Financial Statement for SFY 2023

10 JOHNSTON COUNTY AIRPORT AUTHORITY Smithfield , North Carolina Financial Statements For the Year Ended June 30 , 2023PageJOHNSTON COUNTY AIRPORT AUTHORITY Smithfield , North Carolina Year Ended June 30 , 2023 Board of Commissioners RS Butch Lawter , Jr , Chairman Patrick E Harris , Vice - Chairman Tony Braswell Ted G Godwin Fred J Smith , Jr Richard D Braswell April Stephens Airport Authority Board Members Ken Starling , Chairman John H Bullock , Jr , Vice - Chairman Bently Powell , Secretary Treasurer Edwin Aldridge , Jr Tim Stevens Ken Jones Dale ParkerPageJOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2023 Page s FINANCIAL SECTION INDEPENDENT AUDITORS ’ REPORT 1 - 3 MANAGEMENT DISCUSSION AND ANALYSIS 4 - 7 BASIC FINANCIAL STATEMENTS 1 Statements of Net Position 8 2 Statements of Revenues , Expenses and Changes in Fund Net Position 9 3 - 4 Statements of Cash Flows 10 - 11 NOTES TO THE FINANCIAL STATEMENTS 12 - 27 REQUIRED SUPPLEMENTARY INFORMATION Schedule of the Proportionate Share of the Net Pension Liability Asset - Local A - 1 Government Employees Retirement System 28 A - 2 Schedule of Contributions - Local Government Employees Retirement System 29 A - 3 Schedules of Changes in Total OPEB Liability and Related Ratios 30 SUPPLEMENTAL FINANCIAL DATA Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP - B - 1 Operating Fund 31 - 32 Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP – Airport B - 2 Construction – Construction Fund 33 COMPLIANCE SECTION 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 34 - 35 Report on Compliance With Requirements Applicable To Each Major State Program and Internal Control Over Compliance In Accordance With Applicable Sections of OMB Uniform Guidance and the State Single Audit Implementation Act 36 - 38 Schedule of Findings and Questioned Costs 39 Corrective Action Plan 40 Summary Schedule of Prior Audit Findings 41 C - 1 Schedule of Expenditures of Federal and State Awards 42PageFINANCIAL SECTIONPagePage pageNumber5Thompson , Price , Scott , Adams & Co , PA PO Box 398 1626 S Madison Street Whiteville , NC 28472 Telephone 910 642 - 2109 Fax 910 642 - 5958 Alan W Thompson , CPA R Bryon Scott , CPA Gregory S Adams , CPA Independent Auditors Report Board of County Commissioners and Authority Board Johnston County Airport Authority Smithfield , North Carolina Report on the Audit of Financial Statements Opinions We have audited the accompanying financial statements of the business - type activities of the Johnston County Airport Authority , a component unit of the Johnston County , North Carolina , as of and for the year ended June 30 , 2023 , and the related notes to the financial statements which collectively comprise the Authoritys basic financial statements as listed in the table of contents In our opinion , based upon our audit , the accompanying financial statements referred to above present fairly , in all material respects , the respective financial position of the business - type activities of the Johnston County Airport Authority as of June 30 , 2023 , and the respective changes in financial position and cash flows , where applicable , thereof and the respective budgetary comparison for the year then ended in accordance with accounting principles generally accepted in the United States of America Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America GAAS and the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report We are required to be independent of the Johnston County Airport Authority and to meet our ethical responsibilities , in accordance with the relevant ethical requirements relating to our audit We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions Responsibilities of Management for the Audit of the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America ; and for the design , implementation , and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement , whether due to fraud or error In preparing the financial statements , management is required to evaluate whether there are conditions or events considered in the aggregate , that raises substantial doubt about the Authoritys ability to continue as a going concern for the twelve months beyond the financial statement date , including any currently known information that may raise substantial doubt shortly thereafter Members 1 American Institute of CPAs - NC Association of CPAs - AICPA Division of FirmsPagePage pageNumber6Auditors Responsibilities for the Audit of Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement , whether due to fraud or error , and to issue an auditors report that includes our opinions Reasonable assurance is a high level of assurance but is not absolute assurance and therefore not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect material misstatement when it exists The risk of not detecting a material misstatement resulting from fraud is higher than the one resulting from error , as fraud may involve collusion , forgery , intentional omissions , misrepresentations , or the override of internal control Misstatements are considered material if there is a substantial likelihood that , individually or in the aggregate , they would influence the judgement made by a reasonable user based on the financial statements In performing and audit in accordance with GAAS and Government Auditing Standards we • exercised professional judgement and maintained professional skepticism throughout the audit • identify and assess the risks of material misstatements of the financial statements , whether due to fraud our error , and design and perform audit procedures responsible to those risks Such procedures include examining , on a test basis , evidence regarding the amounts and disclosures in the financial statements • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances , but not for the purpose of expressing an opinion on the effectiveness of the Johnston County Airport Authoritys internal control Accordingly , no such opinion is expressed • evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management , as well as evaluate the overall presentation of the financial statements • conclude whether , in our judgment , there are conditions or events , considered in the aggregate , that raise substantial doubt about the Johnston County Airport Authoritys ability to continue as a going concern for a reasonable period of time We are required to communicate with those charged with governance regarding among other matters , the planned scope and timing of the audit , significant audit findings , and certain internal control - related matters that we identify during the audit Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis on pages 4 through 7 , the Local Government Employees Retirement Systems Schedules of the Proportionate Share of the Net Pension Liability Asset and Contributions on pages 28 and 29 , respectively , and the Schedules of Changes in Total OPEB Liability and Related Ratios on page 30 be presented to supplement the basic financial statements Such information is the responsibility of management , although not a required part of the basic financial statements , is required by the Governmental Accounting Standards Board who considers it to be an