Financial Statement for SFY 2020

10 525 North Tryon Street , Suite 1400 HAMILTON STEPHENS Charlotte , North Carolina 28202 Telephone 7043441117 STEELE + MARTIN , PLLC Facsimile 7043441483 ATTORNEYS AT LAW Keith J Merritt Email kmerritt @ lawhssmcom 704 - 227 - 1056 January 27 , 2021 Thompson , Price , Scott , Adams & Co , PA PO Box 398 Whiteville , North Carolina 28472 Re The Johnston County Airport Authority the Authority Dear Sir & fadam By letter dated December 15 , 2020 , the Authority has requested that we furnish you certain information in connection with your examination of the financial statements of the Authority as of June 30 , 2020 , and for the fiscal year then ended We act as outside counsel for the Authority on certain discreet matters We advise you that as of June 30 , 2020 , we were not aware of any pending or threatened legal matter against the Authority within the materiality limit stated in your letter As of the date of this letter the Authority has paid all outstanding invoices In the Authoritys request letter to us , referred to above , the Authority requested that we furnish you certain information concerning unasserted claims and assessments In accordance with the ABAs Statement of Policy Regarding Lawyers Responses to Auditors Requests for Information December 1975 , referred to below , since this letter did not specify any such unasserted contingent liabilities , we decline to respond to such request and disclaim any obligation to do so However , whenever , in the course of performing legal services for the Authority with respect to a matter recognized to involve an unasserted possible claim or assessment that may call for financial statement disclosure , we have formed a professional conclusion that the Authority must disclose or consider disclosure concerning such possible claim or assessment , we , as a matter of professional responsibility to the Authority , will advise the Authority and consult with the Authority concerning such disclosure and the applicable requirements of Statement of Financial Accounting Standards No 5 This response is limited by , and in accordance with , the ABA Statement of Policy Regarding Lawyers Responses to Auditors Requests for Information December 1975 Without limiting the generality of the foregoing , the limitations set forth in the Statement on the scope and use of this response Paragraphs 2 and 7 are specifically incorporated herein by reference , and any reference herein to unasserted claims is qualified in its entirety by Paragraph 5 of the Statement and the accompanying Commentary which is an integral part of the Statement 525 North Tryon St , Ste 1400 Charlotte , NC 28202 MAIN 7043441117 FAX 7043441483 WEB wwwlawhssmcomPageHamilton Stephens Steele + Martin , PLLC January 27 , 2021 Page2 The information set forth herein is as of June 30 , 2019 , and to the date of this response and we disclaim any undertaking to advise you as to changes which thereafter may be brought to our attention This letter is solely for your information in connection with your above - referenced examination of the financial statements of the Authority , and is not to be quoted in whole or in part or otherwise referred to in any financial statements of the Authority or any other documents , or is it to be filed with or furnished to any governmental agency or other person , without our prior written consent Very truly yours , cc J Chad McLamb , Finance Director Johnston County Phillip Lanier , Johnston County Airport Director 525 N Tryon St , Ste 1400 Charlotte , NC 28202 MAIN 7043441117 FAX 7043441483 WEB wwwlawhssmcomPageJOHNSTON COUNTY AIRPORT AUTHORITY Smithfield , North Carolina Financial Statements For the Year Ended June 30 , 2020 dPageJOHNSTON COUNTY AIRPORT AUTHORITY Smithfield , North Carolina Financial Section Year Ended June 30 , 2020 Board of Commissioners Ted G Godwin , Chairman Chad M Stewart , Vice - Chairman Jeffrey P Carver Larry Wood Tony Braswell Patrick E Harris RS Butch Lawter , Jr Airport Authority Board Members Ken Starling , Chairman John H Bullock , Jr , Vice - Chairman Brucec Johnson , Secretary Dwight Lowery Freddie Stancil Bentley Powell Tim Stevens dPagePage pageNumber5JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2020 Page s FINANCIAL SECTION INDEPENDENT AUDITORS ’ REPORT 1 - 3 MANAGEMENT DISCUSSION AND ANALYSIS 4 - 8 BASIC FINANCIAL STATEMENTS Statements of Net Position 1 9 Statements of Revenues , Expenses and Changes in Fund Net Position 2 10 Statements of Cash Flows 3 - 4 11 - 12 NOTES TO THE FINANCIAL STATEMENTS 13 - 27 REQUIRED SUPPLEMENTARY INFORMATION Schedule of the Proportionate Share of the Net Pension Asset - Local