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OS - Salina, KS, Series 2024-A
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 (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax, (2) the interest on the Bonds is exempt from income taxation by the State of Kansas, (3) the Bonds have not been designated as “qualified tax-exempt obligations” within the meaning of Code Section 265(b)(3). Bond Counsel notes that for tax years beginning after December 31, 2022, interest on the Bonds may be included in adjusted financial statement income of applicable corporations for purposes of determining the applicability and amount of the federal corporate alternative minimum tax. See “TAX MATTERS” in this Official Statement. See “TAX MATTERS” in this Official Statement. New Issue Moody’s Rating: “Aa3” Book-Entry Only $10,970,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2024-A Dated: Date of Delivery (the “Dated Date”) Due: As Shown Herein The General Obligation Internal Improvement Bonds, Series 2024-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, 2025 (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 July 2, 2024. This Official Statement is dated June 10, 2024. 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 $10,970,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2024-A Serial Bonds Base Principal CUSIP(1) Maturity Amount Rate Yield 794744 10-01-25 $645,000 5.000% 3.430% GY2 10-01-26 800,000 5.000 3.350 GZ9 10-01-27 845,000 5.000 3.300 HA3 10-01-28 880,000 5.000 3.300 HB1 10-01-29 925,000 5.000 3.330 HC9 10-01-30 970,000 5.000 3.350 HD7 10-01-31 1,020,000 5.000 3.350 HE5 10-01-32 1,070,000 5.000 3.350 HF2 10-01-33(2) 1,130,000 4.000 3.400 HG0 10-01-34(2) 1,170,000 4.000 3.500 HH8 10-01-35(2) 125,000 4.000 3.500 HJ4 10-01-36(2) 130,000 4.000 3.550 HK1 10-01-37(2) 135,000 4.000 3.650 HL9 10-01-38(2) 140,000 4.000 3.700 HM7 10-01-39(2) 150,000 4.000 3.800 HN5 10-01-40(2) 155,000 4.000 3.900 HP0 TERM BONDS Base Principal CUSIP(1) Maturity Amount Rate Yield 794744 10-01-42 $325,000 4.000% 4.050% HR6 10-01-44 $355,000 4.000% 4.150% HT2 (1) 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. (2) At the option of the City, Bonds maturing on October 1, 2033 and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2032, and at any time thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. [The Term Bonds are also subject to mandatory redemption as described herein.] See “THE BONDS – Redemption Provisions” herein. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE BONDS ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE BONDS HAVE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR AGENCIES HAVE GUARANTEED OR PASSED UPON THE SAFETY OF THE BONDS AS AN INVESTMENT, UPON THE PROBABILITY OF ANY EARNINGS THEREON OR UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. THIS OFFICIAL STATEMENT CONTAINS STATEMENTS THAT ARE “FORWARD-LOOKING STATEMENTS” AS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. WHEN USED IN THIS OFFICIAL STATEMENT, THE WORDS “ESTIMATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED IN SUCH FORWARD- LOOKING STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD- LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. ______________________________________________________________________________________________ CITY OF SALINA, KANSAS City/County Building - Room 206 300 West Ash P. O. Box 736 Salina, Kansas 67402-0736 (785) 309-5700 CITY COMMISSION Bill Longbine, Mayor Greg Lenkiewicz, Vice Mayor Trent Davis, Commissioner Mike Hoppock, Commissioner Jerry Ivey, Commissioner CITY STAFF Mike Schrage, City Manager Jacob Wood, Deputy City Manager Debbie Pack, Finance Director Nikki Goding, 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 ..................................................................................................................................... 13 RATING ............................................................................................................................................... 14 MUNICIPAL ADVISOR .......................................................................................................................... 15 UNDERWRITING ................................................................................................................................. 15 ABSENCE OF MATERIAL LITIGATION ................................................................................................... 15 CONTINUING DISCLOSURE ................................................................................................................. 15 CERTIFICATION OF OFFICIAL STATEMENT .......................................................................................... 16 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, 2022 APPENDIX D: UNAUDITED FINANCIAL REPORT FOR FISCAL YEAR ENDING DECEMBER 31, 2023 --- 1 OFFICIAL STATEMENT CITY OF SALINA, KANSAS $10,970,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2024-A INTRODUCTORY STATEMENT General The purpose of this Official Statement is to present certain information concerning the City of Salina, Kansas (the “Issuer” or “City”), and the offering of its $10,970,000 General Obligation Internal Improvement Bonds, Series 2024-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 herein). 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, 4622 Pennsylvania Ave, Suite 1210, 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. 10-427 et seq., K.S.A. 12-6a01 et seq, and K.S.A. 12-110c, 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”). 2 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 2033, and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2032, 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) 2042 Term Bonds. The 2042 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 2042 Term Bonds: Principal Amount Year $160,000 2041 $165,000 2042 3 (b) 2044 Term Bonds. The 2044 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 2044 Term Bonds: Principal Amount Year $175,000 2043 180,000 2044 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 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 4 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 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. 5 The interest payable on each Bond on any Bond Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the 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. Nonpresentment of Bonds If any Bond is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Bond have been made available to the Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Bond, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Bond Resolution or on, or with respect to, said Bond. If any Bond is not presented for payment within four (4) years following the date when such Bond becomes due at Maturity, the Paying Agent shall repay to the Issuer the funds theretofore held by it for payment of such Bond, and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the Issuer, and the Owner thereof shall 6 be entitled to look only to the Issuer for payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the Issuer shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Payments Due on Saturdays, Sundays and Holidays In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. Book-Entry Bonds; Securities Depository The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of DTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through DTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b) if the Bond Registrar receives written notice from Participants having interest in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(1) or (a)(2) of this paragraph, the City, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the City. 7 In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of the Bonds to the successor Securities Depository in appropriate denominations and form as provided in the Bond Resolution. THE DEPOSITORY TRUST COMPANY 1. The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered bond will be issued for each scheduled maturity of the Bonds, and will be deposited with DTC. 2. DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of “AA+”. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. 3. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. 4. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 8 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 6. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Issuer or Paying Agent, on the payment date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, the Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the Paying Agent. The requirement for physical delivery of the Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Bonds to the Paying Agent’s DTC account. 10. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Issuer or Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. 11. The Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. 9 THE FINANCING PLAN Proceeds from the sale of the Bonds will be used to provide long term financing for a portion of the costs of certain public improvements within the City (collectively, the “Projects”), pays costs associated with issuing the Bonds, and to pay a $5,000 portion of the October 1, 2024, interest payment on the City’s General Obligation Internal Improvement Bonds, Series 2016-A. The Projects are as follows: Project Description Resolution Authority (K.S.A) Principal Amount Lakeview Estates No. 2 Phase 1 SBD 22-8028 12-6a01 et seq. $534,872.21 Magnolia Hills Estates No. 2 Phase SBD 22-8028 12-6a01 et seq. 688,568.65 Wheatland Valley SBD 22-8028 12-6a01 et seq. 1,261,559.14 Fire Fighting Apparatus 23-8169 12-110c 8,480,000 $10,965,000 SOURCES AND USES OF FUNDS Funds to be used in the Financing Plan will be provided and applied approximately as follows. Sources of Funds: Principal Amount $10,970,00.00 Original Issue Premium 638,670.25 Prepaid Assessments 257,428.10 Total Sources of Funds $11,866,098.35 Uses of Funds: Deposit to Improvement Fund $11,723,092.91 Deposit to Redemption Fund 5,000.00 Costs of Issuance 105,705.00 Underwriter’s Discount, Rounding Amount, Admin Exp. 32,300.44 Total Application $11,866,098.35 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. 10 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 Kansas Legislature (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 Police and Firemen’s Retirement System (“KP&F”) and the Public Employees Retirement System – Local Group (the “Local Group” collectively KP&F and the local group are referred to as 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 KP&F had a UAAL of approximately $1.337 billion and Local Group had an UAAL of approximately $1.952 billion in calendar year 2022. 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. 11 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 Bond, 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. 12 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. Charges by the Kansas Legislature could also impact the State tax-exempt status 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 remediate 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. Potential Impacts Resulting from Epidemics or Pandemics The Issuer’s finances may be materially adversely affected by unforeseen impacts of future epidemics and pandemics, such as the Coronavirus (COVID-19) pandemic. The Issuer cannot predict future impacts of epidemics or pandemics, any similar outbreaks, or their impact on travel, on assemblies or gatherings, on the local, state or global economy, or on securities markets, or whether any such disruptions may have a material adverse impact on the financial condition or operations of the Issuer, including but not limited to the payment of debt service on any of its outstanding debt obligations. 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”. 13 TAX MATTERS General The following is a summary of the material federal and State of Kansas income tax consequences of holding and disposing of the Bonds. This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all aspects of federal income taxation that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of holders subject to special treatment under the federal income tax laws (for example, dealers in securities or other persons who do not hold the Bonds as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws of the State of Kansas, does not discuss the consequences to an owner under state, local or foreign tax laws. The summary does not deal with the tax treatment of persons who purchase the Bonds in the secondary market. Prospective investors are advised to consult their own tax advisors regarding federal, state, local and other tax considerations of holding and disposing of the Bonds. Opinion of Bond Counsel In the opinion of Bond Counsel, under the law existing as of the issue date of the Bonds: Federal Tax Exemption: The interest on the 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. Bank Qualification – The Bonds. The Bonds have not been designated as “qualified tax-exempt obligations” for purposes of Code § 265(b)(3). Kansas Tax Exemption. The interest on the Bonds is exempt from income taxation by the State of Kansas. No Other Opinions. Bond Counsel’s opinions are provided as of the date of the original issue of the Bonds, subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Bonds. Other Tax Consequences Original Issue Discount. For federal income tax purposes, original issue discount is the excess of the stated redemption price at maturity of a Bond over its issue price. The stated redemption price at maturity of a Bond is the sum of all payments on the Bond other than “qualified stated interest” (i.e., interest unconditionally payable at least annually at a single fixed rate). The issue price of a Bond is generally the first price at which a substantial amount of the Bonds of that maturity have been sold to the public. Under Code § 1288, original issue discount on tax-exempt obligations accrues on a compound basis. The amount of original issue discount that accrues to an owner of a Bond during any accrual period generally equals (1) the issue price of that Bond, plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (2) the yield to maturity on that Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), minus (3) any interest payable on that Bond during that accrual period. The amount of original issue discount accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excludable from gross income for federal income tax purposes, and will increase the owner’s tax basis in that Bond. Prospective investors should consult their own tax advisors concerning the calculation and accrual of original issue 14 discount. Original Issue Premium. For federal income tax purposes, premium is the excess of the issue price of a Bond over its stated redemption price at maturity. The stated redemption price at maturity of a Bond is the sum of all payments on the Bond other than “qualified stated interest” (i.e., interest unconditionally payable at least annually at a single fixed rate). The issue price of a Bond is generally the first price at which a substantial amount of the Bonds of that maturity have been sold to the public. Under Code § 171, premium on tax-exempt obligations amortizes over the term of the Bond using constant yield principles, based on the purchaser’s yield to maturity. As premium is amortized, the owner’s basis in the Bond and the amount of tax-exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner, which will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of the Bond prior to its maturity. Even though the owner’s basis is reduced, no federal income tax deduction is allowed. Prospective investors should consult their own tax advisors concerning the calculation and accrual of premium. Sale, Exchange or Retirement of Bonds. Upon the sale, exchange or retirement (including redemption) of a Bond, an owner of the Bond generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Bond (other than in respect of accrued and unpaid interest) and such owner’s adjusted tax basis in the Bond. To the extent the Bonds are held as a capital asset, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the Bond has been held for more than 12 months at the time of sale, exchange or retirement. Reporting Requirements. In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on Bonds, and to the proceeds paid on the sale of Bonds, other than certain exempt recipients (such as corporations and foreign entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dividend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit against the owner’s federal income tax liability. Collateral Federal Income Tax Consequences. Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with “excess net passive income,” foreign corporations subject to the branch profits tax, life insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Bonds. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Bonds should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Bonds, including the possible application of state, local, foreign and other tax laws. Bond Counsel notes that for tax years beginning after December 31, 2022, the interest on the Bonds may be included in adjusted financial statement income of applicable corporations for purposes of determining the applicability and amount of the federal corporate alternative minimum tax. 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 it 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. 15 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 UBS Financial Services, Inc., New York, New York, (the “Underwriter”) at a price equal to the par amount of the Bonds, plus a net premium of $638,670.25, less an underwriting discount of $32,300.44. 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. 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 (collectively, the “Prior Undertakings”), 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. 16 The Issuer’s audited financial statements for each of the last five fiscal years have not been available by the filing deadlines set forth in the Prior Undertakings. In compliance with the Issuer’s prior disclosure undertakings, the Issuer timely filed unaudited financial statements and promptly filed audited financial statements when they became available. CERTIFICATION OF THIS OFFICIAL STATEMENT The preparation and distribution of this Official Statement has been authorized by the City. This Official Statement is hereby duly approved by the governing body of the City as of the date on the cover page hereof. CITY OF SALINA, KANSAS A-1 APPENDIX A FINANCIAL OVERVIEW OF THE CITY 2023 Estimated Actual Valuation (1) $ 3,937,680,501 2023 Assessed Valuation $ 587,121,147 Outstanding General Obligation Bonds (2) $ 76,765,000 Population (2022 U.S. Census Bureau Estimate) 45,927 General Obligation Debt Per Capita $ 1,671 Ratio of General Obligation Bonded Debt to Estimated Actual Valuation 1.95% Ratio of General Obligation Bonded Debt to Estimated Assessed Valuation 13.07% Outstanding Temporary Notes $ 0 Outstanding State Loans (3) $ 81,074,838 Outstanding Lease Purchase Obligations $ 323,173 Outstanding Utility System Revenue Bonds $ 7,295,000 Outstanding Special Obligation Revenue Bonds $ 18,830,000 Overlapping General Obligation Debt (4) $ 167,001,740 Direct and Overlapping General Obligation Debt (5) $ 324,841,578 Direct and Overlapping General Obligation Debt Per Capita $ 7,073 Ratio of Direct and Overlapping Debt to Estimated Actual Valuation 8.25% Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation 55.33% _________________ (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 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 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-2 GENERAL INFORMATION CONCERNING THE CITY Location and Size The City of Salina is located in north central Kansas, near the geographic center of the contiguous United States. It is the seventh largest city in Kansas, with a 2023 U.S. Census Bureau estimate of 45,927. The City is the county seat for Saline County, which had an estimated 2023 U.S. Census Bureau population of 53,303. Situated at the intersection of Interstate Highways 70 and 135, the City of Salina serves as the industrial, medical, retail, trade and service hub for north central Kansas. Kansas City, Kansas, and Wichita, Kansas, are 175 and 95 miles away, respectively, via the direct access of these two major highways. The City encompasses a total area of approximately 23 square miles. Government The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas. The City has had a Commission-City Manager form of government since 1921. The Commission comprises five members elected at-large. Each year the Commission chooses one member to act as Mayor. The City Manager is appointed by the Governing Body and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The Governing Body is responsible for the policy determination, and the City Manager is responsible for the administration of the municipal government. Salina became a City of the first class on July 9, 1920. There are no organized city employee unions. The present elected officials of the City, along with the expiration of their current terms of office, are as follows: Name Title Term Expires Bill Longbine Mayor 2026 Greg Lenkiewicz Vice Mayor 2026 Trent W. Davis, M.D. Commissioner 2026 Mike Hoppock Commissioner 2028 Jerry Ivey Commissioner 2028 Population The City of Salina anchors the Salina micropolitan statistical area, the sixth largest statistical area in Kansas as delineated by the Office of Management and Budget. According to the U. S. Census Bureau, the City’s citizens had a median age of 39 years in 2023. The following table and graph show the population for the City for selected years as provided by the U.S. Census Bureau. U.S. Census Year Bureau Population 2023 45,927 2022 46,868 2021 46,481 2020 46,803 2019 46,550 2018 46,716 2017 46,994 2016 47,336 2015 47,813 2014 47,867 A-3 Police and Fire Protection The City of Salina provides police and fire protection services to residents of the City and surrounding areas. The two departments employ 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 6,600. 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 800 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 I-70 and I-135, US-81 and US-40 also intersect Salina. Several freight companies provide motor freight service in Salina with direct and connecting schedules to all cities in the United States. Bus service is available at regular intervals during each day in all directions. Union Pacific gives the City rail service in four directions out of the City and provides daily package-car service in and out of Salina. There are approximately 8 daily freights stopping in the City. Existing terminals have adequate capacity to handle present and greatly increased future capacity. Approximately 30 miles of storage tracks are available. The City is served by the Salina Regional Airport and scheduled air service is provided by United Airlines. The airline offers regularly scheduled passenger air service to Denver International Airport and Chicago O’Hare International Airport. A-4 Utilities and Infrastructure Evergy, Inc. supplies electricity and Kansas Gas Service provides natural gas to the City. The City owns its own water and sewage system. Additionally, the City is responsible for street maintenance and police and fire protection for the Airport. Multiple phone and internet service providers are available in the City. Health Facilities The City is served by Salina Regional Health Center (“SRHC”), a 393-bed 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 City participates in the Kansas Public Employees Retirement System (“KPERS”) established in 1962, as an instrumentality of the State, pursuant to K.S.A. 74-4901 et seq., to provide retirement and related benefits to public employees in Kansas. KPERS is governed by a board of trustees consisting of nine members each of whom serve four-year terms. The board of trustees appoints an executive director to serve as the managing officer of KPERS and manage a staff to carry out daily operations of the system. As of December 31, 2022, KPERS serves approximately 340,000 members and approximately 1,500 participating employers, including the State, school districts, counties, cities, public libraries, hospitals and other governmental units. KPERS administers the following three statewide, defined benefit retirement plans for public employees: (a) Kansas Public Employees Retirement System; (b) Kansas Police and Firemen’s Retirement System; and (c) Kansas Retirement System for Judges. These three plans are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Kansas Public Employees Retirement System is the largest of the three plans, accounting for approximately 95% of the members. The Kansas Public Employees Retirement System is further divided into two separate groups, as follows: (a) State/School Group - includes members employed by the State, school districts, community colleges, vocational-technical schools and educational cooperatives. The State of Kansas makes all employer contributions for this group, the majority of which comes from the State General Fund. A-5 (b) Local Group - all participating cities, counties, library boards, water districts and political subdivisions are included in this group. Local employers contribute at a different rate than the State/School Group rate. KPERS is currently a qualified, governmental, § 401(a) defined benefit pension plan, and has received IRS determination letters attesting to the plan’s qualified status dated October 14, 1999 and March 5, 2001. KPERS is also a “contributory” defined benefit plan, meaning that employees make contributions to the plan. This contrasts it from noncontributory pension plans, which are funded solely by employer contributions. The City'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 2004, 2015 and 2021, the Kansas Development Finance Authority, on behalf of the State, issued pension obligation bonds and contributed the proceeds thereof to KPERS to assist with improving the status of the unfunded actuarial pension liability. In 2022 the Legislature provided for additional contributions totaling $1.125 billion in four payments to be deposited into the KPERS trust fund for the School Group. For more information about the Legislature’s actions related to KPERS, please see the 2022 Valuation Report referenced below. The City'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 City'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 City 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, 2022 (the “2022 Valuation Report”) the KPERS Local Group, of which the City is a member, carried an unfunded accrued actuarial liability (“UAAL”) of approximately $1.952 billion at the end of 2022. The amount of the UAAL in 2022 changed from the previous year’s amount due to the factors discussed in the 2022 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 2022 Valuation Report is available on the KPERS website at kpers.org/about/reports. The City has no means to independently verify any of the information set forth on the KPERS website or in the 2022 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 2022 Valuation Report sets the employer contribution rate for the period beginning January 1, 2025, for the KPERS Local Group, and KPERS’ actuaries identified that an employer contribution rate of 9.60% 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 2022 Valuation Report. The statutory contribution rate of employers currently equals the 2022 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 City 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 City's employees currently annually contribute 7.15% of their gross salary to the plan. For the year beginning January 1, 2023, the City 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 City 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 City. The GASB 68 Report is available on the KPERS website at kpers.org/about/reports.html. The City has no means to independently verify any of the information set forth on the KPERS website or in the GASB 68 A-6 Report. It is important to note that under existing State law, the City 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 26 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 2020 prepared by the Docking Institute of Public Affairs at Fort Hays State University and published in May 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 17.6% of the employment in Saline County and 42% 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 2023 to be 25,352 persons. The estimated median household income for the City in 2022 was $52,702, and owner-occupied housing rates in the City were 64.4%. Salina is a city centered more on industry than agriculture. Currently, there are approximately 100 manufacturing and processing companies located in the City. The City, Saline County, the Chamber of Commerce, and the Salina Airport Authority have developed several economic incentives which can be offered as inducements to opening industrial facilities. These include property tax abatement for basic industry, the waiving of building A-7 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 I- 70. The Airport also accommodates a wide variety of aircraft including business jets, military, flight training and general aviation aircraft. During 2023, the Salina Air Traffic Control Tower logged over 81,000 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 2.069 million gallons of fuel to the wide variety of aircraft utilizing the Airport during 2023 and 453,894 as of March 2024. 