2014 Comprehensive Annual Financial Report
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ALBANY COUNTY AIRPORT AUTHORITY New York’s Tech Valley Airport COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2014 A COMPONENT UNIT OF THE COUNTY OF ALBANY LOCATED IN THE TOWN OF COLONIE NEW YORK Albany County Airport Authority As of December 31, 2014 Authority Board Members Rev. Kenneth J. Doyle Dorsey M. Whitehead Chair Treasurer Term Expires: December 31, 2015 Term Expires: December 31, 2016 Anthony Gorman Lyon M. Greenberg, MD Patricia M. Reilly Secretary Member Member Term Expires: December 31, 2016 Term Expires: December 31, 2017 Term Expires: December 31, 2016 Robert S. Hite, Esq. Paula T. Wilkerson Member Member Term Expires: December 31, 2017 Term Expires: December 31, 2016 Authority Management John A. O’Donnell, PE Chief Executive Officer William J. O’Reilly, CPA Chief Financial Officer Peter F. Stuto, Esq. Airport Counsel ALBANY COUNTY AIRPORT AUTHORITY COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended December 31, 2014 Prepared by the Finance Department William J. O’Reilly, CPA Chief Financial Officer Margaret Herrmann Chief Accountant A Component Unit of the County of Albany Town of Colonie, New York www.albanyairport.com CUSIP #012123XXX TABLE OF CONTENTS PAGE(S) I. INTRODUCTORY SECTION Albany County Airport Authority: Members and Principal Officers ..................................... Inside Front Cover Chairman’s Message ...................................................................................... 1 Letter of Transmittal ................................................................................... 2-11 Organizational Chart ..................................................................................... 12 Certificate of Achievement for Excellence in Financial Reporting ................. 13 II. FINANCIAL SECTION Independent Auditor’s Report ................................................................... 16-18 Management’s Discussion and Analysis .................................................. 19-34 Financial Statements: Comparative Statements of Net Position.............................................. 36-37 Comparative Statements of Revenues, Expenses and Changes in Net Position ....................................................................... 38 Comparative Statements of Cash Flows ................................................... 39 OPEB Trust Statements of Fiduciary Fund Net Position ........................... 40 OPEB Statements of Changes in Fiduciary Fund Net Position ................. 41 Notes to Financial Statements ............................................................. 43-67 Required Supplementary Information: OPEB Trust Schedule of Funding Progress .............................................. 70 Other Supplemental Information: Schedule of Debt Service Requirements to Maturity ................................. 72 Schedule of Governmental Payments and Services ................................. 73 III. STATISTICAL SECTION Total Annual Revenues, Expenses and Changes in Net Position ............ 76-77 Changes in Cash and Cash Equivalents .................................................. 78-79 Principal Revenue Sources and Cost per Enplaned Passenger .............. 80-81 Ratios of Outstanding Debt ...................................................................... 82-83 Revenue Bond Debt Service Coverage ................................................... 84-85 Population in the Air Trade Area ................................................................... 86 Major Employers in Air Trade Area ............................................................... 87 i Colleges and Universities in the Air Trade Area ............................................ 88 Airport Information ......................................................................................... 89 Enplaned Passengers .............................................................................. 90-91 Airline Landed Weights ............................................................................ 92-93 Aircraft Operations ................................................................................... 94-95 Airlines Serving the Albany International Airport ........................................... 97 Scheduled Jet Airline Service ........................................................................ 98 Scheduled Commuter Airline Service ............................................................ 99 Primary Origination and Destination Passenger Markets ............................ 100 IV. COMPLIANCE SECTION Independent Auditor’s 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 ................................................... 102-103 Schedule of Expenditures of Federal and New York State Department of Transportation Financial Assistance and Notes thereto ....................................................................... 104-105 Independent Auditor’s Report on Compliance for each Major Federal Program and on Internal Control over Compliance Required by OMB Circular A-133 .................... 106-107 Independent Auditor’s Report on Compliance for the New York State Department of Transportation Financial Assistance Program and Report on Internal Control Over Compliance Required by New York State Codification of Rules and Regulations ........... 108-109 Schedule of Findings and Questioned Costs .............................................. 110 Independent Auditor’s Report on Compliance for the Passenger Facility Charge Program and Report on Internal Control over Compliance Required by the Federal Aviation Administration ..... 111-112 Schedule of Passenger Facility Charges Collected and Expended And Notes thereto ............................................................................... 113 Passenger Facility Charge Program Schedule of Findings And Questioned Costs ......................................................................... 114 Biographies of the Members of the Albany County Airport Authority .............. 115-116 Biographies of the Albany County Airport Authority Senior Staff ........................... 117 ii Introduction ALBANY COUNTY AIRPORT AUTHORITY TELEPHONE: 518-242-2222 ALBANY INTERNATIONAL AIRPORT ADMIN FAX: 518-242-2641 ADMINISTRATION BUILDING FINANCE FAX: 518-242-2640 SUITE 200 SITE: www.albanyairport.com ALBANY, NEW YORK 12211-1057 Chairman’s Message March 23, 2015 In 2014 the US Domestic Airlines faced some unusual challenges including horrible first Quarter weather conditions leading to substantially higher cancellations and 3rd quarter network outages related to FAA Control Center outage in Chicago. As the year ended, jet fuel prices declined sharply and the Airline Industry ended 2014 with Pre-Tax Profits of $9.5 billion equal to 6% of Revenue and showed signs of growth. According to the Airlines for America, an industry trade association, domestic airline seat capacity grew to its highest level since 2009 and another ninety thousand seats per day were added in the first quarter of 2015. Albany International Airport will also see increased airline activity in 2015 as well with the expected introduction of JetBlue service at Albany in late 2015. During 2014, the Authority continued to operate the Albany International Airport prudently based upon its assessment of passenger traffic and airline capacity. The Authority operated in accordance with its adopted operating budget while advancing capital projects as planned and meeting all debt service requirements. Based upon its financial performance for 2014, the Authority was able to provide $1.7 million in rates and charges credits to the airlines that are a party to the Airport Use and Lease Agreement. These settlement credits provide the Airlines with a good down payment on their 2015 Airport costs at Albany International Airport. During 2014 the Albany County Airport Authority began its expansion of its largest Maintenance Repair and Overhaul (MRO) facility which enabled it locate one its regional Airline’s MRO operations and associated jobs to Albany. The Albany County Airport Authority also adopted a $120.5 million five year capital plan for 2015-2019 that was approved by the County and will include parking expansion. Also during the 2014 the Paradies Shops began their $1.4 million renovation of the three retail, news and gift stores in the terminal and HMS Host began a significant mid-contract refreshment of four of the six food and beverage concessions under their contract. But perhaps the most significant construction project to begin in 2014 was a $1.3 million project to double the size of the baggage handling room for Southwest Airlines. This expanded baggage handling room will allow for Southwest Airlines to handle more bags and more passengers at Albany. During 2015, the Airport Authority will continue to nurture the development of air service at the Airport, plan and execute its capital plan one project at a time, and operate the Airport in accordance with its adopted budget. In the coming year, we will continue our mission to provide travelers with outstanding service in full recognition that our success as an airport is dependent on, not only the quantity and quality of air service, but the skills and dedication of all the employees at Albany International Airport. Rev. Kenneth J. Doyle Chairman 1 Albany County Airport Authority Introduction ALBANY COUNTY AIRPORT AUTHORITY TEL: 518-242-2222 ALBANY INTERNATIONAL AIRPORT