Government Employees Retirement System A - 1 28 A - 2 Schedule of Contributions - Local Government Employees Retirement System 29 Schedules of Changes in Total OPEB Liability and Related Ratios A - 3 30 SUPPLEMENTAL FINANCIAL DATA Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP - Operating Fund B - 1 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 - 37 Schedule of Findings and Questioned Costs 38 - 39 Corrective Action Plan 40 Summary Schedule of Prior Audit Findings 41 C - 1 Schedule of Expenditures of Federal and State Awards 42 dPagePage pageNumber6FINANCIAL SECTION dPagePage pageNumber7Thompson , 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 CERTIF IED PUBLIC ACCOUNTANTS CONSULTANTS AND TAX ADVISORS Independent Auditors Report Board of County Commissioners and Authority Board Johnston County Airport Authority Smithfield , North Carolina Report on the Financial Statements We have audited the accompanying financial statements of the the business - type activities of the Johnston County Airport Authority , North Carolina , a component unit of the County of Johnston , North Carolina , as of and for the years ended June 30 , 2020 and June 30 , 2019 , and the related notes to the financial statements , which collectively comprise the Authoritys basic financial statements as listed in the table of contents Managements Responsibility for 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 ; this includes 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 Auditors Responsibility Our responsibility is to express opinions on these financial statements based on our audit 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 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements The procedures selected depend on the auditors judgment , including the assessment of the risks of material misstatement of the financial statements , whether due to fraud or error In making those risk assessments , the auditor considers internal control relevant to the entitys preparation and fair presentation of the financial statements 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 entitys internal control Accordingly , we express no such opinion An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management , as well as evaluating the overall financial statement presentation of the financial statements Members 1 American Institute of CPAs - NC Association of CPAs - AICPA Division of Firms dPagePage pageNumber8We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions Opinions In our opinion , based upon our audit , the 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 , 2020 and June 30 , 2019 , and the respective changes in financial position and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis on pages 4 through 8 , the Local Government Employees Retirement Systems Schedules of the Proportionate Share of the Net Pension Asset and Contributions on pages 28 and 29 , respectively , and the Schedules of Changes in the Total OPEB Liability and Related Ratios , on page 30 , be presented to supplement the basic financial statements Such information , 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 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 consisted 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 Supplementary and Other 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 , and the 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 purposes of additional analysis and are not a required part of the basic financial statements The budgetary schedules and the Schedule of Expenditures of Federal and State Awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements Such 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 are fairly stated , in all material respects , in relation to the basic financial statements as a whole 2 dPagePage pageNumber9Januar Whitevi ________ Johnston integral provide of grants reporting 2021 In Other accorda internal on y agreemen Reporting lle , part 4 , an our County and _______ nce 2021 control NC opinion of consideratio on with an ts , our Airport Required audit ___________ over and Government on tests other internal performed financial Authoritys n of of by its matters the compliance Governmen control __________ Auditing reporting Johnston in internal accorda The over Stan purpose and County with - , , t control ________ nce financial , Auditing dards , complian certain with of Airport over we the Governmen reporting Standards provisions ce financial have report Authoritys and also is the or t reporting to of issued Auditing on results describe laws , complian internal our regulations , of and Standards the report that control compliance ce scope testing , That dated in over contracts , of report considering our and January financial testing not is and an to 4 , 3 dPage0Management’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 , 2020 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 21,795,580 net position Of this amount , 601,674 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 3,297,234 ? 