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Transcript of ProceedingsLegal Opinion Gilmore & Bell, P.C. Kansas City, Missouri TRANSCRIPT OF PROCEEDINGS AUTHORIZING THE ISSUANCE OF $6,085,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 DATED APRIL 24, 2019 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 DATED APRIL 24, 2019 CLOSING LIST Copies of the transcript of proceedings for the above referenced issue (the "Notes"), will be prepared and distributed as follows: I.City of Salina, Kansas (the "Issuer") 2.Attorney General of the State of Kansas 3.Country Club Bank, Prairie Village, Kansas (the "Original Purchaser") 4.George K. Baum & Company, Kansas City, Missouri (the "Municipal Advisor") 5.Gilmore & Bell, P.C., Kansas City, Missouri ("Bond Counsel") Document Number PROCEEDINGS AUTHORIZING THE IMPROVEMENTS 1.Landfill Cell #20 2.North 9"' Street Bridge 3.Pheasant Ridge Addition No. 3 4.Police Parking 5.Smoky Hill River Renewal PROCEEDINGS AUTHORIZING THE SALE AND ISSUANCE OF THE NOTES 6. Excerpt of Minutes of the governing body meeting evidencing adoption of Resolution No. 19-7682 7.Resolution No. 19-7682 authorizing the offering for sale of the Notes 8. Notice of Sale, Preliminary Official Statement and Certificate Deeming Preliminary Official Statement Final 9. Official Statement I 0. Continuing Disclosure Undertaking 11. Excerpt of Minutes of the governing body meeting evidencing opening of the bids, acceptance of the best bid of the Original Purchaser and adoption of Resolution 19-7692 12. Resolution 19-7692 authorizing the issuance of the Notes and prescribing the fonn and details of the Notes CLOSING DOCUMENTS 13. Transcript Certificate Exhibit A -Schedule of Outstanding General Obligation Indebtedness 14. Uniform Facsimile of Signature Certificates 15. Specimen Note 16. Agreement Between Issuer and Agent I 7. DTC Documents Blanket Letter of Representations Underwriting Safekeeping Agreement 18. Rating Letter Moody's Investors Service 19. Closing Certificate 20. Federal Tax Certificate with attachments as follows: Exhibit A Debt Service Schedule and Proof of Note Yield Exhibit B IRS Form 8038-G Exhibit C-1 Purchaser's Receipt for Notes and Issue Price Certificate Exhibit C-2 Municipal Advisor's Certificate Regarding the Competitive Sale Exhibit D Description of Property Comprising the Financed Facility and List of Reimbursement Expenditures Exhibit E Sample Annual Compliance Checklist 21. Certificate of Municipal Advisor LEGAL OPINIONS 22. Approving legal opinion of Gilmore & Bell, P.C. 23. Approval letter of Attorney General 2 MISCELLANEOUS DOCUMENTS 24. Closing Letter 25. Letter from State Treasurer Confinning Registration Number 2 1 ii I CITY OF SALINA, KANSAS REGULAR MEETING OF TiiE BOARD OF COMMISSIONERS February 11, 2019 4:00p.m. The City Commission convened at 2:~0 p.m. for Insurance Broker Services Update and at 3:45 p.m. for Citizens Forum at City·County Building, Room 107B. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Trent W. Davis, M.D. (presiding), Commissioners Joe Hay, Jr., Melissa Rose Hodges, Mike Hoppock, and Karl Ryan. Also present: Michael Schrage, City Manager; Greg Beng~on, City Attorney; and Shandi Wicks, CityOerk. AWARDS AND PROCLAMATIONS (3.1) The week of February 17 through 23, 2019 as "Engineers Week" in the city of Salina. Jeff Drees, President of the Smoky Valley Chapter of Kansas Society of Professional Engineers, ·read the proclamation and announced associated events. CITIZENS FORUM None. PUBLIC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSENT AGENDA (6.1) Approve the minutes of February 4, 2019 special meeting. (6.2) Approve the minutes of February 4, 2019 regular meeting. (6.3) Approve Resolution No. 19-7669 appointing members to the Accessibility Advisory Board, Animal Control Advisory and Appeals Board, Arts and Humanities Commission, Building Advisory Board, Heritage Commission, Human Relations Commission, Parks and Recreation Advisory Committee, Planning Commission and Tree Advisory Board. Commissioner Hay commented that he had talked with a lot of young individuals about serving on boards and was happy to see the number of applications submitted. Mayor Davis asked Commissioner Hay to read the names of the board members appointed. 19-0030 Moved by Commissioner Ryan, seconded by Commissioner Hodges, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION Mayor Davis moved Item 7.10 to the beginning of the administration items. He also asked for Item 7.2 to be moved to follow Item 7.6. Page 1 (i.10) Resolution No. 19-7673 authorizing the city manager to enter into an agreement with Smart Security, Inc. for security services at the Salina Municipal Court. .Michael Schrage, City Manager, explained the bids received, agreement, fiscal impact and action options. Mayor Davis asked if staff was aware of the cost difference of the hourly rate in the bids received. Judge Stoss stated in the information provided in the proposals the employee hourly salary was about the same in all bids received with the total hourly rate covering administration and overhead costs. Moved by Commissioner Hay, seconded by Commissioner Hoppock, to adopt Resolution No. 19- 7673 authorizing the city manager to enter into an agreement with Smart Security, Inc. for security services at the Salina J'vlunicipal Court. Aye: (5). Nay: (0). Motion carried. (7.1) Second reading Ordinance No. 19-10993 authorizing the execution of a Loan Agreement with the State of Kansas for the purpose of financing the Markley/Magnolia Sewer System Improvements. Mayor Davis noted that Ordinance No. 19-10993 was passed on first reading on February 4, 2019 and since that time no comments have been received. 19-0032 Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to adopt Ordinance No. 19-10993 authorizing the execution of a Loan Agreement with the State of Kansas for the purpose of financing the Markley/Magnolia Sewer System Improvements on second reading. A roll call vote was taken. Aye: (5) Hay, Hodges, Hoppock, Ryan, Davis. Nay: (0). Motion carried. (7.3) Resolution No. 19-7670 authorizing the acceptance of the 2018 People's Choice Sculpture and its placement on public property, located at 211 West Iron Avenue. Brad Anderson, Director of Arts & Humanities, explained the Sculpture Tour, People's Choice winner, placement location, fiscal impact and action options. 19-0033 Moved by Commissioner Hodges, seconded by Commissioner Hay, to adopt Resolution No. 19- 7670 authorizing the acceptance of the 2018 People's Choice Sculpture and its placement on public property, located at 211 \Vest Iron Avenue. Aye: (5). Nay: (0). Motion carried. (7.4) Resolution No. 19-7657 approving an updated and restated Community Art and Design policy. · Brad Anderson, Director of Arts & Humanities, explained the modifications to the Community Art and Design (CAD} policy and action options. Greg Bengtson, City Attorney, provided information pertaining to the role of the Arts and Humanities Commissioner serving on the CAD Conunittee. Commissioner Hodges thanked staff for their work to combine the documents into one policy. She then asked if the policies were in active use and if they were used to adopt best practices. ?vlr. Anderson stated yes, the policies were in active use. Commissioner Hodges asked if an organizational chart could be created to describe the roles of the CAD Committee, CAD Project Site Committee, Salina Arts & Humanities Commission, City Commission and Arts and Humanities staff. Mr. Anderson stated that there was an organizational chart available that staff could provide to the commission. He Page2 19-0034 provided information on the representation of the CAD Conunittee. Grace Peterson, Arts Services Coordinator, further explained the representation of the project site committee. A conversation ensued beh,•een Commissioner Hodges, Ms. Peterson and Mr. Anderson regarding the makeup of the CAD Committee and the CAD Project Site Committee. Commissioner Hodges asked if the spending authority for the City l\•Ianager's office was $20,000. Michael Schrage, Oty Manager, stated yes. A conversation ensued between Mr. Schrage and Commissioner Hodges on the spending authority of departments. Commissioner Hodges asked for information on the purchasing authority change. Mr. Anderson stated it was simply to bring the purchasing authority into alignment with other departments. Karla Prickett, 914 E. Republic, provided her thoughts on the maintenance of the art pieces and the need for closer monitoring and heavier maintenance of the art pieces. She provided information on the art piece of the Water Plant and the North Ohio overpass. Mr. Anderson stated the custodial department was to be responsible for the maintenance of the art pieces but Arts and Humanities had taken on the role of monitoring the art pieces. He continued to state there was a line item included in the budget for 2019 that would cover maintenance for the art pieces. He further stated that the CAD Advisory Committee would be reviewing the maintenance list and prioritizing the maintenance to bring back to the City Commission for revie\\'. Mr. Schrage thanked staff for their diligence in reviewing maintenance as part of the proposal process for new art pieces. Commissioner Hodges asked for a copy of the assessment report and would like to be kept in the loop when the art maintenance plan was developed. Ms. Peterson provided information on the maintenance of the art pieces. l\foved by Commissioner Hoppock, seconded by Commissioner Hay, to adopt Resolution No. 19- 7657 approving an updated and restated Community Art and Design policy. Aye: (5). Nay: (0). ?\fotion carried. (7.5} Resolution No. 19-7671 authorizing the City Manager to execute Memorandums of Agreement with Dickinson County, Ellsworth County, Harvey County, Lincoln County, McPherson County, Ottawa County and Reno County for contingency and/ or overflow support for 911 services. Wayne Pruitt, Director of Emergency Communications, explained the agreements, 911 services and action options. Commissioner Hoppock asked if there had been a time when calls were rolled to other counties or other counties rolled to us. Mr. Pruitt stated Salina had not had any calls rolled to another county but have had to take on calls from Dickinson County. Commissioner Hodges asked what PSAP stood for. Mr. Pruitt stated public safety answering point. Mayor Davis asked ii another county answers the call, what would happen. Mr. Pruitt stated there was an opportunity for radio communication along with email and phone communication. Page 3 19·0035 f w Moved by Commissioner Ryan, seconded by Commissioner Hodges, to adopt Resolution No. 19· 7671 authorizing the City Manager to execute Memorandums of Agreement with Dickinson County, Ellsworth County, Harvey County, Lincoln County, McPherson County, Ottawa County and Reno County for contingency and/or overflow support for 911 services. Aye: (5). Nay: (0). Motion carried. (7.6) Authorize the City Manager to collaborate with representatives of Saline County to pursue special legislation to create statutory for a county·wide emergency communications district. Michael Schrage, City Manager, explained the request and action options. Conunissioner Hoppock provided his thoughts on the project and the request. He also asked if legislation had been approved at the state level before for something like this. Mr. Schrage stated there were similar districts such as the airport authority and library. Commissioner Hoppock asked if the legislation would go to both the house and the senate and who it would go to first. Mr. Schrage stated it would go to both the house and the senate and Andrew Manley with Saline County was currently in conversation with state representatives to see if a representative would be interested in introducing the legislation. Commissioner Ryan asked if the creation of the legislation would be of the expertise of the city and county or would it be outsourced. Mr. Schrage stated it would be written by city and county staff along with legal counsel and the state representative. Conunissioner Hay asked how soon it would be completed. Mr. Schrage stated he was not able to answer that question. Daniel Eckhoff, 2664 Highland, asked if there was a tax specifically tied to the district. Mr. Schrage stated they would be a district that would have taxing authority. Commissioner Hodges asked if this request represented a decision on what the project would look like. Mr. Schrage stated it was a funding option at this point. 19-0036 !\.•loved by Commissioner Ryan, seconded by Commissioner Hoppock, to authorize the City Manager to collaborate with representatives of Saline County to pursue special legislation to create statutory for a county-wide emergency communications district. Aye: (5). Nay: (0). Motion carried. The City Commission recessed at 5:29 p.m. for a 5 minute break. The meeting resumed at 5:35 p.m. (7.2) Resolution No. 19·7667 authorizing the Mayor to execute an agreement with SCS Engineers to perform professional engineering services for the Salina Municipal Solid Waste Landfill. Jim Teutsch, Operations Manager, explained the project, fiscal impact and action options. Mayor Davis provided a clarification to the task list within the blue sheet. :Mr. Teutsch thanked him for the clarification. Conunissioner Hodges asked when the waste and recycling characterization study would be available. ~k Teutsch stated sometime in 2020. 19-0037 Moved by Commissioner Hay, seconded by Commissioner Hoppock, to adopt Resolution No. 19- 7667 authorizing the Mayor to execute an agreement with SCS Engineers to pe~form professional Page4 19-0038 engineering services for the Salina Municipal Solid Waste Landfill. A)1e: (5). Nay: (0). Motion carried. (7.7) Resolution No. 19-7672 authorizing and providing for construction of certain improvements relating to the City's Solid Waste Facility as described in the Landfill Cell 20 project; and authorizing the issuance of Temporary Notes and/or General Obligation Bonds of the city to pay the costs thereof. Debbie Pack, Director of Finance & Administration, explained the request, project, fiscal impact and action options. Conunissioner Hay asked what the balance was in the solid waste fund. Ms. Pack stated approximately 5890,000 . .tv1oved by Commissioner Ryan, seconded by Commissioner Hodges, to adopt Resolution No. 19- 7672 authorizing and providing for construction of certain improvements relating to the City's Solid Waste Facility as described in the Landfill Cell 20 project; and authorizing the issuance of Temporary Notes and/or General Obligation Bonds of the city to pay the costs thereof. Aye: (5). Nay: (0). ?\fotion carried. (7.8) Award contract for Municipal Solid Waste Landfill Facility Cell 20 Construction, Project No. 80019. Dan Stack, City Engineer, explained the project, fiscal impact and action options. Commissioner Hoppock asked what the amount for the bonds was. Debbie Pack, Director of Finance & Administration, stated the request was for the budgeted amount and staff would only issue bonds to cover the costs of the project. Commissioner Ryan asked why Cell 3, 4, and 5 were still open. Mr. Stack stated the cells remained open so they would continue to be used. Commissioner Hay asked why we were opening a new cell instead of using the existing cells. l'vlr. Stack stated once cells were built next to the existing cells then the existing cells could be added to. A conversation ensued between the City Commission and Mr. Stack regarding the cells. Commissioner Hodges asked if a soil deficit would be a long term problem. Mr. Stack stated it was a large deficit and at some point there would be a need for additional soil from another location to fill the deficit. 19-0039 Moved by Commissioner Hoppock, seconded by Commissioner Hodges, to award contract for lv1unicipal Solid Waste Landfill Facility Cell 20 Construction, Project No. 80019 to Unruh Excavating, LLC, in the amount of 51,645,289.65 with a 5% construction contingency of 582,264.48. Aye: (5). Nay: (0). Motion carried. (7.9) Consideration of recommendations regarding the sanitation plan. Jim Kowach, Director of Public Works, explained the recommendations and action options. Commissioner Ryan asked if staff thought they could handle 2,000 customers for the subscription program. Mr. Kowach stated at 510 a month the number of customers would have to be at least 2,000 customers and if there were additional customers there would be an overhead capital cost for an additional truck and staff person. Page 5 A conversation ensued between Mr. Kowach and the City Commission regarding the recommendations provided. Commissioner Hoppock asked what the tonnage was that was collected for the PILOT program versus the drive-thru recycling center. Jim Teutsch, Operations Manager, stated the PILOT program collected 150 tons annually and. the drive-thru facility had collected 300 tons so far. Commissioner Hay provided his thoughts on the expanded subscription recycling program . . Mayor Davis asked how much was collected by Images Recycling. Mr. Teutsch stated approximately 900to1000 tons annually. Commissioner Hodges asked if the current packer truck would be used for recycling collection. lvlr. Teutsch stated yes. Michael Schrage, City Manager, explained the reason why the question was broken out and staffs hope was to gather an affirmative direction from the City Commission tonight. Commissioner Ryan provided his thoughts on mandatory recycling. Commissioner Hoppock also provided his thoughts on mandatory recycling. Commissioner Hay asked if the current subscription would have to have 2,000 customers to break even. Mr. Teutsch stated the maximum customers for the current setup would be 2,000 customers. Commissioner Hodges stated her concerns for alley trash collection, recycling collection and yard waste collection. Commissioner Hodges asked if staff ever thought we should be in the business of collecting trash. Mr. Teutsch stated yes, the citizens' vote for the service every month by paying their bill. He continued to provide information on sanitation collection. Commissioner Hodges asked if there had been any thoughts about continuing universal curb side recycling with the current trucks we have along with the repurposing refuse containers for recycling purposes. Mr. Teutsch stated there would be an increase in the number of trucks on the road from l.vm trucks to five trucks, increasing the number of crews on the street and provided his thoughts on the option. Mr. Schrage stated part of the dilemma we've been facing all along was trying to create a balance for providing the services at a competitive rate. He continued to note the monthly rates of the sanitation services available to citizens in the community. A conversation ensued between the City Commission, Mr. Scluage and Mr. Teutsch regarding automated trash pickup, the recycling options and the sanitation services available by the competitors. Commissioner Hoppock thanked the individuals involved in all the work on this item. He continued to provide his thoughts on the options and asked if we turned over the basic trash colJection to private haulers would that allow us to take the time to be proactive to make recycling collection more beneficial. Mayor Davis stated he had not lived in a city that did not collect the trash and provided his thoughts on the options. Mr. Teutsch and Mr. Scluage provided information on franchising out trash service and the Page6 z fu 19-0041 collection fees. Ivlr. Kowach provided information on the subscription recycling program. A conversation ensued between the Commissioners and Ivir. Kowach on the subscription recycling program. Joan Ratzlaff, Salina, provided information from the strategic plan and her thoughts on the recommendations included in the agenda item and the need for education and outreach to citizens in the community. She provided information to the City Commission on grant opportunities available. ?\•loved by Commissioner Hodges, seconded by Commissioner Ryan, to continue alley collection in the sanitation plan. Aye: (5). Nay: (0). Motion carried. ?-.foved by Commissioner Ryan, seconded by Commissioner Hay, to concur with City staff and the Solid Waste l\fanagement Committee to provide 95-gallon containers for standard refuse service. Aye: (5). Nay: (0). r-.. Iotion carried. A conversation ensued between the City Commission, Mr. Schrage and Mr. Teutsch regarding the cart size availability for sanitation collection. 19-0042 l\foved by Commissioner Hoppock, seconded by Commissioner Ryan, to no universal community wide recycling at this time. Aye: (4). Nay: (1) Hodges. Motion carried. !vlr. Kowach stated the current subscription program could continue until a future date. 19-0043 .ivloved by Commissioner Hay, seconded by Commissioner Hodges, to have City staff continue to pursue the details of a subscription of curbside recycling program within 45 days. Aye: (5). Nay: (0). !\•lotion carried. 19-0044 l'vloved by Commissioner Hodges, seconded by Commissioner Hay, to have City staff continue to pursue the details of a continuation of yard waste collection with a study session soon. Aye: (5). Nay: (0). i'vlotion carried. Mr. Kowach stated it would be semi-automated allowing for placement of carts, bags or bundles. Commissioner Hodges asked for information on the costs of collection of yard waste to be provided in the study session. DEVELOPMENT BUSINESS None. OTHER BUSINESS 1\'lichael Schrage, City !'vlanager, stated he had distributed additional information to the City Commission upon the request of Lisa Graham who was in attendance at the meeting today and planned to present to the City Commission on Febi-uary 25, 2019. Mayor Davis stated the City Commission had legitimate concerns on the budgetary aspects of recycling and need to task ourselves with thinking about recycling and what we want and what it means to us. ADJOURNMENT Page 7 19-0045 Moved by Commissioner Hodges, seconded by Commissioner Hay, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 7:22 p.m. 11'1 "' [SEAL] ATIEST: ~LU~ Shandi Wicks, CMC, City Clerk ~.~r' Trent W. Davis, M.D., Mayor Page 8 ~. "' "' (Published in the Salina Journal on February~ and 1.1. , 2019) RESOLUTION N0.19-7672 A RESOLUTION PROVIDING FOR THE ISSUANCE OF TEMPORARY NOTES AJ""lD/OR GENERAL OBLIGATION BONDS OF THE CITY OF SALINA, KANSAS TO FINANCE IMPROVEMENTS TO THE CITY'S SOLID \VASTE FACILITY. \VHEREAS, the City of Salina, Kansas (the "City:i), collects and dispenses of solid waste as a municipal function under the laws of the State of Kansas1 including K.S.A. 12-2101 et seq. (the "Act"); and \VHEREAS, the governing body of the City hereby finds and determines that it is necessary to make improvements to the City's solid waste facility, including construction of a leachate pond, gravity leachate collection system and manholes, leachate pumping system and municipal solid waste landfill cell, including access roadways, excavation, installation of low permeability soil liners, installing aggregate, and leachate collection/conveyance piping, pumping system, and appurtenances (the "Project") and that the City has insufficient funds to pay for the entire cost of the Project at the present time; and \VHEREAS, the City hereby finds and determines that it is necessary for the City to issue its temporary notes and/or general obligation bonds to pay the cost of the Project. N0\\1, THEREFORE, BE IT RESOLVED BY THE GOVERi~ING BODY OF THE CITY OF SALINA, KANSAS: Section 1. It is hereby deemed and declared to be necessary for the City to make improvements to the City's solid waste facility as described above. Section 2. It is necessary for the City to issue its general obligation bonds and/or temporary notes to the pay the cost of the Project in the amount of $2,315,000 plus the costs of issuance and interest on any temporary financing under the authority of the Act. Section 3. Before issuing general obligation bonds and/or temporary notes of the City, this Resolution shall be published once each week for two consecutive weeks in the official City newspaper. The general obligation bonds and/or temporary notes may be issued unless a petition in opposition thereto, fiJed by not less than 5% of the electors of the City, is filed with the County Election Officer of Saline County within 30 days following the second publication of this Resolution. If such petition is filed, the governing body of the City shall submit the question of the issuance of said general obligation bonds and/or temporary notes for the Project to the electors of the City at an election called for such purpose as provided in the Act. If no sufficient petition is filed with the County Election Officer of Saline County within the period of time hereinbefore stated, then the governing body of the City shall proceed with the issuance of general obligation bonds and/or emporary notes of the City for th~ Project. Section 4. The City expects to make capital expenditures in connection with the Project and intends to reimburse itself for such expenditures with the proceeds of general obligation bonds and/or temporary notes in an amount not to exceed $2,315,000, plus associated financing costs and costs of issuance. Any general obligation bonds and/or temporary notes issued under the authority z ... w i C/I I of this Resolution may be used to reimburse expenditures made on or after the date that is 60 days before the date of adoption of this Resolution pursuant to U.S. Treasury Regulation §1.150-2. Section 5. This Resolution shall take effect and be in full force immediately after its adoption by the governing body of the City. ADOPTED by the governing body of the City of Salina, Kansas, on the 11th of February, 2019. (Seal) ~.~rl Trent W. Davis, M.D., Mayor ATIEST: Shandi Wicks, CMC, City Clerk Publisher's Affidavit 1-' __ Chri_._s..::ty_Fi..:1:.:.;n::.;k ___ ~, being duly sworn declare that 1 am a Legal Coordinator of TIIE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for five consecutive years prior to first publication of attached notice, and that the attached Resolution 19-7672 notice has been correctly published in the entire issues of said newspaper · two times, towit-once each week fo._L ___ --Itww;io"------ consecutive weeks, the first publication being given in the issue of February lS, 2019 ChM.bm ~L - Subscribed and sworn to befO:Dl~ this ;;J 5'f5- day of J-:.k,_~ A.O. 20 ..lJ_ "ff1J t:M,~ Uu1dJ~ Notary Public Printer's Fee S513.00 CERTIFICATE OF NO PROTEST STATE OF KANSAS ) ) ss: COUNTY OF SALINE ) The undersigned, Clerk of the City of Salina, Kansas (the "City"), does hereby certify that the governing body of the City duly adopted Resolution No. 19-7672, on February 11, 2019, declaring it necessary to make improvements to the City's solid waste facility at an estimated cost of $2,315,000 plus costs of issuance and interest on any temporary financing, and to issue general obligation bonds and/or temporary notes, in an amount not to exceed $2,315 ,000 plus costs of issuance and interest on any temporary financing in order to pay the costs of the improvements and financing costs, all pursuant to K.S.A. 12-2101 et seq. (the "Act"). The Clerk does hereby certify that said Resolution was published once a week for two consecutive weeks (February 15, 2019 and February 22, 2019) in The Salina Journal, the official City newspaper; that more than thirty (30) days have elapsed from the date of the last said publication; and that there has been no sufficient written protest filed in my office against said Resolution, as provided in the Act. l::.."-: ..;· ... WITNESS my hand and official seal on Ar \ ' ) ~~ Clerk Comminlon Action# CITY OF SALINA, KANSAS REGULAR MEETING OFTBE BOARD OF COMMISSIONERS Febnuuy 11, 2002 4:00p.m. The City Commission convened at 3:3 0 p.m. for a Citizen Open Forum. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room l 07, City-County Building. A roll call was taken followed by the Pledge of Allegiance and a moment of silence. There were present: Mayor Kristin M Seaton. Chairman presiding Commissioner Deborah P. Divine Commissioner Don Heath Commissioner Alan E. Jilka Commissioner Monte D. Shadwick comprising a quorum of the Board, also present: Absent: Greg Bengtson, City Attorney Dennis M. Kissinger, City Manager Lieu Ann Nicola, City CJeik None. CITIZEN FORUM None. AWARDS· PROCLAMATIONS (4.1) The week of February 1'79' through the 23111 as "National Engineers Week" in the City of Salina. The proclsmation was read by Rob Mahan, President of the Smoky Valley Chapter of Kansas Society of Professional .Engineers and civil engineer with Bucher, Willis and Ratliff Corporation. PUBUC BEARINGS AND ITEMS SCHEDULED FORA CERTAIN TIME (5.1) Public hearing on Application #CUOl-11, filed by Rusty Leister, requesting a Conditional Use Permit to allow a drinking establishment in the C-4 District on propr.rty addressed as 117 N. Santa Fe, legally descn'bed as the South half of Lot 100 on Santa Fe Avenue in the Original Town of Salina. The public hearing was opened. Commissioner Shadwick excused himself ftom the meeting due to conflict of interest. Dean Andrew, Director of Planning and Community Development. explained the request. City Commission alternatives, events taken place to date, and the Planning Commission's recommendation. A discussion followed with Commissioner Divine, City Manager Dennis Kissinger, and Mr. Andrew regarding conditions placed on the property and safety concerns. Ken Wassennan, 213 S. Santa Fe, explained modifications made to the plans and requested the application be returned to the Planning Commission for further consideration. 02-3181 Moved by C-ommissioner Divine, sccocded by Commiaioncr Heath, to return Application #CUOl-11 to the Planning Commission for1\Jrtherconsidention and to be more specific on conditions placed. Aye: (4). Nay: (0). Abstained: (1) Shadwick. Motion canied. - Mr. Kissinger responded to Commissioner Iillca's question regarding the Conditional Use Pennit process. Commissioner Shadwick returned to the meeting. CONSENT AGENDA (6.1) Approve the minutes ofFcbrumy 4, 2002. (6.2) Resolution No. 02-5812. authorizing the public sale of approximately $4,865,000 principal amount General Obligation Tcmponuy Notes, Series 2002-1. (6.3) Approval of the 2002 Parlcs and Recreation Capital Improvement Program. Steve Snyder, Director of Parlcs and Recreation, summarized the Capital Improvement Program. 02-3182 Moved by Commissioner Divine, seconded by Commissioner Shadwick, to approve the consent agenda as presented. Aye: (S). Nay: (0). Motion carried. DEVELOPMENT BUSINESS None. ADMINISTRATION (8.1) Second reading Ordinance No. 02-10072 vacating Reserve "A" in the Riffel Addition. Mayor Seaton clarified that Ordinance No. 02-10072 was passed on first reading on February 4, 2002., no comments have been received, and the property owner signed and recorded an affidavit with the Register of Deeds acknowledging and consenting to the Joss of the public street access. 02-3183 Moved by Commissioner Jilka, seconded by Commissioner Shadwick, to adopt Ordinance No. 02-10072. on second reading. A roll call vote was taken. Aye: (S) Divine, Heath, Jilka, Shadwick, Seaton. Nay: (0). Motion carried. (8.2) First reading Ordinance No. 02-10071 designating certain streets as main trafficways and designating certain additional streets as trafficway connections. Dennis Kissinger, City Manager, summarized the ordinance and changes. Mr. Kissinger also responded to Commissioner Divine's question regarding the removal of Bishop and College Streets. 02-3184 Moved by Commissioner Shadwick, seconded by Commissioner Divine, to pass Ordinance No. 01-10071 on first reading. Aye: (S). Nay: (O). Motion carried. (83) Resolution No. 02-5811 initiating proceedings for main trafficway and main trafficway connection improvements involving North Ohio Street and related streets. Rodney~ Director of Finance and Administration, explained the proceedings. -02-3185 Moved by Commission;rHcath, seconded by Commissioner Jilkll, to adopt Resolution No. 02·,811. Aye:<'>· Nay: (0). Motion carried. (SA) City Commission direction to staff regarding the restaurant smoking ban issue. Dennis Kissinger, City Manager, summarized the request and City Commission options. He also responded to Commissioner Shadwick's question regarding smoking on public property. Commission Actlonl - Commissioner Shadwid:: thanked the coalition for their work, but expressed opposition toward considering a smoke-free ordinance. Also thanking the coalition, each remaining Commissioner gave their reasons for staffs continued work on the matter. 02-318 Moved by Commi£sioner Divine, seconded by Commissioner Heath, to direct City Staff to compldc the legal and management resc:mth necessary to prepare an issues and options report and draft a smoke-free restaurant ordinmcc for farther discussion and consideration. Aye: ( 4). Nay: (1) Shadwick. Motion carried. (8.5) Preliminary consideration of two separate property transactions involving surplus city property at Belmont and Ohio, and a parting lot property at Santa Fe ml Ash in downtown Salina. Dermis Kissinger, City Manager, explained the transactions. Mr. Kissinger and Shawn O'Leary, Director of Engineering and General Services, responded to Commissioner Heath's and Commissioner Divine's questions regarding property ownership and estimated cost oflighting. 02-318 Moved by Commissioner Divine, seconded by Commissioner Tillca, to approve both transactions in concept, and authorize the City Manager and City Attorney to negotiate appropriate agreements with Sunflower Bank and the Chmnber of Commerce. (8.6) Approve the remaining 2002 Vehicle and Equipment, Phase 1 purchases. 1ason Gage, Assistant City Manager, explained the purchases. Moved by Commissioner Shadwick, seconded by Commissioner Divine, to approve the purchase of the remaining 2002 Vehicle and Equipment, Phase I purchases. Aye: (S). Nay: (0). Motion carried. 02-318 (8.7) Moved by Commissioner Heath, seconded by Commissioner Ttlka, to recess into executive session for 30 minutes for preliminary discussion relating to the acquisition of real estate for the reason that public discussion of the matter cou1d jeopardi7.e the ability of the City to acquire the real estate; and reconvene at S:32 p.m. Aye: (S). Nay: (0). Motion carried. The City Commission n:ccsscd into executive session at S:02 p.m. and reconvened at 5:32 p.m. 02-31 Moved by Commissioner 1ilka, seconded by Commissioner Divine, that the City Commission n:convcnc into the cmrcnt executive session for an additional 15 minutes. Aye: (S). Nay: (0). Motion carried. The City Commission recessed into executive session at 5:32 p.m. and reconvened at 5:47 p.m. No action was taken. OTHER BUSINESS None. ADJOURNMENT 02-3191 Moved by Commissioner Shadwick, seconded by Commissioner Heath, that the Regular Meeting of the Board of Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjoumed at 5:47 p.m. [SEAL] A1TEST: ~ Lieu Ann Nicola, City Clerk Commission Ac:tlonl - CITY OF SALINA, KANSAS REGULAR MEETING OF 1HE BOARD OF COMMISSIONERS February 25, 2002 4:00p.m. The City Commission convened at 3:30 p.m. for a Citizen Open Forum. The City Commission also met in a Study s=on after the rcgaJar meeting for a City/USD 305 Programs Briefing. The Regular Meeting of the Board ofCommissioncn was called to order at 4:00 p.m. in Room 107, City-County Building. A roll call was taken followed by the Pledge of Allegiance and a moment of silence. There were present: Mayor Kristin M. Seaton, Chainnan presiding Commissioner Deborah P. Divine Commissioner Don Heath Commissioner Alan E. Jilka Commissioner Monte D. Shadwick comprising a quorum of the Board, also present: Absent: Greg Bengtson, City Attorney Dennis M. Kissinger, City Manager Lieu Ann Nicola, City Clerk None. CITIZEN FORUM None. A'WARDS-PROCLAMA110NS (4.1) The day of March I, 2002 as "Read Across America" day in the City of Salina. The proclamation was read by Pat Brcckunitch, Principal of Sacred Heart Orade School. PUBLIC BEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSENT AGENDA (6.1) Approve the minutes ofFebnwy 11,2002. (6.2} Resolution No. 02-5813 authorizing a license agreement with DVACK for construction and maintenance improvements in the public right-of-way on Walnut and Santa Fe Avenue. allowing the covered walkway and a sign to be mounted to the walkway structure. 02-3192 Moved by Commissioner Tillca, seconded by Commissioner Divine, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. DEVELOPMENT BUSINESS None. ADMINISTRATION (8.1) Second reading Ordinance No. 02-10071 designating certain streets as main trafficways and designating certain additional streets u trafficway connections. Mayor Seaton clarified that Ordinance No. 02-10071 was passed on first reading on Februmy 11, 2002 and no comments have been received. 02-3193 Moved by Commissioner Shadwick, seconded by Commissioner Jillca, to adopt Ordiance No. 02-10071 on second reading. A roll call vot.cwas taJcm. Aye: (S) Divine, Heath, Jilka, Shadwick, Seaton. Nay: (0). Motion carried. (8.2) First reading Ordinance No. 02-10070 amending Chapter 39, Article IV and V of the Salina Code pertaining to trees and shrubs. Steve Snyder, Director ofParb and Recreation, explained the proposed changes. He aJso responded to Mayor Seaton 's question regarding public education. A disc:ussion followed with Commissioner Heath, Mayor Seaton. City Manager Dennis Kissinger, and Mr. Snyder regarding required permits and employee staffing. 02-31 Moved by Commissioner Divine, seconded by Commissioner Heath, to pass Ordinance No. 02-10070 on first reading. Aye: (5). Nay: (O). Motion carried. (8.3) Resolution No. 02-5810 authorizing an Extension Agreement and Amendment No. Three to a contract with Salina Community Access Television extending the agreement until Febnuuy 3, 2007. Dennis Kissinger, City Manager, explained the existing agra:ment and prior amcnfmmts. Commissioner Divine complimented Salina Community Access on their efforts. 02-3195 Moved by O>mmimoner Heath, seconded by Commissioner Divine, to adopt Resolution No. 02-5810. Aye: (5). Nay: (0). Motion carried. (8.4) Resolution No. 02-5814 appointing members to various boards and commissiom. Mayor Seaton read the appointments. 02-31 Moved by Commissioner Shadwick, seconded by Commissioner Jilka, to adopt Resolution No. 02-5814. Aye: (5). Nay: (0). Motion c:anied. (8.5) Request from the North Salina Pastors Association (N.S.P .A.) for a waiver of the regular rental ch8rgcs at the Bicentennial Center for a 24-hour Prayer Vigil sponsored by the N.S.P .A. Dennis Kissinger, City Manager, explained the request, the BicentenniaJ Center's intended use, and the rental agreement charge. Greg Bengtson. City Attorney, explained the legal issue raised by the request Mr. Kissinger responded to Mayor Seaton's question regarding communications with the requestor. Jeanette Curtis. North Salina Pastors Association, explained reasons to grant the request. A discussion followed between Commissioner Shadwick: and Mr. Kissinger reganling the waiver of fees for the city·wide event for honoring police officers ml fire fighters. 02-319 Moved by Commissioner Shadwick, seconded by Commissioner Jilka, to deny the fee waiver request for legal reasons. Aye: (5). Nay: (0). Motion carried. OTHER BUSINESS None. ADJOURNMENT 02-~19 Moved by Commissioner Tilka, seconded by Commissioner Divine, that the Regular Meeting of the Board ofCommiufonen: be adjourned. Aye: (5). Nay: (0). Motion camed. The meeting adjourned at 4:32 p.m. [SEAL) A1TEST: Lieu Ann Nicola. City Clerk (Published in the Salina Journal on February , 2002) ORDINANCE NUMBER 02-10071 AN ORDINANCE DF.SIGNATING CERTAIN STREETS AS MAIN TRAF.FICWAYS PURSUANT TO K.S.A. 12-685 AND DESIGNATING CERTAIN ADDmONAL STREETS AS TRAFFICWAY CONNECllONS PURSUANT TO K.S.A.12-686, AND REPEALING ORDINANCE NUMBER 93-9562. BE IT ORDAINED by the Governing Body of the City of Salina, Kansas: Sectfog 1. The primary function of the streets dcscnoed in 1his section is hereby found to be the movement of through traffic between areas of concentrated activity within the city or between such arcu within the city and traffic facilities outside the city pCiforming the function of a major trafficway, based upon the following: A. ASH STREET is a major collector street running east from Broadway Boulevard to Ohio Street and is a principal street carrying east/west traffic through the center portion of the City. B. BELMONI' BOULEVARD is a major arterial street running southwest from Ohio Street to N°mth Street and is a principal s1rcet carrying southwest/northeast traffic through the southeast portion of the City. C. BROADWAY BOULEY ARD is a major arterial street running west and south from North Ninth Street and Pacific Avenue and is a principal street carrying notth/south traffic on the west side of the City. D. CENTENNIAL ROAD is a major arterial street running north from Watcrwell Road to West Crawford Avenue and is a principal street carrying north/south traffic through the west portion oflhc City. E. CLOUD STREET is a major collector street running cast from Centennial Road to the flood levee system cast of Ohio Street and is a principal street carrying cast/west traffic through the south-central portion of the City. F. COUNIRY CLUB ROAD is a major arterial street running west from the east city limit line to Marymount Road and is a principal street canying cast/west traffic through the east-central portion of the City. G. CRAWFORD A VENUE is a major arterial street running cast from one of the 1-135 interchanges into the City, to the east City limits and is a principal street carrying cast/west traffic through the central portion of the City. IL IR.ON A VENUE is a major arterial strect c:anying traffic between the City's central and castcm commen:ial districts and is a principal street canying east/west traffic through the nor1h-ccntra1 portion of the City. L MAGNOUA ROAD is a major arterial street ronning cast from the west city limits to the cast city limits and is a principal street carrying cast/west traffic through the south portion of the City. 1. MARKLEY ROAD is a major collector street nmning south from Crawford to Magnolia Road and is a principal street canying northfsouth traffic through the cast portion of the City. K. MARYMOUNT ROAD is a major mterial street nmning north from Cloud Street to Countiy Club Road and is a principal street canying north/south traffic through the cast portion of the City. L. NINTII STREET is a major arterial street from the north city limits, north of Interstate 70 to the south city limita near Watcrwell Road canying traffic between the City's north central and southern commercial districts and is a principal street cmying north/south traffic through the central portion of the City. M. NORTI:I STREET is a major arterial street running from the west city limits to the east city limits and is a principal street canying east/west traffic through the north portion of the City. N. omo STREET is a major artc:riaI street running south from one of the Interstate 70 interchanges to the south city limits and is the principal street canying north/south traffic on the east-central side of the City. O. PACIFIC A VENUE is a major arterial street running east from Nmth Street to the east city limits and is a priucipal street carrying east/west traffic through the north portion of the City. P. REPUBUC AVENUE is a major collector street running east from Centennial Road to the east city limit near the flood levee system and is a principal street canying east/west traffic through the south portion of the City. Q. SANTA FE AVENUE is a major arterial street running north from Claflin to Otis and is a principal street canying north/south traffic through the central portion of the City. R. SCHILLING ROAD is a major arterial street ninning west from Ohio Street to AmoJd Avenue in the Airport Industrial Arca and is a principal street carrying east/west traffic through the south portion of the City. S. SOUTH STREET is a major collector street running cast from Broadway Boulevard to Fourth Street and is a principal street carrying cast/west traffic through the central portion of the City. T. STATE STREET is a major arterial street running cast fi'om Interstate 135 to the central business district and is a principal street carrying cast/west traffic through the north portion of the City. U. WATER WELL ROAD is a major arterial street running west from Nmth Street through the south end of a major industrial area to Airport Road, and is a principal street carrying cast and west traffic between major industrial commercial and Interstate 135 interchanges. Section 2. That Ash Street, Belmont BouJevanl, Broadway Boulevard. Centennial Road, Cloud Street, Country Club Road, Crawford Avenue, Iron Avenue, Magnolia Road, Markley Road, Mmymount Road, Ninth Street, North Street, Ohio Street, Pacific Avenue, Republic Avenue, Santa Fe Avenue, Schilling Road, South Street, State Street, and Water Well Road arc hereby designated and established as "main trafficways" pursuant to K.S.A. 12-685. Section 3. To provide adequate connections with the Ohio Street main trafficway in order to relieve traffic congettion and mitigate traffic safety issues related to the construction of the North Ohio Rllllroad Overpass and related improvements it is necessary to establish the following as trafficway connections. A. VAN HORNE STREET -At and near its connection with North Ohio Street. B. YORK STREET-At and near its connection with North Ohio Street. C. UNNAMED FRONTAGE ROAD -To be established on funner North Ohio Street right-of-way to connect area streets with realigned North Ohio StreeL Section 4. That Ordinance Number 93-9562 is hereby repealed. Section S. That this ordinance shall be in full force and effect from and after its adoption and publication once in the official city newspaper. Lieu Ann Nicola, City Clerk Introduced: February 11, 2002 Passed: February 25, 2002 ,.. ----..... ---- I ' Affidavit of. Publication Ord. No. oz.10071 l;ollowlng Is a true9lld correct copy of ____________________________ _ together with proof or publlcatlon or the aame. .... AFFIDAVIT '·-----'Kim=;;;;.:;N..:.;orwo:::.:.:=od::;;;;. ___ , being duly awom, declare that I am the Advertising Manager ol THE SAUNA JOURNAL, a dally new11paper pub!lahed at Sallna, lerrupted!y published for five consecutive years prior to first publlcallon ol attached notice, and that the attached __ ·_. Ord. No. 02-10071 has been correctly published In said newspaper __ 1 __ times, _______ the first publlcallon being glyen lnthel11sueof~2 ,19 ~ ~r&M>cJ Subscribed and awom to before me. thla -1-I _~_.f-__ doyor~•L"~lt& ""-~ c~"""°"" CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS March 4, 2019 4:00p.m. The City Commission convened at 2:30 p.m. for Fire Department Performance Analysis at Fire Station No. 3 at 2633 Belmont and at 3:45 p.m. for Citizens Forum at City-County Building, Room 107. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Trent W. Davis, M.D. (presiding), Commissioners Joe Hay, Jr., Melissa Rose Hodges, Mike Hoppock, and Karl Ryan. Also present: Michael Schrage, City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Clerk. AWARDS AND PROCLAMATIONS None. CITIZENS FORUM Lisa Graham, 1310 E. North Street, provided information regarding a case of unequal treatment by Brad Nelson, Police Chief and Christina Trocheck, City Prosecutor. Michael Schrage, City Manager, stated he had reviewed the incidents with Chief Nelson and the documentation provided by Ms. Graham. He continued to state that staff was not able to come to same the conclusion as Ms. Graham. Mayor Davis asked if there were certain remedies that could be suggested to Ms. Graham or further action that could be taken. Greg Bengtson, City Attorney, stated he was not aware of any offhand. Mr. Schrage agreed. Ms. Graham continued to provide information on the incidents. Mayor Davis asked if Ms. Graham talking with the city prosecutor was an option. Mr. Schrage stated he could try to facilitate that conversation. Commissioner Hodges provided her thoughts on the matter. Mayor Davis thanked Ms. Graham for coming to the commission and stated that Mr. Schrage would be in contact with her. Norman Manne!, Salina, provided his thoughts on the conduct of law enforcement, the need for additional training of the officers and provided information on an article in the newspaper relating to law enforcement. Michael Schrage, City Manager, asked Mr. Manne! if he could provide him with information on the date of the article in the newspaper. PuBuc HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSfu'\'T AGENDA (6.1) Approve the minutes of February 25, 2019. Pagel In "' z 0.. w ~ j '!< j 19-0008 (6.2) Approve Resolution No. 19-7681 appointing members to the Accessibility Advisory Board, Community Art and Design Advisory Corrunittee and Tree Advisory Board. (6.3) Approve Resolution No. 19-7680 authorizing the Mayor to execute a Vault Closure Agreement allowing for closure of an underground vault in the public right-of-way located at 144, 146and148 S. Santa Fe Avenue with the Boyd E. Smith Trust. (6.4) Award contract for the 2019 Chip Seal, Project No. 90019, to Circle C Paving and Construction, LLC of Goddard, Kansas, in the amount of 5130,649.05, with a 59,350.95 contingency (7.1 %). Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to approve the consent agenda as presented. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION (7.1) Resolu~on No. 19-7683 authorizing the acceptance of a grant award from the Federal Edward Byrne Memorial Justice Assistance Grant Program as a sub-grantee of the State of Kansas under the Kansas Governor's Grants Program for upgrade of the Computer Aided Dispatch (CAD); authorizing the use of 911 Funds to assist in the funding for any remaining costs associated with the upgrade; and approving an amendment to the City's current agreement with Tyler Technologies, Inc. for the CAD upgrade. Wayne Pruitt, Communications Supervisor, explained the grant program, grant award, the agreement, fiscal impact and action options . • Commissioner Hodges complemented staff on their negotiation skills. Commissioner Hodges asked if the fire and EMS software would work with the CAD program. l'vfr. Pruitt stated the software purchase included the necessary components to allow the programs to work together. Commissioner Hay asked if there was annual maintenance of the system. Mr. Pruitt stated the cost of the annual maintenance was split out between the city and the county. Commissioner Hay asked if the software upgrade would benefit the backup system. Mr. Pruitt stated the backup computers would be upgraded as well. Mayor Davis asked if this item and the anticipated upgrade to the conununity wide radio system were tied together. Mr. Pruitt stated the radio system and the CAD system were two separate systems. Commissioner Hoppock asked what else was paid out of the 911 funds. Mr. Pruitt stated there was an annual maintenance fee for software from the State of Kansas, CAD, mobile bills, 24-hour voice recorder, and copy machine to name a few. 19-0059 Moved by Commissioner Hay, seconded by Commissioner Hodges, to adopt Resolution No. 19- 7683 authorizing the acceptance of a grant award from the Federal Edward Byrne Memorial Justice Assistance Grant Program as a sub-grantee of the State of Kansas under the Kansas Governor's Grants Program for upgrade of the Computer Aided Dispatch (CAD); authorizing the use of 911 Funds to assist in the funding for any remaining costs associated with the upgrade; and approving an amendment to the City's current agreement with Tyler Technologies, Inc. for the CAD upgrade amending the use of 911 funds in the amount not to exceed $33,??0 in Section 1 and the current Page 2 z Q. w agreement with Tyler Technologies the amount not to exceed $106,600 in Section 2. Aye: (5). Nay: (0). Motion carried. (7.2) Resolution No. 19-7677 authorizing and providing for the removal and replacement of the North Ninth Street Bridge and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Debbie Pack, Director of Finance & Administration, explained the project, request, fiscal impact and action options. Commissioner Hoppock asked if the project was for both sides of the bridge or one side. Ms. Pack stated one side. Commissioner Hoppock asked for information on the point scale of the bridges and when would the bridge be not drivable. Dan Stack, City Engineer, stated once a bridge was opened it was automatically a 7 and could continue to downgrade. He continued to state once a bridge was downgraded to a 2 or lov·:er, the bridge could be closed. Jim Kowach, Director of Public Works, stated a bridge listed as a 4 on the point system was safe to the public but was posted at 20 tons. Commissioner Hodges asked if a 20 ton load was equal to most semis. Mr. Kowach stated the truckers were aware of how the ton limit affected them. Commissioner Hodges asked if we get many permits for an oversize load on a bridge. Mr. Stack stated staff gets a half a dozen or less a year for different areas in town. Commissioner Hodges asked if preventative maintenance was performed on bridges prior to the need for replacement and what the typical life span was on a bridge. Mr. Stack stated most bridges were built with less load limits requirements in the 1930's to 1950's than today. He continued to state there were options for rehabilitation but it depended on the structure of the bridge. Michael Schrage, City Manager, stated the inspection schedule was a proactive step and staff had worked to determine if replacement of the bridge was the best option. Commissioner Hodges asked if the authorization was required to bond the project. Ms. Pack stated due to the ordinance we were able to designate the area as a main trafficway. Norman Mannel, Salina, provided his thoughts on the amount of weight a truck can hold. 19-0060 Moved by Commissioner Ryan, seconded by Commissioner Hay, to adopt Resolution No. 19-7677 authorizing and providing for the removal and replacement of the North Ninth Street Bridge and authorizing the issuance of Temporary Notes and/or General Obligation Bonds of the City to pay the costs thereof. Aye: (5). Nay: (0). Motion carried. (7.3) Approve 2019 Vehicles & Equipment Purchases. Debbie Pack, Director of Finance & Administration, explained the bids received, fiscal impact and action options. Commissioner Hodges asked what was included in the total of up to $1,037,040 on the 2019 Sub-CIP sheet. Ms. Pack stated the items highlighted in yellow were moving forward; the items highlighted in green were the three (3) one ton units to be bid on March 15th. She further stated the 5 Ton dump truck would be moved to 2020 and the 6 foot mower would be rebid and the 10 foot mower and 300 gallon turf sprayer were under further review. Page 3 z Q. 111 Commissioner Hodges stated the sales tax fund balances and asked if there was some concern with the fund balance being under 5750,000. Michael Schrage, City Manager, stated staff was mindful of the target fund balance and the agenda items coming before the Oty Commission. Commissioner Hodges asked where the 1 % increase in the sales tax fund came from. Ms. Pack stated it was just being conservative on items moving forward. Mr. Schrage stated staff's intent was to look at the most recent information and provide the most updated information when items were presented to the commission. Commissioner Hay asked if we were required to take the low bid. :Ms. Pack stated we typically take the low bid unless it does not meet our specifications. Mayor Davis asked if there was a small percentage amount could the bid be kept local. Mr. Schrage stated we have not adopted a local preference policy. He further provided information from the purchasing policy relating to the bid award. Mayor Davis asked if the bids matched penny for penny what would happen . .?vh. Schrage stated it would be up to the Governing Body to determine what the outcome would be. Mayor Davis asked if a low bid did not meet specifications at what point would the bid be rejected instead of listed as not meeting specifications. Mr. Schrage stated there was an obligation to report all bids. He further stated the bids probably do not need to be listed as low bidder on the spreadsheet. Mr. Schrage asked staff to provide information on the entire process of specifications for bidding of vehicles and equipment. Jim Teutsch, Operations Manager, provide detailed information on the specification and bidding process. Commissioner Hay provided his thoughts on selecting a local bid for the purchase of the Half Ton 4x4 _Crew Cab pickup. Commissioner Hoppock provided his thoughts on the bid selection. A conversation ensued between the City Commission regarding local bidder's preference. Norman Manne!, Salina, provided his thoughts on a local bidder's preference. Mr. Schrage stated he was aware of the incident Mr. Mannel was referring to and staff had prepared the documentation to show all information available to give the City Commission the ability to make the best decision. 19-0061 Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to approve the 2019 Vehicles and Equipment Plan as recommended, authorize staff to proceed with purchases and authorize the City Manager to sign contracts with selected vendors. Aye: (5). Nay: (0). Motion carried. (7.4) Award contract to paint the exterior of five slides at Kenwood Cove Aquatic Park. Jeff Hammond, Recreation Supervisor, explained the project, bids received, fiscal impact and action options. 19-0062 Moved by Commissioner Hoppock, seconded by Commissioner Hodges, to award contract to Dale Cooper LLC dba Safe Slide to paint the exterior of five Kenwood Cove Slides in the amount of $68,800. Aye: (5). Nay: (0). Motion carried. DEVELOPME?l.'T BUSINESS Page4 z 0.. w OTHER BUSINESS Commissioner Hodges asked if she could have confirmation on the status of the joint tipping fee agreement. Greg Bengtson, City Attorney, stated the exhibits were finalized to reflect the descriptions of the roads and were approved by engineering staff for both the City of Salina and Saline County. He continued to state a joint statement of the City Attorney and County Counselor was submitted to Judge Elliott, upon receipt, he replied that he had retired fully as a district court judge and was unable to sign off on the matter. He further stated that the County Counselor had a conversation with Judge Hickman that would allow Judge Hickman to be reassigned to the case. He further stated that the revised order would be resubmitted to Judge Hickman to review. Commissioner Hodges asked if the revision made any changes of the documents approved by both the Salina City Conunission and Saline County Commission. Mr. Bengtson stated there were no modifications to the text and the exhibits were created and approved by both city and county staff. Commissioner Hodges asked what the timetable was to have the matter completed and behind us. Mr. Bengtson stated the joint petition had been filed with the agreement attached. He continued to state once Judge Hickman was assigned to the case, staff would re-file the order. He further stated he hoped it would be completed in the next ten (10) days. Commissioner Hodges thanked staff and Great Plains Manufacturing on the partnership to provide the community opportunity to seed and plant the prairie restoration areas at Indian Rock Park. Commissioner Hodges asked if a parks tour could be scheduled. Michael Schrage, City Manager, stated staff was working to put together a tour schedule. Mr. Schrage provided an update on the concrete of the fieldhouse floor, the downtown streetscape project, the Alley Entertainment Center, downtown hotel, the Police Training Center and the county expo center agreement. Commissioner Hoppock asked if we were still dealing with horizontal and no vertical cracks on the fieldhouse floor. Mr. Schrage stated correct and continued to state there was a need for additional testing on the floor. (9.1) Request for executive session (real estate). I move the city commission recess into executive session for _ minutes to discuss the potential acquisition of specific real estate, the identification of which would be contrary to the public interest, based upon the need for the preliminary discussion of the acquisition of real property pursuant to K.S.A. 75-4319(b)(6). The open meeting will resume in this room at __ p.m. ,9-0063 Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to recess into executive session for 20 minutes to discuss the potential acquisition of specific real estate, the identification of which would be contrary to the public interest, based upon the need for preliminary discussion Page 5 "' ... of the acquisition of real property, pursuant to K.S.A. 75-4319(b)(6). The open meeting will resume in this room at 6:05 p.m. Aye: (5). Nay: (0). Motion carried. The City Commission took a 2 minute break at 5:43 p.m. and recessed into executive session at 5:45 p.m. and reconvened at 6:05 p.m. No action was taken. ADJOURNMENT Moved by Commissioner Hay, seconded by Commissioner Ryan, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 6:08 p.m. [SEAL] ATIEST: ~0~ Shandi Wicks, CMC, City Clerk ~~pJJ Trent W. Davis, M.D., Ivfayor Page6 "' "' RESOLUTION NO. 19-7677 A RESOLUTION INITIATING PROCEEDINGS BY THE GOVERNING BODY FOR IMPROVEMENTS TO THEN. 9TH STREET BRIDGE IN THE CITY OF SALINA, KANSAS. \VHEREAS, by the adoption of Ordinance No. 02-10071 on February 25, 2002, the governing body of the City of Salina, Kansas (the "City"), designated Ninth Street as a main trafficway pursuant to K.S.A. 12-685 et seq. (the "Act"); and \VHEREAS, the governing body of the City has determined that it is necessary to improve or reimprove portions of said main trafficway as follows: Removal, replacement and reconstruction of the North 9th Street bridge, and all other related improvements including, but not limited to, right of way acquisition, design, engineering, construction, consultant inspection, drainage improvements and other related and necessary improvements; and (the "Improvements''); and \VHEREAS, reports, estimates and plans have been compiled and furnished to the governing body of the City to provide them with sufficient information in order to enable them to commence proceedings for the construction of the Improvements. NO\V, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: Section 1. It is hereby deemed and declared to be necessary to make the Improvements under the authority of the Act, in accordance with plans and specifications therefore prepared or approved by the City Engineer. Section 2. The estimated cost of the Improvements is $2,000,000. The cost of the Improvements and the associated financing costs shall be payable from the proceeds of general obligation bonds and/or temporary notes of the City issued under the authority of the Act. Section 3. The City expects to make capital expenditures in connection v.ith the Improvements and intends to reimburse itself for such expenditures with the proceeds of general obligation bonds and/or temporary notes in an amount not to exceed $2,000,000, plus associated financing costs and costs of issuance. Any general obligation bonds and/or temporary notes issued under the authority of this Resolution may be used to reimburse expenditures made on or after the date that is 60 days before the date ·of adoption of this Resolution pursuant to U.S. Treasury Regulation § 1.150-2. Section 4. This Resolution shall take effect and be in full force immediately after its adoption by the governing body of the City. 1 z ... w " .i; ADOPTED by the governing body of the City of Salina, Kansas, on March 4, 2019. (SEAL) Tre~.~~ ~ ATIEST: iii ~ i ~ Shandi Wicks, CMC, City Clerk 2 REVISED PETITION 4395 TO THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS: City Clerk's Office Filed We, the undersigned, owners of record of property located within the City of Salina, Kansas (the "City") and being the owners of 100% of the area liable for assessment set forth below, do hereby respectively request that the Governing Body of the City create and designate an improvement district for the purpose of making certain improvements in the manner provided by K.S.A. 12-6a01, et seq. 1. The general nature of the proposed improvements are as follows: The curb, gutter, pavement, and grading for approximately 485 lineal feet of Covey Lane and 383 lineal feet of Covey Court (the "Street Improvements"). The installation of approximately 342 lineal feet of storm sewer pipe, inlets, pump station, force main and all appurtenances thereto (the ''Drainage Improvements"). The installation of approximately 1,328 lineal feet of six-inch water main, fire hydrants, valves, fittings, service connections for water lines and all appurtenances thereto (the "Water System Improvements"). The installation of approximately 894 lineal feet of eight-inch sanitary sewer main, service connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). (collectively, the "Improvements"). 2. The estimated or probable cost of the Improvements is: Five Hundred Seventy-Nine Thousand Sixty-Five Dollars and Forty Cents ($579,065.40) 3. The extent of the proposed improvement district to be assessed is: Lots I through 6, Block 2 and Lots 8 through 19, Block 1, all in Pheasant Ridge Addition No. 3, City of Salina, Saline County, Kansas. (the "Improvement District"). 4. The proposed method of assessment shall be: Each lot in the Improvement District shall be assessed equally per lot for costs of the various Improvements. 5. The proposed apportionment of cost between the Improvement District and the City at Large is: One hundred percent (100%) of the total cost of the Improvements shall be assessed to the Improvement District and no portion of costs shall be paid by the City at Large. 6. Pursuant to K.S.A. 12-6a04(c), the Petitioners further acknowledge the following: This Petition is submitted pursuant to subsection (c) ofK.S.A. 12-6a04. The Improvement District does not include all properties which may be deemed to benefit from the Improvements. The signers of this Petition hereby request that the Improvements be made \\ithout notice and bearing as required by K.S.A. 12--6a04(a). NAMES MAY NOT BE WITBDRA WN FROM THE PETITION BY THE SIGNERS THEREOF AFTER THE GOVERNING BODY COMMENCES CONSIDERATION OF THE PETITION OR LATER THAN SEVEN (7) DAYS AFfER FILING OF THE PETITION Wim THE CITY CLERK, WHICHEVER OCCURS FIRST. Each signer of this Petition certifies', under oath, that: (a) The petitioner and its principals do not have a financial interest in any real estate located in the city which is subject to delinquent special assessments or ad valorem taxes as of the date of the petition; (b) The petitioner and its principals do not have a financial interest in any real estate located in the State of Kansas on which special assessments or ad valorem taxes were delinquent for a period of more than one year during the five-year period immediately preceding the date of the petition; ( c) The petitioner and its principals are not in breach of any outstanding contractual obligations owed to the city as of the date of the petition; and (d) The petitioner and its principals have not been convicted of a felony financial crime, including but not limited to fraud or embezzlement, during the five-year period immediately preceding the date of the petition. 1 These certifications arc only required to be made by petitioners for special assessment financing in new developments. 2 LEGAL DESCRIPTION OF PROPERTY O'VNED WITHIN THE PROPOSED IMPROVEMENT DISTRICT: Lots 1 through 6, Block 2 and Lots 8 through 19, Block I, all in Pheasant Ridge Addition No. 3, City of Salina, Saline County, Kansas. STATEOFKANSAS ) ) SALINE COUNTY ) I, the undersigned Notary Public, hereby certify that the signature appearing above is genuine and that this document was signed before me on this 2~ day of bbVerottr , 20 _15_. j . SHANOI L WICKS -Notary Public -Stale of Kansas My Appl. Expires My appointment expires: -&a.Md<.· Lu 2 ()):6 Notary Public 3 CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS December 3, 2018 4:00 p.m. The City Commission convened at 2:30 p.m. for Downtown Enhancement & Entertainment Ordinance Discussion and at 3:45 p.m. for Citizens Forum at City-County Building, Room 107. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Karl F. Ryan (presiding), Commissioners Trent Davis, Joe Hay, Jr., Melissa Rose Hodges, and Mike Hoppock. Also present :Michael Schrage, Interim City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Clerk. AWARDS A.t~D PROCLAMATIONS None. CmZENS FORUM Rachel Dix, 129 S. Tenth Street, provided ~ormation on a business she operated at 701 Bishop. She continued to provide information regarding the hurdles she had on obtaining an occupancy permit and building permit for the property. Michael Schrage, Interim City Manager, provided information on the building codes, spoke to the specific request and provided information about the need for available parking. A conversation ensued between Mr. Schrage and Ms. Dix regarding the deed restriction requirement on the shared parking agreement. Lauren Driscoll, Director of Community & Development, stated she would be ·willing to work with Ms. Dix regarding the shared parking issue and get something resolved. Joan Ratzlaff, Salina, provided information on citizen advisory boards and stated there were some holes in the process of allowing the citizen board members to participate in the discussions. She continued to provide information on the need for a staff person that coordinated training for boards, obtaining feedback from the boards or creating a counsel of boards. l'viichael Schrage, Interim City Manager, provided information on the citizen board orientation provided by the city manager and city attorney and individualized board training by the board liaison. • PUBLIC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSENT AGE.i...:DA (6.1) Approve the minutes of November 26, 2018. (6.2) Approve Resolution No. 18-7633 providing for the advisability and authorization related to establishing special improvement district for water, sanitary sewer, street, Page I ., "' 18-0496 z ... w ., c:: ~ ~ :!< -g 8 and drainage improvements in Pheasant Ridge Addition No. 3, Phase II and repeal Resolution No. 18-7619. Commissioner Hodges requested that Item 6.2 be removed from the consent agenda . Moved by Commissioner Hodges, seconded by Commissioner Hay, to approve the minutes of November 26, 2018 as presented. Aye: (5). Nay: (0). Motion carried . (6.2) Approve Resolution No. 18-7633 providing for the advisability and authorization related to establishing special improvement district for water, sanitary sewer, street, and drainage improvements in Pheasant Ridge Addition No. 3, Phase II and repeal Resolution No. 18-7619. Commissioner Hodges stated she was not present when the item was originally presented on November 5, 2018, did not have any questions, but wanted to make sure her vote was counted. 18-0497 Moved by Commissioner Hoppock, seconded by Commissioner Hay, to adopt Resolution No. 18- 7633 providing for the advisability and authorization related to establishing special improvement district for water, sanitary sewer, street, and drainage improvements in Pheasant Ridge Addition No. 3, Phase II and repeal Resolution No. 18-7619. Aye: (4). Nay: (1) Hodges. Motion carried. ADMINISTRA TJON (7.1) Second reading Ordinance No. 18-10988 changing the zoning district classification from A-1 (Agricultural) district to 1-3 (Heavy Industrial) district on a 1.8 acre unplatted tract of land located between North 9th Street and North 5th Street. Mayor Ryan noted that Ordinance No. 18-10988 was passed on first reading on November 26, 2018 and since that time no comments have been received. 18-0498 Moved by Commissioner Hoppock, seconded by Commissioner Davis, to adopt Ordinance No. 18- 10988 changing the zoning district classification from A-1 (Agricultural) district to I-3 (Heavy Industrial) district on a 1.8 acre unplatted tract of land located between North 9th Street and North 5th Street on second reading. A roll call vote was taken. Aye: (5) Davis, Hay, Hodges, Hoppock, Ryan. Nay: (0). Motion carried. (7.2) Resolution No. 18-7639 authorizing City of Salina staff to commence with such actions to implement the features of the sanitation plan as described herein as supported by the City Commission at recent study sessions including development of fees based on the sanitation services and preferred plan, with additional fees, as specified, for additional services, and repealing Resolution No. 18-7540. Jim Kowach, Director of Public Works, explained the plan, fees, fiscal impact and action options. Commissioner Hay asked for the total number of curbside recycling participants and how many had canceled since the opening of the recycling center. Mr. Kowach stated there were currently 849 participants in the program and about 100 participants have canceled their service since the opening of the recycling center. Commissioner Hay stated there was a private individual that would pick up the recycling and deliver it to the recycling facility for citizens and asked if the private individual would be interested in taking over the 849 customers. Mr. Kowach stated staff had not contacted Page2 the private party but would include information on alternate resources available in the letter mailed to the participating parties. Commissioner Hay provided his thoughts on canceling the curbside recycling program. Commissioner Davis provided his thoughts on the curbside recycling program. Commissioner Davis asked if there were any considerations.to sorting the recycling instead of having a single stTeam source. Jim Teutsch, Operations Manager, stated the market was trending toward single stream recycling versus sorting the materials. He continued to provide information on the contamination of materials at collection and the recycling industry. A conversation ensued between the Commission, Mr. Teutsch and Michael Schrage, Interim City Manager, regarding contamination of materials and the recycling industry. Commissioner Davis asked if staff was aware of the financial model of Abilene's recycling center. Mr. Teutsch stated the operators that are sorting the materials; they hold the product until they have a large enough quantity to be sold. He continued to provide information on the process of materials going to market. A conversation ensued between the Commission, Mr. Schrage and Mr. Teutsch regarding the collection and sorting of the recycling. Commissioner Hay asked if staff could reach out to the private party on the curbside recycling program. :Mr. Teutsch stated he was an advocate for creating public/private partnerships and provided information on some public/private partnerships. Commissioner Hodges asked how long the contract with Hutchinson was and if they closed what would happen. Mr. Teutsch stated it was an indefinite contract but if they were no longer open staff would have to find another material recovery facility. Commissioner Hodges asked how many yard waste recycling customers there were. Mr. Teutsch stated about 5,500 customers currently participated in the yard waste program. Mr. Kowach stated any customer could set out yard waste recycling. Commissioner Hodges provided her thoughts on the yard waste program and the current curbside recycling program. Mr. Teutsch provided information on the current programs, proposed programs and the proposed fees. Mr. Kowach provided additional information on the current programs, proposed programs and the proposed fees. !vlr. Teutsch provided information on the potential future partnerships with businesses such as the hospital. Commissioner Davis asked what the hospital was currently doing with their plastic waste and what the impact was on the recycling facility for transporting the material. Mr. Teutsch stated he did not know what the current practice was for the hospital and spoke on what the impact would be on the facility . . Mr. Schrage asked if the material was separated, how many types would be collected separately. Mr. Teutsch stated the seven plastics, metal, glass, cardboard, paper, and soon aluminum foil. He continued to provide information on the uses of the product collected. A conversation ensued between the Commission, Mr. Teutsch, and Mr. Schrage regarding the recycling facility and proposed program. Page 3 Commissioner Hodges asked how many customers were there currently systems wide. Mr. Teutsch stated approximately 15,100. Commissioner Hodges asked who would be in charge of enforcing the parking violations. Mr. Schrage stated sanitation would be the eyes in the field but ultimately the police deparhnent. Commissioner Hodges asked if the police deparhnent would be involved in the conversations. Mr. Schrage stated the proposed system would be discussed with the police deparhnent to make sure it was enforceable. Commissioner Hodges asked if the private haulers would be required to use the same days for collecting as the City of Salina. :Mr. Kowach stated no. Mr. Teutsch provided information on a future created position to help with enforcement. Conunissioner Hodges asked if there were any ordinances on the books that referenced the removal of trash carts from the curb. Mr. Schrage stated yes, the carts were to be removed by the evening of the pickup date. !\fr. Kowach stated the alley pickup customers equaled about 15% of the customers. Commissioner Hodges asked how parking would be handled on streets with parking allowed only on one side. :Mr. Teutsch stated collecting trash was not easy with parking on the streets and it would be something that would have to be addressed. Daniel Eckhoff, 2664 Highland, asked how he could be kept in the loop on the private trash hauling. !\fr. Teutsch stated he could contact him and provide him with his contact information. Mary :rvlertz, 1936 Queens Road, thanked the Commission for their questions and was currently in favor of eliminating the curbside recycling program. She continued to provide information on the changes to the resolution and asked if it was necessary to state what size of containers could be provided. Mr. Schrage stated it could be left out but was intended to help let citizens know the information. She further provided her thoughts on a pay as you throw option. David Norlin, 1608 E. Republic, thanked staff for their hard work on the matter and provided his thoughts on the elimination of the curbside recycling program as being a current customer. Joan Ratzlaff, Salina, provided her thoughts on the plan that was approved in March, the proposed programs and asked the Commission to not adopt the resolution and allow the Solid Waste Ivlanagement Committee to review the item in a week and a half. Commissioner Hay stated he would like to see that the.resolution be postponed to allow staff to work with the third party for curbside recycling and allow the Solid Waste Management Committee to review the item. Commissioner Hoppock provided his thoughts on the plan and asked how Jong the postponement of the item would need to be. Commissioner Davis asked if the resolution would affect the submittal date to the State of Kansas. l\'1r. Schrage stated the City of Salina was an enterprise fund, a landfill operator and a sanitation operator and required to fulfill the requirement of the Solid Waste r-.fanagement Plan. He continued to state the next agenda item was on the Solid Waste Page4 "' "' " c ia Ill ~ l1 ~ 8 Management Plan. Jim Teutsch stated the Solid Waste .Management Plan was to be approved and submitted to the State of Kansas by December 4, 2018. He continued to state the Solid Waste .Management Committee met in January, 2018 and provided information on the motion of the committee at the time and stated there was not a need to take the item back to the Solid Waste Management Committee. Corrunissioner Hoppock asked what the pay as you throw option was. Mr. Teutsch stated it was an incentive program that was included in the business plan and feasibility study. He continued to provide information on the incentive options for pay as you throw programs. Corrunissioner Hoppock asked if the automated truck could pickup multiple cart sizes. Mr. Teutsch stated yes. Corrunissioner Hoppock asked if the reference to the cart size could be eliminated in the resolution. :Mr. Teutsch stated ves. J Mayor Ryan provided his thoughts on the cart sizes. A conversation ensued between the Corrunissioners regarding the proposed program. Corrunissioner Hodges provided her thoughts on the elimination of the current curbside recycling program . .i\'1r. Teutsch stated the reduction in the size of the carts would not affect a large number of the customers. Mr. Schrage asked if this item was required to be submitted to the State of Kansas. Mr. Teutsch stated what he was sending to the State of Kansas was the record of what took place in 2018. Corrunissioner Davis asked if the report had to reference the decision on curbside recycling or could that be eliminated to allow time to work it out. Mr. Teutsch stated there was an annual requirement to reaffirm the plan and Addendums A and B would need to be submitted to the State of Kansas. Mr. Kowach stated the plan could be submitted as it currently was and then could be discussed in further detail at a later time. He further stated the cart size could be left out of the resolution with a footnote stating there were ongoing conversations on the cart size. Commissioner Hoppock provided his thoughts on the current curbside recycling program. 18 · 99 Moved by Commissioner Hoppock, seconded by Mayor Ryan, to adopt Resolution No. 18- 7639 authorizing City of Salina staff to commence with such actions to implement the features of the sanitation plan as described herein as supported by the City Commission at recent study sessions including development of fees based on the sanitation services and preferred plan, with additional fees, as specified, for additional services, and repealing Resolution No. 18-7540. Mayor Ryan provided his thoughts on the proposed program. Commissioner Davis would like to see more formal action on potential partnerships with private haulers. Commissioner Hodges provided her thoughts on eliminating the yard waste program to allow for the curbside recycling program to remain. Commissioner Davis asked what had to be submitted to the State of Kansas to satisfy the Pages "' "' Solid Waste Management Plan requirements. lvlr. Teutsch stated if the resolution was approved it would be submitted tomorrow. Mr. Schrage asked what the consequences were to submitting the current resolution then making changes to the resolution in three months. Mr. Teutsch stated there would be none. The Clerk called roll at the request of the Mayor. Aye: (2) Hoppock, Ryan. Nay: (3) Davis, Hay, Hodges. l\fotion failed . . Mayor Ryan asked if there was another option to adopt the item. Commissioner Hodges provided her thoughts on the matter. Moved by Commissioner Hay, seconded by Commissioner Davis, to ask staff to send the item back to the Solid Waste Management Committee and staff work with a third party on the curbside recycling program. Mr. Schrage provided information on the role of the Solid Waste lvlanagement Plan. Mayor Ryan called the question. Aye: (3). Nay: (2) Hoppock, Ryan. Motion carried. (7.3) Approve Resolution No. 18-7632 reaffirming the Solid Waste Management Plan for Salina/Saline County with addendums. Michael Schrage, Interim City Manager, explained the statutory solid waste management planning responsibilities and the interlocal agreement with Saline County. Jim Teutsch, Operations Manager, explained the plan, addendums and action options. 18-0501 Moved by Commissioner Hay, seconded by Commissioner Davis, to adopt Resolution No. 18-7632 reaffirming the SoJid Waste .Management Plan for Salina/Saline County with Addendums 1 & 2. Aye: (5). Nay: (0). l\·lotion carried. (7.4) Scheduling and calling a special meeting to conduct City .Manager candidate interviews. Natalie Fischer, Director of Human Resources, explained the request and action options. r..fayor Ryan asked if the meeting would be at 12:30 p.m. lvls. Fischer stated yes. Commissioner Davis asked where the meeting would take place. :ti:ls. Fischer stated the meeting would be called to order in Room 107, the interviews would be done in another room and if there was a need for additional time to deliberate, room 1078 would be available. 18-0502 Moved by Commissioner Davis, seconded by Commissioner Hoppock, to hold a special meeting on to conduct city manager candidate interviews on Thursday, December 6, 2018 at 12:30 p.m. Aye: (5). Nay: (0). Motion carried. (7.5) Authorize financial contribution to Salina Airport Authority for economic development services. Michael Schrage, Interim City Manager, explained the request, fiscal impact and action options. Commissioner Hay asked if the county benefited from the economic development and why there was not a funding request from them. Mr. Schrage stated the City of Salina funds Page6 "' "' z ... !U were set aside and he would let Mitch Robinson provide information on the request. l'vlitch Robinson, Salina Community Economic Development Organization (SCEDO), stated the request did not go before the Saline County Commission. Tim Rogers, Salina Airport Authority Executive Director, stated the county did not have a fund for economic development and the funds the City of Salina collected covered the entire county. Mr. Schrage provided additional information on the economic development fund. Commissioner Hodges asked what the county's level of participation was on the SCEDO. Mr. Robinson stated the City of Salina contributed $250,000 with Saline County and the Salina Airport Authority contributing $20,000 each and the SCEDO providing 530,000 from the reserve fund. ~fr. Robinson provided information on the request and the review by the SCEDO board. ~fr. Rogers provided information on the Law Firm of Baker Donelson and the projects to be funded. Commissioner Hoppock asked what the approximate number of jobs and salary ranges would be for these projects. Mr. Rogers stated approximately 200 to 300 jobs with salaries ranging from 525 to 535 an hour. Commissioner Hoppock asked when staff expected a decision to be made on the MQ-9 project. Mr. Rogers stated he needed the staff of Baker Donelson to represent the airport. Commissioner Hoppock asked if staff had references on Baker Donelson. Jvlr. Rogers stated Baker Donelson was instrumental in the creation of the tower upgrades and the airport surveillance radar system. He continued to provide information on the support of Baker Donelson throughout the State of Kansas. Commissioner Hodges asked if Mr. Rogers was comfortable with the relationship with Baker Donelson. Mr. Rogers stated yes and it was of the request of the Kansas Department of Commerce to add to the current contract. Commissioner Hodges asked if the new incoming Governor or Secretary of Commerce would have any effect on the program. l\fr. Rogers stated they would not, the project was moved to the transition team. Commissioner Hodges asked if there was any type of assurance that another community would not be represented by the same firm for the same project. Mr. Rogers stated Baker Donelson would not represent another city in the United States on the same projects. Commissioner Hodges asked if the request for lobbying was an A-typical request. Mr. Schrage stated he was not sure if there was a history of requests for lobbying. Mr. Rogers stated Baker Donelson would be advocates to access the levels of information needed to advocate on our behalf. Commissioner Hodges provided her thoughts on the request. Commissioner Hodges stated there was a request for $50,000 that was funded to the Salina Airport Authority. Mr. Rogers stated the request was for the Global Aeronautics Initiative and provided information on the initiative. Commissioner Hodges asked at what point we could expect to see an economic development policy to help verbalize the priorities. Mr. Schrage stated there was an upcoming study session in January 28, 2019 to provide an update on the K-State Global Page 7 "' "' z ... w j 1l I 18-0~3 Aeronautics Initiative. He also stated a policy had been drafted and provided additional information on the resources available and noted there had not been a time table set for adopting the policy. Commissioner Hodges stated it was hard to measure the deliverables but this specific request had deliverables listed. Mr. Rogers stated the deliverables for this request would be the jobs. He continued to provide information on the deliverables available. i\fr. Schrage continued to provide the measurable on the projects. Commissioner Davis provided information on the request. i\•loved by Commissioner Davis, seconded by Commissioner Hay, to authorize contribution of 530,000 to the Salina Airport Authority for the purpose of securing the services of Baker Donelson to assist the Salina Airport Authority in assessing and facilitating success in opportunities associated with the rvlQ-9 MOD Center project, General Atomics, the Air Force, and the Kansas National Guard and to provide assessments of efforts, strategy development, bid and proposal work, and other advocacy activities in support of efforts identified by the Salina Airport Authority. Aye: (5). Nay: (0). ~·lotion carried. DEVELOPMENT BUSINESS None. OTHER BUSINESS Commissioner Hodges asked for a five (5) minute break before the executive session at 7:05 p.m. (9.1) Request for executive session (legal). I move the city commission recess into executive session for _ minutes beginning to discuss the road annexation and impact fee agreement with Saline County with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship pursuant to K.S.A. 45-7319(b)(2). The open meeting will resume in this room at __ p.m. 18-0504 Moved by Commissioner Hoppock, seconded by Commissioner Davis, to recess into executive session for 30 minutes beginning at 7:10 p.m. to discuss· the road annexation and impact fee agreement with Saline County with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship, pursuant to K.S.A. 45-7319(b)(2),. The open meeting will resume in this room at 7:40 p.m. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 7:10 p.m. and reconvened at 7:40 p.m. No action was taken. 18-0505 i'vloved by Commissioner Hoppock, seconded by Commissioner Hodges, to recess into executive session for 20 minutes to discuss the road annexation and impact fee agreement with Saline County with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship, pursuant to K.S.A. 45- 7319(b)(2),. The open meeting will resume in this room at 8:00 p.m. Aye: (5). Nay: (0). Motion carried. Page 8 18-0506 z c.. "' ADJOURNMENT Moved by Commissioner Davis, seconded by Commissioner Hodges, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 8:02 p.m. [SEAL] ATIEST: ~-lOLUt Shandi Wicks, CMC, City Clerk Karl F. Ryan, Mayor Page9 i'-.... .. "' (Published in the Salina•Joumal on Oet.efn'Ot'( 1 , 2018) RESOLUTION NUMB.ER 18-7633 RESOLUTION SEITING FORTH FINDINGS AND DETERML~ATIONS OF THE OVERNL~G BOD\' OF THE CITY OF SALINA, KANSAS ON THE ADVISABILITY F AND AUTHORIZING THE CONSTRUCTION OF CERTAIN J.1\fi>ROVEMENTS URSUA.J'\'T TO K.S.A. 12-6a01 et seq. AND REPEALING RESOLUTION NUMBER 18- 619. WHEREAS, a.petition was filed with the City Clerk for 1he City of Salina, Kansas {the 'City'') on November 29, 2018, proposing certain impro\•ements pursuant to K.S.A. 12-6a0I et eq. (the "Petition"); and WHEREAS, the Petition sets forth: (a) the general nature of the proposed impro\'emC'nts; b) the estimated or probable cost of the proposed improvemenlS; (c) the extent of the proposed mprovement district to be assessed for the cost of the proposed improvements; (d) the proposed ethod of assessment; (e) the proposed apportionment of the cost between the improvement district nd the Ci!)• at large; (f) a request that such improvements be made without notice and hearing as cquired by K.S.A. 12-6a04(a); and (g) the statement that the Petition was submi9ed under ubsection (c) of K.S.A. I 2-6a04; and WHEREAS, the owners of record of I 00% the property liable to be assessed under the etition have signed the Petition; and WHEREAS, no signatures have been withdrawn from the petition before the Governing ody began consideration of the PC'tition; and WHEREAS, K.S.A. 12-6a04 provides that the Governing Bod~· may authorize !ind order ublic improvements withoul notice and hearing after a sufficient petilion has been filed; and WHEREAS, the Governing Body has reviewed and considered the Preliminary ngineering Estimate and Feasibilicy Report prepared by the City Engineer and agrees with the onclusions set forth therein; and WHEREAS, the Governing Body desires to repeal Resolution No. 18-7619 pro\•iding for pecial assessments against real. estate within Pheasant R_idge Addition No. 3, and enact this esolution in lieu thereof, to correct the legal description or the property to be assessed for the mprovements. NOW THEREFORE, BE IT RESOLVED BY THE GOVERNING BOD\' OF THE IT\' OF SALINA, KANSAS, AS FOLLOWS: Section 1. The Govemine Bodv hereb\• finds that the Petition is sufficient, and nher finds and detennines that it is ne~essarr and ad~•isable to make the following improvements: (a) The nature of the improvements are as follows: The curb, gutter, pavement, and grading for approximately 485 lineal feet of CO\•ey Lane and 383 lineal feet of Covey Court (the "Street Improvements"). -'I llllllll llll'lllll Ill II l lll lllll lllll llll Ill Ill Ill lllll II Ill lllll llllll l Ill 11111111 .• .--:~··. REBECCA SEEMAN {!~~:::';;::~~.REGISTER OF DEEDS SAUNE COUNTY KANSAS \'\;,·;.·.);}Book:1350 Page: 1731-1733 \,~:·;-;;-;-:':/Receipt #: 120465 Recording Fee: S0.00 '·w~~ Pages Recorded: 3 CJ.JN Date Recorded: 12/14/2018 3:50:11 PM 2. .. .., .. . E li "l 1l .. .jl 3 II u Boole 1350 Page: 1732 The installation of approximately 342 lineal feet of storm sewer pipe, inlets, pump station, force main and all appunenances thereto (the "Drainage Improvements"). The installation of approximately 1,328 lineal feet of six-inch water main, fire hydrants, valves, fittings, ser\'icc connections for water lines and all appurtenances thereto (the "Water System Improvements") . The inscallation of approximately 894 lineal feet of eight-inch sanitary sewer main, Ser\·ice connections for sewer lines, manholes, and all appurtenances thereto (the "Sanitary Sewer Improvements"). (collectively, the "Improvements"). (b) The estimated cost of the Improvements is: Five Hundred Se,·enty-Nine Thousand Sixty-Five Dollars and Forty Cents ($579,065.40). (c) The boundaries of the improvement disuict to be assessed are: i.lots I through 6, Block 2 and-lots 8 through 19, Block I, all in Pheasant Ridge Addition No. 3, City of Salina, Saline County, Kansas. (collectively, the ::Improvement District"). (d) The apportionment of cost between the Improvement District and the city a1 large is: One hundred percent (IOO%) of the total cost of the Improvements shall be assessed to the Improvement District and no portion of costs shall be paid by the City at Large. (e) The method of assessment against property within the lmpro\•ement District shall be equally per lot against all lots within the Improvement District. Section 2. The Governing Body hereby declares that the Improvements described in is Resolution are necessary, and authorizes them to be made in accordance with the Petition and e findings set fonh in this Resolution, and funher authorizes the levying of assessments and the ssuance of bonds therefore, all in accordance with K.S.A. t 2-6a0 I et seq. The go\'eming body of e City acknowledges that the Petition was submitted under K.S.A. 12-6a04(c) and hereby finds hat the lmpro\'emem District does no1 include all propeny which may be deemed to be benefitted y the construction of the lmpro,•ernents and the persons who signed the Petition are willing to ay the costs of the Improvements as set forth in the Petition. Section 3. The City expects to make capital expenditures from and after the date of his Resolution in connection with the Improvements described herein, and intends 10 reimburse 1Self for such expenditures with the proceeds of one or more series of general obligation bonds and emporary notes of the City in the ma.ximum principal amount ofSS79,065.40. Section 4. Resolution No. 18-7619 is hereby repealed. 2 "' "' Boole 1350 Page: 1733 Section 5. The City Clerk shall file a cenificd copy of this Resolution with the egisier of Deeds of Saline County, Kansas. Section 6. This Resolution shall take effrct after its passage and publication once in he official city newspaper. SEAL) ADOPTED AND PASSED this 3rd day of December, 2018. -· . ---~ I hereby certify that the above and foregoing is a true and correct copy of Resolution No. 18-7633 that was adopted by the Governing Body of the City of Salina at their regular meeting on December 3, 2018. Allison Strait Deputy City Clerk J Publisher's Affidavit I, __ _...C ... h..,a,..·s..,ty,__,.E..,jn..,k..._ ___ , being duly sworn declare that I am a I cgal Coordjnator of THE SALINA JOURNAL, a daily newspaper published at Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has been admitted to the mails as second class matter in said county, and continuously and uninterruptedly published for five consecutive years prior to first publication of attached notice, and that the ______ R_es_o_l_u..:.ti.:.o..:.n..;;1.:.8-..:.7..,;;6.:.3:..3 __ Notice has been correctly published in the entire issue of said newspaper one time, publication being gh•en in the issue of December 7 2018 (' sniv:·i;.{.,_l ~ Subscribed and sworn to before me. this 7 ~ day of ~ A.D.20JX__ Printer's Fee S438.00 . . (Plbl$.>ej r. te San~ · o.c:n.7. lOllJ .llESOUITD..alt-1m ·, A llESCIU/TDI SETTllQ I R1Rnt ~ AID: DETEJmUTIOllS Of M i GOVtRllllG llOOT OF M ! CITY OF IALlll. 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IDll9...-S~h I ant'Udiall ol b ~ 1111 h Sin" ft lip1 h I Pltliarl ft~" Jll't fll a:iils - - - "' "' CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS March 11, 2019 4:00 p.rn. The City Commission convened at 2:30 p.m. for Land Bank Policy and at 3:45 p.m. for Citizens Forum at City-County Building, Room 107. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and compnsmg a quorum: Mayor Trent W. Davis, M.D. (presiding), Commissioners Joe Hay, Jr., Melissa Rose Hodges, and Mike Hoppock. Also present: Michael Schrage, City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Clerk. Absent: Karl Ryan AWARDS AND PROCLAMATIONS (3.1} Special Recognition for the Salina Police Department. Mayor Davis read the Award of Valor and presented the Award of Valor plaques to Sergeant Kyle Tonniges, Officer Michael Baker and Officer Kevin Reay. CITIZENS FORUM None. PUBLIC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME None. CONSENT AGENDA (6.1} Approve the minutes of March 4, 2019. 19-0065 Moved by Commissioner Hodges, seconded by Commissioner Hay, to approve the consent agenda as presented. Aye: (4). Nay: (0). Motion carried. ADMINISTRATION (7.1) Resolution No. 19-7679 authorizing and providing for construction of additional parking for the Police Deparhnent and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Debbie Pack, Director of Finance & Administration, explained the project, request, fiscal impact and action options. Commissioner Hodges asked if the project was following the normal sequence of events for the DRT meeting. Michael Schrage, City Manager, stated there had been a ORT meeting for the project but the zoning change had not occurred. He further stated the normal sequence of events had varied for projects in the past and staff was working to create a standard sequence. Page 1 - - - Commissioner Hodges provided her thoughts on the sequence of events for projects. Commissioner Hoppock stated there was another agenda item pertaining to bonding of the items. Mr. Schrage stated that bond counsel was in attendance to discuss other options such as cash financing. Moved by Commissioner Hoppock, seconded by Commissioner Hodges, to adopt Resolution No. 19-7679 authorizing and providing for construction of additional parking for the Police Department and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Aye: (4). Nay: (0). Motion carried. (7.2) Resolution No. 19-7678 authorizing and providing for replacement of irrigation system at the Municipal Golf Course and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Debbie Pack, Director of Finance & Administration, explained the project, request, fiscal impact and action options. Commissioner Hoppock asked if there were other projects to be completed under the Parks Master Plan would there be funds available in the property tax fund. Ms. Pack stated if this project was approved, there would not be additional funds available in this fund but could be in other funds or utilizing cash. Gina Riekhof, Gilmore & Bell, explained the funding options for the project and Charter Ordinance No. 39. Commissioner Hodges asked if the Charter Ordinance was the home rule power. Ms. Riekhof stated there was a provision in the Kansas Constitution that permitted home rule powers and continued to explain State Statute KSA 13-1024A and Charter Ordinance No. 39. Commissioner Hodges asked if the City of Salina had maxed out the limit on a project in the charter ordinance in the past and continued to fund the project in the next year through the same charter ordinance. Ms. Riekhof stated she was not aware of it occurring in the past but mentioned that 01arter Ordinance No. 39 did waive the election requirement. Commissioner Hay asked when the project was actually supposed to start. Scott Garrie, Deputy Director of Parks & Recreation, stated the intent was to have the project start after September but had received some feedback wanting the construction to start sooner. Mike Hargrave, Golf Course Manager, stated the main lines were scheduled to be dug in late July and early August and begin the laterals by early September. Commissioner Hoppock asked what the major deficiencies were and what would happen if nothh1g was done. Mr. Garrie stated the budget for irrigation maintenance was $15,000 yearly and the cost continues to increase on a yearly basis. Mr. Hargrave stated the maintenance of the system continues to take additional time of the maintenance staff. Commissioner Hodges stated that the system had been depleting for at least 10 years. Mr. Hargrave stated at least if not longer. Commissioner Hoppock asked who was performing the cash flow analysis of the property tax fund. Ms. Pack stated there was an amortization schedule attached to agenda item 7.4. Michael Schrage, City Manager, stated staff had conversations with bond counsel on refinancing the bonds to even out the amortization schedule in the future. Ms. Pack stated she performed the amortization schedule and explained the schedule created. Page2 - - - z c.. w Commissioner Hodges asked for information on the debt service fund. Ms. Pack stated the debt service fund balance at the end of 2018 was $600,000. She continued to provide information on projects within the debt service fund. Jon Blanchard, 1117 State Street, provided information on Charter Ordinance No. 39, his thoughts on the project and asked the City Commission to look at additional alternatives for financing. Commissioner Hodges asked if the City Commission would like to amend the charter ordinance what that would look like. Mr. Schrage stated it would need to be prepared and brought back for consideration and asked if Ms. Riekhof would explain the amendment requirements. Ms. Riekhof stated staff would need to know what the amendment to the charter ordinance would be. She asked Greg Bengtson, City Attorney, if the ordinance could be approved on two readings on the same date. Greg Bengtson, City Attorney, stated the ordinance would be able to be approved on both readings on the same day with a 2/3 majority vote. Ms. Riekhof further stated the ordinance would require two (2) readings with a 2/3 majority vote and once passed the ordinance would need to be published once a week for two weeks and a 60 day protest period before the charter ordinance would go into effect. Mayor Davis asked if bond counsel could review the options for the $500,000 balance. Ms. Riekhof stated lease purchasing, cash financing, phasing the project over multiple years, or resizing the project to fit the $1 million dollar amount. A conversation ensued between the City Commission regarding the financing options. Commissioner Hoppock asked if there was a reason Charter Ordinance No. 39 listed $1 million dollars for public parks. Mr. Schrage explained the history of the various charter ordinance adoptions. Mayor Davis provided his thoughts on the current request and Charter Ordinance No. 39. Mr. Bengtson stated the amount was not the crucial amendment to addressing the-policy decision. He further stated the charter ordinance would need to be amended to limit the bonding amount and the overall project cost. He continued to state the charter ordinance limited the bonding of the project not the project amount and Gilmore & Bell would not have offered this financing option if it was not in line with the charter ordinance. Commissioner Hay asked if the charter ordinance was amended what affect would it have on Agenda Item 7.4. Mr. Schrage stated the debt service financing of the irrigation project would not be able to occur until the charter ordinance amendment went into effect. Mr. Schrage stated H the commission wanted to debt finance $1 million dollars and cash finance the $500,000, conversations would need to occur on the effect on other projects. Commissioner Hodges provided her thoughts on cash financing the remainder of the project. 19-0067 Moved by Commissioner Hoppock, seconded by Commissioner Hay, to adopt Resolution No. 19- 7678 authorizing and providing for replacement of irrigation system at the Municipal Golf Course and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Aye: (3). Nay: (1) Hodges. Motion carried. (7.3) Resolution No. 19-7676 authorizing and providing for improvements to Broadway Boulevard from Crawford Street north to Ash Street and authorizing the issuance of Page3 - - z n. UJ .. c ~ rn ~ " g 8 Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Debbie Pack, Director of Finance & Administration, explained the project, request, fiscal impact and action options. Commissioner Hodges asked what the investment was on the project so far. Jim Kowach, Director of Public Works, stated approximately $50,000 . Commissioner Hodges asked about the scope of the project changing. Mr. Kowach stated staff would like to look at the entire project and thought there was a need for additional engineering and would like to bring the item back for additional scoping. Michael Schrage, City Manager, stated staff asked RDG Planning & Design if the project was paired down would it be able to fit in the $3 million dollar budget. Commissioner Hoppock provided his thoughts on the project and the need for further discussions prior to spending the additional money for design. Mayor Davis asked what the properties would look like beyond the sidewalk. Mr. Schrage stated it was more of a master plan or land use factor and continued to explain what the project would look like if it was phased out. Lauren Driscoll, Director of Community & Development Services, stated the improvements recommended in the plan would fall within the Comprehensive Plan. Mayor Davis provided his thoughts to the uses of some of the properties and the driveway entrances. A conversation ensued between the City Corrunission, Ms. Driscoll and Mr. Schrage regarding the project plan. Commissioner Hodges provided her thoughts on the project and eliminating the budget for brick street maintenance. Mr. Schrage slated this project had been the topic of conversation for years and if the Governing Body had a concern for the design expense, staff could break up the design of the project. Commissioner Hodges stated she would like the project to be part of the Strategic Planning session coming up in April. Commissioner Hay asked if they could look at option 2. Mr. Schrage stated the item could be postponed or could be brought back at a later date. Mr. Kowach stated the project area was close to needing a pavement overlay but there was need of additional investigation of whether the project would need to be completely rebuilt or just a pavement overlay and the investigation would cost approximately $50,000. 19-0068 Moved by Commissioner Hodges, seconded by Commissioner Hay, to postpone consideration of Resolution No. 19-7676 authorizing and providing for improvements lo Broadway Boulevard from Crawford Street north to Ash Street and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof with any additional information supplied by staff to Monday, May 6, 2019. Aye: (4). Nay: (0). Motion carried. _The City ommission recessed at 5:45 p.rn. for a 5 minute break. The meeting resumed at 5:50 p.m. (7.4) General Obligation Bonds and Temporary Notes. Page4 -'" "' z 0.. w "' E ~ I f 0 (7.4a) Resolution No. 19-7682 authorizing the offering for public sale of General Obligation Temporary Notes and Bonds. (7.4b) First reading Ordinance No. 19-10994 authorizing the issuance and delivery of General Obligation Internal Improvement Bonds, Series 2019-A. Debbie Pack, Finance Director, explained the request, fiscal impact and action options. Commissioner Hodges appreciated the extra time and additional information provided by staff and thanked Ms. Riekhof for coming today and preparing a memo regarding the state statutes. Michael Schrage, City Manager, stated one of the items financed was the Pheasant Ridge Addition project and staff chose to put the financing mechanism first then the action for the contract. Jon Blanchard, 1117 State Street, provided his thoughts on the bonding of the downtown strcetscape project especially the overhead structures, provided information on the main traffic way act and asked if the legislature intended for overhead structures, benches, trash receptacles and plazas to be part of the main traffic way act. He asked if we were funding part of the downtown strcetscape project with STAR Bond money. Mr. Schrage stated the accounting demonstrated how the ST AR Bond money would be used. A conversation ensued between Mr. Blanchard, Ms. Pack and Mr. Schrage regarding the financing of the Downtown Streetscape project. Mr. Schrage read a portion of the language included in the staff report from January 17, 2017 pertaining to the scope of the Downtown Streetscape project. -19-0069 Moved by Commissioner Hoppock, seconded by Commissioner Hay, to adopt Resolution No. 19- 7682 authorizing the offering for public sale of General Obligation Temporary Notes and Bonds. Aye: (3). Nay: (1) Hodges. Motion carried. - 19-0070 Moved by Commissioner Hoppock, seconded by Commissioner Hay, to pass Ordinance No. 19- 10994 authorizing the issuance and delivery of General Obligation Internal Improvement Bonds, Series 2019-A on first reading. Aye: (3). Nay: (1) Hodges. Motion carried. (7.5) Award contract for Pheasant Ridge Addition No. 3, Phase II, Project No. 80025. Jim Kowac11, Director of Public Works, explained the project, bids received, fiscal impact and action options. Commissioner Hodges asked if there was an overage, would the City be responsible for it. Mr. Kowad1 stated if there were changes or modifications to the plan, it would be the responsibility of the City. Mayor Davis asked if there were modifications would staff meet with the contractor to discuss. Mr. Kowach stated yes. Joan Ratzlaff, Salina, asked what the prices would be for the houses and lots in the subdivision. Todd Welsh, 221 S. Morris Drive, stated the homes would be in the $225,000 to $325,000 range and the lot prices would remain at $35,000 each. He provided information on the project bids and asked the contingency amount to be returned to the developer instead of to reduce the special assessments. Ms. Ratzlaff provided her thoughts on the Broadway Boulevard Improvements and the Page 5 - - - need for affordable housing. Wayne Nelson, Civil Engineer II, stated the construction contingency allowed for change orders to occur in the field, up to the approved amount and if there was remaining contingency the project final cost would come under the approved amount and the special assessments would be reduced based on the project final cost. Michael Schrage, City Manager, asked in the event the project comes in without using the contingency would the developer's expenses be eligible for reimbursement. Gina Riekhof, Gilmore & Bell, stated a portion of the money paid upfront by Mr. Welsh could be returned if it remained unused. Mr. Schrage stated it was possible the remaining amount could be returned to Mr. Welsh but that would have to be determined at the end of the project. A conversation ensued between the City Commission, Mr. Schrage, Mr. Kowach and Mr. Welsh regarding the ability to refund any remaining construction contingency to the developer. 19-0071 Moved by Commissioner Hay, seconded by Commissioner Hoppock, to award contract for the Pheasant Ridge Addition No. 3, Phase II, Project No. 80025 to APAC-Kansas in the amount of $509,233.15 with a 5% construction contingency of $25,461.66 for a total of $534,694.81. Aye: (3). Nay: (1) Hodges. Motion carried. (7.6) Acceptance transfer of ownership of the Former Schilling Air Force Base Treatment Plant property (Water Well Road & Ohio Street), five water well sites and water transmission lines. Martha Tasker, Director of Utilities, explained the acceptance, the project and action options. Mayor Davis asked if there was a specific change in the motion. Ms. Tasker stated the language should state the Former Schilling Air Force Base Water Treatment Plant Property. Greg Bengtson, City Attorney, stated Tract 108 and 111 were owned by fee title by the Salina Airport Authority and would be owned by fee title by the Oty of Salina. He continued to state the remaining properties were considered as easements and would be assigned over to the City of Salina. He further stated that staff would be able to include additional information on the document for those easements due to information that was obtained by John Harvey, the City Surveyor. Mr. Bengtson explained the specific sections of the Kansas Limited Warranty Deed. 19-0072 Moved by Commissioner Hay, seconded by Commissioner Hoppock, to accept transfer of ownership of the Former Schilling Air Force Base Water Treatment Plant Property, Tract 108 and 111. Aye: (4). Nay: (0). Motion carried. (7.7) Approve 01ange Order No. 1 for the Brick Crosswalks, Project No. 80012C. Jim Kowach, Director of Public Works, explained the project, change order, fiscal impact and action options. Commissioner Hodges asked if we were taking Brick Street Rehabilitation off the table. Mr. Kowach stated no, staff was going to pool money from other projects for a significant slormwater repair at the corner of Mulberry & Fifth Street. ·Page 6 -19-00~3 19-0074 - - Michael Schrage, City Manager, stated with the brickwork and the stormwater project at Mulberry and Fifth Street, there would be significant changes to the area. Mr. Kowach stated yes, that was correct. Moved by Commissioner Hoppock, seconded by Commissioner Hodges, to approve Change Order No. 1 authorizing $4,529.10 (Option 2 bid amount minus previous authorization) plus a $2,970.90 {12.1 % of entire project) construction contingency for City Project No. 80012C Brick Crosswalks. Aye: (4). Nay: (0). Motion carried. DEVELOPMENT BUSINESS (8.1) Application No. Z19-1, (filed by Joe Hill on behalf of the Joe Hill Trust), requesting a change in zoning district classification from I-2 (Light Industrial) to R-2 (Multi- family Residential) to allow construction of two new residential dwellings at the southwest corner of ReynoJds Street and Lincoln Avenue. (8.la} First reading Ordinance No. 19-10996. Dean Andrew, Director of Planning, explained the request, Planning Commission recommendation and action options. Commissioner Hoppock asked if Mr. Hill owns the south part of the mobile home park but was just leaving it vacant. Mr. Andrew stated yes. Barb Young, 1100 West Grand, wanted to commend Joe Hill for his request for infill and wanted the item to be considered a positive move forward. Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to pass Ordinance No. 19-10996 changing the zoning district classification from I-2 (Light Industrial) to R-2 (Multi-Family Residential) to allow construction of two new residential dwellings at the southwest corner of Reynolds Sh·eet and Lincoln Avenue on first reading. Aye: (4). Nay: (0). Motion carried. (8.2) First reading Ordinance No. 19-10995 requesting annexation of the South Water Treatment Plant site located at the southeast corner of South Ohio Street and East Water Well Road. Dean Andrew, Director of Planning, explained the request, stated due to the property not being contiguous with the city limits, the property could only be annexed in with the consent of the Saline County Commission which would require an additiona] action to approve a resolution that staff has distributed to the commission, and the ordinance. Mr. Andrew asked legal counsel if the motion for the ordinance should be made first. Greg Bengtson, City Attorney, stated yes. He also stated the Kansas Limited Warranty Deed was in hand for signature. Commissioner Hodges asked if staff had approached county staff regardiri.g the annexation and if they were in approval of the annexation. Mr. Andrew stated staff would work with the County Administration to take this item to the Saline County Commission. Mr. Bengtson stated it would depend if the county would hold fee interest of the road in question and stated if the road annexation and impact fee agreement remained active, the county would not require annexation of the road. Mr. Andrew stated the County Counselor was aware of the request and he would be working with the Saline County Planning Deparhnent tomorrow to discuss the request. Jon Blanchard, 1117 State Street, stated the population information would be available soon Page 7 - - "' 19-00~5 z Q. l&J i "' ~ {!! 19-00f6 u 19-0077 and there needed to be a conversation on the potential increases in water bills in the future. Commissioner Hodges stated there was no fiscal impact of the item today and would complete getting the property under our control. Moved by Commissioner Hodges, seconded by Commissioner Hay, to pass Ordinance No. 19- 10995 requesting annexation of the South Water Treatment Plant site located at the southeast comer of South Ohio Street and East Water Well Road on first reading. Aye: (4). Nay: (0). Motion carried. Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to adopt Resolution No. 19-7688 requesting the Board of Saline County Commissioners to determine the advisability of the annexation of a tract of land into the City of Salina, Kansas and give its consent to such annexation. Aye: (4). Nay: (0). Motion carried. OTHER BUSINESS (9.1) Request for executive session (legal). 1 move the city commission recess into executive session for _ minutes to discuss the subject of negotiations relating to site acquisition for the Police Training Center/Range with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship pursuant to KS.A. 45-7319(b)(2). The open meeting will resume in this room at p.m. Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to recess into executive session for 30 minutes to discuss the subject of negotiations relating to site acquisition for the Police Training Center/Range with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship, pursuant to KS.A. 45-7319(b)(2),. The open meeting will resume in this room at 8:05 p.m. Aye: (5). Nay: (0). Motion carried. The City Commission took a 5 minute break at 7:30 p.m. and recessed into executive session at 7:35 p.m. and reconvened at 8:05 p.m. No action was taken. 19-0078 Moved by Commissioner .Hodges, seconded by Commissioner Hoppock, to recess into executive session for 10 minutes to discuss the subject of negotiations relating to site acquisition for the Police Training Center/Range with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship, pursuant to KS.A. 45-7319(b)(2),. The open meeting will resume in this room at 8:16 p.m. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 8:06 p.m. and reconvened at 8:16 p.m. No action was taken. ADJOURNMENT 19-0079 Moved by Commissioner Hay, seconded by Commissioner Hodges, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 8:16 p.m. - Page 8 - - - "' "' [SEAL] ATIEST: ~~~ Shandi Wicks, CMC, City Clerk Trent W. Davis, M.D., Mayor Page9 RESOLUTION N0.19-7679 A RESOLUTION AUTHORIZING AND PROVIDING FOR THE DESIGN, CONSTRUCTION AND IMPROVEMENT OF A PUBLIC BUILDING IN THE CITY OF SALL"'lA, KANSAS AND PROVIDING FOR THE PAYMENT OF THE COSTS THEREOF. WHEREAS, the City of Salina (the "City") is authorized and empowered pursuant to K.S.A. 12- 1736 el seq. (the "Act") to erect or construct, acquire a public building or buildings and procure any necessary site therefore and may alter, repair, reconstruct, remodel. replace or make additions to, furnish and equip a public building or buildings; and WHEREAS, the City is authorized and empowered pursuant to the Act to issue general obligation bonds for the purpose of financing the costs associated with the foregoing; and WHEREAS, the governing body of the City hereby finds and detennines that it is necessary to authorize and provide for the construction and improvement of certain public buildings in the City, as more fully described herein, and to provide for the payment of the costs thereof. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNL~G BODY OF THE CITY OF SALL~A, KANSAS, AS FOLLOWS: Section 1. Project Authorization. The governing body of the City hereby finds and detennines that it is necessary to make the following improvements: Improvements to parking facilities at and adjacent to the Police Department headquarters, including the design, construction and improvement of a new surface parking Jot located at the nonhwest comer of Elm and IOlh Street, including improving any adjacent surface parking or property, and all other necessary improvements and equipment related thereto (the "Improvements"). Section 2. Project Financing. The estimated cost of the Improvements is $400,000. The cost of the Improvements and the associated financing costs shall be payable from the proceeds of general obligation bonds and/or temporary notes of the City issued under the authority of the Act. Section 3. Reimbursement. The City expects to make capital expenditures in connection with the Improvements and intends to reimburse itself for such expenditures with the proceeds of general obligation bonds and/or temporary notes in 'an amount not to exceed $400,000, plus associated financing costs and costs of issuance. Any general obligation bonds and/or temporary notes issued under the authority of this Resolution may be used to reimburse expenditures made on or after the date that is 60 days before the date of adoption of this Resolution pursuant to U.S. Treasury Regulation §1.150-2. Section 4. This Resolution shall take effect and be in full force immediately after its adoption by the governing body of the City. ADOPTED by the governing body of the City of Salina, Kansas, on March 1I,2019. (SEAL) AITEST: . ~wii. 11 )lJ.U Shandi Wicks, CMC, City Clerk 2 EXCERPT OF rtflNUTES OF A MEETING OF THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS HELD ON JUNE 5, 2017 The governing body met in regular session at the usual meeting place in the City, at 4:00 p.m., the following members being present and participating, to-wit: Present: Mayor Kaye J. Crawford (presiding). Commissioners Jon Blanchard, Trent Davis. Melissa Rose Hodges, and Karl Ryan. The Mayor declared that a quorum was present and called the meeting to order. (Other Proceedings) Thereupon, there was presented for first reading an Ordinance entitled: AN ORDINANCE OF THE CITY OF SALINA, KANSAS, AUTHORIZING AND PROVIDING FOR THE CONSTRUCTION OF CERTAIN IMPROVEMENTS RELATING TO THE SMOKY lllLL RIVER RENEWAL PROJECT IN THE CITY; AND AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS OF THE CITY TO PAY THE COSTS THEREOF. Thereupon, Commissioner Ryan moved that said Ordinance be approved on first reading. The motion was seconded by Commissioner Davis. Said Ordinance was duly read and considered, and upon being put, the motion for approval was carried by the vote of the governing body, the vote being as follows: Yea: Mayor Kaye J. Crawford (presiding), Commissioners Jon Blanchard, Trent Davis. Melissa Rose Hodges. and Karl Ryan. (Other Proceedings) [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] CERTIFICATE I hereby certify that the foregoing Excerpt of Minutes is a true and correct excerpt of the (S proceedin e-g . filing body of the City of Salina, Kansas held on the date stated therein, and that the offi & ~~.?.'!~~~~proceedings are on file in my office. ~'..i~-p.GA.~IZc;\\. , · .. . . ----. . -0: : '~ \ '~ 1870 ::·:, ~ ••• Poli_, ... ,! .. \», ••••• • ..... ·{_·. ,· t.P ••••••••• . J ShaniWicks, CMC, City Clerk "'hA;/ .-..-_.,,,- (Signature page to Excerpt of Minutes) CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS June 12, 2017 4:00p.m. The City Commission convened at 1:00 for the Expo Center Tour and at 3:45 p.m. for Citizens Forum. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and comprising a quorum: Mayor Kaye J. Crawford (presiding), Commissioners Jon Blanchard, Trent Davis, Melissa Rose Hodges, and Karl Ryan. Also present: Jason Gage, City Manager; Michael Schrage, Deputy City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Oerk. AWARDS AND PROCLAMATIONS (3.1) The month of June, 2017 as "Elder Abuse Awareness Month" in the city of Salina. Courtney Train, Domestic Violence Association of Central Kansas (DV .AO<) Community Outreach and Engagement Coordinator, read the proclamation and highlighted activities for the event. (3.2) The day of June 18, 2017 as the "100th Anniversary of City Management Day" in the city of Salina. Rachel Hinde, Community Engagement Coordinator, read the proclamation. Mayor Crawford thanked the City of Salina management for all of their hard work. CmZENS FORUM None. PuBLIC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME (5.1) Public hearing and report on Petition No. 4386, (filed by Lewis Erickson, on behalf of Foley Equipment Company), requesting the vacation of KDOT acquired right-of- way west of the right-of-way line for North Ohio Street and vacation of the platted restricted access along the south side of the access road abutting Lot 1, Block 1 of the Re plat of Foley Addition to the City of Salina, Saline County, Kansas. Dean Andrew, Director of Planning, stated due to the need for further analysis of the affected parties' property interests involved in the vacation request, staff would recommend that the public hearing be continued to the July 10, 2017 meeting. Mayor Crawford opened the public hearing. 17-0156 Moved by Commissioner Ryan, seconded by Commissioner Davis, to continue the public hearing requesting the vacation of KOOT acquired right-of-way west of the right-of-way line for North Ohio Street and vacation of the platted restricted access along the south side of the access road abutting Lot 1, Block 1 of the Replat of Foley Addition to the City of Salina, Saline County, Kansas to the July 10, 2017 meeting. Aye: (5). Nay: (0). Motion carried. Page 1 z c. "' CONSENT AGENDA (6.1) Approve the minutes of June 5, 2017. (6.2) (6.3) Authorize piping repair in three (3) aeration basins at the Wastewater Treatment Plant by Walters-Morgan Construction, Inc., Manhattan, Kansas in the amount of $42,450.00. Authorize the Mayor to sign the agreement with Otarles and Kathleen Elsea, 508 E. Country Club Road, for payment of cost to relocate landscape and related items on the Country Oub Road Improvements, Project No. 63143, in the amount of $34,945.30. (6.4) Acceptance of public sidewalk easement dedications on the west side of Fairdale Road adjacent to Meadowlark Ridge Elementary School and on the south side of Pueblo Avenue adjacent to Sunset Elementary School. Commissioner Blanchard requested that Item 6.3 be removed from the consent agenda. 17-0157 Moved by Commissioner Blanchard, seconded by Commissioner Hodges, to approve the consent agenda items 6.1, 6.2 and 6.4. Aye: (5). Nay: (0). Motion carried. (6.3) Authorize the Mayor to sign the agreement with Otarles and Kathleen Elsea, 508 E. Country Oub Road, for payment of cost to relocate landscape and related items on the Country Oub Road Improvements, Project No. 63143, in the amount of $34,945.30. Commissioner Blanchard provided his thoughts on the past practice of improvements in the right-of-way, asked how projects were typically handled and the bidding process. Dan Stack, City Engineer, stated the improvements to relocate the landscape and related items for 508 E. Country Oub Road were bid with-the Country Club Road Improvements project but the property owner preferred to have the landscaping company they worked with to perform the work. He continued to state that there could be some savings on the project with the landscape company performing the work. Commissioner Blanchard asked if there was a waiver for improvements within the right-of- way. Mr. Stack stated that the addition of a waiver could be an option that staff could look into. Mayor Crawford asked if the landscape improvements did not meet the owner's wishes, what would happen. Mr. Stack stated the agreement was between the City of Salina and the property owner but the City of Salina would pay the contractor once the owner was satisfied with the landscape improvements. Commissioner Blanchard asked if these types of agreements would come to the City Commission in the future. Jason Gage, City Manager, stated the agreement came before the City Commission due to the agreement being with the property owner. He continued to state that the City of Salina typically would return the property back to its original condition after a project was completed. A conversation ensued between the Commission, Mr. Stack and Mr. Gage regarding the neighborly approach to returning property back to its original condition. 17-0158 Moved by Commissioner Blanchard, seconded by Commissioner Davis, to authorize the Mayor to sign the agreement with Charles and Kathleen Elsea, 508 E. Country Oub Road, for payment of Page2 z II. w . -~ ~ ! ! 17-0159 cost to relocate landscape and related items on the Country Club Road Improvements, Project No. 63143, in the amount of 534,945.30. Aye: (5). Nay: (0). Motion carried. ADMINISTRATION (7.1) Second reading Ordinance No. 17-10884 changing the zoning disbict classification from R (Single-Family Residential) to 1-2 (Light Industrial) on property addressed as 1123-1127 Van Home. Mayor Crawford noted that Ordinance No. 17-10884 was passed on first reading on June 5, 2017 and since that time no comments have been received. Moved by Conunissioner Hodges, seconded by Commissioner Ryan, to adopt Ordinance No. 17- 10884 on second reading. A roll call vote was taken. Aye: (5) Blanchard, Davis, Hodges, Ryan, Crawford. Nay: (0). Motion carried. {7.2) Second reading Ordinance No. 17-10887 amending the Future Land Use Map (Figure 2.1) of the Salina, Kansas Comprehensive Plan to change the future land use designation of the northwest comer of South Fifth Street and Prescott.Avenue from future Urban Residential to future Hospital-Medical. Mayor Crawford noted that Ordinance No. 17-10887 was passed on first reading on June 5, 2017 and since that time no comments have been received. 17-0160 Moved by Com.missioner Davis, seconded by Commissioner Hodges, to adopt Ordinance No. 17- 10887 on second reading. A roll call vote was taken. Aye: (5) Blanchard, Davis, Hodges, Ryan, Crawford. Nay: (0). Motion carried. (7.3) Second reading Ordinance No. 17-10885 authorizing and providing for the construction of certain improvements relating to the Smoky Hill River Renewal Project in the city and authorizing the issuance of General Obligation Bonds of the City to pay the costs thereof. Mayor Crawford noted that Ordinance No. 17-10885 was passed on first reading on June 5, 2017 and since that time no comments have been received. · 17-0161 Moved by Commissioner Ryan, seconded by Conunissioner Hodges, to adopt Ordinance No. 17- 10885 on second reading. A roll call vote was taken. Aye: (5) Blanchard, Davis, Hodges, Ryan, Crawford. Nay; (0). Motion carried. (7.4) Second reading Ordinance No. 17-10888 authorizing and providing for the construction of certain street, waterline, and storm sewer improvements related to the Downtown Streetscape project in the city; and authorizing the issuance of General Obligation Bonds and Utility System Revenue Bonds of the city to pay the costs thereof. · Mayor Crawford noted that Ordinance No. 17-10888 was passed.on first reading on June 5, 2017 and since that time no comments have been received. 17-0162 Moved by Commissioner Hodges, seconded by Commissioner Ryan, to adopt Ordinance No. 17- 10888 on second reading. A roll call vote was taken. Aye: (5) Blanchard, Davis, Hodges, Ryan, Crawford. Nay: (0). Motion carried. Page3 17-0163 (7.5) Resolution No. 17-7460 approving a contract for the design and engineering of the Police Training Center/Range facility. Chief Brad Nelson explained the project, contract, fiscal impact and action options. Commissioner Hodges asked for information on a potential public/private partnership. Jason Gage, City Manager, stated the new potential facility was still in the planning stages and the facility would not fully meet the requirements for a city training facility. Commissioner Hodges asked if there was a plan on what could be used while the facility was being constructed. Chief Nelson stated both the Kansas Highway Patrol and the United States Army have offered their facilities for use by the Salina Police Department during the construction of the new facility. Moved by Commissioner Davis, seconded by Commissioner Ryan, to adopt Resolution No. 17- 7460 approving a contract with Police Facility Design Group for design and engineering of the Police Training Center/Range facility. Aye: (5). Nay: (0). Motion carried. (7.6) Award the contract for 2017 Bridge Rail Painting, Project No. 70015. Dan Stack, City Engineer, explained the project, bids received, fiscal impact and action options. Commissioner Hodges asked for the life expectancy of the bridge and rails. Mr. Stack stated the bridge was six (6) years old and in good shape with good structural hand rails. He continued to state the bridge would be able to last tluough its twenty (20) year expectancy. Commissioner Hodges asked what the color of the bridge hand rails would be. Mr. Stack stated the hand rails would be painted black. Commissioner Blanchard asked if there was another option to take the project overage from instead of the pavement sealing. Jason Gage, City Manager, stated staff could look into the sales tax fund to cover the overage. Commissioner Blanchard asked if a project came in under budget could the remaining project budget amount be kept to use for overages on other projects. Mr. Gage stated staff could take that approach for future projects. 17-0164 Moved by Commissioner Hodges, seconded by Commissioner Blanchard, to award the contract for Project No. 70015, 2017 Bridge Painting to Thomas Industrial Coatings of Pevely, MO in the amount of $70,400.00 with a 10% construction contingency ($7,040.00). Aye: (5). Nay: (0). Motion carried. DEVELOPMENT BUSINESS None. OTHER BUSINESS Mayor Crawford thanked the staff and volunteers for their hard work on the Smoky Hill River Festival. Commissioner Blanchard asked for an update on the STAR Bond legislation. Jason Gage, City Manager, stated the Kansas House of Representatives and Kansas Senate approved a tax bill that was vetoed by the Governor but both the Kansas House of Representatives and Kansas Senate were able to come up with enough votes to pass through the tax bill. He Page4 17-0166 continued to state that the STAR Bond legislation was approved therefore the City of Salina project would be able to move forward as planned. (9.1) Request for executive session (legal). Moved h}' Commissioner Davis, seconded by Commissioner Blanchard, to recess into executive session for 45 minutes to discuss legal counsel matters subject to the attorney-client privilege for the reason that public discussion of those matters would waive the privilege and adversely affect the City's interest in the matters and to discuss confidential data relating to the trade secrets of a business entity for the reason that public discussion of the information would competitively disadvantage the business entity and reconvene at 5:45 p.m. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 5:00 p.m. and reconvened at 5:45 p.m. No action was taken. Moved by Commissioner Ryan, seconded by Commissioner Hodges, to extend the current executive session for an additional 65 minutes. Aye: (5). Nay: (0). Motion carried. The City Commission recessed into executive session at 5:45 p.m. and reconvened at 6:50 p.m. No action was taken. ADJOURNMENT 17-0167 Moved by Commissioner Ryan, seconded by Commissioner Hodges, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 6:50 p.m. [SEAL) AlTEST: ~LOW Shandi Wicks, CMC, City Clerk Page5 Summary published in The Salina Journal on June.!?__, 2017 Posted oo the City of Salina website from June ·) '2-> -1? . 2017 ORDJNANCE NO. 17-10885 AN ORDJNANCE OF THE CITY OF SALINA, KANSAS, AUTHORIZING AND PROVIDING FOR TIIE CONSTRUCTION OF CERTAIN IMPROVEMENTS RELATING TO THE SMOKY HILL RIVER RENEWAL PROJECT IN THE CITY; AND AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS OF THE CITY TO PAY THE COSTS THEREOF. WHEREAS, K.S.A. 12-631 r(a) et seq. (the "Act") provides, in part, that whenever the governing body of any city determines it is necessary to construct stonn sewers, channels, retention basins or drains for the purpose of managing the storm drainage areas of all or any portion of such city and in the unincorporated areas outside of but within three miles of the corporate limits of such city, the governing body may authorize the construction of such storm sewers, channels, retention basins or drains, such construction shall be authorized by ordinance; such ordinance shall designate where such stonn sewers, channels, retention basins or drains shall be located; and WHEREAS, Anicle 12, § 5 of the Constitution of the State of Kansas (the "Home Rule Amendment") and K.S.A. 12-101 empowers cities to detennine their local affairs and government and provides that such power and authority granted thereby to cities shall be liberally construed for the purpose of giving to cities the largest measure of self-government; and WHEREAS, the City of Salina, Kansas (the "City") is a city within the meaning of the Home Rule Amendment; and WHEREAS, the Project (as defined below) is located within the boundaries of the City, and there is no enacnnent of the Kansas legislature which authorizes the City to issue general obligation bonds to provide funds to finance the portion of the Project unrelated to stonn sewer and drainage improvements, or which· prohibits the City from issuing general obligation bonds to provide funds to finance such portions of the Project; and WHEREAS, in order to provide for the general health, safety and welfare of the City and its citizens, the governing body of the City has considered the need to construct certain stonn sewer, river, trail, street and related improvements within the City described as follows (the "Project"): ; and The design, construction, improvement, and restoration of approximately 6.8 miles of the Original Smok")' Hill River alignment within the City and adjacent property (beginning at the flood control levee-inlet structure and ending at the flood control levee-outlet structure}, including any land acquisition necessary therefor, all pursuant to the Smoky Hill River Renewal Master Plan, including, but not limited to: removal of sediment, dredging, filtration, channel cleaning, restoration of stream flow, installation of a concrete channel and other various in-channel river improvements, the construction of a multi-use hiking and biking trail, sidewalk construction and improvements, replacement of drainage pipes and other storm se\\•er and drainage improvements, construction of bridges, various landscaping and aesthetic improvements, and all things necessary and appurtenant thereto WHEREAS, the governing body of the City hereby further finds and detennines that it is necessary and advisable and in the interest of the public health, safety and welfare of the City to authorize the issuance of general obligation bonds of the City to provide funds to finance the Project. I NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CflY OF SALINA, KANSAS: Section 1. Public Benefit. The governing body of the City hereby finds and detennines that construction of the Project is in the interest of the public health, safety and welfare of the City and its citizens. Section 2. Financing Authorization; Reimbursement. The costs of the Project, interest on interim financing and associated financing costs are hereby authorized to be paid, in whole or in part, from the proceeds of general obligation bonds of the City (the "Bonds"), which are hereby authorized to be issued for such purposes pursuant lo the coJlective authority of the Home Rule Amendment, K.S.A. 12· 10 l and the Act. The total estimated costs of the Project arc $27 ,000,000, plus interest on any temporary financing and costs of issuance. The City expects lo make expenditures related to the Project prior to the date of issuance of the Bonds, and hereby declares its intent to use proceeds of such Bonds to reimburse expenditures made on or after the date which is 60 days before the date of this Resolution, pursuant to Treasury Regulation§ 1.150-2. Section 3. Further Authority. The officials of the City, the City's attorney, Gilmore & Bell, P.C., as bond counsel, and other consultants are authorized to proceed with such planning and document preparation as necessary in order to comply with the intent of this ordinance, subject to final approval of such documents by the governing body. Section 4. Effective Date. This Ordinance shall be effective from and after final passage by the governing body, approval and signature by the Mayor and publication once in the official City newspaper by the following summary: Ordinance No. 17-10885 Summary On June 12, 2017, the Governing Body of the City of Salina, Kansas, adopted Ordinance No. 17-10885, authorizing and providing for certain improvements related to the Smoky Hill River Renewal Project and authorizing the issuance of general obligation bonds to pay the costs thereof. The complete text of this ordinance may be obtained or viewed free of charge at the office of the City Clerk, 300 West Ash Street, Salina, Kansas, or on the City's official website address, www.salina-ks.gov, where a reproduction of the original ordinance will be available for a minimum of one week following this summary publication. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 2 PASSED by the go\'eming body of the City of Salina: Kansas, on June 12, 2017 and APPROVED AND IGNED by the Mayor. SEAL) [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] (Signature Page to Ordinance) PUBLICATION SUMMARY OF ORDINANCE NO. 17-10885, PASSED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS ON THE 12rn DAY OF JUNE, 2017 SUMMARY On June 12, 2017, the Governing Body of the City of Salina, Kansas, adopted Ordinance No. 17-10885, authorizing and providing for the construction of certain improvements relating the Smoky Hill River Renewal Project in the City. The complete text of this ordinance may be obtained or viewed free of charge at the office of the City Clerk, 300 West Ash Street, Salina, Kansas, or on the City's official website address, www.salina-ks.gov, where a reproduction of the original ordinance will be available for a minimum of one week following this summary publication. ified this l 21h day of June, 2017. Publish one time and return one Proof of Publication to the City Clerk and one to the City Attorney f · .. L-1; ,. . . . Publisher's Affidavit l, __ _,,Cb.u&.n...,·s ... l)'-• ._f1...,·n .... k..__ ___ , being duly sworn declare that J am a J qal Coprdjnator of THE SALINA JOURNAL, a daily newspaper published al Salina, Saline County, Kansas, and of general circulation in said county, which newspaper has ~n admitted to tht> mnils as second class matter in said county, and continuously and uninterruptedly published for five consecutfre years prior to first ' .'-:\: ... . . publication of attached notice, and that the OrcUrumcc 17·10885 Notice has been correctly published in the entire issue of said newspaper one time, publication being gi\'en in the issue of June 15, Suh!.cribed and swom to bcfof(' me, lhis / b A.O. 20 _L2 Printer•s Fee~ •, .: >; ... - - - "' "' z ll. w "' c ~ en ..:, ., ~ g 6 u CITY OF SALINA, KANSAS REGULAR MEETING OF THE BOARD OF COMMISSIONERS March 11, 2019 4:00 p.rn. The City Commission convened at 2:30 p.m. for Land Bank Policy and at 3:45 p.m. for Citizens Forum at City-County Building, Room 107. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of silence. Those present and compnsmg a quorum: Mayor Trent W. Davis, M.D. (presiding), Commissioners Joe Hay, Jr., Melissa Rose Hodges, and Mike Hoppock. Also present: Michael Schrage, City Manager; Greg Bengtson, City Attorney; and Shandi Wicks, City Clerk. Absent: Karl Ryan AWARDS AND PROCLAMATIONS (3.1) Special Recognition for the Salina Police Department. Mayor Davis read the Award of Valor and presented the Award of Valor plaques to Sergeant Kyle Tonniges, Officer Michael Baker and Officer Kevin Reay. CITIZENS FORUM None. PUBLIC HEARINGS AND ITEMS SO-IEDULED FOR A CERTAIN TIME None. CONSENT AGENDA (6.1) Approve the minutes of March 4, 2019. 19-0065 Moved by Commissioner Hodges, seconded by Commissioner Hay, to approve the consent agenda as presented. Aye: (4). Nay: (0). Motion carried. ADMINISTRATION (7.1) Resolution No. 19-7679 authorizing and providing for construction of additional parking for the Police Department and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Debbie Pack, Director of Finance & Administration, explained the project, request, fiscal impact and action options. Commissioner Hodges asked if the project was following the normal sequence of events for the ORT meeting. Michael Schrage, City Manager, stated there had been a ORT meeting for the project but the zoning change had not occurred. He further stated the normal sequence of events had varied for projects in the past and staff was working lo create a standard sequence. Page 1 - - - 19-00M w ~ ~ a: 1ii 'O ~ c 8 Commissioner Hodges provided her though ls on the sequence of events for projects. Commissioner Hoppock stated there was another agenda item pertaining to bonding of the items. Mr. Schrage stated that bond counsel was in atlendance to discuss other options such as cash financing. Moved by Commissioner Hoppock, seconded by Commissioner Hodges, lo adopl Resolution No. 19-7679 authorizing and providing for construction of additional parking_ for the Police Deparlmenl and auU1orizing the issuance of Temporary Notes and/or General Obligation Bonds of the City to pay the costs thereof. Aye: (4). Nay: (0). Motion carried. (7.2) Resolulion No. 19-7678 authorizing and providing for replacement of irrigation system at the Municipal Golf Course and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Debbie Pack, Director of Finance & Administration, explained the project, request, fiscal impact and action options. Commissioner Hoppock asked if there were other projects to be completed under the Parks Master Plan would there be funds available in the property tax fund. Ms. Pack stated if this project was approved, there would not be additional funds available in this fund but could be in other funds or utilizing cash. Gina Riekhof, Gilmore & Bell, explained the funding options for the project and Charter Ordinance No. 39. Commissioner Hodges asked if the Charter Ordinance was the home rule power. Ms. Riekhof stated there was a provision in the Kansas Constitution that permitted home rule powers and continued to explain State Statute KSA 13-1024A and Charter Ordinance No. 39. Commissioner Hodges asked if the City of Salina had maxed out the limit on a project in the charter ordinance in the past and continued to fund the project in the next year through the same charter ordinance. Ms. Riekhof stated she was not aware of it occurring in the past but mentioned that Charter Ordinance No. 39 did waive the election requirement. Commissioner Hay asked when the project was actually supposed to start. Scott Garrie, Deputy Director of Parks & Recreation, stated the intent was to have the project start after September but had received some feedback wanting the construction to start sooner. Mike Hargrave, Golf Course Manager, stated the main lines were scheduled to be dug in late July and early August and begin the laterals by early September. Commissioner Hoppock asked what the major deficiencies were and what would happen if nothing was done. Mr. Garrie stated the budget for irrigation maintenance was $15,000 yearly and the cost continues to increase on a yearly basis. Mr. Hargrave stated the maintenance of the system continues to take additional time of the maintenance staff. Commissioner Hodges stated that the system had been depleting for at least 10 years. Mr. Hargrave stated at least if not longer. Commissioner Hoppock asked who was performing the cash flow analysis of the property tax fund. Ms. Pack stated there was an amortization schedule attached to agenda item 7.4. Michael Schrage, City Manager, stated staff had conversations with bond counsel on refinancing the bonds to even out the amortization schedule in the future. Ms. Pack stated she performed the amortization schedule and explained the schedule created. Page 2 - - - Commissioner Hodges asked for information on the debt service fund. Ms. Pack stated the debt service fund balance at the end of 2018 was $600,000. She continued to provide information on projects within the debt service fund. Jon Blanchard, 1117 State Street, provided information on Charter Ordinance No. 39, his thoughts on the project and asked the City Commission to look at additional alternatives for financing. Commissioner Hodges asked if the City Commission would like to amend the charter ordinance what that would look like. Mr. Schrage stated it would need to be prepared and brought back for consideration and asked if Ms. Riekhof would explain the amendment requirements. Ms. Riekhof stated staff would need to know what the amendment to the charter ordinance would be. She asked Greg Bengtson, City Attorney, if the ordinance could be approved on two readings on the same date. Greg Bengtson, City Attorney, stated the ordinance would be able to be approved on both readings on the same day with a 2/3 majority vote. Ms. Riekhof further stated the ordinance would require two (2) readings with a 2/3 majority vote and once passed the ordinance would need to be published once a week for two weeks and a 60 day protest period before the charter ordinance would go into effect. Mayor Davis asked if bond counsel could review the options for the $500,000 balance. Ms. Riekhof stated lease purchasing, cash financing, phasing the project over multiple years, or resizing the project to fit the $1 million dollar amount. A conversation ensued between the City Commission regarding the financing options. Commissioner Hoppock asked if there was a reason Charter Ordinance No. 39 listed $1 million dollars for public parks. Mr. Schrage explained the history of the various charter ordinance adoptions. Mayor Davis provided his thoughts on the current request and Charter Ordinance No. 39. Mr. Bengtson stated the amount was not the crucial amendment to addressing the policy decision. He further stated the charter ordinance would need to be amended to limit the bonding amount and the overall project cost. He continued to state the charter ordinance limited the bonding of the project not the project amount and Gilmore & Bell would not have offered this financing option if it was not in line with the charter ordinance. Commissioner Hay asked if the charter ordinance was amended what affect would it have on Agenda Item 7.4. Mr. Schrage stated the debt service financing of the irrigation project would not be able to occur until the charter ordinance amendment went into effect. Mr. Schrage stated if the commission wanted to debt finance $1 million dollars and cash finance the $500,000, conversations would need to occur on the effect on other projects. Commissioner Hodges provided her thoughts on cash financing the remainder of the project. 19-0067 Moved by Commissioner Hoppock, seconded by Commissioner Hay, to adopt Resolution No. 19- 7678 authorizing and providing for replacement of irrigation system at the Municipal Golf Course and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Aye: (3). Nay: (1) Hodges. Motion carried. (7.3) Resolution No. 19-7676 authorizing and providing for improvements to Broadway Boulevard from Crawford Street north to Ash Street and authorizing the issuance of Page3 - - Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof. Debbie Pack, Director of Finance & Administration, explained the project, request, fiscal impact and action options. Commissioner Hodges asked what the investment was on the project so far. Jim Kowach, Director of Public Works, stated approximately $50,000. Commissioner Hodges asked about the scope of the project changing. Mr. Kowach stated staff would like to look at the entire project and thought there was a need for additional engineering and would like to bring the item back for additional scoping. Michael Schrage, City Manager, stated staff asked RDG Planning & Design if the project was paired down would it be able to fit in the $3 million dollar budget. Commissioner Hoppock provided his thoughts on the project and the need for further discussions prior to spending the additional money for design. Mayor Davis asked what the properties would look like beyond the sidewalk. Mr. Schrage stated it was more of a master plan or land use factor and continued to explain what the project would look like if it was phased out. Lauren Driscoll, Director of Community & Development Services, slaled the improvements recommended in the plan would fall within the Comprehensive Plan. Mayor Davis provided his thoughts to the uses of some of the properties and the driveway entrances. A conversation ensued belween the City Commission, Ms. Driscoll and Mr. Schrage regarding the project plan. Commissioner Hodges provided her thoughts on the project and eliminating the budget for brick slreet maintenance. Mr. Schrage slaled this project had been the topic of conversation for years and if the Governing Body had a concern for the design expense, staff could break up the design of the project. Commissioner Hodges stated she would like the project to be part of the Strategic Planning session coming up in April. Commissioner Hay asked if they could look at option 2. Mr. Schrage stated the item could be postponed or could be brought back at a later date. Mr. Kowach stated the project area was close to needing a pavement overlay but there was need of additional investigation of whether the project would need to be completely rebuilt or just a pavement overlay and the investigation would cost approximately $50,000. 19-0068 Moved by Commissioner Hodges, seconded by Commissioner Hay, to postpone consideration of Resolution No. 19-7676 authorizing and providing for improvements to Broadway Boulevard from Crawford Street north to Ash Street and authorizing the issuance of Temporary Notes and/ or General Obligation Bonds of the City to pay the costs thereof with any additional information supplied by staff to Monday, May 6, 2019. Aye: (4). Nay: (0). Motion carried. _The City ommission recessed at 5:45 p.rn. for a 5 minute break. The meeting resumed at 5:50 p.m. (7.4) General Obligation Bonds and Temporary Notes. Page4 - z c.. w m E -;;; VJ E "' "O ~ !S u (7.4a) Resolution No. 19-7682 authorizing the offering for public sale of General Obligation Temporary Notes and Bonds. (7.4b) First reading Ordinance No. 19-10994 authorizing the issuance and delivery of General Obligation Internal Improvement Bonds, Series 2019-A. Debbie Pack, Finance Director, explained the request, fiscal impact and action options. Commissioner Hodges appreciated the extra time and additional information provided by staff and thanked Ms. Riekhof for coming today and preparing a memo regarding the state statutes. Mid1ael Schrage, City Manager, stated one of the items financed was the Pheasant Ridge Addition project and staff chose to put the financing mechanism first then the action for the contract. Jon Blanchard, 1117 State Street, provided his thoughts on the bonding of the downtown streetscape project especially the overhead structures, provided information on the main traffic way act and asked if the legislature intended for overhead structures, benches, trash receptacles and plazas to be part of the main traffic way act. He asked if we were funding part of the downtown streetscape project with STAR Bond money. Mr. Schrage stated the accounting demonstrated how the STAR Bond money would be used. A conversation ensued between Mr. Blanchard, Ms. Pack and Mr. Schrage regarding the financing of the Downtown Streetscape project. Mr. Schrage read a portion of the language included in the staff report from January 17, 2017 pertaining to the scope of the Downtown Streetscape project. -19-0069 Moved by Commissioner Hoppock, seconded by Commissioner Hay, to adopt Resolution No. 19- 7682 authorizing the offering for public sale of General Obligation Temporary Notes and Bonds. Aye: (3). Nay: (1) Hodges. Motion carried. - 19-0070 Moved by Commissioner Hoppock, seconded by Commissioner Hay, to pass Ordinance No. 19- 10994 authorizing the issuance and delivery of General Obligation Internal Improvement Bonds, Series 2019-A on first reading. Aye: (3). Nay: (1) Hodges. Motion carried. (7.5) Award contract for Pheasant Ridge Addition No. 3, Phase II, Project No. 80025. Jim Kowach, Director of Public Works, explained the project, bids received, fiscal impact and action options. Commissioner Hodges asked if there was an overage, would the City be responsible for it. Mr. Kowach stated if there were changes or modifications to the plan, it would be the responsibility of the City. Mayor Davis asked if there were modifications would staff meet with the contractor to discuss. Mr. Kowach stated yes. Joan Ratzlaff, Salina, asked what the prices would be for the houses and lots in the subdivision. Todd Welsh, 221 S. Morris Drive, stated the homes would be in the $225,000 to $325,000 range and the lot prices would remain at $35,000 each. He provided information on the project bids and asked the contingency amount to be returned to the developer instead of to reduce the special assessments. Ms. Ratzlaff provided her thoughts on the Broadway Boulevard Improvements and the Page5 - - - z a. w need for affordable housing. Wayne Nelson, Civil Engineer II, stated the construction contingency allowed for change orders to occur in the field, up to the approved amount and if there was remaining contingency the project final cost would come under the approved amount and the special assessments would be reduced based on the project final cost. Michael Schrage, City Manager, asked in the event the project comes in without using the contingency would the developer's expenses be eligible for reimbursement. Gina Riekhof, Gilmore & Bell, stated a portion of the money paid upfront by Mr. Welsh could be returned if it remained unused. Mr. Schrage stated it was possible the remaining amount could be returned to Mr. Welsh but that would have to be determined at the end of the project. A conversation ensued between the City Commission, Mr. Schrage, Mr. Kowach and Mr. Welsh regarding the ability to refund any remaining construction contingency to the developer. 