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Audit - 1988 CITY OF SALINA Salina, Kansas FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORTS December 31, 1988 KENNEDY AND COE Certified Public Accountants Salina, Kansas Exhibit A Exhibit B Schedule 1 Schedule 2 Schedule 3 CITY OF SALINA Salina, Kansas CONTENTS INDEPENDENT AUDITORS' REPORTS REPORT ON FINANCIAL STATEMENTS REPORT ON INTERNAL ACCOUNTING CONTROLS BASED SOLELY ON A STUDY AND EVALUATION MADE AS A PART OF AN AUDIT OF THE BASIC FINANCIAL STATEMENTS REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS THAT HAY HAVE A MATERIAL EFFECT ON THE FINANCIAL STATEMENTS REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE REPORT ON INTERNAL ACCOUNTING AND ADHINISTRATIVE CONTROLS USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAHS REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS RELATED TO FEDERAL FINANCIAL ASSISTANCE PROGRAHS SCHEDULE OF FINDINGS FINANCIAL STATEMENTS SUMHARY STATEHENT OF RECEIPTS, EXPENDITURES, AND BALANCES BY FUNDS AND COHPARISON OF CASH BALANCES WITH ENCill1- BRANCES STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUHBERED CASH BALANCES COHPARED WITH BUDGET NOTES TO FINANCIAL STATEMENTS Supplemental Information Composition of Ending Cash Balances Comparison of Gross Cash Balances with Depository Security Schedule of Federal Financial Assistance Page 1-2 3-4 5 6 7-9 10 11 12-13 14-30 31-39 40 41 42 Contents Exhibit A Exhibit B Exhibit C Exhibit D CITY OF SALINA Salina, Kansas CONTENTS (CONTD.) SEPARATE FINANCIAL STATEMENTS - WATER AND SEWERAGE DEPARTMENT INDEPENDENT AUDITORS' REPORT BALANCE SHEETS STATEHENTS OF INCOME STATEMENTS OF CONTRIBUTED CAPITAL AND RETAINED EARNINGS STATEMENTS OF CHANGES IN FINANCIAL POSITION NOTES TO FINANCIAL STATEMENTS Page 43 44 45 46 47 48-51 Contents KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO HOME OFFICE: P.O. BOX 1100 SALINA, KANSAS 67402-1100 913.825.1561 INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS To the Hayor and The Board of City Commissioners: We have audited the financial statements ended December 31, 1988, included herein funds and account groups except (1) Saline County-Ci ty Bui lding Authority, Salina-Saline County Board of Health, and Salina Public Library, which we audit and report on separately. (2) Firemen's Relief Association, Salina Recreation Commission, Salina Arts Commission, Salina Housing Authority, and the Salina Airport Authority, which are audited by other auditors who issue their separate reports. These financial statements are the responsibility of the City's management. responsibility is to express an opinion on these financial statements based audit. of the City of Salina, Kansas, for the year on pages 12 to 39. Our audit included all Our on our We conducted our audit in accordance with generally accepted auditing standards and the Hinimum Standard Audit Program approved by the State Hunicipal Accounting Board. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As discussed in Note 1, these financial statements were prepared on a prescribed basis of accounting that demonstrates compliance with the cash basis and budget laws of the State of Kansas, which is a comprehensive basis of accounting other than generally accepted accounting principles. In our opinion, the accompanying financial statements present fairly, in all material respects, the cash and unencumbered cash balances of the City of Salina, Kansas, as of December 31, 1988, and its receipts and expenditures for the year then ended in accordance with the basis of accounting described in Note 1. Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental information presented on pages 40 to 42 is presented for purposes of additional analysis and is not a required part of the financial statements. This information has been subjected to the auditing procedures applied in the audit of the financial statements mentioned above and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. -1- MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS This report is intended solely for the information and use of the Hayor, Board of City Commissioners and management of the City of Salina, Kansas and for filing with the Kansas Department of Administration, Division of Accounts and Reports, the cog- nizant federal agency, and other applicable federal audit agencies and should not be used for any other purpose. Salina, Kansas June 16, 1989 ~.~ C.P.A. Certified Public Accountant in charge of and actively engaged on this audit. Respectfully submitted, ~--;7 -L ~ -2- KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO HOME OFFICE: P.O. BOX 1100 SALINA, KANSAS 67402.1100 913.825.1561 INDEPENDENT AUDITORS' REPORT ON INTERNAL ACCOUNTING CONTROLS BASED SOLELY ON A STUDY AND EVALUATION MADE AS PART OF AN AUDIT OF THE BASIC FINANCIAL STATEMENTS To the Mayor and The Board of City Commissioners: We have audited the financial statements of the City of Salina, Kansas, for the year ended December 31, 1988, and have included our report thereon on pages 1 to 2. As part of our audit, we made a study and evaluation of the system of internal accounting control of the City of Salina, Kansas, to the extent we considered necessary to evaluate the system as required by generally accepted auditing stand- ards, the Hinimum Standard Audit Program approved by the State Hunicipal Accounting Board, and the standards for financial and compliance audits contained in the U.S. General Accounting Office Standards for Audit of Governmental Organizations, Programs, Activities, and Functions. For the purpose of this report, we have classified the significant internal accounting controls in the following categories: 1. 2. 3. 4. Receipts Purchases/disbursements Cash and investment balances Financial reporting Our study included all of the control categories listed above. The purpose of our study and evaluation was to determine the nature, timing, and extent of the auditing procedures necessary for expressing an opinion on the City's financial statements. Our study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control taken as a whole or on any of the categories of controls identified above. The management of the City of Salina, Kansas, is responsible for establishing and maintaining a system of internal accounting control. In fulfilling that responsi- bility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of a system are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with the method of accounting described in Note 1 to the financial statements. Because of inherent limitations in any system of internal accounting control, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaulation of the system to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. -3- MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS Our study and evaluation made for the limited purpose described in the first para- graph would not necessarily disclose all material weaknesses in the system. Accord- ingly, we do not express an opinion on the system of internal accounting control of the City of Salina, Kansas, taken as a whole or on any of the categories of controls identified in the first paragraph. However, our study and evaluation disclosed the following conditions that we believe result in more than a relatively low risk that errors or irregularities in amounts that would be material in relation to the financial statements of the City of Salina may occur and not be detected within a timely period. Good internal controls require the segregation of duties between the accounting records and the custody of assets, including the control of receipts and disbursements of funds. One employee receipts, disburses, reconciles, and records all transactions for funds received under the U.S. Department of Housing and Urban Development - Community Development Block Grant/Small Cities Program for Housing Rehabilitation. These conditions were considered in determining the nature, timing, and extent of the audit tests to be applied in our audit of the 1988 financial statements, and this report does not affect our report on the financial statements dated June 16, 1989. This report is intended solely for the use of management of the City of Salina, Kansas, and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which, upon acceptance by the City of Salina, Kansas, is a matter of public record. Respectfully submitted, Salina, Kansas June 16, 1989 ~....L~ -4- KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO HOME OFFICE: P.O. BOX 1100 SALINA, KANSAS 67402.1100 913.825.1561 INDEPENDENT AUDITORS' REPORT ON COHPLIANCE WITH LAWS AND REGULATIONS THAT MAY HAVE A HATERIAL EFFECT ON THE FINANCIAL STATEMENTS To the Hayor and The Board of City Commissioners: We have audited the financial statements of the City of Salina, Kansas, for the year ended December 31, 1988, and have included our report thereon on pages 1 to 2. Our audit was made in accordance with generally accepted auditing standards, the Hinimum Standard Audit Program approved by the State Municipal Accounting Board, and the standards for financial and compliance audits contained in the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U.S. General Accounting Office and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The management of the City of Salina, Kansas, is responsible for the City's com- pliance with laws and regulations. In connection with our audit referred to above, we selected and tested transactions and records to determine the City's compliance with laws and regulations noncompliance with which could have a material effect on the financial statements of the City. The results of our tests indicate that for the transactions tested, the City of Salina, Kansas, complied with those laws and regulations referred to above, except as described in Note 8 to the financial statements. Those instances of noncompliance were considered by us in evaluating whether the financial state- ments are presented fairly, in all material respects, in conformity with the method of accounting described in Note 1 to the financial statements. With respect to the transactions not tested, nothing came to our attention to indicate that the City of Salina, Kansas, had not complied with laws and regulations other than those laws and regulations for which we noted violations in our testing referred to above. Respectfully submitted, Salina, Kansas June 16, 1989 ~....LW- -5- MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO HOME OFFICE: P.O. BOX 1100 SALINA, KANSAS 67402.1100 913.825-1561 INDEPENDENT AUDITORS' REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE To the Mayor and The Board of City Commissioners: We have audited the financial statements of the City of Salina, Kansas, for the year ended December 31, 1988, and have included our report thereon on pages 1 to 2. Our audit of such financial statements was made in accordance with