HomeMy WebLinkAboutNantucket Airport Financial Statements - FY2015NANTUCKET MEMORIAL AIRPORT
An Enterprise Fund of the Town of
Nantucket, Massachusetts
Report on Examination of
Basic Financial Statements
Year Ended June 30, 2015
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
TABLE OF CONTENTS
JUNE 30, 2015
Page(s)
INDEPENDENT AUDITORS' REPORT 1 – 2
MANAGEMENT’S DISCUSSION AND ANALYSIS 3 – 6
BASIC FINANCIAL STATEMENTS:
Statement of Net Position 7
Statement of Revenues, Expenses and Changes in Net Position 8
Statement of Cash Flows 9
Notes to Basic Financial Statements 10 – 25
REQUIRED SUPPLEMENTARY INFORMATION:
Schedule of the Airport’s Proportionate Share of the Net Pension Liability 26
Schedule of the Airport’s Contribution to Pension Plan 26
Schedules of Funding Progress and Contribution Funding –
Other Postemployment Benefits 27
INDEPENDENT AUDITORS’ REPORT
Nantucket Memorial Airport Commission
Nantucket Memorial Airport
Nantucket, Massachusetts
Report on the Financial Statements
We have audited the accompanying financial statements of the Nantucket Memorial Airport (the “Airport”),
an enterprise fund of the Town of Nantucket, Massachusetts, as of and for the year ended June 30, 2015, 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.
Auditors’ 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 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 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 financial
position of the Airport as of June 30, 2015, and the changes in financial position and, cash flows thereof, for
the year then ended in accordance with accounting principles generally accepted in the United States of
America.
Nantucket Memorial Airport Page 1 of 27 Basic Annual Financial Statements
Restatement
We audited the Airport’s basic financial statements for the year ended June 30, 2014, for which we issued an
unmodified opinion dated December 22, 2014. As discussed in Note H to the financial statements, the
Airport adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions — An
Amendment of GASB Statement No. 27. In connection with the adoption of this accounting standard, the
previously reported total net position in the Statement of Net Position was restated.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management’s
discussion and analysis, the schedules of the Town’s proportionate share of the net pension liability and its
contributions to pension plans, and the funding progress and contribution funding for other postemployment
benefits information information as listed in the table of contents, be presented to supplement the basic
financial statements. Such information, although not 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 Reporting Required By Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report dated January 15, 2016 on
our consideration of the Town of Nantucket, Massachusetts’ internal control over financial reporting and our
tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other
matters. That report was issued in conjunction with the audit of the Airport, which is an enterprise fund of
the Town of Nantucket, Massachusetts. 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 the 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 the Town’s internal
control over financial reporting and compliance.
Roselli, Clark & Associates
Certified Public Accountants
Woburn, Massachusetts
January 15, 2016
Nantucket Memorial Airport Page 2 of 27 Basic Annual Financial Statements
Roselli, Clark and Associates
MANAGEMENT’S DISCUSSION AND ANALYSIS
Our discussion and analysis of the Nantucket Memorial Airport’s (the “Airport”) financial performance
provides an overview of the Airport’s financial activities for the fiscal year ended June 30, 2015. The
Airport is an enterprise fund of the Town of Nantucket, Massachusetts (the “Town”). We encourage
readers to consider the information presented here in conjunction with their review of the basic financial
statements, notes to the basic financial statements and required supplementary information.
FINANCIAL HIGHLIGHTS
The assets of the Airport exceeded its liabilities at the close of the most recent fiscal year by
nearly $51.6 million (total net position).
The Airport’s total net position at June 30, 2015 increased over $3.4 million, or 7.2%, from
June 30, 2014. The Airport reported a net loss from operations of nearly $1.6 million in 2015.
This operating loss was offset by nearly $5.4 million in intergovernmental revenues, primarily
in the form of capital grants.
The adoption of new pension accounting standards in fiscal year 2015 required the restatement
of the Airport’s prior year’s unrestricted net position and added a new $5.1 million long-term
liability entitled net pension liability. The impact of this restatement to the Airport’s net
position was a decrease of over $5.6 million.
The Airport’s general obligation bonds, net of unamortized premiums, decreased to
approximately $11.7 million at June 30, 2015 from $12.4 million at June 30, 2014 as scheduled
principal repayments exceeded borrowings in fiscal year 2015.
