Audit - 2007/2008
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SALINE COUNTY-CITY BUILDING AUmORITY
Salina, Kansas
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FINANCIAL STATEMENTS
with
Independent Auditor's Report
December 31, 2008 and 2007
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BARTLETT, SETTLE & EDGERLE
A PROFESSIONAL ASSOCIATION
Certified Public Accountants
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SALINE COUNTY-CITY BUILDING AUTHORITY
Salina, Kansas
FINANCIAL STATEMENTS
with
Independent Auditor's Report
December 31, 2008 and 2007
Table of Contents
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Independent Auditor's Report
Management's Discussion and Analysis
Basis Financial Statements:
Statements of Net Assets
Statements of Revenues, Expenses, and Changes in Net Assets
Statements of Cash Flows
Notes to Financial Statements
Pal!e
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2-4
5
6
7
8 - 11
Supplementary Information:
Schedule of Cash Receipts, Expenditures, and
Changes in Budgeted Net Income -
Budget and Actual - Budgetary Basis
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B~LETT SETTLE &1 EffiE~E
A PROF"ESSIONAL ASSOCIATION
OERTIF"IEO PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
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To the Governing Board
Saline County-City Building Authority
Salina, Kansas
We have audited the accompanying financial statements of the Saline County-City Building Authority (Authority)
as of and for the years ended December 31, 2008 and 2007, as listed in the table of contents. These financial
statements are the responsibility of the Authority's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America
and the Kansas Municipal Audit Guide. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the fmancial
positions of the Saline County-City Building Authority as of December 31, 2008 and 2007 and the changes in its
fmancial positions and its cash flows for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
The management's discussion and analysis is not a required part of the basic financial statements but is
supplementary information required by accounting principles generally accepted in the United States of America.
We have applied certain limited procedures which consisted principally of inquiries of management regarding the
methods of measurement and presentation of the required supplementary information. However, we did not audit
the infonnation and express no opinion on it.
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Our audit was conducted for the purpose of forming an opinion on the basic financial statements. The budgetary
schedule listed as supplementary information in the table of contents is presented for purposes of additional analysis
and is not a required part of the basic financial statements. This supplementary information has been subjected to
the auditing procedures applied in the audit of the basic fmancial statements and, in our opinion, is fairly stated in all
material respects, in relation to the basic financial statements taken as a whole.
~~/ ~ ~ U,uk
A Professional Association. r
March 24, 2009
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129 WEST SECOND, SUITE A . P.O. BoX 2889 . HUTCHINSON, KS 67504-2889
PHONE: 620.662.3358 . TOLL-FREE: 888.414.0123 . FAX: 620.662.3350 . EMAIL: bse@cpabse.com
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MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the Saline County-City Building Authority (Authority), we offer readers of our
fmancial statements this narrative overview and analysis of the fmancial activities of the Authority for the
fiscal year ended December 31, 2008. This discussion should be read in conjunction with the Authority's
basic financial statements and the notes to those financial statements. The Authority is responsible for the
completeness and accuracy of this information.
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Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the Authority's basic fmancial
statements. Since the Authority is engaged only in business-type activities, its basic financial statements
are comprised of only two components: 1) enterprise fund financial statements and 2) notes to financial
statements.
Enterprise.fund fmancial statements - The enterprise fund financial statements are designed to
provide readers with a broad overview of the Authority's fmances, in a manner similar to a
private-sector business.
The statement of net assets presents information on the Authority's assets and liabilities,
with the difference between the two reported as net assets. Over time, increases or
decreases in net assets may serve as a useful indicator of whether the financial position of
the Authority is improving or deteriorating.
The statement of revenues, expenses and changes in net assets presents information
showing how the Authority's net assets changed during the most recent fiscal year. All
changes in net assets are reported as soon as the underlying event giving rise to the
change occurs, regardless of the timing of the cash flows.
The statement of cash flows provides information about the cash receipts and
disbursements during the period.
Notes to financial statements - The notes provide additional information that is essential to a full
understanding of the data provided in the financial statements.
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Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position.
In the case of the Authority, assets exceeded liabilities by $3,083,977 at the close of the most recent fiscal
year.
The largest portion of the Authority's net assets (62%) reflects its investment in capital assets, less any
related outstanding debt (if any) used to acquire those assets. The Authority uses these capital assets to
provide facilities, equipment, and services to its tenants; consequently, these assets are not available for
future spending.