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 2023 the Salina Airport recorded 15,734 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-8 Major Employers Industrial development during the past ten years has established a broad, industrial base in and around the City. A list of the major employers is as follows. All figures represent total full-time employment excluding seasonal and part-time employees. Estimated Name Product/Business Employment Salina Regional Health Center Healthcare 1,900 Unified School District No. 305 School System 1,600 Great Plains Manufacturing Agricultural & Landscaping Equipment 950 Schwan’s Global Supply Chain, Inc. Manufacturing 900 Stryten Manufacturing Battery Manufacturer 800 City of Salina City Government 440 Salina Vortex Manufacturing 405 Saline County Local Government 335 St. Francis Ministries Discount Retail 300 Wal-Mart Retail 250 Source: Salina Chamber of Commerce Income The following table shows the per capita personal income for residents of Saline County and the State during the years indicated: Saline State of Year County Kansas 2021 N/A $59,324 2020 $53,320 56,099 2019 50,099 53,203 2018 49,201 51,139 2017 47,632 49,033 Source: Kansas Statistical Abstract Labor Force The following tables show the labor force figures for the City of Salina and the State of Kansas. City of Salina: Total Unemployment Year Labor Force Employed Unemployed Rate 2024 (Apr) 25,099 24,489 610 2.4% 2023 25,352 24,873 479 1.9 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 A-9 State of Kansas: Total Unemployment Year Labor Force Employed Unemployed Rate 2024 (Apr) 1,506,604 1,465,553 41,051 3.0% 2023 1,510,988 1,470,936 40,052 2.7 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 Source: Kansas Department of Labor DEBT SUMMARY OF THE CITY Current Indebtedness The following is an overview of the City’s outstanding indebtedness by classification as of the dated date of the Bonds. Figures do not include bonds for which payment has been provided through the creation of designated escrow accounts. General Obligation Bonds: Date Amount Final Amount Issued Series Purpose of Issue Maturity Outstanding 02-15-13 2013-A Taxable Improvements $1,360,000 10-01-28 $535,000 07-29-15 2015-A Revenue and Internal Imp. 6,825,000 10-01-35 4,035,000 07-27-16 2016-A Internal Improvements 6,570,000 10-01-36 4,620,000 07-27-16 2016-B Refunding 13,750,000 10-01-31 6,270,000 07-27-17 2017-A Improvements 9,310,000 10-01-37 7,085,000 11-27-18 2018-A Improvements 2,090,000 10-01-33 1,510,000 04-24-19 2019-A Improvements 11,090,000 10-01-39 9,570,000 04-29-20 2020-A Improvements 5,210,000 10-01-35 3,540,000 11-30-20 2020-B Refunding 8,450,000 10-01-36 6,115,000 04-29-21 2021-A Improvements 7,645,000 10-01-41 7,100,000 09-08-21 2021-B Refunding 6,220,000 10-01-34 5,010,000 04-28-22 2022-A Improvements 7,840,000 10-01-42 7,450,000 08-17-23 2023-A Internal Improvements 2,955,000 10-01-43 2,955,000 07-02-24 2024-A Internal Improvements 10,970,000 10-01-44 10,970,000 Total $76,765,000 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-10 Utility System Revenue Bonds: Revenue bonds are payable solely from the net revenues derived by the City from the operation of its combined water and sewage system. Revenue bonds do not represent a general obligation indebtedness of the City for which the City’s taxing ability has been pledged. Date Issued Pledged Revenue Series Amount of Issue Final Maturity Amount Outstanding 09-11-19 Water and Sewer System 2019 $10,330,000 10-01-31 $7,295,000 Lease Obligations: 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. (to be updated) Date Issued Pledged Revenue Series Amount of Issue Final Maturity Amount Outstanding 12-21-18 Sales Tax Revenue 2018-A $18,250,000 12-01-38 $14,510,000 12-21-18 Sales Tax Revenue 2018-B 4,320,000 12-01-38 4,320,000 Total: $18,830,000 State Loans The following is a list of outstanding loans the City has taken out through the Kansas Department of Health and Environment (“KDHE”) revolving loan fund program. KDHE loans are typically repaid by net revenues from municipal water or sewer systems. Regardless of the intended source of repayment, the loans are ultimately secured by the City’s ability to levy unlimited ad valorem property taxes. Project Number Purpose Year Originated Final Payment Date Original Amount Amount Outstanding KDHE 2629 Water 2014 08-01-34 $8,562,911 $ 4,696,122 KDHE 2917 Water 2019 02-01-40 32,000,000 26,728,024 KDHE 2957 Water 2019 02-01-40 4,250,000 3,549,816 KDHE 2998 Water 2019 02-01-40 4,250,000 3,782,582 KDHE 2050 Sewer 2020 03-01-35 1,399,012 818,294 KDHE 2049* Sewer 2021 09-01-42 41,500,000 41,500,000 $81,074,838 *Construction began on this project in 2023 and is expected to be 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 $20,236,478 of the authorized amount. Item Year Issued Original Amount Final Year Amount Outstanding HVAC System 2012 $1,100,000 2027 $323,173 A-11 Overlapping Debt According to the Saline County Clerk’s office and audited financial statements, the following table shows the overlapping general obligation indebtedness of the City. The percent of an overlapping jurisdiction’s debt that is applicable to the City is calculated by dividing the assessed valuation of that portion of the jurisdiction’s boundaries which overlap those of the City by the total assessed valuation of such jurisdiction. (1) As of the closing date of the Bonds. (2) Includes $69,845,000 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. *Includes payments made prior to the closing date of the Bonds. Amount Estimated Share of the City Jurisdiction Outstanding(1) Amount Percentage Salina Airport Authority $32,960,000 $32,960,000 100.00% Saline County(2) 70,344,519 52,796,409 75.05 Unified School District No. 305 87,070,000 81,245,331 93.31 $167,001,740 Existing Bonds Series 2024-A Bonds Year Principal Interest Principal Interest Total 2024 6,450,000 1,882,815 $645,000 $636,520 $9,614,335 2025 6,215,000 1,679,566 800,000 478,100 9,172,666 2026 5,540,000 1,494,896 845,000 438,100 8,317,996 2027 5,360,000 1,325,539 880,000 395,850 7,961,389 2028 5,115,000 1,163,904 925,000 351,850 7,555,754 2029 4,885,000 1,006,696 970,000 305,600 7,167,296 2030 4,210,000 870,846 1,020,000 257,100 6,357,946 2031 4,160,000 757,319 1,070,000 206,100 6,193,419 2032 4,105,000 643,974 1,130,000 152,600 6,031,574 2033 4,095,000 534,998 1,170,000 107,400 5,907,398 2034 3,670,000 423,701 125,000 60,600 4,279,301 2035 3,520,000 328,213 130,000 55,600 4,033,813 2036 2,835,000 233,388 135,000 50,400 3,253,788 2037 1,940,000 156,825 140,000 45,000 2,281,825 2038 1,210,000 99,550 150,000 39,400 1,498,950 2039 1,240,000 66,200 155,000 33,400 1,494,600 2040 510,000 32,050 160,000 27,200 729,250 2041 520,000 19,850 165,000 20,800 725,650 2042 170,000 7,350 175,000 14,200 366,550 2043 45,000 1,800 180,000 7,200 234,000 $65,795,000 $12,727,679 $10,970,000 $3,683,020 $93,177,499 A-12 Historical Debt Information The following table shows historical balances of outstanding general obligation bonds for the City during the period indicated below. Bonds Debt to Debt to U.S. Debt Outstanding Assessed Estimated Actual Census Per Year December 31 Valuation Valuation Population Capita 2023 $65,795,000 11.21% 1.67% 45,927 $1,432.60 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 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 includes approximately $36 million of projects to be funded with general obligation debt over the next five calendar years. 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-13 FINANCIAL INFORMATION CONCERNING THE CITY Accounting, Budgeting and Auditing Procedures The City follows a modified accrual basis of accounting for all tax supported funds of the City, including the General Fund. An annual budget of estimated receipts and disbursements for the coming calendar year is required by statute to be prepared for all funds (unless specifically exempted). The budget is prepared utilizing the modified accrual basis which is further modified by the encumbrance method of accounting. For example, commitments such as purchase orders and contracts, in addition to disbursements and accounts payable, are recorded as expenditures. The budget lists estimated receipts by funds and sources and estimated disbursements by funds and purposes. The proposed budget is presented to the governing body of the City prior to August 1, with a public hearing required to be held prior to August 15, with the final budget to be adopted by a majority vote of the governing body of the City prior to August 25 of each year (or September 20 if the City must conduct a public hearing to levy taxes in excess of its revenue neutral rate described below). Budgets may be amended upon action of the governing body after notice and public hearing, provided that no additional tax revenues may be raised after the original budget is adopted. The City may levy taxes in accordance with the requirements of its adopted budget. Property tax levies are based on the adopted budget of the City and the assessed valuations provided by the County appraiser. In 2021, the Kansas Legislature passed legislation (the “Revenue Neutral Tax Act”) that repeals the “tax lid” (formerly K.S.A. 79-2925c) and provides that, beginning January 1, 2021, a taxing subdivision (which includes any political subdivision of the State that levies an ad valorem property tax, including the City) is not authorized to levy a property tax rate in excess of its revenue neutral rate without first providing notice, holding a public hearing, and authorizing such property tax rate by majority vote of its governing body. The revenue neutral rate means the tax rate for the current tax year that would generate the same property tax revenue as levied the previous tax year using the current tax year’s total assessed valuation. The Revenue Neutral Tax Act provides that by June 15 of every year, each county clerk shall calculate the revenue neutral rate for each taxing subdivision in their respective county. If a taxing subdivision desires to levy a tax rate in excess of its revenue neutral rate, it must first publish notice of a public hearing and notify the county clerk of the taxing subdivision’s intent to exceed the revenue neutral rate. The county clerk is required to provide notice of the public hearing to each taxpayer with property in the taxing subdivision, along with following information concerning the taxing subdivision: (1) the revenue neutral rate, (2) the proposed property tax revenue needed to fund the proposed budget, (3) the proposed tax rate based on the proposed budget, (4) the tax rate and property tax of each taxing subdivision on the taxpayer’s property from the previous year’s tax statement, (5) the appraised value and assessed value of the taxpayer’s property, (6) estimates of the tax for the current tax year on the taxpayer’s property based on the revenue neutral rate of each taxing subdivision and any proposed tax rates that exceed the revenue neutral rates, (7) the difference between the estimates of tax based on the proposed tax rate and the revenue neutral rate. The public hearing regarding exceeding the revenue neutral rate is to he held between August 10 and September 10, and can be held in conjunction with the taxing subdivision’s budget hearing. If multiple taxing subdivisions within the county are required to hold a public hearing, the notices to the taxpayer can be combined into a single notice. After the public hearing, the taxing subdivision can approve exceeding the revenue neutral rate by a majority vote of its governing body, and the amount of tax to be levied must be certified to the county clerk by September 20. The taxing subdivision’s adopted budget shall not result in a tax rate in excess of its proposed rate stated in the notice provided to the taxpayers. If a taxing subdivision fails to comply with the requirements of the Revenue Neutral Tax Act, it shall refund to the taxpayers any property taxes over collected based on the amount of the levy that was in excess of the revenue neutral rate. The City cannot predict the impact of the Revenue Neutral Tax Act on the ratings on the Securities, or the general rating of the City. A change in the rating on the Securities or a change in the general rating of the City may adversely impact the market price of the Securities in the secondary market. A-14 Kansas law prohibits governmental units from creating indebtedness unless there are funds on hand in the proper accounts and unencumbered by previous action with which to pay such indebtedness. An exception to this cash-basis operation is made where provision has been made for payment of obligations by bonds or other specific debt obligations authorized by law. The financial records of the City are audited annually by a firm of independent certified public accountants in accordance with generally accepted auditing standards. In recent years, the annual audit has been performed by Gordon Certified Public Accountants, Lawrence, Kansas. The 2022 audit was performed by FORVIS, LLP. 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: 2019 2020 2021 2022 Property Taxes $10,801,226 $11,497,684 $10,820,524 10,554,177 Sales Tax 13,418,742 13,697,179 16,853,083 18,467,819 Other Taxes 5,086,492 4,925,381 5,351,559 6,028,427 Intergovernmental 1,351,967 2,453,021 1,144,657 1,184,485 Charges for Services 5,816,485 4,942,217 5,841,900 6,580,579 Investment Revenue 613,249 256,515 78,253 206,496 Miscellaneous 609,676 981,845 719,637 832,136 Total Revenues $37,778,837 $38,753,842 $40,539,613 $43,467,320 Expenditures: General Government $4,581,505 $5,505,967 $5,629,698 $6,783,483 Public Safety 23,692,445 22,435,061 23,214,758 24,824,641 Public Works 5,473,414 5,101,204 5,464,894 5,846,877 Public Health and Sanitation 816,636 682,439 746,880 800,884 Culture and Recreation 4,379,441 3,037,594 3,732,377 4,025,077 Planning and Development 836,690 673,564 55,174 702,721 Capital Outlay 985,861 608,460 675,363 372,260 A-15 Total Expenditures $40,765,992 $38,044,289 $39,519,144 $43,355,943 Revenues Over (Under) $(2,987,155) $709,553 $1,020,469 $498,176 Other Sources (Uses) 5,551,752 4,929,300 4,900,800 4,266,300 Net Change in Fund Balance 2,564,597 $5,638,853 $5,921,269 $4,764,476 Fund Balance January 1 $6,742,577 $9,503,410 $15,142,263 $21,063,532 Restatement of Prior Year Balance 0 0 0 0 Fund Balance December 31 $9,307,174 $15,142,263 $21,063,532 $25,828,008 Assessed Valuation According to the Saline County Clerk’s Office, the following table gives the November 1 assessed valuation of the City, unless otherwise noted, in the years indicated. State Total Real Personal Assessed Motor Assessed Year Estate Property Utilities Vehicle Valuation 2023 $499,863,443 $8,546,299 $23,037,764 $55,673,641 $587,121,147 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 Estimated Actual Valuation Based on assessment percentages provided by Kansas Statutes, real estate equalization ratios provided by the Kansas Department of Revenue (see “FINANCIAL INFORMATION CONCERNING THE CITY - Property Assessment Rates”), and estimated actual valuation figures provided by the Saline County Appraiser’s Office, the following table provides November 1 estimated actual valuations for the City in the years indicated. Residential Real Estate Estimated Year Equalization Ratio Actual Value 2023 N/A $3,937,680,501 2022 10.48 3,705,559,200 2021 10.87 3,392,138,959 2020 10.79 3,325,193,918 2019 11.44 3,292,557,745 2018 11.17 3,150,409,123 2017 11.04 3,097,885,103 2016 11.36 3,046,949,034 2015 11.28 2,968,008,193 2014 11.65 2,917,267,724 A-16 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-17 Current Current and Delinquent Levy Tax Taxes Tax Collections Tax Collections Year Rate Levied Amount % Amount % 2023* 30.348 $17,087,434 $10,721,698 62.7% $10,728,464 62.8% 2022 30.348 16,777,459 16,086,452 96.0 16,099,745 96.1 2021 30.452 15,125,318 15,125,318 98.3 15,310,315 99.5 2020 30.650 15,028,646 15,028,646 98.7 15,045,546 98.8 2019 29.720 14,538,092 14,538,092 97.2 14,732,831 98.6 2018 28.394 13,427,810 13,427,810 97.4 13,590,888 98.6 2017 26.129 12,381,334 12,381,334 97.3 12,602,044 99.0 2016 27.603 11,564,876 11,320,197 97.9 11,524,101 99.6 2015 27.311 11,209,245 10,984,630 98.0 11,169,600 99.6 *Represents collections through April 2024. Tax Levies Nov 2019 Levy Nov 2020 Levy Nov 2021 Levy Nov 2022 Levy Nov 2023 Levy City of Salina 29.720 30.650 30.452 30.348 29.616 Salina Library 5.913 5.880 6.028 5.510 5.614 State Education & Other 1.500 1.500 1.500 1.500 1.500 Unified School District No. 305 55.508 55.454 54.903 53.425 54.461 Airport Authority 4.447 5.037 4.838 4.968 6.190 Central Kansas Extension District 1.198 1.206 1.196 1.111 1.057 Saline County 41.097 40.606 39.782 38.860 39.867 Total 139.383 140.333 138.699 135.722 138.305 Largest Taxpayers According to the Saline County Clerk’s Office, the following table lists the largest taxpayers in the City, their November 2023 assessed valuations, and the percentage each taxpayer comprised of the total assessed valuation of the City. % of Type of Assessed Total Company Business Valuation Valuation Evergy, Inc. Utility $13,690,289 2.33% SFC Global Supply Chain Inc Manufacturing 7,345,168 1.25 Kansas Gas Service Utility 5,935,323 1.01 RAF Salina LLC Retail Shopping Center 3,986,505 0.68 Lighthouse Properties III, Inc. Hotel 3,234,863 0.55 S&B Motels Motel 2,991,301 0.51 Salina Regional Health Properties Medical 2,589,001 0.44 Union Pacific Railroad Co. Railroad 2,407,233 0.41 Dominion Resources LLC Retail 2,163,076 0.37 Wal-Mart Real Estate Retail 2,030,050 0.35 Total $46,372,818 7.90% A-18 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 2024* $19,243,675 2023 144,278,110 2022 211,832,283 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 *March 2024 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-19 City’s Portion of Citywide 1% Countywide Local Option Local Option Year Sales & Use Tax Receipts Sales & Use Tax Receipts 2024(1) $7,836,437 $4,035,925 2023 19,068,649 9,928,531 2022 18,526,850 9,707,849 2021 16,971,338 8,798,402 2020 15,160,656 7,756,909 2019 14,922,405 7,608,604 2018 14,632,584 7,415,804 2017 14,404,702 7,368,869 2016(2) 10,458,630 7,312,618 2015 10,372,573 7,376,708 (1) Through May 2024. Aggregate sales and use tax receipts for this period are approximately 2.3% below levels for same period in 2023. (2) 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. 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. A-20 Real Property: Residential 11.5% Commercial and Industrial- Real Property 25.0 Agricultural Land (1) 30.0 Agricultural Improvements 25.0 Vacant Lots 12.0 Not-for-Profit (2) 12.0 All Other 30.0 Personal Property: (3) Mobile Homes 11.5% Mineral Leaseholds (large) 30.0 Mineral Leaseholds (small) 25.0 Commercial & Industrial Machinery & Equipment 25.0 All Other 30.0 Utilities: Railroads federally mandated rate All Other Public Utilities 33.0% Motor Vehicles: 20.0% Property Exempt: Property used for the following purposes, or portions thereof, are exempt from taxation provided certain statutory requirements are met: religious, educational, literary, scientific, benevolent, alumni associations, veterans’ organizations, or charitable purposes, including parsonages and community service organizations providing humanitarian services. (1) Agricultural land is valued based on the productivity value of the property and not estimated market valuation. (2) A bill passed by the Kansas Legislature in 1994 clarified this class of property to include all property owned and operated by not-for-profit organizations not subject to federal income taxation pursuant to paragraphs (2), (3), (4), (7), (8), or (10) of Subsection C of Section 501 of the federal internal revenue code. This bill specifically established that private, not-for-profit country clubs would be assessed at 12% for all land that does not accommodate buildings or improvements. (3) The 2006 Kansas Legislature exempted from all property or ad valorem property taxes levied under the laws of the State, all commercial, industrial, telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existing business or creation of a new business. Equalization Ratios 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 Kansas Appraisal/Sales Ratio Study, the equalization ratio for residential real property in Saline County was 10.48%, and commercial and industrial property was 19.80%. APPENDIX B Form of Continuing Disclosure Undertaking 600596.20255\DISCLOSURE UNDERTAKING CONTINUING DISCLOSURE UNDERTAKING CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2024-A DATED JULY 2, 2024 This CONTINUING DISCLOSURE UNDERTAKING dated as of July 2, 2024 (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 July 2, 2024, 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)(1) and (2). “Beneficial Owner” means any registered owner of any Obligations and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Obligations (including persons holding Obligations through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Obligations for federal income tax purposes. “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. “Comprehensive Financial Report” means the Issuer's Comprehensive Annual Financial 600596.20255\DISCLOSURE UNDERTAKING 2 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, 2024, 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 Official Statement with such adjustments to formatting or presentation determined to be reasonable by the Issuer. 600596.20255\DISCLOSURE UNDERTAKING 3 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 of a merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of the trustee, if material; 600596.20255\DISCLOSURE UNDERTAKING 4 (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. 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 600596.20255\DISCLOSURE UNDERTAKING 5 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.] 600596.20255\DISCLOSURE UNDERTAKING S-1 IN WITNESS WHEREOF, the Issuer has caused this Continuing Disclosure Undertaking to be executed as of the day and year first above written. CITY OF SALINA, KANSAS (SEAL) Mayor City Clerk 600596.20255\DISCLOSURE UNDERTAKING EXHIBIT A TO CONTINUING DISCLOSURE UNDERTAKING FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial information and operating data contained in the following sections and tables contained in Appendix A of the final Official Statement (with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer) relating to the Obligations: • Financial Overview of the City • FINANCIAL INFORMATION CONCERNING THE CITY - Assessed Valuation • FINANCIAL INFORMATION CONCERNING THE CITY - Estimated Actual Valuation • FINANCIAL INFORMATION CONCERNING THE CITY - Tax Collections • FINANCIAL INFORMATION CONCERNING THE CITY - Tax Levies • FINANCIAL INFORMATION CONCERNING THE CITY - Largest Taxpayers APPENDIX C December 31, 2022 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, 2022, including financial statements as audited by the firm of FORVIS, LLP, Wichita, Kansas. Other than auditing said financial statements, FORVIS LLP has not performed any procedures relating to this offering document. [Adressee - Board of Directors] [Client Name] 1 City of Salina, Kansas Independent Auditor’s Report, and Financial Statements December 31, 2022 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, 2022 Prepared by Department of Finance and Administration of City of Salina, Kansas City of Salina, Kansas December 31, 2022 CONTENTS INTRODUCTORY SECTION Letter of Transmittal ............................................................................................................................... i-iv Organizational Chart ................................................................................................................................ v List of Principal Officials ........................................................................................................................... vi FINANCIAL SECTION Independent Auditor’s Report .............................................................................................................. 1 Management’s Discussion and Analysis ............................................................................................ 5 Basic Financial Statements Government-wide Financial Statements Statement of Net Position ................................................................................................................. 17 Statement of Activities ...................................................................................................................... 19 Fund Financial Statements Balance Sheet – Governmental Funds ............................................................................................. 20 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ...... 21 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ................................................................................................................. 22 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of the Governmental Funds to the Statement of Activities ..................................................................... 23 Budget Comparison Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Non-GAAP Basis) - General Fund ............................................................... 24 Budget Comparison Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Non-GAAP Basis) - Sales Tax Capital Fund ................................................ 25 Statement of Net Position - Proprietary Funds ................................................................................. 26 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds .................. 28 Statement of Cash Flows - Proprietary Funds.................................................................................. 29 Statement of Fiduciary Net Position - Fiduciary Funds .................................................................... 30 Statement of Changes in Fiduciary Net Position - Fiduciary Funds ................................................. 31 Notes to Financial Statements .......................................................................................................... 32 Required Supplementary Information Other MD&A Other Postemployment Benefits Schedule of Changes in the City’s Total OPEB Liability and Related Ratios ................................... 78 Other Postemployment Benefits - KPERS Schedule of Changes in the City’s Total OPEB Liability and Related Ratios .................................. 79 City of Salina, Kansas December 31, 2022 KPERS Pension Plan Schedule of the City’s Proportionate Share of the Net Pension Liability .......................................... 80 Supplementary Information Combining Schedules and Individual Fund Statements Combining Balance Sheet - Nonmajor Governmental Funds .......................................................... 82 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds ................................................................................................. 83 Combining Balance Sheet - Nonmajor Special Revenue Funds ...................................................... 84 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds ............................................................................................. 88 Combining Balance Sheet - Nonmajor Permanent Funds ............................................................... 92 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Permanent Funds ...................................................................................................... 93 Internal Service Fund Descriptions ................................................................................................... 94 Combining Statement of Net Position - Internal Service Funds ....................................................... 95 Combining Statement of Revenues, Expenses, and Changes in Net Position - Internal Service Funds ................................................................................................................ 96 Combining Statement of Cash Flows - Internal Service Funds ........................................................ 97 Budgetary Comparison Schedules - Budget and Actual (Non-GAAP Basis) Tourism and Convention Fund ..................................................................................................... 98 Special Gas Fund ......................................................................................................................... 99 Bicentennial Center Fund ........................................................................................................... 100 Business Improvement District Fund .......................................................................................... 101 Neighborhood Park Fund ............................................................................................................ 102 Special Parks and Recreation Fund ........................................................................................... 103 Special Alcohol Fund .................................................................................................................. 104 Sales Tax Economic Development Fund ................................................................................... 105 Arts & Humanities Fund .............................................................................................................. 106 Debt Service Fund ...................................................................................................................... 107 Solid Waste Disposal Fund ......................................................................................................... 108 Water and Sewer Fund ............................................................................................................... 109 Sanitation Fund ........................................................................................................................... 110 Golf Course Fund ....................................................................................................................... 111 Workers’ Compensation Reserve Fund ...................................................................................... 112 Health Insurance Fund ............................................................................................................... 113 Central Garage Fund .................................................................................................................. 114 City of Salina, Kansas December 31, 2022 STATISTICAL SECTION Net Position by Component - Last Ten Fiscal Years ...................................................................... 115 Changes in Net Position - Last Ten Fiscal Years ........................................................................... 116 Fund Balances, Governmental Fund - Last Ten Fiscal Years ........................................................ 117 Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years .................................. 118 Tax Revenues by Source, Governmental Funds - Last Ten Fiscal Years ..................................... 119 Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ................... 120 Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years ............................................ 121 Principal Property Taxpayers ......................................................................................................... 122 Property Tax Levies and Distributions ............................................................................................ 123 Direct Sales Rate by Taxing Entity ................................................................................................. 124 Water Sales by Class of Customer ................................................................................................. 125 Ratio of Outstanding Debt by Type ................................................................................................ 126 Ratio of Net General Bonded Debt Outstanding ............................................................................ 127 Direct and Overlapping Governmental Activities Debt ................................................................... 128 Legal Debt Margin .......................................................................................................................... 129 Pledged Revenue Coverage .......................................................................................................... 130 Demographic and Economic Statistics ........................................................................................... 131 Principal Employers ........................................................................................................................ 