OVERVIEW OF THE FINANCIAL STATEMENTS
This report consists of two parts: management’s discussion and analysis and the basic financial
statements. The financial statements also include notes that explain information in the financial
statements in more detail. The Airport is an enterprise fund of the Town. Accordingly, the financial
statements are presented using the economic resources measurement focus and the accrual basis of
accounting. Enterprise fund statements offer short-term and long-term financial information about the
activities and operations of the Airport. These statements are presented in a manner similar to a private
business.
The statement of net position presents information on all of the Airport’s assets and deferred outflows of
resources and its liabilities and deferred inflows of resources, with the difference between the two
reported as net position. Over time, increases or decreases in net position may serve as a useful
indicator of whether the financial condition of the Airport is improving or deteriorating.
The statement of revenues, expenses and changes in net position presents information showing how the
Airport’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 receivables and earned but unused
vacation leave.)
The statement of cash flows presents information on the Airport’s cash receipts, cash payments and
changes in cash resulting from operations, investments and financing activities.
Nantucket Memorial Airport Page 3 of 27 Basic Annual Financial Statements
FINANCIAL ANALYSIS
The following represents the condensed comparative financial data for the Airport for each of the years
ended June 30, 2015 and 2014:
June 30,June 30,
2015 2014
(a)
Assets
Current assets 10,804,885$ 8,311,013$
Capital assets, net 63,477,567 62,126,133
Total assets 74,282,452 70,437,146
Deferred Outflows of Resources
Pensions 8,858 -
Liabilities
Current liabilities 4,087,921 3,367,232
Noncurrent liabilities 18,625,478 18,937,684
Total liabilities 22,713,399 22,304,916
Net Position
Net investment in capital assets 50,246,479 48,749,526
Unrestricted 1,331,432 (617,296)
Net Position 51,577,911$ 48,132,230$
2015 2014
Operating revenues 13,119,422$ 12,852,708$
Expenses:
Operating expenses 11,647,329 11,944,071
Employee benefits 654,814 704,116
Depreciation expense 2,394,011 2,391,192
Total expenses 14,696,154 15,039,379
Nonoperating revenues, net 5,053,413 1,187,375
Net transfers (31,000) (24,498)
Change in net position 3,445,681 (1,023,794)
Net position - beginning of year 48,132,230 54,789,093
Restatement (a)- (5,633,069)
Net position - end of year 51,577,911$ 48,132,230$
(a) As restated. See Notes E and H.
Year Ended June 30,
Exhibit II - Changes in Net Position
Exhibit I - Net Position
Nantucket Memorial Airport Page 4 of 27 Basic Annual Financial Statements
As noted earlier, net position may serve over time as a useful indicator of the Airport’s financial
condition. In the case of the Airport, assets and deferred outflows of resources exceeded liabilities and
deferred inflows of resources by nearly $51.6 million at June 30, 2015.
The Airport’s net position is categorized as either unrestricted or net investment in capital assets. The
vast majority of the Airport’s net position is classified as net investment in capital assets. This includes
the historical cost or donated value of land, buildings, infrastructure, vehicles, machinery and equipment
less any related debt used to acquire those assets outstanding at year end. The Airport uses these assets
to serve its customers and consequently these assets are not available for future spending. Although the
Airport’s 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.
Unrestricted net position totaled over $1.3 million at June 30, 2015 and may be used by the Airport to
meet its future obligations, subject to statutory restrictions. Unrestricted net position increased by over
$1.9 million in fiscal year 2015 primarily as a result of capital grants.
The Airport’s operations are subject to annual appropriations by Town Meeting. Statutory accounting
differs greatly from accounting generally accepted in the United States of America, or GAAP. On a
statutory basis, the Airport reported net operating income of $2,041,498. The primary contributors to
the difference between the Airport’s statutory operating income and its decrease in net position (i.e., net
loss) on a GAAP basis include:
CAPITAL ASSET AND DEBT ADMINISTRATION
The Airport’s capital assets, net of accumulated depreciation totaled nearly $63.5 million at June 30,
2015. This was approximately $1.4 million higher than the June 30, 2014 balance as fiscal year 2015
additions exceeded depreciation expense. Note E to the financial statements presents a detailed analysis
of the Airport’s capital assets.
General obligations bonds payable, net of unamortized premiums, totaled nearly $11.7 million at June
30, 2015, which was approximately $0.7 million lower than the balance at June 30, 2014. Notes G and
H to the financial statements present detailed analyses of long-term and short-term debt.
