 62.1% $5,755,869 $ 122.48 61 .7% $5,770,174 $ 122.79 59.2% $5,968,961 $ 127.77 59.0% $5,998,424 $ 128.86 44.3% $6,687,099 $ 144.51 Sources: Increase in per capita Sales Tax (1 O years) Population: Kansas Division of the Budget. (Population Data) Increase in per capita Personal Income Employment: Kansas Department of Labor 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 2011 -2021 Employment City of Salina USD305 headcount and free and reduced lunch data derived from Kansas Department of Education./USD 305 Budget Document Asao/oof per capita personal income 0.261% 0.256% 0.265% 0.269% 0.274% 0.274% 0.256% 0.256% 0.254% 0.271% 18.1% 21.7% 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 2020- 2021 school year is reported as 2020. 120 Emelo~er Salina Regional Health Center Unified School District No 305 Schwan's Global Supply Chain Great Plains Manufacturing Exide Technologies/Stryten Manufacturing City of Salina Salina Vortex Saline County Walmart REV Group Signify Dillon Stores Solomon Corp. Total Source: Salina Chamber of Commerce Schedule 18 City of Salina, Kansas Principal Employers Current Year and Nine Years Ago T~ee of Business Emplo~ees Health Care 1300 Public School System 1659 Frozen Pizza Manufaduring 1800 Agricultrual & Landscaping Equipment Automotive Battery Manufadurer 750 City Government 465 Manufacturing County Government 277 Retail 421 Manufacturing Fluorescent Lamps 490 Retail 343 Electrical Equipment 324 7 829 121 2012 2021 Percentage of Percentage of Rank Labor Force Emelo~ees Rank Labor Force 3 5.0% 1,875 6.2% 2 6.3% 1,500 2 5.0% 1 6.9% 1,200 3 4.0% 1,200 4 4.0% 4 2.9% 700 5 2.3% 6 1.8% 425 6 1.4% 385 7 1.3% 10 1.1% 325 8 1.1% 7 1.6% 250 9 0.8% 175 10 0.6% 5 1.9% 8 1.3% 9 1.2% 29.9% 8,035 32.2% GOVERNMENTAL AUDIT SECTION CITY OF SALINA, KANSAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2021 Federal Grantor/Pass-Through Grantor/Proqram Title U.S. Department of Housing and Urban Development Federal CFDA Number Passed Through the Kansas Housing Resources Corporation: Emergency Solutions Grant Total U.S. Department of Housing and Urban Development U.S. Department of Justice Crime Victims Assistance Total U.S. Department of Justice U.S. Department of the Treasury Passed Through Saline County: Coronavirus Relief Fund Total U.S. Department of the Treasury U.S. Department of Transportation Passed Through Kansas Department of Transportation: Highway Safety Cluster: State and Community Highway Safety National Priority Safety Programs Total Highway Safety Cluster Total U.S. Department of Transportation Total Expenditures of Federal Awards See independent auditor's report on the financial statements. 122 14.231 16.575 21.019 20.600 20.616 Expenditures $ 1,487,072 1,487,072 300 300 35,000 35,000 7,651 5685 13,336 13,336 $ 1,535,708 1. Organization CITY OF SALINA, KANSAS Notes to the Schedule of Expenditures of Federal Awards For the Year Ended December 31, 2021 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 in accordance with generally accepted accounting principles. 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. 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 as of December 31, 2021. 5. Outstanding Loans The City did not have any outstanding loans under any federal grants as of December 31, 2021 . 6. Pass Through Numbers Pass through numbers have not been assigned to pass through grants on the Schedule of Expenditures of Federal Awards. 123 CITY OF SALINA, KANSAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2021 Section I -Summary of Auditor's Results Financial Statements Type of auditor's report issued: Internal control over financial reporting: Material weakness(es) identified? ---- Significant deficiency(ies) identified that are not considered to be material weaknesses? Noncompliance material to financial statements noted? Federal Awards Internal control over major programs: Material weakness( es) identified? ---- ---- ---- Unmodified Yes X ---- Yes X ---- Yes X ---- Yes X ---- No None reported No No Significant deficiency(ies) identified that are not considered to be material weaknesses? ----Yes __ x __ Nonereported Type of auditor's report issued on compliance for major programs: Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Uniform Guidance? Identification of major programs: CFDA Number(s) 14.231 Dollar threshold used to distinguish between type A and type B programs: Auditee qualified as low-risk auditee? Unmodified Yes ----__ x __ No Name of Federal Program or Cluster Emergency Solutions Grant $750,000 Yes X No -------- See independent auditor's report on the financial statements. 124 CITY OF SALINA, KANSAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) For the Year Ended December 31, 2021 Section II -Financial Statement Findings Prior Year Findings None Noted. Current Year Findings None Noted. Section Ill -Federal Award Findings and Questioned Costs Prior Year Findings None Noted. Current Year Findings None Noted. See independent auditor's report on the financial statements. 125 APPENDIX D December 31, 2022 Unaudited Financial Report The following report shows unaudited revenues, expenditures and fund balances for the fiscal year ending December 31, 2022 for the City's major operating funds. This information is being presented on a cash basis and will be adjusted to comply with generally accepted accounting principles for presentation in the City's 2022 Annual Comprehensive Financial Report ("2022 ACFR"). City staff anticipates that 2022 ACFR will indicate an increase in the aggregate fund balance of its major operating funds. It is currently anticipated that the 2022 ACFR will be available in late September 2023. Unencumbered Unencumbered Fund Beginning Outstanding Cash Balance Fund Name Number Balance DEBITS CREDITS NET CHANGE END BALANCE Encumbrances 12/31/22 General 100 19,243,933.00 50,460,968.05 44,569,194.88 5,891,773.17 25,135,706.17 357,737.77 24,777,968.40 Sales Tax Capital 210 9,589,335.00 10,549,705.51 11,801,337.25 -1,251,631.74 8,337,703.26 437,425.77 7,900,277.49 Gas Tax 270 2,585,219.07 1,709,106.41 1,392,937.99 316,168.42 2,901,387.49 819,146.44 2,082,241.05 Sanitation 300 1,271,616.58 3,484,399.16 3,131,058.27 353,340.89 1,624,957.47 108,437.86 1,516,519.61 Solid Waste 320 6,703,037.02 4,038,016.55 3,434,208.94 603,807.61 7,306,844.63 337,689.97 6,969,154.66 Golf 340 94,047.40 950,613.46 974,350.43 -23,736.97 70,310.43 0 70,310.43 Water/Wastewater 370 22,526,575.73 22,260,079.11 19,146,039.10 3,114,040.01 25,640,615.74 1,328,716.26 24,311,899.48 Debt Service 500 1,530,231.57 10,305,926.01 10,354,614.21 -48,688.20 1,481,543.37 0 1,481,543.37 Water/Wastewater Debt Service 510 655,428.71 0 0 0 655,428.71 0 655,428.71 Water/Wastewater Capital Reserve 735 10,775,674.94 250,000.00 216,513.41 33,486.59 10,809,161.53 260,013.73 10,549,147.80 Solid Waste Capital Reserve 750 138,213.08 0 0 1,381,213.08 0 0 Total 75,113,312.10 104,008,814,26 95,020,254.48 10,369,772.86 83,963,658.80 3,649,167.80 80,314,491,00 CONTINUING DISCLOSURE UNDERTAKING CITY OF SALINA, KANSAS Gilmore & Bell, P.C. 06/16/2023 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A DATED AUGUST 17, 2023 This CONTINUING DISCLOSURE UNDERTAKING dated as of AUGUST 17, 2023 (the "Continuing Disclosure Undertaking"), is executed and delivered by the City of Salina, Kansas (the "Issuer"). RECITALS 1. This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance of the above-described bonds (the "Obligations") which are being issued simultaneously herewith as of August 17, 2023, pursuant to the Bond Resolution (the "Resolution") adopted by the governing body of the Issuer. 2. The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Obligations and in order to assist the Participating Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"). The Issuer is the only "obligated person" with responsibility for continuing disclosure hereunder. The Issuer covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Continuing Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 2 of this Continuing Disclosure Undertaking, which may include the Issuer's Comprehensive Financial Report, so long as the Comprehensive 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 Obligations and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Obligations (including persons holding Obligations through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Obligations for federal income tax purposes. "Business Day" means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal office or designated payment office of the paying agent or the Dissemination Agent is located are required or authorized by law to remain closed, or ( c) a day on which the Securities Depository or the New York Stock Exchange is closed. 600596.20228\DISCLOSURE UNDERTAKING "Comprehensive Financial Report" means the Issuer's Comprehensive Annual Financial Report, if any. "Dissemination Agent" means any entity designated in wntmg by the Issuer to serve as dissemination agent pursuant to this Continuing Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. ''Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or ( c) guarantee of ( a) or (b) in this definition; provided however, the term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. "Fiscal Year" means the 12-month period beginning on January 1 and ending on December 31 or any other 12-month period selected by the Issuer as the Fiscal Year of the Issuer for financial reporting purposes. "Material Events" means any of the events listed in Section 3 of this Continuing Disclosure Undertaking. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "Participating Underwriter" means any of the original underwriter(s) of the Obligations required to comply with the Rule in connection with the offering of the Obligations. Section 2. Provision of Annual Reports. (a) The Issuer shall, not later than 180 days after the end of the Issuer's Fiscal Year, commencing with the Fiscal Year ending December 31, 2022, file with the MSRB, through EMMA, the following financial information and operating data (the "Annual Report"): ( 1) The audited financial statements of the Issuer for the prior Fiscal Year, prepared on a modified accrual basis of accounting other than GAAP. A more detailed explanation of the accounting basis is contained in the Official Statement related to the Obligations. If audited financial statements are not available by the time the Annual Report is required to be provided pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Obligations, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement related to the Obligations, as described in Exhibit A, in substantially the same format contained in the fmal 600596.20228\DISCLOSURE UNDERTAKING 2 Official Statement with such adjustments to formatting or presentation determined to be reasonable by the Issuer. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been provided to the MSRB and are available through EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3, and the Annual Report deadline provided above shall automatically become 180 days after the end of the Issuer's new Fiscal Year. (b) [Reserved] ( c) The Annual Report shall be filed with the MSRB m such manner and format as is prescribed by the MSRB. Section 3. Reporting of Material Events. Not later than 10 Business Days after the occurrence of any of the following events, the Issuer shall give, or cause to be given to the MSRB, through EMMA, notice of the occurrence of any of the following events with respect to the Obligations ("Material Events"): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; ( 10) release, substitution or sale of property securing repayment of the Obligations, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation of a merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; 600596.20228\DISCLOSURE UNDERTAKING 3 (14) appointment of a successor or additional trustee or the change of name of the trustee, if material; (15) incurrence of a Financial Obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders, if material; and ( 16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties. Except as provided in Section 2(b) hereof, if the Issuer has not submitted the Annual Report to the MSRB by the date required in Section 2(a), the Issuer shall send a notice to the MSRB of the failure of the Issuer to file on a timely basis the Annual Report, which notice shall be given by the Issuer in accordance with this Section 3. Section 4. Termination of Reporting Obligation. The Issuer's obligations under this Continuing Disclosure Undertaking shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Obligations. If the Issuer's obligations under this Continuing Disclosure Undertaking are assumed in full by some other entity, such person shall be responsible for compliance with this Continuing Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Obligations, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3. Section 5. Dissemination Agents. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Continuing Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Continuing Disclosure Undertaking. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Undertaking, the Issuer may amend this Continuing Disclosure Undertaking and any provision of this Continuing Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Undertaking. In the event of any amendment or waiver of a provision of this Continuing Disclosure Undertaking, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type ( or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (1) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) 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. 600596.20228\DISCLOSURE UNDERTAKING 4 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. Def a ult. If the Issuer fails to comply with any provision of this Continuing Disclosure Undertaking, any Participating Underwriter or any Beneficial Owner of the Obligations may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Continuing Disclosure Undertaking. A default under this Continuing Disclosure Undertaking shall not be deemed an event of default under the Resolution or the Obligations, and the sole remedy under this Continuing Disclosure Undertaking in the event of any failure of the Issuer to comply with this Continuing Disclosure Undertaking shall be an action to compel performance. Section 9. Beneficiaries. This Continuing Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Participating Underwriter, and the Beneficial Owners from time to time of the Obligations, and shall create no rights in any other person or entity. Section 10. Severability. If any provision in this Continuing Disclosure Undertaking, the Resolution or the Obligations shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11. Electronic Transactions. The arrangement described herein may be conducted and related documents may be sent, received, or stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 12. Governing Law. This Continuing Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Kansas. [Remainder of Page Intentionally Left Blank.] 600596.20228\DISCLOSURE UNDERTAKING 5 IN WITNES~ :\3/H:~REQF, the Issuer has caused this Continuing Disclosure Undertaking to be executed as of the day and yearfitst above written. CITY OF SALINA, KANSAS 600596.20228\DISCLOSURE UNDERTAKING S-1 EXHIBIT A TO CONTINUING DISCLOSURE UNDERTAKING FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial information and operating data contained in the following sections and tables contained in Appendix A of the final Official Statement (with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer) relating to the Obligations: • Financial Overview of the City • FINANCIAL INFORMATION CONCERNING THE CITY -Assessed Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Estimated Actual Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Collections • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Levies • FINANCIAL INFORMATION CONCERNING THE CITY -Largest Taxpayers 600596.20228\DISCLOSURE UNDERTAKING EXCERPT OF MINUTES OF A MEETING OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HELD ON JUNE 26, 2023 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 MICHAEL L. HOPPOCK, Commissioners TRENT W. DA VIS, M.D., GREG LENKIEWICZ, BILL LONGBINE and KARL RY AN Absent: None. The Mayor declared that a quorum was present and called the meeting to order. ************** (Other Proceedings) There was presented for first reading an Ordinance entitled: AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2023- A, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. Commissioner KARL RY AN moved that the Ordinance be approved on first reading. The motion was seconded by Commissioner TRENT W. DA VIS. The Ordinance was duly read and considered, and upon being put, the motion for approval was carried by the vote of the Governing Body as follows: Yea: MICHAEL L. HOPPOCK, TRENT W. DAVIS, M.D., GREG LENKIEWICZ, BILL LONGBINE and KARL RY AN Nay: NONE. ************** (Other Proceedings) [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20228\BOND ORDINANCE 2023-A EXCERPT OF MINUTES OF A MEETING OF THE CITY COMMISSION OF THE CITY OF SALINA, KANSAS HELD ON JULY 24, 2023 Gilmore & Bell, P.C. 07/24/2023 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 MICHAEL L. HOPPOCK, Commissioners TRENT W. DA VIS, M.D., GREG LENKIEWICZ, BILL LONGBINE and KARL RY AN 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 Internal Improvement Bonds, Series 2023-A, dated August 17, 2023, of the City had been received. A tabulation of said bids is set forth as EXHIBIT A hereto. The Finance Director reported that staff determined that the bid of ROBERT W. BAIRD & CO., INC., MILWAUKEE, WISCONSIN, was the best bid for the Bonds, a copy of which is attached hereto as EXHIBITB. There was presented an Ordinance entitled: AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2023-A, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. Commissioner BILL LONGBINE moved that the Ordinance be passed. The motion was seconded by Commissioner TRENT W. DAVIS. The Ordinance, having been approved by a first reading on June 26, 2023, 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: MICHAEL L. HOPPOCK, TRENT W. DA VIS, M.D., GREG LENKIEWICZ, BILL LONGBINE and KARL RY AN Nay: NONE. 600596.20228\BASICDOCS The Mayor declared the Ordinance duly passed and the Ordinance was then duly numbered Ordinance No. 23-11155, was signed and approved by the Mayor and attested by the Clerk and the Ordinance or a summary thereof was directed to be published one time in the official newspaper of the City. There was presented a Resolution entitled: A RESOLUTION PRESCRIBING THE FORM AND DETAILS OF AND AUTHORIZING AND DIRECTING THE SALE AND DELIVERY OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2023-A, OF THE CITY OF SALINA, KANSAS, PREVIOUSLY AUTHORIZED BY ORDINANCE NO. 23-11155 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. Commissioner TRENT W. DAVIS moved that: (a) the Mayor be authorized to execute the bid form selling the Bonds to the best bidder on the basis of the terms specified in the Notice of Bond Sale and that the Resolution be adopted. The motion was seconded by Commissioner KARL RYAN. The Resolution was duly read and considered, and upon being put, the motion for the adoption of the Resolution was carried by the vote of the Governing Body as follows: Yea: MICHAEL L. HOPPOCK, TRENT W. DA VIS, M.D., GREG LENKJEWICZ, BILL LONGBINE and KARL RY AN Nay: NONE. The Mayor declared the Resolution duly adopted and the Resolution was then duly numbered Resolution No. 23-8140 and was signed by the Mayor and attested by the Clerk. ************** (Other Proceedings) [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20228\BASlCDOCS 2 EXHIBIT A BID TABULATION CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A Dated: August 17, 2023 Series 2023-A Good Faith Deposit: $63,300 BIDDERS Salina Sale Date: July 24, 2023 11 :00 A.M., Central Time Max Interest Rate: 6.829% $3,005,000 General Obligation Internal Improvement Bonds, Series 2023-A The following bids were submitted using PARlrfiD and displayed ranked by lowest TIC. Click on the name of each bidder to see the respective bids. Bid Award* Bidder Name TIC D Robert W. Baird & Co , Inc. 3.326198 D Huntington Securitie§, Inc. 3.329849 D IO ~~~!Jdti~~ 3.358727 D ~aanc Qs1Ri!s1I Mii!Cls~l§ 3.377833 D E~t:l EiDs!D~ial CaRi1s!I Matls~1lii 3.453976 D B~mardi Securities, Inc. 3.535300 D StoneX Financial Inc. 3.549939 600596.20228\BASICDOCS A-1 BOl\7) PRICING City of Salina.. Kama, Geaer~ ObliptioD i:ll!em.!l !mprol'emHT Bonds. Series :?023-A !l.!aturitr \"ieldto Oall Call Pnmium Bond Component Date .-\moWlt Rate \1@1d Price M.atwity Date Pm (-Dim,unt) Serial Bond; 1o·ono2.J ISS.000 5 000'!~ 3.ZOO!--~ tOUJ6S ;.635.25 10·0F20?S 215.000 s 000'\. 3.1~. !Ol S69 S.31S.35 10'0!~016 230.000 5 000-. 3.000~. 105.!IIS 13.604.50 10:0112021 2.w.000 5 000-~ ::u•so~. 107.898 IS.955.20 101>1-'2028 25-0,.000 s.~~ 2.900!. 109.925 ~4.Sl:l!.50 10'0!'2029 260J)OO .5.000-,. 1.1190~. lll.758 3:}570.SO 10,0112030 115,000 5.000-. 1.S40I: 113.U6 38.049.00 10:01-2031 290.000 s.ooo-;. 2.&00·. us.aso 46.052 00 10:0112032 305.000 4.000~~ 2.SOO~. lOU61 C 1.1>12,. 10.01 2031 )00.000 26.416.03 1o·ov2on 315.000 4,000";. 1.aso•; lOS.25:3 C 3.()43~. IO'Ol '2031 100.000 26.°'IAS 2.565,000 236,505.10 TmnBoud.: JO OF203S 1a.ooo 4 000"; uoo~. 10:unc ,.756•; JO;Ot 2031 100.000 4,886.00 tum Bond· JO!Ol'WH :?lS.000 4 000", 4.00~. 100.000 2,955,000 241.391.10 D.uedDatt os.-n,2023 Dtli\-exy Date os:1no23 First COU,POD 04'01'2024 Pu Amount 1.PSS.000.00 Pzemium !41,391.10 Pnuluction 3,196,391,10 l'JS.l0St<W-, t"Dderai.ter"s Disco\1111 (32, ll l.156) ( .. os~s~.> Pardwe Prict 3,164,271).44 101 os:uH·. Acaued. Inte.re.t N!4 Proceeds 3.1454.~~ll.~ 600596.20228\BASICDOCS B-2 ORDINANCE NO. 23-11155 OF THE CITY OF SALINA, KANSAS PASSED JULY 24, 2023 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A 600596.20228\BOND ORDINANCE 2023-A ORDINANCE NO. 23-11155 AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2023- A, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. WHEREAS, the City of Salina, Kansas (the "City") is a city of the first class, duly created, organized and existing under the Constitution and laws of the State; and WHEREAS, pursuant to the Constitution and laws of the State of Kansas, by proceedings duly had, the City Commission of the City (the "Governing Body") has authorized the following improvements (the "Improvements") to be made in the City, to-wit: Project Description Cedar Ridge Addition -Phase 2 Facility Improvements -Bill Burke Park Ord./Res. No. 21-7983 22-8035 Authoritv CK.S.A.) K.S.A. 12-6a01 et seq., K.S.A. 13-1024a/ Ch. Ord. No. 41 Amount $ 674,038.05 4,000,000.00 WHEREAS, all legal requirements pertaining to the Improvements have been complied with, and the Governing Body now finds and determines that the total cost of the Improvements is at least $2,955,000; and WHEREAS, the Governing Body is authorized by law to issue general obligation bonds of the City to pay a portion of the costs of the Improvements; and WHEREAS, the Governing Body has advertised the sale of the Bonds in accordance with the law and at a meeting held in the City on this date, awarded the sale of such Bonds to the best bidder. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. Definitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following words and terms in this Ordinance shall have the meanings hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular number shall include the plural and vice versa, and words importing persons shall include firms, associations and corporations, including public bodies, as well as natural persons. "Act" means the Constitution and statutes of the State including K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., K.S .A. 12-6a01 et seq., and K.S.A. 13-1024a, as amended by Charter Ordinance No. 41, all as amended and supplemented from time to time. "Bond and Interest Fund" means the Bond and Interest Fund of the City for its general obligation bonds. 600596.20228\BOND ORDINANCE 2023-A 1 "Bond Resolution" means the resolution to be adopted by the Governing Body prescribing the terms and details of the Bonds and making covenants with respect thereto. "Bonds" means the City's General Obligation Internal Improvement Bonds, Series 2023-A, dated August 17, 2023, authorized by this Ordinance. "City" means the City of Salina, Kansas. "Clerk" means the duly appointed and acting Clerk of the City or, in the Clerk's absence, the duly appointed Deputy or Acting Clerk. "Finance Director" means the duly appointed and/or elected Finance Director or, in the Finance Director's absence, the duly appointed Deputy Finance Director or Acting Finance Director of the Issuer. "Improvements" means the improvements referred to in the preamble to this Ordinance and any Substitute Improvements. "Mayor" means the duly elected and acting Mayor of the City or, in the Mayor's absence, the duly appointed and/or elected Vice Mayor or Acting Mayor of the City. "Ordinance" means this Ordinance authorizing the issuance of the Bonds. "State" means the State of Kansas. "Substitute Improvements" means the substitute or additional improvements of the City authorized in the manner set forth in the Bond Resolution. Section 2. Authorization of the Bonds. There shall be issued and hereby are authorized and directed to be issued the General Obligation Internal Improvement Bonds, Series 2023-A, of the City in the principal amount of $2,955,000 for the purpose of providing funds to: (a) pay a portion of the costs of the Improvements; and (b) pay the costs of issuance of the Bonds. Section 3. Security for the Bonds. The Bonds shall be general obligations of the City payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of the Improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The balance of the principal and interest on the Bonds is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the 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. Section 4. Terms, Details and Conditions of the Bonds. The Bonds shall be dated and bear interest, shall mature and be payable at such times, shall be in such forms, shall be subject to redemption and payment prior to the maturity thereof, and shall be issued and delivered in the manner prescribed and subject to the provisions, covenants and agreements set forth in the Bond Resolution hereafter adopted by the Governing Body. Section 5. Levy and Collection of Annual Tax. The Governing Body shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become 600596.20228\BOND ORDINANCE 2023-A 2 due by levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the City in the manner provided by law. The taxes and/or assessments above referred to shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the general ad valorem taxes of the City are levied and collected, shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due and the fees and expenses of the paying agent for the Bonds. The proceeds derived from said taxes and/or assessments shall be deposited in the Bond and Interest Fund. 