Board of County Commissioners Tuesday, May 02, :00 AM 205 W. Central Ave. 4th Floor El Dorado, KS Agenda

Transcription

1 Board of County Commissioners Tuesday, May 02, :00 AM 205 W. Central Ave. 4th Floor El Dorado, KS Agenda A. CALL to ORDER B. INVOCATION and PLEDGE C. COMMISSION MINUTES C.1. Commission Minutes April 25, 2017 pre-approved minutes.pdf D. PUBLIC COMMENTS E. ITEMS of BUSINESS E.1. Review 2016 Audit 2016 Special Purpose Financial Statements.pdf E.2. Public Works Department Sign Material Purchase Approval E.3. Cold In Place Recycle Surfacing Project Proposal E.4. E.5. E.6. Consider an offer for the sale of the 2010 GMC Yukon from the Emergency Management Department Yukon Offer Superior April 17.pdf EMS Field Internship Agreement Butler EMS 2017.docx Sale of Real Property F F - Butlr CityELD.pdf Surplus Property Policy.pdf 1

2 Board of County Commissioners Page - 2 E.7. Work Session - Strategic Goals F. VOUCHERS F.1. Vouchers AP Packet.pdf G. COMMISSION ADDS & ABATES H. OTHER ITEMS of BUSINESS I. ADJOURNMENT 2

3 Board of County Commissioners Agenda Item Report Agenda Item No. 1 Submitted by: Tammy Bridges Submitting Department: Administration Meeting Date: May 2, 2017 SUBJECT Commission Minutes RECOMMENDATION Approval of Minutes ATTACHMENTS April 25, 2017 pre-approved minutes.pdf BACKGROUND NA ANALYSIS NA FINANCIAL CONSIDERATION NA LEGAL CONSIDERATION NA COMMISSIONER SIGNATURE REQUIRED No INFORMATION TECHNOLOGY PURCHASE OR SERVICES REVIEW REQUIRED No RECOMMENDED ACTION Commissioner motioned to approveamend the minutes from the April 25, 2017 Commission meeting. 3

4 BUTLER COUNTY BOARD OF COMMISSIONERS Tuesday, April 25, 2017 CALL TO ORDER Commission Chairman Jeff Masterson called the Butler County Board of Commissioners to order at 9:00 a.m. Present were Commissioner Marc Murphy, Commissioner Ed Myers, Commissioner Mike Wheeler, Commissioner Dan Woydziak, County Administrator Will Johnson, and Clerk Recorder Chelsea McClure. INVOCATION Pastor Norman Tillotson, Palmyra Baptist Church, Benton, presented the invocation. APPROVAL OF MINUTES Commissioner Murphy motioned to approve the minutes of the Butler County Commission meeting for Tuesday, April 18, 2017 as written. Commissioner Myers seconded the motion. Motion carried 4-0. Commissioner Woydziak abstained due to his absence last week. (00:01:48) PUBLIC COMMENTS David Alfaro, Community Development Director, came before the Board and updated the Commission on Lynbrooke Sporting Clays shoot that was held over the past weekend. At the April 18 th Commission meeting, the Board felt it was acceptable to have Community Development monitor Lynbrooke Sporting Clays shoot; in order to bring them into compliance with their current Conditional Use Permit (CUP). After Community Development monitored two shoots, their report stated there was no shot fall on the west side property line. Mr. Alfaro felt Lynbrooke Sporting Clays was now under compliance with their current CUP and felt comfortable to let Lynbrooke move forward with the proposed expansion. Mr. Alfaro stated staff would notify everyone within 1,000 feet of the property of the meeting and start the process over. The Board of County Commissioners felt the existing CUP was now in compliance and came to the consensus to move forward with considering the proposed CUP. (00:07:58) ITEM#1 HOMESTEAD LOT SPLIT WITH APO FOR ANTHONY HARTNESS AT SW DIAMOND RD, AUGUSTA, KANSAS David Alfaro, Community Development Director, came before the Board for approval of a request from Anthony Hartness for a Homestead Lot Split with APO on property located at SW Diamond Road, Augusta. Mr. Hartness requested to split out the Homestead into a 9.3 acre tract of land and place an APO over 30.7 acres. Staff mailed notices to all landowners within 1,000 feet and received no comments. The Board received an aerial view depicting the request. Commissioner Woydziak motioned to approve the homestead lot split with APO for Anthony Hartness at SW Diamond Rd Augusta, Kansas, and directed the Chair to sign the APO. Commissioner Murphy seconded the motion. Motion carried 5-0. Page 1 of 6 4

5 (00:11:38) ITEM#2 REQUEST FOR MORTGAGE LOT SPLIT WITH APO ON 80 ACRES BY JERED WUNDERLICH AND THOMAS BLAIR ON PROPERTY LOCATED AT SE COLE CREEK, ATLANTA, KS David Alfaro, Community Development Director, came before the Board for approval of a request for mortgage lot split with APO on 80 acres by Jered Wunderlich and Thomas Blair on property located at SE Cole Creek Road, Atlanta, Kansas. Mr. Blair owns 158 acres and proposed to split 10 acres of the land and place an APO on 70 acres of the remaining property. If the request is approved, Mr. Wunderlich would construct a new home on the 10 acres. Staff felt the request met all of the required criteria and the request was approved by the Planning Commission by a 5-0 vote. Letters were sent out to all landowners within a 1,000 feet radius and received no comments. Commissioner Woydziak motioned to approve the request for a mortgage lot split with APO on 80 acres by Jered Wunderlich and Thomas Blair on property located at SE Cole Creek, Atlanta, KS and directed the Chair to sign. Commissioner Wheeler seconded the motion. Motion carried 5-0. (00:16:09) ITEM #3 REQUEST FOR HOMESTEAD LOT SPLIT WITH APO FROM CHARLES CAVE ON PROPERTY LOCATED AT 1730 SE PRICE RD., EL DORADO, KS David Alfaro, Community Development Director, came before the Board for a request for a 5 Acre Homestead lot split with a 35 acre APO from Charles Cave on property located at 1730 SE Price Road, El Dorado, KS. Mr. Cave requested to put an APO on 35 acres of a tract of land that contains 65 acres. Staff stated the property met the necessary criteria and recommended approval. All property owners located within a 1,000 feet radius were notified and staff didn t receive any comments. Commissioner Woydziak motioned to approve a request for homestead lot split with APO from Charles Cave on property located at 1730 SE Price Rd, El Dorado, KS. Commissioner Murphy seconded the motion. Motion carried 5-0. (00:19:17) ITEM #4 CONDITIONAL USE PERMIT REQUEST BY SHANNON HETTENBACH FOR AN EVENT PAVILION AT 1001 SW 140 TH, LEON, KS David Alfaro, Community Development Director, came before the Board to request approval of a Conditional Use Permit (CUP) requested by Shannon Hettenbach for an Event Pavilion at 1001 SW 140 th, Leon, Kansas. Ms. Hettenbach owns 93 acres of land and proposed to build an event center that would accommodate up to 150 seated guests with an outdoor patio that would allow an additional 50 patrons. The property is currently zoned AG-80 and is located on a Township maintained road in Bloomington Township. The CUP would allow for the construction of a Barn Type Structure for the hosting of weddings, graduations, family reunions, club meetings as well as community events. The Planning Commission heard the case on April 4 th ; several neighbors attended and had many concerns such as, vehicle traffic, rodeos, and the noise of each event. The applicant assured the Planning Commission and the neighbors that the events wouldn t have a negative impact on the township and they would shut down any music at 11 p.m. on the weekends, and 8 p.m. on weeknights. Mr. Alfaro stated the Bloomington Township Treasurer felt there wasn t a true need for a Road Maintenance Agreement. The Planning Commission Page 2 of 6 5

6 approved the request by a 5-0 vote. Commissioner Myers expressed concerns regarding the proposed CUP such as the size of the event center, utilities at the location, the times of events, parking, traffic on the township roads, and the rodeo events. Commissioner Myers felt they needed more information included in the CUP regarding parking at the event and regarding rodeo event specifications. Mr. Alfaro stated the Planning Commission didn t feel the need to include all of the specifications into the CUP. Francis Sowers, Bloomington Township Trustee, addressed the Board with concerns of traffic on township roads. Mr. Sowers felt the event pavilion would cause problems on township roads and would be expensive for the township to maintain, especially during bad weather. Mr. Sowers wanted to avoid littering and dumping trash on the roads. Mr. Alfaro noted the Planning Commission members didn t anticipate damage to the road due to additional traffic. Ms. Hettenbach addressed the Board to address questions and concerns of the Board. Commissioner Woydziak inquired about the time frame of the event pavilion. Ms. Hettenbach stated she hoped to be in use by January Commissioner Myers asked Ms. Hettenbach if she had reservations to add conditions specifically restricting rodeos to the CUP. Ms. Hettenbach stated she didn t feel the need to add a restriction to the CUP as it currently stands. Commission Chairman Masterson stated he is fine with the CUP in its current form. Commissioner Murphy motioned to approve the request from Shannon Hettenbach for a CUP to construct an event pavilion at 1001 SW 140 th, Leon, KS allowing them to hold events with the placement of the following conditions and direct the Chairman to sign Resolution All amplified outdoor music will cease no later than 11 p.m. on weekends and 8 p.m. during weekday events. 2. OwnerStaff member must be present at all times during an event. 3. Events will be limited to Weddings, Graduations, Reunions, Corporate, Club and Community Events. Commissioner Woydziak seconded the motion. Motion carried 4-1. Commissioner Myers opposed. (00:51:03) ITEM #5 COMMUNITY CORRECTIONS APPROVAL OF FY2018 KANSAS DEPARTMENT OF CORRECTIONS BEHAVIORAL HEALTH SERVICES PLAN & BUDGET Chuck McGuire, Community Corrections Director, came before the Board for approval of the FY2018 Kansas Department of Corrections Behavioral Health Programs, interventions Funding Budget Summary and Narrative for the 13 th District Community Corrections Agency. Funds are obtained by local agencies via a grant funding request. The funds are used by community corrections agencies statewide to obtain needed services provided by local mental health centers for indigent offenders assigned to community corrections for supervision and to assist in preventing revocation from community corrections supervision and placement into a KDOC custody facility. The funding amount request for FY2018 is 11,410. The funds would be used to purchase services at the South Central Mental Health Counseling Center for assigned indigent offenders in FY2018 who would need mental health services & medications. There is no local match for these funds, or any other local tie-in requirement. Mr. McGuire stated the offenders who received behavioral health treatment in the last 4 years had an 88% success rate and felt the plan saves the state money in the long run, due to the cost of incarcerating an inmate. Page 3 of 6 6

7 Commissioner Wheeler motioned to approve the Commission Chairman Masterson to sign the FY th District Community Corrections Behavioral Health Services Plan & Funding Request and that it be forwarded to the Kansas Department of Corrections. Commissioner Woydziak seconded the motion. Motion carried 5-0. (00:57:37) ITEM #6 COMMUNITY CORRECTIONS FY2018 KDOC ADULT COMPREHENSIVE PLAN & BUDGET Chuck McGuire, Community Corrections Director, came before the Board to have the Commission review and consider for approval the 13 th District Community Corrections KDOC FY2018 Comprehensive Plan & Budget for supervision of assigned adult offenders. The agency comprehensive plan is submitted annually to KDOC. The plan is necessary in order to secure funding from KDOC for the supervision of adult felony offenders assigned to this agency by the 13 th District County. The plan is also approved for submission to KDOC by the 13 th District Joint Corrections Advisory Board. It is submitted to the KDOC by May 1 st of each year. Based on the goals, objectives, number of offenders supervised and dischargerevocation rates, KDOC will make the determination to approve to distribute the funds allotted to this agency for FY2018, which is July 1, 2017 June 30, These funds are tracked and expenditures and balances would be logged in the FY2018 KDOC fiscal workbook. Financial reports are submitted quarterly. These particular funds are used specifically for adult supervision operations. KDOC has approved an FY2018 allotment amount of 406, to this agency, pending approval of the FY2018 Comprehensive Plan. Mr. McGuire stated Butler County has a total of 190 offenders. Commissioner Woydziak motioned to approve FY2018 KDOC Adult Comprehensive Plan & Budget and allow the Chair to sign. Commission Chairman Masterson seconded the motion. Motion carried 5-0. (01:08:28) RECESS Commission Chairman Masterson motioned to recess the Board for 7 minutes at 10:08 a.m. Commission Chairman Masterson reconvened the meeting at 10:15 a.m. (01:08:35) ITEM # BRIDGE DECK REPAIR PROJECTS AWARD OF CONTRACT Darryl Lutz, Director of Public Works, came before the Board for the award of the bid for two planned 2017 bridge deck repair projects in Butler County. The bridges ready for repairs are the Constant Creek Bridge on the Southwest Trafficway near the north entrance to the refinery and the Cole Creek Bridge on NE 110th St. The bridge repair work will be bid under 2 separate contracts, however, the bidders would have the option of tying the projects together. Bids were received and opened by the Butler County Commissioners on April 18 th. After tabulating the bids, staff determined the lowest bidder was Reece Construction Company, Scandia, Kansas, who also tied their bids together. Bid information is available upon request. Commissioner Myers motioned to approve the award of contracts to Reece Construction Company, Inc., Scandia, KS for 2017 bridge deck repair work for Project # BR 10C6-26-5(17), Constant Creek Bridge on Southwest Trafficway, in the low bid amount of 129, and Page 4 of 6 7

8 for Project # BR9N9-24-6(17), Cole Creek Bridge on NE 110 th St., in the low bid amount of 147, and to authorize the Chairman to sign the Notice of Award for each project respectively. Commissioner Wheeler seconded the motion. Motion carried 5-0. Mr. Lutz stated the Stone Arch Bridge had been opened and he would be checking on the bridge as soon as possible. Mr. Lutz noted a cease and assist letter was sent to property owner Jeffrey Artz, regarding fence being built along County roads at the intersection of NW 80 th street, and NW Adams Road. Mr. Lutz gave the Board a copy of the response letter from Mr. Artz. Mr. Artz son, Jason Artz, lives in the vicinity of the fence location issues and Commissioner Myers met with him and discussed vacating a portion of the roads. Mr. Lutz stated if they would like to close the road they would need a petition signed by the neighbors. Mr. Lutz stated Plum Grove Township Board wanted the fence to be removed and the next course of action is in Plum Grove Township s hands. (01:40:19) ITEM #8 PROPOSED CIP Will Johnson, County Administrator, came before the Board to present the Commission with the proposed CIP, which totals 48,816,105 or 833,392 more than the prior year. Commissioner Myers asked about projects that come in over and under what is allocated in the CIP and requested to receive updates on those projects. Based on discussion by the Board of County Commissioners, they would be removing the driving simulator for EMS, EMA storage building, and digital signage from the CIP for the current year. Commissioner Woydziak motioned to approve the CIP with the modifications as directed by the Commission. Commissioner Murphy seconded the motion. Motion carried 5-0. (01:54:42) ITEM #9 WORK SESSION STRATEGIC GOALS Will Johnson, County Administrator, came before the Board for discussion on strategic goals. At the April 11 th Commission meeting, Administrator Johnson asked the Commission to review the Preferred Future for The Butler County Community handout and requested feedback from the Board. Administrator Johnson discussed changes made by staff to the Preferred Butler County Community and asked for feedback from the Board. Administrator Johnson noted the document could change as needed. No action was taken. (01:59:12) VOUCHERS Commissioner Woydziak motioned to approve vouchers for April 25, 2017, in the amount of 192, Commissioner Wheeler seconded the motion. Motion carried 5-0. (01:59:35) COMMISSION ADDS & ABATES Commissioner Woydziak motioned to approve Adds & Abates #2646 dated April 25, 2017; Adds in the amount of 0.00 and Abates in the amount of 9, Commissioner Murphy seconded the motion. Motion carried 5-0. (01:59:56) Page 5 of 6 8

9 OTHER ITEMS OF BUSINESS TO COME BEFORE THE BOARD OF COUNTY COMMISSIONERS Administrator Johnson noted the Commission was asked to go to a meeting with Senator Givens and Representative Good at the Butler County Community College. Commissioner Woydziak noted he would be attending the KCCA Conference in Junction City, May 30 th - June 2 nd. Commissioner Wheeler attended his first REAP meeting last Thursday in Wellington, KS and stated it was very informative. (02:04:02) ADJOURNMENT Commissioner Woydziak motioned to adjourn the meeting of the Board at 11:11 a.m. Commissioner Wheeler seconded the motion. Motion carried 5-0. The Commissioners attended a luncheon at the El Dorado Senior Center following the meeting. Page 6 of 6 9

10 Board of County Commissioners Agenda Item Report Agenda Item No. 1 Submitted by: Ryan Adkison Submitting Department: Administration Meeting Date: May 2, 2017 SUBJECT Review 2016 Audit RECOMMENDATION Receive Mike Lowry of Allen, Gibbs & Houlik, L.C. (AGH) for the audit review. ATTACHMENTS 2016 Special Purpose Financial Statements.pdf BACKGROUND Kansas State Law requires an annual audit of all County accounts to be performed by an independent certified public accounting firm at least annually. The audit review received by AGH is for the year ended December 31, ANALYSIS The County's financial statements are designed to provide information needed by interested parties to gain an understanding of the government's financial positions and cash flows. FINANCIAL CONSIDERATION The cost of the audit is budgeted for in the Administration operating budget. LEGAL CONSIDERATION Kansas law requires an annual audit of County financial records by a certified public accounting firm (K.S.A ) in accordance with the minimum standard audit program (K.S.A ). COMMISSIONER SIGNATURE REQUIRED No INFORMATION TECHNOLOGY PURCHASE OR SERVICES REVIEW REQUIRED No RECOMMENDED ACTION I Commissioner move to receive and file the 2016 Audit. 10

11 BUTLER COUNTY, KANSAS REGULATORY BASIS FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND INDEPENDENT AUDITOR S REPORT 11

12 BUTLER COUNTY, KANSAS REGULATORY BASIS FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 AND INDEPENDENT AUDITOR S REPORT 12

13 BUTLER COUNTY, KANSAS REGULATORY BASIS FINANCIAL STATEMENTS Year Ended December 31, 2016 TABLE OF CONTENTS Independent Auditor s Report FINANCIAL SECTION Summary Statement of Receipts, Expenditures, and Unencumbered Cash NOTES TO THE FINANCIAL STATEMENT Notes to the Financial Statements SUPPLEMENTARY INFORMATION Schedule 1 Summary of Expenditures Actual and Budget Schedule 2 Schedule of Receipts and Expenditures Actual and Budget 2-1 General Fund Special Purpose Funds 2-2 Sales Tax Emergency Medical Services Road and Bridge Bridge Building Sheriff Jail Operating Department of Aging Administration Equipment Reserve E 911 Wireless Tax Special Alcohol Special Parks and Recreation Special Liability Street Lighting Wind Farms Health Department Administration Economic Development Sewer District Maintenance Non-budgeted Special Purpose Funds

14 BUTLER COUNTY, KANSAS REGULATORY BASIS FINANCIAL STATEMENTS Year Ended December 31, 2016 TABLE OF CONTENTS (Continued) Capital Project Funds 2-20 Capital Project Funds Bond and Interest Funds 2-21 Bond and Interest Fund Business Funds 2-22 Self Insurance Internal Service Landfill and Landfill Capital Improvements Agency Funds Schedule 3 Summary of Receipts and Disbursements Agency Funds Related Municipal Entities Schedule 4 Schedule of Receipts and Expenditures Butler County Extension Council and Butler County Public Building Commission This is a copy of the County s annual financial statements reproduced from an electronic file. An original copy of this document is available at the County s office. 14

15 INDEPENDENT AUDITOR S REPORT Board of County Commissioners Butler County, Kansas Report on Financial Statement We have audited the accompanying fund summary statement of regulatory basis receipts, expenditures, and unencumbered cash balances of the Butler County, Kansas and the related municipal entities of the Butler County Extension Council and Butler County Public Building Commission (collectively, the Butler County, Kansas Financial Reporting Entity), as of and for the year ended December 31, 2016 and the related notes to the financial statement. Management s Responsibility for the Financial Statement Management is responsible for the preparation and fair presentation of this financial statement in accordance with the Kansas Municipal Audit and Accounting Guide as described in Note IB; this includes determining that the regulatory basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management is also responsible for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that is 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, the standards applicable to financial audits in Government Auditing Standards issued by the Comptroller General of the United States, 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. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statement, 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 statement 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 statement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles As described in Note IB of the financial statement, the financial statement is prepared by the Butler County, Kansas Financial Reporting Entity on the basis of the financial reporting provisions of the Kansas Municipal Audit and Accounting Guide, which is a basis of accounting other than accounting principles generally accepted in the United States of America. The effects on the financial statement of the variances between the regulatory basis of accounting described in Note IB, and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. 15

16 Adverse Opinion on U.S. Generally Accepted Accounting Principles In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles paragraph, the financial statement referred to above does not present fairly, in conformity with accounting principles generally accepted in the United States of America, the financial position of the Butler County, Kansas Financial Reporting Entity as of December 31, 2016, or changes in financial position and cash flows thereof for the year then ended. Unmodified Opinion on Regulatory Basis of Accounting In our opinion, the financial statement referred to above presents fairly, in all material respects, the aggregate cash and unencumbered cash balance of the Butler County, Kansas Financial Reporting Entity as of December 31, 2016, and the aggregate receipts and expenditures for the year then ended in accordance with the financial reporting provisions of the Kansas Municipal Audit and Accounting Guide described in Note IB. Other Matters Supplementary Information Our audit was conducted for the purpose of forming an opinion on the fund summary statement of regulatory basis receipts, expenditures, and unencumbered cash balances (basic financial statement) as a whole. The supplementary information as listed in the table of contents is presented for analysis and is not a required part of the basic financial statement, however, is required to be presented under the provisions of the Kansas Municipal Audit and Accounting Guide. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statement. The information has been subjected to the auditing procedures applied in the audit of the basic financial statement and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statement or to the basic financial statement itself, 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 basic financial statement as a whole, on the basis of accounting described in Note IB. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 18, 2017 on our consideration of the Butler County, Kansas Financial Reporting Entity s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Butler County, Kansas Financial Reporting Entity s internal control over financial reporting and compliance. April 18, 2017 Wichita, Kansas Allen, Gibbs & Houlik, L.C. CERTIFIED PUBLIC ACCOUNTANTS 16 2