Net income on a statutory basis 2,041,498$
Adjustments to convert statutory records to GAAP:
Repayment of bonds 834,000
Depreciation expense (2,394,011)
Capital additions 3,745,445
Revenue recognition (287,695)
Other postemployment benefits (262,027)
Other items (231,529)
Total adjustments to statutory net income 1,404,183
Increase in net position on a GAAP basis 3,445,681$
Nantucket Memorial Airport Page 5 of 27 Basic Annual Financial Statements
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the Airport’s finances for all those
with an interest in its finances. Questions concerning any of the information provided in this report or
requests for additional financial information should be addressed to the Nantucket Memorial Airport, 14
Airport Road, Nantucket, Massachusetts 02554 or to the Town of Nantucket’s Finance Department, 16
Broad Street, Nantucket, Massachusetts, 02554.
Nantucket Memorial Airport Page 6 of 27 Basic Annual Financial Statements
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
STATEMENT OF NET POSITION
JUNE 30, 2015
Assets:
Current assets:
Cash and cash equivalents 9,527,534$
Trade receivables, net of allowance of $5,000 516,110
Intergovernmental receivables 403,327
Inventory 357,914
Total current assets 10,804,885
Noncurrent assets:
Nondepreciable capital assets 10,911,170
Capital assets, net of accumulated depreciation 52,566,397
Total noncurrent assets 63,477,567
Total Assets 74,282,452
Deferred outflows of resources 8,858
Liabilities:
Current liabilities:
Warrants payable 800,791
Accrued payroll 99,681
Accrued interest 92,051
Security deposits 387,286
Notes payable 1,573,912
Bonds payable 847,154
Compensated absences 287,046
Total current liabilities 4,087,921
Noncurrent liabilities:
Bonds payable 10,810,022
Compensated absences 287,047
Other postemployment benefits 2,356,377
Net pension liability 5,172,032
Total noncurrent liabilities 18,625,478
Total Liabilities 22,713,399
Deferred inflows of resources -
Net Position:
Net investment in capital assets 50,246,479
Unrestricted net assets 1,331,432
Total Net Position 51,577,911$
See accompanying notes to basic financial statements.
Nantucket Memorial Airport Page 7 of 27 Basic Annual Financial Statements
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
YEAR ENDED JUNE 30, 2015
Operating Revenues:
Charges for services and other miscellaneous revenues 13,119,422$
Total Operating Revenues 13,119,422
Operating Expenses:
Operating expenses 11,647,329
Maintenance 654,814
Depreciation expense 2,394,011
Total Operating Expenses 14,696,154
Operating Loss (1,576,732)
Nonoperating Revenues:
Intergovernmental grants 90,820
Interest income 22,909
Interest expense (438,160)
Total Nonoperating Revenues (324,431)
Loss Before Capital Contributions and Transfers (1,901,163)
Capital Contributions:
Capital grants 5,377,844
Transfers:
Transfers out (31,000)
Change in Net Position 3,445,681
Net Position - Beginning of year (as restated - see Notes E and H)48,132,230
Net Position - End of year 51,577,911$
See accompanying notes to basic financial statements.
Nantucket Memorial Airport Page 8 of 27 Basic Annual Financial Statements
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 2015
Cash Flows from Operating Activities:
Receipts from customers and users 13,394,482$
Payments to vendors (8,135,066)
Payments for salaries, wages and related employee benefits (3,651,377)
Net cash provided by operating activities 1,608,039
Cash Flows from Noncapital Financing Activities:
Intergovernmental grants for operations 90,820
Transfers out (31,000)
Net cash used in capital and related financing activities 59,820
Cash Flows from Capital and Related Financing Activities:
Principal payments on bonds and notes payable (834,000)
Intergovernmental grants for construction 5,396,789
Acquisition and construction of capital assets (3,745,445)
Proceeds from bond anticipation notes 1,717,912
Repayment of bond anticipation notes (1,001,000)
Interest payments on bonds and notes payable (430,551)
Net cash provided by capital and related financing activities 1,103,705
Cash Flows from Investing Activities:
Investment income 22,909
Net cash provided by investing activities 22,909
Net Increase in Cash and Cash Equivalents 2,794,473
Cash and Cash Equivalents:
Beginning of year 6,733,061
End of year 9,527,534$
Reconciliation of Operating Income to Net Cash Provided By
Operating Activities:
Operating loss (1,576,732)$
Depreciation and amortization 2,394,011
Changes in assets and liabilities:
Accounts receivable 268,751
Inventory 12,905
Warrants payable and accrued expenses 29,754
Accrued long-term employee benefits 473,041
Security deposits 6,309
Net cash provided by operating activities 1,608,039$
See accompanying notes to basic financial statements.