Net Assets
2008 2007 2006
Current and other assets $1,283,506 $1,209,039 $1,115,182
Capital assets 1.912.124 1.906.899 1.914.165
Total assets $3.195.630 $3.115.938 $3.029.347
Current liabilities $ 77,943 $ 40,031 $ 34,512
Noncurrent liabilities 33.710 27,758 23.623
Total liabilities $ 111.653 $ 67.789 $ 58.135
Net assets:
Invested in capital assets, net of related debt $1,912,124 $1,906,899 $1,914,165
Unrestricted 1.171.853 1.141.250 1.057.047
. Total net assets $3.083.977 $3.048.149 $2.971.212
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At the end ofthectirrent fiscal year, the Authority is able to report positive balances in both categories of
net assets. The same situation holds true for the prior years.
Changes in Net Assets
2008 2007 2006
Operating revenues $ 809,570 $ 799,797 $ 783,990
Nonoperating revenueS 16.803 40.947 41.888
Total revenues 826.373 840.744 825.878
Operating expense:
Personnel expense 353,425 341,232 335,494
Depreciation 144,458 141,810 137,667
Operation and maintenance 292.662 280.765 293.520
Total operating expense 790,545 763,807 766,681
. Nonoperating expenses
Total expense 790.545 763.807 766.681
Change in pet assets 35,828 76,937 59,197
Net assets - January 1 3.048.149 2.971.212 2.912.015
Net assets - December 31 $3.083.977 $3.048.149 $2.971.212
The Authority's net assets increased by $35,828 during the current fiscal. year. Operating revenues
remained relatively the same and operating expenses increased slightly. The excess of revenues over
expense as shown.above is necessary in order to accumulate the funds to purchase capital improvements
as needed.
Statement of Cash Flows
2008 2007 2006
Net cash provided (used) by:
Operating activities
Capital and related financing activities
Investing activities
Net change in cash
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
$ 234,201
(149,874)
16.994
101,321
1.182.185
$1.283.506
$ 160,600
(141,497)
47.900
67,003
1.115.182
$1.182.185
$ 156,818
(49,453)
42.099
149,464
965.718
$1.115.182
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The net change in cash and cash equivalents is highly dependent upon the level of capital improvements
purchased by the Authority. The net change in cash and cash equivalents has been positive so the
Authority is able to position itself to fund future capital commitments.
Capital Assets and Debt Administration
Capital Assets - The Authority's investment in capital assets as of December 31, 2008, amounts to
$1,912,124 (net of accumulated depreciation). This investment in capital assets includes: land, land
improvements, building, building improvements, vehicles, furniture, office equipment, and maintenance
equipment. Additional information related to capital assets is located in Note 4 of the Notes to Financial
Statements.
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Land
Land and land improvements
Building and improvements
Equipment
Total capital assets
Accumulated depreciation
Total capital assets, net of depreciation
2008
$ 220,228
220,441
3,454,556
406.754
4,301,979
(2.389.855)
$ 1.912.124
Long-Term Debt - The Authority currently has no outstanding debt.
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Capital Assets
2007
$ 220,228
164,281
3,366,482
406.292
4,157,283
(2.250.384)
$ 1.906.89~
2006
$ 4,067,425
(2.153.260)
$ 1.914 165
Economic Factors and Next Year's Budget
The Authority continues to house the administrative offices of Saline County, Saline City, and the related
Courts. Management continually evaluates the maintenance and improvement needs of the building
complex. The budget for the following year of 2009 reflects operations to be consistent with the past
activity of the Authority.
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Requests for Information
This financial report is designed to provide a general overview of the Authority's fmances for all those
with an interest in the Authority's finances. Questions concerning any of the information provided in this
report or requests for additional financial information should be addressed to the Saline County-City
Building Authority, 300 West Ash Street, Salina, KS 67401.