generally accepted auditing standards, the Minimum Standard Audit Program approved by the State Hunicipal Accounting Board, and the standards for financial and compliance audits contained in the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U.S. General Accounting Office and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The included Schedule of Federal Financial Assistance, Schedule 3, is presented for purposes of additional analysis and is not a required part of the financial statements of the City of Salina, Kansas. The information in that schedule has been subjected to the auditing procedures applied in the audit of the City's financial statements and, in our opinion, is fairly stated in accordance with the City's method of accounting described in Note 1 to the financial statements, in all material respects in relation to the financial statements taken as a whole. Respectfully submitted, Salina, Kansas June 16, 1989 ~-L~ -6- MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO HOME OFFICE: P.O. BOX 1100 SALINA, KANSAS 67402.1100 913.825.1561 INDEPENDENT AUDITORS' REPORT ON INTERNAL ACCOUNTING AND ADHINISTRATIVE CONTROLS USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS To the Hayor and The Board of City Commissioners: We have audited the financial statements of the City of Salina, Kansas, for the year ended December 31, 1988, and have included our report thereon on pages 1 to 2. As part of our audit, we made a study and evaluation of the internal control systems, including applicable internal administrative controls, used in admin- istering federal financial assistance programs to the extent we considered necessary to evaluate the systems as required by generally accepted auditing standards, the standards for financial and compliance audits contained in the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U.S. General Accounting Office, the Single Audit Act of 1984, and the provisions of OMB Circular A-128, Audits of State and Local Governments. For the purpose of this report, we have classified the significant internal accounting and administrative controls used in administering federal financial assistance programs in the following categories: Accounting Controls 1. Receipts 2. Purchases/disbursements 3. Cash and investment balances 4. Financial reporting Administrative Controls 1. General requirements Political activity Civil rights Cash management Federal financial reports 2. Specific requirements Types of services Reporting Special requirements -7- MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS The management of the City of Salina, Kansas, is responsible for establishing and maintaining internal control systems used in administering federal financial assis- tance programs. In fulfilling that responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control systems used in administering federal financial assistance programs are to provide management with reasonable, but not absolute, assurance that, with respect to federal financial assistance programs, resource use is consistent with laws, regulations, and policies; resources are safeguarded against waste, loss, and misuse; and reliable data are obtained, main- tained, and fairly disclosed in reports. Because of inherent limitations in any system of internal accounting and admini- strative controls used in administering federal financial assistance programs, errors or irregularities may nevertheless occur and not be detected" Also, pro- jection of any evaluation of the systems to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. Our study included all of the applicable control categories listed above. During the year ended December 31, 1988, the City of Salina, Kansas, had no major federal financial assistance programs and expended 84% of its total federal financial assis- tance under the following nonmajor federal financial assistance program: U.S. Department of Housing and Urban Development - Community Development Block Grant/ Small Cities Program for Housing Rehabilitation. With respect to internal control systems used in administering this nonmajor federal financial assistance program, our study and evaluation included considering the types of errors and irregularities that could occur, determining the internal control procedures that should prevent or detect such errors and irregularities, determining whether the necessary pro- cedures are prescribed and are being followed satisfactorily, and evaluating any weaknesses. With respect to the internal control systems used solely in administering the other nonmajor federal financial assistance programs of the City of Salina, Kansas, our study and evaluation was limited to a preliminary review of the systems to obtain an understanding of the control environment and the flow of transactions through the accounting system. Our study and evaluation of the internal control systems used solely in administering these nonmajor federal financial assistance programs of the City of Salina, Kansas, did not extend beyond this preliminary review phase. Our study and evaluation was more limited than would be necessary to express an opinion on the internal control systems used in administering the federal financial assistance programs of the City of Salina, Kansas. Accordingly, we do not express an opinion on the internal control systems used in administering the federal finan- cial assistance programs of the City of Salina, Kansas. Also, our audit, made in accordance with the standards mentioned above, would not necessarily disclose material weaknesses in the internal control systems, for which our study and evaluation was limited to a preliminary review of the systems, as discussed in the fifth paragraph of this report. -8- However, our study and evaluation and our audit disclosed the following conditions that we believe result in more than a relatively low risk that errors or irregu- larities in amounts that would be material to a federal financial assistance program may occur and not be detected within a timely period. Good internal controls require the segregation of duties between the accounting records and the custody of assets, including the control of receipts and disbursements of funds. One employee receipts, disburses, reconciles, and records all transactions for funds received under the U.S. Department of Housing and Urban Development - Community Development Block Grant/Small Cities Program for Housing Rehabilitation. These conditions were considered in determining the nature, timing, and extent of the audit tests to be applied in our audit of the 1988 financial statements, and this report does not affect our reports on the financial statements and on the City's compliance with laws and regulations dated June 16, 1989. This report is intended solely for the use of management of the City of Salina, Kansas, the cognizant federal agency, and other applicable federal audit agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report, which, upon acceptance by the City of Salina, Kansas, is a matter of public record. Respectfully submitted, Salina, Kansas June 16, 1989 ~-.L~ -9- KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO HOME OFFICE: P.O. BOX 1100 SALINA. KANSAS 67402-1100 913.825.1561 INDEPENDENT AUDITORS' REPORT ON COHPLIANCE WITH LAWS AND REGULATIONS RELATED TO FEDERAL FINANCIAL ASSISTANCE PROGRAHS To the Mayor and The Board of City Commissioners: We have audited the financial statements of the City of Salina, Kansas, for the year ended December 31, 1988, and have included our report thereon on pages 1 to 2. Our audit was made in accordance with generally accepted auditing standards; the Minimum Standard Audit Program approved by the State Municipal Accounting Board; the standards for financial and compliance audits contained in the Stand- ards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U.S. General Accounting Office; the Single Audit Act of 1984; and the provisions of OMB Circular A-128, Audits of State and Local Governments and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The management of the City of Salina, Kansas, is responsible for the City's com- pliance with laws and regulations. In connection with the audit referred to above, we selected and tested transactions and records from nonmajor federal financial assistance programs to determine the City's compliance with laws and regulations noncompliance with which we believe could have a material effect on the allowability of program expenditures. The results of our tests that for the transactions and records tested the City of Salina, Kansas, complied with the laws and regulations referred to above, except as described in the accompanying schedule of findings. Our testing was more limited than would be necessary to express an opinion on whether the City of Salina, Kansas, administered those programs in compliance in all material respects with those laws and regulations noncompliance with which we believe could have a material effect on the allowability of program expenditures; however, with respect to the trans- actions and records that were not tested by us, nothing came to our attention to indicate that the City of Salina, Kansas, had not complied with laws and regulations other than those laws and regulations for which we noted violations in our testing referred to above. Salina, Kansas June 16, 1989 Respectfully submitted, ~-...t:~ -10- MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS INDEPENDENT AUDITORS' FINDINGS CITY OF SALINA Salina, Kansas SCHEDULE OF INDEPENDENT AUDITORS' FINDINGS Year Ended December 31, 1988 Community Development Block Grant/Small Cities Program Finding/Noncompliance Grant Number 87-HR-088 Compliance Requirement - The grantee is to provide $156,900 in other sources of funds to this Community Development Program in accordance with the activities and budget approved. Auditors' findings indicate that by the end of the grant period, January 31, 1989, only $148,554 local funds were expended for the activities and budget approved for the Community Development Program. -See Independent Auditors' Report on Compliance with Laws and Regulations Applicable to Federal Financial Assistance Programs- -11- FINANCIAL STATEMENTS CITY OF SALINA Salina, Kansas SUMMARY STATEMENT OF RECEIPTS, EXPENDITURES, AND BALANCES BY FUNDS AND COHPARISON OF CASH BALANCES WITH ENCUHBRANCES Year Ended December 31, 1988 Fund General Fund Special Revenue Funds Street Machinery Special Gasoline Tax Tourism and Convention Promotion Employee Benefit Fund Ut i li ty Fund Special Parks and Recreation Special Alcohol Programs Special Liability Fund Fair Housing Assistance Program Business Improvement District Equipment Reserve Recreation Debt Service Fund Bond and Interest Capital Projects Fund Construction Fund Enterprise Funds Golf Course Sanitation Parking Meters Bicentennial Center Solid Waste Disposal Water and Sewerage Bicentennial Center Data Processing Events Fund (Note 5) Water and Sewerage Principal and Interest Account for Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 and Combined Water and Sewage System Revenue Bonds, Series of 1987 Unencumbered Cash Balance January 1, 1988 $2,273,638.55 63,380.31 72,449.60 1,481.37 277,225.39 188,735.42 769.63 52,375.76 2,119.39 22,084.90 130,530.29 304,244.26 878,260.77 55,016.19 326,158.93 682.89 160,045.73 413,739.46 1,168,184.09 33,024.19 48,596.44 365,138.27 Receipts $ 9,951,438.08 808,088.34 215,622.42 1,401,137.47 574,626.01 53,465.79 53,465.78 115,260.85 29,190.00 17,533.75 195,000.00 141,796.96 2,525,381.29 2,806,645.20 373,269.58 721,336.26 40,000.00 556,504.50 334,811.95 6,598,803.42 586,678.93 141,259.03 705,173.73 Exhibit A Unencumbered Cash Balance Encumbrances Cash Balance Expenditures December 31, 1988 December 31, 1988 December 31, 1988 $ 9,326,066.10 $2,899,010.53 $ 243,630.48 $ 3,142,641.01 63,380.31 63,380.31 749,963.24 130,574.70 2.00 130,576.70 217,103.79 1,523,323.90 155,038.96 54,037.32 209,076.28 635,032.67 128,328.76 128,328.76 45,000.00 8,465.79 8,465.79 45,000.00 9,235.41 9,235.41 152,699.70 14,936.91 14,936.91 31,309.39 19,500.00 20,118.65 20,118.65 211,868.91 113,661.38 113,661. 