Nantucket Memorial Airport Page 9 of 27 Basic Annual Financial Statements
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
NOTES TO THE FINANCIAL STATEMENTS
AS OF AND FOR THE YEAR ENDED JUNE 30, 2015
NOTE A – REPORTING ENTITY
The Nantucket Memorial Airport (the “Airport”) is an enterprise fund of the Town of Nantucket,
Massachusetts (the “Town”). The Airport operates three runways and is the second busiest airport in
the Commonwealth of Massachusetts. The Airport’s operations are governed by the Nantucket
Memorial Airport Commission (the “Commission”), which is a five-person board appointed by the
Town’s Board of Selectmen.
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the Airport conform to accounting principles generally accepted in the
United States of America, or GAAP, as applicable to governmental units. The Airport’s financial
statements are not intended and do not present fairly the financial position of the Town.
Following are the significant accounting and reporting policies of the Airport:
Basis of Presentation – The Airport’s financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting as specified by the Governmental Accounting
Standards Board’s (“GASB”) requirements for an enterprise fund. The Airport’s operations are
accounted for as an enterprise fund, which is a proprietary fund type. Proprietary funds distinguish
operating revenues and expenses from nonoperating revenues and expenses. Operating revenues and
expenses result from the day-to-day operation of the Airport. All other revenues and expenses are
reported as nonoperating revenues and expenses.
Use of Estimates – The preparation of basic financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure for contingent assets and liabilities at the date of the basic financial statements,
and the reported amounts of the revenues and expenses during the fiscal year. Actual results could
vary from estimates that were used.
Revenue Recognition – Revenues from the Airport’s operations are recorded when earned, regardless
of the timing of related cash flows. Grants are recognized as revenue as soon as all eligibility
requirements imposed by the provider have been met.
Fair Value of Financial Instruments – The carrying amount of cash and cash equivalents, accounts
receivable and warrants payable approximates fair value due to the short-term nature of these items.
Taxes – The Airport is exempt from all federal and state income taxes and local property taxes.
Cash and Cash Equivalents – Cash and cash equivalents include cash on hand, demand deposits and
short-term investments with original maturities of three months or less. Investments are carried at fair
value.
Nantucket Memorial Airport Page 10 of 27 Basic Annual Financial Statements
Accounts Receivable – Accounts receivable are presented net of an allowance for uncollectible
accounts. An allowance for uncollectible accounts is maintained for estimated losses resulting from
the Airport’s inability to collect payments from customers. This allowance is established using
estimates based on factors such as the composition of the accounts receivable aging, historical bad
debts, changes in payment patterns, changes to customer creditworthiness and current economic
trends.
Inventory – Inventory is stated at the lower of cost or market, with cost being determined on the first-
in, first-out method. Inventory consists of aviation fuel at June 30, 2015.
Capital Assets – Capital assets are recorded at historical cost or estimated historical cost if purchased
or constructed. All purchases and construction costs in excess of $10,000 and with useful lives
exceeding one year are capitalized at the date of acquisition or construction. The costs of normal
repairs and maintenance that do not add to the value of the asset or materially extend assets lives are
not capitalized.
Capital assets (excluding land) are depreciated by the Airport on a straight-line-basis. The estimated
useful lives (in years) of capital assets by major asset class are as follows:
Infrastructure 40 to 70
Buildings 33 to 50
Vehicles 5
Machinery and equipment 10 to 15
Furniture, fixtures and computer equipment 5 to 10
Deferred Outflows/Inflows of Resources – In addition to assets, the statement of net 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(s) and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The Airport reports deferred outflows of resources relative to
pensions at June 30, 2015, as more fully described in Note I.
In addition to liabilities, the statement of net position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of
resources, represents an acquisition of net position that applies to a future period(s) and so will not be
recognized as an inflow of resources (revenue) until that time. The Airport does not have any items
that meet the criteria of a deferred inflow of resources.
Compensated Absences – Employees earn vacation and sick time as they provide services to the
Airport. Employees may accumulate (subject to certain limitations) unused sick time earned and,
upon retirement, termination or death, be compensated for unused portions of the time earned.
Unused vacation time may be carried for six months, then, it reverts to a use-it or lose-it policy.
