NEW ISSUE BOOK-ENTRY ONLY See "BOND RATINGS" herein In the opinion of Gilmore & Bell, P.C., Bond Counsel, under existing law and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended, the interest on the Series 2009C Bonds (including any original isstre discount properly allocable to an owner thereoj is excludedfiom gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative nzinimunz tax imposed on individuals and corporations. Under existing law, the interest on the Series 2009C Bonds is exempt fionz all Kansas state, county and municipal taxes, including income, inheritance and property taxes. See the caption "TAX MATTERS-Opinion of Bond Counsel" herein. $20,000,000 KANSAS DEVELOPMENT FINANCE AUTHORITY REVENUE BONDS (KANSAS BOARD OF REGENTS - POSTSECONDARY EDUCATIONAL INSTITUTION INFRASTRUCTURE FINANCE PROGRAM) SElUES 2009C

Due: March 1, as shown on Dated: Date of Delivery the inside front cover The Series 2009C Bonds will be issued by the Kansas Development Finance Authority (the "Authority") pursuant to Bond Resolution No. 244 adopted by the Authority on February 21, 2008, as supplemented by Supplemental Bond Resolution No. 244-A adopted by the Authority on March 5, 2009 (as further supplemented from time to time, the "Bond Resolution"). The Series 2009C Bonds will stand on a parity with the Authority's Revenue Bonds (Kansas Board of Regents - Postsecondary Educational Institution Infrastructure Finance Program) Series 2008A (the "Series 2008A Bonds") and any other Additional Bonds issued from time to time under the Bond Resolution. The Series 2009C Bonds, the Series 2008A Bonds and any Additional Bonds are collectively referred to herein as the "Bonds. " The principal of, redemption premium, if any, and interest on the Bonds will be payable in lawful money of the United States of America by the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar"), to the Registered Owners thereof whose names are on the registration books of the Bond Registrar as of the fifteenth day (whether or not a Business Day) of the calendar month next preceding each Interest Payment Date. The Series 2009C Bonds will be issued as fully registered bonds without coupons in denominations of $5,000 or any integral multiple thereof, and when issued will be registered in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC"), New York, New York, in the United States. See "BOOK-ENTRY SYSTEM in Appendix E hereto. The Series 2009C Bonds will bear interest at the rates shown on the inside front cover, payable semiannually on March 1 and September 1 of each year, commencing September 1,2009. MATURITY SCHEDULE-SEE INSIDE COVER PAGE The principal of, redemption premium, if any, and interest on the Bonds are equally and ratably secured under the Bond Resolution and are payable solely and only from the Trust Estate (as described herein), which includes, but is not limited to, all right, title and interest of the Authority in, to and under the Pledge Agreement dated as of March 15, 2008, as supplemented by a First Supplemental Pledge of Revenues Agreement dated as of March 15, 2009 (as further supplemented from time to time, the "Pledge Agreement") between the Authority and the Kansas Board of Regents (the "Board"), pursuant to which certain Pledged Revenues (as described herein) are pledged to the Authority. The "Pledged Revenues" consist primarily of (i) funds appropriated by the Kansas Legislature for the payment of Debt Senice Requirements and related fees and expenses, (ii) funds appropriated by the Kansas Legislature directly to or through the Board for the payment of Debt Service Requirements and related fees and expenses, (iii) certain payments by post-secondary educational institutions (the "Institutions") to the Board pursuant to the Loan Agreements that are pledged by the Board to the Authority pursuant to the Pledge Agreement, and (iv) any other funds legally available and designated for the payment of Debt Service Requirements. THE OBLIGATION OF THE BOARD TO PAY PLEDGED REVENUES UNDER THE PLEDGE AGREEMENT IS SUBJECT TO AND DEPENDENT WON ANNUAL APPROPRIATIONS BEING MADE BY THE KANSAS LEGISLATURE FOR SUCH PURPOSE. See the caption "THE BONDS-Security for the Bonds" herein. THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE TRUST ESTATE. THE OBLIGATIONS OF THE BOARD TO PAY PLEDGED REVENUES DO NOT CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF KANSAS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION. IN NO EVENT SHALL THE BONDS CONSTITUTE AN INDEBTEDNESS OF THE STATE OF KANSAS OR AN INDEBTEDNESS FOR WHICH THE FAITH AND CREDIT OR TAXING POWERS OF THE STATE OF KANSAS ARE PLEDGED. THE BONDS DO NOT CONSTITUTE, NOR SHALL THEY BE CONSTRUED TO BE, A GENERAL OBLIGATION OF THE STATE OF KANSAS, THE BOARD, THE AUTHORITY OR ANY OTHER GOVERNMENTAL ENTITY. NEITHER THE AUTHORITY NOR THE BOARD HAS ANY TAXING POWER INDEPENDENT OF THE KANSAS LEGISLATURE. The Bonds are subject to redemption prior to maturity as described under the caption "THE BONDS-Redemption" herein. This cover page contains informationfor quick reference only. It is not a summav of the transaction. Investors must read the entire Offlcial Statement to obtain information essential to the making of arz informed investnzent decision. The Bonds are offered when, as and if issued by the Authority, subject to the approval of legality by Gilrnore & Bell, P.C., Bond Counsel. Certain legal matters will be passed upon for the Authority by Rebecca E. Floyd, Esq., its general counsel, for the Board by its general counsel, Julene L. Miller, Esq., and for the Underwriters by their counsel, Gates, Shields & Ferguson, P.A. It is expected that the Bonds will be available for delivery in New York, New York through the facilities of DTC on or about March 31,2009. MORGAN STANLEY Piper JaEi-ay & Co. George K. Baum & Company I The date of this Official Statement is March 12, 2009 $20,000,000 KANSAS DEVELOPMENT FINANCE AUTHORITY REVENUE BONDS (KANSAS BOARD OF REGENTS - POSTSECONDARY EDUCATIONAL INSTITUTION INFRASTRUCTURE FINANCE PROGRAM) SERIES 2009C

MATUFUTY SCHEDULE

Maturity Principal Interest CUSIP (March 1) Amount Rate Yield Price 48542~(')

('I The Authority shall not be responsible for the use of the CUSIP numbers, nor is any representation made as to their correctness. They are included solely for the convenience of readers of this Official Statement. Supplement to

OFFICIAL STATEMENT

dated March 12,2009

relating to

$20,000,000 KANSAS DEVELOPMENT FINANCE AUTHORITY REVENUE BONDS (IUNSAS BOARD OF REGENTS - POSTSECONDARY EDUCATIONAL INSTITUTION INFRASTRUCTURE FINANCE PROGRAM) SERIES 2009C

This Supplement to the Official Statement dated March 12,2009, relating to the above-referenced bonds (the "Series 2009C Bondsyy)amends certain terms of the offering of the Series 2009C Bonds set forth in the Official Statement.

The CUSIP numbers for the following 2009C Bonds set forth on the maturity schedule on the inside9ont cover of the Oficial Statement are hereby amended as follows:

Maturity Principal Interest CUSIP (March 1) Amount Rate Yield Price 48542~(')

Except as expressly supplemented or amended hereby, the terms of the offering of the Series 2009C Bonds set forth in the Official Statement remain in full force and effect.

The date of this Supplement is March 30,2009

(') The Authority shall not be responsible for the use of the CUSIP numbers, nor is any representation made as to their correctness. They are included solely for the convenience of readers of this Official Statement. KANSAS DEVELOPMENT FINANCE AUTHORITY

Brett A. Reber, Chair Daniel L. Watkins, Vice Chair John G. Montgomery, Member Audrey H. Langworthy, Member Timothy C. Schaller, Member Stephen R. Weatherford, President Rebecca E. Floyd, Esq., Executive Vice President and General Counsel Jim MacMurray, Vice President of Finance Nick Lehrnan, Vice President of Finance Linda Clark, Chief Fiscal Officer

STATE OFFICIALS

Kathleen Sebelius, Governor Donna Shank, Chair, Kansas Board of Regents

PROFESSIONAL SERVICES

Financial Advisor, Columbia Capital Management, LLC Bond Counsel, Gilmore & Bell, P.C. Bond Registrar and Paying Agent, Treasurer of the State of Kansas No dealer, broker, salesman or other person has been authorized by the Authority or the Board to give any information or to make any representations other than those contained in this Official Statement and, if given or made, such information and representations must not be relied upon as having been authorized by the Authority or the Board.

- FORWARD-LOOKING STATEMENTS This Official Statement, including the sections under the headings "PLAN OF FINANCE," "STATE APPROPRIATIONS AND THE BUDGET PROCESS" and "INVESTMENT CONSIDERATIONS" and contained in Appendices A-1 and A-2 hereof, contains forward-looking statements. These statements relate to future events or future financial performance and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You can identify forward-looking statements by terminology such as "may," cc~ill,""should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "projects," "potential," "continues," or the negative of these terms or other comparable terminology. Although the Authority and the Board believe the expectations reflected in the forward-looking statements to be reasonable, neither the Authority nor the Board can guarantee future results, levels of activity, performance or achievements. The Authority and the Board do not plan to issue any updates of revisions to those forward-looking statements if or when the expectations on which such statements are based occur or fail to occur. Certain risks and other factors with respect to such events include those listed under the headings "INVESTMENT CONSIDERATIONS" and "STATE APPROPRIATIONS AND THE BUDGET PROCESS" and in Appendix A-1 hereof and elsewhere in this Off~cialStatement.

THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY, NOR WILL THERE BE ANY SALE OF THE BONDS BY ANY PERSON, IN ANY JURTSDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE. THE INFORMATION AND EXPRESSIONS OF OPINION HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE, AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY SALE MADE THEREAFTER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE AUTHORITY, THE BOARD OR THE STATE SINCE THE DATE HEREOF.

THE SERIES 2009C BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS ANY DOCUMENT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE TERMS OF THE OFFERING. THE SERIES 2009C BONDS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS OFFICIAL STATEMENT.

IN CONNECTION WITH THE OFFERING OF THE SERIES 2009C BONDS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH SERIES 2009C BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. TABLE OF CONTENTS

Page Page

INTRODUCTION ...... 1 APPENDIX A- 1. COMPREHENSIVE ANNUAL PLAN OF FINANCE ...... 2 FINANCIAL REPORT OF THE Purpose of the Bonds ...... 2 STATE OF KANSAS (JULY 1. Implementation of the Loan Program ..... 2 2007 TO JUNE 30. 2008) 3 Sources and Uses of Funds...... APPENDIX A-2- STATE APPROPRIATION THE BONDS ...... 3 OBLIGATIONS General ...... 3 Book-Entry Only System ...... 4 APPENDIX B .GOVERNOR'S ECONOMIC Security for the Bonds ...... 4 AND DEMOGRAPHIC REPORT Debt Service Requirements ...... 5 (JANUARY 2009) Redemption 5 ...... APPENDIX C .DEBT SERVICE THE AUTHORITY ...... 6 REQUIREMENTS THE KANSAS BOARD OF REGENTS ...... 8 STATE APPROPRIATIONS AND THE APPENDIX D .SUMMARY OF PRINCIPAL BUDGET PROCESS ...... 8 FINANCING DOCUMENTS General 8 ...... APPENDIX E .BOOK-ENTRY ONLY SYSTEM Current State Budget Issues ...... 9 INFORMATION REGARDING THE STATE .. 12 APPENDIX F .FORM OF CONTINUING INVESTMENT CONSIDERATIONS ...... 12 DISCLOSURE UNDERTAKING No Pledge of Real or Personal APPENDIX G .FORM OF OPINION OF BOND Property ...... 12 COUNSEL Nonappropriation Risk ...... 12 Special Obligations ...... 12 APPENDIX H .LIST OF APPROVED Limitation of Liability ...... 13 PROJECTS Taxation of Interest on the Series 2009C Bonds ...... ;... 13 Nonorigination or Reduced Funding of Loans ...... 13 Secondary Market for the Bonds ...... 14 No Bond Reserve Fund ...... 14 Legal Matters ...... 14 Limitations on Remedies Available to Owners of the Bonds...... 14 Suitability of Investment ...... 15 NO LITIGATION ...... 15 The Authority ...... 15 The Board ...... 15 BOND RATINGS ...... 15 CONTINUING DISCLOSURE...... 16 LEGAL MATTERS ...... 16 TAX MATTERS ...... 16 Opinion of Bond Counsel ...... 16 Collateral Tax Consequences ...... 17 FINANCIAL ADVISOR ...... 17 UNDERWRITING ...... 17 MISCELLANEOUS ...... 18 (THIS PAGE LEFT BLANK INTENTIONALLY) OFFICIAL STATEMENT $20,000,000 KANSAS DEVELOPMENT FINANCE AUTHORITY REVENUE BONDS (KANSAS BOARD OF REGENTS -POSTSECONDARY EDUCATIONAL INSTITUTION INFRASTRUCTURE FINANCE PROGRAM) SERIES 2OO9C

INTRODUCTION

This Official Statement, including the cover page and appendices hereto (the "Official Statement"), is provided to hrnish information with respect to the issuance and delivery by the Kansas Development Finance Authority (the "Authority") of its $20,000,000 Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents-Postsecondary Educational Institution Infrastructure Finance Program), Series 2009C (the "Series 2009C Bonds"). The Series 2009C Bonds are being issued pursuant to K.S.A., $ 74-8901 et seq., as amended (the "KDFA Act") and Bond Resolution No. 244 adopted by the Authority on February 21, 2008, as supplemented by Supplemental Bond Resolution No. 244-A adopted by the Authority on March 5, 2009 (as supplemented from time to time, the "Bond resolution'^), and stand on a parity with the ~uthority'sRevenue Bonds (Kansas Board of Regents - Postsecondary Educational Institution Infrastructure Finance Program) Series 2008A (the "Series 2008A Bonds") and any other Additional Bonds issued from time to time under the Bond Resolution. The Series 2009C Bonds, the Series 2008A Bonds and any Additional Bonds are collectively referred to herein as the "Bonds. "

The Series 2009C Bonds are being issued for the purpose of (a) providing funds to the Kansas Board of Regents (the "Board") to finance loans to certain postsecondary educational institutions for eligible infrastructure improvement projects in accordance with K.S.A. 76-7,116 et seq. (the "PEI Act"), as described herein, and (b) paying costs of issuance for the Bonds.

In connection with the issuance of the Series 2009C Bonds, the Authority has entered into the Pledge of Revenues Agreement, dated as of March 15, 2008, as supplemented by the First Supplemental Pledge of Revenues Agreement, dated as of March 15, 2009 (as supplemented from time to time, the "Pledge Agreement"), between the Authority and the Board, pursuant to which the Board has pledged the Pledged Revenues (described below), and not any other fund or source, to the Authority as security for the payment of the Debt Service Requirements on the Bonds and certain fees, expenses and deposits of the Authority relating to the Bonds as described in the Pledge Agreement and the Bond Resolution.

The Authority has pledged to pay the principal of, redemption premium, if any, and interest on the Bonds solely from the Trust Estate, which includes (a) all right, title and interest of the Authority in, to and under the Pledge Agreement, including the covenant by the Board to deposit as received all the Pledged Revenues into the Revenue Fund created under the Bond Resolution and established with the State Treasurer (the "Revenue Fund'), (b) the Revenues (hereinafter described), (c) proceeds of the Bonds and certain investment earnings, and (d) all right, title and interest of the Authority in, to and under any Qualified Swap Agreement. All amounts deposited to the credit of the Revenue Fund shall be accounted for separate and apart from all other funds of the Board and the State. All money in the Revenue Fund shall be held in trust and shall be subject to a prior lien and charge in favor of the Owners of the Bonds and for the further security of such Owners until paid out or withdrawn as provided in the Pledge Agreement.

The Bonds are special limited obligations of the Authority payable solely from the Trust Estate pledged under the Bond Resolution, which includes the revenues pledged to the payment of the Bonds pursuant to the terms of the Pledge Agreement (the "Pledged Revenues"), consisting solely of (i) funds to be appropriated by the Kansas Legislature for the payment of Debt Service Requirements on the Bonds and related fees and expenses, (ii) funds to be appropriated by the Kansas Legislature directly to or through the Board for the payment of Debt Service Requirements and related fees and expenses, (iii) certain payments by certain postseconda~edzicational institutions (the "Institutions'")~ the Board pursuant to the Loan Agreements and (iv) any other jiinds legally available and designated for the payment of Debt Service Requirements. THE OBLIGATION OF THE BOARD TO PAY PLEDGED REVENUES UNDER THE PLEDGE AGREEMENT IS SUBJECT TO AND DEPENDENT UPON ANNUAL APPROPRIATIONS BEING MADE BY THE KANSAS LEGISLATURE FOR SUCH PURPOSE. See the caption "THE BONDS-Security for the Bonds" herein.

Certain capitalized terms used in this OfJicial Statement and not otherwise dejined herein shall have the meanings given to such terms under the caption "DEFIIVITIONSJ'in Appendix D to this OfJicial Statement.

PLAN OF FINANCE

Purpose of the Bonds

The Series 2009C Bonds are being issued to provide funds to the Board to make loans to finance infrastructure improvement projects at the community colleges and technical colleges in the State, whose projectslloan applications have been approved by the Board (collectively, the "Institutions"). Under the PEI Act, the Board is authorized to enter into loan agreements (the "Loan Agreements") with the Institutions to provide for payment of principal on the bonds. When approving applications for financing under the program, the Board is required to take into consideration the need for the project and the financial ability of the Institution to meet its obligations under its Loan Agreement. Although the principal and interest on the Bonds is required to be paid from annual appropriations by the Kansas Legislature, under the Loan Agreements the Institutions are required to reimburse the Board for the principal portion of the payments each year.

Pursuant to the PEI Act, an eligible infrastructure improvement projects means the maintenance, repair, reconstruction, remodeling or rehabilitation of a building located at a postsecondary educational institution, any additions to a building, any utility system and other infrastructure relating to such a building, any life-safety upgrades to such building, any improvements necessary to be made to such building in order to comply with the requirements of the Americans with Disabilities Act or other federal or State law. An "infrastructure improvement project" does not include (a) the new construction of buildings, (b) the maintenance, repair, reconstruction or rehabilitation of any building used as an athletic facility that does not directly support the delivery of academic pursuits, or (c) the maintenance, repair, reconstruction or rehabilitation of the residence of the president or chief executive officer of a postsecondary educational institution.

Implementation of the Loan Program

The Authority and the Board have undertaken the following procedures to implement the loan program:

The Authority prepared a summary of the provisions of the PEI Act and shared it with all eligible Institutions, and staff of the Board and the Authority convened a meeting with staff of all 25 eligible Institutions to discuss the loan program.

Staff of the Board and the Authority developed and distributed a loan demand survey to all eligible Institutions for completion. These preliminary survey results included 470 projects identified by 22 institutions.

Prior to issuance of the Series 2008A Bonds, staff of the Board and the Authority developed a loan application that was delivered to all eligible Institutions in 2008. That application was reviewed, and a revised application was created that was made available to all eligible Institutions in 2009. A review committee was formed to review applications in accordance with statutory criteria and to rate projects in accordance with "need" as directed in the PEI Act. In 2008, applications totaling $24.9 million were received from 14 of the eligible Institutions. In 2009, applications totaling $20.3 million were received from 12 eligible Institutions.

In both 2008 and 2009, the review committee examined the applications using the eligibility criteria contained in the PEI Act and prioritized qualified projects that were deemed to be of the greatest need. The review committee made recommendations to the Board's Fiscal Affairs and Audit Committee on January 29, 2009. On February 12, 2009, the Board approved applications for financing the 2009 projects listed in Appendix H. Information about the previously authorized 2008 projects for which loans were made from proceeds of the Series 2008A Bonds is also included in Appendix H.

Sources and Uses of Funds

The proceeds to be received from the sale of the Series 2009C Bonds are estimated to be applied as follows: Sources of Funds Bond Principal Plus: Original Issue Premium Less: Underwriters7Discount Total

Uses of Funds Project Account Costs of Issuance Principal and Interest Account Total

THE BONDS

General

The Bonds will be issued as fully registered bonds in the denomination of $5,000 each or integral multiples thereof. The Series 2009C Bonds will be dated the date of delivery thereof and will mature, subject to prior redemption, in the years and amounts as shown on the inside cover page hereof and will bear interest from their dated date at the rates shown on the inside cover page. The principal of, redemption premium, if any, and interest on the Bonds will be payable in lawful money of the United States of America at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond Registrar") and shall be paid by (a) check or draft of the Paying Agent mailed to such Registered Owner, or (b) at the written request addressed to the Paying Agent by any Registered Owner of Bonds in the aggregate principal amount of at least $500,000 of Bonds, by wire transfer to the bank for credit to the account number filed with the Paying Agent no later than the Business Day preceding the Record Date. The principal of each Bond will be payable at maturity upon presentation and surrender at the principal office of the Paying Agent. Interest on each Bond will be payable to the Registered Owners of the Bonds at the address of each Registered Owner shown on the registration records maintained by the Bond Registrar as of the fifteenth day of the calendar month next preceding each Interest payment Date.

Bonds will be transferable at the office of the Bond Registrar. The Authority has agreed to pay the fees, charges and expenses of the Bond Registrar, which fees, charges and expenses shall include all costs incurred in connection with the issuance, transfer, exchange, registration, redemption or payment of the Bonds, except (a) the reasonable fees and expenses in connection with the replacement of any Bond or Bonds mutilated, stolen, lost or destroyed, or (b) any tax or other governmental charge imposed in relation to the transfer, exchange, registration, redemption or payment of the Bonds. Such additional costs shall be paid by the Registered Owners. The Bond Registrar will not be required (a) to issue, transfer or exchange any Bonds during the period of 15 days immediately preceding any Payment Date or (b) to issue, transfer or exchange any Bonds after the date specified in any notice of redemption (which shall be not less than 15 calendar days immediately preceding the mailing of the notice of redemption).

Book-Entry Only System

Except as described herein, the Bonds will be issued in the form of one or more fully registered global securities for each maturity of the Bonds, as set forth on the inside cover of this Official Statement, in the aggregate principal amount of such maturity, and purchases of the Bonds will be registered in the name of Cede & Co., as nominee of DTC. See "BOOK-ENTRY SYSTEM in Appendix E to this Official Statement.

SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE BONDOWNERS OR REGISTERED OWNERS OF THE BONDS WILL MEAN CEDE & CO. AND WILL NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS.

Security for the Bonds

Trust Estate. The Bonds and the interest thereon shall be special limited obligations of the Authority payable solely and only from, and are secured as to the payment of principal of, redemption premium, if any, and interest by a pledge of, the Trust Estate, which consists of:

(a) All right, title and interest of the Authority in, to and under the Pledge Agreement; provided that the pledge and assignment hereby made shall not impair or diminish the obligations of the Authority under the provisions of the Pledge Agreement;

(b) All Revenues;

(c) All moneys and securities from time to time held under the terms of this Bond Resolution (excluding funds held in or accruing to the Rebate Account), including, without limitation, Bond proceeds and income from the temporary investment thereof and any and all other real or personal property of every kind and nature from time to time hereafter, by delivery or by writing of any kind, pledged, assigned or transferred as and for additional security for the Bonds by the Authority; and

(d) All right, title and interest of the Authority in, to and under any Qualified Swap Agreement.

Revenues. The Revenues pledged for the payment of the Bonds pursuant to the Bond Resolution includes the Pledged Revenues, together with investment earnings thereon. The Pledged Revenues pledged to the Authority for the payment of the Bonds pursuant to the Pledge Agreement consist solely of (i) funds appropriated by the Legislature for the payment of Debt Service Requirements and related fees and expenses, (ii) funds appropriated by the Legislature directly to or through the Board for the payment of Debt Service Requirements and related fees and expenses, (iii) payments by the Institutions to the Board pursuant to the Loan Agreements, and (iv) any other funds legally available and designated for the payment of Debt Service Requirements and related fees and expenses.

It is anticipated that the primary source of moneys available for deposit in the Revenue Fund will be State appropriations. Appropriations to pay debt service on the Bonds will be requested annually by the Board pursuant to the Pledge Agreement. For a summary of the obligations of the Board to seek State appropriations to pay the Debt Service Requirements, see the caption "SUMMARY OF THE PLEDGE AGREEMENT-Annual Appropriation" in Appendix D to this Official Statement.

Limited Obligations. The principal of, redemption premium, if any, and interest on the Bonds shall not be a debt or general obligation of the Authority, the Board, the Institutions, the State or any municipal corporation or political subdivision thereof, and neither the principal of, redemption premium, if any, and interest on the Bonds nor any judgment thereon or with respect thereto is payable in any manner, unless properly appropriated, from any tax revenues of any kind or character. The Bonds shall not constitute an indebtedness or a pledge of the faith and credit of the Authority, the State, the Board, the Institutions, or any municipal corporation or political subdivision thereof, within the meaning of any constitutional or statutory limitation or restriction.

I THE BONDS DO NOT CONSTITUTE GENERAL OBLIGATIONS OF THE AUTHORITY, I THE BOARD, THE INSTITUTIONS, THE STATE OF KANSAS OR ANY POLITICAL SUBDIVISION THEREOF, AND ARE NOT PAYABLE IN ANY MANNER, UNLESS PROPERLY APPROPRIATED, FROM ANY TAX REVENUES OF THE STATE OF KANSAS. NEITHER THE I AUTHORITY NOR THE BOARD HAS ANY TAXING POWER.

Debt Service Requirements

A schedule of the Debt Service Requirements is set forth in Appendix C to this Official Statement.

Redemption

Optional Redemption. The Series 2009C Bonds are not subject to optional redemption.

Extraordinary Optional Redemption. Upon the occurrence of an Event of Default under the Pledge Agreement (with notice to the Board), the Bonds shall be subject to redemption and payment prior to the stated maturity thereof, at the option of the Authority, on any date at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued interest thereon to the date of redemption, provided that all of the Bonds are so redeemed and paid according to their terms.

Selection of Bonds To Be Redeemed. Bonds shall be redeemed only in the principal amount of $5,000 or integral multiples thereof. If less than all of the Outstanding Bonds of a particular maturity are to be redeemed and paid prior to maturity pursuant to the optional redemption provisions set forth above, Bonds of such maturity shall be selected for redemption by lot.

In the case of a partial redemption of Bonds when Bonds of denominations greater than $5,000 are then Outstanding, then for all purposes in connection with such redemption, each $5,000 of face value shall be treated as though it was a separate Bond of the denomination of $5,000. If it is determined that one or more, but not all, of the $5,000 units of face value represented by any ~ondare selected for redemption, then the Registered Owner of such Bond or such Registered Owner's attorney or legal representative shall forthwith present and surrender such Bond to the Paying Agent for payment of the redemption price (including the redemption premium, if any, and interest to the redemption date) of the $5,000 unit or units of face value called for redemption, and to the Bond Registrar for exchange, without charge to the Registered Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Registered Owner of any such Bond of a denomination greater than $5,000 shall fail to present such Bond to the Paying Agent and Bond Registrar for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date only to the extent of the principal amount thereof called for redemption.

Notice of Redemption. Notice of the call for any redemption shall be given by the Bond Registrar, in the name of the Authority, by mailing a copy of the redemption notice at least 30 days prior to the date fixed for redemption to the original purchaser, the Bond Insurer and the Registered Owner of each Bond to be redeemed at the address shown on the registration books maintained by the Bond Registrar; provided, however, that failure to give such notice by mailing as aforesaid, or any defect therein, shall not affect the validity of any proceedings for the redemption of the Bonds. Any notice of redemption shall state the date of redemption, the place or.places at which such Bonds shall be presented for payment, the series, maturities and numbers of the Bonds to be redeemed and the principal amount thereof being redeemed, the redemption price, whether or not funds for the redemption are on deposit with the Paying Agent or the redemption is contingent upon the deposit of such funds, and shall state that interest on the Bonds described in such notice will cease to accrue from and after the redemption date if the conditions described herein under the caption "Effect of Call for Redemption" below are met.

With respect to optional redemptions, such notice may be conditional upon moneys being on deposit with the Paying Agent on or prior to the redemption date in an amount sufficient to pay the redemption price on the redemption date. If such notice is conditional and moneys are not received, such notice shall be of no force and effect, the Paying Agent shall not redeem such Bonds, and the Paying Agent shall give notice, in the same manner in which the notice of redemption was given, that such moneys were not so received and that such Bonds will not be redeemed.

Paying Agent's and Bond Registrar's Duties To Redeem Bonds. The Paying Agent shall call Bonds for redemption and payment and shall give notice of redemption as provided in the Bond Resolution upon receipt by the Bond Registrar at least 45 days prior to the redemption date of a written request of the Authority, provided funds are on deposit with the Paying Agent and are available for such redemption on or prior to such redemption date.

Effect of Call for Redenption. Prior to the date fixed for redemption, funds or Defeasance Obligations shall be deposited with the Paying Agent in an amount sufficient to provide for the payment of the Bonds called for redemption and accrued interest thereon to the redemption date. Upon the deposit of such funds or Defeasance Obligations, and notice having been given as provided in the Bond Resolution, the Bonds or portions of Bonds thus called for redemption shall cease to bear interest on the specified redemption date and shall no longer be entitled to the protection, benefit or security of the Bond Resolution and shall not be deemed to be Outstanding under the provisions of the Bond Resolution.

THE AUTHORITY

The Authority is an independent instrumentality of the State exercising essential public functions, created in 1987 by K.S.A. 74-8901 et seq., as amended (the "KDFA Act"). The Authority was created for the primary purposes of enhancing the ability of the State to finance capital improvements and improving access to long-term financing for State agencies, political subdivisions, public and private organizations and businesses.

The powers of the Authority are vested in the Board of Directors, consisting of five public members appointed by the Governor subject to confirmation by the State Senate. The Governor also appoints a President who serves at the pleasure of the Governor. The President is an ex-officio, non-voting member of the Board of Directors. Not less than three members of the Board of Directors must be representative of the general public and not more than three members may be members of the same political party. The names, offices, principal occupations and places of business of the members of the Authority's Board of Directors and their terms of office are as follows:

Principal Occupation Name Office -Term and Place of Business

Brett A. Reber Chair 12/15/06tol/15/11 Attorney Vice-Chair & 5/02/03 to 111 511 1 McPherson, Kansas Member

Daniel L. Watkins Chair 5/02/03 to 12/15/06 Attorney Vice Chair 1211 5/06 to 111 5/09 Lawrence, Kansas Member 5/02/03 to 1/15/09

John G. Montgomery Member 5/02/01 to 1/15/09 President, Junction City Daily Union Junction City, Kansas

Audrey H. Member 1/29/04 to 1/15/09 Community Volunteer Langworthy Prairie Village, Kansas

Timothy C. Schaller Member 3/23/04 to 111511 1 Architect Lamed, Kansas

Stephen R. Ex-officio 1/27/03 to present President Weatherford Member Kansas Development Finance Authority Topeka, Kansas

Members of the Board of Directors serve until their successors are appointed by the Governor and confirmed by the State Senate. The Authority's General Counsel serves as Secretary to the Authority.

The Authority has the rights, powers and privileges and is subject to the duties provided by the KDFA Act creating it, including the acquisition and disposal of real and personal property for its corporate purposes; the borrowing of money and issuance of notes, bonds and other obligations; the making of secured or unsecured loans for any of the purposes for which it may issue bonds (except making loans directly to individuals to finance housing developments); the provision of technical assistance and advice to the State or political subdivisions of the State; and entering into contracts with the State or political subdivisions thereof to provide such services.

The Series 2009C Bonds ofered hereby, together with the Series 2008A Bonds and any Additional Bonds issued under the Bond Resolution, are separately secured+om all other bonds and notes issued by the Authority, including bonds and notes issued for the benefit of the Board. No recourse shall be had for the payment of the principal of, redemption premium, if any, or interest on any of the Bonds or for any claim based thereon or upon any obligation, covenant or agreement in the Bond Resolution or any other Authority document contained, against any past, present or future officer, director, member, trustee, employee or agent of the Authority, or any officer, director, member, trustee, employee or agent of any successor corporation or body politic, as such, either directly or through the Authority or any successor corporation or body politic, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such officers, directors, trustees, members, employees or agents, as such, is hereby expressly waived and released as a condition of and consideration for the execution of the Bond Resolution and the issuance of any of the Bonds. THE KANSAS BOARD OF REGENTS

As used in this Official Statement the term "Board" means the Board of Regents of the State of Kansas, as provided for in Article 6 of the Kansas Constitution and in the statutes of the State, including, prior to May 20, 1999, the state board of regents established pursuant to K.S.A. 74-3201 et seq. and, on and after May 20, 1999, the State Board of Regents established pursuant to Senate Bill No. 345, 1999 Kansas Legislature, as successor to the state board of regents established pursuant to K.S.A. 74-3201a et seq., and its successors.

The Board consists of nine regents appointed by the Governor and confirmed by the State Senate. The term of office for each regent is four years, with appointments staggered. Not more than five regents may be of the same political party. The Board is a constitutionally established board, responsible for formulating policy under which the State universities operate and for recommending to the State Legislature the amount of State funds to be made available to each institution. With respect to State universities, the Board has the power to make and execute contracts; acquire property; pledge or assign revenues; issue revenue bonds; construct, acquire or improve properties; fix, charge and collect rents, tuition and other fees; contract for services; and execute all acts necessary to the performance of its duties.

The Board controls and supervises the University of Kansas, with its main campus at Lawrence, the Edwards Campus in Overland Park, and the Medical Center with campuses at Kansas City and Wichita; Kansas State University, with its campuses in Manhattan and Salina; Wichita State University; Emporia State University; Pittsburg State University; and Fort Hays State University (collectively, the "State Universitiesyy). Revenue bonds for the State Universities under the direct control of the Board have been issued for various purposes. All outstanding revenue bonds are secured by rentals, student fees and other revenues for various projects at the respective institutions. As of March 1, 2009, the aggregate principal balance (exclusive of revenue bonds previously issued which have been refunded or defeased prior to their maturities) of all revenue bonds for the State Universities under the control of the Board is $388,335,000.

The Board also supervises and coordinates the Institutions, which consist of Washburn University, any community college established by the State and any technical college established by the State. Only the Institutions are eligible for loans to be funded with the proceeds of the Bonds.

The Bonds do not constitute an indebtedness of the State of Kansas, the Board or any other agency thereoJ; or an indebtedness for which the faith and credit or taxingpowers of the State of Kansas are pledged. The Bonds do not constitute a general obligation of the State of Kansas, the Authority, the Board or any other agency thereoJ:

STATE APPROPRIATIONS AND THE BUDGET PROCESS

The Board's obligation under the Pledge Agreement to deposit moneys into the Revenue Fund and any other obligation under the Pledge Agreement are subject to and dependent upon annual appropriations being ~nadeby the Kansas Legislature for such purposes.

General

The State of Kansas operates on a fiscal year basis, beginning on July 1 and ending the following June 30, and numbered for the calendar year in which it ends. The Legislature meets annually in early January and typically adjourns in May. The budget process is designed to provide the Legislature with accurate and detailed revenue projections, along with professionally prepared expenditure budgets for each State agency for the current and succeeding fiscal years. In September of each year, each State agency submits a budget for the succeeding fiscal year to the Department of Administration Division of the Budget. Professional staff at the Department of Administration Division of the Budget analyzes and reviews the budget requests of the State agencies and presents the budgets to the Governor for preliminary gubernatorial approval. The Governor then presents a complete State budget, with funding recommendations, to the Legislature in January, during the first week of the legislative session.

During the legislative session, both the Senate Ways and Means Committee and the House Appropriations Committee review individual agency budgets, including those of the Board, making final recommendations for legislative approval. Staff support for the Legislature also includes professional budget analysts who again scrutinize the budgets.

Once the proposed budget is complete and approved by the Legislature, it is again presented to the Governor for passage into law. The Governor has line-item veto power. The Governor's veto can only be overridden by a two-thirds majority vote of both the House and Senate. This portion of the budget process is completed prior to the beginning of the succeeding fiscal year.

The Kansas Constitution mandates that budgeted expenditures are limited to available funds from current revenue, or a combination of current revenue and available reserves. Once the budget is approved by the Legislature and Governor, State agencies, including the Board, have flexibility within their particular budgets to compensate for necessary modifications due to internal or external reasons. This flexibility allows State agencies to react appropriately to either revenue variances or changing operational needs.

During the fiscal year for which the budget has been prepared, the Governor and Legislature review the budget in progress and have the ability to make necessary adjustments. Continuous expenditure review is performed by the Board and each State agency. Also, current revenues are monitored by the Department of Administration Division of Budget, the Department of Revenue, the Legislative Research Department, the Governor and three economists from the State's three largest State Universities, to ensure fiscal responsibility.

If the State fails to appropriate sufficient funds in a fiscal year for deposit into the Revenue Fund under the Bond Resolution, there will be insufficient moneys to fully pay the principal of and interest on the Bonds.

Current State Budget Issues

Revenue Estinzates. A Consensus Revenue Estimate prepared by the Kansas Division of the Budget, the Kansas Legislative Research Department and the Department of Revenue, in consultation with three economists from the three largest State Universities, is delivered to the Governor and the Legislative Budget Committee twice each year, in or about November and April. The Consensus Revenue Estimate provides an estimate of the revenues expected to be received by the State General Fund for the current fiscal year and the following fiscal year, each ending June 30, and is the base fkom which the Governor and the Legislature build the annual budget.

The Consensus Revenue Estimate dated November 5, 2007, provided the following summary estimates, as well as more detailed information on which such estimates were based. For the fiscal year ended June 30, 2008, the estimate of State General Fund revenues was increased by $160.5 million, or 2.9%, above the previous estimate made in April and subsequently adjusted for final 2007 legislation. The revised estimate of revenues for the State General Fund was $5.717 billion, which was 1.6% below fiscal year 2007 receipts. In addition to providing estimates for fiscal year 2008, the initial estimate for fiscal year ending June 30, 2009 was $6.170 billion, which was $452.8 million, or 7.9%, above the revised fiscal year 2008 figure. It was noted that the fiscal year 2009 estimate took into account (i) 2005- 2007 legislation that will reduce the amount of certain tax receipts deposited into the State General Fund relative to prior law and (ii) a significant increase in certain transfers to local governments. On April 18, 2008, the Consensus Revenue Estimate of State General Fund revenues for fiscal year 2008 was increased by $19.3 million to $5.737 billion, or 0.3%, above the November 2007 estimate, and the estimate for the fiscal year ending June 30, 2009 was decreased by $149.2 million to $6.021 billion, or 2.4%, below the November 2007 estimate. The revised fiscal year 2009 estimate was 5.0%, above the newly revised fiscal year 2008 estimate. Factors influencing the fiscal year 2009 estimate included various tax cuts and increased transfers from the State General Fund enacted in recent years and the 2008 federal stimulus legislation, which was expected to have a negative impact on Kansas income tax receipts in excess of any positive impact of sales or other excise tax receipts.

On June 16, 2008, the Legislative Research Department and Division of the Budget adjusted the most recent estimates of State General Fund receipts to reflect the fiscal impact of legislation involving receipts to the State General Fund enacted during the 2008 Legislative Session subsequent to the Consensus Revenue Estimate made in April. The estimate for fiscal year 2008 was decreased by $0.3 million from the April 2008 estimate to $5.736 billion, and the estimate for the fiscal year ending June 30, 2009 was decreased by $28.3 million, or 0.5%, below the April 2008 estimate, to $5.993 billion.

The Consensus Revenue Estimate dated November 7, 2008 provided the following summary estimates, as well as more detailed information on which such estimates were based. For the fiscal year ended June 30, 2009, the estimate of State General Fund revenues was decreased by $21 1.4 million, or 3.5%, below the previous estimate made in April and subsequently adjusted for final 2008 legislation. The revised estimate of revenues for the State General Fund was $5.781 billion, which was 1.5%, above fiscal year 2008 receipts. In addition to providing estimates for fiscal year 2009, the initial estimate for fiscal year ending June 30, 2010 was $5.782 billion, which was virtually unchanged from the revised fiscal year 2009 estimate. It was noted that the fiscal year 2010 estimate took into account (i) the state of the economy and (ii) 2005-2007 legislation that continues to reduce the amount of severance, estate, corporation franchise and motor carrier property tax receipts deposited into the State General Fund.

The Consensus Revenue Estimates are based upon assumptions, including the health of key sectors of the State's economy and future economic growth rates and changes in growth rates. The original Consensus Revenue Estimates made in November historically have varied from the final Consensus Revenue Estimates made in April prior to each fiscal year ending June 30, and the final estimates made in April have historically varied from the actual revenues received by the State General Fund. Such variations over the last 30 years have been significant as a result of estimates being either too high or too.10~.Material variations between Consensus Revenue Estimates and actual State General Fund receipts can be expected to continue in the current and future fiscal years.

State General Fund Balance. As a part of the its annual budget Comparison Report, most recently released in August 2008, the Kansas Division of the Budget has prepared an outlook for the State General Fund balances as of fiscal year end, based upon the April 16, 2008, Consensus Revenue Estimates as adjusted for legislative action in June 2008, as described above, and the then existing spending authorizations. For the fiscal year ended June 30,2009, the State General Fund ending balance was estimated to decline to $120.6 million. This estimate is subject to subsequent revenue estimates and budget and legislative actions.

For a description of significant downward revisions in the outlook for the State General Fund balances, including those described in the Consensus Revenue Estimate dated November 7,2008, and the FY 2010 Governor's Budget Report released on January 13, 2009, see the caption "Governor's Budget Proposal and Legislative Action" below.

State General F~tizdReceipts. The Kansas Division of the Budget prepares a monthly report comparing the most recent Consensus Revenue Estimate to actual State General Fund receipts. The December 2008 report showed that State General Fund receipts for the six months ended December 31, 2008, were approximately $44.6 million, or 1.6%, below the amount of receipts that were estimated in November 2008 (as described at the caption "Revenue Estimates" above). Of the $44.6 million difference, $37.5 million was from lower than estimated revenues in the month of December 2008.

The January 2009 report showed that State General Fund receipts for the seven months ended January 31, 2009, were approximately $57.1 million, or 1.7%, below the amount of receipts that were estimated in November 2008 (as described at the caption "Revenue Estimates" above). Of the $57.1 million difference, $12.5 million was from lower than estimated revenues in the month of January 2009.

The State General Fund receipts do not include receipts in or revenues of special revenue funds, capital projects funds and debt service funds. For a summary description of the funds in addition to the State General Fund maintained by the State of ICansas, see the Notes to the Financial Statements of the State of Kansas, I. Summary of Significant Accounting Policies, Note D-Fund Accounting, in Appendix A-1 to this Official Statement.

Governor's Budget Proposal and Legislative Action. The FY 2010 Governor's Budget Report, along with the Budget Director's Overview Presentation, was released on the internet website of the Kansas Division of the Budget on January 13, 2009. The Overview Presentation includes an outlook for the State General Fund, providing information to the effect that, based upon the Consensus Revenue Estimate dated November 7, 2008 (described above), and under the existing spending authorizations, the State General Fund ending balances at June 30, 2009, would be negative $142 million and at June 30, 2010, would be negative $944.4 million. With budget solutions recommended by the FY 2010 Governor's Budget Report, the outlook for the State General Fund estimated ending balance at June 30, 2009, is $58.3 million and at June 30,2010, is $0.6 million.

However, as described in "State General Fund Receipts" above, the receipts through January have been below the amounts estimated in the Consensus Revenue Estimate dated November 7,2008 and upon which the Governor's Budget Report is based. In addition, assumptions upon which the Consensus Revenue Estimate dated November 7, 2008, was based, such as employment levels within the State of Kansas, can be expected to be adversely affected by developments since the Consensus Revenue Estimate was made. Such developments include the announcement of layoffs by some of the largest employers in the State of Kansas and changes in overall economic conditions. As a result of such adverse changes, it can be expected that additional reductions in expenditures or increases in revenues may be needed in order to meet the estimated ending balances in the FY 2010 Governor's Budget Report. The FY 2010 Governor's Budget Report and related Budget Directors Overview Presentation do not include the effect of any Federal economic stimulus legislation.

As described above, the Kansas Constitution mandates that budgeted expenditures are limited to available funds from current revenue, or a combination of current revenue and available reserves. Since revenue projections and actual receipts through January are below expectations, steps must be taken by the Governor and the Kansas Legislature to bring revenues and expenditures within the constitutional requirement.

The State Legislature is currently in session and has pending before it matters concerning the budget for the fiscal year ending June 30, 2010. It can be expected that the State Legislature will make changes to the budget proposals of the Governor. In addition, a revised Consensus Revenue Estimate can be expected to be issued no later than April 2009, which is expected to be prior to the State Legislature's final budget actions. It is not possible to determine at this time the final result of legislative actions and the effect upon the budget and balances in the State General Fund in the current or future fiscal years. INFORMATION REGARDING THE STATE

The State's Comprehensive Annual Financial Report for the fiscal year ended June 30, 2008, is set forth in Appendix A-1 to this Official Statement.

Certain information regarding long-term obligations issued subsequent to June 30, 2008, which are payable from State appropriations, is set forth in Appendix A-2 to this Official Statement.

The Governor's Econonzic and Demographic Report for 2008-2009 prepared by the Kansas Division of the Budget, dated January 2009, is set forth in Appendix B to this Official Statement.

INVESTMENT CONSIDERATIONS

THE PURCHASE OF THE SERIES 2009C BONDS IS SUBJECT TO CERTAIN RISKS. EACH PROSPECTIVE INVESTOR IN THE SERIES 2009C BONDS IS ENCOURAGED TO READ THIS OFFICIAL STATEMENT IN ITS ENTIRETY, AND TO GIVE PARTICULAR ATTENTION TO THE FACTORS DESCRIBED BELOW, WHICH, AMONG OTHERS, COULD AFFECT THE PAYMENT OF DEBT SERVICE ON THE SERIES 2009C BONDS, AND WHICH COULD ALSO AFFECT THE MARKET PRICE OF THE SERIES 2009C BONDS TO AN EXTENT THAT CANNOT BE DETERMINED. THIS DISCUSSION OF RISK FACTORS IS NOT, AND IS NOT INTENDED TO BE, EXHAUSTIVE.

NO REPRESENTATION OR ASSURANCE CAN BE MADE OR GIVEN THAT REVENUES WILL BE AVAILABLE TO THE BOARD OR THE AUTHORITY IN AMOUNTS SUFFICIENT TO PAY THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, AND INTEREST ON THE BONDS. ALL SUMS ANTICIPATED BY THE AUTHORITY AND THE BOARD TO BE AVAILABLE FOR THE PAYMENT OF THE BONDS ARE SUBJECT TO ANNUAL APPROPRIATION BY THE KANSAS LEGISLATURE.

No Pledge of Real or Personal Property

The pledge of the Trust Estate does not constitute a pledge of any real or personal property. The Bonds are secured solely by the pledge of the Trust Estate, including the Revenues.

Nonappropriation Risk

The principal of, redemption premium, if any, and interest on the Bonds are payable solely from the Revenues, which are anticipated to be derived primarily from appropriations by the Kansas Legislature for each fiscal year. If the Kansas Legislature chooses not to appropriate funds each year for deposit into the Revenue Fund prior to each Interest Payment Date, in the full amount necessary to pay Debt Service Requirements on the Bonds issued under the Bond Resolution, the Paying Agent will have insufficient funds to pay the principal of, redemption premium, if any, and interest on the Bonds.

Special Obligations

The Bonds are special limited obligations of the Authority, payable solely from the Trust Estate. The obligation of the Board to pay Pledged Revenues does not constitute a debt or liability of the State of Kansas within the meaning of any constitutional or statutory limitation. In no event shall the Bonds constitute an indebtedness of the State of Kansas or an indebtedness for which the full faith and credit or taxing powers of the State of Kansas are pledged. The Bonds do not constitute, nor shall they be construed to be, a general obligation of the State of Kansas, the Board, the Institutions, the Authority or any other governmental entity. Neither the Authority nor the Board has any taxing power independent of the Kansas Legislature. The Kansas Tort Claims Act (K.S.A. 5 75-6101 et seq.) limits the liability of the State of Kansas and its boards, commissions, departments, agencies, bureaus and institutions for damages caused by the negligent or wrongful act or omission of any of their employees while acting within the scope of their employment. Subject to certain exceptions contained within the Kansas Tort Claims Act, liability for claims within the scope of said Act cannot exceed $500,000 for any number of claims arising out of a single occurrence or event. The directors, employees and officers of the Authority are also protected from personal liability, under K.S.A. 5 74-8910, for any reason arising from the issuance of bonds, unless such person acted with willful, wanton or fraudulent misconduct or intentionally tortious conduct. I Taxation of Interest on the Series 2009C Bonds An opinion of Bond Counsel will be obtained to the effect that interest earned on the Series 2009C Bonds is excludable from gross income for federal income tax purposes under current provisions of the Code, and applicable rulings and regulations under the Code; however, an application for a ruling has not been made, and an opinion of counsel is not binding upon the Internal Revenue Service. There can be no assurance that the present provisions of the Code, or the rules and regulations under the Code, will not be adversely amended or modified, rendering the interest earned on the Series 2009C Bonds includable in gross income for federal I income tax, purposes, The Authority and the Board have covenanted in the Bond Resolution, the Pledge Agreement and other documents and certificates to be delivered in connection with the issuance of the Series 2009C Bonds to comply with the provisions of the Code, including those which require the Authority and/or the Board to take or omit to take certain actions after the issuance of the Series 2009C Bonds. Because the existence and continuation of the excludability of the interest on the Series 2009C Bonds depends upon events occurring after the date of issuance of the Series 2009C Bonds, the opinion of Bond Counsel described under the caption "TAX MATTERS" assumes the compliance by the Authority and the Board with the provisions of the Code described above and the regulations relating to the Code. No opinion is expressed by Bond Counsel with respect to the excludability of the interest on the Series 2009C Bonds in the event of noncompliance with such provisions. The failure to comply with the provisions described above may cause the interest on the Series 2009C Bonds.

Nonorigination or Reduced Funding of Loans

The Code imposes special requirements and conditions for the interest on bonds issued by state and local governments for pooled financing programs in order to be and remain exempt from federal income taxation. In particular, the Code requires that: (a) with respect to the one-year period following the issuance of the bonds, (i) as of the date of issuance of an issue of bonds, the issuer must reasonably expect that within the one-year period beginning on the date of issuance, at least 30 percent of the net proceeds of the issue will be used directly or indirectly to make or finance loans to ultimate borrowers; and (ii) to the extent that less than 30 percent of the proceeds of the issue are actually used as described in clause (i), the issuer must use an amount of proceeds equal to the excess of 30 percent of the proceeds over the amount actually used to make loans by the close of such one-year period to redeem outstanding bonds within 90 days after the end of such period; and (b) with respect to the three-year period following the issuance of the bonds, (i) as of the date of issuance of an issue of bonds, the issuer must reasonably expect that within the three-year period beginning on the date of issuance, at least 95 percent of the net proceeds of the issue would be used directly or indirectly to make or finance loans to ultimate borrowers; and (ii) to the extent that less than 95 percent of the proceeds of the issue are actually used as described in clause (i), the issuer must use an amount of proceeds equal.to the excess of 95 percent of the proceeds over the amount actually used to make loans by the close of such three- year period to redeem outstanding bonds within 90 days after the end of such period.

Based on projected construction schedules provided to the Board by the Institutions, the Authority and the Board reasonably expect the Board to expend more than 30 percent and 95 percent of the proceeds of the Series 2009C Bonds during the one-year and three-year periods, respectively, as required by the Code. The Bond Resolution does not provide for the redemption of Series 2009C Bonds upon the failure to satisfy either the 30 percent or 95 percent expenditure requirements. Instead, the Institutions will covenant in the Loan Agreements that the Board shall disburse and the Institutions shall accept disbursements on the Loans in amounts sufficient to satisfy the 30 percent and 95 percent requirements. The Board also retains the right to reallocate unused bond proceeds to other Institutions if necessary in order to satisfy the 30 percent and 95 percent requirements.

Approximately 56% of the proceeds of the Series 2008A Bonds were expended within one year of the date of issuance of the Series 2008A Bonds.

Secondary Market for the Bonds

There is no established secondary market for the Bonds, and there is no assurance that a secondary market will develop for the purchase and sale of the Bonds. Prices of bonds traded in the secondary market are subject to adjustment upward and downward in response to changes in the credit markets. From time to time it may be necessary to suspend indefinitely secondary market trading in selected issues of bonds as a result of the financial condition or market position of the broker-dealer, prevailing market conditions, lack of adequate current financial information regarding the Bonds, whether or not the Bonds are in default as to principal and interest payments, and other factors which may give rise to uncertainty concerning prudent secondary market practices. The Authority has covenanted to comply with the provisions of Rule 15c2-12 of the Securities and Exchange Commission with respect to continuing disclosure information regarding the State and the Bonds, as described at the caption "CONTINUING DISCLOSURE" herein. In the event that the Authority fails to provide such information, it could adversely impact an owner's ability to sell the Bonds in the secondary market.

No Bond Reserve Fund

No bond reserve fund or debt service reserve fund will be established for the Bonds. If adequate funds are not appropriated by the Kansas Legislature each year in the full amount necessary to pay Debt Service Requirements on the Bonds for deposit in the Revenue Fund, there will be insufficient amounts available in the Revenue Fund to provide for principal, redemption premium, if any, and interest payments due on the Bonds.

Legal Matters

Various State and federal laws, regulations, and constitutional provisions apply to the Kansas Legislature, the executive branch of the State government, the State budget and appropriation process and the operations of the Authority and the Board. There is no assurance that there will not be any change in, interpretation of, or addition to such applicable laws, provisions and regulations which would have a material adverse effect, either directly or indirectly, on the State, the Authority or the Board.

Limitations on Remedies Available to Owners of the Bonds

The enforceability of the rights and remedies of the Owners of Bonds and the obligations incurred by the Authority in issuing the Bonds are subject to the following: the Federal Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the United States Constitution; and the reasonable and necessary exercise, in certain unusual situations, of the police power inherent in the State of Kansas and its governmental subdivisions in the interest of serving a legitimate and significant public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or State government, if initiated, could subject the Owners of the Bonds to judicial discretion and interpretation of their rights in bankruptcy and otherwise, and consequently may involve risks of delay, limitation or modification of their rights. Suitability of Investment

The tax exempt feature of the Series 2009C Bonds is more valuable to high tax bracket investors than to investors who are in lower tax brackets, and so the value of the interest compensation to any particular investor will vary with individual tax rates. Each prospective investor should carefully examine this Official Statement, including the Appendices hereto, and its own financial condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Series 2009C Bonds are an appropriate investment.

THE FOREGOING STATEMENTS REGARDING CERTAIN RISKS ASSOCIATED WITH THE OFFERING SHOULD NOT BE CONSIDERED AS A COMPLETE DESCRIPTION OF ALL RISKS TO BE CONSIDERED IN THE DECISION TO PURCHASE THE BONDS.

NO LITIGATION

The Authority

Upon delivery of the Series 2009C Bonds, the Authority will furnish a certificate dated the date of delivery of the Series 2009C Bonds, to the effect that (a) to the knowledge of the signer or signers thereof there is no litigation pending or threatened against the Authority affecting the validity of the Bond Resolution, the Pledge Agreement or the Series 2009C Bonds; and (b) the execution, delivery and performance by the Authority of the Bond Resolution or the Pledge Agreement will not violate any provision of the Constitution, statutes or other laws of the State or any other applicable judgment, order or regulation of any court or of any public or governmental agency or authority of the State and will not conflict with or result in any breach of any of the provisions of, or constitute a default under, any agreement or instrument to which the Authority is a party or by which the Authority or any of its property is or may be bound, nor will such action result in any violation of the provisions of any statute, order, rule or regulation applicable to the Authority of any court or any federal, State or other regulatory authority or other governmental body.

The Board

Upon delivery of the Bonds, the Board will furnish a certificate dated the date of delivery of the Bonds, to the effect that (a) to the knowledge of the signer or signers thereof there is no litigation pending or threatened against the State affecting the validity of the Bond Resolution, the Pledge Agreement or the Series 2009C Bonds; and (b) the execution, delivery and performance by the Board of the Pledge Agreement will not violate any provision of the Constitution, statutes or other laws of the State or any other applicable judgment, order or regulation of any court or of any public or governmental agency or authority of the State and will not conflict with or result in any breach of any of the provisions of, or constitute a default under, any agreement or instrument to which the State is a party or by which the State or any of its property is or may be bound, nor will such action result in any violation of the provisions of any statute, order, rule or regulation applicable to State of any court or any federal, State or other regulatory authority or other governmental body.

BOND RATINGS

Standard & Poor's and Moody's Investors Service ("'Moody's") are expected to assign ratings to the Series 2009C Bonds of "AA," and "Aa2," respectively, which ratings reflects such rating agencies' evaluations of the investment quality of the Series 2009C Bonds. Such ratings reflects only the views of such rating agencies, and an explanation of the significance of such ratings may be obtained therefrom. There is no assurance that a particular rating will remain in effect for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely, if, in the judgment of the agency originally establishing such rating, circumstances so warrant. Any downward revision or withdrawal of any rating may have an adverse effect on the market price of the Series 2009C Bonds. CONTINUING DISCLOSURE

Pursuant to the Continuing Disclosure Undertaking, the form of which is attached hereto as Appendix F (the LbDisclosureUndertaking"), the Board will agree to provide for each Fiscal Year, beginning with the Fiscal Year ended June 30, 2009, certain financial information and operating data with respect to the State, as soon as practicable after it becomes available, but in no event later than 190 days after the end of such Fiscal Year. Such financial information and operating data will consist of information of the type and substantially in the format contained in the State's annual financial statements as set forth in the State's Contprehensive Annual Finarzcial Report of the State of Kansas for the Fiscal Year ended June 30, 2008, attached as Appendix A-1 to this Official Statement. In addition, as set forth in the Disclosure Undertaking, the Authority has agreed to give notice,,of the occurrence of certain material events relating to the Bonds as required by Rule 15c2-12 of the Securities and Exchange Commission (the "SEC Rule"). The Authority has agreed to transmit the financial information and operating data provided by the Board, together with notice of the occurrence of material events relating to the Bonds as provided in the Disclosure Undertaking, to certain national municipal securities information repositories and the Municipal Securities Rulemaking Board, as applicable. The Board and the Authority have made such agreement in order to assist the Underwriters in complying with the SEC Rule.

Neither the Board nor the Authority has failed in any material way to comply with any previous undertakings pursuant to the SEC Rule.

For the form of the Disclosure Undertaking, see Appendix F to this Official Statement.

LEGAL MATTERS

Matters incident to the authorization and issuance of the Bonds are subject to the approval of Gilmore & Bell, P.C., Bond Counsel. The form of the approving opinion of Bond Counsel is attached.as Appendix G to this Official Statement. Certain legal matters will be passed upon for the Authority by its general counsel, Rebecca E. Floyd, Esq., for the Board by its general counsel, Julene L. Miller, Esq., and for the Underwriters by their counsel, Gates, Shields & Ferguson, P.A.

TAX MATTERS

Opinion of Bond Counsel

Federal Tax Exemption. In the opinion of Bond Counsel, under existing law, the interest on the Series 2009C Bonds (including any original issue discount properly allocable to an Owner thereof) is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. It should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. The opinions set forth in this paragraph are subject to the condition that the Authority and the Board comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Codeyy),that must be satisfied subsequent to the issuance of the Series 2009C Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Authority and the Board have covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Series 2009C Bonds in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2009C Bonds. The Series 2009C Bonds have not been designated as "qualified tax-exempt obligations" for purposes of Section 265(b) of the Code. Original Issue Premium. Certain of the Series 2009C Bonds, for which the original offering yield is less than the interest rate thereon, or for which the original offering price is greater than 100% (as shown on the inside cover page hereof), are being sold at a premium to their stated value. The excess of the initial offering prices of the Series 2009C Bonds to the public (excluding bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) over the stated redemption price of such Series 2009C Bonds at maturity will constitute original issue premium for federal income tax purposes. For federal income tax purposes, original issue premium on such Series 2009C Bonds will be amortized at a constant rate on a daily basis over the entire term of such Series 2009C Bonds. The amortization of original issue premium will reduce a bondholder's basis in such Series 2009C Bonds for federal income tax purposes. Accordingly, bondholders may realize a taxable gain upon the disposition of a Bond prior to maturity, even if the amount realized on the disposition was less than the price the bondholder originally paid for the Bond.

Bond Counsel expresses no opinion regarding other federal tax consequences arising with respect to the Series 2009C Bonds.

Kansas Tax Exeniption. The Series 2009C Bonds and the interest paid thereon are exempt from all Kansas state, county and municipal taxes, including income, inheritance and property taxes.

Collateral Tax Consequences

Prospective purchasers of the Series 2009C Bonds should be aware that (i) Section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Series 2009C Bonds or, in the case of a financial institution, that portion of such institution's interest expense allocable to interest on the Series 2009C Bonds; (ii) with respect to insurance companies subject to the tax imposed by Section 83 1 of the Code, Section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15% of the sum of certain items, including interest on the Series 2009C Bonds; (iii) interest on the Series 2009C Bonds earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by Section 884 of the Code; (iv) passive investment income, including interest on the Series 2009C Bonds, may be subject to federal income taxation under Section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year, if greater than 25% of the gross receipts of such Subchapter S corporation is passive investment income; and (v) Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in determining gross income, receipts or accruals of interest on the Series 2009C Bonds. These categories of Owners should consult their own tax advisors as to the applicability of these consequences.

FINANCIAL ADVISOR

Columbia Capital Management, LLC, Overland Park, Kansas, has served as Financial Advisor to the Authority. The Financial Advisor has assisted in various matters relating to the planning, structuring and issuance of the Series 2009C Bonds, including advice in the preparation of this Official Statement. The Financial Advisor has not passed on the accuracy or completeness of the factual information contained in this Official Statement. The Financial Advisor has not participated in any underwriting syndicate that will purchase or sell any of the Series 2009C Bonds.

UNDERWRITING

Morgan Stanley & Co. Incorporated, on behalf of itself and Piper Jaffray & Co. and George K. Baum & Company (collectively, the "Underwriters"), has agreed, subject to certain conditions, to purchase the Series 2009C Bonds at an aggregate purchase price of par, plus an original issue premium of $858,209.75, less an underwriting discount of $155,363.44. The Bond Purchase Agreement provides that the Underwriters shall purchase all of the Series 2009C Bonds if any are purchased, subject to the conditions contained therein. The Series 2009C Bonds may be offered and sold to certain dealers, banks and others at prices different that the offering prices indicated on the inside cover page hereof, and such offering prices may be changed from time to time.

MISCELLANEOUS

The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents, and reference is made to all such documents for full and complete statements of all matters of fact relating to the Series 2009C Bonds, the security for the payment of the Series 2009C Bonds and the rights of the Owners thereof. During the period of the offering, copies of drafts of such documents may be examined at the offices of the Authority and the Underwriters. Following delivery of the Series 2009C Bonds, copies of such documents may be examined at the office of the Authority.

The information contained in this Official Statement has been compiled from official and other sources deemed to be reliable and while not guaranteed as to completeness or accuracy, is believed to be correct as of the date thereof.

Any statement made in this Official Statement, including all appendices hereto, involving matters of opinion or of estimates, whether or not expressly so stated, is set forth as such and not as representation of fact, and no representation is made that any of the estimates will be realized. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the information presented herein since the date hereof. This Official Statement is not to be construed as a contract or agreement between the Authority and any of the purchasers or Owners of the Series 2009C Bonds.

Any requests for additional information with respect to the Authority and the Series 2009C Bonds may be addressed to the Kansas Development Finance Authority, Suite 202, 555 South Kansas Avenue, Topeka, Kansas 66603, Attention: Rebecca E. Floyd, Executive Vice President.

The preparation of this Official Statement and its distribution and use by the Underwriters have been authorized by the Authority, as of its date on the cover page hereof.

KANSAS DEVELOPMENT FINANCE AUTHORITY

By: Is/ Rebecca E. Floyd Executive Vice President APPENDIX A-1

COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE STATE OF KANSAS (JULY 1,2007 TO JUNE 30,2008) (THIS PAGE LEFT BLANK INTENTIONALLY) STATE OF KANSAS Department of Administration Division of Accounts and Reports

COMPREHENSIVE ANNUAL FINANCIAL REPORT

July 1,2007 to June 30,2008

Duane A. Goossen, Secretary Kent E. Olson, Director STATE OF KANSAS

Department of Administration

Duane A. Goossen Kent E. Olson

Secretary Director of of Administration Accounts and Reports State of Kansas Fiscal Year 2008 Financial Report June 30. 2008

Table of Contents

INTRODUCTION ...... vi

Letter of Transmittal ...... vii Profile of the Government ...... vii... Financial Information ...... vili ... Cash Management ...... vill Risk Management ...... ix Pension Trust Fund Operations ...... ix Acknowledgments ...... ix

Organizational Chart ...... x

List of Selected Officials ...... xi

FINANCIAL SECTION ...... 1

Report of Independent Auditors ...... 3

Management's Discussion and Analysis ...... Financial Highlights ...... Overview of the Financial Statements...... Government-wide Financial Analysis ...... Financial Analysis of the State's Individual Funds ...... General Fund Budgetary Highlights ...... Capital Assets and Debt Administration ...... Economic Factors ...... Financial Statements ...... Government-wide - Statement of Net Assets ...... Government-wide - Statement of Activities ...... Balance Sheet - Governmental Funds ...... Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds ...... Statement of Net Assets - Proprietary Funds ...... Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary...... Statement of Cash Flows - Proprietary Funds ...... Statement of Fiduciary Net Assets ...... Statement of Changes in Fiduciary Net Assets ...... Combining Statement of Net Assets - Component Units ...... Combining Statement of Activities - Component Units ...... Table of Contents Continued

Notes to the Financial Statements: I . Summary of Significant Accounting Policies ...... A . Financial Reporting Entity ...... B . Government-wide and Fund Financial Statements ...... C . Measurement Focus of Accounting and Financial Statement Presentation ...... D . Fund Accounting ...... E . Assets, Liabilities. and Net Assets or Equity ...... F . Use of Estimates ...... G . Pending Governmental Accounting Standards Board Statements ......

I1. Stewardship Compliance and Accountability ...... 44 A . Excess of Expenditures Over Appropriations ...... 44 B . Deficit Fund Equity ...... 44

I11 . Detailed Notes on All Funds ...... A . Deposits and Investments ...... B . Investments ...... C . External Investment Pool ...... D . Receivables...... E . Investment in Direct Financing Leases ...... F . Restricted Assets ...... G . Equity ...... H . Capital Assets ...... I . Interfund Receivables, Payables, and Transfers ...... J . Short-term Obligations ...... K . Long-term Obligations...... L . Revisions to Beginning Net Assets......

IV . Other Information ...... 88 A . Risk Management ...... 88 B . Contingencies and Commitments ...... 89 6. Post Employment Benefits ...... 90 D . Employee Retirement Systems and Pension Plans ...... 93 E . Subsequent Events ...... 94 fhEQUIRED SUPPLEMENTARY INFORMATION ...... 97

Budgetary Information ...... 98 Schedules of Revenues. Expenditures. and Changes in Fund Balances .Budget and Actual General Fund ...... 99 General Fund .Budgetary to GAAP Reconciliation...... 100 Transportation Fund ...... 101 Transportation Fund .Budgetary to GAAP Reconciliation ...... 102 Health Policy Authority Fund ...... 103 Health Policy Authority Fund - Budgetary to GAAP Reconciliation...... 104 Support of Modified Approach for Kansas Department of Transportation Infrastructure Reporting ...... 105 Table of Contents Concluded I

OTHER SUPPLEMENTARY INFORMATION ...... 106

Listing ofNon-major Governmental Funds ...... 107 Combining Balance Sheet .Governmental Non-major Funds ...... 109 Combining Statement of Revenues. Expenditures. and Changes in Fund Balances . Governmental Non-major Funds ...... 117 Listing of Non-major Proprietary Funds...... 125 Combining Statement of Net Assets - Proprietary Non-major Funds ...... 126 Combining Statement of Revenues, Expenditures, and Changes in Fund Net Assets - Proprietary Non-major Funds ...... 127 Listing of Non-major Internal Service Funds ...... 128 Combining Statement of Net Assets - Non-major Internal Service Funds ...... : ...... 129 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Non-major Internal Service Funds ...... 131

STATISTICAL SECTION: (Unaudited) ...... 133

Financial Trends Net Assets by Type ...... 135 Changes in Net Assets ...... 137 Revenues and Other Changes in Net Assets ...... 139 Fund Balances. Governmental Funds ...... 141 Changes in Fund Balances. Governmental Funds ...... 143 Revenue Capacity Personal Income by Industry ...... 145 Debt Capacity Long Term Debt Obligations ...... 147 Demographic and Economic Information Kansas Demographic Statistics ...... 149 Principal Employers in Kansas ...... 150 Operating Information Full-time Equivalent State Government Employees by Function/Program ...... 151

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT A UDITING STANDARDS ...... 153 INTRODUCTION Kathleen Sebelivs, Governor Kenf E. Olson, Direcfor DEPARTMENT OF ADMINISTRATION December 3 1,2008

The Honorable Kathleen Sebelius, Governor of the State of Kansas Members of the Legislature and Citizens of the State of Kansas:

It is my pleasure to submit to you the 55thAnnual Financial Report of the State of Kansas for the fiscal year ended June 30, 2008, as provided by Kansas Statutes Annotated (K.S.A.) 75-3735. This Comprehensive Annual Financial Report (CAFR) has been prepared in conformance with generally accepted accounting principles (GAAP). The objective of this is to provide a clear picture of the government as a single, unified entity as well as providing traditional fund based financial statements.

This report is presented in three sections. The Introductory Section includes this transmittal letter, the organizational chart and a listing of selected officials. The Financial Section includes the independent auditors' report, Management's Discussion and Analysis, the basic financial statements and notes, the Required Supplementary Information and Other Supplementary Information. The Statistical Section includes unaudited tables and financial trend information.

This report is prepared by the Department of Administration, Division of Accounts and Reports. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the State government and this office. The enclosed information is accurate in all material respects and is reported to present fairly the financial position and activities of the State of Kansas. All necessary disclosures to enable the reader to understand the State's financial activities have been included.

The State's financial statements have been audited by Allen, Gibbs & Houlik, L.C. and Berberich Trahan & Co., P. A., two firms of licensed Certified Public Accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the State of Kansas for the fiscal year ended June 30, 2008, are free of material misstatement. This independent audit was part of the federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standards here also require the auditor to report on the State of Kansas' internal controls and compliance with legal requirements. A copy of the separately issued Single Audit Report can be obtained fiom the Legislative Division of Post Audit.

PROFILE OF THE GOVERNMENT

The State government is comprised of three branches: the Executive Branch, with the Governor as chief executive; the Legislative Branch, consisting of a Senate of 40 members and a House of Representatives of 125 members; and the Judicial Branch, which includes the Supreme Court, the Appeals Court and the District Trial Courts. The State provides a full range of services including education, safety, social services, recreation and transportation. s he annual budget serves as the

DIVISION QF ACCOUNTS & lrmRT.S 900 S.W. Jackson Streeq Room 3%,Tupeka, KS 66612-1248 * f785) 296-2314 * Fax: 1785) 296-6841 e-maif: [email protected] vii foundation of the State's financial planning and control. On or before October 1, agencies are required to submit annually or biennially budget estimates for the next fiscal year to the Division of Budget. These estimates are used in preparing the Governor's budget report. On or before the eighth calendar day of each regular legislative session, the Governor is required to submit the budget report to the Legislature. However, in the case of the regular legislative session immediately following the election of a governor, who was elected to the Office of Governor for the first time, that governor must submit the budget report to the Legislature on or before the 21" calendar day of that regular session.

FINANCIAL INFORMATION

Kansas has a centrally maintained computerized double-entry accounting system. Management is responsible for establishing and maintaining an internal control structure to ensure that government assets are protected from loss, theft or misuse, and that adequate data are compiled to prepare meaningful financial statements. Internal accounting controls have been implemented for reasonable, but not absolute, assurance for safeguarding assets and accurately recording financial transactions. "Reasonable assurance" is based upon the premise that: (1) the cost of a control should not exceed the benefits likely to be derived, and (2) the valuation of cost and benefits requires estimates and judgments by management. As a recipient of federal financial assistance, the State is also responsible for implementing internal controls for compliance with applicable laws and regulations related to those programs. This internal control structure is subject to periodic evaluation by management and the internal audit staff of the government.

The State also maintains budgetary restrictions and controls, which are imposed through annual appropriations and limitations, approved by the Legislature. Annual appropriated budgets are adopted for the State General Fund and certain Special Revenue, Capital Project, Enterprise, Internal

I Service and Trust and Agency funds. The level of budgetary control in the central accounting system is usually established by agency, fund and budget unit. Budgetary control is maintained by : mechanisms in the accounting system, which prevents expenditures and firm encumbrances in excess I of appropriations or limitations and/or available cash. Encumbrances are reported as expenditures I for budgetary purposes and reserved and designated fund balances in the financial statements ' included in this report. I

CASH MANAGEMENT

On a daily basis, the State monitors receipts to, and expenditures out of, the State Treasury. It also employs cash flow tools and techniques that maximize revenues without incurring undue risk. The State invests idle funds to match anticipated cash flow needs by using government securities, collateralized bank deposits, and high grade commercial paper to provide safety, liquidity, and yield, in that order. As a cash flow management policy, the State seeks to avoid borrowing from its own idle funds to meet expenditure obligations of the State General Fund.

I The State maintains investments in addition to idle moneys. Authorized agencies may make ,1 investments independently of the State Treasury pooled cash. Generally the Pooled Money I Investment Board (PMIB) acts as agent for these investments. Certain funds, such as Kansas Public Employees Retirement System and the Unemployment Insurance Fund, are statutorily exempted from PMIB oversight. Deposits in the Municipal Investment Pool, an investment option established by the 1992 legislature for local governments, are also invested by the PMIB.

DlVlSIOEJ OF ACCOUNTS & REPORTS 908 S.W. Jackson Street, Row351, Topeka, KS 66612-1248 * (785) 296-23 14 * Fax (785) 296-6841 e-ma2 [email protected]~v *.. Vlll RISK MANAGEMENT

The State maintains a combination of commercial insurance and self-insurance to cover the risk of losses to which it may be exposed. This is accomplished through risk management and various outside entity commercial insurance providers. It is the policy of the State to cover the risk of certain losses to which it may be exposed through risk management activities. In general, the State is self- insured for certain health care claims (prescription drug and dental plus three of eight medical health plan options), State employee workers' compensation, long-term disability, tort liability, personal property, and real estate property losses up to $500,000 (except where separate coverage is required by bond covenant). The State has commercial vehicle liability coverage on all vehicles, and a statewide commercial policy on real property valued at $500,000 or more (except where separate coverage is required by bond covenant). Insurance settlements have not exceeded insurance coverage for the past three fiscal years.

Risk is managed by positively addressing various benefits and liabilities through review, legislation and administration to assure that claims are promptly and correctly adjudicated and that appropriate and fair benefits and liabilities are reflected in the statutes and regulations. Where cost effective and appropriate, such as limiting the impact of a catastrophic occurrence to the State buildings, the State has limited its exposure through high deductible catastrophic loss insurance.

PENSION TRUST FUND OPERATIONS

The Kansas Public Employees Retirement System is an umbrella organization administering three statewide retirement systems under one plan. These systems are Kansas Public Employee Retirement System, Kansas Police and Firemen's Retirement System and Kansas Retirement System for Judges. Further information on State participation in the retirement system can be found in the Notes to the Financial Statements located in the Financial Section.

ACKNOWLEDGEMENTS

I wish to express my deepest appreciation and thanks to those on my staff responsible for the preparation of this report. It is through their dedicated effort that this report was made possible. I also wish to thank the many other individuals in the State agencies whose contributions made this report possible.

Sincerely,

Kent E. Olson, Director Division of Accounts and Reports

DIVISION OF ACCOUNTS & REPOmS 980 S.W. Jackson S&e4Room35l,Topeka, f(S 66512-1248 * (785)296-2314 * Fw. (785) 296-6841 s-mail: kent.oIso~@&h.g~v ix State of Kansas Organizational Chart June 30,2008

Voters of Kansas

Attorney Commissioner Governor General of Insurance State Kansas Health Care Lt. Governor Council Bureau of StabilizationFund I Investigation Board of Division of DISC HIH ' Governors I Budget Kansas Health Policy I the Blind I theDeaf I State of Kansas List of Selected Officials June 30,2008

Executive Branch Legislative Branch Judicial Branch

Governor Speaker of the House of Supreme Court of Kansas Kathleen Sebelius Representatives Chief Justice Melvin Neufeld Kay McFarland Lieutenant Governor Mark Parkinson Speaker Pro Tempore of Jz~stices the House of Lee A. Johnson Secretary of State Representatives Carol A. Beier Ron Thornburgh Donald Dahl Robert E. Davis Eric S. Rosen State Treasurer President of the Senate Marla J. Luckert Lynn Jenkins Stephen R. Morris Lawton R. Nuss

Attorney General Vice President of the Stephen N. Six Senate Court of Appeals John Vratil Chief Judge Commissioner of Gary W.Rulon Education Chief Clerk of the House of Alexa Posny Representatives Judicial Council Janet E. Jones Executive Director Commissioner of Randy M. Hearrell Insurance Secretary of Senate Sandy Praeger Pat Saville Judicial Administrator Howard P. Schwartz Legislative Coordinating Council Stephen R. Morris

Legislative Research Alan Conroy FINANCIAL

SECTION 301 N. Main, Suite 1700 3630 SW Burlingame Road Wichita, Kansas 67202-4868 Topeka, Kansas 66611-2050 Phone (316) 267-7231 Phone (785) 234-3427 Fax (316) 267-0339 Fax (785) 233-1768 Allen, Gibbs & Houlik, L.C. w.aShlC.COm btandcocpa.com BERBERICH TRAHAN &f CO.,P.A. CPAs & Advisors Cert~jredPublic Accountonts

INDEPENDENT AUDITOR'S REPORT

Legislative Post Audit Committee Kansas State Legislature State of Kansas

We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the State of Kansas (State), as of and for the year ended June 30, 2008, which collectively comprise the State's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the State's management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the various component units of the six state universities, which represent 53 percent and 30 percent, respectively, of the assets and revenues of the aggregate discretely presented component units, the Kansas Technology Enterprise Corporation (KTEC) which represents less than 1 percent of the assets and revenues of the aggregate discretely presented component units, and the College Savings Program (a State Fiduciary Fund) which represents 7 percent and 8 percent, respectively, of the assets and revenues of the aggregate remaining fund information . Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the component units of the six state universities and the KTEC in the aggregate discretely presented component units, and the College Savings Program in the aggregate remaining fund information, is based solely on the reports of the other auditors. - We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The financial statements of the various component units of the six state universities and the College Savings Program, were not audited in accordance with Government Auditing Standards. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the State, as of June 30,2008, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

RSU McGladrey Network hkdcpmhtlyMMembw In accordance with Government Auditing Standards, we have also issued our report dated January 15, 2009 on our consideration of the State's internal control over financial reporting and 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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis and budgetary comparison information on pages 5 through 17, and the information needed to support the modified approach for infrastructure reporting on pages 105 through 106 are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We and the other auditors have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the State's basic financial statements. The combining and individual nonmajor fund financial statements and other schedules, listed in the table of contents as supplementary information, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual non-major fund financial statements have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, based on our audit and the reports of the other auditors, are fairly stated in all material respects, in relation to the basic financial statements taken as a whole. The accompanying introductory and statistical sections, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. This information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. dU1~en,Gc66s 4 HO~L~,L.C. ~erbeur'ch7rahan & Co., I? fie CERTIFIED PUBLIC ACCOUNTANTS CERTIFIED PUBLIC ACCOUNTANTS

January 16,2009 Wchita, Kansas State of &insis - Management's Discussion and Analysis June 30,2008

MANAGEMENT'S DISCUSSION AND ANALYSIS

This narrative overview and analysis of the State of Kansas Comprehensive Annual Financial Report (CAFR) is provided for readers of the financial statements for the fiscal year ended June 30, 2008. This information is to be used in conjunction with the additional information hished in the preceding letter of transmittal and with the financial statements that follow. All amounts, unless otherwise indicated, are expressed in thousands of dollars.

FINANCIAL HIGHLIGHTS

Government-wide highlights:

The assets of the State exceeded its liabilities at fiscal year ending June 30, 2008 by $11.1 billion (presented as "net assets"). Of this amount, $104.9 million was reported as unrestricted net assets, which represents the amount available to be used to meet ongoing obligations to citizens and creditors.

Total net assets increased by $1 million (0.01% increase) in fiscal year 2008. Net assets of governmental activities increased by $9:9 million (0.1% increase), and net assets of the business-type activities decreased $8.9 million (0.8% decrease).

Fund highlights:

For fiscal year 2008, the governmental funds reported a combined ending fund balance of $1.2 billion, a decrease of $241.7 million in comparison with the prior year. Of the total amount, $641.2 million represents the hnd balance of the Transportation Fund. There is $280.7 million in the "unreserved fund balances". The reserved balances of $873.4 million include the reserve for advances to other funds of $1 17.2 million and the reserve for encumbrances of $697.9 billion.

Long-term debt:

The State's total long-term debt obligation showed a net decrease of $16.1 million (0.3%) during the current year. This decrease was primarily due to a $42.9 million decrease in revenue bonds, a $32.5 million decrease in STAR bonds, and a $59.3 million increase in other long-term obligations.

OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the State of Kansas basic financial statements. The basic financial statements include three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains required supplementary information and other supplementary information in addition to the basic financial statements.

Basic Financial Statements

The basic financial statements include two kinds of financial statements that present different views of the State - the Government-wide Financial Statements and the Fzind Financial Statements. These financial statements also include the Notes to the Financial Statements that explain some of the information in the financial statements and provide more detail. State of Kansas Management's Discussion and Analysis June 30,2008

Government-wide Financial Statements

The Government-wide Financial Statements provide a broad view of operations in a manner similar to a private-sector business. The statements provide both short-term and long-term information about the financial position to assist in assessing the State's economic condition at the end of the fiscal year. These are prepared using the flow of economic resources measurement focus and the accrual basis of accounting. This method is similar to those used by most businesses and takes into account all revenues and expenses connected with the fiscal year, even if cash involved has not been received or paid. The government-wide financial statements include two statements:

The Statement of Net Assets presents all of the government's assets and liabilities, with the difference between the two reported as "net assets". Over time, increases or decreases in the State's net assets may serve as a useful indicator of whether the financial position is improving or deteriorating.

The Statement of Activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will not result in cash flows until future fiscal periods (such as uncollected taxes and earned but unused vacation leave). This statement also presents a comparison between direct expenses and program revenues for each function of the State.

Both of the above financial statements have separate sections for three different types of State programs or activities. These three types of activities are:

Governnzental Activities - The activities in this section are mostly supported by taxes and intergovernmental revenues (federal grants). Most services normally associated with State government fall into this category, including education, general government, health services, judiciary services, museums, natural resources, public safety, defense, regulatory services, social services, and transportation.

Busirzess-type Activities - These functions normally are intended to recover all or a significant portion of their costs through user fees and charges to external users of goods and services.

Discretely Presented Component Units - These are operations for which the State has financial accountability but they have certain independent qualities as well. For the most part, these entities operate similar to private sector businesses and the business-type activities described above.

Financial statements of the individual component units can be found in the basic financial statements following the fund statements. Addresses and other additional information about component units are presented in the notes to the fmancial statements. The government-wide financial statements can be found immediately following this discussion and analysis.

Fund Financial Statements

A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The State, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

The fund financial statements focus on individual parts of the State government, reporting the operations in more detail than the government-wide statements. All of the funds can be divided into three categories. It is important to note that these fund categories use different accounting approaches and should be interpreted differently. The three categories of funds fmancial statements are:

Governmental Fzlrtds Financial Statements - Most of the basic services provided by the State are financed through governmental type funds. Governmental funds are used to account for the functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide State of Kansas Management's Discussion and Analysis June 30,2008

fmancial statements, the governmental fund financial statements focus on near-term inflows and outflows of expendable resources. They also focus on the balances of expendable resources available at the end of the fiscal year. This information may be helpful in evaluating the government's near-term fmancial requirements. This approach is known as the flow of current financial resources measurement focus and the modified accrual basis of accounting. These statements provide a detailed short-term view of State finances that assists in determining whether there will be adequate financial resources available to meet the current needs of the State.

Because the focus of governmental funds is narrower than that of the government statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term fmancing decisions. Both the Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliations are presented on the page immediately following each governmental fund fmancial statement.

The State has four governmental funds considered major funds for presentation purposes. Each major fund is presented in a separate column in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances. The four governmental funds are - the General Fund, the Transportation Fund, the Transportation-Capital Projects Fund, and the Health Policy Authority Fund. The basic governmental funds financial statements can be found immediately following the government-wide statements.

Proprietary Ful-tds Financial Statements - These funds are used to show activities that operate more like those of commercial enterprises. Because these funds charge fees for services provided to outside customers including local governments, they are known as enterprise funds. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. Like the government-wide financial statements, proprietary fund fmancial statements use the accrual basis of accounting. No reconciliation is needed between the government-wide financial statements for business-type activities and the proprietary fund financial statements.

The State's major proprietary funds for presentation purposes are the Unemployment Insurance Fund (within the Department of Labor), the Water Pollution Control and Public Water Supply Revolving Loan Funds (within the Department of Health and Environment) and the Health Care Stabilization Fund.

The basic proprietary funds fmancial statements can be found immediately following the governmental fund fmancial statements.

Fiduciary Fzinds Financial Statements - These funds are used to account for resources held for the benefit of parties outside the State government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of these funds are not available to support the State's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. They use the accrual basis of accounting.

The fiduciary funds are the Kansas Public Employees Retirement Fund, the Investment Trust Fund (which accounts for the transactions, assets, liabilities and fund equity of the external investment pool), the College Savings Program (a private purpose trust fund) and the Agency Funds (which account for the assets held for distribution by the State as an agent for other governmental units, other organizations or individuals). Individual fund detail can be found in the combining financial statements described below.

The basic fiduciary funds financial statements can be found immediately following the proprietary fhds financial statements. State of Kansas Management's Discussion and Analysis June 30,2008

Notes to the Finaizcial Statenzeizts

The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and the fund financial statements. The notes to the fmancial statements can be found immediately following the financial statements.

Required Supplementary Information

The basic financial statements are followed by a section of required supplementary information, which consists of schedules and related notes. Schedules include budgetary comparisons for the major funds and the Kansas Department of Transportation modified approach explanation. Comparisons can be made between the original budget, final budget, and actual revenues and expenditures. This section also includes in the notes reconciliation between budgetary basis and the accrual basis for major funds as presented in the governmental funds financial statements.

Other Supplementary Information

Combining Financial Statements

The combining financial statements are presented following the required supplementary information. The total columns of these combining financial statements carry to the applicable fund financial statement.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

Net Assets

As noted earlier, net assets may serve over time as a useful indicator of the financial position of a government. The combined net assets of the State (government and business-type activities) totaled $1 1.1 billion at the end of 2008, and at the end of the previous year .

The largest portion of net assets reflects investment in capital assets such as land, buildings, equipment, and infrastructure (roads, bridges, and other immovable assets), less any related debt used to acquire those assets that are still outstanding. The State uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided fiom other sources, since the capital assets themselves cannot be used to liquidate these liabilities. State of Kansas Management's Discussion and Analysis June 30,2008

State of Kansas Net Assets - Primary Government (expressed in thousands)

Governmental Activities Business-type Activities Total 2008 2007 2008 2007 2008 2007

Current assets $ 2,762,901 $ 3,042,366 $ 1,986,881 $ 2,015,140 $ 4,749,782 $ 5,057,506 Capital assets 1 1,529,174 11,314,518 364 256 11,529,538 11,3 14,774 Other assets 15,035 15,470 21,601 13,402 36,636 28,872 Total assets 14,307,110 14,372,354 2,008,846 2,028,798 16,315,956 16,401,152

Non-current liabilities 2,520,288 2,576,518 846,070 862,527 3,366,358 3,439,045 Other liabilities 1,812,415 1,831,313 77,146 71,789 1,889,561 1,903,102 Total liabilities 4,332,703 4,407,83 1 923,216 934,3 16 5,255,919 5,342,147

Invested in capital assets, net of related debt 9,800,244 9,538,694 364 256 9,800,608 9,538,950 Restricted 87,640 93,923 1,066,934 1,087,458 1,154,576 1,181,381 Unrestricted 86,523 331,906 18,330 6,768 104,853 338,674 Total net assets $ 9,974,407 $ 9,964,523 $ 1,085,630 $ 1,094,482 $ 11,060,037 $ 11,059,005

An additional portion of net assets represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets may be used to meet the ongoing obligations to citizens and creditors. Internally imposed designations of resources are not represented as restricted net assets.

At the end of the current fiscal year, the State is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year.

State of Kansas Net Assets - Component Units (expressed in thousands)

Component Units 2008 2007 Current assets $ 2,813,348 $ 2,405,143 Capital assets 1,637,466 1,546,814 Other assets 804,206 1,139,648 Total assets 5,255,020 5,091,605

Non-current liabilities 894,730 897,220 Other liabilities 642,762 631,162 Total liabilities 1,537,492 1,528,382

Invested in capital assets, net of related debt Restricted Unrestricted Total net assets State of Kansas Management's Discussion and Analysis i June 30,2008 I I Changes in Net Assets -Primary Government I I Net assets increased by $lmillion or 0.01%. Approximately 60% ofthe total revenue came fTom taxes, while 28.5% ' resulted fiom grants and contributions (including federal aid). Charges for various goods and services provided 9.9% of the total revenues. Expenses cover a range of services. The largest expenses of total expenses were for / education (42.1%), human resources (27.5%), and general government (8.3%). State of Kansas Changes in Net Assets - Primary Government (expressed in thousands)

Governmental Activities Business-type Activities Total 2008 2007 2008 2007 2008 2007 Revenues:I I Program revenues:

Expenses:I General government yuman resources Ijducation Public safety Agriculture and natural resources Ifighways and other transportation qealth and environment Economic development Gterest expense Water pollution and safety Health care stabilization ~rn~lo~mentsecurity Workers' compensation Lottery Intergovernmental transfer program ~bns~ortationrevolving fund ITotal expenses i Increase (decrease) in net assets before 'transfers (53.013) 402.876 70,322 192,981 17,.309 595,857 ~rhinsfers ~dangein net assets I - Net assets, beginning of year 9,964,526 9,551,078 1,094,482 971,382 11,059,008 10,522,460 ~dvisionsto beginning net assets (15,266 ) (59,312) (1,014) 0 (16,280) (59,3121 ~4tassets, beginning of year (restated) 9,949,260 9,491,766 1,093,468 971,382 11,042,728 10,463,148 Net assets, end of year $ 9,974,407 $ 9,964,523 $ 1,085,630 $ 1,094,482 $ 11,060,037 $ 11,059,005 State of Kansas Management's Discussion and Analysis June 30,2008

Changes in Net Assets - Component Units

Component unit net assets increased by $154.3 million or 4.3%. Charges for various goods and services provided 49.1% of the total revenues. Approximately 35.3% of the total revenue came fiom Other revenue, while 15.7% resulted fiom grants and contributions (including federal aid). Expenses cover a range of services and are shown below by component unit below.

State of Kansas changes in Net Assets - Component Unit (expressed in thousands)

Component Units

Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Taxes: Gross receipts taxes Investment earnings Other revenue Total revenues

Expenses: Kansas Development Finance Authority 1,277 1,280 Kansas Technology Enterprise Corp. 16,501 13,670 Kansas Bioscience Authority 8,983 3,737 State University System 1,725,676 1,521,080 Kansas Housing Resources Corp. 75,193 64,32 1 Total expenses 1,827,630 1,604,088

Change in net assets 162,591 417,076 Net assets, beginning of year 3,563,222 3,159,615 Revisions to beginning net assets (8,285) (13,468)

Net assets, beginning of year (restated) 3,554,937 3,146,147 Net assets, end of year $ 3,717,528 $ 3,563,223 State of Kansas Management's Discussion and Analysis June 30,2008

Governmental Activities

Governmental activities increased net assets by $9.9 million in fiscal year 2008. For the State's governmental activities a comparison of the cost of services by function along with program revenues and a summary of revenues by source are shown below:

Expenses and Program Revenues - Governmental Activities Fiscal Year Ended June 30,2008 (expressed in thousands) Expenses Program revenues

Revenues by Source - Governmental Activities Fiscal Year Ended June 30,2008

I Incomeand inheritance taxes, 30 % Sales and excise taxes 26%

MGross receipts taxes

LlProperty taxes 5%

=Capital grantsand contributims 3% HOperatinggrants and contributions 27% State of Kansas Management's Discussion and Analysis June 30,2008

Business-Type Activities

The State's business-type activities decreased the net assets of the State by $8.9 million. For the State's business-type activities a comparison of the cost of services by function along with program revenues and a summary of revenues by source are shown below:

Expenses and Program Revenues- Business-Type Activities Fiscal Year Ended June 30,2008 (exp msed in thousdnds) HPrograrnrevenues

Revenues by Source - Business-Type Activities Fiscal Year Ended June 30,2008

Operating grants 1Charges for and contributions services 7 70 99%

UCapital grants and contributions 1% Other 0% State of Kansas: Management's Discussion and Analysis June 30,2008

Component Units

The State's component units increased the net assets of the State by $154.3 million. For the State's component units a comparison of the cost of services by function along with program revenues and a summary of revenues by source are shown below:

Expenses and Program Revenues - Com ponent Units Fiscal Year Ended June 30,2008 (expressed in thousands)

2,000,000 1,500,000 1,000,000 500,000 0 Kansas Kansas State University ICansas Housing Kansas Development Technology Sys tem Resources Corp . Bioscience Finance Enterprise Corp. Authority Authority I UExpenses HProgram revenues

Revenues by Source - Component Units Fiscal Year Ended June 30,2008

mapita1 grants and Operating grants contributions 7

aCharges fcr services I / investment earning 49% 0% State of Kansas Management's Discussion and Analysis June 30,2008

FINANCIAL ANALYSIS OF THE STATE'S INDIVIDUAL FUNDS

As noted earlier, the State uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds

The focus of the State's governmental funds is to provide information on near-term inflows, outflows, and balances of expendable resources. Such information is useful in assessing the financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.

For fiscal year 2008, the governmental funds reported a combined ending hnd balance of $1.2 billion, a decrease of $241.7 million in comparison with the prior year. Part of this fund balance is reserved to indicate that it is not available for new spending because it has already been committed to liquidate contracts and purchase orders of the prior fiscal year in the amount of $697.9 million and for advances in the amount of $1 17.2 million.

The General Fund is the chief operating fund of the State. At the end of the current fiscal year, unreserved fund balance of the General Fund was $414.7 million, while the total fund balance reached $422 million. As a measure of liquidity of the General Fund, it may be usehl to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 6.3% of total General Fund expenditures, while total hdbalance represents 6.4% of that same amount. The fund balance in the General Fund decreased by $398.8 million during the current fiscal year.

Proprietary Funds

Proprietary funds provide the same type of information found in the government-wide financial statements.

As discussed in the business-type activities above, the State's net assets decreased by $8.9 million as a result of operations in the proprietary funds. This resulted fiom a $15.5 million decrease in net assets by the Health Care Stabilization Fund, a decrease of net assets of $6.2 million by Unemployment Insurance Fund and an increase of net assets of $13.5 million by the State's program for making local loans to local government units for water pollution and public water supply projects.

Component Unit Funds

Although legally separate fiom the State, component units are financially accountable to the State, or their relationships are such that exclusion would cause the State's financial statements to be misleading or incomplete. Component units are reported in its own column on the fmancial statements.

The State's component unit net assets increased by $154.3 million. Most of this increase resulted fiom the State University System with an increase of $110.8 million and the addition of the Kansas Bioscience Authority with $37 million in net assets. The other three component units accounted for $6.5 million increase in net assets.

GENERAL FUND BUDGETARY HIGHLIGHTS

Differences existed between the original budget and the final budget. Revenue estimates were raised by approximately $19.3 million and expenditure estimates were raised by approximately $68.1 million. The original estimates provided for an excess of revenues under expenditures of $368.3 million. The final budget provided for an excess of $417 million of revenues under expenditures. Subsequently, fiscal year 2008 was closed with an excess of revenues under expenditures of $406.8 million. State of Kansas Management's Discussion and Analysis June 30,2008

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

State investment in capital assets for its governmental and business-type activities as of June 30, 2008, amounts to $1 1.5 billion. This investment in capital assets includes land, buildings, improvements, equipment, infrastructure and construction in progress. Infrastructure assets are items that are normally immovable and of value only to the State, such as roads and bridges.

The Kansas Department of Transportation used the modified approach for valuing their infrastructure. The roadways' conditions are assessed using a pavement management system. The bridges' conditions are assessed using the Pontis Bridge Management System. The conditions for the roadways and the bridges exceeded the Department's policy for minimum condition levels.