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 City Treasurer is hereby authorized and directed to pay said principal or interest out of the general funds of the City and to reimburse said general funds for money so expended when said taxes and/or assessments are collected. Section 6. Further Authority. The Mayor, Finance Director, Clerk and other City officials are hereby further authorized and directed to execute any and all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of the Ordinance, and to make alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. Section 7. Governing Law. This Ordinance and the Bonds shall be governed exclusively by and construed in accordance with the applicable laws of the State. Section 8. Effective Date. This Ordinance shall take effect and be in full force from and after its passage by the Governing Body, and publication of the Ordinance ( or a summary thereof) in the official City newspaper. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20228\BOND ORDINANCE 2023-A 3 600596.20228\BOND ORDINANCE 2023-A (Signature Page to Bond Ordinance) RESOLUTION NO. 23-8140 OF THE CITY OF SALINA, KANSAS ADOPTED JULY 24, 2023 Gilmore & Bell, P.C. 07/24/2023 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A 600596.20228\BASICDOCS Section 101 . Section 20 I. Section 202. Section 203. Section 204. Section 205. Section 206. Section 207. Section 208. Section 209. Section 210. Section 211. Section 212. Section 213. Section 301. Section 302. Section 303. Section 401. Section 402. TABLE OF CONTENTS ARTICLE I DEFINITIONS Definitions of Words and Terms ................................................................................... 1 ARTICLE II AUTHORIZATION AND DETAILS OF THE BONDS Authorization of the Bonds ........................................................................................... 8 Description of the Bonds ............................................................................................... 8 Designation of Paying Agent and Bond Registrar ......................................................... 9 Method and Place of Payment of the Bonds .................................................................. 9 Payments Due on Saturdays, Sundays and Holidays .................................................. 10 Registration, Transfer and Exchange of Bonds ........................................................... 10 Execution, Registration, Authentication and Delivery of Bonds ................................ 11 Mutilated, Lost, Stolen or Destroyed Bonds ............................................................... 12 Cancellation and Destruction of Bonds Upon Payment. ............................................. 12 Book-Entry Bonds; Securities Depository .................................................................. 12 Nonpresentment of Bonds ........................................................................................... 13 Preliminary and Final Official Statement. ................................................................... 13 Sale of the Bonds ......................................................................................................... 14 ARTICLEID REDEMPTION OF BONDS Redemption by Issuer. ................................................................................................. 14 Selection of Bonds to be Redeemed ............................................................................ 15 Notice and Effect of Call for Redemption ................................................................... 16 ARTICLE IV SECURITY FOR BONDS Security for the Bonds ................................................................................................. 17 Levy and Collection of Annual Tax; Transfer to Debt Service Account. ................... 18 600596.20228\BASICDOCS Section 501. Section 502. Section 503. Section 504. Section 505. Section 506. Section 507. Section 508. Section 601. Section 602. Section 603. Section 701. Section 801. Section 802. Section 901. Section 902. ARTICLEV ESTABLISHMENT OF FUNDS AND ACCOUNTS DEPOSIT AND APPLICATION OF BOND PROCEEDS Creation of Funds and Accounts ................................................................................. 18 Deposit of Bond Proceeds ........................................................................................... 18 Application of Moneys in the Improvement Fund ...................................................... 19 Substitution of Improvements; Reallocation of Proceeds ........................................... 19 Application of Moneys in Debt Service Account.. ...................................................... 19 Application of Moneys in the Rebate Fund ................................................................. 20 Deposits and Investment of Moneys ........................................................................... 20 Application of Moneys in the Costs oflssuance Account... ........................................ 20 ARTICLE VI DEFAULT AND REMEDIES Remedies ..................................................................................................................... 21 Limitation on Rights of Owners .................................................................................. 21 Remedies Cumulative .................................................................................................. 21 ARTICLE VII DEFEASANCE Def easance ................................................................................................................... 22 ARTICLE VIII TAX COVENANTS General Covenants ...................................................................................................... 22 Survival of Covenants ................................................................................................. 22 ARTICLE IX CONTINUING DISCLOSURE REQUIREMENTS Disclosure Requirements ............................................................................................. 23 Failure to Comply with Continuing Disclosure Requirements ................................... 23 600596.20228\BASICDOCS ii Section 1001. Section 1002. Section 1003. Section l 004. Section 1005. Section 1006. Section 1007. Section 1008. Section 1009. ARTICLEX MISCELLANEOUS PROVISIONS Annual Audit. .............................................................................................................. 23 Amendments ................................................................................................................ 23 Notices, Consents and Other Instruments by Owners ................................................. 24 Notices ......................................................................................................................... 25 Electronic Transactions ............................................................................................... 25 Further Authority ......................................................................................................... 25 Severability .................................................................................................................. 25 Governing Law ............................................................................................................ 25 Effective Date .............................................................................................................. 25 EXHIBIT A-FORM OF BONDS ............................................................................................................. A-1 [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20228\BASICDOCS 111 RESOLUTION NO. 23-8140 A RESOLUTION PRESCRIBING THE FORM AND DETAILS OF AND AUTHORIZING AND DIRECTING THE SALE AND DELIVERY OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2023-A, OF THE CITY OF SALINA, KANSAS, PREVIOUSLY AUTHORIZED BY ORDINANCE NO. 23-11155 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, City of Salina, Kansas (the "Issuer") has passed the Ordinance authorizing the issuance of the Bonds; and WHEREAS, the Ordinance authorized the City Commission of the Issuer (the "Governing Body") to adopt a resolution prescribing certain details and conditions and to make certain covenants with respect to the issuance of the Bonds; and WHEREAS, the Governing Body hereby finds and determines that it is necessary for the Issuer to authorize the issuance and delivery of the Bonds in the principal amount of $2,955,000 to pay a portion of the costs of the Improvements. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION 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., and K.S.A. 13-1024a, as amended by Charter Ordinanance No. 41, 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. 600596.20228\BASICDOCS 1 ''Bond Coonse]" means the firm of Gilmore & Bell, P.C., or any other attorney or firm of attorneys whose expertise in matters relating to the issuance of obligations by states and their political subdivisions is nationally recognized and acceptable to the Issuer. "Bond Payment Date" means any date on which principal of or interest on any Bond is payable. "Bond Register" means the books for the registration, transfer and exchange of Bonds kept at the office of the Bond Registrar. ''Bond Registrar'' means the State Treasurer and any successors and assigns. "Bond Resolution" means this resolution relating to the Bonds. "Bonds" or ''Bond" means the General Obligation Internal Improvement Bonds, Series 2023-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 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 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. "Costs of Issuance Account" means the Costs of Issuance Account for General Obligation Internal Improvement Bonds, Series 2023-A created pursuant to Section 501 hereof. "Dated Date" means August 17, 2023. "Debt Service Account" means the Debt Service Account for General Obligation Internal Improvement Bonds, Series 2023-A created within the Bond and Interest Fund pursuant to Section 501 hereof. "Debt Service Requirements" means the aggregate principal payments (whether at maturity or pursuant to scheduled mandatory sinking fund redemption requirements) and interest payments on the Bonds for the period of 6me 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. 600596.20228\BASICDOCS 2 ''Defaulted Interest" means interest on any Bond which is payable but not paid on any Interest Payment Date. "Defeasance Obligations" means any of the following obligations: (a) United States Government Obligations that are not subject to redemption in advance of their maturity dates; or (b) obligations of any state or political subdivision of any state, the interest on which is excluded from gross income for federal income tax purposes and which meet the following conditions: (1) the obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for such obligations has been given irrevocable instructions concerning their calling and redemption and the issuer of such obligations has covenanted not to redeem such obligations other than as set forth in such instructions; (2) the obligations are secured by cash or United States Government Obligations that may be applied only to principal of, premium, if any, and interest payments on such obligations; (3) such cash and the principal of and interest on such United States Government Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the obligations; (4) such cash and United States Government Obligations serving as security for the obligations are held in an escrow fund by an escrow agent or a trustee irrevocably in trust; (5) such cash and United States Government Obligations are not available to satisfy any other claims, including those against the trustee or escrow agent; and (6) such obligations are rated in a rating category by Moody's or Standard & Poor's that is no lower than the rating category then assigned by that Rating Agency to United States Government Obligations. "Derivative" means any investment instrument whose market price is derived from the fluctuating value of an underlying asset, index, currency, futures contract, including futures, options and collateralized mortgage obligations. "Disclosure Undertaking" means the Continuing Disclosure Undertaking, dated as of the 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. 600596.20228\BASICDOCS 3 "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 Bonds shall not be made when the same shall become due and payable, either at Stated Maturity or by proceedings for redemption or otherwise; (b) Payment of any installment of interest on any of the Bonds shall not be made when the same shall become due; or ( c) The Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in this Bond Resolution (other than the covenants relating to continuing disclosure requirements contained herein and in the Disclosure Undertaking) on the part of the Issuer to be performed, and such default shall continue for thirty (30) days after written notice specifying such default and requiring same to be remedied shall have been given to the Issuer by the Owner of any of the Bonds then Outstanding. "Federal Tax Certificate" means the Issuer's Federal Tax Certificate, dated as of the Issue Date, as the same may be amended or supplemented in accordance with the provisions thereof. "Finance Director'' means the duly appointed and acting Finance Director of the Issuer or, in the Finance Director's absence, the duly appointed Deputy, Assistant or Acting Finance Director of the Issuer. "Financeable Costs" means the amount of expenditure for an Improvement which has been duly authorized by action of the Governing Body to be financed by general obligation bonds, less: (a) the amount of any temporary notes or general obligation bonds of the Issuer which are currently Outstanding and available to pay such Financeable Costs; and (b) any amount of Financeable Costs which has been previously paid by the Issuer or by any eligible source of funds unless such amounts are entitled to be reimbursed to the Issuer under State or federal law. "Fiscal Year" means the twelve-month period ending on December 31. "Funds and Accounts" means funds and accounts created pursuant to or referred to in Section 501 hereof. "Governing Body" means the City Commission of the Issuer. "Improvement Fund" means the Improvement Fund for General Obligation Internal Improvement Bonds, Series 2023-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, 2024. "Issue Date" means the date when the Issuer delivers the Bonds to the Purchaser in exchange for the Purchase Price. 600596.20228\BASICDOCS 4 "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. "Notice Address" means with respect to the following entities: (a) To the Issuer at: City-County Building, 300 West Ash Street, Salina, Kansas 67 402 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: Robert W. Baird & Co., Inc. 777 E. Wisconsin Avenue, 25th Floor Milwaukee, Wisconsin 53202 (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 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. 600596.20228\BASICDOCS 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. 23-11155 of the Issuer authorizing the issuance of the Bonds, as amended from time to time. "Outstanding" means, when used with reference to the Bonds, as of a particular date of determination, all Bonds theretofore authenticated and delivered, except the following Bonds: (a) Bonds theretofore canceled by the Paying Agent or delivered to the Paying Agent for cancellation; (b) Bonds deemed to be paid in accordance with the provisions of Article VII hereof; and (c) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered hereunder. "Owner" when used with respect to any Bond means the Person in whose name such Bond is registered on the Bond Register. Whenever consent of the Owners is required pursuant to the terms of this Bond Resolution, and the Owner of the Bonds, as set forth on the Bond Register, is Cede & Co., the term Owner shall be deemed to be the Beneficial Owner of the Bonds. "Participants" means those financial institutions for whom the Securities Depository effects book- entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Paying Agent" means the State Treasurer and any successors and assigns. ''Permitted Investments" shall mean the investments hereinafter described, provided, however, no moneys or funds shall be invested in a Derivative: (a) investments authorized by KS.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); (j) 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 600596.20228\BASICDOCS 6 obligations of the municipality issuing the same; or (I) bonds of any municipality of the State as defined in K.S.A. 10-1101 which have been refunded in advance of their maturity and are fully secured as to payment of principal and interest thereon by deposit in trust, under escrow agreement with a bank, of securities described in (c) or (f), 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,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 a premium of $209,279.44. "Purchaser" means Robert W. Baird & Co., Inc., Milwaukee, Wisconsin, the original purchaser of the Bonds, and any successor and assigns. ''Rating Agency" means any company, agency or entity that provides, pursuant to request of the Issuer, financial ratings for the Bonds. "Rebate Fund" means the Rebate Fund for General Obligation Internal Improvement Bonds, Series 2023-A created pursuant to Section 501 hereof. "Record Dates" for the interest payable on any Interest Payment Date means the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. "Redemption Date" means, when used with respect to any Bond to be redeemed, the date fixed for the redemption of such Bond pursuant to the terms of this Bond Resolution. "Redemption Price" means, when used with respect to any Bond to be redeemed, the price at which such Bond is to be redeemed pursuant to the terms of this Bond Resolution, including the applicable redemption premium, if any, but excluding installments of interest whose Stated Maturity is on or before the Redemption Date. "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. "Securities Depository" means, initially, DTC, and its successors and assigns. "Special Record Date" means the date fixed by the Paying Agent pursuant to Article II hereof for the payment of Defaulted Interest. "Standard & Poor's" or "S&P" means S&P Global Ratings, a division of S&P Global Inc., a corporation organized and existing under the laws of the State of New York, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Standard & Poor's shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer. "State" means the state of Kansas. "State Treasurer" means the duly elected Treasurer or, in the Treasurer's absence, the duly appointed Deputy Treasurer or acting Treasurer of the State. 600596.20228\BASICDOCS 7 "Stated Maturity" when used with respect to any Bond or any installment of interest thereon means the date specified in such Bond and this Bond Resolution as the fixed date on which the principal of such Bond or such installment of interest is due and payable. "Substitute Improvements" means the substitute or additional improvements of the Issuer described in Article V hereof. "2038 Term Bonds" means the Bonds scheduled to mature in the year 2038. "2043 Term Bonds" means the Bonds scheduled to mature in the year 2043. "Term Bonds" means collectively the 2038 Term Bonds and the 2043 Term Bonds. "Treasurer" means the duly appointed and/or elected Treasurer of the Issuer or, in the Treasurer's absence, the duly appointed Deputy Treasurer or acting Treasurer of the Issuer. "United States Government Obligations" means bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United States of America, including evidences of a direct ownership interest in future interest or principal payment on obligations issued by the United States of America (including the interest component of obligations of the Resolution Funding Corporation), or securities which represent an undivided interest in such obligations, which obligations are rated in the highest rating category by a nationally recognized rating service and such obligations are held in a custodial account for the benefit of the Issuer. ARTICLE II AUTHORIZATION AND DETAILS OF THE BONDS Section 201. Authorization of the Bonds. The Bonds have been authorized and directed to be issued pursuant to the Ordinance in the principal amount of $2,955,000, for the purpose of providing funds to: (a) pay a portion of the costs of the Improvements; and (b) pay Costs of Issuance. Section 202. Description of the Bonds. The Bonds shall consist of fully registered bonds in an Authorized Denomination, and shall be numbered in such manner as the Bond Registrar shall determine. All of the Bonds shall be dated as of the Dated Date, shall become due in the amounts, on the Stated Maturities, subject to redemption and payment prior to their Stated Maturities as provided in Article III hereof, and shall bear interest at the rates per annum as follows: SERIAL BONDS Stated Maturity Principal Annual Rate Stated Maturity Principal Annual Rate October 1 Amount of Interest October 1 Amount of Interest 2024 $185,000 5.00% 2029 $260,000 5.00% 2025 215,000 5.00% 2030 275,000 5.00% 2026 230,000 5.00% 2031 290,000 5.00% 2027 240,000 5.00% 2032 305,000 4.00% 2028 250,000 5.00% 2033 315,000 4.00% 600596.20228\BASICDOCS 8 Stated Maturity October 1 2038 2043 TERM BONDS Principal Amount $175,000 215,000 Annual Rate of Interest 4.00% 4.00% 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 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 of KS.A. 10-501 et seq. and KS.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 check or draft mailed by the Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank ABA routing number and account number to which such Owner wishes to have such transfer directed. 600596.20228\BASICDOCS 9 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 3 0 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 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 shalJ be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of this Bond Resolution. The Issuer shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds provided for by this Bond Resolution and the cost of printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. In compliance with Code § 3406, such amount may be deducted by the Paying Agent from amounts otherwise payable to such Owner hereunder or under the Bonds. 600596.20228\BASICDOCS 10 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 employee of the Bond Registrar, but it shall not be necessary that the same officer or employee sign the certificate of authentication on all of the Bonds that may be issued hereunder at any one time. No Bond shall be entitled to any security or benefit under this Bond Resolution or be valid or obligatory for any purpose unless and until such certificate of authentication has been duly executed by the Bond Registrar. Such executed certificate of authentication upon any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Bond Resolution. Upon authentication, the Bond Registrar shall deliver the Bonds to the Purchaser upon instructions of the Issuer or its representative. 600596.20228\BASICDOCS 11 Section 208. Mutilated, Lost, Stolen or Destroyed Bonds. If (a) any mutilated Bond is surrendered to the Bond Registrar or the Bond Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Bond, and (b) there is delivered to the Issuer and the Bond Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the Issuer or the Bond Registrar that such Bond has been acquired by a bona fide purchaser, the Issuer shall execute and, upon the Issuer's request, the Bond Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and payable, the Issuer, in its discretion, may pay such Bond instead of issuing a new Bond. Upon the issuance of any new Bond under this Section, the Issuer and the Paying Agent may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent) connected therewith. Every new Bond issued pursuant to this Section shall constitute a replacement of the prior obligation of the Issuer, and shall be entitled to all the benefits of this Bond Resolution equally and ratably with all other Outstanding Bonds. Section 209. Cancellation and Destruction of Bonds Upon Payment. All Bonds that have been paid or redeemed or that otherwise have been surrendered to the Paying Agent, either at or before Maturity, shall be cancelled by the Paying Agent immediately upon the payment, redemption and surrender thereof to the Paying Agent and subsequently destroyed in accordance with the customary practices of the Paying Agent. The Paying Agent shall execute a certificate in duplicate describing the Bonds so cancelled and destroyed and shall file an executed counterpart of such certificate with the Issuer. Section 210. Book-Entry Bonds; Securities Depository. The Issuer and Paying Agent have entered into a DTC Representation Letter with DTC. The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds as provided in this Section. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless 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 discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b) if the Bond Registrar receives written notice from Participants having interests in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the 600596.20228\BASICDOCS 12 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 unsecured obligation of the Issuer, and the Owner thereof shall be entitled to look only to the Issuer for payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the Issuer shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Section 212. Preliminary and Final Oflicial Statement. The Preliminary Official Statement relating to the Bonds is hereby ratified and approved. For the purpose of enabling the Purchaser to comply with the requirements of Section (b )( 1) of the SEC Rule, the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be "final" as of its date, except for the omission of such information as is permitted by Section (b )( 1) of the SEC Rule, and the appropriate officers of the Issuer are hereby authorized, if requested, to provide the Purchaser a letter or certification to such effect 600596.20228\BASICDOCS 13 and to take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchaser to comply with the requirement of the SEC Rule. The Official Statement is hereby authorized to be prepared by supplementing, amending and completing the Preliminary Official Statement, with such changes and additions thereto as are necessary to conform to and describe the transaction. The Mayor and Finance Director are hereby authorized to execute the Official Statement as so supplemented, amended and completed, and the use and public distribution of the Official Statement by the Purchaser in connection with the reoffering of the Bonds is hereby authorized. The proper officials of the Issuer are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the Issue Date. The Issuer agrees to provide to the Purchaser within seven business days of the date of the sale of Bonds sufficient copies of the Official Statement to enable the Purchaser to comply with the requirements of the SEC Rule and Rule G-32 of the Municipal Securities Rulemaking Board. Section 213. Sale of the Bonds. The sale of the Bonds to the Purchaser is hereby ratified and confirmed. The Mayor and Finance Director are hereby authorized to execute the official bid form submitted by the Purchaser. Delivery of the Bonds shall be made to the Purchaser on the Issue Date (which shall be as soon as practicable after the adoption of this Bond Resolution), upon payment of the Purchase Price. ARTICLE III REDEMPTION OF BONDS Section 301. Redemption by Issuer. Optional Redemption. At the option of the Issuer, Bonds maturing on October 1 in the years 2032, and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2031, 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. Mandatory Redemption. (a) 2038 Term Bonds. The 2038 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 Article IV hereof which are to be deposited into the Debt Service Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year, the following principal amounts of such 2038 Term Bonds: *Final Maturity 600596.20228\BASICDOCS Principal Amount $30,000 35,000 35,000 35,000 40,000 14 Year 2034 2035 2036 2037 2038* (b) 2043 Term Bonds. The 2043 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 I 00% of the principal amount thereof plus accrued interest to the Redemption Date. The taxes levied in Article IV hereof which are to be deposited into the Debt Service Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year, the following principal amounts of such 2043 Term Bonds: *Final Maturity Principal Amount $40,000 40,000 45,000 45,000 45,000 Year 2039 2040 2041 2042 2043* 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 Redemption Date, furnish the Paying Agent a written certificate indicating to what extent the provisions of said clauses (1), (2) and (3) are to be complied with, with respect to such mandatory redemption payment. Section 302. Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the Issuer shall 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 minim.um 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 Authorized 600596.20228\BASICDOCS 15 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 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 case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; ( d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and ( e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the Issuer shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. For so long as the Securities Depository is affecting 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 600596.20228\BASICDOCS 16 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 required above 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 of Bonds being redeemed shall bear or have enclosed the CUSIP number of the Bonds being redeemed with the proceeds of such check or other transfer. The Paying Agent is also directed to comply with any mandatory standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. ARTICLE IV SECURITY FOR BONDS Section 401. Security for the Bonds. The Bonds shall be general obligations of the Issuer payable as to both principal and interest in part from special assessments levied 9pon 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 600596.20228\BASICDOCS 17 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) Improvement Fund for General Obligation Internal Improvement Bonds, Series 2023-A. (b) Debt Service Account for General Obligation Internal Improvement Bonds, Series 2023-A (within the Bond and Interest Fund). (c) Rebate Fund for General Obligation Internal Improvement Bonds, Series 2023-A. (d) Costs of Issuance Account for General Obligation Internal Improvement Bonds, Series 2023-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) An amount necessary to pay the Costs of Issuance shall be deposited in the Costs of Issuance Account. 600596.20228\BASICDOCS 18 (b) The remaining balance of the proceeds derived from the sale of the Bonds shall be deposited 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 and on file in the office of the Clerk, including any alterations in or amendments to said plans and specifications deemed advisable and approved by the Governing Body; (b) paying interest on the Bonds during construction of the Improvements; (c) paying Costs of Issuance; and ( d) transferring any amounts to the Rebate Fund required by this Article V. Withdrawals from the Improvement Fund shall be made only when authorized by the Governing Body. Each authorization for costs of the Improvements shall be supported by a certificate executed by the Finance Director (or designate) stating that such payment is being made for a purpose within the scope of this Bond Resolution and that the amount of such payment represents only the contract price of the property, equipment, labor, materials or service being paid for or, if such payment is not being made pursuant to an express contract, that such payment is not in excess of the reasonable value thereof. Authorizations for withdrawals for other authorized purposes shall be supported by a certificate executed by the Finance Director ( or designate) stating that such payment is being made for a purpose within the scope of this Bond Resolution. Upon completion of the Improvements, any surplus remaining in the Improvement Fund shall be deposited in the Debt Service Account. Section 504. Substitution of Improvements; Reallocation of Proceeds. (a) The Issuer may elect for any reason to substitute or add other public improvements to be financed with proceeds of the Bonds provided the following conditions are met: (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 in accordance with the laws of the State; (2) a resolution or ordinance authorizing the use of the proceeds of the Bonds to pay the Financeable Costs of the Substitute Improvement has been duly adopted by the Governing Body pursuant to this Section, (3) the Attorney General of the State has approved the amendment made by such resolution or ordinance to the transcript of proceedings for the Bonds to include the Substitute Improvements; and (4) the use of the proceeds of the Bonds to pay the Financeable Cost of the Substitute Improvement will not adversely affect.the tax-exempt status of the Bonds under State or federal law. (b) The Issuer may reallocate expenditure of Bond proceeds among all Improvements financed by the Bonds; provided the following conditions are met: ( 1) the reallocation is approved by the Governing Body; (2) the reallocation shall not cause the proceeds of the Bonds allocated to any Improvement to exceed the Financeable Costs of the Improvement; and (3) the reallocation will not adversely affect the tax-exempt status of the Bonds under State or federal law. Section 505. Application of Moneys in Debt Service Account. All amounts paid and credited to the Debt Service Account shall be expended and used by the Issuer for the sole purpose of paying the principal or Redemption Price of and interest on the Bonds as and when the same become due and the usual and customary fees and expenses of the Bond Registrar and Paying Agent. The Treasurer is authorized and directed to withdraw from the Debt Service Account sums sufficient to pay both principal or Redemption Price of and interest on the Bonds and the fees and expenses of the Bond Registrar and Paying Agent as and when the same become due, and to forward such sums to the Paying Agent in a manner which ensures that the Paying Agent will receive immediately available funds in such amounts on or before the Business Day immediately preceding the dates when such principal, interest and fees of the Bond Registrar and Paying Agent will become due. If, through the lapse of time or otherwise, the Owners of Bonds are no longer entitled to enforce payment of the Bonds or the interest thereon, the Paying Agent shall return said 600596.20228\BASICDOCS 19 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 deposited therein pursuant to the Federal Tax Certificate. All money at any time deposited in the Rebate Fund shall be held in trust, to the extent required to satisfy the Rebate Amount (as defined in the Federal Tax Certificate), for payment to the United States of America, and neither the Issuer nor the Owner of any Bonds shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and the Federal Tax Certificate. (b) The Issuer shall periodically determine the arbitrage rebate, if any, under Code§ 148(f) in accordance with the Federal Tax Certificate, and the Issuer shall make payments to the United States of America at the times and in the amounts determined under the Federal Tax Certificate. Any moneys remaining in the Rebate Fund after redemption and payment of all of the Bonds and payment and satisfaction of any Rebate Amount, or provision made therefor, shall be deposited into the Bond and Interest Fund. (c) Notwithstanding any other provision of this Bond Resolution, including in particular Article VII hereof, the obligation to pay arbitrage rebate to the United States of America and to comply with all other requirements of this Section and the Federal Tax Certificate shall survive the defeasance or payment in full of the Bonds. Section 507. Deposits and Investment of Moneys. Moneys in each of the Funds and Accounts shall be deposited in accordance with laws of the State, in a bank, savings and loan association or savings bank organized under the laws of the State, any other state or the United States: (a) which has a main or branch office located in the Issuer; or (b) if no such entity has a main or branch office located in the Issuer, with such an entity that has a main or branch office located in the county or counties in which the Issuer is located. All such depositaries shall be members of the Federal Deposit Insurance Corporation, or otherwise as permitted by State law. All such deposits shall be invested in Permitted Investments as set forth in this Article or shall be adequately secured as provided by the laws of the State. All moneys held in the Funds and Accounts shall be kept separate and apart from all other funds of the Issuer so that there shall be no commingling with any other funds of the Issuer. Moneys held in any Fund or Account may be invested in accordance with this Bond Resolution and the Federal Tax Certificate in Permitted Investments; provided, however, that no such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which such fund was created. All earnings on any investments held in any Fund or Account shall accrue to and become a part of such Fund or Account; provided that, during the period of construction of the Improvements, earnings on the investment of such funds may, at the discretion of the Issuer, be credited to the Debt Service Account. Section 508. 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. 600596.20228\BASICDOCS 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 rights of such Owner or Owners against the Issuer and its officers, agents and employees, and to require and compel duties and obligations required by the provisions of the Bond Resolution or by the Constitution and laws of the State; (b) by suit, action or other proceedings in equity or at law to require the Issuer, its officers, agents and employees to account as if.they were the trustees of an express trust; and ( c) by suit, action or other proceedings in equity or at law to enjoin any acts or things which may be unlawful or in violation of the rights of the Owners of the Bonds. Section 602. Limitation on Rights of Owners. The covenants and agreements of the Issuer contained herein and in the Bonds shall be for the equal benefit, protection, and security of the Owners of any or all of the Bonds, all of which Bonds shall be of equal rank and without preference or priority of one Bond over any other Bond in the application of the funds herein pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this Bond Resolution. No one or more Owners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Outstanding Bonds. Section 603. Remedies Cumulative. No remedy conferred herein upon the Owners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred herein. No waiver of any default or breach of duty or contract by the Owner of any Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No delay or omission of any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Owners of the Bonds by this Bond Resolution may be enforced and exercised from time to time and as often as may be deemed expedient. If action or proceedings taken by any Owner on account of any default or to enforce any right or exercise any remedy has been discontinued or abandoned for any reason, or shall have been determined adversely to such Owner, then, and in every such case, the Issuer and the Owners of the Bonds shall, 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. 600596.20228\BASICDOCS 21 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 federal income 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 Federal Tax Certificate in a form approved by Bond Counsel, for and on behalf of and as the act and deed of the Issuer. The Issuer will, in addition, adopt such other ordinances or resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable future laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Bonds will remain excluded from federal gross income, to the extent any such actions can be taken by the Issuer. Section 802. Survival of Covenants. The covenants contained in this Article and in the Federal Tax Certificate shall remain in full force and effect notwithstanding the defeasance of the Bonds pursuant to Article VII hereof or any other provision of this Bond Resolution until such time as is set forth in the Federal Tax Certificate. 600596.20228\BASICDOCS 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 902. Failure to Comply with Continuing Disclosure Requirements. In the event the Issuer fails to comply in a timely manner with its covenants contained in the preceding section, the Purchaser and/or any Beneficial Owner may make demand for such compliance by written notice to the Issuer. In the event the Issuer does not remedy such noncompliance within 10 days of receipt of such written notice, the Purchaser or any Beneficial Owner may in its discretion, without notice or demand, proceed to enforce compliance by a suit or suits in equity for the specific performance of such covenant or agreement contained in the preceding section or for the enforcement of any other appropriate legal or equitable remedy, as the Purchaser and/or any Beneficial Owner shall deem effectual to protect and enforce any of the duties of the Issuer under such preceding section. Notwithstanding any other provision of this Bond Resolution, failure of the Issuer to comply with its covenants contained in the preceding section shall not be considered an Event of Default under this Bond Resolution. ARTICLEX MISCELLANEOUS PROVISIONS Section 1001. Annual Audit. Annually, promptly after the end of the Fiscal Year, the Issuer will cause an audit to be made of the financial statements of the Issuer for the preceding Fiscal Year by an Independent Accountant. Within 30 days after the completion of each such audit, a copy thereof shall be filed in the office of the Clerk. Such audit shall at all times during the usual business hours be open to the examination and inspection by any taxpayer, any Owner of any of the Bonds, or by anyone acting for or on behalf of such taxpayer or Owner. Upon payment of the reasonable cost of preparing and mailing the same, a copy of any annual audit will, upon request, be sent to any Owner or prospective Owner. As soon as possible after the completion of the annual audit, the Governing Body shall review such audit, and if the audit discloses that proper provision has not been made for all of the requirements of this Bond Resolution, the Issuer shall promptly cure such deficiency. Section 1002. Amendments. The rights and duties of the Issuer and the Owners, and the terms and provisions of the Bonds or of this Bond Resolution, may be amended or modified at any time in any respect by ordinance or resolution of the Issuer with the written consent of the Owners of not less than a majority in principal amount of the Bonds then Outstanding, such consent to be evidenced by an instrument or instruments executed by such Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the Clerk, but no such modification or alteration shall: (a) extend the maturity of any payment of principal or interest due upon any Bond; (b) effect a reduction in the amount which the Issuer is required to pay as principal of or interest on any Bond; ( c) permit preference or priority of any Bond over any other Bond; or 600596.20228\BASICDOCS 23 (d) reduce the percentage in principal amount of Bonds required for the written consent to any modification or alteration of the provisions of this Bond Resolution. Any provision of the Bonds or of this Bond Resolution may, however, be amended or modified by ordinance or resolution duly adopted by the Governing Body at any time in any legal respect with the written consent of the Owners of all of the Bonds at the time Outstanding. Without notice to or the consent of any Owners, the Issuer may amend or supplement this Bond Resolution for the purpose of curing any formal defect, omission, inconsistency or ambiguity herein, to grant to or confer upon the Owners any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Owners, to more precisely identify the Improvements, to reallocate proceeds of the Bonds among Improvements, to provide for Substitute Improvements, to conform this Bond Resolution to the Code or future applicable federal law concerning tax-exempt obligations, or in connection with any other change therein which is not materially adverse to the interests of the Owners. Every amendment or modification of the provisions of the Bonds or of this Bond Resolution, to which the written consent of the Owners is given, as above provided, shall be expressed in a resolution or ordinance adopted by the Governing Body amending or supplementing the provisions of this Bond Resolution and shall be deemed to be a part of this Bond Resolution. A certified copy of every such amendatory or supplemental ordinance or resolution, if any, and a certified copy of this Bond Resolution shall always be kept on file in the office of the Clerk, and shall be made available for inspection by the Owner of any Bond or a prospective purchaser or owner of any Bond authorized by this Bond Resolution, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental ordinance or resolution or of this Bond Resolution will be sent by the Clerk to any such Owner or prospective Owner. Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the Clerk a copy of the ordinance or resolution of the Issuer hereinabove provided for, duly certified, as well as proof of any required consent to such modification by the Owners of the Bonds then Outstanding. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification. The Issuer shall furnish to the Paying Agent a copy of any amendment to the Bonds or this Bond Resolution which affects the duties or obligations of the Paying Agent under this Bond Resolution. Section 1003. Notices, Consents and Other Instruments by Owners. Any notice, consent, request, direction, approval or other instrument to be signed and executed by the Owners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Owners in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of this Bond Resolution, and shall be conclusive in favor of the Issuer and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument, namely: ( a) The fact and date of the execution by any person of any such instrument may be proved by a certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such instrument acknowledged before such officer the execution thereof, or by affidavit of any witness to such execution. (b) The fact of ownership of Bonds, the amount or amounts, numbers and other identification of Bonds, and the date of holding the same shall be proved by the Bond Register. 600596.20228\BASICDOCS 24 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 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 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 oflaw. Section 1006. 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. 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. (BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20228\BASICDOCS 25 ADOPTED by the City Commission on July 24, 2023. CERTIFICATE I hereby certify that the above and foregoing is a true and correct copy of the Bond Resolution of the Issuer adopted by the Governing Body on July 24, 2023, as the same appears of record in my office. DATED: July 24, 2023. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20228\BASICDOCS (Signature Page to Bond Resolution) EXHIBITA (FORM OF BONDS) REGISTERED NUMBER REGISTERED $ Interest Rate: 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 omER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA GENERAL OBLIGATION INTERNAL IMPROVEMENT BOND SERIES 2023-A Maturity Date: Dated Date: August 17, 2023 CUSIP: REGISTERED OWNER: PRINCIPAL AMOUNT: KNOW ALL PERSONS BY THESE PRESENTS: That the City of Salina, in the County of Saline, State of Kansas (the "Issuer"), for value received, hereby acknowledges itself to be indebted and promises to pay to the Registered Owner shown above, or registered assigns, but solely from the source and in the manner herein specified, the Principal Amount shown above on the Maturity Date shown above, unless called for redemption prior to 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, 2024 (the "Interest Payment Dates"), until the Principal Amount has been paid. Method and Place of Payment. The principal or redemption price of this Bond shall be paid at maturity or upon earlier redemption to the person in whose name this Bond is registered at the maturity or redemption date thereof, upon presentation and surrender of this Bond at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The interest payable on this Bond on any Interest Payment Date shall be paid to the person in whose name this Bond is registered on the registration books maintained by the Bond Registrar at the close of business on the Record Date(s) for such interest, which shall be the 15th day (whether or not a business day) of the calendar month next preceding the Interest Payment Date. Such interest shall be payable (a) by check or draft mailed by the Paying Agent to the address of such Registered Owner shown on the Bond Register or at such other 600596.20228\BASICDOCS A-1 address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. The principal or redemption price of and interest on the Bonds shall be payable in any coin or currency that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. Interest not punctually paid will be paid in the manner established in the within defined Bond Resolution. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the hereinafter defined Bond Resolution. Authorization of Bonds. This Bond is one of an authorized series of Bonds of the Issuer designated "General Obligation Internal Improvement Bonds, Series 2023-A," aggregating the principal amount of $2,955,000 (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. 12-6a01 et seq., and K.S.A. 13-1024a, as amended by Charter Ordinanance No. 41, 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 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, 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 600596.20228\BASICDOCS A-2 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=·1=e~) _______ _ Mayor ATTEST: By: ____ (=f=ac~s=irm=·1~e)~------- Clerk 600596.20228\BASICDOCS A-3 CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond is one of a series of General Obligation futernal Improvement Bonds, Series 2023-A, 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: 0322-085-081723-715 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. Dated ________ _ Name 600596.20228\BASICDOCS A-4 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 August 17, 2023. WITNESS my hand and official seal. (Facsimile Seal) By: ____ (=f=ac=s=inu==·te""").