17 BUTLER COUNTY, KANSAS Summary Statement of Receipts, Expenditures, and Unencumbered Cash Regulatory Basis For the Year Ended December 31, 2016 Ending Beginning Unencumbered Add Ending Unencumbered Cash Encumbrances Cash Cash Balance Balance and Accounts Balance Receipts Expenditures Payable GOVERNMENTAL TYPE FUNDS: GENERAL FUND - 14,162,935 14,162, , ,808 SPECIAL PURPOSE FUNDS: Sales Tax 3,327,497 2,193,535 1,756,563 3,764, ,428 3,914,897 Emergency Medical Services 32,681 2,538,711 2,454, ,012 4, ,597 Road and Bridge 136,692 7,238,668 7,193, ,980 8, ,960 Bridge Building 3,798 1,320,589 1,193, , , ,178 Sheriff 190,729 3,204,758 3,295,830 99, ,615 Jail Operating - 3,372,517 3,372, Department on Aging - Administration - 527, , Equipment Reserve 186, , ,267 E 911 Wireless Tax 203, , , , ,607 Special Alcohol 21,054 4,357-25,411-25,411 Special Parks and Recreation 16,307 2,278-18,585-18,585 Special Liability 225, , , , ,608 Street Lighting 322 1,788 1, Wind Farms 143,971-80,669 63,302-63,302 Health Department - Administration - 497, , Economic Development 547,252 8,100 5, , ,352 Sewer District Maintenance 331, ,746 94, , ,407 Special Ambulance 268, , , , , ,331 Landfill Post Closure 1,802,675 1,285-1,803,960-1,803,960 Special Highway Improvement 1,653, , ,244 1,792,569-1,792,569 Special Road Machinery 578, , , , ,394 Special Law Enforcement 4, ,502-4,502 Jail Reserve 277, , , ,908 Dept. of Aging Reserve 395,158 1,326 70, , , Mhz maintenance and upgrade 13,350 13,750-27,100-27,100 ConcealCarry Permits 13,186 5,980 4,559 14,607-14,607 Health Department Reserve 228,550 2,509 59, , ,159 Motor Vehicle Operating 30, , ,880 71,103-71,103 Capital Improvements 2,501, , ,388 3,228,848-3,228,848 Sheriff Capital Reserves 435, ,504 80, , ,792 Election Reserve Fund 209,325 80, , ,325 Drug Asset and Seizure 4,649-2,578 2,071-2,071 County Attorney Diversion Fees 27,158 58,971 31,622 54, ,623 Prosecutor's Training and Assistance 6,246 9,083 9,216 6,113-6,113 Juvenile Justice Diversion Fees 6,291 7,574 8,942 4,923-4,923 Juvenile Justice EMP Fees 11,865 41,860 21,719 32,006-32,006 Community Corrections 84, , ,562 93, ,215 Court Services Diversion Fees 4, ,119-4,119 Child Support Enforcement 119,682 59,180 44, , ,306 Register of Deeds - Technology 360,700 93,585 46, , ,885 Clerks - Technology 22,334 23,328 24,906 20,756-20,756 Treasury - Technology 22,334 23,328-45,662-45,662 Department on Aging - Grants 101, , ,802 94, ,931 Health Department - Grants 78, , , , ,580 Federal and State Assistance 294, , , , ,008 TOTAL SPECIAL PURPOSE FUNDS 14,924,765 27,681,477 25,663,239 16,943, ,622 17,901,625 CAPITAL PROJECTS FUNDS: Capital Projects 70, , ,421 70,769-70,769 TOTAL CAPITAL PROJECTS FUNDS 70, , ,421 70,769-70,769 BOND AND INTEREST FUNDS: Bond and Interest 268,425 4,164,759 4,076, , ,481 TOTAL BOND AND INTEREST FUNDS 268,425 4,164,759 4,076, , ,481 BUSINESS FUNDS: Self-Insurance 650,239 3,387,632 3,729, , , ,106 Landfill Operating 406,189 1,860,536 1,903, ,085 10, ,752 Landfill Capital Improvements 2,200, , ,825 2,852,990-2,852,990 TOTAL BUSINESS FUNDS 3,256,621 6,069,790 5,802,453 3,523, ,890 3,947,848 TOTAL COUNTY 18,520,580 52,201,382 49,827,751 20,894,211 1,673,320 22,567,

18 BUTLER COUNTY, KANSAS Summary Statement of Receipts, Expenditures, and Unencumbered Cash Regulatory Basis (Continued) For the Year Ended December 31, 2016 Beginning Ending Unencumbered Unencumbered Add Ending Cash Cash Encumbrances Cash Balance Balance and Accounts Balance Receipts Expenditures Payable RELATED MUNICIPAL ENTITIES: Butler County Extension Council 44, , ,305 44,776-44,776 Butler County Public Building Commission 10,217 2,330,335 2,330,330 10,222-10,222 TOTAL RELATED MUNICIPAL ENTITIES 54,850 2,735,783 2,735,635 54,998-54,998 TOTAL REPORTING ENTITY (Excluding Agency Funds) 18,575,430 54,937,165 52,563,386 20,949,209 1,673,320 22,622,529 Composition of Cash: Petty Cash 7,539 Checking Account - Community National Bank (Motor Vehicle) 71,103 Checking Account - Intrust (Public Building Commission) 12,177 Checking Account - Intrust Holding 65,143,201 Checking Account - Intrust Depository 421,992 Checking Account - Intrust Disbursement (541,740) Checking Account - Intrust Bank Inmate Fund 16,022 Investment Account - Kansas Municipal Investment Pool 3,000,000 Certificates of Deposit - Intrust 6,000,000 Certificates of Deposit - Towanda State Bank 250,000 Certificates of Deposit - Vintage Bank 250,000 Certificates of Deposit - Rose Hill State Bank 250,000 Certificates of Deposit - Community National Bank 250,000 Certificates of Deposit - Bank of Whitewater 250,000 Certificates of Deposit - Equity Bank 5,000,000 Certificates of Deposit - Commerce Bank 4,000,000 Extension Council 44,772 Total Cash 84,425,066 Less Agency Funds per Schedule 3 (61,802,537) Total Reporting Entity (Excluding Agency Funds) 22,622,529 The accompanying notes are in integral part of this financial statement. 18 4

19 BUTLER COUNTY, KANSAS NOTES TO THE FINANCIAL STATEMENT INDEX I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Municipal Financial Reporting Entity B. Fund Types and Basis of Accounting 1. Regulatory Basis Fund Types 2. Regulatory Basis of Accounting C. Deposits and Investments II. III. IV. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. Budgetary Information DETAILED NOTES ON THE FUNDS AND ACCOUNTS A. Deposits and Investments B. Long Term Debt C. Other Long Term Obligations from Operations 1. Compensated Absences 2. Landfills 3. Defined Benefit Pension Plan 4. Other Post Employment Benefits 5. Self-Insurance Claims D. Interfund Transfers OTHER INFORMATION A. Litigation B. Risk Management 19 5

20 BUTLER COUNTY, KANSAS NOTES TO THE FINANCIAL STATEMENT DECEMBER 31, 2016 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Municipal Financial Reporting Entity Butler County, Kansas (County) is organized under the laws of the State of Kansas (Kansas or State) and is governed by an elected five-member board. This regulatory financial statement presents the County and certain of its related municipal entities. The related municipal entities are included in the County s reporting entity because they were established to benefit the County andor its constituents. Excluded Related Municipal Entities The Butler County Fire Districts (Fire Districts), defined as separate taxing entities by applicable Kansas statutes, provide fire protection services to the unincorporated areas of the County. The costs of providing such services, including retirement of general long-term debt, are provided from property taxes assessed to property owners in the unincorporated areas of the County. For financial reporting, the financial activities of the Fire Districts have been excluded from the County s financial statements. The effects of their exclusion are not reasonably determinable. Financial statements for the Fire Districts may be obtained from the Butler County Department of Administration. Included Related Municipal Entities The Butler County Sewer Districts (Sewer Districts) are governed by the Butler County Board of County Commissioners acting as separate governing bodies. Their sole purpose is to provide sewage disposal services to County residents. They have a December 31 year-end. These entities, although legally separate entities, are in substance, part of the County's operations, and data from these entities are combined with data of the County and are accounted for as a special purpose fund in the County financial statements. As provided by Kansas statutes, resources required for the financing of utility plants are provided through the issuance of bonds of Butler County, Kansas. The debt service costs associated with the bonds are allocated to the property owners within the benefit district. Collections of such costs are recorded as revenue in the Sewer Districts bond and interest fund from which the bonds are retired. The Butler County Public Building Commission (BCPBC) was established to benefit the County and other governmental entities. The BCPBC consists of five members, those members being the Board of County Commissioners of Butler County. The BCPBC has the authority to issue revenue bonds to finance the cost of acquiring andor constructing land and facilities operated for a public purpose by a governmental entity. The BCPBC finances the debt service of the revenue bonds by leasing the land and facilities to the governmental entity that operates it. The operating governmental entity guarantees the rentals under the BCPBC lease. The BCPBC has no power to levy taxes, and revenue bonds issued by the BCPBC are not included in any legal debt limitations of the operating governmental entity. 20 6

21 The Butler County Extension Council provides services in such areas as agriculture, home economics, horticulture, and 4-H clubs, to all persons in the County. The Council is a 24-member elected board with a nine-member executive board. The County annually provides significant operating subsidies to the Council. Kansas State University provides the County Extension Council non-cash receipts and disbursements related to salaries for operations of the Council. Those noncash receipts and disbursements are reflected as receipts and expenditures for regulatory basis reporting purposes. B. Fund Types and Basis of Accounting 1. Regulatory Basis Fund Types The accounts of the County are organized on the basis of funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for separately. Funds are classified into three categories: governmental, business, and fiduciary. Within each of these three categories there are one or more fund types. The County uses the following regulatory basis fund types: Governmental Fund Types These are the funds through which most governmental functions typically are financed. The funds included in this category are as follows: General Fund This fund is the chief operating fund. This fund is established to account for resources devoted to financing the general services that the County performs for its citizens. General tax revenues and other sources of revenue used to finance the fundamental operations of the County are included in this fund. This fund is used to account for all resources except those required to be accounted for in another fund. Special Purpose Funds These funds are established to account for the proceeds of specific tax levies and other specific regulatory receipt sources (other than tax levies for long-term debt and major capital projects) that are intended for specified purposes. Bond and Interest Funds These funds are established for the purpose of accumulating resources, including tax levies, transfers from other funds and the payment of interest and principal on long-term general obligation debt, other than those payable from Enterprise Funds. Capital Project Funds These funds account for debt proceeds and other financial resources to be used for the acquisition or construction of major capital facilities or equipment which are not financed by Enterprise funds. Business Fund Types Enterprise Funds These funds are used to account for operations where it is the stated intent that costs of providing that service to the general public on a continuing basis is to be financed in whole or in part by fees charged to users of the goods or services. Internal Service Funds These funds are used to account for health insurance reserves, which are services provided to other departments on a cost-reimbursement basis. Fiduciary Fund Types Agency funds Funds used to report assets held by the municipal reporting entity on a purely custodial capacity (county treasurer tax collection accounts, etc.) 21 7

22 2. Regulatory Basis of Accounting Regulatory Basis of Accounting and Departure from Accounting Principles Generally Accepted in the United States of America. The Kansas Municipal Audit and Accounting Guide (KMAAG) regulatory basis of accounting involves the recognition of cash, cash equivalents, marketable investments, and certain accounts payable and encumbrance obligations to arrive at a net unencumbered cash and investments balance on a regulatory basis for each fund, and the reporting of changes in unencumbered cash and investments of a fund resulting from the difference in regulatory basis revenues and regulatory basis expenditures for the fiscal year. All recognized assets and liabilities are measured and reported at cost, unless they have been permanently impaired and have no future cash value or represent no future obligation against cash. The KMAAG regulatory basis does not recognize capital assets, long-term debt, accrued receivables and payables, or any other assets, liabilities or deferred inflows or outflows, other than those mentioned above. The municipality has approved a resolution that is in compliance with K.S.A a(c), waiving the requirement for application of generally accepted accounting principles and allowing the municipality to use the regulatory basis of accounting. C. Deposits and Investments The County maintains a cash and investment pool that is available for use by all funds. The pool has the general characteristics of demand deposit accounts in that each fund may deposit additional cash at any time and also effectively may withdraw cash at any time without prior notice or penalty. The pooled cash is invested to the extent available in authorized investments. Earnings from the investments are allocated to the general fund. Investments for the County as of December 31, 2016 consisted of certificates of deposits, which are recorded at cost. The County s investment policy and Kansas law (K.S.A ) allow monies not otherwise regulated by statute to be invested in: 1. Temporary notes of Butler County, Kansas. 2. Time deposits, open accounts, or certificates of deposits with maturities of not more than two years. 3. Repurchase agreements with commercial banks, or state or federally chartered savings and loan associations that have offices located in Butler County, Kansas. 4. U.S. Treasury bills or notes with maturities not exceeding two years. 5. U.S. government agency securities with a maturity of not more than four years. 6. The municipal investment pool fund operated by the Kansas Treasurer. This pool is not an SEC registered pool. The Pooled Money Investment Board (PMIB) provides the regulatory oversight for this pool. 7. A municipal investment pool established through the trust department of commercial banks that have offices located in Butler County, Kansas. The County s investment policy and Kansas law (K.S.A ) allow investment of the proceeds of bonds and temporary notes in the following in addition to those stated above: 1. U.S. government and agency obligations. 2. Time deposits with banks and trust companies in Butler County, Kansas. 3. FNMA, FHLB, and FHLMC obligations. 4. Collateralized repurchase agreements. 22 8

23 5. Investment agreements with financial institutions, including brokerdealers whose obligations are rated in one of the three highest rating categories by either Moody s or Standard & Poor s. 6. Mutual funds whose portfolio consists entirely of obligations of the U.S. government, U.S. government agencies, FLMA, FHLB, and FHLMC. 7. Certain Kansas municipal bonds. II. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. Budgetary Information Kansas statutes require an annual operating budget be legally adopted for the general fund, special purpose funds (unless specifically exempted by statute), bond and interest funds, and business funds. Although directory rather than mandatory, the statutes provide for the following sequence and timetable of the legal annual operating budget: * Preparation of the budget for the succeeding calendar year on or before August 1st. * Publication in a local newspaper on or before August 5th of the proposed budget and notice of public hearing on the budget. * Public hearing on or before August 15th, but at least ten days after publication of notice of hearing. * Adoption of the final budget on or before August 25th. The County has the following levels of budget control: * The legal level of control is established at the fund level by Kansas statutes. * As allowed by Kansas statute, the governing body can increase the fund level expenditures by amending the budget. An amendment may only be made for previously unbudgeted increases in regulatory receipts 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 statutes permit transferring 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 schedules are presented for each budgeted fund showing actual receipts and expenditures compared to budgeted receipts and expenditures. These schedules are shown at the legal level of control, which is at the fund level. Budgetary data in the financial statements represent the amended budget amounts. All legal operating budgets are prepared using the regulatory basis of accounting, in which regulatory receipts are recognized when cash is received and expenditures include disbursements, accounts payable, and encumbrances with disbursements being adjusted for prior year s accounts payable and encumbrances. Encumbrances are commitments by the County for future payments and are supported by a document evidencing the commitment, such as purchase order or contract. Any unused budget expenditure authority lapses at year-end except for capital project funds appropriations, which are carried forward until such time as the project is completed or terminated. Encumbered appropriations are not reappropriated in the ensuing year s budget but are carried forward until liquidated or canceled. 23 9

24 A legal operating budget is not required for capital project funds, the landfill capital improvements fund and the following special purpose funds: Special Ambulance Landfill Post Closure Special Highway Improvement Special Road Machinery Special Law Enforcement Jail Reserve Dept. of Aging Reserve 800Mhz maintenance and upgrade ConcealCarry Permits Health Department Reserve Motor Vehicle Operating Capital Improvements Sheriff Capital Reserves Election Reserve Drug Asset and Seizure County Attorney Diversion Fees Prosecutor s Training and Assistance Juvenile Justice Diversion Fees Juvenile Justice EMP Fees Community Corrections Court Services Diversion Fees Child Support Enforcement Register of Deeds Technology Clerks Technology Treasury Technology Department on Aging Grants Health Department Grants Federal and State Assistance Spending in funds which are not subject to the legal annual operating budget requirement is controlled by federal regulations, other statutes, or by the use of internal spending limits established by the governing body. III. DETAILED NOTES ON THE FUNDS AND ACCOUNTS A. Deposits and Investments Deposits At year end, the carrying amount of deposits for the County was 81,425,066 and the bank balance was 81,654,859. Investments - As of December 31, 2016, the County had the following investments and maturities. Investment Type Fair Value Investment Maturity (at cost) Less than 1 Year Percentage of Investments Rating Kansas Municipal Investment Pool 3,000,000 3,000, % AAAfS1+ Total Fair Value 3,000,000 3,000,000 K.S.A establishes the depositories which may be used by the County. The statute requires banks eligible to hold the County s funds have a main or branch bank in the County, or in an adjoining county if such institution has been designated as an official depository, and the banks provide an acceptable rate of return on funds. In addition, K.S.A requires the banks to pledge securities for deposits in excess of FDIC coverage. The County has no other policies that would further limit interest rate risk. Custodial Credit Risk Deposits. Custodial credit risk is the risk that, in the event of a bank failure, the County s deposits may not be returned to it. State statutes require the County s deposits in financial institutions to be entirely covered by federal depository insurance or by collateral held under a joint 24 10

25 custody receipt issued by a bank within the State of Kansas, the Federal Reserve Bank of Kansas City, or the Federal Home Loan Bank of Topeka, except during designated peak periods when required coverage is 50%. The County does not have a formal deposit policy for custodial credit risk. As of December 31, 2016, the County was not exposed to custodial credit risk with its deposits since all were either covered by the federal deposit insurance corporation, or the collateral was held by a separate financial instruction in the County s name. Custodial Credit Risk Investments. For an investment, this is the risk that, in the event of the failure of the issuer or counterparty, the County will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. State statutes require investments to be adequately secured. At December 31, 2016, the County had invested 3,000,000 in the State s municipal investment pool. 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 ten 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. Credit Risk. State law limits the types of investments that the County may make. The County s investment policy does not add any further limitations. Interest Rate Risk. State law and the County s investment policy limit investments in U.S. Treasury bills and agency securities or notes to those with maturities not exceeding two years. Concentration of Credit Risk. State statutes place no limit on the amount the County may invest in any one issuer as long as the investments are adequately secured under K.S.A and B. Long-Term Debt Changes in long-term debt for the County for the year ended December 31, 2016 were as follows: Date of Balance Balance Interest Date of Amount Final Beginning Reductions End of Interest Issue Rates Issue of Issue Maturity of Year Additions Payments Year Paid Butler County: General Obligation Bonds - Governmental Funds: Series Northridge Sewer Dist 19 Improvements % , ,000-40, ,000 8,530 Series 2007 A - Internal Improvements % , ,000-9,000 61,000 3,184 Series 2010 A - Internal Improvements % , ,000-20, ,000 8,710 Series 2010 B - Refunding Bonds % , ,000-95, ,000 6,345 Certificates of Participation: Series Lease Purchase Agreement % ,100, ,960,000-1,235,000 5,725, ,712 Total Bonded Indebtedness 7,685,000-1,399,000 6,286, ,481 Kansas Department of Transportation Revolving Loan 3.78% ,760, , ,459-5,687 Total Butler County 7,835,459-1,549,459 6,286, ,168 Related Municipal Entity - Butler County Public Building Commission: Revenue Bonds: Series Refunding Bonds % ,345, ,585,000-1,740,000 9,845, ,695 Series SC Mental Health Counseling Center, Inc % , ,000-75, ,000 9,635 Total Related Municipal Entity 11,820,000-1,815,000 10,005, ,330 Total Long-Term Debt 19,655,459-3,364,459 16,291, ,

26 Current maturities of long-term debt and interest for the next five years and in five year increments through maturity are as follows: YEAR Total PRINCIPAL: Butler County: General Obligation Bonds: Series Northridge Sewer Dist 19 Impr 40,000 40,000 45,000 45, ,000 Series 2007 A - Paving Improvements 9,000 10,000 10,000 10,000 11,000 11,000 61,000 Series 2010 A - Internal Improvements 20,000 20,000 20,000 20,000 20, , ,000 Series 2010 B - Refunding Bonds 95,000 35, ,000 Certificates of Participation: Series Lease Purchase Agreement 1,310,000 1,385,000 1,470,000 1,560, ,725,000 Total Principal - Butler County 1,474,000 1,490,000 1,545,000 1,635,000 31, ,000 6,286,000 Related Municipal Entity - Butler County Public Building Commission: Revenue Bonds: Series 2005 Refunding 1,810,000 1,875,000 1,960,000 2,055,000 2,145,000-9,845,000 Series 2007-Mental Health Counseling Ctr 80,000 80, ,000 Total Principal - Related Municipal Entity 1,890,000 1,955,000 1,960,000 2,055,000 2,145,000-10,005,000 TOTAL PRINCIPAL 3,364,000 3,445,000 3,505,000 3,690,000 2,176, ,000 16,291,000 INTEREST: Butler County: General Obligation Bonds: Series Northridge Sewer Dist 19 Imp. 6,930 5,330 3,690 1, ,795 Series 2007 A - Paving Improvements 2,806 2,392 1,932 1,472 1, ,120 Series 2010 A - Internal Improvements 8,070 7,390 6,650 5,850 5,050 10,625 43,635 Series 2010 B - Refunding Bonds 3,875 1, ,995 Certificates of Participation: Series Lease Purchase Agreement 208, , ,525 62, ,500 Kansas Dept of Transportation Revolving Loan Total Interest - Butler County 230, , ,797 71,567 6,062 11, ,045 Related Municipal Entity - Butler County Public Building Commission: Revenue Bonds: Series 2005 Refunding 433, , , ,000 96,525-1,358,275 Series 2007-Mental Health Counseling Ctr 6,560 3, ,840 TOTAL INTEREST 670, , , , ,587 11,131 1,999,160 TOTAL PRINCIPAL AND INTEREST 4,034,791 3,992,087 3,911,997 3,950,567 2,278, ,131 18,290,160 Conduit Debt The County has issued Industrial Revenue Bonds not directly obligated by the County. The total amount outstanding at December 31, 2016 was 179,459 for the Industrial Revenue Bonds. These bonds do not constitute an indebtedness or pledge of the faith and credit of the County. State Transportation Revolving Loan Fund On July 7, 2010, the County entered into a loan agreement not to exceed 1,760,000 with the Kansas Department of Transportation. The proceeds of the loan will be applied to pay project costs for street improvements. Proceeds of the loan shall be disbursed after submitting requests for reimbursement. As of the date of the audit report, 1,003,432 of expenditures have been reimbursed to the County

