FY2017 Audit Report AirportBlair Airport Authority
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITOR'S REPORTS
For the year ended September 30, 2017
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT 3 - 5
MANAGEMENT'S DISCUSSION AND ANALYSIS 6-12
BASIC FINANCIAL STATEMENTS
Statement of net position 13
Statement of activities 14
Balance sheet - governmental funds 15
Reconciliation of the balance sheet of governmental
funds to the statement of net position 16
Statement of revenues, expenditures, and changes in
fund balance - governmental funds 17
Reconciliation of the statement of revenues, expenditures
and changes in fund balances of governmental funds
to the statement of activities 18
NOTES TO FINANCIAL STATEMENTS 19-30
REQUIRED SUPPLEMENTAL INFORMATION
Budgetary comparison schedule - general fund 32
OTHER INFORMATION
Fund balances for the last five years 34
TABLE OF CONTENTS - CONTINUED
PAGE
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 35-36
SCHEDULE OF FINDINGS AND RESPONSES
37
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 38
INDEPENDENT AUDITOR'S REPORT
Honorable Chairman and Board Members
Blair Airport Authority
Blair, Nebraska
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, and each major
fund of Blair Airport Authority (the Airport), as of and for the year ended September 30, 2017, and the
related notes to the financial statements, which collectively comprise the Airport's basic financial
statements as listed in the table of contents.
Management's 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.
Auditor's Responsibility
Our responsibility is to express opinions 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 plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from 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 auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In malting those risk assessments, the auditor considers internal control relevant to the entity's
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 entity's 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 presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, and each major fund of the Blair Airport
Authority as of September 30, 2017, and the respective changes in financial position thereof for the year
then ended in accordance with accounting principles generally accepted in the United States of America.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and budgetary comparison information on pages 6 - 12 and 32 be presented to
supplement the basic financial statements. Such information, although not a 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 of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management's 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.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Blair Airport Authority's basic financial statements. The fund balances for the
last five years is presented for purposes of additional analysis and is not a required part of the basic
financial statements.
The fund balances for the last five years have not been subjected to the auditing procedures applied in
the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any
assurance on it.
-4-
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated DATE, on our
consideration of the Blair Airport Authority's internal control over financial reporting and on our tests of
its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that 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 Blair Airport Authority's
internal control over financial reporting and compliance.
Hayes & Associates
Omaha, Nebraska
DATE
-5-
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the year ended September 30, 2017
As management of the Blair Airport Authority, ("Airport"), we offer readers of the Airport's
financial statements this narrative overview and analysis of the financial activities of the Airport
for the fiscal year ended September 30, 2017.
OVERVIEW OF FINANCIAL STATEMENTS
The discussion and analysis is intended to serve as an introduction to the Blair Airport
Authority's basic financial statements. The Airport's basic financial statements include three
components: 1) government -wide financial statements; 2) fund financial statements; and 3) notes
to the basic financial statements. This report also contains other supplementary information in
addition to the basic financial statements.
Government -wide financial statements
The government -wide financial statements are designed to provide readers with a broad
overview of the Airport's finances, in a manner similar to a private -sector business.
The statement of net position presents information on all of the Airport's assets, deferred
outflows, liabilities, and deferred inflows with the difference between the remainder reported as
net position. Over time, increases or decreases in net position may serve as a useful indicator of
whether the economic position of the Airport is improving or deteriorating.
The statement of activities presents information showing how the government's 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 (e.g., uncollected taxes and incurred but unpaid
interest).
Both of the government -wide financial statements distinguish functions of the Airport that are
principally supported by taxes and intergovernmental revenues (governmental activities). The
governmental activities are the operations of a municipal airport.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have
been segregated for specific activities or objectives. The Airport, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance -related
legal requirements. All of the funds of the Airport are governmental funds.
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
For the year ended September 30, 2017
OVERVIEW OF FINANCIAL STATEMENTS - CONTINUED
Governmental Funds: Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government -wide financial statements.
However, unlike the government -wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spendable resources, as well as on
balances of spendable resources available at the end of the fiscal year. Such information may be
useful in evaluating a government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government -wide financial statements.
By doing so, readers may better understand the long-term impact of the government's near-term
financing decisions. Both the expenditures and changes in fund balances provide a reconciliation
to facilitate this comparison between governmental funds and governmental activities. The
majority of the Airport's basic services are reported in governmental funds, which focus on how
money flows into and out of those funds and the balances left at year-end that are available for
spending. These funds are reported using an accounting method identified as the modified
accrual basis of accounting, which measures cash and all other financial assets that can readily be
converted into cash. The governmental fund statements provide a detailed short-term view of the
Airport's general government operations and the basic services it provides. Governmental fund
information helps determine whether there are more or fewer financial resources that can be
spent in the near future to finance the Airport's programs. By comparing information presented
for governmental funds with similar information presented for long-term effect of the
government's near term financing decisions. The reconciliation between governmental activities
(reported in the statement of net position and the statement of activities) and governmental funds
is detailed in a reconciliation following the fund financial statements.