__ ______ _ Clerk CERTIFICATE OF STATE TREASURER OFFICE OF THE TREASURER, STATE OF KANSAS STEVEN JOHNSON, 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: (facsimile) Treasurer of the State of Kansas 600596.20228\BASICDOCS A-5 TRANSCRIPT CERTIFICATE $2,955,000 CITY OF SALINA, KANSAS Gilmore & Bell, P.C. 07/24/2023 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A DATED AUGUST 17, 2023 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 July 24, 2023, as follows: 1. Meaning of Words and Terms. Capitalized words and terms used herein, unless otherwise defined herein or the context requires otherwise, shall have the same meanings ascribed to such words and terms in the hereinafter defined Bond Resolution authorizing the Bonds. 2. Organization. The Issuer is a legally constituted city of the first class organized and existing under the laws of the State of Kansas. 3. Transcript of Proceedings. The transcript of proceedings (the "Transcript") relating to the authorization and issuance of the Bonds is to the best of our knowledge, information and belief full and complete; none of such proceedings have been modified, amended or repealed, except as might be shown in the Transcript, and the facts stated in the Transcript still exist. In each and every instance where copies appear in the Transcript, such copies are true and correct duplicates of the original instruments now on file with the Clerk. 4. Newspaper. The Salina Journal was the official newspaper of the Issuer at all times during these proceedings. 5. Meetings. All of the meetings of the governing body of the Issuer at which action was taken as shown in the Transcript were either regular meetings or duly adjourned regular meetings or special meetings duly called and held in accordance with law and the ordinances and rules of the Issuer. 600596.20228\CLOSING DOCS 6. Incumbency of Officers. The following named persons were and are the duly qualified and acting officers of the Issuer at and during all the times when action was taken as indicated in the Transcript as follows: Name Title Term of Office Mike Hoppock Mayor January 9, 2023 to Present Trent Davis Mayor January 10, 2022 to January 9, 2023 Melissa Rose Hodges Mayor January 11, 2021 to January 10, 2022 Mike Hoppock Mayor January 13, 2020 to January 11, 2021 Bill Longbine Vice-Mayor January 9, 2023 to Present Karl Ryan Vice-Mayor January 10, 2022 to January 9, 2023 Trent Davis Vice-Mayor January 11, 2021 to January 10, 2022 Melissa Rose Hodges Vice-Mayor January 13, 2020 to January 11, 2021 Greg Linkiewicz Commissioner January 10, 2022 to Present Bill Longbine Commissioner January 10, 2022 to Present Karl Ryan Commissioner April 20, 2015 to Present Rod Franz Commissioner January 13, 2020 to May 17, 2021 Melissa Rose Hodges Commissioner January 9, 2017 to January 10, 2022 Mike Hoppock Commissioner January 8, 2018 to Present Trent Davis Commissioner September 8, 2014 to Present Aaron Peck Commissioner May 17, 2021 to January 10, 2022 Jo Vonna Rutherford City Clerk March 25, 2021 to Present 7. Execution of Bonds. The Bonds have been executed with facsimile signatures; and the facsimile signatures appearing on the face of the Bonds are facsimiles of the true and genuine signatures of the Mayor and Clerk of the Issuer; which facsimiles are ratified as a proper execution of said Bonds. Each signature has either been duly filed in the office of the Secretary of State of Kansas pursuant to K.S.A. 75-4001 et seq. or executed in accordance with K.S.A. 16-1601 et seq. A facsimile of the seal of the Issuer is affixed to or imprinted on each of the Bonds and on the reverse side of each of the Bonds at the place where the Clerk has executed by facsimile signature the Certificate of Registration; and each Bond bears a Certificate of Registration evidencing the fact that it has been registered in the office of the Clerk. A true impression of the seal is set forth adjacent to the signature of the Clerk below. The specimen bond included in the Transcript is in the form adopted by the governing body of the Issuer for the Bonds. 8. Authorization and Purpose of the Bonds. The Bonds are being issued pursuant to and in full compliance with the Constitution and statutes of the State, including particularly K.S.A. 12-6a01 et seq. and K.S.A. 13-1024a, as amended by Charter Ordinanance No. 41, as amended, Ordinance No. 23- 11155 and Resolution No. 23-8140 of the Issuer duly adopted by the Governing Body of the Issuer on July 24, 2023 (collectively the "Bond Resolution") for the purpose of paying costs of issuance and paying a portion of the costs of certain internal improvements (the "Improvements"). The total principal amount of the Bonds does not exceed the cost of the Improvements for which the Bonds are issued. A Statement of Cost is attached hereto as Exhibit A and made a part hereof by reference as though fully set out herein. The interest rates on the 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. 600596.20228\CLOSING DOCS 2 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 Band made a part hereof by reference as though fully set out herein. 10. Valuation. The total assessed valuation of the taxable tangible property within the Issuer for the year 2022 is as follows: Equalized Assessed Valuation of Taxable Tangible Property ............................................................. . Tangible Valuation of Motor Vehicles ................................................ .. Equalized Assessed Tangible Valuation for Computation of Bonded Debt Limitations ................................ . $503,880,021 54.903.252 $558,783,273 11. Non-litigation. There is no controversy, suit or other proceedings of any kind pending or threatened wherein or whereby any question is raised or may be raised, questioning, disputing or affecting in any way: ( a) the legal organization of the Issuer or its boundaries; (b) the right or title of any of its officers to their respective offices; ( c) the legality of any official act shown to have been done in the Transcript; ( d) the constitutionality or validity of the indebtedness represented by the Bonds shown to be authorized in the Transcript; ( e) the validity of the Bonds, or any of the proceedings had in relation to the authorization, issuance or sale thereof; or (f) the levy and collection of a tax to pay the principal of and interest on the Bonds. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20228\CLOSING DOCS 3 WITNESS our true and genuine manual signatures and the seal of the Issuer. (SE 600596.20228\CLOSING DOCS (Signature Page to Transcript Certificate) EXHIBIT A STATEMENT OF COST Re: General Obligation Internal Improvement Bonds, Series 2023-A, Dated August 17, 2023, of the City of Salina, Kansas Sources of Funds: Principal Amount of the Bonds Underwriter's Discount Premium Total Uses of Funds: Deposit to Improvement Fund Costs of Issuance Total 600596.20228\CLOSING DOCS A-1 $2,955,000.00 -32,111.66 241.391.10 $3,164,279.44 $3,108,082.19 56.197.25 $3,164,279.44 EXHIBITB CITY OF SALINA, KANSAS SCHEDULE OF OUTSTANDING GENERAL OBLIGATION INDEBTEDNESS (as of August 17, 2023) Description of Indebtedness G.O. Bonds, Series 2013-A G.O. Bonds, Series 2015-A G.O. Bonds, Series 2016-A G.O. Ref. Bonds, Series 2016-B G.O. Bonds, Series 2017-A G.O. Bonds, Series 2018-A G.O. Bonds, Series 2019-A G.O. Bonds, Series 2020-A G.O. Ref. Bonds, Series 2020-B G.O. Bonds, Series 2021-A G.O. Ref. Bonds, Series 2021-B G.O. Bonds, Series 2022-A G.O. Bonds, Series 2023-A 600596.20228\CLOSING DOCS GENERAL OBLIGATION BONDS Dated Date 02/15/2013 07/29/2015 07/27/2016 07/27/2016 07/27/2017 11/27/2018 04/24/2019 04/29/2020 11/30/2020 04/29/2021 09/08/2021 04/28/2022 08/17/2023 Total Final Maturity 10/01/2028 10/01/2035 10/01/2036 10/01/2031 10/01/2037 10/01/2033 10/01/2039 10/01/2035 10/01/2036 10/01/2041 10/01/2034 10/01/2042 10/01/2043 TEMPORARY NOTES None B-1 Original Principal Amount $1,360,000 6,825,000 6,570,000 13,750,000 9,310,000 2,090,000 11,090,000 5,210,000 8,450,000 7,645,000 6,220,000 7,840,000 2,955,000 Amount Outstanding $630,000 4,420,000 4,925,000 8,205,000 7,520,000 1,630,000 10,015,000 4,135,000 6,785,000 7,420,000 5,620,000 7,840,000 2.955,000 $72,100,000 Office of the Kansas State Treasurer Bond Registration Intranet 900 SW Jackson St., Ste 201 ... Topeka, KS 66612-1235 ... 785-296-3171 July 24, 2023 Pam Jones Gilmore & Bell Pc 100 North Main, Suite 800 Wichita, KS 67202 RE: $2,955,000.00, City of Salina, Kansas General Obligation Internal Improvement Bonds, Series 2023-A Dated August 17, 2023, Registration #0322-085-081723-715 Dear Ms. Jones, 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 July 24, 2023. Sincerely, Shauna Wake, M.B.A. Director of Fiscal Services Office of the Kansas State Treasurer cc Pam Jones Gilmore & Bell Pc c.c. 100 North Main, Suite 800 Wichita, KS 67202 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 sha11 have the meanings assigned to such terms in the hereinafter defined Bond Resolution. Authorization of Bonds. This Bond is one of an authorized series of Bonds of the Issuer designated "General Obligation Internal Improvement Bonds, Series 2023-A," aggregating the principal amount of $2,955,000 (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 autho ·ty of and in full compliance with the provisions, restrictions and limitations of the Constitutio and law.s of the State of Kansas, including K.S.A. 12-6a01 et seq., and K.S.A. 13-1024a, as amendea ~ @Harte rdinanance No. 41, as amended, and all other provisions of the laws of the State of ansas app'Ii,ca e thereto. General Obligations. The Bonds constitute ener-obl · gatll s o e Issuer payable as to both principal and interest in part from special as essm ts evieo upon the property benefited by the construction of the Improvements and, i~t so, prud, f o a · valorem taxes which may be levied without limitation as to rate or amount upon al] tie taxab e tan rble property, real and personal, within the territorial limits of the Issuer. The balanc of ti ri ipal • d interest on the Bonds is payable from ad valorem taxes which may be levied witho im1 ation as to rate or amount upon all the taxable tangible property, real and personal, within the terri orial limits of the Issuer. The full faith, credit and resources of the Issuer are hereby irrevocah y; p:l~d For the prompt payment of the principal of and interest on the Bonds as the same become due. ;:;;,,/' Redemption Prior to Maturity. The Bonds are subject to redemption prior to maturity as set forth in the Bond Resolution. Book-Entry System. The Bonds are being issued by means of a book-entry system with no physical distribution of bond certificates to be made except as provided in the Bond Resolution. One Bond certificate with respect to each date on which the Bonds are stated to mature or with respect to each form of Bonds, registered in the nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book-entry system will evidence positions held in the Bonds by the Securities Depository's participants, beneficial ownership of the Bonds in authorized denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The Issuer and the Bond Registrar will recognize the Securities Depository nominee, while the Registered Owner of this Bond, as the owner of this Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Bond, (ii) notices and (iii) voting. Transfer of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfer of principal, interest and any redemption premium payments to beneficial owners of the Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial 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 2 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 e Bonds and the cost of a reasonable supply of bond blanks. The Issuer and the Paying Agenma ~~;an1!h1treat the person in whose name this Bond is registered on the Bond Register as the abso u ner, hereof or the purpose of receiving payment of, or on account of, the principal or redemptio pn e he of and interest due hereon and for all other purposes. The Bonds are issued in ful y reg· ere fo in Wuthorized Denominations. Authentication. This Bond s o ligatory for any purpose or be entitled to any security or benefit under the Bo ificate of Authentication and Registration hereon shall have been la u rar. CERTIFIED that all acts, conditions, and things required to be done and to exis p1:ec~e t t~ and in the issuance of this Bond have been properly done and performed and do exist in due and re lar form and manner as required by the Constitution and laws of the State of Kansas, and that th otal 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 .,, Mayor ATTEST: --; _)/4--: ~ /'1/'/' ',~I By: -==----:-7:;:;77~~-==;&;;;;;;;;;;;~~==- 3 CERTIFICATE OF STATE TREASURER OFFICE OF THE TREASURER, STATE OF KANSAS STEVEN JOHNSON, 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 August 17, 2023. WITNESS my hand and official seal. ~~~ 7 Printer's Certificate This will certify that Gilmore & Bell, P.C., Wichita, Kansas has printed and delivered $2,955,000 in registered Bonds for: UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A DATED AUGUST 17, 2023 The printed Bonds were delivered as twelve (12) pieces numbered R-1 to R-12 and six (6) BLANK pieces for re-registration. We also delivered two (2) SPECIMEN bonds clearly marked as such. All spoilage and press proofs needed in our manufacture have been destroyed. Gilmore & Bell, P.C. By Pam~ rD Pamela Jones AGREEMENT BETWEEN ISSUER AND AGENT $2,955,000 CITY OF SALINA, KANSAS Gilmore & Bell, P.C. 07/24/2023 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A DATED AUGUST 17, 2023 THIS AGREEMENT, dated as of August 17, 2023, between the City of Salina, Kansas, a municipality (the "Issuer"), and the State Treasurer of Kansas, as Agent (the "Agent"). WHEREAS, for its lawful purposes, the Issuer has duly authorized the issue of the above- captioned bonds (the "Securities"), and the Issuer wishes the Agent to act as its Paying Agent, Bond Registrar, and Transfer Agent for the Securities: Now, therefore, it is hereby agreed as follows: I. APPOINTMENT Issuer hereby appoints or has heretofore appointed the State Treasurer of Kansas to act as Paying Agent, Bond Registrar and Transfer Agent for the Securities. The State Treasurer of Kansas hereby accepts its appointment as the Paying Agent, Bond Registrar and Transfer Agent. II. BASIC DUTIES A. Issuer or its duly authorized representative agrees to furnish Agent the name(s) and address( es) of the initial registered owner( s) of the Securities together with such registered owners' tax identification (social security) number(s), the maturity date(s), denomination(s) and interest rate(s) for each Security. B. Agent shall manually authenticate the originally issued Securities upon the written order of one or more authorized officers of Issuer. Thereafter, Agent shall manually authenticate all Securities resulting from transfer or exchange of Securities. C. Agent shall maintain an office in the City of Topeka, Kansas, where Securities may be presented for registration, transfer and exchange; and shall also maintain an office in the City of Topeka, Kansas, where Securities may be presented for payment. Agent shall keep a register of the Securities and their transfer and exchange. D. Agent may rely upon any document believed by it to be genuine and to have been signed or presented by the proper person. Agent need not investigate any fact or matter stated in the document. Agent undertakes to perform such duties and only such duties set forth in K.S.A. 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 or interest on the Securities and the Agent shall have no duties or responsibilities thereafter. 600596.20228\CLOSING DOCS 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 $3,693.75, based on a percentage of the aggregate principal amount of the Securities as follows: 1/8 of 1 % (.125%) of the first $10,000,000 1/16 of 1% (.0625%) of the next $15,000,000 1/32 of 1 % (.03125%) of the next $25,000,000 1/64 of 1 % ( .015625%) of the next $50,000,000 1/128 of 1 % (.0078125%) over $100,000,000. 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 Securities are 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 Attorney General. All Statements shall be issued in the denominations of $1,000 or $5,000 or integral multiples thereof except for one additional Security in another denomination, which additional Security shall mature in the initial maturity year of the series of the Securities. Interest is computed on the basis of $1,000 or $5,000 units and in all transactions involving the payment of interest, fractions of a cent equalling or exceeding five mills shall be regarded as one cent; fractions of a cent less than five mills shall be disregarded. Agent shall at all times maintain an adequate supply of Statements of Ownership for any anticipated transfers or exchanges of the Statements. B. CERTIFICATED SECURITIES All certificated Securities issued by Issuer under this Agreement shall be in accordance with the standards set forth by the Attorney General and unless otherwise authorized by Agent, the principal thereof shall be payable only upon surrender of the Security to Agent. All certificates shall be issued in the denomination of $1,000 or $5,000 or integral multiples thereof except one authorized Security in another denomination which additional Security shall mature in the initial maturity year of the series of Securities. Interest is computed on the basis of $1,000 or $5,000 units and in all transactions involving the payment of interest, fractions of a cent equaling or exceeding five mills shall be regarded as one cent; fractions of a cent less than five mills shall be disregarded. Issuer shall at Issuer's cost provide Agent with an adequate supply of certificates for any anticipated transfers or exchanges of the certificates. Issuer shall be responsible for the payment of the printing or other expenses for such certificates. Issuer shall be responsible for obtaining appropriate "CUSIP" number(s) and shall notify Agent of each number(s) prior to the issuance of the applicable Securities. 600596.20228\CLOSING DOCS 2 C. INTEREST CALCULATIONS Agent shall calculate interest on the basis of $1,000 and $5,000 units, or in the case of one odd denomination, calculate the unit separately. Each intermediate unit calculation is first determined, then rounded to the sixth decimal position; i.e. whenever the seventh decimal place is equal to or greater than five the sixth decimal place is increased by one. The final per unit calculation is subsequently rounded to two decimal positions. (See Attachment "A" for sample calculation.) D. SURRENDER Securities surrendered for payment, cancellation or partial redemption shall be cancelled by Agent and returned to Issuer in accordance with K.S .A. 10-111 . E. TRANSFERS AND EXCHANGES 1. When Securities are presented to Agent for transfer or exchange, Agent shall so transfer or exchange such Securities if the requirements of Section 8-401 ( 1) of the Uniform Commercial Code are met. 2. In accordance with the authorizing Resolution or Ordinance of the Issuer (the "Bond Resolution"), payments of interest shall be made to the owner of record of each Security as of the close of business on the fifteenth day of the month preceding each interest payment date. The Agent shall make such payments to the record owner of each Security as set forth on the registration books maintained by Agent as of such date. 3. Agent shall not be required to transfer or exchange any Security during a period beginning on the day following the fifteenth day of the month preceding any interest payment date for such Securities and ending at the close of business on the interest payment date, or to transfer or exchange any Security selected or called for redemption in whole or in part subsequent to the date notice of such redemption is given in accordance with the Bond Resolution authorizing the Securities. F. REGISTRATION DATES AND FUNDS FOR PAYMENTS Date of Registration shall be affixed on the initial Securities. Subsequent transfers or exchanges shall bear a Date of Registration as of the date that all the required documentation is received at the Agent's official place of business. Issuer will provide funds to make any interest or principal payments in accordance with KS.A. 10-130 and amendments thereto. Agent is hereby authorized to effect any semiannual payment of interest or any principal by charging the Issuer's Fiscal Agency account with Agent. G. REPLACEMENT OF SECURITIES If the owner of a Security claims that a Security has been lost, destroyed or wrongfully taken, Issuer shall issue and Agent shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met. Only Agent shall perform this function. An indemnity bond and affidavit of loss shall be provided to Agent and Issuer at the expense of the owner of the Security. Such indemnity bond and affidavit of loss must be sufficient in the judgment of Issuer and Agent to protect Issuer and Agent 600596.20228\CLOSING DOCS 3 from any loss which any of them may suffer if the Security is replaced. Issuer may charge the Security owner for its expenses in the replacement of a Security. H. REDEMPTIONS Optional Redemption. If any Securities are to be redeemed pursuant to an optional redemption in accordance with their terms, Issuer agrees to give Agent at least fifteen (15) days written notice thereof prior to the notice to be given the Security owners. If there is no provision for notice to the Security owners, Issuer agrees to give at least thirty (30) days written notice to Agent. Mandatory Redemption. · If any Securities are subject to mandatory redemption in accordance with their terms of the Bond Resolution, no additional notice is required to be given to the Agent to exercise the mandatory redemption. The Agent will provide notice of such redemption utilizing substantially the form of Notice of Mandatory Redemption attached hereto as Appendix I. Notice of Redemption. Agent shall then notify, by ordinary mail, the owner of such Securities to be so redeemed. Agent shall select the Securities to be so redeemed. Agent shall not be required to exchange or register a transfer of any Security for a period of fifteen (15) days preceding the date notice is to be provided to the Security owners for the purpose of selecting Securities on a partial redemption. Further, in the event notice is given to Agent for a complete redemption of the Issue according to the terms of the Bond Resolution, Agent shall not be required to transfer or exchange any Security beginning on the day following the 15th day preceding the date set for redemption. I. MISCELLANEOUS Agent hereby acknowledges receipt of numbered Securities of Issuer (in a number equal to one Security for each maturity) for registration and exchange, and shall safeguard any "blank" Securities held for purpose of exchange or transfer. J. REPORTS Agent shall provide Issuer an annual report of the activity with respect to the issuance of Securities upon written request of Issuer. K. CONSTRUCTION This Agreement shall be construed in accordance with the laws of the State of Kansas and also the Bond Resolution authorizing the issuance of the Securities. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20228\CLOSING DOCS 4 ATTACHMENT "A" SAMPLE $5,000.00000 ........................ Bond Unit X .06875 ........................ Interest Rate = 343.750000 Rounded to six decimal places I 360 ........................ Days per year = .954861 Rounded to six decimal places X 180 ........................ Day in interest period = 171.874980 (Rounded to second decimal= $171.87) Unit interest is then multiplied by the number of units in the maturity. 600596.20228\CLOSING DOCS A-1 APPENDIX I NOTICE OF CALL FOR MANDATORY REDEMPTION TO THE OWNERS OF CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A, DATED AUGUST 17, 2023 Notice is hereby given that pursuant to the provisions of Article III of Resolution No. 23-8140 (the "Bond Resolution") of the City of Salina, Kansas (the "Issuer") that a portion of the above-mentioned bonds (the "Bonds") scheduled to mature [on October 1,][in] [2038][2043] (the "Called Bonds"), have been called for mandatory redemption and payment on October 1, [ __ ] (the "Redemption Date"), at the principal office of the Treasurer of the State of Kansas (the "Bond Registrar and Paying Agent"). Maturity Date (October 1) ~--] Principal Amount Interest Rate CUSIP Number On the Redemption Date there shall become due and payable, upon the presentation and surrender of each such Called Bond, the redemption price thereof equal to 100% of the principal amount thereof together with interest accrued to the Redemption Date. Bonds issued in denominations of greater than $5,000 may be subject to partial redemption. In such event, a new certificate or certificates will be issued to the Owner in the principal amount to remain Outstanding. 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. 600596.20228\CLOSING DOCS I-1 CITY OF SALINA, KANSAS By --------------- Treasurer of the State of Kansas, Topeka, Kansas SCHEDULE A (To Blanket Jssuer Letter of Representations) SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING BOOK-ENTRY-ONLY ISSUANCE (Prepared by DTC--bracketed material may be applicable only to certain issues) 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (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, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.] 2. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning oft he 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 "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 be found at www.dtcc.com. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC 's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confinnations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name ofDTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. Toe deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. Toe Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. BLOR 06-2013 SCHEDULEA (To Blanket Jssuer Letter of Representations) 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 regulatoiy requirements as may be in effect from time to time. [Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities m ay wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies 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. J 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/Remarketing] Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to [Tender/Remarketing] Agent's DTC account.) 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by 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-entiy-only transfers through DTC ( or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof. BLOR 06-2013 Moony's Rating Action: Moody's assigns Aa3 to City of Salina, KS' GO Bonds, Series 2023-A 17 Jul2023 New York, July 17, 2023 -Moody's Investors Service has assigned a Aa3 rating to the City of Salina, KS's approximately $3.2 million General Obligation Internal Improvement Bonds, Series 2023-A. Moody's maintains the city's Aa3 issuer and general obligation unlimited tax (GOUL T) ratings. Post-sale, the city will have about $175 million in total debt outstanding. RATINGS RATIONALE The Aa3 issuer rating reflects the city's positive financial perfonnance which has resulted in very strong operating reserves and liquidity, exclusive of funds received in fiscal 2021 from the US Department of Defense for environmental remediation of the former Schilling Air Force Base. The rating also incorporates the city's average long-term liabilities and fixed costs. Finally, the rating considers the city's economic metrics, which all lag Aa medians, but do not fully capture the stability inherent in Salina's status as the regional economic hub of north central Kansas. The city's GOULT bonds are rated Aa3, at the same level as the issuer rating, reflecting the city's irrevocable pledge of its full faith, credit and resources for the repayment of the bonds. RATING OUTLOOK Moody's does not usually assign outlooks to local governments with this amount of debt. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING -Material moderation of long-term liabilities and fixed costs -Trend of economic expansion resulting in significantly improved economic merrics FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING -Erosion of operating reserves or liquidity -Material increase of long-term liabilities and fixed costs -Trend of economic contraction resulting in weakened economic metrics LEGAL SECURITY The Series 2023-A bonds are payable from special assessments levied upon the property benefited 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 taxable tangible property, real and personal, within the territorial limited of the city. USE OF PROCEEDS Proceeds from the Series 2023-A bonds will be used to provide long-term financing for public improvements in the city. PROFILE The city of Salina is in north central Kansas (Aa2 stable), approximately 95 miles north of Wichita (Aa2 stable), near the geographic center of the contiguous United States, with a population ofapproximately47,000. METHODOLOGY The principal methodology used in this rating was US Cities and Counties Methodology published in November 2022 and available at https://ratings.moodys.com/rmc-documents/386953. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology. REGULATORY DISCLOSURES For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https://ratings.moodys.com/rating-definitions. 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CLOSING CERTIFICATE $2,955,000 CITY OF SALINA, KANSAS Gilmore & Bell, P.C. 07/24/2023 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A DATED AUGUST 17, 2023 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 August 17, 2023 (the "Issue Date"), as follows: 1. Meaning of Words and Terms. Capitalized words and terms used in this Certificate, unless otherwise defined in this Certificate or the context requires otherwise, have the same meanings ascribed to such words and terms in the Bond Resolution (defined below) authorizing the Bonds. 2. Transcript of Proceedings. The transcript of proceedings relating to the authorization and issuance of the Bonds (the ''Transcript"), furnished to the Purchaser of the Bonds, is to the best of our knowledge, information and belief full and complete; none of such proceedings have been modified, amended or repealed, except as might be shown in the Transcript; and the facts stated in the Transcript still exist. In each instance where copies appear in the Transcript, such copies are true and correct duplicates of the original instruments now on file with the Clerk. All certifications made by the Issuer in the Transcript Certificate dated July 24, 2023 are true and correct as of this date and are incorporated in this Certificate by reference. 3. Authorization and Purpose of the Bonds. The Issuer is issuing and delivering the Bonds simultaneously with the delivery of this Certificate, pursuant to and in full compliance with the Constitution and statutes of the State, including K.S.A. 12-6a01 et seq. and K.S.A. 13-1024a, as amended by Charter Ordinanance No. 41, as amended, Ordinance No. 23-11155 and Resolution No. 23-8140 of the Issuer duly adopted by the Governing Body of the Issuer on July 24, 2023 (collectively the "Bond Resolution") for the purpose of paying costs of issuance and paying a portion of the costs of certain internal improvements (the "Improvements"). 4. Security for the Bonds. The Bonds are general obligations of the Issuer payable in part from special assessments levied upon the property benefited by 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, 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, 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. S. Sale of Bonds. The Bonds have been sold at rates not in excess of the limitations set forth in K.S.A. 10-1009. The Notice of Bond Sale dated June 26, 2023 and included in the Transcript constitutes a 600596.20228\CLOSING DOCS 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, true and correct copy of the Official Statement relating to the Bonds. To the best of our knowledge, the Official Statement, other than the sections entitled "The Depository Trust Company," "Ratings," "Legal Matters," "Tax Matters," "Underwriting," and Appendix 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 Continuing Disclosure 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 our knowledge, 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 final Official Statement. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20228\CLOSING DOCS 2 600596.20228\FfC FEDERAL TAX CERTIFICATE Dated as of August 17, 2023 OF THE CITY OF SALINA, KANSAS $2,955,000 Gilmore & Bell, P.C. 08/09/2023 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A Section 1.01 Section 2.01 Section 2.02 Section 3.01 Section 3.02 Section 3.03 Section 3.04 Section 3.05 Section 3.06 Section 3.07 Section 3.08 Section 3.09 Section 3.10 Section 3.11 Section 3.12 Section 3.13 Section 3.14 Section 4.01 Section 4.02 Section 4.03 Section 4.04 Section 4.05 Section 4.06 600596.20228\FfC FEDERAL TAX CERTIFICATE TABLE OF CONTENTS ARTICLE I DEFINITIONS Definitions of Words and Terms ................................................................................... 1 ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS Representations and Covenants of the Issuer ................................................................ 6 Continuing Application of Representations and Covenants .......................................... 9 ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS General ........................................................................................................................ 10 Reasonable Expectations ............................................................................................. 10 Purpose of Financing ................................................................................................... 10 Funds and Accounts .................................................................................................... 10 Amount and Use of Bond Proceeds and Other Money ............................................... 10 Multipurpose Issue ...................................................................................................... 11 No Refunding .............................................................................................................. 11 Completion of Financed Improvements ...................................................................... 11 Sinking Funds .............................................................................................................. 11 Reserve, Replacement and Pledged Funds .................................................................. 11 Purpose Investment Yield ............................................................................................ 11 Issue Price and Bond Yield ......................................................................................... 11 Miscellaneous Arbitrage Matters ................................................................................ 12 Conclusion ................................................................................................................... 12 ARTICLE IV TAX COMPLIANCE POLICIES AND PROCEDURES General ........................................................................................................................ 12 Record Keeping; Use of Bond Proceeds and Use of Financed Improvements ........... 13 Restrictions on Investment Yield ................................................................................ 13 Procedures for Establishing Fair Market Value of Investments .................................. 14 Certain Gross Proceeds Exempt from the Rebate Requirement.. ................................ 16 Computation and Payment of Arbitrage Rebate .......................................................... 18 i Section 5.01 Section 5.02 Section 5.03 Section 5.04 Section 5.05 Section 5.06 Section 5.07 Section 5.08 Section 5.09 ARTICLE V MISCELLANEOUS PROVISIONS Term of Tax Certificate ............................................................................................... 19 Amenchnents ................................................................................................................ 19 Advice from Bond Counsel. ........................................................................................ 19 Reliance ....................................................................................................................... 19 Severability .................................................................................................................. 20 Benefit of Certificate ................................................................................................... 20 Default, Breach and Enforcement. .............................................................................. 20 Governing Law ............................................................................................................ 20 Electronic Transactions ............................................................................................... 20 LIST OF EXHIBITS TO FEDERAL TAX CERTIFICATE A. IRS FORM 8038-G Evidence of filing B. RECEIPT FOR PURCHASE PRICE C. RECEIPT AND REPRESENTATION C-1. CERTIFICATE OF MUNICIPAL ADVISOR D. DESCRIPTION OF PROPERTY COMPRISING THE FINANCED IMPROVEMENTS E. SAMPLE ANNUAL COMPLIANCE CHECKLIST Schedule 1 Debt Service Schedule and Proof of Yield * * * 600596.20228\FTC 11 FEDERAL TAX CERTIFICATE TIDS FEDERAL TAX CERTIFICATE (the "Tax Certificate") is executed as of August 17, 2023 (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 $2,955,000 principal amount of General Obligation Internal Improvement Bonds, Series 2023-A (the "Bonds"), under Ordinance No. 23-11155 and Resolution No. 23-8140 of the Issuer duly adopted by the governing body of the Issuer on July 24, 2023 (collectively, the "Bond Resolution"), 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(f). 4. The Issuer adopted a Tax and Securities Compliance Policy and Procedure, dated June 11, 2012 (the "Tax Compliance Procedure") for the purpose of setting out general procedures for the Issuer to continuously monitor and comply with the federal income tax requirements set out in the Code and the Regulations. 5. This Tax Certificate is entered into as required by the Tax Compliance Procedure to set out specific tax compliance procedures applicable to the Bonds. NOW, THEREFORE, in consideration of the foregoing and the mutual representations, covenants and agreements set forth in this Tax Certificate, the Issuer represents, covenants and agrees as follows: ARTICLE I DEFINITIONS Section 1.01 Definitions of Words and Terms. Except as otherwise provided in this Tax Certificate or unless the context otherwise requires, capitalized words and terms used in this Tax Certificate have the same meanings as set forth in the Bond Resolution, and certain other words and phrases have the meanings assigned in Code§§ 103, 141-150 and the Regulations. The following words and terms used in this Tax Certificate have the following meanings: 600596.20228\FTC "Adjusted Gross Proceeds" means the Gross Proceeds of the Bonds reduced by amounts: (a) in a Bona Fide Debt Service Fund or a reasonably required reserve or replacement fund; (b) that as of the Issue Date, are not expected to be Gross Proceeds, but which arise after the end of the applicable spending period; and ( c) representing grant repayments or sale or Investment proceeds of any purpose Investment. "Annual Compliance Checklist" means a checklist for the Bonds designed to measure compliance with the requirements of this Tax Certificate and the Tax Compliance Procedure after the Issue Date, and substantially in the form attached as Exhibit E. "Available Construction Proceeds" means the sale proceeds of the Bonds, increased by: (a) Investment earnings on the sale proceeds; (b) earnings on amounts in a reasonably required reserve or replacement fund allocable to the Bonds but not funded from the Bonds; and ( c) earnings on such earnings, reduced by sale proceeds (1) in any reasonably required reserve fund or (2) used to pay issuance costs of the Bonds. But Available Construction Proceeds do not include Investment earnings on amounts in a reasonably required reserve or replacement fund after the earlier of: (a) the second anniversary of the Issue Date; or (b) the date the Financed Improvement are substantially completed. "Bona Fide Debt Service Fund" means a fund, which may include Bond proceeds, that: (a) is used primarily to achieve a proper matching of revenues with principal and interest payments within each Bond Year; and (b) is depleted at least once each Bond Year, except for a reasonable carryover amount not to exceed the greater of (1) the earnings on the fund for the immediately preceding Bond Year, or (2) one-twelfth of the principal and interest payments on the Bonds for the immediately preceding Bond Year. ''Bond" or "Bonds" means any bond or bonds described in the recitals, authenticated and delivered under the Bond Resolution. "Bond Compliance Officer" means the Issuer's Finance Director or other person named in the Tax Compliance Procedure. "Bond Counsel" means Gilmore & Bell, P.C., or other firm of nationally recognized bond counsel acceptable to the Issuer. ''Bond Resolution" means Ordinance No. 23-11155 and Resolution No. 23-8140 of the Issuer duly adopted by the governing body of the Issuer on July 24, 2023, as originally executed by the Issuer, as amended and supplemented in accordance with the provisions of the Bond Resolution. "Bond Year" means each one-year period (or shorter period for the first Bond Year) ending October 1 or another one-year period selected by the Issuer. "Code" means the Internal Revenue Code of 1986, as amended. "Computation Date" means each date on which arbitrage rebate for the Bonds is computed. The Issuer may treat any date as a Computation Date, subject to the following limits: (a) The first rebate installment payment must be made for a Computation Date not later than 5 years after the Issue Date; (b) Each subsequent rebate installment payment must be made for a Computation Date not later than 5 years after the previous Computation Date for which an installment payment was made; and 600596.20228\FfC 2 ( c) The date the last Bond is discharged is the final Computation Date. The Issuer selects August 1, 2028, or as otherwise specified herein, as the first Computation Date but reserves the right to select a different date consistent with the Regulations. "Final Written Allocation" means the Final Written Allocation of expenditures prepared by the Bond Compliance Officer in accordance with the Tax Compliance Procedure and Section 4.02(b) of this Tax Certificate. "Financed Improvements" means the portion of the Improvements financed or refinanced with the proceeds of the Bonds 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, and (e) any other replacement proceeds. Specifically, the term Gross Proceeds includes (but is not limited to) amounts held in the following funds and accounts: (1) Improvement Fund. (2) Debt Service Account. (3) Rebate Fund (to the extent funded with sale proceeds or Investment proceeds of the Bonds). ( 4) Costs of Issuance Account. "Guaranteed Investment Contract" is any Investment with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate, including any agreement to supply Investments on two or more future dates (e.g., a forward supply contract). "Improvements" means all of the property acquired, developed, constructed, renovated, and equipped by the Issuer using Bond proceeds and other money contributed by the Issuer, as described on ExhibitD. "Investment" means any security, obligation, annuity contract or other investment-type property that is purchased directly with, or otherwise allocated to, Gross Proceeds. This term does not include a tax-exempt bond, except for a "specified private activity bond" as defined in Code § 57(a)(5)(C). "IRS" means the United States Internal Revenue Service. "Issue Date" means August 17, 2023. ''Issuer'' means the City of Salina, Kansas, and its successors and assigns, or any body, agency or instrumentality of the State succeeding to or charged with the powers, duties and functions of the Issuer. "Management Agreement" means a legal agreement defined in Regulations § 1.141-3(b) as a management, service, or incentive payment contract with an entity that provides services involving all or 600596.20228\FfC 3 a portion of any function of the Financed Improvements, such as a contract to manage the entire Financed Improvements or a portion of the Financed Improvements. However, contracts for services that are solely incidental to the primary governmental function of the Financed Improvements (for example, contracts for janitorial, office equipment repair, billing, or similar services) are not treated as Management Agreements. "Measurement Period" means, with respect to each item of property financed as part of the Financed Improvements, the period beginning on the later of: (a) the Issue Date, or (b) the date the property is placed in service and ending on or the earlier of (1) the final maturity date of the Bonds or (2) the expected economic useful life of the property. "Minor Portion" means the lesser of $100,000 or 5% of the sale proceeds of the Bonds. "Net Proceeds" means, when used in reference to the Bonds, the sale proceeds of the Bonds (excluding pre-issuance accrued interest), less any proceeds deposited in a reasonably required reserve or replacement fund, plus all Investment earnings on such sale proceeds. "Non-Qualified Use" means use of Bond proceeds or the Financed Improvements in a trade or business carried on by any Non-Qualified User. The rules set out in Regulations § 1.141-3 determine whether Bond proceeds or the Financed Improvements are "used" in a trade or business. Generally, ownership, a lease, or any other use that grants a Non-Qualified User a special legal right or entitlement with respect to the Financed Improvements, will constitute use under Regulations§ 1.141-3. "Non-Qualified User" means any person or entity other than a Qualified User. ''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 Bonds; and (b) costs incurred in an amount not in excess of the lesser of $100,000 or 5% of the sale proceeds of the Bonds. "Purchaser" means Robert W. Baird & Co., Inc., Milwaukee, Wisconsin, 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 the Financed Improvements on a short-term basis in the ordinary course of the Issuer's governmental purposes. (b) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Improvements for a period up to 200 days in length pursuant to an arrangement whereby (1) the use of the Financed Improvements under the same or similar arrangements is predominantly by natural persons who are not engaged in a trade or business and (2) the compensation for the use is determined based on generally applicable, fair market value rates that are in effect at the time the agreement is 600596.20228\FTC 4 entered into or renewed. Any Qualified User or Non-Qualified User using all or any portion of the Financed Improvements under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. (c) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Improvements for a period up to 100 days in length pursuant to arrangements whereby (1) the use of the property by the person would be general public use but for the fact that generally applicable and uniformly applied rates are not reasonably available to natural persons not engaged in a trade or business, (2) the compensation for the use under the arrangement is determined based on applicable, fair market value rates that are in effect at the time the agreement is entered into or renewed, and (3) the Financed Improvements was not constructed for a principal purpose of providing the property for use by that Qualified User or Non-Qualified User. Any Qualified User or Non-Qualified User using all or any portion of the Financed Improvements under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. (d) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Improvements for a period up to 50 days in length pursuant to a negotiated arm's-length arrangement at fair market value so long as the Financed Improvements was not constructed for a principal purpose of providing the property for use by that person. "Qualified User" means a state, territory, possession of the United States, the District of Columbia, or any political subdivision thereof, or any instrumentality of such entity, but it does not include the United States or any agency or instrumentality of the United States. "Reasonable Retainage" means Gross Proceeds retained by the Issuer for reasonable business purposes, such as to ensure or promote compliance with a construction contract; provided that such amount may not exceed: (a) for purposes of the 18-month spending test, 5% of Net Proceeds of the Bonds on the date 18 months after the Issue Date, or (b) for purposes of the 2-year spending test, 5% of the Available Construction Proceeds as of the end of the 2-year spending period. "Rebate Analyst" means Gilmore & Bell, P.C. or any successor rebate analyst selected pursuant to this Tax Certificate. "Regulations" means all Regulations issued by the U.S. Treasury Department to implement the provisions of Code§§ 103 and 141 through 150 and applicable to the Bonds. "State" means the State of Kansas. "Tax Certificate" means this Federal Tax Certificate as it may from time to time be amended and supplemented in accordance with its terms. "Tax Compliance Procedure" means the Issuer's Tax and Securities Compliance Policy and Procedure, dated June 11, 2012, as amended and supplemented in accordance with the terms of the Tax Compliance Procedure. "Tax-Exempt Bond File" means documents and records for the Bonds, maintained by the Bond Compliance Officer pursuant to the Tax Compliance Procedure. "Transcript" means the Transcript of Proceedings relating to the authorization and issuance of the Bonds. 600596.20228\FTC 5 "Yield" means yield on the Bonds, computed under Regulations § 1.148-4, and yield on an Investment, computed under Regulations§ 1.148-5. 