Audit Report - 1997
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, 1997
Prepared by the Management
of the
Salina Airport Authority
/~. Salina Airport Authority
d~... ~ Salina Municipal Airport !Industrial Center
SALINA AIRPORT AUTHORITY
TABLE OF CONTENTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Fiscal Year Ended December 31, 1997
INTRODUCTORY SECTION
Letter of Transmittal
Principal Officers
Authority Staff Members
Organizational Chart
Certificate of Achievement
Salina Municipal Airport Aerial View
FINANCIAL SECTION
Independent Auditor's Report
Financial Statements:
Comparative Balance Sheets
Comparative Statements of Operations and Changes
in Retained Earnings
Comparative Statements of Cash Flows (Direct Method)
Reconciliation of Operating Loss to Net Cash Flows
from Operating Activities
Notes to Financial Statements, December 31, 1995 and 1994
Supplemental Information:
Schedules of Operations and Changes in Retained Earnings
Capital Expenditures
General Obligation Economic Development Bonds - Series 1990-A
General Obligation Economic Development Bonds - Series 1990-B
Leasehold Revenue Bonds - Series 1991
General Obligation Bonds - Series 1993A
General Obligation Bonds - Series 1993B
Schedule of Federal Assistance
Comparison of Gross Cash Balances with Depository Security
Insurance in Force
Data Collection form for Reporting on Audits of States, Local Governments,
and Non-Profit Organizations
Page
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Page
STATISTICAL SECTION
Operating Revenue History
Operating Expense History
Federal Financial Assistance History
Capital Expenditure History
Revenue Bond Coverage
Principal Customers
Local Government Property Tax Rates, Direct & Overlapping
Property Tax Revenue
Air Traffic, Fuel Flowage, Enplanements Trends
Major Employers
Salina Population, Demographic and Labor Statistics
51
52
53
54
55
56
57
58
59
60
61
OTHER INDEPENDENT AUDITOR'S REPORTS
Independent Auditor's Report on Internal Control Over Financial
Reporting Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards
Independent Auditor's Report on Compliance With Requirements
Applicable to each Major Program and Internal Control over
Compliance in Accordance with OMB Circular A-133
63
64
\I
~ Salina Airport Authority
d...~ Salina Municipal Airport ¡Industrial Center
- - - - ---~ ----- ---------- -----. -- ---- --- ---_.---
Chairman Vice-Chairman Secretary Treasurer Assistant Secretary I Treasurer
CHARLES STEVENS, JR. JAMES C. MAES R MICHAEL BEATTY FRIEDA MAl PAT BOLEN
Executive Director: TIMOTHY F. ROGERS, AAE. Operations Director: DONALD C. KNEUBUHL Board Attorney: GREG A BENGTSON
April 15, 1998
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, 1997 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 furnished copies of the
Authority's 1997 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 my knowledge and belief, the data as presented is accurate in
all material aspects, it 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 that all disclosures necessary
to enable the reader to gain maximum understanding are included in the report.
ORGANIZATION OF THE REPORT
The Authority applies the standards for preparation of local government financial reports recommended
by the Government Finance Officers of the United States and Canada (GFOA). The Authority's 1997
Comprehensive Annual Financial Report is presented in four sections:
Introductory Section - contains this letter of transmittal, a list of the Authority's principal
officers, a listing of Authority staff members, an organizational chart, the GFOA Certificate
of Achievement for Excellence in Financial Reporting for fiscal year 1996, and an aerial
photo of the Salina Municipal and Airport Industrial Center.
Financial Section - includes the independent auditor's report, the Authority's 1997
financial statements and supplemental schedules.
Statistical Section - includes selected financial and demographic information which
highlights economic and demographic trends.
Other Independent Auditor's Reports Section - includes reports concerning the
Authority's internal control structure, compliance with Comptroller General of the United
States government audit standards and compliance with audit standards due to receipt of
federal financial assistance, reporting on the presentation of the schedule of federal
financial assistance. reporting on the internal control structure used in administering
federal financial assistance programs, compliance with general requirements applicable
3237 ARNOLD. SALINA, KS 67401-8190. Off: (785) 827-3914. Fax: (785) 827-2221 . E-mail: saa@salair.org
to federal financial assistance programs, and compliance with specific requirements
applicable to major federal financial assistance program transactions.
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 (KSA 27-315 et seq.) Pursuant
to GASB Statement No. 14, the Authority is a component unit of the City of Salina. The Authority was
created for the purpose of accepting as surplus property portions of the former Schilling AF.B. which
was closed by the United States Department of Defense in June, 1965. By quitclaim deed the Authority
received over 3,500 acres of land and numerous buildings for the purpose of operating and developing
the Salina Municipal Airport and the Salina Airport Industrial Center. The Authority is managed and
controlled by a five-member Board of Directors appointed by the Salina City Commission.
The Board appoints the Executive Director, who is the chief executive and administrative officer of the
Authority. The Executive Director hires the remaining employees of the Authority. The Executive
Director and his staff of twelve employees manage and operate the Salina Municipal Airport and the
Salina Airport Industrial Center.
The Salina Municipal Airport is the only commercial service airport serving Salina/Saline County and
the 22-county area which comprises North Central Kansas. The Airport also services the corporate,
business, private aviation and fiight training needs of industry, business and individuals in the area.
The Airport is also used by the Kansas State University - Salina Aeronautical Technology Department.
The campus of K-State Salina is located adjacent to the airport. The K-State Salina Department of
Aeronautical Technology offers degrees in professional flight training, airframe and power plant
maintenance, and avionics technology.
The Salina Airport Industrial Center is home for 74 businesses and organizations. Forty-nine 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 Salina 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. Growth in the areas of agriculture, manufacturing, wholesale trade, services,
construction and retail trade, confirms Salina's position as one of Kansas' strongest regional economic
centers.
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Historically, the Salina/Saline County economy follows the trends of the Kansas economy as a whole.
The Winter 1997-98 issue of the Kansas Business Review describes the performance of the Kansas
economy as follows:
The Kansas economy has also performed strongly over the past two years and is
expected to continue to do so in 1998, although the current situation in Asia introduces a
significant amount of uncertainty into the forecast. Job growth has been well above
average in Kansas during the last four years and is expected to continue to be above
average in 1998. Although agriculture continues to be an important structural component
in the state's economy, solid growth in some other sectors, including construction, several
areas of manufacturing, and services indicates that the current strength of Kansas
economy derives from many sources. Such an economy should be less vulnerable to
individual shocks and have a smoother path of progress than one which depends upon a
single industry for its strength.
The 22 county North Central Kansas Region economy, which includes Salina/Saline County, was
described as follows:
North Central Kansas: Slow by Steady Growth, by Arthur J. Janssen, Emporia
State University.
With a 0.2 percent growth in population from 1990-1995, a 1.1 percent qrowth in real
personal income, and a 1.4 percent increase in employment in the same period, the north
central Kansas regional economy is growing, albeit slowly, as the forecasts show. The
economic pattern for the next year in north central Kansas seems to be similar to the
pattern in the past. The regional economy appears to be following the same general
trend as the state, but it does not seem to be growing as fast.
Economic Condition of the Airport and Airport Industrial Center
As of December 31, 1997 businesses and organizations at the Airport and Airport I ndustrial Center
employed an estimated 4,800 employees. Seventy-nine percent of the total number of employees live
within the Salina city limits. Total payroll for 1997 was an estimated $117,800,000. In 1997 local
purchases by Airport and Airport Industrial Center businesses and organizations totaled an estimated
$40,494.542. In 1997 capital expenditures equaled $120,753,702.
In 1997 the Airport and Airport Industrial Center attracted an estimated 41,129 visitors whose average
stay was three days. Airport and Airport Industrial Center visitors expended an estimated $12,018,190
while in Salina.
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 new jobs per year will be added to the economy during the
1998-2002 time period. Airport Industrial Center businesses such as Raytheon Aircraft Company,
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Tony's Pizza, Inc., Score Rite/Power Ad, Salina Vortex, and Coronado Engineering continue to work on
expansion plans that will result in additional jobs and payroll.
INITIATIVES AND DEVELOPMENT
Salina Municipal Airport
. Initiated Federal Aviation Administration (FAA) Airport Improvement Project No. 18. The $2,321,861
project is the fourth of a five-phase program to rehabilitate the aircraft parking apron at the Salina
Municipal Airport.
. Completed over $70,000 in airfield pavement maintenance.
. Supported three United States Air Force training exercises. During the three exercises, the USAF
purchased over 474,000 gallons of jet fuel.
Salina Airport Industrial Center
. Completed the sale of two industrial sites. Federal Express, Inc. purchased a site for a new 20,000
sq. ft. city sort facility. Coronado Engineering purchased a site for a new 25,000 sq. ft.
manufacturing facility.
. Completed the sale of a 72,000 sq. ft. warehouse facility to Soo Plastics.
. Completed the engineering design of a $4.33 million project to reconstruct 6.5 miles of Airport
Industrial Center secondary streets. On March 25, 1998, the Authority entered into a contract with
Shear's Construction, L.P. for the construction phase of the project. All construction work is
scheduled to be completed during calendar year 1998.
. Completed the first step in replatting property located at the Airport Industrial Center. When
completed, the new platting will enable the Authority to better develop and market the Airport
Industrial Center.
Financial Affairs
. Issued $2,830,000 in general obligation temporary notes to fund initial secondary street engineering
design and construction.
. The Authority and the City of Salina worked together in order to obtain a $1,0:31,214 grant from the
Kansas Department of Commerce and Housing in order to finance a portion of the Secondary Street
Construction Project.
Environmental
. The Authority completed work with the United States Air Force on an environmental assessment of
USAF flight training at the Salina Municipal Airport. The report concluded with a "finding of no
significant impact" (FONSI).
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INTERNAL CONTROL STRUCTURE AND BUDGETARY 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.