The Airport adopts an annual appropriated budget for all governmental funds. A budgetary
comparison schedule has been provided for general funds to demonstrate compliance with the
state budget statutes.
Notes to the financial statements: The notes provide additional information that is essential to
a full understanding of the data provided in the government -wide and fund financial statements.
Government -wide Financial Analysis: Capital assets (i.e. land, buildings, and equipment)
account for 97.6% of the total assets. The Airport uses these assets to provide services to its
customers. Accordingly, these assets are not an available source for payment of future spending.
Of the remaining assets, 2.4% of the governmental assets are cash and equivalents. The
following chart shows the Airport's net position for 2017:
SEE TABLE 1
-7-
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
SUMMARY OF NET POSITION
September 30, 2017
ASSETS
Current and other assets
Capital assets
Total assets
LIABILITIES
Other liabilities
Long-term debt outstanding
Total liabilities
NET POSITION
Net investment in capital assets
Restricted
Unrestricted
Total net position
TABLE 1
-8-
2017 2016 Change
$ 408,238 $ 554,419 $ (146,181)
16,905,328 17,075,373 (170,045)
$ 17,313,566 $ 17,629,792 $ (316,226)
$ 66,756 $ 72,392 $ (5,636)
2,946,638 3,080,125 (133,487)
$ 3,013,394 $ 3,152,517 $ (139,123)
$ 13,958,690 $ 13,995,248 $ (36,558)
124,805 151,165 (26,360)
216,677 330,862 (114,185)
$ 14,300,172 $ 14,477,275 $ (177,103)
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
For the year ended September 30, 2017
OVERVIEW OF FINANCIAL STATEMENTS - CONTINUED
At the end of the current fiscal year, the Airport reported a positive balance in both net
investment in capital assets and in unrestricted net position.
The following chart is a summary of financial information relating to the Airport's statement of
activities:
SEE TABLE 2
Governmental activities: Governmental activities decreased the Airport's net position by
$177,103.
Key elements of the governmental activities are as follows:
• The negative change in net position from Fiscal years 2016 to 2017 was primarily result of
repair on the runway from settlement and Airport share of engineering costs as part of the
Airport Layout Plan update. The prior year comparative financial data is provided in each
table to provide additional information.
Financial Analysis of the Airport's Funds
As mentioned earlier in this analysis, the Airport uses fund accounting to ensure and demonstrate
compliance with finance -related legal requirements.
Governmental Funds: The focus of the Airport's governmental funds is to provide information
on near-term inflows, outflows, and balances of spendable resources. Such information is useful
in assessing the Airport's financing requirements. In particular, unassigned fund balance may
serve as a useful measure of a government's net resources available for spending at the end of
the fiscal year.
As of the end of the current fiscal year, the Airport's governmental funds reported combined
ending fund balances of $349,536, a decrease of $161,373 from the prior year. The Airport's
fund balances for the past five years are presented in a table format on page 34.
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
CHANGES IN NET POSITION
September 30, 2017
TABLE 2
REVENUES
Program revenues
Charges for services
Capital grants and contributions
General revenues
Property taxes
Other taxes
Interest and other revenue
Insurance recovery and gain
Total revenues
EXPENSES
General government
Interest on debt
Total expenses
CHANGE IN NET POSITION
NET POSITION, BEGINNING OF YEAR
NET POSITION, END OF YEAR
-10-
2017
2016
Change
$ 210,888
$ 201,753
$ 9,135
113,177
1,578,013
(1,464,836)
168,561
171,278
(2,717)
8,446
9,351
(905)
10,999
27,232
(16,233)
-
162,088
(162,088)
512,071
2,149,715
(1,637,644)
609,422
580,141
29,281
79,752
105,593
(25,841)
689,174
685,734
3,440
(177,103)
1,463,981
(1,641,084)
14,477,275
13,013,294
1,463,981
$ 14,300,172
$ 14,477,275
$ (177,103)
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
For the year ended September 30, 2017
OVERVIEW OF FINANCIAL STATEMENTS - CONTINUED
Budget variances in the General Fund: The Airport General Fund expenditures did not exceed
budget. Significant budget variances are detailed as follow:
Variance
Positive
Account Ne ative Reason
Grant Income ($360,823) The airport had budgeted to receive grant from
FAA for updating the Airport Layout Plan
(ALP) and extending a taxi lane. The airport
only received a grant for the ALP update and
was only able to complete part of the study.
Therefore projected revenues weren't
received. The balance of ALP grant funds will
be realized in Fiscal Year 2018.
Rent Income $8,333 The airport received more funds than
anticipated from lease, rental, and franchise
fee income during the 2017 Fiscal year
Capital Outlay $316,347 The airport had anticipated construction of a
new taxi lane in Fiscal Year 2017. The taxi
lane did not get constructed in fiscal year
2017. It will be constructed in Fiscal Year
2018.
