KTA: Where the money goes Although larger and ultimately more complex than an average household budget, KTA’s CFO Carl Compton breaks down the Turnpike’s annual report to help simplify KTA’s financial statements and explain our financial requirements*.

For the sake of this example, we’ll use easy, round numbers. These are not actual income and expenses.

* These requirements are set forth by the KTA’s bond indenture.

The KTA must have 30% of operating budget in the bank at any given time. (Think of this as having money to pay the electric, water bills, buy gas, etc.)

We must also pay the bondholders, approximately $2 million monthly.(This is like paying your mortgage; part goes to pay principal, part to interest.)

Money is set aside to repair or replace the roadway. (Your house needs to be painted or the heating and air conditioning needs to be repaired.)

KTA must also set aside enough money to meet the needs recommended by KTA’s Chief Engineer to cover maintenance for an entire year, about $22 mil-lion. So, if money has been used out of that fund, it must be replaced from that original monthly $7.5 million income.(Similar to your mortgage company requiring insurance on your home, the bond indenture requires that KTA have money available to repair the road.)

If there is any money left over, it gets put into the General Fund. Or, if monthly revenue is insufficient to meet its monthly obligations, money from the General Fund is used to supplement monthly income. Money from the General Fund is what pays for large construction projects such as the recent Kansas River Bridg-es Replacement and Plaza Improvement Project or the current and future proj-ects to repair and replace bridge decks on many of the Turnpike’s 348 bridges.(This is like a family’s Savings Account. You set money aside for a large proj-ect such as a new roof. But, occasionally you have to dip into that fund to pay for a new washing machine.)

The Turnpike took in $7.5 million in monthly toll and other revenue. (For an average household, think of this as “Payday”.)

Income

Monthly Expenses

Carl Compton

Reading KTA’s financial statements The 2011 Financial Report can be found at www.ksturnpike.com/about/annual_report. Below is a snapshot of page 27, the Combining Statement of Revenues, Expenses and Changes in Net Assets.

Audit FS11 Scan 3-5-12.pdf 33 3/7/12 12:06 PMAudit FS11 Scan 3-5-12.pdf 34 3/7/12 12:06 PM

Toll revenue

Interestpaymentfor bonds

Operating budget

Chief Engineer repair/replace fund

General fund