The total increase in the investment in capital assets for its governmental and business-type activities for the current fiscal year was about 1.9% in terms of net book value. The majority of capital asset expenditures were used to construct or reconstruct roads and bridges. Depreciation charges for the year totaled $76.6 million. Additional information on the capital assets can be found in Note I11 of the notes to the financial statements of this report.

Debt Administration

The State of Kansas does not have the statutory authority to issue general obligation bonds. The Legislature has authorized the issuance of specific purpose revenue bonds and other forms of long-term obligations.

KDFA is a public body politic and corporate, constituting an independent instrumentality of the State of Kansas. It was created to enhance the ability of the State to finance capital improvements and improve access to long-term financing for State agencies, political subdivisions, public and private organizations, and businesses.

The total long-term bond debt obligations decreased by $75.4 million during the current fiscal year. The key factor in this decrease was the scheduled and early principal paid on bonds exceeded the bonds issued during the year. Bonds issued during the year include $20 million for Post Secondary Education Institution Infrastructure, KDFA Series 2008 A, $59.5 million for State Kansas Projects, KDFA Series 2007 K, $18.2 million for KU Law Enforcement Training Center, KDFA Series 2007M, $17.9 million for KSU Parking System, KFDA 2007 H, $150.9 million for Retirement of Series 2003C, KDOT Series 2008 A, and $1.6 million for Saline Student Life Center, KDFA Series 2008 D.

Additional information on long-term debt obligations can be found in Note I11 of the notes to the financial statements of this report.

ECONOMIC FACTORS

According to the Kansas Department of Labor Kansas Labor Market Infor~nationNews Release for July 2008, employment for nonfarm jobs in the State of Kansas for June 2008 is decreasing. Compared to June 2007, employment decreased by 4,400 jobs for a total of 1.39 million nonfarm jobs. The unemployment rate was 4.4% for June 2008, compared to 4.8% in June 2007. State of Kansas Management's Discussion and Analysis June 30,2008

REQUESTS FOR INFORMATION

This financial report is designed to provide a general overview of State finances for all of Kansas's citizens, taxpayers, customers, and investors and creditors. This financial report seeks to demonstrate State accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional information should be addressed to:

Kent E. Olson, Director of Accounts and Reports 900 S.W. Jackson, Room 35 1S Landon State Office Building Topeka, KS 66612-1248 Financial Statements St'ate of Kansas Financial Statements June 30,2008

State of Kansas Government Wide - Statement of Net Assets June 30,2008 (expressed in tlto~~sarzds)

Primary Government

Governmental Business-Type Component Activities Activities Totals Units ASSETS Cash and cash equivalents Investments Receivables (net) Due from primary government: Investment in direct financing leases, due within one year Investment in direct financing leases, due in more than one year Internal balances Inventories Other current assets Restricted cash and cash equivalents Restricted investments Capital assets (net of accumulated depreciation) Infrastructure Other non-current assets Total assets

LIABILITIES

Accounts payable and other current liabilities Due to component unit: Lease revenue bonds payable, due within one year Lease revenue bonds payable, due in more than one year Deferred revenue Bonds payable on demand Short-term notes payable Noncurrent liabilities: Due within one year Due in more than one year Other post employment benefits obligation Claims and judgements

Total liabilities

NET ASSETS

Invested in capital assets, net of related debt Restricted for: Capital projects Debt service Other purposes Unrestricted

Total net assets

The notes to the financial statements are an integral part of this statement. State of Kansas Financial Statements June 30,2008

State of Kansas Government Wide - Statement of Activities For the Fiscal Year Ended June 30,2008 (expressed in tit olrsands)

Program Revenues

Charges for Operating Functions/Programs Expenses Services Grants Capital Grants

1 Primary government: 2 Governmental activities: 3 General government 4 Human resources 5 Education 6 Public safety 7 Agriculture and natural resources 8 Highways and other transportation 9 Health and environment 10 Economic development 11 Interest expense 12 Total governmental activities 13 Business-type activities: 14 Water pollution and safety 15 Health care stabilization 16 Employment security 17 Workers' compensation 18 Lottery 19 Intergovernmental transfer program 20 Transportation revolving loans 21 Total business-type activities 22 Total primary government 23 24 Component units: 25 Kansas Development Finance Authority 26 Kansas Technology Enterprise Corporation 27 ICansas Bioscience Authority 28 State University System 29 Kansas Housing Resources Corporation 30 Total component units

The notes to the financial statements are an integral part of this statement. state of Kansas Financial Statements June 30,2008

Net (Expense) Revenue and Changes in Net Assets Primary Government

Governmental Business-Type Component Activities Activities Total Units

General revenues: Taxes: Property tax Income and inheritance tax Sales and excise tax Gross receipts tax Investment earnings Other revenue Transfers Total general revenues

Change in net assets

Net assets - beginning Revisions to beginning net assets Net assets - beginning (restated)

Net assets - ending $ 9,974,407 $ 1,085,630 $ 11,060,037 $ 3,717,528 State of Kansas Financial Statements June 30,2008

State of Kaitsas Balance Sheet - Governmental Funds June 30,2008 (expressed in tlzousa?~ds)

Transporta- Transporta- Health Policy tion-Capital Other Total General tion Authority Projects Governmental Governmental ASSETS

Cash and cash equivalents $ 580,033 $ 258,236 $ 16,481 $ 0 $ 671,158 $ 1,525,908 Investments 0 2 17,420 0 0 46,853 264,273 Receivables, net 343,211 199,274 83,638 0 139,901 766,024 Due from other funds 6,000 37,517 0 0 2 1,724 65,241 Inventories 7,324 18,697 0 0 0 26,021 Advances to other funds 0 30,897 0 0 78,530 109,427 Restricted cash and cash equivalents 63 0 0 0 137,077 137,140

Total assets $ 936,631 $ 762,041 $ 100,119 $ 0 $ 1,095,243 $ 2.894,034

LIABILITIES AND FUND BALANCES

Liabilities: Accounts payable and other current liabilities $ 346,551 $ 71,179 $ 98,655 $ 0 $ 242,464 $ 758,849 Due to other finds 49,274 0 0 0 1,639 50,913 Deferred revenue 15,370 49,624 0 0 1,560 66,554 Advances from other funds 103,399 0 0 0 5,107 108,506 Bonds payable on demand Total liabilities

Fund balances: Reserved for: Debt service Inventory Encumbrances Advances to other funds Unreserved, reported in: General Fund Social and Rehabilitation Transportation Health Policy Authority Transportation - Capital Projects Special Revenue Funds Capital Project Funds Debt service Total fund balance

Total liabilities and fund balance $ 936,631 $ 762,041 $ 100,119 $ 0 $ 1,095,243 $ 2,894,034

The notes to the financial statements are an integral part ofthis statement. (Continlied) State of Kansas Financial Statements June 30,2008

Staik of Kansas Balance Sheet - Governmental Funds - Continued June 30,2008 (expressed in thousand$

Total Governmental Reconciliation to the Statement of Net Assets:

Total fund balance from previous page $ 1,154,097

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds: In%astructure Capital assets

Other non-current assets are not available to pay for current- period expenditures and, therefore, are deferred in the funds.

Deferredrevenue (not on statement of net assets) Accrued Interest

Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds: Long term debt Compensated absences Due to component unit (lease revenue bonds payable)

In the statemnt of net assets, a long term liability is recorded for the unfimded portion of post employment benefits other than pensions, while in the governmental funds liabilities that do not require satisfaction with current resources are not recorded (1 6,814)

Internal Service Funds: the assets and liabilities of the internal service funds are included in governmental activities in the statemnt of net assets.

Net assets of governmental activities as reported on the Statemnt of Net Assets. $ 9,97 4,407

The notes to the financial statements are an integral prt of this statement. State of Kansas Financial Statements June 30,2008

Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds For the Fiscal Year Ended June 30,2008 (qrasedin tl~ousas&)

Transporta- Transports- Health Policy tion-Capital Otha Total General tion Authority Projects Governmental Governmental

Revenues: Pmperty tax Income and inheritance tax Sales and excise tax Gmss receipts tax Charges for services Operating grants Capital grants Investment earnings Other revenues Total revenues

Expenditures: Current: General government Human resources Education Public safety Agriculture and natural resources Highways and other transportation Health and envimnment Economic development Debt service: Principal Interest Total expenditures

Excess of revenues over (under) expenditures (158,603) 248,230 700,120 0 (1,192,183) (402,436)

Other financing sourtes (uses): Pmceeds fiom sale of debt 0 0 0 150,870 74,30 1 225,171 Transfers, net (244,197) (228,667) (722,845) (595) 1,279,47 1 83,167 Other financing sources (uses) 0 0 0 (150,275) 0 (150,275) Total other financing sources (uses) (244,197) (228,667) (722,845) 0 1,353,772 158,063

Net changein fund balances

Fund balances, beginning ofyear -. 820,851 620,458 24,189 (755,115) 685,452 1,395,835 Revisions to beginning hnd balances ' 3,617 0 0 0 (2568) 1,049 Fund balances, beginning ofyear (restated) 824,468 62445 8 24,189 (7511 15) 682,884 1,396,884

Change in resaves for inventory 3 69 1,217 0 0 0 1,586

Fund balances, end of year $ 422,037 $ 641,238 $ 1,464 $ (755,115) $ 844,473 $ 1,154,097

The notes to the financial statements are an integral part of this statement. State of Kansas Financial Statem.ents June 30,2008

State of Kansas Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds - Continued For the Fiscal Year Ended June 30,2008 (expressed in tlzotcsands)

Total Governmental Reconciliation to the Statement of Activities:

Total net change in fund balance from previous page $ (244,373)

Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenue in the funds.

Debt proceeds provide current financial resources to governmental fbnds, but issuing debt increases long- term liabilities in the Statement of Net Assets: Revenue bond proceeds Bond premiums and discounts Loan proceeds Other borrowings

Repayment of bond principal is reported as an expenditure in the governmental funds, but the payment reduces long-term liabilities in the Statement of Net Assets.

Retirement of Bonds 150,275

Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets: Capital assets Depreciation expense

Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Arbitrage rebate expense Compensated Absences Other expenses

Gain (Loss) on asset disposal and other items

Internal service funds are used by management to charge the costs of certain activities, such as insurance and telecommunications, to individual funds. The net revenue (expense) of the internal service funds is reported with governmental activities.

Changes in Net Assets of Governmental Activities as reported on the Statement of Activities

. The notes to the financial statements are an integral part of this statement. State of Kansas Financial Statements June 30,2008

State of Kansas Statement of Net Assets - Proprietary Funds June 30,2008 (expressed in ilrousnnds)

Business-Type Activities Governmental Activities - Unemployment Health Care Nonmajor Internal Water Funds Insurance Stabilization hnds Totals Service Funds ASSETS Current assets: Cash and cash equivalents Investments Receivables,net Inventories Total current assets Noncurrent assets: Investments Receivables, net Restricted cash and cash equivalents Restricted investments Advances to other funds Capital assets (net of accumulated depreciation) Other noncurrent assets Total noncurrent assets Total assets

LIABILITIES Current liabilities: Accounts payable and other current liabilities Deferred revenue Due to other funds Short-term compensated absences Short-term portion of long-term liabilities Total current liabilities Noncurrent liabilities: Compensated absences Claims and judgements Bonds, notes and loans payable Arbitrage Rebate Payable Advances from other funds Other post employment benefits obligation Other noncurrent liabilities Total noncurrent liabilities Total liabilities

NET ASSETS Invested in capital assets, net of related debt 0 0 4 360 364 84,350 Restricted for: Debt service 0 0 0 17,617 17,617 0 Other purposes 363,598 661,137 44,777 (20,193) 1,049,319 0 Unrestricted 0 (1,519) (4) 19,853 18,330 (123,747) Total net assets 363,598 659,618 44,777 17,637 1,085,630 (39,397) Total liabilities and net assets . $1,009,257 $ 666,988 $ 220,296 $ 124,926 $2,021,467 $ 117,261

The notes to the financial statements are an integral part of this statement State of Kansas Financial Statements June 30,2008

State of Kansas Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds For the Fiscal Year Ended June 30,2008

Business-Type Activities Governmental Activities - Internal Unemploy- Health Care Nonmajor Service Water Funds ment Insurance Stabilization Funds Totals Funds

Operating revenues: Charges- for services Other revenue 3,287 26,256 1,499 1,974 33,016 (19,013) Total operating revenues 27,514 249,801 39,578 246,147 563,040 88,921

Operating expenses: Salaries and wages Supplies and services Lottery prize awards Depreciation Insurance claims and expenses Program administration - Water I Other expenses Total operating expenses

Operating income (loss)

Nonoperating revenues (expenses): Operating grants 0 1,200 0 0 1,200 0 Capital grants 7,912 0 0 0 7,912 0 Investment earnings 1 1,834 31,389 0 1,733 44,956 0 Interest expense (30,281) 0 0 (2,432) (32,713) (2,896)

Other expenses 0 0 (800) (250) (1,050) ' (380) Total nonoperating revenues (expenses) (10,535) 32,589 (800) (949) 20,305 (3,276)

Net income (loss) 13,465 4,846 (16,452) 68,464 70,323 (7,379)

Transfers in Transfers out

Net change in net assets 13,465 (6,180) (15,535) 412 (7,838) (12,388)

Total net assets - beginning 350,133 665,798 60,326 18,225 1,094,482 (27,O 15) Revisions to beginning net assets 0 0 (14) (1,000) (1,014) 6 Net assets - beginning (restated) 350,133 665,798 60,312 17,225 1,093,468 (27,009) Total net assets - ending $ 363,598 $ 659,618 $ 44,777 $ 17,637 $ 1,085,630 $ (39,397)

The notes to the financial statements are an integral part of this statement State of Kansas Financial Statements June 30,2008

State of Ka~zsas Statement of Cash Flows - Proprietary Funds For the Fiscal Year Ended June 30,2008 (expressed irt tltorisands)

Governmental Activities - Unemployment Health Care Intemal Water Funds Insurance Stabilization Totals Service Funds Cash flows from operating activities: Cash receipts from customers $ 249,385 $ 40,125 $ 88,921 Cash payments to suppliers for goods and services (729) (53,542) (39,895) Cash payments to employees for services 0 (934) (27,032) Cash payments for lottery prizes 0 0 0 Claims paid (277,510) 24,869 197 Other operating revenues 0 0 0 Other operating expenses 0 0 0 Net cash provided (used) by operating activities (28,854) 10,518 22,191

Cash flows from noncapital financing activities: Operating grants receipts 0 1,200 0 0 1,200 0 Other non-operating expenses 0 0 (800) (6,125) (6,925) (380) Net transfers to other funds 0 (11,138) 918 (59,181) (69,401) (4,865) Other cash inflows from noncapital financing activities 7,9 12 0 0 0 7,912 0 Other cash outflows from noncapital financing activities (63,982) 0 0 0 (63,982) 0 Net cash provided (used) by noncapital financing activities (56,070) (9,938) 118 (65,306) (131,196) (5,245)

Cash flows from capital and related financing activities: Repayment of long-term debt 0 0 0 0 0 (1,116) Interest payments 0 0 0 o 0 (2,896) Proceeds from sale of fixed assets 0 0 0 13 13 1,563 (Gain) loss on disposal of fixed assests 0 0 0 (13) (13) (1,563) Payments for purchase of fixed assets 0 0 0 (243) (243) (7,465) Net cash provided (used) by capital and related financing activities 0 0 0 (243) (243) (1 1,477)

Cash flows from investing activities: Proceeds from sale and maturities of investment securities 972 0 30,432 14,846 46,250 0 Purchase of investments (973) 0 (36,743) 0 (37,716) 0 Interest and dividends 12,233 31,389 (185) 1,767 45,204 0 Unrealized (gain) loss on investments 0 0 (4,496) 0 (4,496) 0 Net cash provided (used) by investing activities 12,232 31,389 (10,992) 16,613 49,242 0

Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning ofyear Cash and cash equivalents, end of year

Reconciliation of operating income (loss) to net cash provided by operations:

Operating income (loss)

Adjustment to reconcile operating income to net cash provided (used) by operating activities: Depreciation and amortization Changes in assets and liabilities: Receivables Inventories Accounts payable Payroll liabilities Claims and judgements Lottery prize liability Total adjustments Net cash provided (used) by operating activities

The notes to the financial statements are an integral part of this statement. State of Kansas Financial Statements June 30,2008

State of Kansas Statement of Fiduciary Net Assets June 30,2008 (expressed in thousands)

Investment College Savings Pension Trust Trust Program Agency ASSETS

Cash and cash equivalents $ 407 $ 959,704 $ 1,567 $ 702,864 Investments 15,732,252 0 2,042,072 909,170 Receivables, net 3,156,838 0 2,310 789,091 Inventories 21 0 0 0 Capital assets 6,647 0 0 0

Total assets 18,896,165 959,704 2,045,949 $ 2,401,125

LIABILITIES

Accounts payable and other liabilities 5,703,101 0 651 $ 2,401,125

Total liabilities

NET ASSETS

Net assets held in trust

The notes to the financial statements are an integral part of this statement. State of Kansas. Financial Statements June 30,2008 State of Kansas Statement of Changes in Fiduciary Net Assets For the Fiscal Year Ended June 30,2008 (expressed in tlzozcsands)

Investment College Savings Pension Trust Trust Program Trust ADDITIONS Contributions: Employer contributions $ 458,153 $ 0 $ 0 Employee contributions 269,603 0 0 College savings contributions 0 0 784,981

Total contributions 727,756 0 784,981

Deposits: Net investment income MIP deposits Other deposits

Total additions 78,879 3,982,451 684,681

DEDUCTIONS Benefits and refunds: Monthly benefits and refunds 945,705 0 0 Refunds of contributions 48,473 0 0 Death benefits 8,389 0 0 Distributions 0 3,886,506 490,963 Total benefits and refunds 1,002,567 3,886,506 490,963

Administrative expenses 66,321 0 14,346

Total deductions 1,068,888 3,886,506 505,309

Net increase (decrease) (990,009) 95,945 179,372 Net assets - beginning of year 14,183,073 863,759 1,865,926

Net assets - end of year

The notes to the financial statements are an integral part of this statement. State of Kansas Financial Statements June 30,2008

State of Kansas Combining Statement of Net Assets - Component Units June 30,2008 (expressed it1 tlzousatzds)

Kansas Kansas Kansas Development Technology Housing Kansas State Finance Enterprise Resources Bioscience University Authority Corporation Corporation Authority System Totals ASSETS Current assets: Cash and cash equivalents Investments Receivables,net Due fiom primary government Inventories Other assets Total current assets

Noncurrent assets: Investments Recqivables,net Restricted cash and cash equivalents Restricted investments Due eom primary government Capital assets (net of accumulated depreciation) Other noncurrent assets Total noncurrent assets Total assets

LIABILITIES Current liabilities: Accounts payable and other liabilities Deferred revenue Short-term compensated absences Short-term portion of long-term liabilities

Total current liabilities Noncurrent liabilities: Compensated absences Bonds, notes and loans payable Other post employment benefits obligation Other noncurrent liabilities Total noncurrent liabilities Total liabilities

NET ASSETS Invested in capital assets, net of related debt 25 120 367 383 1,075,087 1,075,982 Restricted for: Capital projects 0 0 0 0 45,527 45,527 Debt service 0 0 0 0 24,574 24,574 Other purposes 0 1,106 8,630 4,999 1,019,870 1,034,605 Unrestricted 6,228 13,606 9,657 79,404 1,427,945 1,536,840 Total net assets $ 6,253 $ 14,832 $ 18,654 $ 84,786 $ 3,593,003 $ 3,717,528 State of Kansas Financial Statements June 30,2008

State of Kar~sas Combining Statement of Activities-Component Units For the Fiscal Year Ended June 30,2008 (wpressed in tlrousa~tds)

Kansas Kansas Kansas Development Technology Housing Kansas State Finance Enterprise Resources Bioscience University Authority Corporation Corporation Authority System Totals

Expenses: Salaries and wages Supplies and services Depreciation Interest expense Other expenses Total expenses

Program Revenues: Charges for services Operating grants Total program revenues

Net (Expense) Revenue 154 (621) (68,358) (8,983) (460,859) (53 8,667)

General Revenue: Taxes: Gross receipts tax Investment earnings Other revenue Total general revenues

Change in net assets

Total net assets - beginning- - 5,731 15,086 12,433 47,748 3,482,224 3,563,222 Revisions to beginning net assets Total net assets - beginning (restated)

Total net assets - ending $ 6,253 $ 14,832 $ 18,654 $ 84,786 $ 3,593,003 $ 3,717,528 State of Kansas Notes to the Financial Statements June 30,2008

I. Summary of Significant Accounting Policies

The accompanying financial statements of the State of Kallsas (the "State") have been prepared in conformance with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board (GASB). GASB is the standard setting body for governmental accounting and financial reporting principles.

A. Financial Reporting Entity

The accompanying financial statements present the financial position of the State and the various funds and fund types, the results of operations of the State and the various funds and fund types, and the cash flows of the proprietary funds. The financial statements are presented as of June 30,2008 and for the year then ended. The financial statements include the various agencies, boards, commissions, public trusts and authorities and any other organizationalunits governed by the Kansas State Legislature andlor Constitutional Officers of the State of Kansas.

The State has considered all potential component units for which it is financially accountable, organizations that raise and hold economic resources forthe State, and other organizations for which the nature and significance of their relationship with the State are such that exclusion would cause the State's financial statements to be misleading or incomplete.

As required by generally accepted accounting principles, these financial statements present the State of Kansas (the primary government) and its component units.

The accompanying financial statements present the activities of State government (the primary government), which is comprised of three branches: the Executive Branch, with the Governor as chief executive; the Legislative Branch, consisting of a Senate of 40 members and a House of Representatives of 125 members; and the Judicial Branch, which includes the Supreme Court, the Appeals Court, and the District Trial Courts.

Discrete Component Units

Discrete component units are entities that are legally separate from the State, but are financially accountable to the State, or whose relationships with the State are such that exclusion would cause the State's financial statements to be misleading or incomplete. The component units are reported in a separate column to emphasize that they are legally separate from the primary government and are governed by separate boards.

Following is a table identifying each discretely presented component unit followed by a brief description of each component unit. Complete financial statements for each of the individual component units may be obtained from their respective administrative offices at the noted addresses. State of Kansas Notes to the Financial Statements June 30,2008

I. Summary of Significant Accounting Policies

Description: Criteria for For Separate Financial Component Unit Inclusion Reporting Method Statements Kansas The State appoints a voting Reported as a discrete Kansas DevelopmentFinance Development majority of the board of KDFA component unit, because the Authority Finance Authority and has the power to impose its board is not the same and 555 South Kansas Avenue, (KDFA) will on KDFA. services are provided to Suite 202 other entities. Topeka, Kansas 66603 Kansas Technology The State appoints a voting Reported as a discrete KansasTechnology Enterprise majority of the board of KTEC component unit, because the Enterprise Corporation Corporation and has the power to impose its board is not the same and 214 SW 6'~venue, (KTEC) will on KTEC. There is a services are provided to Suite 100 potential for KTEC to impose other entities. Topeka, Kansas 66603 specific financial burdens or provide specific financial benefits to the State. KTEC is fiscally dependent on the State. Kansas KHRC is a subsidiary Reported as a discrete Kansas Housing Resources Housing Resources corporation of KDFA and a legal component unit because the Corporation Corporation entity separate and distinct from board is not the same and 6 1 1 S. Kansas Avenue, (KHRc) KDFA and the State. services are provided to Suite 300 other entities. Topeka, Kansas 66603

State The State appoints a voting Reported as a discrete The Kansas Board of Regents University majority of the Kansas Board of component unit because the does not issue separate System Regents which controls the board is not the same and financial statements. For State universities, and has the services are provided to separate financial statements power to impose its will on the other entities. of a university, contact the State universities through the respective university or: budgeting process. Kansas Board of Regents 1000 SW Jackson St., Suite 520 Topeka, KS 66612-1368

Kansas Bioscience The State appoints a voting Reported as a discrete Kansas Bioscience Authority Authority majority of the Kansas component unit because the 25501 West Valley Parkway, Bioscience Authority and has board is not the same and Ste 100 the power to impose its will on services are provided to Olathe, KS 66061 KBA. other entities.

Kansas Public The State appoints a voting Although KPERS is a Kansas Public Employees Employees majority of the Kansas Public component unit of the State Retirement System Retirement Retirement System and has the of Kansas, it is reported as a 61 1 S. Kansas Ave., Ste 100 System power to impose its will on fiduciary pension trust fund. Topeka, KS 66603-3803 KPERS.

Kansas Development Finance Authority (KDFA) was established by Chapter 57, 1987 Session Laws of Kansas. Its enabling statutes are found in K.S.A. 74-8901 et seq., as amended and supplements. KDFA is a public body politic and corporate, constituting an independent instrumentality of the State of Kansas. KDFA was created to enhance the ability State of Kansas Notes to the Financial Statements June 30,2008

I. Summary of Significant Accounting Policies of the State to finance capital improvements and improve access to long-term financing for State agencies, political subdivisions, public and private organizations, and businesses.

Kansas Technology Enterprise Corporation (KTEC) is a body politic, corporate, and an instrumentality ofthe State of Kansas, which was created by the Legislature of the State in March 1986 (K.S.A. 74-8101). The responsibilities and duties of the existing State Office of Advanced Technology were transferred to KTEC effective January 12, 1987. KTECYsprincipal statutory functions and responsibilities are as follows:

To foster innovation in existing and developing businesses, especially the creation, growth, and expansion of Kansas enterprises in a diversified range of primary sectors which develop value-added products, processes, and services. To invest in basic research, applied research and development, and technology transfer at Kansas educational institutions which meet competitive standards of excellence and which create innovative collaboration between Kansas educational institutions and Kansas enterprises. To award appliedresearch matching grants to Kansas educational institutions and Kansas private enterprises in order to move innovation and applied research toward commercial application. To engage in seed-capital financing for the development and implementation of innovations or new technologies for existirig resource, technology-based, and emerging Kansas businesses. To provide technical referral services to such small, new, emerging, or mature businesses and encourage Kansas educational institutions to establish technical information databases and industrial liaison offices, which are easily accessible by both private and public sector Kansas organizations.

Kansas Housing Resources Corporation (KHRC) was formed pursuant to K.S.A. 74-8904(v) per the Governor's Executive Reorganization Order #30. KHRC is a subsidiary corporation of the Kansas Development Finance Authority. KHRC's mission is to enhance Kansas communities with housing opportunities. This goal is achieved through using a variety of strategies and approaches, including increasing homeownership opportunities, leveraging the construction of more affordable rental housing, promoting energy efficiency improvements for owner-occupied and rental housing, providing affordable housing through rental assistance to low-income families and senior citizens, and creating housing opportunities for previously underserved persons and communities.

State University System. The Kansas State Board ofRegents, created in 1859 by adoption ofthe State Constitution, is responsible for control and supervision of public institutions of higher education which benefit the State. The Kansas Board of Regents is a legally separate body composed of nine members appointed by the Governor. The Board supervises all State universities while budgetary decisions are exercised at the State level. The State university system consists of the Board's administrative arm and six constituent universities. Funding for the State university system is accomplished primarily by State appropriations,tuition and fees, sales and services, federal and state grants, and private donations and grants.

In addition to the Kansas Board of Regents' administrative arm, the following universities and their respective component units make up the State university system for financial reporting purposes: University of Kansas, including the University of Kansas Medical Center; Kansas State University; Wichita State University; Emporia State University; Pittsburg State University; and Fort Hays State University. Each university issues its own complete financial statements which can be obtained fiom the respective university. The Kansas Board of Regents' administrative arm does not issue separate financial statements.

Kansas Bioscience Authority. The Bioscience Authority is an independent instrumentality ofthe State of Kansas. Its enabling statutes are found in K.S.A. 74-99b01 et seq. as amended and supplemented. The Bioscience Authority was created on April 19, 2004 with the passage of the Kansas Economic Growth Act, a comprehensive economic development act designed to meet the needs of the changing Kansas economy. The Bioscience Authority was created to make Kansas the most desirable state in which to conduct, facilitate, support, fund and perform bioscience research, development of commercialization, to make Kansas a national leader in bioscience, and to create jobs, foster economic growth, advance scientific knowledge and improve the quality of life for the citizens of the State of Kansas. State of Kansas Notes to the Financial Statements June 30,2008

I. Summary of Significant Accounting Policies

Kansas Public Employees Retirement System. The Kansas Public Employees Retirement System is a body corporate and an instrumentality of the State of Kansas. The Retirement System is an umbrella organization administering the following three statewide pension groups under one plan, as provided by K.S.A. 74, article 49:

Kansas Public Employees Retirement System Kansas Police and Firemen's Retirement System Kansas Retirement System for Judges

All three systems are part of a tax-exempt, defmed benefit, contributory plan covering substantially all public employees in Kansas. The Kansas Retirement System for Judges is a single employer group, while the other two are multi- employer, cost-sharing groups. The State of Kansas and Kansas schools are required to participate, while participation by local political subdivisions is optional but irrevocable once elected.

B. Government-wide and Fund Financial Statements

Goverttrnetzt-wide Statei?ieizts- The statement of net assets and the statement of activities report information of the primary government and its component units. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the duplication of internal activities. These statements distinguish between the governmental and business-type activities of the State and between its discretely presented component units. Governmental activities are generally supported by taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are supported in whole or in part by fees charged to external parties.

The statement of activities presents a comparison between direct expenses and program revenues for each segment ofthe business-type activities of the State and for each function of the State's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributionsthat are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

The State classifies State spending by function of government and by category of expenditure. Function of government is a grouping of agencies, which make expenditures for similar programs and purposes. There are eight functions of government: (1) general government; (2) human resources; (3) education; (4) public safety; (5) agriculture and natural resources; (6) transportation; (7) health and environment; and (8) economic development. General Government includes State agencies with both administrative and regulatory functions. These agencies include the State's elected officials and the Department of Administration. Human Resources agencies provide services to individuals. Education agencies provide various educational services to Kansans. Pztblic Safety agencies ensure the safety and security of Kansas' citizens. Agriculture andNatura1 Resources agencies protect the natural and physical resources of the State and regulate the use of those resources. Transportation includes only the Department of Transportation. Responsibilities of this agency include maintenance and construction of highways in Kansas. The Health andEnvironment agency optimizes the promotion and protection of the health of Kansans through efficient and effective public health programs and services and through preservation, protection, and remediation. Economic Development reflects certain economic development initiatives.

Net assets are restricted when constraints placed on them are either externally imposed or are imposed by constitutional provisions. Internally imposed designations of resources are not presented as restricted net assets. When both restricted and unrestricted resources are available for use, generally it is the State's policy to use restricted resources first, then unrestricted resources as they are needed. State of Kansas Notes to the Financial Statements June 30,2008

I. Summary of Significant Accounting Policies

Fund FirtaitcialStateiite~tts- The fund financial statements provide information about State funds, including fiduciary funds. Separate statements for each fund category - governmental, proprietary, andJiduciary are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as non-major funds.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Non-exchange transactions, in which the State gives (or receives) value without directly receiving (or giving) equal value in exchange, include income and sales taxes, grants, entitlements, and donations. On an accrual basis, revenue from income and sales taxes is recognized in the fiscal year the underlying exchange occurred, while revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The State considers all revenues reported in the governmental funds to be available if the revenues are due at year-end and collected within sixty days thereafter. Expenditures generally are recorded when the related liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources.

Under the terms of grant agreements, the State funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the policy of the State to first apply cost- reimbursement grant resources to such programs, followed by general revenues.

'be financial statements of the proprietary funds, pension-funds,investment funds, college savings program fund, and component units are reported using the economic resources measurement focus and the accrual basis of accounting, similar to the government-wide statements described above. In reporting the financial activities of the proprietary funds the State applies all applicable GASB pronouncements and FASB pronouncements issued prior to November 30,1989.

D. Fund Accounting

The financial activities ofthe State are recorded in individual funds, each ofwhich is deemed to be a separate accounting entity. The State uses fund accounting to report on its financial position and results of operations. Fund accounting is designed to demonstrate legal compliance and aid financial management by segregating transactions related to certain government functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.

The financial activities of the State that are reported in the accompanying financial statements have been classified into the following major governmental and proprietary funds. In addition, a description of the internal service, fiduciary and component units follows: State of Kansas I Notes to the Financial Statements June 30,2008

I. Summary of Significant Accounting Policies

Governmental Funds: These funds include the State's main operating fund, special revenue funds, capital projects funds, and debt service funds.

General Fund - This is the primary operating fund of the State. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

Healtlz Policy A~ltltority- This fund includes all health insurance purchasing by the State, as well as federally funded programs (Medicaid, State Children's Heath Insurance Program and Medikan) and the State Employee Health Insurance

Transportatiott Fztnd- This fund is the primary operating fund of the Department of Transportation. The Department of Transportation has the statutory responsibility to coordinate planning, development and operation of the various modes and systems of transportation in the State.

Transportation-CapitalProjects Fund- This fund accounts for the financial resources to be used for construction of major capital facilities for the Department of Transportation.

Proprietarv Funds: These funds account for those activities for which the intent ofmanagement is to recover, primarily through user charges, the cost ofproviding goods or services to the general public, or where sound financial management dictates that periodic determinations of results of operations are appropriate.

Water Fzutds- This fund accounts for the Water Pollution Control and Public Water Supply Revolving Loan funds controlled by the Department of Health and Environment.

Utzei~?ploynrerztIttszlrartce Fund - This fund accounts for unemployment insurance for the deposit of moneys requisitioned for the Kansas Unemployment Insurance Trust Fund held by the U.S. Treasury for payment of unemployment benefits.

Healtlt Care Stabilizatiott Fund- This fund accounts for moneys accumulated to pay damages for personal injury or death arising out of the rendering of or the failure to render professional services by a health care provider, self-insurer or inactive health care provider subsequent to the time that such health care provider or self-insurer qualified for coverage under the provisions of this program. I Irtterrtal Service Fuitds - These funds account for printing, information technology, accounting, motor pool, aircraft, building maintenance, architectural, central mail, workers' compensation, and capitol security services provided to other departments on a cost-reimbursement basis.

Piduciarv Funds: The State presents as Fiduciary Funds those activities that account for assets held in a trustee capacity or as an agent for individuals, private organizations, or other governmental units.

Pensioit Trust Fund - This fund is used to account for the assets, liabilities, and fund equities held in trust for the Kansas Public Employees Retirement System.

Ilzvestmeizt Trust Fund- This fund is used to account for the assets, liabilities, and fund equities held in trust for the I Kansas Municipal Investment Pool. Private Piupuse Trust F~~rtd- This fund accounts for the College Savings Program that allows participants to invest in a college savings account to cover tuition, fees, and the cost ofroom and board, books, supplies and equipment required for the enrollment or attendance of a beneficiary at an eligible educational. State of Kansas Notes to the Financial Statements June 30,2008

I. Summary of Significant Accounting Policies

Agertcy Funds - These funds account for assets held by the State in a custodial capacity or as an agent for individuals, private organizations, other governmental units and/or other funds.

Both government-wide and proprietary funds financial statements of the State follow FASB Statements and Interpretations issued on or before November 30, 1989; Accounting Principles Board Opinions; and Accounting Research Bulletins, unless those pronouncements conflict with GASB pronouncements.

The effect of interfund activity has generally been eliminated li-om the government-wide financial statements.

Amounts reported as program revenues include 1) charges for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. General revenues include all taxes and internally dedicated resources.

Proprietary funds distinguish between operating and non-operating revenues and expenses. Operating revenues and expenses are generated from providing services or products in connection with the enterprise operations of the funds.

E. Assets, Liabilities, and Net Assets or Equity

Caslz and Investme~zts

Cash balances of funds in the State Treasury are pooled and are held in a general checking account and other special purpose bank accounts. The available cash balances beyond immediate need are pooled for short-term investment purposes by the Pooled Money Investment Board (PMIB) and are reported at fair value, based on quoted market prices.

For purposes of reporting cash flows, cash equivalents are defined as short-term, highly liquid investments that are readily convertible to cash.

The investment policies ofthe PMIB are governed by State statutes. The primary objectives are to attain safety, liquidity, and yield. Allowable investments for State pooled moneys not held in Kansas financial institutions are as follows:

Direct obligations of, or obligations except mortgage backed securities, that are insured as to principal and interest by the U.S. Government, or'any direct agency thereof, with maturities up to four years Repurchase agreements with Kansas banks or with primary government securities dealers Loans as mandated by the Kansas Legislature limited to not more than the lesser of 10 percent or $80,000,000 of total investments. Certain Kansas agency and IMPACT Act projects and bonds Linked deposit loans for agricultural production not to exceed $55 million High grade commercial paper

Speczjk FundIiwestments - State statutes permit investing cash balances not included in the PMIB in the following types of investments:

U. S. Government obligations Mortgage backed securities Corporate securities U.S. Government agency securities Repurchase'agreements State of Kansas Notes to the Financial Statements June 30,2008

I. Summary of Significant Accounting Policies

Commercial paper not to exceed 270 days to maturity and rated within the two highest commercial paper ratings State of Icansas agency bonds, with maturities not to exceed four years

In addition to the above investments, short-term bond proceeds may be invested at the direction of KDFA through the PMIB.

Kansas Mztnicipal Investment Pool - The Kansas Municipal Investment Pool (MIP) was created on July 1, 1992, as a voluntary, State-managed investment alternative for State and local funds. The Office of the Kansas State Treasurer (Treasurer) acts as the custodian for all moneys deposited. All Kansas governmental units, including cities, counties, school districts and other governmental entities holding public moneys are eligible to participate in the MIP. The deposits in the MIP are combined with State moneys to form the Pooled Money Investment Portfolio.

Kansas Public Employees Retirement System (KPERS) Investments - The Retirement System's investment categories, as permitted by statute, include equities, fixed income securities, cash equivalents, real estate, derivative products and alternative investments. KPERS value its investments at fair value. In fulfilling its responsibilities, the Board of Trustees contracts with investment management fmsand a master global custodian.

Investment Incoine Allocation - State statutes require interest earned to be credited to the State General Fund unless required by law to be credited based on average daily balance to a specific fund.

Receivables and Payables

Activity between funds that are representative of lendinglborrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to I from other funds" (i.e., the current portion of interfimd loans) or "advances tolfrom other funds" (i.e., the non-current portion of interfimd loans). All other outstanding balances between funds are reported as "due to I from other funds." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances."

Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to inaicate that they are not available for appropriation and are not expendable available financial resources.

Receivables are shown net of an allowance for uncollectible.

Inventories are valued at cost using the frst inlfrst out (FIFO) method. Inventories in the government-wide financial statements are accounted for using the consumption method. Inventories in the governmental funds financial statements are on the purchases method. The purchases method provides that inventory be treated as expenditure when purchased. Consumable supplies are reported only if over $200,000 per agency.

The governmental funds statements have a current financial resources focus. As aresult, modified accrual adjustments to capitalize inventory at year-end, affect beginning fund balance rather than expenditures. The focus on current financial resources is better maintained by not adjusting the expenditures for the amount of inventory reclassified to the balance sheet. The government-wide statements, however, require the full accrual adjustment to expenditures to properly reflect the amount of inventory consumed during the fiscal year.

Deferred Bond Isszraltce Costs

Deferred bond issuance costs consist of the costs incurred related to bond issuance. These costs are capitalized and amortized over the term of the bonds using the straight-line method. State of Kansas Notes to the Financial Statements June 30,2008

I. Summary of Significant Accounting Policies

Restricted Assets

Certain resources are classified as restricted assets on the balance sheet because they are maintained in separate bank accounts and their use is limited by bond requirements. The Unemployment Insurance Fund was established by law as a special fund separate and apart fi-om all public money or funds of the State. The cash is maintained in a separate bank account with the U.S. Treasury.

Capital Assets

Capital assets are reported at actual or estimated historical cost. Contributed assets are reported at estimated fair value at the time received. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Construction in process is capitalized. Capitalization policies (the dollar values above which asset acquisitions are added to the capital asset accounts), depreciation methods, and estimateduseful lives of capital assets reported in the government-wide statements and proprietary funds are as follows:

Capitalization Depreciation Estimated Policy Method Useful Life Land $100,000 Not applicable Not applicable Buildings and leasehold improvements 100,000 Straight-line 40 years Furnishings and equipment 5,000 Straight-line 8 years Automobiles 5,000 Straight-line 5 years

The depreciation method is straight line with no salvage value. Accumulated depreciation is calculated in total by class of assets by year using the one half year convention in year of purchase. No depreciation is recorded for land and construction in progress.

Works of art and historical items are not capitalized. It is the intent ofthe State ofKansas that all art works and historical objects be held for the purpose of exhibition to the public to further education and research. It is also the intent to preserve and protect such items to insure their availability to future generations. If any items are sold from any collection, the proceeds fi-om such disposition are intended to be set aside for future acquisitions for the collections.

Infrastructure

The roadway system and bridge system are reported using the modified approach. Accordingly, depreciation is not reported for these systems, and all expenditures, except for additions and improvements are expensed.

Coatpensated Absences

Classified State employees accrue vacation leave based on the number of years employed up to a maximum rate of 6.5 hours per pay period, and may accumulate a maximum of 240 hours. Upon retirement or termination, employees are paid for accrued vacation leave up to their maximum accumulation. State employees earn sick leave at the rate of 3.7 hours per pay period. Employees who terminate are not paid for unused sick leave. Employees who retire are paid a portion of their unused sick leave based on years of service and hours accumulated. The State uses the vesting method to compute the sick leave liability. The compensated absences liability will be liquidated by the State's governmental and internal service funds.

Bonds and Notes Payable

Bonds and notes payable consist of notes and bonds issued to finance capital improvements for various projects. In the government-wide fmancial statements, and proprietary fund types in the fund financial statements, long-term debt is

4 1 State of Kansas Notes to the Financial Statements June 30,2008

I. Summarv of Significant Accounting Policies reported as a liability in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums, discounts, and deferred bond issuance costs are capitalized and amortized over the term of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Deferred bond issuance costs are reported as other asset and amortized over the term of the related debt.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as deferred bond issuance costs, during the current period. The face amount of bond debt issued is reported as other financing sources. Premiums and discounts on debt issuances are reported as other financing sources and uses. Bond issuance costs are reported as debt service expenditures.

Other long-term obligations consist of claims and judgments, capital leases payable, and other miscellaneous long-term obligations. In the government-wide financial statements, and proprietary hdtypes in the fund fmancial statements, other long-term obligations are reported as a liability in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets.

Fund Equity

In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are reserved for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change.

F. Use of Estimates

Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used in preparing the financial statements.

G. Pending Governmental Accounting Standards Board Statements

At June 30, 2008, the Governmental Accounting Standards Board (GASB) had issued several statements not yet implemented by the State. The State plans to implement the provisions of these statements on or before their effective dates. Management has not yet determined the impact these new statements will have on the State's financial statements:

GASB Statement No. 49, "Accounting and Financial Reporting for Pollution Remediation Obligations", was issued November 2006. This statement provides accounting and financial reporting standards for pollution remediation obligations. These obligations address current or potential detrimental effects of existing pollution. Any one of five events requires the government to estimate the expected outlays and determine if the outlays should be accrued as a liability or capitalize when goods or services are acquired. The provisions of this statement are effective for periods beginning after December 15,2007.

GASB Statement No. 5 1, "Accounting and Financial Reporting for Intangible Assets" was issued June, 2007. This statement classifies all intangible assets not specifically excluded as capital assets, and existing accounting and financial reporting guidance for capital assets should be applied. In addition, an approach for recognition of internally generated intangible assets is provided. The condition for amortization of these assets is addressed. The provisions of this statement are effective for periods beginning after June 15,2009. State of Kansas Notes to the Financial Statements June 30,2008

I. Summary of Significant Accounting Policies

GASB Statement No. 52, "Land and Other Real Estate Held as an Investment by Endowments" was issues November, 2007. This statement establishes the reporting of these assets by endowments be at fair value. The provisions ofthis statement are effective for periods beginning after June 15,2008.

GASB StatementNo. 53, "Accounting and Financial Reporting for Derivation Instruments" was issued June 2008. This statement requires government to measure most derivative instruments at fair value in their financial statement. The methods of evaluating the effectiveness of hedging derivative instruments are addressed. The recognition and disclosure of information regarding derivative instrument are also addressed in this statement. The provisions of this statement are effective for periods beginning after June 15,2009. State of Kansas Notes to the Financial Statements June 30,2008

11. Stewardshin Com~liance,Accountabilitv

A. Excess of Expenditures Over Appropriations

For the year ended June 30,2008, expenditures did not exceed appropriations or limitations.

B. Deficit Fund Equity

The Transportation - Capital Projects Fund had a deficit fund balance in fiscal year 2008 due to reporting requirements of demand bonds with no long-term financing agreement in place. Stare of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

A. Deposits and Investments

A summary of deposits and investments at June 30,2008 is as follows (expressed in thousands):

Govt and Business College Type Pension Investment Savings Component Activities Trust Trust Program Agency units Total Pooled Cash and Investments Cash Investments Cash deposits with financial institutions Cash with U.S. Treasury Unclaimed Property invested by KPERS Imprest funds and agency bank accounts Canteen, members' benefit, members' money in agency's custody Kansas Public Employees Retirement (KPERS) Investments owned by other funds Learning Quest investments Security deposits held by Kansas Insurance Dept. Star Bonds Miscellaneous cash and other adjustments Total State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

A reconciliation of deposits and investments for the State to the financial statements at June 30, 2008 is as follows (expressed in thousands):

Disclosures Regarding Deposits and Investments: Total investments and deposits Carrying amount of deposits Total

Statement of Net Assets Governmental and Business-Type Activities Cash and cash equivalents Investments at fair market value Restricted Cash and Cash Equivalents Restricted Investments Component Units Cash and cash equivalents Investments at fair market value Restricted Cash and Cash Equivalents Restricted Investments

Statement of Fiduciary Net Assets Cash and cash equivalents 1,664,542 Investments at fair market value 18,683,494 Total $ 26,259,305

Investments Owned by Other Funds

Primary Government

Business- Type Component Investment Type Governmental Activities Units Fiduciary Total U.S. Government Obligation $ 2,407 $ 0 $ 1,893 $ 753,431 $ 757,73 1 US Government Agency Securities Mortgage Backed Securities Municipal Bonds Kansas Banks Repurchase Agreements Municipal Investment Pool Guaranteed Investment Contracts Corporate Securities Total State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

State Treasury and Municipal Investment Pool Balance

Cash balances in the State Treasury are held in numerous bank accounts. Available cash balances beyond immediate needs are pooled for short-term investment purposes. The cash balances and investments are combined and reported under the caption of "Cash and cash equivalents." The State Treasury and Municipal Investment Pool Balance as of fiscal year-end is comprised as follows (expressed in thousands):

Pooled Cash and Investments Cash Kansas banks demand accounts Investments at fair market value Kansas banks certificates of deposit U.S. government agencies securities Commercial paper Repurchase agreements Loans Receivable Public water supply loan fund Linked deposits Cash deposits with financial institutions Moneys in custodial demand accounts Cash items Cash in transit Unclaimed property invested by KPERS Unemployment trust fund cash with U.S. Treasury Total State Treasury and Municipal Investment Pool Balance State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

At June 30,2008, the carrying amount (book balance) of the deposits included in the State Treasury balance was $3.8 billion. At June 30,2008, the State Treasurer had $285.4 million in the associated bank balances. For cash deposits with financial institutions, the State requires that its depository banks pledge collateral that has a market value equal to or greater than the deposits. Effective March 15, 2004, the Kansas State Treasurer's office in its role as custodian for collateral pledged against the State of Kansas deposits, agreed to follow the changes to the pledged collateral policy that the Pooled Money Investment Board has approved. The criteria for Kansas Bank CDs are as follows:

U.S. Treasury securities (T-Bills, T-Notes, and Treasury Strips) and Federal Agency securities (Discount Notes and Debentures) with a final maturity of five years and under will require pledging of 100% collateralization (for any amount over the $100,000 FDIC coverage). Any other type of security (including CMO's and MBS), surety bonds, or letters of credit (regardless of the final maturity) will require 105% collateralization. Any security with a final maturity longer than five years will require 105% collateralization.

Securities pledged as collateral for demand deposit accounts will not be subject to the new pledged collateral policy. The State's deposits with financial institutions were fully collateralized at fiscal year-end by FDIC insurance or pledged collateral (either government securities, FHLB letters of credit or surety bonds). The pledged securities and bonds are held in safekeeping for the State Treasurer at the Federal Reserve Bank of Kansas City or in approved custodial banks and are held in the name of the State.

The cash balances in the State Treasury are included in the fmancial statements in the category "Cash and cash 1 equivalents." Also included in this category are amounts outside the State Treasury such as cash in agencies' imprest funds and authorized bank accounts, canteen, benefit and members' moneys in agencies' custody.

Component Unit - KDFA

KDFA has adopted a formal investment policy. The primary objectives of investment activities are, in priority order, safety, yield and liquidity. The standard of care to be used by investment officials shall be the "prudent investor" standard, and shall be applied in the context of managing an overall portfolio.

At June 30,2008, KDFA has $257,007 invested in the State ofKansas Municipal Investment Pool. As of June 30,2008, KDFA has $1.6 million invested in a repurchase agreement with Morgan Stanley.

Czlstodial Credit Risk. Custodial credit risk is the risk that, in the event of the failure of the counterparty, KDFA will not be able to recover the value of its deposits or investments that are in the possession of an outside party. The bank balances of KDFAYsdeposits at June 30, 2008, totaled $6.6 million. Bank balances are fully insured with an excess insurance bond provided by the counterparty, as well as by the standard coverage of Federal Deposit Insurance Corporation (FDIC).

Credit Risk. KDFA's policy limits investments to those allowed by State Statute, and further to those with one of the top two ratings from Standard & Poor's or Moody's Investor Services, depending on the type of investment. As of June 30, 2008, KDFA was invested in certificates of deposit, the Kansas Municipal Investment Pool, and a repurchase agreement with Morgan Stanley. As of June 30, 2008, the pool was rated AAAf / S1-k by Standard & Poor's. The repurchase agreement's underlying securities were GNMA securities, which are explicitly guaranteed by the U.S. government and thus carry no credit risk.

Interest Rate Risk. As a means of limiting its exposure to fair value losses arising from the fluctuations in interest rates, KDFA's investment policy limits investment maturities as follows: The portion of the portfolio equal to 150% of the current year annual operating expense budget shall be continuously invested in obligations which have maturities of 18 months or less. Moneys in excess of the 150% may be invested in obligations greater than 18 months, but no more than 48 months. State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

As of June 30,2008, KDFA had the following investments, excluding certificates of deposit, with the noted investment maturities (expressed in thousands):

June 30,2008 Investment Type Fair Value Less than 1 year 1 - 5 Years Repurchase agreement $ 1,600 $ 1,600 $ 0 KMIP 257 257 0 Total $ 1,857 $ 1,857 $ 0

KDFAYsinvestments during the year did not vary substantially from those at year-end in amounts or level of risk.

Component Unit - KHRC

As of June 30,2008, KHRC had the following cash and Investments:

Cost Fair Value Cash Kansas State Treasurer's Office $ 4,016,046 $ 4,016,046 Financial Institution 685,449 685,449 Money market funds 458,396 458,396

Securities purchased under agreements to resell 476,000 476,000 US Treasury Bond and Agency obligations 10,650,032 10,674,4 12

Total

As of June 30,2008, KHRC investments and maturities consist of the following:

Investment Type Fair Value Less than 1 year 1-5 Years

U.S Agency Securities $ 8,643,470 $ 1,008,105 $ 7,635,365 Mortgage backed securities 2,030,942 0 2,030,942 $ 10,674,412 $ 1,008,105 $ 9,666,307

Investment Policy. KHRC has adopted a fornlal investment policy. The primary objectives, in priority order, of investments activities shall be safety, liquidity, and yield. The standard of care to be used by investment officials shall be the "prudent person" standard, and shall be applied in the context of managing an overall portfolio. Investments are made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of the capital as well as the probable income to be derived.

Interest Rate Risk. KHRC minimizes the risk it will realize losses due to declines in the market value of securities in its portfolios, by structuring its investment portfolio so that securities mature to meet cash requirements for scheduled disbursements or ongoing operations, taking into account cash balances available or expected to be available for such 49 State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

requirements, thereby avoiding the need to sell securities on the open market prior to maturity. KHRC also diversifies its investments to minimize the risk of loss resulting from over concentration of assets in specific maturity, specific issuer, or specific class of securities.

Credit Risk. The risk that an issuer or other counterparty to an investment will not hlfill its obligation is called credit risk. Per the investment policy, KHRC will minimize credit risk through pre-qualifying institutions, diversifying its portfolios, and maintaining a standard of quality of authorized eligible investments. As of June 30, 2008, KHRC's investments were rated Ai- to AAA by Standard & Poor's.

Custodial Credit Risk. Custodial credit risk is the risk that, in the event of the failure ofthe counterparty, KHRC will not be able to recover the value of its deposits or investments that are in the possession of an outside party. KKRC's investment policy requires collateralizationon all demand deposit accounts, and to secure investments in certificates of deposits and repurchase agreements. KKRC also minimizes custodial credit risk by pre-qualifying the custodial or depository institutions, brolterldealers, intermediaries and advisors with which KHRC will do business. Investments held at June 30, 2008, including the underlying securities on the repurchase agreement, are held by the investment's counterparty. The repurchase agreement and deposits held with a financial institution were fully collateralized at June 30,2008.

Risks and Uncertainties: The Company maintains a portion of its total assets in a combination of bonds, futed income securities, and other investment securities. Investment securities are exposed to various risks, such as interest rate, market fluctuation and credit risk. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in risks in the near tear would materially affect investments and the amount reported in the combined statements of financial position. I Component Unit - KTEC I The following table summarizes the KTEC's cash and investments at June 30,2008 (expressed in thousands): Bank deposits and repurchase agreements $ 1,972 Certificates of deposit Cash held by the State Total Deposits

Cash in the amount of $22,571 held by the State, which is not categorized below, represents grant fimds received but not yet expended at June 30,2008.

Custodial Credit Risk. Custodial credit risk is the risk that in the event of a bank failure, KTEC's deposits may not be returned to them. KTEC does not have a deposit policy for custodial risk. KTEC was not exposed to custodial risk at June 30,2008, as indicated below (expressed in thousands):

Deposits covered by federal depository insurance or collateral held by KTEC or its agent in KTEC's name

Deposits covered by collateral held by pledging financial institution's trust department or by. its agent in KTEC's name 111. Detailed Notes On All Funds

Investments in Limited Partners consisted of the following at June 30,2008 (expressed in thousands):

Investments in economic developnzent LLCs Wichita Technology Ventures, LLC Manhattan Holdings, LLC Quest Ventures, LLC Milestone Ventures, LLC Precede Fund, LLC Seed capital investments Bi-State Investment Group, LLC CritiTech, Inc. Quvis, Inc. Relight America, Inc. Redemption Plus Inc. Nanoscale Materials, Inc. Control Vision Corporation Living Naturally Magic Lantern, LLC Hiper Technology Vasognix Parmaceuticals, Inc. LaGarde, Inc. iModules Software, Inc. CyDex, Inc. Pixius Communications, LLC Powersmart, LLC Softvu, LLC Tech Guys, Inc. Winglet Technology, LLC Chemidex Griffin Technology IRR - Residential NUVIO Corporation Deciphera Heartland Technologies Innovia Medical Proteon Therapeutics, LLC Sportvision Urigen Community Wireless Edenspace Peak Vision Sports Felton International PS Holdings, LLC TDP, Inc Adaptive Ozone Matrix Electronic Measuring ,Inc Rush Tracking Total State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

KTEC Holdings hold an equity position in Wichita Technology Ventures, LLC, Manhattan Holdings, LLC, Prairie Investments for Technology Advancement, LLC, Quest Ventures, LLC, Milestore Ventures, LLC, and Precede Fund, LLC. These entities were co-organized by KTEC and others to make equity-related investments in preseed and other early stage financings. KTEC Holdings is in no way obligated to provide future funding to any of the joint ventures. Separate fmancial statements are available from each of the joint ventures upon request of the joint ventures' management.

Component Unit - Kansas Bioscience Authority

As of June 30,2008, the Bioscience Authority had a balance of $2.6 million of cash and money market investments.

Deposit and Investment Policies. The Bioscience Authority has adopted deposit and investment policies. Investment guidelines were followed by the local investment company which holds the Bioscience Authority's cash and investments.

Custodial Credit Risk. Custodial credit risk is the risk that, in the event of a failure of the counterparty, the Bioscience Authority will not be able to recover the value of its deposits or investments that are in the possession of an outside party. At June 30,2008, $75,746 was exposed to custodial risk as deposits are in excess of FDIC insurance coverage limits. Subsequent to June 3-0,2008, the Bioscience Authority implemented a sweep option for its cash deposit account that transfers funds in excess of FDIC insurance coverage limits into a money market fund account for investment in government-backed securities. The investments in this money market account are protected fi-om credit risk by $500,000 in Securities Investor Protection Corporation (SPIC) insurance coverage. However, the underlying securities of $61.7 million of investments are held by the investment's counterparty.

Credit Risk. As of June 30,2008, the Authority was invested in government agency securities including FHMLC, FFCB, FHLB and FNMA securities. The government agency securities were rated AAA by Standard &Poor's and Aaa by Moody's Investors Service. Under the Bioscience Authority's investment policy, only AAA-rated securities were considered for investment.

Concentration of Credit Risk. Under the Authority's investment policy, there is no limit on the total amount that can be invested in U.S. Treasury securities, government agency securities, or money market funds. As of June 30,2008, more than 5% of the Bioscience Authority's investments are held in the following securities:

FHLB 55% FHLMC 22% FNMA 13% FFCB 6%

Interest Rate Risk. Interest rate risk relates to the exposure to fair value losses arising fiom the fluctuations in interest rates. Under the Bioscience Authority's investment policy, no less than 80% of the investment portfolio is limited to a maximum maturity of five years, with at least 20%, but no more than 80%, maturing in a two-year period. Also, no more than 20% of the investments may have a maximum maturity ofup to eight years. As of June 30,2008, the Bioscience's Authority had the following investment maturities (expressed in thousands):

Fair Less than 90 90 days 1-5 5-10 Investment Type Value days to 1 year years years Government Securities $ 61,713 $ 9,001 $ 0 $ 48,112 $ 4,600 State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

The Bioscience Authority has land held for investment in the amount of $5 million. Portfolio investments consisted of the following at June 30,2008:

Debt securities: Ventria Bioscience $ 3,752 KC BioMediX, Inc. 163 Equity securities: Innovia Medical, LLC 552 $ 4,467 State of Kansas Notes to tlie Financial Statements June 30,2008

111. Detailed Notes On All Funds

B. Investments

Investments in the State Treasury Balance and Municipal Investment Pool at June 30,2008 are as follows (expressed in thousands):

U.S. Government agency securities Mortgage backed securities Repurchase agreements U.S. Government obligations Municipal securities Kansas banks State of Kansas Municipal Investment Pool. Guaranteed investment contracts Corporate securities Security deposits held by Kansas Insurance Department College Savings Program Less component units and other reconciling items Total investments

Investments are managed by the Pooled Money Investment Board (PMIB) which maintains a published Investment Policy.

Interest Rate Risk - The PMIB minimizes the risk that the market value of securities in the portfolio will fall due to changes in general interest rates by: (a) structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity; and (b) investing operating funds primarily in shorter-term securities.

Credit Risk- The PMIB minimizes credit risk, the risk of loss due to the failure of the security issuer or backer, by: (a) limiting investments to the safest types of securities; (b) pre-qualifying the financial institutions, brokersldealers, intermediaries, and advisers with which the PMIB will do business; and (c) diversifyingthe investment portfolio so that potential losses on individual securities will be minimized.

Concentration of Credit Risk- The PMIB minimizes concentration of credit risk by requiring that commercial paper shall never exceed 50% ofthe total PMIB investment portfolio, and that no more than 5% of that portfolio shall be invested in the commercial paper of any single business entity. State of Kansas Notes to the Financial statements June 30,2008

111. Detailed Notes On All Funds

Investments Owned by Other Funds but maintained by KDFA

Speczj?c Fund Investments - Cash balances not held in the State Treasury may be invested as permitted by bond documents and bond covenants. Allowable investments include:

U.S. Government obligations Obligations of government-sponsored agencies Federal funds, unsecured certificates of deposit, time deposits and banker's acceptances Deposits - fully insured by FDIC Certain State or municipal debt obligations Certain pre-refunded municipal obligations Commercial paper Investments in money market funds Repurchase agreements Stripped securities Investments in the Municipal Investment Pool Fund Investment agreements Guaranteed investment contracts State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

As of June 30,2008, State agencies had the following investments (expressed in thousands):

Investment Less than 1 6-10 More than Agency Agency Name Type Fair Value Year 1-5 Years Years 10 Years Guaranteed 034 Adjutant Investment General Contracts $ 6,000 $ 6,000 $ 0 $ 0 $ 0

Guaranteed 173 Dept. of Investment Administration Contracts

Guaranteed 246 Fort Hays State Investment University Contracts

264 Dept. of Health and Repurchase Environment Agreements

Dept. of Health Guaranteed 264 and Investment Environment Contracts

264 Dept. of Health and Investment Environment Agreements

276 Dept. of Repurchase Transportation Agreements

300 Dept. of Repurchase Commerce Agreements

Guaranteed 300 Dept. of Investment Commerce Contracts

367 Kansas State Repurchase University Agreements

Guaranteed 367 Kansas State Investment University Contracts

Guaranteed 379 Emporia State Investment University Contracts

Guaranteed 385 Pittsburg State Investment University Contracts

521 Dept. of Repurchase Corrections Agreements

Guaranteed 521 Dept. of Investment Corrections Contracts

682 University of Repurchase Kansas Agreements

Guaranteed 682 University of Investment Kansas Contracts

University of Guaranteed 683 KS Medical Investment Center Contracts

715 Wichita State Repurchase University Agreements 1,517 0 0 555 962 Total $ 166,383 $ 18,414 $ 21,987 $ 20,630 $ 105,352 State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

The investments shown above include debt service reserve funds and other investments as shown below (expressed in thousands):

Debt Service Reserve Other Agency Name Fund Investments Total Adjutant General $ 0 $ 6,000 $ 6,000 Dept. of Administration 0 8,967 8,967 Fort Hays State University Department of Health and Environment Dept. of Transportation Dept. of Commerce Kansas State University Emporia State University Pittsburg State University Dept. of Corrections University of Kansas University of Kansas Medical Center Wichita State University Total

Interest Rate Risk- Due to the tax exempt status of the bonds it is generally the practice of Fund management to match reserve fund interest rates to the arbitrage yield on the bonds and the term ofthe investments to the maturity ofthe bonds. For invested loan funds, the Fund generally invests to maximize the interest rate and set a term of investment based on estimated expenditures which is generally 3-5 years.

Credit Risk-The Fund holds investments that may have credit risk since the underlying securities may include securities other than those that take the form of U.S. Treasuries or obligations explicitly guaranteed by the U.S. government. The investments are unrated. State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Concentration of Credit Risk- The Fund places no limit on the amount that may be invested with any one provider. The table below identifies the percent of total investments held by each provider as of June 30, 2008 (expressed in thousands): Percent of Total for Agency Name Investment Provider Fair Value Agency Adjutant General MBIA $ 6,000 100%

Dept. of Administration MBIA 8,967 100%

Fort Hays State University Natixis Funding Corp. 468 100%

Dept. of Health & Environ. AIG Dept. of Health & Environ. Citigroup Dept. of Health & Environ. MBIA Dept. of Health & Environ. Morgan Guaranty Dept. of Health & Environ. Socoete Gemerale Dept. of Health & Environ. Trinity Plus Funding Dept. of Health & Environ. Westdietscje

Dept. of Transportation FSA Capital Mgmt. Serv. 15,277 100%

Dept. of Commerce Trinity Plus Dept. of Commerce AIG Dept. of Commerce MBIA Dept. of Commerce Bayerische Dept. of Commerce FSA Capital Mgmt. Serv.

Kansas State University MBIA Kansas State University JP Morgan Chase Kansas State University Bayerische

Emporia State University Trinity Plus 227 100%

Pittsburg State University AIG Pittsburg State University Trinity Plus

Dept. of Corrections AIG 1,574 100%

University of Kansas Bayerische University of Kansas FSA Capital Mgmt. Serv. University of Kansas Natixis University of Kansas Trinity Plus State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Percent of Total for Agency Name Investment Provider Fair Value Agency

University of KS Medical Ctr. Natixis Funding Corp. University of KS Medical Ctr. Societe Generale

Wichita State University MBIA Wichita State University AIG Total

Component Unit-Universities

The following table summarizes the State University System's cash and investments at June 30, 2008 (expressed in thousands):

Fair Value U.S. Govemntent obligations $ 372 Kansas banks 2,820 Invested with PMIB 8,383 Invested with KDFA 13,962 Imprest funds 130 Cash held with the State Treasurer 443,507 Cash and other investments 2,240,854 Total cash and investments $ 2,710,028

University component unit cash investments minimize risks for credit, interest and concentration of credit per specific investment policies which include U.S. Treasury securities or obligations explicitly guaranteed by the U.S. government. State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Kansas Public Employees Retirement System Investments

Investments and the investment process are governed by K.S.A. 74-492 1. The Board of Trustees maintains a formal Statement of Investment Policy, which addresses the governing provisions of the law, as well as specifying additional guidelines for the investment process.

Statutory authority for the Retirement System's investment program is provided in 1C.S.A. 74-4901, et seq., effective July 1, 1993. The Retirement Act addresses the following areas:

e Establishes the structure of the Board of Trustees, defines the Trustees' responsibilities, imposing the prudent expert standard upon their actions with respect to managing the assets of the Retirement System.

Requires that the assets be invested to preserve capital and solely to provide benefits to members and the members' beneficiaries.

e Limits the possible allocation of common stock to 60% of the total book value of the fund.

e The annual allowance for new alternative(non-publiclytraded) investments is limited to 1% of the market value of the total investment assets of the fund as measured from the end of the preceding calendar year.

Establishes limits on the structure of future investments in real estate or alternative investments.

c Requires that the Board develop investment policies and objectives to invest fund assets.

e Authorizes the Board to hire qualified professionalslfms to assist in investing the fund and requires that such professionalslfms obtain errors and omissions insurance coverage and fidelity bond insurance coverage.

Authorizes the Board to pay for the services of retained professionalslfims at the rates futed by the Board, excluding any reimbursement for expenses and subject to the provisions of the appropriations acts.

c Provides for an annual audit and requires that the Board annually examine the investment program, specific investments, and its policies and practices.

The Retirement System's permissible investment categories include: 1) Equities 2) Fixed income securities 3) Cash equivalents 4) Real estate 5) Derivative products 6) Alternative investments

In fulfilling its responsibilities, the Board of Trustees has contracted with 15 investment management fmsand amaster global custodian. Presently, the Retirement System has investments in the financial futures market. Futures contracts are contracts for delayed delivery or receipt of securities in which the seller agrees to make delivery and the buyer agrees to take delivery at a specified future date, of a specified instrument, at a specified price. Market risk arises due to market price and interest rate fluctuations that may result in a decrease in the fair value of futures contracts. Futures contracts are traded on organized exchanges and require initial margin in the form of cash or marketable securities. Daily, the net change in the future contract value is settled in cash with the exchanges. Holders of futures contracts look to the exchange for performance under the contract. Accordingly, the credit risk due to nonperformance of counterparties to future contracts is minimal. At June 30,2008, the Retirement System had futures contracts with market exposure of approximately $2.0 million. Cash equivalents and short-term investments in amounts necessary to settle the economic State of Kansas Notes to the Financial Statements June 30,2008

I I 1 111. Detailed Notes On All Funds

value of the futures contracts were held in the portfolio so that no leverage was employed, in accordance with the Statement of Investment Policy.

The Retirement System's Statement of Investment Policy authorizes participation in a securities lending program administered by the master global custodian, Mellon Trust. The System receives income from the loan ofthe securities, in addition to the income, which accrues to the System as owner of the securities. The securities loans are open contracts and therefore could be terminated at any time by either party. The types of securities lent include U.S. Government securities, domestic and international equities, and domestic and international bonds.

The borrower collateralizes the loan with either cash or government securities of 102% of fair value on domestic securities and 105% of fair value on international securities loaned. Cash collateral is invested in the Retirement System's name in a dedicated short-term investment fund consisting of investment grade debt securities. The System does not have the ability to pledge or sell collateral securities without a borrower default. At June 30, 2008, the maturities of securities in this dedicated bond portfolio are as follows: 44% of the fair values of the securities mature within 30 days; 26% mature between 3 1 and 180 days; and 30% mature after 180 days.

The custodian provides for full indemnification to the Retirement System for any losses that might occur in the event of borrower default. Therefore, the Retirement System does not incur any credit risk as it relates to this activity. The securities on loan are marked to market daily to ensure the adequacy of the collateral. The fair value of securities on loan as of June 30,2007, and June 30,2008, were $2.5 billion and $2.8 billion respectively. Collateral heldby the Retirement System for June 30,2007, and June 30,2008, was $2.6 billion and $2.9 billion respectively. Net income produced fi-om securities lending activities for fiscal year 2007 was $4.1 million and for fiscal year 2008 was $3.3 million.

The Retirement System's international investment managers use forward contracts to hedge the exposure of the international investments to fluctuations in foreign currency. Active international investment managers use forward contracts to enhance returns or to control volatility. The Retirement System also contracts with a currency overlay manager to manage the currency exposure to the System's passive international equity portfolio. Currency risk arises due to foreign exchange rate fluctuations. Forward foreign exchange contracts are negotiated between two counterparties. The Retirement System could incur a loss if its counterparties failed to perform pursuant to terms of their contractual obligations. Controls are established by the investment managers to monitor the creditworthinessofthe counterparties.

All forward foreign currency contracts are carried at fair value by the Retirement System. As of June 30,2008, the System had sold forward currency contracts with a fair value of $2.9 billion and had bought forward currency contracts with a fair value of $2.9 billion. Purchases of forward currency contracts are liabilities reported as Securities Purchased, and sales of forward currency contracts are receivables reported as Sale of Investment Securities.

The Retirement System also participates in option contracts. These contractual agreements give the purchaser the right, but not the obligation, to purchase or sell a financial instrument at a specified price within a specified time. Options strategies used by the Retirement System are designed to provide exposures to positive market moves and limit exposures to interest rate and currency fluctuations.

The Retirement System internally manages a Treasury Inflation Protected Securities (TIPS) portfolio. TIPS are fixed income securities issued by the U.S. Treasury that pay a fixed coupon rate plus an adjustment for subsequent inflation. At June 30,2008, the Retirement System had invested in TIPS with a fair value of approximately $1.3 billion.

Custodial Credit Risk - is when in the event a financial institution or counterparty fails, the System would not be able to recover value of deposits, investments or collateral securities that are in the possession of an outside party. One hundred percent (100%) of the System's investments are held in the System's name and are not subject to creditors of the custodial bank. State of Kansas Notes to the Financial Statements June 30,2008

HI. Detailed Notes On All Funds

Concentration Risk - The System has investments in Federal National Mortgage Association issued securities that represent 5.7% of the total net asset value. KPERS investment policy does not prohibit holdings above 5% in the debt securities of U.S. government issuers. Government sponsored enterprises (GSEs, such as FNMA) are considered government issuers for the purpose of implementing KF'ERS investment policy. No other single issuer represents 5% or more of System assets other than the U.S. Government.

Czlrrencv Risk - is the risk that changes in exchange rates will adversely affect the fair value of an investment. The Retirement System's investments at June 30, 2008, were distributed among the following currencies (expressed in thousands):

USD Eauivalent Currency Percent $ 181,969,386 Australian Dollar 1.16% 90,681,401 Brazil Real 0.58% 464,942,945 British Pound Sterling 2.94% 223,224,386 Canadian Dollar 1.42% 1,824,365 Chilean Peso 0.01% 16,394,655 Chinese Yuan Renminbi 0.10% 3,199,635 Colombian Peso 0.02% 7,756,815 Czech ICoruna 0.05% 17,564,556 Danish Krone 0.1 1% 3,924,58 1 Egyptian Pound 0.02% 887,389,4 14 Euro Currency Unit 5.64% 76,004,188 Hong Kong Dollar 0.48% 3,153,057 Hungarian Forint 0.02% 2,730,990 Iceland ICrona 0.02% 9,650,359 Indian Rupee 0.06% 14,077,718 Indonesian Rupian 0.09% 7,360,533 Israeli Shekel 0.05% 672,60 1,969 Japanese Yen 4.27% 12,071,507 Malaysian Ringgit 0.08% 58,077,299 Mexican New Peso 0.37% 8,552,075 Moroccan Dirham 0.05% 43,916,170 New Taiwan Dollar 0.28% 21,765,426 New Turkish Lira 0.14% 4,007,083 New Zealand Dollar 0.03% 48,112,322 Norwegian Krone 0.3 1% 1,875,050 Philippines Peso 0.01% 10,961,646 Polish Zloty 0.07% 28,122,827 Russian Rube1 0.18% 36,815,760 S African Comm Rand 0.23% 42,871,584 Singapore Dollar 0.27% 88,154,148 South Korean Won 0.56% 59,852,065 Swedish Krona 0.3 8% 161,513,437 Swiss Franc 1.03% 7,230,837 Thailand Baht 0.05% 1,434,752 Uruguayan Peso 0.01% 1,596,722 Other currencies 0.01% U.S. Dollar * 78.90% 100.00%

* Includes securities lending collateral of $2,205,187,750 State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds I

The System's asset allocation and investment policies include active and passive investments in international securities as shown above. KPERS' target allocation is to have 18% of assets (excluding securities lending collateral) in dedicated international equities. The System also has 8% of assets targeted to Global Equities which are expected to be between 40 and 60% international. Core Plus bond managers are allowed to invest up to 20% of their portfolio in non-dollar securities. The System utilizes a currency overlay managerto reduce risk by hedging up to 50% of the foreign currency for selected international equity portfolios. At June 30,2008, the System's total foreign currency exposure was 22.4% hedged.

Czlstodial Credit Risk - Is when in the event a financial institution or counterparty fails, the System would not be able to recover value of deposits, investments or collateral securitiesthat are in the possession of an outside party. One hundred percent (100Y0) ofthe System investments are held in the System's name and are not subject to creditors of the custodial bank.

Concenz'ration Risk - The System has investments in Federal National Mortgage Association issued securities that represent 5.7% of the total net asset value. KPERS investment policy does not prohibit holdings above 5% in the debt securities of U.S. government issuers. Government sponsored enterprises (GSEs, such as FNMA) are considered government issuers for the purpose of implementing KPERS investment policy. No other single issuer represents 5%or more of System assets other than the U.S Government.

Credit Risk - The risk that an issuer or other counterparty to a debt investment will not fulfill its obligations. The Retirement System's investment policies require Core and Core Plus managers to have at least 70% of holdings in irlvestment grade securities. Each portfolio is required to maintain a reasonable risk level relative to its benchmark. System assets (expressed in thousands), as of June 30,2008, subject to credit risk, are shown with current credit ratings below:

Securities Quality Commercial U.S. Lending Rating Paper Corporate Agency Government Collateral Total NR $ 244,290 $ 200,159 $ 0 $ 0 $ 706,427 $ 1,150,876 AAA 1,459 469,448 54,894 1,452,410 20 1,784 2,179,995 AA 117,724 205,661 1,204,862 80,266 1,125,480 2,733,993 A 0 381,161 0 0 165,380 546,541 BBB 0 474,932 0 0 6,117 481,049 BB 0 108,203 0. 0 0 108,203 B 0 99,498 0 0 0 99,498 CCC 0 48,736 0 0 0 48,736 Total $ 363,473 $ 1,987,798 $ 1,259,756 $ 1,532,676 $ 2,205,188 $ 7,348,891

Commercial Paper also includes repurchase agreements and other short term securities.. Agency securities are those implicitly guaranteed by the U.S. Government. U.S. Government securities are treasury securities and agencies explicitly guaranteed. Securities Lending Collateral are securities invested using cash collateral from the securities lending program, not pooled with any other institution's funds. Securities rated Al/Pl are included in AA on this table. The securities lending collateral class has the following policy requirements: to be rated A3lA- or better; CommercialPaper must be Al/Pl; Asset-backed securities must be AA3lAA- or better; repurchase agreements must be 102% collateralized with A3lA- or AIR11 or better securities and held by the custodial bank or third-party custodian. Securities Lending Collateral NR (Not Rated) securities are 100% repurchase agreements.

Interest Rate Risk - The risk that changes in interest rates will adversely affect the fair value of an investment. Investment policy requires Core and Core Plus managers to be within 20% of their benchmark duration, and all fixed portfolios shall maintain a reasonable risk level relative to their benchmarks. The same System assets as above are also subject to interest rate risk. These are shown below grouped by effective duration ranges (expressed in thousands): State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Securities Effective Commercial U.S. Lending Duration Paper Corporate Agency Government Collateral Total 0-1 yr $ 363,473 $ 722,751 $ 290,663 $ 44,407 $ 2,201,611 $ 3,622,905 1-3 yrs 0 455,404 88,688 5,032 3,577 552,70 1 3-5 yrs 0 252,970 581,186 43,873 0 878,029 5-10 yrs 0 393,596 296,421 101,891 0 791,908 10-20 yrs 0 163,077 2,798 1,337,473 0 1,503,348

Total $ 363,473 $ 1,987,798 $ 1,259,756 $ 1,532,676 $ 2,205,188 $ 7,348,891

Treasury Inflation Protected Securities (TIPS) comprise 97.5% of the U.S. Government, 10-20 yrs group. Total TIPS for all duration ranges were.valued at $1.3 billion at June 30,2008. Securities lending collateral policy limit the maximum average portfolio maturity of 90 days. Only floating rate and fixed rate asset-backed securities may mature beyond thirteen months.

C. External Investment Pool

The Kansas Municipal Investment Pool (MIP) was created on July 1, 1992, as a voluntary, State-managed investment alternative for State and local funds. The Kansas State Treasurer's Office acts as the custodian for all moneys deposited. All Kansas governmental units, including cities, counties, school districts and other governmental entities holding public moneys are eligible to participate in the MIP.

The MIP is considered a mixed pool because agencies of the State of Kansas are participants in the pool. At June 30, 2008, the State's participation in the Pool was $6.4 million. Deposits in the MIP are combined with State moneys to form the Pooled Money Investment Portfolio (PMIP). Investments subject to categorization ofthe PMlP are all category 1. As of March 15,2004, the Pooled Money Investment Portfolio was rated AAAf/Sl+ by Standard & Poor's.

The MIP structure provides fixed rate investment alternatives between 30 and 179 days plus 180 and 365-day maturities as well as a variable rate, daily liquidity, overnight investment alternative. Participants' ownership in the fund is based on their deposits and is reflected as net assets held in trust on the statement of fiduciary net assets. The MIP is valued on a monthly basis. State of Kansas Notes to the Financial Statements i- June 30,2008 111. Detailed Notes On All Funds

D. Receivables

Accounts receivable as of June 30,2008, for the State's primary government and component units net of the applicable allowances for uncollectible accounts, are as follows (expressed in thousands):

Primary Government Business- Governmental Type Component Activities Activities Total Units Taxes receivable $ 343,389 $ 0 $ 343,389 $ 0 Loan receivable 0 734,977 734,977 27,759 Accrued interest 524 13,266 13,790 2,594 Other receivables 422,111 107,431 529,542 242,584 Total $ 766,024 . $ 855,674 $ 1,62 1,698 $ 272,937

Taxes receivable are shown net of allowances for uncollectible taxes of $348.5 million and net of estimated individual and corporate refunds of $243.6 million.

1 E. Investment in Direct Financing Leases ~ Component Units The Kansas Development Finance Authority issues revenue bonds to facilitate construction of certain capital projects for various State agencies and other public and private entities. KDFA7sinterests in the projects have been assigned to various State government units through the use of financing lease transactions. Contained in the trust indenture or resolution and loan agreement for each series of bonds is a pledge of revenue agreement by which revenues paid by the various governmental units, as loan obligors to KDFA are pledged to pay bond debt service. Amounts are actually paid 1 by the State agencies directly to the bond paying agents for the revenue bonds. 1 Net investment in direct fmancing obligations as of June 30,2008, are as follows (expressed in thousands):

Total minimum lease payments to be received $ 299,581 Less: unearned income (82,506) Net investment in direct financing leases $ 217,075

The future minimum loan payments to be received by KDFA under the direct fmancing agreements mirror the payments to be made by KDFA under the revenue bonds payable. State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

F. Restricted Assets

Certain revenue bond proceeds and other resources set aside for bond repayment, capital projects, and other purposes are reported as restricted assets in the Statement ofNet Assets because their use is limited by applicable bond covenants or statutory provisions.

Donor-Restricted Assets. Kansas' permanent endowment moneys are held primarily by State university foundations. Each university has a separate foundation, and each foundation has its own policies and procedures. Typically, the permanent endowment funds have a nonexpendable permanent corpus and an earnings reserve, which is used to receive earnings and pay expenses. The donor restrictions and the Uniform Management of Institutional Funds Act (K.S.A. 58- 360 1) provide guidance on how these funds can be invested, and also govern the spending ofnet appreciation from these investments. Net appreciation is reflected in restricted net assets. The amount of net appreciation available to be spent can be found in the individual foundation annual financial reports.

G. Equity

Invested in capital assets, restricted for capital projects, restricted for debt service and restricted for other purposes are each shown separately on the Statement ofNet Assets. The majority ofrestrictions are within the component units, with $382.4 million from the Kansas University Endowment. Restrictions as of June 30,2008, from component units are as follows (expressed in thousands):

Component Units

Kansas Kansas Kansas Development Technology Housing Kansas State Finance Enterprise Resources Bioscience Univenitv Authority Corporation Corporation Authority system- Total Invested in capital assets, net $ 25 $ 120 $ 367 S 383 $ 1,075,087 $ 1,075,982 of related debt Restricted for capital projects 0 Restricted for debt service 0 Restricted for other purposes 0 Unrestricted 6.228 Total $ 6,253 State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

H. Capital Assets

Primary Government (expressed in thousands) Beginning Ending Balance Increases Decreases Balance Governmental activities Capital assets, not being depreciated: Land Land improvements Construction in progress Infrastructure (including construction in progress) 9,163,009 370,791 175,396 9,358,404 Total capital assets, not being depreciated 10,257,914 704,948 527,492 10,435,370 Capital assets, being depreciated: Buildings and improvements Equipment and furnishings Vehicles Water rights Total Less accumulated depreciation for: Buildings and improvements Equipment and furnishings Vehicles Water rights Total Total capital assets, being depreciated, net Governmental activity capital assets, net

Business-type activities Capital assets, being depreciated: Equipment and furnishings $ 4,334 $ - 243 $ 138 $ 4,439 Less accumulated depreciation for: Equipment and furnishings 4,078 135 138 4,075 Business-type activity capital assets, net $ 256 $ 108 $ 0 $ 364 State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Depreciation expense was charged to functions/programs as follows (expressed in thousands):

Governmental activities General government Human resources Education Public safety Agriculture and natural resources

Highways- - and other transportation Health and environment 1,114 Total depreciation expense - Government activities $ 76,450

Business-type activities Health care stabilization Lottery 134 Total depreciation expense - Business-type activities $ 135 State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Component Units (expressed in thousands) Beginning Ending Balance Increases Decreases Balance Kansas Development Finance Authority Capital assets, being depreciated Furniture and equipment Buildings and improvements Less accumulated depreciation Total capital assets, being depreciated, net

Kansas Technology Enterprise Corporation Capital assets, being depreciated Furniture and equipment Less accumulated depreciation Total capital assets, being depreciated, net

Kansas Housing Resources Corporation Capital assets, being depreciated Furniture and equipment Vehicles Buildings and improvements Less accumulated depreciation Total capital assets, being depreciated, net

Kansas Bioscience Authority Capital assets, not being depreciated Land Total capital assets, not being depreciated

Capital assets, being depreciated Furniture and equipment Buildings and improvements Less accumulated depreciation Total capital assets being depreciated, net Total capital assets, net State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

(expressed in thousands) Beginning Ending Balance Increases Decreases Balance University System Capital assets, not being depreciated Land $ 35,735 Land improvements 34,725 Construction in progress 75,629 Total capital assets, not being depreciated 146,089

Capital assets, being depreciated Buildings and improvements 2,083,096 Equipment and furnishings 430,927 Vehicles 42,383 Total capital assets, being depreciated 2,556,406

Less accumulated depreciation for: Buildings and improvements 846,578 Equipment and furnishings 274,261 Vehicles 35,3 16 Totals 1,156,155 Total capital assets, being depreciated, net 1,400,25 1 University system capital assets, net $ 1,546,340

All Cornpoilent Units Capital assets, not being depreciated Land Land improvements Construction in progress Totd capital assets, not being depreciated

Capital assets, being depreciated Buildings and improvements Equipment and furnishings Vehicles Total capital assets, being depreciated

Less accumulated depreciation for: Buildings and improvements 846,701 68,629 10,800 904,530 Equipment and furnishings 275,417 43,924 16,059 303,282 Vehicles 35,325 2,728 1,441 36,612 Totals 1,157,443 115,281 28,300 1,244,424 Total capital assets, being depreciated, net 1,400,845 56,036 3,589 1,453,292 All Component Units capital assets, net $ 1,546,934 $ 186,782 $ 96,230 $ 1,637,486 State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Construction Commitments

The State has active construction projects as of June 30,2008. The projects include road projects, dam repair, building remodeling and restoration, and new juvenile correctional facilities. At year-end, the State's commitments with contractors are as follows (expressed in thousands):

Spent -to- Remaining Agency - Project Date Commitment Funding Source

Primary Government

Kansas Department of Correction Construction ofNew Clinic & Infirmary - Lansing $ 884 $ 1,126 Correctional Facilities Infrastructure Project fund Correctional Facility (exterior shell~only) Locking System Replacement, A,B, & C 783 1,566 Correctional Facilities Infrastructure Project fund Cellhouses - Hutchinson Correctional Facility

Department of Social and Rehabilitation Services Construction of new Lamed State Security 47,283 2,838 Bonds 2002N-1 Hospital Dept. of Social and Rehabilitation Service 34,902 98 Bonds 2004A-1 Projects. State Hospitals Rehabilitation Construction Project 0 2,166 Debt Service - SIBF - Osawatomie State Hospital

Department of Administration Statehouse restoration and renovation and 126,339 24,888 Lease Revenue Bonds secured by lease rents underground parking garage Capitol Complex Maintenance Tunnel 0 3,001 State General Fund Replacement Landon State Office Building Inspection & Fapade 2,405 125 State General Fund Repair

Kansas Department of Transportation Various Roadway Projects (over 3,000 projects) n/a 697,900 Federal, State and Local funds (primarily in the form of matching Federal highway construction funds, motor fuel tax moneys and vehicle registrations and permits)

Department of Wildlife and Parks Prairie Spirit Trail Development 8 State and Federal fund Cheyenne Bottoms Visitor Center 1,152 State fund, Federal fund, gifts and donations Milford Hatchery Improvements 40 State fund

Adjutant General's Department Great Plains Training Center 5,044 State bond funds and federal funds Pittsburg State University/PittsburgReadiness Ctr 478 State bond funds and federal funds State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Spent -to- Remaining Agency - Prqject Date Commitment Funding Source Component Units

Kansas State University Jardine Apartments Housing Project 58,150 14,135 Bonds and state funds Parking Garage 5,600 12,255 Bonds Salina Student Life Center 794 5,106 Bonds and restricted fees funds McCain Entry Drive 0 1,700 Parking fees funds

Emporia State University WAW Library HVAC 63 167 State funds WAW Library Elec 128 283 State funds Utility Tunnel 303 36 State funds Roosevelt Hall Foundation 116 156 State funds Roosevelt Hall HVAC 149 26 State funds Campus HVAC 153 109 State funds Welch East Stadium 16 139 State funds

Pittsburg State University KS Army National Guard ReadinessRecreation 9,086 691 Bonds, education building fund, general fund student Center feelgifts and auxiliary funds. Mc Cray Hall Renovation 568 2,219 R&R fund, education building fund & student feeslgifts Construction of New Student Health Center 110 2,390 Bonds and private funds

University of Kansas Deferred Maintenance - Tunnels 964 7,836 Infrastructure maintenance program & university interest KLETC Capital Improvement Project 2,749 13,673 Revenue Bonds secured by KLETC docket fees Krehbiel Scholarship Hall 3,003 997 Private gifts Student Recreation Center Expansion 4,191 2,109 Revenue Bonds secured by pledged revenue from KU Athletics

University of Kansas Medical Center Miscellanies 4,284 Unknown University funds

Wichita State University Engineering Research Lab Building 10,055 0 KDFA Bond series WSU 2003C and WSU 2005D Engineering Research Lab Building 39 0 Private Local Funds (sponsored Research)

Total $ 323,718 $ 804,457 State ofKansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

I. Interfund Receivables, Payables, and Transfers

Due fromlto other funds

Due frodto other funds represent interfund accounts receivable and payable. The total of due frondto other funds at June 30,2008, is as follows (expressed in thousands):

Due from Due to Fund Other Funds Other Funds General Fund $ 6,000 $ 49,274 Transportation Fund 37,517 0 Non-major Governmental Funds 2 1,723 1,639 Non-major Enterprise Funds 0 12,621 Internal Service Funds 0 1,706 Fiduciary Funds 6,000 6,000 Total $ 7 1,240 $ 7 1,240

Advances tolfrom other funds

Advances tolfrom other funds represent long-term loans from one fund to another fund. Advances at June 30,2008, were as follows (expressed in thousands):

Advances to Advances from Fund Other Funds Other Funds General Fund $ 0 $ 103,399 Transportation Fund 30,897 0 Non-major Governmental Funds 78,530 5,106 Non-major Enterprise Funds 2,000 0 Internal Service Funds 0 2,922 Total $ 111,427 $ 111,427

The interfund balances designated as due frondto other funds are short-term receivables and payables resulting from the time lag between the dates that a) interfund goods and services are provided or reimbursable expenditures occur; b) transactions are recorded in the accounting system; and c) payments between funds are made.

Net transfers by major funds are as follows (expressed in thousands):

Fund Net Transfers In Net Transfers Out General $ 0 $ 244,197 Transportation 0 228,667 Transportation-Capital Projects 0 595 Health Policy Authority 0 722,844 Non-Major Governmental 1,279,473 0 Unemployment Insurance 0 11,026

Health Care Stabilization - ' 917 0 Non-Major Enterprise 0 68,052 Internal Service Fund 0 5,009 Total $ 1,280,390 $ 1,280,390 State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

J. Short-term Obligations

Short-term obligations at June 30,2008, and changes for the fiscal year then ended (expressed in thousands) are as follows:

6/30/07 6/30/08 Beginning Ending Balance Additions Deletions Balance GovernmentalActivities Certificates of Indebtedness Accrued receivables: State Building Fund Children's Initiatives Fund Correctional Institution Building Fund State Economic Development Kansas Endowment for Youth Fund 27' Paycheck Expanded Lottery aperations Bond Anticipation Notes: KDFA Series 2007-1,5.80% KDFA Series 2008-1, 3.23% KDFA Series 2008-2,3.86%

Total short-term obligations $ 3,000 $ 469,868 $ 465,536 $ 7,332

A Certificate of Indebtedness may be written and issued by the Pooled Money Investment Board (PMIB), an agency of the State, per K.S.A. 75-3725a. This occurs when it appears estimatedresources are sufficient in the State General Fund (SGF) to meet the State's expenditures and obligations for that fiscal year, but may not be sufficient to do so in a particular month(s) when obligations are due. Once approval has been granted as prescribed in K.S.A. 75-3725a, the written Certificate of Indebtedness is issued by the PMIB subject to redemption ii-om the SGF not later than June 30, immediately following the issuance of the indebtedness. No interest is accrued or paid. A Certificate of Indebtedness of $350 million was issued on December 10,2007, and redeemed on June 30,2008.

Per K.S.A. 76-6b11, on July 1 of each year ad valorem tax and receivables are posted to the State Treasurer's receivables for the State Buildings Fund. The receivable is reduced as the ad valorem taxes are received. In fiscal year 2008, $27.1 million was posted to the Kansas Educational Building Fund and $13.5 million to the State Institutions Buildings Fund. The receipts reduced the receivable to zero in June 2008.

Per House Bill 2368, Section 107(g) of the 2007 Session, receivables are to be posted to the State Treasurer's receivables for the Children's Initiatives Fund by an amount certified by the director of budget which is to be 50% of the estimated receipts during the year. The receivable amount is reduced as moneys are received into the fund. In fiscal year 2008 a receivable was posted for $23.9 million and was reduced to zero in April 2008.

Per House Bill 2368, Section 107(i) of the 2007 Session, on July 1, 2007, receivables are to be posted to the State Treasurer's receivables for the Correctional Institutions Building Fund by an amount certified by the director of budget which is to be 80% of the estimated receipts during the year. The receivable amount is reduced as moneys are received into the fund. In fiscal year 2008, a receivable was posted for $4 million and was reduced to zero in March, 2008.

Per House Bill 2368, Section 107(h) of the 2007 Session, on July 1, 2007, receivables are to be posted to the State Treasurer's receivables for the State Economic Development Initiatives Fund by an amount certified by the director of budget which is to be 50% of the estimated receipts during the year. The receivable amount is reduced as moneys are received into the hnd. In fiscal year 2008, a receivable was posted for $21.2 million and was reduced to zero in December 2007. State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Per House Bill 2368, Section 107Cj) of the 2007 Session, on July 1, 2007, receivables are to be posted to the State Treasurer's receivables for the Kansas Endowment for Youth Fund by an amount certified by the director of budget which is to be 80% of the amount approved for expenditure during the fiscal year. The receivable amount is reduced as moneys are received into the fund. In fiscal year 2008, a receivable was posted for $200 thousand and was reduced to zero in April 2008.

Per House Bill 2368, Section 107(p) of the 2007 Sesssion, on July 1,2007, receivables are to be posted to the State Treasurer's receivables for the 27' Payroll in the amount of $22.6 million. The receivable amount is reduced as moneys are received into the fund. In fiscal year 2008, a receivable was posted for $22.6 million and was reduced to zero in June 2008.

Senate Bill 357, Section 10 of the 2007 Session, allowed the executive director of the Kansas Racing and Gaming Commission to request loans from the Pooled Money Investment Board through June 30, 2008, for operating expendituresrelated to expanded lottery operations. Ten loans were requested which totaled $2.6 million at interest rates from 8.12% to 5.94%. All loans are due by June 30,2009.

The Kansas Development Finance Authority is empowered by law to consider, authorize, issue, and sell debt obligations of the State. To date, the KDFA has authorized the issuance of notes in anticipation of revenue bond financing. When this short-term debt does not meet long-term financing criteria, it is classified among fund liabilities.

The $3 million KDFA Bond Anticipation Note, Series 2007-1, was issued to hnd a capital improvement project for the Kansas Army National Guard Armory. The loan was provided by the Pooled Money Investment Board for a term of 365 days (due February 1,2008) at an interest rate of 5.80%.

The $1.7 million KDFA Bond Anticipation Note, Series 2008-1, was issued to fund a capital improvement project for the department of Corrections. The loan was provided by the Pooled Money Investment Board for a term of 365 days (due February 15,2009) at an interest rate of 3.23%.