38 86,273.60 55,523.36 123.86 55,647.22 2,477,667.49 351,958.06 351,958.06 2,679,086.92 1,005,819.05 888,888.61 1,894,707.66 372,212.52 56,073.25 378.30 56,451.55 622,034.17 425,461. 02 2,784.42 428,245.44 40,648.29 34.60 34.60 542,503.17 174,047.06 1,254.00 175,301.06 238,201.15 510,350.26 510,350.26 7,425,455.32 341,532.19 1,802,699.75 2,144,231.94 605,237.65 14,465.47 14,465.47 125,082.44 64,773.03 9,283.00 74,056.03 661,112.50 409,199.50 409,199.50 -12- CITY OF SALINA Salina, Kansas SUHMARY STATEHENT OF RECEIPTS, EXPENDITURES, AND BALANCES BY FUNDS AND COMPARISON OF CASH BALANCES WITH ENCUMBRANCES Year Ended December 31, 1988 Fund Unencumbered Cash Balance January 1, 1988 Receipts Water and Sewerage Reserve Accounts for Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 Revenue Bonds, Series of 1987 Depreciation and Emergency Replacement Extension and Bond Retirement Totals (Memorandum Only) $ 658,538.66 $ 48,329.48 265,000.00 350,000.00 722,758.20 257,000.00 (28,214.69) 640, 561. 47 87,689.35 531,445.70 14,683.81 72 7.39 47,950.14 670,605.68 96,766.76 3,373.38 17;624.17 2,800.00 12,409.65 $9,073,478.23 $31,110,942.09 Intragovernmental Funds Central Garage Risk Management Trust and Agency Funds Citizenship Trust HUD Community Development Cemetery Endowment Mausoleum Endowment Fire Insurance Proceeds The accompanying notes are an integral part of this financial statement. Expenditures Unencumbered Cash Balance December 31, 1988 $ 257,000.00 $ 449,868.14 265,000.00 350,000.00 979,758.20 610,103.77 2,243.01 592,581. 40 26,553.65 1,500.00 13,911.20 577,365.33 141,190.49 100,140.14 17,624.17 13,007.55 2,202.10 $30,883,940.97 $9,300,479.35 Encumbrances December 31, 1988 $ 308,100.00 5,109.15 $3,316,290.89 Exhibit A (Contd.) Cash Balance December 31, 1988 $ 449,868.14 265,000.00 350,000.00 979,758.20 2,243.01 26,553.65 13,911.20 449,290.49 100,140.14 17,624.17 7,311 .25 $12,616,770.24 -13- CITY OF SALINA Salina, Kansas STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 GENERAL FUND Receipts Current tangible tax Vehicle tax Delinquent taxes Local sales tax Bingo gross receipts tax City liquor tax Local ad valorem tax reduction State shared taxes Auto dealers tax stamps Highway maintenance Licenses, fees and permits Municipal court fines Franchise taxes Rents and concessions Interest from investments Engineering fees Services and sales Ambulance fees Fire protection - Outside city Reimbursement of expenditures Transfers from other funds Total Receipts Expenditures Department City Commission City Manager City Clerk City At torney Municipal Court City Building Engineering Fire Inspection Park Police Street Human Relations Emergency Medical Services Traffic Swimming Pools Administration and Planning Contingencies Actual $1,836,847.75 401,958.72 26,289.46 3,393,572.86 11,185.26 53,465.78 292,880.00 229,983.99 12,662.37 limits 188,546.56 350,693.80 1,268,658.02 5,785.00 549,205.77 148,789.99 219,830.67 169,757.14 105,582.68 435,723.36 250,018.90 9,951,438.08 449,048.49 83,041. 79 226,479.45 71,671.18 66,831. 36 127,494.47 139,585.19 1,737,320.50 112,763.93 482,524.63 1,786,270.06 613,737.16 82,033.56 459,942.18 97,867.76 42,763.04 123,175.55 200,548.33 Budget $1,867,627.00 358,100.00 25,000.00 3,300,000.00 16,000.00 45,000.00 292,880.00 224,630.00 15,000.00 3,100.00 212,000.00 370,000.00 1,250,000.00 7,300.00 600,000.00 100,000.00 223,500.00 160,000.00 141,500.00 383,530.00 214,500.00 9,809,667.0(~ 442,920.00 76,650.00 206,730.00 62,600.00 73,410.00 123,190.00 136,610.00 1,745,510.00 104,030.00 472,410.00 1,829,790.00 613,750.00 78,700.00 454,690.00 100,910.00 43,850.00 127,920.00 204,420.00 Exhibit B (Over) Under Budget $ 30,779.25 (43,858.72) (1,289.46) (93,572.86) 4,814.74 (8,465.78) (5,353.99) 2,337.63 3,100.00 23,453.44 19,306.20 (18,658.02) 1,515.00 50,794.23 (48,789.99) 3,669.33 (9,757.14) 35,917.32 (52,193.36) (35,518.90) 041,771.08) (6,128.49) (6,391. 79) (19,749.45) (9,071.18) 6,578.64 (4 , 304. 47) (2,975.19) 8,189.50 (8,733.93) (10,114.63) 43,519.94 12.84 (3,333.56) (5,252.18) 3,042.24 1,086.96 4,744.45 3,871.67 -14- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 GENERAL FUND (CONTD.) Expenditures (Contd.) Department (Contd.) Arts Commission Cemetery General Improvement Museum Floodworks Neighborhood Centers Capital Improvements Total Expenditures Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 STREET MACHINERY (NOTE 2) Receipts Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 SPECIAL GASOLINE TAX Receipts Special gasoline tax Expenditures Personal services Contractual services Materials and supplies Transfers to General Fund Capital outlay Total Expenditures Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 Actual (Over) Under Budget Budget $ 119,638.18 $ 119,260. 00 ($ 378.18) 62,392.97 58,690.00 0,702.97) 55,263.81 61,710.00 6,446.19 157,274.49 155,950.00 (1,324.49) 62,423.07 61,950.00 (473.07) 84,658.68 84,210.00 (448.68) 1,881,316.27 3,078,000.00 1,196,683.73 9,326,066.10 10,517,860.00 1,191,793.90 625,371.98 008,193.00) (1,333,564.98) 2,273,638.55 708,193.00 0,565,445.55) $2,899,010.53 $ ($2,899,010.53) $ 63,380.31 $ 63,380.31 $ 808,088.34 $ 780,000.00 ($ 28,088.34) 68,664.47 69,160.00 495.53 350,678.32 400,000.00 49,321.68 158,330.45 161,490.00 3,159.55 150,000.00 150,000.00 22,290.00 22,350.00 60.00 749,963.24 803,000.00 53,036.76 58,125.10 (23,000.00) (81,125.10) 72,449.60 48,032.00 (24,417.60) $ 130,574.70 $ 25,032.0(~ ($ 105,542.70) -15- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COHPARED WITH BUDGET Year Ended December 31, 1988 TOURISM AND CONVENTION PROMOT ION Receipts Transient guest tax Expenditures Contractual serv~ces Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 EMPLOYEE BENEFIT FUND Receipts Current tangible taxes Delinquent taxes Interest on investments Social security contributions Employees retirement contributions Unemployment insurance contributions Reimbursement of expenditures Vehicle tax Transfers from General Fund Total Receipts Expenditures Public officials and employee liability insurance Social security Police and fire retirement Employees retirement Group insurance Unemployment ~nsurance Workman's compensation Earned leave Total Expenditures Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 Actual $ 215,622.42 217,103.79 (1,481.37) 1,481.37 $ $ 974,455.76 16,724.51 16,446.89 16,116.75 5,251.81 492.39 100,230.95 244,418.41 27,000.00 1,401,137.47 60,000.00 243,650.94 485,757.74 81,639.49 471,659.04 16,872.29 140,000.00 23,744.40 1,523,323.90 (122,186.43) 277,225.39 $ 155,038.96 Budget $ 266,000.00 266,000.00 39,644.00 $ 39,644.00 $ 994,333.00 15,000.00 18,000.00 1,000.00 90,000.00 215,800.00 40,000.00 1,374,133.00 60,000.00 240,000.00 498,000.00 95,000.00 450,000.00 25,000.00 140,000.00 40,000.00 1,548,000.00 (1 73, 867.00) 173 , 867 . O(~ $ (Over) Under Budget $ 50,377.58 48,896.21 1,481.37 38,162.63 $ 39,644.00 $ 19,877.24 (1, 724.51) 1,553.11 (16,116.75) (5,251.81) 507.61 (10,230.95) (28,618.41) 13 , 000 .00 (27,004.47) 0,650.94) 12,242.26 13,360.51 (21,659.04) 8,127.71 16,255.60 24,676.10 (51,680.57) 003,358.39) ($ 155,038.96) -16- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 Actual UTILITY FUND Receipts Current tangible taxes Delinquent taxes Interest on investments Vehicle taxes Transfers from General Fund Total Receipts $ 441,228.28 7,300.30 2,000.00 110,597.43 13,500.00 574,626.01 Expenditures Gas serv~ce Light and power serv~ce Water serv~ce Traffic control signals Street lighting Total Expenditures 44,952.59 253,965.02 63,098.83 32,542.99 240,473 . 24 635,032.67 (60,406.66) Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 188,735.42 Unencumbered Cash Balance, December 31 $ 128,328.76 SPECIAL PARKS AND RECREATION Receipts Ci ty liquor tax $ 53,465.79 Expenditures Transfer to General Fund 45,000.00 8,465.79 Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 $ 8,465.79 SPECIAL ALCOHOL PROGRAHS Receipts Ci ty liquor tax $ 53,465.78 Expenditures Contractual serv~ces 45,000.00 8,465.78 Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 769.63 Unencumbered Cash Balance, December 31 $ 9,235.41 Budget $ 450,196.00 5,000.00 2,000.00 98,400.00 15,000.00 570,596.00 80,000.00 210,000.00 47,000.00 38,000.00 300,000.00 675,000.00 (104,404.00) 104,404.00 $ $ 45,000.00 ($ 45,000. OC~ 662.00 $ 662.00 $ 45,000.00 ($ 45,000. OO~ 663.00 $ 663.00 ($ (Over) Under Budget $ 8,967.72 (2,300.30) (12,197.43) 1,500.00 (4,030.01) 35,047.41 (43,965.02) (16,098.83) 5,457.01 59,526.76 39,967.33 (43,997.34) ($ (84,331.42) 128,328.76) 8,465.79) (8,465.79) 662.00 $ 7,803.79 8,465.78) (8,465.78) 006.63) 8,572.41) -17- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUHBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 Actual SPECIAL LIABILITY FUND Receipts Current tangible taxes Delinquent tangible taxes Vehicle taxes Total Receipts $ 65,949.80 2,629.82 46,681.23 115,260.85 Expenditures Contractual serv~ces Reserve Total Expenditures 152,699.70 152,699.70 Receipts Over (Under) Expenditures (37,438.85) Unencumbered Cash Balance, January 1 52,375.76 Unencumbered Cash Balance, December 31 $ 14,936.91 FAIR HOUSING ASSISTANCE PROGRAH (NOTE 2) Receipts Grant from federal government $ 29,190.00 Expenditures Personal serv~ces Contractual serv~ces Materials and supplies Capital outlay Total Expenditures 7,983.36 13,377.22 6,282.81 3,666.00 31,309.39 Receipts Over (Under) Expenditures (2,119.39) Unencumbered Cash Balance, January 1 2,119.39 Unencumbered Cash Balance, December 31 $ BUSINESS IMPROVEMENT DISTRICT Receipts Assessment fees $ 17,533.75 Expenditures Contractual serv~ces Sundry expenditures Total Expenditures 19,498.00 2.00 19,500.00 Budget $ 67,179.00 600.00 42,800.00 110,579.00 120,000.00 35,000.00 155,000.00 (44,421. 