An annual budget is prepared in accordance with the Authority's By-laws. The Authority is specifically
exempt from the budget laws of the State of Kansas (K.S.A. 27-322). The Authority is not required to
demonstrate statutory compliance with its annual operating budget. Accordingly, budgetary data is not
included in the accompanying financial statements.
RESULTS OF OPERATIONS
Revenues
The Authority's total operating revenues increased 8.11 % over the previous year. The increase in
rental revenues was due to increases in building occupancy and rental increases. The increase in fixed
based operator (F.B.O.) fees is due to higher fuel sales by the Authority's two F.B.O.'s. The decrease
in landing fees is due to decreased charter flights at the Airport. The Authority realized a $69,663 gain
on the sale of tracts of land to Federal Express and Coronado Engineering, Inc. Other operating
revenues decreased to a more usual $29,393 which didn't include any out of the ordinary operating
revenue such as insurance proceeds.
A summary of operating revenues follows:
Increase Percent
Decrease) (Decrease)
Operating Revenues 1997 1996 From 1996 Increase
Rental revenues $1,067,236 $1,038,467 $ 28,769 + 2.7'7%
Fixed base operator 193,501 152,393 41 ,1 08 + 26.97%
Landing fees 8,503 9,055 ( 552) - 6.10%
Gain (loss) on sale of assets 69,663 0 69,663
Other operating revenues 29.393 65.723 (36.330) - 55.28%
Total $1.368,296 $1.265.638 $102,658 + 8.11%
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Expenses
Total operating expenses before depreciation increased 4.5%. Office and administrative expenses
increased by 14.28% due to increases in office supplies, postage, travel and meetings, legal and
accounting, medical insurance, engineering, telephone, airport promotion, property appraisals and
other administrative expenses. Maintenance expenses decreased by 7.72% due to decreases in
maintenance salaries, building maintenance, airfield maintenance, grounds maintenance, fire
department expense and other maintenance expenses.
A summary of operating expenses follows:
Increase Percent
(Decrease) (Decrease)
Operating Expenses 1997 1996 From 1996 Increase
Office and Administration $568,606 $497,561 $ 71,045 +14.28%
Maintenance 367.530 398,287 (30,757) - 7 J2%
Total $936,136 $895,848 $ 40,288 + 4.50%
FIDUCIARY OPERATIONS
In 1991 the Authority entered into an Interlocal Cooperative Agreement with the Kansas Board of
Regents, Kansas State University, and the City of Salina. Under the agreement, the City transferred to
the Authority the proceeds from a 1/2 cent retail sales tax. The funds were designated for capital
improvements to the campus of Kansas State University--Salina, College of Tectmology located at the
Airport Industrial Center. In accordance with the terms of the interlocal agreement, the Authority was
responsible for assuring that the sales tax proceeds are expended in a manner consistent with specific
project budgets previously approved by the Salina City Commission. Durin~ 1996, the Authority
concluded its obligations under terms of the Interlocal Cooperative Agreement and paid out the
remaining $116,838.00 of sales tax proceeds to Kansas State University. During 1997, the Authority
did not collect or disburse Kansas State University - Salina sales tax proceeds.
DEBT ADMINISTRATION
The outstanding long-term debt of the Authority was $5,330,000 at December 31, 1997. This debt
consists of building revenue bonds, general obligation bonds, and leasehold revenue bonds of the
Authority. Maturities range from 2003 through 2010 and interest rates range from 3.4% to 8.5%. Both
principal and interest are payable from proceeds of direct financing leases and the general revenues of
the Authority. Details are shown in Note 7: LONG-TERM DEBT.
The Authority did issue $2,830,000 in general obligation temporary notes in July, 1997 at an average
annual interest rate of 4.2%. These notes will be paid in June, 1998 when 10-year general obligation
internal improvement bonds are sold by the Authority.
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On April 3, 1997 the Authority sold a 72,000 sq. ft. warehouse facility to Soo Plastics, Inc. The
proceeds of this transaction, $536,587 plus $118,413 in unrestricted cash, were used to defease
$655,000 of the Authority's $1,900,000 General Obligation Economic Development Bonds, Series
1990-A. On July 1, 1997, the Authority entered into an Escrow Trust Agreement with Sunflower Bank
of Salina, Kansas to refund, pay and discharge the $655,000 portion of the Authority's $1,900,000
General Obligation Economic Development Bonds, Series 1990-A.
CASH MANAGEMENT
All cash temporarily idle during 1997 was invested by the Executive Director of the Authority in short-
term investments to attain the highest possible return consistent with the Authority's liquidity needs. All
investments are in compliance with K.S.A. 12-1675 which controls the investment of public funds by
Kansas governmental units. All funds are deposited daily and all accounts are intemst bearing.
RISK MANAGEMENT
The Authority is exposed to risks of loss associated with the operation of a public use airport and the
operation of an airport industrial center. To handle the associated risks of loss, the Authority uses
available tort liability legislation and purchases the appropriate types of insurance coverage. It is the
policy of the Authority to eliminate or transfer risk of loss where possible.
The Authority is covered by the Kansas Tort Claims Act. (K.S.A. 75-6101, et seq.). The act provides
that a governmental entity shall be liable for damages caused by the negligent or wrongful act or
omission of any of its employees while acting within the scope of their employment under circumstance
where the governmental entity, if a private person, would be liable under the laws of Kansas. At the
same time, the act (1) provides for 22 categories of exemptions from liability for 81 governmental entity
or an employee acting within the scope of the employee's employment and (2) limits liability for any
other claims within the scope of the act to $500,000 for any number of claims arising out of a single
occurrence or accident.
The Authority carries $500,000 of comprehensive general liability insurance which matches the limit
established by the Kansas Tort Claims Act. During 1997 the Authority carried $6,677,393 of insurance
on airport commercial properties.
The Authority's commercial property insurance included $1,515,186 in loss of rents coverage. All
contractors and lessees are required to carry amounts of insurance with limits and deductibles
approved by the Authority. A schedule of insurance in force at December 31, 1997 is included in this
report.
In addition, the Authority uses various risk management techniques. All contracts and leases are
reviewed by the Authority's legal counsel. All contractors and subcontractors are required to submit
evidence of insurance coverage naming the Salina Airport Authority and the City of Salina as named
additional insured parties.
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INDEPENDENT AUDIT
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, Harrison & Arnett, Chartered.
The independent audit is in accordance with the Kansas Minimum Audit Guide, the Government
Auditory Standards issued by the Comptroller General of the United States, and the provisions of the
Office of Management and Budget Circular A-128, "Audits of State and Local Governments".
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 (CAFR) for the fiscal year ended December 31, 1996. The
Certificate of Achievement is a prestigious national award recognizing conformance with the highest
standards for preparation of state and local government financial reports.
In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable
and efficiently organized comprehensive annual financial report (CAFR), whose contents conform to
program standards. Such CAFR must satisfy both generally accepted accounting principles and
applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. The Salina Airport Authority has
received a Certificate of Achievement for the last five consecutive years (fiscal years ended 1992 -
1996). We believe our current report continues to conform to the Certificate of Achievement program
requirements, and we are submitting it to GFOA.
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, Harrison & Arnett, Chartered, Certified
Public Accountants, Shirley J. Jacques, County Clerk for Saline County, Gerald Cook, President of the
Salina Area Chamber of Commerce and The University of Kansas Institute for Public Policy and
Business Research in the preparation of this report.
Respectfully submitted,
7~)~
Timothy F. Rogers, A.A.E.
Executive Director
Salina Airport Authority
cc:
The City of Salina Board of Commissioners
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(THIS PAGE INTENTIONALLY LEFT BLANK)
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SALINA AIRPORT AUTHORITY
PRINCIPAL OFFICERS AS OF DECEMBER 31.1997
BOARD OF DIRECTORS
Charles Stevens, Jr.
James. C. Maes
R. Michael Beatty
Pat Bolen
Frieda Mai
Chairman
Vice-Chairman
Secretary
Treasurer
Asst. Secretary/Treasurer
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
Thomas G. Arnett
Harrison & Arnett, Chartered
Salina, Kansas
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SALINA AIRPORT AUTHORITY
AUTHORITY STAFF MEMBERS
as of December 31.1997
ADMINISTRATION STAFF
Timothy F. Rogers, AAE.
Donald C. Kneubuhl
Cathy Lentz
Mary Potter
Executive Director
Operations Director
Administrative Assistant
Secreta ry /Rece ption i st
OPERATIONS, MAINTENANCE, AIRCRAFT RESCUE & FIRE FIGHTING STAFF
Loren Carleton
Kim Colby
Gary Hansen
Dale Mattison
David Nease
Rob Pejsha
Jason Pinnick
Operations, Maintenance & ARFF
Operations, Maintenance & ARFF
Operations, Maintenance & ARFF
Operations, Maintenance & ARFF
Operations, Maintenance & ARFF
Operations, Maintenance & ARFF
Operations, Maintenance & ARFF
TERMINAL BUILDING CUSTODIAL STAFF
Vachel Keaton
Francis Vestal
Custodian
Custodian
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SALINA AIRPORT AUTHORITY
Organizational Chart
As of December 31,1997
SAA BOARD OF DIRECTORS
Charles E. Stevens, Jr. 3/1/93 - 2/28/99
James C. Maes 3/1195 - 2/28/98
R Michael Beatty 3/1196 - 2/28/99
Pat Bolen 3/1197 - 2/28/00
Frieda Mai 3/1197 - 2/28/00
EXECUTIVE DIRECTOR
Timothy F. Rogers, A.A.E.
~
N
DIRECTOR OF OPERATIONS
Donald C. Kneubuhl
Certificate of
Achi eve 111 en t
for Excellence
in Financial
Reporting
Presented to
Salina Airport Authority,
Kansas
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 1996
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.
~ ~;de~
fJ fh /. cCæt
Executive Director
- 13 -
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HARRISON & ARNETT
CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
EUGENE O. HARRISON, C.P.A.
THOMAS G- ARNETT, C.P.A.