These vested and accumulated benefits are reported as a liability in these financial statements.
NOTE C – CASH AND CASH EQUIVALENTS
As required by state law, the Airport’s cash is in the control of the Town’s treasurer. State laws and
regulations require the treasurer to invest funds only in pre-approved investment instruments, which
include, but are not necessarily limited to, bank deposits, money markets, certificates of deposit, U.S.
obligations, repurchase agreements, and the State Treasurer’s investment pool (“the Pool”). In
Nantucket Memorial Airport Page 11 of 27 Basic Annual Financial Statements
addition, the statutes impose various limitations on the amount and length of investments and
deposits. Repurchase agreements cannot be for a period of over ninety days, and the underlying
security must be a United States obligation.
The Pool meets the criteria of an external investment pool. The Pool is administered by the
Massachusetts Municipal Depository Trust (“MMDT”), which was established by the Treasurer of the
Commonwealth who serves as Trustee. The fair value of the position in the Pool is the same as the
value of the Pool shares.
At June 30, 2015, the Airport maintained $3,533,711 in investments that it classified as cash
equivalents in these financial statements. Short-term investments consisted of $654,336 in the
MMDT and $2,879,375 in repurchase agreements. The Airport’s carrying amount of cash totaled
$2,460,112 and is pooled with the Town’s cash.
The Board of Selectmen has adopted policies related to risk for the Town, its enterprise funds, all
departments and the County of Nantucket (the “County”). These policies may be reviewed at the
Town’s website, under the Finance Department. Those policies that apply to the Airport are
summarized below:
Custodial Credit Risk: Deposits and Investments - In the case of deposits, this is the risk that in the
event of a bank failure, the government’s deposits may not be returned to it. The Town’s current
deposit requires that the Treasurer review each bank doing business with the Town on a quarterly
basis. The policy does not restrict the value of uninsured or uncollateralized investments held at any
time.
In the case of investments, this is the risk that in the event of the invested party not being able to
provide required payments to investors, ceasing to exist, or filing of bankruptcy, the Town may not be
able to recover the full amount of its principal investment and/or investment earnings. The Town’s
current policy requires all securities not held directly by the Treasurer must be held by a third party
custodian approved by the Treasurer in the Town/County’s name and tax identification number.
Concentration of Credit Risk – The Town does not place a limit on the amount that may be invested
in any one issuer. All of the Airport’s investments were in the form of pooled investments with the
MMDT and repurchase agreements. Approximately 19% of the Airport’s investments were in the
MMDT and 81% in repurchase agreements.
Interest Rate Risk – The Town limits investment maturities as a means of managing its exposure to
fair value losses arising from increasing interest rates. The policy limits investments of operating
funds to one year or less and limits investment maturities of trust funds and other special funds to
periods no longer that seven years, maintaining an average maturity no greater than three years for the
investment portfolio.
Credit Risk – The Town restricts the investment of operating funds to U.S. Treasury or Agency
securities which carry “AAA” ratings. The Airport’s current investments are short-term and
classified as cash equivalents.
Nantucket Memorial Airport Page 12 of 27 Basic Annual Financial Statements
NOTE D – ACCOUNTS RECEIVABLE
Accounts receivable at June 30, 2015 consisted of the following:
NOTE E – CAPITAL ASSETS
Capital asset activity for the Airport for the fiscal year ended June 30, 2015 was as follows:
The Airport conducted an evaluation of its capital assets in fiscal year 2015. As a result of this
evaluation, the Airport determined that previously reported capital assets, net were overstated by
$499,005. This amount was reported as a restatement to the Airport’s net position at June 30, 2014.
Gross
Amount
Allowance for
Uncollectible
Accounts
Net
Amount
Airport fees 521,110$ (5,000)$ 516,110$
Intergovernmental 403,327 - 403,327
924,437$ (5,000)$ 919,437$
Beginning Ending
Balance Increases Decreases Balance
Capital assets not being depreciated:
Land 2,736,587$ -$ -$ 2,736,587$
Construction in process 5,868,673 2,994,662 (688,752) 8,174,583
Total capital assets not being depreciated 8,605,260 2,994,662 (688,752) 10,911,170
Capital assets being depreciated:
Infrastructure (a)34,429,586 771,427 - 35,201,013
Buildings and improvements 45,745,494 51,052 - 45,796,546
Vehicles 3,220,499 365,792 (39,648) 3,546,643
Machinery and equipment 1,326,238 251,264 (36,255) 1,541,247
Total capital assets being depreciated 84,721,817 1,439,535 (75,903) 86,085,449
Less accumulated depreciation (a)(31,200,944) (2,394,011) 75,903 (33,519,052)
Total capital assets being depreciated, net 53,520,873 (954,476) - 52,566,397
Capital assets, net 62,126,133$ 2,040,186$ (688,752)$ 63,477,567$
(a) As restated; see below.