132 Introductory Section DEPARTMENT OF FINANCE TELEPHONE (785) 309-5735 AND ADMINISTRATION FAX (785) 309-5738 300 West Ash, P.O. Box 736 TDD (785) 309-5747 Salina, Kansas 67402-0736 Website: www.salina-ks.gov i May 21, 2024 To the Citizens of the City of Salina, Kansas: The Annual Comprehensive Financial Report of the City of Salina, Kansas (the "City") for the year ended December 31, 2022, 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, the changes in financial position/fund balances and, where applicable, the cash flows of all funds 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 Annual Comprehensive 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. 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. ii 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 2022 decennial census was 46,868. 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 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 Vortex Global, GeoProbe Systems, Great Plains Manufacturing/Kubota, 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 1.51 in 2022. 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 2022. Two Salina area company’s announced major expansions in the second half of 2020. Schwan’s Company announced expansion of its pizza production facility, adding approximately 225 jobs to the Salina area. Kubota announced a new plant for the production of compact track loaders, adding approximately 120 jobs to the Salina area. iii 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. In 2018, the City of Salina issued $22,570,000 in STAR bonds which funded several projects in the City’s downtown corridor. In 2020 Homewood Suites opened for business and the majority of the City’s Downtown Streetscape project was completed. Other major projects that were on going included gutter and paving on North 9th Street, South Well Field improvements, continued improvements to the water distribution system and preliminary design on the Smoky Hill River Renewal and construction of the Police Training Center project. The City continues to address fiduciary pressures generated by a recessionary economy and the more recent financial impacts of the Covid-19 pandemic. General adjustments to the pay plan for cost of living changes at a rate of 2.0% were implemented in 2022. The City offered merit increases up to 3% in 2022. 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. CIP increases in 2022 and 2023 are a result of the anticipated beginning of the construction of the Smoky Hill River Renewal Project, Fire Station No. 4 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 2023 and 2024 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 iv 8. Provide a linkage between capital improvement scheduling and long-term debt management planning 9. Require annual audits conducted in accordance with auditing standards generally accepted in the United States of America 10. Require timely and regular interim financial reporting to the Governing body 11. Ensure the safety of cash and near cash resources (timely collection of Accounts Receivable, etc.). Acknowledgments The preparation of the 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 FORVIS, LLP 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 City of Salina CITIZENS CITY COMMISSION Trent Davis, Mayor Karl Ryan Bill Longbine Greg Lenkiewicz Mike Hoppock City Manager Michael Schrage Development Services Lauren Driscoll Legal Services Clark Mize & Linville Chartered* Greg Bengtson Computer Technology Interim-Scott Gardner Police Interim Sean Morton Fire Tony Sneidar Public Works Jim Teutsch Engineering Public Services Streets Traffic Control Flood Control Sanitation Solid Waste Central Garage Fire Administration Fire Suppression Fire Prevention EMS Water Plant Division Wastewater Plant Division Utility Division Water Distribution Wastewater Collection Administration Patrol Division Support Division Investigative Division Finance/Administration Debbie Pack City Clerk Water Customer Accounting Finance Smoky Hill Museum Arts & Humanities Brad Anderson Human Resources Natalie Fischer Parks & Recreation Jeff Hammond Utilities Martha Tasker Municipal Court Building Services Neighborhood Services Planning & Zoning Community Relations Parks Division Recreation Division Golf Course Facility Maintenance Animal Services Bicentennial Center Continuous Process Improvement Scott Gardner * Contract Position Deputy City Manager Jacob Wood Assistant City Manager Shawn Henessee Risk Management (I!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!) II II I I I I I I I I I I I I I I r r "I r "'I r \... ~ '-,) \... '- I I I I I I I I I I I I ] ' r ' r \... \.,_ I I 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 Hennessee, Assistant City Manager Greg Bengston, 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, Computer Technology and Continuous Process Improvement Director Sean Morton, Interim Police Chief Martha Tasker, Director of Utilities Jim Teutsch, Director of Public Works Tony Sneidar, Fire Chief Independent Auditor’s Report Mayor and City Commissioners City of Salina, Kansas Salina, Kansas Opinions We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas (City), as of and for the year ended December 31, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of December 31, 2022, and the respective changes in financial position, and, where applicable, cash flows thereof and the respective budgetary comparisons for the General and Sales Tax Capital funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. We did not audit the financial statements of the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB), a blended component unit, which represent 11.08%, 11.47%, and 5.42% respectively, of the assets, the net position/fund balances and the revenues/additions of the aggregate remaining fund information as of and for the year ended December 31, 2022. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for SFH QalicB, is based solely on the report of the other auditors. We also did not audit the financial statements of the Salina Airport Authority, a discretely presented component unit, which represent 88.23%, 79.30% and 75.67% respectively, of the assets and deferred outflows of resources, net position, and program revenues of the aggregate discretely presented component units as of and for the year ended December 31, 2022. We also did not audit the financial statements of the Housing Authority of the City of Salina, a discretely presented component unit, which represent 11.77%, 20.70% and 24.33% respectively, of the assets and deferred outflows of resources, net position, and program revenues of the aggregate discretely presented component units as of and for the year ended December 31, 2022. Those statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Salina Airport Authority and the Housing Authority of the City of Salina, is based solely on the reports of the other auditors. FORV/s· 1551 N. Waterfront Parkway, Suite 300 / Wichita, KS 6720'6 P 316.265.2811 / F 316.265.9405 forvis.com Mayor and City Commissioners City of Salina, Kansas Page 2 Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the Kansas Municipal Audit and Accounting Guide (KMAAG). Our responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the Financial Statements” section of our report. We are required to be independent of the City of Salina, Kansas and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of a Matter The 2021 financial statements, before they were restated for the matter discussed in Note 15, were audited by other auditors, and their report thereon, dated October 14, 2022, expressed unmodified opinions. Our opinions are not modified with respect to this, matter. As discussed in Note 6 to the financial statements, in 2022, the City adopted Governmental Accounting Standards Board Statement Number 87, Leases. Our opinions are not modified with respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 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 12 months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 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 KMAAG 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 judgment made by a reasonable user based on the financial statements. Mayor and City Commissioners City of Salina, Kansas Page 3 In performing an audit in accordance with GAAS and KMAAG, we: Exercise professional judgment 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 amounts 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 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 judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about 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. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, pension, and other postemployment benefit information 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. Mayor and City Commissioners City of Salina, Kansas Page 4 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 combining schedules and individual fund statements and budgetary comparison schedules, as listed in the accompanying table of contents 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 auditor’s 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. Wichita, Kansas May 21, 2024 City of Salina, Kansas Management’s Discussion and Analysis Year Ended December 31, 2022 5 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, 2022. 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 $28.5 million from current activities with net position change of $3.3 million and $25.1 million in governmental activities and business-type activities, respectively. Of this increase, $17.2 million of the increase to business-type activities related to a restatement for a correct of an error. At the close of 2022, the City’s governmental funds reported combined ending fund balances of $122.2 million, an increase of $9.97 million from the prior year. The General Fund balance increased $4.7 million, the Sales Tax Capital Fund decreased $1.3 million, the Former Schilling AFB Environmental Fund decreased $1.1 million and all Other Governmental Funds fund balances increased $6.6 million over the prior year. At the close of 2022, the City’s enterprise funds reported a combined ending Net Position of $118.7 million, an increase of $25.1 million compared to the prior year. The Water and Sewer Fund, accounted for most of the increase at $22.2 million (which included the $17.2 million restatement noted above), while the Sanitation Fund and Solid Waste Disposal Funds showed slight increases, the Golf Fund reported a slight decrease to the net position for the year. Revenues from governmental activities decreased by $61.5 million from the prior year and revenues from business-type activities increased $1.8 million from the prior year. Revenues from investments increased by $329 thousand. The City adopted Governmental Accounting Standards Board Statement No. 87, Leases, in 2022. Comparative 2021 information presented herein has not been restated for its adoption. 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 nonmajor 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 activities 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. City of Salina, Kansas Management’s Discussion and Analysis Year Ended December 31, 2022 6 The Statement of Net Position reports all of the City’s assets, deferred outflows of resources, liabilities and deferred inflows of resources. Net position, the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources, is 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 activities of the City broken down between governmental and business-type activities. Governmental activities are the activities of the City generally supported by taxes, such as public safety (police, fire, and EMS), public works, public health and sanitation, culture and recreation and planning and development. Business-type activities are activities 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 nonmajor governmental funds are aggregated into an “Other Governmental Funds” column. A combining statement for the nonmajor 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. City of Salina, Kansas Management’s Discussion and Analysis Year Ended December 31, 2022 7 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: Solid Waste Disposal, Water and Sewer, Sanitation and Golf Course. 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. The City of Salina operates one custodial fund. 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. Other Information In addition to the basic financial statements and the notes described above, this report also presents combining statements and schedules and budgetary comparison schedules for nonmajor funds which are reported after the required supplementary information. Finally, the statistical section includes selected statistical data about the City’s activities 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. City of Salina, Kansas Management’s Discussion and Analysis Year Ended December 31, 2022 8 Charges for Services account for about 41% ($42.3 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. Sales Taxes are the next largest component of the revenue mix, providing 30% ($31.7 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 was to sunset March 31, 2019. The tax was repurposed, for Capital and Economic Development purposes only, as well as retaining a property tax stabilization component. In May 2017, Salina voters approved an increase in the special purpose .40% tax to a .75% tax (thus repealing the 2008 increase). This change became effective October 1, 2017, for twenty years. Property Taxes are the third major component of the revenue mix, accounting for 13% ($13.7 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 9.5%. The total City mill levy decreased by 1.3%. The overlapping levy decreased in 2022 by 2.8%. 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 $9.5 million from its peak of $39.7 million in 2007. Motor vehicle value decreased 3%. Motor vehicle taxes are distributed based on a formula using prior year’s tax effort (similar to the Countywide Sales Tax Distribution). City of Salina, Kansas Management’s Discussion and Analysis Year Ended December 31, 2022 9 The following table summarizes the comparative property assessed values and tax levy rates: Fiscal (budget) Year 2022 2021 Change Real estate and personal property assessed valuation 503,880,021$ 459,861,906$ 44,018,115$ City mill levy ($ per $1,000) Operating (general fund)23.612 23.847 (0.235) Debt service 6.736 6.803 (0.067) Total city rate 30.348 30.452 (0.104) Total overlapping levy 135.722 139.738 (4.016) Percent total taxes collected 98.9%98.0%0.009 Ratio of total taxes (including delinquent collections) to taxes levied 99.2%99.1% (0.991) Motor vehicle valuation 54,903,252$ 56,545,812$ (1,642,560)$ The unemployment rate in Salina remained at 2.3% at the end of 2022, which was the same in 2021, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force was 29,476 in 2021. In 2022, the top ten property taxpayers accounted for 9.46% 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 $345.1 million as of December 31, 2022. This represents an increase in net position of $28.4 million over 2021. A comparative Condensed Statement of Net Position at December 31, 2022 and 2021, follows: Governmental Business-typeActivitiesActivities 2022 2021 2022 2021 2022 % of Total 2021 % of Total 2022-2021 Change Cash and investments 130,555$ 120,526$ 49,554$ $44,760 180,109$ 33% 165,286$ 32% 14,823$ Other current assets 19,086 17,262 2,476 2,235 21,562 4% 19,497 4% 2,065 Noncurrent (capital) assets 217,899 218,619 133,570 117,494 351,469 64% 336,113 65% 15,356 Total assets 367,540 356,408 185,600 164,489 553,140 100% 520,897 100% 32,244 Total deferred outflows of resources 10,245 7,444 1,219 903 11,464 100% 8,347 100% 3,117 Total assets and deferred outflows of resources 377,785 363,852 186,820 165,392 564,605 529,244 35,362 Current liabilities 17,820 17,292 6,916 5,539 24,736 12% 22,831 12% 1,905 Noncurrent liabilities 115,015 100,427 60,737 64,899 175,752 88% 165,326 88% 10,426 Total liabilities 132,835 117,719 67,653 70,438 200,488 100% 188,157 100% 12,331 Total deferred inflows of resources 18,507 22,999 488 1,424 18,996 24,423 (5,427) Net positionNet investment in capital assets 142,399 143,768 75,933 56,004 218,331 63% 199,772 63% 18,559 Restricted for permanent funds 548 559 - - 548 0%559 0%(11) Restricted for public works 65,594 66,698 - - 65,594 19% 66,698 21% (1,104) Restricted for debt service 2,196 2,112 1,347 1,132 3,543 1% 3,244 1%299 Unrestricted 15,706 9,997 41,398 36,394 57,105 17% 46,391 15% 10,714 Total net position 226,443$ 223,134$ 118,678$ 93,530$ 345,121$ 100% 316,664$ 100% 28,457$ Governmental and Business-type activities netposition as a percent of total net position 66%70%34%30%100%100% Cash and investments as a percentage of current liabilities 733%697%717%808%728%724% Total City of Salina, Kansas Management’s Discussion and Analysis Year Ended December 31, 2022 10 The largest segment of the City’s net position reflects its investment in capital assets (land, buildings, streets and drainage facilities, utility plant, vehicles, equipment, etc.), less any debt used to acquire those assets that is still outstanding. These assets are used to provide services to citizens. As a result, resources required to retire related debt cannot come from liquidation of the asset. Such resources generally must be provided from other sources, such as future taxes or user charges. A small portion of net position is restricted for debt service and permanent funds. The remainder (unrestricted) of net position may be used to meet the City’s obligations to citizens and creditors. In 2022, the amount of net investment in capital assets increased by $18.6 million. Amount restricted for debt service increased by $229,000. Amount restricted for public works decreased by $1.1 million. Unrestricted increased by $10.7 million. Outside of these changes, 2022 resulted in a $11,000 decrease to the net position. Total liabilities increased in governmental activities and slightly decreased in business-type activities. In governmental activities, current liabilities decreased, and noncurrent liabilities increased primarily due to a decrease in temporary notes and an increase in net pension liability. Statement of Activities A Comparative condensed Statement of Activities for the years ended December 31, 2022 and 2021, follows: Revenues 2022 2021 2022 2021 2022 % of Total 2021 % of Total 2022-2021 change Program RevenuesCharges for services 12,178$ 9,629$ 30,146$ 29,001$ 42,324$ 41% 38,630$ 24% 3,694$ Operating grants and contributions 3,407 4,711 - - 3,407 3% 4,711 3% (1,304) Capital grants and contributions - 66,150 - - - 0% 66,150 40% (66,150) General Revenues 0% - Property taxes 13,697 13,885 - - 13,697 13% 13,885 8% (188) Sales taxes 31,676 26,720 - - 31,676 30% 26,720 16% 4,956 Other taxes 9,452 8,759 - - 9,452 9% 8,759 5% 693 Investment revenue 487 158 - - 487 0% 158 0% 329 Other miscellaneous (427) 2,406 3,026 2,417 2,599 2% 4,823 3% (2,224) Other income 398 - - - 398 0% - 0% 398 Total revenues 70,869 132,418 33,172 31,418 104,041 100% 163,836 100% (59,795) ExpensesGeneral government 16,479 16,098 - - 16,479 18% 16,098 18% 381 Public safety 29,381 23,877 - - 29,381 32% 23,877 27% 5,504 Public works 11,141 16,335 - - 11,141 12% 16,335 18% (5,194) Public health and sanitation 1,883 2,315 - - 1,883 2% 2,315 3%(432) Culture and recreation 8,145 6,305 - - 8,145 9% 6,305 7% 1,840 Planning and development 3,415 2,289 - - 3,415 4% 2,289 3% 1,126 Solid waste disposal - - 788 1,836 788 1% 1,836 2% (1,048) Water and sewer - - 15,885 13,310 15,885 17% 13,310 15% 2,575 Sanitation - - 2,675 3,655 2,675 3% 3,655 4%(980) Golf course - - 916 878 916 1%878 1%38 Interest on long term debt 2,152 2,827 - - 2,152 2% 2,827 3%(675) Total expenses 72,596 70,046 20,264 19,679 92,860 100% 89,725 100% 3,135 Increase in net assets before transfers and other extraordinary items (1,728) 62,372 12,908 11,739 11,180 74,111 (62,931) Transfers and other extraordinary items 5,036 16,681 (5,036) (16,681) - - - Change in net position 3,309 79,053 7,872 (4,942) 11,180 74,111 (62,931) Net Position, Beginning 223,134 144,081 93,530 96,610 316,664 240,691 75,973 Prior period adjustment - - 17,276 1,862 17,276 1,862 15,414 Net position, Beginning restated 223,134 144,081 110,806 98,472 333,940 242,553 91,387 Net Position, Ending 226,443$ 223,134$ 118,678$ 93,530$ 345,120$ 316,664$ 28,456$ Governmental Activities Business-type Activities Total Primary Government City of Salina, Kansas Management’s Discussion and Analysis Year Ended December 31, 2022 11 Governmental Activities. Charges for services attributable to governmental activities totaled $12.2 million, operating grants for those purposes were $3.4 million and capital grants totaled $0.0 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. Operating grants decreased due to the American Rescue Plan payment received in 2021. Capital grants decreased 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 $31.7 million of general revenues, with property taxes providing $13.7 million. The net position increased by $3.3 million as a result of governmental activities. This increase was primarily related to the increases in sales and other taxes. Total expenses for governmental activities for the year ended December 31, 2022, were $72.6 million compared to $70 million in 2021. Governmental activities represent 78% of the City’s total expenses. The largest element of governmental activity expense was public safety, accounting for 40% 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 $20.2 million, or 22% of the City’s total expenses. The majority of this expense ($15.8 million) is attributable to water and sewer operations, with the other activities costing a combined total of $4.3 million. Net position increased by $7.8 million. This increase was primarily related to the lack of transfers and other extraordinary items in 2022. Fund Financial Analysis Governmental Fund Balances The table below shows the Governmental Fund balances for major and nonmajor funds as of December 31, 2022 and 2021. Fund 2022 2021 Change General 25,828$ 21,064$ 4,764$ Sales tax capital 8,063 9,402 (1,339) Former Schilling AFB environmental 65,594 66,698 (1,104) Debt service 2,196 2,112 84 Capital projects (deficit)(199) (922) 723 Federal grants 155 (136) 291 Other governmental funds 18,552 11,997 6,555 120,188$ 110,215$ 9,973$ City of Salina, Kansas Management’s Discussion and Analysis Year Ended December 31, 2022 12 Total governmental fund balances increased by $9.97 million. The reasons for these changes are varied, including higher sales and other tax revenue. Revenues and Expenditures The following table shows a comparison of revenues and expenditures (including other sources and uses) for major and nonmajor funds for the years ending December 31, 2022 and 2021. Fund 2022 2021 Change Revenues (including other financing sources) General 49,660$ 46,346$ 3,314$ Sales tax capital 10,435 9,639 796 Former schilling AFB environmental 210 67,959 (67,749) Debt service 6,895 12,855 (5,960) Capital projects 7,871 20,276 (12,405) Federal Grants 830 1,136 (306) Other governmental funds 19,112 9,722 9,390 Total revenues 95,013 167,933 (72,920) Less other sources (25,574) (37,405) 11,831 Revenues, net of other sources 69,439$ 130,528$ (61,089)$ Expenditures (including other financing uses) General 44,896$ 40,424$ 4,472$ Sales tax capital 11,775 5,447 6,328 Former schilling AFB environmental 1,314 1,956 (642) Debt service 6,810 12,467 (5,657) Capital projects 7,149 17,169 (10,020) Federal Grants 540 1,224 - Other governmental funds 12,556 10,315 2,241 Total expenditures 85,039 89,002 (3,278) Less other uses (12,777) (6,399) (6,378) Expenditures, net of other uses 72,263$ 82,603$ (9,656)$ City of Salina, Kansas Management’s Discussion and Analysis Year Ended December 31, 2022 13 Total revenues, including other sources, decreased $61 million compared to 2021, with Former Schilling AFB Environmental Fund showing the largest decrease between the two years, which was $68 million. Total expenditures decreased $9.7 million over 2021. The majority of that decrease, $10 million was in the Capital Projects Fund as a result of decreased spending on projects. Proprietary Funds The City of Salina operates four enterprise funds as well as three internal service funds. Summarized comparative Statements of Net Position follows for each enterprise fund as of December 31, 2022 and 2021: 2022 2021 Change 2022 2021 Change Current assets 9,970$ 9,164$ 806$ 40,087$ 36,210$ 3,877$ Capital assets 3,072 3,206 (134) 129,134 112,719 16,415.00 Deferred outflows 156 115 41 768 569 199.00 Total assets and deferred outflows 13,199$ 12,485$ 714$ 169,989$ 149,498$ 20,491$ Current liabilities 358$ 2,306$ (1,948)$ 6,451$ 3,134$ 3,317$ Noncurrent liabilities 4,470 4,360 110 55,295 59,760 (4,465.00) Deferred inflows 53 153 (100) 316 921 (605.00) Total liabilities 4,880$ 6,819$ (1,939)$ 62,062$ 63,815$ (1,753.00) Net investment in capital assets 3,072$ 1,185$ 1,887$ 71,497$ 53,250$ 18,247$ Restricted - - - 1,347 1,132 215 Unrestricted 5,247 4,482 765 35,083 31,301 3,782.00 Total net position 8,319$ 5,667$ 2,652$ 107,927$ 85,683$ 22,244$ Current assets as percentage of current liabilities 2789% 397%621% 1155% Solid Waste Disposal Water and Sewer 2022 2021 Change 2022 2021 Change Current assets 1,874$ 1,508$ 366$ 99$ 112$ (13)$ Capital assets 976 1,135 (159.00) 388 433 (45.00) Deferred outflows 170 127 43.00 125 91 34.00 Total assets and deferred outflows 3,020$ 2,770$ 250$ 612$ 636$ (24)$ Current liabilities 82$ 82$ -$ 25$ 17$ 8$ Noncurrent liabilities 683 562 121.00 290 216 74.00 Deferred inflows 91 264 (173.00) 28 86 (58.00) Total liabilities 856$ 908$ (52)$ 343$ 319$ 24$ Net investment in capital assets 976$ 1,135$ (159)$ 388$ 433$ (45)$ Restricted - - - - - - Unrestricted 1,187 727 460 (119) (116) (3) Total net position 2,163$ 1,862$ 301$ 269$ 317$ (48)$ Current assets as percentage of current liabilities 2288% 1839%393% 659% Sanitation Golf Course City of Salina, Kansas Management’s Discussion and Analysis Year Ended December 31, 2022 14 Revenues, Expenses, and Changes in Net Position Summarized comparative Statements of Revenues, Expenses and Changes in Net Position follows for the years ended December 31, 2022 and 2021: 2022 2021 Change 2022 2021 Change Operating revenues 4,099$ 3,636$ 463$ 24,742$ 23,668$ 1,074$ Operating expenses 774 1,746 (972) 14,595 12,078 2,517 Operating income 3,326$ 1,890$ 1,436$ 10,147$ 11,590$ (1,443)$ Nonoperating revenues (expenses)(14) (90) 76 (1,290) (1,232) (58) Income (loss) before transfers 3,312$ 1,800$ 1,512$ 8,857$ 10,358$ (1,501)$ Transfers in (out)(659) (2,271) 1,612 (3,890) (13,913) 10,023 Change in net position 2,652$ (471)$ 3,123$ 4,967$ (3,555)$ 8,522$ Net position Jan 1 5,666$ 6,137$ (471)$ 85,682$ 87,375$ (1,693)$ Restatement - - - 17,276 1,862 15,414 Net position Jan 1, restated 5,666 6,137 (471) 102,958 89,237 13,721 Net position Dec 31 8,318$ 5,666$ 2,652$ 107,925$ 85,682$ 22,243$ 2022 2021 Change 2022 2021 Change Operating revenues 3,474$ 3,423$ 51$ 857$ 689$ 168$ Operating expenses 2,675 3,655 (980) 916 878 38 Operating income 799$ (232)$ 1,031$ (58)$ (189)$ 131$ Nonoperating revenue (expenses)- - - - - - Income (loss) before transfers 799$ (232)$ 1,031$ (58)$ (189)$ 131$ Transfers in (out)(497) (497) - 10 - 10 Change in net position 301$ (729)$ 1,031$ (48)$ (189)$ 141$ Net position Jan 1 1,862$ 2,591$ (729)$ 317$ 506$ (189)$ Restatement - - - - - - Net position Jan 1, restated 1,862 2,591 (729) 317 506 (189) Net position Dec 31 2,163$ 1,862$ 302$ 269$ 317$ (48)$ Solid Waste Disposal Water and Sewer Sanitation Golf Course All enterprise funds continue to show healthy net position: City of Salina, Kansas Management’s Discussion and Analysis Year Ended December 31, 2022 15 Budgetary Highlights The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the fund level, in accordance with State Statutes. Management control is maintained at the departmental level. Within the departments, considerable discretion is permitted. The City uses an encumbrance accounting system, in which estimated purchase orders are recorded prior to the release of purchase orders to vendors. Open purchase orders are reported as reservations of budgetary basis fund balances as of December 31, 2022. Formal budgetary amendments are limited to those circumstances in which the need is perceived to alter the total fund budget. Reallocation 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, 2022, was $351.5 million, net of accumulated depreciation and amortization. The following table illustrates the Capital Asset balances by various classes of assets as of December 31, 2022 and 2021: 2022 2021 2022 2021 2022 2021 Equipment, furniture and fixtures 2,107$ 2,378$ 663$ 902$ 2,769$ 3,280$ Vehicles 2,686 2,315 676 885 3,361 3,200 Buildings and improvements 26,568 27,905 7,540 7,964 34,108 35,869 Land 24,647 24,647 2,386 2,386 27,034 27,033 Infrastructure 137,662 140,690 82,592 83,646 220,254 224,336 Leasehold improvements 357 357 - - 357 357 Construction in progress 23,872 20,327 39,713 38,987 63,585 59,314 Total 217,899$ 218,619$ 133,570$ 134,770$ 351,470$ 353,389$ Governmental Activity Business-type Activity Total City of Salina, Kansas Management’s Discussion and Analysis Year Ended December 31, 2022 16 Changes to capital assets may be summarized as follows: Governmental Business-type Total Additions 6,176$ 2,876$ 9,052$ Retirements (38) (25) (63) Depreciation and amortization (6,858) (4,050) (10,908) Net reductions (721)$ (1,199)$ (1,920)$ Additional information on the City’s capital assets can be found in Note 5. 