719 EAST CRAWFORD. SALINA, KANSAS 67401
PHONE: (913) 827.7244
FAX: (913) 827.0048
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Salina, Kansas
We have audited the accompanying financial statements of Salina Airport Authority, Salina, Kansas, as of and for
the years ended December 31, 1997 and 1996, as listed in the table of contents. These financial statements are the
responsibility of Salina Airport Authority, Salina, Kansas, management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to
financial audits contained in Government Auditing Standards, issued by the Comptroller Ge:neral of the United
States. Those standards require that we plan and perfonn the audit to obtain reasonable assw-ance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of Salina Airport Authority, Salina, Kansas, as of December 31, 1997 and 1996, and the results of its
operations and the cash flows of its proprietary fund types and nonexpendable trust funds for the years then ended
in confonnity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated April 15, 1998, on our
consideration of Salina Airport Authority, Salina, Kansas's internal control over financial reporting and our tests
of its compliance with certain provisions oflaws, regulations, contracts and grants.
Our audit was perfonned for the purpose of fonning an opinion on the financial statements taken as a whole. The
accompanying 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-l33, Audits of States, Local Governments, and
Non-Profit Organizations, and is not a required part of the general purpose financial statements of Salina Airport
Authority, Salina, Kansas. Such infonnation has been subjected to the auditing procedures applied in the audit of
the general purpose financial statements and, in our opinion, is fairly stated, in all material respects, in relation to
the general purpose financial statements taken as a whole.
~d~ ~J
J
Harrison & Arnett, Chartered
Salina, Kansas
April 15, 1998
~LfE21 . ~PA
Certified Public Accountant in charge of
and actively engaged on this audit.
- 15 -
MEMBERS OF
DIVISION FOR CPA FIRMS PRIVATE COMPANIES PRACTICE SECTION
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
KANSAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
(THIS PAGE INTENTIONALLY LEFT BLANK)
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(THIS PAGE INTENTIONALLY LEFT BLANK)
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SALINA AIRPORT AUTHORITY
COMPARATIVE BALANCE SHEETS
ASSETS
December 31
1997
1996
CURRENT ASSETS:
Cash (Note 2)
Accounts receivable-net of allowance for
uncollectible accounts of $500 and $500
respectively
Prepaid expenses
Other receivables
$ 3,229,898
$
586,562
5,911
4,425
2,813
34,606
Total Current Assets
3,235,809
628,406
RESTRICTED ASSETS: (Note 3)
Cash and cash equivalents
Assets designated for deferred
compensation benefits
85,000 343,500
67,775 60,945
152,775 404,445
1,374,152 1,992,945
18,901,924 17,040,767
Total Restricted Assets
NET INVESTMENT IN FINANCING LEASES (Note 4)
NET INVESTMENT IN FIXED ASSETS (Note 5)
OTHER ASSETS:
Bond issue costs, less accumulated amortization
of $38,600 and $31,974 respectively
72,882
76,237
TOTAL ASSETS
$23,737,542
$20,142,800
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( continued)
See notes to financial statements.
SALINA AIRPORT AUTHORITY
COMPARATIVE BALANCE SHEETS
LIABILITIES AND EQUITY
December 3 1
1997
1996
CURRENT LIABILITIES:
Accounts payable-operations
Accounts payable-capital
Accrued payroll and expenses
Deferred maintenance
$ 18,673 $ 23,120
81,448 38,451
28,706 14,536
13,564 11,418
7,298 511
149,689 88,036
Deferred rent
Total Current Liabilities
RESTRICTED LIABILITIES:
Accrued interest payable
Deferred interest in financing leases
Current maturities of long-term debt
Deferred compensation payable
112,403
63,918
215,000
67,775
72,258
75,056
205,000
60,945
Total Restricted Liabilities
459,096
413,259
LONG-TERM LIABILITIES: (Note 7)
Bonds payable, less current maturities
5,115,000
3,155,000
Total Liabilities
5,723,785
3,656,295
EQUITY:
Contributed capital, Federal
Aviation Administration
Retained earnings
9,731,232 8,674,538
8,282,525 7,811,967
18,013,757 16,486,505
$ 23,737,542 $ 20,142,800
Total Equity
TOTAL LIABILITIES AND EQUITY
- 19 -
See notes to financial statements.
SALINA AIRPORT AUTHORITY
COMPARATIVE STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN RETAINED EARNINGS
OPERATING REVENUES:
Rental revenues
Fixed base operator fees
Landing fees
Gain (loss) on sale of assets
Other operating revenues
January 1 to December 31
1997 1996
$ 1,067,236 $ 1,038,467
193,501 152,393
8,503 9,055
69,663
29,393
65,723
Total Operating Revenues
1,368,296
1,265,638
OPERATING EXPENSES BEFORE DEPRECIATION
Office and administration
568,606 497,561
367,530 398,287
936,136 895,848
432,160 369,790
825,528 749,778
(393,368) (379,988)
Maintenance
Total Operating Expenses Before Depreciation
OPERATING INCOME BEFORE DEPRECIATION
DEPRECIATION
OPERATING LOSS
NON-OPERATING INCOME (EXPENSE):
Mill levy
Interest on investments and financing leases
Interest expense
Net Non-Operating Income
338,058 357,887
233,802 230,092
(257,601) (232,301)
314,259 355,678
(79,109) (24,310)
NET INCOME (LOSS)
ADD DEPRECIATION ON ASSETS ACQUIRED THROUGH
FEDERAL CONTRIBUTIONS
549,667
487,863
INCREASE (DECREASE) IN RETAINED EARNINGS
470,558
463,553
RETAINED EARNINGS, January 1
7,811,967
7,348,414
RETAINED EARNINGS, December 31
$ 8,282,525
$7,811,967
- 20 -
See notes to financial statements.
SALINA AIRPORT AUTHORITY
COMP ARA TIVE STATEMENTS OF CASH FLOWS
(DIRECT METHOD)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from sales, commissions, fees and rents
Cash paid employees for services
Cash paid to suppliers for goods and services
Cash paid to KSU-Salina and project contractors
January 1 to December 31
1997 1996
$1,476,264 $ 1,260,574
(351,848) (391,156)
(571,752) (552,310)
(187,833)
93,123 36,515
93,123 36,515
2,384,836 (68,331)
930,062 998,393
$ 3,314,898 $ 930,062
Net Cash Provided (Used) in Operating Activities
552,664
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Purchase of property, plant and equipment (2,744,209)
Proceeds from capital grants (FAA) 1,640,967
Proceeds from property tax 338,058
Principal payments on debt (860,000)
Principal received on financing leases 618,793
Interest received on financing leases 129,541
Principal received on long-term note 2,830,000
Bond issue costs paid (3,271)
Interest paid on long-term bonds (210,830)
Net Cash Provided (Used) in Capital and Related
Financing Activities
1,739,049
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received on investments
Net Cash Provided (Used) in Investing Activites
INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS
CASH BALANCE - January 1
CASH BALANCE - December 31
CASH AND CASH EQUIVALENTS AT END OF YEAR
CONSISTS OF:
Unrestricted cash
Restricted cash and cash equaivalent
$ 3,229,898
85,000
- 21 -
5) 3,314,898
See notes to financial statements.
129,275
(2,486,606)
2,006,786
357,887
(190,000)
107,706
199,863
(229,757)
(234,121)
$ 586,562
343,500
$ 930,062
RECONCILIATION OF OPERATING LOSS TO NET
CASH FLOWS FROM OPERATING ACTIVITIES
December 31
1997
1996
OPERATING LOSS
$ (393,368)
$ (379,988)
ADJUSTMENTS RECONCILING OPERATING LOSS
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation
Payments to KSU-Salina and project contractors
Basis of asset sold
825,528
749.778
(187,833)
100,521
CHANGES IN ASSETS AND LIABILITIES:
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Decrease (increase) in prepaid expense
Increase (decrease) in de felTed rent
(1,486)
(4,447)
14,170
2,813
8,933
(50)
(58,745)
(924)
12,051
(5,014)
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ 552,664
$ 129,275
NONCASH CAPITAL TRANSACTIONS
None
- 22 -
See notes to financial statements.
SALINA AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
December 3 1, 1997 and 1996
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A.
ORGANIZATION - The Salina Airport Authority (the "Authority") is an authority established by
the City of Salina, pursuant to Chapter 27, Article 3, of the Kansas Statutes Annotated. The
Authority was established for the purpose of acquiring surplus federal government property
specifically the Schilling Air Force Base located near the City of Salina. The Authority administers
the airport, commercial development and rental of associated real estate. In accordance with GASB
Statement No. 14, the Authority is considered as a component unit of the City of Salina- The
Authority is discreetly presented in the City's annual financial reports.
B.
BASIS OF ACCOUNTING - The Authority consists of an 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 matter similar to private business enterprises. The intent of the Board 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. It is the Authority's policy to follow all F ASB
standards issued after November 30, 1989, for its proprietary activities unless those new F ASB
pronouncements conflict with GASB guidance.
c.
CASH AND CASH EQUIVALENTS - For the purpose of the comparative statement of cash flows,
the Authority considers all highly liquid investments (including restricted assets) with maturities of
three months or less when purchased to be cash equivalents.
D.
INVESTMENTS - Investments relating to the deferred compensation plan are reported at market
value. All other investments are reported at cost. The Authority's other investments consist of
Certificates of Deposit.
E.
PROPERTY AND EQUIPMENT - On September 9, 1966, the United States of America pursuant
to section 13(g) of the Surplus Property Act of 1944, transferred certain portions of the Schilling Air
Force Base to the Authority.
Property and equipment assumed by the Authority on September 9, 1966 is carried at fair market
value at that date of $529,872. Subsequent additions to property and equipment are recorded at cost.
Maintenance and repairs are expensed as incurred. When properties are disposed of, the related cost
and accumulated depreciation are removed from the respective accounts and any gain or loss on
disposition is credited or charged to operations. Runways, taxiways, parking areas, sewers and other
similar items are written off when fully depreciated unless clearly identified as still being in use.
