Financial Statement for SFY 2017

10 r JOHNSTON COUNTY AlRPORT AUTHOR1TY [ [ [ [ l ANNUAL FINANCIAL REPORT l FOR THE YEAR ENDED II JUNE 30 , 2017 [ I I ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~PageJOHNSTON COUNTY AIRPORT AUTHORITY Smithfield , North Carolina Financial Section Year Ended June 30 , 2017 Board of Commissioners Jeffrey Carver , Chairman Ted G Godwin , Vice - Chainnan Lillian Cookie Pope Allen Mims , Jr Chad M Stewart LanyWood Lee Jackson Airpmt Authority Board Members Ken Starling , Chai1man John H Bullock , Jr , Vice - Chairman Tim Stevens , Secretary Dwight Lowery Edwin Ray HalesPageJOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2017 Page s FINANCIAL SECTION 1 - 3 INDEPENDENT AUDITORS REPORT 4 - 8 MANAGEMENT DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS Statements of Net Position 9 2 Statements of Revenues , Expenses and Changes in Fund Net Position IO I 1 - 12 3A Statements of Cash Flows NOTES TO THE FINANCIAL STATEMENTS 13 - 27 REQUIRED SUPPLEMENTARY INFORMATION A - 1 Other Post Employment Benefits - Schedule of Funding Progress 28 A - 2 Other Post Employment Benefits - Schedule of Employer Contributions 29 Schedule of the Proportionate Share of the Net Pension Asset - Local Government A - 3 Employees Retirement System 30 31 A - 4 Schedule of Contributions - Local Government Employees Retirement System SUPPLEMENTAL FINANCIAL DATA B - 1 Schedule of Revenues and Expenditures - Budget and Actual Non - GA AP - Operating Fund 32 - 33 B - 2 Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP - Airp01i Construction - Construction Fund 34 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 Govemment 35 - 36 Auditing Standards 37 - 38 Schedule of Findings and Questioned Costs 39 Corrective Action Plan 40 Summary Schedule of Prior Audit FindingsPageI r l I r r Financial Section I Independent Auditors Report • l Managements Discussion and Analysis • I Government - wide Financial Statements • I Fund Financial Statements • Notes to Financial Statements • [ I I I lPagePage pageNumber5Thompson , Price , Scott , Adams & Co , PA PO Box 398 1626 S Madison Street Whiteville , NC 28472 Telephone 910 642 - 2109 Fux 910 642 - 5958 Alnn W Thompson , CPA R Bryon Scoll , C PA Gregory S Adams , C PA CERTI F I EO PU8LI C A CCO U N T ANTS CON S U L T A N TS AND TAX AOV I O OR J 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 act1V1hes of the Johnston County Airport Auth01ity , North Carolina , a component unit of the County of Johnston , North Carolina , as of and for the years ended June 30 , 2017 and June 30 , 2016 , 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 etTor Auditors Responsibility Our responsibility is to express op1111ons 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 Comph·oller General of the United States Those standards require that we plan and pe1fonn the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement An audit involves perfonning 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 e1rnr In making those risk assessments , the auditor considers internal conh·ol 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 American Tnstilute of CPAs - NC Association ofCPAs - AICPA Division of FirmsPagePage pageNumber6We 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 , 2017 and June 30 , 2016 , 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 Supplementmy biformation Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis on pages 4 through 8 , the Other Postemployment Benefits Schedules of Funding Progress and Schedules of Employer Contributions on pages 28 and 29 , respectively , the Local Govemment Employees Retirement Systems Schedules of the Proportionate Share of the Net Pension Asset and Contributions on pages 30 and 31 , respectively , be presented to supplement the basic financial statements Such infonnation , 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 infonnation 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 infonnation and comparing the infonnation 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 infonnation because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance Supp ementaiJ and Other Information Our audit was conducted for the purpose of fo1ming opm1ons on the financial statements that collectively comprise the Johnston County Airport Authoritys basic financial statements The budgetary schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements The budgetary schedules 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 2PagePage pageNumber7Other Reporting Requiled by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated December 8 , 2017 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 the report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing , and not to provide an opinion on internal control over financial reporting or on compliance That report is an integral part of an audit perfmmed in accordance with Government Auditing Standards in considering Johnston County Airport Authoritys internal control over financial reporting and compliance Whiteville , NC December 8 , 2017 3PagePage pageNumber8Managements