essential part of the financial reporting for placing the basic financial statements in an appropriate operational , economic , or historical context We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America , which consists of inquiries of management about the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries , the basic financial statements , and other knowledge we obtained during our audit of the basic financial statements We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance 2PagePage pageNumber7Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Johnston County Airport Authoritys basic financial statements The budgetary schedules , as well as the accompanying Schedule of Expenditures of Federal and State Awards , as required by Title 2 US Code of Federal Regulations CFR Part 200 , Uniform Administrative Requirements , Cost Principles , and Audit Requirements for Federal Awards , and the State Single Audit Implementation Act , are presented for purpose of additional analysis and are not a required part of the basic financial statements Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures , including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves , and other additional procedures in accordance with auditing standards generally accepted in the United States of America by us In our opinion , based on our audit , the procedures performed as described above , the budgetary schedules , and the Schedule of Expenditures of Federal and State Awards are fairly stated , in all material respects , in relation to the basic financial statements as a whole Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated November 28 , 2023 on our consideration of the Johnston County Airport Authoritys internal control over financial reporting and on our tests of its compliance with certain provisions of laws , regulations , contracts , and grants 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 effectiveness of the Johnston County Airport Authoritys internal control over financial reporting or on compliance That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Johnston County Airport Authoritys internal control over financial reporting and compliance ____________________________________________ Thompson , Price , Scott , Adams & Co , PA Whiteville , NC November 28 , 2023 3PagePage pageNumber8Management’s Discussion and Analysis Johnston County Airport Authority , the Authority , a component unit of Johnston County , is a corporate body which operates the airport in Johnston County , North Carolina This is a narrative overview and analysis of the financial activities of the Authority for the fiscal year ended June 30 , 2023 We encourage readers to read the information presented here in conjunction with the additional information that we have furnished in the Authority’s financial statements , which follows this narrative Financial Highlights The assets and deferred outflows of Johnston County Airport Authority exceeded its liabilities and deferred inflows of ? resources at the close of the most recent fiscal year by 31,203,486 net position Of this amount , 1,284,904 unrestricted net position may be used to meet the government’s ongoing obligations to citizens and creditors The Authority’s total net position increased by 3,186,425 ? Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the Authority’s basic financial statements The Authority’s basic financial statements are comprised of two components 1 basic financial statements and 2 notes to the financial statements This report also contains other supplementary information that will enhance the reader’s understanding of the financial condition of the Authority Basic Financial Statements Financial Statements – These statements focus on the activities of the individual parts of the Authority’s government and provide both short and long - term information about the Authority’s financial status The financial statements are comprised of the following statements The Statements of Net Position presents information on all of the Authority’s assets , liabilities , and deferred inflows ? of resources with the difference between the two reported as net position Over time , increases and decreases in net position may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating The Statements of Revenue , Expenses and Changes in Fund Net Position presents information showing how the ? Authority’s net position changed during the most recent fiscal year All changes in net position 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 only result in cash flows in future fiscal periods eg , earned but unused vacation leave 4PagePage pageNumber9Notes to the Financial Statements – The notes are the next section of the financial statements The notes to the financial statements explain in detail some of the data contained in those statements Supplemental Financial Data In addition to the basic financial statements and accompanying notes , this report includes supplementary information concerning the Authority’s individual budgetary information These schedules are required to be presented by the North Carolina Local Government Commission Financial Statement Analysis As noted earlier , net assets may serve over time as a useful indicator of the Authority’s financial position In the case of the Authority , assets and deferred outflows exceeded liabilities and deferred inflows of resources by 31,203,486 at the close of the most recent fiscal year By far the largest portion of Authority’s net assets 10412 reflects its net investment in capital assets eg , land , buildings , machinery , and equipment The Authority uses these capital assets to provide services to citizens ; consequently , these assets are not available for future spending Although the Authority’s 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 from other sources , since the capital assets themselves cannot be used to liquidate these liabilities Johnston County Airport Authoritys Net Position 2023 2022 2021 Current and Other Assets 10,009,742 12,278,065 1,286,336 Capital Assets 32,488,598 26,321,322 22,398,254 Deferred outflows 308,593 340,753 260,109 Total Assets and Deferred Outflows 42,806,933 38,940,140 23,944,699 Long - term Liabilities 1,676,028 1,755,929 1,509,742 Other Liabilities 8,446,427 7,496,413 544,909 Deferred inflows 1,480,992 1,670,737 93,468 Total Liabilities and Deferred Inflows 11,603,447 10,923,079 2,148,119 Net Position Net investment in capital assets 32,488,390 26,321,322 22,398,254 Unrestricted 1,284,904 1,695,739 601,674 Total Net Position 31,203,486 28,017,061 21,796,580 Assets increased during the year by 3,898,953 because of an increase in capital assets from Fiscal Year 2022 to 2023 ? by 6,167,276 combined with an decrease in current assets and other assests of 2,268,323 mainly due to a decrease in unrestricted and restricted cash balances Liabilities increased during the year by 870,113 , primarily due to increases in accounts payable and a decrease ? Net position increased during the year by 3,186,425 , primarily due to the recognition of revenue related to several ? grants 5Page0Johnston County Airport Authoritys Changes in Net Position 2023 2022 2021 Operating Revenues 2,644,226 2,187,828 1,439,243 Operating