Audit Report - 20121
Prepared by the Management
of the
Salina Airport Authority
www.salinaairport.com
CUSIP #794760XXX
3237 Arnold I Salina, KS 674011785-827-3914
www.satinaairport.com I www.flysatina.com
n
COMPREHENSIVE ANNUAL FINANCIAL REPORT
of the
SALINA AIRPORT AUTHORITY
A Component Unit of the
City of Salina, Kansas
For the Fiscal Year Ended December 31, 2012
Prepared by the Management
of the
Salina Airport Authority
www.salinaairport.com
CUSIP #794760XXX
SALINAAMport A :to
RNAirport SALINA P._r,
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SALINA AIRPORT AUTHORITY
TABLE OF CONTENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Fiscal Year Ended December 31, 2012
INTRODUCTORY SECTION
Letter of Transmittal
1 -6
PrincipalOfficers ............................................................. ..............................7
Authority Staff Members ................................................. ..............................8
Organizational Chart ........................................................ ..............................9
Certificate of Achievement ............................................... .............................10
Salina Regional Airport Aerial View ............................... ..............................1 l
FINANCIAL SECTION
Independent Auditors' Report ..............................................
..........................12 -14
Management's Discussion and Analysis ............................
..........................15 -22
Statements of Net Position ...................................................
..........................23 -24
Statements of Revenues, Expenses and
Supplemental Information
Changesin Net Assets .................................................. .............................25
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Statements of Cash Flows (Direct Method) ......................... ..........................26
Notes to Financial Statements
-27
-44
.............................................. ..........................28
Supplemental Information
Schedules of Revenues, Expenses and Changes in Net Position ................45
-47
Capital Expenditures ......................................................... ..........................48
-49
General Obligation Improvement Bonds — Series 2005 -A .........................50
General Obligation Improvement Bonds — Series 2007- A .........................51
General Obligation Improvement Bonds — Series 2009- A .........................52
General Obligation Improvement Bonds — Series 2009 -B .........................53
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General Obligation Improvement Bonds — Series 2011 - 1 ..........................54
General Obligation Improvement Bonds — Series 2011 -B .........................55
Special Assessment Debt -Street and Utility Improvement .........................56
Special Assessment Debt - Sanitary Sewer Extension .... .............................57
Financing Lease Payable ................................................ .............................58
Insurancein Force .......................................................... .............................59
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STATISTICAL SECTION
Statistical Table of Contents
Total Annual Revenues, Expenses and Changes in Net Position History ..... 61-62
Change in Cash and Cash Equivalents History .................... ..........................63 -64
Capital Expenditure History ............................................. .............................65
General Obligation Debt Service Coverage ...................... .............................66
Local Government Mill Levy Rates, Direct and Overlapping .......................67
Principal Customers .......................................................... .............................68
MillLevy Revenue ........................................................... .............................69
Air Traffic, Fuel Flowage, and Enplanement Trends ....... ......:......................70
PrincipleEmployers .......................................................... .............................71
Government Employees by Function ................................ .............................72
Saline County Population and Economic Statistics .......... .............................73
Saline County Largest Taxpayers and Tax Collection Statistics ...................74
COMPLIANCE
Independent Auditor's Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit
of Financial Statements Performed in Accordance with
Government Auditing Standards ............................ ............................... 75 -76
Independent Auditor's Report on Compliance
For Each Major Program and On Internal Control Over Compliance
Required by OMB Circular A -133 ............................ ..........................77
-78
Schedule of Expenditures of Federal Awards ................... .............................79
Notes to Schedule of Expenditures of Federal Awards ... .............................80
Summary Schedule of Prior Audit Findings .................... ..:..........................81
Schedule of Findings and Questioned Costs .................... .............................82
CorrectiveAction Plan ..................................................... .............................83
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I SA L INA A rrport
Chairman Vice Chairman Sec ,y T..,.., Past chairman
Daran Neuschahr Jeff Maes Angela Cable Mike HOpwk Or. Randy Hassler
E..ti. Director Wmothy F. Rages, A.A.E.
Mgcaf Administration &Finance Michelle R.g anwo,C.M. Mgr.of Ndtm",Cwstructimn80pvatiaw Renny Bieker
Mgr. of PublicAMairs B C ouniwtiens Melissa Mcco, &wrd AMemey Greg A. Bengtson
June 19, 2013
Salina Airport Authority Board of Directors
3237 Arnold Ave.
Salina, KS 67401
To the Board of Directors of the Salina Airport Authority:
The Comprehensive Annual Financial Report (CAFR) of the Salina Airport Authority (the "Authority")
for the fiscal year ended December 31, 2012 is hereby submitted in accordance with the Kansas Statutes
Annotated ( K.S.A. 27 -324). As required by the statute, the City of Salina will be famished copies of the
Authority's 2012 CAFR. Responsibility for both the accuracy of the data presented and the
completeness and fairness of the presentation, including all disclosures, rests with the Executive Director
of the Authority. To the best of our knowledge and belief, the data as presented is accurate in all
material aspects, is presented in a manner designed to fairly set forth the fiscal position and results of the
operation of the Authority as measured by its financial activity, and all disclosures necessary to enable
the reader to gain maximum understanding are included in the report.
This CAFR is presented in accordance with generally accepted accounting principles (GAAP) and
pursuant to K.S.A. 27 -324, an audit of the books, accounts and financial statements has been completed
by the Authority's independent certified public accountants, Clubine and Rettele, Chartered. The
independent audit is in accordance with the Kansas Municipal Audit Guide, the Government Auditing
Standards issued by the Comptroller General of the United States, and, if applicable, the provisions of
the Office of Management and Budget Circular A -133, "Audits of States, Local Governments and
Nonprofit Organizations ".
GAAP requires that management provide an overview and analysis to accompany the financial
statements in the form of a Management Discussion and Analysis (MD &A). It is recommended that this
letter of transmittal be read in conjunction with the MD &A, which can be found immediately following
the report of the independent auditor in the Financial Section of this report.
REPORTING ENTITY
The Salina Airport Authority is a body corporate and politic. The Authority was created by the City of
Salina in April 1965 (Sec. 4 -16, Salina City Code) pursuant to the authority granted by the City by the
surplus property and public airport authority act of the State of Kansas ( K.S.A. 27 -315 et seq.) The
Authority was created for the purpose of accepting as surplus property portions of the former Schilling
A.F.B., which was closed by the United States Department of Defense in June 1965. By quitclaim deed
Ithe Authority received over 2,900 acres of land and numerous buildings for the purpose of operating and
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developing the Salina Regional Airport and the Salina Airport Industrial Center. The Authority is
managed and controlled by a five - member Board of Directors appointed by the Salina City Commission.
The Board appoints the Executive Director, who is the chief executive officer of the Authority. The
Executive Director hires the remaining employees of the Authority. The Executive Director and his staff
of nineteen employees manage and operate the Salina Regional Airport and the Salina Airport Industrial
Center.
The Salina Regional Airport is the only commercial service airport serving Salina/Saline County and the
24 -county area, which comprises north central Kansas. The Airport also services the corporate,
business, private aviation and flight training needs of industry, business and individuals in the area. The
Airport is also used by Kansas State University at Salina (KSUS). The campus of KSUS is located
adjacent to the Airport and is one of the nation's top five aviation programs. The college offers degrees
in professional flight training, airframe and power plant maintenance, avionics technology and airport
management.
The Salina Regional Airport and Airport Industrial Center is home for over 70 businesses and
organizations. Forty-six of the businesses and organizations are tenants of the Authority. 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
and the Salina Area Chamber of Commerce for the retention of existing business and industry and the
recruitment of new business and industry.
ECONOMIC CONDITIONS AND OUTLOOK
Local Economy
The Salina/Saline County economy has continued to demonstrate economic strength, as compared to
other regions of the state. In fact, Salina has long been considered the employment hub of North Central
Kansas with nearly 5,000 employees commuting daily to Salina from outside the county. The hub draws
from a large 13 -county labor pool of 44,919 individuals. Even during these times of economic
challenges, the area's unemployment rate has remained below the national average. At the end of 2012
the City's unemployment rate was 6.1 %. Salina's visitor count during 2012 is estimated at over
610,000. Recently, lodging revenue reached a record high of over $20 million. Growth in the areas of
manufacturing, transportation, finance, real estate, insurance, services and retail trade; confirm Salina's
position as one of Kansas' strongest regional economic centers. Collectively, Salina retail sales are
pushing above $900,000 million and towards the $1 billion threshold annually.
The City of Salina benefits from its location at the junction of Interstate Highways 70 and 135. This
convenient location has drawn numerous national and regional companies to open manufacturing or
distribution centers in or adjacent to the City. Such companies include Schwan's Global Supply Chain,
Inc., Salina Vortex, GeoProbe, Bergkamp, Kasa Industrial Controls, Premier Pneumatics, Great Plains
Manufacturing, PKM Steel, Crestwood Cabinets, McShares, Inc., Pepsi Cola, ElDorado Bus, Exide
Battery, Advance Auto Parts Distribution Center, and Philips Lighting. 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.
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I The City serves as a 24- county regional trade center for north central Kansas. Many individuals and
businesses within a 70 -mile radius travel to the City to purchase consumer goods and services. This
designation as a regional trade center is supported by the fact that the City had the third highest "trade
pull factor" of all Kansas first class cities in 2012 according to Kansas State University. City trade pull
factor is computed by dividing the per capita sales tax of a city by the statewide per capita sales tax.
Saline County is located in the center of one of the most productive agricultural areas in the United
States. hi 2007 -2008, 750 fames were located on 430,000 acres. Farm crops were valued at over $38
million harvested on 210,910 acres. Cattle and milk produced was valued at over $19 million.
Salina is a city centered more on industry than agriculture. Currently, there are approximately 100
manufacturing and processing companies located in the City. The City, Saline County, the Chamber
of Commerce, and the Salina Airport Authority have developed several economic incentives which can
be offered as inducements to opening industrial facilities. These include property tax abatement for
basic industry, the waiving of building permit and inspection fees, refunding of sales tax paid on
machinery and equipment and providing training for employees through the Salina Area Technical
I 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.
Several major commercial projects are currently under construction in Salina. Dillon Companies, Inc., a
subsidiary of Kroger Company, recently completed and opened a 77,000 square foot facility. Dick's
' Sporting Goods is in the process of rehabilitating a facility formerly occupied by Sutherland Lumber
Company. The location will be shared with a Marshalls clothing store. In addition, several new
restaurants have either opened or are under construction, including Olive Garden, Longhorn Steakhouse,
' Starbucks and Taco Bell. Daimam steakhouse doubled in size at a new location. Unified School
District No. 305 has completed construction of a new maintenance and school service facility,
consolidating operations from 3 separate locations.
The community has 1,200 acres of industrial sites available in North Salina, the South Industrial District,
and the Airport Industrial Center. Sites range in size from 1 -to 240 acres, and are available for aviation,
manufacturing and distribution and warehouse businesses.
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Economic Condition of the Airport and Airport Industrial Center
As of December 31, 2012, over 70 businesses and organizations at the Salina Regional Airport and
Airport Industrial Center employed over 3,700 employees with a combined payroll of nearly $140
million.
Future Economic Outlook
The future economic outlook for both Salina and the Authority continues to look favorable. Continued
growth in service, retail and manufacturing sectors is expected. The Salina Area Chamber of Commerce
forecasts that approximately 700 net, new jobs per year will be added to the economy over the next two
to three years.
Salina Aviation Service Center businesses including Kansas State University at Salina continue to work
on facility expansion plans. Salina Airport Industrial Center businesses including Schwan's Food
Manufacturing Inc. and the Kansas Army National Guard at Salina, also continue to work on facility
expansions. Recently two new businesses began operations in the Airport Industrial Center; Universal
Forest Products and Tischlerie- -Fine Woodworking, LLC. Collectively, these expansions have resulted
in additional jobs and payroll.
The Salina Airport Authority in partnership with the Salina Area Chamber of Commerce, the City of
Salina and Saline County, continue to execute an economic development strategic plan that includes
specific goals and tasks intended to result in job growth, increased primary jobs payroll, new capital
investment and the leasing of available space at the Airport Industrial Center. The Airport Authority
contracts the services of Zimmer Real Estate Services, for national and international recruitment of
aerospace business to locate at the SLN Aviation Service Center.
FINANCIAL CONTROLS
The Authority follows generally accepted accounting principles applicable to governmental unit
enterprise funds. Accordingly, the financial statements are prepared on the accrual basis.