The $3 million KDFA Bond Anticipation Note, Series 2008-2, was issued to fund a capital improvement project for the Kansas Army National Guard Armory. The loan was provided by the Pooled Money Investment Board for a term of 183 days (due December 23,2008) at an interest rate of 3.86%. State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

K. Long-term Obligations

A summary of long-term obligations at June 30,2008, for the fiscal year then ended is as follows (expressed in thousands):

Government Business-type Activities Activities Total Revenue bonds payable $ 2,726,970 $ 677,472 $ 4,096,467 Sales tax limited obligation bonds Notes payable Capital leases payable Arbitrage rebate payable Claims and judgments Compensated absences Other post employment benefits Other Total Ion&!-term obligations

Long-term obligations at June 30,2008, and changes for the fiscal year then ended are as follows (expressed in thousands):

Original 6130107 6/30/08 Amounts Issue Interest Maturity Amount Beginning Ending Due In Dates - Rates Th~ou~h of Debt Balance Additions Deletions Balance One Year Governmental Activities Revenue bonds oavable: KDFA Series 1998 V 4.25 -5.00% KDFA Series 1999 E 4.00 - 5.00% KDFA Series 2001 M 3.50- 5.00% KDFA Series 2003 H 1.41 -5.21% KDFA Series 2004 A 2.00- 5.00% KDFA Series 2004 C 3.43 -5.50% KDFA Series 2004 G-l & G-2 2.50-5.13% KDFA Series 2005 H 3.25 - 5.00% KDFA Series 2005 N 3.50- 4.00% KDFA Series 2006 A 4.00-5.00% KDFA Series 2006 L 4.00-4.25% KDFA Series 2007 F 4.00 - 4.97% KDFA Series 2007 K 4.00- 5.25% KDOT Series 1993 A 2.65 - 5.63% KDOT Series 1998 3.65 -5.50% KDOT Series 2000 A,B & C 450-5.85% KDOT Series 2002 A Variable KDOT Series 2002 B & C 3.39% KDOT Series 2002 D Variable KDOT Series 2003 A & B 3.13 -5.00% KDOT Series 2003 C 3.36% KDOT Series 2004 A 450 -5.50% KDOT Series 2004 B Variable KDOT Series 2004 C Variable KDOT Series 2008 A 3.36%

Plus deferred amounts: Net unamortized premium (discount) Unamohzed deferred refunding difference Total revenue bonds payable

Sales tax limited oblieation bonds: 1999 KISC 2001 Project Area B 2002 SubordinateKISC 400 Acres Refinding I" Lien 2005B Turbo Is'Lien 2005C Turbo TdLien2005 Turbo Total sales tax limited obligation bonds

Notes oavable: Water supply storage in Federal reservoirs Printing plant Total notes payable

Capital leases payable Arbitrage rebate payable Claims and judgments Compensated absences Other post employment benefits Total Goverrimer~talActivities State of Kansas Notes to the Financial Statements June 30,2008

I 111. Detailed Notes On All Funds

Original 6/30/07 6/30/08 Amounts Issue Interest Maturity Amount Beginning Ending Due In Dates Rates Through of Debt Balance Additions Deletions Balance One Year Business-type Activities Revenue bonds ~avable: KDFA Series 1997 1 & 2 1998 2020 KDFA Series 1998 1 & 2 1999 2021 KDFA Series 1998 Il 1998 2020 KDFA Series 2000 1 & II 2000 2022 KDFA Series 2000 1 & 2 2000 2023 KDFA Series 2001 1& Il 2002 2022 KDFA Series 2002 1 & 2 2002 2024 KDFA Series 2002 II 2003 2024 KDFA Series 2004 I & II 2004 2023 KDFA Series 2004 1 & 2 2005 2026 KDFA Series 2005 CW 2006 2027 KDFA Series 2005 TR 2006 2026 KDFA Series 2006 TR 2007 2027 Plus deferred amounts: Net unamortized premium (discount) Unamortized deferred refunding difference Totil revenue bonds payable

Arbitrage rebate payable Claims and judgments Compensated absences Other post employment benefits Other Tola1 B~siness-ryyeActivities State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Original 6130107 6l30108 Amounts Issue Interest Maturity Amount Beginning Ending Due In Dates Rates - Thrwgh of Debt Balance Additions Deletions Balance One Year Component Units Revenue bonds uavable: Board ofRegents Series 1969 KDFA Series 1989 E KDFA Series 1993 L KDFA Series 1995 K KDFA Series 1996 A KDFA Series 1996 J KDFA Series 1997 C KDFA Series 1997 G-l & G-2 KDFA Series 1998 B KDFA Series 1998 D KDFA Series 1998 E KDFA Series 1998 H KDFA Series 1998 L KDFA Series 1998 P KDFA Series 1999 A-l & A-2 KDFA Series 1999 B KDFA Series 1999 C KDFA Series 1999 D KDFA Series 1999 H KDFA Series I999 N KDFA Series 2000 B KDFA Series 2000 D KDFA Series 2000 V KDFA Series 2001 B KDFA Series 2001 D KDFA Series 2001 F KDFA Series 2001 J KDFA Series 2001 N KDFA Series 2001 S KDFA Series 2001 U KDFA Series 2OOlW KDFA Series 2002 A KDFA Series 2002 C KDFA Series 2002 H KDFA Series2002 J-l & 1-2 KDFA Series 2002 K KDFA Series 2002 N KDFA Series 2002 P KDFA Series 2003 A-l & A-2 KDFA Series 2003 C KDFA Series 2003 D-l & D-2 KDFA Series 2003 J KDFA Series 2004 D KDFA Series 2004 F KDFA Series 2004 G-l & G-2 KDFA Series 2005 A KDFA Series 2005 D KDFA Series 2005 El& E-2 KDFA Series 2005 F KDFA Series 2005 G KDFA Series 2006 B KDFA Series 2007 A KDFA Series 2007 E KDFA Series 2007 H KDFA Series 2007 M KDFA Series 2008 A KDFA Series 2008 D

Plus deferred amounts: Net unamortized premium (discount) Unamortized Deferred Refunding Difference Total RevenueBonds Payable

Notes vavable: KSU Grain Science Center Component units of university system Total notes payable

Arbitrage rebate payable Capital leases Compensated absences Other post employment benefits Other Total Cornpone~tlUltits State of Kansas Notes to the Financial Statements . June 30,2008

111. Detailed Notes On All Funds

The following table presents annual debt service requirements for those long-term debts outstanding at June 30,2008, which have scheduled debt service amounts (expressed in thousands):

Governmental Business-type Component Activities Activities Units Principal Interest Principal Interest Principal Interest Revenue bonds: 2009 2010 201 1 2012 2013 2014-2018 2019-2023 2024-2028 2029-2033 2034-2038 Unamortized premium Unamortized deferred refunding Totals

Sales tax limited obligation bonds: 2009 2010 201 1 2012 2013 2014-2018 2019-2023 2024-2028 Totals Notes vavable: 2009 2010 201 1 2012 2013 2014-2018 20 19-2023 2024-2028 2029-2033 2034-2038 2039-2043 Totals

Capital leases payable 140,106 57,370 0 0 15,019 4,275

Long-term debt without scheduled debt service:

Arbitrage rebate payable 48 1 0 1,755 0 163 0 Claims and judgments 82,858 0 205,766 0 0 0 Compensated absences 121,255 0 56 0 58,743 0 Other post employment benefits 16,813 0 89 0 11,775 0 Other 0 0 14,703 0 110,071 0

Total long-term obligations $ 3,292,004 $ 1,348,392 $ 899,841 $ 270,480 $ 1,006,869 $ 370,239 State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

General Obligation Bonds

The State does not have the statutory authority to issue general obligation bonds. However, the Legislature has authorized the issuance of specific purpose revenue bonds and other forms of long-term obligations.

Revenue Bonds

The Kansas Development Finance Authority (IDFA) was created to enhance the ability ofthe State to finance capital improvements and improve access to long-term financing for State agencies, political subdivisions, public and private organizations, and businesses. The KDFA has issued numerous outstanding series of bonds. These revenue bonds are secured by and payable from various pledged revenues, which include selected tax receipts such as withholding taxes, fees for services such as parking and residential halls, and appropriations. Please reference Note K. above for KDFA revenue bonds and future principal and interest payments.

The Kansas Department of Transportation (KDOT) has 13 outstanding series ofHighway Revenue Bonds to finance part of the costs of construction, reconstruction, maintenance or improvement of highways in the State as part of the State's Comprehensive Transportation Program. The State's Comprehensive Transportation Program was developed by KDOT after extensive study of the transportation needs in the State and was implemented by the 1999 Kansas Legislature. Principal and interest payments on these bond issues are paid from revenues collected in the State Highway Fund, which include motor fuels taxes, state sales taxes, compensating use taxes, and drivers' license and vehicle registration fees. Please reference Note K. above for KDOT revenue bonds and future principal and interest payments.

The coupon interest rate on outstanding bonds varies fi-om 3.00% to 5.5%. In addition, various bonds were issued as variable rate instruments whose rates change on a daily, weekly, or 28-day basis depending on their respective individual modes. During the year, interest rates ranged from 0.6% to 4.13% on the daily adjustable bonds, from 0.96% to 10.0% on the weekly adjustable bonds, and from 2.85% to 4.35% on the 28-day adjustable bonds. The 2000 B and C Bonds, 2002 B, C and D Bonds and 2004 C Bonds are subject to tender under certain conditions. If the tendered bonds cannot be remarketed, the liquidity provider has agreed to purchase the bonds and hold them for a maximum of 180 days. Through June 30,2008, all bonds tendered have been remarketed. However, since there is not a long-term financing option in place at June 30,2008, for tendered bonds, the Series 2000 B and C Bonds, 2002 B, C and D Bonds and 2004 C Bonds have been recorded as obligations of the Transportation - Capital Project Fund resulting in a deficit fund balance in that fund.

The Board of Regents of the State of Kansas (Regents) has issued one outstanding series of Revenue Bonds to construct a dormitory at Emporia State University. Principal and interest payments on the bonds are paid from revenues collected from the operation of the dormitory. Please reference Note K. above for KDOT revenue bonds and future principal and interest payments.

Sales Tax Limited Obligation Bonds

In March 1998, the Unified Government of Wyandotte CountyIKansas City, KS established the Prairie Delaware Redevelopment District. The District was created for development of a major tourism area, including the Kansas International Speedway. In connection with various projects in the District, the Unified Government has issued Sales Tax Limited Obligation Revenue Bonds (STAR bonds). Pursuant to issuance of the STAR bonds, the Unified Government and the State of Kansas have entered into a Redevelopment District Tax Distribution Agreement. The agreement provides that the principal of, accreted value, and interest on the STAR bonds will be paid proportionally by the Unified Government and the State of Kansas, based on each entity's respective share of sales taxes generated within the District. The State of Kansas' proportional share is approximately 72%. Therefore, 72% of the outstanding obligation on each STAR bond issue has been recorded with the State of Kansas'long-term debt. This proportional share may change in the future if the sales taxes assessed by the local or state governments are modified. Further details regarding STAR bonds may be found in the chart at the beginning of Note 111, Section K. State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Special Obligation and Private Activity Bonds

Special obligation bonds have various revenue streams that are pledged for repayment of principal and interest. These bonds are special limited obligations of KDFA, where neither the principal of, redemption premium, if any, nor interest on these bonds constitutes a general obligation or indebtedness of, nor is the payment thereof guaranteed by KDFA or the State. Accordingly, such special obligation bonds are not included in KDFA7sJune 30,2008, balance sheet. KDFA's special obligation bonds at June 30,2008, total $2.1 billion.

Private activity bonds are special limited obligations of KDFA and are made payable solely from a pledge of the applicable trust estate that is comprised of a particular designated revenue stream of the borrower. Accordingly, such private activity bonds are not included on KDFA's June 30,2008, balance sheet. KDFA's private activity bonds at June 30,2008, total $1.0 billion.

Notes Payable

PMIB is authorized as directed by statute to loan funds from the State treasury to state agencies for various capital projects including the purchase of the State's printing plant and the renovation and purchase of the Landon state office building. These internal loans are recorded as loans receivable in the State treasury's cash balance in Note 111, Section A, Deposits and Investments, and in corresponding amounts of notes payable in Note 111, Section K, Long-term Obligations - Primary Government, Governmental Funds and Section I, Short-term Obligations.

The Kansas Water Office is charged by statute to meet, as nearly as possible, the anticipated future water supply needs of the citizens of Kansas. The agency has executed several water supply storage agreements with the Federal Government over the past 34 years for water supply storage capacity in large Federal multipurpose lakes under the provisions of the 1958 Federal Water Supply Act. Nine ofthese agreements provide for long-term (fifty-year) repayment with interest of the costs incurred by the Federal Government in construction of the water supply storage space. The Kansas Water Office is authorized by K.S.A. 82a-934 to enter into such agreements, subject to legislative approval through appropriations. Generally, however, receipts from the sale ofwater to local municipal and industrial water supply users are adequate to make the annual payments due under the long-term contracts with the Federal Government. Portions of the storage in some reservoirs have been designated as "future use" storage, and as such; the State is not required to make payments on that portion of storage until it is needed by users. The State has not recorded a liability at June 30,2008, for portions of the storage designated as "future use" storage.

Lease Commitments

The State leases office buildings, space, and equipment. Although the lease terms vary under a variety of agreements, most leases are subject to annual appropriations from the State Legislature to continue the lease obligations. If a legislative appropriation is reasonably assured, leases are considered non-cancelable for financial reporting purposes. Any escalation clauses, sublease rentals, and contingent rents are considered immaterial to the future minimum lease payments and current rental expenditures. State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Operating Leases

The State has commitments with non-state entities to lease certain buildings and equipment. Future minimum rental commitments for building and equipment operating leases as of June 30,2008, are as follows (expressed in thousands):

Fiscal Year 2009 $ 10,928 2010 9,233 201 1 8,525 2012 7,846 2013 7,124 2014-2018 22,022 2019-2023 10,125 Total future minimum lease payments $ 75,803

Rent expenditures/expenses for operating leases for the year ended June 30,2008 $ 9.669

Capital Leases

The State has entered into agreements to lease various facilities and equipment. Such agreements are, in substance, purchases and are reported as capital lease obligations. At the date of acquisition, the assets are valued on the statement of net assets at the present value of the future minimum lease payments. Interest expense for capital leases is not capitalized.

The following schedule presents future minimum lease payments as of June 30,2008 (expressed in thousands):

Year Ending Governmental Activities June 30 Principal Interest 2009 $ 11,980 $ 5,904 2010 11,421 5,392 201 1 10,146 4,907 2012 9,201 4,462 2013 9,509 4,891 2014-2018 35,061 17,797 20 19-2023 24,95 1 9,217 2024-2028 20,729 4,381 2029-2033 Total

Leased land, buildings, and equipment under capital leases in capital assets at June 30,2008, include the following (expressed in thousands):

Governmental Activities Land (non-depreciable) $ 9,926 Buildings 9 1,474 Equipment 60,883 Less: Accumulated depreciation Total State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Master Lease Purchase Program

The Master Lease Purchase Program, administered by the Department of Administration, provides low interest, equipment lease purchase financing and energy conservation project financing to State agencies. The Program began in 1985 with the issuance of Certificates of Participation and evolved into the current Program, which utilizes lines of credit. Lease purchase obligations under the Program are not general obligations of the State, but are payable fiom appropriations of State agencies participating in the Program, subject to annual appropriation. Financing terms of two years through fifteen years are available. The financing term should not exceed the useful life ofthe purchased item. The interest component of each leaselpurchase payment is subject to a separate determination.

Defeasaitce of Debt

Primary Government

For fmancial reporting purposes, the State has in substance defeased certain bonds by issuing additional debt. Thus, the related liability and trust assets to pay the defeased bonds have been removed fiom the financial statements in the year of defeasance. Defeased debt at June 30,2008, and changes for the fiscal year then ended are as follows (expressed in thousands):

613 0107 613 0108 Beginning Ending Bond Issue Balance Payments Balance Governmental Activities KDOT Series 1993 A KDOT Series 1994 KDOT Series 1994 A KDOT Series 1998 KDOT Series 1999 KDOT Series 2000 A KDFA Series 2003 J KDFA Series 2004 A Total governmental activities

Business-type Activities KDFA Series 1998 1 & 2 KDFA Series 1998 I1 KDFA Series 2000 I KDFA Series 2000 I1 (Nov.) KDFA Series 2000 1 & 2 KDFA Series 2001 I1 KDFA Series 2002 I1 KDFA Series 2002 1 & 2 Total business-type activities

In May 2008, the Department of Transportation issued $15 1million Adjustable Tender Highway Revenue Bonds Series 2008 A. The proceeds were used to refund the Series 2003 C Bonds and the pay the associated cost of issuance. The Series 2003 C Bonds were auction rate securities and have been retired. The Series 2008 A Bonds were issued in the weekly interest rate adjustment mode with similar maturities as the Series 2003 C Bonds, ranging from September 2013 to September 2015. The purpose of this bond issuance and retirement was to minimize adverse financial impacts that could result fiom market disruptions.

No bonds were defeased in the current fiscal year. State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

Component Unit

For financial reporting purposes, the Kansas Development Finance Authority has in substance defeased certain lease revenue bonds by issuing additional debt. Thus, the related liability and trust assets to pay the defeased lease revenue bonds have been removed from the financial statements in the year of defeasance. Defeased debt at June 30,2008, and changes for the fiscal year then ended are as follows (expressed in thousands):

6130107 6130108 Beginning Ending Bond Issue Balance Payments Balance FHSU Series 1968 $ 20 $ 20 $ 0 KDFA Series 1997 G-1 & G-2 KDFA Series 1999 D KDFA Series 1999 H KDFA Series I 999 N KDFA Series 2000 T KDFA Series 2000 V KDFA Series 2001 N KDFA Series 2001 W Total component units

No bonds were defeased in the current fiscal year.

Arbitrage Rebate Payable

Estimated arbitrage rebate payables have been calculated and liabilities recorded of $481,000 for Governmental Activities, $1.8 million for Business-type Activities, and $163,000 for Component Units.

Derivative Instruments

Interest rate swap

KDFA Series 2002 5-2 Objective of the interest rate swap. As a means to lower its borrowing costs, when compared against fixed-rate bonds at the time of issuance in August 2002, the Kansas Development Finance Authority entered into an interest rate swap in connection with its 2002 5-2 lease revenue bonds. The intention of the swap was to effectively change the variable interest rate of the bonds to a synthetic fixed rate of 3.39%.

Terms. The lease revenue bonds mature in December 2034 and the related swap agreement matures in December 2009. The swap's notional amount of $22.0 million is equal to the par amount of the variable rate bonds. The swap agreement was executed at the same time the bonds were issued. Under the terms of the swap agreement, the KDFA pays the counterparty a fured rate of 3.39% and receives a variable payment computed on the Bond Market Association Municipal Swap IndexTM(BMA).

Fair Value. Because interest rates declined subsequent to the date of execution, the swap had an indicative value of $315,860 as of June 30,2008.

Kansas Department of Transportation Objective ofthe swaps. In order to protect against the potential of rising interest rates, the Department of Transportation entered into four separate pay-fixed, receive-variable interest rate swaps at a cost less than what the Department would have paid to issue fixed-rate debt.

Terms,fair values, and credit risk. The terms, including the fair values and credit ratings ofthe outstanding swaps as of June 30,2008, are included below. The Department of Transportation's swap agreements contain scheduled reductions State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds to outstanding notional amounts that are expected to approximately follow scheduled or anticipated reductions in the associated bonds payable (expressed in thousands).

Fixed Swap Counterparty Notional Effective Rate Variable Rate Fair Termination Credit Associated Bond Issue Amount Date Paid Received Values Date Rating KDOT Series 2002 D $86,875 12/17/02 5.240% 67% of USD-LIBOR $(6,428) 03/01/12 Al/A KDOT Series 2002 B & C* 200,000 10/23/02 3.164% 67% of USD-LIBOR Aa3/AA- KDOT Series 2002 B & C* 120,005 10/23/02 3.164% 67% of USD-LIBOR Aa3/AA- KDOT Series 2003 C 150,275 12/03/03 3.359% 71% of USD-LIBOR** Al/A KDOT Series 2004 B & C*** 72,000 11/23/04 3.571% 63.5% of USD-LIBOR + .29% Aa3/AA- KDOT Series 2004 B & C 75,000 07/01/07 3.571% 63.329% of 10 Year LIBOR Aa3/AA- KDOT Series 2004 B 75,000 7/10/07 67% of USD-Libor 61.56% of 10 Year LIBOR AaaIAAA $779,155

*-two counterparties **-or the lessor of the Actual Bond Rate of USD-LIBOR until September 1.2010 ***-reduces from $147,000 on July 1,2007

KDOT Series 2002 D Swap - In connection with the issuance of $86.9 million of variable-rate bonds to refund outstanding KDOT Series 1993A Bonds, on August 27,2002 the Department of Transportation competitively bid the sale of an option on a floating-to-fixed 67% of LIBOR interest rate swap. Merrill Lynch provided the winning bid with a swaption premium amount of $1 1.9 million to be paid to the Department in two installments of $6.5 million on March 1, 2006, and $5.4 million on March I, 2007. The swaption allowed the Department to effect a synthetic forward refunding ofthe Bonds to lock in savings based on then current market conditions. UnderU.S. tax law, the Bonds were not eligible for a traditional current refunding until December 1,2002. The terms of the option were structured to mirror the terms on the optional redemption feature on the Series 1993A Bonds. The swaption generated expected PV savings of $10.4 million (1 1.92 % ofthe Bonds' par amount). Merrill Lynch has since exercised the option resulting in a floating-to-fixed 67% of LIBOR interest rate swap, whereby the Department pays a fixed rate of 5.24%.

KDOTSeries 2002 B & C Swap - In connection with the issuance of $320 million of variable-rate KDOT Series 2002 B & C Bonds, on October 3,2002 the Department of Transportation competitively bid a floating-to-fixed 67% of LIBOR interest rate swap. Goldman Sachs was awarded $200 million of notional principal and Salomon Smith Barney was awarded $120 million of notional principal. The executed transaction consisted of a $320 million 17-year amortizing interest rate swap under which the Department pays Goldman/Salomon a fxed rate of 3.16% and receives 67% of LIBOR. The Department was able to take advantage of market conditions and effectively create fixed-rate debt at a rate lower that available in the cash market.

KDOT Series 2003C Swap - In connection with the issuance of $150.3 million of variable-rate KDOT Series 2003 C Bonds, on November 20,2003 the Department Transportation competitively bid a floating-to-fixed interest rate swap. The executed transaction consisted of a $150.3 million 12-year amortizing floating-to-fixed interest rate swap whereby the Department pays the counterparty a fxed rate of 3.36% and receives the lesser of the Actual Bond Rate and 71% of one month LIBOR until September 1,2010, and 7 1% of LIBOR thereafter. The Department was able to take advantage of market conditions and effectively create fxed-rate debt at a rate lower than available in the cash market.

KDOTSeries 2004 B and C Swaps - In connection with the issuance of $147 million of variable-rate Series 2004 B and C Bonds, on November 12, 2004 the Department of Transportation competitively bid a floating-to-fured interest rate swap. The executed transaction consisted of a $147 million 20-year amortizing floating-to-fixed interest rate swap whereby the Department pays the counterparty a fixed rate of 3.57% and receives 63.5% of LIBOR plus 29 basis points. The Department was able to take advantage of market conditions and effectively create fixed-rate debt at a rate lower than available in the cash market.

Since many tax-exempt and municipal issuers fund capital projects with long-term traditional or synthetic fixed-rate debt, but are constrained to investing short-term for liquidity reasons, in a normal or upwardly sloped yield curve they incur "negative cany" (cost of borrowing exceeds investment rate). The Department of Transportation determined that it could 85 State of ICansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds mitigate this imbalance through the execution ofthe two Constant Maturity Swaps (CMS). On June 15,2007, based on the results of a previously distributed competitively bid request for quotes for a swap provider, effective July 1,2007, the Department amended the floating index from 63.5% plus 29 basis points to 62.33% of the ten year LIBOR CMS rate on $75 million of the existing $147 million swap. On July 10,2007, a CMS became effective on the previously unhedged 2004 B Series bonds so the Department pays Bears Stearns 67% of one month LIBOR and receives 61.56% of the 10 year LIBOR CMS rate on $75,000.

Fair Value. These fair values take into consideration the prevailing interest rate environment, the specific terms and conditions of a given transaction and any upfront payments that may have been received. All fair values were estimated using the zero-coupon discounting method. This method calculates the future payments required by the swap, assuming that the current forward rates implied by the yield curve are the market's best estimate of future spot interest rates. These payments are then discounted using the spot rates implied by the current yield curve for a hypothetical zero-coupon rate bond due on the date of each future net settlement on the swaps.

Credit risk. As of June 30,2008, the Department of Transportation has credit risk exposure to Bears Steams Financial Products Inc. on the swap associated with the KDOT Series 2004 B Revenue Bonds. This is because the transaction has a positive fair value, meaning the Department is exposed to the counterparty in the amount of the derivative's fair value. However, should interest rates change and the fair value of the swap become negative, the Department would not be exposed to credit risk.

The Department has no credit risk exposure on the rest of the swap transactions because the swaps have negative fair values, meaning the counterparties are exposed to the Department in the amount of the derivatives' fair values. However, should interest rates change and the fair values of the swaps become positive, the Department would be exposed to credit risk.

The swap agreements contain varying collateral agreements with the counterparties. The swaps require collateralization of the fair value of the swap should the counterparty's credit rating fall below the applicable thresholds.

Basis risk. Basis risk is the risk that the interest rate paid by the Department of Transportation on the underlying variable rate bonds to bondholders differs from the variable swap rate received from the applicable counterparty. The Department bears basis risk on each of its swaps. The swaps have basis risk since the Department receives apercentage ofLIBORto offset the actual variable bond rate the Department pays on its bonds. The Department is exposed to basis risk should the floating rate that it receives on a swap be less than the actual variable rate the Department pays on the bonds. Depending on the magnitude and duration of any basis risk shortfall, the expected cost savings fi-om the swap may not be realized.

Termination risk. The Department of Transportation or the counterparty may terminate any of the swaps if the other party fails to perform under the terms of the respective contracts. If any of the swaps are terminated, the associated variable-rate bonds would no longer be hedged to a futed rate. If at the time of termination the swap has a negative fair value, the Department would be liable to the counterparty for a payment equal to the swap's fair value. State of Kansas Notes to the Financial Statements June 30,2008

111. Detailed Notes On All Funds

L. Revisions to Beginning Net Assets

Various adjustments were made to the beginning fund balances to correct errors in the prior year financial statements. The following table summarizes the changes to the fund balances as reported in the prior year financial statements (expressed in thousands):

Governmental Funds Business Type Component Units

June 30,2007 fund balance as previously reported Revisions Implementation of other post employment benefits Prior year Star bond correction Interfund loan balance corrections Regent component unit beginning balance adjustments KTEC June 30,2007 fund balance as restated

Beginning balances were adjusted in order to comply with GASB 45, Other Post Employment Obligations. This change caused the State to record a liability in Governmental, Business-type and Component Units. Details regard OPEB liability can be found in Note IV.

A correction of $6.2 million to the beginning liability amount of Star bonds was made. In addition, a correction to interfund loans was processed which reduced fund balance by $2.5 million. Together these two adjustments increased the governmental fund balance by $3.7 million.

The State University System increased fund balance by $3.5 million. The two items that comprised most of this change are Kansas State University Endowment Association which increased hdbalance by $4.6 million due to a change in real estate valuation and Kansas University Physicians which has changed management structure causing it to no longer be considered a component unit of the State. Kansas University Physicians fund balance was reduced in the amount of $2.9 million. The Component Units also decreased fund balance for $23,000 due to changes in KTEC beginning balance. State of Kansas Notes to the Financial Statements June 30,2008

IV. Other Information

A. Risk Management

The State maintains a combination of commercial insurance and self-insurance to cover the risk of losses to which it may be exposed. This is accomplished through risk management and various outside entity commercial insurance providers. It is the policy of the State to cover the risk of certain losses to which it may be exposed through risk management activities. In general, the State is self-insured for certain health care claims (prescription drug and dental plus three of seven medical health plan options), State employee workers' compensation, long-term disability, tort liability, personal property, and real estate property losses up to $500,000 (except where separate coverage is required by bond covenant). The State has commercial vehicle liability coverage on all vehicles, and a statewide commercial policy on real property valued at $500,000 or more (except where separate coverage is required by bond covenant). Insurance settlements have not exceeded insurance coverage for the past three fiscal years.

Coverage for health care claims for prescription drugs and dental claims plus three of seven medical health plan options and is provided by The Health and Dental Care Claims (Active Employees) Health and Hospitalization Fund for all active employees, and The Post Employment Health and Dental Care Claims Health and Hospitalization Fund for post-employment populations (retirees). Risk is managed by the performance of full experience studies twice a year. The liability for unpaid claims is the plan reimbursement for services rendered or prescriptions received where the payment to the provider, the member, or the claims administrator has not occurred. These liabilities are estimated by analyzing the prior payment patterns for the same coverage or medical option.

The State Self-insurance Fund (SSIF) is self-insured and self-administered for providing workers' compensation coverage to the State's employees. The agencies make contributions to the SSIF to cover projected losses and net expenses. The SSIF also maintains a partial reserve to reduce the likelihood of additional required contributions due to adverse loss experience. The liability represents results from an annual actuarial study for claims reported but unpaid plus an estimate for claims incurred but not reported.

The remaining risk management activities of the State are included in the State General Fund. The State has not encountered difficulty in resolving past losses by using resources available at the time the loss occurred.

The Tort Claims Fund (TCF) provides payment of compromises, settlements, and final judgments arising fiom claims against the State or an employee of the State under the Kansas Tort Claims Act, and costs of defending the State or an employee. When the balance in the TCF is insufficient to pay a claim, a transfer is made from the State General Fund to the TCF. The maximum claim liability allowed under The Kansas Tort Claims Act is $500,000 per occurrence or accident. At June 30,2008, there were no material claims incurred but unpaid.

The State's self-insurance program covers all personal property losses and real estate property losses up to $500,000,000 (except where separate coverage is required by bond covenant). Claims in excess of $500,000,000 are covered by commercial insurance under a statewide policy. The statewide policy has a limit of $100,000,000 per occurrence for most buildings except flood and earthquake, which are applied as annual aggregates separately to each peril, and a deductible of $5,000,000 per occurrence for most buildings. For the four buildings in the Capitol Complex, the limit is $200,000,000 per occurrence. The self-insurance program for personal and real estate property loss represents an estimate of amounts to be paid fiom currently expendable available financial resources.

Liabilities of the funds are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNRYs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of inflation, recent claim settlement trends (including frequency and amount of payments), and other economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims. State of Kansas Notes to the Financial Statements June 30,2008

IV. Other Information

The following table presents the changes in claims liability balances (both current and non-current) during the current fiscal year ended June 30,2008 (expressed in thousands):

Claims Plus: Current Claims Liability Year Claims Less: Liability Beginning and Changes Claim Ending Non-current Current Balance in Estimates Payments Balance Liability Liability Currentfiscal year State Self-insurance Fund $ 41,200 Health and Dental Care Claims 16,984 (Active Employees) Health and Hospitalization Fund* Post Employment Health and 3,409 Dental Care Claims Health and Hospitalization Fund** Total $ 61,593

Prior fiscal year State Self-insurance Fund $ 32,579 $ 27,279 $ (18,658) $ 41,200 $ 27,435 $ 13,765 Health and Dental Care Claims 26,257 130,657 (139,930) 16,984 143 16,841 (Active Employees) Health and Hospitalization Fund* Post Employment Health and 9,197 42,55 1 (48,339) 3,409 22 3,387 Dental Care Claims Health and Hospitalization Fund** Total $ 68,033 $ 200,487 $ (206,927) $ 61,593 $ 27,600 $ 33,993

* Claim payments reflect all participants (active and post-employment). Claims liability ending balance reflects the active employee participant component and based on Mercer IBNR modeling estimates using Medstat claims data through June 30,2008. ** Claim payments reflect all participants (active and post-employment). Claims liability ending balance reflects the post-employment participant component and based on Mercer IBNR modeling estimates using Medstat claims data through June 30,2008.

B. Contingencies and Commitments

Litigation

The State is a defendant in numerous legal proceedings pertaining to matters incidental to the performance of routine governmental operations. Such litigation includes, but is not limited to, claims asserted against the State arising from alleged torts, alleged breaches of contracts, condemnation proceedings and other alleged violations of State and Federal laws. Known claims, asserted and unasserted, have been evaluated for the likelihood of an unfavorable outcome and estimates have been made regarding the amount or range of potential loss in the event of an unfavorable outcome. After review, it is the State's opinion that its ultimate liability in these cases, if any, is not expected to have a material adverse affect on the financial position of the State, except for potential litigation involving the Kansas Department of Social and Rehabilitation Services (SRS) versus the Centers for Medicare and Medicaid Services (CMS). CMS deferred $55.9 million of child welfare Medicaid claims for the period April 1, 2004 to June 30, 2007 (13 quarters). The state has appealed each deferral and is close to reaching a partial settlement with CMS for a portion of the deferral amount.

The Kansas Department of Revenue has potential liabilities of $1.3 million in for corporate income tax credits including accrued interest, $16.9 million of sales tax refunds and $1 million in tax assessments. State of Kansas Notes to the Financial Statements June 30,2008

IV. Other Information

Federal Filtancial Assista?zce

The State receives significant financial assistance from the Federal government in the form of grants and entitlements, including several non-cash programs. The receipt of grants is generally dependent upon compliance with terms and conditions of the grant agreements and applicable Federal regulations. Grants are subject to the Federal Single Audit Act or to financial and compliance audits by grantor agencies. Disallowances by Federal officials as a result of these audits may become liabilities of the State. Other than what has stated above, the State does not expect additional liabilities for disallowed costs from grantor.

C. Other Post-Employment Benefits

Description. Kansas statute provides that postemployment healthcare benefits be extended to retired employees who have met age andlor service eligibility requirements. The health insurance benefit generally provides the same coverage for retirees and their dependants as for active employees and their dependents. The health insurance benefit plan is a single employer defined benefit plan administered by Kansas Health Policy Authority. The benefit is available for selection at retirement and is extended to retirees and their dependents for life. Non-Medicare participants are subsidized by the State, thus resulting in a liability to the State. The accounting for the health insurance for retirees is included in the State's Self-Insurance Health hd,with the subsidy provided from the Self- Insurance Health fund.

Funding Policy. The State provides health insurance benefits to retirees and their dependents in accordance with Kansas law (K.S.A. 75-6511). Kansas statute, which may be amended by the state legislature, established that participating retirees contribute to the employee group health fund benefits plan, including administrative costs.

The State appropriates funds annually for the costs associated with this retirement benefit and provides funding for the expenditure on a pay-as-you-go basis through the Self Insurance Fund. In fiscal year 2008, non-Medicare retired plan members receiving benefits contributed $14,541,101 to the plan and the State contributed $5,104,755 to the plan.

Annual OPEB Cost and Net OPEB Obligation. The State's annual OPEB (Other Post Employment Benefits) cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a -period of not to exceed thirty years. The following table presents the components of the State's annual OPEB cost for the year, the contributed to the plan, and changes in the State's net OPEB obligation (expressed in thousands): State of Kansas Notes to the Financial Statements June 30,2008

IV. Other Information

Primary Component Pension Government Units Trust Total Annual required contribution- $ 11,261 $ 4,746 $ 32 $ 16,039 amortized liability Interest on amortized liability 10,313 6,846 36 17,195

Normal cost (with interest) 434 183 1 618 Annual OPEB cost (expense) 22,008 1 1,775 69 33,852

Contributions made (5,105) 0 0 (5,1051 Increase in net OPEB obligation 16,903 11,775 69 28,747

Net OPEB obligation July 1,2007 0 0 0 0 Net OPEB obligation June 30,2008 $ 16,903 $ 11,775 $ 69 $ 28,747

Schedule of Employer Contributions (for fiscal year ended) (expressed in thousands)

Annual Net End of Year Fiscal OPEB Employer Percentage Net OPEB Year Cost Contributions Contributed Obligation

Funded Status and Funding Progress. As of June 30, 2008, the most recent actuarial valuation date, the actuarial accrued liability for benefits was $316.6 million. The State's policy is to fund the benefits on a pay as you go basis, resulting in an unfunded actuarial accrued liability (UAAL) of $316.6 million. The covered payroll (annual payroll of active employees covered by the plan) was $1.97 million, and the ratio of the UAAL to the covered payroll was 16.08 %.

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts &d assumptions about the probability of occurrence of events far into the future. The valuation includes, for example, assumptions about future employment, mortality and the healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of employer are subject to continual revision as actual results are compared with the past expectations and new estimates are made about the future. The schedule of funding progress will present in time, multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing relative to the actuarial accrued liabilities for benefits. State of Kansas Notes to the Financial Statements June 30,2008

IV. Other Information

Schedule of Funding Progress (expressed in thousands)

Actuarial UAAL as a Actuarial Accrued Percent of Actuarial Value of Liability Unfunded Funded Covered Covered Valuation Assets (AAL) AAL Ratio Payroll Payroll Date (a) (b) (b-a) (a/b) ( c) ((b-a)/c)

Actuarial Methods and Assunzptiom. Projections of benefits for reporting purposes are based on the substantive plan and include the types of benefits provided at the time of valuation and the historical pattern of sharing of benefit cost between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and actuarial value of assets, consistent with the long-term perspective of the calculations.

In the June 30, 2008 actuarial valuation, the projected unit credit method was applied. The actuarial assumptions included a 3.85 percent investment rate of return, which is a blended rate of the expected long-term investment returns on the State's pooled funds and investments. The valuation assumed annual healthcare cost trend rates of 5.5 to 10 percent in the first ten years and an ultimate rate of 5.0 percent after ten years. The valuation followed generally accepted actuarial methods and included tests as considered necessary to assure the accuracy of the results. The UAAL is being amortized over a 30 year open period in level dollar amounts.

Primary Government

In addition to the pension benefits described in the Employee Retirement Systems and Pension Plans note, the State provided post-employment health care benefits to retirees who elect the Kansas medical option. This subsidy was ended for post-employment retirees as of December 3 1, 2006. Retirees that elected the health insurance that state provides now paid 100% of the premium. The monthly ainount of premium cost individual ranges from $408.67 to $475.68 for early retirees. Early retirees are defined as those retirees not yet Medicare eligible. The employer contribution, according to GASB Statement #45, is the aggregate amount of the subsidies, which is calculated,into the employer contribution for active employees.

1 Eligible State Eligible State Retiree Retiree and Family Enabling I Participants Participants Legislation 1 Kansas Major Medical Post-Employment Benefits 1,865 2,26 1 1C.S.A. 75-6504 The State funds post-employment health care benefits on a pay-as-you-go basis as part of the overall retirement benefit ending on June 30, 2008. No separation of pension obligation and health insurance obligation is made and State of Kansas Notes to the Financial Statements June 30,2008

IV. Other Information

D. Employee Retirement Systems and Pension plans

Kansas Public Employees Retirertze~ztSystem - Plan Descriptions

The Kansas Public Employees Retirement System (the System) is an umbrella organization administering the following three statewide retirement systems under one plan as provided by K.S.A. 74 Article 49: Kansas Public Employees Retirement System (KPERS), Kansas Police and Firemen's Retirement System (KP&F) and Kansas Retirement System for Judges (Judges). All three systems are part of a tax-exempt, defined benefit, contributory plan covering substantially all public employees in Kansas. The Kansas Retirement System for Judges is a single employer group, while the other two are multi-employer cost-sharing groups. Participation by the State is mandatory, whereas participation by local political subdivisions is an option, but irrevocable once elected. The State Elected Officials Special Members Retirement System is also administered by the System. This system is closed to new members and only a small group is participating.

The System publishes its own fmancial report, which is available by contacting IQERS at 61 1 S. Kansas Avenue, Suite 100, Topeka, Kansas 66603 or telephone 1-888-275-5737.

The System provides retirement, death and disability benefits to State employees, public school employees and employees of counties, municipalities, and certain other State political subdivisions. Although public schools are outside the State reporting entity, the State provides the required employers' contribution for public school employees' retirement benefits.

The System's total covered salaries and wages paid were approximately $5.9 billion. The State's total salaries and wages paid were approximately $3 billion of which approximately $954.5 million or approximately 28.5 % relates to employees participating in the System. The remaining approximately 71.5 % represents salaries and wages paid to employees, such as educational institution employees not participating in the System, employees who have not met the required tenure of employment for participation or those employees who are classified as other than "permanent" and are not eligible for participation. Information on participating employees and retirement system membership at June 30,2008, unless otherwise noted is as follows:

Participating Emplovers Membership

KPERS KP&F Judges 1 Total 1,483

MEMBERSHIP BY RETIREMENT SYSTEMS

Judges Total Retirees and beneficiaries currently receiving benefits Terminated employees entitled to benefits but not yet receiving them Inactive members, deferred disabled Inactive members not entitled to benefits Current employees Total State of Kansas Notes to the Financial Statements June 30,2008

1 IV. Other Information I Otlter Retirerne~ztPlmts Faculty and other eligible unclassified employees of the Board of Regents (Regents) Office or state universities must participate in the Regents' mandatory retirement plan. Authorized by statute, this 403(b) defined contribution plan is funded through contributions by the employees and the employer (the Board Office or the state university). Employees are required to serve a one year waiting period before becoming eligible to participate in the plan, but participation can begin earlier if certain waiver provisions are met. The contributions and earnings are fully vested with the f~stcontribution.

Employees participating in the Regents' mandatory retirement plan are required to contribute 5.5 % of their salary, up to the maximum dollar amount permitted by the Internal Revenue Code. During fiscal year 2008, employees contributed approximately $37 million. During fiscal year 2008, the 8.5 % employer contribution totaled $58.2 million, representing covered wages of approximately $693.7 million. These employees, along with employees who participate in the KPERS retirement program, may also elect to participate, up to the maximum dollar amount permitted by the Internal Revenue Code, in the Regents' voluntary retirement plan, which allows the member to purchase a 403(b) contract to supplement the mandatory retirement plan. These employees, along with employees who participate in the KPERS retirement program, may also elect to participate, up to the maximum dollar amount permitted by the Internal Revenue Code in the State's 457 deferred compensation program, to supplement to the mandatory retirement plan.

The retirement plan for the School for the Blind and the School for the Deaf are also covered by KPERS in the 401(a) defined benefit plan. The KPERS employee rate is 4% and 7.37% employer rate (6.37% employer and 1% death & disability).

I E. Subsequent Events

Bonds and Notes

Short-term Debt

Certzjkate of Indebtedness - On July 1,2008 the Pooled Money Investment Board (PMIB) issued a $300 million Certificate of Indebtedness per K.S.A. 75- 3725a, subject to redemption not later than June 30, 2009. See Section In-I, Short-term Obligations, for additional information on issuance of a Certificate of Indebtedness.

Certijicate of Indebtedness - On December 17,2008 the Pooled Money Investment Board (PMIB) issued a $250 million Certificate of Indebtedness per K.S.A. 75- 3725a, subject to redemption not later than June 30, 2009. See Section 111-1, Short-term Obligations, for additional information on issuance of a Certificate of Indebtedness.

Accrued Receivables for Ad Valorem Taxes - In July 2008, receivables were posted to the State Treasurer's receivables in the amount of $28.6 million for the Kansas Educational Building Fund and $14.3 million for the State Institutions Building Fund per K.S.A. 76-6b11. See Section 111-1, Short-term Obligations, for additional information.

Accrued Receivables for Children's Initiatives Fund- In July 2008, receivables were posted to the State Treasurer's receivables for the Children's Initiatives Fund in the amount of $32.6 million per Senate Bill No. 534, Section 85(f), Session of 2008. See Section 111-1, Short-term Obligations, for additional information.

Accrued Receivables for Economic Development Initiatives Fund - In July 2008, receivables were posted to the State Treasurer's receivables for the Economic Development Initiatives Fund in the amount of $21.2 million per Senate Bill No. 534, Section 85(g), Session of 2008. State of Kansas Notes to the Financial Statements June 30,2008

IV. Other Information

Accrued Receivables for Correctional Institutions' Building Fund - In July 2008, receivables were posted to the State Treasurer's receivables for the Correctional Institutions' Building Fund in the amount of $4.0 million per Senate Bill No. 534, Section 850,Session of 2008.

Accrued Receivables for Kansas Endowment for Yozlth Fund - In July 2008, receivables were posted to the State Treasurer's receivables for the Kansas Endowment for Youth Fund in the amount of $207.6 thousand per Senate Bill No. 534, Section 85(i), Session of 2008.

Accrued Receivables for 27'" Payroll - In July 2008, receivables were posted to the State Treasurer's receivables for the 27&Payroll in the amount of $16.1 million per Senate Bill No, 534, Section 85(p), Session of 2008.

Loans - Senate Bill No. 534, Section 89, and Senate Substitute for House Bill No. 2946, Section 20, Session of 2008 allows the Kansas Racing and Gaming Commission to borrow from the Pooled Money Investment Board during fiscal year 2009 for operating expenses for expanded lottery operations. In addition, the borrowing limitation over fiscal years 2008 and 2009 increased fkom $3 million to $5 million. In October 2008, $500,000 was borrowed at an interest rate of 5.9%. In December 2008, $100,000 was borrowed at an interest rate of 6.1%. The loans are due June 30,2009.

Bond Anticipation Note - In December 2008, the KDFA issued Bond Anticipation Note Series 2008-3 for $1.5 million to Pittsburg State University for the Student Health Center project. The note is due December 1,2009 and has an interest rate of 2.8%.

Bond Anticipation Note - In December 2008, the KDFA issued Bond Anticipation Note Series 2008-4 for $5.0 million to Kansas University for housing system project. The note is due December 1,2009 and has an interest rate of 2.0%.

Long-term Debt

Revenue Bonds - In July 2008, the KDFA issued Series 2008C for Kansas Athletics Incorporated, a component unit of the State, for improvements to athletic facilities and administrative offices. The bonds totaled $32.8 million with interest rates ranging fkom 3.0 to 5.0%. The bonds final maturity is June 1,2033.

Revenue Bonds - In September 2008, the Department of Transportation converted Highway Revenue Bonds, Series 2004 B bonds from variable rate to fmed rate bonds. Interest rates range from 4.3 to 5.0%. The bonds final maturity remains September 1,2024.

Revenue Bonds - In October 2008, the KDFA issued Series 2008L for various State projects including continued renovation of the State Capitol, payment of Bond Anticipation Note Series 2008-1 and 2, renovations and repairs to Army National Guard armories, Department of Correction prison expansion, and Kansas University School of Pharmacy projects. The bonds totaled $64.3 million with interest rates ranging fkom 2 to 5.3%. The bonds final maturity is on November 1,2028.

Revenue Bonds - In October 2008, the KDFA issued the Kansas Public Water Supply Revolving Loan Fund Revenue Bonds Series 2008 DW for the Department of Health and Environment. The bonds totaled $36.7 million with interest rates ranging from 2.3 to 6.0%. The bonds final maturity is on April 1,2029.

Revenue Bonds - In October 2008, the KDFA issued the Kansas Department of Transportation Cornmimication System Lease Program Series 2008G bonds for the Department of Transportation. The bonds totaled $14.2 million with interest rates ranging from 4.6 to 5.1%. The bonds final maturity is on April 1,2023. State of .Kansas Notes to the Financial Statements June 30,2008

IV. Other Information

Revenue Bonds - In December 2008, the KDFA issued the Kansas Water Pollution Control Revolving Fund Revenue Bonds Series 2008 CW for the Department of Health and Environment. The bonds totaled $66.5 million with interest rates ranging from 3.0 to 5.1%. The bonds final maturity is on November 1,2029.

Economy

The slowing of the national and State economies that began in 2007 has taken a significant turn for the worse this fall. Recent measures of consumer spending and confidence indicate that the economy is sliding deeper into a major downturn, the depth and severity of which remains unclear as of early November. The accelerating financial crisis engulfing the housing, credit, and stock markets makes the level of uncertainty regarding the November Consensus estimate much higher than normal. Although forecasts of virtually all major income-related economic variables for the nation and the State have been lowered since April, the possibility remains that the relative health of certain key sectors of the State's economy, including aviation manufacturing and energy, could enable Kansas to experience a milder contraction than the country as a whole.

Risk and Uncertainties

The State invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Subsequent to year-end, the credit and liquidity crisis in the United States and throughout the global fmancial system has resulted in substantial volatility in financial markets and the banking system. These and other economic events have had a significant adverse impact on investment portfolios. As a result the State's investments have likely incurred a significant decline in fair value since June 30,2008. REQUIRED SUPPLEMENTARY INFORM-ATION State of Kansas Required Supplementary Information June 30,2008

Budgetary information

Annual budgets are adopted on a cash basis with encumbrance modifications for all governmental funds. Appropriations may be re-appropriated if the balance is greater than $100, or lapsed at fiscal year end.

On or before October 1, agencies are required to submit annual or biennial budget estimates for the next fiscal year to the Division of Budget. These estimates are used in preparing the Governor's budget report. On or before the eighth calendar day of each regular legislative session, the Governor is required to submit the budget report to the Legislature. However, in the case of the regular legislative session immediately following the election of a governor who was elected to the Office of Governor for the first time, that governor must submit the budget report to the legislature on or before the 2 1" calendar day of that regular session.

The State maintains budgetary restrictions and controls, imposed through annual appropriations and limitations, approved by the Legislature. Agency, fund, and budget unit usually establish the level of budgetary control in the central accounting system. Budgetary control is maintained by mechanisms in the accounting system that prevent expenditures and fm encumbrances in excess of appropriations or limitations andlor available cash. Encumbrances are reported as expenditures for budgetary purposes and as reserved fund balances in the governmental financial statements in this report. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the budget unit level. The supplemental budgetary appropriations made in the General Fund were not material. Due to the volume of data, the detailed budget information at the budget unit level is not presented here. State of Kansas Required Supplementary Information June 30,2008

State of Kansas Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund For the Fiscal Year Ended June 30,2008 (expressed in tlzousands) Actual Variance with Amounts Final Budget - Budgeted Amounts Budgetaly Positive Original Final Basis (Negative)

Revenues and other financing sources: Property tax Income and inheritance tax State sales tax Consumer's and retailer's compensating use tax Tobacco and liquor taxes Severance taxes Insurance premiums taxes Other taxes Investment earnings Transfers Charges for services, other revenues and financing sources Total revenues and other financing sources

Expenditures and other financing uses: Current: General government Human resources Education Public safety Agriculture and natural resources Health and environment Total expenditures and other financing uses

Excess of revenues and other financing sources over (under) expenditures and other financing uses

Fund balances, beginning of year Fund balances, end of year State of Kansas Required Supplementary Information June 30,2008

State of Kansas Reconciliation of the Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual with the Statement of Revenues, Expenditures, and Changes in Fund Balances- Governmental Funds for the State General Fund For the Fiscal Year Ended June 30,2008 (expressed in thousands) State General Fund

Excess of revenues and other financing sources over (under) expenditures and other financing uses - budgetary basis $ (406,767)

Current year encumbrances are reported as expenditures for budgetary reporting purposes

Expenditures on prior year encumbrances are not reported for budgetary reporting purposes

Budgetary expenditures and transfers to other state hdshave been adjusted to GAAP basis

Budgetary basis revenues and transfers from other state hds have been adjusted to GAAP basis 496,970

Changes in Fund Balance as reported on the Statement of Revenue, Expenditures, and Changes in Fund Balance State of Kansas Required Supplementary Information June 30,2008

Kansas Department of Transportation Schedule of Revenues, Expenditures and Other Financing Sources (Uses) State Highway Fund (Agency's general fund) Budget and Actual -- Budgetary Basis For the Year Ended June 30,2008 (expressed in thousands)

Variance with Actual & Final Budget Budgeted Amounts Encum- Positive Original Final brances (Negative) Revenues: Motor fuel taxes Vehicle registrations and permits Intergovernmental . Sales and use taxes Investment earnings Other Transfers from other state funds Total revenues

Expenditures, with legal limits: Current operating: Maintenance Construction Local support Management Capital improvements Transfers to other state funds Expenditures with legal limits

Expenditures, without legal limits: Current operating: Maintenance Local support Management Capital improvements Transfers to other state funds Expenditures without legal limits Total expenditures

Excess (deficiency) of revenues over expenditures

Other financing sources (uses): Transfers-out Total other financing sources (uses)

Excess (deficiency) of revenues and other sources over expenditures and other uses State of Kansas Required Supplementary Information June 30,2008

Kansas Department of Transportation Reconciliation of Schedule of Revenues, Expenditures and Other Financing Sources (Uses) State Highway Fund (Agency's general fund) Budget and Actual -- Budgetary Basis to Statement of Revenues, Expenditures, and Changes in Fund Balances State Highway Fund (Agency's general fund) For the Year Ended June 30,2008 (expressed in thousands)

Excess (deficiency) of revenues and other sources over expenditures and other uses - budgetary basis $ 231,978

Budgetary basis revenues and trhsfers from other state funds have been adjusted to GAAP basis (10,783)

Current year encumbrances are reported as expenditures for budgetary reporting purposes

Expenditures on prior year encumbrances are not reported for budgetary reporting

Budgetary expenditures and transfers to other state funds have been adjusted to GAAP basis 5,747

Net Change in Fund Balance as reported on the Statement of Revenues, Expenditures and Changes in Fund Balances $ 19,563 State of Kansas Required Supplementary Information June 30,2008

State of Kansas Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual Health Policy Autlzority For the Fiscal Year Ended June 30,2008 (expressed in tlto~rsands) Actual Variance with Amounts Final Budget - Budgeted Amounts Budgetary Positive Original Final Basis (Negative)

Revenues and Other Financing Sources: Operating grants $ 1,461,829 $ 1,483,829 $ 1,476,181 $ (7,648) Investment earnings 1,445 1,445 462 (983) Transfers 475 (73 1,902) (728,189) 3,713 Charges for services, other revenues & financing sources 506,557 506,557 158,881 (347,676) Total revenues and other financing sources 1,970,306 1,259,929 907,335 (352,594)

Expenditures and Other Financing Uses: Current: Human resources 1,412,972 1,359,471 1,397,972 (38,501) Total expenditures and other financing uses 1,412,972 1,359,471 1,397,972 (38,501)

Excess of revenues and other financing sources over (under) expenditures and other financing uses $ 557,334 $ (99,542) $ (490,637) $ (391,095) State of Kansas Required Supplementary Information June 30,2008

State of Kansas Reconciliation of the Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual with the Statement of Revenues, Expenditures, and Changes in Fund Balances- Governmental Funds Health Policy Authority For the Fiscal Year Ended June 30,2008 fexwressed in thousands)

Health Policy Authority

Excess of revenues and other financing sources over (under) expenditures and other fianancing uses - budgetary basis

Current year encumbrances are reported as expenditures for budgetqry reporting purposes

Expenditures on prior year encumbrances are not reported for budgetary reporting purposes

Budgetary expenditures and transfers to other state hnds have been adjusted to GAAP basis

Budgetary basis revenues and transfers from other state funds have been adjusted to GAAP basis

Changes in Fund Balance as reported on the Statement of Revenue, Expenditures, and Changes in Fund Balance State of Kansas Required Supplementary Information June 30,2008

Support of Modified Approach for Kansas Department of Transportation Infrastructure Reporting

Roadways

The highways in the State are made up of two systems: interstate highways and non-interstate highways. The condition of these systems is assessed annually using a pavement management system that measures the condition of the pavement surface to classify the roads into the following three performance levels:

PL-1 Roadway surface is in good condition and needs only routine or light preventative maintenance. PL-2 Roadway surface needs at least routine maintenance. PL-3 Roadway surface is in poor condition and needs significant work.

While the Department has goals to maintain these systems at higher levels, minimum acceptable condition levels have been defined as having at least 80 percent of the interstate miles in PL-1 and at least 75 percent of the non- interstate miles in PL-1. The following table compares the minimum acceptable condition level with the actual condition for the current and prior year.

Interstate Miles Non-interstate Miles Minimum Minimum Acceptable Actual Acceptable Actual Condition Condition Condition Condition Fiscal Year Level* Level* Level* Level* 2006 80% 94% 75% 86% 2007 80% 97% 75% 90% 2008 80% 96% 75% 85% "Percent of miles in PL-1

The Department's goal is to continually improve the condition of the State highway system. To achieve this goal it is necessary to perform maintenance activities and replace those assets that can no longer be economically maintained. To maintain the interstate highways at or above the stated minimum condition level it is estimated that annual preservation and replacement expenditures must exceed $110 million annually. To maintain the non- interstate highways at or above the stated minimum condition level it is estimated that annual preservation and replacement expenditures must exceed $260 million. The following table compares the estimated expenditures needed to maintain the system at a minimum acceptable condition level with actual amounts spent for the current and prior year (expressed in thousands).

Interstate Highways Non-interstate Highways Minimum Minimum Acceptable Acceptable Fiscal Condition Actual Condition Actual Year Level Expenses Level Expenses 2004 $ 110,000 $ 155,711 $ 260,000 $. 348,849 2005 110,000 144,603 260,000 348,629 2006 110,000 115,820 260,000 380,988 2007 110,000 62,935 260,000 384,627 2008 110,000 68,654 260,000 363,582

KDOT is in the process of reviewing and updating the methodology used in estimating required hding and related asset allocation to appropriately maintain its infrastructure assets. State of Kansas Required Supplementary Information

Bridges

The condition of the bridge system in the state is assessed annually using the Pontis Bridge Management System. This system evaluates the condition of several elements (decks, girders, floor beams, columns etc) within each bridge using a rating scale of 1 to 5. These element ratings are weighted and aggregated to establish a health index of 0 to 100 for each bridge which, in turn, are aggregated to establish a health index for the entire system.

The goal of the Department is to maintain the bridge system at a higher level, but has defined an overall statewide health index of 80 as the minimum acceptable condition level. This table compares the minimum acceptable health index with the actual health index for the current and prior year.

Minimum Acceptable Actual Fiscal Year Health Index Health Index 2004 80 92

The Department's goal is to continually improve the condition of the State's bridge system. To achieve this goal it is necessary to perform maintenance activities and to replace those bridges that can no longer be economically maintained. To maintain the State's bridges at or above the stated minimum acceptable health index it is estimated that annual preservation and replacement expenditures must be approximately $75 million. The following table compares the estimated annual expenditures needed to maintain the bridges system with the actual expenditures for the current and prior year (expressed in thousands).

Minimum Fiscal Acceptable Actual Year Health Index Expenses 2004 $ 75,000 $ 117,671 2005 75,000 106,593 2006 75,000 90,908 2007 75,000 76,536 2008 75,000 72,941

KDOT is in the process of reviewing and updating the methodology used in estimating required funding and related asset allocation to appropriately maintain its infrastructure assets. OTHER SUPPLEMENTARY INFORMATION State of Kansas Other Supplementary Information June 30,2008

Listing of Non-Maior Governmental Funds

Special Revenue Funds

Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes:

State Regulatory Boards and Commissions Correctional Facilities Tobacco Settlement for Children's Initiatives Social and Rehabilitation Adjutant General Aging Agriculture Attorney General Administration Health and Environment Highway Patrol Historical Society Labor Commerce Insurance Judicial State Library Revenue Education Secretary of State State Treasurer Wildlife and Parks Executive Legislative Transportation- special revenue State Water Plan Peace Officer Training Capital Projects Funds

Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds:

State Buildings (Appropriated) Capitol Complex Buildings Master Lease Program Corrections State Library Pooled Funds Armories Public Broadcasting Digital Vital Statistics Project Highway Patrol Labor Social and Rehabilitation Services

State of Kansas Other Supplementary Information June 30,2008

State of Kansas Combining Balance Sheet - Governmental Funds June 30,2008 (expressed in tl~ousnnds) Special Revenue Funds State Tobacco Social Regulatory Settlement for and Boards and Correctional Children's Rehabili- Adjutant Commissions Facilities Initative tation General Aging ASSETS

Cash and cash equivalents $ 53,699 $ 10,867 $ 29,951 $50,037 $ 14,623 $ 4,877 Investments 0 0 0 0 0 0 Receivables, net 0 62 1 0 49,231 0 24,635 Due fkom other funds 0 0 0 0 0 0 Advances to other funds 0 0 0 0 0 0 Restricted cash and cash equivalents 20 3,3 19 0 0 0 0

Total assets

LIABILITIES AND FUND BALANCES

Liabilities: Accounts payable and other liabilities $ 7,129 $ 3,169 $ 3,741 $65,860 $ 8,294 $ 26,907 Due to other funds 0 17 0 188 0 0 Deferred revenue 0 0 0 35 0 0 Advances from other fbds 0 69 0 1,972 0 0 Total liabilities 7,129 3,255 3,741 68,055 8,294 26,907

Fund balances: Reserved for debt service Reserved for encumbrances Reserved for advances to other funds Unreserved Total fund balance

Total liabilities and fund balance $ 53,719 $ 14,807 $ 29,951 $99,268 $14,623 $ 29,512 State ofKansas Other Supplementary Information June 30,2008

State of Kansas Combining Balance Sheet - Governmental Funds - Continued June 30,2008 (expressed in tlrousnnds) Special Revenue Funds

Attorney Health and Highway Agriculture General Administration Environment Patrol ASSETS

Cash and cash equivalents $ 5,577 $ 16,801 $ 20,121 $ 56,699 $ 14,860 Investments 0 0 0 0 0 Receivables, net 0 0 0 21 1 0 Due from other funds 0 0 0 0 0 Advances to other funds 0 0 0 5,500 0 Restricted cash and cash equivalents 0 0 13 0 0

Total assets

LIABILITIES AND FUND BALANCES

Liabilities: Accounts payable and other liabilities $ 695 $ 2,239 $ (444) $ 12,243 $ 3,323 Due to other funds 0 0 0 190 1,061 Deferred revenue 0 0 0 22 0 Advances fiom other funds 0 0 0 573 1,594 Total liabilities 695 2,239 (444) 13,028 5,978

Fund balances: Reserved for debt service 0 0 13 0 0 Reserved for encumbrances 0. 0. 0 0 0 Reserved for advances to other funds 0 0 0 5,500 0 Unreserved Total fund balance

Total liabilities and fund balance $ 5,577 $16,801 $ 20,134 $ 62,410 $ 14,860 State of Kansas Other Supplementary Information June 30,2008

State of Kansas Combining Balance Sheet - Governmental Funds - Continued June 30,2008 (expressed in tl~ousands) Special Revenue Funds

Historical Society Labor Commerce Insurance Judicial ASSETS

Cash and cash equivalents $ 4,870 $ 6,739 $ 61,413 $23,661 $10,904 Investments 0 0 29,482 0 0 Receivables, net 0 0 12,335 0 0 Due from other funds 0 0 0 0 0 Advances to other funds 0 0 0 0 0 Restricted cash and cash equivalents 0 0 0 0 0

Total assets $ 4,870 $ 6,739 $ 103,230 $ 23,661 $ 10,904

LIABILITIES AND FUND BALANCES

Liabilities: Accounts payable and other liabilities $ 199 $ 3,295 $ 5,594 $ 9,173 $ 926 Due to other funds 0 100 0 83 0 Deferred revenue 0 0 0 0 0 Advances from other funds Total liabilities

Fund balances: Reserved for debt service 0 0 0 0 0 Reserved for encumbrances 0 0 0 0 0 Reserved for advances to other funds 0 0 0 0 0 Unreserved Total fund balance

Total liabilities and fund balance $ 4,870 $ 6,739 $ 103,230 $ 23,661 $ 10,904 State of Kansas Other Supplementary Information June 30,2008

State of Kansas Combining Balance Sheet - Governmental Funds - Continued June 30,2008 (expressed in tltousands) S~ecialRevenue Funds

State Secretary Library Revenue Education of State State Treasurer ASSETS

Cash and cash equivalents $ 136 $11,903 $129,048 $16,730 $ 2,565 Investments 0 0 0 0 0 Receivables, net 0 19 0 0 0 Due from other funds 0 0 0 0 13,000 Advances to other funds 0 0 0 0 52,206 Restricted cash and cash equivalents 0 0 0 0 0

Total assets

LIABILITIES AND FTJND BALANCES

Liabilities: Accounts payable and other liabilities $ 73 $ 2,616 $ 2,638 $ 521 $ 65,893 Due to other funds 0 0 0 0 0 Deferred revenue 0 0 0 0 0 Advances from other funds 0 0 0 0 0 Total liabilities 73 2,6 16 2,638 52 1 65,893

Fund balances: Reserved for debt service 0 0 0 0 (2). . Reserved for encumbrances 0 0 0 0 0 Reserved for advances to other funds 0 0 0 0 52,206 Unreserved Total fund balance

Total liabilities and fund balance $ 136 $11,922 $ 129,048 $ 16,730 $ 67,771 State of Kansas Other Supplementary Information June 30.2008

State of Kansas new in fy08 Combining Balance Sheet - Governmental Funds - Continued June 30,2008 (eqressed in tlror~snnrls) Special Revenue Funds

Peace Wildlife Transportation- State Water Officer and Parks Executive Legislative special revenue Plan Training ASSETS

Cash and cash equivalents $29,472 $ 2,920 $ 185 $ 22,366 $ 19,294 $ 858 Investments 0 0 0 0 0 0 Receivables, net 0 0 0 7,747 2,886 0 Due from other funds 0 0 0 0 3,074 0 Advances to other funds 0 0 0 0 0 0 Restricted cash and cash equivalents 0 0 0 0 0 0

Total assets $29,472 $ 2,920 $ 185 $ 30,113 $ 25,254 $ 858

LIABILITIES AND FUND BALANCES

Liabilities: Accounts payable and other liabilities $ 5,032 $ 492 $ 0 $ 1,291 $ 1,911 $ 76 Due to other funds 0 0 0 0 0 0 Deferred revenue 0 0 0 0 1,503 0 Advances from other funds 0 0 0 0 0 0 Total liabilities 5,032 492 0 1,291 3,414 76

Fund balances: Reserved for debt service 0 0 0 0 0 0 Reserved for encumbrances 0 0 0 10,761 0 0 Reserved for advances to other funds 0 0 0 0 0 0 Unreserved Total hdbalance

Total liabilities and fund balance $29,472 $ 2,920 $ 185 $ 30,113 $ 25,254 $ 858 State of Kansas Other Supplementary Information June 30.2008

State of Kansas Combining Balance Sheet - Governmental Funds - Continued June 30,2008 (expressed in tlzousands) Capital Projects Funds

Capitol State Buildings Complex Master Lease State (Appropriated) Buildings Program Corrections Library ASSETS

Cash and cash equivalents $ 44,332 $ 6 $ 4,577 $ 0 $ 73 Investments 0 8,967 0 8,012 0 Receivables, net 0 144 41,826 122 0 Due from other hnds 0 0 5,650 0 0 Advances to other hnds 0 0 20,824 0 0 Restricted cash and cash equivalents 0 2,423 0 5,350 0

Total assets

LIABILITIES AND FUND BALANCES

Liabilities: Accounts payable and other liabilities $ 3,008 $ 3,476 $ 597 $ 1,819 $ 2 Due to other funds 0 0 0 0 -0 Deferred revenue 0 0 0 0 0 Advances from other funds Total liabilities

Fund balances: Reserved for debt service Reserved for encumbrances Reserved for advances to other funds Unreserved 41,323 5,762 51,456 6,438 71 Total fund balance 41,324 8,064 72,280 11,665 71

Total liabilities and fund balance $ 44,332 $ 11,540 $ 72,877 $ 13,484 $ 73 State of Kansas Other Supplementary Information June 30.2008

State of Kansas Combining Balance Sheet - Governmental Funds - Continued June 30,2008 (expressed in tltousnith) Capital Projects Funds

Public Vital Social and Broadcasting Statistics Highway Rehabilitation Armories Digital Project Patrol Labor Services ASSETS

Cash and cash equivalents $ 270 $ O$ O$ 1$723$ 0 Investments 0 0 0 0 0 0 Receivables, net 0 0 0 0 0 0 Due from other funds 0 0 0 0 0 0 Advances to other funds 0 0 0 0 0 0 Restricted cash and cash equivalents 5,546 532 567 0 116 3,135

Total assets

LIABILITIES AND FUND BALANCES

Liabilities: Accounts payable and other liabilities $ 156 $ 53 $ 1 $ 0 $ 137 $ 198 Due to other funds 0 0 0 0 0 0 Deferred revenue 0 0 0 0 0 0 Advances from other funds 0 0 0 0 0 0 Total liabilities 156 53 1 0 137 198

Fund balances: Reserved for debt service 5,539 520 567 0 0 3,131 Reserved for encumbrances 0 0 0 0 0 0 Reserved for advances to other funds 0 0 0 0 0 0 Unreserved Total fund balance

Total liabilities and fund balance $ 5,816 $ 532 $ 567 $ 1 $ 839 $ 3,135 State of Kansas Other Supplementary Information June 30,2008

State of Kansas Combining Balance Sheet - Governmental Funds - Concluded June 30,2008 (expressed in tlzousands) Debt Service Funds STAR Highway Bonds Bond and Debt Debt Total Nonmajor Interest Service Service Governmental ASSETS

Cash and cash equivalents $ 0 $ 0 $ 0 $ 671,158 Investments 392 0 0 46,853 Receivables, net 8 116 0 139,901 Due from other funds 0 0 0 2 1,724 Advances to other funds 0 0 0 78,530 Restricted cash and cash equivalents 11,580 56,035 48,441 137,077

Total assets

LIABILITIES AND FUND BALANCES

Liabilities: Accounts payable and other liabilities $ 123 $ 8 $ 0 $ 242,464 Due to other funds 0 0 0 1,639 Deferred revenue 0 0 0 1,560 Advances fiom other funds Total liabilities

Fund balances: Reserved for debt service 11,580 6 0 32,224 Reserved for encumbrances 0 814 0 11,575 Reserved for advances to other funds 0 0 0 78,530 Unreserved Total fund balance

Total liabilities and fund balance $ 11,980 $56,151 $48,441 $ 1,095,243 State of Kansas Other Supplementary Information June 30,2008

State of Knttsas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds For the Fiscal Year Ended June 30,2008 (expressed in ilrousands) Special Revenue Funds State Tobacco Regulatory Settlement for Boards and Correctional Children's Social and Adjutant Commission Facilities Initative Rehabilitation General Aging Revenues: Property tax Income and inheritance tax Sales and excise tax Gross receipts tax Charges for services Operating grants Capital grants Investment earnings Other revenues Total revenues Expenditures: Current: General government Human resources Education Public safety Agriculture and natural resources Highways and other transportation Health and environment Economic development Debt service: Principal ~nterest Total expenditures

Excess of revenues over (under) expenditures

Other financing sources (uses): Proceeds eom sale of debt 2,632 0 0 0 0 0 Transfers, net (5,767) 16,661 57 444,413 16,947 268,017 Total other financing sources (uses) (3,135) 16,66 1 57 444,413 16,947 268,017

Net change in fund balances 3,625 5,151 15,145 6,757 (2,874) (284)

Fund balances, beginning of year 43,005 6,405 11,065 24,518 9,203 2,889 Revisions to beginning hdbalances (40) (4) 0 (62) 0 0 Fund balances, beginning of year (restated) 42,965 6,40 1 11,065 24,456 9,203 2,889

Fund balances, end of year $ 46,590 $ 11,552 $ 26,210 $ 31,213 $ 6,329 $ 2,605 State of Kansas Other Supplementary Information June 30,2008

State of Kansas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds - Continued For the Fiscal Year Ended June 30,2008 (expressed in tltousnrtds) Special Revenue Funds

Attorney Health and Highway Agriculture General Administration Environment Patrol Revenues: Property tax Income and inheritance tax Sales and excise tax Gross receipts tax Charges for services Operating grants Capital grants Investment Other revenues Total revenues Expenditures: Current: General government Human resources Education Public safety Agriculture and natural resources Highways and other transportation Health and environment Economic development Debt service: Principal Interest Total expenditures

Excess of revenues over (under) expenditures 209 (432) (67,399) (2,230) (15,241)

Other financing sources (uses): Proceeds from sale of debt 0 0 0 0 0 Transfers, net 12 1 4,840 67,643 2,619 17,596 Total other financing sources (uses) 121 4,840 67,643 2,619 17,596

Net change in fund balances 330 4,408 244 389 2,355

Fund balances, beginning of year 4,556 10,156 20,337 51,765 6,541 Revisions to beginning fund balances (4) (2) (3) (2,772) (14) Fund balances, beginning of year (restated) 4,552 10,154 20,334 48,993 6,527

Fund balances, end of year State of Kansas Other Supplementary Information June 30.2008

State of Ka~zsas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds - Continued For the Fiscal Year Ended June 30,2008 (expressed iit tltousands) Special Revenue Funds

Historical Society Labor Commerce Insurance Judicial Revenues: Property tax Income and inheritance tax Sales and excise tax Gross receipts tax Charges for services Operating grants Capital grants Investment earnings Other revenues Total revenues Expenditures: Current: General government Human resources Education Public safety Agriculture and natural resources Highways and other transportation Health and environment Economic development Debt service: Princi~al Interest 0 0 3,976 0 0 Total expenditures 2,759 42,865 131,394 18,031 12,549

Excess of revenues over (under) expenditures 762 (8,556) (44,347) 3,027 263

Other financing sources (uses): Proceeds fiom sale of debt Transfers, net (35) 8,623 38,301 (24) 7 Total other financing sources (uses) (35) 8,623 38,301 (24) 7

Net change in fund balances 727 67 (6,046) 3,003 270

Fund balances, beginning of year 3,944 2,969 103,691 10,829 9,718 Revisions to beginning fund balances 0 (10) (9) (8) (10) Fund balances, beginning of year (restated) 3,944 2,959 103,682 10,821 9,708

Fund balances, end of year $ 4,671 $ 3,026 $ 97,636 $ 13,824 $9,978 State of Kansas Other Supplementary Information June 30,2008

State of Kansas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds - Continued For the Fiscal Year Ended June 30,2008 (expressed in tlrousanrls) Special Revenue Funds

State Secretary State Library Revenue Education of State Treasurer Revenues: Property tax $O$ 0% O$ O$ 0 Income and inheritance tax 0 0 0 0 0 Sales and excise tax 0 6,227 (1) 0 (3) Gross receipts tax 0 175 0 0 0 Charges for services 3 13,605 3,943 4,741 1,048 Operating grants 1,619 1,157 398,692 7 0 Capital grants 0 0 0 0 0 Investment earnings 0 0 8 625 3,442 Other revenues 0 2 31,710 0 12,668 Total revenues 1,622 21,166 434,352 5,373 17,155 Expenditures: Current: General government Human resources Education Public safety Agriculture and natural resources Highways and other transportation Health and environment Economic development Debt service: Principal Interest Total expenditures

Excess of revenues over (under) expenditures (15) (45,279) (65,5 15) (1,174) 2,711

Other financing sources (uses): Proceeds from sale of debt 0 0 0 0 0 Transfers, net 0 45,116 188,362 0 (2,966) Total other financing sources (uses) 0 45,116 188,362 0 (2,966)

Net change in fund balances (15) (163) 122,847 (1,174) (255)

Fund balances, beginning of year 78 9,494 3,564 17,385 2,134 Revisions to beginning hnd balances 0 (25) (1) (2) (1) Fund balances, beginning of year (restated) 78 9,469 3,563 17,383 2,133

Fund balances, end of year $ 63 $ 9,306 $ 126,410 $ 16,209 $ 1,878 State of Icansas Other Supplementary Information June 30,2008

State of Kansas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds - Continued For the Fiscal Year Ended June 30,2008 (expressed in ilzousaizds) Special Revenue Funds

State Peace Wildlife Transportation- Water Officer and Parks Executive Legislative special revenue Plan Training Revenues: Property tax Income and inheritance tax Sales and excise tax Gross receipts tax Charges for services Operating grants Capital grants Investment earnings Other revenues Total revenues Expenditures: Current: General government Human resources Education Public safety Agriculture and natural resources Highways and other transportation Health and environment Economic development Debt service: Principal Interest Total expenditures

Excess of revenues over (under) expenditures (5,804) 2,053 98 (10,121) (6,369) 782

Other financing sources (uses): Proceeds fiom sale of debt Transfers, net 4,814 (1,254) 0 12,197 10,626 0 Total other financing sources (uses) 4,814 (1,254) 0 12,197 10,626 0

Net change in fund balances (990) 799 98 2,076 4,257 782

Fund balances, beginning of year 25,449 1,629 87 26,746 17,584 0 Revisions to beginning fund balances (19) 0 0 0 (1) 0 Fund balances, beginning of year (restated) 25,430 1,629 87 26,746 17,583 0

Fund balances, end of year $ 24,440 $ 2,428 $ 185 $ 28,822 $ 21,840 $ 782 State of Kansas Other Supplementary Information June 30.2008

State of Kansas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds - Continued For the Fiscal Year Ended June 30,2008 (expressed in tlrousarzds) Capital Projects Funds

Capitol Master State Buildings Complex Lease State Pooled (Appropriated) Buildings Program Corrections Library Funds Revenues: Property tax Income and inheritance tax Sales and excise tax Gross receipts tax Charges for services Operating grants Capital grants Investment earnings Other revenues Total revenues Expenditures: Current: General government Human resources Education Public safety Agriculture and natural resources Highways and other transportation Health and environment Economic development Debt service: Principal Interest Total expenditnres

Excess of revenues over (under) expenditures 28,622 (36,400) (1 1,537) (14,447) (297) (125)

Other financing sources (uses): Proceeds fiom sale of debt Transfers, net (20,23 1) 10,207 0 14,539 0 125 Total other financing sources (uses) (20,23 1) 38,380 6,071 23,93 1 0 125

Net change in fund balances 8,391 1,980 (5,466) 9,484 (297) 0

Fund balances, beginning of year 32,933 6,077 77,746 2,175 368 0 Revisions to beginning fund balances 0 7 0 6 0 0 Fund balances, beginning of year (restated) 32,933 6,084 77,746 2,181 368 0

Fund balances, end of year $ 41,324 $ 8,064 $72,280 $ 11,665 $ 71 $ 0 State ot Kansas Other Supplementary Information June 30,2008

State of Kansas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds - Continued For the Fiscal Year Ended June 30,2008 (expressed in ilzousands) Capital Projects Funds

Public Social and Broadcasting Highway Rehabilitation Armories Digital Vital Statistics Project Patrol Labor Services Revenues: Property tax Income and inheritance tax Sales and excise tax Gross receipts tax Charges for services Operating grants Capital grants Investment earnings Other revenues Total revenues Expenditures: Current: General government Human resources Education Public safety Agriculture and natural resources Highways and other transportation Health and environment Economic development Debt service: Principal Interest Total expenditures

Excess of revenues over (under) expenditures

Other financing sources (uses): Proceeds from sale of debt Transfers, net Total other financing sources (uses)

Net change in fund balances

Fund balances, beginning of year Revisions to beginning fund balances Fund balances, beginning of year (restated)

Fund balances, end of year State of Kansas Other Supplementary Information June 30.2008

State of Kansas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds - Concluded For the Fiscal Year Ended June 30,2008 (expressed in thousands) Debt Service Funds

Bond and Highway STAR Bonds Total Nonmajor Interest Debt Service Debt Service Governmental Revenues: Property tax Income and inheritance tax Sales and excise tax Gross receipts tax Charges for services Operating grants Capital grants Investment earnings Other revenues Total revenues Expenditures: Current: General government Human resources Education Public safety Agriculture and natural resources Highways and other transportation Health and environment Economic development Debt service: Principal Interest Total expenditures

Excess of revenues over (under) expenditures (5,840) (138,073) (670) (1,192,183)

Other financing sources (uses): Proceeds from sale of debt 21,786 0 0 74,3 0 1 Transfers, net (4,906) 129,945 0 1,279,471 Total other financing sources (uses) 16,880 129,945 0 1,353,772

Net change in fund balances 1 1,040 (8,128) (670) 161,589

Fund balances, beginning of year 405 64,271 49,111 685,452 Revisions to beginning fund balances 412 0 0 (2,568) Fund balances, beginning of year (restated) 817 64,271 49,111 682,884

Fund balances, end of year State of Kansas Other Supplementary Information June 30,2008

Listing of Non-Maior Proprietarv Funds

Enterprise Funds

Enterprise funds may be used to report any activity for which a fee for goods or services is charged external users. Enterprise funds are (1) required for any activity that operates under laws or regulations that its costs be recovered with fees and charges, rather than with taxes or similar revenues, (2) required for any activity for which management establishes fees, pursuant to its pricing policy, designed to recover its costs of providing services, and (3) required for activity that is financed with debt that is secured solely by a pledge of the net revenues fiom fees and charges of the activity:

Workers' Compensation Lottery Intergovernmental Transfer Program Transportation Revolving Fund Communication Systems Revolving Fund State of Kansas Other Supplementary Information June 30,2008

State of Kansas Combining Statement of Net Assets - Nonmajor Proprietary Funds June 30,2008 (expressed itt iltorrsattds)

Business-Type Activities Intergovern- Transporta- Communica- Workers mental tion tion Systems Compensa- Transfer Revolving Revolving tion Lottery Program Fund Fund Totals ASSETS Current assets: Cash and cash equivalents Receivables,net Inventories Total current assets

Noncurrent assets: Investments 0 0 0 15,277 0 15,277 Receivables,net: 0 0 0 50,518 578 51,096 Restricted cash and cash equivalents 0 0 0 4,097 0 4,097 Advances to other funds 2,000 0 0 0 0 2,000 Capital assets (net of accumulated depreciation) 0 360 0 0 0 360 Other noncurrent assets 0 0 0 512 0 512 Total noncurrent assets 2,000 360 0 70,404 578 73,342 Total assets $ 11,328 $ 17,506 $ 861 $ 84,846 $ 10,385 $ 124,926

LIABILITIES Current liabilities: Accounts payable and other liabilities $ 213 $ 7,199 $ 0 $ 571 $ 0 $ 7,983 Deferred revenue 0 0 0 0 78 78 Due to other funds 0 6,000 0 0 6,621 12,621 Short-term compensated absences 10 0 0 0 0 10 Short-term prtion of long-term liabilities Total current liabilities Noncurrent liabilities: Compensated absences Claims and judgements Bonds, notes and loans payable Arbitrage rebate payable Other post employment benefits Total noncurrent liabilities Total liabilities

NET ASSETS Invested in capital assets, net of related debt Restricted for: Debt service Other purposes Unrestricted Total net assets Total liabilities and net assets State of Kansas Other Supplementary Information June 30.2008

State ofKa~tsas Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets - Nonmajor Proprietary Funds For the Fiscal Year Ended June 30,2008 (expressed in thousands)

Business-Type Activities Intergovern- Transporta- Communica- Workers mental tion tion Systems Compensa- Transfer Revolving Revolving tion Lottery Program Fund Fund Totals

Operating revenues: Charges for services Other revenue Total operating revenues

Operating expenses: Personal services Supplies and services Lottery prize awards Depreciation Insurance claims and expenses Other expenses Total operating expenses

Operating income (loss)

Nonoperating revenues (expenses): Investment earnings Interest expense Other expenses Total nonoperating revenues (expenses)

Wet income (loss)

Transfers in Transfers out

Net change in net assets

Total net assets - beginning Revisions to beginning net assets Total net assets - beginning (restated) Total net assets - ending State of Kansas Other Supplementary Information June 30,2008

Internal Service Funds

Internal Service Funds are used to report any activity that provides goods or services to other funds, departments, or agencies of the primary government and its component units, or to other governments, on a cost-reimbursement basis:

Printing Accounting Services Motor Pool Information Technology Aiicrafi Building Maintenance Architectural Services State Workers' Compensation Capitol Security Osawatomie Motor Pool Wildlife Aircraft Personnel Services State ,of I

State of Kansns Combining Statement of Net Assets - Internal Service Funds June 30,2008 (expressed irt tltozisanrls)

Accounting Information Building Printing Services Motor Pool Technology Aircraft Maintenance ASSETS Current assets: Cash and cash equivalents Inventories Total current assets

Noncurrent assets: Capital assets (net of accumulated depreciation) 1,129 5 55 1 11,999 0 70,657 Total noncurrent assets 1,129 5 55 1 11,999 0 70,657 Total assets $ 3,952 $ 6,353 $ 1,072 $ 18,878 $ 48 $ 82,107

LIABILITIES Current liabilities: Accounts payable and other liabilities Due to other funds Short-term compensated absences Short-term portion of long-term liabilities Total current liabilities Noncurrent liabilities: Compensated absences Claims and judgements Bonds, notes and loans payable Advances from other funds Total noncurrent liabilities . Total liabilities

NET ASSETS Invested in capital assets, net of related debt Restricted for: Unrestricted Total net assets Total liabilities and net assets State of Kansas Other Supplementary Information June 30,2008

State of Kansas Combining Statement of Net Assets - Internal Service Funds - Concluded June 30,2008 (expressed ~JZtl~ousands)

Architectural State Workers Capitol Osawatomie Wildlife Personnel Services Compensation Security Motorpool Aircraft Services Totals ASSETS Current assets: Cash and cash equivalents Inventories Total current assets

Noncurrent assets: Capital assets (net of accumulated depreciation) 6 3- 0 O-- 0 0 84,350 Total noncurrent assets 6 3- 0 O-- 0 0 84,350 Total assets $ 72 $ 3.988 $ 193 $ 71 $ 175 $ 352 $ 117.261

LIABILITIES Current liabilities: Accounts payable and other liabilities Due to other funds Short-term compensated absences Short-term portion of long-term liabilities Total current liabilities Noncurrent liabilities: Compensated absences Claims and judgements Bonds, notes and loans payable Advances from other funds Total noncurrent liabilities Total liabilities

NET ASSETS Invested in capital assets, net of related debt Restricted for. Unrestricted Total net assets Total liabilities and net assets State of Kansas Other Supplementary Information June 30,2008

State of Kansas Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets - Internal Service Funds For the Fiscal Year Ended June 30,2008 (expressed in tlzo~isanrls)

Accounting Information Building Printing Services Motor Pool Technology Aircraft Maintenance

Operating revenues: Charges for services Other revenue Total operating revenues

Operating expenses: Salaries and wages Supplies and services Depreciation Insurance claims and expenses 0 0 0 0 0 0 Other expenses Total operating expenses

Operating income (loss) 254 (8,156) 1,616 4,856 13 8,307

Nonoperating revenues (expenses): Interest expense Other expenses 0 0 0 (3 80) 0 0 Total nonoperating revenues (expenses) (28) 0 0 (380) 0 (2,868)

Net income (loss) 226 (8,156) 1,616 4,476 13 5,439

Transfers in Transfers out

Net change in net assets 105 (7,581) 154 4,255 13 1,659

Total net assets - beginning 2,870 (1 8,701) (1,479) 8,670 17 16,939 Revisions to beginning net assets (4) (4) (1) 24 0 (7) Total net assets - beginning (restated) 2,866 (18,705) (1,480) 8,694 17 16,932

Total net assets - ending State of Kansas Other Supplementary Information June 30,2008

State of Kansas Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets - Internal Service Funds - Concluded For the Fiscal Year Ended June 30,2008 (expressed ir~Ilro~rsarrds)

Architectural State Workers Capitol Osawatomie Wildlife Personnel Services Compensation Security Motor Pool Aircraft Services Totals

Operating revenues: Charges for services Other revenue Total operating revenues

Operating expenses: Salaries and wages Supplies and services Depreciation Insurance claims and expenses Other expenses Total operating expenses

Operating income (loss) (62) (1 1,086) 4 1 (6) 25 95 (4,103)

Nonoperating revenues (expenses): Interest expense Other expenses 0 0 0 0 0 0 (380) Total nonoperating revenues (expenses) 0 0 0 0 0 0 (3,276)

Net income (loss) (62) (1 1,086) 41 (6) 25 95 (7,379)

Transfers in Transfers out

Net change in net assets (62) (1 1,086) 41 (6) 25 95 (12,388)

Total net assets - beginning Revisions to,beginningnet assets Total net assets - beginning (restated)

Total net assets - ending STATISTICAL

SECTION State of Kansas Statistical Section June 30,2008

Contents Page

Financial Trends 135 These schedules contain trend information to help the reader understand how the State's financial performance and well-being have changed over time.

Revenue Capacity These schedules contain information to help the reader assess the state's most significant revenue source, the income and sales taxes.

Debt Capacity These schedules present information to help the reader assess the affordability of the State's current levels of outstanding debt and the State's ability to issue additional debt in the future.

Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the State's financial activities take place.

Operating Information These schedules contain service and infkastructure data to help the reader understand how the information in the State's financial report relates to the services the State provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived fiom the comprehensive annual financial reports for the relevant year. The State implemented GASB Statement 34 in fiscal year 2002; schedules presenting government-wide information include information beginning that year.

The State University System was changed fiom a business-type activity to a component unit of the State which significantly changes some amounts for fiscal year 2004 and beyond. State of Kansas Statistical Section June 30,2008

Financial Trends Net Assets by Fund Type Last Seven Fiscal Years (expressed in thousands)

Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets

Business-type activities' Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net assets

Primary government Invested in capital assets net of related debt Restricted Unrestricted Total primary government net assets

'In fiscal year2004 the State University System was changed from a business-type activity to a component unit of the State. State of Kansas Statistical Section June 30,2008

Financial Trends Net Assets by Fund Type Last Seven Fiscal Years (expressed in thousands) State of Kansas Statistical Section June 30,2008 Financial Trends Changes in Net Assets, Last Seven Fiscal Years (expressed in thousands)

Expenses Governmental activities: General government Human resources Education Public safety Agriculture and natural resources Highways and other transportation Health and environment Economic development Interest expense Total governmental activities expenses Business-type activities: Water pollution and safety Health care stabilization Employment security Workers' compensation Lottery Universities Intergovernmental transfer program Total business-type activities expenses Tatal primary government expenses

Program Revenues Governmental activities: General government Human resources Education Public safety Agriculture and natural resources Highways and other transportation Health and environment Total governmental activities revenues Business-type activities:' Water pollution and safety Health care stabilization Employment security Workers' compensation Lottery Universities Intergovernmental transfer program Transportation revolving fund Total business-type activities revenues Total primary government revenues

Net (Expense) Revenue Government activities Business-type activities Total primary net (expense) revenue State of Kansas Statistical Section June 30,2008 Financial Trends Changes in Net Assets, Last Seven Fiscal Years (kcpressed in thousands) State of Kansas Statistical Section June 30,2008

Financial Trends Revenues and Other Changes in Net Assets Last Seven Fiscal Years (Expressed in thousands)

Governmental activities: Taxes Property tax Income and inheritance tax Sales and excise tax Gross receipts tax Investment earnings Other revenue Extraordinary items Transfers Total governmental activities revenues Business-type activities:' Investment earnings Other revenue Transfers Total business-type activities revenues Total primary government revenues

'In fiscal year 2004 the State University System was changed from a business-type activity to a component unit of the State. State of Kansas Statistical Section June 30,2008

Financial Trends Revenues and Other Changes in Net Assets Last Seven Fiscal Years (Expressed in thousands) State of Kansas Statistical Section June 30,2008

Financial Trends Fund Balances, Governmental Funds Last Seven Fiscal Years (exmessed in thoztsands)

General Fund Reserved Unreserved Total general fund

Social and Rehabilitation ~und' Reserved Unreserved Total social and rehabilitation fund

Transportation Fund Reserved Unreserved Total Transportation Fund

Transportation - Capital Projects Fund Reserved Unreserved Total Transportation - Capital Projects Fund

Health Policy Authority Reserved Unreserved Total Health Policy Authority Fund

All Other Governmental Funds Reserved reported in: Reserved for debt service Reserved for encumbrances Reserved for advances to other funds Unreserved Total all other governmental funds

In fiscal year 2008 the Social and Rehabilitation Fund was no longer a major fund. State of Kansas Statistical Section June 30,2008

Financial Trends Fund Balances, Governmental Funds Last Seven Fiscal Years (expressed in thousands) State of $Kansas Statistical Section June 30,2008

Changes in Fund Balances, Governmental Funds Last Seven Fiscal Years (expressed in thousands)

Revenues Taxes Charges for services Intergovernmental (operating and capital grants) Investment earnings Other revenues (includes extraordinary items) Total revenues

Expenditures General government Human resources Education Public safety Agriculture and natural resources Highways and other transportation Health and environment Economic Development Debt service Interest Principal Total expenditures

Excess of revenues over (under) expenditures

Other Financing Sources (Uses) Proceeds from sale of debt Transfers, net Other financing sources (uses) Extraordinsuy items Total other financing sources (uses)

Net change in fund balances

Debt service as a percentage of noncapital expenditures State of Kansas Statistical Section June 30,2008

Changes in Fund Balances, Governmental Funds Last Seven Fiscal Years (expressed in thousands) State of Kansas Statistical Section June 30,2008

Revenue Capacity Personal income by Industry, Last Six Calendar Years (expressed in tlzousands)

Private earnings Agricultural, Forestry, Fishing and Hunting Mining Utilities Construction Manufacturing Wholesale trade Retail trade Transportation and warehousing Information Finance and insurance Real estate and rental and leasing Professional and technical services Management of companies and enterprises Administrative and waste services Educational services Health care and social assistance 18 Arts, entertainment and recreation 295,488 262,264 275,033 19 Accommodation and food services 1,414,505 1,529,046 1,620,859 20 Other services except public administration 1,819,250 1,923,437 1,933,757 21 22 Government 23 Federal, civilian 1,829,087 1,871,954 2,052,479 24 Military 1,359,767 1,611,419 1,732,548 25 State and local 7,627,869 8,376,916 9,482,014

Source: U.S. Department of Commerce, Bureau of Economic Analysis at: http://www.bea.~ov/re~ional/spi State of Kansas Statistical Section June 30,2008

Revenue Capacity Personal Income by Industry, Last Six Calendar Years (expressed in thoztsands) State of Kansas Statistical Section June 30,2008

Debt Capacity Long Term Obligations Last Seven Years (Expressed in thousands)

Government Activities Revenue bonds payable Sales tax limited obligation Note payable Capital leases payable Arbitrage rebate payable Claims and judgements Compensated absences Other post employment benefits Total Governmental Activities

Business-Type Activities Revenue bonds payable Note payable Arbitrage rebate payable Claims and judgements Compensated absences Other post employment benefits Other Total business-type activities

Component Units Revenue bonds payable Note payable Capital leases payable Arbitrage rebate payable Compensated absences Other post employment benefits Other Total component units Total State of Kansas Statistical Section June 30,2008

Debt Capacity Long Term Obligations Last Seven Years (Expressed in thozaands) State of Kansas Statistical Section June 30,2008

Demographic and Economic Information Kansas Demographic Statistics Last Ten Fiscal Years

Education Per Level in K to 12 Capita Years of Public Personal Median Formal School Unemployment Population Income Schooling Enrollment Rate --Year (1) (2) (4) (4) (5) 1999 26,134 469,205 3.0% 2000 27,439 468,347 3.7% 2001 28,432 468,171 4.3% 2002 29,141 468,173 5.1% 2003 29,545 467,326 5.4% 2004 3 1,003 484,262 4.8% 2005 32,948 466,037 5.3% 2006 34,743 465,374 4.7% 2007 36,483 465,135 4.8% 2008 (6) 471,263 4.4%

Data Sources: (') U.S. Bureau of the Census Web Site: htb://www.census.gov. (2) State Department of Commerce and U.S. Department of Commerce, BEA Web Site: htb://kansascommerce.com or htb://www.bea.gov (3) state Department of Health and Environment: ht&://www.l

Principal Employers in Kansas Current Year and Eight Years Ago

Percentage Percentage LocalITotal of Total of Total Employer Employees Rank Employment Employees Rank Employment

State Government (excludes Regents) Sprint KU and KUMC Embarq Corp. Via Christi Regional Medical Ctr. Cessna Aircraft Co. Spirit Aerosystems Inc. Hawker Beechcraft Corp. Royal Caribbean Cruises Ltd. United Parcel Service University of Kansas Hospital Boeing Company Raytheon Aircraft Company IBP, Inc. Farmland Industries Southwestern Bell Telephone

Total 100,036 / 883,343 7.01% 112,429 8.43%

Source: Dun & Bradstreet Corporation, Million Dollar Databases 2008 for current fiscal year and Marketplace Directory April -June 1999 for fiscal year 2000 annual financial report (*earliest information reported). The base used to calculate the percentage is the average number of the total employment in FYOS from the Department of Labor website at http://www.dol.ks.gov. State of Kansas Statistical Section June 30,2008

Operating Information Full-time Equivalent State Government Employees by FunctionIProgram - Continued Last Ten Fiscal Years

FunctionProgram 1998 1999 General Government 5,388 5,429 Public Safety 4,861 4,896 Education 18,183 18,288 Transportation 3,140 3,112 Agriculture and Natural 1,196 1,199 Resources Human Resources 9,177 8,609 Total 4 1,945 41,533

Source: Department of Administration Workforce Reports at http://www.da.ks.gov/ps/subjectlworkforce.htm State of Kansas Statistical Section June 30,2008

Operating Information Full-time Equivalent State Government Employees by Function/Program- Concluded Last Ten Fiscal Years 301 N.-Main, Suite 1700 ! 3630 SW Burlingame Road Wichita, Kansas 67202-4868 Topeka, Kansas 66611-2050 Phone (316) 267-7231 Phone (785) 234-3427 Fax (316) 267-0339 & L.C. ww_aghic.com Fax (785) 233-1768 Allen, Gibbs Houlik, btandcocpa.com & BERBERICH TRAHAN b' CO., P.A. CPAs Advisors Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Legislative Post Audit Committee Kansas State Legislature

We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the State of Kansas (State) as of and for the year ended June 30,2008, and have issued our report thereon dated January 16,2009. We did not audit the financial statements of the various component units of the six state universities which represent 53 percent and 30 percent, respectively, of the assets and revenues of the aggregate discretely presented component units, the Kansas Technology Enterprise Corporation (KTEC) which represents less than Ipercent of the assets and revenues of the aggregate discretely presented component units, and the College Savings Program (a State Fiduciary Fund) which represents 7 percent and 8 percent, respectively of the assets and revenues of the aggregate remaining fund information. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the component units of the six state universities and the KTEC in the aggregate discretely presented component units, and the College Savings Program in the aggregate remaining fund information, is based on the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Audjtjng Standards, issued by the Comptroller General of the United States. The audits of the various component units of the six state universities and the College Savings Program were not conducted in accordance with Government Auditing Standards.