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 4 dPage1Notes 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 21,796,580 at the close of the most recent fiscal year By far the largest portion of Authority’s net assets 10276 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 2020 2019 2018 1,286,336 804,849 864,450 Current and Other Assets 22,398,254 19,228,754 18,257,096 Capital Assets 260,109 230,253 66,300 Deferred outflows 23,944,699 20,263,856 19,187,846 Total Assets and Deferred Outflows 1,509,742 1,357,461 1,193,563 Long - term Liabilities 544,909 281,101 53,647 Other Liabilities 93,468 125,948 101,992 Deferred inflows Total Liabilities and Deferred 2,148,119 1,764,510 1,349,202 Inflows Net Position 22,398,254 19,197,837 18,193,993 Net investment in capital assets 601,674 698,491 355,349 Unrestricted 21,796,580 18,499,346 17,838,644 Total Net Position 5 dPage2Assets increased during the year by 3,680,843 because of a increase in capital assets ? from Fiscal Year 2019 to 2020 by approximately 3,650,987 combined with an increase in current assets of 481,487 Liabilities increased during the year by 383,609 , primarily due to increases in OPEB ? and LGERS liabilities Net position increased during the year by 3,297,234 to reflect the Authority’s excess of ? revenues over expenditures and increases in capital assets Johnston County Airport Authoritys Changes in Net Position 2020 2019 2018 1,439,243 1,543,189 1,336,121 Operating Revenues 2,090,260 2,205,935 2,020,950 Operating Expenses 651,017 662,746 684,829 Net Income Loss from Operations 445 87,975 2,965 Nonoperating Revenue Expenses Income Loss Before Contributions 651,462 574,771 687,794 and Transfers 3,773,696 1,168,805 1,023,147 Capital Contributions Contribution from Primary 175,000 66,668 106,674 Government 3,297,234 660,702 442,027 Change in Net Position 18,499,346 17,838,644 18,137,073 Net Position , Beginning of Year - - 740,456 Restatement 18,499,346 17,838,644 17,396,617 Net Position , Restated 21,796,580 18,499,346 17,838,644 Net Position , End of Year Operating Revenue In fiscal year 2020 , total operating revenues were 1,439,243 , which equated to a decrease from 2019 of 103,946 or - 674 This decrease resulted from a significant decrease in fuel and oil sales of approximately 175,360 from fiscal year 2019 to 2020 6 dPage3Operating Expenses In fiscal year 2020 , total operating expenses were 2,090,260 which equated to a decrease from 2019 of 115,675 or - 524 There was a decrease in cost of sales , which decreased approximately 197,825 , or - 2862 offset by an increase in repairs & maintenance , which increased approximately 11,665 , or 998 Capital Asset and Debt Administration Capital assets At the end of 2020 , the Authority had a total net investment in capital assets of 22,398,254 net of accumulated depreciation This investment in capital assets includes land , land improvements , buildings , equipment and construction in progress The total increase in the Authority’s investment in capital assets for the current fiscal year was 1648 percent Johnston County Airport Authoritys Capital Assets net of depreciation 2020 2019 2018 Land 900,216 900,216 900,216 Land Improvements 9,457,669 9,873,177 10,290,099 Clearing and Excavation 2,814,294 2,853,346 1,838,638 Buildings 4,604,212 3,787,688 3,889,222 Equipment 30,011 53,104 82,912 Construction in Process 4,591,852 1,761,223 1,256,009 Total 22,398,254 19,228,754 18,257,096 Long - term debt At June 30 , 2020 , the Authority had no outstanding long - term debt The authority does not plan to incur any additional debt for planned renovation and expansion projects Economic Factors and Next Year’s Budgets and Rates Economic Factors Significant economic indicators for the County are as follows Indicator Johnston Co North Carolina 2770 Population Increase 2001 - 2019 6180 2150 Projected Population Increase 2020 - 2039 5030 390 Average Unemployment Rate 2019 360 47,766 Per Capita Income 2019 41,327 54,602 Median Household Income 2019 59,865 7 dPage4Next Year’s Budget For fiscal year 2021 , we have budgeted operating revenues to increase as compared to fiscal year 2020 The largest budgeted revenue item for fiscal year 2020 is at FAA Grants at approximately 7,593,428 Budgeted operating expenditures for fiscal year 2021 