Expenses 3,691,960 3,149,469 2,090,260 Net Income Loss from Operations 1,047,734 961,641 651,017 Nonoperating Revenue Expenses 4,006,920 2 22,854 445 Income Loss Before Contributions and Transfers 2,959,186 738,787 651,462 Capital Contributions 227,239 4 44,365 3,773,696 Contribution from Primary Government - 2 00,000 1 75,000 Change in Net Position 3,186,425 94,422 3,297,234 Net Position , Beginning of Year 28,017,061 28,111,483 18,499,346 Net Position , End of Year 31,203,486 28,017,061 21,796,580 Operating Revenue In fiscal year 2023 , total operating revenues were 2,644,266 , which equated to an increase from 2022 of 456,398 or 2086 This increase primarily resulted from a significant increase in fuel and oil sales of 379,127 or 2739 , combined with an increase in hangar lease rental revenue of 138,174 or 2012 Operating Expenses In fiscal year 2023 , total operating expenses were 3,691,960 which equated to an increase from 2022 of 542,491 or 1722 There was an increase in cost of sales due primarily to increased fuel costs , which increased 171,314 , or 1567 , combined with an increase in general operating expenses of 217,383 , or 3183 Capital Asset and Debt Administration Capital assets At the end of 2023 , the Authority had a total net investment in capital assets of 32,488,598 net of accumulated depreciation This investment in capital assets includes land , land improvements , buildings , equipment , construction in progress and right to use assets The total increase in the Authority’s investment in capital assets for the current fiscal year was 2343 Johnston County Airport Authoritys Capital Assets net of depreciation 2023 2022 2021 Land 9 00,216 9 00,216 9 00,216 Land Improvements 1 0,305,633 1 0,738,807 9 , 457,669 Clearing and Excavation 2 , 882,384 2 , 918,869 2 , 814,294 Buildings 4 , 223,068 4 , 342,465 4 , 604,213 Equipment 9 41,203 1 95,371 3 0,011 Vehicles 2 1,219 - - Construction in Process 1 3,214,593 7 , 225,594 4 , 591,851 Right to Use Assets - IT Subscription Agreements 282 - - Total 3 2,488,598 2 6,321,322 2 2,398,254 Long - term debt At June 30 , 2023 , the Authority had no bonded debt The Authoritys only outstanding debts were IT subscription agreements totaling 208 The Authority does not plan to incur any additional debt for planned renovation and expansion projects 6Page1Economic Factors and Next Year’s Budgets and Rates Economic Factors Significant economic indicators for the County are as follows Indicator Johnston County North Carolina Population Increase 2003 - 2023 730 272 Projected Population Increase 2023 - 2042 461 219 Average Unemployment Rate 2022 33 37 Per Capita Income 2022 49,672 58,109 Median Household Income 2022 66,026 60,516 Next Year’s Budget For fiscal year 2024 , the Airport budgeted a 44 increase in operating revenues as compared to fiscal year 2023 The largest budgeted revenue item for fiscal year 2024 is anticipated FAA Grants at approximately 19,957,500 Total budgeted operating expenditures for fiscal year 2024 have also increased slightly compared to fiscal year 2023 The 2024 budgeted expenditures is reflecting a decrease in operating costs and capital expenditures of approximately 335,000 and 65,000 , respectively , while relecting an increase in grant expenditures of 300,000 Requests for Information This financial report is designed to provide a general overview of the Johnston County Airport Authority’s finances for all those with an interest in the government’s finances Questions concerning any of the information provided in this report or request for additional financial information should be addressed to the Office of the Finance Director , Johnston County Airport Authority , PO Box 1049 , Smithfield , NC 27577 7Page2BASIC FINANCIAL STATEMENTSPage3Exhibit 1 JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA STATEMENTS OF NET POSITION June 30 , 2023 ASSETS June 30 , 2023 Current Assets Cash and Cash Equivalents 1 , 988,508 Trade Accounts Receivable , Net 210,833 Sales Tax Receivable 6 9,336 Lease Receivable 4 29,019 Interest Receivable 1 , 286 Inventories 5 1,082 Prepaid Expenses 2 9,509 Total Current Assets 2 , 779,573 Non - current Assets Restricted Cash and Cash Equivalents 6 , 419,874 Lease Receivable , Non - Current 810,295 Capital Assets , Net 3 2,488,598 Total Non - Current Assets 3 9,718,767 Total Assets 4 2,498,340 DEFERRED OUTFLOWS OF RESOURCES 3 08,593 LIABILITIES Current Liabilities Trade Accounts Payable 2 , 026,450 Customer Prepayments 2 , 380 Unearned Revenues 6 , 417,494 IT Subscription Liability - current 1 03 Total Current Liabilities 8 , 446,427 Noncurrent Liabilities IT Subscription Liability 1 05 OPEB Liability 1 , 378,041 Compensated Absences Payable 2 4,662 Net Pension Liability 2 73,220 Total Noncurrent Liabilities 1 , 676,028 Total Liabilities 1 0,122,455 DEFERRED INFLOWS OF RESOURCES 1 , 480,992 NET POSITION Net investment in capital assets 32,488,390 Unrestricted 1,284,904 Total Net Position 3 1,203,486 The notes to the financial statements are an integral part of this statement 8Page4Exhibit 2 JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA STATEMENTS OF REVENUES , EXPENSES , AND CHANGES IN FUND NET POSITION For the Year Ended June 30 , 2023 June 30 , 2023 Operating Revenues Fuel and Oil Sales 1 , 763,359 Aircraft Tiedowns 1 4,944 Vending 7 97 Hangar Leases and Rents 8 24,861 Miscellaneous 3 7,435 Service Fees 2 , 830 Total Operating Revenues 2 , 644,226 Operating Expenses Salaries and Employee Benefits 8 09,109 Cost of Sales 1 , 264,604 Operating 9 00,346 Depreciation and Amortization 7 17,901 Total Operating Expenses 3 , 691,960 Loss from Operations 1,047,734 Nonoperating Revenue Expenses NC SCIF Funding 3 , 942,809 Investment Earnings 6 4,113 Total Nonoperating Revenue Expenses 4 , 006,920 Income Loss Before Contributions and Transfers 2 , 959,186 Capital Contributions 2 27,239 Contribution from Primary Government - Change in Net Position 3 , 186,425 Net Position - Beginning of Year 2 8,017,061 Net Position - End of Year 3 1,203,486 The notes to the financial statements are an integral part of this statement 9Page5Exhibit 3 JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA STATEMENTS OF CASH FLOWS For the Year Ended June 30 , 2023 June 30 , 2023 Cash Flows from Operating Activities Cash Received from Customers 2 , 738,126 Cash Paid for Goods and Services 507,199 Cash Paid to Employees 781,718 Unearned Revenues 942,809 Net Cash Provided By Used in Operating Activities 5 06,400 Cash Flows from Noncapital Financing Activities Operating Transfer from Primary Government - Net Cash Provided By Used in Noncapital Financing Activities - Cash Flows from Capital and Related Financing Activities Acquisition of Capital Assets 6,885,177 IT Subscription Agreements Issued 3 16 Principal paid on IT Subscription Agreements 108 Grant Fundings 3 , 942,809 Capital Contributions 2 73,922 Net Cash Provided by Used in Capital and Related Financing Activities 2,668,348 Cash Flows from Investing Activities Investments Earnings 6 3,908 Net Increase Decrease in Cash 2,098,040 Cash - Beginning of Year 1 0,506,422 Cash - End of Year 8 , 408,382 The notes to the financial statements are an integral part of this statement 10Page6Exhibit 4 JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA STATEMENTS OF CASH FLOWS For the Year Ended June 30 , 2023 June 30 , 2023 Reconciliation of Operating Loss to Net Cash Provided By Used in Operating Activities Operating Income Loss 1,047,734 Adjustment to Reconcile Operating Loss to Net Cash Provided By Used in Operating Activities Depreciation 7 17,901 Increase decrease in trade accounts receivable 109,313 Increase decrease in sales tax receivable 49,834 Increase decrease in lease receivable 2 59,791 Increase decrease in inventories 2 4,698 Increase decrease in prepaid expenses 1,538 Increase decrease in deferred outflows of resources for pensions 80,816 Increase decrease in deferred outflows of resources for OPEB 1 12,977 Increase decrease in trade accounts payable 1 , 899,464 Increase decrease in customer prepayments 6,744 Increase decrease in unearned Revenues 942,809 Increase decrease in IT subscription liabilities 1 08 Increase decrease in deferred inflows of resources for pensions 100,540 Increase decrease in deferred inflows of resources for OPEB 1 75,776 Increase decrease in deferred inflows of resources for leases 264,981 Increase decrease in net pension liability 2 02,615 Increase decrease in net OPEB liability 278,056 Increase decrease in compensated absences 4,565 Total Adjustments 1 , 554,134 Net Cash Provided By Used in Operating Activities 5 06,400 The notes to the financial statements are an integral part of this statement 11Page7JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2023 Note 1 – Summary of significant accounting policies The accounting policies of the Johnston County Airport Authority , North Carolina the “ Authority ” conform to accounting principles generally accepted in the United States of America as applicable to governmental units The following is a summary of the more significant accounting policies Reporting entity - The Authority , a component unit of Johnston County , is a corporate body which operates the airport in Johnston County , North Carolina The County’s governing body appoints the Authority’s board members Government - wide financial statements - The government - wide financial statements ie , the statement of net position and the statement of changes in net position report information on all of the activities of the Authority For the most part , the effect of inter - fund activity has been removed from these statements The Authority does not have any governmental activities , which rely to a significant extent on property taxes and intergovernmental revenue sources Likewise , the Authority does not have any component units The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues Direct expenses are those that are clearly identifiable with a specific function or segment Program revenues include 1 charges to customers or applicants who purchase , use , or directly benefit from goods , services , or privileges provided by a given function or segment and 2 grants and contributions that are restricted to meeting the operations or capital requirements of a particular function or segment Measurement focus , basis of accounting , and financial statement presentation - The government - wide 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 or related cash flows Intergovernmental appropriations are recognized as revenues in the year for which they are appropriated by the other government Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met Operating revenues , such as charges for services , result from exchange transactions associated with the principal activity of the Authority Exchange transactions are those in which each party receives and gives up essentially equal values Budgetary data - The Authority’s budget is adopted as required by the North Carolina General Statutes An annual budget is adopted and all annual appropriations lapse at the fiscal - year end The budget is prepared using the modified accrual basis of accounting Expenditures may not legally exceed appropriations at the departmental level The Authoritys Manager is authorized to transfer appropriations , without the governing board’s approval , within a department up to 5,000 ; however , any revisions that alter total expenditures of any department or exceed 5,000 must be approved by the governing board During the year several amendments to the original budget were necessary , the effects of which were not material A budget calendar is included in the North Carolina General Statutes which prescribes the last day on which certain steps of that budget procedure are to be performed The following schedule lists the tasks to be performed and the date by which each is required to be completed June 1 - The budget and the budget message shall be submitted to the governing board The public hearing on the budget shall be scheduled at this time July 1 - The budget ordinance shall be adopted by the governing board 12Page8JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2023 Deposits - All deposits of the Authority are made in board - designated official depositories and are secured as required by State law GS 159 - 31 The Authority may designate , as an official depository , any bank or savings association whose principal office is located in North Carolina The Authority may also establish time deposits in the form of NOW accounts , SuperNOW accounts , money market accounts , and certificates of deposit Investments - State law GS 159 - 30 c authorizes the Authority to invest in obligations of the United States or obligations fully guaranteed both as to principal and interest by the United States ; obligations of the State of North Carolina ; bonds and notes of any North Carolina local government or public authority ; obligations of certain non - guaranteed federal agencies ; certain high quality issues of commercial paper and bankers ’ acceptances ; and the North Carolina Capital Management Trust Government Portfolio “ NCCMT ” , an SEC - registered 2a - 7 external investment pool , is measured at amortization cost , which approximates fair value , and is the NCCMTs share price Because the NCCMT Government Portfolio has a weighted average maturity of less than 90 days , it is presented as an investment with a maturity of less than 6 months The Authority did not have any investments at June 30 , 2023 Cash and cash equivalents – All cash is essentially demand deposits For purposes of reporting cash flows , cash includes cash on hand and deposits in banks Restricted Assets – The unexpended grant proceeds of the Authority are classified as restricted assets for the Authority because their use is completely restricted to the purpose for which the grant was originally awarded Customer prepayments held by the Authority before any services or goods are supplied are restricted to the service for which the prepayment was collected Trade accounts receivable – The Authority operates an airport facility and provides credit in the normal course of business to customers primarily in Johnston County , North Carolina The Authority performs ongoing credit evaluations of its customers and maintains the credit risk of specific customers , historical trends , and other various information Credit losses when realized have not been significant Allowance for uncollectible accounts – No