Internal Control Over Financial Reportinq In planning and performing our audit, we considered the State's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the State's internal control over financial reporting. Accordingly, we do not .express an opinion on the effectiveness of the State's internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a

RSM McGladrey Network I\n hdepefidenil~MMember misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control.

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

Compliance and Other Matters As part of obtaining reasonable assurance about whether the State's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the State of Kansas Legislative Post Audit committee, management, federal awarding agencies, pass-through entities, and is not intended to be and should not be used by anyone other than those specified parties.

Ber6ericL 3~~G C.,/?A. dCCen, Gibb~4 #*&Cut, L.C. CERTIFIED PUBLIC ACCOUNTANTS CERTIFIED PUBLIC ACCOUNTANTS

January 16,2009 Wichita, KS (THIS PAGE LEFT BLANK INTENTION-ALLY) APPENDIX A-2

STATE APPROPRIATION OBLIGATIONS

Information regarding outstanding long-term obligations payable from State appropriations is set forth in the State's Comprehensive Annual Financial Report for the fiscal year ended June 30, 2008, in Appendix A-1 to the Official Statement. Subsequent to June 30,2008, additional long-term obligations subject to State appropriations have been issued and are outstanding. Such obligations include the following revenue bonds and lease purchase obligations.

Revenue Bonds

Original Final Date Principal Maturity Issued Amount Description Date

Kansas Development Finance Authority September 18,2008 $64,335,000 Revenue Bonds, Series 2008L (State of November 1,2028 Kansas Projects)

February 25,2008 $3,825,000 Kansas Development Finance Authority May 1,2035 Refunding Revenue.Bonds, Series 2008A (State of Kansas - Department of Administration)

February 25,2008 $515,000 Kansas Development Finance Authority May 1,2019 Taxable Refunding Revenue Bonds, Series 2008B (State of Kansas - Department of Administration)

Capital Lease Obligations

In addition to the obligations listed above, subsequent to June 30, 2008, the State has entered into certain long-term capital lease obligations payable from State appropriations, including approximately $2.208 million principal amount of lease obligations for equipment purchases through the State's Master Lease Purchase Program with a maximum lease term of six years. (THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX B

GOVERNOR'S ECONOMIC AND DEMOGRAPHIC REPORT (JANUARY 2009) (THIS PAGE LEFT BLANK INTENTIONALLY) The Governor's

and Demographic Report

Kansas Division of the Budget

January 2009 Acknowledgements

The Governor's Economic and Demographic Report 2008-2009 was prepared under the general direction of Duane A. Goossen, Director of the Budget.

This report was written by Dr. John Wong, Professor of Public Administration, Hugo Wall School of Urban and Public Affairs, Wichita State University and Dr. Rebecca Krahl, Senior Budget Analyst, Division of the Budget.

Publication coordination and editing were provided by Elaine Frisbie, Deputy Director; Dr. Rebecca IG-ahl, Senior Budget Analyst; and Shelly Dechand, Accountant.

Readers of The Governor's Economic and Demographic Report can access this information on the Kansas Division of the Budget's website at http://budget.ks.gov. Table of Contents Chapter 1 The U.S. Economy 2008 U.S. Economic Review ...... 1 2009 U.S. Economic Outlook ...... 6 Chapter 2 Kansas Employment & Income Overview ...... 12 Kansas Employment Review ...... 14 Comparative Employment in the Plains Region ...... 24 Kansas Personal Income Review ...... 26 Kansas Personal Income Estimates...... 27 Comparative Personal Income ...... 27 Chapter 3 Local & Regional Employment & Income Major Labor Market Employment ...... 31 Kansas & Adjacent States Metro Areas' Employment Trends ...... 44 Regional Labor Market Employment ...... 47 County Personal Income ...... 47 The Four Urban Counties...... 50 Chapter 4 Kansas Demographics Overview ...... U.S. Census Bureau's Methodology of Estimating State Populations...... The Decennial Census...... Poverty ...... School District Populations...... Health Insurance Coverage ...... Demographics ...... Kansas Population Projections...... Appendices Kansas Personal Income. 2006-2007 ...... 63 State Personal Income & Growth Rates, 2005-2007 ...... 66 State Disposable Income & Growth Rates, 2005-2007 ...... 68 Kansas County Personal Income, 2006 ...... 70 Kansas County Personal Income, 2007 ...... 73 Kansas Certified Population, Certified to the Secretary of State on July 1, 2008 ...... 76 Resident Population for U.S., Regions, States, & Kansas Counties, 2003-2007 ...... 125 Poverty Thresholds in 2007, by Size of Family & Number of Related Children under 18 Years...... 130 Kansas School District Populations, 2005 ...... 131 Health Insurance Coverage Status for the U.S. & Kansas, 1990-2007 ...... 138 Kansas Resident Population, 2001 through 2007 ...... 139 Kansas Population Projections, by County, by Age Cohort for 2009-2020 ...... 143 Table of Tables

Major U.S. Economic Trends. 2008 & 2009 ...... U.S. GDP Composition & Growth. 2007-2008 ...... U.S. Personal Consumption Expenditure Growth Percent Change. Seasonally Adjusted. 2007-2008 ...... U.S. Personal Income Growth. 2007-2008 ....: ...... U.S. Consumer Prices Percent Change. Seasonally Adjusted. 2007-2008 ...... U.S. GDP Composition & Growth. 2008-2009 ...... U.S. Personal Consumption Expenditure Growth Percent Change. Seasonally Adjusted. 2008-2009 ...... U.S. Personal Income Growth. 2008-2009 ...... U.S. Consumer Prices Percent Change. Seasonally Adjusted. 2008-2009 ......

2-1 Major Kansas Economic Trends ...... 12 2-2 Kansas Employment. by Place of Residence. October 2007-October 2008 ...... 14 2-3 Kansas Employment. by Place of Work. October 2007-October 2008 ...... 15 2-4 Plains Region Employment Growth Rates. 2006-2007 ...... 24 2-5 Plains Region Employment Growth Rates. October 2007-October 2008 ...... 25 2-6 Kansas Personal Income. 2007 Actual. 2008 Estimate. & 2009 Forecast ...... 28 2-7 Per Capita Personal Income, 1996-2007...... 30

3-1 Wichita Metropolitan Area Employment...... 32 3-2 Topeka Metropolitan Area Employment ...... 36 3-3 Lawrence Metropolitan Area Employment...... 38 3-4 Kansas City. KS Metropolitan Area Employment ...... 40 3-5 Metropolitan Area Employment Growth Rates. October 2007-October 2008 ...... 45 3-6 County Employment. October 2007-October 2008 ...... 48 Table of Figures

U.S. Civilian Labor Force Growth ...... U.S. Employment Growth ...... U.S. Unemployment Rate ...... Consumer Price Index (CPI-U) ...... U.S. Gross Domestic Product Growth ...... U.S. Real GDP Growth ...... U.S. Personal Income Growth ...... U.S. Economic Indicators ......

Kansas Civilian Labor Force Growth ...... 14 Kansas Employment Growth by Place of Residence ...... 15 Kansas Unemployment Rate ...... 15 Employment by Place of Work ...... 15 Natural Resources Employment ...... 16 Construction Employment ...... 17 Manufacturing Employment ...... 17 Durable Goods Employment ...... 17 Transportation Equipment Employment ...... 18 Nondurable Goods Employment...... 18 Food Manufacturing Employment ...... 18 Trade, Transportation, & Utilities Employment ...... 19 Utilities Employment ...... 19 Transportation & Warehousing Employment ...... 20 Wholesale Trade Employment ...... 20 Retail Trade Employment ...... 20 Information Employment ...... 21 Financial Activities Employment ...... 21 Professional & Business Services Employment ...... 22 Education & Health Services Employment ...... 22 Leisure & Hospitality Employment ...... 23 Other Services Employment ...... 23 Government Employment ...... 23 Farm Employment ...... 24

3-1 Percent Change in County Personal Income. 2006-2007 ...... 52 3-2 Per Capita Personal Income. 2007 ...... 52 3-3 Total Personal Income. by Region. 2006 & 2007 ...... 53 3-4 Percent Change in Total Income 2006 & 2007 & 2007 per Capita Income. by Region ...... 53

iii (THIS PAGE LEFT BLANK LNTENTIONALLY) Chapter 1

The U.S. Economy

2008 U.S. Economic Review sector, the NBER emphasizes economy-wide measures of economic activity. The Business Cycle Dating Committee believes that domestic production and Catastrophic changes in global credit markets over the employment are the primary measures of economic past six months have had a devastating effect on the activity. Since the recession began in December last U.S. economy, precipitating massive reductions in year, the economy has lost 1.2 million jobs. lending and a fundamental reassessment of investment risk and asset valuations. Confidence in global The average length of the 11 post-World War I1 financial systems and institutions has plummeted, recessions has been about ten months. The 1973-75 locking down capital markets, leading to recession followed oil price shocks and failed attempts unprecedented global governmental interventions in an at government price controls. The recession of 1981 - attempt to forestall what could be the most severe 82 was largely caused by high interest rates economic contraction since the Great Depression. implemented to contain runaway inflation and a These conditions have resulted in the loss of nearly financial crisis caused by a real estate crash. These $11 trillion in U.S. household net worth since last were the two worst recessions in the postwar period year, with equity markets dropping by some $7 trillion with each lasting 16 months. Another financial and and declines of about $4 trillion in the value of the real estate crisis led to the recession of 1990-91. The nation's housing stock. more recent 2001 recession was largely caused by the collapse of overvalued technology stocks and On November 28, the Business Cycle Dating lasted eight months. The present recession was largely Committee of the National Bureau of Economic caused by the over inflated growth in home prices Research (NBER) met by conference call and and unsustainable rates of new home construction. officially declared an end to the most recent economic Under normal circumstances a price correction would expansion. The committee maintains a history of the occur and the economy would quickly return to beginning and end dates of U.S. recessions. The growth. . committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The Initially, most of the uncertainty resulted from the peak marks the end of the expansion that began in fears of lenders to extend credit to banks. November 2001 and the beginning of a recession. The Subsequently, the focus of the uncertainty began to expansion lasted 73 months; the previous expansion of shift from the credit markets to the anticipated the 1990s lasted 120 months. magnitude of the global recession. As such, the extraordinary monetary and fiscal measures taken by A recession is a significant decline in economic the U.S. and other governments around the world in activity spread across the economy, lasting more than recent months have been designed to inject financial a few months, normally visible in production, markets with liquidity, sustain key institutions and employment, real income, and other indicators. A companies, and stimulate demand through massive recession begins when the economy reaches a peak of public spending programs. However, to date these activity and ends when the economy reaches its measures have yet to stabilize markets, restore trough. Between trough and peak, the economy is in confidence, or provide a clear path to recovery. In an expansion. spite of the passage of the $700 billion Troubled Asset Relief Program (TARP) legislation on October 3, Recessions are defined as two or more consecutive which was intended to help restore investor quarters of economic contraction, which has not confidence, the Dow Jones Industrial Average happened yet. However, because a recession is a immediately dropped about 20 percent, or more than broad contraction of the economy, not confined to one 2,000 points, over the course of one week. The general economic environment has deteriorated force grew 0.8 percent, compared to a 1.1 percent significantly in 2008, with credit market turmoil growth rate in 2007. This is the slowest growth rate in leading the way. Over time the effects of the financial recent years since 2004 when the labor force increased crisis will extend beyond the direct impacts on the only 0.6 percent. Figure 1-1 shows the U.S. civilian banking system and the credit-sensitive real estate and labor force growth rate fi-om 1970 through 2008. automotive industries, and extend to virtually every Figure 1-1 corner of the economy. The U.S. stock market has declined by 40 percent. The only positive news is that U.S. Civilian Labor Force Growth crude oil prices have dropped by more than two-thirds 3.5% , since peaking at over $150 per barrel in July, saving consumers billions of dollars. Unfortunately, the reason oil prices have plunged is the widespread speculation that a severe global recession will dramatically reduce crude oil demand.

As shown in' Table 1-1, which presents major U.S. economic trends for 2008 and the forecast for 2009, real GDP growth is expected to decrease fi-om 1.4 Table 1-1 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 Major U.S. Economic Trends Year I 2008 & 2009 I --2008 2009 GDP Growth ($ Constant) 1.4% --% The level of employment is the number of individuals Personal Income Growth ($ Current) 4.3 2.9 in the civilian labor force who are employed. In 2008, Consumer Price Index Increase (CPI-U) 4.3 1.8 employment in the U.S. decreased by 0.3 percent. Unemployment Rate (Monthly Average) 5.6 7.3 This compares to a 1.1 percent increase in 2007 and a 1.9 percent increase in 2006. Again this is the slowest percent in 2008 to zero in 2009, while personal income rate of increase in recent years since 2002 when growth is expected to slow from 4.3 percent to 2.9 employment decreased by only 0.3 percent. Figure 1- percent. With the exception of energy and fuel costs, 2 presents the U.S. employment growth rate from 1970 the Consumer Price Index for All Urban Consumers through 2008. (CPI-U) has shown stable yearly increases for the last Figure 1-2 several years. The inflation rate is expected to slow from 4.3 percent in 2008 to 1.8 percent in 2009. The U.S. Employment Growth only rather large increase occurred in 2005 when it jumped by 5.3 percent. This was the highest rate of increase since 1992 when the CPI-U increased by 4.2 percent. However, the national unemployment rate is expected to increase slightly from 5.6 percent in 2008 to 7.3 percent in 2009.

Employment data are important when analyzing the economy. The initial datum derived is the civilian labor force, which is based on a sample survey of households. Once the civilian labor force is deter- mined, then employment, unemployment, and the unemployment rate are derived. The civilian labor Year force includes those who are at least 16 years old and either employed or looking for employment. Military The unemployment rate is expressed as a percentage personnel, retirees, children, and those not actively of the number of people unemployed to the total seeking work are not included. In 2008, the labor number of people in the labor force. In 2008, the unemployment rate stood at 5.6 percent, up significantly from the 4.6 percent rate in 2006 and 2007. In 1992, the unemployment rate was 7.5 Consumer Price Index (CPI-U) percent. The unemployment rate in the U.S. steadily 160% declined every year to 4.0 percent in 2000. Then in 14.0% I 2001, the unemployment rate increased to 4.7 percent. Subsequently, the unemployment rate soared to 5.8 percent in 2002. In 2003, the unemployment increased further to 6.0 percent, it then dropped back to 5.1 percent in 2005. Figure 1-3 shows the U.S. unemployment rate fiom 1970 through 2008.

I U.S. Unemployment Rate I 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 I Year I in nominal terms. Nominal GDP is the dollar value of the final goods and services, while real GDP is the value of the final goods and services as adjusted for price changes (inflation) that occurred over the course of that year. U.S. nominal GDP increased at a 3.9 percent rate in 2008 compared to a 4.8 percent rate in 2007 and a 6.1 percent rate in 2006. This is the slowest rate of nominal GDP growth since 2002 when it grew at only a 3.4 percent pace. Figure 1-5 presents 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 U.S. gross domestic product growth from 1970 Year through 2008. Figure 1-5 Inflation is another important economic indicator. In I I U.S. Gross Domestic Product Growth general, inflation is the increase in the price of a given I I "market basket" of goods. Inflation can be measured in several ways. However, the most commonly used measurement is the Consumer Price Index. This index was first constructed during World War I as a basis for adjusting shipbuilders' wages, which were under government control during the war. In this report, the CPI-U is used because it is reflective of the typical urban consumer's purchases and is the most ~ commonly used measurement. In 2008, the rate of inflation, as measured by the CPI-U, increased by 4.3 percent compared to a 2.8 percent increase in 2007. This was the highest rate of increase since 1990 when .- - the CPI increased 5.4 percent. Figure 1-4, in the next Year I column, shows the CPI-U fiom 1970 through 2008. Real GDP grew by 1.4 percent in 2008, compared to a 2.0 percent increase in 2007 and a 2.8 percent increase ~ Gross Domestic Product in 2006. This is the slowest rate of growth since 2001 when real GDP grew at only a 0.8 percent rate. Figure Gross domestic product, or GDP, is the value of final 1-6, on the following page, presents the annualized goods and services produced within the country during quarterly growth rate for the U.S. real GDP fiom the a given year. GDP is measured both in real terms and first quarter of 1999 through the fourth quarter of 2008. Figure 1-6 confidence in the economy. Consumer discretionary U.S. Real GDP Growth income was significantly affected by the continuing (Annualized Quarterly Growth Rate) high cost of gasoline. Although prices have fallen 6.0% I recently, prices during the late summer and early fall were higher than a year ago.

In 2008, real (adjusted for inflation) consumption increased by 0.4 percent, compared to a 2.8 percent increase last year. The overall increase in real consumer spending was led by a 1.4 percent increase in expenditures on services. This compares to a 2.6 percent increase last year. Retail sales and food services increased by 0.6 percent, while retail sales and food excluding autos increased 3.8 percent. The highest increases were for expenditures for food and There are five major categories of GDP: consumption, beverage stores at 5.1 percent, general merchandise at investment, exports, imports (exports and imports 3.8 percent, food services and drinking places at 3.4 constitute international trade), and government percent, food and beverage stores at 5.8 percent, and spending. Real GDP for 2008 is shown in Table 1-2. clothing and accessories at 1.1 percent. Expenditures for building materials, equipment, and supplies Table 1-2 decreased 3.9 percent. U.S. GDP Composition & Growth, 2007-2008 (Dollars in Billions) Expenditures on durable goods, or those with an Real Percent Change expected useful life of more than one year, decreased 2008" 2006-2007 2007-2008 3.8 percent in 2008. This compares to a 4.8 percent Gross Domestic Product 11,687.2 2.0 % 1.4 % increase last year. Non-durables are goods with an Consumption 8,284.5 2.8 0.4 expected useful life of one year or less. Expenditures Durables 1,195.2 4.8 (3.8) on nondurable goods decreased by 0.1 percent in 2008 Nondurables 2,390.1 2.5 (0.1) compared to a 2.5 percent increase in 2007. Table 1-3 Services 4,713.5 2.6 1.4 presents U.S. real personal consumption expenditure Investment 1,707.0 (5.4) (5.7) growth for 2007 and 2008. Fixed 1,738.1 (3.1) (3.9) Nonresidential 1,426.0 4.9 3.1 Table 1-3 Structures 338.8 12.7 11.2 Equipment 1,070.1 1.7 (0.8) U.S. Personal Consumption Expenditure Growth Residential 359.2 (17.9) (20.9) Percent Change, Seasonally Adjusted, 2007-2008 Inventory Change (31.1) (105.9) 1,143.3 Expenditures Net Exports (384.6) (11.2) (29.6) 2007 2008 Exports 1,549.6 8.4 8.7 Imports 1,934.2 2.2 (1.9) Personal Consumption 2.8 % 0.4 % Government 2,070.9 2.1 2.9 Durables 4.8 (3.8) Federal 795.3 1.6 5.6 Motor Vehicles 2.0 (13.2) Defense 537.3 2.5 7.0 Nondurables 2.5 (0.1) Nondefense 257.9 (0.2) 3.0 State and Local 1,275.9 2.3 Services 2.6 1.4 *Estimated Retail Sales & Food Services 4.1 0.6 I I Source: US. Departnzenl of Conzmerce, Bureau of Econornic Ret. Sales & Food Less Autos 4.4 3.8 Analysis, and Moody's Economy.corn Bldg. Mat., Equip., & Supplies (2.7) (3.9) General Merchandise 4.3 3.8 Consumption. The largest component of GDP is Food & Beverage Stores 5.0 5.1 consumption, or consumer spending. Changes in Clothing & Accessories 5.0 1.1 consumer spending are affected by a variety of factors, Food Serv. & Drinking Places 5.1 3.4 including personal income, the savings rate, debt accumulation, discretionary income, and consumers' Source: Moody's Econony.conz Business Investment. Capital investment has 2008, personal income increased by 4.3 percent, which continued to expand at a reasonable rate. Spending on is much lower than the 6.1 percent growth rate nonresidential construction has been particularly experienced in 2007. Figure 1-7 presents U.S. strong, reflecting higher outlays for new office and personal income growth from 1970 through 2008. commercial buildings, as well as a rapid increase in expenditures on drilling and mining structures. Rental income surged 36.7 percent in 2008, compared Outlays for equipment and software have slowed to a 9.5 percent drop in 2007, while dividend income somewhat, though backlogs for "on order" capital rose 6.8 percent compared to a 12.4 percent surge in goods, such as industrial machinery and other types of 2007. Interest income in 2008 increased 1.7 percent, heavy equipment, remain high. Moreover, financial following a 7.9 percent increase in 2007. conditions continue to be favorable for investment spending because profitability is high, the cost of capital is relatively low, and significant cash reserves remain on firms7 books. I U.S. Personal Income Growth I

In real terms, overall investment fell by 5.7 percent in 2008 following a 5.4 percent decrease in 2007. Specifically, fixed investment decreased 3.9 percent. Nonresidential investment increased 3.1 percent, while residential investment dropped 20.9 percent and inventories plummeted 1,143.3 percent.

International Trade. In 2008, real imports decreased by 1.9 percent following a 2.2 percent increase in 2007. During that same period, real exports increased 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 by 8.7 percent in 2008 following a 8.4 percent increase Year in 2007. The result was a trade deficit of $384.6 billion in 2008. Disposable personal income is personal income less personal taxes. Disposable income increased 1.1 Government Expenditures. Real government percent in 2008 compared to a 2.8 percent increase in spending increased by 2.9 percent in 2008 compared to 2007. Median household income increased 3.0 percent a 2.1 percent increase in 2007. Specifically, federal in 2008 compared to a 4.2 percent increase in 2007. government expenditures increased 5.6 percent in Table 1-4 below presents U.S. personal income 2008, compared to a 1.6 percent increase experienced composition and growth from 2007 to 2008. in 2007. Within the federal government category, national defense expenditures increased 7.0 percent in Table 1-4 2008 compared to a 2.5 percent increase in 2007, and U.S. Personal Income Growth, 2007-2008 non-defense expenditures increased 3.0 percent in (Dollars in Billions of Chain Weighted 2000 Dollars) 2008 compared to a 0.2 percent decrease in 2007. At the state and local government levels, expenditures Percent Change increased at a 1.3 percent rate in 2008 compared to a 2008" 2006-2007 2007-2008 I 2.3 percent increase in 2007. Median Household Income 5 1,7 16 4.2 % 3.0 % Personal Income 9,900.0 3.4 0.3 Personal Income. Personal income is the dollar value Disposable Income 8,700.0 2.8 1.1 of income available to households for consumption Dividends 839.5 12.4 6.8 expenditures. Total personal income is derived by Interest 1,234.9 7.9 1.7 summing salaries and wages, other labor income, Rent 54.7 (9.5) 36.7 proprietors' income, rental income, personal dividend Personal Saving Rate 1.6 % 0.2 1.O income, personal interest income, and transfer * Estimated payments. From this sum, personal contributions for Source: U.S. Department of Commerce, Bureau of Economic social insurance and personal taxes are deducted. In Analysis, and Moody's Economy.com Personal Savings. Personal savings is derived by 2009 U.S. Economic Outlook subtracting personal outlays from disposable personal income. The personal savings rate is personal savings As 2008 drew to a close, the year-long recession expressed as a percentage of disposable personal appeared to be intensifying. The economy has lost income. In 2008, the personal savings rate was 1.6 nearly 1.2 million jobs since the beginning of 2008. percent, compared to a 0.6 percent rate in 2007. The downturn is very broad-based. According to Moody's Economy.com the economy is expected to Inflation & Prices. Inflation can be measured using lose somewhere around 2.2 million jobs total through several methods. Two specific methods are the the third quarter of 2009. Representing about 1.6 Consumer Price Index for All Urban Consumers (CPI- percent of the peak payroll count, this recession will U) and the Gross Domestic Product (GDP) Price see comparatively fewer job losses than the last Deflator. Up until 2008, inflation has been less than recession when the economy lost 2 percent of its peak 4.0 percent since 1992. In 2008, inflation, as employment level. Although payroll job losses will be measured by the CPI-U, rose to 4.3 percent compared fewer, the recession will be more severe as measured to a 2.9 percent rate in 2007. More specifically, the by the extent and duration of unemployment. cost of food less energy increased 2.4 percent in Moody's Economy.com expects an increase in the 2008 compared to 2.3 percent in 2007. The cost of unemployment rate of just over 3 percentage points shelter increased 2.5 percent in 2008 compared to 3.7 though the first quarter of 2010. During the recessions percent in 2007, and the cost of food generally of 2001 and the early 1990s, the jobless rate increased increased 5.4 percent in 2008 compared to a 4.0 by 2.4 and 2.2 percentage points, respectively. One percent increase in 2007. The cost of food away from has to go back to the twin recessions of the early 1980s home increased 4.2 percent in 2008 compared to 3.6 to see a rise in the unemployment rate of the size percent in 2007. Finally, the cost of medical care projected now. increased 3.8 percent in 2008 compared to a 4.4 percent increase in 2007. During that same time Four commonly cited predictors of future economic frame, inflation, as measured by the GDP Price Index, performance are the Composite Index of Leading stood at 2.4 percent in 2008 compared to a 2.7 percent Economic Indicators, the Consumer Confidence Index, increase in 2007. Table 1-5 presents the seasonally the Index of Consumer Sentiment, and the Index of adjusted percent change for U.S. consumer prices for Consumer Expectations. Figure 1-8 presents these 2007 and 2008. indices for 2007. Table 1-5 Figure 1-8 I I U.S. Consumer Prices I U.S. Economic Indicators I Percent Change, Seasonally Adjusted, 2007-2008 Prices

GDP Chain Price Deflator Consumer Price Index Less Food & Energy Shelter Food Food Away from Home Medical Care

Source: Moody's Econotny.com Ja~~F&'_(r'Apr'May J~n'Jul'Aug'Sq'W'N~k' 1 Month Productivity. One major factor contributing to holding inflation in check in recent years has been ConsumerExpectations ----*Consumer Sentiment ' 'Consumer Confidence -Leading Indicators strong productivity growth. Productivity growth, as measured by output per hour, increased 3.0 percent in 2008, compared to a 1.4 percent growth rate The Composite Index of Leading Economic Indicators in 2007. and the Consumer Confidence Index are compiled by the Conference Board, which is a private, not-for- worth reduces consumer spending by about 5 cents profit organization that conducts business and eco- over the following two years, and thus the wealth lost nomic research and forecasting. The Composite Index over the past year could cut $275 billion from of Leading Economic Indicators is a composite index consumer spending in both 2009 and 2010. of ten leading economic indicators that reach cyclical turning points before the actual turning point occurs in With the exception of July, the Consumer the economy as a whole. Each series included in the Expectations, Consumer Sentiment, and Consumer Composite Index of Leading Indicators is selected be- Confidence Indices all drifted downward during the cause of its performance on six important characteris- course of the year. The Consumer Expectations Index tics, including economic significance, statistical ade- fell from a high of 68.1 in January to a low of 49.2 in quacy, timing consistency at business cycle peaks and June, before rebounding to 67.2 in September, and troughs, conformity to business expansions and dropping back to 53.9 by November. The Consumer contractions, smoothness, and prompt availability. Sentiment Index fell from a high of 78.4 in January to a low of 55.3 in November. The 12.7 point drop in The Conference Board also compiles the Consumer October was the largest monthly decline on record. Confidence Index. This index is based on the The present conditions component of the index fell to Consumer Confidence Survey, which is based on a its lowest level on record. The index of Consumer representative sample of 5,000 U.S. households. Confidence fell from a high of 87.9 in January to a low of 38.8 in November. In keeping with this trend, the The Index of Consumer Sentiment and the Index of Index of Leading Economic Indicators has drifted Consumer Expectations are compiled by the Survey downward for a high 102.1 during January to a low of Research Center at the University of Michigan. These 99.6 in October. This indicates that an economic indices focus on how consumers view prospects for slowdown is imminent. their own financial situation, how they view prospects for the general economy over the near term, and their Real GDP is expected to remain flat in 2009. Total view of prospects for the economy over the long term. non-farm employment is expected to decrease 1.0 percent in 2009 compared to a 0.1 percent decrease in While the overall inflation rate during 2008 was higher 2008. Productivity, as measured by output per hour, is than expected, the difference was almost entirely a also expected to increase 2.5 percent in 2009 result of higher energy and food prices. Excluding compared to a 3.0 percent increase in 2008. Business food and energy, the core CPI increased 2.4 percent investment spending is expected to decrease 3.0 per- during 2008. Inflation forecasts for the CPI and the cent in 2009 compared to a 5.7 percent decline in 2008. GDP price index show overall inflation resuming a lower trend in 2008. The unemployment rate is expected to increase significantly from 5.6 percent in 2008 to 7.3 percent in The most immediate fallout from the financial crisis is 2009. Nominal personal income is also forecasted to its impact on consumer and business confidence. increase by 2.9 percent in 2009 compared to a 4.3 Consumer confidence is near business cycle and percent increase in 2008. Even though inflation in quarter-century lows". This is in spite of the recent 2008 was well above the level forecast at the start of sharp decline in oil and gasoline prices. The the year, inflation is expected to remain modest for Conference Board index has been reflecting much 2009. The CPI is expected to increase by 1.8 percent steeper decline than other measures of consumer in 2009 compared to a 4.3 percent increase in 2008. confidence. Consumer confidence plunged in October, Oil prices are expected to moderate down to the $75 to its lowest reading since the Conference Board began per barrel range in 2009. its survey more than 40 years ago, surpassing the old record by more than 5 points. The lack of consumer confidence will exacerbate the effect of diminishing Gross Domestic Product household wealth. Net worth has fallen by $12 trillion since last year, with $4 trillion due to the 20 percent Moody's Economy.com estimates that the financial decline in house prices, and the remainder due to the crisis is likely to reduce Gross Domestic Product in drop in stock prices. According to Moody's 2009 by as much as $300 billion or about 2 percent of Economy.com, every dollar loss in household net GDP. Table 1-6, on the following page, presents the nominal and the real U.S. GDP composition and nonessential items. Growth in spending on services growth estimates for 2008 and the forecasts for 2009. was very modest with households cutting back on Table 1-6 discretionary items like recreation. U.S. GDP Composition & Growth, 2008-2009 Moody's Economy.com reports that during the second (Dollars in Billions) Real half of 2008 household balance sheets and credit conditions eroded significantly. Loan delinquencies ($ Chained 2000) Percent 2008* 2009** Change and defaults were at near historic levels. According to Moody's Economy.com, consumer spending is Gross Domestic Product 11,687.2 11,681.7 (0.0) % expected to continue falling through the early part of Consumption 8,284.5 8,213.1 (0.9) 2009. Spending growth is not likely to return until Durables 1,195.2 1,137.1 (4.9) mid-2009. However, growth is likely to be much Nondurables 2,390.1 2,352.2 (1.6) slower than usual as households attempt to rebuild Services 4,713.5 4,731.2 0.4 their balance sheets by increasing their rate of saving Investment 1,707.0 1,655.1 (3.0) in the aftermath of the financial crisis. Fixed 1,738.1 1,671.9 (3.8) Nonresidential Overall, real consumption growth is projected to Structures decrease 0.9 in 2009 compared to 0.4 percent increase Equipment in 2008. Since the last recession in 1991, consumer Residential spending has consistently increased at a more rapid Inventory Change Net Exports rate than disposable income. The result was that the Exports savings rate fell. The decline implied that most of the Imports spending growth over this period was driven by capital Government gains-andlor consumer credit. In the latter half of the Federal 1990s, the low savings rate did not appear to be a Defense severe problem because stock market investments Nondefense were not only sustaining, but enriching many State and Local households. However, the stock market correction in *Estimated 2000 ended this trend. Currently, the low savings rate **Forecasted combined with a high debt level indicates that many Source: US. Department of Commerce, Bureau of Economic consumer budgets are tight. However, the personal Analysis, and Moody's Economy.conz savings rate is expected to increase significantly from 1.6 percent in 2008 to 3.0 percent in 2009. Table 1-7 Consumption. The present recession is unique because of its unparalleled effect on consumer Table 1-7 spending. The disequilibrium in housing and U.S. Personal Consumption Expenditure Growth mortgage markets that underlie the current recession Percent Change, Seasonally Adjusted, 2008-2009 are significantly more widespread than previous Expenditures recessions. Real personal consumption expenditures " 2008 2009 fell 3.1 percent at an annual rate in the third quarter. Personal Consumption 0.4 % (0.9) % This was the first such decline since 1991, the sharpest Durables (3.8) (4.9) since 1980, and continues a period of weakening Motor Vehicles (13.2) (11.1) growth. As a result, spending is virtually unchanged Nondurables (0.1) (1.6) from a year ago, the worst result since 1991. Services 1.4 0.4 Retail Sales & Food Services 0.6 (1.9) The declines in spending were broadbased. Durable Ret. Sales & Food Less Autos 3.8 (0.5) goods spending dropped 14 percent, led by a 26 Bldg. Mat., Equip., & Supplies (3.9) (6.1) percent decline in spending on motor vehicles and General Merchandise 3.8 2.9 Food & Beverage Stores 5.1 3.9 parts. Reduced wealth, credit availability, and job Clothing & Accessories 1.1 (0.8) losses constrained consumer purchases of big-ticket Food Serv. & Drinking Places 3.4 2.5 items. In addition, real nondurable goods spending also fell sharply as consumers minimized purchases of Source: MooalykEcononly.com presents U.S. personal consumption expenditure business spending. Although there is expected to be growth estimates for 2008 and the forecasts for 2009. improvement in credit conditions by mid year, credit conditions are likely to be tighter than usual for longer, During the unprecedented economic expansion of the slowing a recovery in business investment. 1990s, a tight labor market and low inflation allowed consumers to realize significant gains in real Residential construction is experiencing its worst purchasing power. Now, however, those particular period since the Bureau of Census started recording circumstances are not present. The result is that real monthly data in January 1959. When adjusted for disposable income is expected to increase by 1.1 inflation, the residential fixed investment portion of percent in 2009, the same rate as in 2008. Real GDP declined another annualized 20 percent in the consumer spending growth is expected to decrease 0.9 third quarter of 2008 as compared with the second. in 2009 after a 0.4 percent increase in 2008. This This marks the tenth consecutive double-digit decline trend will be supported largely by a 0.4 percent in residential investment. This has resulted in a increase in services consumption. significant excess inventory of new homes in most markets. From peak to trough, Moody's Consumption of durables is expected to decrease by Economy.com expects the median existing house price 4.9 percent in 2009 compared to a 3.8 percent decrease to decline by about 30 percent. Although construction in 2008. Automobile purchases are expected to is expected to stabilize by the middle of 2009, decline 1 1.1 percent in 2009 compared to a 13.2 Moody's Economy.com suggests that it may take two percent drop in 2008. Expenditures for nondurable years before the housing market regains a semblance goods are forecasted to decrease 1.6 percent in 2009 of order. compared to a 0.1 percent decrease in 2008. However, expenditures for services are forecasted to increase by For 2009, real business investment spending is 0.4 percent in 2009 compared to a 1.4 percent increase expected to decrease to a 3.0 percent compared to a in 2008. 5.7 percent decline in 2008. Real fixed investment is expected to decrease 3.8 percent; nonresidential Retail sales and food services expenditures are investment is forecasted to decrease 2.7 percent; and expected to decrease 1.9 percent in 2009, while retail residential construction is expected to drop 7.2 percent sales and food excluding autos is expected to decrease in 2009. Within nonresidential investment, spending 0.5 percent. More specifically, expenditures for food on structures should fall 7.0 percent, while spending and beverage stores is expected to increase 3.9 on equipment should fall 1.8 percent. percent, while expenditures for general merchandise are expected to increase 2.9 percent, and expenditures International Trade. The impact of the economic for food services and drinking places are expected to and financial crisis is not limited to the U.S. Demand increase 2.5 percent in 2009. On the other hand, is contracting globally. In addition to the U.S., the expenditures for building materials, equipment, and European Union (E.U.) also began experiencing supplies is expected to decline 6.1 percent, while negative growth in the third quarter of 2008 with expenditures for retail sales and food services are consumer and business sentiment reaching low points. expected to decrease 1.9 percent, and expenditures for Eastern European and Baltic countries are clothing and accessories expenditures are expected to experiencing difficulties securing financing for their decrease 0.8 percent. sizeable budget deficits. Moreover, softening domestic demand and sluggish export demand in the Business Investment. Moody's Economy.com U.S. and the E.U. will constrain Asian and Latin expects that the contraction in business investment and American economies. In turn, slowing demand from profits will be about in line with past recessions. Asia and Latin America will dampen European exports Moody's Economy.com predicts that the financial and growth. crisis will lead to substantial declines in business investment through mid 2009. Tighter credit Real trade exports are expected to increase by 5.4 conditions and lower wealth are likely to reduce percent in 2009 compared to an 8.7 percent increase in consumer spending, which, combined with a higher 2008. Meanwhile, real trade imports are expected to cost of capital, are likely to continue to dampen increase 1.3 percent in 2009 compared to a 1.9 percent

9 decrease in 2008. Given these increases, the real trade percent. Rental income is expected to drop 11.7 deficit is likely to remain over $325.0 billion in 2009. percent. The median household income is expected to increase 2.1 percent to $52,783 in 2009. Table 1-8 Government Expenditures. The Congressional presents the categories of U.S. personal income growth Budget Office estimates that the federal budget deficit for 2008 and 2009. for fiscal year 2008, which ended on September 30, was a record $438 billion, $276 billion more than the Table 1-8 shortfall recorded in FY 2007. Relative to the size of U.S. Personal Income Growth, 2008-2009 the economy, that deficit was equal to 3.1 percent of (Dollars in Billioi?~) GDP, up from 1.2 percent in 2007. The average Percent deficit over the preceding five years, 2002-2006, was --2008" 2009"" Change 2.6 percent of GDP. The CBO estimates that receipts Median Household Income 51,716 52,783 2.1 % in FY 2008 were about $44 billion (or 1.7 percent) Personal Income 9,900 10,000 1.O below receipts in FY 2007, falling from 18.8 percent Disposable Income 8,700 8,800 1.1 of GDP in FY 2007 to about 17.7 percent of GDP in Dividends 840 864 2.9 FY 2008. Federal spending rose by about 8 percent. Interest 1,235 1,301 5.3 The recession, the stimulus package enacted earlier Rent 55 48 (11.7) this year, and continued strong growth in federal Personal Saving Rate 1.6 % 3.0 1.4 spending all contributed to the record deficit. * Estimated ** Forecasted Moody's Economy.com estimates that with the Source: U.S. Department of Connnerce, Bureazr of Economic Analysis recession, the Troubled Asset Relief Program, and a and Moody's Econon~y.co.com fiscal stimulus totaling about $300 billion, the federal government will see budget deficits of about $1 trillion Personal Savings. The rate of personal savings is in both FY 2009, which started on October 1, and FY expected to increase to a 3.0 percent rate in 2009. 2010. These deficits would amount to about 7 percent of GDP, the largest as a share of the economy since Inflation & Prices. One of the few positives to World War 11. Subsequently, the deficit will likely emerge from the financial crisis is energy, food, and contract in the near term as the economy recovers from other commodity prices. According to Moody's the recession and the financial crisis. However, over Economy.com, the total savings to households from the longer run, without a significant change in fiscal reduced food and energy costs could be as much as policy, increased spending on Social Security and $200 billion. Thus, inflation will continue to moderate Medicare payments as the population ages will lead to in 2009, but deflation is unlikely. ongoing budget deficits of at least 3 percent of GDP. Federal aid to the struggling auto industry would also According to the U.S. Energy Information add significantly to the budget deficit. Administration (EIA), the current U.S. and global economic downturn has led to a decrease in global In real terms, government expenditures are estimated energy demand and a rapid and substantial reduction to increase by 2.4 percent in 2009. Total federal in crude oil and other energy prices. According to government expenditures are estimated to increase by Moody's Economy.com this year's contraction in oil 3.7 percent. Specifically, national defense demand is proving to be the deepest since the early expenditures are expected to increase 3.5 percent, and 1980s. Several indicators suggest that the current non-defense expenditures are expected to increase by overall economic downturn will be the deepest since 4.1 percent. Real state and local government 1991. The recent announcement by the Organization expenditures are forecasted to increase 1.7 percent. of the Petroleum Exporting Countries (OPEC) to lower its production target by 1.5 million barrels per day Personal Income. In 2009, real personal income in (bblld), effective November 1, is aimed at offsetting the U.S. is forecasted to grow at a 1.0 percent rate. this lower oil demand and stabilizing prices at or Increases also are anticipated in personal interest above recent levels. Future price levels will primarily income at 5.3 percent, personal dividend income at 2.9 depend on the magnitude and duration of the economic percent, and disposable personal income at 1.1 downturn as well as OPEC and non-OPEC behavior. The condition of the global economy is expected to Table 1-9 remain the most important factor driving world oil U.S. Consumer Prices prices. The average price of West Texas Intermediate Percent Change, Seasonally Adjusted, 2008-2009 (WTI) crude oil is projected to be $63.50 in 2009. The average U.S. prices for regular-grade gasoline and Prices diesel fuel in 2009 are projected to be $2.37 and $2.73 2008 2009 per gallon, respectively. Residential heating oil prices GDP Chain Price Deflator 2.4 % 1.3 % during the current heating season (October though Consumer Price Index 4.3 1.8 March) are projected to average $2.75 per gallon, a Less Food & Energy 2.4 1.8 reduction of about 17 percent from the 2007-2008 Shelter 2.5 0.9 Food 3.o heating season. Residential propane prices are 5.4 Food Away fiom Home 4.2 2.5 projected to average $2.22 this winter, a decrease of 10 Medical Care 3.8 4.6 percent from last winter. Residential natural gas prices are projected to average $13.02 per thousand cubic Source: Moody's Econorny.com feet (Mcf), an increase of 2 percent from last winter. The impact of the economic downturn on demand is expects commodity prices to begin to rebound slowly also lowering current and expected natural gas prices. by the second half of 2009. More specifically, the The Henry Hub natural gas spot price is projected to core rate of inflation is expected to be 1.8 percent in average $6.82 per Mcf in 2009. 2009 compared to 4.3 percent in 2008. Medical care costs are expected to increase 4.6 percent, shelter costs As measured by the CPI-U, inflation is forecasted to are expected to increase 0.9 percent, food costs are be 1.8 percent. As measured by GDP Chain Price expected to increase 3.0 percent, while food away Deflator, it is expected to be 1.3 percent. Table 1-9 from home is expected to increase 2.5 percent presents price changes for 2008 and 2009 as measured compared to 4.2 percent in 2008. by the GDP Price Index. Productivity. Productivity, as measured by output per The core rate of inflation is expected to moderate hour, is expected to grow at a 2.5 percent rate in 2009, gradually during 2009. Moody's Economy.com compared to a 3.0 percent rate in 2008. Chapter 2

Kansas Employment & Income

Overview transfers are expected to increase by 10.8 percent, while the residence adjustment is expected to decrease Overall, as with the global and the U.S. economies, the by 5.2 percent. In 2009 personal income growth is Kansas economy is expected to experience a expected to slow even further to 3.2 percent, with significant down turn in 2009. However, the state's growth in wage and salary disbursements slowing to economic downturn is generally expected to be less 2.9 percent, contributions for social insurance is severe than the nation as a whole. After experiencing expected to slow to 2.4 percent, other labor income steady employment growth through most of 2007, growth slowing to 2.1. In 2009 employment by place manufacturing has been experiencing significant job of residence is expected to increase by 0.9 percent, losses since midyear. Significant job losses have been while employment by place of work is expected to experienced in the food manufacturing sector, which increase by only 0.5 percent. In 2009, the has been hit particularly hard by the sharp increases in unemployment rate is expected to increase to 4.7 energy prices experienced during the first half of the percent, up from 4.4 percent in 2008, however, this is year. Increasingly tight credit markets have had a still significantly below the 7.3 percent unemployment significant dampening effect on the housing market. rate forecast for the U.S. as a whole in 2009. With the possible exception of the Kansas City area, slowing residential construction has prevented a sharp From October 2007 to October 2008, non-farm salary increase in inventory levels, which has kept housing and wage employment reached 1,402,300 jobs, an prices relatively stable. Consumer spending has also increase of only 8,600 jobs since October 2007. Only begun to slow in response to modest wage growth and six of the eleven reporting industry sectors showed job limited access to credit, forcing retailers to limit their increases compared to a year ago. Primary contribu- payrolls. Gross state product (GSP) is forecast to tors to the increase include government which added increase by 3.5 percent, and personal income is 7,900 jobs; professional and technical services which expected to increase by 3.2 percent. Table 2-1 added 1,400 jobs; education and health services which presents major Kansas economic trends for 2008 and added 1,300 jobs; natural resources and mining which 2009. added 600 jobs, information services which added 400 jobs; and leisure and hospitality services which added Table 2-1 100 jobs. The state's unemployment rate rose from Major Kansas Economic Trends 3.7 percent in October 2007 to 4.5 percent in October 2008 2009 2007. GSP Growth ($ Constant) 3.5 % 3.5 % Personal Income Growth ($ Current) 4.2 3.2 From October 2007 through October 2008, annual Employment Growth Rate employment in the goods producing industries Place of Residence 0.5 0.9 decreased 0.4 percent, while employment in the Place of Work 0.6 0.5 services producing industries increased 0.8 percent. Unemployment Rate (Monthly Average) 4.4 4.7 Within the goods producing industries, natural Sozirce: Kansas Department of Labor, Labor Market bfornzation Services resources employment increased 6.6 percent, while manufacturing employment decreased 0.5 percent; and Personal income growth in 2008 slowed to 4.2 percent, construction employment decreased by 1.0 percent. with growth in wage and salary disbursements slowing Within the services producing industries, government to 3.5 percent, contributions for social insurance is employment increased 3.0 percent, information and expected to slow to 3.4 percent, other labor income professional and business services increased 1.0 growth slowing to 3.2 percent, dividend, interest, and percent each, education and health services increased rent growth slowing to 3.1 percent, and growth in 0.8 percent, leisure and hospitality services increased proprietors' income slowing to 1.7 percent. However, 0.1 percent. Employment in other services remained constant, while employment in financial activities City's Subprime Loan Report, although the area had a decreased 0.7 percent, and trade, transportation, and below average foreclosure rate compared to other utilities employment decreased 0.4 percent. Farm metropolitan areas, the area had a higher delinquency employment declined 2.7 percent in 2008. rate on subprime loans than the national average. The Report also found that existing Kansas City-area The Kansas economy has slowed due in large part to subprime loans were originated earlier than in other the overall downturn in manufacturing. In 2007, parts of the nation, that area borrows had lower manufacturing accounted for 13.5 percent of total average credit scores, and that area borrowers are employment in Kansas. Within the manufacturing paying above-average interest rates. industry, the transportation equipment manufacturing sector is significant because of the Wichita area's Another indication of the breadth of the impact of the focus on aircraft manufacturing and the Kansas City financial crisis is that three of the four companies area's focus on car and truck manufacturing. The chosen to manage a state-owned casino have transportation equipment manufacturing sector withdrawn their bids. Most recently, Kansas accounts for 27.5 percent of all of the state's Entertainment withdrew its plan for a $705 million manufacturing jobs. resort at the Kansas Speedway in Wyandotte County because of tight credit markets and a poor economy. The global credit crisis will have a significant negative Earlier a proposal by Harrah's Entertainment-Sumner impact on the state's durable goods manufacturers that Gaming and Resorts was withdrawn because of the will more than offset the positive effect of falling poor economy. Penn National Gaming withdrew its energy prices. Aerospace and machinery proposal for a facility in Cherokee County after losing manufacturers, which were responsible for much of the its bid to Harrah's for a facility in Sumner County state's growth in manufacturing employment over citing competition from a nearby Indian casino. The recent years, are likely to be the hardest hit. only project still scheduled to move forward at the Customers in these industries depend heavily on credit time this report was prepared is Butler National to finance purchases. The Federal Reserve's Senior Service Corporation of Olathe's proposal for an $87.5 Loan Officer Opinion Survey found that 84 percent of million casino in Dodge City, to be open as soon as the financial institutions tightened their commercial and latter half of 2009. industrial loan standards for large and medium-sized borrowers for the fourth quarter of 2008. In addition, a The state had expected that expanded gaming would slowing global economy and an appreciating dollar generate an additional $200 million in revenues. In will also have a dampening effect on the state's addition to four state-owned casinos, expanded exports. gaming provisions allowed for slot machines at dog and horse tracks. However, two racetracks could not Similarly, tightening mortgage lending standards will agree with the state over the division of proceeds. continue to dampen housing demand for much of the Park City's dog track closed after Sedgwick County year. However, the relatively low level of speculative voters rejected a gaming measure in 2007. residential construction in the state and more stringent credit standards has allowed most of the state to avert a On a more positive note, Kansas emerged as the major inventory accumulation. This is a major factor leading contender for a new $563 million federal as to why housing prices in most of the state have not biodefense lab. Federal officials recommended that fallen precipitously as they have in many other parts of the new National Bio and Agro-Defense Facility be the country. Nevertheless, housing prices are likely to located in Manhattan. If Manhattan is ultimately experience some decline over the next year and will selected for the facility, construction is expected to not cause a major reduction in consumer spending. bring up to 1,600 temporary jobs with a payroll of The traditionally conservative borrowing habits and about $183 million. The laboratory complex is practical saving habits of Kansans are likely to mediate expected to employ 250 to 350 and have a payroll up a sharp decline in consumer spending over the next to $30 million annually. Federal oEcials unanimously year. agreed that the Manhattan proposal "best met the purpose and need to site, construct and operate" the A possible exception is the Kansas City area, where laboratory complex. The facility will focus on according to the Federal Reserve Bank of Kansas livestock diseases and other threats to the nation's food supply. However, the selection will not be final and those who are not actively seeking work, are not until a senior official with the U.S. Department of considered to be part of the civilian labor force. The Homeland Security renders a decision. second compilation is based on employment by place of work. For this compilation, data are gathered from The Kansas agricultural sector produces a wide array information primarily obtained directly from firms as of products, with wheat, corn, sorghum, and soybeans part of the unemployment insurance program. Place as the main crops. Kansas is perennially the nation's of work data are further categorized by industry. largest wheat producer, harvesting nearly 400.0 million bushels of wheat per year, which is approximately 20.0 percent of the total U.S. wheat Employment by Place of Residence output. In addition to the significant contribution Kansas makes to the production of row crops, the state From October 2007 to October 2008, the Kansas is a large producer of livestock. More than 60.0 civilian labor force grew at a rate of 1.5 percent, with percent of the state's agricultural receipts are derived employment increasing 0.6 percent and unemployment from cattle production. rate increasing 0.9 percentage points from 3.6 percent to 4.5 percent. Table 2-2 presents Kansas over-the- According to the Annual Small Grain Summary, wheat year employment details for 2007 and 2008, by place production in 2008 was estimated at 356 million of residence. bushels or 25 percent above 2007. The final yield was Table 2-2 40 bushels per acre or seven bushels above 2007. Acreage harvested for grain was 8.9 million acres or Kansas Employment, by Place of Residence about 300,000 acres above 2007. The corn crop is October 2007-October 2008 forecasted to be 493 million bushels, down 5 percent Yo fiom 2007. Yield is forecasted to be 137 bushels per 2007 2008 Change acre, three bushels below 2007. Generally, the Place of Residence Data monthly average prices farmers received for wheat, Civilian Labor Force 1,474,864 1,497,596 1.5 % corn, sorghum, and soybeans were above last year's Employment 1,422,230 1,430,615 0.6 Unemployment 52,634 66,981 27.3 levels. Cattle sales have generally been up this year, Unemployment Rate 3.6 4.5 0.9 although placements are down from a year ago. Much Gce:KS Dept. of tabor, Labor Market Irgo. Servs. of the increase in corn prices and production are resulting fiom high fuel prices and speculation Figure 2-1 presents trends in the Kansas civilian labor regarding increased ethanol demand as an alternative force from 1977 through 2008. fuel. Because of these and other factors the value of farmland in Kansas surged in 2008. Although farm Figure 2-1 input costs increased significantly in 2008, farm debt Kansas Civilian Labor Force Growth ratios have also reached record lows. Overall, farm income in 2009 is expected to be significantly higher because of higher crops prices and higher demand for key crops.

Kansas Employment Review

Employment data are compiled in two ways: by place of residence and by place of work. The first compilation, employment by place of residence, is based on a sample survey of households. From the I Year I sample survey, the civilian labor force is determined. Once the civilian labor force is determined, then The relationship between labor force growth and the employment, unemployment, and the unemployment business cycle can be clearly observed in this graphic. rate are derived. Children, retirees, military personnel, There have been three recessions over the past 30 years: 1982, 1990, and 2000. The accompanying Employment by Place of Work declines in the civilian labor force can be clearly seen in these years. It is also noteworthy that the economic The classifications of employment by place of work slowdown in 2000 was relatively mild compared to the are goods producing industries, services producing ones in 1982 and 1990. A similar pattern can be seen industries, and farming. This section presents an in Kansas employment growth. Figure 2-2 presents overview of employment in the goods producing Kansas employment trends by place of residence fiom industries by subcategory. The next section presents 1978 through 2008. employment in the services producing industries followed by farming. Compared to October 2007, Figure 2-2 employment in Kansas, as measured by place of work, Kansas Employment Growth was 0.6 percent higher. Figure 2-4 presents Kansas (by Place of Residence) employment by place of work for 2007 and 2008. Figure 2-4 Employment by Place of Work Kansas, 2007-2008 1,410.0 1 1

1,310.0 4 ...... , 1 The unemployment rate is also based on the civilian Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec labor force. The unemployment rate in Kansas I Month increased from 3.6 percent in October 2007 to 4.5 percent in October 2008. The highest rate during the Table 2-3 presents Kansas employment details for last several decades occurred in 1982 when the 2007 and 2008, by place of work. unemployment rate reached 6.5 percent and then fell to 6.0 percent in 1983. Rates have not reached those Table 2-3 levels for quite some time; however, the low levels Kansas Employment, by Place of Work experienced in the late 1990s are not anticipated in the October 2007-October 2008 near fbture either. Figure 2-3 presents the Kansas Yo unemployment rate fiom 1978 through 2008. 2007 2008 Change Place of Work Data Total Nonfarm Total Private Kansas Unemployment Rate I I Goods Producing Natural Resources Construction Manufacturing Durable Goods Machinery Electrical Equipment Transp. Equip. Aerospace Product Non-Durable Goods

78 80 82 84 86 88 90 92 91 96 98 00 02 04 06 08 Food Manufacturing I Year I Animal Slaughtering Table 2-3 (cont'd) industries: natural resources, construction, and Kansas Employment, by Place of Work manufacturing. October 2007-October 2008 Yo Natural Resources & Mining. The natural resources 2007 2008 Change and mining super-sector is made up of two parts: the agriculture, forestry, fishing, and hunting sector, and Place of Work Data the mining sector. The agriculture, forestry, fishing, Service-Providing Ind. 1,130,800 1,140,400 0.8 % and hunting sector is establishments primarily engaged Private Service-Providing 866,400 868,100 0.2 Trade, Transp. & Util. 264,400 263,400 (0.4) in growing crops, raising animals, harvesting timber, Wholesale Trade 60,200 60,200 -- and harvesting fish or other animals fiom a farm, Retail Trade 148,800 148,900 0.1 ranch, or their natural habitats. The mining sector is Motor Vehicle 18,400 18,500 0.5 made up of establishments that extract naturally Grocery Stores 20,100 20,200 0.5 occurring mineral solids (coal and ores), liquid General Merchandise 35,000 35,700 2.0 minerals (crude petroleum), and gases (natural gas). Trans. Warehouse 55,400 54,300 (2.0) The term mining is used in the broad sense to include Utilities 7,400 7,200 (2.7) quarrying, well operations, beneficiating (e.g., Elec. Power Trans. 5,500 5,500 -- crushing, screening, washing, and flotation), and other Trans. & Wrhse. 48,000 47,100 (1.9) preparation that is customarily performed at the mine Truck Trans. 18,100 18,100 -- site, or as a part of mining activity. Growth in natural Information 40,100 40,500 1.0 resources and mining employment accelerating during Telecommunications 25,100 24,500 (2.4) the course of 2008 with employment levels remaining Financial Activities 74,400 73,900 (0.7) above 2007 levels for the entire year through October. Finance & Insurance 58,900 58,700 (0.3) From October 2007 through October 2008, natural Credit Interned. 28,100 28,000 (0.4) resources mining employment increased by 6.6 Insurance Carriers 24,800 25,000 0.8 percent. Figure 2-5 compares monthly employment in Real Estate 15,500 15,200 (1.9) natural resources for 2007 and 2008. Professional & Business 147,000 148,400 1.0 Prof. & Science 58,200 58,400 0.3 Figure 2-5 Mgrnt. of Companies 11,400 11,700 2.6 Natural Resources Employment Administrative 77,400 78,300 1.2 Kansas, 2007-2008 Ed. & Health Serv. 172,700 174,000 0.8 Health Care & Sew. 156,400 158,000 1.0 Hospitals 42,500 42,200 (0.7) Leisure & Hosp. 115,300 115,400 0.1 Arts & Entertainment 12,900 12,800 (0.8) Amuse./Gambling 10,400 10,600 1.9 Accommodation 102,400 102,600 0.2 Food Services 91,900 92,100 0.2 Other Services 52,500 52,500 -- Government 264,400 272,300 3.0 5.5 5.0 ,,.a.4L Federal 23,600 24,400 3.4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec State 55,800 56,200 0.7 Month Local 185,000 191,700 3.6 Farm Employment 62,600 64,300 2.7 I Construction. The construction sector includes Source: KS Dept. of Labor, Labor Market Info. Sen. establishments primarily engaged in the construction of buildings or engineering projects (e.g., highways Goods Producing Industries and utility systems). Establishments primarily ~ engaged in the preparation of sites for new As measured by place of work, employment in the construction and establishments primarily engaged in goods producing industries decreased 0.4 percent fiom subdividing land for sale as building sites also are October '2007 through October 2008. There are three included in this sector. Construction work done may general categories within the goods producing include new work, additions, alterations, or maintenance and repairs. Activities of these Figure 2-7 establishments generally are managed at a fixed place Manufacturing Employment of business, but they usually perform construction Kansas, 2007-2008 activities at multiple project sites. 188.0 . 1

Monthly construction employment levels began the year above 2007 levels but began slipping back below last year's levels by mid year and remained below 2007 levels through October. From October 2007 through October 2008, construction employment was down 1.0 percent. This particular industry sector is affected greatly by the seasons and the weather. For this reason, it is important to consider the inherent Jan Feb Mar Apr May Jun Jut Aug Sep Oct Nov Dec seasonal nature of the industry when analyzing Month construction employment changes. Figure 2-6 I I presents trends in construction employment in Kansas durable goods manufacturing employment were for 2007 and 2008. consistently above last year's levels through October, with the exception of significant labor disputes affecting several Wichita area aircraft manufacturers. Construction Employment Kansas, 2007-2008 Figure 2-8 presents the yearly trends in durable goods manufacturing employment, by month, for both 2007 and 2008.

Figure 2-8 Durable Goods Employment Kansas, 2007-2008 122.0 , 1

Jan Feb Mar Apr May Jun Jut Aug Sep Oct Nov Dec I Month I

Manufacturing. The manufacturing sector consists of establishments engaged in the mechanical, physical or chemical transformation of materials, substances or components into new products. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month Figure 2-7, at the top of the next column, presents trends in manufacturing employment for 2007 and Three important subcategories within the durable 2008. Monthly manufacturing employment began the goods manufacturing are machinery, electrical year well above 2007 levels, but fell back mid year equipment, and transportation equipment. Employ- below last year's levels and remained below 2007 ment in machinery manufacturing increased 4.5 levels through October. From October 2007 through percent, employment in electrical equipment manu- October 2008, manufacturing employment decreased facturing increased 2.4 percent, and employment in 0.5 percent. transportation equipment manufacturing increased by 2.1 percent. From October 2007 to October 2008, durable goods manufacturing employment increased by 1-2 percent. The dynamics of aircraft and parts manufacturing Durable goods are defined as goods with an expected employment in the Wichita metropolitan area are of economy. As shown in Figure 2-9, monthly transpor- 1gu-G L- I u tation equipment manufacturing employment was I Nondurable Goods Employment general above 2007 levels through October, with the Kansas, 2007-2008 exception of a series of labor disputes affecting I ,*: Wichita area aircraft manufacturers. Figure 2-9 Transportation Equipment Employment Kansas, 2007-2008 53.0

52.0

63.5 ...... Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month I

Within nondurable goods manufacturing, the food manufacturing sector accounts for nearly 50.0 percent 45.0 ...... Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec of employment in Kansas. Food manufacturing Month employment decreased 3.1 percent over this period. Monthly food manufacturing employment has dropped significantly since March and remained will below Employment trends in transportation equipment, a sub- 2007 levels through October. Within food manu- component of durable goods manufacturing, are facturing, animal slaughtering employment actually important for four reasons. First, transportation equip- decreased by 5.8 percent. Figure 2-1 1 presents trends ment manufacturing is a major exporting sub-sector in food and kindred products employment in Kansas within the Kansas economy. Second, aircraft and re- for 2007 and 2008. lated parts manufacturing is a major subcategory of the transportation equipment manufacturing sub-sector. Figure 2-1 1 Third, the Wichita metropolitan area's economy is driven largely by aircraft-related manufacturing. Food Manufacturing Employment Kansas, 2007-2008 Fourth, the Kansas manufacturing industry is driven to a. considerable extent by the Wichita metropolitan area's manufacturing employment. For these reasons, employment changes in transportation equipment manufacturing have a potentially significant effect on the Kgsas economy. Employment in aerospace products manufacturing rose by 3.8 percent in 2007.

Nondurable goods are defined as goods with an expected useful life of less than one year. Although -- ...... monthly employment in nondurable goods manu- I Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov ~ec1 facturing began the year above 2007, nondurable I Month I manufacturing employment has dropped significantly since March and remained will below 2007 levels through October. Much of the job loss may be Services Producing Industries attributed to losses in animal slaughtering employment. From October 2007 to October 2008, The second broad classification of employment by employment in nondurable goods decreased by 3.4 place of work is the services producing industries. percent. Figure 2-10, in the next column, shows Employment in the services producing industries grew nondurable goods manufacturing employment for at a 0.8 percent rate in 2008. There are eight major 2007 and 2008. categories within the services producing industries. They include trade, transportation, and utilities; treatment, and disposal of waste through sewer information; finance; professional and technical systems and sewage treatment facilities. services; educational and health services; leisure and hospitality services; other services; and government. Employment in trade, transportation, and utilities In 2007, only five of the eight major categories decreased 0.4 percent from October 2007 to October experienced increases in employment, while two 2008. Monthly employment began the year above experienced decreases, and one remained unchanged. 2007 levels, but since mid-year trade, transportation, and utilities employment has drifted below last year's Trade, Transportation, & Utilities. The trade super- levels through October. Trends in trade, transportation sector includes the wholesale and the retail trade and public utilities employment for 2007 and 2008 are sectors. The wholesale trade sector is made up of presented in Figure 2-12. establishments engaged in wholesaling merchandise, Figure 2-12 generally without transformation, and rendering services incidental to the sale of merchandise. Trade, Transportation & Utilities Wholesalers are organized to sell or arrange the Employment purchase or sale of (1) goods for resale (i.e., goods sold to other wholesalers or retailers), (2) capital or durable non-consumer goods, and (3) raw and intermediate materials and supplies used in production. Wholesalers sell merchandise to other businesses and normally operate from a warehouse or office.

The retail trade sector consists of establishments engaged in retailin'g merchandise, generally without transformation, and rendering services incidental to the I ^ * I I I,., h I ._ 0 I Lk sale of merchandise. The retailing process is the final Month step in the distribution of merchandise. Retailers are, therefore, organized to sell merchandise in small Within the trade, transportation, and utilities category, quantities to the general public. Two main types of there are four subcategories. These categories include retailers exist: store and non-store retailers. utilities; transportation and warehousing; wholesale trade; and retail trade. Monthly employment began The transportation and warehousing sector includes the year above 2007 levels, but since mid-year utilities industries that provide transportation of passengers and employment has drifted below last year's levels cargo, warehousing and storage for goods, scenic and through October. From October 2007 to October 2008 sightseeing transportation, and support activities transportation and warehousing employment decreased related to modes of transportation. Establishments in 2.7 percent. Figure 2-13 presents trends in utilities these industries use transportation equipment or employment in 2007 and 2008. transportation-related facilities as a productive asset. The type of equipment used depends on the mode of Fime 2-13 transportation. The modes of transportation are air, Utilities Employment rail, water, road, and pipeline. Kansas, 2007-2008 ' 7.6 The utilities sector consists of establishments engaged I in providing utility services, specifically electric power, natural gas, steam supply, water supply, and sewage removal. Within this sector, the specific activities associated with the utility services provided vary by utility. Electric power includes generation, transmission, and distribution; natural gas includes distribution; steam supply includes provision andlor I distribution; water supply includes treatment and Ian Feb Mar Apr May lun Jul Aug Sep Oct Nov Dec distribution; and sewage removal includes collection, I , , - , Month Monthly employment in transportation and warehous- employment during 2007 and 2008 .are shown in ing began the year above last year's levels, but since Figure 2- 16. mid-year employment has dropped below last year's levels through October. From October 2007 to Octo- Figure 2- 16 ber 2008 transportation and warehousing employment decreased 1.9 percent. Figure 2-14 presents trends in Kansas, 2007-2008 156.0 transportation and warehousing employment in 2007 154.0 and 2008. 152.0 - Figure 2- 14 , Transport. & Warehousing Employment Kansas, 2007-2008 48.5 142.0 - 140.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month

Information. The information sector includes establishments that are engaged in the following processes: (1) producing and distributing information 3..,.L. and cultural products, (2) providing the means to Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dffi Month transmit or distribute these products, as well as data or communications, and (3) processing data. The first major component of this sector is the publishing Monthly wholesale trade employment was near 2007 industry, which includes software publishing, levels for most of the year through October. From traditional publishing, and publishing exclusively on October 2007 to October 2008, wholesale trade the Internet. The second major component is motion employment was unchanged. Trends in wholesale picture and. sound recording. The third is trade employment for both 2007 and 2008 are shown broadcasting, which includes traditional broadcasting, in Figure 2- 15. as well as broadcasting exclusively over the Internet. Telecommunications also is a component of this sector, as are Internet service providers and web Wholesale Trade Employment search portals, data processing industries, and the I Kansas. 2007-2008 I information services industries. Although information employment levels were below 2007 levels for most of the year, information employment in October 2008 was 1.0 percent above that in October 2007. However, within that category, telecommunications employment actually decreased by 2.4 percent over that same time. Figure 2-17, on the following page, shows the 2007 and 2008 trends for information employment.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Financial Activities. The financial activities super- Month sector is made up of two parts: the finance and insurance sector, and the real estate and rental and Monthly retail trade employment levels were near leasing sector. The finance and insurance sector 2007 levels for most of the year through October. consists of establishments primarily engaged in Monthly retail trade employment levels remained financial transactions (transactions involving the above 2006 levels for the entire year. From October creation, liquidation, or change in ownership of 2007 to October 2008, retail trade employment financial assets) and/or in facilitating financial increased 0.1 percent. Trends in retail trade transactions. Three principal types of activities are Figure 2-17 Figure 2-1 8 Information Employment Financial Activities Employment Kansas, 2007-2008 Kansas, 2007-2008 755 ,

75.0 - 4 # - ,

72.0 a,,L, Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jw Jut Aug Sep Oct Nov Dec I Month I Month identified: (1) raising funds by taking deposits and/or parts: the professional, scientific, and technical ser- issuing securities and, in the process, incurring vices sector; the management of companies and enter- liabilities; (2) pooling of risk by underwriting prises sector; and the administrative/support and waste insurance and annuities; and (3) providing specialized managementlremediation services sector. The profes- services that facilitate or support financial sional, scientific, and technical services sector consists intermediation, insurance, and employee benefit of establishments that specialize in performing profes- programs. The real estate and rental and leasing sector sional, scientific, and technical activities for others. consists of establishments primarily engaged in These establishments perform activities that include: renting, leasing, or otherwise allowing the use of legal advice and representation; veterinarian services; tangible or intangible assets, and those that provide accounting, bookkeeping, and payroll services; as well related services. as architectural, engineering, and specialized design services. Also included in the professional, scientific, The major portion of this sector is made up of and technical services sector are enterprises that establishments that rent, lease, or otherwise allow the provide services related to computers, consulting, use of their own assets by others. This sector also research, advertising, photography, translation, and includes establishments primarily engaged in interpretation. The sector that is entitled management managing real estate for others, selling, renting andlor of enterprises includes establishments that hold the buying real estate for others, and appraising real estate. securities of, or other equity interests in, enterprises The main components of this sector are the real estate for the purpose of owning a controlling interest or lessors industries; equipment lessors industries, influencing management decisions, as well as including motor vehicles, computers, and consumer establishments that administer sections of the goods; and lessors of non-financial intangible assets, enterprise that normally undertake the strategic or except copyrighted works. organizational planning and decision making role. Government is not included in this sector. From October 2007 to October 2008, employment in financial activities decreased by 0.7 percent. Within The administrativelsupport and waste management1 this category insurance employment increased 0.8 remediation services sector is made up of percent, credit intermediation employment decreased establishments that perform routine support activities 0.4 percent, and real estate employment decreased by for the day-to-day operations of other organizations. 1.9 percent. As shown in Figure 2-18 in the next These essential activities are often undertaken in- column, financial activities employment began the house in many sectors of the economy. Activities year above 2007 levels, but has been below last year's performed include office administration, hiring and levels since March. placing personnel, as well as document preparation and similar clerical services. It also includes Professional & Business Services. The professional solicitation, collection, security and surveillance, and technical services super-sector is made up of three cleaning, and waste disposal. Although employment levels have drifted downward Within this category, employment in health care and since mid year, professional and business services social assistance increased by 1.0 percent, while employment remained above 2007 levels for the entire employment in hospitals decreased by 0.7 percent. year. The result was a year-over-year increase of 1.0 Figure 2-20 presents trends in educational and health percent. Within this category, employment in the services employment for 2007 and 2008. management of companies and enterprises increased Fime 2-20 2.6 percent, while employment in administrative and support services increased 1.2 percent, while Educ. & Health Services Employment employment in professional, scientific, and technical Kansas, 2007-2008 services increased 0.3 percent. Figure 2-19 presents trends in professional and business services employment for 2007 and 2008. Figure 2- 19 Prof. & Bus. Services Employment Kansas, 2007-2008 152.0 , I

.-.~ , ...... Jan Feb Mar Apr May kn Jul Aug Sep Oct Nov Dec I Month

Leisure & Hospitality Services. The leisure and hospitality super-sector is made up of two parts: the

134.0 arts, entertainment, and recreation sector, and the 132.0 . , . accommodation and food services sector. The arts, Jan Feb Mar Apr May Jun lul Aug Sep Oct Nov Dec entertainment, and recreation sector includes a range Month of establishments that operate facilities or provide services to meet varied cultural, entertainment, and Educational & Health Services. The education and recreational interests. This sector includes establish- health services super-sector is made up of two parts: ments that are involved in producing, promoting, or the educational services sector and the health care and participating in live performances, events, or exhibits social assistance sector. Only privately-owned intended for public viewing; establishments that establishments are included here because publicly- preserve and exhibit objects and sites of historical, owned establishments that provide education or health cultural, or educational interest; and establishments services are included in government. The educational that operate facilities or provide services that enable services sector is made up of establishments that patrons to participate in recreational activities or provide instruction and training in a variety of pursue amusement, hobby, and leisure-time interests. subjects. This instruction and training is provided by The accommodation and food services sector consists specialized institutions, such as schools, colleges, of establishments that provide customers with lodging universities, and training centers. The health care and and may prepare meals, snacks, and beverages for social assistance sector is made up of establishments immediate consumption. The sector includes both that provide health care and social assistance for accommodation and food services establishments individuals. The industries in this sector are arranged because the two activities are often combined at the on a continuum starting with those that provide same establishment. medical care exclusively, continuing with those that provide health care and social assistance, and finally In 2008, employment in leisure and hospitality those that provide only social assistance. services remained near 2007 levels. From October 2007 to October 2008 industry employment was up Education and health services employment remained 0.1 percent. Within that sector, employment in above 2007 levels for most of the year. The result was accommodation and food services increased 0.2, while an overall 0.8 percent gain compared to a year ago. employment in arts, entertainment, and recreation I 1 decreased 0.8 percent. Figure 2-21 presents trends in dropped below last year's levels for much of the year, leisure and hospitality employment for 2007 and 2008. but rebounded to match last year's level by October. I Figure 2-2 1 Government. The government sector is made up of Leisure & Hospitality Employment publicly-owned establishments. This sector includes Kansas, 2007-2008 federal, state, and local government agencies that 1 122.0 I , I I administer, oversee, and manage public programs and have executive, legislative, or judicial authority over other institutions. These agencies also set policy, create laws, adjudicate civil and criminal legal cases, and provide for public safety and national defense. Public schools and public hospitals are included in -. - - government. Figure 2-23 prese:nts trends in 2008 ' '2007 106.0 - government employment for 2007 and 2008. 104.0 102.0 Figure 2-23 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month Government Employment Kansas, 2007-2008 280.0

Other Services. The other services sector consists of 270.0 establishments engaged in providing services not specifically provided for elsewhere in the North 260.0 -0 American Industry Classification System. Establish- , ments in this sector are primarily engaged in a~tivities, *. such as equipment and machinery repair; promoting or I I 2007 administering religious activities; grant making; I I ' LA"." advocacy; and providing dry cleaning and laundry 210.0 . . . , . , . , . , , services, personal care services, death care services, Jan Feb Mar Apr May Jun kl Aus Sep Oct Nov Dec pet care services, photofinishing services, temporary Month parking services, and dating services. Figure 2-22 I presents other services employment trends for 2007 and 2008. Total government employment (civilian only) in Kansas increased by 3.0 percent from October 2007 to Figure 2-22 October 2008. Local government employment Other Services Employment increased 3.6 percent, while federal government Kansas, 2007-2008 employment increased 3.4 percent, and state 1 government employment in Kansas increased 0.7 percent. Overall government employment in 2008 was above 2007 levels for most of the year through October. A reduction in government employment typically occurs each summer and is attributable largely to the fact that faculty at public schools and universities are on nine-month appointments.

. L 3 > 5 4 !-8 < ,--rt Farming Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month Farm employment began the year below 2007 levels, but since mid-year has been running above last year's From October 2007 to October 2008, employment in levels through October. Thus, compared to October of other services remained unchanged. Other services 2007, farm employment was up 2.7 percent in 2008. employment began the year above 2007 levels, Much of the variation in farm employment during the year is due to the inherently seasonal nature of the The information in earlier sections is based on data industry. Figure 2-24 presents farm employment from the Kansas Department of Labor, Labor Market trends for 2007 and 2008. Information Services, while the information in this section is based on data from the U.S. Department of Figure 2-24 Labor, Bureau of Labor Statistics. In all cases, this Farm Employment report presents the most recent data available. Table Kansas, 2007-2008 2-4 below presents employment growth rates for Kansas and the Plains region from 2006 to 2007. The Plains region encompasses seven states, including Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota. Table 2-5, on the following page, shows employment growth rates for Kansas and the Plains region from October 2007 to October 2008.

Employment by Industry Type Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month Total non-farm employment in Kansas increased at a rate of 1.9 percent in 2007, compared to a 1.0 percent growth rate for the Plains region as a whole. South comparative Employment in the Dakota experienced the highest rate of increase at 2.0 Plains Region percent, followed by Kansas at 1.9 percent, and Nebraska at 1.7 percent. The employment data presented in this section may not be in exact conformity with data presented earlier From October 2007 to October 2008, total non-farm because the data are compiled from different sources. employment in Kansas increased at a 0.6 percent rate

Table- .-. -2-4 . Plains Region Employment Growth Rates, 2006-2007 Percent Change KS IA MN MO NE ND SD Plains Total Nonfarm 1.9 % 0.9 % 0.5 % 0.8 % 1.7 % 1.6 % 2.0 % 1.0 % Natural Resources & Mining 5.8 (4.5) (1.7) 5.6 NA 8.5 NA 3.7 Construction 1.6 (2.6) (5.5) -- NA 3.2 NA (1.7) Construction & Mining 2.1 (2.6) (5.3) 0.2 4.3 4.3 1.3 (0.7) Manufacturing 1.5 (0.7) (1.3) (2.4) (0.2) -- 1.O (0.8) Durable Goods 2.9 (0.9) (1.7) (3.7) 0.6 (0.6) NA (1.2) Non-Durable Goods (0.9) (0.3) (0.5) (0.3) (1.0) 1.2 NA (0.5) Trade, Transportation, & Utilities 1.3 0.1 0.3 0.8 2.0 0.4 1.9 0.8 Wholesale Trade 1.3 0.4 0.1 1.8 (0.2) 1.6 1.6 0.8 Retail Trade 0.7 (0.6) 0.2 0.1 1.2 (0.2) 2.0 0.3 Transportation & Utilities 3.0 1.6 0.9 1.5 5.1 1.4 1.6 2.1 Information 2.5 1.5 0.2 0.6 (1 .o) 1.3 4.3 1.O Financial Activities 2.5 2.1 (0.7) 1.3 3.4 3.1 4.4 1.4 Professional & Business Services 4.3 3.1 1.6 1.8 2.6 4.2 7.4 2.5 Educational & Health Services 2.8 1.7 4.6 1.8 1.3 2.2 2.6 2.7 Leisure & Hospitality 0.7 1.9 1.1 1.1 1.7 3.8 0.7 1.3 Other Services 0.6 1.6 (1.4) 0.3 1.2 1.3 1.3 0.2 Government 1.2 1.1 (0-3) 1.3 1.O 0.1 0.4 0.8 Federal (6-9) 1.1 -- 1.3 (1.9) (3.0) -- (0.9) State 0.7 1.6 1.5 1.0 2.3 1.3 -- 1.3 Local 2.6 1.O (1.0) 1.5 1.1 (0.2) 0.6 0.8 Source: US. Department oflabor, Bureau of Labor Statistics

24 Plains Region Employment Growth Rates, October 2007-October 2008 Percent Change KS LA MN MO NE ND SD Plains Total Nonfann 0.6 % 0.4 % (0.6) % (0.5) % 0.7 % 1.2 % 1.2 % -- % Construction & Mining (0.1) (1.1) (5.1) (2.5) 1.O 4.6 1.2 (1.8) Manufacturing (0.5) (1.2) (2.7) (3.6) (1.3) (0.8) 2.6 (2.0) Trade, Transportation, & Utilities (0.4) 0.6 (0.8) (0.3) (0.5) 2.2 (0.2) (0.2) Information 1.O 0.6 (2.3) (1.9) (3.1) (1.3) (1.4) (1.2) Financial Activities (0.7) 0.2 1.6 (2.4) 2.8 (0.5) 1.6 0.1 Professional & Business Services 1.0 (0.1) (2.2) (0.1) 2.6 1.7 1.5 (0.3) Educational & Health Services 0.8 1.7 1.6 1.9 2.8 1.O 3.8 1.8 Leisure & Hospitality Services 0.1 1.2 (0.3) (1.1) 1.6 0.3 0.7 (0.1) Other Services -- (0.2) (1.1) (0.9) 0.3 2.0 (0.6) (0.5) Government 3.0 1.1 1.O 0.8 (0.4) 0.8 0.5 1.1 I Source: US.Department of Labor, Bureau of Labor Statistics compared to no change for the Plains region as a and North Dakota with no change in manufacturing whole. North Dakota and South Dakota had the employment. From October 2007 to October 2008, highest growth rate in the region at 1.2 percent, manufacturing employment in the region decreased followed by Nebraska at 0.7 percent. Changes in 2.0 percent. South Dakota led the region with a 2.6 Kansas employment that were greater than the regional percent increase, followed by Kansas with a 0.5 average include: government with a 3.0 percent percent decrease, and North Dakota with a 0.8 percent increase; information and professional and business decrease. services with 1.0 percent increases each; leisure and hospitality services with a 0.1 percent increase; other Trade, Transportation, & Utilities. In 2007, trade, services which remained unchanged; construction and transportation, and utilities employment increased by mining with a 0.1 percent decrease; and manufacturing 0.8 percent in the region. Nebraska recorded the with a 0.5 percent decrease. Industries in Kansas that largest employment increase at 2.0 percent, followed realized employment changes below the regional by South Dakota at 1.9 percent, and Kansas at 1.3 average include education and health services with a percent. From October 2007 to October 2008, trade, 0.8 percent increase, trade, transportation, and utilities transportation, and utilities employment growth in the with a 0.4 percent decrease, and financial activities region decreased by 0.2 percent. North Dakota led the with a 0.7 percent decrease. seven-state region with a 2.2 percent growth rate, followed by Iowa with a 0.6 percent growth rate, and Construction & Mining. Construction and mining South Dakota with a 0.2 percent decrease. Kansas employment in the Plains region decreased 0.7 percent ranked fifth in the region with a 0.4 percent decrease. in 2007. Nebraska and North Dakota led the region with 4.3 percent increases each, followed by Kansas Information. In 2007, information employment in the with a 2.1 percent increase. From October 2007 to Plains region increased by 1.0 percent. South Dakota October 2008, construction and mining employment in led the region with a 4.3 percent increase, followed by the Plains region decreased by 1.8 percent. North Kansas with a 2.5 percent decrease, and Iowa with a Dakota led the region with a 4.6 percent increase, 1.5 percent increase. Between October 2007 and followed by South Dakota with a 1.2 percent increase, October 2008, information employment in the Plains Nebraska with a 1.0 percent increase, and Kansas with region decreased by 1.2 percent. Kansas led the a 0.1 percent decrease. region with a 1.0 percent increase, followed by Iowa I with a 0.6 percent increase, and North Dakota with a ~ Manufacturing. Manufacturing employment in the 1.3 percent decrease. Plains region decreased by 0.8 percent in 2007. I Kansas led the region with a 1.5 percent increase, Financial Activities. In 2007, financial activities followed by South Dakota with a 1.0 percent increase, employment grew at a 1.4 percent rate across the region as a whole. South Dakota led the region with a Other Services. Other services employment 4.4 percent growth rate, followed by Nebraska with a increased at a 0.2 percent rate in the Plains region in 3.4 percent growth rate, North Dakota with a 3.1 2007. Iowa led the region in other services percent growth rate, and Kansas with a 2.5 percent employment growth with a 1.6 percent increase, growth rate. Between October 2007 and October followed by North Dakota and South Dakota with 1.3 2008, financial activities employment in the Plains percent increases each. Kansas ranked fifth in the region grew at a 0.1 percent rate. Nebraska led the seven-state region with a 0.6 percent increase. region with 2.8 percent growth rate, followed by Between October 2007 and October 2008, the region Minnesota and South Dakota with 1.6 percent growth as a whole experienced 0.5 percent decrease in other rates each. Kansas ranked sixth in the seven-state services employment. North Dakota led the region region with a 0.7 percent decrease. with 2.0 percent growth, followed by Nebraska with 0.3 percent growth, and Kansas with no change in Professional & Business Services. Professional and other services employment. business services employment increased by 2.5 percent in the region as a whole in 2007. South Dakota led the Government. Government employment in the Plains region with 7.4 percent growth, followed by Kansas region increased 0.8 percent in 2007. Missouri led the with 4.3 percent growth, and North Dakota with 4.2 region with a 1.3 percent growth rate, followed by percent growth. Between October 2007 and October Kansas with a 1.2 percent growth rate, and Iowa with a 2008, the region as a whole experienced a 0.3 percent 1.1 percent growth rate. Between October 2007 and decrease in employment in this category. Nebraska October 2008, government employment in the Plains led the region with 2.6 percent growth, followed by region increased by 1.1 percent. Kansas led the region North Dakota with 1.7 percent growth, South Dakota with a 3.0 percent increase, followed by Iowa with a with 1.5 percent growth, and Kansas with 1.0 percent 1.1 percent increase, and Minnesota with a 1.0 percent growth. increase.

Educational & Health Services. Educational and health services employment in the Plains region as a whole increased 2.7 percent in 2007. Minnesota led Kansas Personal Income Review the region with a 4.6 percent growth rate, followed by Kansas with a 2.8 percent growth rate, and South Personal income is defined as the income received by, Dakota with 2.6 percent growth. Between October or on behalf of, all residents. It consists of income 2007 and October 2008, the region as a whole from all sources received by persons, which includes experienced a 1.8 percent growth rate in educational participation in production, both government and and health services employment. South Dakota led the business transfer payments, and government interest, region with 3.8 percent growth, followed by Nebraska which is treated as a transfer payment. "Persons" is with 2.8 percent growth, and Missouri with 1.9 percent defined as individuals, nonprofit institutions primarily growth each. Kansas ranked last in the seven-state serving individuals, private noninsured welfare funds, region with 0.8 percent growth. and private trust funds.

