2019 Annual Report

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2019 Annual Report Ohio Turnpike and Infrastructure Commission (A Component Unit of the State of Ohio) COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEARS ENDED December 31, 2019 and 2018 A YEAR OF FIRSTS ON THE OHIO TURNPIKE ISSUED BY: CFO/COMPTROLLER’S OFFICE Ohio Turnpike and Infrastructure Commission MEMBERS AND OFFICERS AS OF DECEMBER 31, 2019 JERRY N. HRUBY TIMOTHY J. PARADISO MICHAEL A. PETERSON GUY COVIELLO VICKIE EATON JOHNSON Chairman Vice Chairman Secretary-Treasurer Member Member SANDRA K. BARBER ROB McCOLLEY DAVE GREENSPAN KIMBERLY MURNIEKS JACK MARCHBANKS, Member Senate Member House Member Director of Office of Budget PH.D. and Management, Director of Transportation, Member Ex-Officio Member Ex-Officio FERZAN M. AHMED, P.E. Assistant Secretary- Treasurer/Executive Director INDEPENDENT AUDITORS: Plante Moran CONSULTING ENGINEERS: AECOM Technical Services, Inc. TRUSTEE: The Huntington National Bank, Cleveland OH PREPARED BY: CFO/Comptroller’s Office and the Office of Marketing and Communications Ohio Turnpike and Infrastructure Commission (A Component Unit of the State of Ohio) 2019 COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Introductory Section Statistical Section Organizational Chart .................................................. 5 Statements of Net Position ...................................... 52 Members and Staff ................................................... 6 Revenues, Expenses and Changes in Chairman’s Letter ..................................................... 7 Net Position ...................................................... 54 Executive Director’s Year in Review ......................... 8 Vehicles by Class .................................................... 56 Letter of Transmittal ................................................ 10 Vehicle Miles Traveled ............................................ 56 Certificate of Achievement ...................................... 12 Toll Revenue by Class ............................................ 57 History and General Information ............................. 13 Toll Rates Per Mile .................................................. 57 Comparative Traffic Statistics .................................. 60 Financial Section Activity by Interchange ............................................ 63 Independent Auditor’s Report ................................. 18 Debt Ratios and Revenue Bond Coverage ............. 65 Management’s Discussion and Analysis ................. 20 Principal Toll Revenue Payers ................................ 67 Principal Ohio Employers ........................................ 69 Basic Financial Statements Employment, Demographic and Economic Statements of Net Position .............................. 25 Statistics ........................................................... 71 Statements of Revenues, Expense and Traffic Accident Statistics ........................................ 73 Changes in Net Position ................................ 26 Capital Asset Statistics ............................................ 75 Statements of Cash Flows ............................... 27 Notes to Financial Statements ......................... 28 Required Supplementary Information Schedule of Net Pension Liability .................... 48 Schedule of Net OPEB Liability ....................... 48 Schedule of Employer Pension Contributions .. 49 Schedule of Employer OPEB Contributions .... 49 4 2019 OHIO TURNPIKE AND INFRASTRUCTURE COMMISSION COMPREHENSIVE ANNUAL FINANCIAL REPORT OHIOTURNPIKE.ORG Ohio Turnpike and Infrastructure Commission 2019 Comprehensive Annual Financial Report INTRODUCTORY SECTION OHIOTURNPIKE.ORG 2019 OHIO TURNPIKE AND INFRASTRUCTURE COMMISSION COMPREHENSIVE ANNUAL FINANCIAL REPORT 5 ORGANIZATIONAL CHART 6 2019 OHIO TURNPIKE AND INFRASTRUCTURE COMMISSION COMPREHENSIVE ANNUAL FINANCIAL REPORT OHIOTURNPIKE.ORG MEMBERS AND STAFF Ohio Turnpike and Infrastructure Commission Members (as of December 31, 2019) TERM APPOINTED EXPIRATION JERRY N. HRUBY* Chairman 06/30/11 06/30/21 TIMOTHY J. PARADISO* Vice Chairman 09/06/13 06/30/23 MICHAEL A. PETERSON Secretary – Treasurer 08/02/16 06/30/20 SANDRA K. BARBER Member 07/01/19 06/30/24 GUY COVIELLO Member 03/22/18 06/30/23 VICKIE EATON JOHNSON Member 06/15/18 06/30/22 JACK MARCHBANKS** Director of Transportation 01/14/19 — KIMBERLY MURNIEKS** Director, Office of Budget and Management 01/14/19 — ROB MCCOLLEY*** Senate Member 02/26/19 — DAVE GREENSPAN*** House Member 03/13/19 — Names in bold indicate voting Member status *Reappointed Member **Member Ex-Officio ***Legislative Member Ohio Turnpike and Infrastructure Commission Senior Staff Ferzan M. Ahmed, P.E. Executive Director Matthew Cole Director of Administration Adam Greenslade Director of Government Affairs Andrew