provision has been provided for doubtful accounts since they are expected to be collected Lease receivable – The Authority’s lease receivables are measured at the present value of lease payments expected to be received during the lease term Under the lease agreement , the Authority may receive variable lease payments that are dependent upon the lessee’s revenue The variable payments are recorded as an inflow of resources in the period the payment is received A deferred inflow of resources is recorded for the lease The deferred inflow of resources is recorded at the initiation of the lease in an amount equal to the initial recording of the lease receivable The deferred inflow of resources is amortized on a straight - line basis over the term of the lease Capital assets – Capital assets are defined by the Authority as assets with an initial , individual cost of more than 5,000 and an estimated useful life in excess of two years Purchased or constructed capital assets are reported at cost or estimated historical cost Donated capital assets are recorded at their estimated fair value at the date of donation The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets ’ lives are not capitalized The Authoritys capital assets also include certain right to use assets These right to use assets arise in association with agreements where the Authority reports a lease only applies when the Authority is the lessee or agreements where the Authority reports an Information Technology IT subscription in accordance with the requirements of GASB 87 or GASB 96 , respectively 13Page9JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2023 The right to use IT subscription assets are initially measured at an amount equal to the initial measurement of the subscription liability plus any subscription payments made at the start of the subscription term , if applicable , plus capitalizable initial implementation costs at the start of the subscription term , less any incentives recevied from the IT subscription vendor at the start of the subscription term Subscription payments , as well as payments for capitalizable implementation costs made before the start of the subscription term should be reported as prepayment asset Such prepayments should be reduced by any incentives received from the same vendor before the start of the subscription term if a right of offset exists The net amount of the prepayments and incentives should be reported as an asset or liability , as appropriate , before the start of the subscription term at which time the amout should be included in the initial measurement of the subscription asset The right of use subscription assets should be amortized on a straight - line basis over the subscription term Capital assets of the Authority are depreciated using the straight - line method over the following useful lives Estimated Useful Description Lives Terminal building 50 Years Clearing and excavation 75 Years Runways , ramps and hangars 60 Years Aircraft parking ramp 60 Years Lighting 25 Years Fuel tanks and pumps 25 Years Equipment 5 - 10 Years Deferred outflows inflows of resources - In addition to assets , the statement of financial position will sometimes report a separate section for deferred outflows of resources This separate financial statement element , Deferred Outflows of Resources , represents a consumption of net position that applies to a future period and so will not be recognized as an expense or expenditure until then The Authority has two items that meet this criterion OPEB related deferrals and pension related deferrals In addition to liabilities , the statement of financial position will sometimes report a separate section for deferred inflows of resources The separate financial statement element , Deferred Inflows of Resources , represents an acquisition of net position that applies to a future period and so will not be recognized as revenue until then The Authority has three items that meets the criterion OPEB related deferrals , pension related deferrals and lease receivables Long - term obligations – Long - term debt and other long - term obligations are reported as liabilities in the statement of net position Compensated absences – The vacation policy of the Authority provides for the accumulation of up to thirty 30 days earned vacation leave with such leave being fully vested when earned An expense and a liability for compensated absences and the salary – related payments are recorded as the leave is earned The Authority’s sick leave policy provides for an unlimited accumulation of earned sick leave Sick leave does not vest , but any unused sick leave accumulated at the time of retirement may be used in the determination of length of service for retirement benefit purposes The Authority had no obligation for the accumulated sick leave until it is actually taken ; therefore , no accrual for sick leave has been made Net Position – Net position in the financial statements is classified as net investment in capital assets , restricted , and unrestricted Restricted net position represents constraints on resources that are either externally imposed by creditors , grantors , contributors , or law or regulation of other governments or imposed by law through state statute 14Page0JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2023 Use of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities , the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period Actual results could differ from those estimates Note 2 - Stewardship , Compliance , and Accountability None noted Note 3 - Deposits and investments Deposits - All of the Authoritys deposits are either insured or collateralized by using one of two methods Under the Dedicated Method , all deposits that exceed the federal depository insurance coverage level are collateralized with securities held by the Authoritys agent in the Authoritys name Under the Pooling Method , which is a collateral pool , all uninsured deposits are collateralized with securities held by the State Treasurers agent in the name of the State Treasurer Since the State Treasurer is acting in a fiduciary capacity for the Authority , these deposits are considered to be held by the Authoritys agent in the Authoritys name The amount of the pledged collateral is based on an approved averaging method for noninterest - bearing deposits and the actual current balance for interest - bearing deposits Depositories using the Pooling Method report to the State Treasurer the adequacy of their pooled collateral covering uninsured deposits The State Treasurer does not confirm this information with the Authority or the escrow agent Because of the inability to measure the exact amount of collateral pledged for the Authority under the Pooling method , the potential exists for under collateralization , and this risk may increase in periods of high cash flows However , the State Treasurer of North Carolina enforces strict standards of financial stability for each depository that collateralizes public deposits under the Pooling Method The Authority has no policy regarding custodial credit risk for deposits At June 30 , 2023 , the Authoritys deposits had a carrying amount of 8,408,137 and a bank balance of 8,988,558 Of the Authority’s