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 its power or direction) will not use any money on deposit in any fund or account maintained in connection with the Bonds, whether or not such money was derived from the proceeds of the sale of the Bonds or from any other source, in a manner that would cause the Bonds to be "arbitrage bonds," within the meaning of Code§ 148, and will not (to the extent within its power or direction) otherwise use or permit the use of any Bond proceeds or any other funds of the Issuer, directly or indirectly, in any manner, or take or permit to be taken any other action or actions, that would cause interest on the Bonds to be included in gross income for federal income tax purposes. (c) 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) no portion of the Financed Improvements is expected to be used in a Non-Qualified Use; and (3) the Issuer will not permit any Non-Qualified Use of the Financed Improvements without first consulting with Bond Counsel. The Issuer will monitor the usage of all portions of the Financed Improvements during the Measurement Period. If the Non-Qualified Use of the Financed Improvements exceeds 10% of the total use over the Measurement Period, then the Issuer wi11 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, the Issuer expects that none of the principal and interest on the Bonds will be (under the terms of the Bonds or any underlying arrangement) directly or indirectly: (1) secured by (i) any interest in property used or to be used for a Non-Qualified Use, or (ii) any interest in payments in respect of such property; or (2) derived from payments (whether or not such payments are made to the Issuer) in respect of property, or borrowed money, used or to be used for a Non-Qualified Use. 600596.20228\FTC 6 For purposes of the foregoing, taxes of general application, including payments in lieu of taxes, are not treated as private payments or as private security. The Issuer will not permit any private security or payment with respect to the Bonds without first consulting with Bond Counsel. (e) No Private Loan, Special Assessments. Not more than 5% of the Net Proceeds of the Bonds will be loaned directly or indirectly to any Non-Qualified User. The payment of principal and interest on the Bonds will be funded, in whole or in part from mandatory special assessments against the property benefiting from the Financed Improvements financed by the Bonds. The use of the proceeds of the Bonds is not treated as a loan of the Bond proceeds because (1) the special assessment is an enforced contribution for the purpose of raising revenue for specific capital improvements; (2) the assessment does not include any fee for services; (3) the imposition and collection of the 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 assessment is imposed to pay for an essential governmental function. (t) Management Agreements. As of the Issue Date, the Issuer has no Management Agreements with Non-Qualified Users. During the Measurement Period, the Issuer will not enter into or renew any Management Agreement with any Non-Qualified User without first consulting with Bond Counsel. (g) Leases. As of the Issue Date, the Issuer has not entered into any leases of any portion of the Financed Improvements 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) Intentionally Omitted. (i) 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. (j) Expenditure of Bond Proceeds. (1) Reimbursement of Expenditures; Official Intent. The governing body of the Issuer adopted one or more resolutions declaring the intent of the Issuer to finance the Financed Improvements with tax-exempt bonds or other obligations and to reimburse the Issuer for expenditures made for the Financed Improvements prior to the issuance of those bonds. No portion of the Net Proceeds of the Bonds will be 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. The Issuer will evidence each allocation of the proceeds of the Bonds to an expenditure in writing. No reimbursement allocation will be made for an expenditure made more than 3 years before the date of the reimbursement allocation. In addition, no reimbursement allocation will be made more than 18 months following the later of (A) the date of the expenditure or (B) the date the Financed Improvements were placed in service, or in the event the Bonds are exempt from arbitrage rebate calculation pursuant to Code § 148(t)(4)(D), no reimbursement allocation will be made more than 3 years following the later of (A) the date of the expenditure or (B) the date the Financed Improvements were placed in service. 600596.20228\FTC 7 (2) Final Allocation of Bond Proceeds to Expenditures. The Issuer understands that, under Regulations § 1.148-6( d), the Issuer is required to account for the allocation of Bond proceeds to Improvement expenditures (including expenditures made before and after the Issue Date) within 18 months after the later of (A) the date the expenditure is made, or (B) the date the Improvements are placed in service, and in any event not later than the date that is 60 days after the fifth anniversary of the Issue Date, or the date the Bonds are retired, if earlier (a "Final Allocation"). The Issuer will maintain accurate 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) initially allocated to each Improvement expenditure. Not later than the time limit set forth above, the Issuer will prepare a Final Allocation, showing the allocation of Bond proceeds and other money to all Improvement costs and identifying the Financed Improvement, and will maintain the Final Allocation in its books and records in accordance with Section 4.02 hereof. The Issuer reserves the right to make modifications to the expected allocation of Bond proceeds and other money for purposes of compliance with the limitations on Non-Qualified Use following completion of the Financed Improvement in accordance with, and within the time limits prescribed in, the Regulations. In the absence of such subsequent allocation, the Bond proceeds will be deemed allocated as shown on ExhibitD. (k) Registered Bonds. The Bond Resolution requires that all of the Bonds will be issued and held in registered form within the meaning of Code§ 149(a). (1) Bonds Not Federally Guaranteed. The Issuer will not take any action or permit any action to be taken which would cause any Bond to be "federally guaranteed" within the meaning of Code § 149(b). (m) IRS Form 8038-G. Bond Counsel will prepare IRS Form 8038-G (Information Return for Tax-Exempt Governmental Obligations) based on the representations and covenants of the Issuer contained in this Tax Certificate or otherwise provided by the Issuer. Bond Counsel will sign the return as a paid preparer following completion and will then deliver copies to the Issuer for execution and for the Issuer's records. The Issuer agrees to timely execute and return to Bond Counsel the execution copy of Form 8038-G for filing with the IRS. A copy of the IRS Form 8038-G as filed with the IRS with proof of filing will be included in Exhibit A of Tax Certificate. (n) Hedge Bonds. At least 85% of the Net Proceeds of the Bonds will be used to carry out the governmental purpose of the Bonds within 3 years after the Issue Date, and not more than 50% of the proceeds of the Bonds will be invested in Investments having a substantially guaranteed Yield for four years or more. (o) 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 the Bonds, (2) are being sold under the same plan of financing as the Bonds, and (3) are expected to be paid from substantially the same source of funds as the Bonds (disregarding guarantees from unrelated parties, such as bond insurance). (p) Interest Rate Swap. As of the Issue Date, the Issuer has not entered into an interest rate swap agreement or any other similar arrangement designed to modify its interest rate risk with respect to the Bonds. The Issuer will not enter into any such arrangement in the future without first consulting with Bond Counsel. 600596.20228\FfC 8 (q) Guaranteed Investment Contract. As of the Issue Date, the Issuer does not expect to enter into a Guaranteed Investment Contract for the investment of 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. (r) Bank Qualified Tax-Exempt Obligation. The Issuer designates the Bonds as "qualified tax-exempt obligations" under Code§ 265(b)(3), and with respect to this designation certifies as follows: (1) The Issuer reasonably anticipates that the amount of tax-exempt obligations (other than (A) private activity bonds that are not qualified 501(c)(3) bonds and (B) current refunding bonds to the extent not exceeding the amount of refunded bonds) that will be issued by or on behalf of the Issuer (and all subordinate entities of the Issuer) during the calendar year that the Bonds are issued, including the Bonds, will not exceed $10,000,000; and (2) the Issuer (including all subordinate entities of the Issuer) will not issue tax- exempt obligations (other than (A) private activity bonds that are not qualified 501(c)(3) bonds and (B) current refunding bonds to the extent not exceeding the amount of refunded bonds) during the calendar year that the Bonds are issued, including the Bonds, in an aggregate principal amount or aggregate issue price in excess of $10,000,000, without first consulting with Bond Counsel that the designation of the Bonds as "qualified tax-exempt obligations" will not be adversely affected. (s) General Allocation and Accounting. The Improvements are expected to be financed in part with proceeds of the Bonds and in part with other funds of the Issuer. The portion of the Improvements financed with proceeds of the Bonds 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 Bonds. 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. (t) Compliance with Future Tax Requirements. The Issuer understands that the Code and the Regulations may impose new or different restrictions and requirements on the Issuer in the future. The Issuer will comply with such future restrictions that are necessary to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes. Section 2.02 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. 600596.20228\FfC 9 ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS Section 3.01 General. The purpose of this Article is to certify, under Regulations § l.148- 2(b), the Issuer's expectations as to the sources, uses and investment of Bond proceeds and other money, in order to support the Issuer's conclusion that the Bonds are not arbitrage bonds. The person executing this Tax Certificate on behalf of the Issuer is an officer of the Issuer responsible for issuing the Bonds. Section 3.02 Reasonable Expectations. The facts, estimates and expectations set forth in this Article are based upon and in reliance upon the Issuer's understanding of the documents and certificates that comprise the Transcript, and the representations, covenants and certifications of the parties contained therein. To the Issuer's knowledge, the facts and estimates set forth in this Tax Certificate are accurate, and the expectations of the Issuer set forth in this Tax Certificate are reasonable. The Issuer has no knowledge that would cause it to believe that the representations, warranties and certifications described in this Tax Certificate are unreasonable or inaccurate or may not be relied upon. Section 3.03 Purpose of Financing. The Bonds are being issued for the purpose of providing funds to pay: (a) a portion of the costs of the Financed Improvements; and (b) Costs oflssuance. Section 3.04 Funds and Accounts. The following funds and accounts have been established under the Bond Resolution: (a) Improvement Fund. (b) Debt Service Account. (c) Rebate Fund. ( d) Costs of Issuance Account. Section 3.05 Amount and Use of Bond Proceeds and Other Money. (a) Amount of Bond Proceeds. The total proceeds to be received by the Issuer from the sale of 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 Purchase Price Less Good Faith Deposit Net Amount $2,955,000.00 -32,111.66 241.391.10 $3,164,279.44 -60,100.00 $3,104,179.44 (b) Use of Bond Proceeds. The Bond proceeds are expected to be allocated to expenditures as follows: (1) The sum of $56,197.25 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 $3,108,082.19 will be deposited to the Improvement Fund, of which amount $2,994,636.57 will be used to reimburse the Issuer for costs of the Financed Improvements paid before the Issue Date and the balance (113,445.62) will be used to pay future costs of the Financed Improvements. 600596.20228\FTC (c) Use of Other Moneys. In addition to proceeds of the Bonds, the Issuer will allocate available moneys representing available funds of the Issuer in an approximate amount of $1,566,000 to pay a portion of the costs of the Improvements. Section 3.06 Multipurpose Issue The Issuer is applying the arbitrage rules to separate financing purposes of the issue as if they constitute separate issues pursuant to Regulations § 1.148- 9(h)(2). Under Regulations § 1.148-9(h), each separate capital project (i.e., capital projects that are not integrated or functionally related) financed or refinanced with proceeds of the Bonds will be treated as a separate issue for purposes of applying certain of the arbitrage restrictions under Code § 148. The sale proceeds of the Bonds allocable to each purpose are set forth on Exhibit D hereto. Section 3.07 No Refunding. No proceeds of the Bonds will be used to pay principal or interest on any other debt obligation. Section 3.08 Completion of Financed Improvements. The Issuer has incurred, or will incur within 6 months after the Issue Date, a substantial binding obligation to a third party to spend at least 5% of the Net Proceeds of the Bonds on the Financed Improvements. The completion of the Financed Improvements and the allocation of the Net Proceeds of the Bonds to expenditures will proceed with due diligence. At least 85% of the Net Proceeds of the Bonds will be allocated to expenditures on the Financed Improvements within 3 years after the Issue Date. Section 3.09 Sinking Funds. The Issuer is required to make periodic payments in amounts sufficient to pay the principal of and interest on the Bonds. Such payments will be deposited into the Debt Service Account. Except for the Debt Service Account, no sinking fund or other similar fund that is expected to be used to pay principal of or interest on the Bonds has been established or is expected to be established. The Debt Service Account is used primarily to achieve a proper matching of revenues with principal and interest payments on the Bonds within each Bond Year, and the Issuer expects that the Debt Service Account will qualify as a Bona Fide Debt Service Fund. Section 3.10 Reserve, Replacement and Pledged Funds. (a) No Reserve Fund. No reserve fund has been or will be established for the Bonds. (b) No Replacement or Pledged Funds. None of the Bond proceeds will be used as a substitute for other funds that were intended or earmarked to pay costs of the Financed Improvements, 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 and the Municipal Advisor's certifications in Exhibit C-1, the Issuer hereby elects to establish the issue prices of the Bonds pursuant to Regulations§ l.148-l(f)(2)(iii) (relating to the so-called "competitive sales rule"). Therefore, the aggregate issue price of the Bonds for such purpose is $3,196,391.10, without accrued interest. 600596.20228\FfC 11 (b) Bond Yield. Based on the aggregate issue prices of the Bonds set forth in subsection (a), the Yield on the Bonds is 3.105225%, 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 or series of transactions that has the effect of: (1) enabling the Issuer to exploit the difference between tax- exempt and taxable interest rates to gain a material financial advantage, and (2) overburdening the tax- exempt bond market. (b) No Over-Issuance. The sale proceeds of the Bonds, together with expected Investment earnings thereon and other money contributed by the Issuer, do not exceed the cost of the governmental purpose of the Bonds as described above. 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 Compliance Procedure and to set out specific policies and procedures governing compliance with the federal income tax requirements that apply after the Bonds are issued. The Issuer recognizes that interest on the Bonds will remain excludable from gross income only if the Post-Issuance Tax Requirements are followed after the Issue Date. The Issuer further acknowledges that written evidence substantiating compliance with the Post-Issuance Tax Requirements must be retained in order to permit the Bonds to be refinanced with tax- exempt obligations and substantiate the position that interest on the Bonds is exempt from gross income in the event of an audit of the Bonds by the IRS. (b) Written Policies and Procedures of the Issuer. The Issuer intends for the Tax Compliance Procedure, as supplemented by this Tax Certificate, to be its primary written policies and procedures for monitoring compliance with the Post-Issuance Tax Requirements for the Bonds and to supplement any other formal policies and procedures related to the Post-Issuance Tax Requirements that the Issuer has established 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 Tax Requirements, 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 600596.20228\FTC 12 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 File for the Bonds in accordance with the Tax Compliance Procedure. Unless otherwise specifically instructed in writing by Bond Counsel or to the extent otherwise provided in this Tax Certificate, the Bond Compliance Officer shall retain records related to the Post-Issuance Tax Requirements until 3 years following the final maturity of (1) the Bonds or (2) any obligation issued to refund the Bonds. Any records maintained electronically must comply with Section 4.01 of Revenue Procedure 97-22, which generally provides that an electronic storage system must (A) ensure an accurate and complete transfer of the hardcopy records which indexes, stores, preserves, retrieves and reproduces the electronic records, (B) include reasonable controls to ensure integrity, accuracy and reliability of the electronic storage system and to prevent unauthorized alteration or deterioration of electronic records, (C) exhibit a high degree of legibility and readability both electronically and in hardcopy, (D) provide support for other books and records of the Issuer and (5) not be subject to any agreement that would limit the ability of the IRS to access and use the electronic storage system on the Issuer's premises. (b) Accounting and Allocation of Bond Proceeds to Expenditures. The Bond Compliance Officer will account for the investment and expenditure of Bond proceeds in the level of detail required by the Tax Compliance Procedure. The expected allocation of Bond proceeds to expenditures is set forth on Exhibit D. The Bond Compliance Officer will supplement this expected allocation of Bond proceeds to expenditures with a Final Written Allocation as required by the Tax Compliance Procedure. ( c) Annual Compliance Checklist. Attached as Exhibit E is a sample Annual Compliance Checklist for the Bonds. The Bond Compliance Officer will prepare and complete an Annual Compliance Checklist for the Financed Improvements at least annually in accordance with the Tax Compliance Procedure. In the event the Annual Compliance Checklist identifies a deficiency in compliance with the requirements of this Tax Certificate, the Bond Compliance Officer will take the actions identified in advice from Bond Counsel or the Tax Compliance Procedure to correct any deficiency. ( d) Advice from Bond Counsel. The Bond Compliance Officer is responsible for obtaining and 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) Improvement Fund and Cost of Issuance Account. Bond proceeds deposited in the Improvement Fund and the Cost of Issuance Account and Investment earnings on those proceeds may be invested without Yield restriction for up to 3 years following the Issue Date. If any unspent proceeds remain in such fund and account after 3 years, those amounts may continue to be invested without Yield restriction so long as the Issuer pays to the IRS all Yield reduction payments in accordance with Regulations § 1.148-S(c). These payments are required whether or not the Bonds are exempt from the arbitrage rebate requirements of Code § 148. (b) Debt Service Account. To the extent that the Debt Service Account qualifies as a Bona Fide Debt Service Fund, money in such account may be invested without Yield restriction for 13 months after the date of deposit. Earnings on such amounts may be invested without Yield restriction for 1 year after the date of receipt of such earnings. 600596.20228\FfC 13 (c) Rebate Fund. Money other than sale proceeds or Investment proceeds of the Bonds on deposit in the Rebate Fund may be invested without Yield restriction. (d) Minor Portion. In addition to the amounts described above, Gross Proceeds not exceeding the Minor Portion may be invested without Yield restriction. Section 4.04 Procedures for Establishing Fair Market Value of Investments. (a) General. No Investment may be acquired with Gross Proceeds for an amount (including transaction costs) in excess of the fair market value of such Investment, or sold or otherwise disposed of for an amount (including transaction costs) less than the fair market value of the Investment. The fair market value of any Investment is the price a willing buyer would pay to a willing seller to acquire the Investment in a bona fide, arm's-length transaction. Fair market value will be determined in accordance with Regulations§ 1.148-5. (b) Established Securities Market. Except for Investments purchased for a yield-restricted defeasance escrow, if an Investment is purchased or sold in an arm's-length transaction on an established securities market (within the meaning of Code § 1273), the purchase or sale price constitutes the fair market value. Where there is no established securities market for an Investment, market value must be established using one of the paragraphs below. The fair market value of Investments purchased for a Yield-restricted defeasance escrow must be determined in a bona fide solicitation for bids that complies with Regulations§ 1.148-5. (c) Certificates of Deposit. The purchase price of a certificate of deposit (a "CD") is treated as its fair market value on the purchase date if (1) the CD has a fixed interest rate, a fixed payment schedule, and a substantial penalty for early withdrawal, (2) the Yield on the CD is not less than the Yield on reasonably comparable direct obligations of the United States, and (3) the Yield is not less than the highest Yield published or posted by the CD issuer to be currently available on reasonably comparable CDs offered to the public. (d) Guaranteed Investment Contracts. The purchase price of a Guaranteed Investment Contract is treated as its fair market value on the purchase date if all of the following requirements are met: (1) Bona Fide Solicitation for Bids. The Issuer makes a bona fide solicitation for the Guaranteed Investment Contract, using the following procedures: 600596.20228\FTC (A) The bid specifications are in writing and are timely forwarded to potential providers, or are made available on an internet website or other similar electronic media that is regularly used to post bid specifications to potential bidders. A writing includes a hard copy, a fax, or an electronic e-mail copy. (B) The bid specifications include all "material" terms of the bid. A term is material if it may directly or indirectly affect the yield or the cost of the Guaranteed Investment Contract. (C) The bid specifications include a statement notifying potential providers that submission of a bid is a representation (i) that the potential provider did not consult with any other potential provider about its bid, (ii) that the bid was determined without regard to any other formal or informal agreement that the potential provider has with the 14 Issuer, or any other person (whether or not in connection with the bond issue), and (iii) that the bid is not being submitted solely as a courtesy to the Issuer, or any other person, for purposes of satisfying the requirements of the Regulations. (D) The terms of the bid specifications are "commercially reasonable." A term is commercially reasonable if there is a legitimate business purpose for the term other than to increase the purchase price or reduce the yield of the Guaranteed Investment Contract. (E) The terms of the solicitation take into account the Issuer's reasonably expected deposit and draw-down schedule for the amounts to be invested. (F) All potential providers have an equal opportunity to bid. If the bidding process affords any opportunity for a potential provider to review other bids before providing a bid, then providers have an equal opportunity to bid only if all potential providers have an equal opportunity to review other bids. Thus, no potential provider may be given an opportunity to review other bids that is not equally given to all potential providers (that is no exclusive "last look"). (G) At least 3 "reasonably competitive providers" are solicited for bids. A reasonably competitive provider is a provider that has an established industry reputation as a competitive provider of the type of investments being purchased. (2) Bids Received. The bids received by the Issuer must meet all of the following requirements: (A) The Issuer receives at least 3 bids from providers that were solicited as described above and that do not have a "material financial interest" in the issue. For this purpose, (i) a lead underwriter in a negotiated underwriting transaction is deemed to have a material financial interest in the issue until 15 days after the issue date of the issue, (ii) any entity acting as a financial advisor with respect to the purchase of the Guaranteed Investment Contract at the time the bid specifications are forwarded to potential providers has a material financial interest in the issue, and (iii) a provider that is a related party to a provider that has a material financial interest in the issue is deemed to have a material financial interest in the issue. (B) At least 1 of the 3 bids received is from a reasonably competitive provider, as defined above. (C) If the Issuer uses an agent or broker to conduct the bidding process, the agent or broker did not bid to provide the Guaranteed Investment Contract. (3) Winning Bid. The winning bid is the highest yielding bona fide bid (determined net of any broker's fees). (4) Fees Paid. The obligor on the Guaranteed Investment Contract certifies the administrative costs that it pays (or expects to pay, if any) to third parties in connection with supplying the Guaranteed Investment Contract. (5) Records. The Issuer retains the following records with the bond documents until 3 years after the last outstanding Bond is redeemed: 600596.20228\FTC 15 (A) A copy of the Guaranteed Investment Contract. (B) The receipt or other record of the amount actually paid by the Issuer for the Guaranteed Investment Contract, including a record of any administrative costs paid by the Issuer, and the certification as to fees paid, described in paragraph (d)(4) above. (C) For each bid that is submitted, the name of the person and entity submitting the bid, the time and date of the bid, and the bid results. (D) The bid solicitation form and, if the terms of the Guaranteed Investment Contract deviated from the bid solicitation form or a submitted bid is modified, a brief statement explaining the deviation and stating the purpose for the deviation. (e) Other Investments. If an Investment is not described above, the fair market value may be established through a competitive bidding process, as follows: (1) At least 3 bids on the Investment must be received from persons with no financial interest in the Bonds (e.g., as underwriters or brokers); and (2) the Yield on the Investment must be equal to or greater than the Yield offered under the highest bid. Section 4.05 Certain Gross Proceeds Exempt from the Rebate Requirement. (a) General. A portion of the Gross Proceeds of the Bonds may be exempt from rebate pursuant to one or more of the following exceptions. The exceptions typically will not apply with respect to all Gross Proceeds of the Bonds and will not otherwise affect the application of the Investment limitations described in Section 4.03. Unless specifically noted, the obligation to compute, and if necessary, to pay rebate as set forth in Section 4.06 applies even if a portion of the Gross Proceeds of the Bonds is exempt from the rebate requirement. To the extent all or a portion of the Bonds is exempt from rebate the Rebate Analyst may account for such fact in connection with its preparation of a rebate report described in Section 4.06. The Issuer may defer the final rebate Computation Date and the payment of rebate for the Bonds to the extent permitted by Regulations§§ 1.148-?