Nantucket Memorial Airport Page 13 of 27 Basic Annual Financial Statements
NOTE F – INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
In fiscal year 2015, the Airport transferred $31,000 to the Town for capital purposes. The Airport did
not report any interfund receivables or payables at June 30, 2015.
NOTE G – TEMPORARY DEBT PLAN
The Airport is authorized to borrow on a temporary basis to fund the following:
Current Operating Costs – Prior to the collection of revenues, expenditures may be financed through
the issuance of tax anticipation notes (“TANS”) or revenue anticipation notes (“RANS”).
Capital Projects and Other Approved Costs – Projects may be temporarily funded through the
issuance of bond anticipation notes (“BANS”) or grant anticipation notes (“GANS”). In certain
cases, prior to the issuance of these temporary notes, the governing body must take the necessary
legal steps to authorize the issuance of the general obligation bonds. Temporary notes may not
exceed the aggregate amount of bonds authorized or the grant award amount.
Details related to temporary debt activity for the fiscal year ended June 30, 2015 was as follows:
Temporary notes are general obligations of the Airport and carry maturity dates not in excess of one
year and are interest bearing and will be paid through future issuance of general obligation bonds.
The BANS were issued primarily to finance costs related to the Airport’s general administration
building construction, runway improvements and an Airport Master Plan update.
In October 2015, the Town issued approximately $2.9 million in general obligation bonds with
variable interest rates of 2.0% to 3.0%. Of this total, $144,000 was used to retire a portion of the
outstanding BAN maturing on November 13, 2015.
Balance Balance
Interest Maturity July 1, Subsequently June 30,
Type Rate Date 2014 Additions Retirements Rollovers Bonded 2015
BAN 1.00% matured 1,001,000$ -$ (491,000)$ (510,000)$ -$ -$
BAN 0.75% 11/13/15 - - 1,207,912 510,000 (144,000) 1,573,912
1,001,000$ -$ 716,912$ -$ (144,000)$ 1,573,912$
Nantucket Memorial Airport Page 14 of 27 Basic Annual Financial Statements
NOTE H – LONG-TERM OBLIGATIONS
The following reflects the activity in the Airport’s long-term liability accounts during the fiscal year
ended June 30, 2015:
Bond and Note Indebtedness – The Airport, through the Town, issues general obligation bonds and
notes to provide funds for the acquisition and construction of major capital facilities. State law
permits the Town, under the provisions of Chapter 44, Section 10, to authorize indebtedness up to a
limit of five percent of its equalized valuation. Debt issued in accordance with this section of the law
is designated as being “inside the debt limit.” In addition, the Town may authorize debt in excess of
that limit for specific purposes. Such debt, when issued, is designated as being “outside the debt
limit.”
General obligation bonds outstanding at June 30, 2015 were as follows:
Beginning Ending Due within
Description of Issue Balance Additions Deletions Balance one year
General obligation bonds and notes payable 12,134,000$ 144,000$ (834,000)$ 11,444,000$ 820,000$
Unamortized premiums 241,607 - (28,431) 213,176 27,154
Compensated absences 392,189 377,999 (196,095) 574,093 287,046
Other postemployment benefits 2,094,350 377,913 (115,886) 2,356,377 -
Net pension liability (a)5,134,064 506,911 (468,943) 5,172,032 -
Total 19,996,210$ 1,406,823$ (1,643,355)$ 19,759,678$ 1,134,200$
(a) The Airport adopted GASB Statement No. 68 in fiscal year 2015, which resulted in the restatement of the beginning
balances in its unrestricted net assets and its net pension liability. The Airport recorded $5,134,064 as a restatement
in connection with the adoption of this new accounting standard.