27 C. Other Long-Term Obligations From Operations 1. Compensated Absences It is the County's policy to permit employees to accumulate vacation to a maximum of 200 hours (5 weeks) for 8 hour employees, hours (5 week equivalent) for 8.5 hour employees and 281 hours (5 week equivalent) for 12 hour employees. Upon termination or resignation from service to the County, employees who have completed at least 6 months of employment are entitled to payment for all accrued vacation earned prior to their termination or resignation. During the first 5 years of employment, employees earn vacation at the rate of 2 weeks (or its equivalent) per year; 6-10 years, employees earn the equivalent of 2 weeks and 2 days; years, employees earn the equivalent of 3 weeks per year; and after 20 years, the equivalent of 4 weeks of vacation is earned each year. All full-time equivalent employees earn sick leave at the rate of one calendar day per month. Upon retirement or termination, any employee in good standing, employed for two years or more, shall be compensated for accrued sick leave up to a maximum of 1,040 hours at the rate of one-half of his or her regular rate of pay. Employees with hire dates on or after April 2003 will be compensated for accrued sick leave at the rate of one-fourth of his or her regular rate of pay. At December 31, 2016 the County had a liability of 1,573,452 for compensated absences. 2. Landfills Closure and post-closure costs Kansas and federal laws and regulations require the County place a final cover on its landfill when closed and perform certain maintenance and monitoring functions at the landfill site for 30 years after closure. The Butler County Landfill #1 was closed on October 5, 1996 and stopped accepting waste. As of December 31, 2016, all closure costs had been incurred, and the estimated postclosure cost was 1,067,346 based on 100% usage. On October 5, 1996, the County opened a new 75-acre Subtitle D landfill and began filling 7.4-acre area #1a. On September 1, 1999, the County opened additional 7.2-acre area #2a. In April 2005, the County opened additional 7.5-acre area #1b. In July 2011, the County opened additional 7.5-acre area #2b. During fiscal year 2015, the Kansas Department of Health & Environment approved a permit change that increased the permitted disposal area footprint for the landfill and increased the fill height. This change will significantly increase the planned life expectancy of the landfill compared to prior years estimates. As of December 31, 2016, cell #1a was 88% full, cell #2a was 88% full, cell #1b was 80% full, and cell #2b was 69% full. The estimated closure cost for these areas was 1,186,739, and the estimated post-closure cost was 732,596 based on 32% usage of the open cells of the new Subtitle D landfill. These cells have a combined remaining useful life of approximately 5 years; however, will not be filled to capacity for several years until the footprint of the landfill area in use is big enough to allow landfill operations to continue in a vertical direction. The entire 75-acre Subtitle D landfill is expected to reach capacity in 72 years

28 In addition, the County operates a household hazardous waste facility, composting facility, and a constructiondemolition landfill with closure costs of 7,501, 27,560, and 401,902, respectively. There are no post-closure care costs associated with these facilities. The recognition of these landfill closure and post-closure care costs is based on the amount of the landfill used during the year. The estimated liability for landfill closure and post-closure care costs was 3,423,644 as of December 31, It is estimated an additional 1,830,079 will be recognized as closure and post-closure care expenses between the date of the financial statements and the date the landfill is expected to be filled to capacity. The estimated total current cost of the landfill closure and postclosure care, 5,253,723, is based on the amount that would be paid if all equipment, facilities, and services required to close, monitor, and maintain the landfill were acquired as of December 31, Actual cost of closure and post-closure care may be higher due to inflation, changes in technology, or changes in landfill laws and regulations. The closure and post-closure will be financed by user fees and may potentially require the sale of bonds. Financial assurance for closure and post-closure care costs of the landfill has been demonstrated by the local government financial test, as specified in 40 CFR (f), adopted by reference for use in Kansas by K.A.R Defined Benefit Pension Plan General Information about the Pension Plan Plan description. The County participates in the Kansas Public Employees Retirement System (KPERS), a cost-sharing multiple-employer defined benefit pension plan as provided by K.S.A , et. seq. Kansas law establishes and amends benefit provisions. KPERS issues a publically available financial report that includes financial statements and required supplementary information. KPERS financial statements are included in its Comprehensive Annual Financial Report which can be found on the KPERS website at or by writing to KPERS (611 South Kansas, Suite 100, Topeka, KS 66603) or by calling Contributions. K.S.A and K.S.A ,210 establish the KPERS member-employee contribution rates. KPERS has multiple benefit structures and contribution rates depending on whether the employee is a KPERS 1, KPERS 2 or KPERS 3 member. KPERS 1 members are active and contributing members hired before July 1, KPERS 2 members were first employed in a covered position on or after July 1, 2009, and KPERS 3 members were first employed in a covered position on or after January 1, Effective January 1, 2015, Kansas law established the KPERS member-employee contribution rate at 6% of covered salary for KPERS 1, KPERS 2 and KPERS 3 members. Member contributions are withheld by their employer and paid to KPERS according to the provisions of Section 414(h) of the Internal Revenue Code. State law provides that the employer contribution rates for KPERS 1, KPERS 2 and KPERS 3 be determined based on the results of each annual actuarial valuation. Kansas law sets a limitation on annual increases in the employer contribution rates. The actuarially determined employer contribution rate (not including the 1% contribution rate through March 31, 2016 with a 0% moratorium until June 30, 2017 for the Death and Disability Program) and the statutory contribution rate was 9.18% for the fiscal year ended December 31, Contributions to the pension plan from the County were 1,367,661 for the year ended December 31,

29 Net Pension Liability At December 31, 2016, the County s proportionate share of the collective net pension liability reported by KPERS was 13,157,038. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2015, which was rolled forward to June 30, The County s proportion of the net pension liability was based on the ratio of the County s contributions to KPERS, relative to the total employer and non-employer contributions of the Local subgroup within KPERS. Since the KMAAG regulatory basis of accounting does not recognize long-term debt, this liability is not reported in the financial statement. The complete actuarial valuation report including all actuarial assumptions and methods, and the report on the allocation of the KPERS collective net pension liability to all participating employers are publicly available on the website at or can be obtained as described above. 4. Other Post-Employment Benefits As provided by K.S.A , Butler County allows retirees to participate in the group health insurance plan. While each retiree pays the full amount of the applicable premium, conceptually, the local government is subsidizing the retirees because each participant is charged a level of premium regardless of age. However, the cost of this subsidy has not been quantified in this financial statement. Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), the government makes health care benefits available to eligible former employees and eligible dependents. Certain requirements are outlined by the federal government for this coverage. The premium is paid in full by the insured. There is no cost to the government under the COBRA program. 5. Self-Insurance Claims The County established a limited risk management program for employees health care insurance as of November 1, The program includes a stop-loss provision for claims over 100,000 per individual and aggregate claims over 3,694,000. The estimated liability for payment of incurred (both reported and unreported) but unpaid claims are recorded in the Self-Insurance Fund. 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. Liabilities related to risks of loss are reported when it is probable that a loss has occurred and the amount of loss can be reasonably estimated. The County has 413,223 recorded as accounts payable in the Self-Insurance Fund for incurred but unpaid health claims

30 D. Interfund Transfers A summary of interfund transfers is as follows: From To Authority Amount Aging Reserve Dept of Aging-Admin Adopted Budget 70,000 Community Corrections Self-Insurance K.S.A ,573 County Attorney Diversion Fees Self-insurance K.S.A ,975 Department of Aging - Administration Dept of Aging Reserve Resolution ,326 Department on Aging - Grants Self-insurance K.S.A ,576 Emergency Medical Services Special Ambulance K.S.A d 237,467 Federal and State Assistance Self-insurance K.S.A General Fund County Capital Imprv Rsv K.S.A ,895 General Fund Self-Insurance K.S.A ,345,597 General Fund County's Election Reserve Fund K.S.A ,000 Health Department - Administration General Fund Adopted Budget 48,988 Health Department - Administration Health Dept Reserve K.S.A ,509 Health Department - Grants Self-insurance K.S.A ,638 Health Dept Reserve Health Department - Administration Adopted Budget 59,900 Jail Operating Jail Reserve Resolution Jail Reserve Jail Operating NA 100,000 Landfill General Fund K.S.A , ,290 Landfill Landfill Capital Improvements K.S.A ,622 Motor Vehicle General Fund K.S.A ,741 Road & Bridge Debt Service Adopted Budget 156,333 Road & Bridge Special Road Machinery K.S.A (g) 380,000 Road & Bridge Special Highway Improvement K.S.A ,878 Sales Tax Debt Service Resolution ,483,714 Sales Tax Capital Project Fund Resolution ,421 Sheriff Sheriff Capital Reserve K.S.A ,504 7,734,463 IV. OTHER INFORMATION A. Litigation The County is a defendant in various legal actions pending or in process for tax appeals, property damage, and miscellaneous claims. The ultimate liability that might result from the final resolution of the above matters is not presently determinable. Management and the County's counsel are of the opinion that the final outcome of the cases will not have an adverse material effect on the County's financial statements. B. Risk Management The County is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The County carries commercial coverage for buildings and personal property, general liability, automobile fleet, inland marine, public official and employee errors and omissions, workers' compensation, medical professional liability, boiler and machinery, and law enforcement liability. Claims have not exceeded coverage in any of the last three years, and coverage has not been reduced substantially from the prior year

31 REGULATORY REQUIRED SUPPLEMENTARY INFORMATION 31

32 Schedule 1 BUTLER COUNTY, KANSAS Summary of Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Expenditures Variance - Certified Chargeable to Over Budget Current Year (Under) GOVERNMENTAL TYPE FUNDS: GENERAL FUND 14,431,660 14,162,935 (268,725) SPECIAL PURPOSE FUNDS: Sales Tax 1,760,000 1,756,563 (3,437) Emergency Medical Services 2,454,380 2,454,380 - Road and Bridge 7,193,380 7,193,380 - Bridge Building 1,209,670 1,193,943 (15,727) Sheriff 3,295,830 3,295,830 - Jail Operating 3,452,400 3,372,517 (79,883) Department on Aging - Administration 548, ,942 (20,478) 911 Equipment Reserve 186,260 - (186,260) E 911 Wireless Tax 284, ,655 (180,385) Special Alcohol 23,200 - (23,200) Special Parks and Recreation 16,310 - (16,310) Special Liability 207, ,329 (63,311) Street Lighting 1,900 1,773 (127) Wind Farms 230,000 80,669 (149,331) Health Department - Administration 532, ,879 (35,021) Economic Development 428,150 5,000 (423,150) Sewer District Maintenance 343,510 94,381 (249,129) BOND AND INTEREST FUNDS: Bond and Interest 4,161,360 4,076,703 (84,657) BUSINESS FUNDS: Self Insurance 3,963,740 3,729,988 (233,752) Landfill Operating 1,903,640 1,903,

33 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Schedule 2-1 Cash receipts: Taxes: General Fund Variance- Over Actual Budget (Under) Ad valorem property tax 9,975,455 10,330,248 (354,793) Delinquent tax 313, ,000 (101,795) Motor vehicle tax 1,217,981 1,157,620 60,361 In lieu of tax 8,522 18,000 (9,478) Interest and penalties 408, ,000 (196,801) Total taxes 11,923,362 12,525,868 (602,506) Licenses, fees, and permits: Licenses, permits & fees 531, , ,915 Charges for services 112, ,000 8,203 Building permits 182, ,000 (7,323) County office fees 70,569 75,000 (4,431) Mortgage registration 633, , ,111 Total licenses, fees, and permits 1,531,335 1,236, ,475 Use of money and property: Interest on idle funds 102,249 61,000 41,249 Total interest 102,249 61,000 41,249 Intergovernmental 21, ,000 (101,333) Other: Rental income 90, ,320 (16,181) Weed department receipts 241, ,000 (18,983) Miscellaneous income 10, ,000 (109,433) Transfers 239, ,680 (130,661) Other 3,580 12,000 (8,420) Total other 584, ,000 (283,678) Total cash receipts 14,162,935 14,814,728 (651,793) Expenditures: Non-departmental: Transfers 815, ,285 Miscellaneous 17,621-17,621 Total non-departmental 832, ,906 Administration: Personal services 467, ,490 12,053 Contractual services 692, ,850 23,786 Commodities 35,332 45,400 (10,068) Capital outlay 3,397 5,450 (2,053) Miscellaneous 7,011-7,011 Transfers 2,530-2,530 Total administration 1,208,449 1,175,190 33,

34 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis (Continued) For the Year Ended December 31, 2016 Schedule 2-1 General Fund Variance- Over Actual Budget (Under) Appraisal: Personal services 687, ,440 (35,407) Contractual services 73, ,560 (28,423) Commodities 17,717 28,600 (10,883) Capital outlay 19,174 38,820 (19,646) Transfers 17,820-17,820 Total appraisal 814, ,420 (76,539) Building inspection: Personal services 52,480 69,660 (17,180) Contractual services 3,875 7,600 (3,725) Commodities 6,513 14,300 (7,787) Capital outlay - 10,880 (10,880) Miscellaneous Transfers 8,900-8,900 Total building inspection 72, ,440 (30,202) Building and grounds: Personal services 313, ,080 (21,132) Contractual services 123, ,500 (11,796) Commodities 80,724 84,000 (3,276) Capital outlay 12,302 8,500 3,802 Total building and grounds 530, ,080 (32,402) Capital improvements: Contractual services 19,023 20,000 (977) Total capital improvements 19,023 20,000 (977) County Attorney: Personal services 646, ,220 (60,947) Contractual services 91,187 91,300 (113) Commodities 6,463 7,900 (1,437) Capital outlay 7,586 20,400 (12,814) Transfers 9,900-9,900 Total county attorney 761, ,820 (65,411) County Clerk: Personal services 187, , Contractual services 13,178 16,350 (3,172) Commodities 1,979 5,600 (3,621) Capital outlay - 3,000 (3,000) Total county clerk 203, ,380 (9,281) Computer services: Personal services 239, ,100 (732) Contractual services 171, ,420 (8,709) Commodities 13,985 13, Capital outlay 6,670 22,000 (15,330) Total computer services 431, ,020 (24,286) 34 19

35 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis (Continued) For the Year Ended December 31, 2016 Schedule 2-1 General Fund Variance- Over Actual Budget (Under) District Court: Contractual services 509, ,240 (25,067) Commodities 48,138 43,000 5,138 Capital outlay 12,673 32,220 (19,547) Total district court 569, ,460 (39,476) Economic development: Contractual services 27,294 25,100 2,194 Commodities 4,572 1,300 3,272 Capital outlay - 3,500 (3,500) Total economic development 31,866 29,900 1,966 Elections: Personal services 57,433 44,050 13,383 Contractual services 154, ,900 48,711 Commodities 15,114 21,300 (6,186) Capital outlay 12,206 83,000 (70,794) Reimbursed expenses (33,116) - (33,116) Miscellaneous 4,687-4,687 Total elections 210, ,250 (43,315) Emergency communication: Personal services 718, ,480 (67,048) Contractual services 11,515 11,850 (335) Commodities 7,641 9,300 (1,659) Capital outlay 1,349-1,349 Total emergency communication 738, ,630 (67,693) Emergency management: Personal services 119, ,200 (5,004) Contractual services 34,749 40,400 (5,651) Commodities 13,256 32,700 (19,444) Capital outlay - 15,840 (15,840) Miscellaneous Transfers 13,860-13,860 Total emergency management 182, ,140 (31,128) Employee benefits: Personal services 2,614,284 2,833,120 (218,836) Contractual services 6,564-6,564 Miscellaneous 16,980-16,980 Transfers 2,345,597 2,601,980 (256,383) Total employee benefits 4,983,425 5,435,100 (451,675) Environmental health: Personal services 7,883 31,010 (23,127) Contractual services 3,414 9,300 (5,886) Commodities 2,633 6,250 (3,617) Capital outlay - 5,460 (5,460) Miscellaneous Transfers 3,960-3,960 Total environmental health 18,198 52,020 (33,822) 35 20

36 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis (Continued) For the Year Ended December 31, 2016 Schedule 2-1 General Fund Variance- Over Actual Budget (Under) Extension council: Contractual services 318, ,000 - Total extension council 318, ,000 - Fair association: Contractual services 15,500 15,500 - Total fair association 15,500 15,500 - Flint Hills Services: Contractual services 200, ,000 - Total Flint Hills Services 200, ,000 - GISMapping: Personal services 163, ,490 1,283 Contractual services 20,308 27,900 (7,592) Commodities 2,375 7,300 (4,925) Capital outlay 3,548 20,500 (16,952) Miscellaneous Transfers 16,500-16,500 Total GISmapping 206, ,190 (11,333) Historical society: Contractual services 38,190 38,190 - Total historical society 38,190 38,190 - Juvenile intake: Personal services 204, ,910 (56,949) Contractual services 106, ,500 4,598 Commodities 5,403 8,050 (2,647) Capital outlay 1,980 1,980 - Miscellaneous Total juvenile intake 318, ,440 (54,889) Leadership Butler: Contractual services 20,000 20,000 - Total Leadership Butler 20,000 20,000 - Mid-Kap Contractual services 5,000 5,000 - Total Mid-Kap 5,000 5,000 - Noxious weeds: Personal services 106, ,460 (15,221) Contractual services 13,932 13, Commodities 257, ,400 (21,441) Capital outlay 1,858 32,600 (30,742) Miscellaneous 1,431-1,431 Total noxious weeds 381, ,310 (65,891) 36 21

37 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis (Continued) For the Year Ended December 31, 2016 Schedule 2-1 General Fund Variance- Over Actual Budget (Under) Planning and zoning: Personal services 158, , Contractual services 8,187 17,600 (9,413) Commodities 3,152 7,400 (4,248) Capital outlay 889 5,640 (4,751) Miscellaneous Transfers 2,670-2,670 Total planning and zoning 174, ,510 (15,414) Register of Deeds: Personal services 179, ,770 (2,129) Contractual services 3,136 3,780 (644) Commodities 1,035 1,800 (765) Miscellaneous Total register of deeds 183, ,350 (3,358) Rescue squad: Personal services (200) Contractual services 799 5,150 (4,351) Commodities 10,506 9, Capital outlay 7,698 13,360 (5,662) Total rescue squad 19,003 28,660 (9,657) Soil conservation: Contractual services 39,600 39,600 - Total soil conservation 39,600 39,600 - Strategic Communications Plan: Personal services 49,798 52,400 (2,602) Contractual services 220, ,630 (12,925) Commodities 4,281 10,250 (5,969) Capital outlay 10,353 20,000 (9,647) Total strategic communications plan 285, ,280 (31,143) Treasurer: Personal services 227, ,910 (13,201) Contractual services 83,218 83, Commodities 2,973 6,350 (3,377) Capital outlay 5,446 30,470 (25,024) Transfers 2,470-2,470 Total treasurer 321, ,780 (38,964) Youth programs and services: Contractual services 26,000 26,000 - Total youth programs and services 26,000 26,000 - Total expenditures 14,162,935 14,431,660 (268,725) Receipts over (under) expenditures - Unencumbered cash, beginning - Unencumbered cash, ending

38 Schedule 2-2 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Sales Tax Variance- Over Actual Budget (Under) Receipts: Sales tax 2,193,535 2,337,230 (143,695) Total receipts 2,193,535 2,337,230 (143,695) Expenditures: Contractual services 150, ,428 Transfers 1,606,135 1,760,000 (153,865) Total expenditures 1,756,563 1,760,000 (3,437) Receipts over (under) expenditures 436,972 Unencumbered cash, beginning 3,327,497 Unencumbered cash, ending 3,764,

39 Schedule 2-3 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Emergency Medical Services Variance- Over Actual Budget (Under) Receipts: Ad valorem property tax 632, ,798 (25,419) Delinquent tax 17,214 17, Motor vehicle tax 78,874 76,088 2,786 In lieu of tax Charges for services 1,798,821 1,725,500 73,321 Intergovernmental 7,112-7,112 Miscellaneous 3,768-3,768 Total receipts 2,538,711 2,476,386 62,325 Expenditures: Personal services 1,764,096 1,698,180 65,916 Contractual services 181, ,000 (25,815) Commodities 238, ,200 4,573 Capital outlay 30,702-30,702 Miscellaneous 2,157 15,000 (12,843) Transfers 237, ,000 (62,533) Total expenditures 2,454,380 2,454,380 - Receipts over (under) expenditures 84,331 Unencumbered cash, beginning 32,681 Unencumbered cash, ending 117,

40 Schedule 2-4 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Road and Bridge Variance- Over Actual Budget (Under) Receipts: Ad valorem property tax 4,687,408 4,875,567 (188,159) Delinquent tax 148, ,000 (4,745) Motor vehicle tax 582, ,262 28,954 In lieu of tax 4,022-4,022 Charges for services 50,319 98,000 (47,681) Intergovernmental 1,679,258 1,677,500 1,758 Miscellaneous 87,190-87,190 Total receipts 7,238,668 7,357,329 (118,661) Expenditures: Personal services 1,768,620 1,797,830 (29,210) Contractual services 223, ,300 (12,609) Commodities 3,351,532 3,037, ,032 Capital outlay 1,085,153 2,112,840 (1,027,687) Miscellaneous 5,173 8,910 (3,737) Transfers 759, ,211 Total expenditures 7,193,380 7,193,380 - Receipts over (under) expenditures 45,288 Unencumbered cash, beginning 136,692 Unencumbered cash, ending 181,

