Airport Authority Financial Statements Year Ending June 30, 2019

10 JOHNSTON COUNTY AIRPORT AUTHORITY Smithfield , North Carolina Financial Section Year Ended June 30 , 2019 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 Tim Stevens , Secretary Dwight Lowery Bruce JohnsonPageJOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2019 Page s FINANCIAL SECTION INDEPENDENT AUDITORS REPORT 1 - 3 MANAGEMENT DISCUSSION AND ANALYSIS 4 - 8 BASIC FINANCIAL STATEMENTS Statements of Net Position 9 2 Statements of Revenues , Expenses and Changes in Fund Net Position 10 3 - 4 Statements of Cash Flows 11 - 12 NOTES TO THE FINANCIAL STATEMENTS 13 - 27 REQUIRED SUPPLEMENTARY INFORMATION Schedule of the Proportionate Share of the Net Pension Asset - Local Government A - 1 Employees Retirement System 28 A - 2 Schedule of Contributions - Local Government Employees Retirement System 29 A - 3 Schedules of Changes in Total OPEB Liability and Related Ratios 30 SUPPLEMENTAL FINANCIAL DATA B - 1 Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP - Operating Fund 31 - 32 B - 2 Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP - Airport 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 0MB 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 42PageFINANCIAL SECTION Independent Auditor • s Report Management • s Discussion and Analysis Government - wide Financial Statements Fund Financial Statements Notes to Financial StatementsPagePage pageNumber5Thompson , Price , Scott , Adams & Co , PA PO Box 398 1626 S Madison Street Whiteville , NC 28472 Telephone 910 642 - 2109 Fax 910 642 - 5958 Alan W Thompson , CPA R Bryon Scott , CPA Gregory S Adams , CPA CERTIFIED 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 , 2019 and June 30 , 2018 , 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 opm1ons 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 plari 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 American Institute ofCPAs - N C Association of CPAs - 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 , 2019 and June 30 , 2018 , 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 Other Postemployment Benefits 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 · o f 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 opm10ns 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 A wards , 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 2PagePage pageNumber7Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated January 22 , 2020 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 performed in accordance with Government Auditing Standards in considering Johnston County Airport Authoritys internal control over financial reporting and compliance Whiteville , NC January 22 , 2020 3PagePage pageNumber8Managements 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 , 2019 We encourage readers to read the information presented here in conjunction with the additional information that we have furnished in the Authoritys 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 18,499,346 net position Of this amount , 698,491 unrestricted net position may be used to meet the governments ongoing obligations to citizens and creditors • The Authoritys total net position increased by 660,702 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 1 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 financial condition of the Authority Basic Financial Statements Financial Statements - These statements focus on the activities of the individual parts 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 • The Statements of Net Position presents information on all of the Authoritys 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 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 18,499,346 at the close of the most recent fiscal year By far the largest portion of Authoritys net assets 10378 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 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 2019 2018 2017 804,849 864,450 973,270 Current and Other Assets 19,228,754 18,257,096 17,696,236 Capital Assets 230,253 66,300 Deferred outflows 76,857 20,263,856 19,187,846 18,746,363 Total Assets and Deferred Outflows 1,357,461 1,193,563 459,681 Long - term Liabilities 281,101 53,647 145,961 Other Liabilities 125,948 101,992 3,648 Deferred inflows 1,764,510 1,349,202 Total Liabilities and Deferred 609,290 Net Position 19,197,837 18,193,993 Net investment in capital assets 17,602,583 698,491 355,349 Unrestricted 534,490 18,499,346 17,838,644 18,137,073 Total Net Position 5Page0• Assets increased during the year by 912,057 because of a increase in capital assets from Fiscal Year 2018 to 2019 by approximately 971,658 offset by a decrease in current assets of 59,601 • Liabilities increased during the year by 391,352 , primarily due to increases in OPEB and LGERS liabilities • Net position increased during the year by 660,702 to reflect the Authoritys excess of revenues over expenditures and increases in capital assets Johnston County Airport Authoritys Changes in Net Position 2019 2018 2017 Operating Revenues 1,543,189 1,336,121 1,132,279 2,205,935 Operating Expenses 2,020,950 1,602,011 662,746 Net Income Loss from Operations 684,829 469,732 87,975 4,621 N onoperating Revenue Expenses 2,965 Income Loss Before Contributions 574,771 687,794 474,353 and Transfers 1,168,805 Capital Contributions 