Discussion and Analysis Johnston County Ai1port Authority , the Authority , a component unit of Johnston County , is a corporate body which operates the aitport in Johnston County , North Carolina This is a natTative overview and analysis of the financial activities of the Authority for the fiscal year ended June 30 , 2017 We encourage readers to read the infom1ation presented here in conjunction with the additional information that we have furnished in the Authoritys financial statements , which follows this natTative Financial Highlights • The assets and deferred outflows of Johnston County Airpott Authority exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by 18,137,073 net position Of this amount , 534,489 unrestricted net position may be used to meet the governments ongoing obligations to citizens and creditors • The Authoritys total net position decreased by 361,419 Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the Authoritys basic financial statements The Authoritys basic financial statements are comprised of two components l basic financial statements and 2 notes to the financial statements This report also contains other supplementary information that will enhance the readers understanding of the fmancial condition of the Authority Basic Financial Statements Financial Statements - These statements focus on the activities of the individual patts of the Authoritys government and provide both short and long - term information about the Authoritys financial status The financial statements are comprised of the following statements o The Statements of Net Position presents information on all of the Authoritys assets , liabilities , and defetTed inflows of resources with the difference between the two reported as net position Over tinle , increases and decreases in net position may serve as a useful indicator of whether the fmancial position of the Authority is inlproving or deteriorating • The Statements of Revenue , Expenses and Changes in Fund Net Position presents information showing how the Authoritys 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 Authoritys 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 Authoritys financial position In the case of the Authority , assets and deferred outflows exceeded liabilities and deferred inflows ofresources by 18,137,073 at the close of the most recent fiscal year By far the largest portion of Authoritys net assets 9705 reflects its net investment in capital assets e g , 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 Authoritys 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 2016 2015 2017 905,210 973,271 919,669 Current and Other Assets 18,112,162 18,575,213 17,696,235 Capital Assets 17,421 16,842 76,857 Deferred outflows 19,497,844 18,746,363 19,048,673 Total Assets and Deferred Outflows 470,034 459,681 481,503 Long - term Liabilities 59,047 35,561 145,961 Other Liabilities 60,076 9,631 3,648 Deferred inflows 550,181 565,671 609,290 Total Liabilities and Deferred Net Position 18,425,089 17,602,583 17,989,526 Net investment in capital assets 507,084 534,490 508,966 Unrestricted 18,932,173 18,137,073 18,498,492 Total Net Position 5Page0• Assets decreased during the year by 302,310 because of a decrease in capital assets from Fiscal Year 2016 to 2017 by approximately 415,926 offset by an increase in current assets of 53,601 • Liabilities increased during the year by 59,109 , primarily due to a large increase in other liabilities from prior years • Net position decreased during the year by 361,419 to reflect the Authoritys excess of expenditures over revenues Johnston County Airport Authoritys Changes in Net Position 2016 2015 2017 1,047,771 1,187,735 1,132,279 Operating Revenues 1,671,998 1,602,011 1,587,369 Operating Expenses 484,263 469,732 539,598 Net Income Loss from Operations 45,618 4,621 2,275 Nonoperating Revenue Expenses Income Loss Before Contributions 529,881 474,353 541,873 and Transfers 108,192 456,299 112,934 Capital Contributions Contribution from Primary Govemment 73,582 361,419 433,681 Change in Net Position 18,932,173 19,038,705 18,498,492 Net Position , Beginning of Year 18,498,492 18,932,173 19,005,755 Net Position , Restated 18,498,492 18,932,173 18,137,073 Net Position , End of Year Operating Revenue In fiscal year 2017 , total operating revenues were 1,132,279 , which equated to an increase from 2016 of 84,508 or 807 This increase resulted from a significant increase in fuel and oil sales of approximately 61,985 from fiscal year 2016 to 2017 6Page1Operating Expenses In fiscal year 2017 , total operating expenses were 1,602,011 which equated to a increase from 2016 of 14,642 or 092 There was a significant increase in cost of sales , which increased approximately 62,942 , or 1749 However , there was a significant decrease of 28,342 , or 2803 , in repairs & maintenance Capital Asset and Debt Administration Capital assets At the end of 2017 , the Authority had a total net investment in capital assets of 17,696,236 net of accumulated depreciation This investment in capital assets includes land , land improvements , buildings , equipment and