41 Schedule 2-5 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Bridge Building Variance- Over Actual Budget (Under) Receipts: Ad valorem property tax 981,950 1,021,298 (39,348) Delinquent tax 30,405 25,000 5,405 Motor vehicle tax 118, ,646 6,021 In lieu of tax Intergovernmental 160, ,024 Miscellaneous 28,700-28,700 Total receipts 1,320,589 1,158, ,645 Expenditures: Personal services 66,962 66, Contractual services - 2,000 (2,000) Commodities 13,890 32,500 (18,610) Capital outlay 7,539 1,108,840 (1,101,301) Capital projects 1,105,241-1,105,241 Miscellaneous Total expenditures 1,193,943 1,209,670 (15,727) Receipts over (under) expenditures 126,646 Unencumbered cash, beginning 3,798 Unencumbered cash, ending 130,

42 Schedule 2-6 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Sheriff Variance- Over Actual Budget (Under) Receipts: Ad valorem property tax 2,401,652 2,497,780 (96,128) Delinquent tax 80,404 85,000 (4,596) Motor vehicle tax 328, ,223 15,635 In lieu of tax 2,061 4,500 (2,439) Licenses, permits, and fees Charges for services 330, ,000 (79,247) Intergovernmental Miscellaneous 60,718-60,718 Reimbursements Total receipts 3,204,758 3,310,503 (105,745) Expenditures: Personal services 2,515,571 2,533,550 (17,979) Contractual services 110, ,900 (296) Commodities 220, ,600 (113,987) Capital outlay 13,873-13,873 Miscellaneous 7,665 18,370 (10,705) Transfers 427, , ,094 Total expenditures 3,295,830 3,295,830 - Receipts over (under) expenditures (91,072) Unencumbered cash, beginning 190,729 Unencumbered cash, ending 99,

43 Schedule 2-7 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Jail Operating Variance- Over Actual Budget (Under) Receipts: Ad valorem property tax 825, ,981 (33,235) Delinquent tax 22,662 27,000 (4,338) Motor vehicle tax 92,753 88,948 3,805 In lieu of tax Charges for services 2,324,247 2,505,710 (181,463) Miscellaneous 5,630-5,630 Intergovernmental Transfers 100, ,000 Total receipts 3,372,517 3,481,339 (108,822) Expenditures: Personal services 2,057,478 2,039,100 18,378 Contractual services 788, ,240 14,953 Commodities 512, ,110 16,656 Capital outlay 7,646-7,646 Miscellaneous 5,698 29,850 (24,152) Transfers ,100 (113,364) Total expenditures 3,372,517 3,452,400 (79,883) Receipts over (under) expenditures - Unencumbered cash, beginning - Unencumbered cash, ending

44 Schedule 2-8 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Department of Aging - Administration Variance- Over Actual Budget (Under) Receipts: Ad valorem property tax 408, ,471 (16,695) Delinquent tax 11,114 15,000 (3,886) Motor vehicle tax 28,164 25,592 2,572 Charges for service 9,532 27,000 (17,468) In lieu of tax Intergovernmental 5-5 Transfers 70,000 65,000 5,000 Total receipts 527, ,063 (30,121) Expenditures: Personal services 79,943 75,460 4,483 Contractual services 438, , ,175 Commodities 3,326 4,600 (1,274) Capital outlay 5, ,510 (280,188) Transfers 1,326-1,326 Total expenditures 527, ,420 (20,478) Receipts over (under) expenditures - Unencumbered cash, beginning - Unencumbered cash, ending

45 Schedule 2-9 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund Equipment Reserve Variance- Over Actual Budget (Under) Receipts: 911 tax Total receipts Expenditures: Commodities - 186,260 (186,260) Total expenditures - 186,260 (186,260) Receipts over (under) expenditures - Unencumbered cash, beginning 186, ,

46 Schedule 2-10 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - E 911 Wireless Tax Variance- Over Actual Budget (Under) Receipts: 911 tax 282, ,000 23,522 Total receipts 282, ,000 23,522 Expenditures: Contractual services 175, ,040 (82,797) Commodities (71,587) 6,000 (77,587) Capital outlay (1) 20,000 (20,001) Total expenditures 103, ,040 (180,385) Receipts over (under) expenditures 178,867 Unencumbered cash, beginning 203,740 Unencumbered cash, ending 382,

47 Schedule 2-11 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Special Alcohol Variance- Over Actual Budget (Under) Receipts: Intergovernmental 4,357 5,000 (643) Total receipts 4,357 5,000 (643) Expenditures: Transfers - 23,200 (23,200) Total expenditures - 23,200 (23,200) Receipts over (under) expenditures 4,357 Unencumbered cash, beginning 21,054 Unencumbered cash, ending 25,

48 Schedule 2-12 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Special Parks and Recreation Variance- Over Actual Budget (Under) Receipts: Intergovernmental 2,278 2,500 (222) Total receipts 2,278 2,500 (222) Expenditures: Contractual services - 16,310 (16,310) Total expenditures - 16,310 (16,310) Receipts over (under) expenditures 2,278 Unencumbered cash, beginning 16,307 Unencumbered cash, ending 18,

49 Schedule 2-13 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Special Liability Variance- Over Actual Budget (Under) Receipts: Intergovernmental 37,500-37,500 Miscellaneous 189, ,938 Total receipts 227, ,438 Expenditures: Contractual services 125, ,640 (82,581) Capital outlay 19,270-19,270 Total fund expenditures 144, ,640 (63,311) Receipts over (under) expenditures 83,109 Unencumbered cash, beginning 225,499 Unencumbered cash, ending 308,

50 Schedule 2-14 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Street Lighting Variance- Over Actual Budget (Under) Receipts: Special assessments 1,788 1,900 (112) Total receipts 1,788 1,900 (112) Expenditures: Contractual services 1,773 1,900 (127) Total expenditures 1,773 1,900 (127) Receipts over (under) expenditures 15 Unencumbered cash, beginning 322 Unencumbered cash, ending

51 Schedule 2-15 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Wind Farms Variance- Over Actual Budget (Under) Receipts: Charges for service - 50,000 (50,000) Total receipts - 50,000 (50,000) Expenditures: Contractual services 80, ,000 (149,331) Total expenditures 80, ,000 (149,331) Receipts over (under) expenditures (80,669) Unencumbered cash, beginning 143,971 Unencumbered cash, ending 63,

52 Schedule 2-16 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Health Department - Administration Variance- Over Actual Budget (Under) Receipts: Ad valorem property tax 304, ,350 (12,129) Delinquent tax 9,970 10,000 (30) Motor vehicle tax 39,355 37,356 1,999 In lieu of tax Charges for services 42,991 98,500 (55,509) Intergovernmental 40,072 21,300 18,772 Miscellaneous 1,109-1,109 Transfers 59,900 59,900 - Total receipts 497, ,406 (45,527) Expenditures: Personal services 162, ,170 (7,903) Contractual services 263, ,000 (13,445) Commodities 15,299 39,000 (23,701) Capital outlay 3,831-3,831 Miscellaneous 1, Transfers 51,497 45,860 5,637 Total expenditures 497, ,900 (35,021) Receipts over (under) expenditures - Unencumbered cash, beginning - Unencumbered cash, ending

53 Schedule 2-17 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Economic Development Variance- Over Actual Budget (Under) Receipts: Special assessments 8,100-8,100 Total receipts 8,100-8,100 Expenditures: Contractual services 5, ,150 (423,150) Total expenditures 5, ,150 (423,150) Receipts over (under) expenditures 3,100 Unencumbered cash, beginning 547,252 Unencumbered cash, ending 550,

54 Schedule 2-18 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Special Purpose Fund - Sewer District Maintenance Variance- Over Actual Budget (Under) Receipts: Special assessments 134, ,830 (2,850) Licenses, permits and fees 2,766-2,766 Total receipts 137, ,830 (84) Expenditures: Contractual services 76, ,120 (31,918) Commodities 14,186 5,560 8,626 Capital outlay 2, ,830 (227,292) Miscellaneous 1,455-1,455 Total expenditures 94, ,510 (249,129) Receipts over (under) expenditures 43,365 Unencumbered cash, beginning 331,042 Unencumbered cash, ending 374,

55 BUTLER COUNTY, KANSAS Schedule 2-19 Schedule of Receipts and Expenditures Regulatory Basis For the Year Ended December 31, 2016 Non-budgeted Special Purpose Funds Landfill Special Special Special Dept. on 800Mhz Special Post Highway Road Law Jail Aging Maintenance Ambulance Closure Improvement Machinery Enforcement Reserve Reserve and Upgrade Receipts: Charges for services ,750 Licenses, permits, and fees County office fees Intergovernmental , Miscellaneous 10,300 1, Other Transfers 237, , , ,326 - Total receipts 247,767 1, , , ,326 13,750 Expenditures: Personal services Contractual services Commodities Capital outlay 270, , ,618-74, Miscellaneous Transfers ,000 70,000 - Total expenditures 270, , , ,809 70,000 - Receipts over (under) expenditures (22,516) 1, ,353 (51,618) - (174,073) (68,674) 13,750 Unencumbered cash, beginning 268,847 1,802,675 1,653, ,012 4, , ,158 13,350 Unencumbered cash, ending 246,331 1,803,960 1,792, ,394 4, , ,484 27,100 (Continued) 40 55

56 BUTLER COUNTY, KANSAS Schedule 2-19 Schedule of Receipts and Expenditures Regulatory Basis For the Year Ended December 31, 2016 Non-budgeted Special Purpose Funds (continued) Receipts: Charges for services Licenses, permits, and fees County office fees Intergovernmental Miscellaneous Other Transfers Total receipts Expenditures: Personal services Contractual services Commodities Capital outlay Miscellaneous Transfers Total expenditures Receipts over (under) expenditures Unencumbered cash, beginning Conceal Health Sheriff Drug County Attorney Carry Department Motor Vehicle Capital Capital Election Asset and Diversion Permits Reserve Operating Improvements Reserves Reserve Seizure Fees , ,180 5, , , , , , ,504 80, ,980 2, , , ,504 80,000-58, , , , (2,700) ,134 4, ,231 80,000-2, , ,900 30, ,975 4,559 59, , ,388 80,577-2,578 31,622 1,421 (57,391) 40, , ,927 80,000 (2,578) 27,349 13, ,550 30,741 2,501, , ,325 4,649 27,158 Unencumbered cash, ending 14, ,159 71,103 3,228, , ,325 2,071 54,507 (Continued) 41 56

57 BUTLER COUNTY, KANSAS Schedule 2-19 Schedule of Receipts and Expenditures Regulatory Basis For the Year Ended December 31, 2016 Non-budgeted Special Purpose Funds (continued) Receipts: Charges for services Licenses, permits, and fees County office fees Intergovernmental Miscellaneous Other Transfers Total receipts Expenditures: Personal services Contractual services Commodities Capital outlay Miscellaneous Transfers Total expenditures Receipts over (under) expenditures Unencumbered cash, beginning Prosecutor's Juvenile Justice Juvenile Justice Court Services Child Register of Training and Diversion EMP Community Diversion Support Deeds Assistance Fees Fees Corrections Fees Enforcement Technology ,083 7,574 41,860 14, ,180 93, , , ,083 7,574 41, , ,180 93, , ,484 1,516 7,345 92, ,169 43, ,906 7, ,003 4,352 7,426 7,468 1, , ,216 8,942 21, , ,556 46,400 (133) (1,368) 20,141 9,434 (204) 14,624 47,185 6,246 6,291 11,865 84,356 4, , ,700 Unencumbered cash, ending 6,113 4,923 32,006 93,790 4, , ,885 (Continued) 42 57

58 BUTLER COUNTY, KANSAS Schedule 2-19 Schedule of Receipts and Expenditures Regulatory Basis For the Year Ended December 31, 2016 Non-budgeted Special Purpose Funds (continued) Receipts: Charges for services Licenses, permits, and fees County office fees Intergovernmental Miscellaneous Other Transfers Total receipts Expenditures: Personal services Contractual services Commodities Capital outlay Miscellaneous Transfers Total expenditures Receipts over (under) expenditures Unencumbered cash, beginning Department Health Federal Clerks Treasury on Aging Department and State Technology Technology Grants Grants Assistance Total ,257 8,579 87, ,642 23,328 23, , , , , ,652 92,671 2,608, , , , ,469 30, ,166,315 23,328 23, , , ,043 6,122, , ,561 17,245 1,955, ,702 87,814 46, ,563 24,156-78,194 39,331 21, , ,351 67,217 1,724, , ,286 88, ,576 49, ,183 24, , , ,894 4,940,998 (1,578) 23,328 (6,582) 41,826 34,149 1,181,651 22,334 22, ,510 78, ,859 9,557,914 Unencumbered cash, ending 20,756 45,662 94, , ,008 10,739,

59 Schedule 2-20 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures Regulatory Basis For the Year Ended December 31, 2016 Capital Project Funds Public Safety Communications Receipts and other sources: Transfers 122,421 Total receipts and other sources 122,421 Expenditures: Contractual services 122,421 Total expenditures 122,421 Receipts and other sources over (under) expenditures - Unencumbered cash, beginning 70,769 Unencumbered cash, ending 70,

60 Schedule 2-21 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Bond and Interest Funds - Bond and Interest Fund Variance- Over Actual Budget (Under) Receipts: Special assessments 544, , ,920 Ad valorem property tax 1,612,396 1,953,375 (340,979) In lieu of tax 1,612-1,612 Delinquent tax 69,530 90,000 (20,470) Motor VehicleTax 296, ,284 15,141 Intergovernmental Transfers 1,640,047 1,640,250 (203) Total receipts 4,164,759 4,155,679 9,080 Expenditures: Contractual services 2,246,076-2,246,076 Principal 1,549,459 3,364,460 (1,815,001) Interest 281, ,900 (515,732) Total expenditures 4,076,703 4,161,360 (84,657) Receipts over (under) expenditures 88,056 Unencumbered cash, beginning 268,425 Unencumbered cash, ending 356,

61 Schedule 2-22 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Business Funds - Self Insurance Internal Service Variance- Over Actual Budget (Under) Receipts: Charges for services 872, , ,599 Transfers 2,515,139 2,957,904 (442,765) Total receipts 3,387,632 3,673,798 (286,166) Expenditures: Contractual services 3,729,988 3,963,740 (233,752) Total expenditures 3,729,988 3,963,740 (233,752) Receipts over (under) expenditures (342,356) Unencumbered cash, beginning 650,239 Unencumbered cash, ending 307,

62 Schedule 2-23 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures - Actual and Budget Regulatory Basis For the Year Ended December 31, 2016 Business Funds - Landfill Variance- Over Actual Budget (Under) Receipts: Delinquent tax Charges for services 1,848,199 1,900,000 (51,801) Rental income 12,244 14,000 (1,756) Miscellaneous Total receipts 1,860,536 1,914,000 (53,464) Expenditures: Personal services 439, ,450 (20,783) Contractual services 171, ,400 (64,607) Commodities 178, ,000 4,476 Capital outlay 67,774-67,774 Miscellaneous 65, ,228 Transfers 980,912 1,032,000 (51,088) Total expenditures 1,903,640 1,903,640 - Receipts over (under) expenditures (43,104) Unencumbered cash, beginning 406,189 Unencumbered cash, ending 363,085 Business Funds - Landfill Capital Improvements Actual Receipts: Transfers 821,622 Total receipts 821,622 Expenditures: Capital outlay 168,825 Total expenditures 168,825 Receipts over (under) expenditures 652,797 Unencumbered cash, beginning 2,200,193 Unencumbered cash, ending 2,852,

63 BUTLER COUNTY, KANSAS Summary of Receipts and Disbursements Regulatory Basis For the Year Ended December 31, 2016 Schedule 3 Agency Funds Beginning Ending Fund Cash Balance Receipts Disbursements Cash Balance Distributable Funds: Advance tax - 15,364 15,364 - Commercial motor vehicle holding 979 (721) Current tax 53,692,442 97,457,985 94,866,051 56,284,376 Delinquent tax 928,829 3,023,060 3,040, ,470 Federal Land Ent Holding - 42,577 42,577 - In lieu of tax 60, ,638 79,755 81,953 Motor license hold - 640, ,696 - Motor vehicle sales tax 178,774 6,582,005 6,564, ,657 Motor vehicle tax 324,084 10,199,173 10,195, ,022 NRP- Tax holding fund - 864, ,203 - Rental Excise Tax Holding - 2,257 2,257 - RV Tax Holding 3, , ,399 3,728 Severance tax holding 3,468 9,273 12,741 - Special CityCounty Highway Holding - 2,073,013 2,073,013 - Specials Holding 3,321,924 5,891,116 6,141,927 3,071,113 Tax and motor vehicle overshort - 368, ,319 - Tax sales ,638 26,013 21,254 Total Distributable Funds 58,514, ,471, ,087,091 60,898,831 State Funds: State educational building tax - 737, ,569 - State institutional building tax - 368, ,783 - Total State Funds - 1,106,352 1,106,352 - Subdivision Funds: Butler County Community College - 13,197,073 13,197,073 - Cities 41,246 21,654,111 21,654,111 41,246 Regional Library - general - 383, ,504 - Regional Library - employee benefits - 20,161 20,161 - School districts (4) 43,449,078 43,449,074 - Townships - 6,521,617 6,521,617 - Watershed districts 5, , ,399 6,673 Total Subdivision Funds 47,094 85,881,764 85,880,939 47,919 Other Agency Funds: Cereal malt beverage licenses County sheriff donations 9,623 (11,694) (5,594) 3,523 Civic plus holding fund 441 1,671-2,112 EMS donations 7, ,406 Employee association 12,665 21,630 20,187 14,108 Fish and game licenses Inmate funds 15, , ,994 16,021 Miscellaneous drug dealer stamp 22, ,315 19,401 Procurement card clearing Register of Deeds - Heritage fund 14,604 27,821 30,000 12,425 Rescue Squad donations 7, ,756 Treasurer's special vehicle 5, , ,731 5,371 Stray animals 3,439-3, Fire Districts 314,003 1,812,202 1,894, ,473 Flex Account 59, , ,465 72,538 Oil and Gas Depletion Trust 462, ,874 Total Other Agency Funds 936,093 2,913,717 2,994, ,787 Total Agency Funds 59,497, ,373, ,068,405 61,802,

64 BUTLER COUNTY, KANSAS Schedule of Receipts and Expenditures Regulatory Basis For the Year Ended December 31, 2016 Schedule 4 Related Municipal Entity - Butler County Extension Council Actual Receipts: County appropriation 318,000 KSU salary participation 61,096 Educational services 26,319 Interest and miscellaneous 33 Total receipts 405,448 Expenditures: Personnel services 371,199 Contractual services 5,121 Commodities 14,056 Capital outlay 3,504 Miscellaneous 11,425 Total expenditures 405,305 Receipts over expenditures 143 Unencumbered cash, beginning 44,633 Unencumbered cash, ending 44,776 Receipts: Related Municipal Entity - Butler County Public Building Commission Actual Rental income 2,330,335 Total receipts 2,330,335 Expenditures: Principal 1,815,000 Interest 515,330 Total expenditures 2,330,330 Receipts (under) expenditures 5 Unencumbered cash, beginning 10,217 Unencumbered cash, ending 10,

65 Board of County Commissioners Agenda Item Report Agenda Item No. 2 Submitted by: Darryl Lutz Submitting Department: Public Works Meeting Date: May 2, 2017 SUBJECT Public Works Department Sign Material Purchase Approval RECOMMENDATION Consider approving the purchase of sign materials for use by the highway department for planned sign replacement and sign maintenance work. ATTACHMENTS BACKGROUND The Public Works Department has engaged in a multi-year program to replace road signs and street name signs to meet current signage standards. In addition the County has continued maintenance on existing signs along County roads. Inventory is low on many common signs and sign plates used by the County. Staff has put together a sign material order the will exceed the 8,000 level for administrative approval. Bids have been solicited from several vendors that traditionally service the state. Staff will prepare a tabulation of bids received which will be presented to the County Commission during the meeting. ANALYSIS Staff has requested bids from 4 sign material vendors. All bids submitted will be tabulated and evaluated by staff upon receipt. The bid tabulation and a recommendation for bid approval will be presented to the County Commission. It will be recommended to award the bid to the lowest bidder subject to the sign materials meeting the required specifications. FINANCIAL CONSIDERATION Sign materials purchases are budgeted for in the Road & Bridge fund and as part of the adopted CIP. LEGAL CONSIDERATION None. COMMISSIONER SIGNATURE REQUIRED No INFORMATION TECHNOLOGY PURCHASE OR SERVICES REVIEW REQUIRED No RECOMMENDED ACTION It is recommended that the Board of County Commissioners approve the purchase of sign materials. Motion: I, Commissioner, move to approve the purchase of sign materials for the highway division of the Public Works Department from in the low bid amount of as recommended by staff and being the lowest bid submitted meeting the required specifications. 65

66 66

67 Board of County Commissioners Agenda Item Report Agenda Item No. 3 Submitted by: Darryl Lutz Submitting Department: Public Works Meeting Date: May 2, 2017 SUBJECT Cold In Place Recycle Surfacing Project Proposal RECOMMENDATION Consider Authorizing the Director of Public Works to develop a pilot project for testing a cold in-place recycle surfacing process. ATTACHMENTS BACKGROUND The County maintains approximately 365 miles of asphalt surfaced roads on the County road system. All of these roads need additional pavement thickness to increase the structural capacity (serviceability) of these roads. The County typically makes structural improvements to roads over time with hot mix overlays. About a third of these miles, however, might not justify the cost of a hot mix overlay. Otherwise, the only structural improvements that occur happen over long periods of time through periodic maintenance. The Public Works Department has investigated or tested different processes over the years to find cost effective alternative processes for making structural improvements to paved roads. The County is currently working on a cold in-place process to recycle a portion of existing light type paved road surfaces while adding additional material to increase thickness. ANALYSIS In 2006, the County tested a process to produce cold mix asphalt from RAP material and laying the asphalt directly on the road surface with a laydown machine. The process worked fairly well and appears to be holding up. The downside to the process is that the underlying road was uneven and varied in width. The process that staff is currently evaluating recycles a portion of the existing road surface in place and allows for adding material to increase the overall thickness of the road surface. The process involves spreading existing RAP material that the County owns along the side of a road, then the contractor brings in a train of equipment that will mill up the existing road surface to a desired depth, then would incorporate the added RAP material, then blend in a designed quantity of liquid asphalt emulsion and then machine lay and compact the new recycled product. This process eliminates unevenness and rutting in the underlying road surface and produces a smooth road surface with a uniform cross slope and surface width. Upon completion, the recycled surface is chip sealed. The County is working with a vendor that specializes in cold in-place recycling (CIR) to construct a pilot project. Staff is proposing a project on 3.5 miles of NW Boyer Rd (Burns Rd) going north from NW 150th St. The process is estimated to cost 80,000 to 90,000 per mile. The overall cost of the proposed project should be 300,000 or less. FINANCIAL CONSIDERATION This work would be programmed as a maintenance project funded out of the Road & Bridge Fund asphalt and aggregates line item. Due to favorable liquid asphalt prices, sufficient capacity exists to fund a pilot project. LEGAL CONSIDERATION 67