Debt principle expense $5,913 The airport had budgeted for repayment of
NDOT — Division of Aeronautics loan
payment. The actual amount due was less than
estimated.
Variances in Assets and Liabilities:
Capital assets: The Airport's govermnent-wide capital assets, net of accumulated depreciation,
increased due to significant repairs of existing property needed at this time. Additional
information, as well as, a detailed classification of the Airport's net investment in capital assets
can be found in the notes to the Financial Statements.
Long-term debt: The long-term debt of the Airport decreased by $133,487 as a result timely
debt service payments on long-term debt. All bonds had been refinanced in Fiscal year 2016.
-11-
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
For the year ended September 30, 2017
This year's budget and rates: The property tax levy request for the Airport Authority for the
fiscal year beginning October 1, 2016, was set at $0.028953 per one hundred dollars of
valuation. The budget for fiscal year 2017 began October 1, 2016 required a levy for City
operations of $0.358163 and Airport levy of $0.031315 or a combined levy of $0.389478. The
Airport levy continues to solely support long term debt and the Airport would anticipate the levy
staying at or near the statutory levy limit of $0.035 per hundred dollars of actual valuation. Per
Airport statutes the Airport could levy an additional $0.035 or up to $0.07 per $100 dollars of
valuation with concurrence of the City Council.
Additional Notes: The Airport received a FAA grant in 2016 to fund an ALP update project
which was anticipated to take about 18 to 24 months to complete. The study should conclude in
2018. No new expansion projects are anticipated until the ALP has been completed and approved
by the FAA, although the Airport anticipates additional projects for extension of taxi lanes,
apron, new hangars, and possibly service road improvements as additional FAA entitlement
grant funds and State NDOT — Division of Aeronautics grant funds become available over the
next two to five years.
The Airport continues to see an increase in traffic since Skywerx Aviation, LLC has located their
FBO business at the Airport. Skywerx provides maintenance, fuel sales, and management
services for private airplane operators. Skywerx Aviation completed an additional hangar in
Fiscal Year 2016 and an additional hangar in Fiscal Year 2017. The Airport continues to
negotiate with other individuals and/or businesses on land leases to build additional hangars with
an additional private hangar scheduled to be built at start of Fiscal Year 2018.
Request for information: The financial report is designed to provide a general overview of the
Airport's finances for all those with an interest in the government's finances. Questions
concerning any of the information provided in this report or requests for additional information
should be addressed to the Blair Airport Authority, 218 S. 16th Street, Blair, NE 68008.
- 12-
Blair Airport Authority
STATEMENT OF NET POSITION
September 30, 2017
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Cash and cash equivalents
Due from County Treasurer
Other receivables
Prepaid expenses
Capital assets
Land
Construction in Progress
Buildings and runways
Equipment
Accumulated depreciation
Total assets
LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION
Accounts payable
Accrued interest
Prepaid leases
Deposits
Long-term debt
Due within one year
Due in more than a year
Total liabilities
NET POSITION
Net investment in capital assets
Restricted
Unrestricted
Total net position
Total liabilities, deferred inflow, and net position
See accompanying notes and independent auditor's report.
-13-
379,212
14,053
7,168
7,805
8,028,400
12,800
11,131,245
937,387
(3,204,504)
$ 17,313,566
18,238
26,326
14,933
7,259
114,112
2,832,526
3,013,394
13,958,690
124,805
216,677
14,300,172
$ 17,313,566
'd' kn
I'D
M W)
N
O h
[�
N ,! •��
00 O
00
l� [�
O
¢' N O
cp�� .4)00
~
-
bOA
C
N
M
N N
U �
N
,O
64 69
N N 't
Z U z
0
c}
�A O
00 co
by
N N
U �
64 69
N N 't
pq N
c}
Q
w Z
00CZ
0
w
Blair Airport Authority
BALANCE SHEET
GOVERNMENTAL FUNDS
September 30, 2017
General Debt
Fund Fund Total
ASSETS
Cash and cash equivalents
$
257,993
$
121,219
$
379,212
Due from County Treasurer
-
14,053
14,053
Other receivables
7,168
-
7,168
Total assets
$
265,161
$
135,272
$
400,433
LIABILITIES
Accounts payable
$
18,238
$
-
$
18,238
Prepaid leases
14,933
-
14,933
Deposits
7,259
-
7,259
Total liabilities
40,430
-
40,430
DEFERRED INFLOW OF RESOURCES
Property Taxes
-
10,467
105467
FUND BALANCE
Restricted
-
124,805
124,805
Unassigned
224,731
-
224,731
Total fund balance
224,731
124,805
349,536
Total liabilities, deferred inflows,
and fund balance
$
265,161
$
135,272
$
400,433
See accompanying notes and independent auditor's report.