Management of the Authority is responsible for establishing and maintaining an internal control
structure designed to ensure that the assets of the Authority are protected from loss, theft, or misuse and
to ensure 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 requires estimates and judgments by management.
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LONG -TERM FINANCIAL PLANNING
Increasing the Authority's unreserved, undesignated fund balance has been a priority of the organization.
The Authority Board of Directors has a stated plan of establishing and maintaining the Authority's cash
' reserve fimd equal to six month's operating expenses or $1.2 million.
Also, as part of the strategic plan of recruiting business and industry to fill available facilities vacated by
Hawker Beechcraft Corporation (HBC), the Authority has developed a systematic method of evaluating
projects including definitive trigger points, lease pro -forma requirements, lease calculation methodology
and other qualitative measures prior to capital improvement projects.
INITIATIVES AND DEVELOPMENT
The top initiative will be the continued leasing of facilities vacated as a result of BBC closing its Salina
operations in 2012. As of December 31, 2012, the Salina Airport Authority had already leased 105,826
sq. ft. of the space vacated by HBC at or above fair market rental rates. Leasing those facilities will
help replace the jobs and payroll lost by the Salina community. It will also mean maintaining and
replacing the lease revenue stream to the Airport Authority's operating budget. This is vital in order for
the Airport Authority to continue to provide the services necessary to operate a world -class airport and
airport industrial center.
The completion of capital improvements to existing facilities and the Airport Industrial Center are also a
top priority. There is a Capital Improvement Program in place that details more than $60 million worth
of projects to take place within the next five to ten years. These improvements will aid the Airport
Authority in filling unused space and continue to offer the superior services and facilities the aviation
community has come to expect from Salina.
Other major initiatives include:
$ Development of a new Salina Regional Airport Master Plan. This report will serve as the
guide for airport improvement projects and development for the next 20 years.
$ Continuation of essential air service development program and activities.
Initiate Unmanned Aerial Systems and Remotely Piloted Vehicle Operations from the
Airport in coordination with K -State Salina and the Federal Aviation Administration.
Maintain intense momentum in recruiting businesses to the Salina Aviation Service Center.
Work with the City of Salina and environmental contractor to begin the remedial
investigation/feasibility study through the entry of a Corrective Action Decision (CAD) by
the KS Department of Health and Environment related to the environmental contamination
caused by military operations at the former Schilling Air Force Base.
Completion of concept design and feasibility work for the Wings Over Salina Air Museum.
:6 Establishment of new Air Traffic Control procedures to take advantage of the improved radar
coverage for civilian and military aircraft operations in the airspace around Salina.
Continuation of support for K -State Salina and their Applied Aviation Research Center and
Unmanned Aerial Systems Program Office.
Support continued growth and development of the Kansas National Guard Great Plains Joint
Training Center.
Upgrades to the Airport's 300,000 gallon underground storage tank fuel farm including
enhanced metering and monitoring systems, fuel filtering system and water separators.
GFOA CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the Salina Airport Authority for its
comprehensive annual financial report for the fiscal year ended December 31, 2011. In order to be
awarded a Certificate of Achievement, a government must publish an easily readable and efficiently
organized comprehensive annual financial report. This report must satisfy both generally accepted
accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report continues to meet the Certificate of Achievement Program's
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
ACKNOWLEDGEMENTS
The support of the Authority's Board of Directors has been instrumental in the preparation of this report.
The Board has been actively involved in the preparation and review of this report and is committed to
responsible and progressive financial reporting.
Also acknowledged is the assistance of the Authority's auditor, Clubine and Rettele, Chartered, the
Authority's accounting advisor, Thomas G. Arnett, CPA, Saline County Clerk's Office, Dennis Lauver,
President of the Salina Area Chamber of Commerce, Rod Franz, Director of Finance for the City of
Salina, Kansas State University Airport Management Intem Nicole Lordemann, and the University of
Kansas Institute for Public Policy and Business Research and the Kansas Department of Human
Resources Labor Market Information Services, in the preparation of this report.
Respectfully submitted,
Timothy F. Rogers, A.A.E.
Executive Director
Salina Airport Authority
cc: The City of Salina Board of Commissioners
Michelle R. Swanson, C.M.
Manager of Administration and Finance
Salina Airport Authority
(THIS PAGE INTENTIONALLY LEFT BLANK)
SALINA AIRPORT AUTHORITY
PRINCIPAL OFFICERS AS OF DECEMBER 31, 2012
Pictured from left to right:
Jeff Mnes, Secretary; Angie Coble, Treasurer; Timothy F. Rogers, Executive Director; Jeffery R. Thompson, Past Chairman; Dr. Randy Hassler,
Chairman; and Doran Neuschafer, Vice- Chairman
AUTHORITY'S COUNSEL
Greg A. Bengtson
Clark, Mize & Linville, Chartered
Salina, Kansas
AUTHORITY'S BOND COUNSEL
Gilmore & Bell
Kansas City, Missouri
AUTHORITY'S FINANCIAL ADVISOR
George K. Baum & Company
Kansas City, Missouri
AUTHORITY'S AUDITOR
Leslie M. Corbett, C.P.A.
Clubine & Rettele, Chartered
Salina, Kansas
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SALINA AIRPORT AUTHORITY
Staff Members as of December 31, 2012
ADMINISTRATIVE STAFF
Timothy F. Rogers, A.A.E.
Michelle R. Swanson, C.M.
Kenny Bicker
Melissa L. McCoy
Donald C. Kneubuhl
Kasey L. Windhorst
Gretchen Engstrom
Executive Director
Manager of Administration and Finance
Manager of Facilities and Operations
Manager of Public Affairs and Communications
Manager of Special Projects
Executive Assistant
Administrative Assistant
FACILITY MAINTENANCE and OPERATIONS
David Sorell — Supervisor
Ron Boyd Rob Pejsha
Kim Colby Dale Mattison
AIRCRAFT RESCUE AND FIREFIGHTING and SAFETY and SECURITY
Alan Mason Andrew Harper
Alan Anderson Kyle Moyer
Bret Wilson
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Salina Airport Authority
Kansas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2011
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
ONCE QFprC�ryl, Jy
'- V:GI€DSTAT�S �y
d c 1)MATIiart ' President
CNiLAG6
Executive Director
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SALINAAMport
SL Nl Aviation
SLNA po Cen ere SALINAArrport
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CLUBINE, INDEPENDENT AUDITORS' REPORT
REMLE
ClimaERID To the Board of Directors
Certi Salina Airport Authority
Ji� Public Acrounumrs
We have audited the accompanying financial statements of the business -type
OW activities of Salina Airport Authority, a component unit of the City of Salina,
Kansas, as of and for the years ended December 31, 2012 and 2011, and the related
' notes to the financial statements, which collectively comprise the basic financial
statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Robert 1. Clubine, CPA
David A. Rettele, CPA Management is responsible for the preparation and fair presentation of these
Jay D. Langley, CPA, CGMA financial statements in accordance with accounting principles generally accepted in
Jon K. Bell, CPA
Leslie M. Corbett, CPA the United States of America; this includes the design, implementation, and
Stacy J. Osner, CPA maintenance of internal control relevant to the preparation and fair presentation of
the financial statements that are free from material misstatement, whether due to
Marci K. Fox, CPA fraud or error.
Linda A. Suelter, CPA
Johnna R. Vosseller, CPA
Auditors' Responsibility
' Our responsibility is to express opinions 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, the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States and the Kansas Municipal Audit and Accounting
Guide prescribed by the Director of Accounts and Reports, Department of
Administration of the State of Kansas. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial statements. The procedures selected
depend on the auditors' judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making
218 South Santa Fe those risk assessments, the auditor considers internal control relevant to the entity's
P.O. Box 2267 preparation and fair presentation of the financial statements in order to design audit
Salina, Kansas
67402 -2267 procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity's internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the
Salina appropriateness of accounting policies used and the reasonableness of significant
785 / 825 -5479 accounting estimates made by management, as well as evaluating the overall
' Salina Fax presentation of the financial statements.
785 / 825 -2446
Ellsworth We believe that the audit evidence we have obtained is sufficient and appropriate to
785 /472-3915 provide a basis for our audit opinions.
Ellsworth Fax
785 /472 -5478
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Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the business -type activities of Salina Airport Authority, as of December 31, 2012 and 2011, and
the changes in financial position and cash flows for the years then ended in accordance with accounting
principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis on pages 15 through 22 be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management about the
methods of preparing the information and comparing the information for consistency with management's
responses to our inquiries, the basic financial statements and other knowledge we obtained during our audit of
the basic financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on Salina Airport Authority's financial
statements. The introductory section, the supplemental information in the financial section and the statistical
section of the table of contents are presented for purposes of additional analysis and are not a required part of
the financial statements. The schedule of expenditures of federal awards is presented for purposes of
additional analysis as required by U.S. Office of Management and Budget Circular A 133, Audits of States,
Local Governments, and Non - Profit Organizations, and is also not a required part of the basic financial
statements.
The supplemental information in the financial section and the schedule of expenditures of federal awards are
the responsibility of management and were derived from and relate directly to the underlying accounting and
other records used to prepare the financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to
prepare the financial statements or to the financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion, the
supplemental information in the financial section and the schedule of expenditures of federal awards are fairly
stated in all material respects in relation to the financial statements as a whole.
The introductory and statistical sections of the table of contents have not been subjected to the auditing
procedures applied in the audit of the basic financial statements and, accordingly, we do not express an
opinion or provide any assurance on them.
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Other Reporting Required by Government Auditing Standards
■ In accordance with Government Auditing Standards, we have also issued our report dated June 18, 2013, on
our consideration of Salina Airport Authority's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters.
■ The purpose of that report is to describe the scope of our testing of internal control over financial reporting
and on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering Salina Airport Authority's internal control over financial reporting and
■ compliance.
0
Salina, Kansas
June 18, 2013
CLUBINE AND RETTELE, C14ARTERED
46i"gc �c� Kral,&, V-Vk /r d
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Net Position
(Decrease) in Net Position (95,175) (1,052,810)
Net Position, beginning of period 26,606,642 27,659,452
Net position, end of period $ 26,511,467 $ 26,606,642
The accompanying notes are an integral part of these financial statements
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FINANCIAL
FY2012
■
SALINA AIRPORT AUTHORITY
STATEMENTS OF REVENUES, EXPENSES and CHANGES IN NET POSITION
As of December 31, 2012 and December 31,
2011
■
January I to December 31
2012
2011
Operating Revenues
K
Airfield $
737,563 $
781,290
Building and land rent
1,365,853
1,491,710
Other revenue
56,752
33,965
Total Operating Revenues
2,160,168
2,306,965
Operating Expenses
Administrative
1,245,267
1,385,079
Maintenance
869,091
771,450
.�
Total Operating Expenses
2,114,358
2,156,529
Revenues in excess of expenses before depreciation
45,810
150,436
Depreciation
2,514,587
2,407,566
Operating Loss Before Non - Operating Income and Expenses
(2,468,777)
(2,257,130)
Non - Operating Income and (Expenses)
Mill levy
1,767,338
1,795,660
Interest on investments and financing lease
1,500
9,856
Interest expense
(1,175,063)
(973,882)
Bond Issue Costs
(103,580)
Gain (loss) on sale of assets
-
19,039
Total Non - Operating Income and (Expenses)
593,775
747,093
Loss before Capital Contributions
(1,875,002)
(1,510,037)
Capital Contributions
1,779,827
457,227
Net Position
(Decrease) in Net Position (95,175) (1,052,810)
Net Position, beginning of period 26,606,642 27,659,452
Net position, end of period $ 26,511,467 $ 26,606,642
The accompanying notes are an integral part of these financial statements
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SALINA AIRPORT AUTHORITY
STATEMENTS OF CASH FLOWS
(DIRECT METHOD)
As of December 31, 2012 and December 31, 2011
CASH BALANCE - December 31 $ 1,660,132 $ 5,308,083
The Authority received capital equipment having a fair value of $13,546 in 2011 and $24,229 in 2012. This
non -cash transaction is included in CAPITAL CONTRIBUTIONS on the STATEMENT OF REVENUES,
EXPENSES AND CHANGES IN NET POSITION and in Equipment acquisitions in Note C but it is not
included in this STATEMENT OF CASH FLOWS.