construction in progress The total decrease in the Authoritys investment in capital assets for the current fiscal year was 230 percent Johnston County Airport Authoritys Capital Assets net of depreciation 2017 2016 2015 900,216 900,216 900,216 Land 10,711,259 11,137,964 11,510,237 Land Improvements 1,863,825 Clearing and Excavation 1,889,012 1,977,894 Buildings 3,990,755 3,558,533 Equipment 120,657 118,470 132,159 109,524 507,967 4,054,707 Construction in Process 17,696,236 18,112,162 18,575,213 Total Long - term debt At June 30 , 2017 , the Authority had 93,652 in long - tenn debt , which was incurred for the construction of 20 additional T - hangars The authority does not plan to incur any additional debt for planned renovation and expansion projects Economic Factors and Next Years Budgets and Rates Economic Factors Significant economic indicators for the County are as follows Indicator Johnston Co North Carolina 2370 Population Increase 2001 - 2016 4879 2875 Projected Population Increase 2010 - 2035 7231 510 Average Unemployment Rate 2016 460 42,244 Per Capita Income 2016 36,604 Median Household Income 2015 50,512 46,868 7Page2Next Years Budget For fiscal year 2018 , we have budgeted operating revenues to increase as compared to fiscal year 2017 The largest budgeted revenue item for fiscal year 2018 is at FAA Grants at approximately 1,706,670 Budgeted operating expenditures for fiscal year 2018 have increased as compared to fiscal year 2017 The largest of the budgeted operating expenditures is capital improvements in the amount of 2,296,300 Requests for Information This financial report is designed to provide a general overview of the Johnston County Airport Authoritys finances for all those with an interest in the governments 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 8Page3BASIC FINANCIAL STATEMENTSPage4Exhibit I Johnston County Airport Authority , North Carolina Statements of Net Position For the Fiscal Year Ended June 30 , 2017 With Comparative Actual Amounts for the Fiscal Year Ended June 30 , 2016 June 30 , ASSETS June 30 , 2017 2016 Current Assets 803,797 770,372 Cash Trade Accounts Receivable , Net 72,976 69,293 Grants Receivable 7,966 4,152 Sales Tax Receivable 1,740 63,221 52,276 Inventories 23 570 23 576 Prepaid Expenses Total Current Assets 973,270 919,669 Non - current Assets 18,112 162 Capital Assets , Net 17 696 236 18,669,506 19,031,831 Total Assets DEFERRED OUTFLOWS OF RESOURCES 76,857 16 842 LIABILITIES Current Liabilities Trade Accounts Payable 17,690 7,960 Notes Payable - Current 30,535 28,976 3,581 Customer Prepayments 7705 55,930 40,517 Total Cuffent Liabilities Noncurrent Liabilities Notes Payable 63,117 93,660 OPEB Liability 373,749 358,459 29,384 Compensated Absences Payable 22,815 90,031 18,530 Net Pension Liability Total Noncurrcnt Liabilities 549,712 500,033 605,642 540,550 Total Liabilities DEFERRED INFLOWS OF RESOURCES 3,648 9,631 NET POSITION Net investment in capital assets 17,602,584 17,989,526 534,489 Unrestricted 508 966 Total Net Position 18,137 , 073 1 8 _ , 4 98 , 4 9 2 The notes to the financial statements are an integral part of this statement 9Page5Exhibit 2 Johnston County Airport Authority , North Carolina Statements of Revenues , Expenses , and Changes in Fund Net Position For the Fiscal Year Ended June 30 , 2017 With Comparative Actual Amounts for the Fiscal Year Ended June 30 , 2016 June 30 , June 30 , 2017 2016 Operating Revenues 540,353 478,368 Fuel and Oil Sales 5,364 7,104 Aircraft Tiedowns 948 1,845 Vending 576,389 556,859 Hangar Leases and Rents 7,185 5,215 Miscellaneous 120 300 Service Fees 1,047,771 1,132,279 Total Operating Revenues Operating Expenses 408,937 401,973 Salaries and Employee Benefits 422,897 359,955 Cost of Sales 192,282 270,344 Operating 548,133 584,859 Depreciation 1,602,011 1,587,369 Total Operating Expenses 539,598 469,732 Loss from Operations Nonoperating Revenue Expenses 1,122 415 Investment Earnings 4,550 Insurance Recovery 7,240 5,743 Interest Expense Gain Loss on Disposal of Assets 2,275 Total Nonoperating Revenue Expenses 4,621 541,873 474,353 Income Loss Before Contributions and Transfers 108,192 112,934 Capital Contributions Contribution from Primary Government 433,681 361,419 Change in Net Position 18,498,492 18,932,173 Net Position - Beginning of Year 18,137,073 18,498,492 Net Position - End of Year The notes to the financial statements are an integral part of this statement 10Page6Exhibit 3 Johnston County Airpo11 Authority , N011h Carolina Statements of Cash Flows June 30 , 2017 and June 30 , 2016 June 30 , June 30 , 2017 2016 Cash Flows from Operating Activities 1,135,132 1,051,050 Cash Received from Customers 616,388 621,032 Cash Paid for Goods and Services Cash Paid to Employees 387,749 375,188 Net Cash Provided By Used in Operating Activities 130,995 54 830 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 7,240 Interest Expense 5,743 168,933 85,082 Acquisition of Capital Assets 104,968 113,840 Capital Contributions 4,550 Insurance Recovery Repayment of Debt Obligations 28,984 27,488 Net Cash Provided by Used in Capital and Related Financing