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 20 years for the City at Large portion, with some exceptions permitted for extraordinary projects. On special assessment bonds, the maturity may extend to 20 years. The outstanding general obligation bonds for governmental activities as of December 31, 2022, totaled $65,181,972. There were no temporary notes outstanding. Loans payable outstanding in the amount of $12,240,905 related to SFH QalicB, a blended component unit of the City. Business-type activities had $8,696,478 in revenue bonds outstanding and $6,911,392 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 $43,798,557. The City engaged in the following debt transactions during 2022: On April 28th, the City issued Series 2022-A, General Obligation Bonds in the amount of $7,840,000 The proceeds were used to finance construction of a 9th Street Bridge, purchase Sanitation Trucks, replace HVAC units at Tony’s Pizza Event Center, Design for the Smoky Hill River Renewal Project, Magnolia Hills Estates No. 2, Stone Lake Phase 3A and the Markley Trail. Additional information on the City’s debt can be found in Note 6, of the notes to the basic financial statements. Requests for Information This financial report is intended to give the reader a general overview of the City’s finances. Questions about information in this report or requests for additional information should be directed to the Director of Finance, Room 206, 300 West Ash Street, Salina, Kansas, 67401. City of Salina, Kansas Statement of Net Position December 31, 2022 See Notes to Financial Statements 17 Total Total Total Salina Salina Governmental Business-type Primary Airport Housing Activities Activities Government Authority Authority Assets Current Assets Cash and investments 130,555,268$ 49,554,201$ 180,109,469$ 3,588,407$ 2,538,529$ Receivables, net of allowance 594,360 103,972 Accounts 2,367,679 1,861,273 4,228,952 - - Taxes 16,445,959 - 16,445,959 - - Interest 5,141 16 5,157 - - Leases - - - 682,175 - Interest - leases - - - 7,997 - Inventory 267,481 614,535 882,016 - 38,377 Restricted cash and investments - - - - 141,863 Prepaid expenses - - - 18,746 113,271 Total current assets 149,641,528 52,030,025 201,671,553 4,891,685 2,936,012 Noncurrent AssetsCapital assets, nondepreciableConstruction in progress 23,872,057 39,713,436 63,585,493 475,414 136,350 Land 24,646,334 2,386,334 27,032,668 9,920,765 1,481,569 Capital assets, depreciable 314,964,834 174,223,545 489,188,379 91,420,736 8,808,594 Less: Accumulated depreciation 145,584,691 82,753,216 228,337,907 53,453,721 5,863,078 Leases receivable - - - 3,009,970 - Total noncurrent assets 217,898,534 133,570,099 351,468,633 51,373,164 4,563,435 Total assets 367,540,062 185,600,124 553,140,186 56,264,849 7,499,447 Deferred outflows of resources KPERS OPEB deferred outflows of resources 28,517 14,165 42,682 5,788 276 OPEB deferred outflows of resources 381,683 61,958 443,641 - - Pension deferred outflows of resources 9,834,696 1,143,349 10,978,045 381,567 157,304 Deferred charge on bond issuance - - - 760,424 - Total deferred outflows of resources 10,244,896 1,219,472 11,464,368 1,147,779 157,580 Primary Government Component Units City of Salina, Kansas Statement of Net Position (Continued) December 31, 2022 See Notes to Financial Statements 18 Total Total Total Salina Salina Governmental Business-type Primary Airport Housing Activities Activities Government Authority Authority Liabilities Current LiabilitiesAccounts payable 2,136,638 429,041 2,565,679 697,635 35,784 Retainage payable 591,981 - 591,981 - - Accrued liabilities 1,336,906 166,528 1,503,434 222,096 33,655 Accrued interest payable 503,495 502,089 1,005,584 194,893 - Deposits payable - 282,499 282,499 - 70,913 Unearned revenue 6,659,339 - 6,659,339 - 16,497 Current portion of compensated absences 723,032 160,616 883,648 58,021 2,677 Current portion of temporary notes payable - - - - - Current portion of loans payable - 3,628,170 3,628,170 42,157 - Current portion of leases payable 148,302 - 148,302 - - Current portion of revenue bonds payable - 795,000 795,000 - - Current portion of general obligation bonds payable 5,720,000 952,000 6,672,000 8,355,000 - Total current liabilities 17,819,693 6,915,943 24,735,636 9,569,802 159,526 Noncurrent LiabilitiesAccrued liabilities - - - - - Compensated absences 918,446 199,640 1,118,086 - 24,098 Security deposits returnable - - - 128,146 - OPEB obligation 3,419,949 556,290 3,976,239 - - KPERS OPEB obligation 257,078 127,697 384,775 9,003 - Net pension liability 38,216,024 3,449,776 41,665,800 942,015 396,633 Loans payable 12,240,905 40,170,387 52,411,292 337,101 - Leases payable 500,729 - 500,729 - - Revenue bonds payable - 7,901,478 7,901,478 - - General obligation bonds payable 59,461,972 5,959,392 65,421,364 16,195,730 - Landfill postclosure care liabilities - 2,372,698 2,372,698 - - Total other liabilities 115,015,103 60,737,358 175,752,461 17,611,995 420,731 Total liabilities 132,834,796 67,653,301 200,488,097 27,181,797 580,257 Deferred inflows of resourcesProperty taxes 15,815,648 - 15,815,648 - - KPERS OPEB deferred inflows of resources 215,265 106,930 322,195 17,499 6,775 Deferred leases - - - 3,580,083 - OPEB deferred inflows of resources 608,904 98,839 707,743 - - Pension deferred inflows of resources 1,867,399 282,587 2,149,986 24,205 123,444 Total deferred inflows of resources 18,507,216 488,356 18,995,572 3,621,787 130,219 Total liabilities and deferred inflows of resources 151,342,012 68,141,657 219,483,669 30,803,584 710,476 Net Position Net investment in capital assets 142,398,543 75,932,904 218,331,447 24,694,502 4,563,435 Restricted for:Permanent funds: Expendable 548,172 - 548,172 - 154 Public works 65,593,823 - 65,593,823 - - Debt service 2,196,006 1,346,625 3,542,631 - - Unrestricted 15,706,402 41,398,410 57,104,812 1,914,542 2,382,962 Total net position 226,442,946$ 118,677,939$ 345,120,885$ 26,609,044$ 6,946,551$ Primary Government Component Units City of Salina, Kansas Statement of Activities For the Year Ended December 31, 2022 See Notes to Financial Statements 19 Operating Capital Total Total Salina Salina Charges for Grants and Grants and Governmental Business-type Airport Housing Expenses Services Contributions Contributions Activities Activities Total Authority Authority Governmental activities General government 16,479,381$ 5,516,275$ 259,238$ -$ (10,703,868)$ -$ (10,703,868)$ -$ -$ Public safety 29,380,775 4,926,340 1,157,629 - (23,296,806) - (23,296,806) - - Public works 11,141,122 407,541 1,405,999 - (9,327,582) - (9,327,582) - - Public health and sanitation 1,882,876 60,167 277,304 - (1,545,405) - (1,545,405) - - Culture and recreation 8,145,408 967,945 289,816 - (6,887,647) - (6,887,647) - - Planning and development 3,415,263 299,885 16,675 - (3,098,703) - (3,098,703) - - Interest on long-term debt 2,151,604 - - - (2,151,604) - (2,151,604) - - Total governmental activities 72,596,429 12,178,153 3,406,661 - (57,011,615) - (57,011,615) - - Business-type activities Solid Waste Disposal 787,730 4,047,428 - - - 3,259,698 3,259,698 - - Water and Sewer 15,885,026 21,839,834 - - - 5,954,808 5,954,808 - - Sanitation 2,675,420 3,474,084 - - - 798,664 798,664 - - Golf Course 915,796 784,528 - - - (131,268) (131,268) - - Total business-type activities 20,263,972 30,145,874 - - - 9,881,902 9,881,902 - - Total primary government 92,860,401 42,324,027 3,406,661 - (57,011,615) 9,881,902 (47,129,713) - - Component units Salina Airport Authority 7,317,904 3,118,576 - 5,292,019 - - - 1,092,691 - Salina Housing Authority 2,748,717 382,976 2,166,414 155,468 - - - - (43,859) Total component units 10,066,621 3,501,552 2,166,414 5,447,487 - - - 1,092,691 (43,859) General RevenuesProperty taxes levied forGeneral purposes 10,705,736 - 10,705,736 2,431,667 - Debt service 2,991,642 - 2,991,642 - - Motor vehicle tax General purposes 2,013,660 - 2,013,660 - - Sales tax General purposes 16,697,633 - 16,697,633 - - Selective purposes 14,978,617 - 14,978,617 - - Other taxes General purposes 7,438,260 - 7,438,260 - - Investment revenues 486,951 - 486,951 8,383 4,209 Interest income - leases - - - 105,299 - Miscellaneous (425,781) 3,027,257 2,601,476 - - Gain on disposal of capital assets 398,199 - 398,199 60,778 12,181 Bond issuance costs - - - (11,640) - Transfers, net 5,036,300 (5,036,300) - - - Total general revenues 60,321,217 (2,009,043) 58,312,174 2,594,487 16,390 Change in net position 3,309,602 7,872,859 11,182,461 3,687,178 (27,469) Net position - beginning, as previously reported 223,133,344 93,529,507 316,662,851 22,921,866 6,974,020 Prior period adjustment - 17,275,573 17,275,573 - - Net position - beginning, restated 223,133,344 110,805,080 333,938,424 22,921,866 6,974,020 Net position - ending 226,442,946$ 118,677,939$ 345,120,885$ 26,609,044$ 6,946,551$ Program Revenues Primary Government Component Units Changes in Net Position Net (Expenses) Revenue and City of Salina, Kansas Balance Sheet - Governmental Funds December 31, 2022 See Notes to Financial Statements Former Sales Tax Schilling AFB Debt Capital General Capital Environmental Service Projects Assets Cash and investments 24,903,235$ 8,337,703$ 65,823,996$ 2,136,972$ 766,972$ Restricted cash - - - - - Receivables, net of allowance Accounts 1,274,119 - - - - Taxes 13,163,521 - - 3,282,438 - Interest 5,141 - - - - Inventory 156,576 - - - - Due from other funds - - - - - Total assets 39,502,592$ 8,337,703$ 65,823,996$ 5,419,410$ 766,972$ Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities Accounts payable 214,397 274,748 230,173 - 374,488 Retainage payable - - - - 591,981 Accrued expenditures 867,943 - - - - Unearned revenue - - - - - Temporary notes payable - - - - - Due to other funds - - - - - Total liabilities 1,082,340 274,748 230,173 - 966,469 Deferred inflows of resources Unavailable revenue - property taxes 12,437,245 - - 3,223,404 - Unavailable revenue - other 154,999 - - - - Total deferred inflows of resources 12,592,244 - - 3,223,404 - Fund Balance Nonspendable 156,576 - - - - Restricted - - 61,424,146 2,196,006 - Committed - 7,625,529 - - - Assigned 357,738 437,426 4,169,677 - 2,748,819 Unassigned 25,313,694 - - - (2,948,316) Total fund balances 25,828,008 8,062,955 65,593,823 2,196,006 (199,497) Total liabilities, deferred inflows of resources and fund balances 39,502,592$ 8,337,703$ 65,823,996$ 5,419,410$ 766,972$ 20 Other Total Federal Governmental Governmental Grants Funds Funds 6,876,481$ 16,437,513$ 125,282,872$ - - - - 3,069,338 4,343,457 - - 16,445,959 - - 5,141 - - 156,576 - - - 6,876,481$ 19,506,851 146,234,005 62,444 919,900 2,076,150 - - 591,981 - 14,559 882,502 6,659,339 - 6,659,339 - - - - 20,000 20,000 6,721,783 954,459 10,229,972 - - 15,660,649 - - 154,999 - - 15,815,648 - - 156,576 - 3,937,773 67,557,925 12,448,183 20,073,712 - 2,166,424 9,880,084 154,698 12 22,520,088 154,698 18,552,392 120,188,385 6,876,481$ 19,506,851$ 146,234,005$ City of Salina, Kansas Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position December 31, 2022 See Notes to Financial Statements 21 Total Governmental Fund Balances 120,188,385$ 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 Cost of capital assets 363,483,225$ Accumulated depreciation 145,584,691 217,898,534 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.10,244,896 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.(2,691,568) Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit.(1,816,406) 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.4,729,037 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 1,641,478 Net OPEB obligation 3,677,027 Net pension liability 38,216,024 Bonds payable 65,181,972 Loans payable 12,240,905 Leases payable 649,031 Accrued interest on the bonds 503,495 (122,109,932) Net Position of Governmental Activities 226,442,946$ City of Salina, Kansas Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2022 See Notes to Financial Statements Former Sales Tax Schilling AFB Debt Capital General Capital Environmental Service Projects Revenues Taxes Real estate taxes 10,554,177$ -$ -$ 2,991,642$ -$ Delinquent taxes 117,647 - - 33,912 - Motor vehicle taxes 1,652,539 - - 361,121 - General sales taxes 16,697,633 - - - - Selective sales taxes - 10,435,229 - - - Other taxes 6,028,427 - - - - Intergovernmental 1,184,485 - - - 30,000 Special assessments - - - 1,409,833 - Licenses and permits - - - - - Charges for services 6,580,579 - - - - Investment revenue 206,496 - 209,872 - - Donations - - - - - Miscellaneous 832,136 - - 172,199 - Total revenues 43,854,119$ 10,435,229$ 209,872$ 4,968,707$ 30,000$ Expenditures Current General government 6,783,483$ -$ -$ -$ -$ Public safety 24,824,641 - - - - Public works 5,846,877 - - - - Public health and sanitation 800,884 - - - - Culture and recreation 4,025,077 - - - - Planning and development 702,721 - - - - Miscellaneous - - - - - Capital outlay 372,260 1,440,852 1,313,816 - 3,418,056 Debt service Principal retirement - - - 5,005,734 3,609,999 Interest and other charges - - - 1,804,561 121,137 Total expenditures 43,355,943 1,440,852 1,313,816 6,810,295 7,149,192 Excess (deficiency) of revenue over (under) expenditures 498,176 8,994,377 (1,103,944) (1,841,588) (7,119,192) Other Financing Sources (Uses) Issuance of bonds - - - - 7,840,000 Bond and temporary note premium - - - - 1,200 Transfers in 5,806,300 - - 1,925,930 - Transfers (out)(1,540,000) (10,333,850) - - - Total other financing sources (uses)4,266,300 (10,333,850) - 1,925,930 7,841,200 Net change in fund balances 4,764,476 (1,339,473) (1,103,944) 84,342 722,008 Fund balances (Deficit) - Beginning of year 21,063,532 9,402,428 66,697,767 2,111,664 (921,505) Fund balances (Deficit) - End of year 25,828,008$ 8,062,955$ 65,593,823$ 2,196,006$ (199,497)$ 22 Other Total Federal Governmental Governmental Grants Funds Funds -$ -$ 13,545,819$ - - 151,559 - - 2,013,660 - - 16,697,633 - 4,543,388 14,978,617 - - 6,028,427 830,155 2,740,030 4,784,670 - - 1,409,833 - 14,600 14,600 - 966,786 7,547,365 - 44,360 460,728 - 104,558 104,558 - 697,126 1,701,461 830,155$ 9,110,848 69,438,930 -$ -$ 6,783,483$ - 697,328 25,521,969 - - 5,846,877 539,516 313,223 1,653,623 - 2,273,867 6,298,944 - 2,047,963 2,750,684 - 36,188 36,188 - 6,084,394 12,629,378 - - 8,615,733 - 200,129 2,125,827 539,516 11,653,092 72,262,706 290,639 (2,542,244) (2,823,776) - - 7,840,000 - - 1,200 - 10,000,711 17,732,941 - (902,791) (12,776,641) - 9,097,920 12,797,500 290,639 6,555,676 9,973,724 (135,941) 11,996,716 110,214,661 154,698$ 18,552,392$ 120,188,385$ City of Salina, Kansas Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of the Governmental Funds to the Statement of Activities For the Year Ended December 31, 2022 See Notes to Financial Statements 23 Total Net Change In Fund Balances - Governmental Funds 9,973,724$ 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 and amortization expenses in the statement of activities. This is the amount by which depreciation and amortization expense exceeds capital outlays in the period. Capital outlays 5,488,675$ Depreciation and amortization expense (6,858,231) (1,369,556) 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.(25,777) 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.220,426 Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit.(303,774) Some expenses reported in the statement of activities, such as compensated absences and other postemployment benefits, are reported as paid in the governmental funds 1,213,790 Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities.(3,806,741) Other changes 280,165 Bond, temporary note, and loan proceeds and leases are other financing sources in the governmental funds, but they increase long-term liabilities in the statement of net position and do not affect the statement of activities. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. (7,841,200) 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. 4,968,545 Change in Net Position of Governmental Activities 3,309,602$ City of Salina, Kansas Budget Comparison Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Non - GAAP Basis) General Fund For the Year Ended December 31, 2022 See Notes to Financial Statements 24 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Taxes Real estate taxes 10,681,513$ 10,681,513$ 10,554,177$ (127,336)$ Delinquent taxes 172,000 172,000 117,647 (54,353) Motor vehicle taxes 1,256,306 1,256,306 1,652,539 396,233 General sales tax 13,418,742 13,418,742 16,697,633 3,278,891 Other taxes 5,242,000 5,242,000 6,028,427 786,427 Intergovernmental 1,169,000 1,169,000 1,184,485 15,485 Charges for services 5,703,860 5,703,860 6,580,579 876,719 Investment revenue 300,000 300,000 206,496 (93,504) Miscellaneous 368,560 368,560 832,136 463,576 Total revenues 38,311,981 38,311,981 43,854,119 5,542,138 Expenditures Current General government 6,322,722 6,322,722 6,783,483 (460,761) Public safety 22,755,735 22,755,735 24,824,641 (2,068,906) Public works 4,682,841 4,682,841 5,846,877 (1,164,036) Public health and sanitation - - 800,884 (800,884) Culture and recreation 6,542,559 6,542,559 4,025,077 2,517,482 Planning and development 2,840,206 2,840,206 702,721 2,137,485 Capital outlay 240,000 240,000 372,260 (132,260) Total expenditures 43,384,063 43,384,063 43,355,943 28,120 Excess (deficiency) of revenues over (under) expenditures (5,072,082) (5,072,082) 498,176 5,570,258 Other Financing Sources (Uses) Transfers in 5,806,300 5,806,300 5,806,300 - Transfers (out)(1,655,500) (1,655,500) (1,540,000) 115,500 Total other financing sources (uses)4,150,800 4,150,800 4,266,300 115,500 Net Change in Fund Balance (921,282) (921,282) 4,764,476 5,685,758 Fund Balance, Beginning 21,063,532 21,063,532 19,785,424 (1,278,108) Fund Balance, Ending 20,142,250$ 20,142,250$ 24,549,900$ 4,407,650$ Reconcilation to GAAP Accounts receivable 1,304,865 Taxes receivable 13,121,855 Inventory 156,576 Accrued wages (867,943) Deferred revenue (12,437,245) GAAP Fund Balance, December 31 25,828,008$ City of Salina, Kansas Budget Comparison 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, 2022 See Notes to Financial Statements 25 Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Taxes Selective sales tax 9,020,000$ 9,020,000$ 10,435,229$ 1,415,229$ Total revenues 9,020,000 9,020,000 10,435,229 1,415,229 Expenditures Capital outlay 1,080,000 1,080,000 1,018,926 61,074 Total expenditures 1,080,000 1,080,000 1,018,926 61,074 Excess (deficiency) of revenues over (under) expenditures 7,940,000 7,940,000 9,416,303 1,476,303 Other Financing Sources (Uses) Transfers (out)(10,333,850) (10,333,850) (10,333,850) - Total other financing sources (uses) (10,333,850) (10,333,850) (10,333,850) - Net Change in Fund Balance (2,393,850) (2,393,850) (917,547) 1,476,303 Fund Balance, Beginning 9,402,428 9,402,428 9,402,428 - Fund Balance, Ending 7,008,578$ 7,008,578$ 8,484,881$ 1,476,303$ Reconcilation to GAAP Current year encumbrances (421,926) GAAP Net Change in Fund Balance (1,339,473)$ City of Salina, Kansas Statement of Net Position Proprietary Funds December 31, 2022 See Notes to Financial Statements 26 Solid Water Total Internal Waste and Enterprise Service Disposal Sewer Sanitation Golf Course Funds FundsAssetsCurrent assets: Cash and investments 9,598,676$ 38,259,558$ 1,624,957$ 71,010$ 49,554,201$ 5,272,396$ Receivables, net of allowance Accounts 371,737 1,240,895 248,641 - 1,861,273 - Interest 16 - - - 16 - Inventory and prepaid supplies - 586,413 - 28,122 614,535 110,905 Total current assets 9,970,429 40,086,866 1,873,598 99,132 52,030,025 5,383,301 Capital assets: Nondepreciable capital assets: Construction in progress 265 39,713,171 - - 39,713,436 - Land 682,000 1,689,334 - 15,000 2,386,334 - Depreciable capital assets: Capital assets 13,304,495 156,759,503 2,848,648 1,310,899 174,223,545 168,234 Less: accumulated depreciation 10,914,668 69,028,270 1,872,464 937,814 82,753,216 154,325 Total capital assets 3,072,092 129,133,738 976,184 388,085 133,570,099 13,909 Total assets 13,042,521 169,220,604 2,849,782 487,217 185,600,124 5,397,210 Deferred outflows of resources: KPERS OPEB deferred outflows of resources 1,437 9,203 2,648 877 14,165 729 OPEB deferred outflows of resources 7,137 40,318 12,021 2,482 61,958 - Pension deferred outflows of resources 147,644 718,854 155,399 121,452 1,143,349 50,723 Total deferred outflows of resources 156,218 768,375 170,068 124,811 1,219,472 51,452 City of Salina, Kansas Statement of Net Position (Continued) Proprietary Funds December 31, 2022 See Notes to Financial Statements 27 Solid Water Total Internal Waste and Enterprise Service Disposal Sewer Sanitation Golf Course Funds FundsLiabilities Current liabilities: Accounts payable 61,093$ 356,305$ 7,860$ 3,783$ 429,041$ 60,488$ Interest payable 32,805 469,284 - - 502,089 - Accrued expenses 17,694 103,891 32,411 12,532 166,528 32,460 Meter deposits payable - 282,499 - - 282,499 - Temporary notes payable - - - - - - Current portion of compensated absences payable 11,916 98,150 41,609 8,941 160,616 7,407 Current portion of accrued claims payable - - - - - 421,944 Current portion of loans payable - 3,628,170 - - 3,628,170 - Current portion of general obligation bonds payable 234,000 718,000 - - 952,000 - Current portion of revenue bonds payable - 795,000 - - 795,000 - Total current liabilities 357,508 6,451,299 81,880 25,256 6,915,943 522,299 Noncurrent liabilities: Compensated absences payable 14,811 121,997 51,719 11,113 199,640 9,206 Accrued claims payable - - - - - - OPEB obligation 64,945 361,358 107,739 22,248 556,290 - KPERS OPEB obligation 12,953 82,966 23,872 7,906 127,697 6,574 Net pension liability 468,918 2,232,312 499,782 248,764 3,449,776 161,523 Payable from restricted assets Loans payable - 40,170,387 - - 40,170,387 - General obligation bonds payable 1,535,232 4,424,160 - - 5,959,392 - Revenue bonds payable - 7,901,478 - - 7,901,478 - Landfill postclosure care liabilities 2,372,698 - - - 2,372,698 - Total noncurrent liabilities 4,469,557 55,294,658 683,112 290,031 60,737,358 177,303 Total liabilities 4,827,065 61,745,957 764,992 315,287 67,653,301 699,602 Deferred inflows of resources KPERS OPEB deferred inflows of resources 10,848 69,472 19,990 6,620 106,930 5,505 OPEB deferred inflows of resources 11,385 64,318 19,176 3,960 98,839 - Pension deferred inflows of resources 30,305 182,704 52,303 17,275 282,587 14,518 Total deferred inflows of resources 52,538 316,494 91,469 27,855 488,356 20,023 Total liabilities and deferred inflows of resources 4,879,603 62,062,451 856,461 343,142 68,141,657 719,625 Net Position Net investment in capital assets 3,072,092 71,496,543 976,184 388,085 75,932,904 13,909 Restricted Restricted for bond retirement - 1,346,625 - - 1,346,625 - Unrestricted (deficit)5,247,044 35,083,360 1,187,205 (119,199) 41,398,410 4,715,128 Total net position 8,319,136$ 107,926,528$ 2,163,389$ 268,886$ 118,677,939$ 4,729,037$ City of Salina, Kansas Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds For the Year Ended December 31, 2022 See Notes to Financial Statements 28 Solid Waste Water and Internal Disposal Sewer Sanitation Golf Course Total Service Fund Operating Revenues Charges for services 4,047,428$ 21,839,834$ 3,474,084$ 784,528$ 30,145,874$ 8,022,849$ Miscellaneous 51,972 2,902,407 30 72,848 3,027,257 26,223 Total operating revenues 4,099,400 24,742,241 3,474,114 857,376 33,173,131 8,049,072 Operating Expenses General government - - - - - 7,908,646 Public works 639,495 10,883,710 2,516,563 - 14,039,768 - Recreation - - - 870,812 870,812 - Depreciation 134,242 3,711,786 158,857 44,984 4,049,869 - Total operating expenses 773,737 14,595,496 2,675,420 915,796 18,960,449 7,908,646 Operating income (loss)3,325,663 10,146,745 798,694 (58,420) 14,212,682 140,426 Nonoperating Revenues (Expenses) Interest expense (38,071) (1,370,866)- - (1,408,937) - Accretion of bond premium 24,078 81,336 - - 105,414 - Total nonoperating revenues (expenses)(13,993) (1,289,530) - - (1,303,523) - Income (loss) before transfers 3,311,670 8,857,215 798,694 (58,420) 12,909,159 140,426 Transfers in 42,500 5,178,672 - 10,000 5,231,172 80,000 Transfers out (701,700) (9,068,422) (497,350)- (10,267,472) - Change in net position 2,652,470 4,967,465 301,344 (48,420) 7,872,859 220,426 Net Position, Beginning, as previously reported 5,666,666 85,683,490 1,862,045 317,306 93,529,507 4,508,611 Prior period adjustment - 17,275,573 - - 17,275,573 - Net Position, Beginning, restated 5,666,666 102,959,063 1,862,045 317,306 110,805,080 4,508,611 Net Position, Ending 8,319,136$ 107,926,528$ 2,163,389$ 268,886$ 118,677,939$ 4,729,037$ City of Salina, Kansas Statement of Cash Flows Proprietary Funds For the Year Ended December 31, 2022 See Notes to Financial Statements 29 Solid Waste Water and Internal Disposal Sewer Sanitation Golf Course Total Service Fund Cash Flows from Operating Activities Cash received from customers and users 3,915,233$ 21,950,239$ 3,462,226$ 784,528$ 30,112,226$ 8,022,849$ Cash paid to suppliers of goods or services (193,815) (7,198,055) (1,523,673) (438,587) (9,354,130) (8,273,155) Cash paid to employees (560,062) (3,834,187) (1,087,893) (449,528) (5,931,670) 14,496 Other operating receipts 51,972 2,762,840 30 72,848 2,887,690 26,223 Net cash provided by (used in) operating activities 3,213,328 13,680,837 850,690 (30,739) 17,714,116 (209,587) Cash Flows from Capital and Related Financing Activities Acquisition and construction of capital assets - (2,850,764) - - (2,850,764) - Proceeds from loans - 2,035,480 - - 2,035,480 - Principal payments - loans (1,839,714) (1,975,289) - - (3,815,003) - Principal payments - general obligation bonds - (1,035,351) - - (1,035,351) - Principal payments - revenue bonds - (775,000) - - (775,000) - Interest paid (40,274) (1,402,384) - - (1,442,658) - Net cash used in capital and related financing activities (1,879,988) (6,003,308) - - (7,883,296) - Cash Flows from Noncapital and Related Financing ActivitiesTransfers in 42,500 5,178,672 - 10,000 5,231,172 80,000 Transfers out (701,700) (9,068,422) (497,350) - (10,267,472) - Net cash provided by (used in) noncapital financing activities (659,200) (3,889,750) (497,350) 10,000 (5,036,300) 80,000 Cash and Cash Equivalents, Beginning of Year 8,924,536 34,471,779 1,271,617 91,749 44,759,681 5,401,983 Cash and Cash Equivalents, End of Year 9,598,676$ 38,259,558$ 1,624,957$ 71,010$ 49,554,201$ 5,272,396$ Reconciliation of Operating Income (Loss) to Net Cash Provided by (used in) Operating Activities Operating income (loss)3,325,663$ 10,146,745$ 798,694$ (58,420)$ 14,212,682$ 140,426$ Adjustment to reconcile operating income (loss) to net cashprovided by (used in) operating activities: Depreciation expense 134,242 3,711,786 158,857 44,984 4,049,869 - (Increase) decrease in receivables (132,195) 110,405 (11,858) - (33,648) - (Increase) decrease in inventory - (199,446) - (7,943) (207,389) 25,470 (Increase) decrease in deferred outflows (41,190) (199,127) (42,958) (33,544) (316,819) (13,376) Increase (decrease) in accounts payable (125,276) 192,942 1,096 3,358 72,120 (19,467) Increase (decrease) in accrued expenses 17,694 103,891 32,411 12,532 166,528 Increase (decrease) in accrued compensation absences (21,624) (178,116) (75,510) (16,226) (291,476) (176,439) Increase (decrease) in claims payable - (139,567) - - (139,567) (169,062) Increase (decrease) in net pension liability 161,453 768,607 172,079 85,652 1,187,791 55,614 Increase (decrease) in net KPERS OPEB obligation (3,763) (24,100) (6,935) (2,296) (37,094) (1,910) Increase (decrease) in net OPEB obligation (1,567) (8,719) (2,600) (537) (13,423) - Increase (decrease) in meter deposits payable - - - - - - Increase (decrease) in deferred inflows (100,109) (604,464) (172,586) (58,299) (935,458) (50,843) Total adjustments (112,335) 3,534,092 51,996 27,681 3,501,434 (350,013) Net cash provided by (used in) operating activities 3,213,328$ 13,680,837$ 850,690$ (30,739)$ 17,714,116$ (209,587)$ City of Salina, Kansas Statement of Fiduciary Net Position Fiduciary Funds December 31, 2022 See Notes to Financial Statements 30 Custodial Fund Assets Cash and investments 6,059$ Total assets 6,059 Liabilities and Net Position Liabilities Accounts payable - Total liabilities - Net Position Restricted for individuals, organizations, and other governments 6,059 Total net position 6,059$ City of Salina, Kansas Statement of Changes in Fiduciary Net Position Fiduciary Funds December 31, 2022 See Notes to Financial Statements 31 Custodial Funds Additions Miscellaneous 25,964$ Total additions 25,964 Deductions Contractual services 19,906 Total deductions 19,906 Change in Net Position 6,058 Net Position, Beginning of Year 1 Net Position, End of Year 6,059$ City of Salina, Kansas Notes to Financial Statements December 31, 2022 32 Note 1: Summary of Significant Accounting Policies 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 separate from the government. The blended component unit is reported as a governmental fund of the City (see note below for description) to emphasize that, while it is a legally separate entity, it is so intertwined with the City that it is, in substance, part of the City. Discretely Presented Component Units 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, 2022. Blended Component Unit Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) - SFH QalicB was created to function as a qualified low-income community business, as defined in Section 45D(d)(2) of the Internal Revenue Code of 1986 for the purpose of providing an indoor sports facility in the downtown corridor of the City of Salina. The purpose of the facility is to cater to local residents as well as host regional sports tournaments with the anticipation of becoming a regional destination for youth athletics. This mix of participation is expected to provide the most consistent visitation and tourism for the downtown district. The SFH QalicB is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. The field house is staffed by City of Salina employees. SFH QalicB has a December 31 fiscal year end. SFH QalicB is a not-for-profit organization exempt from income tax under Section 50l(c)(3) of the Internal Revenue Code and is exempt from similar state and local taxes. City of Salina, Kansas Notes to Financial Statements December 31, 2022 33 Complete financial statements for each of the individual component units may be obtained at the respective entity’s administrative offices. Salina Airport Authority Housing Authority of Salina Field House 3237 Arnold Ave. the City of Salina QALICB, Inc. Salina, Kansas 469 South 5th 300 West Ash Street Salina, Kansas Salina, Kansas Joint Ventures The City of Salina also participates with Saline County in one joint venture. The City and County organized the Saline 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. (Kansas Regulatory Basis) Building Authority (Audited) Total unencumbered cash, December 31, 2022 2,065,833$ Total change in unencumbered cash, year ended December 31, 2022 44,765 Total cash receipts, year ended December 31, 2022 1,576,973 Total cash receipts from City of Salina 504,888 Complete financial statements for the joint venture may be obtained at the entity’s administrative office. Saline County-City Building Authority 300 West Ash Street Salina, Kansas 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. City of Salina, Kansas Notes to Financial Statements December 31, 2022 34 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. Basis of Accounting and 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. 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 levied for, and interest associated with, the current fiscal period are 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. City of Salina, Kansas Notes to Financial Statements December 31, 2022 35 The fiduciary funds are used by the City to account for resources held by the City for the benefit of third parties. 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. Sales Tax Capital Fund (special revenue fund)- To account for 58% of the 1.25 cent sales tax designated for capital, debt, and human services purposes. Former Schilling AFB Environmental Fund (capital projects 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. 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. The City reports the following major proprietary funds: Solid Waste Disposal Fund - To account for the activities of the City's landfill. Water and Sewer Fund - To account for the activities of the City's water and sewer operations. Sanitation Fund - To account for the operations of the City's refuse collection service. Golf Course Fund - To account for the operations of the municipal golf course. The City reports 43 nonmajor governmental funds, three nonmajor permanent funds, one nonmajor debt service fund and three internal service funds. 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, deferred outflows of resources, liabilities and deferred inflows of resources 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. City of Salina, Kansas Notes to Financial Statements December 31, 2022 36 Accounts Receivable 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 noncurrent 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, if applicable. 