Leisure & Hospitality Services. In 2007, leisure and Personal income is calculated by summing its hospitality services employment in the Plains region as components, which include salaries and wages, other a whole increased at a 1.3 percent rate. North Dakota labor income, proprietors' income, personal rental experienced the highest growth at 3.8 percent, income, personal dividend income, personal interest followed by Iowa with 1.9 percent growth, and income, and personal transfer payments, less personal Nebraska with 1.7 percent growth. Between October contributions for social insurance. 2007 and October 2008, leisure and hospitality services employment decreased by 0.1 percent in the A lag of eight months occurs before final estimates of region. Nebraska recorded the highest growth at 1.6 state personal income for the previous calendar year percent, followed by Iowa with a 1.2 percent growth are released. Accordingly, 2007 estimates of Kansas rate, and South Dakota with 0.7 percent growth. personal income were not available until August 2008. Kansas ranked fifth in the seven-state region with a 0.1 Kansas personal income totaled $101.3 billion in percent increase. 2007, which is a 6.3 percent increase over 2006. Personal Income by Source care and social assistance services at 6.6 percent, arts, entertainment, and recreation at 5.5 percent, Salaries and wages accounted for over half of Kansas accommodation and food services at 2.0 percent, and personal income and increased at a 6.1 percent rate in other services at 7.2 percent in 2007. In the 2007. The second largest source of personal income in government sector, earnings grew at a 6.7 percent rate Kansas is dividends, interest, and rent. Dividends, in 2007. Within total government, civilian federal interest, and rent increased by 6.9 percent. Other labor government earnings decreased 1.2 percent, military income increased 3.7 percent in 2007. This category earnings grew by 17.1 percent, and state and local consists largely of employer payments for health government earnings increased 6.1 percent. Appendix insurance and other benefits. Other labor income A presents a breakdown of Kansas personal income reached a level of approximately $13.2 billion in 2007, and growth rates by industry for 2006 and 2007. indicating the importance of fringe benefits in personal income growth. Proprietors' income increased 10.9 percent in 2007. Specifically, farm proprietors' income rose by 267.7 percent in 2007, while non-farm Kansas Personal Income Estimates proprietors' income increased 8.3 percent. Transfers increased at a 5.5 percent rate in 2007, while personal Personal income in Kansas is estimated to have grown contributions for social insurance increased 4.3 by 4.2 percent in 2008. Table 2-6, at the top of the percent. A significant portion of Kansas personal next page, presents Kansas personal income in 2007. income is paid to Kansans from out-of-state sources. In addition, the table shows the estimates for 2008 and This portion is particularly noticeable for residents the forecasts for 2009. who live in Johnson and Wyandotte Counties and work in Missouri. This significance is reflected in the In 2008, salaries and wages, which are the largest residence adjustment of $867.6 million, which component of Kansas personal income, are estimated increased by 6.4 percent in 2007. to have increased 3.5 percent, while other labor income increased 3.2 percent, and overall proprietors' income increased 1.7 percent. Specifically, farm Nonfarm Earnings by Industry proprietors' income decreased by 92.6 percent, while non-farm proprietors' income increased 5.0 percent. Increases in earnings were realized in a number of During the same time frame, dividends, interest, and industries in 2007. S~ecificall~Y and rent increased by 3.1 percent, and transfer payments related activities earnings increased 8.3 percent in increased by 10.8 percent. Finally, the residence 2007, while mining earnings increased 13.2 percent adjustment for income earned by Kansas residents and earnings increased 8'4 percent' Earnings from sources outside the state decreased 5.2 percent. from construction increased 3.3 percent and manufacturing earnings increased 2.6 percent in 2007. For 2009, Kansas personal income is forecasted to Specifically, durable goods manufacturing earnings grow at a 3.2 percent rate. Growth in salaries and increased 4.3 percent, while nondurable goods wages is expected to slow to 2.9 percent, while other manufacturing earnings increased 0.2 percent. labor income growth is expected to slow to 2.1 Wholesale trade earnings increased 6.6 percent, while percent. Proprietors' income growth is expected to retail trade earnings increased 3.3 percent. increase 5.3 percent, while growth in dividends, Transportation and warehousing earnings increased 4.9 interest, and rent is expected to increase 3.9 percent. percent. Transfer payments are expected to grow at a 2.9 In 2007, the only decrease in earnings in the services percent rate in 2009. industries was realized in real estate and rental and leasing which decreased 0.7 percent. Increases were realized in professional and technical services at 6.7 percent, management of companies and enterprises at Comparative Personal Income 23.5 percent, administrative and waste services at 8.9 percent, and educational services at 7.9 percent. In 2007, personal income growth in Kansas at 6.3 Increases also were realized in earnings from health percent was lower than the growth that occurred in the Table 2-6 Kansas Personal Income 2007 Actual, 2008 Estimate & 2009 Forecast (Dollars in Millions) 2007 2008 2009 Percent Change Actual Estimate Forecast 2007-2008 2008-2009 Salaries & Wages Disbursements $ 54,245 $ 56,155 $57,785 3.5 % 2.9 % Other Labor Income 13,227 13,655 13,939 3.2 2.1 Proprietors' Income: 9,769 9,937 10,467 1.7 5.3 Farm 326 24 34 (92.6) 41.7 Nonfam 9,443 9,913 10,433 5.0 5.2 Dividends, Interest, & Rent 17,237 17,767 18,455 3.1 3.9 Transfers 14,326 15,878 16,346 10.8 2.9 Residence Adjustment 868 823 807 (5.2) (1.9) Less: Social Insurance 8,396 8,685 8,892 3.4 2.4 Total Personal Income 101,276 105,530 108,907 4.2 3.2

Plains region at 6.6 percent, but higher than that of the Iowa ranked 13th at 7.0 percent, Minnesota ranked U.S. at 6.0 percent. Within the Plains region, North 20th at 6.3 percent, and Missouri ranked 35th at 5.4 Dakota was the fastest growing state in the nation with percent. 12.0 percent growth, followed by South Dakota, the second fastest growing state in the nation, with 11.7 Per Capita Personal Income. In 2007, the Plains percent growth, and Nebraska, the ninth fastest region's average per capita personal income at growing state, with 7.3 percent growth. Appendix B $36,587 lagged behind the national average of presents a listing of comparative state personal income $38,564, and was ranked fourth out of the eight and per capita personal income data for all states for regions. The New England region had the highest per 2005 through 2007. capita personal income of $47,256, followed by the Mideast region at $45,120, and the Far West region at In 2007, Kansas per capita personal income growth at $40,854. 5.6 percent was lower than that of the Plains region at 5.9 percent, but higher than that of the U.S. at 5.0 In 2007, Kansas ranked 24th in the U.S. in per capita percent. Again, North Dakota led the nation and the personal income at $36,483. The Plains region state Plains region with an 11.7 percent increase in per that ranked highest nationally was Minnesota's 13th capita personal income, followed by South Dakota, place with a dollar value of $40,969. After Kansas, which was second in the nation and the region with a Nebraska was ranked 26th at $36,189, North Dakota 10.6 percent increase, followed by Nebraska, which was ranked 27th at $35,955, South Dakota was 29th at was eighth in the nation with a 6.6 percent increase. $35,664, Iowa was 32nd at $34,796, and Missouri was ranked 35th at $33,984. Personal Income. Nationally, Kansas ranked 32nd in total personal income, while Minnesota ranked 16th, In terms of per capita personal income growth, the Missouri ranked 21st, Iowa ranked 30th, Nebraska Plains region, which averaged 5.9 percent, exceeded ranked 36th, South Dakota ranked 47th, and North the national average of 5.0 percent, and ranked second Dakota ranked 51st in 2007. In terms of personal out of the eight regions in 2007. New England was the income growth, the Plains region, which averaged 6.6 fastest growing region at 6.1 percent followed by the percent growth, was ranked second out of the eight Plains region, and the Mideast region at 5.8 percent. statistical regions. The Southwest region was the In 2007 Kansas ranked 19th in per capita personal fastest growing at a rate of 7.1 percent. Nationally, income growth at 5.6 percent, while North Dakota Kansas ranked 19th at 6.3, while North Dakota ranked ranked first at 11.7 percent, South Dakota ranked first at 12.0 percent, South Dakota ranked second at second at 10.6 percent, Nebraska ranked eighth at 6.6 11.7 percent, Nebraska ranked ninth at 7.3 percent, percent, Iowa ranked 11th at 6.5 percent, Minnesota ranked 22nd at 5.5 percent, and Missouri ranked 30th New England had the highest regional per capita at 4.6 percent. personal income at $40,066, followed by the Mideast region at $38,321, and the Far West region at $35,320. Disposable Personal Income. Disposable personal Of the Plains region states, Minnesota ranked 15th in income is defined as the amount equal to personal per capita personal income at $35,454, followed by income minus personal taxes. In other words, North Dakota at $32,487, South Dakota at $32,451, disposable income is the income available for personal Kansas at $32,067, Nebraska at $32,066, Iowa at use. Nationally, Kansas ranked 32nd in disposable $3 1,020, and Missouri at $30,042. personal income. In 2007, other states in the region that ranked higher than Kansas include Minnesota In terms of per capita disposable personal income ranked at 18th, Missouri at 21st, and Iowa at 30th. In growth, the Plains region averaged 5.4 percent, which 2007, states in the region that ranked lower than exceeded the national average of 4.3 percent. It ranked Kansas include Nebraska ranked at 36th, South Dakota first out of the eight regions nationally. New England at 47th, and North Dakota at 50th. was the second fastest growing region at 5.2 percent, followed by the Mideast region with a 4.9 percent In terms of disposable income growth, the Plains growth rate. Of the Plains region states, North Dakota region, which averaged 6.2 percent growth, exceeded led the nation with 11.6 percent growth, followed by the national average of 5.3 percent and was second out South Dakota, which was second in the nation with of the eight statistical regions. The Southwest region 10.6 percent growth, Nebraska with 6.3 percent was the fastest growing region with a growth rate of growth, Kansas with 5.1 percent growth, Minnesota 6.5 percent, followed by the Plains region, and the with 5.0 percent growth, Missouri with 4.1 percent Rocky Mountains region at 5.5 percent. Within the growth, and Iowa with 2.3 percent growth. Plains region, North Dakota led the nation with a 12.0 percent growth rate, followed by South Dakota, which Per Capita Personal Income Trends. Kansas per was second in the nation with an 11.7 percent growth capita personal income in 2007 was $36,483, which is rate, followed by Nebraska with a 6.9 percent growth a 5.6 percent increase from the 2006 level. This rate, Iowa with a 6.7 percent growth rate, Minnesota increase is above the 5.0 percent growth rate for the with a 5.8 percent growth rate, Kansas with a 5.6 U.S. as a whole, but below the 5.9 percent growth rate percent growth rate, and Missouri with a 4.8 percent for the Plains region. Kansas per capita income in growth rate. Appendix C presents comparative state 2007 was 0.3 percent below the Plains region's total and per capita disposable personal income data average of $36,587, and 5.4 percent below the national for the U.S., the eight regions, and each state for 2005 average. Over the past ten years Kansas per capita through 2007. income, as a percentage of the national average, has ranged from a high of 94.9 percent in 1997, to a low of Per Capita Disposable Personal Income. The Plains 92.7 percent in 2005. Table 2-7, on the following region's average per capita disposable personal income page, presents historical per capita personal income of $32,224 lagged behind the national average of data for Kansas, the Plains region, and the U.S. from $33,619 in 2007. The Plains ranked fourth regionally. 1996 through 2007. Table 2-7 Per Capita Personal Income, 1996-2007 Kansas, Plains Region, & U.S. Percentage Change Kansas as a from Prior Year Percentage of: Plains Plains Plains Year Kansas Region U.S. Kansas Region U.S. Region U.S. 1996 22,845 23,378 24,175 -- % -- % -- % 97.7 % 94.5 % 1997 24,041 24,422 25,334 5.2 4.5 4.8 98.4 94.9 1998 25,483 25,928 26,883 6.0 6.2 6.1 98.3 94.8 1999 26,195 26,737 27,939 2.8 3.1 3.9 98.0 93.8 2000 27,691 28,326 29,845 5.7 5.9 6.8 97.8 92.8 200 1 28,717 29,052 30,574 3.7 2.6 2.4 98.8 93.9 2002 28,980 29,638 30,821 0.9 2.0 0.8 97.8 94.0 2003 29,802 30,618 31,504 2.8 3.3 2.2 97.3 94.6 2004 30,995 32,078 33,123 4.0 4.8 5.1 96.6 93.6 2005 32,136 33,123 34,650 3 -7 3.3 4.6 97.0 92.7 2006 34,558 34,557 3 6,744 7.5 4.3 6.0 100.0 94.1 2007 36,483 36,587 38,564 5.6 5.9 5.0 99.7 94.6 Source: US. Department of Co~nmerce,Bureau of Econoinic Analysis Chapter 3

Local & Regional Employment & Income

Major Labor Market Employment Kansas area, while the labor force decreased 1.1 percent in the Lawrence area and 0.7 percent in the The economy of Kansas is generally concentrated in Topeka area. urbanized areas, each with a similar economic base. For statistical purposes, these geographic areas include However, the level of employment did increase in four metropolitan areas and 11 selected counties. The three of the state's four major labor markets. metropolitan areas include the Wichita metropolitan Employment increased by 0.6 percent in the Wichita area (Butler, Harvey and Sedgwick Counties), the area, 0.4 percent in the Kansas City, Kansas area, and Topeka metropolitan area (Shawnee County), the 0.3 percent in the Topeka area, while employment Lawrence metropolitan area (Douglas County) and the decreased by 1.8 percent in the Lawrence area. Kansas City, Kansas metropolitan area (Franklin, Johnson, Leavenworth, Linn, Miami, and Wyandotte Notwithstanding, the unemployment rate increased in Counties). The selected counties each contain a city three of the state's metropolitan labor markets from that is the major economic base for the region. In October 2007 to October 2008. The unemployment addition, the city has a population that is in excess of rate rose from 4.2 percent to 5.1 percent in the Kansas 12,000 people and constitutes at least 50.0 percent of City, Kansas area; from 3.5 percent to 4.4 percent in the total county population. The 1.1 selected counties the Wichita area; from 3.1 percent to 3.7 percent in the and associated cities are Barton County (Great Bend), Lawrence area; while the unemployment rate in the Crawford County (Pittsburg), Ellis County (Hays), Topeka area actually fell from 4.9 percent to 4.0 Finney County (Garden City), Ford County (Dodge percent. City), Lyon County (Emporia), McPherson County (McPherson), Montgomery County (Coffeyville- Independence, Reno County (Hutchinson), Riley Employment by Place of Work County (Manhattan), and Saline County (Salina). It should be kept in mind that employment estimates Employment by place of work is determined by reported in this section are based on data through compiling data primarily from information obtained October 2008, the most recent data available when this from businesses covered by the unemployment report was prepared. insurance program. Employment by place of work data are then categorized by industry type. The two major categories are the goods producing industries Employment by Place of Residence and the services producing industries. The following section first presents employment by place of work for Employment by place of residence is based on a Wichita, Topeka, and the Kansas City, Kansas areas. sample survey of households. From the sample Because of federal budget reductions implemented by survey, the civilian labor force is determined. The the Bureau of Labor Statistics at the U.S. Department civilian labor force comprises all individuals 16 years of Labor, data are no longer being tabulated for of age and over classified as employed or unemployed. smaller metropolitan areas such as Lawrence. The This number is then used as the basis from which data for each of the other 11 counties are presented in employment, unemployment, and the unemployment the following section. rates are derived. Wichita Metropolitan Area. Based on pIace of work From October 2007 to October 2008, the civilian labor data, employment in all industries in the Wichita force increased in only two of the state's four major metropolitan area decreased 0.3 percent in 2008. labor markets. The labor force increased 1.6 percent Employment in the goods producing industries in the Wichita area and 1.4 percent in the Kansas City, decreased by 1.2 percent, while employment in the service producing industries increased by 0.1 percent. Notably, employment in transportation equipment Wichita Metropolitian Area Employment manufacturing generally increased 3.8 percent and Butler, Harvey & Sedgwick Counties employment in aerospace products manufacturing October 2007-October 2008 specifically also increased 3.8 percent. Table 3- 1 presents employment in the Wichita metropolitan area 2007 2008 % Chg. for 2007 and 2008. Place of Residence Data Civilian Labor Force 313,713 3 18,793 1.6 Employment decreased in four of the eight service Employment 302,865 304,755 0.6 producing industries in the Wichita area during 2008. Unemployment 10,848 14,038 29.4 Specifically, employment in information decreased 4.8 Unemployment Rate 3.5 4.4 0.9 percent; other services decreased 3.7 percent; Place of Work Data professional and business services decreased 2.3 Total Nonfarm 306,500 305,700 percent; and trade, transportation, and utilities Total Private 265,100 263,200 employment decreased 0.6 percent. However, Goods Producing 83,200 82,200 employment levels did increase in government (2.7 Natural Res. & Const. 17,400 17,100 percent) and education and health services (1.9 Manufacturing 65,800 65,100 percent), while employment in financial activities and Durable Goods 57,500 57,900 leisure and hospitality remained unchanged. Farm Machinery 5,300 5,500 employment in the Wichita metropolitan area rose by Trans. Equipment 39,700 41,200 2.1 percent workers in 2008. Aerospace Prod. 39,300 40,800 Service Providing Indus. 223,300 223,500 Private Service Providing 181,900 181,000 According to Moody's Economy.com the Wichita Trade, Trans. & Util. 51,900 51,600 area's economy has been remarkably stable given the Wholesale Trade 10,900 11,100 sharp downturn nationally. The local labor market has Retail Trade 32,700 32,400 remained relatively stable, while they have declined General Mdse. 7,200 7,300 significantly nationally. The most striking difference Trans.,Whse., & Util. 8,300 8,100 between the Wichita and the U.S. economies in 2008 Information 6,300 6,000 has been in the housing market. Prices have remained Financial Activities 11,500 11,500 stable in the Wichita area, in contrast to the double- Prof. & Bus. Services 30,600 29,900 digit declines seen nationally. While construction Prof., Scientific & Tech. 8,400 8,500 activity slowed in 2008, the time on market for houses Admin. & Waste 18,800 18,100 being sold has been very consistent. Foreclosure rates Employment Services 5,900 4,900 remain well below national averages. Household Educ. & Health Services 42,900 43,700 Health & Social Assist. 37,000 37,400 budgets are much more stable in the Wichita area than Hospitals 9,600 9,800 nationally due to prudent spending and saving habits. Leisure & Hospitality 27,800 27,800 Debt burdens in the Wichita area remain significantly Accom. & Food 24,000 24,000 below the national average. Food Services 21,500 21,000 Other Services 10,900 10,500 Wichita State University's Center for Economic Government 41,400 42,500 Development and Business Research (CEDBR) Federal 5,300 5,500 revised its 2009 jobs forecast downward, but it is still State 5,700 6,100 anticipating job growth in spite of the national Local 30,400 30,900 recession. According to the forecast, Wichita is Farm Employment 4,800 4,900 expected to increase jobs by 0.5 percent or Source: Ks Dept. of Labor, Labor Mkt. Itgo. Service approximately 1,650 jobs in 2009, after an increase of 0.5 percent in 2008. The forecast calls for job growth Hawker Beechcraft near year-end and declines in local across most industries, with half of the new jobs indicators such as home sales and the unemployment coming in the aircraft industry. The previous forecast rate led to a revision of the forecast. Although local predicted 6,000 new jobs. Local developments such as aviation manufacturers have backed off planned about the same in 2009 as in 2008. Despite reports of employee's spending. Presently, Cessna employs weakening aviation markets, order backlogs remain approximately 8,000 workers in the Wichita area, high. Both Hawker Beechcraft and Cessna have made Spirit Aerosystems employs approximately 10,500 adjustments to their 2009 production schedules with workers, Hawker Beechcraft employs approximately modest layoffs of approximately 800 workers. At the 7,700 workers, Boeing employs approximately 3,000 same time, Cessna continues its Citation Columbus workers, and Bombardier employs approximately development which is expected to add 1,000 workers 2,800 workers in the Wichita area. over the next five years. The CEDBR concludes that the Wichita area should expect modest growth with According to Kansas Occupational Outlook 2014, most job growth expected to occur in the second half manufacturing jobs in southcentral Kansas are of 2009. expected to increase by 16,170 between 2004 and 2014. These jobs are expected to have an annual Wichita is one of five major aviation clusters in the salary of at least $40,000. In an effort to fulfill that world along with Seattle, Dallas, Montreal and need, ground was broken for the Kansas Technical Toulouse, France. Each cluster does at least $10 Training Initiative, a $54.0 million project to build an billion a year or more in business. Of the five clusters, aviation technical training center in Wichita. Wichita has the greatest exposure in the business jet Sedgwick County has issued bonds to cover the cost of segment, making it more vulnerable to downturns. construction, using federal and state grants to pay off Manufacturers here are in the smaller end of the the debt. The facility is scheduled to open in late 2009 business jet and jetliner markets, areas that decline or early 201 0. The 107,000-square-foot training faster because they are more sensitive to pricing. center will consolidate programs from the area's four Wichita's aircraft manufacturing jobs account for more community and technical colleges. The center will than one-half of the local economy's manufacturing enroll approximately 500 students in a manufacturing sector. The industry can pro\ii"de a tremendous boost program and approximately 100 students in an to the local economy when times are good, but can be avionics program. The design includes an assessment potentially disastrous when market conditions are center, aviation center, and manufacturing center. poor. The aviation industry is important not only to Almost 22.0 percent of Wichita's jobs-double the Wichita, but Kansas as a whole because manufacturing national average-are in manufacturing. accounts for nearly one-quarter of all jobs in the Wichita Metropolitan Statistical Area (MSA). Boeing announced that it intends to cut 800 jobs- According to the Center for Economic Development about a quarter of its Wichita work force-in the first and Business Research, manufacturing accounted for half of 2009. Boeing's layoffs will affect managers as 21.6 percent of all jobs in the Wichita MSA during well as hourly and salaried positions. The company 2007. About 87 percent of manufacturing jobs are in employs about 3,000 people in Wichita in a variety of the durable goods sub-sector and dominated by jobs in programs. Besides the 767 international tanker aviation manufacturing. About 13 percent of program, Boeing works on global transport and manufacturing jobs are in the non-durable goods sub- executive systems programs for the U.S. executive sector, dominated by jobs in food processing. Payroll fleet, (such as Air Force One), B-52 refueling systems earnings for the manufacturing industry totaled support, mission planning, engineering support for the approximately $3.89 billion in 2007, with average Airborne Laser program and the Boeing 747-8, and earnings per job of $59,425. The aviation integrated logistics support. The delay in a bid to manufacturing (transportation equipment) sector replace the Air Force's aerial refueling tankers has had accounted for 60 percent of manufacturing jobs, with a significant impact. The contract could be worth payroll for 2007 totaling more than $2.7 billion and $100 billion over the next 30 years. Boeing filed a average earnings per job of $69,15 1. protest in March after it lost a bid to replace tankers to a team of Northrop Grumman and EADS. The Air According to CEDBR, each aerospace job generates Force said in September that it would rebid the approximately 3.9 total jobs throughout the state based program after the next administration takes office. on both the firm's and the employee's spending. Each Work on tanker programs for Japan and Italy will aerospace wage dollar generates approximately $2.60 wind down in 2009. Early in 2009, the certification, in the state based on both the firm's and the flight test and development activities will conclude. Current work on aircraft in the executive transport end of the month to give union members time to study fleet will end in early 2009, and the planes won't be Boeing's offer before they vote. back for the next modification or upgrade for several months. Two years ago, the plan was to shift Bombardier Learjet has not announced any layoffs or employees assigned to the international tanker work force reductions and the company has not programs to the U.S. tanker program. However, that is received any order cancellations, although orders have no longer possible. Furthermore, layoffs at Boeing softened. The Wichita facility presently employs might extend beyond Wichita next year, as the approximately 2,800 workers, up from 2,300 at the company looks to cut costs in response to difficult beginning of the year. It also employs about another market conditions and a slowing global economy. 300 consultants and contractors. The site is working to take on assembly of its new Learjet 85 and Boeing may also delay the first deliveries of the 787 expanding production of the Learjet 60. Dreamliner by at least six more months due to a recent strike by union workers and other production glitches. Cessna Aircraft announced that it will cut about 500 This would set deliveries back by more than two years jobs in Wichita. The announcement came just six from the original schedule. The strike ended in months after state, city and county officials approved November after the Machinists union ratified a four- an incentive package worth tens of millions of dollars year contract with the company. The 57-day strike by so Cessna would build its Citation Columbus plant in Boeing Machinists ended after 74 percent of union Wichita. The new facility is expected to add an members voted in favor of a new four-year contract. addition 1,000 jobs when it opens in 2009. The cuts I The Machinists represent about 750 hourly workers in will come through involuntary and voluntary layoffs. Wichita and about 26,000 in Washington and Oregon. Contract labor could also be cut. The reductions come Job security, pensions, and health care were top issues as Cessna-the city's largest private employer- for the union. The union received concessions from adjusts its production schedules for the coming year Boeing regarding increases to medical insurance, amid a softening global economy. Based on the recent changes to retiree medical insurance, and seniority. feedback from customers, Cessna revised its delivery The new contract includes wage increases of 5 percent schedule downward for 2009-from an expected 535 in the first year, 3 percent in the second year, 3 percent jets to slightly up relative to the 2008 level of 475 in the third year, and 4 percent in the final year. It also aircraft. Slowing 2009 deliveries will allow the included a lump-sum bonus of 10 percent of earnings company to avoid $100 million in costs. or $5,000, whichever is greater, and $1,500 bonuses in the second and the third year. In April, the Kansas Legislature passed a bill that gave Cessna up to $33 million to build its new Citation Also affected by the strike were the majority of Columbus plant in Wichita. The City of Wichita and workers at Spirit AeroSystems, a major Boeing Sedgwick County together gave Cessna an additional supplier, who were on three-day work weeks for most $10 million. During the 200 1-03 economic downturn, of the duration of the strike. The shortened schedules Cessna laid off 3,000 workers, but it continued to are likely to remain in effect until the end of January. spend money on new products. During that time, The work stoppage was the Machinists7 fourth strike Cessna developed the Citation Mustang, XLS and CJ3. against Boeing in two decades and its longest since Today, those models account for 60 percent of the 1995. The International Association of Machinists and company's $15 billion of outstanding orders. Aerospace Workers staged strikes against Boeing for 24 days in 2005,69 days in 1995, and 48 days in 1989. Flight Safety International announced that it is delay- The work stoppage cost Boeing an estimated $100 ing plans for a major expansion to its Cessna Citation million a day in deferred revenue and postponing training facilities. The original plan was to begin delivery of its long-awaited 787 jetliner, which was construction in January 2009 and be ready to open at already delayed three times, as well as other the end of 2009 or early 2010. Flight Safety employs commercial planes. In addition, Boeing's contract more than 450 people at three centers in Wichita. with the Society of Professional Engineering Employees in Aerospace (SPEEA) was set to expire in Hawker Beechcraft announced that it would cut about December, but the expiration has been pushed to the 490 jobs as it lowers production. Hawker Beechcraft intends to cut 5 percent of its workforce as it faces two largest construction projects in the area's history cc~erio~~challengesyy from an "unprecedented will be under way at the same time. worldwide economic decline," its top executive said in a letter to employees. The layoffs will be a mix of In 2007, voters rejected two referenda for allowing hourly and salaried workers. Hawker Beechcraft gaming in Sedgwick County. Amid unusually heavy employs 7,700 workers in Wichita. The company is voter turnout for a non-general election, a proposal to reducing production to match potential declines in allow casinos in Sedgwick County was defeated by a demand, reducing inventories, and curtailing capital vote of 56 percent in opposition to 43 percent in favor. expenses. Hawker Beechcraft is a highly leveraged Nevertheless, Sumner County, which approved a company, carrying almost $2.4 billion in debt. Interest similar referendum in 2005, moved forward with plans expense in 2008 will total nearly $190 million, to build a casino. The plan required a minimum equivalent to more than $500,000 a day. In addition, investment of $225 million and is projected to have an Hawker Beechcraft faced 25-day Machinist strike economic impact of at least $150 million annually. during August. The union represents 4,700 hourly Penn National Gaming, Sumner Gaming-Harrah's workers at Hawker Beechcraft in Wichita and about Entertainment, MGM Mirage-Foxwoods Develop- 500 in Salina. The new three-year contract, which was ment-Chisholm Creek Ventures, and Marvel Gaming- approved by 77 percent of voters, gives workers 4 Binion Family Trust all submitted proposals to build percent wage increases in each year, a $7 pension and operate a Sumner County facility. increase to $51 per month for each year of service, a freeze on health care premiums and a choice of plans However, plans for a casino in Sumner County are on and hospitals. The union received concessions from hold after Sumner Gaming Joint Venture LLC, a the company regarding a controversial plan to reduce partnership of Harrah's Entertainment and Kansas- earned time off for new employees and to downgrade based Sumner Gaming and Resorts, withdrew its two job codes for new employees. proposal for a $535 million casino near Mulvane because of the poor economy. A statement by the Major construction projects will also partially offset joint venture said it remained enthusiastic about the any decline in residential homebuilding. The Wichita economic and tourist benefits from a casino in Downtown Development Corporation reports that Mulvane. It said economic conditions and disruptions $3 12 million has been invested in the downtown area in the financial markets made it impossible to proceed since 2002, including $43 million in public "as planned." The state's casino review board had investment. Construction is continuing on the $130.0 selected this proposal in August over two other bids. million Waterwalk development in downtown Bidding for Sumner County's casino is expected to re- Wichita. A 60,000-square-foot office building and a open January 1. Applications will be due to the state multiple-story, multi-use building is the heart of the by April 1. project. The city is the major source of an already- announced $30.0 million public investment for Moody's Economy.com forecasts that although WaterWalk infrastructure, the majority of which is Wichita's economy will slow in 2009, it will not being funded by tax increment financing. WaterWalk contract as with most of the country. Hiring in the developers have guaranteed a minimum $30.0 million aerospace industry will slow considerably but will investment in the development and future property continue to expand modestly. This, together with taxes from that investment will pay off the majority of stable house prices, will lead to moderate growth in that financing. Developers say they actually expect to consumer spending. According to Moody's invest closer to $80.0 to $100.0 million over the next Economy.com the financial crisis is likely to have a decade as the project grows. When completed, the relatively mild effect on the Wichita area relative to project is expected to create over 2,000 new jobs worth most parts of the country. The lack of overbuilding more than $65 million annually. The Intrust Bank has allowed house prices to rise in Wichita, unlike Arena, a $205.5 million new 15,000-seat sporting and most of the country. Developers quickly reduced their entertainment facility, is not expected to be completed output, which has prevented a substantial increase in until January 2010. Moreover, construction of inventory levels. Stable housing prices should limit Cessna's new $200 million Citation Columbus plant is the area's exposure to a significant increase in expected to commence in early 2009, meaning that the foreclosures. According to a study conducted by the

35 National Association of Realtors, the Wichita Table 3-2 Metropolitan Statistical Area is the fourth-best in the Topeka Metropolitian Area Employment nation for home price appreciation. Wichita's third- Shawnee County quarter 2008 median price of $125,300 was up 5.5 October 2007-October 2008 percent, ranking the area behind Elmira, N.Y., Decatur, Ill., and Bloomington-Normal, Ill. Moody's 2007 2008 % Chg. Economy.com concludes that the Wichita area's Place of Residence Data outlook is positive based on its favorable Civilian Labor Force 120,539 119,659 (0.7) manufacturing composition, a low cost of doing Employment 114,605 114,916 0.3 Unemployment 5,934 4,743 (20.1) business, affordable housing, and a well-educated Unemployment Rate 4.9 4.0 (0.9) population. Place of Work Data Moody's Economy.com concludes that the aerospace Total Nonfarm 110,500 111,100 0.5 industry will remain the primary source of growth in Total Private 82,100 82,500 0.5 the metro area over the next year. Although the Goods Producing 13,300 13,200 (0.8) financial crisis has slowed growth in new orders and Natural Res. & Const. 6,000 5,900 (1.7) will continue do so over the near term, all of the Manufacturing 7,300 7,300 -- aerospace firms in the area have substantial order Non-Durable Goods 5,700 5,500 (3.5) backlogs. Service Providing Indus. 97,200 97,900 0.7 Private Service Providing 68,800 69,300 0.7 Topeka Metropolitan Area. Based on place of work Trade, Tran. & Utilities 20,200 20,000 (1.0) data, all industries' employment in the Topeka Wholesale Trade 3,800 3,800 -- metropolitan area increased 0.5 percent in 2008. Table Retail Trade 11,400 11,300 (0.9) 3-2 presents employment in the Topeka metropolitan Trans. & Warehouse 5,000 4,900 (2.0) area for 2007 and 2008. Information 2,400 2,500 4.2 Financial Activities 7,500 7,500 -- Employment in the goods producing industries Finance & Insurance 6,300 6,200 (1.6) decreased 0.8 percent, while employment in the Prof. & Bus. Services 9,400 9,600 2.1 Educ. & Health Services 16,800 17,000 1.2 services producing industries increased by 0.7 percent. Health & Social Services 16,400 16,700 1.8 Within the goods producing industries, natural Hospitals 5,800 6,000 3.4 resources and construction employment decreased 1.7 Leisure & Hospitality 7,800 7,900 1.3 percent, while manufacturing employment remained Accom. & Food Serv. 7,000 7,100 1.4 unchanged. Food Services 6,300 6,500 3.2 Other Services 4,700 4,800 2.1 Employment increased in six of eight service Government 28,400 28,600 0.7 producing industries in the Topeka area during 2008. Federal 3,000 3,100 3.3 Specifically, employment in information services State 9,500 9,700 2.1 increased 4.2 percent, professional and business Local 15,900 15,800 (0.6) services increased 2.1 percent, other services increased Farm Employment 4,400 4,500 2.3 2.1 percent, leisure and hospitality increased 1.3 Source: Ks Dept. of Labor, Labor Mkt. Inzo. Service percent, and education and health services increased 1.2 percent, while employment in trade, transportation, Houston in 2003. Southwestern Bell, now called and utilities decreased 1.0 percent, and financial AT&T, reduced its local workforce from 1,000 activities employment remained unchanged. Farm employees in 2002 to 473 presently. Now, Topeka's employment in the Topeka metropolitan area rose by top 25 employers are a mix of government, health 2.3 percent in 2008. care, food processing, tire manufacturing, education, retail and transportation entities. The State of Kansas Thirty years ago, four of the leading employers were remains the area's largest employer with 8,436 Santa Fe Railway, Southwestern Bell, Goodyear Tire employees. & Rubber Co. and the Menninger Clinic, but only two, Burlington Northern Santa Fe and Goodyear, remain in Collective Brands, founded as Payless Shoesource in the top 25. The Menninger Clinic relocated to Topeka in 1956, is the area's seventh largest employer. Collective Brands Inc., a homegrown business, known sales slow. A major factor reducing demand is a 50 in recent years as Payless ShoeSource, employs about percent drop in sales of new commercial trucks. New 1,000 people at its Topeka headquarters. The truck sales have been down because carriers were company announced a 46,000-square-foot expansion concerned that new Environmental Protection Agency that includes a new cafeteria, fitness center, and 100 requirements on engines would reduce mileage. new offices for the Store Development Team. The Another factor slowing sales is a slowdown in freight announcement is significant because an announcement movement due to the slowdown in the economy and was made in 2007 that the company was planning to high fuel prices. Also during the year, American Tire close its 850,000 square-foot Topeka distribution Corp. offered to acquire Goodyear Tire & Rubber center. The closing will eliminate 450 to 550 jobs. Co.'s off-the-road tire plant in Topeka and said it The closing of the distribution center is tied to the would invest $200 million to modernize the facility. creation of centers in other parts of the country. The However, Goodyear announced that the Topeka company's board of directors approved management's facility was not for sale. recommendation for a $77 million investment in the company's supply chain that is designed to improve In 2002, the Legislature approved a $10.0 million efficiency in delivering footwear and accessories. The incentive for Goodyear to retool the Topeka facility. company's stores are heavily clustered on the more The money for the state incentive came from payroll populated East and West coasts. With a distribution withholding tax from the local Goodyear plant. The center on the West Coast and another east of the incentive money was paid to Goodyear only if it Mississippi River, the new supply chain model will be maintained the agreed upon employment at the more closely aligned with the company's retail facility. Another $750,000 for Goodyear comes from facilities. ' Payless plans to move its distribution a local option quarter-cent sales tax designated for operations to a 400,000-square-foot facility in economic development. If Goodyear closes the local Redlands, Calif., and a 600,000-square foot Topeka plant before a ten-year period is up, the distribution center in Brookville, Ohio. Workers at the company has to repay the sales tax incentive. In distribution center earn between $1 0 and $20 per hour conjunction with these incentives, the company has and receive benefits, such as health care and vacation. committed to invest more than $100.0 million in its Topeka plant to upgrade its manufacturing processes. Goodyear Tire & Rubber Co. is the area's ninth largest Goodyear's new Fuel Max Technology is focused on employer. The Goodyear facility has been a fixture in fuel and tire costs. Goodyear Tire & Rubber Co. Topeka since the federal government built it during manufactures over-the-road tires, military tires and World W&II to make military tires. Goodyear later radial truck tires in Topeka, where it employs about took over management and produced its first tire at the 1,600 people. The Topeka Goodyear plant is still facility in.March 1945, before buying the facility from producing tires for Humvees for the U.S. military, the government in 1946. The radial truck tire line at even though Michelin has the primary contract for the Topeka facility has been very important for many providing the tires to the Pentagon. The starting wage years, but demand tends to be very cyclical. About at Goodyear is $13.08 per hour. After three years, 580 workers at Goodyear Tire & Rubber Co. were employees are qualified to apply for jobs that pay $20 expected to file for unemployment benefits after three to $24 per hour. temporary shutdowns in the radial truck tire division over the course of the year. Affected employees were Frito-Lay is Topeka's 20th largest employer, and allowed to take vacation during the shutdown or were employs about 840 people in its manufacturing and temporarily laid off without pay. The shutdown was distribution facilities in Topeka. Frito-Lay opened its attributed to slow demand from the trucking industry Topeka plant more than 35 years ago. The company and a significant accumulation of inventory of radial pays an average wage of $18.50 per hour and a truck tires. The radial truck tire sales have been starting wage of more than $16 per hour. The plant slowing because of lower demand for original produces Lays, Ruffles, Cheetos, Doritos, Funyuns, equipment semitrailer tires, economic softness, rising Fritos, Tostitos and SunChips. In 2006, the Topeka fuel costs, and high raw material expenses. Because Joint Economic Development Organization (JEDO), factories are capable of producing thousands of tires which partners with city and county elected officials to per week, a large inventory can build up quickly if administer money from a half-cent, county-wide sales tax, approved an estimated $125,000 to $175,000 in removal of a pond. The company also may pursue a incentives for Frito-Lay to carry out a $40 million self-funded industrial revenue bond issue that would expansion project at its plant in Topeka. The money is include eligibility for a property tax exemption for the part of a ten-year incentive package being put together facility for up to ten years and a sales tax exemption by local and state agencies for Frito-Lay. The package for labor and materials used in construction. includes a ten-year tax exemption on the project worth an estimated $278,902. In 2007, Frito-Lay opened the Moody's Economy.com predicts that Topeka's $40 million expansion that created 75 jobs in Topeka. economy will continue to slow significantly and return The 40,000 square foot expansion facilitated a new to its familiar position lagging the Kansas economy. production line for SunChips-a "healthier" whole According to Moody's Economy.com, Topeka's long- grain chip that has gained in popularity in recent years. term growth potential is limited by several constraints. Frito-Lay f~stproduced SunChips at its Irving, Texas, Most notably, the area lacks a dynamic growth driver. plant in 1991, but the company now has SunChips The lack of lucrative private-sector employment production in seven plants. Frito-Lay manufactures opportunities in the area will continue to limit growth. nine to ten million bags of chips per week in Topeka, The lack of a skilled labor pool makes it difficult to with SunChips comprising 15 percent of the total. The attract high-tech employers. Moreover, a relatively expansion of the plant is large enough to accommodate older population limits the natural rate of population another future product line. The plant is located on 47 growth. The housing market is not expected to acres, but the company recently year purchased an improve in any significant degree until well into 2009. additional 117 acres. However, Topeka's large public sector will limit volatility in the labor market. Nevertheless, Topeka is Home Depot is exploring the prospect of establishing a expected to continue underperforming the U.S. in distribution center near the Target Distribution Center. terms of both employment and income growth. Topeka's Joint Economic ~evklo~mentOrganization (JEDO) board members voted to offer 75 acres of free Lawrence Metropolitan Area. As mentioned above, land in the Central Crossing Commerce Park plus cash data on employment by place of work are no longer incentives of up to $600,000 to an undisclosed tabulated for the Lawrence metropolitan area. Thus, company. JEDO partners with city and county elected Table 3-3 presents only employment by place of officials and contracts with Go Topeka to oversee the residence in the Lawrence metropolitan area for 2007 proceeds from $5 million generated from a half-cent and 2008. sales tax approved by voters in 2004 for economic Table 3-3 development and road and bridge improvements. The Lawrence Metropolitian Area Employment 75 acres JEDO approved was initially purchased for $750,000 and now has an estimated value of $2.25 Douglas County million. The package also includes incentives of October 2007-October 2008 $1,500 for each new full-time job created at the 2007 2008 % Chg. distribution center by the end of 2012, up to $600,000 Place of Residence Data to be paid out if it creates 400 jobs. If the distribution Civilian Labor Force 63,000 62,327 (1.1) center project goes forward with the project, Employment 61,067 59,941 (1.8) construction could begin as early as late fall. The Unemployment 1,933 2,386 23.4 center would employ at least 400 people, and possibly Unemployment Rate 3.1 3.8 0.7 up to 600. Base hourly pay would be between $10 and Source: Ks Dept. of Labor, Labor Mkt. Info. Service $12 an hour plus benefits, with supervisors paid between $14 and $16 per hour plus benefits for According to Moody's Economy.com Lawrence's supervisors, and managers paid approximately $50,000 economy is in recession. Employment has decreased a year plus benefits. The company was not interested over the past year due to significant slowdowns in in using the soon to be vacated Payless distribution construction and manufacturing. The unemployment facility because the company's facility requires unique rate in the area is at a three-year high and has risen design requirements. In addition, the proposed area sharply since the end of 2007 and consumers have also poses topographical challenges because the area come under a great deal of stress due to slow wage would require significant regrading and the possible growth. Although the housing market in the Lawrence area has experienced tremendous growth over the past the local economy, this will have only a marginal several years and pushed average home prices up to impact on overall employment growth. Longer term, nearly $250,000, housing demand is expected to slow weakpopulation growth will lead to tepid gains in significantly due to rising unemployment and tight construction and retail employment, while an credit markets. Moody's Economy.com suggests that unfavorable manufacturing composition will lead to because of the rapid growth in the area, an excess steady job losses in that sector. As a result, Lawrence supply of single-family homes has been building up is expected to lag the national economy in terms of over the past six years. Moody's Economy.com both income and employment growth. predicts that existing home sales will remain down for the near term with housing prices moderating due to Kansas City, Kansas Metropolitan Area. Because weak demand. of changes in statistical reporting areas, Kansas City, Kansas is now regarded as a separate statistical area. The primary benefit of KU's presence in Lawrence The area includes Franklin, Johnson, Leavenworth, area is the stability it provides the local economy. The Linn, Miami, and Wyandotte Counties. Employment large student body provides a steady source of demand by place of work in the Kansas City, Kansas for the retail industry during the academic year, and metropolitan area decreased 0.5 percent in 2008. the university provides residents with many stable, Employment in goods producing industries decreased high-paying jobs. The university also gives the metro 5.9 percent, while employment in service producing area a large pool of highly-skilled graduates, making industries did increase 0.3 percent. the area an attractive destination for high value added Within the goods producing industries, natural companies seeking to relocate or expand into Kansas. resources and construction employment fell 10.0 However, according to Moody's Economy.com, percent, while employment in non-durable goods Lawrence has shown an inability to attract such a manufacturing declined 5.3 percent, while durable group of employers, and a continuing failure to do so goods manufacturing employment decreased 1.9 will result in more KU students moving once they percent. Within the service providing industries, graduate, taking with them the skills to fill higher- employment in government increased 3.5 percent; paying, higher-skilled jobs elsewhere. Thus, information increased 1.8 percent; education and population growth in the Lawrence area will continue health services increased 1.3 percent; and other to be well below the national average. services increased 1.2 percent. On the other hand, employment in leisure and hospitality decreased 2.4 To address this,-the Lawrence Chamber of Commerce percent, financial activities employment decreased 1.2 has focused on fostering a robust economy, providing percent, and employment in trade, transportation, and and preserving superior amenities and maintaining utilities decreased 0.9 percent. Farm employment in Lawrence's distinct spirit and atmosphere. An the Kansas City, Kansas rose by 3.8 percent in 2008. important component of this plan is East Hills Table 3-4 on the following page presents employment Business Park, a project designed to attract emerging by place of residence for the Kansas City, Kansas and promising startups to test, advance and market metropolitan area. their ideas in pharmaceuticals or other technologies. The goal is to transform a warehouse building into a According to the Mid-America Regional Council's high-tech .center with state-of-the-art laboratories, (MARC) 2009 Greater Kansas City Economic shared office space, and common conference rooms. Forecast, the recession has already caused the region to lose about 4,000 jobs. Because of the uncertainty Moody's Economy.com predicts that employment will created by the current international financial crisis, the continue to decline in Lawrence over the near term, as forecast includes two scenarios. The two scenarios overall structural weakness in the service sector differ based on how severe and long the recession remains a drag on the local economy. The area's large might be, as well as how strongly the local economy concentration of nondurable goods manufacturers is recovers. In the first scenario, it is assumed that the unlikely to experience significant growth in payrolls in recession lasts about six months and results in an the near future facing trends toward increasing additional 11,000 jobs lost in the Kansas City area. outsourcing and the substitution of capital for labor. Under this scenario, it is assumed that by the end of Although biotechnology research at KU will bolster 2010, one half of the jobs lost will be recovered. In Table 3-4 Consistent with this theme, some major local Kansas City, KS Metro. Area Employment employers that have announced employment October 2007-October 2008 reductions include American Airlines, American Century Investments, Cerner, Embarq, H&R Block, 2007 2008 %Chg. The Kansas City Star, Russell Stover, Sprint Nextel, Place of Residence Data and YRC Worldwide, among others. Civilian Labor Force 440,302 446,303 1.4 Employment 421,910 423,486 0.4 Unemployment 18,392 22,817 24.1 In addition, Applebee's was acquired by IHOP Corp. Unemployment Rate 4.2 5.1 0.9 Aquila was acquired by longtime Black Hills. Butler Place of Work Data Manufacturing was acquired by Blue Scope Steel of Total Nonfarm 450,600 448,200 Australia. Capital One Home Loans is expected to Total Private 392,800 388,400 furlough approximately 320 Overland Park employees Goods Producing 59,700 56,200 starting in February. Farmland ~ndustries and Natural Res. & Const. 23,000 20,700 Interstate Bakeries have sought bankruptcy court Manufacturing 36,700 35,500 protection from creditors. Marion Laboratories was Durable Goods 21,500 21,100 acquired by Merrell Dow pharmaceuticals. NovaStar Computer & Electronic 4,200 3,900 Financial has experienced massive layoffs and Transportation Equip. 3,600 3,800 Non-Durable Goods 15,200 14,400 delisting by the New York Stock Exchange. Even Service Providing Indus. 390,900 392,000 Hallmark Cards has experienced some modest Private Service Providing 333,100 332,200 downsizing. Trade, Trans. & Util. 96,900 96,000 Wholesale Trade 25,000 25,500 According to Moody's Economy.com the Kansas City Durable Goods 12,600 12,300 area economy has experienced job losses across most Retail Trade 47,700 47,100 industries. The area's goods manufacturers have also General Merchandise 11,800 11,900 been significantly affected as the national recession Trans., Warehouse & Util. 24,200 23,400 Trans. &Warehousing 22,100 22,500 has curtailed demand for manufactured goods, Information 22,600 23,000 especially vehicles, while the consbuction industry has Telecommunications 17,200 17,300 contracted significantly due to dwindling housing Financial Activities 33,400 33,000 demand. Growth in the Kansas City economy has Finance & Insurance 26,800 26,800 slowed because of weakness in the housing market. Insurance Carriers 12,900 12,900 Housing activity in the area has also declined from its Prof. & Business Services 73,800 73,800 peak. Building permit issuance has slowed as housing Prof., Scientific & Tech. 32,100 31,700 prices and home sales have fallen from their peak. Admin. & Waste 37,700 37,600 Even though the housing slowdown is well under way, Educ. & Health Services 52,800 53,500 Health & Social Assist. 47,200 48,600 the local housing market has likely not bottomed out Hospitals 13,900 14,200 yet. Service industries have also experienced job Leisure & Hospitality 37,100 36,200 losses as the financial crisis has deepened, placing Accom. & Food 31,800 31,100 consumers on increasingly tight budgets. Moreover, Food Services 29,400 29,300 the ongoing uncertainty created by the financial crisis Other Services 16,500 16,700 is likely to result in continuing job losses in the Government 57,800 59,800 financial activities and professional and business 7,200 7,300 Federal services industries. This will have a noticeable impact State 6,600 6,800 Local 44,000 45,700 on the Kansas City area economy where these two Farm Employment 5,200 5,400 industries account for about one out of every five jobs. Sozirce: Ks Dept. of Labor, Labor Mkt. Info. Service As such, the contraction of these two high-paying industries will create a drag on per capita personal the second scenario, it is assumed that the recession income growth. lasts about a year, resulting in the loss of an additional 30,000 jobs locally. Under this scenario, local In November, American Century Investments employment does not start growing again until announced the furlough of approximately 270 sometime after 2010. employees in a cost-cutting move that affects 17 percent of its work force. The reductions at the nearly $12 billion. The combined operations will shift Kansas City-based mutual fund giant reflect the its headquarters to northern Louisiana. Embarq has ongoing turmoil created by the financial crisis that has about 3,500 employees in the Kansas City area. caused many investors to pull out of the stock market. CenturyTel and Embarq executives vowed to maintain Earlier in the year American Century laid off about 90 a "significant presence" in the Overland Park area. workers. These cuts focused on employees involved Embarq, number 381 on the Fortune 500 list, occupies in direct sales of mutual funds to individuals. As a a corporate headquarters at 1-435 and Nall Avenue, basis for comparison, American Century cut about 270 has other prominent office towers nearby at 95th Street jobs in 2001-2002, after the technology and telecom and Metcalf Avenue, and maintains a complex in bubble burst, or about 9 percent of its workforce. Gardner. CenturyTel serves 25 states, including American Century employees who are let go will Missouri, where it has more than 20 percent of its 2 receive one month's pay and benefits for each year million phone lines. Embarq services nearly 5.9 they worked at the company. The severance is limited million phone lines in 18 states. to one year of pay and benefits, but no employee will receive less than three months. The cuts are not Although Ford Motor Co. announced that it likely had expected to affect portfolio managers. sufficient funding to weather the duration of the recession, General Motors Co. (GM) announced that Sprint Nextel Corp. announced that it is moving its its financial condition was so dire that it would likely post-merger headquarters fiom Reston, Va., to run out of cash sometime in 2009. With the deepening Overland Park. The headquarters consolidation comes financial crisis, American automakers appealed to amid the company's latest cost-cutting program. Congress for $25 billion in federal loans, low-interest About 4,000 employees and 1,600 contractors are emergency borrowing, and a share of the Wall Street expected to be eliminated. The Overland Park-based bailout. While both automakers have closed dozens of telecom giant is offering voluntary buyout packages to U.S. assembly plants in recent years, employment an unspecified number of its workers. The company levels at Ford's Claycomo and GMYsFairfax factories now employs about 57,000 workers overall, including have remained steady. The Kansas City area's Ford 12,300 in the Kansas City area. and General Motors auto plants rank among the most efficient in North America according to an annual In 2008, Sprint appeared to be distancing itself from its study conducted by Harbour Consulting of Troy, troubled Nextel acquisition. In January, Sprint took a Michigan. Nevertheless, plunging auto sales are likely nearly $30 billion noncash accounting charge for the to have a significant impact on the nearly 7,000 $38 billion purchase of Nextel in 2005, writing off Kansas City auto workers. In the Kansas City area, much of the goodwill value of its purchase and other one supplier has already closed and another has acquisitions. Questions about the fate of the Nextel reduced operations. Similarly, the bankruptcy of a network have been contributing to ongoing uncertainty Canadian parts company has led to the shutdown of its surrounding the Kansas City region's largest private St. Joseph plant. employer for months. Federal regulators have given Sprint Nextel Gorp. approval to spin off and merge its General Motors Co. announced that it would reduce new WiMm wireless broadband network with that of output by 25 percent and will place approximately 370 Clearwire Corp. The Federal Communications Com- of its 2,750 employees at its Fairfax assembly plant on mission (FCC) approved a plan to combine Sprint's indefinite leave early in 2009. GM is slowing Xohm network with Clearwire's WiMax-like network. production at its Fairfax assembly plant in anticipation Google, Intel and a group of cable companies are of declining sales in the upcoming year. In all, GM investing billions in the $14.6 billion venture, which plans 3,600 indefinite layoffs at ten assembly plants will carry Clearwire's name. The Justice Department starting next year. In addition, GM announced that it has already indicated that it will allow the deal to will suspend production for three consecutive weeks in proceed, but will continue to monitor it. January of 2009. Since area GM workers will begin their holiday break December 24, the plant will CenturyTel, a Louisiana-based local phone company, effectively be shut down for more than a month. acquired Overland Park's Embarq, which was spun off Facing a 22 percent decline in U.S. sales in 2008 and from Sprint Nextel in 2006, in a stock deal valued at fast running out of cash, GM announced that it was

41 cutting production at four North American plants in hourly and 200 salaried employees. The plant has 2009, including Fairfax. The Fairfax facility makes three shifts producing the Ford EscapeMercury the Chevrolet Malibu and Saturn Aura passenger cars. Mariner compact SUV and one shift building the new F-150 pickup. In December 2007, General Motors (GM) announced that it plans to spend $208 million preparing its During 2008, Ford has offered a variety of voluntary Fairfax, Kansas plant to build the redesigned 2008 severance incentives for employees. They include Chevrolet Malibu. The investment will be used to buy early retirement providing a lump-sum payout, as well new equipment and expand the plant's body shop. The as credited additional years for the pension plan, and a Fairfax plant builds the current version of the Malibu, cash buyout for younger employees not of retirement Malibu Ma=, and the Saturn Aura. The Unified age. The company has also offered educational Board of Commissioners for Wyandotte County and severance packages that can provide tuition and Kansas City, Kansas, approved $146 million in health-care coverage while a departing worker or a revenue bonds and a five-year tax abatement as family member receives training or education for incentives for GM's investment at Fairfax facility. another career. With overtime schedules virtually The State of Kansas also provided help in eliminating eliminated, the company said some employees who a machinery and equipment tax for new business accept the voluntary severance package may actually investments. The tax break for this GM investment receive a monthly pension equal to or even more than will be about $10 million. The plant is currently their current net take-home pay. It was the latest in a producing about 60 vehicles an hour. series of voluntary severance programs that Ford has offered to hourly workers since 2006. About 2,100 The Chevrolet Malibu built at Fairfax has been one of employees accepted an offer to retire early or take a GM's bright spots for the past two years, posting cash buyout during the two programs in 2006. strong sales. However, the production of the next- Approximately 7,000 hourly workers companywide generation Buick Lacrosse at Fairfax has been accepted the voluntary severance offer during 2008. delayed. Originally scheduled to begin production on About 250 area union workers decided to accept the March 1, the 2010 Lacrosse is now slated to be offer over the course of the year. The jobs of those launched in mid-May. The new Buick is expected to accepting the offer are to be filled by other company add about 100 jobs at Fairfax. The new jobs will be workers from plants elsewhere that have closed or filled by GM workers transferring to Fairfax from eliminated shifts. idled facilities around the country. GM is expected to build 65,000 to 75,000 units of the new cars next year. In 2007, Burlington Northern-Santa Fe Railroad The Fairfax plant will continue to build the Malibu (BNSF) announced plans to build the BNSF with production of the Aura to eventually be Intermodal and Logistics Park in Gardner, Kansas discontinued. Production of all three vehicles at the (southwest Johnson County). The Park will be a $1.0 facility would likely push the plant to its capacity. If billion freight hub and warehouse complex. The this comes to pass, GM would be forced to add a third railroad has said it needs the logistics park to transfer shift at Fairfax. goods from trains to trucks and vice versa because it is running out of capacity at its freight center in Kansas In November 2007, Ford shut down the sport utility City, Kansas. Under the railroad's plan, trains would line of the Claycomo plant, temporarily idling about be unloaded at the site, with the goods stored on-site 3,000 workers who make the Ford Escape and or trucked to other destinations. BNSF will invest Mercury Mariner for three weeks. The automaker $200.0 million for the intermodal facility. BNSF will followed up with similar action for two weeks in operate the intermodal facility through a contractor, December. The layoffs did not affect the 1,000 employing about 350 employees. The rest of the space workers who make the F-150 pickup truck. Sales for will be occupied by up to 12 million square feet of the Escape and Mariner have been down slightly this warehouses and distribution centers. BNSF year, while sales of the F-150 have been down more anticipates that the Gardner hub will be an important drastically. However, Ford introduced a new F-150 in site for the movement of goods from the Pacific Rim the fall. The F-series remains the best-selling vehicle to the Midwest. Containers unloaded off ships from in the country. The Claycomo plant has about 4,200 the West Coast would travel by train to Gardner,

42 where they would be transferred to trucking operations opera and ballet, along with a multipurpose facility for distribution to their final destinations. An called Celebration Hall. In addition, the city has economic impact study estimates that the distribution pledged $47.0 million to build two parking garages for center will generate $650.0 million in investments over the complex. Construction of the new arena was a 20-year period when fully built. The entire facility is financed with a combination of $276.0 million in expected to create 13,000 jobs in the state over a 20- private and public financing. Major contributors year period. Of the 13,000 total, approximately 7,500 include the Anschutz Entertainment Group (AEG) jobs will be in Gardner, 4,500 will be in other areas of ($54.0 million), the National Association of Basketball Johnson County, and 1,000 will be in the Kansas City Coaches ($10.0 million), and Sprint, which has metro area. The facility is expected to become purchased naming rights for up to $2.5 million per operational in 2009. year. Public contributions come from a new hotel and rental car fee. The financial crisis notwithstanding, the largest economic development project in Kansas continues to Notwithstanding, a new report shows that Kansas City, move forward as the Johnson County Board of Missouri is accumulating millions of dollars in debt on Commissioners approved a public infrastructure plan underperforming economic development projects. The to accelerate the construction of improvements City will soon have to cover nearly $1 0 million in debt supporting the new intermodal and logistics park at and other payments for projects receiving fmancial Gardner. The Allen Group, one of the nation's leading incentives. A report to the city council said nearly $5 Inland Port development companies, is developing a million was needed to make debt service payments 600-acre logistics park adjacent to BNSF's intermodal that were not sufficiently covered by revenue from the facility. The City of Gardner also approved the same projects. The majority of that is attributed to the late finance, annexation, and development agreements opening of the Power & Light downtown supporting the creation of the facility. The annexation entertainment district and rising interest rates on its and development agreements, in combination with the variable-rate bonds. The City may also have to make public infrastructure plan of finance, set forth three debt payments not covered by anticipated revenues stages of public infrastructure improvements totaling from the 909 Walnut Street condominium project, the approximately $52 million. HOK headquarters garage at Third and Wyandotte streets, and the Harley Davidson plant in Platte Kansas City, Missouri is presently in the process of County. The remaining deficiency reflects other investing more than $2.4 billion in the downtown area. reimbursements to tax increment financing (TIF) Kansas City's downtown revival is anchored by the projects that were not anticipated in this year's budget. Sprint Center, the Power & Light District, the When these projects were approved, anticipated Kauffinan Center for the Performing Arts, and a new earnings and sales taxes from these developments ballroom at Bartle Hall. The new $280.0 million were expected to pay for themselves even generating Kansas City Live entertainment district is anchored by excess revenues. However, in many cases this did not the $120.0 million H&R Block 14-story downtown happen. According to the report the development corporate headquarters, which opened in August 2006. project may be generating new activity at the expense Across the street, construction is beginning on the of existing activities. The biggest concern remains the mammoth Power & Light District project being Power & Light District. The debt payment on that developed by the Cordish Co., based in Baltimore, project is projected to jump to $18 million in 2009 and Maryland. Two blocks to the east, the Sprint Center the $8 million reserve fund available this year will Arena opened in 2007. The Federal Reserve Bank of have been depleted. If the district cannot substantially Kansas City is moving employees into its new $200 increase 2008's projected $4.8 million in revenues, it million facility near Grand Boulevard and Main Street could leave the City with a significant shortfall to and J.E. Dunn Construction Co. recently broke ground cover. In addition, even though the Sprint Center has on its new, $60 million corporate headquarters on hosted 140 events and drawn 1.3 million people, downtown's east side. Construction was also begun exceeding its original projections of 90 events and 1 on the $326.0 million Kauffman Metropolitan Kansas million spectators for the first year, the $276 million City Performing Arts Center. Plans call for two 1,600- arena remains without a promised major-league tenant. seat halls, one for symphonic music, the other for A major component in the public's approval of an

43 initiative to finance most of the project with taxes on city later decided was unworkable and too costly. hotel stays and car rentals was the prospect of a Two years ago, voters approved a 27-mile route that National Basketball Association (NBA) or National would have run from the zoo to the airport-but did Hockey League (NHL) team guaranteeing 40 to 50 not require a tax increase. The city repealed that plan dates. Complicating matters is that no team in the because it diverted money from an existing bus tax. NHL has moved since 1997. The only NBA team to relocate since 2002 was the Seattle Super Sonics, According to Moody's Economy.com the Kansas City whose owner Clay Bennett moved the club to his area economy is expected to contract through the hometown of Oklahoma City this summer when he middle of 2009 as recent developments in the financial could not get a new, publicly financed arena built in system will likely deepen the current downturn. Seattle. Neither league presently has plans for Moody's Economy.com predicts that employment will expansion. AEG has a three-year period of exclusivity decrease in the Kansas City economy in the near term to attract a major-league tenant. consistent with national trends. The housing market will continue to be a drag on the Kansas City area's The winning proposal for a gaming facility in growth. In response to oversupply and low demand, Wyandotte County was a Hard Rock casino to be home prices have fallen significantly over the last year located next to Kansas Speedway. The speedway's and will continue to decline in the near future. Home $705 million proposal was chosen for a 15-year affordability is also improving in Kansas City, and contract to build and manage a state-owned casino in will continue this trend as home prices fall to more Wyandotte County. The winning proposal developed sustainable levels. by Cordish, the Baltimore-based developer of Kansas City's Power & Light District, was expected to bring a Moody's Economy.com expects per capita personal Hard Rock branded casino with 3,000 slots, 140 table income growth to slow significantly as the current games and 300 hotel rooms, and more than 275,000 recession results in greater unemployment and slower square feet of retail, dining and entertainment wage growth in the near term. Per capita income attractions. An interim facility was planned to open by growth is expected to continue the current deceleration next June with 2,000 slots and 75 table games. A to a below average pace in coming years. This should second NASCAR cup race, an infield road course for be somewhat offset, however, by a relatively low cost sports car racing, and an annual Camping World of living, which has fallen in recent years when national RV rally were also anticipated. An estimated compared to the nation. Low living costs and modest $241 million in casino revenue, at least 22 percent of per capita income growth will allow most consumers which was to go to the state. to maintain similar spending patterns while also continuing to attract new residents to the area. Kansas Entertainment withdrew its plans for a $705 I million resort at the Kansas Speedway in Wyandotte County because of tight credit markets and a poor economy. Although private companies will finance, Kansas & Adjacent States Metro build and operate the casinos, the state law upheld by Areas' Employment Trends the Kansas Supreme Court in 2008 declared that the state "owns" the business of gaming. The state will This section presents employment trends through get a minimum 22 percent cut of gross revenue, with October 2008 by major industry types for the region an additional 5 percent off the top for local host that includes Colorado, Kansas, Missouri, Nebraska, governments and a state fund to aid compulsive and Oklahoma. In 2005, the Office of Management gamblers and Budget (OMB) updated Census 2000-based statistical areas using population estimates for 2003. In November, Kansas City voters dramatically Relative to the 1990s, the updated lists added 49 new, reversed course and turned down a light-rail tax by a Metropolitan Statistical Areas while revising resounding margin. Only 44 percent of voters backed definitions of existing Metropolitan Statistical Areas. an extra 318-cent sales tax for a 14-mile light-rail line. The list also identified for the first time 578 This was a vastly different outcome than two years Micropolitan Statistical Areas. Additionally, the OM. ago, when Kansas City voters approved a plan that the designated and defined two new sets of statistical areas that include 125 Combined Statistical Areas and 25 these areas solely for statistical purposes. The Metropolitan Divisions in the most populous classification is intended to provide nationally Metropolitan Statistical Areas. New England City and consistent definitions for collecting, tabulating, and Town Areas also are defined as an alternative to the publishing federal statistics for a set of geographic county-based metropolitan and micropolitan areas in areas. Table 3-5 presents employment growth rates the six New England states. for 22 of the 24 metropolitan areas in the five-state region from October 2007 through October 2008. As The OMB is responsible for maintaining and updating mentioned previously, data are no longer being statistical area classifications, a task it has tabulated for smaller MSA's such as Lawrence, accomplished every decade since the 1950 census. Kansas and Lawton, Oklahoma. Also there are only The OMB establishes and maintains the definitions of limited data available for other MSA's such as Table 3-5 Metropolitan Area Employment Growth Rates, October 2007-October 2008 Kansas & Adjacent States

Const. Trade, Educ.1 Leisure1 Total & Manu- Trans, & Infor- Finan. ProflSus Health Hosp. Other Govern- Nonfarm Mining facturing Utilities mation Activ. Services Services Services Services ment Kansas Topeka 0.5 (1.7) -- (1.0) 4.2 -- 2.1 1.2 1.3 2.1 0.7 Wichita (0.3) (1.7) (1.1) (0.6) (4.8) -- (2.3) 1.9 -- (3.7) 2.7 Kan. City, KS (0.5) (10.0) (3.3) (0.9) 1.8 (1.2) -- 1.3 (2.4) 1.2 3.5 Colorado Boulder1 Longrnont 1.4 (2.9) (1.1) (0.4) 1.1 1.3 2.0 3.6 3.5 3.9 1.9 Colorado Springs (0.6) (5.6) (4.2) (1.2) (2.6) (2.9) (1.9) 4.1 -- -- 1.9 Denver1 Aurora 0.1 (2.5) (2.2) (0.5) (1.0) (1.3) (1.3) 3.3 1.4 1.5 2.8 Fort Collins1 Loveland -- (2.8) (0.8) (1.3) 4.0 (3.4) (0.6) 5.0 (2.4) 6.4 0.7 Grand Junction 3.9 10.6 (3.0) 1.5 11.1 2.9 7.5 2.3 4.1 -- 3.1 Greeley 1.1 2.7 6.5 (0.7) -- -- (3.8) 3.8 (1.4) -- 0.6 Pueblo 0.3 (9.1) (4.4) -- -- (4.5) -- 4.2 4.8 4.8 -- Missouri Columbia 0.1 NA NA 2.0 NA NA NA NA NA NA (0.3) Jefferson City (0.2) NA NA 3.5 NA NA NA NA NA NA 0.7 Joplin 1.4 NA (2.0) 2.4 NA NA NA 1.7 NA NA 4.9 Kan. City, MO (0.5) (3.1) (6.2) (0.5) (2.1) (3.1) -- 1.5 1.5 (0.8) 1.8 St. Joseph MO-KS (0.2) NA NA 1.7 NA NA NA NA NA NA (1.0) St. Louis MO-IL (0.9) (0.6) (4.2) (0.4) (1.6) (0.9) (1.1) 1.4 (0.8) (0.5) (1.2) Springfield 0.2 2.9 (7.7) 0.9 -- -- (0.5) 2.8 (0.5) 1.1 1.1 Nebraska Lincoln 0.6 2.5 (0.6) (1.2) (3.4) 2.4 1.0 2.0 (0.6) -- 1.6 Omahat Council Bluffs, NE-IA 0.6 2.3 0.3 (1.8) (4.8) 1.8 0.9 3.0 1.8 9.8 (1.9) Oklahoma Oklahoma City 1.1 5.8 0.5 1.8 (0.8) (0.9) 1.6 3.3 1.9 1.8 (2.6) Tulsa 0.1 4.7 0.2 0.6 (6.7) 0.4 (3.7) 2.4 1.2 3.3 (2.0) All Area Average 0.0 (0.5) (2.3) (0.2) (1.3) (0.8) (0.7) 2.4 0.5 1.3 0.6 Source: US. Department of Labor, Bureau of Lnbor Statistics

45 Columbia, Missouri, Jefferson City, Missouri, Joplin, increase in trade, transportation, and public utilities Missouri, and St. Joseph, Missouri-Kansas. employment growth, followed by Joplin, Missouri with a 2.4 percent increase, and Columbia, Missouri with a 2.0 percent increase. Wichita ranked 14th with Employment by Industry Type a 0.6 percent decrease in trade, transportation, and public utilities employment, Kansas City, Kansas Total nonfarm employment in the major labor markets ranked 16th with a 0.9 percent decrease, and Topeka in the five-state area remained unchanged from ranked 17th with a 1.0 percent decrease in trade, October 2007 to October 2008. Grand Junction, transportation, and public utilities employment. Colorado led the five-state area in employment growth with a growth rate of 3.9 percent. It was followed by Information. Information employment in the major Boulder/Longmont, Colorado and Joplin, Missouri metropolitan areas in the five-state region decreased with growth rates of 1.4 percent each. Out of the 22 1.3 percent in 2008. Grand Junction, Colorado had the major markets in the five-state area, Topeka ranked highest growth rate in the five-stare area at 11.1 8th with a growth rate of 0.5 percent, while Wichita percent, followed by Topeka with a 4.2 percent growth ranked 17th with a 0.3 percent decrease in nonfarm rate, and Ft. Collins/Loveland, Colorado with a 4.0 employment, and Kansas City, Kansas ranked 19th percent growth rate. Kansas City, Kansas ranked 4th with a 0.5 percent decrease. with a 1.7 percent growth rate and Wichita ranked 16th with a 4.8 percent decrease in information Construction & Mining. Total construction and employment. mining employment in the major labor markets in the five-state area decreased 0.5 percent in 2008. Grand Financial Activities. Financial activities employment Junction, Colorado led the five-state area in in the major metropolitan areas in the five-state region employmefit growth with a growth rate of 10.6 decreased 0.8 percent in 2008. Within the five-state percent. It was followed by Oklahoma City, region Grand Junction, Colorado experienced the Oklahoma with a growth rate of 5.8 percent, and highest growth in financial activities employment at Tulsa, Oklahoma with a growth rate of 4.7 percent. 2.9 percent, followed by Lincoln, Nebraska with 2.4 Out of the 22 major markets in the five-state area, percent growth, and Omaha/Council Bluffs, Topeka ranked ninth with a 1.7 percent decrease, Nebraskdowa with 1.8 percent growth. Topeka and Wichita ranked tenth with a 1.7 percent decrease, and Wichita ranked eighth with financial activities Kansas City, Kansas ranked 17th with a 10.0 percent employment remaining unchanged, while Kansas City, decrease in construction and mining employment. Kansas ranked 12th with a 1.2 percent decrease in financial activities employment.

Manufacturing. Manufacturing employment in the Professional & Business Services. Professional and major metropolitan areas in the five-state region business services employment in the major decreased 2.3 percent in 2008. Greeley, Colorado led metropolitan areas in the region decreased 0.7 percent the five-state area with 6.5 percent growth in in 2008. Grand Junction, Colorado had the highest manufacturing employment, followed by Oklahoma growth rate in professional and business services City, Oklahoma with 0.5 percent growth, and employment in the five-state area at 7.5 percent, Omaha/Council Bluffs, Nebraskdowa with 0.3 followed by Topeka at 2.1 percent and percent growth. Topeka ranked fifth with no change in Boulder/Longrnont, Colorado 2.0 percent growth. manufacturing employment, while Wichita ranked Kansas City, Kansas ranked seventh in the five-state eighth with a 1.1 percent decrease, and Kansas City, area with professional and business services Kansas ranked 13th in the five-state area with a 3.3 employment remaining unchanged, while Wichita percent decrease in manufacturing employment. ranked 15th with 2.3 percent decrease in professional and business services. Trade, Transportation, & Public Utilities. Trade, transportation, and public utilities employment in the Education & Health Services. Education and health major metropolitan areas in the five-state region services employment in the major metropolitan areas decreased 0.2 percent in 2008. Jefferson City, in the region increased 2.4 percent in 2008. Fort Missouri led the five-state area with a 3.5 percent Collins/Loveland, Colorado had the highest growth rate in education and health services employment at to October 2008. The civilian labor force increased in 5.0 percent, followed by Pueblo, Colorado at 4.2 all of the state's 11 secondary labor markets during percent and Colorado Springs, Colorado at 4.1 percent. 2008. Lyon County experienced the highest rate of Wichita ranked 13th in the five-state area with 1.9 increase at 3.0 percent, followed by Montgomery percent growth, while Kansas City, Kansas ranked County with a 2.6 percent growth rate, and Crawford, 17th with 1.3 percent growth, and Topeka ranked 18th Ellis, and Ford Counties with a 1.6 percent increases with 1.2 percent growth. each. Similarly, employment increases were experienced in all of the state's secondary labor Leisure & Hospitality Services. Leisure and markets in 2008. Ford and Lyon Counties experienced hospitality services employment in the major the highest rate of growth at 1.2 percent each, metropolitan areas in the region increased 0.5 percent followed by Montgomery County at 0.9 percent. in 2008. Pueblo, Colorado had the highest growth rate However, more importantly, the unemployment rate in leisure and hospitality services employment at 4.8 increased in all of the state's 11 secondary labor percent, followed by Grand Junction, Colorado with markets in 2008. The unemployment rate increased by 4.1 percent growth, and Boulder/Longmont, Colorado 1.8 percentage points in Lyon County, while the followed with 3.5 percent growth. Topeka ranked unemployment rate increased 1.6 percentage points in eighth with 1.3 percent growth, while Wichita ranked Montgomery County, and the unemployment rate 1 lth with leisure and hospitality services remaining increased 0.9 percent in Ellis County. constant, while Kansas City, Kansas ranked 17th with a 2.4 percent decrease in leisure and hospitality services employment. County Personal Income Other Services. Other services employment in the major metropolitan areas in the five-state region Both the levels and the components of personal increased 1.3 percent in 2008. Omaha, Nebraska had income are important in understanding local the highest growth rate in other services employment economies. Because of this effect, county persoqal at 9.8 percent, followed by Ft. Collins/Loveland, income is presented in this section. Colorado at 6.4 percent, and Pueblo, Colorado at 4.8 percent. Topeka ranked sixth with 2.1 percent growth in other services employment, while Kansas City, Total Personal Income Kansas ranked ninth with 1.2 percent growth, and Wichita ranked 17th with 3.7 percent decrease in other Total personal income in Kansas grew at a 6.3 percent services employment. rate in 2007. Johnson County generated the highest level of personal income with $28.0 billion, followed Government. Government employment in the major by Sedgwick County with $19.3 billion. Butler, metropolitan areas in the five-state region increased Cowley, Crawford, Douglas, Harvey, Leavenworth, 0.6 percent in 2008. Joplin, Missouri experienced the McPherson, Miami, Montgomery, Reno, Riley, Saline, highest growth in government employment with a 4.9 Shawnee, and Wyandotte Counties each generated percent growth rate, followed by Kansas City, Kansas over $1.0 billion of personal income in 2007. The with a 3.5 percent growth rate, and Grand Junction, lowest levels of income were recorded in Comanche, Colorado with a 3.1 percent growth rate. Wichita Greeley, and Wallace Counties, each with less than ranked fifth with a 2.7 percent growth rate, while $50.0 million in total personal income. Topeka ranked 11th with 0.7 percent growth in government employment. The highest growth rates of personal income in 2007 were recorded in Stanton County which experienced a 48.0 percent rise, followed by Wichita County with 24.8 percent growth, and Haskell County with 24.5 Regiona1Labor Market percent growth. At the other extreme, Comanche, Cheyenne, and Gove Counties all experienced declines Table 3-6 on the following page presents employment in personal income in excess of 5.0 percent. However, trends for the 11 selected counties from October 2007 it should be kept in mind that these rates of change

47 Table 3-6 County Employment October 2007-October 2008

Percentage Change fiom October 2007 to October 2008 ------Barton Craw. Ellis Finney Ford Lyon McPher. Mont. --- Reno Riley Saline Place of Residence Data Civilian Labor Force 1.2 1.6 1.6 1.2 1.6 3.0 1.3 2.6 1.3 1.3 1.5 Employment 0.7 0.7 0.7 0.8 1.2 1.2 0.7 0.9 0.7 0.7 0.7 Unemployment 19.2 21.7 44.5 16.2 16.0 56.1 20.0 42.0 19.1 22.7 27.8 Unemployment Rate 0.5 0.8 0.9 0.4 0.3 1.8 0.5 1.6 0.6 0.6 0.7

Place of Work Data All Industries Ag., For., Fish., & Hunt. Mining Utilities Construction Manufacturing Wholesale Trade Retail Trade Trans. & Warehousing Information Finance & Insurance R.E. & Rental & Leasing Prof & Tech. Services Mgmt. of Cos. & Ent. Adm. & Waste Services Educational Services *.. ' Health & Social Assist. Arts, Ent., & Recreation Accom. & Food Sew. Other Services Government Farm Employment

Sozrrce: Ks Dept. of Labor, Labor Mlit. Info. Service may be distorted by erratic fluctuations in the farm to population. The areas with higher population economy. density generally have higher total salaries and wages. Salaries and wages in Kansas grew at a 6.1 percent Of the state's major urban counties, Johnson County rate in 2007. Johnson County and Sedgwick County had the highest personal income growth in 2007 at 7.2 ranked first and second, with salaries and wages of percent, followed by Sedgwick County with 6.7 $1 5.4 billion and $1 1.5 billion, respectively. Shawnee percent growth, Shawnee County with 3.1 percent and Wyandotte Counties each generated over $3.0 growth, and Wyandotte County with a 1.2 percent billion of salaries and wages in 2007. During that decrease in personal income. Appendix D presents same year, Hodgeman and Wallace Counties had the county personal income by major components for lowest salaries and wages total with less than $15.0 2006. Appendix E shows county personal income million each. estimates by major components for 2007. Figure 3-1, which is shown on page 52, presents the percent Other Labor Income. While the correlation between change in county personal income fiom 2006 to 2007. salaries and wages disbursements and other labor income is not exact, the two are closely related. Salaries & Wages. Salaries and wages are distributed County rankings are nearly the same for both across the state in a pattern that generally corresponds components. Other labor income in Kansas grew at a rate of 3.7 percent in 2007. Johnson County ranked payments across the state generally reflects county first with $3.1 billion in other labor income, followed population. Collectively, the state's four urban by Sedgwick County at $3.0 billion. At the other end counties received over $6.0 billion in transfer of the spectrum, Wallace and Greeley Counties payments, while Greeley County received less than generated less than $4.0 million of other labor income, $1 0.0 million. each. Residence Adjustment. Because personal income is Farm Proprietors' Income. The relative importance measured on a residence basis, an adjustment must be of farm proprietors7 income, as a component of total made for out-of-county earnings. A residence personal income, varies among the 105 Kansas adjustment is made for salaries and wages, other labor counties. While there are many measured components income, and for both farm and nonfarm proprietors' of farm owners' income, the major determinants are income. The residence adjustment for Kansas farm production of crops and livestock, profitability of declined 3.8 percent in 2007. For the state as a whole, farm operations, and federal government payments to the 2007 residence adjustment was $867.6 million. farmers. Farm proprietors' income is larger and out of The positive value indicates that, in total, Kansans proportion in agriculturally-oriented counties because earn more income out-of-state than non-Kansans earn of large-scale production, high profitability, and in Kansas. government support payments. In 2007, farm proprietors' income rose 267.7 percent. Gray County Within Kansas, four situations are present that relate to had the highest farm proprietors7 income in 2006 at residence adjustment. First, for most counties, this $48.2 million, followed by Haskell County with $39.8 component is relatively small. Second, there are million, Ford County with $34.3 million, and Stanton considerable earnings by Riley County residents in County with $33.9 million. Geary County associated with Fort Riley. The third situation relates to out-of-county earnings provided in two of the large Kansas counties. For example, the Nonfarm Proprietors' Income. The net earnings of Sedgwick County residence adjustment is negative unincorporated business owners constitute nonfarm ($1,670.5 million.) Most of this income appears in proprietors' income. County size also is a major bordering counties. For neighboring Butler County, determinant in the distribution of this income the adjustment is positive ($877.1 million). Thus, component. Nonfarm proprietors' income grew at an Sedgwick County provides earnings and jobs for 8.3 percent rate in 2007. Johnson County had the Butler County residents. A similar situation exists for highest level of nonfarm proprietors' income at $3.1 Shawnee County. The other such situation exists in billion followed by Sedgwick County with $2.6 the Kansas City area. The Wyandotte County billion. Greeley, Hodgeman, Wallace, and residence adjustment is negative ($1,790.3 million), Washington Counties had the lowest with less than indicating that the county provides net earnings for $5.0 million of nonfarm proprietors' income each. residents of other counties and perhaps for Missouri residents. Johnson County is unique in that its Dividends, Interest, & Rent. Dividends, interest, and residence adjustment is positive ($1,294.5 million) and rent increased by 6.9 percent in 2007. This category more than the state's overall residence adjustment of represents a large component of personal income in $867.6 million. Besides providing jobs for residents Johnson County. In fact, the $5.5 billion of dividends, of bordering counties, even larger earnings of Johnson interest, and rents in that county account for nearly County residents come from the Missouri side of the one-third of the state total. Sedgwick County also had Kansas City area. over $3.2 billion of dividends, interest, and rent. Only Comanche, Greeley, Hamilton, and Wallace Counties Personal Social Insurance Contributions. Personal had less than $10.0 million in dividends, interest, and contributions for social insurance in Kansas grew at a rents in 2006. 4.3 percent rate in 2007. Because of the definition of the Social Security tax base, personal contributions for Transfer Payments. Transfer payments in Kansas social insurance are closely related to the distribution grew at 5.5 percent rate in 2007 and are largely Social of salaries and wages, as well as positive proprietors' Security benefits. The distribution of transfer income. Personal contributions for social insurance exceeded $500.0 million in each of the state's four The Four Urban Counties major urban counties during 2007. Johnson County's contributions totaled $2,346.1 million and Sedgwick 1, K~~~~~,it also is important to examine personal County's were $13792.7 million- Shawnee followed income levels and related components for the state's with contributions of $574.1 million and Wyandotte four urban counties. ~h~~~ counties are Sedgwick, had $566.0 million. Johnson, Wyandotte, and Shawnee.

Per Capita Personal Income Total Personal Income

Per capita income for each county may be obtained by In 2007, Johnson, Sedgwick, Shawnee, and Wyandotte dividing the total personal income of the county by the accounted for 42.3 percent of the state's population total population of the county. The population data and 56.1 percent of the state's total personal income. used for these calculations were estimates of county This indicates that per capita income is higher in the population as of July 1, 2007, based on the U.S. four urban counties than in the state as a whole. Bureau of the Census' Current Popztlation Reports. Wyandotte County per capita income of $24,209 is Figure 3-2, which is shown on page 52, presents per significantly below the state average of $36,843, while capita personal income by county for 2007. Sedgwick County at $40,561 and Shawnee County at $33,670 are both slightly above the state average. Johnson County at $53,143 is 45.7 percent above the In 2007y Kansas per capita income was $36y483. state average. For the four urban counties, the average Johnson County had the highest Per capita income at per capita income is $42,749, or 17.2 percent, higher $53,143, followed by Stanton County at $46,796, than the state average. Sedgwick County at $40,561, and Chase County at $40,003. The lowest per capita income was in These four counties generate 64.1 percent of non-farm Comanche County at $18,422. It should be noted that proprietors' income; 63.5 percent of Kansas' salaries county per capita income may fluctuate dramatically and wages; 62.9 percent of personal contributions for from year to year because of the inherent volatility of social insurance; 59.6 percent of the other labor the farm economy, coupled with the relatively low income; 58.9 percent of dividend, interest, and rent population in many rural counties. income; and 44.8 percent of Kansas' transfer payments. Only for farm proprietors' income and The relatively low-income counties in rural Kansas residence adjustment do these four counties sum to a generally tend to have a high reliance on the farm small share of the Kansas total. Johnson or Sedgwick economy. Specifically, these counties have a negative, rank either first or second among the 105 counties in or low, farm proprietors' income. In the eastern half most income components, as well as total income. of the state, particularly the southeastern portion of Shawnee and Wyandotte rank third and fourth. Kansas, low-income counties are primarily those that have relatively high population densities, but are not part of major urban areas. Regional Personal Income

The counties with high per capita incomes are Because boundaries of economic activity do not associated with two conditions. First, most relatively necessarily respect political boundaries, comparisons high per capita income counties are rural and of county income do not necessarily provide an agricultural and, for the most part, are in the accurate measure of the economic performance of a southwestern part of the state. Second, three of the geographic area. Income that is concentrated in a state's major urban counties have high per capita small area is subject to greater variability than is incomes. This income influences not only the core income spread over a wide area. For example, county of the metropolitan area, but also many personal income measures the income received by bordering counties that provide the place of residence individuals on the basis of their residence location and for individuals who are employed, but may not live in is not directly concerned with the location of earnings. the core counties. Thus, a residence adjustment is necessary for each county for two reasons. First, the residence adjustment which had total personal income of $27.3 billion in is necessary to account for inter-county commuting to 2007. The lowest personal income was realized in work. Second, it is necessary to account for some Region VIII in northwest Kansas at $81 1.4 million. income components, such as farm proprietors' income, where the location of the residence may be far Generally, regional population rankings correspond to removed from the location of the income generation. regional personal income rankings. High incomes are associated with large populations. Thus, population An additional problem exists for states such as Kansas and personal income are highly concentrated in the where farm income is sizeable. Extreme fluctuations state. Accordingly, 73.3 percent of the total personal in small-area farm earnings occur particularly because income is located in Regions I and IV. Less than 1.0 of variable weather conditions and the changing percent of the state's total is located in Region VIII. location of farm products marketing. Recent income and population growth have been County data provide helpful insights because they may uneven across Kansas. In 2007, total personal income be aggregated over larger regions. For this report, rose by 6.3 percent across the state. The most rapid Kansas has been divided into 11 planning regions, growth was in Regions VII, VI, and XI with 9.7 which may be considered the "official" aggregation. percent, 9.5 percent, and 7.9 percent growth, Figure 3-3 presents total personal income by region for respectively. Region VIII experienced the smallest 2006 and 2007, while Figure 3-4 presents the increase in personal income in 2007 at 4.1 percent. percentage change in total personal income by region from 2006 to 2007 and per capita income for 2007. In terms of per capita personal income, Region I ranked first at $40,511, followed by Region IV at In terms of total personal income, the 2007 average for $37,732. Region VII, in southwest Kansas, had the the 11 regions is $9.2 billion. Region I, which lowest per capita income at $28,736. The extent of the surrounds Kansas City, has the highest level of inequality in regional income is evident because a 41.0 personal income with $47.0 billion. The only other percent difference exists in per capita income from the region that is above the average total personal income highest income region to the lowest income region. per region is Region IV, which surrounds Wichita, This is significant by any measure. Figure 3-1. Percent Change in County Personal Income, 2006-2007

Figure 3-2. Per Capita Personal Income, 2007 (Dollars in Thousands) Figure 3-3. Total Personal Income, by Region, 2006 & 2007 (Dollars in Millions)

Region XI 2006: $2,049 - Region VIII Region IX - 2006: $780 2006: $1,966 2006: $2,749 - 2007: $812 2007: $2,061 - 2007: $2,892 1 \ -- 2006: $6,088 - Region I - 2007: $6,557 - 2006: $44,373 - I - 2007: $46,970 - Region VII - J 2006: $2,615 1 I - Region IV - 2007: $2,867 . - 2006: $25,569 Region I1 2006: $1,351 Regi0n 2007: $27,283 - 2o06: $47641 - 2007: $1,480 - 2006: $3,054 -- - 2007: $4,870 - 2007: $3,271 I

Figure 3-4. Percent Change in Total Income (2006 & 2007) & 2007 Per Capita Income, by Region

I 1 1 Region VIII Region IX - Region X Region XI 7.9% - , 4.1% 4.8% 5.2% $28,824 $31,167 $30,780 - 1- - - I -Region III 7.7% Region I I I I $31,951 -- 5.9% - I - $40,511 - Region VII - 9.7% - 1 $28,736 A I Region IV - 6.7% - Region I1 - $37,732 5 .O% - $27,950 - Chapter 4

Kansas Demographics

Overview population of all cities in Kansas is 2,269,073, which represents 81.7 percent of the total population.

The U.S. Census Bureau projects that the U.S. will Of the 20 largest cities in Kansas, five have become more ethnically and racially diverse, as well as populations that exceed 100,000, including Wichita much older by 2050. Roughly one-third of the current (361,420), Overland Park (169,403), Kansas City U.S. population, minorities are expected to become the (142,320), Topeka (122,642), and Olathe (1 18,034). majority in 2042 and by 2050, the U.S. is projected to These cities are all located in the eastern half of the be 54 percent minority. Minorities will comprise more state. The western half of Kansas encompasses six of than half of all children by 2023. The U.S. Census the 20 largest cities in Kansas, including Salina Bureau also projects that as the baby boomers become (46,458), Hutchinson (40,668), Garden City (26,629), 65 and older, in 2030 nearly one of five U.S. residents Dodge City (25,737), Liberal (20,128), and Hays will be 65 and older. By 2050, this age group is (20,106). Of these six cities, only Hays and Salina's projected to increase to 88.5 million, more than populations increased over the last year. doubling- the nearly 38.7 million in 2007. The 85 and 'lder population group is to more than The population that resides in the unincorporated, or triple between 2007 and 2050 from 5.4 million to 19 rural, areas in Kansas totals 506,924, which has million. increased 418 since 2006. Also, there are 431 cities with populations of less than 1,000 people which is an According to the Census Bureau, the total population increase of three cities from 2006. These 431 cities in the United States was 301,621,157 on July 1, 2007, have a total combined population of 132,801 which is which is an increase of 0.7 percent from 2006. Kansas 1,578 more than last year. The unincorporated areas, had a total population of 2,775,997 on July 1, 2007, when combined with cities with populations of less which represents 0.9 percent of the total national than 1,000 people, account for 23.0 percent of the total population and is an increase of 0.4 percent from 2006. population. This is a slight decrease from last year's This figure was certified on July 1, 2008. By state level of 23.1 percent of the total population. In 2000, statute (KSA 11-201), the official population of 24.3 percent of the total population resided in Kansas is certified from the latest estimates released unincorporated areas and cities of less than 1,000 by the Bureau of the Census. As of April 1, 2000, the people. Kansas population was 2,688,418. On July 1, 2007, the population for calendar year 2006 was certified at There are 569 cities in Kansas that have a population 2,775,997. This certification serves as the official of less than 5,000 people. These cities have a total population of the state. The certified population for population of 428,510 which is 7,526 less people Kansas, including all counties and townships is shown residing in this category of cities than last year when in Appendix F. the total population was 436,036. When the total population of these cities is combined with the rural As the population in Kansas continues to increase, the areas, 33.7 percent of the total population is cities with populations of more than 5,000 are represented. Last year, 34.1 percent of the total realizing the greatest proportion of the increase. population resided in rural areas and cities with Historically, Kansas has been predominantly rural. populations of less than 5,000. However, that trend is changing. Of the 627 cities in Kansas, 58 have populations that exceed 5,000; 569 According to the U.S. Census Bureau, Kansas gained have populations of less than 5,000; and 431 have 11,922 people in the most recent year and ranked 33rd populations of less than 1,000 people. The total nationally in terms of population gain. The greatest population growth in the U.S. occurred in Texas, these estimates sum to the national estimate, which is which gained 396,597 people during that same period. used as a control. North Carolina ranked second with 204,527, and Georgia ranked third with an increase of 180,809 The annual estimates help identify population shifts, as people. In terms of percentage growth, Utah outpaced well as trends and potential changes in some federal the rest of the nation with growth rates of 3.7 percent. grants-in-aid formulas. The total state population and Nevada and Arizona tied for second with a growth rate a state's proportion of the national total are factors in of 2.8 percent, and North Carolina and Colorado tied some formulas used to calculate federal grant-in-aid for third with a rate of 2.3 percent. The growth rate program allotments, including the Social Services for Kansas was 0.4 percent. In terms of percentage Block Grant and the annual state private activity bond decline, Rhode Island had the largest decrease in limitations. However, for most grant-in-aid programs, population with a 0.9 percent rate. The State of changes in population do not affect allocations directly. Louisiana has begun to rebound from a 4.9 percent population decrease in 2006 due to Hurricane Katrina Annual estimates in population change because of two to a 0.1 percent increase in 2007. California remains factors: migration and natural growth. Migration the most populated state with over 36.5 million refers to the net effect of migration into and out of residents. each state. In 2007, there were 6,017 individuals who migrated into Kansas from another country, a decrease The West North Central (WNC) Region in the of 1,436 (19.3 percent) from 2006. During that same Midwest, which includes Kansas, grew at a slower rate year, the internal, or state-to-state, migration for (0.5 percent) than the nation as a whole (0.7 percent). Kansas was -2,550, compared to -7,370 in 2006. The WNC region also includes Iowa, Minnesota, Natural growth refers to the additions to population Missoyri, Nebraska, North Dakota, and South Dakota. from births and the subtractions from deaths. There Among the WNC states, South Dakota realized the were 40,828 births and 24,132 deaths in Kansas in greatest growth rate (1 3). South Dakota was followed 2007. by Minnesota, Missouri, and North Dakota (0.6), Nebraska and Kansas (0.4 percent), and Iowa, (0.2 The variables used to produce population estimates are percent). The resident population for the U.S., based on data series that capture both migration and national regions, states, and Kansas counties for 2000 natural growth: Variables include vital statistics, such through 2007 is shown in Appendix G. as births and deaths, school statistics from state and parochial school systems, and data from federal The data used in this report are based on both full income tax returns. Also incorporated into the count census information and on estimates. Because estimates are data pertaining to housing permits both methods are presented, a brief discussion of each issued, certificates of occupancy, and utility hookups. methodology follows. The latter three variables were included in the methodology beginning with the 1997 estimates. The inclusion of these variables is a significant change in the methodology because, prior to 1997, no housing variables were included. Analysis indicates the U*S*Census Bureau's inclusion has improved the accuracy of the estimates. of Estimating State Populations The Census Bureau offers cautions about comparing National population estimates are formulated by using decennial census numbers with intercensal model- the latest decennial census data as a benchmark and based estimates. It is important to note that incorporating administrative data from federal differences between decennial census estimates and agencies. Currently, the 2000 census serves as the model-based estimates are ambiguous estimates of benchmark. Each year following a decennial census, changes in the levels of income or poverty at the the benchmark is statistically adjusted using numerous county level. The ambiguity arises because these variables, and a national estimate is reached. The next differences reflect both, changes in the levels of step is to formulate estimates for each state, county or income and poverty and differences in the methods by parish, city, and township in the United States. All of which the two cross-sectional estimates were made. For more information, see the Bureau's explanation at now the benchmark from which all population http://www.census.gov/hhes/www/saipe/techdoc/centa estimates are derived through 2009. The decennial ble.htm1. census assists in determining how much money states will receive in a number of federal grant programs There is uncertainty associated with all estimates. For because several of the programs include population this reason, the Bureau quantifies the uncertainty count as a component of their distribution formulas. through confidence intervals. A confidence interval is a range of values that describes the uncertainty The electoral effects of the census are understood surrounding an estimate. The Bureau indicates a fairly well because of the effect on congressional seats. confidence interval by its endpoints. For example, the Less understood is the interaction between the 90.0 percent confidence interval for the number of population count and federal grant programs. The people, of all ages, in poverty in the United States in U.S. Supreme Court ruled that for the purposes of 1995 based on the March 1996 Current Population reapportioning seats in the House of Representatives, Survey is "35,534,124 to 37,3 15,094." sampling techniques are prohibited. However, the ruling does not prohibit sampling from being used to A confidence interval is also itself an estimate. It is allocate funds for federal formula grant programs. made using a model of how sampling, interviewing, measuring, and modeling contribute to uncertainty According to the General Accounting Office, there are about the between the true value of the 22 large grant programs that in part On quantity that is being estimated and the estimate of that data derived from the decennial census. Medicaid is value. How a confidence interval is intemreted is the largest program. The three large formula grant important. The cc90.~ in the cinfidence programs that do not use census data are special interval listed above represents a level of certainty education; the administrative portion of the nutrition about the estimate. If new estimates were made program for women, infants, and children; and low- repeatedly using the same procedure, the confidence income home energy assistance- intervals would contain the average of all the estimates 90.0 percent of the time. This unknown average is treated as valid because the modeling procedure used by the Census Bureau is defmed as the official Poverty measure, for example, of poverty. In these cases, the Bureau has produced a single estimate in a way that, if Important items that are determined from the decennial repeated indefinitely, would result in 90.0 percent of census are the poverty thresholds because they serve the confidence intervals formed containing the true as a measure of need for a household. Poverty value. The Census Bureau routinely employs 90.0 thresholds originated in 1964. The thresholds were percent confidence intervals. derived using the U.S. Department of Agriculture's food budgets, which were designed for families under Confidence intervals are one way to represent how economic stress. The thresholds also used other data "good" an estimate is; the larger a 90.0 percent relating to what portion of those families' incomes was confidence interval for a particular estimate, the more spent on food. caution is required when using the estimate. Confidence intervals are an important reminder of the Although the methodology has evolved, poverty limitations of the estimates. thresholds are still the dollar amounts used to determine poverty status. Currently, each person or family is assigned one out of 48 possible poverty thresholds. Thresholds vary according to the size of the family and the ages of the family members. The Decennial Census Although the thresholds in some sense reflect families' Each decennial census yields a wealth of data that are needs, they are intended for use as a statistical important to a diversified user-group. The actual yardstick, not as a complete description of what people count for 2000 was completed on April 1, 2000, and is and families need to live. The official measure of poverty was established by the Office of Management For example, a family has five members, including and Budget in Statistical Policy Directive 14 and is to two children, their mother, their father, and the be used by federal agencies in their statistical work. children's great-aunt. The appropriate threshold is $25,364 for a five-member household with two related Government aid programs are not required to use the children under the age of 18. Assume that the family official poverty measure as eligibility criteria. In fact, members' income in 2005 was $30,000, of which many government aid programs use a different poverty $12,000 was earned by the mother, $8,000 was earned measure, such as the Department of Health and Human by the father, and $10,000 was earned by the great- Services Poverty Guidelines or its variants. aunt. Neither child earned any income. To determine this family's poverty status, the family's total income Each aid program may define eligibility differently. is compared with the family's threshold. Because its However, the official poverty data come from the income was greater than the threshold, this family is Annual Social and Economic Supplement to the not "in poverty" according to the official definition. Current Population Survey, which formerly was called the Annual Demographic Supplement or simply the Two other measures that are derived from these data "March Supplement." are the Ratio of Income to Poverty and the Income SurpluslDeficit. The ratio is calculated by dividing the The same thresholds are used throughout the United family's total money income by the threshold. The States and do not vary geographically. In addition, the example family's ratio of income to poverty is 1.18. thresholds are updated annually for inflation using the The difference in dollars between total family income Consumer Price Index for All Urban Consumers. and the family's poverty threshold is called the Income Appendix H presents the poverty thresholds for 2007. SurpluslDeficit. For families in poverty, their income The thresholds are used by comparing total family is less than the threshold and it is called an "income "money" income with the established thresholds. For deficit." An "income surplus" occurs for families individuals who do not live with family members, their above poverty when its income is greater than the own income is compared with the appropriate threshold. The example family's income surplus was threshold. If total family income equals or exceeds the $4,636 ($30,000 minus $25,364). threshold, the family (or unrelated individual) is not in poverty. If total family money hmne is less than the People whose poverty status cannot be determined are threshold appropriate for that family, the family is in not included in any poverty statistics produced by the poverty- If a family is determined to be in poverty, all Census Bureau. Those not included are individuals family members have the same poverty status. living in institutional group quarters (such as prisons or nursing homes), college dormitories, military Income is the primary component used to compute barracks, and living situations without conventional poverty status. The official measure of income that is housing (and who are not in shelters). In addition, used by the U.S. Census Bureau is "money income." unrelated individuals under age 15, such as foster It includes earnings; unemployment compensation; children, are not included. The reason for this workers compensation; Social Security; Supplemental exclusion is that income questions are asked of people Security Income; public assistance; veterans payments; only age 15 and older. survivor benefits; pension or retirement income; interest; dividends; rents; royalties; income from estates; trusts; educational assistance; alimony; child support; assistance from outside the household; and other miscellaneous sources. Non-cash benefits, such School District Populations as food stamps and housing subsidies, do not count. Income is the total of all these sources before taxes, The school district estimates provided in Appendix I and it excludes any capital gains or losses. The are derived from the U.S. Census Bureau's school income of all family members is aggregated to district mapping project. The latest mapping project determine the household income. The income earned for which data are available was conducted at the same by non-relatives living in the household, such as time as the 2000 Census. The school district boundary housemates, is not included in a household's income. survey is conducted biennially. The survey used for

57

h this project asks each state's Department of Education of estimates of the insured and uninsured populations for a list of all school districts and their boundaries. at the state level. The SIPP is useful mainly for examining the dynamics of health insurance coverage The population and poverty estimates for each as it changes over time. estimate-year are produced for all school districts identified in the most recent boundary update. The The CPS is a monthly survey of approximately 50,000 boundary year does not always match the year to households conducted by the Census Bureau for the which the estimates refer. For example, the 2007 Bureau of Labor Statistics, and the data are used poverty estimates were produced for school districts in primarily to estimate the unemployment rate. The existence for the 2006-2007 school year. The Bureau Annual Social & Economic Szpplement (ASEC) to the uses the most current list of school districts and CPS, a survey of approximately 78,000 households, associated geography because it allows for efficient includes detailed heaIth insurance questions asked of allocation of funds under the No Child Left Behind the household respondent for every household Act of 2001 for which the estimates are produced. resident. Respondents are asked about health insurance coverage in the previous calendar year. The ASEC A listing of the population estimates for each school provides a consistent historical time series at the district in Kansas in 2005 is shown in Appendix I. national level and can be used to examine state-level This is the most recent year for which data are trends and differences by using multi-year averages. available. Also included in the appendix is the "head However, the large sampling errors of state-level data count," or actual enrollment numbers, for 2005, which limit its usefulness. was provided by the Kansas Department of Education. It should be noted that the count fiom the Kansas The ASEC is perhaps the most widely used source of Department of Education may not match the Census data on health insurance coverage in the United States Bureau's estimate. There are several reasons for the and is the official source of estimates used to allocate difference, but the most significant is that the number federal funding to states for the State Children's of individuals who are in private or parochial schools Health Insurance Program. and those who are home schooled are not included in the Department's figures. The ASEC provides reliable estimates of the net change in the number of uninsured people from one year to the next. However, it does not show how long a person remains uninsured, what percentage of the Health Insurance Coverage uninsured population remains uninsured in the following year, or how many people obtain coverage. The U.S. Census Bureau also provides statistics on Neither does it show any changes in a person's health insurance coverage. The Bureau collects health coverage within a given year. insurance data using two national surveys, which are the Current Population Survey (CPS) and the Survey These more dynamic measures of health insurance of Income and Program Participation (SIPP). coverage are available from the SIPP. Unlike the ASEC, which is not designed to follow the same The surveys differ in the length because of the detail respondents in consecutive years, the SIPP is a of the questionnaire, the number of households longitudinal survey. This means that the SIPP interviewed, the methodology used to collect and interviews the same respondents three times a year process the data, and, consequently, in the health over the course of three to four years. insurance coverage estimates that are produced. As a result, it is important to understand that different Nationally, the number of people with health insurance surveys and methods produce different results, and coverage increased by 3.6 million in 2007 from 249.8 when it is appropriate to use each survey or method. million to 253.4 million. The total number insured represents 84.7 percent of the total population. In The CPS is useful mainly for examining timely Kansas, the total number insured represents 87.3 estimates of the insured and uninsured population at percent of the total population. The number of people the national level. The CPS also is useful as a source in Kansas with health insurance decreased by 11,000, which represents a 0.4 percentage point decrease in the unchanged from 2000 to 2005. Proportionally, this coverage rate from 2006 to 2007. Appendix J shows cohort represents 7.1 percent of the total state the health insurance coverage status in the U.S. and population and is up 1.0 percent from last year. In Kansas from 1990 to 2007. 2000, this cohort represented 7.0 percent of the total state population.

The population of school age children five to 19 years Demographics of age totaled 581,010 in 2007. This is a 1,445 person decrease, or 0.2 percent, since 2006 and a 28,700 Demographics are the components included in the person decrease, or 4.9 percent, since 2000. population. The categories used by the U.S. Census Proportionally, this cohort represents 20.9 percent of Bureau include age, race, gender, and ethnicity. The the total state population. In 2006, it represented 21.1 demographic make up of Kansas is becoming more percent of the total state population. In 2000, children diverse. Historically, the population of Kansas has five to 19 years represented 22.7 percent. been predominantly of the White race and non- Hispanic in ethnicity. The same overall make up In 2007, the population from 20 to 64 years of age was remains; however, the proportion of Hispanic ethnicity 1,638,633 and represented 59.0 percent of the total displays an upward trend. state population. Last year it also represented 59.0 percent and in 2000, it represented 57.1 percent. This Appendix K presents the dynamics between the cohort increase by 8,822 people, since last year and decennial census in 2000 and the estimates for 2001 increased by 104,862, or 6.8 percent, since 2000. through 2007. Each category, including total population by age, race, gender, and ethnicity is In 2000, the estimated population of Kansans who shown. The table also shows each category as a were 65 years of age and older was 356,229. In 2007, percent of the relevant total population. that. number was 360,2 16, which is an increase of 1.1 percent from the 2000 level and a 0.7 percent increase over last year. This cohort represents 13.0 percent of Kansas' total population in 2007. During that same year, there were 37.9 million people over the age of 65 in the nation. This report identifies five age categories, including under five years of age, five to 19 years of age, 20 to The elderly are generally considered to be those who 64 years of age, 65 years of age and older, and 85 are 85 years of age or older. In 2000, there was an years of age and older. It should be noted the category estimated 4.2 million individuals over the age of 85 in of 85 years of age and older is a subcategory of 65 the U.S., representing 12.4 percent of the total U.S. years of age and older. population. During that same year in Kansas, 51,770 individuals were over the age of 85, which represented Analysis indicates the population of Kansas is aging, 1.9 percent of the total state population. In 2007, there but at a slower pace than the rest of the United States. were 60,712 individuals who were 85 years of age and As of July 1, 2007, there were 2,775,997 people in older in Kansas which represents 2.2 percent of Kansas with a median age of 36.2 years, which is only Kansas' total population. This age cohort realized an slightly younger than the national median age of 36.6 increase of 1,194, or 2.0 percent, since 2006 and years. In addition, when the trends for age are 8,942, or 14.7 percent, since 2000. examined, most notably, the population of school age children has seen the most significant decrease since 2000, while the older cohorts remain relatively Race constant. Race and Hispanic origin are distinctly different Included in the 2007 total are 196,138 people who are concepts. The concept of race as used by the Census less than five years of age. This is an increase of Bureau is one of self-identification and is directly 2,028 from 2006. This category remained virtually correlated to the race or races with which people most closely identify. These categories are socio-political Some Other Race. This category includes all other constructs and should not be interpreted as being responses that are not included in one of the categories scientific or anthropological in nature. In addition, the listed above. Respondents providing write-in entries Census Bureau's race categories include both racial such as multiracial, mixed, interracial, Wesort, or a and national-origin groups. Hispanic/Latino group (for example, Mexican, Puerto Rican, or Cuban) also are included here. The racial classifications used by the Census Bureau are also used in this report and adhere to the October Two or More Races. This category encompasses the 30, 1997 Federal Register notice entitled "Revisions responses where individuals chose to self-identify with to the Standards for the Classification of Federal Data two or more races by checking two or more race on Race and Ethnicity." This report was issued by the response check boxes, by providing multiple write-in Office of Management and Budget. It is important to responses, or by some combination of the two. remember that the data gathered on race in Census 2000 are completely different from previous censuses. Between 2000 and 2006, the demographic makeup by Direct comparisons cannot be made. The racial race and by age has remained relatively stable with classifications presently used are: only minor shifts. In 2007, 88.9 percent of the population self-identified as white alone, while 6.1 White. A person having origins in any of the original percent self-identified as black alone, and 1.0 percent peoples of Europe, the Middle East, or North Africa. as American Indian or Alaska Native alone. Only 2.2 It includes people who indicate their race as "white" or percent self-identified as Asian alone; only 0.1 percent report entries such as Irish, German, Italian, Lebanese, self-identified as Native Hawaiian and other Pacific Wear Easterner, Arab, or Polish. Islander alone; and 1.8 percent self-identified as two or more races. Black or African American. A person having origins in any of the black racial groups of Africa. It includes people who indicate their race as 'cBlack, African Gender American, or Negro" or provide written entries such as African American, Afro-American, Kenyan, Nigerian, This category is determined by self-classification or Haitian. based on gender as either male or female. In 2007, the total Kansas population consisted of 1,376,3 1 1 males American Indian & Alaska Native. This category and 1,399,686 females, which is a ratio of 0.983 male includes those who have origins in any of the original to 1.00 female. This ratio was 0.977:1.00 in 2000. peoples of North and South America (including The chronology of data indicates there were more Central America) and who maintain an attachment to males than females from birth through middle age. By their community or tribe. 65 years of age, the number of females is greater than Asian. A person would choose this category if his or the number of males, with the ratio increasing as the her origins are in any of the original peoples of the Far population ages. The percentage breakdown and ratio East, Southeast Asia, or the Indian subcontinent, in each age cohort have remained relatively constant including, for example, Cambodia, China, India, from 2000 through 2007. The 65 years of age and Japan, Korea, Malaysia, Pakistan, the Philippine older category is the first to show more females than Islands, Thailand, and Vietnam. This category males. For the population that is 85 years of age and includes those who self-identify as Asian Indian, older, the difference between males and females is Chinese, Filipino, Korean, Japanese, Vietnamese, and even more marked. Other Asian.