19-0071 Moved by Commissioner Hay, seconded by Commissioner Hoppock, to award contract for the Pheasant Ridge Addition No. 3, Phase II, Project No. 80025 to APAC-Kansas in the amount of $509,233.15 with a 5% consh·uction contingency of $25,461.66 for a total of $534,694.81. Aye: (3). Nay: (1) Hodges. Motion carried. (7.6) Acceptance transfer of ownership of the Former Schilling Air Force Base Treatment Plant property (Water Well Road & Ohio Street), five water well sites and water transmission lines. Martha Tasker, Director of Utilities, explained the acceptance, the project and action options. Mayor Davis asked if there was a specific change in the motion. Ms. Tasker stated the language should state the Former Schilling Air Force Base Water Treatment Plant Property. Greg Bengtson, City Attorney, stated Tract 108 and 111 were owned by fee title by the Salina Airport Authority and would be owned by fee title by the City of Salina. He continued to state the remaining properties were considered as easements and would be assigned over to the City of Salina. He further stated that staff would be able to include additional information on the document for those easements due to information that was obtained by John Harvey, the City Surveyor. Mr. Bengtson explained the specific sections of the Kansas Limited Warranty Deed. 19-0072 Moved by Commissioner Hay, seconded by Commissioner Hoppock, to accept transfer of ownership of the Former Schilling Air Force Base Water Treatment Plant Property, Tract 108 and 111. Aye: (4). Nay: (0). Motion carried. (7.7) Approve Change Order No. 1 for the Brick Crosswalks, Project No. 80012C. Jim Kowach, Director of Public Works, explained the project, change order, fiscal impact and action options. Commissioner Hodges asked if we were taking Brick Street Rehabilitation off the table. Mr. Kowach stated no, staff was going to pool money from other projects for a significant slormwater repair at the corner of Mulberry & Fifth Street. Page6 -19-00~3 19-0074 - - Michael Schrage, City Manager, stated with the brickwork and the stormwater project at Mulberry and Fifth Street, there would be significant changes to the area. Mr. Kowach stated yes, thal was correct. Moved by Commissioner Hoppock, seconded by Commissioner Hodges, to approve Change Order No. 1 auU1orizing $4,529.10 (Option 2 bid amount minus previous authorization) plus a $2,970.90 (12.1 % of entire project) construction contingency for City Project No. 80012C Brick Crosswalks. Aye: (4). Nay: (0). Motion carried. DEVELOPMENT BUSINESS (8.1) Application No. 219-1, (filed by Joe Hill on behalf of the Joe Hill Trust), requesting a change in zoning district classification from I-2 (Light Industrial) to R-2 (Multi- Family Residential) to allow construction of two new residential dwellings at the southwest corner of Reynolds Street and Lincoln Avenue. (8.la) First reading Ordinance No. 19-10996. Dean Andrew, Director of Planning, explained the request, Planning Commission recommendation and action options. Commissioner Hoppock asked if Mr. Hill owns U1e south part of the mobile home park but was just leaving it vacant. Mr. Andrew stated yes. Barb Young, 1100 West Grand, wanted to commend Joe Hill for his request for infill and wanted the item to be considered a positive move forward. Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to pass Ordinance No. 19-10996 changing the zoning district classification from I-2 (Light Industrial) to R-2 (Multi-Family Residential) to allow construction of two new residential dwellings at the southwest comer of Reynolds Sh·eet and Lincoln Avenue on first reading. Aye: (4). Nay: (0). Motion carried. (8.2) First reading Ordinance No. 19-10995 requesting annexation of the South Water Treatment Plant site located at the southeast corner of South Ohio Street and East Water Well Road. Dean Andrew, Director of Planning, explained the request, stated due to the property not being contiguous with the city limits, the property could only be annexed in with the consent of the Saline County Commission which would require an additional action to approve a resolution that staff has distributed to the commission, and the ordinance. Mr. Andrew asked legal counsel if the motion for the ordinance should be made first. Greg Bengtson, City Attorney, stated yes. He also stated the Kansas Limited Warranty Deed was in hand for signature. Commissioner Hodges asked if staff had approached county staff regarding the annexation and if they were in approval of the annexation. Mr. Andrew stated staff would work with the County Administration to take this item to the Saline County Commission. Mr. Bengtson stated it would depend if the county would hold fee interest of the road in question and stated if the road annexation and impact fee agreement remained active, the county would not require annexation of the road. Mr. Andrew stated the County Counselor was aware of Lhe request and he would be working with the Saline County Planning Department tomorrow to discuss the request. Jon Blanchard, 1117 State Street, stated the population information would be available soon Page 7 - - - .,, 19-00~5 z 0.. UJ ~ iii <J) ¥ {ll 19-00¥6 0 u 19-0077 and there needed to be a conversation on the potential increases in water bills in the future. Commissioner Hodges stated there was no fiscal impact of the item today and would complete getting the property under our control. Moved by Conm1issioncr Hodges, seconded by Commissioner Hay, to pass Ordinance No. 19- 10995 requesting annexation of the South Water Treatment Plant site located at the southeast comer of South Ohio Street and East Water Well Road on first reading. Aye: (4). Nay: (0). Motion carried. Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to adopt Resolution No. 19-7688 requesting the Board of Saline County Commissioners to determine the advisability of the annexation of a tract of land into the City of Salina, Kansas and give its consent to such annexation. Aye: (4). Nay: (0). Motion carried. OTHER BUSINESS (9.1) Request for executive session (legal). 1 move the city commission recess into executive session for _ minutes to discuss the subject of negotiations relating to site acquisition for the Police Training Center/Range with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship pursuant to KS.A. 45-7319(b)(2). The open meeting will resume in this room at p.m. Moved by Commissioner Hodges, seconded by Commissioner Hoppock, to recess into executive session for 30 minutes to discuss the subject of negotiations relating to site acquisition for the Police Training Center/Range with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship, pursuant to KS.A. 45-7319(b)(2),. The open meeting will resume in this room at 8:05 p.m. Aye: (5). Nay: (0). Motion carried. The City Commission took a 5 minute break at 7:30 p.m. and recessed into executive session at 7:35 p.m. and reconvened at 8:05 p.m. No action was taken. 19-0078 Moved by Commissioner .Hodges, seconded by Commissioner Hoppock, to recess into executive session for 10 minutes to discuss the subject of negotiations relating to site acquisition for the Police Training Center/Range with legal counsel based upon the need for consultation with an attorney for the public body which would be deemed privileged in the attorney-client relationship, pursuant to KS.A. 45-7319(b)(2),. The open meeting will resume in this room at 8:16 p.m. Aye: (5). Nay: (0). Motion carried. 19-0079 The City Commission recessed into executive session at 8:06 p.m. and reconvened at 8:16 p.m. No action was taken. ADJOURNMENT Moved by Commissioner Hay, seconded by Commissioner Hodges, that the regular meeting of the Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting adjourned at 8:16 p.rn. Page 8 - - - [SEAL] ATIEST: ~ t\.)~ Shandi Wicks, CMC, City Clerk Trenl W. Davis, M.D., Mayor Page9 "' "' RESOLUTION NO. 19-7682 RESOLUTION AUTHORIZING THE OFFERING FOR SALE OF GENERAL OBLIGATION BONDS, SERIES 2019-A, AND GE~'ERAL OBLIGATION TEMPORARY NOTES, SERIES 2019-1, OF THE CITY OF SALINA, KANSAS. WHEREAS, the City of Salina, Kansas (the "Issuer") has previously authorized certain internal improvements described as follows (collectively, the ''Note Improvements"): Estimated Ordinance/ Improvement Project Description Resolution No. Authority Fund Deposit* Landfill Cell #20 Res. 19-7672 K.S.A. 12-2101 et seq. 2,315,000.00 Ord. 02-10071; North 9th Street Bridge Res No. 19-7677 K.S.A. 12-685 et seq. 500,000.00 Pheasant Ridge Addition No. 3 Res. 18-7633 K.S.A. 12-6a01 et seq. 530,165.28 Police Parking Res. 19-7679 K.S.A. 12-1736 et seq. 400,000.00 Article 12, §5 of the Constitution of the State Smoky Hill River Renewal Ord. 17-10885 of Kansas 2,300,000.00 Total: S6,045, 165.28 • bcludes costs of issuance and interest on any temporary financing. WHEREAS, the governing body of the Issuer is authorized by law to issue general obligation bonds to pay a portion of the costs of the Note Improvements; and WHEREAS, it is necessary for the Issuer to provide cash funds (from time to time) to meet its obligations incurred in constructing the Note Improvements prior to the completion thereof and the issuance of the Issuer's general obligation bonds, and it is desirable and in the interest of the Issuer that such funds be raised by the issuance of temporary notes of the Issuer; and WHEREAS, the Issuer has previously authorized certain internal improvements described as follows (collectively, the "Bond Improvements," and together with the Note Improvements, the "Improvements"): Project Description Downtown Streetscape Golf Irrigation Ordinance/ Resolution No. Ord. 17-10888 Res. 19-7678 Authoritv K.S.A. 12-631 r, 12-685 et seq., K.S.A. 65-163u Charter Ordinance No. 39 Total: Estimated Improvement Fund Deposit $10,200,000* 1,000,000 Sl 1,200,000* •&eludes costs of issuance and interest on any temporary financing on the Downtown Streetscape project. WHEREAS, the Issuer desires to issue its general obligation bonds in order to permanently finance a portion of the costs of such Bond Improvements and to retire a portion of the following temporary notes of the Issuer, which were issued to temporarily finance a portion of the costs of the Improvements (the "Refunded Notes"): Dated Maturity Original Series Date Date Amount 2018-2 November 27, 2018 November 15, 2019 s 13,500,000 ; and WHEREAS, the Issuer has selected the firm of George K. Baum & Co., Kansas City, Missouri ("Financial Advisor"), as financial advisor for one or more series of municipal temporary notes and one or more series of general obligation bonds of the Issuer, to be issued in order to provide funds to pay the costs of the Improvements; and WHEREAS, the Issuer desires to authorize the Financial Advisor to proceed with the offering for sale of said general obligation bonds and general obligation temporary notes and related activities; and WHEREAS, one of the duties and responsibilities of the Issuer is to prepare and distribute a preliminary official statement relating to said general obligation bonds and general obligation temporary notes; and WHEREAS, the Issuer desires to authorize the Financial Advisor and Gilmore & Bell, P.C., Kansas City, Missouri, the Issuer's bond counsel ("Bond Counsel"), in conjunction with the Clerk, and other officers and representati\'es of the Issuer to proceed with the preparation and distribution of a preliminary official statement and notice of sale and to authorize the distribution -thereof and all other preliminary action necessary to sell said general obligation bonds and general obligation temporary notes. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. The Issuer is hereby authorized to offer for sale the Issuer's General Obligation Bonds, Series 2019-A (the ::Bonds"), and General Obligation Temporary Notes, Series 2019-1 (the "Notes," and together with the Bonds, the "Obligations") described in the Notice of Sale, which is to be prepared by Bond Counsel in conjunction with the Financial Advisor and representatives of the Issuer, as authorized below. Section 2. The Mayor and Clerk, in conjunction with the Financial Advisor and Bond Counsel, are hereby authorized to cause to be prepared a Preliminary Official Statement. and such officials and other representatives of the Issuer are hereby authorized to use such document in connection with the sale of the Obligations. Section 3. The Clerk, in conjunction with the Financial Advisor and Bond Counsel, is hereby authorized and directed to give notice-of said bond sale by publishing a summary of the Notice of Sale not less than 6 days before the date of the bond sale in a newspaper of general circulation in Saline County, Kansas, and the Kansas Register and is hereby authorized to distribute-copies of the Notice of Sale and Preliminary Official Statement relating to the Obligations to prospective purchasers of the Obligations. Bids for the purchase of the Obligations shall be submitted upon the terms and conditions set forth in said Notice of Sale, and shall be delivered to the governing body at its meeting to be held on the date of such sale, at which meeting the governing "body shall review such bids and shall award the sale of the Obligations or reject all bids for a particular series of the Obligations. "' ''" z 0.. w Section 4. For the purpose of enabling the purchaser(s) of the Obligations (the "Purchaser(s)") to comply with the requirements of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"), the Mayor, Clerk, City Manager, Finance Director, or other appropriate officers of the Issuer are hereby authorized: (a) to approve the form of said Preliminary Official Statement and to execute the "Certificate Deeming Preliminary Official Statement Final" in substantially the form attached hereto as Exhibit A as approval of the Preliminary Official Statement, such official's signature thereon being conclusive evidence of such official's and the Issuer's approval thereof; (b) covenant to provide continuous secondary market disclosure by annually transmitting certain financial information and operating data and other information necessary to comply with the Rule to the Municipal Securities Rulemaking Board; and (c) take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchaser(s) to comply with the requirement of the Rule. Section S. The Issuer agrees to provide to the Purchaser(s) within seven business days of the date of the sale of the Obligations or within sufficient time to accompany any confirmation that requests payment from any customer of the Purchaser(s), whichever is earlier, sufficient copies of the final Official Statement to enable the Purchaser(s) to comply with the requirements of the Rule and with the requirements of Rule G- 32 of the Municipal Securities Rulemaking Board. Section 6. The Mayor, Clerk, Finance Director and the other officers and representatives of the Issuer, the Financial Advisor and Bond Counsel, are hereby authorized and directed to take such other action as may be necessary to: (a) carry out the sale of the Obligations; and (b) make provision for payment and/or redemption of the Refunded Notes from proceeds of the Obligations. Section 7. This Resolution shall be in full force and effect from and after its adoption. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] ADOPTED by the governing body on March 11, 2019. (SEAL) AITEST: Shandi \Vicks, CMC, City Clerk (Signature Page to Sale Resolution) "' ~ z Q. w .. c 'ii "' -g ~ 0 .. c 0 u To: EXHIBIT A CERTIFICATE DEEMING PRELIMINARY OFFICIAL STATEMENT FINAL March 25, 2019 Re: General Obligation Bonds, Series 2019-A; General Obligation Temporary Notes, Series 2019-1 The undersigned is the duly acting Finance Director of the City of Salina, Kansas (the "Issuer"), and is authorized to deliver this Certificate to the addressee(s) (the "Purchaser(s)") on behalf of the Issuer. The Issuer has previously caused to be delivered to the Purchaser(s) copies of the Preliminary Official Statement (the "Preliminary Official Statement") relating to the above-referenced notes and bonds (the "Obligations"). For the purpose of enabling the Purchaser(s) to comply with the requirements of Rule 1Sc2-12(b)(l) of the Securities and Exchange Commission (the "Rule"), the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be final as of its date, except for the omission of such information as is permitted by the Rule, such as offering prices, interest rates, selling compensation, aggregate principal amount, principal per maturity, delivery dates, ratings, identity of the undernTiters and other terms of the Obligations depending on such matters. CITY OF SALINA, KANSAS By:------------ Title: Finance Director NOTICE OF SALE CITY OF SALINA, KANSAS $6,085,000* GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 $11,445,000* GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2019-A (GENERAL OBLIGATION NOTES AND BONDS PAYABLE FROM UNLIMITED AD VALOREM TAXES) Bids. Written and electronic (as explained below) bids for the purchase of General Obligation Temporary Notes, Series 2019-1 (the "Notes") and General Obligation Internal Improvement Bonds, Series 2019-A (the "Bonds," and collectively with the Notes, the "Obligations") of the City of Salina, Kansas (the "Issuer") herein described will be received on behalf of the Issuer by the Issuer's Financial Advisor, in the case of written bids, at the address hereinafter set forth, and in the case of electronic bids, via PARJTI'®, on APRIL 1, 2019 (the "Sale Date") until the following times (the "Submittal Hour"): SERIES Series 2019-1 Notes Series 2019-A Bonds SUBMITTAL HOUR (Central Time) 12:00 p.m. 1:00 p.m. All bids will be publicly evaluated at said time and place and the award of the Obligations to the successful bidder(s) (the "Successful Bidder(s)") will be acted upon by the City Commission of the Issuer (the "Governing Body") at its meeting to be held at 4:00 p.m. on the Sale Date. No oral or auction bids will be considered. Any qualified bidder may bid on one or both series of the Obligations. Capitalized terms not otherwise defined herein shall have the meanings set forth in the hereinafter referenced Preliminary Official Statement relating to the Obligations. THE NOTES Terms of the Notes. The Notes will consist of fully registered notes in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). The Notes will be dated April 24, 2019 (the "Dated Date"), and will become due on May 1, 2020. The Notes will bear interest from the Dated Date at rates to be determined when the_Notes are sold as hereinafter provided, which interest will be payable at maturity. Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principal amount of the Notes, depending on the purchase price bid, by the Successful Bidder. The Successful Bidder may not withdraw its bid or change the purchase price or interest rate bid as a result of any changes made to the principal amount of the Notes as described herein. If there is an increase or decrease in the final aggregate principal amount of the Notes as described above, the Issuer will notify the Successful Bidder by means of telephone or facsimile transmission, subsequently confirmed in writing, no later than 2:00 p.m. 'Preliminary; subject to change as provided in "Acijustment of Issue Size," herein. applicable Central Time, on the Sale Date. The actual purchase price for the Notes shall be calculated by applying the percentage of par value bid by the Successful Bidder against the final aggregate principal amount of the Notes, as adjusted, plus accrued interest from the Dated Date to the Closing Date (as hereinafter defined). Place of Payment. The principal of and interest on the Notes will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Note Registrar"). The principal of and interest on each Note will be payable at maturity or earlier redemption to the owner thereof whose name is on the registration books (the "Note Register") of the Note Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. Such amounts will be payable to the Registered Owner of such Note as of the fifteenth day (whether or not a business day) of the calendar month next preceding each Interest Payment Date (the "Record Date") (a) mailed by the Paying Agent to the address of such Registered Owner as shown on the Note Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Registered Owner of $500,000 or more in aggregate principal amount of Notes, by wire transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the wire transfer address to which such Registered Owner wishes to have such wire directed. Note Registration. The Notes will be registered pursuant to a plan of registration approved by the Issuer and the Attorney General of the State of Kansas (the "State"). The Issuer will pay for the fees of the Note Registrar for registration and transfer of the Notes and will also pay for printing a reasonable supply of registered note blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, will be the responsibility of the Registered Owners. Redemption of Notes Prior to Maturity. General. Whenever the Issuer is to select Notes for the purpose of redemption, it will, in the case ofNotes in denominations greater than the minimum Authorized Denomination, ifless than all of the Notes then outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such fully registered Note as though it were a separate Note in the minimum Authorized Denomination. Optional Redemption. At the option of the Issuer, the Notes will be subject to redemption and payment prior to maturity on November l, 2019, and thereafter, as a whole at any time or in part (selection of the amount of Notes to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the date of redemption. Notice and Effect of Call for Redemption. Unless waived by any owner of Notes to be redeemed, ifthe Issuer shall call any Notes for redemption and payment prior to the maturity thereof, the Issuer shall give written notice of its intention to call and pay said Notes to the Note Registrar. In addition, the Issuer shall cause the Note Registrar to give written notice of redemption to the registered owners of said Notes. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the Redemption Date. All notices ofredemption shall state the Redemption Date, the redemption price, the Notes to be redeemed, the place of surrender of Notes so called for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by State law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Note be called for redemption and payment as aforesaid, all interest on such Note shall cease from and after the Redemption Date, provided funds are available for its payment at the price hereinbefore specified. 2 Authority, Purpose and Security for the Notes. The Notes are being issued pursuant to K.S.A. 10-101 to 10-125, inclusive, specifically including K.S.A. 10-123, K.S.A. 10-620 et seq., K.S.A. 12-63 lr ands, K.S.A. 12-685 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented, and a resolution adopted by the Governing Body (the "Note Resolution") for the purpose of paying a portion of the cost of certain public improvement projects and to pay costs associated with issuance of the Notes. The Notes shall be general obligations of the Issuer, payable as to both principal and interest in part from special assessments levied upon the property benefitted by the construction of certain public improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. THE BONDS Terms of the Bonds. The Bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). The Bonds will be dated April 24, 2019 (the "Dated Date"), and will become due in principal installments on October 1 in the years as follows: Principal Principal Year Amount• Year Amount* 2020 $265,000 2030 $580,000 2021 435,000 2031 595,000 2022 450,000 2032 620,000 2023 465,000 2033 640,000 2024 475,000 2034 660,000 2025 495,000 2035 680,000 2026 510,000 2036 700,000 2027 525,000 2037 725,000 2028 540,000 2038 750,000 2029 565,000 2039 770,000 The Bonds will bear interest from the Dated Date at rates to be determined when the Bonds are sold as hereinafter provided, which interest will be payable semiannually on April l and October 1 in each year, beginning on April l, 2020 (the "Interest Payment Dates"). Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principal amount of the Bonds or the schedule of principal payments described above, depending on the purchase price and interest rates bid, by the Successful Bidder. The Successful Bidder may not withdraw its bid or change the purchase price or interest rates bid as a result of any changes made to the principal amount of the Bonds or the schedule of principal payments as described herein. If there is an increase or decrease in the final aggregate principal amount of the Bonds or the schedule of principal payments as described above, the Issuer will notify the Successful Bidder by means of telephone or facsimile transmission, subsequently confirmed in writing, no later than 2:00 p.m. applicable Central Time, on the Sale Date. The net production * Preliminary; subject to change as provided in "Adjustment of Issue Size, "herein. 3 as a percentage of the principal amount of the Bonds generated from the bid of the Successful Bidder will not be decreased as a result of any change to the total principal amount of the Bonds or the schedule of principal payments described herein. Notwithstanding the requirements of the section entitled "Establishment of Issue Price," if requested by the Financial Advisor, the Successful Bidder shall within 20 minutes of such request provide the Financial Advisor with the initial offering prices of the Bonds to the public so as to allow for proper resizing of the Bonds. Place of Payment. The principal of and interest on the Bonds will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The principal of each Bond will be payable at maturity or earlier redemption to the owner thereof whose name is on the registration books (the "Bond Register") of the Bond Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. Interest on each Bond will be payable to the Registered Owner of such Bond as of the fifteenth day (whether or not a business day) of the calendar month next preceding each Interest Payment Date (the "Record Date") (a) mailed by the Paying Agent to the address of such Registered Owner as shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Registered Owner of $500,000 or more in aggregate principal amount of Bonds, by wire transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the wire transfer address to which such Registered Owner wishes to have such wire directed. Bond Registration. The Bonds will be registered pursuant to a plan of registration approved by the Issuer and the Attorney General of the State of Kansas (the "State"). The Issuer will pay for the fees of the Bond Registrar for registration and transfer of the Bonds and will also pay for printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, will be the responsibility of the Registered Owners. Redemption of Bonds Prior to Maturity. General. Whenever the Issuer is to select Bonds for the purpose ofredemption, it will, in the case of Bonds in denominations greater than the minimum Authorized Denomination, ifless than all of the Bonds then outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such fully registered Bond as though it were a separate Bond in the minimum Authorized Denomination. Optional Redemption. At the option of the Issuer, Bonds maturing on October 1 in the years 2027, and thereafter, will be subject to redemption and payment prior to maturity on October 1, 2026, and thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the date of redemption. Mandatory Redemption. A bidder may elect to have all or a portion of the Bonds scheduled to mature in consecutive years issued as term bonds (the "Term Bonds") scheduled to mature in the latest of said consecutive years and subject to mandatory redemption requirements consistent with the schedule of serial maturities set forth above, subject to the following conditions: (a) not less than all Bonds of the same serial maturity shall be converted to Term Bonds with mandatory redemption requirements; and (b) a bidder shall make such an election by completing the applicable paragraph on the Official Bid Form or completing the applicable information on PARITr®. 4 Notice a11d Effect of Cal/for Redemption. Unless waived by any owner of Bonds to be redeemed, if the Issuer shall call any Bonds for redemption and payment prior to the maturity thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the Bond Registrar. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the registered owners of said Bonds. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the Redemption Date. All notices of redemption shall state the Redemption Date, the redemption price, the Bonds to be redeemed, the place of surrender of Bonds so called for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by State law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Bond be called for redemption and payment as aforesaid, all interest on such Bond shall cease from and after the Redemption Date, provided funds are available for its payment at the price hereinbefore specified. Authority, Purpose and Security for the Bonds. The Bonds are being issued pursuant to K.S.A. 10-101to10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-631r, K.S.A. 12-685 et seq., K.S.A. 65-163u, Charter Ordinance No. 39 of the Issuer and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented, and an ordinance and a resolution adopted by the Governing Body (collectively, the "Bond Resolution") for the purpose of paying a portion of the cost of certain public improvement projects, to pay the costs associated with the issuance of the Bonds and retire a portion of the Issuer's outstanding general obligation temporary notes. The Bonds shall be general obligations of the Issuer payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal and interest on the Bonds as the same become due. THE OBLIGATIONS Book-Entry-Only System. The Depository Trust Company, New York, New York ("DTC"), will act as securities depository for the Obligations. The Obligations will initially be issued exclusively in "book entry" form and shall be initially registered in the name of Cede & Co., as the nominee of DTC and no beneficial owner will receive certificates representing their interests in the Obligations. During the term of the Obligations, so long as the book-entry-only system is continued, the Issuer will make payments of principal of, premium, if any, and interest on the Obligations to DTC or its nominee as the Registered Owner of the Obligations, DTC will make book-entry-only transfers among its participants and receive and transmit payment of principal of, premium, if any, and interest on the Obligations to its participants who shall be responsible for transmitting payments to beneficial owners of the Obligations in accordance with agreements between such participants and the beneficial owners. The Issuer will not be responsible for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. In the event that: (a) DTC determines not to continue to act as securities depository for the Obligations, or (b) the Issuer determines that continuation of the book-entry-only form of evidence and transfer of ownership of the Obligations would adversely affect the interests of the beneficial owners of the Obligations, the Issuer will discontinue the book-entry-only form of registration with DTC. If the Issuer fails to identify another qualified securities depository to replace DTC, the Issuer will cause to be authenticated and delivered to the beneficial owners replacement Bonds in the form of fully registered certificates. Reference is made to the Preliminary Official Statement for further information regarding the book-entry-only system of registration of the Obligations and DTC. Submission of Bids. Written bids must be made on forms which may be procured from the Clerk or the Financial Advisor and shall be addressed to the undersigned, and marked "Proposal for General Obligation Temporary Notes, Series 2019-1" or "Proposal for General Obligation Internal Improvement Bonds, Series 2019-A," as applicable. Written bids submitted by facsimile should not be preceded by a cover sheet and should be sent only once to (785) 309-5711. Confirmation ofreceipt of facsimile bids may 5 be made by contacting the Financial Advisor at the number listed below. Electronic bids via PARITJ'® must be submitted in accordance with its Rules of Participation, as well as the provisions of this Notice of Sale. If provisions of this Notice of Sale conflict with those of PARITJ'®, this Notice of Sale shall control. Bids must be received prior to the Submittal Hour on the Sale Date. The Issuer shall not be responsible for failure of transmission of facsimile or delivery by mail or in person of any bid. Any bidder desiring to have the Financial Advisor assist in the delivery of such bidder's bid should provide pertinent bidding information to the Financial Advisor not later than 30 minutes prior to the Submittal Hour on the Sale Date. PARITY®. Information about the electronic bidding services of PAR/Ty® may be obtained from i-Deal LLC at 1359 Broadway, 2nd Floor, New York, New York 10018, Phone No. (212) 849-5023 and from the following website: www.newissuehome.i-dea l.com. Conditions of Bids. Bids shall be submitted separately for each series of the Obligations. The Notes: Proposals will be received on the Notes bearing such rate of interest as may be specified by the bidders, subject to the following conditions: (a) the same rate shall apply to all Notes; (b) the interest rate may not exceed 5.00%; (c) no supplemental interest payments will be considered; (d) the interest rate specified shall be a multiple of 11100 or 1/8of1%; and (e) the interest rate shall not be zero (0%) percent. No bid for less than 99.50% of the principal amount of the Notes, and accrued interest thereon to the date of delivery will be considered. Each bid shall specify the total interest cost (expressed in dollars) during the term of the Notes on the basis of such bid, the discount, if any, the premium, if any, offered by the bidder and the net interest cost (expressed in dollars) on the basis of such bid. Each bidder shall certify to the Issuer the correctness of the information contained on the Official Bid Fonn; the Issuer will be entitled to rely on such certification. Each bidder agrees that, if it is awarded the Notes, it will provide the certification as to initial offering price described under the caption "Establishment of Issue Price" in this Notice. The Bonds: Proposals will be received on the Bonds bearing such rate or rates of interest as may be specified by the bidders, subject to the following conditions: (a) the same rate shall apply to all Bonds of the same maturity year; (b) no interest rate may exceed 5.00%; (c) no supplemental interest payments will be considered; (d) each interest rate specified shall be a multiple of 1120 or 1/8 of I%; (e) no zero (0%) percent interest rates will be permitted; and (f) the maximum difference between the high and low interest rates shall not exceed four percent (4.00%). No bid for less than 100.00% of the principal amount of the Bonds and accrued interest thereon to the date of delivery will be considered. Each bid shall specify the total interest cost (expressed in dollars) during the term of the Bonds on the basis of such bid, the premium, if any, offered by the bidder, the net interest cost (expressed in dollars) on the basis of such bid, and an estimate of the TIC (as hereinafter defined) on the basis of such bid. Each bidder shall certify to the Issuer the correctness of the information contained on the Official Bid Form; the Issuer will be entitled to rely on such certification. Each bidder agrees that, if it is awarded the Bonds, it will provide the certification as to initial offering prices described under the caption "Establishment of Issue P1ice" in this Notice. Good Faith Deposit. All Obligations: The Successful Bidder(s) must supply a good faith deposit (the "Deposit") in the amount of 2.00% of the principal amount of the of each respective Obligation as indicated on the first page of this Notice payable to the order of the Issuer to secure the Issuer from any loss resulting from the failure of the Successful Bidder(s) to comply with the terms of its bid. The Deposit must be received by the Issuer by 3:00 p.m. Central Time on the Sale Date. The Deposit shall be submitted by wire transfer in Federal Reserve funds, immediately available for use by the Issuer. 6 No interest on the Deposit will be paid by the Issuer. The Deposit will be held by the Issuer until the Successful Bidder(s) have complied with all of the terms and conditions of this Notice at which time the amount of said Deposit shall be returned to the Successful Bidder(s) or deducted from the purchase price at the option of the Issuer. If a bid is accepted, but the Issuer fails to deliver the Obligations to the Successful Bidder(s) in accordance with the terms and conditions of this Notice, said Deposit, or the proceeds thereof, will be returned to the Successful Bidder(s). If the Successful Bidder(s) default in the performance of any of the terms and conditions of this Notice, the proceeds of such Deposit will be retained by the Issuer as and for liquidated damages. Basis of Award. The Notes: Subject to the timely receipt of the Deposit as set forth above, the award of the Notes will be made on the basis of the lowest net interest cost ("NIC") (expressed in dollars), which will be determined by subtracting the amount of the premium bid, if any, from or adding the amount of the discount bid, if any, to the total interest cost to the Issuer. If there is any discrepancy between the net interest cost specified and the interest rate and premium/discount specified, the interest rate and premium/discount specified shall govern and the NIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest NIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. The Bonds: Subject to the timely receipt of the Deposit as set forth above, the award of the Bonds will be made on the basis of the lowest true interest cost ("TIC"), which will be determined as follows: the TIC is the discount rate (expressed as a per annum percentage rate) which, when used in computing the present value of all payments of principal and interest to be paid on the Bonds, from the payment dates to the Dated Date, produces an amount equal to the price bid, including any adjustments for premium, if any. Present value will be computed on the basis of semiannual compounding and a 360-day year of twelve 30- day months. Bidders are requested to supply an estimate of the TIC for the Obligations on the Official Bid Form, computed as specified herein on the basis of their respective bids, which shall be considered as informative only and not binding on either the Issuer or the bidder. The Issuer or its Financial Advisor will verify the TIC based on such bids. If there is any discrepancy between the TIC specified and the bid price and interest rates specified, the specified bid price and interest rates shall govern and the TIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest TIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. For All Obligations: The Issuer reserves the right to reject any and/or all bids and to waive any irregularities in a submitted bid. Any bid received after the Submittal Hour on the Sale Date will not be considered. Any disputes arising hereunder shall be governed by the laws of the State, and any party submitting a bid agrees to be subject to jurisdiction and venue of the federal and state courts within the State with regard to such dispute. The Issuer's acceptance of the Successful Bidders' proposal for the purchase of the Obligations in accordance with this Notice of Sale shall constitute a purchase agreement between the Issuer and the Successful Bidder(s) for purposes of the laws of the State and a contract between the Issuer and the Successful Bidder(s) for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") and Rule G-32 of the Municipal Securities Rulemaking Board ("Rule G-32"). The method of acceptance shall be determined solely by the Governing Body. Ratings. The outstanding general obligation bonds of the Issuer are rated "Aa3" by Moody's Investors Service. The Issuer has applied to Moody's Investors Service for ratings on the Obligations herein 7 offered for sale. Such application and ratings are further described in the Preliminary Official Statement, hereinafter described. Optional Bond Insurance. The Issuer has not applied for any policy of municipal bond insurance with respect to the Obligations, and will not pay the premium in connection with any policy of municipal bond insurance desired by the Successful Bidder(s). In the event a bidder desires to purchase and pay all costs associated with the issuance of a policy of municipal bond insurance in connection with the Obligations, a commitment from the selected insurer must be attached to such bidder's Official Bid Form, and shall specify all terms and conditions to which the Issuer will be required to agree in connection with the issuance of such insurance policy. The Issuer specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the Issuer. If the Successful Bidder(s) elect to purchase the Obligations with municipal bond insurance, certain rating agencies will assign their ratings to the Obligations with the understanding that upon delivery of the Obligations, a policy insuring the payment when due of the principal of and interest on such Obligation will be issued by such bond insurer. All costs associated with the purchase and issuance of such municipal bond insurance policy and associated ratings and expenses (other than any independent rating requested by the Issuer) shall be paid by the Successful Bidder(s). Failure of the municipal bond insurer to issue the policy after the award of the Obligations shall not constitute cause for failure or refusal by the Successful Bidder(s) to accept delivery of the Obligations. CUSIP Numbers. CUSIP identification numbers will be assigned and printed on the Obligations, but neither the failure to print such number on any Obligation nor any error with respect thereto shall constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the Obligations in accordance with the terms of this Notice. The Financial Advisor will apply for CUSIP numbers pursuant to Rule G-34 implemented by the Municipal Securities Rulemaking Board. All expenses in relation to the assignment and printing of CU SIP numbers on the Obligations will be paid by the Issuer. Delivery and Payment. The Issuer will pay for preparation of the Obligations and will deliver the Obligations properly prepared, executed and registered without cost on or about APRIL 24, 2019 (the "Closing Date"), to DTC for the account of the Successful Bidder(s). The Successful Bidder(s) will be furnished with a certified transcript of the proceedings evidencing the authorization and issuance of the Obligations and the usual closing documents, including a certificate that there is no litigation pending or threatened at the time of delivery of the Obligations affecting their validity and a certificate regarding the completeness and accuracy of the Official Statement. Payment for the Obligations shall be made in federal reserve funds, immediately available for use by the Issuer. The Issuer will deliver one Obligation of each maturity registered in the nominee name ofDTC. Establishment of Issue Price. In order to provide the Issuer with information necessary for compliance with Section 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (collectively, the "Code"), the Successful Bidder(s) will be required to assist the Issuer in establishing the "issue price" of the Obligations and complete, execute and deliver to the Issuer prior to the Closing Date, a written certification in a form acceptable to the Successful Bidder(s), the Issuer and Bond Counsel (each, an "Issue Price Certificate") containing the following for the Notes or for each maturity of the Bonds: (l) the interest rate; (2) the reasonably expected initial offering price to the "public" (as said term is used in Treasury Regulation Section 1.148-l(f) (the "Regulation")) or the sale price; and (3) pricing wires or equivalent communications supporting such offering or sale price. However, such Issue Price Certificate may indicate that the Successful Bidder has purchased the Obligations for its own account in a capacity other than as an underwriter or wholesaler, and currently has no intent to reoffer the Obligations for sale to 8 the public. Any action to be taken or documentation to be received by the Issuer pursuant hereto may be taken or received by the Financial Advisor or Bond Counsel on behalf of the Issuer. The Issuer intends that the sale of the Obligations pursuant to this Notice shall each constitute a "competitive sale" as defined in the Regulation. In support thereof: (1) the Issuer shall cause this Notice to be disseminated to potential bidders in a manner reasonably designed to reach potential bidders; (2) all bidders shall have an equal opportunity to submit a bid; (3) the Issuer reasonably expects that it will receive bids for each series of the Obligations from at least three bidders that have established industry reputations for underwriting municipal securities such as the Obligations; and (4) the Issuer anticipates awarding the sale of the Obligations, as applicable, to the bidder that provides a bid with the lowest TIC in accordance with the section hereof entitled "Basis of Award." Any bid submitted pursuant to this Notice shall be considered a firm offer for the purchase of the Obligations as specified therein. The Successful Bidder(s) shall constitute an "underwriter" as said term is defined in the Regulation. By submitting its bid, each bidder confirms ( 1) that it shall require any agreement among underwriters, a selling group agreement or other agreement to which it is a party relating to the initial sale of the Obligations, to include provisions requiring compliance with provisions of the Code and the Regulation regarding the initial sale of the Obligations, and (2) that it has an established industry reputation for underwriting municipal securities such as the Obligations. If all of the requirements of a "competitive sale" are not satisfied for a series of the Obligations, the Issuer shall advise the applicable Successful Bidder of such fact at the time of award of such Obligation to the Successful Bidder and the following provisions shall apply to such Obligation. In such event, any bid submitted will not be subject to cancellation or withdrawal. Within 20 minutes of a request by the Issuer, the Successful Bidder(s) shall advise the Issuer if a "substantial amount" (as defined in the Regulation (10%)) of any maturity of the Bonds and the Notes has been sold to the public and the price at which such substantial amount was sold. The Issuer will treat such sale price as the "issue price" for such maturity, applied on a maturity-by-maturity basis. The Issuer will not require the Successful Bidder(s) to comply with that portion of the Regulation commonly described as the "hold-the-offering-price" requirement for the remaining maturities, but the Successful Bidder(s) may elect such option. If the Successful Bidder(s) exercise such option, the Issuer will apply the initial offering price to the public provided in the bid as the issue price for the Obligations. If the Successful Bidder(s) do not exercise that option, it shall thereafter promptly provide the Issuer the prices at which a substantial amount of such maturities are sold to the public. Any change in the issue price of any of the Obligations after the Submittal Hour will not affect the purchase price for the Obligations submitted in the bid of the Successful Bidder(s). After the Closing Time, the Successful Bidder(s) agree to provide to the Issuer all reasonably requested information related to establishing the issue price of the Obligations if: (a) the Issuer requests the information in connection with an audit or inquiry by the Internal Revenue Service (the "IRS") or the Securities and Exchange Commission (the "SEC") or (b) the information is required to be retained by the Issuer pursuant to future regulation or similar guidance from the IRS, the SEC or other federal or state regulatory authority. Preliminary Official Statement and Official Statement. The Issuer has prepared a Preliminary Official Statement dated March 25, 2019, "deemed final" by the Issuer except for the omission of certain information as provided in the Rule, copies of which may be obtained from the Clerk or from the Financial Advisor. Upon the sale of the Obligations, the Issuer will adopt the final Official Statement and will furnish the Successful Bidder(s), without cost, within seven business days of the acceptance of the Successful Bidder(s)' proposal, with a sufficient number of copies thereof, which may be in electronic format, in order 9 for the Successful Bidder to comply with the requirements of the Rule and Rule G-32 (collectively, the "Rules"). Additional copies may be ordered by the Successful Bidder(s) at its expense. Continuing Disclosure. In the Note Resolution and the Bond Resolution, the Issuer has covenanted to provide annually certain financial information and operating data and other information necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. This covenant is for the benefit of and is enforceable by any Registered Owner of the Obligations. For further information, reference is made to the caption "CONTINUING DISCLOSURE" in the Preliminary Official Statement. Assessed Valuation and Indebtedness. The total assessed valuation of the taxable tangible property within the Issuer for the year 2018 was $487, 787 ,922. The total general obligation indebtedness of the Issuer as of the Dated Date, including the Obligations being sold but excluding the temporary notes to be redeemed with proceeds from the sale of the Obligations, is $77,360,000. Legal Opinion. The Obligations will be sold subject to the approving legal opinion of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the Issuer, which opinion will be furnished and paid for by the Issuer, will be printed on the Obligations, ifthe Obligations are printed, and will be delivered to the Successful Bidder(s) when the Obligations are delivered. Said opinion will also include the opinion of Bond Counsel relating to the interest on the Obligations being excludable from gross income for federal income tax purposes and exempt from income taxation by the State. Reference is made to the Preliminary Official Statement for further discussion of federal and State income tax matters relating to the interest on the Obligations. 10 Additional Information. Additional information regarding the Obligations may be obtained from the undersigned, or from the Financial Advisor, at the addresses set forth below: DATED: March 25, 2019. CITY OF SALINA, KANSAS By Shandi Wicks, Clerk Written and Facsimile Bid and Good Faith Deposit Delivery Address: Debbie Pack, Director of Finance and Administration City of Salina, Kansas 300 West Ash Street, Room 206 Salina, Kansas 67402 Phone No.: (785) 309-5735 Fax No.: (785) 309-57 J 1 Email: debbie.pack@salina.org Financial Advisor: George K. Baum & Company 4801 Main Street, Suite 500 Kansas City, Missouri 64112 Attn: David Arteberry Phone No.: (816) 283-5137 Fax No.: (816) 283-5326 Email: arteberry@gkbaum.com 11 TO: Shandi Wicks, Clerk City of Salina, Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 April 1, 2019 For $6,085,000• principal amount of General Obligation Temporary Notes, Series 2019-1, of the City of Salina, Kansas, to be dated April 24, 2019, as described in the Notice of Sale (the "Notice") dated March 25, 2019, said Notes to bear interest as follows: Maturity Mayl 2020 Principal Amount• $6,085,000 Interest Rate ____ % *Subject to change; see the Notice. the undersigned will pay the total principal amount of the Notes, plus a premium or less a discount as set forth below, plus accrued interest to the date of delivery. Principal Amount ....................................................................................................................................................... $6,085,000.00• Less Discount (not to exceed $30,425 or 0.50%).................................................................................... ) Plus Premium (if any) ............................................................................................................................. _________ _ Total Purchase Price ................................................................................................................................ $ ________ _ Total interest cost to maturity at the rates specified ................................................................................ $ ________ _ Net interest cost ...................................................................................................................................... $ ________ _ D The Bidder elects to purchase Municipal Bond Insurance from: [Assured] [AGM] [BAM] ~[ ----~]. Circle one or complete blank. This proposal is subject to all terms and conditions contained in the Notice, and if the undersigned is the Successful Bidder, the undersigned will comply with all of the provisions contained in the Notice. The acceptance of this proposal by the Issuer shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule 15c2-12 of the Securities and Exchange Commission and a bond purchase agreement for purposes of the laws of the State of Kansas. Submitted by: ---------------- (LIST ACCOUNT MEMBERS ON REVERSE) By: -~~~~~~~~~~~~ Telephone No. ACCEPTANCE Pursuant to action duly taken by the Governing Body of the City of Salina, Kansas, the above proposal is hereby accepted on April 1, 2019. Attest: Clerk Mayor NOTE: No additions or alterations in the above proposal form shall be made, and any erasures may cause rejection of any bid. Sealed bids may be filed with the Clerk, Shandi Wicks, 300 West Ash, Salina, Kansas 67402, facsimile bids may be filed with the Clerk, Fax No. (785) 309-5711 or electronic bids may be submitted viaPARTTl'®, at or prior to 12:00 p.m., Central Time, on April 1, 2019. Any bid received after such time will not be considered. TO: Shandi Wicks, Clerk City of Salina, Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION 11\'TERNAL IMPROVEMENT BONDS SERIES 2019-A April 1, 2019 For $11,445,000* principal amount of General Obligation Internal Improvement Bonds, Series 2019-A, of the City of Salina, Kansas, to be dated April 24, 2019, as described in the Notice of Sale (the ''Notice") dated March 25, 2019, said Bonds to bear interest as follows: Maturity Principal Maturity Principal October I Amount* Interest Rate October I Amount* Interest Rate 2020 $265,000 % 2030 $580,000 % 2021 435,000 % 2031 595,000 % 2022 450,000 % 2032 620,000 % 2023 465,000 % 2033 640,000 % 2024 475,000 % 2034 660,000 % 2025 495,000 % 2035 680,000 % 2026 510,000 % 2036 700,000 % 2027 525,000 % 2037 725,000 % 2028 540,000 % 2038 750,000 % 2029 565,000 % 2039 770,000 % *Subject to change; see the Notice. the undersigned will pay the total principal amount of the Bonds, plus a premium as set forth below, plus accrued interest to the date of delivery. Principal Amount ........................................................................................................................................................ $11,445,000.00* Plus Premium (if any) ............................................................................................................................... _________ _ Total Purchase Price .............................................................................................................................. $ _________ _ Total interest cost to maturity at the rates specified .............................................................................. $ _________ _ Net interest cost (adjusted for Premium) ............................................................................................... $ _________ _ True Interest Cost ...................................................................................................................................................... _____ % D The Bidder elects to purchase Municipal Bond Insurance from: [Assured] [AGM] [BAM] . Circle one or complete blank. 0 The Bidder elects to have the following Tenn Bonds: Maturity Date Years Amount* October 1, to $ _____ _ October 1, to $ _____ _ *subject to mandatory redemption requirements in the amounts and at the times shown above. This proposal is subject to all terms and conditions contained in the Notice, and ifthe undersigned is the Successful Bidder, the undersigned will comply with all of the provisions contained in the Notice. The acceptance of this proposal by the Issuer by execution below shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule 15c2-12 of the Securities and Exchange Commission and a bond purchase agreement for purposes of the laws of the State of Kansas. Submitted by: ---------------- (LIST ACCOUNT MEMBERS ON REVERSE) By: ~~~~~~~~~~~~~ Telephone No. ACCEPTANCE Pursuant to action duly taken by the Governing Body of the City of Salina, Kansas, the above proposal is hereby accepted on April I, 2019. Attest: Clerk NOTE: Mayor No additions or alterations in the above proposal form shall be made, and any erasures may cause rejection of any bid. Sealed bids may be filed with the Clerk, Shandi Wicks, 300 West Ash, Salina, Kansas 67402, facsimile bids may be filed with the Clerk, Fax No. (785) 309-5711 or electronic bids may be submitted via PARITY®, at or prior to 1 :00 p.m., Central Time, on April 1, 2019. Any bid received after such time will not be considered. ... "' o.~ ]·§ B ~ ... "' @.s 0 ... a~ c: .!l ::s B c: -~ ._g c: "' 85 'E: ca "' & E ... .!l 0 .s c: ti) .Si ~ lil o-16 "' o·~ i'.;> ~ "' -.5 0 .~n1 <:; -... <E ';;; ~ ·-"' .Sc -::s ]~ "'"O .,,_ "'::s 0 0 § ~ ~~ ::s"' ~ :s ..,; ·;:; c: -g g·§ ~ ... .s ., ~ :g -s :§ ~ ~ • ..: ..c c: ~ ~ "' 0 c:>. .§ ..c: B PRELIMINARY OFFICIAL STATEMENT DATED MARCH 25, 2019 In the opinion of Gilmore & Bell, P. C., Bond Counsel to the City, under existing law and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended (the "Code"): (1) the interest on the Notes and Bonds [(including any original issue discount properly allocable to an owner thereof)} is exc/udab/e from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax, (2) the interest on the Notes and Bonds is exempt from income taxation by the State of Kansas, and (3) the Notes and Bonds have not been designated as "qualified tax-exempt obligations" within the meaning of Code Section 265(b)(3}. See TAX MATTERS in this Official Statement. New Issues Book-Entry Only $6,085,000* GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 Dated: Date of Delivery CITY OF SALINA, KANSAS Moody's Ratings: Bonds-"Applied For" Notes-"Applied For'' $11,445,000* GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2019-A Due: As Shown Herein The General Obligation Temporary Notes, Series 2019-1 Notes (the "Notes") will be issued by the City of Salina, Kansas (the "Issuer" or the "City") as fully registered notes, without coupons. Purchases of the Notes will be made in book-entry form, in the denominations of $5,000 or any integral multiple thereof (the "Authorized Denomination"). Principal and interest will be payable at maturity upon presentation and surrender of the Notes by the registered owners thereof at the office of the Treasurer of the State of Kansas (the "Note Paying Agent" and "Note Registrar''). The Notes are subject to redemption at the option of the City as further described herein. See THE NOTES-"Redemption Provisions" herein . 5g~ E;; :S "' o -The General Obligation Internal Improvement Bonds, Series 2019-A Bonds (the "Bonds") will be issued by "'O :E .~ § ~ ·a the Issuer, as fully registered bonds, without coupons. Purchases of the Bonds will be made in book-entry only form .9 -~ ~ in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). Principal on the ~ ·£ .g · Bonds will be payable annually on October 1 in the years shown herein. Interest on the Bonds will be payable § ~ -~ semiannually on April 1 and October 1 of each year until maturity, commencing on April 1, 2020. The Treasurer of s :[] the State of Kansas will be designated as paying agent and registrar or the Bonds (the "Bond Paying Agent" and ~ 2 .B "Bond Registrar''). The Bonds are subject to redemption at the option of the City as further described herein. See :g' .5 :§' THE BONDS-"Redemption Provisions" herein. "' ., 0 "' "' "' :a ·.:: "O c: "§ ~ "f! ~ !l "' ., c: ..c: ., ·- "'O ~ -~ 1'l .s c: -~ 'Ci s § ~ * 0 "' -5 ~~ -~ ~ -~ E~ E <£ ., 0 c: ti i:';> ·;:; .s :g -= 7J ·e "O ..c: := C en ~ :: 0 Q.i c c -~ e ~ i:: "' ::s s~ r:: ti) -0 ... ·-3 ~-~ .g 0 "'5l ...... a ·i::: 0 ...... 2, ~ 0 "'§ c: § 6l ·5 -~ >. ]:Q~ p.., 0 0 ., "' "' i§-5~ MATURITY SCHEDULES (see inside front cover) The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES -"Security'' and THE BONDS -"Security'' herein. The Notes and Bonds are offered when, as and if issued by the City and received by the Underwriters subject to the approval of legality by Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City. It is expected that the Notes and Bonds will be available for delivery through the facilities of OTC, in New York, New York, on or about April 24, 2019. BIDS FOR THE PURCHASE OF THE NOTES AND BONDS Will BE RECEIVED PURSUANT TO THE NOTICE OF SALE: The Series 2019-1 Notes: On or before 12:00 p.m., Central Daylight Time The Series 2019·A Bonds: On or before 1:00 p.m., Central Daylight Time On Monday, April 1, 2019 THIS COVER PAGE CONTAINS INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THE ISSUES. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. *Preliminary; subject to change Maturity 05-01-20 MATURITY SCHEDULES $6,085,000(l) GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 Amount!ll $6,085,000 Base cus1p121 794744 At the option of the City, the Notes will be subject to redemption and payment prior to their Stated Maturity on November l, 2019, and at any time thereafter, as a whole or in part (selection of the amount of Notes to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. $11,445,000(l) GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2019-A SERIAL BONDS Maturity Amount!1J Rate Yield 10-01-20 $265,000 10-01-21 435,000 10-01-22 450,000 10-01-23 465,000 10-01-24 475,000 10-01-25 495,000 10-01-26 510,000 10-01-27!31 525,000 10-01-28(3) 540,000 10-01-29(3) 565,000 10-01-30(3) 580,000 10-01-31 !3l 595,000 10-01-32(31 620,000 10-01-33!31 640,000 10-01-34!3) 660,000 10-01-35!31 680,000 10-01-36(3) 700,000 10-01-37(3) 725,000 10-01-38(3) 750,000 10-01-39!3) 770,000 [TERM BONDS Maturi!V Amount Rate Yield !1lPreliminary; subject to change Base cus1p121 794744 Base cus1p121 794744 1 !21CUSJP numbers have been assigned to this issue by CUSIP Global Services, which is managed on behalf of the American Bankers Association by S&P Capital IQ, a subsidiary of The McGraw-Hill Companies, Inc., and are included solely for the convenience of the Owners of the Notes and Bonds. Neither the City nor the Underwriters shall be responsible for the selection or correctness of the CUSIP numbers set forth above. 131 At the option of the City, Bonds maturing on October 1, 2027 and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October 1, 2026, and at any time thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. IN CONNECTION WITH THIS OFFERING, THE NOTE UNDERWRITER AND/OR THE BONDS UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE NOTES AND BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE NOTES AND BONDS ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE NOTES AND BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE SECURITIES HAVE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR AGENCIES HAVE GUARANTEED OR PASSED UPON THE SAFETY OF THE NOTES OR THE BONDS AS AN INVESTMENT, UPON THE PROBABILITY OF ANY EARNINGS THEREON OR UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. THIS OFFICIAL STATEMENT CONTAINS STATEMENTS THAT ARE "FORWARD-LOOK/NG STATEMENTS" AS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. WHEN USED IN THIS OFFICIAL STATEMENT, THE WORDS "ESTIMATE," "INTEND," "EXPECT'' AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED IN SUCH FORWARD· LOOKING STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD· LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. THIS PRELIMINARY OFFICIAL STATEMENT IS DEEMED TO BE FINAL {EXCEPT FOR PERMITTED OMISSIONS) BY THE ISSUER FOR PURPOSES OF COMPLYING WITH RULE 15c2·12 OF THE SECURITIES AND EXCHANGE COMMISSION. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. CITY OF SALINA, KANSAS City/County Building -Room 206 300WestAsh P.O. Box736 Salina, Kansas 67402-0736 CITY COMMISSION Trent W. Davis, M.D., Mayor Mike Hoppock, Vice Mayor Melissa Rose Hodges, Commissioner Joe Hay, Jr., Commissioner Karl Ryan, Commissioner CITY STAFF Mike Schrage, City Manager Debbie Pack, Finance Director Shandi Wicks, City Clerk CITY ATTORNEY Greg Bengtson Clark, Mize & Linville, Chartered Salina, Kansas BOND COUNSEL Gilmore & Bell, P.C. Kansas City, Missouri MUNICIPAL ADVISOR George K. Baum & Company Kansas City, Missouri No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any information or to make any representations with respect to the Notes or the Bonds, other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy the Notes or Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein concerning the Issuer has been furnished by the Issuer and other sources which are believed to be reliable, but such information is not guaranteed as to accuracy or completeness. The Underwriters have reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the Federal Securities Laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer since the date hereof. This Official Statement does not constitute a contract between the Issuer or the Underwriters and any one or more of the purchasers, Owners or Beneficial Owners of the Notes or Bonds. All financial and other information presented herein, except for information expressly attributed to other sources, has been provided by the City from its records and is intended to show recent historic information. Such information is not guaranteed as to accuracy or completeness. All descriptions of laws and documents contained herein are only summaries and are qualified in their entirety by reference to such laws and documents. TABLE OF CONTENTS Page INTRODUCTORY STATEMENT............................................................................................................. 1 THE NOTES.......................................................................................................................................... 2 THE BONDS......................................................................................................................................... 6 THE DEPOSITORY TRUST COMPANY................................................................................................... 11 THE FINANCING PLAN......................................................................................................................... 13 SOURCES AND USES OF FUNDS.......................................................................................................... 13 RISK FACTORS AND INVESTMENT CONSIDERATIONS......................................................................... 14 LEGAL MATTERS................................................................................................................................. 16 TAX MATIERS ..................................................................................................................................... 16 RATINGS.............................................................................................................................................. 18 MUNICIPAL ADVISOR.......................................................................................................................... 18 UNDERWRITING ................................................................................................................................. 18 ABSENCE OF MATERIAL LITIGATION................................................................................................... 19 CONTINUING DISCLOSURE................................................................................................................. 19 CERTIFICATION OF OFFICIAL STATEMENT.......................................................................................... 20 APPENDIX A: INFORMATION CONCERNING THE CITY FINANCIAL OVERVIEW OF THE CITY.............................................................................................. A-1 GENERAL INFORMATION CONCERNING THE CITY........................................................................ A-2 ECONOMIC INFORMATION CONCERNING THE CITY..................................................................... A-6 DEBT SUMMARY OF THE CITY....................................................................................................... A-9 FINANCIAL INFORMATION CONCERNING THE CITY...................................................................... A-13 APPENDIX B: FORM OF CONTINUING DISCLOSURE UNDERTAKING APPENDIX C: AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2017 APPENDIX D: UNAUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2018 General OFFICIAL STATEMENT CITY OF SALINA, KANSAS $6,085,000* GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 $11,445,000* GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2019-A INTRODUCTORY STATEMENT The purpose of this Official Statement is to present certain information concerning the City of Salina, Kansas (the "Issuer'' or "City"), and the offering of its $6,085,000* General Obligation Temporary Notes, Series 2019-1 (the "Notes"), and its $11,445,000* General Obligation Internal Improvement Bonds, Series 2019-A (the "Bonds", and together with the Notes, the "Securities"). The Notes and the Bonds are being issued to provide funds to finance certain public improvements within the City and to retire certain outstanding general obligation temporary notes of the City. See THE FINANCING PLAN herein. The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES-"Security" and THE BONDS -"Security" herein. The Appendices are an integral part of this Official Statement and should be read in their entirety. All financial and other information presented herein has been compiled by the City's municipal advisor, George K. Baum & Company, Kansas City, Missouri (the "Municipal Advisor"). Such information has been provided by the City and other sources deemed to be reliable. The presentation of information herein is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City, has not assisted in the preparation of nor reviewed this Official Statement, except to the extent described under the sections captioned THE NOTES, THE BONDS, LEGAL MATIERS, TAX MATIERS, and APPENDIX B -FORM OF CONTINUING DISCLOSURE UNDERTAKING and, accordingly, expresses no opinion as to the accuracy or sufficiency of any other information contained herein. Definitions Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution of the governing body of the City authorizing the Notes (the "Note Resolution") and in the ordinance and resolution of the governing body of the City authorizing the Bonds (collectively, the "Bond Resolution"), as applicable. Copies of the Note Resolution and the Bond Resolution are available upon request to the City or the Municipal Advisor. Additional Information Additional information regarding the City, the Notes, or the Bonds may be obtained from George K. Baum & Company, 4801 Main Street, Kansas City, Missouri 64112, telephone 816-474-1100. 1 THE NOTES Authority The Notes are being issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 to 10-125, inclusive, specifically including K.S.A. 10-123, K.S.A. 10-620 et seq., K.S.A. 12-631r ands, K.S.A. 12-685 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-1736 et seq., K.S.A. 12- 2101 et seq., and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time, and a resolution adopted by the governing body of the City authorizing the issuance of the Notes (the "Note Resolution"). Security The Notes shall be general obligations of the City, payable as to both principal and interest in part from special assessments levied upon the property benefitted by the construction of certain public improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. Description The Notes shall consist of fully registered book-entry-only notes in an Authorized Denomination and shall be numbered in such manner as the Note Registrar shall determine. All of the Notes shall be dated as of April 24, 2019 (the "Dated Date"), shall become due in the amount on the Stated Maturity and are subject to redemption and payment prior to the Stated Maturity. The Notes shall bear interest at the rate per annum set forth on the inside cover page of this Official Statement, and shall bear interest (computed on the basis of twelve 30-day months) from the Dated Date, payable at the Stated Maturity. Redemption Provisions Optional Redemption. At the option of the City, the Notes or portions thereof, will be subject to redemption and payment prior to their Stated Maturity on November 1, 2019, and at any time thereafter as a whole or in part (selection the amount of Notes to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. Selection of Notes to be Redeemed. Notes shall be redeemed only in an Authorized Denomination. When less than all of the Notes are to be redeemed and paid prior to their Stated Maturity, such Notes shall be redeemed in such manner as the City shall determine, Notes of less than a full Stated Maturity shall be selected by the Note Registrar in minimum Authorized Denomination in such equitable manner as the Note Registrar may determine. In the case of a partial redemption of Notes by lot when Notes of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Note of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Note is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Note to the Note Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Note 2 or Notes of the aggregate principal amount of the unredeemed portion of the principal amount of such Note. If the Owner of any such Note fails to present such Note to the Note Paying Agent for payment and exchange as aforesaid, such Note shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). Notice and Effect of Call for Redemption. Unless waived by any Owner of Notes to be redeemed, if the City shall call any Notes for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Notes to the Note Registrar. In addition, the City shall cause the Note Registrar to give written notice of redemption to the Owners of said Notes. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Notes are to be redeemed, the identification (and, in the case of partial redemption of any Notes, the respective principal amounts) of the Notes to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Note or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Notes are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Note Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Note Paying Agent an amount of money sufficient to pay the Redemption Price of all the Notes or portions of Notes that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Notes or portions of Notes to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Notes or portion of Notes shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Notes, the Note Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Note (having been mailed notice from the Note Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial owner of the Note so affected, shall not affect the validity of the redemption of such Note. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Note Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Note. Designation of Note Paying Agent and Note Registrar The City will at all times maintain a paying agent and note registrar meeting the qualifications set forth in the Note Resolution. The City reserves the right to appoint a successor paying agent or note registrar. No resignation or removal of the paying agent or note registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or note registrar. Every paying agent or note registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Note Registrar" and "Note Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Notes and note registrar with respect to the registration, transfer and exchange of Notes. Registration, Transfer and Exchange of Notes As long as any of the Notes remain Outstanding, each Note when issued shall be registered in the name of the 3 Owner thereof on the Note Register. Notes may be transferred and exchanged only on the Note Register as hereinafter provided. Upon surrender of any Note at the principal office of the Note Registrar, the Note Registrar shall transfer or exchange such Note for a new Note or Notes in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Note that was presented for transfer or exchange. Notes presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Note Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Notes is exercised, the Note Registrar shall authenticate and deliver Notes in accordance with the provisions of the Note Resolution. The City shall pay the fees and expenses of the Note Registrar for the registration, transfer and exchange of Notes. Any additional costs or fees that might be incurred In the secondary market, other than fees of the Note Registrar, are the responsibility of the Owners of the Notes. In the event any Owner fails to provide a correct taxpayer identification number to the Note Paying Agent, the Note Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Note Registrar shall not be required to register the transfer or exchange of any Note during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Mutilated, Lost, Stolen or Destroyed Notes If (a) any mutilated Note is surrendered to the Note Registrar or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to the City and the Note Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the City or the Note Registrar that such Note has been acquired by a bona fide purchaser, the City shall execute and, upon the City's request, the Note Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the City, in its discretion, may pay such Note instead of issuing a new Note. Upon the issuance of any new Note, the City may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Note Paying Agent) connected therewith. Nonpresentment of Notes If any Note is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Note have been made available to the Note Paying Agent all liability of the City to the Owner thereof for the payment of such Note shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Note Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Note, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Note Resolution or on, or with respect to, said Note. If any Note is not presented for payment within four (4) years following the date when such Note becomes due at Maturity, the Note Paying Agent shall repay to the City the funds theretofore held by it for payment of such Note, and such Note shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the City, and the Owner thereof shall be entitled to look only to the City for payment, and then only to the extent of the amount so repaid to it by the Note Paying Agent, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Method and Place of Payment of the Notes The principal of, or Redemption Price, and interest on the Notes shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Note and the interest thereon shall be paid at Maturity to the Person in whose 4 name such Note is registered on the Note Register at the Maturity thereof, upon presentation and surrender of such Note at the principal office of the Note Paying Agent. The interest payable on each Note on any Interest Payment Date shall be paid to the Owner of such Note as shown on the Note Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Note Paying Agent to the address of such Owner shown on the Note Register or at such other address as is furnished to the Note Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Notes, by electronic transfer to such Owner upon written notice given to the Note Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. "Record Date" means, for the interest payable on any Interest Payment Date, the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. Notwithstanding the foregoing, any Defaulted Interest with respect to any Note shall cease to be payable to the Owner of such Note on the relevant Record Date and shall be payable to the Owner in whose name such Note is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The City shall notify the Note Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Note Paying Agent) and shall deposit with the Note Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Note Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Note Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Note entitled to such notice not less than 10 days prior to such Special Record Date. SO LONG AS CEDE & CO. REMAINS THE REGISTERED OWNER OF THE NOTES, THE NOTE PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See ''THE NOTES-Book-Entry Notes; Securities Depository." Payments Due on Saturdays, Sundays and Holidays In any case where a Note Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Note Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Note Payment Date, and no interest shall accrue for the period after such Note Payment Date. Book-Entry Notes; Securities Depository The Notes shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Notes, except in the event the Note Registrar issues Replacement Notes. It is anticipated that during the term of the Notes, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Notes to the Participants until and unless the Note Registrar authenticates and delivers Replacement Notes to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of OTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through OTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository 5 and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes; or (b) if the Note Registrar receives written notice from Participants having interest in not less than 50% of the Notes Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes, then the Note Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Note Registrar shall register in the name of and authenticate and deliver Replacement Notes to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Note Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Note. Upon the issuance of Replacement Notes, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Note Registrar, to the extent applicable with respect to such Replacement Notes. If the Securities Depository resigns and the City, the Note Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Note Registrar shall authenticate and cause delivery of Replacement Notes to Owners, as provided herein. The Note Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Notes. The cost of printing, registration, authentication, and delivery of Replacement Notes shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Note Registrar receives written evidence satisfactory to the Note Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Note Registrar upon its receipt of a Note or Notes for cancellation shall cause the delivery of the Notes to the successor Securities Depository in appropriate denominations and form as provided in the Note Resolution. THE BONDS Authority The Bonds are being issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101to10-125, inclusive, K.S.A.10-620 et seq., K.S.A. 12-631r, K.S.A. 12-685 et seq., K.S.A. 65-163u, Charter Ordinance No. 39 of the City and Article 12, Section 5 of the Constitution of the State of Kansas , all as amended and supplemented from time to time, and an ordinance and resolution adopted by the governing body of the City authorizing the issuance of the Bonds (collectively, the "Bond Resolution"). Security The Bonds shall be general obligations of the City, payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. 6 Levy and Collection of Annual Tax, Transfer to Debt Service Account The governing body of the Issuer shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, levying and collecting the necessary taxes upon all of the taxable tangible property within the Issuer in the manner provided by law. Such taxes shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes shall be deposited in the Bond and Interest Fund, shall be kept separate and apart from all other funds of the Issuer, shall thereafter be transferred to the Debt Service Account and shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due, taking into account any scheduled mandatory redemptions, and the fees and expenses of the Paying Agent. Description The Bonds shall consist of fully registered book-entry-only bonds In an Authorized Denomination and shall be numbered in such manner as the Bond Registrar shall determine. All of the Bonds will be dated as of April 24, 2019 (the "Dated Date"), shall become due in the amounts, on the Stated Maturities, and subject to redemption and payment prior to their Stated Maturities, and shall bear interest at the rates per annum set forth on the inside cover page of this Official Statement. The Bonds shall bear interest (computed on the basis of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid, on the Interest Payment Dates in the manner hereinafter set forth. Redemption Provisions Optional Redemption. At the option of the City, Bonds or portions thereof maturing on October 1, 2027 and thereafter may be called for redemption and payment prior to their Stated Maturity on October l, 2026, and at any time thereafter as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. [Mandatory Redemption. The Bonds maturing on [ I (the ''Term Bonds") shall be subject to mandatory redemption and payment prior to their Stated Maturity pursuant to the mandatory redemption requirements hereinafter set forth, at a Redemption Price equal to 100% of the principal amount thereof, plus accrued interest to the Redemption Date. The payments which are to be deposited into the Debt Service Account shall be sufficient to redeem, and the Issuer shall redeem on October 1 in each year the following principal amounts of such Term Bonds: Principal Amount $] Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the City shall determine, Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in minimum Authorized Denomination in such equitable manner as the Bond Registrar may determine. In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Bond is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond 7 or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Bond Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). Notice and Effect of can for Redemption. Unless waived by any Owner of Bonds to be redeemed, if the City shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Bonds to the Bond Registrar. In addition, the City shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Bond Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Bond Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Bond Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. Designation of Bond Paying Agent and Bond Registrar The City will at all times maintain a paying agent and bond registrar meeting the qualifications set forth in the Bond Resolution. The City reserves the right to appoint a successor paying agent or bond registrar. No resignation or removal of the paying agent or bond registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or bond registrar. Every paying agent or bond registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Bond Registrar" and "Bond Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds. Registration, Transfer and Exchange of Bonds As long as any of the Bonds remain Outstanding, each Bond when issued shall be registered in the name of 8 the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as hereinafter provided. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Bond Resolution. The City shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Bond Paying Agent, the Bond Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption has been mailed by the Bond Paying Agent and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Method and Place of Pavment of the Bonds The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office of the Bond Paying Agent. The interest payable on each Bond on any Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Bond Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Bond Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. "Record Date" means, for the interest payable on any Interest Payment Date, the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. Notwithstanding the foregoing, any Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond is registered at the close of business on the Special Record Date forthe payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The City shall notify the Bond Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Bond Paying Agent) and shall deposit with the Bond Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Bond Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Bond Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Bond entitled to such notice not less than 10 days prior to such Special Record Date. 9 SO LONG AS CEDE & CO., REMAINS THE REGISTERED OWNER OF THE BONDS, THE BOND PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See "THE BONDS -Book-Entry Bonds; Securities Depository." Payments Due on Saturdays, Sundays and Holidays In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. Book-Entry Bonds: Securities Dei>ositorv The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of OTC {or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through OTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or {b) if the Bond Registrar receives written notice from Participants having interest in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository {and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the City. 10 In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of the Bonds to the successor Securities Depository in appropriate denominations and form as provided in the Bond Resolution. THE DEPOSITORY TRUST COMPANY 1. The Depository Trust Company {"OTC"), New York, New York, will act as securities depository for the Securities. The Securities will be issued as fully-registered securities registered in the name of Cede & Co. {DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered bond or note certificate will be issued for each scheduled maturity of the Securities, and will be deposited with OTC. 2. OTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. OTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants {"Direct Participants") deposit with OTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. OTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for OTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the OTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly {"Indirect Participants"). OTC has a Standard & Poor's rating of "AA+". The OTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about OTC can be found at www.dtcc.com. 3. Purchases of Securities under the OTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security {"Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from OTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book- entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with OTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of OTC. The deposit of Securities with OTC and their registration in the name of Cede & Co. or such other OTC nominee do not effect any change in beneficial ownership. OTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 11 5. Conveyance of notices and other communications by OTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 6. Redemption notices shall be sent to OTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither OTC nor Cede & Co. (nor any other OTC nominee) will consent or vote with respect to the Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, OTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of OTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Issuer or Paying Agent, on the payment date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of OTC nor its nominee, the Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of OTC) is the responsibility of the Issuer or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of OTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to the Paying Agent. The requirement for physical delivery of the Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to the Paying Agent's OTC account. 10. OTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Issuer or Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. 11. The Issuer may decide to discontinue use of the system of book-entry-only transfers through OTC (or a successor securities depository). In that event, certificates will be printed and delivered to OTC. 12. The information in this section concerning OTC and DTC's book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. 12 THE FINANCING PLAN The Note Projects Proceeds from the sale of the Notes will be used to provide interim construction financing for all or a portion of the costs of certain public improvements within the City (collectively, the "Note Projects") and to pay costs associated with issuance of the Notes. The projects to be financed with the Notes are as follows: Project Description Landfill Cell #20 North 9th Street Bridge Pheasant Ridge Addition No. 3 Police Parking Smoky Hill River Renewal Ordinance/ Resolution Res. 19-7672 Ord.02-10071;Res No.19-7677 Res.18-7633 Res.19-7679 Ord. 17-10885 "'(Excludes costs of issuance) The Bond Projects Authority K.S.A. 12-2101 et seq. K.S.A. 12-685 et seq. K.S.A. 12-6a01 et seq. K.S.A.12-1736 et seq. K.S.A. 12-631r ands, Article 12, §5 of the Constitution of the State of Kansas Total: Improvement Fund Deposit (Est.)* $2,315,000.00 500,000.00 530,165.28 400,000.00 2.300.000.00 $6,045,165.28 Proceeds from the sale of the Bonds will be used to provide long term financing for a portion of the costs of certain public improvements within the City (collectively, the "Bond Projects"), retire a portion of the City's outstanding general obligation temporary notes and to pay the costs associated with the issuance of the Bonds. The Bond Projects are as follows: Pro!ect Description Downtown Streetscape Golf Irrigation Ordinance/ Resolution Ord.17-10888 Res. 19-7678 Authority K.S.A. 12-631r, 12-685 et seq., K.S.A. 65-163u Charter Ordinance No. 39 Total: SOURCES AND USES OF FUNDS Allocable Principal Amount $10,445,000 1.000.000 $11,445,000* Funds to be used in the Financing Plan will be provided and applied approximately as follows, exclusive of accrued interest. Sources of Funds: Principal Amount Original Issue Premium/ Discount Total Sources of Funds Uses of Funds: Deposit to Improvement Fund Underwriter's Discount Costs of Issuance Total Application of Funds 13 RISK FACTORS AND INVESTMENT CONSIDERATIONS A PROSPECTIVE PURCHASER OF THE SECURITIES DESCRIBED HEREIN SHOULD BE AWARE THAT THERE ARE CERTAIN RISKS ASSOCIATED WITH THE SECURITIES WHICH MUST BE RECOGNIZED. THE FOLLOWING STATEMENTS REGARDING CERTAIN RISKS ASSOCIATED WITH THE OFFERING SHOULD NOT BE CONSIDERED AS A COMPLETE DESCRIPTION OF ALL RISKS TO BE CONSIDERED IN THE DECISION TO PURCHASE THE SECURITIES. PROSPECTIVE PURCHASERS OF THE SECURITIES SHOULD ANAL rzE CAREFULLY THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT AND ADDITIONAL INFORMATION IN THE FORM OF THE COMPLETE DOCUMENTS SUMMARIZED HEREIN, COPIES OF WHICH ARE AVAILABLE AND MAY BE OBTAINED FROM THE CITY OR THE UNDERWRITER. Legal Matters Various state and federal laws, regulations and constitutional provisions apply to the obligations created by the Securities. There is no assurance that there will not be any change in, interpretation of, or addition to such applicable laws, provisions and regulations which would have a material effect, either directly or indirectly, on the City or the taxing authority of the City. Limitations on Remedies Available to Owners of Securities The enforceability of the rights and remedies of the owners of Securities, and the obligations incurred by the City in issuing the Securities, are subject to the following: the federal Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under state law of certain remedies; the exercise by the United States of America of the powers delegated to it by the United States Constitution; and the reasonable and necessary exercise, in certain unusual situations, of the police power inherent in the State of Kansas and its governmental subdivisions in the interest of serving a legitimate and significant public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the owners of the Securities to judicial discretion and interpretation of their rights in bankruptcy and otherwise, and consequently may involve risks of delay, limitation or modification of their rights. Debt Service Source; Issuer's Tax Revenues The Securities are general obligations of the Issuer payable as to both principal and interest, if necessary, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Legislature may from time to time adopt changes in the property tax system or method of imposing and collecting property and/or sales taxes within the State. The effects of such legislative changes could affect the Issuer's property tax and sales tax collections, and the impact could be material. Other future events, such as the loss of a major taxpayer, reductions in assessed value, increases in property tax rates of overlapping taxing units, or a decrease in sales tax revenues could increase effective property tax rates and the resulting increase could be material. Taxpayers may also challenge the value of property assigned by the county appraiser. If a taxpayer valuation challenge is successful, the liability of the Issuer to refund property taxes previously paid under protest may have a material adverse effect on the Issuer's financial situation. See "APPENDIX A-FINANCIAL INFORMATION CONCERNING THE CITY -Appraisal and Assessment Procedures." Kansas Public Employees Retirement System As described in "APPENDIX A -GENERAL INFORMATION CONCERNING THE CITY -Pension and Employee Retirement Plans," the Issuer participates in the Kansas Public Employees Retirement System ("KPERS"), as an instrumentality of the State to provide retirement and related benefits to public employees in Kansas. KPERS administers three statewide defined benefit retirement plans for public employees which are separate and distinct 14 with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Issuer participates in the Police and Firemen's Retirement System ("KP&F") and the Public Employees Retirement System -Local Group (the "Plan"). Under existing law, employees make contributions and the Issuer makes all employer contributions to the Plan; neither the employees nor the Issuer are directly responsible for any unfunded accrued actuarial liability ("UAAL"). However, the Plan contribution rates may be adjusted by legislative action over time to address any UAAL. According to KPERS' Valuation Report, the Local Group had an UAAL of approximately $1.458 billion in the calendar year 2017 and KP&F had an UAAL of approximately $859 million. Taxation of Interest on the Securities Opinions of Bond Counsel will be obtained to the effect that interest earned on the Securities is excludable from gross income for federal income tax purposes under current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable rulings and regulations under the Code; however, an application for a ruling has not been made and an opinion of counsel is not binding upon the Internal Revenue Service. There can be no assurance that the present provisions of the Code, or the rules and regulations thereunder, will not be adversely amended or modified, thereby rendering the interest earned on the Securities includable in gross income for federal income tax purposes. The City has covenanted in the Note Resolution and the Bond Resolution and in other documents and certificates to be delivered in connection with the issuance of the Securities to comply with the provisions of the Code, including those which require the City to take or omit to take certain actions after the issuance of the Securities. Because the existence and continuation of the excludability of the interest on the Securities depends upon events occurring after the date of issuance of the Securities, the opinion of Bond Counsel described under "TAX MATIERS" assumes the compliance by the City with the provisions of the Code described above and the regulations relating thereto. No opinion is expressed by Bond Counsel with respect to the excludability of the interest on the Securities in the event of noncompliance with such provisions. The failure of the City to comply with the provisions described above may cause the interest on the Securities to become includable in gross income as of the date of issuance. Premium on the Securities The initial offering prices of certain maturities of the Securities that are subject to optional redemption may be in excess of the respective principal amounts thereof. Any person who purchases such a Security in excess of its principal amount, whether during the initial offering or in a secondary market transaction, should consider that the Securities are subject to redemption at par under the various circumstances described under "THE NOTES- Redemption Provisions" and "THE BONDS-Redemption Provisions." No Additional Interest or Mandatory Redemption upon Event ofTaxability Neither the Bond Resolution nor the Note Resolution provide for the payment of additional interest or penalty on the Securities or the mandatory redemption thereof if the interest thereon becomes includable in gross income for federal income tax purposes. Likewise, neither the Bond Resolution nor the Note Resolution provide for the payment of any additional interest or penalty on the Securities if the interest thereon becomes subject to income taxation by the State of Kansas. Suitability of Investment The tax exempt feature of the Securities is more valuable to high tax bracket investors than to investors who are in low tax brackets, and so the value of the interest compensation to any particular investor will vary with individual tax rates. Each prospective investor should carefully examine this Official Statement, including the Appendices hereto, and its own financial condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Securities are an appropriate investment. 15 Market for the Securities Ratings. The Securities have been assigned the financial ratings set forth in the section hereof titled RATINGS. There is no assurance that a particular rating will remain in effect for any given period oftime or that it will not be revised, either downward or upward, or withdrawn entirely, if in the judgment of the agency originally establishing such rating, circumstances so warrant. Any downward revision or withdrawal of any rating may have an adverse affect on the market price of the Securities. Secondary Market. There is no assurance that a secondary market will develop for the purchase and sale of the Securities. Prices of securities traded in the secondary market, though, are subject to adjustment upward and downward in response to changes in the credit markets. From time to time it may be necessary to suspend indefinitely secondary market trading in the Securities as a result of financial condition or market position of broker- dealers, prevailing market conditions, lack of adequate current financial information about the City, or a material adverse change in the financial condition of the City, whether or not the Securities are in default as to principal and interest payments, and other factors which may give rise to uncertainty concerning prudent secondary market practices. Recent Legislative Proposals Congress and the President periodically work on various proposals to increase income taxes and to reduce tax deductions and expenditures. These discussions have made it clear that the tax exemption of municipal bonds is considered a tax expenditure and as such there is no guaranty that the tax exempt status on municipal bonds will remain unchanged as a result of these discussions. If a legislative change is enacted which results in all, or a portion, of the interest on the Securities being subjected to Federal income taxes, such legislation or proposals could affect the value or marketability of the Securities. Prospective purchasers of the Securities should consult their own tax advisers regarding the impact of any change in law on the Securities. LEGAL MATTERS All matters incident to the authorization and issuance of the Securities by the City are subject to the approval of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City. The factual and financial information appearing herein has been supplied or reviewed by certain officials of the City and its certified public accountants, as referred to herein. Bond Counsel has participated in the preparation of the matters appearing in the sections of this Official Statement captioned THE NOTES, THE BONDS, LEGAL MATTERS, TAX MATTERS, and APPENDIX B-FORM OF CONTINUING DISCLOSURE UNDERTAKING. TAX MATTERS General The following is a summary of the material federal and State of Kansas income tax consequences of holding and disposing of the Securities. This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all aspects of federal income taxation that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of holders subject to special treatment under the federal income tax laws (for example, dealers in securities or other persons who do not hold the Securities as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws of the State of Kansas, does not discuss the consequences to an owner under state, local or foreign tax laws. The summary does not deal with the tax treatment of persons who purchase the Securities in the secondary market. Prospective investors are advised to consult their own tax advisors regarding federal, state, local and other tax considerations of holding and disposing of the Securities. 16 Opinion of Bond Counsel In the opinion of Bond Counsel, under the law existing as of the issue date of the Securities: Federal Tax Exemption: The interest on the Securities [(including any original issue discount properly allocable to an owner thereof}] is excludable from gross income for federal income tax purposes. Alternative Minimum Tax. Interest on the Securities is not an item of tax preference for purposes of computing the federal alternative minimum tax. Bank Qualification. The Securities have not been designated as "qualified tax-exempt obligations" for purposes of Code §265{b ). Kansas Tax Exemption. The interest on the Securities is exempt from income taxation by the State of Kansas. No Other Opinions. Bond Counsel's opinions are provided as of the date of the original issue of the Securities, subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Securities in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Securities in gross income for federal income tax purposes retroactive to the date of issuance of the Securities. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Securities. Other Tax Consequences [Original Issue Discount. For federal income tax purposes, original issue discount {"010") is the excess of the stated redemption price at maturity of a security over its issue price. The issue price of a security is generally the first price at which a substantial amount of the security of that maturity has been sold to the public. Under Code§ 1288, 010 on tax-exempt obligations accrues on a compound basis. The amount of 010 that accrues to an owner of a Security during any accrual period generally equals: (a) the issue price of such Security plus the amount of OID accrued in all prior accrual periods; multiplied by {b) the yield to maturity on such Security (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period); minus (c) any interest payable on such Security during such accrual period. The amount of 010 so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excludable from gross income for federal income tax purposes, and will increase the owner's tax basis in such Security. Prospective investors should consult their own tax advisors concerning the calculation and accrual ofOID.) For each Security, the stated redemption price at maturity includes all payments on the Security, except interest payable at least annually over the term of the Security ("qualified stated interest"). Since the May 1, 2020 interest payment on the Notes will be paid more than one year after the Notes are issued, none of the interest payments on the Notes constitute qualified stated interest, and the stated redemption price of the Notes includes all payments on the Notes. [Original Issue Premium. For federal income tax purposes, premium is the excess of the issue price of a Security over its stated redemption price at maturity. The issue price of a Security is generally the first price at which a substantial amount of the Securities of that maturity have been sold to the public. Under Code §171, premium on tax-exempt obligations amortizes over the term of the Security using constant yield principles, based on the purchaser's yield to maturity. As premium is amortized, the owner's basis in the Security and the amount of tax- exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner, which will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of the Security prior to its maturity. Even though the owner's basis is reduced, no federal 17 income tax deduction is allowed. Prospective investors should consult their own tax advisors concerning the calculation and accrual of premium.] Sale, Exchange or Retirement of Securities. Upon the sale, exchange or retirement (including redemption) of a Security, an owner of the Security generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Security (other than in respect of accrued and unpaid interest) and such owner's adjusted tax basis in the Security. To the extent the Securities are held as a capital asset, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the Security has been held for more than 12 months at the time of sale, exchange or retirement. Reporting Requirements. In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on Securities, and to the proceeds paid on the sale of Securities, other than certain exempt recipients (such as corporations and foreign entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dividend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit against the owner's federal income tax liability. Collateral Federal Income Tax Consequences. Prospective purchasers of the Securities should be aware that ownership of the Securities may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch profits tax, life insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Securities. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Securities should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Securities, including the possible application of state, local, foreign and other tax laws. RATINGS The City has applied to Moody's Investors Service for a rating on the Notes and Bonds. Any explanation of the significance of such ratings may be obtained only from said rating agency. There is no assurance that the ratings will remain for any given period of time or that they may not be lowered or withdrawn entirely by the rating service if, in their judgment, circumstances so warrant. Any such downward change in or withdrawal of the ratings may have an adverse effect on the market price of the Notes and Bonds. MUNICIPAL ADVISOR George K. Baum & Company, Kansas City, Missouri, has acted as Municipal Advisor to the City in connection with the sale of the Securities. The Municipal Advisor has assisted the City in the preparation of this Official Statement and in other matters relating to the issuance of the Securities. The fees of the Municipal Advisor are contingent upon the issuance of the Securities. UNDERWRITING The Notes are being purchased by [ ], (the "Notes Underwriter'') at a price equal to the principal amount of the Notes, plus an original issue [premium/discount] of$[ ], less an underwriting discount of $ ]. The Bonds are being purchased by [ ] (the "Bonds Underwriter'') at a price equal to the par amount of the Bonds, plus an original issue [premium/discount] of$[ ], less an underwriting discount of$[ ]. The Notes Underwriter and the Bonds Underwriter are collectively referred to herein as the "Underwriters". 18 ABSENCE OF MATERIAL LITIGATION The Transcript of Proceedings will contain a certificate of non-litigation dated as of the closing date and executed by the City to the effect that, except as disclosed in the Official Statement, there is no controversy, suit, or proceeding of any kind pending or, to the knowledge of the City, threatened wherein or whereby any question is raised, or may be raised, questioning, disputing, or affecting in any way the legal organization of the City or its boundaries or the legality of any official act shown to have been done regarding the issuance of the Notes and Bonds or the constitutionality or validity of the obligation represented by the Bonds or the means provided for the payment of the Notes and Bonds. CONTINUING DISCLOSURE The Securities and Exchange Commission (the "SEC") has promulgated amendments to Rule 15c2-12 (the "Rule"), requiring continuous secondary market disclosure. In connection with the issuance of the Securities, the Issuer will enter into a continuing disclosure undertaking (the "Disclosure Undertaking") wherein the Issuer covenants to annually provide certain financial information and operating data (collectively, the "Annual Report") and other information necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. Pursuant to the Disclosure Undertaking, this Issuer has agreed to file its Annual Report with the national repository ("EMMA") not more than 180 days after the end of the City's Fiscal Year, commencing with Fiscal Year ended in December 31, 2018. In Bond Resolution and Note Resolution, the Issuer covenants with the Underwriter and the Beneficial Owners to apply the provisions of the Disclosure Undertaking to the Securities. This covenant is for the benefit of and is enforceable by the Beneficial Owners of the Securities. For more information regarding the Disclosure Undertaking, see "APPENDIX B -FORM OF CONTINUING DISCLOSURE UNDERTAKING." The Issuer believes it has complied during the past five years with its prior undertakings under the Rule, except as follows: 1. Due to administrative oversight in implementation of a new disclosure undertaking, for the fiscal year ended December 31, 2013, the Issuer failed to timely file certain operating data, including a "Financial Overview.'' This operating data was filed in a supplemental operating data filing on July 8, 2014. A notice of failure to file such operating data was filed on July 15, 2015. 2. Certain operating data for the fiscal year ended December 31, 2014 was timely filed in summary form. Additional details related to such summary information were included in the City's audited financial statements for the fiscal year ended December 31, 2014 that were filed on October 26, 2015. 3. During the past five years, the Issuer has made filings of event notices on EMMA with respect to certain bond calls, defeasances, and rating changes, however, during said time period, the Issuer did not make timely filings of event notices on EMMA relating to all bond calls, defeasances or rating changes. The Issuer believes this information was disseminated or available through other sources. The City's audited financial statements for the fiscal years ended December 31, 2016 and 2017 were not yet completed by the filing deadlines. In compliance of the City's prior disclosure undertakings, the City timely filed unaudited financial statements. The City filed the audited financial statements for fiscal years ended December 31, 2016 and 2017 promptly when they became available which was October 16, 2018. The City's final audited financial statements for these years were delayed because of challenges with financial software conversion, staff turnover and delayed receipt of component unit audits. 19 CERTIFICATION OF THIS OFFICIAL STATEMENT The preparation and distribution of this Official Statement has been authorized by the City. This Official Statement is hereby duly approved by the governing body of the City as of the date on the cover page hereof. CITY OF SALINA, KANSAS 20 APPENDIX A FINANCIAL OVERVIEW OF THE CITY 2018 Estimated Actual Valuation (1) 2018 Assessed Valuation Outstanding General Obligation Bonds (2) Population (2017 U.S. Census Bureau Estimate} General Obligation Debt Per Capita Ratio of General Obligation Debt to Estimated Actual Valuation Ratio of General Obligation Debt to Estimated Assessed Valuation Outstanding Temporary Notes (3) Outstanding State Loans (4) Outstanding Lease Purchase Obligations Outstanding Revenue Bonds Overlapping General Obligation Debt (5) Direct and Overlapping General Obligation Debt (6) Direct and Overlapping General Obligation Debt Per Capita Ratio of Direct and Overlapping Debt to Estimated Actual Valuation Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation $ 3,150,409,123 $ 487,787,922 $ 66,330,000 $ $ $ $ $ $ $ $ 46,994 1,411 2.11% 13.60% 11,030,000 11,337,716 782,954 34,420,000 131,123,835 219,821,551 4,678 6.98% 45.06% (1) For a further description of how Estimated Actual Valuation is calculated and additional historical figures see the section titled FINANCIAL INFORMATION CONCERNING THE CITY -"Estimated Actual Valuation". (2) Includes the Bonds. Preliminary; subject to change. (3) Includes the Notes and excludes the notes to be retired with proceeds from the sale of the Bonds. Preliminary; subject to change. (4) The City intends to repay such loans from the net revenues of its municipal water and sewer system. However, such loans are ultimately secured by the City's full faith and credit. See DEBT SUMMARY OF THE CITY-"Current Indebtedness -State Loans". (5) For a more detailed explanation of the overlapping debt of the other jurisdictions, see DEBT SUMMARY OF THE CITY-"Overlapping Debt". (6) Includes outstanding general obligation bonds, temporary notes and state loans of the City and general obligation bonds of overlapping jurisdictions. A-1 GENERAL INFORMATION CONCERNING THE CITY Location and Size The City of Salina is located in north central Kansas, near the geographic center of the contiguous United States. It is the seventh largest city in Kansas, with a 2017 U.S. Census Bureau estimate of 46,994. The City is the county seat for Saline County which had an estimated 2017 U.S. Census Bureau population of 54,734. Situated at the intersection of Interstate Highways 70 and 135, the City of Salina serves as the industrial, medical, retail, trade and service hub for north central Kansas. Kansas City, Kansas, and Wichita, Kansas, are 175 and 95 miles away, respectively, via the direct access of these two major highways. The City encompasses a total area of approximately 23 square miles. Government The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas. The City has had a Commission-City Manager form of government since 1921. The Commission comprises five members elected at-large. Each year the Commission chooses one member to act as Mayor. The City Manager is appointed by the Governing Body and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The Governing Body is responsible for the policy determination, and the City Manager is responsible for the administration of the municipal government. Salina became a City of the first class on July 9, 1920. There are no organized city employee unions. The present elected officials of the City, along with the expiration of their current terms of office, are as follows: Population Name Trent W. Davis, M.D. Mike Hoppock Karl Ryan Melissa Rose Hodges Joe Hay, Jr. TI tie Mayor Vice Mayor Commissioner Commissioner Commissioner Term Expires 2020 2022 2020 2022 2020 The City of Salina has a population that is approaching metropolitan area status. This is defined by the U.S. Census Bureau as cities with 50,000 inhabitants or more. The following table and graph show the population for the City for selected years as provided by the U.S. Census Bureau. Year 2017 2016 2015 2014 2013 A-2 U.S. Census Bureau Population 46,994 47,336 47,813 47,867 47,846 Police and Fire Protection The City of Salina provides police and fire protection services to residents of the City and surrounding areas. The two departments employ 194 full-time employees for out of the 436 total employed by the City. Firefighting services are provided from four stations located throughout the City with 88 full-time firefighters. The fire department operates 35 vehicles and provides emergency medical services. The Department was recently upgraded to an Insurance Services Office rating of 2. The police department employs 102 personnel, of which 72 are sworn positions. The Department operates 45 police vehicles, including patrol vehicles, motorcycles, and scooters. Both Departments are accredited by their respective professional organizations. Educational Facilities The City of Salina has a very complete and diverse educational system from the primary level up to its higher educational institutions. Unified School District No. 305 provides public education through its eight elementary, two middle, and two senior high schools. The District also operates alternative education, vocational-technical, and special education schools. Current enrollment is over 7,400. Additionally, there are a number of parochial institutions that operate two grade schools, two junior high schools, and one senior high school. A military school is located in the City and operates both a grade school and high school. The City is home to five regional or private upper-level specialty schools. The Kansas Highway Patrol has a training academy located in Salina. Kansas State University Polytechnic Campus at Salina. The University offers a variety of two-and four-year aviation and technology degree programs. Areas of emphasis include civil, electrical and mechanical engineering technologies, aeronautical studies, and avionics. The campus is located entirely within the boundaries of the Salina Airport Industrial Center. Approximately 572 students are currently enrolled in the school. Kansas Wesleyan University. Kansas Wesleyan University was founded in 1886 and is located within the City. Currently, Kansas Wesleyan maintains an enrollment of approximately 791 students, the majority from Kansas and surrounding states. The school, based on a liberal arts foundation, offers more than 50 major programs, including graduate studies. Evening degree completion programs for adults are also available. Kansas Wesleyan is a member of the Associated Colleges of Central Kansas, a consortium of six academic institutions within 70 miles of the University through which students may enroll in courses and utilize resources. Transportation In addition to 1-70 and 1-135, US-81 and US-40 also intersect Salina. Several freight companies provide motor freight service in Salina with direct and connecting schedules to all cities in the United States. Bus service is available at regular intervals during each day in all directions. Union Pacific gives the City rail service in four directions out of the City and provides daily package-car service in and out of Salina. There are approximately 8 daily freights stopping in the City. Existing terminals have adequate capacity to handle present and greatly increased future capacity. Approximately 30 miles of storage tracks are available. The City is served by the Salina Regional Airport and scheduled air service is provided by Great Lakes Airlines. The airline offers daily scheduled passenger air service to Denver International Airport with a 30-passenger Embraer EMB-120 regional aircraft. Great Lakes Airlines is a United Airlines code share partner. A-3 Utilities and Infrastructure Westar Energy supplies electricity and Kansas Gas Service provides natural gas to the City. The City owns its own water and sewage system. Additionally, the City is responsible for street maintenance and police and fire protection for the Airport. SBC provides telephone service. Two cellular phone companies provide service to the City. Health Facilities The City is served by Salina Regional Health Center ("SRHC"), a 394-bed (223 staffed) regional facility. SRHC is an acute care facility for the diagnosis and treatment of all types of diseases and conditions, and includes a cancer treatment center and two medical office buildings. The institution is also a 50% partner in a separate surgical hospital adjacent to the Asbury campus of SRHC. Several other facilities providing mental health services, counseling, and alcohol and drug dependency treatment programs are located in the City. Financial Institutions Four banks are headquartered in the City and reported combined deposits in excess of $969.01 million as of Fall 2018. A savings bank has a branch office in the City. There are several credit unions available in the city. Source: Kansas Bank Directory Pension and Employee Retirement Plans The Issuer participates in the Kansas Public Employees Retirement System ("KPERS") established in 1962, as an instrumentality of the State, pursuant to K.S.A. 74-4901 et seq., to provide retirement and related benefits to public employees in Kansas. KPERS is governed by a board of trustees consisting of nine members each of whom serve four-year terms. The board of trustees appoints an executive director to serve as the managing officer of KPERS and manage a staff to carry out daily operations of the system. As of December 31, 2017, KPERS serves approximately 311,000 members and approximately 1,500 participating employers, including the State, school districts, counties, cities, public libraries, hospitals and other governmental units. KPERS administers the following three statewide, defined benefit retirement plans for public employees: (a) Kansas Public Employees Retirement System; (b) Kansas Police and Firemen's Retirement System; and (c) Kansas Retirement System for Judges. These three plans are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Kansas Public Employees Retirement System is the largest of the three plans, accounting for approximately 95% of the members. The Kansas Public Employees Retirement System is further divided into two separate groups, as follows: (a) State/School Group -includes members employed by the State, school districts, community colleges, vocational-technical schools and educational cooperatives. The State of Kansas makes all employer contributions for this group, the majority of which comes from the State General Fund. (b) Local Group -all participating cities, counties, library boards, water districts and political A-4 subdivisions are included in this group. Local employers contribute at a different rate than the State/School Group rate. KPERS is currently a qualified, governmental, § 401(a) defined benefit pension plan, and has received IRS determination letters attesting to the plan's qualified status dated October 14, 1999 and March 5, 2001. KPERS is also a "contributory" defined benefit plan, meaning that employees make contributions to the plan. This contrasts it from noncontributory pension plans, which are funded solely by employer contributions. The Issuer's employees currently annually contribute 6% of their gross salary to the plan if such employees are KPERS Tier 1 members (covered employment prior to July 1, 2009), KPERS Tier 2 members (covered employment on or after July 1, 2009), or KPERS Tier 3 members (covered employment on or after January 1, 2015). The Issuer's contribution varies from year to year based upon the annual actuarial valuation and appraisal made by KPERS, subject to legislative caps on percentage increases. The Issuer's contribution was 8.39% of the employee's gross salary for calendar year 2018. The Issuer's contribution changed to 8.89% of gross compensation for calendar year 2019. In addition, the Issuer contributes 1% of the employee's gross salary for Death and Disability Insurance for covered employees. According to the Valuation Report as of December 31, 2017 (the "2017 Valuation Report") the KPERS Local Group, of which the Issuer is a member, carried an unfunded accrued actuarial liability ("UAAL") of approximately $1.458 billion at the end of 2017. The amount of the UAAL in 2017 changed from the previous year's amount due to the factors discussed in the 2017 Valuation Report; such report also includes additional information relating to the funded status of the KPERS Local Group, including recent trends in the funded status of the KPERS Local Group. A copy of the 2017 Valuation Report is available on the KPERS website at kpers.org/about/reports.html. The Issuer has no means to independently verify any of the information set forth on the KPERS website or in the 2017 Valuation Report, which is the most recent financial and actuarial information available on the KPERS website relating to the funded status of the KPERS Local Group. The 2017 Valuation Report sets the employer contribution rate for the period beginning January 1, 2020, for the KPERS Local Group, and KPERS' actuaries identified that an employer contribution rate of 8.61% of covered payroll would be necessary, in addition to statutory contributions by covered employees, to eliminate the UAAL by the end of the actuarial period set forth in the 2017 Valuation Report. The statutory contribution rate of employers currently equals the 2017 Valuation Report's actuarial rate. As a result, members of the Local Group are adequately funding their projected actuarial liabilities and the UAAL can be expected to diminish over time. The required employer contribution rate may increase up to the maximum statutorily allowed rate, which is 1.2% in fiscal year 2017 and thereafter. The Issuer has established membership in the Kansas Police and Fire Retirement System ("KP&F") for its police and fire personnel. KP&F is a division of and is administered by KPERS. Annual contributions are adjusted annually based on actuarial studies, subject to legislative caps on percentage increases. According to the 2017 Valuation Report, KP&F carried an UAAL of approximately $859 million at the end of 2017. For KP&F, the Issuer's employees currently annually contribute 7.15% of their gross salary to the plan. For the year beginning January 1, 2018, the Issuer contributes 20.09% of employees' gross compensation. Beginning January 1, 2019, the Issuer's contribution is projected to change to 22.13% of gross compensation for calendar year 2019. The Issuer is required to implement GASB 68 -Accounting and Financial Reporting for Pensions. KPERS produces a Schedule of Employer and Nonemployer Allocations and Schedules of Pension Amounts by Employer and Nonemployer (the "GASB 68 Report") which provides the net pension liability allocated to each KPERS participant, including the Issuer. The GASB 68 Report is available on the KPERS website at kpers.org/about/reports.html. The Issuer has no means to independently verify any of the information set forth on the KPERS website or in the GASB 68 Report. It is important to note that under existing State law, the Issuer has no legal obligation for the UAAL or the net pension liability calculated by KPERS, and such figures are for informational purposes only. A-5 Other Information Public recreation facilities available to city residents include 27 parks, a public golf course, baseball/softball fields, the Kenwood Cove Aquatic Park, the Stifel Theatre for the Performing Arts, the Salina Community Theater, two museums, tennis courts, and ice and roller skating facilities. Two private clubs provide additional recreational opportunities for residents of the City. The Tony's Pizza Events Center (formerly the Bicentennial Center), a 7,500-seat facility, with over 40,000 square feet of exhibit space, nicknamed "Mid-America's Meeting Place", provides a venue for the region's numerous concerts, exhibitions, conventions, and other events are also held in the Center. There are several radio stations in the City. Five standard television stations from Wichita serve the Salina area. Additionally, Cox Communications provides cable television and broadband internet service to subscribing customers. One public library with over 230,000 volumes, two college libraries, a medical library, and a law library are located within the City. ECONOMIC INFORMATION CONCERNING THE CITY The City of Salina benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the City. Such companies include Schwan's Global Supply Chain, Inc., Salina Vortex, GeoProbe, Bergkamp, Kasa Industrial Controls, Premier Pneumatics, Great Plains Manufacturing, PKM Steel, Crestwood Cabinets, McShares, Inc., Pepsi Cola, EIDorado Bus, Exide Battery, Advance Auto Parts Distribution Center, and Philips Lighting. Currently, manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The government sector and wholesale trade industries make up the second tier of Salina employers. The City serves as a 24-county regional trade center for north central Kansas. Many individuals and businesses within a 70-mile radius travel to the City to purchase consumer goods and services. This designation as a regional trade center is supported by the fact that the City had the third highest "trade pull factor" of all Kansas first class cities in 2012 according to Kansas State University. City trade pull factor is computed by dividing the per capita sales tax of a city by the statewide per capita sales tax. According to the Economic Impact Report, from December 31, 2016, over 100 businesses and organizations at the Salina Regional Airport and Airport Industrial Center employed 3,600 employees with a combined payroll in excess of $143.2 million. The report also cited that the Airport/ Airport Industrial Center accounted for 12 percent of the employment in Saline County and 25 percent of the total economic activity in a seven-county area. The Kansas Department of Labor estimated the civilian labor force in the City of Salina for the year 2017 to be 25,815 persons and year-to-date 2018 to be $25,815. The estimated median household income for the City in 2016 was $45,896 and owner-occupied housing rates in the City were 63.7% Salina is a city centered more on industry than agriculture. Currently, there are approximately 100 manufacturing and processing companies located in the City. The City, Saline County, the Chamber of Commerce, and the Salina Airport Authority have developed several economic incentives which can be offered as inducements to opening industrial facilities. These include property tax abatement for basic industry, the waiving of building permit and inspection fees, refunding of sales tax paid on machinery and equipment, and providing training for employees through the Salina Area Technical College and the Kansas State University at Salina. Additionally, a "build- to-suit-tenant" agreement is available on sites in the Airport Industrial Center that can provide 100% financing for land and building costs. A-6 In recent years, Dillon Companies, Inc., a subsidiary of Kroger Company, recently opened a 77,000 square foot facility. Dick's Sporting Goods and Marshalls clothing store opened in a building formerly occupied by Sutherland Lumber Company. In addition, several new restaurants have opened or expanded, including Olive Garden, Longhorn Steakhouse, Starbucks, Taco Bell and Daimaru Steakhouse. The Salina Airport Authority The Salina Airport Authority (the "Authority") is a body corporate and politic. The Authority was created by the City of Salina in April 1965 pursuant to the authority granted by the City by the surplus property and public airport authority act of the State of Kansas. The Authority was created for the purpose of accepting as surplus property portions of the former Schilling Air Force Base, which was closed by the United States Department of Defense in June 1965. By quitclaim deed the Authority received over 2,900 acres of land and numerous buildings for the purpose of operating and developing the Salina Municipal Airport and the Salina Airport Industrial Center. The Authority is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. In 2012, the Salina Municipal Airport was renamed the Salina Regional Airport. The Salina Regional Airport (the "Airport") is the only commercial service airport serving Salina/Saline County and the 24-county area, which comprises North Central Kansas. The Airport also services the corporate, business, private aviation and flight training needs of industry, business and individuals in the area. The Airport is also used by Kansas State University Polytechnic ("KSUP"). The campus of KSUP is located adjacent to the Airport. KSUP offers degrees in professional flight training, airframe and power plant maintenance, UAS, airport management and avionics technology. In April 2018, SkyWest Airlines began daily United Express Jet Service from Salina to Chicago and Denver. The airline provides maximum connection opportunities for both business and leisure travelers. Customers also have the opportunity to accrue frequent flier miles in United's MileagePlus loyalty program. With 550 daily United and United Express flights from Chicago and 370 daily United and United Express flights from Denver, Salina travelers have access to destinations around the globe. Salina passengers enjoy service aboard the quiet, comfortable Bombardier-manufactured Canadair Regional Jet, CRJ200. SkyWest Airlines is a top CRJ200 operator and has been named manufacturer's most reliable operator in North America five times. Also adding to the increased enplanement count is the Airport's status as an Airport of Embarkation/Debarkation by the Fort Riley, Kansas Army Installation located just 60 miles to the east of Salina on 1-70. The Airport also accommodates a wide variety of aircraft including business jets, military, flight training and general aviation aircraft. During 2018, the Salina Air Traffic Control Tower logged over 69,000 aircraft operations serving the needs of over 7,000 business jets, the professional flight training department of Kansas State University, general aviation and military aircraft. The Airport's fixed base operator, Avflight Salina, delivered over 2.6 million gallons of fuel to the wide variety of aircraft utilizing the Airport during 2018 and 156,531 as of January 2019. The Airport and Airport Industrial Center is home for over 100 businesses and organizations. Fifty-eight of the businesses and organizations are tenants of the Authority. One of the primary functions of the Authority is to facilitate the continued growth of jobs and payroll at the Airport and Airport Industrial Center. The Authority works in partnership with the City of Salina, Saline County, and the Salina Area Chamber of Commerce, and the Kansas Department of Commerce for the retention of existing business and industry and the recruitment of new business and industry. A 2016 report prepared by the Docking Institute at Fort Hays State University cited the business and organizations located at the Salina Regional Airport and Airport Industrial Center contributed approximately 60 percent of the total economic activity in Saline County during 2014. A-7 Major Employers Industrial development during the past ten years has established a broad, industrial base in and around the City. A list of the major employers is as follows. All figures represent total full-time employment excluding seasonal and part-time employees. Name Salina Regional Health Center Schwa n's Global Supply Chain, Inc. Unified School District No. 305 Great Plains Manufacturing Exide Technologies City of Salina REV Group Salina Vortex Wal mart Philips Lighting Company Source: Salina Chamber of Commerce Product/Business Healthcare Manufacturing School System Agricultural & Landscaping Equipment Battery Manufacturer City Government Manufacturing Manufacturing Discount Retail Manufacturing Estimated Employment 1,800 1,700 1,500 1,100 600 425 300 250 250 230 The following table shows the per capita personal income for residents of Saline County and the State during the years indicated: Vear 2017 2016 2015 2014 2013 2012 Source: Kansas Statistical Abstract Labor Force Saline County N/A $44,732 43,552 41,447 41,096 40,235 State of Kansas $47,603 47,221 47,161 46,393 45,838 44,795 The following tables show the labor force figures for the City of Salina and the State of Kansas. City of Salina: Total Unemployment Year labor Force Employed Unemployed Rate 2018 25,685 24,784 781 3.1% 2017 26,055 25,198 857 3.3 2016 26,194 25,170 1,024 3.9 2015 26,353 25,313 1,040 3.9 2014 26,303 25,159 1,144 4.4 A-8 State of Kansas: Total Unemployment Year Labor Force Emplo~ed Unemplo~ed Rate 2018 1,491,587 1,445,819 45,768 3.1% 2017 1,478,783 1,425,216 53,567 3.6 2016 1,484,001 1,422,122 61,879 4.2 2015 1,499,009 1,435,884 63,125 4.2 2014 1,500,353 1,432,359 67,994 4.6 Source: Kansas Department of Labor DEBT SUMMARY OF THE CITY Current Indebtedness The following is an overview of the City's outstanding indebtedness by classification as of the dated date of the Bonds. Figures do not include bonds for which payment has been provided through the creation of designated escrow accounts. General Obligation Bonds: Date Issued 12-15-08 07-15-09 05-01-10 10-15-10 07-15-11 07-15-12 07-15-12 02-15-13 07-15-13 07-30-14 07-29-15 07-27-16 07-27-16 07-27-17 11-27-18 04-24-19 Total Series 2008-B 2009-A 2010-A 2010-B 2011-A 2012-A 2012-B 2013-A 2013-B 2014-A 2015-A 2016-A 2016-B 2017-A 2018-A 2019-A 11llncludes the Bonds. 12lPreliminary; subject to change. Purpose Internal Improvements Internal Improvements Refunding & Improvement Refunding Internal Improvements Internal Improvements Refunding Taxable Improvements Improvements Improvements Revenue and Internal Imp. Internal Improvements Refunding Improvements Improvements Improvements {the Bonds) Amount of Issue $3,525,000 23,695,000 6,875,000 7,860,000 6,565,000 2,365,000 3,785,000 1,360,000 4,330,000 7,570,000 6,825,000 6,570,000 13,750,000 9,310,000 2,090,000 ll,445,000l2l Final Maturity 07-01-24 10-01-20 10-01-20 10-01-23 10-01-21 10-01-27 10-01-20 10-01-28 10-01-33 10-01-34 10-01-35 10-01-36 10-01-31 10-01-37 10-01-33 10-01-39 Amount Outstandingl1l $1,035,000 2,845,000 650,000 1,720,000 1,095,000 1,495,000 415,000 995,000 3,170,000 5,240,000 5,860,000 6,060,000 13,080,000 9,135,000 2,090,000 ll.445.000l2l $66,330,000 A portion of the City's outstanding general obligation bonds are payable from special assessments levied upon properties benefited by certain internal improvement projects, local option sales tax and transfers from enterprise funds of the City. If such payments are not provided in a timely manner, the principal of and interest on the bonds must then be paid from the City's ability to levy unlimited ad valorem taxes. See FINANCIAL INFORMATION -"Special Assessments" for a further description of special assessment financing. A-9 Temporary Notes: Final Original Date Maturity Note Amount Series Issued Date Amount Outstanding111 2018-2 11-27-18 11-15-19 $13,500,000 $4,945,000121 2019-1 04-24-19 05-01-20 6,085,000 6,085,000(3) $11,030,000 uiinciudes the Notes. 