-15-
Blair Airport Authority
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
For the year ended September 30, 2017
Fund balance of governmental funds
Amounts reported for governmental activities in the statement of
net position are different because:
Capital assets, net of depreciation, are not current financial
resources and are not included in the governmental funds
Deferred revenues that are not current financial resources but
that are recognized in the government wide statements
Notes and bonds payable are not current financial liabilities.
Therefore, they are not included in the governmental funds
Prepaid expenses are counted as assets on the statement of net
position and are reported as expenses in governmental funds
Interest accrued on long-term debt
Net position of governmental activities
See accompanying notes and independent auditor's report.
-16-
$ 349,536
16,905,328
10,467
(2,946,638)
7,805
(26,326)
$ 14,300,172
Blair Airport Authority
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE - GOVERNMENTAL FUNDS
For the year ended September 30, 2017
REVENUES
Taxes
Charges for services
Intergovernmental
Interest income
Other revenues
Total revenues
EXPENDITURES
Administration
Capital outlay
Debt service
Principal
Interest
Total expenditures
REVENUES OVER (UNDER) EXPENDITURES
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
General
Debt
Fund
Fund
Total
$ -
$ 171,925
$ 171,925
210,888
-
210,888
113,177
-
113,177
34
-
34
10,965
-
10,965
335,064
171,925
506,989
275,937
3,149
279,086
160,653
-
160,653
33,487
100,000
133,487
-
95,136
95,136
470,077
198,285
668,362
(135,013)
(26,360)
(161,373)
359,744
151,165
510,909
$ 224,731
$ 124,805
$ 349,536
See accompanying notes and independent auditor's report.
-17-
Blair Airport Authority
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the year ended September 30, 2017
Net changes in fund balance - total governmental funds
Amounts reported for governmental activities in the statement of
activities are different because:
Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the cost of those
assets is allocated over their estimated useful lives as a
functional expense when the cost is above the capitalization
threshold. The activity is reconciled as follows:
Cost of assets capitalized
Depreciation expense
Loss on disposal of assets
Revenue reported in the statement of activities that do not
provide current financial resources are not reported as
revenue in the governmental Rinds
Bonds are reported as expenditures when paid and as
revenue when received in the governmental funds. However,
there is no impact in the statement of activities when loans are
made or repaid. This amount represents the change in the
long-term debt
Prepaid expenses are counted as assets on the statement of net
position and are reported as expenses in governmental funds
Interest accrued on long-term debt does not require the
use of current financial resources and is not reported as an
expenditure in govermental Rinds
Change in net position of governmental activities
See accompanying notes and independent auditor's report.
-18-
(161,373)
160,653
(326,626)
(4,072)
5,082
133,487
362
15,384
$ (177,103)
Blair Airport Authority
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2017
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the Blair Airport
Authority (the Airport).
Description of the Reporting Entity
This report includes all funds of the Airport, which is the "primary government."
The Airport operates under a Board of Trustees form of government and provides
airport services.
The Airport is a body corporate and politic, constituting a public corporation and
an agency of the City. The Board has full and exclusive jurisdiction and control.
The Board and its corporate existence shall continue only for a period of twenty
years and therein after until all its liabilities have been met and its bonds paid in
full. All administrative duties are handled by the City Administration until such
time as the Airport can hire its own staff. As per Nebraska Statues, the Airport
Board has appointed the City Treasurer, as treasurer for the Airport.
2. Basis of Accounting/Measurement Focus
The accounts of the Airport are organized on the basis of funds, each of which is
considered a separate accounting entity. The operations of each fund are
accounted for with a separate set of self -balancing accounts that comprise its
assets, liabilities, fund equity, revenues, and expenditures. Governmental
resources are allocated to and accounted for in individual funds based upon the
purposes for which they are to be spent and the means by which spending
activities are controlled.
Government -Wide Financial Statements
The Airport government -wide financial statements include a statement of net
position and a statement of activities (including changes in net position). These
statements are prepared using the standards of the Governmental Accounting
Standards Board (GASB), General Accepted Accounting Principles (GAAP), as
well as FASB pronouncements issued through November 30, 1989. These
statements present summaries of governmental activities for the Airport.
Fiduciary activities of the Airport are not included in these statements.
-19-
Blair Airport Authority
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2017
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
2. Basis of Accounting/Measurement Focus - Continued
Government -Wide Financial Statements - Continued
These statements are presented on an "economic resources" measurement focus
and the accrual basis of accounting. Accordingly, all of the Airport's assets and
liabilities including capital assets and infrastructure as well as long-term debt, are
included in the accompanying statement of net position. The statement of
activities presents changes in net position. Under the accrual basis of accounting,
revenues are recognized in the period in which they are earned while expenses are
recognized in the period in which the liability is incurred.
The Statement of Activities demonstrates the degree to which the direct expenses
of a given function are offset by program revenue. Direct expenses are those that
are clearly identifiable with a specific function. The types of transactions
reported as program revenues for the Airport are reported in three categories: 1)
charges for services, 2) operating grants and contributions, and 3) capital grants
and contributions. Charges for services include revenues from customers or
applicants who purchase, use or directly benefit from goods, services, or
privileges provided by a given function. Grant and contributions include revenues
restricted to meeting the operational or capital requirements of a particular
function. Taxes or other items not included among program revenues are reported
instead as general revenues.