Outstanding Outstanding
Interest at June 30, Maturities and at June 30,
Description Rate 2015 Additions Retirements 2015
General obligation bonds - November 2005 3.75 - 5.00% 40,000$ -$ (20,000)$ 20,000$
General obligation bonds - February 2008 3.00 - 5.00% 225,000 - (75,000) 150,000
General obligation bonds - February 2011 2.00 - 5.00% 4,570,000 - (155,000) 4,415,000
General obligation bonds - June 2012 2.00 - 5.00% 2,460,000 - (145,000) 2,315,000
General obligation bonds - June 2013 2.00 - 3.00% 1,175,000 - (145,000) 1,030,000
General obligation bonds - June 2014 2.00 - 3.35% 3,664,000 - (294,000) 3,370,000
General obligation bonds - October 2015 2.00 - 3.00%- 144,000 - 144,000
12,134,000 144,000 (834,000) 11,444,000
Unamortized premiums on June 2012 bonds 241,607 - (28,431) 213,176
12,375,607$ 144,000$ (862,431)$ 11,657,176$
Nantucket Memorial Airport Page 15 of 27 Basic Annual Financial Statements
Future Debt Payoff – Payments on general long-term debt obligation bonds due in future years are as
follows:
At June 30, 2015, the Airport had approximately $7,172,000 in authorized and unissued debt.
NOTE I – RETIREMENT SYSTEM
Pension Plan Description – The Airport contributes to the Barnstable County Regional Retirement
System Full Name (the “Retirement System”), a cost-sharing multiple-employer defined benefit
pension plan. The Retirement System was established under Chapter 32 of Massachusetts General
Laws. The Retirement System is administered by the Barnstable County Retirement Board (the
“Retirement Board”). Stand-alone audited financial statements for the year ended December 31, 2014
were issued and are available at the Retirement Board’s offices located at 750 Attucks Lane, Hyannis,
Massachusetts 02601.
Current membership in the Retirement System for all employers as of December 31, 2014 was as
follows:
Retirees and beneficiaries currently receiving benefits 2,729
Inactive members entitled to a return of their employee contributions 513
Inactive members with a vested right to a deferred or immediate benefit 138
Active members 4,696
8,076
Benefit Terms – Membership in the Retirement System is mandatory for all full-time employees and
non-seasonal, part-time employees who, in general, regularly work more than twenty-five hours per
week. Members of the Retirement System do not participate in the federal Social Security retirement
system.
Massachusetts contributory retirement system benefits are uniform from retirement system to system.
The Retirement System provides for retirement allowance benefits up to a maximum of 80% of a
participant’s highest three-year or five-year average annual rate of regular compensation, depending
Year Ending
June 30,Principal Interest Total
2016 820,000$ 401,243$ 1,221,243$
2017 839,000 385,309 1,224,309
2018 755,000 359,287 1,114,287
2019 740,000 337,187 1,077,187
2020 625,000 314,138 939,138
2021 - 2025 2,825,000 1,241,387 4,066,387
2026 - 2030 2,455,000 762,939 3,217,939
2031 - 2035 2,100,000 310,931 2,410,931
2036 285,000 13,894 298,894
Total 11,444,000$ 4,126,315$ 15,570,315$
Nantucket Memorial Airport Page 16 of 27 Basic Annual Financial Statements
on the participant’s date of hire. Benefit payments are based upon a participant’s age, length of
creditable service, level of compensation and job classification.
The most common benefits paid by the Retirement System include normal retirement, disability
retirement and survivor benefits.
Normal retirement generally occurs at age 65. However, participants may retire after twenty
years of service or at any time after attaining age 55, if hired prior to April 2, 2012 or at any time
after attaining age 60 if hired on or after April 2, 2012. Participants with hire dates subsequent to
January 1, 1978 must have a minimum of ten years’ creditable service in order to retire at age 55.
Participants become vested after ten years of service. Benefits commencing before age 65 are
provided at a reduced rate. Members working in certain occupations may retire with full benefits
earlier than age 65.
Ordinary disability retirement is where a participant is permanently incapacitated from a cause
unrelated to employment. Accidental disability retirement is where the disability is the result of
an injury or illness received or aggravated in the performance of duty. The amount of benefits to
be received in such cases is dependent upon several factors, including the age at which the
disability retirement occurs, the years of service, average compensation and veteran status.
Survivor benefits are extended to eligible beneficiaries of participants whose death occurs prior to
or following retirement.
Cost-of-living adjustments granted to members of Massachusetts retirement systems granted between
1981 and 1997 and any increases in other benefits imposed by the Commonwealth during those years
have been the financial responsibility of the Commonwealth. Beginning in 1998, the funding of cost-
of-living amounts became the responsibility of the participating units like the Retirement System.