Activities 98,692 1,420 Cash Flows from Investing Activities 1,122 415 Investments Earnings 33,425 53,825 Net Increase Decrease in Cash 716,547 Cash - Beginning of Year 770,372 803,797 770,372 Cash - End of Year 11 The notes to the financial statements are an integral part of this statement Page7Exhibit 4 Johnston County Airport Authority , North Carolina Statements of Cash Flows June 30 , 2017 and June 30 , 2016 June 30 , June 30 , 2016 2017 Reconciliation of Operating Loss to Net Cash Provided By Used in Operating Activities 539,598 469,732 Operating Loss Adjustment to Reconcile Operating Loss to Net Cash Provided By Used in Operating Activities 548,133 584,859 Depreciation Pension Expense Changes in Assets , DefeITed Outflows of Resources , and Liabilities 2,269 3,683 Trade Accounts Receivable 1,139 2,412 Sales Tax Receivable 5,334 10,945 Inventories 327 6 Prepaid Expenses 3,606 9,730 Trade Accounts Payable 4,124 129 Customer Prepayments 579 60,015 Deferred outflows ofresources for pensions 5,983 50,445 Defened inflows of resources for pensions 43,179 71,501 Net Pension Asset Liability 15,290 39,716 Accrued OPEB liability Payroll Liabilities 6,569 720 Compensated Absences Payable 594,428 600,727 Total Adjustments 54,830 130,995 Net Cash Provided By Used in Operating Activities Supplemental Schedules of Noncash Investing Activities Gain Loss on Sale of Assets 5,743 7,240 Interest Paid 12 The notes to the financial statements are an integral part of this statement Page8JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 Note 1 - Summary of significant accouutiug 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 Countys governing body appoints the Authoritys 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 infonnation 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 I 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 piincipal activity of the Authority Exchange transactions are those in which each party receives and gives up essentially equal values 13Page9JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 Budgetary data - The Authoritys 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 boards 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 necessmy , 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 perfonned The following schedule lists the tasks to be performed and the date by which each is required to be completed June I - 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 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 fonn 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 ; ce1tain 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 , 2017 or 2016 Cash and cash equivalents - All cash is essentially demand deposits For purposes of repmting 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 infonnation 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 14Page0JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 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 nonnal 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 Authmity are depreciated using the straight - line method over the following useful lives Estimated Useful Lives Description 50 Years Tenninal building 75 Years Clearing and excavation Runways , ramps and hangars 60 Years 60 Years Aircraft parking ramp 25 Years Lighting 25 Years Fuel tanks and pumps IO Years Equipment 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 , Defe1Ted 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 one item that meet this criterion contributions made to the pension plan in the 2017 fiscal year 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 , Defe1Ted 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 one item that meets the criterion defe1Tals of pension expense that result from the implementation ofGASB Statement 68 Long - term obligations - Long - tenn debt and other long - tenn 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 Authoritys 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 detennination 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 15Page1JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 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 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 cun - ent 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 confitm this infonnation 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 , 2017 , the Authoritys deposits had a can - ying amount of 803,797 and a bank balance of 860,953 Each bank covers deposits by the federal depository insurance up to 250,000 The amount in excess of the insured limits prescribed by the Federal Deposit Insurance Corporation was 360,953 , which was covered by collateral held under the Pooling method At June 30 , 2017 , the Authority had 245 cash on hand At June 30 , 2016 , the Authoritys deposits had a canying amount of 770,372 and a bank balance of 774,641 Each bank covers deposits by the federal depository insurance up to 250,000 The amount in excess of the insured limits prescribed by the Federal Deposit Insurance Corporation was 287,928 , which was covered by collateral held under the Pooling method At