Native Hawaiian & Other Pacific Islander. This Ethnicity category includes those who have origins in any of the original peoples of Hawaii, Guam, Samoa, or other The U.S. Bureau of the Census categorizes ethnicity as Pacific islands. It includes people who indicate their either Hispanic or non-Hispanic. People who identify race as Native Hawaiian, Guamanian or Chamorro, with the terms "Hispanic" or "Latino" are those who Samoan, and Other Pacific Islander. classify themselves in one of the specific Hispanic or Latino categories-Mexican, Puerto Rican, or Cuban- individuals. The variety of uses includes a diversified' as well as those who indicate that they ,are "other user base that includes all levels of government, the Spanish, Hispanic, or Latino." Interestingly, origin media, businesses, special interest groups, and can be viewed as the heritage, nationality group, individuals. lineage, or country of birth of the person or the person's parents or ancestors before their arrival in the By state statute, on July 1 of each year Kansas certifies United States. Those individuals who self-identify as the official state population the U.S. Census their origin as Spanish, Hispanic, or Latino may be of Bureau's most recent population estimates for sub- any race. county areas. Unlike the annual certification, the state's population projections are not required to be In 2007, there were 244,306 Hispanic individuals in produced each year. As a general rule, the Kansas Kansas, which represented 8.8 percent of the total Division of the Budget publishes updated population population, an increase of 6,880 persons which is a 2.8 projections every three to five years. percent increase from 2006. In 2000, there were 188,252 Hispanic individuals in Kansas, which was Since the 2000 Census, the projections have been 7.0 percent of the total population. All age cohorts updated twice. The first set was produced in 2002. show the same relative increase from 2000 through The most recent set was produced in November 2006 2007. when the Kansas Division of the Budget contracted with Moody's Economy.com to produce population projections, which allows Kansas to fulfill its obligation to provide timely, accurate, and useful data. Kansas Population Projections This independent method provides valuable feedback to the U.S. Census Bureau. Appendix L shows the In Kansas, population estimates and projections are population projections for Kansas and all counties, by widely used by state agencies, local governments, and age, for 2009 through 2020.

Appendix A Kansas Personal Income, 2006-2007 1 (Dollars in Thozlsarx&) Percent Change

Personal Income Nonfarm Earnings Farm Earnings Earnings by Place of Work Less: Personal Contributions for Social Insurance Plus: Adjustment for Residence Equals: Net Earnings by Place of Residence Plus: Dividends, Interest, & Rent Plus: Transfer Payments Equals: Personal Income

Salary & Wage Disbursements Other Labor Income Proprietors' Income Farm Proprietors' Income Nonfarm Proprietors' Income Farm Earnings Nonfarm Earnings Private Earnings Forestry, Fishing, Related Activities, & Other Forestry & Logging Fishing, Hunting, & Trapping Agriculture & Forestry Support Activities Other Mining Oil & Gas Extraction Mining (except Oil & Gas) Support Activities for Mining Utilities Construction Construction of Buildings Heavy & Civil Engineering Construction Specialty Trade Contractors Manufacturing Durable Goods Manufacturing Wood Product Manufacturing Nonmetallic Mineral Product Manufacturing Primary Metal Manufacturing Fabricated Metal Product Manufacturing Machinery Manufacturing Computer & Electronic Product Manufacturing Electrical Equipment & Appliance Manufacturing Motor Vehicle Manufacturing Trans. Equipment Mfg. Excl. Motor Vehicles Furniture & Related Product Manufacturing Miscellaneous Manufacturing ~ Nondurable Goods Manufacturing Food Manufacturing Beverage & Tobacco Product Manufacturing Textile Mills I Textile Product Mills Apparel Manufacturing Leather & Allied Product Manufacturing Appendix A (cont'd) Icansas Personal Income, 2006-2007 (Dollars in Thousands) Percent Change

Nondurable Goods Manufacturing (continued) Paper Manufacturing Printing & Related Support Activities Petroleum & Coal Products Manufacturing Chemical Manufacturing Plastics & Rubber Products Manufacturing Wholesale Trade Retail Trade Motor Vehicle & Parts Dealers Furniture & Home Furnishings Stores Electronics & Appliance Stores Building Material & Garden Supply Stores Food & Beverage Stores Health & Personal Care Stores Gasoline Stations Clothing & Clothing Accessories Stores Sporting Goods, Hobby, Book, & Music Stores General Merchandise Stores Miscellaneous Store Retailers Nonstore Retailers Transportation & Warehousing Air Transportation Rail Transportation Water Transportation Truck Transportation Transit & Ground Passenger Transportation Pipeline Transportation Scenic & Sightseeing Transportation Support Activities for Transportation Couriers & Messengers Warehousing & Storage Information Publishing Industries, except Internet Motion Picture & Sound Recording Industries Broadcasting, except Internet Internet Publishing & Broadcasting Telecommunications ISPs, Search Portals, & Data Processing Other Information Services Finance & Insurance Monetary Authorities-Central Bank Credit Intermediation & Related Activities Securities, Commodity Contracts, Investments Insurance Carriers & Related Activities Funds, Trusts, & Other Financial Vehicles Real Estate & Rental-Leasing Real Estate Rental & Leasing Services Lessors of Nonfmancial Intangible Assets Professional & Technical Services Management of Companies & Enterprises Administrative & Waste Services Administrative & Support Services Waste Management & Remediation Services Appendix A (cont'd) Kansas Personal Income, 2006-2007 (Dollars in Thousands) Percent Change 2006 - 2007 Educational Services 7.9 % Health Care & Social Assistance 6.6 Ambulatory Health Care Services 6.9 Hospitals 6.3 Nursing & Residential Care Facilities 5.7 Social Assistance 7.3 Arts, Entertainment, & Recreation 5.5 Performing Arts & Spectator Sports 11.6 Museums, Historical Sites, Zoos, & Parks 6.0 Amusement, Gambling, & Recreation 3.3 Accommodation & Food Services 2.0 Accommodations 10.6 Food Services & Drinking Places 0.4 Other Services, except Public Administration 7.2 Repair & Maintenance 11.7 Personal & Laundry Services 2.6 Membership Associations & Organizations 5.3 Private Households 10.4 Government & Government Enterprises 6.7 Federal, Civilian (1.2) Military 17.1 State & Local 6.1 State Government 6.2 Local Government 6.0

Source: US. Department of Commerce, Bureazr of Economic Anabsis Estinzates of earnings are based on the 2002 North American Industry ClassiJcationSystem (PMICS). (D) Not shoivn to avoid discloszrre of con$dential iilforinafion,but estimatesfor this item are included in total. Appendix B State Personal Income & Growth Rates, 2005-2007 (Dollars in Thousands) Per Capita Personal Income Percent Change Personal Income Percent Change Rank 05-06 06-07 Rank 2007 Rank 05-06 06-07 Rank United States 7.1 6.0 % 38,564 Far West 3 7.7 5.6 7 Great Lakes 4 4.7 5.4 8 Mideast 2 6.9 6.1 5 New England 7 7.0 6.2 4 Plains 6 5.1 6.6 2 Rocky Mountain 8 8.0 6.4 3 Southeast 1 8.0 5.7 6 Southwest 5 8.5 7.1 1 Alabama 25 5.9 5.9 29 Alaska 48 7.5 5.3 38 Arizona 18 9.3 4.5 48 Arkansas 33 6.6 6.9 14 California 1 7.6 5.2 43 Colorado 22 7.3 6.0 27 Connecticut 23 7.7 7.0 12 Delaware 45 7.6 4.4 49 District of Columbia 44 6.3 6.6 17 Florida 4 8.8 4.6 46 Georgia 11 5.9 6.0 26 Hawaii 40 7.3 5.9 28 Idaho 41 8.7 7.1 11 Illinois 5 5.9 7.2 10 Indiana 17 5.5 4.4 50 Iowa 30 4.2 7.0 13 Kansas 32 8.1 6.3 19 Kentucky 28 6.1 5.2 4 1 Louisiana 24 25.9 10.1 4 Maine 42 5.0 5.5 33 Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire Appendix B (cont'd) State Personal Income & Growth Rates, 2005-2007 (Dollars in Tlzoz~sands) Per Capita Personal Income Percent Change Personal Income Percent Change 2007 - Rank 05-06 06-07 Rank 2007 Rank 05-06 06-07 Rank New Jersey 427,673,716 7 7.4 5.7 32 49,238 3 New Mexico 60,287,108 37 6.5 6.0 25 30,604 47 New York 900,511,325 2 7.3 6.4 18 46,664 6 North Carolina 305,023,249 13 6.3 6.8 15 33,663 37 North Dakota 23,000,715 51 2.4 12.0 1 35,955 27 Ohio 395,709,754 8 4.2 4.7 44 Oklahoma 126,279,662 29 9.5 8.1 6 Oregon 131,261,193 27 8.1 6.1 24 Pennsylvania 481,640,806 6 6.1 5.7 30 Rhode Island 42,008,417 43 5.4 5.3 40 South Carolina 136,851,452 26 8.0 5.4 36 South Dakota 28,396,069 47 1.3 11.7 2 Tennessee 205,468,743 19 6.2 5.3 39 Texas 884,601,064 3 8.3 7.7 8 Utah 79,596,974 35 8.4 5.3 37 Vermont 23,263,546 50 7.6 6.6 16 Virginia 320,522,538 10 7.0 4.6 47 Washington 265,605,273 14 8.5 8.0 7 West Virginia 53,080,267 39 6.1 5.2 42 Wisconsin 203,008,249 20 6.0 5.7 3 1 Wyoming 24,593,003 49 13.4 10.6 3

Source: US. Department of Commerce, Bureau of Ecoi~omicAnalysis Appendix C State Disposable Income & Growth Rates, 2005-2007 (Dollars in Thousands) Per Capita Disnosable Income Percent Change Dis~osableIncome Percent Change 2007 Rank 05-06 06-07 Rank 2007 Rank 05-06 06-07 Rank United States 10,140,209,000 6.4 5.3 % 33,619 5.4 4.3 % Far West Great Lakes Mideast New England Plains Rocky Mountain Southeast Southwest Alabama 134,022,950 25 5.0 5.5 25 Alaska 24,626,654 48 7.0 4.7 39 Arizona 184,226,024 19 8.8 4.1 45 Arkansas 76,656,266 33 6.2 6.5 12 California 1,303,722,951 1 7.0 4.5 42 Colorado 172,802,011 22 6.2 5.0 32 Connecticut 158,362,898 23 7.0 5.9 17 Delaware 30,194,544 45 7.7 4.4 44 District of Columbia 30,900,413 44 5.5 6.1 16 Florida 617,463,380 4 8.7 4.1 46 Georgia 279,544,508 10 5.1 5.4 26 Hawaii 44,103,267 40 7.0 5.6 21 Idaho 41,905,940 41 7.6 6.4 13 Illinois 458,796,55 1 5 5.0 6.8 10 Indiana 186,511,963 16 5.0 3.9 49 Iowa Kansas Kentucky Louisiana Maine Maryland 223,328,986 15 5.4 5.5 24 Massachusetts 267,607,793 12 6.4 5.4 27 Michigan 308,310,701 9 2.0 3.7 51 Minnesota 184,274,728 18 4.6 5.8 18 Mississippi 75,912,691 34 6.0 5.7 20 Missouri 176,596,873 21 4.3 4.8 35 Montana 28,192,520 46 5.8 7.6 6 Nebraska 56,903,541 36 2.9 6.9 9 Nevada 89,155,100 31 7.2 4.6 4 1 New Hampshire 48,389,434 38 6.5 4.1 48 Appendix C (cont'd) State Disposable Income & Growth Rates, 2005-2007 (Dollars in Thousands) Per Capita Disposable Income Percent Change Disposable Income Percent Change 2007 Rank 05-06 06-07 Rank 2007 Rank 05-06 06-07 Rank New Jersey 365,508,736 7 7.0 4.8 36 42,081 3 6.9 4.6 28 New Mexico 53,953,239 37 5.6 5.6 22 27,389 46 4.2 4.1 31 New York 748,746,170 3 6.2 5.2 29 38,800 7 6.1 5.1 18 North Carolina 266,601,245 13 5.4 6.2 15 29,423 39 3.1 3.9 34 North Dakota 20,782,141 50 1.0 12.0 1 32,487 24 0.8 11.6 1 Ohio 346,985,851 8 3.7 4.4 43 Oklahoma 112,563,077 29 8.6 8.0 5 Oregon 113,868,221 28 7.6 5.8 19 Pennsylvania 421,100,095 6 5.4 5.2 30 Rhode Island 36,912,321 43 4.8 5.0 33 South Carolina 121,565,520 26 7.4 4.9 34 South Dakota 25,838,064 47 -0.1 11.7 2 Tennessee 186,230,606 17 5.3 4.7 40 Texas 793,165,118 2 7.5 7.0 8 Utah 69,314,929 35 7.2 4.1 47

Vermont 20,598,008 5 1 7.1 6.3 14 Virginia 275,485,660 11 6.5 3.7 50 Washington 236,467,996 14 7.7 7.3 7 West Virginia 47,852,153 39 5.8 4.8 37 Wisconsin 177,676,3 10 20 5.3 5.3 28 Wyoming 21,394,749 49 11.0 9.8 4

Source: US.Department of Conzmerce, Bureau of Econornic Analysis Appendix D Kansas County Personal Income, 2006 (Dollars in Thousands) Less: Personal Salaries Other Dividends, Contributions Total & Labor Proprietors' Income Interest, Transfer Adj. for for Social Personal County Wages Income Farm Nonfarm & Rent Payments Residence Insurance Income

Allen $1 68,606 $47,211 ($4,846) $36,757 ($962) $28,439 Anderson 55,725 14,352 (2,762) 17,090 44,207 10,391 Atchison 215,641 55,070 2,264 28,448 (2,848) 35,437 Barber 51,571 13,669 (5,703) 22,990 1,490 9,573 Barton 411,217 96,259 2,214 127,474 (3,685) 69,468

Bourbon 193,761 47,220 (2,696) 26,276 (8,720) 32,165 Brown 141,706 39,151 2,455 22,699 (759) 22,743 Butler 520,282 146,750 1,044 172,873 751,868 89,473 Chase 21,129 6,210 4,676 19,649 23,067 4,519 Chautauqua 21,927 5,857 (1,992) 21,224 16,789 4,943 Cherokee 172,349 45,927 398 66,520 89,067 31,652 Cheyenne 22,645 5,455 (2,658) 5,911 1,147 3,970 Clark 24,478 6,205 (5,083) 7,419 3,457 3,717 Clay 79,479 20,404 53 1 40,688 47,932 14,776 Cloud 97,967 25,534 300 13,781 7,693 17,009

Coffey 164,984 55,050 (839) 33,066 (31,255) 25,784 Comanche 16,243 4,611 (4,248) 6,544 1,334 2,959 Cowley 465,188 123,702 (402) 59,133 63,689 76,008 Crawford 519,173 132,627 (1,216) 7,706 (13,893) 80,992 Decatur 23,182 5,771 143 7,186 2,840 4,221

Dickinson 193,392 52,363 3,002 15,946 98,208 33,202 Doniphan 82,320 24,571 3,418 9,240 21,241 13,207 Douglas 1,567,118 380,389 (3,084) 223,740 355,937 237,100 Edwards 28,947 7,024 6,047 7,604 5,422 4,804 Elk 16,933 4,969 (2,778) 6,529 13,709 3,324

Ellis 441,416 102,375 2,069 129,990 (3,879) 72,45 1 Ellsworth 65,733 17,733 (512) 14,159 2,522 11,040 Finney 536,236 129,195 6,803 87,312 (26,847) 81,206 Ford 489,120 123,064 12,863 65,702 (24,447) 74,848 Franklin 291,272 65,607 (243) 38,984 144,337 46,939

Geiuy 1,050,575 538,166 (2,957) 29,544 (745,590) 140,620 Gove 29,83 1 8,049 (5,160) 10,076 1,486 4,980 Graham 30,680 7,501 (3,070) 18,179 3,520 5,797 Grant 126,333 30,029 1,956 26,325 (13,447) 19,255 Gray 70,778 17,209 18,115 15,403 9,066 10,447

Greeley $16,416 $3,773 $1,510 $3,297 ($1,303) $2,275 Greenwood 49,628 12,710 2,038 18,045 3 1,225 9,548 Hamilton 26,250 6,582 5,287 7,112 (172) 3,899 Harper 63,977 18,081 (4,476) 21,563 15,694 11,440 Harvey 429,338 101,669 4,691 164,208 88,701 77,382

Haskell 48,132 11,080 15,908 11,600 6,695 6,860 Hodgeman 13,513 4,124 5,303 2,832 4,768 2,121 Jackson 125,983 29,849 (4,236) 46,087 90,506 21,904 Jefferson 107,452 27,761 (2,239) 11,727 232,966 18,510 Jewel1 22,738 6,738 4,141 10,901 7,913 4,314 Appendix D (cont'd) Kansas County Personal Income, 2006 (Dollars irz Thousands) Less: Personal Salaries Other Dividends, Contributions Total & Labor Proprietors' Income Interest, Transfer Adj. for for Social Personal County Wages Income Farm Nonfarm & Rent Payments Residence Insurance Income

Johnson 14,471,481 2,999,534 2,481 2,844,057 Keamy 40,586 10,267 3,023 5,042 Kingman 75,375 18,672 (3,452) 22,935 Kiowa 32,728 8,307 (733) 7,949 Labette 269,061 69,402 (2,358) 41,719

Lane Leavenworth Lincoln Linn Logan

Lyon McPherson Marion Marshall Meade

Miami 254,363 60,170 (6,157) 26,769 120,475 151,137 459,293 41,012 1,025,038 Mitchell 93,179 23,019 4,276 10,645 35,387 38,841 (12,647) 14,828 177,872 Montgomery 508,300 137,114 (1,449) 76,821 137,396 238,578 (34,811) 85,798 976,150 Morris 43,983 12,120 (932) 9,831 26,092 34,472 39,703 8,549 156,720 Morton 44,591 11,430 (6,384) 6,890 14,361 18,086 (803) 6,615 81,556

Nemaha 125,657 32,500 8,306 11,694 83,817 53,000 564 20,312 295,226 Neosho 234,946 56,673 (4,888) 37,326 58,998 107,323 (13,182) 38,321 438,875 Ness 36,227 9,584 (4,015) 22,194 19,345 22,180 6,603 6,997 105,123 Norton 67,547 17,397 (660) 10,594 26,095 30,136 (4,573) 10,687 135,850 Osage 77,048 22,214 (4,33 1) 9,O 18 60,334 92,267 . 179,625 14,107 422,068

Osborne Ottawa Pawnee Phillips Pottawatomie

Pratt Rawlins Reno Republic Rice

Riley 891,991 226,439 17 50,862 306,974 194,589 576,170 129,189 2,117,854 Rooks 56,774 15,344 (291) 15,165 22,849 34,458 4,786 9,803 139,281 Rush 32,161 9,179 (2,861) 6,481 15,644 25,057 2,926 5,627 82,961 Russell 69,357 17,740 (2,829) 14,143 45,980 54,916 (2,582) 12,279 184,445 Saline 1,000,154 240,904 (177) 147,976 360,537 278,443 (129,734) 160,006 1,738,097 Appendix D (cont'd) Kansas County Personal Income, 2006 (Dollars in Thoznands) Less: Personal Salaries Other Dividends, Contributions Total & Labor Proprietors' Income Interest, Transfer Adj. for for Social Personal County Wages Income Farm Nonfarm & Rent Pavments Residence Insurance Income

Scott 57,025 12,201 10,530 12,799 142,600 Sedgwick 10,743,017 2,826,039 (1,589) 2,312,893 18,092,295 Seward 380,059 91,751 4,957 76,639 603,327 Shawnee 3,645,498 859,246 (553) 265,478 5,667,810 Sheridan 23,188 6,044 1,340 17,972 76,794

Sherman 69,453 16,942 1,986 13,130 Smith 34,643 9,368 2,939 9,466 Stafford 35,666 10,006 3,592 10,772 Stanton 24,578 5,620 5,183 5,131 Stevens 62,449 15,752 1,196 13,844

Sumner 171,504 . 47,483 3,295 31,607 Thomas 112,873 27,194 5,064 12,783 Trego 28,93 1 8,030 (6,257) 6,539 Wabaunsee 37,484 . 10,085 (1,595) 14,280 Wallace 13,643 3,358 907 3,106

Washington 48,445 13,708 3,398 3,500 Wichita 26,344 6,222 10,754 7,073 Wilson 125,054 34,974 (3,578) 20,060 Woodson 18,743 5,858 1,297 9,522 Wyandotte 3,540,732 920,896 (1,019) 137,906

Total $51,119,143 $12,752,744 $88,708 $8,720,412 Appendix E Kansas County Personal Income, 2007 (Dollars in Thousands) Less: Personal Salaries Other Dividends, Contributions Total & Labor Proprietors' Income Interest, Transfer Adj. for for Social Personal County Wages Income Farm Nonfarm & Rent Payments Residence Insurance Income

Allen $178,072 $48,524 ($86) $39,850 $57,192 $90,853 ($1,727) $29,601 $383,077 Anderson 58,927 14,839 (8,007) 18,330 27,162 49,898 51,185 10,901 201,434 Atchison 229,523 56,629 6,757 29,915 93,197 93,683 (6,073) 37,05 1 466,580 Barber 54,208 14,054 (7,245) 25,851 30,180 36,383 1,817 10,000 145,247 Barton 438,878 99,488 5,582 146,003 170,467 174,055 (4,332) 73,286 956,854 Bourbon 203,293 48,466 (6,014) 27,685 63,265 99,446 (10,277) 33,265 392,599 Brown 149,009 40,376 6,964 24,214 44,524 67,257 (783) 23,571 307,991 Butler 553,869 153,703 2,889 188,637 293,603 301,981 877,101 94,033 2,277,750 Chase 22,569 6,491 12,378 21,102 13,369 17,762 26,368 4,749 115,288 Chautauqua 22,607 5,926 (3,025) 24,576 31,318 32,516 19,909 5,173 128,656 Cherokee 176,264 45,932 871 70,848 65,010 144,916 106,019 32,114 577,746 Cheyenne 23,337 5,489 (9,364) 6,186 13,095 20,541 1,322 4,071 56,534 Clark 25,297 6,324 (5,804) 7,969 11,652 14,473 4,028 3,796 60,142 Clay 83,602 21,064 1,217 43,742 54,890 52,419 60,058 15,394 301,598 Cloud 102,880 26,371 656 14,617 47,791 69,686 8,699 17,694 253,006

Coffey 173,756 58,366 (1,891) 36,066 36,774 56,928 (37,970) 26,747 295,283 Comanche 17,229 4,785 (12,564) 6,907 7,466 12,550 1,515 3,106 34,781 Cowley 489,348 127,175 (810) 63,779 164,836 231,400 76,540 78,732 1,073,535 Crawford 546,473 134,282 (1,822) 7,742 210,586 248,921 (15,856) 83,861 1,046,465 Decatur 23,865 5,779 308 7,570 28,313 21,661 3,397 4,332 86,560

Dickinson 203,258 54,104 7,845 16,676 100,972 108,838 118,320 34,440 575,573 Doniphan 89,104 26,567 12,068 9,686 21,324 45,240 23,691 14,063 213,617 Douglas 1,646,883 384,155 (20,353) 239,559 663,345 388,780 414,175 244,542 3,472,003 Edwards 29,723 7,069 15,238 8,053 16,717 21,339 6,439 4,889 99,689 Elk 17,946 5,131 (5,730) 7,163 10,805 24,334 15,950 3,521 72,078

Ellis 463,703 103,505 4,880 139,798 179,137 143,535 (4,642) 74,906 955,010 Ellsworth 69,000 18,065 (697) 15,308 36,165 39,803 3,541 11,441 169,743 Finney 560,176 132,334 17,450 91,551 132,489 152,185 (31,074) 83,241 971,868 Ford 512,023 126,818 34,286 69,998 139,012 136,067 (28,851) 76,983 912,370 Franklin 304,346 66,566 (146) 40,893 88,043 147,239 166,365 48,246 765,061

gear^ 1,201,982 618,831 (2,983) 30,695 115,426 116,314 (1,010,911) 156,202 913,153 Gove 31,038 8,294 (12,380) 10,861 14,23 1 19,145 1,795 5,146 67,837 Graham 33,217 7,813 (5,172) 19,424 10,280 23,789 4,177 6,183 87,346 Grant 133,506 30,874 4,478 28,180 30,141 32,406 (15,944) 20,042 223,599 Gray 74,115 17,664 48,226 16,227 21,749 22,627 10,394 10,753 200,249

Greeley $16,776 $3,804 $3,714 $3,591 $5,555 $7,158 ($1,518) $2,289 $36,791 Greenwood 52,992 13,136 5,710 19,561 26,43 1 52,263 36,518 10,116 196,495 Hamilton 27,246 6,725 12,479 7,727 8,580 14,316 (175) 3,998 72,898 Harper 68,099 18,900 (10,280) 23,599 27,191 41,029 18,377 12,050 174,864 Harvey 446,079 102,440 14,018 175,758 173,124 197,147 103,683 79,3 15 1,132,932

Haskell 50,3 11 11,286 39,797 12,560 24,453 16,242 7,716 7,066 155,300 Hodgeman 13,999 4,205 13,758 2,983 12,864 12,001 5,575 2,183 63,201 Jackson 130,669 30,300 (4,228) 48,314 43,381 68,378 102,3 13 22,43 1 396,697 Jefferson 112,502 28,259 (7,605) 12,340 70,847 95,680 265,806 19,209 558,620 Jewel1 23,702 6,893 11,255 11,668 17,3 13 22,996 8,853 4,484 98,197

73 Appendix E (cont'd) Kansas County Personal Income, 2007 (Dollars in Thoztsands) Less: Personal Salaries Other Dividends, Contributions Total & Labor Proprietors' Income Interest, Transfer Adj. for for Social Personal County Wages Income Farm Nonfarm & Rent Payments Residence Insurance Income

Johnson 15,372,978 3,085,443 6,182 3,077,319 1,941,689 1,294,545 2,346,05 1 27,969,912 Keamy 43,720 10,857 7,385 5,361 19,671 10,993 6,194 110,095 King man 80,012 19,366 (3,683) 24,373 49,947 55,770 13,978 253,111 Kiowa 33,799 8,390 (997) 8,764 25,840 5,742 5,701 90,583 Labette 283,923 71,099 (6,434) 44,170 191,542 10,694 46,220 638,040

Lane 21,413 5,315 4,406 5,407 12,164 12,894 (834) 3,268 57,497 Leavenworth 1,159,032 430,757 (1,850) 119,690 302,374 321,593 133,256 169,836 2,295,015 Lincoln 20,850 6,459 (7,574) 6,65 1 13,678 19,841 13,090 3,910 69,085 Linn 78,885 25,092 (7,753) 11,599 32,722 63,720 73,186 13,456 263,995 Logan 28,972 7,456 (6,930) 7,778 18,799 17,463 (522) 4,955 68,062

Lyon 523,075 133,014 3,380 32,360 155,910 175,795 (28,300) 79,192 916,043 McPherson 536,136 133,018 17,624 140,908 165,356 161,426 (63,367) 86,632 1,004,470 Marion 98,961 25,812 (5,605) 19,419 50,836 76,766 69,700 17,672 318,216 Marshall 159,835 43,762 27,068 28,787 63,383 63,615 (8,480) 30,025 347,945 Meade 45,575 10,966 14,257 8,647 25,323 24,356 14,732 6,634 137,222

Miami Mitchell Montgomery Morris Morton

Nemaha Neosho Ness Norton Osage

Osborne $33,548 $8,472 $933 $15,731 $22,764 $28,003 $761 $6,519 $103,693 Ottawa 37,493 9,709 1,576 9,305 22,564 3 1,260 54,770 6,637 160,042 Pawnee 101,882 27,452 8,534 12,939 27,886 37,117 (4,390) 14,806 196,614 Phillips 69,592 24,178 3,337 19,947 41,149 37,461 (4,010) 12,220 179,434 Pottawatomie 276,635 65,442 375 58,827 86,035 86,282 91,498 43,799 621,296

Pratt 146,459 31,824 550 32,544 62,077 63,719 (8,703) 23,678 304,792 Rawlins 22,917 6,178 (5,484) 14,928 15,372 20,358 2,097 4,517 71,848 Reno 902,396 204,484 14,170 85,843 332,439 385,349 49,312 141,790 1,832,202 Republic 47,864 12,769 11,409 12,698 22,083 34,349 2,953 8,415 135,709 Rice . 103,906 27,244 2,045 13,619 44,769 58,770 23,107 16,758 256,702

Riley Rooks Rush Russell Saline Appendix E (cont'd) Kansas County Personal Income, 2007 (Dollars in Thousands) Less: Personal Salaries Other Dividends, Contributions Total & Labor Proprietors' Income Interest, Transfer Adj. for for Social Personal County Wages Income Farm Nonfarm & Rent Payments Residence Insurance Income

scon 58,438 12,160 30,426 13,617 166,988 Sedgwick 11,524,601 2,982,465 (2,270) 2,561,127 19,308,159 Seward 400,442 94,094 23,269 83,042 649,764 Shawnee 3,786,014 864,772 (855) 271,786 5,841,013 Sheridan 23,851 6,125 2,943 19,889 81,994

Sherman Smith Stafford Stanton Stevens

Sumner 175,358 47,361 8,872 33,555 Thomas 119,529 27,965 11,882 13,089 Trego 31,158 8,495 (6,104) 6,892 Wabaunsee 39,874 . 10,472 (1,961) 15,215 Wallace 14,166 3,414 2,436 3,218

~ Washington 50,310 13,982 10,826 3,590 25,035 38,728 20,381 8,503 154,349 Wichita 26,757 6,197 28,512 7,380 10,617 11,547 (987) 3,793 86,23 1 Wilson 130,814 35,899 (7,919) 21,086 40,733 70,534 (2,533) 21,443 267,172 Woodson 19,753 6,166 3,167 11,169 10,186 26,324 10,035 4,408 82,391 Wyandone 3,755,580 945,248 (3,954) 143,228 307,131 936,236 (1,790,336) 565,960 3,727,174

Total $54,244,838 $13,226,993 $326,219 $9,443,134 $17,236,824 $14,326,418 $867,555 $8,395,769 $101,276,212 Appendix F Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007

Kansas 2,688,418 2,764,075 2,775,997 87,579 11,922 3.2 %

Allen County Bassett city Elsmore city Gas city Hurnboldt city Iola city La Harpe city Mildred city Moran city Savonburg city Bal. of Allen County Carlyle township Cottage Grove township Deer Creek township Bal. of Elm township Bal. of Elsmore township Geneva township Humboldt township Bal. of Iola township Logan township Bal. of Marmaton township Bal. of Osage township Salem township

Anderson County Colony city Garnett city Greeley city Kincaid city Lone Elm city Westphalia city Bal. of Anderson County Indian Creek township Jackson township Lincoln township Bal. of Lone Elm township Monroe township North Rich township Bal. of Ozark township Putnam township Reeder township Bal. of Rich township Bal. of Walker township Washington township Welda township Bal. of Westphalia township Appendix P (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007

Atchison County Atchison city Effingharn city Huron city Lancaster city Muscotah city Bal. of Atchison County Bal. of Benton township Center township Bal. of Grasshopper township Kapioma township Bal. of Lancaster township Mount Pleasant township Shannon township Walnut township

Barber County Hardtner city Hazelton city Isabel city Kiowa city Medicine Lodge city Sharon city Sun City city Bal. of Barber County Aetna township Deerhead township Eagle township Elm Mills township Bal. of Elwood township Bal. of Hazelton township Bal. of Kiowa township Lake City township McAdoo township Bal. of Medicine Lodge township Mingona township Moore township Nippawalla township Bal. of Sharon township Bal. of Sun City township Turkey Creek township Bal. of Valley township

Barton County Albert city Claflin city Ellinwood city Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Barton County (cont'd) Galatia city Great Bend city Hoisington city Olmitz city Pawnee Rock city Susank city Bal. of Barton County Albion township Beaver township Buffalo township Cheyenne township Clarence township Cleveland township Comanche township Eureka township Bal. of Fairview township Grant township Great Bend township Bal. of Independent township Lakin township Liberty township Logan township North Homestead township Bal. of Pawnee Rock township South Bend township South Homestead township Bal. of Union township Bal. of Walnut township Wheatland township

Bourbon County Bronson city Fort Scott city Fulton city Mapleton city Redfield city Uniontown city Bal. of Bourbon County Drywood township Franklin township Bal. of Freedom township Bal. of Marion township Bal. of Marmaton township Mill Creek township Osage township Pawnee township Scott township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Bourbon County (cont'd) Bal. of Timberhill township 158 156 154 (4) (2) (2.6) Walnut township 135 133 132 (3) (1) (2.3)

Brown County Everest city Fairview city Hamlin city Hiawatha city Horton city Morrill city Powhattan city Reserve city Robinson city Sabetha city (pt.) Willis city Bal. of Brown County Bal. of Hamlin township Wiawatha township Irving township Bal. of Mission township Bal. of Morrill township Bal. of Padonia township Bal. of Powhattan township Bal. of Robinson township Bal. of Walnut township Bal. of Washington township

Butler County Andover city Augusta city Benton city Cassoday city Douglass city Elbing city El Dorado city Latharn city Leon city Potwin city Rose Hill city Towanda city Whitewater city Bal. of Butler County Augusta township Bal. of Benton township Bloomington township Bal. of Bruno township Chelsea township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Butler County (cont'd) Clay township Clifford township Bal. of Douglass township El Dorado township Bal. of Fairmount township Fairview township Glencoe township Hickory township Lincoln township Bal. of Little Walnut township Logan township Bal. of Milton township Murdock township Bal. of Pleasant township Bal. of Plum Grove township Prospect township Bal. of Richland township Rock Creek township Rosalia township Spring township Bal. of Sycamore township Bal. of Towanda township Bal. of Union township Walnut township

Chase County Cedar Point city Cottonwood Falls city Elmdale city Matfield Green city Strong City city Bal. of Chase County Bazaar township Cedar township Bal. of Cottonwood township Bal. of Diamond Creek township Bal. of Falls township Homestead township Bal. of Matfield township Bal. of Strong township Toledo township

Chautauqua County Cedar Vale city Chautauqua city EIgin city Niotaze city Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth #Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Chautauqua County (cont'd) Peru city Sedan city Bal. of Chautauqua County Bal. of Belleville township Caneyville township Center township Bal. of Harrison township Bal. of Hendricks township Bal. of Jefferson township Lafayette township Bal. of Little Caney township Salt Creek township Bal. of Sedan township Summit township Washington township

Cherokee County Baxter Springs city Columbus city Galena city Roseland city Scammon city

Treece city ' Weir city West Mineral city Bal. of Cherokee County Cherokee township Crawford township Garden township Lola township Lowell township Bal. of Lyon township Mineral township Neosho township Pleasant View township Bal. of Ross township Salamanca township Shawnee township Sheridan township Spring Valley township

Cheyenne County Bird City city St. Francis city Bal. of Cheyenne County Benkelman township

I Bal. of Bird City township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Cheyenne County (cont'd) Calhoun township Cleveland Run township Jaqua township Orlando township Bal. of Wano township

Clark County Ashland city Englewood city Minneola city Bal. of Clark County Bal. of Appleton township Bal. of Center township Bal. of Englewood township Lexington township Liberty township Sitka township

Clay County Clay Center city Clifton city (pt.) Green city Longford city Morganville city Oak Hill city Vining city (pt.) Wakefield city Bal. of Clay County

Cloud County Aurora city Clyde city Concordia city Glasco city Jamestown city Miltonvale city Bal. of Cloud County Arion township Bal. of Aurora township Buffalo township Center township Colfax township Bal. of Elk township Bal. of Grant township Lawrence township Lincoln township Lyon township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Cloud County (cont'd) Meredith township Nelson township Oakland township Shirley township Sibley township Bal. of Solomon township Bal. of Starr township Summit township

Coffey County Burlington city Gridley city Lebo city LeRoy city New Strawn city Waverly city Bal. of Coffey County Avon township Burlington township Hampden township Key West township Bal. of LeRoy township Bal. of Liberty township Bal. of Lincoln township Neosho township Bal. of Ottumwa township Pleasant township Pottawatomie township Bal. of Rock Creek township Spring Creek township Star township

Comanche County Coldwater city Protection city Wilmore city Bal. of Comanche County Avilla township Bal. of Coldwater township Bal. of Powell township Bal. of Protection township

Cowley County Arkansas City city Atlanta city Burden city Cambridge city Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Cowley County (cont'd) Dexter city Geuda Springs city (pt.) Parkerfield city Udall city Winfield city Bal. of Cowley County Beaver township Bal. of Bolton township Cedar township Bal. of Creswell township Bal. of Dexter township Fairview township Grant township Harvey township Liberty township Bal. of Maple township Bal. of Ninnescah township Bal, of Omnia township Otter township Pleasant Valley township Richland township Rock Creek township Salem township Sheridan township Bal. of Silver Creek township Silverdale township Spring Creek township Tisdale township Vernon township Walnut township Bal. of Windsor township

Crawford County Arcadia city Anna city Cherokee city Frontenac city Girard city Hepler city McCune city Mulbeny city Pittsburg city Walnut city Bal. of Crawford County Baker township Crawford township Grant township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Crawford County (cont'd) Bal. of Lincoln township 55 1 Bal. of Osage township 330 Bal. of Sheridan township 779 Sherman township 520 Bal. of Walnut township 249 Bal. of Washington township 2,011

Decatur County Clayton city (pt.) Dresden city Jennings city Norcatur city Oberlin city Bal. of Decatur County Allison township Altory township Bassettville township Beaver township Center township Cook township Custer township Bal. of Dresden township Finley township Garfield township Grant township Harlan township Bal. of Jennings township Liberty township Bal. of Lincoln township Logan township Lyon township Oberlin township Olive township Bal. of Pleasant Valley township Prairie Dog township Roosevelt township Sappa township Sherman township Summit township

Dicltinson County Abilene city Carlton city Chapman city Enterprise city Herington city (pt.) Hope city Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Dickinson County (cont'd) Manchester city Solomon city (pt.) Woodbine city Bal. of Dickinson County Banner township Buckeye township Bal. of Center township Cheever township Bal. of Flora township Fragrant Hill township Garfield township Grant township Hayes township Bal. of Holland township Bal. of Hope township Jefferson township Bal. of Liberty township Bal. of Lincoln township Logan township Lyon township Newbem township Bal. of Noble township Ridge township Rinehart township Sherman township Union township Wheatland township Willowdale township

Doniphan County Denton city Elwood city Highland city Leona city Severance city Troy city Wathena city White Cloud city Bal. of Doniphan County Burr Oak township Bal. of Center township Independence township Bal. of Iowa township Marion township Bal. of Union township Bal. of Washington township Wayne township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Doniphan County (cont'd) Bal. of Wolf River township 243 228 225 (18) (3)

Douglas County Baldwin City city Eudora city Lawrence city Lecompton city Bal. of Douglas County Clinton township Bal. of Eudora township Grant township Kanwaka township Bal. of Lecompton township Marion township Bal. of Palmyra township Wakarusa township Willow Springs township

Edwards County (32) Belpre city (1) Kinsley city (14) Lewis city (5) Offerle city (2) Bal. of Edwards County (10) Bal. of Belpre township (1) Franklin township (1) Jackson township (1) Kinsley township (1) Lincoln township (2) Logan township (1) North Brown township -- South Brown township (I) Bal. of Trenton township (1) Bal. of Wayne township (1)

Elk County Elk Falls city Grenola city Howard city Longton city Moline city Bal. of Elk County Bal. of Elk Falls township Bal. of Greenfield township Bal. of Howard township Liberty township Bal. of Longton township Appendix P (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Elk County (cont'd) Oak Valley township 154 146 144 (10) (2) (6.9) (1.4) Painterhood township 68 64 63 (5) (1) (7.9) (1.6) Paw Paw township 116 110 108 (8) (2) (7.4) (1.9) Union Center township 116 109 108 (8) (1) (7.4) (0.9) Bal. of Wildcat township 180 169 168 (12) (1) (7.1) (0.6) Ellis County Ellis city Hays city Schoenchen city Victoria city Bal. of Ellis County Big Creek township Buckeye township Catherine township Ellis township Freedom township BaI. of Herzog township Bal. of Lookout township Bal. of Victoria township Wheatland township

Eils.vvorth County Ellsworth city Holyrood city Kanopolis city Lorraine city Wilson city Bal. of Ellsworth County Ash Creek township Black Wolf township Carneiro township Clear Creek township Columbia township Bal. of Ellsworth township Empire township Garfield township Bal. of Green Garden township Langley township Lincoln township Mulberry township Noble township Palacky township Sherman township Thomas township Trivoli township Bal. of Valley township Bal. of Wilson township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2606 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Finney County Garden City city Holcomb city Bal. of Fimey County Garden City township Garfield township Ivanhoe township Pierceville township Pleasant Valley township Bal. of Sherlock township Terry township

Ford County Bucklin city Dodge City city Ford city Spearville city Bal. of Ford County Bloom township Bal. of Bucklin township Concord township Dodge township Enterprise township Fairview township Bal. of Ford township Grandview township Richland township Royal township Sodville township Bal. of Spearville township Wheatland township Wilbum township

Franklin County Lane city Ottawa city Pomona city Princeton city Rantoul city Richmond city Wellsville city Williamsburg city Bal. of Franklin County Appanoose township Centropolis township Bal. of Cutler township Bal. of Franklin township Greenwood township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Franklin County (cont'd) Harrison township Hayes township Homewood township Lincoln township Bal. of Ohio township Ottawa township Peoria township Bal. of Pomona township Bal. of Pottawatomie township Bal. of Richmond towi.~ship Bal. of Williamsburg township

Geary County Grandview Plaza city Junction City city Milford city Bal. of Geary County Blakely township Jackson township Bal. of Jefferson township Liberty township Lyon township Bal. of Milford township Smoky Hill township Wingfield township

Gove County Gove City city Grainfield city Grinnell city Oakley city (pt.) Park city Quinter city Bal. of Gove County Bal. of Baker township Gaeland township Bal. of Gove township Bal. of Grainfield township Bal. of Grinnell township Jerome township Larrabee township Lewis township Bal. of Payne township

Graham County Bogue city Hill City city Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Graham County (cont'd) Morland city Bal. of Graham County Allodium township Bryant township Bal. of Gettysburg township Graham township Happy township Bal. of Hill City township Indiana township Millbrook township Morlan township Nicodemus township Pioneer township Bal. of Solomon township Bal. of Wildhorse township

Grant County Ulysses city Bal. of Grant County

Gray County Cimarron city Copeland city Ensign city Ingalls city Montezuma city Bal. of Gray County Bal. of Cimarron township Bal. of Copeland township Bal. of East Hess township Foote township Bal. of Ingalls township Logan township Bal. of Montezuma township

Greeley County Horace city Tribune city Bal. of Greeley County

Greenwood County Climax city Eureka city Fall River city Hamilton city Madison city Severy city Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Greenwood County (cont'd) Virgil city Bal. of Greenwood County Bachelor township Eureka township Bal. of Fall River township Bal. of Janesville township Bal. of Lane township Bal. of Madison township Otter Creek township Pleasant Grove township Quincy township Salem township Bal. of Salt Springs township Shell Rock township South Salem township Spring Creek township Bal. of Twin Grove township

Hamilton County Coolidge city Syracuse city Bal. of Hamilton County Bear Creek township Bal. of Coolidge township Kendall township Larnont township Liberty township Medway township Richland township Bal. of Syracuse township

Harper County Anthony city Attica city Bluff City city Danville city Freeport city Harper city Waldron city Bal. of Harper County Bal. of Township No. 1 Bal. of Township No. 2 Township No. 3 Bal. of Township No. 4 Bal. of Township No. 5 Township No. 6 Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg

Harvey County Burrton city Halstead city Hesston city Newton city North Newton city Sedgwick city (pt.) Walton city Bal. of Harvey County Alta township Bal. of Burrton township Darlington township Bal. of Emma township Garden township Halstead township Highland township Lake township Lakin township Macon township Bal. of Newton township Pleasant township Richland township Bal. of Sedgwick township Bal. of Walton township

Haskell County Satanta city Sublette city Bal. of Haskell County Bal. of Dudley township Bal. of Haskell township Lockport township

Hodgeman County Hanston city Jetmore city Bal. of Hodgeman County Benton township Bal. of Center township Hallet township Bal. of Marena township North Roscoe township Sawlog township South Roscoe township Sterling township Valley township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 71112006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Jackson County Circleville city Delia city Denison city Holton city Hoyt city Mayetta city Netawaka city Soldier city Whiting city Bal. of Jackson County

Jefferson County McLouth city Meriden city Nortonville city Oskaloosa city Ozawkie city Peny city Valley Falls city Winchester city Bal. of Jefferson County Bal. of Delaware township Fairview township Bal. of Jefferson township ICaw township Bal. of Kentucky township Bal. of Norton township Bal. of Oskaloosa township Bal. of Ozawkie township Bal. of Rock Creek township Rural township Sarcoxie township Bal. of Union township

Jeweil County Burr Oak city Esbon city Formoso city Jewell city Mankato city Randall city Webber city Bal. of Jewell County Allen township Athens township Browns Creek township Bal. of Buffalo township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Jewell County (cont'd) Bal. of Burr Oak township Calvin township Bal. of Center township Erving township Bal. of Esbon township Bal. of Grant township Harrison township Highland township Holmwood township Ionia township Bal. of Jackson township Limestone township Montana township Odessa township Bal. of Prairie township Richland township Sinclair township Vicksburg township Walnut township Washington township White Mound township

Johnson County Bonner Springs city (pt.) De Soto city (pt.) Edgerton city Fairway city Gardner city Lake Quivira city (pt.) Leawood city Lenexa city Merriam city Mission city Mission Hills city Mission Woods city Olathe city Overland Park city Prairie Village city Roeland Park city Shawnee city Spring Hill city (pt.) Westwood city Westwood Hills city Bal. of Johnson County Aubry township Gardner township Lexington township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Johnson County (cont'd) McCamish township 878 991 1,008 130 17 12.9 1.7 Olathe township 1,187 1,108 1,113 (74) 5 (6.6) 0.4 Oxford township 2,020 1,929 1,917 (103) (12) (5.4) (0.6) Spring Hill township 2,059 2,101 2,111 52 10 2.5 0.5

Kearny County Deerfield city Lakin city Bal. of Kearny County Bal. of Deerfield township East Hibbard township Hartland township Kendall township Bal. of Lakin township Southside township West Hibbard township

Kingman County Cunningham city Kingman city Nashville city Nonvich city Penalosa city Spivey city Zenda city Bal. of Kingman County Allen township Belmont township Bal. of Bennett township Canton township Bal. of Chikaskia township Dale township Bal. of Dresden township Eagle township Bal. of Eureka township Evan township Galesburg township Hoosier township Kingman township Bal. of Liberty township Ninnescah township Peters township Richland township Bal. of Rochester township Bal. of Rural township Union township Valley township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Kingman County (cont'd) Vinita township 249 230 225 (24) (5) White township 40 1 345 338 (63) (7)

Kiowa County Greensburg city Haviland city Mullinville city Bal. of Kiowa County

Labette County Altamont city Bartlett city Chetopa city Edna city Labette city Mound Valley city Oswego city Parsons city Bal. of Labette County Canada township Bal. of Elm Grove township Fairview township Bal. of Hackbeny township Howard township Bal. of Labette township Bal. of Liberty township Montana township Bal. of Mound Valley township Bal. of Mount Pleasant township Neosho township North township Osage township Oswego township Richland township Walton township

Lane County Dighton city Bal. of Lane County Alamota township Cheyenne township Bal. of Dighton township White Rock township Wilson township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Leavenworth County 68,691 73,628 73,603 4,912 (25) Basehor city 2,238 3,523 3,729 1,491 206 Bonner Springs city (pt.) -- 8 8 8 -- De Soto city (pt.) -- 1 2 2 1 Easton city 3 62 354 346 (16) (8) Lansing city 9,199 10,705 10,680 1,481 (25)

I Leavenworth city 35,420 34,993 34,787 (633) (206) Linwood city 374 391 389 15 (2) Tonganoxie city 2,728 4,101 4,156 1,428 55 Bal. of Leavenworth County 18,370 19,552 19,506 1,136 (46) Alexandria township 859 1,019 1,026 167 7 DeIaware township 1,361 1,027 1,014 (347) (13) Bal. of Easton township 883 1,024 1,035 152 11 Bal. of Fairmount township 4,028 4,191 4,166 138 (25) High Prairie township 1,768 1,939 1,936 168 (3) Kickapoo township 1,760 1,928 1,925 165 (3) Reno township 1,143 1,293 1,295 152 2 Bal. of Sherman township 1,993 2,156 2,149 156 (7) Bal. of Stranger township 2,245 2,441 2,435 190 (6) Bal. of Tonganoxie township 2,330 2,534 2,525 195 (9)

Lincoln County Barnard city Beverly city Lincoln Center city Sylvan Grove city Bal. of Lincoln County

Linn County Blue Mound city La Cygne city Linn Valley city Mound City city Parker city Pleasanton city Prescott city Bal. of Linn County Bal. of Blue Mound township Centerville township Bal. of Liberty township Bal. of Lincoln township Bal. of Mound City township Paris township Bal. of Potosi township Bal. of Scott township Bal. of Sheridan township Stanton township Valley township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Logan County 3,046 2,675 2,628 (418) (47) (15.9) (1.8) Oakley city (pt.) 2,118 1,851 1,820 (298) (31) (16.4) (1.7) Russell 'Springs city 32 29 28 (4) (1) (14.3) (3.6) Winona city 228 195 192 (36) (3) (18.8) (1.6) Bal. of Logan County 668 600 588 (80) (12) (13.6) (2.0) Augustine township 26 23 23 (3) -- (13.0) ~lkadertownship 15 13 13 (2) -- (15.4) Lees township 17 15 15 (2) -- (13.3) Logansport township 14 13 12 (2) (1) (16.7) McAllaster township 29 26 26 (3) -- (1 1.5) Monument township 144 129 127 (17) (2) (13.4) Bal. of Oakley township 225 202 198 (27) (4) (13-6) Paxton township 24 22 2 1 (3) (1) (14-3) Bal. of Russell Springs township 39 35 34 (5) (1) (14.7) Western township 44 40 39 (5) (1) (12.8) Bal. of Winona township 9 1 82 80 (11) (2) (13.8)

Lyon County Admire city Allen city Americus city Bushong city Emporia city Hartford city Neosho Rapids city Olpe city Reading city Bal. of Lyon County Bal. of Agnes City township Bal. of Americus township Bal. of Center township Bal. of Elmendaro township Emporia township Fremont township Bal. of Ivy township Bal. of Jackson township Pike township Bal. of Reading township Waterloo township

McPherson County Canton city Galva city Inman city Lindsborg city McPherson city Marquette city Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 McPherson County (cont'd) Moundridge city Windom city Bal. of McPherson County Battle Hill township Bonaville township Bal. of Canton township Bal. of Castle township Delmore township Bal. of Empire township Groveland township Gypsum Creek township Harper township Hayes township Jackson township King City township Little Valley township Lone Tree township McPherson township Bal. of Marquette township Meridian township Bal. of Mound township New Gottland township Smoky Hill township South Sharps Creek township Spring Valley township Bal. of Superior township Turkey Creek township Union township

Marion County Burns city Durham city Florence city Goessel city Hillsboro city Lehigh city Lincolnville city Lost Springs city Marion city Peabody city Ramona city Tampa city Bal. of Marion County Bal. of Blaine township Bal. of Catlin township Centre township Clark township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Marion County (cont'd) Bal. of Clear Creek township Bal. of Colfax township Doyle township Bal. of Durham Park township East Branch township Fairplay township Gale township Grant township Bal. of Lehigh township Liberty township Logan township Bal. of Lost Springs township Menno township Bal. of Milton township Moore township Bal. of Peabody township Risley township Summit township Bal. of West Branch township Wilson township

Marshall County Axtell city Beattie city Blue Rapids city Frankfort city Marysville city Oketo city Summerfield city Vermillion city Waterville city Bal. of Marshal1 County Balderson township Bigelow township Blue Rapids township Bal. of Blue Rapids City township Center township Clear Fork township Cleveland township Cottage Hill township Elm Creek township Franklin township Bal. of Guittard township Herkimer township Lincoln township Logan township Marysville township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Marshall County (cont'd) Bal. of Murray township 195 183 180 (15) (3) Bal. of Noble township 110 105 103 (7) (2) Bal. of Oketo township 164 156 153 (11) (3) Bal. of Richland township 130 124 122 (8) (2) Rock township 123 118 116 (7) (2) Bal. of St. Bridget township 97 93 9 1 (6) (2) Bal. of Vermillion township 157 15 1 148 (9) (3) Walnut township 144 138 135 (9) (3) Bal. of Waterville township 116 111 109 (7) (2) Wells township 131 125 122 (9) (3)

Meade County Fowler city Meade city Plains city Bal. of Meade County Cimarron township Crooked Creek township Bal. of Fowler township Logan township Bal. of Meade Center township Mertilla township Odee township Sand Creek township Bal. of West Plains township

Miami County Fontana city Louisburg city Osawatomie city Paola city Spring Hill city (pt.) Bal. of Miami County Marysville township Miami township Middle Creek township Mound township Bal. of Osage township Osawatomie township Paola township Richland township Stanton township Sugar Creek township Ten Mile township Valley township Wea township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 2000-2007 2006-2007 2000-2007 2006-2007 Mitchell County 6,932 (625) 8 (9.9) 0.1 Beloit city 4,019 (374) 6 (10.3) 0.2 Cawker City city 52 1 (58) (1) (12.5) (0.2) Glen Elder city 43 9 (46) 3 (1 1.7) 0.8 Hunter city 77 (7) -- (10.0) Scottsville city 2 1 (2) (1) (10.5) Simpson city (pt.) 114 (13) 1 (12.9) Tipton city 243 (16) 2 (7.0) Bal. of Mitchell County 1,498 (109) (2) (7.8) Asherville township 122 (9) -- (8.0) Beloit township 222 (16) -- (7.8) Bloomfield township 83 (5) 1 (6.4) Blue Hill township 36 (3) -- (9.1) Carr Creek township 31 (2) -- (6.9) Bal. of Cawker township 57 (4) -- (7.5) Center township 49 (4) -- (8.9) Bal. of Custer township 55 (4) -- (7.8) Eureka township 41 (3) -- (7.9) Bal. of Glen Elder township 114 (8) -- (7.5) Hayes township 2 1 (1) -- (5.0) Bal. of Logan township 54 (4) -- (8.0) Bal. of Lulu township 69 (4) -- (6.2) Bal. of Pittsburg township 103 (9) (2) (9.6) Plum Creek township 119 (9) -- (8.2) Round Springs township 27 (2) -- (8.0) Salt Creek township 39 (3) -- (8.3) Solomon Rapids township 80 (6) -- (8.1) Turkey Creek township 134 (10) (1) (8.1) Walnut Creek township 42 (3) -- (7.7)

Montgomery County Caney city Cherryvale city Coffeyville city Dearing city Elk City city Havana city Independence city Liberty city Tyro city Bal. of Montgomery County Bal. of Caney township Cherokee township Cheny township Drum Creek township Bal. of Fawn Creek township Independence township Bal. of Liberty township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Montgomery County (cont'd) Bal. of Louisburg township 324 319 317 (7) (2) (2.2) (0.6) Parker township 1,212 1,174 1,167 (45) (7) (3.9) (0.6) Rutland township 3 02 300 297 (5) (3) (1-7) (1.0) Sycamore township 835 825 819 (16) (6) (2.01 (0.7) West Cheny township 239 23 7 235 (4) (2) (1.7) (0.9)

Morris County Council Grove city Dunlap city Dwight city Herington city (pt.) Latimer city Parkerville city White City city Wilsey city Bal. of Morris County Highland township Overland township Bal. of Township No. 1 Township No. 2 Bal. of Township No. 3 Bal. of Township No. 4 Bal. of Township No. 5 Bal. of Township No. 6 Township No. 7 Township No. 8 Bal. of Township No. 9

Morton County Elkhart city Richfield city Rolla city Bal. of Morton County Cimarron township Jones township Bal. of Richfield township Bal. of Rolla township Bal. of Taloga township Westola township

Nemaha County Bern city CentraIia city Corning city Goff city Oneida city Sabetha city (pt.) Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Nemaha County (cont'd) Seneca city Wetmore city Bal. of Nemaha County Adams township Berwick township Capioma township Center township Clear Creek township Bal. of Gilman township Granada township Bal. of Harrison township Bal. of Home township Bal. of Illinois township Marion township Mitchell township Nemaha township Neuchatel township Red Vermillion township Reilly township Richmond township Rock Creek township Bal. of Washington township Bal. of Wetmore township

Neosho County Chanute city Earlton city Erie city Galesburg city St. Paul city Stark city Thayer city Bal. of Neosho County Big Creek township Bal. of Canville township Bal. of Centerville township Bal. of Chetopa township Bal. of Erie township Bal. of Grant township Bal. of Ladore township Lincoln township Bal. of Mission township Shiloh township Tioga township Walnut Grove township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Ness County 3,454 2,946 2,99 1 (463) 45 (15.5) 1.5 Bazine city 311 257 334 23 77 6.9 23.1 Brownell city 48 4 1 41 (7) -- (17.1) -- Ness City city 1,534 1,299 1,283 (251) (16) (19.6) (1.2) Ransom city 338 286 283 (55) (3) (19.4) (1.1) Utica city 223 194 192 (3 1) (2) (16.1) (1.0) Bal. of Ness County 1,000 869 858 (142) (11) (16.6) (1.3) Bal. of Bazine township 130 113 112 (18) (1) (16.1) (0.9) Bal. of Center township 75 65 65 (10) -- (15.4) -- Eden township 70 6 1 60 (10) (1) (16.7) (1.7) Bal. of Forrester township 67 5 8 5 8 (9) -- (15.5) -- Franklin township 132 115 113 (19) (2) (16.8) (1.8) Highpoint township 93 81 80 (13) (1) (16.3) (1.3) Johnson township 76 66 65 (1 1) (1) (16.9) (1.5) Bal. of Nevada township 141 122 120 (21) (2) (17.5) (1.7) Bal. of Ohio township 122 106 104 (18) (2) (17.3) (1.9) Bal. of Waring township 94 82 81 (13) (1) (16.0) (1.2)

Norton County Almena city Clayton city (pt.) Edmond city Lenora city Norton city Bal. of Norton County Bal. of Almena--Dist. 4 township Center--District 1 township Harrison--District 6 township Bal. of Highland--Dist. 2 township Bal. of Solomon--Dist. 3 township

Osage County Burlingame city Carbondale city Lyndon city Melvern city Olivet city Osage City city Overbrook city Quenemo city Scranton city Bal. of Osage County Bal. of Agency township Arvonia township Barclay township Bal. of Burlingame township Dragoon township Bal. of Elk township Appendix P (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Osage County (cont'd) Fairfax township 513 538 524 11 (14) Grant township 297 317 - 309 12 (8) Junction township 1,210 1,239 1,20 1 (9) (3 8) Lincoln township 134 152 149 15 (3) Bal. of Melvem township 383 410 400 17 (10) Bal. of Olivet township 199 23 1 227 28 (4) Bal. of Ridgeway township 1,183 1,216 1,178 (5) (38) Bal. of Scranton township 549 570 552 3 (18) Superior township 293 33 1 323 30 (8) Bal. of Valley Brook township 486 510 496 10 (14)

Osborne County Alton city Downs city Natoma city Osbome city Portis city Bal. of Osbome County Bal. of Bethany township Bloom township Corinth township Covert township Delhi township Grant township Hancock township Hawkeye township Independence township Jackson township Kill Creek township Lawrence township Liberty township Mount Ayr township Bal. of Natoma township Penn township Bal. of Ross township Round Mound township Bal. of Sumner township Tilden township Valley township Victor township Winfield township

Ottawa County Bennington city Culver city Delphos city Minneapolis city Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Ottawa County (cont'd) Tescott city Bal. of Ottawa County Bal. of Bemington township Blaine township Buckeye township Center township Chapman township Concord township Bal. of Culver township Durham township Fountain township Garfield township Grant township Henry township Lincoln township Logan township Bal. of Morton township Ottawa township Richland township Bal. of Sheridan township Sherman township Stanton township

Pawnee County Burdett city Garfield city Lamed city Rozel city Bal. of Pawnee County Ash Valley township Bal. of Browns Grove township Conkling township Bal. of Garfield township Bal. of Grant township Keysville township Lamed township Lincoln township Logan township Morton township Bal. of Orange township Pawnee township Pleasant Grove township Pleasant Ridge township Pleasant Valley township River township Santa Fe township Sawmill township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Pawnee County (eont'd) Shiley township Valley Center township Walnut township

Phillips County Agra city Glade city Kinvin city Logan city Long Island city Phillipsburg city Prairie View city Speed city Bal. of Phillips County Arcade township Beaver township Bal. of Belmont township Bow Creek township Crystal township Dayton township Deer Creek township Freedom township Glenwood township Granite township Greenwood township Bal. of Kirwin township Bal. of Logan township Bal. of Long Island township Mound township Phillipsburg township Plainview township Bal. of Plum township Bal. of Prairie View township Rushville township Bal. of Solomon township Sumner township Towanda township Valley township Walnut township

Pottawatomie County 18,209 19,220 19,396 1,187 176 Belvue city 228 219 217 (1 1) (2) Emmett city 277 265 262 (15) (3) Havensville city 146 144 143 (3) (1) Louisville city 209 208 206 (3) (2) Manhattan city (pt.) 3 48 4 1 38 (7) Olsburg city 192 192 191 (1) (1) Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth %Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Pottawatomie County (cont'd) Onaga city St. George city St. Marys city (pt.) Wamego city Westmoreland city Wheaton city Bal. of Pottawatomie County Bal. of Belvue township Blue township Bal. of Blue Valley township Center township Clear Creek township Bal. of Emmett township Bal. of Grant township Green township Lincoln township Bal. of Lone Tree township Bal. of Louisville township Bal. of Mill Creek township Bal. of Pottawatomie township Bal. of Rock Creek township St. Clere township Bal. of St. George township Bal. of St. Marys township Shannon township Sherman township Spring Creek township Union township Vienna township Bal. of Warnego township

Pratt County Byers city Coats city Cullison city Iuka city Pratt city Preston city Sawyer city Bal. of Pratt County Bal. of Township No. 6 Bal. of Township No. 7 Bal. of Township No. 8 Bal. of Township No. 9 Bal. of Township No. 10 Bal. of Township No. 11 Township No. 12 Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Rawlins County 2,966 2,643 2,558 (408) (85) (15.9) (3.3) Atwood city 1,279 1,126 1,092 (187) (34) (17.1) (3.1) Herndon city 149 135 131 (18) (4) (13.7) (3.1) McDonald city 159 137 133 (26) (4) (19-5) (3.0) Bal. of Rawlins County 1,379 1,245 1,202 (177) (43) (14.7) (3.6) Achilles township 83 75 73 (10) (2) (13.7) (2.7) Bal. of Atwood township 5 1 47 45 (6) (2) (13.3) (4.4) Center township 3 63 325 3 13 (50) (12) (16.0) (3.8) Driftwood township 84 76 73 (1 1) (3) (15.1) (4-1) Bal. of Her1 township 237 214 207 (30) (7) (14.5) (3.4) Jefferson township 34 3 1 30 (4) (1) (13.3) (3-3) Ludell township 136 123 118 (18) (5) (15.3) (4.2). Mirage township 43 39 38 (5) (1) (13.2) (2.6) Bal. of Rocewood township 289 262 253 (36) (9) (14.2) (3-6) Union township 59 53 52 (7) (1) (13.5) (1.9)

Reno County Abbyville city Arlington city Buhler city Haven city Hutchinson city Langdon city Nickerson city Partridge city Plevna city Pretty Prairie city South Hutchinson city Sylvia city Turon city Willowbrook city Bal. of Reno County Bal. of Albion township Bal. of Arlington township Bell township Castleton township Bal. of Center township Clay township Enterprise township Bal. of Grant township Grove township Bal. of Haven township Hayes township Huntsville township Bal. of Langdon township Lincoln township Bal. of Little River township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007

Reno County (cont'd) Loda township Medford township Medora township Bal. of Miami township Ninnescah township Bal. of Plevna township BaI. of Reno township Bal. of Roscoe township Salt Creek township Sumner township Bal. of Sylvia township Troy township Valley township Walnut township Bal. of Westminster township Yoder township

Republic County Agenda city Belleville city Courtland city Cuba city Munden city Narka city Republic city Scandia city Bal. of Republic County Bal. of Albion township Beaver township Belleville township Bal. of Big Bend township Bal. of Courtland township Bal. of Elk Creek township Bal. of Fairview township Farmington township Freedom township Grant township Jefferson township Liberty township Lincoln township Norway township Bal. of Richland township Bal. of Rose Creek township Bal. of Scandia township Union township Bal. of Washington township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 White Rock township 88 76 74 (14) (2) (18.9) (2.7) Rice County (215) (6.8) (2.1) Alden city (4) (9.1) (2.6) Bushton city (7) (9.8) (2.4) Chase city (11) (9.4) (2.5) Frederick city Geneseo city Little River city Lyons city Raymond city Sterling city Bal. of Rice County Atlanta township Bell township Center township East Washington township Bal. of Eureka township Bal. of Farmer township Galt township Harrison township Bal. of Lincoln township Mitchell township Odessa township Pioneer township Bal. of Raymond township Rockville township Sterling township Bal. of Union township Bal. of Valley township Bal. of Victoria township West Washington township Wilson township

Riley County Leonardville city Manhattan city (pt.) Ogden city Randolph city Riley city Bal. of Riley County Ashland township Bal. of Bala township Center township Fancy Creek township Grant township Bal. of Jackson township Bal. of Madison township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Manhattan township

Riley County (cont'd) May Day township Bal. of Ogden township Sherman township Swede Creek township Wildcat township Zeandale township

Rooks County Damar city Palco city PIainvilIe city Stockton city Woodston city Zurich city Bal. of Rooks County Bal. of Township No. 1 Bal. of Township No. 2 Bal. of Township No. 3 Bal. of Township No. 4 Township No. 5 Township No. 6 Bal. of Township No. 7 Bal. of Township No. 8 Township No. 9 Bal. of Township No. 10 Bal. of Township No. 11 Township No. 12

Rush County Alexander city Bison city La Crosse city Liebenthal city McCracken city Otis city Rush Center city Timken city Bal. of Rush County Bal. of Alex.--Belle Prairie twnshp. Bal. of Banner township Bal. of Big Timber township Bal. of Center township Garfield township Bal. of Hampton--Fairview twnshp. Illinois township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Bal. of La Crosse--Brookdale twnshp. 99 93 90 (9) (3) (10.0) (3.3) Bal. of Lone Star township Rush County (cont'd) Bal. of Pioneer township Pleasantdale township Union township

Russell County Bunker Hill city Dorrance city Gorharn city Lucas city Luray city Paradise city Russell city Waldo city Bal. of Russell County Bal. of Big Creek township Bal. of Center township Fairfield township Bal. of Fairview township Grant township Lincoln township Bal. of Luray township Bal. of Paradise township Bal. of Plymouth township Russell township Bal. of Waldo township Winterset township

Saline County Assaria city . Brookville city Gypsum city New Cambria city Salina city Smolan city Solomon city (pt.) Bal. of Saline County Bal. of Cambria township Bal. of Dayton township Elm Creek township Bal. of Eureka township Falun township Glendale township Greeley township Gypsum township Liberty township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Ohio township 463 472 477 14 5 Pleasant Valley township 422 436 43 9 17 3 Saline County (cont'd) Smoky Hill township Bal. of Smoky View township Bal. of Smolan township Solomon township Bal. of Spring Creek township Walnut township Washington township

Scott County Scott City city BaI. of Scott County Beaver township Isbel township Keystone township Lake township Michigan township Scott township Valley township

Sedgwick County Andale city Andover city (pt.) Be1 Aire city Bentley city Cheney city Clearwater city Colwich city Derby city Eastborough city Garden Plain city Goddard city Haysville city Kechi city Maize city Mount Hope city Mulvane city (pt.) Park City city Sedgwick city (pt.) Valley Center city Viola city Wichita city Bal. of Sedgwick County Afton township Bal. of Attica township Delano township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 2000-2007 2006-2007 2000-2007 2006-2007 Bal. of Eagle township 701 77 3 9.9 0.4 Erie township 106 80 6 43.0 Sedgwick County (cont'd) Bal. of Garden Plain township Grand River township Bal. of Grant township Bal. of Greeley township Bal. of Gypsum township Bal. of Illinois township Bal. of Kechi township Lincoln township Bal. of Minneha township Bal. of Morton township Bal. of Ninnescah township Bal. of Ohio township Bal. of Park township Bal. of Payne township Bal. of Riveside township Bal. of Rockford township Bal. of Salem township Bal. of Sherman township Bal. of Union township Bal. of Valley Center township Bal. of Viola township Bal. of Waco township

Seward County Kismet city Liberal city Bal. of Seward County Bal. of Fargo township Liberal township Seward township

Shawnee County Auburn city Rossville city Silver Lake city Topeka city Willard city (pt.) Bal. of Shawnee County Bal. of Auburn township Bal. of Dover township Grove township Menoken township Mission township Monmouth township Bal. of Rossville township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Bal. of Silver Lake township 591 714 726 135 12 18.6 1.7 Soldier township 12,867 13,471 13,545 678 74 5.0 0.5 Shawnee County (cont'd) Tecurnseh township 7,822 7,780 7,825 3 45 -- 0.6 Topeka township 93 1 1,003 1,007 76 4 7.5 0.4 Williamsport township 4,023 4,329 4,364 341 3 5 7.8 0.8

Sheridan County Hoxie city Selden city Bal. of Sheridan County Adell township Bloomfield township Bowcreek township East Saline township Bal. of Kenneth township Logan township Parnell township Prairie Dog township Bal. of Sheridan township Solomon township Springbrook township Union township Valley township West Saline township

Sherman County Goodland city Kanorado city Bal. of Sherman County Grant township Iowa township Itasca township Lincoln township Llanos township Logan township McPherson township Shermanville township Smoky township Bal. of Stateline township Union township Voltaire township Washington township

Smith County Athol city Cedar city Gaylord city Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Kensington city 529 480 470 (59) (10) (12.6) (2.1) Lebanon city 303 272 265 (3 8) (7) (14.3) (2.6) Smith County (cont'd) Smith Center city Bal. of Smith County Banner township Beaver township Blaine township Bal. of Cedar township Bal. of Center township Cora township Crystal Plains township Dor township Garfield township German township Harlan township Bal. of Harvey township Bal. of Houston township Bal. of Lane township Lincoln township Logan township Martin township Bal. of Oak township Pawnee township Pleasant township Swan township Valley township Washington township Webster township White Rock township

Stafford County Hudson city Macksville city Radium city St. John city Seward city Stafford city Bal. of Stafford County Albano township Byron township Clear Creek township Cleveland township Bal. of Douglas township East Cooper township Fairview township Bal. of Farmington township Bal. of Hayes township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Bal. of Lincoln township Bal. of North Seward township Stafford County (cont'd) Bal. of Ohio township Putnarn township Richland township Rose Valley township Bal. of St. John township South Seward township Bal. of Stafford township Union township West Cooper township York township

Stanton County Johnson City city Manter city Bal. of Stanton County

Stevens County Hugoton city Moscow city Bal. of Stevens County

Sumner County Argonia city Belle Plaine city Caldwell city Conway Springs city Geuda Springs city @t.) Hunnewell city Mayfield city Milan city Mulvane city (pt.) Oxford city South Haven city Wellington city Bal. of Sumner County Avon township Bal. of Belle Plaine township Bluff township Caldwell township Chikaskia township Bal. of Conway township Creek township Bal. of Dixon township Downs township Bal. of Eden township Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Falls township 187 179 175 (12) (4) (6-9) (2.3) Bal. of Gore township 1,219 1,146 1,112 (107) (34) (9-6) (3.1) Sumner County (cont'd) Greene township Guelph township Harmon township Illinois township Jackson township London township Morris township Bal. of Osborne township Bal. of Oxford township Palestine township Bal. of Ryan township Seventy--Six township Bal. of South Haven township Bal. of Springdale township Sumner township Valverde township Bal. of Walton township Wellington township

Thomas County Brewster city Colby city Gem city Menlo city Oakley city (pt.) Rexford city Bal. of Thomas County Barrett township East Hale township Kingery township Bal. of Lacey township Bal. of Menlo township Morgan township North Randall township Rovohl township Bal. of Smith township Bal. of South Randall township Summers township Wendell township Bal. of West Hale township

Trego County Collyer city WaKeeney city Bal. of Trego County 1 Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Bal. of Collyer township 235 209 204 (31) (5) (15.2) (2.5) Franklin township 60 54 52 (8) (2) (15.4) (3.8) Trego County (cont'd) Glencoe township 70 62 60 Ogallah township 214 190 185 Riverside township 117 105 103 Bal. of WaKeeney township 474 429 422 Wilcox township 92 82 8 1

Wabaunsee County Alma city Alta Vista city Eskridge city Harveyville city McFarland city Maple Hill city Paxico city St. Marys city (pt.) Willard city (pt,) Bal. of Wabaunsee County Bal. of Alma township Farmer township Bal. of Garfield township Bal. of Kaw township Bal. of Maple Hill township Mill Creek township Mission Creek township Bal. of Newbury township Bal. of Plumb township Rock Creek township Wabaunsee township Washington township Bal. of Wilmington township

Wallace County Sharon Springs city Wallace city Bal. of Wallace County Harrison township Bal. of Sharon Springs township Bal. of Wallace township Weskan township

Washington County Barnes city Clifton city (pt.) Greenleaf city Haddam city Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Hanover city 653 5 83 576 (77) (7) (13.4) (1.2) Hollenberg city 3 1 28 28 (3) -- (10.7) -- Washington County (cont'd) Linn city Mahaska city Morrowville city Palmer city Vining city (pt.) Washington city Bal. of Washington County Bal. of Barnes township Brantford township Charleston township Bal. of Clifton township Coleman township Farmington township Bal. of Franklin township Grant township Bal. of Greenleaf township Bal. of Haddam township Bal. of Hanover township Highland township Independence township Kimeo township Lincoln township Bal. of Linn township Little Blue township Logan township Lowe township Bal. of Mill Creek township Sheridan township Bal. of Sherman township Strawbeny township Bal. of Union township Washington township

Wichita County Leoti city Bal. of Wichita County

Wilson County Altoona city Benedict city Buffalo city Coyville city Fredonia city Neodesha city New Albany city Appendix F (cont'd) Kansas Certified Population Certified to the Secretary of State by Division of the Budget on July 1,2008

Pop. 2000 Pop. 2006 Pop. 2007 # Growth # Growth % Chg % Chg 4/1/2000 7/1/2006 7/1/2007 2000-2007 2006-2007 2000-2007 2006-2007 Bal. of Wilson County Bal. of Cedar township Center township Wilson County (cont'd) Chetopa township Bal. of Clifton township Colfax township Duck Creek township Bal. of Fall River township Bal. of Guilford township Neodesha township Newark township Pleasant Valley township Prairie township Talleyrand township Bal. of Verdigris township Webster township

Woodson County Neosho Falls city Toronto city Yates Center city Bal. of Woodson County Center township Liberty township Bal. of Neosho Falls township North township Peny township Bal. of Toronto township

Wyandotte County 157,882 155,509 153,956 (3,926) (1,553) Bonner Springs city (pt.) 6,767 7,080 7,055 288 (25) Edwardsville city 4,146 4,510 4,463 317 (47) Kansas City city 146,866 143,801 142,320 (4,546) (1,481) Lake Quivira city (pt.) 49 50 51 2 1 Bal. of Wyandotte County 54 68 67 13 (1)

Source: US. Censzis Bureau Appendix G Resident Population for U.S., Regions, States, & Kansas Counties, 2003-2007

2003 2004 2005 2006 2007 Percent Change Area: (AS of 7/1/03) (AS of 7/1/04) (ASof 7/1/05) (AS of 7/1/06) (As of 7/1/07) ----2004 2005 2006 2007 U.S. 290,809,777 293,655,404 296,410,404 299,398,484 301,621,157 1.0 % 0.9 % 1.0 % 0.7 %

Regions: Northeast 54,399,446 54,571,147 54,641,895 54,741,353 54,680,626 0.3 0.1 0.1 (0.1) New England 14,205,480 14,238,888 14,239,724 14,269,989 14,264,185 0.2 0.0 0.2 0.0 (Connecticut,Maine, Massachusetts, New Hampshire, Rhode Island, Vermont) Middle Atlantic 40,193,966 40,332,259 40,402,171 40,471,364 40,416,441 0.3 0.2 0.2 (0.1) (New Jersey, New York, Pennsylvania)

Midwest 65,406,134 65,729,852 65,971,974 66,217,736 66,388,795 0.5 0.4 0.4 0.3 EastNorthcent. 45,837,269 46,031,860 46,156,447 46,275,645 46,338,216 0.4 0.3 0.3 0.1 (Illinois, Indiana, Michigan, Ohio, Wisconsin) West North Cent. 19,568,865 19,697,992 19,815,527 19,942,091 20,050,579 0.7 0.6 0.6 0.5 (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota)

South 104,538,348 105,944,965 107,505,413 109,083,752 110,454,786 1.3 1.5 1.4 1.3 South Atlantic 54,344,651 55,182,959 56,179,519 57,143,670 57,860,260 1.5 1.8 1.7 1.3 (Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia) EastSouthcent. 17,341,608 17,480,032 17,615,260 17,754,447 17,944,829 0.8 0.8 0.8 1.1 (Alabama, Kentucky, Mississippi, Tennessee) West South Cent. 32,852,089 33,281,974 33,710,634 34,185,635 34,649,697 1.3 1.3 1.4 1.4 (Arkansas, Louisiana, Oklahoma, Texas)

West 66,465,849 67,409,440 68,291,122 69,355,643 70,096,950 1.4 1.3 1.5 1.1 Mountain 19,383,929 19,798,992 20,291,305 20,845,987 21,360,990 2.1 2.5 2.7 2.5 (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming) Pacific 47,081,920 47,610,448 47,999,817 48,509,656 48,735,960 1.1 0.8 1.1 0.5 (Alaska, California, Hawaii, Oregon, Washington)

States: Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Dist. of Columbia Florida Georgia 8,684,715 8,829,383 9,072,576 9,363,941 9,544,750 1.7 2.8 2.5 1.9 Hawaii 1,257,608 1,262,840 1,275,194 1,285,498 1,283,388 0.4 1.0 1.0 (0.2) Idaho 1,366,332 1,393,262 1,429,096 1,466,465 1,499,402 2.0 2.6 2.6 2.2 Illinois 12,653,544 12,713,634 12,763,371 12,831,970 12,852,548 0.5 0.4 0.5 0.2 Indiana 6,195,643 6,237,569 6,271,973 6,313,520 6,345,289 0.7 0.6 0.8 0.5 Appendix G (cont'd) Resident Population for U.S., Regions, States, & Kansas Counties, 2003-2007

Percent Change Area: (As of 7/1/03) (As of 7/1/04) (As of 7/1/05) (As of 7/1/06) (As of 7/1/07) Iowa 2,966,334 2,982,085 2,988,046 Kansas 2,744,687 2,764,075 2,775,997 Kentucky 4,173,405 4,206,074 4,241,474 Louisiana 4,523,628 4,287,768 4,293,204 Maine 1,321,505 1,321,574 1,317,207

Maryland 5,508,909 5,558,058 5,600,388 5,615,727 5,618,344 0.9 0.8 0.5 0.0 Massachusetts 6,433,422 6,416,505 6,398,743 6,437,193 6,449,755 (0.3) (0.3) 0.1 0.2 Michigan 10,079,985 10,112,620 10,120,860 10,095,643 10,071,822 0.3 0.1 (0.1) (0.2) Minnesota 5,059,375 5,100,958 5,132,799 5,167,101 5,197,621 0.8 0.6 0.8 0.6 Mississippi 2,881,281 2,902,966 2,921,088 2,910,540 2,918,785 0.8 0.6 0.1 0.3

Missouri 5,704,484 5,754,618 5,800,310 5,842,713 5,878,415 0.9 0.8 0.8 0.6 Montana 9 17,621 926,865 935,670 944,632 957,861 1.0 0.9 1.0 1.4 Nebraska 1,739,291 1,747,214 1,758,787 1,768,331 1,774,571 0.5 0.7 0.6 0.4 Nevada 2,241,154 2,334,771 2,414,807 2,495,529 2,565,382 4.2 3.4 3.5 2.8 New Hampshire 1,287,687 1,299,500 1,309,940 1,314,895 1,315,828 0.9 0.8 0.6 0.1

New Jersey 8,638,396 8,698,879 8,717,925 8,724,560 8,685,920 0.7 0.2 0.2 (0.4) New Mexico 1,874,614 1,903,289 1,928,384 1,954,599 1,969,915 1.5 1.3 1.5 0.8 New York 19,190,115 19,227,088 19,254,630 19,306,183 19,297,729 0.2 0.1 0.0 0.0 North Carolina 8,407,248 8,541,221 8,683,242 8,856,505 9,061,032 1.6 1.7 2.1 2.3 North Dakota 633,837 634,366 636,677 635,867 639,715 0.1 0.4 0.2 0.6

Ohio 11,435,798 11,459,011 11,464,042 11,478,006 11,466,917 0.2 0.0 0.1 (0.1) Oklahoma 3,511,532 3,523,553 3,547,884 3,579,212 3,617,316 0.3 0.7 1.0 1.1 Oregon 3,559,596 3,594,586 3,641,056 3,700,758 3,747,455 1.0 1.3 1.7 1.3 Pennsylvania 12,365,455 12,406,292 12,429,616 12,440,621 12,432,792 0.3 0.2 0.3 (0.1) Rhode Island 1,076,164 1,080,632 1,076,189 1,067,610 1,057,832 0.4 (0.4) (0.6) (0.9)

South Carolina 4,147,152 4,198,068 4,255,083 4,321,249 4,407,709 1.2 1.4 1.7 2.0 South Dakota 764,309 770,883 775,933 781,919 796,214 0.9 0.7 0.9 1.8 Tennessee 5,841,748 5,900,962 5,962,959 6,038,803 6,156,719 1.0 1.1 1.4 2.0 Texas 22,118,509 22,490,022 22,859,968 23,507,783 23,904,380 1.7 1.6 2.5 1.7 Utah 2,351,467 2,389,039 2,469,585 2,550,063 2,645,330 1.6 3.4 2.4 3.7

Vermont 619,107 621,394 623,050 623,908 621,254 0.4 0.3 0.2 (0.4) Virginia 7,386,330 7,459,827 7,567,465 7,642,884 7,712,091 1.0 1.4 1.0 0.9 Washington 6,131,445 6,203,788 6,287,759 6,395,798 6,468,424 1.2 1.4 1.7 1.1 West Virginia 1,810,354 1,815,354 1,816,856 1,818,470 1,812,035 0.3 0.1 0.2 (0.4) Wisconsin 5,472,299 5,509,026 5,536,201 5,556,506 5,601,640 0.7 0.5 0.5 0.8

Wyoming 501,242 506,529 509,294 5 15,004 522,830 1.1 0.5 1.2 1.5 Appendix G (cont'd) Resident Population for U.S., Regions, States, & Kansas Counties, 2003-2007

2003 2004 2005 2006 2007 Percent Change Area: (AS of 7/1/03) (As of 7/1/04) (As of 7/1/05) (As of 7/1/06) (As of 7/1/07) ----2004 2005 2006 2007 Kansas Counties: Allen 13,907 13,949 13,787 13,677 13,414 0.3 % (1.2) % (0.8) % (2.0) % Anderson 8,208 8,191 8,182 8,051 7,908 (0.2) (0.1) (1.6) (1.8) Atchison 16,741 . 16,848 16,804 16,745 16,571 0.6 (0.3) (0.4) (1.1) Barber 5,034 4,999 4,958 4,974 4,786 (0.7) (0.8) 0.3 (3.9) Barton 27,467 27,957 28,105 27,5 11 27,768 1.8 0.5 (2.2) 0.9

Bourbon 15,086 15,066 14,997 14,950 14,803 (0.1) (0.5) (0.3) (1.0) Brown 10,442 10,362 10,239 10,236 10,068 (0.8) (1.2) 0.0 (1.7) Butler 61,127 61,828 62,354 63,147 63,045 1.1 0.9 1.3 (0.2) Chase 3,107 3,068 3,081 3,070 2,882 (1.3) 0.4 (0.4) (6.5) Chautauqua 4,185 4,178 4,109 3,953 3,806 (0.2) (1.7) 3.9 (3.9)

Cherokee 21,815 21,950 21,555 21,451 21,337 0.6 (1.8) (0.5) (0.5) Cheyenne 2,955 2,979 2,946 2,911 2,801 0.8 (1.1) (1.2) (3.9) Clark 2,333 2,343 2,283 2,206 2,094 0.4 (2.6) (3.5) (5.3) Clay 8,573 8,597 8,629 8,625 8,685 0.3 0.4 0.0 0.7 Cloud 9,859 9,779 9,759 9,594 9,382 (0.8) (0.2) (1.7) (2.3) Coffey 8,815 8,759 8,683 8,701 8,454 (0.6) (0.9) 0.2 (2.9) Comanche 1,915 1,903 1,935 1,884 1,888 (0.6) 1.7 (2.7) 0.2 Cowley 35,860 35,772 35,298 34,93 1 34,251 (0.2) (1.3) (1.1) (2.0) Crawford 38,398 38,060 3 8,222 38,059 38,860 (0.9) 0.4 (0.4) 2.1 Decatur 3,295 3,274 3,191 3,120 2,955 (0.6) (2.5) (2.3) (5.6) Dickinson 19,255 19,132 19,209 19,322 18,957 (0.6) 0.4 0.6 (1.9) Doniphan 8,149 8,062 7,816 7,865 7,756 (1.1) (3.1) 0.6 (1.4) Douglas 102,983 102,786 102,914 112,123 113,488 (0.2) 0.1 8.2 1.2 Edwards 3,275 3,308 3,292 3,138 3,106 1.0 (0.5) (4.9) (1.0) Elk 3,167 3,117 3,075 3,077 3,040 (1.6) (1.3) 0.1 (1.2) Ellis 27,2 12 27,060 26,767 26,926 27,464 (0.6) (1.1) 0.6 2.0 Ellsworth 6,347 6,350 6,343 6,332 6,310 0.0 (0.1) (0.2) (0.3) Finney 39,176 39,271 38,988 39,097 38,295 0.2 (0.7) 0.3 (2.1) Ford 33,012 33,278 33,751 33,783 33,340 0.8 1.4 0.1 (1.3) Franklin 25,540 26,049 26,247 26,513 26,479 2.0 0.8 1.0 (0.1)

gear^ 26,3 13 25,111 24,585 24,174 25,150 (4.6) (2.1) (1.7) 3.9 Gove 2,910 2,845 2,763 2,72 1 2,637 (2.2) (2.9) (1.5) (3.2) Graham 2,808 2,745 2,721 2,677 2,607 (2.2) (0.9) (1.6) (2.7) Grant 7,745 7,685 7,530 7,552 7,497 (0.8) (2.0) 0.3 (0.7) Gray 6,063 5,980 5,861 5,852 5,641 (1.4) (2.0) (0.2) (3.7)

Greeley 1,420 1,415 1,349 1,331 1,297 (0.4) (4.7) (1.4) (2.6) Greenwood 7,485 7,538 7,338 7,067 6,993 0.7 (2.7) (3.8) (1.1) Hamilton 2,666 2,654 2,604 2,594 2,632 (0.5) (1.9) (0.4) 1.4 Harper 6,206 6,238 6,08 1 5,952 5,819 0.5 (2.5) (2.2) (2.3) Harvey 33,502 33,769 33,843 33,643 33,493 0.8 0.2 (0.6) (0.4) Appendix G (cont'd) Resident Population for U.S., Regions, States, & Kansas Counties, 2003-2007

2003 2004 2005 2006 2007 Percent Change Area: (As of 7/1/03) (As of 7/1/04) (AS of 7/1/05) (AS of 7/1/06) (As of 7/1/07) ----2004 2005 2006 2007 Kansas Counties (continued): Haskell 4,246 4,272 4,232 4,171 4,032 0.6 % (0.9) % (1.5) % (3.4) % Hodgeman 2,151 2,089 2,110 2,071 1,971 (2.9) 1.0 (1.9) (5.1) Jackson 13,017 13,169 13,535 13,500 13,420 1.2 2.8 (0.3) (0.6) Jefferson 18,798 18,906 19,106 18,848 18,467 0.6 1.1 (1.4) (2.1) Jewel1 3,433 3,422 3,352 3,324 3,198 (0.3) (2.0) (0.8) (3.9) Johnson 486,515 496,691 506,562 516,731 526,319 2.1 2.0 2.0 1.8 Kearny 4,591 4,5 15 4,516 4,469 4,148 (1.7) 0.0 (1.1) (7.7) Kingman 8,382 8,390 8,165 7,975 7,826 0.1 (2.7) (2.4) (1.9) Kiowa 3,152 3,084 2,984 2,969 2,953 (2.2) (3.2) (0.5) (0.5) Labette 22,259 22,269 22,169 22,203 21,973 0.0 (0.4) 0.2 (1.0) Lane 1,946 1,950 1,894 1,797 1,746 0.2 (2.9) (5.4) (2.9) Leavenworth 7 1,546 72,439 73,113 73,628 73,603 1.2 0.9 0.7 0.0 Lincoln 3,498 3,416 3,411 3,396 3,285 (2.3) (0.1) (0.4) (3.4) Linn 9,722 9,775 9,914 9,962 9,767 0.5 1.4 0.5 (2.0) Logan 2,855 2,827 2,794 2,675 2,628 (1.0) (1.2) (4.4) (1.8) Lyon 35,805 35,717 35,609 35,369 35,981 (0.2) (0.3) (0.7) 1.7 McPherson 29,346 29,413 29,523 29,380 29,196 0.2 0.4 (0.5) (0.6) Marion 13,299 13,010 12,952 12,760 12,238 (2.2) (0.4) (1.5) (4.3) Marshall 10,589 10,402 10,405 10,349 10,186 (1.8) 0.0 (0.5) (1.6) Meade 4,662 4,592 4,625 4,561 4,403 (1.5) 0.7 (1.4) (3.6) Miami 29,187 29,7 12 30,496 30,900 31,078 1.8 2.6 1.3 0.6 Mitchell 6,707 6,564 6,420 6,299 6,307 (2.1) (2.2) (1.9) 0.1 Montgomery 34,934 34,975 34,570 34,692 34,511 0.1 (1.2) 0.4 (0.5) Morris 5,995 5,977 6,049 6,046 5,967 (0.3) 1.2 0.0 (1.3) Morton 3,317 3,269 3,196 3,138 3,038 (1.4) (2.2) (1.8) (3.3) Nemaha 10,500 10,458 10,443 10,374 10,201 (0.4) (0.1) (0.7) (1.7) Neosho 16,580 16,555 16,529 16,298 16,228 (0.2) (0.2) (1.4) (0.4) Ness 3,158 3,080 3,009 2,946 2,991 (2.5) (2.3) (2.1) 1.5 Norton 5,796 5,799 5,664 5,584 5,422 0.1 (2.3) (1.4) (3.0) Osage 16,784 17,091 17,150 16,958 16,459 1.8 0.3 (1.1) (3.0)

Osbome 4,179 4,100 4,050 . 3,978 3,871 (1.9) (1.2) (1.8) (2.8) Ottawa 6,177 6,175 6,123 6,168 6,006 (0.0) (0.8) 0.7 (2.7) Pawnee 6,796 6,795 6,739 6,5 15 6,415 (0.0) (0.8) (3.4) (1.6) Phillips 5,657 5,583 5,504 5,444 5,356 (1.3) (1.4) (1.1) (1.6) Pottawatomie 18,714 18,871 19,129 19,220 19,396 0.8 1.4 0.5 0.9

Pratt 9,437 9,417 9,496 9,436. 9,426 (0.2) 0.8 (0.6) (0.1) Rawlins 2,843 2,765 2,672 - 2,643 2,558 (2.7) (3.4) (1.1) (3.3) Reno 63,832 63,676 63,558 63,706 63,145 (0.2) (0.2) 0.2 (0.9) Republic 5,307 5,224 5,164 5,033 4,901 (1.6) (1.1) (2.6) (2.7) Rice 10,412 10,497 10,452 10,295 10,080 0.8 (0.4) (1.5) (2.1) Appendix G (cont'd) Resident Population for U.S., Regions, States, & Kansas Counties, 2003-2007

2003 2004 2005 2006 2007 Percent Change Area: (AS of 7/1/03) (As of 7/1/04) (As of 7/1/05) (As of 7/1/06) (As of 7/1/07) ----2004 2005 2006 2007 Kansas Counties (continued): Riley 62,291 63,069 62,826 62,527 69,083 1.2 % (0.4) % (0.5) % 9.5 % Rooks 5,417 5,386 5,351 5,290 5,160 (0.6) (0.6) (1.2) (2.5) Rush 3,418 3,466 3,406 3,3 17 3,211 1.4 (1.7) (2.7) (3.3) Russell 6,907 6,978 6,845 6,740 6,737 1.0 (1.9) (1.6) 0.0 Saline 53,737 53,943 53,919 54,170 54,583 0.4 (0.0) 0.5 0.8

Scott 4,806 4,691 4,600 4,643 4,568 (2.4) (1.9) 0.9 (1.6) Sedgwick 462,896 463,802 466,061 470,895 476,026 0.2 0.5 1.0 1.1 Seward 23,091 23,237 23,274 23,404 23,109 0.6 0.2 0.6 (1.3) Shawnee 170,902 171,716 172,365 172,693 173,476 0.5 0.4 0.2 0.5 Sheridan 2,662 2,614 2,591 2,600 2,493 (1.8) (0.9) 0.3 (4.3)

Sherman 6,277 6,2 18 6,153 5,981 5,959 (0.9) (1.0) (2.9) (0.4) Smith 4,181 4,179 4,121 4,024 3,951 (0.0) (1.4) (2.4) (1.8) Stafford 4,589 4,5 12 4,488 4,435 4,387 (1.7) (0.5) (1.2) (1.1) Stanton 2,404 2,374 2,245 2,232 2,162 (1.2) (5.4) (0.6) (3.2) Stevens 5,389 5,520 5,412 5,287 5,061 2.4 (2.0) (2.4) (4.5) Sumner 25,256 25,272 24,797 24,44 1 23,888 0.1 (1.9) (1.5) (2.3) Thomas 7,933 7,801 7,639 7,468 7,314 (1.7) (2.1) (2.3) (2.1) Trego 3,103 3,158 3,050 2,993 2,927 1.8 (3.4) (1.9) (2.3) Wabaunsee 6,767 6,938 6,9 19 6,895 6,870 2.5 (0.3) (0.3) (0.4) Wallace 1,621 1,579 1,573 1,557 1,456 (2.6) (0.4) (1.0) (6.9) Washington 6,131 6,107 6,009 5,944 5,840 (0.4) (1.6) (1.1) (1.8) Wichita 2,447 2,360 2,309 2,288 2,200 (3.6) (2.2) (0.9) (4.0) Wilson 10,080 9,946 9,834 9,889 9,807 (1.3) (1.1) 0.6 (0.8) Woodson 3,631 3,553 3,572 3,507 3,318 (2.1) 0.5 (1.9) (5.7) Wyandotte 157,091 156,487 155,750 155,509 153,956 (0.4) (0.5) (0.2) (1.0)