121Exciudes the portion of this note that will be redeemed with proceeds from the sale of the Bonds. (3)Preliminary; subject to change. Revenue Bonds: Revenue bonds are payable solely from the net revenues derived by the City from the operation of its combined water and sewage system or sales tax collected within certain special districts in the City. Revenue bonds do not represent a general obligation indebtedness of the City for which the City's taxing ability has been pledged. Date Pledged Issued Revenue 04-15-11 Utility System 12-21-18 Special District Sales Tax 12-21-18 Special District Sales Tax Lease Obligations (as of December 31, 2018): State Loans Item HVACSystem Year Issued 2012 Series 2011-A 2018-A 2018-B Original Amount $1,100,000 Amount of Issue $16,120,000 18,250,000 4,320,000 Final Year 2027 Final Maturit)l 10-01-31 12-01-38 12-01-38 Amount Outstanding $782,954 Amount Outstanding $11,850,000 18,250,000 4,320,000 $34,420,000 The following is a list of outstanding loans the City has taken out through the Kansas Department of Health and Environment ("KDHE") or Kansas Department of Transpiration ("KDOT") revolving loan fund programs. KDHE loans are typically repaid by net revenues from municipal water or sewer systems. KDOT loans can be repaid from a variety of sources including, but not limited to, property taxes, special assessments, special highway fund allocations and sales taxes. Regardless of the intended source of repayment, the loans are ultir:nately secured by the City's ability to levy unlimited ad valorem property taxes. Project Year Final Original Amount Number Puri;~ose Originated Pa)lment Date Amount Outstanding KDHE 2629 Water 2014 08-01-34 $9,330,000 $ 7,559,783 KDHE 2841 Water 2015 08-01-35 4,250,000 3,777,933 $11,337,716 A-10 Overlapping Debt According to the Saline County Clerk's office and bond offering documents, the following table shows the overlapping general obligation indebtedness of the City. The percent of an overlapping jurisdiction's debt that is applicable to the City is calculated by dividing the assessed valuation of that portion of the jurisdiction's boundaries which overlap those of the City by the total assessed valuation of such jurisdiction. Jurisdiction Salina Airport Authority Saline County* Unified School District No. 305 *As of December 31, 2018 Annual Debt Payments Amount Outstanding $ 21,990,000 224,409 117,030,000 Estimated Share of the City Amount Percentage $ 21,990,000 100.00% 164,823 73.45 108,969,011 93.11 $131,123,835 The following is a list of annual debt service requirements for the City's currently outstanding general obligation bonded indebtedness. All amounts are rounded to the nearest whole dollar. Existing Bonds Series 2019-A Bonds Year Principal Interest Prlnci11al Interest Total 2019 $6,805,000 $1,665,568 2020 4,655,000 1,476,904 2021 4,455,000 1,339,634 2022 4,540,000 1,186,544 2023 4,380,000 1,011,189 2024 3,995,000 840,269 2025 3,575,000 741,054 2026 3,245,000 649,784 2027 2,980,000 563,089 2028 2,645,000 482,144 2029 2,340,000 407,837 2030 1,840,000 343,774 2031 1,845,000 290,972 2032 1,730,000 236,627 2033 1,685,000 182,794 2034 1,470,000 129,613 2035 1,230,000 83,250 2036 930,000 45,413 2037 540,000 18,225 $54,885,000 $11,694,684 *Excludes payments made prior to the closing date of the Bonds. A·ll Historical Debt Information The following table shows historical balances of outstanding general obligation bonds for the City during the most recent five-year period. Bonds Debt to Debt to U.S. Debt Outstanding Assessed Estimated Actual Census Per Year December 31 Valuation Valuation Population Capita 2018 $54,885,000 11.25% 1.74% 46,994* $1,167.92 2017 59,985,000 12.46 1.94 46,994 1,276.44 2016 56,875,000 12.03 1.87 47,336 1,201.52 2015 57,535,000 12.43 1.94 47,813 1,203.33 2014 63,805,000 13.98 2.19 47,867 1,332.96 *Preliminary 2018 population figures are not yet available; 2017 data used for estimation purposes only. Future Indebtedness The City annually prepares and adopts a five-year capital improvements plan. This plan identifies and prioritizes potential capital improvement projects within the City and includes the respective funding sources. Over the next two years the City anticipates issuing general obligation bonds to retire its outstanding general obligation notes as well as providing general obligation note and/or bond funding for approximately $21.95 million of improvements including construction of a riverfront renewal project bridge reconstruction as sanitation system upgrades. A portion of the debt service payments on bonds issued for these projects are anticipated to be paid from local sales tax and sanitation system fees. Borrowing amounts described above do not include future subdivision improvement projects financed with general obligation bonds payable as to both principal and interest in part from special assessments levied upon the benefitted property. The City typically undertakes such projects after receiving and reviewing a valid petition from property owners. See FINANCIAL INFORMATION -"Special Assessments". The City has been involved with civil litigation concerning environmental contamination in certain areas in the vicinity of the Salina Regional Airport and the Salina Airport Industrial Center. The contamination was caused by military activity that occurred between 1942 and 1966 when the site was operated as the Schilling Air Force Base. The City, the Salina Airport Authority, Unified School District No. 305, and Kansas State University (the "Salina Public Entities") sued the United States seeking federal funds to clean up federal agency (DoD) caused contamination. The Salina Public Entities reached a mediated settlement agreement with the U.S. Department of Justice (DOJ) and the terms of the settlement are detailed in a Consent Decree filed in U.S. District Court on May 2nd, 2013. The Consent Decree provided for a 10% local share of initial project costs paid by the City. The Consent Decree provided for a remedial investigation and feasibility study (Rl/FS) to determine the extent and severity of the contamination and to determine the best method of remediation. The Rl/FS has been completed within budget and the parties are awaiting the issuance of the Kansas Department of Health and Environment's Corrective Action Decision (CAD). Issuance of the CAD will provide the basis for the resumption of mediation with the Federal Government to determine respective financial responsibilities for remediating the contamination. If a mediated settlement results in identification of a potentially material local share of the remediation cost, it may be necessary for the City to issue debt to fund the local share. The exact timing and amount, if any, of such borrowing cannot be determined at this time. Debt Pavment Record The City has always met principal and interest payments on all outstanding bonds and temporary notes when due and payable. A-12 Legal Debt limits Cities within Kansas are permitted to issue bonds in an aggregate amount not to exceed 30% of the total assessed valuation of the city. Bonds issued for the purpose of improving, acquiring, enlarging, or extending municipal utilities, including storm and sanitary sewer systems; bonds issued to pay the cost of improvements to intersections and streets in front of city or school district property; bonds for bridges as authorized by a vote of the electors of a city; bonds issued to refund outstanding-bonds; and bonds payable from revenue sources other than the general taxing authority of the city are not included in total aggregate debt for purposes of computing a city's debt limitation. FINANCIAL INFORMATION CONCERNING THE CITY Accounting, Budgeting and Auditing Procedures The City follows a modified accrual basis of accounting for all tax supported funds of the City, including the General Fund. An annual budget of estimated receipts and disbursements for the coming calendar year is required by statute to be prepared for all funds (unless specifically exempted). The budget is prepared utilizing the modified accrual basis which is further modified by the encumbrance method of accounting. For example, commitments such as purchase orders and contracts, in addition to disbursements and accounts payable, are recorded as expenditures. The budget lists estimated receipts by funds and sources and estimated disbursements by funds and purposes. The proposed budget is presented to the governing body of the City prior to August 1, with a public hearing required to be held prior to August 15, with the final budget to be adopted by a majority vote of the governing body of the City prior to August 25 of each year (or October 1 if the City must conduct an election to increase property taxes above the tax lid described below). Budgets may be amended upon action of the governing body after notice and public hearing, provided that no additional tax revenues may be raised after the original budget is adopted. The City may levy taxes in accordance with the requirements of its adopted budget. Property tax levies are based on the adopted budget of the City and the assessed valuations provided by the County appraiser. The Kansas Legislature passed legislation in 2015 and 2016 that, among other things, imposes an additional limit on the aggregate amount of property taxes that may be imposed by cities and counties, without a majority vote of qualified electors of the city or county (the "Tax Lid"). The Tax Lid became effective on January 1, 2017, and provides that, subject to certain exceptions, no city or county may approve an appropriation or budget which provides for funding by property tax revenues in an amount exceeding that of the immediately prior year, as adjusted to reflect the average changes in the consumer price index for the preceding five calendar years and provided that such average shall not be less than zero, unless approved by a majority vote of electors. The Tax Lid does not require an election in the following situations: "(1) Increased property tax revenues that, in the current year, are produced and attributable to the taxation of: (A) The construction of any new structures or improvements or the remodeling or renovation of any existing structures or improvements on real property, which shall not include any ordinary maintenance or repair of any existing structures or improvements on the property; (B) increased personal property valuation; (C) real property located within added jurisdictional territory; (D) real property which has changed in use; (E) expiration of any abatement of property from property tax; or (F) expiration of a tax increment financing district, rural housing incentive district, neighborhood revitalization area or any other similar property tax rebate or redirection program. (2) Increased property tax revenues that will be spent on: (A) Bond, temporary notes, no fund warrants, state infrastructure loans and interest payments not exceeding the amount of ad valorem property taxes levied in support of such payments, and A-13 payments made to a public building commission and lease payments but only to the extent such payments were obligations that existed prior to July 1, 2016; (B) payment of special assessments not exceeding the amount of ad valorem property taxes levied in support of such payments; (C) court judgments or settlements of legal actions against the city or county and legal costs directly related to such judgments or settlements; (D) expenditures of city or county funds that are specifically mandated by federal or state law with such mandates becoming effective on or after July 1, 2015, and loss of funds from federal sources after January 1, 2017, where the city or county is contractually obligated to provide a service; (E) expenses relating to a federal, state or local disaster or federal, state or local emergency, including, but not limited to, a financial emergency, declared by a federal or state official. The board of county commissioners may request the governor to declare such disaster or emergency; or {F) increased costs above the consumer price index for law enforcement, fire protection or emergency medical services. (3) Any increased property tax revenues generated for law enforcement, fire protection or emergency medical services shall be expended exclusively for these purposes but shall not be used for the construction or remodeling of buildings. (4) The property tax revenues levied by the city or county have declined: (A) In one or more of the next preceding three calendar years and the increase in the amount of funding for the budget or appropriation from revenue produced from property taxes does not exceed the average amount of funding from such revenue of the next preceding three calendar years, adjusted to reflect changes in the consumer price index for all urban consumers as published by the United States department of labor for the preceding calendar year; or (B) the increase in the amount of ad valorem tax to be levied is less than the change in the consumer price index plus the loss of assessed property valuation that has occurred as the result of legislative action, judicial action or a ruling by the board of tax appeals." The Tax Lid also provides that "[w]henever a city or county is required by law to levy taxes for the financing of the budget of any political or governmental subdivision of this state that is not authorized by law to levy taxes on its own behalf, and the governing body of such city or county is not authorized or empowered to modify or reduce the amount of taxes levied therefore, the tax levies of the political or governmental subdivision shall not be included in or considered in computing the aggregate limitation upon the property tax levies of the city or county." Because of ambiguities in the Tax-Lid, it is unclear how the various exceptions will be interpreted and how the provisions will be implemented. As a result, is unclear how the Tax Lid will impact the City. However, as described above, the Tax Lid provides a specific exception for "[b]ond, temporary notes, no fund warrants, state infrastructure loans, and interest payments not exceeding the amount of ad valorem property taxes levied in support of such payments" as well as certain lease payments. Therefore, the City is permitted under the Tax Lid to levy unlimited ad valorem taxes as necessary to pay principal of and interest on the Securities, as required by the Bond Resolution and the Note Resolution. The City cannot predict the impact of the Tax Lid on the ratings on the Securities, or the general rating of the City. A change in the rating on the Securities or a change in the general rating of the City may adversely impact the market price of the Securities in the secondary market. Kansas law prohibits governmental units from creating indebtedness unless there are funds on hand in the proper accounts and unencumbered by previous action with which to pay such indebtedness. An exception to this cash-basis operation is made where provision has been made for payment of obligations by bonds or other specific debt obligations authorized by law. The financial records of the City are audited annually by a firm of independent certified public accountants in accordance with generally accepted auditing standards. In recent years, the annual audit has been performed by Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. Copies of the audit reports for the past A-14 five (5) years are on file in the Clerk's office and are available for review. The audit for the Fiscal Year ended December 31, 2017 is attached hereto as APPENDIX C. The City has historically prepared a Comprehensive Annual Financial Report, which includes audited financial statements and other pertinent credit information. Appropriate periodic credit information necessary for maintaining the ratings on the Bonds will be provided by the City to the rating agencies rating the Bonds. The Governmental Accounting Standards Board (GASB) issued Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments in June 1999 ("Statement 34"), which established new requirements for the annual financial reports of state and local governments. Among the major changes embodied in Statement 34, governments will now be required to: (a) report on the overall state of the government's financial health, not just its overall "funds" in a newly required Management's Discussion and Analysis (MD&A), (b) provide the most complete information available about the cost of delivering services to their citizens in the annual report which will now also include financial statements prepared using full accrual accounting for all of the government's activities, (c) include information about the government's public infrastructure assets - such as bridges, roads and storm sewers, and (d) prepare an introductory narrative section analyzing the government's financial performance. The City has implemented Statement No. 34 in its financial statements. The financial information contained in the Appendices to this Official Statement are an integral part of this document and are intended to be read in conjunction herewith. Financial Statement Summary The following is a summary of the combined revenues, expenditures, and fund balances for the City's General Fund for the most recent years as shown in the City's Comprehensive Annual Financial Reports. This summary has not been prepared or reviewed by the City's auditor. Audited Audited Audited Audited Revenues: 2014 2015 2016 2017 Property Taxes $ 9,278,832 $9,244,160 $9,217,596 $10,115,784 Sales Tax 12,688,980 12,930,811 12,780,891 12,906,032 Other Taxes 5,636,239 5,663,843 6,347,717 5,215,264 Intergovernmental 1,162,384 975,720 1,301,106 1,133,310 Charges for Services 7,826,289 6,046,903 6,472,698 6,153,450 Investment Revenue 11,536 0 102,045 3,336 Miscellaneous 629,259 498,557 507,330 1,709,491 Total Revenues $37,233,769 $35,359,034 $36,729,383 $37,236,667 Expenditures: General Government $ 3,986,212 $5,342,433 $5,422,010 $5,423,241 Public Safety 19,558,487 21,267,630 21,664,398 21,628,730 Public Works 6,949,477 4,875,641 5,066,426 5,328,315 Public Health and Sanitation 146,178 754,347 703,606 749,656 Culture and Recreation 2,697,564 4,039,856 4,147,736 4,424,221 Planning and Development 2,209,836 586,358 980,950 752,825 Capital Outlay 843,975 1,041,690 1,098,587 896,026 Total Expenditures $36,391,729 $37,907,955 $39,083,713 $39,203,014 Revenues Over (Under) $842,040 $(2,548,921) $(2,354,330) $( 1,966,34 7) Other Sources (Uses) {137,351} 2,962,350 2,546,500 3,816,500 Net Change in Fund Balance $704,689 $413,429 192,170 1,850,153 Fund Balance January 1 $3,549,740 $4,254,432 $4,840,186 $5,032,356 Restatement of Prior Year Balance 0 172,325 0 0 Fund Balance December 31 $4,254,429 $4,840,186 $5,032,356 $6,882,509 A-15 Assessed Valuation According to the Saline County Clerk's Office, the following table gives the November 1 assessed valuation of the City, unless otherwise noted, in the years indicated. State Total Real Personal Assessed Motor Assessed Year Estate Propert~l Utilities Vehicle Valuation 2018 $403,835,383 $10,130,718 $20,485,144 $53,336,677 $487,787,922 2017 399,918,216 10,900,308 19,671,685 50,970,796 481,461,005 2016 389,872,825 11,653,719 19,323,055 51,833,505 472,683,104 2015 381,087,426 12,607,815 18,984,453 50,350,566 463,030,260 2014 376,131,346 13,652,885 17,670,147 48,865,900 456,320,278 *Personal property valuations began to decline in 2006 as a result of legislative action that started the process of removing significant portions of industrial machinery and equipment from the property tax rolls. Estimated Actual Valuation Based on assessment percentages provided by Kansas Statutes, real estate equalization ratios provided by the Kansas Department of Revenue {see FINANCIAL INFORMATION CONCERNING THE CITY -"Property Assessment Rates"), and estimated actual valuation figures provided by the Saline County Appraiser's Office, the following table provides November 1 estimated actual valuations for the City in the years indicated. Vear 2018 2017 2016 2015 2014 2013 Special Assessments Residential Real Estate Equalization Ratio N/A 11.04% 11.36 11.28 11.65 11.55 Estimated Actual Value $3,150,409,123 3,097,885,103 3,046,949,034 2,968,008, 193 2,917,267,724 2,889,385,914 The City has pursued a policy of utilizing special benefit districts to assign the cost of certain internal improvement projects to the property that directly benefits from the construction. Kansas statutes allow for the creation of special benefit districts to pay for the cost of a variety of improvements including street construction, storm water drains, sanitary sewer system improvements, street lighting, water system improvements, recreational facilities, flood control projects, bridges, and parking facilities. The City has typically utilized special benefit districts to pay for the costs associated with constructing streets, sidewalks, curbs, gutters, and lighting in new residential developments within the City. When a developer requests the use of Special Assessments to finance public improvements, the City requires that they pay 20% of the estimated cost of the project in cash, or file a letter of credit equivalent to 35% of the estimated cost of the project. The letter of credit is released when Certificates of Occupancy have been issued for 35% of the lots in the development. Special benefit districts have also been created to pay for the cost of improvements to streets and sidewalks in the City's downtown area. The creation of special benefit districts, the determination of property benefited, and the method of allocating the cost of the improvement is at the discretion of the City. Property owners have the ability to suggest improvements through a petition process and to comment on the final amount of their assessment. The City may or may not be included as part of the special benefit district. All property owners have the option to pay their portion of the improvement cost with a one-time payment during a 30-day assessment prepayment period or pay in annual installments with interest over a certain number of years. A-16 Upon completion of the special benefit district improvement projects and a 30-day prepayment period, the City issues general obligation bonds to provide for permanent project financing. The payment of the principal of and interest on such bonds is paid from the special assessments levied annually on the benefited property. Special assessments are paid at the same time and in the same manner as ad valorem property taxes. If at any time the special assessments received from the property owners are insufficient to provide for the payment of the principal of and interest on the bonds, the City is obligated to provide for the balance of such payments through its ability to levy unlimited ad valorem property taxes. Tax Collections Tax statements are mailed November 1 each year and may be paid in full or one-half on or before December 20 with the remaining one-half due on or before May 10 of the following year. Taxes that are unpaid on the due dates are penalized at a statutorily prescribed rate until paid or until the property is sold for taxes. Real estate bearing unpaid taxes is advertised for sale in July of each year and is sold by the County for taxes and all legal charges on the first Tuesday in September. Properties that are sold and not redeemed within two years after the tax sale are subject to foreclosure sale, except homestead properties which are subject to foreclosure sale after three years. Personal property taxes are assessed, due and may be paid in the same manner as real estate taxes. Motor vehicle property taxes are based on valuations provided by the Kansas Department of Revenue and the county average tax rate for the county in which the vehicle is registered. Motor vehicle taxes are payable to the county treasurer at the time of the vehicle's annual registration. Vehicle registration dates are assigned by the State in a manner such as to equal registration over a twelve-month period. Motor vehicle taxes are distributed by the county to the state, city and other taxing jurisdictions based on their proportionate tax levies. Delinquent personal and motor vehicle taxes are penalized at the same rate as delinquent real property taxes. The following is a summary of tax collections for the years shown. Levy Tax Taxes Year Rate Levied 2018* 28.394 $12,266,056 2017 26.129 11,162,057 2016 27.603 11,564,876 2015 27.311 11,209,245 2014 27.080 10,991,959 2013 26.927 10,868,225 2012 26.190 10,550,730 *Represents collections through December 31, 2018. Tax Levies City of Salina Salina library State Education & Other Unified School District No. 305 Airport Authority Central Kansas Extension District Saline County Total Nov 2013 Levy 26.927 5.761 1.500 58.116 4.504 1.176 37.895 135.879 Current Tax Collections Amount ~ $6,998,587 57.1% 10,902,136 11,320,197 10,984,630 9,312,515 8,101,775 6,597,038 Nov 2014 levy 27.080 6.034 1.500 55.605 4.486 1.285 37.047 97.7 97.9 98.0 84.7 74.5 62.5 Nov 2015 Levy 27.311 5.895 1.500 56.120 4.396 1.502 38.275 Nov 2016 levy 27.603 5.893 1.500 55.743 4.396 1.510 37.508 134.037 134.999 134.153 A-17 Current and Delinquent Tax Collections Amount $6,998,587 11,015,531 11,524,101 11,169,600 10,832,972 10,839,120 10,500,249 Nov 2017 levy 26.129 5.989 1.500 56.501 4.225 1.475 37.321 133.140 ~ 57.1% 98.7 99.6 99.6 98.6 99.7 99.5 Nov 2018 levy 28.394 6.014 1.500 57.522 4.998 1.476 38.437 138.341 Largest Taxpayers According to the Saline County Clerk's Office, the following table lists the largest taxpayers in the City, their November 2018 assessed valuations, and the percentage each taxpayer comprised of the total assessed valuation of the City. %of Type of Assessed Total Company Business Valuation Valuation Westar Utility $12,566,193 2.61% SFC Global Supply Chain Inc Manufacturing 7,015,419 1.46% RAF Salina LLC Regional Shopping Center 4,344,669 0.90% Kansas Gas Service Utility 3,971,538 0.82% S&B Motels Inc Motel 3,450,351 0.72% Central Mall Realty Holding LLC Retail Shopping Center 3,121,883 0.65% Union Pacific Railroad Co. Railroad 2,512,458 0.52% Menard Inc. Home Improvement Store 2,465,163 0.51% Individual Residential 2,397,798 0.50% Sams Real Estate Business Trust/Walmart Discount Store 2,308,958 0.48% Total $44,154,430 9.17% Building Permits Issued Building permits issued by the City currently maintain steady levels. This table reflects both private developments as well as the expansion to the educational facilities in the community. The five-year history of the total value of permits issued is: Sales Tax Year 2019 (Feb) 2018 2017 2016 2015 2014 Value $1,577,870 71,862,718 59,975,197 97,910,328 56,989,007 24,214,432 Sales tax collections are the responsibility of the Kansas Department of Revenue. The Department of Revenue distributes the local option countywide and citywide sales taxes on a monthly basis. Countywide sales taxes are distributed between the levying county and the cities located within the county based on population and relative tax levies. Citywide local option sales taxes are distributed solely to the levying city. Statewide sales taxes are retained entirely by the state. In 1982 the voters of Saline County, in accordance with Kansas statutes, approved a 1% countywide local option sales tax. In 1992 voters of the City approved a local option .50% citywide sales tax for purposes of helping fund general operations expenditures of the City. Both of these taxes were approved in perpetuity. In May of 2016, voters approved a .75% citywide retailers sales tax that will be in existence for 20 years and will be used for capital improvements and economic development. The 2016 sales tax replaced an existing sales tax of .40%. A-18 The total sales tax for goods and services in the City is 8.75%, which consists of 6.5% imposed by the State, 1% countywide local option sales tax, and 1.25% citywide local option sales tax. The following table lists the local- option sales tax receipts of the City of Salina in the years indicated. l1lAs of January 2019 Vear 2019fl) 2018 2017 2016 2015 2014 2013 Citywide Local Option Sales & Use Tax Receipts $1,244,987 14,632,584 14,404,702 10,458,630 10,372,573 10,099,512 9,705,026 City's Portion of 1% Countywide Local Option Sales & Use Tax Receipts $629,265 7,415,804 7,368,869 7,312,618 7,376,708 7,188,934 6,998,806 t2lcollections prior to October 1, 2016 represent taxes attributable to a .40% sales tax that was replaced with the .75% 2016 sales tax. Prior to October 1, 2016 the citywide aggregate sales and use tax rate was .90%. The aggregate rate was increased to 1.25% as a result of the approval of the 2016 sales tax discussed above. Source: Kansas Department of Revenue Appraisal and Assessment Procedures The determination of appraised and assessed valuation and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The Saline County appraiser annually determines the appraised valuation of property located in the City. The appraiser's determination is based on a number of criteria established by Kansas's statute. All property, with the exception of agricultural land, is appraised based on estimated fair market value. Agricultural property is appraised based on productivity value. Kansas statutes require that each parcel of real property be reviewed and inspected by the county appraiser once every four years for taxation purposes. Once appraised valuations have been determined, they are multiplied by the applicable statutory assessment rates to arrive at the assessed valuations. The total assessed valuation is then used to establish property tax rates. Property Valuation Challenges. Taxpayers may challenge the appraised value of their property by paying property taxes under protest. Such challenges are subject to administrative and judicial review. Taxes paid under protest are distributed to taxing jurisdictions in the same manner as all other property tax collections. If a taxpayer's challenge to the appraiser's valuation is successful, the county is liable to refund the amount of property taxes attributable to the protested value that was previously paid under protest. The county will then withhold from future property tax distributions to other taxing jurisdictions an amount equal to the jurisdiction's pro rata share of such refund. Any such withholdings from future property tax distributions may have a material adverse effect on the City's financial situation. Property Assessment Rates In order to determine the assessed valuation of a parcel of property for taxation purposes, the county appraiser multiplies the appraised value of the parcel by the applicable assessment rate. Current property assessment rates were established in 1986, effective in 1989, and slightly modified in 1992. The most significant 1992 modifications involved lowering the assessment rate on commercial and industrial real property from 30% to 25% and on residential property from 12% to 11.5%. The following table shows the current assessment rates for the different classes of taxable tangible property within the State of Kansas. A-19 Real Property: Residential Commercial and Industrial- Real Property Agricultural Land (1) Agricultural Improvements Vacant Lots Not-for-Profit (2) All Other Personal Property: (3) Mobile Homes Mineral Leaseholds (large) Mineral Leaseholds (small} Commercial & Industrial Machinery & Equipment All Other Utilities: Railroads All Other Public Utilities Motor Vehicles: Property Exempt: 11.5% 25.0 30.0 25.0 12.0 12.0 30.0 11.5% 30.0 25.0 25.0 30.0 federally mandated rate 33.0% 20.0% Property used for the following purposes, or portions thereof, are exempt from taxation provided certain statutory requirements are met: religious, educational, literary, scientific, benevolent, alumni associations, veterans' organizations, or charitable purposes, including parsonages and community service organizations providing humanitarian services. (1) Agricultural land is valued based on the productivity value of the property and not estimated market valuation. (2) A bill passed by the Kansas Legislature in 1994 clarified this class of property to include all property owned and operated by not-for-profit organizations not subject to federal income taxation pursuant to paragraphs (2), (3), (4), (7), (8), or (10) of Subsection C of Section 501 of the federal internal revenue code. This bill specifically established that private, not-for-profit country clubs would be assessed at 12% for all land that does not accommodate buildings or improvements. (3) The 2006 Kansas Legislature exempted from all property or ad valorem property taxes levied under the laws of the State, all commercial, industrial, telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existing business or creation of a new business. Equalization Ratios Annually, the Property Valuation Division of the Kansas Department of Revenue conducts a study to compare the assessed valuation of real property to estimated market value based on property sale prices. The study derives an equalization ratio which, when divided into assessed valuation, provides a means to approximate actual market value. According to the 2017 Preliminary Kansas Appraisal/Sales Ratio Study, the equalization ratio for residential real property in Saline County was 11.98%, and commercial and industrial property was 24.34%. A-20 APPENDIX B Form of Continuing Disclosure Undertaking CONTINUING DISCLOSURE UNDERTAKING $[11,445,000] CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2019-A $[6,085,000) CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 DATED APRIL 24, 2019 This CONTINUING DISCLOSURE UNDERTAKING dated as of April 24, 2019 (the "Continuing Disclosure Undertaking"), is executed and delivered by the City of Salina, Kansas (the "Issuer"). RECITALS 1. This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance of the above-described bonds and notes (collectively, the "Obligations") which are being issued simultaneously herewith as of April 24, 2019, pursuant to the Bond Resolution and Note Resolution (collectively, the "Resolution") adopted by the governing body of the Issuer. 2. The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Obligations and in order to assist the Participating Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"). The Issuer is the only "obligated person" with responsibility for continuing disclosure hereunder. The Issuer covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Continuing Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 2 of this Continuing Disclosure Undertaking, which may include the Issuer's CAFR, so long as the CAFR contains the financial information and operating data described in Section 2(a)(l) and (2). "Beneficial Owner" means any registered owner of any Obligations and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Obligations (including persons holding Obligations through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Obligations for federal income tax purposes. "Business Day" means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal office or designated payment office of the paying Continuing Disclosure Undertaking B-1 agent or the Dissemination Agent is located are required or authorized by law to remain closed, or (c) a day on which the Securities Depository or the New York Stock Exchange is closed. "CAFR" means the Issuer's Comprehensive Annual Financial Report, if any. "Dissemination Agent" means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to this Continuing Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of (a) or (b) in this definition; provided however, the term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. "Fiscal Year" means the 12-month period beginning on January 1 and ending on December 31 or any other 12-month period selected by the Issuer as the Fiscal Year of the Issuer for financial reporting purposes. "Material Events" means any of the events listed in Section 3 of this Continuing Disclosure Undertaking. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "Participating Underwriter" means any of the original underwriter(s) of the Obligations required to comply with the Rule in connection with the offering of the Obligations. Section 2. Provision of Annual Reports. (a) The Issuer shall, not later than 180 days after the end of the City's Fiscal Year, commencing with the Fiscal Year ending December 31, 2018, file with the MSRB, through EMMA, the following financial information and operating data (the "Annual Report"): (I) The audited financial statements of the Issuer for the prior Fiscal Year, prepared on a modified accrual basis of accounting other than GAAP. A more detailed explanation of the accounting basis is contained in the Official Statement related to the Obligations. If audited fmancial statements are not available by the time the Annual Report is required to be provided pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the fmancial statements contained in the final Official Statement relating to the Obligations, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. Continuing Disclosure Undertaking B-2 (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement related to the Obligations, as described in Exhibit A, in substantially the same format contained in the final Official Statement with such adjustments to formatting or presentation determined to be reasonable by the Issuer. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been provided to the MSRB and are available through EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3, and the Annual Report deadline provided above shall automatically become 180 days after the end of the Issuer's new Fiscal Year. (b) Pursuant to Section (d)(3) of the Rule, the provisions of Section 2 hereof shall not apply to the Notes, because they have a stated maturity ofless than 18 months. ( c) The Annual Report shall be filed with the MSRB in such manner and format as is prescribed by the MSRB. Section 3. Reporting of Material Events. Not later than 10 Business Days after the occurrence of any of the following events, the Issuer shall give, or cause to be given to the MSRB, through EMMA, notice of the occurrence of any of the following events with respect to the Obligations ("Material Events"): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; ( 10) release, substitution or sale of property securing repayment of the Obligations, if material; ( 11) rating changes; Continuing Disclosure Undertaking B-3 (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation of a merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; ( 14) appointment of a successor or additional trustee or the change of name of the trustee, if material; ( 15) incurrence of a Financial Obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties. Except as provided in Section 2(b) hereof, if the Issuer has not submitted the Annual Report to the MSRB by the date required in Section 2(a), the Issuer shall send a notice to the MSRB of the failure of the Issuer to file on a timely basis the Annual Report, which notice shall be given by the Issuer in accordance with this Section 3. Section 4. Termination of Reporting Obligation. The Issuer's obligations under this Continuing Disclosure Undertaking shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Obligations. If the Issuer's obligations under this Continuing Disclosure Undertaking are assumed in full by some other entity, such person shall be responsible for compliance with this Continuing Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Obligations, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3. Section 5. Dissemination Agents. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Continuing Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Continuing Disclosure Undertaking. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Undertaking, the Issuer may amend this Continuing Disclosure Undertaking and any provision of this Continuing Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Undertaking. In the event of any amendment or waiver of a provlSlon of this Continuing Disclosure Undertaking, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact Continuing Disclosure Undertaking B-4 on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, ( 1) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Continuing Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Continuing Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that required by this Continuing Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that specifically required by this Continuing Disclosure Undertaking, the Issuer shall have no obligation under this Continuing Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Default. If the Issuer fails to comply with any provision of this Continuing Disclosure Undertaking, any Participating Underwriter or any Beneficial Owner of the Obligations may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Continuing Disclosure Undertaking. A default under this Continuing Disclosure Undertaking shall not be deemed an event of default under the Resolution or the Obligations, and the sole remedy under this Continuing Disclosure Undertaking in the event of any failure of the Issuer to comply with this Continuing Disclosure Undertaking shall be an action to compel performance. Section 9. Beneficiaries. This Continuing Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Participating Underwriter, and the Beneficial Owners from time to time of the Obligations, and shall create no rights in any other person or entity. Section 10. Severability. .If any provision in this Continuing Disclosure Undertaking, the Resolution or the Obligations shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11. Electronic Transactions. The arrangement described herein may be conducted and related documents may be sent, received, or stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 12. Governing Law. This Continuing Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Kansas. [Remainder of Page Intentionally Left Blank.] Continuing Disclosure Undertaking B-5 IN WITNESS WHEREOF, the Issuer has caused this Continuing Disclosure Undertaking to be executed as of the day and year first above written. CITY OF SALINA, KANSAS (SEAL) Mayor City Clerk Continuing Disclosure Undertaking B-6 EXHIBIT A TO CONTINUING DISCLOSURE UNDERTAKING FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial information and operating data contained in the following sections and tables contained in Appendix A of the final Official Statement (with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer) relating to the Obligations: • Financial Overview of the City • FINANCIAL INFORMATION CONCERNING THE CITY -Assessed Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Estimated Actual Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Collections • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Levies • FINANCIAL INFORMATION CONCERNING THE CITY -Largest Taxpayers B-7 APPENDIXC December 31, 2017 Comprehensive Annual Financial Report The following is the Comprehensive Annual Financial Report for the City of Salina, Kansas for the fiscal year ended December 31, 2017, including financial statements as audited by the firm of Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2017 Letter of Transmittal Organizational Chart List of Principal Officials Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements: Government-wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet -Governmental Funds TABLE OF CONTENTS INTRODUCTORY SECTION FINANCIAL SECTION Reconciliation of the Total Governmental Fund Balance to Net Position of Governmental Activities Statement of Revenues, Expenditures, and Changes in Fund Balance -Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance with the Government-Wide Statement of Activities Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GAAP Basis) General Fund Tourism and Convention Fund Special Gas Fund Sales Tax Capital Fund Statement of Net Position -Proprietary Funds Statement of Revenues, Expenses, and Changes in Net Position -Proprietary Funds Statement of Cash Flows -Proprietary Funds Statement of Assets and Liabilities -Agency Funds i-iv v vi 1-3 4-15 16 17 18 19 20 21 22 23 24 25 26 27 28-29 30 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2017 TABLE OF CONTENTS -CONTINUED FINANCIAL SECTION -CONTINUED Notes to the Basic Financial Statements Required Supplementary Information Schedule of Funding Progress and Schedule of Employer Contributions KPERS Pension Plan Schedule of City's Proportionate Share of the Net Pension Liability Schedule of City Contributions Combining Statements and Individual Fund Schedules Combining Statements -Nonmajor Funds Fund Descriptions Combining Balance Sheet -Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds Combining Balance Sheet -Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Special Revenue Funds Combining Balance Sheet -Nonmajor Permanent Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Permanent Funds Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Non-GAAP Basis): Bicentennial Center Fund Business Improvement City Fund Neighborhood Park Fund Special Parks and Recreation Fund Special Alcohol Fund Sales Tax Economic Development Fund Arts & Humanities Fund Debt Service Fund Solid Waste Disposal Fund Water and Sewer Fund Sanitation Fund Golf Course Fund Workers' Compensation Reserve Fund Health Insurance Fund Central Garage Fund 31 -67 68 69 69 70-71 72 73 74-75 76-77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 Internal Service Fund Descriptions CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2017 TABLE OF CONTENTS -CONTINUED FINANCIAL SECTION -CONTINUED Combining Statement of Net Position -Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Net Position -Internal Service Funds Combining Statement of Cash Flows -Internal Service Funds Fiduciary Fund Descriptions -Agency Funds Combining Balance Sheet -Agency Funds Combining Statement of Changes in Assets and Liabilities -Agency Funds Net Position by Component-Last Ten Years Changes in Net Position -Last Ten Years STATISTICAL SECTION Fund Balances, Governmental Fund -Last Ten Years Changes in Fund Balances, Governmental Funds -Last Ten Years Tax Revenues by Source, Governmental Funds -Last Ten Years Assessed and Estimated Actual Value of Taxable Property -Last Ten Years Direct and Overlapping Property Tax Rates -Last Ten Years Principal Property Tax Payers Property Tax Levies and Distributions Direct Sales Rate by Taxing Entity Water Sales by Class of Customer Ratio of Outstanding Debt by Type Ratio of Net General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Pledged Revenue Coverage Demographic and Economic Statistics Principal Employers Page 95 96 97 98-99 100 101 102 Schedule 103 2 104 3 105 4 106 5 107 6 108 7 109 8 110 9 111 10 112 11 113 12 114 13 115 14 116 15 117 16 118 17 119 18 120 INTRODUCTORY SECTION DEPARTMENT OF FINANCE AND ADMINISTRATION 300 West Ash, P.O. Box 736 Salina, Kansas 67402-0736 C:ityof ~~ 'J.'\ l ~ r, _ t ...!::.-;..'~ Salina October 12, 2018 To the Citizens of the City of Salina, Kansas: TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 Website: www.salina-ks.gov The Comprehensive Annual Financial Report of the City of Salina, Kansas (the "City") for the year ended December 31, 2017, is hereby submitted. The City's Finance Department prepared the report. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of all various funds and account groups of the City. We believe that all disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. Report Format The Comprehensive Annual Financial Report is presented in three sections: Introductory, Financial and Statistical. The introductory section includes a description of the City, including services provided, and explanation of the City's accounting system and budgetary controls, and a brief discussion of the City's economic condition and outlook. The City's organizational chart is also included to assist the reader in understanding the structure of the City. The financial section includes the Independent auditor's report, Management's discussion & analysis, Government wide financial statements, Fund financial statements, Notes to the financial statements, and Individual and combining statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multi-year basis. The reader is specifically directed to Management's Discussion and Analysis (MD&A) which immediately follows the independent auditor's report. MD&A provides a narrative explanation and overview of significant features and trends reflected by data in the financial statements. Accounting Systems and Internal Controls A critical part of the control system is the City's comprehensive Budgetary and Financial Policies, which establish guidelines for budgetary and financial practices. The Budgetary and Financial Policies are reviewed by the City Commission and updated each year as a part of the budget process. City staff is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse and that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits require estimates and judgment by management. The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the Fund level, in accordance with State Statutes. However, management control is maintained at the department level. The City uses an encumbrance accounting system, in which estimated purchase amounts are recorded prior to the release of purchase orders to vendors. Open encumbrances are reported as reservations of fund balance at December 31, 2017 in the general fund and the special revenue funds. Various internal compliance procedures are implemented to insure proper implementation of the budget as well as to maintain a degree of accountability for both revenues and expenditures. Independent Audit Kansas Statutes Annotated 75-1122 requires an annual audit of the books of account, financial records and transactions of all administrative departments of the City by independent certified public accountants selected by the City Commission. This requirement has been complied with and the auditor's opinion has been included in this report. Profile of the Community The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas, and became a City of the First Class on July 9, 1920. The City has had a Commission-City Manager form of government since 1921. The Commission is comprised of five members elected at large. Each year the commission chooses one member to act as Mayor. The City Manager is appointed by the Commission, and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The current population of the City is 47,336. The reporting entity includes the City of Salina as well as two discretely presented component units, both proprietary fund types. The Salina Airport Authority operates the Salina Municipal Airport and Airport Industrial Center, and the Salina Housing Authority administers public housing programs within the City of Salina. The entity also includes one blended component unit. Salina Field House Qualified Active Low- Income Community Business, Inc. (SFH QalicB). SFH QalicB was created for the purpose of providing an indoor sports facility in the downtown corridor of the city of Salina. In addition, the City of Salina participates in a joint venture with Saline County, the City-County Building Authority. This report includes all funds and account groups of the City .. The City provides a full range of services including police and fire protection, development services, construction and maintenance of streets, drainage facilities and other infrastructure; recreational activities and cultural events; emergency medical services and convention facilities. In addition to general government activities, the City also provides water, wastewater, sanitation, and solid waste services; therefore, these activities are included in the reporting entity. Economic Outlook and Strength The City benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the community. Such companies include Pepsi-Cola, Exide Technologies, Blue Philips Lighting Company, EIDorado National, and Schwan's Global Supply Chain. Manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The City of Salina retains its position near the top of a list of first class cities with respect to "trade pull factor." The pull factor measures the degree to which a city or county area captures retail trade from outside the jurisdiction. A pull factor of greater than 1 indicates that a city is attracting more retail trade from outside the city/county than it is losing to other counties. It is apparent from this that Salina continues to serve as a regional economic hub in 2017. Major Initiatives In April, 2016, voters elected to replace the .40 cent capital improvement sales tax with a .75 cent capital improvement sales tax for a term of 20 years. Priorities for the sales tax are improving neighborhood streets and drainage, preserving stable property tax rates, ensuring a quality park system, constructing and maintaining community improvements, funding equipment for maintenance, repayment of future bonds for large projects and attracting quality jobs. As a result of this initiative, the City has seen a 38% increase in sales tax collections in 2017 as compared to 2016. In July of 2017, the Salina Field House was opened for business. Other major projects that were on going, included reconstruction on Country Club Road, South Well Field improvements, continued improvements to ii the water distribution system and preliminary design on the Smoky Hill River Renewal and Police Training Center projects. The City continues to address fiduciary pressures generated by a recessionary economy. General adjustments to the pay plan for cost of living changes at a rate of 2% were implemented in 2017. The City also allowed for merit review increases up to 3%. Capital lmproverr:ient Planning The City's Capital Improvement Plan (CIP) consists of two components. One component consists of "routine" capital~ncluding vehicle and equipment replacement, technology replacement, building repair and improvement, routine pavement maintenance activity, utility system enhancements and similar items. The amount of funding for these projects may fluctuate based on needs and funding availability, however, planned amounts are allocated over a multi-year period. Source of funding for routine capital is current cash resources from the fund appropriate to the nature of the purchase. The second component of the CIP includes major projects that typically require issuance of bonds or notes, although these projects may also be supplemented with available cash and grant financing. The plan is updated each year after an extensive evaluation of the demands on future financial resources. The Capital Improvement program is scheduled for a major revision as the result of the sales tax to be used for that purpose. Construction initiated: * 2018 2019 2020 2021 2022 Sales tax $ 8,260,500 $ 4,380,000 $4,385,000 $ 4,390,000 $ 3,895,000 Water & wastewater fund 1,776,101 General obligation bonds 4,500,000 6,135,000 25,000,000 Revenue bonds 38,250,000 4,000,000 5,850,000 32,000,000 4,000,000 Other sources 7,810,000 750,000 $ 60,596,601 $ 15,265,000 $35,235,000 $36,390,000 $ 7,895,000 *The year a project is scheduled reflects the year that construction is initiated. Preliminary work (design, acquisition) may precede this date by one or more years, and permanent financing may not occur until one (or more years depending on project magnitude) subsequent to this date. Financial Policies The City has adopted a formal set of Budgetary and Financial Policies, addressing such items as fund balances, capital improvements, operating budgets, long term debt management, accounting, auditing and financial reporting, revenues, cash management and investments. Financial policies contribute to financial stability by: 1. Providing consistent guidance in decision making 2. Establishing appropriate levels of fund balances 3. Governing the use of one time or unanticipated resources 4. Providing a multi-year capital improvements process 5. Establishing responsibilities and deadlines for budget preparation 6. Providing for a balanced annual operating budget 7. Providing guidelines on the use of debt, including appropriate purposes and terms 8. Provide a linkage between capital improvement scheduling and long term debt management planning 9. Require annual audits and financial reporting in conformance with Generally Accepted Accounting Procedures 10. Require timely and regular interim financial reporting to the Governing body 11. Insure the safety of cash and near cash resources (timely collection of Accounts Receivable, etc.). iii Acknowledgments The preparation of the Comprehensive Annual Financial Report was made possible by the dedicated Finance staff of the City of Salina and the professional advice and efforts of the Mize Houser auditing team. Finally, preparation of this report would not have been possible without the support of the City Commission. iv Municipal Court Risk Management Development Services Lauren Driscoll Building Services Neighborhood Services Planning & Zoning Community Relations Parks & Recreation Public Works Chris Cotten JimKowach Parks Division Engineering Recreation Division Public Services Golf Course Streets Facility Maintenance Traffic Control Animal Services Flood Control *Tony's Event Center Sanitation Solid Waste Central Garage Computer Technology Jack Rolfs CITIZENS CITY COMMISSION Karl Ryan, Mayor Trent Davis Melissa Rose Hodges Mike Hoppock Joe Hay Interim City Manager Michael Schrage .......................................................................................................... , Deputy City Manager Michael Schrage Utilities Finance/ Administration Martha Tasker Water Plant Division Wastewater Plant Division Utility Division Water Distribution Wastewater Collection Arts & Humanities Brad Anderson ( Smoky Hill Museum v Debbie Pack City Clerk Water Customer Accounting Finance Legal Services Clark Mize & Linville Chartered* Greg Bengtson Continuous Process Improvement Scott Gardner Fire Administration Fire Suppression Fire Prevention EMS Human Resources Natalie Fischer Police Brad Nelson Administration Patrol Division Support Division Investigative Division City of Salina, Kansas List of Principal Officials City Commission Karl Ryan, Mayor Trent Davis, Vice Mayor Mike Hoppock, Commissioner Melissa Hodges, Commissioner Joe Hay, Jr, Commissioner City Executive Staff Michael Schrage, Interim City Manager Lauren Driscoll, Director of Development Services Debbie Pack, Director of Finance and Administration Jack Rolfs, Director of Computer Technology Natalie Fischer, Director of Human Resources Greg Bengston, City Attorney Brad Nelson, Chief of Police Kevin Royse, Fire Chief Daniel Stack, City Engineer Jim Kowach, Director of Public Works Martha Tasker, Director of Utilities Chris Cotton, Director of Parks and Recreation Brad Anderson, Director of Arts and Humanities vi FINANCIAL SECTION I Mayor and City Commissioners City of Salina, Kansas Report on the Financial Statements INDEPENDENT AUDITOR'S REPORT • MIZE~J-IOUSER lYOMPANYP.A. We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of and for the year ended December 31, 2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the Kansas Municipal Audit and Accounting Guide. Those standards require we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. We did not audit the financial statements of the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB), which is included within the financial statements as a major governmental fund. This activity represents 6% and 0%, respectively, of the total assets and total revenues of the governmental funds. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for SFH QalicB, is based solely on the report of the other auditors. We also did not audit the financial statements of the Salina Airport Authority which statements reflect total assets and deferred outflows of resources of $47, 156,349 as of December 31, 2017 and total revenues of $5,559,861 for the year then ended, and the Housing Authority of the City of Salina which statements reflect total assets and deferred outflows of resources of $7,613,952 as of June 30, 2017 and total revenues of $2,623,955 for the year then ended, which are discretely presented component units in the accompanying financial statements. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, Insofar as It relates to the amounts included for the Salina Airport Authority and the Housing Authority of the City of Salina is based solely on the reports of the other auditors. www.mlzehouser.com • mhco@mlzehouser.com 534 S Kansas Ave, Suite 700• Topeka, KS 66603-3465 • 785.233.0536 p • 785.233.1078f 534 S Kansas Ave, Sulte400• Topeka, KS 66603-3454 • 785.234.5573 p • 785.234.1037f 7101 College Blvd, Suite 900 • Overland Park, KS 66210-1984 • 913.451.1882 p • 913.451.2211 f 211 E Eighth Suite All Lawrence, KS 66044-2771 • 785.842.8844 p • 785.842.9049 f 1 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business- type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina,. Kansas, as of December 31, 2017, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General, Tourism and Convention, Special Gas and Sales Tax Capital Funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 15 and the schedules of funding progress on page 68, the schedule of the City's proportionate share of the net pension liability on page 69 and the schedule of City contributions on page 69 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical tables as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying account and other records used to prepare the basic financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. 2 The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Certified Public Accountants Lawrence, Kansas October 12, 2018 fJA 3 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 (Unaudited) This section of the report contains an overview and analysis of the City of Salina's financial statements for the fiscal year ended December 31, 2017. The information contained here, as well as the information contained in the letter of transmittal, are intended to provide the reader of the financial statements with a well-rounded picture of the City's financial condition. Financial Highlights • On an accrual basis, the City's government-wide net position increased $9.4 million from current operations with net position increases of $7 .8 million and $1.6 million in governmental activities and business-type activities, respectively. • At the close of 2017, the City's governmental funds reported combined ending fund balances of $21.8 million, an increase of $5.1 million from the prior year. This primarily resulted from issuance of general obligation bonds in the Capital Projects Fund and the capital project expenditures in the SFH QalicB Fund. The General Fund balance increased $1.9 million over the prior year. • At the close of 2017, the City's enterprise funds reported a combined ending Net Position of $89.1 million, an increase of $1.5 million over prior year. Positive performance was shared by all enterprise funds, with the Water and Sewer Fund providing the bulk of the change ($.9 million). • Revenues from governmental funds decreased $.6 million from the prior year and revenues from business type funds increased $1.1 million from the prior year. • Revenues from investments continue to be minimal. The Basic Financial Statements The basic financial statements of the City include the government-wide financial statements and the fund financial statements. The notes to the financial statements follow the basic financial statements and are essential for the reader's understanding of the financial statements. Other supplementary information, including the combining schedules for non-major funds and the budgetary comparison reports, are at the end of this report to provide additional information for the reader. Government-wide Financial Statements The government-wide financial statements present the results of the City's operations using the accrual basis of accounting, the same basis as is used by private sector businesses. These statements focus on the long-term financial picture of the City as a whole. The Statement of Net Position reports all of the City's assets and liabilities. Net position, the difference between assets and deferred outflows of resources and liabilities, are an important measure of the City's overall financial health. Net position represents the total accumulated and unused resources available to the City for the purpose of providing services. Over time, the increases and decreases in net position can be monitored to determine if the City's financial position is improving or deteriorating. The Statement of Activities shows how net position has changed during the fiscal year. One unique feature of this statement is how it shows the revenues and expenses related to specific programs and how much of those programs were supported by the general taxes of the City. Since this statement is prepared on the accrual basis of accounting, all revenues and expenses are included, regardless of when cash is actually received. Both statements show the operations of the City broken down between governmental and business-type activities. Governmental activities are the operations of the City generally supported by taxes, such as public safety (police, fire, and EMS), public works, public health, and culture & recreation. Business-type activities are operations of the City that are intended to recover a significant portion of their costs through user fees and charges. These include water and sewer, refuse collection, the golf course, and operation of the City solid waste facility. 4 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The government-wide financial statements include the Salina Airport Authority and Salina Housing Authority as discretely presented component units of the City and the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) as a blended component unit. Note 1, item A in the Notes to the Financial Statements provides a more complete explanation of the relationship between these entities and the City of Salina. Fund Financial Statements The City uses three types of funds to manage its resources: governmental funds, proprietary funds, and fiduciary funds. A fund is a fiscal entity with a set of self-balancing accounts recording financial resources together with all related liabilities and residual equities and balances, and the changes therein. These accounting entities are separated for the purpose of carrying on specific activities or attaining certain objectives in accordance with regulations, restrictions, or limitations. Governmental fund financial statements are prepared on a modified accrual basis. Under this basis, revenues are recognized when they become measurable and available, and expenditures are recognized when the related fund liability is incurred with the exception of long term debt and similar items which are recorded when due. The focus is on the short-term financial picture of the operations of the individual fund, rather than long-term citywide view provided by the government-wide statements. Major governmental funds are presented in individual columns, while non-major governmental funds are aggregated into an "Other Governmental Funds" column. A combining statement for the non-major funds is presented as supplementary information in the back of the report. The information presented in these statements can be compared to the governmental activities information in the government-wide statements. The reconciliation at the end of the fund financial statements details the relationship between the two types of financial statements. Proprietary funds fall into two categories: enterprise funds and internal service funds. All proprietary funds are prepared on the accrual basis of accounting and are used to account for business-type activities. Enterprise fund statements present the same information that is in the government-wide statements for business-type activities, but in greater detail. The City of Salina currently operates four enterprise funds: Sanitation, Solid Waste Disposal, Golf Course, and Water and Sewer. Internal service funds are used to account for the cost of operations shared by various departments of the City. The city operates three internal service funds. Two of these are for self-insurance activity: Workers Compensation Reserve, and Health Insurance. The remaining accounts for the Central Garage operation. A combining statement for these internal service funds can be found in the supplementary information following the notes to the financial statements. Fiduciary funds are used by the City to account for resources held by the City for a third party. Agency funds are a special class of fiduciary fund in which liabilities always equal assets, and thus there is no net position. The City of Salina operates twelve agency funds. Schedules for these funds may be viewed in the supplementary section of this report. Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used. Permanent funds operated by the City include the Citizenship Trust, Cemetery and Mausoleum Endowments, and the Tri-centennial Commission fund. Notes to the Financial Statements The notes to the financial statements are an integral part of the basic financial statements since they contain valuable additional information necessary for gaining a complete understanding of the City's financial statements. Other Information In addition to the basic financial statements and the notes described above, this report also presents the general fund and major special revenue fund's budgetary statements as required supplementary information directly following the notes to the basic financial statements. The combining statements for the non-major funds are shown after the required supplementary information. Finally, the statistical section includes selected statistical data about the City's operations and economy. 5 The City as a Whole CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 This section will identify, discuss, and analyze significant differences and trends that will enhance the reader's understanding of the City's financial position. Tax Base and Economy The City of Salina relies on three major groups of revenues to support its operations. Each of these revenue streams has a different revenue base. In declining order of magnitude, they are charges for services, sales taxes, and property taxes. Sales taxes and property taxes apply primarily to governmental activities, while charges for services apply to both governmental (20%) and business-type (80%) activities. Charges for services account for about 43% ($36.8 million) of the City's revenue stream. Charges for service depend on both the rate that is set for the activity, as well as the volume of services provided. Significant services include water and wastewater fees, sanitation and landfill fees, licenses and permits, inspection fees and golf course fees. Charges for services increased $1.1 million (3%) from the prior year with the solid waste disposal fund increasing $370K (13.24%) and water and sewer fund increasing $533K (3%). The increase in charges for services in the solid waste disposal fund is a result an increase in disposal fees of 3.5%, as well as well as a large one time customer, while the increase in the water and sewer fund is a result of an increase in water and wastewater fees by 3%. Sales taxes are the next largest component of the revenue mix, providing 25.5% ($21.7 million) of the total revenues. The City receives a .90% City-wide sales tax, and also a portion of the County-wide 1 % sales tax. Forty- four percent, (a rate of .75%) of the City-wide sales tax is required to be used for special purposes. The remaining .5%, along with the City portion of the County-wide tax is available for general purposes. In 2008, Salina voters approved an increase of the special purpose .25% tax to a .40% tax. The extended tax is to sunset March 31, 2019. The tax was also modestly re-purposed, for Capital and Economic Development purposes only, as well as retaining a property tax stabilization component. In May 2017, Salina voters approved an increase in the special purpose .40% tax to a .75% tax (thus repealing the 2008 increase). This change became effective October 1, 2017 for twenty years. Propertv taxes are the third major component of the revenue mix, accounting for 13.6% ($11.6 million) of total revenues. Property taxes consist of two components: Real estate and personal property taxes which are determined by the mill levy set by the city and the assessed value of the property; and motor vehicle taxes which are established by a countywide average tax rate and the assessed value of the vehicle. Real estate assessed value increased by .5%. The total City mill levy decreased 1.06%. The overlapping levy decreased in 2017 by .63%. Personal property value continued to slide, presumably as a result of removing business equipment from the tax base. Personal property value has now dropped to $11.1 million from its peak of $39.7 million in 2007. At the 2017 tax rate, this exemption is equivalent to over $760K in annual lost revenue. Motor vehicle value decreased 1.66%. Motor vehicle taxes are distributed based on a formula using prior year's tax effort (similar to the Countywide Sales Tax Distribution). 6 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The following table summarizes the comparative property assessed values and tax levy rates: Comparative Property Values and Tax Levy Rates Fiscal (Budget) Year 2Q1I ~ Real Estate and Personal Property Assessed Valuation $ 422,364,328 $ 420,849,599 City Mill Levy($ per $1,000) Operating (General Fund) 21.694 19.95 Debt Service 5.909 7.361 Total City Rate 27.603 27.311 Total Overlapping Levy 134.153 134.999 Percent of Total Taxes Collected 99.9% 93.5% Ratio of Total Taxes (including delinquent collections) to taxes levied 101.7% 95.5% Motor Vehicle Valuation $ 50,970,796 $ 51,833,505 ~ $ 1,514,729 1.744 (1.452) 0.292 (0.846) 6.4% 6.2% $ (862,709) The unemployment rate in Salina decreased slightly from 3.3% at the end of 2016 to 2.7% at the end of 2017, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force stayed at 27,684. In 2017, the top ten property taxpayers accounted for 14.24% of total assessed value. This is less concentrated than ten years ago (at 15.48%). Statement of Net Position Net position may, over time, provide an indicator of a government's financial position. In the case of the City of Salina, assets and deferred outflows of resources exceeded liabilities by $212.8 million at December 31, 2017. This represents an increase in net assets of $9.4 million over 2016. A comparative Condensed Statement of Net Position at December 31, 2017 and 2016: 7 Cash and Investments Other current assets Noncurrent (capital) assets Total assets Total deferred outflows of resources Total assets and deferred outflows of resources Current liabilities Noncurrent liabilities Total liabilities Total deferred Inflows of resources Net position: Net investment in capital assets Restricted for permanent funds Restricted for debt service Unrestricted Total net position Percent of total net position Cash and Investments as a percentage of current liabilities CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Condensed Statement of Net Position As of Oecember 31 (In $000) Governmental Activities Business-T~e Activities 2017 2016 2017 2016 2017 $ 24,491 $ 26,873 $ 30,336 $ 29,505 $ 54,827 13,836 13,990 2,338 2,213 16,174 206,600 197,122 91,306 90,784 297,906 244,927 237,985 123,980 122,502 368,907 Total Prima!J'. Government %of %of 2017-2016 Total 2016 Total change 15% $ 56,378 16% $ (1,551) 4% 16,203 4% (29) llXYsi 287,906 JlQ%. 10000 J..Qllli 360,487 J..Qllli 8,420 5,968 6681 887 878 6,855 ~ 7 559 ~ __ _,_(7~04~) 250,895 244,666 124 867 123,380 12,540 17,370 3,879 3,598 102,076 98,158 31,685 32,020 114 616 115,528 35564 35,618 12 578 13,270 220 202 129,921 124,635 63,316 62,427 502 489 1,510 1,249 1,512 1,512 {8,232) {10,505) 24,255 23,621 123,701 115,868 89,083 87,560 58% 57% 42% 43% 195% 155% 782% 820% 375,762 16,419 11% 133761 ~ 150,180 ~ 12,798 193,237 91% 502 0% 3,022 1% 16,023 .a.% 212,784 J..Qllli 100% 334% 368,046 20,968 130,178 151,146 13,472 187,062 489 2,761 13116 203,428 100% 269% 14% ~ ~ 92% 0% 1% ~ ~ 7 716 (4,549) 3583 (966) {674) 6,175 13 261 2907 9 356 The largest segment of the City's net position reflects its investment in capital assets (land, buildings, streets and drainage facilities, utility plant, vehicles, equipment, etc.}, less any debt used to acquire those assets that is still outstanding. These assets are used to provide services to citizens. As a result, resources required to retire related debt cannot come from liquidation of the asset. Such resources generally must be provided from other sources, such as future taxes or user charges. A small portion of net position is restricted for debt service and permanent funds. The remainder (unrestricted) of net position may be used to meet the City's obligations to citizens and creditors. In 2017, the amount of net investment in capital assets increased by $6.2 million. Amount restricted for debt service increased by $261 thousand. Outside of the increase in net investment in capital assets and the increase of restricted for debt service, 2017 resulted in a $2.9 million increase to the net position. Total liabilities decreased in governmental activities and slightly decreased in business-type activities. In governmental activities, current liabilities and non-current liabilities decreased primarily due to a reduction in temporary notes and an increase in general obligation bonds. 8 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Statement of Activities A Condensed Statement of Activities is shown below. Condensed Statement of Activities For the Year Ended December 31 Governmental B uslness-T»>e Activities Activities Total Primary Government 2017-201B ~ 201B 2017 201l 2017 % ---~.....!:.... Change Program Revenues. Charges for Services $ 1'.l,1JO $ 1'.l,085 $ 26,703 $ 25,657 $ 36,803 43% $ 35,742 42% $ <061 Operating Grants and Contnbubons 4,541 4,332 4,541 5% 4,332 5% 209 Capital Grants end Contributions 734 0% 734 1% (734) General Revenues: Property Taxes 12,960 12,588 12,960 15% 12,588 15% 372 Sales Taxes 2<738 17,682 2<738 25% 17,682 21'/o 4,056 Other Taxes 6,899 7,991 6,899 8% 7,991 9% (<092) Investment Revenue 93 148 129 78 222 Oo/o 226 0% (4) Other M lscellaneous ~ ~ 1)3 __ 7_9 ~ ~% ~ !_% ~) Total Revenues: ~ ~ ~ ~ 85,269 ~% 85,2'5 !!£% 54 Expenses: General Government 9,781 9,188 9,781 13% 9,188 12% 593 Public Safety 23,120 22,232 23,120 30% 22,232 30% 888 Public Works 1'.l,345 9,773 1'.l,345 14% 9,773 13% 572 Public Health and Sanitation <126 W95 1,126 1'/o <095 1'/o 31 Culture and Recreation 6,880 6,612 6,880 9% 6,612 9% 268 Planning and Development '835 2,047 '835 2% 2,047 3% (212) So lid Waste Disposal 2,364 2,335 2,364 3% 2,335 3% 29 Water and Sewer '5,650 14,807 '5,650 21'/o 14,807 20% 843 Sanitation 2,178 2,043 2,178 3% 2,043 3% '135 Golf Course 852 792 852 1'/o 792 1'/o 60 Interest on Long Term Debt ~ ~ ---~ !_% ~ ~%~) Total Expenses ~ ~ 2<044 ~ ~ ~% ~ ~% ~ Increase In net assets before transfers 3,523 5,483 5,891 5,837 9,414 1'320 '906 Transfers and other extraordinary Items ~ ~ (4,367) ~~ ~) ti __f!J_) Change In Net Position ~ ~ ~ 2,256 ~ ~ ~ Nat Position January 1 ffi,869 1'.l6,704 87,559 85,229 203,428 '!!<933 1'495 Prior Period Adjustment ---82 ------1! 156 ~) Net Position January 1 restated ffi,869 1'.l6,786 87,559 85,303 203,428 '!12,089 1<339 Net Position December 31 ~ ~ ~ ~ ~ ~ ~ Governmental Activities. Charges for services attributable to governmental activities totaled $10.1 million and operating grants for those purposes were $4.5 million. Both of these revenue streams increased slightly from the prior year. The balance was funded by general revenues. Sales taxes accounted for $21.7 million of general revenues, with property taxes providing $12.9 million. The net position increased by $7.8 million as a result of governmental activities. This increase was primarily related to the increase in sales tax as a result of the collection of two months of sales tax with the new special purpose sales tax rate. Total expenses for governmental activities for the year ending December 31, 2017 were $54.8 million compared to $53.9 mllllon In 2016. Governmental activities represent 72% of the City's total expenses. The largest element of governmental activity expense was public safety, accounting for 30% of the total. 9 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Business Type Activities. Business-type activities are primarily supported by user charges, with a very small amount coming from investment and miscellaneous revenues. Total expenses for business-type activities for the year were $21 million, or 27% of the City's total expenses. The majority of this expense ($15.6 million} is attributable to water and sewer operations, with the other activities costing a combined total of $5.4 million. Net position decreased by $1.5 million. This decrease was primarily related to the increase in water and sewer fund expenses. Fund Financial Analysis Governmental Funds Fund Balances: The table below shows the Governmental Fund balances for major funds as of December 31, 2017 and December 31, 2016. Governmental Fund Balances as ofDecember 31, (in OOO's} Fund 2017 2016 Change General $ 6,883 $ 5,032 $ 1,851 Tourism and Convention 213 183 30 Special Gas 1,082 812 270 Sales Tax Capital 2,084 1,667 417 Schilling Capital Improvement 3,024 4,061 (1,037) Debt Service 1,510 1,249 261 Capital Projects 895 (6,823) 7,718 SFH QalicB 1,715 6,811 (5,096) Other Governmental Funds 4,353 3,685 668 $21,759 $ 16,677 $ 5,082 Total governmental fund balances increased by $5.1 million. The reasons for these changes are varied. The Schilling Capital Improvement Fund, which was created to account for U.S. Government and other funds received for the abatement of groundwater contamination, continues to decrease as the City uses funds previously distributed. The Capital Projects Fund increase was largely the result of the issuance of general obligation bonds to fund capital outlays on projects. The SFH QalicB fund was created to account for funds for the Salina Field House. 10 Revenues and Expenditures: CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The following table shows a comparison of revenues and expenditures (including other sources and uses) for major funds for the years ending December 31, 2017 and 2016. Consolidated Statement of Revenues and Expenditures for Major Governmental Funds For the years ended December 31 Modified Accrual Basis (in $000's) Fund 2017 Revenues (Including Other Financing Sources) General $ 41,864 $ Tourism and Convention 1,685 Special Gas 1,598 Sales Tax Capital 8,265 Schilling Capital Improvement 12 Debt Service 6,659 Capital Projects 12, 125 SFH QalicB 248 Other Governmental Funds 4,067 Total Revenues 76,523 Less Other Sources (19,924) Revenues, net of other sources $ 56,599 $ Expenditures (Including Other Finacing Uses) General $ 40,013 $ Tourism and Convention 1,655 Special Gas 1,328 Sales Tax Capital 7,848 Schilling Capital Improvement 1,049 Debt Service 6,398 Capital Projects 4,407 SFH QalicB 5,344 Other Governmental Funds 3,399 Total Expenditures 71,441 Less Other Uses (4. 160) Expenditures, net of other uses $ 67,281 $ 2016 Change 40,081 $ 1,783 1,643 42 1,570 28 4,439 3,826 10 2 20,228 (13,569) 16,432 (4,307) 12,573 (12,325) 4,119 ~) 101,095 (24,572) (43,876) 23,952 57,219 ~) 39,889 $ 124 1,624 31 1,396 (68) 4,392 3,456 1,484 (435) 19,724 (13,326) 12,718 (8,311) 5,762 (418) 3,838 ~) 90,827 (19,386) (3,971)~) 86,856 $ (19,575) Total revenues, including other sources, were down $24.6 million compared to 2016. The largest components of this change were a $13.6 million decrease in Debt Service Fund primarily resulting from decreased bond proceeds and a $12.3 million decrease in the SFH QalicB Fund primarily resulting from a decrease in bond proceeds. Expenditures decreased in most every fund. The Sales Tax Capital Fund expenditures increased as a result the ability of the city to expend additional revenues generated by the newly approved special purpose sales tax. 11 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Proprietary Funds The City of Salina operates four enterprise funds as well as five internal service funds. A summarized comparative Statement of Net Position follows for each enterprise fund: Corrparative Surrmary Statement of Net Fbsition as of Decerrber 31 (in $000's) Solid Waste Disposal Water and Sewer 2017 2016 Olange 2017 2016 Olange Current Assets $ 6,709 $ 5,886 $ 823 $ 24,014 $ 24,445 $ (431) Capital Assets 3,196 4,047 (851) 86,888 85,444 1,444 Deferred Outflows 79 72 7 676 675 1 Total Assets and deferred outflows $ 9,984 $ 10,005 $ (21) $ 111,578 $ 110,564 $ 1,014 Current Liabilities $ 445 $ 442 $ 3 $ 3,299 $ 3,043 $ 256 Noncurrent Liabilities 3,272 3,605 (333) 27,440 27,554 (114) Deferred nflow s 30 26 4 143 129 14 Total Liabilities $ 3,747 $ 4,073 $ (326) $ 30,882 $ 30,726 $ 156 Net investment in capital assets $ 2,041 $ 2,527 $ (486) $ 60,053 $ 66,038 $ (5,985) Restricted 1,512 1,512 Unrestricted 4,196 3,405 791 19, 131 12,288 6,843 Total Net R>sition $ 6,237 $ 5,932 $ 305 $ 80,696 $ 79,838 $ 858 UJrrent Assets as a percentage ot current liabilities 1508% 1332% 728% 803% Sanitation Golf Course 2017 2016 Olange 2017 2016 Olange Current Assets $ 1,787 $ 1,250 $ 537 $ 164 $ 136 $ 28 Capital Assets 826 894 (68) 395 399 (4) Deferred Outflows 102 100 2 32 31 1 Total Assets $ 2,715 $ 2,244 $ 471 $ 591 $ 566 $ 25 Current Liabilities $ 87 $ 75 $ 12 $ 48 $ 38 $ 10 Noncurrent Liabilities 733 613 120 240 248 (8) Deferred nflow s 38 36 2 11 11 Total Liabilities $ 858 $ 724 $ 134 $ 299 $ 297 $ 2 Net investment in capital assets $ 826 $ 894 $ (68) $ 395 $ 399 $ (4) Restricted Unrestricted 1,031 626 405 (103) (130) 27 Total Net R>sition $ 1,857 $ 1,520 $ 337 $ 292 $ 269 $ 23 Current Assets as a percentage of current liabilities 2054% 1667% 342% 358% 12 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Revenues, Expenses, and Changes in Net Position All enterprise funds show healthy results, with all funds reflecting increases in net position. Corrparative Sumrary of Revenues, Expenses and Oianges in Net R:lsition for the Year Ended Decerrber 31 (In $000's) Solid Waste !lsposal Water and Sew er 2017 2016 Change 2017 2016 Change Operating Revenues $ 3,185 $ 2,816 $ 369 $ 19,861 $ 19,328 $ 533 Operating Expenses 2,320 2,312 8 14,721 13,982 739 Operating hcome 865 504 361 5,140 5,346 (206) Non-operating revenues (expenses) (20) (8) (12) (832) (764) (68) Income (Loss) before Transfers 845 496 349 4,308 4,582 (274) Transfers in (out) (540) (640) 100 (3,450) (2,450) (1,000) Change in Net R:lsition 305 (144) 449 858 2,132 (1,274) Net R:ls ition January 1 5,932 6,067 (135) 79,838 77,649 2,189 Restatement 9 (9) 57 (57) Net R:lsition January 1, restated 5,932 6,076 (144) 79,838 77,706 2,132 Net R:lsition Decerrber 31 $ 6,237 $ 5,932 $ 305 $ 80,696 $ 79,838 $ 858 Sanitation Golf Olurse 2017 W2 Change £Qj.1 2016 Change Operating Revenues $ 2,886 $ 2,751 $ 135 $ 876 $ 840 $ 36 Operating Expenses 2,178 2,092 86 852 788 64 Operating hcome 708 659 49 24 52 (28) Non-operating revenues (expenses) 6 52 (46) (4) 4 Income (Loss) before Transfers 714 711 3 24 48 (24) Transfers in (out) (377) (492) 115 Change in Net R:lsition 337 219 118 24 48 (24) Net R:lsition January 1 1,520 1,296 224 268 217 51 Restaterrent 5 (5) 3 (3) Net R:lsition January 1, restated 1,520 1,301 219 268 220 48 Net R:lsition Decerrber 31 $ 1,857 $ 1,520 $ 337 $ 292 $ 268 $ 24 13 Budgetary Highlights CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The objective of budgetary controls is to ensure compliance with legal prov1s1ons embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the fund level, in accordance with State Statutes. Management control is maintained at the departmental level. Within the departments, considerable discretion is permitted. The City uses an encumbrance accounting system, in which estimated purchase orders are recorded prior to the release of purchase orders to vendors. Open purchase orders are reported as reservations of budgetary basis fund balances at December 31, 2017. Formal budgetary amendments are limited to those circumstances in which the need is perceived to alter the total fund budget. Re- allocation among departments or line items are not typically recorded as budgetary amendments. However, in addition to formal amendments, departments within the City are allowed to transfer budget between line items within a department. Budgets may also be transferred from department to department within each fund. As a result of these transfers, the original budget and the final budgets may not be the same for departments within a fund. Capital Assets and Debt Administration Capital Assets The total amount invested in Capital Assets for the City at December 31, 2017 was $297,905,515 net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets at December 31, 2017 and 2016: Capital Asset Balances Net of Depreciation as of December 31 (In OOO's) Gowmmental Acti"1ty Acti"1ty 2017 2016 2017 Equipment, Furniture and Fixtures $ 2,040 $ 1,190 $ 1,484 Vehicles 3,521 3,148 1,041 Buildings and lmpro-.ements 33,079 24,857 9,362 Land 24,093 24,002 1,542 Infrastructure 114,958 113, 114 75,727 Construction in Progress 28,909 30,811 2,150 Total $206,600 $197,122 $ 91,306 Changes to capital assets may be summarized as follows: Additions Retirements Depreciation Changes to Capital Assets, 2017 (in OOO's) Governmental Acti\ity $ 26,318 (11,129) (5,711) Business-Type Acti\ity $ 22,846 (18,014) (4,311) Net Additions $ 9,478 $ 521 ===== 2016 $ 1,692 1,161 9,783 1,542 60,879 15,728 $ 90,785 Total $ 49,164 (29, 143) (10,022) $ 9,999 Total 2017 2016 $ 3,524 $ 2,882 4,562 4,309 42,441 34,640 25,635 25,544 190,685 173,993 31,059 46,539 $297,906 $287,907 Additional information on the City's capital assets can be found in Note 4,D. of the notes to the basic financial statements. 14 Debt Management CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The City's general policy for general obligation bonds is to issue them for no more than 10 years for the City at Large portion, with some exceptions permitted for extraordinary projects. On special assessment bonds, the maturity may extend to 15 years. The outstanding general obligation bonds for governmental activities at December 31, 2017 totaled $55,994,305. In addition, there were temporary notes outstanding in the amount of $6,811,742, as well as a financing lease in the amount of $157,868. Business-type activities had $12,606,747 in revenue bonds outstanding, as well as $6,520,433 in general obligation bonds. Revenues generated by user fees are pledged to retire all of the bonds issued by business-type activities. In addition, a loan payable is outstanding in the amount of $8,862,810. The City engaged in the following debt transactions during 2017: • On July 21st, the City issued 2017A, $9,310,000 of improvement bonds. The proceeds were used to finance construction of the Bicentennial Center, Country Club road, and fund preliminary design costs for the Smoky Hill River Renewal. • On July 21st, the City issued $2,180,000 in temporary notes to finance construction of Downtown Streetscape, Grand Prairie Addition Phase II and the Police Training Facility. This note will be refinanced into a long term bond issue in August 2018. Additional information on the City's debt can be found in Note 4, E. of the notes to the basic financial statements. Requests for Information This financial report is intended to give the reader a general overview of the City's finances. Questions about information in this report or requests for additional information should be directed to the Director of Finance, Room 206, 300 West Ash Street, Salina, Kansas, 67401. 15 BASIC FINANCIAL STATEMENTS CITY OF SAUNA. KANSAS STATEMENT OF NET POSITION Oe<:emt>er 31, 2017 Prima!}'.: Government Total Total Governmental Business-type Acilvit1es Activities ASSETS ANO DEFERRED OUTFLOWS OF RESOURCES Current assets· cash and Investments Receivables (net of allowance for uncollec!Jbles) Accounts Taxes Interest Inventory Restricted cash end investments Prepaid expenses Total current assets Noncurrent assets: Capital assets, nondepreoable Construc!Jon In progress Land Capital assets, depreciable Less: Accumulated depreciation Total noncurrent assets Total assets Deferred outflows of resources: Pension deferred outflows of resources Deferred charge on bond issuance Total deferred outflows of resources Total assets and deferred outflows of resources Liabilities. Current bablhbes: Accounts payable Retainage payable Accrued hab11tties Accrued Interest payable Deposits payable Current portion of compensated absences Current portion of temporary notes payable Current portion of loans payable Current portion of revenue bonds payable Current portion of financing leases payable Current portion of special assessment debt payable Current portion of general obligation bonds payable Total current liabillties Noncurrent liabHilies: Accrued liabilibes Compensated absences Secunty deposrts returnable Net OPEB obhgabon Net pension liability Temporary notes payable Loans payable Revenue bonds payable Special assessment debt payable General obHgation bonds payable Landfill post-closure care liabiltbes Total noncurrent hab1llbes Total liabtllbes Deferred Inflows of resources· Unavailable revenue -property taxes Pension deferred Inflows of resources Total deferred inflows of resources Total l1ab1lrtN!s and deferred Inflows of resources NetPosibon Net investment in capital esGets Restrtcted for. Permanent funds: Expendable Debt service Unrestricted Total net position 22,490,234 30,335,879 1,791,556 1,902,943 11,708,927 16,726 16 318,107 435,252 2,001,589 38,327,139 32,674,090 28,909,568 2,149,789 24,092,859 1,541,806 269,325,527 151,065,494 115 728 000 63,451,528 206,599,954 91,305,561 244,927,093 123 979 651 5,841,010 651,365 127 336 236123 5 968 346 887 488 $ 250,895,439 $ 124,867,139 1,784,815 $ 588,035 604,811 10,681 572,832 182,225 236,626 176,114 1,499,345 344,215 2,196,742 511,n3 708,696 157,868 5,561,280 1242407 12,539,918 3 878 547 44,n2 1,298,613 298,132 4,548,909 604,845 28,966,518 3,333,610 4,615,000 12,171,090 8,291,037 11,898,051 50,433,025 5,278,026 1,981,498 102,077,927 31,684,999 114 617 845 35,563,546 11,165,043 1411,701 22on1 12,576,744 2207n $ 1271194,589 $ 35,784,323 $ 129,921,343 $ 63,315,571 501,693 1,509,863 1,512,125 (8,232,049] 24,255,120 $ 123,700,850 $ 89,082,816 The notes to the basic financial statements are an Integral part of this statement. 16 Com~nent Units Total Sahna Saline Primary Housing Airport Government Authon!l'. Autho!!!}'. $ 52,826,113 1,962,074 1,613,791 3,694,499 18,369 266,634 11,708,927 16,742 753,359 30,763 2,001,589 146,622 39,652 8,838 71,001,229 2197 480 1,889,263 31,059,357 146,719 3,010,444 25,634,665 1,454,559 9,888,105 420,391,021 8,299,346 72,676,151 179, 179,528 4 571 879 41,804,269 297,905,515 5,330,745 43n0.431 368,906,744 7,528,225 45 659 694 6,492,375 85,727 105,185 363 459 1 391470 6 855834 85 727 1496 655 s 375,762,578 7,613,952 47,156,349 2,352,850 38,686 158,295 615,492 572,832 37,118 92,466 418,851 270,898 176,114 92,027 1,843,560 3,176 2,196,742 511.n3 708,696 157,868 2,153 6 803 687 1220000 16,418,465 171 007 1743812 44.m 38,412 1,596,745 28,576 49,347 5,153,554 32,300,128 373,407 603,456 4,615,000 20,462,127 11,898,051 7,054 55,711,051 22,787,515 1,981498 133,762926 440 395 23,447,372 150, 181,391 611402 25,191,184 11,165,043 10,742 60,495 1632,478 15,329 96,486 12,797,521 26,071 156,981 $ 162,978,912 6371473 25,3481165 $ 193,236,914 5,330,745 19,753,708 501,693 14,718 3,021,988 16,023 071 1631,016 2 054,476 $ 212,783,666 $ 6,976,479 21,808,184 Governmental activities: General government Public safety Public works Public health and sanitabon Culture and recreation Planning and development Interest on Jong-term debt Total governmental activities Business-type activities: Solid Waste Disposal Water and Sewer Sanitabon Go~Course Total business-type actlVJties Total pnmary government Component units: Salina Housing Authority Salina Airport Authority Total component unrts CITY OF SAUNA, KANSAS STATEMENT OF ACTIVITIES For the Year Ended December 31, 2017 Net [Expenses] Revenue end Chanaes In Net Position Pros:ram Revenues Pnmart: Government Opera Mg Cspotal Total Total Charges for Grants and Grants and Governmental Business-type EXE!;nses Services Contributions Con!nbu!Jons Activities Activities $ 9,779,656 $ 3,470,076 $ 824,116 $ $ (5,485,464] $ 23,120,215 4,600,899 1,147,371 (17,371,945] 10,345,513 347,672 1,934,805 (8,063,036] 1,126,249 49,966 277,255 [799,028] 6,880,276 1,540,620 213,229 (5,126,427] 1,834,917 91,013 144,615 (1,599,289] 1,724,439 [1,7241439) 541811,265 101100,246 4,541,391 [40,169,628) 2,364,863 3,164,761 799,898 15,650,277 19,855,033 4,204,756 2,177,632 2,884,526 706,894 852,260 798,368 [53,892) 21,045,032 26,702,688 5,657,656 $ 75,856,297 $ 36,802,934 $ 4,541,391 $ [40,169,628) s,6571556 $ 2,661,191 $ 384,749 $ 2,124,815 $ 100,059 5,474,912 2,213,300 1,280,204 $ 8,136,103 $ 2,598,049 $ 2,124,815 $ 1,380,263 General Revenues: Property taxes levied for General purposes 9,100,808 Debt service 2,486,666 Motor vehicle tax General purposes 1,372,532 Sales tax General purposes 12,906,032 Selective purposes 8,832,312 Other taxes General purposes 6,899,586 Investment revenues 92,820 129,144 Miscellaneous 2,002,864 103,082 Transfers, net 4,308,834 [4,366,500) Subtotal general revenues 48,0021454 [4,134,274) Change In net position 7,832,826 1,523,382 Net pos1bon -beginning 115,868,024 87,559,434 Net position -ending $123,700.850 $ 891082,816 The notes to the basic financial statements are an Integral part Of this statement 17 Total Primary Government $ (5,485,464] [17 ,371,945] (8,063,036] [799,028] (5,126,427] (1,599,289] [1,7241439) [40,169,628) 799,898 4,204,756 706,894 [53,892) 5,6571656 ~4,511,972) 9,100,808 2,486,666 1,372,532 12,906,032 8,832,312 6,899,586 221,964 2,105,946 [57,666) 43,868,180 9,356,208 203,427 ,458 $ 212,783,666 $ $ Come!!nent Unrts Salina Salina Housing Airport Autho!:J!l Autho!:J!l $ [51,568] [1,981,408) [51,568) [1,981,408) 2,043,302 8,835 974 5,497 22,081 14 332 2,066,357 [37,236] 84,949 7,013,715 21,723,235 619761479 $21,808,184 CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS 43100 Tourism and Special Sales Tax General Convention Gas Capital ASSETS Cash and investments $ 5,853,666 $ 847 $ 802,597 $ 2,265,055 Restricted cash Receivables (net) Accounts 1,257,980 476,551 Taxes 8,864,737 322,888 Interest 16,726 Inventory 152,982 Due from other funds 27,854 Total assets $ 16,173,945 $ 477,398 $ 1,125,485 $ 2,265,055 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable $ 600,386 $ 263,937 $ 43,187 $ 17,775 Retainage payable 163,666 Due to other funds Total liabilities 600,386 263,937 43,187 181,441 Deferred inflows of resources Unavailable revenue -property taxes 8,691,050 Total deferred inflows of resources 8,691,050 Fund balance: Nonspendable 152,982 Restricted 213,461 1,072,347 Committed 1,658,876 Assigned 214,010 9,951 424,738 Unassigned 6,515,517 Total fund balances 6,882,509 213,461 1,082,298 2,083,614 Total liabilities, deferred inflows of resources and fund balances $ 16,173,945 $ 477,398 $ 1,125,485 $ 2,265,055 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds $ $ $ $ 3,024,578 $ 1,462,554 $ 1,483,544 $ 6,896 $ 4,540,664 $ 19,440,401 2,001,589 2,001,589 54,161 123,914 2,864 1,915,470 2,521,302 11,708,927 16,726 152,982 9,656 37,510 3,024,578 $ 3,983,856 $ 1,547,361 $ 2,132,399 $ 4,543,528 $ 35,273,605 -$ -$ 560,602 $ 58,284 $ 162,754 $ 1,706,925 91,642 349,503 604,811 9,656 27,854 37,510 652,244 417,443 190,608 2,349,246 2,473,993 11, 165,043 2,473,993 11,165,043 152,982 1,509,863 1,395,051 4,190,722 2,817,807 895,117 1,714,956 2,985,723 10,072,479 206,771 855,470 [27,854] 6,487,663 3,024,578 1,509,863 895,117 1,714,956 4,352,920 21,759,316 3,024,578 $ 3,983,856 $ 1,547,361 $ 2,132,399 $ 4,543,528 $ 35,273,605 The notes to the basic financial statements are an integral part of this statement. 18 CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION OF GOVERNMENTAL ACTIVITIES December 31, 2017 Total Governmental Fund Balances Amounts reported for governmental activities in the statement of net position are different because Bond issuance costs are shown as current year expenditures in the funds. Bond issuance costs Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds 322, 143,628 $ 21,759,316 127,336 The cost of capital assets is Accumulated depreciation is 115,567,034 206,576,594 Pension contributions are reported an expense in the funds and as a deferred outflow of resources in the governmental activities in the statement of net position. Pension fundings are reported an a revenue in the funds and as a deferred inflow of resources in the governmental activities in the statement of net position. Certain intrafund transactions have been elimniated between the City's primary funds and the QALICB blended component unit. An internal service fund is used by the City's management to charge the costs of the worker's compensation program. The assets and liabilities of the internal service fund are included with governmental activities. The following liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These liabilities at year end consist of: Compensated absences Net OPEB obligation Net pension liability Temporary notes payable Bonds payable Financing leases payable Loans payable 2,744,388 4,548,909 28,800,959 6,811,742 55,994,305 157,868 12,171,090 5,809,770 [1,400,363) [123,914) 2,363,597 Accrued interest on the bonds 182,225 (111,411,486] Net Position of Governmental Activities The notes to the basic financial statements are an integral part of this statement. 19 $ 123,700,850 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31, 2017 Tourism and Special Sales Tax General Convention Gas Capital REVENUES: Taxes Real estate taxes $ 8,943,754 $ -$ -$ Delinquent taxes 157,054 Motor vehicle taxes 1,014,976 General sales taxes 12,906,032 Selective sales taxes 8,251,546 Other taxes 5,215,264 1,684,322 Intergovernmental 1,133,310 1,435,167 Special assessments Licenses and permits Charges for services 6,153,450 Investment revenue 3,336 480 2,777 13,381 Donations Miscellaneous 1,709,491 Total revenues 37,236,667 1,684,802 1,437,944 8,264,927 EXPENDITURES: Current General government 5,423,241 Public safety 21,628,730 Public works 5,328,315 495,919 Public health and sanitation 749,656 Culture and recreation 4,424,221 Planning and development 752,825 930,916 Miscellaneous Capital outlay 896,026 831,852 5,280,012 Debt service Principal retirement Interest and other charges Total expenditures 39,203,014 930,916 1,327,771 5,280,012 Excess [deficiency] of revenue and other sources over [under] expenditures and other [uses] [1,966,347] 753,886 110,173 2,984,915 OTHER FINANCING SOURCES [USES] Issuance of bonds Issuance of temporary notes Bond premium Transfers in 4,626,500 160,000 Transfers [out] [810,000] [!:23,942] [2,568,350] Total other financing sources [uses] 3,816,500 [!:23,942] 160,000 [2,568,350] Net change in fund balance 1,850,153 29,944 270,173 416,565 Fund balance -Beginning of year 5,032,356 183,517 812,125 1,667,049 Fund balance -End of year $ 6,882,509 $ 213,461 $ 1,082,298 $ 2,083,614 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds $ -$ 2,433,770 $ -$ -$ -$ 11,377 ,524 52,896 209,950 357,556 1,372,532 12,906,032 580,766 8,832,312 6,899,586 494,337 1,473,276 4,536,090 1,538,904 1,538,904 5,300 5,300 246,458 480,385 6,880,293 12,794 17,104 1,104 28,178 79,154 110,606 110,606 63,818 77,763 1,851,072 12,794 4,400,230 558,155 247,562 2,756,274 56,599,355 5,423,241 21,628,730 223,912 6,048,146 347,442 1,097,098 1,718,877 6,143,098 31,081 86,832 1,801,654 35 35 1,049,381 4,210,392 5,262,024 751,068 18,280,755 4,907,918 180,000 5,087,918 1,490,423 139,036 50,486 90,935 1,770,880 1,049,381 6,398,341 4,349,428 5,343,591 3,399,101 67,281,555 [1,036,587] [1,998, 111) [3,791,273) [5,096,029) [642,827] [10,682,200) 1,000 9,309,000 9,310,000 2,180,000 2,180,000 16,751 78,361 95,112 2,241,309 1,310,983 8,338,792 (57,666] (4,159,958] 2,259,060 11,509,695 1,310,983 15,763,946 (1,036,587) 260,949 7,718,422 (5,096,029) 668,156 5,081,746 4,061,165 1,248,914 (6,823,305] 6,810,985 3,684,764 16,677,570 $ 3,024,578 $ 1,509,863 $ 895,117 $ 1,714,956 $ 4,352,920 $ 21,759,316 The notes to the basic financial statements are an integral part of this statement. 20 CITY OF SALINA, KANSAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2017 Total Net Change In Fund Balances -Governmental Funds Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net position and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capital outlays exceeds depreciation in the period. Gain/[Loss) on sale of assets Capital outlays Depreciation expense Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. This is the amount by which interest decreased. An internal service fund is used by the city's management to charge the costs of certain activities to the individual funds. The revenues and expenses of certain internal service fund is reported with governmental activities. Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. Some expenses reported in the statement of activities, such as compensated absences and other post employment benefits, do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities. Bond, temporary note, loan and lease proceeds are other financing sources in the governmental funds, but they increase long-term liabilities in the statement of net position and do not affect the statement of activities. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the [151,301] 15,709,428 [6,066,797] $ 5,081,746 9,491,330 46,441 285,664 (123,914] 30,943 [723,482) treatment of long-term debt and related items. [11,4 76,527] Repayment of bond principal and bond issuance costs is an expenditure in the governmental funds, but it reduces long-term liabilities in the statement of net position and does not affect the statement of activities. 5,220,625 Changes In Net Position of Governmental Activities $ 7,832,826 The notes to the basic financial statements are an integral part of this statement. 21 Revenues Truces Real estate taxes Delinquent taxes Motor vehicle taxes General sales tax Other taxes Intergovernmental Charges for services Investment revenue Miscellaneous Total revenues Expenditures General government Public safety Public works Public health and sanitation Culture and recreation Planning and development Capital outlay Total expenditures Excess (deficiency] of revenues over (under] expenditures Other financing sources (uses] Transfers in Transfers (out] Total other financing sources (uses] Excess (deficiency] of revenues and other sources over (under] expenditures and other (uses] Unreserved fund balance, January 1 Prior year cancelled encumbrances CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON· GAAP BASIS) GENERAL FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final $ 8,943,754 $ 9,075,239 $ 9,075,239 157,054 125,000 125,000 1,016,439 991,987 991,987 12,906,032 12,805,000 12,805,000 5,215,264 6,804,632 6,804,632 1,133,310 1,145,000 1,145,000 5,481,314 6,025,327 6,025,327 11,540 1,709,490 183,739 183,739 36,574,197 37,155,924 37,155,924 4,967,756 3,405,885 3,405,885 21,750,244 20,726,693 20,726,693 5,337,833 5,7g0,152 5,790,152 749,656 4,426,706 5,283,377 5,283,377 752,825 2,213,740 2,213,740 951,921 4,259,262 4,259,262 38,936,941 41,679,109 41,679,109 [2,362,744) [4,523, 185) [4,523, 185) 4,626,500 4,675,089 4,675,089 [810,000J [3,661, 132) (3,661,132) 3,816,500 1,013,957 1,013,957 1,453,756 (3,509,228) (3,509,228] 3,509,762 3,509,228 3,509,228 103,606 Unreserved fund balance, December 31 5,067,124 $ -$ - Reconciliation to GAAP Interest receivable Accounts receivable Taxes receivable Inventory Deferred revenue Current year encumbrances GAAP Fund Balance, December 31 16,726 1,257,980 8,864,737 152,982 (8,691,050] 214,010 $ 6,882,509 See independent auditor's report on the financial statements. 22 Variance with Final Budget Positive [Negative] $ (131,485] 32,054 24,452 101,032 (1,589,368] (11,690] (544,013] 11,540 1,525,751 [581,727) (1,561,871] (1,023,551] 452,319 (749,656] 856,671 1,460,915 3,307,341 2,742,168 2,160,441 (48,589] 2,851,132 2,802,543 4,962,984 534 103,606 $ 5,067,124 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) TOURISM AND CONVENTION FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Other taxes $ 1,616,808 $ 1,608,000 $ Investment revenue 480 Total revenues 1,617,288 1,608,000 Expenditures Planning and development 930,916 893,000 Total expenditures 930,916 893,000 Excess [deficiency] of revenues over [under] expenditures 686,372 715,000 Other financing sources [uses] Transfers [out] [723,942] [683,800) Total other financing sources [uses] [723,942) [683,800] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [37,570] 31,200 Unreserved fund balance, January 1 [225,520] 80,343 Unreserved fund balance, December 31 [263,090] $ 111,543 $ Reconciliation to GAAP Accounts receivable 476,551 GAAP Fund Balance, December 31 $ 213,461 See independent auditor's report on the financial statements. 23 Final 1,658,000 1,658,000 893,000 893,000 765,000 [733,800) [733,800] 31,200 368 31,568 Variance with Final Budget Positive [Negative] $ [41, 192) 480 [40,712) [37,916) [37,916) [78,628) 9,858 9,858 [68,770] [225,888) $ [294,658] CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL GAS FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Intergovernmental $ 1,435,031 $ 1,370,400 $ 1,370,400 Investment revenue 2,777 6,000 6,000 Total revenues 1,437,808 1,376,400 1,376,400 Expenditures Public works 495,919 569,915 569,915 Capital outlay 745,820 946,243 946,243 Total expenditures 1,241,739 1,516,158 1,516,158 Excess [deficiency] of revenues over [under] expenditures 196,069 [139,758) [139,758) Other financing sources [uses] Transfers in 160,000 160,000 160,000 Total other financing sources [uses] 160,000 160,000 160,000 Excess'[deficiency] of revenues and other sources over [under] 356,069 20,242 20,242 expenditures and other [uses] Unreserved fund balance, January 1 387,919 669,880 669,880 Prior year cancelled encumbrances 5,471 Unreserved fund balance, December 31 749,459 $ 690,122 $ 690,122 Reconciliation to GAAP Taxes receivable 322,888 Current year encumbrances 9,951 GAAP Fund Balance, December 31 $ 1,082,298 See independent auditor's report on the financial statements. 24 Variance with Final Budget Positive [Negative] $ 64,631 [3,223] 61,408 73,996 200,423 274,419 335,827 335,827 [281,961) 5,471 $ 59,337 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX CAPITAL FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Taxes Selective sales taxes $ 8,251,546 $ 8,043,656 $ 8,269,993 Investment revenue 13,381 5,000 5,000 Total revenues 8,264,927 8,048,656 8,274,993 Expenditures Capital outlay 5,270,351 4,620,500 6,470,500 Total expenditures 5,270,351 4,620,500 6,470,500 Excess [deficiency] of revenues over [under] expenditures 2,994,576 3,428,156 1,804,493 Other financing sources [uses] Transfers [out] [2,568,350) [3,750,000) [2,500,000) Total other financing sources [uses] [2,568,350) [3,750,000) [2,500,000) Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 426,226 [321,844] [695,507) Unreserved fund balance, January 1 1,056,648 785,304 1,797,359 Prior year cancelled encumbrances 176,002 Unreserved fund balance, December 31 1,658,876 $ 463,460 $ 1,101,852 Reconciliation to GAAP Current year encumbrances 424,738 GAAP Fund Balance, December 31 $ 2,083,614 See independent auditor's report on the financial statements. 25 Variance with Final Budget Positive [Negative] $ [18,447] 8,381 [10,066) 1,200,149 1,200, 149 1,190,083 [68,350) [68,350) 1,121,733 [740,711] 176,002 $ 557,024 CITY OF SALINA, KANSAS STATEMENT OF NET POSITION PROPRIETARY FUNDS December31, 2017 Business-Type Activities: Ente!:Erise Funds Total Internal Solid Waste Water and Enterprise Service Assets and deferred outflows of resources: Dls~I Sewer Sanitation Golf Course Funds Funds Current assets: Cash and Investments $ 6,515,002 $ 22,115,048 $1,568,556 $ 137,273 $ 30,335,879 $ 3,049,833 Receivables (net of allowance for uncollectibles) Accounts 194,086 1,490,712 218,145 1,902,943 Interest 16 16 Inventory and prepaid supplies 408,562 26,690 435,252 165,125 Total current assets 6,709,104 24,014,322 1,786,701 163,963 32,674,090 3,214,958 capital assets: Nondepreclable capital assets: Construction in progress 2,149,789 2,149,789 Land 682,000 644,806 15,000 1,541,806 Depreciable capital assets: Capital assets 11,312,996 136,213,033 2,377,725 1,161,740 151,065,494 164,326 Less: accumulated depreciation 8,798,898 52,319,351 1,551,983 781,296 63,451,528 160,966 Total capital assets 3,196,098 86,888,277 825,742 395,444 91,305,561 23,360 Total assets 9,905,202 110,902,599 2,612,443 559,407 123,979,651 3,238,318 Deferred outflows of resources: Pension deferred outflows of resources 78,469 439,410 102,050 31,436 651,365 31,240 Deferred charge on bond Issuance 236,123 236,123 Total deferred outflows of resources 78 469 675,533 102,050 31,436 887,488 31,240 Total assets and deferred outflows of resources $ 9,983,671 $ 111,578,132 $ 2,714,493 $ 590,843 $ 124,867,139 $ 3,269,558 Liabilities and deferred Inflows of resources: Current liabilities Accounts payable $ 24,885 $ 535,111 $ 18,675 $ 9,364 $ 588,035 $ 57,890 Retalnage payable 10,681 10,681 Interest payable 10,937 225,689 236,626 Meter deposits payable 176,114 176,114 Current portion of compensated absences payable 33,697 203,412 68,558 38,548 344,215 28,707 Current portion of accrued claims payable 572,832 Current portion of loans payable 571,773 571,773 Current portion of general obligation bonds payable 375,000 867,407 1,242,407 Current portion of revenue bonds payable 708,696 708,696 Total current liabilities 444,519 3,298,883 87,233 47,912 3,878,547 659,429 Noncurrent liabilities: Compensated absences payable 29,185 176,179 59,381 33,387 298,132 24,863 Accrued claims payable 44,772 Net OPEB Obligation 78,890 374,881 116,258 34,616 604,645 Net pension liability 402,327 2,202,239 557,424 171,620 3,333,610 165,559 Payable from restricted assets Loans payable 8,291,037 8,291,037 General obligation bonds payable 780,000 4,498,026 5,278,026 Revenue bonds payable 11,898,051 11,898,051 Landfill post-closure care liabilities 1,981,498 1,981,498 Total noncurrent liabilities 3,271,900 27,440,413 733,063 239,623 31,684,999 235,194 Total liabilities 3,716,419 30,739,296 820,296 287,535 35,563,546 894,623 Deferred Inflows of resources Pension deferred Inflows of resources 30040 141 970 37644 11123 220 777 11 338 Total deferred Inflows of resources 30,040 141 970 37644 11123 220 777 11,338 Total liabilities and deferred Inflows of resources $ 3,746,459 $ 30,881,266 $ 857,940 $ 298,658 $ 35,764.323 $ 905,961 Net position Net Investment In capital assets $ 2,041,098 $ 60,053,287 $ 825,742 $ 395,444 $ 63,315,571 $ 23,360 Restricted Restricted for bond retirement 1,512,125 1,512,125 Unrestricted 4,196,114 19,131,454 1,030,811 (103,259) 24,255,120 2,340,237 Total net position $ 6,237,212 $ 80,696,866 $1,856,553 $ 292,185 $ 89,082,816 $ 2,363,597 The notes to the basic financial statements are an integral part of this statement. 26 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2017 Business-Type Activities: Ente!Erise Funds Solid Waste Water and Diseosal Sewer Sanitation Golf Course Operating revenues Charges for services $3,164,761 $19,855,033 $2,884,526 $ 798,368 Miscellaneous 20,552 5,522 77,008 Total operating revenues 3,185,313 19,860,555 2,884,526 875,376 Operating expenses General government Public works 1,469,858 11,398,035 2,024,390 Recreation 820,627 Depreciation 850,548 3,322,113 153,242 31,633 Total operating expenses 2,320,406 14,720,148 2,177,632 852,260 Operating income [loss] 864,907 5,140,407 706,894 23,116 Nonoperating revenues [expenses] Investment revenue 24,658 98,307 5,793 386 Interest expense [44,457] (923,217] Gain/(loss] on disposal of fixed assets Accretion of bond premium 11,560 Amortization of bond issuance costs [18,472) Total nonoperating revenues (expenses] [19,799) [831,822) 5,793 386 Income [loss] before transfers 845,108 4,308,585 712,687 23,502 Transfers from [to] other funds Transfers in Transfers [out] [540,000) [3,450,000J [376,500) Total transfers [540,000J [3,450,000J [376,500) Change In net position 305, 108 858,585 336, 187 23,502 Net position, January 1 5,932,104 79,838,281 1,520,366 268,683 Net position, December 31 $6,237,212 $ 80,696,866 $1,856,553 $ 292,185 The notes to the basic financial statements are an integral part of this statement. 27 Total Internal Enterprise Service Funds Funds $ 26, 702,688 $8,323,935 103,082 41, 186 26,805,770 8,365,121 8,209,819 14,892,283 820,627 4,357,536 9,260 20,070,446 8,219,079 6,735,324 146,042 129,144 13,666 (967,674] [4,044] 11,560 [18,472) [845,442) 9,622 5,889,882 155,664 130,000 [4,366,500) [4,366,500) 130,000 1,523,382 285,664 87,559,434 2,077,933 $ 89,082,816 $2,363,597 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2017 Business-Type Activities: Entererise Funds Solid Waste Water and Dis~sal Sewer Sanitation Golf Course Cash flows from operating activities Cash received from customers and users $3,160,158 $19,691,753 $2,856,083 $ 798,368 Cash paid to suppliers of goods or services (828,507] (7,171,517] [1, 101,055] (400,392] Cash paid to employees (607,960] (3,976,523] [791,564] (423,329] Other operating receipts 20,552 5,522 77,008 Net cash provided by (used in] operating activities 1,744,243 8,549,235 963,464 51,655 Cash flows from capital and related financing activities Purchase and construction of capital assets (4,719, 132] (84,953] [27,642] Proceeds from sale of capital assets (47,023] Proceeds from loans 2,116,375 Principal payments -loans (685,589] Principal payments -general obligation bonds [365,000] (747,082] Principal payments -revenue bonds (675,000] Interest paid [45,118) [960,485} Net cash provided by (used in] capital and related financing activities [410,118) [5,717,936} [84,953) [27,642] Cash flows from investing activities Interest received 24,658 98,307 5,793 386 Cash flows from noncapital financing activities Transfers in Transfers (out] [540,000J [3,450,000J [376,500) Net cash provided by (used in] noncapital financing activities [540,000J [3,450,000J [376,500) Net Increase [decrease] in cash and cash equivalents 818,783 (520,394] 507,804 24,399 Cash and cash equivalents, January 1 5,696,219 22,635,442 1,060,752 112,874 Cash and cash equivalents, December 31 $6,515,002 $ 22.115,048 $1,568,556 $ 137,273 The notes to the basic financial statements are an integral part of this statement. 28 Total Internal Enterprise Service Funds Funds $ 26,506,362 $8,392,053 (9,501,471] [7,875,819] (5,799,376] (275,772] 103,082 41185 11,308,597 281,647 (4,831,727] (47,023] 2,116,375 (685,589] [1, 112,082] (675,000] [1,005,603) [6,240,649) 129,144 13,666 130,000 [4,366,500) [4,366,500) 130,000 830,592 425,313 29,505,287 2,624,520 $ 30,335,879 $3,049,833 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31, 2017 Business-Type Activities: Enterprise Funds Total Internal Solid Waste Water and Enterprise Disposal Sewer Sanitation Golf Course Funds Reconciliation of operating (loss) Income to net cash provided by [used in] operating activities Operating Income (loss] $ 864,907 $ 5,140,407 $706,894 $ 23,116 $ 6,735,324 Adjustments to reconcile operating income (loss] to net cash provided by (used in] operating activities Depreciation expense 850,548 3,322,113 153,242 31,633 4,357,536 (Increase] decrease in accounts receivable (4,603] (160,456) (28,443] (193,502) (Increase] decrease In inventory 71,210 (3,706] 67,504 (Increase] decrease In deferred outflows (5,914) (19,295] (2,089] (287) (27,585] Increase [decrease] in accounts payable 1,701 433,569 4,827 6,743 446,840 Increase [decrease) In retainage payable (282,912] (282,912] Increase [decrease] in accrued compensated absences (16,221] (27,819) 11,794 4,467 [27,779) Increase [decrease] In claims payable Increase (decrease) In landfill postclosure liabilities 63,649 63,649 Increase (decrease] In net pension liability (1, 191] (3,883] (421] (58] (5,553] Increase [decrease] in net OBEB obligation (12,601] 66,180 116,258 (10,445] 159,392 Increase [decrease] in meter deposits payable (2,824] (2,824] Increase (decrease] in deferred inflows 3,968 12,945 1 402 192 18,507 Net cash provided by (used in] operating activities $ 1,744,243 $ 8,549,235 $963,464 $ 51,655 $ 11,308,597 The notes to the basic financial statements are an Integral part of this statement. 29 Service Funds $ 146,042 9,260 24,761 (1,162] 20,018 14,065 68,117 (234] 780 $ 281,647 ASSETS CITY OF SALINA, KANSAS STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS December 31, 2017 Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable Total liabilities The notes to the basic financial statements are an integral part of this statement. 30 $ 389,555 $ 389,555 $ 389,555 $ 389,555 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Salina, Kansas (the City) is a municipal corporation governed by a mayor as part of a five- member commission. These financial statements present the City and its component units, entities for which the government is considered to be financially accountable. Each discretely presented component unit is reported in a separate column in the government wide statements (see note below for descriptions) to emphasize that it is legally separated from the government. The blended component unit is reported as a governmental fund of the City (see note below for description) to emphasize that it is a part of the city. Discretely Presented Component Units City of Salina Airport Authority -The Salina Airport Authority was created for the purpose of accepting as surplus property portions of the former Schilling A.F.B that was closed by the United States Department of Defense in June 1965. One of the primary functions of the Airport Authority is to facilitate the continued growth of jobs and payroll at the Airport Industrial Center. The Airport Authority is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. Any director may be removed by a majority vote of the Salina City Commission. The Airport Authority's basic mill levy (up to 3 mills) requires the approval of the City Commission. The Commission must also approve the issuance of general obligation debt by the Airport Authority. The Airport Authority has a December 31 fiscal year end. Housing Authority of the City of Salina -The purpose of the Housing Authority of the City of Salina (Housing Authority) is to administer Public Housing Programs authorized by the United States Housing Act of 1937. The Mayor of the City of Salina appoints the governing board. The City Commission may remove commissioners of the Housing Authority. The City must issue revenue bonds for the Housing Authority. The financial liability of the Housing Authority is essentially supported by the operating and debt service subsidies received under contract from the Federal government. The Housing Authority has a June 30 fiscal year end. Information in the accompanying financial statements covers the fiscal year ended June 30, 2017. Blended Component Unit Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) -SFH QalicB was created to function as a qualified low-income community business, as defined in Section 45D(d)(2) of the Internal Revenue Code of 1986 for the purpose of providing an indoor sports facility in the downtown corridor of the city of Salina. The purpose of the facility is to cater to local residents as well as host regional sports tournaments with the anticipation of becoming a regional destination for youth athletics. This mix of participation is expected to provide the most consistent visitation and tourism for the downtown district. The SFH QalicB is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. The field house is staffed by City of Salina employees. SFH QalicB has a December 31 fiscal year end. SFH QalicB is a not-for-profit organization exempt from income tax under Section 501(c)(3) of the Internal Revenue Code and is exempt from similar state and local taxes. Complete financial statements for each of the individual component units may be obtained at the entity's administrative offices. Salina Airport Authority 3237 Arnold Ave. Salina, KS Joint Ventures Housing Authority of the City of Salina 469S. 5th Salina, KS Salina Field House QALICB, Inc. 300 W. Ast St. Salina, KS The City of Salina also participates with Saline County in one joint venture. The City and County organized the Salina County-City Building Authority to acquire, operate and maintain facilities for the administrative offices of both governments. The primary governments each have an ongoing financial responsibility for the joint venture. Separate financial statements are available from the governing board of the joint venture. 31 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A. Reporting Entity (Continued) Joint Ventures (Continued) Total unencumbered cash, December 31, 2017 Total change in unencumbered cash, year ended December 31, 2017 Total cash receipts, year ended December 31, 2017 Total cash receipts from City of Salina (Kansas Regulatory Basis) Building Authority (Audited) $ 1,173,041 22,690 1,431, 170 440,883 Complete financial statements for the joint venture may be obtained at the entity's administrative office. Salina County-City Building Authority 300 West Ash Street Salina, KS B. Government-wide and fund financial statements The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges between the City's governmental and business-type activities. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational requirements of a particular program. Taxes and other items, which are not classified as program revenues, are presented as general revenues of the city. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major Individual funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to certain compensated absences and claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources. Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net position. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund's ongoing operations. The principal operating revenues of the City's proprietary funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenues and expenses. The internal service funds account for risk management, worker's compensation, health insurance, central garage and information services that are provided to other departments or agencies of the government, or to other governments, on a cost-reimbursement basis. Agency funds are custodial in nature and do not measure results of operations or have a measurement focus. Agency funds do however use the accrual basis of accounting. Agency funds are used to account for assets held as an agent for individuals, other governmental units, private organizations and/or other funds. The City reports the following major governmental funds: General fund -To account for resources traditionally associated with government, which are not required legally, or by sound financial management to be acoounted for in another fund. Tourism and convention fund -To account for transient guest tax revenues, which are specifically restricted to promotion and tourism activities. Special gas fund -To account for the City's share of motor fuel tax revenues, which are legally restricted to the maintenance, or improvement of streets within the City. Sales tax capital fund -To account for 93% of the .40 cent sales tax designated for capital, debt, and human services purposes. Schilling capital improvement fund -To account for the funding provided by U.S. Government and Public Entities and the remedial investigation, feasibility study and expenditures necessary to abate groundwater contamination beneath the property formerly identified as Schilling Air Force Base. 33 CllY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Debt service fund -To account for the accumulation of resources and payment of general obligation bond principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. Capital projects fund -To account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. SFH QalicB fund -To account for the activities of Salina Field House Qualified Active Low-Income Community Business, Inc. as a component unit blended into the financial statements. The City reports the following major proprietary funds: Sanitation fund -To account for the operations of the City's refuse collection service. Solid waste disposal fund -To account for the activities of the City's landfill. Golf course fund -To account for the operations of the municipal golf course. Water and sewer fund -To account for the activities of the City's water and sewer operations. D. Assets, Liabilities, Fund Balance, and Net Position 1. Pooled cash and investments The City maintains a cash and investment pool that is available for use by all funds managed by the city. Each fund type's portion of this pool is displayed in the financial statements as "Cash and Investments." The city's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments in the Kansas Municipal Pool are carried at fair value. Cash balances from all funds are invested to the extent available in certificates of deposit and other authorized investments. Investments with maturity dates greater than three months are stated separately. Earnings from these investments, unless specifically designated, are allocated monthly to the investing fund based on the percentage of funds invested to total investments. All investments are carried at fair value. 2. Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the year are referred to as either "interfund receivables/payables" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Accounts Receivable. The City records revenues when services are provided. All receivables are shown net of an allowance for doubtful accounts. Property taxes receivable. Collection of current year property tax by the County Treasurer is not completed, apportioned or distributed to the various subdivisions until the succeeding year, such procedure being in conformity with governing state statutes. Consequently, current year property taxes receivable are not available as a resource that can be used to finance the current year operations of the City and, therefore, are not susceptible to accrual. Accruals of uncollected current year property taxes are offset by deferred revenue and are identical to the adopted budget for 2018. It is not practicable to apportion delinquent taxes held by the County Treasurer at the end of the accounting period, and further, the amounts thereof are not material in relationship to the financial statements taken as a whole. 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued} D. Assets, Liabilities and Equity (Continued} 2. Receivables and Payables (Continued) The determination of assessed valuations and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The County Appraiser annually determines assessed valuations on January 1 and the County Clerk spreads the annual assessment on the tax rolls. The County Treasurer is the tax collection agent for all taxing entities within the County. In accordance with state statutes, property taxes levied during the current year are a revenue source to be used to finance the budget of the ensuing year. Property taxes are levied and liens against property are placed on November 1 of the year prior to the fiscal year for which they are budgeted. Payments are due November 1, becoming delinquent, with penalty, December 21. Payments of 50% are accepted through December 20, with the second 50% then being due on or before May 10 of the following year. This procedure eliminates the need to issue tax anticipation notes since funds will be on hand prior to the beginning of each fiscal year. The City Treasurer draws down all available funds from the County Treasurer's office in two-month intervals. Taxes remaining due and unpaid at February 15 and July 1 are subject to collection procedures prescribed in state statutes. 3. Inventories and Prepaid Items Inventories are valued at cost using the first-in/first-out (FIFO} method. The costs of governmental fund-type inventories are recorded as expenditures when consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. 4. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets, -are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Capital assets used in governmental fund types of the City are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type is included in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Property, plant and equipment of the primary government, are depreciated using the straight-line method over the following estimated useful lives: Assets Buildings Other equipment Vehicles Infrastructure 35 Years 50 5-15 6-10 30-50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 5. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All employees of the City, except temporary and part time employees, may accumulate sick leave at a rate of 8 or 11 hours per month depending on their work duty schedule. There is no limit on the amount of sick leave that can be accumulated. Employees with more than five years of service with the City are paid for one-third of their accumulated sick leave at their current wage scale upon termination of employment in good standing. In 2001, a limited buy back policy was instituted. All regular employees are entitled to paid vacation time. Such leave is granted each year of employment. Employees must use 50% of leave accrued each calendar year and an employee's maximum accrued vacation leave balance cannot exceed 250 hours (or 350 hours for employees working 24 hour shifts). Employees are paid for all accumulated vacation leave at their current wage scale upon termination of employment. Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability in the government fund financial statements that will pay it. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave of the business-type funds and government wide financial statements are recorded as an expense and liability of those funds as the benefits accrue to employees. A liability is recorded for accumulated rights to receive sick pay benefits that are payable upon termination of employment. The General Fund, Bicentennial Center Fund, Central Garage Fund, Sanitation Fund, Solid Waste Fund, Golf Course Fund, and Water and Sewer Fund have been used in prior years to liquidate the liability for compensated absences. 6. Temporarv Notes Upon authorization for the issuance of general obligation bonds for certain improvements, Kansas law permits the temporary financing of such improvements by the issuance of temporary notes. Temporary notes issued may not exceed the aggregate amount of bonds authorized, are interest bearing and have a maturity date not later than four years from the date of issuance of such temporary notes. Temporary notes outstanding are retired from the proceeds of the sale of general obligation bonds. 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 36 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 8. Fund Balances In the fund financial statements, governmental funds report fund balance in the following classifications: nonspendable, restricted, committed, assigned and unassigned. Nonspendable fund balance includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Restricted fund balance indicates that constraints have been placed on the use of resources either by being externally imposed by creditors, granters, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. Committed fund balances include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the city commission. Assigned fund balances include amounts that are constrained by the City management's intent to be used for specific purposes, but are neither restricted nor committed. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available restricted amounts are considered to be spent first. When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund balance is available, the following is the order in which resources will be expended: committed, assigned and unassigned. The following is the detail for fund balance classifications in the financial statements: Fund Balances: Nonspendable for. Inventory Restricted for. Public worl<s Public health and sanitation Culture and recreation Planning and development Debt payments Committed for. Public safety CUiture and recreation Planning and developmenl Cemetery Capital Improvements Assigned for. General govammant Publlc .. rety Public works CultlJre and recreation Capital Improvements Unassigned: Total Fund Balances Tounsm and Special ~ ~ SZil $ 152,982 $ 28,477 121,515 61,533 2,485 1,072,347 213,461 Major Governmental Funds Schllllng Sales Tax Capital Debt ~ Improvement ~ • $ • $ • $ 1,509,863 1,658,876 2,817,807 9,951 424,738 206,771 Capita! ~ • $ SFH Qalicil Other Total Governmental Governmental • $ • $ 152,982 1,072,347 164 164 124,221 124,221 232, 778 446,239 1,037,888 2,547,751 375,147 375, 147 690,067 690,067 1,714,956 18,589 1,733,545 495,895 495,895 895,117 1,406,025 6,777,825 28.477 121,515 61,533 2,485 641,460 6,515,517 ~~-~~-· ~~-· ~~-· ~~-· ~~~ ~~-[27,854) 6,487,663 $ 6,882,509 $ 213A61 $ 1.082.298 $ 2,083,614 S 3,024,578 $1,509,863 S 895,117 $1,714,956 $ 4,352,920 $ 21,759,316 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 9. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City reports a deferred charge on bond issuance reported in the government-wide statement of net position. A deferred charge on bond issuance results from the difference in the carrying value of the debt and its reacquisition price. This amount is deferred and amortized over the life of the debt. Additionally, the City reports changes in the pension liability proportion and contributions made to the pension plan after the measurement date of the net pension liability as deferred outflows of resources in the government activities. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Unavailable revenue -property taxes, is reported in the governmental funds balance sheet and the governmental activities in the government-wide statement of net position. Additionally, the City reports differences between expected and actual experience, differences between projected and actual investment earnings, changes in assumptions, and changes in the pension liability proportion as deferred inflows for governmental activities. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 10. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 11. Net Position Net position represents the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, granters or laws or regulations of other governments. Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information Kansas statutes require that an annual operating budget be legally adopted for the general fund, special revenue funds (unless specifically exempted by statute), debt service fund, and enterprise funds. The statutes provide for the following sequence and timetable in the adoption of the legal annual operating budget: 1. Preparation of the budget for the succeeding year on or before August 1. 2. Publication in local newspaper of the proposed budget and notice of public hearing on the budget on or before August 5. 3. Public hearing on or before August 15, but at least ten days after publication of notice of hearing. 4. Adoption of the final budget on or before August 25. 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) A. Budgetary Information (Continued) The statutes allow the governing body to increase the originally adopted budget for previously unbudgeted increases in revenue other than ad valorem property taxes. To do this, a notice of public hearing to amend the budget must be published in the local newspaper. At least ten days after publication the hearing may be held and the governing body may amend the budget at that time. The 2017 budget was amended for the Tourism and Convention Fund and the Sales Tax Capital Fund. The statutes permit management to transfer budgeted amounts between line items within an individual fund. However, such statutes prohibit expenditures in excess of the total amount of the adopted budget of expenditures of individual funds. Budget comparison statements are presented for each fund showing actual receipts and expenditures compared to legally budgeted receipts and expenditures. All legal annual operating budgets are prepared using the statutory basis of accounting, in which, revenues are recognized when cash is received, and expenditures include disbursements, accounts payable, and encumbrances. Encumbrances are commitments by the municipality for future payments and are supported by a document evidencing the commitment, such as a purchase order or contract. All unencumbered appropriations (legal budget expenditure authority) lapse at year end. A legal operating budget is not required for capital projects funds, the SFH QalicB fund, non-major debt service funds, trust funds, and the following special revenue funds: Community Development Revolving, Downtown TIF District #1, South 9th CID, State Grants, 911 Communications, Kenwood Cove Capital, Special Law Enforcement, Police Grants, Federal Grants, DARE Donations, War Memorial Maintenance, Federal CARE Grant, Police Department Federal Forfeiture, Homeowners' Assistance, Private Grants and Animal Shelter Donations Funds. A legal operating budget is not required for the following Enterprise funds: Solid Waste Disposal, Water and Sewer, Sanitation and Golf Course Funds. A legal operating budget is also not required for the Internal Service funds. Actual to budget comparisons for these funds that present budgets to the Commissioners are shown strictly for informational purposes. Spending in funds, which are not subject to the legal annual operating budget requirements are controlled by federal regulations, other statutes, or by the use of internal spending limits established by the governing body. B. Statutory Violations Actual exceeded budgeted expenditures at December 31, 2017 in the Tourism and Convention Fund which violates KSA 79-2935. C. Legal Debt Margin The City is subject to the municipal finance law of the state of Kansas which limits the bonded debt (exclusive of revenue bonds and special assessment bonds) the city may have outstanding to 30 percent of the assessed value of all tangible taxable property within the city, as certified to the county clerlc on the proceeding August 25. At December 31, 2017, the statutory limit for the City was $142,000,537, providing a debt margin of $80,704,353. 39 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 3. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments The City's cash is considered to be active funds by management and is invested according to KSA 9-1401. The statute requires that banks eligible to hold active funds have a main or branch bank in the county in which the City is located or in a county adjacent to the City and the banks provide an acceptable rate for active funds. Various City investments are considered to be idle funds by management and are invested according to KSA 12-1675. The statute requires that the City invest its idle funds in only temporary notes of the City, bank certificates of deposit, repurchase agreements, and if eligible banks do not offer an acceptable rate for the funds: U.S. Treasury bills or notes or the Municipal Investment Pool (KMIP). Maturities of the above investments may not exceed two years by statute. Some of the City's investments are of bond proceeds invested pursuant to KSA 10-131. This statute allows additional investment authority beyond that of KSA 12-1675. Investments of bond proceeds may follow KSA 12-1675 or include other investments such as the KMIP, direct obligations of the U.S. government or any agency thereof, investment agreements with a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody's investors service or Standard and Poor's corporation, and various other investments as specified in KSA 10-131. At December 31, 2017, the City has the following investments: Investment Type Fair Value Kansas Municipal Investment Pool $ 305,523 S&P AAAf/S1+ Total fair value $ 305,523 The municipal investment pool is under the oversight of the Pooled Money Investment Board. The board is comprised of the State Treasurer and four additional members appointed by the State Governor. The board reports annually to the Kansas legislature. State pooled monies may be invested in direct obligations of, or obligations that are insured as to principal and interest by the U.S. government or any agency thereof, with maturities up to four years. No more than 10 percent of those funds may be invested in mortgage-backed securities. In addition, the State pool may invest in repurchase agreements with Kansas banks or with primary government securities dealers. 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) A. Deposits and Investments (Continued) The City's investment policy provides direction on concentration risk. The City policy states that funds shall be diversified to reduce the extent of losses due to having an unbalanced portfolio in terms of maturities, instrument type, and issuers. Therefore, portfolio maturities shall be staggered to avoid undue concentration of assets in a specific maturity sector. Liquidity, free of market risk, shall be assured through practices insuring that the next disbursement date and payroll date are covered through maturing investments, marketable U.S. Treasury Bills, the Municipal Investment Pool, or money market accounts. Default risk shall be minimized by requiring that all security purchases occur on a delivery vs. payment basis, and that all securities are adequately collateralized. Risk of market price volatility shall be controlled through the adoption of a "buy and hold" strategy whereby the City holds each investment to maturity, coupled with maintenance of an adequate liquidity position to insure the ability to meet normal anticipated cash flow needs. When advantageous, it is allowable to sell investments to realize a gain due to price fluctuations; however, such transactions shall not be a part of the normal course of business. The City recognizes that investment risks can result from issuer defaults, market price changes or various technical complications leading to temporary illiquidity. Portfolio diversification is employed as a way to control risk due to issuer default. In the event of a default by a specific issuer, the Director of Finance and Administration shall review, and, if appropriate, proceed to liquidate securities having comparable credit risks. Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned to it. The City's deposit policy for custodial credit risk require that the depository banks will maintain 100% security in the form of FDIC coverage and pledged collateral according to KSA 9-1402. As of December 31 2017, the City's deposits were considered fully secured. Restricted cash is comprised of a construction account, an interest reserve account (the "Interest Reserve"), and an expense reserve account (the "Operating Reserve") related to the SFH QalicB blended component unit. The Interest Reserve and the Operating Reserve accounts are available as part of the loans payable financing (see Note 4E). As of December 31, 2017, the balance of the construction account, Interest Reserve, and Operating Reserve was $1,439,071, $437,246, and $125,272, respectively. 41 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) 8. Receivables Receivables as of year-end, including the applicable allowances for doubtful accounts, are as follows: Primary Government Receivables: Accounts Taxes Interest Gross receivables Less: allowance for uncollectibles Total Primary Government Receivables: Accounts Taxes Interest Gross receivables Less: allowance for uncollectibles Total Component Units Salina Airport Authority Accounts Less: allowance for uncollectibles Total Salina Airport Authority Salina Housing Authority Accounts Less: allowance for uncollectibles Interest Total Salina Housing Authority Total General $ 6,066,477 8,864,737 16726 14,947,940 [4,808,49ZJ $ 10,139,443 C. lnterfund Receivables and Payables Tourism and Convention $ 476,551 ---476,551 $ 476,551 Special Debt Capita I SFH Gas Service Projects QalicB $ $ $ 54,161 123,914 322,888 2,521,302 322,888 2,521,302 54,161 123,914 s 322,888 s 2,521,302 s 54,161 s 123,914 Solid Water Waste and Disposal Sewer $ 194,086 $ 2,790,241 16 194,102 2,790,241 [1,299,529] 194102 s 1,490 712 The composition of interfund balances as of December 31, 2017, is as follows: Fund Types Due From Due To General Fund Capital Project Fund SFH QalicB Fund Police Grants Fund $ 27,854 $ 9,656 $ 37,510 $ 9,656 27,854 37,510 Other Governmental Subtotal $ 16,034 $ 6,737,137 11,708,927 16726 16,034 18,462,790 [13,170] [4,821,66ZJ s 2,864 s 13 641,123 Sanitation Total $ 408,313 $ 10,129,777 11,708,927 16742 408,313 21,855,446 [190,168] [6,311,364] s 218145 s 15 544 082 $ 268,134 [1500] 266 634 18,934 (1,000] 435 18369 I 285,003 The City uses interfund receivables and payables between the General Fund and Other Governmental Funds as needed when pooled cash is negative within a fund until investments mature or grant proceeds are received. All payables are cleared in less than one year. 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets Capital asset activity for the year ended December 31, 2017, was as follows: Balance Adj.Bal. Balance 12l3l/2Q16 Adjustments 12/31/2012 Additions Belirements 1213112017 City governmental activities: Governmental activities: Capital assets, not being depreciated Construction in progress $ 30,810,942 $ • $ 30,810,942 $ 8,706,902 $ 10,608,276 $ 28,909,568 Land 24,001,859 24,001,859 91,000 24,092,859 Capital assets, being depreciated Infrastructure 193,545,859 193,545,859 5,769,479 199,315,338 Buildings and improvements 43,599,404 43,599,404 9,417,305 7,030 53,009,679 Vehicles 9,551,939 9,551,939 1,276,732 442,172 10,386,499 Equipment, furniture and fix1ures 5,628,958 5,628,958 1,056,286 71,233 6,614,011 Total capital assets 307, 138,961 307,138,961 26,317,704 11,128,711 322,327,954 Less accumulated depreciation for: Infrastructure 80,432,297 80,432,297 3,925,147 84,357,444 'Buildings and improvements 18,742,249 18,742,249 1,191,358 3,156 19,930,451 Vehicles 6,403,701 6,403,701 763,511 300,936 6,866,276 Equipment, furniture and fixtures 4,438,786 4,438,786 196041 60,998 4,573,829 Total accumulated depreciation 110,017,033 110,017,033 6,o76,057 365,090 115,728,000 Governmental activities capital assets, net $ 197,121,928 $ • $ 197,121,928 $ 20,241,647 $ 10,763,621 $ 206,599,954 Business-type activities: Capital assets, not being depreciated Construction in progress $ 15,727,780 $ • $ 15,727,780 $ 4,389,421 $ 17,967,412 $ 2,149,789 Land 1,541,806 1,541,806 1,541,806 Capital assets, being depreciated Infrastructure 101,119,995 101,119,995 18,337,654 119,457,649 Buildings and improvements 22,579,933 22,579,933 22,579,933 Vehicles 3,652,923 3,652,923 84,953 47,024 3,690,852 Equipment, furniture and fix1ures 5,302,926 5,302,926 34134 5,337,060 Total capital assets 149,925,363 149,925,363 22,846,162 18,014,436 154,757,089 Less accumulated depreciation for: Infrastructure 40,241,102 40,241,102 3,488,860 43,729,962 Buildings and improvements 12,796,638 12,796,638 421,287 13,217,925 Vehicles 2,492,221 2,492,221 205,045 47,024 2,650,242 Equipment, furniture and fixtures 3,611,055 3,611,055 242,344 3,853,399 Total accumulated depreciation 59,141,016 59,141,016 4,357,536 47 024 63,451,528 Business-type activities capital assets, net $ 90,784,347 $ • $ 90,784,347 $ 18.488,626 $ 17,967,412 $ 91,305,561 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets (Continued) E. The City's depreciation expense was charged to governmental functions as follows: Long-Term Debt Governmental Activities: General government $ Public safety Public works Public health 75,433 721,766 4,280,905 30,270 Culture and recreation 811,875 Planning and development 155,808 Total depreciation _$ __ 6;;.:·~07;..;6;.:.;,0;.;;;5.;..7 Business-type Activities: Solid Waste Disposal $ 850,548 Water and Sewer 3,322, 113 Sanitation 153,242 Golf Course Division 31,633 Total depreciation _$ __ 4.;.i.·~35;;..;.7..i.;,5;.;;;3..;.6 Following is a summary of changes in long-term debt for fiscal year 2017: Restated Balance Balance January 1, December 31, 2ll..1Z ~ ~ 2ll..1Z Governmental activities: General obligation bonds $ 51,816,400 $ 9,388,370 $ 5,210,465 $ 55,994,305 Financing lease 321,174 163,306 157,868 Loans payable 12,157,127 13,963 12,171,090 Accrued compensation 2,803,847 1,493,457 1,499,346 2,797,958 Temporary notes 11,505,000 2,196,742 6,890,000 6,811,742 Total $ 78,603,548 $ 13,092,532 $ 13,763,117 $ 77,932,963 Business-type activities: General obligation bonds $ 7,640,380 $ -$ 1,119,947 $ 6,520,433 Revenue bonds 13,285,443 678,696 12,606,747 Loans payable 7,432,024 2,116,375 685,589 8,862,810 Accrued compensation 670,126 316 436 344,215 642,347 Total ~ 29 027,973 ~ 2,432,811 s 2 828,447 s 28 632,337 Component Units: General obligation bonds $ 22,632,000 $ 2,520,000 $ 1,065,000 $ 24,087,000 Less unamortized discount (204,733) (53,956) (179,204) [79,485) Special assessment debt 11,268 2 061 9 207 Total component units $ 221438,535 $ 2,466,044 $ 887,857 $ 24,016,722 44 Amounts Due Within QruLl'.w $ 5,561,280 157,868 1,499,345 2,196,742 $ 9,415,235 $ 1,242,407 708,696 571,773 344,215 s 2,867,091 $ 1,220,000 2,153 $ 1,222,153 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following is a detailed listing of the city's long-tenn debt including general obligation bonds, revenue bonds, temporary notes and loans payable: Primary Government General Obligation Bonds Internal Improvements 2008B, due 7/1/2028 Internal Improvements 2009A, due 10/1/2029 Internal Improvements 2010A, due 10/1/2025 Internal Improvements 2010B, due 10/1/2023 Internal Improvements 2011A, due 10/1/2031 Internal Improvements 2012A, due 10/1/2027 Refunding 20128, due 10/1/2020 Internal Improvements 2013A, due 10/1/28 Internal Improvements 2013B, due 10/1/33 Internal Improvements 2014A, due 10/1/34 Improvement and Refunding 2015A, due 10/1/35 Internal Improvements 2016A, due 10/1/36 Refunding 20168, due 10/1/2031 lntel"{"lal Improvements 2017A, due 1011/37 Total general obligation bonds Revenue Bonds Revenue 2011, due 10/1/31 Total revenue bonds Temporary Notes Series 2016-2, due 9/1/2019 Series 2017-1, due 8/1/2018 Total temporary notes Loans Payable Kansas Public Water Supply, due 8/1/2034 Kansas Public Water Supply, due 8/1/2035 Dakotas & CNMC Notes, due 12/10/2050 Total loans payable Financing Lease, due 2/10/2017 Equipment, due 5/8/18 Software, due 10/10/18 45 Original Interest Bonds Issue Rates Outstanding $ 3,525,000 3.65% to 5.00% $ 1,845,000 23,695,000 2.00% to 5.00% 5,220,404 6,916,592 2.00% to 3.875% 968,318 7,973,044 0.50% to 3.00% 2,297, 173 6,587,985 2.00% to 5.00% 1,444,598 2,383,903 1.00% to 2.45% 1,662,602 3,817,108 1.00% to 1.40% 902,040 1,369,380 3.00% to 4.00% 1,086,880 4,485,073 0.60% to 3.65% 3,539,058 7,839,050 2.50% to 3.75% 6,088,693 7,157,688 2.00% to 4.00% 6,494,420 6,681,766 2.00% to 3.00% 6,436,178 15,141,004 2.00% to 5.00% 15,141,004 9,388,370 3.00% to 3.375% 913881370 $ 62,514,738 $ 16,193,925 2.00% to 4.60% $ 12,606,747 $ 12,606z747 $ 4,615,000 2,180,000 $ 9,330,000 4,250,000 12,640,000 $ 146,235 456,370 1.00% 2.00% 2.12% 2.78% 1.58% 3.28% 3.19% $ 4,615,000 2,196,742 $ 61811z742 $ 4,833,476 4,029,334 12,171,090 $ 21,0331900 $ 38,347 119,521 $ 1571868 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Component Unit Salina Airport Authority General Obligation Bonds General Obligation 2009B, due 2021 General Obligation 2011A, due 2023 General Obligation 2015A, due 2025 Temporary Note 2016-1, due 2019 Temporary Note 2017-1, due 2019 General Obligation 2017A, due 2030 General Obligation 2017B, due 2025 Less unamortized bond premium Less unamortized bond discount Total general obligation bonds Special Assessment Debt Hangar 600 Sanitary Sewer, due 2021 Total special assessment debt Total Original Issue $ 6,080,000 11,820,000 3,075,000 657,000 1,440,000 10,255,000 4,835,000 27,599 Interest Rates 4.78 3.89% 2.67% 0.90% 1.43% 3.04% 3.02% 4.47% Bonds Outstanding $ 1,545,000 3,160,000 2, 195,000 657,000 1,440,000 10,255,000 4,835,000 33,023 [112,508) 24,007,515 9,207 9,207 $ 24,016,722 Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies: General Obligation -Primary Government Bonds Interest Year Outstanding Due Total 2018 $ 6,803,687 $ 1,899,204 $ 8,702,891 2019 6,923,687 1,627,845 8,551,532 2020 4,778,686 1,431,514 6,210,200 2021 4,498,434 1,298,645 5,797,079 2022 4,577,283 1,150,154 5,727,437 2023-2027 18,891,638 18,891,638 37,783,276 2028-2032 10,234,792 1,648,156 11,882,948 2033-2037 5,8061531 453,346 6,259,877 Total $ 62,514z738 $ 28,400,502 $ 90,915,240 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Year 2018 $ 2019 2020 2021 2022 2023-2027 2028-2031 Total $ General Obligation -Component Units Bonds Outstanding 1,220,000 $ 1,310,000 1,350,000 1,400,000 1,455,000 7,970,000 712851000 2119901000 $ Interest Due 746,880 652,277 612,110 565,880 511,135 1,852,938 575i795 515171015 Total $ 1,966,880 1,962,277 1,962,110 1,965,880 1,966,135 9,822,938 71860,795 $ 271507iD15 Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues: Revenue Bonds -Prima~ Government Bonds Interest Year Outstanding Due Total 2018 $ 708,696 $ 509,141 $ 1,217,837 2019 728,696 487,991 1,216,687 2020 748,696 466,242 1,214,938 2021 773,696 798,696 1,572,392 2022 798,696 414,148 1,212,844 2023-2027 4,498,480 1,563,177 6,061,657 2028-2031 41349z787 504,816 418541603 Total $ 12,606,747 $ 4,744,211 $ 171350,958 Annual debt service requirements to maturity for temporary notes -to be paid through the issuance of general obligation bonds: Temporary Notes -Primary Gm.ernment Notes Interest Year Outstanding Due Total 2018 $ 2,196,742 $ 90,234 $ 2,286,976 2019 4,615,000 46,150 4,661,150 Total $ 6,811,742 $ 136,384 $ 6,948,126 47 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Annual debt service requirements to maturity for financing leases -to be paid from revenues: Caeital Lease -Prima~ Government Lease Interest Year Outstanding Due Total 2018 $ 1571868 $ 51071 $ 1621939 Total $ 157,868 $ 5,071 $ 162,939 Kansas Public Water Supply Loans. The City has engaged in a loan with the Kansas Public Water Supply Fund. The following displays annual debt service requirements to maturity for the loan payable to be paid from service revenues, for the full proceeds amount: Kansas Water Supply Loans -Primary Gm.emment Loans Interest Year Outstanding Due Total 2018 $ 2019 2020 2021 2022 2023-2027 2028-2032 2033-2035 571,773 580,276 593,764 607,573 621,707 3,332,540 3,739,637 2,150,661 12, 197,931 Total =$====== $ $ 277,128 $ 848,901 268,625 848,901 255,137 848,901 241,328 848,901 227,194 848,901 911,965 4,244,505 504,868 4,244,505 95,361 2,246,022 2,781,606 $ 14,979,537 Dakotas and CNMC Notes. Dakotas Note A -On July 27, 2016, a $6,016,500 promissory note with a maturity date of December 10, 2050 was provided to SFH QalicB by Dakotas XXll, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2026, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $293,276 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2017, the note balance was $6,016,500. 48 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Dakotas Note B -On July 27, 2016, a $2,623,500 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by Dakotas XXll, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $127,883 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2017, the note balance was $2,623,500. CNMC Note A-On July 27, 2016, a $2,674,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $130,345 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2017, the note balance was $2,674,000. CNMC Note B -On July 27, 2016, a $1,326,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $64,636 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2017, the note balance was $1,326,000. As of December 31, 2017, the principal balance of these four loans net of $468.910 of unamortized debt issuance costs was $12, 171,090. 49 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Annual debt service requirement to maturity for Special Assessment Debt to be paid from rental revenue: Special Assessment Debt -Component Units Assessment Interest Year Outstanding Due Total 2018 $ 2,153 $ 412 $ 2,565 2019 2,249 315 2,564 2020 2,350 215 2,565 2021 2!455 110 2!565 Total $ 91207 $ 11052 $ 101259 Special assessments. As provided by Kansas statutes, projects financed in part by special assessments are financed through general obligation bonds of the City and are retired from the debt service fund. Special assessments paid prior to the issuance of bonds are recorded as revenue in the appropriate project. Special assessments received after the issuance of bonds are recorded as revenue in the debt service fund. The special assessments are not recorded as revenue when levied against the respective property owners as such amounts are not available to finance current year operations. The special assessment debt is a contingent obligation of the City to the extent of property owner defaults, which have historically been immaterial. Premises lease. On July 27, 2016, SFH QalicB entered into a lease agreement with the City for the use of the Salina Field House, as defined in the Net Lease agreement (the "Property"), under a direct financing lease. The lease term is 30 years, as defined in the Net Lease agreement. Beginning on July 1, 2017 and on the first day of each December thereafter through December 1, 2046, annual payments are due, in advance, as specified in the Net Lease agreement. For the year ended December 31, 2017, SFH QalicB earned $246,458 of rental income under the terms of the Net Lease. As of December 31, 2017, rental income of $123,914 remained receivable from the City. 50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Premises lease (continued). The following is a schedule, by year, of total minimum lease payments by the City to SFH QalicB under the direct financing lease as of December 31, 2017: F. Operating Leases 2018 2019 2020 2021 2022 2023-2027 2028-2032 2033-2037 2038-2042 2043-2046 $ 130,000 130,000 130,000 130,000 130,000 1,917,500 3,250,000 3,250,000 3,250,000 2,275,000 $ 14,592,500 On December 20, 2012, the City and Saline County jointly entered into a non-cancelable lease to finance a $2,750,000 heating, ventilation and air conditioning (HVAC) upgrade at the Saline County-City Building Authority. The City's share of the lease agreement is 40% and will pay the lessor $1,100,000, plus interest, through monthly payments of $7,827 over a term of 180 months. The total cost for this lease was $93,926 for the year ended December 31, 2017. The future minimum lease payments for the lease are as follows: yggr AmQunt 2018 $ 93,926 2019 93,926 2020 93,926 2021 93,926 2022 93,926 2023-2027 4691633 Total $ 939,263 51 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) G. Reconciliation of Transfers A reconciliation of interfund transfers follows: Trs;insfer In T[ansfer Out Major Funds: General fund $4,626,500 $ 810,000 Tourism and convention fund 723,942 Special gas fund 160,000 Sales tax capital fund 2,568,350 Debt service 2,241,309 Capital projects 57,666 Salina Fieldhouse QALICB, Inc. Other governmental funds 1,310,983 Agency funds 57,666 Solid waste disposal fund 540,000 Water and sewer fund 3,450,000 Sanitation fund 376,500 Central garage fund 1301000 Total Transfers $815261458 $ 8,5261458 The City uses interfund transfers to share administrative costs between funds. 52 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION A. Defined Benefit Pension Plan Description of Pension Plan. The City participates in a cost-sharing multiple-employer pension plan (Pension Plan), as defined in Governmental Accounting Standards Board Statement No. 67, Financial Reporting for Pension Plans. The Pension Plan is administered by the Kansas Public Employees Retirement System (KPERS), a body corporate and an instrumentality of the State of Kansas. KPERS provides benefit provisions to the following statewide pension groups under one plan, as provided by K.S.A. 74, article 49: Public employees, which includes: • State/School employees • Local employees • Police and Firemen • Judges Substantially all public employees in Kansas are covered by the Pension Plan. Participation by local political subdivisions is optional, but irrevocable once elected. Those employees participating in the Pension Plan for the City are included in the Local employees group and the Kansas Police and Firemen group. KPERS issues a stand-alone comprehensive annual financial report, which is available on the KPERS ' website at www.kpers.ora. Benefits. Benefits are established by statute and may only be changed by the State Legislature. Members (except Police and Firemen) with ten or more years of credited service, may retire as early as age 55 (Police and Firemen may be age 50 with 20 years of credited service), with an actuarially reduced monthly benefit. Normal retirement is at age 65, age 62 with ten years of credited service, or whenever a member's combined age and years of service equal 85. Police and Firemen normal retirement ages are age 60 with 15 years of credited service, age 55 with 20 years, age 50 with 25 years, or any age with 36 years of service. Monthly retirement benefits are based on a statutory formula that includes final average salary and years of service. When ending employment, members may withdraw their contributions from their individual accounts, including interest. Members who withdraw their accumulated contributions lose all rights and privileges of membership. For all pension coverage groups, the accumulated contributions and interest are deposited into and disbursed from the membership accumulated reserve fund as established by K.S.A. 7 4- 4922. Members choose one of seven payment options for their monthly retirement benefits. At retirement a member may receive a lump-sum payment of up to 50% of the actuarial present value of the member's lifetime benefit. His or her monthly retirement benefit is then permanently reduced based on the amount of the lump sum. Benefit increases, including ad hoc post-retirement benefit increases, must be passed into law by the Kansas Legislature. Benefit increases are under the authority of the Legislature and the Governor of the State of Kansas. The 2012 Legislature made changes affecting new hires, current members and employers. A new KPERS 3 cash balance retirement plan for new hires starting January 1, 2015, was created. Normal retirement age for KPERS 3 is 65 with five years of service or 60 with 30 years of service. Early retirement is available at age 55 with ten years of service, with a reduced benefit. Monthly benefit options are an annuity benefit based on the account balance at retirement. 53 CllY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) For all pension coverage groups, the retirement benefits are disbursed from the retirement benefit payment reserve fund as established by K.S.A. 7 4-4922. Contributions. Member contributions are established by state law, and are paid by the employee according to the provisions of Section 414(h) of the Internal Revenue Code. State law provides that the employer contribution rates are determined based on the results of an annual actuarial valuation. The contributions and assets of all groups are deposited in the Kansas Public Employees Retirement Fund established by K.S.A. 7 4-4921. All of the retirement systems are funded on an actuarial reserve basis. For fiscal years beginning in 1995, Kansas legislation established statutory limits on increases in contribution rates for KPERS employers. Annual increases in the employer contribution rates related to subsequent benefit enhancements are not subject to these limitations. The statutory cap increase over the prior year contribution rate is 1.2% of total payroll for the fiscal year ended June 30, 2017. The actuarially determined employer contribution rates (not including the 1.00% contribution rate for the Death and Disability Program) and the statutory contribution rates are as follows: Local employees Police and Firemen Actuarial Employer Rate 8.46% 19.03% Statutory Employer Capped Rate 8.46% 19.03% Member contribution rates as a percentage of eligible compensation for the fiscal year 2017 are 6.00% for Local employees and 7.15% for Police and Firemen. Employer Allocations. Although KPERS administers one cost-sharing multiple-employer defined benefit pension plan, separate (sub) actuarial valuations are prepared to determine the actuarial determined contribution rate by group. Following this method, the measurement of the collective net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense are determined separately for each of the following groups of the plan: • State/School • Local • Police and Firemen • Judges To facilitate the separate (sub) actuarial valuations, KPERS maintains separate accounts to identify additions, deductions, and fiduciary net position applicable to each group. The allocation percentages presented for each group in the schedule of employer and nonemployer allocations are applied to amounts presented in the schedules of pension amounts by employer and nonemployer. The allocation percentages for the City's share of the collective pension amounts as of December 31, 2017, are based on the ratio of its contributions to the total of the employer and nonemployer contributions of the group for the fiscal years ended December 31, 2017. The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2017, the City's proportion for the Local employees group was 0.811%, which was an increase of .05% from its proportion measured at June 30, 2016. At June 30, 2017, the City's proportion for the Police and Firemen group was 2.191 %, which was an increase of .011 % from its proportion measured at June 30, 2016. 54 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Net Pension Liability. At December 31, 2017 and 2016, the City and its component units reported a liability of $33,276,991 and $32,923,025, respectively, for its total proportionate share of the net pension liability for the Local and Police and Firemen groups. Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2016, which was rolled forward to June 30, 2017, using the following actuarial assumptions: Assumptions Price inflation Wage inflation Salary increases, including wage increases Long-term rate of return, net of investment expense, and including price inflation 2.75% 3.50% 3.5% to 12.0% including inflation 7.75% Mortality rates were based on the RP-2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2016. The actuarial assumptions used in the December 31, 2016 valuation were based on the results of an actuarial experience study conducted for the period of January 1, 2013, through December 31, 2015. The experience study is dated November 18, 2016. The long-term expected rate of return of pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of June 30, 2017 are summarized in the following table: ~ Global Equity Fixed Income Yield driven Real Return Real estate Alternatives Short-term investments Lonq-T erm Allocation 47.00% 13.00% 8.00% 11.00% 11.00% 8.00% ~ 10000% Long-Term Expected Real Rate of Return 6.80% 1.25% 6.55% 1.71% 5.05% 9.85% -0.25% Discount Rate. The discount rate used to measure the total pension liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the contractually required rate. The State, School and Local employers do not necessarily contribute the full actuarial determined rate. Based on legislation passed in 1993, the employer contribution rates certified by the System's Board of Trustees for these groups may not increase by more than the statutory cap. The expected KPERS employer statutory contribution was modeled for future years, assuming all actuarial assumptions are met in future years. Employers contribute the full actuarial determined rate for Police & Firemen, and Judges. Future employer contribution rates were also modeled for Police & Firemen and Judges, assuming all actuarial assumptions are met in future years. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of 55 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the City's proportionate share of the net pension liability to changes in the discount rate. The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.75%, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.75%) or 1-percentage point higher (8.75%} than the current rate: 1% Decrease (6.75%) $ 16,927,244 29.148.713 Discount Rate (7.75%) 1% Increase (8.75%) Local $ 11,753,246 $ 7,391,770 Police & Firemen Total 20.546.882 13.345.922 $ 46,075,957 $ 32,300. 128 .;..$ __ ..;;2;..;.o.:.;..1.;;.31~,6;..;9=2 Pension Expense. For the year ended December 31, 2017, the City recognized Local pension expense of $1,138,591 and Police and Firemen pension expense of $2,722,012, which includes the changes in the collective net pension liability, projected earnings on pension plan investments, and the amortization of deferred outflows of resources and deferred inflows of resources for the current period. The Salina Housing Authority's and Salina Airport Authority's portion of the Local pension expense were $32,442 and $41,605, respectively Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Local Differences between actual and expected experience Contributions subsequent to the measurement date Net differences between projected and actual earnings on investments Changes in assumptions Changes in proportion Total Police & Firemen Differences between actual and expected experience Contributions subsequent to the measurement date Net differences between projected and actual earnings on investments Changes in assumptions Changes in proportion Total 56 Deferred outflows Deferred inflows of resources of resources $ 56,846 $ 406,403 595,232 368,680 632,961 85,945 5761693 310,651 $ 2,230,412 $ 802,999 Deferred outflows Deferred inflows of resources of resources $ 993,261 $ 153,700 $ 1,006,499 761,169 1,434,755 91,820 661279 5831959 4,261,963 .;..$_~82;;.;9;.:..4;..;.7.;;.9 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) At December 31, 2017, the Salina Housing Authority and Salina Airport Authority reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Housing Authority Ai!I!Qr! Authori!Y Deferred outflows Deferred inflows Deferred outflows Deferred inflows ~ Qf~5!lU~5 !lf ~5!lU[~!i15 !l1m!lU[!<!15 !l1~5!lL!~5 Differences between actual and expected experience $ 2,167 $ 6,740 $ 2,919 $ 20,866 Contributions subsequent to the measurement date 36,983 5,290 Net differences between projected and actual earnings on investments 44,110 18,930 Changes in assumptions 3,493 32,499 4,413 Changes in proportion 2467 5 096 45 547 71207 Total $ 85i727 $ 151329 $ 1051185 $ 961486 $1,601, 731 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Local Police & Firemen Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31, Amount Amount Total 2018 $ [8,406) $ 356,816 $ 348,410 2019 449,682 1,137,553 1,587,235 2020 306,743 714,701 1,021,444 2021 (6,545) 58,150 51,605 2022 90,707 158,765 249,472 Total $ 8321181 $ 214251985 $ 31258,166 $36,983 and $5,290 reported as deferred outflows of resources related to pensions resulting from Salina Housing Authority and Salina Airport Authority contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended December 31, 2018 2019 2020 2021 2022 Total Housing Authority Deferred [Inflows] Outflows Amount Airport Authority Deferred [Inflows] Outflows Amount $ 2,399 $ 16,286 12,198 134 2,398 [17,980) $ Total (15,581] 23,880 21,849 [1,894] 8,570 $ 33,415 $ 57 7,594 9,651 [2,028) 6,172 3,409 $ 36,824 ======= CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) B. Deferred Compensation Plan The City offers its employees a deferred compensation plan ("Plan") created in accordance with Internal Revenue Code Section 457. The Plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Plan assets are transferred to a plan agent in a custodial trust and are not available to the claims of the City's general creditors. C. Flexible Benefit Plan (l.R.C. Section 125) The City Commission has adopted by resolution a salary reduction flexible benefit plan ("Plan") under Section 125 of the Internal Revenue Code. All City employees working more than 20 hours per week are eligible to participate in the Plan beginning after two full months of employment. Each participant may elect to reduce his or her salary to purchase benefits offered through the Plan. Benefits offered through the Plan include various insurance and disability benefits. D. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters and other events for which the City carries commercial insurance. No significant reductions in insurance coverage from that of the prior year have occurred. Settlements have not exceeded insurance coverage for each of the past three years. The City has established a limited risk management program for workers' compensation. The program covers all City employees. Premiums are paid into the Workers' Compensation Reserve Fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $250,000 ($350,000 for claims involving employees classified as policemen or firemen). Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Workers' Compensation Reserve Fund because it is expected to be liquidated with expendable available financial resources. Of the liability, $177, 141 is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: ZQ1l. 2Q12 Unpaid claims, January 1 $ 255,154 $ 281,601 Incurred claims (including IBNRs) 622,556 947,583 Claim payments [655?9ZJ [974,030] Unpaid claims, December 31 $ 221,913 $ 255,154 The City established a limited risk management program for employee health and dental insurance in 1997. The program covers eligible City employees. Premiums are paid into the health insurance fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $50,000. Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Health Insurance Fund because it is expected to be liquidated with expendable available financial resources. Therefore, all of the liability is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 58 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) E. Contingent Liabilities Unpaid claims, January 1 Incurred claims Qncluding IBNRs) Claim payments Unpaid claims, December 31 2017 2016 $ 294,333 $ 275,440 4,244,648 3,951,548 (4, 143,290) (3,932,655] $ 395,691 $ 294,333 The City receives significant financial assistance from numerous federal and state governmental agencies in the form of grants and state pass-through aid. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. However, in the opinion of management, any such disallowed claims would not have a material effect on any of the financial statements of the City at December 31, 2017. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. F. Municipal Solid Waste Landfill State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste, and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and postclosure care costs as an operating expense of the solid waste fund in each period based on landfill capacity used as of each balance sheet date. The $1,981,498 reported as landfill closure and postclosure care liability at December 31 represents the cumulative amount reported to date based on the use of 28.8% of the estimated capacity of the landfill. The City's solid waste fund will recognize the remaining estimate cost of closure and postclosure care of $4,892,995 as the remaining estimated capacity is filled over the remaining life expectancy of 147 years. These amounts are based on what it would cost to perform all closure and postclosure care in 2017. Actual cost may be higher due to inflation, changes, in technology or changes in regulations. The City is required by State and Federal laws and regulations to provide assurances of financial responsibility for closure and post- closure care. The City has elected to utilize the Local Government Financial test promulgated by the U.S. Environmental Protection Agency (at 40 CFR 258.74(f)) and the Kansas Department of Health and Environment to provide these assurances. Any future closure or post-closure care costs will be provided through the normal budgeting and rate setting process, including the issuance of general obligation bonds, if necessary. 59 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) G. Capital Projects Capital projects often extend over two or more fiscal years. The following is a schedule, which compares the project authorization including allowable interest revenue to total project expenditures from project inception to December31, 2017. Project 8uthorization ExQenditures Markley-Magnolia W Sewer $ 5,150,000 $ 200,718 Cloud from Ohio to Levee 155,014 69,242 Ninth and Cloud Intersection Realignn 1,100,000 1,048,542 Bicentennial Center Improvements 10,200,000 12,344,709 Lakewood Middle School Safe Route 81,375 47,509 Bicentennial Center Owners Rep 96,000 84,000 Water Well 13 & 14 Maintenance 52,184 50,830 Pavement Condition Survey 36,222 33,909 Community Fieldhouse 6,937,827 8,681,599 Community Fieldhouse 713,858 733,992 Wastewater Treatment Plant Feasibil 154,395 154,395 Channel Road Erosion Repairs 58,858 Rebuild High Service Pump P-203 24,187 6,259 Pump Stations and Force Mains 1,483,000 1,280,581 2016 Water Meters 30,000 18,128 2017 Country Club Road lmprovemen 1,200,000 953,747 Dowtown STAR District 58,000 87,312 Downtown CID -Alley 1,159 Downtown TIF 1,944 2017 Mill & Inlay 1,577,502 1,413,554 2017 Major Concrete Rehab 469,472 423,675 Downtown Streetscape 12,165,000 1,109,400 Smoky Hill River Renewal 3,200,000 1,429,129 S Well Field & WTP Phase 1 1,964,525 366,655 2017 Sidewalks 69,092 53,105 Police Training Facility 4,900,000 4,204 Beechcraft Road lmprovements-Airpo 1,500,000 401 Indiana Ave Trail 79,262 74,486 Preliminary Design Broadway lmpr 50,000 50,000 2018 Pavement Sealing 325,000 275 60 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters The Kansas Department of Health and Environment (KDHE) issued a report in 1994 indicating the presence of volatile organic compounds at levels requiring remediation at the Salina Public Water Supply Wells Site. The City adopted a proactive Policy and Action Plan to remediate the groundwater contamination, and on December 7, 1994, the City and KDHE entered into a Consent Order and Settlement Agreement under which the City assumed primary responsibility for the further investigation and remediation of the groundwater contamination. Field testing work has been completed. The necessary remediation work will be conducted over the next several years at a yet undetermined cost to the City's Water and Sewer Fund. The U.S. Department of Defense transferred property located at the former Schilling Air Force Base (the Base or Site) to the Authority on or about September 9, 1966. The property is now known to contain areas of extensive soil and groundwater contamination, which is a result of the use and disposal of chlorinated solvents during military operations at the Base from 1942 until Base closure in 1965. The U.S. Department of Defense is responsible for the investigation and remediation of contamination caused by military activities at current and former military bases. The U.S. Army Corps of Engineers (Corps) is the lead agency for the Department at formerly used defense sites. The Corps has investigated the soil and groundwater contamination at the Site under the regulatory oversight of the U.S. Environmental Protection Agency (EPA) and the Kansas Department of Health and Environment (KDHE). The Site is not designated as a National Priority List Superfund site, but investigation and remediation are required to be in compliance with the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Potential liability for contamination under CERCLA extends broadly to parties associated with the release or presence of hazardous substances, including not only those entities involved with contaminant use and disposal, but in some cases other current and former owners and operators of contaminated sites. As a current owner of extensive amounts of property at the Site, the Authority is potentially liable under CERCLA, although the Authority believes that it has meritorious defenses to such liability. The Authority is considered to be a Potentially Responsible Party (PRP) for the Site, primarily due to its status as a property owner. The Authority, City of Salina, Unified School District No. 305 and the Kansas Board of Regents (Kansas State University Polytechnic Campus), (collectively Salina Public Entities) currently own over 90% of the nearly 4,000 acres of the Base property. No third party has asserted any claim for bodily injury or property damage. Beginning in August 2007, the Salina Public Entities initiated settlement negotiations with the U.S. Federal Government. The negotiation objectives at that time included transferring the responsibility for completing the cleanup from the U.S. to the Salina Public Entities. The local objective was to reach a settlement agreement with the U.S. that provides the Salina Public Entities sufficient funds to complete cleanup operations over a 30-year period. During calendar year 2008, the Salina Public Entities, by and through its environmental consultant, prepared a detailed Cost to Complete Estimate (CTC). The CTC preparation included consultation with the EPA and KDHE. The Salina Public Entities' CTC was completed in June of 2008 and submitted to the Corps. Subsequently, on January 23, 2009, the Salina Public Entities delivered a demand letter to the Corps. The letter demanded that settlement negotiations begin immediately with the U.S. Department of Justice. On May 14, 2009 the Authority was notified that the Corps referred the Base demand letter to the U.S. Department of Justice on May 12, 2009. The Salina Public Entities delivered on or about May 10, 2010, a settlement offer and a draft of a lawsuit complaint to the attorney for the U.S. Department of Justice. The Salina Public Entities planned to file suit against the U.S. if the matter was not settled by the end of May, 2010. The Salina Public Entities did not intend to cut off settlement negotiations by the filing of suit, and this has been communicated to the U.S. No remedial action plan or record of decision has been adopted by the EPA or KDHE. 61 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) On or about May 27, 2010, the Salina Public Entities filed their Complaint against the United States of America, the United States Department of Defense and Secretary of Defense, Robert M. Gates, in his official capacity (collectively, "Defendants"). On or about September 22, 2010, the Salina Public Entities filed their First Amended Complaint in four counts: Count I Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(2), Count II Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(1 ), Count Ill Claim for Recovery of Response Costs Pursuant to 42 U.S.C.§ 9607(a) and Count IV Claim for Declaratory Judgment Pursuant to 42 U.S.C.§ 9613(g)(2). On or about October 6, 2010, Defendants filed their motion to dismiss and to strike, primarily with respect to the citizen suit claims. On or about March 25, 2011, Judge Murguia entered his Memorandum and Order. The Judge granted the Defendants' motion to dismiss Counts I and II (citizen suit claims) for lack of subject matter jurisdiction. He also granted the Defendants' motion to dismiss the Salina Public Entities' requests for attorney fees, with the exception of non-litigation attorney fees. He denied the Defendants' motion to strike the Salina Public Entities' allegations of a conflict of interest. The Salina Public Entities' claims under Counts Ill and IV for response costs under CERCLA 9607(a) are not affected by the Judge's rulings. The Salina Public Entities disagree with most of the Judge's filings and, if necessary, plan to take an interlocutory appeal to the Tenth Circuit to contest the rulings. On or about April 22, 2011, Defendants filed their Answer to First Amended Complaint and Counterclaim against the Salina Public Entities. Count I of the Counterclaim alleges a claim for contribution under CERCLA, 42 U.S.C.§ 9613(f)(1). Count II of the Counterclaim alleges a claim for cost recovery under CERCLA, 42 U.S.C.§ 9607(a)(1 ). Count II alleges costs incurred by the U.S. Environmental Protection Agency of approximately $1,838,241 as of September 30, 2007, and alleges costs incurred by the Corps of approximately $14,915,228 as of April 17, 2009. The Salina Public Entities intend to vigorously contest the claims brought against them and will assert, among other defenses, the third party defense under 42 U.S.C.§ 9607(b)(3). The parties agreed on a mediation to discuss settlement. The mediation sessions occurred in October 2011, and the mediation discussions continued for over a year. The parties have now agreed upon a partial settlement. The partial settlement includes payment by the U.S. in exchange for performance by the Salina Public Entities of a remedial investigation/feasibility study through entry of a Corrective Action Decision by KDHE (the "Work"). The present cost estimate of the Work is less than $10,000,000. The agreement is that the U.S. will pay 90% of the cost of the Work with the Salina Public Entities responsible for payment of the remaining 10%. It is anticipated that the agreed share of the Salina Public Entities will be paid by the City of Salina. Also, the claims and counterclaims in the lawsuit have been dismissed without prejudice with provisions tolling any and all statutes of limitation. No party is obligated under the settlement agreement to implement the Corrective Action Decision upon its entry by KDHE, and the parties will either negotiate an agreement to implement such Corrective Action Decision or refile their claims in court. The Salina Public Entities have entered into a Consent Agreement and Final Order ("CAFO") with KDHE, which is conditioned upon the U.S.'s payment to the City. On May 2, 2013, the U.S. District Court for the District of Kansas entered its Consent Decree. City of Salina, Kansas, et al. v. United States of America, et al., Case No. 1 0- CV -2298 CM/DJW. The Court's Consent Decree approved the settlement among the parties. The current status is that the U.S. wire transferred $8,426,700 to the account of the City, and the City added the share of the Salina Public Entities in the amount of $936,300 to the account. The Remedial Investigation (RI) portion of the CAFO scope of work was completed during 01 2018. The Feasibility Study portion of the CAFO scope of work was also completed during 01 2018. The Feasibility Study (FS) and Proposed Plan (PP) portions of the CAFO scope of work are scheduled to be completed during 02 2018 and submitted to KDHE. The Corrective Action Decision (CAD) document is scheduled to be issued by KDHE during 04 2018. Although the claims and counterclaims in the lawsuit have been dismissed without prejudice, the Authority intends to vigorously pursue its claims that the U.S. should implement the Corrective Action Decision upon 62 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) its entry by KDHE and its defenses against any claims brought against it. Based on presently known information, the Authority has determined that while a possible liability exists, at this time, no reasonable estimate of the possible liability can be made. Therefore, no liability related to that matter has been recorded. I. Postemployment Health Care Plan Plan Description. The City operates a single employer defined benefit healthcare plan administered by the City. The Employee Benefit Plan (the Plan) provides medical and dental benefits to eligible early retirees and their spouses. KSA 12-5040 requires all local governmental entities in the state that provide a group health care plan to make participation available to all retirees and dependents until the retiree reaches the age of 65 years. No separate financial report is issued for the Plan. Funding Policy. The contribution requirements of plan participants and the City are established and amended by the City. The required contribution is based on projected pay-as-you-go financing requirements. Plan participants contributed approximately $265,000 to the Plan (approximately 100% of total premiums) through their required contribution of $525 per month for retiree-only coverage and $1,408 for family coverage. Annual OPES Cost and Net OPEB Obligation. The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASS Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City's annual OPES cost for the Plan for the year, the amount actually contributed to the plan, and the changes in the City's net OPES obligation to the Plan: Annual required contribution Interest on Net OPES Obligation Adjustment to Annual Required Contribution Annual OPES cost (expense) Benefit payments Change in net OPES obligation Net OPEB obligation -beginning of year Net OPES obligation -end of year $ 430,085 150, 156 [166,838) 413,403 [265,000) 148,403 5,005,151 $ 5,153,554 The City's annual OPEB cost, the percentage of annual OPES cost contributed to the Plan, and the net OPES obligation for the year ended December 31, 2017 was as follows: 63 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) I. Postemployment Health Care Plan (Continued) Annual Fiscal Annual OPEB Net Year OPEB Cost OPEB Ended Cost Contributed Obligation December 31, 2013 $ 570,434 $ 148,000 $ 3,986,743 December31, 2014 534,877 185,000 4,336,620 December31, 2015 556,385 209,000 4,684,005 December31, 2016 578,146 257,000 5,005,151 December 31, 2017 413,403 265,000 5,153,554 Funding Status and Funding Progress. As of the year ended December 31, 2017, the most recent actuarial valuation date, the Plan was not funded. The actuarial accrued liability for benefits was $4,471,205 and the actuarial value of asset was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $4,471,205. The covered payroll (annual payroll of active employees covered by the plan) was $23,770,671, and the ratio of the UAAL to the covered payroll was 18.81 %. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statement, presents multiyear trend information about whether the actuarial value of plan assets (if any) are increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan participants) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan participants to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the year ended December 31, 2017, actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 3.00% investment rate of return, which is the rate of the employer's own investments as there are no plan assets and an initial annual medical and dental healthcare cost trend of 6.80%, reduced by decrements to an ultimate rate 4.10% after eighty years. The UAAL is being amortized as a level dollar over an open thirty-year period. J. Deficit Fund Balance The Police Grants Fund maintained a deficit fund balance of $[27,854) at December 31, 2017. 64 K. TAX ABATEMENTS CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 In 2017, the City of Salina participated in real property tax abatements for six local companies. Property tax abatements are authorized under Kansas state statutes K.S.A. 12-1740 et seq. and K.S.A. 79-201a and subject to City policy. The City provides property tax abatements to encourage existing industry to expand, assist new business start-ups, recruit new companies from out-of-state or internationally, encourage high technology and research based businesses, encourage training and development of Salina area employees, and encourage location and retention of businesses which are good "corporate citizens" that will add to the quality of life in the community through leadership and support of civic and philanthropic organizations. Property tax abatements reduce ad valorem property taxes. The percentage of reduction ranges from 40.5% to 100%, but in all cases, the maximum duration is for ten years as per state statute. To receive an abatement, applicants must submit an application, which undergoes due diligence and analysis before being considered by the City Commission. If the abatement is authorized, the applicant must sign a performance agreement that specifies annual compliance measures. Each year, the applicant submits a renewal application, along with compliance information, which is reviewed by City staff for conformance with agreement provisions. If compliance is not met, appeals can be made to the City Commission to determine the amount of incentives, if any, to be received by the property owner. The City of Salina negotiates property tax abatements on an individual basis. Ad Valorem Property Tax Abatements 2017 Tax Company Start End % Abated Salina Vortex Corp (facility impro-.ements) 2015 2024 75% $ 20,981 --· ---------------- Bergkamp (facility addition/impro-.ements) 2010 2019 50% 6,486 -------Great Plains Mfg (facility impro\ements) 2014 2023 100% - Veris Technologies (facility addition/impro-.ements) 2015 2024 40.5% 1,925 Twin Oaks (facility addition/improwments) 2015 2024 55% 2,602 ·-Salina Field House (facility) 2017 2026 100% 27,401 Total I I $ 59,395 Tax Increment Financing (TIF). TIFs are an economic development tool established by the Kansas TIF Act (K.S.A. 12-1770 et seq.) and subject to City policy to aid in financing projects for substantial public benefit. Public benefits can include creating jobs or retaining existing employment, eliminating blight, strengthening the employment and economic base of the City, increasing property values and tax revenues, reducing poverty, creating economic stability, upgrading older neighborhoods, facilitating economic self-sufficiency, promoting projects that are of community wide importance, or implementing the economic development goals of the City. The program works by reimbursing a portion of the incremental increase in property taxes resulting from improvements and a portion of local sales tax generated within the district to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. To receive a TIF, applicants must submit a detailed, written proposal to the City, which will undergo due diligence and analysis before being considered by the City Commission. The City Commission then determines if it will commence the statutory process to create a redevelopment district. If the TIF district is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate TIF revenues (sales tax and/or property tax), City staff works with the distributing agency and property owner to generate and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and sales and/or property tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates TIFs on an individual basis. 65 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 K. TAX ABATEMENTS (Continued) TIF Project Plans District Purpose Base Year Expires Construction of 10.79 acres of shopping center, including single and multi-tenant retail space, and related public and prilate Lambertz infrastructure 2007 2027 Total 2017 Reimbursements Sales Tax Property Tax $ 212,624 $ 258,932 $ 212,624 $ 258,932 Community Improvement Districts (CID). CIDs are an economic development tool established by the Kansas CID Act (K.S.A. 12-6a26 et seq.) and subject to City policy to assist with the development of community improvements which can benefit a development and the public. In all CIDs, public improvements were financed initially by the developer and are reimbursed annually via a two percent (2%) transportation district sales tax on retail or taxable services occurring within the district. To establish a CID, the applicant first submits a CID petition which is signed by the owners of all of the land within the proposed district. The City Commission then considers the request to establish a CID. If the CID is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate CID revenues, City Staff works with the distributing agency and property owner to make and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and CID sales tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates CIDs on an individual basis. Community Improvement District (CID) 2017 81gible Reimbursement Name Rate Start Expires Purpose Amount* Assist with impro-.ements to hotel South 9th Street 2.00% 3/1/2016 12/31/2037 and conference center $ 154,154 Total $ 154,154 *Reimbursement was not actually paid to de-.eloper until Jan. 2018 Neighborhood Revitalization Areas (NRA). NRAs are authorized under Kansas state statutes K.S.A. 12-117 and subject to City policy to spur investment and revitalization of properties which can benefit a neighborhood and the public. The program works by rebating a portion of the incremental increase in property taxes resulting from improvements back to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. Participation in the program and percentage of rebate and duration are determined separately by the City, County, and School District. The current City of Salina adopted plan is a 4 year plan running from 2014 -2018. It allows for a 10 year rebate and provides rebates from 25% to 100% depending on year in plan and type of improvement. To receive an NRA, taxpayers must submit an application, which undergoes due diligence and analysis before being approved by the City. If the NRA is approved, each year, the applicant must submit proof that property taxes have been paid in full. Because the rebate is not given until after improvements are put in place and property taxes paid, there are no provisions for recapturing taxes. The City of Salina approves NRAs on an individual basis. 66 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 K. TAX ABATEMENTS (Continued) Neighborhood Revitalization Act (NRA) --------------· . -----------------·-------.. ----.. - Property/Buslne!IS Name Addre!IS Weis Fire & Safety lmpro-.ement #2 Erick Mendenhal1 1325 N. 3rd Annie!Artene Lewis 1005 N. 1 Oth Street Michelle Malone 809 N. 2nd Street Boyd E. Smith Trust 148 S. Santa Fe Boyd E. Smith Trust 148 S. Santa Fe Welsh lnwstments LLC 300 S. 9th Street Leon Marrs Trust 7 40 N. 2nd Street Johnny M. & Sung Hee Kim 233A S. Fourth Street Pioneer Presidents Place LP 210 W.Mulberry Street Chrlstpher Helm 613 N 5th Street Paul Foster 523N.11th James M. Monroe 620 W. Hamilton Street Chanel Thomas 241 N. Front Street Christina Lltwiller 148 N. 12th Street Jeremy Cessna 219 N. Front Street Troy & Dawn Cramer 1101N.10th William & Mary Warhurst 714 Park Street Holly Fain 204 Forest Awnue Arlene Cox 200 Forest Awnue Gloria Williams 903 N. 10th Street Michelle Rogan 240 S. Clark Street Samuel A. Rock 1329 N. 4th Street Jessica A. 2legler 221 N. 2nd Street Delln or Jessica Know 207 N. Penn 2017 .. -------------- Type Rebate Pale Com $ 353 Res 49 Res 6 Res 21 Res 104 Com 121 Com 1.130 Res 37 Res 153 Com 2,472 Com 427 Res 31 Res 136 Res 115 Res n Res 82 Res 14 Res 52 Res 94 Res 95 Res 89 Res 109 Res 21 Res 90 Res 2n Rawy ln-.estments LLC 157 N. Sewnth, 203 W. Ash, 205 W. Ash, 207 W. Ash & 209 W. Ash Com 1,116 Lamont Outland 1206 N. 7th Street Res 200 Michelle Bunch 634 N. 8th Street Res 212 Jermaine and Tykea Polk 226 N. 2nd Street Res 107 Mary Marshall 937 N. 3rd Street Res 184 Angela Fishburn 1219 N. 8th Street Res 184 Kress Building LLC 134 S. Santa Fe Aw Com 509 Heritage st Hawthorne Partners, LLC 715 N. 9th Street Com 1,523 Will & Mary Warhurst 809W. Ash Res 228 Donnie & Remona Marrs 2035 E. Iron #300R Res 815 TJTM, Inc. 2035 E. Iron #213C Res 92 Troy Vslcll 853 Na\oBhO Res 111 Michelle Malone 815 N. 2nd Street Res 23 Timothy & Linda Rickman 719 E. Ash Res 134 Y-.ette Gelinas 1115 N. 8th Street Res 201 Charles H Carroll Jr Trust 156-158 s. Santa Fe Com 2,576 Pestinger Enterprises LLC 2035 East Iron, Unit 306R Res 449 Latisha Pierce 705 N. 2nd Street Res 244 Tanya Shlehzadeh 703 N. 2nd Street Res 220 Robert & Brenda Bums 1205 N. 4th Street Res 174 Property Partners LLC 116 & 118 N. Santa Fe (2nd Floor Loft Apartments) Com 2,466 Phill Hemmer 2035 E. Iron Awnue, Unit #203R Res 1,843 Curtis and Rebecca Schlosser 2035 E. Iron Awnue, Unit #206R Res 960 Daryl Bixby Construction Co. 156-158 N.11th Street Com 516 Tranlesh Byrd 701 N. 2nd Street Res 199 TJTM Inc 2035 E. Iron #105R Com 702 TJTM Inc 2035 E. Iron #302R Com 636 TJTM Inc 2035 E. Iron #202R Com 756 TJTM Inc 2035 E. Iron #205R Com 310 Mark Martin Llllng Trust 2035 E. Iron #104R Com 717 Total I 1$ 24,560 67 REQUIRED SUPPLEMENTARY INFORMATION CITY OF SALINA, KANSAS OTHER POST-EMPLOYMENT BENEFITS REQUIRED SUPPLEMENTARY INFORMATION December 31, 2017 Schedule of Employer Contributions: Annual Fiscal Annual OPEB Net Year OPEB Cost OPEB Ended Cost Contributed Obligation December31, 2013 $ 570,434 $ 148,000 $ 3,986,743 December 31, 2014 534,8n 185,000 4,336,620 December 31, 2015 556,385 209,000 4,684,005 December 31, 2016 578, 146 257,000 5,005,151 December31, 2017 413,403 265,000 5,153,554 Schedule of Funding Progress: Actuarial Actuarial Actuarial Unfunded Funded Covered Valuation Value of Accrued AAL Ratio Payroll Date Assets {a} Liabilitll {b} {b} -{a} {alb} .{fil 12/31/2013 $ -$ 5,579,912 $ 5,579,912 0.0% $ 22,283,185 12/31/2014 5,538,770 5,538,770 0.0% 22,156,127 12/31/2015 5,538,770 5,538,770 0.0% 22,958,300 12/31/2016 5,538,770 5,538,770 0.0% 23,245,887 12/31/2017 4,471,205 4,471,205 0.0% 23,770,671 68 UAALas Percent of Payroll {b-a}/{c} 25.04% 25.00% 24.13% 23.83% 18.81% CITY OF SALINA, KANSAS KPERS PENSION PLAN REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED} December 31, 2017 Schedule of the City's Proportionate Share of the Net Pension Liability Last Ten Fiscal Years* Local ~ City's proportion of the net pension liability 0.764% City's proportionate share of the net pension liability $10,027,679 City's covered-employee payroll $12,931,197 City's proportionate share of the net pension liability as a percentage of Its covered-employee payroll 77.55% Plan fiduciary net position as a percentage of the total pension liabihty 71.98% •·The amounts presented for each fiscal year were determined as of 12131. Data became available with the Inception of GASB 68 during fiscal year 2015, therefore 10 years of data Is unavailable. Police and Firemen Local ~ 1m1l1.§ 2.258% 0.761% $16,395,794 $11,770,699 $10,161,866 $13,371,550 161.35% 88.03% 74.60% 68.55% Schedule of the City's Contributions Last Ten Fiscal Years* Police and Firemen 12la1L1J1 2.180% $ 20,251,512 $10,799,898 187.52% 69.30% Police and Police end Local .12fill1Z 0.811% $ 11,753,246 $13,606,499 86.38% 72.15% Local Firemen Local Firemen Local 12mlli 12mlli .12illill .l2filill! .12Q.1l11 $ $ Contractually required contribution $ 1,256,217 $ 2,527,995 $ 1,243,711 $ 2,361,273 $ 1,179,745 $ Contributions In relation to the contractually required contribution 1,256,217 2,361,273 1,179i745 Police and Firemen .12fill1Z 2.191% 20,546,882 10,606,934 193.71% 7099% Police end Firemen .12mL1.Z 1,986,933 Contribution deficiency [excess) _$ _______ • _$ _______ • ~$------~-~$ _______ • ~$ _______ • _$ ________ _ City's covered-employee payroll Contributions as a percentage of covered employee payroll • -Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. $13,251,236 $10,730,033 $13,548,056 $10,593,419 $13,944,989 $ 10,441,055 9.48% 23.56% 9.18% 22.29% 8.46% 19.03% 69 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Bicentennial center fund -To account for the activities of the City's convention center. ·Business improvement district fund -State law allows businesses within an area to voluntarily establish an improvement City. This fund is used to account for the assessments made on the District. All revenues are to be used within the Business Improvement District. Neighborhood park fund -To account for fees collected from new residential building projects in Salina. Expenditures are for acquisition or development of neighborhood parks in the growing areas of the community. Special parks and recreation fund -To account for liquor tax revenues, which must be used for park maintenance and improvements. Special alcohol fund -To account for liquor tax revenues, which must be used for programs, which address prevention, education or intervention for drug and alcohol abuse. · Community development revolving fund -To account for funds, which may be loaned for housing and economic development, purposes, to later be repaid and reused on a revolving basis. Sales tax economic development fund -To account for 12.5% of the 1/4 cent sales tax designated for economic Development purposes. Downtown TIF District #1 fund -To account for revenues and expenditures related to the Tax Increment Financing District that was formed as part of the Downtown Revitalization Project. South 9th CID fund -To account for incremental sales tax revenues received and disbursed back to the developer as part of the Community Improvement District formed in 2015. State Grants fund -To account for grant revenue and expenditures received from the State of Kansas. 911 communications fund -To account for transitioning the receipt and administration of 911 fees to the City from the Kansas Department of Revenue and Saline County, as the City is now the public answering point. Monies will be used to pay for 911 related services. Kenwood cove capital fund -To account for the Special Sales Tax proceeds to be used to provide for long-term capital maintenance activity at the facility. Special law enforcement fund -To account for revenues received from the sale of forfeited assets acquired during drug enforcement activities. Expenses are limited to capital items to be used for further drug enforcement activities. Police grants fund -To account for revenues from grants, which are to be used for special police activities, including the D.A.R.E. program Federal grants fund -To account for grants received from the federal government to be used to monitor and mediate fair housing complaints. D.A.R.E. donations fund -To account for donations to the D.A.R.E. program. War memorial maintenance fund -To account for monies to be used for maintenance of the local war memorial. Arts & humanities fund -To account for revenues and expenses associated with arts and humanities activities. Federal CARE grant fund -To account for revenue and expenses associated with the CARE Grant. Police Department federal forfeiture funds -To account for revenue and expenses associated with federal Equitable Sharing Program funds. 70 CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS -CONTINUED Homeowners' assistance fund -To receive donations and/or other funds to assist low and moderate income persons in improving their homes. Private grants fund -To account for revenues and expenditures related to grants received from private entities with specific purposes. Animal shelter donations fund -To accumulate donations and account for expenses to benefit the animal shelter. NONMAJOR PERMANENT FUNDS Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government's programs. Cemetery endowment fund -To account for amounts expended for perpetual care of the City cemetery. Interest earnings are used for cemetery maintenance. Mausoleum endowment fund -To account for amounts charged for perpetual care of the City mausoleum. Interest earnings are used for mausoleum maintenance. Tricentennial commission fund -To account for donations to be used to celebrate the nation's tricentennial in the year2076. 71 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2017 Total Total Non major Nonmajor Non major Debt Special Revenue Permanent Service Funds Funds Fund ASSETS Cash and investments $ 3,001,083 $ 501,693 $ 1,037,888 Receivables Accounts 2,864 Total assets $ 3,003,947 $ 501,693 $ 1,037,888 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 162,754 $ -$ - Due to other funds 27,854 Total liabilities 190,608 Fund balances: Restricted 357,163 1,037,888 Committed 2,484,030 501,693 Assigned Unassigned [27,854] Total fund balances 2,813,339 501,693 1,037,888 Total liabilities and fund balances $ 3,003,947 $ 501,693 $ 1,037,888 See independent auditor's report on the financial statements. 72 Total Non major Governmental Funds $ 4,540,664 2,864 $ 4,543,528 $ 162,754 27,854 190,608 1,395,051 2,985,723 [27,854] 4,352,920 $ 4,543,528 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2017 Total Total Nonmajor Non major Non major Debt Special Revenue Permanent Service Funds Funds Fund REVENUES Taxes $ 580,766 $ -$ - Intergovernmental 851,416 621,860 Charges for services 469,766 10,619 Licenses and permits 5,300 Investment revenue 22,421 1,828 3,929 Donations 110,606 Miscellaneous 77,763 Total revenues 2,118,038 12,447 625,789 EXPENDITURES Current Culture and recreation 1,718,877 Public safety 223,912 Public health and sanitation 347,442 Planning and development 86,832 Miscellaneous 35 Debt service Principal retirement 180,000 Interest and other charges 90,935 Capital outlay 751,068 Total expenditures 3,128,131 35 270,935 Excess [deficiency] of revenues over [under] expenditures [1,010,093] 12,412 354,854 Other financing sources [uses] Transfers in 1,310,983 Transfers [out] Total other financing sources [uses] 1,310,983 Net change in fund balance 300,890 12,412 354,854 Fund balance -Beginning of year 2,512,449 489,281 683,034 Fund balance -End of year $ 2,813,339 $ 501,693 $1,037,888 See independent auditor's report on the financial statements. 73 Total Nonmajor Governmental Funds $ 580,766 1,473,276 480,385 5,300 28,178 110,606 77,763 2,756,274 1,718,877 223,912 347,442 86,832 35 180,000 90,935 751,068 3,399,101 [642,827] 1,310,983 1,310,983 668,156 3,684,764 $ 4,352,920 ASSETS Cash and investments Receivables Accounts Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Due to other funds Total liabilities Fund balance: Restricted Committed Assigned Unassigned Total fund balance [deficit) Total liabilities and fund balances CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS 43100 Business Bicentennial Improvement Neighborhood Center District Park $ 143,841 $ 13,304 $ 21,599 2,864 $ 143,841 $ 16,168 $ 21,599 $ 85,861 $ -$ - 85,861 16,168 57,980 21,599 57,980 16,168 21,599 $ 143,841 $ 16,168 $ 21,599 Special Parks & Special Recreation Alcohol $ 124,221 $ 164 $ 124,221 $ 164 $ -$ 124,221 164 124,221 164 $ 124,221 $ 164 Community Sales Tax Downtown Development Economic TIF South State 911 Revolving DeveloQment District #1 9th CID Grants Communications $ 185,112 $ 1,052,103 $ 101,631 $ 290,851 $ 6,436 $ 374,898 $ 185, 112 $ 1,052,103 $ 101,631 $ 290,851 $ 6,436 $ 374,898 $ -$ 50,000 $ -$ -$ -$ 9,670 50,000 9,670 185, 112 1,002,103 101,631 290,851 6,436 365,228 185, 112 1,002,103 101,631 290,851 6,436 365,228 $ 185,112 $ 1,052,103 $ 101,631 $ 290,851 $ 6.436 .... $ __ .... 37_4 ..... 8-.9 .... 8 See independent auditor's report on the financial statements. 74 ASSETS Cash and investments Receivables Accounts Total assets CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS {Continued) 43100 Kenwood Special Cove Law Police Capital Enforcement Grants $ 101,852 $ 81 $ $ 101,852 $ 81 $ - - LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 7,689 $ -$ - Due to other funds 27,854 Total liabilities 7,689 27,854 Fund balance: Restricted Committed 94,163 81 Assigned Unassigned [27,854) Total fund balance [deficit] 94,163 81 [27,854] Total liabilities and fund balances $ 101,852 $ 81 $ - Federal DARE Grants Donations $ 3,304 $ 18,824 $ 3,304 $ 18,824 $ -$ 235 235 3,304 18,589 3,304 18,589 $ 3,304 $ 18,824 Police War Federal Department Animal Memorial Arts & CARE Federal· Homeowners' Private Shelter Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Totals $ 32,291 $ 109,993 $ 25,973 $ 98 $ 11,440 $ 5,525 $ 377,542 $ 3,001,083 2,864 $ 32,291 $ 109,993 $ 25,973 $ 98 $ 11,440 $ 5,525 $ 377,542 $ 3,003,947 $ 225 $ 4,680 $ -$ -$ -$ -$ 4,394 $ 162,754 __ .....;2=2;..o...5 4,680 25,973 32,066 105,313 98 32,066 105,313 25,973 98 5,525 11,440 11,440 5,525 27,854 4,394 190,608 373,148 373,148 357,163 2,484,030 (27,854] 2,813,339 $ 32,291 $ 109,993 $ 25,973 -$ ____ 9..._8 $ 11,440 ._$ __ 5 ..... 5_2_5 $ 377,542 $ 3,003,947 See independent auditor's report on the financial statements. 75 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2017 Business Bicentennial Improvement 'Neighborhood Center District Park Revenues Taxes $ -$ -$ - Intergovernmental Charges for services 79,117 Licenses and permits 5,300 Investment revenue 12,513 47 94 Donations Miscellaneous Total Revenues 12,513 79,164 5,394 Expenditures Current Culture and recreation 738,507 Public safety Public health and sanitation Planning and development 72,197 Capital outlay 32,139 Total Expenditures 738,507 72,197 32,139 Excess [deficiency] of revenues over [under] expenditures (725,994] 6,967 (26,745] Other financing sources [uses] Transfers in 742,633 Transfers [out] Total other financing sources [uses] 742,633 Net change in fund balance 16,639 6,967 [26,745] Fund balance, beginning of year 41,341 9,201 48,344 Fund balance, end of year $ 57,980 $ 16,168 $ 21,599 Special Parks & Special Recreation Alcohol $ -$ 202,255 202,255 642 30 202,897 202,285 202,255 211,320 211,320 202,255 (8,423] 30 [8,423] 30 132,644 134 $124,221 $ 164 Community Development $ Revolving - 681 681 681 681 184,431 Sales Tax Economic Development $ 335,247 4,060 339,307 441,606 441,606 [102,299) [102,299) 1,104,402 $ Downtown TIF District #1 88,219 336 88,555 88,555 88,555 13,076 $ South 9th CID 157,300 713 10,371 168,384 168,384 168,384 122,467 $ State Grants - 10,974 22 10,996 10,996 10,996 [4,560) 911 Communications $ 331,339 1,122 332,461 223,912 223,912 108,549 108,549 256,679 $ 185,112 $ 1,002,103 $ 101,631 $ 290,851 $ 6,436 $ 365,228 ----- See independent auditor's report on the financial statements. 76 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2017 Kenwood Special Cove Law Police Capital Enforcement Grants Revenues Taxes $ -$ -$ - Intergovernmental 21,033 Charges for services Licenses and permits Investment revenue 180 Donations Miscellaneous Total Revenues 180 1 21,033 Expenditures Current Culture and recreation Public safety Public health and sanitation Planning and development Capital outlay 46,276 2,800 16,927 Total Expenditures 46,276 2,800 16,927 Excess [deficiency] of revenues over [under] expenditures [46,096] [2,799] 4,106 Other financing sources [uses] Transfers in 68,350 Transfers [out] Total other financing sources [uses] 68,350 Net change in fund balance 22,254 [2,799] 4,106 Fund balance, beginning of year 71,909 2,880 [31,960] $ Fund balance, end of year $94,163 $ 81 $ [27,854) $ Federal DARE Grants Donations -$ 50 54 18,707 50 18,761 14,635 14,635 50 4,126 50 4,126 3,254 14,463 3,304 $ 18,589 War Memorial Maintenance $ - 118 118 345 345 (227) (227) 32,293 $ 32,066 Police Federal Department Arts & CARE Federal Homeowners' Private Humanities Grant Forfeiture Funds Assistance Grants $ -$ -$ -$ -$ - 8,560 390,649 93 96 38 3 40,464 2,699 5,522 431,206 8,656 2,737 5,525 980,025 980,025 (548,819) 8,656 2,737 5,525 500,000 500,000 [48,819) 8,656 2,737 5,525 154,132 17,317 98 8,703 $ 105,313 $ 25,973 $ 98 $ 11,440 $ 5,525 See independent auditor's report on the financial statements. 77 Animal Shelter Donations Totals $ -$ 580,766 75,000 851,416 469,766 5,300 1,528 22,421 110,606 110,606 77,763 187,134 2,118,038 1,718,877 223,912 145,187 347,442 86,832 751,068 145,187 3,128,131 41,947 (1,010,093) 1,310,983 1.310.983 41,947 300,890 331,201 2,512,449 $373,148 $2,813,339 ASSETS Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable Total liabilities Fund balances Committed Total liabilities and fund balances CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR PERMANENT FUNDS December31, 2017 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Total $ 493,866 $ 2,029 ~$----=5::.:..:,7~9~8 $ 501,693 $ 493,866 $ 2,029 .;;..$ _ _.;;5;.:..;,7~9.;;..8 $ 501,693 493,866 2,029 5,798 501,693 $ 493,866 $ 2.029 .... $ __ 5_.7_9_8 $ 501,693 See independent auditor's report on the financial statements. 78 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR PERMANENT FUNDS For the Year Ended December 31, 2017 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Revenues Charges for services $ 10,619 $ -$ Investment revenue 1,798 8 Total revenues 12,417 8 Expenditures Miscellaneous 35 Total expenditures 35 Net change in fund balance 12,382 8 Fund balances -beginning of year 481,484 2,021 Fund balances -end of year $ 493,866 $ 2,029 $ See independent auditor's report on the financial statements. 79 - 22 22 22 5,776 5,798 Total $ 10,619 1,828 12,447 35 35 12,412 489,281 $ 501,693 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) BICENTENNIAL CENTER FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Investment revenue $ 12,513 $ -$ Total revenues 12,513 Expenditures Culture and recreation 738,507 750,000 Total expenditures 738,507 750,000 Excess [deficiency] of revenues over [under] expenditures [725,994) [750,000) Other financing sources [uses] Transfers in 742,633 720,000 Total other financing sources [uses] 742,633 720,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 16,639 [30,000] Unreserved fund balance, January 1 41,341 214,254 Unreserved fund balance/GMP fund balance December 31 $ 57,980 $ 184,254 $ See independent auditor's report on the financial statements. 80 Final - 750,000 750,000 [750,000] 720,000 720,000 [30,000) 214,254 184,254 Variance with Final Budget Positive [Negative] $ 12,513 12,513 11,493 11,493 24,006 22,633 22,633 46,639 [172,913) $ [126,274) Revenues CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) BUSINESS IMPROVEMENT DISTRICT FUND For the Year Ended December 31, 2017 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative) Charges for services Investment revenue $ 77,493 $ 47 89,175 $ 15 89,175 $ 15 [11,682) 32 Total revenues Expenditures Planning and development Total expenditures Excess [deficiency) of revenues over [under] expenditures Unreserved fund balance, January 1 Unreserved fund balance, December 31 Reconciliation to GAAP Accounts receivable GAAP Fund Balance, December 31 $ 77,540 89,190 72,197 89,175 72,197 89,175 5,343 15 7,961 4,754 13,304 $ 4,769 $ 2,864 16,168 See independent auditor's report on the financial statements. 81 89,190 [11,650] 89,175 16,978 89,175 16,978 15 5,328 4,754 3,207 4,769 .... $ __ 8 ..... 5_3_5 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) NEIGHBORHOOD PARK FUND Revenues Licenses and permits Investment revenue Total revenues Expenditures Capital outlay Total expenditures Excess [deficiency] of revenues over [under] expenditures Unreserved fund balance, January 1 Prior year cancelled encumbrances For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final $ 5,300 $ 10,000 $ 10,000 94 500 500 5,394 10,500 10,500 32,139 95,073 95,073 32,139 95,073 95,073 (26,745] (84,573] (84,573] 48,344 84,573 84,573 Variance with Final Budget Positive [Negative] $ [4,700] (406] (5,106] 62,934 62,934 57,828 [36,229] Unreserved fund balance, December 31 21,599 _$_____ _$_____ _$ __ 2_1 ..... 5_9_9 Reconciliation to GAAP Current year encumbrances GAAP Fund Balance, December 31 $ 21,599 See independent auditor's report on the financial statements. 82 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL PARKS AND RECREATION FUND For the Year Ended December 31, 2017 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative) Revenues Intergovernmental Investment revenue $ 202,255 $ 642 190,082 $ 4,000 190,082 $ 4,000 12,173 [3,358) Total revenues Expenditures Capital outlay Total expenditures Excess [deficiency) of revenues over [under] expenditures Other financing sources [uses] Transfers [out] Total other financing sources [uses] Excess [deficiency) of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January 1 Prior year cancelled encumbrances Unreserved fund balance, December 31 Reconciliation to GAAP Current year encumbrances GAAP Fund Balance, December 31 $ 202,897 194,082 194,000 194,000 194,000 194,000 8,897 82 8,897 82 104,904 51,169 10,420 124,221 $ 51,251 $ 124,221 See independent auditor's report on the financial statements. 83 194,082 8,815 194,000 194,000 82 8,815 82 8,815 51,169 53,735 10,420 51,251 ~$ __ 7.;..;;2;.:.;,9;.;.7~0 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL ALCOHOL FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Intergovernmental $ 202,255 $ 216,086 $ Investment revenue 30 Total revenues 202,285 216,086 Expenditures Public health and sanitation 202,255 216,086 Total expenditures 202,255 216,086 Excess [deficiency] of revenues over [under] expenditures 30 Unreserved fund balance, January 1 134 Unreserved fund balance/GAAP fund balance December 31 $ 164 $ -$ See independent auditor's report on the financial statements. 84 Final 216,086 216,086 216,086 216,086 - Variance with Final Budget Positive [Negative] $ [13,831] 30 [13,801 J 13,831 13,831 30 134 $ 164 Revenues Taxes Investment revenue Total revenues Expenditures Capital outlay Total expenditures CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX ECONOMIC DEVELOPMENT FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final $ 335,247 $ 649,849 $ 649,849 4,060 5,000 5,000 339,307 654,849 654,849 441,606 1,474,000 1,474,000 441,606 1,474,000 1,474,000 Excess [deficiency] of revenues over [under] expenditures [102,299] [819, 151] Unreserved fund balance, January 1 1,104,402 869,281 Unreserved fund balance/GAAP fund balance December 31 $ 1,002,103 $ 50,130 $ See independent auditor's report on the financial statements. 85 [819,151] 869,281 50,130 Variance with Final Budget Positive [Negative] $ [314,602] (940) (315,542) 1,032,394 1,032,394 716,852 235,121 $ 951,973 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) ARTS & HUMANITIES FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 390,649 $ 480,350 $ Investment revenue 93 2,000 Miscellaneous 40,464 500 Total revenues 431,206 482,850 Expenditures Culture and recreation 980,025 1,016,988 Total expenditures 980,025 1,016,988 Excess [deficiency] of revenues over [under] expenditures [548,819] [534,138] Other financing sources [uses] Transfers in 500,000 500,000 Transfers [out] Total other financing sources [uses] 500,000 500,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] (48,819] [34, 138] Unreserved fund balance, January 1 154,132 138,327 Unreserved fund balance/GAAP fund balance December 31 $ 105,313 $ 104, 189 $ See independent auditor's report on the financial statements. 86 Final 480,350 2,000 500 482,850 1,016,988 1,016,988 [534,138] 500,000 500,000 [34,138] 138,327 104,189 Variance with Final Budget Positive [Negative] $ [89,701] [1,907] 39,964 (51,644] 36,963 36,963 (14,681] (14,681] 15,805 $ 1,124 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) DEBT SERVICE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Taxes Real estate taxes $ 2,433,770 $ 2,691,197 Delinquent taxes 52,896 55,000 Motor vehicle taxes 374,874 365,992 Special assessments 1,538,904 1,635,000 Investment revenue 17, 102 2,500 Miscellaneous 75,000 Total revenues 4,417,546 4,824,689 Expenditures Debt Service Principal retirement 4,907,918 5,157,920 Interest and other charges 1,490,423 2,086,687 Total expenditures 6,398,341 7!244,607 Excess [deficiency] of revenues over [under] expenditures [1,980,795] [2,419,918] Other financing sources [uses] Issuance of bonds 1,000 Premium on bonds 16,751 Transfers in 2,241,309 2,000,000 Total other financing sources [uses] 2,259,060 2,000,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 278,265 [419,918] Unreserved fund balance, January 1 1,184,289 419,918 Unreserved fund balance December 31 1,462,554 $ - Reconciliation to GAAP Taxes receivable 2,521,302 Deferred revenue [2,473,993] GAAP Fund Balance, December 31 $ 1,509,863 See independent auditor's report on the financial statements. 87 Final $ 2,691, 197 55,000 365,992 1,635,000 2,500 75,000 4,824,689 5,157,920 2,086,687 7,244,607 [2,419,918) 2,000,000 2,000,000 [419,918] 419,918 $ - Variance with Final Budget Positive [Negative] $ [257,427] [2,104] 8,882 [96,096] 14,602 [Z5,000J [407,143) 250,002 596,264 846,266 439,123 1,000 16,751 241,309 259,060 698,183 764,371 $ 1,462,554 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) SOLID WASTE DISPOSAL FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 3,160,158 $ 2,047,479 Investment revenue 14,079 4,000 Miscellaneous 20,552 49,310 Total revenues 3,194,789 2,100,789 Expenditures Public works 1,449,639 1,678,330 Total expenditures 1,449,639 1,678,330 Excess [deficiency] of revenues over [under] expenditures 1,745,150 422,459 Other financing sources [uses] Transfers [out] (905,000] (707,000] Total other financing sources [uses] (905,000] [707,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 840,150 [284,541] Unreserved fund balances, January 1 3,040,780 2,090,260 Unreserved fund balances, December 31 $ 3,880,930 $ 1,805,719 See independent auditor's report on the financial statements. 88 Final $ 2,047,479 4,000 49,310 2,100,789 1,678,330 1,678,330 422,459 [707,000] (707,000] [284,541] 2,090,260 $ 1,805,719 Variance with Final Budget Positive [Negative] $ 1, 112,679 10,079 (28,758] 1,094,000 228,691 228,691 1,322,691 (198,000] (198,000] 1,124,691 950,520 $ 2,075,211 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) WATER AND SEWER FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 19,663,406 $ 19,625,000 Investment revenue 61,765 25,000 Miscellaneous 5,522 10,000 Total revenues 19,730,693 19,660,000 Expenditures Public works 12,243,703 12,831,419 Total expenditures 12,243,703 12,831,419 Excess [deficiency] of revenues over [under] expenditures 7,486,990 6,828,581 Other financing sources [uses] Transfers in 122,200 Transfers [out] [5,649,625] [8,770,000] Total other financing sources [uses] [5,649,625] (8,647,800] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 1,837,365 [1,819,219] Unreserved fund balances, January 1 9,229,332 7,746,266 Prior year cancelled encumbrances 234,904 Unreserved fund balances, December 31 $ 11,301,601 $ 5,927,047 See independent auditor's report on the financial statements. 89 Final $ 19,625,000 25,000 10,000 19,660,000 12,831,419 12,831,419 6,828,581 122,200 [8,770,000] (8,647,800] [1,819,219] 7,746,266 $ 5,927,047 Variance with Final Budget Positive [Negative] $ 38,406 36,765 [4,478] 70,693 587,716 587,716 658,409 [122,200] 3,120,375 2,998,175 3,656,584 1,483,066 234,904 $ 5,374,554 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) SANITATION FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Charges for services $ 2,826,962 $ 2,913,179 $ 2,913,179 Investment revenue 5,793 Total revenues 2,832,755 2,913,179 2,913,179 Expenditures Public works 1,953,277 1,934,016 1,934,016 Total expenditures 1,953,277 1,934,016 1,934,016 Excess [deficiency] of revenues over [under] expenditures 879,478 979,163 979,163 Other financing sources [uses] Transfers [out] [376,500] [996,500) [996,500) Total other financing sources [uses) [376,500) [996,500) [996,500) Excess [deficiency] of revenues and other sources over [under) expenditures and other [uses] 502,978 [17,337] [17,337) Unreserved fund balance, January 1 1,041,379 1,041,560 1,041,560 Unreserved fund balances, December 31 $ 1,544,357 $ 1,024,223 $ 1,024,223 See independent auditor's report on the financial statements. 90 Variance with Final Budget Positive [Negative] $ [86,217] 5,793 [80,424} [19,261} [19,261} [99,685] 620,000 620,000 520,315 [181] $ 520,134 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) GOLF COURSE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 798,369 $ 823,950 $ Investment revenue 344 Miscellaneous 75,470 50,000 Total revenues 874,183 873,950 Expenditures Recreation 858,129 818,064 Total expenditures 858,129 818,064 Excess [deficiency] of revenues over [under] expenditures 16,054 55,886 Other financing sources [uses] Transfers [out] [83,289] Total other financing sources [uses] [83,289] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 16,054 [27,403] Unreserved fund balance, January 1 99,978 239,979 Unreserved fund balances, December 31 $ 116,032 $ 212,576 $ See independent auditor's report on the financial statements. 91 Final 823,950 50,000 873,950 818,064 818,064 55,886 (83,289) [83,289) [27,403] 239,979 212,576 Variance with Final Budget Positive [Negative] $ [25,581] 344 25,470 233 [40,065) [40,065) [39,832] 83,289 83,289 43,457 [140,001) $ [96,544) CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) WORKERS' COMPENSATION RESERVE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 298,628 $ 311,337 $ Investment revenue 3,080 2,500 Miscellaneous 2,197 Total revenues 303,905 313,837 Expenditures General government 389,412 709,667 Total expenditures 389,412 709,667 Excess [deficiency] of revenues over [under] expenditures [85,507] [395,830) Unreserved fund balance, January 1 1,004,882 844,976 Unreserved fund balances, December 31 $ 919,375 $ 449,146 $ See independent auditor's report on the financial statements. 92 Final 311,337 2,500 313,837 709,667 709,667 [395,830) 844,976 449,146 Variance with Final Budget Positive [Negative] $ [12,709] 580 2,197 (9,932] 320,255 320,255 310,323 159,906 $ 470,229 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) HEAL TH INSURANCE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Charges for services $ 6,809,860 $ 7,044,200 $ 7,044,200 Investment revenue 10,586 5,000 5,000 Miscellaneous 32,507 5,000 5,000 Total revenues 6,852,953 7,054,200 7,054,200 Expenditures General government 6,402,325 6,995,644 6,995,644 Total expenditures 6,402,325 6,995,644 6,995,644 Excess [deficiency) of revenues over [under] expenditures 450,628 58,556 58,556 Unreserved fund balance, January 1 1,600,344 1,294,000 1,294,000 Unreserved fund balances, December 31 $ 2,050,972 $ 1,352,556 $ 1,352,556 See independent auditor's report on the financial statements. 93 Variance with Final Budget Positive [Negative] $ [234,340) 5,586 27,507 [201,247] 593,319 593,319 392,072 306,344 $ 698,416 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) CENTRAL GARAGE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Charges for services $ 1,215,447 $ -$ - Investment revenue 40 40 Miscellaneous 6,481 17,500 17,500 Total revenues 1,221,928 17,540 17,540 Expenditures General government 1,311,755 1,757,484 1,757,484 Total expenditures 1,311,755 1,757,484 1,757,484 Excess [deficiency] of revenues over [under] expenditures [89,827) [1,739,944] [1,739,944] Other financing sources [uses] Transfers in 130,000 1,730,000 Transfers [out] [10,000] Total other financing sources [uses) 130,000 1,720,000 Excess [deficiency] of revenues and other sources over [under) expenditures and other [uses] 40,173 (19,944) Unreserved fund balance, January 1 [18,578) 165,078 Unreserved fund balance, December 31 $ 21,595 $ 145,134 $ See independent auditor's report on the financial statements. 94 1,730,000 [10,000] 1,720,000 (19,944) 165,078 145,134 Variance with Final Budget Positive [Negative] $ 1,215,447 [40] [11,019] 1,204,388 445,729 445,729 1,650,117 [1,600,000) 10,000 [1,590,000) 60,117 [183,656] $ [123,539) CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one agency to other departments or agencies of the government and to other governmental units on a cost reimbursement basis. Workers' compensation reserve fund -To account for the costs of providing a partially self-insured workers' compensation plan and for accumulating the necessary reserve amounts. Health insurance fund -To account for the costs of providing a partially self-insured health insurance and for accumulating the necessary reserve amounts. Central garage fund -To account for the accumulation and allocation for costs associated with the City's centralized vehicle repair shop. 95 CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December31, 2017 Workers' Compensation Health ASSETS Reserve Insurance Current assets: Cash and investments $ 919,455 $ 2,084,615 Inventory and prepaid supplies Total current assets 919,455 2,084,615 Capital assets: Capital assets Less: accumulated depreciation Total capital assets Total assets 919,455 2,084,615 Deferred outflows of resources: Pension deferred outflows of resources Total deferred outflows of resources Total assets and deferred outflows of resources $ 919,455 $ 2,084,615 Liabilities: Current liabilities (payable from current assets): Accounts payable $ 80 $ 33,642 Current portion of compensated absences payable Current portion of accrued claims payable 177,141 395,691 Total current liabilities (payable from current assets) 177,221 429,333 Noncurrent liabilities: Compensated absences payable Accrued claims payable 44,772 Net pension liability Total noncurrent liabilities 44,772 Total liabilities 221,993 429,333 Deferred inflows of resources Pension deferred inflows of resources Total deferred inflows of resources Total liabilities and deferred inflows of resources $ 221,993 $ 429,333 Net Position Invested in capital assets, net of related debt $ -$ - Unrestricted 697,462 1,655,282 Total net position $ 697,462 $1,655,282 See independent auditor's report on the financial statements. 96 Total Internal Central Service Garage Funds $ 45,763 $ 3,049,833 165,125 165, 125 210,888 3,214,958 184,326 184,326 160,966 160,966 23,360 23,360 234,248 3,238,318 31,240 31,240 31,240 31,240 $265,488 $ 3,269,558 $ 24,168 $ 57,890 28,707 28,707 572,832 52,875 659,429 24,863 24,863 44,772 165,559 165,559 190,422 235,194 243,297 894,623 11,338 11,338 11,338 11,338 $254,635 $ 905,961 $ 23,360 $ 23,360 [12,50ZJ 2,340,237 $ 10,853 $ 2,363,597 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUND For the Year Ended December 31, 2017 Workers' Compensation Health Central Reserve Insurance Garage Operating revenues Charges for services $ 298,628 $ 6,809,860 $ 1,215,447 Miscellaneous 2,197 32,507 6,482 Total operating revenues 300,825 6,842,367 1,221,929 Operating expenses General government 356,171 6,503,682 1,349,966 Depreciation 9,260 Total operating expenses 356,171 6,503,682 1,359,226 Operating income [loss] [55,346) 338,685 [137,297) Nonoperating revenues [expenses] Investment revenue 3,080 10,586 Gain/[loss] on disposal of fixed assets [4,044] Total other operating revenues [expenses) 3,080 10,586 [4,044] Income [loss] before transfers [52,266) 349,271 [141,341) Transfers from [to] other funds Transfers in 130,000 Transfers [out] Total transfers 130,000 Change in net position [52,266] 349,271 [11,341] Net position, January 1 749,728 1,306,011 22,194 Net position, December 31 $ 697,462 $ 1,655,282 $ 10,853 See independent auditor's report on the financial statements. 97 Total Internal Service Funds $ 8,323,935 41,186 8,365,121 8,209,819 9,260 8,219,079 146,042 13,666 [4,044] 9,622 155,664 130,000 130,000 285,664 2,077,933 $ 2,363,597 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2017 Workers' Compensation Health Reserve Insurance Cash flows from operating activities Cash received from customers and users $ 265,387 $6,911,218 Cash paid to suppliers of goods or services [356,091) (6,470,040) Cash paid to employees Other operating receipts 2,197 32,507 Net cash provided by [used in] operating activities (88,507] 473,685 Cash flows from investing activities Interest received 3,080 10,586 Cash flows from capital and related financing activities Proceeds from sale of capital assets Net cash provided by [used in] capital Cash flows from noncapital financing activities Transfers in Transfers [out] Net cash provided by (used in] noncapital financing activities Net increase (decrease] in cash and cash equivalents [85,427] 484,271 Cash and cash equivalents, January 1 1,004,882 1,600,344 Cash and cash equivalents, December 31 $ 919,455 $ 2,084,615 See independent auditor's report on the financial statements. 98 Total Internal Central Service Garage Funds $1,215,448 $ 8,392,053 (1,049,688) [7,875,819) [275,772) (275,772) 6,481 41,185 (103,531) 281,647 13,666 130,000 130,000 130,000 130,000 26,469 425,313 19,294 2,624,520 $ 45,763 $3,049,833 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS (Continued) For the Year Ended December 31, 2017 Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Workers' Compensation Health Central Reserve Insurance Garage Total Internal Service Funds Operating income [loss] $ [55,346] $ 338,685 $ [137,297] $146,042 Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense [Increase] decrease in inventory [Increase] decrease in deferred outflows Increase [decrease] in accounts payable Increase [decrease] in accrued compensated absences Increase [decrease] in net pension liability Increase [decrease] in claims payable Increase [decrease] in deferred inflows Net cash provided by [used in] operating activities $ 80 33,642 [33,241) 101,358 [88,50!) $473,685 See independent auditor's report on the financial statements. 99 9,260 9,260 24,761 24,761 [1,162) [1, 162) [13,704] 20,018 14,065 14,065 [234] [234) 68,117 780 780 $ [103,531J $281,647 CITY OF SALINA, KANSAS AGENCY FUNDS Agency funds are used to account for assets held by the government as an agent for individuals, private organizations, other governments and/or other funds. Special assessment escrow agency fund -To account for property owners' prepayment on outstanding special assessments. Fire insurance proceeds agency fund -To account for insurance proceeds received for severely damaged buildings the insurance proceeds, plus interest, are returned to the property owners when the buildings are repaired or demolished. Payroll clearing agency fund -To account for interfund payroll receivables and payables for all City funds. Court bond and restitution agency fund -To account for bonds and restitution remitted to the court and awaiting court orders for distribution. Police investigation account agency fund -To account for monies held by the police department for use in investigations. Citizenship agency fund -To account for donations received and used for the citizenship fund. Section 125 plan agency fund -To account for monies held for the Section 125 plan. DTF federal forfeiture fund -To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they related to federal cases. Expenses are limited to equipment and training for the Drug Task Force. DTF local fund -To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they relate to local cases. Expenses are limited to equipment and training for the Drug Task Force. DTF reserve fund -To account for revenues and expenditures related to State of Kansas Drug Tax Distributions. Expenses are limited to equipment and training for the Drug Task Force. Beechcraft remediation settlement fund -To account for revenues and expenditures related to the bankruptcy of Beechcraft and the former Schilling Airforce Base remediation case. Bail bond escrow fund -To account for funds being held in escrow for bonds issued by Municipal Court. 100 Special Assessment ~ ASSETS: Cash and investments $ 90,849 Total assets $ 90,849 LIABILITIES: Accounts payable $ 90,849 Total liabilities s 90,849 CITY OF SALINA. KANSAS COMBINING BAl.ANCE SHEET AGENCY FUNDS December 31, 2017 Fire Court Police Section DTF Insurance Payroll Bond and lnvesbgabon 125 Federal ~ Qfmiog ~ ~ ~ flfill ~ $ 18,869 $ [365,473] $ 23,818 ~ $ 94,580 $291,014 $ 3,696 ~ $ 18,869 $18,869 $ [365,473] $ 23,818 L..2.fil $ 94,580 ~ $ 3,696 $ [365,4731 s 23,818 ~ $ 94,580 $291,014 $ 3,696 $ [365,473] $ 23,818 $ 3,379 $ 94,580 $291,014 s 3,696 See Independent aud1to(s report on the financial statements. 101 Beechcralt Bail DTF DTF Remedition Bond l.l!!Ol! Bw!Yl! ~ fw2n'. ~ $47,216 $26,299 $ 154,181 $1,127 $389,555 $47,216 ~ $ 154,181 $1,127 $389,555 $47,216 $26,299 $ 154,181 $1,127 $389,555 $47,216 $26,299 $ 154,181 $1,127 $389,555 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended December 31, 2017 Balance December 31, 2016 Additions Deductions Cash and investments Special Assessment Escrow $ 80,917 $ 9,932 $ Fire Insurance Proceeds 63 54,045 Payroll Clearing (320,981) Court Bond and Restitution 34,525 Police Investigation Account 3,378 1 Citizenship Trust 24,874 126,501 Section 125 Plan Fund 290,772 348,638 DTF Federal Forfeiture 7 11,963 DTF Local 101,926 DTF Reserve 33,299 Beechcraft Remediation Settlement 153,614 567 Bail Bond Escrow 1,124 3 Total Assets $ 268,293 $ 686,875 $ Accounts Payable Special Assessment Escrow $ 80,917 $ 9,932 $ Fire Insurance Proceeds 63 54,045 Payroll Clearing (320,981) Court Bond and Restitution 34,525 Police Investigation Account 3,378 1 Citizenship Trust 24,874 126,501 Section 125 Plan Fund 290,772 348,638 DTF Federal Forfeiture 7 11,963 DTF Local 101,926 DTF Reserve 33,299 Beechcraft Remediation Settlement 153,614 567 Bail Bond Escrow 1,124 3 Total liabilities $ 268,293 $ 686,875 $ See independent auditor's report on the financial statements. 102 - 35,239 44,492 10,707 56,795 348,396 8,274 54,710 7,000 565,613 - 35,239 44,492 10,707 56,795 348,396 8,274 54,710 7,000 565,613 Balance December 31, 2017 $ 90,849 18,869 (365,473] 23,818 3,379 94,580 291,014 3,696 47,216 26,299 154,181 1,127 $ 389,555 $ 90,849 18,869 (365,473] 23,818 3,379 94,580 291,014 3,696 47,216 26,299 154,181 1,127 $ 389,555 STATISTICAL SECTION Schedule 1 City of Salina, Kansas Net-by"-"' Last Ten Fiscal Y98"1 (acaua/ ..... of o=untlng) (lnOOO'a) FlscalYew = = = ~ = = '1Q11 = W§ = Amounl % Amounl % Amounl % Amounl % Amount % Amounl % Amounl % Amounl % Amount % Amounl " Govemmentelactlvlties Net lnveatmenl In capllal ...... $118,965 93% $101,974 65% $113.001 96% $109,289 93% $112,929 94% $118,'85 90% $ 115,589 90% s 130,401 122% $124,635 108% $129,921 105% Resb'icted 1,212 1% 1,174 1% 968 1% 1,712 t% 1,082 1% 1.210 1% 616 1% 1,224 1% 1,738 1% 2.012 2% Unresbicted ~ 6% 16706 14% ~ 3% ~ 5% ~ 5% ~ 9% ~ 9% ~ -23% --11.MW -9% __J!!.mJ -1% Total governmental ectMtiea nelpodlon $121922 100% !119854 100% $111191 100"4 $111,334 100"4 $119 522 100% $129423 100% s 127.878 100% $ 106,103 100% ! 115868 100% ! 123,701 100% BU-...,.,,.- Net lnveatment In capital ...... s 4!1,931 19% s "48,234 79% s "48,078 75% ! 44,227 63% s 50,857 69% s 57,103 15% s 61,721 75% $ 68,107 80% s 62,427 11% s 63,316 7t% Restricted 1,211 2% 1,553 3% 1,553 2% 1,553 2% 1,553 2% 1,553 2% 1,512 2% 1,512 2% 1,512 2% 1,512 2% Unrestricted _llJ!! 19% ......!1.fil 19% 1"4 306 22% 24 528 35% 21450 29% 17 794 23% ~ 24% --1M.1Q 18% 23621 27% ~ 27% Total bumeu-type ac:tMHea net poslUon s 58,339 100% ! 61,269 100"4 s 63937 100% s 70,308 100% s 73,860 100% ~ 100% s 82.778 100% s 85 229 100% s 87,580 100% ~ 100% Pitnarygovemment Net lnveatmenl In capflal ...... s 164,896 69% $150,208 63% $161,080 69% $153,516 62% $163,786 85% $173,688 64% s 177,311 64% s 198,508 103% s 187,062 92% s 193,237 91% Restricted 2,"423 1% 2,727 2% 2,541 1% 3.216 2% 2,635 1% 2,763 1% 2.368 1% 2,736 1% 3,250 2% 3,524 2% Unreatrtcted 18942 10% 28188 16% ~ 10% 30867 16% 26961 14% 29422 14% 30959 15% ---1!!J.W -5% ~ "" 16023 8% TOia! primary povemment nel ill2!. 100% $18t 123 t00% $t817M 100% $187599 100% $193 382 ,,.,. .... 100% $205 813 100% s 210658 100% $ 191 932 100% s 203,428 100% $ 212 784 100% Source· City of Salina Cofr1>rehenslve AMual Flnandal Reports, 2008 ·2017 103 Expanses Governmental activities: General government Public safety Public works Public health and sanitation Culture and recreation Planning and development Interest on long term debt Total governmental activities expenses Business-type activities: Solid waste disposal Water and sewer Sanitation Go~course Total business-type activities expenses Total primary government expenses Program Revenues Governmental activities: Charges for services General government Public safely Public works Public health and sanitabon Culture and recreation Planning and development Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business-type activities: Charges for services Solid waste disposal Water and sewer Sanitation Golf course Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues Net (Expense) Revenue Governmental activities Business-type activrties Total primary government net expense Schedule2 Oty of Sa.1na, Kansas Olanges in Net Position Last Ten F"iscal Years (accrual basis of accounting) fin OOO's) Fiscal Year ~ 2QQ2 ~ ~ ZQ.11 ZQl1 ~ ~ 2lli ~ $ 6,791 $ 14,664 $ 10,845 $ 13,614 $ 11,278 $ 10,978 12,550 $ 10,743 $ 9,188 $ 9,780 18,440 16,539 18,592 18,579 19,066 19,649 20,208 21,084 22,232 23,120 9,706 9,781 9,782 9,858 10,957 11,064 11,401 9,049 9,773 10,345 1,310 1,390 1,365 1,368 1,383 1,369 347 995 1,095 1,126 5,582 5,397 8,572 6,693 5,338 4,809 5,156 6,517 6,612 6,880 3,481 3,375 3,716 3,450 3,362 3,399 3,236 1,915 2,047 1,835 ~ ---~ ___1MQ. ----1.W. ~ ---1&11 ----1.ill. ~ ~ 46764 ~ 55,128 55,212 53,298 53,221 54 715 52,077 53,918 _M.fil 2,008 2,287 3,010 2,945 2,067 3,532 1,870 1,766 2,335 2,365 13,284 12,995 14,050 13,597 14,897 15,418 14,904 11,712 14,807 15,650 2,184 2,224 2,261 2,261 2,441 2,237 2,399 1,909 2,043 2,178 ~ ______J!2! ____!!11 ~ ~ ~ _____M1 _.fil _____m_ ~ 18,360 18403 20,138 19,628 20,128 21,955 20,016 16,208 19977 21,045 $ 65,124 $ 69,549 $ 751266 $ 741840 $ 73A26 $ 75,176 $ 74,731 $ 68,285 $ 731895 $ 751856 $ 4,581 $ 4,599 $ 5,143 6,106 $ 6,328 $ 5,548 $ 5,662 $ 3,151 $ 3,134 $ 3,470 3,588 2,913 3,969 3,766 4,290 4,656 4,222 4,600 4,891 4,601 120 164 198 262 306 277 255 193 238 348 39 42 37 43 46 34 46 46 44 50 2,139 1,936 2,817 3,140 1,728 1,466 1,533 1,501 1,638 1,541 240 267 144 153 158 161 167 73 140 91 3,752 3,163 3,415 2,907 4,495 4,200 4,015 3,394 4,332 4,541 ---------~ ---14,458 13,084 15,723 16,377 ~ 16,342 15,900 12,958 ~ 14,642 2,749 2,903 2,853 2,904 3,137 3,138 3,024 2,519 2,795 3,165 14,073 14,980 16,520 17,904 19,099 17,938 18,742 19,059 19,322 19,855 2,172 2,292 2,310 2,334 2,462 2,514 2,553 2,529 2,751 2,885 751 757 736 636 783 719 811 820 789 798 202 ____MQi ~ _11£ 19744 20,932 22.419 27,784 25,755 24,309 25,245 24,927 25,657 26,703 s 34,202 $ 34,016 s 38,142 $ 44161 $ 43,106 $ 40,651 $ 41i145 $ 371885 s 40,807 $ 41,345 $ (32,306) $ (38,062) $ (39,405) $ (38,835) $ (35,947) $ (36,879) $ (38,815) $ (39,119) $ (38,768) $ (40,169) ~ ~ ----1.lli. ~ -2.fil ~ ~ __fil!!!. ~ ~ $ (30,922) $ (35,533) $ (37,124) $ (30,679) $ (30,320) $ (34,525) $ (33,586) $ (30,400) $ (33,088) $ (34,511) General Revenues and Other Changes In Nat Position Governmental activities: TSJ<es Properly laxes, general purpose Properly taxes, debt service Motor vehicle taxes Sales lax, general purpose Selective sales lax Other taxes Investment revenues Miscellaneous Transfers, net Total governmental activities Business-type activities: Investment revenues Miscellaneous Reimbursements Transfers, net Total business-type activities Total primary government Change In Nat Posl!lon Governmental activities Business-type activities Total primary government 7,818 1,529 1,195 11,986 2,589 5,747 805 812 __ 6_0 $ 9,019 1,711 1,135 11,669 3,380 5,791 277 505 ~ 33,742 $ 7,803 2,230 1,145 11,118 4,108 6,298 81 565 ___ 9_2 33,440 $ 7,783 $ 8,272 2,779 2,439 1,150 1,153 11,767 12,165 4,080 4,210 6,390 6,486 77 66 872 660 ~ __ 3_0 35,097 35,481 $ 8,031 $ 8,315 $ 8,242 8,196 $ 9,101 2,362 2,578 2,766 3,022 2,487 1,200 1,250 1,312 1,370 1,372 12,260 12,689 12,931 12,781 12,906 4,281 4,461 4,558 4,901 8,832 6,630 7,231 7,363 7,991 6,900 67 98 86 148 92 9,918 1,160 2,371 5,842 2,003 ~ ___ 1 ~ 3,600 ~ 45,748 37,783 ~ 471851 ~ 300 242 67 84 79 49 51 56 78 129 118 352 341 330 434 279 97 103 180 132 79 ______@) ~ _fill _ilfil!) _____QQ) ____filQ) ----_Q,ill) ~ __fil§D -----12!!. ~ __11§. _fil ~ ___Jill) ~ ~ --1MW ~ $ 32,898 $ 341081 $ 33,756 $ 351312 $ 351964 $ 451126 $ 38,111 $ 39,855 $ 44,427 $ 43,867 $ 234 $ (4,320) $ (5,965) $ (3,738) $ (466) $ 8,869 $ (1,032) $ 4,329 $ 9,083 $ 7,833 ~ ----1&§§. ~ ___!.ill ___fil!Q_ ----1.m. ~ ~ ~ ~ $ 1,976 ~ $ (3,368) $ 4,633 $ 5,644 $ 10,601 $ 4,525 $ 9,455 $ 11,339 $ 91356 Source: City of Sanna Comprehensive Annual Financial Reports, 2008 -2017 104 Schedule 3 City of Salina, Kansas Fund Balances, Governmental Funds Las!Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2011 2008 2009 2010 !Note 11 2012 2013 2014 2015 2016 2017 General Fund Reserved $ 274 $ 508 $ 99 $ $ $ $ $ $ $ Nonspendable 90 116 81 107 111 131 153 Restricted Committed Assigned 293 540 331 239 199 136 214 Unreserved/unassigned ~ ~ ~ ~ ~ ~ ~ ~ 4 765 6,516 Total general fund ~ ~ 3,617 $ 3,837 $ 3,828 $ 3,550 ~ $ 4,840 $ 5,032 $ 6,883 Restatement ~ Restated fund balance !.....1.ill. All other,govemmental funds Reserved $ 3,951 $ 11,092 $ 6,413 $ $ $ $ $ $ $ Nonspendable Restricted 3,611 3,319 3,446 2,910 2,793 3,142 4,191 Committed 127 (516) 7,486 9,886 8,695 14,284 10,072 Assigned 4,323 4,087 3,146 1,280 619 1,043 641 Unreserved/unassigned ~ ~ ~ --(10,537) (6,823) (28) ------ Total all other governmental funds ~ $ 15,116 ~~ ~ !....!1:lli. $ 14,076 $ 1,570 $ 11,646 $ 14,876 Note 1: Prior year amounts have not been restated for the implementation of GASB Statement 54 in fiscal year 2011. Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 105 Schedule4 City of Salina, Kansas Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Revenues Taxes (see Schedule 5) $ 30,788 $ 32,706 $ 32,702 $ 33,949 $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41,597 Intergovernmental 3,741 3,153 3,404 2,901 4,487 4,192 4,008 3,385 4,325 4,536 Special assessments 1,178 1,269 1,385 1,535 2,315 1,706 1,810 1,679 1,669 1,539 Licenses and permits 10 10 11 6 8 9 7 10 7 6 Charges for services 7,415 6,767 8,934 9,730 8,484 8,536 8,276 6,416 6,953 6,880 Investment revenue 490 210 64 69 47 40 59 47 142 79 Reimbursements 39 140 70 32 36 9,015 123 491 1,406 Donations 241 83 141 111 Miscellaneous 597 ~ ~ 599 537 810 799 1,853 4,315 1,851 Total revenues 44,258 44,693 47,018 48,821 50,638 59,072 51,846 51,135 57,219 56,599 Expenditures General government 3,600 3,007 3,549 3,461 3,574 4,269 3,986 5,342 5,422 5,423 Public safety 17,945 17,883 18,229 18,118 18,564 19,155 19,559 21,268 21,664 21,629 Public works 6,593 6,643 6,634 6,569 7,004 7,220 7,443 5,333 5,778 6,048 Public health and sanitation 1,276 1,353 1,332 1,330 1,343 1,344 319 982 1,078 1,097 Culture and recreation 5,142 4,947 5,777 5,900 4,449 3,939 4,292 5,659 5,817 6,143 Planning and development 3,377 3,269 3,609 3,344 3,256 3,293 3,232 1,910 2,042 1,801 Miscellaneous 32 Capital outlay 10,581 17,707 18,603 9,847 7,327 13,047 11,009 25,527 24,001 18,281 Debt service Principal 2,812 4,667 5,959 4,411 8,592 5,038 5,261 6,250 17,902 5,088 Interest 1,567 1,596 2,258 2,084 2,103 1,867 1,864 1,833 3,152 1,771 Deposit to escrow __!QI 92 Total expenditures 52,892 61,072 66,089 55,064 56,304 59,172 56,965 74104 86,856 67,281 Other financing sources (uses) Bonds and notes issued 7,245 23,695 7,034 6,565 6,150 5,690 5,365 6,825 34,892 11,490 Bond and note premium 80 1,369 47 23 60 185 302 369 1,503 95 Transfers in 2,823 3,617 5,076 7,994 3,488 4,907 3,001 7,642 7,065 8,339 Transfers out (2,763) (3,422) (4,984) (5,692) (3,458) (3,907) (2,999) (3,913) (3,555) (4, 160) Issuance costs Other ~ Total other financing sources (uses) ~ 25,259 ___Lill_ ~ 6,240 ~ 5,669 10,923 39,905 15,764 Net change In fund balance $ (1,250) $ 8,880 $ (11,898) $ 2,803 ~ ~ $ 550 $ (12,046) $ 10,268 $ 5,082 Debt service as a percentage of non-capital expenditures 12% 17% 21% 17% 28% 18% 18% 20% 50% 16% Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 106 Schedule 5 City of Salina, Kansas Tax Revenues by Source, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Real estate $ 9,084 $ 9,971 $ 9,756 $ 10,288 $ 10,466 $ 10, 145 $ 10,657 $ 10,729 $ 10,972 $ 11,377 Delinquent 263 760 278 274 245 248 235 279 246 210 Motor vehicle 1,120 1,135 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 General sales 11,986 11,669 11,117 11,767 12, 165 12,260 12,689 12,931 12,781 12,906 Selective sales 2,589 3,380 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 Other taxes 5,747 5,791 6,298 6,390 6,485 6,630 7,231 7,362 7,991 6,900 Total taxes $ 30,788 $ 32,706 $ 32,702 $ 33,949 $ 34,724 $ 34,764 $ 36,523 $ 37, 171 $ 38,261 $ 41,597 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 107 Schedule 6 City of Salina, Kansas Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Assessed Value Fiscal Estimated Total Assessed (Budget) Total, Excluding Motor Vehicle Total, Taxable Market Value Value to Est. Year Real Estate Personal Prope!:!l State Assessed Motor Vehicles Tax Rate jNote 1l Assessed Value jNote2) Market Value 2006 $ 296,537,399 $ 38,662,356 $ 17,624,030 $ 352,823, 785 23.999 $ 49,367,870 $ 402, 191,655 $ 2,229,131,633 18.04 2007 $ 321,695,326 $ 39,691,690 $ 16,530,171 $ 377,917, 187 23.789 $ 50,551,299 $ 428,468,486 $ 2,416,543, 103 17.73 2008 $ 342,045,389 $ 35,089,042 $ 15,594,056 $ 392,728,487 23.959 $ 50,548,706 $ 443,277, 193 $ 2,612,229,468 16.97 2009 $ 356,678,712 $ 28,373,980 $ 14,929,456 $ 399,982, 148 25.886 $ 51,351,656 $ 451,333,804 $ 2,914,775,730 15.48 2010 $ 358,979,211 $ 24,760,806 $ 13,730,609 $ 397,470,626 25.855 $ 50,330,252 $ 447,800,878 $ 2,893,359,541 15.48 2011 $ 367,750,803 $ 19,918,188 $ 14,685,585 $ 402,354,576 26.022 $ 47,406,062 $ 449,760,638 $ 2,869,531,746 15.67 2012 $ 369,416,422 $ 18,654,394 $ 15,779,466 $ 403,850,282 26.272 $ 47,553,744 $ 451,404,026 $ 2,884,188,981 15.65 2013 $ 370,390,092 $ 17,769,120 $ 16,948,264 $ 405, 107,476 26.927 $ 48,882,411 $ 453,989,887 $ 2,889,385,914 15.71 2014 $ 376,131,346 $ 13,652,885 $ 17,670,147 $ 407,454,378 27.080 $ 48,865,900 $ 456,320,278 $ 2,917,267,724 15.64 2015 $ 381,087,426 $ 12,607,815 $ 18,984,453 $ 412,679,694 27.311 $ 50,350,566 $ 463,030,260 $ 2,957,531,741 15.66 2016 $ 389,872,825 $ 11,653,719 $ 19,323,055 $ 420,849,599 27.603 $ 51,833,505 $ 472,683, 104 $ 3,046,949,034 15.51 2017 $ 391,895,060 $ 11,146,213 $ 19,323,055 $ 422,364,328 27.311 $ 50,970,796 $ 473,335,124 $ 3,097,885,103 15.28 Note 1: The tax rate for motor vehicles Is set based on the average countywide tax rate. The City of Salina then receives a share of that based on tax effort. Note 2: The estimated market value excludes the value of the State assessed properties. Market value Information Is not available for those properties. However, state assessed property Is generally assessed at 33% of market value, except for railroads, which are assessed at 15% of market value. Note 3: The Direct rate Is expressed In dollars per thousand dollars of assessed value. Source: Saline County Clerk 108 Schedule 7 City of Salina, Kansas Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) Cl of Salina Saline Coun USO 305 2 Other 1 Fiscal Debt Total Debt Total Debt Total (Budget) Operating Service City Operating Service County Operating Service USO Year Milla e Milla e Milla e Milla e Milla e Milla e Milla e Milla e Milla e Other Total 2008 20.047 3.912 23.959 27.435 27.435 42.761 12.229 54.990 10.775 117.159 2009 21.749 4.137 25.886 29.347 29.347 46.339 12.208 58.547 10.971 124.751 2010 20.082 5.773 25.855 31.303 31.303 45.341 13.155 58.496 12.401 128.055 2011 19.236 6.786 26.022 31.432 31.432 45.818 13.095 58.913 12.131 128.498 2012 20.326 5.946 26.272 32.576 32.576 47.127 11.693 58.820 11.989 129.657 2013 20.242 5.948 26.190 34.823 34.823 47.133 11.516 58.649 12.135 131.797 2014 20.539 6.388 26.927 37.895 37.895 46.599 11.517 58.116 12.941 135.879 2015 20.692 6.388 27.080 38.047 38.047 44.088 11.517 55.605 13.305 134.037 2016 19.950 7.361 27.311 38.275 38.275 44.465 11.655 56.120 13.293 134.999 2017 21.694 5.909 27.603 37.508 37.508 44.069 11.674 55.743 13.299 134.153 Source: Saline County Treasurer (1) The "Other" column Includes the State of Kansas, the Salina Airport Authority, the Salina Public library and Kansas State Extension District #3. (2) A small portion of Salina is covered by USO 306, USO 307, or USO 400. Total Tax Rates are different In the areas covered by these jurisdictions. 109 Taxpayer Westar Energy (Western Resources) SFC Global Supply Chain, Inc. (Schwan's) RAF Salina, LLC Central Mall Realty Holding LLC Kansas Gas Service Sams Real Estate Business Trust!Walmart Menard Inc. Great Plains Manufacturing Union Pacific Wal-mart Real Estate Business Trust Southwestern Bell S&B Motels Individual Salina Regional Health Center Combined Valuation of the Ten Largest Taxpayers City Valuation Percent of Total City Assessed Valuation Source: Saline County Clerk's Office or recent OS Schedule 8 City of Sahna, Kansas Principal Property Taxpayers Current Year and Ten Years Ago 2007 (2006 Assessed Value) Type of Business Ut1l1ty Pizza Manufacturing Regional Shopping Center Regional Shopping Center Utility Discount Retail Stores Home Improvement Manufacturing Railroad Discount Retail Stores Telephone Utility Motel Residential Hospital and Medical Offices 110 Assessed % of Total Valuation Valuation $ 7,287,074 2.17% 12,382,582 3.69% 9,003,313 2.69% 2,633,187 0.79% 2,308,375 069% 3,627,525 1.08% 4,783,821 1.43% 2,388,908 0.71% 1,913,209 0.57% 5,580,586 1.66% $ 51,908,580 $ 335,262, 182 15.48% Rank 3 1 N/A 2 7 N/A N/A 9 N/A 6 5 8 10 4 2016 (2015 Assessed Value) Assessed %of Valuation Total Rank $ 11,025,004 2.38% 1 7,189,283 1.55% 4 5,106,493 1.10% 2 4,496,340 0.97% 3 3,644,537 0.79% 5 2,526,108 0.55% 6 25,066,064 5.41% 7 2,327,353 0.50% 8 2,288,512 0.49% 9 2,278,951 0.49% 10 $ 65,948,645 $ 463,030,260 14.24% Fiscal Taxes Levied (Budget) for the fiscal Year ~ear 2008 $ 9,409,338 2009 $ 10,354, 161 2010 $ 10,276,905 2011 $ 10,415,491 2012 $ 10,570,420 2013 $ 10,576,448 2014 $ 10,908,147 2015 $ 11,316,065 2016 $ 11,740,993 2017 $ 11,254,398 Schedule 9 City of Salina, Kansas Property Tax Levies and Distributions Last Ten Fiscal Years Current Year Tax Distributions Total Tax Distributions Delinquent Percentage Amount Percenta~e Collections {1 ~ Amount of lev~ $ 9,083,917 96.5% $ 262,511 $ 9,346,428 99.3% $ 9,923,959 95.8% $ 759,764 $ 10,683,723 103.2% $ 9,704,937 94.4% $ 278,656 $ 9,983,593 97.1% $ 10,287,770 98.8% $ 273,843 $ 10,561,613 101.4% $ 10,411,299 98.5% $ 245,086 $ 10,656,385 100.8% $ 10,145,404 95.9% $ 248,184 $ 10,393,588 98.3% $ 10,776,688 98.8% $ 398,820 $ 11, 175,508 102.5% $ 10,460,246 92.4% $ 617,496 $11,077,742 97.9% $ 10,972,299 93.5% $ 245,577 $11,217,876 95.5% $ 11,239,051 99.9% $ 209,950 $ 11,449,001 101.7% (1) Delinquent collections are reported in the aggregate for all previous years. Data is not currently available for "collected in subsequent years" Source: Saline County Treasurer's Office 111 City Direct Tax Rate General Special purpose County-wide Tax Rate Portion of County-wide tax allocated to City (July Percentage) 2008 0.50% Schedule 10 City of Salina, Kansas Direct Sales Rate by Taxing Entity Last Ten Fiscal Years Fiscal Year 2009 2010 2011 0.50% 0.50% 0.50% 0.25% 0.25%/0.4( 0.40% 0.40% 1.00% 1.00% 1.00% 1.00% 62.31% 62.46% 61.58% 63.34% 2012 2013 2014 2015 2016 0.50% 0.50% 0.50% 0.50% 0.50% 0.40% 0.40% 0.40% 0.40% 0.40% 1.00% 1.00% 1.00% 1.00% 1.00% 61.72% 60.86% 60.23% 60.28% 60.28% In addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. In May, 2016, the voters approved an increase in the Special Purpose Tax rate from .40% to .75%, to be effective October 1, 2016. Source: Kansas Department of Revenue 112 2017 0.50% 0.40% 1.00% 60.28% 8chedu•11 Cltyol'Mlna,~ w-.,1 .... b)'ct..olC~r LatTenFi.c.IY-,.., .... 2010 2011 1013 .... 2015 2011 2017 ...... w ... , ...... w .... ...... w ... , ...... w ... , IAccU w ... , ...... w-...... w-...... w ... , . ..... w ... , ··-w ... fbl•CI•• ., ... ""' . , ... .... ..... .... ..... .... ..... .... . , ... .... .... .... .... .... . .... .... ..... .... _, 17.813 ,...,, 17,792 1,CM3774 17,&38 1.127,864 17.899 1,1i4629 17,893 1,225931 ,, .... 989788 18042 1.003,100 ""' 987540 18125 950697 18124 a&8,S72 "°""""""' 1.!191 333720 .... 339507 , .... 350,"33 U74 372•99 ..... ,. .. , Ui7i ....... .... 353,675 1.100 S!iOT87 U03 MS.232 .... 3"4S.2!i0 .......... .. 203<191 .. 152910 .. 183,168 .. ... ,,., " 17<1,595 .. 1821529 " 193.233 .. 202,<107 .. 191,238 .. 193 503 --~ "' ..... "' 41.793 .. 42,71• " 55,910 .. 54,818 .. <16,<184 " 453411 .. <11,928 .. <15136 .. <IUS2 -"' ... ,., "' 71503 "' 71,121 '" 72562 ... 70.263 '" tr,155 ... '"" ... 61,400 "' 57,039 "' 58378 "'-.. "'" .. Ji815 .. ...... .. 531579 .. 57,027 .. 441117 .. """' .. <1!1,5-'!I 31,039 lnclu.lrial'f'Ki.l ' 42,17<1 ' 3293' ' <14<1S7 ' 44,0!11 ' <10,"48 ' 20.439 ton.ul'Mld 11'1 produc:tiofl " 2U1MI " 26223 " ,, ... 13 22,728 12 .. ,,.. 12 18,e&!I 12 """ 12 17,331 • .... • "" ..... _ ' ,.,,, ' 22.82• ' 23,85<1 ' 28821 ' 2!1930 1 21.530 ' ,,.., 1 219115 1 ""' 1 25.824 -· .. 18,723 13 ,.,., 12 18,503 .. 1!1,1574 10 17,!196 • 2&,<182 .. ,,, .. • 31,858 • Sl,728 . 3!1132 --.. 8913 " 7.312 " .... " "'° " ., .. " <1810 " <1,973 " .... " 5224 " 47<19 oit....tllqbllocl-.:lllCl:IDn• . "" . .. EnglnMririgRidlu • "'" • 15,178 ,,.. 7 3,754 • .... .. ,, .... <l,807 "" 7 4772 Pr<Mdlrtg tllqble MIYbl ' ..... ' •869 .... ' <l,827 ' 11118 ., .. , .. , 3,167 3,921 1 3,3"7 S.le of compoMtll perta • 8,748 • •200 5.851 • ., .. • '"' 8172 .... ""' 3,129 . 2117 Fhl'!ydrlll'I ' 1,1<17 2 1,032 2'2<1 3 1,389 . "'" uzz 1.<17<1 1m ' 1790 lnduttnalCD'l•IMMClll'lptOduCllOn ' 3)30 3 2.314 4,043 ' "'° ' '"' <l.<117 .... "'" 1,130 ' 1,182 S.ln ol' f•rm ~ulpfl*'lt ' , .. ' ,.. "' ' .. ' " ... .. ' " ' .. ' '°' 19,171 11540111 11,lt] 1'11171 11117 1170.202 19,154 l'.0&5'51 1113' 17!14,tl27 1h1n1 1i,!!1ffi 201$) 17'71"9 201tl 111'J&e 20192 17!135'l WllllatbtelcheduM MonS!ly nw'8J dla19' (Sir) "' ... .... .... .... '"' ,.,,, "" 1552 Commodity c:tiaroe (per 000 pl): 0-2000oaf ... ,_,. "' lrn "" ..... .. ,. .... ..,. ..11 2001 -10,000 pl "' Over 10 OOOgal 207 E•CIU ... cflerOll ... "' "" 1776 .... ,.,, ""' $9111 "" W•tewat9rRmkMdu ... MonthlybaM~ ,., ... U2 .... 1671 .. .. 1711 1722 ,,,. 1751 Unltc:io91(1*'000giilt 2'3 , .. "' .. ,. .... ..,. .... $!101 1519 .,,. Water Iola 11•xpmucl11'1 thouNrm. of pllonl Number of Ac.eounts billed 11 .... •nnu.I numt-of blllingl for sach clllu Cllvldtod by 12 Monttoly....,CNfV'll'lcrNa..-l!IM111Hol' ... -9r Rnld9nbal Wd_... ii calc!M-.:1 MMd on wmer~" ... -'81' conaumpt1011 Ott.-•(;CDUl'lta •re baMd on mol'l1hty ""1 c:onsumptaon 2008 W119r CoNumptlon Rate 8trudurll Chang«! from 1de<:reulng1181flruciure1C1 Ont nite arid E~teH UH Ctl1'91' #llch II double .... COMUfTIPllon 111te 113 Schedule 12 City of Salina, Kansas Ratio of Outstanding Debt by Type Last Ten Fiscal Years Govemmental Activities Business-T~e Activities General General Water Percentage Obligation Loans Capital Temporary Obligation Revenue Loans Temporary Total Primary of Personal Fiscal Year Bonds Pa~able Lease Notes Bonds Bonds Pa~able Notes Govemment Income PerCa2ita 2008 $ 29,869,930 $ $ $ 5,005,000 $2,780,069 $ 3,030,000 $ 6,428,759 $ $ 47,113,758 2.5% $1,014.12 2009 $ 52,067 ,590 $ $ $ $2,320,000 $ 2,320,000 $ 5,862,516 $ $ 62,570, 106 3.5% $1,346.09 2010 $53,120,952 $ $ $ 2,500,000 $8,614,576 $ 1,580,000 $ $ $ 65,815,528 3.8% $1,425 20 2011 $ 55,225,670 $ $ $ 3,400,000 $7,417,907 $16,193,925 $ $ $ 82,237 ,502 4.3% $1,723 80 2012 $ 49, 109,575 $ $ $ 1,485,000 $9,613,926 $15,850,228 $ $ $ 76,058,729 3.8% $1,583.07 2013 $49,631,797 $ $ $ 3,800,000 $8,519,799 $15,226,532 $ $ s n,110,120 3.7% $1,613.05 2014 $ 50,033,555 $ $176,235 $ 5,000,000 $9,587,351 $14,592,836 $ 6,208,102 $ $ 85,598,079 4.1% $1,788.25 2015 $ 50,840,632 $ $479,366 $ 5,995,000 $8,539,n3 $13,949,139 $ 5,753,620 $ $ 85,557,530 4.1% $1,789.42 2016 $51,816,399 $12,157,127 $ 321,174 $11,505,000 $7,640,381 $13,285,443 $ 7,432,024 $ $ 104,157,548 5.0% $2,200.39 2017 $ 55,994,305 $12.171,090 $157,868 $ 6,811,742 $6,520,433 $12,606,747 $ 8,862,810 $ s 103,124,995 4.9% $2,194 43 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 114 Schedule 13 City of Salina, Kansas Ratio of Net General Bonded Debt Outstanding Last Ten Fiscal Years General Bonded Debt Outstandin!l General Percentage of Obligation Temporary Less Debt Net General Actual Taxable Fiscal Year Bonds Caeital Lease Notes Total Service Fund Bonded Debt Value of PerCaeita 2008 $ 32,649,999 $ $ 5,005,000 $ 37,654,999 $ 792,744 $ 36,862,255 8.3% $ 793.45 2009 $ 54,387,590 $ $ $ 54,387,590 $ 735,291 $ 53,652,299 11.9% $1,154.23 2010 $61,735,528 $ $ 2,500,000 $ 64,235,528 $ 571,873 $ 63,663,655 14.2% $1,378.60 2011 $ 62,443,577 $ $ 3,400,000 $ 65,843,577 $ 1,236,026 $ 64,607,551 14.4% $1,354.26 2012 $ 58,723,501 $ $ 1,485,000 $ 60,208,501 $ 582,412 $ 59,626,089 13.2% $1,241.05 2013 $ 58,151,596 $ $ 3,800,000 $ 61,951,596 $ 707,763 $ 61,243,833 13.5% $1,280.02 2014 $ 59,620,906 $ 176,235 $ 5,000,000 $64,797,141 $ 407,864 $ 64,389,277 14.1% $1,345.17 2015 $ 59,380,405 $ 479,366 $ 5,995,000 $ 65,854, 771 $ 745,339 $ 65, 109,432 14.1% $1,361.75 2016 $ 59,456,780 $ 321,174 $11,505,000 $ 71,282,954 $ 1,248,914 $ 70,034,040 14.8% $1,479.51 2017 $ 62,514,738 $ 157,868 $ 6,811,742 $ 69,484,348 $ 1,509,863 $ 67,974,485 14.4% $1,446.45 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 115 Schedule 14 City of Salina, Kansas Direct and Overlapping Governmental Activities Debt As of December 31, 2017 Net General Obligation Percentage Bonded Debt Applicable to Jurisdiction Outstanding City of Salina Direct: City of Salina $ 67,974,485 100.00% Overlapping: Salina Airport Authority 22,632,000 100.00% Saline County 145,000 75.08% USO 305 123,335,000 93.63% Total Overlapping Debt 146,112,000 Total Direct and Overlapping Debt $ 214,086,485 Per Capita Direct and Overlapping debt Amount Applicable to the City of Salina $ 67,974,485 22,632,000 108,866 115,4 78,561 138,219,427 $ 206,193,912 $ 4,312.51 Percentage of debt applicable to the City of Salina is based on the proportion that the assessed valuation of the City of Salina bears to the assessed valuation of the overlapping entity. Source: Saline County Clerk 116 _egal Debt Margin Calculation for 2017 Assessed Valuation Debt Limit (30% of Assessed Value) Debt applicable lo llmlt· Total Bonded Debi Less GO Debt Attributable to Exempt Purposes Less Revenue Bonds Less Capital Leases Less Loans Payable Less Fund Balance designated for Debt Service Total Debi Appltcable to Umrtatlon Legal debt margin $ 473,335, 124 142,000,537 $ 103, 124,995 (6,520,433) (12,606,747) (157,868) (21,033,900) (1.509,663) 61,296,164 80,704.353 Debt limit s 133,224,043 s 135,400,141 Total net debt epphcable to l1m1t Legal debt margin Total net debt applicable to the hmrt as a percentage of debt limlt 36,662,255 53,652,299 $ 96,361,768 s 61,747 842 28% 40% Schedule 15 City of Sahna, Kansas Legal Debt Margin Last Ten Fiscal Years Fiscal Year 134,340,263 58,411,185 75,929,078 43% 134,928,191 57,747,032 n.181,159 43% 117 135,421208 49,309 445 86,111,763 36% ~ ZQ.li ~ 221.§ ~ 136,196,966 136,896,083 138,909,078 141,804,931 142,000,537 52 724 034 54 625 691 56,090,293 62 072 485 61,296,164 83,472,932 82,270,392 82,818,785 $ 79,732.446 $80,704,353 39% 40% 40% 44% 43% Utility Service Fiscal Year Char9es 2008 $ 14,072,513 2009 $ 14,980,874 2010 $ 16,520,055 2011 $ 17,905,056 2012 $ 19,098,626 2013 $ 17,938,288 2014 $ 18,742,029 2015 $ 19,058,855 2016 $ 19,322,077 2017 $ 19,855,033 Schedule 16 City of Salina, Kansas Pledged Revenue Coverage Last Ten Fiscal Years Water/Sewer Revenue Bonds Less Operating Net Available Ex~enses Revenue Principal $ 12,754,057 $ 1,318,456 $ 1,038,000 $ 12,524,390 $ 2,456,484 $ 1,276,243 $ 13,571,098 $ 2,948,957 $ 740,000 $ 12,963,891 $ 4,941,165 $ 1,580,000 $ 13,963,941 $ 5,134,685 $ 340,000 $ 14,524,148 $ 3,414,140 $ 620,000 $ 14,002,088 $ 4,739,941 $ 630,000 $ 11,711,823 $ 7,347,032 $ 640,000 $ 13,981,811 $ 5,340,266 $ 660,000 $ 14,720,148 $ 5,134,885 $ 675,000 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 City of Salina Debt Service Schedules 118 Interest Covera9e $ 515,459 85% $ 455,294 142% $ 91,450 355% $ 496,760 238% $ 596,992 548% $ 590,191 282% $ 577,791 392% $ 565,191 610% $ 549,191 442% $ 529,391 426% Per Capita Personal Income Fiscal Year Population (Saline Coun!}'.) 2008 46,458 $ 40,351 2009 46,483 $ 38,392 2010 46, 180 $ 37,880 2011 47.707 $ 40.512 2012 48,045 $ 41,762 2013 47,846 $ 43,078 2014 47,867 $ 43,736 2015 47,813 $ 44,065 2016 47,336 $ 44,230 2017 46,994 $ 44,732 Sources: Population: Kansas Division of the Budget. Employment: Kansas Department of Labor Personal Income, Salina (interpolated) $ 1,874,626,758 $ 1,784,575,336 $ 1, 7 49,2g8,400 $ 1.932.705,984 $ 2,006,455,290 $ 2,061,109,988 $ 2,093,511, 112 $ 2, 106,879,845 $ 2,093,647,612 $ 2, 102, 135,608 Schedule 17 City of Salina, Kansas Demographic and Economic Statistics Last Ten Fiscal Years Unemployment Labor Force, USD305 Rate C!!}'. of Salina Headcount 3.8% 26,343 7,348 6.0% 26,769 7,432 6.7% 26,379 7,346 6.7% 26,256 7,269 6.3% 26,185 7,305 5.1% 26,441 7,305 5.3% 26,303 7,388 3.g% 26,170 7,369 3.3% 27,684 7,386 2.7% 27,684 7,176 Personal income for Salina Is derived from the population and per capita personal income for Saline County Per Capita Personal Income as reported by the Bureau of Economic Analysis 2017 Per Capita Personal Income staff projection 2008 -2017 Employment City of Salina USD305 headcount and free and reduced lunch data derived from Kansas Department of Education. Percentage Asao/oof Free and Per Capita .5 per capita Reduced City .5 cent cent sales personal Lunch sales tax Tax income 56.3% $5,177,461 $ 111.44 0.276% 58.7% $4,965,147 $ 106.82 0.278% 57.8% $4,803,553 $ 104.02 0.275% 56.7"/o $ 5,076,751 $ 106.42 0.263% 59.1% $ 5,241,205 $ 109.09 0.261% 60.7% $5,326,723 $ 111.33 0.258% 61.3% $5,555,601 $ 116.06 0.265% 61.8% $5,670,040 $ 118.59 0.269% 68.7% $5,727,260 $ 120.99 0.274% 33.4% $5,755,869 $ 122.48 0.274% Increase In per capita Sales Tax (10 years) 14.3% Increase in per capita Personal Income 20.5% Free and Reduced Lunch percentage Is an average of the percentages for each building reported. School Data Is reported at beginning of school year, eg 2017-2018 school year is reported as 2017. 119 Employer Salina Regional Health Center Schwan's Global Supply Chain Unified School District No 305 Great Plains Manufacturing Exide Technologies City of Salina REV Group Salina Vortex Walmart Blue Philips Lighting Company Lock/line Raytheon Aircraft Eldorado National Total Schedule 18 City of Salina, Kansas Principal Employers Current Year and Nine Years Ago Type of Business Health Care Frozen Pizza Manufacturing Public School System Agricultrual & Landscaping Equipment Automotive Battery Manufacturer City Government Manufacturing Manufacturing Retail Fluorescent Lamps Cellular Phone Insurance Aircraft Manufacturing Busses/Recreational Vehicle Emplo;i:ees 1,082 1,850 935 650 800 493 600 420 357 255 6,360 Source: Salina Chamber of Commerce Most recent Official Statement (EMMA) 120 2008 Rank #NIA 1 2 4 3 6 5 7 8 9 2017 Percentage Percentage of Labor of Labor Force Emplo;i:ees Rank Force 4.1% 1,800 1 6.5% 7.0% 1,700 2 6.1% 3.5% 1,500 3 5.4% 2.5% 1,100 4 4.0% 3.0% 600 5 2.2% 1.9% 425 6 1.5% 300 7 1.1% 250 8 0.9% 250 9 0.9% 2.3% 230 10 0.8% 1.6% 1.4% 1.0% 24.1% 6,355 23.0% APPENDIX D 2018 Unaudited Financial Statements The following report provides unaudited revenues, expenditures and fund balances for the City for fiscal year ending December 31, 2018 prepared on a cash basis. This information has been provided by City staff and is believed to be accurate but is subject to revision both before and during the auditing process. '.!: Budgeted Funds 2018 Budget 2018 Actuals Ending Fund Balance Revenues Expenditures Net Change Revenues Expenditures Net Change 12/31/201B Target Balance Budgeted Funds: ifaxFuncis • · General 100 $ 42,707,172 $ (42,233,141) $ 474,031 $ 40,580,519 $ (41,459,518) $ (878,999) s 4,379,422 $ 8,500,000 Debt Service 500 $ 6,729,847 $ (7,182,981) $ (453,134) $ 6,600,125 $ (7,182,981) $ (582,856) s 612,285 $ 200,000 ~j;eciai' Revenue Funds .. ----,·" ·-. •• ,. -< • . . . _, -.. ~-""',,, . Sales Tax capital 210 $ 8,583,025 $ (8,877, 712) $ (294,687) $ 8,418,773 $ (8,578,796) $ (160,023) $ 1,662,520 $ 750,000 Sales Tax EcoDevo 220 $ 334,818 $ (458,840) $. (124,022) $ 342,525 $ (452,073) $ (109,548) $ 892,555 $ 50,000 Tourism 240 $ 1,814,240 $ (1,814,240) $ $ 1,814,246 $ (1,814,240) $ 5 $ 852 $ Special Gas 270 $ 1,572,420 $ (1,433,202) $ 139,219 $ 1,655,017 $ (1,365,885) $ 289,132 $ 1,038,592 $ 500,000 Arts & Humanities 200 $ l,OQ7,850 $ (1,048,635) $ (40,785) $ PiJ7,073 $ (995,681) $ (188,607) $ (83,294) $ 100,000 Business Improvement District 230 $ 89,190 $ (89,190) $ $ 85,357 $ (93,225) $ (7,868) s 5,436 $ Special Parks 250 s 193,209 $ (194,000) $ (791) $ 193,209 $ (194,984) $ (1,775) $ 122,446 $ 50,000 Special Alcohol 260 $ 216,086 $ (216,086) $ 0 $ 191,746 $ (191,676) $ 70 $ 234 $ Neighborhood Parks 280 $ 10,500 $ $ 10,500 $ 2,652 $ $ 2,652 $ 24,251 $ TPEC 290 $ 700,000 $ (762,332) $ (62,332) $ 802,669 $ (762,968) $ 39,701 $ 97,681 $ r~· _-.. "" -· -~ • ..--,, tEnterprlse Funds .,_..... .. .--. .... ' ~ ,,-~..._-, ~,.,..' r -.,. .... . /"..,··-" ~ ·--~ -~<' .... ~ • ... -' .. ~_..,,.,.,. .. .._~_-... _--_·_~ Sanitation 300 $ 3,050,926 $ (2,883,597) $ 167,329 $ 2,952,161 $ (3,033,907) (81,746) s 1,462,610 s 500,000 Solid Waste 320 $ 2,897,310 $ (2,873,163) $ 24,147 s 3,152,476 s (2,564,378) s 588,098 s 4,639,998 $ 500,000 Golf 340 $ 840,840 $ (954,700) $ (113,860) s 876,516 s (950,675) $ (74,159) $ 41,873 $ 100,000 Water/Wastewater 370 s 20,626,800 $ (21,341,199) $ (714,399) $ 18,197,174 • $ (17,924,248) $ 272,925 $ 11,664,031 •s 5,000,000 )rilernai serVice "Fun.is . -·.--' ~·~•-"'1 . ,, .. -., . -~--~-...... ,, ,.,..~ .-..,-•'" ' ,.,.,_,~, . ~ ·~ .... • _.... ':;>~ .......... . ~-'""'?" -/t'• , •• • . -... --~·~·-"' ... •;---... ·~·~...,.... .... f~~--.-... h~ .,, -, -·-,._ ~ ~ -. .,. ·-· .... ··-- Central Garage 450 1,434,390 $ (1,435,015) $ (625) $ 1,524,203 $ (1,491,671) $ 32,533 $ 54,128 $ 100,000 Workers' Compensation 410 252,500 $ (281,306) $ (28,806) $ 422,143 $ (254,669) $ 167,474 $ 957,863 $ 750,000 Health 420 7,054,200 $ (6,402,432) $ 651,769 $ 7,062,242 $ (5,960,949) $ 1,101,293 $ 3,152,265 s 1,500.000 •The City Is annually billed for Kansas Water Protection Fees and Clean Water Fees. The expense is funded by a combination of customer fees on each water bill and City budget allocation. The fee had not been paid since 2015. $494K had been budgeted over the 4 year period In question, and $411K was recently expensed against th" 201R budeet. It is possible that an intcre•t penalty may be Imposed. The water/Wastewat"r Fund balance was impacted by this catch-up payment. Budget to Actuals 2018 Actuals 2018 Budget 2018 Budget Variance 2011 " Budget 2017 Actuals 2017 Budget 2017 Budget Variance 2017" Budget Budgeted Funds: ---.~ .. ,... ...... -.. . , ~·~':'."..d.•r) -,---..-··--·--~---~~--~---·-,-~--·-· .... -'?""~l!n~!·! ---·---...-.. --~mer.ii1'fU•~·. --~.··:·--·~·-:·. --·~ ~.· .·~.· General 100 Revenues: Property Taxes $ 8,608,836 $ 8,891,050 $ (282,214) 96.83% $ 9,100,808 $ 9,274,492 $ (173,684) 98.13% Motor Vehicle Tax $ 1,120,631 $ 1,090,219 $ 30,4U 102.79% $ 1,016,439 $ 991,987 $ 24,452 102.46" Sales and Use Tax $ 13,101,634 $ 13,427,924 $ (326,290) 97.57% $ U,906,032 $ 12,805,000 $ 101,032 100.79% Franchise Fees $ 6,644,880 $ 6,788,304 $ (143,424) 97.89% $ 5,215,264 $ 6,614,540 $ (1,399,276) 78.85% Other Taxes $ 191,676 $ 192,092 $ (416) 99.78% $ 202,255 $ 190,092 $ U,163 106 40% Grants $ 206,741 $ 237,000 $ (30,259) 87.23% $ 136,055 $ 180,000 $ (43,945) 75.59% Investment Income $ 52,956 $ 21,668 $ 31,288 244.40% $ 9,897 $ 12,COJ $ (2,103) 82 47% EMS $ 3,137,571 $ 3,445,200 $ (307,629) 91.07% $ 3,050,944 $ 2,985,COJ $ 65,944 102.21% Municipal Court $ 1,148,027 $ 1,407,366 $ (259,339) 81.57% $ 979,336 $ 1,400,COJ $ (420,664) 69.95% Fees and Charges $ 2,159,621 $ 2,821,085 $ (661,464) 76.55% $ 2,591,785 $ 2,645,327 $ (53,542) 97.98% lnterfund Transfers $ 3,841,500 $ 3,935,089 $ (93,589) 97.62% $ 4,626,500 $ 4,635,089 $ (8,589) 99.81% Other Revenues $ 366,447 $ 450,175 $ (83,728! 8140% $ 1,579,350 $ 171,739 $ 1.407,611 919 62% Total Revenues $ 40.580.519 $ 42.707.ln $ (2,U6,653) 95.02% $ 41,414,664 $ 41,905,266 $ (490,602) 98.83" Ex1:!;end1tures· Personnel Services $ 25,647,962 26,013,269 $ (365,307) 98.60% $ 24,634,426 $ 25,625,354 $ (990,928) 9613% Employee Benefits $ 4,080,834 4,219,834 $ (138,999) 96.71% $ 3,879,284 $ 4,295,799 $ (416,515) 90.30% 0 Commodities $ 2,119,108 2,072,151 $ 46,958 102 27% $ 1,884,824 $ 2,120,294 $ (235,470) 88.89% ~ Contractual Services $ 7,813,648 7,476,058 $ 337,590 104.52% $ 7,386,231 $ 7,393,607 $ (7,376) 99.90% capital Outlay $ 972,688 1,010,n9 $ (98,091) 90 84% $ 843,418 $ 1.010,925 $ (167,507) 83.43% lnterfund Transfers $ 720,000 810,000 $ (90,000) 88 89% $ 810,000 $ 810,COJ $ 10000% Reserves $ 105,276 571,051 $ {465,ns! 18 44% $ 46,971 $ 40,COJ $ 6,971 117.43% Total Expenditures $ 41,459,518 42,.233,141 $ {!!!.624! 98.17% $ 39,485,153 $ 41,295,979 $ {1,810,826) 95.62" Arts & Humanities 200 ~ Fees and Charges $ 309,881 347,200 $ (37,319) 89.25% $ 390,648 $ 370,350 $ 20,298 105.48% Transfers lnterfund $ 400,COJ 525,COJ $ (125,COJ) 76.19% $ 500,000 $ 500,COJ $ 100.00% Foundation Support $ 97,(l65 133,650 $ (36,585) 72.63% $ 39,719 $ 110,COJ $ (70,281) 36.11% Investment Income $ U7 2,000 $ (1,873) 637% $ 93 $ 2,COJ $ (1,907) 4.66% Other Revenues s $ 745 $ 500 $ 245 14900% Total flevcnua $ 007,f173 1.<>07.8SO (>M.'77) 10.08% s 'Jl.lllti $ ,......., $ (51, ... ) 04.75" ExQend1tures: Personnel services $ 482,942 464,604 $ 18,338 103 95% $ 467,045 s 370,241 96,804 126.15% Commochtles $ 6,960 10,206 $ (3,246) 68 20% $ 6,Sn $ 8.370 (1,793) 78.58% Contractual Serv1ees $ 160,055 169,478 $ (9.423) 94.44% $ 160,726 $ 195,450 (34,724) 82.23% Capital Outlay $ 23,869 17,500 $ 6,369 13640% $ 17,985 $ 17.SOO 485 102.77% Transfer lnterfund $ $ $ $ 75,3n (75,3nJ 0.00% Smoky Hill River Festl 7110 $ 321,854 386.847 $ j64,993! 83.20% $ 328,426 $ 350,050 !21,624! 93.82% Taul Expenditures $ 995,681 1,048,635 $ (52,954) 94.95% $ 980,759 $ 1.016,988 (36,229) 96.44" Budget to Actuals 2018 Actuals 2018 Budret 2018 Budret Variance 2018" Budret 2017 Actuals 2017Bud1et 2017 Budget Varfance!017" Budget Budceted Funds: Over(Under) Over(Under) Sanrtat1on 300 Revenues· Sanitation Fees $ 2,941,279 3,048.426 $ (107,147) 96.49% 2,811,233 $ 2,913,179 (101,946) 96.50% Investment Income $ 10,882 2.500 $ 8,382 435.29% 5,793 $ 5,793 Total Revenues $ 2.952,161 3.050,926 $ (98,765) 96.76% 2.S17.Q26 $ 2.913,179 (96,153) 96.70% ExQend1tures: Personnel Services $ 800,318 712.490 $ 87,828 112.33% $ 656,262 832,950 $ (176,688) 78.79% Employee Benefits $ 154,861 169,289 $ (14,428) 91.48% $ 139,919 172,406 $ (32,487) 81.16% Commodities $ 327,939 268,717 $ 59,222 122.04% $ 271,926 355,925 $ (83,999) 76.40% Contractual Services $ 994,285 958,665 $ 35,620 103.72% $ 828,011 198,110 $ 629,901 417.96% C.pltal Outlay $ 345,005 362,936 $ (17,931) 95.06% $ 57,159 374,625 $ (317,466) 15.26% lnterfund Services $ 411,500 411.SOO $ 376,500 996.SOO $ (620,000) 37.78% Total [Jq>endltures $ 3.033,907 2,883,597 $ 150,310 105.21" $ 2,329,m 2,930,516 $ (600,739) 79.50% Golf 340 Revenues· Fees and Charges 851,493 814,840 36,653 104.50% 848,160 848,950 (790) 99.91% 0 Sales Tax 24.478 26,000 (1,522) 94.15% 25,656 25,000 6S6 102.63% w Investment Income 545 545 344 344 Tobi Revenues 876,516 840,840 35,676 104.24% 874,160 873,950 210 100.02" Ex~endltures: Personnel Services 444,954 447,000 (2,046) 99.54% 374,447 366,868 s 7,579 102 07% Employee Benefits 60,081 64,000 (3.919) 93 88% 46,959 40,446 s 6,513 116.10% Commodities 296,119 296,000 119 100.04% 318,219 292,850 s 25,369 108.66% Contractual Services 124,790 126,000 (1,210) 9904% 116,655 117,900 s (1,245) 9894% C.pltal Outlay 24,731 21,700 3,031 11397% 1,826 s 1,826 lnterfund Transfers 83,289 s (83,289) 000% Total Expenditures 950,675 954,700 (4,025) 99.58% 858,107 901,353 $ (43,246) 95.20% Central Garage 450 lnterfund Services 1,517,390 1.416,850 100.540 107.10% 1,344,331 1,730,000 (385,669) n.71% Other Reimbursements 6,145 17,500 (11.355) 35.11% 6,482 17,SOO (11,018) 37.04% Investment Income 668 40 628 1670.15% 40 !401 000% Total Revenues 1,524,203 1,434,390 89,813 106.26% 1,350,813 1,747,540 (396,727) n.30% Ex2endltures· Personnel Services s 250,648 235,860 14,788 106.27% 221,700 234,610 s (12,910) 94.50% Employee Benefits s 52,662 66,700 (14,038) 7895% 46,997 60,724 s (13,727) 77.39% Commodities s 1,161,334 1,053,955 107.379 110.19% 987,423 1,340,730 s (353,307) 73.65% Contractual Services s 27,027 48,000 (20,973) 56.31% 43.461 55.420 s (11,959) 78.42% Capital Outlay s 20,SOO (20,SOO) 000% 12,174 66,000 s (53,826) 18.45% lnterfund Services s 10,000 110,0001 000% 10,000 s 110,0001 0.00% Total Expenditures s 1,491.671 1,435.DlS 56,656 103.95% 1,311,755 1,767,484 $ (455,729) 74.22% CERTIFICATE DEEMING PRELIMINARY OFFICIAL STATEMENT FINAL To: The Baker Group 8klaboma City, Oklahoma Country Club Bank Pra1r1e Village, Kansas March 25, 2019 Re: General Obligation Improvement Bonds, Series 2019-A; General Obligation Temporary Notes, Series 2019-1 The undersigned is the duly acting Finance Director of the City of Salina, Kansas (the "Issuer''), and is authorized to deliver this Certificate to the addressee(s) (the "Purchaser(s)") on behalf of the Issuer. The Issuer has previously caused to be delivered to the Purchaser(s) copies of the Preliminary Official Statement (the "Preliminary Official Statement") relating to the above-referenced notes and bonds (the "Obligations"). For the purpose of enabling the Purchaser(s) to comply with the requirements of Rule 15c2- 12(b)(l) of the Securities and Exchange Commission (the "Rule"), the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be final as of its date, except for the omission of such information as is permitted by the Rule, such as offering prices, interest rates, selling compensation, aggregate principal amount, principal per maturity, delivery dates, ratings, identity of the underwriters and other terms of the Obligations depending on such matters. CITY OF SALINA, KANSAS By: cA?_d4e /2v Title: Finance Director In the opinion of Gilmore & Bell, P. C., Bond Counsel to the City, under existing Jaw and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended (the "Code"): (1) the interest on the Notes and Bonds (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax, (2) the interest on the Notes and Bonds is exempt from income taxation by the State of Kansas, and (3) the Notes and Bonds have not been designated as "qualified tax-exempt obligations" within the meaning of Code Section 265(b)(3). See TAX MATTERS in this Official Statement. New Issues Book-Entry Only $6,085,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 Dated: Date of Delivery CITY OF SALINA, KANSAS Moody's Ratings: Bonds-"Aa3" Notes-"MIGl" $11,090,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2019-A Due: As Shown Herein The General Obligation Temporary Notes, Series 2019-1 Notes (the "Notes") will be issued by the City of Salina, Kansas (the "Issuer'' or the "City") as fully registered notes, without coupons. Purchases of the Notes will be made in book-entry form, in the denominations of $5,000 or any integral multiple thereof (the "Authorized Denomination"). Principal and interest will be payable at maturity upon presentation and surrender of the Notes by the registered owners thereof at the office of the Treasurer of the State of Kansas (the "Note Paying Agent" and "Note Registrar''). The Notes are subject to redemption at the option of the City as further described herein. See THE NOTES -"Redemption Provisions" herein. The General Obligation Internal Improvement Bonds, Series 2019-A Bonds (the "Bonds") will be issued by the Issuer, as fully registered bonds, without coupons. Purchases of the Bonds will be made in book-entry only form in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). Principal on the Bonds will be payable annually on October 1 in the years shown herein. Interest on the Bonds will be payable semiannually on April 1 and October 1 of each year until maturity, commencing on April 1, 2020 (the "Bond Interest Payment Date"). The Treasurer of the State of Kansas will be designated as paying agent and registrar or the Bonds (the "Bond Paying Agent" and "Bond Registrar''). The Bonds are subject to redemption at the option of the City as further described herein. See THE BONDS-"Redemption Provisions" herein. MATURITY SCHEDULES (see inside front cover) The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES -"Security" and THE BONDS -"Security" herein. I i The Notes and Bonds are offered when, as and if issued by the City and received by the Underwriters subject to the approval of legality by Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City. It is expected that the Notes and Bonds will be available for delivery through the facilities of OTC, in New York, New York, on or about April 24, 2019. This Official Statement is dated April 9, 2019. THIS COVER PAGE CONTAINS INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THE ISSUES. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OFAN INFORMED INVESTMENT DECISION. Maturity 05-01-20 MATURITY SCHEDULES $6,085,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019·1 Amount $6,085,000 Rate 1.580% Yield 1.580% Base cus1p111 794744 CK6 At the option of the City, the Notes will be subject to redemption and payment prior to their Stated Maturity on November 1, 2019, and at any time thereafter, as a whole or in part (selection of the amount of Notes to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. $11,090,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2019-A SERIAL BONDS Base cus1p111 Maturity Amount Rate Yield 794744 10-01-20 $240,000 4.000% 1.650% BP6 10-01-21 410,000 4.000 1.670 BQ4 10-01-22 425,000 4.000 1.700 BR2 10-01-23 445,000 4.000 1.750 BSO 10-01-24 465,000 4.000 1.800 BT8 10-01-25 480,000 4.000 1.850 BUS 10-01-26 500,000 4.000 1.950 BV3 10-01-27121 520,000 3.000 2.000 BWl 10-01-2812) 535,000 3.000 2.100 BX9 10-01-29121 555,000 3.000 2.200 BY7 10-01-30(2) 570,000 3.000 2.350 BZ4 10-01-31 <2l 585,000 3.000 2.500 CAB 10-01-32121 600,000 3.000 2.700 CB6 10-01-33(2) 620,000 3.000 2.800 CC4 10-01-34(2) 640,000 3.000 2.850 CD2 10-01-35(2) 655,000 3.000 2.900 CEO 10-01-3612) 680,000 3.000 3.000 CF7 10-01-3712) 700,000 3.000 3.050 CGS 10-01-38(2) 725,000 3.000 3.070 CH3 10-01-39(2) 740,000 3.000 3.000 CJ9 <1lCUSIP numbers have been assigned to this issue by CUSIP Global Services, which is managed on behalf ofthe American Bankers Association by S&P Capital 10.. a subsidiary of The McGraw-Hill Companies, Inc., and are included solely for the convenience of the Owners of the Notes and Bonds. Neither the City nor the Underwriters shall be responsible for the selection or correctness of the CUSIP numbers set forth above. <2l At the option of the City, Bonds maturing on October 1, 2027 and thereafter, will be subject to redemption and payment prior to their Stated Maturity on October l, 2026, and at any time thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the Redemption Date. IN CONNECTION WITH THIS OFFERING, THE NOTE UNDERWRITER AND/OR THE BONDS UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE NOTES AND BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE NOTES AND BONDS ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE NOTES AND BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE SECURITIES HAVE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR AGENCIES HAVE GUARANTEED OR PASSED UPON THE SAFETY OF THE NOTES OR THE BONDS AS AN INVESTMENT, UPON THE PROBABILITY OF ANY EARNINGS THEREON OR UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. THIS OFFICIAL STATEMENT CONTAINS STATEMENTS THAT ARE "FORWARD-LOOKING STATEMENTS" AS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. WHEN USED IN THIS OFFICIAL STATEMENT, THE WORDS "ESTIMATE," "INTEND," "EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED IN SUCH FORWARD- LOOKING STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD- LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. CITY OF SALINA, KANSAS City/County Building -Room 206 300 West Ash P.O. Box 736 Salina, Kansas 67402-0736 CITY COMMISSION Trent W. Davis, M.D., Mayor Mike Hoppock, Vice Mayor Melissa Rose Hodges, Commissioner Joe Hay, Jr., Commissioner Karl Ryan, Commissioner CITY STAFF Mike Schrage, City Manager Debbie Pack, Finance Director Shandi Wicks, City Clerk CITY ATTORNEY Greg Bengtson Clark, Mize & Linville, Chartered Salina, Kansas BOND COUNSEL Gilmore & Bell, P.C. Kansas City, Missouri MUNICIPAL ADVISOR George K. Baum & Company Kansas City, Missouri No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any information or to make any representations with respect to the Notes or the Bonds, other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy the Notes or Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein concerning the Issuer has been furnished by the Issuer and other sources which are believed to be reliable, but such information is not guaranteed as to accuracy or completeness. The Underwriters have reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the Federal Securities Laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer since the date hereof. This Official Statement does not constitute a contract between the Issuer or the Underwriters and any one or more of the purchasers, Owners or Beneficial Owners of the Notes or Bonds. All financial and other information presented herein, except for information expressly attributed to other sources, has been provided by the City from its records and is intended to show recent historic information. Such information is not guaranteed as to accuracy or completeness. All descriptions of laws and documents contained herein are only summaries and are qualified in their entirety by reference to such laws and documents. TABLE OF CONTENTS Page INTRODUCTORY STATEMENT............................................................................................................. 1 THE NOTES.......................................................................................................................................... 2 THE BONDS......................................................................................................................................... 6 THE DEPOSITORY TRUST COMPANY................................................................................................... 11 THE FINANCING PLAN......................................................................................................................... 13 SOURCES AND USES OF FUNDS.......................................................................................................... 13 RISK FACTORS AND INVESTMENT CONSIDERATIONS......................................................................... 14 LEGAL MATIERS ................................................................................................................................. 16 TAX MATIERS ..................................................................................................................................... 16 RATINGS.............................................................................................................................................. 18 MUNICIPAL ADVISOR.......................................................................................................................... 18 UNDERWRITING................................................................................................................................. 18 ABSENCE OF MATERIAL LITIGATION................................................................................................... 19 CONTINUING DISCLOSURE................................................................................................................. 19 CERTIFICATION OF OFFICIAL STATEMENT.......................................................................................... 20 APPENDIX A: INFORMATION CONCERNING THE CITY FINANCIAL OVERVIEW OF THE CITY.............................................................................................. A-1 GENERAL INFORMATION CONCERNING THE CITY........................................................................ A-2 ECONOMIC INFORMATION CONCERNING THE CITY..................................................................... A-6 DEBT SUMMARY OF THE CITY....................................................................................................... A-9 FINANCIAL INFORMATION CONCERNING THE CITY...................................................................... A-13 APPENDIX B: FORM OF CONTINUING DISCLOSURE UNDERTAKING APPENDIX C: AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2017 APPENDIX D: UNAUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING DECEMBER 31, 2018 General OFFICIAL STATEMENT CITY OF SALINA, KANSAS $6,085,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 $11,090,000 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2019-A INTRODUCTORY STATEMENT The purpose of this Official Statement is to present certain information concerning the City of Salina, Kansas (the "Issuer'' or "City''), and the offering of its $6,085,000 General Obligation Temporary Notes, Series 2019-1 (the "Notes"), and its $11,090,000 General Obligation Internal Improvement Bonds, Series 2019-A (the "Bonds", and together with the Notes, the "Securities"). The Notes and the Bonds are being issued to provide funds to finance certain public improvements within the City and to retire certain outstanding general obligation temporary notes of the City. See THE FINANCING PLAN herein. The full faith, credit, and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes and Bonds as the same becomes due. See THE NOTES -"Security'' and THE BONDS -"Security" herein. The Appendices are an integral part of this Official Statement and should be read in their entirety. All financial and other information presented herein has been compiled by the City's municipal advisor, George K. Baum & Company, Kansas City, Missouri (the "Municipal Advisor''). Such information has been provided by the City· and other sources deemed to be reliable. The presentation of information herein is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City, has not assisted in the preparation of nor reviewed this Official Statement, except to the extent described under the sections captioned THE NOTES, THE BONDS, LEGAL MATTERS, TAX MATTERS, and APPENDIX B -FORM OF CONTINUING DISCLOSURE UNDERTAKING and, accordingly, expresses no opinion as to the accuracy or sufficiency of any other information contained herein. Definitions Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution of the governing body of the City authorizing the Notes (the "Note Resolution") and in the ordinance and resolution of the governing body of the City authorizing the Bonds (collectively, the "Bond Resolution"), as applicable. Copies of the Note Resolution and the Bond Resolution are available upon request to the City or the Municipal Advisor. Additional Information Additional information regarding the City, the Notes, or the Bonds may be obtained from George K. Baum & Company, 4801 Main Street, Kansas City, Missouri 64112, telephone 816-474-1100. 1 THE NOTES Authority The Notes are being issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101 to 10-125, inclusive, specifically including K.S.A. 10-123, K.S.A. 10-620 et seq., K.S.A. 12-63lr ands, K.S.A. 12-685 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-1736 et seq., K.S.A. 12- 2101 et seq., and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time, and a resolution adopted by the governing body of the City authorizing the issuance of the Notes (the "Note Resolution"). Security The Notes shall be general obligations of the City, payable as to both principal and interest in part from special assessments levied upon the property benefitted by the construction of certain public improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. Description The Notes shall consist of fully registered book-entry-only notes in an Authorized Denomination and shall be numbered in such manner as the Note Registrar shall determine. All of the Notes shall be dated as of April 24, 2019 (the "Dated Date"), shall become due in the amount on the Stated Maturity and are subject to redemption and payment prior to the Stated Maturity. The Notes shall bear interest at the rate per annum set forth on the inside cover page of this Official Statement, and shall bear interest (computed on the basis of twelve 30-day months) from the Dated Date, payable at the Stated Maturity. Redemption Provisions Optional Redemption. At the option of the City, the Notes or portions thereof, will be subject to redemption and payment prior to their Stated Maturity on November 1, 2019, and at any time thereafter as a whole or in part (selection the amount of Notes to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. Selection of Notes to be Redeemed. Notes shall be redeemed only in an Authorized Denomination. When less than all of the Notes are to be redeemed and paid prior to their Stated Maturity, such Notes shall be redeemed in such manner as the City shall determine, Notes of less than a full Stated Maturity shall be selected by the Note Registrar in minimum Authorized Denomination in such equitable manner as the Note Registrar may determine. In the case of a partial redemption of Notes by lot when Notes of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Note of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Note is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Note to the Note Registrar: {l) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Note 2 or Notes of the aggregate principal amount of the unredeemed portion of the principal amount of such Note. If the Owner of any such Note fails to present such Note to the Note Paying Agent for payment and exchange as aforesaid, such Note shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). Notice and Effect of Call for Redemption. Unless waived by any Owner of Notes to be redeemed, if the City shall call any Notes for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Notes to the Note Registrar. In addition, the City shall cause the Note Registrar to give written notice of redemption to the Owners of said Notes. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Notes are to be redeemed, the identification (and, in the case of partial redemption of any Notes, the respective principal amounts) of the Notes to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Note or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Notes are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Note Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Note Paying Agent an amount of money sufficient to pay the Redemption Price of all the Notes or portions of Notes that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Notes or portions of Notes to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Notes or portion of Notes shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Notes, the Note Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Note (having been mailed notice from the Note Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Note so affected, shall not affect the validity of the redemption of such Note. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Note Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Note. Designation of Note Paying Agent and Note Registrar The City will at all times maintain a paying agent and note registrar meeting the qualifications set forth in the Note Resolution. The City reserves the right to appoint a successor paying agent or note registrar. No resignation or removal of the paying agent or note registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or note registrar. Every paying agent or note registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Note Registrar'' and "Note Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Notes and note registrar with respect to the registration, transfer and exchange of Notes. Registration, Transfer and Exchange of Notes As long as any of the Notes remain Outstanding, each Note when issued shall be registered in the name of the 3 Owner thereof on the Note Register. Notes may be transferred and exchanged only on the Note Register as hereinafter provided. Upon surrender of any Note at the principal office of the Note Registrar, the Note Registrar shall transfer or exchange such Note for a new Note or Notes in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Note that was presented for transfer or exchange. Notes presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Note Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Notes is exercised, the Note Registrar shall authenticate and deliver Notes in accordance with the provisions of the Note Resolution. The City shall pay the fees and expenses of the Note Registrar for the registration, transfer and exchange of Notes. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, are the responsibility of the Owners of the Notes. In the event any Owner fails to provide a correct taxpayer identification number to the Note Paying Agent, the Note Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Note Registrar shall not be required to register the transfer or exchange of any Note during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest. Mutilated, Lost, Stolen or Destroyed Notes If (a) any mutilated Note is surrendered to the Note Registrar or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to the City and the Note Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the City or the Note Registrar that such Note has been acquired by a bona fide purchaser, the City shall execute and, upon the City's request, the Note Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the City, in its discretion, may pay such Note instead of issuing a new Note. Upon the issuance of any new Note, the City may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Note Paying Agent) connected therewith. Nonpresentment of Notes If any Note is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Note have been made available to the Note Paying Agent all liability of the City to the Owner thereof for the payment of such Note shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Note Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Note, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Note Resolution or on, or with respect to, said Note. If any Note is not presented for payment within four (4) years following the date when such Note becomes due at Maturity, the Note Paying Agent shall repay to the City the funds theretofore held by it for payment of such Note, and such Note shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the City, and the Owner thereof shall be entitled to look only to the City for payment, and then only to the extent of the amount so repaid to it by the Note Paying Agent, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Method and Place of Payment of the Notes The principal of, or Redemption Price, and interest on the Notes shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Note and the interest thereon shall be paid at Maturity (the "Note Interest 4 Payment Date") to the Person in whose name such Note is registered on the Note Register at the Maturity thereof, upon presentation and surrender of such Note at the principal office of the Note Paying Agent. The interest payable on each Note on the Note Interest Payment Date shall be paid to the Owner of such Note as shown on the Note Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Note Paying Agent to the address of such Owner shown on the Note Register or at such other address as is furnished to the Note Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Notes, by electronic transfer to such Owner upon written notice given to the Note Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. "Record Date" means, for the interest payable on the Note Interest Payment Date, the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Note Interest Payment Date. Notwithstanding the foregoing, any Defaulted Interest with respect to any Note shall cease to be payable to the Owner of such Note on the relevant Record Date and shall be payable to the Owner in whose name such Note is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The City shall notify the Note Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Note Paying Agent) and shall deposit with the Note Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Note Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Note Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Note entitled to such notice not less than 10 days prior to such Special Record Date. SO LONG AS CEDE & CO. REMAINS THE REGISTERED OWNER OF THE NOTES, THE NOTE PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See ''THE NOTES -Book-Entry Notes; Securities Depository." Payments Due on Saturdays, Sundays and Holidays In any case where a Note Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Note Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Note Payment Date, and no interest shall accrue for the period after such Note Payment Date. Book-Entry Notes; Securities Depository The Notes shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Notes, except in the event the Note Registrar issues Replacement Notes. It is anticipated that during the term of the Notes, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Notes to the Participants until and unless the Note Registrar authenticates and delivers Replacement Notes to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of OTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through OTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository 5 and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes; or (b) if the Note Registrar receives written notice from Participants having interest in not less than 50% of the Notes Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes, then the Note Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Note Registrar shall register in the name of and authenticate and deliver Replacement Notes to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the City, with the consent of the Note Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Note. Upon the issuance of Replacement Notes, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Note Registrar, to the extent applicable with respect to such Replacement Notes. If the Securities Depository resigns and the City, the Note Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Note Registrar shall authenticate and cause delivery of Replacement Notes to Owners, as provided herein. The Note Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Notes. The cost of printing, registration, authentication, and delivery of Replacement Notes shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Note Registrar receives written evidence satisfactory to the Note Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Note Registrar upon its receipt of a Note or Notes for cancellation shall cause the delivery of the Notes to the successor Securities Depository in appropriate denominations and form as provided in the Note Resolution. THE BONDS Authority The Bonds are being issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including without limitation K.S.A. 10-101to10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-631r, K.S.A. 12-685 et seq., K.S.A. 65-163u, Charter Ordinance No. 39 of the City and Article 12, Section 5 of the Constitution of the State of Kansas , all as amended and supplemented from time to time, and an ordinance and resolution adopted by the sovernins body of the City authorizins the issuance of the Bonds (collectively, the "Bond Resolution"). Security The Bonds shall be general obligations of the City, payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. 6 Levy and Collection of Annual Tax, Transfer to Debt Service Account The governing body of the Issuer shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by, to the extent necessary, levying and collecting the necessary taxes upon all of the taxable tangible property within the Issuer in the manner provided by law. Such taxes shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes shall be deposited in the Bond and Interest Fund, shall be kept separate and apart from all other funds of the Issuer, shall thereafter be transferred to the Debt Service Account and shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due, taking into account any scheduled mandatory redemptions, and the fees and expenses of the Paying Agent. Description The Bonds shall consist of fully registered book-entry-only bonds in an Authorized Denomination and shall be numbered in such manner as the Bond Registrar shall determine. All of the Bonds will be dated as of April 24, 2019 (the "Dated Date"), shall become due in the amounts, on the Stated Maturities, and subject to redemption and payment prior to their Stated Maturities, and shall bear interest at the rates per annum set forth on the inside cover page of this Official Statement. The Bonds shall bear interest (computed on the basis of twelve 30-day months) from the later of the Dated Date or the most recent Bond Interest Payment Date to which interest has been paid, on the Bond Interest Payment Dates in the manner hereinafter set forth. Redemption Provisions Optional Redemption. At the option of the City, Bonds or portions thereof maturing on October 1, 2027 and thereafter may be called for redemption and payment prior to their Stated Maturity on October 1, 2026, and at any time thereafter as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the City in such equitable manner as it may determine), at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. Selection of Bonds to be Redeemed. Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such manner as the Oty shall determine, Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in minimum Authorized Denomination in such equitable manner as the Bond Registrar may determine. In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Bond of a minimum Authorized Denomination. If it is determined that one or more, but not all, of the minimum Authorized Denomination value represented by any Bond is selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of such minimum Authorized Denomination value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Bond Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination value called for redemption (and to that extent only). Notice and Effect of Call for Redemption. Unless waived by any Owner of Bonds to be redeemed, if the City shall call any Bonds for redemption and payment prior to the Stated Maturity thereof, the City shall give written notice of its intention to call and pay said Bonds to the Bond Registrar. In addition, the City shall cause the Bond Registrar to give written notice of redemption to the Owners of said Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. 7 All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Bond Paying Agent. The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Bond Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such Redemption Date. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Bond Registrar shall provide the notices specified to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. In addition to the foregoing notice, the City shall provide such notices of redemption as are required by the Disclosure Undertaking. The Bond Paying Agent is also directed to comply with any mandatory or voluntary standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. Designation of Bond Paying Agent and Bond Registrar The City will at all times maintain a paying agent and bond registrar meeting the qualifications set forth in the Bond Resolution. The City reserves the right to appoint a successor paying agent or bond registrar. No resignation or removal of the paying agent or bond registrar shall become effective until a successor has been appointed and has accepted the duties of paying agent or bond registrar. Every paying agent or bond registrar appointed by the City shall at all times meet the requirements of Kansas law. The Treasurer of the State of Kansas, Topeka, Kansas (the "Bond Registrar" and "Bond Paying Agent") has been designated by the City as paying agent for the payment of principal of and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds. Registration, Transfer and Exchange of Bonds As long as any of the Bonds remain Outstanding, each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as hereinafter provided. Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Bond Resolution. The City shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Bonds. Any additional costs or fees 8 that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Bond Paying Agent, the Bond Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The City and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption has been mailed by the Bond Paying Agent and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed forthe payment of Defaulted Interest. Method and Place of Payment of the Bonds The principal of, or Redemption Price, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on . the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal office of the Bond Paying Agent. The interest payable on each Bond on any Bond Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Bond Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Bond Paying Agent in writing by such Owner; or (b) in the case of an interest payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. "Record Date" means, for the interest payable on any Bond Interest Payment Date, the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Bond Interest Payment Date. Notwithstanding the foregoing, any Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified. The City shall notify the Bond Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Bond Paying Agent) and shall deposit with the Bond Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest. Following receipt of such funds the Bond Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Bond Paying Agent shall notify the City of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Bond entitled to such notice not less than 10 days prior to such Special Record Date. SO LONG AS CEDE & CO., REMAINS THE REGISTERED OWNER OF THE BONDS, THE BOND PAYING AGENT SHALL TRANSMIT PAYMENTS TO THE SECURITIES DEPOSITORY, WHICH SHALL REMIT SUCH PAYMENTS IN ACCORDANCE WITH ITS NORMAL PROCEDURES. See "THE BONDS -Book-Entry Bonds; Securities Depository." Payments Due on Saturdays, Sundays and Holidays In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such 9 Bond Payment Date. Book-Entry Bonds; Securities Depository The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraphs. The City may decide, subject to the requirements of the Operational Arrangements of OTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through OTC (or a successor Securities Depository): (a) If the City determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds; or (b) if the Bond Registrar receives written notice from Participants having interest in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a}{l} or (a)(2) of this paragraph, the City, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of the Bonds to the successor Securities Depository in appropriate denominations and form as provided in the Bond Resolution. 10 THE DEPOSITORY TRUST COMPANY 1. The Depository Trust Company ("OTC"), New York, New York, will act as securities depository for the Securities. The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of OTC. One fully- registered bond or note certificate will be issued for each scheduled maturity of the Securities, and will be deposited with OTC. 2. OTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. OTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with OTC. OTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. OTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for OTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the OTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). OTC has a Standard & Poor's rating of "AA+". The OTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about OTC can be found at www.dtcc.com. 3. Purchases of Securities under the OTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner'') is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from OTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book- entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with OTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of OTC. The deposit of Securities with OTC and their registration in the name of Cede & Co. or such other OTC nominee do not effect any change in beneficial ownership. OTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by OTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 6. Redemption notices shall be sent to OTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither OTC nor Cede & Co. (nor any other OTC nominee) will consent or vote with respect to the 11 Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, OTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of OTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Issuer or Paying Agent, on the payment date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of OTC nor its nominee, the Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of OTC) is the responsibility of the Issuer or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of OTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to the Paying Agent. The requirement for physical delivery of the Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to the Paying Agent's OTC account. 10. OTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Issuer or Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. 11. The Issuer may decide to discontinue use of the system of book-entry-only transfers through OTC (or a successor securities depository). In that event, certificates will be printed and delivered to OTC. 12. The information in this section concerning OTC and DTC's book-entry system has been obtained from sources that the Issuer believes to be reliable, but the lssu.er takes no responsibility for the accuracy thereof. REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY 12 THE FINANCING PLAN The Note Proiects Proceeds from the sale of the Notes will be used to provide interim construction financing for all or a portion of the costs of certain public improvements within the City (collectively, the "Note Projects") and to pay costs associated with issuance of the Notes. The projects to be financed with the Notes are as follows: Project Description Landfill Cell #20 North 9th Street Bridge Pheasant Ridge Addition No. 3 Police Parking Smoky Hill River Renewal Ordinance/ Resolution Res. 19-7672 Ord. 02-10071; Res No.19-7677 Res. 18-7633 Res. 19-7679 Ord. 17-10885 Authority K.S.A. 12-2101 et seq. K.S.A. 12-685 et seq. K.S.A. 12-6a01 et seq. K.S.A. 12-1736 et seq. K.S.A. 12-631r and s, Article 12, §5 of the Constitution of the State of Kansas Improvement Fund Deposit* $2,298,567.47 500,000.00 530,165.28 400,000.00 Total: *Excludes costs of issuance and underwriter's discount 2.300,000.00 $6,028,732.75 The Bond Prolects Proceeds from the sale of the Bonds will be used to provide long term financing for a portion of the costs of certain public improvements within the City (collectively, the "Bond Projects"), retire a portion of the City's outstanding general obligation temporary notes and to pay the costs associated with the issuance of the Bonds. The Bond Projects are as follows: Project Description Downtown Streetscape Golf Irrigation Ordinance/ Resolution Ord. 17-10888 Res. 19-7678 Authority K.S.A. 12-631r, 12-685 et seq., K.S.A. 65-163u Charter Ordinance No. 39 Total: Improvement Fund Deposit $10,364,313.89* 982.245.87 $11,346,559.76* *Excludes costs of issuance and underwriter's discount. SOURCES AND USES OF FUNDS Funds to be used in the Financing Plan will be provided and applied approximately as follows, exclusive of accrued interest. Sources of Funds: Principal Amount Original Issue Premium/ Discount Total Sources of Funds Uses of Funds: Deposit to Improvement Fund Underwriter's Discount Costs of Issuance Total Application of Funds 13 $6,085,000.00 -. $6,085,000.00 $6,028,732.75 14,299.75 41,967.50 $6,085,000.00 $11,090,000.00 442,877.65 $11,532,877.65 $11,346,559.76 94,796.25 91,521.64 $11,532,877 .65 RISK FACTORS AND INVESTMENT CONSIDERATIONS A PROSPECTIVE PURCHASER OF THE SECURITIES DESCRIBED HEREIN SHOULD BE AWARE THAT THERE ARE CERTAIN RISKS ASSOCIATED WITH THE SECURITIES WHICH MUST BE RECOGNIZED. THE FOLLOWING STATEMENTS REGARDING CERTAIN RISKS ASSOCIATED WITH THE OFFERING SHOULD NOT BE CONSIDERED AS A COMPLETE DESCRIPTION OF ALL RISKS TO BE CONSIDERED IN THE DECISION TO PURCHASE THE SECURITIES. PROSPECTIVE PURCHASERS OF THE SECURITIES SHOULD ANAL yzE CAREFULLY THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT AND ADDITIONAL INFORMATION IN THE FORM OF THE COMPLETE DOCUMENTS SUMMARIZED HEREIN, COPIES OF WHICH ARE AVAILABLE AND MAY BE OBTAINED FROM THE CITY OR THE UNDERWRITER. Legal Matters Various state and federal laws, regulations and constitutional provisions apply to the obligations created by the Securities. There is no assurance that there will not be any change in, interpretation of, or addition to such applicable laws, provisions and regulations which would have a material effect, either directly or indirectly, on the City or the taxing authority of the City. Limitations on Remedies Available to Owners of Securities The enforceability of the rights and remedies of the owners of Securities, and the obligations incurred by the City in issuing the Securities, are subject to the following: the federal Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under state law of certain remedies; the exercise by the United States of America of the powers delegated to it by the United States Constitution; and the reasonable and necessary exercise, in certain unusual situations, of the police power inherent in the State of Kansas and its governmental subdivisions in the interest of serving a legitimate and significant public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the owners of the Securities to judicial discretion and interpretation of their rights in bankruptcy and otherwise, and consequently may involve risks of delay, limitation or modification of their rights. Debt Service Source; Issuer's Tax Revenues The Securities are general obligations of the Issuer payable as to both principal and interest, if necessary, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Legislature may from time to time adopt changes in the property tax system or method of imposing and collecting property and/or sales taxes within the State. The effects of such legislative changes could affect the Issuer's property tax and sales tax collections, and the impact could be material. Other future events, such as the loss of a major taxpayer, reductions in assessed value, increases in property tax rates of overlapping taxing units, or a decrease in sales tax revenues could increase effective property tax rates and the resulting increase could be material. Taxpayers may also challenge the value of property assigned by the county appraiser. If a taxpayer valuation challenge is successful, the liability of the Issuer to refund property taxes previously paid under protest may have a material adverse effect on the Issuer's financial situation. See "APPENDIX A -FINANCIAL INFORMATION CONCERNING THE CITY -Appraisal and Assessment Procedures." Kansas Public Employees Retirement System As described in "APPENDIX A -GENERAL INFORMATION CONCERNING THE CITY -Pension and Employee Retirement Plans," the Issuer participates in the Kansas Public Employees Retirement System ("KPERS"), as an instrumentality of the State to provide retirement and related benefits to public employees in Kansas. KPERS administers three statewide defined benefit retirement plans for public employees which are separate and distinct 14 with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Issuer participates in the Police and Firemen's Retirement System ("KP&F") and the Public Employees Retirement System -Local Group (the "Plan"). Under existing law, employees make contributions and the Issuer makes all employer contributions to the Plan; neither the employees nor the Issuer are directly responsible for any unfunded accrued actuarial liability ("UAAL"). However, the Plan contribution rates may be adjusted by legislative action over time to address any UAAL. According to KPERS' Valuation Report, the Local Group had an UAAL of approximately $1.458 billion in the calendar year 2017 and KP&F had an UAAL of approximately $859 million. Taxation of Interest on the Securities Opinions of Bond Counsel will be obtained to the effect that interest earned on the Securities is excludable from gross income for federal income tax purposes under current provisions of the Internal Revenue Code of 1986, as amended (the "Code"}, and applicable rulings and regulations under the Code; however, an application for a ruling has not been made and an opinion of counsel is not binding upon the Internal Revenue Service. There can be no assurance that the present provisions of the Code, or the rules and regulations thereunder, will not be adversely amended or modified, thereby rendering the interest earned on the Securities includable in gross income for federal income tax purposes. The City has covenanted in the Note Resolution and the Bond Resolution and in other documents and certificates to be delivered in connection with the issuance of the Securities to comply with the provisions of the Code, including those which require the City to take or omit to take certain actions after the issuance of the Securities. Because the existence and continuation of the excludability of the interest on the Securities depends upon events occurring after the date of issuance of the Securities, the opinion of Bond Counsel described under "TAX MATIERS" assumes the compliance by the City with the provisions of the Code described above and the regulations relating thereto. No opinion is expressed by Bond Counsel with respect to the excludability of the interest on the Securities in the event of noncompliance with such provisions. The failure of the City to comply with the provisions described above may cause the interest on the Securities to become includable in gross income as of the date of issuance. Premium on the Securities The initial offering prices of certain maturities of the Securities that are subject to optional redemption may be in excess of the respective principal amounts thereof. Any person who purchases such a Security in excess of its principal amount, whether during the initial offering or in a secondary market transaction, should consider that the Securities are subject to redemption at par under the various circumstances described under "THE NOTES- Redemption Provisions" and ''THE BONDS -Redemption Provisions." No Additional Interest or Mandatory Redemption upon Event of Taxabilitv Neither the Bond Resolution nor the Note Resolution provide for the payment of additional interest or penalty on the Securities or the mandatory redemption thereof if the interest thereon becomes includable in gross income for federal income tax purposes. Likewise, neither the Bond Resolution nor the Note Resolution provide for the payment of any additional interest or penalty on the Securities if the interest thereon becomes subject to income taxation by the State of Kansas. Suitability of Investment The tax exempt feature of the Securities is more valuable to high tax bracket investors than to investors who are in low tax brackets, and so the value of the interest compensation to any particular investor will vary with individual tax rates. Each prospective investor should carefully examine this Official Statement, including the Appendices hereto, and its own financial condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Securities are an appropriate investment. 