(b)(l) and l.148-3(e)(2) but only in accordance with specific written instructions provided by the Rebate Analyst. (b) Applicable Spending Exceptions. (1) The Issuer expects that at least 75% of the Available Construction Proceeds will be used for construction or rehabilitation expenditures for property owned by the Issuer. (2) The following optional rebate spending exceptions can apply to the Bonds: (A) 6-month spending exception (Code § 148(f)(4)(B) and Regulations § 1.148-?(c)). (B) 18-month spending exception (Regulations§ l.148-7(d)). (C) 2-year spending exception (Code § 148(f)(4)(C) and Regulations § 1.148-?(e)). 600596.20228\FTC 16 (c) Special Elections Made with Respect to Spending Exception Elections. No special elections are being made in connection with the application of the spending exceptions. (d) Bona Fide Debt Service Fund. To the extent that the Debt Service Account qualifies as a Bona Fide Debt Service Fund, Investment earnings therein cannot be taken into account in computing arbitrage rebate. (e) Documenting Application of Spending Exception. At any time prior to the first Computation Date, the Issuer may engage the Rebate Analyst to determine whether one or more spending exceptions has been satisfied, and the extent to which the Issuer must continue to comply with Section 4.06. (f) General Requirements for Spending Exception. The following general requirements apply in determining whether a spending exception is met. (1) Using Adjusted Gross Proceeds or Available Construction Proceeds to pay principal of any Bonds is not taken into account as an expenditure for purposes of meeting any of the spending tests. (2) The 6-month spending exception generally is met if all Adjusted Gross Proceeds of the Bonds are spent within 6 months following the Issue Date. The test may still be satisfied even if up to 5% of the sale proceeds remain at the end of the initial 6-month period, so long as this amount is spent within 1 year of the Issue Date. (3) The 18-month spending exception generally is met if all Adjusted Gross Proceeds of the Bonds are spent in accordance with the following schedule: Time Period Mterthe Issue Date 6 months 12 months 18 months (Final) Minimum Percentage of Adjusted Gross Proceeds Spent 15% 60% 100% (4) The 2-year spending exception generally is met if all Available Construction Proceeds are spent in accordance with the following schedule: Time Period After the Issue Date 6 months 12 months 18 months 24 months (Final) Minimum Percentage of Available Construction Proceeds Spent 10% 45% 75% 100% (5) For purposes of applying the 18-month and 2-year spending exceptions only, the failure to satisfy the final spending requirement is disregarded if the Issuer uses due diligence to 600596.20228\FTC 17 complete the Financed Improvement and the failure does not exceed the lesser of 3% of the aggregate issue price the Bonds or $250,000. No such exception applies for any other spending period. (6) For purposes of applying the 18-month and 2-year spending exceptions only, the Bonds meet the applicable spending test even if, at the end of the final spending period, proceeds not exceeding a Reasonable Retainage remain unspent, so long as such Reasonable Retainage is spent within 30 months after the Issue Date in the case of the 18-month exception or 3 years after the Issue Date in the case of the 2-year spending exception. Section 4.06 Computation and Payment of Arbitrage Rebate. (a) Rebate Fund. The Issuer will keep the Rebate Fund separate from all other funds and will administer the Rebate Fund under this Tax Certificate. Any Investment earnings derived from the Rebate Fund will be credited to the Rebate Fund, and any Investment loss will be charged to the Rebate Fund. (b) Computation of Rebate Amount. The Issuer will provide the Rebate Analyst Investment reports relating to each fund held by it that contains Gross Proceeds of the Bonds together with copies of Investment reports for any funds containing Gross Proceeds that are held by a party other than the Issuer annually as of the end of each Bond Year and not later than 10 days following each Computation Date. Each Investment report provided to the Rebate Analyst will contain a record of each Investment, including (1) purchase date, (2) purchase price, (3) information establishing the fair market value on the date such Investment was allocated to the Bonds, (4) any accrued interest paid, (5) face amount, (6) coupon rate, (7) frequency of interest payments, (8) disposition price, (9) any accrued interest received, and ( 10) disposition date. Such records may be supplied in electronic form. The Rebate Analyst will compute rebate following each Computation Date and deliver a written report to the Issuer together with an opinion or certificate of the Rebate Analyst stating that arbitrage rebate was determined in accordance with the Regulations. Each report and opinion will be provided not later than 45 days following the Computation Date to which it relates. In performing its duties, the Rebate Analyst may rely, in its discretion, on the correctness of financial analysis reports prepared by other professionals. If the sum of the amount on deposit in the Rebate Fund and the value of prior rebate payments is less than the arbitrage rebate due, the Issuer will, within 55 days after such Computation Date, pay the amount of the deficiency for deposit into the Rebate Fund. If the sum of the amount on deposit in the Rebate Fund and the value of prior rebate payments is greater than the Rebate Amount the Issuer will transfer such surplus in the Rebate Fund to the Debt Service Account. After the final Computation Date or at any other time if the Rebate Analyst has advised the Issuer, any money left in the Rebate Fund will be paid to the Issuer and may be used for any purpose not prohibited by law. ( c) Rebate Payments. Within 60 days after each Computation Date, the Issuer will pay to the United States the rebate amount then due, determined in accordance with the Regulations. Each payment must be (1) accompanied by IRS Form 8038-T and such other forms, documents or certificates as may be required by the Regulations, and (2) mailed or delivered to the IRS at the address shown below, or to such other location as the IRS may direct: Internal Revenue Service Center Ogden, UT 84201 (d) Successor Rebate Analyst. If the firm acting as the Rebate Analyst resigns or becomes incapable of acting for any reason, or if the Issuer desires that a different firm act as the Rebate Analyst, then the Issuer by an instrument or concurrent instruments in writing delivered to the firm then serving as 6005%.20228\FTC 18 the Rebate Analyst and any other party to this Tax Certificate, will name a successor Rebate Analyst. In each case the successor Rebate Analyst must be a firm of nationally recognized bond counsel or a firm of independent certified public accountants and such firm must expressly agree to undertake the responsibilities assigned to the Rebate Analyst hereunder. ( e) Filing Requirements. The Issuer will file or cause to be filed with the IRS such reports or other documents as are required by the Code in accordance with advice from Bond Counsel. (t) Survival after Defeasance. Notwithstanding anything in the Bond Resolution to the contrary, the obligation to pay arbitrage rebate to the United States will survive the payment or defeasance of the Bonds. ARTICLE V MISCELLANEOUS PROVISIONS Section 5.01 Term of Tax Certificate. This Tax Certificate will be effective concurrently with the issuance and delivery of the Bonds and will continue in force and effect until the principal of, redemption premium, if any, and interest on all Bonds have been fully paid and all such Bonds are cancelled; provided that the provisions of Article IV of this Tax Certificate regarding payment of arbitrage rebate and all related penalties and interest will remain in effect until all such amounts are paid to the United States and the provisions in Section 4.02 relating to record keeping shall continue in force for the period described therein for records to be retained. Section 5.02 Amendments. This Tax Certificate may be amended from time to time by the Issuer without notice to or the consent of any of the Bond Owners, but only if such amendment is in writing and is accompanied by advice from Bond Counsel to the effect that, under then-existing law, assuming compliance with this Tax Certificate as so amended and the Bond Resolution, such amendment will not cause any Bond to be an arbitrage bond under Code § 148 or otherwise cause interest on any Bond to be included in gross income for federal income tax purposes. No amendment will become effective until the Issuer receives advice from Bond Counsel, addressed to the Issuer, that the amendment will not adversely affect the exclusion of the interest on the Bonds from gross income for federal income tax purposes. Section 5.03 Advice from Bond Counsel. The Issuer may deviate from the provisions of this Tax Certificate if furnished with an advice from Bond Counsel to the effect that the proposed deviation will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes. The Issuer further agrees to comply with any further or different instructions provided in advice from Bond Counsel to the effect that the further or different instructions need to be complied with in order to maintain the validity of the Bonds or the exclusion from gross income of interest on the Bonds. Section 5.04 Reliance. In delivering this Tax Certificate the Issuer is making only those certifications, representations and agreements as are specifically attributed to them in this Tax Certificate. The Issuer is not aware of any facts or circumstances which would cause it to question the accuracy of the facts, circumstances, estimates or expectations of any other party providing certifications as part of this Tax Certificate and, to the best of its knowledge, those facts, circumstances, estimates and expectations are reasonable. The Issuer understands that its certifications will be relied upon by Bond Counsel in rendering its opinion as to the validity of the Bonds and the exclusion from federal gross income of the interest on the Bonds. 600596.20228\FfC 19 Section 5.05 Severability. If any prov1s10n in this Tax Certificate or in the Bonds is determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not be affected or impaired. Section 5.06 Benefit of Certificate. This Tax Certificate is binding upon the Issuer, its respective successors and assigns, and inures to the benefit of the Issuer and the owners of the Bonds. Nothing in this Tax Certificate, the Bond Resolution or the Bonds, express or implied, gives to any person, other than the Issuer, its successors and assigns, and the owners of the Bonds, any benefit or any legal or equitable right, remedy or claim under this Tax Certificate. Section 5.07 Default, Breach and Enforcement. Any misrepresentation of a party contained herein or any breach of a covenant or agreement contained in this Tax Certificate may be pursued by the Bond Owners pursuant to the terms of the Bond Resolution or any other document which references this Tax Certificate and gives remedies for a misrepresentation or breach thereof. Section 5.08 Governing Law. This Tax Certificate will be governed by and construed in accordance with the laws of the State. Section 5.09 Electronic Transactions. The transactions described herein may be conducted, and related documents may be sent, received, executed, and stored, by electronic means. Copies, telecopies, electronic files and other reproductions of original executed documents ( or documents executed by electronic means) 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. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 600596.20228\FfC 20 THE UNDERSIGNED, Mayor and Finance Director of the Issuer, by their execution of this Tax Certificate hereby make the foregoing certifications, representations, and agreements contained in this Tax Certificate on behalf of the Issuer, as of the Issue Date. CITY OF SALINA, KANSAS By: Finance Director 600596.20228\FTC (Signature Page to Federal Tax Certificate) 600596.20228\FTC EXHIBIT A IRS FORM 8038-G A-l Form 8038•G Information Return for Tax-Exempt Governmental Bonds ► Under Internal Revenue Code section 149(e) (Rev. October 2021) ► See separate instructions. 0MB No. 1545-0047 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. ■~liilllll ■ Reporting Authority Check box if Amended Return ► D 1 Issuer's name City of Salina, Kansas 2 Issuer's employer identification number (EIN) 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 .0. 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 8/17/2023 8 Name of issue $2,955,000 City of Salina, Kansas, General Obligation Internal Improvement Bonds, 9 CUSIP number Series 2023-A, Dated August 17, 2023 794744 GX4 10a Name and title of officer or other employee of the issuer whom the IRS may call for more information 10b Telephone number of officer or other Deborah L. Pack, Director of Finance and Administration employee shown on 10a (785) 309-5735 . . 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 18 Other. Describe ► Public Facility 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•• II Description of Bonds. Complete for the entire issue for'which this form is being filed. (c) Stated redemption (d) Weighted (a) Final maturity date (b) Issue price price at maturity average maturity 21 10/01/2043 $3,196,391 .10 $2,955,000.00 7.329 years -~Tiiill l•a Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest 23 Issue price of entire issue (enter amount from line 21, column (b)) 24 Proceeds used for bond issuance costs (including underwriters' discount) 24 88,308.91 25 Proceeds used for credit enhancement 25 0.00 26 Proceeds allocated to reasonably required reserve or replacement fund 26 0.00 27 Proceeds used to refund prior tax-exempt bonds. Complete Part V . 27 0.00 28 Proceeds used to refund prior taxable bonds. Complete Part V 28 0.00 29 Total (add lines 24 through 28) . 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) ■:r.111••· Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the tax-exempt bonds to be refunded . 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/DD/YYYY) For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773S ► ► ► 11 12 13 314,732.88 14 15 237,746.62 16 17 115,655.25 18 2,528,256.35 (e)Yield 3.1052 % 22 $ 0.00 23 3,196,391 .10 29 88,308.91 30 3,108,082.19 years years Form 8038-G (Rev. 10-2021) $ GILMOR_.EBELL One Main Place -100 North Main, Suite 800 Wichita, Kansas 67202-1311 (316) 267-2091 / (316) 262-6523 FAX/ gilmorebell.corn August 22, 2023 FEDERAL EXPRESS TRACKING NO. 7731 3019 8090 Internal Revenue Service 1973 N. Rulon White Blvd Ogden, UT 84201 Re: $2,955,000 General Obligation Internal hnprovernent Bonds, Series 2023-A, of the City of Salina, Kansas, Dated August 17, 2023 (the "Bonds") On behalf of the issuer of the above-referenced obligations, the enclosed Form 8038-G is submitted for filing pursuant to Section 149(e) of the Internal Revenue Code of 1986. Should additional information be required, please contact the undersigned. , ,/ ~ ., Mitch Walter MLW:paj Enclosure 600596.20228\CORRESP EXHIBITB RECEIPT FOR PURCHASE PRICE $2,955,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A DATED AUGUST 17,2023 The undersigned Finance Director of the City of Salina, Kansas, this day received from Robert W. Baird & Co., Inc., Milwaukee, Wisconsin, 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 .................................. . Plus Premium ....................................... . Less Underwriting Discount ................. . Total Purchase Price ................. . Less Good Faith Deposit ...................... . Net Amount Received ............. .. DATED: August 17, 2023. 600596.20228\FTC B-1 $2,955,000.00 241,391.10 -32,111.66 $3,164,279.44 -60,100.00 $3,104,179.44 CITY OF SALINA, KANSAS By: oL9~ f?.d-- Finance Director EXHIBITC RECEIPT AND REPRESENTATION $2,955,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A DATED AUGUST 17, 2023 This Receipt and Representation (the "Certificate") is being delivered by Robert W. Baird & Co., Inc., Milwaukee, Wisconsin (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 Trust Company on behalf of the Purchaser on the Issue Date of the Bonds consisting of fully registered "book- entry-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 fide initial offering. (b) Expected Initial Offering Prices. As of the sale date of the Bonds (July 24, 2023), the reasonably 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 written contract with the Issuer ( or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or 600596.20228\FTC C-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 matters only. 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] 600596.20228\FfC C-2 Dated: August 17, 2023. 600596.20228\FTC ROBERT W. BAIRD & CO., INC. MILWAUKEE, WISCONSIN .P~ A ~H,, By:----------- Title: Managing Director (Signature Page to Purchaser's Receipt) SCHEDULEJ INITIAL 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 2024 $185,000 5.00% 101.965% 2029 $260,000 5.00% 111.758% 2025 215,000 5.00% 103.869% 2030 275,000 5.00% 113.836% 2026 230,000 5.00% 105.915% 2031 290,000 5.00% 115.880% 2027 240,000 5.00% 107.898% 2032 305,000 4.00% 108.661% 2028 250,000 5.00% 109.925% 2033 315,000 4.00% 108.283 TERM BONDS Stated Annual Initial Maturity Principal Rate of Offering October 1 Amount Interest Price 2038 $175,000 4.00% 102.792% 2043 215,000 4.00% 100.000% 600596.20228\FfC S-1-1 EXHIBITC-1 CERTIFICATE OF MUNICIPAL ADVISOR $2,955,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A DATED AUGUST 17, 2023 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 in the 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 sale of the Bonds was provided to PARITY®, and a copy of the Notice of Bond Sale (or a summary thereof) was published in the Salina, Journal, a newspaper of general circulation in Saline County, Kansas, and the Kansas Register, prior to the sale date. 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 equal opportunity to bid to purchase the Bonds, and the bidding process did not afford any opportunity for bidders to review other bids before providing a bid (that is, no "last-look"). 4. The Issuer received bids from at least three bidders who represented that each has an established industry reputation for underwriting new issuances of municipal bonds. Based upon the Municipal Advisor's knowledge and experience in acting as the municipal advisor for other municipal issues, the Municipal Advisor believes those representations to be accurate. Copies of the bids received are attached to this Certificate as Attachment 2 of the Transcript of Proceedings related to the Bonds. 5. The winning bidder was Robert W. Baird & Co., Inc., Milwaukee, Wisconsin (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. 600596.20228\FTC C-1-1 Dated: August 17, 2023 STIFEL, NICOLAUS & COMP ANY, IN CORPORA TED By:~~ Title: anagingI)irec' 600596.20228\FTC C-1-2 600596.20228\FTC ATTA CHMEJVT I NOTICE OF BOND SALE C-1-3 NOTICE OF BOND SALE $3,005,000* CITY OF SALINA, KANSAS Gilmore & Bell, P.C. 06/12/2023 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A (GENERAL OBLIGATION BONDS PAYABLE FROM UNLIMITED AD VALOREM TAXES) Bids. Bids for the purchase of the above-referenced bonds (the "Bonds") of the City of Salina, Kansas (the "Issuer") herein described will be received on behalf of the Issuer by the Issuer's Municipal Advisor, until 11:00 A.M. applicable Central Time (the "Submittal Hour"), on JULY 24, 2023 (THE "SALE DATE") Bids may only be submitted via PARITY® or via email to the Municipal Advisor at artcbcm d@stifel.com. Facsimile bids and hand-delivered written bids will not be accepted. All bids will be publicly evaluated at said time and place and the award of the Bonds to the successful bidder (the "Successful Bidder") will be acted upon by the City Commission of the Issuer (the "Governing Body") at its meeting to be held at 4:00 p.m. on the Sale Date. No oral or auction bids will be considered. Any qualified bidder may bid on the Bonds. Capitalized terms not otherwise defined herein shall have the meanings set forth in the hereinafter referenced Preliminary Official Statement relating to the Bonds. Terms of the Bonds. The Bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). The Bonds will be dated August 17, 2023 (the "Dated Date"), and will become due in principal installments on October 1 in the years as follows: Principal Principal Year Amount* Year Amount* 2024 $195,000 2034 $30,000 2025 220,000 2035 35,000 2026 235,000 2036 35,000 2027 245,000 2037 35,000 2028 255,000 2038 40,000 2029 265,000 2039 40,000 2030 285,000 2040 40,000 2031 295,000 2041 40,000 2032 310,000 2042 45,000 2033 315,000 2043 45,000 600596.20228\SALEDOCS The Bonds will bear interest from the Dated Date at rates to be determined when the Bonds are sold as hereinafter provided, which interest will be payable semiannually on April 1 and October 1 in each year, beginning on April 1, 2024 (the "Interest Payment Dates"). * Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principal amount of the Bonds or the schedule of principal payments described above, depending on the purchase price and interest rates bid and the offering prices specified by the Successful Bidder but in no event will the principal amount of the Bonds exceed $3,250,000. 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 net production as a percentage of the par amount of the Bonds generated from the bid of the Successful Bidder will not be decreased as a result of any change in the principal amount of the Bonds or in the principal amount per maturity. Place of Payment. The principal of and interest on the Bonds will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The principal of each Bond will be payable at maturity or earlier redemption to the owner thereof whose name is on the registration books (the "Bond Register") of the Bond Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. Interest on each Bond will be payable to the Registered Owner of such Bond as of the fifteenth day (whether or not a business day) of the calendar month next preceding each Interest Payment Date (the "Record Date") (a) mailed by the Paying Agent to the address of such Registered Owner as shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any 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 ("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. OTC will make book-entry-only transfers among its participants and receive and transmit payment of principal of, premium, if any, and interest on the 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 determines that continuation of the book-entry-only form of evidence and transfer of ownership of 600596.20228\SALEDOCS 2 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 the Official Statement for further information regarding the book-entry-only system of registration of the Bonds and DTC. Redemptjon 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 2032, and thereafter, will be subject to redemption and payment prior to maturity on October 1, 2031, 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. 12-6a01 et seq., and K.S.A. 13-1024a, as amended by Charter Ordinance No. 41, as amended, and an ordinance and a resolution adopted by the Governing Body (collectively the "Bond Resolution") for the purpose of paying a portion of the cost of certain public improvements (the "Improvements"). 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 certain 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 600596.20228\SALEDOCS 3 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. Submission of Bids. Email bids shall be marked "Proposal for General Obigation Internal Improvment Bonds, Series 2023-A" and may be submitted to the Municipal Advisor at arteben"}d@Stifel.com. 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. Any bid submitted shall include the initial offering prices to the public for each maturity of the Bonds. If provisions of this Notice of Bond Sale conflict with those of PARITY®, this Notice of Bond Sale shall control. 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 of transmission of facsimile or delivery by mail or in person of any bid. Any bidder desiring to have the Municipal Advisor assist in the delivery of such bidder's bid should provide pertinent bidding information to the Municipal Advisor not later than 30 minutes prior to the Submittal Hour on the Sale Date. PARITY®. Information about the electronic bidding services of PARITY® may be obtained from i-Deal LLC at 1359 Broadway, 2nd Floor, New York, New York 10018, Phone No. (212) 849-5023 5023 and from the following website: www.newissuehome.i•deal.com. 