1,023,147 112,934 Contribution from Primary 66,668 Government 106,674 660,702 442,027 361,419 Change in Net Position 17,838,644 Net Position , Beginning of Year 18,137,073 18,498,492 740,456 Restatement 17,838,644 17,396,617 18,498,492 Net Position , Restated 18,499,346 17,838,644 18,137,073 Net Position , End of Year Operating Revenue In fiscal year 2019 , total operating revenues were 1,543,189 , which equated to an increase from 2018 of 207,068 or 1550 This increase resulted from a significant increase in fuel and oil sales of approximately 150,951 from fiscal year 2018 to 2019 6Page1Operating Expenses In fiscal year 2019 , total operating expenses were 2,205,935 which equated to a increase from 2018 of 184,985 or 915 There were increases in cost of sales , which increased approximately 96,516 , or 1623 and repairs & maintenance , which increased approximately 13,642 , or 1322 Capital Asset and Debt Administration Capital assets At the end of 2019 , the Authority had a total net investment in capital assets of 19,228,754 net of accumulated depreciation This investment in capital assets includes land , land improvements , buildings , equipment and construction in progress The total increase in the Authoritys investment in capital assets for the current fiscal year was 532 percent Johnston County Airport Authoritys Capital Assets net of depreciation 2017 2019 2018 900,216 900,216 Land 900,216 11,236,180 9,849,403 10,290,099 Land Improvements 2,877,120 1,863,825 Clearing and Excavation 1,838,638 3,465,834 3,787,687 3,889,222 Buildings 120,656 53,104 82,912 Equipment 1,761,224 1,256,009 109,524 Construction in Process 17,696,235 19,228,754 18,257,096 Total Long - term debt At June 30 , 2019 , the Authority had 30,917 in long - term 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 North Carolina Johnston Co Indicator 2660 5690 Population Increase 2001 - 2018 2150 5030 Projected Population Increase 2020 - 2039 390 360 Average Unemployment Rate 2018 46,117 39,922 Per Capita Income 2018 52,752 54,610 Median Household Income 2017 7Page2Next Years Budget For fiscal year 2020 , we have budgeted operating revenues to increase as compared to fiscal year 2019 The largest budgeted revenue item for fiscal year 2020 is at FAA Grants at approximately 7,045,981 Budgeted operating expenditures for fiscal year 2020 have increased as compared to fiscal year 2019 , due to capital projects The largest of the budgeted operating expenditures is operations in the amount of 1,849,292 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 1 Johnston County Airport Authority , North Carolina Statements of Net Position For the Fiscal Year Ended June 30 , 2019 With Comparative Actual Amounts for the Fiscal Year Ended June 30 , 2018 ASSETS June 30 , June 30 , 2018 2019 Current Assets Cash 486,906 709,082 Trade Accounts Receivable , Net 86,937 103,283 Grants Receivable 182,659 Sales Tax Receivable 10,632 12,514 Inventories 18,140 27,816 Prepaid Expenses 19,575 11 , 755 Total Current Assets 804,849 864,450 Non - current Assets Capital Assets , Net 19,228,754 18,257,096 Total Assets 20,033,603 19,121 , 546 DEFERRED OUTFLOWS OF RESOURCES 230,253 66,300 LIABILITIES Current Liabilities Trade Accounts Payable 229,854 15 , 430 Notes Payable - Current 30,917 32,177 Customer Prepayments 20,330 6,040 Total Current Liabilities 281 , 101 53 , 647 Noncurrent Liabilities Notes Payable 30,926 OPEB Liability 1,221,789 1,065;513 Compensated Absences Payable 29,872 30,079 Net Pension Liability 105,800 67,045 Total Noncurrent Liabilities 1,357,461 1,193,563 Total Liabilities 1,638,562 1,247,210 DEFERRED INFLOWS OF RESOURCES 125,948 101 , 992 NET POSITION Net investment in capital assets 19,197,837 18,193,993 Unrestricted 698,491 355,349 Total Net Position 18,499,346 17,838,644 9 The notes to the financial statements are an integral part of this statement Page5Exhibit 2 Johnston County Airport Authority , North Carolina Statements of Revenues , Expenses , and Changes in Fund Net Position For the Fiscal Year Ended June 30 , 2019 With Comparative Actual Amounts for the Fiscal Year Ended June 30 , 2018 June 30 , June 30 , 2018 2019 Operating Revenues Fuel and Oil Sales 727,928 878,879 Aircraft Tiedowns 13,015 8,033 Vending 527 586 589,131 Hangar Leases and Rents 627,203 Miscellaneous 22,165 10,168 275 Service Fees 1,400 Total Operating Revenues 1,543,189 1,336,121 Operating Expenses 524,576 510,915 Salaries and Employee Benefits 594,739 Cost of Sales 691,255 324,496 Operating 402,619 590,800 Depreciation 587,485 Total Operating Expenses 2,205,935 2,020,950 662,746 Loss from Operations 684,829 N onoperating Revenue Expenses 516 1,214 Investment Earnings Insurance Recovery 90,000 Hangar Proceeds from Blue Line Hangar Buyout 2,541 4,179 Interest Expense Gain Loss on Disposal of Assets 2,965 Total Nonoperating Revenue Expenses 87,975 687,794 Income Loss Before Contributions and Transfers { 574,771 1,168,805 1,023,147 Capital Contributions 106,674 Contribution from Primary Government 66,668 660,702 442,027 Change in Net Position 17,838,644 18,137,073 Net Position - Beginning of Year 740,456 Restatement 17,838,644 17,396,617 Net Position - Beginning of Year , Restated 18,499,346 17,838,644 Net Position - End of Year The notes to the financial statements are an integral part of this statement Page6Exhibit 3 Johnston County Airpo11 Authority , N011h Carolina Statements of Cash Flows June 30 , 2019 and June 30 , 2018 June 30 , June 30 , 2019 2018 Cash Flows from Operating Activities 1,293,375 Cash Received from Customers 1,575,707 877,594 874,275 Cash Paid for Goods and Services 466,428 Cash Paid to Employees 469,747 228,366 Net Cash Provided By Used in Operating Activities 47,328 Cash Flows from Noncapital Financing Activities 66,668 106,674 Operating Transfer from Primary Government 66,668 106,674 Net Cash Provided By Used in Noncapital Financing Activities Cash Flows from Capital and Related Financing Activities 2,541 4,179 Interest Expense 1,151,660 1,559,144 Acquisition of Capital Assets 1,031,113 Capital Contributions 986,145 Insurance Recovery Hangar Buyout Gain Loss 90,000 32,186 30,549 Repayment of Debt Obligations 517,726 Net Cash Provided by Used in Capital and Related Financing Activities 155,275 Cash Flows from Investing Activities 1,214 516 Investments Earnings 222,176 94,715 Net Increase Decrease in Cash 709,082 803,797 Cash - Beginning of Year 486,906 709,082 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 , 2019 and June 30 , 2018 June 30 , June 30 , 2019 2018 Reconciliation of Operating Loss to Net Cash Provided By Used in Operating Activities Operating Loss 662,746 684,829 Adjustment to Reconcile Operating Loss to Net Cash Provided By Used in Operating Activities Depreciation 587,485 590,800 Changes in Assets , Deferred Outflows of Resources , and Liabilities Trade Accounts Receivable 16,346 30,307 Sales Tax Receivable 10,774 1,882 Inventories 9,676 35,405 Prepaid Expenses 7,820 11,815 Trade Accounts Payable 214,424 2,260 Customer Prepayments 14,290 1,665 Deferred outflows of resources for pensions 31,326 26,197 Increase in deferred outflows ofresources - OPEB 132,625 15,640 Deferred inflows of resources for pensions 1,147 1,152 Increase in deferred inflows of resources - OPEB 25,103 99,496 Net Pension Asset Liability 38,755 22,986 Decrease in net OPEB liability 156,276 48,692 Payroll Liabilities Compensated Absences Payable 207 7,264 Total Adjustments 891,112 637,501 Net Cash Provided By Used in Operating Activities 228,366 { 47,328 Interest Paid 2,541 4,179 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 , 2019 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 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 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 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 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 13Page9JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 June 1 - The budget and the budget message shall be submitted to the governing board The public hearing on the budget shall be scheduled at this time July 1 - The budget ordinance shall be adopted by the governing board 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 govermnent 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 , 2019 or 2018 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 14Page0JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 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 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 one item that meet this criterion contributions made to the OPEB or pension plan in the 2019 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 , 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 one item that meets the criterion deferrals of pension expense that result from the implementation of GASB Statement 68 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 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 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 15Page1JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 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 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 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 At June 30 , 2018 , the Authoritys deposits had a carrying amount of 708,837 and a bank balance of 935,810 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 435,810 , which was covered by collateral held under the Pooling method At June 30 , 2018 , 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 2019 2018 18,005 26,869 Fuel 135 798 Oil 149 Supplies 18,140 27,816 16Page2JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 Note 5 - Capital assets Capital asset activity for the year ended June 30 , 2019 was as follows Beginning Decreases & Ending Balances Increases Adjustments Balances Capital assets not being depreciated Land and Easement 900,216 900,216 - - 1,256,010 1,545,109 1,039,895 1,761,224 Construction in progress Total capital assets not being depreciated 2,156,226 1,545,109 1,039,895 2,661,440 Capital assets being depreciated 4,330,999 4,330,999 Terminal building 17,749,971 17,749,971 Runway , ramps and hangars Aircraft parking ramp 546,911 546,911 74,025 74,025 Vehicles 1,889,012 1,039,895 Clearing and Excavation 2,928,907 1,960,743 14,035 1,974,778 Lighting and Equipment Total capital assets being depreciated 26,551,661 1,053,930 27,605,591 Less accumulated depreciation for 957,865 92,699 1,050,564 Terminal building Runway , ramps and hangars 7,461,286 415,508 7,876,794 Aircraft parking ramp 30,824 8,835 39,659 72,612 25,187 Vehicles 97,799 Clearing and Excavation 50,374 1,413 51,787 1,877,831 43,843 Lighting and Equipment 1,921,674 10,450,792 587,485 Total accumulated depreciated 