Audit - 1996/1997
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SALINE COUNTY -CITY BUILDING AUTHORITY
Salina, Kansas . .
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FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT
December 31, 1997 and December 31, 1996
HARRISON & ARNETI, CHARTERED
Certified Public Accountants
Salina, Kansas
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SALINE COUNTY-CITY BUILDING AUTHORITY
Salina, Kansas
MEMBERS
(1) Mr. Michael White
(1) Mr. Deane Allen
(1) Mr. Doug Forsberg
(2) Dr. Peter Brungardt
(2) Mr. Monte Shadwick
(3) Mr. Douglas Smith
(4) Mrs. Jean McArthur
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OFFICERS
Mr. Douglas Smith
Mr. Michael White
Ms. Sherri Barragree
Dr. Peter Brungardt
Chairman
Vice-Chairman
Secretary
Treasurer
Representative from:
(1) Board of County Commissioners
(2) Board of Commissioners of the City of Salina, Kansas
(3) District Court Representative
(4) Member at Large
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SALINE COUNTY-CITY BUILDING AUTHORITY
Salina, Kansas
INDEPENDENT AUDITORS' REPORT
CONTENTS
BALANCE SHEETS-GENERAL FUND AND ACCOUNT GROUPS
STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES-GENERAL FUND AND GENERAL FIXED
ASSET ACCOUNT GROUP
STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES
IN UNRESERVED FUND BALANCES-GOVERNMENTAL FUND-
AND COMPARISON WITH BUDGET (STATUTORY BASIS)
NOTES TO FINANCIAL STATEMENTS
SUPPLEMENTAL INFORMA nON
SCHEDULE OF EXPENDITURES- GENERAL FUND
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6-10
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HARRISON & ARNETT
CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
EUGENE O. HARRISON, C.P.A.
THOMAS G. ARNETT, C.P.A.
719 EAST CRAWFORD. SALINA. KANSAS 67401
INDEPENDENT AUDITORS' REPORT
PHON E: (913) 827-7244
FAX: (913) 827.0048
To the Governing Board
Saline County-City Building Authority
Salina, Kansas:
We have audited the accompanying general purpose financial statements of the Salina County-City Building
Authority, Salina, Kansas, as of December 31, 1997, and December 31, 1996, and for the years then ended.
These general purpose financial statements are the responsibility of the Building Authority's management;-
Our responsibility is to express an opinion on these general purpose financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and the Kansas Municipal
Audit Guide. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the general purpose financial statements are tree of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial
statements. An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall general purpose financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the general purpose financial statements referred to above present fairly, in all material
respects, the financial position of the Saline County-City Building Authority as of December 31, 1997, and
December 31, 1996, and the results of its operations and changes in its fund balances for the years then
ended in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an pinion on the general purpose financial statements taken
as a whole. The supplemental information contained in Schedule 1 is presented for purposes of additional
analysis and is not a required part of the general purpose financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the general purpose financial statements and, in
our opinion, is fairly stated in all material respects in relation to the general purpose financial statements
taken as a whole.
Very truly yours,
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Salina, Kansas
February 28, 1998
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Certified Public Accountant in charge
of and actively engaged on this audit.
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MEMBERS OF
DIVISION FOR CPA FIRMS PRIVATE COMPANIES PRACTICE SECTION
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
KANSAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
SALINE COUNTY -CITY BUILDING AUTHORITY
Salina, Kansas
BALANCE SHEETS -
GENERAL FUND AND ACCOUNT GROUPS
December 31 ,
ASSETS
Cash in bank
Land
Building and improvements
Equipment
Amount to be provided
1997
General Long
Fixed Term
General Asset Debt
Fund Group Group
$ 255,070 $ - $
220,228
2,626,303
111 ,032
$ 250,371
General
Fund
240,467
Total Assets
$ 255,070
$ 2,957,563
$ 240,467
$ 250,371
LIABILITIES AND FUND BALANCE
Liabilities
Accounts payable
Accrued leave
Lease obligation
$
19,497
$
$
$
23,659
22,963
21 7,504
Total Liabilities
19,497
240,467
23,659
Fund Balance
Unreserved
Reserved for encumbrances
Investment in general fixed assets
233,573
2,000
- 2,957,563
235,573 2,957,563
$ 255,070 $ 2,957,563 $ 240,467
202,838
23,874
Total Fund Balance
226,712
Total Liabilities and Fund Balance
$ 250,371
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The accompanying notes are an integral part of the financial statements.