All internal balances in the statement of net position and internal transactions in
the statement of activities have been eliminated.
Governmental Fund Financial Statements
Governmental fund financial statements include a balance sheet and a statement
of revenues, expenditures, and changes in fund balances for all major
governmental funds. An accompanying schedule is presented to reconcile and
explain the differences in net position as presented in these statements to the net
position presented in the government -wide financial statements. The Airport has
presented all major funds that met the qualifications of GASB Statement No. 34.
-20-
Blair Airport Authority
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2017
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
2. Basis of Accounting/Measurement Focus - Continued
Governmental Fund Financial Statements - Continued
All governmental funds are accounted for on a spending or "current financial
resources" measurement focus and the modified accrual basis of accounting.
Accordingly, only current assets and current liabilities are included on the balance
sheet. The statement of revenues, expenditures and changes in fund balances
present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses in net current assets). Under modified
accrual basis of accounting, revenues are recognized in the accounting period in
which they become both measurable and available to finance expenditures of the
current period. Accordingly, revenues are recorded when received in cash, except
that revenues subject to accrual (30 days after year-end) are recognized when due.
The primary sources susceptible to accrual are property tax, investment income,
and grant revenues.
Expenditures are generally recognized under the modified accrual basis of
accounting when the related fund liability is incurred. An exception to this
general rule is principal and interest on general long-term debt which is
recognized when due.
The Airport reports the following major governmental funds:
The general fund is the government's primary operating fund. It is a
governmental fund that is used to account for all financial resources
except those required to be accounted for in another fund.
The debt service fund is a governmental fund that is used to account for
funds needed to make principal and interest payments on outstanding debt
issues.
-21-
Blair Airport Authority
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2017
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
3. Budgetary Policy and Control
Budgetary Basis of Accounting
The Airport's legally adopted budget is not in conformity with accounting
principles generally accepted in the United States of America. The budget is
prepared and adopted using the cash basis of accounting whereby revenues
budgeted are expected to be received rather than earned and expenditures
budgeted are expected to be disbursed rather than incurred. Differences between
the budgeted basis of accounting and the generally accepted basis are reconciled
in the budget to actual schedule in the required supplementary information. The
Board sets the property tax levy needed to support the coming year's budget in
August of each year and submits its budget as required by State statute.
Budgetary Control
Each fund's appropriated budget is prepared on a detailed line item basis.
Revenues are budgeted by source. Expenditures are budgeted by department.
Expenditures at the fund level constitute the legal level of control. Expenditures
may not exceed appropriations at this level. All budget revisions at this level are
subject to final review by the Board.
4. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
5. Deposits and Investments
The Airport's cash and cash equivalents are considered to be cash on hand,
demand deposits and short-term investments with original maturities of three
months or less from the date of acquisition.
-22-
Blair Airport Authority
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2017
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
6. Capital Assets
Capital assets, which include land, buildings, machinery and equipment
(furniture, vehicles, computers, etc.) and infrastructure assets (runways), are
reported in Governmental Activities column of the Government -Wide Financial
Statement. Capital assets are defined by the Airport as assets with an initial,
individual cost of more than $5,000. Such assets are recorded at historical cost or
estimated historical cost if purchased or constructed. Donated or annexed capital
assets are recorded at estimated market value at the date of donation or
annexation.
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. Major outlays for
capital assets and improvements are capitalized as projects are constructed. The
Airport qualifies for the exemption under GASB 34 to not retroactively apply the
capitalization requirements of general infrastructure assets. The requirement to
capitalize and depreciate these assets has been applied as of October 1, 2003.
Depreciation is recorded in the Government -Wide Financial Statements on a
straight-line basis over the useful life of the assets as follows:
Assets Years
Buildings and runways 40
Road overlays and concrete 15-25
Machinery and equipment 10
Vehicles 5
7. Property Taxes
Property tax revenue is recognized when collected by the County as the Airport's
agent when measurable and available. There are no property taxes due which are
not delinquent and all delinquent taxes are considered collectible.
The Airport's December 31, 2016, valuation was included with the City of Blair's
valuation of $522,484,420. The levy for the Airport for the year ending
September 30, 2017, was $0.31315 per $100 of value. The total tax levy was
$163,659. Property taxes are collected by the County and are due December 31
of each year and delinquent in halves at May 1 and September I of the following
year. In -lieu of tax receipts are equivalent in value to payments for services
provided.
-23-
Blair Airport Authority
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2017
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Claims and Judgments Pad able
The Airport records a liability for litigation, judgments, and claims when it is
probable that an asset has been impaired or a liability has been incurred prior to
year-end and the probable amount of loss (net of any insurance coverage) can be
reasonably estimated. The liability, if any, is reported in the Government -Wide
Statement of Net Position. The portion of the liability, which will be liquidated
with expendable, available financial resources, if any, is reflected as a liability of
applicable governmental funds.