(continued)
The accompanying notes are an integral part of these fmancial statements
26
January 1 to December 31
2012
2011
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from providing services
$ 2,091,754
$ 2,466,747
Cash paid to employees for services
(784,733)
(812,393)
Cash paid to suppliers for goods and services
(1,345,746)
(1,315,871)
Net Cash Provided (Used) in Operating Activities
(38,725)
338,483
CASH FLOWS FROM CAPITAL AND RELATED FINANCING
ACTIVITIES
Acquisition and construction of property, plant and equipment
(4,789,419)
(1,962,366)
Proceeds from capital grants
1,755,598
443,681
Proceeds from property tax
1,767,338
1,795,660
Proceeds (expenses) from sale of capital assets
-
19,039
Principal payments on debt
(1,154,007)
(12,756,306)
Proceeds of new borrowing
14,060,137
Bond issue costs paid
(103,580)
Interest paid on long -term debt
(1,190,236)
(754,537)
Net Cash Provided (Used) in Capital and Related
Financing Activities
(3,610,726)
741,728
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on deposits
1,500
9,856
INCREASE (DECREASE) IN CASH
(3,647,951)
1,090,067
CASH BALANCE - January 1
5,308,083
4,218,016
CASH BALANCE - December 31 $ 1,660,132 $ 5,308,083
The Authority received capital equipment having a fair value of $13,546 in 2011 and $24,229 in 2012. This
non -cash transaction is included in CAPITAL CONTRIBUTIONS on the STATEMENT OF REVENUES,
EXPENSES AND CHANGES IN NET POSITION and in Equipment acquisitions in Note C but it is not
included in this STATEMENT OF CASH FLOWS.
(continued)
The accompanying notes are an integral part of these fmancial statements
26
SALINA AIRPORT AUTHORITY
STATEMENTS OF CASH FLOWS
(DIRECT METHOD)
(continued)
As of December 31, 2012 and December 31, 2011
RECONCILIATION OF OPERATING LOSS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
OPERATING LOSS
ADJUSTMENTS RECONCILING OPERATING LOSS
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation
Basis of assets sold
CHANGES IN ASSETS AND LIABILITIES:
Decrease (Increase) in accounts receivable
Decrease (Increase) in prepaid expense
Decrease (Increase) in inventory
Increase (Decrease) in accounts payable - operations
Increase (Decrease) in accrued payroll expenses
Increase (Decrease) in accrued property tax and special assessments
Increase (Decrease) in unearned rental income
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
January I to December 31
2012 2011
$ (2,468,777)
2,514,587
(27,727)
(7,991)
(1,538)
15,228
(14,857)
(6,963)
(40,687)
S (38,725)
The accompanying notes are an integral part of these financial statements
$ (2,257,130)
2,407,566
103,565
16,964
529
(8,151)
7,147
11,776
56,217
$ 338,483
27
lJ
1
1 Salina Airport Authority
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
1 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
1 The Salina Airport Authority (Authority) was established by the City of Salina, pursuant to Chapter
27, Article 3, of the Kansas Statutes Annotated for the purpose of acquiring surplus federal
government property, specifically the former Schilling Air Force Base, located near the City of
Salina. The Authority operates, maintains, and develops the Salina Regional Airport and the Salina
Airport Industrial Center. The Authority is controlled by a five - member Board of Directors
appointed by the Salina City Commission and, in accordance with Governmental Accounting
1 Standards Board (GASB) Statement No. 61, the Authority is considered to be a component unit of
the City of Salina. The Authority is discreetly presented in the City's comprehensive annual
financial reports.
1 B. Measurement Focus, Basis of Accounting and Basis of Presentation
i The accompanying financial statements have been prepared in conformity with generally accepted
accounting principles (GAAP) for state and local governments. The Governmental Accounting
Standards Board (GASB) is the accepted standard- setting body for establishing governmental
accounting and financial reporting principles for state and local governments in the United States of
America.
1 The Authority consists of a single enterprise fund. Enterprise funds are classified as proprietary
funds by the GASB and are accounted for using a total economic resource measurement focus. The
enterprise fund is used to account for operations that are financed and operated in a manner similar to
private business enterprises. The intent of the Authority is that the costs of providing services on a
continuing basis be recovered through user fees and rents. The financial statements are prepared on
the accrual basis of accounting. Under the accrual basis, revenues are recognized as earned and
expenses as incurred.
1 Revenues from airlines, fuel flowage fees, building and land rents, and rental car commissions are
reported as operating revenues. Transactions, which are capital, financing or investing related, and
the sale of assets, related to economic development, are reported as non - operating revenues. All
expenses related to operating the Airport and Industrial Center are reported as operating expenses.
Interest expense and financing costs are reported as non - operating expenses.
During the fiscal year ended December 31, 2012, the Authority adopted the following new
accounting standards issued by GASB:
1 Effective January 1, 2012, the Authority implemented the provisions of GASB No. 62 — Codification
of Accounting and Financial Reporting Guidance Contained in Pre - November 30, 1989 GASB and
AICPA Pronouncements. Implementation of this statement required modification to the disclosure in
1 the Summary of Significant Accounting Policies and resulted in the Authority increasing the amount
28
1
FINANCIAL FY 2012
previously reported in 2011 for interest expense and reducing the net amount of long term liabilities
by $18,892. This restatement was necessary to amortize bond discounts over the life of* the
associated debt.
In addition, the Authority also implemented GASB No. 63 — Financial Reporting of Deferred
Outflows of Resources, Deferred Inflows of Resources, and Net Position and GASB No. 65 — Items
Previously Reported as Assets and Liabilities. GASB 63 resulted in the replacement of the
Authority's Statement of Net Assets with a Statement of Net Position. The Authority reviewed all
financial statement elements and determined none to be deferred outflows or inflows of resources.
The Authority determined a previously reported deferred liability (deferred mill levy receivable) did
not meet the new standard's definition of either a liability or a deferred inflow of resources.
Therefore, this change resulted in the restatement of the 2011 financial statements by removing the
$1,638,423 in deferred mill levy liability and the offset in the same amount as a mill levy receivable.
The restatement did not result in any change to the Net Position.
GASB 65 required the Authority to restate certain items previously reported as assets and liabilities.
The Authority's bond issue costs were restated as expenses of the current period as opposed to
amortizing the costs over the life of the bond issue and reporting the unamortized portion as an asset.
This restatement resulted in an increase in bond issue costs previously reported for 2011 by $74,588.
Additionally, this required restatement of the previously reported beginning net position to reflect the
expense of certain previously deferred bond issuance expenses and resulted in a reduction of
$130,729 to the Net Assets position reported at December 31, 2011.
C. Assets, Liabilities and Equity
1. Cash and Investments
The Authority'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 date of acquisition. The
Authority held no investments during these years.
2. Receivables
Accounts Receivable. The Authority records revenues when services are provided. All receivables
are shown net of an allowance for uncollectibles.
3. Inventories
The Authority maintains no significant inventory of office and maintenance supplies. These items
are expensed as purchased and no inventory is recorded in these financial statements. The Authority
uses the consumption approach in valuing inventories of Avgas sold for retail. That is, the purchase
is recorded as an asset on the cost basis and the expenditure is deferred until the inventory is
consumed under the weighted average cost method.
4. Prepaid items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items.
29
FINANCIAL FY 2012
Capital Contributions and Net Assets
Airport Improvement Program - Certain expenditures for airport capital improvements are
significantly funded through the Federal Aviation Administration's Airport Improvement Program
(AIP) and the Kansas Department of Transportation's Airport Improvement Program (KAIP), with
certain matching funds of the Authority. Capital funding provided under the AIP grant programs are
considered earned as the related allowable expenditures are incurred. Grants received under the AIP
programs are reported in the Statement of Revenues, Expenses and Changes in Net Position, as non-
operating revenues and expenses as capital contributions.
Defense Reutilization Marketing Office Program - The Authority is a participant in the Defense
Reutilization Marketing Office (DRMO) program. The DRMO entity disposes of United States
military surplus property. The property is first offered for reufilization with the Department of
Defense, transferred to other federal agencies or donated to state and local governments.
The Authority's policy is to record fixed assets having a cost (or by implication fair value) in excess
of $1,000 at acquisition. The Authority's capitalization policy with respect to fixed assets is to
expense fixed assets costing $1,000 or less. Freight or other expenses necessary to put the asset into
service equal to or greater than $1,000, are capitalized.
The Authority records United States military donated assets having an original cost by the military of
$5,000 or less at $1 in order to meet the tracking requirement and will memo in the asset file the
original cost because the Authority believes the fair value of these is less than $1,000 each.
The Authority estimates the donated items to have a value equal to 20% of cost. Items having an
original cost by the military of less than $5,000 will be valued at $1 with memo of original cost.
Items having an original cost of more than $5,000 will be valued at 20% of original cost rounded to
the nearest $1,000 with a memo to the file of the original cost.
If the Authority receives reliable written information indicating this procedure has produced a value
significantly different from fair value, an adjustment to that value will be made.
Donated DRMO property with a value in excess of $1,000 is reported in the Statement of Revenues,
Expenses and Changes in Net Position, as non - operating revenues and expenses as capital
contributions.
The Federal Aviation Administration, as the oversight agency, requires that the Airport track all the
contributed property and the property must be held for at least one year prior to disposition.
5. Capital Assets
Capital assets purchased or constructed are recorded at cost. The cost of normal maintenance and
repairs that do not add to the value of the assets or materially extend assets' lives are not included in
capital assets cost. Capital assets donated to the Authority are recorded at their estimated fair value
at the date of donation. Donated assets include property and equipment transferred to the Authority
from the United States of America, September 9, 1966 and recorded at fair value at that date. The
Authority maintains a capitalization threshold of $1,000.
30
Capital assets are depreciated using the straight -line method over the following estimated useful
lives:
Assets
Years
Buildings
5-50
Equipment
5-10
Vehicles
7-10
Airfield
10-30
6. Compensated Absences
Substantially all full -time employees receive compensation for vacations, holidays, illness and
certain other qualifying absences. The number of days compensated for various categories of
absence is generally based on length of service. Liabilities relating to these absences are recognized
as incurred and included in accrued expenses. Per the Authority's compensation policy, the paid
time off is not able to accrue beyond a one year period, therefore all such liabilities are recorded as
current. The amount accrued for such liabilities at December 31, 2012 and 2011 was $49,566 and
$63,760 respectively.
Balance
January 1,
Balance
December 31,
2012 Increase Decrease 2012
63,760 $ 7,465 $ 21,659 $
49,566
Balance Balance
January 1, December 31,
2011 Increase Decrease 2011
$ 56,023 $ 9,835 $ (2,098) $ 63,760
II. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Cash -Basis Law (KSA 10 -1113)
The Authority was in compliance with this law at all times during the year.
B. Depository Security (KSA 9 -1402)
The Authority's funds were adequately secured at all times during the year.
31
I
I
DETAILED NOTES
A. Deposits
As of December 31, 2012 and 2011, the Authority had cash and cash equivalents as listed below:
Security Provided by Depositories $ 15,041,683 $ 19,670,378
The Authority did not have any activity in investment -type assets.
' The Authority's policies relating to deposits and investments are governed by various Kansas
Statutes (KSA). Those statutes specify the type of deposits and investments as well as the securing
of those deposits and investments.
Interest rate risk — In accordance with Kansas Statute 12 -1675, the Authority manages its exposure
to interest rate fluctuations by limiting all time investments to maturities of less than two years.
Credit risk — State law limits the amount of credit risk by restricting governments to specific
investment types as listed in KSA 12 -1675. The Authority's policy is to place idle funds in
' certificates of deposit, United States obligations, and the Kansas Municipal Investment Pool (KMIP).
The KMIP was rated AAAf/S 1+ by Standard & Poor's as of the date of this report. The KMIP is
permitted to invest in fully collateralized certificates of deposit, certain obligations of the United
States, certain repurchase /reverse repurchase agreements, and other types of investments. Maturity
information released by the KMIP showed that the investment pool consisted of investment with a
maturity date of 365 days or less.
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. The custodial credit
risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a
government will not be able to recover the value of investment or 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
32
December 31,
2012
2011
Cash Balances
Cash
$ 1,632,418 $
5,308,083
Less undeposited and petty cash
(11909)
(21,565)
Add uncleared checks
29,623
5,949
Bank Balance
1,660,132
5,292,467
'
Less FDIC Coverage
500,000
500,000
Balances Securable by Collateral
$ 1,160,132 $
4,792,467
Security Provided by Depositories $ 15,041,683 $ 19,670,378
The Authority did not have any activity in investment -type assets.