68 None known. Staff is proposing a negotiated proposal process with a single vendor. COMMISSIONER SIGNATURE REQUIRED No INFORMATION TECHNOLOGY PURCHASE OR SERVICES REVIEW REQUIRED No RECOMMENDED ACTION Consider authorizing the Director of Public Works to develop a project proposal for a cold in-place recycle road surfacing project. Motion: I, Commissioner, move to authorize the Director of Public Works to develop a project proposal with a contractor to construct a pilot project for cold in-place recycle surfacing work on NW Boyer Rd north of NW 150th St. and to return at a later date with a detailed project proposal for consideration. 68

69 Board of County Commissioners Agenda Item Report Agenda Item No. 3 Submitted by: Jim Schmidt Submitting Department: Emergency Management Meeting Date: May 2, 2017 SUBJECT Consider an offer for the sale of the 2010 GMC Yukon from the Emergency Management Department RECOMMENDATION Approve the sale of the surplus 2010 Yukon per the offer attached. ATTACHMENTS Yukon Offer Superior April 17.pdf BACKGROUND The Emergency Management department currently has on order a new SUV which will replace a 2010 GMC Yukon XL. We had advised the BOCC at the bid opening that we would try to dispose of the GMC locally and had hoped to get around 7,500 for it from a local department. This past week I received an offer (attached) from Mr. Andy Saville representing two of his businesses. This offer is considerably higher than anticipated especially taking into account that he is not asking us to fix the hail damage incurred over the past two years storms. In addition it also helps us temporarily solve the storage issue that has arisen by allowing us to vacate the old Augusta fire station and have our equipment in one location until the issue can be resolved by the CIP project we have submitted. ANALYSIS This assists us in removing an old vehicle from county inventory while providing needed equipment and services in return. FINANCIAL CONSIDERATION This directly reduces the amount we would pay for both the emergency equipment for the new vehicle and storage fees for space for our equipment. This is a significant help in that we have not budgeted for any storage fees in our 2017 budget. LEGAL CONSIDERATION there should be no legal considerations, we would be accepting a fixed amount of goods and services in return for a specifically identified piece of county equipment. COMMISSIONER SIGNATURE REQUIRED No INFORMATION TECHNOLOGY PURCHASE OR SERVICES REVIEW REQUIRED No RECOMMENDED ACTION 69

70 Approve the offer from Mr. Andy Saville representing Superior storage and Superior Emergency Response Vehicles as detailed in the proposal. 70

71 71

72 Board of County Commissioners Agenda Item Report Agenda Item No. 5 Submitted by: Chad Pore Submitting Department: Emergency Medical Services Meeting Date: May 2, 2017 SUBJECT EMS Field Internship Agreement RECOMMENDATION We recommend the approval of the contract with Cowley College ATTACHMENTS Butler EMS 2017.docx BACKGROUND There has been a long working relationship between Butler County EMS and Cowley County Community College. Butler County has been a training ground for EMT's and Paramedics for many years including multiple current staff members. The Field Internship agreement also students currently enrolled in EMS training programs at Cowley College to perform their internship with Butler County EMS. Our desire is to help the students become the best entry level technician they can be. ANALYSIS By agreeing to the contract, we are given access to training future EMT's and Paramedics to the highest level of care. Not only does that help the general public, but also allows us groom future employees if they wish to work for Butler County EMS. FINANCIAL CONSIDERATION Training with the student during internship is done on-duty, one-on-one with our staff. Our preceptors are already working their regular hours and only a little extra time is taken for documentation of the student. LEGAL CONSIDERATION Agreement has been read and approved by legal counsel. COMMISSIONER SIGNATURE REQUIRED Yes INFORMATION TECHNOLOGY PURCHASE OR SERVICES REVIEW REQUIRED No RECOMMENDED ACTION I, (Commissioner Name) move to approve the commission chair to the sign the EMS Field Internship agreement between Cowley County Community College and Butler County EMS. 72

73 EMS Field Internship Agreement THIS AGREEMENT is effective the 1st day of May, 2017, by and between Cowley County Community College &AVTS EMS Training Program, Winfield, Kansas, hereinafter referred to as Training Program, and Butler County EMS. WITNESSETH: WHEREAS, County is operating an ambulance service within Butler County, Kansas, commonly known as Butler County EMS and hereinafter referred to as the EMS System; and, WHEREAS, Training Program is operating EMS training commonly known as Paramedic, AEMT, EMT andor EMR, and desires that the EMS System assist in the education of certain students attending said program; and, WHEREAS, EMS system desires to cooperate with the Training Program in the education of such students, NOW, THEREFORE, in consideration of the mutual conditions, covenants and promises contained herein, the parties hereto agree as follows: 1. Training Program agrees: a. To assume full responsibility for offering a Paramedic class, Advanced Emergency Medical Technician class, Emergency Medical Technician class, or Emergency Medical Responder class, in accordance with statutes and regulations, and also approved by the Board of Emergency Medical Services, Topeka, Kansas. b. To provide the necessary qualified faculty who will plan, implement, supervise, and evaluate the learning experience for the student unless, in specific instances, other provisions are made. c. To provide the current student roster of those requesting to rotate with this EMS System for field internship. d. That the faculty will coordinate the planning relative to the number of students, and the days and hours of field internship with the appropriate EMS personnel of the EMS System. e. Upon request, provide the EMS System with an appropriate certificate of insurance reflecting that each student and faculty member, while performing any of the duties or services contemplated under this agreement, has professional liability insurance with minimum limits of 1,000,000 each person and 3,000,000 aggregate. f. To assure that students assigned to EMS System for field internship have demonstrated academic ability to profit from field internship experience. 73

74 g. To assure that faculty and students abide by existing rules and regulations of the Kansas Board of Emergency Medical Services while interning with the EMS System. h. That no remuneration or compensation shall be requested or expected by the Training Program or of any students during the field internship in connection with this program. i. That the faculty and students will adhere to the EMS System s code of conduct, confidentiality agreement, and applicable policies and procedures. j. That the faculty and students have been trained in preventive personal protection with regards to blood borne pathogens and hazardous materials. k. To remove any student assigned to EMS System at the direction of the EMS System for violation of EMS System s code of conduct, confidentiality agreement, or policies and procedures or the rules and regulations of the Kansas Board of Emergency Medical Services. 2. EMS System agrees: a. To provide facilities for field practice during field internship for these students. b. To provide mutually agreed upon field support and supervision by qualified instructors in each service area. c. To maintain an environment in which student learning can be facilitated. d. To retain ultimate responsibility for the care and transportation of the patient. e. To provide an opportunity for the faculty to be apprised of current training andor affiliation policies by attending appropriate meetings and receiving bulletins regarding changes. 3. It is mutually agreed by the parties hereto that: a. This agreement is for a term starting the 1st day of May, 2017, to the 31st day of May, This agreement may be terminated upon thirty days written notice mailed postage prepaid to the other party. b. The EMS System does not require any faculty or student to participate under conditions which, by their interpretation, may impose unreasonable hardships on the Training Program participants. c. All faculty and students must sign a waiver of liability to participate in this EMS Field Internship program. 74

75 d. This agreement constitutes the whole agreement between the parties, and it is mutually understood and agreed that no alternative, variation, or notification of the terms of this agreement shall be valid unless the same are made in writing and are signed by both parties hereto. e. Training program agrees to and does hereby indemnify and hold EMS System harmless from any and all liability of any kind whatsoever occasioned by or resulting from the acts andor omissions of the Training Program or any faculty member or student. IN WITNESS WHEREOF, the parties hereto have affixed their signatures on the date indicated following each signature below. TRAINING PROGRAM: Dr. Dennis Rittle President Date Signature Chris Cannon Department Chair Date Signature EMS SYSTEM: Chairman (or designee) Butler County Commission Date Signature 75

76 Board of County Commissioners Agenda Item Report Agenda Item No. 6 Submitted by: Will Johnson Submitting Department: Administration Meeting Date: May 2, 2017 SUBJECT Sale of Real Property RECOMMENDATION Consider approval to sell a jointly owned 80 acre parcel owned by Butler County and the City of El Dorado and located just southeast of the prison on SE 20th by negotiated sale to the current tenant. ATTACHMENTS F F - Butlr CityELD.pdf Surplus Property Policy.pdf BACKGROUND Butler County and the City of El Dorado were jointly deeded a large amount of land directly east of the City of El Dorado in the late 1980's by Clifford Stone to recruit the State of Kansas in locating a new prison facility near El Dorado. The City and County were successful in their recruitment and all the property was deeded over to the State of Kansas expect one 80 acre parcel which remains in joint ownership between the City and County located on SE 20th. The 80 acre parcel has and is currently being leased to the Jones Cattle Company for grazing at a minimal cost, due to limited water on the property and has always been managed by the City of El Dorado. Andy Jones the tenant has been wanting to make improvements to the property and has requested to either purchase the 80 acres or negotiate a long term lease. The property is adjacent to other property the tenant owes and leases. ANALYSIS The City of El Dorado contracted with the SunGroup to perform an appraisal on the property which came back at 136,000 or 1,800 per acre. County policy allows for surplus real estate to be disposed of in several ways, one of which is by negotiated sale. The policy also requires an appraisal of the property which has been obtained and finally it requires the County Commission to approve the sale of real estate. The subject is located in El Dorado's jurisdiction and zoned AR, or Ag Residence. This designation conforms to the county's Ag-40 and allows typical agricultural uses along with limited residential development with minimum of forty acres. Staff recommends the sale of the property and to allow the City of El Dorado to take the lead on the sale through negotiation with 1st right of refusal going to the current tenant. If a valid sale can not be established we would then allow the City to list the property through an agent for a negotiated sale. FINANCIAL CONSIDERATION The County and City would split any profits from the sale of the property minus the costs associated with the sale. LEGAL CONSIDERATION Sale of real property is restricted by policy, which is attached for your review 76

77 COMMISSIONER SIGNATURE REQUIRED No INFORMATION TECHNOLOGY PURCHASE OR SERVICES REVIEW REQUIRED No RECOMMENDED ACTION I Commissioner move to allow for the disposition of jointly owned property by the City of El Dorado and Butler County by a negotiated sale to the current tenant located on the East Half of the Southeast Quarter of Section Seven (7), Township Twenty-six (26) South, Range Six (6) East of the 6th P.M., Butler County, Kansas. 77

78 78

79 February 22, 2017 Mr. Scott Rickard City of El Dorado 216 N Vine St. El Dorado, KS Re: Land Appraisal Dear Client: In accordance with your request, enclosed herein is a "Real Property Appraisal Report" of land in Butler County, Kansas. We have conducted a real property appraisal of the subject property under the Uniform Standards of Professional Appraisal Practice. In accordance with these standards, we have inspected the subject property, comparable sales, and have considered all pertinent factors affecting value. The appraisal is subject to the attached underlying assumptions and limiting conditions set forth in this report, as well as the data contained in our work file. The appraisal report describes the methods used and reflects our analysis of the data and the reasoning involved in arriving at our conclusion. As per your instructions, we have formulated the following opinion of market value. In our opinion, the Market Value as of February 22, 2017 is: , Respectfully submitted, Sean W. Schwartz R-2852 David L. Sundgren G-267 Attachment SunGroup David Sundgren & Associates 121 N. Main St. El Dorado, Kansas, david@sungrouprealestate.com Tel: Fax:

80 SunGroup Appraisals UAAR File No. F F Table of Contents Page Title Cover Letter Transmittal Letter Table of Contents General Appraisal Information Scope of Work Scope of Work Cont'd Area & Regional Analysis & Trends Assumptions & Cconditions Property Description Description Cont'd Highest & Best Use Photos Photos FSA Map Soil Map Appraisal Process Valuation Section Cost approach Sales Comparison (1-5) General Comments Income Approach Reconciliation of Value Assumptions and Limiting Conditions Assumptions and Limiting Conditions Certifications Addendum AgWare, Inc. All Rights Reserved. Page #

81 SunGroup Appraisals UAAR File No. # F F GENERAL APPRAISAL INFORMATION CLIENT: The Client is City of El Dorado and Butler County, El Dorado, Kansas. The appraisers were engaged verbally by Mr. Scott Rickard, Director of Engineering for the City of El Dorado. INTENDED USERS OF THIS APPRAISAL REPORT: The intended user is the client, City of El Dorado and Butler County. PURPOSE OF THE APPRAISAL: The purpose of this appraisal is to provide an opinion of Market Value for the subject property. This report of "Market Value" is prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP). In addition, this report complies with Title XI of the Federal Financial institutions Reform and Recovery, and Enforcement Act of 1989 known as FIRREA as implemented through 12 CFR 34. FUNCTION AND INTENDED USE OF THE APPRAISAL: Provide an opinion of market value of the property and general property information, which will be used to assist the client in marketing the property for sale. If any other party uses this report, they do so at their discretion and the appraiser has no obligation to such parties. The appraiser reserves the right to amend this report. TYPE OF APPRAISAL AND REPORT: This is a "Real Property Appraisal Report" as described in USPAP. PROPERTY RIGHTS APPRAISED: The property rights appraised in this appraisal are the fee simple rights of ownership, subject to easements and reservations of record, which according to the Butler County Appraiser's office, are held by Butler County Commissioners & City of El Dorado. The appraiser gives no opinion of title ownership of real estate and minerals. EFFECTIVE DATE OF THE APPRAISAL AND REPORT: The effective date of this appraisal is February 22, DATE OF INSPECTION: The subject was inspected on February 22, Both appraisers physically inspected the property. EASEMENTS & RESTRICTIONS: No adverse easements or restrictions were observed. LISTING & SALES HISTORY OF THE PROPERTY: According to county records, there have been no sales or transfers for the subject property in the past three years. According to Wichita area multiple listing service (MLS), the subject has not been offered for sale in the past twelve months AgWare, Inc. All Rights Reserved. Page 4 of 63 81

82 SunGroup Appraisals UAAR File No. # F F SCOPE OF WORK USPAP Standards Rule 1-2 (h): In developing a real property appraisal, an appraiser must determine the scope of work necessary to produce credible assignment results in accordance with the SCOPE OF WORK RULE USPAP Standards Rule 2-2 (a) (vii): The content of an Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum summarize the scope of work used to develop the appraisal USPAP Standards Rule 2-2 (b) (vii): The content of a Restricted Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum state the scope of work used to develop the appraisal SCOPE OF WORK RULE ( edition) For each appraisal and appraisal review assignment, an appraiser must: 1. identify the problem to be solved 2. determine and perform the scope of work necessary to develop credible results; and 3. disclose the scope of work in the report In accordance with USPAP Standards Rule 1-2 (h) and 2-2 (a) (vii) or 2-2 (b) (vii) and the scope of work rule, the scope of work for this appraisal assignment has been prepared below: Identification of the Problem: The purpose of this appraisal is to provide an opinion of market value for the client, City of El DoradoButler County. The opinion of market value is as of the effective date disclosed in the appraisal report and reflects "as is" condition of the property. The intended use of this appraisal is for an opinion of market value used to assist the client in marketing the property for sale. This appraisal was developed based on information collected during the physical inspection. The subject has been identified by legal and physical description. The description of the subject has been obtained from an authoritative source such as county records, survey, title opinion, etc. and has been provided in the appraisal report. If an adequate legal description is not available to the appraiser, the method used to identify the property boundaries will be disclosed in the appraisal report. The total appraised acreage of the subject has been gathered from the most reliable source available in the judgment of the appraiser. Reliable sources have been identified as deed, survey, office of the county appraiser, office of the county treasurer, client or appraiser calculation. Acreage is generally gathered from the client and supported from USDA field calculations contained on the aerial photograph. All rights appraised and assignment conditions have been disclosed in the appraisal report. Property Inspection The subject has been physically inspected as of the effective date of the report. At a minimum, the appraiser(s) made a visual inspection of the subject property from public roadways with the assistance of an aerial photograph. If necessary, the appraiser(s) entered upon and inspected the property within its boundaries to the extent needed to produce credible results. During inspection, the appraiser(s) noted landmarks and physical features of the subject and platted the findings on the aerial photograph contained in the report. A narrative description of the physical characteristics of the subject has been included in the appraisal report. Type and Extent of Data Research General data pertaining to outside forces of value has been gathered from news organizations, agricultural and appraisal organization publications, universities, county agents, appraisal courses and seminars, observations and many others. Sources providing information specific to the subject for determination of market value include colleagues, realtors, lenders, other appraisers, buyers and sellers, property owners, clients, agriculture management professionals, US Census Bureau, farm management records, Irrigation Districts and many others. Data on comparable sales and prior sales of the subject property have been collected from county courthouse records, MLS listings, our local sales AgWare, Inc. All Rights Reserved. Page 5 of 63 82

83 SunGroup Appraisals UAAR File No. # F F Scope of Work Cont'd database, the Farm Credit Association, local auctions and any other valid sources. Income information was gathered from local markets, subject rental contracts and management records. The extent of data researched was completed to a level providing credible results. Comparable sales were confirmed and visually inspected(?). After careful analysis, the most comparable sales were selected to be used for comparison. Research of past sales of the subject was performed as well as any information contained on contracts or options. Tax information was gathered from county records or estimated if records were unavailable. Cash rental rates were gathered and the most comparable market rent was selected. Type and Extent of Analysis The extent of analysis contained in the appraisal report has been performed to a level acceptable to the client and adequate to produce credible results for the purpose and intended use of the report. Only the Sales Comparison and Income Approaches to value were developed in this assignment. From an adequate number of sales, the appraiser has selected the most comparable sales lending support in reconciling a reasonable value indication. The comparable sales have also been selected in such a way to provide meaningful capitalization rates for the income approach to value. The cash rental rate selected for the income approach reflects the local market rent. Market rents are used rather than contract rents to provide a value indication for the local market. Market rents may be adjusted based on the appraisers' perception of condition. Taxes, management and maintenance expenses are estimated consistently between the subject and comparable sales. The typical market capitalization rate, selected for the income approach, has been documented in the analysis section. Analysis and selection of the value indication in the sales comparison approach is summarized in the appraisal report, which also contains an explanation of approaches used andor omitted and a statement of reconciliation to the final value opinion. Market Value Definition Most common value to be determined when completing an appraisal for the purpose stated. The following definition, as found in The Dictionary of Real Estate Appraisal, Third Addition from the Appraisal Institute, was utilized in the development of this report. Definition of Market Value The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: buyer and seller are typically motivated; both parties are well-informed or well-advised, and each acting in what he considers his own best interest; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in U.S. dollars or in terms of financial agreements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. Note to Client: The appraisers have not provided a previous appraisal report for the subject within the past three years. As required by the Conduct Section of the Ethics Rule of USPAP, we have disclosed any previous serviceappraisal to the client AgWare, Inc. All Rights Reserved. Page 6 of 63 83

84 SunGroup Appraisals UAAR File No. # F F AREA & REGIONAL ANALYSIS & TRENDS The subject property is located in central Butler County, 2 miles southeast of El Dorado, Kansas. AREA AND REGIONAL ANALYSIS AND TRENDS: The subject property is located in southeast Kansas; but more particularly in central Butler County. The market area is defined as rural Butler County. The county seat of Butler County is El Dorado (pop. 12,852) and includes all necessary services and many employment opportunities. According to the U.S. Census Bureau, Butler County has a total area of 1,446 square miles, of which 1,428 square miles is land and 19 square miles is water. Butler County is the largest county by area in the state. Land is mostly rolling grass-covered hills with broad river valleys winding through them. Elevations range from 1,625 feet on the east Flint Hills escarpment down to 1,148 feet in the Walnut River valley. Butler County is at the western edge of the Flinthills region of Kansas, which is a narrow strip of land miles wide stretching from Oklahoma to Nebraska and widely known as one of the premier cattle grazing areas in the world. Most of the immediate area is a mixture of rangeland and cropland commingled with occasional farmsteads and small residential tracts of 5-40 acres. Generally, the soils are deep or moderately deep, are gently sloping and moderately sloping, and have clayey subsoil. Petroleum production and refining is still a major factor in the regional economy. Farming and ranching are also important, and the state correctional facility and light industry are growing segments. Wichita (pop. 386,552), is the largest city in the state as well as the closest metropolitan area, being approximately forty-five minutes west of the subject. All necessary services and many employment opportunities are available in Wichita, with many local residents commuting to Wichita for jobs. Wichita is home to numerous aircraft industries, earning Wichita the title of "the airplane capital of the world." Cessna is the largest area employer, followed closely by Spirit Aero Systems and Hawker Beech Craft. Bombardier Aerospace rounds out the segment, and although Boeing has recently shut down its Wichita facility in , the city remains a major manufacturing center for the aircraft industry. Health care is Wichita's second leading industry. The two largest privately held companies in the U.S. call this area home, Cargill and Koch Industries. The unemployment rate and economy for the area has remained fairly stable the past several years. Development has remained consistent in the Wichita area the past couple years, down from earlier levels prior to Much of the new construction that has occurred the past several years has been near Andover or along the northwest side of Wichita, surrounding Maize. Oil production is mostly confined to certain areas of Butler County and most of the oil fields appear to be in oil valleys or veins when viewed on maps. Oil production is generally associated with lower valued pastures because of past oil and salt-water spills, which have damaged the vegetation and soil so extensively that moderate to severe AgWare, Inc. All Rights Reserved. Page 7 of 63 84