15 Market for the Securities Ratings. The Securities have been assigned the financial ratings set forth in the section hereof titled RATINGS. There is no assurance that a particular rating will remain in effect for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely, if in the judgment of the agency originally establishing such rating, circumstances so warrant. Any downward revision or withdrawal of any rating may have an adverse affect on the market price of the Securities. Secondary Market. There is no assurance that a secondary market will develop for the purchase and sale of the Securities. Prices of securities traded in the secondary market, though, are subject to adjustment upward and downward in response to changes in the credit markets. From time to time it may be necessary to suspend indefinitely secondary market trading in the Securities as a result of financial condition or market position of broker- dealers, prevailing market conditions, lack of adequate current financial information about the City, or a material adverse change in the financial condition of the City, whether or not the Securities are in default as to principal and interest payments, and other factors which may give rise to uncertainty concerning prudent secondary market practices. Recent Legislative Proposals Congress and the President periodically work on various proposals to increase income taxes and to reduce tax deductions and expenditures. These discussions have made it clear that the tax exemption of municipal bonds is considered a tax expenditure and as such there is no guaranty that the tax exempt status on municipal bonds will remain unchanged as a result of these discussions. If a legislative change is enacted which results in all, or a portion, of the interest on the Securities being subjected to Federal income taxes, such legislation or proposals could affect the value or marketability of the Securities. Prospective purchasers of the Securities should consult their own tax advisers regarding the impact of any change in law on the Securities. LEGAL MATTERS All matters incident to the authorization and issuance of the Securities by the City are subject to the approval of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the City. The factual and financial information appearing herein has been supplied or reviewed by certain officials of the City and its certified public accountants, as referred to herein. Bond Counsel has participated in the preparation of the matters appearing in the sections of this Official Statement captioned THE NOTES, THE BONDS, LEGAL MATTERS, TAX MATTERS, and APPENDIX B-FORM OF CONTINUING DISCLOSURE UNDERTAKING. TAX MATTERS General The following is a summary of the material federal and State of Kansas income tax consequences of holding and disposing of the Securities. This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all aspects of federal income taxation that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of holders subject to special treatment under the federal income tax laws (for example, dealers in securities or other persons who do not hold the Securities as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws of the State of Kansas, does not discuss the consequences to an owner under state, local or foreign tax laws. The summary does not deal with the tax treatment of persons who purchase the Securities in the secondary market. Prospective investors are advised to consult their own tax advisors regarding federal, state, local and other tax considerations of holding and disposing of the Securities. 16 Opinion of Bond Counsel In the opinion of Bond Counsel, under the law existing as of the issue date of the Securities: Federal Tax Exemption: The interest on the Securities (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal income tax purposes. Alternative Minimum Tax. Interest on the Securities is not an item of tax preference for purposes of computing the federal alternative minimum tax. Bank Qualification. The Securities have not been designated as "qualified tax-exempt obligations" for purposes of Code §26S(b). Kansas Tax Exemption. The interest on the Securities is exempt from income taxation by the State of Kansas. No Other Opinions. Bond Counsel's opinions are provided as of the date of the original issue of the Securities, subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Securities in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Securities in gross income for federal income tax purposes retroactive to the date of issuance of the Securities. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Securities. Other Tax Consequences Original Issue Discount. For federal income tax purposes, original issue discount ("OID") is the excess of the stated redemption price at maturity of a security over its issue price. The issue price of a security is generally the first price at which a substantial amount of the security of that maturity has been sold to the public. Under Code§ 1288, OID on tax-exempt obligations accrues on a compound basis. The amount of 010 that accrues to an owner of a Security during any accrual period generally equals: (a) the issue price of such Security plus the amount of DID accrued in all prior accrual periods; multiplied by (b) the yield to maturity on such Security (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period); minus (c) any interest payable on such Security during such accrual period. The amount of OID so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excludable from gross income for federal income tax purposes, and will increase the owner's tax basis in such Security. Prospective investors should consult their own tax advisors concerning the calculation and accrual of OID. For each Security, the stated redemption price at maturity includes all payments on the Security, except interest payable at least annually over the term of the Security ("qualified stated interest"). Since the May 1, 2020 interest payment on the Notes will be paid more than one year after the Notes are issued, none of the interest payments on the Notes constitute qualified stated interest, and the stated redemption price of the Notes includes all payments on the Notes. Original Issue Premium. For federal income tax purposes, premium is the excess of the issue price of a Security over its stated redemption price at maturity. The issue price of a Security is generally the first price at which a substantial amount of the Securities of that maturity have been sold to the public. Under Code §171, premium on tax-exempt obligations amortizes over the term of the Security using constant yield principles, based on the purchaser's yield to maturity. As premium is amortized, the owner's basis in the Security and the amount of tax- exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner, which will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes 17 on sale or disposition of the Security prior to its maturity. Even though the owner's basis is reduced, no federal income tax deduction is allowed. Prospective investors should consult their own tax advisors concerning the calculation and accrual of premium. Sale, Exchange or Retirement of Securities. Upon the sale, exchange or retirement (including redemption) of a Security, an owner of the Security generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Security (other than in respect of accrued and unpaid interest) and such owner's adjusted tax basis in the Security. To the extent the Securities are held as a capital asset, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the Security has been held for more than 12 months at the time of sale, exchange or retirement. Reporting Requirements. In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on Securities, and to the proceeds paid on the sale of Securities, other than certain exempt recipients (such as corporations and foreign entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dividend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit against the owner's federal income tax liability. Collateral Federal Income Tax Consequences. Prospective purchasers of the Securities should be aware that ownership of the Securities may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch profits tax, life insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Securities. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Securities should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Securities, including the possible application of state, local, foreign and other tax laws. RATINGS Moody's Investors Service has assigned ratings of "MIG 1" to the Notes and "Aa3" to the Bonds. Any explanation of the significance of such ratings may be obtained only from said rating agency. There is no assurance that the ratings will remain for any given period of time or that they may not be lowered or withdrawn entirely by the rating service if, in their judgment, circumstances so warrant. Any such downward change in or withdrawal of the ratings may have an adverse effect on the market price of the Notes and Bonds. MUNICIPAL ADVISOR George K. Baum & Company, Kansas City, Missouri, has acted as Municipal Advisor to the City in connection with the sale of the Securities. The Municipal Advisor has assisted the City in the preparation of this Official Statement and in other matters relating to the issuance of the Securities. The fees of the Municipal Advisor are contingent upon the issuance of the Securities. UNDERWRITING The Notes are being purchased by Country Club Bank, Prairie Village, Kansas, (the "Notes Underwriter'') at a price equal to the principal amount of the Notes, less an underwriting discount of $14,299. 75. The Bonds are being purchased by The Baker Group, Oklahoma City, Oklahoma (the "Bonds Underwriter'') at a price equal to the par amount of the Bonds, plus a net premium of $442,877 .65, less an underwriting discount of $94, 796.25. 18 The Notes Underwriter and the Bonds Underwriter are collectively referred to herein as the "Underwriters". ABSENCE OF MATERIAL LITIGATION The Transcript of Proceedings will contain a certificate of non-litigation dated as of the closing date and executed by the City to the effect that, except as disclosed in the Official Statement, there is no controversy, suit, or proceeding of any kind pending or, to the knowledge of the City, threatened wherein or whereby any question is raised, or may be raised, questioning, disputing, or affecting in any way the legal organization of the City or its boundaries or the legality of any official act shown to have been done regarding the issuance of the Notes and Bonds or the constitutionality or validity of the obligation represented by the Bonds or the means provided for the payment of the Notes and Bonds. CONTINUING DISCLOSURE The Securities and Exchange Commission (the "SEC") has promulgated amendments to Rule 15c2-12 (the "Rule"), requiring continuous secondary market disclosure. In connection with the issuance of the Securities, the Issuer will enter into a continuing disclosure undertaking (the "Disclosure Undertaking") wherein the Issuer covenants to annually provide certain financial information and operating data (collectively, the "Annual Report") and other information necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. Pursuant to the Disclosure Undertaking, this Issuer has agreed to file its Annual Report with the national repository ("EMMA") not more than 180 days after the end of the City's Fiscal Year, commencing with Fiscal Year ended in December 31, 2018. In Bond Resolution and Note Resolution, the Issuer covenants with the Underwriter and the Beneficial Owners to apply the provisions of the Disclosure Undertaking to the Securities. This covenant is for the benefit of and is enforceable by the Beneficial Owners of the Securities. For more information regarding the Disclosure Undertaking, see "APPENDIX B -FORM OF CONTINUING DISCLOSURE UNDERTAKING." The Issuer believes it has complied during the past five years with its prior undertakings under the Rule, except as follows: 1. Due to administrative oversight in implementation of a new disclosure undertaking, for the fiscal year ended December 31, 2013, the Issuer failed to timely file certain operating data, including a "Financial Overview." This operating data was filed in a supplemental operating data filing on July 8, 2014. A notice of failure to file such operating data was filed on July 15, 2015. 2. Certain operating data for the fiscal year ended December 31, 2014 was timely filed in summary form. Additional details related to such summary information were included in the City's audited financial statements for the fiscal year ended December 31, 2014 that were filed on October 26, 2015. 3. During the past five years, the Issuer has made filings of event notices on EMMA with respect to certain bond calls, defeasances, and rating changes, however, during said time period, the Issuer did not make timely filings of event notices on EMMA relating to all bond calls, defeasances or rating changes. The Issuer believes this information was disseminated or available through other sources. The City's audited financial statements for the fiscal years ended December 31, 2016 and 2017 were not yet completed by the filing deadlines. In compliance of the City's prior disclosure undertakings, the City timely filed unaudited financial statements. The City filed the audited financial statements for fiscal years ended December 31, 2016 and 2017 promptly when they became available which was October 16, 2018. The City's final audited financial statements for these years were delayed because of challenges with financial software conversion, staff turnover and delayed receipt of component unit audits. 19 CERTIFICATION OF THIS OFFICIAL STATEMENT The preparation and distribution of this Official Statement has been authorized by the City. This Official Statement is hereby duly approved by the governing body of the City as of the date on the cover page hereof. CITY OF SALINA, KANSAS 20 APPENDIX A FINANCIAL OVERVIEW OF THE CITY 2018 Estimated Actual Valuation (1) 2018 Assessed Valuation Outstanding General Obligation Bonds (2) Population (2017 U.S. Census Bureau Estimate) General Obligation Debt Per Capita Ratio of General Obligation Debt to Estimated Actual Valuation Ratio of General Obligation Debt to Estimated Assessed Valuation Outstanding Temporary Notes (3) Outstanding State Loans (4) Outstanding Lease Purchase Obligations Outstanding Revenue Bonds Overlapping General Obligation Debt (5) Direct and Overlapping General Obligation Debt (6) Direct and Overlapping General Obligation Debt Per Capita Ratio of Direct and Overlapping Debt to Estimated Actual Valuation Ratio of Direct and Overlapping Debt to Estimated Assessed Valuation $ 3,150,409,123 $ 487, 787,922 $ 65,975,000 $ $ $ $ $ $ $ $ 46,994 1,404 2.09% 13.53% 11,030,000 11,337,716 782,954 34,420,000 131,123,835 219,466,551 4,670 6.97% 44.99% (1) For a further description of how Estimated Actual Valuation is calculated and additional historical figures see the section titled FINANCIAL INFORMATION CONCERNING THE CITY-"Estimated Actual Valuation". (2) Includes the Bonds. (3) Includes the Notes and excludes the notes to be retired with proceeds from the sale of the Bonds. (4) The City intends to repay such loans from the net revenues of its municipal water and sewer system. However, such loans are ultimately secured by the City's full faith and credit. See DEBT SUMMARY OF THE CITY -"Current Indebtedness -State Loans". (5) For a more detailed explanation of the overlapping debt of the other jurisdictions, see DEBT SUMMARY OF THE CITY -"Overlapping Debt". (6) Includes outstanding general obligation bonds, temporary notes and state loans of the City and general obligation bonds of overlapping jurisdictions. A-1 GENERAL INFORMATION CONCERNING THE CITY Location and Size The City of Salina is located in north central Kansas, near the geographic center of the contiguous United States. It is the seventh largest city in Kansas, with a 2017 U.S. Census Bureau estimate of 46,994. The City is the county seat for Saline County which had an estimated 2017 U.S. Census Bureau population of 54, 734. Situated at the intersection of Interstate Highways 70 and 135, the City of Salina serves as the industrial, medical, retail, trade and service hub for north central Kansas. Kansas City, Kansas, and Wichita, Kansas, are 175 and 95 miles away, respectively, via the direct access of these two major highways. The City encompasses a total area of approximately 23 square miles. Government The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas. The City has had a Commission-City Manager form of government since 1921. The Commission comprises five members elected at-large. Each year the Commission chooses one member to act as Mayor. The City Manager is appointed by the Governing Body and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The Governing Body is responsible for the policy determination, and the City Manager is responsible for the administration of the municipal government. Salina became a City of the first class on July 9, 1920. There are no organized city employee unions. The present elected officials of the City, along with the expiration of their current terms of office, are as follows: Population Name Trent W. Davis, M.D. Mike Hoppock Karl Ryan Melissa Rose Hodges Joe Hay, Jr. Title Mayor Vice Mayor Commissioner Commissioner Commissioner Term Expires 2020 2022 2020 2022 2020 The City of Salina has a population that is approaching metropolitan area status. This is defined by the U.S. Census Bureau as cities with 50,000 inhabitants or more. The following table and graph show the population for the City for selected years as provided by the U.S. Census Bureau. Year 2017 2016 2015 2014 2013 A-2 U.S. Census Bureau Population 46,994 47,336 47,813 47,867 47,846 Police and Fire Protection The City of Salina provides police and fire protection services to residents of the City and surrounding areas. The two departments employ 194 full-time employees for out of the 436 total employed by the City. Firefighting services are provided from four stations located throughout the City with 88 full-time firefighters. The fire department operates 35 vehicles and provides emergency medical services. The Department was recently upgraded to an Insurance Services Office rating of 2. The police department employs 102 personnel, of which 72 are sworn positions. The Department operates 45 police vehicles, including patrol vehicles, motorcycles, and scooters. Both Departments are accredited by their respective professional organizations. Educational Facilities The City of Salina has a very complete and diverse educational system from the primary level up to its higher educational institutions. Unified School District No. 305 provides public education through its eight elementary, two middle, and two senior high schools. The District also operates alternative education, vocational-technical, and special education schools. Current enrollment is over 7,400. Additionally, there are a number of parochial institutions that operate two grade schools, two junior high schools, and one senior high school. A military school is located in the City and operates both a grade school and high school. The City is home to five regional or private upper-level specialty schools. The Kansas Highway Patrol has a training academy located in Salina. Kansas State University Polytechnic Campus at Salina. The University offers a variety of two-and four-year aviation and technology degree programs. Areas of emphasis include civil, electrical and mechanical engineering technologies, aeronautical studies, and avionics. The campus is located entirely within the boundaries of the Salina Airport Industrial Center. Approximately 572 students are currently enrolled in the school. Kansas Wesleyan University. Kansas Wesleyan University was founded in 1886 and is located within the City. Currently, Kansas Wesleyan maintains an enrollment of approximately 791 students, the majority from Kansas and surrounding states. The school, based on a liberal arts foundation, offers more than SO major programs, including graduate studies. Evening degree completion programs for adults are also available. Kansas Wesleyan is a member of the Associated Colleges of Central Kansas, a consortium of six academic institutions within 70 miles of the University through which students may enroll in courses and utilize resources. Transportation In addition to 1-70 and 1-135, US-81 and US-40 also intersect Salina. Several freight companies provide motor freight service in Salina with direct and connecting schedules to all cities in the United States. Bus service is available at regular intervals during each day in all directions. Union Pacific gives the City rail service in four directions out of the City and provides daily package-car service in and out of Salina. There are approximately 8 daily freights stopping in the City. Existing terminals have adequate capacity to handle present and greatly increased future capacity. Approximately 30 miles of storage tracks are available. · The City is served by the Salina Regional Airport and scheduled air service is provided by Great Lakes Airlines. The airline offers daily scheduled passenger air service to Denver International Airport with a 30-passenger Embraer EMB-120 regional aircraft. Great Lakes Airlines is a United Airlines code share partner. A-3 Utilities and Infrastructure Westar Energy supplies electricity and Kansas Gas Service provides natural gas to the City. The City owns its own water and sewage system. Additionally, the City is responsible for street maintenance and police and fire protection for the Airport. SBC provides telephone service. Two cellular phone companies provide service to the City. Health Facilities The City is served by Salina Regional Health Center ("SRHC"), a 394-bed (223 staffed) regional facility. SRHC is an acute care facility for the diagnosis and treatment of all types of diseases and conditions, and includes a cancer treatment center and two medical office buildings. The institution is also a 50% partner in a separate surgical hospital adjacent to the Asbury campus of SRHC. Several other facilities providing mental health services, counseling, and alcohol and drug dependency treatment programs are located in the City. Financial Institutions Four banks are headquartered in the City and reported combined deposits in excess of $969.01 million as of Fall 2018. A savings bank has a branch office in the City. There are several credit unions available in the city. Source: Kansas Bank Directory P~n!iion ::ind Employ~~ R~tir~m~nt Pl::in!i The Issuer participates in the Kansas Public Employees Retirement System ("KPERS") established in 1962, as an instrumentality of the State, pursuant to K.S.A. 74-4901 et seq., to provide retirement and related benefits to public employees in Kansas. KPERS is governed by a board of trustees consisting of nine members each of whom serve four-year terms. The board of trustees appoints an executive director to serve as the managing officer of KPERS and manage a staff to carry out daily operations of the system. As of December 31, 2017, KPERS serves approximately 311,000 members and approximately 1,500 participating employers, including the State, school districts, counties, cities, public libraries, hospitals and other governmental units. KPERS administers the following three statewide, defined benefit retirement plans for public employees: (a) Kansas Public Employees Retirement System; (b) Kansas Police and Firemen's Retirement System; and (c) Kansas Retirement System for Judges. These three plans are separate and distinct with different membership groups, actuarial assumptions, experience, contribution rates and benefit options. The Kansas Public Employees Retirement System is the largest of the three plans, accounting for approximately 95% of the members. The Kansas Public Employees Retirement System is further divided into two separate groups, as follows: (a) State/School Group -includes members employed by the State, school districts, community colleges, vocational-technical schools and educational cooperatives. The State of Kansas makes all employer contributions for this group, the majority of which comes from the State General Fund. (b) Local Group -all participating cities, counties, library boards, water districts and political A-4 subdivisions are included in this group. Local employers contribute at a different rate than the State/School Group rate. KPERS is currently a qualified, governmental, § 401{a) defined benefit pension plan, and has received IRS determination letters attesting to the plan's qualified status dated October 14, 1999 and March 5, 2001. KPERS is also a "contributory" defined benefit plan, meaning that employees make contributions to the plan. This contrasts it from noncontributory pension plans, which are funded solely by employer contributions. The Issuer's employees currently annually contribute 6% of their gross salary to the plan if such employees are KPERS Tier 1 members (covered employment prior to July 1, 2009), KPERS Tier 2 members (covered employment on or after July 1, 2009), or KPERS Tier 3 members (covered employment on or after January 1, 2015). The Issuer's contribution varies from year to year based upon the annual actuarial valuation and appraisal made by KPERS, subject to legislative caps on percentage increases. The Issuer's contribution was 8.39% of the employee's gross salary for calendar year 2018. The Issuer's contribution changed to 8.89% of gross compensation for calendar year 2019. In addition, the Issuer contributes 1% of the employee's gross salary for Death and Disability Insurance for covered employees. According to the Valuation Report as of December 31, 2017 (the "2017 Valuation Report") the KPERS Local Group, of which the Issuer is a member, carried an unfunded accrued actuarial liability ("UAAL") of approximately $1.458 billion at the end of 2017. The amount of the UAAL in 2017 changed from the previous year's amount due to the factors discussed in the 2017 Valuation Report; such report also includes additional information relating to the funded status of the KPERS Local Group, including recent trends in the funded status of the KPERS Local Group. A copy of the 2017 Valuation Report is available on the KPERS website at kpers.org/about/reports.html. The Issuer has no means to independently verify any of the information set forth on the KPERS website or in the 2017 Valuation Report, which is the most recent financial and actuarial information available on the KPERS website relating to the funded status of the KPERS Local Group. The 2017 Valuation Report sets the employer contribution rate for the period beginning January 1, 2020, for the KPERS Local Group, and KPERS' actuaries identified that an employer contribution rate of 8.61% of covered payroll would be necessary, in addition to statutory contributions by covered employees, to eliminate the UAAL by the end of the actuarial period set forth in the 2017 Valuation Report. The statutory contribution rate of employers currently equals the 2017 Valuation Report's actuarial rate. As a result, members of the Local Group are adequately funding their projected actuarial liabilities and the UAAL can be expected to diminish over time. The required employer contribution rate may increase up to the maximum statutorily allowed rate, which is 1.2% in fiscal year 2017 and thereafter. The Issuer has established membership in the Kansas Police and Fire Retirement System ("KP&F") for its police and fire personnel. KP&F is a division of and is administered by KPERS. Annual contributions are adjusted annually based on actuarial studies, subject to legislative caps on percentage increases. According to the 2017 Valuation Report, KP&F carried an UAAL of approximately $859 million at the end of 2017. For KP&F, the Issuer's employees currently annually contribute 7.15% of their gross salary to the plan. For the year beginning January 1, 2018, the Issuer contributes 20.09% of employees' gross compensation. Beginning January 1, 2019, the Issuer's contribution is projected to change to 22.13% of gross compensation for calendar year 2019. The Issuer is required to implement GASB 68 -Accounting and Financial Reporting for Pensions. KPERS produces a Schedule of Employer and Nonemployer Allocations and Schedules of Pension Amounts by Employer and Nonemployer (the "GASB 68 Report") which provides the net pension liability allocated to each KPERS participant, including the Issuer. The GASB 68 Report is available on the KPERS website at kpers.org/about/reports.html. The Issuer has no means to independently verify any of the information set forth on the KPERS website or in the GASB 68 Report. It is important to note that under existing State law, the Issuer has no legal obligation for the UAAL or the net pension liability calculated by KPERS, and such figures are for informational purposes only. A-5 Other Information Public recreation facilities available to city residents include 27 parks, a public golf course, baseball/softball fields, the Kenwood Cove Aquatic Park, the Stifel Theatre for the Performing Arts, the Salina Community Theater, two museums, tennis courts, and ice and roller skating facilities. Two private clubs provide additional recreational opportunities for residents of the City. The Tony's Pizza Events Center (formerly the Bicentennial Center), a 7,500-seat facility, with over 40,000 square feet of exhibit space, nicknamed "Mid-America's Meeting Place", provides a venue for the region's numerous concerts, exhibitions, conventions, and other events are also held in the Center. There are several radio stations in the City. Five standard television stations from Wichita serve the Salina area. Additionally, Cox Communications provides cable television and broadband internet service to subscribing customers. One public library with over 230,000 volumes, two college libraries, a medical library, and a law library are located within the City. ECONOMIC INFORMATION CONCERNING THE CITY The City of Salina benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the City. Such companies include Schwan's Global Supply Chain, Inc., Salina Vortex, GeoProbe, Bergkamp, Kasa Industrial Controls, Premier Pneumatics, Great Plains Manufacturing, PKM Steel, Crestwood Cabinets, McShares, Inc., Pepsi Cola, EIDorado Bus, Exide Battery, Advance Auto Parts Distribution Center, and Philips Lighting. Currently, manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The government sector and wholesale trade industries make up the second tier of Salina employers. The City serves as a 24-county regional trade center for north central Kansas. Many individuals and businesses within a 70-mile radius travel to the City to purchase consumer goods and services. This designation as a regional trade center is supported by the fact that the City had the third highest "trade pull factor" of all Kansas first class cities in 2012 according to Kansas State University. City trade pull factor is computed by dividing the per capita sales tax of a city by the statewide per capita sales tax. According to the Economic Impact Report, from December 31, 2016, over 100 businesses and organizations at the Salina Regional Airport and Airport Industrial Center employed 3,600 employees with a combined payroll in excess of $143.2 million. The report also cited that the Airport/ Airport Industrial Center accounted for 12 percent of the employment in Saline County and 25 percent of the total economic activity in a seven-county area. The Kansas Department of Labor estimated the civilian labor force in the City of Salina for the year 2017 to be 25,815 persons and year-to-date 2018 to be $25,815. The estimated median household income for the City in 2016 was $45,896 and owner-occupied housing rates in the City were 63.7% Salina is a city centered more on industry than agriculture. Currently, there are approximately 100 manufacturing and processing companies located in the City. The City, Saline County, the Chamber of Commerce, and the Salina Airport Authority have developed several economic incentives which can be offered as inducements to opening industrial facilities. These include property tax abatement for basic industry, the waiving of building permit and inspection fees, refunding of sales tax paid on machinery and equipment, and providing training for employees through the Salina Area Technical College and the Kansas State University at Salina. Additionally, a "build- to-suit-tenant" agreement is available on sites in the Airport Industrial Center that can provide 100% financing for land and building costs. A-6 In recent years, Dillon Companies, Inc., a subsidiary of Kroger Company, recently opened a 77,000 square foot facility. Dick's Sporting Goods and Marshalls clothing store opened in a building formerly occupied by Sutherland Lumber Company. In addition, several new restaurants have opened or expanded, including Olive Garden, Longhorn Steakhouse, Starbucks, Taco Bell and Daimaru Steakhouse. The Salina Airport Authority The Salina Airport Authority (the "Authority1') is a body corporate and politic. The Authority was created by the City of Salina in April 1965 pursuant to the authority granted by the City by the surplus property and public airport authority act of the State of Kansas. The Authority was created for the purpose of accepting as surplus property portions of the former Schilling Air Force Base, which was closed by the United States Department of Defense in June 1965. By quitclaim deed the Authority received over 2,900 acres of land and numerous buildings for the purpose of operating and developing the Salina Municipal Airport and the Salina Airport Industrial Center. The Authority is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. In 2012, the Salina Municipal Airport was renamed the Salina Regional Airport. The Salina Regional Airport (the "Airport") is the only commercial service airport serving Salina/Saline County and the 24-county area, which comprises North Central Kansas. The Airport also services the corporate, business, private aviation and flight training needs of industry, business and individuals in the area. The Airport is also used by Kansas State University Polytechnic ("KSUP"). The campus of KSUP is located adjacent to the Airport. KSUP offers degrees in professional flight training, airframe and power plant maintenance, UAS, airport management and avionics technology. In April 2018, SkyWest Airlines began daily United Express Jet Service from Salina to Chicago and Denver. The airline provides maximum connection opportunities for both business and leisure travelers. Customers also have the opportunity to accrue frequent flier miles in United's MileagePlus loyalty program. With 550 daily United and United Express flights from Chicago and 370 daily United and United Express flights from Denver, Salina travelers have access to destinations around the globe. Salina passengers enjoy service aboard the quiet, comfortable Bombardier-manufactured Canadair Regional Jet, CRJ200. SkyWest Airlines is a top CRJ200 operator and has been named manufacturer's most reliable operator in North America five times. Also adding to the increased enplanement count is the Airport's status as an Airport of Embarkation/Debarkation by the Fort Riley, Kansas Army Installation located just 60 miles to the east of Salina on 1-70. The Airport also accommodates a wide variety of aircraft including business jets, military, flight training and general aviation aircraft. During 2018, the Salina Air Traffic Control Tower logged over 69,000 aircraft operations serving the needs of over 7,000 business jets, the professional flight training department of Kansas State University, general aviation and military aircraft. The Airport's fixed base operator, Avflight Salina, delivered over 2.6 million gallons of fuel to the wide variety of aircraft utilizing the Airport during 2018 and 156,531 as of January 2019. The Airport and Airport Industrial Center is home for over 100 businesses and organizations. Fifty-eight of the businesses and organizations are tenants of the Authority. One of the primary functions of the Authority is to facilitate the continued growth of jobs and payroll at the Airport and Airport Industrial Center. The Authority works in partnership with the City of Salina, Saline County, and the Salina Area Chamber of Commerce, and the Kansas Department of Commerce for the retention of existing business and industry and the recruitment of new business and industry. A 2016 report prepared by the Docking Institute at Fort Hays State University cited the business and organizations located at the Salina Regional Airport and Airport Industrial Center contributed approximately 60 percent of the total economic activity in Saline County during 2014. A-7 Major Employers Industrial development during the past ten years has established a broad, industrial base in and around the City. A list of the major employers is as follows. All figures represent total full-time employment excluding seasonal and part-time employees. Name Salina Regional Health Center Schwan's Global Supply Chain, Inc. Unified School District No. 305 Great Plains Manufacturing Exide Technologies City of Salina REV Group Salina Vortex Wal mart Philips Lighting Company Source: Salina Chamber of Commerce Product/Business Healthcare Manufacturing School System Agricultural & Landscaping Equipment Battery Manufacturer City Government Manufacturing Manufacturing Discount Retail Manufacturing Estimated Employment 1,800 1,700 1,500 1,100 600 425 300 250 250 230 The following table shows the per capita personal income for residents of Saline County and the State during the years indicated: Year 2017 2016 2015 2014 2013 2012 Source: Kansas Statistical Abstract Labor Force Saline County N/A $44,732 43,552 41,447 41,096 40,235 State of Kansas $47,603 47,221 47,161 46,393 45,838 44,795 The following tables show the labor force figures for the City of Salina and the State of Kansas. City of Salina: Total Unemployment Year Labor Force Employed Unemployed Rate 2018 25,685 24,784 781 3.1% 2017 26,055 25,198 857 3.3 2016 26,194 25,170 1,024 3.9 2015 26,353 25,313 1,040 3.9 2014 26,303 25,159 1,144 4.4 A-8 State of Kansas: Year 2018 2017 2016 2015 2014 Total Labor Force 1,491,587 1,478,783 1,484,001 1,499,009 1,500,353 Source: Kansas Department of Labor EmploJled 1,445,819 1,425,216 1,422,122 1,435,884 1,432,359 DEBT SUMMARY OF THE CITY Current Indebtedness Unemployment UnemploJled Rate 45,768 3.1% 53,567 3.6 61,879 4.2 63,125 4.2 67,994 4.6 The following is an overview of the City's outstanding indebtedness by classification as of the dated date of the Bonds. Figures do not include bonds for which payment has been provided through the creation of designated escrow accounts. General Obligation Bonds: Date Issued 12-15-08 07-15-09 05-01-10 10-15-10 07-15-11 07-15-12 07-15-12 02-15-13 07-15-13 07-30-14 07-29-15 07-27-16 07-27-16 07-27-17 11-27-18 04-24-19 Total Series 2008-B 2009-A 2010-A 2010-B 2011-A 2012-A 2012-B 2013-A 2013-B 2014-A 2015-A 2016-A 2016-B 2017-A 2018-A 2019-A *Includes the Bonds. Purpose Internal Improvements Internal Improvements Refunding & Improvement Refunding Internal Improvements Internal Improvements Refunding Taxable Improvements Improvements Improvements Revenue and Internal Imp. Internal Improvements Refunding Improvements Improvements Improvements (the Bonds) Amount of Issue $3,525,000 23,695,000 6,875,000 7,860,000 6,565,000 2,365,000 3,785,000 1,360,000 4,330,000 7,570,000 6,825,000 6,570,000 13,750,000 9,310,000 2,090,000 11,090,000 Final Maturi!\' 07-01-24 10-01-20 10-01-20 10-01-23 10-01-21 10-01-27 10-01-20 10-01-28 10-01-33 10-01-34 10-01-35 10-01-36 10-01-31 10-01-37 10-01-33 10-01-39 Amount Outstanding" $1,035,000 2,845,000 650,000 1,720,000 1,095,000 1,495,000 415,000 995,000 3,170,000 5,240,000 5,860,000 6,060,000 13,080,000 9,135,000 2,090,000 11,090.000 $65,975,000 A portion of the City's outstanding general obligation bonds are payable from special assessments levied upon properties benefited by certain internal improvement projects, local option sales tax and transfers from enterprise funds of the City. If such payments are not provided in a timely manner, the principal of and interest on the bonds must then be paid from the City's ability to levy unlimited ad valorem taxes. See FINANCIAL INFORMATION -"Special Assessments" for a further description of special assessment financing. A-9 Temporary Notes: Final Original Date Maturity Note Amount Series Issued Date Amount Outstandingl1l 2018-2 11-27-18 11-15-19 $13,500,000 $4,945,000121 2019-1 04-24-19 05-01-20 6,085,000 6,085,000 $11,030,000 1111ncludes the Notes. l2lExcludes the portion of this note that will be redeemed with proceeds from the sale of the Bonds. Revenue Bonds: Revenue bonds are payable solely from the net revenues derived by the City from the operation of its combined water and sewage system or sales tax collected within certain special districts in the City. Revenue bonds do not represent a general obligation indebtedness of the City for which the City's taxing ability has been pledged. Date Pledged Issued Revenue 04-15-11 Utility System 12-21-18 Special District Sales Tax 12-21-18 Special District Sales Tax Lease Obligations (as of December 31, 2018): State Loans Item HVAC System Vear Issued 2012 Series 2011-A 2018-A 2018-B Original Amount $1,100,000 Amount of Issue $16,120,000 18,250,000 4,320,000 Final Vear 2027 Final Maturitll 10-01-31 12-01-38 12-01-38 Amount Outstanding $782,954 Amount Outstanding $11,850,000 18,250,000 4,320,000 $34,420,000 The following is a list of outstanding loans the City has taken out through the Kansas Department of Health and Environment ("KDHE") or Kansas Department of Transpiration ("KDOT") revolving loan fund programs. KDHE loans are typically repaid by net revenues from municipal water or sewer systems. KDOT loans can be repaid from a variety of sources including, but not limited to, property taxes, special assessments, special highway fund allocations and sales taxes. Regardless of the intended source of repayment, the loans are ultimately secured by the City's ability to levy unlimited ad valorem property taxes. Project Vear Final Original Amount Number Puri~ose Originated Pal£ment Date Amount Outstanding KDHE 2629 Water 2014 08-01-34 $9,330,000 $ 7,559,783 KDHE 2841 Water 2015 08-01-35 4,250,000 3,777,933 $11,337,716 A-10 Overlapping Debt According to the Saline County Clerk's office and bond offering documents, the following table shows the overlapping general obligation indebtedness of the City. The percent of an overlapping jurisdiction's debt that is applicable to the City is calculated by dividing the assessed valuation of that portion of the jurisdiction's boundaries which overlap those of the City by the total assessed valuation of such jurisdiction. Amount Outstanding $ 21,990,000 224,409 117,030,000 Estimated Share of the City Jurisdiction Salina Airport Authority Saline County* Unified School District No. 305 *As of December 31, 2018 Annual Debt Payments Amount $ 21,990,000 164,823 108,969,011 $131,123,835 Percentage 100.00% 73.45 93.11 The following is a list of annual debt service requirements for the City's currently outstanding general obligation bonded indebtedness. All amounts are rounded to the nearest whole dollar. Existing Bonds Series 2019-A Bonds Vear Princi~al Interest Princi~al Interest Total 2019 $6,805,000 $1,665,568 $8,470,658 2020 4,655,000 1,476,904 $240,000 $520,375 $8,470,568 2021 4,455,000 1,339,634 410,000 352,750 $6,892,279 2022 4,540,000 1,186,544 425,000 336,350 $6,557,384 2023 4,380,000 1,011,189 445,000 319,350 $6,487,894 2024 3,995,000 840,269 465,000 301,550 $6,155,539 2025 3,575,000 741,054 480,000 282,950 $5,601,819 2026 3,245,000 649,784 500,000 263,750 $5,079,004 2027 2,980,000 563,089 520,000 243,750 $4,658,534 2028 2,645,000 482,144 535,000 228,150 $4,306,839 2029 2,340,000 407,837 555,000 212,100 $3,890,294 2030 1,840,000 343,774 570,000 195,450 $3,514,937 2031 1,845,000 290,972 585,000 178,350 $2,949,224 2032 1,730,000 236,627 600,000 160,800 $2,899,322 2033 1,685,000 182,794 620,000 142,800 $2,727,427 2034 1,470,000 129,613 640,000 124,200 $2,630,594 2035 1,230,000 83,250 655,000 105,000 $2,363,813 2036 930,000 45,413 680,000 85,350 $2,073,250 2037 540,000 18,225 700,000 64,950 $1,740,763 2038 725,000 43,950 $768,950 2039 740,000 22,200 ~762,200 $54,885,000 $11,694,684 $11,090,000 $4,184,125 $81,853,809 *Excludes payments made prior to the closing date of the Bonds. A-11 Historical Debt Information The following table shows historical balances of outstanding general obligation bonds for the City during the most recent five-year period. Bonds Debt to Debt to U.S. Debt Outstanding Assessed Estimated Actual Census Per Vear December 31 Valuation Valuation PoQulation CaQita 2018 $54,885,000 11.25% 1.74% 46,994* $1,167.92 2017 59,985,000 12.46 1.94 46,994 1,276.44 2016 56,875,000 12.03 1.87 47,336 1,201.52 2015 57,535,000 12.43 1.94 47,813 1,203.33 2014 63,805,000 13.98 2.19 47,867 1,332.96 *Preliminary 2018 population figures are not yet available; 2017 data used for estimation purposes only. Future Indebtedness The City annually prepares and adopts a five-year capital improvements plan. This plan identifies and prioritizes potential capital improvement projects within the City and includes the respective funding sources. Over the next two years the City anticipates issuing general obligation bonds to retire its outstanding general obligation notes as well as providing general obligation note and/or bond funding for approximately $21.95 million of improvements including construction of a riverfront renewal project bridge reconstruction as sanitation system upgrades. A portion of the debt service payments on bonds issued for these projects are anticipated to be paid from local sales tax and sanitation system fees. Borrowing amounts described above do not include future subdivision improvement projects financed with general obligation bonds payable as to both principal and interest in part from special assessments levied upon the benefitted property. The City typically undertakes such projects after receiving and reviewing a valid petition from property owners. See FINANCIAL INFORMATION -"Special Assessments". The City has been involved with civil litigation concerning environmental contamination in certain areas in the vicinity of the Salina Regional Airport and the Salina Airport Industrial Center. The contamination was caused by military activity that occurred between 1942 and 1966 when the site was operated as the Schilling Air Force Base. The City, the Salina Airport Authority, Unified School District No. 305, and Kansas State University {the "Salina Public Entities") sued the United States seeking federal funds to clean up federal agency {DoD) caused contamination. The Salina Public Entities reached a mediated settlement agreement with the U.S. Department of Justice {DOJ) and the terms of the settlement are detailed in a Consent Decree filed in U.S. District Court on May 2nd, 2013. The Consent Decree provided for a 10% local share of initial project costs paid by the City. The Consent Decree provided for a remedial investigation and feasibility study {Rl/FS) to determine the extent and severity of the contamination and to determine the best method of remediation. The Rl/FS has been completed within budget and the parties are awaiting the issuance of the Kansas Department of Health and Environment's Corrective Action Decision {CAD). Issuance of the CAD will provide the basis for the resumption of mediation with the Federal Government to determine respective financial responsibilities for remediating the contamination. If a mediated settlement results in identification of a potentially material local share of the remediation cost, it may be necessary for the City to issue debt to fund the local share. The exact timing and amount, if any, of such borrowing cannot be determined at this time. Debt Payment Record The City has always met principal and interest payments on all outstanding bonds and temporary notes when due and payable. A-12 Legal Debt Limits Cities within Kansas are permitted to issue bonds in an aggregate amount not to exceed 30% of the total assessed valuation of the city. Bonds issued for the purpose of improving, acquiring, enlarging, or extending municipal utilities, including storm and sanitary sewer systems; bonds issued to pay the cost of improvements to intersections and streets in front of city or school district property; bonds for bridges as authorized by a vote of the electors of a city; bonds issued to refund outstanding bonds; and bonds payable from revenue sources other than the general taxing authority of the city are not included in total aggregate debt for purposes of computing a city's debt limitation. FINANCIAL INFORMATION CONCERNING THE CITY Accounting, Budgeting and Auditing Procedures The City follows a modified accrual basis of accounting for all tax supported funds of the City, including the General Fund. An annual budget of estimated receipts and disbursements for the coming calendar year is required by statute to be prepared for all funds (unless specifically exempted). The budget is prepared utilizing the modified accrual basis which is further modified by the encumbrance method of accounting. For example, commitments such as purchase orders and contracts, in addition to disbursements and accounts payable, are recorded as expenditures. The budget lists estimated receipts by funds and sources and estimated disbursements by funds and purposes. The proposed budget is presented to the governing body of the City prior to August 1, with a public hearing required to be held prior to August 15, with the final budget to be adopted by a majority vote of the governing body of the City prior to August 25 of each year (or October 1 if the City must conduct an election to increase property taxes above the tax lid described below). Budgets may be amended upon action of the governing body after notice and public hearing, provided that no additional tax revenues may be raised after the original budget is adopted. The City may levy taxes in accordance with the requirements of its adopted budget. Property tax levies are based on the adopted budget of the City and the assessed valuations provided by the County appraiser. The Kansas Legislature passed legislation in 2015 and 2016 that, among other things, imposes an additional limit on the aggregate amount of property taxes that may be imposed by cities and counties, without a majority vote of qualified electors of the city or county (the ''Tax Lid"). The Tax Lid became effective on January 1, 2017, and provides that, subject to certain exceptions, no city or county may approve an appropriation or budget which provides for funding by property tax revenues in an amount exceeding that of the immediately prior year, as adjusted to reflect the average changes in the consumer price index for the preceding five calendar years and provided that such average shall not be less than zero, unless approved by a majority vote of electors. The Tax Lid does not require an election in the following situations: "(1) Increased property tax revenues that, in the current year, are produced and attributable to the taxation of: (A) The construction of any new structures or improvements or the remodeling or renovation of any existing structures or improvements on real property, which shall not include any ordinary maintenance or repair of any existing structures or improvements on the property; (B) increased personal property valuation; (C) real property located within added jurisdictional territory; (D) real property which has changed in use; (E) expiration of any abatement of property from property tax; or (F) expiration of a tax increment financing district, rural housing incentive district, neighborhood revitalization area or any other similar property tax rebate or redirection program. (2) Increased property tax revenues that will be spent on: (A) Bond, temporary notes, no fund warrants, state infrastructure loans and interest A-13 payments not exceeding the amount of ad valorem property taxes levied in support of such payments, and payments made to a public building commission and lease payments but only to the extent such payments were obligations that existed prior to July 1, 2016; (B) payment of special assessments not exceeding the amount of ad valorem property taxes levied in support of such payments; (C) court judgments or settlements of legal actions against the city or county and legal costs directly related to such judgments or settlements; (D) expenditures of city or county funds that are specifically mandated by federal or state law with such mandates becoming effective on or after July 1, 2015, and loss of funds from federal sources after January 1, 2017, where the city or county is contractually obligated to provide a service; (E) expenses relating to a federal, state or local disaster or federal, state or local emergency, including, but not limited to, a financial emergency, declared by a federal or state official. The board of county commissioners may request the governor to declare such disaster or emergency; or (F) increased costs above the consumer price index for law enforcement, fire protection or emergency medical services. (3) Any increased property tax revenues generated for law enforcement, fire protection or emergency medical services shall be expended exclusively for these purposes but shall not be used for the construction or remodeling of buildings. (4) The property tax revenues levied by the city or county have declined: (A) In one or more of the next preceding three calendar years and the increase in the amount of funding for the budget or appropriation from revenue produced from property taxes does not exceed the average amount of funding from such revenue of the next preceding three calendar years, adjusted to reflect changes in the consumer price index for all urban consumers as published by the United States department of labor for the preceding calendar year; or (B) the increase in the amount of ad valorem tax to be levied is less than the change in the consumer price index plus the loss of assessed property valuation that has occurred as the result of legislative action, judicial action or a ruling by the board of tax appeals." The Tax Lid also provides that "(w]henever a city or county is required by law to levy taxes for the financing of the budget of any political or governmental subdivision of this state that is not authorized by law to levy taxes on its own behalf, and the governing body of such city or county is not authorized or empowered to modify or reduce the amount of taxes levied therefore, the tax levies of the political or governmental subdivision shall not be included in or considered in computing the aggregate limitation upon the property tax levies of the city or county." Because of ambiguities in the Tax lid, it is unclear how the various exceptions will be interpreted and how the provisions will be implemented. As a result, is unclear how the Tax Lid will impact the City. However, as described above, the Tax Lid provides a specific exception for "[b]ond, temporary notes, no fund warrants, state infrastructure loans, and interest payments not exceeding the amount of ad valorem property taxes levied in support of such payments" as well as certain lease payments. Therefore, the City is permitted under the Tax Lid to levy unlimited ad valorem taxes as necessary to pay principal of and interest on the Securities, as required by the Bond Resolution and the Note Resolution. The City cannot predict the impact of the Tax Lid on the ratings on the Securities, or the general rating of the City. A change in the rating on the Securities or a change in the general rating of the City may adversely impact the market price of the Securities in the secondary market. Kansas law prohibits governmental units from creating indebtedness unless there are funds on hand in the proper accounts and unencumbered by previous action with which to pay such indebtedness. An exception to this cash-basis operation is made where provision has been made for payment of obligations by bonds or other specific debt obligations authorized by law. The financial records of the City are audited annually by a firm of independent certified public accountants in accordance with generally accepted auditing standards. In recent years, the annual audit has been performed by A-14 Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. Copies of the audit reports for the past five (5) years are on file in the Clerk's office and are available for review. The audit for the Fiscal Year ended December 31, 2017 is attached hereto as APPENDIX C. The City has historically prepared a Comprehensive Annual Financial Report, which includes audited financial statements and other pertinent credit information. Appropriate periodic credit information necessary for maintaining the ratings on the Bonds will be provided by the City to the rating agencies rating the Bonds. The Governmental Accounting Standards Board (GASB) issued Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments in June 1999 ("Statement 34"), which established new requirements for the annual financial reports of state and local governments. Among the major changes embodied in Statement 34, governments will now be required to: (a) report on the overall state of the government's financial health, not just its overall "funds" in a newly required Management's Discussion and Analysis (MD&A), (b) provide the most complete information available about the cost of delivering services to their citizens in the annual report which will now also include financial statements prepared using full accrual accounting for all of the government's activities, (c) include information about the government's public infrastructure assets - such as bridges, roads and storm sewers, and (d) prepare an introductory narrative section analyzing the government's financial performance. The City has implemented Statement No. 34 in its financial statements. The financial information contained in the Appendices to this Official Statement are an integral part of this document and are intended to be read in conjunction herewith. Financial Statement Summary The following is a summary of the combined revenues, expenditures, and fund balances for the City's General Fund for the most recent years as shown in the City's Comprehensive Annual Financial Reports. This summary has not been prepared or reviewed by the City's auditor. Audited · Audited Audited Audited Revenues: 2014 2015 2016 2017 Property Taxes $ 9,278,832 $9,244,160 $9,217,596 $10,115,784 Sales Tax 12,688,980 12,930,811 12,780,891 12,906,032 Other Taxes 5,636,239 5,663,843 6,347,717 5,215,264 Intergovernmental 1,162,384 975,720 1,301,106 1,133,310 Charges for Services 7,826,289 6,046,903 6,472,698 6,153,450 Investment Revenue 11,536 0 102,045 3,336 Miscellaneous 629,259 498,557 507,330 1,709,491 Total Revenues $37,233,769 $35,359,034 $36,729,383 $37,236,667 Expenditures: General Government $ 3,986,212 $5,342,433 $5,422,010 $5,423,241 Public Safety 19,558,487 21,267,630 21,664,398 21,628,730 Public Works 6,949,477 4,875,641 5,066,426 5,328,315 Public Health and Sanitation 146,178 754,347 703,606 749,656 Culture and Recreation 2,697,564 4,039,856 4,147,736 4,424,221 Planning and Development 2,209,836 586,358 980,950 752,825 Capital Outlay 843,975 1,041,690 1,098,587 896,026 Total Expenditures $36,391,729 $37,907,955 $39,083,713 $39,203,014 Revenues Over (Under) $842,040 $(2,548,921) $(2,354,330) $(1,966,347) Other Sources (Uses) {137,351} 2,962,350 2,546,500 3,816,500 Net Change in Fund Balance $704,689 $413,429 192,170 1,850,153 Fund Balance January 1 $3,549,740 $4,254,432 $4,840,186 $5,032,356 Restatement of Prior Year Balance 0 172,325 0 0 Fund Balance December 31 $4,254,429 $4,840,186 $5,032,356 $6,882,509 A-15 Assessed Valuation According to the Saline County Clerk's Office, the following table gives the November 1 assessed valuation of the City, unless otherwise noted, in the years indicated. State Total Real Personal Assessed Motor Assessed Year Estate Propertll• Utilities Vehicle Valuation 2018 $403,835,383 $10,130,718 $20,485,144 $53,336,677 $487,787,922 2017 399,918,216 10,900,308 19,671,685 50,970,796 481,461,005 2016 389,872,825 11,653,719 19,323,055 51,833,505 472,683,104 2015 381,087,426 12,607,815 18,984,453 50,350,566 463,030,260 2014 376,131,346 13,652,885 17,670,147 48,865,900 456,320,278 *Personal property valuations began to decline in 2006 as a result of legislative action that started the process of removing significant portions of industrial machinery and equipment from the property tax rolls. Estimated Actual Valuation Based on assessment percentages provided by Kansas Statutes, real estate equalization ratios provided by the Kansas Department of Revenue (see FINANCIAL INFORMATION CONCERNING THE CITY -"Property Assessment Rates"), and estimated actual valuation figures provided by the Saline County Appraiser's Office, the following table provides November 1 estimated actual valuations for the City in the years indicated. ~ 2018 2017 2016 2015 2014 2013 Special Assessments Residential Real Estate Equalization Ratio N/A 11.04% 11.36 11.28 11.65 11.55 Estimated Actual Value $3,150,409,123 3,097,885,103 3,046,949,034 2,968,008,193 2,917,267,724 2,889,385,914 The City has pursued a policy of utilizing special benefit districts to assign the cost of certain internal improvement projects to the property that directly benefits from the construction. Kansas statutes allow for the creation of special benefit districts to pay for the cost of a variety of improvements including street construction, storm water drains, sanitary sewer system improvements, street lighting, water system improvements, recreational facilities, flood control projects, bridges, and parking facilities. The City has typically utilized special benefit districts to pay for the costs associated with constructing streets, sidewalks, curbs, gutters, and lighting in new residential developments within the City. When a developer requests the use of Special Assessments to finance public improvements, the City requires that they pay 20% of the estimated cost of the project in cash, or file a letter of credit equivalent to 35% of the estimated cost of the project. The letter of credit is released when Certificates of Occupancy have been issued for 35% of the lots in the development. Special benefit districts have also been created to pay for the cost of improvements to streets and sidewalks in the City's downtown area. The creation of special benefit districts, the determination of property benefited, and the method of allocating the cost of the improvement is at the discretion of the City. Property owners have the ability to suggest improvements through a petition process and to comment on the final amount of their assessment. The City may or may not be included as part of the special benefit district. All property owners have the option to pay their portion A-16 of the improvement cost with a one-time payment during a 30-day assessment prepayment period or pay in annual installments with interest over a certain number of years. Upon completion of the special benefit district improvement projects and a 30-day prepayment period, the City issues general obligation bonds to provide for permanent project financing. The payment of the principal of and interest on such bonds is paid from the special assessments levied annually on the benefited property. Special assessments are paid at the same time and in the same manner as ad valorem property taxes. If at any time the special assessments received from the property owners are insufficient to provide for the payment of the principal of and interest on the bonds, the City is obligated to provide for the balance of such payments through its ability to levy unlimited ad valorem property taxes. Tax Collections Tax statements are mailed November 1 each year and may be paid in full or one-half on or before December 20 with the remaining one-half due on or before May 10 of the following year. Taxes that are unpaid on the due dates are penalized at a statutorily prescribed rate until paid or until the property is sold for taxes. Real estate bearing unpaid taxes is advertised for sale in July of each year and is sold by the County for taxes and all legal charges on the first Tuesday in September. Properties that are sold and not redeemed within two years after the tax sale are subject to foreclosure sale, except homestead properties which are subject to foreclosure sale after three years. Personal property taxes are assessed, due and may be paid in the same manner as real estate taxes. Motor vehicle property taxes are based on valuations provided by the Kansas Department of Revenue and the county average tax rate for the county in which the vehicle is registered. Motor vehicle taxes are payable to the county treasurer at the time of the vehicle's annual registration. Vehicle registration dates are assigned by the State in a manner such as to equal registration over a twelve-month period. Motor vehicle taxes are distributed by the county to the state, city and other taxing jurisdictions based on their proportionate tax levies. Delinquent personal and motor vehicle taxes are penalized at the same rate as delinquent real property taxes. The following is a summary of tax collections for the years shown. Current Current and Delinquent Levy Tax Taxes Tax Collections Tax Collections Vear Rate Levied Amount ~ Amount ~ 2018* 28.394 $12,266,056 $6,998,587 57.1% $6,998,587 57.1% 2017 26.129 11,162,057 10,902,136 97.7 11,015,531 98.7 2016 27.603 11,564,876 11,320,197 97.9 11,524,101 99.6 2015 27.311 11,209,245 10,984,630 98.0 11,169,600 99.6 2014 27.080 10,991,959 9,312,515 84.7 10,832,972 98.6 2013 26.927 10,868,225 8,101,775 74.5 10,839,120 99.7 2012 26.190 10,550,730 6,597,038 62.5 10,500,249 99.5 *Represents collections through December 31, 2018. Tax Levies Nov Nov Nov Nov Nov Nov 2013 2014 2015 2016 2017 2018 Levy Levy Levy Levy Levy Levy City of Salina 26.927 27.080 27.311 27.603 26.129 28.394 Salina Library 5.761 6.034 5.895 5.893 5.989 6.014 State Education & Other 1.500 1.500 1.500 1.500 1.500 1.500 Unified School District No. 305 58.116 55.605 56.120 55.743 56.501 57.522 Airport Authority 4.504 4.486 4.396 4.396 4.225 4.998 Central Kansas Extension District 1.176 1.285 1.502 1.510 1.475 1.476 A-17 Saline County Total Largest Taxpayers 37.895 37.047 38.275 37.508 37.321 135.879 134.037 134.999 134.153 133.140 38.437 138.341 According to the Saline County Clerk's Office, the following table lists the largest taxpayers in the City, their November 2018 assessed valuations, and the percentage each taxpayer comprised of the total assessed valuation of the City. %of Type of Assessed Total Company Business Valuation Valuation Westar Utility $12,566,193 2.61% SFC Global Supply Chain Inc Manufacturing 7,015,419 1.46% RAF Salina LLC Regional Shopping Center 4,344,669 0.90% Kansas Gas Service Utility 3,971,538 0.82% S&B Motels Inc Motel 3,450,351 0.72% Central Mall Realty Holding LLC Retail Shopping Center 3,121,883 0.65% Union Pacific Railroad Co. Railroad 2,512,458 0.52% Menard Inc. Home Improvement Store 2,465,163 0.51% Individual Residential 2,397,798 0.50% Sams Real Estate Business Trust/Walmart Discount Store 2,308,958 0.48% Total $44,154,430 9.17% Building Permits Issued Building permits issued by the City currently maintain steady levels. This table reflects both private developments as well as the expansion to the educational facilities in the community. The five-year history of the total value of permits issued is: Sales Tax Year 2019 (Feb) 2018 2017 2016 2015 2014 Value $5,725,517 71,862,718 59,975,197 97,910,328 56,989,007 24,214,432 Sales tax collections are the responsibility of the Kansas Department of Revenue. The Department of Revenue distributes the local option countywide and citywide sales taxes. on a monthly basis. Countywide sales taxes are distributed between the levying county and the cities located within the county based on population and relative tax levies. Citywide local option sales taxes are distributed solely to the levying city. Statewide sales taxes are retained entirely by the state. In 1982 the voters of Saline County, in accordance with Kansas statutes, approved a 1% countywide local option sales tax. In 1992 voters of the City approved a local option .50% citywide sales tax for purposes of helping fund general operations expenditures of the City. Both of these taxes were approved in perpetuity. In May of 2016, voters approved a .75% citywide retailers sales tax that will be in existence for 20 years and will be used for capital improvements and economic development. The 2016 sales tax replaced an existing sales tax of .40%. A-18 The total sales tax for goods and services in the City is 8. 75%, which consists of 6.5% imposed by the State, 1% countywide local option sales tax, and 1.25% citywide local option sales tax. The following table lists the local- option sales tax receipts of the City of Salina in the years indicated. 11lAs of March 2019 Year 2019!l) 2018 2017 2016 2015 2014 2013 Citywide Local Option Sales & Use Tax Receipts $3,696,906 14,632,584 14,404,702 10,458,630 10,372,573 10,099,512 9,705,026 City's Portion of 1% Countywide Local Option Sales & Use Tax Receipts $1,876,658 7,415,804 7,368,869 7,312,618 7,376,708 7,188,934 6,998,806 !2lCollections prior to October 1, 2016 represent taxes attributable to a .40% sales tax that was replaced with the .75% 2016 sales tax. Prior to October 1, 2016 the citywide aggregate sales and use tax rate was .90%. The aggregate rate was increased to 1.25% as a result of the approval of the 2016 sales tax discussed above. Source: Kansas Department of Revenue Appraisal and Assessment Procedures The determination of appraised and assessed valuation and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various coonties. The Saline County appraiser annually determines the appraised valuation of property located in the City. The appraiser's determination is based on a number of criteria established by Kansas's statute. All property, with the exception of agricultural land, is appraised based on estimated fair market value. Agricultural property is appraised based on productivity value. Kansas statutes require that each parcel of real property be reviewed and inspected by the county appraiser once every four years for taxation purposes. Once appraised valuations have been determined, they are multiplied by the applicable statutory assessment rates to arrive at the assessed valuations. The total assessed valuation is then used to establish property tax rates. Property Valuation Challenges. Taxpayers may challenge the appraised value of their property by paying property taxes under protest. Such challenges are subject to administrative and judicial review. Taxes paid under protest are distributed to taxing jurisdictions in the same manner as all other property tax collections. If a taxpayer's challenge to the appraiser's valuation is successful, the county is liable to refund the amount of property taxes attributable to the protested value that was previously paid under protest. The county will then withhold from future property tax distributions to other taxing jurisdictions an amount equal to the jurisdiction's pro rata share of such refund. Any such withholdings from future property tax distributions may have a material adverse effect on the City's financial situation. Property Assessment Rates In order to determine the assessed valuation of a parcel of property for taxation purposes, the county appraiser multiplies the appraised value of the parcel by the applicable assessment rate. Current property assessment rates were established in 1986, effective in 1989, and slightly modified in 1992. The most significant 1992 modifications involved lowering the assessment rate on commercial and industrial real property from 30% to A-19 25% and on residential property from 12% to 11.5%. The following table shows the current assessment rates for the different classes of taxable tangible property within the State of Kansas. Real Property: Residential Commercial and Industrial- Real Property Agricultural Land (1) Agricultural Improvements Vacant Lots Not-for-Profit (2) All Other Personal Property: (3) Mobile Homes Mineral Leaseholds (large) Mineral Leaseholds (small) Commercial & Industrial Machinery & Equipment All Other Utilities: Railroads All Other Public Utilities Motor Vehicles: Property Exempt: 11.5% 25.0 30.0 25.0 12.0 12.0 30.0 11.5% 30.0 25.0 25.0 30.0 federally mandated rate 33.0% 20.0% Property used for the following purposes, or portions thereof, are exempt from taxation provided certain statutory requirements are met: religious, educational, literary, scientific, benevolent, alumni associations, veterans' organizations, or charitable purposes, including parsonages and community service organizations providing humanitarian services. (1) Agricultural land is valued based on the productivity value of the property and not estimated market valuation. (2) A bill passed by the Kansas Legislature in 1994 clarified this class of property to include all property owned and operated by not-for-profit organizations not subject to federal income taxation pursuant to paragraphs (2), (3), (4), (7), (8), or (10) of Subsection C of Section 501 of the federal internal revenue code. This bill specifically established that private, not-for-profit country clubs would be assessed at 12% for all land that does not accommodate buildings or improvements. (3) The 2006 Kansas Legislature exempted from all property or ad valorem property taxes levied under the laws of the State, all commercial, industrial, telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existing business or creation of a new business. Equalization Ratios Annually, the Property Valuation Division of the Kansas Department of Revenue conducts a study to compare the assessed valuation of real property to estimated market value based on property sale prices. The study derives an equalization ratio which, when divided into assessed valuation, provides a means to approximate actual market value. According to the 2017 Preliminary Kansas Appraisal/Sales Ratio Study, the equalization ratio for residential real property in Saline County was 11.98%, and commercial and industrial property was 24.34%. A-20 APPENDIX B Form of Continuing Disclosure Undertaking CONTINUING DISCLOSURE UNDERTAKING Sll,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2019-A $6,085,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 DATED APRIL 24, 2019 This CONTINUING DISCLOSURE UNDERTAKING dated as of April 24, 2019 (the "Continuing Disclosure Undertaking"), is executed and delivered by the City of Salina, Kansas (the "lssu er"). RECITALS 1. This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance of the above-described bonds and notes (collectively, the "Obligations") which are being issued simultaneously herewith as of April 24, 2019, pursuant to the Bond Resolution and Note Resolution (collectively, the "Resolution") adopted by the governing body of the Issuer. 2. The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Obligations and in order to assist the Participating Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"). The Issuer is the only "obligated person" with responsibility for continuing disclosure hereunder. The Issuer covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Continuing Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 2 of this Continuing Disclosure Undertaking, which may include the Issuer's CAFR, so long as the CAFR contains the financial information and operating data described in Section 2(a)(l) and (2). "Beneficial Owner" means any registered owner of any Obligations and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Obligations (including persons holding Obligations through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Obligations for federal income tax purposes. "Business Day" means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal office or designated payment office of the paying Continuing Disclosure Undertaking agent or the Dissemination Agent is located are required or authorized by law to remain closed, or (c) a day on which the Securities Depository or the New York Stock Exchange is closed. "CAFR" means the Issuer's Comprehensive Annual Financial Report, if any. "Dissemination Agent" means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to this Continuing Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of (a) or (b) in this definition; provided however, the term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. "Fiscal Year" means the 12-month period beginning on January 1 and ending on December 31 or any other 12-month period selected by the Issuer as the Fiscal Year of the Issuer for financial reporting purposes. "Material Events" means any of the events listed in Section 3 of this Continuing Disclosure Undertaking. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "Participating Undenvriter" means any of the original underwriter(s) of the Obligations required to comply with the Rule in connection with the offering of the Obligations. Section 2. Provision of Annual Reports. (a) The Issuer shall, not later than 180 days after the end of the City's Fiscal Year, commencing with the Fiscal Year ending December 31, 2018, file with the MSRB, through EMMA, the following financial information and operating data (the "Annual Report"): (1) The audited financial statements of the Issuer for the prior Fiscal Year, prepared on a modified accrual basis of accounting other than GAAP. A more detailed explanation of the accounting basis is contained in the Official Statement related to the Obligations. If audited financial statements are not available by the time the Annual Report is required to be provided pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Obligations, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. Continuing Disclosure Undertaking 2 (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement related to the Obligations, as described in Exhibit A, in substantially the same format contained in the final Official Statement with such adjustments to formatting or presentation determined to be reasonable by the Issuer. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been provided to the MSRB and are available through EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3, and the Annual Report deadline provided above shall automatically become 180 days after the end of the Issuer's new Fiscal Year. (b) Pursuant to Section (d)(3) of the Rule, the provisions of Section 2 hereof shall not apply to the Notes, because they have a stated maturity of less than 18 months. (c) The Annual Report shall be filed with the MSRB in such manner and format as is prescribed by the MSRB. Section 3. Reporting of Material Events. Not later than 10 Business Days after the occurrence of any of the following events, the Issuer shall give, or cause to be given to the MSRB, through EMMA, notice of the occurrence of any of the following events with respect to the Obligations ("Material Events"): (I) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (I 0) release, substitution or sale of property securing repayment of the Obligations, if material; (11) rating changes; Continuing Disclosure Undertaking 3 (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation of a merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of the trustee, if material; (15) incurrence of a Financial Obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties. Except as provided in Section 2(b) hereof, ifthe Issuer has not submitted the Annual Report to the MSRB by the date required in Section 2(a), the Issuer shall send a notice to the MSRB of the failure of the Issuer to file on a timely basis the Annual Report, which notice shall be given by the Issuer in accordance with this Section 3. Section 4. Termination of Reporting Obligation. The Issuer's obligations under this Continuing Disclosure Undertaking shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Obligations. If the Issuer's obligations under this Continuing Disclosure Undertaking are assumed in full by some other entity, such person shall be responsible for compliance with this Continuing Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Obligations, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3. Section 5. Dissemination Agents. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Continuing Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Continuing Disclosure Undertaking. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Undertaking, the Issuer may amend this Continuing Disclosure Undertaking and any provision of this Continuing Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Undertaking. In the event of any amendment or waiver of a provlSlon of this Continuing Disclosure Undertaking, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact Continuing Disclosure Undertaking 4 on the type (or, in the case of a change of accounting principles, on the presentation) of financial infonnation or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (I) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative fonn) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Continuing Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other infonnation, using the means of dissemination set forth in this Continuing Disclosure Undertaking or any other means of communication, or including any other infonnation in any Annual Report or notice of occurrence of a Material Event, in addition to that required by this Continuing Disclosure Undertaking. If the Issuer chooses to include any infonnation in any Annual Report or notice of occurrence of a Material Event, in addition to that specifically required by this Continuing Disclosure Undertaking, the Issuer shall have no obligation under this Continuing Disclosure Undertaking to update such infonnation or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Default. If the Issuer fails to comply with any provision of this Continuing Disclosure Undertaking, any Participating Underwriter or any Beneficial Owner of the Obligations may take such actions as may be necessary and appropriate, including seeking mandamus or specific perfonnance by court order, to cause the Issuer to comply with its obligations under this Continuing Disclosure Undertaking. A default under this Continuing Disclosure Undertaking shall not be deemed an event of default under the Resolution or the Obligations, and the sole remedy under this Continuing Disclosure Undertaking in the event of any failure of the Issuer to comply with this Continuing Disclosure Undertaking shall be an action to compel perfonnance. Section 9. Beneficiaries. This Continuing Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Participating Underwriter, and the Beneficial Owners from time to time of the Obligations, and shall create no rights in any other person or entity. Section 10. Severability. If any provision in this Continuing Disclosure Undertaking, the Resolution or the Obligations shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11. Electronic Transactions. The arrangement described herein may be conducted and related documents may be sent, received, or stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 12. Governing Law. This Continuing Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Kansas. [Remainder of Page Intentionally Left Blank.] Continuing Disclosure Undertaking 5 IN WITNESS WHEREOF, the Issuer has caused this Continuing Disclosure Undertaking to be executed as of the day and year first above written. CITY OF SALINA, KANSAS (SEAL) Mayor City Clerk Continuing Disclosure Undertaking S-1 EXHIBIT A TO CONTINUING DISCLOSURE UNDERTAKING FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial infonnation and operating data contained in the following sections and tables contained in Appendix A of the final Official Statement (with such modifications to the fonnatting and general presentation thereof as deemed appropriate by the Issuer) relating to the Obligations: • Financial Overview of the City • FINANCIAL INFORMATION CONCERNING THE CITY -Assessed Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Estimated Actual Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Collections • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Levies • FINANCIAL INFORMATION CONCERNING THE CITY -Largest Taxpayers APPENDIXC December 31, 2017 Comprehensive Annual Financial Report The following is the Comprehensive Annual Financial Report for the City of Salina, Kansas for the fiscal year ended December 31, 2017, including financial statements as audited by the firm of Mize Houser & Company, P.A., Certified Public Accountants, Topeka, Kansas. CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31 , 2017 Letter of Transmittal Organizational Chart List of Principal Officials Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements: Government-wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet -Governmental Funds TABLE OF CONTENTS INTRODUCTORY SECTION FINANCIAL SECTION Reconciliation of the Total Governmental Fund Balance to Net Position of Governmental Activities Statement of Revenues, Expenditures, and Changes in Fund Balance -Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance with the Government-Wide Statement of Activities Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GAAP Basis) General Fund Tourism and Convention Fund Special Gas Fund Sales Tax Capital Fund Statement of Net Position -Proprietary Funds Statement of Revenues, Expenses, and Changes in Net Position -Proprietary Funds Statement of Cash Flows -Proprietary Funds Statement of Assets and Liabilities -Agency Funds i -iv v vi 1 -3 4 -15 16 17 18 19 20 21 22 23 24 25 26 27 28 -29 30 CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2017 TABLE OF CONTENTS -CONTINUED FINANCIAL SECTION -CONTINUED Notes to the Basic Financial Statements Required Supplementary Information Schedule of Funding Progress and Schedule of Employer Contributions KPERS Pension Plan Schedule of City's Proportionate Share of the Net Pension Liability Schedule of City Contributions Combining Statements and Individual Fund Schedules Combining Statements -Nonmajor Funds Fund Descriptions Combining Balance Sheet -Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds Combining Balance Sheet -Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Special Revenue Funds Combining Balance Sheet -Nonmajor Permanent Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Permanent Funds Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Non-GAAP Basis): Bicentennial Center Fund Business Improvement City Fund Neighborhood Park Fund Special Parks and Recreation Fund Special Alcohol Fund Sales Tax Economic Development Fund Arts & Humanities Fund Debt Service Fund Solid Waste Disposal Fund Water and Sewer Fund Sanitation Fund Golf Course Fund Workers' Compensation Reserve Fund Health Insurance Fund Central Garage Fund 31 -67 68 69 69 70-71 72 73 74-75 76-77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 Internal Service Fund Descriptions CITY OF SALINA, KANSAS Comprehensive Annual Financial Report For the year ended December 31, 2017 TABLE OF CONTENTS -CONTINUED FINANCIAL SECTION -CONTINUED Combining Statement of Net Position -Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Net Position -Internal Service Funds Combining Statement of Cash Flows -Internal Service Funds Fiduciary Fund Descriptions -Agency Funds Combining Balance Sheet -Agency Funds Combining Statement of Changes in Assets and Liabilities -Agency Funds Net Position by Component-Last Ten Years Changes in Net Position -Last Ten Years STATISTICAL SECTION Fund Balances, Governmental Fund -Last Ten Years Changes in Fund Balances, Governmental Funds -Last Ten Years Tax Revenues by Source, Governmental Funds -Last Ten Years Assessed and Estimated Actual Value of Taxable Property -Last Ten Years Direct and Overlapping Property Tax Rates-Last Ten Years Principal Property Tax Payers Property Tax Levies and Distributions Direct Sales Rate by Taxing Entity Water Sales by Class of Customer Ratio of Outstanding Debt by Type Ratio of Net General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Pledged Revenue Coverage Demographic and Economic Statistics Principal Employers Page 95 96 97 98-99 100 101 102 Schedule 1 103 2 104 3 105 4 106 5 107 6 108 7 109 8 110 9 111 10 112 11 113 12 114 13 115 14 116 15 117 16 118 17 119 18 120 INTRODUCTORY SECTION DEPARTMENT OF FINANCE AND ADMINISTRATION 300 West Ash, P.O. Box 736 Salina, Kansas 67402-0736 October 12, 2018 Salina To the Citizens of the City of Salina, Kansas: TELEPHONE (785) 309-5735 FAX (785) 309-5738 TDD (785) 309-5747 Website: www.salina-ks.gov The Comprehensive Annual Financial Report of the City of Salina, Kansas (the "City") for the year ended December 31, 2017, is hereby submitted. The City's Finance Department prepared the report. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of all various funds and account groups of the City. We believe that all disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. Report Format The Comprehensive Annual Financial Report is presented in three sections: Introductory, Financial and Statistical. The introductory section includes a description of the City, including services provided, and explanation of the City's accounting system and budgetary controls, and a brief discussion of the City's economic condition and outlook. The City's organizational chart is also included to assist the reader in understanding the structure of the City. The financial section includes the Independent auditor's report, Management's discussion & analysis, Government wide financial statements, Fund financial statements, Notes to the financial statements, and Individual and combining statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multi-year basis. The reader is specifically directed to Management's Discussion and Analysis (MD&A) which immediately follows the independent auditor's report. MD&A provides a narrative explanation and overview of significant features and trends reflected by data in the financial statements. Accounting Systems and Internal Controls A critical part of the control system is the City's comprehensive Budgetary and Financial Policies, which establish guidelines for budgetary and financial practices. The Budgetary and Financial Policies are reviewed by the City Commission and updated each year as a part of the budget process. City staff is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse and that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute. assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits require estimates and judgment by management. The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the Fund level, in accordance with State Statutes. However, management control is maintained at the department level. The City uses an encumbrance accounting system, in which estimated purchase amounts are recorded prior to the release of purchase orders to vendors. Open encumbrances are reported as reservations of fund balance at December 31, 2017 in the general fund and the special revenue funds. Various internal compliance procedures are implemented to insure proper implementation of the budget as well as to maintain a degree of accountability for both revenues and expenditures. Independent Audit Kansas Statutes Annotated 75-1122 requires an annual audit of the books of account, financial records and transactions of all administrative departments of the City by independent certified public accountants selected by the City Commission. This requirement has been complied with and the auditor's opinion has been included in this report. Profile of the Community I The Town of Salina was organized in 1858 under the Town and Village Act in the State of Kansas, and became a City of the First Class on July 9, 1920. The City has had a Commission-City Manager form of government since 1921. The Commission is comprised of five members elected at large. Each year the commission chooses one member to act as Mayor. The City Manager is appointed by the Commission, and acts as its primary agent in accordance with state statute. Other city officers and employees are appointed by the City Manager. The current population of the City is 47,336. The reporting entity includes the City of Salina as well as two discretely presented component units, both proprietary fund types. The Salina Airport Authority operates the Salina Municipal Airport and Airport Industrial Center, and the Salina Housing Authority administers public housing programs within the City of Salina. The entity also includes one blended component unit. Salina Field House Qualified Active Low- Income Community Business, Inc. (SFH QalicB). SFH QalicB was created for the purpose of providing an indoor sports facility in the downtown corridor of the city of Salina. In addition, the City of Salina participates in a joint venture with Saline County, the City-County Building Authority. This report includes all funds and account groups of the City .. The City provides a full range of services including police and fire protection, development services, construction and maintenance of streets, drainage facilities and other infrastructure; recreational activities and cultural events; emergency medical services and convention facilities. In addition to general government activities, the City also provides water, wastewater, sanitation, and solid waste services; therefore, these activities are included in the reporting entity. Economic Outlook and Strength The City benefits from its location at the junction of Interstate Highways 70 and 135. This convenient location has drawn numerous national and regional companies to open manufacturing or distribution centers in or adjacent to the community. Such companies include Pepsi-Cola, Exide Technologies, Blue Philips Lighting Company, EIDorado National, and Schwan's Global Supply Chain. Manufacturing, retail trade, and service industries rank as the three primary employers in the City. No single industry is dominant. The City of Salina retains its position near the top of a list of first class cities with respect to "trade pull factor." The pull factor measures the degree to which a city or county area captures retail trade from outside the jurisdiction. A pull factor of greater than 1 indicates that a city is attracting more retail trade from outside the city/county than it is losing to other counties. It is apparent from this that Salina continues to serve as a regional economic hub in 2017. Major Initiatives In April, 2016, voters elected to replace the .40 cent capital improvement sales tax with a .75 cent capital improvement sales tax for a term of 20 years. Priorities for the sales tax are improving neighborhood streets and drainage, preserving stable property tax rates, ensuring a quality park system, constructing and maintaining community improvements, funding equipment for maintenance, repayment of future bonds for large projects and attracting quality jobs. As a result of this initiative, the City has seen a 38% increase in sales tax collections in 2017 as compared to 2016. In July of 2017, the Salina Field House was opened for business. Other major projects that were on going, included reconstruction on Country Club Road, South Well Field improvements, continued improvements to ii the water distribution system and preliminary design on the Smoky Hill River Renewal and Police Training Center projects. The City continues to address fiduciary pressures generated by a recessionary economy. General adjustments to the pay plan for cost of living changes at a rate of 2% were implemented in 2017. The City also allowed for merit review increases up to 3%. Capital Improvement Planning The City's Capital Improvement Plan (CIP) consists of two components. One component consists of "routine" capital-including vehicle and equipment replacement, technology replacement, building repair and improvement, routine pavement maintenance activity, utility system enhancements and similar items. The amount of funding for these projects may fluctuate based on needs and funding availability, however, planned amounts are allocated over a multi-year period. Source of funding for routine capital is current cash resources from the fund appropriate to the nature of the purchase. The second component of the CIP includes major projects that typically require issuance of bonds or notes, although these projects may also be supplemented with available cash and grant financing. The plan is updated each year after an extensive evaluation of the demands on future financial resources. The Capital Improvement program is scheduled for a major revision as the result of the sales tax to be used for that purpose. Construction initiated: • 2018 2019 2020 2021 2022 Sales tax $ 8,260,500 $ 4,380,000 $ 4,385,000 $ 4,390,000 $ 3,895,000 Water & wastewater fund 1,776,101 General obligation bonds 4,500,000 6,135,000 25,000,000 Revenue bonds 38,250,000 4,000,000 5,850,000 32,000,000 4,000,000 Other sources 7,810,000 750,000 $ 60,596,601 $ 15,265,000 $35,235,000 $36,390,000 $ 7,895,000 *The year a project is scheduled reflects the year that construction is initiated. Preliminary work (design, acquisition) may precede this date by one or more years, and permanent financing may not occur until one (or more years depending on project magnitude) subsequent to this date. Financial Policies The City has adopted a formal set of Budgetary and Financial Policies, addressing such items as fund balances, capital improvements, operating budgets, long term debt management, accounting, auditing and financial reporting, revenues, cash management and investments. Financial policies contribute to financial stability by: 1. Providing consistent guidance in decision making 2. Establishing appropriate levels of fund balances 3. Governing the use of one time or unanticipated resources 4. Providing a multi-year capital improvements process 5. Establishing responsibilities and deadlines for budget preparation 6. Providing for a balanced annual operating budget 7. Providing guidelines on the use of debt, including appropriate purposes and terms 8. Provide a linkage between capital improvement scheduling and long term debt management planning 9. Require annual audits and financial reporting in conformance with Generally Accepted Accounting Procedures 10. Require timely and regular interim financial reporting to the Governing body 11. Insure the safety of cash and near cash resources (timely collection of Accounts Receivable, etc.). iii Acknowledgments The preparation of the Comprehensive Annual Financial Report was made possible by the dedicated Finance staff of the City of Salina and the professional advice and efforts of the Mize Houser auditing team. Finally, preparation of this report would not have been possible without the support of the City Commission. iv Municipal Court Risk Management Development Services Lauren Driscoll Building Services Neighborhood Services Planning & Zoning Community Relations Parks & Recreation Chris Cotten Parks Division Recreation Division Golf Course Facility Maintenance Animal Services •r ony' s Event Center Engineering Public Services Streets Traffic Control Flood Control Sanitation Solid Waste Central Garage Computer Technology Jack Rolfs CITIZENS CITY COMMISSION Karl Ryan, Mayor Trent Davis Melissa Rase Hodges Mike Hoppock Joe Hay Interim City Manager Michael Schrage ...................... -............................................................................... ~ Deputy City Manager Michael Schrage Finance/ Administration Debbie Pack Water Plant Division Wastewater Plant Division Utility Division Water Distribution Wastewater Collection Arts & Humanities Brad Andersan ( Smoky Hill Museum v City Clerk Water Customer Accounting Finance Leg a I Services Clark Mize & Linville Chartered* Greg Bengtson Continuous Process Improvement Scott Gardner Fire Kevin Royse Fire Administration Fire Suppression Fire Prevention EMS Human Resources Natalie Fischer Administration Patrol Division Support Division Investigative Division City of Salina, Kansas List of Principal Officials City Commission Karl Ryan, Mayor Trent Davis, Vice Mayor Mike Hoppock, Commissioner Melissa Hodges, Commissioner Joe Hay, Jr, Commissioner City Executive Staff Michael Schrage, Interim City Manager Lauren Driscoll, Director of Development Services Debbie Pack, Director of Finance and Administration Jack Rolfs, Director of Computer Technology Natalie Fischer, Director of Human Resources Greg Bengston, City Attorney Brad Nelson, Chief of Police Kevin Royse, Fire Chief Daniel Stack, City Engineer Jim Kowach, Director of Public Works Martha Tasker, Director of Utilities Chris Cotton, Director of Parks and Recreation Brad Anderson, Director of Arts and Humanities vi FINANCIAL SECTION Mayor and City Commissioners City of Salina, Kansas Report on the Financial Statements INDEPENDENT AUDITOR'S REPORT II MI ZE;.;.,HOUSER v,OMPANYrA We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of and for the year ended December 31, 2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statemehts in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the Kansas Municipal Audit and Accounting Guide. Those standards require we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. We did not audit the financial statements of the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB), which is included within the financial statements as a major governmental fund. This activity represents 6% and 0%, respectively, of the total assets and total revenues of the governmental funds. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for SFH QalicB, is based solely on the report of the other auditors. We also did not audit the financial statements of the Salina Airport Authority which statements reflect total assets and deferred outflows of resources of $47, 156,349 as of December 31, 2017 and total revenues of $5,559,861 for the year then ended, and the Housing Authority of the City of Salina which statements reflect total assets and deferred outflows of resources of $7,613,952 as of June 30, 2017 and total revenues of $2,623,955 for the year then ended, which are discretely presented component units in the accompanying financial statements. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Salina Airport Authority and the Housing Authority of the City of Salina is based solely on the reports of the other auditors. www.mlzehouser.com • mhco@mlzehouser.com 534 S Kansas Ave, Sutte 700 •Topeka, KS 66603-3465 • 785.233.0536 p • 785.233.1078 f 534 S Kansas Ave, Sutte 400 •Topeka, KS 66603-3454 • 785.234.5573 p • 785.234.1037 f 7101 College Blvd, Sutte 900 •Overland Park, KS 66210-1984 • 913.451.1882 p • 913.451.2211 f 211 E Eighth Sutte A• Lawrence, KS 66044-2n1 • 785.842.8844 p • 785.842.9049 f 1 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business- type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Salina, Kansas, as of December 31, 2017, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General, Tourism and Convention, Special Gas and Sales Tax Capital Funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 15 and the schedules of funding progress on page 68, the schedule of the City's proportionate share of the net pension liability on page 69 and the schedule of City contributions on page 69 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical tables as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying account and other records used to prepare the basic financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. 2 The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Certified Public Accountants Lawrence, Kansas October 12, 2018 3 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 (Unaudited) This section of the report contains an overview and analysis of the City of Salina's financial statements for the fiscal year ended December 31, 2017. The information contained here, as well as the information contained in the letter of transmittal, are intended to provide the reader of the financial statements with a well-rounded picture of the City's financial condition. Financial Highlights + On an accrual basis, the City's government-wide net position increased $9.4 million from current operations with net position increases of $7.8 million and $1.6 million in governmental activities and business-type activities, respectively. + At the close of 2017, the City's governmental funds reported combined ending fund balances of $21.8 million, an increase of $5.1 million from the prior year. This primarily resulted from issuance of general obligation bonds in the Capital Projects Fund and the capital project expenditures in the SFH QalicB Fund. The General Fund balance increased $1.9 million over the prior year. + At the close of 2017, the City's enterprise funds reported a combined ending Net Position of $89.1 million, an increase of $1.5 million over prior year. Positive performance was shared by all enterprise funds, with the Water and Sewer Fund providing the bulk of the change ($.9 million). , + Revenues from governmental funds decreased $.6 million from the prior year and revenues from business type funds increased $1.1 million from the prior year. • Revenues from investments continue to be minimal. The Basic Financial Statements The basic financial statements of the City include the government-wide financial statements and the fund financial statements. The notes to the financial statements follow the basic financial statements and are essential for the reader's understanding of the financial statements. Other supplementary information, including the combining schedules for non-major funds and the budgetary comparison reports, are at the end of this report to provide additional information for the reader. Government-wide Financial Statements The government-wide financial statements present the results of the City's operations using the accrual basis of accounting, the same basis as is used by private sector businesses. These statements focus on the long-term financial picture of the City as a whole. The Statement of Net Position reports all of the City's assets and liabilities. Net position, the difference between assets and deferred outflows of resources and liabilities, are an important measure of the City's overall financial health. Net position represents the total accumulated and unused resources available to the City for the purpose of providing services. Over time, the increases and decreases in net position can be monitored to determine if the City's financial position is improving or deteriorating. The Statement of Activities shows how net position has changed during the fiscal year. One unique feature of this statement is how it shows the revenues and expenses related to specific programs and how much of those programs were supported by the general taxes of the City. Since this statement is prepared on the accrual basis of accounting, all revenues and expenses are included, regardless of when cash is actually received. Both statements show the operations of the City broken down between governmental and business-type activities. Governmental activities are the operations of the City generally supported by taxes, such as public safety (police, fire, and EMS}, public works, public health, and culture & recreation. Business-type activities are operations of the City that are intended to recover a significant portion of their costs through user fees and charges. These include water and sewer, refuse collection, the golf course, and operation of the City solid waste facility. 4 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The government-wide financial statements include the Salina Airport Authority and Salina Housing Authority as discretely presented component units of the City and the Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) as a blended component unit. Note 1, item A in the Notes to the Financial Statements provides a more complete explanation of the relationship between these entities and the City of Salina. Fund Financial Statements The City uses three types of funds to manage its resources: governmental funds, proprietary funds, and fiduciary funds. A fund is a fiscal entity with a set of self-balancing accounts recording financial resources together with all related liabilities and residual equities and balances, and the changes therein. These accounting entities are separated for the purpose of carrying on specific activities or attaining certain objectives in accordance with regulations, restrictions, or limitations. Governmental fund financial statements are prepared on a modified accrual basis. Under this basis, revenues are recognized when they become measurable and available, and expenditures are recognized when the related fund liability is incurred with the exception of long term debt and similar items which are recorded when due. The focus is on the short-term financial picture of the operations of the individual fund, rather than long-term citywide view provided by the government-wide statements. Major governmental funds are presented in individual columns, while non-major governmental funds are aggregated into an "Other Governmental Funds" column. A combining statement for the non-major funds is presented as supplementary information in the back of the report. The information presented in these statements can be compared to the governmental activities information in the government-wide statements. The reconciliation at the end of the fund financial statements details the relationship between the two types of financial statements. Proprietary funds fall into two categories: enterprise funds and internal service funds. All proprietary funds are prepared on the accrual basis of accounting and are used to account for business-type activities. Enterprise fund statements present the same information that is in the government-wide statements for business-type activities, but in greater detail. The City of Salina currently operates four enterprise funds: Sanitation, Solid Waste Disposal, Golf Course, and Water and Sewer. Internal service funds are used to account for the cost of operations shared by various departments of the City. The city operates three internal service funds. Two of these are for self-insurance activity: Workers Compensation Reserve, and Health Insurance. The remaining accounts for the Central Garage operation. A combining statement for these internal service funds can be found in the supplementary information following the notes to the financial statements. Fiduciary funds are used by the City to account for resources held by the City for a third party. Agency funds are a special class of fiduciary fund in which liabilities always equal assets, and thus there is no net position. The City of Salina operates twelve agency funds. Schedules for these funds may be viewed in the supplementary section of this report. Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used. Permanent funds operated by the City include the Citizenship Trust, Cemetery and Mausoleum Endowments, and the Tri-centennial Commission fund. Notes to the Financial Statements The notes to the financial statements are an integral part of the basic financial statements since they contain valuable additional information necessary for gaining a complete understanding of the City's financial statements. Other Information In addition to the basic financial statements and the notes described above, this report also presents the general fund and major special revenue fund's budgetary statements as required supplementary information directly following the notes to the basic financial statements. The combining statements for the non-major funds are shown after the required supplementary information. Finally, the statistical section includes selected statistical data about the City's operations and economy. 5 The City as a Whole CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 This section will identify, discuss, and analyze significant differences and trends that will enhance the reader's understanding of the City's financial position. Tax Base and Economy The City of Salina relies on three major groups of revenues to support its operations. Each of these revenue streams has a different revenue base. In declining order of magnitude, they are charges for services, sales taxes, and property taxes. Sales taxes and property taxes apply primarily to governmental activities, while charges for services apply to both governmental (20%) and business-type (80%) activities. Charges for services account for about 43% ($36.8 million) of the City's revenue stream. Charges for service depend on both the rate that is set for the activity, as well as the volume of services provided. Significant services include water and wastewater fees, sanitation and landfill fees, licenses and permits, inspection fees and golf course fees. Charges for services increased $1.1 million (3%) from the prior year with the solid waste disposal fund increasing $370K (13.24%) and water and sewer fund increasing $533K (3%). The increase in charges for services in the solid waste disposal fund is a result an increase in disposal fees of 3.5%, as well as well as a large one time customer, while the increase in the water and sewer fund is a result of an increase in water and wastewater fees by 3%. Sa/es taxes are the next largest component of the revenue mix, providing 25.5% ($21.7 million) of the total revenues. The City receives a .90% City-wide sales tax, and also a portion of the County-wide 1 % sales tax. Forty- four percent, (a rate of .75%) of the City-wide sales tax is required to be used for special purposes. The remaining .5%, along with the City portion of the County-wide tax is available for general purposes. In 2008, Salina voters approved an increase of the special purpose .25% tax to a .40% tax. The extended tax is to sunset March 31, 2019. The tax was also modestly re-purposed, for Capital and Economic Development purposes only, as well as retaining a property tax stabilization component. In May 2017, Salina voters approved an increase in the special purpose .40% tax to a .75% tax (thus repealing the 2008 increase). This change became effective October 1, 2017 for twenty years. Propertv taxes are the third major component of the revenue mix, accounting for 13.6% ($11.6 million) of total revenues. Property taxes consist of two components: Real estate and personal property taxes which are determined by the mill levy set by the city and the assessed value of the property; and motor vehicle taxes which are established by a countywide average tax rate and the assessed value of the vehicle. Real estate assessed value increased by .5%. The total City mill levy decreased 1.06%. The overlapping levy decreased in 2017 by .63%. Personal property value continued to slide. presumably as a result of removing business equipment from the tax base. Personal property value has now dropped to $11.1 million from its peak of $39.7 million in 2007. At the 2017 tax rate, this exemption is equivalent to over $760K in annual lost revenue. Motor vehicle value decreased 1.66%. Motor vehicle taxes are distributed based on a formula using prior year's tax effort (similar to the Countywide Sales Tax Distribution). 6 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The following table summarizes the comparative property assessed values and tax levy rates: Comparative Property Values and Tax Levy Rates Fiscal (Budget) Year 2Q11 2.0.12 Real Estate and Personal Property Assessed Valuation $ 422,364,328 $ 420,849,599 City Mill Levy($ per $1,000) Operating (General Fund) 21.694 19.95 Debt Service 5.909 7.361 Total City Rate 27.603 27.311 Total Overlapping Levy 134.153 134.999 Percent of Total Taxes Collected 99.9% 93.5% Ratio of Total Taxes (including delinquent collections) to taxes levied 101.7% 95.5% Motor Vehicle Valuation $ 50,970,796 $ 51,833,505 ~ $ 1,514,729 1.744 (1.452) 0.292 (0.846) 6.4% 6.2% $ (862,709) The unemployment rate in Salina decreased slightly from 3.3% at the end of 2016 to 2.7% at the end of 2017, reflecting general economic conditions. This is still slightly below the statewide and significantly below the national unemployment rate. The total labor force stayed at 27,684. In 2017, the top ten property taxpayers accounted for 14.24% of total assessed value. This is less concentrated than ten years ago (at 15.48%). Statement of Net Position Net position may, over time, provide an indicator of a government's financial position. In the case of the City of Salina, assets and deferred outflows of resources exceeded liabilities by $212.8 million at December 31, 2017. This represents an increase in net assets of $9.4 million over 2016. A comparative Condensed Statement of Net Position at December 31, 2017 and 2016: 7 Cash and investments Other current assets Noncurrent (capital) assets Total assets Total deferred outflows of resources Total assets and deferred outflows of resources Current liabilities Noncurrent liabilities Total liabilities Total deferred inflows of resources Net position: Net investment in capital assets Restricted for permanent funds Restricted for debt service Unrestricted Total net position Percent of total net position Cash and investments as a percentage of current liabilities CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Condensed Statement of Net Position As of December 31 (In $000) Governmental Activities Business-T~~e Act1vibes 2017 2016 2017 2016 2017 $ 24,491 $ 26,873 $ 30,336 $ 29,505 $ 54,827 13,836 13,990 2,338 2,213 16, 174 206,600 197,122 91 306 90,784 297,906 244,927 237,985 123,980 122,502 368,907 5 968 6 681 887 878 6 855 250,895 244 666 124 867 123,380 375,762 12,540 17,370 3,879 3,598 16,419 102,076 98 158 31 685 32,020 133 761 114 616 115,528 35 564 35 618 150 180 12 578 13 270 220 202 12 798 129,921 124,635 63,316 62,427 193,237 502 489 502 1,510 1,249 1,512 1,512 3,022 (8,232) (10,505) 24 255 23 621 16 023 123 701 115 868 89 083 87 560 212,784 58% 57% 42% 43% 100% 195% 155% 782% 820% 334% Total Prima~ Government %of %of 2017-2016 Total 2016 Total change 15% $ 56,378 16% $ (1,551) 4% 16,203 4% (29) ~ 287,906 ~ 10 000 1Qlli 360 487 100% 8 420 1Qlli 7 559 1Qlli (704) 368,046 7716 11% 20,968 14% (4,549) ~ 130 178 ~ 3 583 100% 151 146 100% (966) 13 472 (674) 91% 187,062 92% 6,175 0% 489 0% 13 1% 2,761 1% 261 .a.% 13 116 2li 2 907 1Qlli 203,428 1Qlli 9 356 100% 269% The largest segment of the City's net position reflects its investment in capital assets (land, buildings, streets and drainage facilities, utility plant, vehicles, equipment, etc.), less any debt used to acquire those assets that is still outstanding. These assets are used to provide services to citizens. As a result, resources required to retire related debt cannot come from liquidation of the asset. Such resources generally must be provided from other sources, such as future taxes or user charges. A small portion of net position is restricted for debt service and permanent funds. The remainder (unrestricted) of net position may be used to meet the City's obligations to citizens and creditors. In 2017, the amount of net investment in capital assets increased by $6.2 million. Amount restricted for debt service increased by $261 thousand. Outside of the increase in net investment in capital assets and the increase of restricted for debt service, 2017 resulted in a $2.9 million increase to the net position. Total liabilities decreased in governmental activities and slightly decreased in business-type activities. In governmental activities, current liabilities and non-current liabilities decreased primarily due to a reduction in temporary notes and an increase in general obligation bonds. 8 Statement of Activities CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 A Condensed Statement of Activities is shown below. Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contnbutions General Revenues: Property Taxes Sales Taxes Other Taxes Investment Revenue Other Miscellaneous Total Revenues: Expenses· General Government Public Safety PubilcWlrks Public Health and Sanitation Culture and Recreation P Janning and Development Solid Waste Disposal Water and Sewer Sanitation Golf Course Interest on Long Term Debt Total Expenses Increase in net assets before transfers Transfers and other extraordinary items Change in Net Position Net Position January 1 P nor P enod Adjustment Net Position January 1 restated Net Position December 31 Condensed Statement of Activities For the Year Ended December 31 Governmental Activities 2017 2015 $ 1J,1JO $ 1>,085 4,541 12,960 2t738 6,899 93 4,332 734 12,588 17,682 7,991 148 ~~ ~~ 9,781 23,120 1J,345 t126 6,880 t835 9,1!8 22,232 9,773 1,095 6,612 2,047 ~~ ~ 53,91! 3,523 5,483 ~~ ~~ 115,869 115,869 '()6,704 ___ 8_2 1)6,786 Business-Type Activities 2017 2015 $ 26,703 $ 25,657 129 78 '()3 79 26,935 ~ 2,364 15,650 2,178 852 5,891 2,335 14,807 2,043 792 5,837 (4,367) ~1) ~ 2,256 87,559 87,559 85,229 74 85,303 Total Primary Government 2017-2015 ~~ Change $ 36,803 43% $ 35, 7 42 42% $ 1,061 209 (734) 4,541 5% 0% 12,960 15% 2t738 25% 6,899 8% 222 0% 4,332 734 5% f'/o 12,588 15% 17,682 21'/o 7,991 9% 226 0% 372 4,056 (t092) (4) 85,269 ~% ~ ~% ___ 54_ 9,781 tl% 23,120 30% 1>,345 14% t126 f'/o 6,880 9% \835 2% 2,364 3% 15,650 21'/o 2,178 3% 852 f'/o 9,414 ~) ~ 203,428 203,428 ~ 9, 1!8 12% 22,232 30% 9,773 tl% t095 f'/o 6,612 9% 2,047 3% 2,335 3% 14,807 20% 2,043 3% 792 f'/o 1\320 19 ~ 19\933 156 192,089 ~ 593 888 572 31 268 (212) 29 843 tl5 60 \960 t906 __ JI]) ~ 1\495 (156) 11,339 ~ Governmental Activities. Charges for services attributable to governmental activities totaled $10.1 million and operating grants for those purposes were $4.5 million. Both of these revenue streams increased slightly from the prior year. The balance was funded by general revenues. Sales taxes accounted for $21.7 million of general revenues, with property taxes providing $12.9 million. The net position increased by $7.8 million as a result of governmental activities. This increase was primarily related to the increase in sales tax as a result of the collection of two months of sales tax with the new special purpose sales tax rate. Total expenses for governmental activities for the year ending December 31, 2017 were $54.8 million compared to $53.9 million in 2016. Governmental activities represent 72% of the City's total expenses. The largest element of governmental activity expense was public safety, accounting for 30% of the total. 9 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Business Tvoe Activities. Business-type activities are primarily supported by user charges, with a very small amount coming from investment and miscellaneous revenues. Total expenses for business-type activities for the year were $21 million, or 27% of the City's total expenses. The majority of this expense ($15.6 million) is attributable to water and sewer operations, with the other activities costing a combined total of $5.4 million. Net position decreased by $1.5 million. This decrease was primarily related to the increase in water and sewer fund expenses. Fund Financial Analysis Governmental Funds Fund Balances: The table below shows the Governmental Fund balances for major funds as of December 31, 2017 and December 31,2016. Governmental Fund Balances as ofDecember 31, (in OOO's) Fund 2017 2016 Change General $ 6,883 $ 5,032 $ 1,851 Tourism and Comention 213 183 30 Special Gas 1,082 812 270 Sales Tax Capital 2,084 1,667 417 Schilling Capital Improvement 3,024 4,061 (1,037) Debt Service 1,510 1,249 261 Capital Projects 895 (6,823) 7,718 SFH QalicB 1,715 6,811 (5,096) Other Governmental Funds 4,353 3,685 668 $21,759 $ 16,677 $ 5,082 Total governmental fund balances increased by $5.1 million. The reasons for these changes are varied. The Schilling Capital Improvement Fund, which was created to account for U.S. Government and other funds received for the abatement of groundwater contamination, continues to decrease as the City uses funds previously distributed. The Capital Projects Fund increase was largely the result of the issuance of general obligation bonds to fund capital outlays on projects. The SFH QalicB fund was created to account for funds for the Salina Field House. 10 Revenues and Expenditures: CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The following table shows a comparison of revenues and expenditures (including other sources and uses) for major funds for the years ending December 31, 2017 and 2016. Consolidated Statement of Re-..enues and Expenditures for Major Go1.emmental Funds For the years ended December 31 Modified Accrual Basis (in $000's) Fund 2017 Re-..enues (Including Other Financing Sources) General $ 41,864 $ Tourism and Con-..en!ion 1,685 Special Gas 1,598 Sales Tax Capital 8,265 Schilling Capital lmpro-..ement 12 Debt SeNce 6,659 Capital Projects 12, 125 SFH QalicB 248 Other Gowmmental Funds 4,067 Total Rewnues 76,523 Less Other Sources (19,924) Rewnues, net of other sources $ 56,599 $ Expenditures (Including Other Finacing Uses) General $ 40,013 $ Tourism and Comen!ion 1,655 Special Gas 1,328 Sales Tax Capital 7,848 Schilling Capital lmprowment 1,049 DebtSeNce 6,398 Capital Projects 4,407 SFH QalicB 5,344 Other Gowmmental Funds 3,399 Total Expenditures 71,441 Less Other Uses (4,160) Expenditures, net of other uses $ 67,281 $ 2016 Change 40,081 $ 1,783 1,643 42 1,570 28 4,439 3,826 10 2 20,228 (13,569) 16,432 (4,307) 12,573 (12,325) 4,119 (52) 101,095 (24,572) (43,876) 23,952 57,219 $ (620) 39,889 $ 124 1,624 31 1,396 (68) 4,392 3,456 1,484 (435) 19,724 (13,326) 12,718 (8,311) 5,762 (418) 3,838 (439) 90,827 (19,386) (3,971) (189) 86,856 $ (19,575) Total revenues, including other sources, were down $24.6 million compared to 2016. The largest components of this change were a $13.6 million decrease in Debt Service Fund primarily resulting from decreased bond proceeds and a $12.3 million decrease in the SFH QalicB Fund primarily resulting from a decrease in bond proceeds. Expenditures decreased in most every fund. The Sales Tax Capital Fund expenditures increased as a result the ability of the city to expend additional revenues generated by the newly approved special purpose sales tax. 11 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Proprietary Funds The City of Salina operates four enterprise funds as well as five internal service funds. A summarized comparative Statement of Net Position follows for each enterprise fund: Co1r4larative Sumnary Statement of Net Position as of Decerrber 31 {in $000's) Solid Waste Disposal Water and Sewer 2017 2016 Olange 2017 2016 Change current Assets $ 6,709 $ 5,886 $ 823 $ 24,014 $ 24,445 $ (431) capital Assets 3,196 4,047 (851) 86,888 85,444 1,444 Deferred Outflows 79 72 7 676 675 Total Assets and deferred outflows $ 9,984 $ 10,005 $ (21) $ 111,578 $ 110,564 $ 1,014 current Liabirnies $ 445 $ 442 $ 3 $ 3,299 $ 3,043 $ 256 Noncurrent Liabilities 3,272 3,605 (333) 27,440 27,554 (114) Deferred hflows 30 26 4 143 129 14 Total Liabilities $ 3,747 $ 4,073 $ (326) $ 30,882 $ 30,726 $ 156 Net investment in capital assets $ 2,041 $ 2,527 $ (486) $ 60,053 $ 66,038 $ (5,985) Restricted 1,512 1,512 Unrestricted 4,196 3,405 791 19,131 12,288 6,843 Total Net Fbsition $ 6,237 $ 5,932 $ 305 $ 80,696 $ 79,838 $ 858 current Assets as a percentage of current liabilities 1508% 1332% 728% 803% Sanitation Golf Course 2017 2016 Olange 2017 2016 Change current Assets $ 1,787 $ 1,250 $ 537 $ 164 $ 136 $ 28 capital Assets 826 894 (68) 395 399 (4) Deferred Outflows 102 100 2 32 31 Total Assets $ 2,715 $ 2,244 $ 471 $ 591 $ 566 $ 25 Current Liabilities $ 87 $ 75 $ 12 $ 48 $ 38 $ 10 Noncurrent Liabilities 733 613 120 240 248 (8) Deferred hflows 38 36 2 11 11 Total Liabilities $ 858 $ 724 $ 134 $ 299 $ 297 $ 2 Net investment in capital assets $ 826 $ 894 $ (68) $ 395 $ 399 $ (4) Restricted Unrestricted 1,031 626 405 (103) (130) 27 Total Net Fbsition $ 1,857 $ 1,520 $ 337 $ 292 $ 269 $ 23 current Assets as a percentage of current liabilities 2054% 1667% 342% 358% 12 CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 Revenues, Expenses, and Changes in Net Position All enterprise funds show healthy results, with all funds reflecting increases in net position. Corrparative Sumrary of Revenues, B<penses and Changes in Net Position for the Year Blded Decerrber 31 (In $000's) Solid Waste llsposal Water and Sewer 2017 2016 Change 2017 2016 Change Operating Revenues $ 3,185 $ 2,816 $ 369 $ 19,861 $ 19,328 $ 533 Operating Expenses 2,320 2,312 8 14,721 13,982 739 Operating ncorre 865 504 361 5,140 5,346 (206) Non-operating revenues (expenses) (20) (8) (12) (832) (764) (68) lncorre (Loss) before Transfers 845 496 349 4,308 4,582 (274) Transfers in (out) (540) (640) 100 (3,450) (2,450) (1,000) Change in Net Position 305 (144) 449 858 2,132 (1,274) Net Position January 1 5,932 6,067 (135) 79,838 77,649 2,189 Restaterrent 9 (9) 57 (57) Net Position January 1, restated 5,932 6,076 (144) 79,838 77,706 2,132 Net Position Decerrber 31 $ 6,237 $ 5,932 $ 305 $ 80,696 $ 79,838 $ 858 Sanitation Golf Course 2017 2016 Change 2017 2016 Change Operating Revenues $ 2,886 $ 2,751 $ 135 $ 876 $ 840 $ 36 Operating Expenses 2,178 2,092 86 852 788 64 Operating ncorre 708 659 49 24 52 (28) Non-operating revenues (expenses) 6 52 (46) (4) 4 lncorre (Loss) before Transfers 714 711 3 24 48 (24) Transfers in (out) (377) (492) 115 Change in Net Position 337 219 118 24 48 (24) Net Position January 1 1,520 1,296 224 268 217 51 Restaterrent 5 (5) 3 (3) Net Position January 1, restated 1,520 1,301 219 268 220 48 Net Position Decerrber 31 $ 1,857 $ 1,520 $ 337 $ 292 $ 268 $ 24 13 Budgetary Highlights CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The objective of budgetary controls is to ensure compliance with legal prov1s1ons embodied in the annual appropriated budget approved by the City Commission. The legal level of budgetary control is maintained at the fund level, in accordance with State Statutes. Management control is maintained at the departmental level. Within the departments, considerable discretion is permitted. The City uses an encumbrance accounting system, in which estimated purchase orders are recorded prior to the release of purchase orders to vendors. Open purchase orders are reported as reservations of budgetary basis fund balances at December 31, 2017. Formal budgetary amendments are limited to those circumstances in which the need is perceived to alter the total fund budget. Re- allocation among departments or line items are not typically recorded as budgetary amendments. However, in addition to formal amendments, departments within the City are allowed to transfer budget between line items within a department. Budgets may also be transferred from department to department within each fund. As a result of these transfers, the original budget and the final budgets may not be the same for departments within a fund. Capital Assets and Debt Administration Capital Assets The total amount invested in Capital Assets for the City at December 31, 2017 was $297,905,515 net of accumulated depreciation. The following table illustrates the Capital Asset balance by various classes of assets at December 31, 2017 and 2016: Capital Asset Balances Net of Depreciation as of December 31 (In OOO's) Go..emmental Acti..,;ty Acti..,;ty 2017 2016 2017 Equipment, Furniture and Fixtures $ 2,040 $ 1, 190 $ 1,484 Vehicles 3,521 3,148 1,041 Buildings and lmpro..ements 33,079 24,857 9,362 Land 24,093 24,002 1,542 Infrastructure 114,958 113,114 75,727 Construction in Progress 28,909 30,811 2,150 Total $206,600 $197, 122 $ 91,306 Changes to capital assets may be summarized as follows: Additions Retirements Depreciation Net Additions Changes to Capital Assets, 2017 (in OOO's) Go1.ernmental Business-Type Acti..,;ty Acti\ity $ 26,318 $ 22,846 (11, 129) (18,014) (5,711) (4,311) $ 9,478 $ 521 2016 $ 1,692 1, 161 9,783 1,542 60,879 15,728 $ 90,785 Total $ 49, 164 (29, 143) (10,022) $ 9,999 Total 2017 2016 $ 3,524 $ 2,882 4,562 4,309 42,441 34,640 25,635 25,544 190,685 173,993 31,059 46,539 $297,906 $287,907 Additional information on the City's capital assets can be found in Note 4,D. of the notes to the basic financial statements. 14 Debt Management CITY OF SALINA, KANSAS Management Discussion and Analysis Year Ended December 31, 2017 The City's general policy for general obligation bonds is to issue them for no more than 10 years for the City at Large portion, with some exceptions permitted for extraordinary projects. On special assessment bonds, the maturity may extend to 15 years. The outstanding general obligation bonds for governmental activities at December 31, 2017 totaled $55,994,305. In addition, there were temporary notes outstanding in the amount of $6,811,742, as well as a financing lease in the amount of $157,868. Business-type activities had $12,606,747 in revenue bonds outstanding, as well as $6,520,433 in general obligation bonds. Revenues generated by user fees are pledged to retire all of the bonds issued by business-type activities. In addition, a loan payable is outstanding in the amount of $8,862,810. The City engaged in the following debt transactions during 2017: • On July 21st, the City issued 2017A, $9,310,000 of improvement bonds. The proceeds were used to finance construction of the Bicentennial Center, Country Club road, and fund preliminary design costs for the Smoky Hill River Renewal. • On July 21st, the City issued $2, 180,000 in temporary notes to finance construction of Downtown Streetscape, Grand Prairie Addition Phase II and the Police Training Facility. This note will be refinanced into a long term bond issue in August 2018. Additional information on the City's debt can be found in Note 4, E. of the notes to the basic financial statements. Requests for Information This financial report is intended to give the reader a general overview of the City's finances. Questions about information in this report or requests for additional information should be directed to the Director of Finance, Room 206, 300 West Ash Street, Salina, Kansas, 67 401. 15 BASIC FINANCIAL STATEMENTS CITY OF SAUNA, KANSAS STATH'ENT OF NET POSITION Dece-n~r 31. 2017 Pnma!X Government Total Total Governmental Business-type Act1V1tles Act1v1t1es ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets: Cash and investments Receivables (net of allowance for uncollectJbles) Accounts Taxes Interest Inventory Restricted cash and investments Prepaid expenses Total current assets Noncurrent assets· Capital assets, nondepreciable Construction in progress Land Capital assets, depreciable Less: Accumulated depreciation Total noncurrent assets Total assets Deferred outflows of resources: Pension deferred outflows of resources Deferred charge on bond issuance Total deferred outflows of resources Total assets and deferred outflows of resources Llab11ibes· Current habi11t1es· Accounts payable Retalnage payable Accrued habilibes Accrued interest payable Deposits payable Current portion of compensated absences Current port.Jon of temporary notes payable Current portion of loans payable Current portion of revenue bonds payable Current portion of financing leases payable Current portion of special assessment debt payable Current portion of general obf1gat1on bonds payable Total current habilrtles Noncurrent l1abi11t1es· Accrued l1ab1ht1es Compensated absences Security deposits returnable Net OPEB obligabon Net pension liability Temporary notes payable Loans payable Revenue bonds payable Special assessment debt payable General oblzgabon bonds payable Landfill post-<:losure care hablhbes Total noncurrent l1abilibes Total l1ab1hbes Deferred rnnows of resources· Unavailable revenue -property taxes Pension deferred Inflows of resources Total deferred inflows of resources Total liab1hbes and deferred inflows of resources Net Po:s1bon Net Investment In capital assets Restricted for. Permanent funds Expendable Debt service Unrestricted Total net position 22.490,234 30,335,879 1,791,556 1,902,943 11,708,927 16,726 16 318,107 435,252 2,001,589 38,327,139 32 674,090 28,909,568 2,149,789 24,092,859 1,541,806 269,325,527 151,065,494 115,728,000 63,451,528 206 599 954 91 305,561 244,927,093 123 979,651 5,841,010 651,365 127,336 236,123 5,968,346 887 488 $ 250,895,439 $ 124,867,139 1,764,815 588,035 604,811 10,681 572,832 182,225 236,626 176,114 1,499,345 344,215 2,196,742 571.n3 708,696 157,868 5,561,280 1 242,407 12 539 918 3 878 547 44,772 1,298,613 298,132 4,548,909 604,645 28,966,518 3,333,610 4,615,000 12,171,090 8,291,037 11,898,051 50,433,025 5,278,026 1 981 498 102 077,927 31,684,999 114 617,845 35,563,546 11.165,043 1.411 701 220,777 12 576 744 220,777 $ 1271194,589 $ 35,784,323 $ 129,921,343 63,315,571 501,693 1,509,863 1,512,125 [8,232,049] 24,255,120 $ 123,700,850 89,082,816 The notes to the basic financial statements ere an integral part of this statement 16 Comeonent Units Total Salina Salina Pnmary Housing Airport Government Authon!J! Aulhon!J! $ 52,826,113 1,962,074 1,613,791 3,694,499 18,369 266,634 11,708,927 16,742 753,359 30,763 2,001,589 146,622 39,652 8 838 71,001,229 2,197 480 1889263 31,059,357 148,719 3,010,444 25,634,665 1,454,559 9,888,105 420,391,021 8,299,346 72,676,151 179, 179,528 4,571 879 41,804,269 297,905,515 5,330 745 43,no.431 368,906 744 7,528,225 45 659 694 6,492,375 85,727 105,185 363,459 1,391,470 6 855,834 85727 1,496,655 $ 375,762,578 7,613,952 $ 47,156,349 2,352,850 38,686 158,295 615,492 572,832 37,118 92,466 418,851 270,898 176,114 92,027 1,843,560 3,176 2, 196,742 511,n3 708,696 157,868 2,153 61803,687 1,220 000 16418465 171 007 1743812 44.n2 38,412 1,596,745 28,576 49,347 5,153,554 32,300,128 373,407 603,456 4,615,000 20.462,127 11,898,051 7,054 55,711,051 22,787,515 1 981 498 133,762,926 440 395 23,447,372 150,181,391 611 402 25191184 11,165,043 10,742 60.495 1 632.478 15 329 96.486 12,797,521 26071 156 981 $ 162,978,912 637 473 25,348,165 $ 193,236.914 5,330.745 $ 19.753.708 501,693 14,718 3,021,988 16,023 071 1631 016 2 054.476 $ 212,783,666 6,976.479 $ 21,808,184 Governmental activities: General government Public safety Publ1cwor1cs Public health and sanitation Culture and recreation Planning and development Interest on long-tenm debt Total governmental activities Business-type activities: Solid Waste Disposal Water and Sewer Sanitation Golf Course Total business-type activibes Total primaiy government Component units: Salina Housing Authority Salina Airport Authority Total component units CITY OF SALINA, KANSAS STATEMENT OF ACTMTIES For the Year Ended December 31, 2017 Net (Expenses] Revenue and Changes In Net Position Program Revenues Pnmaiy Government Operabng Capital Total Total Charges for Grants and Grants and Governmental Business-type Expenses Services Contributions Contributions Act1V1ties Ac!JV1ties $ 9,779,656 $ 3,470,076 $ 824,116 $ $ (5,485,464] $ 23,120,215 4,600,899 1,147,371 (17,371,945] 10,345,513 347,672 1,934,805 (8,063,036] 1,126,249 49,966 277,255 (799,028] 6,880,276 1,540,620 213,229 (5.126.427] 1,834,917 91,013 144,615 (1,599,289] 11724,439 (1,724,439] 54,811,265 10,100,246 4,541,391 (40,169,628] 2,364,863 3,164,761 799,898 15,650,277 19,855,033 4,204,756 2,177,632 2,884,526 706,894 852,260 798,368 (53,892) 21,045,032 26,702,688 5,657,656 $ 75,856,297 $36,802,934 $ 4,541,391 $ [40, 169,628] 5,6571656 $ 2,661,191 $ 384,749 $ 2,124,815 $ 100,059 5,474,912 2,213,300 1,280,204 $ 8,136,103 $ 2,598,049 $ 2,124,815 $ 1,380,263 General Revenues: Property taxes levied for General purposes 9,100,808 Debt service 2,486,666 Motor vehicle tax General purposes 1,372,532 Sales tax General purposes 12,906,032 Selective purposes 8,832,312 Other taxes General purposes 6,899,586 Investment revenues 92,820 129,144 Miscellaneous 2,002,864 103,082 Transfers, net 4,308,834 [4,366,500) Subtotal general revenues 48,002,454 [4,134,274) Change in net pos1t1on 7,832,826 1,523,382 Net position -beginning 115,868,024 871559,434 Net posruon • ending ~ 1Z3,700,6~0 ~ 69,06Z,616 The notes to the basic financial statements are an integral part of this statement. 17 Total Primaiy Government $ (5,485,464] (17,371,945] (8,063,036] (799,028] [5, 126,427] (1,599,289] (1,724,439] [40, 169,628] 799,898 4,204,756 706,894 (53,892) 5,657,656 [34,511,972) 9,100,808 2.486,666 1.372,532 12,906,032 8,832,312 6,899,586 221,964 2,105,946 [57,666) 43,868,180 9,356,208 203,427,458 $ 212,763,666 $ $ Com~nent Units Salina Salina Housing Airport Autho!!!}'. Autho!!!}'. $ (51,568] [1,981,408) [51,568) (1,981,408) 2,043,302 8,835 974 5,497 22,081 14,332 2,066,357 (37,236] 84,949 7,013,715 21,723,235 6,976,479 $21,606,164 CITY OF SALINA, KANSAS BALANCE SHEET GOVERNMENTAL FUNDS 43100 Tourism and Special Sales Tax General Convention Gas Capital ASSETS Cash and investments $ 5,853,666 $ 847 $ 802,597 $ 2,265,055 Restricted cash Receivables (net) Accounts 1,257,980 476,551 Taxes 8,864,737 322,888 Interest 16,726 Inventory 152,982 Due from other funds 27,854 Total assets $ 16,173,945 $ 477,398 $ 1,125,485 $ 2,265,055 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable $ 600,386 $ 263,937 $ 43,187 $ 17,775 Retainage payable 163,666 Due to other funds Total liabilities 600,386 263,937 43,187 181,441 Deferred inflows of resources Unavailable revenue -property taxes 8,691,050 Total deferred inflows of resources 8,691,050 Fund balance: Nonspendable 152,982 Restricted 213,461 1,072,347 Committed 1,658,876 Assigned 214,010 9,951 424,738 Unassigned 6,515,517 Total fund balances 6,882,509 213,461 1,082,298 2,083,614 Total liabilities, deferred inflows of resources and fund balances $ 16, 173,945 $ 477,398 $ 1, 125,485 $ 2,265,055 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds $ $ $ 3,024,578 $ 3,024,578 $ -$ 2,817,807 206,771 3,024,578 1,462,554 $ 1,483,544 $ 6,896 $ 2,001,589 54,161 123,914 2,521,302 9,656 3,983,856 $ 1,547,361 $ 2,132,399 $ -$ 560,602 $ 58,284 $ 2,473,993 2,473,993 1,509,863 1,509,863 91,642 349,503 9,656 652,244 417,443 895,117 1,714,956 895,117 1,714,956 4,540,664 $ 19,440,401 2,001,589 2,864 1,915,470 11,708,927 16,726 152,982 37,510 4,543,528 $ 35,273,605 162,754 $ 1,706,925 604,811 27,854 37,510 190,608 2,349,246 11,165,043 11,165,043 152,982 1,395,051 4,190,722 2,985,723 10,072,479 855,470 [27,854] 6,487,663 4,352,920 21,759,316 $ 3,024,578 $ 3,983,856 $ 1,547,361 $ 2, 132,399 $ 4,543,528 $ 35,273,605 The notes to the basic financial statements are an integral part of this statement. 18 CITY OF SALINA, KANSAS RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION OF GOVERNMENTAL ACTIVITIES December 31, 2017 Total Governmental Fund Balances Amounts reported for governmental activities in the statement of net position are different because Bond issuance costs are shown as current year expenditures in the funds. Bond issuance costs Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds 322, 143,628 $ 21,759,316 127,336 The cost of capital assets is Accumulated depreciation is 115,567,034 206,576,594 Pension contributions are reported an expense in the funds and as a deferred outflow of resources in the governmental activities in the statement of net position. Pension fundings are reported an a revenue in the funds and as a deferred inflow of resources in the governmental activities in the statement of net position. Certain intrafund transactions have been elimniated between the City's primary funds and the QALICB blended component unit. An internal service fund is used by the City's management to charge the costs of the worker's compensation program. The assets and liabilities of the internal service fund are included with governmental activities~ The following liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These liabilities at year end consist of: Compensated absences Net OPEB obligation Net pension liability Temporary notes payable Bonds payable Financing leases payable Loans payable 2,744,388 4,548,909 2B,B00,959 6,811,742 55,994,305 157,868 12,171,090 5,809,770 [1,400,363] [123,914] 2,363,597 Accrued interest on the bonds 182,225 [111,411,486] Net Position of Governmental Activities The notes to the basic financial statements are an integral part of this statement. 19 $ 123,700,850 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended December 31, 2017 Tourism and Special Sales Tax General Convention Gas Capital REVENUES: Taxes Real estate taxes $ 8,943,754 $ -$ -$ Delinquent taxes 157,054 Motor vehicle taxes 1,014,976 General sales taxes 12,906,032 Selective sales taxes 8,251,546 Other taxes 5,215,264 1,684,322 Intergovernmental 1,133,310 1,435,167 Special assessments Licenses and permits Charges for services 6,153,450 Investment revenue 3,336 480 2,777 13,381 Donations Miscellaneous 1,709,491 Total revenues 37,236,667 1,684,802 1,437,944 8,264,927 EXPENDITURES: Current General government 5,423,241 Public safety 21,628,730 Public works 5,328,315 495,919 Public health and sanitation 749,656 Culture and recreation 4,424,221 Planning and development 752,825 930,916 Miscellaneous Capital outlay 896,026 831,852 5,280,012 Debt service Principal retirement Interest and other charges Total expenditures 39,203,014 930,916 1,327,771 5,2801012 Excess [deficiency] of revenue and other sources over [under] expenditures and other (uses] [1,966,347] 753,886 110,173 2,984,915 OTHER FINANCING SOURCES [USES] Issuance of bonds Issuance of temporary notes Bond premium Transfers in 4,626,500 160,000 Transfers [out] [810,000J [723,942] [2,568,350) Total other financing sources [uses] 3,816,500 [Z23,942] 160,000 [2,568,350] Net change in fund balance 1,850, 153 29,944 270,173 416,565 Fund balance -Beginning of year 5,032,356 183,517 812, 125 1,667,049 Fund balance -End of year $ 6,882,509 $ 213,461 $ 1,082,298 $ 2,083,614 Schilling Other Total Capital Debt Capital SFH Governmental Governmental Improvement Service Projects QalicB Funds Funds $ -$ 2,433,770 $ -$ -$ -$ 11,377,524 52,896 209,950 357,556 1,372,532 12,906,032 580,766 8,832,312 6,899,586 494,337 1,473,276 4,536,090 1,538,904 1,538,904 5,300 5,300 246,458 480,385 6,880,293 12,794 17,104 1,104 28,178 79,154 110,606 110,606 63,818 77,763 1,851,072 12,794 4,400,230 558,155 247,562 2,756,274 56,599,355 5,423,241 21,628,730 223,912 6,048,146 347,442 1,097,098 1,718,877 6,143,098 31,081 86,832 1,801,654 35 35 1,049,381 4,210,392 5,262,024 751,068 18,280,755 4,907,918 180,000 5,087,918 1,490,423 139,036 50,486 90,935 1,770,880 1,049,381 6,398,341 4,349,428 5,343,591 3,399,101 67,281,555 [1,036,587] [1,998,111] [3, 791,273] [5,096,029] [642,827] [10,682,200] 1,000 9,309,000 9,3.10,000 2,180,000 2,180,000 16,751 78,361 95,112 2,241,309 1,310,983 8,338,792 [57,666) [4, 159,958) 2,259,060 11,509,695 1,310,983 15,763,946 [1,036,587] 260,949 7,718,422 [5,096,029) 668,156 5,081,746 4,061,165 1,248,914 [6,823,305) 6,810,985 3,684,764 16,677,570 $ 3,024,578 $ 1,509,863 $ 895,117 $ 1,714,956 $ 4,352,920 $ 21,759,316 The notes to the basic financial statements are an integral part of this statement. 20 CITY OF SALINA, KANSAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2017 Total Net Change In Fund Balances -Governmental Funds Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net position and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capital outlays exceeds depreciation in the period. Gain/[Loss] on sale of assets Capital outlays Depreciation expense Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. This is [151,301] 15,709,428 [6,066,797] $ 5,081,746 9,491,330 the amount by which interest decreased. 46,441 An internal service fund is used by the city's management to charge the costs of certain activities to the individual funds. The revenues and expenses of certain internal service fund is reported with governmental activities. 285,664 Certain intrafund transactions have been eliminated between the City's primary funds and the QALICB blended component unit. [123,914] Some expenses reported in the statement of activities, such as compensated absences and other post employment benefits, do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. 30,943 Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities. [723,482] Bond, temporary note, loan and lease proceeds are other financing sources in the governmental funds, but they increase long-term liabilities in the statement of net position and do not affect the statement of activities. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. [11,476,527] Repayment of bond principal and bond issuance costs is an expenditure in the governmental funds, but it reduces long-term liabilities in the statement of net position and doe.s not affect the statement of activities. 5,220,625 Changes In Net Position of Governmental Activities $ 7,832,826 The notes to the basic financial statements are an integral part of this statement. 21 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) GENERAL FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Taxes Real estate taxes $ 8,943,754 $ 9,075,239 $ 9,075,239 Delinquent taxes 157,054 125,000 125,000 Motor vehicle taxes 1,016,439 991,987 991,987 General sales tax 12,906,032 12,805,000 12,805,000 Other taxes 5,215,264 6,804,632 6,804,632 Intergovernmental 1, 133,310 1,145,000 1, 145,000 Charges for services 5,481,314 6,025,327 6,025,327 Investment revenue 11,540 Miscellaneous 1,709,490 183,739 183,739 Total revenues 36,574, 197 37,155,924 37,155,924 Expenditures General government 4,967,756 3,405,885 3,405,885 Public safety 21,750,244 20,726,693 20,726,693 Public works 5,337,833 5,790, 152 5,790, 152 Public health and sanitation 749,656 Culture and recreation 4,426,706 5,283,377 5,283,377 Planning and development 752,825 2,213,740 2,213,740 Capital outlay 951,921 4,259,262 4,259,262 Total expenditures 38,936,941 41,679,109 41,679,109 Excess [deficiency] of revenues over [under] expenditures [2,362,744) [4,523, 185) [4,523, 185) Other financing sources (uses] Transfers in 4,626,500 4,675,089 4,675,089 Transfers [out] [810,000) [3,661,132) [3,661, 132) Total other financing sources [uses] 3,816,500 1,013,957 1,013,957 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 1,453,756 [3,509,228] [3,509,228] Unreserved fund balance, January 1 3,509,762 3,509,228 3,509,228 Prior year cancelled encumbrances 103,606 Unreserved fund balance, December 31 5,067,124 $ -$ - Reconciliation to GAAP Interest receivable Accounts receivable Taxes receivable Inventory Deferred revenue Current year encumbrances GAAP Fund Balance, December 31 16.726 1,257,960 8,864,737 152,982 [8,691,050] 214,010 $ 6,882,509 See independent auditor's report on the financial statements. 22 Variance with Final Budget Positive [Negative] $ [131,485] 32,054 24,452 101,032 [1,589,368] [11,690] [544,013] 11,540 1,525,751 [581,727) [1,561,871] [1,023,551] 452,319 . [749,656] 856,671 1,460,915 3,307,341 2,742,168 2, 160,441 (48,589] 2,851,132 2,802,543 4,962,984 534 103,606 $ 5,067,124 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS} TOURISM AND CONVENTION FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Other taxes $ 1,616,808 $ 1,608,000 $ Investment revenue 480 Total revenues 1,617,288 1,608,000 Expenditures Planning and development 930,916 893,000 Total expenditures 930,916 893,000 Excess [deficiency] of revenues over [under] expenditures 686,372 715,000 Other financing sources [uses] Transfers [out] [723,942] [683,800] Total other financing sources [uses] [723,942] [683,800] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [37,570] 31,200 Unreserved fund balance, January 1 [225,520] 80,343 Unreserved fund balance, December 31 [263,090] $ 111,543 $ Reconciliation to GAAP Accounts receivable 476,551 GAAP Fund Balance, December 31 $ 213,461 See independent auditor's report on the financial statements. 23 Final 1,658,000 1,658,000 893,000 893,000 765,000 [733,800] [733,800] 31,200 368 31,568 Variance with Final Budget Positive [Negative] $ [41, 192] 480 [40,712] [37,916] [37,916] [78,628] 9,858 9,858 [68,770] [225,888] $ [294,658] CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL GAS FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Intergovernmental $ 1,435,031 $ 1,370,400 $ 1,370,400 Investment revenue 2,777 6,000 6,000 Total revenues 1,437,808 1,376,400 1,376,400 Expenditures Public works 495,919 569,915 569,915 Capital outlay 745,820 946,243 946,243 Total expenditures 1,241,739 1,516,158 1,516,158 Excess [deficiency] of revenues over [under] expenditures 196,069 [139,758] [139,758] Other financing sources [uses] Transfers in 160,000 160,000 160,000 Total other financing sources [uses] 160,000 160,000 160,000 Excess [deficiency] of revenues and other sources over [under] 356,069 20,242 20,242 expenditures and other [uses] Unreserved fund balance, January 1 387,919 669,880 669,880 Prior year cancelled encumbrances 5,471 Unreserved fund balance, December 31 749,459 $ 690,122 $ 690,122 Reconciliation to GAAP Taxes receivable 322,888 Current year encumbrances 9,951 GAAP Fund Balance, December 31 $ 1,082,298 See independent auditor's report on the financial statements. 24 Variance with Final Budget Positive [Negative] $ 64,631 [3,223] 61,408 73,996 200,423 274,419 335,827 335,827 [281,961] 5,471 $ 59,337 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX CAPITAL FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Taxes Selective sales taxes $ 8,251,546 $ 8,043,656 $ 8,269,993 Investment revenue 13,381 5,000 5,000 Total revenues 8,264,927 8,048,656 8,274,993 Expenditures Capital outlay 5,270,351 4,620,500 6,470,500 Total expenditures 5,270,351 4,620,500 6,470,500 Excess [deficiency] of revenues over [under) expenditures 2,994,576 3,428, 156 1,804,493 Other financing sources [uses] Transfers [out] [2,568,350j [3,750,000) [2,500,000) Total other financing sources [uses] [2,568,350) [3,750,000) [2,500,000) Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 426,226 [321,844] [695,507] Unreserved fund balance, January 1 1,056,648 785,304 1,797,359 Prior year cancelled encumbrances 176,002 Unreserved fund balance, December 31 1,658,876 $ 463,460 $ 1,101,852 Reconciliation to GAAP Current year encumbrances 424,738 GAAP Fund Balance, December 31 $ 2,083,614 See independent auditor's report on the financial statements. 