June 30 , 2016 , the Authority had 245 cash on hand 16Page2JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 Note 4 - Inventories Inventories are valued on the first - in first - out FIFO basis and consisted of the following 2016 2017 48,775 61,229 Fuel 1,618 2,246 Oil 374 1,255 Supplies 63,221 52,276 Note 5 - Capital assets Capital asset activity for the year ended June 30 , 2017 was as follows Ending Beginning Decreases & Balances Increases Adjustments Balances Capital assets not being depreciated 900,216 900,216 Land and Easement 530,075 109,524 507,967 131,632 Construction in progress 1,009,740 131,632 530,075 Total capital assets not being depreciated 1,408,183 Capital assets being depreciated 4,330,999 4,330,999 Terminal building 17,749,971 17,749,971 Runway , ramps and hangars 546,911 16,836 530,075 Aircraft parking ramp 74,025 74,025 Vehicles 1,889,012 1,889,012 Clearing and Excavation 1,955,569 37,301 1,918,268 Lighting and Equipment 26,546,487 25,979,111 567,376 Total capital assets being depreciated Less accumulated depreciation for 865,165 772,466 92,699 Tem1inal building 421,052 7,045,778 6,624,726 Runway , ramps and hangars 21,990 16,836 5,154 Aircraft parking ramp 66,959 61,306 5,653 Vehicles 25,187 25,187 Clearing and Excavation 1,834,912 35,114 1,799,798 Lighting and Equipment 9,859,991 9,275,132 584,859 Total accumulated depreciated 16,686,496 17,483 16,703,979 Total capital assets being depreciated , net 17,696,236 18,112,162 114,149 530,075 Total capital assets , net 17Page3JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 Construction Commitments The Authority has active construction projects as of June 30 , 2017 At year - end , the governments commitments with contractors are as follows Remaining Spent to Date Commitment Project 31,572 34,240 Corporate Hangar Project 75,284 969,351 Access Improvement 109,524 1,000,923 Total 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 Atiicle 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 Repmt CAFR for the State of North Carolina The States CAFR includes financial statements and required supplementary infonnation 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 detennined as 185 of the members average final compensation times the members years of creditable service A members average final compensation is calculated as the average of a members 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 Survivors Alternate Benefit for life or a return of the members contributions The plan does not provide for automatic postretirement benefit increases Increases are contingent upon actumial gains of the plan 18Page4JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 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 detennined and set annually by the LGERS Board of Trustees The Authoritys contractually required contribution rate for the year ended June 30 , 2017 , was 732 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 18,820 for the year ended June 30 , 2017 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 tennination before the refund may be paid The acceptance of a refund payment cancels the individuals right to employer contributions or any other benefit provided by LGERS Pension Liabilities , Pensio11 Expense , and Deferred Outflows ofR esources am Deferred Inflows ofR esources Related to Pensio11s At June 30 , 2017 , the Authority reported a liability of 90,031 for its proportionate share of the net pension liability The net pension liability was measured as of June 30 , 2016 The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31 , 2015 The total pension liability was then rolled forward to the measurement date of June 30 , 2016 utilizing update procedures incorporating the actuarial assumptions The Authoritys propottion of the net pension asset was based on a projection of the Authoritys 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 , 2017 , the Authoritys proportion was 0040 , which was an increase of 00003 from its proportion measured as of June 30 , 2016 For the year ended June 30 , 2017 , the Authority recognized pension expense of 24,322 At June 30 , 2017 , the Authority reported deferred outflows ofresources and deferred inflows of resources related to pensions from the following sources Deferred Deferred Outflows of Inflows of Resources Resources 1,691 3,155 Differences between expected and actual experience 6,166 Changes of assumptions 49,776 Net difference between projected and actual earnings on pension plan investments 404 493 Changes in proportion and differences between Authority Contributions and proportionate share of contributions 18,820 Authority contributions subsequent to the measurement date 76 857 3 648 Total 19Page5JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 76,857 reported as deferred outflows of resources related to pensions resulting from Authority contributions subsequent to the measurement date will be recognized as an increase of the net pension asset in the year ended June 30 , 2017 Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows Year Ended June 30 2018 8,339 2019 8,344 2020 23,515 2021 