' The Authority's policies relating to deposits and investments are governed by various Kansas
Statutes (KSA). Those statutes specify the type of deposits and investments as well as the securing
of those deposits and investments.
Interest rate risk — In accordance with Kansas Statute 12 -1675, the Authority manages its exposure
to interest rate fluctuations by limiting all time investments to maturities of less than two years.
Credit risk — State law limits the amount of credit risk by restricting governments to specific
investment types as listed in KSA 12 -1675. The Authority's policy is to place idle funds in
' certificates of deposit, United States obligations, and the Kansas Municipal Investment Pool (KMIP).
The KMIP was rated AAAf/S 1+ by Standard & Poor's as of the date of this report. The KMIP is
permitted to invest in fully collateralized certificates of deposit, certain obligations of the United
States, certain repurchase /reverse repurchase agreements, and other types of investments. Maturity
information released by the KMIP showed that the investment pool consisted of investment with a
maturity date of 365 days or less.
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. The custodial credit
risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a
government will not be able to recover the value of investment or 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
32
FINANCIAL Fv2012
institutions to grant a security interest in securities held by third -party custodial banks. Monies in the
Kansas Municipal Investment Pool are not required to have pledged securities.
Concentration of credit risk— This is the risk of loss attributed to the magnitude of a government's
investment in a single issuer. The Authority manages this risk by placing funds with financial
institutions only after contacting all eligible institutions in the taking area and monies in the Kansas
Municipal Investment Pool are diverse according to the policies of the investment pool.
B. Receivables
Receivables as of year-end, including the applicable allowance for uncollectible accounts, are as
follows:
December 31,
2012 2011
Receivables
Accounts $ 135,370 $ 107,643
Less: allowance for uncollectibles (984) (984)
Total $ 134,386 $ 106,659
33
C. Capital Assets
The following is a summary of the changes in capital assets during the current and preceding year:
Balance Balance
January 1, December 31,
2012 Additions Dispositions Reclassi 2012
Capital Assets
Non - Depreciable
Land $ 10,818,059 $ 306,847 $
Construction in progress 1,570,190 244,851
Total Non-Depreciable 12,388,249 551,698
Depreciable
$ (1,252,723) $ 9,872,183
(1,080,732) 734,309
(2,333,455) 10,606,492
Buildings and improvements
22,481,252
2,911,756
- 433,441
25,826,449
Airfield and improvements
36,250,825
2,225,668
- 647,291
39,123,784
Equipment
3,716,943
217,548
- -
3,934,491
Total Depreciable
62,449,020
5,354,972
- 1,080,732
68,884,724
Total Non - Depreciable &
Depreciable
$ 74,837,269
$ 5,906,670 $
- $ (1,252,723) $
79,491,216
Accumulated depreciation
Buildings and improvements $ (7,380,568) $ (952,677) $
Airfield and improvements (16,736,155) (1,287,777)
Equipment (2,456,657) (274,133)
Total Accumulated
Depreciation (26,573,380) (2,514,587)
Total Capital Assets $ 48,263,889 $ 3,392,083 $
$ $ (8,333,245)
(18,023,932)
(2,730,790)
(29,087,967)
$ (1,252,723) $ 50,403,249
34
FINANCIAL FY 2012
Balance Balance
January 1, December 31,
2011 Additions Dispositions Reclass 2011
Capital Assets
Non - Depreciable
Land $ 10,449,502 $ 368,557 $
Construction in progress 1,205,379 1,349,037
Total Non - Depreciable 11,654,881 1,717,594
Depreciable
- $ - $ 10,818,059
- (984226) 1,570,190
- (984,226) 12,388,249
Buildings and improvements
22,368,837
112,417
- - 22,481,252
Airfield and improvements
35,070,665
195,933
- 984227 36,250,825
Equipment
3,664,439
52,504
- - 3,716,943
Total Depreciable
61,103,941
360,854
- 984227 62,449,020
Total Non - Depreciable &
Depreciable
$ 72,758,822
$ 2,078,448 $
- $ - $ 74,837,269
Accumulated depreciation
Buildings and improvements $ (6,487,737) $ (892,831) $
Airfield and improvements (15,485,968) (1,250,187)
Equipment (2,192,109) (264,548)
Total Accumulated
$ $ (7,380,568)
(16,736,155)
(2,456,657)
Depreciation
(24,165,814)
(2,407,566)
(26,573,380)
Total Capital Assets
$ 48,593,008
$ (329,118) $
$ $ 48,263,889
35
I
1
1
Current
1
D. Long -Term Liabilities
Balance
Maturities
Following is a summary of changes in long -term liabilities during
the current and preceding years:
1
December 31,
December 31,
1
2011
Additions
Reductions
2011
2011
ong -term Liabilities
Current
1
Balance
General obligation bonds
Balance
Maturities
$ 1,040,000
$ 26,170,000
January 1,
Less unamortized discount
December3l,
December3l,
(18,892)
(342,123)
2012 Additions
Reductions
2012
2012
40,238
Long -term Liabilities
42,941
Special assessment debt
145,300
-
'
General obligation bonds
$ 26,170,000 $
$ 1,090,000
$ 25,080,000
$ 895,000
11,675,000
Less unamortized discount
(342,123) -
(18,892)
(323,231)
-
(22,534)
Financing lease payable
245,558 -
42,941
202,617
45,826
1
Special assessment debt
125,013
21,066
103,947
21,876
Total Long -Term Liabilities
$ 26,198,448 $ -
$ 1,135,115
$ 25,063,333
$ 962,702
Current Maturities
(1,154,007)
(962,702)
'
Long Term Liability Net
$ 25,044,441
$ 24,100,631
1
1
Current
Balance
Balance
Maturities
January 1,
December 31,
December 31,
1
2011
Additions
Reductions
2011
2011
ong -term Liabilities
General obligation bonds
$ 12,885,000
$ 14,325,000
$ 1,040,000
$ 26,170,000
$ 1,090,000
Less unamortized discount
(92,846)
(268,169)
(18,892)
(342,123)
-
1 Financing lease payable
285,796
40,238
245,558
42,941
Special assessment debt
145,300
-
20,287
125,013
21,066
General obligation temporary notes
11,675,000
-
11,675,000
-
un
1 Less a.mortized discount
(22,534)
(22,534)
_
otal Long -Term Liabilities
$ 24,875,716
$ 14,056,831
$ 12,734,099
$ 26,198,448
$ 1,154,007
Current Maturities
(1,100,524)
(1,154,007)
1 ong Term Liability Net
$ 23,775,192
$ 25,044,441
36
The following is a detailed listing of the Authority's long -term debt including general obligation
bonds, financing lease and special assessment debt at December 31, 2012:
Total Long Term Debt
Interest Expense in 2012 is as follows:
General Obligation Bonds
Special Assessment Debt
Financing Lease
Amortization of Bond Discount
Total Debt Interest Expense
$ 25,063,333
1,136,710
4,876
14,585
18,892
$ 1,175,063
37
Original Issue
Interest Rates
Bonds Outstanding
General Obligation Bonds
General Obligation 2005 -A, due 2020
3,635,000
4.75% to 5.25%
2,675,000
General Obligation 2007 -A, due 2022
1,005,000
4.60% to 6.00%
745,000
General Obligation 2009 -A, due 2029
2,025,000
4.31%
2,025,000
General Obligation 2009 -B, due 2026
6,080,000
3.00% to 5.50%
5,310,000
General Obligation 2011 -A, due 2030
11,820,000
4.64%
11,820,000
General Obligation 2011 -B, due 2031
2,505,000
4.28%
2,505,000
Less unamortized bond discount
(323231)
Total General Obligation Debt
24,756,769
Financing Lease, due December 2016
425,000
6.609%
202,617
Special Assessment Debt
Airport Industrial Center, due 2016
565,235
3.79%
85,281
Hangar 600 Sanitary Sewer, due 2021
27,599
4.47%
18,666
Total Special Assessment Debt
103,947
Total Long Term Debt
Interest Expense in 2012 is as follows:
General Obligation Bonds
Special Assessment Debt
Financing Lease
Amortization of Bond Discount
Total Debt Interest Expense
$ 25,063,333
1,136,710
4,876
14,585
18,892
$ 1,175,063
37
I
I
I
U
Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies
and rental revenues:
Year
2013
2014
2015
2016
2017
2018 -2022
2023 -2027
2028 -2031
Bonds
Outstanding
895,000
925,000
955,000
990,000
1,030,000
5,840,000
7,290,000
7,155,000
$ 25,080,000
Interest Due
1,096,914
1,067,866
1,036,264
1,001,531
963,874
4,129,521
2,683,322
819,200
$ 12,798,492
Total
1,991,914
1,992,866
1,991,264
1,991,531
1,993,874
9,969,521
9,973,322
7,974,200
$ 37,878,492
Annual debt service requirements for Financing Lease payable rental revenues:
Year
Principal Due
Interest Due
Total
2013
45,826
12,646
58,472
2014
48,905
9,567
58,472
2015
52,190
6,282
58,472
2016
55,696
2,776
58,472
$ 202,617
$ 31,271
$ 233,888
Annual debt service requirement to maturity for Special Assessment Debt to be paid from rental
revenue:
Year
2013
2014
2015
2016
2017
2018 -2021
Loan Principal
21,876
22,717
23,590
24,497
2,061
9,205
$ 103,946
Interest Due
4,067
3,226
2,352
1,446
504
1,051
$ 12,646
Total
25,943
25,943
25,942
25,943
2,565
10,256
$ 116,592
CM
FINANCIAL Fv2012
E. Capital Contributions and Net Assets
Since its inception, the Authority has received capital contributions through Federal and State grants
as follows:
Inception to
Date 2012
2011
Federal $ 28,708,879 $1,755,598
$ 365,328
State 1,593,963
78,353
Total $30.302.842 $1.755.
The Authority has designated $90,000 to be used as an insurance increase reserve or to accelerate
future debt service payments. As of December 31, 2012, the reserve had been funded but not used.
IV. OTHER INFORMATION
A. Defined Benefit Pension Plan
Plan description — The Authority participates in the Kansas Public Employees Retirement System
( KPERS). The plan is a cost - sharing multiple - employer defined benefit pension plan as provided by
Kansas statutes (KSA 74 -4901 et seg). 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 information. Those reports may be obtained by writing to KPERS (611 S. Kansas
Avenue, Suite 100, Topeka, Kansas 66603 -3803) or by calling 1 (888) 275 -5737.
Funding policy — KSA 74 -4919 establishes the KPERS member - employee contribution rate at 4%
for Tier 1 and 6% for Tier 2 employees 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 contribution rates 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 employer contribution rates. The KPERS employer rate
established for calendar year 2012 was 8.34 %. The Authority employer contributions to KPERS for
the years ending December 31, 2012, 2011 and 2010 were $64,872, $60,885 and $65,284
respectively, equal to the required contributions for each year.
Z9
B. Deferred Compensation Plan
The Authority offers its employees a deferred compensation plan ( "Plan ") created in accordance with
Internal Revenue Code Section 457. The Plan, available to all Authority 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 Authority's
general creditors.
C. Flexible Benefit Plan (I.R.C. Section 125)
The Authority has adopted by resolution a salary- reduction flexible benefit plan ( "Plan") under
Section 125 of the Internal Revenue Code. All Authority employees working more than 20 hours per
week are eligible to participate in the Plan beginning after thirty days of employment. Each
participant may elect to reduce his or her salary to purchase benefits offered through the Plan.
Benefits offered through the Plan include various insurance and disability benefits.
D. Risk Management
The Authority is exposed to various levels 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 reduction 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.
E. Contingent Liabilities
The Authority 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 are subject to audit. Any disallowed claims resulting from such audits could become
a liability of the Authority. However, in the opinion of management, any such disallowed claims
would not have a material effect on any of the financial statements of the Authority at December 31,
2012.
F. Other Postemployment Benefits (OPEB)
As a component unit of the City of Salina, the Authority participates in the City's defined benefit
health care plan that is 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. As a component unit of the primary government, the Authority
is not required to make contributions to the plan.
The OPEB cost, actuarial valuations of the ongoing plan and net OPEB obligations for the Authority
as a sub -group of the plan, are calculated and recorded in the City's CAFR.
11
I FINANCIAL FY2012
G. Environmental Matter
The U.S. Department of Defense transferred property located at the former Schilling Air Force Base
to the Authority on or about September 9, 1966. The property is now known to contain areas of
extensive soil and groundwater contamination, as a result of the use and disposal of chlorinated
solvents during military operations at the former base during its period of active military duty from
1942 to 1965.