Jim Schroeder, Superintendent
Saline County-City Building Authority
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BASIC FINANCIAL STATEMENTS
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Saline County-City Building Authority
Statements of Net Assets
December 31,2008 and 2007
2008 2007
ASSETS
Current Assets
Cash and cash equivalents $ 1,283,194 $ 1,182,185
Cash and cash equivalents - flex spending arrangement 312
Prepaid expenses 26,854
Total current assets 1,283,506 1,209,039
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Noncurrent Assets
Capital assets (net of accumulated depreciation) 1,912,124 1,906,899
TOTAL ASSETS $ 3,195,630 $ 3,115,938
LIABILITIES
Current Liabilities
Accounts payable $ 66,395 $ 30,779
Payable - flex spending arrangement 312
Compensated absences payable 11,236 9,252
Total current liabilities 77,943 40,031
Noncurrent Liabilities
Compensated absences payable 33,710 27,758
Total noncurrent liabilities 33,710 27,758
TOTAL LIABILITIES 111,653 67,789
NET ASSETS
Invested in capital assets 1,912,124 1,906,899
Unrestricted 1,171,853 1,141,250
Total net assets 3,083,977 3,048,149
. TOTAL LIABILITIES AND NET ASSETS $ 3,195,630 $ 3,115,938
. The accompanying notes are an integral part of these financial statements.
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Saline County-City Building Authority
Statements of Revenues, Expenses,
and Changes in Net Assets
For the Years Ended December 31, 2008 and 2007
2008 2007
OPERATING REVENUES
Charges for facilities, services and equipment
Saline County $ 473,694 $ 473,694
City of Salina 290,329 290,329
City of Salina - maintenance 900 900
Salina Public Library 9,000 8,060
. Vending income (net) 3,678 3,080
Refunds, claims, and other 31,969 23,734
Total operating revenues 809,570 799,797
OPERATING EXPENSES
Personnel costs 353,425 341,232
Maintenance and repairs 76,867 89,097
Supplies and small tools 23,765 21,591
Depreciation 144,458 141,810
Insurance 45,558 30,369
Utilities 136,041 128,579
Contracted services 6,507 5,785
Miscellaneous expenses 3,924 5,344
Total operating expenses 790,545 763,807
Net operating income 19,025 35,990
NONOPERATING REVENUE AND EXPENSE
Loss on disposal of assets (191) (6,953)
Interest income 16,994 47,900
Total nonoperating revenue and expense 16,803 40,947
Change in net assets 35,828 76,937
NET ASSETS
. Net assets - beginning of year 3,048,149 2,971,212
Net assets - end of year $ 3,083,977 $ 3,048,149
. The accompanying notes are an integral part of these fInancial statements.
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Saline County-City Building Authority
Statements of Cash Flows
For the Years Ended December 31, 2008 and 2007
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received for facility and equipment use $ 773,923 $ 772,983
Cash received from refunds, claims, vending, other 35,647 26,814
Payments to suppliers (230,092) (303,495)
Payments to employees for salaries and benefits (345,277) (335,702)
Net cash provided by operating activities 234,201 160,600
. CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTNITIES
Purchase of capital assets (149,874) (141,497)
Net cash used for capital and related financing activities (149,874) (141,497)
CASH FLOWS FROM INVESTING ACTMTIES
Interest received 16,994 47,900
Net cash provided by investing activities 16,994 47,900
Net increase (decrease) in cash and cash equivalents 101,321 67,003
Cash and cash equivalents - beginning of year 1,182,185 1,115,182
Cash and cash equivalents - end of year $ 1,283,506 $ 1,182,185
RECONCILIATION OF OPERATING REVENUE TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Operating income $ 19,025 $ 35,990
Depreciation 144,458 141,810
Changes in assets and liabilities:
Receivables 26,854 (26,854)
Accounts payable 35,928 4,141
Accrued expenses 7,936 5,513
Net cash provided by operating activities $ 234,201 $ 160,600
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. The accompanying notes are an integral part of these financial statements.
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Saline County-City Building Authority
Salina, Kansas
Notes to Financial Statements
December 31, 2008 and 2007
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Note 1 Summary of Sil!nificant Accountinl! Policies
The Saline County-City Building Authority (Authority) was formed March 22, 1965, under the Interlocal
Cooperation Act of Kansas (KSA 12-2901 to 12-2907) by Saline County (County), the City of Salina (City),
and the Board of Education U.S.D. #305 (School District). The Authority was created to provide for the
acquisition of land and the construction, equipping, operating, and maintenance of a building and parking
area to house the county offices and courts, the city offices and courts, and the school district offices. On
January 16, 1996, the Interlocal Agreement was restated to relieve the School District from any ongoing
responsibility or expense relating to the Authority. The School District retained its beneficial ownership
interest in the Building Authority.