11,038,277 16,100,869 466,445 16,567,314 Total capital assets being depreciated , net 18,257,095 2,011,554 1,039,895 Total capital assets , net 19,228,754 Construction Commitments The Authority has active construction projects as of June 30 , 2019 At year - end , the governments commitments with contractors are as follows Spent to Remaining Commitment Project Date 665,890 778 Corporate Hangar Project 1,399,027 Blue Line FBO Site Development 475,958 25,540 592,460 Drainage Improvements 192,843 169,157 Airport Master Plan 1,360,231 2,161,422 Total 17Page3JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 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 States 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 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 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 Authoritys contractually required contribution rate for the year ended June 30 , 2019 , was 780 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 23,053 for the year ended June 30 , 2019 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 18Page4JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 Pension Liabilities , Pension Expense , and Deferred Outflows ofR esources and Deferred Inflows ofR esources Related to Pensions At June 30 , 2019 , the Authority reported a liability of 105,800 for its proportionate share of the net pension liability The net pension liability was measured as of June 30 , 2018 The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31 , 2017 The total pension liability was then rolled forward to the measurement date of June 30 , 2018 utilizing update procedures incorporating the actuarial assumptions The Authoritys proportion 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 , 2019 , the Authoritys proportion was 4389 , which was an increase of 00073 from its proportion measured as of June 30 , 2018 For the year ended June 30 , 2019 , the Authority recognized pension expense of 29,335 At June 30 , 2019 , 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 16,322 Differences between expected and actual experience 548 28,075 Changes of assumptions 14,523 Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between Authority 13 801 Contributions and proportionate share of contributions 23,053 Authority contributions subsequent to the measurement date 81,986 Total 1,349 23,053 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 , 2020 Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows Year Ended June 30 2020 27,927 2021 18,124 2022 3,199 8,335 2023 2024 Thereafter 57,584 19Page5JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 Actuarial Assumptions The total pension liability in the December 31 , 2017 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 , 2017 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 , 2018 are summarized in the following table Long - Term Exuected Real Rate Asset Class Target Allocation of Return 29 Fixed Income 14 Global Equity 42 53 Real Estate 8 43 8 Alternatives 89 7 Credit 60 6 Inflation Protection 40 The information above is based on 30 year expectations developed with the consulting actuary for the 2017 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 3 00 All rates of return and inflation are annualized 20Page6JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 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 plans 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 Countys proportionate share of the net pension asset to changes in the discount rate The following presents the Countys propmiionate share of the net pension asset calculated using the discount rate of 700 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 600 percent or - percentage - point higher 800 percent than the current rate 1 1 Current Decrease Discount Rate Increase 600 700 800 Authoritys proportionate share of the net pension 254,141 105,800 18,156 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 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 , 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 Authoritys required contributions represented 433 of the covered payroll amount The Authoritys contributions for June 30 , 2018 were calculated using a covered payroll amount of 272,711 Total contributions for the year were 28,062 , which consisted of 9,188 from the Authority The Authoritys required contributions represented 337 of the covered payroll amount 21Page7JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 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 , 2018 and June 30 , 2019 , the HCB Plan membership consisted of the following 2018 2019 Inactive plan members or beneficiaries currently receiving benefit payments Inactive plan members entitled to but not yet receiving benefit payments 3 6 Active plan members 4 7 Total OPEB Liability The Authoritys total OPEB liability of 1,221,789 was measured as of June 30 , 2018 and was determined by an actuarial valuation as of that date Actuarial assumptions and other inputs The total OPEB liability in the June 30 , 2018 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 389 Discount rate 22Page8JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 Health Care Cost Trends 7 25 for 2018 decreasing to an ultimate rate of Pre - Medicare 475 by 2028 5 3 8 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 Balances at June 30 , 