14,191 2022 Thereafter 54,389 Actuarial Assumptions The total pension liability in the December 31 , 2015 actuarial valuation was detennined using the following actuarial assumptions , applied to all periods included in the measurement Inflation 30 Percent Salary Increases 350 to 775 percent , including inflation and productivity factor Investment Rate ofRetum 725 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 cmTent 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 , 2015 valuation were based on the results of an actuarial experience study for the period January 1 , 2010 through December 31 , 2015 Future ad hoc COLA amounts are not considered to be substantively automatic and are therefore not included in the measurement The projected long - tenn 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 retum 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 hist01ical data analysis These projections are combined to produce the long - tenn expected rate of return by weighting the expected future real rates of retum by the target asset allocation percentage and by adding expected inflation The target allocation and best estimates of arithmetic real rates of retum for each major asset class as of June 30 , 2016 are summarized in the following table 20Page6JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 Long - Term Exuected Real Rate of Return Target Allocation Asset Class 14 29 Fixed Income 42 53 Global Equity 8 43 Real Estate 89 Alternatives 8 60 Credit 7 40 Inflation Protection 6 The infonnation above is based on 30 year expectations developed with the consulting actumy for the 2016 asset , liability , and investment policy study for the North Carolina Retirement Systems , including LGERS The long - tenn 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 - tenn inflation assumption of 300 All rates ofretum and inflation are annualized Discount rate The discount rate used to measure the total pension liability was 725 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 plans fiduciary net position was projected to be available to make all projected future benefit payments of the current plan members Therefore , the long - tenn expected rate of return on pension plan investments was applied to all periods of projected benefit payments to detennine the total pension liability Sensitivity of the Countys proportionate share of the net pension asset to changes in the discount rate The following presents the Countys proportionate share of the net pension asset calculated using the discount rate of 725 percent , as well as what the Countys proportionate share of the net pension asset or net pension liability would be if it were calculated using a discount rate that is I - percentage - point lower 625 percent or - percentage - point higher 825 percent than the current rate Current 1 1 Discount Rate Increase Decrease 725 825 625 1 Authority s proportionate share of the net pension 213,685 90,031 13,254 Pension plan fiduciary net position Detailed information about the pension plans fiduciary net position is available in the separately issued Comprehensive Annual Financial Report CAFR for the State of North Carolina 21Page7JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 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 Authoritys plan authorizes the Authority to contribute each month a match amount up to 5 of each eligible participants salary and all amounts contributed are vested immediately Also , the employees may make voluntary contributions to the Plan The Authoritys contributions for June 30 , 2017 were calculated using a covered payroll amount of 182,841 Total contributions for the year were 28,563 , which consisted of 7,711 from the Authority The Authoritys required contributions represented 422 of the covered payroll amount The Authoritys contributions for June 30 , 2016 were calculated using a covered payroll amount of 201,993 Total contributions for the year were 23,870 , which consisted of 7,651 from the Authority The Authoritys required contributions represeuted 379 of the covered payroll amount Other Postemployment Benefits Healthcare Benefits Plan Description Under the tenns of a County resolution , the County administers a single - employer defined benefit Healthcare Benefits Plan the HCB Plan As of January I , 2011 , this plan provides postemployment healthcare benefits to retirees of the County , provided they participate in the North Carolina Local Governmental Employees Retirement System System and have at least twenty years of continuous creditable service with the County if hired after Januaiy I , 2007 , but prior to January I , 2011 Prior to January I , 2007 , employees qualified for similar level benefits after at least ten years of creditable service with the County The County pays the full cost of coverage for these benefits Also , the Countys retirees can purchase coverage for their dependents at the Countys group rates Post Employment benefits are not offered to employees hired after January I , 2011 The County Commissioners may amend the benefit provisions A separate report was not issued for