The U.S. Department of Defense is responsible for the investigation and remediation of
contamination caused by military activities at current and former military bases. The U.S. Army
Corps of Engineers (USACE) is the lead agency for the Department at formerly used defense sites.
The Corps has investigated the soil and groundwater contamination at the former base under the
regulatory oversight of the U.S. Environmental Protection Agency and the Kansas Department of
Health and Environment. The former base is not designated as a National Priority List Superfund
site, but investigation and remediation is required to be in compliance with the Comprehensive
Environmental Response, Compensation and Liability Act.
Potential liability for contamination under the Act extends broadly to parties associated with the
release or presence of hazardous substances, including not only those entities involved with
contaminant use and disposal, but in some cases other current and former owners and operators of
contaminated sites. As a current owner of extensive amounts of property at the former base, the
Authority is potentially liable under the act although the Authority believes that it has defenses to
such liability.
Based on presently known information, the Authority has determined that while a possible liability
exists, it is not probable and at this time no reasonable estimate of the possible liability can be made.
Therefore, no liability relating to that matter has been recorded. The Authority is under no
administrative orders from the U.S. Environmental Protection Agency or the Kansas Department of
Health and Environment. The Authority is considered to be a Potentially Responsible Party for the
former base site, primarily due to its status as a property owner. The Salina Airport Authority, City
of Salina, Unified School District No. 305 and the Kansas Board of Regents (Kansas State University
at Salina) collectively own over 90% of the nearly 4,000 acres of the former Schilling Air Force Base
property.
Beginning in August 2007, the four local public entities including the Salina Airport Authority, the
City of Salina, the Salina School District and Kansas State University at Salina initiated negotiations
with the U.S. Federal Government. The negotiation objectives include transferring the responsibility
for completing the cleanup from the USACE to the Salina Public Entities. The local objective is to
reach a settlement agreement with the United States of America that provides the Salina Public
Entities sufficient funds to complete cleanup operations over a 30 -year period.
During calendar year 2008, the Salina Public Entities prepared a detailed Cost to Complete Estimate
(CTC). The CTC preparation included consultation with the EPA and KDHE. The Salina Public
Entities' CTC was completed in June of 2008 and submitted to the USACE.
Subsequently, on January 23, 2009, the Salina Public Entities delivered a demand letter to the
USACE. The letter demands that settlement negotiations begin immediately with the U.S.
41
FINANCIAL FY 2012
' Department of Justice. On May 14, 2009 the Authority was notified that the USACE referred the
former SAFB demand letter to the U.S. Department of Justice on May 12, 2009.
The Salina Public Entities delivered on or about May 10, 2010, a settlement offer and a draft of a
lawsuit complaint to the attorney for the U.S. Department of Justice. The Salina Public Entities
planned to file suit against the U.S. if the matter was not settled by the end of May 2010. The Salina
Public Entities do not intend to cut off settlement negotiations by the filing of suit, and this has been
' communicated to the U.S. No remedial action plan or record of decision has been adopted by EPA
or KDHE.
On or about May 27, 2010, the Salina Public Entities filed their Complaint against the United States
of America, the United States Department of Defense and Secretary of Defense, Robert M. Gates, in
his official capacity (collectively, "Defendants'). On or about September 22, 2010, the Salina Public
Entities filed their First Amended Complaint in four counts.
On or about October 6, 2010, Defendants filed their motion to dismiss and to strike. On or about
March 25, 2011, Judge Murguia entered his Memorandum and Order. The Judge granted the
Defendants' motion to dismiss Counts I and II (citizen suit claims) for lack of subject matter
jurisdiction. He also granted the Defendants' motion to dismiss the Salina Public Entities' request
for attorney fees, with the exception of non - litigation attorney fees. He denied the Defendants'
motion to strike the Salina Public Entities' allegations of a conflict of interest. The Salina Public
Entities' claims under Counts II and IV for response costs under CERCLA 9607(a) are not affected
by the Judge's rulings. The Salina Public Entities disagree with most of the Judge's rulings and plan
to take an interlocutory appeal to the Tenth Circuit to contest the rulings. In the Stipulation by
Plaintiffs and Defendants filed in U.S. District Court on June 17, 2011, the U.S., on behalf of the
Corps, admitted that: "At some point or points between 1942 and 1965, during the time the United
States owned or operated the Site, military personnel of the United States used, disposed of and
caused the release of hazardous substances at the Site." This is a significant item for the Salina
Public Entities as it is the first time since the U.S., on behalf of the Corps, began its investigation in
1991 that the federal government has provided such an admission.
During 2011, the Salina Public Entities and the U.S. Department of Justice on behalf of the U.S.
Army Corps of Engineers engaged in court- supervised, non - binding mediation. During early 2013,
the mediation process resulted in a consent decree. The court's consent decree approved the
settlement among the parties and the City of Salina has received federal funds in the amount of
$8,426,700 sufficient to enable the Salina Public Entities to initiate the design of the clean-up.
!ya
FINANCIAL FY2012
H. Rental Income Under Operating Leases
A significant portion of the operating revenue of the Authority is generated through the leasing of
airport and building space to airport fixed base operators and others on a fixed fee as well as a
contingent rental basis. Ownership risks are retained by the Authority, and accordingly, such leases
are treated as operating leases.
The following is a schedule of minimum future rentals on non - cancellable operating leases to be
received in each of the next five years and thereafter:
Years Ended
December 31
2013
2014
2015
2016
2017
Later Years
Total
I. Major Customers
1,031,848
1,057,898
840,825
342,653
102,449
995,769
$ 4,371,442
The Authority received significant operating revenue from the Kansas Military Board, JRM
Enterprises, Inc., d/b /a America Jet, CAV Aerospace, Flower Aviation, Schwan's Global Supply
Chain and Learjet Inc. Rent from these six tenants equals 58% of operating revenue for the year
ended December 31, 2012.
43
J. Non - Operating Income and (Expense)
Net non - operating income and expense consisted of the following for the years ended December 31,
2012 and 2011:
Mill levy
Interest income
Gain (loss) on sale of assets
Total
Interest expense
General obligation bonds
Special assessment debt
Financing lease
Temporary notes
Amortization of bond discount
Total
Bond Issue Costs
Net non - operating income
K. Commitment Under Operating Lease
December 31,
2012 2011
$ 1,767,338 $ 1,795,660
1,500 9,856
- 19,039
$ 1,768,838 $ 1,824,555
$ (1,136,710) $ (592,272)
(4,876)
(5,656)
(14,585)
(18,234)
(338,828)
(18,892)
(18,892)
(1,175,063)
(973,882)
(103,580)
$ 593,775 $ 747,093
The Authority has entered into a certain non - cancellable operating lease agreement which will expire
in 2013, for the rental of office equipment. During both 2012 and 2011, the Authority paid $11,400
in rentals. Minimum rentals, on an annual basis are as follows:
Years Ended
December 31
2013 1,900
Total $ 1,900
L. Subsequent Events
The Salina Airport Authority's management has evaluated events and transactions occurring after
December 31, 2012 through June 18, 2013. The aforementioned date represents the date the financial
statements were available to be issued.
(THIS PAGE INTENTIONALLY LEFT BLANK)
Supplemental
Information
SALINA AIRPORT AUTHORITY
SCHEDULES OF REVENUES, EXPENSES AND CHANGES
IN NET POSITION
As of December 31, 2012 and December 31, 2011
Operating Revenues
Airfield
Fuel flowage fees
Hangar rent
Landing fees
Ramp rent
Total Airfield
Agri land rent
Building rents
Land rents
Tank rent
Total Building and Land Rents
Other revenue
Commissions
Sale of avgas
Less cost of avgas
Other income
Total Other Revenue
Total Operating Revenue
(continued)
January 1 to December 31
2012 2011
$ 189,370
493,747
3,367
$ 167,569
542,858
3,993
51,080 66,870
737,564 781,290
70,754
1,049,379
236,009
9,711
1— 363
$
17,731
25,678
(24,504)
37,846
56,751
59,061
1,182,337
241,155
9,157
%1010
13,669
18,992
(17,555)
18,859
-- 3— 3 965 —
$$ 2,306,965
45
SALINA AIRPORT AUTHORITY
SCHEDULES OF REVENUES, EXPENSES AND CHANGES
IN NET POSITION
As of December 31, 2012 and December 31, 2011
(continued)
Operating Expenses
Administrative
A/E, consultants, brokers
Airport promotion
Computer network administration
Dues and subscriptions
Employee retirement
FICA and medicare
Industrial development
Insurance, property
Insurance, medical
Kansas unemployment tax
Legal and accounting
Office salaries
Office supplies
Other administrative
Postage
Property taxes
Special events
Telephone
Travel and meetings
Total Administrative Expenses
(continued)
January 1 to December 31
2012 2011
$ 33,624
8,671
14,348
30,791
64,902
58,699
15,000
134,120
176,041
790
34,350
415,882
8,221
12,507
1,820
196,027
6,666
17,844
14,966
$ 1,245,269
$ 45,439
31,327
14,536
33,998
70,517
60,649
30,000
118,156
203,698
812
47,207
458,296
12,626
15,182
3,609
187,465
6,338
17,922
27,302
$ 1,385,079
46
Id
SALINA AIRPORT AUTHORITY
SCHEDULES OF REVENUES, EXPENSES AND CHANGES
IN NET POSITION
As of December 31, 2012 and December 31, 2011
(continued)
January 1 to December 31
2012
2011
Maintenance Expenses
Airfield maintenance
$ 20,315
$ 23,553
Airport security
361
320
Building maintenance
64,159
33,904
Equipment fuel and repairs
85,655
88,492
Fire services
5,025
1,593
Grounds maintenance
5,775
1,010
Maintenance salaries
Other maintenance expenses
353,994
22,646
361,244
20,671
Snow removal expense
-
35,469
Utilities
311,161
205,194
Total Maintenance Expenses
869,091
771,450
'
Total Operating Expenses
2,114,358
2,156,529
Revenues in excess of expenses before depreciation
45,810
150,436
Depreciation
2,514,587
2,407,566
'
Operating Loss Before Non - Operating Income and Expenses
(2,468,777)
(2,257,130)
Non - Operating Income and (Expenses)
Mill levy
1,767,338
1,795,660
Interest income
1,500
9,856
Interest expense
(1,175,063)
(973,882)
Bond Issue Costs
-
(103,580)
Gain (loss) on sale of assets
19,039
Total Non- Operating Income (Expense)
593,775
747,093
Loss Before Capital Contributions
(1,875,002)
(1,510,037)
Capital Contributions
1,779,827
457,227
'
Net Position
(Decrease) in Net Position
(95,175)
(1,052,810)
Net Position, beginning period
26,606,642
27,659,452
Net Position, end of period
$26,511,467
$26,606,642
47
BUILDINGS
Bldg. 614 Improvements
5,351
SALINA AIRPORT AUTHORITY
621,904 `
CAPITAL EXPENDITURES
84,631
Bldg. 520, SDC -Unit G HVAC Replacement
January 1 to December 31
Bldg. 31314VAC Replacement
2012
AIRPORT IMPROVEMENTS
15,618
ARFF Station A/E Design (AIP -33)
$ 36,983
ARFF Station Construction (AIP -34)
2,136,617
Airfield Guidance Signage (AIP -34)
3,996
Airfield perimeter fence realignment
16,292
2" Mill and Inlay, 3 Hangars (N -S H606; S 703)
28,316
Geospatial Aerial Photography
3,464
Total Airport Improvements
2,225,668
BUILDINGS
Bldg. 614 Improvements
5,351
Bldg. 620 Rehabilitation
621,904 `
Bldg, 655 Rehabilitation
84,631
Bldg. 520, SDC -Unit G HVAC Replacement
3,535
Bldg. 31314VAC Replacement
5,296
Hangar 509 Office Renovation
15,618
Hangar 600 Cell phone signal amplifier /repeat
2,238 '
Hangar 600 Elevator West Circuit Board
5,670
Hangar 600 Worktable w/ exhaust hood
3,045
Hangar 606 Rehabilitation
2,001,807
Hangar 409 -1 rooftop equipment fagade
3,958
Hangar 409 -1 (2) Midland 20x14 doors
9,490
H409 -1 HVAC replacement
7,587 '
Hangar 409 -1 south door approach paving
3,070
PH #305 repair of Tank 45 Jet Fuel Pump
17,546
PH305 modification -meter system replacement
31,640 '
PH305 Filter Vessel Upgrade
89,369
Total Buildings
$ 2,911,756
EQUIPMENT
ARFF Station Equipment (AIP -34)
104,351
2 Hobart AC Ground Power Units
49,715
Handheld Radios- KSU -UAS Ops (Rwy 18/36)
1,014
HP Probook 6460b (Marketing)
1,012
HP Business Desktop (Marketing)
1,074
Wireless network system
1,712
SAA website redevelopment and design
21,900
HP Civil Eng. Tech workstation
5,313
OsbKosh Snowblower (DRMO)
'
6,131
Stihl portable gas concrete saw
1,099
Shop equipment; auto
4,189
Generator set, gas
5,267
Generator set, diesel
6,781
.[:?