25 Variance with Final Budget Positive [Negative] $ [18,447] 8,381 [10,066) 1,200,149 1,200,149 1,190,083 [68,350) [68,350] 1, 121,733 [740,711] 176,002 $ 557,024 CITY OF SAUNA, KANSAS STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2017 Business-Type Activities: Ente!Erise Funds Total Internal Solid Waste Water and Enterprise Service Assets and deferred outflows of resources: Dis~sal Sewer Sanitation Golf Course Funds Funds Current assets: Cash and investments $ 6,515,002 $ 22,115,048 $1,568,556 $ 137,273 $ 30,335,879 $ 3,049,833 Receivables (net of allowance for uncollec!Jbles) Accounts 194,086 1,490,712 218,145 1,902,943 Interest 16 16 Inventory and prepaid supplies 408,562 26,690 435,252 165, 125 Total current assets 6,709,104 24,014,322 1,786,701 163,963 32,674,090 3,214,958 Capital assets: Nondepreciable capital assets· Construction in progress 2,149,789 2,149,789 Land 682,000 844,806 15,000 1,541,806 Depreciable capital assets: Capital assets 11,312,996 136,213,033 2,377,725 1,161,740 151,065,494 184,326 Less: accumulated depreciation 8,798,898 52,319,351 1,551,983 781,296 63,451,528 160,966 Total capital assets 3,196,098 86,888,277 825,742 395,444 91,305,561 23,360 Total assets 9,905,202 110,902,599 2,612.443 559.407 123,979,651 3,238,318 Deferred outflows of resources: Pension deferred outflows of resources 78,469 439.410 102,050 31,436 651,365 31,240 Deferred charge on bond issuance 236,123 236,123 Total deferred outflows of resources 78,469 675,533 102,050 31,436 887 488 31,240 Total assets and deferred outflows of resources $ 9,983,671 $ 111,578,132 $ 2,714,493 $ 590,843 $ 124,867,139 $ 3,269,558 Liabilities and deferred inflows of resources: Current liabilities Accounts payable $ 24,885 $ 535,111 $ 18,675 $ 9,364 $ 588,035 $ 57,890 Retainage payable 10,681 10,681 Interest payable 10,937 225,689 236,626 Meter deposits payable 176,114 176,114 Current portion of compensated absences payable 33,697 203,412 68,558 38,548 344,215 28,707 Current portion of accrued claims payable 572,832 Current portion of loans payable 571,773 571,773 Current portion of general obligation bonds payable 375,000 867,407 1,242,407 Current portion of revenue bonds payable 708 696 708 696 Total current liabilities 444,519 3,298,883 87,233 47,912 3,878,547 659,429 Noncurrent liabilities: Compensated absences payable 29,185 176,179 59,381 33,387 298,132 24,863 Accrued claims payable 44,772 Net OPEB Obligation 78,890 374,881 116,258 34,616 604,645 Net pension liability 402,327 2,202,239 557.424 171,620 3,333,610 165,559 Payable from restricted assets Loans payable 8,291,037 8,291,037 General obligation bonds payable 780,000 4,498,026 5,278,026 Revenue bonds payable 11,898,051 11,898,051 Landfill post-closure care liabilities 1,981,498 1,981,498 Total noncurrent liabilities 3,271,900 27 440,413 733,063 239,623 31,684,999 235, 194 Total liabilities 3,716,419 30,739.296 820.296 287,535 35,563,546 804,623 Deferred inflows of resources Pension deferred inflows of resources 30,040 141,970 37 644 11,123 220,777 11,338 Total deferred inflows of resources 30,040 141,970 37,644 11,123 220,777 11,338 Total liabilities and deferred inflows of resources $ 3,746.459 $ 30,881,266 $ 857,940 $ 298,658 $ 35,784,323 $ 905,961 Net position Net investment in capital assets $ 2,041,098 $ 60,053,287 $ 825,742 $ 395,444 $ 63,315,571 $ 23,360 Restricted Restricted for bond retirement 1,512,125 1,512,125 Unrestricted 4,196,114 19,131,454 1,030,811 [103,259) 24,255,120 2,340,237 Total net position $ 6,237,212 $ 80,696,866 $1,856,553 $ 292, 185 $ 89,082,816 $ 2,363,597 The notes to the basic financial statements are an integral part of this statement 26 CITY OF SALINA, KANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2017 Business-Type Activities: Ente!Erise Funds Solid Waste Water and Dis2osal Sewer Sanitation Golf Course Operating revenues Charges for services $3,164,761 $ 19,855,033 $2,884,526 $ 798,368 Miscellaneous 20,552 5,522 77,008 Total operating revenues 3,185,313 19,860,555 2,884,526 875,376 Operating expenses General government Public works 1,469,858 11,398,035 2,024,390 Recreation 820,627 Depreciation 850,548 3,322,113 153,242 31,633 Total operating expenses 2,320,406 14,720,148 2,177,632 852,260 Operating income [loss] 864,907 5,140,407 706,894 23,116 Nonoperating revenues [expenses] Investment revenue 24,658 98,307 5,793 386 Interest expense [44,457] [923,217] Gain/[loss] on disposal of fixed assets Accretion of bond premium 11,560 Amortization of bond issuance costs [18,472) Total nonoperating revenues [expenses] [19,799) (831,822) 5,793 386 Income [loss] before transfers 845,108 4,308,585 712,687 23,502 Transfers from [to] other funds Transfers in Transfers [out] [540,000) [3.450,000) [376,500) Total transfers [540,000) [3,450,000) [376,500) Change in net position 305,108 858,585 336,187 23,502 Net position, January 1 5,932,104 79,838,281 1,520,366 268,683 Net position, December 31 $6,237,212 $ 80,696,866 $1,856,553 $ 292,185 The notes to the basic financial statements are an integral part of this statement. 27 Total Internal Enterprise Service Funds Funds $ 26,702,688 $ 8,323,935 103,082 41,186 26,805,770 8,365,121 8,209,819 14,892,283 820,627 4,357,536 9,260 20,070,446 8,219,079 6,735,324 146,042 129,144 13,666 [967,674] [4,044] 11,560 [18,472) (845,442] 9,622 5,889,882 155,664 130,000 [4,366,500) [4,366,500) 130,000 1,523,382 285,664 87,559,434 2,077,933 $ 89,082,816 $2,363,597 Cash flows from operating activities Cash received from customers and users Cash paid to suppliers of goods or services Cash paid to employees Other operating receipts Net cash provided by [used in] operating activities Cash flows from capital and related financing activities Purchase and construction of capital assets Proceeds from sale of capital assets Proceeds from Joans Principal payments -loans Principal payments -general obligation bonds Principal payments -revenue bonds Interest paid Net cash provided by [used in] capital and related financing activities Cash flows from investing activities Interest received Cash flows from noncapital financing activities Transfers in Transfers (out) CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2017 Business-Type Activities: Enter2rise Funds Solid Waste Water and Dis2osal Sewer Sanitation Golf Course $ 3, 160,158 $19,691,753 $2,856,083 $ 798,368 (828,507] (7, 171,517] (1,101,055) (400,392] (607,960] (3,976,523) (791,564] (423,329) 20,552 5,522 77,008 1,744,243 8,549,235 963,464 51,655 (4,719,132] (84,953] (27,642] (47,023) 2,116,375 (685,589) (365,000) (747,082) (675,000) [45, 118] [960,485) [410, 118] (5,717,936) [84,953] [27,642) 24,658 98 307 5 793 386 [540,000) [3,450,000] (376,500) Net cash provided by [used in] noncapital financing activities [540,000) [3,450,000] [376,500] Net increase (decrease] in cash and cash equivalents 818,763 (520,394) 507,804 24,399 Cash and cash equivalents, January 1 5,696,219 22,635,442 1,060,752 112 874 Cash and cash equivalents, December 31 $6,515,002 $22,115,048 $1,568,556 $ 137,273 The notes to the basic financial statements are an integral part of this statement. 28 Total Internal Enterprise Service Funds Funds $ 26,506,362 $8,392,053 (9,501,471] (7,875,819] (5,799,376) [275,772] 103,082 41185 11,308,597 281,647 [4,831,727) (47,023) 2,116,375 (685,589) (1, 112,082) (675,000) [1,005,603] (6,240,649] 129 144 13,666 130,000 [4,366,500] [4,366,500] 130,000 830,592 425,313 29,505,287 2,624,520 $ 30,335,879 $3,049,833 CITY OF SALINA, KANSAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Year Ended December 31, 2017 Business-Type Activities: Enterprise Funds Total Internal Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Solid Waste Disposal Water and Enterprise Sewer Sanitation Golf Course Funds ----- Service Funds Operating income [loss] $ 864,907 $ 5,140,407 $706,894 $ 23,116 $ 6,735,324 $ 146,042 Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense [Increase] decrease in accounts receivable [Increase] decrease in inventory [Increase] decrease in deferred outflows Increase [decrease] in accounts payable Increase [decrease] in retainage payable Increase [decrease] in accrued compensated absences Increase [decrease] in claims payable Increase [decrease] in landfill postclosure liabilities Increase [decrease] in net pension liability Increase (decrease] in net OBEB obligation Increase [decrease) in meter deposits payable Increase (decrease) in deferred inflows Net cash provided by [used in] operating activities $ 850,548 [4,603) [5,914] 1,701 [16,221] 63,649 [1, 191) (12,601] 3,968 1,744,243 $ 3,322,113 153,242 31,633 [160,456) [28,443) 71,210 (3,706) (19,295] [2,089) [287) 433,569 4,827 6,743 [282,912] [27,819] 11,794 4,467 [3,883) [421) [58) 66,180 116,258 [10,445] [2,824] 12,945 1,402 192 8,549,235 $ 963,464 $ 511655 The notes to the basic financial statements are an integral part of this statement. 29 4,357,536 9,260 (193,502) 67,504 24,761 [27,585) [1, 162] 446,840 20,018 [282,912] [27,779] 14,065 68, 117 63,649 [5,553) [234] 159,392 [2,824] 18,507 780 $ 11,308,597 $ 281,647 ASSETS CITY OF SALINA, KANSAS STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS December 31, 2017 Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable Total liabilities The notes to the basic financial statements are an integral part of this statement. 30 $ 389,555 $ 389,555 $ 389,555 $ 389,555 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Salina, Kansas (the City) is a municipal corporation governed by a mayor as part of a five- member commission. These financial statements present the City and its component units, entities for which the government is considered to be financially accountable. Each discretely presented component unit is reported in a separate column in the government wide statements (see note below for descriptions) to emphasize that it is legally separated from the government. The blended component unit is reported as a governmental fund of the City (see note below for description) to emphasize that it is a part of the city. Discretely Presented Component Units City of Salina Airport Authority -The Salina Airport Authority was created for the purpose of accepting as surplus property portions of the former Schilling A.F.B that was closed by the United States Department of Defense in June 1965. One of the primary functions of the Airport Authority is to facilitate the continued growth of jobs and payroll at the Airport Industrial Center. The Airport Authority is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. Any director may be removed by a majority vote of the Salina City Commission. The Airport Authority's basic mill levy (up to 3 mills) requires the approval of the City Commission. The Commission must also approve the issuance of general obligation debt by the Airport Authority. The Airport Authority has a December 31 fiscal year end. Housing Authority of the City of Salina -The purpose of the Housing Authority of the City of Salina (Housing Authority) is to administer Public Housing Programs authorized by the United States Housing Act of 1937. The Mayor of the City of Salina appoints the governing board. The City Commission may remove commissioners of the Housing Authority. The City must issue revenue bonds for the Housing Authority. The financial liability of the Housing Authority is essentially supported by the operating and debt service subsidies received under contract from the Federal government. The Housing Authority has a June 30 fiscal year end. Information in the accompanying financial statements covers the fiscal year ended June 30, 2017. Blended Component Unit Salina Field House Qualified Active Low-Income Community Business, Inc. (SFH QalicB) -SFH QalicB was created to function as a qualified low-income community business, as defined in Section 45D(d)(2) of the Internal Revenue Code of 1986 for the purpose of providing an indoor sports facility in the downtown corridor of the city of Salina. The purpose of the facility is to cater to local residents as well as host regional sports tournaments with the anticipation of becoming a regional destination for youth athletics. This mix of participation is expected to provide the most consistent visitation and tourism for the downtown district. The SFH QalicB is managed and controlled by a five-member Board of Directors appointed by the Salina City Commission. The field house is staffed by City of Salina employees. SFH QalicB has a December 31 fiscal year end. SFH QalicB is a not-for-profit organization exempt from income tax under Section 501(c)(3) of the Internal Revenue Code and is exempt from similar state and local taxes. Complete financial statements for each of the individual component units may be obtained at the entity's administrative offices. Salina Airport Authority 3237 Arnold Ave. Salina, KS Joint Ventures Housing Authority of the City of Salina 469 S. 5th Salina, KS Salina Field House QALICB, Inc. 300 W. Ast St. Salina, KS The City of Salina also participates with Saline County in one joint venture. The City and County organized the Salina County-City Building Authority to acquire, operate and maintain facilities for the administrative offices of both governments. The primary governments each have an ongoing financial responsibility for the joint venture. Separate financial statements are available from the governing board of the joint venture. 31 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A. Reporting Entity (Continued) Joint Ventures (Continued) Total unencumbered cash, December 31, 2017 Total change in unencumbered cash, year ended December 31, 2017 Total cash receipts, year ended December 31, 2017 Total cash receipts from City of Salina (Kansas Regulatory Basis) Building Authority (Audited) $ 1,173,041 22,690 1,431,170 440,883 Complete financial statements for the joint venture may be obtained at the entity's administrative office. Salina County-City Building Authority 300 West Ash Street Salina, KS B. Government-wide and fund financial statements The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges between the City's governmental and business-type activities. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational requirements of a particular program. Taxes and other items, which are not classified as program revenues, are presented as general revenues of the city. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 32 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to certain compensated absences and claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources. Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net position. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund's ongoing operations. The principal operating revenues of the City's proprietary funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenues and expenses. The internal service funds account for risk management, worker's compensation, health insurance, central garage and information services that are provided to other departments or agencies of the government, or to other governments, on a cost-reimbursement basis. Agency funds are custodial in nature and do not measure results of operations or have a measurement focus. Agency funds do however use the accrual basis of accounting. Agency funds are used to account for assets held as an agent for individuals, other governmental units, private organizations and/or other funds. The City reports the following major governmental funds: General fund -To account for resources traditionally associated with government, which are not required legally, or by sound financial management to be accounted for in another fund. Tourism and convention fund -To account for transient guest tax revenues, which are specifically restricted to promotion and tourism activities. Special gas fund -To account for the City's share of motor fuel tax revenues, which are legally restricted to the maintenance, or improvement of streets within the City. Sales tax capital fund -To account for 93% of the .40 cent sales tax designated for capital, debt, and human services purposes. Schilling capital improvement fund -To account for the funding provided by U.S. Government and Public Entities and the remedial investigation, feasibility study and expenditures necessary to abate groundwater contamination beneath the property formerly identified as Schilling Air Force Base. 33 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Debt service fund -To account for the accumulation of resources and payment of general obligation bond principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. Capital projects fund -To account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. SFH QalicB fund -To account for the activities of Salina Field House Qualified Active Low-Income Community Business, Inc. as a component unit blended into the financial statements. The City reports the following major proprietary funds: Sanitation fund -To account for the operations of the City's refuse collection service. Solid waste disposal fund -To account for the activities of the City's landfill. Golf course fund -To account for the operations of the municipal golf course. Water and sewer fund -To account for the activities of the City's water and sewer operations. D. Assets, Liabilities, Fund Balance, and Net Position 1. Pooled cash and investments The City maintains a cash and investment pool that is available for use by all funds managed by the city. Each fund type's portion of this pool is displayed in the financial statements as "Cash and Investments." The city's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments in the Kansas Municipal Pool are carried at fair value. Cash balances from all funds are invested to the extent available in certificates of deposit and other authorized investments. Investments with maturity dates greater than three months are stated separately. Earnings from these investments, unless specifically designated, are allocated monthly to the investing fund based on the percentage of funds invested to total investments. All investments are carried at fair value. 2. Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the year are referred to as either "interfund receivables/payables" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Accounts Receivable. The City records revenues when services are provided. All receivables are shown net of an allowance for doubtful accounts. Property taxes receivable. Collection of current year property tax by the County Treasurer is not completed, apportioned or distributed to the various subdivisions until the succeeding year, such procedure being in conformity with governing state statutes. Consequently, current year property taxes receivable are not available as a resource that can be used to finance the current year operations of the City and, therefore, are not susceptible to accrual. Accruals of uncollected current year property taxes are offset by deferred revenue and are identical to the adopted budget for 2018. It is not practicable to apportion delinquent taxes held by the County Treasurer at the end of the accounting period, and further, the amounts thereof are not material in relationship to the financial statements taken as a whole. 34 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities and Equity (Continued) 2. Receivables and Payables (Continued) The determination of assessed valuations and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The County Appraiser annually determines assessed valuations on January 1 and the County Clerk spreads the annual assessment on the tax rolls. The County Treasurer is the tax collection agent for all taxing entities within the County. In accordance with state statutes, property taxes levied during the current year are a revenue source to be used to finance the budget of the ensuing year. Property taxes are levied and liens against property are placed on November 1 of the year prior to the fiscal year for which they are budgeted. Payments are due November 1, becoming delinquent, with penalty, December 21. Payments of 50% are accepted through December 20, with the second 50% then being due on or before May 10 of the following year. This procedure eliminates the need to issue tax anticipation notes since funds will be on hand prior to the beginning of each fiscal year. The City Treasurer draws down all available funds from the County Treasurer's office in two-month intervals. Truces remaining due and unpaid at February 15 and July 1 are subject to collection procedures prescribed in state statutes. 3. Inventories and Prepaid Items Inventories are valued at cost using the first-in/first-out (FIFO) method. The costs of governmental fund-type inventories are recorded as expenditures when consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. 4. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Capital assets used in governmental fund types of the City are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type is included in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Property, plant and equipment of the primary government, are depreciated using the straight-line method over the following estimated useful lives: Assets Buildings Other equipment Vehicles Infrastructure 35 Years 50 5 -15 6-10 30-50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 5. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All employees of the City, except temporary and part time employees, may accumulate sick leave at a rate of 8 or 11 hours per month depending on their work duty schedule. There is no limit on the amount of sick leave that can be accumulated. Employees with more than five years of service with the City are paid for one-third of their accumulated sick leave at their current wage scale upon termination of employment in good standing. In 2001, a limited buy back policy was instituted. · All regular employees are entitled to paid vacation time. Such leave is granted each year of employment. Employees must use 50% of leave accrued each calendar year and an employee's maximum accrued vacation leave balance cannot exceed 250 hours (or 350 hours for employees working 24 hour shifts). Employees are paid for all accumulated vacation leave at their current wage scale upon termination of employment. Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability in the government fund financial statements that will pay it. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave of the business-type funds and government wide financial statements are recorded as an expense and liability of those funds as the benefits accrue to employees. A liability is recorded for accumulated rights to receive sick pay benefits that are payable upon termination of employment. The General Fund, Bicentennial Center Fund, Central Garage Fund, Sanitation Fund, Solid Waste Fund, Golf Course Fund, and Water and Sewer Fund have been used in prior years to liquidate the liability for compensated absences. 6. Temporarv Notes Upon authorization for the issuance of general obligation bonds for certain improvements, Kansas law permits the temporary financing of such improvements by the issuance of temporary notes. Temporary notes issued may not exceed the aggregate amount of bonds authorized, are interest bearing and have a maturity date not later than four years from the date of issuance of such temporary notes. Temporary notes outstanding are retired from the proceeds of the sale of general obligation bonds. 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 36 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 8. Fund Balances In the fund financial statements, governmental funds report fund balance in the following classifications: nonspendable, restricted, committed, assigned and unassigned. Nonspendable fund balance includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Restricted fund balance indicates that constraints have been placed on the use of resources either by being externally imposed by creditors, granters, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. Committed fund balances include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the city commission. Assigned fund balances include amounts that are constrained by the City management's intent to be used for specific purposes, but are neither restricted nor committed. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available restricted amounts are considered to be spent first. When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund balance is available, the following is the order in which resources will be expended: committed, assigned and unassigned. The following is the detail for fund balance classifications in the financial statements: Ma1or Govemmental Funds Tounsm Sch1ll1ng Other Total and · Special Sales Tax Capital Debt Capital SFH Govemmental Govemmental ~ Convention ~ ~ lmQrQvement ~ ~ OahcB EYlli!1 EYlli!1 Fund Balances. Nonspendable for. Inventory $ 152,982 $ . $ . $ . $ . $ $ . $ 152,982 Restricted for Publicwor1<s 1,072,347 1,072,347 Public health and san1tabon 164 164 Culture and recreabon 124,221 124,221 Planning and development 213,461 232,778 446,239 Debt payments 1,509,863 1,037,888 2.547,751 Committed for. Public safety 375,147 375,147 Culture and recreabon 690,067 690,067 Planning and development 1,714,956 18,589 1,733,545 Cemetery 495,895 495,895 Capital improvements 1,658,876 2,817,807 895,117 1,406,025 6,7n,825 Assigned for General government 28,477 28,477 Public safety 121,515 121,515 Pubhcwor1<s 61,533 61,533 Culture and recreation 2,485 2,485 Capital Improvements 9,951 424,738 206,771 641,460 Unassigned 6 515 517 ---[27,854) 6,487,663 Total Fund Balances $ 6,882 509 ~ $ 1.082.298 $ 2,083614 $ 3,024.578 $ 1,509 863 $ 895,117 $ 1,714 956 $ 4.352.920 $ 21.759 316 37 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Fund Balance, and Net Position (Continued) 9. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City reports a deferred charge on bond issuance reported in the government-wide statement of net position. A deferred charge on bond issuance results from the difference in the carrying value of the debt and its reacquisition price. This amount is deferred and amortized over the life of the debt. Additionally, the City reports changes in the pension liability proportion and contributions made to the pension plan after the measurement date of the net pension liability as deferred outflows of resources in the government activities. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Unavailable revenue -property taxes, is reported in the governmental funds balance sheet and the governmental activities in the government-wide statement of net position. Additionally, the City reports differences between expected and actual experience, differences between projected and actual investment earnings, changes in assumptions, and changes in the pension liability proportion as deferred inflows for governmental activities. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 10. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 11. Net Position Net position represents the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, granters or laws or regulations of other governments. Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information Kansas statutes require that an annual operating budget be legally adopted for the general fund, special revenue funds (unless specifically exempted by statute). debt service fund, and enterprise funds. The statutes provide for the following sequence and timetable in the adoption of the legal annual operating budget: 1. Preparation of the budget for the succeeding year on or before August 1. 2. Publication in local newspaper of the proposed budget and notice of public hearing on the budget on or before August 5. 3. Public hearing on or before August 15, but at least ten days after publication of notice of hearing. 4. Adoption of the final budget on or before August 25. 38 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) A. Budgetary Information (Continued) The statutes allow the governing body to increase the originally adopted budget for previously unbudgeted increases in revenue other than ad valorem property taxes. To do this, a notice of public hearing to amend the budget must be published in the local newspaper. At least ten days after publication the hearing may be held and the governing body may amend the budget at that time. The 2017 budget was amended for the Tourism and Convention Fund and the Sales Tax Capital Fund. The statutes permit management to transfer budgeted amounts between line items within an individual fund. However, such statutes prohibit expenditures in excess of the total amount of the adopted budget of expenditures of individual funds. Budget comparison statements are presented for each fund showing actual receipts and expenditures compared to legally budgeted receipts and expenditures. ' All legal annual operating budgets are prepared using the statutory basis of accounting, in which, revenues are recognized when cash is received, and expenditures include disbursements, accounts payable, and encumbrances. Encumbrances are commitments by the municipality for future payments and are supported by a document evidencing the commitment, such as a purchase order or contract. All unencumbered appropriations (legal budget expenditure authority) lapse at year end. A legal operating budget is not required for capital projects funds, the SFH QalicB fund, non-major debt service funds, trust funds, and the following special revenue funds: Community Development Revolving, Downtown TIF District #1, South 9th CID, State Grants, 911 Communications, Kenwood Cove Capital, Special Law Enforcement, Police Grants, Federal Grants, DARE Donations, War Memorial Maintenance, Federal CARE Grant, Police Department Federal Forfeiture, Homeowners' Assistance, Private Grants and Animal Shelter Donations Funds. A legal operating budget is not required for the following Enterprise funds: Solid Waste Disposal, Water and Sewer, Sanitation and Golf Course Funds. A legal operating budget is also not required for the Internal Service funds. Actual to budget comparisons for these funds that present budgets to the Commissioners are shown strictly for informational purposes. Spending in funds, which are not subject to the legal annual operating budget requirements are controlled by federal regulations, other statutes, or by the use of internal spending limits established by the governing body. · B. Statutory Violations Actual exceeded budgeted expenditures at December 31, 2017 in the Tourism and Convention Fund which violates KSA 79-2935. C. Legal Debt Margin The City is subject to the municipal finance law of the state of Kansas which limits the bonded debt (exclusive of revenue bonds and special assessment bonds) the city may have outstanding to 30 percent of the assessed value of all tangible taxable property within the city, as certified to the county clerk on the proceeding August 25. At December 31, 2017, the statutory limit for the City was $142,000,537, providing a debt margin of $80,704,353. 39 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 3. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments The City's cash is considered to be active funds by management and is invested according to KSA 9-1401. The statute requires that banks eligible to hold active funds have a main or branch bank in the county in which the City is located or in a county adjacent to the City and the banks provide an acceptable rate for active funds. Various City investments are considered to be idle funds by management and are invested according to KSA 12-1675. The statute requires that the City invest its idle funds in only temporary notes of the City, bank certificates of deposit, repurchase agreements, and if eligible banks do not offer an acceptable rate for the funds: U.S. Treasury bills or notes or the Municipal Investment Pool (KMIP). Maturities of the above investments may not exceed two years by statute. Some of the City's investments are of bond proceeds invested pursuant to KSA 10-131. This statute allows additional investment authority beyond that of KSA 12-1675. Investments of bond proceeds may follow KSA 12-1675 or include other investments such as the KMIP, direct obligations of the U.S. government or any agency thereof, investment agreements with a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody's investors service or Standard and Poor's corporation, and various other investments as specified in KSA 10-131. At December 31, 2017, the City has the following investments: Investment Type Fair Value Kansas Municipal Investment Pool $ 305,523 S&P AAAf/S1+ Total fair value $ 305,523 The municipal investment pool is under the oversight of the Pooled Money Investment Board. The board is comprised of the State Treasurer and four additional members appointed by the State Governor. The board reports annually to the Kansas legislature. State pooled monies may be invested in direct obligations of, or obligations that are insured as to principal and interest by the U.S. government or any agency thereof, with maturities up to four years. No more than 10 percent of those funds may be invested in mortgage-backed securities. In addition, the State pool may invest in repurchase agreements with Kansas banks or with primary government securities dealers. 40 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) A. Deposits and Investments (Continued) The City's investment policy provides direction on concentration risk. The City policy states that funds shall be diversified to reduce the extent of losses due to having an unbalanced portfolio in terms of maturities, instrument type, and issuers. Therefore, portfolio maturities shall be staggered to avoid undue concentration of assets in a specific maturity sector. Liquidity, free of market risk, shall be assured through practices insuring that the next disbursement date and payroll date are covered through maturing investments, marketable U.S. Treasury Bills, the Municipal Investment Pool, or money market accounts. Default risk shall be minimized by requiring that all security purchases occur on a delivery vs. payment basis, and that all securities are adequately collateralized. Risk of market price volatility shall be controlled through the adoption of a "buy and hold" strategy whereby the City holds each investment to maturity, coupled with maintenance of an adequate liquidity position to insure the ability to meet normal anticipated cash flow needs. When advantageous, it is allowable to sell investments to realize a gain due to price fluctuations; however, such transactions shall not be a part of the normal course of business. The City recognizes that investment risks can result from issuer defaults, market price changes or various technical complications leading to temporary illiquidity. Portfolio diversification is employed as a way to control risk due to issuer default. In the event of a default by a specific issuer, the Director of Finance and Administration shall review, and, if appropriate, proceed to liquidate securities having comparable credit risks. Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned to it. The City's deposit policy for custodial credit risk require that the depository banks will maintain 100% security in the form of FDIC coverage and pledged collateral according to KSA 9-1402. As of December 31 2017, the City's deposits were considered fully secured. Restricted cash is comprised of a construction account, an interest reserve account (the "Interest Reserve"), and an expense reserve account (the "Operating Reserve") related to the SFH QalicB blended component unit. The Interest Reserve and the Operating Reserve accounts are available as part of the loans payable financing (see Note 4E). As of December 31, 2017, the balance of the construction account, Interest Reserve, and Operating Reserve was $1,439,071, $437,246, and $125,272, respectively. 41 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) B. Receivables c. Receivables as of year-end, including the applicable allowances for doubtful accounts, are as follows: Tourism and Special Debt Capital SFH General Convention Gas Service Projects QalicB Primary Government Receivables: Accounts $ 6,066,477 $ 476,551 $ $ -$ 54,161 $ 123,914 Taxes 8,864,737 322,888 2,521,302 Interest 16726 Gross receivables 14,947,940 476,551 322,888 2,521,302 54,161 123,914 Less: allowance for uncollectibles [4,808,49IJ Total $ 10,139 443 ~ 476 551 ~ 322 888 ~ 2 521,302 ~ 54,161 ~ 123914 Solid Water Waste and Diseosal Sewer Primary Government Receivables: Accounts $ 194,086 $ 2,790,241 Taxes Interest 16 Gross receivables 194,102 2,790,241 Less: allowance for uncollectibles [1,299,529] Total ~ 194,102 ~ 1,490,712 Component Units Salina Airport Authority Accounts Less: allowance for uncollectibles Total Salina Airport Authority Salina Housing Authority Accounts Less: allowance for uncollectibles Interest Total Salina Housing Authority Total lnterfund Receivables and Payables The composition of interfund balances as of December 31, 2017, is as follows: Fund Types Due From Due To General Fund Capital Project Fund SFH QalicB Fund Police Grants Fund $ 27,854 $ 9,656 9,656 27,854 $ 37,510 $ 37,510 Other Governmental Subtotal $ 16,034 $ 6,737,137 11,708,927 16726 16,034 18,462,790 [13,170] [4,821,667] ~ 2,864 ~ 13 641123 Sanitation Total $ 408,313 $ 10,129,777 11,708,927 16742 408,313 21,855,446 [190,168] [6,311,364] ~ 218,145 $ 15,544 082 $ 268,134 [1,500] 266634 18,934 [1,000] 435 18369 ~ 285,003 The City uses interfund receivables and payables between the General Fund and Other Governmental Funds as needed when pooled cash is negative within a fund until investments mature or grant proceeds are received. All payables are cleared in less than one year. 42 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Capital Assets Capital asset activity for the year ended December 31, 2017, was as follows: Balance Adj. Bal. Balance 12/31/2016 {ldjustments 12/31/201§ Additions Retirements 12/31/2017 City governmental activities: Governmental activities: Capital assets, not being depreciated Construction in progress $ 30,810,942 $ -$ 30,810,942 $ 8,706,902 $ 10,608,276 $ 28,909,568 Land 24,001,859 24,001,859 91,000 24,092,859 Capltal assets, being depreciated Infrastructure 193,545,859 193,545,859 5,769,479 199,315,338 Buildings and improvements 43,599,404 43,599,404 9,417,305 7,030 53,009,679 Vehicles 9,551,939 9,551,939 1,276,732 442,172 10,386,499 Equipment, furniture and fixtures 5,628,958 5,628,958 1,056,286 71,233 6,614,011 Total capital assets 307,138,961 307, 138,961 26,317,704 11,128,711 322,327,954 Less accumulated depreciation for: Infrastructure 80,432,297 80,432,297 3,925,147 84,357,444 Buildings and improvements 18,742,249 18,742,249 1,191,358 3,156 19,930,451 Vehicles 6,403,701 6,403,701 763,511 300,936 6,866,276 Equipment, furniture and fixtures 4,438,786 4,438,786 196 041 60 998 4,573,829 Total accumulated depreciation 110,017,033 110,017,033 6,076,057 365,090 115,728,000 Governmental activities capltal assets, net $ 197,121,928 $ -$ 197J21,928 $ 20,241,647 $ 10,763,621 $ 206,599,954 Business-type activities: Capfal assets, not being depreciated Construction in progress $ 15,727,780 $ -$ 15,727,780 $ 4,389,421 $ 17,967,412 $ 2,149,789 Land 1,541,806 1,541,806 1,541,806 Capltal assets, being depreciated Infrastructure 101,119.995 101,119,995 18,337,654 119,457,649 Buildings and improvements 22,579,933 22,579,933 22,579,933 Vehicles 3,652,923 3,652,923 84,953 47,024 3,690,852 Equipment, furniture and fixtures 5,302,926 5,302,926 34134 5,337,060 Total capital assets 149,925,363 149,925,363 22,846,162 1M14,436 154,757,089 Less accumulated depreciation for: Infrastructure 40,241,102 40,241,102 3,488,860 43,729,962 Buildings and improvements 12,796,638 12,796,638 421,287 13,217,925 Vehicles 2,492,221 2,492,221 205,045 47,024 2,650,242 Equipment, furniture and fixtures 3,611,055 3,611,055 242 344 3,853,399 Total accumulated depreciation 59,141,016 59,141,016 4,357,536 47,024 63,451,528 Business-type activities capltal assets, net $ 90,784,347 $ -$ 90,784,347 $ 18,488,626 $ 17,967,412 $ 91,305,561 43 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued} D. Capital Assets (Continued} The City's depreciation expense was charged to governmental functions as follows: Governmental Activities: General government $ 75,433 Public safety 721,766 Public works 4,280,905 Public health 30,270 Culture and recreation 811,875 Planning and development 1551808 Total depreciation $ 6,076,057 Business-type Activities: Solid Waste Disposal $ 850,548 Water and Sewer 3,322,113 Sanitation 153,242 Golf Course Division 311633 Total depreciation $ 4,357,536 E. Long-Term Debt Following is a summary of changes in long-term debt for fiscal year 2017: Restated Balance Balance January 1, December 31, 2.Q.1Z ~ ~ 2.Q.1Z Governmental activities: General obligation bonds $ 51,816,400 $ 9,388,370 $ 5,210,465 $ 55,994,305 Financing lease 321,174 163,306 157,868 Loans payable 12, 157, 127 13,963 12,171,090 Accrued compensation 2,803,847 1,493,457 1,499,346 2,797,958 Temporary notes 11,505,000 2,196,742 6,890,000 6 811 742 Total $ 78,603,548 $ 13,092,532 $ 13,763,117 $ 77,932,963 Business-type activities: General obligation bonds $ 7,640,380 $ -$ 1,119,947 $ 6,520,433 Revenue bonds 13,285,443 678,696 12,606,747 Loans payable 7,432,024 2,116,375 685,589 8,862,810 Accrued compensation 670 126 316 436 344 215 642 347 Total $ 29,027,973 $ 2,432,811 $ 2,828,447 $ 28,632,337 Component Units: General obligation bonds $ 22,632,000 $ 2,520,000 $ 1,065,000 $ 24,087,000 Less unamortized discount [204,733) [53,956) [179,204) [79,485) Special assessment debt 11 268 2 061 9 207 Total component units $ 22,438,535 $ 2,466,044 $ 887,857 $ 24,016,722 44 Amounts Due Within .Qne.Yw $ 5,561,280 157,868 1,499,345 2, 196,742 $ 9,415,235 $ 1,242,407 708,696 571,773 344 215 $ 2,867,091 $ 1,220,000 2 153 $ 1,222,153 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) The following is a detailed listing of the city's long-term debt including general obligation bonds, revenue bonds, temporary notes and loans payable: Primary Government General Obligation Bonds Internal Improvements 2008B, due 7/1/2028 Internal Improvements 2009A, due 10/1/2029 Internal Improvements 2010A, due 10/1/2025 Internal Improvements 2010B, due 10/1/2023 Internal Improvements 2011A, due 10/1/2031 Internal Improvements 2012A, due 10/1/2027 Refunding 20128, due 10/1/2020 Internal Improvements 2013A, due 10/1/28 Internal Improvements 20138, due 10/1/33 Internal Improvements 2014A, due 10/1/34 Improvement and Refunding 2015A, due 10/1/35 Internal Improvements 2016A, due 10/1/36 Refunding 20168, due 10/1/2031 Internal Improvements 2017A, due 10/1/37 Total general obligation bonds Revenue Bonds Revenue 2011, due 10/1/31 Total revenue bonds Temporary Notes Series 2016-2, due 9/1/2019 Series 2017-1, due 8/1/2018 Total temporary notes Loans Payable Kansas Public Water Supply, due 8/1/2034 Kansas Public Water Supply, due 8/1/2035 Dakotas & CNMC Notes, due 12/10/2050 Total loans payable Financing Lease, due 2110/2017 Equipment, due 5/8/18 Software, due 10/10/18 45 Original Interest Bonds Issue Rates Outstanding $ 3,525,000 3.65% to 5.00% $ 1,845,000 23,695,000 2.00% to 5.00% 5,220,404 6,916,592 2.00% to 3.875% 968,318 7,973,044 0.50% to 3.00% 2,297,173 6,587,985 2.00% to 5.00% 1,444,598 2,383,903 1.00% to 2.45% 1,662,602 3,817,108 1.00% to 1.40% 902,040 1,369,380 3.00% to 4.00% 1,086,880 4,485,073 0.60% to 3.65% 3,539,058 7,839,050 2.50% to 3.75% 6,088,693 7,157,688 2.00% to 4.00% 6,494,420 6,681,766 2.00% to 3.00% 6,436,178 15,141,004 2.00% to 5.00% 15,141,004 9,388,370 3.00% to 3.375% 913881370 $ 62,514,738 $ 16,193,925 2.00% to 4.60% $ 12,606,747 $ 12,606,747 $ 4,615,000 2,180,000 $ 9,330,000 4,250,000 12,640,000 $ 146,235 456,370 1.00% 2.00% 2:12% 2.78% 1.58% 3.28% 3.19% $ 4,615,000 2,196,742 $ 6,811,742 $ 4,833,476 4,029,334 12,171,090 $ 21,033,900 $ 38,347 119,521 $ 157,868 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Component Unit Salina Airport Authority General Obligation Bonds General Obligation 2009B, due 2021 General Obligation 2011A, due 2023 General Obligation 2015A, due 2025 Temporary Note 2016-1, due 2019 Temporary Note 2017-1, due 2019 General Obligation 2017 A, due 2030 General Obligation 2017B, due 2025 Less unamortized bond premium Less unamortized bond discount Total general obligation bonds Special Assessment Debt Hangar 600 Sanitary Sewer, due 2021 Total special assessment debt Total Original Issue $ 6,080,000 11,820,000 3,075,000 657,000 1,440,000 10,255,000 4,835,000 27,599 Interest Rates 4.78 3.89% 2.67% 0.90% 1.43% 3.04% 3.02% 4.47% Bonds Outstanding $ 1,545,000 3,160,000 2,195,000 657,000 1,440,000 10,255,000 4,835,000 33,023 [112,508] 24,007,515 9,207 9,207 $ 24,016,722 Annual debt service requirements to maturity for general obligation bonds to be paid with tax levies: General Obligation -Primary Government Bonds Interest Year Outstanding Due Total 2018 $ 6,803,687 $ 1,899,204 $ 8,702,891 2019 6,923,687 1,627,845 8,551,532 2020 4,778,686 1,431,514 6,210,200 2021 4,498,434 1,298,645 5,797,079 2022 4,577,283 1,150,154 5,727,437 2023-2027 18,891,638 18,891,638 37,783,276 2028-2032 10,234,792 1,648, 156 11,882,948 2033-2037 5,806,531 453 346 6,259,877 Total $ 621514,738 $ 28,400,502 $ 90,915,240 46 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Year 2018 $ 2019 2020 2021 2022 2023-2027 2028 -2031 Total $ General Obligation -Component Units Bonds Interest Outstanding Due 1,220,000 $ 746,880 1,310,000 652,277 1,350,000 612,110 1,400,000 565,880 1,455,000 511,135 7,970,000 1,852,938 712851000 5751795 2119901000 $ 5,517,015 Total $ 1,966,880 1,962,277 1,962,110 1,965,880 1,966,135 9,822,938 71860}95 $ 271507,015 Annual debt service requirements to maturity for revenue bonds to be paid with utility revenues: Revenue Bonds -Prima!}'. Government Bonds Interest Year Outstanding Due Total 2018 $ 708,696 $ 509,141 $ 1,217,837 2019 728,696 487,991 1,216,687 2020 748,696 466,242 1,214,938 2021 773,696 798,696 1,572,392 2022 798,696 414,148 1,212,844 2023-2027 4,498,480 1,563,177 6,061,657 2028-2031 41349,787 504 816 4,854,603 Total $ 12,606z747 $ 4z7441211 $ 171350,958 Annual debt service requirements to maturity for temporary notes -to be paid through the issuance of general obligation bonds: Temporary Notes -Primary Go\emment Notes Interest Year Outstanding Due Total 2018 $ 2,196,742 $ 90,234 $ 2,286,976 2019 4,615,000 46, 150 4,661, 150 Total $ 6,811,742 $ 136,384 $ 6,948, 126 47 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Annual debt service requirements to maturity for financing leases -to be paid from revenues: CaEital Lease -Prima!J'. Government Lease Interest Year Outstanding Due Total 2018 $ 1571868 $ 5 071 $ 1621939 Total $ 157,868 $ 5,071 $ 162,939 Kansas Public Water Supply Loans. The City has engaged in a loan with the Kansas Public Water Supply Fund. The following displays annual debt service requirements to maturity for the loan payable to be paid from service revenues, for the full proceeds amount: Kansas Water Supply Loans -Primary GO\ernment Loans Interest Year Outstanding Due Total 2018 $ 571,773 $ 277, 128 $ 848,901 2019 580,276 268,625 848,901 2020 593,764 255, 137 848,901 2021 607,573 241,328 848,901 2022 621,707 227,194 848,901 2023-2027 3,332,540 911,965 4,244,505 2028-2032 3,739,637 504,868 4,244,505 2033-2035 2,150,661 95,361 2,246,022 Total $ 12,197,931 $ 2,781,606 $ 14,979,537 Dakotas and CNMC Notes. Dakotas Note A -On July 27, 2016, a $6,016,500 promissory note with a maturity date of December 10, 2050 was provided to SFH QalicB by Dakotas XXll, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2026, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $293,276 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2017, the note balance was $6,016,500. 48 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Dakotas Note 8 -On July 27, 2016, a $2,623,500 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by Dakotas XXll, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $127,883 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2017, the note balance was $2,623,500. CNMC Note A-On July 27, 2016, a $2,674,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $130,345 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2017, the note balance was $2,674,000. CNMC Note B -On July 27, 2016, a $1,326,000 promissory note with a maturity date of December 10, 2050 was provided to the SFH QalicB by CNMC Sub-COE 114, LLC. Interest accrues on the unpaid principal balance at an interest rate of 1.582625% with annual interest only payments, partially in arrears and partially in advance, commencing on December 10, 2016 and continuing on the tenth day of each December thereafter through December 10, 2025. On July 27, 2023, payment of all accrued and unpaid interest through July 27, 2023 is due. Commencing on December 10, 2023 and continuing on the tenth day of each December thereafter through December 10, 2025, accrued and unpaid interest shall be due and payable annually, partially in arrears and partially in advance for interest accruing through the end of each calendar year. Commencing on December 10, 2026 and continuing through the maturity date, annual payments of principal and interest in an amount equal to $64,636 are due. At maturity, the entire outstanding principal balance plus all accrued and unpaid interest thereon is due and payable in full. The loan may not be prepaid prior to July 27, 2023 and is secured by the Loan and Security Agreement. As of December 31, 2017, the note balance was $1,326,000. As of December 31, 2017, the principal balance of these four loans net of $468,910 of unamortized debt issuance costs was $12, 171,090. 49 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued} E. Long-Term Debt (Continued} Annual debt service requirement to maturity for Special Assessment Debt to be paid from rental revenue: Special Assessment Debt -Component Units Assessment Interest Year Outstanding Due Total 2018 $ 2,153 $ 412 $ 2,565 2019 2,249 315 2,564 2020 2,350 215 2,565 2021 2455 110 21565 Total $ 91207 $ 11052 $ 101259 Special assessments. As provided by Kansas statutes, projects financed in part by special assessments are financed through general obligation bonds of the City and are retired from the debt service fund. Special assessments paid prior to the issuance of bonds are recorded as revenue in the appropriate project. Special assessments received after the issuance of bonds are recorded as revenue in the debt service fund. The special assessments are not recorded as revenue when levied against the respective property owners as such amounts are not available to finance current year operations. The special assessment debt is a contingent obligation of the City to the extent of property owner defaults, which have historically been immaterial. Premises lease. On July 27, 2016, SFH QalicB entered into a lease agreement with the City for the use of the Salina Field House, as defined in the Net Lease agreement (the "Property"}, under a direct financing lease. The lease term is 30 years, as defined in the Net Lease agreement. Beginning on July 1, 2017 and on the first day of each December thereafter through December 1, 2046, annual payments are due, in advance, as specified in the Net Lease agreement. For the year ended December 31, 2017, SFH QalicB earned $246,458 of rental income under the terms of the Net Lease. As of December 31, 2017, rental income of $123,914 remained receivable from the City. 50 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) E. Long-Term Debt (Continued) Premises lease (continued). The following is a schedule, by year, of total minimum lease payments by the City to SFH QalicB under the direct financing lease as of December 31, 2017: 2018 $ 130,000 2019 130,000 2020 130,000 2021 130,000 2022 130,000 2023-2027 1,917,500 2028-2032 3,250,000 2033-2037 3,250,000 2038-2042 3,250,000 2043-2046 212751000 $ 14,592,500 F. Operating Leases On December 20, 2012, the City and Saline County jointly entered into a non-cancelable lease to finance a $2,750,000 heating, ventilation and air conditioning (HVAC) upgrade at the Saline County-City Building Authority. The City's share of the lease agreement is 40% and will pay the lessor $1, 100,000, plus interest, through monthly payments of $7,827 over a term of 180 months. The total cost for this lease was $93,926 for the year ended December 31, 2017. The future minimum lease payments for the lease are as follows: Year Amount 2018 $ 93,926 2019 93,926 2020 93,926 2021 93,926 2022 93,926 2023-2027 4691633 Total $ 939,263 51 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 4. DETAILED NOTES ON ALL FUNDS {Continued) G. Reconciliation of Transfers A reconciliation of interfund transfers follows: Transfer In Transfer Out Major Funds: General fund $4,626,500 $ 810,000 Tourism and convention fund 723,942 Special gas fund 160,000 Sales tax capital fund 2,568,350 Debt service 2,241,309 Capital projects 57,666 Salina Fieldhouse QALICB, Inc. Other governmental funds 1,310,983 Agency funds 57,666 Solid waste disposal fund 540,000 Water and sewer fund 3,450,000 Sanitation fund 376,500 Central garage fund 130,000 Total Transfers $ 8,526,458 $ 8,526,458 The City uses interfund transfers to share administrative costs between funds. 52 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION A Defined Benefit Pension Plan Description of Pension Plan. The City participates in a cost-sharing multiple-employer pension plan (Pension Plan), as defined in Governmental Accounting Standards Board Statement No. 67, Financial Reporting for Pension Plans. The Pension Plan is administered by the Kansas Public Employees Retirement System (KPERS), a body corporate and an instrumentality of the State of Kansas. KPERS provides benefit provisions to the following statewide pension groups under one plan, as provided by K.S.A. 74, article 49: Public employees, which includes: • State/School employees • Local employees • Police and Firemen • Judges Substantially all public employees in Kansas are covered by the Pension Plan. Participation by local political subdivisions is optional, but irrevocable once elected. Those employees participating in the Pension Plan for the City are included in the Local employees group and the Kansas Police and Firemen group. KPERS issues a stand-alone comprehensive annual financial report, which is available on the KPERS website at www.kpers.org. Benefits. Benefits are established by statute and may only be changed by the State Legislature. Members (except Police and Firemen) with ten or more years of credited service, may retire as early as age 55 (Police and Firemen may be age 50 with 20 years of credited service), with an actuarially reduced monthly benefit. Normal retirement is at age 65, age 62 with ten years of credited service, or whenever a member's combined age and years of service equal 85. Police and Firemen normal retirement ages are age 60 with 15 years of credited service, age 55 with 20 years, age 50 with 25 years, or any age with 36 years of service. Monthly retirement benefits are based on a statutory formula that includes final average salary and years of service. When ending employment, members may withdraw their contributions from their individual accounts, including interest. Members who withdraw their accumulated contributions lose all rights and privileges of membership. For all pension coverage groups, the accumulated contributions and interest are deposited into and disbursed from the membership accumulated reserve fund as established by K.S.A. 74- 4922. Members choose one of seven payment options for their monthly retirement benefits. At retirement a member may receive a lump-sum payment of up to 50% of the actuarial present value of the member's lifetime benefit. His or her monthly retirement benefit is then permanently reduced based on the amount of the lump sum. Benefit increases, including ad hoc post-retirement benefit increases, must be passed into law by the Kansas Legislature. Benefit increases are under the authority of the Legislature and the Governor of the State of Kansas. The 2012 Legislature made changes affecting new hires, current members and employers. A new KPERS 3 cash balance retirement plan for new hires starting January 1, 2015, was created. Normal retirement age for KPERS 3 is 65 with five years of service or 60 with 30 years of service. Early retirement is available at age 55 with ten years of service, with a reduced benefit. Monthly benefit options are an annuity benefit based on the account balance at retirement. 53 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) For all pension coverage groups, the retirement benefits are disbursed from the retirement benefit payment reserve fund as established by K.S.A. 74-4922. Contributions. Member contributions are established by state law, and are paid by the employee according to the provisions of Section 414(h) of the Internal Revenue Code. State law provides that the employer contribution rates are determined based on the results of an annual actuarial valuation. The contributions arid assets of all groups are deposited in the Kansas Public Employees Retirement Fund established by K.S.A. 7 4-4921. All of the retirement systems are funded on an actuarial reserve basis. For fiscal years beginning in 1995, Kansas legislation established statutory limits on increases in contribution rates for KPERS employers. Annual increases in the employer contribution rates related to subsequent benefit enhancements are not subject to these limitations. The statutory cap increase over the prior year contribution rate is 1.2% of total payroll for the fiscal year ended June 30, 2017. The actuarially determined employer contribution rates (not including the 1.00% contribution rate for the Death and Disability Program) and the statutory contribution rates are as follows: Local employees Police and Firemen Actuarial Employer Rate 8.46% 19.03% Statutory Employer Capped Rate 8.46% 19.03% Member contribution rates as a percentage of eligible compensation for the fiscal year 2017 are 6.00% for Local employees and 7.15% for Police and Firemen. Employer Allocations. Although KPERS administers one cost-sharing multiple-employer defined benefit pension plan, separate (sub) actuarial valuations are prepared to determine the actuarial determined contribution rate by group. Following this method, the measurement of the collective net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense are determined separately for each of the following groups of the plan: • State/School • Local • Police and Firemen • Judges To facilitate the separate (sub) actuarial valuations, KPERS maintains separate accounts to identify additions, deductions, and fiduciary net position applicable to each group. The allocation percentages presented for each group in the schedule of employer and nonemployer allocations are applied to amounts presented in the schedules of pension amounts by employer and nonemployer. The allocation percentages·for the City's share of the collective pension amounts as of December 31. 2017, are based on the ratio of its contributions to the total of the employer and nonemployer contributions of the group for the fiscal years ended December 31, 2017. The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2017, the City's proportion for the Local employees group was 0.811%, which was an increase of .05% from its proportion measured at June 30, 2016. At June 30, 2017, the City's proportion for the Police and Firemen group was 2.191 %, which was an increase of .011 % from its proportion measured at June 30, 2016. 54 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Net Pension Liability. At December 31, 2017 and 2016, the City and its component units reported a liability of $33,276,991 and $32,923,025, respectively, for its total proportionate share of the net pension liability for the Local and Police and Firemen groups. Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2016, which was rolled forward to June 30, 2017, using the following actuarial assumptions: Assumptions Rate Price inflation Wage inflation Salary increases, including wage increases Long-term rate of return, net of investment expense, and 2.75% 3.50% 3.5% to 12.0% including inflation including price inflation 7.75% Mortality rates were based on the RP-2014 Mortality Tables, with age setbacks and age set forwards as well as other adjustments based on different membership groups. Future mortality improvements are anticipated using Scale MP-2016. The actuarial assumptions used in the December 31, 2016 valuation were based on the results of an actuarial experience study conducted for the period of January 1, 2013, through December 31, 2015. The experience study is dated November 18, 2016. The long-term expected rate of return of pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of June 30, 2017 are summarized in the following table: Asset Global Equity Fixed Income Yield driven Real Return Real estate Alternatives Short-term investments Long-Term Allocation 47.00% 13.00% 8.00% 11.00% 11.00% 8.00% 2.00% 100 00% Long-Term Expected Real Rate of Return 6.80% 1.25% 6.55% 1.71% 5.05% 9.85% -0.25% Discount Rate. The discount rate used to measure the total pension liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the contractually required rate. The State, School and Local employers do not necessarily contribute the full actuarial determined rate. Based on legislation passed in 1993, the employer contribution rates certified by the System's Board of Trustees for these groups may not increase by more than the statutory cap. The expected KPERS employer statutory contribution was modeled for future years, assuming all actuarial assumptions are met in future years. Employers contribute the full actuarial determined rate for Police & Firemen, and Judges. Future employer contribution rates were also modeled for Police & Firemen and Judges, assuming all actuarial assumptions are met in future years. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of 55 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) A Defined Benefit Pension Plan (Continued) return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the City's proportionate share of the net pension liability to changes in the discount rate. The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.75%, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.75%) or 1-percentage point higher (8.75%) than the current rate: 1% Decrease (6.75%) $ 16,927,244 29.148.713 Discount Rate (7.75%) 1% Increase (8.75%) Local $ 11,753,246 $ 7,391,770 Police & Firemen Total 20.546.882 13.345.922 $ 46,075,957 $ 32,300, 128 _$ ___ 2_0,.._73_7_,_,6...;.9_2 Pension Expense. For the year ended December 31, 2017, the City recognized Local pension expense of $1,138,591 and Police and Firemen pension expense of $2,722,012, which includes the changes in the collective net pension liability, projected earnings on pension plan investments, and the amortization of deferred outflows of resources and deferred inflows of resources for the current period. The Salina Housing Authority's and Salina Airport Authority's portion of the Local pension expense were $32,442 and $41,605, respectively Deferred Outflows of Resources and Deferred Inflows of Resources. At December 31, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Local Differences between actual and expected experience Contributions subsequent to the measurement date Net differences between projected and actual earnings on investments Changes in assumptions Changes in proportion Total Police & Firemen Differences between actual and expected experience Contributions subsequent to the measurement date Net differences between projected and actual earnings on investments Changes in assumptions Changes in proportion Total 56 Deferred outflows Deferred inflows of resources of resources $ 56,846 $ 406,403 595,232 368,680 632,961 85,945 576,693 310,651 $ 2,230,412 $ 802,999 Deferred outflows Deferred inflows of resources of resources $ 993,261 $ 153,700 $ 1,006,499 761,169 1,434,755 91,820 66,279 583,959 4,261,963 .._$ __ 8_29 ..... .4_7_9 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 5. OTHER INFORMATION (Continued) A Defined Benefit Pension Plan (Continued) At December 31, 2017, the Salina Housing Authority and Salina Airport Authority reported deferred outflows of resources and deferred inflows of resources related to pensions for Local and Police and Firemen groups from the following sources: Housing Authori!Y Ai!:,EOrt Authori!Y Deferred outflows Deferred inflows Deferred outflows Deferred inflows lwl Qf [~~QL![~~ Qf [~~QL!~~ Qf [~~QL![~~ Qf ~~QL![~~~ Differences between actual and expected experience $ 2,167 $ 6,740 $ 2,919 $ 20,866 Contributions subsequent to the measurement date 36,983 5,290 Net differences between projected and actual earnings on investments 44,110 18,930 Changes in assumptions 3,493 32,499 4,413 Changes in proportion 2467 5 096 45 547 71 207 Total $ 85?27 $ 151329 $ 1051185 $ 96 486 $1,601, 731 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Local Police & Firemen Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31, Amount Amount Total 2018 $ [8,406] $ 356,816 $ 348,410 2019 449,682 1,137,553 1,587,235 2020 306,743 714,701 1,021,444 2021 [6,545] 58,150 51,605 2022 90,707 158,765 249,472 Total $ 8321181 $ 214251985 $ 312581166 $36,983 and $5,290 reported as deferred outflows of resources related to pensions resulting from Salina Housing Authority and Salina Airport Authority contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Housing Airport Authority Authorit~ Deferred Deferred Year ended [Inflows] Outflows [Inflows] Outflows December 31, Amount Amount Total 2018 $ 2,399 $ [17,980] $ [15,581] 2019 16,286 7,594 23,880 2020 12,198 9,651 21,849 2021 134 [2,028] [1,894] 2022 2,398 6,172 8,570 Total $ 33,415 $ 3,409 $ 36,824 57 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) B. Deferred Compensation Plan The City offers its employees a deferred compensation plan ("Plan") created in accordance with Internal Revenue Code Section 457. The Plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Plan assets are transferred to a plan agent in a custodial trust and are not available to the claims of the City's general creditors. C. Flexible Benefit Plan (l.R.C. Section 125) The City Commission has adopted by resolution a salary reduction flexible benefit plan ("Plan") under Section 125 of the Internal Revenue Code. All City employees working more than 20 hours per week are eligible to participate in the Plan beginning after two full months of employment. Each participant may elect to reduce his or her salary to purchase benefits offered through the Plan. Benefits offered through the Plan include various insurance and disability benefits. D. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters and other events for which the City carries commercial insurance. No significant reductions in insurance coverage from that of the prior year have occurred. Settlements have not exceeded insurance coverage for each of the past three years. The City has established a limited risk management program for workers' compensation. The program covers all City employees. Premiums are paid into the Workers' Compensation Reserve Fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $250,000 ($350,000 for claims involving employees classified as policemen or firemen). Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Workers' Compensation Reserve Fund because it is expected to be liquidated with expendable available financial resources. Of the liability, $177, 141 is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 2017 2016 Unpaid claims, January 1 $ 255,154 $ 281,601 Incurred claims (including IBNRs) 622,556 947,583 Claim payments [655,797] [9741030] Unpaid claims, December 31 $ 2211913 $ 2551154 The City established a limited risk management program for employee health and dental insurance in 1997. The program covers eligible City employees. Premiums are paid into the health insurance fund by all other funds and are available to pay claims, claim reserves and administrative costs of the program. An excess coverage insurance policy covers individual claims in excess of $50,000. Incurred claims, including incurred but not reported claims, have been accrued based primarily upon subsequent payments. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of payouts and other economic and social factors. The liability for claims and judgments is reported in the Health Insurance Fund because it is expected to be liquidated with expendable available financial resources. Therefore, all of the liability is considered to be due within one year. Changes in the balances of claims liabilities during the past two years are as follows: 58 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) D. Risk Management (Continued) E. Contingent Liabilities Unpaid claims, January 1 Incurred claims Qncluding IBNRs) Claim payments Unpaid claims, December 31 2017 2016 $ 294,333 $ 275,440 4,244,648 3,951,548 [ 4, 143,290] [3 '932, 655] $ 395,691 $ 294,333 The City receives significant financial assistance from numerous federal and state governmental agencies in the form of grants and state pass-through aid. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. However, in the opinion of management, any such disallowed claims would not have a material effect on any of the financial statements of the City at December 31, 2017. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. F. Municipal Solid Waste Landfill State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste, and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and postclosure care costs as an operating expense of the solid waste fund in each period based on landfill capacity used as of each balance sheet date. The $1,981,498 reported as landfill closure and postclosure care liability at December 31 represents the cumulative amount reported to date based on the use of 28.8% of the estimated capacity of the landfill. The City's solid waste fund will recognize the remaining estimate cost of closure and postclosure care of $4,892,995 as the remaining estimated capacity is filled over the remaining life expectancy of 147 years. These amounts are based on what it would cost to perform all closure and postclosure care in 2017. Actual cost may be higher due to inflation, changes, in technology or changes in regulations. The City is required by State and Federal laws and regulations to provide assurances of financial responsibility for closure and post- closure care. The City has elected to utilize the Local Government Financial test promulgated by the U.S. Environmental Protection Agency (at 40 CFR 258.74(f)) and the Kansas Department of Health and Environment to provide these assurances. Any future closure or post-closure care costs will be provided through the normal budgeting and rate setting process, including the issuance of general obligation bonds, if necessary. 59 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) G. Capital Projects Capital projects often extend over two or more fiscal years. The following is a schedule, which compares the project authorization including allowable interest revenue to total project expenditures from project inception to December 31, 2017. Project 8uthorization t;x12enditures Markley-Magnolia W Sewer $ 5,150,000 $ 200,718 Cloud from Ohio to Levee 155,014 69,242 Ninth and Cloud Intersection Realignn 1,100,000 1,048,542 Bicentennial Center Improvements 10,200,000 12,344,709 Lakewood Middle School Safe Route 81,375 47,509 Bicentennial Center Owners Rep 96,000 84,000 Water Well 13 & 14 Maintenance 52,184 50,830 Pavement Condition Survey 36,222 33,909 Community Fieldhouse 6,937,827 8,681,599 Community Fieldhouse 713,858 733,992 Wastewater Treatment Plant Feasibil 154,395 154,395 Channel Road Erosion Repairs 58,858 Rebuild High Service Pump P-203 24,187 6,259 Pump Stations and Force Mains 1,483,000 1,280,581 2016 Water Meters 30,000 18,128 2017 Country Club Road lmprovemen 1,200,000 953,747 Dowtown STAR District 58,000 87,312 Downtown CID -Alley 1,159 Downtown TIF 1,944 2017 Mill & Inlay 1,577,502 1,413,554 2017 Major Concrete Rehab 469,472 423,675 Downtown Streetscape 12,165,000 1,109,400 Smoky Hill River Renewal 3,200,000 1,429,129 S Well Field & WTP Phase 1 1,964,525 366,655 2017 Sidewalks 69,092 53,105 Police Training Facility 4,900,000 4,204 Beechcraft Road lmprovements-Airpo 1,500,000 401 Indiana Ave Trail 79,262 74,486 Preliminary Design Broadway lmpr 50,000 50,000 2018 Pavement Sealing 325,000 275 60 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters The Kansas Department of Health and Environment (KDHE) issued a report in 1994 indicating the presence of volatile organic compounds at levels requiring remediation at the Salina Public Water Supply Wells Site. The City adopted a proactive Policy and Action Plan to remediate the groundwater contamination, and on December 7, 1994, the City and KDHE entered into a Consent Order and Settlement Agreement under which the City assumed primary responsibility for the further investigation and remediation of the groundwater contamination. Field testing work has been completed. The necessary remediation work will be conducted over the next several years at a yet undetermined cost to the City's Water and Sewer Fund. The U.S. Department of Defense transferred property located at the former Schilling Air Force Base (the Base or Site) to the Authority on or about September 9, 1966. The property is now known to contain areas of extensive soil and groundwater contamination, which is a result of the use and disposal of chlorinated solvents during military operations at the Base from 1942 until Base closure in 1965. The U.S. Department of Defense is responsible for the investigation and remediation of contamination caused by military activities at current and former military bases. The U.S. Army Corps of Engineers (Corps) is the lead agency for the Department at formerly used defense sites. The Corps has investigated the soil and groundwater contamination at the Site under the regulatory oversight of the U.S. Environmental Protection Agency (EPA) and the Kansas Department of Health and Environment (KDHE). The Site is not designated as a National Priority List Superfund site, but investigation and remediation are required to be in compliance with the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Potential liability for contamination under CERCLA extends broadly to parties associated with the release or presence of hazardous substances, including not only those entities involved with contaminant use and disposal, but in some cases other current and former owners and operators of contaminated sites. As a current owner of extensive amounts of property at the Site, the Authority is potentially liable under CERCLA, although the Authority believes that it has meritorious defenses to such liability. The Authority is considered to be a Potentially Responsible Party (PRP) for the Site, primarily due to its status as a property owner. The Authority, City of Salina, Unified School District No. 305 and the Kansas Board of Regents (Kansas State University Polytechnic Campus), (collectively Salina Public Entities) currently own over 90% of the nearly 4,000 acres of the Base property. No third party has asserted any claim for bodily injury or property damage. Beginning in August 2007, the Salina Public Entities initiated settlement negotiations with the U.S. Federal Government. The negotiation objectives at that time included transferring the responsibility for completing the cleanup from the U.S. to the Salina Public Entities. The local objective was to reach a settlement agreement with the U.S. that provides the Salina Public Entities sufficient funds to complete cleanup operations over a 30-year period. During calendar year 2008, the Salina Public Entities, by and through its environmental consultant, prepared a detailed Cost to Complete Estimate (CTC). The CTC preparation included consultation with the EPA and KDHE. The Salina Public Entities' CTC was completed in June of 2008 and submitted to the Corps. Subsequently, on January 23, 2009, the Salina Public Entities delivered a demand letter to the Corps. The letter demanded that settlement negotiations begin immediately with the U.S. Department of Justice. On May 14, 2009 the Authority was notified that the Corps referred the Base demand letter to the U.S. Department of Justice on May 12, 2009. The Salina Public Entities delivered on or about May 10, 2010, a settlement offer and a draft of a lawsuit complaint to the attorney for the U.S. Department of Justice. The Salina Public Entities planned to file suit against the U.S. if the matter was not settled by the end of May, 2010. The Salina Public Entities did not intend to cut off settlement negotiations by the filing of suit, and this has been communicated to the U.S. No remedial action plan or record of decision has been adopted by the EPA or KDHE. 61 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) On or about May 27, 2010, the Salina Public Entities filed their Complaint against the United States of America, the United States Department of Defense and Secretary of Defense, Robert M. Gates, in his official capacity (collectively, "Defendants"). On or about September 22, 2010, the Salina Public Entities filed their First Amended Complaint in four counts: Count I Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(2), Count II Citizen Suit Claim Pursuant to 42 U.S.C.§ 9659(a)(1), Count Ill Claim for Recovery of Response Costs Pursuant to 42 U.S.C.§ 9607(a) and Count IV Claim for Declaratory Judgment Pursuant to 42 U.S.C.§ 9613(g)(2). On or about October 6, 2010, Defendants filed their motion to dismiss and to strike, primarily with respect to the citizen suit claims. On or about March 25, 2011, Judge Murguia entered his Memorandum and Order. The Judge granted the Defendants' motion to dismiss Counts I and II (citizen suit claims) for lack of subject matter jurisdiction. He also granted the Defendants' motion to dismiss the Salina Public Entities' requests for attorney fees, with the exception of non-litigation attorney fees. He denied the Defendants' motion to strike the Salina Public Entities' allegations of a conflict of interest. The Salina Public Entities' claims under Counts Ill and IV for response costs under CERCLA 9607(a) are not affected by the Judge's rulings. The Salina Public Entities disagree with most of the Judge's filings and, if necessary, plan to take an interlocutory appeal to the Tenth Circuit to contest the rulings. On or about April 22, 2011, Defendants filed their Answer to First Amended Complaint and Counterclaim against the Salina Public Entities. Count I of the Counterclaim alleges a claim for contribution under CERCLA, 42 U.S.C.§ 9613(f)(1). Count II of the Counterclaim alleges a claim for cost recovery under CERCLA, 42 U.S.C.§ 9607(a)(1). Count II alleges costs incurred by the U.S. Environmental Protection Agency of approximately $1,838,241 as of September 30, 2007, and alleges costs incurred by the Corps of approximately $14,915,228 as of April 17, 2009. The Salina Public Entities intend to vigorously contest the claims brought against them and will assert, among other defenses, the third party defense under 42 U.S.C.§ 9607(b)(3). The parties agreed on a mediation to discuss settlement. The mediation sessions occurred in October 2011, and the mediation discussions continued for over a year. The parties have now agreed upon a partial settlement. The partial settlement includes payment by the U.S. in exchange for performance by the Salina Public Entities of a remedial investigation/feasibility study through entry of a Corrective Action Decision by KDHE (the ''Work"). The present cost estimate of the Work is less than $10,000,000. The agreement is that the U.S. will pay 90% of the cost of the Work with the Salina Public Entities responsible for payment of the remaining 10%. It is anticipated that the agreed share of the Salina Public Entities will be paid by the City of Salina. Also, the claims and counterclaims in the lawsuit have been dismissed without prejudice with provisions tolling any and all statutes of limitation. No party is obligated under the settlement agreement to implement the Corrective Action Decision upon its entry by KDHE, and the parties will either negotiate an agreement to implement such Corrective Action Decision or refile their claims in court. The Salina Public Entities have entered into a Consent Agreement and Final Order ("CAFO") with KDHE, which is conditioned upon the U.S.'s payment to the City. On May 2, 2013, the U.S. District Court for the District of Kansas entered its Consent Decree. City of Salina, Kansas, et al. v. United States of America. et al., Case No. 1 0- CV -2298 CM/DJW. The Court's Consent Decree approved the settlement among the parties. The current status is that the U.S. wire transferred $8,426,700 to the account of the City, and the City added the share of the Salina Public Entities in the amount of $936,300 to the account. The Remedial Investigation (RI) portion of the CAFO scope of work was completed during 01 2018. The Feasibility Study portion of the CAFO scope of work was also completed during 01 2018. The Feasibility Study (FS) and Proposed Plan (PP) portions of the CAFO scope of work are scheduled to be completed during 02 2018 and submitted to KDHE. The Corrective Action Decision (CAD) document is scheduled to be issued by KDHE during 04 2018. Although the claims and counterclaims in the lawsuit have been dismissed without prejudice, the Authority intends to vigorously pursue its claims that the U.S. should implement the Corrective Action Decision upon 62 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 Note 5. OTHER INFORMATION (Continued) H. Environmental Matters (Continued) its entry by KDHE and its defenses against any claims brought against it. Based on presently known information, the Authority has determined that while a possible liability exists, at this time, no reasonable estimate of the possible liability can be made. Therefore, no liability related to that matter has been recorded. I. Postemployment Health Care Plan Plan Description. The City operates a single employer defined benefit healthcare plan administered by the City. The Employee Benefit Plan (the Plan) provides medical and dental benefits to eligible early retirees and their spouses. KSA 12-5040 requires all local governmental entities in the state that provide a group health care plan to make participation available to all retirees and dependents until the retiree reaches the age of 65 years. No separate financial report is issued for the Plan. Funding Policy. The contribution requirements of plan participants and the City are established and amended by the City. The required contribution is based on projected pay-as-you-go financing requirements. Plan participants contributed approximately $265,000 to the Plan (approximately 100% of total premiums) through their required contribution of $525 per month for retiree-only coverage and $1,408 for family coverage. Annual OPEB Cost and Net OPEB Obligation. The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC}, an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City's annual OPES cost for the Plan for the year, the amount actually contributed to the plan, and the changes in the City's net OPEB obligation to the Plan: Annual required contribution Interest on Net OPEB Obligation Adjustment to Annual Required Contribution Annual OPEB cost (expense) Benefit payments Change in net OPES obligation Net OPEB obligation -beginning of year Net OPES obligation -end of year $ 430,085 150, 156 (166,838) 413,403 [265,000] 148,403 5,005,151 $ 5,153,554 The City's annual OPES cost. the percentage of annual OPES cost contributed to the Plan, and the net OPEB obligation for the year ended December 31, 2017 was as follows: 63 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 Note 5. OTHER INFORMATION (Continued) I. Postemployment Health Care Plan (Continued) Annual Fiscal Annual OPEB Net Year OPEB Cost OPEB Ended Cost Contributed Obligation December 31, 2013 $ 570,434 $ 148,000 $ 3,986,743 December 31, 2014 534,877 185,000 4,336,620 December 31, 2015 556,385 209,000 4,684,005 December 31, 2016 578,146 257,000 5,005,151 December 31, 2017 413,403 265,000 5, 153,554 Funding Status and Funding Progress. As of the year ended December 31, 2017, the most recent actuarial valuation date, the Plan was not funded. The actuarial accrued liability for benefits was $4,471,205 and the actuarial value of asset was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $4,471,205. The covered payroll (annual payroll of active employees covered by the plan) was $23, 770,671, and the ratio of the UAAL to the covered payroll was 18.81%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statement, presents multiyear trend information about whether the actuarial value of plan assets (if any) are increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan participants) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan participants to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the year ended December 31, 2017, actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 3.00% investment rate of return, which is the rate of the employer's own investments as there are no plan assets and an initial annual medical and dental healthcare cost trend of 6.80%, reduced by decrements to an ultimate rate 4.10% after eighty years. The UAAL is being amortized as a level dollar over an open thirty-year period. J. Deficit Fund Balance The Police Grants Fund maintained a deficit fund balance of $[27,854] at December 31, 2017. 64 K. TAXABATEMENTS CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 In 2017, the City of Salina participated in real property tax abatements for six local companies. Property tax abatements are authorized under Kansas state statutes K.S.A. 12-1740 et seq. and K.S.A. 79-201a and subject to City policy. The City provides property tax abatements to encourage existing industry to expand, assist new business start-ups, recruit new companies from out-of-state or internationally, encourage high technology and research based businesses, encourage training and development of Salina area employees, and encourage location and retention of businesses which are good "corporate citizens" that will add to the quality of life in the community through leadership and support of civic and philanthropic organizations. Property tax abatements reduce ad valorem property taxes. The percentage of reduction ranges from 40.5% to 100%, but in all cases, the maximum duration is for ten years as per state statute. To receive an abatement, applicants must submit an application, which undergoes due diligence and analysis before being considered by the City Commission. If the abatement is authorized, the applicant must sign a performance agreement that specifies annual compliance measures. Each year, the applicant submits a renewal application, along with compliance information, which is reviewed by City staff for conformance with agreement provisions. If compliance is not met, appeals can be made to the City Commission to determine the amount of incentives, if any, to be received by the property owner. The City of Salina negotiates property tax abatements on an individual basis. Ad Valorem Property Tax Abatements 2017 Tax Company Start End % Abated Salina Vortex Corp (facility impro-...ements) 2015 2024 75% $ 20,981 ---------------·------------------------------- ~er~-~1!1~J!ac~~~y-~~~~ti~_ri~mp_~~~-1!1e~~) 2010 2019 50% 6,486 ~--------------------------------------------------- Great Plains Mfg (facility impro..ements) 2014 2023 100% --------------------------------------· ----· .. -·---------------------------------Veris Technologies (facility addition/impro-...ements) 2015 2024 40.5% 1,925 ----------------------------------------~---~ -------. --~--------~-------- Twin Oaks (facility addition/imprm.ements) 2015 2024 55% 2,602 ------------------------------------------------------~-----------------------------~-"---- Salina Field House (facility) 2017 2026 100% 27,401 Total ! I I ; $ 59,395 I I Tax Increment Financing (TIF). TIFs are an economic development tool established by the Kansas TIF Act (K.S.A. 12-1770 et seq.} and subject to City policy to aid in financing projects for substantial public benefit. Public benefits can include creating jobs or retaining existing employment, eliminating blight, strengthening the employment and economic base of the City, increasing property values and tax revenues, reducing poverty, creating economic stability, upgrading older neighborhoods, facilitating economic self-sufficiency, promoting projects that are of community wide importance, or implementing the economic development goals of the City. The program works by reimbursing a portion of the incremental increase in property taxes resulting from improvements and a portion of local sales tax generated within the district to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. To receive a TIF, applicants must submit a detailed, written proposal to the City, which will undergo due diligence and analysis before being considered by the City Commission. The City Commission then determines if it will commence the statutory process to create a redevelopment district. If the TIF district is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate TIF revenues (sales tax and/or property tax}, City staff works with the distributing agency and property owner to generate and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and sales and/or property tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates TIFs on an individual basis. 65 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2017 K. TAX ABATEMENTS (Continued) TIF Project Plans District Purpose Base Year Expires Construction of 10. 79 acres of shopping center, including single and multi-tenant retail space, and related public and prilate Lambertz infrastructure 2007 2027 Total 2017 Reimbursements Sales Tax Property Tax $ 212,624 $ 258,932 $ 212,624 $ 258,932 Community Improvement Districts (CID). CIDs are an economic development tool established by the Kansas CID Act (K.S.A. 12-6a26 et seq.) and subject to City policy to assist with the development of community improvements which can benefit a development and the public. In all CIDs, public improvements were financed initially by the developer and are reimbursed annually via a two percent (2%) transportation district sales tax on retail or taxable services occurring within the district. To establish a CID, the applicant first submits a CID petition which is signed by the owners of all of the land within the proposed district. The City Commission then considers the request to establish a CID. If the CID is authorized, the City and applicant will enter into an agreement that specifies performance, certification, and reimbursement requirements. City Staff will work with the property owner to certify eligible expenses and compliance with agreement provisions. Once the project begins to generate CID revenues, City Staff works with the distributing agency and property owner to make and track reimbursements. Because reimbursements are not paid until after improvements are put in place, agreement compliance is met, eligible expenses are certified, and CID sales tax distributions are made to the City, there are no provisions for recapturing taxes. The City of Salina negotiates CIDs on an individual basis. Community Improvement District (CID) 2017 8igible Reimbursement Name Rate Start Expires Purpose Amount* Assist with impro-.ements to hotel South 9th Street 2.00% 3/1/2016 12/31/2037 and conference center $ 154,154 Total $ 154,154 *Reimbursement was not actually paid to de\eloper until Jan. 2018 Neighborhood Revitalization Areas (NRA). NRAs are authorized under Kansas state statutes K.S.A. 12-117 and subject to City policy to spur investment and revitalization of properties which can benefit a neighborhood and the public. The program works by rebating a portion of the incremental increase in property taxes resulting from improvements back to the property owner. The base value, or what the property was valued at prior to improvements, is shielded from the rebate. Participation in the program and percentage of rebate and duration are determined separately by the City, County, and School District. The current City of Salina adopted plan is a 4 year plan running from 2014 -2018. It allows for a 10 year rebate and provides rebates from 25% to 100% depending on year in plan and type of improvement. To receive an NRA, taxpayers must submit an application, which undergoes due diligence and analysis before being approved by the City. If the NRA is approved, each year, the applicant must submit proof that property taxes have been paid in full. Because the rebate is not given until after improvements are put in place and property taxes paid, there are no provisions for recapturing taxes. The City of Salina approves NRAs on an individual basis. 66 CITY OF SALINA, KANSAS NOTES TO THE BASIC FINANCIAL STATEMENTS December 31, 2017 K. TAX ABATEMENTS (Continued) Neighborhood Revltallzatlon Act (NRA) Property/Business Name Address Weis Fire & Safety lmpro1ement #2 Erick Mendenhal1 1325 N. 3rd Annie/Arlene Lewis 1005 N. 10th Street Michelle Malone 809 N. 2nd Street Boyd E. Smith Trust 148 S. Santa Fe Boyd E. Smith Trust 148 S. Santa Fe Welsh ln1eStments LLC 300 S. 9th Street Leon Marrs Trust 740 N. 2nd Street Johnny M. & Sung Hee Kim 233A S. Fourth Street Pioneer Presidents Place LP 210 W.Mulberry Street Chnstpher Helm 613 N 5th Street Paul Foster 523 N. 11th James M. Monroe 620 W. Hamilton Street Chanel Thomas 241 N. Front Street Christina Lltwiller 148 N. 12th Street Jeremy Cessna 219 N. Front Street Troy & Dawn Cramer 1101N.10th William & Mary Warhurst 714 Park Street Holly Fain 204 Forest A1enue Arlene Cox 200 Forest A1enue Gloria Williams 903 N. 10th Street Michelle Rogan 240 S. Clark Street Samuel A. Rock 1329 N. 4th Street Jessica A. 2legler 221 N. 2nd Street Del.In or Jessica Know 207 N. Penn Ra1ey ln1estments LLC 157 N. Se1enth, 203 W. Ash, 205 W. Ash, 207 W. Ash & 209 W. Ash Lamont Outland 1206 N. 7th Street Michelle Bunch 634 N. 8th Street Jermaine and Tykea Polk 226 N. 2nd Street Mary Marshall 937 N. 3rd Street Angela Fishburn 1219 N. 8th Street Kress Building LLC 134 S. Santa Fe A1e Heritage at Hawthorne Partners, LLC 715 N. 9th Street Will & Mary Warhurst 809W. Ash Donnie & Ramona Marrs 2035 E. Iron #300R TJTM, Inc. 2035 E. Iron #213C Troy Valcll 853 Na..aho Michelle Malone 815 N. 2nd Street Timothy & Linda Rickman 719 E. Ash Y-.ette Gelinas 1115 N. 8th Street Charles H Carroll Jr Trust 156-158 S. Santa Fe Pestinger Enterprises LLC 2035 East Iron, Unit 306R Latisha Pierce 705 N. 2nd Street Tanya Shiehzadeh 703 N. 2nd Street Robert & Brenda Bums 1205 N. 4th Street Property Partners LLC 116 & 118 N. Santa Fe (2nd Floor Loft Apartments) Phill Hemmer 2035 E. Iron A1enue, Unit #203R Curtis and Rebecca Schlosser 2035 E. Iron A1enue, Unit #206R Daryl Bixby Construction Co. 156-158 N. 11th Street Traniesh Byrd 701 N. 2nd Street TJTMlnc 2035 E. Iron #105R TJTM Inc 2035 E. Iron #302R TJTM Inc 2035 E. Iron #202R TJTM Inc 2035 E. Iron #205R Mark Martin Lhing Trust 2035 E. Iron #104R Total 67 2017 Type Rebate Paid Com $ 353 Res 49 Res 6 Res 21 Res 104 Com 121 Com 1,130 Res 37 Res 153 Com 2,472 Com 427 Res 31 Res 136 Res 115 Res 77 Res 82 Res 14 Res 52 Res 94 Res 95 Res 89 Res 109 Res 21 Res 90 Res 277 Com 1, 116 Res 200 Res 212 Res 107 Res 184 Res 184 Com 509 Com 1,523 Res 228 Res 815 Res 92 Res 111 Res 23 Res 134 Res 201 Com 2,576 Res 449 Res 244 Res 220 Res 174 Com 2.466 Res 1,843 Res 960 Com 516 Res 199 Com 702 Com 636 Com 756 Com 310 Com 717 $ 24,560 REQUIRED SUPPLEMENTARY INFORMATION CITY OF SALINA, KANSAS OTHER POST-EMPLOYMENT BENEFITS REQUIRED SUPPLEMENTARY INFORMATION December 31, 2017 Schedule of Employer Contributions: Annual Fiscal Annual OPEB Net Year OPEB Cost OPEB Ended Cost Contributed Obligation December 31, 2013 $ 570,434 $ 148,000 $ 3,986,743 December 31, 2014 534,877 185,000 4,336,620 December 31, 2015 556,385 209,000 4,684,005 December 31, 2016 578,146 257,000 5,005, 151 December 31, 2017 413,403 265,000 5, 153,554 Schedule of Funding Progress: Actuarial Actuarial Actuarial Unfunded Funded Covered Valuation Value of Accrued AAL Ratio Payroll Date Assets (a) Liabilit~ (b) (b) -(a) (alb) 1£1 12/31/2013 $ -$ 5,579,912 $ 5,579,912 0.0% $ 22,283,185 12/31/2014 5,538,770 5,538,770 0.0% 22, 156, 127 12/31/2015 5,538,770 5,538,770 0.0% 22,958,300 12/31/2016 5,538,770 5,538,770 0.0% 23,245,887 12/31/2017 4,471,205 4,471,205 0.0% 23,770,671 68 UAAL as Percent of Payroll {b-a)/(c) 25.04% 25.00% 24.13% 23.83% 18.81% CITY OF SALINA, KANSAS KPERS PENSION PLAN REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) December 31, 2017 Schedule of the City's Proportionate Share of the Net Pension Liability Last Ten Fiscal Years* local ~ City's proportion of the net pension liability 0.764% City's proportionate share of the net pension liability $ 10,027,679 City's covered-employee payroll $12,931,197 City's proportionate share of the net pension liability as a percentage of its covered-employee payroll 77.55% Plan fiduciary net position as a percentage of the total pension liability 71.98% • -The amounts presented for each fiscal year were determined as of 12131. Data became available with the inception of GASB 68 duling fiscal year 2015, therefore 10 years of data Is unavailable. Police and Firemen ~ 2.258% $ 16,395,794 $10,161,866 161.35% 74.60% Police and local Firemen .12fill1§ ~ 0.761% 2.180% $ 11,770,699 $ 20,251,512 $13,371,550 $10,799,898 88.03% 187.52% 68.55% 69.30% Schedule of the City's Contributions Last Ten Fiscal Years* Police and Local Firemen Local Police and Firemen .12Q.lill local .12llli1l 0.811% $ 11, 753,246 $ 13,606,499 86.38% 72.15% Local 1m1l1Z $ $ Contractually required contnbution 1.2rulli ~ 1m.1ill $ 1,256,217 $ 2,527,995 $ 1,243,711 $ 2,361,273 $ 1,179,745 $ Contributions in relation to the contractually required contribution 1.243?11 2,361.273 1 179 745 Police and Firemen .12mL11. 2.191% 20,546,882 10,606,934 193.71% 70.99% Police and Firemen 1m1l1Z 1,986,933 Contribution deficiency [excess] ~s~~~--~s~~~--~s~~~--~s~~~--~s~~~--_s ________ __ City's covered-employee payroll Contributions as a percentage of covered employee payroll • -Data became available with the inception of GASB 68 during fiscal year 2015, therefore 1 o years of data is unavailable. $13,251,236 $10,730,033 $13,548,056 $10,593,419 $13,944,989 $ 10,441,055 9.48% 9.18% 22.29% 8.46% 19.03% 69 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Bicentennial center fund -To account for the activities of the City's convention center. Business improvement district fund -State law allows businesses within an area to voluntarily establish an improvement City. This fund is used to account for the assessments made on the District. All revenues are to be used within the Business Improvement District. Neighborhood park fund -To account for fees collected from new residential building projects in Salina. Expenditures are for acquisition or development of neighborhood parks in the growing areas of the community. Special parks and recreation fund -To account for liquor tax revenues, which must be used for park maintenance and improvements. Special alcohol fund -To account for liquor tax revenues, which must be used for programs, which address prevention, education or intervention for drug and alcohol abuse. Community development revolving fund -To account for funds, which may be loaned for housing and economic development, purposes, to later be repaid and reused on a revolving basis. Sales tax economic development fund -To account for 12.5% of the 1/4 cent sales tax designated for economic Development purposes. Downtown TIF District #1 fund -To account for revenues and expenditures related to the Tax Increment Financing District that was formed as part of the Downtown Revitalization Project. South 9th CID fund -To account for incremental sales tax revenues received and disbursed back to the developer as part of the Community Improvement District formed in 2015. State Grants fund -To account for grant revenue and expenditures received from the State of Kansas. 911 communications fund -To account for transitioning the receipt and administration of 911 fees to the City from the Kansas Department of Revenue and Saline County, as the City is now the public answering point. Monies will be used to pay for 911 related services. Kenwood cove capital fund -To account for the Special Sales Tax proceeds to be used to provide for long-term capital maintenance activity at the facility. Special law enforcement fund -To account for revenues received from the sale of forfeited assets acquired during drug enforcement activities. Expenses are limited to capital items to be used for further drug enforcement activities. Police grants fund -To account for revenues from grants, which are to be used for special police activities, including the D.A.R.E. program Federal grants fund -To account for grants received from the federal government to be used to monitor and mediate fair housing complaints. D.A.R.E. donations fund -To account for donations to the D.A.R.E. program. War memorial maintenance fund -To account for monies to be used for maintenance of the local war memorial. Arts & humanities fund -To account for revenues and expenses associated with arts and humanities activities. Federal CARE grant fund -To account for revenue and expenses associated with the CARE Grant. Police Department federal forfeiture funds -To account for revenue and expenses associated with federal Equitable Sharing Program funds. 70 CITY OF SALINA, KANSAS COMBINING STATEMENTS -NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS -CONTINUED Homeowners' assistance fund -To receive donations and/or other funds to assist low and moderate income persons in improving their homes. Private grants fund -To account for revenues and expenditures related to grants received from private entities with specific purposes. Animal shelter donations fund -To accumulate donations and account for expenses to benefit the animal shelter. NONMAJOR PERMANENT FUNDS Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government's programs. Cemetery endowment fund -To account for amounts expended for perpetual care of the City cemetery. Interest earnings are used for cemetery maintenance. Mausoleum endowment fund -To account for amounts charged for perpetual care of the City mausoleum. Interest earnings are used for mausoleum maintenance. Tricentennial commission fund -To account for donations to be used to celebrate the nation's tricentennial in the year2076. 71 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2017 Total Total Non major Non major Non major Debt Special Revenue Permanent Service Funds Funds Fund ASSETS Cash and investments $ 3,001,083 $ 501,693 $ 1,037,888 Receivables Accounts 2,864 Total assets $ 3,003,947 $ 501,693 $ 1,037,888 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 162,754 $ -$ - Due to other funds 27,854 Total liabilities 190,608 Fund balances: Restricted 357, 163 1,037,888 Committed 2,484,030 501,693 Assigned Unassigned [27,854) Total fund balances 2,813,339 501,693 1,037,888 Total liabilities and fund balances $ 3,003,947 $ 501,693 $ 1,037,888 See independent auditor's report on the financial statements. 72 Total Nonmajor Governmental Funds $ 4,540,664 2,864 $ 4,543,528 $ 162,754 27,854 190,608 1,395,051 2,985,723 [27,854) 4,352,920 $ 4,543,528 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2017 Total Total Nonmajor Nonmajor Non major Debt Special Revenue Permanent Service Funds Funds Fund REVENUES Taxes $ 580,766 $ -$ - Intergovernmental 851,416 621,860 Charges for services 469,766 10,619 Licenses and permits 5,300 Investment revenue 22,421 1,828 3,929 Donations 110,606 Miscellaneous 77,763 Total revenues 2,118,038 12,447 625,789 EXPENDITURES Current Culture and recreation 1,718,877 Public safety 223,912 Public health and sanitation 347,442 Planning and development 86,832 Miscellaneous 35 Debt service Principal retirement 180,000 Interest and other charges 90,935 Capital outlay 751,068 Total expenditures 3,128,131 35 270,935 Excess (deficiency] of revenues over [under] expenditures [1.010.093] 12,412 354,854 Other financing sources [uses] Transfers in 1,310,983 Transfers [out] Total other financing sources [uses] 1,310,983 Net change in fund balance 300,890 12,412 354,854 Fund balance -Beginning of year 2,512,449 489,281 683,034 Fund balance -End of year $ 2,813,339 $ 501,693 $1,037,888 See independent auditor's report on the financial statements. 73 Total Nonmajor Governmental Funds $ 580,766 1,473,276 480,385 5,300 28,178 110,606 77,763 2,756,274 1,718,877 223,912 347,442 86,832 35 180,000 90,935 751,068 3,399,101 [642,827) 1,310,983 1,310,983 668,156 3,684,764 $ 4,352,920 ASSETS Cash and investments Receivables Accounts Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Due to other funds Total liabilities Fund balance: Restricted Committed Assigned Unassigned Total fund balance [deficit] Total liabilities and fund balances CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS 43100 Business Bicentennial Improvement Neighborhood Center District Park $ 143,841 $ 13,304 $ 21,599 2,864 $ 143,841 $ 16,168 $ 21,599 $ 85,861 $ -$ - 85,861 16, 168 57,980 21,599 57,980 16,168 21,599 $ 1431841 $ 16, 168 $ 21,599 Special Parks & Special Recreation Alcohol $ 124,221 $ 164 $ 124,221 $ 164 $ -$ 124,221 164 124,221 164 $ 124,221 $ 164 Community Sales Tax Downtown Development Economic TIF South State 911 Revolving DeveloQment District #1 9th CID Grants Communications $ 185,112 $ 1,052, 103 $ 101,631 $ 290,851 $ 6,436 $ 374,898 $ 185,112 $ 1,052,103 $ 101,631 $ 290,851 $ 6,436 $ 374,898 $ -$ 50,000 $ -$ -$ -$ 9,670 50,000 9 670 185,112 1,002,103 101,631 290,851 6,436 365,228 185,112 1,002,103 101,631 290,851 6,436 365,228 $ 185,112 $ 1,052,103 $ 101,631 $ 290,851 $ 6.436 .... $ __ 3_7_4....,,8 .... s ... 8 See independent auditor's report on the financial statements. 74 ASSETS Cash and investments Receivables Accounts Total assets CITY OF SALINA, KANSAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS (Continued) 43100 Kenwood Special Cove Law Police Capital Enforcement Grants $ 101,852 $ 81 $ $ 101,852 $ 81 $ - - LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 7,689 $ -$ - Due to other funds 27,854 Total liabilities 7,689 27,854 Fund balance: Restricted Committed 94,163 81 Assigned Unassigned [27,854) Total fund balance [deficit] 94,163 81 [27,854) Total liabilities and fund balances $ 101,852 $ 81 $ - Federal DARE Grants Donations $ 3,304 $ 18,824 $ 3,304 $ 18,824 $ -$ 235 235 3,304 18,589 3,304 18,589 $ 3 304 $ 18,824 Police War Federal Department Animal Memorial Arts & CARE Federal Homeowners' Private Shelter Maintenance Humanities Grant Forfeiture Funds Assistance Grants Donations Totals $ 32,291 $ 109,993 $ 25,973 $ 98 $ 11,440 $ 5,525 $ 377,542 $ 3,001,083 2,864 $ 32,291 $ 109,993 $ 25,973 $ 98 $ 11,440 $ 5,525 $ 377,542 $ 3,003,947 $ 225 $ 4,680 $ -$ -$ -$ -$ 4,394 $ 162,754 225 4,680 32,066 105,313 32,066 105,313 $ 32,291 $ 109,993 25,973 5,525 98 11,440 25,973 98 11,440 5,525 $ 25,973 $ 98 $ 11,440 $ 5,525 See independent auditor's report on the financial statements. 75 27,854 4 394 190,608 357,163 373, 148 2,484,030 [27,854) 373,148 2,813,339 $ 377,542 $ 3,003,947 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2017 Business Bicentennial Improvement Neighborhood Center District Park Revenues Taxes $ -$ -$ - Intergovernmental Charges for services 79,117 Licenses and permits 5,300 Investment revenue 12,513 47 94 Donations Miscellaneous Total Revenues 12,513 79,164 5,394 Expenditures Current Culture and recreation 738,507 Public safety Public health and sanitation Planning and development 72,197 Capital outlay 32,139 Total Expenditures 738,507 72,197 32,139 Excess [deficiency] of revenues over [under] expenditures [725,994] 6,967 [26,745] Other financing sources [uses] Transfers in 742,633 Transfers [out] Total other financing sources [uses] 742,633 Net change in fund balance 16,639 6,967 [26,745] Fund balance, beginning of year 41,341 9,201 48,344 Fund balance, end of year $ 57,980 $ 16,168 $ 21,599 Special Parks & Special Recreation Alcohol $ -$ 202,255 202,255 642 30 202,897 202,285 202,255 211,320 211,320 202,255 [8,423] 30 [8,423] 30 132,644 134 $124,221 $ 164 Community Development Revolving $ - 681 681 681 681 184,431 Sales Tax Economic Development $ 335,247 4,060 339,307 441,606 441,606 Downtown TIF District #1 $ 88,219 336 881555 (102,299] __ ..::...88::...!..,5;;..;;5~5 [102,299) 1, 104,402 88,555 13,076 $ South 9th CID 157,300 713 10,371 168,384 168,384 168,384 122,467 $ State Grants - 10,974 22 10,996 10,996 10,996 [4,560] 911 Communications $ 331,339 1,122 332,461 223,912 223,912 108,549 108,549 256,679 $ 185,112 $ 1,002,103 $ 101,631 $ 290,851 $ 6,436 $ 365,228 ----- See independent auditor's report on the financial statements. 76 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended December 31, 2017 Kenwood Special Cove Law Police Capital Enforcement Grants Revenues Taxes $ -$ -$ - Intergovernmental 21,033 Charges for services Licenses and permits Investment revenue 180 1 Donations Miscellaneous Total Revenues 180 1 21,033 Expenditures Current Culture and recreation Public safety Public health and sanitation Planning and development Capital outlay 46,276 2,800 16,927 Total Expenditures 46,276 2,800 16,927 Excess [deficiency] of revenues over [under] expenditures [46,096) [2,799) 4,106 Other financing sources [uses] Transfers in 68,350 Transfers [out] Total other financing sources [uses] 68,350 Net change in fund balance 22,254 [2,799] 4,106 Fund balance, beginning of year 71,909 2,880 [31,960) Fund balance, end of year $94,163 $ 81 $ [27,854) Federal DARE Grants Donations $ -$ 50 54 18,707 50 18,761 14,635 14,635 50 4,126 50 4,126 3,254 14,463 $ 3,304 $ 18,589 War Memorial Maintenance $ - 118 118 345 345 [227] [227) 32,293 $ 32,066 Police Federal Department Arts & CARE Federal Homeowners' Private Humanities Grant Forfeiture Funds Assistance Grants $ -$ -$ -$ -$ - 8,560 390,649 93 96 38 3 40,464 2,699 5,522 431,206 8,656 2,737 5,525 980,025 980,025 [548,819] 8,656 2,737 5,525 500,000 500.000 [48,819) 8,656 2,737 5,525 154,132 17,317 98 8,703 $ 105,313 $ 25,973 $ 98 $ 11,440 $ 5,525 See independent auditor's report on the financial statements. 77 Animal Shelter Donations Totals $ -$ 580,766 75,000 851,416 469,766 5,300 1,528 22,421 110,606 110,606 77,763 187,134 2,118,038 1,718,877 223,912 145,187 347,442 86,832 751,068 145,187 3,128,131 41,947 [1,010,093] 1,310,983 1.310.983 41,947 300,890 331,201 2,512,449 $373,148 $2,813,339 ASSETS Cash and investments Total assets LIABILITIES AND FUND BALA.NCES Liabilities Accounts payable Total liabilities Fund balances Committed Total liabilities and fund balances CITY OF SALINA, KANSAS COMBINING BALA.NCE SHEET NONMAJOR PERMANENT FUNDS December 31, 2017 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Total $ 493,866 $ 2,029 ..;:..$ _ __;5::.!,.;,7;...;;:9...;:;.8 $ 501,693 $ 493,866 $ 2.029 ... $ __ 5_.7_9_8 $ 501,693 493,866 2,029 5,798 501,693 $ 493,866 $ 2.029 .... $ __ 5 __ .7_9_8 $ 501,693 See independent auditor's report on the financial statements. 78 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR PERMANENT FUNDS For the Year Ended December 31, 2017 Cemetery Mausoleum Tricentennial Endowment Endowment Commission Revenues Charges for services $ 10,619 $ -$ Investment revenue 1,798 8 Total revenues 12,417 8 Expenditures Miscellaneous 35 Total expenditures 35 Net change in fund balance 12,382 8 Fund balances -beginning of year 481,484 2,021 Fund balances -end of year $ 493,866 $ 2,029 $ See independent auditor's report on the financial statements. 79 - 22 22 22 5,776 5,798 Total $ 10,619 1,828 12,447 35 35 12,412 489,281 $ 501,693 CITY OF SAUNA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) BICENTENNIAL CENTER FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Investment revenue $ 12,513 $ -$ Total revenues 12,513 Expenditures Culture and recreation 738,507 750,000 Total expenditures 738,507 750,000 Excess [deficiency] of revenues over [under] expenditures [725,994] [750,000] Other financing sources [uses] Transfers in 742,633 720,000 Total other financing sources [uses] 742,633 720,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 16,639 [30,000] Unreserved fund balance, January 1 41,341 214,254 Unreserved fund balance/GAAP fund balance December 31 $ 57,980 $ 184,254 $ See independent auditor's report on the financial statements. 80 Final - 750,000 750,000 [750,000] 720,000 720,000 [30,000] 214,254 184,254 Variance with Final Budget Positive [Negative] $ 12,513 12,513 11,493 11,493 24,006 22,633 22,633 46,639 [172,913] $ [126,274) Revenues CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) BUSINESS IMPROVEMENT DISTRICT FUND For the Year Ended December 31, 2017 Budgeted Amounts Original Final Variance with Final Budget Positive [Negative] Charges for services Investment revenue $ 77,493 $ 47 89,175 $ 15 89,175 $ 15 [11,682] 32 Total revenues Expenditures Planning and development Total expenditures Excess [deficiency] of revenues over [under] expenditures Unreserved fund balance, January 1 Unreserved fund balance, December 31 Reconciliation to GAAP Accounts receivable GAAP Fund Balance, December 31 $ 77,540 89,190 72,197 89,175 72,197 89,175 5,343 15 7,961 4,754 13,304 $ 4,769 $ 2,864 16, 168 See independent auditor's report on the financial statements. 81 89,190 [11,650] 89,175 16,978 89,175 16,978 15 5,328 4,754 3,207 4, 769 .... $ _ ___,;8 ..... 5_3_5 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) NEIGHBORHOOD PARK FUND Revenues Licenses and permits Investment revenue Total revenues Expenditures Capital outlay Total expenditures Excess [deficiency] of revenues over [under] expenditures Unreserved fund balance, January 1 Prior year cancelled encumbrances For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final $ 5,300 $ 10,000 $ 10,000 94 500 500 5,394 10,500 10,500 32,139 95,073 95,073 32,139 95,073 95,073 [26,745] [84,573] [84,573] 48,344 84,573 84,573 Variance with Final Budget Positive [Negative] $ [4,700] (406] [5,106] 62,934 62,934 57,828 [36,229] Unreserved fund balance, December 31 21,599 .;..$ ____ -_$ ____ -._$ __ 2_1_._,5_9_9 Reconciliation to GAAP Current year encumbrances GAAP Fund Balance, December 31 $ 21,599 See independent auditor's report on the financial statements. 82 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPECIAL PARKS AND RECREATION FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Intergovernmental $ 202,255 $ 190,082 $ Investment revenue 642 4,000 Total revenues 202,897 194,082 Expenditures Capital outlay 194,000 194,000 Total expenditures 194,000 194,000 Excess [deficiency] of revenues over [under] expenditures 8,897 82 Other financing sources [uses] Transfers [out] Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 8,897 82 Unreserved fund balance, January 1 104,904 51,169 Prior year cancelled encumbrances 10,420 Unreserved fund balance, December 31 124,221 $ 51,251 $ Reconciliation to GAAP Current year encumbrances GAAP Fund Balance, December 31 $ 124,221 See independent auditor's report on the financial statements. 83 Final 190,082 4,000 194,082 194,000 194,000 82 82 51,169 51,251 Variance with Final Budget Positive [Negative] $ 12, 173 [3,358] 8,815 8,815 8,815 53,735 10,420 $ 72,970 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SPEC~LALCOHOLFUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Intergovernmental $ 202,255 $ 216,086 $ Investment revenue 30 Total revenues 202,285 216,086 Expenditures Public health and sanitation 202,255 216,086 Total expenditures 202,255 216,086 Excess [deficiency] of revenues over [under] expenditures 30 Unreserved fund balance, January 1 134 Unreserved fund balance/GAAP fund balance December 31 $ 164 $ -$ See independent auditor's report on the financial statements. 84 Final 216,086 216,086 216,086 216,086 - Variance with Final Budget Positive [Negative] $ [13,831] 30 [13,801] 13,831 13,831 30 134 $ 164 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) SALES TAX ECONOMIC DEVELOPMENT FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Taxes $ 335,247 $ 649,849 $ Investment revenue 4,060 5,000 Total revenues 339,307 654,849 Expenditures Capital outlay 441,606 1,474,000 Total expenditures 441,606 1,474,000 Excess [deficiency] of revenues over [under] expenditures [102,299] [819,151] Unreserved fund balance, January 1 1,104,402 869,281 Unreserved fund balance/GAAP fund balance December 31 $ 1,002,103 $ 50,130 $ See independent auditor's report on the financial statements. 85 Final 649,849 5,000 654,849 1,474,000 1,474,000 [819,151] 869,281 50,130 Variance with Final Budget Positive [Negative] $ [314,602] [940] [315,542] 1,032,394 1,032,394 716,852 235,121 $ 951,973 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) ARTS & HUMANITIES FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 390,649 $ 480,350 $ Investment revenue 93 2,000 Miscellaneous 40,464 500 Total revenues 431,206 482,850 Expenditures Culture and recreation 980,025 1,016,988 Total expenditures 980,025 1,016,988 Excess [deficiency] of revenues over [under] expenditures [548,819] [534,138] Other financing sources [uses] Transfers in 500,000 500,000 Transfers [out] Total other financing sources [uses] 500,000 500,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [48,819) [34,138] Unreserved fund balance, January 1 154, 132 138,327 Unreserved fund balance/GAAP fund balance December 31 $ 105,313 $ 104,189 $ See independent auditor's report on the financial statements. 86 Final 480,350 2,000 500 482,850 1,016,988 1,016,988 [534, 138] 500,000 500,000 [34, 138] 138,327 104,189 Variance with Final Budget Positive [Negative] $ [89,701) [1,907) 39,964 [51,644] 36,963 36,963 [14,681] [14,681) 15,805 $ 1,124 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) DEBT SERVICE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Taxes Real estate taxes $ 2,433,770 $ 2,691,197 Delinquent taxes 52,896 55,000 Motor vehicle taxes 374,874 365,992 Special assessments 1,538,904 1,635,000 Investment revenue 17,102 2,500 Miscellaneous 75,000 Total revenues 4,417,546 4,824,689 Expenditures Debt Service Principal retirement 4,907,918 5,157,920 Interest and other charges 11490,423 2,086,687 Total expenditures 6,398,341 7,244,607 Excess [deficiency] of revenues over [under] expenditures [1, 980, 795) [2,419,918) Other financing sources [uses] Issuance of bonds 1,000 Premium on bonds 16,751 Transfers in 2,241,309 2,000,000 Total other financing sources [uses] 2,259,060 2,000,000 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 278,265 [419,918] Unreserved fund balance, January 1 1,184,289 419,918 Unreserved fund balance December 31 1,462,554 $ - Reconciliation to GAAP Taxes receivable 2,521,302 Deferred revenue [2,473,993] GAAP Fund Balance, December 31 $ 1,509,863 See independent auditor's report on the financial statements. 87 Final $ 2,691,197 55,000 365,992 1,635,000 2,500 75,000 4,824,689 5,157,920 2,086,687 7,244,607 [2,419,918) 2,000,000 2,000,000 (419,918] 419,918 $ - Variance with Final Budget Positive [Negative] $ [257,427] (2,104] 8,882 (96,096] 14,602 [75,000) [407,143) 250,002 596,264 846,266 439,123 1,000 16,751 241,309 259,060 698,183 764,371 $ 1,462,554 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) SOLID WASTE DISPOSAL FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 3,160,158 $ 2,047,479 Investment revenue 14,079 4,000 Miscellaneous 20,552 49,310 Total revenues 3,194,789 2,100,789 Expenditures Public works 1,449,639 1,678,330 Total expenditures 1,449,639 1,678,330 Excess (deficiency] of revenues over [under] expenditures 1,745,150 422,459 Other financing sources [uses] Transfers [out] [905,000) [707,000) Total other financing sources [uses] [905,000] [707,000] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 840,150 [284,541] Unreserved fund balances, January 1 3,040,780 2,090,260 Unreserved fund balances, December 31 $ 3,880,930 $ 1,805,719 See independent auditor's report on the financial statements. 88 Final $ 2,047,479 4,000 49,310 2,100,789 1,678,330 1,678,330 422,459 [707,000) [707,000] [284,541] 2,090,260 $ 1,805,719 Variance with Final Budget Positive [Negative] $ 1,112,679 10,079 [28,758) 1,094,000 228,691 228,691 1,322,691 [198,000) [198,000) 1,124,691 950,520 $ 2,075,211 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) WATER AND SEWER FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 19,663,406 $ 19,625,000 Investment revenue 61,765 25,000 Miscellaneous 5,522 10,000 Total revenues 19,730,693 19,660,000 Expenditures Public works 12,243,703 12,831,419 Total expenditures 12,243,703 12,831,419 Excess [deficiency] of revenues over [under] expenditures 7,486,990 6,828,581 Other financing sources (uses] Transfers in 122,200 Transfers [out] [5,649,625] [8,770,000] Total other financing sources [uses] [5,649,625] [8,647,BOOJ Excess (deficiency] of revenues and other sources over (under] expenditures and other [uses] 1,837,365 (1,819,219] Unreserved fund balances, January 1 9,229,332 7,746,266 Prior year cancelled encumbrances 234,904 Unreserved fund balances, December 31 $ 11,301,601 $ 5,927,047 See independent auditor's report on the financial statements. 89 Final $ 19,625,000 25,000 10,000 19,660,000 12,831,419 12,831,419 6,828,581 122,200 [8,770,000) [8,647,800) (1,819,219) 7,746,266 $ 5,927,047 Variance with Final Budget Positive [Negative] $ 38,406 36,765 [4,478] 70,693 587,716 587,716 658,409 (122,200] 3,120,375 2,998,175 3,656,584 1,483,066 234,904 $ 5,374,554 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) SANITATION FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Final Revenues Charges for services $ 2,826,962 $ 2,913,179 $ 2,913,179 Investment revenue 5,793 Total revenues 2,832,755 2,913,179 2,913,179 Expenditures Public works 1,953,277 1,934,016 1,934,016 Total expenditures 1,953,277 1,934,016 1,934,016 Excess (deficiency] of revenues over [under] expenditures 879,478 979,163 979,163 Other financing sources [uses] Transfers [out] [376,500] [996,500] [996,500] Total other financing sources [uses] [376,500] [996,500] [996,500] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 502,978 [17,337] [17,337) Unreserved fund balance, January 1 1,041,379 1,041,560 1,041,560 Unreserved fund balances, December 31 $ 1,544,357 $ 1,024,223 $ 1,024,223 See independent auditor's report on the financial statements. 90 Variance with Final Budget Positive [Negative] $ (86,217] 5,793 [80,424] [19,261] [19,261] [99,685] 620,000 620,000 520,315 [181] $ 520,134 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN NET ASSETS -BUDGET AND ACTUAL (NON -GAAP BASIS) GOLF COURSE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services . $ 798,369 $ 823,950 $ Investment revenue 344 Miscellaneous 75,470 50,000 Total revenues 874,183 873,950 Expenditures Recreation 858,129 818,064 Total expenditures 858,129 818,064 Excess [deficiency] of revenues over [under] expenditures 16,054 55,886 Other financing sources [uses] Transfers [out] [83,289] Total other financing sources [uses] [83,289] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 16,054 [27,403] Unreserved fund balance, January 1 99,978 239,979 Unreserved fund balances, December 31 $ 116,032 $ 212,576 $ See independent auditor's report on the financial statements. 91 Final 823,950 50,000 873,950 818,064 818,064 55,886 [83,289] [83,289] [27,403] 239,979 212,576 Variance with Final Budget Positive [Negative] $ [25,581] 344 25,470 233 [40,065] [40,065] [39,832] 83,289 83,289 43,457 [140,001] $ [96,544J CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) WORKERS' COMPENSATION RESERVE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 298,628 $ 311,337 $ Investment revenue 3,080 2,500 Miscellaneous 2,197 Total revenues 303,905 313,837 Expenditures General government 389,412 709,667 Total expenditures 389,412 709,667 Excess [deficiency] of revenues over [under] expenditures [85,507) [395,830) Unreserved fund balance, January 1 1,004,882 844,976 Unreserved fund balances, December 31 $ 919,375 $ 449,146 $ See independent auditor's report on the financial statements. 92 Final 311,337 2,500 313,837 709,667 709,667 [395,830) 844,976 449,146 Variance with Final Budget Positive [Negative] $ [12,709) 580 2,197 [9,932) 320,255 320,255 310,323 159,906 $ 470,229 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) HEALTH INSURANCE FUND For the Year Ended December 31, 2017 Budgeted Amounts Actual Original Revenues Charges for services $ 6,809,860 $ 7,044,200 $ Investment revenue 10,586 5,000 Miscellaneous 32,507 5,000 Total revenues 6,852,953 7,054,200 Expenditures General government 6,402,325 6,995,644 Total expenditures 6,402,325 6,995,644 Excess [deficiency] of revenues over [under] expenditures 450,628 58,556 Unreserved fund balance, January 1 1,600,344 1,294,000 Unreserved fund balances, December 31 $ 2,050,972 $ 1,352,556 $ See independent auditor's report on the financial statements. 93 Final 7,044,200 5,000 5,000 7,054,200 6,995,644 6,995,644 58,556 1,294,000 1,352,556 Variance with Final Budget Positive [Negative] $ [234,340] 5,586 27,507 [201,247] 593,319 593,319 392,072 306,344 $ 698,416 CITY OF SALINA, KANSAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL (NON -GAAP BASIS) CENTRAL GARAGE FUND Revenues Charges for services Investment revenue Miscellaneous Total revenues Expenditures General government Total expenditures Excess [deficiency] of revenues over [under] expenditures Other financing sources [uses] Transfers in Transfers [out] Total other financing sources [uses] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] Unreserved fund balance, January 1 For the Year Ended December 31, 2017 $ 1,215,447 $ 6,481 1,221,928 1,311,755 1,311,755 [89,827] 130,000 130,000 40,173 [18,578] Budgeted Amounts Original Final Variance with Final Budget Positive [Negative] -$ 40 17,500 -$ 1,215,447 40 [40] __ ..:...;17_:.;,5:.;:0~0 [11,019) 17,540 17,540 1,757,484 1,757,484 1,757,484 1,757,484 [1,739,944] [1,739,944] 1,730,000 1,730,000 [10,000) _ ___.,[_10....:...,0_0-'-"0] 1,720,000 [19,944] 165,078 1,720,000 [19,944] 165,078 1,204,388 445,729 445,729 1,650, 117 [1,600,000] 10,000 [1,590,000) 60,117 [183,656) Unreserved fund balance, December 31 $ 21,595 $ 145,134 $ 145,134 $ [123,539] See independent auditor's report on the financial statements. 94 CITY OF SALINA, KANSAS INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one agency to other departments or agencies of the government and to other governmental units on a cost reimbursement basis. Workers' compensation reserve fund -To account for the costs of providing a partially self-insured workers' compensation plan and for accumulating the necessary reserve amounts. Health insurance fund -To account for the costs of providing a partially self-insured health insurance and for accumulating the necessary reserve amounts. Central garage fund -To account for the accumulation and allocation for costs associated with the City's centralized vehicle repair shop. 95 CITY OF SALINA, KANSAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2017 Workers' Compensation Health ASSETS Reserve Insurance Current assets: Cash and investments $ 919,455 $ 2,084,615 Inventory and prepaid supplies Total current assets 919,455 2,084,615 Capital assets: Capital assets Less: accumulated depreciation Total capital assets Total assets 919,455 2,084,615 Deferred outflows of resources: Pension deferred outflows of resources Total deferred outflows of resources Total assets and deferred outflows of resources $ 919,455 $ 2,084,615 Liabilities: Current liabilities (payable from current assets): Accounts payable $ 80 $ 33,642 Current portion of compensated absences payable Current portion of accrued claims payable 177,141 395,691 Total current liabilities (payable from current assets) 177,221 429,333 Noncurrent liabilities: Compensated absences payable Accrued claims payable 44,772 Net pension liability Total noncurrent liabilities 44,772 Total liabilities 221,993 429,333 Deferred inflows of resources Pension deferred inflows of resources Total deferred inflows of resources Total liabilities and deferred inflows of resources $ 221,993 $ 429,333 Net Position Invested in capital assets, net of related debt $ -$ - Unrestricted 697,462 1,655,282 Total net position $ 697,462 $1,655,282 See independent auditor's report on the financial statements. 96 Total Internal Central Service Garage Funds $ 45,763 $ 3,049,833 165,125 165, 125 210,888 3,214,958 184,326 184,326 160,966 160,966 23,360 23!360 234,248 3,238,318 31,240 31,240 31,240 31,240 $265,488 $ 3,269,558 $ 24,168 $ 57,890 28,707 28,707 572,832 52,875 659,429 24,863 24,863 44,772 165,559 165,559 190,422 235,194 243,297 894,623 11,338 11,338 11,338 11,338 $254,635 $ 905,961 $ 23,360 $ 23,360 [12,507] 2,340,237 $ 10,853 $ 2,363,597 CITY OF SALINA, KANSAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUND For the Year Ended December 31, 2017 Workers' Compensation Health Reserve Insurance Operating revenues Charges for services $ 298,628 $ 6,809,860 $ Miscellaneous 2,197 32,507 Total operating revenues 300,825 6,842,367 Operating expenses General government 356, 171 6,503,682 Depreciation Total operating expenses 356,171 6,503,682 Operating income [loss] [55,346] 338,685 Nonoperating revenues [expenses) Investment revenue 3,080 10,586 Gain/[loss] on disposal of fixed assets Total other operating revenues [expenses] 3,080 10,586 Income [loss] before transfers [52,266] 349,271 Transfers from [to] other funds Transfers in Transfers [out] Total transfers Change in net position [52,266] 349,271 Net position, January 1 749,728 1,306,011 Net position, December 31 $ 697,462 $ 1,655,282 $ See independent auditor's report on the financial statements. 97 Total Internal Central Service Garage Funds 1,215,447 $ 8,323,935 6,482 41,186 1,221,929 8,365,121 1,349,966 8,209,819 9,260 9,260 1,359,226 8,219,079 [137,297] 146,042 13,666 [4,044] [4,044] [4,044] 9,622 [141,341] 155,664 130,000 130,000 130,000 130,000 [11,341] 285,664 22,194 2,077,933 10,853 $ 2,363,597 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2017 Workers' Compensation Health Reserve Insurance Cash flows from operating activities Cash received from customers and users $ 265,387 $6,911,218 Cash paid to suppliers of goods or services (356,091] (6,470,040] Cash paid to employees Other operating receipts 2,197 32,507 Net cash provided by [used in] operating activities [88,507] 473,685 Cash flows from investing activities Interest received 3,080 10,586 Cash flows from capital and related financing activities Proceeds from sale of capital assets Net cash provided by [used in] capital Cash flows from noncapital financing activities Transfers in Transfers [out] Net cash provided by [used in] noncapital financing activities Net increase (decrease] in cash and cash equivalents [85,427] 484,271 Cash and cash equivalents, January 1 1,004,882 1,600,344 Cash and cash equivalents, December 31 $ 919,455 $2,084,615 See independent auditor's report on the financial statements. 98 Total Internal Central Service Garage Funds $1,215,448 $ 8,392,053 (1,049,688] [7,875,819] (275,772] (275,772] 6,481 41,185 [103,531] 281,647 13,666 130,000 130,000 130,000 130,000 26,469 425,313 19,294 2,624,520 $ 45,763 $ 3,049,833 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS (Continued) For the Year Ended December 31, 2017 Reconciliation of operating [loss] income to net cash provided by [used in] operating activities Workers' Compensation Health Reserve Insurance Central Garage Total Internal Service Funds Operating income [loss] $ [55,346] $ 338,685 $ [137,297] $ 146,042 Adjustments to reconcile operating income [loss] to net cash provided by [used in] operating activities Depreciation expense [Increase] decrease in inventory [Increase] decrease in deferred outflows Increase [decrease] in accounts payable Increase [decrease] in accrued compensated absences Increase [decrease] in net pension liability Increase [decrease] in claims payable Increase [decrease] in deferred inflows Net cash provided by [used in] operating activities 80 33,642 [33,241) 101,358 $ [88,50ZJ $473,685 See independent auditor's report on the financial statements. 99 9,260 9,260 24,761 24,761 [1, 162] [1, 162] [13,704] 20,018 14,065 14,065 [234] [234] 68,117 780 780 $ [103,531J $281,647 CITY OF SALINA, KANSAS AGENCY FUNDS Agency funds are used to account for assets held by the government as an agent for individuals, private organizations, other governments and/or other funds. Special assessment escrow agency fund -To account for property owners' prepayment on outstanding special assessments. Fire insurance proceeds agency fund -To account for insurance proceeds received for severely damaged buildings the insurance proceeds, plus interest, are returned to the property owners when the buildings are repaired or demolished. Payroll clearing agency fund -To account for interfund payroll receivables and payables for all City funds. Court bond and restitution agency fund -To account for bonds and restitution remitted to the court and awaiting court orders for distribution. Police investigation account agency fund -To account for monies held by the police department for use in investigations. Citizenship agency fund -To account for donations received and used for the citizenship fund. Section 125 plan agency fund -To account for monies held for the Section 125 plan. DTF federal forfeiture fund -To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they related to federal cases. Expenses are limited to equipment and training for the Drug Task Force. DTF local fund -To account for revenues and expenditures related to the sale of assets acquired during drug enforcement activities as they relate to local cases. Expenses are limited to equipment and training for the Drug Task Force. DTF reserve fund -To account for revenues and expenditures related to State of Kansas Drug Tax Distributions. Expenses are limited to equipment and training for the Drug Task Force. Beechcraft remediation settlement fund -To account for revenues and expenditures related to the bankruptcy of Beechcraft and the former Schilling Airforce Base remediation case. Bail bond escrow fund -To account for funds being held in escrow for bonds issued by Municipal Court. 100 Special Fire Assessment Insurance Escrow Proceeds ASSETS: Cash and investments $ 90849 $ 18,869 Total assets 90849 $ 18,869 LIABILITIES. Accounts payable 90849 $ 18,869 Total lrabilrties 90,849 s 18,869 CITY OF SALINA, KANSAS COMBINING BALANCE SHEET AGENCY FUNDS December 31, 2017 Court Police Section DTF Payroll Bond and lnvesbgat1on 125 Federal DTF ~ Rest1tutron Account C1trzenshrp f!§!l Forfeiture ~ $ [365,473) $ 23 818 ~ $ 94,580 $291,014 $ 3 696 $47,216 $ [365,473) $ 23 818 ~ $ 94 580 $291,014 $ 3696 $ [365,473] $ 23 818 ~ $ 94,580 $291,014 $ 3,696 s [365,473] s 23 818 ~ s 94 580 $291,014 $ 3696 See independent audrto(s report on the financial statements 101 $47,216 $47,216 $47216 Beechc:raft Bail DTF Remedtt1on Bond ~ Settlement Escrow ~ $26,299 $ 154,181 $1127 $389 555 $26,299 $ 154,181 $1,127 $389,555 $26,299 $ 154,181 $1,127 $389,555 ~ $ 154181 $1127 $389,555 CITY OF SALINA, KANSAS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended December 31, .2017 Balance December 31, 2016 Additions Deductions Cash and investments Special Assessment Escrow $ 80,917 $ 9,932 $ Fire Insurance Proceeds 63 54,045 Payroll Clearing [320,981) Court Bond and Restitution 34,525 Police Investigation Account 3,378 1 Citizenship Trust 24,874 126,501 Section 125 Plan Fund 290,772 348,638 DTF Federal Forfeiture 7 11,963 DTF Local 101,926 DTF Reserve 33,299 Beechcraft Remediation Settlement 153,614 567 Bail Bond Escrow 1,124 3 Total Assets $ 268,293 $ 686,875 $ Accounts Payable Special Assessment Escrow $ 80,917 $ 9,932 $ Fire Insurance Proceeds 63 54,045 Payroll Clearing [320,981) Court Bond and Restitution 34,525 Police Investigation Account 3,378 1 Citizenship Trust 24,874 126,501 Section 125 Plan Fund 290,772 348,638 DTF Federal Forfeiture 7 11,963 DTF Local 101,926 DTF Reserve 33,299 Beechcraft Remediation Settlement 153,614 567 Bail Bond Escrow 1,124 3 Total liabilities $ 268,293 $ 686,875 $ See independent auditor's report on the financial statements. 102 - 35,239 44,492 10,707 56,795 348,396 8,274 54,710 7,000 565,613 - 35,239 44,492 10,707 56,795 348,396 8,274 54,710 7,000 565,613 Balance December 31, 2017 $ 90,849 18,869 [365,473) 23,818 3,379 94,580 291,014 3,696 47,216 26,299 154,181 1,127 $ 389,555 $ 90,849 18,869 [365,473) 23,818 3,379 94,580 291,014 3,696 47,216 26,299 154,181 1,127 $ 389,555 STATISTICAL SECTION Schedule 1 City of Salina, Kansas Net Posrtion by Component Last Ten Fiscal Years (accrual basrs of accountrng) (inOOO's) Fiscal Year ~ ~ ~ ZQ11 2Q1Z ZQ.ll 2014 Zill. ZQ1§ ZQ1I Amount 'lo Amount 'lo Amount 'lo Amount % Amount % Amount % Amount % Amount % Amount % Amount % Governmental activities Net investment Jn capita! assets $118,965 93% $101,974 85% $113,001 96% $109,289 93% $112,S29 94% $116,585 90% $ 115,589 90% $ 130,401 122% $124,635-· 108% $129,921 105% Restncted 1,212 1% 1,174 1% 988 1% 1,712 1% 1,082 1'k 1,210 1% 876 1% 1,224 1% 1,738 1% 2,012 2% Unrestrtcted ~ 6% 16706 14% ~ 3% ~ 5% ~ 5% ~ 9% ----1.1...fil. 9% ~ -23% ~ ·9% ~ -7% Total governmental activities net position $127,922 100% $119854 100% $117,797 100% $117334 100% $119,522 100% $129,423 100% $ 127,878 100% $ 106,703 100% $115,868 100% $123,701 100% Busrness-type activibes Net investment Jn capital assets $ 45,931 79% $ 48,234 79% $ 48,078 75% $ 44,227 63% $ 50,857 69% $ 57,103 75% $ 61,721 75% $ 68,107 80% $ 62,427 71% $ 63,316 71% Restricted 1,211 2% 1,553 3% 1,553 2% 1,553 2% 1,553 2% 1,553 2% 1,512 2% 1,512 2% 1,512 2% 1,512 2% Unrestricted --1Ll2Z. 19% ~ 19% 14,306 22% 24 528 35% 21,450 29% 17794 23% ~ 24% ~ 18% 23621 27% 24,255 27% Total business-type activrties net position $ 58,339 100% ~ 100% $ 63 937 100% $ 70308 100% $ 73,860 100% $ 76,450 100% s 82,n8 100% $ 85,229 100% $ 87,560 100% $ 89 083 100% Pnmary government Net investment Jn capital assets $164,896 89% $150,208 83% $161,080 89% $153,516 82% $163.786 85% $173,688 84% $ 177,311 84% $ 198,508 103% $187,062 92'-4 $ 193,237 91'-4 Restricted 2,423 1% 2,727 2% 2,541 1% 3,216 2% 2,635 1% 2,763 1% 2,388 1% 2,736 1% 3,250 2% 3,524 2% Unrestncted 18,942 10% 28,188 16% ~ 10% 30867 16% ~ 14% 29,422 14% 30,959 15% ~ -5% ~ 6% ~ 8% Total pnmary government net posrtlon $186,261 100% $181,123 100% $181,736 100% $187,599 100% $193,382 100% $205,873 100% $ 210,658 100% $ 191,932 100% $203,428 100% $ 212,784 100% Souree Crty of Salina Comprehensive Annual Frnancial Reports, 2008 • 2017 103 Expenses Governmental actJv1bes General government Public safety Public works Public health and sanitation Culture and recreation Planning and development Interest on long term debt Total governmental actJvit1es expenses Business-type activities· Solid waste disposal Water and sewer Sanitation Go~course Total business-type actJvities expenses Total pnmary government expenses Program Revenues Governmental actJvibes Charges for services General government Public safety Public works Public health and san1tat1on Culture and recreabon Planning and development Operating grants and contributions Capital grants and contnbut1ons Total governmental activities program revenues Business-type act1v1t1es: Charges for services Solid waste disposal Water and sewer Samtabon Golf course Operating grants and contnbubons Capital grants and contnbutions Total business-type actJvit1es program revenues Total primary government program revenues Net (Expense) Revenue Governmental act1V1bes Business-type act1vibes Total pnmary government net expense Schedule 2 City of Salina. Kansas Changes In Net Posrt1on Last Ten Fiscal Years (accrual basis of accounbng) (in OOO's) Fiscal Year 2008 £QQ2 2010 2011 £Qll 2013 ~ 2015 lQ12 2Q1l $ 6,791 14,664 $ 10,845 13,614 $ 11,278 $ 10,978 $ 12,550 10,743 $ 9,188 9,780 18,440 16,539 18,592 18,579 19,066 19,649 20,208 21,084 22,232 23,120 9,706 9,781 9,782 9,858 10,957 11,064 11,401 9,049 9,773 10,345 1,310 1,390 1,365 1,368 1,383 1,369 347 995 1,095 1,126 5,582 5,397 8,572 6,693 5,338 4,809 5,156 6,517 6,612 6,880 3,481 3,375 3,716 3,450 3,362 3,399 3,236 1,915 2,047 1,835 ---1.IB ~ ~ ----1.lli. ~ -1&11. ~ ---2.lli ~ 46 764 ~ ~ 55,212 53,298 ~ 64 715 52077 53 918 ~ 2,008 2,287 3,010 2,945 2,067 3,532 1,870 1,766 2,335 2,365 13,284 12,995 14,050 13,597 14,897 15,418 14,904 11,712 14,807 15,650 2,184 2,224 2,261 2,261 2,441 2,237 2,399 1,909 2,043 2,178 ~ ~ ____fil ~ ____ill, ~ ____fil ~ ___.m ~ 18 360 18403 ~ ~ 20,128 21,955 20016 16208 19 977 21045 $ 65124 $ 69,649 $ 75,266 $ 74 840 $ 73,426 $ 75176 $ 74 731 $ 68,285 $ 73,895 $ 75 856 $ 4,581 $ 4,599 $ 5,143 $ 6,106 6,328 $ 5,648 $ 5,662 $ 3,151 $ 3,134 $ 3,470 3,588 2,913 3,969 3,766 4,290 4,656 4,222 4,600 4,891 4,601 120 164 198 262 306 277 255 193 238 348 39 42 37 43 46 34 46 46 44 50 2,139 1,936 2,817 3,140 1,728 1,466 1,533 1,501 1,638 1,541 240 267 144 153 158 161 167 73 140 91 3,752 3,163 3,415 2,907 4,495 4,200 4,015 3,394 4,332 4,641 ---__ill ~ 13064 15,723 1()377 ---1Llli 10342 15900 12 955 ~ 14642 2,749 2,903 2,853 2,904 3,137 3,138 3,024 2,519 2,795 3,165 14,073 14,980 16,520 17,904 19,099 17,938 18,742 19,059 19,322 19,855 2,172 2,292 2,310 2,334 2,462 2,514 2,553 2,529 2,751 2,885 751 757 736 636 783 719 811 820 789 798 202 ~ ____ill ~ ---19744 20,932 22,419 27,784 25,755 24 309 25,245 24 927 25,657 26,703 $ 34,202 $ 34 016 $ 38,142 $ 44161 $ 43106 $ 40 651 $ 41145 $ 37 885 $ 40,807 $ 41,345 $ (32,306) $ (38,062) $ (39,405) $ (38,835) $ (35,947) $ (36,879) $ (38,815) $ (39,119) $ (38,768) $ (40,169) ~~~~~~~~~~ $ (30,922) $ (351533) $ (37,124) $ (30,679) $ (301320) $ (341525) $ (33,586) $ (301400) $ (331088) $ (341511) General Revenues and Other Changes In Net Position Governmental actJv1bes· Taxes Property taxes, general purpose $ 7,818 9,019 $ 7,803 7,783 $ 8,272 $ 8,031 $ 8,315 $ 8,242 $ 8,196 $ 9,101 Property taxes, debt service 1,529 1,711 2,230 2,779 2,439 2,362 2,578 2,766 3,022 2,487 Motor vehicle taxes 1,195 1,135 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 Sales tax, general purpose 11,986 11,669 11,118 11,767 12,165 12,260 12,689 12,931 12,781 12,906 Selective sales tax 2,589 3,380 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 Other taxes 5,747 5,791 6,298 6,390 6,486 6,630 7,231 7,363 7,991 6,900 Investment revenues 805 277 81 77 66 67 98 86 148 92 Miscellaneous 812 505 565 872 660 9,918 1,160 2,371 5,842 2,003 Transfers, net ___ 6_o _ill. ___ 9_2 ~ __ 3_0 ~ ___ 1 ---2.fil ---2&QQ. ~ Total governmental activities 32 640 33 742 33440 35 097 ~ 45,748 37783 43448 _il.lli 48002 Business-type act1v1t1es Investment revenues 300 242 67 84 79 49 51 56 78 129 Miscellaneous 118 352 341 330 434 279 97 103 Reimbursements 180 132 79 Transfers, net ____j§.Q) ~ _w _ill!!!) ____JW __filQ) _illfil) --1Mfil) ~ Total business-type actJv1bes ____ill. ~ ____ill. ~ ~ ~ _____m. ~ ___Q.lli) ~ Total pnmary government $ 32,898 $ 34 081 $ 33,756 $ 35,312 $ 35,964 $ 45126 $ 38,111 $ 39 655 $ 44 427 $ 43 867 Change In Net Position Governmental act1vibes 234 $ (4,320) $ (5,965) $ (3,738) $ (466) $ 8,869 $ (1,032) $ 4,329 $ 9,083 $ 7,833 Business-type activities --1.ill. ~ ~ ~ _fil.1Q, ---1lli. --3lli ~ ~ ----1.fil. Total pnmary government $ 1976 ~ $ (3,368) $ 4,633 $ 5,644 $ 10,601 $ 4,525 $ 9,455 $ 11,339 $ 9,356 Source Crty of Salina Comprehensive Annual Financial Reports, 2008 -2017 104 Schedule 3 City of Safina, Kansas Fund Balances. Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2011 2008 2009 2010 !Note 1) 2012 2013 2014 2015 2016 2017 General Fund Reserved $ 274 $ 508 $ 99 $ $ $ $ $ $ $ Nonspendable 90 116 81 107 111 131 153 Restricted Committed Assigned 293 540 331 239 199 136 214 Unreserved/unassigned 5,756 4 580 3 518 3454 3172 3138 3,908 4,530 4 765 6 516 Total general fund $ 6,030 $ 5,088 3,617 $ 3,837 $ 3,828 $ 3,550 $ 4,254 $ 4,840 $ 5,032 $ 6,883 Restatement 156 Restated fund balance $ 3,773 All other governmental funds Reserved $ 3,951 $ 11,092 $ 6,413 $ $ $ $ $ $ $ Nonspendable Restricted 3,611 3,319 3,446 2,910 2,793 3,142 4,191 Committed 127 (516) 7,486 9,886 8,695 14,284 10,072 Assigned 4,323 4,087 3,146 1,280 619 1,043 641 Unreserved/unassigned 354 4 024 (1, 130) (10,537) (6,823) (28) Total all other governmental funds $ 4,305 $ 15,116 $ 5,283 $ 8,061 $ 6,890 $ 14,078 $ 14,076 $ 1,570 $ 11,646 $ 14,876 Note 1: Pnor year amounts have not been restated for the implementation of GASS Statement 54 in fiscal year 2011. Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 105 Schedule 4 City of Salina, Kansas Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Revenues Taxes (see Schedule 5) $ 30,788 $ 32,706 $ 32,702 $ 33,949 $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41,597 Intergovernmental 3,741 3,153 3,404 2,901 4,487 4,192 4,008 3,385 4,325 4,536 Special assessments 1, 178 1,269 1,385 1,535 2,315 1,706 1,810 1,679 1,669 1,539 Licenses and pennits 10 10 11 6 8 9 7 10 7 6 Charges for services 7,415 6,767 8,934 9,730 8,484 8,536 8,276 6,416 6,953 6,880 Investment revenue 490 210 64 69 47 40 59 47 142 79 Reimbursements 39 140 70 32 36 9,015 123 491 1,406 Donations 241 83 141 111 Miscellaneous 597 438 448 599 537 810 799 1,853 4 315 1,851 Total revenues 44,258 44,693 47,018 48,821 50,638 59,072 51,846 51,135 57,219 56,599 Expenditures General government 3,600 3,007 3,549 3,461 3,574 4,269 3,986 5,342 5,422 5,423 Public safety 17,945 17,883 18,229 18,118 18,564 19,155 19,559 21,268 21,664 21,629 Public works 6,593 6,643 6,634 6,569 7,004 7,220 7,443 5,333 5,778 6,048 Public health and sanitation 1,276 1,353 1,332 1,330 1,343 1,344 319 982 1,078 1,097 Culture and recreation 5,142 4,947 5,777 5,900 4,449 3,939 4,292 5,659 5,817 6,143 Planning and development 3,377 3,269 3,609 3,344 3,256 3,293 3,232 1,910 2,042 1,801 Miscellaneous 32 Capital outlay 10,581 17,707 18,603 9,847 7,327 13,047 11,009 25,527 24,001 18,281 Debt service Principal 2,812 4,667 5,959 4,411 8,592 5,038 5,261 6,250 17,902 5,088 Interest 1,567 1,596 2,258 2,084 2,103 1,867 1,864 1,833 3,152 1,771 Deposit to escrow 107 92 Total expenditures 52,892 61,072 66,089 55,064 56,304 59,172 56,965 74,104 86,856 67,281 Other financing sources (uses) Bonds and notes issued 7,245 23,695 7,034 6,565 6,150 5,690 5,365 6,825 34,892 11,490 Bond and note premium 80 1,369 47 23 60 185 302 369 1,503 95 Transfers in 2,823 3,617 5,076 7,994 3,488 4,907 3,001 7,642 7,065 8,339 Transfers out (2,763) (3,422) (4,984) (5,692) (3,458) (3,907) (2,999) (3,913) (3,555) (4,160) Issuance costs Other 156 Total other financing sources (uses) 7,385 25,259 7,173 9 046 6,240 6,875 5,669 10,923 39,905 15,764 Net change in fund balance $ (1,250) $ 8,880 $ (11,898) $ 2,803 $ 574 $ 6,775 $ 550 $ (12,046) $ 10,268 $ 5,082 Debt service as a percentage of non-capital expenditures 12% 17% 21% 17% 28% 18% 18% 20% 50% 16% Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 106 Schedule 5 City of Salina, Kansas Tax Revenues by Source, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in OOO's) Fiscal Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Real estate $ 9,084 $ 9,971 $ 9,756 $ 10,288 $ 10,466 $ 10,145 $ 10,657 $ 10,729 $ 10,972 $ 11,377 Delinquent 263 760 278 274 245 248 235 279 246 210 Motor vehicle 1,120 1,135 1,145 1,150 1,153 1,200 1,250 1,312 1,370 1,372 General sales 11,986 11,669 11, 117 11,767 12,165 12,260 12,689 12,931 12,781 12,906 Selective sales 2,589 3,380 4,108 4,080 4,210 4,281 4,461 4,558 4,901 8,832 Other taxes 5,747 5,791 6,298 6,390 6,485 6,630 7,231 7,362 7,991 6,900 Total taxes $ 30,788 $ 32,706 $ 32,702 $ 33,949 $ 34,724 $ 34,764 $ 36,523 $ 37,171 $ 38,261 $ 41,597 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 107 Schedule6 City of Salina, Kansas Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Assessed Value Fiscal Estimated Total Assessed (Budget) Total, Excluding Motor Vehicle Total, Taxable Market Value Value to Est. Year Real Estate Personal Property State Assessed Motor Vehicles Tax Rate (Note 1) Assessed Value (Note 2) Market Value 2006 $ 296,537,399 $ 38,662,356 $ 17,624,030 $ 352,823,785 23.999 $ 49,367,870 $ 402, 191,655 $ 2,229, 131,633 18.04 2007 $ 321,695,326 $ 39,691,690 $ 16,530,171 $ 377,917,187 23.789 $ 50,551,299 $ 428,468,486 $ 2,416,543,103 17.73 2008 $ 342,045,389 $ 35,089,042 $ 15,594,056 $ 392,728,487 23.959 $ 50,548,706 $ 443,277' 193 $ 2,612,229,468 16.97 2009 $ 356,678,712 $ 28,373,980 $ 14,929,456 $ 399,982, 148 25.886 $ 51,351,656 $ 451,333,804 $ 2,914,775,730 15.48 2010 $ 358,979,211 $ 24,760,806 $ 13,730,609 $ 397,470,626 25.855 $ 50,330,252 $ 447,800,878 $ 2,893,359,541 15.48 2011 $ 367,750,803 $ 19,918,188 $ 14,685,585 $ 402,354,576 26.022 $ 47,406,062 $ 449,760,638 $ 2,869,531,746 15.67 2012 $ 369,416,422 $ 18,654,394 $ 15,779,466 $ 403,850,282 26.272 $ 47,553,744 $ 451,404,026 $ 2,884,188,981 15.65 2013 $ 370,390,092 $ 17,769,120 $ 16,948,264 $ 405,107,476 26.927 $ 48,882,411 $ 453,989,887 $ 2,889,385,914 15.71 2014 $ 376,131,346 $ 13,652,885 $ 17,670,147 $ 407,454,378 27.080 $ 48,865,900 $ 456,320,278 $ 2,917,267,724 15.64 2015 $ 381,087,426 $ 12,607,815 $ 18,984,453 $ 412,679,694 27.311 $ 50,350,566 $ 463,030,260 $ 2,957,531,741 15.66 2016 $ 389,872,825 $ 11,653,719 $ 19,323,055 $ 420,849,599 27.603 $ 51,833,505 $ 472,683, 104 $ 3,046,949,034 15.51 2017 $ 391,895,060 $ 11,146,213 $ 19,323,055 $ 422,364,328 27.311 $ 50,970,796 $ 473,335,124 $ 3,097,885, 103 15.28 Note 1: The tax rate for motor vehicles is set based on the average countywide tax rate. The City of Salina then receives a share of that based on tax effort. Note 2: The estimated market value excludes the value of the State assessed properties. Market value information is not available for those properties. However, state assessed property is generally assessed at 33% of market value, except for railroads, which are assessed at 15% of market value. Note 3: The Direct rate is expressed in dollars per thousand dollars of assessed value. Source: Saline County Clerk 108 City of Salina Fiscal Debt Total (Budget) Operating Service City Year Millage Millage Millage 2008 20.047 3.912 23.959 2009 21.749 4.137 25.886 2010 20.082 5.773 25.855 2011 19.236 6.786 26.022 2012 20.326 5.946 26.272 2013 20.242 5.948 26.190 2014 20.539 6.388 26.927 2015 20.692 6.388 27.080 2016 19.950 7.361 27.311 2017 21.694 5.909 27.603 Source: Saline County Treasurer Schedule 7 City of Salina, Kansas Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,rJOO of assessed value) Saline County Debt Total Operating Service County Operating Millage Millage Millage Millage 27.435 27.435 42.761 29.347 29.347 46.339 31.303 31.303 45.341 31.432 31.432 45.818 32.576 32.576 47.127 34.823 34.823 47.133 37.895 37.895 46.599 38.047 38.047 44.088 38.275 38.275 44.465 37.508 37.508 44.069 USD 305 (2) Other (1) Debt Total Service USD Millage Millage Other 12.229 54.990 10.775 12.208 58.547 10.971 13.155 58.496 12.401 13.095 58.913 12.131 11.693 58.820 11.989 11.516 58.649 12.135 11.517 58.116 12.941 11.517 55.605 13.305 11.655 56.120 13.293 11.674 55.743 13.299 (1) The "Other" column includes the State of Kansas, the Salina Airport Authority, the Salina Public Library and Kansas State Extension District #3. Total 117.159 124.751 128.055 128.498 129.657 131.797 135.879 134.037 134.999 134.153 (2) A small portion of Salina is covered by USD 306, USO 307, or USD 400. Total Tax Rates are different in the areas covered by these jurisdictions. 109 Taxpayer Westar Energy (Western Resources) SFC Global Supply Chain, Inc. (Schwan's) RAF Salina, LLC Central Mall Realty Holding LLC Kansas Gas Service Sams Real Estate Business Trust/Walmart Menard Inc. Great Plains Manufacturing Union Pacific Wal-mart Real Estate Business Trust Southwestern Bell S&B Motels Individual Salina Regional Health Center Combined Valuation of the Ten Largest Taxpayers City Valuation Percent of Total City Assessed Valuation Source: Saline County Clerk's Office or recent OS Schedule 8 City of Salina, Kansas Principal Property Taxpayers Current Year and Ten Years Ago 2007 {2006 Assessed Value~ Type of Business Utility Pizza Manufacturing Regional Shopping Center Regional Shopping Center Utility Discount Retail Stores Home Improvement Manufacturing Railroad Discount Retail Stores Telephone Utility Motel Residential Hospital and Medical Offices 110 Assessed Valuation $ 7,287,074 12,382,582 9,003,313 2,633, 187 2,308,375 3,627,525 4,783,821 2,388,908 1,913,209 5,580,586 $ 51,908,580 $ 335,262,182 % of Total Valuation 2.17% 3.69% 2.69% 0.79% 0.69% 1.08% 1.43% 0.71% 0.57% 1.66% 15.48% 2016 {2015 Assessed Value~ Assessed %of Rank Valuation Total Rank 3 $ 11,025,004 2.38% 1 1 7, 189,283 1.55% 4 N/A 5,106,493 1.10% 2 2 4,496,340 0.97% 3 7 3,644,537 0.79% 5 NIA 2,526,108 0.55% 6 N/A 25,066,064 5.41% 7 9 2,327,353 0.50% 8 N/A 2,288,512 0.49% 9 6 2,278,951 0.49% 10 5 8 10 4 $ 65,948,645 $ 463,030,260 14.24% Schedule 9 City of Salina, Kansas Property Tax Levies and Distributions Last Ten Fiscal Years Current Year Tax Distributions Total Tax Distributions Fiscal Taxes Levied (Budget) for the fiscal Delinquent Percentage Year ~ear Amount Percentage Collections (1) Amount of lev~ 2008 $ 9,409,338 $ 9,083,917 96.5% $ 262,511 $ 9,346,428 99.3% 2009 $ 10,354,161 $ 9,923,959 95.8% $ 759,764 $ 10,683,723 103.2% 2010 $ 10,276,905 $ 9,704,937 94.4% $ 278,656 $ 9,983,593 97.1% 2011 $ 10,415,491 $ 10,287,770 98.8% $ 273,843 $ 10,561,613 101.4% 2012 $ 10,570,420 $ 10,411,299 98.5% $ 245,086 $ 10,656,385 100.8% 2013 $ 10,576,448 $ 10,145,404 95.9% $ 248,184 $ 10,393,588 98.3% 2014 $ 10,908,147 $ 10, 776,688 98.8% $ 398,820 $ 11,175,508 102.5% 2015 $ 11,316,065 $ 10,460,246 92.4% $ 617,496 $ 11,077,742 97.9% 2016 $ 11,740,993 $ 10,972,299 93.5% $ 245,577 $ 11,217,876 95.5% 2017 $ 11,254,398 $ 11,239,051 99.9% $ 209,950 $ 11,449,001 101.7% (1) Delinquent collections are reported in the aggregate for all previous years. Data is not currently available for "collected in subsequent years" Source: Saline County Treasurer's Office 111 City Direct Tax Rate General Special purpose County-wide Tax Rate Portion of County-wide tax allocated to City (July Percentage) 2008 0.50% Schedule 10 City of Salina, Kansas Direct Sales Rate by Taxing Entity Last Ten Fiscal Years Fiscal Year 2009 2010 2011 0.50% 0.50% 0.50% 0.25% 0.25%/0.41 0.40% 0.40% 1.00% 1.00% 1.00% 1.00% 62.31% 62.46% 61.58% 63.34% 2012 2013 2014 2015 2016 0.50% 0.50% 0.50% 0.50% 0.50% 0.40% 0.40% 0.40% 0.40% 0.40% 1.00% 1.00% 1.00% 1.00% 1.00% 61.72% 60.86% 60.23% 60.28% 60.28% In addition to the direct tax, the City receives a portion of the Countywide sales tax, based on a formula distribution. The formula is based on property tax effort and population, and is adjusted in January and July of each year. In May, 2016, the voters approved an increase in the Special Purpose Tax rate from .40% to .75%, to be effective October 1, 2016. Source: Kansas Department of Revenue 112 2017 0.50% 0.40% 1.00% 60.28% Schedule 11 City of Salina, Kansas W•ter Sales by Class of Customer Last Ten Fiscal Years 2008 2009 2010 2011 2012 2013 2014 2015 2018 2017 # Accts Water #Accts Water # Accts Wat et' # Accts Wolff # Accts Watll!'r # Acets Water # Accts Water # Accts Water #Accts Wat@r # Accts Water Rate Class Billed Sold Bm•d Sold Bifted Sold Bmed Sold BiHed Sold Bift•d Sold BIDed Sold BIR•d Sold Bin@d Sold BiUed Sold Residential 17,813 994,875 17,792 1,043,774 17,838 1, 127,864 17,899 1,194,629 17,893 1,225,931 17,966 989,788 18,042 1,003,100 18,086 987,540 18,125 950,697 18,124 988,572 Commercial 1,591 333,720 1,589 339,507 1,568 350,633 1,574 372,499 1,565 38,547 1,579 348,968 1,599 353.675 1,600 350,767 1,603 345,232 1,606 345,250 lndustnal 48 203,491 46 152,910 44 183,166 44 180,277 42 174,595 40 182,529 42 193,233 44 202,407 44 191,238 44 193,503 Government 152 68,368 104 41,793 85 42,714 97 55,910 99 54,618 99 46,484 97 45.346 97 41,928 99 45,136 99 41,552 Apartment 182 64,703 182 71,503 172 71,121 168 72,582 169 70,283 168 67,155 166 60.865 164 61,400 163 57,039 163 58,378 Schools 81 38,835 84 39,815 85 48,386 85 53,679 81 57,027 84 44,187 84 45,328 85 45,545 85 41,176 83 36,039 lndlrltnal special 1 42,574 1 32,934 1 44,457 1 44,051 1 40,448 1 20,439 Consumed In production 18 28,699 18 26,223 17 32,604 13 22,728 12 19.266 12 18,665 12 19.264 12 17,338 9 9,580 8 9.652 Rural water 1 24,798 1 22,824 1 23,854 1 28,621 1 25,930 1 21,530 1 22,993 1 21,915 1 23,384 1 25,624 HospHats 15 18,723 13 20,488 12 18,503 10 15,674 10 17,896 9 26,482 10 32.184 9 31,858 9 33,728 9 35,132 Religious/non profit 40 6,913 39 7,312 39 5,569 38 5,690 38 5,399 37 4,810 37 4,973 37 4,988 36 5,224 36 4,749 Other taxable deductions 4 8,023 699 Engineering studies 8 5,327 8 8,176 8 5,266 7 3,754 8 6,104 8 6,822 8 5,095 4,807 7 4,573 7 4,772 Providing taxable service 2 4,663 2 4,869 2 5,494 2 4,827 2 6,118 2 3,495 1 3,561 3,167 1 3,921 1 3,347 Sale of component parts 8 5,748 8 5,200 8 5,851 8 5,454 8 5,726 6 5,972 8 6,850 3,900 4 3,129 4 2,917 Fire hydrant 3 1,147 2 1,032 3 2,424 3 1,389 4 2,533 3 1,922 2 1,474 3 1,727 3 1,790 lndustnal consum@d In production 3 3,230 2,314 3 4,083 3 3.260 3 3,543 3 4,417 3 3,588 3 2,388 3 1,930 3 1,962 Sales of farm equipment 1 258 205 1 213 1 58 1 83 1 107 19,971 1,854,091 19,893 1,111,179 19,117 1,970,202 19,954 2,065,759 19,937 1,754,027 20,011 1,793,771 1 48 1 53 1 54 1 104 20,111 1,801,577 20,153 1,779,999 20,193 1,717,766 20,192 1,753,343 WatH Rate Schedul•: Monthty meter charge (5181 3.75 4.44 4.51 $4.60 $4.74 $4 88 $5.03 $5.20 $5.36 $5.52 Commodity charge (per 000 gal)' 0-2000 gal. 2 54 2.34 2.55 $3.77 $3.88 $4 04 $4.24 $4.45 $4.48 $4.77 2001 -10,000 gal 2.31 Over 10,000 gal. 2.07 Excess use charge 4.68 5.10 $7.54 $7.76 $8 08 $8.48 $8 90 $9.16 $9 54 W.stewater Rate Schedule: Monthl'f base charge 3.51 6.31 6.42 $6 57 $6.77 $8.97 $7.11 $7.22 S7.36 SHI UnH cost (per 000 gal.)· 2.63 2.88 3 08 $4.48 $4.61 $4.79 $4.94 $5 01 SS.19 U~9 Water sold Is expressed In thousands of gaTions. Number of Accounts blRed ts the annual number of blmngs for each class divided by 12. Monthl'f meter charge Increases Wth th• size of the meter. Residential Wastewater ts calculated based on Vi/Inter Quarter water consumption. other accounts ere based on monthty water consumption. 2008 Water Consumption Rate Structure changed from a decreasing tier structure to one rate and Excess Use Charge Yttllch Is doubte the consumption rate Source: City of Safina Water Customer Accounttng Office. 