00) 44,421.00 $ $ 19,500.00 19,500.00 19,500.0C~ (Over) Under Budget $ 1,229.20 (2,029.82) (3,881.23) (4,681.85) (32,699.70) 35,000.00 2,300.30 (6,982.15) 0,954.76) ($ 14,936.91) $ 1,966.25 2.00 (2.00) -18- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 BUSINESS IMPROVEMENT DISTRICT (CONTD. ) Budget (Over) Under Budget Actual Receipts Over (Under) Expenditures ($ Unencumbered Cash Balance, January 1 1,966.25) $ $ 1,966.25 22,084.90 7,312.00 04,772.90) 20,118.65 $ 7,312.00 ($ 12,806.65) Unencumbered Cash Balance, December 31 $ EQUIPMENT RESERVE Receipts Interest from investments Transfers from General Fund Total Receipts $ 7,000.00 $ 8,000.00 $ 1,000.00 188,000.00 200,000.00 12,000.00 195,000.00 208,000.00 13,000.00 211,868.91 225, 700 . 00 13,831.09 (16,868.91) (17,700.00) (831. 09) 130,530.29 122,000.00 (8,530.29) $ 113,661.38 $ 104,300.012 ($ 9,361. 38) Expenditures Capi tal outlay Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 RECREATION (NOTE 14) Receipts Current tangible taxes Delinquent tangible taxes Vehicle taxes Miscellaneous revenues Recreation activities Employee benefit fund Activity fund revenue Concession revenue Interest income Total Receipts $ 20,344.78 602.61 29,428.01 62,586.78 14,290.50 7,350.18 6,040.75 680.35 473 . 00 141,796.96 Expenditures Personal services Contractual services Materials and supplies Sundry expenditures Capital outlay Total Expenditures 42,473.89 25,414.66 6,277.49 6,201.74 5,905.82 86,273.60 -19- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 RECREATION (CONTD.) Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 BOND AND INTEREST Receipts Current tangible taxes Delinquent tangible taxes Current special assessment taxes Delinquent special assessment taxes Interest from investments Accrued interest on bonds sold Special assessments Transfers from other funds Vehicle taxes Total Receipts Expenditures General bond principal General bond interest Curb, gutter and pav~ng principal (City share) Curb, gutter and paving principal (Property owner share) Curb, gutter and paving interest (City share) Curb, gutter and paving interest (Property owner share) Fiscal agency commission and postage Estimated interest - Bonds to be issued Total Expenditures Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 Actual $ 55,523.36 $ 55,523.36 $ 768,310.34 13,015.87 852,576.89 63,308.23 20,000.00 3,949.10 6,135.02 605,081. 25 193,004.59 2,525,381.29 510,000.00 207,118.00 481,258.50 648, 741. 50 281,269.22 346,940.28 1,142.50 1,197.49 2,477,667.49 47, 713.80 304,244.26 $ 351,958.06 Budget $ 783,986.00 15,000.00 770,000.00 50,000.00 20,000.00 3,000.00 6,000.00 495,000.00 170,900.00 2,313,886.00 510,000.00 207,120.00 310,500.00 669,510.00 341,950.00 370,280.00 1,640.00 40,000.00 2,451,000.00 (137,114.00) 137,114.00 $ (Over) Under Budget $ 15,675.66 1,984.13 (82,576.89) (13,308.23) (949.10) 035.02) 010,081. 25) (22,104.59) (211,495.29) 2.00 (170,758.50) 20,768.50 60,680.78 23,339.72 497.50 38,802.51 (26,667.49) (184,827.80) 067,130.26) ($ 351,958.06) -20- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COHPARED WITH BUDGET Year Ended December 31, 1988 CONSTRUCTION FUND (NOTE 2) Receipts Temporary notes Issuance of general obligation internal improvement bonds Transfers from other funds Reimbursements of expenditures Other Total Receipts Budget (Over) Under Budget Actual $1,401,218.50 1, 115, 000. 00 99,300.00 50,000.00 141,126.70 2,806,645.20 Expenditures Payment of temporary notes and interest Transfers to other funds Construction and capital outlay Total Expenditures 614,420.22 138,018.90 1,926,647.80 2,679,086.92 127,558.28 Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 878,260.77 Unencumbered Cash Balance, December 31 $1,005,819.05 GOLF COURSE Receipts Membership and green fees Cart rental Cart storage Cart user fees Oil well lease Sales Reimbursement of expenditures Total Receipts $ 204,977.00 $ 190,000.00 ($ 14,977.00) 76,938.95 79,500.00 2,561.05 4,955.00 6,000.00 1,045.00 4,482.00 6,000.00 1,518.00 2,929.52 2,500.00 (429.52) 72,201.93 109,000.00 36,798.07 6,785.18 (6,785.18) 373,269.58 393,000.00 19, 730 .42 136,824.76 140,420.00 3,595.24 58,863.99 59,400.00 536.01 86,485.55 76,000.00 (10,485.55) 45,695.78 104,000.00 58,304.22 44,342.44 41,000.00 (3,342.44) 372,212.52 420,820.00 48,607.48 1,057.06 (27,820.00) (28,877.06) 55,016.19 68,077 .00 13,060.81 $ 56,073.25 $ 40,257.00 ($ 15,816.25) -21- Expenditures Personal services Contractual services Materials and supplies Sundry expenditures Capital outlay Total Expenditures Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 (Over) Under Actual Budget Budget SANITATION Receipts Interest from investments $ 3,000.00 $ 3,000.00 $ Miscellaneous sales and serv~ces 1,060.50 2,000.00 939.50 Service fees 717,000.00 704,000.00 (13,000.00) Reimbursement of expenditures 275.76 1,000.00 724 . 24 Total Receipts 721,336.26 710 , 000 . O(~ ( 11 ,336.26) Expenditures Personal serv~ces 298,832.05 309,870.00 1l,037.95 Contractual serV1.ces 157,581.53 165,720.00 8,138.47 Materials and supplies 97,388.97 100,700.00 3,311.03 Tr ans fer to Construction Fund 30,000.00 30,000.00 Capital outlay 38,231.62 42,260.00 4,028.38 Total Expenditures 622,034.17 648,550.00 26,515.83 Receipts Over (Under) Expenditures 99,302.09 61,450.00 (37,852.09) Unencumbered Cash Balance, January 1 326,158.93 271,086.00 (55,072.93) Unencumbered Cash Balance, December 31 $ 425,461.02 $ 332,536.01~ ($ 92,925.02) PARKING METERS Receipts Transfers from General Fund $ 40,000.00 $ 42,000.00 $ 2,000.00 Expenditures Personal serV1.ces 36,624.01 36,520.00 (1 04 . 01) Contractual serv~ces 800.00 800.00 Materials and supplies 4,024.28 5,090.00 1,065. 72 Total Expenditures 40,648.29 42,410.00 1,761.71 Receipts Over (Under) Expenditures (648.29) (410.00) 238.29 Unencumbered Cash Balance, January 1 682.89 440.00 (242.89) Unencumbered Cash Balance, December 31 $ 34.60 $ 30.00 ($ 4.60) - -22- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 (Over) Under Actual Budget Budget BICENTENNIAL CENTER Receipts Rent $ 140,902.55 $ 197,590.00 $ 56,687.45 Concessions 214,070.42 260,580.00 46,509.58 Reimbursement of expenditures 1,531.53 4,000.00 2,468.47 Transfers from General Fund 200,000.00 200,000.00 Total Receipts 556,504.50 662,170.00 105,665.50 Expenditures Personal serv~ces 334,963.58 374,670.00 39,706.42 Contractual serv~ces 60,007.17 69,900.00 9,892.83 Materials and supplies 40,884.96 51,700.00 10,815.04 Sundry expenditures 87,268.63 124,600.00 37,331.37 Capital outlay 19,378.83 46,640.00 27,261.17 Total Expenditures 542,503.17 667,510.00 125,006.83 Receipts Over (Under) Expenditures 14,001. 33 (5,340.00) (19,341. 33) Unencumbered Cash Balance, January 1 160,045.73 119,436.00 (40,609.73) Unencumbered Cash Balance, December 31 $ 174,047.06 $ 114,096.012 ($ 59,951.06) SOLID WASTE DISPOSAL Receipts Income from leased land $ $ 100.00 $ 100.00 Service fees 332,688.25 265,000.00 (67,688.25) Reimbursement of expenditures 2,123.70 (2,123.70) Total Receipts 334,811.95 265,100.00 (69,711.95) Expenditures Personal serVIces 86,559.61 89,000.00 2,440.39 Contractual serv~ces 28,088.31 33,030.00 4,941.69 Materials and supplies 56,765.17 77,180.00 20,414.83 Sundry expenditures 61,456.00 60,000.00 (1,456.00) Capital outlay 5,332.06 (5,332.06) Total Expenditures 238,201.15 259,210.0(~ 21,008.85 Receipts Over (Under) Expenditures 96,610.80 5,890.00 (90,720.80) Unencumbered Cash Balance, January 1 413,739.46 323,157.00 (90,582.46) Unencumbered Cash Balance, December 31 $ 510,350.26 $ 329,047.00 ($ 181,303.26) -23- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 WATER AND SEWERAGE FUND Receipts Water Sewerage Sanitation fees Tapping and front footage service Service charge - Sanitation department Meter repair and service line revenue Interest income Miscellaneous income Sales tax collections Meter deposits Sale of assets Reserve for Extension and Bond Re- tirement Reserve for Depreciation and Emergency Total Receipts Expenditures Water supply Softening and treatment Pumping Distribution Customer accounting and collection Administrative and general Sewage treatment and collection Bond ordinance requirements Transfer to Sanitation Department - Service fees Capital expenditures Sales tax remitted Meter deposits refunded Bond issue costs Transfer to Reserve for Extension and Bond Retirement Reserve for Depreciation and Emergency Total Expenditures Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 (Over) Under Actual Budget Budget $4,058,732.44 $3,219,800.00 ($ 838,932.44) 1,230,075.03 772,200.00 (457,875.03) 716,958.18 710,000.00 (6,958.18) 19,208.29 10,000.00 (9,208.29) 13,253.48 12,500.00 (753.48) 12,830.69 12,000.00 (830.69) 229,781. 33 95,000.00 (134, 781. 33) 197,128.23 30,000.00 (167,128.23) 76,416.75 48,300.00 (28,116.75) 37,770.00 32,000.00 (5,770.00) 6,649.00 (6,649.00) 400,000.00 400,000.00 400,000.00 400,000.00 6,598,803.42 5,741,800.00 (857,003.42) 97,441. 48 97,400.00 (41.48) 975,909.32 852,060.00 (123,849.32) 194,210.99 220,700.00 26,489.01 441,722.53 374,950.00 (66,772.53) 344,787.72 350,640.00 5,852.28 696,137.40 729,780.00 33,642.60 614,970.45 645,290.00 30,319.55 688,527.00 381,740.00 006, 787.00) 71 7,000. 00 710,000.00 (7,000.00) 2,501,508.34 400,000.00 (2,101,508.34) 76,416.75 56,000.00 (20,416.75) 37,000.00 15,000.00 (22,000.00) 39,823.34 09,823.34) 400,000.00 400,000.00 400,000.00 400,000.00 7,425,455.32 5,633,560.00 0,791,895.32) (826,651. 90) 108,240.00 934,891. 90 1,168,184.09 48,468.00 0,119,716.09) $ 341,532.19 $ 156,708.00 ($ 184,824.19) -24- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 Budget (Over) Under Budget Actual BICENTENNIAL CENTER EVENTS FUND (NOTE 5) Receipts $ 586,678.93 Expenditures Transfer of net rental fees to Bicentennial Center Fund Special events expenditures Total Expenditures 62,429.86 542,807.79 605,237.65 Receipts Over (Under) Expenditures (18,558.72) Unencumbered Cash Balance, January 1 33,024.19 Unencumbered Cash Balance, December 31 $ 14,465.47 DATA PROCESSING Receipts Sale of commodities $ 782.03 $ 750.00 ($ 32.03) Fees 138,814.50 136,900.00 (1,914.50) Computer programm~ng serv~ce 1,662.50 3,000.00 1,337.50 Total Receipts 141,259.03 140,650.00 (609.03) Expenditures Personal serv~ces 75,326.96 83,860.00 8,533.04 Contractual serv~ces 45,377.23 59,110.00 13,732.77 Materials and supplies 4,378.25 5,000.00 621.75 Sundry expenditures 20,000.00 20,000.00 Total Expenditures 125,082.44 167,970.00 42,887.56 Receipts Over (Under) Expenditures 16,176.59 (27,320.00) (43,496.59) Unencumbered Cash Balance, January 1 48,596.44 37 ,610.0(~ 00,986.44) Unencumbered Cash Balance, December 31 $ 64,773.03 $ 10,290.0(~ ($ 54,483.03) -25- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COHPARED WITH BUDGET Year Ended December 31, 1988 PRINCIPAL AND INTEREST ACCOUNT FOR COMBINED WATER AND SEWAGE SYSTEM REFUNDING REVENUE BONDS, SERIES OF 1984 AND COMBINED WATER AND SEWAGE SYSTEM REVENUE BONDS, SERIES OF 1987 (NOTE 2) Receipts Interest from investments Transfers from Water and Sewerage Fund Total Receipts Expenditures Bond principal Bond interest Total Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 RESERVE ACCOUNT FOR COMBINED WATER AND SEWAGE SYSTEM REFUNDING REVENUE BONDS, SERIES OF 1984 (NOTE 2) Receipts Interest from investments Expenditures Transfer to Reserve for Extension and Bond Retirement Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 Actual (Over) Under Budget Budget $ 16,646.73 688,527.00 705,173 . 