I
SALINA AIRPORT AUTHORITY SUPPLEMENTAL FY2012
CAPITAL EXPENDITURES
(continued)
January 1 to December 31
2012
OshKosh Snowblower (DRMO) 5,076
Tool kit, vehicle 1,458
Tool kit, vehicle 1,458
Total Equipment $ 219,560
CONSTRUCTION IN PROGRESS
Airport Master Plan Update (AIP -35) 74,145
Jumper Road GA Hangars (3 T- Hangars; 1 box Hangar) 154,918
Wings Over Salina Museum 15,788
Total Construction in Progress $ 244,851
[L c
Environmental (Former SAFB) 107,829
W. Vortex Ave. water main relocation 95,060
W. Beechcraft Access Rd to new ARFF Station 103,958
Total Land 306,847
ITOTAL CAPITAL EXPENDITURES $ 5,908,682
I
II
�I
I
I
1
49
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION IMPROVEMENT BONDS
SERIES 2005 - A
December 31, 2012
Date of issue: August 1, 2005
Amount of issue: $ 3,635,000
4.75% to 5.25%
Maturity date: September 1, 2020
Principal paid: $ 960,000
Outstanding balance: $ 2,675,000
Schedule of Bond Interest and Principal Payments
Due in
Bond
Bond
Year
Interest
Principal
2013
134,275
275,000
2014
119,838
290,000
2015
104,612
305,000
2016
88,600
320,000
2017
73,400
340,000
2018 -2020
116,750
1,145,000
$ 637,475
$ 2,675,000
50
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION IMPROVEMENT BONDS
SERIES 2007 -A
December 31, 2012
Date of issue:
December 15, 2007
Amount of issue:
$ 1,005,000
Interest rate:
4.6% to 6.0%
Maturity date:
September 1, 2022
Principal paid:
$ 260,000
Outstanding balance:
$ 745,000
Schedule of Bond Interest and Principal Pavments
Due in
Bond
Bond
Year
Interest
Princinal
2013
37,603
55,000
2014
34,743
60,000
2015
31,983
65,000
2016
28,928
70,000
2017
25,568
70,000
2018 -2022
69,662
425,000
$228,487
$ 745,000
51
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION BONDS
SERIES 2009 -A
December 31, 2012
Date of issue:
June 1, 2009
Amount of issue:
$ 2,025,000
Interest rate:
4.31%
Maturity date:
September 1, 2029
Principal paid:
$ -
Outstanding balance:
$ 2,025,000
Schedule of Bond Interest and Principal Payments
Due in
Bond
Bond
Year
Interest
Principal
2013
85,648
-
2014
85,648
-
2015
85,648
-
2016
85,648
-
2017
85,648
-
2018 -2029
921,846
2,025,000
$ 1,350,085
$ 2,025,000
52
SALINA AIRPORT AUTHORITY
TAXABLE GENERAL OBLIGATION BONDS
SERIES 2009 -B
December 31, 2012
Date of issue:
June 1, 2009
Amount of issue:
$ 6,080,000
Interest rate:
4.998%
Maturity date:
September 1, 2026
Principal paid:
$ 770,000
Outstanding balance:
$ 5,310,000
Schedule of Bond Interest and Principal Pavments
Duein
Bond
Bond
Year
Interest
Principal
2013
244,425
305,000
2014
235,275
315,000
2015
225,038
325,000
2016
213,663
335,000
2017
200,263
345,000
2018 -2026
977,349
3,685,000
$ 2,096,013
$ 5,310,000
53
SALINA AIRPORT AUTHORITY
TAXABLE GENERAL OBLIGATION Bonds
SERIES 2011 -A
December 31, 2012
Date of issue: August 17, 2011
Amount of issue: $ 11,820,000
Interest rate: 4.64%
Maturity date: September. 1, 2030
Principal paid: $ -
Outstanding balance: $ 11,820,000
Schedule of Bond Interest and Principal PaMents
Due in
Bond
Bond
Year
Interest
Principal
2013
491,633
260,000
2014
489,032
260,000
2015
489,033
260,000
2016
481,362
265,000
2017
475,665
275,000
2018 -2030
3,860,757
10,500,000
$ 6,287,482
$ 11,820,000
54
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION Bonds
SERIES 2011 -B
December 31, 2012
Date of issue: August 17, 2011
Amount of issue: $ 2,505,000
Interest rate: 4.280%
Maturity date: September. 1, 2031
Principal paid: $ -
Outstanding balance: $ 2,505,000
Schedule of Bond Interest and Principal Pavments
Due in
Bond
Bond
Year
Interest
Principal
2013
103,331
-
2014
103,331
-
2015
103,331
-
2016
103,331
-
2017
103,331
-
2018 -2031
1,422,301
2,505,000
$ 1,938,956
$ 2,505,000
55
SALINA AIRPORT AUTHORITY
SPECIAL ASSESSMENT DEBT - STREET AND UTILITY IMPROVEMENT
Airport Industrial Center Subdivision
December 31, 2012
Date of loan:
September 11, 2002
Amount of loan:
$ 306,582
Interest rate:
3.79%
Maturity date:
October 1, 2016
Principal paid:
$ 221,301
Outstanding balance:
$ 85,281
Schedule of Loan Interest and Principal Pavments
Duein
Loan
Loan
Year
Interest
Principal
2013
3,232
20,146
2014
2,469
20,909
2015
1,676
21,702
2016
854
22,524
$ 8,231
$ 85,281
56
SALINA AIRPORT AUTHORITY
SPECIAL ASSESSMENT DEBT - SANITARY SEWER EXTENSION
HANGAR 600
December 31, 2012
Date of loan:
April 23, 2007
Amount of loan:
$ 27,599
Interest rate:
4.47%
Maturity date:
December 20, 2021
Principal paid:
$ 8,934
Outstanding balance:
$ 18,665
Schedule of Loan Interest and Principal Pavments
Due in
Loan
Loan
Year
Interest
Principal
2013
834
1,730
2014
757
1,808
2015
676
1,888
2016
592
1,973
2017
504
2,061
2018 -2021
1,051
9,205
$ 4,414
$ 18,665
57
SALINA AIRPORT AUTHORITY
FINANCING LEASE PAYABLE
December 31, 2012
Date of loan: September 28, 2006
Amount of loan: $ 425,000
Interest rate: 6.609%
Maturity date: September 1, 2016
Principal paid: $ 222,383
Outstanding balance: $ 202,617
Schedule of Loan Interest and Principal Payments
Due in
Loan
Loan
Year
Interest
Principal
2013
12,646
45,826
2014
9,567
48,905
2015
6,282
52,190
2016
2,776
55,696
$ 31,271
$ 202,617
58
SALINA AIRPORT AUTHORITY
INSURANCE IN FORCE
December 31, 2012
Traveler's Insurance
Pol. #KTK- 630- 4B635270- IND -12
RLI Insurance Company
Pol. #ILM0702816
Cincinnati Insurance
Pol. #COP 232030 24
Cincinnati Insurance
Pol. #BCP- 0006202
Great American Alliance Ins. Co.
Pol. # KST 788- 29 -33 -18
American Safety Insurance
Pol. #179E01178 -12 -03
Deluxe Property- Buildings vacated by Hawker
Beechcraft, business personal property and
equipment breakdown (including boiler and
machinery) $26,637,145
Inland Marine - Equipment
$ 2,682,416
Crime Policy
Employee theft, forgery, alteration, computer fraud $ 250,000
Public Officials and Employment Practices Liability
Each claim $ 2,000,000
Aggregate limit $ 2,000,000
Kansas Underground Storage Tank Liability
Environmental Incident $ 1,000,000
Annual aggregate $ 1,000,000
Limit of defense $ 100,000
Storage Tank Pollution Liability Coverage
Per confirmed release limit $ 1,000,000
Policy aggregate limit $ 1,000,000
Limit of defence $ 250,000
59
Amount of
Insurance Policy
Type of Coverage
Coverage
Employers Insurance of Wausau
Worker's Compensation
on behalf of USAIG
and Employer's Liability
$ 500,000
Pol. #WCH- Z91- 547496 -012
National Union Fire Ins. Co. of
Bodily Injury & Liability
$ 1,000,000
Pittsburgh, PA
Hangar Keepers
$ 1,000,000
Pol. #AP3229456 -17
Cincinnati Insurance
Deluxe Property - Buildings, business personal
property and equipment breakdown (including
Pol. #COP 232 30 24
boiler and machinery)
$32,208,454
Business Income
$ 2,290,175
Pol. #COA 232 30 24
Vehicles & Equipment
Liability
$ 1,000,000
Medical payments
$ 5,000
Uninsured motorists
$ 1,000,000
Traveler's Insurance
Pol. #KTK- 630- 4B635270- IND -12
RLI Insurance Company
Pol. #ILM0702816
Cincinnati Insurance
Pol. #COP 232030 24
Cincinnati Insurance
Pol. #BCP- 0006202
Great American Alliance Ins. Co.
Pol. # KST 788- 29 -33 -18
American Safety Insurance
Pol. #179E01178 -12 -03
Deluxe Property- Buildings vacated by Hawker
Beechcraft, business personal property and
equipment breakdown (including boiler and
machinery) $26,637,145
Inland Marine - Equipment
$ 2,682,416
Crime Policy
Employee theft, forgery, alteration, computer fraud $ 250,000
Public Officials and Employment Practices Liability
Each claim $ 2,000,000
Aggregate limit $ 2,000,000
Kansas Underground Storage Tank Liability
Environmental Incident $ 1,000,000
Annual aggregate $ 1,000,000
Limit of defense $ 100,000
Storage Tank Pollution Liability Coverage
Per confirmed release limit $ 1,000,000
Policy aggregate limit $ 1,000,000
Limit of defence $ 250,000
59
(THIS PAGE INTENTIONALLY LEFT BLANK)
STATISTICAL
Table of Contents
This part of the Salina Airport Authority's comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial statements, note
disclosures and required supplementary information says about the government's overall financial
health.
Financial Trends
61 -65
These schedules contain trend information to help the reader understand how
the government's financial performance and well -being have changed over
time.
Debt Capacity
M.
This schedule presents information to help the reader assess the affordability of
the government's current levels of outstanding debt and the government's
ability to issue additional debt in the future.
Revenue Capacity
67 -69
These schedules contain information to help the reader assess the government's
revenue source.
Operating Information 70
This schedule contains service and infrastructure data to help the reader
understand how the information in the government's financial report relates to
the services the government provides and the activities it performs.
Demographic and Economic Information 71 -74
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the government's financial activities
take place.