9. Restricted Assets
Assets are reported as restricted when limitations on their use change the nature or
normal understanding of the availability of the asset. Such constraints are either
externally imposed by creditors, contributions, grantors, or laws of other
governments, or are imposed by law through constitutional provisions or enabling
legislation. The Airport's policy is to first apply restricted resources to an
expense when incurred for purposes for which both restricted and unrestricted net
assets are available.
10. Transfers
Transfers are used to move revenues from the fund that statute or budget requires
to collect them to the fund that statute or budget requires to expend them and to
move unrestricted revenue collected in the general fund to finance various
programs accounted for in other fiends in accordance with budgetary
authorizations.
11. Interfund Receivables and Payables
During the course of operations, numerous transactions occur between individual
funds that may result in amounts owed between funds. Those related to goods and
services type transactions are classified as "due to and from other funds." Short-
term Interfund loans are reported as "interfund receivables and payables." Long-
term interfund loans (noncurrent portion) are reported as "advances from and to
other funds." Interfund receivables and payables between funds are eliminated in
the statement of net position.
-24-
Blair Airport Authority
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2017
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
12. Allowance for Doubtful Accounts
The Airport uses the direct write-off for uncollectable accounts. While the direct
write-off method is not GAAP, management has determined that there is no
material difference between the direct write-off method and the allowance
method. There were no significant doubtful accounts at September 30, 2017.
NOTE B. DEPOSITS
Deposits consist of demand deposits and certificates of deposit with current maturities.
These deposits have no restrictions. The deposits are entirely insured or collateralized
with securities held by the entity's agent.
Custodial credit risk is the risk that in the event of a bank failure, the Airport's deposits
may not be returned. The statutes of the State of Nebraska require that local
governmental units follow the "prudent man" rule with deposits, and that deposits be
secured by collateral valued at market or par whichever is lower less the amount insured
by the Federal Deposit Insurance Corporation. At September 30, 2017, no deposits were
uninsured. The Airport has no investment policy that would further limit its deposits.
The carrying amount of bank balances at September 30, 2017, was $379,212.
NOTE C. RELATED PARTIES
The Airport's operating, administrative, and accounting functions are performed by the
administrative offices of the City of Blair. The Airport incurs no cost for the resources
used by the City of Blair in performing these functions.
-25-
Blair Airport Authority
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2017
NOTE D. CAPITAL ASSETS
Capital assets not depreciated
Land
Construction in Progress
Total capital assets not depreciated
Other capital assets
Buildings and runways
Equipment
Less accumulated depreciation
Buildings and runways
Equipment
Other capital assets, net
Balance
Balance
9/30/2016
Increases
Decreases
9/30/2017
$ 8,028,400
$ -
$ -
$ 8,028,400
-
12,800
-
12,800
8,028,400
12,800
-
8,041,200
10,990,525
147,853
(7,133)
11,131,245
937,387
-
-
937,387
(2,658,408)
(284,578)
3,061
(2,939,925)
(222,531)
(42,048)
-
(264,579)
9,046,973
(178,773)
(4,072)
8,864,128
Governmental activities capital assets, net $ 17,075,373 $ (165,973) $ (4,072) $ 16,905,328
Depreciation expense of $326,626 was charged to general government expenses on the
statement of activities.
NOTE E. RISK MANAGEMENT
The Airport is exposed to various risks of loss related to torts; theft; damage to and
destruction of assets; errors and omissions; injuries to employees; and natural disasters.
These risks are covered by the purchase of commercial insurance. The Airport assumes
liability for any deductibles and claims in excess of coverage limitations. Settled claims
from these risks have not exceeded commercial insurance coverage in any of the past
three fiscal years.
-26-
Blair Airport Authority
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2017
NOTE F. NET POSITION CATEGORIES
In the government -wide financial statements net position are classified in the following
categories:
Net Investment in Capital Assets
This category groups all capital assets, including infrastructure, into one component of
net position. Accumulated depreciation and debt liabilities used to purchase capital assets
reduces this category.
Restricted Net Position
This category presents external restrictions imposes by creditors, grantors, contributors or
laws or regulations of other governments and restrictions imposed by law through
constitutional provisions or enabling legislation.
Unrestricted Net Position
This category represents the net position of the Airport that are not restricted for any
project or other purpose.
In the governmental fund financial statements, reserves and designations segregate
portions of fund balance that are either not available or have been earmarked for specific
purposes. The various reserves and designations are established by actions of the Airport
Board and Management and can be increased, reduced, or eliminated by similar actions.