Source: US. Census Bzcreau Poverty Thresholds in 2007, by Size of Family & Number of Related Children under 18 Years

Related Children under IS Years Eight or Size of Family Unit None One Two Three Four Five Six Seven More One person Under 65 Years $10,787 65 Years and Over 9,944

Two People Two with Householder: Under 65 Years 13,884 $14,291 65 Years and Over 12,533 14,237

Three People 16,218 16,689 $16,705 Four People 21,386 21,736 21,027 $21,100 Five People 25,791 26,166 25,364 24,744 $24,366 Six People 29,664 29,782 29,168 28,579 27,705 $27,187 Seven People 34,132 34,345 33,610 33,098 32,144 31,031 $29,810 Eight People 38,174 38,511 37,818 37,210 36,348 35,255 34,116 $33,827 Wine People or More 45,921 46,143 45,529 45,014 44,168 43,004 41,952 41,691 $40,085

-- Sozrrce: U.S. Census Brrreau, http://~v1nv.ce~~s~is.gov//1hes/1~1v1v/poverrylrhreshlt1reshO7.ht~nl Appendix I Kansas School District Populations, 2005 Estimated No. of U.S. Census Relevant Children 5. Ks Dept. of Bureau's 17 Yrs of Age in Education's Population of Poverty Who Are Enrollment Relevant Children Related to the District Name Dist. No. County as of 2005 5-17 Years of Age Householder Abilene 43 5 Dickinson 1,386 Altoona-Midway 3 87 Wilson 310 Andover 385 Butler 3,453 Anthony-Harper 361 Harper 878 Argonia 359 Sumner 232 Arkansas City 470 Cowley 2,826 Ashland 220 Clark 228 Atchison County 377 Atchison 892 Atchison 409 Atchison 2,151 Attica 51 1 Harper 115 Auburn Washburn 437 Shawnee 5,961 Augusta 402 Butler 2,307 Axtell 488 Marshall 357 B&B 45 1 Nemaha 245 Baldwin City 348 Douglas 1,448 Barber Co. 254 Barber 597 Barnes 223 Washington 463 Basehor-Linwood 458 Leavenworth 1,932 Baxter Springs 508 Cherokee 875 Belle Plaine 357 Sumner 7 14 Beloit 273 Mitchell 820 Blue Valley USD 229 229 Johnson 21,451 Blue Valley USD 3 84 3 84 Riley 286 Bluestem 205 Butler 859 Bonner Springs 204 Wyandotte 2,248 Brewster 314 Thomas 118 Bucklin 459 Ford 326 Buhler 3 13 Reno 2,253 Burlingame Public School 454 Osage 293 Burlington 244 Coffey 738 Burrton 369 Harvey 274 Caldwell 360 Sumner 264 Caney Valley 43 6 Montgomery 758 Canton-Galva 419 McPherson 467 Cedar Vale 285 Chautauqua 184 Central Heights 288 Franklin 626 Central 462 Cowley 398 Centre 397 Marion 275 Chanute Public Schools 413 Neosho 1,775 Chapman 473 Dicltinson 1,036 Chase County 284 Chase 52 1 Chase-Raymond 40 1 Rice 176 Chautauqua Co. Community 286 Chautauqua 43 8 Cheney 268 Sedgwick 783 Cherokee 247 Crawford 915 Appendix I (cont'd) Kansas School District Populations, 2005 Estimated No. of U.S. Census Relevant Children 5. ICs Dept. of Bureau's 17 Yrs of Age in Education's Population of Poverty Who Are Enrollment Relevant Children Related to the District Name Dist. No. County as of 2005 5-17 Years of Age Householder Cherryvale Montgomery 713 568 156 Chetopa Labette 582 470 105 Cheylin Cheyenne 147 180 27 Cirnarron-Ensign Gray 668 675 66 Circle Butler 1,526 1,808 22 1 Claflin Barton 3 03 3 05 35 Clay Center Clay 1,377 1,378 171 Clearwater Sedgwick 1,285 1,211 74 Clifton-Clyde Washington 322 335 41 Coffeyville Montgomery 1,893 2,263 414 Colby Public Schools Thomas 1,020 1,116 114 Columbus Cherokee 1,239 1,401 266 Commanche County Comanche 329 325 36 Concordia Cloud 1,120 1,068 136 Conway Springs Sumner 690 63 5 49 Copeland Gray 140 190 33 Crest Anderson 254 280 . 43 Cunningham Kingman 218 290 32 DeSoto Johnson 5,207 3,875 150 Deerfield Kearny 3 62 336 56 Derby Sedgwick 6,597 7,626 5 85 Dexter Cowley 239 155 26 Dighton Lane 260 270 3 1 Dodge City Ford 5,977 6,759 1,069 Douglass Public Schools Butler 873 822 68 Durham-Hillsboro-Lehigh Marion 709 690 74 Eastern Heights Phillips 154 168 28 Easton Leavenworth 707 790 50 El Dorado Butler 2,196 2,157 321 Elk Valley Elk 204 174 45 Elkhart Morton 723 476 69 Ell-Saline Saline 473 356 . 43 Ellinwood Public Schools Barton 553 554 56 Ellis Ellis 404 355 44 Ellsworth Ellsworth 617 575 46 Elwood Doniphan 312 240 52 Emporia Lyon 4,911 4,795 774 Erie-St. Paul Neosho 733 842 105 Eudora Douglas 1,347 1,301 79 Eureka Greenwood 660 744 113 Fairfield Reno 390 494 95 Flinthills Butler 319 276 24 Ft. Scott Bourbon 1,970 2,149 434 Fowler Meade 190 177 12 Fredonia Wilson 776 810 156 Appendix I (cont'd) Kansas School District Populations, 2005 Estimated No. of U.S. Census Relevant Children 5. Ks Dept. of Bureau's 17 Yrs of Age in Education's Population of Poverty Who Are Enrollment Relevant Children Related to the District Name Dist. No. County as of 2005 5-17 Years of Age Householder Frontenac Public Schools 249 Crawford 785 598 Ft. Lamed 495 Pawnee 95 8 1,189 Ft. Leavenworth 207 Leavenworth 1,643 2,010 Galena 499 Cherokee 775 679 Garden City 457 Finney 7,405 8,643 Gardner-Edgerton 23 1 Johnson 3,865 3,181 Garnett 365 Anderson 1,151 1,262 Geary County Schools 475 Geary 6,226 5,961 Girard 248 Crawford 1,104 98 1 Goddard 265 Sedgwick 4,445 4,394 Goessel 41 1 Marion 279 303 Golden Plains 316 Thomas 200 118 Goodland 352 Sherman 1,006 1,027 Great Bend 428 Barton 3,180 3,157 Greeley County Schools 200 Greeley 267 278 Greensburg 422 Kiowa 293 270 Grinnell Public Schools 29 1 Gove 117 123 Halstead 440 Harvey 745 842 Hamilton 390 Greenwood 106 98 Hanston 228 Hodgeman 72 101 Haven Public Schools 3 12 Reno 1,093 1,279 Haviland 474 Kiowa 203 130 Hays 489 Ellis 3,012 3,217 Haysville 26 1 Sedgwick 4,663 4,405 Healy Public Schools 468 Lane 105 7 1 Herington 487 Dickinson 527 488 Hesston 460 Harvey 785 869 Hiawatha 415 Brown 938 1,016 Highland 425 Doniphan 247 196 Hill City 28 1 Graham 418 375 Hillcrest Rural Schools 455 Republic 100 100 Hoisington 43 1 Barton 655 662 Holcomb 3 63 Finney 930 909 Holton 336 Jackson 1,152 1,041 Hoxie Community Schools 412 Sheridan 340 3 63 Hugoton Public Schools 210 Stevens 1,065 1,007 Humboldt 258 Allen 544 43 0 Hutchinson Public Schools 308 Reno 4,777 5,124 Independence 446 Montgomery 1,965 2,255 Ingalls 477 Gray 263 210 Inman 448 McPherson 437 481 Iola 257 Allen 1,488 1,510 Jayhawk 346 Linn 589 607 Jefferson county North 339 Jefferson 497 448 Jefferson West 340 Jefferson 968 878 Appendix I (cont'd) Kansas School District Populations, 2005 Estimated No. of U.S. Census Relevant Children 5. Ks Dept. of Bureau's 17 Yrs of Age in Education's Population of Poverty Who Are Enrollment Relevant Children Related to the District Name Dist. No. County as of 2005 5-17 Years of Age Householder Jetmore 227 Hodgeman 3 12 261 Jewell 279 Jewell 147 155 Kansas City 500 Wyandotte 20,120 23,687 Kaw Valley 32 1 Pottawatomie 1,140 1,483 Kingman-Norwich 33 1 Kingman 1,169 1,202 Kinsely-Offerle 347 Edwards 349 379 Kismet-Plains 483 Seward 737 818 Labette County 506 Labette 1,707 1,425 Lacrosse 395 Rush 347 347 Lakin 215 Kearny 665 73 1 Lansing 469 Leavenworth 2,216 2,169 Lawrence 497 Douglas 10,302 12,099 Leavenworth 453 Leavenworth 4,147 4,974 Lebo-Waverly 243 Coffey 596 493 Leoti 467 Wichita 490 482 LeRoy-Gridley 245 Coffey 280 29 1 Lewis 502 Edwards 126 157 Liberal 480 Seward 4,482 4,658 Lincoln 298 Lincoln 3 86 3 92 Little River 444 Rice 297 328 Logan 326 Phillips 198 180 Lorraine 328 Ellsworth 477 457 Louisburg 416 Miami 1,536 1,382 Lyndon 42 1 Osage 468 442 Lyons 405 Rice 894 716 Macksville 35 1 Stafford 3 03 266 Madison-Virgil 3 86 Greenwood 258 27 1 Maize 266 Sedgwick 6,067 6,324 Manhattan 383 Riley 5,161 6,252 Mankato 278 Jewell 213 204 Marais Des Cygnes Valley 456 Osage 272 337 Marion-Florence 408 Marion 660 644 Marmaton Valley 256 Allen 373 335 Marysville 3 64 Marshall 800 857 McLouth 342 Jefferson 554 602 McPherson 418 McPherson 2,478 2,623 Meade 226 Meade 500 442 Midway Schools 433 Doniphan 202 224 Mill Creek Valley 329 Wabaunsee 47 1 599 Mimeola 219 Clark 257 2 12 Montema 37 1 Gray 268 320 Morris County 417 Morris 877 956 Moscow Public Schools 209 Stevens 236 187 Moundridge 423 McPherson 426 581 Mullinville 424 Kiowa 141 76 Appendix I (cont'd) Kansas School District Populations, 2005 Estimated No. of U.S. Census Relevant Children 5. Ks Dept. of Bureau's 17 Yrs of Age in Education's Population of Poverty Who Are Enrollment Relevant Children Related to the District Name Dist. No. County as of 2005 5-17 Years of Age Householder Mulvane 263 Sedgwick 2,176 Nemaha Valley Schools 442 Nemaha 627 Neodesha 46 1 Wilson 707 Ness City 303 Ness 23 8 Newton 373 Harvey 3,736 Nickerson 309 Reno 1,182 North Central 22 1 Washington 144 North Jackson 335 Jackson 395 North Lyon Co. 25 1 Lyon 72 1 North Ottawa Co. 239 Ottawa 589 Northeast 246 Crawford 725 Northern Valley 2 12. Norton 157 Norton Community Schools 21 1 Norton 63 1 Oakley 274 Logan 459 Oberlin 294 Decatur 475 Olathe 233 Johnson 24,938 Onaga-Havensville-Wheaton 322 Pottawatomie 375 Osage City 420 Osage 750 Osawatomie 367 Miami 1,327 Osborne County 3 92 Osborne 392 Oskaloosa Public Schools 34 1 Jefferson 689 Oswego 504 Labette 403 Otis-Bison 403 Rush 267 Ottawa 290 Franklin 2,559 Oxford 358 Sumner 389 Palco 269 Rooks 138 Paola 368 Miami 2,236 Paradise 399 Russell 140 Parsons 503 Labette 1,902 Pawnee Heights 496 Pawnee 131 Peabody-Burns 398 Marion 475 Perry Public Schools 343 Jefferson 1,106 Phillipsburg 325 Phillips 581 Pike Valley 426 Republic 225 Piper-Kansas City 203 Wyandotte 1,444 Pittsburg 250 Crawford 3,083 Plainville 270 Rooks 442 Pleasanton 344 Linn 397 Prairie Heights 295 Decatur 71 Prairie View 362 Linn 946 Pratt 3 82 Pratt 1,289 Pretty Prairie 311 Reno 3 16 Quinter Public Schools 293 Gove 283 Rawlins County 105 Rawlins 366 Remington-Whitewater 206 Butler 81 1 Appendix I (cont'd) Kansas School District Populations, 2005 Estimated No. of U.S. Census Relevant Children 5. Ks Dept. of Bureau's 17 Yrs of Age in Education's Population of Poverty Who Are Enrollment Relevant Children Related to the District Name Dist. No. County as of 2005 5-17 Years of Age Householder Renwick 267 Sedgwick 2,004 2,107 88 Republic County 427 Republic 455 434 58 Riley County 378 Riley 648 676 76 Riverton 404 Cherokee 903 699 131 Rock Creek 323 Pottawatomie 818 807 93 Rolla 217 Morton 206 168 24 Rose Hill Public Schools 394 Butler 1,738 1,915 109 Royal Valley 337 Jackson 962 938 85 Rural Vista 48 1 Dickinson 405 419 64 Russell County 407 Russell 1,020 980 149 Sabetha 44 1 Nemaha 945 915 94 Salina 305 Saline 7,399 8,446 1,107 Santa Fe Trail 434 Osage 1,250 1,271 123 Satanta 507 Haskell 402 43 8 5 9 Scott County 466 Scott 965 867 85 Seaman 345 Shawnee 3,479 3,621 235 Sedgwick Public Schools 439 Harvey 547 436 5 1 Shawnee Heights 450 Shawnee 3,478 3,605 253 Shawnee Mission Pub. Schools 512 Johnson 28,529 39,897 1,897 Silver Lake 372 Shawnee 759 700 25 Skyline Schools 43 8 Pratt 364 213 40 Smith Center 237 Smith 44 1 454 59 Smoky Valley 400 McPherson 1,064 963 55 Solomon 3 93 Dickinson 418 3 84 59 South Barber Co. 255 Barber 262 268 46 South Brown County 430 Brown 685 689 116 South Haven 509 Sumner 25 1 193 27 Southeast of Saline 306 Saline 715 673 41 Southern Cloud 334 Cloud 228 252 54 Southern Lyon Co. 252 Lyon 613 64 1 60 Spearville 381 Ford 355 320 25 Spring Hill 230 Johnson 1,715 1,582 83 St. Francis Community Schools 297 Cheyenne 323 372 3 9 St. John-Hudson 3 50 Stafford 417 356 44 Stafford 349 Stafford 317 278 53 Stanton County 452 Stanton 486 497 57 Sterling 376 Rice 529 490 49 Stockton 27 1 Rooks 356 3 67 64 Sublette 374 Haskell 537 526 80 Sylvan Grove 299 Lincoln 147 163 21 Syracuse 494 Hamilton 485 506 70 Tonganoxie 464 Leavenworth 1,706 1,582 104 Topeka Public Schools 501 Shawnee 13,343 15,698 2,980 Triplains 275 Logan 123 79 14 Troy Public Schools 429 Doniphan 381 341 3 5 Appendix I (cont'd) Kansas School District Populations, 2005 Estimated No. of U.S. Census Relevant Children 5. Ks Dept. of Bureau's 17 Yrs of Age in Education's Population of Poverty Who Are Enrollment Relevant Children Related to the District Name Dist. No. County as of 2005 5-17 Years of Age Householder Turner-Kansas City 202 Wyandotte 3,868 3,849 69 1 Twin Valley 240 Ottawa 665 476 37 Udall 463 Cowley 391 425 27 Ulysses 214 Grant 1,771 1,643 224 Uniontown 235 Bourbon 480 433 84 Valley Center Pub. Schools 262 Sedgwick 2,5 18 2,679 147 Valley Falls 33 8 Jefferson 45 0 453 3 5 Valley Heights 498 Marshall 402 3 92 44 Vermillon 380 Marshall 568 506 77 Victoria 432 Ellis 269 255 18 Wabaunsee East 330 Wabaunsee 547 558 72 Waconda 272 Mitchell 372 440 48 WaKeeney 208 Trego 4 14 45 8 57 Wallace Co. Schools 241 Wallace 207 234 34 Wamego 320 Pottawatomie 1,337 1,496 107 Washington Schools 222 Washington 369 343 35 Wathena 406 Doniphan 395 364 59 Wellington 353 Sumner 1,715 1,781 254 Wellsville 289 Franklin 824 853 52 Weskan 242 Wallace 123 87 20 West Elk 282 Elk 439 3 72 86 West Franklin 287 Franklin 913 1,050 98 West Smith Co. 23 8 Smith 182 153 12 West Solomon Valley Schools 213 Norton 61 97 10 Western Plains 106 Ness 199 2 12 25 Wheatland 292 Gove 171 148 29 White Rock 104 Jewel1 100 163 23 Wichita 259 Sedgwick 48,655 58,217 9,643 Winfield 465 Cowley 2,559 2,641 432 Woodson 366 Woodson 461 416 83

Sources: Kansas Department of Education and the U.S. Census Bureau [~ittp://www.census.govhhes/www/saipe/district.htm2] Appendix J Health Insurance Coverage Status for the U.S. & Kansas, 1990-2007 (Numbers in Tlfozisartds,Number of People as of Marclt of tlte Followiitg Year)

Not Covered Covered by Private or Gov. Health Ins. Total Pop. Number Error Percent Error Number Error Percent Error U.S. 2007 299,106 45,657 320 15.3% 0.1 253,449 307 84.7 % 0.1 2006 296,824 46,995 324 15.8 0.1 249,829 318 84.2 0.1 2005 293,834 46,577 322 15.9 0.1 247,257 325 84.1 0.1 2004 291,166 45,820 320 15.7 0.1 245,860 330 84.3 0.1 2003 288,280 44,961 318 15.6 0.1 243,320 335 84.4 0.1 2002 285,933 43,574 314 15.2 0.1 242,360 338 84.8 0.1 2001 282,082 41,207 307 14.6 0.1 240,875 341 85.4 0.1 2000 ' 279,517 39,804 300 14.2 0.1 239,714 247 85.8 0.1 1999 276,804 40,228 423 14.5 0.2 236,576 412 85.5 0.2 1999 274,087 42,554 433 15.5 0.2 23 1,533 434 84.5 0.2 1998 271,743 44,281 440 16.3 0.2 227,462 450 83.7 0.2 1997 269,094 43,448 437 16.1 0.2 225,646 457 83.9 0.2 1996 266,792 41,716 429 15.6 0.2 225,077 459 84.4 0.2 1995 264,314 40,582 424 15.4 0.2 223,733 463 84.6 0.2 1994 262,105 39,718 408 15.2 0.2 222,387 53 1 84.8 0.2 1993 259,753 39,713 421 15.3 0.2 220,040 476 84.7 0.2 1992 256,830 38,641 416 15.0 0.2 218,189 482 85.0 0.2 1991 251,447 35,445 401 14.1 0.2 216,003 489 85.9 0.2 1990 248,886 34,719 398 13.9 0.2 214,167 495 86.1 0.2

Implementation of a 28,000 household sample expansion. Estimates reflect the results of follow-up verification questions and of Census 2000 based population controls. Beginning with the March 1998 CPS, people with no coverage other than access to Indian Health Service are no longer considered to be uninsured. The effect of this change on the overall estimates of health insurance coverage is negligible; however, the decrease in the number of people covered by Medicaid may be partially due to this change. Health insurance questions were redesigned. Increases in estimates of employment-based and military health care coverage may be partially due to questionnaire changes. Overall coverage estimates were not affected. Data collection method changed from paper and pencil to computer-assisted interviewing. Implementation of Census 1990 based population controls. Figures are revised to correct for omitted weights from the original March 1992 CPS file.

Source: U.S. Census Bzrreazr Appendix K Kansas Resident Population, 2001 through 2007 By Age, Race, Gender, & Ethnicity Population k ------7/1/2001 7/1/2002 7/1/2003 7/1/2004 7/1/2005 7/1/2006 7/1/2007 Kansas A11Ages 2,700,879 2,712,454 2,724,224 2,733,697 2,744,687 2,764,075 2,775,997 <5 187,221 188,796 188,667 188,536 187,949 194,100 196,138 5-19 599,792 595,019 587,099 579,663 569,356 582,455 581,010 20-64 1,558,697 1,574,715 1,594,275 1,610,273 1,630,377 1,629,811 1,638,633 -> 65 355,169 353,924 354,183 355,225 357,005 357,709 360,216 -> 85* 52,981 53,279 54,259 55,798 57,665 59,518 60,712 Race I White Alone A11 Ages 2,424,103 2,430,696 2,438,246 2,444,629 2,452,657 2,462,232 2,467,314 I Black Alone All Ages 158,301 159,687 160,434 161,016 161,504 164,507 168,531 her.Ind. & AK Nat. Alone All Ages 25,292 25,441 25,555 25,554 25,786 27,374 27,775 Asian Alone All Ages 50,092 52,451 54,775 56,415 57,759 60,870 61,720 Nat. HI & Other Pac. Isl. Alone All Ages 1,635 1,708 1,784 1,830 1,867 1,863 1,970 Two or More Races All Ages 41,456 42,471 43,430 44,253 45,114 47,229 48,687 White Alone <5 160,695 162,361 162,531 162,842 162,626 165,293 166,570 Black Alone <5 13,345 13,145 12,843 12,428 12,029 14,294 14,904 Amer. Ind. & AK Nat. Alone <5 1,916 1,850 1,753 1,710 1,704 2,088 2,039 Asian Alone <5 3,882 4,002 4,148 4,278 4,391 4,790 4,955 Nat. HI & Other Pac. Isl. Alone < 5 129 122 113 106 100 106 146 Two or More Races <5 7,254 7,316 7,279 7,172 7,099 7,529 7,524 White Alone 5-19 523,509 518,200 510,391 502,959 493,307 503,966 499,706 Black Alone 5-19 43,274 43,348 42,905 42,556 41,711 42,264 43,895 her.Ind. & AK Nat. Alone 5-19 6,842 6,720 6,570 6,400 6,294 6,721 6,811 Asian Alone 5-19 10,485 10,645 10,763 10,885 10,887 11,527 11,713 Nat. HI & Other Pac. Isl. Alone 5-19 442 445 458 463 46 1 456 503 Two or More Races 5-19 15,240 15,661 16,012 16,400 16,696 17,521 18,382 White Alone 20-64 1,402,082 1,413,878 1,429,197 1,442,118 1,458,871 1,455,085 1,461,598 Black Alone 20-64 89,647 91,122 92,562 93,806 95,332 95,636 97,014 Amer. Ind. & AK Nat. Alone 20-64 15,240 15,490 15,772 15,922 16,151 16,756 16,985 Asian Alone 20-64 33,547 35,475 37,341 38,514 39,498 41,279 41,509 Nat. HI & Other Pac. Isl. Alone 20-64 998 1,072 1,138 1,177 1,216 1,201 1,213 Two or More Races 20-64 17,183 17,678 18,265 18,736 19,309 19,854 20,3 14 White Alone -> 65 337,817 336,257 336,127 336,710 337,853 337,888 339,440 Black Alone -> 65 12,035 12,072 12,124 12,226 12,432 12,313 12,718 Amer. Ind. & AK Nat. Alone -> 65 1,294 1,381 1,460 1,522 1,637 1,809 1,940 Asian Alone -> 65 2,178 2,329 2,523 2,738 2,983 3,274 3,543 Nat. HI & Other Pac. Isl. Alone > 65 66 69 75 84 90 100 108 Two or More Races -> 65 1,779 1,816 1,874 1,945 2,010 2,325 2,467 White Alone 2 85* 51,023 51,272 52,208 53,655 55,328 57,272 58,277 Black Alone -> 85* 1,487 1,502 1,509 1,555 1,674 1,521 1,632 Arner. Ind. & AK Nat. Alone -> 85* 120 130 140 154 179 167 21 1 Asian Alone -> 85* 143 158 179 195 223 248 260 Nat. HI & Other Pac. Isl. Alone 2 85* 8 9 11 12 13 17 18 Two or More Races -> 85* 200 208 212 227 248 293 314

1 * The age category of 2 85yeai-s is a subset of the 2 65 years age category. Appendix K (cont'd) Kansas Resident Population, 2001 through 2007 By Age, Race, Gender, & Ethnicity As a % of Total Population "** h ------7/1/2001 7/1/2002 7/1/2003 7/1/2004 7/1/2005 7/1/2006 7/1/2007 Kansas A11 Ages 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % <5 6.9 7.0 6.9 6.9 6.8 7.0 7.1 5-19 22.2 21.9 21.6 21.2 20.7 21.1 20.9 20-64 57.7 58.1 58.5 58.9 59.4 59.0 59.0 -> 65 13.2 13.0 13.0 13.0 13.0 12.9 13.0 -> 85* 2.0 2.0 2.0 2.0 2.1 2.2 2.2 Race** White Alone All Ages 89.8% 89.6% 89.5% 89.4% 89.4% 89.1% 88.9 % Black Alone All Ages 5.9 5.9 5.9 5.9 5.9 6.0 6.1 her.Ind. & AK Nat. Alone All Ages 0.9 0.9 0.9 0.9 0.9 1.O 1.O Asian Alone All Ages 1.9 1.9 2.0 2.1 2.1 2.2 2.2 Nat. HI & Other Pac. Isl. Alone All Ages 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Two or More Races All Ages 1.5 1.6 1.6 1.6 1.6 1.7 1.8 White Alone <5 85.8 86.0 86.1 86.4 86.5 85.2 % 84.9 % Black Alone <5 7.1 7.0 6.8 6.6 6.4 7.4 7.6 her.Ind. & AK Nat. Alone <5 1.O 1.O 0.9 0.9 0.9 1.1 1.O Asian Alone <5 2.1 2.1 2.2 2.3 2.3 2.5 2.5 Nat. HI & Other Pac. Isl. Alone < 5 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Two or More Races <5 3.9 3.9 3.9 3.8 3.8 3.9 3.8 White Alone 5-19 87.3 87.1 86.9 86.8 86.6 86.5 % 86.0 % Black Alone 5-19 7.2 7.3 7.3 7.3 7.3 7.3 7.6 Amer. Ind. & AK Nat. Alone 5-19 1.1 1.1 1.1 1.1 1.1 1.2 1.2 Asian Alone 5-19 1.7 1.8 1.8 1.9 1.9 2.0 2.0 Nat. HI & Other Pac. Isl. Alone 5-19 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Two or More Races 5-19 2.5 2.6 2.7 2.8 2.9 3.0 3.2 White Alone 20-64 90.0 89.8 89.6 89.6 89.5 89.3 % 89.2 % Black Alone 20-64 5.8 5.8 5.8 5.8 5.8 5.9 5.9 her.Ind. & AK Nat. Alone 20-64 1.O 1.O 1.O 1.0 1.0 1.0 1.0 Asian Alone 20-64 2.2 2.3 2.3 2.4 2.4 2.5 2.5 Nat. HI & Other Pac. Isl. Alone 20-64 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Two or More Races 20-64 1.1 1.1 1.1 1.2 1.2 1.2 1.2 White Alone -> 65 95.1 95.0 94.9 94.8 94.6 94.5 % 94.2 % Black Alone -> 65 3.4 3.4 3.4 3.4 3.5 3.4 3.5 her. Ind. & AK Nat. Alone -> 65 0.4 0.4 0.4 0.4 0.5 0.5 0.5 Asian Alone -> 65 0.6 0.7 0.7 0.8 0.8 0.9 1.0 Nat. HI & Other Pac. Isl. Alone > 65 65 0.5 0.5 0.5 0.5 0.6 0.6 0.7 White Alone -> 85" 96.3 96.2 96.2 96.2 95.9 96.2 % 96.0 % Black Alone -> 85" 2.8 2.8 2.8 2.8 2.9 2.6 2.7 Amer. Ind. & AK Nat. Alone -> 85* 0.2 0.2 0.3 0.3 0.3 0.3 0.3 Asian Alone -> 85* 0.3 0.3 0.3 0.3 0.4 0.4 0.4 Nat. HI & Other Pac. Isl. Alone > 85* 85* 0.4 0.4 0.4 0.4 0.4 0.5 0.5

* The age categoiy of 2 85 years is a strbset of the 1 65 years age categov. **Percentage of total population for each age grotip by race is relative to the total population for that age group only. *** Totals may not add because of rounding. Appendix K (cont'd) Kansas Resident Population, 2001 through 2007 By Age, Race, Gender, & Ethnicity Population & ------7/1/2001 7/1/2002 7/1/2003 7/1/2004 7/1/2005 7/1/2006 7/1/2007 Gender Male AllAges 1,336,664 1,343,636 1,351,169 1,357,412 1,363,613 1,371,446 1,376,311 Female AllAges 1,364,215 1,368,818 1,373,055 1,376,285 1,381,074 1,392,629 1,399,686

Male Female

Male Female

Male Female

Male Female

Male Female

Ethnicity Non-Hispanic A11 Ages 2,503,224 2,507,069 2,510,858 2,512,886 2,516,437 2,526,649 2,531,691 Hispanic All Ages 197,655 205,385 213,366 220,811 228,250 237,426 244,306

Non-~is~anic Hispanic

Non-Hispanic Hispanic

Non-Hispanic Hispanic

Non-Hispanic Hispanic

Non-Hispanic Hispanic

* The age category of 2 85 years is a subset of the 2 65 years age category. Appendix K (cont'd) Kansas Resident Population, 2001 through 2007 By Age, Race, Gender, & Ethnicity As a % of Total Population & 7/1/2001 7/1/2002 7/1/2003 7/1/2004 7/1/2005 7/1/2006 7/1/2007 Gender Male All Ages 49.5 % 49.5 % 49.6 % 49.7 % 49.7 % 49.6 % 49.6 % Female All Ages 50.5 50.5 50.4 50.3 50.3 50.4 50.4

Male Female

Male Female

Male Female

Male Female

Male Female

Ethnicity Won-Hispanic All Ages 92.7 % 92.4 % 92.2 % 91.9 % 91.7 % 91.4 % 91.2 % Hispanic All Ages 7.3 7.6 7.8 8.1 8.3 8.6 8.8

Non-Hispanic Hispanic

Non-Hispanic Hispanic

Won-Hispanic Hispanic

Non-Hispanic Hispanic

Non-Hispanic Hispanic

* The age category of 2 85 years is a szrbset of the 2 65 years age category. Appendix L Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Allen County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Anderson County Total P~pulation Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Atchison County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 7 - Atchison County (cont'd) Age 55 thm 59 1,039 1,062 1,085 1,111 1,134 1,157 1,181 1,204 1,227 1,250 1,273 1,295 Age 60 thm 64 791 795 799 804 806 809 81 1 813 814 815 816 815 Age 65 thru 84 2,109 2,084 2,057 2,031 2,003 1,973 1,942 1,912 1,881 1,850 1,819 1,786 Age 85 & Older 486 491 496 501 509 517 524 527 530 533 536 539

Barber County Total Population Age 0 thru 4 Age 5 thm 9 Age 10 thm 14 Age 15 thru 19 Age 20 thm 24 Age 25 thm 29 Age 30 thru 34 Age 35 thm 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thm 59 Age 60 thru 64 Age 65 thm 84 Age 85 & Older

Barton County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thm 14 Age 15thm19 Age 20 thm 24 Age 25 thru 29 Age 30 thm 34 Age 35 thm 39 Age 40 thm 44 Age 45 thru 49 Age 50 thm 54 Age 55 thru 59 Age 60 thm 64 Age 65 thm 84 Age 85 & Older

Bourbon County Total Population 15,014 15,012 15,004 14,977 14,940 14,906 14,877 14846 14,811 14,783 14,760 14,736 Age 0 thru 4 1,038 1,048 1,059 1,068 1,075 1,082 1,089 1,093 1,097 1,101 1,106 1,110 Age 5 thru 9 786 759 73 1 704 677 652 628 605 582 560 538 517 Age 10 thru 14 971 955 938 919 897 874 854 835 816 797 778 759 Age 15 thru 19 1,058 1,031 1,003 980 957 936 915 893 869 847 824 802 Age 20 thru 24 1,230 1,275 1,318 1,346 1,378 1,406 1,434 1,471 1,508 1,545 1,583 1,619 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009 Bourbon County (cont'd) Age 25 thru 29 948 Age 30 thru 34 850 Age 35 thru 39 701 Age 40 thru 44 922 Age 45 thru 49 1,096 Age 50 thru 54 1,147 Age 55 thru 59 1,032 Age 60 thru 64 851 Age 65 thru 84 1,880 Age 85 & Older 504

Brown County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thm 84 1 Age 85 & Older

Butler County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thm 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 1 Age 85 & Older Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Chase County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Chautauqua County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Cherolcee County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-----2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Cherokee County (cont'd) Age 55 thru 59 1,523 1,563 1,598 1,639 1,678 1,720 1,758 1,798 1,839 1,881 Age 60 thru 64 1,234 1,253 1,272 1,289 1,303 1,313 1,325 1,337 1,350 1,364 Age 65 thru 84 2,743 2,727 2,708 2,688 2,663 2,633 2,605 2,575 2,546 2,520 Age 85 & Older 526 529 532 535 536 538 539 540 541 542

Cheyenne County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thm 14 Age 15 thm 19 Age 20 thm 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thm 54 Age 55 thm 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Clark County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thm 24 Age 25 thm 29 Age 30 thm 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Clay County Total Population 8,481 8,438 8,393 8,339 8,294 8,255 8,215 8,175 8,137 8,101 Age 0 thm 4 380 369 358 346 334 322 311 301 290 280 Age 5 thru 9 378 360 341 323 306 292 277 263 249 236 Age 10 thru 14 484 463 442 42 1 401 380 362 345 328 312 Age 15 thru 19 581 5 72 562 551 541 530 519 509 499 488 Age 20 thru 24 697 737 780 820 858 898 939 981 1,025 1,071 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Clay County (eont'd) Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Cloud County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Coffey County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Comanche County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thm 64 Age 65 thm 84 Age 85 & Older

Cowley County Total Population Age 0 thru 4 Age 5 th~9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 ~~e'35thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thm 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Crawford County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thm 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-----2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2013 2020 Crawford County (cont'd) Age 55 thru 59 2,241 2,302 2,361 2,426 2,485 2,550 2,619 2,683 2,747 2,812 2,875 2,939 Age 60 thru 64 1,600 1,613 1,625 1,638 1,641 1,641 1,638 1,640 1,642 1,644 1,644 1,644 Age 65 thru 84 4,078 3,993 3,907 3,824 3,740 3,664 3,580 3,490 3,402 3,316 3,229 3,144 Age 85 & Older 1,259 1,272 1,284 1,292 1,301 1,311 1,317 1,320 1,322 1,324 1,325 1,324

Decatnr County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thm 64 Age 65 thm 84 Age 85 & Older

Diekinson County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thm 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thm 49 Age 50 thru 54 Age 55 thru 59 Age 60 thm 64 Age 65 thru 84 Age 85 & Older

Doniphan County Total Population 7,596 7,527 7,446 7,374 7,319 7,267 7,219 7,179 7,145 7,115 7,091 7,067

Age 0 thru 4 360 348 334 ' 321 309 299 289 279 269 260 251 243 Age 5 thm 9 454 443 433 423 416 410 404 399 396 392 388 385 Age 10 thru 14 503 494 486 479 474 470 465 462 460 458 457 456 Age 15 thru 19 750 743 73 7 732 730 731 735 73 8 743 748 753 758 Age 20 thru 24 463 452 438 426 412 396 379 364 350 338 329 320 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009 Doniphan County (cont'd) Age 25 thru 29 427 Age 30 thru 34 371 Age 35 thru 39 399 Age 40 thru 44 468 Age 45 thru 49 648 Age 50 thru 54 648 Age 55 thru 59 541 Age 60 thru 64 339 Age 65 thru 84 1,003 Age 85 & Older 222

Douglas County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thm 19 Age 20 thm 24 Age 25 thp 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Edwards County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Elk County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thm 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Ellis County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thm 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Ellsworth County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009 - 2010 -2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Ellsworth County (cont'd) Age 55 thru 59 466 480 495 512 526 540 557 570 584 598 612 625 Age 60 thru 64 336 338 341 341 340 338 336 334 333 33 1 329 327 Age 65 thru 84 933 915 898 882 866 849 832 81 1 791 771 75 1 73 1 Age 85 & Older 222 217 21 1 206 203 201 197 193 188 183 178 173

Finney County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Ford County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Franklin County Total Population 27,172 27,276 27,344 27,423 27,519 27,607 27,671 27,694 27,709 27,744 27,787 27,851 Age 0 thru 4 1,691 1,683 1,671 1,656 1,636 1,616 1,594 1,571 1,547 1,523 1,499 1,476 Age 5 thru 9 1,576 1,541 1,505 1,476 1,453 1,435 1,415 1,393 1,372 1,351 1,329 1,308 Age 10 thru 14 1,761 1,727 1,691 1,660 1,629 1,599 1,571 1,547 1,524 1,501 1,476 1,452 Age 15 thru 19 2,098 2,105 2,112 2,117 2,128 2,144 2,166 2,183 2,202 2,219 2,235 2,252 Age 20 thru 24 2,160 2,198 2,231 2,252 2,261 2,251 2,228 2210 2,189 2,182 2,189 2,202 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009 Franklin County (cont'd) Age 25 thru 29 2,213 Age 30 thm 34 1,546 Age 35 thm 39 1,481 Age 40 thru 44 2,110 Age 45 thru 49 2,216 Age 50 thm 54 1,872 Age 55 thm 59 1,491 Age 60 thru 64 1,247 Age 65 thru 84 3,076 Age 85 & Older 634

Geary County Total Population Age 0 thru 4 Age 5 th~9 Age 10 thm 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thm 34 Age 35 thru 39 Age 40 thm 44 Age 45 thm 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Gove County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 th~14 Age 15 thm 19 Age 20 thm 24 Age 25 thru 29 Age 30 thm 34 Age 35 thru 39 Age 40 thru 44 Age 45 thm 49 Age 50 thru 54 Age 55 thm 59 Age 60 thm 64 Age 65 thru 84 Age 85 & Older Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Graham County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Grant County Total Population Age 0 tlm 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Gray County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009201020112012201320142015201620172018 Gray County (cont'd) Age 55 thru 59 383 398 412 430 446 462 478 493 509 524 Age 60 thru 64 3 13 332 353 375 399 424 447 469 492 517 Age 65 thru 84 572 569 566 561 556 550 544 537 529 52 1 Age 85 & OIder 124 121 I18 115 112 110 108 106 103 100

Greeley County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thm 84 Age 85 & Older

Greenwood County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Hamilton County Total Population 2,666 2,687 2,702 2,717 2,729 2,735 2,738 2,742 2,747 2,750 Age 0 thru 4 210 215 219 223 225 227 228 230 232 234 Age 5 thru 9 151 147 143 140 137 134 130 126 122 118 Age 10 thru 14 161 155 148 142 136 129 124 118 113 107 Age 15 thru 19 225 227 229 230 230 231 23 1 232 232 231 Age 20 thru 24 227 245 263 279 298 318 339 361 384 408 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009 Hamilton County (cont'd) Age 25 thru 29 125 Age 30 thru 34 150 Age 35 thru 39 123 Age 40 thru 44 180 Age 45 thru 49 218 Age 50 thru 54 216 Age 55 thru 59 139 Age 60 thru 64 109 Age 65 thru 84 332 Age 85 & Older 100

Harper County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Harvey County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Haskell County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thm 14 Age 15 thm 19 Age 20 thru 24 Age 25 thm 29 Age 30 thm 34 Age 35 thm 39 Age 40 thm 44 Age 45 thm 49 Age 50 thm 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Hodgeman County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thm 14 Age 15 thru 19 Age 20 thm 24 Age 25 thm 29 Age 30 thm 34 Age 35 thm 39 Age 40 thru 44 Age 45 thm 49 Age 50 thm 54 Age 55 thm 59 Age 60 thm 64 Age 65 thm 84 Age 85 & Older

Jackson County Total Population AgeOthru4 Age5thru9 Age 10 thm 14 Age 15 thm 19 Age 20 thm 24 Age 25 thm 29 Age 30 thm 34 Age 35 thm 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-20092010201120122013201420152016201720182019l Jackson County (cont'd) Age 55 thru 59 1,002 1,034 1,060 1,079 1,093 1,108 1,125 1,139 1,147 1,152 1,153 1,153 Age 60 thru 64 667 670 670 662 655 648 640 63 1 619 605 590 575 Age 65 thru 84 1,603 1,604 1,609 1,638 1,661 1,678 1,695 1,711 1,729 1,747 1,763 1,781 Age 85 & Older 35 1 355 361 372 383 3 94 404 413 423 433 443 453

Jefferson County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84

I Age 85 & Older

Jewell County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thm 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Johnson County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 i Age 15 thru 19 Age 20 thru 24 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009 Johnson County (cont'd) Age 25 thru 29 37,661 Age 30 thru 34 38,358 Age 35 thru 39 38,125 Age 40 thru 44 44,676 Age 45 thru 49 43,943 Age 50 thru 54 41,485 Age 55 thru 59 38,815 Age 60 thru 64 22,598 Age 65 thru 84 49,2 18 Age 85 & Older 8,876

Kearny County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Kingman County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Kiowa County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Labette County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Lane County Total Population Age 0 thru 4 Age 5 tlvu 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009201020112012201322015201620172018 Lane County (cont'd) Age 55 thru 59 138 140 142 144 143 141 140 140 139 138 Age 60 thru 64 108 108 107 107 107 107 106 105 103 101 Age 65 thru 84 289 279 270 261 252 24 1 23 1 220 210 201 Age 85 & Older 77 76 74 73 7 1 69 67 65 63 6 1

Leavenworth County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thm 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thm 39 Age 40 thru 44 Age 45 thm 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thm 84 Age 85 & Older

Lincoln County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15th~19 Age 20 thru 24 Age 25 thm 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thm 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Linn County Total Population 10,165 10,180 10,194 10,220 10,237 10,246 10,246 10,227 10,211 10,200 Age 0 thru 4 517 508 497 485 47 1 458 447 434 422 409 Age 5 thru 9 593 587 5 82 581 5 83 583 579 576 573 570 Age 10 thm 14 580 564 549 534 518 505 494 482 470 458 Age 15 thru 19 642 635 629 622 616 610 604 599 594 589 Age 20 thru 24 778 . 813 850 886 919 948 970 988 1006 1,031 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Linn County (cont'd) Age 25 thm 29 Age 30 thm 34 Age 35 thm 39 Age 40 thru 44 Age 45 thm 49 Age 50 thm 54 Age 55 thru 59 Age 60 thm 64 Age 65 thm 84 Age 85 & Older

Logan County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thm 19 Age 20 thru 24 Age 25 thru 29 Age 30 thm 34 Age 35 thru 39 Age 40 thru 44 Age 45 thm 49 Age 50 thru 54 Age 55 thm 59 Age 60 thm 64 Age 65 thru 84 Age 85 & Older

Lyon County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thm 24 Age 25 thm 29 Age 30 thm 34 Age 35 thru 39 Age 40 thru 44 Age 45 thm 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Marion County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Marshall County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

McPherson County

Total Population ' Age 0 thru 4 Age 5 Nuu 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009 -2010 2011 2013 2014 2015 2016 2017 2018 2019 2020 McPherson County (cont'd) Age 55 thru 59 2,090 2,182 2,276 2,379 2,470 2,563 2,658 2,755 2,856 2,962 3,070 3,180 Age 60 thru 64 1,405 1,430 1,457 1,487 1,517 1,544 1,567 1,586 1,606 1,627 1,648 1,670 Age 65 thru 84 4,002 3,971 3,940 3,906 3,871 3,833 3,789 3,741 3,692 3,644 3,595 3,545 Age 85 & Older 887 881 873 864 856 849 841 832 823 813 803 793

Meade County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thm 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thm 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Miami County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thm 34 Age 35 thm 39 Age 40 thru 44 Age 45 thru 49 Age 50 thm 54 Age 55 thru 59 Age 60 thm 64 Age 65 thru 84 Age 85 & Older

Mitchell County Total Population 6,194 6,134 6,066 5,999 5,933 5,861 5,785 5,711 5,639 5,569 5,494 5,426 Age 0 thru 4 265 257 249 242 234 226 218 210 202 195 187 180 Age 5 thru 9 274 262 249 237 226 215 204 193 183 173 164 155 Age 10 thru 14 343 327 310 293 277 261 246 233 220 208 195 184 Age 15 thru 19 643 637 630 622 614 606 596 587 577 567 556 546 Age 20 thru 24 328 332 336 342 345 348 350 352 354 355 357 358 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009 - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Mitchell County (cont'd) Age 25 thru 29 203 196 190 182 177 170 164 157 150 144 138 132 Age 30 thru 34 212 203 193 184 176 165 155 147 139 131 123 116 Age 35 thru 39 234 218 201 186 171 159 147 136 126 116 107 98 Age 40 thru 44 467 462 456 448 440 43 1 42 1 412 403 395 385 3 76 Age 45 thru 49 527 530 53 1 53 1 532 532 532 53 1 530 528 525 522 Age 50 thru 54 577 591 603 613 623 632 643 653 663 672 680 688 Age 55 thru 59 513 532 553 577 601 625 647 667 689 710 732 755 Age 60 thru 64 3 63 369 375 380 384 388 391 393 395 397 399 400 Age 65 thru 84 988 965 942 920 897 874 849 823 797 773 747 723 Age 85 & Older 257 253 248 242 23 6 229 222 217 21 1 205 199 193

Montgomery County Total Population 33,468 33,192 32,909 32,626 32,338 32,040 31,741 31,442 31,152 30,875 30,600 30,316 Age 0 tl~ru4 2,016 1,995 1,973 1,952 1,923 1,894 1,866 1,838 1,810 1,782 1,755 1,726 Age 5 thru 9 1,781 1,718 1,656 1,595 1,540 1,484 1,432 1,379 1,328 1,278 1,229 1,182 Age 10 thru 14 2,069 2,011 1,950 1,891 1,832 1,774 1,713 1,660 1,607 1,556 1,505 1,454 Age 15 thru 19 2,384 2,330 2,274 2,221 2,166 2,115 2,066 2,017 1,968 1,918 1,869 1,819 Age 20 thru 24 2,335 2,379 2,420 2,447 2,469 2,479 2,491 2518 2,544 2,570 2,593 2,614 Age 25 thru 29 1,974 1,977 1,987 2,008 2,036 2,068 2,085 2,087 2,091 2,098 2,106 2,115 Age 30 thru 34 1,528 1,481 1,431 1,379 1,329 1,278 1,232 1,186 1,142 1,099 1,058 1,017 Age 35 thru 39 1,753 1,685 1,620 1,560 1,501 1,445 1,393 1,338 1,285 1,233 1,184 1,135 Age 40 thru 44 2,274 2,238 2,201 2,160 2,121 2,081 2,036 1,997 1,958 1,919 1,880 1,840 Age 45 thru 49 2,442 2,428 2,410 2,389 2,368 2,344 2,322 2,300 2,276 2,254 2,230 2,204 Age 50 thru 54 2,723 2,773 2,820 2,861 2,909 2,962 3,016 3,064 3,112 3,160 3,206 3,251 Age 55 thru 59 2,362 2,399 2,433 2,475 2,504 2,536 2,570 2,603 2,636 2,668 2,699 2,729 Age 60 thru 64 2,067 2,116 2,172 2,228 2,281 2,325 2,368 2,410 2,454 2,501 2,549 2,596 Age 65 thru 84 4,613 4,510 4,405 4,301 4,198 4,094 3,992 3,889 3,788 3,689 3,591 3,493 Age 85 & Older 1,147 1,152 1,157 1,159 1,161 1,161 1,159 1,156 1,153 1,150 1,146 1,141

Morris County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Morton County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thm 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thm 64 Age 65 thru 84 Age 85 & Older

Nemaha County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thm 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thm 84 Age 85 & Older

Neosho County Total Population Age 0 thru 4 Age 5 tlru 9 Age 10 thm 14 Age 15 thru 19 Age 20 thm 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 1 Age 45 thru 49 Age 50 thm 54 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009201020112012201320142015201620172018 Neosho County (cont'd) Age 55 thru 59 1,147 1,185 1,225 1,269 1,306 1,344 1,381 1,421 1,462 1,504 Age 60 thru 64 799 797 794 794 791 788 783 779 774 769 Age 65 thm 84 2,203 2,166 2,128 2,090 2,050 2,007 1,966 1,925 1,885 1,845 Age 85 & Older 515 519 523 528 531 534 536 537 538 539

Ness County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Norton County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thm 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Osage County Total Population 17,589 17,664 17,740 17,837 17,923 17,987 18,045 18,080 18,112 18,143 Age 0 thru 4 807 783 758 734 714 691 668 645 62 1 597 Age 5 thm 9 1,044 1,028 1,015 1,004 993 984 975 965 957 948 Age 10 thru 14 1,153 1,132 1,113 1,094 1,077 1,060 1,044 1,030 1,017 1,002 Age 15 thru 19 1,361 1,377 1,399 1,421 1,445 1,469 1,495 1,520 1,547 1,574 Age 20 thru 24 1,260 1,300 1,339 1,381 1,419 1,447 1,460 1479 1,493 1,516 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Osage County (cont'd) Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Osborne County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Ottawa County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Pawnee County Total Population Age 0 thru 4 Age 5 thm 9 Age 10 thm 14 Age 15 thm 19 Age 20 thm 24 Age 25 thm 29 Age 30 thm 34 Age 35 thru 39 Age 40 thm 44 Age 45 thru 49 Age 50 thm 54 Age 55 thm 59 Age 60 thm 64 Age 65 thm 84 Age 85 & Older

Phillips County Total Population Age 0 thru 4 Age 5 th~9 Age 10 thru 14 Age 15 thm 19 Age 20 thm 24 Age 25 thm 29 Age 30 thm 34 Age 35 thm 39 Age 40 thru 44 Age 45 thm 49 Age 50 thru 54 Age 55 thm 59 Age 60 thm 64 Age 65 thru 84 Age 85 & Older

Pottawatomie County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thm 19 Age 20 thru 24 Age 25 thm 29 Age 30 thm 34 Age 35 thru 39 Age 40 thm 44 Age 45 thm 49 Age 50 thru 54 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-20092010201192013201J2015201620172018 Pottawatomie County (cont'd) Age 55 thru 59 1,350' 1,419 1,492 1,569 1,646 1,726 1,807 1,888 1,973 2,062 Age 60 thru 64 840 855 869 882 896 904 914 925 93 6 946 Age 65 thru 84 2,043 2,032 2,022 2,007 1,993 1,978 1,961 1,941 1,921 1,900 Age 85 & Older 416 418 420 424 426 428 429 430 43 0 430

Pratt County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thm 34 Age 35 thm 39 Age 40 thm 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Rawlins County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thm 19 Age 20 thm 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thm 44 Age 45 thm 49 Age 50 thm 54 Age 55 thm 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Reno County Total Population 63,855 63,915 63,948 63,953 63,950 63,916 63,850 63,795 63,750 63,732 Age 0 thru 4 3,946 3,928 3,906 3,878 3,848 3,817 3,786 3,754 3,721 3,688 Age 5 thru 9 3,681 3,631 3,581 3,535 3,484 3,431 3,373 3,315 3,259 3,203 Age 10 thm 14 3,575 3,484 3,390 3,298 3,209 3,118 3,029 2,943 2,858 2,775 Age 15 thm 19 4,200 4,131 4,058 3,989 3,918 3,847 3,777 3,710 3,640 3,571 Age 20 thru 24 4,703 4,791 4,867 4,913 4,962 5,004 5,040 5099 5158 5,215 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-20092010201120122013201J2015201620172018 Reno County (cont'd) Age 25 thru 29 4,325 4,380 4,451 4,537 4,626 4,711 4,783 4,828 4,878 4,933 Age 30 thru 34 3,278 3,229 3,180 3,128 3,072 3,010 2,948 2,883 2,820 2,761 Age 35 thru 39 3,218 3,085 2,955 2,830 2,713 2,605 2,503 2,397 2,293 2,194 Age 40 thru 44 4,467 4,404 4,333 4,255 4,181 4,105 4,027 3,959 3,888 3,817 Age 45 thru 49 5,121 5,163 5,194 5,225 5,250 5,262 5,276 5,297 5,315 5,333 Age 50 thru 54 5,330 5,498 5,660 5,805 5,960 6,122 6,286 6,453 6,623 6,795 Age 55 thru 59 4,486 4,649 4,821 5,002 5,171 5,345 5,522 5,698 5,880 6,070 Age 60 thru 64 3,093 3,127 3,163 3,202 3,241 3,273 3,295 3,317 3,340 3,364 Age 65 thru 84 8,448 8,389 8,320 8,247 8,165 8,078 7,983 7,889 7,794 7,700 Age 85 & Older 1,984 2,026 2,069 2,109 2,150 2,188 2,222 2,253 2,283 2,313

Republic County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thm 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Rice County Total Population AgeOthru4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Riley County Total Population Age 0 thru 4 Age 5 thm 9 Age 10 thru 14 Age 15 thru 19 A8e 20 thru 24 Age 25 thru 29 Age 30 thm 34 Age 35 thru 39 Age 40 thru 44 Age 45 thm 49 Age 50 thm 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Rooks County Total Population Age 0 th~4 Age 5 th~9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thm 29 Age 30 thm 34 Age 35 th~39 Age 40 thru 44 Age 45 thm 49 Age 50 thm 54 Age 55 thru 59 Age 60 thru 64 Age 65 thm 84 Age 85 & Older

Rush County Total Population Age 0 thru 4 Age 5 th~9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thm 54 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009 - 2010 2011 2012 2013 2014 2015 2016 2017 2018 Rush County (cont'd) Age 55 thru 59 252 259 266 275 282 288 295 300 304 309 Age 60 thru 64 157 153 149 145 141 137 132 128 123 119 Age 65 thru 84 592 5 73 553 534 515 495 476 457 437 418 Age 85 & Older 132 130 128 125 122 119 116 113 110 107

Russell County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thm 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thm 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thm 54 Age 55 thm 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Saline County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Scott County Total Population 4,397 4,344 4,287 4,228 4,168 4,099 4,032 3,960 3,886 3,814 Age 0 tbu 4 29 1 288 284 282 279 274 268 262 255 248 Age 5 thru 9 235 224 213 202 192 183 173 163 153 144 Age 10 thru 14 268 254 240 226 212 199 187 175 164 153 Age 15 thm 19 336 328 320 312 303 293 283 273 262 252 Age 20 thru 24 350 366 385 400 414 427 442 455 467 480 Appendix L (cont'd) Kansas Population Projections, by county, by Age Cohort for 2009 through 2020

Scott County (cont'd) Age 25 thru 29 Age 30 thm 34 Age 35 thm 39 Age 40 thm 44 Age 45 thm 49 Age 50 thm 54 Age 55 thru 59 Age 60 thm 64 Age 65 thru 84 Age 85 & Older

Sedgwick County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thm 14 Age 15 thru 19 Age 20 thru 24 Age 25 thm 29 Age 30 thm 34 Age 35 thru 39 Age 40 thru 44 Age 45 thm 49 Age 50 thm 54 Age 55 thm 59 Age 60 thm 64 Age 65 thm 84 Age 85 & Older

Seward County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thm 14 Age 15 thm 19 Age 20 thru 24 Age 25 thm 29 Age 30 thm 34 Age 35 thru 39 Age 40 thm 44 Age 45 thm 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thm 84 Age 85 & Older Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Shalvnee County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Sheridan County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Sherman County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009 -2010 2011 2012 201s 2014 2015 2016 2017 2018 Sherman County (cont'd) Age 55 thru 59 398 403 408 414 419 425 43 1 43 5 438 442 Age 60 thru 64 359 363 3 67 370 373 372 3 72 373 373 3 74 Age 65 thru 84 92 1 912 903 892 881 867 853 838 823 809 Age 85 & Older 236 244 254 262 271 279 285 291 296 303

Smith County Total Population Age 0 thru 4 Age 5 thm 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thm 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Stafford County Total Population Age 0 thm 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thm 29 Age 30 thm 34 Age 35 thru 39 Age 40 thru 44 Age 45 thm 49 Age 50 thm 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Stanton County Total Population 2,216 2,205 2,193 2,179 2,160 2,146 2,127 2,109 2,091 2,067 AgeOthru4 159 156 153 150 146 142 139 136 132 128 Age5thru9 149 144 139 135 130 125 120 116 11 1 106 Age 10 thru 14 161 156 151 147 142 136 130 126 121 116 Age 15 thru 19 160 157 154 150 146 144 141 138 134 131

Age 20 thru 24 125 123 121 119 . 116 114 111 108 106 103 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009201020112012201320142015i20172018 Stanton County (cont'd) Age 25 thru 29 112 109 106 103 100 96 92 89 86 82 Age 30 thru 34 120 116 113 109 105 102 98 94 90 86 Age 35 thru 39 135 130 125 119 115 110 105 100 96 9 1 Age 40 thru 44 196 197 198 197 198 199 198 198 198 197 Age 45 thm 49 180 181 182 184 183 183 183 183 182 181 Age 50 thm 54 190 203 216 229 242 258 271 284 299 313 Age 55 thru 59 89 88 87 87 85 83 8 1 79 78 76 Age 60 thm 64 85 84 82 8 1 79 79 78 77 75 73 Age 65 thru 84 Age 85 & Older

Stevens County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thm 19 Age 20 thru 24 Age 25 thru 29 Age 30 thm 34 Age 35 thru 39 Age 40 thm 44 Age 45 thm 49 Age 50 thru 54 Age 55 thm 59 Age 60 thru 64 Age 65 thm 84 Age 85 & Older

Sumner County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thm 14 Age 15 thru 19 Age 20 thm 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thm 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Thomas County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 tllru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Trego County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thm 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thm 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thm 84 Age 85 & Older

Wabaunsee County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 Age 30 thru 34 Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-----2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2013 2020 Wabaunsee County (cont'd) Age 55 thm 59 506 5 14 519 519 522 525 529 528 524 519 512 506 Age 60 thru 64 372 3 72 371 366 359 352 346 339 330 320 310 301 Age 65 thru 84 866 860 855 860 861 856 853 852 85 1 850 849 847 Age 85 & Older 178 182 187 195 202 208 214 220 226 232 239 245

Wallace County Total Population Age 0 thru 4 Age 5 thm 9 Age 10 thru 14 Age 15 thru I9 Age 20 thru 24 Age 25 thru 29 Age 30 thm 34 Age 35 thru 39 Age 40 thm 44 Age 45 thm 49 Age 50 thru 54 Age 55 thm 59 Age 60 thm 64 Age 65 thm 84 Age 85 & Older

Washington County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thm 24 Age 25 thm 29 Age 30 thm 34 Age 35 thm 39 Age 40 thm 44 Age 45 thru 49 Age 50 thru 54 Age 55 thm 59 Age 60 thru 64 Age 65 thm 84 Age 85 & Older

Wichita County Total Population 2,188 2,148 2,107 2,069 2,029 1,992 1,956 1,918 1,875 1,839 1,797 1,761 Age 0 thru 4 125 118 111 105 99 94 88 83 78 73 68 64 Age 5 thm 9 168 164 159 155 150 145 141 136 131 127 122 117 Age 10 thru 14 155 151 147 143 138 133 127 122 117 113 108 103 Age 15 thm 19 126 120 114 109 103 98 94 89 84 80 75 71 Age 20 thru 24 131 129 128 127 126 126 127 126 124 123 121 119 Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

-2009 Wichita County (cont'd) Age 25 thru 29 89 Age 30 thm 34 109 Age 35 thm 39 128 Age 40 thm 44 130 Age 45 thm 49 192 Age 50 thm 54 219 Age 55 thm 59 140 Age 60 thm 64 115 Age 65 thm 84 292 Age 85 & Older 69

Wilson County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thm 14 Age 15 thm 19 Age 20 thru 24 Age 25 thm 29 Age 30 thru 34 Age 35 thm 39 Age 40 thru 44 Age 45 thm 49 Age 50 thm 54 Age 55 thm 59 Age 60 thm 64 Age 65 thm 84 Age 85 & Older

Woodson County Total Population Age 0 thru 4 Age 5 th~9 Age io thm 14 Age 15 thru 19 Age 20 thm 24 Age 25 thm 29 Age 30 thm 34 Age 35 thru 39 Age 40 thm 44 Age 45 thm 49 Age 50 thm 54 Age 55 thm 59 Age 60 thru 64 Age 65 thm 84 Age 85 & Older Appendix L (cont'd) Kansas Population Projections, by County, by Age Cohort for 2009 through 2020

Wyandotte County Total Population Age 0 thru 4 Age 5 thru 9 Age 10 thru 14 Age 15 thru 19 Age 20 thru 24 Age 25 thru 29 I Age 30 thru 34 I Age 35 thru 39 Age 40 thru 44 Age 45 thru 49 Age 50 thru 54 Age 55 thru 59 Age 60 thru 64 Age 65 thru 84 Age 85 & Older

Source: Moody's Economy.com APPENDIX C

DEBT SERVICE REQUIREMENTS

The following table presents the annual Debt Service Requirements, including principal and interest, for the Series 2009C Bonds:

Fiscal Year Ending Debt Service June 30, Principal Interest Requirement (THIS PAGE LEFT BCANK INTENTIONALLY) APPENDIX D

SUMMARY OF PRINCIPAL FINANCING DOCUMENTS

The following are summaries of certain provisions of the Pledge Agreement and the Bond Resolution, as well as definitions of certain terms used therein and in this OfJicial Statement. The summaries do not purport to be complete, and reference is made to the full text of the Pledge Agreement or the Bond Resolution, respectively, for a complete recital of their terms, as well as a complete recital of the defined terms used therein.

DEFINITIONS

In addition to the words and terms defined elsewhere in this OEcial Statement, the following are definitions of certain words and terms as used in the Pledge Agreement and the Bond Resolution:

"Act" means the Constitution and Statutes of the State of Kansas, including K.S.A. 74-8901 et seq. and the PEI Act, all as may be amended and supplemented.

"Additional Bonds" means any Bonds in addition to the Series 2008A Bonds and the Series 2009C Bonds issued pursuant to the Bond Resolution.

"Annual Budget" means the budget required by the Pledge Agreement.

"Architect" means an architect or engineer or firm of architects or engineers selected to perform the functions required by the Bond Resolution or the Pledge Agreement, which architect or engineer or firm of architects or engineers shall have been selected in accordance with State requirements.

"Authority" means the Kansas Development Finance Authority, an instrumentality of the State organized and existing under the laws of the State.

"Authority Swap Payments" shall mean any payment required to be made by or on behalf of the Authority to a Swap Provider pursuant to a Qualified Swap Agreement, excluding Termination Payments.

"Authorized Board Representative" means the Board Chairperson or President and Executive Officer or such other person at the time designated to act on behalf of the Board.

"Beneficial Owner" of the Bonds includes any Owner of the Bonds and any other Person who directly or indirectly has the investment power with respect to such Bonds.

"Board" means the Board of Regents of the State of Kansas, as provided for in Article 6 of the Constitution and in the statutes of the State, or, if said Board shall be abolished, the board, body, commission or authority succeeding to the principal functions thereof or to whom the powers given under K.S.A. 74-3201 et seq., or K.S.A. 76-6a12 to 76-6a25, inclusive, to the Board shall be given by law.

"Board Chairperson" means the duly elected and acting Chairperson of the Board or, in the Chairperson's absence, the duly appointed and/or elected Vice Chairperson or Acting Chairperson of the Board.

"Bond, Bonds or Series of Bonds" means any Series 2008A Bonds, Series 2009C Bonds and any Additional Bonds authorized and delivered under the Bond Resolution or a Supplemental Bond Resolution. "Bond Counsel" means the firm of Gilmore & Bell, P.C. or any other attorney or firm of attorneys whose expertise in matters relating to the issuance of obligations by states and their political s~~bdivisionsis nationally recognized and acceptable to the Authority and the Board.

"Bond Fund" means (i) the Bond Fund for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2008A, and (ii) the Bond Fund for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2009C, authorized and established in the Bond Resolution.

"Bond Insurance Policy" means, with respect to Additional Bonds, the bond insurance policy issued by the Bond Insurer on the date of delivery of any Series of Additional Bonds insuring the payment when due of the principal of and interest on such Series of Additional Bonds as provided therein. There is no Bond Insurance Policy with respect to the Series 2008A Bonds or the Series 2009C Bonds.

"Bond Insurer" means, with respect to any Additional Bonds, the entity set forth in the Supplemental I Bond Resolution authorizing such Additional Bonds. "Bond Purchase Agreement" means, with respect to any Series of Bonds, the document between the Authority and the Original Purchaser that sets forth the terms and details of the purchase of such Series of Bonds.

"Bond Registrar" means: (a) with respect to the Series 2008A Bonds, the State Treasurer; and (b) with respect to any Additional Bonds, the Bond Registrar designated in the Supplemental Bond Resolution authorizing such Additional Bonds, and any successors and assigns.

"Bond Resolution" means jointly, Bond Resolution No. 244, as supplemented by Supplemental Bond Resolution No. 244-A, as amended and supplemented, and any Supplemental Bond Resolutions adopted in accordance with the provisions of the Bond Resolution.

"Business Day" means a day which is not a Saturday, Sunday or any day designated as a holiday by the Congress of the United States or by the Legislature of the State and on which banks in the State are not authorized to be closed.

"CEDE & Co." means CEDE & Co., the nominee of DTC, and any successor nominee of DTC with respect to the Bonds.

"Closing Date" means the date of delivery of and payment for any Series of Bonds.

"Code" means the Internal Revenue Code of 1986, as amended, including, when appropriate, the statutory predecessor of the Code, and all applicable regulations (whether proposed, temporary or final) under the Code and the statutory predecessor of the Code, and any successor provisions to the provisions of the Code and those regulations and any official rulings, announcements, notices, procedures and judicial determinations under the foregoing applicable to the Bonds.

"Completion Date" means the date of completion of any of the Projects as shall be certified as provided in the Bond Resolution.

"Construction Contracts" means the construction contracts described in the Pledge ~greement.

"Consultant" means an independent individual consultant or certified public accountant or firm of consultants or certified public accountants selected by the Board and acceptable to the Authority, qualified and having a favorable reputation for skill and experience in financial affairs, selected in accordance with State requirements.

"Costs of Issuance" means any and all expenses of whatever nature incurred in connection with the issuance and sale of any Series of Bonds, including but not limited to bond and other printing expenses, administrative fees, fees of the Bond Registrar and Paying Agent, legal fees and expenses of Bond Counsel and other legal counsel and any expenses incurred in connection with determining yield on any Series of Bonds, or investment of the proceeds of any Series of Bonds.

"Costs of Issuance Account" means the Costs of Issuance Account for Kansas ~evelo~mkntFinance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2009C, authorized and established in the Bond Resolution.

"Dated Date" means, with respect to the Series 2009C Bonds, the date of issuance thereof.

"Debt Service Requirements" means, for the period of time for which calculated, the aggregate principal payments (whether at maturity, or upon mandatory sinking fund redemption, mandatory prepayment or otherwise) and interest payments required to be made during such period on Outstanding Indebtedness, plus, if the Authority determines that a Qualified Swap Agreement is being entered into for the purpose of providing substitute interest payments for a Series of Bonds, Authority Swap Payments, less Swap Provider Payments (excluding Termination Payments made by a Swap Provider); provided that:

(a) the amount of such payments for any future period shall be calculated in accordance with the assumptions contajned in the Bond Resolution;

(b) such payments shall be excluded from Debt Service Requirements to the extent that such payments were paid or are payable from Escrowed Deposits deposited in trust, escrowed or otherwise set aside for such payment or are payable fiom the proceeds of Refunding Bonds (e.g., accrued and capitalized interest); and

(c) (1) Debt Service Requirements required to be made pursuant to a Qualified Swap Agreement shall be based upon the actual amount required to be paid by the Authority, if any, to the Swap Provider. In determining that amount, any payments required to be made by either party pursuant to the Qualified Swap Agreement at a variable interest rate shall be computed, in determining the obligation of the Authority under the Qualified Swap Agreement, using the procedures set forth in the Bond Resolution; and

(2) Termination Payments payable by the Authority shall be considered as part of Debt Service Requirements on the date of computation only if those Termination Payments have become due and remain unpaid at the time of computation in accordance with the terms of the applicable Qualified Swap Agreement.

"Defaulted Interest" means interest on any Bond which is payable but not paid on the appropriate Interest Payment Date when an Event of Default has occurred.

"Defeasance Obligations" means:

(a) cash; or (b) Investment Obligations described in Sectio12s (a) and @ of the definition thereof, which are not subject to redemption in advance of their maturity, except at the option of the holder thereof; or

(c) Investment Obligations described in Sectio?ts @(I), Q)(2) and @(3) of the definition thereof, which are not subject to redemption in advance of their maturity, except at the option of the holder thereof, and which, under guidelines effective at the time of determination, are permitted to be included in an escrow that is rated in the highest category by any Rating Agency.

"Disclosure Undertaking" means the Continuing Disclosure Undertaking of the Authority and the Board, as may be amended Erom time to time, to be delivered as of the Closing Date of any Series of Bonds, relating to certain matters within the scope of the SEC Rule, in accordance with its terms.

"Document Date" means, with respect to the Series 2009C Bonds, March 15,2009.

"DTC" means the Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York, and its successors and assigns, including any successor securities depository duly appointed.

"DTC Representation Letter1' means the Letter of Representation or Blanket Letter of Representation from the Authority and the. Paying Agent to DTC, which provides for a book-entry system for the Bonds, or any agreement between the Authority and Paying Agent and a successor securities depository duly appointed.

"Escrowed Deposits" means Defeasance Obligations (including, where appropriate, the earnings or other increment to accrue thereon) that are irrevocably deposited in trust or in escrow with the Paying Agent or a third party escrow agent and are required to be applied to pay all or a portion of the principal of, redemption premium, if any, and interest on, as the same shall become due, the Bonds which would otherwise be -considered Outstanding and provided that such amounts so required to be applied are sufficient to pay such principal, redemption premium, if any, and interest on the Bonds.

"Event of Default" with respect to the Bond Resolution means one of the following events:

(a) Default by the Authority in the due and punctual payment of any interest on any Bond;

(b) Default by the Authority in the due and punctual payment of the principal of or redemption premium, if any, on any Bond;

(c) Default in the performance or observance of any other of the covenants, agreements or conditions on the part of the Authority in the Bond Resolution (other than covenants with respect to continuing disclosure in order to comply with the SEC Rule) or in the Bonds contained, and the continuance thereof for a period of 30 days after written notice thereof shall have been given to the Authority by (1) the Board or (2) the Owners of not less than 25% in aggregate principal amount of Bonds then Outstanding; provided, however, if any default shall be such that it cannot be corrected within such 30-day period, it shall not constitute an Event of Default if corrective action is initiated by the Authority within such period and diligently pursued until such default is corrected; or

(d) An Event of Default, as defined in the Pledge Agreement, by the Board has occurred. "Event of Default" with respect to the Pledge Agreement means one of the following events:

(a) the transfers described under the headings "SUMMARY OF THE PLEDGE AGREEMENT - Revenue Fund," "--Application of Moneys in Funds and Accounts" and "--Deficiency of Payments into Funds and Account" shall not be made as required; or

(b) the Board shall for any reason be rendered incapable of fulfilling its obligations thereunder; or

(c) failure of the Board to observe or perform any of the other coyenants, conditions or provisions of the Pledge Agreement (other than the covenants relating to continuing disclosure in order to comply with the SEC Rule) or to make any other payment required to be made under the Pledge Agreement and failure to remedy such default after written notice thereof from the Authority to the Board; provided that if such default is correctable, it shall not constitute an Event of Default if corrective action is promptly instituted by the Board and diligently pursued until the default is corrected, provided that such default is remedied in not more than 180 days, unless an extension is approved by the Authority, which approval shall not be unreasonably withheld; or

(dj any representation or warranty made by the Board in the Pledge Agreement or any other Transaction Document or in any statement or certificate furnished by the Board to the Authority or the Original Purchaser of any Bonds in connection with the sale of any Bonds, or furnished by the Board pursuant thereto, which proves untrue in any material respect as of the date of the issuance or making thereof and shall not be made good within 180 days after written notice thereof to the Board by the Authority; or

(ej admission by the State or the Board of insolvency or bankruptcy or its inability or failure to pay its debts secured by the Pledged Revenues as they become due, or the State or the Board makes an assignment for the benefit of creditors or applies for or consents to the appointment of a trustee, custodian or receiver for the State or the Board of the Pledged Revenues; or

(g) appointment by a court of competent jurisdiction of a trustee, custodian or receiver for the State or the Board and failure to obtain discharge of such within 60 days after such appointment; or

(hj institution of bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, proceedings under Title 11 of the United States Code, as amended, or other proceedings for relief under any bankruptcy law or similar law for the relief of debtors by or against the State or the Board relating to the Pledged Revenues (other than bankruptcy proceedings instituted by the State or the Board against third parties), and, if instituted against the State or the Board, allowance against the State or the Board or the State or the Board consents to such proceedings or fails to obtain dismissal, stay or other nullification within 60 days after such institution.

"Executive Officer" shall mean the President and Chief Executive Officer of the Board or, in such person's absence, the duly appointed acting or interim President and Chief Executive Officer of the Board.

"Federal Tax Certificate" means the Federal Tax Certificate of the Authority and the Board to be delivered on the Closing Date of any series of the Bonds, relating to certain matters within the scope of Section 148 of the Code, as the same may be amended or supplemented in accordance with its terms.

"Fiscal Year" means the period commencing on July 1 of any year and ending on June 30 of the following year, and numbered for the year in which it ends.

"Pitch" means Fitch Ratings, a corporation organized and existing under the laws of the State of New York, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Fitch" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Authority with notice to the Board. "Funds and Accounts" means any of the Funds and Accounts authorized and established or referred to in the Bond Resolution or authorized and established by any Supplemental Bond Resolution.

"Government Obligations" means obligations of, or obligations guaranteed as to principal and interest by, the United States of America or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the United States of America. These include, but are not limited to obligations issued by:

(a) United States Treasury All direct or fully guaranteed obligations (including obligations issued or held in a book-entry form on the books of the U.S. Treasury Department)

(b) Rural Economic Community Development Administration (formerly the Farmers Home Administration) Certificates of beneficial ownership

(c) General Services Administration Participation certificates

(d) United States Maritime Administration Guaranteed Title XI financing

(e) Small Business Administration Guaranteed participation certificates Guaranteed pool certificates

(f) Government National Mortgage Association (GNMA) GNMA - guaranteed mortgage-backed securities GNMA - guaranteed participation certificates

(g) United States Department of Housing & Urban Development Local authority bonds

(h) Federal Housing Administration Debentures

(i) Federal Financing Bank

(j) Export-Import Bank Farm Credit System Financial Assistance Corporation (consolidated system wide bonds and notes)

"Governmental Agency" means an agency, off~ce,bureau, department or branch of the United States of America, the State or any political subdivision of the State.

"Institutions1'means the postsecondary educational institutions defined in the PEI Act.

"Interest Payment Dates" means March 1 and September 1 of each year, commencing: (a) with respect to the Series 2009C Bonds, on September 1,2009; and (b) with respect to any Additional Bonds, the date specified in the Supplemental Bond Resolution authorizing such series of Bonds. "Investment Obligations" means,

(a) Government Obligations;

(b) Obligations of government-sponsored agencies that are not backed by the full faith and credit of the U.S. government including, but not limited to:

(1) Federal Home Loan Mortgage Corp. (FHLMC) Senior debt obligations (rated "Aaa" by Moody's and "AAA" by S&P)

(2) Federal National Mortgage Association (FNMA) Senior debt obligations (rated "Aaa" by Moody's and "AAA" by S&P)

(3) Federal Home Loan Banks (FHL Banks) Senior debt obligations

(4) Resolution Funding Corp. (REFCORP) Debt obligations;

(c) Federal funds, unsecured certificates of deposit, time deposits, and banker's acceptances (having maturities of not more than 360 days after date of Purchase) of any domestic commercial bank, the short-term obligations of which are rated "A-l+" by S&P and "P-1" by Moody's;

(d) Deposits that are fully insured by the Federal Deposit Insurance Corp. (FDIC), including Bank Insurance Fund (BIF) and Savings Association Insurance Fund (SAIF) or collateralized by Government Obligations;

(e) State or municipal debt obligations rated "MA" by S&P and "Aaa" by Moody's (excluded are securities that do not have a fixed par value andlor whose terms do not promise a fixed dollar amount at maturity or call date);

(f) Pre-refunded municipal obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice, and which are rated based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of S&P and Moody's or any successors thereto;

(g) Commercial paper rated "A- l+" by S&P and "P- 1" by Moody's, maturing in not more than 270 days after the date of purchase;

(h) Investment in money market funds rated "MAm" or "AAAm-G by S&P;

(i) Repurchase agreements:

(1) with a term of not more than 365 days with any transferor which has an unsecured, uninsured and unguaranteed short-term obligation rating not lower

D-7 than "A-1-t" by S&P and "P-1" by Moody's, or guaranteed by a parent corporation or holding company of the transferor with an uninsured, unsecured and unguaranteed short-term obligation rating meeting such requirements; or

(2) with a term of greater than 365 days with any transferor which has an unsecured, uninsured and unguaranteed short-term obligation rating not lower than "AAA" by S&P and not lower than "Aaa" by Moody's, or guaranteed by a parent corporation or holding company of the transferor with an uninsured, unsecured and unguaranteed short-term obligation rating meeting such requirements; provided such ratings may be not lower than "AA"by S&P and not lower than "Aa2" by Moody's if:

(A) interest is paid at least semiannually at a fixed rate during the entire term of the agreement;

(B) moneys invested thereunder may be withdrawn without any penalty, premium, or charge upon not more than two days1 notice as provided in the agreement (provided such notice may be amended or cancelled at any time prior to the withdrawal date);

(C) the agreement is not subordinated to any other obligations of the transferor; and

(D) the Authority receives an opinion of counsel that such agreement is an enforceable obligation of the transferor;

(j) Stripped securities:

(1) United States Treasury STRIPS,

(2) REFCORP STRIPS (stripped by the Federal Reserve Bank of New York),

(3) Financing Corp. (FICO) STRIPS (stripped by the Federal Reserve Bank of New York which have CUSIP prefixes 317705,3 1771J, and 3177110 and

(4) Any stripped securities assessed or rated "AAA" by S&P and "Aaa" by Moody's;

(k) Investments in the Municipal Investment Pool Fund pursuant to K.S.A. 12-1677a;

(1) Investment agreements with a financial institution or entity, government securities dealer, insurance company, financial corporation or similar organization (jointly, a "Provider"), which has an unsecured, uninsured and unguaranteed obligation (or claims-paying ability) rated not lower than "AA" by S&P and not lower than "Aa2" by Moody's, or guaranteed by a parent corporation or holding company of the Provider with an uninsured, unsecured and unguaranteed obligation meeting such rating requirements provided:

(1) interest is paid at least semiannually at a fixed rate during the entire term of the agreement; (2) moneys invested thereunder may be withdrawn without any penalty, premium, or charge upon not more than two days' notice as provided in the investment agreement (provided such notice may be amended or cancelled at any time prior to the withdrawal date);

(3) in the event the rating of the Provider or guarantor falls below the requirements set forth in subsection (1) above, the Authority shall have the option to terminate the agreement without penalty on not more than 30 days written notice, unless: (A) the Provider transfers the agreement to a substitute Provider or guarantor that meets the rating requirements of subsection (1) above; or (B) the Provider takes such other remedial actions as are specified in such agreement;

(4) the agreement is not subordinated to any other obligations of the Provider; and

(5) the Authority receives an opinion of counsel that such agreement is an enforceable obligation of the Provider;

(m) Any other forms of investments approved in writing by the issuer of any Credit Enhancements with respect to a particular Series; and

(n) Any other investments authorized by State law that will not adversely affect the then current ratings on the Bonds by S&P and Moody's, if any.

~ "Legislature" means the Legislature of the State created in Article 2 of the Kansas Constitution. I "Loan Agreements" means the loan agreements between the Board and the Institutions entered into pursuant to the PEI Act to fund Projects.

"Maximum Interest Rate" shall mean, with respect to any particular Bonds that provide for Variable Rate Indebtedness, a numerical rate of interest, which shall be set forth in the Supplemental Bond Resolution authorizing such Bonds, that shall be the maximum rate of interest that such Variable Rate Indebtedness Bonds may at any time bear. I "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Authority with notice to the Board.

"Notice Address1'means, with respect to any party, the name or title set forth in the defintion thereof in the Bond Resolution.

"Notice Representative" means, with respect to any party, the name or title set forth in the definition I thereof in the Bond Resolution. "Original Purchaser1'means (a) with respect to the Series 2008A Bonds, a syndicate managed by Stern Brothers & Co.; (b) with respect to the Series 2009C Bonds, Morgan Stanley & Co. Incorporated, I George K. Baum & Company and Piper Jaffiay & Co.; and (c) with respect to any Additional Bonds the initial purchaser thereof described in the Supplemental Bond Resolution authorizing such Additional Bonds. "Outstanding" means, when used with reference to Bonds, as of a particular date, all Bonds theretofore authenticated and delivered, except:

(a) Bonds theretofore cancelled by the Paying Agent or delivered to the Paying Agent for cancellation pursuant to the Bond Resolution;

(b) Bonds for the payment or redemption of which moneys or investments have been deposited with the Paying Agent in accordance with the provisions of the Bond Resolution;

(c) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered pursuant to the Bond Resolution;

(d) for purposes of any consent or other action to be taken by the Owners of a specified percentage of Bonds under the Bond Resolution or the Pledge Agreement, Bonds owned or held by or for the account of the Authority, the Board or any Person controlling, controlled by or under common control with either of them;

(e) Bonds for which Defeasance Obligations have been deposited in accordance with the Bond Resolution; and

(f) Bonds, the principal or interest of which has been paid by the Bond Insurer.

"Owner" means the registered owner of any Bond as shown on the bond register maintained by the Bond Registrar.

"Participant" means brokers, dealers, banks and other financial institutions and other Persons for whom from time to time DTC effects book-entry transfers and pledges of securities deposited with DTC.

"Paying Agent" means: (a) with respect to the Series 2008A Bonds and the Series 2009C Bonds, the State Treasurer; and (b) with respect to any Additional Bonds, the Paying Agent designated in the Supplemental Bond Resolution authorizing such Additional Bonds, and any successors and assigns.

"Payment Date" means each Principal Payment Date and each Interest Payment Date.

"PEI Act" means the Postsecondary Educational Institution Infrastructure Finance Program, K.S.A. 76-7,116 et seq., as amended.

"Person" means any natural person, firm, association, corporation, partnership, joint stock company, a joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body.

"Pledge Agreement" means the Pledge of Revenues Agreement dated as of March 15, 2008, as supplemented by the First ~u~~lementalPledge of Revenues Agreement dated as of the Document Date, between the Board and Authority, and any amendments or supplements thereto.

"Pledged Revenues1' means funds appropriated by the Legislature for the payment of Debt Service Requirements and related fees and expenses, directly to or through the Board, payments by the Institutions to the Board pursuant to the Loan Agreements and pledged by the Board to the Authority pursuant to the Pledge Agreement, and any other funds legally available and designated for the payment of Debt Service "Pooled Money Investment Board" means the pooled money investment board of the State of Kansas established pursuant to K.S.A. 75-4221a.

"Principal and Interest Account" means, (i) the Principal and Interest Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2008A, and (ii) the Principal and Interest Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2009C, authorized and established in the Bond Resolution.

"Principal Payment Date" means March 1 of each year, including each March 1, on which principal shall have been called for mandatory sinking fund payment, commencing: (a) with respect to the Series 2008A Bonds, March 1, 2009, (b) with respect to the Series 2009C Bonds, March 1, 2010, and (c) with respect to any Additional Bonds, the date specified in the Supplemental Bond Resolution authorizing such series of Bonds.

"Project(s)" means an infrastructure improvement project at any Institution as defined in the PEI Act and approved by the Board.

"Project Account" means (i) the Project Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2008A, and (ii) the Project Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2009C, authorized and established in the Bond Resolution.

"Project Costs" means costs permitted under the Act and the PEI Act (and the Code, if applicable) to be paid out of proceeds of Bonds or other available funds with respect to the Projects, including the total of all reasonable or necessary expenses incidental to the acquisition, construction, reconstruction, repair, alteration, equipping, improvement and extension of the Projects, including without limitation: land acquisition, the expenses of studies and surveys, land title and mortgage title policies, architectural and engineering services and the cost of legal, organization or marketing services; financial and underwriting fees and expenses; the cost of acquiring or demolishing existing structures, developing the site of and constructing and equipping a new building and related parking facilities; constituting a part of the Projects; rehabilitating, reconstructing, repairing or remodeling existing buildings and related parking facilities, including removal of any hazardous materials, constituting a part of the Projects; and all other necessary and incidental expenses, including interest during construction on Bonds issued to finance the Projects to a date not greater than six months subsequent to the estimated date of completion thereof, and any other costs permitted by the Act or the PEI Act.

"Project Documents" means the documents relating to the Projects described in the Pledge Agreement.

"Property" means, when used in connection with a particular Person, means any and all rights, title and interests of such Person in and to any and all property whether real or personal, tangible or intangible, and wherever situated, and whether now owned, leased or thereafter acquired.

"Qualified Financial Institution" means a bank, trust company, national banking association, insurance company or other financial services company or entity, whose unsecured long term debt obligations (in the case of a bank, trust company, national banking association or other financial services company or entity) or whose claims paying abilities (in the case of an insurance company) are rated in any of the two highest rating categories by one Rating Agency.

"Qualified Swap Agreement" shall mean an interest rate exchange, hedge or similar agreement (including schedule and credit support annex, if any) entered into by the Authority and a Swap Provider, expressly identified in a certificate of the Authority as having been entered into in order to hedge the interest rate payable on all or any portion of any Outstanding Bonds or any Bonds expected to be issued, which agreement may include, without limitation, an interest rate swap, a forward or futures contract or an option (e.g., a call, put ,cap, floor or collar).

I "Rating Agency" means Moody's, S&P, Fitch and any other company, agency or entity that provides ratings for the Bonds.

"Rating Category" shall mean a generic securities rating category assigned by a Rating Agency, I without regard, in the case of a long-term rating category, to any refinement or gradation of such long-term rating category by a numerical modifier or otherwise.

"Rebate Account" means: (a) with respect to the Series 2008A Bonds the Rebate Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2008A, authorized and established in the Bond Resolution; (b) with respect to the Series 2009C Bonds the Rebate Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2009C, authorized and established in the Bond Resolution; and (c) with respect to any Additional Bonds, any rebate fund established in the Supplemental Bond Resolution authorizing such Additional Bonds.

"Record Dates" means the 15th day (whether or not a Business Day) of the calendar month next preceding the month in which an interest payment on any Bond is to be made.

"Refunding Bonds" means any Bonds issued pursuant to the Bond Resolution to refhnd any Bonds.

"Revenue Fund" means the Revenue Fund for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), authorized and established in the Bond Resolution.

"Revenues" means the Pledged Revenues, together with investment earnings thereon.

"SEC Rule" means Rule 15c2-12 of the Securities and Exchange Commission, an agency of the United States Government.

"Secretary of Administration" means the Secretary of Administration of the State.

"Series 2008A Bonds" means the Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2008A, dated the date of delivery thereof, in the original aggregate principal amount of $20,000,000.

"Series 2009C Bonds" means the Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2009C, dated the date of delivery thereof, in the original aggregate principal amount of $20,000,000.

"S&Pflmeans Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, S&P shall be deemed to refer to any other nationally recognized securities rating agency designated by the Authority with notice to the Board.

"Special Record Date" means the date fixed by the Authority pursuant to of the Bond Resolution for the payment of Defaulted Interest. "State" means the State of Kansas.

"State Treasurer" means the State Treasurer of the State of Kansas or, if the functions and duties of the State Treasurer under the Bond Resolution shall be given by law to any other person or entity, such person or entity.

l'Supplemental Bond Resolution" means any resolution supplemental or amendatory to the Bond Resolution adopted by the Authority pursuant to the Bond Resolution.

"Supplemental Pledge Agreement" means any agreement supplemental or amendatory to the Pledge Agreement executed by the Authority and the Board pursuant to the terms of the Pledge Agreement.

"Swap Provider" shall mean any counterparty with whom the Authority enters into a Qualified Swap Agreement whose senior long term debt obligations, or whose obligations under a Qualified Swap Agreement are guaranteed by a party whose senior long term debt obligations, are rated (at the time of execution of the Qualified Swap Agreement) in one of the top two Rating Categories by a Rating Agency, and which is obligated to make Swap Provider Payments under a Qualified Swap Agreement.

"Swap Provider Payments" shall mean any payment (including Termination Payments) required to be made by or on behalf of a Swap Provider pursuant to a Qualified Swap Agreement.

"Term Bonds" means any Bonds designated as Term Bonds in the Bond Resolution or in any Supplemental Bond Resolution.

"Tax Exempt Permitted Investments" means (a) obligations (i) the interest on which is excluded from gross income of the owner thereof for federal income tax purposes under Section 103(a) of the Code and which is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations and (ii) that are assigned a rating in the two highest long term or the highest short term rating category by at least one of the Rating Agencies; (b) United States Treasury Certificates of Indebtedness -- State and Local Government Series; and (c) stock in a Qualified Regulated Investment Company that is assigned the highest long term or short term rating by at least one of the Rating Agencies.

"Termination Payments" shall mean the amount payable by the Authority or a swap Provider pursuant to a Qualified Swap Agreement for the early termination of the obligations, in whole or in part, of the parties to that Qualified Swap Agreement.

"Transaction Documents" means the Bond Resolution, the Bonds, the Pledge Agreement, this Official Statement, the Bond Purchase Agreement and any and all other documents or instruments that evidence or are a part of the transactions referred to in the Bond Resolution or in this Official Statement or contemplated by the Bond Resolution or by this Official Statement; and any and all future renewals and extensions or restatements of, or amendments or supplements to, any of the foregoing; provided, however, that when the words "Transaction Documents" are used in the context of the authorization, execution, delivery, approval or performance of Transaction Documents by a party to the Bond Resolution, the same shall mean only those Transaction Documents that provide for or contemplate authorization, execution, delivery, approval or performance by such party.

"Trust Estate" means:

(a) All right, title and interest of the Authority in, to and under the Pledge Agreement; provided that the pledge and assignment by the Bond Resolution made shall not impair or diminish the obligations of the Authority under the provisions of the Pledge Agreement; (b) All Revenues;

(c) All moneys and securities from time to time held under the terms of the Bond Resolution (excluding funds held in or accruing to the Rebate Account), including, without limitation, Bond proceeds and income from the temporary investment thereof and any and all other real or personal property of every kind and nature from time to time thereafter, by delivery or by writing of any kind, pledged, assigned or transferred as and for additional security for the Bonds by the Authority; and

(d) All right, title and interest of the Authority in, to and under any Qualified Swap Agreement.

"Value" as of any particular time of determination, means, (a) with respect to cash, the face value thereof; and (b) with respect to any Investment Obligations, the lower of the cost of the Investment Obligations or the market price of the Investment Obligations on the date of valuation. Market price of any Investment Obligation shall be determined as follows:

(a) As to investments the bid and asked prices of which are published on a regular basis in The Wall Street Jounral (or, if not there, then in Tlze New York Times), the average of the bid and asked prices for such investments so published on or most recently prior to such time of determination;

(b) As to investments the bid and asked prices of which are not published on a regular basis in The Wall Street Jozrrnal or The New York Times, the average bid price at such time of determination for such investments by any two nationally recognized government securities dealers (selected by the Trustee in its absolute discretion) at the time making a market in such investments or the bid price published by a nationally recognized pricing service;

(c) As to certificates of deposit and bankers acceptances, the face amount thereof, plus accrued interest; and

(d) As to any investment not specified above, the value thereof established by prior agreement between the Authority and the Bond Insurer.

"Variable Rate Indebtedness" means any Bonds which provide for interest to be payable thereon at a rate per annurn that may vary from time to time over the term thereof in accordance with procedures set forth in the Bond Resolution. The method of computing the variable interest rate with respect to a Series of Bonds shall be specified in a Supplemental Resolution relating to such Series of Bonds or the Qualified Swap Agreement, if applicable.

SUMMARY OF THE PLEDGE AGREEMENT

Pledge of Pledged Revenues

The Board pledges the Pledged Revenues and not any other fund or source, to the Authority, as security for the payment of the Debt Service Requirements on the Bonds and certain fees, expenses and deposits of the Authority relating to the Bonds as described in the Pledge Agreement and the Bond Resolution. The obligations of the Board under the Pledge Agreement (other than receipt of funds pursuant to the Loan Agreements) are subject to and dependent upon an appropriation of the Legislature being made to the Board or to the Revenue Fund, which may be lawfully utilized to pay for such obligation. By the pledge of the Pledged Revenues the Board acknowledges that the Authority intends to pledge its rights under the Pledge Agreement to the Owners of the Bonds. Administration of Funds and Accounts

The Funds and Accounts referred to in the Pledge Agreement shall be maintained and administered solely for the purposes and in the manner as provided in the Bo~dResolution and the Pledge Agreement. The Board approves such trarisfers into and out of such Funds and Accounts as are set forth in the Bond Resolution and the Pledge Agreement

Disposition of Bond Proceeds and Other Moneys

The proceeds of the Series 2008A Bonds, upon issuance and delivery thereof, shall be deposited and applied in the manner set forth in the Bond Resolution. The proceeds of Additional Bonds shall be deposited in accordance with the Supplemental Resolution(s) authorizing such Additional Bonds.

Application of Moneys in the Project Account

Moneys in the Project Account shall be used by the Board for the sole purpose of paying the Project Costs in accordance with the provisions of the PEI Act to those Institutions that have executed a Loan Agreement for such Project in accordance with the requirements of the PEI Act. The Board shall provide a copy of all Loan Agreements to the Authority within 30 days of the execution thereof.

The Board agrees to use its best efforts to cause the Projects to be completed with reasonable dispatch, and to require that the Institutions use their own funds to complete the Projects substantially in accordance with the Plans and Specifications if the proceeds of the Loan Agreements are not sufficient.

In the event the moneys on deposit in the Project Account, together with other Institution funds available to the Board, if any, for the Project Costs, are at any time insufficient to pay for the completion of any Project, the Board agrees to pay the amount of such deficiency, from Institution funds, forthwith for deposit in the Project Account, subject to appropriation by the Legislature of the State.

The Authority shall cause the Board to disburse moneys on deposit in the Project Account from time to time to pay or as reimbursement for payment made for, Project Costs, after receipt of documentation prepared and processed in accordance with procedures established by the State for payment of costs of State projects, for which payment is being requested.

In making such payments and determinations described above, the Authority and State Treasurer may rely upon such accompanying certificates and statements and shall not be required to make any independent investigation in connection therewith. The Board shall keep and maintain adequate records pertaining to the Project Account and all disbursements therefrom, and shall make available statements of activity regarding the Project Account to the Authority at the end of each Fiscal Year and within 90 days after the Completion Date.

The Authority shall require the Board to deliver within 90 days after the Completion Date of any Project the certificate of completion signed by the Authorized Institution Representative, as required by the applicable Loan Agreement.

If after receipt of the certificates of completion described above for all Projects financed by the Bonds, there shall remain any moneys in the Project Account, such moneys shall be deposited in accordance with the provisions of the Bond Resolution.

Any commitment of Institution funds necessary to complete any Project shall be subject to the Board attaining necessary State approval for expenditure of such funds. Project Documents

The Board shall make available to the Authority the following Project Documents as they are received from the Institutions pursuant to the Loan Agreements:

(a) Plans and Specifications. All available preliminary and final Plans and Specifications.

(b) Constrzlction Contracts. All architect's and general contractor's contracts for the Projects and all prime subcontractor's contracts and purchase orders deemed necessary by the Authority for any equipment included in the Project.

(c) Performance and Payment Bonds. Performance and payment bonds insuring the Board and the Authority as their respective interests may appear against all delays in completion of all Construction Contracts, against failure timely to complete the Project in accordance with the Plans and Specifications, and against claims for payment to cover labor and material used or reasonably required for use in the performance of the Construction Contracts.