bank balance , 500,000 was covered by FDIC and the excess deposits were collateralized under the pooling method At June 30 , 2023 , the Authority had 245 cash on hand Note 4 - Inventories Inventories are valued on the first - in first - out FIFO basis and consisted of the following Fuel 51,082 Note 5 - Lease receivables For the year ended 6 30 2023 , the financial statements include the adoption of GASB Statement No 87 , Leases The primary objective of this statement is to enhance the relevance and consistency of information about governments leasing activities This statement establishes a single model for lease accounting based on the principle that leases are financings of the right to use an underlying asset Under this Statement , a lessee is required to recognize a lease liability and an intangible right - to - use lease asset , and a lessor is required to recognize a lease receivable and a deferred inflow of resources For additional information , refer to the disclosures below The Airport has entered into a 18 month lease as Lessor for the use of Corporate Hangar 8 An initial lease receivable was recorded in the amount of 35,869 As of 06 30 2023 , the value of the lease receivable is 0 The lessee is required to make monthly fixed payments of 2,000 The lease has an implicit interest rate of 05140 The value of the deferred inflow of resources as of 06 30 2023 was 0 , and the Airport recognized lease revenue of 11,956 during the fiscal year 15Page1JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2023 The Airport has entered into a 42 month lease as Lessor for the use of Corporate Hangar 11 An initial lease receivable was recorded in the amount of 62,049 As of 06 30 2023 , the value of the lease receivable is 26,810 The lessee is required to make monthly fixed payments of 1,500 The lease has an implicit interest rate of 08930 The value of the deferred inflow of resources as of 06 30 2023 was 26,592 , and the Airport recognized lease revenue of 17,728 during the fiscal year The lessee had a termination period of 3 months as of the lease commencement The Airport has entered into a 18 month lease as Lessor for the use of Corporate Hangar 10 An initial lease receivable was recorded in the amount of 26,902 As of 06 30 2023 , the value of the lease receivable is 0 The lessee is required to make monthly fixed payments of 1,500 The lease has an implicit interest rate of 05140 The value of the deferred inflow of resources as of 06 30 2023 was 0 , and the Airport recognized lease revenue of 8,967 during the fiscal year The Airport has entered into a 30 month lease as Lessor for the use of hangar space An initial lease receivable was recorded in the amount of 130,937 As of 06 30 2023 , the value of the lease receivable is 26,518 The lessee is required to make monthly fixed payments of 4,300 The lease has an implicit interest rate of 07270 The value of the deferred inflow of resources as of 06 30 2023 was 26,187 , and the Airport recognized lease revenue of 52,375 during the fiscal year The lessee has 2 extension option s , each for 60 months On 07 01 2021 , Johnston County - Airport Fund entered into a 126 month lease as Lessor for the use of a multi - media conference facility An initial lease receivable was recorded in the amount of 64,631 As of 06 30 2023 , the value of the lease receivable is 56,992 The lessee is required to make monthly fixed payments of 600 The lease has an interest rate of 16810 The value of the deferred inflow of resources as of 06 30 2023 was 52,320 , and Johnston County - Airport Fund recognized lease revenue of 6,155 during the fiscal year The Airport has entered into a 36 month lease as Lessor for the use of Corporate Hangar 6 An initial lease receivable was recorded in the amount of 38,773 As of 06 30 2023 , the value of the lease receivable is 27,031 The lessee is required to make monthly fixed payments of 1,440 , based on the current schedule of rates and charges The lease has an implicit interest rate of 14540 The value of the deferred inflow of resources as of 06 30 2023 was 26,836 , and the Airport recognized lease revenue of 16,614 during the fiscal year On 10 01 2022 , Johnston County - Airport Fund entered into a 60 month lease as Lessor for the use of Corporate Hangar 3 An initial lease receivable was recorded in the amount of 94,787 As of 06 30 2023 , the value of the lease receivable is 69,365 The lessee is required to make monthly fixed payments of 1,440 , based on the current schedule of rates and charges The lease has an interest rate of 26620 The value of the deferred inflow of resources as of 06 30 2023 was 69,135 , and Johnston County - Airport Fund recognized lease revenue of 25,623 during the fiscal year The Airport has entered into a 51 month lease as Lessor for the use of hangar and ground space An initial lease receivable was recorded in the amount of 1,201,102 As of 06 30 2023 , the value of the lease receivable is 641,297 The lessee is required to make monthly fixed payments of 24,000 The lease has an implicit interest rate of 08930 The value of the deferred inflow of resources as of 06 30 2023 was 635,878 , and the Airport recognized lease revenue of 282,612 during the fiscal year The lessee has 1 extension option s , each for 120 months The lessee had a termination period of 6 months as of The Airport has entered into a 300 month lease as Lessor for the use of hangar space An initial lease receivable was recorded in the amount of 251,455 As of 06 30 2023 , the value of the lease receivable is 239,060 The lessee is required to make monthly fixed payments of 1,107 The lease has an implicit interest rate of 23500 The value of the deferred inflow of resources as of 06 30 2023 was 235,529 , and the Airport recognized lease revenue of 10,058 during the fiscal year The lessee has 1 extension option s , each for 120 months 16Page2JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2023 On 10 01 2022 , Johnston County - Airport Fund entered into a 24 month lease as Lessor for the use of Corporate Hangar 1 An initial lease receivable was recorded in the amount of 16,77640 As of 06 30 2023 , the value of the lease receivable is 10,57954 The lessee is required to make current monthly fixed payments of 72000 , based on the current schedule of rates and charges The lease has an interest rate of 31070 The value of the deferred inflow of resources as of 06 30 2023 was 10,485 , and Johnston County - Airport Fund recognized lease revenue of 6,291 during the fiscal year The Airport has entered into a 15 month lease as Lessor for the use of Corporate Hangar 1 An initial lease receivable was recorded in the amount of 8,981 As of 06 30 2023 , the value of the lease receivable is 0 The lessee is required to make monthly fixed payments of 800 The lease has an implicit interest rate of 03870 The value of the deferred inflow of resources as of 06 30 2023 was 0 , and the Airport recognized lease revenue of 2,137 during the fiscal year The lessee has 1 extension option s , each for 12 months On 12 01 2022 , Johnston County - Airport Fund entered into a 36 month lease as Lessor for the use of Corporate Hangar 9 An initial lease receivable was recorded in the amount of 88,097 As of 06 30 2023 , the value of the lease receivable