NOTE G. LONG TERM DEBT
Long term debt at September 30, 2017, consisted of the following:
-27-
Interest
Beginning
Fhding
Dated
Description
Rate
Balance Additions
Reductions
Balance
8/23/2006
Project F-29 Note
0%
$ 4,375 $ -
$ (4,375)
$ -
8/23/2006
Project H-01 Note
0%
85,470 -
(13,320)
72,150
6/20/2013
Project H-02 Note
0%
105,280 -
(15,792)
89,488
3/24/2016
Refunding Bonds
1.00-3.65%
1,595,000 -
(100,000)
1,495,000
3/24/2016
Refunding Bonds
1.40-3.50%
1,290,000 -
-
1,290,000
$ 3,080,125 $ -
$ (133,487)
$ 2,946,638
-27-
Blair Airport Authority
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2017
NOTE G. LONG TERM DEBT - CONTINUED
The 2016 refunding bonds are secured by a pledge of the revenues, income, receipts,
profits and other monies derived by the Airport for the operation, management, and
ownership of its airport facility, including monies derived from the authorized levy of
taxes. As of September 30, 2017, annual debt service requirements of governmental
activities to maturity are as follows:
Year ending
September
30,
2018
2019
2020
2021
2022
2023-2027
2028-2032
2033-2037
Principal
Requirements
$ 114,112
114,112
119,112
119,112
154,112
676,078
755,000
895,000
$ 2,946,638
Interest
Requirements
$ 79,035
77,781
76,358
74,760
72,783
321,158
221,044
80,413
$ 1,003,332
NOTE H. CONCENTRATION OF CREDIT RISK
Total
$ 193,147
191,893
195,470
193,872
226,895
997,236
976,044
975,413
$ 3,949,970
All of the revenue from charges for services of the Airport is from the local Blair area
therefore creating a concentration of credit risk. If the Blair area economy was depressed
this could have an adverse effect on the collection of the revenue.
NOTE I. FUND BALANCES
Fund balances for each of the Airport's governmental funds (general fund, and debt
service fund) are displayed in the following classifications depicting the relative strength
of the spending constraints placed on the purposes for which resources can be used:
Non -spendable fund balance - amounts that cannot be spent because they are either not in
a spendable form (such as inventories and prepaid amounts) or are legally or
contractually required to be maintained intact.
-28-
Blair Airport Authority
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2017
NOTE L FUND BALANCES - CONTINUED
Restricted fund balance - amounts that can be spent only for specific purposes because of
constraints imposed by external providers (such as grantors, bondholders, and higher
levels of government), or imposed by constitutional provisions or enabling legislation.
Committed fund balance - amounts that can be spent only for specific purposes
determined by a formal action of the government's highest level of decision-making
authority.
Assigned fund balance - amounts the government intends to use for specific purposes that
do not meet the criteria to be classified as restricted or committed.
Unassigned fund balance - amounts that are available for any purpose; these amounts can
be reported only in the Airport's General Fund.
NOTE J. CONTINGENCIES
The Airport participates in a federal programs, which are subject to financial and
compliance audits by the granting agencies. The amount of expenses, if any, which may
be disallowed by the granting agencies, is not determinable at this time; however,
management does not believe that such amount, if any, would be significant.
NOTE K. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS
During the year, the Authority adopted GASB issued Statement No. 73 Accounting and
Financial Reporting for Pensions and Related Assets That Are Not within the Scope of
GASB Statement No. 68, and Amendments to Certain Provisions of GASB Statements No.
67 and 68; GASB Statement No. 74 Financial Reporting for Postemployment Benefit
Plans other than Pension plans; GASB Statement No. 78 Pensions Provided through
Certain Multiple -Employer Defined Benefit Pension Plan; and GASB Statement No. 82
Pension Issues — an Amendment of GASB Statements No. 67, No. 68, and No. 73. The
primary objective of these Statements is to improve accounting and financial reporting by
state and local governments for pensions. Adoption of this pronouncement did not have a
significant effect on the financial statements of the Authority.
-29-
Blair Airport Authority
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2017
NOTE K. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS — CONTINUED
During the year the Authority also adopted GASB issued Statement No. 77 Tax Abatement
Disclosures. This Statement improves financial reporting by giving the users essential
information that is not consistently or comprehensively reported to the public at present.
Disclosure of information about the nature and magnitude of tax abatements will make
these transactions more transparent to the financial users. Adoption of this
pronouncement did not have a significant effect on the financial statements of the
Authority.
The Authority also adopted GASB issued Statement No. 80 Blending Requirements for
Certain Components Units — an Amendment of GASB Statement No. 14. This Statement
amends the blending requirements for the financial statement presentation of component
units of all state and local governments. The additional criterion requires blending of a
component unit incorporated as a not-for-profit corporation in which the primary
government is the sole corporate member. The additional criterion does not apply to
component units included in the financial reporting entity pursuant to the provisions of
Statement No. 39, Determining Whether Certain Organizations Are Component Units.
NOTE L. NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED
In March 2016, GASB issued Statement No. 81 Irrevocable Split -Interest Agreements.