113 Schedule 12 City of Salina, Kansas Ratio of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-T:tee Activities General General Water Percentage Obligation Loans Capital Temporary Obligation Revenue Loans Temporary Total Primary of Personal Fiscal Year Bonds Pa:i:able Lease Notes Bonds Bonds Pa:i:able Notes Government Income PerCaE!ita 2008 $29,869,930 $ $ $ 5,005,000 $2,780,069 $ 3,030,000 $ 6,428,759 $ $ 47, 113,758 2.5% $1,014.12 2009 $ 52,067,590 $ $ $ $2,320,000 $ 2,320,000 $ 5,862,516 $ $ 62,570,106 3.5% $1,346.09 2010 $ 53, 120,952 $ $ $ 2,500,000 $8,614,576 $ 1,580,000 $ $ $ 65,815,528 3.8% $1,425.20 2011 $ 55,225,670 $ $ $ 3,400,000 $7,417,907 $16,193,925 $ $ $ 82,237,502 4.3% $1,723.80 2012 $ 49, 109,575 $ $ $ 1,485,000 $9,613,926 $15,850,228 $ $ $ 76,058,729 3.8% $1,583.07 2013 $49,631,797 $ $ $ 3,800,000 $8,519,799 $15,226,532 $ $ $ 77,178,128 3.7% $1,613.05 2014 $ 50,033,555 $ $176,235 $ 5,000,000 $9,587,351 $14,592,836 $ 6,208,102 $ $ 85,598,079 4.1% $1,788.25 2015 $ 50,840,632 $ $479,366 $ 5,995,000 $8,539,773 $13,949,139 $ 5,753,620 $ $ 85,557,530 4.1% $1,789.42 2016 $51,816,399 $12,157,127 $321,174 $11,505,000 $7,640,381 $13,285,443 $ 7,432,024 $ $ 104,157,548 5.0% $2,200.39 2017 $ 55,994,305 $12, 171,090 $157,868 $ 6,811,742 $6,520,433 $12,606,747 $ 8,862,810 $ $ 103,124,995 4.9% $2,194.43 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 114 Schedule 13 City of Salina, Kansas Ratio of Net General Bonded Debt Outstanding Last Ten Fiscal Years General Bonded Debt Outstandin9 General Percentage of Obligation Temporary Less Debt Net General Actual Taxable Fiscal Year Bonds Capital Lease Notes Total Service Fund Bonded Debt Value of Per Capita 2008 $ 32,649,999 $ $ 5,005,000 $ 37,654,999 $ 792,744 $ 36,862,255 8.3% $ 793.45 2009 $ 54,387,590 $ $ $ 54,387,590 $ 735,291 $ 53,652,299 11.9% $1, 154.23 2010 $61,735,528 $ $ 2,500,000 $ 64,235,528 $ 571,873 $ 63,663,655 14.2% $1,378.60 2011 $ 62,443,577 $ $ 3,400,000 $ 65,843,577 $ 1,236,026 $64,607,551 14.4% $1,354.26 2012 $ 58, 723,501 $ $ 1,485,000 $ 60,208,501 $ 582,412 $ 59,626,089 13.2% $1,241.05 2013 $58,151,596 $ $ 3,800,000 $61,951,596 $ 707,763 $ 61,243,833 13.5% $1,280.02 2014 $ 59,620,906 $ 176,235 $ 5,000,000 $64,797,141 $ 407,864 $ 64,389,277 14.1% $1,345.17 2015 $ 59,380,405 $ 479,366 $ 5,995,000 $65,854,771 $ 745,339 $ 65, 109,432 14.1% $1,361.75 2016 $ 59,456, 780 $ 321,174 $11,505,000 $ 71,282,954 $ 1,248,914 $ 70,034,040 14.8% $1,479.51 2017 $62,514,738 $ 157,868 $ 6,811,742 $ 69,484,348 $ 1,509,863 $67,974,485 14.4% $1,446.45 Source: City of Salina Comprehensive Annual Financial Reports, 2008 • 2017 115 Schedule 14 City of Salina, Kansas Direct and Overlapping Governmental Activities Debt As of December 31, 2017 Net General Obligation Percentage Bonded Debt Applicable to Jurisdiction Outstanding City of Salina Direct: City of Salina $ 67,974,485 100.00% Overlapping: Salina Airport Authority 22,632,000 100.00% Saline County 145,000 75.08% USO 305 123,335,000 93.63% Total Overlapping Debt 146,112,000 Total Direct and Overlapping Debt $ 214,086,485 Per Capita Direct and Overlapping debt Amount Applicable to the City of Salina $ 67,974,485 22,632,000 108,866 115,478,561 138,219,427 $ 206, 193,912 $ 4,312.51 Percentage of debt applicable to the City of Salina is based on the proportion that the assessed valuation of the City of Salina bears to the assessed valuation of the overlapping entity. Source: Saline County Clerk 116 Legal Debt Margin Calculation for 20fi Assessed Valuation Debt Limit (30% of Assessed Value) Debt applicable to limit: Total Bonded Debt Less GO Debt Attributable to Exempt Purposes Less Revenue Bonds Less Capital Leases Less Loans Payable Less Fund Balance designated for Debt Service Total Debt Applicable to Limitation Legal debt margin 2008 Debt Limit $ 133,224,043 Total net debt applicable to limit 36,862,255 Legal debt margin $ 96,361?88 Total net debt applicable to the limit as a percentage of debt limit 28% $ 473,335,124 142,000,537 $ 103,124,995 (6,520,433) (12,606,747) (157,868) (21,033,900) {1.509,863) $ 61,296,184 $ 80,704,353 2009 $ 135,400,141 53,652,299 $ 81,747,842 40% $ $ Schedule 15 City of Salina, Kansas Legal Debt Margin Last Ten Fiscal Years Fiscal Year 2010 2011 2012 134,340,263 $ 134,928,191 $ 135,421,208 58,411,185 57 747,032 49 309445 75,929,078 $ n,1811159 $ 861111,763 43% 43% 36% 117 $ $ 2013 2014 2015 2016 ZQ.11 136, 196,966 136,896,083 138,909,078 141,804,931 142,000,537 52,724,034 54 625 691 56,090,293 62,072,485 61,296, 184 831472,932 $ 82,270,392 $ 82,818,785 $ 79?32,446 s 80?04,353 39% 40% 40% 44% 43% Utility Service Fiscal Year Charges 2008 $ 14,072,513 2009 $ 14,980,874 2010 $ 16,520,055 2011 $ 17,905,056 2012 $ 19,098,626 2013 $ 17,938,288 2014 $ 18,742,029 2015 $ 19,058,855 2016 $ 19,322,077 2017 $ 19,855,033 Schedule 16 City of Salina, Kansas Pledged Revenue Coverage Last Ten Fiscal Years Water/Sewer Revenue Bonds Less Operating Net Available Expenses Revenue Principal $ 12,754,057 $ 1,318,456 $ 1,038,000 $ 12,524,390 $ 2,456,484 $ 1,276,?43 $ 13,571,098 $ 2,948,957 $ 740,000 $ 12,963,891 $ 4,941,165 $ 1,580,000 $ 13,963,941 $ 5,134,685 $ 340,000 $ 14,524,148 $ 3,414,140 $ 620,000 $ 14,002,088 $ 4,739,941 $ 630,000 $ 11,711,823 $ 7,347,032 $ 640,000 $ 13,981,811 $ 5,340,266 $ 660,000 $ 14,720, 148 $ 5,134,885 $ 675,000 Source: City of Salina Comprehensive Annual Financial Reports, 2008 -2017 City of Salina Debt Service Schedules 118 Interest Coverage $ 515,459 85% $ 455,294 142% $ 91,450 355% $ 496,760 238% $ 596,992 548% $ 590, 191 282% $ 577,791 392% $ 565, 191 610% $ 549, 191 442% $ 529,391 426% Per Capita Personal Personal Income, Income Salina Fiscal Year Population (Saline County) (interpolated) 2008 46,458 $ 40,351 $ 1,874,626,758 2009 46,483 $ 38,392 $ 1,784,575,336 2010 46,180 $ 37,880 $ 1,749,298,400 2011 47,707 $ 40,512 $ 1,932,705,984 2012 48,045 $ 41,762 $ 2,006,455,290 2013 47,846 $ 43,078 $ 2,061, 109,988 2014 47,867 $ 43,736 $ 2,093,511,112 2015 47,813 $ 44,065 $ 2, 106,879,845 2016 47,336 $ 44,230 $ 2,093,647,612 2017 46,994 $ 44,732 $ 2, 102, 135,608 Sources: Population: Kansas Division of the Budget. Employment: Kansas Department of Labor Schedule 17 City of Salina, Kansas Demographic and Economic Statistics Last Ten Fiscal Years Unemployment Labor Force, USD 305 Rate City of Salina Headcount 3.8% 26,343 7,348 6.0% 26,769 7,432 6.7% 26,379 7,346 6.7% 26,258 7,289 6.3% 26,185 7,305 5.1% 26,441 7,305 5.3% 26,303 7,388 3.9% 26,170 7,369 3.3% 27,684 7,386 2.7% 27,684 7,176 Personal income for Salina is derived from the population and per capita personal income for Saline County Per Capita Personal income as reported by the Bureau of Economic Analysis 2017 Per Capita Personal Income staff projection 2008 -2017 Employment City of Salina USD305 headcount and free and reduced lunch data derived from Kansas Department of Education. Percentage As a% of Free and Per Capita .5 per capita Reduced City .5 cent cent sales personal Lunch sales tax Tax income 56.3% $ 5,177,461 $ 111.44 0.276% 58.7% $4,965,147 $ 106.82 0.278% 57.8% $4,803,553 $ 104.02 0.275% 58.7% $5,076,751 $ 106.42 0.263% 59.1% $5,241,205 $ 109.09 0.261% 60.7% $ 5,326,723 $ 111.33 0.258% 61.3% $ 5,555,601 $ 116.06 0.265% 61.8% $5,670,040 $ 118.59 0.269% 68.7% $5,727,260 $ 120.99 0.274% 33.4% $5,755,869 $ 122.48 0.274% Increase in per capita Sales Tax (10 years) 14.3% Increase in per capita Personal Income 20.5% Free and Reduced Lunch percentage is an average of the percentages for each building reported. School Data is reported at beginning of school year, eg 2017-2018 school year is reported as 2017. 119 Employer Salina Regional Health Center Schwan's Global Supply Chain Unified School District No 305 Great Plains Manufacturing Exide Technologies City of Salina REV Group Salina Vortex Wal mart Blue Philips Lighting Company Lock/line Raytheon Aircraft Eldorado National Total Schedule 18 City of Salina, Kansas Principal Employers Current Year and Nine Years Ago Type of Business Health Care Frozen Pizza Manufacturing Public School System Agricultrual & Landscaping Equipment Automotive Battery Manufacturer City Government Manufacturing Manufacturing Retail Fluorescent Lamps Cellular Phone Insurance Aircraft Manufacturing Susses/Recreational Vehicle Employees 1,082 1,850 935 650 800 493 600 420 357 255 6,360 Source: Salina Chamber of Commerce Most recent Official Statement (EMMA) 120 2008 Rank #N/A 1 2 4 3 6 5 7 8 9 2017 Percentage Percentage of Labor of Labor Force Employees Rank Force 4.1% 1,800 1 6.5% 7.0% 1,700 2 6.1% 3.5% 1,500 3 5.4% 2.5% 1,100 4 4.0% 3.0% 600 5 2.2% 1.9% 425 6 1.5% 300 7 1.1% 250 8 0.9% 250 9 0.9% 2.3% 230 10 0.8% 1.6% 1.4% 1.0% 24.1% 6,355 23.0% APPENDIX D 2018 Unaudited Financial Statements The following report provides unaudited revenues, expenditures and fund balances for the City for fiscal year ending December 31, 2018 prepared on a cash basis. This information has been provided by City staff and is believed to be accurate but is subject to revision both before and during the auditing process. Budgeted Funds .-2018 l!~~get 2018 Actuals Ending Fund Balance Revenues Expenditures Net Change Revenues Expenditures Net Change 12/31/2018 Target Balance Budgeted Funds: Tax Funds General 100 $ 42,707,172 $ (42,233,141) $ 474,031 $ 40,580,519 $ (41,459,518) $ (878,999) $ 4,379,422 $ Debt Service 500 $ 6,729,847 $ (7,182,981) $ (453,134) $ 6,600,125 $ (7,182,981) $ (582,856) $ 612,285 $ Special Revenue Funds Sales Tax Capital 210 $ 8,583,025 $ (8,877,712) $ (294,687) $ 8,418,773 $ (8,578,796) $ (160,023) $ 1,662,520 $ Sales Tax EcoDevo 220 $ 334,818 $ (458,840) $ (124,022) $ 342,525 $ (452,073) $ (109,548) $ 892,555 $ Tourism 240 $ 1,814,240 $ (1,814,240) $ -$ 1,814,246 $ (1,814,240) $ 5 $ 852 $ Special Gas 270 $ 1,572,420 $ (1,433,202) $ 139,219 $ 1,655,017 $ (1,365,885) $ 289,132 $ 1,038,592 $ Arts & Humanities 200 $ 1,007,850 $ (1,048,635) $ (40,785) $ 807,073 $ (995,681) $ (188,607) $ (83,294) $ Business Improvement District 230 $ 89,190 $ (89,190) $ -$ 85,357 $ (93,225) $ (7,868) $ 5,436 $ Special Parks 2SO $ 193,209 $ (194,000) $ (791) $ 193,209 $ (194,984) $ (1,775) $ 122,446 $ Special Alcohol 260 $ 216,086 $ (216,086) $ 0 $ 191,746 $ (191,676) $ 70 $ 234 $ Neighborhood Parks 280 $ 10,500 $ -$ 10,500 $ 2,652 $ -$ 2,652 $ 24,251 $ TPEC 290 $ 700,000 $ (762,332) $ (62,332) $ 802,669 $ (762,968) $ 39,701 $ 97,681 $ Enterprise Funds Sanitation 300 $ 3,050,926 $ (2,883,597) $ 167,329 $ 2,952,161 $ (3,033,907) $ (81,746) $ 1,462,610 $ Solid Waste 320 $ 2,897,310 $ (2,873,163) $ 24,147 $ 3,152,476 $ (2,564,378) $ 588,098 $ 4,639,998 $ Golf 340 $ 840,840 $ (954,700) $ (113,860) $ 876,516 $ (950,675) $ (74,159) $ 41,873 $ Water/Waste1Nater 370 $ 20,626,800 $ (21,341,199) $ (714,399) $ 18,197,174. $ (17,924,248) $ 272,925 $ 11,664,031 •s .Internal Service Funds Central Garage 450 $ 1,434,390 $ (1,435,015) $ (625) $ 1,524,203 $ (1,491,671) $ 32,533 $ 54,128 $ Workers' Compensation 410 $ 252,500 $ (281,306) $ (28,806) $ 422,143 $ (254,669) $ 167,474 $ 957,863 $ Health 420 $ 7,054,200 $ (6,402,432) $ 651,769 $ 7,062,242 $ (5,960,949) $ 1,101,293 $ 3,152,265 $ • The City is annually billed for Kansas Water Protection Fees and Clean Water Fees. The expense is funded by a combination of customer fees on each water bill and City budget allocation. The fee had not been paid since 2015. $494K had been budgeted over the 4 year period in question, and $411K was recently expensed against the 2018 budget. It is possible that an interest penalty may be imposed. The Water/Wastewater Fund balance was impacted by this catch-up payment. 8,500,000 200,000 750,000 50,000 500,000 100,000 50,000 500,000 500,000 100,000 5,000,000 100,000 750,000 1,500,000 Budget to Actuals 2018 Actuals 2018 Budget 2018 Budget Variance 2018 % Budget 2017 Actuals 2017 Budget 2017 Budget Variance 2017 % Budget Budgeted Funds: Governmental Funds Over(Under) ~~~ General 100 Revenues: Property Taxes s 8,608,836 s 8,891,050' s (282,214) 96.83% s 9,100,808 s 9,274,492 s (173,684) 98.13% Motor Vehicle Tax s 1,120,631 s 1,090,219 s 30,412 102.79% s 1,016,439 s 991,987 s 24,452 102.46% Sales and Use Tax s 13,101,634 s 13,427,924 s (326,290) 97.57% s 12,906,032 s 12,805,000 s 101,032 100.79% Franchise Fees s 6,644,880 s 6,788,304 s (143,424) 97.89% s 5,215,264 s 6,614,540 s (1,399,276) 78.85% Other Taxes s 191,676 s 192,092 s (416) 99.78% s 202,255 s 190,092 s 12,163 106.40% Grants s 206,741 s 237,000 s (30,259) 87.23% s 136,055 s 180,000 s (43,945) 75.59% Investment Income s 52,956 s 21,668 s 31,288 244.40% s 9,897 s 12,000 s (2,103) 82.47% EMS s 3,137,571 s 3,445,200 s (307,629) 91.07% s 3,050,944 s 2,985,000 s 65,944 102.21% Municipal Court s 1,148,027 s 1,407,366 s (259,339) 81.57% s 979,336 s 1,400,000 s (420,664) 69.95% Fees and Charges s 2,159,621 s 2,821,085 s (661,464) 76.55% s 2,591,785 s 2,645,327 s {53,542) 97.98% lnterfund Transfers s 3,841,500 s 3,935,089 s (93,589) 97.62% s 4,626,500 s 4,635,089 s (8,589) 99.81% Other Revenues s 366,447 s 450,175 s (83,728) 81.40% s 1,579,350 s 171,739 s 1,407,611 919.62% Total Revenues $ 40,580,519 $ 42,707,172 $ (2,126,653) 95.02% $ 41,414,664 $ 41,905,266 $ (490,602) 98.83% Ex2enditures: Personnel Services $ 25,647,962 $ 26,013,269 $ (365,307) 98.60% $ 24,634,426 $ 25,625,354 $ (990,928) 96.13% Employee Benefits $ 4,080,834 $ 4,219,834 $ (138,999) 96.71% $ 3,879,284 $ 4,295,799 $ (416,515) 90.30% Commodities $ 2,119,108 $ 2,072,151 s 46,958 102.27% $ 1,884,824 $ -2,120,294 $ (235,470) 88.89% Contractual Services $ 7,813,648 $ 7,476,058 $ 337,590 104.52% $ 7,386,231 $ 7,393,607 $ (7,376) 99.90% Capital Outlay $ 972,688 $ 1,070,779 $ {98,091) 90.84% $ 843,418 $ 1,010,925 $ (167,507) 83.43% lnterfund Transfers $ 720,000 $ 810,000 $ {90,000) 88.89% $ 810,000 $ 810,000 $ 100.00% Reserves $ 105,276 $ 571,051 $ (465,775) 18.44% $ 46,971 $ 40,000 $ 6,971 117.43% Total Expenditures $ 41,459,518 $ 42,233,141 $ (773,624) 98.17% $ 39,485,153 $ 41,295,979 $ (1,810,826) 95.62% Arts & Humanities 200 Revenues: Fees and Charges $ 309,881 $ 347,200 $ {37,319) 89.25% $ 390,648 $ 370,350 $ 20,298 105.48% Transfers lnterfund $ 400,000 $ 525,000 $ (125,000) 76.19% $ 500,000 $ 500,000 $ 100.00% Foundation Support $ 97,065 $ 133,650 $ (36,585) 72.63% $ 39,719 $ 110,000 $ (70,281) 36.11% Investment Income $ 127 $ 2,000 $ {l,873) 6.37% $ 93 $ 2,000 $ (1,907) 4.66% Other Revenues $ -$ -$ $ 745 $ 500 $ 245 149.00% Total Revenues $ 807,073 $ 1,007,850 $ 1200,mJ 80.08% $ 931,206 $ 982,850 $ {51,644) 94.75% Ex2enditures: Personnel Services $ 482,942 $ 464,604 $ 18,338 103.95% $ 467,045 $ 370,241 $ 96,804 126.15% Commodities $ 6,960 $ 10,206 $ (3,246) 68.20% $ 6,577 $ 8,370 $ {1,793) 78.58% Contractual Services $ 160,055 $ 169,478 $ (9,423) 94.44% $ 160,726 $ 195,450 $ (34,724) 82.23% Capital Outlay $ 23,869 $ 17,500 $ 6,369 136.40% $ 17,985 $ 17,500 s 485 102.77% Transfer lnterfund $ -$ -$ $ -$ 75,377 s (75,377) 0.00% Smoky Hill River Fest! 7110 $ 321,854 $ 386,847 $ (64,993) 83.20% s 328,426 $ 350,050 $ (21,624) 93.82% Total Expenditures $ 995,681 $ 1,048,635 $ (52,954) 94.95% $ 980,759 $ 1,016,988 $ {36,229) 96.44% Budget to Actuals 2018 Actuals 2018 Budget 2018 Budget Variance 2018 % Budget 2017 Actuals 2017Budget 2017 Budget Variance !017 % Budget Budgeted Funds: Over(Under) Over(Under) Sanitation 300 Revenues: Sanitation Fees $ 2,941,279 $ 3,048,426 $ (107,147) 96.49% $ 2,811,233 $ 2,913,179 $ (101,946) 96.50% Investment Income $ 10,882 $ 2,500 $ 8,382 435.29% $ 5,793 $ -$ 5,793 Total Revenues $ 2,952,161 $ 3,050,926 $ (98,765) 96.76% $ 2,817,026 $ 2,913,179 $ (96,153) 96.70% ExQenditures: Personnel Services $ 800,318 $ 712,490 $ 87,828 112.33% $ 656,262 $ 832,950 $ (176,688) 78.79% Employee Benefits $ 154,861 $ 169,289 $ (14,428) 91.48% $ 139,919 $ 172,406 $ (32,487) 81.16% Commodities $ 327,939 $ 268,717 $ 59,222 122.04% $ 271,926 $ 355,925 $ (83,999) 76.40% Contractual Services $ 994,285 $ 958,665 $ 35,620 103.72% $ 82B,011 $ 198,110 $ 629,901 417.96% Capital Outlay $ 345,005 $ 362,936 $ (17,931) 95.06% $ 57,159 $ 374,625 $ (317,466) 15.26% lnterfund Services $ 411,500 $ 411,500 $ 376,500 $ 996,500 $ (620,000) 37.78% Total Expenditures $ 3,033,907 $ 2,883,597 $ 150,310 105.21% $ 2,329,777 $ 2,930,516 $ (600,739) 79.50% Golf 340 Revenues: Fees and Charges $ 851,493 $ 814,840 $ 36,653 104.50% $ 848,160 $ 848,950 $ (790) 99.91% Sales Tax $ 24,478 $ 26,000 $ (1,522) 94.15% $ 25,656 $ 25,000 $ 656 102.63% Investment Income $ 545 $ -$ 545 $ 344 $ -$ 344 Total Revenues $ 876,516 $ 840,840 $ 35,676 104.24% $ 874,100 $ 873,950 $ 210 100.02% ExQenditures: Personnel Services $ 444,954 $ 447,000 $ (2,046) 99.54% $ 374,447 $ 366,868 $ 7,579 102.07% Employee Benefits $ 60,081 $ 64,000 $ (3,919) 93.88% $ 46,959 $ 40,446 $ 6,513 116.10% Commodities $ 296,119 $ 296,000 $ 119 100.04% $ 318,219 $ 292,850 $ 25,369 108.66% Contractual Services $ 124,790 $ 126,000 $ (1,210) 99.04% $ 116,655 $ 117,900 $ (1,245) 98.94% Capital Outlay $ 24,731 $ 21,700 $ 3,031 113.97% $ 1,826 $ -$ 1,826 lnterfund Transfers $ $ $ -$ 83,289 $ (83,289) 0.00% Total Expenditures $ 950,675 $ 954,700' $ (4,025) 99.58% $ 858,107 $ 901,353 $ (43,246) 95.20% Central Garage 4SO lnterfund Services $ 1,517,390 $ 1,416,850 $ 100,540 107.10% $ 1,344,331 $ 1,730,000 $ (385,669) 77.71% Other Reimbursements $ 6,145 $ 17,500 $ (11,355) 35.11% $ 6,482 $ 17,500 $ (11,018) 37.04% Investment Income $ 668 $ 40 $ 628 1670.15% $ -$ 40 $ (40) 0.00% Total Revenues $ 1,524,203 $ 1,434,390 $ 89,813 106.26% $ 1,350,813 $ 1,747,540 $ (396,n7) 77.30% ExQenditures: Personnel Services $ 250,648 $ 235,860 $ 14,788 106.27% $ 221,700 $ 234,610 $ (12,910) 94.50% Employee Benefits $ S2,662 $ 66,700' $ (14,038) 78.95% $ 46,997 $ 60,724 $ (13,727) 77.39% Commodities $ 1,161,334 $ 1,053,955 $ 107,379 110.19% $ 987,423 $ 1,340,730 $ (353,307) 73.65% Contractual Services $ 27,027 $ 48,000 $ (20,973) 56.31% $ 43,461 $ 55,420 $ (11,9S9) 78.42% Capital Outlay $ -$ 20,500 $ (20,500) 0.00% $ 12,174 $ 66,000 $ (53,826) 18.45% lnterfund Services $ -$ 10,000 $ (10,000) 0.00% $ -$ 10,000 $ (10,000) 0.00% Total Expenditures $ 1,491,671 $ 1,435,015 $ 56,656 103.95% $ 1,311,755 $ 1,767,484 $ (455,729) 74.22% CONTINUING DISCLOSURE UNDERTAKING Sll,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2019-A $6,085,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 DATED APRIL 24, 2019 This CONTINUING DISCLOSURE UNDERTAKING dated as of April 24, 2019 (the "Continuing Disclosure Undertaking"), is executed and delivered by the City of Salina, Kansas (the "Issuer"). RECITALS 1. This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance of the above-described bonds and notes (collectively, the "Obligations") which are being issued simultaneously herewith as of April 24, 2019, pursuant to the Bond Resolution and Note Resolution (collectively, the "Resolution") adopted by the governing body of the Issuer. 2. The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Obligations and in order to assist the Participating Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"). The Issuer is the only "obligated person" with responsibility for continuing disclosure hereunder. The Issuer covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Continuing Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 2 of this Continuing Disclosure Undertaking, which may include the Issuer's CAFR, so long as the CAFR contains the financial information and operating data described in Section 2(a)(l) and (2). "Beneficial Owner" means any registered owner of any Obligations and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Obligations (including persons holding Obligations through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Obligations for federal income tax purposes. "Business Day" means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal office or designated payment office of the paying Continuing Disclosure Undertaking agent or the Dissemination Agent is located are required or authorized by law to remain closed, or ( c) a day on which the Securities Depository or the New York Stock Exchange is closed. "CAFR" means the Issuer's Comprehensive Annual Financial Report, if any. "Dissemination Agent" means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to this Continuing Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation. "EMMA" means the Electronic Municipal Market Access system for municipal secunt1es disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of (a) or (b) in this definition; provided however, the term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. "Fiscal Year" means the 12-month period beginning on January 1 and ending on December 31 or any other 12-month period selected by the Issuer as the Fiscal Year of the Issuer for financial reporting purposes. "Material Events" means any of the events listed in Section 3 of this Continuing Disclosure Undertaking. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "Participating Undenvriter" means any of the original underwriter(s) of the Obligations required to comply with the Rule in connection with the offering of the Obligations. Section 2. Provision of Annual Reports. (a) The Issuer shall, not later than 180 days after the end of the City's Fiscal Year, commencing with the Fiscal Year ending December 31, 2018, file with the MSRB, through EMMA, the following financial information and operating data (the "Annual Report"): (1) The audited financial statements of the Issuer for the prior Fiscal Year, prepared on a modified accrual basis of accounting other than GAAP. A more detailed explanation of the accounting basis is contained in the Official Statement related to the Obligations. If audited financial statements are not available by the time the Annual Report is required to be provided pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Obligations, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. Continuing Disclosure Undertaking 2 (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement related to the Obligations, as described in Exhibit A, in substantially the same format contained in the final Official Statement with such adjustments to formatting or presentation determined to be reasonable by the Issuer. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been provided to the MSRB and are available through EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3, and the Annual Report deadline provided above shall automatically become 180 days after the end of the Issuer's new Fiscal Year. (b) Pursuant to Section (d)(3) of the Rule, the provisions of Section 2 hereof shall not apply to the Notes, because they have a stated maturity of less than 18 months. (c) The Annual Report shall be filed with the MSRB in such manner and format as is prescribed by the MSRB. Section 3. Reporting of Material Events. Not later than 10 Business Days after the occurrence of any of the following events, the Issuer shall give, or cause to be given to the MSRB, through EMMA, notice of the occurrence of any of the following events with respect to the Obligations ("Material Events"): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Obligations, if material; (11) rating changes; Continuing Disclosure Undertaking 3 (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation of a merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of the trustee, if material; (15) incurrence of a Financial Obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties. Except as provided in Section 2(b) hereof, if the Issuer has not submitted the Annual Report to the MSRB by the date required in Section 2(a), the Issuer shall send a notice to the MSRB of the failure of the Issuer to file on a timely basis the Annual Report, which notice shall be given by the Issuer in accordance with this Section 3. Section 4. Termination of Reporting Obligation. The Issuer's obligations under this Continuing Disclosure Undertaking shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Obligations. If the Issuer's obligations under this Continuing Disclosure Undertaking are assumed in full by some other entity, such person shall be responsible for compliance with this Continuing Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Obligations, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3. Section 5. Dissemination Agents. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Continuing Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Continuing Disclosure Undertaking. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Undertaking, the Issuer may amend this Continuing Disclosure Undertaking and any provision of this Continuing Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Undertaking. In the event of any amendment or waiver of a provlSlon of this Continuing Disclosure Undertaking, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact Continuing Disclosure Undertaking 4 on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (1) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Continuing Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Continuing Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that required by this Continuing Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that specifically required by this Continuing Disclosure Undertaking, the Issuer shall have no obligation under this Continuing Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Default. If the Issuer fails to comply with any provision of this Continuing Disclosure Undertaking, any Participating Underwriter or any Beneficial Owner of the Obligations may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Continuing Disclosure Undertaking. A default under this Continuing Disclosure Undertaking shall not be deemed an event of default under the Resolution or the Obligations, and the sole remedy under this Continuing Disclosure Undertaking in the event of any failure of the Issuer to comply with this Continuing Disclosure Undertaking shall be an action to compel performance. Section 9. Beneficiaries. This Continuing Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Participating Underwriter, and the Beneficial Owners from time to time of the Obligations, and shall create no rights in any other person or entity. Section 10. Severability. If any provision in this Continuing Disclosure Undertaking, the Resolution or the Obligations shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11. Electronic Transactions. The arrangement described herein may be conducted and related documents may be sent, received, or stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 12. Governing Law. This Continuing Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Kansas. [Remainder of Page Intentionally Left Blank.] Continuing Disclosure Undertaking 5 -:-; ._:·-·.· caused this Continuing Disclosure Undertaking to be CITY OF SALINA, KANSAS Mayor City Clerk Continuing Di scl osure Undertaking S-1 EXHIBIT A TO CONTINUING DISCLOSURE UNDERTAKING FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial information and operating data contained in the following sections and tables contained in Appendix A of the final Official Statement (with such modifications to the formatting and general presentation thereof as deemed appropriate by the Issuer) relating to the Obligations: • Financial Overview of the City • FINANCIAL INFORMATION CONCERNING THE CITY -Assessed Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Estimated Actual Valuation • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Collections • FINANCIAL INFORMATION CONCERNING THE CITY -Tax Levies • FINANCIAL INFORMATION CONCERNING THE CITY -Largest Taxpayers EXCERPT OF MINUTES OF AMEETING OF THE GOVERNING BODY OF THE CITY OF.SALINA, KANSAS HELD ON APRIL 1, 2019 The governing body met in regular session at the usual meeting place in the City, at 4:00 p.m., the following members being present and participating, to-wit: Present: Mayor Trent W. Davis, M.D., Commissioners Joe Hay, Jr., Melissa Rose Hodges and Mike Hoppock. Absent: Commissioner Karl Ryan. The Mayor declared that a quorum was present and called the meeting to order. ************** (Other Proceedings) The Finance Director reported that pursuant to the Notice of Sale duly given, bids for the purchase of General Obligation Temporary Notes, Series 2019-1, dated April 24, 2019, of the City were received on April 1, 2019. A tabulation of said bids is set forth as EXHIBIT A hereto. The Finance Director reported that staff determined that the bid of Country Club Banlc, Prairie Village, Kansas, was the best bid for the Notes, a copy of which is attached hereto as EXHIBIT B. Thereupon, there was presented a Resolution entitled: A RESOLUTION AUTHORIZING AND DIRECTING THE ISSUANCE, SALE AND DELIVERY OF GENERAL OBLIGATION TEMPORARY NOTES, SERIES 2019-1, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX, IF NECESSARY, FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID NOTES AS THEY BECOME DUE; MAKING CERTAIN COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED THEREWITH. Thereupon, Commissioner Hoppock moved that said Resolution be adopted. The motion was seconded by Commissioner Hay. Said Resolution was duly read and considered, and upon being put, the motion for the adoption of said Resolution was carried by the vote of the governing body, as follows: Aye: Mayor Trent W. Davis, M.D., Commissioners Joe Hay, Jr. and Mike Hoppock Nay: Commissioner Melissa Rose Hodges Thereupon, the Mayor declared the Resolution duly adopted and the Resolution was then duly numbered Resolution No. 19-7692 and was signed by the Mayor and attested by the Clerk. ************** On motion duly made, seconded and carri d. the meeting thereupon adjourned. CERTIFICATE (Signature Page to Excerpt of Minutes -2019-1 Notes) EXHIBIT A BID TABULATION SERIES 2019-1 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES A-1 BID RESULTS CITY OF SALINA, KANSAS $6,085,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 Bidder Name NIC Country Club Bank 1.810518 Jefferies LLC 1.948992 Hutchinson, Shockey, Erley & Co. 1.963842 Commerce Bank 2.1137875 EXHIBITB BID OF PURCHASER B-1 TO: Sh:mdi Wicks, Clerk City of Salina, Knnsas OFFJCIALDID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERll!S 2019-1 April I, 2019 For S6,0SS,ODO• princip:il amount of General Obligation Tcmpor.uy Notes, Series 2019-1, of the City of Salina, Knnsns, to be dated April 24, 2019, as described in the Notice of Sale (the "Notice") dated March 25, 2019, s:iid Noles 10 bear interest ns follows: Maturity Ml!!..! 2020 Prlnclp:il Amount' S6,0SS,OOO Interest Bate J ... !t.'8_% •Subject to clta11ge: see the Notice. the undersigned will pay the total principal amount of the Notes, plus a premium or less 11 discount as set forth below, plus nccrucd interest to the date of delivery. Principal Amount ..................................................................................................................................................... S6,085,000 00' Less Discount (not to exceed S30,42S or0.50%) .................................................................................... { J ':i, 6'\'i.75 t Plus Premium (if any) ................................................................................................................... ........ 0 .'22_ Totnl Purch:isc Price ................................................................................................................................ $--1L.-r:J10_,::J.J)~ Totnl interest cost lo maturity at the rates specified ................................................................................ S Cf 9~ Net interest cost .......................................................................................................................... ii''i'c' S:: l l.i (cf :J I~ .;;l. 0 D The Bidder elects to purch:ise Municipnl Bond Insurance from: [Assured) [AGM) [BAM] I J. Circle one or complete blank. This proposal is subject to nil terms nnd conditions contained in the Notice, and if the undersigned is the Successful Bidder, the undersigned will comply with 1111 of the pro\isions contained in the Notice. 111e ncccpt:mce of this proposal by the Issuer sh:ill constitute n contract between the Issuer nnd 1hc Succcssrul Bidder for purposes of complying with Ruic 15c2-12 of the Securities :md Exchange Commission :ind n bond purch:isc agreement for purposes of the laws of the Stale of Kansas. (LIST ACCOUNT MCMBERS ON REVC:RSE) ACCEPTANCE Pursuant to action duly t:ikcn by the Governing Body oflhc City of Salina, Kans:is. the above propos;il is hereby accepted on April I, 2019. Attest: ' ~ lf.2t_{)/A( Clerk NOTE: No additions or ahcrations in the above proposal form sh:ill be made, :ind any erasures may cause rejection of any bid. Sealed bids mny be filed with the Clerk. Shandi Wicks, 300 West Ash, Sruina, Kans:is 67402, facsimile bids m:iy be filed with the Clerk, Fnx No. (78S) 309·5711 or electronic bids may be submined vfa PARITY2', at or prior 10 12:00 p.m .. Central Time, on April I, 2019. Any bid received :if\er such time will not be considered. RESOLUTION N0.19-7692 OF THE CITY OF SALINA, KANSAS ADOPTED APRIL 1, 2019 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 Section 101. Section 201. Section 202. Section 203. Section 204. Section 205. Section 206. Section 207. Section 208. Section 209. Section 210. Section 211. Section 212. Section 213. Section 301. Section 302. Section 303. Section 401. Section 402. Section 501. Section 502. Section 503. Section 504. Section 505. Section 506. Section 507. Section 601. Section 602. RESOLUTION TABLE OF CONTENTS ARTICLE I DEFINITIONS Definitions of Words and Tenns ............................................................................... 2 ARTICLE II AUTHORIZATION AND DETAILS OF THE NOTES Authorization of the Notes ........................................................................................ 8 Description of the Notes ............................................................................................ 9 Designation of Paying Agent and Note Registrar ..................................................... 9 Method and Place of Payment of the Notes .............................................................. 9 Payments Due on Saturdays, Sundays and Holidays .............................................. 10 Registration, Transfer and Exchange ofNotes ........................................................ 10 Execution, Registration, Authentication and Delivery of Notes ............................. 11 Mutilated, Lost, Stolen or Destroyed Notes ............................................................ 12 Cancellation and Destruction of Notes Upon Payment. .......................................... 12 Book-Entry Notes; Securities Depository ............................................................... 12 Nonpresentment ofNotes ........................................................................................ 13 Preliminary and Final Official Statement.. .............................................................. 14 Sale of the Notes ...................................................................................................... 14 ARTICLE ill REDEMPTION OF NOTES Redemption ofNotes ............................................................................................... 14 Selection of Notes to be Redeemed ......................................................................... 14 Notice and Effect of Call for Redemption ............................................................... 15 ARTICLE IV SECURITY FOR NOTES Security for the Notes .............................................................................................. 17 Levy and Collection of Annual Tax ........................................................................ 17 ARTICLE V ESTABLISHMENT OF FUNDS AND ACCOUNTS DEPOSIT AND APPLICATION OF NOTE PROCEEDS Creation of Funds and Accounts ............................................................................. 17 Deposit of Note Proceeds ........................................................................................ 17 Application of Moneys in the Improvement Fund .................................................. 18 Substitution of Improvements; Reallocation of Proceeds ....................................... 18 Application of Moneys in Debt Service Account.. .................................................. 18 Application of Moneys in the Rebate Fund ............................................................. 19 Deposits and Investment of Moneys ....................................................................... 19 ARTICLE VI DEFAULT AND REMEDIBS Remedies ................................................................................................................. 20 Limitation on Rights of Owners .............................................................................. 20 Section 603. Section 701. Section 801. Section 802. Section 901. Section 902. Section 1001. Section 1002. Section 1003. Section 1004. Section 1005. Section 1006. Section 1007. Section 1008. Section 1009. Remedies Cumulative .............................................................................................. 20 ARTICLE VII DEFEASANCE Defeasance ............................................................................................................... 21 ARTICLE VIII TAX COVENANTS General Covenants .................................................................................................. 21 Survival of Covenants ............................................................................................. 21 ARTICLE IX CONTINUING DISCLOSURE REQUIREMENTS Disclosure Requirements ......................................................................................... 22 Failure to Comply with Continuing Disclosure Requirements ............................... 22 ARTICLE X MISCELLANEOUS PROVISIONS Annual Audit. .......................................................................................................... 22 Amendments ............................................................................................................ 22 Notices, Consents and Other Instruments by Owners ............................................. 23 Notices ..................................................................................................................... 24 Electronic Transactions ........................................................................................... 24 Further Authority ..................................................................................................... 24 Severability .............................................................................................................. 24 Governing Law ........................................................................................................ 24 Effective Date .......................................................................................................... 24 [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] 11 RESOLUTION NO. 19-7692 A RESOLUTION AUTHORIZING AND DIRECTING THE ISSUANCE, SALE AND DELIVERY OF GENERAL OBLIGATION TEMPORARY NOTES, SERIES 2019-1, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX, IF NECESSARY, FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID NOTES AS THEY BECOME DUE; MAKING CERTAIN COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED THEREWITH. WHEREAS, the City of Salina, Kansas (the "Issuer") is a municipal corporation, duly created, organized and existing under the Constitution and laws of the State; and WHEREAS, pursuant to the provisions of the laws of the State of Kansas applicable thereto, by proceedings duly had, the governing body of the Issuer has caused the following improvements (collectively, the "Improvements") to be made in the City, to-wit: Ordinance/ Improvement Pro_ject Description Resolution No. Authority Fund Deposit* Landfill Cell #20 Res. 19-7672 K.S.A. 12-2101 et seq. $2,298,567.47 Ord. 02-10071; Res North 9th Street Bridge No. 19-7677 K.S.A. 12-685 et seq. 500,000.00 Pheasant Ridge Addition No. 3 Res. 18-7633 K.S.A. 12-6a01 et seq. 530,165.28 Police Parking Res. 19-7679 K.S.A. 12-1736 et sea. 400,000.00 K.S.A. 12-63lr ands; Article 12, §5 of the Constitution of the Smokv Hill River Renewal Ord. 17-10885 State of Kansas 2,300,000.00 Total: $6,028, 732. 75 *Excludes costs of issuance. WHEREAS, the governing body of the Issuer is authorized by law to issue general obligation bonds to pay a portion of the costs of the Improvements; and WHEREAS, it is necessary for the Issuer to provide cash funds (from time to time) to meet its obligations incurred in constructing the Improvements prior to the completion thereof and the issuance of the Issuer's general obligation bonds, and it is desirable and in the interest of the Issuer that such funds be raised by the issuance of temporary notes of the Issuer pursuant to the Act; and WHEREAS, the Issuer proposes to issue its temporary notes to pay a portion of the costs of the Improvements; and WHEREAS, the governing body of the Issuer has advertised the sale of the Notes and at a meeting held in the City on this date, awarded the sale of such Notes to the best bidder; and \ WHEREAS, the governing body of the Issuer hereby finds and determines that it is necessary for the Issuer to authorize the issuance and delivery of the Notes in the principal amount of $6,085,000 to pay a portion of the costs of the Improvements and pay certain costs of issuing the Notes. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: ARTICLE I DEFINITIONS Section 101. Definitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following words and terms as used in this Note Resolution shall have the meanings hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular number shall include the plural and vice versa, and words importing persons shall include firms, associations and corporations, including public bodies, as well as natural persons. "Act" means the Constitution and statutes of the State including K.S.A. 10-101 to 10-125, inclusive, specifically including K.S.A. 10-123, K.S.A. 10-620 et seq., K.S.A. 12-631r ands, K.S.A. 12- 685 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time. "Authorized Denomination" means $5,000 or any integral multiples thereof. "Beneficial Owner" of the Notes includes any Owner of the Notes and any other Person who, directly or indirectly has the investment power with respect to any of the Notes. "Bond and Interest Fund" means the Bond and Interest Fund of the Issuer for its general obligation bonds. "Bond Counsel" means the firm of Gilmore & Bell, P.C., or any other attorney or firm of attorneys whose expertise in matters relating to the issuance of obligations by states and their political subdivisions is nationally recognized and acceptable to the Issuer. "Business Day" means a day other than a Saturday, Sunday or holiday on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its operations. "Cede & Co." means Cede & Co., as nominee ofDTC. "City" means the City of Salina, Kansas. "Clerk" means the duly appointed and acting Clerk of the Issuer or, in the Clerk's absence, the duly appointed Deputy, Assistant or Acting Clerk of the Issuer. "Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations promulgated thereunder by the United States Department of the Treasury. "Costs of Issuance" means all costs of issuing the Notes, including but not limited to all publication, printing, signing and mailing expenses in connection therewith, registration fees, financial 2 advisory fees, all legal fees and expenses of Bond Counsel and other legal counsel, expenses incurred in connection with compliance with the Code, and all expenses incurred in connection with receiving ratings on the Notes. "Dated Date" means April 24, 2019. "Debt Service Account" means the Debt Service Account for General Obligation Temporary Notes, Series 2019-1 (within the Bond and Interest Fund) created pursuant to Section 501 hereof. "Debt Service Requirements" means the aggregate principal payments and interest payments on the Notes for the period of time for which calculated; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service Requirements to the extent that such principal or interest is payable from amounts deposited in trust, escrowed or otherwise set aside for the payment thereof with the Paying Agent or other commercial bank or trust company located in the State and having full trust powers. "Defaulted Interest" means interest on any Note which is payable but not paid on any Interest Payment Date. "Defeasance Obligations" means any of the following obligations: (a) United States Government Obligations that are not subject to redemption in advance of their maturity dates; or (b) obligations of any state or political subdivision of any state, the interest on which is excluded from gross income for federal income tax purposes and which meet the following conditions: (1) the obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for such obligations has been given irrevocable instructions concerning their callfu.g and redemption and the issuer of such obligations has covenanted not to redeem such obligations other than as set forth in such instructions; (2) the obligations are secured by cash or United States Government Obligations that may be applied only to principal of, premium, if any, and interest payments on such obligations; (3) such cash and the principal of and interest on such United States Government Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the obligations; (4) such cash and United States Government Obligations serving as security for the obligations are held in an escrow fund by an escrow agent or a trustee irrevocably in trust; (5) such cash and United States Government Obligations are not available to satisfy any other claims, including those against the trustee or escrow agent; and (6) such obligations are rated in a rating category by Moody's or Standard & Poor's that is no lower than the rating category then assigned by that Rating Agency to United States Government Obligations. 3 "Derivative" means any investment instrument whose market price is derived from the fluctuating value of an underlying asset, index, currency, futures contract, including futures, options and collateralized mortgage obligations. "Director of Finance" means the duly appointed and acting Director of Finance of the Issuer or, in the Director's absence, the duly appointed Deputy, Assistant or Acting Director of Finance of the Issuer. "Disclosure Undertaking" means the Continuing Disclosure Undertaking dated as of the Issue Date relating to certain obligations contained in the SEC Rule. "DTC" means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York, and its successors and assigns, including any successor securities depository duly appointed. "DTC Representation Letter" means the Blanket Letter of Representation from the Issuer and the Paying Agent to DTC which provides for a book-entry system, or any agreement between the Issuer and Paying Agent and a successor securities depository duly appointed. "Event of Default" means each of the following occurrences or events: (a) Payment of the principal and of the redemption premium, if any, of any of the Notes shall not be made when the same shall become due and payable, either at Stated Maturity or by proceedings for redemption or otherwise; (b) Payment of any installment of interest on any of the Notes shall not be made when the same shall become due; or ( c) The Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Notes or in this Note Resolution (other than the covenants relating to continuing disclosure requirements) on the part of the Issuer to be performed, and such default shall continue for thirty (30) days after written notice specifying such default and requiring same to be remedied shall have been given to the Issuer by the Owner of any of the Notes then Outstanding. "Federal Tax Certificate" means the Issuer's Federal Tax Certificate dated as of the Issue Date, as the same may be amended or supplemented in accordance with the provisions thereof. "Financeable Costs" means the amount of expenditure for an Improvement which has been duly authorized by action of the governing body of the Issuer to be financed by general obligation bonds, less: (a) the amount of any temporary notes or general obligation bonds of the Issuer which are currently Outstanding and available to pay such Financeable Costs; and (b) any amount ofFinanceable Costs which has been previously paid by the Issuer or by any eligible source of funds unless such amounts are entitled to be reimbursed to the Issuer under State or federal law. "Fiscal Year" means the twelve month period ending on December 31. "Funds and Accounts" means funds and accounts created by or referred to in Section 501 hereof. "Improvement Fund" means the Improvement Fund for General Obligation Temporary Notes, Series 2019-1 created pursuant to Section 501 hereof. 4 "Improvements" means the improvements referred to in the preamble to this Note Resolution and any Substitute Improvements. "Independent Accountant" means an independent certified public accountant or firm of independent certified public accountants at the time employed by the Issuer for the purpose of carrying out the duties imposed on the Independent Accountant by this Note Resolution. "Interest Payment Date(s)" means the Maturity of the Note. "Issue Date" means the date when the Issuer delivers the Notes to the Purchaser in exchange for the Purchase Price. "Issuer" means the City and any successors or assigns. "Maturity" when used with respect to any Note means the date on which the principal of such Note becomes due and payable as therein and herein provided, whether at the Stated Maturity thereof or call for redemption or otherwise. "Mayor" means the duly elected and acting Mayor, or in the Mayor's absence, the duly appointed and/or elected Vice Mayor or Acting Mayor of the Issuer. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer. "Note Payment Date" means any date on which principal of or interest on any Note is payable. "Note Register" means the books for the registration, transfer and exchange of Notes kept at the office of the Note Registrar. "Note Registrar" means the State Treasurer and its successors and assigns. "Note Resolution" means this resolution relating to the Notes. "Notes" means the General Obligation Temporary Notes, Series 2019-1, authorized and issued by the Issuer pursuant to this Note Resolution. "Notice Address" means with respect to the following entities: (a) To the Issuer at: City of Salina, Kansas Attn; City Clerk 300WestAsh Salina, Kansas 67402 Fax: (785) 309-5738 (b) To the Paying Agent at: State Treasurer of the State of Kansas 5 Landon Office Building 900 Southwest Jackson, Suite 201 Topeka,J(ansas 66612-1235 Fax: (785) 296-6976 ( c) To the Purchaser: Country Club Bank 9400 Mission Road Prairie Village, J(ansas 66206 (d) To the RatingAgency(ies): Moody's Municipal Rating Desk 7 World Trade Center 250 Greenwich Street 23rd Floor New York, New York 10007 "Notice Representative" means: (a) With respect to the Issuer, the Clerk. (b) With respect to the Note Registrar and Paying Agent, the Director of Bond Services. ( c) With respect to any Purchaser, the manager of its Municipal Bond Department. (d) With respect to any Rating Agency, any Vice President thereof. "Official Statement" means Issuer's Official Statement relating to the Notes. "Outstanding" means, when used with reference to the Notes, as of a particular date of determination, all Notes theretofore authenticated and delivered, except the following Notes: (a) Notes theretofore canceled by the Paying Agent or delivered to the Paying Agent for cancellation; (b) Notes deemed to be paid in accordance with the provisions of Article VII hereof; and (c) Notes in exchange for or in lieu of which other Notes have been authenticated and delivered hereunder. "Owner" when used with respect to any Note means the Person in whose name such Note is registered on the Note Register. Whenever consent of the Owners is required pursuant to the terms of this Note Resolution, and the Owner of the Notes, as set forth on the Note Register, is Cede & Co., the term Owner shall be deemed to be the Beneficial Owner of the Notes. "Participants" means those financial institutions for whom the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. 6 "Paying Agent" means the State Treasurer, and any successors and assigns. "Permitted Investments" shall mean the investments hereinafter described, provided, however, no moneys or funds shall be invested in a Derivative: (a) investments authorized by K.S.A. 12-1675 and amendments thereto; (b) the municipal investment pool established pursuant to K.S.A. 12-1677a, and amendments thereto; (c) direct obligations of the United States Government or any agency thereof; (d) the Issuer's temporary notes issued pursuant to K.S.A. 10-123 and amendments thereto; (e) interest-bearing time deposits in commercial banks or trust companies located in the county or counties in which the Issuer is located which are insured by the Federal Deposit Insurance Corporation or collateralized by securities described in (c); (f) obligations of the federal national mortgage association, federal home loan banks, federal home loan mortgage corporation or government national mortgage association; (g) repurchase agreements for securities described in (c) or (f); (h) investment agreements or other obligations of a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody's or Standard & Poor's; (i) investments and shares or units of a money market fund or trust, the portfolio of which is comprised entirely of securities described in ( c) or ( f); G) receipts evidencing ownership interests in securities or portions thereof described in ( c) or (f); (k) municipal bonds or other obligations issued by any municipality of the State as defined in K.S.A. 10-1101 which are general obligations of the municipality issuing the same; or (I) bonds of any municipality of the State as defined in K.S.A. 10-1101 which have been refunded in advance of their maturity and are fully secured as to payment of principal and interest thereon by deposit in trust, under escrow agreement with a bank, of securities described in (c) or (f), all as may be further restricted or modified by amendments to applicable State law. "Person" means any natural person, corporation, partnership, joint venture, association, firm, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body. "Purchase Price" means the principal amount of the Notes plus accrued interest to the date of delivery, less a bid discount of $14,299.75. "Purchaser" means Country Club Bank, Prairie Village, Kansas, the original purchaser of the Notes, and any successors and assigns. "Rating Agency" means any company, agency or entity that provides financial ratings for the Notes. "Rebate Fund" means the Rebate Fund for General Obligation Temporary Notes, Series 2019-1 created pursuant to Section 501 hereof. "Record Dates" for the interest payable on any Interest Payment Date means the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. "Redemption Date" when used with respect to any Note to be redeemed means the date fixed for the redemption of such Note pursuant to the terms of this Note Resolution. "Redemption Price" when used with respect to any Note to be redeemed means the price at which such Note is to be redeemed pursuant to the terms of this Note Resolution, including the applicable redemption premium, if any, but excluding installments of interest whose Stated Maturity is on or before the Redemption Date. 7 "Replacement Notes" means Notes issued to the Beneficial Owners of the Notes in accordance with Article II hereof. "SEC Rule" means Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. "Securities Depository" means, initially, DTC, and its successors and assigns. "Special Record Date" means the date fixed by the Paying Agent pursuant to Article II hereof for the payment of Defaulted Interest. "Standard & Poor's" or "S&P" means S&P Global Ratings, a division of S&P Global Inc., a corporation organized and existing under the laws of the State of New York, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Standard & Poor's shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer. "State" means the state of Kansas. "State Treasurer" means the duly elected Treasurer or, in the Treasurer's absence, the duly appointed Deputy Treasurer or acting Treasurer of the State. "Stated Maturity" when used with respect to any Note or any installment of interest thereon means the date specified in such Note and this Note Resolution as the fixed date on which the principal of such Note or such installment of interest is due and payable. "Substitute Improvements" means the substitute or additional improvements of the Issuer described in Article Vhereof. "Treasurer" means the duly appointed and/or elected Treasurer or, in the Treasurer's absence, the duly appointed Deputy Treasurer or acting Treasurer of the Issuer. "United States Government Obligations" means bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United States of America, including evidences of a direct ownership interest in future interest or principal payment on obligations issued by the United States of America (including the interest component of obligations of the Resolution Funding Corporation), or securities which represent an undivided interest in such obligations, which obligations are rated in the highest rating category by a nationally recognized rating service and such obligations are held in a custodial account for the benefit of the Issuer. ARTICLE II AUTHORIZATION AND DETAILS OF THE NOTES Section 201. Authorization of the Notes. There shall be issued and hereby are authorized and directed to be issued the General Obligation Temporary Notes, Series 2019-1, of the Issuer in the principal amount of $6,085,000 for the purpose of providing funds to: (a) pay a portion of the costs of the Improvements; and (b) pay Costs of Issuance. 8 Section 202. Description of the Notes. The Notes shall consist of fully registered notes in Authorized Denominations, and shall be numbered in such manner as the Note Registrar shall determine. All of the Notes shall be dated as of the Dated Date, shall become due in the amounts, on the Stated Maturity, subject to redemption and payment prior to the Stated Maturity as provided in Article III hereof, and shall bear interest at the rates per annum as follows: Stated Maturity Mayl 2020 Principal Amount $6,085,000 Annual Rate · of Interest 1.58% The Notes shall bear interest at the above specified rates (computed on the basis of a 360-day year of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner set forth in Article II hereof. Each of the Notes, as originally issued or issued upon transfer, exchange or substitution, shall be printed in accordance with the format required by the Attorney General of the State and shall be substantially in the form attached hereto as EXHIBIT A or as may be required by the Attorney General pursuant to the Notice of Systems of Registration for Kansas Municipal Bonds, 2 Kan. Reg. 921 (1983), in accordance with the Kansas Bond Registration Law, K.S.A. 10-620 et seq. Section 203. Designation of Paying Agent and Note Registrar. The State Treasurer is hereby designated as the Paying Agent for the payment of principal of and interest on the Note and Note Registrar with respect to the registration, transfer and exchange of Notes. The Mayor of the Issuer is hereby authorized and empowered to execute on behalf of the Issuer an agreement with the Note Registrar and Paying Agent for the Notes. The Issuer will at all times maintain a Paying Agent and Note Registrar meeting the qualifications herein described for the performance of the duties hereunder. The Issuer reserves the right to appoint a successor Paying Agent or Note Registrar by (a) filing with the Paying Agent or Note Registrar then performing such function a certified copy of the proceedings giving notice of the termination of such Paying Agent or Note Registrar and appointing a successor, and (b) causing notice of appointment of the successor Paying Agent and Note Registrar to be given by first class mail to each Owner. No resignation or removal of the Paying Agent or Note Registrar shall become effective until a successor has been appointed and has accepted the duties of Paying Agent or Note Registrar. Every Paying Agent or Note Registrar appointed hereunder shall at all times meet the requirements ofK.S.A. 10-501 et seq. and K.S.A. 10-620 et seq., respectively. Section 204. Method and Place of Payment of the Notes. The principal of, or Redemption Price, if any, and interest on the Notes shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of and interest on each Note shall be paid at Maturity to the Person in whose name such Note is registered on the Note Register at the Maturity thereof, upon presentation and surrender of such Note at the principal office of the Paying Agent. Such amounts shall be paid to the Owner of such Note as shown on the Note Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Paying Agent to the address of such Owner shown on the Note Register or at such other address as is furnished to the Paying Agent in writing by such Owner; or (b) in the case of a payment to Cede & Co. or any Owner of $500,000 or more in aggregate principal amount of Notes, by electronic transfer to such Owner upon written notice given to the Note Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the 9 electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed. Notwithstanding the foregoing provisions of this Section, any Defaulted Interest with respect to any Note shall cease to be payable to the Owner of such Note on the relevant Record Date and shall be payable to the Owner in whose name such Note is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified in this paragraph. The Issuer shall notify the Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment (which date shall be at least 45 days after receipt of such notice by the Paying Agent) and shall deposit with the Paying Agent at the time of such notice an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment. Following receipt of such funds the Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Paying Agent shall promptly notify the Issuer of such Special Record Date and, in the name and at the expense of the Issuer, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Note entitled to such notice at the address of such Owner as it appears on the Note Register not less than 10 days prior to such Special Record Date. The Paying Agent shall keep a record of payment of principal and Redemption Price of and interest on all Notes and at least annually shall forward a copy or summary of such records to the Issuer. Section 205. Payments Due on Saturdays, Sundays and Holidays. In any case where a Note Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Note Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Note Payment Date, and no interest shall accrue for the period after such Note Payment Date. Section 206. Registration, Transfer and Exchange of Notes. The Issuer covenants that, as long as any of the Notes remain Outstanding, it will cause the Note Register to be kept at the office of the Note Registrar as herein provided. Each Note when issued shall be registered in the name of the Owner thereof on the Note Register. Notes may be transferred and exchanged only on the Note Register as provided in this Section. Upon surrender of any Note at the principal office of the Note Registrar, the Note Registrar shall transfer or exchange such Note for a new Note or Notes in any Authorized Denomination of the same Stated Maturity and in the same aggregate principal amount as the Note that was presented for transfer or exchange. Notes presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Note Registrar, duly executed by the Owner thereof or by the Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Notes is exercised, the Note Registrar shall authenticate and deliver Notes in accordance with the provisions of this Note Resolution. The Issuer shall pay the fees and expenses of the Note Registrar for the registration, transfer and exchange of Notes provided for by this Note Resolution and the cost of printing a reasonable supply of registered note blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees 10 of the Note Registrar, are the responsibility of the Owners of the Notes. In the event any Owner fails to provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. In compliance with Section 3406 of the Code, such amount may be deducted by the Paying Agent from amounts otherwise payable to such Owner hereunder or under the Notes. The Issuer and the Note Registrar shall not be required (a) to register the transfer or exchange of any Note that has been called for redemption after notice of such redemption has been mailed by the Paying Agent pursuant to Article III hereof and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Note during a period beginning at the opening of business on the day after receiving written notice from the Issuer of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to this Article II. The Issuer and the Paying Agent may deem and treat the Person in whose name any Note is registered on the Note Register as the absolute Owner of such Note, whether such Note is overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price of and interest on said Note and for all other purposes. All payments so made to any such Owner or upon the Owner's order shall be valid and effective to satisfy and discharge the liability upon such Note to the extent of the sum or sums so paid, and neither the Issuer nor the Paying Agent shall be affected by any notice to the contrary. At reasonable times and under reasonable regulations established by the Note Registrar, the Note Register may be inspected and copied by the Owners (or a designated representative thereof) of 10% or more in principal amount of the Notes then Outstanding or any designated representative of such Owners whose authority is evidenced to the satisfaction of the Note Registrar. Section 207. Execution, Registration, Authentication and Delivery of Notes. Each of the Notes, including any Notes issued in exchange or as substitutions for the Notes initially delivered, shall be executed for and on behalf of the Issuer by the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of the Clerk and the seal of the Issuer shall be affixed thereto or imprinted thereon. The Mayor and Clerk are hereby authorized and directed to prepare and execute the Notes in the manner herein specified, and to cause the Notes to be registered in the office of the Clerk, which registration shall be evidenced by the manual or facsimile signature of the Clerk with the seal of the Issuer affixed thereto or imprinted thereon. The Notes shall also be registered in the office of the State Treasurer, which registration shall be evidenced by the manual or facsimile signature of the State Treasurer with the seal of the State Treasurer affixed thereto or imprinted thereon. The Notes shall be countersigned by the manual or facsimile signature of the Clerk and the seal of the Issuer shall be affixed or imprinted adjacent thereto following registration of the Notes by the Treasurer of the State of Kansas. In case any officer whose signature appears on any Notes ceases to be such officer before the delivery of such Notes, such signature shall nevertheless be valid and sufficient for all purposes, as if such person had remained in office until delivery. Any Note may be signed by such persons who at the actual time of the execution of such Note are the proper officers to sign such Note although at the date of such Note such persons may not have been such officers. The Mayor and Clerk are hereby authorized and directed to prepare and execute the Notes as herein specified, and when duly executed, to deliver the Notes to the Note Registrar for authentication. The Notes shall have endorsed thereon a certificate of authentication substantially in the form attached hereto as EXHIBIT A hereof, which shall be manually executed by an authorized officer or employee of the Note Registrar, but it shall not be necessary that the same officer or employee sign the 11 certificate of authentication on all of the Notes that may be issued hereunder at any one time. No Note shall be entitled to any security or benefit under this Note Resolution or be valid or obligatory for any purpose unless and until such certificate of authentication has been duly executed by the Note Registrar. Such executed certificate of authentication upon any Note shall be conclusive evidence that such Note has been duly authenticated and delivered under this Note Resolution. Upon authentication, the Note Registrar shall deliver the Notes to the Purchaser upon instructions of the Issuer or its representative. Section 208. Mutilated, Lost, Stolen or Destroyed Notes. If (a) any mutilated Note is surrendered to the Note Registrar or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to the Issuer and the Note Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the Issuer or the Note Registrar that such Note has been acquired by a bona fide purchaser, the Issuer shall execute and, upon the Issuer's request, the Note Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the Issuer, in its discretion, may pay such Note instead of issuing a new Note. Upon the issuance of any new Note under this Section, the Issuer may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent) connected therewith. Every new Note issued pursuant to this Section shall constitute a replacement of the prior obligation of the Issuer, and shall be entitled to all the benefits of this Note Resolution equally and ratably with all other Outstanding Notes. Section 209. Cancellation and Destruction of Notes Upon Payment. All Notes that have been paid or redeemed or that otherwise have been surrendered to the Paying Agent, either at or before Maturity, shall be cancelled by the Paying Agent immediately upon the payment, redemption and surrender thereof to the Paying Agent and subsequently destroyed in accordance with the customary practices of the Paying Agent. The Paying Agent shall execute a certificate in duplicate describing the Notes so cancelled and destroyed and shall file an executed counterpart of such certificate with the Issuer. Section 210. Book-Entry Notes; Securities Depository. The Issuer and Paying Agent have entered into a DTC Representation Letter with DTC. The Notes shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Notes, except in the event the Note Registrar issues Replacement Notes as provided in this Section. It is anticipated that during the term of the Notes, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Notes to the Participants until and unless the Note Registrar authenticates and delivers Replacement Notes to the Beneficial Owners as described in the following paragraph. The Issuer may decide, subject to the requirements of the Operational Arrangements ofDTC (or a successor Securities Depository), and the following provisions of this section to discontinue use of the system of book-entry transfers through DTC (or a successor Securities Depository): (a) If the Issuer determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities 12 depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes; or (b) if the Note Registrar receives written notice from Participants having interests in not less than 50% of the Notes Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Notes being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Notes, then the Note Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to Owners requesting the same, and the Note Registrar shall register in the name of and authenticate and deliver Replacement Notes to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(l) or (a)(2) of this paragraph, the Issuer, with the consent of the Note Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Note. Upon the issuance of Replacement Notes, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Note Registrar, to the extent applicable with respect to such Replacement Notes. If the Securities Depository resigns and the Issuer, the Note Registrar or Owners are unable to locate a qualified successor of the Securities Depository in accordance with the following paragraph, then the Note Registrar shall authenticate and cause delivery of Replacement Notes to Owners, as provided herein. The Note Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Notes. The cost of printing, registration, authentication, and delivery of Replacement Notes shall be paid for by the Issuer. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the Issuer may appoint a successor Securities Depository provided the Note Registrar receives written evidence satisfactory to the Note Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Note Registrar upon its receipt of a Note or Notes for cancellation shall cause the delivery of Notes to the successor Securities Depository in appropriate denominations and form as provided herein. Section 211. Nonpresentment of Notes. If any Note is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Note have been made available to the Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Note shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Note, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Note Resolution or on, or with respect to, said Note. If any Note is not presented for payment within four ( 4) years following the date when such Note becomes due at Maturity, the Paying Agent shall repay, without liability for interest thereon, to the Issuer the funds theretofore held by it for payment of such Note, and such Note shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the Issuer, and the Owner thereof shall be entitled to look only to the Issuer for 13 payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the Issuer shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Section 212. Preliminary and Final Official Statement. For the purpose of enabling the Purchaser to comply with the requirements of Section (b)(l) of the SEC Rule, the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be "final" as of its date, except for the omission of such information as is permitted by Section (b )(1) of the SEC Rule, and the appropriate officers of the Issuer are hereby authorized, if requested, to provide the Purchaser a letter or certification to such effect and to take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchaser to comply with the requirement of the SEC Rule. The Official Statement is hereby authorized to be prepared by supplementing, amending and completing the Preliminary Official Statement, with such changes and additions thereto as are necessary to conform to and describe the transaction. The Mayor and Director of Finance of the Issuer are hereby authorized to execute the final Official Statement as so supplemented, amended and completed, and the use and public distribution of the final Official Statement by the Purchaser in connection with the reoffering of the Notes is hereby authorized. The proper officials of the Issuer are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the Issue Date. The Issuer agrees to provide to the Purchaser within seven business days of the date of the sale of Notes sufficient copies of the final Official Statement to enable the Purchaser to comply with the requirements of the SEC Rule and Rule G-32 of the Municipal Securities Rulemaking Board. Section 213. Sale of the Notes. The sale of the Notes to the Purchaser and the execution of the official bid form is hereby approved and confirmed. The Mayor and/or the Clerk are hereby authorized to execute the official bid form submitted by the Purchaser. Delivery of the Notes shall be made to the Purchaser on the Issue Date (which shall be as soon as practicable after the adoption of this Note Resolution), upon payment of the Purchase Price. ARTICLE ID REDEMPTION OF NOTES Section 301. Redemption of Notes. Optional Redemption. At the option of the Issuer, the Notes will be subject to redemption and payment prior to maturity on November 1, 2019, and thereafter, as a whole or in part (selection of the amount of Notes to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date. Section 302. Selection of Notes to be Redeemed. Notes shall be redeemed only in an Authorized Denomination. When less than all of the Notes are to be redeemed and paid prior to their Stated Maturity, such Notes shall be redeemed in such manner as the Issuer shall determine. Notes of less than a full Stated Maturity shall be selected by the Note Registrar in a minimum Authorized Denomination of principal amount in such equitable manner as the Note Registrar may determine. 14 In the case of a partial redemption of Notes by lot when Notes of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each minimum Authorized Denomination of face value shall be treated as though it were a separate Note of the denomination of a minimum Authorized Denomination. If it is determined that one or more, but not all, of a minimum Authorized Denomination of face value represented by any Note is selected for redemption, then upon notice of intention to redeem a minimum Authorized Denomination, the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Note to the Note Registrar: {l) for payment of the Redemption Price and interest to the Redemption Date of a minimum Authorized Denomination of face value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Note or Notes of the aggregate principal amount of the unredeemed portion of the principal amount of such Note. If the Owner of any such Note fails to present such Note to the Paying Agent for payment and exchange as aforesaid, such Note shall, nevertheless, become due and payable on the redemption date to the extent of a minimum Authorized Denomination of face value called for redemption (and to that extent only). Section 303. Notice and Effect of Call for Redemption. In the event the Issuer desires to call the Notes for redemption prior to maturity, written notice of such intent shall be provided to the Note Registrar in accordance with K.S.A. 10-129, as amended, not less than 45 days prior to the Redemption Date. The Note Registrar shall call Notes for redemption and payment and shall give notice of such redemption as herein provided upon receipt by the Note Registrar at least 45 days prior to the Redemption Date of written instructions of the Issuer specifying the principal amount, Stated Maturities, Redemption Date and Redemption Prices of the Notes to be called for redemption. The Paying Agent may in its discretion waive such notice period so long as the notice requirements set forth in this Section are met. Unless waived by any Owner of Notes to be redeemed, if the Issuer shall call any Notes for redemption and payment prior to the Stated Maturity thereof, the Issuer shall give written notice of its intention to call and pay said Notes to the Note Registrar and the Purchaser. In addition, the Issuer shall cause the Note Registrar to give written notice of redemption to the Owners of said Notes. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date. All official notices of redemption shall be dated and shall contain the following information: (a) the Redemption Date; (b) the Redemption Price; (c) ifless than all Outstanding Notes are to be redeemed, the identification (and, in the case of partial redemption of any Notes, the respective principal amounts) of the Notes to be redeemed; ( d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Note or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and ( e) the place where such Notes are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Paying Agent. The failure of any Owner to receive notice given as previously provided or an immaterial defect therein shall not invalidate any redemption. 15 Prior to any Redemption Date, the Issuer shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of all the Notes or portions of Notes that are to be redeemed on such Redemption Date. For so long as the Securities Depository is effecting book-entry transfers of the Notes, the Note Registrar shall provide the notices specified in this Section to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Note (having been mailed notice from the Note Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Note so affected, shall not affect the validity of the redemption of such Note. Official notice of redemption having been given as aforesaid, the Notes or portions of Notes to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the Issuer defaults in the payment of the Redemption Price) such Notes or portion of Notes shall cease to bear interest. Upon surrender of such Notes for redemption in accordance with such notice, the Redemption Price of such Notes shall be paid by the Paying Agent. Installments of interest due on or prior to the Redemption Date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Note, there shall be prepared for the Owner a new Note or Notes of the same Stated Maturity in the amount of the unpaid principal as provided herein. All Notes that have been surrendered for redemption shall be cancelled and destroyed by the Paying Agent as provided herein and shall not be reissued. In addition to the foregoing notice, the Issuer shall provide such notices of redemption as are required by the Disclosure Undertaking. Further notice may be given by the Issuer or the Note Registrar on behalf of the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if official notice thereof is given as above prescribed: (a) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (I) the CUSIP numbers of all Notes being redeemed; (2) the date of issue of the Notes as originally issued; (3) the rate of interest borne by each Note being redeemed; (4) the maturity date of each Note being redeemed; and (5) any other descriptive information needed to identify accurately the Notes being redeemed. (b) Each further notice of redemption shall be sent at least one day before the mailing of notice to Owners by first class, registered or certified mail or overnight delivery, as determined by the Note Registrar, to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Notes and to one or more national information services that disseminate notices of redemption of obligations such as the Notes. ( c) Each check or other transfer of funds issued for the payment of the Redemption Price of Notes being redeemed shall bear or have enclosed the CUSIP number of the Notes being redeemed with the proceeds of such check or other transfer. The Paying Agent is also directed to comply with any mandatory standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Note. 16 ARTICLE IV SECURITY FOR NOTES Section 401. Security for the Notes. The Notes shall be general obligations of the Issuer payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of the Improvements, and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. Section 402. Levy and Collection of Annual Tax. The governing body of the Issuer shall annually make provision for the payment of principal of, premium, if any, and interest on the Notes as the same become due, if necessary, by levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the Issuer in the manner provided by law. The taxes and/or assessments referred to above shall be extended upon the tax rolls and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and collected. The proceeds derived from said taxes shall be deposited in the Bond and Interest Fund, shall be kept separate and apart from all other funds of the Issuer shall thereafter be deposited in the Debt Service Account and shall be used solely for the payment of the principal of and interest on the Notes as and when the same become due, and the fees and expenses of the Paying Agent. If at any time said taxes and/or assessments are not collected in time to pay the principal of or interest on the Notes when due, the Treasurer is hereby authorized and directed to pay said principal or interest out of the general funds of the Issuer and to reimburse said general funds for money so expended when said taxes are collected. ARTICLEV ESTABLISHMENT OF FUNDS AND ACCOUNTS DEPOSIT AND APPLICATION OF NOTE PROCEEDS Section 501. Creation of Funds and Accounts. Simultaneously with the issuance of the Notes, there shall be created within the Treasury of the Issuer the following funds and accounts: (a) Improvement Fund for General Obligation Temporary Notes, Series 2019-1; (b) Debt Service Account for General Obligation Temporary Notes, Series 2019-1; and (c) Rebate Fund for General Obligation Temporary Notes, Series 2019-1. The Funds and Accounts established herein shall be administered in accordance with the provisions of this Note Resolution so long as the Notes are Outstanding. Section 502. Deposit of Note Proceeds. The net proceeds received from the sale of the Notes shall be deposited simultaneously with the delivery of the Notes as follows: 17 (a) All accrued interest received from the sale of the Notes shall be deposited in the Debt Service Account. (b) The remaining balance of the proceeds derived from the sale of the Notes shall be deposited in the Improvement Fund. Section 503. Application of Moneys in the Improvement Fund. Moneys in the Improvement Fund shall be used for the sole purpose of: (a) paying the costs of the Improvements, in accordance with the plans and specifications therefor approved by the governing body of the Issuer and on file in the office of the Clerk, including any alterations in or amendments to said plans and specifications deemed advisable and approved by the governing body of the Issuer; (b) paying interest on the Notes during construction of the Improvements; (c) paying Costs of Issuance; and (d) transferring any amounts to the Rebate Fund required by this Article V. Upon completion of the Improvements, any surplus remaining in the Improvement Fund shall be deposited in the Debt Service Account. Section 504. Substitution of Improvements; Reallocation of Proceeds. (a) The Issuer may elect for any reason to substitute or add other public improvements to be financed with proceeds of the Notes provided the following conditions are met: (1) the Substitute Improvement and the issuance of general obligation bonds to pay the cost of the Substitute Improvement has been duly authorized by the governing body of the Issuer in accordance with the laws of the State; (2) a resolution or ordinance authorizing the use of the proceeds of the Notes to pay the Financeable Costs of the Substitute Improvement has been duly adopted by the governing body of the Issuer pursuant to this Section, (3) the Attorney General of the State has approved the amendment made by such resolution or ordinance to the transcript of proceedings for the Notes to include the Substitute Improvements; and (4) the use of the proceeds of the Notes to pay the Financeable Cost of the Substitute Improvement will not adversely affect the tax-exempt status of the Notes under State or federal law. (b) The Issuer may reallocate expenditure of Note proceeds among all Improvements financed by the Notes; provided the following conditions are met: (I) the reallocation is approved by the governing body of the Issuer; (2) the reallocation shall not cause the proceeds of the Notes allocated to any Improvement to exceed the Financeable Costs of the Improvement; and (3) the reallocation will not adversely affect the tax-exempt status of the Notes under State or federal law. Section 505. Application of Moneys in Debt Service Account. All amounts paid and credited to the Debt Service Account shall be expended and used by the Issuer for the sole purpose of paying the principal or Redemption Price of and interest on the Notes as and when the same become due and the usual and customary fees and expenses of the Note Registrar and Paying Agent. The Treasurer is authorized and directed to withdraw from the Debt Service Account sums sufficient to pay both principal or Redemption Price of and interest on the Notes and the fees and expenses of the Note Registrar and Paying Agent as and when the same become due, and to forward such sums to the Paying Agent, if other than the Issuer, in a manner which ensures that the Paying Agent will receive immediately available funds in such amounts on or before the Business Day immediately preceding the dates when such principal, interest and fees of the Note Registrar and Paying Agent will become due. If, through the lapse of time or otherwise, the Owners of Notes are no longer entitled to enforce payment of the Notes or the interest thereon, the Paying Agent shall return said funds to the Issuer. All moneys deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Note Resolution and shall be held by the Paying Agent for the benefit of the Owners of the Notes entitled to payment from such moneys. 18 Any moneys or investments remaining in the Debt Service Account after the retirement of the indebtedness for which the Notes were issued shall be transferred and paid into the Bond and Interest Fund. Section 506. Application of Moneys in the Rebate Fund. (a) There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Federal Tax Certificate. All money at any time deposited in the Rebate Fund shall be held in trust, to the extent required to satisfy the Rebate Amount (as defined in the Federal Tax Certificate), for payment to the United States of America, and neither the Issuer nor the Owner of any Notes shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and the Federal Tax Certificate. (b) The Issuer shall periodically determine the arbitrage rebate, if any, under Code § 148(f) of the Code in accordance with the Federal Tax Certificate, and the Issuer shall make payments to the United States of America at the times and in the amounts determined under the Federal Tax Certificate. Any moneys remaining in the Rebate Fund after redemption and payment of all of the Notes and payment and satisfaction of any Rebate Amount, or provision made therefor, shall be deposited into the Bond and Interest Fund. (c) Notwithstanding any other provision of this Note Resolution, including in particular Article VII hereof, the obligation to pay arbitrage rebate to the United States of America and to comply with all other requirements of this Section and the Federal Tax Certificate shall survive the defeasance or payment in full of the Notes. Section 507. Deposits and Investment of Moneys. Moneys in each of the Funds and Accounts shall be deposited in accordance with laws of the State, in a bank, savings and loan association or savings bank organized under the laws of the State, any other state or the United States: (a) which has a main or branch office located in the Issuer; or (b) if no such entity has a main or branch office located in the Issuer, with such an entity that has a main or branch office located in the county or counties in which the Issuer is located. All such depositaries shall be members of the Federal Deposit Insurance Corporation, or otherwise as permitted by State law. All such deposits shall be invested in Permitted Investments as set forth in this Article or shall be adequately secured as provided by the laws of the State. All moneys held in the Funds and Accounts shall be kept separate and apart from all other funds of the Issuer so that there shall be no commingling with any other funds of the Issuer. Moneys held in any Fund or Account may be invested in accordance with this Note Resolution and the Federal Tax Certificate in Permitted Investments; provided, however, that no such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which such fund was created. All earnings on any investments held in any Fund or Account shall accrue to and become a part of such Fund or Account; provided that, during the period of construction of the Improvements, earnings on the investment of such funds may be credited to the Debt Service Account. 19 ARTICLE VI DEFAULT AND REMEDIES Section 601. Remedies. The provisions of the Note Resolution, including the covenants and agreements herein contained, shall constitute a contract between the Issuer and the Owners of the Notes. If an Event of Default occurs and shall be continuing, the Owner or Owners of not less than 10% in principal amount of the Notes at the time Outstanding shall have the right for the equal benefit and protection of all Owners of Notes similarly situated: (a) by mandamus or other suit, action or proceedings at law or in equity to enforce the rights of such Owner or Owners against the Issuer and its officers, agents and employees, and to require and compel duties and obligations required by the provisions of the Note Resolution or by the Constitution and laws of the State; (b) by suit, action or other proceedings in equity or at law to require the Issuer, its officers, agents and employees to account as if they were the trustees of an express trust; and (c) by suit, action or other proceedings in equity or at law to enjoin any acts or things which may be unlawful or in violation of the rights of the Owners of the Notes. Section 602. Limitation on Rights of Owners. The covenants and agreements of the Issuer contained herein and in the Notes shall be for the equal benefit, protection, and security of the Owners of any or all of the Notes, all of which Notes shall be of equal rank and without preference or priority of one Note over any other Note in the application of the funds herein pledged to the payment of the principal of and the interest on the Notes, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this Note Resolution. No one or more Owners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Outstanding Notes. Section 603. Remedies Cumulative. No remedy conferred herein upon the Owners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred herein. No waiver of any default or breach of duty or contract by the Owner of any Note shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No delay or omission of any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Owners of the Notes by this Note Resolution may be enforced and exercised from time to time and as often as may be deemed expedient. If action or proceedings taken by any Owner on account of any default or to enforce any right or exercise any remedy has been discontinued or abandoned for any reason, or shall have been determined adversely to such Owner, then, and in every such case, the Issuer and the Owners of the Notes shall, subject to any determination in such action or proceeding or applicable law of the State, be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Owners shall continue as if no such suit, action or other proceedings had been brought or taken. 20 ARTICLE VII DEFEASANCE Section 701. Defeasance. When any or all of the Notes, redemption premium, if any, or scheduled interest payments thereon have been paid and discharged, then the requirements contained in this Note Resolution and the pledge of the Issuer's faith and credit hereunder and all other rights granted hereby shall terminate with respect to the Notes or scheduled interest payments thereon so paid and discharged. Notes, redemption premium, if any, or scheduled interest payments thereon shall be deemed to have been paid and discharged within the meaning of this Note Resolution if there has been deposited with the Paying Agent, or other commercial bank or trust company located in the State and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Notes or the interest payments thereon, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned on any such Defeasance Obligations, will be sufficient for the payment of the principal of or Redemption Price of said Notes and/or interest accrued to the Stated Maturity or Redemption Date, or if default in such payment has occurred on such date, then to the date of the tender of such payments. If the amount to be so deposited is based on the Redemption Price of any Notes, no such satisfaction shall occur until (a) the Issuer has elected to redeem such Notes, and (b) either notice of such redemption has been given, or the Issuer has given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Note Registrar to give such notice of redemption in compliance with Article III. Any money and Defeasance Obligations that at any time shall be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the Issuer, for the purpose of paying and discharging any of the Notes, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Owners of the Notes, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All money and Defeasance Obligations deposited with the Paying Agent or such bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions of this Note Resolution. ARTICLE VIII TAX COVENANTS Section 801. General Covenants. The Issuer covenants and agrees that: it will comply with (a) all applicable provisions of the Code necessary to maintain the exclusion from gross income for federal income tax purposes of the interest on the Notes; and (b) all provisions and requirements of the Federal Tax Certificate. The Mayor, Finance Director and Clerk are hereby authorized and directed to execute the Federal Tax Certificate in a form approved by Bond Counsel, for and on behalf of and as the act and deed of the Issuer. The Issuer will, in addition, adopt such other ordinances or resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable future laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Notes will remain excluded from federal gross income, to the extent any such actions can be taken by the Issuer. Section 802. Survival of Covenants. The covenants contained in this Article and in the Federal Tax Certificate shall remain in full force and effect notwithstanding the defeasance of the Notes pursuant to Article VII hereof or any other provision of this Note Resolution until such time as is set forth in the Federal Tax Certificate. 21 ARTICLE IX CONTINUING DISCLOSURE REQUIREMENTS Section 901. Disclosure Requirements. The Issuer hereby covenants with the Purchaser and the Beneficial Owners to provide and disseminate such information as is required by the SEC Rule and as further set forth in the Disclosure Undertaking, the provisions of which are incorporated herein by reference. Such covenant shall be for the benefit of and enforceable by the Purchaser and the Beneficial Owners. Section 902. Failure to Comply with Continuing Disclosure Requirements. In the event the Issuer fails to comply in a timely manner with its covenants contained in the preceding section, the Purchaser and/or any Beneficial Owner may make demand for such compliance by written notice to the Issuer. In the event the Issuer does not remedy such noncompliance within 10 days of receipt of such written notice, the Purchaser or any Beneficial Owner may in its discretion, without notice or demand, proceed to enforce compliance by a suit or suits in equity for the specific performance of such covenant or agreement contained in the preceding section or for the enforcement of any other appropriate legal or equitable remedy, as the Purchaser and/or any Beneficial Owner shall deem effectual to protect and enforce any of the duties of the Issuer under such preceding section. ARTICLEX MISCELLANEOUS PROVISIONS Section 1001. Annual Audit. Annually, promptly after the end of the Fiscal Year, the Issuer will cause an audit to be made of the financial statements of the Issuer for the preceding Fiscal Year by an Independent Accountant. Within 30 days after the completion of each such audit, a copy thereof shall be filed in the office of the Clerk. Such audit shall at all times during the usual business hours be open to the · examination and inspection by any taxpayer, any Owner of any of the Notes, or by anyone acting for or on behalf of such taxpayer or Owner. Upon payment of the reasonable cost of preparing and mailing the same, a copy of any annual audit will, upon request, be sent to any Owner or prospective Owner. As soon as possible after the completion of the annual audit, the governing body of the Issuer shall review such audit, and if the audit discloses that proper provision has not been made for all of the requirements of this Note Resolution, the Issuer shall promptly cure such deficiency. Section 1002. Amendments. The rights and duties of the Issuer and the Owners, and the terms and provisions of the Notes or of this Note Resolution, may be amended or modified at any time in any respect by resolution or ordinance of the Issuer with the written consent of the Owners of not less than a majority in principal amount of the Notes then Outstanding, such consent to be evidenced by an instrument or instruments executed by such Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the Clerk, but no such modification or alteration shall: (a) extend the maturity of any payment of principal or interest due upon any Note; (b) effect a reduction in the amount which the Issuer is required to pay as principal of or interest on any Note; (c) permit preference or priority of any Note over any other Note; or 22 (d) reduce the percentage in principal amount of Notes required for the written consent to any modification or alteration of the provisions of this Note Resolution. Any provision of the Notes or of this Note Resolution may, however, be amended or modified by resolution or ordinance duly adopted by the governing body of the Issuer at any time in any legal respect with the written consent of the Owners of all of the Notes at the time Outstanding. Without notice to or the consent of any Owners, the Issuer may amend or supplement this Note Resolution for the purpose of curing any formal defect, omission, inconsistency or ambiguity herein, to grant to or confer upon the Owners any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Owners, to more precisely identify the Improvements, to reallocate proceeds of the Notes among Improvements, to provide for Substitute Improvements, to conform this Note Resolution to the Code or future applicable federal law concerning tax-exempt obligations, or in connection with any other change therein which is not materially adverse to the interests of the Owners. Every amendment or modification of the provisions of the Notes or of this Note Resolution, to which the written consent of the Owners is given, as above provided, shall be expressed in a resolution or ordinance adopted by the governing body of the Issuer amending or supplementing the provisions of this Note Resolution and shall be deemed to be a part of this Note Resolution. A certified copy of every such amendatory or supplemental resolution or ordinance, if any, and a certified copy of this Note Resolution shall always be kept on file in the office of the Clerk, and shall be made available for inspection by the Owner of any Note or a prospective purchaser or owner of any Note authorized by this Note Resolution, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental resolution or ordinance or of this Note Resolution will be sent by the Clerk to any such Owner or prospective Owner. Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the Clerk a copy of the resolution or ordinance of the Issuer hereinabove provided for, duly certified, as well as proof of any required consent to such modification by the Owners of the Notes then Outstanding. It shall not be necessary to note on any of the Outstanding Notes any reference to such amendment or modification. The Issuer shall furnish to the Paying Agent a copy of any amendment to the Notes or this Note Resolution which affects the duties or obligations of the Paying Agent under this Note Resolution. Section 1003. Notices, Consents and Other Instruments by Owners. Any notice, consent, request, direction, approval or other instrument to be signed and executed by the Owners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Owners in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Notes, if made in the following manner, shall be sufficient for any of the purposes of this Note Resolution, and shall be conclusive in favor of the Issuer and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument, namely: (a) The fact and date of the execution by any person of any such instrument may be proved by a certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such instrument acknowledged before such officer the execution thereof, or by affidavit of any witness to such execution. (b) The fact of ownership of Notes, the amount or amounts, numbers and other identification of Notes, and the date of holding the same shall be proved by the Note Register. 23 In determining whether the Owners of the requisite principal amount of Notes Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Note Resolution, Notes owned by the Issuer shall be disregarded and deemed not to be Outstanding under this Note Resolution, except that, in determining whether the Owners shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes which the Owners know to be so owned shall be so disregarded. Notwithstanding the foregoing, Notes so owned which have been pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of the Owners the pledgee's right so to act with respect to such Notes and that the pledgee is not the Issuer. Section 1004. Notices. Any notice, request, complaint, demand or other communication required or desired to be given or filed under this Note Resolution shall be in writing, given to the Notice Representative at the Notice Address and shall be deemed duly given or filed ifthe same shall be: (a) duly mailed by registered or certified mail, postage prepaid; or (b) communicated via fax, with electronic or telephonic confinnation of receipt. Copies of such notices shall also be given to the Paying Agent. The Issuer, the Paying Agent and the Purchaser may from time to time designate, by notice given hereunder to the others of such parties, such other address to which subsequent notices, certificates or other communications shall be sent. All notices given by: (a) certified or registered mail as aforesaid shall be deemed duly given as of the date they are so mailed; (b) fax as aforesaid shall be deemed duly given as of the date of confirmation of receipt. If, because of the temporary or permanent suspension of regular mail service or for any other reason, it is impossible or impractical to mail any notice in the manner herein provided, then such other form of notice as shall be made with the approval of the Paying Agent shall constitute a sufficient notice. Section 1005. Electronic Transactions. The issuance of the Notes and the transactions related thereto and described herein may be conducted and documents may be stored by electronic means. Section 1006. Further Authority. The officers and officials of the Issuer, including the Mayor and Clerk, are hereby authorized and directed to execute all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Note Resolution and to make ministerial alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. Section 1007. Severability. If any section or other part of this Note Resolution, whether large or small, is for any reason held invalid, the invalidity thereof shall not affect the validity of the other provisions of this Note Resolution. Section 1008. Governing Law. This Note Resolution shall be governed exclusively by and construed in accordance with the applicable laws of the State. Section 1009. Effective Date. This Note Resolution shall take effect and be in full force from and after its adoption by the governing body of the Issuer. 24 ADOPTED by the governing body of th I uer on Ap1il 1, 2019. Clerk (Signature Page to Resolution -2019-1 Notes) EXHIBIT A (FORl\1 OF NOTES) REGISTERED NUMBERR-1 REGISTERED $6,085,000 Interest Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York Corporation ("DTC"), to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA GENERAL OBLIGATION TEMPORARY NOTE SERIES 2019-1 Maturity Dated CUSIP: Rate: 1.58% Date: May 1, 2020 Date: April 24, 2019 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: \ KNOW ALL PERSONS BY THESE PRESENTS: That the City of Salina, in the County of Saline, State of Kansas (the "Issuer"), for value received, hereby acknowledges itself to be indebted and promises to pay to the Registered Owner shown above, or registered assigns, but solely from the source and in the manner herein specified, the Principal Amount shown above on the Maturity Date shown above, unless called for redemption prior to said Maturity Date, and to pay interest thereon at the Interest Rate per annum shown above (computed on the basis of a 360-day year of twelve 30-day months), from the Dated Date shown above, or from the most recent date to which interest has been paid or duly provided for, payable at maturity or earlier redemption (the "Interest Payment Dates"), until the Principal Amount has been paid. Method and Place of Payment. The principal or redemption price and interest thereon of this Note shall be paid at maturity or upon earlier redemption to the person in whose name this Note is registered at the maturity or redemption date thereof, upon presentation and surrender of this Note at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and ''Note Registrar"). Such amounts shall be payable (a) by check or draft mailed by the Paying Agent to the A-1 address of such Registered Owner shown on the Note Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of a payment to Cede & Co. by electronic transfer to such Owner upon written notice given to the Note Registrar by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. The principal or redemption price of and interest on the Notes shall be payable in any coin or currency that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. Interest not punctually paid will be paid in the manner established in the within defined Note Resolution. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the hereinafter defined Note Resolution. Authorization of Notes. This Note is one of an authorized series of Notes of the Issuer designated "General Obligation Temporary Notes, Series 2019-1," aggregating the principal amount of $6,085,000 (the "Notes") issued for the purposes set forth in the Resolution of the Issuer authorizing the issuance of the Notes (the "Note Resolution"). The Notes are issued by the authority of and in full compliance with the provisions, restrictions and limitations of the Constitution and laws of the State of Kansas, including K.S.A. 10-101 to 10-125, inclusive, specifically including K.S.A. 10-123, K.S.A. 10- 620 et seq., K.S.A. 12-63lr ands, K.S.A. 12-685 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time, and all other provisions of the laws of the State of Kansas applicable thereto. General Obligations. The Notes constitute general obligations of the Issuer payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certain Improvements (as said term is described in the Note Resolution), and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are hereby pledged for the payment of the principal of and interest on this Note and the issue of which it is a part as the same respectively become due. Redemption Prior to Maturity. The Notes are subject to redemption prior to maturity as set forth in the Note Resolution. Book-Entry System. The Notes are being issued by means of a book-entry system with no physical distribution of note certificates to be made except as provided in the Note Resolution. One Note certificate with respect to each date on which the Notes are stated to mature or with respect to each form of Notes, registered in the nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book-entry system will evidence positions held in the Notes by the Securities Depository's participants, beneficial ownership of the Notes in Authorized Denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The Issuer and the Note Registrar will recognize the Securities Depository nominee, while the Registered Owner of this Note, as the owner of this Note for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Note, (ii) notices and (iii) voting. Transfer of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfer of principal, A-2 interest and any redemption premium payments to beneficial owners of the Notes by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The Issuer and the Note Registrar will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Note, notwithstanding the provision hereinabove contained, payments of principal of, redemption premium, if any, and interest on this Note shall be made in accordance with existing arrangements among the Issuer, the Note Registrar and the Securities Depository. Transfer and Exchange. EXCEPT AS OTHERWISE PROVIDED IN THE NOTE RESOLUTION, TIDS GLOBAL NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. This Note may be transferred or exchanged, as provided in the Note Resolution, only on the Note Register kept for that purpose at the principal office of the Note Registrar, upon surrender of this Note together with a written instrument of transfer or authorization for exchange satisfactory to the Note Registrar duly executed by the Registered Owner or the Registered Owner's duly authorized agent, and thereupon a new Note or Notes in any Authorized Denomination pf the same maturity and in the same aggregate principal amount shall be issued to the transferee in exchange therefor as provided in the Note Resolution and upon payment of the charges therein prescribed. The Issuer shall pay all costs incurred in connection with the issuance, payment and initial registration of the Notes and the cost of a reasonable supply of note blanks. The Issuer and the Paying Agent may deem and treat the person in whose name this Note is registered on the Note Register as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and for all other purposes. The Notes are issued in fully registered form in Authorized Denominations. Authentication. This Note shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the hereinafter defined Note Resolution until the Certificate of Authentication and Registration hereon shall have been lawfully executed by the Note Registrar. IT IS HEREBY DECLARED AND CERTIFIED that all acts, conditions, and things required to be done and to exist precedent to and in the issuance of this Note have been properly done and performed and do exist in due and regular form and manner as required by the Constitution and laws of the State of Kansas, and that the total indebtedness of the Issuer, including this series of notes, does not exceed any constitutional or statutory limitation. A-3 IN WITNESS WHEREOF, the Issuer has caused this Note to be executed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its Clerk, and its seal to be affixed hereto or imprinted hereon. (Facsimile Seal) ATIEST: By: (facsimile) Clerk CITY OF SALINA, KANSAS By: ~~(f;=a=c=si=m=i=le~)~~~~~~~~~~­ Mayor This General Obligation Temporary Note shall not be negotiable unless and until countersigned below following registration by the Treasurer of the State of Kansas. (Facsimile Seal) (facsimile) Clerk A-4 CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Note is one of a series of General Obligation Temporary Notes, Series 2019-1, of the City of Salina, Kansas, described in the within-mentioned Note Resolution. Registration Date __________ _ Registration Number:--------- Office of the State Treasurer, Topeka, Kansas, as Note Registrar and Paying Agent By: ______________ _ CERTIFICATE OF CLERK STATE OF KANSAS ) ) SS. COUNTY OF SALINE ) The undersigned, Clerk of the City of Salina, Kansas, does hereby certify that the within Note has been duly registered in my office according to law as of April 24, 2019. WITNESS my hand and official seal. (Facsimile Seal) (facsimile) Clerk CERTIFICATE OF STATE TREASURER OFFICE OF THE TREASURER, STATE OF KANSAS JAKE LATURNER, Treasurer of the State of Kansas, does hereby certify that a transcript of the proceedings leading up to the issuance of this Note has been filed in the office of the State Treasurer, and that this Note was registered in such office according to law on------------ WITNESS my hand and official seal. (Seal) By: ---------------Treasurer of the State of Kansas A-5 NOTE ASSIGNMENT FOR VALUE RECENED, the undersigned do( es) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identification No.) the Note to which this assignment is affixed in the outstanding principal amount of $ , standing in the name of the undersigned on the books of the Note Registrar. The undersigned do( es) hereby irrevocably constitute and appoint as agent to transfer said Note on the books of said Note Registrar with full power of substitution in the premises. Dated ________ _ Name Social Security or Taxpayer Identification No. Signature (Sign here exactly as name(s) appear on the face of Certificate) Signature guarantee: By~--------------- LEGAL OPINION The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, P.C., Bond Counsel, which was dated and issued as of the date of original issuance and delivery of such Notes: GILMORE & BELL, P.C. Attorneys at Law 2405 Grand Boulevard Suite 1100 Kansas City, Missouri 64108 (PRINTED LEGAL OPINION) A-6 TRANSCRIPT CERTIFICATE $6,085,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 DATED APRIL 24, 2019 The undersigned Mayor and Clerk of the City of Salina, Kansas (the "Issuer"), do hereby make this certificate for inclusion in the transcript of and as a part of the proceedings authorizing and providing for the issuance of the above described notes (the "Notes"); and do hereby certify as of April 1, 2019, as follows: 1. Meaning of Words and Terms. Capitalized words and terms used herein, unless otherwise defined herein or the context requires otherwise, shall have the same meanings ascribed to such words and terms in the hereinafter defined Note Resolution authorizing the Notes. 2. Organization. The Issuer is a legally constituted city of the first class organized and existing under the laws of the State of Kansas. 3. Transcript of Proceedings. The transcript of proceedings (the "Transcript") relating to the authorization and issuance of the Notes is to the best of our knowledge, information and belief full and complete; none of such proceedings have been modified, amended or repealed, except as might be shown in the Transcript, and the facts stated in the Transcript still exist. In each and every instance where copies appear in the Transcript, such copies are true and correct duplicates of the original instruments now on file with the Clerk. 4. Newspaper. The Salina Journal was the official newspaper of the Issuer at all times during these proceedings. 5. Meetings. All of the meetings of the governing body of the Issuer at which action was taken as shown in the Transcript were either regular meetings or duly adjourned regular meetings or special meetings duly called and held in accordance with law and the ordinances and rules of the Issuer. 6. Incumbency of Officers. The following named persons were and are the duly qualified and acting officers of the Issuer at and during all the times when action was taken as indicated in the Transcript as follows: Name Trent Davis Karl Ryan Kaye Crawford Jon R. Blanchard Norman M. Jennings Kristin M. Seaton Mike Hoppock Trent Davis Karl Ryan Kaye Crawford Jon R. Blanchard Title Mayor Mayor Mayor Mayor Mayor Mayor Vice-Mayor Vice-Mayor Vice-Mayor Vice-Mayor Vice-Mayor Term of Office January 14, 2019 to Present January 8, 2018 to January 14, 2019 April 18, 2016 to January 8, 2018 April 20, 2015 to April 18, 2016 April 19, 2012 to April 15, 2013 April 16, 2001 to April 14, 2003 January 14, 2019 to Present January 8, 2018 to January 14, 2019 April 18, 2016 to January 8, 2018 April 20, 2015 to April 18, 2016 April 21, 2014 to April 20, 2015 Karl Ryan Commissioner April 20, 2015 to Present Joe Hay, Jr. Commissioner January 8, 2018 to Present Melissa Rose Hodges Commissioner January 9, 2017 to Present Mike Hoppock Commissioner January 8, 2018 to Present Trent Davis Commissioner September 8, 2014 to Present Kaye Crawford Commissioner April 18, 2011 to January 8, 2018 Randall Hardy Commissioner April 15, 2013 to January 8, 2017 Jon Blanchard Commissioner April 15, 2013 to January 8, 2018 Barbara Shirley Commissioner April 18,2011 toApril20,2015 Aaron Householter Commissioner April 18, 2011 to April 21, 2014 Samantha Angell Commissioner April 13, 2009 to April 15, 2013 Norman M. Jennings Commissioner April 13, 2009 to April 15 2013 Alan Jilka Commissioner April 16, 2001toApril13, 2009 Debbie Divine Commissioner April 16, 2001 to April 16, 2007 Monte Shadwick Commissioner April 16, 2001 to April 18, 2005 Don Heath Commissioner January 14, 2002 to April 14, 2003 Shandi Wicks Clerk March 10, 2014 to Present Lieu Ann Elsey (Nicola) Clerk April I, 2001 to December 16, 2013 7. Execution of Notes. The Notes have been executed with manual or facsimile signatures; and the manual or facsimile signatures appearing on the face of the Notes are manual or facsimiles of the true and genuine signatures of the Mayor and Clerk of the Issuer. Each signature has been duly filed in the office of the Secretary of State of Kansas pursuant to K.S.A. 75-4001 et seq. A facsimile of the seal of the Issuer is affixed to or imprinted on each of the Notes and on the reverse side of each of the Notes at the place where the Clerk has executed by facsimile signature the Certificate of Registration; and each Note bears a Certificate of Registration evidencing the fact that it has been registered in the office of the Clerk. A true impression of the seal is set forth adjacent to the signature of the Clerk below. The specimen note included in the Transcript is in the form adopted by the governing body of the Issuer for the Notes. 8. Authorization and Purpose of the Notes. The Notes are being issued pursuant to and in full compliance with the Constitution and the statutes of the State, including particularly K.S.A. 10-101 to 10-125, inclusive, specifically including K.S.A. 10-123, K.S.A. 10-620 et seq., K.S.A. 12-63 lr and s, K.S.A. 12-685 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time, Resolution 19-7692 of the Issuer duly adopted by the governing body of the Issuer on April 1, 2019 (the "Note Resolution") for the purpose of paying a portion of the costs of certain public improvements (the "Improvements"). The total principal amount of the Notes does not exceed the cost of the Improvements for which the Notes are issued. The interest rates on the Notes on the date of the sale of the Notes were within the maximum legal limit for interest rates under K.S.A. 10-1009, as amended. 9. Indebtedness. The currently outstanding applicable indebtedness of the Issuer, including the Notes, does not exceed any applicable constitutional or statutory limitations. A schedule of general obligation indebtedness of the Issuer, which sets forth all currently outstanding general obligation indebtedness of the Issuer, is attached hereto as Exhibit A and made a part hereof by reference as though fully set out herein. 2 10. Valuation. The total assessed valuation of the taxable tangible property within the Issuer for the year 2018 was $487,787,922. 11. Non-litigation. There is no controversy, suit or other proceedings of any kind pending or threatened wherein or whereby any question is raised or may be raised, questioning, disputing or affecting in any way: (a) the legal organization of the Issuer or its boundaries; (b) the right or title of any of its officers to their respective offices; (c) the legality of any official act shown to have been done in the Transcript; ( d) the constitutionality or validity of the indebtedness represented by the Notes shown to be authorized in the Transcript; ( e) the validity of the Notes, or any of the proceedings had in relation to the authorization, issuance or sale thereof; or (f) the levy and collection of a tax to pay the principal of and interest on the Notes. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 3 WITNESS our true and genuine manual ignatures and the seal of the Issuer. Mayor Clerk (Signature Page to Transcript Certificate -Notes) EXHIBIT A CITY OF SALINA, KANSAS SCHEDULE OF OUTSTANDING GENERAL OBLIGATION INDEBTEDNESS (as of April 24, 2019) General Obligation Bonds: Date Amount Final Amount Issued Series Purpose of Issue Maturitl'. Outstanding . 12-15-08 2008-B Internal Improvements $3,525,000 07-01-24 $1,035,000 07-15-09 2009-A Internal Improvements 23,695,000 10-01-20 2,845,000 05-01-10 2010-A Refunding & Improvement 6,875,000 10-01-20 650,000 10-15-10 2010-B Refunding 7,860,000 10-01-23 1,720,000 07-15-11 2011-A Internal Improvements 6,565,000 10-01-21 1,095,000 07-15-12 2012-A Internal Improvements 2,365,000 10-01-27 1,495,000 07-15-12 2012-B Refunding 3,785,000 10-01-20 415,000 02-15-13 2013-A Taxable Improvements 1,360,000 10-01-28 995,000 07-15-13 2013-B Improvements 4,330,000 10-01-33 3,170,000 07-30-14 2014-A Improvements 7,570,000 10-01-34 5,240,000 07-29-15 2015-A Revenue and Internal Imp. 6,825,000 10-01-35 5,860,000 07-27-16 2016-A Internal Improvements 6,570,000 10-01-36 6,060,000 07-27-16 2016-B Refunding 13,750,000 10-01-31 13,080,000 07-27-17 2017-A Improvements 9,310,000 10-01-37 9,135,000 11-27-18 2018-A Improvements 2,090,000 10-01-33 2,090,000 04-24-19 2019-A Improvements 11,090,000 10-01-39 11,090,000 Total $65,975,000 Temporary Notes: Final Original Date Maturity Note Amount Series Issued Date Amount Outstanding 2018-2 11-27-18 11-15-19 $13,500,000 $4,945,000(1) 2019-1 04-24-19 05-01-20 6,085,000 6,085,000 $11,030,000 (llExcludes the portion of this note that will be redeemed with proceeds from the sale of the Series 2019- A Bonds. STATE OF KANSAS OFFICE OF SECRETARY OF STATE I, ScoTT SCHWAB, Kansas Secretary of State, certify that the records of this office reveal the following: The Certificate of Manual Signature for TRENT DAVIS, MAYOR CITY OF SALINA, KANSAS was filed in this office the 22nd day of May, A.D. 2019 as provided by K.S.A. 75-4001 through 75-4007. IN TESTIMONY WHEREOF : I hereto set my hand and cause to be affixed my official seal. Done at the City of Topeka, this 25th day of July, A.D . 2019 SCOTT SCHWAB KANS AS SECRETARY OF STATE CERTIFICATE OFMANUALSJGNA'J1JRE OF THE CLERK OFTHECin' OF SALINA. KANSAS IN THE OFFICE OFIBE SECRE'fARX OF STATE OFTBE §TATEOFICANSAS STATE OF KANSAS COUNTY OF SALINE ) ) SS. ) I, the undersigned, Shandi Wicks, being duly swom OD oath certify that I am the duly qualified Clerk of the City of Salina, Kansas, and that the signature appearing below is my signature and I file herewith this certificate pursuant to K.S.A. 75-4001 to 75-4007, inclusive. Subscn'bcd and sworn lo before me as of July 14, 2014. (SEAL) My commission expires: 't..-J!H1 J-1 RECEIVED JUL 2 ! 201' KRIS W. KODACH SECRETARV OF STATE REGISTERED NUMBERR-1 REGISTERED $6,085,000.00 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York Corporation ("DTC"), to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. Interest Rate: 1.58% UNITED STATES OF AMERICA STATE OF KANSAS COUNTY OF SALINE CITY OF SALINA GENERAL OBLIGATION TEMP""'u~ .. SERIES 2019- Maturity Date: May 1, 2020 CUSIP: 794744 CK6 REGISTERED OWNER: PRINCIPAL AMOUNT: HTY-FIVE THOUSAND DOLLARS PRESENTS: That the City of Salina, in the County of Saline, State of Kansas (t alue received, hereby acknowledges itself to be indebted and promises to pay to the gi wn shown above, or registered assigns, but solely from the source and in the manner rein spec · ed the Principal Amount shown above on the Maturity Date shown above, unless called io prior to said Maturity Date, and to pay interest thereon at the Interest Rate per annum shown above omputed on the basis of a 360-day year of twelve 30-day months), from the Dated Date shown ab , or from the most recent date to which interest has been paid or duly provided for, payable at maturity or earlier redemption (the "Interest Payment Dates"), until the Principal Amount has been paid. Method and Place of Payment. The principal or redemption price and interest thereon of this Note shall be paid at maturity or upon earlier redemption to the person in whose name this Note is registered at the maturity or redemption date thereof, upon presentation and surrender of this Note at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Note Registrar"). Such amounts shall be payable (a) by check or draft mailed by the Paying Agent to the address of such Registered Owner shown on the Note Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of a payment to Cede & Co. by electronic transfer to such Owner upon written notice given to the Note Registrar by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. The principal or redemption price of and interest on the Notes shall be payable in any coin or currency that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. Interest not punctually paid will be paid in the manner established in the within defined Note Resolution. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the hereinafter defined Note Resolution. Authorization of Notes. This Note is one of an authorized series of Notes of the Issuer designated "General Obligation Temporary Notes, Series 2019-1," aggregating the principal amount of $6,085,000 (the "Notes") issued for the purposes set forth in the Resolution of the Issuer authorizing the issuance of the Notes (the "Note Resolution"). The Notes are issued by the authority of and in full compliance with the provisions, restrictions and limitations of the Constitution and laws of the State of Kansas, including K.S.A. 10-101 to 10-125, inclusive, specifically including K.S.A. 10-123, K.S.A. 10- 620 et seq., K.S.A. 12-63 lr ands, K.S.A. 12-685 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., and Article 12, Section 5 of the Constitution .f the State of Kansas, all as amended and supplemented from time to time, and all other provisions o t · laws of the State of Kansas applicable thereto. General Obligations. The Notes constitute general o the Issuer payable as to both principal and interest in part from special assessments th roperty benefited by the construction of certain Improvements (as said term is d e ote Resolution), and if not so paid, from ad valorem taxes which may be levied withou s to rate or amount upon all the taxable tangible property, real and personal, with" . e terri i ts of the Issuer. The balance of the principal and interest on the Notes is payable .,: re · taxes which may be levied without limitation as to rate or amount upon all th t gi :e property, real and personal, within the territorial limits of the Issuer. The full fait , t' edit d res ces of the Issuer are hereby pledged for the payment of the principal of and interes on this Not tid the issue of which it is a part as the same respectively become due. Redemption Prior to forth in the Note Resolution. otes are subject to redemption prior to maturity as set Not s are being issued by means of a book-entry system with no es to be made except as provided in the Note Resolution. One Note · certificate with respe on which the Notes are stated to mature or with respect to each form of Notes, registered in the no nee name of the Securities Depository, is being issued and required to be deposited with the Securit ~ Depository and immobilized in its custody. The book-entry system will evidence positions held in the Notes by the Securities Depository's participants, beneficial ownership of the Notes in Authorized Denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The Issuer and the Note Registrar will recognize the Securities Depository nominee, while the Registered Owner of this Note, as the owner of this Note for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Note, (ii) notices and (iii) voting. Transfer of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfer of principal, interest and any redemption premium payments to beneficial owners of the Notes by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The Issuer and the Note Registrar will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Note, notwithstanding the provision hereinabove contained, payments of principal of, redemption premium, if any, and interest on this Note shall be made in accordance with existing arrangements among the Issuer, the Note Registrar and the Securities Depository. Transfer and Exchange. EXCEPT AS OTHERWISE PROVIDED IN THE NOTE RESOLUTION, THIS GLOBAL NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. This Note may be transferred or exchanged, as provided in the Note Resolution, only on the Note Register kept for that purpose at the principal office of the Note Registrar, upon surrender of this Note together with a written instrument of transfer or authorization for exchange satisfactory to the Note Registrar duly executed by the Registered Owner or the Registered Owner's duly authorized agent, and thereupon a new Note or Notes in any Authorized Denomination of the same maturity and in the same aggregate principal amount shall be issued to the transferee in excha,nge therefor as provided in the Note Resolution and upon payment of the charges ther :n prescribed. The Issuer shall pay all costs incurred in connection with the issuance, payment and initia egistration of the Notes and the cost of a reasonable supply of note blanks. The Issuer and the E ~· g Ag . t may deem and treat the person in whose name this Note is registered on the Note Regis r as e ~ te owner hereof for the purpose of receiving payment of, or on account of, the p~nci .or e de . ti~n price here~f and int~rest due hereon and for all other purposes. The Notes are is n Uy re 1stered form m Authonzed Denominations. Authentication. atory for any purpose or be entitled to any security or benefit under the hereinafter efi · . o Resolution until the Certificate of Authentication and Registration hereon shall . fu l executed by the Note Registrar. to be done and to exist precedent performed and do exist in due an the State of Kansas, and that th exceed any constitutional or ' IN WITNESS WHEREOF, the Issuer has caused this Note to be executed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its Clerk, and its seal to be affixed hereto or imprinted hereon. CITY OF SALINA, KANSAS By:~·~r/ Trent \V. Davis, M.D., Mayor ATTEST: By: Clerk This General Obligation Temporary Note shall not below following registration by the Treasurer of the State ' Clerk CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Note is one of a series of General Obligation Temporary Notes, Series 2019-1, of the City of Salina, Kansas, described in the within-mentioned Note Resolution. Registration Date __________ _ Registration Number: 0322-085-042419-574 Office of the State Treasurer, Topeka, Kansas, as Note Registrar and Paying Agent CERTIFICATE OF C STATE OF KANSAS ) ) SS. COUNTY OF SALINE ) The undersigned, Clerk of the City of. a been duly registered in my office accordin o i:l:w a OFFICE OF THE TREASURER, STATE OF KANSAS ~·~ By: ~~~~~~~~~~~~~ Clerk JAKE LATURNER, Treasurer of the State of Kansas, does hereby certify that a transcript of the proceedings leading up to the issuance of this Note has been filed in the office of the State Treasurer, and that this Note was registered in such office according to law on ___________ _ WITNESS my hand and official seal. (Seal) By: Treasurer of the State of Kansas NOTE ASSIGNMENT FOR VALUE RECENED, the undersigned do( es) hereby sell, assign and transfer to (Name and Address) (Social Security or Taxpayer Identification No.) the Note to which this assignment is affixed in the outstanding princjl!al amount of $ , standing in the name of the undersigned on the books of the Note Registr. r. The undersigned do( es) hereby irrevocably constitute and appoint ent t ransfer said Note on the books of said Note Registrar with full power of substitution in the p em Dated ________ _ Name ature (Sign here exactly as name(s) ~""'~wear on the face of Certificate) Signature guarantee: By _______________ ~ LEGAL OPINION The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, P.C., Bond Counsel, which was dated and issued as of the date of original issuance and delivery of such Notes: Governing Body City of Salina, Kansas Country Club Bank Prairie Village, Kansas GILMORE & BELL, P.C. Attorneys at Law 2405 Grand Boulevard Suite 1100 Kansas City, Missouri 64108 Re: $6,085,000 General Obligatio Salina, Kansas, Dated April . of the City of alina, Kansas (the "Issuer"), in connection with its issuance of the above-captioned In this capacity, we have examined the law and the certified proceedings, certifi tions ot}J.e documents that we deem necessary to render this opinion. Capitalized terms not o s· · d . fined herein shall have the meanings ascribed thereto in the resolution adopted by the d)'. of the Issuer authorizing the issuance and prescribing the details of the Notes. material to our opinion, we have relied on the certified proceedings fficials and others furnished to us without undertaking to verify them Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The Notes have been duly authorized, executed and delivered by the Issuer and are valid and legally binding general obligations of the Issuer. 2. The Notes are payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certain improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Notes to the extent that necessary funds are not provided from other sources. 3. The interest on the Notes (including any original issue discount properly allocable to an owner thereof) is: (a) excludable from gross income for federal income tax purposes; and (b) not an item of tax preference for purposes of the federal alternative minimum tax. The opinions set forth in this paragraph are subject to the condition that the Issuer complies with all requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be satisfied subsequent to the issuance of the Notes in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to comply with certain of these requirements may cause interest on the Notes to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Notes. The Notes have not been designated as "qualified tax-exempt obligations" for purposes of Code § 265(b)(3). We express no opinion regarding other federal tax consequences arising with respect to the Notes. 4. The interest on the Notes is exempt from income taxation by the State of Kansas. We express no opinion regarding the accuracy, completeness r sufficiency of the Official Statement or other offering material relating to the Notes (except to extent, if any, stated in the Official Statement). Further, we express no opinion regarding tax o segue es arising with respect to the Notes other than as expressly set forth in this opinion. ' · The rights of the owners of the Notes and the · · o bankruptcy, insolvency, reorganization, moratorium an other generally and by equitable principles, whether considered affecting creditors' rights no ligation to revise or supplement this :o our attention or any changes in law that AGREEMENT BETWEEN ISSUER AND AGENT $6,085,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 DATED APRIL 24, 2019 THIS AGREEMENT, dated as of April 24, 2019, between the City of Salina, Kansas, a municipality (the "Issuer"), and the State Treasurer of Kansas, as Agent (the "Agent"). WHEREAS, for its lawful purposes, the Issuer has duly authorized the issue of the above- captioned notes (the "Securities"), and the Issuer wishes the Agent to act as its Paying Agent, Note Registrar, and Transfer Agent for the Securities: Now, therefore, it is hereby agreed as follows: I. APPOINTMENT Issuer hereby appoints or has previously appointed the State Treasurer of Kansas to act as Paying Agent, Note Registrar and Transfer Agent for the Securities. The State Treasurer of Kansas hereby accepts its appointment as the Paying Agent, Note Registrar and Transfer Agent. II. BASIC DUTIES A. Issuer or its duly authorized representative agrees to furnish Agent the name(s) and address( es) of the initial registered owner( s) of the Securities together with such registered owners' tax identification (social security) number(s), the maturity date(s), denomination(s) and interest rate(s) for each Security. B. Agent shall manually authenticate the originally issued Securities upon the written order of one or more authorized officers oflssuer. Thereafter, Agent shall manually authenticate all Securities resulting from transfer or exchange of Securities. C. Agent shall maintain an office in the City of Topeka, Kansas, where Securities may be presented for registration, transfer and exchange; and shall also maintain an office in the City of Topeka, Kansas, where Securities may be presented for payment. Agent shall keep a register of the Securities and their transfer and exchange. D. Agent may rely upon any document believed by it to be genuine and to have been signed or presented by the proper person. Agent need not investigate any fact or matter stated in the document. Agent undertakes to perform such duties and only such duties set forth in K.S.A. 10-620 et seq., except as specifically provided in this Agreement. E. Agent shall notify the owners of the Securities upon default in payment of principal or interest on the Securities and the Agent shall have no duties or responsibilities thereafter. III. COMPENSATION Issuer covenants and agrees to pay to Agent, as reasonable compensation for the services provided as Agent, an initial setup fee of $300, a registration fee of $30, plus a fee of $250, which is based on "Book- entry Only" Securities. This amount will be due at the time of registration unless such fee is to be paid from the proceeds of the note issue in which case Issuer agrees to pay such fee within two (2) business days of the closing of the note issue. In addition to the aforementioned fee, Issuer covenants and agrees to pay to Agent the fee as stated and required by K.S.A. 10-505 for performing the duties of paying the principal of the Securities. Iv. STANDARD OF PERFORMANCE Issuer shall provide, or shall cause to be provided to Agent, a designation of whether its Securities are to be issued in certificated or uncertificated form, or both. A. STATEMENTS OF OWNERSHIP Agent agrees to provide Statements of Ownership to the owner ofuncertificated Securities. Such Statements shall be in accordance with the standards set forth by the Attorney General. All Statements shall be issued in the denominations of $1,000 or $5,000 or integral multiples thereof except for one additional Security in another denomination, which additional Security shall mature in the initial maturity year of the series of the Securities. Interest is computed on the basis of $1,000 or $5,000 units and in all transactions involving the payment of interest, fractions of a cent equaling or exceeding five mills shall be regarded as one cent; fractions of a cent less than five mills shall be disregarded. Agent shall at all times maintain an adequate supply of Statements of Ownership for any anticipated transfers or exchanges of the Statements. B. CERTIFICATED SECURITIES All certificated Securities issued by Issuer under this Agreement shall be in accordance with the standards set forth by the Attorney General and unless otherwise authorized by Agent, the principal thereof shall be payable only upon surrender of the Security to Agent. All certificates shall be issued in the denomination of $1,000 or $5,000 or integral multiples thereof except one authorized Security in another denomination which additional Security shall mature in the initial maturity year of the series of Securities. Interest is computed on the basis of $1,000 or $5,000 units and in all transactions involving the payment of interest, fractions of a cent equaling or exceeding five mills shall be regarded as one cent; fractions of a cent less than five mills shall be disregarded. Issuer shall at Issuer's cost provide Agent with an adequate supply of certificates for any anticipated transfers or exchanges of the certificates. Issuer shall be responsible for the payment of the printing or other expenses for such certificates. Issuer shall be responsible for obtaining appropriate "CUSIP" number(s) and shall notify Agent of each number(s) prior to the issuance of the applicable Securities. C. INTEREST CALCULATIONS Agent shall calculate interest on the basis of $1,000 and $5,000 units, or in the case of one odd denomination, calculate the unit separately. Each intermediate unit calculation is first determined, then rounded to the sixth decimal position; i.e. whenever the seventh decimal 2 place is equal to or greater than five the sixth decimal place is increased by one. The final per unit calculation is subsequently rounded to two decimal positions. (See Attachment "A" for sample calculation.) D. SURRENDER Securities surrendered for payment, cancellation or partial redemption shall be cancelled by Agent and returned to Issuer in accordance with K.S.A. 10-111. E. TRANSFERS AND EXCHANGES 1. When Securities are presented to Agent for transfer or exchange, Agent shall so transfer or exchange such Securities if the requirements of Section 8-401 (1) of the Uniform Commercial Code are met. 2. In accordance with the authorizing Resolution of the Issuer (the "Note Resolution"), payments of interest shall be made to the owner of record of each Security as of the close of business on the fifteenth day of the month preceding each interest payment date. The Agent shall make such payments to the record owner of each Security as set forth on the registration books maintained by Agent as of such date. 3. Agent shall not be required to transfer or exchange any Security during a period beginning on the day following the fifteenth day of the month preceding any interest payment date for such Securities and ending at the close of business on the interest payment date, or to transfer or exchange any Security selected or called for redemption in whole or in part subsequent to the date notice of such redemption is given in accordance with the Note Resolution authorizing the Securities. F. REGISTRATION DATES AND FUNDS FOR PAYMENTS Date of Registration shall be affixed on the initial Securities. Subsequent transfers or exchanges shall bear a Date of Registration as of the date that all the required documentation is received at the Agent's official place of business. Issuer will provide funds to make any interest or principal payments in accordance with K.S.A. 10-130 and amendments thereto. Agent is hereby authorized to effect any semiannual payment of interest or any principal by charging the Issuer's Fiscal Agency account with Agent. G. REPLACEMENT OF SECURITIES If the owner of a Security claims that a Security has been lost, destroyed or wrongfully taken, Issuer shall issue and Agent shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met. Only Agent shall perform this function. An indemnity note and affidavit of loss shall be provided to Agent and Issuer at the expense of the owner of the Security. Such indemnity note and affidavit of loss must be sufficient in the judgment of Issuer and Agent to protect Issuer and Agent from any loss which any of them may suffer ifthe Security is replaced. Issuer may charge the Security owner for its expenses in the replacement of a Security. 3 H. REDEMPTIONS Optio11a/ Redemptio11. If any Securities are to be redeemed pursuant to an optional redemption in accordance with their terms, Issuer agrees to give Agent at least fifteen (15) days written notice thereof prior to the notice to be given the Security owners. If there is no provision for notice to the Security owners, Issuer agrees to give at least thirty (30) days written notice to Agent. Notice of Redemption. Agent shall then notify, by ordinary mail, the owner of such Securities to be so redeemed. Agent shall select the Securities to be so redeemed. Agent shall not be required to exchange or register a transfer of any Security for a period of fifteen (15) days preceding the date notice is to be provided to the Security owners for the purpose of selecting Securities on a partial redemption. Further, in the event notice is given to Agent for a complete redemption of the Issue according to the terms of the Note Resolution, Agent shall not be required to transfer or exchange any Security beginning on the day following the 15th day preceding the date set for redemption. I. MISCELLANEOUS Agent hereby acknowledges receipt of numbered Securities oflssuer (in a number equal to one Security for each maturity) for registration and exchange, and shall safeguard any "blank" Securities held for purpose of exchange or transfer. J. REPORTS Agent shall provide Issuer an annual report of the activity with respect to the issuance of Securities upon written request oflssuer. K. CONSTRUCTION This Agreement shall be construed in accordance with the laws of the State of Kansas and also the Note Resolution authorizing the issuance of the Securities. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 4 t~ ·. #9 ~'{ OFs -,/ ,, . (i\ •·••••••• '4(,, ~.,-. ~" e••fJ'· • ••• ;,I'"~ . . ...... . ··~ 1 -....... : l 0p...GAN1z~0 \ . .r ·~1 rt_ : • ~ ' c:..~ ,. c , ..... .· ·~ 1 ~70 iJ> ·. _1 ~. (..,, : > . :.(sE~ , .. ·~-.• l.ff l ·--~ ... ....... C;, \· ,/.., ~ .... , '· i.':r -~47 : . ~---:_;:-:.:: ~ AITEST: By:~~ Clerk (SEAL CITY OF SALINA, KANSAS By:_~_~_ .. ......._[)_~~\ ;.__rP __ Mayor OFFICE OF THE TREASURER OF THE STATE OF KANSAS Director of Fiscal Serv ices (Signature page to Agreement Between Issuer and Agent -Notes) ATTACHMENT "A" SAMPLE $5,000.00000 ........................ Bond Unit x .06875 ........................ Interest Rate 343.750000 Rounded to six decimal places I 360 ........................ Days per year .954861 Rounded to six decimal places x 180 ........................ Day in interest period 171.874980 (Rounded to second decimal= $171.87) Unit interest is then multiplied by the number of units in the maturity. A-1 • Blanket Issuer Letter of Represe1 atations rro>ie QorqilDd Ir/..., tidies ml Gentlema: 'Ibis let= lets forth oar mrdcnt11nling with rapc:ct to ID mws (the *Socmlllcs1 tbd la=' sbaD n:quest be mide ~ f'oz:depcd!')''JheJ)eposltmJTrmtOapeay("DTC"). • "lb Jzll!Dce Ul'C ID ICCICpt the SecurJdes a ~e (or doped It DJ'C, mid ID ab accarda. ce With Dm &les \\'Ith rmpect lo the Seen!SHfo..r. lssuer represents to DIC thll lmlm'..ol eom,pJy with the reqalrcments stated In MO Opera6mlal AsnDpmezm, u tbe:y may be mDeDdal baa dmetotfme. lalha ·a ' ! SCHi'DVLIA ~Bllalztlallrl.lkef'ltqa I !In) SAMPLE OJl'P'ERINGDbcoMENrLANGUAGE pp~~K.£Nl'R-YJISQANCB ~-=tlii:;il_,, ..... .._ . . 2. DTC. Ille wmld'& Jl!plt sec:mfties defGllOIJ, I& a ll•"''*iimpcm trmt OD1J111111 cwp:adml 1lndm' tbe New Yadc Bat1Di I.aw, a "bmtma Dii'"' tbJ• wi1hfD tbll ,,,,..nq of 69 New Ya:t Briing Law, a member Clftbehdml Rmm S)'ltem. a "cloldzta c:ccpm:atillll"wllblDtbe..m,or111c Ncnr YClll UmtoaD CommcrdaJ Oodr, mad a "dadDI aplll:f' aepuzecl pmsulllt ID 6e pnMdam DfBectkm 17A.. or die Sccmi1ic:s !lrllanie· Ad of 1954. DTC hD1ds ad prorides met scniclna fhlr rm:t 3.5 miJ1ian kncs of U.S. ad acm-U.S. ~ fscaes. CCllpCllale and nwmiclpa1 c1ebt Irma, ad maaq matct fmlaW (6- over 100 commie&) that Me's pmtidpmds ("DJaect Pldic:lpaata") ~ wJlh J>TC. DTC aJso Witllfcs tbe poet-trade ieulemmt mm& Dhct Pll1ldpals Of ales ad CllJm secamles tnMlcticm fD &;i~altcrJ securftiel. Chroaah e1ectnmlc com,ateriDd boalcatzy tramin lml pWaes bdwecD Dhcl ~· ICCounls. Tbfs dfmlnmz the need ... physical mu•cmcut or~ c:c:dificm. Dl=t hdicfplDla fDcJude 1'otll U.S. ad llCID.1.J.S. ICCllritics 1iralccn ad cSca1ca. laab, tm&t CUiC ks, c1mblc •pcudam. and cr:rlliD od>t:r orpnfntioas DTC Is I wboD,y-owDed nbddiary of 1bo Dep Dlllm) ln&t a aami Cozpcndcm ('TJ'J'(X"). JJ'J'CC h the boJdfnl complll1 &Ir DTC. Nldoaa1 Senndds a.ma COlpcatiaa ud Fhed Isicome Oeama Co!pcmtirm, ID ofwhkh azenlfstaecl clcalasapndea. Dra: fl owmcS "1 tbe mers cllll 1ep!ated ......_, laGGCSI to Clac DTC Qm:m I• also anURhle111 adlelR IDC!a • bolb U.S. Ital! ucm-U.S. RCUl'fda brol::m ad 6edelr. bln1s, tnist c "'f • 011, w! deadag CCllJ M 1•m 6llt olcm-&rqap « mamtm. • mstodid rdatiomhip with • Dircd Plrtic:iplat. e!tlier ~ cir fadirflcdy ("Indinl:t ~. DTC Jm £tlmdlnl A Poar'a ldgbclt lldq: MA. Tllo DTC MCI lfPllOlble to fta Patlc:iptm ac an &le with Ille Socmities IDl1 Jizc1mr C)mnfa!aa. Men Id M 11 ••Rm lhaal J>'t'C CID be 1bmld at'""',dcsc.mt ad WWW.die.mg. • • 3. Pmdiues r4Secadtier aade:rdze DTC IJ'llem mast be made 1'J ar6malh DJreat PlrlWpads, wlslch wm ace1ve a credit tar tLD Sermi6es 1111 ~. aecank. '1'2e ownmblp mr..t or ..m 8CbaJ pmcbmr or cac1i SecmitJ ('"Bmdit:i•l Ownd') 11 m 1am 1a be ncmde4 ca Gia DJrect ad l:adim:t Pmtk:ip&Dfl" raconla. 8c:Ddida1 Chnal .m not n:ccive WJilim cu1!ji 111L:m fram D'l'C of tlicir JAlldaa. B n SdlJ Oncn -, Jionver. mquicted to nccln wliaen ""'&1111•'1111 JXO•J6c dmDI. of die lr'lmlCt:iao. u well • paiocHc lflllmMrdl ofabeir-,..,,,,,,,.. 6om 6a Dh:t or la1inct hiliciplld dlraaP wlridl file Benelicial Onerc:ntmd Into tbe •••••ndbL 'J'randm of OWlllCl&bip illlmlllfl11aa Secmftla me to be ~ 1iJ mtdts made Cll tbc boob ol J>iract Incl Wind Pd;JJ*lfs ldiq ma Wair or Bacficlal Ownm. Bcndiclal Ownm will mt recC'fO catificatcs npu:a:atia~ 6cir ommhip Intl!! edc .in Scclddca, accpt m tbcmnUbltme af'CbD l»oot41111Q111mlorthoSecmftiM I& II• •hw!. 4. To ficfUtl!o mb1ocpat frlnrin. aD Somdfics clepMitw! by 1>fnict ~ wffh DTC m repta:cd Ill Ille mme ofDIC's patDmhiJt •niliee, Ce& 4: Co.. or m:1a ~ mme·u mq be n:qucsd 11y m lmlbmftat 11paent111we ~n:rrc. TU c1rpo&it or Secaddcs rill MC ad tbclr uaflltllllw ID ae 111me otOede It Co. or wll otbet DtC nommoo doDCll dc:ct C'/ c:blDp ill 1'cDldici&I OWJIClllJip. DIC 1111 DO lmowtedp Dflba ~ BczldcilJ OWIWll af"lbo Secmtda; DTC°I ncmdlrdect 1111.rtbe ldealflyOf'dla Dfrllct Pmtic:fpals lo wlao acccmntc lllch Secmridea n.cndllld. ~ mq ar 11a1•11t tie Bwdicftl <>wmn. 1k J>ba:C ad lndbctPlrtfeQmm wm nmamrapoadblc fbrmp.,ecmam orehdr hoWop on bebl1f of fbelroslforne'L • SalEDULIA Cl'• llWcdZ...Leaercr.. n bl) 5. Coaveyace ot llOdca ad odia' C>* I mlcdnm by DTC ID Direct Pmldpallt by Dlrccl ~to Jmh:t Partlcfpms. ad 11)' Direct Pir6dplzds ml J:adirldPlrdclpants to Badd•\ 0.-. will be pme4 bf m•nprNllll mg 6em. abjeclto lflY 1111111111 crreplltm)r nqalxw u DJ bo ID enct lam time to time. [Beneftdal Owma Of Secadda may whb 1D 11b oarll!D tap 1D q 11cn• die tmnmfnlarl ro 6rm of aot1oa or cfpl&nt mm wllh IDIJICCl co 1bo kn'flrs; IUCh • udr:alpdom. tendcn. cklmJls. and pDplllOd '" .,, tmmh! to 6D ._., dclc 1 ..... ,,, Par 'DDIPJtt. BCDdldll Owllea of Securtticl mqwish to accrllln 1bat Gao DCllDiDeo lddira diD Seanftiis far tbelr'beaefit ...... to .. llD4 tnmmft ~ fD BmefichJ Onm. In 6D lltamtiftt B n F.:ht 0.... DD)' wllh tD pDVf&1e Mr mm&S 111111 .&fl I to tJle nJisbr ad request Giit capies ofDcticel 1ie'prcnldec! dlnaJy to t1iem.] . . '[G. lledempllon nodces 6a1l be teat to DTC. Um dllD aD of Cbe Sec:arilfes wfdda m fame a hbra raleamd, M'C"1pmtlcofs1D k1t1 ml11e by loc die llDDlmt of'6D tasaa1 ot ath J>bct Pmicfpm ID lllCb lauuo kl rdeemeiL) • • 7. NeflbetDTCacrCede A Co. (DOrfif11 ollaer DTCDCllDilee) wDI ~arwta with nspectto Secmitles anJea dndrec! by a DJnct Patielplllf in IOCllldaaoo wl& DTC'& MM! Ptooedurw. Ulde:r-its 1111111 prDCedma. DTC mans a Ommbm Pz011 to 11111cr u IOlll a pCllliWo .amr lie ncad date. ne OJndms PrmJ mfps cede A Co.'1 CCUP'llii\S s vacina rishts to dlbso Direct~ to wllasc lc:Cam!l 8i:adics art credited OD lbenc:md dllc (itfr.ntiW in a lblq aUldled to tho Omnlbat Jirax1), s. Rodemptim pocoec11, clistdbaliom, -1 c!Mdaad Pl)'lll&:ldl cm the Secmtliel wm\o made to Cede A Co.. or ach cCl.e:r nrmfnee u may be nqDellld 11)' u. n!hdzed ~ of M'C. M'C's pnctice is to mdJt Direct Participlms' lfiC'Niiill 1!pClll DJ'C'I rccefpt Of fads sad c:aaa:pQNlina c1cCaD fnfoanaibl &am lssa:r ar A.pm. cm paylblc dllll: fa wdueo wlda lbclr' iapcc:tin JddiDss lbowD m DTC'1 secords. h)iiCilll by Paddpals IO Bcoc:fiQa1 0n=s wllJ bo paned bf ~ imtzactlom end custcamy pnclices, as is ~ cac wftb ICCDritics ldd far the lccomds of omtnmrn iil hemr film or resistaed iD ..__ .,.... • amt wm be the mpom™JftJ of IDd1 Padicipam ID4 DOl ofD'ro. Apat. ar Jaacr, ~to 11J1 lta!atmy mzrplatory Rqahanmll u may be ill dl'ect 6Dm li1Dc to timt. ra,mmtof redemption p..w....s.. ~ lllllc!Mdmd pa)uamll to Cede& Co. tar ldChCllbmmimimeu..,be rcqnesle4 by a llDlhadml aepce:seallfM otD'IC) is tlse ftllloulblHIJ otJmrz er As=.~ of IUdl pajWids lo l>imc:t Pmddpam wDI Le 6D 1C1J011Ulil.J of'DTC, ml diibuw11•• of m :s-JDIQdl to die h ftefal Owllc:zs wUJ be die nlpCllll5bDfly ofDindad Jlldlnc:t J"mdc:; IDIL . . (9. A Bmdidal Owzia' lblD alvo llOtlce to elect so kw Its Sec:uritfea pmchlled or ""'deled, 1brUltP its Pmticlpmlo tD [T~ A&eat. mllball ef!llct dcDTay oflUCb Becmftiec b)' ..-, die Direct brticipant to tamd'cr ~ l'llUc:;m4'1 iatcrat m Cbo Scc:aridcll. on DTC'a recadJ. to [T~ Apa!. '1'be aeqakmamt for JlhJ*II dcliYaJ 'of Secmliies ID • • .., Cia wllla ID oplicma1 lmder or a inanr. eypardme w'in be dcemrd afidie4 ""-6e OWDdafp riJb1s fn die Se=fdcs ... , ..... ed by J>frDc:t Paltlclplals oD D'l'C'• ncards and folloN 1')' • book-ca117 credit of CllDdcnd SecadtfestD~ Apat'1DTCllCCOllllt.) 10. DIC may c1llc ;ofmc Jlft'Wldlas 111.mc. • dlpolllllJ wfdl rapeot to die Sec:uddes u ay time by JMq rasomblo llOdce ID laAcr' er Apal. Umlll' arh chcau•• ca, m Gao mat dma mcc & DI" c!epocflarJ k llOt obbifncd. SccmitJ ca1ifica me ncpimd to lie J!linled IDd deliftnd. 11. Iss= 1Dl1decide10discoDtilmc1llC oftbc l7llCm of~ tnm&a 6rcna"1 D'JC (or a succcacr seel1dties dcpositCll)'). In tblt CllftDf. Sec:mft;y c:atl&calcs wDl be pinlecl ad dcUftRl4 tD OTC. • 12. The bdbnnatfcm tD this sec1km cancanfD& JJTC ad DTC'• IJoaHalry l)'llaD babcca oblaincd ti'oal IOUrCa Cbatlaaerbollmil to bcrdiahJc, batlaaartal'a110~ llr1be ~ the:eot BLOR °"'251:18 UNDERWRITING SAFEKEEPING AGREEMENT BY AND BETWEEN DEPOSITORY TRUST COMPANY AND CITY OF SALINA, KANSAS AND THE OFFICE OF THE KANSAS STATE TREASURER $6,085,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 DATED APRIL 24, 2019 In order to induce the Depository Trust Company (the "DTC") to accept delivery of the above captioned notes (the "Notes") for safekeeping prior to the delivery of the Notes on April 24, 2019 (the "Closing Date"), the City of Salina, Kansas (the "Issuer"), and the Treasurer of the State of Kansas (the "Agent") hereby agree to place the entire principal amount of the Notes, in the custody, control and possession of DTC at least one day prior to the Closing Date. The Issuer further agrees that by copy of this letter appropriately executed, it will notify DTC to follow the instructions of the underwriter of the Notes (the "Underwriter") in distributing the Notes. DTC will safekeep and hold in escrow the Notes until it shall have received notification from one of the following authorized representatives of the Issuer to release or return the Notes: Shandi Wicks, Clerk, or Gilmore & Bell, P.C., Bond Counsel. Notification may be made by telephone or by receipt of an executed notice, delivered or telecopied to DTC; provided, however, that if the notification is made by telephone, written notice must be sent within 24 hours of the original notification. In the event the Issuer executes the release of the Notes, DTC will distribute the Notes pursuant to written instructions provided by the Underwriter; however, in the event a demand for the return of the Notes is received, DTC shall return the Notes as soon as practicable, but in any event, no later than the following business day. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] CITY OF SALINA, KANSAS Dated: April 1, 2019 By: ?3JJ\.OA Y1dA lAJ( (tu Clerk (Signature page to Underwriting Safekeeping Agreement -Notes) Moony's INVESTORS SERVICE Rating Action: Moody's assigns Aa3 to Salina, KS's GO Bonds, Series 2019-A and MIG 1 to GO Temp Notes, Series 2019-1 27 Mar 2019 New York, March 27, 2019 -Moody's Investors Service has assigned a Aa3 rating to the City of Salina, KS's $11.4 million General Obligation Internal Improvement Bonds, Series 2019-A and a MIG 1 rating to the city's $6.1 million General Obligation Temporary Notes, Series 2019-1. Moody's maintains the Aa3 rating on the city's outstanding general obligation unlimited tax debt. Post sale, the city will have $84.2 million in general obligation bonds ($17 .1 million of which is supported by the water and sewer system) and $11 million in general obligation temporary notes outstanding. RATINGS RATIONALE The Aa3 rating reflects the city's moderately-sized tax base that serves as a commercial and retail center for surrounding communities in central Kansas (Aa2 stable), below average yet improving reserves resulting from the recent trend of surplus financial operations, and above average, though manageable, debt and pension burdens. The MIG 1 rating on the notes reflects the city's underlying credit characteristics inherent in the long-term Aa3 general obligation rating, as well as expected favorable market access for the takeout bonds and strong takeout management including a history of issuing takeout bonds in advance of maturity. RA TING OUTLOOK Moody's does not generally assign outlooks to local government credits with this amount of debt outstanding. FACTORS THAT COULD LEAD TO AN UPGRADE -Substantial growth in tax base without an offsetting increase in debt -Significant increase in reserves FACTORS THAT COULD LEAD TO A DOWNGRADE -Further leveraging of the tax base absent corresponding valuation increases -Contraction of reserves LEGAL SECURITY The bonds and notes are secured by an unlimited ad valorem tax pledge. The full faith, credit and resources of the city are irrevocably pledged for the prompt payment of the bonds and notes. USE OF PROCEEDS The Series 2019-A bond proceeds will provide for long-term financing of infrastructure projects initially financed with temporary notes. The Series 2019-1 note proceeds will provide the interim construction financing for infrastructure improvements including landfill improvements, police parking, neighborhood improvements, and river renewal. PROFILE The City of Salina is located in north central Kansas, near the geographic center of the contiguous United States. It is the seventh largest city in Kansas, with a 2017 estimated population of 47,000. METHODOLOGY The principal methodology used in the long-term rating was US Local Government General Obligation Debt published in December 2016. The principal methodology used in the short-term rating was US Bond Anticipation Notes published in August 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies. REGULA TORY DISCLOSURES For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com. Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review. The person who approved the long-term underlying rating is Alexandra Parker, Managing Director-Public Finance, Regional PFG Dallas, Journalists: 1-212-553-0376, Client Service: 1-212-553-1653. The person who approved the short-term underlying rating is Roger Brown, Vice President-Senior Analyst/Manager, Regional PFG Dallas, Journalists: 1-212-553-0376, Client Service: 1-212-553-1653. Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating. Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Kenneth Surgenor Lead Analyst Regional PFG Dallas Moody's Investors Service, Inc. 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CLOSING CERTIFICATE $6,085,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 DATED APRIL 24, 2019 The undersigned Mayor and Clerk of the City of Salina, Kansas (the "Issuer''), make this Certificate for inclusion in the transcript of and as a part of the proceedings authorizing and providing for the issuance of the above described notes (the "Notes"); and certify as of April 24, 2019 (the "Issue Date"), as follows: 1. Meaning of Words and Terms. Capitalized words and terms used in this Certificate, unless otherwise defined in this Certificate or the context requires otherwise, have the same meanings ascribed to such words and terms in the Note Resolution (defined below) authorizing the Notes. 2. Transcript of Proceedings. The transcript of proceedings relating to the authorization and issuance of the Notes (the "Transcript"), furnished to the Purchaser of the Notes, is to the best of our knowledge, information and belief full and complete; none of such proceedings have been modified, amended or repealed, except as might be shown in the Transcript; and the facts stated in the Transcript still exist. In each instance where copies appear in the Transcript, such copies are true and correct duplicates of the original instruments now on file with the Clerk. All certifications made by the Issuer in the Transcript Certificate dated April 1, 2019 are true and correct as of this date and are incorporated in this Certificate by reference. 3. The Note Resolution. The Issuer is issuing and delivering the Notes simultaneously with the delivery of this Certificate, pursuant to and in full compliance with the Constitution and statutes of the State, including particularly K.S.A. 10-101 to 10-125, inclusive, specifically including K.S.A. 10-123, K.S.A. 10- 620 et seq., K.S.A. 12-631r ands, K.S.A. 12-685 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time, and Resolution No. 19-7692 of the Issuer duly adopted by the governing body of the Issuer on April 1, 2019 (the "Note Resolution"). 4. Purpose of the Notes. The Notes are being issued pursuant to the Note Resolution for the purpose of paying a portion of the costs of certain public improvement projects (the "Improvements"). 5. Security for the Notes. The Notes are general obligations of the Issuer payable from special assessments levied upon the property benefited by the Improvements and, if not so paid, to the extent necessary, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer, with the balance payable, to the extent necessary, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are pledged under the Note Resolution to the payment of the principal of and interest on the Notes. 6. Sale of Notes. The Notes have been sold at rates not in excess of the limitations set forth in K.S.A. 10-1009. The Notice of Sale dated March 25, 2019 and included in the Transcript constitutes a full true and correct copy thereof. A copy of such Notice of Sale and Preliminary Official Statement was sent to prospective purchasers of the Notes, and to all other persons and firms requesting copies of such Notice of Sale and Preliminary Official Statement. 7. Official Statement. The Official Statement contained in the Transcript constitutes a full, true and correct copy of the Official Statement relating to the Notes. To the best of our knowledge, the Official Statement, other than the sections entitled "The Notes," "The Bonds," "Legal Matters," "Tax Matters," and Appendices B, C and D, about which the Issuer expresses no opinion, is true in all material respects, and does not contain any untrue statement of a material fact or does not omit to state a material fact, necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. As of this date there has been no material adverse change in the financial condition or the financial affairs of the Issuer since the date of the Official Statement. No other event has occurred which is necessary to be disclosed in the Official Statement in order to make the statements therein not misleading in any material respect as of the date of this Certificate. The Issuer has previously caused to be delivered to the Purchaser copies of the Official Statement. 8. Continuing Disclosure Undertaking. The Issuer, in the Note Resolution, has covenanted to disseminate such information as is required in accordance with the provisions of the SEC Rule and the Continuing Disclosure Undertaking, which are included in the Transcript and incorporated in this Certificate by reference. 9. Non-Litigation. There is no controversy, action, suit, proceeding, or to the best of our knowledge, any inquiry or investigation at law or in equity or before or by any public board or body pending or, to the best or our knowledge, threatened against or affecting the Issuer, its officers or its property, or, to the best of our knowledge, any basis therefor questioning, disputing or affecting in any way: (a) the legal organization of the Issuer or its boundaries; (b) the right or title of any of its officers to their respective offices; ( c) the legality of any official act shown to have been done in the Transcript; ( d) the constitutionality or validity of the indebtedness represented by the Notes shown to be authorized in the Transcript; (e) the validity of the Notes, or any of the proceedings had in relation to the authorization, issuance or sale thereof; (f) the levy and collection of an ad valorem property tax to pay the principal of and interest on the Notes; or (g) the federal or state tax-exempt status of the interest on the Notes; wherein any unfavorable decision, ruling or finding would adversely affect the Issuer, the transactions contemplated by the Note Resolution or the Official Statement, or the validity or enforceability of the Notes, which are not disclosed in the final Official Statement. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] 2 WITNESS our hands and the seal of the I uer. Official Title Mayor Clerk (Signature Page to Closing Certificate -Notes) FEDERAL TAX CERTIFICATE Dated as of April 24, 2019 OF CITY OF SALINA, KANSAS $6,085,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 Section 1.1. Section 2.1. Section 2.2. Section 3.1. Section 3.2. Section 3.3. Section 3.4. Section 3.5. Section 3.6. Section 3.7. Section 3.8. Section 3.9. Section 3.10. Section 3.11. Section 3.12. Section 3.13. Section 3.14. FEDERAL TAX CERTIFICATE TABLE OF CONTENTS RECITALS ....................................................................................................................... 1 ARTICLE I DEFINITIONS Definitions of Words and Tenns ....................................................................................... 1 ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS Representations and Covenants of the Issuer. ................................................................... 6 Survival of Representations and Covenants ...................................................................... 8 ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS General .............................................................................................................................. 9 Reasonable Expectations .................................................................................................. 9 Purposes of the Financing ................................................................................................. 9 Funds and Accounts .......................................................................................................... 9 Amount and Use of Note Proceeds and Other Money ...................................................... 9 Multipurpose Issue .......................................................................................................... l 0 No Current Refunding ..................................................................................................... 10 Project Completion ......................................................................................................... 10 Sinking Funds ................................................................................................................. 10 Reserve, Replacement and Pledged Funds ..................................................................... 10 Purpose Investment Yield ............................................................................................... 10 Issue Price and Yield on Notes ....................................................................................... 10 Miscellaneous Arbitrage Matters .................................................................................... 11 Conclusion ...................................................................................................................... 11 ARTICLE IV POST-ISSUANCE TAX REQUIREMENTS, POLICIES AND PROCEDURES Section 4.1. Section 4.2. Section 4.3. Section 4.4. Section 4.5. Section 4.6. Section 4.7. Section 4.8. General ............................................................................................................................ 11 Record Keeping, Use of Note Proceeds and Use of Financed Facility .......................... .12 Temporary PeriodsNield Restriction ............................................................................. 12 Fair Market Value ........................................................................................................... 13 Certain Gross Proceeds Exempt from the Rebate Requirement ..................................... 15 Computation and Payment of Arbitrage Rebate and Yield Reduction Amounts ...................................................................................................................... 17 Successor Rebate Analyst ............................................................................................... 18 Filing Requirements ........................................................................................................ 18 (i) Section 4.9. Section 5 .1. Section 5.2. Section 5.3. Section 5.4. Section 5.5. Section 5.6. Section 5.7. Section 5.8. Section 5.9. Section 5.10. Survival after Defeasance ............................................................................................... 18 ARTICLEV MISCELLANEOUS PROVISIONS Term of Tax Certificate .................................................................................................. 18 Amendments ................................................................................................................... 18 Opinion of Bond Counsel ............................................................................................... 18 Reliance .......................................................................................................................... 18 Severability ..................................................................................................................... 19 Benefit of Agreement ...................................................................................................... 19 Default, Breach and Enforcement ................................................................................... 19 Execution in Counterparts ............................................................................................... 19 Governing Law ............................................................................................................... 19 Electronic Transactions ................................................................................................... 19 Signatures ....................................................................................................................... S-1 Exhibit A-Debt Service Schedule and Proof of Note Yield Exhibit B-IRS Form 8038-G Exhibit C-1 -Purchaser's Receipt and Issue Price Certificate Exhibit C-2 -Municipal Advisor's Certificate Regarding the Competitive Sale Exhibit D -Description of Property Comprising the Financed Facility and List of Reimbursement Expenditures Exhibit E -Sample Annual Compliance Checklist * * * (ii) FEDERAL TAX CERTIFICATE THIS FEDERAL TAX CERTIFICATE (the "Tax Certificate"), is executed as of April 24, 2019, by the City of Salina, Kansas, a political subdivision organized and existing under the laws of the State of Kansas (the "Issuer"). RECITALS 1. This Tax Certificate is being executed and delivered in connection with the issuance by the Issuer of $6,085,000 principal amount of General Obligation Temporary Notes, Series 2019-1 (the "Notes"), under Resolution No. 19-7692 adopted by the governing body of the Issuer, for the purposes described in this Tax Certificate and in the Resolution. 2. The Internal Revenue Code of 1986, as amended (the "Code"), and the applicable Regulations and rulings issued by the U.S. Treasury Department (the "Regulations"), impose certain limitations on the uses and investment of the Note proceeds and of certain other money relating to the Notes and set forth the conditions under which the interest on the Notes will be excluded from gross income for federal income tax purposes. 3. The Issuer is executing this Tax Certificate in order to set forth certain facts, covenants, representations, and expectations relating to the use of Note proceeds and the property financed or refinanced with those proceeds and the investment of the Note proceeds and of certain other related money, in order to establish and maintain the exclusion of the interest on the Notes from gross income for federal income tax purposes, and to provide guidance for complying with the arbitrage rebate and yield reduction amounts provisions of Code§ 148(t). 4. The Issuer has adopted a Tax Compliance Procedure (as defined below) for the purpose of setting out general procedures for the Issuer to continuously monitor and comply with the federal income tax requirements set out in the Code and the Regulations. This Tax Certificate is entered into as required by the Tax Compliance Procedure to set out specific tax compliance procedures applicable to the Notes. NOW, THEREFORE, the Issuer represents, covenants and agrees as follows: ARTICLE I DEFINITIONS Section 1.1. Definitions of Words and Terms. Except as otherwise provided in this Tax Certificate or unless the context otherwise requires, capitalized words and terms used in this Tax Certificate have the same meanings as set forth in the Resolution, and certain other words and phrases have the meanings assigned in Code§§ 103, 141-150 and the Regulations. The following words and terms used in this Tax Certificate have the following meanings: "Adjusted Gross Proceeds" means the Gross Proceeds of the Notes reduced by amounts (a) in a Bona Fide Debt Service Fund or a reasonably required reserve or replacement fund, (b) that as of the Issue Date are not expected to be Gross Proceeds, but which arise after the end of the applicable spending period, and ( c) representing grant repayments or sale or Investment proceeds of any purpose Investment. "Annual Compliance Checklist" means a checklist for each project or improvement comprising the Financed Facility designed to measure compliance with the requirements of this Tax Certificate and the Tax Compliance Procedure after the Issue Date as further described in Section 4.2 and substantially in the form attached as Exhibit E. "Available Construction Proceeds" means the sale proceeds of the Notes, increased by (a) Investment earnings on the sale proceeds, (b) earnings on amounts in a reasonably required reserve or replacement fund allocable to the Notes but not funded from the Notes, and (c) earnings on such earnings, reduced by sale proceeds (1) in any reasonably required reserve fund or (2) used to pay issuance costs of the Notes. But Available Construction Proceeds do not include Investment earnings on amounts in a reasonably required reserve or replacement fund after the earlier of (i) the second anniversary of the Issue Date or (ii) the date the Financed Facility is substantially completed. "Bona Fide Debt Service Fund" means a fund, which may include Note proceeds, that (a) is used primarily to achieve a proper matching of revenues with principal and interest payments within each Note Year; and (b) is depleted at least once each Note Year, except for a reasonable carryover amount not to exceed the greater of (1) the earnings on the fund for the immediately preceding Note Year, or (2) one- twelfth of the principal and interest payments on the Notes for the immediately preceding Note Year. "Bond Compliance Officer" means the Issuer's Finance Director or other person named in the Tax Compliance Procedure. "Bond Counsel" means Gilmore & Bell, P.C., or other firm of nationally recognized bond counsel acceptable to the Issuer. "Code" means the Internal Revenue Code of 1986, as amended. "Computation Date" means May 1, 2020, the final maturity date of the Notes, but the Issuer reserves the right to select a different date consistent with the Regulations. "Final Written Allocation" means the Final Written Allocation of expenditures prepared by the Bond Compliance Officer in accordance with the Tax Compliance Procedure and Section 4.2(b) of this Tax Certificate. "Financed Facility" means the portion of the Project being financed or refinanced with the proceeds of the Notes as described in the Resolution, all as described on Exhibit D. "Gross Proceeds" means (a) sale proceeds (any amounts actually or constructively received by the Issuer from the sale of the Notes, including amounts used to pay underwriting discount or fees, but excluding pre-issuance accrued interest), (b) Investment proceeds (any amounts received from investing sale proceeds, or other Investment proceeds), (c) any amounts held in a sinking fund for the Notes, (d) any amounts held in a pledged fund or reserve fund for the Notes, and (e) any other replacement proceeds. Specifically, Gross Proceeds includes (but is not limited to) amounts held in the following funds and accounts: (1) Improvement Fund. (2) Debt Service Account. (3) Rebate Fund (to the extent funded with sale proceeds or Investment proceeds of the Notes). 2 "Guaranteed Investment Contract" is any Investment with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate, including any agreement to supply Investments on 2 or more future dates (e.g., a forward supply contract). "Investment" means any security, obligation, annuity contract or other investment-type property that is purchased directly with, or otherwise allocated to, Gross Proceeds. This term does not include a tax- exempt bond, except for "specified private activity bonds" as defined in Code § 57(a)(5)(C), but it does include the investment element of most interest rate caps. "IRS" means the United States Internal Revenue Service. "Issue Date" means April 24, 2019. "Issuer" means City of Salina, Kansas and its successors and assigns, or any body, agency or instrumentality of the State of Kansas succeeding to or charged with the powers, duties and functions of the Issuer. "Management or Service Agreement" means a legal agreement defined in Regulations § l .141- 3(b) as a management, service, or incentive payment contract with an entity that provides services involving all or a portion of any function of the Financed Facility, such as a contract to manage the entire Financed Facility or a portion of the Financed Facility. Contracts for services that are solely incidental to the primary governmental function of the Financed Facility (for example, contracts for janitorial, office equipment repair, billing or similar services); however, are not treated as Management or Service Agreements. "Measurement Period" means, with respect to each item of property financed as part of the Financed Facility, the period beginning on the later of (a) the Issue Date or (b) the date the property is placed in service and ending on the earlier of (1) the final maturity date of the Notes or (2) the end of the expected economic useful life of the property. "Minor Portion" means the lesser of $100,000 or 5% of the sale proceeds of the Notes. "Net Proceeds" means when used in reference to the Notes, the sale proceeds (excluding pre- issuance accrued interest), less an allocable share of any proceeds deposited in a reasonably required reserve or replacement fund, plus an allocable share of all Investment earnings on such sale proceeds. "Non-Qualified Use" means use of Note proceeds or the Financed Facility in a trade or business carried on by any Non-Qualified User. The rules set out in Regulations§ 1.141-3 determine whether Note proceeds or the Financed Facility are "used" in a trade or business. Generally, ownership, a lease, or any other use that grants a Non-Qualified User a special legal right or entitlement with respect to the Financed Facility, will constitute use under Regulations § 1.141-3. "Non-Qualified User" means any person or entity other than a Qualified User. "Note" or "Notes" means any Note or Notes described in the recitals, authenticated and delivered under the Resolution. "Note Year" means each one-year period (or shorter period for the first Note Year) ending May 1, or another one-year period selected by the Issuer. 3 "Official Intent Date" means each date that the Issuer adopted a resolution or ordinance declaring the intent of the Issuer to finance any of the Financed Facility with tax-exempt obligations and to reimburse the Issuer for expenditures made for the Financed Facility prior to the issuance of those obligations. "Opinion of Bond Counsel" means the written opinion of Bond Counsel to the effect that the proposed action or the failure to act will not adversely affect the exclusion of the interest on the Notes from gross income for federal income tax purposes. "Post-Issuance Tax Requirements" means those requirements related to the use of proceeds of the Notes, the use of the Financed Facility and the investment of Gross Proceeds after the Issue Date of the Notes. "Project" means all of the property being acquired, developed, constructed, renovated, and equipped by the Issuer using Note proceeds and Qualified Equity, all as described on Exhibit D. "Purchaser" means Country Club Bank, Prairie Village, Kansas, the original purchaser of the Notes, and any successor and assigns. "Qualified Equity" means funds that are not derived from proceeds of a tax-exempt financing that are spent on the Project at any time during the period beginning not earlier than the later of (a) 60 days prior to the Official Intent Date or (b) three years prior to the Issue Date, and ending not later than the date the Project is capable of and actually used at substantially its designed level. Qualified Equity excludes an ownership interest in real property or tangible personal property. "Qualified Use Agreement" means any of the following: (a) A lease or other short-term use by members of the general public who occupy the Financed Facility on a short-term basis as in the ordinary course of the Issuer's governmental purposes. (b) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Facility for a period up to 200 days in length pursuant to an arrangement whereby (1) the use of the Financed Facility under the same or similar arrangements is predominantly by natural persons who are not engaged in a trade or business and (2) the compensation for the use is determined based on generally applicable, fair market value rates that are in effect at the time the agreement is entered into or renewed. Any Qualified User or Non-Qualified User using all or any portion of the Financed Facility under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. (c) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Facility for a period up to 100 days in length pursuant to arrangements whereby (1) the use of the property by the person would be general public use but for the fact that generally applicable and uniformly applied rates are not reasonably available to natural persons not engaged in a trade or business, (2) the compensation for the use under the arrangement is determined based on applicable, fair market value rates that are in effect at the time the agreement is entered into or renewed, and (3) the Financed Facility was not constructed for a principal purpose of providing the property for use by that Qualified User or Non-Qualified User. Any Qualified User or Non- Qualified User using all or any portion of the Financed Facility under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. 4 (d) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the Financed Facility for a period up to 50 days in length pursuant to a negotiated arm's-length arrangement at fair market value so long as the Financed Facility was not constructed for a principal purpose of providing the property for use by that person. "Qualified User" means a State, territory, possession of the United States, the District of Columbia, or any political subdivision thereof, or any instrumentality of such entity, but it does not include the United States or any agency or instrumentality of the United States'. "Reasonable Retainage" means Gross Proceeds retained by the Issuer for reasonable business purposes, such as to ensure or promote compliance with a construction contract; provided that such amount may not exceed (a) for purposes of the 18-month spending test, 5% of net sale proceeds of the Notes on the date 18 months after the Issue Date, or (b) for purposes of the 2-year spending test, 5% of the Available Construction Proceeds as of the end of the 2-year spending period. "Rebate Analyst" means Gilmore & Bell, P.C. or any successor Rebate Analyst selected pursuant to this Tax Certificate. "Regulations" means all Regulations issued by the U.S. Treasury Department to implement the provisions of Code§§ 103 and 141through150 and applicable to the Notes. "Resolution" means the Resolution as originally executed by the Issuer as amended and supplemented in accordance with the provisions of the Resolution. "Tax Certificate" means this Federal Tax Certificate as it may from time to time be amended and supplemented in accordance with its terms. "Tax Compliance Procedure" means the Issuer's Tax and Securities Compliance Policy and Procedure, dated June 11, 2012, as amended and supplemented in accordance with the terms of the Tax Compliance Procedure. "Tax-Exempt Bond File" means documents and records for the Notes, maintained by the Bond Compliance Officer pursuant to the Tax Compliance Procedure. "Transcript" means the Transcript of Proceedings relating to the authorization and issuance of the Notes. "Yield" means yield on the Notes, computed under Regulations § 1.148-4, and yield on an Investment, computed under Regulations § 1.148-5. 5 Section 2.1. covenants as follows: ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS Representations and Covenants of the Issuer. The Issuer represents and (a) Organization and Authority. The Issuer (1) is a political subdivision organized and existing under the laws of the State of Kansas, and (2) has lawful power and authority to issue the Notes for the purposes set forth in the Resolution, to enter into, execute and deliver the Resolution, the Notes, and this Tax Certificate and to carry out its obligations under this Tax Certificate and under such documents, and (3) by all necessary action has been duly authorized to execute and deliver the Resolution, the Notes, and this Tax Certificate, acting by and through its duly authorized officials. (b) Tax-Exempt Status of Notes-General Covenant and Allocation of Proceeds to Project. (1) The Issuer (to the extent within its power or direction) will not use any money on deposit in any fund or account maintained in connection with the Notes, whether or not such money was derived from the proceeds of the sale of the Notes or from any other source, in a manner that would cause the Notes to be "arbitrage bonds," within the meaning of Code§ 148, and will not (to the extent within its power or direction) otherwise use or permit the use of any Note proceeds or any other funds of the Issuer, directly or indirectly, in any manner, or take or permit to be taken any other action or actions, that would cause interest on the Notes to be included in gross income for federal income tax purposes. (2) The Issuer will account for the expenditure of the Note proceeds and Qualified Equity for the Project as described in Section 4.2. For purposes of the following covenants related to the use of the Financed Facility, any Non-Qualified Use shall be treated as first allocated entirely to the portion of the Project financed with Qualified Equity, and then only to the extent of any excess, to the portion of the Project financed with Bond proceeds (that is, the Financed Facility). (c) Governmental Obligations-Use of Proceeds. Throughout the Measurement Period all of the Financed Facility has been and is expected to be owned by the Issuer or another Qualified User. Throughout the Measurement Period no portion of the Financed Facility is expected to be used in a Non- Qualified Use. Throughout the Measurement Period the Issuer will not permit any Non-Qualified Use of the Financed Facility without first consulting with Bond Counsel. (d) Governmental Obligations-Private Security or Payment. As of the Issue Date the Issuer expects that none of the principal of and interest on the Notes will be (under the terms of the Notes or any underlying arrangement) directly or indirectly: (1) secured by (i) any interest in property used or to be used for a Non-Qualified Use, or (ii) any interest in payments in respect of such property; or (2) derived from payments (whether or not such payments are made to the Issuer) in respect of property, or borrowed money, used or to be used for a Non-Qualified Use. For purposes of the foregoing, taxes of general application, including payments in lieu of taxes, are not treated as private payments or as private security. The Issuer will not permit any private security or payment with respect to the Notes without first consulting with Bond Counsel. 6 (e) No Private Loan-Special Assessments. Not more than 5% of the net proceeds of the Notes will be loaned directly or indirectly to any Non-Qualified User. The payment of principal and interest on the Notes will be funded in whole or in part from a mandatory special assessment against the property benefiting from the improvements financed or refinanced by the Notes. The use of the proceeds of the Notes is not treated as a loan of the Note proceeds because (1) the special assessment is an enforced contribution for the purpose of raising revenue for a specific capital improvement; (2) the assessment does not include any fee for services; (3) the assessment and collection of the tax is not dependent upon, and does not vary, depending on whether the taxpayer engaged, or the property is used, in a trade or business; and ( 4) the tax is imposed to pay for an essential governmental function. (t) Management or Service Agreements. As of the Issue Date the Issuer has no Management or Service Agreements with Non-Qualified Users. During the Measurement Period the Issuer will not enter into or renew any Management or Service Agreement with any Non-Qualified User without first consulting with Bond Counsel. (g) Leases. As of the Issue Date the Issuer has not entered into any leases of any portion of the Financed Facility during the Measurement Period. During the Measurement Period the Issuer will not enter into or renew any lease or similar agreement or arrangement other than a Qualified Use Agreement without first consulting with Bond Counsel. (h) Limit on Maturity of Notes. A list of the assets included in the Project and a computation of the "average reasonably expected economic life" is attached to this Tax Certificate as Exhibit D. Based on this computation, the "average maturity" of the Notes as computed by Bond Counsel, does not exceed the average reasonably expected economic life of the Financed Facility. (i) Expenditure of Note proceeds. (1) Accounting for Expenditures. The Issuer will evidence each allocation of the proceeds of the Notes and Qualified Equity for the Project to an expenditure in writing. No allocation will be made more than 18 months following the later of (i) the date of the expenditure or (ii) the date the Financed Facility was placed in service. (2) Reimbursement of Expenditures; Official Intent. On each Official Intent Date, the governing body of the Issuer adopted a resolution declaring the intent of the Issuer to finance the Financed Facility with tax-exempt obligations and to reimburse the Issuer for expenditures made for the Financed Facility prior to the issuance of those obligations. Copies of these resolutions are included in Tabs 1 to 5 of the Transcript. $1,713,189.46 of the proceeds of the Notes will be allocated to expenditures paid by the Issuer prior to the Issue Date and should be shown on line 45 of Form 8038-G. Except as otherwise shown on Exhibit D and for the reasons permitted under Regulations § 1.150-2(f) (for example, issuance costs, de minimis amounts, and preliminary expenditures), (A) no portion of the Net Proceeds of the Notes will be used to reimburse an expenditure paid by the Issuer more than 60 days prior to the date the respective resolution was adopted, (B) no reimbursement allocation will be made more than 18 months following the later of (i) the date of the expenditure or (ii) the date the Financed Facility was placed in service, or (C) no reimbursement allocation will be made more than 3 years following the date of the expenditure. G) Registered Notes. The Resolution requires that all of the Notes will be issued and held in registered form within the meaning of Code§ 149(a). 7 (k) Notes Not Federally Guaranteed. The Issuer will not take any action or permit any action to be taken which would cause any Note to be "federally guaranteed" within the meaning of Code§ 149(b). (l) IRS Form 8038-G. Bond Counsel will prepare IRS Form 8038-G (Information Return for Tax-Exempt Governmental Obligations) based on the representations and covenants of the Issuer contained in this Tax Certificate or otherwise provided by the Issuer. Bond Counsel will sign the return as a paid preparer following completion and will then deliver copies to the Issuer for execution and for the Issuer's records. The Issuer agrees to timely execute and return to Bond Counsel the execution copy of Form 8038- G for filing with the IRS. A copy of the "as-filed" copy along with proof of filing will be included as Exhibit B. The Issuer has allocated a portion of the Net Proceeds of the Notes to reimburse expenditures made prior to the Issue Date and that amount should be reflected on Line 45a of Form 8038-G. A list of expenditures to be reimbursed is included as part of Exhibit D. (m) Hedge Bonds. At least 85% of the net sale proceeds (the sale proceeds of the Notes less any sale proceeds invested in a reserve fund) of the Notes will be used to carry out the governmental purpose of the Notes within 3 years after the Issue Date, and not more than 50% of the proceeds of the Notes will be invested in Investments having a substantially guaranteed Yield for 4 years or more. (n) Compliance with Future Tax Requirements. The Issuer understands that the Code and the Regulations may impose new or different restrictions and requirements on the Issuer in the future. The Issuer will comply with such future restrictions that are necessary to maintain the exclusion of the interest on the Notes from gross income for federal income tax purposes. (o) Single Issue; No Other Issues. The Notes constitute a single "issue" under Regulations § 1.150-l(c). No other debt obligations of the Issuer: (1) are being sold within 15 days of the sale of the Notes, (2) are being sold under the same plan of financing as the Notes, and (3) are expected to be paid from substantially the same source of funds as the Notes (disregarding guarantees from unrelated parties, such as bond insurance). For purposes of the foregoing, simultaneously with the Notes, the Issuer sold its General Obligation Internal Improvement Bonds, Series 2019-A, which are not part of the same plan of financing as the Notes and are not expected to be paid from substantially the same sources of funds as the Notes, and therefore are not part of the same "issue" as the Notes under Regulations§ 1.150-l(c). A separate Federal Tax Certificate and IRS Form 8038-G are being executed in connection with the issuance of these bonds. (p) Interest Rate Swap. As of the Issue Date the Issuer has not entered into an interest rate swap agreement or any other similar arrangement designed to modify its interest rate risk with respect to the Notes. The Issuer will not enter into any such arrangement in the future without first consulting with Bond Counsel. (q) Guaranteed Investment Contract. As of the Issue Date, the Issuer does not expect to enter into a Guaranteed Investment Contract for any Gross Proceeds of the Notes. The Issuer will be responsible for complying with Section 4.4( d) if it decides to enter into a Guaranteed Investment Contract at a later date. (r) Bank Qualified Tax-Exempt Obligations. The Notes are not "qualified tax-exempt obligations" under Code§ 265(b)(3). Section 2.2. Survival of Representations and Covenants. All representations, covenants and certifications contained in this Tax Certificate or in any certificate or other instrument delivered by the Issuer under this Tax Certificate, will survive the execution and delivery of such documents and the issuance 8 of the Notes, as representations of facts existing as of the date of execution and delivery of the instruments containing such representations. The foregoing covenants of this Section will remain in full force and effect notwithstanding the defeasance of the Notes. ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS Section 3.1. General. The purpose of this Article III is to certify, under Regulations§ l.148- 2(b), the Issuer's expectations as to the sources, uses and investment of Note proceeds and other money, in order to support the Issuer's conclusion that the Notes are not arbitrage bonds. The person executing this Tax Certificate on behalf of the Issuer is an officer of the Issuer responsible for issuing the Notes. Section 3.2. Reasonable Expectations. The facts, estimates and expectations set forth in this Article III are based upon and in reliance upon the Issuer's understanding of the documents and certificates that comprise the Transcript, and the representations, covenants and certifications of the parties contained therein. To the Issuer's knowledge, the facts and estimates set forth in this Tax Certificate are accurate, and the expectations of the Issuer set forth in this Tax Certificate are reasonable. The Issuer has no knowledge that would cause it to believe that the representations, warranties and certifications described in this Tax Certificate are unreasonable or inaccurate or may not be relied upon. Section 3.3. Purposes of the Financing. The Notes are being issued for the purpose of providing funds to (a) finance a portion of the costs of the Project; and (b) pay certain costs of issuing the Notes. Section 3.4. under the Resolution: Funds and Accounts. The following funds and accounts have been established Improvement Fund; Debt Service Account; and Rebate Fund. Section 3.5. Amount and Use of Note proceeds. (a) Amount of Note proceeds. The total proceeds to be received by the Issuer from the sale of the Notes will be as follows: follows: Principal Amount Less Underwriting Discount Total Proceeds Received by Issuer $6,085,000.00 (14,299.75) $6,070,700.25 (b) Use of Note proceeds. The Note proceeds are expected to be allocated to expenditures as ( 1) All accrued interest, if any, will be deposited in the Debt Service Account and used to pay interest on the Notes. (2) The sum of $41,967.50 of Note proceeds will be used to pay the costs of issuance of the Notes. 9 (3) The balance of $6,028,732.75 of Note proceeds, plus investment earnings thereon, will be used to pay or reimburse the Issuer for costs of the Financed Facility. Section 3.6. Multipurpose Issue. Pursuant to Regulations§ 1.148-9(h), the Issuer is applying the arbitrage rules to separate financing purposes of the issue that have the same initial temporary period as if they constitute a single issue for purposes of applying the arbitrage rules. Section 3.7. No Current Refunding. No proceeds of the Notes will be used to pay principal of or interest on any other debt obligation. Section 3.8. Project Completion. The Issuer has incurred, or will incur within 6 months after the Issue Date, a substantial binding obligation to a third party to spend at least 5% of the Net Proceeds of the Notes on the Financed Facility. The completion of the Financed Facility and the allocation of the Net Proceeds of the Notes to expenditures will proceed with due diligence. At least 85% of the Net Proceeds of the Notes will be allocated to expenditures on the Financed Facility within 3 years after the Issue Date. Section 3.9. Sinking Funds. The Issuer is required to make periodic payments in amounts sufficient to pay the principal of and interest on the Notes. Such payments will be deposited into the Debt Service Account. Except for the Debt Service Account, no sinking fund or other similar fund that is expected to be used to pay principal of or interest on the Notes has been established or is expected to be established. The Debt Service Account is used primarily to achieve a proper matching of revenues with principal and interest payments on the Notes within each Note Year, and the Issuer expects that the Debt Service Account will qualify as a Bona Fide Debt Service Fund. Section 3.10. Reserve, Replacement and Pledged Funds. (a) Debt Service Reserve Fund. No reserve or replacement fund has been established for the Notes. (b) No Replacement or Pledged Funds. None of the Note proceeds will be used as a substitute for other funds that were intended or earmarked to pay costs of the Financed Facility, and that instead has been or will be used to acquire higher yielding Investments. Except for the Debt Service Account, there are no other funds pledged or committed in a manner that provides a reasonable assurance that such funds would be available for payment of the principal of or interest on the Notes if the Issuer encounters financial difficulty. Section 3.11. Purpose Investment Yield. The proceeds of the Notes will not be used to purchase an Investment for the purpose of carrying out the governmental purpose of the financing. Section 3.12. Issue Price and Yield on Notes. (a) Issue Price. Based on the Purchaser's certifications in the Purchaser's Receipt for Notes and Issue Price Certificate in Exhibit C-1 and the Municipal Advisor's Certificate Regarding the Competitive Sale in Exhibit C-2, the Issuer hereby elects to establish the issue prices of the Notes pursuant to Regulations § l.148-l(f)(2)(iii) (relating to the so-called "competitive sale rule"). Therefore, the aggregate issue price of the Notes for such purpose is $6,085,000. 10 (b) Note Yield. Based on the issue price, the Yield on the Notes is 1.5736%, as computed by Bond Counsel as shown on Exhibit A. Section 3.13. Miscellaneous Arbitrage Matters. (a) No Abusive Arbitrage Device. The Notes are not and will not be part of a transaction or series of transactions that has the effect of (1) enabling the Issuer to exploit the difference between tax- exempt and taxable interest rates to gain a material financial advantage, and (2) overburdening the tax- exempt bond market. (b) No Over-Issuance. The sale proceeds of the Notes, together with expected Investment earnings thereon and other money contributed by the Issuer, do not exceed the cost of the governmental purpose of the Notes as described above. Section 3.14. Conclusion. On the basis of the facts, estimates and circumstances set forth in this Tax Certificate, the Issuer does not expect that the Note proceeds will be used in a manner that would cause any Note to be an "arbitrage bond" within the meaning of Code § 148 and the Regulations. ARTICLE IV POST-ISSUANCE TAX REQUIREMENTS, POLICIES AND PROCEDURES Section 4.1. General. (a) Purpose of Article. The purpose of this Article is to supplement the Tax Compliance Procedure and to set out specific policies and procedures governing compliance with the federal income tax requirements that apply after the Notes are issued. The Issuer recognizes that interest on the Notes will remain excludable from gross income only if the Post-Issuance Tax Requirements are followed after the Issue Date. The Issuer further acknowledges that written evidence substantiating compliance with the Post- Issuance Tax Requirements must be retained in order to permit the.Notes to be refinanced with tax-exempt obligations and substantiate the position that interest on the Notes is exempt from gross income in the event of an audit of the Notes by the IRS. (b) Written Policies and Procedures of the Issuer. The Issuer intends for the Tax Compliance Procedure, as supplemented by this Tax Certificate, to be its primary written policies and procedures for monitoring compliance with the Post-Issuance Tax Requirements for the Notes and to supplement any other formal policies and procedures related to tax compliance that the Issuer has established. The provisions of this Tax Certificate are intended to be consistent with the Tax Compliance Procedure. In the event of any inconsistency between the Tax Compliance Procedure and this Tax Certificate, the terms of this Tax Certificate will govern. (c) Bond Compliance Officer. The Issuer when necessary to fulfill its -Post-Issuance Tax Requirements will, through its Bond Compliance Officer, sign Form 8038-T in connection with the payment of arbitrage rebate or yield reduction amounts, participate in any federal income tax audit of the Notes or related proceedings under a voluntary compliance agreement procedures (VCAP) or undertake a remedial action procedure pursuant to Regulations§ 1.141-12. In each case, all costs and expenses incurred by the Issuer shall be treated as a reasonable cost of administering the Notes, and the Issuer shall be entitled to reimbursement and recovery of its costs to the same extent as provided in the Resolution or State law. 11 Section 4.2. Record Keeping; Use of Note Proceeds and Use of Financed Facility. (a) Record Keeping. The Bond Compliance Officer will maintain the Tax-Exempt Bond File for the Notes in accordance with the Tax Compliance Procedure. Unless otherwise specifically instructed in advice or a written Opinion of Bond Counsel or to the extent otherwise provided in this Tax Certificate, the Bond Compliance Officer shall retain records related to the Post-Issuance Tax Requirements until 3 years following the final maturity of (1) the Notes or (2) any obligation issued to refund the Notes. Any records maintained electronically must comply with Section 4.01 of Revenue Procedure 97-22, which generally provides that an electronic storage system must (i) ensure an accurate and complete transfer of the hardcopy records which indexes, stores, preserves, retrieves and reproduces the electronic records, (ii) include reasonable controls to ensure integrity, accuracy and reliability of the electronic storage system and to prevent unauthorized alteration or deterioration of electronic records, (iii) exhibit a high degree of legibility and readability both electronically and in hardcopy, (iv) provide support for other books and records of the Issuer and (v) not be subject to any agreement that would limit the ability of the IRS to access and use the electronic storage system on the Issuer's premises. (b) Accounting and Allocation of Note Proceeds and Qualified Equity to Expenditures. The Bond Compliance Officer will account for the investment and expenditure of Note proceeds in the level of detail required by the Tax Compliance Procedure. The expected allocation of the proceeds of the Notes and Qualified Equity to expenditures for the Financed Facility is set forth on Exhibit D. Upon completion of the Financed Facility and in connection with any long-term financing for the Financed Facility, the Bond Compliance Officer will supplement this expected allocation with a Final Written Allocation, as required by the Tax Compliance Procedure. (c) Annual Compliance Checklist. After completion of the Financed Facility and in connection with any long-term financing for the Financed Facility, the Bond Compliance Officer will prepare and complete an Annual Compliance Checklist at least annually, in accordance with the Tax Compliance Procedure. Attached as Exhibit Eis a sample Annual Compliance Checklist for the Notes. (d) Opinions of Bond Counsel. The Bond Compliance Officer is responsible for obtaining and delivering to the Issuer any advice or Opinion of Bond Counsel required under the provisions of this Tax Certificate, including any advice or Opinion of Bond Counsel required by this Tax Certificate or the Annual Compliance Checklist. Section 4.3. Temporary PeriodsNield Restriction. Except as described below, the Issuer will not invest Gross Proceeds at a Yield greater than the Yield on the Notes: (a) Improvement Fund. Note proceeds deposited in the Improvement Fund and investment earnings on those proceeds may be invested without Yield restriction for up to 3 years following the Issue Date. If any unspent proceeds remain in the Improvement Fund after 3 years, those amounts may continue to be invested without Yield restriction so long as the Issuer pays to the IRS all Yield reduction payments in accordance with Regulations§ l.148-5(c). These payments are required whether or not the Notes are exempt from the arbitrage rebate and yield reduction amounts requirements of Code§ 148. (b) Debt Service Account. To the extent that the Debt Service Account qualifies as a Bona Fide Debt Service Fund, money in such account may be invested without Yield restriction for 13 months after the date of deposit. Earnings on such amounts may be invested without Yield restriction for one year after the date of receipt of such earnings. 12 ( c) Rebate Fund. Money, other than sale proceeds or Investment proceeds of the Notes, on deposit in the Rebate Fund may be invested without Yield restriction. ( d) Minor Portion. In addition to the amounts described above, Gross Proceeds not exceeding the Minor Portion may be invested without Yield restriction. Section 4.4. Fair Market Value. (a) General. No Investment may be acquired with Gross Proceeds for an amount (including transaction costs) in excess of the fair market value of such Investment, or sold or otherwise disposed of for an amount (including transaction costs) less than the fair market value of the Investment. The fair market value of any Investment is the price a willing buyer would pay to a willing seller to acquire the Investment in a bona fide, arm's-length transaction. Fair market value will be determined in accordance with Regulations§ 1.148-5. (b) Established Securities Market. Except for Investments purchased for a Yield-restricted defeasance escrow, if an Investment is purchased or sold in an arm's-length transaction on an established securities market (within the meaning of Code§ 1273), the purchase or sale price constitutes the fair market value. Where there is no established securities market for an Investment, market value must be established using 1 of the paragraphs below. The fair market value of Investments purchased for a Yield-restricted defeasance escrow must be determined in a bona fide solicitation for bids that complies with Regulations § 1.148-5. ( c) Certificates of Deposit. The purchase price of a certificate of deposit (a "CD") is treated as its fair market value on the purchase date if (1) the CD has a fixed interest rate, a fixed payment schedule, and a substantial penalty for early withdrawal, (2) the Yield on the CD is not less than the Yield on reasonably comparable direct obligations of the United States, and (3) the Yield is not less than the highest Yield published or posted by the CD issuer to be currently available on reasonably comparable CDs offered to the public. (d) Guaranteed Investment Contracts. The purchase price of a Guaranteed Investment Contract is treated as its fair market value on the purchase date if all of the following requirements are met: (1) Bona Fide Solicitation for Bids. The Issuer makes a bona fide solicitation for the Guaranteed Investment Contract, using the following procedures: (i) The bid specifications are in writing and are timely forwarded to potential providers, or are made available on an internet website or other similar electronic media that is regularly used to post bid specifications to potential bidders. A writing includes a hard copy, a fax, or an electronic e-mail copy. (ii) The bid specifications include all "material" terms of the bid. A term is material if it may directly or indirectly affect the Yield or the cost of the Guaranteed Investment Contract. (iii) The bid specifications include a statement notifying potential providers that submission of a bid is a representation (A) that the potential provider did not consult with any other potential provider about its bid, (B) that the bid was determined without regard to any other formal or informal agreement that the potential provider has with the 13 Issuer or any other person (whether or not in connection with the note issue), and (C) that the bid is not being submitted solely as a courtesy to the Issuer or any other person, for purposes of satisfying the requirements of the Regulations. (iv) The terms of the bid specifications are "commercially reasonable." A term is commercially reasonable if there is a legitimate business purpose for the term other than to increase the purchase price or reduce the yield of the Guaranteed Investment Contract. (v) The terms of the solicitation take into account the Issuer's reasonably expected deposit and draw-down schedule for the amounts to be invested. (vi) All potential providers have an equal opportunity to bid. If the bidding process affords any opportunity for a potential provider to review other bids before providing a bid, then providers have an equal opportunity to bid only if all potential providers have an equal opportunity to review other bids. Thus, no potential provider may be given an opportunity to review other bids that is not equally given to all potential providers (that is no exclusive "last look"). (vii) At least 3 "reasonably competitive providers" are solicited for bids. A reasonably competitive provider is a provider that has an established industry reputation as a competitive provider of the type of Investments being purchased. (2) Bids Received. The bids received must meet all of the following requirements: (i) At least 3 bids are received from providers that were solicited as described above and that do not have a "material financial interest" in the issue. For this purpose, (A) a lead underwriter in a negotiated underwriting transaction is deemed to have a material financial interest in the issue until 15 days after the Issue Date of the issue, (B) any entity acting as a financial advisor with respect to the purchase of the Guaranteed Investment Contract at the time the bid specifications are forwarded to potential providers has a material financial interest in the issue, and ( C) a provider that is a related party to a provider that has a material financial interest in the issue is deemed to have a material financial interest in the issue. (ii) At least 1 of the 3 bids received is from a reasonably competitive provider, as defined above. (iii) If an agent or broker is used to conduct the bidding process, the agent or broker did not bid to provide the Guaranteed Investment Contract. (3) Winning Bid. The winning bid is the highest yielding bona fide bid (determined net of any broker's fees). (4) Fees Paid. The obligor on the Guaranteed Investment Contract certifies the administrative costs that it pays (or expects to pay, if any) to third parties in connection with supplying the Guaranteed Investment Contract. (5) Records. The Issuer retains the following records with the Note documents until 3 years after the last outstanding Note is redeemed: 14 (i) A copy of the Guaranteed Investment Contract. (ii) The receipt or other record of the amount actually paid for the Guaranteed Investment Contract, including a record of any administrative costs paid by the Issuer, and the certification as to fees paid, described in paragraph (d)(4) above. (iii) For each bid that is submitted, the name of the person and entity submitting the bid, the time and date of the bid, and the bid results. (iv) The bid solicitation form and, if the terms of Guaranteed Investment Contract deviated from the bid solicitation form or a submitted bid is modified, a brief statement explaining the deviation and stating the purpose for the deviation. ( e) Other Investments. If an Investment is not described above, the fair market value may be established through a competitive bidding process, as follows: (1) at least 3 bids on the Investment must be received from persons with no financial interest in the Notes (e.g., as underwriters or brokers); and (2) the Yield on the Investment must be equal to or greater than the Yield offered under the highest bid. Section 4.5. Certain Gross Proceeds Exempt from the Rebate Requirement. (a) General. A portion of the Gross Proceeds of the Notes maybe exempt from rebate pursuant to one or more of the following exceptions. The exceptions typically will not apply with respect to all Gross Proceeds of the Notes and will not otherwise affect the application of the Investment limitations described in Section 4.3. Unless specifically noted, the obligation to compute, and if necessary, to pay rebate as set forth in Section 4.6 applies even if a portion of the Gross Proceeds of the Notes is exempt from the rebate requirement. To the extent all or a portion of the Notes is exempt from rebate the Rebate Analyst may account for such fact in connection with its preparation of a rebate report described in Section 4.6. The Issuer may defer the final rebate Computation Date and the payment of rebate for the Notes to the extent permitted by Regulations§§ 1.148-7(b)(l) and 1.148-3(e)(2) but only in accordance with specific written instructions provided by the Rebate Analyst. (b) Applicable Spending Exceptions. (1) The Issuer expect that at least 75% of the Available Construction Proceeds will be used for construction or rehabilitation expenditures for property owned by the Issuer. (2) The following optional rebate spending exceptions can apply to the Notes: (i) § 1.148-7(c)). (ii) (iii) 7(e)). 6-month spending exception (Code § 148(f)(4)(B) and Regulations 18-month spending exception (Regulations§ 1.148-7(d)). 2-year spending exception (Code§ 148(f)(4)(C) and Regulations§ 1.148- 15 (c) Special Elections Made with Respect to Spending Exception Elections. No special elections are being made in connection with the application of the spending exceptions. (d) Bona Fide Debt Service Fund. To the extent that the Debt Service Account qualifies as a Bona Fide Debt Service Fund, Investment earnings in the fund cannot be taken into account in computing arbitrage rebate and yield reduction amounts ( 1) with respect to such portion that meets the 6-month, 18- month or 2-year spending exception, or (2) for a given Note Year, ifthe gross earnings on the Debt Service Account for such Note Year are less than $100,000. If the average annual debt service on the Notes does not exceed $2,500,000, the $100,000 earnings test may be treated as satisfied in every Note Year. (e) Documenting Application of Spending Exception. At any time prior to the first Computation Date, the Issuer may engage the Rebate Analyst to determine whether one or more spending exceptions has been satisfied, and the extent to which the Issuer must continue to comply with Section 4.6 hereof. (f) General Requirements for Spending Exception. The following general requirements apply in determining whether a spending exception is met. (I) Using Adjusted Gross Proceeds or Available Construction Proceeds to pay principal of any Notes is not taken into account as an expenditure for purposes of meeting any of the spending tests. (2) The 6-month spending exception generally is met if all Adjusted Gross Proceeds of the Notes are spent within 6 months following the Issue Date. The test may still be satisfied even ifup to 5% of the sale proceeds remain at the end of the initial 6-month period, so long as this amount is spent within 1 year of the Issue Date. (3) The 18-month spending exception generally is met if all Adjusted Gross Proceeds of the Notes are spent in accordance with the following schedule: Time Period After the Issue Date 6 months 12 months 18 months (Final) Minimum Percentage of Adjusted Gross Proceeds Spent 15% 60% 100% (4) The 2-year spending exception generally is met if all Available Construction Proceeds are spent in accordance with the following schedule: Time Period After the Issue Date 6 months 12 months 18 months 24 months (Final) 16 Minimum Percentage of Available Construction Proceeds Spent 10% 45% 75% 100% (5) For purposes of applying the 18-month and 2-year spending exceptions only, the failure to satisfy the final spending requirement is disregarded if the Issuer uses due diligence to complete the Financed Facility and the failure does not exceed the lesser of 3% of the aggregate issue price the Notes or $250,000. No such exception applies for any other spending period. (6) For purposes of applying the 18-month and 2-year spending exceptions only, the Notes meet the applicable spending test even if, at the end of the final spending period, proceeds not exceeding a Reasonable Retainage remain unspent, so long as such Reasonable Retainage is spent within 30 months after the Issue Date in the case of the 18-month exception or 3 years after the Issue Date in the case of the 2-year spending exception. Section 4.6. Computation and Payment of Arbitrage Rebate and Yield Reduction Amounts. (a) Rebate Fund. The Issuer will keep the Rebate Fund separate from all other funds and will administer the Rebate Fund under this Tax Certificate. Any Investment earnings derived from the Rebate Fund will be credited to the Rebate Fund, and any Investment loss will be charged to the Rebate Fund. (b) Computation of Rebate Amount. The Issuer will provide the Rebate Analyst Investment reports relating to each fund held by it that contains Gross Proceeds of the Notes together with copies of Investment reports for any funds containing Gross Proceeds that are held by a party other than the Issuer annually as of the end of each Note Year and not later than 10 days following each Computation Date. Each Investment report provided to the Rebate Analyst will contain a record of each Investment, including (1) purchase date, (2) purchase price, (3) information establishing the fair market value on the date such Investment was allocated to the Notes, (4) any accrued interest paid, (5) face amount, (6) coupon rate, (7) frequency of interest payments, (8) disposition price, (9) any accrued interest received, and (10) disposition date. Such records may be supplied in electronic form. The Rebate Analyst will compute rebate following each Computation Date and deliver a written report to the Issuer together with an opinion or certificate of the Rebate Analyst stating that arbitrage rebate and yield reduction amounts were determined in accordance with the Regulations. Each report and opinion will be provided not later than 45 days following the Computation Date to which it relates. In performing its duties, the Rebate Analyst may rely, in its discretion, on the correctness of financial analysis reports prepared by other professionals. If the sum of the amount on deposit in the Rebate Fund and the value of prior rebate payments is less than the arbitrage rebate and yield reduction amounts due, the Issuer will, within 55 days after such Computation Date, pay the amount of the deficiency for deposit into the Rebate Fund. If the sum of the amount on deposit in the Rebate Fund and the value of prior rebate payments is greater than the Rebate Amount the Issuer will transfer such surplus in the Rebate Fund to the Debt Service Fund. After the final Computation Date or at any other time if the Rebate Analyst has advised the Issuer, any money left in the Rebate Fund will be paid to the Issuer and may be used for any purpose not prohibited by law. (c) Rebate Payments. Within 60 days after each Computation Date, the Issuer will pay to the United States the rebate and yield reduction amount then due, determined in accordance with the Regulations. Each payment must be (1) accompanied by IRS Form 8038-T and such other forms, documents or certificates as may be required by the Regulations, and (2) mailed or delivered to the IRS at the address shown below, or to such other location as the IRS may direct: Internal Revenue Service Center Ogden, UT 84201 17 Section 4.7. Successor Rebate Analyst. If the firm acting as the Rebate Analyst resigns or becomes incapable of acting for any reason, or if the Issuer desires that a different firm act as the Rebate Analyst, then the Issuer by an instrument or concurrent instruments in writing delivered to the firm then serving as the Rebate Analyst and any other party to this Tax Certificate, will name a successor Rebate Analyst. In each case the successor Rebate Analyst must be a firm of nationally recognized bond counsel or a firm of independent certified public accountants and such firm must expressly agree to undertake the responsibilities assigned to the Rebate Analyst hereunder. Section 4.8. Filing Requirements. The Issuer will file or cause to be filed with the IRS such reports or other documents as are required by the Code in accordance with advice of Bond Counsel. Section 4.9. Survival after Defeasance. Notwithstanding anything in the Resolution to the contrary, the obligation to pay arbitrage rebate and yield reduction amounts to the United States will survive the payment or defeasance of the Notes. ARTICLEV MISCELLANEOUS PROVISIONS Section 5.1. Term of Tax Certificate. This Tax Certificate will be effective concurrently with the issuance and delivery of the Notes and will continue in force and effect until the principal of, redemption premium, if any, and interest on all Notes have been fully paid and all such Notes are cancelled; provided that, the provisions of Article IV of this Tax Certificate regarding payment of arbitrage rebate and yield reduction amounts and all related penalties and interest will remain in effect until all such amounts are paid to the United States and the provisions of Section 4.2 relating to record keeping shall continue in force for the period described therein for records to be retained. Section 5.2. Amendments. This Tax Certificate may be amended from time to time by the parties to this Tax Certificate without notice to or the consent of any of the Noteowners, but only if such amendment is in writing and is accompanied by an Opinion of Bond Counsel to the effect that, under then existing law, assuming compliance with this Tax Certificate as so amended such amendment will not cause interest on any Note to be included in gross income for federal income tax purposes. No such amendment will become effective until the Issuer receives this Opinion of Bond Counsel. Section 5.3. Opinion of Bond Counsel. The Issuer may deviate from the provisions of this Tax Certificate if furnished with an Opinion of Bond Counsel to the effect that the proposed deviation will not adversely affect the exclusion of interest on the Notes from gross income for federal income tax purposes. The Issuer will comply with any further or different instructions provided in an Opinion of Bond Counsel to the effect that the further or different instructions need to be complied with in order to maintain the validity of the Notes or the exclusion from gross income of interest on the Notes. Section 5.4. Reliance. In delivering this Tax Certificate the Issuer is making only those certifications, representations and agreements as are specifically attributed to them in this Tax Certificate. The Issuer is not aware of any facts or circumstances which would cause it to question the accuracy of the facts, circumstances, estimates or expectations of any other party providing certifications as part of this Tax Certificate and, to the best of its knowledge, those facts, circumstances, estimates and expectations are reasonable. The Issuer understands that its certifications will be relied upon by the law firm of Gilmore & 18 Bell, P.C., in rendering its opinion as to the validity of the Notes and the exclusion from federal gross income of the interest on the Notes. Section 5.5. Severability. If any provision in this Tax Certificate or in the Notes is determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not be affected or impaired. Section 5.6. Benefit of Agreement. This Tax Certificate is binding upon the Issuer its respective successors and assigns, and inures to the benefit of the parties to this Tax Certificate and the owners of the Notes. Nothing in this Tax Certificate or in the Resolution or the Notes, express or implied, gives to any person, other than the parties to this Tax Certificate, their successors and assigns, and the owners of the Notes, any benefit or any legal or equitable right, remedy or claim under this Tax Certificate. Section 5.7. Default, Breach and Enforcement.' Any misrepresentation of a party contained herein or any breach of a covenant or agreement contained in this Tax Certificate may be pursued by the Noteowners pursuant to the terms of the Resolution or any other document which references this Tax Certificate and gives remedies for a misrepresentation or breach thereof. Section 5.8. Execution in Counterparts. This Tax Certificate may be executed in any number of counterparts, each of which so executed will be deemed to be an original, but all such counterparts will together constitute the same instrument. Section 5.9. Governing Law. This Tax Certificate will be governed by and construed in accordance with the laws of the State of Kansas. Section 5.10. Electronic Transactions. The transaction described in this Tax Certificate may be conducted, and related documents may be stored, by electronic means. [Remainder of this page intentionally left blank.) 19 THE UNDERSIGNED, Mayor, Clerk and Director of Finance and Administration of the Issuer, by their execution of this Tax Certificate hereby make the foregoing certifications, representations, and agreements contained in this Tax Certificate on behalf of the Issuer, as of the Issue Date. CITY OF SALINA, KANSAS By: ~7J)/l.r6 Clerk By: Finance Director (Signature Page to Federal Tax Certificate -Notes) EXHIBIT A DEBT SERVICE SCHEDULE AND PROOF OF NOTE YIELD A-1 Apr 2, 2019 4:22 pm Prepared by Gilmore & Bell. P.C. SOURCES AND USES OF FUNDS City of Salina, Kansas General Obligation Temporary Notes, Series 2019-1 Sources: Bond Proceeds: Dated Date Delivery Date Par Amount Uses: Project Fund Deposits: Improvement Fund Delivery Date Expenses: Cost of Issuance Underwriter's Discount 04/24/2019 04/24/2019 6,085,000.00 6,085,000.00 6,028,732.75 41,967.50 14.299.75 56,267.25 6,085,000.00 (Finance 8.000) Page 1 Tlus mfonuation is provided based on the facrual infonuation and assumptions provided to CHlmo1e & Bell, P.C. by a pa.rty to or a representative ofa pany to the proposed transaction This mfonnation is mtended to provide factual infonnatlon only and is provided in conjuncuon wub our legal representation. It 1s not intended as financial advice or a financial r~ouunendation to any party. Gilmore & BeU. P.C. 1s not a financial ad'<isor or a ·~municipal advisor .. as defined in the Secunttes ExchanJZ;e Act of 1934. as amended. Apr 2, 2019 4:22 pm Prepared by Gilmore & Bell. P.C. (Finance 8.000) Page 2 BOND DEBT SERVICE City of Salina, Kansas General Obligation Temporary Notes, Series 2019-1 Period Annual Bond Total Ending Principal Coupon Interest Debt Service Debt Service Balance Bond Value 0412412019 6,085,000 6,085,000 05/01/2020 6,085,000 1.580% 98,012.45 6, 183,012.45 6,183,012.45 6,085,000 98.012.45 6.183,012.45 6, 183,012.45 This mfonuation is provided based on the focrual information and assumpuons pro\•tded to Gilmore & Bell. P.C. by a party to or a rep1esentatt,·e of a pany to the proposed transaction This mfonnation is intended to provide facttial infonnation only and is provide-d in conJuncuon with our legal representation. n is not intended as financial advice or a fmanc1al recommendation to any party. Gilmore & Bell, P.C. is not n financial ndvisor or a •·municipal advisor•• as defined m the Secunties Exchan)le Act of 1934. as mnended. Apr 2, 2019 4:22 pm Prepared by Gilmore & Bell. P.C. BOND PRICING City of Salina. Kansas General Obligation Temporary Notes, Series 2019-1 Bond Component Maturity Date Term Coupon: 0510112020 Dated Date Delivery Date First Coupon Par Amount Original Issue Discount Production Underwriter's Discount Purchase Price Accrued Interest Net Proceeds Amount Rate Yield 6,085,000 1.580% 1.580% 6.085,000 04/24/2019 04/24/2019 05/01/2020 6,085,000.00 6.085,000.00 100.000000% (14,299.75) (0.235000%) 6.070,700.25 99.765000% 6,070,700.25 (Finance 8.000) Page 3 Price 100.000 This information is provided based on the focrual mfonuation and assumptions provided to Gilmore & Bell, P.C. by a party to or a representative of a party to the proposed transaction This infonnation is intended to provide fach.1al infon11at1on only and is provided in conJuncuon with our legal representation It is not intended as financial advice or a fimmc1al re-commendahon to any party. Gilmore & Bell. P.C. is not a financial ad,,·isor or a •·mumc1pal ad\·isor" as defined in the Secunties Exchange Act of 1934. as amended. Apr 2, 2019 4:22 pm Prepared by Gilmore & Bell, P.C. BOND SUMMARY STATISTICS City of Salina, Kansas General Obligation Temporary Notes, Series 2019-1 Dated Date Delivery Date Last Maturity Arbitrage Yield True Interest Cost (TIC) Net Interest Cost (NIC) All-In TIC Average Coupon Average Life (years) Weighted Average Maturity (years) Duration oflssue (years) Par Amount Bond Proceeds Total Interest Net Interest Bond Years from Dated Date Bond Years from Delivery Date Total Debt Service Maximum Annual Debt Service Average Annual Debt Service Underwriter's Fees (per $1000) Average Takedown Other Fee Total Undenniter's Discount Bid Price Bond Component Term Coupon Par Value + Accrued Interest +Premium (Discount) -Undel'\Vriter's Discount -Cost of Issuance Expense -Other Amounts Target Value Target Date Yield Par Value 6,085,000.00 6,085,000.00 TIC 6,085,000.00 (14,299.75) 6,070,700.25 04/24/2019 1.806307% Price 100.000 04/24/2019 04/24/2019 05/01/2020 1.573568% 1.806307% 1.810518% 2.494104% 1.580000% 1.019 1.019 1.019 6,085,000.00 6,085,000.00 98,012.45 112,312.20 6,203,319.44 6,203,319.44 6,183,012.45 6,183,012.45 6,065,080.33 2.350000 2.350000 99.765000 Average Coupon 1.580% All-In TIC 6,085,000.00 (14,299.75) (41,967.50) 6,028,732.75 04/24/2019 2.494104% Average Life 1.019 1.019 (Finance 8.000) Page 4 Arbitrage Yield 6,085,000.00 6,085,000.00 04/24/2019 1.573568% This information is p1ov1ded based on the factual information and assumptions provided to Gilmore & Bell. P.C. by a party to 01 a representative ofa party to the proposed transaction This anfonnatton 1s intended to pro\·ide factual infonnatton only and is provided m conjunction wnh our legal ~presentation. It is not intended ns fin:mcial advke or a financ-1al recommendation to any party. Gilmore & Bell. P.C. is not a financial advisor or a •·municipal advisor" as defined in the Secunties ExchanJ?e Act of 1934. as amended. Apr 2, 2019 4:22 pm Prepared by Gilmore & Bell. P.C. PROOF OF ARBITRAGE YIELD City of Salina, Kansas General Obligation Temporary Notes, Series 2019-1 Date Debt Ser\'ice 05/01/2020 6,183,012.45 6, 183,012.45 PV Factor 0.984148107 Present Value to 04/24/2019 @ 1.5735683630% 6,085,000.00 6,085,000.00 Proceeds Summarv Delivery date Par Value Target for yield calculation 04/24/2019 6,085,000.00 6,085,000.00 (Finance 8.000) Page 5 This inforn1Mion is provided based on the factual information and assumptions provided to G1lmo1e & Bell. P.C. by ft party to or a representative of a party to the proposed transaction Tb.is mfonnation is intended to provide factt1al infonn.·uion only and is provided m conjunction witll our legal representation. It 1s not intended as financial advice or a financu1I recommendation to any party. Gilmore & Bell, P.C. 1s not a financial ad,·1sor or a •·municipal ad' isor"' as defined in the Secunhes Exchange Act of 1934. as amended. Apr 2, 2019 4:22 pm Prepared by Gilmore & Bell. P.C. FORM 8038 STATISTICS City of Salina, Kansas General Obligation Temporary Notes, Series 2019-1 Bond Component Date Term Coupon: 05/01/2020 Maturity Date Final Maturity 05/01/2020 Entire Issue Proceeds used for accrued interest Dated Date Delivery Date Principal 6,085,000.00 6,085,000.00 Interest Rate 1.580% 04/24/2019 04/24/2019 Coupon Price 1.580% 100.000 Stated Issue Redemption Price at Maturity 6.085,000.00 6,085,000.00 6,085,000.00 6,085,000.00 Proceeds used for bond issuance costs (including underwriters' discount) Proceeds used for credit enhancement Proceeds allocated to reasonably required reserve or replacement fund Issue Price 6,085,000.00 6,085,000.00 Weighted Average Maturity 1.0194 (Finance 8.000) Page 6 Redemption at Maturity 6,085,000.00 6,085,000.00 Yield 1.5736% 0.00 56,267.25 0.00 0.00 This mfonn..·uion is provided based on the facrual infonuation and assumptions provided to Gilmore & Dell. P.C. by R pany to or a reptesentative ofa party to the proposed transaction This mfonnation is intended to pro,·ide fachial infonn..'ltion only and is provided 1n conJunct1on wnh our legal representauon. It 1s not intended as fin.i.ncial advice or a financial recommendation to any party. Otlmore & Be-11, PC. is not n financial ndv1sor or a .. munk1pal advisorn as definC"d Ill the Secunhes Exchan~e Act of J 934. as amended. EXHIBITB IRS FORM 8038-G VIA FEDERAL EXPRESS $ G ILMOI\._E BELL 2405 Grand Boulevard, Suite 1100 Kansas City, Missouri 64108-2521 (816) 221-1000 I (816) 221-1018 FAX I gilmorebell.com May7, 2019 Ref: 600596.20190 GMR Date· 07May19 Dep : Wg t : 1 . DD LBS DV: SHIPPING: SPECIAL: HANDLING: D.DO TOTAL. Internal Revenue Service Center Ogden, Utah 84201 Svcs: ** 2DAY ** TRCK: 4904 9933 0408 Re: $6,085,000 General Obligation Temporary Notes, Series 2019-1 of the City of Salina, Kansas Ladies and Gentlemen: Enclosed for filing pursuant to Section 149(e) of the Internal Revenue Code of 1986 Form 8038- G, Information Return for Tax-Exempt Governmental Obligations, being filed with respect to the above- captioned transaction. If you have any questions, please do not hesitate to contact me. GMR:jac Enclosure 600596.20190 Very truly yours, Gina M. Riekhof 13.69 1.13 0.00 14.82 x . July 18,2019 Dear Customer: The following is the proof-of-delivery for tracking number 490499330408. Delivery Information: Status: Signed for by: Setvice type: Special Handling: Shipping Information: Tracking number: Recipient: Delivered A.WATKINS FedEx 2Day Deliver Weekday 490499330408 INTERNAL REVENUE SERVICE CENTER 1973 N. RULON WHITE BLVD . OGDEN, UT 84201 US Reference Thank you for choosing FedEx. Delivered to: Delivery location: Delivery date: Ship date: Weight: Shipper: MALEEA VATER Gilmore Bell. P.C. 2405 Grand Blvd STE 1100 Shipping/Receiving 1973 RULON WHITE BLVD OGDEN, UT 84201 May 8, 2019 09:20 May7,2019 0.5 lbs/0.2 kg Kansas City, MO 641082521 US 600596.20190 GMR Form8038•G Information Return for Tax-Exempt Governmental Bonds (Rev. September 2018) .,._Under Internal Revenue Code section 149(e) OMS No. 1545-0720 .,._See separate instructions. Department of the Treasury Caution: If the issue price Is under $100,000, use Form 8038-GC. Internal Revenue Service .,._Go to www.lrs.gov/FB038G for Instructions and the latest Information. i;:.1:-..ill• Reporting Authority If Amended Return, check here ..,.. D 1 Issuer's name 2 Issuer's employer Identification number (EIN) Citv of Salina Kansas 48-6017288 3a Name of person (other than Issuer) with whom the IRS may communicate about this return (see Instructions) 3b Telephone number of other person shown on 3a Gina M. Rlekhof Gilmore & Bell P.C. Bond Counsel 816-221-1000 4 Number and street (or P.O. box If mall ls not delivered to street address) I Room/suite 5 Report number (For IRS Use Only) 2405 Grand Boulevard 1100 131 I 6 City, town, or post office, state, and ZIP code 7 Date of Issue Kansas Cltv, Missouri 64108 04/24/2019 8 Name of Issue 9 CUSIP number General Obliaatlon Temoorarv Notes, Serles 2019-1 794744 CK6 10a Name and title of officer or other employee of the Issuer whom the IRS may call for more Information (see 1 Ob Telephone number of officer or other instructions) employee shown on 10a Debbie Pack Director of Finance and Administration 785·309·5735 l::F.riilll• Type of Issue (enter the issue price). See the instructions and attach schedule. 11 Education. 11 12 Health and hospital 12 13 Transportation 13 14 Public safety • -14 15 Environment Oncluding sewage bonds) . 15 16 Housing 16 17 Utilities . 17 18 Other. Describe..,.. Public Improvements (streets, landfill, storm sewer, water, environmental, building) 18 6.085 000 00 19a If bonds are TANs or RANs, check only box 19a .... D " b If bonds are BANs, check only box 19b • .... 0 20 If bonds are in the form of a lease or installment sale, check box .... D ,_ l:r.1t1• II Description of Bonds. Complete for the entire issue for which this form is beinQ filed. (a) Anal maturity date (b) Issue price (c) Stated redemption (cl) Weighted (e)Yield price at maturity average maturity 21 05/01/2020 $ 6,085 000 $ 6,085,000 1.0194 vears 1.5736 % I :r.r1• ~'.I Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest 22 23 Issue price of entire issue (enter amount from line 21, column (b)) 23 6 085,000 00 24 Proceeds used for bond issuance costs (including underwriters' discount) 24 56,267 25 25 Proceeds used for credit enhancement 25 26 Proceeds allocated to reasonably required reserve or replacement fund 26 27 Proceeds used to refund prior tax-exempt bonds. Complete Part V • 27 28 Proceeds used to refund prior taxable bonds. Complete Part V 28 29 Total (add lines 24 through 28) . 29 56,267 25 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) 30 6 028 732 75 •!s.:1tlill'• Description of Refunded Bonds. Complete this part onlv for refunding bonds. 31 Enter the remaining weighted average maturity of the tax-exempt bonds to be refunded • years 32 Enter the remaining weighted average maturity of the taxable bonds to be refunded . . years 33 Enter the last date on which the refunded true-exempt bonds will be called (MM/00/YYYY} 34 Enter the date(s) the refunded bonds were issued ..,.. (MM/DDIYYYY) For Paperwork Reduction Act Notice, see separate Instructions. Cat. No. 63773S Form 8038-G (Rev. 9·2018) Form 8038·G (Rev. 9·2018) Page2 ·~''• Miscellaneous 35 Enter the amount of the state volume cap allocated to the Issue under section 141 (b)(5) 35 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC). See instructions 36a b Enter the final maturity date of the GIC ~ (MM/DDIYYYY) c Enter the name of the GIC provider~ 37 Pooled financings: Enter the amount of t_he proceeds of this issue that are to be used to make loans to other governmental units . 37 38a If this issue is a loan made from the proceeds of another tax-exempt issue, check box~ D and enter the following information: b Enter the date of the master pool bond~ (MM/DDIYYYY) --------------- c Enter the EIN of the issuer of the master pool bond~------------------ d Enter the name of the issuer of the master pool bond~ ----------------- 39 If the Issuer has designated the issue under section 265(b)(3)(8)0)(111) (small issuer exception), check box ~ D 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . • . . . . . • . ~ D 41 a If the issuer has identified a hedge, check here~ D and enter the following information: b Name of hedge provider~ c Type of hedge~ ------------------- d Term of hedge~------------------- 42 If the issuer has superintegrated the hedge, check box . . . • . . . . • . . • . . . • . . . . . ~ D 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated according to the requirements under the Code and Regulations (see instructions), check box . . . . . . ~ 0 44 If the issuer has established written procedures to monitor the requirements of section 148, check box . . . ~ 0 45a If some portion of the proceeds was used to reimburse expenditures, check here ~ 0 and enter the amount of reimbursement • . . . . . . • • • . . • . ~ 1,713,189.46 b Enter the date the official intent was ado ted ~ MM/DD 06/05/2017 Signature and Consent Paid Preparer Use Only Under penalties of pe~ury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the Issuer's return Information, as necessary to process thi~he person that I ha ~ed above. 5'/ ~ { ~ Signature of Issuer's authorized representative Date PrinVType preparer's name P~aref's'signat Gina Riekhof /...--- Firm's name ... Gilmore & Bell P.C. ~ Debbie Pack, Finance Director r Type or print name and title Check 0 ff PTIN self-employed p02051171 43-1611738 816·221-1000 Form 8038-G (Rev. 9·2018) EXHIBITC-1 PURCHASER'S RECEIPT AND ISSUE PRICE CERTIFICATE EXHIBITC-1 PURCHASER'S RECEIPT FOR NOTES AND ISSUE PRICE CERTIFICATE S6,085,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 The undersigned, on behalf of Country Club Bank, Prairie Village, Kansas (the "Original Purchaser"), as the Original Purchaser, and Underwriter of the above-described notes (the "Notes"), being issued on the date of this Certificate by the City of Salina, Kansas (the "Issuer"), certifies and represents as follows: 1. Receipt for Notes. The Original Purchaser acknowledges receipt on the date hereof of all of the Notes, consisting of fully registered Notes in authorized denominations in a form acceptable to the Original Purchaser. 2. Issue Price. (a) Public Offering. The Original Purchaser offered all of the Notes to the Public (as defined below) in a bona fide initial offering. (b) Reasonably Expected Initial Offering Price. As of the sale date of the Notes (April I, 2019), the reasonably expected initial offering prices of the Notes to the Public by, the Original Purchaser are the prices listed in Attachment A (the "Expected Offering Prices"). The Expected Offering Prices are the prices for the Maturities of the Notes used by the Original Purchaser in formulating its bid to purchase the Notes. (c) Defined Terms. (i) The term "Maturity" means Notes with the same credit and payment terms. Notes with different maturity dates, or Notes with the same maturity date but different stated interest rates, arc treated as separate maturities. (ii) The term "Public" means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The tenn "related party" is defined in U.S. Treasury Regulation § 1.150-1 (b) which generally provides that the term related party means any two or more persons who have a greater than SO percent common ownership, directly or indirectly. (iii) The term "Underwriter" means (A) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Notes to the Public, and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) of this paragraph to participate in the initial sale of the Notes to the Public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Notes to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this Certificate represents the Original Purchaser's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the certifications contained herein will be relied upon by the Issuer in executing and delivering the Federal Tax Certificate and with respect to compliance with the federal income tax rules affecting the Notes, by George K. Baum & Company, Municipal Advisor to the Issuer in executing the Municipal Advisor's Certificate Regarding the Competitive Sale, and by Gilmore & Bell, P.C., Bond Counsel to the Issuer, in rendering its opinion relating to the exclusion from federal gross income of the interest on the Notes and other federal income tax advice that it may give to the Issuer from time to time relating to the Notes. Dated: April 24, 2019. COUNTRY CLUB BANK PRAIRIE VILLAGE, KANSAS Maturity Tyµe of Bond OS/01/2020 Tenn I Coupon Tolnl Attachment A Expected Offering Prices Coupon Yield 1.580% 1.580"/o Maturity Value 6,085,000 00 S6,085,000.00 Price Dollar Price 100.000% 6,085,00000 S6,085,000.00 EXHIBITC-2 MUNICIPAL ADVISOR'S CERTIFICATE REGARDING THE COMPETITNE SALE $6,085,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-I The undersigned, on behalf of George K. Baum & Company, Kansas City, Missouri (the "Municipal Advisor"), as the Municipal Advisor to the City of Salina, Kansas (the "Issuer") in connection with the issuance of the above-described notes (the "Notes"), has assisted the Issuer in soliciting and receiving bids from potential underwriters in connection with the sale of the Notes in a competitive bidding process in which bids were requested for the purchase of the Notes at specified written terms, and hereby certifies as set forth below with respect to the bidding process and award of the Notes: 1. The Notes were offered for sale at specified written terms more particularly described in the Notice of Sale, which was distributed to potential bidders, a copy of which is attached to this Certificate as Attachment 1. 2. The Notice of Sale was disseminated electronically through Parity® and MuniOS. The methods of distribution of the Notice of Sale are regularly used for purposes of disseminating notices of sale of new issuances of municipal notes, and notices disseminated in such manner are widely available to potential bidders. 3. To the knowledge of the Municipal Advisor, all bidders were offered an equal opportunity to bid to purchase the Notes, and the bidding process did not afford any opportunity for bidders to review other bids before providing a bid (that is, no "last-look"). 4. The Issuer received bids from at least three bidders who represented that each has an established industry reputation for underwriting new issuances of municipal notes. Based upon the Municipal Advisor's knowledge and experience in acting as the municipal advisor for other municipal issues, the Municipal Advisor believes those representations to be accurate. Copies of the bids received are attached to this Certificate as Attachment 2. 5. The winning bidder was Country Club Bank, Prairie Village, Kansas (the "Original Purchaser"), whose bid was determined to be the best conforming bid in accordance with the terms set forth in the Notice of Sale, as shown in the bid comparison attached as Attachment 3 to this Certificate. The Issuer awarded the Notes to the Original Purchaser. The representations set forth in this Certificate are limited to factual matters only. Nothing in this Certificate represents the Municipal Advisor's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the certifications contained herein will be relied upon by the Issuer in executing and delivering the Federal Tax Certificate and with respect to compliance with the federal income tax rules affecting the Notes, and by Gilmore & Bell, P.C., Bond Counsel to the Issuer, in rendering its opinion relating to the exclusion from federal gross income of the interest on the Notes and other federal income tax advice that it may give to the Issuer from time to time relating to the Notes. Dated: April 24, 2019 GEORGE K. DAUM & COMPANY KANS~AS-CITY,M so~ By: ~',[Ad~ Title: ~~~-'b-'"-¥-~~~~~~- Attachment 1 Notice of Sale NOTICE OF SALE CITY OF SALINA, KANSAS $6,085,000. GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 $11,445,000* GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2019-A (GENERAL OBLIGATION NOTES AND BONDS PAYABLE FROM UNLIMITED AD VALOREM TAXES) Bids. Written and electronic (as explained below) bids for the purchase of General Obligation Temporary Notes, Series 2019-1 (the "Notes") and General Obligation Internal Improvement Bonds, Series 2019-A (the "Bonds," and collectively with the Notes, the "Obligations") of the City of Salina, Kansas (the "Issuer") herein described will be received on behalf of the Issuer by the Issuer's Financial Advisor, in the case of written bids, at the address hereinafter set forth, and in the case of electronic bids, via PAR/Tl'®, on APRIL 1, 2019 (the "Sale Date") until the following times (the "Submittal Hour"): SERIES Series 2019-1 Notes Series 2019-A Bonds SUBMITTAL HOUR (Central Time) 12:00 p.m. 1:00 p.m. All bids will be publicly evaluated at said time and place and the award of the Obligations to the successful bidder(s) (the "Successful Bidder(s)") will be acted upon by the City Commission of the Issuer (the "Governing Body") at its meeting to be held at 4:00 p.m. on the Sale Date. No oral or auction bids will be considered. Any qualified bidder may bid on one or both series of the Obligations. Capitalized terms not otherwise defined herein shall have the meanings set forth in the hereinafter referenced Preliminary Official Statement relating to the Obligations. THE NOTES Terms of the Notes. The Notes will consist of fully registered notes in the denomination of$5,000 or any integral multiple thereof (the "Authorized Denomination"). The Notes will be dated April 24, 2019 (the "Dated Date"), and will become due on May 1, 2020. The Notes will bear interest from the Dated Date at rates to be determined when the Notes are sold as hereinafter provided, which interest will be payable at maturity. Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principal amount of the Notes, depending on the purchase price bid, by the Successful Bidder. The Successful Bidder may not withdraw its bid or change the purchase price or interest rate bid as a result of any changes made to the principal amount of the Notes as described herein. If there is an increase or decrease in the final aggregate principal amount of the Notes as described above, the Issuer will notify the Successful Bidder by means of telephone or facsimile transmission, subsequently confirmed in writing, no later than 2:00 p.m. •Preliminary; subject to change as provided in "Adjustment of Issue Size," herein. applicable Central Time, on the Sale Date. The actual purchase price for the Notes shall be calculated by applying the percentage of par value bid by the Successful Bidder against the final aggregate principal amount of the Notes, as adjusted, plus accrued interest from the Dated Date to the Closing Date (as hereinafter defined). Place of Payment. The principal of and interest on the Notes will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Note Registrar"). The principal of and interest on each Note will be payable at maturity or earlier redemption to the owner thereof whose name is on the registration books (the "Note Register") of the Note Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. Such amounts will be payable to the Registered Owner of such Note as of the fifteenth day (whether or not a business day) of the calendar month next preceding each Interest Payment Date (the "Record Date") (a) mailed by the Paying Agent to the address of such Registered Owner as shown on the Note Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Registered Owner of $500,000 or more in aggregate principal amount of Notes, by wire transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the wire transfer address to which such Registered Owner wishes to have such wire directed. Note Registration. The Notes will be registered pursuant to a plan ofregistration approved by the Issuer and the Attorney General of the State of Kansas (the "State"). The Issuer will pay for the fees of the Note Registrar for registration and transfer of the Notes and will also pay for printing a reasonable supply ofregistered note blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note Registrar, will be the responsibility of the Registered Owners. Redemption of Notes Prior to Maturity. General Whenever the Issuer is to select Notes for the purpose of redemption, it will, in the case of Notes in denominations greater than the minimum Authorized Denomination, ifless than all of the Notes then outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such fully registered Note as though it were a separate Note in the minimum Authorized Denomination. Optional Redemption. At the option of the Issuer, the Notes will be subject to redemption and payment prior to maturity on November 1, 2019, and thereafter, as a whole at any time or in part (selection of the amount of Notes to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the date ofredemption. Notice and Effect of Call for Redemption. Unless waived by any owner of Notes to be redeemed, if the Issuer shall call any Notes for redemption and payment prior to the maturity thereof, the Issuer shall give written notice of its intention to call and pay said Notes to the Note Registrar. In addition, the Issuer shall cause the Note Registrar to give written notice of redemption to the registered owners of said Notes. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the Redemption Date. All notices of redemption shall state the Redemption Date, the redemption price, the Notes to be redeemed, the place of surrender of Notes so called for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by State law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Note be called for redemption and payment as aforesaid, all interest on such Note shall cease from and after the Redemption Date, provided funds are available for its payment at the price hereinbefore specified. 2 Authority, Purpose and Security for the Notes. The Notes are being issued pursuant to K.S.A. 10-101to10-125, inclusive, specifically including K.S.A. 10-123, K.S.A. 10-620 et seq., K.S.A. 12-631r ands, K.S.A. 12-685 et seq., K.S.A. 12-6a01 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-2101 et seq., and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented, and a resolution adopted by the Governing Body (the "Note Resolution") for the purpose of paying a portion of the cost of certain public improvement projects and to pay costs associated with issuance of the Notes. The Notes shall be general obligations of the Issuer, payable as to both principal and interest in part from special assessments levied upon the property benefitted by the construction of certain public improvements, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal of and interest on the Notes as the same become due. THE BONDS Terms of.the Bonds. The Bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof (the "Authorized Denomination"). The Bonds will be dated April 24, 2019 (the "Dated Date"), and will become due in principal installments on October 1 in the years as follows: Principal Principal Year Amount• Year Amount* 2020 $265,000 2030 $580,000 2021 435,000 2031 595,000 2022 450,000 2032 620,000 2023 465,000 2033 640,000 2024 475,000 2034 660,000 2025 495,000 2035 680,000 2026 510,000 2036 700,000 2027 525,000 2037 725,000 2028 540,000 2038 750,000 2029 565,000 2039 770,000 The Bonds will bear interest from the Dated Date at rates to be determined when the Bonds are sold as hereinafter provided, which interest will be payable semiannually on April 1 and October 1 in each year, beginning on April 1, 2020 (the "Interest Payment Dates"). Adjustment of Issue Size. The Issuer reserves the right to increase or decrease the total principal amount of the Bonds or the schedule of principal payments described above, depending on the purchase price and interest rates bid, by the Successful Bidder. The Successful Bidder may not withdraw its bid or change the purchase price or interest rates bid as a result of any changes made to the principal amount of the Bonds or the schedule of principal payments as described herein. If there is an increase or decrease in the final aggregate principal amount of the Bonds or the schedule of principal payments as described above, the Issuer will notify the Successful Bidder by means of telephone or facsimile transmission, subsequently confirmed in writing, no later than 2:00 p.m. applicable Central Time, on the Sale Date. The net production *Preliminary; subject to change as provided in "Adjustment of Issue Size, "herein. 3 as a percentage of the principal amount of the Bonds generated from the bid of the Successful Bidder will not be decreased as a result of any change to the total principal amount of the Bonds or the schedule of principal payments described herein. Notwithstanding the requirements of the section entitled "Establishment of Issue Price," if requested by the Financial Advisor, the Successful Bidder shall within 20 minutes of such request provide the Financial Advisor with the initial offering prices of the Bonds to the public so as to allow for proper resizing of the Bonds. Place of Payment. The principal of and interest on the Bonds will be payable in lawful money of the United States of America by check or draft of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"). The principal of each Bond will be payable at maturity or earlier redemption to the owner thereof whose name is on the registration books (the "Bond Register") of the Bond Registrar (the "Registered Owner") upon presentation and surrender at the principal office of the Paying Agent. Interest on each Bond will be payable to the Registered Owner of such Bond as of the fifteenth day (whether or not a business day) of the calendar month next preceding each Interest Payment Date (the "Record Date") (a) mailed by the Paying Agent to the address of such Registered Owner as shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in the case of an interest payment to Cede & Co. or any Registered Owner of $500,000 or more in aggregate principal amount of Bonds, by wire transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the wire transfer address to which such Registered Owner wishes to have such wire directed. Bond Registration. The Bonds will be registered pursuant to a plan of registration approved by the Issuer and the Attorney General of the State of Kansas (the "State"). The Issuer will pay for the fees of the Bond Registrar for registration and transfer of the Bonds and will also pay for printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, will be the responsibility of the Registered Owners. Redemption of Bonds Prior to Maturity. General. Whenever the Issuer is to select Bonds for the purpose of redemption, it will, in the case of Bonds in denominations greater than the minimum Authorized Denomination, ifless than all of the Bonds then outstanding are to be called for redemption, treat each minimum Authorized Denomination of face value of each such fully registered Bond as though it were a separate Bond in the minimum Authorized Denomination. Optional Redemption. At the option of the Issuer, Bonds maturing on October 1 in the years 2027, and thereafter, will be subject to redemption and payment prior to maturity on October 1, 2026, and thereafter, as a whole or in part (selection of maturities and the amount of Bonds of each maturity to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus accrued interest to the date of redemption. Mandatory Redemption. A bidder may elect to have all or a portion of the Bonds scheduled to mature in consecutive years issued as term bonds (the "Term Bonds") scheduled to mature in the latest of said consecutive years and subject to mandatory redemption requirements consistent with the schedule of serial maturities set forth above, subject to the following conditions: (a) not less than all Bonds of the same serial maturity shall be converted to Term Bonds with mandatory redemption requirements; and (b) a bidder shall make such an election by completing the applicable paragraph on the Official Bid Form or completing the applicable information on PARITJI®. 4 Notice and Effect of Call for Redemption. Unless waived by any owner of Bonds to be redeemed, if the Issuer shall call any Bonds for redemption and payment prior to the maturity thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the Bond Registrar. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the registered owners of said Bonds. Each of said written notices shall be deposited in United States first class mail not less than 30 days prior to the Redemption Date. All notices of redemption shall state the Redemption Date, the redemption price, the Bonds to be redeemed, the place of surrender of Bonds so called for redemption and a statement of the effect of the redemption. The Issuer shall also give such additional notice as may be required by State law or regulation of the Securities and Exchange Commission in effect as of the date of such notice. If any Bond be called for redemption and payment as aforesaid, all interest on such Bond shall cease from and after the Redemption Date, provided funds are available for its payment at the price hereinbefore specified. Authority, Purpose and Security for the Bonds. The Bonds are being issued pursuant to K.S.A. 10-101to10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-63 lr, K.S.A. 12-685 et seq., K.S.A. 65-163u, Charter Ordinance No. 39 of the Issuer and Article 12, Section 5 of the Constitution of the State of Kansas, all as amended and supplemented, and an ordinance and a resolution adopted by the Governing Body (collectively, the "Bond Resolution") for the purpose of paying a portion of the cost of certain public improvement projects, to pay the costs associated with the issuance of the Bonds and retire a portion of the Issuer's outstanding general obligation temporary notes. The Bonds shall be general obligations of the Issuer payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of the Issuer are irrevocably pledged for the prompt payment of the principal and interest on the Bonds as the same become due. THE OBLIGATIONS Book-Entry-Only System. The Depository Trust Company, New York, New York ("DTC"), will act as securities depository for the Obligations. The Obligations will initially be issued exclusively in "book entry" form and shall be initially registered in the name of Cede & Co., as the nominee of DTC and no beneficial owner will receive certificates representing their interests in the Obligations. During the term of the Obligations, so long as the book-entry-only system is continued, the Issuer will make payments of principal of, premium, if any, and interest on the Obligations to DTC or its nominee as the Registered Owner of the Obligations, DTC will make book-entry-only transfers among its participants and receive and transmit payment of principal of, premium, if any, and interest on the Obligations to its participants who shall be responsible for transmitting payments to beneficial owners of the Obligations in accordance with agreements between such participants and the beneficial owners. The Issuer will not be responsible for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. In the event that: (a) DTC determines not to continue to act as securities depository for the Obligations, or (b) the Issuer determines that continuation of the book-entry-only form of evidence and transfer of ownership of the Obligations would adversely affect the interests of the beneficial owners of the Obligations, the Issuer will discontinue the book-entry-only form of registration with DTC. If the Issuer fails to identify another qualified securities depository to replace DTC, the Issuer will cause to be authenticated and delivered to the beneficial owners replacement Bonds in the form of fully registered certificates. Reference is made to the Preliminary Official Statement for further information regarding the book-entry-only system ofregistration of the Obligations and DTC. Submission of Bids. Written bids must be made on forms which may be procured from the Clerk or the Financial Advisor and shall be addressed to the undersigned, and marked "Proposal for General Obligation Temporary Notes, Series 2019-1" or "Proposal for General Obligation Internal Improvement Bonds, Series 2019-A," as applicable. Written bids submitted by facsimile should not be preceded by a cover sheet and should be sent only once to (785) 309-5711. Confirmation ofreceipt of facsimile bids may 5 be made by contacting the Financial Advisor at the number listed below. Electronic bids via PARJT'f® must be submitted in accordance with its Rules of Participation, as well as the provisions of this Notice of Sale. If provisions of this Notice of Sale conflict with those of PARIT'f®, this Notice of Sale shall control. Bids must be received prior to the Submittal Hour on the Sale Date. The Issuer shall not be responsible for failure of transmission of facsimile or delivery by mai I or in person of any bid. Any bidder desiring to have the Financial Advisor assist in the delivery of such bidder's bid should provide pertinent bidding information to the Financial Advisor not later than 30 minutes prior to the Submittal Hour on the Sale Date. PARITY®. Information about the electronic bidding services of PARJT'f® may be obtained from i-Deal LLC at 1359 Broadway, 2nd Floor, New York, New York 10018, Phone No. (212) 849-5023 and from the following website: www.n ewissuehome.i-dcal.com. Conditions of Bids. Bids shall be submitted separately for each series of the Obligations. The Notes: Proposals will be received on the Notes bearing such rate of interest as may be specified by the bidders, subject to the following conditions: (a) the same rate shall apply to all Notes; (b) the interest rate may not exceed 5 .00%; ( c) no supplemental interest payments will be considered; ( d) the interest rate specified shall be a multiple of 11100 or 1/8 of I%; and (e) the interest rate shall not be zero (0%) percent. No bid for less than 99.50% of the principal amount of the Notes, and accrued interest thereon to the date of delivery will be considered. Each bid shall specify the total interest cost (expressed in dollars) during the term of the Notes on the basis of such bid, the discount, if any, the premium, if any, offered by the bidder and the net interest cost (expressed in dollars) on the basis of such bid. Each bidder shall certify to the Issuer the correctness of the information contained on the Official Bid Fonn; the Issuer will be entitled to rely on such certification. Each bidder agrees that, if it is awarded the Notes, it will provide the ce1tification as to initial offering price described under the caption "Establishment of Issue Price" in this Notice. The Bonds: Proposals will be received on the Bonds bearing such rate or rates of interest as may be specified by the bidders, subject to the following conditions: (a) the same rate shall apply to all Bonds of the same maturity year; (b) no interest rate may exceed 5.00%; (c) no supplemental interest payments will be considered; (d) each interest rate specified shall be a multiple of 1/20 or 1/8 of I%; (e) no zero (0%) percent interest rates will be permitted; and (f) the maximum difference between the high and low interest rates shall not exceed four percent (4.00%). No bid for less than 100.00% of the principal amount of the Bonds and accrued interest thereon to the date of delivery will be considered. Each bid shall specify the total interest cost (expressed in dollars) during the term of the Bonds on the basis of such bid, the premium, if any, offered by the bidder, the net interest cost (expressed in dollars) on the basis of such bid, and an estimate of the TIC (as hereinafter defined) on the basis of such bid. Each bidder shall certify to the Issuer the correctness of the information contained on the Official Bid Form; the Issuer will be entitled to rely on such certification. Each bidder agrees that, if it is awarded the Bonds, it will provide the certification as to initial offering prices described under the caption "Establishment of Issue Price" in this Notice. Good Faith Deposit. All Obligations: The Successful Bidder(s) must supply a good faith deposit (the "Deposit") in the amount of 2.00% of the principal amount of the of each respective Obligation as indicated on the first page of this Notice payable to the order of the Issuer to secure the Issuer from any loss resulting from the failure of the Successful Bidder(s) to comply with the terms of its bid. The Deposit must be received by the Issuer by 3:00 p.m. Central Time on the Sale Date. The Deposit shall be submitted by wire transfer in Federal Reserve funds, immediately available for use by the Issuer. 6 No interest on the Deposit will be paid by the Issuer. The Deposit will be held by the Issuer until the Successful Bidder(s) have complied with all of the terms and conditions of this Notice at which time the amount of said Deposit shall be returned to the Successful Bidder(s) or deducted from the purchase price at the option of the Issuer. If a bid is accepted, but the Issuer fails to deliver the Obligations to the Successful Bidder(s) in accordance with the terms and conditions of this Notice, said Deposit, or the proceeds thereof, will be returned to the Successful Bidder(s). If the Successful Bidder(s) default in the performance of any of the terms and conditions of this Notice, the proceeds of such Deposit will be retained by the Issuer as and for liquidated damages. Basis of Award. The Notes: Subject to the timely receipt of the Deposit as set forth above, the award of the Notes will be made on the basis of the lowest net interest cost ("NIC") (expressed in dollars), which will be determined by subtracting the amount of the premium bid, ifany, from or adding the amount of the discount bid, if any, to the total interest cost to the Issuer. If there is any discrepancy between the net interest cost specified and the interest rate and premium/discount specified, the interest rate and premium/discount specified shall govern and the NIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest NIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. The Bonds: Subject to the timely receipt of the Deposit as set forth above, the award of the Bonds will be made on the basis of the lowest true interest cost ("TIC"), which will be determined as follows: the TIC is the discount rate (expressed as a per annum percentage rate) which, when used in computing the present value of all payments of principal and interest to be paid on the Bonds, from the payment dates to the Dated Date, produces an amount equal to the price bid, including any adjustments for premium, if any. Present value will be computed on the basis of semiannual compounding and a 360-day year of twelve 30- day months. Bidders arc requested to supply an estimate of the TIC for the Obligations on the Official Bid Form, computed as specified herein on the basis of their respective bids, which shall be considered as informative only and not binding on either the Issuer or the bidder. The Issuer or its Financial Advisor will verify the TIC based on such bids. If there is any discrepancy between the TIC specified and the bid price and interest rates specified, the specified bid price and interest rates shall govern and the TIC specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest TIC are received, the Governing Body will determine which bid, if any, will be accepted, and its determination is final. For All Obligations: The Issuer reserves the right to reject any and/or all bids and to waive any irregularities in a submitted bid. Any bid received after the Submittal Hour on the Sale Date will not be considered. Any disputes arising hereunder shall be governed by the laws of the State, and any party submitting a bid agrees to be subject to jurisdiction and venue of the federal and state courts within the State with regard to such dispute. The Issuer's acceptance of the Successful Bidders' proposal for the purchase of the Obligations in accordance with this Notice of Sale shall constitute a purchase agreement between the Issuer and the Successful Bidder(s) for purposes of the laws of the State and a contract between the Issuer and the Successful Bidder(s) for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") and Rule G-32 of the Municipal Securities Rulemaking Board ("Rule G-32"). The method of acceptance shall be determined solely by the Governing Body. Ratings. The outstanding general obligation bonds of the Issuer are rated "Aa3" by Moody's Investors Service. The Issuer has applied to Moody's Investors Service for ratings on the Obligations herein 7 offered for sale. Such application and ratings arc further described in the Preliminary Official Statement, hereinafter described. Optional Bond Insurance. The Issuer has not applied for any policy of municipal bond insurance with respect to the Obligations, and will not pay the premium in connection with any policy of municipal bond insurance desired by the Successful Bidder(s). In the event a bidder desires to purchase and pay all costs associated with the issuance of a policy of municipal bond insurance in connection with the Obligations, a commitment from the selected insurer must be attached to such bidder's Official Bid Form, and shall specify all terms and conditions to which the Issuer will be required to agree in connection with the issuance of such insurance policy. The Issuer specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the Issuer. If the Successful Bidder(s) elect to purchase the Obligations with municipal bond insurance, certain rating agencies will assign their ratings to the Obligations with the understanding that upon delivery of the Obligations, a policy insuring the payment when due of the principal of and interest on such Obligation will be issued by such bond insurer. All costs associated with the purchase and issuance of such municipal bond insurance policy and associated ratings and expenses (other than any independent rating requested by the Issuer) shall be paid by the Successful Bidder(s). Failure of the municipal bond insurer to issue the policy afterthe award of the Obligations shall not constitute cause for failure or refusal by the Successful Bidder(s) to accept delivery of the Obligations. CUSIP Numbers. CUSIP identification numbers will be assigned and printed on the Obligations, but neither the failure to print such number on any Obligation nor any error with respect thereto shall constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the Obligations in accordance with the terms of this Notice. The Financial Advisor will apply for CUSIP numbers pursuant to Rule G-34 implemented by the Municipal Securities Rulemaking Board. All expenses in relation to the assignment and printing of CUSIP numbers on the Obligations will be paid by the Issuer. Delivery and Payment. The Issuer will pay for preparation of the Obligations and will deliver the Obligations properly prepared, executed and registered without cost on or about APRIL 24, 2019 (the "Closing Date"), to OTC for the account of the Successful Bidder(s). The Successful Bidder(s) will be furnished with a certified transcript of the proceedings evidencing the authorization and issuance of the Obligations and the usual closing documents, including a certificate that there is no litigation pending or threatened at the time of delivery of the Obligations affecting their validity and a certificate regarding the completeness and accuracy of the Official Statement. Payment for the Obligations shall be made in federal reserve funds, immediately available for use by the Issuer. The Issuer will deliver one Obligation of each maturity registered in the nominee name ofDTC. Establishment of Issue Price. In order to provide the Issuer with information necessary for compliance with Section 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (collectively, the "Code"), the Successful Bidder(s) will be required to assist the Issuer in establishing the "issue price" of the Obligations and complete, execute and deliver to the Issuer prior to the Closing Date, a written certification in a form acceptable to the Successful Bidder(s), the Issuer and Bond Counsel (each, an "Issue Price Certificate") containing the following for the Notes or for each maturity of the Bonds: (1) the interest rate; (2) the reasonably expected initial offering price to the "public" (as said term is used in Treasury Regulation Section 1.148-l(f) (the "Regulation")) or the sale price; and (3) pricing wires or equivalent communications supporting such offering or sale price. However, such Issue Price Certificate may indicate that the Successful Bidder has purchased the Obligations for its own account in a capacity other than as an underwriter or wholesaler, and currently has no intent to reoffer the Obligations for sale to 8 the public. Any action to be taken or documentation to be received by the Issuer pursuant hereto may be taken or received by the Financial Advisor or Bond Counsel on behalf of the Issuer. The Issuer intends that the sale of the Obligations pursuant to this Notice shall each constitute a "competitive sale" as defined in the Regulation. In support thereof: (1) the Issuer shall cause this Notice to be disseminated to potential bidders in a manner reasonably designed to reach potential bidders; (2) all bidders shall have an equal opportunity to submit a bid; (3) the Issuer reasonably expects that it will receive bids for each series of the Obligations from at least three bidders that have established industry reputations for underwriting municipal securities such as the Obligations; and (4) the Issuer anticipates awarding the sale of the Obligations, as applicable, to the bidder that provides a bid with the lowest TIC in accordance with the section hereof entitled "Basis of Award." Any bid submitted pursuant to this Notice shall be considered a firm offer for the purchase of the Obligations as specified therein. The Successful Bidder(s) shall constitute an "underwriter" as said term is defined in the Regulation. By submitting its bid, each bidder confirms ( 1) that it shall require any agreement among underwriters, a selling group agreement or other agreement to which it is a party relating to the initial sale of the Obligations, to include provisions requiring compliance with provisions of the Code and the Regulation regarding the initial sale of the Obligations, and (2) that it has an established industry reputation for underwriting municipal securities such as the Obligations. If all of the requirements of a "competitive sale" are not satisfied for a series of the Obligations, the Issuer shall advise the applicable Successful Bidder of such fact at the time of award of such Obligation to the Successful Bidder and the following provisions shall apply to such Obligation. In such event, any bid submitted will not be subject to cancellation or withdrawal. Within 20 minutes of a request by the Issuer, the Successful Bidder(s) shall advise the Issuer if a "substantial amount" (as defined in the Regulation (10%)) of any maturity of the Bonds and the Notes has been sold to the public and the price at which such substantial amount was sold. The Issuer will treat such sale price as the "issue price" for such maturity, applied on a maturity-by-maturity basis. The Issuer will not require the Successful Bidder(s) to comply with that portion of the Regulation commonly described as the "hold-the-offering-price" requirement for the remaining maturities, but the Successful Bidder(s) may elect such option. If the Successful Bidder(s) exercise such option, the Issuer will apply the initial offering price to the public provided in the bid as the issue price for the Obligations. If the Successful Bidder(s) do not exercise that option, it shall thereafter promptly provide the Issuer the prices at which a substantial amount of such maturities are sold to the public. Any change in the issue price of any of the Obligations after the Submittal Hour will not affect the purchase price for the Obligations submitted in the bid of the Successful Bidder(s). After the Closing Time, the Successful Bidder(s) agree to provide to the Issuer all reasonably requested information related to establishing the issue price of the Obligations if: (a) the Issuer requests the information in connection with an audit or inquiry by the Internal Revenue Service (the "IRS") or the Securities and Exchange Commission (the "SEC") or (b) the information is required to be retained by the Issuer pursuant to future regulation or similar guidance from the IRS, the SEC or other federal or state regulatory authority. Preliminary Official Statement and Official Statement. The Issuer has prepared a Preliminary Official Statement dated March 25, 2019, "deemed final" by the Issuer except for the omission of certain information as provided in the Rule, copies of which may be obtained from the Clerk or from the Financial Advisor. Upon the sale of the Obligations, the Issuer will adopt the final Official Statement and will furnish the Successful Bidder(s), without cost, within seven business days of the acceptance of the Successful Bidder(s)' proposal, with a sufficient number of copies thereof, which may be in electronic format, in order 9 for the Successful Bidder to comply with the requirements of the Rule and Rule G-32 (collectively, the "Rules"). Additional copies may be ordered by the Successful Bidder(s) at its expense. Continuing Disclosure. In the Note Resolution and the Bond Resolution, the Issuer has covenanted to provide annually certain financial information and operating data and other information necessary to comply with the Rule, and to transmit the same to the Municipal Securities Rulemaking Board. This covenant is for the benefit of and is enforceable by any Registered Owner of the Obligations. For further information, reference is made to the caption "CONTINUING DISCLOSURE" in the Preliminary Official Statement. Assessed Valuation and Indebtedness. The total assessed valuation of the taxable tangible property within the Issuer for the year 2018 was $487, 787 ,922. The total general obligation indebtedness of the Issuer as of the Dated Date, including the Obligations being sold but excluding the temporary notes to be redeemed with proceeds from the sale of the Obligations, is $77,360,000. Legal Opinion. The Obligations will be sold subject to the approving legal opinion of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel to the Issuer, which opinion will be furnished and paid for by the Issuer, will be printed on the Obligations, if the Obligations are printed, and will be delivered to the Successful Bidder(s) when the Obligations are delivered. Said opinion will also include the opinion of Bond Counsel relating to the interest on the Obligations being excludable from gross income for federal income tax purposes and exempt from income taxation by the State. Reference is made to the Preliminary Official Statement for further discussion of federal and State income tax matters relating to the interest on the Obligations. 10 Additional Information. Additional infonnation regarding the Obligati ons may be obtained from the undersigned, or from the Financial Advisor, at the addresses set forth below: DATED: March 25, 2019. CITY OF SALINA, KANSAS By Shandi Wi cks, Clerk Written and Facsimile Bid and Good Faith Deposit Delivery Address: Debbie Pack, Director of Finance and Administration City of Salina, Kansas 300 West Ash Street, Room 206 Salina, Kansas 67402 Phone No.: (785) 309-5735 Fax No.: (785) 309-5711 Email: dcbbic.pack@sa lina .org Financial Advisor: George K. Baum & Company 4801 Main Street, Suite 500 Kansas City, Mi ssouri 6411 2 Attn: David A1tebeny Phone No.: (8 16)283-5137 Fax No.: (8 16) 283-5326 Email: arteberry@gkbaum.com 11 TO: Shandi Wicks, Clerk City of Salina, Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 April 1, 2019 For $6,085,000• principal amount of General Obligation Temporary Notes, Series 20 I 9-1, of the City of Salina, Kansas, to be dated April 24, 2019, as described in the Notice of Sale (the "Notice") dated March 25, 2019, said Notes to bear interest as follows: Maturity Mayt 2020 Principal Amount* $6,085,000 Interest Rate ____ % *Subject to change; see the Notice. the undersigned will pay the total principal amount of the Notes, plus a premium or less a discount as set forth below, plus accrued interest to the date of delivery. Principal Amount ....................................................................................................................................................... $6,085,000.00• Less Discount (not to exceed $30,425 or 0.50%) .................................................................................... ~--------~ Plus Premium (if any) ............................................................................................................................. ________ _ Total Purchase Price ................................................................................................................................ $ ________ _ Total interest cost to maturity at the rates specified ................................................................................ $ ________ _ Net interest cost ...................................................................................................................................... $ ________ _ 0 The Bidder elects to purchase Municipal Bond Insurance from: [Assured] [AGM] [BAM] '------~· Circle one or complete blank. This proposal is subject to all terms and conditions contained in the Notice, and ifthe undersigned is the Successful Bidder, the undersigned will comply with all of the provisions contained in the Notice. The acceptance of this proposal by the Issuer shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule I 5c2-12 of the Securities and Exchange Commission and a bond purchase agreement for purposes of the laws of the State of Kansas. Submitted by: --------------- (LIST ACCOUNT MEMBERS ON REVERSE) By: -~~~~~~~~~~~~ Telephone No. '-----'------------ ACCEPTANCE Pursuant to action duly taken by the Governing Body of the City of Salina, Kansas, the above proposal is hereby accepted on April I, 2019. Attest: Clerk Mayor NOTE: No additions or alterations in the above proposal form shall be made, and any erasures may cause rejection of any bid. Sealed bids may be filed with the Clerk, Shandi Wicks, 300 West Ash, Salina, Kansas 67402, facsimile bids may be filed with the Clerk, Fax No. (785) 309-57 I I or electronic bids may be submitted via PARITY®, at or prior to 12:00 p.m., Central Time, on April I, 2019. Any bid received after such time will not be considered. TO: Shandi Wicks, Clerk City of Salina, Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CIIT OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2019-A April 1, 2019 For $11,445,000* principal amount of General Obligation Internal Improvement Bonds, Series 2019-A, of the City of Salina, Kansas, to be dated April 24, 2019, as described in the Notice of Sale (the "Notice") dated March 25, 2019, said Bonds to bear interest as follows: Maturity Principal Maturity Principal October 1 Amount* Interest Rate October 1 Amount* Interest Rate 2020 $265,000 % 2030 $580,000 % 2021 435,000 % 2031 595,000 % 2022 450,000 % 2032 620,000 % 2023 465,000 % 2033 640,000 % 2024 475,000 % 2034 660,000 % 2025 495,000 % 2035 680,000 % 2026 510,000 % 2036 700,000 % 2027 525,000 % 2037 725,000 % 2028 540,000 % 2038 750,000 % 2029 565,000 % 2039 770,000 % *Subject to change; see the Notice. the undersigned will pay the total principal amount of the Bonds, plus a premium as set forth below, plus accrued interest to the date of delivery. Principal Amount ........................................................................................................................................................ $11,445,000.00* Plus Premium (if any) ............................................................................................................................... _________ _ Total Purchase Price .............................................................................................................................. $ _________ _ Total interest cost to maturity at the rates specified .............................................................................. $ _________ _ Net interest cost (adjusted for Premium) ............................................................................................... $ _________ _ True Interest Cost ...................................................................................................................................................... _____ % 0 The Bidder elects to purchase Municipal Bond Insurance from: [Assured] [AGM] [BAM] . Circle one or complete blank. 0 The Bidder elects to have the following Term Bonds: Maturity Date Years Amount* October l, __ to $ _____ _ October 1, to $ _____ _ *subject to mandatory redemption requirements in the amounts and at the times shown above. This proposal is subject to all terms and conditions contained in the Notice, and ifthe undersigned is the Successful Bidder, the undersigned will comply with all of the provisions contained in the Notice. The acceptance of this proposal by the Issuer by execution below shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule l 5c2-l 2 of the Securities and Exchange Commission and a bond purchase agreement for purposes of the laws of the State of Kansas. Submitted by: --------------- (LIST ACCOUNT MEMBERS ON REVERSE) By: -------------Telephone No. ACCEPTANCE Pursuant to action duly taken by the Governing Body of the City of Salina, Kansas, the above proposal is hereby accepted on April 1, 2019. Attest: Clerk NOTE: Mayor No additions or alterations in the above proposal form shall be made, and any erasures may cause rejection of any bid. Sealed bids may be filed with the Clerk, Shandi Wicks, 300 West Ash, Salina, Kansas 67402, facsimile bids may be filed with the Clerk, Fax No. (785) 309-5711 or electronic bids may be submitted via PARITY®, at or prior to 1 :00 p.m., Central Time, on April 1, 2019. Any bid received after such time will not be considered. Attachment 2 Bids Received PARITY Bid Form Page 1of1 Upcoming Calendar Overview Result Excel Jefferies LLC -New York, NY's Bid Salina $6,085,000 General Obligation Temporary Notes, Series 2019-1 For the aggregate principal amount of $6,085,000.00, we will pay you $6,088, 164.20, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate: Maturity Date Amount $ Coupon % Yield % Dollar Price 05/01/2020 6,085M 2.0000 1.9480 100.052 Bid: 100.052000 Premium: $3, 164.20 Net Interest Cost: $120,902.19 NIC: 1.948992 Time Last Bid Received On:04/01/2019 11 :22:36 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Jefferies LLC, New York, NY Contact: Jarad Bohan Title: Telephone:212-336-7161 Fax: Issuer Name: City of Salina Accepted By: Date: Company Name: Accepted By: Date: © 1981-2002 i-Deal LLC, /\II rights reserved, Trademarks https://www.newissuehome.i-deal.com/Parity /asp/main.asp?frame=content&page=parity Bi... 411612019 PARITY Bid Form Page 1of1 Upcoming Calendar Overview Result Excel Hutchinson, Shockey, Erley & Co. -Chicago, IL's Bid .=~~~lfllf1T'l?.:·· Salina $6,085,000 General Obligation Temporary Notes, Series 2019-1 For the aggregate principal amount of $6,085,000.00, we will pay you $6,071, 734. 70, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate: Maturity Date Amount$ Coupon% Yield %!Dollar Price! 05/01/2020 6,085M 1.7500 1.15001 100.000 I Bid: 99. 782000 Discount: $13,265.30 Net Interest Cost: $121,823.39 NIC: 1.963842 Time Last Bid Received On:04/01/2019 9:54:53 COST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Hutchinson, Shockey, Erley & Co., Chicago, IL Contact: Jim VanMetre Title: Telephone:312-443-1555 Fax: 312-443-7225 Issuer Name: City of Salina Accepted By: Date: Company Name: Accepted By: Date: © 1981-2002 i-Deal LLC, All rights reserved, Trademarks https://www.newissuehome.i-deal.com/Parity /asp/main.asp ?frame=content&page=parity Bi... 411612019 TO: Shandi Wicks, Clerk City of Salina, Kansas OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 April 1, 2019 For $6,085,000' principal amount of General Obligation Temporary Notes, Series 2019-1, of the City of Salina, Kansas, to be dated April 24, 2019, as described in the Notice of Sale (the "Notice") dated March 25, 2019, said Notes to bear interest as follows: Maturity May I 2020 Principal Amount* $6,085,000 Interest Bfil 2.00 % *Subject to change; see the Notice. the undersigned will pay the total principal amount of the Notes, plus a premium or less a discount as set forth below, plus accrued interest to the date of delivery. Principal Amount ....................................................................................................................................................... $6,085,000.00' Less Discount (not to exceed $30,425 or 0.50%) .................................................................................... ( $13,204.45 ) Plus Premium (if any) ............................................................................................................................. _s_s._14_ss_s ______ _ Total Purchase Price ................................................................................................................................ $_6_,0_77_,_94_1_.4_0 ____ _ Total interest cost to maturity at the rates specified ................................................................................ $ 124,066.380 Net interest cost ...................................................................................................................................... $_1_3_1,_12_4_.s_a _____ _ 0 The Bidder elects to purchase Municipal Bond Insurance from: [Assured] [AGM] [BAM] ~----~· Circle one or complete blank. This proposal is subject to all terms and conditions contained in the Notice, and if the undersigned is the Successful Bidder, the undersigned will comply with all of the provisions contained in the Notice. The acceptance of this proposal by the Issuer shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule 15c2-12 of the Securities and Exchange Commission and a bond purchase agreement for purposes of the laws of the State of Kansas. (LIST ACCOUNT MEMBERS ON REVERSE) Submitted by: COMMERCE BANK ~~:ephone~q&<--- ACCEPTANCE Pursuant to action duly taken by the Governing Body of the City of Salina, Kansas, the above proposal is hereby accepted on April 1, 2019. Attest: Clerk Mayor NOTE: No additions or alterations in the above proposal form shall be made, and any erasures may cause rejection of any bid. Sealed bids may be filed with the Clerk, Shandi Wicks, 300 West Ash, Salina, Kansas 67402, facsimile bids may be filed with the Clerk, Fax No. (785) 309-5711 or electronic bids maybe submitted via PARITY®, at or prior to 12:00 p.m., Central Time, on April I, 2019. Any bid received after such time will not be considered. TO: Sll:md1 Wicks, Clerk City of Salina. Kansas OFFICIAL BID FOR.\I PROPOSAL FOR THE PURCHASE OF CITY OF SALINA, KANSAS GENERAL OBLIG/\ TION TEMPORARY NOTES SERIES 2019-1 April 1,2019 For S6,085,000' principal amount of General Obligation Temporary Notes, Series 20 I 9-1, of the City of Salina, Kan.sos, to be dated April 24, 2019, as described in the Nollcc of Sale (the "Notice") dated March 25, 2019, said Notes lo bear interest as follows: Mnturily MD\' I 2020 rrlnclp~I Amount' S6,085,000 Interest Rate .15-1..~~ *S11hject to cha11ge, .(t'I' tire Notice. the undersigned will pay the lolal principal amount of the Notes, plus a premium or less a discount as set forth below, plus accrued intercsl lo the date of delivery. Principal Amounl ...................................................................................................................................................... $6,085,000 00' Less Discount (not lo exceed SJ0,425 or0.50%) .................................................................................... L . l'i , 4,1,75! Plus Premium (if any) .. ................................................................ .......................... ..................... ........ 0 .DO Tola! Purchase Price ............................................................................................................................... $ t.., 01 Q , '700..25° Totnl inlcresl cost lo ma1uri1y at 1he rates specified ............................................................................... S 1_9. 0 I~ .!15 Net interest cosl ...................................................................................................... -.............................. $ 11 • 3 I ~ . .;l.0 tllC :: 1.s(os 18 0 The Bidder elects to purchase Municipal Bond Insurance from: [Assured] [AGM] [BAM] ~---~· Circle one or complclc blank. This proposal is subject to a\l lerms and conditions contained in the Notice, and if the undersigned is the Successful Bidder, the undersigned will comply wilh all of the prm·isions contained in Uie Notice. The acceptance of 1his proposal by the Issuer shall constitute a contract between the Issuer and the Successful Bidder for purposes of complying with Rule 15c2-12 of the Securities and Exchange Commission and a bond purchase agreement for purposes of the laws of the State of Kansas. (LIST ACCOUNT MEMBERS ON REVERSE) ACCEPTANCE Pursuant lo action duly taken by the Govemins Body of the City of Salina. Kansas. the above proposal is hereby accepted on April I, 2019. A nest: Clerk Mayor NOTE: No additions or altcra1ions in the above proposal fonn shall be made, and any erasures may cnusc rejection of any bid. Scaled bids may be filed with the Clerk, Shandi Wicks, 300 West Ash, Salina. Kansas 67402. facsimile bids may be filed with the Clerk, Fax No. (785) 309-5711 or electronic bids m:iy be submitted via PARITrt', al or prior to 12·00 p.m., CentralTime, on April I, 2019. Any bid received after such time will not be considered. Attachment 3 Bid Comparison BID RESULTS CITY OF SALINA, KANSAS $6,085,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 Bidder Name NIC Countrv Club Bank 1.810518 Jefferies LLC 1.948992 Hutchinson, Shockey, Erley & Co. 1.963842 Commerce Bank 2.1137875 EXHIBITD DESCRIPTION OF PROPERTY COMPRISING THE FINANCED FACILITY AND LIST OF REIMBURSEMENT EXPENDITURES EXHIBIT D TO FEDERAL TAX CERTIFICATE Description of Property Comprising the Financed Facility Series 2019-1 Project Estimated Original Placed in Economic Service Asset Description Life Date Landfill Cell #20 20 April-19 North 9th Street Bridge 20 April-19 Pheasant Ridge Addition No. 3 20 Apri l-19 Police Parking 20 April-19 Smoky Hill River Renewal 20 July-1 7 Less land costs Net costs, excluding lan d Average, Reasonably Expected Economic Life: 19.3 1 120% of Original Eco nomic Life 120% 23.17 * Improvement Fund Deposit excludes Costs of Issuance and Underwriter's Discount. 2019-1 Note Proceeds Allocated to Project Costs Other Money Allocated to Project Costs** Total Pro ject Costs ** Other Money may include prior or future tax-exempt financings. Salina KS 2019-1 G.O. Temp. Notes D-1 Elapsed Estimated Time Remaining from Economic Asset Issue Date Life Type 0.00 20.00 Other 0.00 20.00 Other 0.00 20.00 Other 0.00 20.00 Building -1.81 18.19 Other years years Total Estimated Project Costs 2,315,000 2,000,000 530,165 400,000 27,000,000 32,245, 165 32,245, 165 6,028,733 26,216,433 32,245,165 Costs Paid Economic from Life x Series 2019-1 Financed Notes Proceeds* Cost 2,298,567 45,971 ,349 500,000 10,000,000 530, 165 I 0,603,306 400,000 8,000,000 2,300,000 4 1,837,000 6,028, 733 11 6,4 11 ,655 6,028, 733 April 24, 2019 EXHIBIT D TO FEDERAL TAX CERTIFICATE List of lkimhursl'llll'lll [:\pl't1dit11rl's Date Paid Vendor Description Amount Landfill Cell 20 06/20/201 8 SCS Aquaterra FI-Cell 20 development task 7 736.82 06/20/201 8 SCS Aquaterra Fl-Ce ll 20 Development task 7 992.33 07/18/201 8 SCS Aquaterra FI-PO 18037 Cell 20 development 3,918.80 08/22/201 8 SCS Aquaterra FI-Cell 20 Development 4,680.90 I 0/03/2018 SCS Aquaterra FI-cell 20 development 1,734.68 10/24/201 8 SCS Aquaterra Fl-Cell 20 Development 20,573.70 1 1/28/201 8 SCS Aquaterra Fl-Proj 8001 9 Cell 20 developm 11 ,625.10 12/31/201 8 SCS Aquaterra Fl-Proj #8001 9 Cell 20 Develop 6,45 1.38 2/6/201 9 SCS Aquaterra Proj#8001 9 cell 20 design 2,605.80 2/20/201 9 Salina Journal #40912 283.50 3/13/201 9 SCS Aquaterra Cell 20 devel 1,67 5.08 55,278.09 Smok:t Hill River Renewal 02/22/2018 HDR lnc FI-Proj #70014 SHRR Preliminar 224,148.2 1 03/14/2018 HDR In c FI-Proj #70014 SHRR pre liminar I 00,020.53 04/04/2018 HOR In c FI-Proj #7001 4 SHRR pre liminar 87,109.50 05/09/2018 HDR In c Proj#7001 4 Pre Ii lminary Design 50,838.40 061201201 8 HDR lnc FI-Proj #7001 4 SHRR Prem. Des 77,611.88 07/1 8/2018 HOR Inc Fl-Proj #7001 4 SHRR Pre. Des. 76, 165 .62 07/25/201 8 HDR Inc FI-Proj #7001 4 SHRR prelim des 95,926.44 09/19/2018 HDR Inc Proj #7001 4 SHRR Prelim Design 93,580.26 10/17/2018 HDRinc Proj#70014 Prelilminary Design 91 ,656.04 11 /08/201 8 HDR Inc Fl-Proj #7001 4 SHRR Pre I im Des 90,540.10 12/1 112018 HDR Inc Fl-Proj #7001 4 SHRR Pre I im Des 85,01 9.26 12/1 7/2018 HDR Inc Fl-Proj #7001 4 SHRR pre I im des 80,25 1.25 12/3 1/2018 FAO, USAED, Kansas City , GS Fl-CSCR 539 SHR Aqut Eco Resto 275,000.00 0111612019 HDRlnc 03/06/2019 HDR Inc 03/27/2019 HDR Inc 04/19/2019 HDR Inc Police Parking 03/13/2019 Kaw Valley Engineering Inc 03/13/2019 Jones Gillam & Renz Architects 03/21/2019 Terracon Consultants 03/27/2019 04110/2019 Jones Gillam & Renz Architects FI-Proj #70014 SHRR Prelim Des FI-Proj #70014 SHRR Prelim Des FI-Proj #70014 SHRR Prelim Des FI-Proj #70014 SHRR Prelim Des FI-PD Services at 301N10th FI-PD Concrete Parking Garage FI-Project 90032 PD Parking Lo PD PARKING LOT CUP FI-PD Concrete Parking Garage 65,343.61 56,288.41 34,526.36 53,182.00 1,637,207.87 1,700.00 2,925.00 1,198.50 255.00 14,625.00 20,703.50 Total Reimbursement Expenditures -$ 1,713,189.46 ================= EXHIBITE SAMPLE ANNUAL COMPLIANCE CHECKLIST Name of tax-exempt notes ("Notes") financing General Obligation Temporary Notes, Financed Asset: Series 2019-1 Issue Date of Notes: 04/24/2019 Placed in service date of Financed Facility: Name of Bond Compliance Officer: Period covered by request ("Annual Period"): Item Question Response 1 Was the entire Financed Facility owned by the Issuer during DYes Ownership the entire Annual Period? 0No If answer above was "No," was advice of Bond Counsel 0Yes obtained prior to the transfer? DNo If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. Item Question Response 2 During the Annual Period, was any part of the Financed DYes Leases & Facility leased at any time pursuant to a lease or similar DNo Other Rights agreement for more than 50 days? to Possession If answer above was "Yes," was advice of Bond Counsel DYes obtained prior to entering into the lease or other arrangement? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. Item Question Response 3 During the Annual Period, has the management of all or any DYes Management part of the operations of the Financed Facility (e.g., cafeteria, 0No or Service gift shop, etc.) been assumed by or transferred to another Agreements entity? If answer above was "Yes," was advice of Bond Counsel DYes obtained prior to entering into the Management or Service DNo Agreement? If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. Item Question Response 4 Was any other agreement entered into with an individual or DYes Other Use entity that grants special legal rights to the Financed Facility? 0No If answer above was "Yes," was advice of Bond Counsel 0Yes obtained prior to entering into the agreement? 0No If Yes, include a description of the advice in the Tax-Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax-Exempt Bond File. Item Question Response 5 Have all rebate and yield reduction calculations mandated in DYes Arbitrage the Federal Tax Certificate been prepared for the current year? DNo & Rebate If No, contact Rebate Analyst and incorporate report or include description of resolution in the Tax-Exempt Bond File. Bond Compliance Officer: Date Completed: -2- CERTIFICATE OF MUNICIPAL ADVISOR $11,090,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2019-A DATED APRIL 24, 2019 $6,085,000 CITY OF SALINA, KANSAS GENERAL OBLIGATION TEMPORARY NOTES SERIES 2019-1 DATED APRIL 24, 2019 George K. Baum & Co., Kansas City, Missouri, is employed as municipal advisor to the City of Salina, Kansas (the "Issuer") with respect to the above captioned bonds and notes (the "Obligations"). 1. Duties. The Municipal Advisor rendered certain professional services to the Issuer, including advising the Issuer with respect to the sale of the Obligations, and assisting the Issuer with the preparation of the Preliminary Official Statement dated March 25, 2019, and the Final Official Statement dated April 9, 2019, (both documents referred to collectively herein as the "Official Statement"). 2~ Official Statement. The Municipal Advisor has read the Official Statement, but has not, however, independently verified the factual and financial information contained in the Official Statement, including the appendices attached thereto, nor have we participated in drafting Appendices B, C and D to the Official Statement. 3. Certification. Based on the foregoing, the Municipal Advisor certifies, to the best of our knowledge, information and belief, the information contained in the Official Statement (except for Appendices B, C and D attached to the Official Statement) are, as of its date and as of the date hereof, true and correct in all material respects, and the Official Statement does not contain any untrue statement of a material fact or omit to state a material fact where necessary to make a statement not misleading in light of the circumstances under which it was made. DATED: April 24, 2019. GEORGE K. BAUM & CO. KANSAS CITY, l\flSSOURI ~~e: lt.-oc ~ ,~Jl!!k:r=cs Governing Body City of Salina, Kansas Country Club Bank Prairie Village, Kansas $ GILMOI\._EBELL 2405 Grand Boulevard, Suite 1100 Kansas City, Missouri 64108-2521 (816) 221-1000 I (816) 221-1018 FAX I gilmorebell.com April 24, 2019 Re: $6,085,000 General Obligation Temporary Notes, Series 2019-1 of the City of Salina, Kansas, Dated April 24, 2019 We have acted as Bond Counsel to the City of Salina, Kansas (the "Issuer"), in connection with its issuance of the above-captioned notes (the "Notes"). In this capacity, we have examined the law and the certified proceedings, certifications and other documents that we deem necessary to render this opinion. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the resolution adopted by the governing body of the Issuer authorizing the issuance and prescribing the details of the Notes. Regarding questions of fact material to our opinion, we have relied on the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify them by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The Notes have been duly authorized, executed and delivered by the Issuer and are valid and legally binding general obligations of the Issuer. 2. The Notes are payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of certain improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The balance of the principal and interest on the Notes is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer. The Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Notes to the extent that necessary funds are not provided from other sources. 3. The interest on the Notes (including any original issue discount properly allocable to an owner thereof) is: (a) excludable from gross income for federal income tax purposes; and (b) not an item of tax preference for purposes of the federal alternative minimum tax. The opinions set forth in this paragraph are subject to the condition that the Issuer complies with all requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be satisfied subsequent to the issuance of the Notes in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to comply with certain of these requirements may cause interest on the Notes to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Notes. The Notes have not been designated as "qualified tax- exempt obligations" for purposes of Code§ 265(b)(3). We express no opinion regarding other federal tax consequences arising with respect to the Notes. 4. The interest on the Notes is exempt from income taxation by the State of Kansas. We express no opinion regarding the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Notes (except to the extent, if any, stated in the Official Statement). Further, we express no opinion regarding tax consequences arising with respect to the Notes other than as expressly set forth in this opinion. The rights of the owners of the Notes and the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at law or in equity. This opinion is given as of its date, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in law that may occur after the date of this opinion. Very truly yours, t:c , l STATE OF KANSAS OFFICE OF THE ATTORNEY GENERAL DEREK SCHMIDT AITORNEY GENERAL The Honorable Jake LaTurner State Treasurer April 24, 2019 Landon State Office Building, Room 201 N Topeka, KS 66612 Dear Mr. LaTurner: MEMORIAL HALL 120 SW 1 OTH AVE., 2ND FLOOR TOPEKA, KS 66612-1597 (785) 296-2215 •FAX (785) 296-6296 WWW AG.KS.GOV Pursuant to K.S.A. 10-108, basic or supplemental transcript material is hereby approved and you may register the following: Municipality: City of Salina Kansas Description: General Obligation Temporary Note Series: 2019-1 Dated: April 24, 2019 Aggregate Amount: $6,085,000.00 Date of First Payment: May 1, 2020 Fiscal Agent: Kansas State Treasurer RDS:sb cc: Shandi Wicks, City Clerk Gilmore & Bell-Kansas City Numbered: Registered Sincerely, OFFICE OF THE ATTORNEY GENERAL DEREK SCHMIDT TO: SEE DISTRIBUTION LIST FROM: DAVID ARTEBERRY ROGER EDGAR George K. Baum & Company INVESTMENT 8A1'KER S I NCE 1 9!8 April 18, 2019 MEMORANDUM RE: BOND ISSUE CLOSING ARRANGEMENTS NAME OF ISSUER : City of Salina, Kansas AMOUNT, NAME AND DATE OF ISSUE: TIME AND DATE OF CLOSING : SETILEMENT NUMBERS : METHOD OF FUNDS TRANSFER: $6,085,000 City of Salina, Kansas General Obligation Temporary Notes Series 2019-1 Dated April 24, 2019 10:00 a.m. Wednesday, April 24, 2019 Via telephone Par Amount of Notes Add: Reoffering Premium Less : Underwriter's Discount Less : Good Faith Deposit Net Amount Due at Closing Wire Transfer of Federal Funds $6,085,000.00 (14,299.75) (121, 700.00) $5,949,000.25 4801 Main Street • Suite 500 • Kansas City, Missouri 641 12 • 816.474.1100 TRANSFER INSTRUCTIONS: (Country Club Bank) DISPOSITION OF NOTE PROCEEDS: (City of Salina) DELIVERY OF TRANSCRIPT AND LEGAL OPINION: NOTE DELIVERY INSTRUCTIONS: PAYMENT OF COSTS OF ISSUANCE: On Wednesday, April 24, 2019 Country Club Bank will wire transfer an amount of $5,949,000.25 to Sunflower Bank, ABA #1011-0062-1, AC #10218 7275 for credit to the City of Salina, Attn: Kayleen Chaput. The City shall deposit the $5,949,000.25 received from Country Club Bank along with the $121,700.00 Good Faith Deposit previously received from Country Club Bank ($6,070,700.25 total) into Improvement Fund for General Obligation Temporary Notes, Series 2019-1. For Issuance Costs For Projects $41,967.50 6,028, 732. 75 $6,070, 700.25 Upon receiving confirmation of receipt of funds, Gilmore & Bell will email a signed legal opinion to the City, Country Club Bank and George K. Baum & Company. Original signed legal opinions and transcripts will be mailed when completed. Notes will be delivered to the offices of the Depository Trust Company at least one day prior to closing. All reimbursable costs associated with the issuance of the Notes will be paid after closing by the City upon presentation of the proper invoices. Cassmeyer, Julie (G&B) From: Sent: To: bondreg@treasurer.ks.gov Friday, April 5, 2019 1 :32 PM Cassmeyer, Julie (G&B) Subject: Bondreg: Updated Bond Registration April 5, 2019, 13:32:13 This bond issue has been updated in the KST Bond Registration System. Below is the updated information: Registration #: 0322-085-042419-574 Municipality: Salina Bond Counsel: Gilmore Bell: Julie Cassmeyer Paying Agent: State Purpose & Series: General Obligation Temporary Notes, Series 2019-1 Book Entry: Yes Principal: $6,085,000.00 Closing Date: April 24, 2019 The issue was updated by Shauna Wake. 1