I
I
II
II
641
I
TOTALREVENUES
OPERATING REVENUES
Airfield
Fuel flowage fees
Building and land rent
Other revenue
TOTAL OPERATING REVENUES
TOTAL EXPENSES
OPERATING EXPENSES
Administrative
Maintenance
TOTAL OPERATING EXPENSES
OPERATING INCOME BEFORE DEPRECIATION
DEPRECIATION
OPERATING LOSS
NON - OPERATING INCOME AND (EXPENSES)
Mill levy
Interest on investments and financing lease
Interest expense
Bond Issue Costs
Gain (loss) on sale of assets
TOTAL NON - OPERATING INCOME AND (EXPENSES)
INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS
CAPITAL CONTRIBUTIONS
INCREASE (DECREASE) IN NET POSITION
NET POSITION AT YEAR END COMPOSED OF:
Invested in capital assets, net of related debt
Restricted
Unrestricted
$ 190,367 $ 204,310 $ 237,506 $ 263,524
257,475
235,362
SALINA AIRPORT AUTHORITY
247,740
TOTAL ANNUAL REVENUES, EXPENSES AND CHANGES IN NET POSITION
890,631
FOR YEARS ENDED DECEMBER 31,
1,294,166
2003 2004 2005 2006
21,874
TOTALREVENUES
OPERATING REVENUES
Airfield
Fuel flowage fees
Building and land rent
Other revenue
TOTAL OPERATING REVENUES
TOTAL EXPENSES
OPERATING EXPENSES
Administrative
Maintenance
TOTAL OPERATING EXPENSES
OPERATING INCOME BEFORE DEPRECIATION
DEPRECIATION
OPERATING LOSS
NON - OPERATING INCOME AND (EXPENSES)
Mill levy
Interest on investments and financing lease
Interest expense
Bond Issue Costs
Gain (loss) on sale of assets
TOTAL NON - OPERATING INCOME AND (EXPENSES)
INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS
CAPITAL CONTRIBUTIONS
INCREASE (DECREASE) IN NET POSITION
NET POSITION AT YEAR END COMPOSED OF:
Invested in capital assets, net of related debt
Restricted
Unrestricted
$ 190,367 $ 204,310 $ 237,506 $ 263,524
257,475
235,362
259,981
247,740
916,585
890,631
1,106,146
1,294,166
29,501
21,874
49,654
70,605
1,393,928
1,352,177
1,653287
1,876,035
825,064 928,769 1,039,270 1,043,176
475,204 465,326 618,346 627,546
1,300,268 1,394,095 1,657,616 1,670,722
93,660 (41,918) (4,329) 205,313
1,022,474 1,151,664 1,392,316 1,580,750
(928,814) (1,193,582) (1,396,645) (1,375,437)
987,970
1,036,579
1,058,688
1,184,481
128,640
126,949
118,087
148,936
(344,353)
(348,784)
(374,851)
(500,431)
(6,631)
59,943
204,083
10,777
765,626
874,687
1,006,007
843,763
(163,188)
(318,895)
(390,638)
(531,674)
434,763 2,289,342 3,186,636 1,204,559
271,575 1,970,447 2,795,998 672,885
17,711,718
18,468,297
24,193,395
24,442,779
85,000
85,000
85,000
85,000
2,233,330
3,447,198
518,098
941,600
$20,030,048 $22,000,495 $24,796,493 $25,469,378
Note <1> The 2010 Investment in Capital Assets, Net of Related Debt was adjusted by $130,729 in accordance
with GASB Statement 65. See Note I to the Financial Statements - Summary of Significant Accounting
Policies.
1
61
I
SALINA AIRPORT AUTHORITY
TOTAL ANNUAL REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR YEARS ENDED DECEMBER 31,
2007 2008 2009 2010 2011 2012
$ 376,553
$ 470,182 $
502,193 $
654,786
$ 613,721
$ 548,193
246,113
210,292
165,443
191,027
167,569
189,370
1,525,071
1,407,984
1,402,230
1,497,330
1,491,710
1,365,853
53,772
47,591
28,710
48,206
33,965
56,752
2,201,509
2,136,049
2,098,576
2,391,349
2,306,965
2,160,168
1,161,530
1,303,374
1,352,357
1,414,922
1,385,079
1,245,267
807,485
941,926
867,771
821,798
771,450
869,091
1,969,015
2,245,300
2,220,128
2,236,720
2,156,529
2,114,358
232,494
(109,251)
(121,552)
154,629
150,436
45,810
1,650,187 1,606,811 1,748,348 2,290,253 2,407,566 2,514,587
(1,417,693) (1,716,062) (1,869,900) (2,135,624) (2,257,130) (2,468,777)
1,201,602
1,256,816
1,327,647
1,768,154
1,795,660
1,767,338
241,478
185,215
74,313
9,948
9,856
1,500
(774,315)
(1,022,539)
(1,014,129)
(1,003,998)
(973,882)
(1,175,063)
-
-
(103,580)
281,803
16,321
-
(86,067)
19,039
-
950,568
435,813
387,831
688,037
747,093
593,775
(467,125)
(1,280,249)
(1,482,069)
(1,447,587)
(1,510,037)
(1,875,002)
404,773 1,650,041 3,770,558 1,172,507 457,227 1,779,827
(62,352) 369,792 2,288,489 (275,080) (1,052,810) (95,175)
13,515,783 24,471,896 26,410,681 23,586,562 <1> 22,065,441 25,339,916
11,891,243 1,304,922 1,654,626 4,072,936 4,541,202 1,171,551
$25,407,026 $25,776,818 $ 28,065,307 $ 27,659,498 $26,606,688 $26,511,467
62
SALINA AIRPORT AUTHORITY
CHANGES IN CASH AND CASH EQUIVALENTS
FOR YEARS ENDED DECEMBER 31,
2003 2004 2005
CASH FLOWS FROM OPERATING ACTIVITES
Cash received from providing services
$1,374,310
$1,459,696
$2,107,817
Cash paid to employees for services
(462,822)
(472,178)
(504,691)
Cash paid to suppliers for goods and services
(837,530)
(871,435)
(1,157,454)
NET CASH PROVIDED (USED) IN OPERATING ACTIVITLEE
73,958
116,083
445,672
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition and construction of property, plant and equipment
Purchases in satisfaction of maintenance agreement
Proceeds from capital grants
Return of capital grant proceeds
Proceeds from property tax
Proceeds from sale of capital assets
Principal payments on debt
Proceeds of new borrowing
Principal received on financing lease
Interest received on financing lease
Bond defeasance and issue costs paid
Interest paid on long -term debt
NET CASH PROVIDED (USED) IN CAPITAL AND
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITES;
Interest received on deposits
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
CASH AND CASH EQUIVALENTS, beginning of year
CASH AND CASH EQUIVALENTS, end of year
(2,319,249) (4,126,043) (5,948,674)
(9,736) (5,863) (1,350)
434,763 2,289,342 3,186,636
987,970 1,036,579 1,058,688
(1,046,750) (988,922) (4,388,400)
- 3,255,000 3,635,000
81,911 88,823 96,320
107,535 100,623 93,126
(6,147) (22,183)
(338,703) (294,691) (356,080)
(2,102,259) 1,348,701 (2,646,917)
25,475 28,960 25,463
(2,002,826) 1,493,744 (2,175,782) 1
3,471,102 1,468,276 2,962,020
$1,468,276 $2,962,020 $ 786,238
Note: In 2010, the SAA began classifying the sale of assets as non - operating income.
1
63
SALINA AIRPORT AUTHORITY
CHANGES IN CASH AND CASH EQUIVALENTS
FOR YEARS ENDED DECEMBER 31,
1 2006 2007 2008 2009 2010 2011 2012
$1,993,164 $ 4,588,310 $ 2,426,455 $ 1,974,744 $2,374,283 $ 2,466,747 $ 2,091,754
(552,966) (638,839) (790,936) (830,298) (825,454) (812,393) (784,733)
(1,087,149) (1,281,618) (1,475,036) (1,457,074) (1,136,760) (1,315,871) (1,343,284)
353,049 2,667,853 160,483 (312,628) 412,069 338,483 (36,263)
(5,130,780) (3,242,102) (8,663,391) (6,999,968) (3,471,985) (1,962,366) (4,789,419)
(15,143)
(21,601)
(7,912)
(3,445)
-
-
-
1,204,559
404,773
1,552,002
3,674,507
1,077,310
443,681
1,755,598
1,184,481
1,201,602
1,256,816
1,327,647
1,768,154
1,795,660
1,767,338
-
-
-
-
(86,067)
19,039
-
(1,019,673)
(1,048,833)
(3,946,317)
(4,739,437)
(8,162,886)
(12,756,306)
(1,154,007)
3,350,000
12,007,599
-
8,012,154
11,675,000
14,060,137
104,453
113,279
122,855
133,242
144,485
-
84,993
76,167
66,592
56,204
-
(13,024)
(59,955)
-
(75,986)
(39,535)
(103,580)
(407,795)
(376,499)
(1,249,490)
(922,725)
(1,145,591)
(754,537)
(1,190,236)
(657,929) 9,054,430 (10,868,845) 462,193 1,758,885 741,728 (3,610,726)
68,896 182,515 125,309 15,550 9,948 9,856 1,500
(235,984) 11,904,798 (10,583,053) 165,115 2,180,902 1,090,067 (3,645,489)
786,238 550,254 12,455,052 1,871,999 2,037,114 4,218,016 5,308,083
$ 550,254 $12,455,052 $ 1,871,999 $ 2,037,114 $4,218,016 $ 5,308,083 $ 1,662,594
64
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Company
Kansas Military Board
JRM Enterprises, Inc, d/b /a America Jet (formerly
Moore's Midway Aviation)
CAV Aerospace, Inc.
Flower Aviation
Schwan's Global Supply Chain
Learjet Inc.
University Corporation for Atmospheric Research
Canadian Royal Air Force
Two Rivers Vending Co.,Inc.
Kansas State University- Salina
Beechcraft Corporation (Formerly Hawker
Beechcraft Corporation and Raytheon Aircraft Co.)
Geocore Services
AcuStep
Federal Aviation Administration
Source: Salina Airport Authority Records
Salina Airport Authority
Principal Customers
Current and Nine Years Ago
68
2012
2003
Percentage of
Percentage of
Revenue
Rank
Revenue
Revenue
Rank
Revenue
$598,695
1
27.72%
-
-
178,682
2
8.28%
150,025
4
9.45%
168,123
3
7.79%
31,390
8
1.98%
132,946
4
6.15%
157,417
3
9.94%
103,453
5
4.79%
87,114
5
5.50%
68,323
6
3.16%
-
-
-
59,233
7
2.74%
-
-
-
58,460
8
2.71%
-
-
-
53,675
9
2.49%
48,993
6
3.09%
47,900
10
2.22%
232,891
2
14.71%
-
-
-
265,230
1
16.75%
-
-
-
35,280
7
2.23%
-
-
-
24,448
9
1.54%
-
-
-
22,350
10
1.41%
$ 1,469,490
68.05%
$ 1,055,138
66.60%
68
Salina Airport Authority
MILL LEVY REVENUE
Ten Years Ended December 31, 2012
Mil Levy
Fiscal Year Revenue
2003 987,970
2004 1,036,579
2005 1,058,688
2006 1,184,481
2007 1,201,602
2008 1,256,816
2009 1,327,647
2010 1,768,154
2011 1,795,660
2012 1,767,338
Source: Salina Airport Authority Records
EE
Salina Airport Authority
AIR TRAFFIC, FUEL FLOWAGE AND ENPLANEMENT TRENDS
Ten Years Ended December 31, 2012
70
Passenger Enplanements
Fiscal
Air Traffic
Fuel Flowage
Scheduled
Non - Scheduled
Total
Year
Operations
Gallons
Air Carrier
Air Carrier Enplanements
2003
86,214
4,358,563
2,558
2,405
4,963
2004
81,465
3,843,330
2,802
3,299
6,101
2005
86,292
4,162,887
2,346
459
2,805
2006
81,464
3,817,112
1,854
1,023
2,877
2007
76,479
3,778,792
2,504
1,623
4,127
2008
71,575
3,114,515
3,673
1,497
5,170
2009
65,062
2,481,585
2,447
421
2,868
2010
60,451
2,763,990
1,698
1,446
3,144
2011
69,207
2,386,134
2,705
212
2,917
2012
97,338
2,594,049
2,561
-
-
Note:
One air traffic
operation equals one aircraft takeoff and landing
Sources:
Salina Airport
Authority Records
Federal Aviation Administration Office of Airport Planning and Program
I FAA non- scheduled air carrier data not
available until July of
the following calendar year
70
Salina Airport Authority
Principal Employers
Current Year and Six Years Prior
Employer
USD #305
Schwan's Global Supply Chain,
Inc.
Salina Regional Health Center
Exide Technologies
City of Salina
Philips Lighting Company
Wal -Mart
Dillons Stores
Great Plains Manufacturing
Solomon Corporation
Blue Beacon International
Assurian, Inc
Hawker Beechcraft Corp.
Total
2012
Percentage of
Total City
Employees Rank Employment
1,990 1 5.9%
20061
Percentage of
Total City
Employees Rank Employment
1,659 2 4.7%
1,850
2
5.5%
1,800
1
5.1%
1,453
3
4.3%
1,600
3
3.7%
689
4
2.0%
750
4
2.1%
461
5
1.3%
723
5
2.0%
450
6
1.3%
490
7
1.4%
433
7
1.2%
421
8
1.2%
393
8
1.1%
-
-
-
308
9
0.9%
297
10
0.8%
-
-
-
-
-
-
544
6
1.5%
374
9
1.0%
-
-
350
10
1.0%
8,324
24.3%
8,711
23.7%
Source: Salina Area Chamber of Commerce
1 -2003 Historical records not available
71
Salina Airport Authority
Full-time Equivalent Government Employees by Function
Last Ten Fiscal Years
Function 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Administration 4 4 4 5 6 7 7 7 7 6
1 Aircraft Rescue and
Firefighting (ARFF) and
Operations 3 3 3 3 6 6 6 5 5 5
I 1 Airport and Industrial
Center Maintenance 4 4 4 4 5 5 5 5 5 5
Total 11 11 11 12 17 18 18 17 17 16
Source: Salina Airport Authority Records
I During years 2003 -2007, the ARFF and Airport and Industrial Center Maintenance duties were a
combined function.