The accounting and reporting policies of the Authority relating to the accompanying financial statements
conform to accounting principles generally accepted in the United States of America (GAAP) applicable to
public institutions engaged only in business-type activities adopted by the Governmental Accounting
Standards Board (GASB). The GASB is the accepted standard-setting body for establishing governmental
accounting and financial reporting principles.
A. Reporting Entity
The governing board of the Authority is composed of seven members, six of whom are appointed from the
governing boards of the participating municipalities, and one of who is selected at large by the six appointed
members. The makeup of the appointed members is three from Saline County, two from the City of Salina,
and one. from the District Court. The accompanying financial statements include all funds which are
controlled by or are dependent on the Authority.
The Authority is considered to be a joint venture because it is a separate legal entity that is jointly controlled
by the County and City. The County and the City both have an ongoing financial responsibility for the
Authority. The Authority's Interlocal Cooperation Agreement grants a beneficial interest to the County, City,
and the School District in proportion to the respective share of the original acquisition costs of the building.
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B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
For financial reporting purposes, the Authority is considered a special-purpose government engaged only in
business-type activities. The Authority's financial statements have been presented using the economic
resource measurement focus and the accrual basis of accounting. The intent of the Board is that the cost of
providing services on a continuing basis be recovered through rents and user fees. Revenues are recorded
when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash
flows.
As permitted by generally accepted accounting principles, the Authority has elected not to apply Financial
Accounting Standards Board pronouncements issued after November 30, 1989.
When both restricted and unrestricted resources are available for use, it is the Authority's policy to use
restricted resources first, then unrestricted resources, as they are needed.
C. Budgetary Information
The Saline County-City Building Authority does not have tax levying powers and is not required to
publish a legal budget. An operating budget is adopted annually by the Governing Board for the purpose
of determining the amount of appropriations to request from participating municipalities to cover the
operating and maintenance costs of the building.
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Saline County-City Building Authority
Notes to Financial Statements (continued)
December 31, 2008 and 2007
Note 1
Summary of Sie:nificant Accountine: Policies (continued)
D. Cash and Cash Equivalents
For the purposes of the statement of cash flows, the Authority considers all demand deposits and all
investments (if any) with maturities of three months or less to be cash equivalents.
E. Capital Assets
Additions to property and equipment are recorded at cost. Maintenance and repairs are expensed as
incurred. Assets are depreciated using the straight-line method over the estimated useful lives of the
assets as follows:
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Buildings and improvements
Equipment
5-50 years
5-25 years
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F. Compensated Absences Payable
The Authority is liable for payments to employees for sick pay and vacation pay earned according to the
Authority's personnel policies. This liability is accrued at year-end for financial statement purposes. The
liability is recorded in the statement of net assets and a related expense is recorded in the statement of
revenues, expenses, and changes in net assets. A percentage of this payable is recorded as a noncurrent
liability as it is not anticipated to be paid within the next fiscal year.
G. Net Assets
Net assets represent the difference between assets and liabilities and are classified in the following categories:
Invested in capital assets - This amount consists of the cost of capital assets, net of accumulated
depreciation and reduced by any outstanding debt related to the acquisition, construction or
improvement of those assets.
Unrestricted net assets - This amount is all net assets that do not meet the definition of "invested in
capital assets, net of related debt".
H. Classification of Revenues
The Authority distinguishes operating revenues and nonoperating revenues as follows:
Operating revenues - Operating revenues include rents and assessments charged to the entities
occupying the facilities and for the use of equipment owned. It also includes related refunds, claims,
or miscellaneous items.
Nonoperating revenue - Nonoperating revenues include all activities that have the characteristics of
nonexchange transactions, such as gifts, contributions, and investment income.
Estimates
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The preparation of financial statements in conformity with generally accepted. accounting principles requires
management to make estimates and assmnptions that affect the amounts reported in the financial statements
and the accompanying notes. Actual results may differ from those estimates.
J. Risk Management
The Authority carries commercial insurance to limit its exposure to the various risks of loss related to torts;
theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural
disasters. There has been no significant change in the Authority's insurance coverage from the previous year.
In addition, there have not been settlements in excess of the Authority's coverage in any of the prior three
years.
K. Reclassifications
Certain accounts in the prior year financial statements have been reclassified for comparative purposes to
conform to the presentation in the current year financial statements.