is 71,420 The lessee is required to make monthly fixed payments of 2,560 , based on the current schedule of rates and charges The lease has an interest rate of 31210 The value of the deferred inflow of resources as of 06 30 2023 was 70,967 , and Johnston County - Airport Fund recognized lease revenue of 17,130 during the fiscal year On 07 01 2021 , Johnston County - Airport Fund entered into a 72 month lease as Lessor for the use of Johnston County Economic Development Office Space An initial lease receivable was recorded in the amount of 104,206 As of 06 30 2023 , the value of the lease receivable is 70,241 The lessee is required to make monthly fixed payments of 1,500 The lease has an interest rate of 12170 The value of the deferred inflow of resources as of 06 30 2023 was 69,471 , and Johnston County - Airport Fund recognized lease revenue of 17,368 during the fiscal year The lessee has 1 extension option s , each for 60 months Business - Type Activities Principal Payments Interest Payments Total Payments 2024 429,019 15,959 444,978 2025 384,773 10,951 395,724 2026 133,363 7,201 140,564 2027 49,732 6,032 55,764 2028 19,541 5,263 24,804 2029 - 2033 70,148 21,472 91,620 2034 - 2038 51,383 15,037 66,420 2039 - 2043 57,783 8,637 66,420 2044 - 2047 43,572 1,815 45,387 Total 1,239,314 92,367 1,331,681 In fiscal year 2023 , the Authority recognized 475,014 of lease revenue and 18,717 of interest revenue under these leases 17Page3JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2023 Note 6 - Capital assets Capital asset activity for the year ended June 30 , 2023 was as follows Beginning Decreases & Ending Balances Increases Adjustments Balances Capital assets not being depreciated Land and Easement 900,216 - - 900,216 Construction in progress 7,225,595 6,869,712 880,714 13,214,593 Total capital assets not being depreciated 8,125,811 6,869,712 880,714 14,114,809 Capital assets being depreciated Terminal building 5,224,058 - - 5,224,058 Runway , ramps and hangars 19,903,979 - - 19,903,979 Aircraft parking ramp 546,911 - - 546,911 Vehicles 74,025 25,982 - 100,007 Clearing and Excavation 3,143,823 24,059 - 3,167,882 Lighting and Equipment 2,118,267 845,822 - 2,964,089 Total capital assets being depreciated 31,011,063 895,863 - 31,906,926 Less accumulated depreciation for Terminal building 1,362,343 110,561 - 1,472,904 Runway , ramps and hangars 9,165,172 433,174 - 9,598,346 Aircraft parking ramp 66,162 8,835 - 74,997 Vehicles 74,025 4,763 - 78,788 Clearing and Excavation 224,954 60,544 - 285,498 Lighting and Equipment 1,922,896 99,990 - 2,022,886 Total accumulated depreciated 12,815,552 717,867 - 13,533,419 Total capital assets being depreciated , net 18,195,511 177,996 - 18,373,507 Capital assets being amortized Right to use assets IT Subscriptions - 316 - 316 - 316 - 316 Less accumulated amortization for - 34 - 34 IT Subscriptions Total accumulated amortization - 34 - 34 - 282 - 282 Total capital assets , net 2 6,321,322 7,047,990 880,714 3 2,488,598 18Page4JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2023 Construction Commitments The Authority has active construction projects as of June 30 , 2023 At year - end , the Authoritys commitments with contractors are as follows Spent to Remaining Project Date Commitment Corporate Hangars Design 72,676 - Drainage Improvements 100,962 - Apron Expansion 3,742,667 - Airport Master Plan 395,561 - New Fuel Farm 217,936 17,190 Runway Approach Clearing 178,553 22,447 Perimeter Fencing 84,858 - AWOS Critical Area Clearing 155,282 51,334 SFBO Facility Site Development and 3,460,046 1,102,770 Hangar Office P3 Total 8 , 408,541 1 , 193,741 Note 7 – Pension Plan and Postemployment Obligations A Local Government Employees ’ Retirement System Plan Description The Authority is a participating employer in the statewide Local Governmental Employees ’ Retirement System LGERS , a cost - sharing multiple - employer defined benefit pension plan administered by the State of North Carolina LGERS membership is comprised of general employees and local law enforcement officers LEOs of participating local governmental entities Article 3 of GS Chapter 128 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly Management of the plan is vested in the LGERS Board of Trustees , which consists of 13 members – nine appointed by the Governor , one appointed by the state Senate , one appointed by the state House of Representatives , and the State Treasurer and State Superintendent , who serve as ex - officio members The Local Governmental Employees ’ Retirement System is included in the Annual Comprehensive Financial Report ACFR for the State of North Carolina The State’s ACFR includes financial statements and required supplementary information for LGERS That report may be obtained by writing to the Office of the State Controller , 1410 Mail Service Center , Raleigh , North Carolina 27699 - 1410 , by calling 919 981 - 5454 , or at wwwoscncgov Benefits Provided LGERS provides retirement and survivor benefits Retirement benefits are determined as 185 of the member’s average final compensation times the member’s years of creditable service A member’s average final compensation is calculated as the average of a member’s four highest consecutive years of compensation Plan members are eligible to retire with full retirement benefits at age 65 with five years of creditable service , at age 60 with 25 years of creditable service , or at any age with 30 years of creditable service Plan members are eligible to retire with partial retirement benefits at age 50 with 20 years of creditable service or at age 60 with five years of creditable service age 55 for firefighters Survivor benefits are available to eligible beneficiaries of members who die while in active service or within 180 days of their last day of service and who have either completed 20 years of creditable service regardless of age 15 years of creditable service for firefighters and rescue squad members who are killed in the line of duty or have completed five years of service and have reached age 60 Eligible beneficiaries may elect to receive a monthly Survivor’s Alternate Benefit for life or a return of the member’s contributions The plan does not provide for automatic postretirement benefit increases Increases are 19Page5JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2023 Contributions Contribution provisions are established by General Statute 128 - 30 and may be amended only by the North Carolina General Assembly Authority employees are required to contribute 6 of their compensation Employer contributions are actuarially determined and set annually by the LGERS Board of Trustees The Authority’s contractually required contribution rate for the year ended June 30 , 2023 , was 1214 for general employees , actuarially determined as an amount that , when combined with employee contributions , is expected to finance the costs of benefits earned by employees during the year Contributions to the pension plan from the Authority were 54,388 for the year ended June 30 , 2023 Refunds of Contributions – Authority employees who have terminated service as a contributing member of LGERS , may file an application for a refund of their contributions By state law , refunds to members with