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 inflows of resources and are identical to the adopted budget for 2022. 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. 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. City of Salina, Kansas Notes to Financial Statements December 31, 2022 37 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. Capital Assets (Including Intangible 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 is recognized as an expense (financial statements using the economic resources measurement focus) or an expenditure (financial statements using the current financial resources measurement focus) in accordance with GASB 89. Capital assets of the primary government, are depreciated/amortized using the straight-line method over the following estimated useful lives: Buildings 50 years Other equipment 5 - 15 years Vehicles 6 - 10 years Infrastructure 30 - 50 years City of Salina, Kansas Notes to Financial Statements December 31, 2022 38 Lease Assets The City initially measures lease assets as the sum of the following: a. the amount of the initial measurement of the lease liability. lease payments made to the lessor at or before the commencement of the lease term, less any lease incentives received from the lessor at or before the commencement of the lease term c. initial direct costs that are ancillary charges necessary to place the lease asset into service. Lease assets are amortized in a systematic and rational manner over the shorter of the lease term or the useful life of the underlying asset. The amortization of the lease asset is reported as an outflow of resources (amortization expense). Compensated Absences It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All employees of the City, except temporary and part time employees, may accumulate sick leave at a rate of 8 or 11 hours per month depending on their work duty schedule. There is no limit on the amount of sick leave that can be accumulated. Employees with more than five years of service with the City are paid for one-third of their accumulated sick leave at their current wage scale upon termination of employment in good standing. In 2001, a limited buy back policy was instituted. All regular employees are entitled to paid vacation time. Such leave is granted each year of employment. Employees must use 50% of leave accrued each calendar year and an employee's maximum accrued vacation leave balance cannot exceed 250 hours (or 350 hours for employees working 24-hour shifts). Employees are paid for all accumulated vacation leave at their current wage scale upon termination of employment. Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability in the government fund financial statements that will pay it. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave of the business-type funds and government wide financial statements are recorded as an expense and liability of those funds as the benefits accrue to employees. A liability is recorded for accumulated rights to receive sick pay benefits that are payable upon termination of employment. The General Fund, Bicentennial Center Fund, Central Garage Fund, Sanitation Fund, Solid Waste Fund, Golf Course Fund, and Water and Sewer Fund have been used in prior years to liquidate the liability for compensated absences. 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 assets 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 as deferred outflows of resources in the governmental activities. City of Salina, Kansas Notes to Financial Statements December 31, 2022 39 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 assets 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. Additionally, differences between expected and actual experience, changes in assumptions, changes in the pension liability, OPEB plan proportion and unearned property taxes are reported as deferred inflows. These amounts are deferred and recognized as an inflow of resources as provided for by applicable accounting pronouncements. Net Position Net position represents the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources. Net investment in capital assets consists of capital assets, net of accumulated depreciation and amortization, 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. 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. 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, 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 recognized as an expense in the period incurred under GASB 65. 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. City of Salina, Kansas Notes to Financial Statements December 31, 2022 40 Fund Balances In the fund financial statements, governmental funds report fund balance in the following classifications: nonspendable, restricted, committed, assigned and unassigned. Nonspendable fund balance includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Restricted fund balance indicates that constraints have been placed on the use of resources either by being externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. Committed fund balances include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the City Commission. Assigned fund balances include amounts that are constrained by the City management’s intent to be used for specific purposes but are neither restricted nor committed. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available restricted amounts are considered to be spent first. When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund balance is available, the following is the order in which resources will be expended: committed, assigned and unassigned. The following is the detail for fund balance classifications in the governmental funds financial statements: Former Other Total Sales Tax Schilling AFB Debt Capital Federal Governmental Governmental General Capital Environmental Service Projects Grants Funds Funds Fund balances: Nonspendable for: Inventory 156,576$ -$ -$ -$ -$ -$ -$ 156,576$ Restricted for: Public works - - - - - - 2,246,841 2,246,841 Public health and sanitation - - - - - - 234 234 Culture and recreation - - - - - - 432,161 432,161 Planning and development - - - - - - 1,258,537 1,258,537 Capital improvements - - 61,424,146 - - - - 61,424,146 Debt payments - - - 2,196,006 - - - 2,196,006 Committed for: Public safety - - - - - - 992,571 992,571 Culture and recreation - - - - - - 766,819 766,819 Planning and development - - - - - - 3,227,973 3,227,973 Cemetery - - - - - - 548,172 548,172 Capital improvements - 7,625,529 - - - - 6,912,648 14,538,177 Assigned for: General government 357,738 - - - - - 33,519 391,257 Public safety - - - - - - 50,300 50,300 Public works - - - - - - - - Culture and recreation - - - - - - 52,173 52,173 Capital improvements - 437,426 4,169,677 - 2,748,819 - 2,030,432 9,386,354 Unassigned:25,313,694 - - - (2,948,316) 154,698 12 22,520,088 Total fund balances 25,828,008$ 8,062,955$ 65,593,823$ 2,196,006$ (199,497)$ 154,698$ 18,552,392$ 120,188,385$ Major Governmental Funds City of Salina, Kansas Notes to Financial Statements December 31, 2022 41 Note 2: Deposits, Investments and Investment Income 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, 2022, the City has the following investments: Investment Type Fair Value Rating Kansas Municipal Investment Pool 320,764$ S&P AAAf/S1+ Total fair value 320,764$ 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. City of Salina, Kansas Notes to Financial Statements December 31, 2022 42 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, 2022, 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 6). As of December 31, 2022, the balance of the Interest Reserve and Operating Reserve was $54,271 and $127,065, respectively. City of Salina, Kansas Notes to Financial Statements December 31, 2022 43 Note 3: Receivables Receivables as of year-end, including the applicable allowances for doubtful accounts, are as follows: Debt Other General Service Governmental Total Primary Government Receivables: Accounts 8,240,843$ -$ 3,069,624$ 11,310,467$ Taxes 13,163,521 3,282,438 - 16,445,959 Interest 5,141 - 500 5,641 Gross receivables 21,409,505 3,282,438 3,070,124 27,762,067 Less: allowance for uncollectibles (6,966,724) - (786) (6,967,510) Total 14,442,781$ 3,282,438$ 3,069,338$ 20,794,557$ Solid Water Waste and Disposal Sewer Sanitation Total Primary Government Receivables: Accounts 371,737$ 2,357,678$ 377,662$ 14,417,544$ Taxes - - - 16,445,959 Interest 16 - - 5,657 Gross receivables 371,753 2,357,678 377,662 30,869,160 Less: allowance for uncollectibles - (1,116,783) (129,021) (8,213,314) Total 371,753$ 1,240,895$ 248,641$ 22,655,846$ Component Units Salina Airport Authority Receivables: Accounts 91,730$ Grants 504,130 Leases 682,175 Interest - leases 7,997 Less: allowance for uncollectibles (1,500) Total Salina Airport Authority 1,284,532 Salina Housing Authority Receivables: Accounts 110,593$ Less: allowance for uncollectibles (6,621) Total Salina Housing Authority 103,972 Total 1,388,504$ City of Salina, Kansas Notes to Financial Statements December 31, 2022 44 Note 4: Stewardship, Compliance and Accountability 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. 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 2022 budget was amended during the year for the Special Alcohol, Neighborhood Parks, TPEC, Solid Waste, Central Garage, Golf Course and Tourism and Convention funds. The statutes permit management to transfer budgeted amounts between line items within an individual fund. However, such statutes prohibit expenditures in excess of the total amount of the adopted budget of expenditures of individual funds. Budget comparison statements are presented for each fund showing actual receipts and expenditures compared to legally budgeted receipts and expenditures. All legal annual operating budgets are prepared using the statutory basis of accounting, in which, revenues are recognized when cash is received, and expenditures include disbursements, accounts payable, and encumbrances. Encumbrances are commitments by the municipality for future payments and are supported by a document evidencing the commitment, such as a purchase order or contract. All unencumbered appropriations (legal budget expenditure authority) lapse at year end. City of Salina, Kansas Notes to Financial Statements December 31, 2022 45 A legal operating budget is not required for capital projects funds, Former Schilling AFB Environmental fund, SFH QalicB fund, nonmajor 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. Expenditures in Excess of Budget For the year ended December 31, 2022, for the Debt Service Fund had actual expenditures in excess of budget by $109,295. This excess spending was covered by available cash basis reserves. 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, 2022, the statutory limit for the City was $167,634,982, providing a debt margin of $108,644,195. Deficit Net Position/Fund Balances At December 31, 2022, the capital projects fund, a major fund, had a deficit fund balance of $199,497. City of Salina, Kansas Notes to Financial Statements December 31, 2022 46 Note 5: Capital Assets Capital assets activity for the year ended December 31, 2022, was: Beginning Ending Balance Increases Decreases Transfers Balance Governmental Activities Capital assets not being depreciated: Construction in progress 20,326,839$ 5,167,934$ -$ (1,622,716)$ 23,872,057$ Land 24,646,334 - - - 24,646,334 Total capital assets not being depreciated 44,973,173 5,167,934 - (1,622,716) 48,518,391 Capital assets being depreciated/amortized: Infrastructure 241,307,031 - - 1,622,716 242,929,747 Buildings and improvements 53,158,946 - - - 53,158,946 Vehicles 10,387,525 278,950 (762,364) - 9,904,111 Equipment, furniture and fixtures 7,885,409 80,207 - - 7,965,616 Leased vehicles - 649,031 - - 649,031 Leasehold improvements 357,383 - - - 357,383 Totals capital assets being depreciated/amortized 313,096,294 1,008,188 (762,364) 1,622,716 314,964,834 Less accumulated depreciation/amortization for: Infrastructure 100,616,614 4,650,686 - - 105,267,300 Buildings and improvements 25,253,821 1,337,075 - - 26,590,896 Vehicles 8,072,895 518,648 (723,948) - 7,867,595 Equipment, furniture and fixtures 5,507,078 351,822 - - 5,858,900 Total accumulated depreciation/amortization 139,450,408 6,858,231 (723,948) - 145,584,691 Total capital assets, beingdepreciated/amortized, net 218,619,059$ (682,109)$ (38,416)$ -$ 217,898,534$ Beginning Ending Balance Increases Decreases Transfers Balance (Restated) Business-type Activities Capital assets not being depreciated: Construction in progress 38,987,075$ 2,875,632$ -$ (2,149,271)$ 39,713,436$ Land 2,386,334 - - - 2,386,334 Total capital assets not being depreciated 41,373,409 2,875,632 - (2,149,271) 42,099,770 Capital assets being depreciated: Infrastructure 140,031,871 - - 2,149,271 142,181,142 Buildings and improvements 22,864,164 - - - 22,864,164 Vehicles 3,781,267 - (228,767) - 3,552,500 Equipment, furniture, and fixtures 5,625,739 - - - 5,625,739 Totals capital assets being depreciated 172,303,041 - (228,767) 2,149,271 174,223,545 Less accumulated depreciation for: Infrastructure 56,385,977 3,203,199 - - 59,589,176 Buildings and improvements 14,900,421 423,824 - - 15,324,245 Vehicles 2,896,199 184,275 (203,899) - 2,876,575 Equipment, furniture, and fixtures 4,724,650 238,570 - - 4,963,220 Total accumulated depreciation 78,907,247 4,049,868 (203,899) - 82,753,216 Total capital assets, being depreciated, net 134,769,203$ (1,174,236)$ (24,868)$ -$ 133,570,099$ City of Salina, Kansas Notes to Financial Statements December 31, 2022 47 During 2022 the City adjusted the beginning balances of several capital asset accounts in order for the ending balances to tie to their depreciation schedules. As a result of this restatement, beginning net position for Business-type Activities (Water and Sewer Fund) was increased by $17,275,573. The City’s depreciation/amortization expense was charged to governmental functions as follows: Governmental Activities General government 21,437$ Public safety 791,376 Public works 4,591,522 Public health 30,508 Culture and recreation 1,089,408 Planning and development 333,980 Total depreciation expense – governmental activities 6,858,231$ Business-type Activities Solid waste disposal 134,242$ Water and sewer 3,711,786 Sanitation 158,857 Golf course division 44,983 Total depreciation expense – business-type activities 4,049,868$ City of Salina, Kansas Notes to Financial Statements December 31, 2022 48 Note 6: Long-Term Obligations The following is a summary of changes in long-term obligations for fiscal year 2022: Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental Activities General obligation bonds 59,582,649$ 7,840,000$ (4,914,649)$ 62,508,000$ 5,353,000$ General obligation bond premium 3,041,369 - (367,397) 2,673,972 367,000 Loans payable 12,640,000 - - 12,640,000 - Loans payable discount (413,058) - 13,963 (399,095) - Lease payable - 702,725 (53,694) 649,031 148,302 OPEB liability 3,502,471 459,451 (541,973) 3,419,949 - KPERS OPEB liability 340,238 46,371 (129,531) 257,078 - Net pension liability 25,057,864 - 13,158,160 38,216,024 - Accrued compensation 2,838,655 55,008 (1,252,185) 1,641,478 723,032 Temporary notes 3,647,188 - (3,647,188) - - Temporary note premium 66,598 - (66,598) - - Total 110,303,974$ 9,103,555$ 2,198,908$ 121,606,437$ 6,591,334$ Business-type Activities General obligation bonds 7,672,351$ -$ (1,035,351)$ 6,637,000$ 952,000$ General obligation bond premium 326,140 - (51,748) 274,392 39,399 Loans payable 43,966,366 2,035,480 (2,203,289) 43,798,557 3,628,170 Revenue bonds 8,865,000 - (775,000) 8,090,000 795,000 Revenue bond premium 660,145 - (53,667) 606,478 66,015 OPEB liability 569,713 74,732 (88,155) 556,290 - KPERS OPEB liability 164,791 20,687 (57,781) 127,697 - Net pension liability 2,261,985 - 1,187,791 3,449,776 - Accrued compensation 651,732 (291,476) 360,256 160,616 Temporary notes 1,582,812 - (1,582,812) - - Temporary note premium 28,902 - (28,902) - - Total 66,749,937$ -$ (4,980,390)$ 63,900,446$ 5,641,200$ City of Salina, Kansas Notes to Financial Statements December 31, 2022 49 The following is a detailed listing of the City’s general obligation bonds outstanding as of December 31, 2022: Governmental Business-type Activities Activities Purpose, Series Issue Date Final Maturity Interest Rates Original Issue Outstanding Outstanding Internal Improvements, 2013A 2/15/2013 10/1/2028 2.60% to 3.65% 1,360,000$ 630,000$ -$ Improvement and Refunding, 2015A 7/29/2015 10/1/2035 3.00 to 3.50% 6,825,000 4,420,000 - Internal Improvements, 2016A 7/26/2016 10/1/2036 2.00% to 3.00% 6,570,000 4,925,000 - Refunding, 2016B 7/26/2016 10/1/2031 2.00% to 5.00% 13,750,000 6,517,000 1,688,000 Internal Improvements, 2017A 7/27/2017 10/1/2037 3.00% to 3.38% 9,310,000 7,520,000 - Internal Improvements, 2018A 11/27/2018 10/1/2033 3.15% to 4.00% 2,090,000 1,630,000 - Internal Improvements, 2019A 4/24/2019 10/1/2039 3.00% to 4.00% 11,090,000 10,015,000 - Internal Improvements, 2020A 4/29/2020 10/1/2035 2.00% to 3.00% 5,210,000 2,727,000 1,408,000 Internal Improvements, 2020B 11/19/2020 10/1/2036 2.00% to 3.00% 8,450,000 3,533,000 3,252,000 Internal Improvements, 2021A 4/29/2021 10/1/2041 1.63% to 4.50% 7,645,000 7,420,000 - Refunding, 2021B 9/8/2021 10/1/2034 1.15% to 2.00% 6,220,000 5,331,000 289,000 Internal Improvements, 2022A 4/28/2022 10/1/2042 2.5% to 4.00% 7,840,000 7,840,000 - $ 62,508,000 $ 6,637,000 General Obligation Bonds - Primary Government The following is a detailed listing of the City’s revenue bonds outstanding as of December 31, 2022: Business-type Original Activities Purpose, Series Issue Date Final Maturity Interest Rates Issue Outstanding Revenue & Refunding, 2019 9/11/2029 10/1/2031 3.00% 10,330,000$ 8,090,000$ Revenue Bonds - Primary Government The following is a detailed listing of the City’s loans payable as of December 31, 2022: Governmental Business-type Activities Activities Purpose Issue Date Final Maturity Interest Rates Original Issue Outstanding Outstanding Kansas Public Water Supply 2629 8/1/2014 8/1/2034 2.12% 8,562,911$ -$ 5,286,080$ Kansas Public Water Supply 2917 8/15/2018 2/1/2040 2.33% 32,000,000 - 28,422,912 Kansas Public Water Supply 2957 7/2/2018 2/1/2040 2.33% 4,250,000 - 3,544,914 Kansas Public Water Supply 2997 7/7/2020 8/1/2041 1.43% 4,250,000 - 2,784,646 Kansas Water Pollution Control 2049 2/22/2021 9/1/2042 1.30% 31,500,000 - 2,707,614 Kansas Water Pollution Control 2050 12/11/2018 3/1/2035 2.54% 2,250,000 - 1,052,391 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 - $ 12,640,000 $ 43,798,557 Loans Payable - Primary Government City of Salina, Kansas Notes to Financial Statements December 31, 2022 50 The following is a detailed listing of the long-term debt outstanding of Salina Airport Authority, a component unit of the City, as of December 31, 2022: Original Purpose, Series 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$ 255,000$ Taxable Refunding, 2017A 7/12/2017 9/1/2030 1.61% to 3.35% 10,255,000 9,420,000 Refunding, 2017B 7/12/2017 9/1/2031 2.00% to 3.00% 4,835,000 4,710,000 Refunding, 2019A 10/10/2019 9/1/2029 2.10% to 3.10% 675,000 490,000 Taxable Refunding, 2019B 10/10/2019 9/1/2023 2.80% to 3.00% 3,455,000 870,000 Refunding, 2021A 8/17/2021 9/1/2031 0.25% to 2.00% 2,345,000 2,200,000 Less: Unamortized bond premium 13,209 Plus: Unamortized bond discount (52,479) $ 17,905,730 General Obligation Bonds - Component Units Original Purpose, Series Issue Date Final Maturity Interest Rates Issue Outstanding Internal Improvements, 2020-1 9/1/2020 9/1/2023 0.48% 2,100,000$ 2,100,000$ Taxable, 2021-1 11/10/2021 9/1/2023 0.45% 3,545,000 3,545,000 Taxable, 2022-1 7/1/2022 7/1/2023 2.25% 1,000,000 1,000,000 $ 6,645,000 Temporary Notes - Component Units Original Purpose, Series Issue Date Final Maturity Interest Rates Issue Outstanding Building 824 Improvements 8/12/2020 9/1/2030 3.30%460,000$ 379,258$ Financed Purchase Agreement - Component Units Annual debt service requirements to maturity for general obligation bonds: Year Ending December 31, Principal Interest Total Principal Interest Total 2023 5,353,000$ 1,899,852$ 7,252,852$ 952,000$ 176,765$ 1,128,765$ 2024 5,392,000 1,587,816 6,979,816 873,000 140,525 1,013,525 2025 5,195,000 1,432,854 6,627,854 805,000 118,312 923,312 2026 4,717,000 1,279,937 5,996,937 593,000 97,309 690,309 2027 4,562,000 1,137,532 5,699,532 558,000 81,857 639,857 2028 - 2032 19,250,000 3,874,260 23,124,260 1,845,000 228,729 2,073,729 2033 - 2037 14,599,000 1,546,848 16,145,848 1,011,000 47,476 1,058,476 2038 - 2042 3,440,000 190,200 3,630,200 - - - Total 62,508,000$ 12,949,299$ 75,457,299$ 6,637,000$ 890,973$ 7,527,973$ General Obligation Bonds - Primary Government Governmental Activities Business-type Activities City of Salina, Kansas Notes to Financial Statements December 31, 2022 51 Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues: Year Ending December 31, Principal Interest Total 2023 795,000$ 242,700$ 1,037,700$ 2024 820,000 218,850 1,038,850 2025 845,000 194,250 1,039,250 2026 870,000 168,900 1,038,900 2027 895,000 142,800 1,037,800 2028 - 2031 3,865,000 293,850 4,158,850 Total 8,090,000$ 1,261,350$ 9,351,350$ Business-type Activities Revenue Bonds - Primary Government Annual debt service requirements to maturity of the for loans payable: Year Ending December 31, Total 2023 -$ 2024 - 2025 - 2026 616,140 2027 616,140 Thereafter 11,407,720 12,640,000$ City of Salina, Kansas Notes to Financial Statements December 31, 2022 52 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, 2022: Year Ending December 31, Principal Interest Total 2023 8,355,000$ 546,911$ 8,901,911$ 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 1,905,000 312,193 2,217,193 2028 - 2032 8,215,000 687,076 8,902,076 2033 - 2036 680,000 33,795 713,795 Total 24,590,000$ 2,809,268$ 27,399,268$ General Obligation Bonds - Component Units Year Ending December 31, Principal Interest Total 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 48,055 6,273 54,328 2028 - 2030 153,970 7,697 161,667 Total 379,258$ 54,048$ 433,306$ Financed Purchase Agreement - Component Units 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: Year Ending December 31, Principal Interest Total 2023 391,228$ 110,002$ 501,230$ 2024 399,566 101,664 501,230 2025 408,082 93,148 501,230 2026 416,779 84,451 501,230 2027 425,662 75,569 501,231 Thereafter 3,244,763 263,850 3,508,613 Total 5,286,080$ 728,684$ 6,014,764$ Business-type Activities Loans Payable - Primary Government City of Salina, Kansas Notes to Financial Statements December 31, 2022 53 During 2019, the City entered into additional loans with the Kansas Public Water Supply Fund and the Kansas Water Pollution Control Fund. The water supply loans allow the City to borrow up to $36,170,000 with a gross interest rate of 2.33%. The water pollution control loan allows the City to borrow up to $2,250,000 with a gross interest rate of 2.54%. Amortization schedules for the loans are not yet available since the loans have not been fully finalized. The purpose of the loans are to finance various water and sewer infrastructure projects throughout the City. Dakotas and CNMC Notes. Dakotas Note A - On July 27, 2016, a $6,016,500 promissory note with a maturity date of December 10, 2050, was provided to SFH QalicB by Dakotas XXII, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest-only payments due, partially in arrears and partially in advance, on the tenth day of each December through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023, is due. Commencing on December 10, 2016, and continuing through the maturity date, annual payments of principal and interest in an amount equal to $293,276 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023, and is secured by the Loan and Security Agreement. As of December 31, 2022, the note balance was $6,016,500. Dakotas Note B - On July 27, 2016, a $2,623,500 promissory note with a maturity date of December 10, 2050, was provided to the SFH QalicB by Dakotas XXII, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest-only payments due, partially in arrears and partially in advance, on the tenth day of each December through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023, is due. Commencing on December 10, 2026, and continuing through the maturity date, annual payments of principal and interest in an amount equal to $127,883 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023, and is secured by the Loan and Security Agreement. As of December 31, 2022, 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-CDE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest-only payments, partially in arrears and partially in advance, on the tenth day of each December through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023, is due. Commencing on December 10, 2026, and continuing through the maturity date, annual payments of principal and interest in an amount equal to $130,345 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023, and is secured by the Loan and Security Agreement. As of December 31, 2022, the note balance was $2,674,000. CNMC Note B - On July 27, 2016, a $1,326,000 promissory note with a maturity date of December 10, 2050, was provided to the SFH QalicB by CNMC Sub-CDE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, on the tenth day of each December through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023, is due. Commencing on December 10, 2026, and continuing through the maturity date, annual payments of principal and interest in an amount equal to $64,636 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023, and is secured by the Loan and Security Agreement. As of December 31, 2022, the note balance was $1,326,000. City of Salina, Kansas Notes to Financial Statements December 31, 2022 54 As of December 31, 2022, the principal balance of these four loans was $12,240,905. 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. Premises lease. On July 27, 2016, SFH QalicB, as lessor, entered into a lease agreement with the City, as lessee, for the use of the Salina Field House, as defined in the Net Lease agreement (the "Property"). 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, 2022, SFH QalicB earned $492,917 of rental income under the terms of the Net Lease. As of December 31, 2022, rental income of $109,737 remained receivable from the City. The lease has been reported as an intra-entity lease. Accordingly, the reporting requirements of GASB 87 do not apply and the appropriate eliminations have been made. The following is a schedule, by year, of total minimum lease payments by the City to SFH QalicB under the lease as of December 31, 2022: Year Ending December 31, Lease Payment 2023 162,500$ 2024 227,500 2025 227,500 2026 650,000 2027 650,000 2028 - 2032 3,250,000 2033 - 2037 3,250,000 2038 - 2042 3,250,000 2043 - 2046 2,275,000 Total 13,942,500$ Premises Lease between QalicB and City City of Salina, Kansas Notes to Financial Statements December 31, 2022 55 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. The lease does not qualify for GASB 87 reporting. Sales tax and Revenue (STAR) Bonds. STAR Bonds are authorized to be issued pursuant to K.S.A. 12-17, 160, et seq., as amended (the STAR Bond Act). The STAR Bond Act provides a form of tax increment financing that enables the issuance of bonds payable from certain State and local sales and compensating use tax revenues and transient guest tax revenues generated from STAR bond projects constructed within a STAR bond project district. To implement STAR bond financing, a local government must adopt a resolution that specifies a proposed STAR bond project district’s boundary and describes the overall district plan, hold a public hearing on the district and plan, and pass a resolution that establishes the STAR bond project district. Additionally, there may be one or more projects within a STAR bond district. In accordance with the STAR Bond Act, the City has no liability for payment of bonds in the event that revenues received from sources noted above are inadequate to pay the debt incurred with the issuance of the STAR bonds. In connection with the issuance of STAR bonds, the City of Salina and the State of Kansas entered 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, 2022, the outstanding balances for the 2018-A and 2018-B were $16,585,000 and $4,320,000, respectively. City of Salina, Kansas Notes to Financial Statements December 31, 2022 56 Leases Year Ending December 31, Principal Interest Total 2023 148,302$ 5,932$ 154,234$ 2024 142,599 11,636 154,235 2025 137,114 17,121 154,235 2026 130,654 22,193 152,847 2027 90,362 19,577 109,939 Total 649,031$ 76,459$ 725,490$ Vehicle Leases During fiscal year 2022, the City implemented Governmental Accounting Standards Board Statement No. 87, Leases (GASB 87). Leases having a greater than twelve month lease term are analyzed to determine if the arrangement is subject to GASB 87. If the City is found to be either the lessee or the lessor in the agreement, GASB 87 accounting principles are applied. Adoption of GASB 87 had no effect on the City’s beginning net position or fund balances at January 1, 2022. Note 7: Interfund Transfers A reconciliation of interfund transfers follows: Transfer In Transfer Out General 5,806,300$ 1,540,000$ Tourism and convention - 902,791 Special gas 160,000 - Sales tax capital - 10,333,850 Bicentennial center 861,861 - Debt service 1,925,930 - Arts & Humanity 520,000 - Sales Tax Economic Development 750,000 - Solid waste disposal 42,500 701,700 Water and sewer 5,178,672 9,068,422 Sanitation - 497,350 Golf course 10,000 - Parks Maintenance 2,020,000 - Fleet Management 1,000,000 - Street Maintenance 3,750,000 - Building and Facilities Maintenance 870,500 - Kenwood Cove Capital 68,350 - Central garage 80,000 - Total transfers 23,044,113$ 23,044,113$ The City uses interfund transfers to share administrative costs between funds. City of Salina, Kansas Notes to Financial Statements December 31, 2022 57 Note 8: Contingent Liabilities The City receives significant financial assistance from numerous federal and state governmental agencies in the form of grants and state pass-through aid. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. However, in the opinion of management, any such disallowed claims would not have a material effect on the financial statements of the City as of December 31, 2022. 