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) the same rate shall apply to all Bonds of the same maturity year; (b) no interest rate may exceed 5%; (c) no supplemental interest payments will be considered; (d) each interest rate specified shall be a multiple of 1/8 or 1/20 of 1 %; and (e) no zero percent (0%) interest 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. The Successful Bidder must supply a good faith deposit (the "Deposit") in the amount of 2.00% of the principal amount of the Bonds as indicated on the first page of this Notice payable to the order of the Issuer to secure the Issuer from any loss resulting from the failure of the Successful Bidder to comply with the terms of its bid. The Deposit must be received by the Issuer by 3:00 p.m. Central Time on the Sale Date. The Deposit shall be submitted by wire transfer in Federal Reserve funds, immediately available for use by the Issuer. No interest on the Deposit will be paid by the Issuer. The Deposit will be held by the Issuer until the Successful Bidder have complied with all of the terms and conditions of this Notice at which time the amount of said Deposit shall be returned to the Successful Bidder or deducted from the purchase price at the option of the Issuer. If a bid is accepted, but the Issuer fails to deliver the Obligations to the Successful Bidder in accordance with the terms and conditions of this Notice, said Deposit, or the proceeds thereof, will be returned to the Successful Bidder. If the Successful Bidder default in the performance of any of the terms and conditions of this Notice, the proceeds of such Deposit will be retained by the Issuer as and for liquidated damages. 600596.20228\SALEDOCS 4 Basis of Award. Subject to the timely receipt of the Deposit set forth above, the award of the Bonds will be made on the basis of the lowest true interest cost ("TIC"), which will be determined as follows: the TIC is the discount rate (expressed as a per annum percentage rate) which, when used in computing the present value of all payments of principal and interest to be paid on the Bonds, from the payment dates to the Dated Date, produces an amount equal to the price bid, including any adjustments for premium if any. Present value will be computed on the basis of semiannual compounding and a 360- day year of twelve 30-day months. Bidders are requested to provide a calculation of the TIC for the Bonds on the Official Bid Form, computed as specified herein on the basis of their respective bids, which shall be considered as informative only and not binding on either the Issuer or the bidder. The Municipal Advisor will verify the TIC based on such bids. If there is any discrepancy between the TIC specified and the bid price and interest rates specified, the specified bid price and interest rates shall govern and the TIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest TIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. The Issuer reserves the right to reject any and/or all bids and to waive any irregularities in a submitted bid. Any bid received after the Submittal Hour on the Sale Date will not be considered. Any disputes arising hereunder shall be governed by the laws of the State, and any party submitting a bid agrees to be subject to jurisdiction and venue of the federal and state courts within the State with regard to such dispute. The Issuer's acceptance of the Successful Bidder's proposal for the purchase of the Bonds in accordance with this Notice of Bond Sale shall constitute a bond purchase agreement between the Issuer and the Successful Bidder for purposes of the laws of the State and a contract between the Issuer and the Successful Bidder for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") and Rule G-32 of the Municipal Securities Rulemaking Board ("Rule G-32"). The method of acceptance shall be determined solely by the Governing Body. Bond Ratings. The outstanding general obligation bonds of the Issuer are rated "Aa3" by Moody's Investors Service. The Issuer has applied to Moody's Investors Service for ratings on the Bonds herein offered for sale. Such application and ratings are further described in the Preliminary Official Statement, hereinafter described. Optional Bond Insurance. The Issuer has not applied for any policy of municipal bond insurance with respect to the Bonds. If the Bonds qualify for municipal bond insurance, and any bidder desires to purchase such policy, such indication and the name of the desired insurer must be set forth on the bidder's Official Bid Form. The Issuer specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the Issuer. If the Successful Bidder 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 600596.20228\SALEDOCS 5 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 Rulemak:ing 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 AUGUST 17, 2023 (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 148 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." (c) Any bid submitted pursuant to this Notice shall be considered a firm offer for the purchase 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 advise the 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 600596.20228\SALEDOCS 6 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 apply 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 for the year 2022 is as follows: Equalized Assessed Valuation of Taxable Tangible Property ............................................................ .. $503,880,021 Tangible Valuation of Motor Vehicles ............................................... .. 54,903.252 Equalized Assessed Tangible Valuation for Computation of Bonded Debt Limitations .... ............ ...... ....... ... $558,783,273 The total general obligation indebtedness of the Issuer as of the Dated Date, including the Bonds being sold, is $72,150,000. Legal Opinion. The Bonds will be sold subject to the approving legal opinion of GILMORE & BELL, P.C., WICHITA, KANSAS, 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 relating to the interest on the Bonds being excludable from gross income for federal income tax 600596.20228\SALEDOCS 7 purposes and exempt from income taxation by the State. Reference is made to the Preliminary Official Statement for further discussion of federal and State income tax matters relating to the interest on the Bonds. Electronic Transactions. The transactions described herein may be conducted and related documents may be sent, received and stored by electronic means or transmissions. All bid documents, closing documents, certificates, ordinances, resolutions and related instruments may be executed 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. Additional Information. Additional information regarding the Bonds may be obtained from the undersigned or from the Municipal Advisor at the addresses set forth below: DATED: June 26, 2023. Issuer -Good Faith Deposit Delivery Address: Debbie Pack, Director of Finance and Administration City of Salina, Kansas 300 West Ash Street, Room 206 Salina, Kansas 67 402 Phone No.: (785) 309-5735 Fax No.: (785) 309-5711 Email: debbie.pack@salina.orn Municipal Advisor -Email Bid Delivery Address: Stifel Nicolaus & Company, Incorporated 4801 Main Street, Suite 530 Kansas City, Missouri 64112 Attn: David Arteberry Phone No.: (816) 203-8773 Email: arteberr\'d@stifel.com 600596.20228\SALEDOCS 8 CITY OF SALINA, KANSAS By: JoVonna Rutherford, City Clerk 600596.20228\FfC A7'7'ACHHEIV7'2 BIDS RECEIVED C-1-4 ATTACHMENT.J BID COMPARISON Salina $3,005,000 General Obligation Internal Improvement Bonds, Series 2023-A The following bids were submitted using PAR/r,IB) and displayed ranked by lowest TIC. Click on the name of each bidder to see the respective bids. Bid Award* Bidder Name TIC D Robert W. Baird & Co., Inc. 3.326198 D Huntington Securities, Inc. 3.329849 D IIJ ~~1;i!.1dli!;l~ 3.358727 D ~12'1□~ Qs112i1sl Msr!s~lia 3.377833 D El::i~ Ei□s!□!;lis:!I Qs1Rital Mac~~1~ 3.453976 D Bernard, Securities. Inc 3.535300 D SloneX Financial Inc. 3.549939 600596.20228\FTC C-1-5 EXHIBITD DESCRIPTION OF PROPERTY COMPRISING THE FINANCED IMPROVEMENTS $2,955,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A DATED AUGUST 17, 2023 Estimated Date Placed Useful Estimated ' Description in Service Life Total Cost Cedar Ridge -Phase 2 08/2023 20 years $674,038.05 Facility Improvements -Bill Burke Park 06/2024 20 years 4,000,000.00* Total 4,674 038.05 Amount Financed.from Bonds $3,108 082.19 Estimated Amount Financed from Other $1,565,955.86 Sources *estimated costs of comprehensive improvements to recreational and athletic facilities An itemized list of the expenditures reimbursed with the proceeds of the Bonds is on file with the Issuer. The exhibit above does not foreclose the Issuer in the future from determining the amount of expenditures for the Improvements that were funded from qualified equity and allocating those expenditures for federal tax purposes to a specific asset, should the need arise as a result of private use of a portion of the Financed Improvements. 600596.20228\FTC D-1 EXHIBITE FORM OF ANNUAL COMPLIANCE CHECKLIST $2,955,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2023-A DATED AUGUST 17, 2023 The Bond Compliance Officer is the person that the Issuer has identified in the Tax Compliance Procedure who is primarily responsible for working with other Issuer officials, departments and administrators and for consulting with Bond Counsel, other legal counsel and outside experts to the extent necessary to carry out the Post-Issuance Tax Requirements for the Bonds. On the Issue Date, the Issuer identified certain assets financed in whole or in part by the Bonds (the "Financed Improvements"), as evidenced on Exhibit D to the Federal Tax Certificate. Please complete this checklist within 90 days after the conclusion of the Issuer's Fiscal Year. Should you have questions or need assistance in completing the checklist, please contact Bond Counsel at the address below. A completed copy of this annual checklist should be placed in the Tax-Exempt Bond File and retained in the Issuer's permanent records for at least 3 years after the final maturity of (1) the Bonds or (2) any obligation issued to refund the Bonds. Bond Compliance Officer Name: [ _____ __, Bond Compliance Officer Signature: Date of Report: [ _____ __, Annual Period Covered by Report: ,__ _____ ] **If the answers to any of the following questions identify any compliance deficiencies, the Bond Compliance Officer should immediately contact Bond Counsel and take actions required in the Tax Compliance Procedure.** Item Question Response 1 Were all of the Financed Improvements owned by the Issuer during the entire 0Yes Ownership Annual Period? nNo If answer above was "No," was advice of Bond Counsel obtained prior to the 0Yes transfer? □No 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? □No Rights to Possession If answer above was "Yes," was advice of Bond Counsel obtained prior to □Yes entering into the lease or other arrangement? □No 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. 6005%.20228\FTC E-1 Item 3 Management or Service Agreements 4 Other Use 5 Proceeds & Investments 6 Arbitrage & Rebate Bond Counsel: 600596.20228\FTC Question During the Annual · Period, has the management of all or any part of the operations of the Financed Improvements (e.g., cafeteria, gift shop, etc.) been assumed by or transferred to another entity? If answer above was "Yes," was advice of Bond Counsel obtained prior to entering into the management agreement? 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. Was any other agreement entered into with an individual or entity that grants special legal rights to the Financed Improvements? If answer above was "Yes," was advice from Bond Counsel obtained prior to entering into the agreement? 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. Have any Gross Proceeds of the Bonds been invested m a Guaranteed Investment Contract? Has the Issuer entered into an Interest Rate Swap Agreement with respect to the Bonds? Has any sinking or reserve fund for the payment of the Bonds been established (other than funds and accounts created in the Bond Resolution)? Have any of the Bonds been redeemed or refunded in advance of their scheduled maturities? 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. Have all rebate and yield reduction calculations mandated in the Federal Tax Certificate been prepared for the current year? If No, contact Rebate Analyst and incorporate report or include description of resolution in the Tax-Exempt Bond File. If Yes, contact Bond Counsel and incorporate report or include description of resolution in the Tax-Exempt Bond File. Gilmore & Bell, P.C. 100 N. Main, Suite 800 Wichita, Kansas 67202 Phone: (316) 267-2091 Attn: Mitch Walter Email: mwalter@!!ilmorcbcll.com E-2 Response 0Yes □No □Yes □No 0Yes nNo 0Yes □No □Ye. □ □Yes nNo 0Yes nNo 0Yes 0No □Ye 0 No SCHEDULE I DR.BT S.ERVICE SCHEDULE AND PROOF OF YIELD 600.5%.20228\FTC S-1 Jul 24, 2023 12:50 pm Prepared by Gilmore & Bell SOURCES AND USES OF FUNDS City of Salina, Kansas General Obligation Internal Improvement Bonds Series 2023-A Sources: Bond Proceeds: Dated Date Delivery Date Par Amount Premium Uses: Project Fund Deposits: Project Fund Delivery Date Expenses: Cost oflssuance Underwriter's Discount Other Uses of Funds: City Administrative Expenses Rounding Amount 08/17/2023 08/17/2023 2,955,000.00 241,391.10 3,196,391.10 3,077,163.01 52,616.25 32,111.66 84,727.91 30,919.18 3,581.00 34,500.18 3,196,391.10 Page 1 This inforiuc,tion is provjded b~sed on the factual infonnntion and assumptions provided to Gilmore & Bell1 P.C. by n party to or n represeutath·e of a pllI1Y to the proposed transaction. This infonnation is intended to provide factual infonnntlon only and i..Ci provided in coujuuction with our legal representation. It is not iute.nded as financial advice 01· a financial recommendation to any party. Gilmore & Bell9 P.C. is not a finnncii:il advisor or a •~municipal advisor~• as defmed in the Securities Exchange Act of 1934, as amended, Jul 24, 2023 12:50 pm Prepared by Gilmore & Bell Page 3 BOND PRJCING City of Salina, Kansas General Obligation Internal Improvement Bonds Series 2023-A Maturity Yield to Call Call Premium Bond Component Date Amount Rate Yield Price Maturity Date Price (-Discount) Serial Bonds: 10/01/2024 185,000 5.000% 3.200% 101.965 3,635.25 10/01/2025 215,000 5.000% 3.100% 103.869 8,318.35 10/01/2026 230,000 5.000% 3.000% 105.915 13,604.50 10/01/2027 240,000 5.000% 2.950% 107.898 18,955.20 10/01/2028 250,000 5.000% 2.900% 109.925 24,812.50 10/01/2029 260,000 5.000% 2.890% 111.758 30,570.80 10/01/2030 275,000 5.000% 2.840% 113.836 38,049.00 10/01/2031 290,000 5.000% 2.800% 115.880 46,052.00 10/01/2032 305,000 4.000% 2.800% 108.661 C 2.912% 10/01/2031 100.000 26,416.05 10/01/2033 315,000 4.000% 2.850% 108.283 C 3.043% 10/01/2031 100.000 26,091.45 2,565,000 236,505.10 2038 Term Bond: 10/01/2034 30.000 4.000% 3.600% 102.792 C 3.756% 10/01/2031 100.000 837.60 10/01/2035 35,000 4.000% 3.600% 102.792 C 3.756% 10/01/2031 100.000 977.20 10/01/2036 35,000 4.000% 3.600% 102.792 C 3.756% 10/01/2031 100.000 977.20 10/01/2037 35,000 4.000% 3.600% 102.792 C 3.756% 10/01/2031 100.000 977.20 10/01/2038 40,000 4.000% 3.600% 102.792 C 3.756% 10/01/2031 100.000 12116.80 175,000 4,886.00 2043 Term Bond: 10/01/2039 40,000 4.000% 4.000% 100.000 10/01/2040 40,000 4.000% 4.000% 100.000 10/01/2041 45,000 4.000% 4.000% 100.000 10/01/2042 45,000 4.000% 4.000% 100.000 10/01/2043 45,000 4.000% 4.000% 100.000 215,000 2,955,000 241,391.10 Dated Date 08/17/2023 Delivery Date 08/17/2023 First Coupon 04/01/2024 Par Amount 2,955,000.00 Premium 241,391.10 Production 3,196,391.10 108.168904% Underwriter's Discount (32,111.66) (1.086689%) Purchase Price 3,164,279.44 107.082215% Accrued Interest Net Proceeds 3,164,279.44 This information is provided bAsed on the factual infonnation and assumptions provided to Gilmore & Bell, P.C. by n pany to or a. representative ofa party to the proposed 1rammction. This infonnation is intended 1o provide factual information only and is provided in conjunction with ow legal representation. It is: not intended as financial advice or a financial recommendation to any party. Gilmore & Bell~ P.C. is not a financial adv.isor or a ·•municipal ndvisoru as defined in tb.e Secu1ities Exchange Act of 1934s ns amended. Jul 24, 2023 12:50 pm Prepared by Gilmore & Bell BOND SUMMARY STATISTICS City of Salina, Kansas General Obligation Internal Improvement Bonds Series 2023-A 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 Par Bond Component Value Serial Bonds 2038 Term Bond 2043 Term Bond Par Value + Accrued Interest + Premium (Discount) -Underwriter's Discount -Cost oflssuance Expense -Other Amounts Target Value Target Date Yield 2,565,000.00 175,000.00 215,000.00 2,955,000.00 TIC 2,955,000.00 241,391.l0 (32,111.66) 3,164,279.44 08/17/2023 3.331443% Price 109.220 102.792 100.000 08/17/2023 08/17/2023 04/01/2024 10/01/2043 3.105225% 3.331443% 3.477379% 3.607656% 4.439311% 7.362 7.329 6.199 2,955,000.00 3,196,391.10 965,823.89 756,544.45 3,920,823.89 347,650.00 194,850.44 10.866890 10.866890 107.082215 Average Coupon 4.61549552% 4.00000000% 4.00000000% All-In TIC 2,955,000.00 241,391.10 (32,111.66) (52,616.25) 3,111,663.19 08/17/2023 3.607656% Average Life 6.054 13.237 18.192 7.362 Arbitrage Yield 2,955,000.00 241,391.10 3,196,391.10 08/17/2023 3.105225% Page 4 This iufom1atfon is provided based on tbe fac.tual information oud assumptions provided to Gilmore & Bell, P.C. by a party to or a represent.nth·e of n party to the proposed tnmsaction. This i.nfannation is intended to provide U\ctual infonnntion only 8.Jld is provided in conjuuclion with our lt.'gal representation. It is not intended as finrutciaJ advice oi-a financial rccmwneadatiou to any party. Gilmore & Bell, P.C. is not a financial advisor or a ·'municipal advisor'' as defmed in the Securities Exohru.1~e Act of 1934, RS amended. Jul 24, 2023 12:50 pm Prepared by Gilmore & Bell PROOF OF ARBITRAGE YIELD City of Salina, Kansas General Obligation Internal Improvement Bonds Series 2023-A Date Debt Service 04/01/2024 85,648.89 10/01/2024 253,825.00 04/01/2025 64,200.00 10/01/2025 279,200.00 04/01/2026 58,825.00 10/01/2026 288,825.00 04/01/2027 53,075.00 10/01/2027 293,075.00 04/01/2028 47,075.00 10/01/2028 297,075.00 04/01/2029 40,825.00 10/01/2029 300,825.00 04/01/2030 34,325.00 10/01/2030 309,325.00 04/01/2031 27,450.00 10/01/2031 1,112,450.00 04/01/2032 4,300.00 10/01/2032 4,300.00 04/01/2033 4,300.00 10/01/2033 4,300.00 04/01/2034 4,300.00 10/01/2034 4,300.00 04/01/2035 4,300.00 10/01/2035 4,300.00 04/01/2036 4,300.00 10/01/2036 4,300.00 04/01/2037 4,300.00 10/01/2037 4,300.00 04/01/2038 4,300.00 10/01/2038 4,300.00 04/01/2039 4,300.00 10/01/2039 44,300.00 04/01/2040 3,500.00 10/01/2040 43,500.00 04/01/2041 2,700.00 10/01/2041 47,700.00 04/01/2042 1,800.00 10/01/2042 46,800.00 04/01/2043 900.00 10/01/2043 45,900.00 3,847,623.89 Proceeds Summarv Delivery date Par Value Premium (Discount) Target for yield calculation Present Value to 08/17/2023 @ 3.1052246631% 84,022.39 245,197.81 61,069.75 261,526.33 54,258.88 262,332.79 47,469.72 258,115.67 40,825.81 253,699.44 34,331.16 249,106.54 27,989.21 248,372.79 21,704.02 866,138.42 3,296.74 3,246.33 3,196.70 3,147.83 3,099.70 3,052.31 3,005.64 2,959.69 2,914.44 2,869.88 2,826.01 2,782.80 2,740.25 2,698.36 2,657.11 26,955.84 2,097.13 25,665.89 1,568.70 27,289.98 1,014.07 25,962.62 491.65 24,690.68 3,196,391.10 08/17/2023 2,955,000.00 241,391.10 3,196,391.10 Page 5 nus lnforruatlou is provid"d based on tbe tactual information and assumptions provided to Gilmore & B~U,, P.C. by n party to or n .representative ofa parry to the proposed lnmsaction. Thls infonnation is intended to provirte tactual info1umtion only and is provided In conjunction with our legal representation. It is not intended as financial advice or a fluanclal recommend1ttion to any party. Gilmore & Bell, P.C. is not fl fmoncial advisor or a ·'municipal ndviso~" as defined in lhe Securities Exoliange Act of 1934~ AS amended. Jul 24, 2023 12:50 pm Prepared by Gilmore & Bell Page 7 FORM 8038 STATISTICS City of Salina, Kansas General Obligation Internal Improvement Bonds Series 2023-A Dated Date 08/17/2023 Delivery Date 08/1 7/2023 Redemption Bond Component Date Principal Coupon Price Issue Price at Maturity Serial Bonds: 10/01/2024 185,000.00 5.000% 101.965 188,635.25 185,000.00 10/01/2025 215,000.00 5.000% 103.869 223,318.35 215,000.00 10/01/2026 230,000.00 5.000% 105.915 243,604.50 230,000.00 10/01/2027 240,000.00 5.000% 107.898 258,955.20 240,000.00 10/01/2028 250,000.00 5.000% 109.925 274,812.50 250,000.00 10/01/2029 260,000.00 5.000% 111.758 290,570.80 260,000.00 10/01/2030 275,000.00 5.000% 113.836 313,049.00 275,000.00 10/01/2031 290,000.00 5.000% 115.880 336,052.00 290,000.00 10/01/2032 305,000.00 4.000% 108.661 331,416.05 305,000.00 10/01/2033 315,000.00 4.000% 108.283 341,091.45 315,000.00 2038 Term Bond: 10/01/2034 30,000.00 4.000% 102.792 30,837.60 30,000.00 10/01/2035 35,000.00 4.000% 102.792 35,977.20 35,000.00 10/01/2036 35,000.00 4.000% 102.792 35,977.20 35,000.00 10/01/2037 35,000.00 4.000% 102.792 35,977.20 35,000.00 10/01/2038 40,000.00 4.000% 102.792 41,116.80 40,000.00 2043 Term Bond: 10/01/2039 40,000.00 4.000% 100.000 40,000.00 40,000.00 10/01/2040 40,000.00 4.000% 100.000 40,000.00 40,000.00 10/01/2041 45,000.00 4.000% 100.000 45,000.00 45,000.00 10/01/2042 45,000.00 4.000% 100.000 45,000.00 45,000.00 10/01/2043 45,000.00 4.000% 100.000 45,000.00 45,000.00 2,955,000.00 3,196,391.10 2,955,000.00 Stated Weighted Maturity Interest Issue Redemption Average Date Rate Price at Maturity Maturity Yield Final Maturity 10/01/2043 4.000% 45,000.00 45,000.00 Entire Issue 3,196,391.10 2,955,000.00 7.3294 3.1052% Proceeds used for accrued interest 0.00 Proceeds used for bond issuance costs (including underwriters' discount) 84,727.91 Proceeds used for credit enhancement 0.00 Proceeds allocated to reasonably required reserve or replacement fund 0.00 This informal.ion is provided b~sed on the facn,al information and assumptions provided to Gilmore & Bell, P.C. by a party to or a representative of e party to (he proposed transaction. This infonnation is intended to provide factual information only Md is provided in coajuuctlon \Vith our legal representation. It is not int.ended as fmuncial advice 01· a financial recouuuendation to any party. Gilmore & Bell, P.C. is not a financial advisor or a -~municipal adviso~• as de.fu1ed in the Secudtles E:icchange Act of 1934, as amended. Governing Body City of Salina, Kansas $ GILMOI(EBELL One Main Place -100 North Main, Suite 800 Wichita, Kansas 67202-1311 (316) 267-2091 / (316) 262-6523 FAX/ gilmorebell.com August 17, 2023 Robert W. Baird & Co., Inc. Milwaukee, Wisconsin Re: $2,955,000 General Obligation Internal Improvement Bonds, Series 2023-A, of the City of Salina, Kansas, Dated August 17, 2023 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 valid and legally binding general obligations of the Issuer. 2. The Bonds are payable as to both principal and interest in part from special assessments levied 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 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 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 tax purposes; and (b) not an item of tax preference for purposes of the federal alternative minimum tax. The opinions set forth in this paragraph are subject to the condition that the Issuer complies with all requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to comply with certain of these requirements may cause interest on the Bonds to be included in gross income for federal City of Salina, Kansas General Obligation Internal Improvement Bonds $2,955,000-Series 2023-A Dated August 17, 2023 Page2 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. 4. The interest on the Bonds is exempt from income taxation by the State of Kansas. We express no opinion regarding the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds ( except to the extent, if any, stated in the Official Statement). Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth in this opinion. The rights of the owners of the Bonds and the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at law or in equity. This opinion is given as of its date, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in law that may occur after the date of this opinion. MLW:paj 600596.20228\OPINION STIFEL I Public Finance CLOSING MEMORANDUM August 9, 2023 TO: SEE DISTRIBUTION LIST FROM: DA YID ARTEBERRY RE: BOND ISSUE CWSING 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") $2,955,000 City of Salina, Kansas General Obligation Internal Improvement Bonds Series 2023-A Dated August 17, 2023 (the "Bonds") 10:00a.m. Thursday, August 17, 2023 Via email and telephone Par Amount of Bonds Add: Reoffering Premium Less: Underwriter's Discount Less: Good Faith Deposit Net Amount Due at Closing Wire Transfer of Federal Funds 4801 Main Street, Suite 530 I Kansas City, Missouri 641121 (816) 203-8728 main Stifel, Nicolaus & Company, Incorporated I Member SIPC & NYSE I www.stifel.com $2,955,000.00 241,391.10 (32,111.66) (60,100.00) $3,104,179.44 Page2 TRANSFER INSTRUCTIONS: (Baird) DISPOSITION OF FUNDS: (City) DELIVERY OF TRANSCRIPT AND LEGAL OPINION: BOND DELIVERY INSTRUCTIONS: On Thursday, August 17, 2023 Robert W. Baird & Co., Inc. ("Baird") will wire transfer an amount of $3.104,179.44 to: Equity Bank ABA#: 101105354 Account Name: City of Salina Account#: 7701171274 Attn: Debbie Pack The City shall deposit the $3,104,179.44 received from Baird along with the good faith deposit of $60,100.00 (total of $3,164,279.44) into the following funds and accounts created pursuant to City Resolution No. 23-8140: Cost oflssuance Account Improvement Fund Total $56,197.25 3,108,082.19 $3,164,279.44 Upon receiving confirmation ofreceipt of funds, Gilmore & Bell will email a signed legal opinion to the City, Baird, and Stifel, Nicolaus & Company. Original signed legal opinions and transcripts will be mailed when completed. 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 oflssuance Account upon presentation of the proper invoices. 4801 Main Street, Suite 530 I Kansas City, Missouri 64112 I (816) 203-8728 main Stifel, Nicolaus & Company, Incorporated I Member SIPC & NYSE I www.stifel.com