have increased as compared to fiscal year 2020 , due to capital projects The largest of the budgeted operating expenditures is operations in the amount of 1,274,400 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 or additional financial information should be addressed to the Office of the Finance Director , Johnston County Airport Authority , PO Box 1049 , Smithfield , NC 27577 8 dPage5BASIC FINANCIAL STATEMENTS dPage6Exhibit 1 Johnston County Airport Authority , North Carolina Statements of Net Position For the Fiscal Year Ended June 30 , 2020 With Comparative Actual Amounts for the Fiscal Year Ended June 30 , 2019 ASSETS June 30 , June 30 , 2020 2019 Current Assets Cash 685,615 4 86,906 Trade Accounts Receivable , Net 43,895 86,937 Grants Receivable 458,826 182,659 Sales Tax Receivable 36,873 10,632 Inventories 38,556 18,140 Prepaid Expenses 22,571 19,575 Total Current Assets 1,286,336 804,849 Non - current Assets Capital Assets , Net 22,398,254 19,228,754 Total Assets 23,684,590 20,033,603 DEFERRED OUTFLOWS OF RESOURCES 260,109 230,253 LIABILITIES Current Liabilities Trade Accounts Payable 504,424 229,854 Notes Payable - Current - 30,917 Customer Prepayments 40,485 20,330 Total Current Liabilities 544,909 281,101 Noncurrent Liabilities Notes Payable - - OPEB Liability 1,361,610 1,221,789 Compensated Absences Payable 21,467 29,872 Net Pension Liability 126,665 105,800 Total Noncurrent Liabilities 1,509,742 1,357,461 Total Liabilities 2,054,651 1,638,562 DEFERRED INFLOWS OF RESOURCES 93,468 125,948 NET POSITION Net investment in capital assets 22,398,254 19,197,837 Unrestricted 601,674 698,491 Total Net Position 21,796,580 18,499,346 The notes to the financial statements are an integral part of this statement 9 dPage7Exhibit 2 Johnston County Airport Authority , North Carolina Statements of Revenues , Expenses , and Changes in Fund Net Position For the Fiscal Year Ended June 30 , 2020 With Comparative Actual Amounts for the Fiscal Year Ended June 30 , 2019 June 30 , June 30 , 2020 2019 Operating Revenues Fuel and Oil Sales 703,519 8 78,879 Aircraft Tiedowns 10,538 1 3,015 Vending 302 527 Hangar Leases and Rents 651,124 6 27,203 Miscellaneous 7,523 2 2,165 Service Fees 750 1 , 400 CARES Act Funding 65,487 - Total Operating Revenues 1,439,243 1,543,189 Operating Expenses Salaries and Employee Benefits 593,026 5 24,576 Cost of Sales 493,430 6 91,255 Operating 424,617 4 02,619 Depreciation 579,187 5 87,485 Total Operating Expenses 2,090,260 2,205,935 Loss from Operations 651,017 662,746 Nonoperating Revenue Expenses Investment Earnings 365 516 Hangar Proceeds from Blue Line - 9 0,000 Interest Expense 810 2,541 Total Nonoperating Revenue Expenses 445 8 7,975 Income Loss Before Contributions and Transfers 651,462 574,771 Capital Contributions 3,773,696 1,168,805 Contribution from Primary Government 175,000 6 6,668 Change in Net Position 3,297,234 6 60,702 Net Position - Beginning of Year 18,499,346 17,838,644 Net Position - End of Year 21,796,580 18,499,346 The notes to the financial statements are an integral part of this statement 10 dPage8Exhibit 3 Johnston County Airport Authority , North Carolina Statements of Cash Flows June 30 , 2020 and June 30 , 2019 June 30 , June 30 , 2020 2019 Cash Flows from Operating Activities Cash Received from Customers 1,476,199 1,575,707 Cash Paid for Goods and Services 666,887 877,594 Cash Paid to Employees 503,083 469,747 Net Cash Provided By Used in Operating Activities 306,229 228,366 Cash Flows from Noncapital Financing Activities Operating Transfer from Primary Government 175,000 66,668 Net Cash Provided By Used in Noncapital Financing Activities 175,000 66,668 Cash Flows from Capital and Related Financing Activities Interest Expense 810 2,541 Acquisition of Capital Assets 3,748,687 1,559,144 Capital Contributions 3,497,529 986,145 Hangar Buyout Gain Loss - 90,000 Repayment of Debt Obligations 30,917 32,186 Net Cash Provided by Used in Capital and Related Financing Activities 282,885 517,726 Cash Flows from Investing Activities Investments Earnings 365 516 Net Increase Decrease in Cash 198,709 222,176 Cash - Beginning of Year 486,906 709,082 Cash - End of Year 685,615 486,906 The notes to the financial statements are an integral part of this statement 11 dPage9Exhibit 4 Johnston County Airport Authority , North Carolina Statements of Cash Flows June 30 , 2020 and June 30 , 2019 June 30 , June 30 , 2020 2019 Reconciliation of Operating Loss to Net Cash Provided By Used in Operating Activities Operating Loss 651,017 662,746 Adjustment to Reconcile Operating Loss to Net Cash Provided By Used in Operating Activities Depreciation 5 79,187 5 87,485 Changes in Assets , Deferred Outflows of Resources , and Liabilities Trade Accounts Receivable 4 3,042 1 6,346 Sales Tax Receivable 26,241 1 , 882 Inventories 20,416 9 , 676 Prepaid Expenses 2,996 7,820 Trade Accounts Payable 2 74,572 2 14,424 Customer Prepayments 2 0,155 1 4,290 Deferred outflows of resources for pensions 7 , 711 31,326 Increase in deferred outflows of resources - OPEB 37,569 132,625 Deferred inflows of resources for pensions 831 1,147 Increase in deferred inflows of resources - OPEB 31,649 2 5,103 Net Pension Asset Liability 2 0,865 3 8,755 Decrease in net OPEB liability 1 39,821 1 56,276 Payroll Liabilities - - Compensated Absences Payable 8,405 207 Total Adjustments 9 57,246 8 91,112 Net Cash Provided By Used in Operating Activities 3 06,229 2 28,366 Interest Paid 810 2 , 541 The notes to the financial statements are an integral part of this statement 12 dPage0JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 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 Johnson 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 have 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 Statues 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 13 dPage1JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 The budget and the budget message shall be submitted to the governing board The public hearing June 1 - on the budget shall be scheduled at this time July 1 - The budget ordinance shall be adopted by the governing board 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 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 nonguaranteed 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 money market mutual fund The Authority did not have any investments at June 30 , 2020 or 2019 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 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 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 Capital assets of the Authority are depreciated using the straight - line method over the following useful lives Description Estimated Useful 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 10 Years 14 dPage2JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 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 two items that meets the criterion OPEB related deferrals and pension related deferrals 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 are classified as net investment in capital assets , restricted , and unrestricted Restricted net position represent 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 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 Noncompliance with North Carolina General Statutes No issues noted 15 dPage3JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 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 , 2019 , the Authoritys deposits had a carrying amount of 685,370 and a bank balance of 1,213,427 Each bank covers deposits by the federal depository insurance up to 250,000 , for a total of 500,000 of federal coverage The amount in excess of the insured limits prescribed by the Federal Deposit Insurance Corporation was 713,427 which was covered by collateral held under the Pooling method At June 30 , 2020 , the Authority had 245 cash on hand At June 30 , 2019 , the Authoritys deposits had a carrying amount of 486,661 and a bank balance of 549,984 Each bank covers deposits by the federal depository insurance up to 250,000 , for a total of 500,000 of federal coverage The amount in excess of the insured limits prescribed by the Federal Deposit Insurance Corporation was 49,984 which was covered by collateral held under the Pooling method At June 30 , 2019 , 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 2020 2019 Fuel 38,556 18,005 Oil - 136 Supplies - - 38,556 18,141 16 dPage4JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 Note 5 - Capital assets Capital asset activity for the year ended June 30 , 2020 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 1,761,224 3,748,687 918,059 4,591,852 Total capital assets not being depreciated 2,661,440 3,748,687 918,059 5,492,068 Capital assets being depreciated Terminal building 4,330,999 918,059 - 5,249,058 Runway , ramps and hangars 17,749,971 - - 17,749,971 Aircraft parking ramp 546,911 - - 546,911 Vehicles 74,025 - - 74,025 Clearing and Excavation 2,928,907 - - 2,928,907 Lighting and Equipment 1,974,778 - - 1,974,778 Total capital assets being depreciated 27,605,591 918,059 - 28,523,650 Less accumulated depreciation for Terminal building 1,050,564 92,699 - 1,143,263 Runway , ramps and hangars 7,876,794 415,508 - 8,292,302 Aircraft parking ramp 39,659 8,835 - 48,494 Vehicles 74,025 - - 74,025 Clearing and Excavation 75,561 39,052 - 114,613 Lighting