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1996
General Long
Fixed Term
Asset Debt
Group Group
$ - $
200,228
2,526,147
123,037
274,014
$ 2,849,412 $ 274,014
$
$
24,554
249,460
274,014
2,849,412
2,849,412
$ 2,849,412
$ 214,014
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SALINA COUNTY-CITY BUILDING AUTHORITY
Salina, Kansas
STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES-GENERAL FIXED ASSET ACCOUNT GROUP
1997
1996
General
Fund
General
Fixed Asset
Group
General
Fund
General
Fixed Asset
Group
Revenues
Regular appropriations
Maintenance charges
Snack bar commissions
Interest
Miscellaneous
Total Revenues
$ 574,616 $ - $ 576,139 $
7,864 - 6,900
2,656 - 2,958
10,856 - 7,309
4,244 - 10,225
600,236 - 603,531
Expenditures
General operations
591,375
538,840
Excess of Revenues over Expenditures
8,861
64,691
Fixed Asset Changes
Additions
Dispositions
117,814
(9,663)
71,649
Fund Balance, Beginning of Period
226,712
2,849,412
162,021
2,777,763
Fund Balance, End of Period
$ 235,573
$ 2,957,563
$ 226,712
$ 2,849,412
The accompanying notes are an integral part of these' financial statements.
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SALINE COUNTY-CITY BUILDING AUTIiORITY
Salina, Kansas
STATEMENTS OF REVENUES, EXPENDI11JRES, AND CHANGES IN
UNRESERVED FUND BALANCES-GOVERNMENTAL FUND-
AND COMPARISON WITH BUDGET (STATUTORY BASIS)
1997 1996
General Fund General Fund
Variance Variance
Favorable Favorable
Actual Budget (Unfavorable) Actual Budget (Unfavorable)
Revenues
Appropriations from Municipalities
Regular Appropriations
Saline County
City of Salina
$ 356,230
218,386
Total Regular Appropriations
574,616
Maintenance Charges
, Salina Public Library
Saline County-City Health
City of Salina
6,000
964
900
Total Maintenance Charges
7,864
Total Appropriations from Municipalities
582,480
Snack Bar Commissions
Interest
Miscellaneous
2,656
10,856
4,244
Total Revenues
600,236
$ 356,313
218,386
$
(83)
$ 391,039
184,019
574,699
(83)
575,058
6,000
1,000
900
(36)
6,000
1,080
900
7,900
(36)
7,980
582,599
(119)
583,038
3,000
3,500
(344)
7,356,
4,244 .
2,958
7,309
10,225
589,099
11,137
603,530
(continued)
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$ 391,039
184,019
$
575,058
6,000
900
900
180
7,800
180
582,858
180
3,000
3,500
(42)
3,809
10,225
589,358
14,172
Expenditures
Salaries and wages
Payroll taxes
Employees' group insurance and retirement
Utilities
Insurance
Repairs and maintenance
Janitor supplies
Equipment
Special Projects
Beautification
Payments to Saline County for clerical services provided
Audit
Education
Maintenance agreement
Debt service
Contingency, repair & replacement & leave
Miscellaneous
SALINE COUNTY -CITY BUILDING AUTHORITY
Salina, Kansas
1997
General Fund
Variance
Favorable
Actual Budget (Unfavorable)
203,077 205,500 2,423
15,535 15,725 190
28,495 39,620 11,125
89,553 100,000 10,447
12,966 16,000 3,034
28,647 31,000 2,353
9,538 15,000 5,462
3,064 3,000 (64)
95,815 100,000 4,185
3,188 5,000 1,812
1,500 1,500
2,000 2,000
1,554 2,000 446
27,302 27,500 198
45,819 45,816 (3)
- 50,000 50,000
1,448 2,000 552
569,501 661,661 92,160
30,735 $ (72,562) $ 103,297
202,838
$ 233,573
Total Expenditures
Excess (Deficit) of Revenues over Expenditures
Unreserved Fund Balance, Beginning of Period
Unreserved Fund Balance, End of Period
The accompanying notes are an integral part of these financial statements.
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1996
General Fund
Variance
Favorable
Actual Budget (Unfavorable)
197,933 199,820 1,887
15,064 15,286 222
31,893 37,166 5,273
94,130 90,000 (4,130)
12,672 16,000 3,328
31,778 31,000 (778)
9,712 14,000 4,288
1,552 2,500 948
32,215 75,000 42,785
- -
1,500 1,500
1,875 1,875
1,221 1,500 279
26,378 26,052 (326)
45,819 45,816 (3)
- 20,000 20,000
4,309 6,700 2,391
508,051 584,215 76,164
95,479 $ 5,143 $ 90,336
107,359
$ 202,838
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SALINE COUNTY-CITY BUILDING AUTHORITY
Salina, Kansas
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
1. Summary of Significant Accounting Policies
The Saline County-City Building authority was formed on March 22, 1965, and restated January 16,
1996, under the interlocal Cooperation Act of Kansas (K.S.A. 12-2901 to 12-2907). The Building
Authority is a joint venture organized by the three participating municipalities for the purpose of
acquiring facilities to house and accommodate the county, city, the county and city courts, and such other
offices as may be expedient, and to equip, operate, and maintain the facility so acquired.