85 SunGroup Appraisals UAAR File No. # F F Area & Regional Analysis & Trends Cont'd erosion has occurred. A considerable number of non-producing oil wells are unplugged. Potential buyers consider these as a liability and can cost in excess of 3,000 to plug. An ample number of comparable sales are available to substantiate the discounts and value range for this type of land. Condition of grasses, fences, and water sources are other important factors affecting land values. Past management practices vary from property to property and adjacent land values may vary as much as 100 to 150 per acre as a result. Building new fences and ponds, spraying weeds, brush and trees, and rejuvenating pasture grasses can be very expensive and time consuming. Area land prices bottomed out in and have been rising steadily since. High energy prices and historically high interest rates, along with low cattle and commodity prices caused a large drop in land prices in the early 1980s. Conversely, with a change in these factors during the late 1980s and early 1990s, land prices have been rising. Subsequent decreases in interest rates to historic low levels and an erratic stock market are further factors that strengthened the land market from early twenty-first century. The local real estate market for land has seen rising values the past decade with sales activity in early 2015 representing all-time market highs saw a reduction in land auctions, with more land offerings shifted to listings. Regionally, market transactions have slowed and values appear to be leveling due in part to decreasing oil and grain prices along with fears of increasing interest rates. The most recent land sales suggest buyers are more particular about land quality and condition; therefore well maintained land continues to command premium values, while tracts with below average grass or considerable deferred maintenance are not meeting market expectations. Recreational land continues to receive strong interest; however, buyers are more particular about land quality as it relates to land diversity such as live water and timber versus scattered brush. Auction results have been more wide ranging this past year or so; therefore current conditions are best described as uncertain, but off recent historic highs. MARKETING AND EXPOSURE TIME: It is our opinion that a day exposure period for a full ownership interest, which is the normal market exposure time, would be considered reasonable for the subject. This estimated exposure period has been determined by the current typical exposure periods for full ownership interest properties in the area AgWare, Inc. All Rights Reserved. Page 8 of 63 85

86 SunGroup Appraisals UAAR File No. # F F ASSUMPTIONS & CONDITIONS EXTRAORDINARY ASSUMPTIONS: An extraordinary assumption is defined as an assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser's opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property such as market conditions or trends; or about the integrity of data used in an analysis. An extraordinary assumption may be used in an assignment only if: it is required to properly develop credible opinions and conclusions; the appraiser has a reasonable basis for the extraordinary assumption; use of the extraordinary assumption results in a credible analysis; and the appraiser complies with the disclosure requirements set forth in USPAP for extraordinary assumptions. In connection with developing this "Real Property Appraisal" of the subject, the following Extraordinary Assumptions, approved by the Client, were made: it is assumed there are no environmental hazards that would affect the assigned value in this report. HYPOTHETICAL CONDITIONS: USPAP defines a hypothetical condition as; that which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends, or about the integrity of data used in analysis. A Hypothetical Condition may be used in an assignment only if: use of the Hypothetical condition is clearly required for legal purposes, for purposes of reasonable analysis, or for purposes of comparison; use of the Hypothetical condition results in a credible analysis; and the appraiser complies with the disclosure requirements set forth in USPAP for Hypothetical conditions. In connection with developing this "Real Property Appraisal" of the subject, the following Hypothetical Conditions were made. No hypothetical conditions were relied upon in this report AgWare, Inc. All Rights Reserved. Page 9 of 63 86

87 SunGroup Appraisals UAAR File No. # F F PROPERTY DESCRIPTION ACRES: 79.7 taxable acres, rounded to 80 acres in this report. LOCATION & ACCESS: This property is located 2 miles southeast of El Dorado. Access is average by way of graveled road along SE 20th Street, running along the south side of the property. LEGAL DESCRIPTION: The East Half of the Southeast Quarter of Section Seven (7), Township Twenty-six (26) South, Range Six (6) East of the 6th P.M., Butler County, Kansas. Butler County Parcel Numbers taxable acres 2016 taxes Aerial Photo AgWare, Inc. All Rights Reserved. Page 10 of 63 87

88 SunGroup Appraisals UAAR File No. # F F DESCRIPTION CONT'D PROPERTY DESCRIPTION: This is an unimproved tract of land containing 80 acres, more or less. It is a stand-up eighty, rectangular in shape, running lengthwise north and south. Terrain is level to moderately sloping, becoming more sloping at the north end. Land use is entirely native grass pasture for livestock grazing. Grass stand ranges from fair to average, a little weaker at the north end. Pasture condition leans toward fair overall due to considerable scattered trees and intermittent black berry bushes. Additionally, the property is very rocky with numerous large rocks throughout and significant rock out croppings along ridge lines. One sink hole was evident in the southwest corner along road. Water is provided to grazing livestock by one stock pond in the northwest corner, which appeared quite low at the time of inspection. Fences are barbed wire supported by steel posts ranging from fair to good, but average overall. MINERALS: No mineral production was observed and according to KGS (Kansas Geological Survey) website, the subject property is not leased. Mineral rights are assumed to be intact and unleased. HAZARDS & DETRIMENTS: No detriments or hazards were observed. The appraisers are clearly not environmental experts. The appraisers assume that there are no adverse easements, or other detriments. If adverse easements, or other hazards or detriments are discovered, it may affect the value of the appraisal. FLOOD HAZARD DATA: The subject property is unimproved; therefore, flood hazards were not researched. ZONING: The subject is located in El Dorado's jurisdiction and zoned AR, or Ag Residence. This designation conforms to the county's Ag-40 and allows typical agricultural uses along with limited residential development with minimum of forty acres AgWare, Inc. All Rights Reserved. Page 11 of 63 88

89 SunGroup Appraisals UAAR File No. # F F HIGHEST & BEST USE Highest and best use is defined as "that use which will yield the greatest net return to the land in the foreseeable future, or that legal use which will yield to the land the highest present value." The 9th Edition of Real Estate Appraisal more specifically defines highest and best use as: "That reasonable probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and which results in the highest land value. The concept of highest and best use represents the premise upon which value is based. In the context of most probable selling price (market value), another appropriate term to reflect the highest and best use would be the most probable use. In the context of investment value, an alternative term would be the most profitable use." The definition forms the essence of the highest and best use analysis. The property's use must be: 1. legally permissible; 2. physically possible; 3. financially feasible; 4. maximally productive. Legally Permissible The immediate area is zoned AR, or Ag Residential which permits livestock grazing, farming, oil production and limited rural residential use. Physically Possible The property can physically be used for typical agriculture practices as well as for limited rural residential development; however, the stony soil and proximity to prison may be factors limiting development appeal. Financially Feasible All of the land in the immediate surroundings is used for agriculture with limited rural residential development. Commercial and dense residential development uses are not considered feasible without further zoning measures. Agriculture use is a financially feasible use. Maximally Productive The subject property is considered most productive as agricultural land for grazing livestock. Summary: As vacant land, highest and best use is agricultural land for pasture. The subject is unimproved AgWare, Inc. All Rights Reserved. Page 12 of 63 89

90 SunGroup Appraisals UAAR File No # F F Photos View east along SE 20th Street View of sink hole in the southwest corner with scattered trees in back ground AgWare, Inc. All Rights Reserved. View from the southwest corner looking north View of native grass pasture along the south end with considerable scattered trees throughout the parcel. Page 13 of 63 90

91 SunGroup Appraisals UAAR File No # F F Photos View of native grass near the center of the property. View of native grass at the north end. Tree-lined ravine in the back ground is adjacent property. View of low pond in back ground and rocky out-cropping in the foreground. View of large black berry bush near the middle of the tract. Black berry patches are invasive to native grass and should be sprayed as part of on going pasture management AgWare, Inc. All Rights Reserved. Page 14 of 63 91

92 SunGroup Appraisals UAAR File No. # F F FSA Map AgWare, Inc. All Rights Reserved. Page 15 of 63 92

93 SunGroup Appraisals UAAR File No. # F F Soil Map AgWare, Inc. All Rights Reserved. Page 16 of 63 93

94 SunGroup Appraisals UAAR File No. # F F APPRAISAL PROCESS The appraisal process is an orderly procedure of gathering information from the market which will lead to an estimate of value. This information is obtained from many sources, but the best source is through recent sales of similar type properties. All sales used are examined and confirmed by either the buyer, the seller or a party knowledgeable to the transaction. All pertinent facts from the sales are analyzed, classified and interpreted for use in the approaches to value. Three approaches to value which should be considered when arriving at an estimate of value for real estate are: (1) The Sales Comparison; (2) The Cost Approach, and (3) The Income Approach. Following is a brief summary of each approach to value: (1) Sales Comparison Approach The Sales Comparison Approach is based on the Principle of Substitution whereby an informed purchaser would pay no more for a property than the cost to him of acquiring an existing property with the same utility including amenities. This is a direct reflection of the actions of buyers and sellers through comparable sales. Value is always seen through the eyes of the typically informed purchaser. The appraiser must select comparable sales and have complete knowledge of sales. The appraiser's knowledge of sales ultimately determines the quality of the appraisal. Selection of sales is based upon highest and best use, which needs to be consistent between the subject property and the comparable. (2) Cost Approach The Cost Approach is an appraisal analysis which is based on the premise that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility as the subject property. It is a method in which the value of a property is indicated by estimating the current reproduction or replacement costs of the improvements, deducting there from the estimated depreciation, then adding the value of the land as determined from the market comparison of recent land sales. Estimating the present contributory value of the building improvements on a subject property is an important factor in the Cost Approach. Building costs serve as the upper limit on the value of buildings or improvements because usually no one will pay more for existing buildings than it would cost to reconstruct them. Thus, estimation of building costs is an important component of this approach. Two different concepts may be used in the estimation of building costs: reproduction cost or replacement cost. Reproduction cost is the cost of constructing a replica of a building or improvement, based on prices as of the date of the appraisal and using the same or closely related materials. Replacement cost is the cost of constructing a building or improvement, based on prices, materials, and design as of the date of the appraisal that has the same utility or performs the same or similar functions as the original one. The older an improvement is the less reliable the cost approach is because of the difficulty in estimating depreciation. The Cost Approach can be meaningless on a property that is not developed to its highest and best use. The more highly developed or improved a property is the less likely it will be that comparable sales are available. Therefore, more reliance must be placed upon the Cost Approach. The Cost Approach is only as accurate as the appraiser's ability to estimate depreciation AgWare, Inc. All Rights Reserved. Page 17 of 63 94

95 SunGroup Appraisals UAAR File No. # F F Appraisal Process - Cont'd (3) Income Approach The Income Capitalization Approach to value is a procedure through which anticipated economic benefits are converted into a value estimate. The Income Capitalization Approach reflects the relationship between the annual net earnings of an interest in property and the value or sale price of that interest. It is based on the principle of anticipation. A key to proper application of this approach, as with the other approaches, is basing it on actual market activity and developing it as the typical buyer views returns from the property. Capitalization rate is the term used to indicate the relationship between net market rent (or net operating income) and market value. The appraiser utilizes the following formulas in this approach. Value = Net Income Cap Rate Cap Rate = Net Income Value AgWare, Inc. All Rights Reserved. Page 18 of 63 95

96 SunGroup Appraisals UAAR File No # F F VALUATION SECTION Cost Approach (Omitted) Sales Comparison Approach Income Approach Reconciliation of Value AgWare, Inc. All Rights Reserved. 96

97 SunGroup Appraisals UAAR File No. # F F Cost Approach The Cost Approach to value was not developed as the property is homogenous in land use and this tract is unimproved with no improvements to replicate. If this approach had been conducted, it would have been a duplicate of the Sales Comparison Approach. Therefore the Cost Approach was not considered necessary or meaningful at arriving at market value in this report. VALUE INDICATED BY THE COST APPROACH: AgWare, Inc. All Rights Reserved. NA Page 20 of 63 97

98 SunGroup Appraisals UAAR File No # F F Sales Comparison Approach (1-5) Sale Data Sale Data Grantor (Seller) Grantee (Buyer) Source Date Eff Unit SizeUnit Sale Price Finance Adjusted CEV Price Multiplier GRM Expense Ratio Subject Sale #1 Sale #2 1 2 Sale #3 3 Sale #4 Clingan, Milton Robert B. Held Trust Bannon Trust Breedlove, Leon Elkhorn Ranches, LLC David Piha McCoy, Erin Auction Broker Contract MLS Acre , , ,000 1,120,000 Conv Conv Conv Cash 468, , ,000 1,120,000 MHW Enterprises, Inc. Eff Sale #5 4 5 Trombla, Richard etal Rock Creek, LP Auction ,940 Cash 370, The Appraiser has cited sales of similar property to the subject and considered these in the market analysis. The description below includes a dollar adjustment reflecting market reaction to those items of significant variation between the subject and the sales documented. When significant items are superior to the property appraised, a negative adjustment is applied. If the item is inferior, a positive adjustment is applied. Thus, each sale is adjusted for the measurable dissimilarities and each sale producing a separate value indication. The indications from each sale are then reconciled into one indication of value for this approach. CEV Price Acre 1, , , , , , , , , , , LAND AND IMPROVEMENT ADJUSTMENTS Land Adjustment Impvt. Adjustment Adjusted Price , , TIME ADJUSTMENTS X Yr X Smpl Auto Mo Periods Cmp Rate X Man Time Adjustment Time Adj. Price , , OTHER ADJUSTMENTS Sale Comparison Condition Access Fair Adjustment Average Adjustment Similar Slightly Better Similar Similar Similar Similar Similar Similar Similar Paved Better , ,707 Adjustment Adjustment Adjustment Net Adjustments ADJUSTED PRICE 1,694 1,968 2,101 AnalysisComments: (Discuss positive and negative aspects of each sale as they affect value) We've researched the local market and included the best five comparable sales in the grid above to help illustrate the value of the subject property in the Sales Comparison Approach. These comparables were selected based on their similarity to the subject in location, land use and overall market appeal. The appraisers utilize the grid to conduct this approach. The attributes of the subject are listed to the left with the best sales to the right. Comparables are adjusted to the subject. An upward adjustment is made for inferior qualities, while a downward adjustment is made for superior qualities. No adjustment relays equal contribution. Support for land mix adjustments is provided in the addenda. (See next page) Sales Comparison Approach Summary: 1, Property Basis (Value Range): to Acre X 1, Acre = Unit Basis: NA NA Multiplier Basis: X (multiple) = AgWare, Inc. All Rights Reserved. 2, , Sales Comparison Indication: 136,000 Page 21 of 63 98

99 SunGroup Appraisals UAAR File No. # F F Additional Comments Comments Cont'd: The subject property is an average sized tract of native grass pasture with graveled access. It is below average in appeal due to considerable scattered trees, rock out-croppings and adjacent proximity to Federal Penitentiary which most likely limits appeal to agricultural use for grazing livestock. The appraisers have focused the comparable search on agricultural properties, meaning that the buyer s motivation was primarily for agricultural production and not future construction of a rural residence. Sales 1-4 are all grass tracts that vary somewhat from the subject in pasture condition. They are generally considered weak as candidates for rural residential development. Sale 1 is the most recent example of a clean tract of grass, but was more distant from El Dorado from southeast Butler County near Latham. This was considered a low sale at the time. Sale 2 is a quarter section about eight miles southeast of the subject. Half of this tract includes scattered brush, while the other half is clear and mowed for hay. Sale 3 is an all grass tract near Smileyberg. It too is clear of trees in the north and quite cluttered with trees and black berry bushes in the south half. Sale 4 is a full section of native rangeland located about ten miles southeast of the subject. This sale is adjusted down slightly for land mix due to about eleven acres of a shared watershed lake. This property is cited because it is primarily native grass rangeland with considerable scattered brush. Sale 5 is a dated transaction of land adjacent to the subject and the prison. It was perhaps slightly better in grass condition because of recent brush clearing; however, some brush and brush piles remained, and the appraisers feel that location played a greater influence. Our research indicates that the grass market has increased and then decreased in this market, for net time adjustment to Sale 5 of a six percent. Conversely, this sale is superior to the subject with paved frontage, resulting in a negative five percent adjustment for access. Adjusted sales suggest a per acre value range for the subject between 1,637 and 2,101, with a mean per acre value of 1,821. Although dated, the appraisers feel that Sale 5 is the best indicator for the subject following time and access adjustment because it better reflects the subject in location and land condition. The remaining comparables are more recent and bracket this indication. After careful consideration given to all the data, our final value opinion based on the Sales Comparison Approach is 1,700acre; or 136, AgWare, Inc. All Rights Reserved. Page 22 of 63 99

100 SunGroup Appraisals UAAR File No # F F Income Approach Basis of Income Estimate: Cash X Share Unit Gross Income Estimate Income Source Pasture Units Expenses Yield 1.0 Rent: FAMC Total Production See Attached CashShareOwner's Income Stabilized Unit Gross Income Share % , mo., yr. Income 1,920 Stabilized Gross Income = 0 1,920 (Typical area rental terms and conditions) Cash rental rates are gathered from the records of the Kansas Farm Management Associations, supported by area sales. Expenses include estimated real estate taxes, five percent of gross income for maintenance and one dollar per acre for management. The acreage for each land class has been rounded to the nearest acre; a typical technique for this market area and the state of Kansas. Income was developed based on current use of the subject tract. Market rent is used rather than contract rent, and may be adjusted for property condition. The comparable sales have been treated the same way. Income was applied to any acreage large enough to be rented in this market area. Comments: Expense Items: Cap Rate Info Stabilized Measure Acre Improvements Included in Land Rent OwnerOperator Real Estate Tax Insurance Maintenance Management Sale Date Additional Expenses: Size Additional Expenses: Impvt % Additional Expenses: Total Expenses = Gross Income 6,900 3,900 4,000 15,825 5,232 Exp. Ratio % % % % % % % Net Income 5,793 3,288 3,326 13,566 4,523 ( %) 302 CEV Price 468, , ,000 1,120, ,940 Cap Rate 1.24 % 1.06 % 0.99 % 1.21 % 1.22 % % % Comparables suggest a range in Capitalization Rates for the subject from 0.99% to 1.24%, with a mean rate of 1.14%. The appraisers place greater weight on Sales 1, 4 and 5, with greater reliance given to Sale 5 because it is most like the subject in location and condition. AnalysisComments: Net Income of 1,618 divided by a cap rate of 1.22% results in a value opinion of 132,623; or 133,000 rounded Total Deeded Acres: 1,920 Gross Income: = Expenses: ( ) 1,618 Net Income: = AgWare, Inc. All Rights Reserved. Acre Acre Acre Net Income Cap Rate 1, = Indicated Value 132,623 % Income Approach Indication = 133,000 Page 23 of

101 SunGroup Appraisals UAAR File No. # F F Reconciliation of Value RECONCILIATION AND FINAL VALUE ESTIMATE: The appraisers have studied the subject property and its real estate market. Consideration was given to all three approaches to value. This process was completed to arrive at a value for the subject property. Following is a summary of the value indicators of each of the approaches and analysis: Cost Approach Sales Comparison Income - NA 136, ,000 Cost Approach The Cost Approach was not developed as the subject is homogenous in land use, and there were no improvements to replicate. Conducting this approach would simply be the duplication of the Sales Approach; therefore, it was not necessary for arriving at market value. Sales Comparison Approach The Sales Comparison Approach represents a probable estimate, given market factors and conditions. This approach recognizes current market conditions, and is generally considered the best indicator for valuing land. The problem with this approach is that sales comparing closely to the subject are very limited. We were able to obtain and verify a selection of sales for this approach. Income Approach The Income Approach is an estimate of value of the subject property analyzed strictly from the income stream, which is produced from a property. It does not take into account that purchasers of properties are not acquiring the property primarily for its income producing capabilities. Purchasers also buy property anticipating future land appreciation, pride of ownership, and a hedge against future inflationary trends. This approach to value was developed mostly as a check against the Sales Comparison Approach. Final Value Conclusion Both the Sales Comparison and Income Approaches to value were developed in this assignment, and each is reasonably supportive of the other. The Cost Approach was not considered necessary, and therefore omitted. In the final value opinion, the appraisers rely fully upon the Sales Comparison Approach, with confidence added by the Income Approach. This property is saleable to local buyers, and the reader must understand that this appraisal is being conducted during a period of uncertain times, down from record high land values. FINAL OPINION OF VALUE IS: AgWare, Inc. All Rights Reserved. 136, Page 24 of

102 SunGroup Appraisals UAAR File No. # F F Assumptions and Limiting Conditions The term Appraiser as referenced herein refers to the appraiser preparing the report, the appraiser's employer for purposes of this appraisal, and other employees of the employer andor appraiser. 1. LIMIT OF LIABILITY: The liability of the Appraiser is limited to the Client and to the fee collected with no liability or obligation to any other third party. If this report is placed in the hands of anyone other than the Client, the Client shall make such party aware of all limiting conditions and assumptions of the assignment and related discussions. The appraiser assumes no responsibility for any costs incurred to discover or correct deficiencies of any nature present in the property. 2. CONFIDENTIALITY: This appraisal is to be used only in its entirety; no part is to be used without the entire report. All conclusions and opinions concerning the analysis set forth in the report were prepared by the specific appraiser(s) whose signature(s) appear(s) on the appraisal report, unless indicated otherwise in the report. No change in the report shall be made by anyone other than this appraiser. The Appraiser shall have no responsibility if any such unauthorized change is made. The Appraiser shall not divulge the material contents of this report, analytical finding or conclusions, or give a copy of the report to anyone other than the Client or Client's designee as specified in writing, except as may be required by appraisal organizations to which the Appraiser belongs as they may request in confidence for ethics enforcement, or by court of law or other body with the power of subpoena. 3. INCLUSIONS: The valuation in this report is based on fee simple rights free and clear of all liens and encumbrances. 4. EXCLUSIONS: Value does not reflect mineral, gas, oil or similar rights that may exist in whole or in part unless specifically noted in the report. Furnishings, equipment, personal property, and business operations, except as indicated in the report, have been disregarded with only the real estate being considered in the value estimate. 5. LEGAL MATTERS: The Appraiser assumes no responsibility for matters of a legal nature affecting the property appraised or the title thereto, nor does the appraiser render any opinion as to the title, which is assumed to be good and marketable. 6. MANAGEMENT OF THE PROPERTY: The property is appraised as though under prudent and competent ownership and management. Further, the appraisal is based on the premise that there is full compliance with all applicable federal, state and local statute andor environmental regulations, unless otherwise stated in the report. 7. HAZARDOUS OR TOXIC MATERIALS: This report does not include an opinion on the presence or absence of any hazardous or toxic materials, toxic waste, or any other substance contamination of buildings, improvements, air, water, plants, or soil. The Appraiser accepts no responsibility to discover or report any contaminated site, even if it is obvious. Consult a qualified professional to identify and evaluate the presence of contamination on the property. 8. HIDDEN COMPONENTS: The Appraiser assumes that there are no hidden or unapparent conditions of the property, subsoil, or structures which would render it more or less valuable. The Appraiser assumes no responsibility for such conditions or for engineering which might be required to discover such factors AgWare, Inc. All Rights Reserved. Page 25 of