- 23 -
Assets are depreciated using the straight-line method over the estimated useful lives of the assets as
follows:
Buildings and Improvements
Infrastructure Items
Equipment
Years
5-50
10-40
5-25
Depreciation applicable to certain property and equipment which have been funded by or
contributed to the Authority by the federal government is charged against the respective capita]
grant equity balance. This charge is effected by transferring the applicable depreciation from
retained earnings and has no effect on income.
In accordance with Financial Accounting Standard Board Statement No. 62, interest during
construction periods, when significant, is capitalized and included in the cost of property and net
Investment in financing leases. In 1996 $8,963 in interest was capitalized.
F.
BONDS ISSUE COSTS - Bond issue costs are deferred and amortized using the straight-line
method over the life of the bonds to which it relates.
G.
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. The amount of accrued
vacation pay at December 31,1997 and 1996 was $11,453 and $12,841 respectively.
H.
CAPITAL GRANT FUNDS - Certain expenditures for capital improvements receive significant
federal funding through the Airport Improvement Program (AlP) of the Federal Aviation
Administration (FAA). The Authority funds the remaining balance of such expenditures. Capital
funding provided under government grants is considered earned as the related approved capital
improvement expenditures are disbursed.
I.
INVENTORY - 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.
J.
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS - The Authority calculates its allowance
for specific accounts using specific account analysis.
K.
LEASES - The Authority is a lessor under numerous lease agreements. The leases are classified as
operating leases, except for certain special facility leases which are accounted for as direct financing
leases.
L.
TAXES - The Authority is exempt from payment of federal and state income, property and certain
other taxes. The Authority is subject to property tax on non-airport use property acquired after
1990.
M.
BUDGETS - The Authority is specifically exempt from Kansas Budget Law. The Authority is not
required to demonstrate statutory compliance with its annual operating budget. Accordingly
budgetary data is not included in the financial statements.
- 24 -
NOTE 2: CASH, CASH EQUIVALENTS AND INVESTMENT SECURITIES
Cash, cash equivalents and investment securities included in the comparative balance sheets consist of the
following:
December 3 I
1997
1996
Cash and cash equivalents
Current
Restricted
$3,229,898
85,000
$586,562
343,500
Total Cash and Cash Equivalents
3,314,898
930,062
Investment securities-restricted
Deferred compensation plan assets
67,775
60,945
Total Cash, Cash Equivalents and
Investment Securities
$3,382,673
$991,007
Kansas statutes authorize the Authority to invest in United States Obligations, secured repurchase agreements,
certificates of deposit, time deposits and open accounts.
The carrying account of deposits and investments securities by type of investment are as follows:
Carrying Value
December 3 I
1997
1996
Cash deposits
Certificates of deposit
$3,294,898
20,000
$910,062
20,000
Total Deposits
3,314,898
930,062
Deferred compensation plan assets
67,775
60,945
Total Deposits and Investment Securities
$3,382,673
$991,007
- 25 -
Deposits of the Authority with financial institutions are categorized by credit risk as follows:
December 31
1997
1996
Carrying
Value
Cash on deposit insured by federal
deposit insurance corporation
$ 300,000
Collateralized with securities held
by pledging financial institution in
Authority's name
3,014,848
3,314,848
Cash on hand (petty cash)
50
$ 3,314,898
Carrying
Value
Bank
Balance
Bank
Balance
$ 300,000
$300,000
$ 300,000
3,058,264
639,012
784,236
3,358,264
939,012
1,084,236
50
$ 3,358,264
$939,062
$ 1,084,236
The Authority's deposits are entirely covered by federal depository insurance or by collateral held by
pledging financial institutions in the Authority's name.
Note 3: RESTRICTED ASSETS
Restricted assets consist of the following:
December 3 1
1997
1996
Cash and
Cash
Equivalents
RESTRICTED BY BOND AGREEMENT:
Bond reserves:
Leasehold bonds-91
$
85,000
FEDERAL A VIA TION ADMINISTRATION
AGREEMENT LAND SALE PROCEEDS
DEFERRED COMPENSATION PLAN
$
85,000
-26 -
Investments
Total
Total
$
$ 85,000
$
85,000
258,500
67,775 67..775 60,945
--
$ 67,775 $152,775 $ 404,445
--
--
All restricted amounts are held by the Authority except for assets in the deferred compensation plan which
are held by the trustee of the plan.
Leasehold Revenue Bonds-1991:
The proceeds of the 1991 leasehold revenue bonds were used to construct a building that was leased to a state
university. The lease is a financing lease that transfers ownership at the end ofthe lease. The bond agreement
established certain reserve requirements which the Authority has met.
NOTE 4: NET INVESTMENT IN FINANCING LEASES
Net investment in financing leases consist of the following:
December 31
Total lease payments
Less: Unearned income
1997
$ 2,652,300
1,278,148
Net investment in financing leases
$ 1,374,152
See Note 3 for projects financed through these leases.
Activity in net investment in financing leases was as follows:
1996
$ 3,613,207
1,620,262
$ 1,992,945
Year Ended December 3 I
Beginning Balance
Collected principal
1997
$ 1,992,945
(618,793)
Ending Balance
$ 1,374,152
NOTE 5: NET INVESTMENT IN FIXED ASSETS AND CONSTRUCTION IN PROGRESS
Net investment in fixed assets consist of the following:
1996
$ 2,100,651
(107,706)
$ 1,992,945
December 31
1997 1996
$ 2,903,932 $ 2,567,658
6,771,387 6,541,389
16,122,5116 14,042,676
1,075,725 1,035,153
26,873,560 24,186,876
(7,971,636) (7,146,109)
$ 18,901,924 $ 17,040,767
FIXED ASSETS:
Land
Buildings and improvements
Airfield and infrastructure
Equipment
Less-accumulated depreciation
Net Fixed Assets
No interest was capitalized in 1997 or 1996.
- 27-
Activity in the fixed assets accounts for 1997 was as follows:
Building and
Improve- Airfield and
Land ments Infrastructure Equipment
Beginning Balance $ 2,567,658 $ 6,541 ,389 $ 14,042,676 $1,035,153
Additions 436,795 229,998 2,079,840 40,572
Disposals (100,521)
Ending Balance $ 2,903,932 $6,771,387 $ 16,122,516 $ 1,075,725
NOTE 6: 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 op'~rating leases.
The following is a schedule of minimum future rentals on noncancellable operating leases to be received in
each of the next five years and thereafter:
Years Ended
December 31
1998 $ 888,548
1999 665,975
2000 461,833
2001 405,854
2002 157,721
Later years 400,466
Total $ 2,980,397
NOTE 7: LONG TERM DEBT
December 31
l221 ~~
General obligation economic development bonds series
1990A, orginally issued July 1, 1990 due in annual in-
stallments increasing from $45,000 in 1992 to $175,000
in 2010 plus interest ranging from 6.4% to 8.37%
$ 860,000
$ 1,580,000
General obligation economic development bonds series
1990B, originally issued October 1, 1990 due in annual
installments increasing from $20,000 in 1992 to $70,000
in 2010 plus interest ranging from 6.5% to 8.5%
610,000
640,000
- 28 -
Note 7. (continued)
December 31
1997
1996
Leasehold revenue bonds series 1991, originally issued
November 1, 1991, due in annual installments increasing
from $35,000 in 1992 to $90,000 in 2006 plus interest
ranging from 5% to 7.25%
605,000
655,000
General obligation bonds series 1993A, originally issued
December 1, 1993, due in annual installments increasing
from $35,000 in 1994 to $45,000 in 2003 plus interest
at 3.4% to 5%
245,000
280,000
General obligation bonds series 1993B, originally issued
December I, 1993 due in annual installments increasing
from $25,000 in 1994 to $35,000 in 2003 plus interest
at 3.85% to 4.75%
180,000
205,000
General obligation temporary 4.2% notes series 1997
to be refinanced within three years, issued July 1, 1997
2,830,000
Total
Less current maturities
5,330,000
215,000
3,360,000
205,000
Long-term debt, less current maturities
$ 5,115,000
$ 3,155,000
The proceeds of 1990A, 1990B and 1991 leasehold revenue bonds were used to purchase or construct
commercial real property transferred under direct financing leases. (See Note 4). The bonds are expect-
ed to be repaid from proceeds of the financing leases.
The proceeds of the series 1993A bonds were used to finance improvements to the Airport and the pro-
ceeds of the series 1993B bonds were used to finance matching funds for a Federal Aviation Administra-
tion grant. The 1993A and 1993B series bonds are to be repaid from the general revenue of the Authority
The proceeds of the temporary notes series 1997 will be used to fund design and construction of secondary
streets. These notes will be repaid from proceeds of a permanent bond issue.
- 29 -
The annual bond payments for all bonds outstanding as of December 31, 1997 are as follows:
Payable in General Leasehold
Year Ended Obligation Revenue Interest
December 31 Bonds Bonds Payments Total
1998 $ 165,000 $ 50,000 $159,343 $ 374,343
1999 180,000 55,000 147,220 382,220
2000 190,000 60,000 133,808 383,808
2001 195,000 60,000 119,123 374,123
Thereafter 3,995,000 380,000 391,840 4,766,840
Total $4,725,000 $605,000 $951,334 $6,281,334
The annual bond interest for all bonds outstanding as of December 31, 1997, are as follows:
Payable in General Leasehold Total
Year Ended Obligation Revenue Interest
December 31 Bonds Bonds Payments
1998 $ 117,640 $ 41,703 $ 159,343
1999 108,668 38,552 147,220
2000 98,803 35,005 133,808
2001 88,078 31,045 119,123
Thereafter 305,915 85,925 391,840
Total $ 719,104 $232,230 $951,334
Activity in long term debts for 1997 was as follows:
Beginning Bonds Principal Ending
Balance Issued Paid Balance
General Obligation Economic Development Bonds
Series 1990A $1,580,000 $ $ 720,000 $ 860,000
General Obligation Economic Development Bonds
Series 1990B 640,000 30,000 610,000
Leasehold Revenue Bonds
Series 1991 655,000 50,000 605,000
General Obligation Bonds
Series 1993A 280,000 35,000 245,000
- 30 -
Note 7. (continued)
General Obligation Bonds
Series 1993B
Beginning Principal Ending
Balance Bonds Issued Paid Balance
$ 205,000 $ $ 25,000 $ 180,000
General Obligation Temporary Notes
Series 1997
2,830,000
2,830,000
Totals
$ 3,360,000
$ 2,830,000
$ 860,000
$ 5,330,000
Note 8: DEFINED BENEFIT PENSION PLAN
Plan description. The Authority as a non-school municipality participates in the Kansas Public Employees
Retirement System (KPERS), a cost-sharing multiple-employer defined benefit pension plan as provided
by K.S.A. 74-4901, et seq. KPERS provides retirement benefits, life insurance, disability income benefits,
and death benefits. Kansas law establishes and amends benefit provisions. KPERS issues a publicly avail-
able financial report that includes financial statements and required supplementary infomlation. That report
may be obtained by writing to KPERS (400 SW 8th Avenue, Suite 200; Topeka, Kansas 66603-3925 or by
calling 1-800-228-0366.)