the plan Membership of the HCB Plan consisted of the following at December 31 , 2015 , the date of the latest actuarial valuation MEMBERSHIP Active Members General Employees 5 Number 300,732 Annual Compensation Retired Members Number 22Page8JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 Funding Policy Johnston County pays the full cost of coverage for the healthcare benefits paid to qualified retirees under a County resolution that can be amended by County Commissioners The Authoritys members pay the applicable group rate per month for dependent coverage The County has chosen to fund the healthcare benefits on a pay as you go basis The County pays all premiums for retirees not the Authority The current ARC rate is l 839 of annual covered payroll For the cutTent year , the Authority contributed 34,125 of annual covered payroll The Authority is self - insured The Authoritys required contributions under a County resolution for employees not engaged in law enforcement was 00 of covered payroll There were no contributions made by employees The Authoritys obligation to contribute to HCB Plan is established and may be amended by the County Commissioners Summa , y of Significant Accounting Policies Postemployment expenditures will be paid by the Authority No funds are set aside to pay benefits and administration costs These expenditures are paid as they come due Annual OPEB Cost and Net OPEB Obligation The Authoritys annual OPEB cost expense is calculated based on the annual required contribution of the employer ARC , an amount actuarially detennined in accordance with the parameters of GASB Statement 45 The ARC represents a level of funding that , if paid on an ongoing basis is projected to cover nonnal cost each year and amortize any unfunded actuarial liabilities or funding excess over a period not to exceed thiity years The following table shows the components of the Authoritys annual OPEB cost for the year , the amount actually contributed to the plan , and changes in the Authoritys net OPEB obligation for the healthcare benefits 55,298 Annual required contribution 15,081 Interest on net OPEB obligation 20,965 Adjustment to annual required contribution 49,414 Annual OPEB cost expense 34,125 Contributions made 15,289 Increase decrease in net OPEB obligation 358,459 Net OPEB obligation , beginning of year NET OPEB obligation , end of year 373,748 The Countys annual OPEB cost , the percentage of annual OPEB cost contributed to the plan , and the net OPEB obligation for 2017 were as follows Percentage of Annual OPEB For Year NetOPEB Annual Cost Ended June Obligation OPEB Cost Contributed 30 318,743 48,383 2015 3162 358,459 47,230 2016 1591 373,749 49,414 2017 6906 23Page9JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL ST AT EMENTS For the Year Ended June 30 , 2017 Funded Status and Funding Progress As of December 31 , 2015 , the most recent actuarial valuation date , the plan was not funded The actuarial accrued liability for benefits and , thus , the unfunded actuarial accrued liability UAAL was 761,153 The covered payroll annual payroll of active employees covered by the plan was 300,732 , and the ratio of the UAAL to the covered payroll was 25310 percent Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future Examples include assumptions about future employment , m01iality , and healthcare trends Amounts detennined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future The schedule of funding progress , presented as required supplementmy infonnation following the notes to the financial statements , presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan the plan as understood by the employer and the plan members and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members at that point The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short - tenn volatility in actuarial accrued liabilities and the actuarial value assets , consistent with the long - tenn perspective of the calculations In the June 30 , 2016 actuarial valuation , the projected unit credit actuarial cost method was used The actuarial assumptions included a 40 percent investment rate of return net of administrative expenses , which is the expected long - term investment returns on the employers own investments calculated based on the funded level of the plan at the valuation date , a pre - medicare trend rate of775 to 500 percent , and a post - medicare trend rate of 575 to 500 percent , annually Both rates included a 300 percent inflation assumption The actuarial value of assets , if any , was detennined using techniques that spread the effects of short - term volatility in the market value of investments over a 5 year period The UAAL is being am01iized as a level percentage of projected payroll on an closed basis The remaining amortization period at June 30 , 2016 , was 30 years 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 employees 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 24Page0JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 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 perfonnance bonded through a commercial