and Equipment 1,921,674 23,093 - 1,944,767 Total accumulated depreciated 11,038,277 579,187 - 11,617,464 Total capital assets being depreciated , net 16,567,314 338,872 - 16,906,186 Total capital assets , net 19,228,754 4,087,559 918,059 22,398,254 Construction Commitments The Authority has active construction projects as of June 30 , 2020 At year - end , the governments commitments with contractors are as follows Spent to Remaining Project Date Commitment Corporate Hangars 57,836 69,997 Drainage Improvements 77,514 540,486 Airport Master Plan 337,730 71,589 New Fuel Farm 41,870 34,005 Midfield Development 38,816 213,812 Total 4,592,437 929,889 17 dPage5JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 Note 6 – 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 Comprehensive Annual Financial Report CAFR for the State of North Carolina The State’s CAFR 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 contingent upon actuarial gains of the plan 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 , 2020 , was 900 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 28,629 for the year ended June 30 , 2020 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 18 dPage6JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 Pension Liabilities , Pension Expense , and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30 , 2020 , the Authority reported a liability of 126,665 for its proportionate share of the net pension liability The net pension liability was measured as of June 30 , 2019 The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31 , 2018 The total pension liability was then rolled forward to the measurement date of June 30 , 2019 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 , 2019 measurement date , the Authority’s proportion was 4638 , which was an increase of 00178 from its proportion measured as of June 30 , 2018 For the year ended June 30 , 2020 , the Authority recognized pension expense of 56,375 At June 30 , 2020 , 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 21,688 - Changes of assumptions 20,644 - Net difference between projected and actual earnings on 3,090 - pension plan investments Changes in proportion and differences between Authority 224 518 Contributions and proportionate share of contributions Authority contributions subsequent to the measurement date 28,629 - Total 74,275 518 28,629 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 , 2021 Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows Year Ended June 30 2021 22,425 2022 6,899 2023 12,238 2024 3,566 2025 - Thereafter - 19 dPage7JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 Actuarial Assumptions The total pension liability in the December 31 , 2018 actuarial valuation was determined using the following actuarial assumptions , applied to all periods included in the measurement Inflation 30 Percent Salary Increases 350 to 810 percent , including inflation and productivity factor Investment Rate of Return 700 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 , 2018 valuation were based on the results of an actuarial experience study for the period January 1 , 2010 through December 31 , 2014 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 , 2019 are summarized in the following table Long - Term Expected Real Rate Asset Class Target Allocation of Return Fixed Income 29 14 Global Equity 42 53 Real Estate 8 43 Alternatives 8 89 Credit 7 60 Inflation Protection 6 40 The information above is based on 30 year expectations developed with the consulting actuary for the 2018 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 305 All rates of return and inflation are annualized 20 dPage8JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 Discount rate The discount rate used to measure the total pension liability was 700 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 County’s proportionate share of the net pension asset to changes in the discount rate The following presents the County’s proportionate share of the net pension asset calculated using the discount rate of 700 percent , as well as what the County’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 600 percent or 1 - percentage - point higher 800 percent than the current rate 1 Current 1 Decrease Discount Rate Increase 600 700 800 Authoritys proportionate share of the net pension liability 254,141 105,800 18,156 asset Pension plan fiduciary net position Detailed information about the pension plan’s fiduciary net position is available in the separately issued Comprehensive Annual Financial Report CAFR 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 , 2020 were calculated using a covered payroll