1
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Lareest Taxpayers
According to the Saline County Clerk's Office, the following table lists the largest taxpayers in the City,
their November 2012 assessed valuations, and the percentage each taxpayer comprised of the total assessed
valuation of the City.
Company
Schwan's Sales (Tony's Pizza)
Westar Energy
Garrison Salina Owner LLC
Salina Regional Health Centers
Kansas Gas Service
Menard Inc
Gateway Adams Inc. (Midstate Plaza)
Wal -Mart Stores (includes Sam' s)
Southwestern Bell Telephone
Great Plains Manufacturing
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.
Levy
Tax
% of
Type of
Assessed
Total
Business
Valuation
Valuation
Manufacturing
$.8,050,871
1.78%
Utility
7,852,360
1.74%
Regional Shopping Center
6,160,267
1.36%
Hospital and Medical Offices
4,317,497
0.96%
Utility
3,352,360
0.74%
Home Improvement Store
3,552,249
0.79%
Shopping Center
3,551,440
0.79%
Discount. Retail
3,458,708
0.77%
Utility
2,464,079
0.55%
Manufacturing
2.346,169
0_52%
$45,106,000
10.00%
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.
Levy
Tax
Taxes
Y K
Rate
Levied
2012*
26.190
$10,588,130
2011
26.272
10,582,043
2010
26.022
10,425,260
2009
25.855
10,289,701
2008
25.886
10,369,087
2007
23.959
9,432,248
*Collections as of June 12, 2013
Source: Saline County
Current
Current and Delinquent
Tax Collections
Tax Collections
Amount
10,276,937 97.1%
9,823,578 94.2%
9,831,289 95.5%
9;825,122 94.8%
8,941,650 94.8%
Amount
10,383,209
10,522,106
10,118,285
10,126,228
10,119,876
9,209,900
26
98.83%
99.43%
97.06%
98.41%
97.60%
97.64%
74
Amount
10,383,209
10,522,106
10,118,285
10,126,228
10,119,876
9,209,900
26
98.83%
99.43%
97.06%
98.41%
97.60%
97.64%
74
(THIS PAGE INTENTIONALLY LEFT BLANK)
Compliance
The Deep Convective Clouds and Chemistry (DC3) experiment explored the influence of
thunderstorms on air just beneath the stratosphere, a little- explored region that influences Earth's
climate and weather patterns. Scientists used three research aircraft, mobile radars, lightning mapping
arrays, and other tools to pull together a comprehensive picture.
Past field projects have focused on either the details of thunderstorms but with limited data on the
I atmospheric chemistry behind them, or on the chemistry but with little detail about the storms
themselves. DC3 is the first to take a comprehensive look at the chemistry and thunderstorm details,
including air movement, cloud physics, and electrical activity.
I
i CR MELEE
INDEPENDENT AUDITORS'REPORT ON INTERNAL CONTROL OVER
CfjAjUjMM
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER
MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
Cat's Mfic Aawntmx5
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING
STANDARDS
'
FOR
To the Board of Directors
'
Salina Airport Authority
We have audited, in accordance with the auditing standards generally accepted in
the United States of America and the standards applicable to financial audits
'
Robert I. Clubine, CPA
contained in Government Auditing Standards issued by the Comptroller General of
David A. Rettele, CPA
Jay D. Langley, CPA, CGMA
the United States and the Kansas Municipal Audit and Accounting Guide,
Jon K. Bell, CPA
prescribed by the Director of Accounts and Reports, Department of Administration
Leslie M. Corbett, CPA
of the State of Kansas, the financial statements of the business type activities of
Stacy J. Darer, CPA
Salina Airport Authority as of and for the years ended December 31, 2012 and
Marci K. Fox, CPA
2011, and the related notes to the financial statements which collectively comprise
Linda A. Suelter, CPA
Salina Airport Authority's basic financial statements and have issued our report
Johnns R. Vosseller, CPA
thereon dated June 18, 2013.
l
'
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered
1
Salina Airport Authority's internal control over Financial reporting (internal
control) to determine the audit procedures that are appropriate in the circumstances
for the purpose of expressing our opinions on the financial statements, but not for
the purpose of expressing an opinion on the effectiveness of Salina Airport
Authority's internal control. Accordingly, we do not express an opinion on the
effectiveness of Salina Airport Authority's internal control
A deficiency in internal control exists when the design or operation of a control
does not allow management or employees, in the normal course of performing their
assigned functions, to prevent or detect and correct misstatements on a timely basis.
'
218 South Santa Fe
A material weakness is a deficiency, or a combination of deficiencies, in internal
Safi Box Kansas
Salina, Kansas
such that there is a reasonable possibility that a material misstatement of the
P tY
67402 -2267
entity's financial statements will not be prevented, or detected and corrected on a
'
timely basis. A significant deficiency is a deficiency, or a combination of
deficiencies, in internal control that is less severe than a material weakness, yet
Salina
important enough to merit attention by those charged with governance.
785 / 825 -5479
Salina Fax
785 / 825 -2446
Our consideration of internal control was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in
Ellsworth
internal control that might be material weaknesses or significant deficiencies.
785 / 472 -3915
Ellsworth Fax
Given these limitations, we did not identify any deficiencies in internal control over
785 / 472 -5478
financial reporting that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
75
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Salina Airport Authority's financial statements are
free of material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect
on the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and
the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or
on compliance. This reportt is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the entity's internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
CLUBWE AND RETTELE, CHARTERED
G&k;t 'V 6t-va 466(66/. 6 & -L&VC1
Salina, Kansas
June 18, 2013
76
CLUBINE&
MARrERED
Certified Public Ac w armts
ONE
Robert I. Clubine, CPA
David A. Rettele, CPA
Jay D. Langley, CPA, CGMA
Jon K. Bell, CPA
Leslie M. Corbett , CPA
Stacy J. Caner, CPA
Marci K. Fox, CPA
Linda A. Suelter, CPA
Johnna R. Vosseller, CPA
218 South Santa Fe
' P.O. Box 2267
Salina, Kansas
67402 -2267
Salina
785 / 825 -5479
Salina Fax
785 / 825 -2446
Ellsworth
785/472 -3915
Ellsworth Fax
785 / 472 -5478
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH
MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE
REQUIRED BY OMB CIRCULAR A -133
To the Board of Directors
Salina Airport Authority
Report on Compliance for Each Major Federal Program
We have audited Salina Airport Authority's compliance requirements described in
OMB Circular A -133 Compliance Supplement that could have a direct and material
effect on each of Salina Airport Authority's major federal programs for the year
ended December 31, 2012. Salina Airport Authority's major federal programs are
identified in the summary of auditor's results section of the accompanying schedule
of findings and questioned costs.
Management's Responsibility
Management is responsible for compliance with the requirements of laws,
regulations, contracts, and grants applicable to its federal programs.
Auditors' Responsibility
Our responsibility is to express an opinion on compliance for each of Salina Airport
Authority's major federal programs based on our audit of the types of compliance
requirements referred to above. We conducted our audit of compliance in
accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; and
OMB Circular A -133, Audits of States, Local Governments, and Non - Profit
Organizations. Those standards and OMB Circular A -133 require that we plan and
perform the audit to obtain reasonable assurance about whether noncompliance
with the types of compliance requirements referred to above that could have a
direct and material effect on a major federal program occurred. An audit includes
examining, on a test basis, evidence about Salina Airport Authority's compliance
with those requirements and performing such other procedures as we considered
necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on
compliance for each major federal program. However, our audit does not provide a
legal determination on Salina Airport Authority's compliance with those
requirements.
Opinion on Each Major Federal Program
In our opinion, Salina Airport Authority complied in all material respects, with the
types of compliance requirements referred to above that could have a direct and
material effect on each of its major federal programs for the year ended December
31, 2012.
77
Report on Internal Control Over Compliance
Management of Salina Airport Authority is responsible for establishing and maintaining effective internal
control over compliance with requirements referred to above. In planning and performing our audit of
compliance, we considered Salina Airport Authority's intemal control over compliance with the types of
requirements that could have a direct and material effect on each major federal program to determine the
auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance for each major federal program and to test and report on internal control over compliance in
accordance with OMB Circular A -133, but not for the purpose of expressing an opinion on the effectiveness of
internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Salina
Airport Authority's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct noncompliance with a type of compliance requirement of a federal
program on a timely basis. A material weakness in internal control over compliance is a deficiency, or
combination of deficiencies, in internal control over compliance such that there is a reasonable possibility that
material noncompliance with a type of compliance requirement of a federal program will not be prevented,
detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a
deficiency or a combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a federal program that is less severe than a material weakness in internal control over
compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over compliance
that might be material weaknesses or significant deficiencies.. We did not identify any deficiencies in internal
control over compliance that we consider to be material weaknesses. However, material weaknesses may
exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of
internal control over compliance and the results of that testing based on the requirements of OMB Circular A-
133. Accordingly, this report is not suitable for any other purpose.
CLUBINE AND RETTELE, CHARTERED
Salina, Kansas
June 18, 2013
78
SALINA AIRPORT AUTHORITY
Salina, Kansas
Schedule 1
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Year Ended December 31, 2012
Pass- through
Federal Entity
Federal Grantor / Pass - through Grantor / CFDA Identifying Federal
Program or Cluster Title Number Number Expenditures
U.S. Department of Transportation
Airport Improvement Program 20.106 N/A $ 1,755,598
Total Expenditures of Federal Awards $ 1,755,598
See notes to the schedule of expenditures of federal awards.
79
SALINA AIRPORT AUTHORITY'
Salina, Kansas
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Year Ended December 31, 2012
Note 1 Basis of Presentation
The accompanying schedule of expenditures of federal awards includes the federal grant activity of
Salina Airport Authority and is presented on the accrual basis of accounting. The information in this
schedule is presented in accordance with the requirements of OMB Circular A -133, Audits of States,
Local Governments, and Non - Profit Organizations. Therefore, some amounts presented in this
schedule may differ from amounts presented in, or used in the preparation of, the basic financial
statements.
80
I
1 SALINA AIRPORT AUTHORITY
Salina, Kansas
Schedule 2
1 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the Year Ended December 31, 2012
1 There are no prior audit findings.
1
1
L
1
1
1
1
1
1
1
1
1
i
1
81
1
SALINA AIRPORT AUTHORITY
Salina, Kansas
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the Year Ended December 31, 2012
SECTION I - SUMMARY OF AUDITORS' RESULTS
Financial Statements
1. Type of auditor's report issued: Unqualified
2. Internal control over financial reporting:
Schedule 3
Material weaknesses identified? _yes X no
Significant deficiencies identified that are not considered
to be material weaknesses? _yes X none reported
3. Noncompliance material to financial statements noted? _yes X no
Federal Awards
1. Internal control over major programs:
Material weaknesses identified?
_yes X no
Significant deficiencies identified that are not considered
to be material weaknesses?
_yes X none reported
2. Type of auditor's report issued in compliance for major
programs:
Unqualified
3. Any audit findings disclosed that are required to be reported
in accordance with Section 510(a) of OMB Circular A -133:
_des X no
4. Identification of major programs:
20.106 Airport Improvement Program
5. Dollar threshold to distinguish between Type A and
Type B programs: $300,000
6. Auditee qualified as a low -risk auditee? _yes X no
SECTION If - FINANCIAL STATEMENT FINDINGS
None.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
None.
82
f
i
1
1
1
1
1
i
1
1
i
1
i
1
1
1
1,
1
1
None required.
0
SALINA AIRPORT AUTHORITY
Salina, Kansas
CORRECTIVE ACTION PLAN
For the Year Ended December 31, 2012
Schedule 4
83
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SA L INA A Irport
- n..u" +zip
■■■sir.
I I �
flm"romm ■
3237 Arnold I Salina, KS 674011785-827-3914
www.salinaairport.com I www.flysalina.com