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Saline County-City Building Authority
Notes to Financial Statements (continued)
December 31, 2008 and 2007
Note 2 Stewardship. Compliance. and Accountability
Cash-Basis Law (KSA 10-1113) - The Authority was in compliance with this law.
Depository Security (KSA 9-1402) - The Authority's funds were adequately secured at December 31,2008.
Note 3 Deposits - Cash and Cash Equivalents
As of December 31, 2008, the Authority had cash and cash equivalents in financial banking institutions of
$1,283,506. The Authority did not have any activity in investment-type assets.
Interest rate risk - KSA 9-1401 establishes the depositories which may be used by Kansas governments.
The statute requires banks eligible to hold the government's funds bave a main or branch bank in the county
. in which the government is located, or in an adjoining county if such institution has been designated as an
official depository, and the banks provide an acceptable rate of return on funds. In addition, K.S.A. 9-1402
requires the banks to pledge securities for deposits in excess of FDIC coverage. The Authority has no other
policies that would further limit interest rate risk.
Credit risk- KSA 12-1675 limits the government's investment of idle funds to time deposits, open accounts,
certificates of deposit with allowable financial institutions, U.S. government securities, temporary notes, no-
fund warrants, repurchase agreements, and the Kansas Municipal Investment Pool. The Authority has no
investment policy that would further limit its investment choices.
Custodial credit risk - The custodial credit risk for deposits is the risk that, in the event of the failure of a
depository financial institution, a government will not be able to recover deposits or will not be able to
recover collateral securities that are in the possession of an outside party. Kansas Statutes 9-1402 and 9-
1405 require that governments obtain security for all deposits. The Authority manages its custodial credit
risk by requiring the financial institutions to grant a security interest in securities held by third-party custodial
banks.
Concentration of credit risk - Kansas statutes place no limit on the amount the government may invest in any
one issuer as long as the investments are adequately secured under KSA 9-1402 and 9-1405. The Authority
has placed all of its resources with one financial institution. .
Note 4 Capital Assets
The following sunnnarizes the changes in capital assets for the year ended December 31, 2008:
Beginnine: (Decrease) Ending
Balances Increases (Adjustments) Balances
. Non-depreciable capital assets:
Land $ 220.228 $
Depreciable capital assets:
Land improvements 164,281 56,160
Building and improvements 3,366,482 88,074
Equipment 406.292 5.640
Total depreciable capital assets 3.937.055 149.874
Total capital assets 4.157.283 149.874
Accumulated depreciation (2.250.384) (144.458)
Total capital assets, net $ 1.906.899 $ 5.416
$~ $ 220.228
220,441
3,454,556
(5.178) 406.754
(5.178) 4.081.751
(5.178) 4.301.979
4.987 (2.389.855)
$~ $ 1.912.124
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Saline County-City Building Authority
Notes to Financial Statements (continued)
December 31, 2008 and 2007
Note 5 Noncurrent Liabilities
The change in noncurrent liabilities is as follows:
Beginning balance
Addition to accrual
Reduction of accrual
Ending balance
$37,010
7,936
$~
$~
Current portion 25%
Note 6
Defined Benefit Pension Plan
Plan Description - The Authority participates in the Kansas Public Employees Retirement System (KPERS),
a cost-sharing multiple-employer defined benefit pension plan as provided by KSA 744901, et seq. KPERS
provides retirement benefits, life insurance, disability income benefits, and death benefits. Kansas law
establishes and amends benefit provisions. KPERS issues a publicly available financial report that includes
financial statements and required supplementary infonnation. That report may be obtained by writing to
KPERS (611 S Kansas, Suite 100, Topeka, KS 66603) or by calling 1-888-275-5737.
Funding Policy - KSA 74-4919 establishes the KPERS member-employee contribution rate at 4% of
covered salary. The employer collects and remits member-employee contributions according to the
provisions of section 414(h) of the Internal Revenue Code. State law provides that the employer contnbution
rate be determined annually based on the results of an annual actuarial valuation. KPERS is funded on an
actuarial reserve basis. State law sets a limitation on annual increases in the contnbution rates for KPERS
employers. The employer rate established by statute for calendar year 2008 is 5.93%. The Authority's
employer contributions to KPERS for the years ending December 31,2008,2007, and 2006 were $11,048,
$11,832, and $10,516, respectively, equal to the required contnbutions for each year.
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SUPPLEMENTARY INFORMATION
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