surety bond The finance officer is bonded for 50,000 Note 9 - Claims , Judgments and Contingent Liabilities At June 30 , 2017 , the Authority was a defendant to various lawsuits In the op1mon of the Authoritys management and the County Attorney , the ultimate effect of these legal matters will not have a material adverse effect on the Authoritys financial position Note 10 - Long Term Debt Obligations Other Long - Term Debt Loan executed 6 6 05 to finance the construction of 20 additional T - Hangars in the amount of 360,000 at an interest rate of 525 , principal to be repaid in 180 monthly payments , the first principal payment being 93,652 due on or before 7 1 05 93,652 Total Annual debt service requirements to maturity for the Authoritys debt are as follows Total Debt Due Capitalized Leases Other Debt Year Ending Interest Princi12al Princi12al Interest Interest Princi12al June 30 , 30,402 7,326 7,326 30,402 2018 2,691 32,037 2,691 32,037 2019 28,935 968 968 28,935 2020 2021 91,374 10,985 10,985 91,374 25Page1JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 Changes in Long - Te1m Liabilities The following is a sununary of changes in the Airport Authoritys long - term obligations for the fiscal year ended June 30 , 2017 Balance Balance Cun - en Portion 6 30 16 Additions Retirements 6 30 17 of Balance Installment Purchase 122,636 28,984 93,652 30,535 Other postemployment benefits 358,459 15,290 373,749 Compensated absences 29,384 6,569 22,815 Net Pension Liability 90,031 90,031 Total 510,479 98,752 28,984 580,247 30,535 Note 11 - Rental income under operating lease The Authority is a lessor of 97 airport hangars and ground space The noncancelable lease tenns range from three to five years and are renewable at the end of the lease tenn The Authority retains title to the lease property The lessee pays insurance , taxes and assessments The following is a schedule by year of future rental income to be received under noncancelable operating leases in effect as of Year Ending June 30 Amount 2018 144,074 2019 70,274 2020 37,304 2021 29,304 2022 29,304 310,260 26Page2JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2017 Note 12 - Related Organization The five - member board of the Johnston County Ai1port Authority is appointed by the board of Johnston County The County is accountable for the Airport Authority because it appoints the governing board ; however , the County is not financially accountable for the Airport Authority The Airport Authority is disclosed as a related organization in the notes to the financial statements for Johnston County , as well as presented as a component unit of the County Complete financial statements for the County can be obtained from the Countys office at 207 East Johnston Street , Smithfield , NC 27577 Note 13 - Summary Disclosure of Significant Contingencies The authority has received proceeds from several Federal and State grants Periodic audits of these grants are required and certain costs may be questioned as not being appropriate expenditures under the grant agreements Such audits could result in the refund of grant monies to the grantor agencies Management believes that any required refunds will be immaterial No provision has been made in the accompanying financial statements for the refund of grant monies Note 14 - Subsequent Events Management has evaluated subsequent events through December 7 , 2017 , the date on which the financial statements were available to be issued 27Page3REQUIRED SUPPLEMENTARY INFORMATIONPage4Jolmston County Airport Authority , North Carolina Exhibit A - 1 Other Post Employment Benefits Required Supplementary Informatiou Schedule of Funding Progress June 30 , 2017 Covered Actuarial Actuarial Accrued Unfunded Payroll for UAALasa Actuarial Value of Liability AAL AAL Funded Year Ending Percentage of UAAL Valuation Assets Proj Unit Credit Ratio On Val Date Covered Payroll Date b b - a a b a c Hb - a I c 12 31 2010 461,331 461,331 000 227,782 20253 12 31 2012 469,430 469,430 000 248,935 18858 540,742 540,742 12 31 2014 000 233,837 23125 761,153 761,153 300,732 6 30 2016 000 25310 28Page5Johnston County Airport Authority , North Carolina Exhibit A - 2 Other Post Employment Benefits Required Supplementary Information Schedule of Employer Contributions June 30 , 2017 Percentage Annual Required Year Ended Contribution Contributed June 30 3162 52,624 2015 1591 51,370 2016 6906 55,298 2017 Notes to the Required Schedules The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated Additional information as of the latest actuarial valuation follows 6 30 2016 Valuation date Projected unit credit Actuarial cost method Level Dollar Amount , Closed Amortization method 30 years Remaining amortization period Market Value of Assets Asset valuation method Actuarial assumptions Investment rate of return 400 775 - 500 Pre - Medicare trend rate 575 - 500 Post - Medicare trend rate 2022 Year of Ultimate trend rate 300 Includes inflation at 29Page6Exhibit A - 3 Johnston County Airport Authority , North Carolina Proportionate Share of Net Pension Liability Asset Required Supplementary Information Last Fou