73 300,000.00 361,112.50 661,112.50 44,061.23 365,138.27 $ 409,199.50 $ 48,329.48 257,000.00 (208,670.52) 658,538.66 $ 449,868.14 -26- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 (Over) Under Budget Actual Budget RESERVE ACCOUNT FOR COHBINED WATER AND SEWAGE SYSTEM REVENUE BONDS, SERIES OF 1987 (NOTE 2) Receipts $ Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 265,000.00 Unencumbered Cash Balance, December 31 $ 265,000.00 RESERVE ACCOUNT FOR COMBINED WATER AND SEWAGE SYSTEM DEPRECIATION AND EMERGENCY REPLACEMENT (NOTE 2) Receipts $ Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 350,000.00 Unencumbered Cash Balance, December 31 $ 350,000.00 RESERVE ACCOUNT FOR COMBINED WATER AND SEWAGE SYSTEM EXTENSION AND BOND RETIREMENT (NOTE 2) Receipts Transfer from Reserve for Refunding Revenue Bonds, Series of 1984 $ 257,000.00 Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 257,000.00 722,758.20 $ 979,758.20 -27- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 CENTRAL GARAGE (NOTE 2) Budget (Over) Under Budget Actual Receipts Reimbursement of expenditures $ 640,561.47 Expenditures Personal services Contractual services Materials and supplies Sundry expenditures Capital outlay Total Expenditures 119,506.89 19,861.98 428,455.04 33,646.89 8,632.97 610,103.77 Receipts Over Expenditures 30,457.70 Unencumbered Cash Balance, January 1 (28,214.69) Unencumbered Cash Balance, December 31 $ 2,243.01 RISK MANAGEMENT (NOTE 2) Receipts Reimbursement of expenditures $ 531,445.70 35,201. 84 553,036.49 519.40 3,615.12 208.55 592,581.40 (61,135.70) 87,689.35 $ 26,553.65 Expenditures Personal services Contractual services Materials and supplies Sundry expenditures Capital outlay Total Expenditures Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 -28- CITY OF SALINA Salina, Kansas B (Contd.) Exhibit STATEHENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 CITIZENSHIP TRUST (NOTE 2) Receipts Interest from investments Expenditures Contractual serv~ces Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 $ HUD COMMUNITY DEVELOPMENT (NOTE 2) Receipts Interest from investments Collection of housing and winteri- zation loans - Principal and interest Community Development Block Grants Reimbursement of expenditures Collection of Community Develop- ment Block Grant loan Total Receipts Expenditures Personal services Contractual services Materials and supplies Return of Community Development Block Grant funds to State of Kansas Total Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 Actual (Over) Under Budget Budget $ 72 7.39 1,500.00 (772.61) 14,683.81 13,911.20 $ 1,551.32 10,457.23 224,000.00 39,597.13 395,000.00 670,605.68 27,538.57 241,685.10 41.66 308,100.00 577,365.33 93,240.35 47,950.14 $ 141,190.49 -29- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1988 CEMETERY ENDOWMENT (NOTE 2) Budget (Over) Under Budget Actual Receipts Perpetual care deposits $ 3,373.38 Expenditures Receipts Over Expenditures 3,373.38 Unencumbered Cash Balance, January 1 96,766.76 Unencumbered Cash Balance, December 31 $ 100,140.14 MAUSOLEUM ENDOWMENT (NOTE 2) Receipts $ Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 17,624.17 Unencumbered Cash Balance, December 31 $ 17,624.17 FIRE INSURANCE PROCEEDS (NOTE 2) Receipts Reimbursement of expenditures $ 12,409.65 Expenditures 13,007.55 Receipts Over (Under) Expenditures (597.90) Unencumbered Cash Balance, January 1 2,800.00 Unencumbered Cash Balance, December 31 $ 2,202.10 The accompanying notes are an integral part of this financial statement. -30- CITY OF SALINA Salina, Kansas NOTES TO FINANCIAL STATEHENTS December 31, 1988 1. Summary of Significant Accounting Policies The City maintains its accounting records in accordance with the principles of fund accounting in order to ensure observance of limitations and restric- tions placed on the use of resources available. This is the procedure by which resources are classified for accounting and reporting into funds estab- lished according to their nature and purposes. The City of Salina maintains its accounting records for all funds on the cash basis, except that expenditures incurred but not paid and purchase commitments at December 31 are recorded as encumbrances at that date. This method serves to develop information relative to compliance with the budget, cash basis, and other statutes applicable to municipalities within the State of Kansas. The method is not, however, in accordance with generally accepted accounting principles for municipalities. Generally accepted accounting principles requ~re: a. Certain accounts receivable and loans receivable relating to Federal Funds to be recorded in the financial statements. The City does not record these receivables until they are collected in cash. b. Expenditures to be recorded generally on the accrual basis. The City records purchase commitments as encumbrances at year-end, and any loss from loss contingencies is not recorded until the amount of the loss is payable. c. The General Fixed Assets and the General Long-Term Debt Account Groups to be maintained. The City does not maintain these account groups. d. Transfers between funds to be recorded as reductions to fund balance of the fund making the transfers and as additions to fund balance of the fund receiving the transfer. The City records such transfers as expenditures of the fund making the transfer and as receipts of the fund receiving the transfer. e. The annual financial statements to include a combined balance sheet for all fund types and account groups; a combined statement of revenues, expenditures, and changes in fund balance for all governmental fund types and expendable trust funds; a combined statement of revenues, expenses, and changes in retained earnings, and changes in financial position for all proprietary fund types; and a combined statement of revenues, expenditures, and changes in fund balance and combined comparison with budget for all govern- mental fund types. These required financial statements are not included in this report. The City has, by charter ordinance, elected to exempt itself from the Kansas statutory requirement to maintain fixed asset records, and has requested the Director of Accounts and Reports to waive the requirements of K.S.A. 75-1120a as related to the preparation of financial statements in conformity with gener- ally accepted accounting principles. -31- 2. Budgets Applicable Kansas statutes require that unless exempted by a specific statute. contain several funds for which budgets omitting certain budget comparisons are budgets be legally adopted for all funds The accompanying financial statements were not prepared. The reasons for described below. Special Revenue Funds - Certain of the special revenue funds are not budgeted since their revenues are designated for a special purpose or the fund represents a clearing account. Capital Projects Fund - The capital projects fund is not budgeted since provision for payment of expenditure is from the issuance of bonds, temporary notes, and special assessments and charges. Water and Sewerage Bond Fund and Reserve Accounts - These funds are not budgeted since receipts and expenditures are in accordance with requirements of applicable bond ~ssues. Central Garage governmental other funds. Trust and Agency Funds - The individual trust and agency funds are not subject to the budget law since the assets do not belong to the City of Salina. and Risk Management - These funds are intra- funds whose expenditures are reimbursable by 3. Cash and Investment Balances Kansas municipalities, such as the City of Salina, are authorized by Kansas statutes to invest funds in: (1) Temporary notes or no-fund warrants issued by the investing governmental unit, Time deposit, open accounts or certificates of deposit, Time certificates of deposit, Repurchase agreements, and United States Treasury bills or notes with maturities not exceeding six months. (2 ) (3) (4 ) (5 ) Deposits or investments with qualifying financial institutions are to be secured by a bond or by the pledge of certain types of securities specified by statute. Cash and investments of the City of Salina deposited with financial institutions were 100% insured or collateralized by securities provided by such depository financial institutions at December 31, 1988. Cash and investments were comprised of the following as of December 31, 1988. Pe tty cash funds Cash in checking and temporarily invested in repurchase agreements Cash in savings Certificates of deposit Treasury bills, at cost (Market value, $1,961,216.80) $ 4,000.00 2,290,884.20 40,986.04 8,321,000.00 1,959,900.00 Total $12,616,770.24 -32- 4. Long-Term Obligations a. Changes in Long-Term Debt The following is a summary of bond transactions of the City for the year ended December 31, 1988: Outstanding bonds at January 1, 1988 New bonds issued: 1988 Internal improvement Bonds retired General Obligation Revenue Total Outstanding Bonds at December 31, 1988 $12,350,000.00 $4,410,000.00 $16,760,000.00 1, 115,000. 00 1,115,000.00 1,640,000.00 300,000.00 1,940,000.00 $11,825,000.00 $4,110,000.00 $15,935,000.00 Outstanding bonds at December 31, 1988, are comprised of the following indi- vidual issues: General Obligation Bonds: $8,115,000 General Obligation Refunding Bonds, Series 1985, due in semi-annual installments of $160,000 to $455,000 through April 1, 1996, interest at 7.5% to 9.0%. $ 4,430,000.00 $1,983,000 General Obligation Internal Improvement Bonds, Series 1986, due in annual installments of $150,000 to $270,000 through December 1, 1996, interest at 5.2% to 5.7%. 1,780,000.00 $5,000,000 General Obligation Internal Improvement Bonds, Series 1987, due in annual installments of $500,000 through December 1, 1997, interest at 6.10% to 6.65%. 4,500,000.00 $1,115,000 General Obligation Internal Improvement Bonds, Series 1988, due in annual installments of $90,000 to $125,000 through December 1, 1998, interest at 6.15% to 8.15%. 1 , 115 ,000.00 Total $11,825,000.00 Revenue Bonds: $2,770,000 Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984, due in annual install- ments of $160,000 to $345,000 through February 15, 1994, interest at 8.75% to 9.75%. $ 1,530,000.00 $2,650,000 Combined Water and Sewage System Revenue Bonds, Series of 1987, due in annual installments of $75,000 to $230,000 through October 1, 2007, interest at 7.0% to 9.0%. 