2018 1,065,513 Changes for the Year Service Cost 29,747 Interest 37,535 Differences between Expected and Actual 170,957 experience Changes of assummptions 57,730 Benefit Payments 24,203 Net Changes 156,306 Balances at June 30 , 2019 1,221,819 Changes of assumptions Since the Prior Measurement Date , the Discount Rate has changed from 356 to 389 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 , 2018 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 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 , 2018 valuation were based on a review of recent plan experience done concurrently with the June 30 , 2018 valuation Discount Rate The discount rate used to measure the total OPEB liability at June 30 , 2019 and June 30 , 2018 was 389 and 356 , respectively 23Page9JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 Sensitivity oft he new OP EB liability to changes in the discount rate The following presents the net OPEB liability of the County at June 30 , 2019 , as well as what the Countys net OPEB liability would be if it were calculated using a discount rate that is I - percentage - point lower 289 or 1 - percentage - point higher 489 than the current discount rate 1 Decrease Discount Rate 1 Increase 289 389 489 1,476,530 1,025,336 Total OPEB Liability 1,221,789 Sensitivity oft he net OP EB 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 I - percentage - point lower or I - percentage - point higher than the current healthcare cost trend rate 1 Decrease Discount Rate 1 Increase 1,013,629 Total OPEB Liability 1,221,789 1,494,389 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30 , 2019 , the County recognized OPEB expense of 59,478 At June 30 , 2019 , 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 137,541 experience Changes of assumptions 124,599 Net Difference between projected and actual earnings on plan investments 10,724 County contributions subsequent to the measurement date 148,265 Total 124,599 24Page0JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 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 3,564 2020 3,564 2021 3,564 2022 2,250 2023 2024 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 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 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 , 2019 , the Authority was not a defendant against any lawsuits 25Page1JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 Note 10 - Long Term Debt Obligations Other Long - Term Debt Direct placement 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 5 25 , principal to be repaid in 180 monthly payments , the first principal payment being due on or before 7 1 05 The property is pledged as collateral while the debt is outstanding In the event of default the 30,917 outstanding balance is immediately due , including any accrued interest 30,917 Total Annual debt service requirements to maturity for the Authoritys debt are as follows Other Debt Capitalized Leases Total Debt Due Year Ending Principal Interest Principal Interest Principal Interest June 30 , 820 2020 30,917 820 - - 30,917 2021 2022 30,917 820 30,917 820 - - Changes in Long - Term Liabilities The following is a summary of changes in the Airport Authoritys long - term obligations for the fiscal year ended June 30 , 2019 Balance Current Portion Balance 6 30 19 Retirements of Balance 6 30 18 Additions 32,186 30,917 30,917 63,103 Installment Purchase - 1,221,789 1,065,513 156,276 Net OPEB Liability 29,872 30,079 207 Compensated absences 67,045 105,800 38,755 Net Pension Liability 32,393 1,388,378 1,225,740 195,031 30,917 Total 26Page2JOHNSTON COUNTY AIRPORT AUTHORITY , NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Year Ended June 30 , 2019 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 property The lessee pays insurance , taxes and assessments 7 of the existing hangars are being torn down to make room for a new Blue Line Facility 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 2020 92,350 2021 70,100 2022 53,100 2023 18,900 2024 18,000 252,450 Note 12 - Related Organization The five - member board of the Johnston County Airport 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 January 22 , 2020 , the date on which the financial statements were available to be issued 27Page3REQUIRED SUPPLEMENTARY INFORMATIONPage4Exhibit A - 1 Johnston County Airport Authority , North Carolina Proportionate Share of Net Pension Liability Asset Required Supplementary Information Last Six Fiscal Years Local Government Employees Retirement System 2019 2018 2017 2016 2015 2014 - 000418 000833 Authoritys proportion of the net pension liability asset 044597 043886 000424 000395 Authoritys proportion of the net pension liability asset 105,800 67,045 90,031 17,728 24,649 49,142 257,106 240,987 235,877 235,877 236,702 246,325 Authoritys covered payroll Authoritys proportionate share of the net pension liability asset as a 4115 27 82 3817 752 - 1041 1995 percentage of its covered payroll Plan fiduciary net position as a percentage of the total pension 9435 9163 9418 9147 9809 10264 liability The amounts presented for each fiscal year were detennined as of the prior fiscal year ending June 30 This will be the same percentage for all participant employers in the LGERS plan 28Page5Exhibit A - 2 Johnston County Airport Authority , North Carolina Contributions Required Supplementary Information