at least five years of service include 4 interest State law requires a 60 day waiting period after service termination before the refund may be paid The acceptance of a refund payment cancels the individual’s right to employer contributions or any other benefit provided by LGERS Pension Liabilities , Pension Expense , and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30 , 2023 , the Authority reported a liability of 273,220 for its proportionate share of the net pension liability The net pension liability was measured as of June 30 , 2022 The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31 , 2021 The total pension liability was then rolled forward to the measurement date of June 30 , 2022 utilizing update procedures incorporating the actuarial assumptions The Authority’s proportion of the net pension asset was based on a projection of the Authority’s long - term share of future payroll covered by the pension plan , relative to the projected future payroll covered by the pension plan of all participating LGERS employers , actuarially determined At June 30 , 2022 measurement date , the Authority’s proportion was 00484 , which was an increase of 00002 from its proportion measured as of June 30 , 2021 For the year ended June 30 , 2023 , the Authority recognized pension expense of 75,646 At June 30 , 2023 , the Authority reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience 11,773 1,154 Changes of assumptions 27,261 - Net difference between projected and actual earnings on pension plan investments 90,302 - Changes in proportion and differences between Authority Contributions and proportionate share of contributions 3,107 1,411 Authority contributions subsequent to the measurement date 54,388 - 186,831 2,565 Total 20Page6JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2023 The 54,388 reported as deferred outflows of resources related to pensions resulting from Authority contributions subsequent to the measurement date will be recognized as a decrease of the net pension liability in the year ended June 30 , 2024 Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows Year Ended June 2024 40,757 2025 34,918 2026 11,182 2027 43,021 2028 - Thereafter - Actuarial Assumptions The total pension liability in the December 31 , 2021 actuarial valuation was determined using the following actuarial assumptions , applied to all periods included in the measurement Inflation 250 Percent Salary Increases 325 to 825 percent , which includes a 325 inflation and productivity factor Investment Rate of 650 percent , net of pension plan investment expense , including inflation The plan currently uses mortality tables that vary by age , gender , employee group ie general , law enforcement officer and health status ie disabled and healthy The current mortality rates are based on published tables and based on studies that cover significant portions of the US population The healthy mortality rates also contain a provision to reflect future mortality improvements The actuarial assumptions used in the December 31 , 2021 valuation were based on the results of an actuarial experience study for the period January 1 , 2015 through December 31 , 2019 Future ad hoc COLA amounts are not considered to be substantively automatic and are therefore not included in the measurement The projected long - term investment returns and inflation assumptions are developed through review of current and historical capital markets data , sell - side investment research , consultant whitepapers , and historical performance of investment strategies Fixed income return projections reflect current yields across the US Treasury yield curve and market expectations of forward yields projected and interpolated for multiple tenors and over multiple year horizons Global public equity return projections are established through analysis of the equity risk premium and the fixed income return projections Other asset categories and strategies ’ return projections reflect the foregoing and historical data analysis These projections are combined to produce the long - term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation The target allocation and best estimates of arithmetic real rates of return for each major asset class as of June 30 , 2023 are summarized in the following table 21Page7JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2023 Long - Term Expected Real Rate of Target Allocation Asset Class Return Fixed Income 33 09 Global Equity 38 65 Real Estate 8 59 Alternatives 8 82 Credit 7 50 Inflation Protection 6 27 The information above is based on 30 year expectations developed with the consulting actuary for the 2021 asset , liability , and investment policy study for the North Carolina Retirement Systems , including LGERS The long - term nominal rates of return underlying the real rates of return are arithmetic annualized figures The real rates of return are calculated from nominal rates by multiplicatively subtracting a long - term inflation assumption of 300 All rates of return and inflation are annualized Discount rate The discount rate used to measure the total pension liability was 650 The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rate and that contributions from employers will be made at statutorily required rates , actuarially determined Based on these assumptions , the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of the current plan members Therefore , the long - term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability Sensitivity of the Authority’s proportionate share of the net pension asset to changes in the discount rate The following presents the Authority’s proportionate share of the net pension asset calculated using the discount rate of 650 percent , as well as what the Authority’s proportionate share of the net pension asset or net pension liability would be if it were calculated using a discount rate that is 1 - percentage - point lower 550 percent or 1 - percentage - point higher 750 percent than the current rate 1 1 Decrease Discount Rate Increase 550 650 750 Authoritys proportionate share of the net pension liability asset 493,126 273,220 92,004 Pension plan fiduciary net position Detailed information about the pension plan’s fiduciary net position is available in the separately issued Annual Comprehensive Financial Report ACFR for the State of North Carolina Supplemental Retirement Income Plan The Authority also participates in a supplemental retirement plan which employees , who are eligible to participate in the Local Governmental Employees ’ Retirement System , are eligible to participate in this pension plan In a defined contribution plan , benefits depend solely on amount contributed to the plan plus investment earnings The Authority’s plan authorizes the Authority to contribute each month a match amount up to 5 of each eligible participant’s salary and all amounts contributed are vested immediately Also , the employees may make voluntary contributions to the Plan The Authority’s contributions for June 30 , 2023 were calculated using a covered payroll amount of 386,929 Total contributions for the year were 44,298 , which consisted of 18,495 from the Authority The Authority’s required contributions represented 500 of the cover