amount of 241,443 Total contributions for the year were 19,999 , which consisted of 9,155 from the Authority The Authority’s required contributions represented 379 of the covered payroll amount The Authority’s contributions for June 30 , 2019 were calculated using a covered payroll amount of 233,201 Total contributions for the year were 25,023 , which consisted of 10,094 from the Authority The Authority’s required contributions represented 433 of the covered payroll amount 21 dPage9JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 Other Postemployment Benefits Healthcare Benefits Plan Description Under the terms of a County resolution , the County administers a single - employer defined benefit Healthcare Benefits Plan the HCB Plan Any participant hired prior to January 1 , 2011 who commences retirement and meets the following conditions shall receive an annual retirement medical allowance A participant must 1 have ten years of service with the County if hired or elected prior to January 1 , 2007 ; 2 have twenty years of service with the County if hired or elected on or after January 1 , 2007 but prior to January 1 , 2011 ; and 3 Be eligible and approved to receive retirement benefits in accordance with the regulations of the Local Governmental Employees Retirement System The County Commissioners may amend the benefit provisions A separate report was not issued for the plan Benefits provided The HCB Plan provides healthcare benefits for retirees The County contributes all or most of the funding rate set by the County , depending on the medical plan elected Insurance coverage will only be extended to retirees until they reach age 65 or until they are eligible to receive Medicare benefits , whichever occurs first Once the retiree is eligible for Medicare , the retiree must pay the premiums for Medicare Part A and Medicare Part B to continue coverage through the Countys health plan Once the retiree is eligible for Medicare , the Countys health plan becomes secondary to Medicare Also , the Countys retirees can purchase coverage for their dependents at the Countys group rates if enrolled in dependent coverage at the time of retirement Plan Membership At June 30 , 2019 and June 30 , 2020 , the HCB Plan membership consisted of the following 2019 2020 Inactive plan members or beneficiaries currently receiving benefit payments 1 1 Inactive plan members entitled to but not yet receiving benefit payments - - Active plan members 6 6 7 7 Total OPEB Liability The Authoritys total OPEB liability of 1,361,672 was measured as of June 30 , 2019 and was determined by an actuarial valuation as of that date 22 dPage0JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 Actuarial assumptions and other inputs The total OPEB liability in the June 30 , 2019 actuarial valuation was determined using the following actuarial assumptions and other inputs , applied to all periods included in the measurement unless otherwise specified 250 Inflation 350 Wage inflation 350 - 775 Salary increases , including wage inflation 350 Discount rate Health Care Cost Trends 725 for 2018 decreasing to an ultimate rate of Pre - Medicare 475 by 2028 538 for 2018 decreasing to an ultimate rate of Medicare 475 by 2022 The discount rate use to measure the TOL was based on the June average of the Bond Buyer General Obligation 20 - year Municipal Bond Index Changes in the Total OPEB Liability Total OPEB Liability a Balances at June 30 , 2019 1,221,819 Changes for the Year Service Cost 25,353 Interest 47,085 Differences between Expected and Actual 1,234 experience Changes of assummptions 93,170 Benefit Payments 24,521 Net Changes 139,853 Balances at June 30 , 2020 1,361,672 Changes of assumptions Since the Prior Measurement Date , the Discount Rate has changed from 389 to 350 due to a change in the Municipal Bond Rate Mortality rates were based on the RP - 2014 mortality tables , with adjustments for LGERS experience and generational mortality improvements using Scale MP - 2015 The demographic actuarial assumptions for retirement , disability incidence , withdrawal , and salary increases used in the June 30 , 2019 valuation were based on the results of an actuarial experience study for the period January 1 , 2010 - December 31 , 2014 , adopted by the LGERS Board 23 dPage1JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 The remaining actuarial assumptions eg initial per capita costs , health care cost trends , rate of plan participation , rates of plan election , etc used in the June 30 , 2019 valuation were based on a review of recent plan experience done concurrently with the June 30 , 2019 valuation Discount Rate The discount rate used to measure