2,580,000.00 Total $ 4,110,000.00 -33- The annual requirements to amortize all bonds outstanding as of December 31, 1988, are as follows: Payable in Year Ended December 31, General Obligation Revenue Total Principal 1989 1990 1991 1992 1993 Thereafter $ 1,705,000.00 $ 325,000.00 $ 2,030,000.00 1,590,000.00 355,000.00 L,945,000.00 1,460,000.00 275,000.00 1,735,000.00 1,365,000.00 400,000.00 1,765,000.00 1,395,000.00 440,000.00 L,835,000.00 4,310,000.00 2,315,000.00 -.!J, 625,000.00 11 ,825,000.00 4,110,000.00 15,935,000.00 Total Principal Interest 1989 1990 1991 1992 1993 Thereafter 801,100.00 333,750.00 1,134,850.00 683,506.25 303,687.50 987,193.75 573,690.00 275,772.50 849,462.50 475,718.75 245,237.50 720,956.25 382,660.00 206,907.50 589,567.50 640,722.50 1,452,950.00 ~2,093,672.50 3,557,397.50 2,818,305.00 6,375,702.50 $15,382,397.50 $6,928,305.00 ~2, 310, 702. 50 Total Interest Total Principal and Interest The City's share and property owner's share of the general obligation bonds outstanding is $8,579,536.82 and $6,802,860.68, respectively. b. General Obligation and Special Assessment Bonds The City issued its General Obligation Refunding Bonds, Series 1985 (the 1985 Bonds), dated October 15, 1985, for the purpose of refunding all the City's then outstanding General Obligation and Special Assessment Bonds (the Refunded Bonds). Cash and bond proceeds were transferred to a Refunding Escrow Trust Account at a local bank, pursuant to an escrow trust agreement dated as of October 15, 1985, to provide the necessary funds for refunding of the Refunded Bonds. Funds transferred to the Refunding Escrow Trust Account were invested in United States Government obligations, and the investments and interest earned on such investments will be sufficient to pay all principal and interest on the Refunded Bonds as they become due. The principal amount of $5,045,000.00 of the Refunded Bonds remains outstanding at December 31, 1988. Neither the assets deposited with the escrow agent for the retirement of the Refunded Bonds nor the outstanding Refunded Bonds are reflected in the accompanying financial statements. -34- c. Revenue Bonds The City has outstanding an ~ssue of Combined Water and Sewer System Revenue Bonds, Series of 1977, of which the principal amount of $2,700,000.00 remains outstanding at December 31, 1988, and an issue of Combined Water and Sewage System Refunding Revenue Bonds, Series of 1978, of which the principal amount of $4,384,000.00 remains out- standing at December 31, 1988. The City has provided for the payment of all principal and interest on the bonds by depositing United States Government obligations in escrow accounts at a local bank pursuant to certain escrow trust agreements. Neither the assets deposited with the escrow agent for retirement of the 1977 and 1978 bonds nor the outstanding 1977 and 1978 obligations, are reflected in the accompanying financial statements. The City has established certain reserve accounts pursuant to bond ordinances authorizing the issuance of Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 and the Combined Water and Sewage System Revenue Bonds, Series of 1987, to provide funds for the retirement of the bonds and payment of interest thereon and for making replacements to the system in the event other funds are not available. The gross revenues of the Water and Sewerage Department are pledged to secure payment of the bonds; however, the pledge is subordiJ.ate to a similar pledge to secure payment of the 1977 and 1978 bonds. The amounts required to be maintained in the reserve accounts estab- lished by the bond ordinances authorizing issuance of the 1984 and 1987 bonds have been provided and the total revenues of the water and sewerage system appear sufficient to meet the requirements of the ordinance. 5. Bicentennial Center Events Fund The Bicentennial Center Events Fund is used as a clearing account for special events when the City acts as the promotor's agent. Receipts from special events are deposited in the fund and related expenses are disbursed from the fund. The ci ty' s rental fees from such events are transferred from th,~ fund to the Bicentennial Center Fund. 6. Capital Projects Fund The Capital Projects Fund is used to account for the purchase or construction of capital facilities, equipment, and public improvements. A summary of the fund's unencumbered cash balance at December 31, 1988, follows: Cash balance resulting from Capital projects completed Capital projects in process Special assessments projects Reserves for future capital projects $ 618,328.81 133,093.36 28,333.74 226,063.14 $1,005,819.05 Total -35- 7. Subsequent Bond Issue The City of Salina issued the Combined Water and Sewage System Revenue Bonds, Series 1988, in the total amount of $3,000,000.00 on January 10,. 1989. 8. Compliance with Kansas Statutes A summary of statutory violations related to 1988 follows. Expenditures of the Bond and Interest fund exceeded budgeted expenditures for the year ended December 31, 1988, by $26,667.49, which appears to be a violation of the Kansas budget law (K.S.A. 79-2935). a. The assets pledged by two banks to secure cash deposits of the City were not sufficient to meet the requirements of K.S"A. 9-1402 during the month of December, 1988. b. 9. Fund Transfers Following ~s a schedule of transfers between funds for the year 1988. From To Special Parks and Recreation Special Gasoline Tax General Fund - Contingencies General Fund - Contingencies Water and Sewerage General Fund - Capital improvements General Fund - Police Bicentennial Center Events Water and Sewerage - Bond Ordinance requirements General Fund General Fund Parking meters Employee Benefit Fund Sanitation - Service Fees Fund Equipment Reserve Equipment Reserve Bicentennial Center - Rent Principal and Interest Account for Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 and Com- bined Water and Sewage System Revenue Bonds, Series of 1987 Utility Fund General Fund - General Fund - Improvements General Fund - Improvements General Fund - Improvements Huseum Capital Bicentennial Center Capital Bond and Interest Capital Construction Fund Amount $ 45,000.00 150,000.00 40,000.00 27,000.00 71 7,000. 00 138,000.00 50,000.00 62,429.86 688,527.00 13,500.00 200,000.00 605,081. 25 9,300.00 -36- From Business Improvement District Contractual Services Sanitation Solid Waste - Sundry Expenditures Construction Fund Construction Fund Reserve Account for Com- bined Water and Sewage System Refunding Revenue Bonds, Series of 1984 10. Defined Benefit Pension Plan To General Fund Construction Construction General Fund - Engineering fees General Fund Reserve Account for Combined Water and Sewage System Extension and Bond Retire- ment Amount $ 17,000.00 30,000.00 60,000.00 100,000.00 38,018.90 257,000.00 Substantially all full-time employees of the City of Salina participate in the Kansas Public Employees Retirement System (the System), a multiple-employer public employee retirement system. A group of employees participate in the Kansas Police and Firemen System (KP&F), a separate program administered by the System. Following is a summary of covered payroll and contributions to the System for the year ended December 31, 1988. Covered Payroll General employees Police and firemen $4,047,434.43 3,238,384.98 Employer Contributions Employee $123 , 041. 73 485,757.74 $177,357.44 205,877.04 Totals $7,285,819.41 Total $ 300,399.17 691,634.78 $608,799.47 $383,234.48 $ 992,033.95 The total payroll for the City of Salina was $7,943,846.58 for the year ended December 31, 1988. Substantially all general employees of the City of Salina are eligible to par- ticipate in the System after one year of employment. Employees who retire at or after age 65 are entitled to a retirement benefit, payable monthly for life, equal to 1 percent of their final average salary for each year of "prior" ser- vice and 1.25 to 1.5 percent for each year of "participating" service depending upon the number of years of service. Final average salary is the employee's average salary over the highest four years of credited service. Benefits fully vest on reaching 10 years of service. Vested employees may retire at age 55 to 65 with 10 years of credited service and receive reduced retirement benefits. The system also provides death and disability benefits. Benefits are established by State statute. Covered general employees are required by State statute to contribute 4% of their salary to the plan. The employer is required by the same statute to contribute the remaining amounts necessary to pay benefits when due. The employer's contribution was 3.04% of covered payroll for 1988. -37- The retirement benefits for participants in KP&F are different from those described above for other participants in the System. Normal retirement for KP&F participants is at age 55. They can retire at age 50 with 20 years of service, but with reduced benefits. The contribution rate was 3% to 7% for employees and 15% for the employer for 1988. The "penson benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step-rate benefits, estimated to be payable in the future as a result of employee service to date. The measure, ,.rhich is the actuarial present value of credited projected benefits, is intended to help users assess the System's funding status on a going-concern basis and assess progress made in accumulating sufficient assets to pay benefits when due. The System does not make separate measurements of assets and pension benefit obligation for individual employers. The pension benefit obligation at January 1, 1987, for the System as a whole, determined through an actuarial valuation performed as of that date, was $2.96 billion. The System's net assets available for benefits on that date were estimated to be $2.59 billion, leaving an unfunded pension benefit obligation estimated at $369 million. Other information related to the system can be found in the System's 1988 comprehensive annual financial report. 11. Water and Sewerage Fund Expenditures of the Water and Sewerage Fund exceeded budget by $1,791,895.32 for the year 1988, due to capital expenditures for renovating the water and sewerage system. These capital expenditures will be funded by the issuance of the Combined Water and Sewage System Revenue Bonds, Series of 1988, in the total amount of $3,000,000.00 (see Note 7). 12. Construction Fund Projects Construction fund projects cumulative expenditures through December 31, 1988, are compared to project authorizations as follows: Project Name Street and Drainage Improvements and Water Line and Sanitary Sewer Extensions Downtown Redevelopment Street and Drainage Improvements and Water Line and Sanitary Sewer Extensions Sidewalk Improvements Emergency Equipment Ambulance Equipment Solid Waste Equipment Ohio Street and Iron Avenue Inter- section and Ohio Street South Improvements Broadway Overpass Project Authorization Cumulative Expenditures $ 758,907.88 $ 683,211.99 6,500,000.00 5,193,076.24 400,533.79 293,490.70 99,998.84 66,947.00 347,000.00 346,960.09 98,985.20 98,985.20 41,360.00 38,632.00 800,000.00 670,797.47 500.00 -38- Cumulative expenditures through December 31, 1988 exceeded the project authorization as of December 31, 1988 for the Broadway Overpass project, which appears to be a violation of the Kansas budget law (K.S.A. 79-2935). 