Funding Policy. K.S.A. 74-4919 establishes the KPERS member-employee contribution rate at 4% of
covered salary. The employer collects and remits member-employee contributions according to the provi-
sions of section 414(h) of the Internal Revenue Code. State law provides that the employer contribution
rate be determined annually based on the results of an annual actuarial valuation. KPERS is funded on an
actuarial reserve basis. State law sets a limitation on annual increases in the contribution rates for KPERS
employers- The employer rate established by statute for calendar year 1997 is 2.63%. The non-school
municipality employer contributions to KPERS for the years ending December 31, 1997, 1996, and 1995
were $8,128, $9,073, and $7,732, respectively, equal to the statutory required contributions for each year.
Note 9: DEFERRED COMPENSATION PLAN
The Authority offers its employees a deferred compensation plan formed in accordance with Internal
Revenue Code Section 457. The plan, available to all employees, permits them to defer a portion of their
salary until future years. The deferred compensation assets, which are funded currently with a third party
trustee, are not available to employees until termination, retirement, death or unforeseeable emergency.
All amounts of compensation deferred under the plan, all property and rights purchased with those
amounts, and all income attributable to those amounts, property, or rights are (until paid or made available
to the employee or other beneficiary) solely the property and rights of the Authority, subject only to the
claims of the Authority's general creditors. Participants' rights under the plan are equal to those of general
creditors of the Authority in an amount equal to the fair market value of the deferred account for each
participant.
It is the opinion of the Authority's legal counsel that the Authority has no liability for losses under the
plan but does have the duty of care that would be required of an ordinary prudent investor. The Authority
believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future.
- 31 -
Authority payroll and contributions of employees electing to participate follows:
Authority's total payroll
Electing employees payroll
Electing employees contributions
December 31
1997 1996
$ 390,231 $ 360,043
147,271 159,976
4,160 4,160
NOTE 10: RETAINED EARNINGS AND CONTRIBUTIONS IN AlP
Under the provisions of various bond agreements, certain assets are restricted for specific uses (Note 3).
Retained earnings which have been reserved relating to these restricted assets consist of the following:
December 3 I
1997 1996
$ 258,500 $ 258,500
85,000 85,000
343,500 343,500
7,939,025 7,468,467
$ 8,282,525 $ 7,811,967
Reserved retained earnings:
Land sale proceeds
Leasehold bonds-91
Reserved retained earnings
Unreserved retained earnings
Total retained earnings
Board designated restricted assets are not reported as reserved reatined earnings.
Changes in grants and contributions are summarized as follows:
Balance January 1, 1996
Federal Aviation
Administration
$ 7,121,009
1996 additions, AlP grants
2,041,392
Depreciation on property and equipment acquired by
government grants
(487,863)
Balance December 31, 1996
8,674,538
1997 additions, AlP grants
1,606,361
Depreciation on property and equipment acquired by
government grants
(549,667)
Balance December 31, 1997
$ 9,731,232
- 32 -
NOTE 11: MAJOR CUSTOMERS
The Authority receives significant operating and financing lease revenue from Raytheon Aircraft
Company (fonnerly Beech Aircraft Corporation), Kansas State University-Salina, Exide Corporation,
Moore's Midway Aviation, Schwan's Sales, and Flower Aviation. Rentals from these six tenants equals
43% of operating and capital lease revenue for the year ended December 31, 1997.
NOTE 12: NON-OPERATING INCOME
Net non-operating income consisted of the following for the years ended December 31, 1997 and 1996:
1997 1996
$ 338,058 $ 357,887
140,679 198,524
93,123 31,568
571,860 587,979
Mill levy
Interest and investment income
Financing leases
Other interest
Total
Interest expense
Revenue bonds
General obligation bonds
Amortization of bond issue costs
Total
31,243 47,478
219,732 177,961
6,626 6,862
257,601 232,301
$ 314,259 $355,678
Net non-operating income
NOTE 13: DISCHARGED BONDS
The Authority entered into an escrow trust agreement with the Sunflower Bank, N.A. on July 1, 1997.
Under this agreement, the authority paid into the trust $680,905 and the bank agreed to pay from the trust
bond principal and interest as follows:
General Obligation Economic Development Bonds
Series 1990-A
Principal
Interest
9/1/97
3/1/98
9/1/98 $655,000
$ 22,917
$ 22,917
- 33 -
THIS PAGE INTENTIONALLY LEFT BLANK
- 34 -
THIS PAGE INTENTIONALLY LEFf BLANK
- 35 -
SALINA AIRPORT AUTHORITY
SCHEDULES OF OPERA TrONS AND CHANGES
IN RETAINED EARNINGS
January] to December 31
1997 1996
OPERATING REVENUES
Building rents
Ramp rents
Land rents
Agri land rents
Hangar rents
Tank fann rent
Fixed base operator
Landing fees
Commission-car rentals
$ 863,564
40,966
65,786
62,456
30,248
4,215
193,501
8,503
9,348
69,663
20,046
Gain (loss) on disposition of assets
Other income
TOTAL OPERATING REVENUES
1,368,296
OPERATING EXPENSES BEFORE DEPRECIATION
ADMINISTRA TrVE EXPENSES
Office salaries
Office supplies
Postage
Travel and meetings
Legal and accounting
Insurance- property /liabil i ty
Insurance-medical
Engineering
FICA tax
168,734
11,263
5,741
18,542
40,096
51,153
57,558
11,768
27,331
370
8,128
12,760
20,000
56,042
38,350
14,133
6,327
20,310
Kansas unemployment tax
Employees retirement
Telephone
Industrial development
Airport promotion
Property taxes
Dues and subscriptions
Property appraisals
Other administrative
TOTAL ADMINISTRA TrVE EXPENSES
$ 568,606
- 36 -
$ 846,060
32,889
65,096
57,530
33,112
3,780
152,393
9,055
11,523
50,000
4,200
1,265,638
171,274
6,910
3,600
6,276
37,696
53,733
39,067
8,206
29,400
398
9,073
9,486
20,000
32,674
39,700
14,781
750
14,537
$ 497,561
January 1 to December 31
1997 1996
MAINTENANCE EXPENSES
Maintenance salaries
Building maintenance
Airfield maintenance
Grounds maintenance
Equipment gas, oil & repairs
Utilities
Fire department expense
Agri land expense
Other maintenance expenses
197,284
21,858
16,269
1,378
29,967
80,778
2,760
2,007
15,229
218,957
40,692
24,390
3,529
27,650
63,802
3,802
15,465
TOTAL MAINTENANCE EXPENSES
367,530
398,287
TOTAL OPERATING EXPENSES BEFORE
DEPRECIATION
936,136 895,848
432,160 369,790
825,528 749,778
(393,368) (379,988)
OPERATING EARNINGS BEFORE DEPRECIATION
DEPRECIATION EXPENSE
OPERATING LOSS
NON-OPERATING INCOME (EXPENSE)
Mill levy
Interest income-capital leases
Interest income
Bond interest-expense
Amortization of bond costs
338,058 357,887
140,679 198,524
93,123 31,568
(250,975) (225,439)
(6,626) (6,862)
314,259 355,678
(79,109) (24,310)
NET NON-OPERATING INCOME
NET INCOME (LOSS)
ADD DEPRECIATION ON ASSETS ACQUIRED THROUGH
FEDERAL CONTRIBUTIONS (Note 1)
549,667 487,863
470,558 463,553
7,811,967 7,348,414
$ 8,282,525 $7,811,967
INCREASE (DECREASE) IN RETAINED EARNINGS
RETAINED EARNINGS, January 1
RETAINED EARNINGS, December 31
- 37 -
SALINA AIRPORT AUTHORITY
CAPITAL EXPENDITURES
January 1 to December 31
1997
LAND
Building demolition
Design & construction
Industrial center replat
$
76,90 I
324,802
35,092
TOTAL LAND
436,795
EQUIPMENT
Industrial center equipment
Computer equipment
Communication equipment
Other equipment
23,187
14,074
2,100
1,211
TOTAL EQUIPMENT
40,572
BUILDINGS AND IMPROVEMENTS
Pumphouse #305
Tenninal building roof
Airfield improvements
Building improvements
Railroad track improvements
110,523
862
70,226
31,577
16,810
TOTAL BUILDINGS
229,998
AIRFIELD AND INFRASTRUCTURE
AlP 17
AlP 18
AlP 19
268,923
1,784,437
26,480
TOTAL OTHER IMPROVEMENTS
2,079,840
TOT AL CAPITAL EXPENDITURES
$ 2,787,205
- 38 -
SALINA AIRPORT AUTHORITY
GENERAL OBLIGA nON ECONOMIC DEVELOPMENT BONDS
SERIES 1990A
December 31, 1997
Date of Issue:
Amount of Issue:
Interest Rate:
Maturity Date:
Principal Paid:
Outstanding Balance:
Schedule of Bond Principal Payments
Due in
Year
1998
1999
2000
2001
Thereafter
*The interest rate varies from 8.37% to 6.4% over the life of the bond issue.