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The Governing Board of the Building Authority is composed of seven members, six of whom are
appointed from the governing boards of the participating municipalities in the ratios listed below, and
one of whom is selected at large by the six members.
Name of A2ency
Number of
Members on
Authority Board
Saline County
City of Salina
District Court
Member at large
3
2
1
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Total
7
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The following is a summary of the significant accounting policies:
a. The Saline County-City Building Authority maintains its accounting records in accordance with the
principles of fund accounting in order to insure observance of limitations and restrictions placed on
the use of resources available. This is the procedure by which resources are classified for accounting
and reporting into funds established according to their nature and purposes.
b. For general financial statement purposes, the accrual method of accounting is followed. For statutory
purposes, the accrual method is modified for the recording of encumbrances as expenditures at year
end.
c. General fixed assets are recorded for statutory basis statements as expenditures in the General Fund
at the time of purchase. Fixed assets costing $500 or more are capitalized and accounted for in the
general fixed asset group of accounts. Depreciation is not recognized, which is in accordance with
generally accepted accounting principles applicable to municipalities.
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2. Appropriations from Municipalities
The Saline County-City Building Authority does not have tax levying powers and is not required to
publish a budget. A budget is adopted annually by the Governing Board for the purpose of determining
appropriations required ftom participating municipalities to cover net operating and maintenance costs of
the building. These appropriations are borne by the participating municipalities.
In 1996, the municipalities agreed to restate the Interlocal Cooperation Agreement to relieve Salina
Unified School District #305 of any ongoing responsibility or expense related to operations of the
Building Authority, while allowing the District to retain its beneficial ownership interest for the limited
purpose of sharing net sale proceeds if the building is ever sold.
3. Compliance with Kansas Statutes
In management's opinion, there were no statutory violations.
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4. Deposits and Investments
Deposits. At December 31, 1997 and 1996, respectively, the carrying amount of the Building
Authority's deposits were $255,070 and $250,371, and the bank balances were $263,148 and $263,148:
Of the bank balances, $100,000 and $100,000 were covered by FDIC insurance at December 31,1997
and 1996, respectively, and the remaining balances were collateralized by pledged securities held under
joint custody receipts issued by a third-party bank in the Building Authority's name. The third-party
bank holding the pledged securities is independent of the pledging bank. ..
Building Authority money on deposit is categorized into one of three risk categories to give an indication
of the level of risk assumed by the Building Authority at year end. Category 1 includes deposits insured
or collateralized with securities held by the Building Authority or by its agent in the Building Authority's
name. Category 2 includes deposits collateralized with securities held by the pledging financial
institution's trust department or agent in the Building Authority's name. Category 3 includes deposits
that are uncollateralized, including any deposits that are collateralized with securities held by the
pledging financial institution, or by its trust department or agent, but not in the Building Authority's
name. All deposits of the Building Authority in excess of FDIC coverage are Risk Category 2.
Investments. Kansas statutes authorize the Building Authority to invest in U.S. Treasury bills and notes,
repurchase agreements, and the State Treasurer's investment pool. The Building Authority had no such
investments during the year ended December 31, 1997 or December 31, 1996.
5. Defined Benefit Pension Plan
Plan description. The non-school municipality participates in the Kansas Public Employees Retirement
System (KPERS), a cost-sharing multiple-employer defined benefit pension plan as provided by K.S.A.
74-4901, et seq. KPERS provides retirement benefits, life insurance, disability income benefits, and
death benefits. Kansas law establishes and amends benefit provisions. KPERS issues a publicly
available financial statements and required supplementary information. That report may be obtained by
writing to: KPERS (400 SW 8th Avenue, Suite 200; Topeka, KS 66603-3925) or by calling
1-800-228-0366.
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Funding Policy. K.S.A 74-4919 establishes the KPERS member-employee contribution rate at 4% of
covered salary. The employer collects and remits member-employee contributions according to the
provisions of section 414(h) of the Internal Revenue Code. State law provides that the employer
contribution rate be determined annually based on the results of an annual actuarial valuation. KPERS is
funded on an actuarial reserve basis. State law sets a limitation on annual increases in the contribution
rates for KPERS èmployers. The employer rate established by statute for calendar year 1997 is 2.63.