13. Temporary Notes The following is a summary of temporary note transactions of the City for the year ended December 31, 1988: Outstanding debt at January 1, 1988 Temporary notes issued Temporary notes paid $ 300,000.00 1,401,218.50 (576,218.50) Outstanding Debt at December 31, 1988 $1,125,000.00 Outstanding debt at December 31, 1988, is comprised of a $302,000.00 temporary note issued on October 1, 1988, at an interest rate of 6.5%; a $23,000.00 temporary note issued on October 1, 1988, at an interest rate of 6.5%; and a $800,000.00 temporary note issued on December 1, 1988, at an interest rate of 7.0%. 14. Recreation Fund The City entered into an agreement with the Board of Education of Unified School District #305 and the Salina Recreation Commission as of October 1, 1988, to terminate the Recreation Commission and establish a recreation division within the City. The operations of such division are presented in a separate Recreation Fund in these financial statements. -39- Supplemental Information Cash in Depositories Bank IV, Salina, Kansas National Bank of America, Salina, Kansas First National Bank and Trust Company, Salina, Kansas First Bank and Trus t Co., Salina, Kansas Peoples Heritage Federal Savings and Loan Association, Salina, Kansas Total Cash in Depositories CITY OF SALINA Salina, Kansas COHPOSITION OF ENDING CASH BALANCES December 31, 1988 Cash ~n Cash ~n Checking Savings $ 941,359.700) $ $ 280.05 1,333,115.42(2) 40,705.99 16,409.08 $2,290,884.20 $40,986.04 Investment U.S. Treasury bills, due March 30, 1989 Petty Cash Water and Sewerage Department Bicentennial Center Total Petty Cash Total 0) Certi ficates of Deposit 3,795,000.00 10,000.00 4,516,000.00 $8,321,000.00 Includes Repurchase Agreement balance of $1,100,000.00. (2) Includes Repurchase Agreement balance of $1,860,000.00. Schedule 1 Total $ 941,359.70 3,795,280.05 1,383,821.41 16,409.08 4,516,000.00 10,652,870.24 1,959,900.00 2,500.00 1,500.00 4,000.00 $12,616,770.24 -40- CITY OF SALINA Salina, Kansas Schedule 2 COMPARISON OF GROSS CASH BALANCES WITH DEPOSITORY SECURITY December 31, 1988 Gross Cash Balances Cash in checking Cash in savings Certificates of deposit Federal funds Totals Less FDIC or FSLIC coverage Balances Securable by Collateral Security required (100% ) Security provided by depositories Amount Undersecured by Statute Bank IV -Salina First National National Bank Bank and of America Trust Company Peoples Heritage Federal Savings and Loan Association First Bank and Trust Co. $ 484,534.61 $ 6,265.22 $ 23,239.33 $ $ 280.05 40,705.99 19,985.20 3,795,000.00 10,000.00 4,516,000.00 1,100,000.00 1,860,000.00 1,584,534.61 3,801,545.27 1,933,945.32 19,985.20 4,516,000.00 100,000.00 106,265.22 73,945.32 19,985.20 100,000.00 $1,484,534.61 $3,695,280.05 $1,860,000.00 $ $4,416,000.00 $1,484,534.61 $3,695,280.05 $1,860,000.00 $ $4,416,000.00 3,394,266.32 4,191,338.37 5,504,284.00 1,015,625.00 5,078,574.03 $ $ $ $ $ -41- CITY OF SALINA Salina, Kansas SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE Year Ended December 31, 1988 Federal Grantor/ Pass Through Gr an tor / Program Title U.S. Department of Housing and Urban Development - Fair Housing Assistance Program U.S. Department of Housing and Urban Development - Community Development Block Grant/Small Cities Program (Passed Through Kansas Department of Commerce) Xetec, Grant No. 85-BF-280 Revels, Grant No. 86-BF-181 Housing, Grant No. 87 -HR -088 U.S. Department of Housing and Urban Development - Community Development Block Grant/Small Cities Program Xetec, Grant No. 85-BF-280 Total Federal Assistance Federal CFDA Number 14.401 14.219 14.219 Unencumbered Cash Balance January 1, 1988 Receipts Expendi l~ures Schedule 3 Unencumbered Cash Balance December 31, 1988 $ $ (1) Receipt of funds from subrecipient and expenditures represent return of funds to the Kansas Department of Commerce. $ 2,119.39 $ 29,190.00 $ 31,309.39 5,000.00 5,000.00 5,000.00 5,000.00 224,000.00 224,000.00 224,000.00 234,000.00 10,000.00 308, 100.00 (1 ) 308,100.00(1) $12,119.39 $561,290.00 $573,409.39 -42- SEPARATE FINANCIAL STATEMENTS WATER AND SEWERAGE DEPARTMENT CITY OF SALINA Salina, Kansas WATER AND SEWERAGE DEPARTMENT FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT December 31, 1988 and 1987 KENNEDY AND COE Certified Public Accountants Salina, Kansas KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO HOME OFFICE: P.O BOX 1100 SALINA, KANSAS 67402.1100 913.825.1561 To the Mayor and The Board of City Commissioners: We have audited the balance sheets of the Water and Sewerage Department of the City of Salina, Kansas, as of December 31, 1988 and 1987, and the related state- ments of income, contributed capital and retained earnings, and changes in financial position for the years then ended. These financial statements are the responsibility of the City's management. Our responsibility is to express an op~n~on on these financial statements based on our audits. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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 the Water and Sewerage Department of the City of Salina, Kansas, as of December 31, 1988 and 1987, and the results of its operations and the changes in its financial position for the years then ended, in conformity with generally accepted accounting principles. Respectfully submitted, Salina, Kansas June 16, 1989 ~~tk.- ~.~ C.P.A. Certified Public Accountant in charge of and actively engaged on this audit. MEMBERS OF: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND SEC PRACTICE SECTION AND PRIVATE COMPANIES PRACTICE SECTION OF THE AICPA DIVISION FOR CPA FIRMS -43- CITY OF SALINA Salina, Kansas WATER AND SEWERAGE DEPARTMENT Current Assets Cash and investments Accounts receivable, net of doubtful accounts - 1988, Accrued interest receivable Total Current Assets BALANCE SHEETS ASSETS allowance for $46,632; 1987, $36,224 Restricted Assets Construction fund Cash and investments System sinking fund Cash and investments Plant reserve fund Cash and investments System reserve fund Cash and investments Total Restricted Assets Property, Plant, and Equipment Land Water plant and equipment Sewerage plant and equipment Furniture and office equipment Construction in progress (Notes 4 and 6) Less accumulated depreciation Total Property, Plant, and Equipment Other Assets Prepaid supplies Deferred bond issuance costs, net accumulated amortization - 1988, 1987, $61,923 Total Other Assets Totals of $80,668; December 31, 1988 1987 $ 1,650,617 382,459 22,807 2,055,883 493,615 409,200 714,868 1,329,758 2,947,441 291,939 17,003,660 10,605,126 315,816 1,030,510 29,247,051 14,575,944 14,671,107 213,453 154,393 367,846 $20,042,277 The accompanying notes are an integral part of these financial statements. $ 698,781 321,117 69,766 1,089,664 2,355,935 365,138 923,539 1,072,758 4,717,370 291,939 15,237,405 10,430,057 205,473 330,523 26,495,397 13,834,463 12,660,934 235, 173 133,315 368,488 $18,836,456 12,959,969 11,607,588 Capital and 15,413,795 13,969,023 $20,042,277 $18,836,456 LIABILITIES Current Liabilities Accounts payable Customers' meter deposits Accrued interest payable Accrued liability for compensated absences Long-term obligations due within one year (Note 3) Total Current Liabilities Long-Term Obligations Revenue bonds due after one year (Note 3) Reserves, Contributed Capital Reserves System sinking fund Plant reserve fund System reserve fund Total Reserves and Retained Earnings Contributed capital and retained earn~ngs (Exhibit C) Total Reserves, Contributed Retained Earnings Totals Exhibit A December 31, 1988 1987 $ 204,438 $ 148,615 63,610 62,840 103,917 112,911 146,517 133,067 325,000 300,000 843,482 757,433 3,785,000 4, 11 0,000 409,200 714,868 1,329,758 2,453,826 365,138 923,539 1,072,758 2,361,435 -44- CITY OF SALINA Salina, Kansas WATER AND SEWERAGE DEPARTMENT STATEMENTS OF INCOME Operating Revenues Water revenue Sewerage revenue Tapping service and frontage charges Meter repair and service line revenue Service charge - Sanitation department Miscellaneous income Total Operating Revenues Operating Expenses Water supply Softening and treatment Pumping Distribution Customers' accounting and collection Administrative and general Sewage treatment and collection Depreciation Total Operating Expenses Operating Income Other Income Interest on investments Miscellaneous Total Other Income Other Expenses Interest on revenue bonds (Note 4) Amortization of deferred bond ~ssuance costs Loss on retirement of assets Total Other Expenses Net Income Exhibit B Year Ended December 31, 1988 1987 $4,130,483 1,230,075 19,208 12,831 13,253 82,315 5,488,165 97,441 978,339 195,329 466,097 347,412 717,534 618,647 792,601 4,213 ,400 1,274,765 155,932 93,864 249,796 188,402 17,675 26,078 232,155 $1,292,406 The accompanying notes are an integral part of these financial statements. $3,289,884 741,420 18,768 10,946 13,086 20,737 4,094,841 1l8,059 869,243 190,566 367,811 333,842 729,962 601,783 631,667 3,842,933 251,908 127,466 93,864 221,330 164,258 17,388 26,676 208,322 $ 264,916 -45- CITY OF SALINA Salina, Kansas Exhibit C WATER AND SEWERAGE DEPARTMENT STATEMENTS OF CONTRIBUTED CAPITAL AND RETAINED EARNINGS Balance, Beginning of Year Year Ended December 31, 1988 1987 $11,607,588 $11,222,235 1,292,406 264,916 152,366 119,828 661,112 380,178 257,000 357,786 2,362,884 1,122,708 Additions Net income (loss) for the year (Exhibit B) Contributions of property, plant and equipment Transfers from System sinking fund reserve Plant reserve fund System reserve fund Total Additions Deductions Transfers to restricted System sinking fund Plant reserve fund System reserve fund Total Deductions reserves 705,174 48,329 257,000 1,010,503 387,571 308,225 41,559 737,355 Balance, End of Year $12,959,969 $11,607,588 The accompanying notes are an integral part of these financial statements. -46- CITY OF SALINA Salina, Kansas WATER AND SEWERAGE DEPARTMENT Exhibit D STATEMENTS OF CHANGES IN FINANCIAL POSITION Sources of Working Capital From Operations Net income (loss) (Exhibit B) Charges against net income not affecting working capital Depreciation Amortization of deferred bond issuance costs Loss on dispositions of property, plant, and equipment Working capital provided by operations Decrease in prepaid supplies Increase in long-term obligations Decrease in restricted assets Proceeds from sale of property, plant, and equipment Total Sources of Working Capital Applications of Working Capital Decrease in long-term obligations Increase in bond issuance costs Additions to property, plant, and equipment (net of contributions - 1988, $152,366; 1987, $119,828) Increase in restricted assets Increase in prepaid supplies Total Applications of Working Capital Increase (Decrease) in Working Capital Year Ended December 31, 1988 1987 $1,292,406 $ 264,916 792,601 631,667 17,675 17,388 26,078 26,676 2,128,760 940,647 21, 720 2,650,000 1,769,929 6,649 1,511 3,927,058 3,592,158 325,000 300,000 38,753 27,138 2,683,135 721,843 2,355,326 5,704 3,046,888 3,410,011 $ 880,170 $ 182,147 Changes in Components of Working Capital Increase (Decrease) ~n Current Assets Cash and investments $ 951,836 $ 303,653 Accounts receivable 61,342 26,861 Accrued interest (46,959) 14,301 Total Increase (Decrease) ~n Current Assets 966,219 344,815 Increase (Decrease) ~n Current Liabilities Accounts payable 55,823 16,020 Customers' meter deposits 770 2,350 Accrued expenses 4,456 54,298 Long-term obligations due within one year 25,000 90,000 Total Increase (Decrease) in Current Liabilities 86,049 162,668 Increase (Decrease) ~n Working Capital $ 880,170 $ 182,147 The accompanying notes are an integral part of these financial statements. -47- 1. 