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. City of Salina, Kansas Notes to Financial Statements December 31, 2022 58 Note 9: 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, 2022. Project Authorization Expenditures Downtown Streetscape $ 12,787,597 $ 12,327,367 Smoky Hill River Renewal 12,165,000 3,639,274 S Well Field & WTP Phase 1 41,500,000 31,112,703 Rehab Pump St 28,29/Repl 28 Face Main 550,000 - Northbound 9th Street Bridge 2,000,000 2,307,696 Smoky Hill Greenway Trail 435,637 62,362 Chorine Building 2 Roof Replacement 35,000 - 2019 Water Main Replacement 4,000,000 2,436,516 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 WWTP Owners Rep 896,790 447,919 WWTP Improvement PH I 879,193 3,577,149 Public Safety Communication System 2,361,323 2,434,573 2021 Pavement Sealing 460,000 400,607 TPEC Improvements (Floor/HVAC) 170,246 578,367 5th Street Parking Lot 467,963 444,476 Pool Tennis Court Remodel 864,000 15,807 2021 Water Main Replacement 2,000,000 - Campbell Plaza 300,000 282,473 Magnolia Road Sidewalk 250,000 20,430 Automated Sanitation Trucks 1,600,000 1,560,781 SH River Trail Raise 250,000 59,645 Cedar Point Addition 1,017,910 750 Holmes Road Magnolia to Crawford 250,000 121,970 West Magnolia - Centennial to 135 267,290 117,804 Winn Road Culvert Replacement 193,510 28,050 Bill Burke Restrooms 400,000 23,080 Bill Burke Improvements 3,600,000 83,687 Markley Trail BFRA 65,000 338 $ 99,143,754 $ 62,576,508 City of Salina, Kansas Notes to Financial Statements December 31, 2022 59 Note 10: Pollution Remediation Obligations 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 statement of net position date. The $2,372,698 reported as landfill closure and postclosure care liability as of December 31, 2022, represents the cumulative amount reported to date based on the use of 26.6% of the estimated capacity of the landfill. The City's solid waste fund will recognize the remaining estimated cost of closure and postclosure care of $8,918,907 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 2022. 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 postclosure care costs will be provided through the normal budgeting and rate setting process, including the issuance of general obligation bonds, if necessary. 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, thus no liability is recorded related to this remediation as of December 31, 2022. 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 City of Salina, Kansas Notes to Financial Statements December 31, 2022 60 by the City during the year ended December 31, 2021 and was recorded as restricted fund balance as of December 31, 2022. No liability has been accrued as of December 31, 2022 due to the uncertainty of the amounts required to mitigate the property. Note 11: Pension Plans 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. 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 City of Salina, Kansas Notes to Financial Statements December 31, 2022 61 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, 2022. 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 8.9% for KPERS and 22.99% for KP&F for the year ended December 31, 2022. Member contribution rates as a percentage of eligible compensation for the fiscal year 2022 are 6.00% for Local employees and 7.15% for Police and Firemen. Employer Allocations. Although KPERS administers one cost-sharing multiple-employer defined benefit pension plan, separate (sub) actuarial valuations are prepared to determine the actuarial determined contribution rate by group. Following this method, the measurement of the collective net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense are determined separately for each of the following groups of the plan: State/School Local Police and Firemen Judges To facilitate the separate (sub) actuarial valuations, KPERS maintains separate accounts to identify additions, deductions, and fiduciary net position applicable to each group. The allocation percentages presented for each group in the schedule of employer and nonemployer allocations are applied to amounts presented in the schedules of pension amounts by employer and nonemployer. The allocation percentages for the City’s share of the collective pension amounts as of December 31, 2022, 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, 2022. City of Salina, Kansas Notes to Financial Statements December 31, 2022 62 The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2022, the City’s proportion for the Local employees group was 0.733%, which was a decrease of .032% from its proportion measured at June 30, 2021. At June 30, 2022, the City’s proportion for the Police and Firemen group was 1.878%, which was a decrease of .104% from its proportion measured at June 30, 2021. Net Pension Liability. At December 31, 2022, the City and its component units reported a liability of $41,665,800 for its total proportionate share of the net pension liability for the Local and Police and Firemen groups. The total pension liability was determined by an actuarial valuation as of December 31, 2021, which was rolled forward to June 30, 2022, using the following actuarial assumptions: Assumptions Rate Price inflation 2.75% Salary increases, including wage increases 3.50% to 12.00% including inflation Long-term rate of return, net of investment expense, and including price inflation 7.00% 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, 2021, valuation were based on the results of an actuarial experience study conducted for the period of January 1, 2017, through December 31, 2019. The experience study is dated January 26, 2023. 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, 2022, are summarized in the following table: Long-Term Expected Real Asset Class Long-term Allocation Rate of Return US Equities 23.5% 5.20% Non-US Equities 23.5% 6.40% Private Equity 8.0% 9.50% Private Real Estate 11.0% 4.45% Yield Driven 8.0% 4.70% Real Return 11.0% 3.25% Fixed Income 11.0% 1.55% Short Term Investments 4.0% 0.25% 100.0% City of Salina, Kansas Notes to Financial Statements December 31, 2022 63 Discount Rate. The discount rate used to measure the total pension liability was 7.00%. 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 7.00%, 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 (6.200%) or 1-percentage point higher (8.00%) than the current rate: 1% Decrease (6.00%) Discount Rate (7.00%) 1% Increase (8.00%) Local 20,946,725$ 14,581,450$ 9,278,252$ Police & Firemen 37,150,150 27,084,350 18,709,024 58,096,875$ 41,665,800$ 27,987,276$ For the year ended December 31, 2022, the City recognized Local pension expense of $1,747,091 and Police and Firemen pension expense of $3,672,711, 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 $1,969, respectively. City of Salina, Kansas Notes to Financial Statements December 31, 2022 64 Deferred Outflows of Resources and Deferred Inflows of Resources. As of December 31, 2022, the City and its component units reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Deferred Outflows Deferred Inflows Local of Resources of Resources Differences between actual and expected experience 551,531$ 26,137$ Net differences between projected and actual earnings on investments 1,234,319 - Changes in assumptions 2,330,761 - Changes in proportion 372,737 751,693 Total 4,489,348$ 777,830$ Deferred Outflows Deferred Inflows Police and Firemen of Resources of Resources Differences between actual and expected experience 1,149,350$ -$ Net differences between projected and actual earnings on investments 1,858,833 - Changes in assumptions 3,480,514 - Changes in proportion - 1,372,156 Total 6,488,697$ 1,372,156$ Deferred Outflows Deferred Inflows Local of Resources of Resources Differences between actual and expected experience 12,548$ 2,878$ Net differences between projected and actual earnings on investments - 112,883 Changes in assumptions 62,577 - Changes in proportion 44,343 7,683 Total 119,468$ 123,444$ Deferred Outflows Deferred Inflows Local of Resources of Resources Differences between actual and expected experience 35,631$ 1,689$ Net differences between projected and actual earnings on investments 79,742.00 - Changes in assumptions 150,577 - Changes in proportion 70,327 22,516 Total 336,277$ 24,205$ Housing Authority Airport Authority City of Salina, Kansas Notes to Financial Statements December 31, 2022 65 $2,441,561 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2023. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Local Deferred Police & Firemen Year Ended (Inflows) Outflows Deferred (Inflows) December 31, Amount Outflows Amount Total 2023 960,082$ 1,481,479$ 2,441,561$ 2024 891,664 1,292,913 2,184,577 2025 423,408 517,834 941,242 2026 1,373,261 1,778,217 3,151,478 2027 63,103 46,098 109,201 3,711,518$ 5,116,541$ 8,828,059$ $40,163 and $84,492 reported as deferred outflows of resources related to pensions resulting from Salina Housing Authority and Salina Airport Authority contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2023. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Housing Airport Authority Authority Deferred Deferred Year Ended (Inflows) Outflows (Inflows) Outflows December 31,Amount Amount Total 2023 40,163$ 84,492$ 124,655$ 2024 2,858 74,688 77,546 2025 2,586 48,970 51,556 2026 (15,882) 98,745 82,863 2027 4,135 5,177 9,312 33,860$ 312,072$ 345,932$ 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. City of Salina, Kansas Notes to Financial Statements December 31, 2022 66 Flexible Benefit Plan (I.R.C. Section 125 The City Commission has adopted by resolution a salary reduction flexible benefit plan ("Plan") under Section 125 of the Internal Revenue Code. All City employees working more than 20 hours per week are eligible to participate in the Plan beginning after two full months of employment. Each participant may elect to reduce his or her salary to purchase benefits offered through the Plan. Benefits offered through the Plan include various insurance and disability benefits. Note 12: 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, $146,926 is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 2022 2021 Unpaid claims, January 1 366,796$ 446,495$ Incurred claims (including IBNRs)734,629 989,033 Claim payments (701,647) (1,068,732) Unpaid claims, December 31 399,778$ 366,796$ 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 $50,000. Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Health Insurance Fund because it is expected to be liquidated with expendable available financial resources. Therefore, all of the liability is considered to be due within one year. City of Salina, Kansas Notes to Financial Statements December 31, 2022 67 Changes in the balances of claims liabilities during the past two years are as follows: 2022 2021 Unpaid claims, January 1 417,000$ 605,000$ Incurred claims (including IBNRs)5,640,514 4,560,880 Claim payments (5,652,514) (4,748,880) Unpaid claims, December 31 405,000$ 417,000$ Note 13: Other Postemployment Healthcare Benefits Plan Description (OPEB) 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 benefit payment requirements of plan participants and the City are established and amended by the City. The required payments are based on projected pay-as-you-go financing requirements. There are no assets accumulated in a trust that meets the criteria in paragraph 4 of GASB 75. As of December 31, 2022, the following employees were covered by the benefit terms: Active employees 440 Retirees and covered spouses 29 Total 469 The total OPEB liability of $3,976,239 was measured as of December 31, 2022, and was determined by an actuarial valuation as of December 31, 2021. City of Salina, Kansas Notes to Financial Statements December 31, 2022 68 The total OPEB liability in the December 31, 2021, actuarial valuation was determined using the following assumptions and other inputs, applied to all periods in the measurement, unless otherwise specified: Valuation date Actuarial cost methodInflation Salary increases Discount rate Healthcare cost trend rates Retiree's share of benefit related costs 100% of the premium 2.75% 3.50% 2.06% ultimate rate of 3.70% in 2074 December 31, 2021 Entry age normal as a level percentage of payroll Medical: 5.90% for 2021, decreasing 0.50% per year year to an ultimate rate of 3.7% for 2074 Dental: 5.00% to 2022, then decreasing to an The discount rate was based on an index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. Mortality rates were based on the RP 2014 Mortality Tables, with age set forwards as well as other adjustments based on different membership groups. Changes in the total OPEB liability are as follows: Balance, January 1, 2022 4,072,184$ Service cost 282,579 Interest 90,906 Benefit paid (134,193) Economic/demographic gains/losses (495,935) Changes in assumptions 160,698 Balance, December 31, 2022 3,976,239$ 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 (1.06%) or one percentage point higher (3.06%) than the current discount rate: 1% Decrease Discount rate 1% Increase (1.06%) (2.06%) (3.06%)Total OPEB Liability 4,361,588$ 3,976,239$ 3,623,200$ City of Salina, Kansas Notes to Financial Statements December 31, 2022 69 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: 1% Decrease Trend Rates 1% Increase Total OPEB Liability 3,409,594$ 3,976,239$ 4,633,927$ Healthcare Cost For the year ended December 31, 2022, the City recognized OPEB expense of $336,083. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2022, the City reported deferred outflows related to other postemployment benefits from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Changes of assumptions 443,642$ (100,964)$ Differences between expected and actual experience - (606,779) Total 443,642$ (707,743)$ Amounts reported as deferred outflows of resources will be recognized in OPEB expense as follows: Year Ended Deferred (Inflows) June 30, Outflows Amount2023(37,402)$ 2024 (37,402) 2025 (37,402) 2026 (40,210) 2027 (42,055) 2028+(69,630) Total (264,101)$ City of Salina, Kansas Notes to Financial Statements December 31, 2022 70 Other Postemployment Benefits (KPERS) Plan Description. The City participates in a multiple-employer defined benefit other postemployment benefit (OPEB) plan (the Plan) which is administered by KPERS. The Plan provides long-term disability benefits and a life insurance benefit for disabled members to KPERS members, as provided by K.S.A. 74-04927. The Plan is administered through a trust held by KPERS that is funded to pay annual benefit payments. However, because the trust’s assets are used to pay employee benefits other than OPEB, the trust does not meet the criteria in paragraph 4 of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Accordingly, the Plan is considered to be administered on a pay-as-you-go basis. 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, 2022, the measurement date, the following employees were covered by the benefit terms: Active employees 263 Disabled members 3 Total 266 City of Salina, Kansas Notes to Financial Statements December 31, 2022 71 Total OPEB Liability. The City and its component units reported a total KPERS OPEB liability of $408,297 as of December 31, 2022, was measured as of June 30, 2022, and was determined by an actuarial valuation as of December 31, 2021, which was rolled forward to June 30, 2022, using the following actuarial assumptions: Valuation date December 31, 2021 Actuarial cost method Entry age normal Inflation 2.75%Salary increases 3.00% Discount rate (based on 20 year municipal bond rate with an average rating of AA/Aa or better obtained, through the Bond Buyer General Obligation 20-Bond Municipal Index)3.54% The discount rate was based on the bond buyer general obligation 20-bond municipal index. Mortality rates were based on the RP 2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2021. The actuarial assumptions used in the December 31, 2021, valuation were based on the results of an actuarial experience study for the period of January 1, 2017 through December 31, 2019. Other demographic assumptions are set to be consistent with the actuarial assumptions reflected in the December 31, 2021, KPERS pension valuation. The changes in the total OPEB liability are as follows: City Housing Authority Airport Authority Total Balance, January 1, 2022 505,029$ 7,868$ 13,911$ 526,808$ Service cost 55,188 1,835 3,837 60,860 Interest 11,870 215 382 12,467 Effect of economic/demographic gains or losses (72,452) (1,984) (6,203) (80,639) Changes in assumptions (86,805) 11 (2,924) (89,718) Benefit payments (21,481) - - (21,481) Balance, December 31, 2022 391,349$ 7,945$ 9,003$ 408,297$ Total KPERS OPEB Liability Sensitivity of the total KPERS OPEB liability to changes in the discount rate. The following presented the total KPERS OPEB liability of the City, as well as what the City’s total KPERS OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.54%) or 1-percentage-point higher (4.54%) than the current discount rate: 1% Decrease Discount Rate 1% Increase (2.54%) (3.54%) (4.54%) Total OPEB Liability - City 409,102$ 391,349$ 373,779$ Total OPEB Liability - Housing Authority 8,117 7,945 7,718 Total OPEB Liability - Airport Authority 9,277 9,003 8,692 City of Salina, Kansas Notes to Financial Statements December 31, 2022 72 For the year ended June 30, 2022, the City recognized OPEB expense of $38,875. Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2022, the City reported deferred outflows and inflows related to other postemployment benefits from the following sources: Deferred Deferred Deferred Deferred Deferred Deferred Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of Resources Resources Resources Resources Resources Resources Differences between expected and actual experience 48,285$ (242,805)$ -$ (6,636)$ -$ (14,767)$ Changes of assumptions 31,304 (84,895) 276 (139) 699 (2,732) Total 79,589$ (327,700)$ 276$ (6,775)$ 699$ (17,499)$ City Housing Authority Airport Authority Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in OPEB expense as follows: Year Ended Housing Airport June 30,City Authority Authority 2023 (28,183)$ (914)$ (2,251)$ 2024 (28,183) (914) (2,251) 2025 (28,183) (914) (2,251) 2026 (27,878) (914) (2,243) 2027 (29,424) (909) (2,101) Thereafter (106,260) (1,934) (5,703) Total (248,111)$ (6,499)$ (16,800)$ City of Salina, Kansas Notes to Financial Statements December 31, 2022 73 Note 14: Tax Abatements 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. 2022 Company Start End % Tax Abated Salina Vortex Corp (facility improvements) 2015 2024 37.50% 3,023$ Great Plains Mfg. (facility improvements) 2014 2023 50% 2,238 Veris Technologies (facility addition/improvements) 2015 2024 50% 495 Twin Oaks (facility addition/improvements) 2015 2024 50% 647 6,403$ Abatement Tax Increment Financing (TIF). TIFs are an economic development tool established by the Kansas TIF Act (K.S.A. 12-1770 et seq.) and subject to City policy to aid in financing projects for substantial public benefit. Public benefits can include creating jobs or retaining existing employment, eliminating blight, strengthening the employment and economic base of the City, increasing property values and tax revenues, reducing poverty, creating economic stability, upgrading older neighborhoods, facilitating economic self-sufficiency, promoting projects that are of community wide importance, or implementing the economic development goals of the City. The program works by reimbursing a portion of the incremental increase in property taxes resulting from improvements and a portion of local sales tax generated within the district to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. City of Salina, Kansas Notes to Financial Statements December 31, 2022 74 To receive a TIF, applicants must submit a detailed, written proposal to the City, which will undergo due diligence and analysis before being considered by the City Commission. The City Commission then determines if it will commence the statutory process to create a redevelopment district. If the TIF district is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate TIF revenues (sales tax and/or property tax), City staff works with the distributing agency and property owner to generate and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and sales and/or property tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates TIFs on an individual basis. District Purpose Base Year Expires Sales Tax Property Tax Downtown Promote, stimulate and develop the general and economic welfare of a major commercial entertainment and tourism area 2016 2036 -$ 215,115$ Total -$ 215,115$ 2022 Reimbursements TIF Project Plans Community Improvement Districts (CID). CIDs are an economic development tool established by the Kansas CID Act (K.S.A. 12-6a26 et seq.) and subject to City policy to assist with the development of community improvements which can benefit a development and the public. In all CIDs, public improvements were financed initially by the developer and are reimbursed annually via a two percent (2%) transportation district sales tax on retail or taxable services occurring within the district. 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. City of Salina, Kansas Notes to Financial Statements December 31, 2022 75 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. 2022 Eligible Reimbursement Name Rate Start Expires Purpose AmountAssist with improvements to hotel South 9th Street 2.00% 3/1/2016 12/31/2037 and conference center 293,657$ Assist with building of family Alley 1.00% 10/1/2019 9/30/2041 entertainment facility in downtown 18,684 Assist with Revitalization of Downtown 1.00% 7/1/2019 6/30/2041 Downtown Corridor 167,356 Assist with building of downtownDowntown Hotel 1.00% 10/1/2019 9/30/2041 hotel 96,599 Assist with improvements to hotel North 9th Street 2.00% 7/1/2021 6/30/2043 and conference center 37,531 613,827$ Community Improvement District (CID) Neighborhood Revitalization Areas (NRA). NRAs are authorized under Kansas state statutes K.S.A. 12-117 and subject to City policy to spur investment and revitalization of properties which can benefit a neighborhood and the public. The program works by rebating a portion of the incremental increase in property taxes resulting from improvements back to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. Participation in the program and percentage of rebate and duration are determined separately by the City, County, and School District. The current City of Salina adopted plan is a 4- year plan running from 2015-2019. It allows for a 10-year rebate and provides rebates from 25% to 100% depending on year in plan and type of improvement. To receive an NRA, taxpayers must submit an application, which undergoes due diligence and analysis before being approved by the City. If the NRA is approved, each year, the applicant must submit proof that property taxes have been paid in full. Because the rebate is not given until after improvements are put in place and property taxes paid, there are no provisions for recapturing taxes. City of Salina, Kansas Notes to Financial Statements December 31, 2022 76 The City of Salina approves NRAs on an individual basis. 2022 Property/Business Name Address Type Rebate PaidHeritage at Hawthorne Partners 715 N. 9th Street Com 2,181$ Sergio Guzman-Polanco & Rosa Sanchez 241 N. Front Street Res 114 Overland Property Group 254 N. Santa Fe Ave Com 3,966 Yvette Gelinas 1115 N. 8th Street Res 113 Latisha Pierce 705 N. 2nd Street Res 114 Tanya Shiehzadeh 703 N. 2nd Street Res 118 Robert & Brenda Burns 1205 N. 4th Street Res 134 Property Partners LLC 116 & 118 N. Santa Fe (2nd Floor Loft Apartments) Com 818 Phill Hemmer 2035 E. Iron Avenue, Unit #203R Res 923 AP Property Holdings, LLC 201 E. Iron Avenue Com 4,992 Gregory Davis 156-158 N. 11th Street Res 287 Micheal Money 2035 E. Iron Avenue, Unit #206R Res 641 Micheal Money 2036 E. Iron Avenue, Unit #205R Res 138 Mark Martin Living Trust 2035 E. Iron #104R Res 541 Traniesh Byrd 701 N. 2nd Street Res 114 Jana Endsley 1321 N. 3rd Street Res 194 Kanesha Samilton 214 W. Grand Avenue Res 279 Maria E Padilla 810 N. 5th Street Res 277 JK Webb Properties LLC 120 S. Santa Fe Avenue Com 2,110 Alan and Nancy Franzen 1413 Arapahoe Res 187 Brandon Sears 900 N. 12th Street Res 42 Santa Fe Properties, LLC 131 N. Santa Fe Avenue/128 S. Santa Fe Avenue Com 4,527 Ceecee Investments LLC 200 S. Santa Fe Avenue Com 662 Rusty A Leister Living Trust 600 N. Santa Fe Avenue Com 2,190 Christopher Helm 608 N. 11th Street Res 81 Christopher Helm 752 N. Broadway Com 2,815 Laurie Donmyer 255 N. Columbia Res 379 Eva Wright 1200 N. 8th Res 265 Foley Equipment Co.2225 N. Ohio St Com 15,931 Mark Ritter 2035 E. Iron #108R Res 1,724 Angelica Farris 846 Choctaw Ave Res 285 Christopher Vogel 2035 E. Iron #209R Res 903 Christopher Helm 619 N. 5th Street Com 776 HPSA, LLC.501 Bhakta Court Com 5,871 Jordan Bressel 2035 E. Iron #106R Res 245 Mary C. Roth 2035 E. Iron #208R Res 1,302 John & Kristen Gunn 2035 E Iron #106R Res 1,365 TJTM, Inc.2035 E Iron #005R Res 268 TJTM, Inc.2035 E Iron #004R Res 132 TJTM, Inc.2035 E Iron #003R Res 396 TJTM, Inc.2035 E Iron #002R Res 353 TJTM, Inc.2035 E Iron #001R Res 158 TJTM, Inc.2035 E Iron #301BR Res 304 TJTM, Inc.2035 E Iron #301AR Res 175 TJTM, Inc.2035 E Iron #006R Res 394 Greg Huston &Terry Swearingen 1025 W Crawford Com 1,954 Kevin & Rebecca Poland 601 Johnstown Res 76 TJTM, Inc.2035 E Iron #202R Res 229 TJTM, Inc.2035 E Iron #302R Res 183 TJTM, Inc.2035 E Iron #105R Res 272 Timothy Rickman 719 E Ash Res 163 Troy Vancil 853 Navaho Res 66 TJTM, Inc.2035 E Iron #213C Res 79 Donnie Marrs 2035 E Iron #300R Res 969 GWM Rentals LLC 809 W Ash Res 145 Lamont Outland 201 E. Iron Avenue Res 121 Michelle Bunch 156-158 N. 11th Street Res 129 Jermaine and Tykea Polk 701 N. 2nd Street Res 152 Mary Marshall 2035 E. Iron #105R Res 106 Angela Fishburn 1219 N. 8th Street Res 108 Salina Office Station 356 N. Santa Fe Com 1,094 65,634$ Neighborhood Revitalization Act (NRA) City of Salina, Kansas Notes to Financial Statements December 31, 2022 77 Note 15: Prior Period Adjustment During 2022, construction in progress for Business-type Activities was found to be understated. The 2022 beginning net position for the Water and Sewer fund was increased by $17,275,573 for this error. Change in net position for the Business-type Activities and the Water and Sewer funds for the year ended December 31, 2021, was not impacted. Required Supplementary Information City of Salina, Kansas Other Postemployment Benefits Schedule of Changes in the City’s Total OPEB Liability and Related Ratios Last Ten Fiscal Years* 78 20222021202020192018Total OPEB LiabilityService cost282,579$ 244,531$ 231,391$ 249,957$ 226,762$ Interest (on the total OPEB liability)90,906 104,082 150,552 125,877 128,578 Benefit paid(134,193) (122,821) (159,018) (157,465) (265,000) Economic/demographic gains/losses(495,935) - (255,426) - - Changes in assumptions 160,698 231,338 128,228 (186,344) 90,918 Net Change in Total OPEB Liability (95,945) 457,130 95,727 32,025 181,258 Total OPEB Liability – Beginning4,072,184 3,615,054 3,519,327 3,487,302 3,306,044 Total OPEB Liability – Ending3,976,239$ 4,072,184$ 3,615,054$ 3,519,327$ 3,487,302$ Covered Employee Payroll25,166,069$ 25,163,639$ 25,163,639$ 25,232,129$ 24,740,225$ Total OPEB liability as a percentage ofcovered-employee payroll15.80%16.18%14.37%13.95%14.10%Actuarially determined contribution134,193$ 122,821$ 159,018$ 157,465$ 265,000$ Actual contribution134,193$ 122,821$ 159,018$ 157,465$ 265,000$ Contributions as a percentage of covered payroll0.53%0.49%0.63%0.62%1.07%Measurement Year *Data became available with the inception of GASB 75 during fiscal year 2018, therefore 10 years of data is unavailable. City of Salina, Kansas Other Postemployment Benefits - KPERS Schedule of Changes in the City’s Total OPEB Liability and Related Ratios Last Ten Fiscal Years* 79 20222021202020192018Total OPEB LiabilityService cost55,188$ 64,709$ 57,185$ 52,863$ 52,380$ Interest (on the total OPEB liability)11,870 14,404 19,037 22,667 17,061 Benefit paid(21,481) (151,608) 17,086 (95,243) 75,173 Economic/demographic gains/losses(72,452) 984 37,368 7,614 (6,574) Changes in assumptions (86,805) (20,904) (39,627) (28,432) (30,368) Net Change in Total OPEB Liability (113,680) (92,415) 91,049 (40,531) 107,672 Total OPEB Liability – Beginning505,029 597,444 506,395 546,926 439,254 Total OPEB Liability – Ending391,349$ 505,029$ 597,444$ 506,395$ 546,926$ Covered Employee Payroll13,877,624$ 12,482,683$ 14,338,983$ 13,991,543$ 13,652,194$ Total OPEB liability as a percentage ofcovered-employee payroll2.82%4.05%4.17%3.62%4.01%Actuarially determined contribution134,612$ 135,087$ 144,746$ 135,087$ 109,466$ Actual contribution134,612$ 135,087$ 144,746$ 135,087$ 109,466$ Contributions as a percentage of covered payroll0.97%1.08%1.01%0.97%0.80%Measurement Year *Data became available with the inception of GASB 75 during fiscal year 2018, therefore 10 years of data is unavailable. City of Salina, Kansas KPERS Pension Plan Schedule of the City’s Proportionate Share of the Net Pension Liability Last Ten Fiscal Years* 80 20152016201720182019202020212022City's proportion of the net pension liability Local0.764% 0.761% 0.811% 0.079% 0.796% 0.766% 0.701% 0.733% Police & Fire2.258% 2.180% 2.191% 2.081% 2.074% 2.038% 1.982% 1.878%City's proportionate share of the net pension liability Local10,027,679$ 11,770,679$ 11,753,246$ 11,014,328$ 11,123,112$ 13,290,226$ 8,409,377$ 14,581,450$ Police & Fire16,395,794$ 20,251,512$ 20,546,882$ 20,019,473$ 20,993,820$ 25,135,770$ 18,910,472$ 27,084,350$ City's covered-employee payroll Local12,931,197$ 13,251,236$ 13,548,056$ 13,944,989$ 14,366,294$ 14,948,415$ 13,436,992$ 14,200,661$ Police & Fire10,161,866$ 10,730,033$ 10,593,419$ 10,441,055$ 10,859,219$ 11,285,465$ 10,970,505$ 11,241,597$ City's proportionate share of the net pension liability as a percentage of its covered-employee payroll Local77.55% 88.83% 86.75% 78.98% 77.43% 88.91% 62.58% 102.68% Police & Fire161.35% 188.74% 193.96% 191.74% 193.33% 222.73% 172.38% 240.93%Plan fiduciary net position as apercentage of the total pension liability Local71.98% 68.55% 72.15% 74.22% 75.02% 70.77% 81.14% 70.66% Police & Fire74.60% 69.30% 70.99% 71.53% 71.22% 66.81% 76.09% 66.12%Measurement Year *The amounts presented for each fiscal year were determined as of December 31. Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. City of Salina, Kansas KPERS Pension Plan Schedule of the City’s Proportionate Share of the Net Pension Liability Last Ten Fiscal Years* 81 20152016201720182019202020212022Contractually required contribution Local1,256,217$ 1,243,711$ 1,179,745$ 1,205,334$ 1,328,915$ 1,156,925$ 1,259,601$ 1,309,782$ Police & Fire2,527,995 2,361,273 1,986,933 2,181,617 2,497,473 2,405,832 2,563,084 2,553,522 Contributions in relation to the contractually required contribution Local1,256,217 1,243,711 1,179,745 1,205,334 1,328,915 1,156,925 1,259,601 1,309,782 Police & Fire2,527,995 2,361,273 1,986,933 2,181,617 2,497,473 2,405,832 2,563,084 2,553,522 Contribution deficiency (excess)- - - - - - - - City's covered-employee payroll Local13,251,236$ 13,548,056$ 13,944,989$ 14,366,294$ 14,948,415$ 13,436,992$ 14,200,661$ 14,716,651$ Police & Fire10,730,033$ 10,593,419$ 10,441,055$ 10,859,219$ 11,285,465$ 10,970,505$ 11,241,597$ 11,107,098$ Contributions as a percentage of covered employee payroll Local9.48%9.18%8.46%8.39%8.89%8.61%8.87%8.90% Police & Fire23.56%22.29%19.03%20.09%22.13%21.93%22.80%22.99% *Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. Combining Schedules and Individual Fund Statements City of Salina, Kansas Combining Balance Sheet Nonmajor Governmental Funds December 31, 2022 82 Total Total Nonmajor Total Nonmajor Nonmajor Debt Nonmajor Special Revenue Permanent Service Governmental Funds Funds Fund Funds Assets Cash and investments 15,889,341$ 548,172$ -$ 16,437,513$ Receivables Accounts 3,069,338 - - 3,069,338 Total assets 18,958,679 548,172 - 19,506,851 Liabilities and Fund Balances Accounts payable 919,900 - - 919,900 Accrued expenditures 14,559 - - 14,559 Unearned revenue - - - - Due to other funds 20,000 - - 20,000 Total liabilities 954,459 - - 954,459 Fund Balances Restricted 3,937,773 - - 3,937,773 Committed 11,900,011 548,172 - 12,448,183 Assigned 2,166,424 - - 2,166,424 Unassigned 12 - - 12 Total fund balances 18,004,220 548,172 - 18,552,392 Total liabilities and fund balances 18,958,679$ 548,172$ -$ 19,506,851$ City of Salina, Kansas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended December 31, 2022 83 Total Total Nonmajor Total Nonmajor Nonmajor Debt Nonmajor Special Revenue Permanent Service Governmental Funds Funds Fund Funds Revenues Taxes 4,543,388$ -$ -$ 4,543,388$ Intergovernmental 2,740,030 - - 2,740,030 Charges for services 954,184 12,602 - 966,786 Licenses and permits 14,600 - - 14,600 Investment revenue 42,378 1,982 - 44,360 Donations 104,558 - - 104,558 Miscellaneous 697,126 - - 697,126 Total revenues 9,096,264 14,584 - 9,110,848 Expenditures Current Culture and recreation 2,273,867 - - 2,273,867 Public safety 697,328 - - 697,328 Public health and sanitation 313,223 - - 313,223 Planning and development 2,047,963 - - 2,047,963 Miscellaneous 10,000 25,388 800 36,188 Debt Service - Interest and other charges 200,129 - - 200,129 Capital Outlay 6,084,394 - - 6,084,394 Total expenditures 11,626,904 25,388 800 11,653,092 Deficiency of revenues under expenditures (2,530,640) (10,804) (800) (2,542,244) Other Financing Sources (Uses) Transfers in 10,000,711 - - 10,000,711 Transfers out (902,791) - - (902,791) Total other financing sources (uses)9,097,920 - - 9,097,920 Net Change in Fund Balances 6,567,280 (10,804) (800) 6,555,676 Fund Balances, Beginning 11,436,940 558,976 800 11,996,716 Fund Balances, Ending 18,004,220$ 548,172$ -$ 18,552,392$ City of Salina, Kansas Combining Balance Sheet Nonmajor Governmental Funds December 31, 2022 84 TourismBusiness Special Community Sales Tax Downtown andSpecial Bicentennial Improvement Neighborhood Parks &Special Development Economic TIF SouthConventionGasCenterDistrictParkRecreation Alcohol Revolving Development District #1 9th CIDAssetsCash and cash equivalents316,830$ 2,901,387$ 447,078$ 6,651$ 47,821$ 484,334$ 234$ 186,307$ 897,844$ 1,705,824$ 27,933$ Receivables Accounts723,614369,446- - - - - - - - - Total assets1,040,444 3,270,833 447,078 6,651 47,821 484,334 234 186,307 897,844 1,705,824 27,933 Liabilities and fund balancesLiabilities:Accounts payable- 204,846 210,472 2,960 1,380 - - - - - - Accrued expenditures- - - - - - - - - - - Unearned revenue- - - - - - - - - - - Due to other funds- - - - - - - - - - - Total liabilities- 204,846 210,472 2,960 1,380 - - - - - - Fund balances:Restricted1,040,444 2,246,841 - 3,691 - 432,161 234 186,307 - - - Committed- - 203,087 46,441 - - - 897,844 1,705,824 27,933 Assigned- 819,14633,519- - 52,173- - - - - Unassigned- - - - - - - - - - - Total fund balances1,040,444 3,065,987 236,606 3,691 46,441 484,334 234 186,307 897,844 1,705,824 27,933 Total liabilities and fund balances1,040,444$ 3,270,833$ 447,078$ 6,651$ 47,821$ 484,334$ 234$ 186,307$ 897,844$ 1,705,824$ 27,933$ City of Salina, Kansas Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2022 85 Kenwood SpecialDowntown Alley Downtown North 9th STAR Bonds State 911 CoveLaw Police CID CID Hotel CID CID Subprojects Grants Communications Capital Enforcement GrantsAssetsCash and cash equivalents 470,426$ 1,405$ 7,933$ 3,383$ 2,000,000$ 248,460$ 626,865$ 70,053$ 82$ 3,479$ Receivables Accounts - - - - - - - - - - Total assets 470,426 1,405 7,933 3,383 2,000,000 248,460 626,865 70,053 82 3,479 Liabilities and fund balancesLiabilities:Accounts payable 19,393 1,405 7,931 - - - 6,551 137 - - Accrued expenditures - - - - - - - - - - Unearned revenue - - - - - - - - - - Due to other funds - - - - - - - - - - Total liabilities 19,393 1,405 7,931 - - - 6,551 137 - - Fund balances:Restricted - - - - - - - - - - Committed451,033 - 2 3,383 2,000,000 248,460 571,299 68,631 82 3,479 Assigned- - - - - - 49,0151,285- - Unassigned- - - - - - - - - - Total fund balances451,033 - 2 3,383 2,000,000 248,460 620,314 69,916 82 3,479 Total liabilities and fund balances470,426$ 1,405$ 7,933$ 3,383$ 2,000,000$ 248,460$ 626,865$ 70,053$ 82$ 3,479$ City of Salina, Kansas Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2022 86 PoliceWar Federal Department Animal Special Court SFH D.A.R.E Memorial Arts & CARE Federal Homeowners' Private Shelter Assessments Bond andQalicB Donations Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Escrow RestitutionAssetsCash and cash equivalents 185,087$ 29,485$ 30,944$ 107,400$ 26,141$ 99$ 21,910$ 1,954$ 601,320$ 116,682$ 26,840$ Receivables Accounts 1,975,778 500 - - - - - - - - - Total assets 2,160,865 29,985 30,944 107,400 26,141 99 21,910 1,954 601,320 116,682 26,840 Liabilities and fund balancesLiabilities:Accounts payable 13,823 - - 4,269 - - - - 458 - - Accrued expenditures - - - 14,559 - - - - - - - Unearned revenue - - - - - - - - - - - Due to other funds 20,000 - - - - - - - - - - Total liabilities 33,823 - - 18,828 - - - - 458 - - Fund balances:Restricted- - - - 26,141 - - 1,954 - - - Committed2,127,042 29,985 30,944 88,572 - 99 21,910 - 600,862 116,682 26,840 Assigned- - - - - - - - - - - Unassigned- - - - - - - - - - - Total fund balances2,127,042 29,985 30,944 88,572 26,141 99 21,910 1,954 600,862 116,682 26,840 Total liabilities and fund balances2,160,865$ 29,985$ 30,944$ 107,400$ 26,141$ 99$ 21,910$ 1,954$ 601,320$ 116,682$ 26,840$ City of Salina, Kansas Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2022 87 Police Beechcraft Bail Building andInvestigation DTF DTF Remediation Bond Parks Fleet Street FacilitiesAccount Citizenship Local Reserve Settlement Escrow Maintenance Management Maintenance Maintenance TotalsAssetsCash and cash equivalents 3,385$ 70,160$ 29,692$ 53,401$ 12$ 1,135$ 1,368,266$ 735,084$ 1,288,814$ 737,201$ 15,889,341$ Receivables Accounts - - - - - - - - - - 3,069,338 Total assets 3,385 70,160 29,692 53,401 12 1,135 1,368,266 735,084 1,288,814 737,201 18,958,679 Liabilities and fund balancesLiabilities:Accounts payable - - 4,209 - - - 13,265 - 379,322 49,479 919,900 Accrued expenditures - - - - - - - - - - 14,559 Unearned revenue - - - - - - - - - - - Due to other funds - - - - - - - - - - 20,000 Total liabilities - - 4,209 - - - 13,265 - 379,322 49,479 954,459 Fund balances:Restricted- - - - - - - - - - 3,937,773 Committed3,385 70,160 25,483 53,401 - 1,135 917,638 735,084 236,001 587,290 11,900,011 Assigned- - - - - - 437,363- 673,491100,432 2,166,424 Unassigned- - - - 12 - - - - - 12 Total fund balances3,385 70,160 25,483 53,401 12 1,135 1,355,001 735,084 909,492 687,722 18,004,220 Total liabilities and fund balances3,385$ 70,160$ 29,692$ 53,401$ 12$ 1,135$ 1,368,266$ 735,084$ 1,288,814$ 737,201$ 18,958,679$ City of Salina, Kansas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended December 31, 2022 88 TourismBusinessSpecialCommunity Sales Tax DowntownandSpecial Bicentennial Improvement Neighborhood Parks & Special Development Economic TIFSouth Convention GasCenterDistrictPark Recreation Alcohol Revolving Development District #1 9th CIDRevenuesTaxes 2,453,194$ -$ -$ -$ -$ -$ -$ -$ 423,490$ 850,345$ 285,121$ Intergovernmental - 1,444,399 - - - 259,238 259,238 - - - - Charges for services - - - 86,833 - - - - - - - Licenses and permits - - - - 14,600 - - - - - - Investment revenue - - - - - - - - - 3,903 70 Donations - - - - - - - - - - - Miscellaneous - 93,830 38,979 - - - - - - - 14,530 Total revenues 2,453,194 1,538,229 38,979 86,833 14,600 259,238 259,238 - 423,490 854,248 299,721 ExpendituresCurrentCulture and recreation - - 1,316,597 - - - - - - - - Public safety- 440,495 - - - - - - - - - Public health and sanitation- - - - - - 259,238 - - - - Planning and development1,113,444 - - 83,720 - - - - - 245,058 273,506 MiscellaneousCapital Outlay- 553,684 - - 12,280 257,847 - - 373,001 - - Interest and other charges Total expenditures1,113,444 994,179 1,316,597 83,720 12,280 257,847 259,238 - 373,001 245,058 273,506 Excess (deficiency) of revenuesover (under) expenditures1,339,750 544,050 (1,277,618) 3,113 2,320 1,391 - - 50,489 609,190 26,215 Other Financing Sources (Uses)Transfers in- 160,000 861,861 - - - - - 750,000 - - Transfers out(902,791) - - - - - - - - - - Total other financing sources (uses)(902,791) 160,000 861,861 - - - - - 750,000 - - Net Change in Fund Balances436,959 704,050 (415,757) 3,113 2,320 1,391 - - 800,489 609,190 26,215 Fund Balances, Beginning603,485 2,361,937 652,363 578 44,121 482,943 234 186,307 97,355 1,096,634 1,718 Fund Balances, Ending1,040,444$ 3,065,987$ 236,606$ 3,691$ 46,441$ 484,334$ 234$ 186,307$ 897,844$ 1,705,824$ 27,933$ City of Salina, Kansas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds For the Year Ended December 31, 2022 89 Kenwood SpecialDowntown Alley Downtown North 9th STAR Bonds State 911 Cove Law PoliceCID CID Hotel CID CID Subprojects Grants Communications Capital Enforcement GrantsRevenuesTaxes387,042$ 18,321$ 87,578$ 38,297$ -$ -$ -$ -$ -$ -$ Intergovernmental- - - - - 380,577 396,578 - - - Charges for services- - - - - - - - - - Licenses and permits- - - - - - - - - - Investment revenue937 3 19 - - - 1,417 - - - Donations- - - - - - - - - - Miscellaneous- - - - 73,168 - - - - - Total revenues387,979 18,324 87,597 38,297 73,168 380,577 397,995 - - - ExpendituresCurrentCulture and recreation- - - - - - - - - - Public safety- - - - - - 232,864 - - - Public health and sanitation- - - - - - - - - - Planning and development117,320 18,327 148,247 34,914 - - - - - - MiscellaneousCapital Outlay- - - - 73,168 350,000 - 56,402 - - Interest and other charges Total expenditures117,320 18,327 148,247 34,914 73,168 350,000 232,864 56,402 - - Excess (deficiency) of revenuesover (under) expenditures270,659 (3) (60,650) 3,383 - 30,577 165,131 (56,402) - - Other Financing Sources (Uses)Transfers in- - - - - - - 68,350 - - Transfers out- - - - - - - - - - Total other financing sources (uses)- - - - - - - 68,350 - - Net Change in Fund Balances270,659 (3) (60,650) 3,383 - 30,577 165,131 11,948 - - Fund Balances, Beginning180,374 3 60,652 - 2,000,000 217,883 455,183 57,968 82 3,479 Fund Balances, Ending451,033$ -$ 2$ 3,383$ 2,000,000$ 248,460$ 620,314$ 69,916$ 82$ 3,479$ City of Salina, Kansas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds For the Year Ended December 31, 2022 90 PoliceWar Federal Department Animal Special Court SFH DARE Memorial Arts & CARE Federal Homeowners' Private Shelter Assessments Bond andQalicB Donations Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Escrow RestitutionRevenuesTaxes -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Intergovernmental - - - - - - - - - - - Charges for services 492,917 - - 374,434 - - - - - - - Licenses and permits - - - - - - - - - - - Investment revenue 795 - 71 - - - - - - - - Donations - - - - - - - - 104,558 - - Miscellaneous - 1,525 - - - - 1,315 - - - - Total revenues 493,712 1,525 71 374,434 - - 1,315 - 104,558 - - ExpendituresCurrentCulture and recreation - - - 957,270 - - - - - - - Public safety- - - - - - - - - - - Public health and sanitation- - - - - - - - 53,985 - - Planning and development- 3,427 - - - - - 10,000 - - - Miscellaneous10,000 Capital Outlay- - - - - - - - - - - Interest and other charges200,129 Total expenditures210,129 3,427 - 957,270 - - - 10,000 53,985 - - Excess (deficiency) of revenuesover (under) expenditures283,583 (1,902) 71 (582,836) - - 1,315 (10,000) 50,573 - - Other Financing Sources (Uses)Transfers in- - - 520,000 - - - - - - - Transfers out- - - - - - - - - - - Total other financing sources (uses)- - - 520,000 - - - - - - - Net Change in Fund Balances283,583 (1,902) 71 (62,836) - - 1,315 (10,000) 50,573 - - Fund Balances, Beginning1,843,459 31,887 30,873 151,408 26,141 99 20,595 11,954 550,289 116,682 26,840 Fund Balances, Ending2,127,042$ 29,985$ 30,944$ 88,572$ 26,141$ 99$ 21,910$ 1,954$ 600,862$ 116,682$ 26,840$ City of Salina, Kansas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds For the Year Ended December 31, 2022 91 TotalPolice Beechcraft BailBuilding andNonmajorInvestigation DTF DTF Remediation BondParksFleet Street FacilitiesGovernmental Account Citizenship Local Reserve Settlement EscrowMaintenance Management Maintenance MaintenanceFundsRevenuesTaxes -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 4,543,388$ Intergovernmental - - - - - - - - - - 2,740,030 Charges for services - - - - - - - - - - 954,184 Licenses and permits - - - - - - - - - - 14,600 Investment revenue - 35,085 - - 78 - - - - - 42,378 Donations - - - - - - - - - - 104,558 Miscellaneous - - 22,296 5,678 - - - 2,415 443,390 - 697,126 Total revenues - 35,085 22,296 5,678 78 - - 2,415 443,390 - 9,096,264 ExpendituresCurrentCulture and recreation - - - - - - - - - - 2,273,867 Public safety- - 23,969 - - - - - - - 697,328 Public health and sanitation- - - - - - - - - - 313,223 Planning and development- - - - - - - - - - 2,047,963 Miscellaneous10,000 Capital Outlay- 9,006 - - - - 664,999 267,331 3,283,898 182,778 6,084,394 Interest and other charges200,129 Total expenditures- 9,006 23,969 - - - 664,999 267,331 3,283,898 182,778 11,626,904 Excess (deficiency) of revenuesover (under) expenditures- 26,079 (1,673) 5,678 78 - (664,999) (264,916) (2,840,508) (182,778) (2,530,640) Other Financing Sources (Uses)Transfers in- - - - - - 2,020,000 1,000,000 3,750,000 870,500 10,000,711 Transfers out- - - - - - - - - - (902,791) Total other financing sources (uses)- - - - - - 2,020,000 1,000,000 3,750,000 870,500 9,097,920 Net Change in Fund Balances- 26,079 (1,673) 5,678 78 - 1,355,001 735,084 909,492 687,722 6,567,280 Fund Balances, Beginning3,385 44,081 27,156 47,723 (66) 1,135 - - - - 11,436,940 Fund Balances, Ending3,385$ 70,160$ 25,483$ 53,401$ 12$ 1,135$ 1,355,001$ 735,084$ 909,492$ 687,722$ 18,004,220$ City of Salina, Kansas Combining Balance Sheet Nonmajor Permanent Funds December 31, 2022 92 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Total Assets Cash and investments 546,085$ 2,085$ 2$ 548,172$ Total assets 546,085 2,085 2 548,172 Liabilities and fund balances Liabilities: Accounts payable - - - - Total liabilities - - - - Fund balances: Committed 546,085 2,085 2 548,172 Total liabilities and fund balances 546,085$ 2,085$ 2$ 548,172$ City of Salina, Kansas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Permanent Funds For the Year Ended December 31, 2022 93 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Total Revenues Charges for services 12,602$ -$ -$ 12,602$ Investment revenue 1,962 12 8 1,982 Total revenues 14,564 12 8 14,584 Expenditures Miscellaneous 19,459 - 5,929 25,388 Total expenditures 19,459 - 5,929 25,388 Net change in fund balances (4,895) 12 (5,921) (10,804) Fund balances - beginning of year 550,980 2,073 5,923 558,976 Fund balances - end of year 546,085$ 2,085$ 2$ 548,172$ City of Salina, Kansas Internal Service Funds 94 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. City of Salina, Kansas Combining Statement of Net Position Internal Service Funds December 31, 2022 95 Workers'Central Compensation Health Garage and Reserve Insurance Maintenance Total Current assets: Cash and investments 1,077,472$ 3,855,846$ 339,078$ 5,272,396$ Inventory and prepaid supplies - - 110,905 110,905 Total current assets 1,077,472 3,855,846 449,983 5,383,301 Capital assets - - 168,234 168,234 Less: accumulated depreciation - - 154,325 154,325 Total capital assets - - 13,909 13,909 Total assets 1,077,472 3,855,846 463,892 5,397,210 Deferred outflows of resources: KPERS OPEB deferred outflows of resources - - 729 729 Pension deferred outflows of resources - - 50,723 50,723 Total deferred outflows of resources - - 51,452 51,452 Total assets and deferred outflows of resources 1,077,472 3,855,846 515,344 5,448,662 Current liabilities: Accounts payable 124 - 60,364 60,488 Accrued expenses - 23,801 8,659 32,460 Current portion of compensated absences payable - - 7,407 7,407 Current portion of accrued claims payable 16,944 405,000 - 421,944 Total current liabilities 17,068 428,801 76,430 522,299 Noncurrent liabilities: Compensated absences payable - - 9,206 9,206 Accrued claims payable - - - - Net KPERS OPEB obligation - - 6,574 6,574 Net pension liability - - 161,523 161,523 Total noncurrent liabilities - - 177,303 177,303 Total liabilities 17,068 428,801 253,733 699,602 Deferred inflows of resources KPERS OPEB deferred inflows of resources - - 5,505 5,505 Pension deferred inflows of resources - - 14,518 14,518 Total deferred inflows of resources - - 20,023 20,023 Total liabilities and deferred inflows of resources 17,068 428,801 273,756 719,625 Net Position Net investment in capital assets, net of related debt - - 13,909 13,909 Unrestricted 1,060,404 3,427,045 227,679 4,715,128 Total net position 1,060,404$ 3,427,045$ 241,588$ 4,729,037$ City of Salina, Kansas Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds For the Year Ended December 31, 2022 96 Workers' Central Compensation Health Garage and Reserve Insurance Maintenance Total Operating Revenues Charges for services 250,000$ 6,220,586$ 1,552,263$ 8,022,849$ Miscellaneous 1,203 23,899 1,121 26,223 Total operating revenues 251,203 6,244,485 1,553,384 8,049,072 Operating Expenses General government (104,788) 6,254,166 1,759,268 7,908,646 Depreciation - - - - Total operating expenses (104,788) 6,254,166 1,759,268 7,908,646 Income (loss) before transfers 355,991 (9,681) (205,884) 140,426 Transfers in - - 80,000 80,000 Change in net position 355,991 (9,681) (125,884) 220,426 Net Position, Beginning 704,413 3,436,726 367,472 4,508,611 Net Position, Ending 1,060,404$ 3,427,045$ 241,588$ 4,729,037$ City of Salina, Kansas Combining Statement of Cash Flows Internal Service Funds For the Year Ended December 31, 2022 97 Workers' Compensation Health Central Reserve Insurance Garage Total Operating Activities Cash received from customers and users 250,000$ 6,220,586$ 1,552,263$ 8,022,849$ Cash paid to suppliers of goods and services (244,941) (6,266,166) (1,762,048) (8,273,155) Cash paid to employees - 23,801 (9,305) 14,496 Other operating receipts 1,203 23,899 1,121 26,223 Net cash provided by (used in) operating activities 6,262 2,120 (217,969) (209,587) Noncapital Financing ActivitiesTransfers in - - 80,000 80,000 Net cash provided by noncapital financing activities - - 80,000 80,000 Net increase (decrease) in cash and cash equivalents 6,262 2,120 (137,969) (129,587) Cash and Cash Equivalents, Beginning of Year 1,071,210 3,853,726 477,047 5,401,983 Cash and Cash Equivalents, End of Year 1,077,472$ 3,855,846$ 339,078$ 5,272,396$ Reconciliation of Operating Income (Loss) to Net CashProvided by (Used in) Operating Activities Operating income (loss) 355,991$ (9,681)$ (205,884)$ 140,426$ Adjustment to reconcile operating income (loss) to net cashprovided by (used in) operating activities: Depreciation expense - - - - (Increase) decrease in prepaids - - 25,470 25,470 (Increase) decrease in deferred outflows - - (13,376) (13,376) Increase (decrease) in accounts payable 124 - (19,591) (19,467) Increase (decrease) in accrued and claims payable (180,863) 11,801 - (169,062) Increase (decrease) in accrued compensated absences (168,990) - (7,449) (176,439) Increase (decrease) in net pension liability - - 55,614 55,614 Increase (decrease) in KPERS OPEB liability - - (1,910) (1,910) Increase (decrease) in claims payable - - - - Increase (decrease) in deferred inflows - - (50,843) (50,843) Total adjustments (349,729) 11,801 (12,085) (350,013) Net cash provided by (used in) operating activities 6,262$ 2,120$ (217,969)$ (209,587)$ City of Salina, Kansas Budget Comparison Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Non - GAAP Basis) Tourism and Convention Fund For the Year Ended December 31, 2022 98 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Taxes Other taxes 1,754,000$ 2,333,000$ 2,453,194$ 120,194$ Total revenues 1,754,000 2,333,000 2,453,194 120,194 Expenditures Current Planning and development 841,920 1,119,840 1,113,444 6,396 Total expenditures 841,920 1,119,840 1,113,444 6,396 Excess (deficiency) of revenues over (under) expenditures 912,080 1,213,160 1,339,750 126,590 Other Financing Sources (Uses) Transfers (out)(912,080) (1,213,160) (902,791) 310,369 Total other financing sources (uses) (912,080) (1,213,160) (902,791) 310,369 Net Change in Fund Balance - - 436,959 436,959 Fund Balance, Beginning 853 853 603,485 602,632 Fund Balance, Ending 853$ 853$ 1,040,444$ 1,039,591$ City of Salina, Kansas Budget Comparison Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Non - GAAP Basis) Special Gas Fund For the Year Ended December 31, 2022 99 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Taxes Intergovernmental 1,323,000$ 1,323,000$ 1,444,399$ 121,399$ Miscellaneous 433,000 433,000 93,830 (339,170) Total revenues 1,756,000 1,756,000 1,538,229 (217,771) Expenditures Current Public works 486,950 486,950 440,495 46,455 Capital outlay 2,386,243 2,386,243 553,684 1,832,559 Total expenditures 2,873,193 2,873,193 994,179 1,879,014 Excess (deficiency) of revenues over (under) expenditures (1,117,193) (1,117,193) 544,050 1,661,243 Other Financing Sources (Uses) Transfers in 160,000 160,000 160,000 - Total other financing sources (uses) 160,000 160,000 160,000 - Net Change in Fund Balance (957,193) (957,193) 704,050 1,661,243 Fund Balance, Beginning 2,361,937 2,361,937 2,361,937 - Fund Balance, Ending 1,404,744$ 1,404,744$ 3,065,987$ 1,661,243$ 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, 2022 100 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Miscellaneous -$ 38,000$ 38,979$ 979$ Total revenues - 38,000 38,979 979 Expenditures Current Culture and recreation 925,000 1,350,000 1,316,597 33,403 Total expenditures 925,000 1,350,000 1,316,597 33,403 Excess (deficiency) of revenues over (under) expenditures (925,000) (1,312,000) (1,277,618) 34,382 Other Financing Sources (Uses) Transfers in 710,400 862,000 861,861 (139) Total other financing sources (uses) 710,400 862,000 861,861 (139) Net Change in Fund Balance (214,600) (450,000) (415,757) 34,243 Fund Balance, Beginning 396,628 643,173 652,363 9,190 Fund Balance, Ending 182,028$ 193,173$ 236,606$ 43,433$ 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, 2022 101 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Charges for services 90,000$ 90,000$ 86,833$ (3,167)$ Total revenues 90,000 90,000 86,833 (3,167) Expenditures Current Planning and development 90,000 90,000 83,720 6,280 Total expenditures 90,000 90,000 83,720 6,280 Excess (deficiency) of revenues over (under) expenditures - - 3,113 3,113 Net Change in Fund Balance - - 3,113 3,113 Fund Balance, Beginning 578 578 578 - Fund Balance, Ending 578$ 578$ 3,691$ 3,113$ 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, 2022 102 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Licenses and permits 5,000$ 15,000$ 14,600$ (400)$ Total revenues 5,000 15,000 14,600 (400) Expenditures Capital Outlay 10,000 15,000 12,280 2,720 Total expenditures 10,000 15,000 12,280 2,720 Excess (deficiency) of revenues over (under) expenditures (5,000) - 2,320 2,320 Net Change in Fund Balance (5,000) - 2,320 2,320 Fund Balance, Beginning 28,321 44,120 44,121 1 Fund Balance, Ending 23,321$ 44,120$ 46,441$ 2,321$ 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, 2022 103 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Intergovernmental 174,000$ 174,000$ 259,238$ 85,238$ Total revenues 174,000 174,000 259,238 85,238 Expenditures Capital Outlay 174,000 174,000 81,750 92,250 Total expenditures 174,000 174,000 81,750 92,250 Excess (deficiency) of revenues over (under) expenditures - - 177,488 177,488 Net Change in Fund Balance - - 177,488 177,488 Fund Balance, Beginning 482,943 482,943 482,943 - Fund Balance, Ending 482,943$ 482,943$ 660,431$ 177,488$ Reconcilation to GAAP Current year encumbrances (176,097) GAAP Net Change in Fund Balance 1,391$ 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, 2022 104 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Intergovernmental 174,000$ 275,000$ 259,238$ (15,762)$ Total revenues 174,000 275,000 259,238 (15,762) Expenditures Current Public health and sanitation 174,000 275,000 259,238 15,762 Total expenditures 174,000 275,000 259,238 15,762 Excess (deficiency) of revenues over (under) expenditures - - - - Net Change in Fund Balance - - - - Fund Balance, Beginning 234 234 234 - Fund Balance, Ending 234$ 234$ 234$ -$ 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, 2022 105 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Taxes 366,000$ 366,000$ 423,490$ 57,490$ Total revenues 366,000 366,000 423,490 57,490 Expenditures Capital Outlay 1,045,000 1,045,000 373,001 671,999 Total expenditures 1,045,000 1,045,000 373,001 671,999 Excess (deficiency) of revenues over (under) expenditures (679,000) (679,000) 50,489 729,489 Other Financing Sources (Uses) Transfers in 750,000 750,000 750,000 - Total other financing sources (uses)750,000 750,000 750,000 - Net Change in Fund Balance 71,000 71,000 800,489 729,489 Fund Balance, Beginning 97,355 97,355 97,355 - Fund Balance, Ending 168,355$ 168,355$ 897,844$ 729,489$ 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, 2022 106 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Charges for services 326,000$ 326,000$ 374,434$ 48,434$ Miscellaneous 37,000 37,000 - (37,000) Total revenues 363,000 363,000 374,434 11,434 Expenditures Current Culture and recreation 993,017 993,017 957,270 35,747 Total expenditures 993,017 993,017 957,270 35,747 Excess (deficiency) of revenues over (under) expenditures (630,017) (630,017) (582,836) 47,181 Other Financing Sources (Uses) Transfers in 645,500 645,500 520,000 (125,500) Total other financing sources (uses) 645,500 645,500 520,000 (125,500) Net Change in Fund Balance 15,483 15,483 (62,836) (78,319) Fund Balance, Beginning 151,408 151,408 151,408 - Fund Balance, Ending 166,891$ 166,891$ 88,572$ (78,319)$ 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, 2022 107 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Taxes Real estate taxes 3,342,920$ 3,342,920$ 2,991,642$ (351,278)$ Delinquent taxes 50,000 50,000 33,912 (16,088) Motor vehicle taxes 358,394 358,394 361,121 2,727 Special assessments 1,435,600 1,435,600 1,409,833 (25,767) Total revenues 5,186,914 5,186,914 4,968,707 (218,207) Expenditures Debt service Principal retirement 4,712,000 4,712,000 5,005,734 (293,734) Interest and other charges 1,989,000 1,989,000 1,804,561 184,439 Total expenditures 6,701,000 6,701,000 6,810,295 (109,295) Excess (deficiency) of revenues over (under) expenditures (1,514,086) (1,514,086) (1,841,588) (327,502) Other Financing Sources (Uses) Transfers in 1,625,000 1,625,000 1,925,930 300,930 Total other financing sources (uses) 1,625,000 1,625,000 1,925,930 300,930 Net Change in Fund Balance 110,914 110,914 84,342 (26,572) Fund Balance, Beginning 2,111,664 2,111,664 2,111,664 - Fund Balance, Ending 2,222,578$ 2,222,578$ 2,196,006$ (26,572)$ City of Salina, Kansas Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Non – GAAP Basis) Solid Waste Disposal Fund For the Year Ended December 31, 2022 108 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Charges for services 2,454,000$ 3,150,000$ 4,047,428$ 897,428$ Miscellaneous - - 51,972 51,972 Total revenues 2,454,000 3,150,000 4,099,400 949,400 Expenditures Public works 2,331,442 2,681,439 639,495 2,041,944 Total expenditures 2,331,442 2,681,439 773,737 1,907,702 Excess (deficiency) of revenues over (under) expenditures 122,558 468,561 3,325,663 2,857,102 Other financing sources (uses) Accretion of board premium - - 24,078 24,078 Interest expense (57,268) (57,268) (38,071) 19,197 Transfers in 612,000 650,000 42,500 (607,500) Transfers (out)(636,700) (636,700) (701,700) (65,000) Total other financing sources (uses)(81,968) (43,968) (673,193) (629,225) Net Change in Fund Balance 40,590 424,593 2,652,470 2,227,877 Fund Balance, Beginning 5,429,823 6,225,330 5,666,666 (558,664) Fund Balance, Ending 5,470,413$ 6,649,923$ 8,319,136$ 1,669,213$ City of Salina, Kansas Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Non – GAAP Basis) Water and Sewer Fund For the Year Ended December 31, 2022 109 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Charges for services 19,964,700$ 19,964,700$ 21,839,834$ 1,875,134$ Miscellaneous 4,000 4,000 2,902,407 2,898,407 Total revenues 19,968,700 19,968,700 24,742,241 4,773,541 Expenditures Public works 18,966,281 18,966,281 10,883,710 8,082,571 Depreciation - - 3,711,786 (3,711,786) Total expenditures 18,966,281 18,966,281 14,595,496 4,370,785 Excess (deficiency) of revenues over (under) expenditures 1,002,419 1,002,419 10,146,745 9,144,326 Other financing sources (uses) Accretion of board premium - - 81,336 81,336 Interest expense - - (1,370,866) (1,370,866) Transfers in 144,400 144,400 5,178,672 5,034,272 Transfers (out)(5,343,790) (5,343,790) (9,068,422) (3,724,632) Total other financing sources (uses) (5,199,390) (5,199,390) (5,179,280) 20,110 Net Change in Fund Balance (4,196,971) (4,196,971) 4,967,465 9,164,436 Fund Balance, Beginning 102,959,063 102,959,063 102,959,063 - Fund Balance, Ending 98,762,092$ 98,762,092$ 107,926,528$ 9,164,436$ City of Salina, Kansas Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Non – GAAP Basis) Sanitation Fund For the Year Ended December 31, 2022 110 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Charges for services 3,229,000$ 3,229,000$ 3,474,084$ 245,084$ Total revenues 3,229,000 3,229,000 3,474,114 245,114 Expenditures Public works 2,771,622 2,771,622 2,516,563 255,059 Total expenditures 2,771,622 2,771,622 2,675,420 96,202 Excess (deficiency) of revenues over (under) expenditures 457,378 457,378 798,694 341,316 Other financing sources (uses) Transfers (out)(619,454) (619,454) (497,350) 122,104 Total other financing sources (uses) (619,454) (619,454) (497,350) 122,104 Net Change in Fund Balance (162,076) (162,076) 301,344 463,420 Fund Balance, Beginning 1,862,045 1,862,045 1,862,045 - Fund Balance, Ending 1,699,969$ 1,699,969$ 2,163,389$ 463,420$ City of Salina, Kansas Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Non – GAAP Basis) Golf Course Fund For the Year Ended December 31, 2022 111 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Charges for services 882,000$ 882,000$ 784,528$ (97,472)$ Total revenues 882,000 882,000 857,376 (24,624) Expenditures Recreation 850,110 971,110 870,812 100,298 Total expenditures 850,110 971,110 915,796 55,314 Excess (deficiency) of revenues over (under) expenditures 31,890 (89,110) (58,420) 30,690 Other financing sources (uses) Transfers in - 10,000 10,000 - Total other financing sources (uses) - 10,000 10,000 - Net Change in Fund Balance 31,890 (79,110) (48,420) 30,690 Fund Balance, Beginning 51,692 80,898 317,306 236,408 Fund Balance, Ending 83,582$ 1,788$ 268,886$ 267,098$ 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, 2022 112 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Charges for services 250,000$ 250,000$ 250,000$ -$ Miscellaneous 100 100 1,203 1,103 Total revenues 250,100 250,100 251,203 1,103 Expenditures General government 430,418 430,418 (104,788) 535,206 Total expenditures 430,418 430,418 (104,788) 535,206 Excess (deficiency) of revenues over (under) expenditures (180,318) (180,318) 355,991 536,309 Other financing sources (uses) Transfers in - - - - Transfers (out)- - - - Total other financing sources (uses) - - - - Net Change in Fund Balance (180,318) (180,318) 355,991 536,309 Fund Balance, Beginning 704,413 704,413 704,413 - Fund Balance, Ending 524,095$ 524,095$ 1,060,404$ 536,309$ 