- 39 -
July 1, 1990
$1,900,000
*
Sept. 1, 2010
$1,040,000
$860,000
Bond
Principal
$ 75,000
80,000
85,000
90,000
530,000
$ 860,000
Date of issue:
Amount of Issue:
Interest Rate:
Maturity Date:
Principal Paid:
Outstanding Balance:
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION ECONOMIC DEVELOPMENT BONDS
SERIES 1990B
December 31, 1997
Schedule of Bond Principal Payments
Due in
Year
1998
1999
2000
2001
Thereafter
*The interest rate varies from 8.5% to 6.5% over the life of the bond issue.
- 40 -
Oct I, 1990
$773,000
*
Sept I, 20 I 0
$163,000
$610,000
Bond
Principal
$
30,000
30,000
35,000
35,000
480,000
$ 610,000
Date of Issue:
Amount of Issue:
Interest Rate:
Maturity Date:
Principal Paid:
Outstanding Balance:
Due in
Year
1998
1999
2000
2001
Thereafter
SALINA AIRPORT AUTHORITY
LEASEHOLD REVENUE BONDS
SERIES 1991
December 31, 1997
Nov. 1,1990
$850,000
*
Sept. 1, 2006
$245,000
$605,000
Schedule of Bond Principal Payments
Bond
Principal
$
50,000
55,000
60,000
65,000
375,000
$ 605,000
*The inetrest rate varies from 7.25% to 5% over the life ofthe bond issue.
- 41 -
SALINA AIRPORT AUTHORITY
GENERAL OBLIGATION BONDS
SERIES 1993A
December 31, 1997
Date of Issue:
Amount of Issue:
Interest Rate:
Maturity Date:
Principal Paid:
Outstanding Balance:
Dec. 1, 1993
$375,000
3.4% TO 5%
Sept. 1, 2003
$130,000
$245,000
Schedule of Bond Principal Payments
Due in
Year
Bond
,Principal
$ 35,000
40,000
40,000
45,000
85,000
$ 245,000
1998
1999
2000
2001
Thereafter
- 42 -
SALINA AIRPORT AUTHORlTY
GENERAL OBLIGATION BONDS
SERlES 1993B
December 31, 1997
Date of Issue:
Amount of Issue:
Interest Rate:
Maurity Date:
Principal Paid:
Outstanding Balance:
Schedule of Bond Principal Payments
Due in
Year
1998
1999
2000
2001
Thereafter
- 43 -
Dec. 1, 1993
$275,000
3.85% to 4.75%
Sept. 1, 2003
$95,000
$180,000
Bond
Principal
$ 25,000
30,000
30,000
35,000
60,000
$ [80,000
SALINA AIRPORT AUTHORITY
SCHEDULE OF FEDERAL ASSISTANCE
CATALOG OF FEDERAL DOMESTIC ASSISTANCE NUMBER 20.106
For The Year Ended December 31, 1997
Program Title
Federal ID
Number
Expenditures
During Year
DEPARTMENT OF TRANSPORTATION
Federal AviatIOn Administration
3-20-0072-11
$
Federal AvIation Administration
3-20-0072-12
Federal Aviation Administration
3-20-0072-13
Federal Aviation Administration
3-20-0072-17
268,923
Federal Aviation Administration
3-20-0072-18
1,784,437
Federal Aviation Administration
3-20-0072-19
26,480
$ 2,079,840
- 44 -
Amount
of Awards
$ 1,620
10,000
]0,000
240,746
1,378,602
$ 1,640,968
SALINA AIRPORT AUTHORITY
COMPARISON OF GROSS CASH BALANCES WITH DEPOSITORY SECUJUTY
December 31, 1997
Bank IV
Salina, N.A.
GROSS CASH BALANCES
Demand deposit
Cash in checking
Time depositis
Certificates of deposit
$ 451,403
TOT ALS
451,403
LESS FDIC COVERAGE
100,000
BALANCES SECURABLE
BY COLLATERAL
$ 351,403
SECURITY REQUIRED
(100%)
$ 351,403
SECURITY PROVIDED
BY DEPOSITORIES
500,000
AMOUNT UNDERSECURED
BY STATUTE
$
- 45 -
UMB-
National Bank
of America
$ 2,724,240
2,724,240
100,000
$ 2,624,240
$ 2,624,240
4,532,400
$
SunflO\\-er
Bank
$ 182,420
20,000
202,420
100,000
$ 102,420
$ 102,420
1,232,400
$
INSURANCE POLICY
Commercial Union Ins. Co.
Pol. #CT98H602785
National Union Fire Ins. Co.
of Pittsburgh, PA
Pol. #AP3229456-03
Commercial Union Ins. Co.
Pol. #CTR446926
Commercial Union Ins. Co.
Pol. #CTR399483
Commercial Union Ins. Co.
Pol. PRAB22041
lIT Hartford
Pol. #PEB DB 10 19
Coregis Insurance Co.
Pol. #POI-000227-1
American Alliance Ins. Co.
Pol. #KST 788-29-33-03
SALINA AIRPORT AUTHORITY
INSURANCE IN FORCE
December 31, 1997
TYPE OF COVERAGE
AMOUNT OF
COVERAGE
Workmen's Compensation
and Employer's Liability
$ 500,000
Bodily Injury & Liability
Hangar Keepers
$ 500,000
$ 500,000
Fire & Lightning,
extended coverage,
vandalism & malicious mischief
Business Personal Prop.
Loss of Rents
$ 6,677,393
$ 487,400
$ 1,515,186
Boiler & Machinery
Office and stores
$ 1,000,000
$ 500,000
Vehicles & Equipment
Liability
Medical payments
Uninsured motorists
$ 500,000
$ 2,000
$ 500,000
Public Employees Blanket Bond
Honesty blanket
position bond coverage
$
100,000
Public Officials & Empl. Liability
Errors & ommissions
excluding asbestos,
excluding pollution coverage
on a claims made basis,
5,000 deductible
$ 500,000
Kansas UST Liability
Environmental Incident
Annual aggregate
Limit of Defense
5,000 deductible
$ 1,000,000
$ 1,000,000
$ 100,000
- 46 -
OMS No. 0348-0057
u.s. DEPARTMENT OF COMMERCE - BUREAU OF THE CENSUS
ACTING AS COLLECTING AGENT FOR
OFFICE OF MANAGEMENT AND BUDGET
Data Collection Form for Reporting on
AUDITS OF STATES, LOCAL GOVERNMENTS, AND NON-PROFIT ORGANIZATIONS
FORM SF-SAC
18-97)
~ Complete this form, as required by OMB Circular A-133, "Audits
of States, Local Governments, and Non-Profit Organizations."
.
Single Audit Clearinghouse
1201 E. 10th Street
Jeffersonvilll~, IN 47132
~,~ ':\." GENERAL INFORMATION (To be completed by auditee, except for Item 7)
1. Fiscal year ending date for this submission 2. Type of Circular A-133 audit
Month Day Year
12 / 31 / 97
3. Audit period covered
, œ Annual 3 D Other-
2 D Biennial
Months
5. Employer Identification Number (EIN)
a. Auditee EIN ~
, [] Single audit
20 Program-specific audit
FEDERAL
GOVERNMENT
USE ONLY
4. Date received by Federal
clearinghouse
6. AUDITEE INFORMATION
b. Are multiple EINs covered in this report?
,0 Yes
2 [] No
a. Auditee name
3237 ARNOLD
City
SALINA
State
KAN SA S
ZIP Code
67401
c. Auditee contact
Name
TIM ROGERS
Title
d. Auditee contact telephone
( 785) 827 - 3914
e. Auditee contact FAX (Optional)
(785 ) 827 - 2221
f. Auditee contact E-mail (Optional)
saa@salair.org
g. AUDITEE CERTIFICATION STATEMENT - This is
to certify that, to the best of my knowledge and
belief, the auditee has: (1) Engaged an auditor to
perform an audit in accordance with the provisions of
OMB Circular A-133 for the period described in Part I,
Items 1 and 3; (2) the auditor has completed such
audit and presented a signed audit report which
states that the audit was conducted in accordance
with the provisions of the Circular; and, (3) the
information included in Parts I, II, and III of this data
collection form is accurate and complete. I declare
that the foregoing is true and correct.
7. AUDITOR INFORMATION (To b ~ completed by auditor)
a. Auditor name
HARRISON & ARNETT CHTD.
b. Auditor address (Number and street)
719 E. CRAWFORD
City
SALINA
State
ZIP Code
67401
KANSAS
c. Auditor contact
Name
TOM ARNETT
Title
CPA
d. Auditor contact telephone
(785) 827 - 7244
e. Auditor contact FAX (Optional)
( )
f. Auditor contact E-mail (Optional)
g. AUDITOR STATEMENT - The data elements and
information included in this form are limited to those
prescribed by OMB Circular A-133. The information
included in Parts II and III of the form, except for Part
III, Items 5 and 6, was transferred from the auditor's
report(s) for the period described in Part I, Items 1
and 3, and is not a substitutE! for such reports. The
auditor has not performed any auditing procedures
since the date of the auditor's report(s). A copy of the
reporting package required by OMB Circular A-133,
which includes the complete auditor's report(s), is
available in its entirety from the auditee at the
address provided in Part I of this form. As required by
OMS Circular A-133, the information in Parts II and
III of this form was entered in this form by the auditor
based on information included in the reporting
package. The auditor has not performed any
additional auditing procedures in connection with the
completion of this form.
Signature of auditor
~
- 47 -
3. Is a reportable condition disclosed?
4. Is any reportable condition reported
as a material weakness?