The Board covenants and agrees to obtain and thereafter make available to the Authority all remaining Construction Contracts, purchase orders, approvals, licenses and permits required or necessary for the Project.

Changes or Amendments to Project Documents

The Board may authorize or permit the Institution to make such changes or amendments in the Project Documents as it may reasonably determine to be necessary or desirable; provided, however, that no such change or amendment shall be made to the Project Documents that would cause a material change in the cost, scope, nature, or function of the Project, unless the Board shall file with the Authority a certificate of the Authorized Board Representative to the effect that the Project will, after such change or amendment, continue to comply with the PEI Act, and such change or amendment will not result in the Project being used for any purpose prohibited by the Pledge Agreement or otherwise result in the Board failing to comply with any provisions of the Pledge Agreement, or materially adversely affect the Pledged Revenues, or violate or conflict with the terms of any applicable approvals of the State.

Enforcement of Contracts and Surety Bonds

In the event of a material default of any contractor or subcontractor under any Construction Contract or any other contract made in connection with the Project, or in the event of a material breach of warranty with respect to any materials, workmanship or performance, the Board will require the Institution, either separately or in conjunction with others, promptly to pursue diligently the remedies of the Institution against the contractor or subcontractor in default and against any surety on a bond securing the performance of such contract. Any amounts recovered by way of damages, refunds, adjustments or otherwise in connection with the foregoing, after deduction of expenses incurred in such recovery and after reimbursement to the Institution of any amounts theretofore paid by the Institution and not previously reimbursed to the Institution for correcting or remedying of the default which gave rise to the proceedings against the contractor, subcontractor or surety, shall be paid into the Project Account if received before the Completion Date, and otherwise shall be deposited and applied as provided in the Bond Resolution.

Annual Appropriation

The Board covenants and agrees that it shall, on or before September 15 of each year (or any earlier date requested by the State Director of Budget), submit a request to the State Director of Budget that the Legislature appropriate, and the Governor's budget request to the Legislature include a request to appropriate, from any source, moneys which will be deposited into the Revenue Fund or directly into the Principal and Interest Account at least seven (7) Business Days prior to each Payment Date, amounts sufficient to meet the scheduled Debt Service Requirements and related fees and expenses for the succeeding Fiscal Year and also provide for any required transfers from the Revenue Fund to the Principal and Interest Account as provided by the Bond Resolution. The Board shall promptly provide to the Authority written evidence or certification, of any request, or amendment or supplement thereto, submitted to the State Director of Budget.

Loan Agreements

The Board covenants and agrees that it shall enforce all of its rights and all of the obligations of the Board under the Loan Agreements to the extent necessary to protect the rights of the Authority thereunder with respect to the pledge and assignment of the Pledged Revenues and receipts coming due under the Loan Agreements.

Annual Budget

The Board covenants that on or before each date on which an appropriations request is required to be submitted by the Board pursuant to the Pledge Agreement, it shall adopt an annual budget of the Pledged Revenues, together with a schedule for Debt Service Requirements for such ensuing Fiscal Year, copies of which shall be filed with the State Director of the Budget and the Legislative Research Department of the State and shall be made available to the Authority. The Board may at any time adopt an amended or supplemental Annual Budget for the remainder of the then current Fiscal Year. The Annual Budget so amended or supplemented shall be treated as the Annual Budget under the provisions of this paragraph. Copies of any such amended or supplemental Annual Budget as adopted shall be filed with and furnished to the same entities as the original Annual Budget.

Revenue Fund

The Board covenants that all Pledged Revenues, when received by virtue of the Loan Agreements or appropriation by the Legislature, shall be deposited as received to the credit of the Revenue Fund and shall be accounted for separate and apart from all other funds of the Board, the Institution and the State. Money in the Revenue Fund shall be expended and used only in the manner and order specified in the Pledge Agreement and in the Bond Resolution. All money in the Revenue Fund shall be held in trust and applied as provided in the Pledge Agreement and in the Bond Resolution, and pending such application, shall be subject to a prior lien and charge in favor of the Owners of the Bonds and for the further security of such Owners until paid out or withdrawn as provided in the Pledge Agreement.

Application of Moneys in Funds and Accounts

The Board covenants that fiom and after the delivery of the Bonds and continuing so long as any of the Bonds shall remain Outstanding and unpaid, it will, or cause the depository thereof, to administer and allocate all of the moneys then held in the Revenue Fund to the credit of the Funds or Accounts in the order, amounts and in the manner established in the Bond Resolution.

Deficiency of Payments into Funds and Accounts

If at any time the moneys in the Principal and Interest Account are not sufficient to pay the principal of, redemption premium, if any, and interest on the Bonds as and when the same become due, then moneys in the Revenue Fund shall be used by the Authority and the Board to prevent any default in the payment of the principal of, redemption premium, if any, and interest on the Bonds in accordance with the Bond Resolution.

Deposits Constitute Trust Funds

All money deposited with the State Treasurer and any Paying Agent under the provisions of the Pledge Agreement and the Bond Resolution shall be trust funds under the terns thereof and shall not be subject to lien or attachment by a creditor. Such money shall be held in trust secured and applied in accordance with the provisions of the Pledge Agreement and the Bond Resolution. Investment of Money

Money held for the credit of the Funds and Accounts referred to in the Pledge Agreement shall be invested pursuant to the provisions of the Bond Resolution. I Tax Covenants The Board covenants and agrees that to the extent within its power and control, (1) it will comply with all applicable provisions of the Code, including 5 103 and 141 through 150, necessary to maintain the exclusion from gross income for federal income tax purposes of the interest on the Series 2008A Bonds and Series 2009C Bonds and (2) it will not use or permit the use of any proceeds of Series 2008A Bonds or Series 2009C Bonds or any other funds of the Authority nor take or permit any other action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from federal gross income of the interest on the Series 2008A Bonds and Series 2009C Bonds. In addition, the Board will take such other actions as may be necessary to comply with the Code and with all other applicable future laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Series 2008A Bonds and Series 2009C Bonds will remain excluded from federal gross income, to the extent any such actions can be taken by the Board.

The Board covenants and agrees that to the extent within its power and control, (1) it will comply with all requirements of Code 5 148 to the extent applicable to the Series 2008A Bonds and Series 2009C Bonds, (2) it will use the proceeds of the Series 2008A Bonds and Series 2009C Bonds as soon as practicable and with all reasonable dispatch for the purposes for which the Series 2008A Bonds are issued, and (3) it will not invest or directly or indirectly use or permit the use of any proceeds of the Series 2008A Bonds or Series 2009C Bonds or any other funds of the Authority or the Board in any manner, or take or omit to take any action, that would cause the Series 2008A Bonds o'r Series 2009C Bonds to be "arbitrage bonds" within the meaning of Code 5 148(a).

The Board covenants and agrees that to the extent within its power and control, it will not use any portion of the proceeds of the Series 2008A Bonds and Series 2009C Bonds, including any investment earnings on such proceeds, directly or indirectly, in a manner that would cause any Bond to be a "private activity bond" within the meaning of Code 5 141(a) of the Code.

The Board covenants and agrees that to the extent within its power and control, it will cause the Authority to pay or otherwise provide for the payment from time to time of all amounts required to be rebated to the United States pursuant to Code tj 148(f) and any Treasury Regulations applicable to the Series 2008A Bonds and Series 2009C Bonds from time to time.

Without limiting the generality of the foregoing, the Board shall cause to be paid to the Authority from time to time all amounts required to be rebated to the United States pursuant to Code 5 1480 and any temporary, proposed or final Treasury Regulations as may be applicable to the Bonds from time to time in accordance with the Arbitrage Instructions. This covenant shall survive payment in full or defeasance of the Bonds. The Authority specifically covenants to deposit such moneys into the Rebate Account and to administer the same in accordance with the Bond Resolution.

Covenants as to Liens

The Board covenants that it will not create or suffer to be created any lien, encumbrance or charge upon the Pledged Revenues, as pledged under the Pledge Agreement and the Bond Resolution except the pledge, lien and charge for the security of the Bonds.

Contract Impairments; Grant and Contract Applications

The Board covenants that no contract or contracts will be entered into or any action taken by which the Pledged Revenues shall be reduced below the amount required under the Pledge Agreement or by which the rights of the Authority under the Pledge Agreement or the rights of the Owners under the Bond Resolution or the Bonds might be impaired or diminished. The Board covenants that none of the Pledged Revenues will be used for any purpose other than as provided in the Pledge Agreement and the Bond Resolution, and no contract or contracts will be entered into or any action taken by it which shall be inconsistent with the provisions of the Pledge Agreement.

Compliance With Laws, Orders and Regulations

-The Board covenants and agrees to cause the Institution to conduct its affairs and cany on its business and operations in such manner as to comply with any and all applicable laws ofthe United States of America and the State and duly to observe and conform to all valid orders, regulations or requirements of any Governmental Agency applicable to the conduct of its business and operations; provided, nevertheless, that nothing contained in the Pledge Agreement shall require it to comply with, observe and conform to any such law, order, regulation or requirement of any Governmental Agency so long as the validity thereof shall be contested in good faith and such contest shall not impair the ability of the Board to generate Pledged Revenues.

Payment of Taxes, Charges and Assessments

The Board covenants and agrees to cause the Institutions to pay promptly all lawful taxes, governmental charges and assessments at any time levied or assessed and due upon or against the Projects; provided, however, that the Board or Institutions shall have the right to contest in good faith by appropriate proceedings any such taxes, charges or assessments or the collection of any such sums and pending such contest may delay or defer payment thereof, provided that the Board or the Institution shall have set aside on its books adequate reserves with respect to such contest and such contest shall not materially impair the ability of the Board to meet its obligations under the Pledge Agreement.

Records and Accounts

The Board covenants that it will keep or cause to be kept for each Fiscal Year accurate financial records and accounts, separate and apart from all other records and accounts, of the Pledged Revenues received and the application of such Pledged Revenues. Such records and accounts shall be open to the inspection of the Authority, the Original Purchaser and to the Owners of any Bonds then Outstanding and such Person's agents and representatives during the normal business hours for the office of the Controller of the Institution. The Board further covenants that, not later than six (6) months after the close of each Fiscal Year, it will make available to the Authority, upon request of the Authority, a financial report for such Fiscal Year, prepared in the format approved by the Board, reflecting in reasonable detail the financial condition and record of operation of the Projects, including a statement of the Pledged Revenues for such Fiscal Year and the status of the Funds and Accounts established pursuant to the Bond Resolution.

Title of Site

The Board covenants that the Projects are located on Property of the Institutions, or are being acquired pursuant to a lease-purchase agreement by the Institutions, fiee from all liens and encumbrances, other than those which in the opinion of an attorney at law will not materially and adversely affect the operation and maintenance of the Project or receipt of the Pledged Revenues.

Continuing Disclosure

The Board agrees to provide to the Authority all information of the Board or the Institution necessary for compliance with the provisions of the SEC Rule, as more fully set forth in the Disclosure Undertaking. The Authority, upon receipt of information from the Board, will disseminate said information in accordance with the SEC Rule and the Disclosure Undertaking. Additional Bonds

The Authority from time to time may, in its sole discretion, at the request of the Board, authorize the issuance of Additional Bonds for the purposes and upon the terms and conditions provided in the Pledge Agreement and in the Bond Resolution; provided that (1) the terms of such Additional Bonds, the purchase price to be paid therefor and the manner in which the proceeds therefrom are to be disbursed shall have been approved by resolutions adopted by the Authority and the Board; (2) the Authority and the Board shall have entered into a Supplemental Pledge Agreement to acknowledge that the provisions of the Pledge Agreement are revised to the extent necessary to provide for the payment of the principal of, redemption premium, if any, and interest on the Additional Bonds, and associated costs, fees and expenses, and to extend the term of the Pledge Agreement if the maturity of any of the Additional Bonds would otherwise occur after the expiration of the term of the Pledge Agreement; and (3) the Board shall have otherwise complied with the provisions of the Bond Resolution with respect to the issuance of such Additional Bonds.

Payment of Debt Service Requirements on the Bonds

The Authority covenants and agrees that it will, but solely from the Trust Estate, promptly pay or cause to be paid the Debt Service Requirements on the Bonds and other associated fees and expenses in accordance with the Bond Resolution.

Remedies Upon Default

Upon the occurrence and during continuance of any Event of Default under the Pledge Agreement, unless the same shall have been waived as provided in the Pledge Agreement, the Authority shall have the following rights and remedies, in addition to any other remedies in the Pledge Agreement or by law provided:

(a) Riglzt to Bring Suit, Etc. The Authority, with or without entry, personally or by attorney, may in its discretion, without notice or demand: (1) proceed to protect and enforce its rights by a suit or suits in equity or at law, whether for damages or for the specific performance of any covenant or agreement contained in the Additional Obligation, or the Pledge Agreement, or in aid of the execution of any power therein granted, or for any foreclosure, or for the enforcement of any other appropriate legal or equitable remedy, as the Authority shall deem effectual to protect and enforce any of its rights or duties thereunder or (2) avail itself of all other rights or remedies available to it.

(b) Appointment of Receiver. The Authority shall be entitled as a matter of right if it shall so elect: (1) forthwith and without declaring the principal of the Additional Obligations to be due and payable, or (2) after declaring the same to be due and payable, or (3) upon the commencement of any other proceedings, judicial or otherwise, to enforce any right of the Authority, to institute such actions or proceedings at law or in equity for the appointment of a receiver or receivers and all the earnings, revenues, rents, issues, profits and income thereof, with such powers as the court makiig such appointment shall confer.

If the Authority exercises any of its rights set forth above, it shall promptly give written notice of such exercise to the Board.

Any amounts collected by the Authority pursuant to action taken under this Section shall be applied in accordance with the provisions of the Bond Resolution.

Remedies Cumulative

No remedy conferred upon or reserved to the Authority in the Pledge Agreement is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given under the Pledge Agreement or now or thereafter existing at law or in equity or by statute. No delay or omission of the Authority to exercise any right or power accruing upon any Event of Default shall impair any such right or power, or shall be construed to be a waiver of any such Event of Default or an acquiescence therein; and every power and remedy given by the Pledge Agreement to the Authority may be exercised from time to time and as often as may be deemed expedient by the Authority.

Waiver of Extension, Stay Laws

To the extent permitted by law, the Board will not during the continuance of any Event of Default of the Pledge Agreement insist upon, or plead, or in any manner whatever claim or take any benefit or advantage of any stay or extension law wherever enacted, now or at any time thereafter in force, which may affect the covenants and terms of performance of the Pledge Agreement; and the Board expressly waives all benefits or advantage of any such law or laws and covenants not to hinder, delay or impede the execution of any power in the Pledge Agreement granted or delegated to the Authority, but to suffer and permit the execution of every power as though no such law or laws had been made or enacted.

Authority's Right to Perform Certain Board Covenants

In the event the Board shall fail to make provision for: (a) payment of principal of, redemption premium, if any, and interest on the Bonds as the same shall become due and payable; or (b) payment of any amount required to be rebated to the United States Government pursuant to the requirements of Code §148(f) when due, then and in each such case the Authority, with prior written notice to the Board, may remedy such default for the account of the Board and make advances for that purpose. No such performance or advance shall operate to release the Board fi-om any such default or prejudice any rights of the Authority or the Owners arising under any of the Transaction Documents in consequence of such failure.

Failure to Comply with Conhuing Disclosure Requirements

In the event the Board fails to comply in a timely manner, with its continuing disclosure covenants contained in the Pledge Agreement, the Authority shall provide written notice to the Board of such noncompliance. In the event that the Board does not remedy such noncompliance within 10 days of distribution of such notice, the Authority may in its discretion, without notice or demand, proceed to protect and enforce compliance by a suit or suits in equity or at law for the specific performance of such covenant or agreement contained in the Pledge Agreement or for the enforcement of any other appropriate legal or equitable remedy, as the Authority shall deem effectual to protect and enforce any of the continuing disclosure duties of the Board under the Pledge Agreement.

Amendments to Pledge Agreement

Except as otherwise provided in the Pledge Agreement or in the Bond Resolution, the Pledge Agreement may not be amended, changed or modified except by an agreement in writing executed by the Authority and the Board, and upon the same terms and conditions as the Bond Resolution may be amended. 1 Payments Due on Saturdays, Sundays and Holidays In any case where the day for any payment due under the Pledge Agreement shall be a day other than a Business Day, then payment need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the date fixed for payment, and no interest shall accrue for the period after such date. I SUMMARY OF THE BOND RESOLUTION

Security for the Bonds; Limited Nature of Obligations

The principal of, redemption premium, if any, and the interest on the Bonds shall be special limited obligations of the Authority payable solely and only from, and are secured as to the payment of principal of, redemption premium, if any, and interest on the Bonds by a pledge by the Authority of, the Trust Estate in favor of the Owners of the Bonds, as provided in the Bond Resolution.

The covenants and agreements of the Board and the Authority contained in the Bond Resolution, the Pledge Agreement and in the Bonds shall be for the equal benefit, protection, and security of the Owners of any or all of the Bonds, all of which Bonds shall be of equal rank and without preference or priority of one Bond over any other Bond in the application of the funds pledged to the payment of the principal of, redemption premium, if any, and the interest on the Bonds, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in the Bond Resolution.

The principal of, redemption premium, if any, and the interest on the Bonds shall not be a debt or general obligation of the Authority, the Board, the State or any municipal corporation or political subdivision thereof. The availability of Revenues to be deposited into the Revenue Fund is subject to appropriation by act of the Legislature or the optional deposit to the Revenue Fund of other funds legally available to the Board. The principal of, redemption premium, if any, and interest on the Bonds shall not constitute an indebtedness or a pledge of the faith and credit of the Authority, the Board, the State or any municipal corporation or political subdivision thereof, within the meaning of any constitutional or statutory limitation or restriction. The Authority has no taxing power.

No provision, covenant or agreement contained in the Bond Resolution, the Pledge Agreement or the Bonds, or any obligation therein imposed upon the Authority, or the breach thereof, shall constitute or give rise to or impose upon the Authority a pecuniary liability or a charge upon its general credit. In making the agreements, provisions and covenants set forth in the Bond Resolution, the Authority has not obligated itself except with respect to the Pledge Agreement and the application of the Revenues and receipts therefrom as provided in the Bond Resolution. Neither the officers, directors, agents or employees of the Authority nor any person executing the Bonds shall be liable personally on the Bonds by reason of the issuance thereof.

Registration, Transfer and Exchange of the Bonds

The Authority shall cause the Bond Registrar to keep books for the registration and for the transfer of Bonds as provided in the Bond Resolution.

Any Bond may be transferred only upon the books maintained by the Bond Registrar for the registration and transfer of Bonds upon surrender thereof to the Bond Registrar duly endorsed for transfer or accompanied by an assignment duly executed by the Owner or such Owner's attorney or legal representative in such form as shall be satisfactory to the Bond Registrar. Upon any such transfer, the Authority shall execute and shall cause the Bond Registrar to authenticate and deliver in exchange for such Bond a new Bond or Bonds, registered in the name of the transferee, of any denomination or denominations authorized by the Bond Resolution in an aggregate principal amount equal to the principal amount of such Bond, of the same maturity and bearing interest at the same rate.

In all cases in which Bonds shall be exchanged or transferred under the Bond Resolution, the Authority shall cause the Bond Registrar to authenticate and deliver at the earliest practicable time Bonds in accordance with the provisions of the Bond Resolution. Replacement Bonds may be printed and executed by the Authority prior to the time of any such exchange or transfer and the Authority shall cause the Bond Registrar to hold the same for safekeeping until any such exchange or transfer takes place. All Bonds surrendered in any such exchange or transfer shall forthwith be cancelled by the Bond Registrar. The Bond Registrar may make a charge for every such exchange or transfer sufficient to reimburse it for (a) the reasonable fees and expenses in connection with the replacement of the Bond or Bonds mutilated, stolen, lost or destroyed or (b) any tax or other governmental charge imposed in relation to the transfer, exchange, registration, redemption or payment of the Bonds. Any additional charges for transfer or exchange of the Bonds shall be paid by the Authority from proceeds of the Bonds before any such new Bond shall be delivered. Neither the Authority nor the Bond Registrar shall be required to make any such exchange or transfer of Bonds during the 15 days immediately preceding a Principal Payment Date or Interest Payment Date or, in the case of any proposed redemption of Bonds, during the 15 days immediately preceding the selection of Bonds for such redemption or after such Bonds or any portion thereof has been selected for redemption.

Method and Place of Payment of Bonds

Payment of the principal and redemption premium, if any, on all Bonds shall be made (1) by check or draft upon the presentation and surrender of such Bonds as the same respectively become due and payable at the principal off~ceof the Paying Agent, or (2) at the written request addressed to the Paying Agent by CEDE & Co. or any Owner of Bonds in the aggregate principal amount of at least $500,000, by wire transfer to the bank for credit to the account number filed with the Paying Agent no later than the Business Day preceding the Record Date.

Payment of the interest on each Bond shall be made by the Paying Agent on each Interest Payment Date to the person appearing as the Owner thereof on the registration books of the Authority maintained by the Bond Registrar as the Owner thereof (1) by check or draft mailed to such Owner at the address as it appears on such registration books or at such other address as is furnished to the Bond Registrar in writing by such Owner, or (2) at the written request addressed to the Paying Agent by CEDE & Co. or any Owner of Bonds in the aggregate principal amount of at least $500,000, by wire transfer to the bank for credit to the account number filed with the Paying Agent no later than the Business Day preceding the Record Date.

Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed in the following manner. The Authority shall notify the Paying Agent and the Board in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be such as will enable the Paying Agent to comply with the next sentence), and shall deposit with the Paying Agent at the time of such notice an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment; money deposited with the Paying Agent shall be held in trust for the benefit of the Owners of the Bonds entitled to such Defaulted Interest as provided in this Section. Following receipt of such funds the Authority shall cause the Paying Agent to fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Paying Agent of the notice of the proposed payment. The Authority shall promptly notify the Board of such Special Record Date, and shall cause the Paying Agent to give notice of the proposed payment of such Defaulted Interest and of the Special Record Date therefor. Such notice shall be mailed, in the name and at the expense of the Board, first-class postage prepaid, to each Owner of a Bond entitled to such notice at the address of the Owner as it appears on the registration books of the Authority kept by the Bond Registrar not less than ten (10) days prior to such Special Record Date. Authorization of Additional Bonds

The principal amount of any Additional Bonds issued under the Bond Resolution may include an amount sufficient to pay the costs and expenses of issuance, any required funding of reserve accounts and such capitalized amounts as are permitted by the Act and the PEI Act.

Additional Bonds may be issued under the Bond Resolution at any time and from time to time, upon compliance with the conditions provided in the Bond Resolution, for any of the following purposes:

(a) paying the costs of any Project;

(b) repaying and retiring all or a portion of any Series of Bonds at the time Outstanding, if such Bonds may be prepaid;

(c) obtaining funds for the refunding of all or a portion of any Series of Bonds at the time Outstanding, regardless of whether such Bonds may be prepaid, including the payment of redemption premium, if any, thereon and interest due at the designated redemption date; or

(d) any other purpose permitted under the Act or the PEI Act.

Additional Bonds shall be substantially in the form and executed in the manner set forth in the Bond Resolution and shall be deposited with the Bond Registrar for authentication, but prior to or simultaneously with the authentication and delivery of such Additional Bonds by the Bond Registrar, there shall be filed with the Authority and the Bond Registrar for such Additional Bonds the following:

(a) An original executed counterpart of the Supplemental Bond Resolution adopted by the Authority: (i) authorizing the issuance of such Additional Bonds, fixing the amount and terms thereof and describing the purpose or purposes for which such Additional Bonds are being issued or describing the Bonds to be refunded, (ii) authorizing the Authority to enter into a Supplemental Pledge Agreement with the Board to provide for a pledge by the Board of Pledged Revenues at least sufficient to pay the principal of, redemption premium, if any, and interest on the Bonds then to be Outstanding (including the Additional Bonds to be issued) as the same become due, and (iii) for such other matters as are appropriate because of the issuance of the Additional Bonds proposed to be issued which, in the judgment of the Authority, is not to the prejudice of the Authority or the Owners of the Bonds previously issued;

(b) An original executed counterpart of the amendment or supplement to the Pledge Agreement, if required by the Authority;

(c) An opinion of Bond Counsel to the effect that the issuance of the Additional Bonds is permitted by the statutes of the State and that the Additional Bonds constitute valid and legally binding special obligations of the Authority, subject to such limitations and restrictions as shall be described therein;

(d) A certificate of the Board stating that no Event of Default under the Pledge Agreement has occurred and is continuing and that no event has occurred and is continuing which, with the lapse of time or giving of notice, or both, would constitute such an Event of Default.;

(e) Request by the Secretary of Administration that the Authority issue Additional Bonds;

(f) Such legislative, administrative or regulatory approvals as are required under State law;

'(g) In the case of Additional Bonds being issued to refund Outstanding Bonds, such additional documents as shall be reasonably required by the Bond Registrar to establish that provision has been duly made for the payment of all of the Bonds to be refunded in accordance with the provisions of the Bond Resolution;

(h) The written consent of the Board.

(i) If a Series of Bonds to be issued provide for Variable Rate Indebtedness, the Maximum Interest Rate for such Bonds, and the provisions, if any, as to the calculation or change of interest rates; if the Supplemental Resolution authorizing such Series of Bonds authorizes a Qualified Swap Agreement, identification of the Swap Provider and a certificate that such agreement meets the requirements of the definition thereof; and

(j) Such other certificates, statements, receipts and documents as the Authority shall reasonably require for the delivery of such Additional Bonds.

Except as described above, the Authority will not otherwise issue any obligations ratably secured and on a parity with the Bonds with respect to the Trust Estate.

Mutilated, Lost, Stolen or Destroyed Bonds

In the event any Bond shall become mutilated, or be lost, stolen or destroyed, the Authority shall execute and shall cause the Bond Registrar to authenticate and deliver a new Bond of like series, date and tenor as the Bond mutilated, lost, stolen or destroyed; provided that, in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the Bond Registrar, and in the case of any lost, stolen or destroyed Bond, there shall be first furnished to the Authority and the Bond Registrar evidence of such lass, theft or destruction satisfact~ry to the Authority and the Bond Registrar, together with indemnity satisfactory to them. In the event any such Bond shall have matured, instead of issuing a substitute Bond the Authority may pay or authorize the payment of the same without surrender thereof. Upon the issuance of any substitute Bond, the Authority and the Bond Registrar may require the payment £rom the Owner thereof of an amount sufficient to reimburse the Authority and the Bond Registrar for any tax or other governmental charge that may be imposed in relation thereto and any other reasonable fees and expenses incurred in connection therewith.

Payments Due on Saturdays, Sundays and Holidays

In any case where the date of maturity of principal of, redemption premium, if any, or interest on the Bonds, or the date fixed for redemption of any Bonds shall not be a Business Day, then payment of principal of, redemption premium, if any, or interest need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date.

Nonpresentment of Bonds

In the event any Bond shall not be presented for payment when the principal thereof becomes due, either at maturity or otherwise, or at the date fixed for redemption thereof, if funds sufficient to pay such Bond shall have been made available to the Paying Agent, all liability of the Authority to the Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Authority to cause the Paying Agent to hold such fund or funds, without liability for interest thereon, for the benefit of the Owner of such Bond who shall thereafter be restricted exclusively to such fund or funds for any claim of whatever nature on such Owner's part under the Bond Resolution or on, or with respect to, said Bond. If any Bond shall not be presented for payment within six (6) years following the date when such Bond becomes due, whether by maturity or otherwise, the Authority shall cause the Paying Agent to repay to the Board the funds theretofore held by the Paying Agent for payment of such Bond, and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the Board, and the Owner thereof shall be entitled to look only to the Board for payment, and then only to the extent of the amount so repaid, and the Board shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Calculation of Debt Service Requirements on Variable Rate Indebtedness

When calculating interest requirements on Variable Rate Indebtedness which bears a variable rate of interest for periods as to which the rate of interest has not been determined, the rate of interest on Outstanding Variable Rate Indebtedness shall be the average annual rate of interest which was payable on such Variable Rate Indebtedness during the sixty (60) months immediately preceding the date as of which the calculation is made; and the rate of interest on Variable Rate Indebtedness to be incurred (or incurred less than sixty (60) months preceding such date) shall be the average annual rate of interest which would have been payable on such Variable Rate Indebtedness had it been outstanding for a period of sixty (60) months immediately preceding the date as of which the calculation is made, all as set forth in a certificate of a Consultant, delivered to the Authority; provided, however, if the Authority (1) enters into a Qualified Swap Agreement with a Swap Provider requiring the Authority to pay a fixed interest rate on a notional amount, and (2) has made a determination that such Qualified Swap Agreement was entered into for the purpose of providing substitute interest payments for a particular maturity of Bonds in a principal amount equal to the notional amount of the Qualified Swap Agreement, then during the term of such Qualified Swap Agreement and so long as the Swap Provider under such Qualified Swap Agreement is not in default under such Qualified Swap Agreement, the interest rate on such Bonds shall be determined as if such Bonds bore interest at the interest rate payable by the Authority under such Qualified Swap Agreement.

Qualified Swap Agreements

The Authority shall deliver to the Paying Agent a certificate of an Authorized Officer of the Authority expressly identifying any Qualified Swap Agreement hereafter entered into by the Authority and a Swap Provider (whether before or after the settlement date thereof or effective date thereof) under which (i) the Authority may be required to make, from time to time, Authority Swap Payments and (ii) the Authority or the Paying Agent may receive, from time to time, Swap Provider Payments.

All moneys representing Swap Provider Payments shall be deposited in the Revenue Fund to be applied in accordance with the Bond Resolution. The Authority shall make Authority Swap Payments to the Swap Provider from moneys in the Revenue Fund in accordance with the Bond Resolution.

Establishment of Funds and Accounts

The Revenue Fund for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), is authorized and established in the State Treasury.

The Bond Fund for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2008A is authorized and established in the State Treasury and within the Bond Fund there are authorized and established the following Accounts:

(a) Principal and Interest Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2008A;

(b) Costs of Issuance Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2008A; and. (c) Project Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2008A.

(d) Principal and Interest Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2009C;

(e) Costs of Issuance Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2009C; and.

(f) Project Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2009C.

The Rebate Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2008A and the Rebate Account for Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Finance Program), Series 2009C are authorized and established with the Authority.

The creation and, establishment of additional Funds and Accounts, and sub-accounts thereto, under Supplemental Bond Resolutions or as deemed necessary by the Authority or the Board for accounting purposes, is authorized.

Administration of Funds and Accounts

The Funds and Accounts established pursuant to the Bond Resolution shall be maintained and administered by the State in the custody of the State Treasurer on behalf of the Board and the Authority solely for the purposes and in the manner as provided in the Bond Resolution. The Rebate Account established pursuant to the Bond Resolution shall be maintained and administered by the Authority in accordance with the provisions of the Bond Resolution.

Disbursements from the Project Account

The moneys in the Project Account shall be disbursed for the payment of Project Costs in accordance with the provisions of the Pledge Agreement.

Pursuant to the Pledge Agreement, the Authority shall cause the Board to keep and maintain adequate records pertaining to the Project Account and all disbursements therefrom, and to make available to the Authority such records. The Authority shall cause the Board to make annual reports to the Authority, specifying receipts into and disbursements fiom the Project Account. After the Projects have been completed and payment of all costs and expenses incident thereto shall be evidenced by the filing of a Certificate of Completion as provided in the Pledge Agreement, the Authority shall cause the Board to make available a final statement of receipts and disbursements for the Project Account.

Disposition of Moneys in the Project Account Upon Completion of the Projects

The completion of the Projects and payment of all costs and expenses incident thereto shall be evidenced by the filing with the Authority by the Board of the certificate of completion required by the Pledge Agreement. As soon thereafter as practicable, any balance remaining in the Project Account (other than amounts retained by the Board referred to in said certificate and amounts required to be deposited into the Rebate Account), without further authorization, shall be deposited in the Principal and Interest Account.

Application of Moneys in the Costs of Issuance Account

Moneys held in the Costs of Issuance Account shall be used by the Authority to pay Costs of Issuance. Any moneys remaining in the Costs of Issuance Account six months after the Closing Date shall be transferred to the Principal and Interest Account.

Rebate Account

Pursuant to the Federal Tax Certificate, the Authority shall remit all rebate installments and a final rebate payment to the United States. Any moneys remaining in the Rebate Account after redemption and payment of all of the Bonds and payment and satisfaction of any arbitrage rebate shall be paid to the State for deposit in the State general fund. Notwithstanding any other provision of the Bond Resolution, the obligation to pay arbitrage rebate to the United States and to comply with all other requirements of this Section and the Federal Tax Certificate shall survive the defeasance or payment in full of the Bonds.

Pledge of Trust Estate

The Authority pledges the Trust Estate for the payment of the principal of, redemption premium, if any, and interest on the Bonds.

Revenue Fund

The Revenue Fund will be held and administered as provided in the Bond Resolution and in the Pledge Agreement.

Pursuant to the Pledge Agreement, from and after the delivery of the Bonds, all Revenues shall be deposited in the Revenue Fund. All money in the Revenue Fund shall be held in trust and applied as provided in the Bond Resolution and in the Pledge Agreement and, pending such application, shall be subject to a prior lien and charge in favor of the Owners of the Bonds and for the further security of the Owners until paid out or withdrawn as provided therein. The Authority covenants that fi-om and after the delivery of the Series 2008A Bonds and continuing so long as any of the Bonds shall remain Outstanding and unpaid, it will cause the Board to deposit all Revenues, Swap Provider Payments, and Termination Payments in the Revenue Fund and to administer and allocate the moneys then held in the Revenue Fund as set forth in the Bond Resolution.

The Authority shall cause the transfer from the Revenue Fund to the credit of the Principal and Interest Account, no later than seven (7) Business Days prior to each Interest Payment Date, such amount (or the entire sum withdrawn from the Revenue Fund, if equal to or less than the required amount) as may be required, after giving effect to the transfer of other available amounts, if any, to make the amount then held for the credit of the Principal and Interest Account equal to the sum of (1) the amount of interest to become due and payable on the Bonds on such Payment Date and (2) the amount of principal and redemption premium, if any, of the Bonds to become due and payable on such Payment Date. Such deposits to the Principal and Interest Account may be reduced by any investment earnings to be credited to such account prior to such Payment Date.

After the transfer required in the immediately preceding paragraph, an amount for the payment of fees of the Bond Registrar and Paying Agent associated with such payments of interest on, principal of and redemption premium, if any, on the Bonds on such Payment Date and other fees and expenses relating to the Bonds, if any, shall be transferred from the Revenue Fund to the Principal and Interest Account, no later than seven (7) Business Days prior to each Interest Payment Date.

Application of Moneys in the Principal and Interest Account

Except as provided in below, moneys in the Principal and Interest Account shall be expended solely for the payment of the principal of, redemption premium, if any, and interest on the Bonds as the same mature and become due or upon the redemption thereof prior to maturity, to make Termination Payments and to provide sufficient funds to pay the fees and expenses described in the Bond Resolution.

The Authority authorizes the withdrawal of sufficient funds from the Principal and Interest Account for the purposes set forth in the immediately preceding paragraph not later than five (5) Business Days preceding the Payment Date and to make said funds so withdrawn available to the Paying Agent for such purposes.

The Authority, upon written direction of the Board, shall use any moneys in the Principal and Interest Account to redeem all or part of the Bonds Outstanding pursuant to the optional redemption provisions of the Bond Resolution, and to pay interest accrued thereon prior to such redemption, in accordance with and to the extent required so long as the Board is not in default with respect to any payments under the Pledge Agreement and to the extent said moneys are in excess of the amount required for payment of Bonds theretofore matured or called for redemption and any unpaid past due interest in all cases when such Bonds have not been presented for payment. The Board may cause such excess money in the Principal and Interest Account or such part thereof or other moneys of the Board, as the Board may direct, to be applied by the Authority for the purchase of Bonds in the open market for the purpose of cancellation at prices not exceeding the principal amount thereof plus accrued interest thereon to the date of delivery for cancellation.

Any amount remaining in the Principal and Interest Account after the payments authorized above on the Bonds shall have been paid in full or provision made therefor in accordance with the Bond Resolution, and all Termination Payments shall have been paid, shall be paid to the State for deposit in the State general fund.

Deficiency of Payments into Funds and Accounts

If at any time the moneys in the Principal and Interest Account are not sufficient to pay the principal of, redemption premium, if any, and interest on the Bonds as and when the same become due, then moneys in the Revenue Fund shall be used by the Authority and the Board to prevent any default in the payment of the principal of, redemption premium, if any, and interest on the Bonds.

Moneys to be Held in Trust

All moneys deposited under any provision of the Bond Resolution or the Pledge Agreement, and all moneys deposited with or paid to the Paying Agent under any provision of the Bond Resolution or the Pledge Agreement, shall be held in trust and shall be applied only in accordance with the provisions of the Bond Resolution and the Pledge Agreement and, until used or applied as so provided, shall constitute part of the Trust Estate and be subject to the lien thereof.

Any moneys held in cash in excess of the amount insured by the Bank Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation shall be continuously secured, for the benefit of the Board, the Authority and the Owners of any Bonds, by such collateral or indemnification bonds as the State Treasurer shall require. Investment of Moneys in Funds and Accounts

Except as provided in the Bond Resolution, moneys held for the credit of the Funds and Accounts authorized and established or referred to in the Bond Resolution shall be invested and reinvested by the Authority in Investment Obligations which shall mature, or which shall be subject to redemption by the owner thereof at the option of such owner, not later than the dates when the moneys held for the credit of said Funds or Accounts will be required for the purposes intended.

Investment Obligations so purchased as an investment of money in any such Fund or Account shall be deemed at all times to be a part of such Fund or Account. Investment earnings on all Funds and Accounts, except the Rebate Account, shall be credited to the Principal and Interest Account, provided any loss resulting from any such investment shall be charged to such Fund or Account. Investment earnings on the Rebate Account shall be credited to such account. Whenever the cash balance in any Fund or Account is insufficient for the purposes of such Fund or Account, a sufficient amount of Investment Obligations therein shall be sold and reduced to cash. In determining the balance in any Fund or Account, the Authority shall determine the Value of Investment Obligations in such Fund or Account as frequently as deemed necessary by the Authority or the Bond Insurer, if any, but not less frequently than annually nor more frequently than monthly. Neither the State Treasurer, the Authority, the Board, nor any member, employee or officer thereof shall be liable or responsible for any loss resulting from any such investment.

Money held for the credit of the Funds and Accounts authorized and established or referred to in the Bond Resolution may be invested in conformity with any applicable statute through the Pooled Money Investment Board or other instrumentality of the State, subject to the provisions of the Bond Resolution to the extent such provisions are not in conflict with any such statute.

Payment of Principal of, Redemption Premium, if any, and Interest on tlie Bonds

The Authority covenants and agrees that it will, but solely from the Trust Estate, promptly pay or cause to be paid the principal of, redemption premium, if any, and interest on the Bonds as the same become due and payable at the place, on the dates and in the manner provided in the Bond Resolution and in the Bonds according to the true intent and meaning thereof.

Enforcement of Rights Under Pledge Agreement

The Authority covenants and agrees that it shall enforce all of its rights and all of the obligations of the Board (at the expense of the Board) under the Pledge Agreement to the extent necessary to protect the rights of the Owners under the Bond Resolution with respect to the pledge and assignment of the Pledged Revenues and receipts coming due under the Pledge Agreement.

Amendments to Pledge Agreement

The Pledge Agreement may be amended to the extent and upon the terms and conditions provided therein. Notwithstanding any other provision of the Bond Resolution or the Pledge Agreement, the Authority covenants and agrees that it will not consent to any amendment to a Pledge Agreement that will have a material adverse affect on the owners of the Bonds without the prior written consent of the Bond Insurer,

Instruments of Further Assurance

The Authority covenants that it will do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, such Supplemental Bond Resolutions and such further acts, instruments, financing statements and other documents as may reasonably be required for the pledging and assigning of the Trust Estate to secure the payment of the principal of, redemption premium, if any, and interest on the Bonds. The Authority covenants and agrees that, except as provided in the Bond Resolution and in the Pledge Agreement, it will not sell, convey, mortgage, encumber or otherwise dispose of Trust Estate.

Inspection of Books

The Authority covenants and agrees that all books and documents in its possession relating to the Deposit (except the registration books maintained by the Bond Registrar) and to the Trust Estate, including the Annual Budget relating thereto, shall at all reasonable times during normal business hours be open to inspection by the Original Purchaser or by any Owner of any Bonds then Outstanding, or its designee, and by such accountants or entities as the Board or Authority may from time to time designate in writing.

Continuing Disclosure

The Authority covenants with the Beneficial Owners to perform its obligations under the Disclosure Undertaking, which are incorporated in the Bond Resolution by reference, as required by the SEC Rule. Such covenant shall be for the benefit of and enforceable by the Beneficial Owners. This dissemination shall be in addition to other covenants of the Authority to provide financial information set forth in the Bond Resolution.

Monitoring of Certain Board Obligations

The Authority shall use its best efforts to monitor the Buard's performance of its obligations set forth in the Pledge Agreement.

Tax Covenants

The Authority covenants and agrees that (1) it will comply with all applicable provisions of the Code, including Sections 103 and 141 through 150, necessary to maintain the exclusion from gross income for federal income tax purposes of the interest on the Series 2008A Bonds and Series 2009C Bonds and (2) it will not use or permit the use of any proceeds of Series 2008A Bonds or Series 2009C Bonds or any other funds of the Authority nor take or permit any other action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from federal gross income of the interest on the Series 2008A Bonds or the Series 2009C Bonds. The Authority will, in addition, adopt such other resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable fiture laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Series 2008A Bonds and Series 2009C Bonds will remain excluded from federal gross income, to the extent any such actions can be taken by the Authority.

The Authority covenants and agrees that (1) it will comply with all requirements of Section 148 of the Code to the extent applicable to the Series 2008A Bonds and the Series 2009C Bonds, (2) it will use the proceeds of the Series 2008A Bonds and Series 2009C Bonds as soon as practicable and with all reasonable dispatch for the purposes for which the Series 2008A Bonds and Series 2009C Bonds are issued, and (3) it will not invest or directly or indirectly use or permit the use of any proceeds of the Series 2008A Bonds or the Series 2009C Bonds or any other funds of the Authority in any manner, or take or omit to take any action, that would cause the Series 2008A Bonds or the Series 2009C Bonds to be "arbitrage bonds" within the meaning of Section 148(a) of the Code.

The Authority covenants and agrees that it will not use any portion of the proceeds of the Series 2008A Bonds or Series 2009C Bonds, including any investment earnings on such proceeds, directly or indirectly, in a manner that would cause any Series 2008A Bond or Series 2009C Bonds to be a "private activity bond" within the meaning of Section 141(a) of the Code. The Authority covenants and agrees that it will pay or provide for the payment from time to time of all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any Treasury Regulations applicable to the Series 2008A Bonds and Series 2009C Bonds from time to time. The Authority specifically covenants to pay or cause to be paid to the United States, the required amounts of rebatable arbitrage at the times and in the amounts as determined by the Federal Tax Certificate. Notwithstanding anything to the contrary contained in the Bond Resolution, the Federal Tax Certificate may be amended or replaced if, in the opinion of Bond Counsel such amendment or replacement will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Series 2008A Bonds and Series 2009C Bonds. This covenant shall survive payment in full or defeasance of the Series 2008A Bonds and Series 2009C Bonds.

No Impairment by the State

Pursuant to K.S.A. 68-233 1, the State has pledged and covenanted with the holders of the Bonds that it will not limit or alter the rights or powers vested in the Authority by K.S.A. 68-233 1, nor limit or alter the rights or powers of the Authority or the Board, in any manner which would jeopardize the interest of the holders or any trustee of such holders or inhibit or prevent performance or fulfillment by the Authority or the Board with respect to the terms of any agreement made with the holders of the Bonds or agreements made pursuant to the PEI Act, except that the failure of the State to appropriate moneys for any purpose shall not be deemed a violation of such pledge and covenant.

Notice of Default

If an Event of Default shall have occurred and be continuing, the Authority shall request the Bond Registrar to promptly notify the Bond Insurer, if any, and the Owners of such default.

Acceleration of Maturity in Event of Default

If an Event of Default shall have occurred and be continuing, the Authority may, and shall upon the written request of the Owners of not less than 25% in aggregate principal amount of Bonds then Outstanding by notice in writing delivered to the Authority and the Board, declare the principal of all Bonds then Outstanding and the interest accrued thereon immediately due and payable, and such principal and interest shall thereupon become and be immediately due and payable.

If, at any time after such declaration, but before the Bonds shall have matured by their terms, all overdue installments of principal and interest on the Bonds, together with the reasonable and proper expenses of the Bond Registrar and Paying Agent, and all other sums then payable by the Authority under the Bond Resolution shall either be paid or provision shall be made for such payment, then and in every such case the Authority shall, but only with the approval of the Owners of not less than 50% in aggregate principal amount of the Bonds Outstanding, rescind such declaration and annul such default in its entirety.

In case of any rescission, then and in every such case the Authority, the Board and the Owners shall be restored to their former position and rights respectively under the Bond Resolution, but no such rescission shall extend to any subsequent Event of Default or impair any right consequent thereon.

Remedies

The Bond Resolution shall constitute a contract between the Authority and each of the Owners of the Bonds issued under the Bond Resolution. Subject to the provisions of the Bond Resolution, any such Owner of any one or more of the Bonds may by suit, action, mandamus, injunction or other proceeding, either at law or in equity, enforce and compel performance of all duties, obligations and conditions determined and required by the Bond Resolution.

Upon the happening and continuance of any Event of Default, then and in every such case, any Owner may proceed, subject to the provisions of the Bond Resolution, to protect and enforce the rights of the Owners by a suit, action or special proceeding in equity, or at law, either for the specific performance of any covenant or agreement contained in the Bond Resolution, or in aid or execution of any power granted in the Bond Resolution, or for the enforcement of any proper legal or equitable remedy as such Owner shall deem most effectual to protect and enforce such rights.

Anything in the Bond Resolution to the contrary notwithstanding, if at any time the moneys in the Principal and Interest Account shall not be sufficient to pay the principal of and interest on the Bonds as the same shall become due and payable, such moneys, together with any moneys then available or thereafter becoming available for such purpose, whether through the exercise of the remedies provided for in the Bond Resolution or otherwise, shall be applied as follows:

(a) If the principal of all the Bonds shall not have become due and payable, all such moneys shall be applied:

first: to the payment to the Persons entitled thereto of all installments of interest then due and payable on the Bonds in the order in which such installments became due and payable, and, if the amount available shall not be sufficient to pay in full any particular installments, then to the payment, ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in the Bonds; and

second: to the payment to the Persons entitled thereto of the unpaid principal of any of the Bonds which shall have become due and payable (other than Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of the Bond Resolution), in the order of their due dates, with interest on the principal amount of such Bonds at the respective rates specified therein fiom the respective dates upon which such Bonds became due and payable, and, if the amount available shall not be sufficient to pay in full the principal of the Bonds due and payable on any particular date, together with such interest, then to the payment first of such interest, ratably, according to the amount of such interest due on such date, and then to the payment of such principal, ratably, according to the amount of such principal due on such date, to the Persons entitled thereto without any discrimination or preference.

If, after application as described in the first and second paragraphs above, any moneys remain, the same shall be applied:

third: to the payment of the interest on and the principal of the Bonds, to the purchase and retirement of Bonds and to the redemption of Bonds, all in accordance with the provisions of the Bond Resolution.

(b) If the principal of all the Bonds shall have become due and payable, all such moneys shall be applied:

first: to the payment to the Persons entitled thereto of all installments of interest due and payable on or prior to maturity of Bonds, if any, in the order in which such installments became due and payable and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in the Bonds, and then to the payment of any interest due and payable after maturity on the Bonds, ratably, to the Persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in the Bonds; and

second: to the payment of the principal of the Bonds, ratably, to the Persons entitled thereto, without preference or priority of any Bond over any other Bond.

Whenever moneys are to be applied pursuant to these provisions of the Bond Resolution, such moneys shall be applied at such times, and from time to time, as the Authority in its sole discretion shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the hture; the deposit of such moneys with the Paying Agent in trust for the proper purpose shall constitute proper application by the Authority; and the Authority shall incur no liability whatsoever to any Owner or to any other Persons for any delay in applying any such moneys, so long as the Authority acts with reasonable diligence, having due regard to the circumstances, and ultimately applies the same in accordance with such provisions of the Bond Resolution as may be applicable at ~ the time of such application. Whenever the Authority shall exercise such discretion in applying such moneys, it shall fix the date (which shall be an Interest Payment Date unless the Authority shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to 1 be paid on such date shall cease to accrue. The Authority shall give such notice as it may deem appropriate of the fixing of any such date, and shall not be required to make payment to the Owner of any unpaid Bond until such Bond shall be surrendered to the Paying Agent for appropriate endorsement, or for cancellation if fully paid.

In case any proceeding taken by any Owner on account of any default shall have been discontinued or abandoned for any reason, then and in every such case the Authority and the Owners shall be restored to their former positions and rights under the Bond Resolution, respectively, and all rights and remedies of the Owners shall continue as though no such proceedings had been taken.

No Owner of any of the Bonds shall have any right in any manner whatever to affect, disturb or prejudice the security of the Bond Resolution or to enforce any right under the Bond Resolution, except in the manner provided in the Bond Resolution. All proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Owners.

No remedy conferred on the Owners is intended to be exclusive of any other remedy or remedies, and each and every remedy conferred shall be cumulative and shall be in addition to every other remedy given under the Bond Resolution and under the Act or now or thereafter existing at law or in equity or by statute.

No delay or omission of any Owner to exercise any right or power accruing upon any default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by the Bond Resolution to the Owners may be exercised from time to time and as often as may be deemed expedient.

Payment of Authority Swap Payments shall be paid ratably with payment of installments of interest pursuant to paragraphs (a) and (b) above (provided there has not been an uncured payment default by the Swap Exercise of Remedies

If an Event of Default shall have occurred and be continuing, the Authority shall pursue and exercise any available remedy at law or in equity by suit, action, mandamus or other proceeding, or exercise such one or more of the rights and powers conferred by the Bond Resolution as the Authority, being advised by counsel, shall deem most expedient in the interests of the Owners to enforce the payment of the principal of and interest on the Bonds then Outstanding.

All rights of action under the Bond Resolution or under any of the Bonds may be enforced by the Bond Registrar without the possession of any of the Bonds or the production thereof in any trial or other proceedings relating thereto, and any such suit or proceeding instituted by the Authority shall be brought in its name without necessity of joining as plaintiffs or defendants any Owners of the Bonds, and any recovery of judgment shall be for the equal benefit of all the Owners of the Outstanding Bonds.

Limitation on Exercise of Remedies by Owners

No Owner of any Bond shall have any right (other than granted in the Bond Resolution) to institute any suit, action or proceeding in equity or at law for the enforcement of the Bond Resolution or for the execution of any trust thereunder or for the appointment of a receiver or any other remedy thereunder, unless (a) an Event of Default shall have occurred, (b) the Owners of 25% in aggregate principal amount of Bonds then Outstanding shall have made written request to the Authority, shall have offered it reasonable opportunity either to proceed to exercise the powers thereinbefore granted or to institute such action, suit or proceeding in its own nanle, and (c) the Authority shall thereafter fail or refuse to exercise the powers granted or to institute such action, suit or proceeding in its own name; and such actions or events are declared in every case, at the option of the Authority, to be conditions precedent to the execution of the powers and trusts of the Bond Resolution, and to any action or cause of action for the enforcement of the Bond Resolution, or for the appointment of a receiver or for any other remedy thereunder, it being understood and intended that no one or more Owners of the Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice the Bond Resolution by its, his or their action or to enforce any right thereunder except in the manner provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner provided and for the equal benefit of the Owners of all Bonds then Outstanding. Notwithstanding anything in this Section to the contrary, no suit, action or proceeding shall be undertaken with respect to Bonds unless the Owners of 25% in aggregate principal amount of Bonds then outstanding shall act as described in clause (b) above. Nothing in the Bond Resolution contained shall, however, affect or impair the right of any Owner to payment of the principal of, redemption premium, if any, and interest on any Bond at and after the maturity thereof; or the obligation of the Authority to pay the principal of, redemption premium, if any, and interest on each of the Bonds issued thereunder to the respective Owners thereof at the time, place, from the source and in the manner in the Bond Resolution and in the Bonds expressed.

Right of Owners to Direct Proceedings

Anything in the Bond Resolution to the contrary notwithstanding, the Owners of 50% in aggregate principal amount of Bonds then Outstanding shall have the right, at any time, by an instrument or instruments in writing executed and delivered to the Bond Registrar, to direct the time, method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of the Bond Resolution, or for the appointment of a receiver or any other proceedings thereunder; provided that such direction shall not be otherwise than in accordance with the provisions of law and of the Bond Resolution. Remedies Cumulative

No remedy by the terms of the Bond Resolution conferred upon or reserved to the Authority or to the Owners is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given to the Authority or to the Owners thereunder or now or thereafter existing at law or in equity or by statute. No delay or omission to exercise any right, power or remedy accruing upon any Event of Default shall impair any such right, power or remedy or shall be construed to be a waiver of any such Event of Default or acquiescence therein; and every such right, power or remedy may be exercised from time to time and as often as may be deemed expedient. No waiver of any Event of Default under the Bond Resolution, whether by the Authority or by the Owners, shall extend to or shall affect any subsequent Event of Default or shall impair any rights or remedies consequent thereon.

Control of Remedies Upon an Event of Default and Event of Insolvency

Anything in the Bond Resolution to the contrary notwithstanding, upon the occurrence and continuance of an Event of Default as defined in the Bond Resolution, the Bond Insurer, if any, shall be entitled to control and direct the enforcement of all rights and remedies granted to the Owners, including, without limitation: (a) the right to accelerate the principal of the Bonds so insured as described in the Bond Resolution and (b) the right to annul any declaration of acceleration. The Bond Insurer, if any, shall also be entitled to approve all waivers of Events of Default.

Any reorganization or liquidation plan with respect to the Authority must be acceptable to the Bond Insurer, if any. In the event of any reorganization or liquidation, the Bond Insurer, if any, shall have the right to vote on behalf of all Owners who hold the Insured Bonds, absent a default by such Bond Insurer under the applicable Bond Insurance Policy insuring such Insured Bonds.

Failure to Comply with Continuing Disclosure Requirements

In the event that the Authority fails to comply in a timely manner with its continuing disclosure covenants contained in the Bond Resolution, any Owner may make demand for such compliance by written notice to the Authority. In the event the Authority does not remedy such noncompliance within 10 days of receipt of such written notice, any Owner may in its discretion, without notice or demand, proceed to protect and enforce compliance by a.suit or suits in equity or at law for the specific performance of such covenant or the covenants contained in the Disclosure Undertaking or for the enforcement of any other appropriate legal or equitable remedy, as the Owner shall deem effectual to protect and enforce any of the continuing disclosure duties of the Authority under the Bond Resolution.

Supplemental Bond Resolutions Not Requiring Consent of Owners

The Authority may from time to time, without the consent of or notice to any of the Owners, adopt such Supplemental Bond Resolution or Supplemental Bond Resolutions as shall not be inconsistent with the terms and provisions of the Bond Resolution, for any one or more of the following purposes:

(a) To cure any ambiguity or formal defect or omission in the Bond Resolution or to make any other change not prejudicial to the Owners;

(b) To grant to or confer upon the Bond Registrar for the benefit of the Owners any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the (c) To subject to the Bond Resolution additional revenues, properties or collateral.

Supplemental Bond Resolutions Requiring Consent of Owners

Exclusive of Supplemental Bond Resolutions described above under "-Supplemental Bond Resolutions Not Requiring Consent of Owners," and subject to the terms and provisions contained under this heading "Supplemental Bond Resolutions Requiring Consent of Owners," and not otherwise, the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, anything contained in the Bond Resolution to the contrary notwithstanding, to consent to and approve the adoption by the Authority of such other Supplemental Bond Resolution or Supplemental Bond Resolutions as shall be deemed necessary and desirable by the Authority for the purpose of modifling, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in the Bond Resolution or in any Supplemental Bond Resolution; provided, however, that nothing in this Section contained shall permit or be construed as permitting (1) an extension of the maturity of the principal of or the interest on any Bond issued under the Bond Resolution, or (2) a reduction in the principal amount of any Bond or the rate of interest thereon, or (3) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (4) a reduction in the aggregate principal amount of Outstanding Bonds of which the Owners of 100% of the Outstanding Bonds are required for consent to any such Supplemental Bond Resolution.

Any provision of the Bond Resolution may be amended with the written consent of the Owners of 100% in aggregate principal amount of Bonds Outstanding.

Notwithstanding any other provision of the Bond Resolution, without the consent of the Bond Insurer, neither the Bond Resolution nor the Bonds shall be amended to include provisions allowing the Authority or the Board to purchase Bonds either outright or in lieu of redemption for purposes other than retiring the Bonds.

Board's Consent to Supplemental Bond Resolutions

Anything to the contrary notwithstanding, a Supplemental Bond Resolution under the Bond Resolution which affects any rights of the Board shall not become effective unless and until the Board shall have consented in writing to the execution and delivery of such Supplemental Bond Resolution. In this regard, the Authority shall cause notice of the proposed execution and delivery of any such Supplemental Bond Resolution, together with a copy of the proposed Supplemental Bond Resolution, to be mailed to the Board at least 60 days prior to the proposed date of adoption and delivery of any such Supplemental Bond Resolution; provided, however, the Board may waive such notice at its sole discretion.

Swap Provider Consent

Anything to the contrary notwithstanding, a Supplemental Resolution under the Bond Resolution which adversely affects any rights of a Swap Provider shall not become effective unless and until the Swap Provider shall have consented in writing to the execution and delivery of such Supplemental Resolution. In this regard, the Authority shall cause notice of the proposed execution and delivery of any such Supplemental Resolution (including a Supplemental Resolution proposed to be executed and delivered pursuant to the Bond Resolution) together with a copy of the proposed Supplemental Resolution to be mailed to each Swap Provider at least 15 days prior to the proposed date of adoption and delivery of any such Supplemental Resolution.

Satisfaction and-Dischargeof the Bond Resolution

When the principal of, redemption premium, if any, and interest on all the Bonds shall have been paid in accordance with their terms, or provision has been made for such payment as provided in the Bond Resolution, and provision shall also be made for paying all other sums payable under the Bond Resolution, including the fees and expenses of the Bond Registrar and Paying Agent to the date of retirement of the Bonds and any rebatable arbitrage to the United States as required by the Bond Resolution, then the right, title and interest of the Owners under the Bond Resolution shall thereupon cease, determine and be void, and thereupon the Authority shall cancel, discharge and release the covenants of the Bond Resolution and shall execute, acknowledge and deliver such instruments of satisfaction and discharge or release as shall be requisite to evidence such release and the satisfaction and discharge and shall assign and deliver to the State for deposit in the State general fund any property at the time subject to the Bond Resolution which may then be in its possession, except hds or securities in which such funds are invested and held by the Authority for the payment of the principal of, redemption premium, if any, and interest on the Bonds. The Authority is authorized to accept a certificate by the Bond Registrar and Paying Agent that the principal of, redemption premium, if any, and interest due and payable upon all of the Bonds then Outstanding have been paid or such payment provided for in accordance with the Bond Resolution as evidence of satisfaction of the Bond Resolution.

Notwithstanding anything in the Bond Resolution to the contrary, in the event that the principal and/or interest due on the Insured Bonds shall be paid by the Bond Insurer, if any, pursuant to the Bond Insurance Policy, such Insured Bonds shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Authority and the assignment and pledge of the Trust Estate and all covenants, agreements and other obligations of the Authority to the Owners shall continue to exist and shall run to the benefit of the Bond Insurer, if any, and such Bond Insurer shall be subrogated to the rights of such Owners.

Bonds Deemed to be Paid

Bonds shall be deemed to be paid within the meaning of the Bond Resolution when payment of the principal of, redemption premium, if any, on such Bonds, plus interest thereon to the due date thereof (whether such due date be by reason of maturity or upon redemption as provided in the Bond Resolution, or otherwise), either (1) shall have been made or caused to be made in accordance with the terms of the Bond Resolution, or (2) shall have been provided for by depositing with the Paying Agent, or a bank located in the State of Kansas having full trust powers, or the State Treasurer, at or prior to the maturity or redemption date of said Bonds, in trust for and irrevocably set aside exclusively for such payment, Defeasance Obligations ensuring the availability of sufficient moneys, taking into account earnings on such Defeasance Obligations without reinvestment, to make such payment; provided, however, that the Bonds shall not be deemed to be paid within the meaning of the Bond Resolution unless the requirements of the Bond Resolution relating to the Bond Insurer are also satisfied. At such time as a Bond shall be deemed to be paid under the Bond Resolution, as aforesaid, it shall no longer be secured by or entitled to the benefits of the Bond Resolution, except for the purposes of any such payment from such Defeasance Obligations. Notwithstanding the foregoing, in the case of Bonds which by their terms may be redeemed prior to the stated maturities thereof, no deposit under clause (2) shall be deemed a payment of such Bonds as aforesaid until, as to a11 such Bonds which are to be redeemed prior to their respective stated maturities, proper notice of such redemption shall have been given in accordance with the Bond Resolution, or irrevocable instructions shall have been given to the Bond Registrar and Paying Agent to give such notice. h Notwithstanding any provision of the Bond Resolution which may be contrary, all Defeasance Obligations set aside and held in trust for the payment of Bonds (including redemption premium thereon, if any) and interest thereon shall be applied to and used solely for the payment of the particular Bonds (including redemption premium thereon, if any) and interest thereon with respect to which such Defeasance Obligations Payment of Bonds After Discharge

- Notwithstanding the discharge of the lien provided in the Bond Resolution, the Paying Agent and the Bond Registrar shall nevertheless retain such rights, powers and duties under the Bond Resolution as may be necessary and convenient for the payment of amounts due or to become due on the Bonds and the registration, transfer, exchange and replacement of Bonds as provided in the Bond Resolution. Nevertheless, any moneys held by the Paying Agent for the payment of the principal of, redemption premium, if any, or interest on any Bond remaining unclaimed for six (6) years after the principal of all Bonds has become due and payable, whether at maturity or upon proceedings for redemption or by declaration as provided in the Bond Resolution, shall then be paid to the State Treasurer, and the Owners of any Bonds not theretofore presented for payment shall thereafter be entitled to look only to the State Treasurer for payment thereof, and all liability of the Paying Agent and the Bond Registrar, in such capacities, and the Authority with respect to such moneys shall thereupon cease.

Consents and Other Instruments by Owners

Any consent, request, direction, approval, objection or other instrument required by the Bond Resolution to be signed and executed by the Owners may be in any number of concurrent writings of similar tenor, and may be signed or executed by such Owners in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of the Bond Resolution, and shall be conclusive in favor of the Authority with regard to any action taken, suffered or omitted under any such instrument, namely:

(a) The fact and date of the execution by any Person of any such instrument may be proved by the certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the Person signing such instrument acknowledged before him the execution thereof, or by affidavit of any witness to such execution.

(b) The fact of ownership of Bonds and the amount or amounts, numbers and other identification of such Bonds, and the date of holding the same shall be proved by the registration books of the Authority maintained by the Bond Registrar.

In determining whether the Owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under the Bond Resolution, Bonds owned by the Authority or the Board or any affiliate of the Authority or the Board shall be disregarded and deemed not to be Outstanding under the Bond Resolution, except that, in determining whether the Bond Registrar shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Authority knows to be so owned shall be so disregarded. For purposes of this paragraph, the word "affiliate" means any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the Board and for the purposes of this definition, "control" means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, Bonds so owned which have been pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of the Bond Registrar the pledgee's right so to act with respect to such Bonds and that the pledgee is not the Authority or the Board or any affiliate of the Authority or the Board. Limitation of Rights Under the Bond Resolution

With the exception of rights expressly conferred, nothing expressed or mentioned in or to be inferred from the Bond Resolution or the Bonds is intended or shall be construed to give any Person other than the parties thereto, and the Owners of the Bonds, any right, remedy or claim under or with respect to the Bond Resolution, and all of the covenants, conditions and provisions of the Bond Resolution being intended to be and being for the sole and exclusive benefit of the parties to the Bond Resolution and the Owners of the Bonds as provided in the Bond Resolution.

Immunity of Officers, Employees and Members of Authority

No recourse shall be had for the payment of the principal of, redemption premium, if any, or interest on any of the Bonds or for any claim based thereon or upon any obligation, covenant or agreement in the Bond Resolution or any other Authority document, contained against any past, present or future officer, director, member, employee or agent of the Authority, or of any successor public corporation, as such, either directly or through the Authority or any successor public corporation, under any rule of law or equity, statute or constitution, or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such officers, directors, members, employees or agents as such is expressly waived and released as a condition of and consideration for the execution of the Bond Resolution and the issuance of the Bonds.

Limitation on Authority Obligations

Any other term or provision in the Bond Resolution, in the Transaction Documents or elsewhere to the contrary notwithstanding:

(a) Any and all obligations (including without limitation, fees, claims, demands, payments, damages, liabilities, penalties, assessments and the like) of or imposed upon the Authority or its members, officers, agents, employees, representatives, advisors or assigns, whether under the Bond Resolution or any of the Transaction Documents or elsewhere and whether arising out of or based upon a claim or claims of tort, contract, misrepresentation, or any other or additional legal theory or theories whatsoever (collectively the "Obligations"), shall in all events be absolutely limited obligations and liabilities, payable solely out of the following, if any, available at the time the Obligation in question is asserted:

(1) Bond proceeds (excluding the Deposit), investments thereof and investment earnings thereon; and

(2) Payments derived from the Bonds, the Bond Resolution (including the Trust Estate to the extent provided in the Bond Resolution) and the Pledge Agreement (except for the fees and expenses of the Authority and the Authority's right to indemnification under the Pledge Agreement under certain circumstances);

The above provisions (1) and (2) being collectively referred to as the "exclusive sources of the Obligations."

(b) The Obligations shall not be deemed to constitute a debt or liability of the State or of any political subdivision thereof within the meaning of any State constitutional provision or statutory limitation and shall not constitute a pledge of the full faith and credit of the State or of any political subdivision thereof, but shall be payable solely from and out of the exclusive sources of the Obligations and shall otherwise impose no liability whatsoever, primary or otherwise, upon the State or any political subdivision thereof or any charge upon their general credit or taxing power. The Authority has no taxing power.

(c) In no event shall any member, officer, agent, employee, representative or advisor of the Authority, or any successor or assign of any such person or entity, be liable, personally or otherwise, for any Obligation.

(d) In no event shall the Bond Resolution be construed as:

(1) depriving the Authority of any right or privilege; or

(2) requiring the Authority or any member, officer, agent, employee, representative or advisor of the Authority to take or omit to take, or to permit or suffer the taking of, any action by itself or by anyone else;

which deprivation or requirement would violate or result in the Authority's being in violation of the Act or any other applicable state or federal law.

Governing Law

The Bond Resolution shall be governed exclusively by and construed in accordance with the applicable laws of the State. (THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX E

BOOK-ENTRY ONLY SYSTEM

The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Series 2009C Bonds. The Series 2009C Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Series 2009C Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.. DTC holds and provides asset servicing for over 2.2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation and Emerging Markets Clearing Corporation, (NSCC, FICC and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

Purchases of Series 2009C Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2009C Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Ownery')is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2009C Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2009C Bonds, except in the event that use of the book-entry system for the Series 2009C Bonds is discontinued.

To facilitate subsequent transfers, all Series 2009C Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2009C Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2009C Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2009C Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2009C Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2009C Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Series 2009C Bonds may wish to ascertain that the nominee holding the Series 2009C Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Series 2009C Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2009C Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.3 consenting or voting rights to those Direct Participants to whose accounts Series 2009C Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Payments with respect to the Series 2009C Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants7 accounts upon DTG7s receipt of funds and corresponding detail information from the Authority or Paying Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent, or Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or Paying Agent, disbursement of su~h payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Series 2009C Bonds at any time by giving reasonable notice to Authority or Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, bond certificates are required to be printed and delivered.

The Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered.

THE INFORMATION IN THIS SECTION CONCERNING DTC AND DTC'S BOOK-ENTRY SYSTEM HAS BEEN OBTAINED FROM DTC. NEITHER THE AUTHORITY, THE BOARD, THE UNDERWRITERS NOR THE PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DIRECT PARTICIPANTS, INDIRECT PARTICIPANTS OR ANY BENEFICIAL OWNER WITH RESPECT TO: (1) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DIRECT PARTICIPANT OR ANY INDIRECT PARTICIPANT; (2) THE PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2009C BONDS; (3) ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO BONDHOLDERS UNDER THE RESOLUTION; OR (4) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS BONDOWNER. APPENDIX F

FORM OF CONTINUING DISCLOSURE UNDERTAKING

CONTINUING DISCLOSURE UNDERTAKING

$20,000,000 KANSAS DEVELOPMENT FINANCE AUTHORITY REVENUE BONDS (KANSAS BOARD OF REGENTS - POSTSECONDARY EDUCATIONAL INSTITUTION INFRASTRUCTURE FINANCE PROGRAM) SERIES 2009C

THIS CONTINUING DISCLOSURE UNDERTAKING dated as of March 15, 2009 (this "Disclosure Undertaking"), is executed and delivered by the KANSAS DEVELOPMENT FINANCE AUTHORITY (the '!Authoritym) and the KANSAS BOARD OF REGENTS (the "Board") in connection with the issuance of the above-referenced bonds (the "Series 2009C Bonds") pursuant to the hereinafter- defined Bond Resolution for the purpose of entering into an undertaking by the Authority and the Board to provide certain information with respect to the Series 2009C Bonds in order to assist the Participating Underwriter in complying with the provisions of the Rule (as hereinafter defined).

Section 1. Definitions. In addition to the definitions set forth in the hereinafter-defined Bond Resolution, which apply to any capitalized term used in this Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:

"Annual Report" means any Annual Report described in SectionZ(a) of this Disclosure Undertaking.

"Authority" means the Kansas Development Finance Authority.

"Beneficial Owner" means any registered owner of any Series 2009C Bonds and any Person which: (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2009C Bonds (including Persons holding Series 2009C Bonds through nominees, depositories or other intermediaries); or (b) is treated as the Owner of any Series 2009C Bonds for federal income tax purposes.

"Board" means the Board of Regents of the State of Kansas, as provided for in Article 6 of the Constitution and in the statutes of the State, or, if said Board shall be abolished, the board, body, commission or authority succeeding to the principal functions thereof or to whom the powers given under K.S.A. 74-3201 et seq., or K.S.A. 76-6a12 to 76-6a25, inclusive, to the Board shall be given by law.

"Bond Resolution" means Bond Resolution No. 244, as supplemented by Supplemental Bond Resolution No. 244-A, as the same may be amended from time to time.

"Dissemination Agent" means any entity designated in writing by the Authority to serve as dissemination agent pursuant to this Disclosure Undertaking, as set forth in Section 5.

"Pledge Agreement" means the Pledge of Revenues Agreement, dated as of March 15, 2008, as supplemented by the First Supplemental Pledge of Revenues Agreement, dated as of March 15,2009, pursuant to which the Board has pledged certain Pledged Revenues to the Authority for the repayment of the Series 2009C Bonds, as more particularly described therein.

"Fiscal Year" means the one-year period commencing on July 1 of any year and ending on June 30 of the following year, and numbered for the year in which it ends, or such other date or dates as may be adopted by the State for its general accounting purposes. "GAAP" means generally accepted accounting principles, as applied to governmental units as in effect at the time of the preparation of the Annual Report.

"Material Events" means any of the events listed in Section 3(a) hereof.

"MSRB" means the Municipal Securities Rulemaking Board.

"National Repository" means any Nationally Recognized Municipal Securities Information Repository approved by the SEC for purposes of the Rule. The National Repositories currently approved by the SEC are set forth in Exhibit B.

"Official Statement" means the Official Statement dated March 12, 2009 for the Series 2009C Bonds.

"Participating Underwriter1' means any of the original underwriters of the Series 2009C Bonds named on the cover of the Official Statement that are required to comply with the Rule in connection with offering of the Series 2009C Bonds.

"Repositoryt1means each National Repository and each State Repository, if any.

"Rule" means Rule 15~2-12(b)(5)adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time.

"SEC" means the Securities and Exchange Commission of the United States.

"State Repository" means any public or private repository or entity designated by the State as a state repository for the purpose of the Rule and recognized as such by the SEC. As of the date of this Disclosure Undertaking, there is no State Repository.

"State" means the State of Kansas.

Section 2. Provision of Annual Reports.

(a) The Board agrees to provide to the Authority as soon as practicable after they are available, but in no event more than 190 days after the end of each Fiscal Year, commencing with the Fiscal Year ended June 30, 2009, financial information and operating data with respect to the State for such Fiscal Year of the type and in substantially the format contained in the Comprehensive Annual Financial Report of the State contained in AppendixA-1 to the Official Statement (the "Annual Report"). The method of preparation and basis of accounting of the Annual Report shall be as set forth in AppendixA-1 to the Official Statement or otherwise in conformance with State laws or regulations. If the financial information in the Annual Report is not prepared in accordance with GAAP, but such financial information in accordance with GAAP is available, such financial information shall also be provided in accordance with GAAP. The financial information in the Annual Report may be unaudited; provided, however, that if audited financial information is available, such audited financial information shall be provided to the Authority for inclusion in the Annual Report when available. If the basis of accounting is changed to a basis less comprehensive than contained in the Official Statement, the Authority shall provide notice of such change in the same manner as for a Material Event under Section 3(b) hereof. Any or all of the Annual Report may be incorporated by reference from other documents, including official statements of debt issues with respect to the State and agencies or instrumentalities thereof that have been filed with each National Repository, the MSRB or the SEC and, in the case of a final official statement, that is available from the MSRB. The Board shall clearly identify to the Authority each document incorporated by reference and the source from which it is available. If the Fiscal Year changes, the Authority shall provide notice of such change in the same manner as for a Material Event under Section 3(b). (b) The Authority shall:

(i) determine each year prior to the date for providing the Annual Report the name and address, and a method of filing with, each Repository; and

(ii) file the Annual Report as specified by Section 2(a) hereof; or if the Annual Report is not received fi-om the Board and thus not filed within the time period specified in Section 2(a) hereof, the Authority shall send a notice to each Repository in substantially the form attached as Exhibit A.

Section 3. Reporting of Material Events.

(a) The Authority agrees that it will file pursuant to Section 3(b) below, as promptly as practicable, notice of any of the following events with respect to the Series 2009C Bonds, if material:

(i) principal and interest payment delinquencies;

(ii) non-payment related defaults;

(iii) unscheduled draws on debt service reserves reflecting financial difficulties;

(iv) unscheduled draws on credit enhancements reflecting financial difficulties;

(v) substitution of credit or liquidity providers, ortheir failure to perform;

(vi) adverse tax opinions or events affecting the tax-exempt status of the Series 2009C Bonds;

(vii) modifications to rights of Series 2009C Bond holders;

(viii) optional, contingent or unscheduled Series 2009C Bond calls;

(ix) defeasances;

(x) release, substitution or sale of property securing repayment of the Series 2009C Bonds; or

(xi) rating changes.

(b) The Authority shall promptly file a notice of such occurrence with each National Repository or the MSRB and with the State Repository, or may request that the Dissemination Agent provide such notice. If so requested by the Authority, the Dissemination Agent will promptly file a notice of such occurrence as set forth above. Notwithstanding the foregoing, notice of Material Events described in Section 3(a)(viii) and (2)need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Owners of affected Series 2009C Bonds pursuant to the Bond Resolution.

Section 4. Filing. The Authority or the Dissemination Agent may use Disclosure USA, any successor thereto, or any other conduit entity recognized, authorized or approved by the United States Securities and Exchange Commission (a "Central Post Office") for the submission of material event notices, Annual Reports, or any other filing required by this Disclosure Undertaking. Submission of a notice of or report to a Central Post Office, including the Texas Municipal Advisory Council (the "MAC") as provided at www.disclosureusa.org unless the United States Securities and Exchange Commission has withdrawn the

F-3 interpretative advice in its letter to the MAC dated September 7, 2004, shall be deemed to satisfy the obligations hereunder with respect to that notice or report.

Section 5. Dissemination Agent. The Authority may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. In the event that a Dissemination Agent is appointed, the Dissemination Agent shall assume the responsibilities of the Authority for filing information with National Repositories, the MSRB or any State Repository pursuant to this Disclosure Undertaking, with copies to the Authority. The appointment of a Dissemination Agent shall be effective upon the delivery to the Authority of written acceptance of such designation in substantially the form set forth in Exhibit C hereto.

Section 6. Termination of Reporting Obligation. The respective obligations of the Authority and The Board under this Disclosure Undertaking shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Series 2009C Bonds. If a party's obligations hereunder are assumed in full by some other entity, such other entity shall be responsible for compliance with this Disclosure Undertaking in the same manner as if it were the signatory hereto, and the assignor shall have no further responsibility hereunder. If such termination or assignment and assumption occurs prior to the final maturity of the Series 2009C Bonds, notice of such termination or assignment and assumption shall be given in the same manner as for a Material Event under Section 3(b).

Section 7. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Undertaking, the Authority, The Board and the Dissemination Agent, if any, may amend this Disclosure Undertaking (and the Dissemination Agent shall not unreasonably refuse to execute any amendment so requested by the Authority) and any provision of this Disclosure Undertaking may be waived, provided that (a) Bond Counsel or other counsel experienced in federal securities law matters provides the parties to this is closure Undertaking with its opinion that the undertakings contained herein, as so amended or after giving effect to such waiver, are in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Disclosure Undertaking; (b) if the amendment or waiver relates to Section 2(a) or 3(a), it may be made only in connection with a change in circumstances that arises from a change in law or legal requirements, or change in the identity, nature or status of an obligated person with respect to the Series 2009C Bonds, or the type of business conducted; and (c) the amendment or waiver is either (i) approved by the Owners of the Series 2009C Bonds in the same manner as provided in the Bond Resolution for amendments of the Bond Resolution with consent of the Owners or (ii) does not in the opinion of Bond Counsel materially impair the interests of the Owners or Beneficial Owners of the Series 2009C Bonds.

In the event of any amendment or waiver of a provision of this Disclosure Undertaking, such amendment or waiver shall be described in the next Annual Report, which shall include a narrative explanation of the reason for the amendment or waiver and its impact on such Annual Report. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements: (a) notice of such change shall be given in the same manner as for a Material Event under Section 3(b) and (b) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

Section 8. Additional Information. Nothing in this Disclosure Undertaking shall be deemed to prevent the Board or the Authority from disseminating any other information, using the means of dissemination set forth in this Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Undertaking. If the Board or the Authority chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is specifically required by this Disclosure Undertaking, neither the Board nor the Authority shall have any obligation under this Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event.

Section 9. Noncompliance. In the event of a failure of the Board, the Authority or the Dissemination Agent, if any, to comply with any provision of this Disclosure Undertaking, any Beneficial Owner of the Series 2009C Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Board, the Authority or the Dissemination Agent, if any, as the case may be, to comply with its obligations under this Disclosure Undertaking. Noncompliance with the provisions of this Disclosure Undertaking shall not be deemed an Event of Default under the Bond Resolution or the Pledge Agreement, and the sole remedy under this Disclosure Undertaking in the event of any failure of the Authority or the Dissemination Agent, if any, to comply with this Disclosure Undertaking shall be an action to compel performance.

Section 10. Notices. Any notices or communications to or among any of the parties referenced in this Disclosure Undertaking may be given as follows:

(a) With respect to the Authority:

Kansas Development Finance Authority Suite 202 555 South Kansas Avenue Topeka, KS 66603 Attention: President;

with a copy to the Authority's General Counsel at the same address

(b) With respect to THE BOARD:

Kansas Board of Regents 1000 S.W. Jackson, Suite 520 Topeka, KS 66612 Attention: General Counsel

(c) With respect to any Dissemination Agent, at the address set forth on the acceptance of such Dissemination Agent (in the form attached as Exhibit C hereto).

Any person may, by written notice to the other persons listed above, designate a different address to which subsequent notices or communications should be sent. Any such different address shall be included in the next Annual Report.

Section 11. Beneficiaries. This Disclosure Undertaking shall inure solely to the benefit of the parties hereto and Beneficial Owners from time to time of the Series 2009C Bonds and shall create no rights in any other Person.

Section 12. Severability. If any provision in this Disclosure Undertaking shall be invalid, illegal or unenforceable, .the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 13. Governing Law. This Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State and any suits and actions arising out of this Disclosure Undertaking shall be instituted in a court of competent jurisdiction in the State.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK] Section 14. Counterparts. This Disclosure Undertaking may be executed in several counter-parts, each of which shall be an original and all of which shall constitute but one and the same instrument.

KANSAS DEVELOPMENT FINANCE AUTHORITY

By: Rebecca E. Floyd, Executive Vice President

"THE AUTHORITY"

WFASig page - CDU]

F-6 Section 14. Counterparts. This Disclosure Undertaking may be executed in several counter-parts, each of which shall be an original and all of which shall constitute but one and the same instrument.

KANSAS BOARD OF REGENTS

(SEAL) By: Donna Shank, Chair ATTEST:

Reginald L. Robinson, President and CEO

"THE BOARD"

[BOR Sig page - CDU] EXHIBIT A TO CONTINUING DISCLOSURE UNDERTAKING

NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT

Name of Issuer: Kansas Development Finance Authority (the "Authority")

Name of Bond Issue: $20,000,000 Kansas Development Finance Authority Revenue Bonds (Kansas Department of Administration -- Kansas Board of Regents - Postsecondary Educational Institution Infrastructure Finance Program, Series 2009C, dated March 31,2009 (the "Series 2009C Bonds")

Name of Obligated Person: Kansas Department of Administration

Date of Issuance: March 3 1,2009

NOTICE IS HEREBY GIVEN that the Obligated Person has not provided an Annual Report with respect to the above-named Series 2009C Bonds as required by the Continuing Disclosure Undertaking dated as of the Date of Issuance. The Obligated Person anticipates that the Annual Report will be filed by

Dated

KANSAS DEVELOPMENT FINANCE AUTHORITY/[DISSEMINATIONAGENT]

[cc: Issuer] EXHIBIT B

Nationally Recognized Municipal Securities Information Repositories

Until July 1,2009

Bloomberg Municipal Repository 100 Business Park Drive Skillman, New Jersey 08558 Phone: (609) 279-3225 Fax: (609) 279-5962 http://www.bloomberg.com/markets/rates/ municontacts.htm1 E-Mail: [email protected]

DPC Data Inc. One Executive Drive Fort Lee, NJ 07024 Phone: (201) 346-0701 Fax: (201) 947-0107 http://www.MuniFILINGS.com E-Mail: [email protected]

Interactive Data Pricing and Reference Data, Inc. Attention: NRMSIR 100 William Street, 15fi Floor New York, New York 10038 Phone: (212) 771-6999; (800) 689-8466 Fax: (2 12) 77 1-7390 http://www.interactivedata-prd.com E-Mail: [email protected]

Standard & Poor's Securities Evaluations, Inc . 55 Water Street 45th Floor New York, NY 10041 Phone: (212) 438-4595 Fax: (212) 438-3975 www.disc1osuredirectory.standardandpoor s.com1 E-Mail: [email protected]

Beginning July 1,2009

Municipal Securities Rulemaking Board (MSRB): http://emma.msrb.org/ Any notices to or filings with the National Repositories and the State Repository, if any, may be effected by sending the notice or filing to the Central Post Office, currently, Disclosure USA, in accordance with its published procedures, for further submission by Disclosure USA to the Repositories, as follows:

For electronic submissions: www.DisclosureUSA.org EXHIBIT C TO CONTINUING DISCLOSURE AGREEMENT

ACCEPTANCE OF DISSEMINATION AGENT

Name of Issuer: Kansas Development Finance Authority (the "Authority")

Name of Bond Issue: $20,000,000 Kansas Development Finance Authority Revenue Bonds (Kansas Department of Administration -- Kansas Board of Regents - Postsecondary Educational Institution Infrastructure Program, Series 2009C, dated March 31,2009 (the "Series 2009C Bonds")

Dissemination Agent:

Notice Address of Dissemination Agent:

The Dissemination Agent set forth above, having been duly appointed by the Authority to act in the capacity of Dissemination Agent pursuant to the Continuing Disclosure Undertaking to which this acceptance is attached, hereby accepts such duties and responsibilities set forth therein.

Dated

[DISSEMINATION AGENT]

BY Y as Dissemination Agent (THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX G

FORM OF OPINION OF BOND COUNSEL

Kansas Development Finance Authority Morgan Stanley & Co. Incorporated Topeka, Kansas New York, New York

Kansas Board of Regents Topeka, Kansas

Re: Kansas Development Finance Authority Revenue Bonds (Kansas Board of Regents -- Postsecondary Educational Institution Infrastructure Program), Series 2009C (the "Series 2009C Bonds")

We have acted as Bond Counsel in connection with the issuance by the Kansas Development Finance Authority (the "Authority") of the above-referenced Series 2009C Bonds. The Series 2009C Bonds have been authorized and issued pursuant to the Constitution and laws of the State of Kansas, including K.S.A. 74-8901 et seq., K.S.A. 76-7,116 et seq., as amended and supplemented (collectively, the "Act"), and Bond Resolution No. 244 of the Authority, adopted February 21,2008, as supplemented by Supplemental Bond Resolution No. 244-A of the Authority, adopted March 5,2009 (the "Bond Resolution").

We have examined the law and such certified proceedings and other documents as we deem necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. Capitalized terms contained herein shall have the meanings ascribed thereto in the Bond Resolution.

Based upon the foregoing, we are of the opinion, under existing law, as follows:

1. The Series 2009C Bonds are in proper form and have been duly authorized and issued in accordance with the Act.

2. The Series 2009C Bonds are valid and legally binding special obligations of the Authority, payable solely and only from, and secured as to the payment of principal of, redemption premium, if any, and interest on the Series 2009C Bonds by a pledge of, the Trust Estate under the Bond Resolution. The principal of, redemption premium, if any, and the interest on the Series 2009C Bonds shall not be a debt or general obligation of the Authority, the Board, the State or any municipal corporation or political subdivision thereof, and neither the principal of, redemption premium, if any, and the interest on the Series 2009C Bonds, nor any judgment thereon or with respect thereto, are payable in any manner from unlimited tax revenues of any kind or character. Payment of the principal of, redemption premium, if any, and the interest on the Series 2009C Bonds is subject to annual appropriations by the Kansas Legislature. The Series 2009C Bonds shall not constitute an indebtedness or a pledge of the faith and credit of the Authority, the Board, the State or any municipal corporation or political subdivision thereof, within the meaning of any constitutional or statutory limitation or restriction.

3. The Pledge Agreement has been duly authorized and executed by the Authority, and constitutes a valid and legally binding obligation of the Authority in accordance with its terms. 4. The interest on the Series 2009C Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. The opinions set forth in this paragraph are subject to the condition that the Authority and the Board comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be satisfied subsequent to the issuance of the Series 2009C Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Authority and the Board have covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Series 2009C Bonds in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2009C Bonds. The Series 2009C Bonds have not been designated as "qualified tax-exempt obligations" for purposes of Section 265(b) of the Code.

5. The interest on the Series 2009C Bonds is exempt from all Kansas state, county and municipal taxes, including income, inheritance and property taxes.

We express no other opinion regarding federal tax consequences arising with respect to the Series 200961 Bonds.

It is to be understood that the rights of the owners of the Series 2009C Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent applicable, and that their enforcement may be subject to the exercise of judicial discretion in appropriate cases.

Very truly yours, APPENDIX H

LIST OF APPROVED PROJECTS

Series 2008A Bonds Sumnzary by Institution of Authorized Nclnzber of Projects, Authorized Loans, and Loans Disbursed February 1,2009

Series 2009C Borzds

Regents Approved Name of Total Loan Participating Institution Project Description Project Cost Amount Replace air conditioning unit for server and switch room at the El Dorado campus, to enable maintenance of appropriate humidity and Butler Community College temperature levels. $78,714 $78,714 Remodel existing Andover classroom space into a Butler Community College flexible, high technology learning space. 13,686 13,686 Remodel existing El Dorado classroom space into a

. Butler Community College flexible, high technology learning space. 12,896 12,896 Add a safe room to Facilities Management building Butler Community College to protect staff in the event of severe weather. 54,963 54,963 Replace a portion of the roof on the 5000 Building Butler Community College in Andover. 62,890 62,890 Replace building entrance locks with electronic proximity locks to allow timely lock-down in the Butler Community College event of a campus threat. 22,800 22,800 Replace concrete aprons around Buildings 200, Butler Community College 300, & 400 on the El Dorado campus. 10,650 10,650 Remodel existing space to create a composites area in Building 5000 at Andover, for the industrial Butler Community College technology program. 109,181 109,181 Remodel existing space for a laboratory for the Real-Time Reporting area in Building 5000 at Butler Community College Andover. 30,375 30,375 Butler Community College Replace floor tile in the 800 Building in El Dorado. 2,000 2,000 Remodel existing nursing classroom space in the 1500 Building at El Dorado to provide a flexible, high-tech environment for enhanced student Butler Community College learning and engagement. 18,145 18,145 Replace 1980s HVAC control panels in 6 buildings on the El Dorado campus. Replacement parts for Butler Community College the existing panels are no longer available. 34,868 34,868 Remove and replace asbestos-containing tile in the Butler Community College 100 Building on the El Dorado campus. 4,585 4,585 Remove and replace moist, deteriorated pipe insulation in the 300 Building on the El Dorado Butler Community College campus. 5,000 5,000 Remodel Andover's 5000 Building, converting unsuitable space into additional classroom space for two key Career & Tech Ed programs. Project Butler Community College area 9,450 sq. feet. 565,110 565,110 Replace and expand the capacity of the HVAC system for the 100 building on the El Dorado Butler Community College campus. 426,060 426,060 Butler County Community College Totals $1,451,923 $1,451,923

Campus housing - reconstruction of foundation, upgrade utilities, 20 student apartments, install fire Cloud County Community sprinklers and ADA-compliant bedrooms, College bathrooms, and apartments. 4,080 sq. ft. 415,786 415,786 Remodel Student Commons area to provide office space for Community Ed staff, activities, residence Cloud County Community life and auxiliary services; upgrades to HVAC, College lighting, and floor coverings 124,752 124,752 Remodel public restrooms, providing for better Cloud County Community accessibility--replace toilet partitions, sink, College vanities, mirrors, ceiling, wall, and floor coverings. 49,622 49,622 Campus housing upgrades - bathrooms, kitchens, Cloud County Community entrance doors, windows, wall and floor coverings, College and lighting. 210,000 210,000 Replacement of 8 sets of exterior and 2 sets of Cloud County Community interior doors on the upper level of the main College campus building and student commons level. 28,944 28,944 Cloud County Community Replace roof on entire main campus building; College approximately 65,824 square feet. 152,000 152,000 Cloud County Community College Totals $981,104 $981,104 Additional funding to complete project authorized in year one's loans--demolish abandoned science labs and remodel and bring into code compliance the Science-Math building. The additional costs Dodge City Community are for unanticipated needs discovered during the College construction phase. 57,860 57,860 Complete rehabilitation of the Science-Math building--areas that were not included in year one's project. This phase of the project includes replacement of windows, fixed lecture hall desks and chairs, floor and window coverings in 5 Dodge City Community classrooms, and adjustment of the walkways and College tiered floors in the lecture hall. 78,000 78,000 Dodge City Community Replace north ADA entrance vestibule and doors College on the Allied Health Building. 14,000 14,000 Create sufficient ADA-accessible parking for 3 Dodge City Community academic buildings - Allied Health, Science-Math, College and Science Labs. 49,000 49,000 Replace the HVAC system in the Fine Arts Dodge City Community Building and retrofit the north entrance of the College building to be ADA compliant. 9,700 9,700 Additional funding to complete project authorized in year one's loans--adding ADA compliant bathrooms to the Computer Lab Building. This additional funding is needed for construction costs over the estimated budget amount, a required replacement of the fire alarm system, installation of lever locks throughout the building, and an Dodge City Community electrical service upgrade. None of these expenses College was contemplated in the original project request. 68,281 68,281 Dodge City Community College Totals $276,841 $276,841

Renovation of Warren Fouse Science and Math Garden City Community Building, to include ADA, life-safety, and energy College efficiency improvements. 2,216,645 2,216,645 Garden City Community College Totals $2,216,645 $2,216,645

Upgrades to LSU student lounge, faculty lounge, and cafeteria areas, including electrical upgrades, Highland Community fire safety, lighting, flooring, and College paintinglrenovating damaged wall areas. 124,000 124,000 Administration building repair, including replacement of support walls for front entry stairway, repair and resurface of concrete floor in Highland Community IT office area, replace damaged and crumbling College areas of exterior courtyard. 67,600 67,600 Highland Community Upgrade electrical and replace sound system in College Culbertson Auditorium 33,600 33,600 Highland Community Fire safety upgrade to Allen Field House, where College there is currently no fire safety system. 8,700 8,700 Highland Community College Replace inoperable furnace in Yost Hall. 7,200 7,200 Highland Community College Totals $241,100 $241,100

Expansion and renovation of existing Physical and Biotechnology Science Building, to include new teaching and lecture labs, faculty offices and student support spaces, new HVAC and plumbing systems, additional and upgrades to electrical Hutchinson Community system, data cabling and wireless system access for College computers, and ADA and code compliance. 7,330,737 3,903,520 Davis Hall, built in 1963, needs upgrading and Hutchinson Community repair of the roof system and sealing of the College building envelope. 275,000 275,000 Hutchinson Community College Totals $7,605,737 $4,178,520

Renovation of 40,499 sq. feet, one-story steel frame building, within the city limits of Independence, to house Cosmetology, ABEfGED, and Allied Health programs currently residing in unsuitable, non-ADA compliant, leased spaces. Independence Community Plans also include a Senior Citizens Center for College community use. 1,550,000 1,500,000

Architectural, engineering, and construction services for an addition to and renovation of Johnson County Community Billington Libraryon the Overland Park campus. College Prqject is 132,200 sq. feet on 3 floors. 15,000,000 2,000,000 Architectural, engineering, and construction services for additional warehouse space for the Johnson County Community Student Center bookstore on the Overland Park College campus. Project is 5,000 sq. feet. 2,000,000 2,000,000 Design, bid, and construction services for replacement of roofs on five buildings on the Johnson County Community Overland Park campus. Total of 309,497 sq. feet College of roof space for the five buildings. 1,293,382 1,293,382 Johnson County Community College Totals $18,293,382 $5,293,382

Re-roofing Fine Arts, Administration, Science, and Kansas City Kansas Social Science buildings of the Kansas City Community College campus on State Avenue. 1,100,000 1,100,000 Additional funding to complete project authorized in year one's loans--replace roofing on the Community Education, Library, Allied Health, and Print Shop buildings. The additional costs were incurred when the lightweight concrete sub-roofing Kansas City Kansas was found to be damaged beyond repair and had to Community College be replaced. 77,138 77,138 Northwest Kansas Technical Install clean air collection systems in Carpentry College and Welding Technology Shops 40,000 40,000 Northwest Kansas Technical Wash sink replacements in Automotive, Collision College Repair, and Welding Technology Shops 10,000 10,000 Northwest Kansas Technical Sidewalk replacements at Carpentry, Heating & College Cooling, and Cosmetology Buildings 28,000 28,000 Northwest Kansas Technical College Totals $ 98,261 $98,261

Remodel upper commons and entrance to the main classroom building on the Pratt campus, including replacing worn out tile, electrical fixtures, stair railing, replacing a temporary wall with entry Pratt Community College doors, and repainting. 85,000 85,000 Replace switch gear and motor control for the Pratt Community College HVAC equipment in the main classroom building. 50,000 50,000 Replace unit ventilators and fan coil units in the Pratt Community College main classroom building. 250,000 250,000 Replace carpet in the hallways of the main Pratt Community College classroom building. 75,000 75,000 Pratt Community College Totals $460,000 $460,000

South and east parking lots on the Technical Seward County Community School side of the college, between Buildings TA, College TB, and TD of the technical campus 700,000 700,000 Seward County Community Replace entrance doors on Buildings T, TA, TB, College and TD of the technical campus. 130,000 130,000 Seward County Community Update the fire alarm system in the technical College campus buildings. 57,000 57,000 Seward County Community College Install an exhaust system in the Welding Shop. 90,000 90,000 Seward County Community Repair plumbing in Buildings T, TA, TB, and TD College of the technical campus. 45,000 45,000 Replace or install emergency, classroom, and exit Seward County Community lighting in Buildings T, TA, TB, and TD of the College technical campus. 62,000 62,000 Seward County Community College Greenhouse addition to the Agriculture Building. 50,000 50,000 Seward County Community Restrooms retrofitlrehabilitation in Buildings TB College and TD of the technical campus. 110,000 110,000 Seward County Community College Totals $1,244,000 $1,244,000

All Institutions Totals $37,596,131 $20,000,000

Note: This list does not include applications forprojects for which no loan was approved by the Board.