The non-school municipality employer contributions to KPERS for the years ending December 31, 1997
and 1996 were $4,349 and $4,854, respectively, equal to the statutory required contributions for each
year. "
6. Compensated Absences
The Building Authority compensates employees for the following types of absences at their current rate <;'
of pay.
a. Vacation: Full-time employees earn ITom 12 to 21 days of vacation pay per year based on the number
of years of continuous service. Vacation pay may accumulate from a minimum of 18 days to a
maximum of 24 days depending upon the employee's number of years of continuous service. Upon
termination, an employee is entitled to a lump sum payment for all accumulated vacation earned.
b. Sick Leave: Full-time employees earn one day of sick leave for each month of full-time service to be
used for illness or death in the family. Accumulation is unlimited.
Upon termination due to retirement, an employee is entitled to a lump sum payment for one-half of
all accumulated sick leave no to exceed 90 days. Upon termination for any other reason except
dismissal for cause, an employee with at least five continuous years of service is entitled to a lump
sum payment for one-half of all accumulated sick leave, not to exceed 30 days.
. c. Personal Leave: One day of personal leave is granted to each full-time employee annually. There is
no accumulation of personal leave beyond the year it is allowed.
7. Long Term Debt
a. Lease Obligation
The following summarizes the lease obligation included in the long-term account group.
Debt Issue
Date
~
Interest
Rm
Maturity
~
Original
Amount
Equipment Lease Purchase Agreement
9/1/95
9/1/03
$291,629
5.9%
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The lease purchase agreement was entered into for the purpose of financing a contract for services in
connection with upgrading the heating and cooling system in the building,
Annual debt service requirements to maturity for the equipment lease purchase agreement follow:
Ym Principle Due Interest Due Total Due
1998 $ 33,562 $ 12,257 $ 45,819
1999 35,597 10,222 45,819
2000 37,755 8,064 45,819
2001 40,043 5,776 45,819
2002 42,471 3,348 45,819
Thereafter 28,076 1,142 29,218
Totals $ 217,504 $ 40,809 $ 258,313
b. Summary
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The following summarizes the changes in the long-tenn debt group of accounts
for the year ended December 31, 1997.
Balance, beginning of year
Accrued Lease
Leave Obligation Total
$ 24,554 $ 249,460 $274,014
(1,591) (1,591)
Change in accrued leave
Lease Purchase Obligation
New issue
Principle payments
(31,956)
(31,956)
Balance, end of year
$
22,963
S 217,504
$ 240,467
Interest paid during 1997 was $13,863.
General Fixed Asset Group
The following summarizes the changes in the general fixed asset group of
accounts for the year ended December 31, 1997,
Balance Reclassifications Balance
December 31, 1996 Additions & Dispositions December 31, 1997
Land $ 200,228 $ $ 20,000 $ 220,228
Building & Improvements 2,486,147 74,798 3,703 2,564,648
Equipment 123,037 21,361 (33,366) III ,032
Parking Lot 40,000 21,655 61,655
Total $ 2,849,412 $ 117,814 $ (9,663) $ 2,957,563
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Additions during 1997 consisted of the following:
Equipment
Two engines
Transformers
Payroll and accounting system
Flush valves
Parking lot seal
Power factor capacitors
Thermal and safety glass
Snack bar remodeling
Door closures and panic bars
Storage building
Parking
Total
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$ 18,646
2,125
2,715
10,275
10,000
4,474
23,845
8,800
3,000
22,279
11,655
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$ 117,814
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SALINE COUNTY-CITY BUILDING AUTHORITY
Salina, Kansas
SCHEDULE OF EXPENDITURES-GENERAL FUND
1997
Salaries and wages
Payroll taxes
Employees' group insurance and retirement
Utilities
Insurance
Repairs and maintenance
Janitor supplies
Equipment
Special projects
Beautification
Payments to Saline county for clerical services provided
Audit
Education
Maintenance agreement
Debt service
Miscellaneous
Totals
$ 203,077
15,535
28,495
89,553
12,966
28,647
9,538
3,064
117,814
3,188
1,500
1,875
1,553
27,302
45,819
1,449
$ 591,375
Schedule 1
1996
$ 197,934
15,064
31,893
94,130
12,672
23,132
9,712
1,552
71,649
1,500
1,875
1,221
26,378
45,819
4,309
$ 538,840
Schedule 2
ADJUSTMENTS TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Excess of Revenues over Expenditures (Statutory Basis)
Current Year Encumbrances Included in Expenditures
Prior Year Encumbrances Included in Expenditures
Excess of Revenues over Expenditures (GAAP Basis)
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$ 30,7~5
2,000
(23,874)
$
8,861
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