10 Yes
5. Is a material noncompliance disclosed?
10 Yes
10 Yes
E IN: lliIili~
(Mark (X) one box)
160 Justice
17 0 labor
430 National Aeronautics
and Space
Administration
890 National Archives and
Records Administraton
050 National Endowment
for the Arts
060 National Endowment
for the Humanities
470 National Science
Foundation
070 Office of National Drug
Control Policy
(Mark (X) one box)
080 Peace Corps
'590 Small Business
Administration
96 0 Social Security
Administration
190 State
20 lXJ Transportation
210 Treasury
320 United States
Information Agency
640 Veterans Affairs
0 Other - Specify:
30 Adverse opinion
40 Disclaimer of opinion
2 [] No
2 [] No - SKIP to Item 5
20 No
2 [] No
FEDERAL PROGRAMS (To be completed by auditor)
1. Type of audit report on major program compliance
1 [] Unqualified opinion 20 Qualified opinion 30 Adverse opinion 40 Disclaimer of opinion
2. What is the dollar threshold to distinguish Type A and Type B programs §- .520(b)?
GENERAL INFORMATION - Continued
8. Indicate whether the auditee has either a Federal cognizant or oversight agency for audit.
1 [] Cognizant agency 20 Oversight agency
9. Name of Federal cognizant or oversight agency for audit
01 0 African Development 830 Federal Emergency
Foundation Management Agency
020 Agency for 340 Federal Mediation and
International Conciliation Service
Development 390 General Services
100 Agriculture Administration
110 Commerce 930 Health and Human
940 Corporation for Services
National and 14 0 Housing and Urban
Community Service Development
120 Defense 030 Institute for Museum
840 Education Services
810 Energy 040 Inter-American
660 Environmental Foundation
Protection Agency 150 Interior
FINANCIAL STATEMENTS (To be completed by auditor)
1. Type of audit report (Mark (X) one box)
1 [] Unqualified opinion 2 0 Qualified opinion
2. Is a "going concern" explanatory
paragraph included in the audit report? 10 Yes
$ 300,000
3. Did the auditee qualify as a low-risk auditee (§- .530)?
10 Yes 200 No
4. Are there any audit findings required to be reported under §- .510(a)?
10 Yes 21XJ No
5. Which Federal Agencies are required to receive the reporting package?
010 African Development 830 Federal Emergency 160 Justice
Foundation Management Agency 170 labor
020 Agency for 340 Federal Mediation and 430 National Aeronautics
International Conciliation Service and Space
Development 390 General Services Administration
100 Agriculture Administration 890 National Archives and
11 0 Commerce 930 Health and Human Records Administraton
940 Corporation for Services 050 National Endowment
National and 140 Housing and Urban for the Arts
Community Service Development 060 National Endowment
120 Defense 030 Institute for Museum for the Humanities
840 Education Services 470 National Science
810 Energy 040 Inter-An:erican Foundation
660 Environmental Foundation 070 Office of National Drug
Protection Agency 150 Interior Control Policy
(Mark (X) all that apply)
08 0 Peace Corps
590 Small Business
Administration
960 Social Security
Administration
190 State
20 ŒJ Transportation
21 0 Treasury
820 United States
Information Agency
640 Veterans Affairs
000 None
0 Other - Specify:
Page 2
- 48 -
FORM SF-SAC 18-971
-u
tlJ
co
CD
w
~i¡i tttiJ FEDERAL PROGRAMS - Continued
6. FEDERAL AWARDS EXPENDED DURING FISCAL YEAR 7. AUDIT FINDINGS AND QUESTIONED COSTS
CFDA Name of Federal Amount Major Type of Amount of Internal Audit finding
compliance questioned control reference
number 1 program expended program requirement2 costs findings3 number(s)
(a) (b) (c) (a) (b) (c) (d) (e)
3-20-0072- ' [] Yes ,OA 30C
17-1q AIRPORT IMPROVEMENT $ 2.079 840 20No $ 20B
,OVes ,OA30C
$ 20No $ 20B
,OVes ,OA30C
$ 20No $ 20B
,OYes ,OA 30C
$ 20No $ 20B
,OVes ,OA30C
$ 20No $ 20B
I ,OVes ' OA 30C
+:-- 20No 20B
'-Ü $ $
I ,OYes ,OA 30C
$ 20No $ 20B
,OVes ,OA 30C
$ 20No $ 20B
,OVes ' OA 30C
$ 20No $ 20B
,OYes ' OA 30C
$ 20No $ 20B
TOTAL FEDERAL AWARDS EXPENDED -+- IF ADDITIONAL LINES ARE NEEDED, PLEASE PHOTOCOPY THIS PAGE,
$ 2,079,840 A TTACH ADDITIONAL PAGES TO THE FORM, AND SEE INSTRUCTIONS
lOr other identifying number when the Catalog of Federal Domestic Assistance (CFDA) number is not available.
2 Type of compliance requirement (Enter the letter(s) of all that apply to audit findings and questioned costs reported for each Federal program.)
A. Activities allowed or unallowed G. Matching, level of effort, earmarking L. Reporting
B. Allowable costs/cost principles H. Period of av3ilability of funds M. Subrecipient monitoring
C. Cash management I. Procurement N. Special tests and provisions
D. Davis. Bacon Act J. Program income O. None
E. Eligibility K. Real property acquisition and
F. Equipment and real property management relocation assistance
3Type of internal control findings (Mark (X) all that apply)
A. Material weaknesses B. Reportable conditions C. None reported
0
:D
s:
~
in
»
()
ro
~
c
[f)
(;)
"
0
CD
CD
....
¿"
'"
CD
Ò
~
a,
0
:;:
(THIS PAGE INTENTIONALLY LEFT BLANK)
- 50 -
Salina Airport Authority
OPERATING REVENUE HISTORY
Ten Years Ended December 31, 1997
Gain (Loss) Other Total
Fiscal Rental Fixed Base Landing on Sale of Operating Operating
Year Revenue Operator Fees Assets Receipts Revenue
1988 $783,958 $96,133 $28,702 $83,074 $19,217 $928,010
1989 791,433 106,432 5,913 (414) 23,447 927,225
1990 736,242 127,765 7,599 0 9,220 880,826
1991 762,984 89,079 4,271 0 11 ,002 867,336
1992 791,974 82,345 5,565 0 16,136 896,020
\Jl 1993 800,575 78,392 7,616 0 43,744 930,327
c--'
1994 975,011 90,511 10,982 0 5,914 1,082,418
1995 1,048,563 98,429 13,714 (24,024) 15,637 1,152,319
1996 1,038,467 152,393 9,055 0 65,723 1,265,638
1997 1,067,236 193,501 8,503 69,663 29,393 1,368,296
Source: Salina Airport Authority Records
Salina Airport Authority
OPERATING EXPENSE HISTORY
Ten Years Ended December 31,1997
Office & Total
Administrative Maintenance Operating
Fiscal Year Expense Expense Expense
1988 $456,770 $326,346 $783,116
1989 483,907 336,117 820,024
1990 430,225 338,936 769,161
1991 408,578 329,137 737,715
1992 415,819 347,498 763,317
1993 458,918 361,412 820,330
1994 467,803 370,266 838,069
1995 481,914 375,594 857,508
1996 497,561 398,287 895,848
1997 568,606 367,530 936,136
Source: Salina Airport Authority Records
- 52 -
Salina Airport Authority
FEDERAL FINANCIAL ASSISTANCE HISTORY
Ten Years Ended December 31, 1997
Fiscal Year
Federal Avia1tion
Administration
Airport
Improvement Grant
1988
$980,986
1989
613,642
1990
40,917
1991
29,430
1992
335,349
1993
30,162
1994
270,191
1995
3,210,933
1996
2,006,786
1997
1,640,967
NOTE:
The use of Federal Aviation Administration Airport Improvement Program
Grant Funds are limited to use for funding specific airfield capital improvements.
Airfield capital improvements are detailed in program grant agreements
entered into by the Salina Airport Authority and the Federal Aviation Administration
The grant funds finance 90% of total project costs.
Source: Salina Airport Authority Records
- 53 -
Salina Airport Authority
CAP IT AL EXPENDITURE HISTORY
Ten Years Ended December 31, 1997
Buildings & Total
Fiscal Capital Lease Capital
Year Equipment Additions Land Ai rfi e I d Expenditures
1988 $9,618 $886,650 $0 $1,034,741 $1,931,009
1989 94,524 2,243,128 - 648,583 2,986,235
1990 17,489 1,700,740 130,590 32,943 1,881,762
1991 36,268 400,406 - 62,257 498,931
V1 1992 2,516 803,418 131,845 357,586 1,295,365
.Ç--
1993 20,773 134,602 250,279 33,692 439,346
1994 31,289 305,127 119,800 309,215 765,431
1995 13,043 403,009 262,930 3,603,339 4,282,321
1996 25,814 47,925 147,749 2,303,568 2,525,056
1997 40,572 229,999 436,795 2,079,840 2,787,206
Note:
Federal Aviation Administration grants fund 90% of airfield improvements
Source: Salina Airport Authority Records
Salina Airport Authority
REVENUE BOND COVERAGE
Ten Years Ended December 31, 1997
Fiscal Pledged Revenue Bond
Year Revenue Debt Service Coverage
1988 $416,188 $192,203 2.16
1989 523,307 214,586 2.43
1990 409,915 211,780 1.93
1991 426,707 206,570 2.06
1992 531,761 286,024 1.86
1993 414,514 278,395 1.50
1994 421,554 280,578 1.50
1995 189,446 163,215 1.16
1996 189,446 163,790 1.16
1997 189,446 168,962 1.12
Notes:
1. Revenues pledged to service Leasehold Revenue Bonds, Series 1990-B
and Series 1991
Source: Salina Airport Authority Records
- 55 -
Salina Airport Authortiy
PRINCIPAL CUSTOMERS
Year Ended December 31, 1997
% of Operating
& Direct Financø
Company Revenue Lease Revenue
Soo Plastics, Inc. $563,738 26.6%
Raytheon Aircraft Company 243,255 11.5%
Kansas State University - Salina 189,446 9.0%
Exide Corporation 145,332 6.9%
Moore's Midway Aviation, Inc. 125,335 5.9%
Schwan's Sales Enterprises, Inc. 119,220 5.6%
Flower Aviation of Kansas, Inc. 92,502 4.4%
KASA FAB, Inc. 60,510 2.9%
Salina Vortex Corporation 21,262 1.0%
GeoCore Services, Inc. 21,123 1.0%
Federal Aviation Administration 18,600 0.9%
Palleton of Kansas, Inc. 18,420 0.9%
Lanseair 17,365 0.8%
Builder's Choice 17,043 0.8%
Two Rivers Vending 15,180 0.7%
Haahjem NA, Inc. 15,000 0.7%
Notes:
1. Total of Operating Lease and Direct Finance Lease Revenue for 1997 was $2,116,630
2. Soo Plastics, Inc. exercised an option to purchase a warehouse facility at a cost
of $536,587.73
Source: Salina Airport Authority Records
- 56 -
Salina Airport Authority
LOCAL GOVERNMENT PROPERTY TAX RATES, DIRECT AND OVERLAPPING
Ten Years Ended December 31, 1997
Other
Unified Salina State Special
Fiscal Saline City of School Airport of Taxing
Year County Salina Dist. #305 Authority Kansas Districts Total
1988 21.000 36.360 88.779 - - 6.487 152.626
1989 23.460 36.360 95.639 - - 6.653 162.112
1990 19.074 30.015 76.492 - - 5.599 131.180
1991 20.122 30.028 79.472 - - 5.818 135.440
1992 20.464 29.828 83.372 - - 6.074 139.738
lJ1
'-J
1993 24.562 29.461 40.685 1.900 1.5 5.121 103.229
1994 26.575 28.709 42.401 1.900 1.5 5.015 106.100
1995 23.370 27.145 42.287 1.372 1.5 5.393 101.067
1996 22.925 26.942 42.312 1.275 1.5 5.565 100.519
1997 18.141 25.705 39.529 1.129 1.5 5.804 91.808
Note:
The Salina Airport Authority's 1997 mill levy will be available during calendar year 1998
and IS budgeted for 1998.
Source: Saline County Clerk
Salina Airport Authority
PROPERTY TAX REVENUE
Ten Years Ended December 31, 1997
Fiscal Year
Propel1y Tax
Røvenue
1988
$0
1989
0
1990
0
1991
0
1992
0
1993
0
1994
301,829
1995
406,232
1996
357,887
1997
338,058
Source: Salina Airport Authority Records
- 58 -
Salina Airport Authority
AIR TRAFFIC, FUEL FLOWAGE AND ENPLANEMENT TRENDS
Ten Years Ended December 31, 1997
Scheduled
Fiscal Air Traffic Fuel Flowage Air Service
Year Operations Gallons Enplanements
1988 80,411 2,872,298 9,159
1989 79,068 2,890,341 10,252
1990 96,254 3,136,668 5.707
1991 83,372 2,681,605 5,391
1992 71,697 2,552,156 5,799
1993 66,144 2,126,230 5,591
1994 61,215 2,424,880 7,175
1995 68,291 2,435,656 7,813
1996 62,021 2,907,894 8,652
1997 68,822 3,577,650 9,153
Note: One air traffic operation equals one aircraft takeoff and landing
Source: Salina Airport Authority Records
- 59 -
Salina Airport Authority
MAJOR EMPLOYERS IN THE SALINA/SALINE COUNTY AREA
December 31, 1997
Major Private Employers
CompanY
0'>
0
Tony's Pizza
Great Plains Manufacturing
Salina Reg. Med. Center
Exide Corporation
Phillips Lighting Co.
Raytheon Aircraft Co.
Parts America
Eldorado National, Inc.
Elliott Turbocharger, Inc.
Crestwood Cabinets, Inc.
Salina Journal
KASA/KASA Fab
Premier Pneumatics
PKM Steel Services, Inc.
Major Public Employers
Public Organizations
Unified School District #305
City of Salina
Saline County
Kansas State University - Salina
Approx. #
EmQloyees
2,000
1,300
862
750
600
514
225
200
151
136
120
100
100
100
Approx. #
Empl()yees
935
426
185
127
Source: Salina Area Chamber of Commerce
Type of
Business
Frozen Foods Manufacturer
Farm Implements & Landscaping Equipment
Health Care
Battery Manufacturing
Fluorescent Lamp Manufacture
Aircraft Sub-assemblies Manuf.
Warehouse Distribution
Medium & Small Shuttle Buses
Rebuilding of diesel engine turbochargers
Custom Made Cabinets
Newspaper Publishing
Electronic Controls & Steel Fabrication
Pneumatic Convey Equipment
Steel Fabrication
Type of Public Body
School System
City Government
County Government
Engineering Technology & Aviation Technology
Salina Airport Authority
SALINA POPULATION, DEMOGRAPHIC AND
lABOR STATISTICS
Population
Year
City of Salina
Saline County
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
42,092
42,188
42,303
42,510
42,841
43,202
43,304
43,304
44,167
44,510
49,155
49,210
49,301
49,301
49,301
49,400
50,450
50,450
51,434
51,831
Source: Saline County Clerk
Demoqraphics
Measure
City of Salina
Median Age
Average Age
Number of Households
Average Household Income
Median Household Income
Per Capita Income
35.45
36.89
18,181
$40,600
$30,009
$16,955
Source: Salina Area Chamber of Commerce
labor
Year labor Force Employed Unemployed Rate
1989 27,384 26,130 1,250 4.6%
1990 28,454 27,261 1,193 4.2%
1991 29,321 28,073 1,248 4.3%
1992 30,409 29,270 1,139 3.7%
1993 28,549 27,261 1,288 4.5%
1994 28,902 27,692 1,210 4.2%
1995 29,312 28,117 1,195 4.1%
1996 29,281 28,128 1,153 3.9%
1997 29,875 28,921 954 3.2%
Source: Salina Area Chamber of Commerce
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HARRISON & ARN ETT
CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
EUGENE O. HARRISON, C.P.A.
THOMAS G. ARNETT, C.P.A.
719 EAST CRAWFORD. SALINA, KANSAS 67401
PHONE: (913) 827.7244
FAX: (913) 827.0048
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL
REPORTING BASED ON AN Þ UDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors
Salina Airport Authority
Salina, Kansas
We have audited the financial statements of Salina Airport Authority, Salina, Kansas, as of and for the years
ended December 31, 1997 and 1996, and have issued our report thereon dated April 15, 1998. We conducted our
audit in accordance with generally accepted auditing standards and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Salina Airport Authority, Salina, Kansas's financial
statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grants, noncompliance with which would have a direct and material effect on the
detern1ination of financial statement amounts. However, providing an opinion on compliance with those
provisions was no an objective of our audit and accordingly, we do not express such an opinion. The results of
our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing
Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Salina Airport Authority, Salina, Kansas's internal control
over financial reporting in order to determine our auditing procedures for the purpose of expressing our opInion
on the general purpose financial statements and not to provide assurance on the internal control over financial
reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all
matters in the internal control over financial reporting that might be material weaknesses. A material weakness I
a condition in which the design or operation of one or more of the internal control components does not reduce to
a relatively low level the risk that misstatements in amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a timely period by employees in the normal course
of performing their assigned functions. We noted no matters involving the internal control over financial
reporting and its operation that we consider to be material weaknesses.
This report is intended for the information of the audit committee, management, and feder2.1 awarding agencies
and pass-through entities. However, this report is a matter of public record and its distribution is not limited.
~{~~-
/
Harrison & Arnett, Chartered
SalIna, Kansas
AprIl 15, 1998
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MEMEJERS Of
DIVISION FOR CPA FIRMS PRIVATE COMPANIES PRACTICE SECTION
AMERICAN INSTIT UTE OF CERTIFIED PUBLIC ACCOUNTANTS
KANSAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
HARRISON & ARNETT
CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
EUGENE O. HARRISON. c.P.A-
THOMAS G. ARNETT, C.P.A.
719 EAST CRAWFORD. SALINA, KANSAS 67401
PHONE: (913) 827-7244
FAX: (913) 827.0048
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE
TO EACH MAJOR PROGRAM AND INSTERNAL CONTROL OVER
COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
To the Board of Directors
Salina Airport Authority
Salina, Kansas
Compliance
We have audited the compliance of Salina Airport Authority, Salina, Kansas, with the types of compliance
requirements described in the Us. Office of Management and Budget (OMB) Circular A-i33 Compliance
Supplement that are applicable to each of its major federal programs for the years ended December 31, 1997 and
1996. Salina Airport Authority, Salina, Kansas's major federal programs are identified in the summary of
auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the
requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the
responsibility of Salina Airport Authority, Salina, Kansas's management. Our responsibility is to express an
opinion on Salina Airport Authority, Salina, Kansas's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards, 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, Salina, Kansas'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. Our audit does not provide a legal determination on Salina Airport
Authority, Salina, Kansas's compliance with those requirements.
In our opinion, Salina Airport Authority, Salina, Kansas, complied, in all material respects, with the requirements
referred to above that are applicable to each of its major federal programs for the years ended December 31, 1997
and 1996.
Internal Control Over Compliance
The management of Salina Airport Authority, Salina, Kansas, is responsible for establishing and maintaining
effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable
to federal programs. In planning and performing our audit, we considered Salina Airport Authority, Salina,
Kansas's internal control over compliance with requirements that could have a direct and material effect on a
major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on
compliance and to test and report on internal control over compliance in accordance with OMB Circular A-I33.
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MEMBERS OF
DIVISION FOR CPA FIRMS PRIVATE COMPANIES PRACTICE SECTION
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
KANSAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
Page 2 of 2
Salina, Kansas
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal
control that might be material weaknesses. A material weakness is a condition in which the design or operation of
one or more of the internal control components does not reduce to a relatively low level the risk that
noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in
relation to a major federal program being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. We noted no matters involving the
internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of the audit committee, management, and federal awarding agencIes
and pass-through entities. However, this report is a matter of public record and its distribution is not limited.
~I-~
~
Harrison & Arnett, Chartered
/'
Salina, Kansas
April 15, 1998
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