The objective of this Statement is to improve accounting and financial reporting for
irrevocable split -interest agreements by providing recognition and measurement guidance
for situations in which a government is a beneficiary of the agreement.
In March 2017 GASB issued Statement No. 85 Omniubs 2017. The objective of this
Statement is to address practice issues that have been identified during implementation
and application of certain GASB Statements. This Statement addresses a variety of topics
including issues related to blending component units, goodwill, fair value measurement
and application, and postemployment benefits.
In May 2017 GASB issued Statement No. 86 Certain Debt Extinguishment Issues. The
primary objective of this Statement is to improve consistency in accounting and financial
reporting for in -substance defeasance of debt. This Statement also improves accounting
and financial reporting for prepaid insurance on debt that is extinguished and notes to
financial statements for debt that is defeased in substance.
These Statements are effective for the Authority's year ending September 30, 2018.
-30-
REQUIRED SUPPLEMENTAL INFORMATION
Blair Airport Authority
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For the year ended September 30, 2017
REVENUES
Rent income
Franchise fees
Interest
Grants
Miscellaneous income
Total revenues
EXPENDITURES
General government
Capital outlay
Debt principal
Total expenditures
REVENUES OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
REVENUES AND OTHER SOURCES OVER (UNDER)
EXPENDITURES AND OTHER USES
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
Variance
Original/Final Positive
Budget Actual (Negative)
$ 183,300 $
191,633
$ 8,333
13,800
19,255
5,455
50
34
(16)
474,000
113,177
(360,823)
15,500
10,965
(4,535)
686,650
335,064
(351,586)
355,100
275,937
79,163
477,000
160,653
316,347
39,400
33,487
5,913
871,500
470,077
401,423
(184,850)
(135,013)
49,837
(184,850) (135,013) $ 49,837
406,836 406,836
$ 221,986 $ 271,823
An explanation of the differences between budgetary inflows and outflows and
revenues and expenditures determined in accordance with generally accepted
accounting principles follows:
The budget fund balance at the beginning of the year is based on cash reserves
rather than fund balance.
Accrual adjustments made because the Authority budgets for revenues and
expenditures on the cash basis, rather than on the modified accrual basis.
General fund balance as reported on the statement of revenues, expenditures,
and changes in fund balances -governmental funds
See independent auditor's report.
-32-
(47,092)
$ 224,731
OTHER INFORMATION
y O M 0 V1 t --
W)
W) M
� oo N O N an
Vl
00 M 00 N i -
W
b
s.
dJ
I
O\ C\ — �10 M
O O M O D M
C� M �O
O '� 00 00 G� .-i
Q 00 00 00 (7)
y 1 1 1 1 1
fn
U
In
CIS
0
IN
0
M
S -r
N
O OO O O
N N N N N N
;-d
N
c�
GJ
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 GOVERNMENTAUDITING
STANDARDS
Honorable Chairman and Board Members
Blair Airport Authority
Blair, Nebraska
We have audited, in accordance with the 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, the financial statements of the governmental
activities, and each major fund of Blair Airport Authority, as of and for the year ended September 30,
2017, and the related notes to the financial statements, which collectively comprise Blair Airport
Authority's basic financial statements, and have issued our report thereon dated DATE.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered Blair Airport
Authority's internal control over financial reporting to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial statements,
but not for the purpose of expressing an opinion on the effectiveness of Blair Airport Authority's
internal control. Accordingly, we do not express an opinion on the effectiveness of Blair Airport
Authority's internal control.
A deficiency in internal control over financial reporting exists when the design or operation of a control
does not allow management or employees, in the normal course of performing their assigned functions,
to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency,
or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a
material misstatement of the entity's financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in
internal control that is less severe than a material weakness, yet important enough to merit attention by
those charged with governance.
Our consideration of internal controls over financial reporting was for the Limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal control that
might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we
did not identify any deficiencies in internal control that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Blair Airport Authority's financial
statements are free from material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no
instances of noncompliance or other matters that are required to be reported under Government
Auditing Standards.
Purpose of this Report
The purpose of this report is solely 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 the effectiveness of the entity's internal control or on compliance. This report is an integral
part of an audit performed in accordance with Government Auditing Standards in considering the
entity's internal control and compliance. Accordingly, this communication is not suitable for any
other purpose.
Hayes & Associates
Omaha, Nebraska
DATE
-36-
Blair Airport Authority
SCHEDULE OF FINDINGS AND RESPONSES
For the year ended September 30, 2017
L SUMMARY OF AUDIT RESULTS
Financial Statements
Type of auditor's report issued:
Internal controls over financial reporting:
• Material weaknesses identified:
• Significant deficiencies identified:
Noncompliance material to financial statements noted:
II. FINDINGS — FINANCIAL STATEMENTS
None reported.
-37-
Unmodified
No
No
No
Blair Airport Authority
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the year ended September 30, 2016
II. FINDINGS—FINANCIAL STATEMENTS
None reported.
-38-