Herberger Director of Service Plaza Operations Sharon Isaac Director of Toll Operations Brian Kelley Chief Technology Officer David Miller Director of Audit and Internal Control Martin Seekely Deputy Executive Director – CFO/Comptroller Jennifer L. Stueber General Counsel Anthony Yacobucci, P.E. Chief Engineer OHIOTURNPIKE.ORG 2019 OHIO TURNPIKE AND INFRASTRUCTURE COMMISSION COMPREHENSIVE ANNUAL FINANCIAL REPORT 7 Chairman’s Letter JERRY N. HRUBY INNOVATION LEADS TO A FEW FIRSTS FOR THE OHIO TURNPIKE IN 2019 Among the innovations in 2019 on the Ohio Turnpike was the introduction of the Commission’s very first electric vehicle (EV) charging stations. While EV adoption is still in its early stages (not counting California), the Commission is preparing for the future as automobile manufacturers are ramping up investment and production for increased EV adoption nationwide. The new charging stations are located at the Indian Meadow and Tiffin River Service Plazas in West Unity and the A DECADE OF GROWTH IN E-ZPASS PROGRAM LEADS Wyandot and Blue Heron Service Plazas in Genoa. With TO BIG SAVINGS FOR CUSTOMERS these new EV stations and more Ohio’s E-ZPass program chalked up a few firsts of its own in expected in the 2019. E-ZPass began providing discounted tolls and faster years ahead, the entrance and exit on the Ohio Turnpike in 2009. In 2019, we Commission is enrolled our 500,000th Ohio customer. well positioned to continue to be a This milestone occurs as the Ohio Turnpike's strategy to better way to expand its retail travel. locations makes it easier for new Another first is a customers to obtain new, publicly a transponder. With accessible and free Wi-Fi service at the Commission’s 14 368 major brand service plazas that was up and running in time for retail locations in Thanksgiving holiday travelers. Each plaza has signage with a northern Ohio, there 24/7 customer service support phone number. are more places than ever for RATINGS REFLECT LONG-TERM TRAFFIC STABILITY, Ohioans to enroll LOW TOLL RATES COMPARED TO PEERS and save. The primary responsibility of the Ohio Turnpike is to provide In fact, over the past decade, E-ZPass customers have saved safe and comfortable travel. In order to meet that approximately $500 million on tolls compared to cash-and responsibility, the Ohio Turnpike has historically produced credit-paying customers. Currently, approximately two-thirds consistently sound financial results. In July, Fitch Ratings of all Ohio Turnpike customers use E-ZPass. Emphasis on the affirmed the Commission’s $462 million outstanding senior growth of the program will continue as the Commission looks lien revenue bonds at ‘AA’ and $1.5 billion outstanding junior ahead to a modernized and open road-type tolling system by lien revenue bonds at ‘A+’. 2023. The ‘AA’ and ‘A+’ ratings reflect the Commission’s roles as an essential national transportation corridor between the ACKNOWLEDGEMENTS northeastern and midwestern United States, underpinned by a I take this opportunity to express appreciation for the fine work mature, stable traffic base with limited competition. of the Executive Director, the Administrative Staff and our total The Commission is proud that the ‘AA’ rating of our senior workforce for their dedication, tireless efforts and exemplary bonds is currently the highest rating that Fitch has given to work efficiency. I acknowledge the support of Governor Mike any toll road. DeWine, the Ohio General Assembly and the many State agencies whose cooperation is greatly appreciated. Fitch also noted the Ohio Turnpike’s strong rate-making ability, evidenced by its legal authority to raise rates combined My personal appreciation also extends to our fellow with ample economic flexibility due to low E-ZPass® Commission Members who demonstrate their keen interest in passenger toll rates of $0.06 per mile. the success of our total Operation. Their guidance and oversight, focused on the success of the entire Ohio Turnpike All of our employees deserve credit for the excellent condition and Infrastructure Commission, ensures a productive work of our infrastructure. Their work helps make it possible for us atmosphere. to be sound and stable with strong financial ratings. 8 2019 OHIO TURNPIKE AND INFRASTRUCTURE COMMISSION COMPREHENSIVE ANNUAL FINANCIAL REPORT OHIOTURNPIKE.ORG Executive Director’s Year in Review FERZAN M. AHMED, P.E. I would like to begin by thanking the management team and employees for their unwavering dedication to making the Ohio Turnpike and Infrastructure Commission a nimble and responsive agency. I also thank Chairman Jerry Hruby and the Commission Members for their support and guidance. ESTABLISHNG A STRATEGIC PLAN FOR THE NEW DECADE Our mission is to be the Industry leader in providing safe and efficient transportation
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