the total OPEB liability at June 30 , 2020 and June 30 , 2019 was 350 and 389 , respectively Sensitivity of the new OPEB liability to changes in the discount rate The following presents the net OPEB liability of the County at June 30 , 2020 , as well as what the Countys net OPEB liability would be if it were calculated using a discount rate that is 1 - percentage - point lower 250 or 1 - percentage - point higher 450 than the current discount rate 1 Decrease Discount Rate 1 Increase 250 350 450 1,649,553 1,361,672 1,140,146 Total OPEB Liability Sensitivity of the net OPEB liability to changes in the healtchare cost trend rates The following presents the net OPEB liability of the County , as well as what the Countys net OPEB liability would be if it were to calculate healthcare cost trend rates that are 1 - percentage - point lower or 1 - percentage - point higher than the current healthcare cost trend rate 1 Decrease Discount Rate 1 Increase 1,117,125 1,361,672 1,684,045 Total OPEB Liability OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30 , 2020 , the County recognized OPEB expense of 81,328 At June 30 , 2020 , the County reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual 101,351 977 experience Changes of assumptions 73,759 91,973 Net Difference between projected and actual - - earnings on plan investments Authority contributions subsequent to the 10,724 - measurement date Total 185,834 92,950 24 dPage2JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 10,724 reported as deferred outflows of resources related to OPEB resulting from County contributions subsequent to the measurement date will be recognized as a decrease in the net OPEB liability in the year ended June 30 , 2020 Other amounts reported as deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows Year Ended June 30 22,717 2021 22,717 2022 21,404 2023 15,322 2024 - 2025 - Thereafter Note 7 – Other Employment Benefit The Authority has elected to provide death benefits to employees through the Death Benefit Plan for members of the Local Governmental Employees ’ Retirement System the “ Death Benefit Plan ” , a multiple - employer , State - administered , cost - sharing plan funded on a one - year term cost basis The beneficiaries of those employees who die in active service after one year of contributing membership in the System , or who die within 180 days after retirement or termination of service and have at least one year of contributing membership service in the System at the time of death are eligible for death benefits Lump sum death benefit payments to beneficiaries are equal to the employee’s 12 highest months salary in a row during the 24 months prior to the employees ’ death , but the benefit may not exceed 50,000 or be less than 25,000 All death benefit payments are made from the Death Benefit Plan The Authority has no liability beyond the payment of monthly contributions The contributions to the Death Benefit Plan cannot be separated between the post - employment benefit amount and the other benefit amount The Authority considers these contributions to be immaterial Note 8 – Risk Management The Authority is exposed to various risks of loss related to torts ; theft of , damage to , and destruction of assets ; errors and omissions ; injuries to employees ; and natural disasters The Authority maintains general liability coverage of 1 million per occurrence and property coverage up to the total insurance values of the property policy In accordance with GS 159 - 29 , the Authoritys employees that have access to 100 or more at any given time of the Authoritys funds are performance bonded through a commercial surety bond The finance officer is bonded for 50,000 Note 9 – Claims , Judgments and Contingent Liabilities At June 30 , 2020 , the Authority was not a defendant against any lawsuits 25 dPage3JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2020 Note 10 – Long Term Debt Obligations Changes in Long - Term Liabilities The following is a summary of changes in the Airport Authority’s long - term obligations for the fiscal year ended June 30 , 2020 Balance Balance Current Portion 6 30 19 Additions Retirements 6 30 20 of Balance Installment Purchase 30,917 - 30,917 - - Total OPEB Liability 1,221,789 139,821 - 1,361,610 - Compensated absences 29,872 - 8,405 21,467 - Net Pension Liability 105,800 20,865 - 126,665 - Total 1,388,378 160,686 39,322 1,509,742 - Note 11 – Rental income under operating lease The Authority is a lessor of 97 airport hangars and ground space The noncancelable lease terms range from three to five years and are renewable at the end of the lease term The Authority retains title to the lease pr