103 SunGroup Appraisals UAAR File No. # F F Assumptions and Limiting Conditions 9. LEGAL DESCRIPTION AND EXHIBITS: The legal description of the property as provided by the Client is assumed to be accurate. Any plats, maps or sketches in this report show approximate dimensions and are included to assist the reader in visualizing the property. Such items are not to scale and are not surveys unless shown from a separate surveyor. 10. INFORMATION USED: No responsibility is assumed for the accuracy of information, estimates and opinions provided prior to entering into transactions that would significantly impact the property or would require a substantial commitment of funds. 11. COURT TESTIMONY: The Appraiser is not required to give testimony or appear in court because of having made this Appraisal with reference to the property in question, unless arrangements have been made previously therefore. 12. COMPONENT VALUES: The distribution of the total valuation in this report between land and improvements applies only under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal and are invalid if used. 13. TIME EFFECT ON VALUES: The market value estimated and the costs and other estimates used in arriving upon the estimate of value are as of the date of the appraisal. Because the markets upon which these estimates and conclusions are based are dynamic in nature, they are subject to change over time. Further, the appraisal report and value estimates are subject to change if future physical, legal, financial and other conditions differ from conditions on the appraisal date. 14. CHANGES AND MODIFICATIONS: The appraiser reserves the right to alter statements, analysis, conclusions or value estimates in the appraisal if facts become known that are pertinent to the appraisal process that were unknown to the appraiser at the time of report preparation. 15. DISTRIBUTION AND USE OF REPORT: Neither all nor any part of the contents on this Report, or copy thereof shall be distributed without the prior written consent of the Appraiser. Possession of this report or any copy thereof does not carry with it the right of publication, nor may it be used for other than its intended use. Neither all nor any part of the appraisal report shall be conveyed to the general public through advertising, public relations, news, sales or other media, without the written consent and approval of the Appraiser. The physical report(s) remain the property of the Appraiser for the use of the Client? the fee being for the analytical services only. 16. FEE: The fee for this appraisal or study is for the service rendered and not for the physical report or the time spent preparing the physical report itself. The fee for provision of this report is for analytical services provided by the Appraiser and has no relation to the final values report. 17. ACCEPTANCE OF, ANDOR USE OF, THE APPRAISAL REPORT BY THE CLIENT OR ANY THIRD PARTY CONSTITUTES ACCEPTANCE OF THE ABOVE CONDITIONS AgWare, Inc. All Rights Reserved. Page 26 of

104 SunGroup Appraisals UAAR File No. # F F Certifications The Appraiser certifies that to the best of my knowledge and belief: 1) The facts and data reported by the appraiser and used in the review process are true and correct. 2) The analyses, opinions, and conclusions in this report are limited only by the assumptions and limiting conditions stated in the review report and is my personal, impartial, and unbiased professional analysis, opinions, and conclusions. 3) I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. 4) I have no bias with respect to the subject property that is the subject of this report or to the parties involved in this assignment. 5) My engagement in this assignment was not contingent upon developing or reporting predetermined results. 6) My compensation is not contingent on any action or event resulting from the analysis, opinions, or conclusions in, or the use of, this review. 7) My analyses, opinions, and conclusions were developed and this report was prepared in conformity with the Uniform Standards of Professional Appraisal Practice. 8) I have physically viewed the subject property of the report. 9) Sean W. Schwartz provided significant assistance to the person signing this certification. 10) My appraisal is not based in whole or in part upon the race, color, or national origin of the owners or occupants of the properties in the vicinity of the property appraised. 11) All contingent and limiting conditions are contained herein. 12) This report and the valuation process have been made in conformity with the requirements of the Code of Ethics of the American Society of Farm Managers and Rural Appraisers. 13) This report complies with Title XI of the Federal Financial Institutions Reform, Recovery, and Enforcement Act of 1989 known as FIRREA as implemented through 12 CFR ) As required by the Conduct Section of the Ethics Rule of USPAP, I have not provided a previous appraisal service for the subject property within the past three years. David L. Sundgren, G-267 February 22, AgWare, Inc. All Rights Reserved. Page 27 of

105 SunGroup Appraisals UAAR File No. # F F Certifications I certify that, to the best of my knowledge and belief: 1) The statements of fact contained in this report are true and correct. 2) The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. 3) I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. 4) I have not performed a previous appraisal service for the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. 5) I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 6) My engagement in this assignment was not contingent upon developing or reporting predetermined results. 7) My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 8) My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 9) I have made a personal inspection of the property that is the subject of this report. 10) David L. Sundgren provided significant real property appraisal assistance to the person signing this certification. 11) The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. 12) The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 13) As of the date of this report, I have completed the Standards and Ethics Education Requirements for Practicing Affiliates of the Appraisal Institute. Sean W. Schwartz, R-2852 February 22, AgWare, Inc. All Rights Reserved. Page 28 of

106 SunGroup Appraisals UAAR File No # F F ADDENDUM Comparable Sales Map Comparable Sales Sale Adjustment Sheets LicenseResumes Invoice AgWare, Inc. All Rights Reserved. 106

107 SunGroup Appraisals UAAR AgWare, Inc. All Rights Reserved. File No. # F F 107

108 SunGroup Appraisals UAAR F F File No # Database # Sale # BU Unimproved Sale MHW Enterprises, Inc. 468,520 Pasture Grantor Sales Price Property Type Breedlove, Leon Lvstk Grazing Grantee Other Contrib. Primary Land Use ,520 Min Production No Deeded Acres Net Sale Price , % Min Ownrshp 100% No Prod Sale DateDOM Deeded Acre Conv Min Multiplier Prior Sale Date Financing Improvements None Prior CEV Price % Fin. Adj. Schwartz 468,520 Water Source Ponds Analysis Code CEV Price Auction Acre Rec. Appeal None Source SCA Unit Type Expand Watershed Lake No Motivation Eff. Unit Size Agriculture 1, Power Line None Highest & Best Use SCA Unit Cons. Easmnt. None Address Multiplier Unit Special Feature NA City Multiplier No. Butler County Special Feature NA County Legal Access KS GravelRock Verification Doc County Records StateZip Physical Access Average CAMA # View Tax IDRecording RegionAreaZone Latham None 1 29S 7E Location Utilities SecTwpRge Legal Description: Lots 1-4 & the Southwest Quarter of the Northwest Quarter and the South Half of the Northeast Quarter, all in Section 1, Township 29 South, Range 7 East of the 6th P.M., Butler County, Kansas. Subject to rights-of-way. Sale Analysis Index # Land Mix Analysis Land-Mix Analysis Land Use Dry Crop A Dry Crop B CRPTillable Grass Bottom Cropland Pasture A Watershed Lake RecreationalWW Building Site Roads & Waste Ratios Acres % % % % % % % % % % Totals CEV Price 468,520 Acre Ac. 2, Ac. 2, Ac. 2, Ac. 2, Ac. 1, Ac. 7, Ac. 2, Ac. 3, Ac. Ac Ac. 1, Land Contribution Unit Size Unit Type 468,521 Unit Total Unit Value X X X X 468,521 X X X X X X 468,521 X -1 = Improvement Contribution Income Analysis Income Analysis Income Estimate Basis: Income Source Actual X Estimated Pasture Improvements X Units Cash Unit Measure Acres Share Stabilized Yield 1.00 Improvements Included in Land Rent OwnerOperator Total Production CashShareOwner Income Stabilized Unit Gross Income Share % Income , ,900 mo Expense Items: Expenses (cont.): 486 Real Estate Tax Insurance 345 Maintenance 276 Management 1,107 6,900 Total Expenses Stabilized G.I. = Expense Ratio 5, ,520 Net Income CEV Price = Cap Rate AgWare, Inc. All Rights Reserved. yr Stabilized Gross Income = Expenses (cont.): % Total Expenses = 1.24 % Net Income = Page 6,900 1, , of 63

109 SunGroup Appraisals UAAR Index # File No # Database # BU F F Sale # Improvement Analysis Improvement Analysis Item: Impt. #1 Impt. #2 Impt. #3 Impt. #4 Impt. #5 Impt. #6 Impt. #7 Impt. #8 Impt. #9 Impt. #10 Type Size Unit Utility Condition Age Remaining Life RCNUnit RCN % Physical Depreciation RCN Remainder After Phys. Depr. % Functional Obsolescence RCN Rem. After Phys.Funct. Depr. % External Obsolescence Total Impt. Contribution Contribution Unit Physical Depreciation Total RCN % Functional Obsolescence % External Obsolescence % Total Depreciation Total Improvement Contribution: Improvement As % of Price % % Comments An unimproved tract of tame and native grass pasture located a mile or so northeast of Latham. The property is slightly irregular in shape, but mostly rectangular with terrain being level to gently sloping. Land use is entirely grass land with approximately 89 acres being brome grass for hay production with the remaining 187 acres being native grass rangeland for grazing livestock. Grass condition is average to good, with mostly new fence and two large stock ponds for water. Property was offered for sale at public auction on Buyer is a large operator in the region with substantial holdings in the immediate area AgWare, Inc. All Rights Reserved. Page 32 of

110 SunGroup Appraisals UAAR Index # BU File No # Database # 1071 F F Sale # 1 Aerial Photo AgWare, Inc. All Rights Reserved. Page 33 of 63

111 SunGroup Appraisals UAAR Index # BU File No # Database # 1071 F F Sale # 1 Soil Map AgWare, Inc. All Rights Reserved. Page 34 of 63

112 SunGroup Appraisals UAAR F F File No # Database # Sale # BU Unimproved Sale Clingan, Milton 310,000 Pasture Grantor Sales Price Property Type Elkhorn Ranches, LLC PastureHay Grantee Other Contrib. Primary Land Use ,000 Min Production No Deeded Acres Net Sale Price , % Min Ownrshp 100% No Prod Sale DateDOM Deeded Acre Conv Min Multiplier NA Prior Sale Date Financing Improvements None Prior CEV Price % Fin. Adj. Schwartz 310,000 Water Source Ponds Analysis Code CEV Price Broker Acre Rec. Appeal Minor Source SCA Unit Type Establish Watershed Lake No Motivation Eff. Unit Size Agriculture 1, Power Line None Highest & Best Use SCA Unit Cons. Easmnt. None Address Multiplier Unit Special Feature NA City Multiplier No. Butler County Special Feature NA County Legal Access KS GravelRock Verification Doc Contract StateZip Physical Access Average CAMA # View Tax IDRecording RegionAreaZone Prospect None 23 26S 6E Location Utilities SecTwpRge Legal Description: SW4 of Section 23, Township 26 South, Range 6 East of the 6th P.M., Butler County, KS. Subject to ROW. Sale Analysis Index # Land Mix Analysis Land-Mix Analysis Land Use Dry Crop A Dry Crop B CRPTillable Grass Cropland Bottom Pasture Watershed Lake RecreationalWW Site Roads & Waste Ratios Acres % % % % % % % % % % Totals CEV Price 310,000 Acre Ac. 3, Ac. 2, Ac. 2, Ac. 4, Ac. 1, Ac. 7, Ac. 2, Ac. 3, Ac. Ac Ac. 1, Land Contribution Unit Size Unit Type 309,999 Unit Total Unit Value X X X X 307,511 X X X X 2,488 X X 309,999 X 1 = Improvement Contribution Income Analysis Income Analysis Income Estimate Basis: Income Source Actual X Estimated Pasture Improvements X Units Cash Unit Measure Acre Share Stabilized Yield 1.00 Improvements Included in Land Rent OwnerOperator Total Production CashShareOwner Income Stabilized Unit Gross Income Share % Income , ,900 mo Expense Items: Expenses (cont.): 257 Real Estate Tax Insurance 195 Maintenance 160 Management 612 3,900 Total Expenses Stabilized G.I. = Expense Ratio 3, ,000 Net Income CEV Price = Cap Rate AgWare, Inc. All Rights Reserved. yr Stabilized Gross Income = Expenses (cont.): % Total Expenses = 1.06 % Net Income = Page 3, , of 63

113 SunGroup Appraisals UAAR Index # File No # Database # BU F F Sale # Improvement Analysis Improvement Analysis Item: Impt. #1 Impt. #2 Impt. #3 Impt. #4 Impt. #5 Impt. #6 Impt. #7 Impt. #8 Impt. #9 Impt. #10 Type Size Unit Utility Condition Age Remaining Life RCNUnit RCN % Physical Depreciation RCN Remainder After Phys. Depr. % Functional Obsolescence RCN Rem. After Phys.Funct. Depr. % External Obsolescence Total Impt. Contribution Contribution Unit Physical Depreciation Total RCN % Functional Obsolescence % External Obsolescence % Total Depreciation Total Improvement Contribution: Improvement As % of Price % % Comments An essentially unimproved tract of land located in southeast Butler County, approximately seven miles southeast of El Dorado. The tract is square in shape with terrain being level to gently sloping. Land use is all native grass pasture with the north 80 acres being fenced for grazing livestock and contains considerable scattered trees and brush along with a home site. Improvements are fully depreciated with no contributory value perceived. Buyer intends on demolishing house which is in a state of disrepair. The south 80 acres is native grass hay meadow except for about 7 acres in the very southwest corner being timber and hedgerow. Fences are barbed wire supported by wood and steel posts in fair to average condition, rated as low average overall. Site utilities include rural water and electricity AgWare, Inc. All Rights Reserved. Page 36 of

114 SunGroup Appraisals UAAR Index # BU File No # Database # 1072 F F Sale # 2 Aerial Photo AgWare, Inc. All Rights Reserved. Page 37 of 63

115 SunGroup Appraisals UAAR F F File No # 3 Unimproved Sale Robert B. Held Trust 336,000 Pasture Grantor Sales Price Property Type David Piha GrazingHay Grantee Other Contrib. Primary Land Use ,000 % Min. Ownership 100% No Prod. Deeded Acres Net Sale Price , Min Production None Sale DateDOM Deeded Acre Conv Min Multiplier NA Prior Sale Date Financing Improvements No Contr. Prior CEV Price % Fin. Adj. Schwartz 336,000 Water Source Pond Analysis Code CEV Price Contract Acre Rec Appeal Minor Source SCA Unit Type Expand Zoning Ag-80 Motivation Eff. Unit Size Lvstk Grazing 2, Power Line No Highest & Best Use SCA Unit Water Shd Lake No Address Multiplier Unit Cons Easmnt No City Multiplier No. Butler County Verification Doc Mr. Piha County Legal Access KS GravelRock Verification Doc Cov# StateZip Physical Access Average CAMA View Tax IDRecording RegionAreaZone Rock Creek None 9 29S 5E Location Utilities SecTwpRge Legal Description: The Northwest Quarter (NW4) in Section Nine (9), Township Twenty-nine (29) South, Range Five (5) East of the 6th P.M., Butler County, Kansas. Subject to road right-of-way. Sale Analysis Index # 16.KS Database # Sale # 881 Land Mix Analysis Land-Mix Analysis Land Use Dry Crop A Dry Crop B CRPTillable Grass Cropland Bottom Pasture Watershed Lake RecreationalWW Building Site Roads & Waste Ratios Acres % % % % % % % % % % Totals CEV Price 336,000 Acre Ac. 2, Ac. 2, Ac. 2, Ac. 3, Ac. 2, Ac. 9, Ac. 2, Ac. 4, Ac. Ac Ac. 2, Land Contribution Unit Size Unit Type 336,001 Unit Total Unit Value X X X X 335,411 X X X X 590 X X 336,001 X -1 = Improvement Contribution Income Analysis Income Analysis Income Estimate Basis: Income Source Actual X Estimated Pasture Meadow Improvements X Units Cash Unit Measure Acre Acre Share Stabilized Yield Improvements Included in Land Rent OwnerOperator Total Production CashShareOwner Income Stabilized Unit Gross Income Share % Income , , , ,125 mo Expense Items: Expenses (cont.): 314 Real Estate Tax Insurance 200 Maintenance 160 Management 674 4,000 Total Expenses Stabilized G.I. = Expense Ratio 3, ,000 Net Income CEV Price = Cap Rate AgWare, Inc. All Rights Reserved. yr Stabilized Gross Income = Expenses (cont.): % Total Expenses = 0.99 % Net Income = Page 4, , of 63

116 SunGroup Appraisals UAAR File No # Index # 16.KS Database # F F Sale # Improvement Analysis Improvement Analysis Item: Impt. #1 Impt. #2 Impt. #3 Impt. #4 Impt. #5 Impt. #6 Impt. #7 Impt. #8 Impt. #9 Impt. #10 Type Size Unit Utility Condition Age Remaining Life RCNUnit RCN % Physical Depreciation RCN Remainder After Phys. Depr. % Functional Obsolescence RCN Rem. After Phys.Funct. Depr. % External Obsolescence Total Impt. Contribution Contribution Unit Physical Depreciation Total RCN % Functional Obsolescence % External Obsolescence % Total Depreciation Total Improvement Contribution: Improvement As % of Price % % Comments An unimproved tract of land containing 160 acres, more or less. It is square in shape with terrain being level to gently sloping, having an overall grade from north to southwest. Land use is entirely grass land for livestock grazing and hay production. It breaks out at 30 acres native hay meadow; 15 acres Brome hay, and remaining 115 acres as native grass pasture for livestock grazing. Grass stand ranges from fair to average, but is a little weaker than average overall. Go back area is typically weedy, especially through the west middle and includes numerous small trees starting along the north edge. The south half of the tract, west of hay meadow has a series of ponds connected by a wet weather slough with considerable scattered trees and brush throughout. Additionally, numerous wild black berry bushes have established in this grazing area. A windmill and tank, along with several stock ponds supply water to grazing livestock. Perimeter and cross fencing is barbed wire supported by wood and steel posts in fair to average condition. There is an old leanto storage shed between pasture and native hay meadow; however, this structure is heavily depreciated with no contributory value to the land. Buyer is long time land tenant and well versed in local values. Property was not offered on the open market; however, sale price is viewed as market value based on condition AgWare, Inc. All Rights Reserved. Page 39 of

117 SunGroup Appraisals UAAR Index # 16.KS File No # Database # 881 F F Sale # 3 Aerial Map AgWare, Inc. All Rights Reserved. Page 40 of 63

118 SunGroup Appraisals UAAR F F File No # Database # Sale # BU Unimproved Sale Bannon Trust 1,120,000 Pasture Grantor Sales Price Property Type McCoy, Erin Lvstk Grazing Grantee Other Contrib. Primary Land Use ,120,000 Min Production NA Deeded Acres Net Sale Price , % Min Ownrshp 100% No Prod Sale DateDOM Deeded Acre Cash Min Multiplier NA Prior Sale Date Financing Improvements Pens Prior CEV Price % Fin. Adj. Schwartz 1,120,000 Water Source PondsRavines Analysis Code CEV Price MLS Acre Rec. Appeal Minor Source SCA Unit Type Expand Watershed Lake Yes Motivation Eff. Unit Size Agriculture 1, Power Line None Highest & Best Use SCA Unit Cons. Easmnt. None Address Multiplier Unit Special Feature NA City Multiplier No. Butler County Special Feature NA County Legal Access KS GravelRock Verification Doc County Records StateZip Physical Access Average CAMA # View Tax IDRecording RegionAreaZone Prospect None 36 26S 6E Location Utilities SecTwpRge Legal Description: All of Section 36, Township 26 South, Range 6 East of the 6th P.M., Butler County, Kansas. Subject to ROW. Sale Analysis Index # Land Mix Analysis Land-Mix Analysis Land Use Dry Crop A Dry Crop B CRPTillable Grass Bottom Cropland Pasture Watershed Lake RecreationalWW Building Site Roads & Waste Ratios Acres % % % % % % % % % % Totals CEV Price 1,120,000 Acre Ac. 2, Ac. 2, Ac. 2, Ac. 3, Ac. 1, Ac. 8, Ac. 2, Ac. 3, Ac. Ac Ac. 1, Land Contribution Unit Size Unit Type 1,119,999 Unit Total Unit Value X X X X 1,019,993 X 94,481 X X X 5,525 X X 1,119,999 X 1 = Improvement Contribution Income Analysis Income Analysis Income Estimate Basis: Income Source Actual X Estimated Pasture Improvements X Units Cash Unit Measure Acre Share Stabilized Yield 1.00 Improvements Included in Land Rent OwnerOperator Total Production CashShareOwner Income Stabilized Unit Gross Income Share % Income , ,825 mo Expense Items: Expenses (cont.): 828 Real Estate Tax Insurance 791 Maintenance 640 Management 2,259 15,825 Total Expenses Stabilized G.I. = Expense Ratio 13,566 1,120,000 Net Income CEV Price = Cap Rate AgWare, Inc. All Rights Reserved. yr Stabilized Gross Income = Expenses (cont.): % Total Expenses = 1.21 % Net Income = Page 15,825 2, , of 63