2. CITY OF SAL INA Salina, Kansas WATER AND SEWERAGE DEPARTMENT NOTES TO FINANCIAL STATEMENTS December 31, 1988 and 1987 Summary of Significant Accounting Policies a. Fund Accounting: The City maintains its accounting records in accordance with the principles of fund accounting in order to ensure observance of limitations and restrictions placed on the use of resources available. Resources are classified for accounting and reporting into funds established according to their nature and purposes. The Water and Sewerage Department of the City of Salina is a separate fund of the City which is supported by user charges from its customers rather than by tax monies. The Department uses the accrual method of accounting in the preparation of its financial statements. Revenue is recorded as earned and expenses as incurred. b. Deferred Issuance Costs: Deferred issuance costs are amortized to expense over the term of the related revenue bonds. c. Property, Plant, and Equipment and Depreciation: Property, plant, and equipment are stated at cost. Assets acquired prior to 1981 have been adjusted to reflect cost as determined by a firm of professional appraisers. Depreciation is determined using the straight-line method over the estimated useful life of each asset. d. Investments: Investments are stated at cost which approximates market. Cash and Investments Kansas municipalities, such as the City of Salina, are authorized by Kansas statutes to invest funds in: (1) Temporary notes or no-fund warrants issued by the investing governmental unit, Time deposit, open accounts or certificates of deposit, Time certificates of deposit, Repurchase agreements, and United States Treasury bills or notes with maturities not exceeding six months. (2 ) (3) (4 ) (5 ) Deposits or investments with qualifying financial institutions are to be secured by a bond or by the pledge of certain types of securities specified by statute. Cash and investments of the City of Salina deposited with financial institutions were 100% insured or collateralized by securities provided by such depository financial institutions at December 31, 1988. Cash and investments of the Water and Sewerage Department are pooled with other funds of the City for deposit and investment purposes. Cash and investment balances of the City included petty cash, cash in checking and savings accounts, repurchase agreements, certificates of deposit and U.S. Treasury bills as of December 31, 1988. -48- 3. Long-Term Obligations Long-term obligations consist of the following: December 31, 1988 1987 Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 (the 1984 Bonds), matures serially each February 15 through 1994, remaining maturities bear interest at rates varying from 8 3/4% to 9 3/4% per annum. $1,530,000 $1,760,000 Combined Water and Sewage System Revenue Bonds, Series of 1987 (the 1987 Bonds), mature serially each October 1 through 2007, maturities bear interest at rates varying from 7% to 9% per annum. 2,580,000 4,110,000 325,000 2,650,000 4,410,000 300,000 Less amounts due within one year $3,785,000 ,$4,110,000 Amounts Due After One Year Aggregate maturities of the above obligations in subsequent years are as follows: Year Amount 1989 1990 1991 1992 1993 Thereafter $ 325,000 355,000 275,000 400,000 440,000 2,315,000 Total Bonds Outstanding, December 31, 1988 $4,110,000 The City issued the 1987 Bonds as of October 1, 1987, for the purpose of finan- cing certain improvements to the water and sewerage system. The City issued the 1984 Bonds as of June 15, 1984, for the purpose of refunding its Combined Water and Sewage System Refunding Revenue Bonds, Series of 1978 (the 1978 Bonds). The proceeds of the 1984 Bonds, cash and certain investments were transferred to a Refunding Escrow Trust Account at a local bank, pursuant to an escrow trust agreement dated as of June 15, 1984, and were invested in United States Government obligations. The investments and inteTest earned on such investments will be sufficient to pay all principal and interest on the 1978 Bonds as they become due. The City issued the 1978 Bonds for the purpose of refunding its Combined Water and Sewage System Revenue Bonds of 1961 and 1977. Proceeds of the 1978 Bonds were invested in United States Government obligations deposited with a local bank, pursuant to an escrow trust agreement dated May 1, 1978. Total funds deposited and interest earned on such funds will be sufficient to pay all principal and interest on the 1961 and 1977 bonds as they become due. The final maturity of the 1961 Bonds was retired in 1986. -49- Neither the assets deposited with the escrow agent nor the outstanding 1977 and 1978 obligations totaling $7,084,000 are reflected in the accompanying financial statements as of December 31, 1988. The City has established certain reserve accounts pursuant to the 1984 and 1987 bond ordinances to provide funds for the retirement of the bonds and payment of interest thereon and for making replacements to the system in the event other funds are not available. The gross revenues of the Department are pledged to secure payment of the bonds; however, the pledge is subordinate to a similar pledge to secure payment of the 1977 and 1978 bonds. The amounts required to be maintained in the reserve accounts established by the 1984 and 1987 bond ordinances have been provided and the total revenues of the system for 1988 appear sufficient to meet the requirements of the ordinances. 4. Interest Cost A summary of interest cost follows: Interest Expense Year Ended December 31, 1988 1987 $352,119 $208,459 (163,71n (44,201) $188,402 $164,258 $163,717 $ 44,201 (91,866) ~9,32n $ 71,851 $ 14,874 Total interest cost Capitalized interest cost Capitalized interest cost Related interest earned on unexpended bond proceeds whose use is limited Net Interest Cost Capitalized 5. Defined Benefit Pension Plan Substantially all full-time employees of the City of Salina participate in the Kansas Public Employees Retirement System ("System"), a multiple-employer public employees retirement system. The payroll for employees of the Water and Sewerage Department covered by the System for the years ended December 31, 1988 and 1987, respectively, was $1,125,203 and $1,005,890; the total payroll for the Department was $1,211,510 and $1,132,385. Substantially all employees of the City of Salina are eligible to participate in the System after one year of employment. Employees who retire at or after age 65 are entitled to a retirement benefit, payable monthly for life, equal to 1 percent of their final average salary for each year of "prior" service and 1.25 to 1.5 percent for each year of "participating" service depending upon the number of years of service. Final average salary is the employee's average salary over the highest four years of credited service. Benefits fully vest on reaching 10 years of service. Vested employees may retire at age 55 to 65 with 10 years of credited service and receive reduced retire- ment benefits. The system also provides death and disability benefits. Benefits are established by State statute. -50- Covered employees are required by State statute to contribute I~% of their salary to the plan. The employer is required by the same statute to contribute the remaining amounts necessary to pay benefits when due. The Water and Sewerage Department's contribution requirement for the year ended December 31, 1988 was $84,968, which consisted of $34,514 from the employer and $50,454 from employees; these contributions represented 3.04% and 4% of covered payroll, respectively. The Water and Sewerage Department's contri- bution requirement for the year ended December 31, 1987, was $80,005, which consisted of $39,770 from the employer and $40,235 from employees; these contributions represented 3.9% and 4% of covered payroll, respectively. The "penson benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step-rate benefits, estimated to be payable in the future as a result of employee service to date. The measure, which is the actuarial present value of credited projected benefits, is intended to help users assess the System's funding status on a going-concern basis and assess progress made in accumulating sufficient assets to pay benefits when due. The System does not make separate measurements of assets and peasion benefit obligation for individual employers. The pension benefit obligation at January 1, 1987, for the System as a whole, determined through an actuarial valuation performed as of that date, was $2.96 billion. The System's net assets available for benefits on that date were estimated to be $2.59 billion, leaving an unfunded pension benefit obligation estimated at $369 million. Other information related to the system can be found in the System's 1988 comprehensive annual financial report. 6. Commi tments The Department has entered into contractual commitments totaling $1,586,848 to complete certain projects included in construction in process at December 31, 1988. 7. Related Party Transactions The Department reimbursed the City of Salina, Data Processing Fund $54,500 in both 1988 and 1987 for data processing services. The Department also paid $90,000 as its share of data process1ng equipment purchased by the City of Salina, Data Processing Fund in 1988. 8. Subsequent Bond Issue The City of Salina issued the Combined Water and Sewage System Revenue Bonds, Series 1988, in the total amount of $3,000,000 on January 10, 1989. 9. Change in Accounting Estimate The estimated useful lives of a group of water system assets were revised during the year 1988, resulting ~n a one time charge to depreciation expense of $108,705. -51-