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, 2022 113 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Charges for services 7,268,999$ 7,268,999$ 6,220,586$ (1,048,413)$ Miscellaneous 49,500 49,500 23,899 (25,601) Total revenues 7,318,499 7,318,499 6,244,485 (1,074,014) Expenditures General government 7,136,300 7,136,300 6,254,166 882,134 Total expenditures 7,136,300 7,136,300 6,254,166 882,134 Excess (deficiency) of revenues over (under) expenditures 182,199 182,199 (9,681) (191,880) Net Change in Fund Balance 182,199 182,199 (9,681) (191,880) Fund Balance, Beginning 3,436,726 3,436,726 3,436,726 - Fund Balance, Ending 3,618,925$ 3,618,925$ 3,427,045$ (191,880)$ 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, 2022 114 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Charges for services 1,510,400$ 1,625,000$ 1,552,263$ (72,737)$ Miscellaneous - - 1,121 1,121 Total revenues 1,510,400 1,625,000 1,553,384 (71,616) Expenditures General government 1,504,200 1,888,550 1,759,268 129,282 Total expenditures 1,504,200 1,888,550 1,759,268 129,282 Excess (deficiency) of revenues over (under) expenditures 6,200 (263,550) (205,884) 57,666 Other financing sources (uses) Transfers in - - 80,000 80,000 Total other financing sources (uses) - - 80,000 80,000 Net Change in Fund Balance 6,200 (263,550) (125,884) 137,666 Fund Balance, Beginning 327,853 394,425 367,472 (26,953) Fund Balance, Ending 334,053$ 130,875$ 241,588$ 110,713$ Statistical Section City of Salina, Kansas Net Position by Component Last Ten Fiscal Years (accrual basis of accounting)(in 000’s) Schedule 1 115 2013201420152016201720182019202020212022Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount %Governmental activities Net investment in capital assets assets116,585$ 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% 142,399$ 63% Restricted1,210 1% 876 1% 1,224 1% 1,738 1% 2,012 2% 2,366 2% 1,670 1% 2,267 2% 69,368 31% 68,338 30% Unrestricted11,682 9% 11,413 9% (24,922) -23% (10,505) -9% (8,232) -7% (13,759) -10% (14,839) -11% (1,744) -1% 9,997 4% 15,706 7%Total governmental activitiesnet position129,477$ 100%127,878$ 100%106,703$ 100%115,868$ 100%123,701$ 100%133,453$ 100%138,358$ 100%144,082$ 100%223,133$ 100%226,443$ 100%Business-type activities Net investment in capital assets57,103 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% 75,933 64% Restricted1,553 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% 1,347 1% Unrestricted17,794 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% 41,398 35%Total business-type activitiesnet position76,450$ 100%82,778$ 100%85,229$ 100%87,560$ 100%89,083$ 100%90,383$ 100%93,552$ 100%96,609$ 100%93,530$ 100%118,678$ 100%Primary government Net investment in capital assets173,688 84% 177,310 84% 198,508 103% 187,062 92% 193,237 91% 207,214 93% 214,828 93% 207,301 86% 199,772 63% 218,331 63% Restricted 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% 69,685 20% Unrestricted29,476 14% 30,958 15% (9,312) -5% 13,116 6% 16,023 8% 12,744 6% 14,044 6% 29,948 12% 46,391 15% 57,105 17%Total primary government net position205,927$ 100%210,656$ 100%191,932$ 100%203,428$ 100%212,784$ 100%223,836$ 100%231,910$ 100%240,691$ 100%316,663$ 100%345,121$ 100%Fiscal Year Source: City of Salina Annual Comprehensive Financial Reports, 2013 – 2022 City of Salina, Kansas Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting)(in 000’s) Schedule 2 116 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Expenses Governmental activities: General government 10,978$ 12,175$ 10,743$ 9,188$ 9,780$ 12,013$ 10,866$ 10,395$ 16,098$ 16,479$ Public safety 19,649 20,208 21,084 22,232 23,120 23,892 25,358 24,672 23,877 29,381 Public works 11,064 11,401 9,049 9,773 10,345 10,458 10,529 10,511 16,335 11,141 Public health and sanitation 1,369 347 995 1,095 1,126 1,256 1,156 1,323 2,315 1,883 Culture and recreation 4,809 5,156 6,517 6,612 6,880 7,040 6,879 5,034 6,305 8,145 Planning and development 3,399 3,236 1,915 2,047 1,835 2,369 2,522 2,004 2,289 3,415 Interest on long term debt 1,953 1,817 1,774 2,971 1,725 2,117 2,169 2,350 2,827 2,152 Total governmental activities expenses 53,221$ 54,340$ 52,077$ 53,918$ 54,811$ 59,145$ 59,479$ 56,289$ 70,046$ 72,596$ Business-type activities: Solid waste disposal 3,532 1,867 1,766 2,335 2,365 2,382 2,871 2,056 1,836 788 Water and sewer 15,418 14,938 11,712 14,807 15,650 15,190 14,551 13,386 13,310 15,885 Sanitation 2,237 2,399 1,909 2,043 2,178 2,419 2,313 2,526 3,655 2,675 Golf course 768 837 821 792 852 926 888 805 878 916 Total business-type activities expenses 21,955$ 20,041$ 16,208$ 19,977$ 21,045$ 20,917$ 20,623$ 18,773$ 19,679$ 20,264$ Total primary government expenses 75,176$ 74,381$ 68,285$ 73,895$ 75,856$ 80,062$ 80,102$ 75,062$ 89,725$ 92,860$ Program RevenuesGovernmental activities: Charges for services General government 5,548$ 5,662$ 3,151$ 3,134$ 3,470$ 3,569$ 3,401$ 3,339$ 3,440$ (25,653)$ Public safety 4,656 4,222 4,600 4,891 4,601 4,815 4,357 4,325 4,527 4,926 Public works 277 255 193 238 348 285 309 294 415 408 Public health and sanitation 34 46 46 44 50 47 46 49 63 60 Culture and recreation 1,466 1,533 1,501 1,638 1,541 1,545 1,514 279 1,070 968 Planning and development 161 167 73 140 91 150 104 113 114 300 Operating grants and contributions 4,200 4,015 3,394 4,332 4,541 4,299 4,540 4,714 4,711 3,407 Capital grants and contributions - - - 733 - - - - - - Total governmental activities program revenues 16,342$ 15,900$ 12,958$ 15,150$ 14,642$ 14,710$ 14,271$ 13,113$ 14,340$ (15,585)$ Business-type activities: Charges for services Solid waste disposal 3,138 3,024 2,519 2,795 3,165 3,097 3,082 3,290 3,549 4,047 Water and sewer 17,938 18,742 19,059 19,322 19,855 20,202 20,510 19,449 21,241 21,840 Sanitation 2,514 2,553 2,529 2,751 2,885 3,006 3,325 3,194 3,422 3,474 Golf course 719 811 820 789 798 756 810 581 790 785 Capital grants and contributions - 115 - - - - - - - - Total business-type activities program revenues 24,309$ 25,245$ 24,927$ 25,657$ 26,703$ 27,061$ 27,727$ 26,514$ 29,002$ 30,146$ Total primary government program revenues 40,651$ 41,145$ 37,885$ 40,807$ 41,345$ 41,771$ 41,998$ 39,627$ 43,342$ 14,561$ Net (Expense) Revenue (34,525)$ (33,236)$ (30,400)$ (33,088)$ (34,511)$ (38,291)$ (38,104)$ (35,435)$ (46,383)$ (78,299)$ General Revenues & Other Changes in Net Position Governmental activities: Taxes Property taxes, general purpose 8,031$ 8,315$ 8,242$ 8,196$ 9,101$ 8,623$ 9,708$ 10,308$ 10,821$ 10,706$ Property taxes, debt service 2,362 2,578 2,766 3,022 2,487 2,457 2,664 3,058 3,065 2,992 Motor vehicle taxes 1,200 1,250 1,312 1,370 1,372 1,428 1,403 1,520 1,643 2,014 Sales tax, general purpose 12,260 12,689 12,931 12,781 12,906 13,292 13,419 13,697 15,315 16,698 Selective sales tax 4,281 4,461 4,558 4,901 8,832 8,917 9,323 9,751 11,405 14,979 Other taxes 6,630 7,231 7,363 7,991 6,900 7,241 6,975 6,117 7,116 7,438 Investment revenues 67 98 86 148 92 183 670 286 158 487 Miscellaneous 9,918 1,160 2,371 5,842 2,003 1,062 1,168 8,328 2,405 (28) Transfers, net 999 787 3,819 3,600 4,309 4,831 4,781 5,133 16,681 5,036 Total governmental activities program revenues 45,748$ 38,569$ 43,448$ 47,851$ 48,002$ 48,034$ 50,111$ 58,198$ 68,609$ 60,321$ Business-type activities: Investment revenues 49$ 51$ 56$ 78$ 129$ 233$ -$ 4$ -$ -$ Miscellaneous 279 97 - - 103 153 846 446 2,416 3,027 Reimbursements - 180 132 79 - - - - - - Transfers, net (950) - (3,781) (3,581) (4,367) (4,831) (4,781) (5,133) (16,681) (5,036) Total business-type activities program revenues (622)$ 328$ (3,593)$ (3,424)$ (4,135)$ (4,445)$ (3,935)$ (4,683)$ (14,265)$ (2,009)$ Total primary government 45,126$ 38,897$ 39,855$ 44,427$ 43,867$ 43,589$ 46,176$ 53,515$ 54,344$ 58,312$ Change in Net Position Governmental activities 8,869$ 129$ 4,329$ 9,083$ 7,833$ 3,599$ 4,903$ 15,022$ 12,903$ (27,860)$ Business-type activities 1,732 5,532 5,126 2,256 1,523 1,699 3,169 3,058 (4,942) 7,873 Total primary government 10,601$ 5,661$ 9,455$ 11,339$ 9,356$ 5,298$ 8,072$ 18,080$ 7,961$ (19,987)$ Source: City of Salina Annual Comprehensive Financial Reports, 2013 – 2022 City of Salina, Kansas Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting)(in 000’s) Schedule 3 117 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022General Fund Nonspendable 81$ 107$ 111$ 131$ 153$ 152$ 212$ 184$ 168$ 157$ Assigned331 239 199 136 214 340 274 244 152 358 Unreserved/unassigned3,138 3,908 4,530 4,765 6,516 6,251 8,821 14,714 20,743 25,314 Total general fund3,550$ 4,254$ 4,840$ 5,032$ 6,883$ 6,743$ 9,307$ 15,142$ 21,063$ 25,828$ All other governmental funds Restricted3,446$ 2,910$ 2,793$ 3,142$ 4,191$ 4,648$ 5,224$ 4,980$ 72,025$ 67,558$ Committed7,486 9,886 8,695 14,284 10,072 7,325 8,086 13,225 16,597 20,074 Assigned3,146 1,280 619 1,043 641 1,227 963 1,965 1,587 9,522 Unreserved/unassigned- - (10,537) (6,823) (28) (852) (7,804) (4,028) (1,058) (2,794) Total all other governmental funds14,078$ 14,076$ 1,570$ 11,646$ 14,876$ 12,348$ 6,469$ 16,142$ 89,151$ 94,360$ 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 $65.9 million from the federal government in 2021, restricted for the environmental cleanup of the former Schilling Air Force Base. City of Salina, Kansas Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting)(in 000’s) Schedule 4 118 2013201420152016 201720182019202020212022RevenuesTaxes (see Schedule 5)34,764$ 36,523$ 37,171$ 38,261$ 41,597$ 41,958$ 43,492$ 44,452$ 49,364$ 53,416$ Intergovernmental4,192 4,008 3,385 4,325 4,536 4,297 4,573 5,317 70,892 4,785 Special assessments1,706 1,810 1,679 1,669 1,539 1,546 1,596 1,511 1,405 1,410 Licenses and permits9 7 10 7 6 3 4 5 10 15 Charges for services8,536 8,276 6,416 6,953 6,880 7,338 6,804 5,557 6,710 7,547 Investment revenue40 59 47 142 79 157 670 286 158 461 Reimbursements9,015 123 491 1,406 - - - - - 105 Donations- 241 83 141 111 238 90 129 90 1,701 Miscellaneous810 799 1,853 4,315 1,851 884 1,545 5,656 1,898 - Total revenues59,072$ 51,846$ 51,135$ 57,219$ 56,599$ 56,421$ 58,774$ 62,913$ 130,527$ 69,439$ Expenditures General government4,269$ 3,986$ 5,342$ 5,422$ 5,423$ 5,649$ 4,582$ 5,506$ 5,630$ 6,783$ Public safety19,155 19,559 21,268 21,664 21,629 22,953 23,692 22,435 23,215 25,522 Public works7,220 7,443 5,333 5,778 6,048 6,162 6,136 6,082 6,166 5,847 Public health and sanitation1,344 319 982 1,078 1,097 1,236 1,121 1,280 2,296 1,654 Culture and recreation3,939 4,292 5,659 5,817 6,143 6,255 6,047 4,245 5,317 6,299 Planning and development3,293 3,232 1,910 2,042 1,801 2,185 2,311 1,794 2,078 2,751 Miscellaneous- - - - - - - 1,354 2 36 Capital outlay13,047 11,009 25,527 24,001 18,281 16,344 21,913 12,041 24,939 12,629 Debt service Principal5,038 5,261 6,250 17,902 5,088 14,243 10,324 5,164 10,550 8,616 Interest1,867 1,864 1,833 3,152 1,771 2,192 2,136 2,366 2,411 2,126 Deposit to escrow- - - - - - - - - - Total expenditures59,172$ 56,965$ 74,104$ 86,856$ 67,281$ 77,219$ 78,262$ 62,267$ 82,604$ 72,263$ Other financing sources (uses)Bonds and notes issued5,690$ 5,365$ 6,825$ 34,892$ 11,490$ 8,090$ 11,090$ 8,720$ 13,813$ 7,840$ Bond and note premium185 302 369 1,503 95 70 443 468 592 1 Transfers in4,907 3,001 7,642 7,065 8,339 13,462 9,714 9,323 23,000 17,733 Transfers out(3,907) (2,999) (3,913) (3,555) (4,160) (4,186) (5,073) (4,271) (6,399) (12,777) Total other financing sources (uses)6,875$ 5,669$ 10,923$ 39,905$ 15,764$ 17,436$ 16,174$ 14,240$ 31,006$ 12,798$ Net change in fund balance6,775$ 550$ (12,046)$ 10,268$ 5,082$ (3,362)$ (3,314)$ 14,886$ 78,929$ 9,974$ Debt service as a percentage of non-capital expenditures28%18%18%20%50%16%37%28%29%22% Source: City of Salina Annual Comprehensive Financial Reports, 2013 – 2022 City of Salina, Kansas Tax Revenues by Source, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting)(in 000’s) Schedule 5 119 2013 2014 20152016201720182019202020212022Real estate10,145$ 10,657$ 10,729$ 10,972$ 11,377$ 10,804$ 12,182$ 13,150$ 13,500$ 13,546$ Delinquent248 235 279 246 210 276 190 216 385 152 Motor vehicle1,200 1,250 1,312 1,370 1,372 1,428 1,403 1,520 1,643 2,014 General sales12,260 12,689 12,931 12,781 12,906 13,292 13,419 13,697 15,315 16,698 Selective sales4,281 4,461 4,558 4,901 8,832 8,917 9,323 9,751 11,405 14,979 Other taxes6,630 7,231 7,362 7,991 6,900 7,240 6,975 6,117 7,116 6,028 Total taxes34,764$ 36,523$ 37,171$ 38,261$ 41,597$ 41,957$ 43,492$ 44,451$ 49,364$ 53,416$ Source: City of Salina Annual Comprehensive Financial Reports, 2013 – 2022 City of Salina, Kansas Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Schedule 6 120 Fiscal (Budget) YearReal EstatePersonal PropertyState AssessedTotal, Excluding Motor VehiclesTax RateMotor Vehicle (Note 1)Total, Taxable Assessed ValueEstimated Total Market Value (Note 2)Ratio of Assessed Value to Est. Market Value2013 370,390,092$ 17,769,120$ 16,948,264$ 405,107,476$ 26.927 48,882,411$ 453,989,887$ 2,917,267,724$ 15.562014 376,131,346 13,652,885 17,670,147 407,454,378 27.080 48,865,900 456,320,278 2,957,531,741 15.432015 381,087,426 12,607,815 18,984,453 412,679,694 27.311 50,350,566 463,030,260 2,957,531,741 15.662016 389,872,825 11,653,719 19,323,055 420,849,599 27.603 51,833,505 472,683,104 2,964,464,111 15.942017 399,918,216 10,900,308 19,671,685 430,490,209 26.129 50,970,796 481,461,005 3,097,885,103 15.542018 403,835,383 10,130,718 20,485,144 434,451,245 28.394 53,336,677 487,787,922 3,150,409,123 15.482019 421,108,311 11,245,813 22,113,195 454,467,319 29.720 54,687,311 509,154,630 3,294,115,685 15.462020 423,573,121 9,353,057 23,436,340 456,362,518 30.650 54,589,132 510,951,650 3,326,521,997 15.362021 427,732,694 8,154,030 23,975,182 459,861,906 30.452 56,545,812 516,407,718 3,392,138,959 15.312022 468,723,852 9,542,807 25,613,362 503,880,021 30.348 54,903,252 558,783,273 3,705,559,200 15.08 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) City of Salina, Kansas Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) Schedule 7 121 Fiscal (Budget) Year Operating MillageDebt Service MilageTotal City MillageOperating MillageDebt Service MilageTotal City Millage Operating MillageDebt Service Milage Total City MillageOther Total201320.2425.94826.19034.82334.82347.13311.51658.649 12.135 131.797201420.5396.38826.92737.89537.89546.59911.51758.116 12.941 135.879201520.6926.38827.08038.04738.04744.08811.51755.605 13.305 134.037201619.9507.36127.31138.27538.27544.46511.65556.120 13.293 134.999201721.6945.90927.60337.50837.50844.06911.67455.743 13.299 134.153201820.3395.79026.12937.32137.32145.13011.37156.501 13.189 133.140201922.2856.10928.39438.43738.43746.77610.74657.522 13.988 138.341202022.9086.81229.72041.09741.09744.76110.74755.508 13.983 140.308202123.8476.80330.65040.60640.60645.13010.72955.859 12.623 139.738202223.6126.73630.34838.86038.86043.4419.98453.425 13.089 135.722City of SalinaSaline CountyUSD 305 (2) Source: Saline County Treasurer (1) The "Other" column includes the State of Kansas, the Salina Airport Authority, the Salina Public Library and Kansas State Extension District #3. (2) A small portion of Salina is covered by USD 306, USD 307, or USD 400. Total Tax Rates are different in the areas covered by these jurisdictions. City of Salina, Kansas Principal Property Taxpayers Current Year and Ten Years Ago Schedule 8 122 TaxpayerType of BusinessAssessed Valuation% of Total Valuation RankAssessed Valuation% of Total Valuation RankEvergy (Westar Energy (Western Resources)Utility9,256,860$ 2.04% 115,630,615$ 3.01% 1SFC Global Supply Chain, Inc. (Schwan's)Pizza Manufacturing8,007,991 1.76% 26,540,230 1.26% 2Kansas Gas ServiceUtility3,590,817 0.79% 54,844,333 0.93% 3RAF Salina LLCRetail Shopping Mall4,950,001 1.09% 34,665,958 0.90% 4S&B MotelsMotelN/A4,000,001 0.77% 5Central Mall Realty Holding LLC Regional Shopping CenterN/A3,880,224 0.75% 6Union Pacific Railroad Co.RailroadN/A2,712,177 0.52% 7Menard Inc.Home Improvement2,629,399 0.58% 82,339,471 0.45% 8IndividualResidentialN/A2,274,633 0.44% 9Sams Real Estate Business Trust/WalmartDiscount Retail StoresN/A2,255,335 0.43% 10Walmart Real Estate Business TrustDiscount Retail Stores3,458,961 0.76% 7Great Plains ManufacturingManufacturing2,404,923 0.53% 9Gateway PropertiesShopping Mall (Midstate)3,534,018 0.78% 6Salina Regional Health CenterHospital and Medical Offices4,768,349 1.05% 4Dillon'sGrocery Chain2,396,753 0.53% 10Combined Valuation of the Ten Largest Taxpayers44,998,072$ 49,142,977$ City Valuation453,989,887$ 519,483,033$ Percent of Total City Assessed Valuation9.91%9.46%2013 (2012 Assessed Value)2022 (2021 Assessed Value) Source: Saline County Clerk's Office or recent OS City of Salina, Kansas Property Tax Levies and Distributions Last Ten Fiscal Years Schedule 9 123 Fiscal (Budget) YearTaxes Levied for the fiscal year AmountPercentageDelinquent Collections (1)AmountPercentage of levy2013 10,550,730$ 10,145,404$ 96.6% 354,845$ 10,500,249$ 99.5%2014 10,868,225 10,776,688 99.4% 62,432 10,839,120 99.7%2015 10,991,959 10,460,246 96.6% 372,726 10,832,972 98.6%2016 11,209,245 10,984,630 98.3% 184,970 11,169,600 99.6%2017 11,564,876 11,320,197 98.2% 203,904 11,524,101 99.6%2018 11,248,278 10,938,457 97.5% 276,340 11,214,797 99.7%2019 12,335,808 12,097,740 98.5% 189,587 12,287,327 99.6%2020 13,506,590 13,203,183 98.4% 216,358 13,419,541 99.4%2021 13,958,495 13,552,390 98.0% 283,194 13,835,584 99.1%2022 13,788,584 13,529,396 98.9% 151,560 13,680,956 99.2%Current Year Tax DistributionsTotal Tax Distributions (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 City of Salina, Kansas Direct Sales Rate by Taxing Entity Last Ten Fiscal Years Schedule 10 124 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022City Direct Tax Rate General0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% Special purpose0.40% 0.40% 0.40%0.40% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%County-wide Tax Rate1.00% 1.00% 1.00% 1.00% 1.00%1.00% 1.00% 1.00% 1.00% 1.50% Portion of County-wide tax allocated to City (July Percentage)60.86% 60.23% 60.28% 60.28% 60.28% 59.85% 60.33% 60.17% 60.17% 60.95% In addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. In May 2016, the voters approved an increase in the Special Purpose Tax rate from .40% to .75%, to be effective October 1, 2016. Source: Kansas Department of Revenue City of Salina, Kansas Water Sales by Class of Customer Last Ten Fiscal Years Schedule 11 125 Rate Class# Accts Billed Water Sold# Accts Billed Water Sold# Accts Billed Water Sold# Accts Billed Water Sold# Accts Billed Water Sold# Accts Billed Water Sold# Accts Billed Water Sold# Accts Billed Water Sold# Accts Billed Water Sold# Accts Billed Water SoldResidential 17,966 989,788 18,042 1,003,100 18,086 987,540 18,125 950,697 18,124 988,572 18,130 963,387 18,155 864,810 18,238 965,782 18,303 987,792 18,382 970,469 Commercial1,579 348,968 1,599 353,675 1,600 350,767 1,603 345,232 1,606 345,250 1,614 340,960 1,607 352,051 1,612 319,080 1,626 349,956 1,645 339,209 Industrial40 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 41 177,535 Government99 46,484 97 45,346 97 41,928 99 45,136 99 41,552 98 35,932 97 41,911 94 28,200 72 22,810 70 22,537 Apartment168 67,155 166 60,865 164 61,400 163 57,039 163 58,378 157 71,559 157 62,127 156 58,651 157 61,021 153 62,285 Schools84 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 77 35,022 Industrial Special1 20,439 - - - - - - - - - - - - - - - - - - Consumed in production12 18,665 12 19,264 12 17,338 9 9,580 8 9,652 7 6,966 7 6,974 7 4,109 6 3,012 3 1,843 Rural water1 21,530 1 22,993 1 21,915 1 23,384 1 25,624 1 22,345 1 21,663 1 31,776 1 22,970 1 20,575 Hospitals9 26,482 10 32,184 9 31,858 9 33,728 9 35,132 9 31,856 9 29,892 9 29,483 9 33,109 9 31,405 Religious/non profit37 4,810 37 4,973 37 4,986 36 5,224 36 4,749 36 4,458 35 2,780 35 2,215 35 2,267 35 2,598 Engineering studies8 6,822 8 5,095 8 4,807 7 4,573 7 4,772 7 4,471 7 3,835 6 2,553 6 2,213 6 2,043 Providing taxable service2 3,495 1 3,561 1 3,167 1 3,921 1 3,347 1 2,331 1 2,676 1 1,909 1 2,585 1 2,340 Sale of component parts6 5,972 6 6,850 5 3,900 4 3,129 4 2,917 4 2,190 4 1,542 4 1,310 4 1,533 3 972 Fire hydrant3 1,922 2 1,474 - - 3 1,727 3 1,790 3 2,829 3 1,180 3 2,106 3 2,146 3 3,530 Industrial consumed in production3 4,417 3 3,588 3 2,388 3 1,930 3 1,962 3 2,107 3 2,219 3 1,946 3 1,560 2 1,013 Sales of farm equipment1 107 1 48 1 53 1 54 1 104 1 56 1 124 1 109 1 154 1 70 20,019 1,793,772 20,111 1,801,577 20,153 1,779,999 20,193 1,717,766 20,192 1,753,343 20,196 1,734,100 20,210 1,621,852 20,291 1,638,513 20,346 1,693,079 20,432 1,673,446 Water Rate Schedule: Monthly meter change (5/8")4.88$ 5.03$ 5.20$ 5.36$ 5.52$ 5.74$ 5.94$ 6.15$ 6.27$ 6.46$ Commodity change (per 000 gal.): 0-2000 gal.4.04$ 4.24$ 4.45$ 4.48$ 4.77$ 4.96$ 5.13$ 5.31$ 5.42$ 5.58$ 2001-10,000 gal. Over 10,000 gal. Excess use charge8.08$ 8.48$ 8.90$ 9.16$ 9.54$ 9.92$ 10.26$ 10.62$ 10.84$ 11.16$ Wastewater Rate Schedule: Monthly base charge6.97$ 7.11$ 7.22$ 7.36$ 7.51$ 7.81$ 8.08$ 8.36$ 8.53$ 8.79$ Unit Cost (per 000 gal):4.79$ 4.94$ 5.01$ 5.19$ 5.29$ 5.51$ 5.70$ 5.90$ 6.02$ 6.20$ 2019202020212022201320142015201620172018 Water sold is expressed in thousands of gallons. Number of Accounts billed is the annual number of billings for each class divided by 12. Monthly meter charge increases with the size of the meter. Residential Wastewater is calculated based on Winter Quarter water consumption. Other accounts are based on monthly water consumption. 2008 Water Consumption Rate Structure changed from a decreasing tier structure to one rate and Excess Use Charge which is double the consumption rate Source: City of Salina Water Customer Accounting Office. City of Salina, Kansas Ratio of Outstanding Debt by Type Last Ten Fiscal Years Schedule 12 126 Fiscal (Budget) YearGeneral Obligation Bonds Loans PayableCapital LeaseOperating Lease Temporary NotesGeneral Obligation BondsWater Revenue Bonds Loans PayableTemporary NotesTotal Primary GovernmentPercentage of Personal Income Per Capita2013 49,631,797$ -$ -$ -$ 3,800,000$ 8,519,799$ 15,226,532$ -$ -$ 77,178,128$ 3.7% 1,613.05 2014 50,033,555 - 176,235 - 5,000,000 9,587,351 14,592,836 6,208,102 - 85,598,079 4.1% 1,788.25 2015 50,840,632 - 479,366 - 5,995,000 8,539,773 13,949,139 5,753,620 - 85,557,530 4.1% 1,789.42 2016 51,816,399 12,157,127 321,174 - 11,505,000 7,640,381 13,285,443 7,432,024 - 104,157,548 5.0% 2,200.39 2017 55,994,305 12,171,090 157,868 - 6,811,742 6,520,433 12,606,747 8,862,810 - 103,124,995 4.9% 2,194.43 2018 51,968,310 12,185,053 - - 18,123,505 5,282,578 11,898,051 10,632,351 - 110,089,848 4.9% 2,342.64 2019 54,607,702 12,640,000 - - 11,170,000 4,102,298 10,330,000 46,354,852 - 139,204,852 6.0%2,979.81 2020 56,587,549 12,640,000 - - 7,050,000 8,742,451 9,615,000 35,926,029 - 130,561,029 5.5%2,804.75 2021 59,582,649 12,640,000 - - 3,647,188 7,672,351 8,865,000 43,966,366 - 136,373,554 5.5%2,947.09 2022 62,508,000 12,640,000 - 649,031 - 6,637,000 8,090,000 43,798,557 - 134,322,588 6.6%2,889.84 Governmental ActivitiesBusiness-Type Activities Source: City of Salina Annual Comprehensive Financial Reports, 2013 – 2022 City of Salina, Kansas Ratio of Net General Bonded Debt Outstanding Last Ten Fiscal Years Schedule 13 127 Fiscal (Budget) YearGeneral Obligation Bonds Capital LeaseTemporary Notes TotalLess: Debt Service FundNet General Bonded DebtPercentage of Actual Taxable Value of Per Capita2013 59,620,906$ 176,235$ 5,000,000$ 64,797,141$ 707,763$ 64,089,378$ 14.1% 1,339.49$ 2014 59,620,906 176,235 5,000,000 64,797,141 407,864 64,389,277 14.1% 1,345.17 2015 59,380,405 479,366 5,995,000 65,854,771 745,339 65,109,432 14.1% 1,361.75 2016 62,514,738 157,868 6,811,742 69,484,348 1,248,914 68,235,434 14.4% 1,441.51 2017 57,250,888 - 18,123,505 75,374,393 1,509,863 73,864,530 15.3% 1,571.79 2018 58,710,000 - 11,170,000 69,880,000 185,158 69,694,842 14.3% 1,483.06 2019 65,330,000 - 7,050,000 72,380,000 1,142,418 71,237,582 14.0% 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 13.3% 1,486.59 2022 69,145,000 - - 69,145,000 2,196,006 66,948,994 12.0% 1,440.35 General Bonded Debt Outstanding Source: City of Salina Annual Comprehensive Financial Reports, 2013 – 2022 City of Salina, Kansas Direct and Overlapping Governmental Activities Debt As of December 31, 2022 Schedule 14 128 JurisdictionNet General Obligation Bonded Debt OutstandingPercentage Applicable to City of SalinaAmount Applicable to the City of SalinaDirect: City of Salina 75,560,845$ 100.00% 75,560,845$ Overlapping: Salina Airport Authority (A) 34,670,000 100.00% 34,670,000 Saline County 72,814,135 73.79% 53,729,550 USD 305 93,575,000 93.10% 87,118,325 Total Overlapping Debt 201,059,135 175,517,875 Total Direct and Overlapping Debt 276,619,980$ 251,078,720$ Per Capita Direct and Overlapping Debt 5,401.75$ 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. (A) Includes $74,900,000 of bonds issued by Saline County that have a pledge of both property taxes and a dedicated 0.50% retailers’ sales tax of the county. However, based on historical collections, the County anticipates that such bonds will be repaid entirely from the sales tax. Source: Saline County Clerk City of Salina, Kansas Legal Debt Margin Last Ten Fiscal Years Schedule 15 129 Legal Debt Margin Calculation for 2022Assessed Valuation 558,783,273$ Debt Limit (30% of Assessed Value)167,634,982 Debt applicable to limit: Total Bonded Debt 133,673,557$ Less: GO Debt Attributable to Exempt Purposes (6,637,000) Less: Revenue Bonds (8,090,000) Less: Loans Payable (56,438,557) Less: Fund Balance designated for Debt Service (2,196,006) Total Debt Applicable to Limitation 60,311,994$ Legal debt margin 107,322,988$ 2013201420152016201720182019202020212022Debt Limit136,196,966$ 136,896,083$ 138,909,078$ 141,804,931$ 142,000,537$ 146,336,377$ 152,724,804$ 153,285,495$ 155,844,910$ 167,634,982$ Total net debt applicable to limit52,724,034 56,090,293 74,229,612 62,072,485 61,296,184 68,240,457 66,232,649 65,748,563 66,824,139 60,311,994 Legal debt margin83,472,932$ 80,805,790$ 64,679,466$ 79,732,446$ 80,704,353$ 78,095,920$ 86,492,155$ 87,536,932$ 89,020,771$ 107,322,988$ Total net debt applicable to the limit as a percentage of debt limit39%41%53%44%43%47%43%43%43%36%Fiscal Year City of Salina, Kansas Pledged Revenue Coverage Last Ten Fiscal Years Schedule 16 130 Fiscal YearChargesExpensesRevenuePrincipalInterestDebt Service Coverage2013 17,974,089$ 13,373,088$ 4,601,001$ 620,000$ 590,191$ 3.802014 18,964,164 12,112,288 6,851,876 630,000 577,791 5.672015 19,139,612 9,859,974 9,279,638 640,000 565,191 7.702016 19,389,348 11,800,473 7,588,875 660,000 549,191 6.282017 19,958,862 13,148,035 6,810,827 675,000 529,391 5.652018 20,382,469 12,973,621 7,408,848 705,000 509,141 6.102019 20,842,606 13,269,741 7,572,865 725,000 487,991 6.242020 19,448,780 12,460,334 6,988,446 715,000 327,117 6.712021 21,240,517 12,077,933 9,162,584 750,000 282,825 8.872022 21,839,834 15,885,026 5,954,808 775,000 265,950 5.72Water/Sewer Revenue Bonds Source: City of Salina Annual Comprehensive Financial Reports, 2013 – 2022 City of Salina Debt Services Schedules City of Salina, Kansas Demographic and Economic Statistics Last Ten Fiscal Years Schedule 17 131 Fiscal (Budget) YearPopulationPer Capita Personal Income (Saline County)Personal Income, Salina (interpolated)Unemployment RateLabor Force, City of SalinaUSD 305 HeadcountPercentage Free and Reduced LunchCity .5 cent sales taxPer Capita .5 cent sales TaxAs a % of per capita personal income2013 47,846 43,078$ 2,061,109,988$ 5.1% 26,441 7,305 60.7% 5,326,723$ 111.33$ 0.258%2014 47,867 43,736 2,093,511,112 5.3% 26,303 7,388 61.3% 5,555,601 116.06 0.265%2015 47,813 44,065 2,106,879,845 3.9% 26,170 7,369 61.8% 5,670,040 118.59 0.269%2016 47,336 44,230 2,093,647,612 3.3% 27,684 7,386 68.7% 5,727,260 120.99 0.274%2017 46,994 44,732 2,102,135,608 2.7% 27,684 7,176 62.1% 5,755,869 122.48 0.274%2018 46,994 47,945 2,253,127,330 3.3% 30,174 7,180 61.7% 5,770,174 122.79 0.256%2019 46,716 49,983 2,335,005,828 2.9% 30,094 7,245 59.2% 5,968,961 127.77 0.256%2020 46,550 50,820 2,365,671,000 3.4% 30,094 7,156 59.0% 5,998,424 128.86 0.254%2021 46,274 53,309 2,466,820,666 2.3% 24,962 7,031 44.3% 6,687,099 144.51 0.271%2022 46,481 56,258 2,614,928,098 2.3%29,476 6,725 59.3%7,239,146 155.74 0.277%Increase in per capital Sales Tax (10 years)39.9%Increase in per capita Personal Income30.6% Sources: Population: Kansas Division of the Budget. (Population Data) 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 2013 -2022 Employment City of Salina USD305 headcount and free and reduced lunch data derived from Kansas Department of Education./USD 305 Budget Document 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 2021- 2022 school year is reported as 2021. City of Salina, Kansas Principal Employers Current Year and Nine Years Ago Schedule 18 132 EmployerType of BusinessEmployees RankPercentage of Labor Force Employees RankPercentage of Labor ForceSalina Regional Health CenterHealth Care1,300 35.0%1,875 16.2%Unified School District No. 305Public School System1,659 26.3%1,500 25.0%Schwan's Global Supply ChainFrozen Pizza Manufacturing1,800 16.9%1,200 34.0%Great Plains Manufacturing Agricultural & Landscaping Equipment258 10 1.0%1,200 44.0%Exide Technologies/Strten Manufacturing Automotive Battery Manufacturer 750 42.8%700 52.3%City of SalinaCity Government465 61.8%425 61.4%Salina VortexManufacturing- 385 71.3%Saline CountyCounty Government - 325 81.1%Walmart rev GroupRetail421 71.6%250 90.8%REV GroupManufacturing- 175 100.6%Signify - Blue Philips Lighting Company Fluorescent Lamps490 51.9%- Dillion StoresRetail343 81.3%- Solomon CorpElectrical Equipment324 91.2%- Total7,810 29.5%8,035 27.3%20132022 Sources: Salina Chamber of Commerce APPENDIX D December 31, 2023 Unaudited Financial Report The following report provides unaudited revenues, expenditures and fund balances for certain main operating funds of the City for the fiscal year ending December 31, 2023. These figures are presented on cash basis and are not prepared in accordance with generally acceptable accounting principles. The City anticipates that its final audited financial statements for the 2023 fiscal year will be available by approximately September of 2024. Fund Name Fund Number BEG. BALANCE DEBITS CREDITS NET CHANGE END BALANCE Outstanding Encumbrances Unencumbered Cash Balance 12/31/23 General 100 25,135,706.17 55,389,974.66 48,271,700.20 7,118,274.46 32,253,980.63 318,782.98 31,935,197.65 Sales Tax Capital 210 8,337,703.26 10,798,120.09 14,086,468.97 -3,288,348.88 5,049,354.38 0.00 5,049,354.38 Gas Tax 270 2,901,387.49 1,559,092.71 1,877,637.03 -318,544.32 2,582,843.17 536,836.95 2,046,006.22 Sanitation 300 1,624,957.47 3,708,677.25 3,350,785.00 357,892.25 1,982,849.72 129,863.04 1,852,986.68 Solid Waste 320 7,306,844.63 4,380,568.08 5,176,249.68 -795,681.60 6,511,163.03 173,015.17 6,338,147.86 Golf 340 70,310.43 1,021,369.81 1,054,123.20 -32,753.39 37,557.04 0 37,557.04 Water/Wastewater 370 25,640,615.74 22,774,896.09 23,256,476.76 -481,580.67 25,159,035.07 2,718,196.14 22,440,838.93 Debt Service 500 1,481,543.37 7,320,584.93 7,123,966.17 196,618.76 1,678,162.13 0 1,678,162.13 Water/Wastewater Debt Service 510 655,428.71 0 0 0.00 655,428.71 0 655,428.71 Water/Wastewater Capital Reserve 735 10,809,161.53 250,000.00 127,834.74 122,165.26 10,931,326.79 260,013.73 10,671,313.06 Solid Waste Capital Reserve 750 1,381,213.08 0 0 0.00 1,381,213.08 0 1,381,213.08 Total 85,344,871.88 107,203,283.62 104,325,241.75 2,878,041.87 88,222,913.75 4,136,708.01 84,086,205.74