119 SunGroup Appraisals UAAR Index # File No # Database # BU F F Sale # Improvement Analysis Improvement Analysis Item: Impt. #1 Impt. #2 Impt. #3 Impt. #4 Impt. #5 Impt. #6 Impt. #7 Impt. #8 Impt. #9 Impt. #10 Type Size Unit Utility Condition Age Remaining Life RCNUnit RCN % Physical Depreciation RCN Remainder After Phys. Depr. % Functional Obsolescence RCN Rem. After Phys.Funct. Depr. % External Obsolescence Total Impt. Contribution Contribution Unit Physical Depreciation Total RCN % Functional Obsolescence % External Obsolescence % Total Depreciation Total Improvement Contribution: Improvement As % of Price % % Comments A full section of land in southeast quadrant of Butler County. The property is square in shape with terrain being gently sloping to undulating, having an overall grade from north to south. Access is average by way of graveled roads along three sides. Land use is native grass pasture for livestock grazing. Grass stand ranges from fair to average with considerable scattered trees and brush throughout. Shallow ravines are more heavily tree-lined providing some habitat for wildlife. Fences are barbed wire supported by steel posts in mostly good condition. A nice newer livestock sorting pen was recently constructed at the north end of the property. Water is provided to grazing livestock by lake, ponds and wet weather ravines. Lake is estimated as the north 23 back water of a watershed lake, estimated at 10.7 acres of water surface was attributed to the subject. Grantor is the Jack Bannon Family Land & Cattle Co., LP. Some inner family transfers prior to sale AgWare, Inc. All Rights Reserved. Page 42 of

120 SunGroup Appraisals UAAR Index # BU File No # Database # 1074 F F Sale # 4 Aerial Photo AgWare, Inc. All Rights Reserved. Page 43 of 63

121 SunGroup Appraisals UAAR Sale Analysis Index # 14.KS Database # Sale # 82 File No # 5 Property Type Primary Land Use Min Production % Min Ownshp Min Multiplier Water Source Water Class Water Shd Lake Rec Appeal Verification Doc Cons. Easmnt. Trombla, Richard etal 370,940 Grantor Sales Price Rock Creek, LP Grantee Other Contrib ,940 Deeded Acres Net Sale Price , Sale DateDOM Deeded Acre Cash Prior Sale Date Financing Prior CEV Price % Fin. Adj. Patterson 370,940 Analysis Code CEV Price Auction Acre Source SCA Unit Type Expand Motivation Eff. Unit Size Livestock Ranch 1, Highest & Best Use SCA Unit Address Multiplier Unit City Multiplier No. Butler State County Legal Access KS Paved StateZip Physical Access Average View Tax IDRecording RegionAreaZone Prospect No Location Utilities SecTwpRge Legal Description: Pt of NW4 8-26S-06E see aerial and flyer of the 6th P.M. Butler County, Kansas F F Unimproved Sale Pasture Pasture No 100% Pond NA No No Realtor No 8 CAMA # 26S 06E Land Mix Analysis Land-Mix Analysis Land Use Dry Crop A Dry Crop B CRPTillable Grass Cropland Bottom Pasture Watershed Lake RecreationalWW Building Site Roads & Waste Ratios Acres % % % % % % % % % % Totals CEV Price 370,940 Acre Ac. 2, Ac. 2, Ac. 2, Ac. 3, Ac. 1, Ac. 5, Ac. 2, Ac. 3, Ac. Ac Ac. 1, Land Contribution Unit Size Unit Type 370,940 Unit Total Unit Value X X X X 369,533 X X X X 1,407 X X 370,940 X = Improvement Contribution Income Analysis Income Analysis Income Estimate Basis: Income Source Actual X Estimated Pasture Improvements X Units Cash Unit Measure Acre Share Stabilized Yield 1.00 Improvements Included in Land Rent OwnerOperator Total Production CashShareOwner Income Stabilized Unit Gross Income Share % Income , ,232 mo Expense Items: Expenses (cont.): 206 Real Estate Tax Insurance 283 Maintenance 220 Management 709 5,232 Total Expenses Stabilized G.I. = Expense Ratio 4, ,940 Net Income CEV Price = Cap Rate AgWare, Inc. All Rights Reserved. yr Stabilized Gross Income = Expenses (cont.): % Total Expenses = 1.22 % Net Income = Page 5, , of 63

122 SunGroup Appraisals UAAR File No # Index # 14.KS Database # F F Sale # 82 Improvement Analysis Improvement Analysis Item: Impt. #1 Impt. #2 Impt. #3 Impt. #4 Impt. #5 Impt. #6 Impt. #7 Impt. #8 Impt. #9 Impt. #10 Type Size Unit Utility Condition Age Remaining Life RCNUnit RCN % Physical Depreciation RCN Remainder After Phys. Depr. % Functional Obsolescence RCN Rem. After Phys.Funct. Depr. % External Obsolescence Total Impt. Contribution Contribution Unit Physical Depreciation Total RCN % Functional Obsolescence % External Obsolescence % Total Depreciation Total Improvement Contribution: Improvement As % of Price % % Comments Below average quality pasture located adjacent to the east side of the El Dorado Correction Facility. Property was offered for sale by auction, purchased by a local investor who owned land to the east. Property was recently cleared of considerable brush, but some brush piles remain. Large rocks and rock out-cropping along ridge lines were evident. Pasture values at the time were from 1,900 to 2,400, but based on an average value of 2,000acre this sale reflects a discount for condition and location of about sixteen percent AgWare, Inc. All Rights Reserved. Page 45 of

123 SunGroup Appraisals UAAR Index # 14.KS File No # Database # 82 F F Sale # 5 Aerial Photo AgWare, Inc. All Rights Reserved. Page 46 of 63

124 SunGroup Appraisals UAAR Sale Analysis Index # 16.KS Database # Sale # 485 Crumley, Gerald Grantor Sales Price Liberty Machine Inc. Grantee Other Contrib Deeded Acres Net Sale Price Sale DateDOM Deeded Acre Prior Sale Date Financing Prior CEV Price % Fin. Adj. Schwartz Analysis Code CEV Price MLS Source SCA Unit Type Establish Motivation Eff. Unit Size Agriculture Highest & Best Use SCA Unit Address Multiplier Unit City Multiplier No. Butler County Legal Access KS StateZip Physical Access View RegionAreaZone Rosalia Location Utilities Legal Description: NW4 of Section 18, T26S-R7E, subject to ROW 370, ,005 2, Conv 370,005 Acre , County GravelRock Average None File No # 6 Property Type Primary Land Use % Min. Ownership Min Production Min Multiplier Improvements Water Source Rec Appeal Zoning Power Line Water Shd Lake Cons Easmnt Verification Doc Special Feature Tax IDRecording SecTwpRge F F Unimproved Sale Pasture Lvstk Grazing 100% No Prod. None NA None Pond None Ag-80 No No No MLS# None CAMA 18 26S 7E Land Mix Analysis Land-Mix Analysis Land Use Dry Crop A Dry Crop B CRPTillable Grass Cropland Bottom Pasture Watershed Lake RecreationalWW Building Site Roads & Waste Ratios Acres % % % % % % % % % % Totals CEV Price 370,005 Acre Ac. 3, Ac. 3, Ac. 3, Ac. 4, Ac. 2, Ac. 11, Ac. 3, Ac. 5, Ac. 1, Ac Ac. 2, Land Contribution Unit Size Unit Type 370,005 Unit Total Unit Value X X X X 370,005 X X X X X X 370,005 X = Improvement Contribution Income Analysis Income Analysis Income Estimate Basis: Income Source Actual X Estimated Pasture Improvements X Units Cash Unit Measure Acre Share Stabilized Yield 1.00 Improvements Included in Land Rent OwnerOperator Total Production CashShareOwner Income Stabilized Unit Gross Income Share % Income , ,625 mo Expense Items: Expenses (cont.): 236 Real Estate Tax Insurance 181 Maintenance 145 Management 562 3,625 Total Expenses Stabilized G.I. = Expense Ratio 3, ,005 Net Income CEV Price = Cap Rate AgWare, Inc. All Rights Reserved. yr Stabilized Gross Income = Expenses (cont.): % Total Expenses = 0.83 % Net Income = Page 3, , of 63

125 SunGroup Appraisals UAAR File No # Index # 16.KS Database # F F Sale # 485 Improvement Analysis Improvement Analysis Item: Impt. #1 Impt. #2 Impt. #3 Impt. #4 Impt. #5 Impt. #6 Impt. #7 Impt. #8 Impt. #9 Impt. #10 Type Size Unit Utility Condition Age Remaining Life RCNUnit RCN % Physical Depreciation RCN Remainder After Phys. Depr. % Functional Obsolescence RCN Rem. After Phys.Funct. Depr. % External Obsolescence Total Impt. Contribution Contribution Unit Physical Depreciation Total RCN % Functional Obsolescence % External Obsolescence % Total Depreciation Total Improvement Contribution: Improvement As % of Price % % Comments A unimproved tract of native grass pasture located approximately eight miles southeast of El Dorado. The tract consists of 145 acres and is square in shape with terrain being level to gently sloping. Land use is native grass pasture for livestock grazing and hay production. Grass stand is average and mostly devoid of scattered trees and brush. There is a heavily timbered ravine in the northwest corner as well as a few scattered trees focused in drainage ways or along fence line. Water is provided by two stock ponds. Property is fenced and cross fenced with condition of fence rates as average. Property sold at public auction on January 21, AgWare, Inc. All Rights Reserved. Page 48 of

126 SunGroup Appraisals UAAR Index # 16.KS File No # Database # 485 F F Sale # 6 Aerial Map AgWare, Inc. All Rights Reserved. Page 49 of 63

127 SunGroup Appraisals UAAR F F File No # Database # Sale # BU Unimproved Sale Blake, Frank 89,900 Pasture Grantor Sales Price Property Type Flint Hills Grass Lvstk Grazing Grantee Other Contrib. Primary Land Use ,900 Min Production No Deeded Acres Net Sale Price , % Min Ownrshp 100% Assumed Sale DateDOM Deeded Acre Cash Min Multiplier Prior Sale Date Financing Improvements None Prior CEV Price % Fin. Adj. Schwartz 89,900 Water Source Ponds Analysis Code CEV Price MLS Acre Rec. Appeal None Source SCA Unit Type Expand Watershed Lake No Motivation Eff. Unit Size AgDevelopment 1, Power Line None Highest & Best Use SCA Unit Cons. Easmnt. None Address Multiplier Unit Author Schwartz City Multiplier No. Butler County Special Feature No County Legal Access KS GravelRock Verification Doc MLS# StateZip Physical Access Average CAMA # View Tax IDRecording RegionAreaZone Prospect None 36 25S 6E Location Utilities SecTwpRge Legal Description: W2 NW4 NW4; SW4 NW4 less ROW; Section 36, Township 25 South, Range 6 East of the 6th PM, Butler County, KS. Subject to ROW. Sale Analysis Index # Land Mix Analysis Land-Mix Analysis Land Use Dry Crop A Dry Crop B CRPTillable Grass Bottom Cropland Pasture Watershed Lake RecreationalWW Building Site Roads & Waste Ratios Acres % % % % % % % % % % Totals CEV Price 89,900 Acre Ac. 2, Ac. 2, Ac. 2, Ac. 2, Ac. 1, Ac. 8, Ac. 2, Ac. 3, Ac. Ac Ac. 1, Land Contribution Unit Size Unit Type 89,900 Unit Total Unit Value X X X X 89,900 X X X X X X 89,900 X = Improvement Contribution Income Analysis Income Analysis Income Estimate Basis: Income Source Actual X Estimated Pasture Improvements X Units Cash Unit Measure A Share Stabilized Yield 1.00 Improvements Included in Land Rent OwnerOperator Total Production CashShareOwner Income Stabilized Unit Gross Income Share % Income , ,450 mo Expense Items: Expenses (cont.): 81 Real Estate Tax Insurance 73 Maintenance 58 Management 212 1,450 Total Expenses Stabilized G.I. = Expense Ratio 1,238 89,900 Net Income CEV Price = Cap Rate AgWare, Inc. All Rights Reserved. yr Stabilized Gross Income = Expenses (cont.): % Total Expenses = 1.38 % Net Income = Page 1, , of 63

128 SunGroup Appraisals UAAR Index # File No # Database # BU F F Sale # Improvement Analysis Improvement Analysis Item: Impt. #1 Impt. #2 Impt. #3 Impt. #4 Impt. #5 Impt. #6 Impt. #7 Impt. #8 Impt. #9 Impt. #10 Type Size Unit Utility Condition Age Remaining Life RCNUnit RCN % Physical Depreciation RCN Remainder After Phys. Depr. % Functional Obsolescence RCN Rem. After Phys.Funct. Depr. % External Obsolescence Total Impt. Contribution Contribution Unit Physical Depreciation Total RCN % Functional Obsolescence % External Obsolescence % Total Depreciation Total Improvement Contribution: Improvement As % of Price % % Comments An unimproved tract of native grass pasture located eight miles east of El Dorado. The property is irregular in shape with terrain being level to gently sloping. Land use is native grass pasture for livestock grazing with one stock pond for watering livestock. Minor to average appeal for a single rural residential homesite. Zoned Ag-40. Property was listed by a regional real estate company, sold to a local investor. Grantor: Blake, Frank & Barbara Grantee: Flint Hills Grass & Cattle, LLC According to listed agent, sellers were motivated for quick sale; therefore, this is viewed as a soft sale and not a good indicator of market value AgWare, Inc. All Rights Reserved. Page 51 of

129 SunGroup Appraisals UAAR Index # BU File No # Database # 1134 F F Sale # 7 Aerial Map AgWare, Inc. All Rights Reserved. Page 52 of 63

130 SunGroup Appraisals UAAR File No # F F Sales Comparison Approach - Land Adjustment for Sale# 1 Adjust each sale to the subject's land mix (land adjustment) using unimproved sales. This page allows for a "quantitative land adjustment" only Sales Comparison - Sale #1 Land Adjustment Amt. Land Use Sale Acres Acre Sale Unit Type Sale Units Unit Subj. Acres Acre Subj. Unit Dry Crop A 2, , Dry Crop B 2, , CRPTillable Grass 2, , Bottom Cropland 2, , Pasture , , Watershed Lake 7, , RecreationalWW 2, , Building Site 3, , Roads & Waste Sale Land Contrib. 468, Eff. Unit Size = 1, Total 135,498 Unit Total 135, Eff. Unit Size 80 = 1, Sales Comparison Approach - Improvement Adjustment for Sale# 1 Compare each set of sale improvements to the subject improvements making judgments regarding utility and condition. Then arrive at an improvement adjustment for each sale on a per acre or per unit basis. These adjustments are shown on the Sales Comparison Grid. Note: Appraiser must manually enter the Unit for the Subject Improvements -- either individually or as a lump sum Sales Comparison - Sale #1 Improvement Adjustment Amt. : Sale Impt. UtlCond. Size X Unit Contrib. Value Subject Impt. UtlCond. Size Sale Effective Unit Size: Subject Effective Unit Size: 0.00 Total Improvement Value = Acre Total Improvement Value = AgWare, Inc. All Rights Reserved. Acre X Unit Contrib. Value Acre Page 53 of

131 SunGroup Appraisals UAAR File No # F F Sales Comparison Approach - Land Adjustment for Sale# 2 Adjust each sale to the subject's land mix (land adjustment) using unimproved sales. This page allows for a "quantitative land adjustment" only Sales Comparison - Sale #2 Land Adjustment Amt. Land Use Sale Acres Acre Sale Unit Type Sale Units Unit Subj. Acres Acre Subj. Units Dry Crop A 3, , Dry Crop B 2, , CRPTillable Grass 2, , Bottom Cropland 4, , Pasture , , Watershed Lake 7, , RecreationalWW 2, , Building Site 3, , Roads & Waste Sale Land Contrib. 309, Eff. Unit Size = 1, Total 157,389 Unit Eff. Unit Size Total 157, = 1, Sales Comparison Approach - Improvement Adjustment for Sale# 2 Compare each set of sale improvements to the subject improvements making judgments regarding utility and condition. Then arrive at an improvement adjustment for each sale on a per acre or per unit basis. These adjustments are shown on the Sales Comparison Grid. Note: Appraiser must manually enter the Unit for the Subject Improvements -- either individually or as a lump sum Sales Comparison - Sale #2 Improvement Adjustment Amt. : Sale Impt. UtlCond. Size X Unit Contrib. Value Subject Impt. UtlCond. Size Sale Effective Unit Size: Subject Effective Unit Size: 0.01 Total Improvement Value = Acre Total Improvement Value = AgWare, Inc. All Rights Reserved. Acre X Unit Contrib. Value Acre Page 54 of

132 SunGroup Appraisals UAAR File No # F F Sales Comparison Approach - Land Adjustment for Sale# 3 Adjust each sale to the subject's land mix (land adjustment) using unimproved sales. This page allows for a "quantitative land adjustment" only Sales Comparison - Sale #3 Land Adjustment Amt. Land Use Sale Acres Acre Sale Unit Type Sale Units Unit Subj. Acres Acre Subj. Units Dry Crop A 2, , Dry Crop B 2, , CRPTillable Grass 2, , Bottom Cropland 3, , Pasture , , Watershed Lake 9, , RecreationalWW 2, , Building Site 4, , Roads & Waste Sale Land Contrib. 336, Eff. Unit Size = 2, Total 168,064 Unit Eff. Unit Size Total 167, = 2, Sales Comparison Approach - Improvement Adjustment for Sale# 3 Compare each set of sale improvements to the subject improvements making judgments regarding utility and condition. Then arrive at an improvement adjustment for each sale on a per acre or per unit basis. These adjustments are shown on the Sales Comparison Grid. Note: Appraiser must manually enter the Unit for the Subject Improvements -- either individually or as a lump sum Sales Comparison - Sale #3 Improvement Adjustment Amt. : Sale Impt. UtlCond. Size X Unit Contrib. Value Subject Impt. UtlCond. Size Sale Effective Unit Size: Subject Effective Unit Size: Total Improvement Value = Acre Total Improvement Value = AgWare, Inc. All Rights Reserved. Acre X Unit Contrib. Value Acre Page 55 of

133 SunGroup Appraisals UAAR File No # F F Sales Comparison Approach - Land Adjustment for Sale# 4 Adjust each sale to the subject's land mix (land adjustment) using unimproved sales. This page allows for a "quantitative land adjustment" only Sales Comparison - Sale #4 Land Adjustment Amt. Land Use Sale Acres Acre Sale Unit Type Sale Units Unit Subj. Acres Acre Subj. Units Dry Crop A 2, , Dry Crop B 2, , CRPTillable Grass 2, , Bottom Cropland 3, , Pasture , , Watershed Lake , , RecreationalWW 2, , Building Site 3, , Roads & Waste Sale Land Contrib. 1,119, Eff. Unit Size = 1, Total 130,924 Unit Eff. Unit Size Total 130, = 1, Sales Comparison Approach - Improvement Adjustment for Sale# 4 Compare each set of sale improvements to the subject improvements making judgments regarding utility and condition. Then arrive at an improvement adjustment for each sale on a per acre or per unit basis. These adjustments are shown on the Sales Comparison Grid. Note: Appraiser must manually enter the Unit for the Subject Improvements -- either individually or as a lump sum Sales Comparison - Sale #4 Improvement Adjustment Amt. : Sale Impt. UtlCond. Size X Unit Contrib. Value Subject Impt. UtlCond. Size Sale Effective Unit Size: Subject Effective Unit Size: 0.00 Total Improvement Value = Acre Total Improvement Value = AgWare, Inc. All Rights Reserved. Acre X Unit Contrib. Value Acre Page 56 of

134 SunGroup Appraisals UAAR File No # F F Sales Comparison Approach - Land Adjustment for Sale# 5 Adjust each sale to the subject's land mix (land adjustment) using unimproved sales. This page allows for a "quantitative land adjustment" only Sales Comparison - Sale #5 Land Adjustment Amt. Land Use Sale Acres Acre Sale Unit Type Sale Units Unit Subj. Acres Acre Subj. Units Dry Crop A 2, , Dry Crop B 2, , CRPTillable Grass 2, , Bottom Cropland 3, , Pasture , , Watershed Lake 5, , RecreationalWW 2, , Building Site 3, , Roads & Waste Sale Land Contrib. 370, Eff. Unit Size = 1, Total 135,210 Unit Eff. Unit Size Total 134, = 1, Sales Comparison Approach - Improvement Adjustment for Sale# 5 Compare each set of sale improvements to the subject improvements making judgments regarding utility and condition. Then arrive at an improvement adjustment for each sale on a per acre or per unit basis. These adjustments are shown on the Sales Comparison Grid. Note: Appraiser must manually enter the Unit for the Subject Improvements -- either individually or as a lump sum Sales Comparison - Sale #5 Improvement Adjustment Amt. : Sale Impt. UtlCond. Size X Unit Contrib. Value Subject Impt. UtlCond. Size Sale Effective Unit Size: Subject Effective Unit Size: 0.00 Total Improvement Value = Acre Total Improvement Value = AgWare, Inc. All Rights Reserved. Acre X Unit Contrib. Value Acre Page 57 of

135 SunGroup Appraisals UAAR File No. # F F Sean's License AgWare, Inc. All Rights Reserved. Page 58 of

136 SunGroup Appraisals UAAR AgWare, Inc. All Rights Reserved. File No. # F F 136

137 SunGroup Appraisals UAAR File No. # F F David's License AgWare, Inc. All Rights Reserved. Page 60 of

138 SunGroup Appraisals UAAR AgWare, Inc. All Rights Reserved. File No. # F F 138

139 RE: FARM & RANCH APPRAISAL CREDENTIALS OF DAVID SUNDGREN To Whom It May Concern: I have been a lifelong resident of Butler County, leaving only to obtain my education at Kansas State University where I graduated in 1975 with a B.S. degree in Agriculture. After graduation, I returned home and operated our family ranch in eastern Butler County from In addition to my agricultural background and education, I have instructed college level courses in Agriculture Economics, Principles of Animal Science and Principles of Real Estate. My appraisal education consists of more than 250 hours of required education and my state license is the General Certification, which is the highest level recognized in Kansas. I have also been a licensed Real Estate Broker since 1990, specializing in farm and ranch sales in Butler, Greenwood and Elk counties. Since 1990 I have appraised andor sold hundreds of farms and ranches in Butler, Greenwood and Elk counties and have compiled and maintained an extensive database of sales. Sincerely, David L. Sundgren SunGroup David Sundgren & Associates 121 N. Main St. El Dorado, Kansas, david@sungrouprealestate.com Tel: Fax: