NEW YORK’S TECH VALLEY AIRPORT Comprehensive Annual Finanicial Report Year Ended December 31, 2015 A component unit of the County of Albany, located in the Town of Colonie, New York flyalbany.com Albany County Airport Authority As of December 31, 2015 Authority Board Members Rev. Kenneth J. Doyle Dorsey M. Whitehead Chair Treasurer Term Expires: December 31, 2019 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 Paula T. Wilkerson Member 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 Years Ended December 31, 2015 and 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 ............................................................. 43-70 Required Supplementary Information: Schedule for the Authority’s Proportionate Share of Net Pension Liability ........................................................................... 72 Schedule for the Authority’s Contributions ................................................ 72 OPEB Trust Schedule of Funding Progress .............................................. 73 Other Supplemental Information: Schedule of Debt Service Requirements to Maturity ................................. 76 Schedule of Governmental Payments and Services ................................. 77 III. STATISTICAL SECTION Total Annual Revenues, Expenses and Changes in Net Position ............ 80-81 Changes in Cash and Cash Equivalents .................................................. 82-83 Principal Revenue Sources and Cost per Enplaned Passenger .............. 84-85 Ratios of Outstanding Debt ...................................................................... 83-87 i Revenue Bond Debt Service Coverage ................................................... 88-89 Population in the Air Trade Area ................................................................... 90 Major Employers in Air Trade Area ............................................................... 91 Colleges and Universities in the Air Trade Area ............................................ 92 Airport Information ......................................................................................... 93 Enplaned Passengers .............................................................................. 94-95 Airline Landed Weights ............................................................................ 96-97 Aircraft Operations ................................................................................. 98-100 Airlines Serving the Albany International Airport ......................................... 101 Scheduled Jet Airline Service ...................................................................... 102 Scheduled Commuter Airline Service .......................................................... 103 Primary Origination and Destination Passenger Markets ............................ 104 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 ................................................... 106-107 Schedule of Expenditures of Federal and New York State Department of Transportation Financial Assistance and Notes thereto ....................................................................... 108-109 Independent Auditor’s Report on Compliance for each Major Federal Program and on Internal Control over Compliance Required by the Uniform Guidance ................. 110-111 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 ........... 112-113 Schedule of Findings and Questioned Costs .............................................. 114 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 ..... 115-116 Schedule of Passenger Facility Charges Collected and Expended And Notes thereto ............................................................................... 117 Passenger Facility Charge Program Schedule of Findings And Questioned Costs ......................................................................... 118 Biographies of the Members of the Albany County Airport Authority .............. 119-120 Biographies of the Albany County Airport Authority Senior Staff ........................... 121 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 14, 2016 In 2015, the US Domestic Airlines experienced significant relief from jet fuel costs and recorded healthy profits. This favorable environment allowed the airlines to continue to increase available airline seats, airline jobs and airline wages while reducing airline fares and debt and also reinvesting in their product based upon reports from the industry trade association, Airlines for America. At Albany International Airport, the effects of the improved airline industry environment were evident in the 5.5% growth in enplanements in 2015, reaching their highest level since 2009 when airline consolidations began. Late in 2015, American Airlines completed its merger with US Airways expanding its service network and JetBlue began service at Albany as a new Signatory Airline. Other airlines have also announced service expansions for 2016. Based upon scheduled and announced airline service at Albany International Airport, annual enplanements for 2016 are expected to grow further and exceed 1.4 million as airline seat capacity is projected to be 13% more than 2015. Based upon the expansion of available airline passenger seats and service enhancements, it is reasonable to expect Albany International Airport will continue to be the fastest growing airport in Upstate New York in 2016 even though it is already the second largest after Buffalo International Airport. In 2015, the Airport also completed construction of its expanded Aircraft Maintenance, Repair and Overhaul (MRO) facility and saw its occupation by a regional airline adding more jobs and aviation activity to the Airport. The MRO facility expansion was made possible with a State-funded grant intended to promote job creation and economic development. By the close of 2015, the Airport completed negotiations for a new five-year Airport Use and Lease Agreement and Common Cargo Carrier Airfield Use Agreement with its six existing Signatory Airlines and two Signatory Cargo Carriers. These new agreements ensure the Airport’s most important aviation business relationships are soundly in place for years to come and are expected to continue to produce attractive airline rates and charges and revenue for the Airport. In 2015, the prudent management of the Airport budget allowed the Airport cost per enplaned passenger to settle at $7.12, down from a budgeted amount of $8.05. The Airport also generated $3.6 million in net revenue to be shared between the Airport and the airlines under the Airport Use and Lease Agreement. During 2016, the Airport Authority will continue to nurture the development of air service at the Airport, plan and execute its Capital Plan to meet the growing needs of the Airport, 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