Contributions Requirements – The Retirement System and its member employers have elected
provisions of Chapter 32, Section 22D (as amended) of Massachusetts General Laws, which require
that a funding schedule be established to fully fund the pension plan by June 30, 2040. Under
provisions of this law, participating employers are assessed their share of the total retirement cost
based on the entry age, normal actuarial cost method.
The Airport contributed $477,801 to the Retirement System in fiscal year 2015, which equaled the
actuarially-determined contribution requirement for the fiscal year. The Airport’s contributions as a
percentage of covered payroll was approximately 20% in fiscal year 2015.
Net Pension Liability – At June 30, 2015, the Airport reported a liability of $5,172,032 for its
proportionate share of the net pension liability. The net pension liability was measured as of January
1, 2014 and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of that date. These figures were updated by the independent actuary to
December 31, 2014. There were no material changes made in this update to the actuarial assumptions
(see below) nor were there any material changes to the Retirement System’s benefit terms since the
actuarial valuation.
The Airport’s proportion of the net pension liability is based on a projection of the Airport’s long-
term share of contributions to the Retirement System relative to the projected contributions of all
employers. The Airport’s proportion was approximately 0.916% at December 31, 2014, which was
consistent with the proportion measured at January 1, 2014.
Nantucket Memorial Airport Page 17 of 27 Basic Annual Financial Statements
Fiduciary Net Position – The elements of the Retirement System’s basic financial statements (that is,
all information about the Retirement System’s assets, deferred outflows of resources, liabilities,
deferred inflows of resources and fiduciary net position) can be found in the Retirement System’s full
financial statements as of and for the year ended December 31, 2014, which can be obtained by
contacting the Retirement Board.
The Retirement System’s fiduciary net position was determined using the accrual basis of accounting.
The Retirement System’s accounting records are maintained on a calendar-year basis in accordance
with the standards and procedures established by PERAC. Contributions from employers and
employees are recognized in the period in which they become due pursuant to formal commitments,
statutory or contractual requirements. Benefit payments (including refunds of employee
contributions) are recorded when incurred, regardless of the timing of payment. Investments are
reported at fair value; fair value is determined as the price one would receive in an orderly transaction
between market participants at a measurement date.
Pension Expense – The Airport recognized $506,911 in pension expense in the statement of activities
in fiscal year 2015.
Deferred Outflows of Resources and Deferred Inflows of Resources – At June 30, 2015, the Airport
reported deferred outflows of resources and deferred inflows of resources related to pensions from the
following sources:
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Differences between expected and actual
experience
$ —
$ —
Changes of assumptions — —
Net difference between projected and actual
earnings on pension plan investments
8,858
—
Changes in proportion and differences
between Airport contributions and
proportionate share of contributions
—
—
Airport contributions subsequent to the
measurement date
—
—
Total $ 8,858 $ —
The deferred outflows of resources and deferred inflows of resources are expected to be recognized in
the Airport’s pension expense as follows:
Year ended June 30,
2016 $ 2,214
2017 2,214
2018 2,215
2019 2,215
Total $ 8,858
Nantucket Memorial Airport Page 18 of 27 Basic Annual Financial Statements
Actuarial Valuation – The measurement of the Retirement System’s total pension liability is
developed by an independent actuary. The latest actuarial valuation was performed as of January 1,
2014. The significant actuarial assumptions used in the January 1, 2014 actuarial valuation included:
Actuarial cost method: Entry age normal cost method
Amortization method: Payments increase at 4.0%, except for 2010 Early
Retirement Incentive, which is a level payment
Remaining amortization period: 22 years for 2002 and 2003 Early Retirement
Incentives, retiree sherrifs liability and remaining
unfunded liability; 8 years for 2010 Early Retirement
Inventive
Asset valuation method: Sum of actuarial value at beginning of the year,
contributions and investment earnings based on the
actuarial interest assumption less benefit payments
and operating expenses plus 20% of the market value
at the end of the year in excess of that sum, plus
additional adjustment toward market value as
necessary so that the final actuarial value is within
20% of market value
Inflation rate: 4.00% per annum
Investment rate of return: 7.75% per annum
Projected salary increases: Service based table with ultimate ranges of 4.25%,
4.50% and 4.75% for groups 1, 2 and 4, respectively
Cost of living adjustments: 3% on the first $15,000 of benefits
Rates of disability: For general employees, it was assumed that 45% of all
disabilities are normal (55% are service connected);
for police and fire employees, 10% of all disabilities
are assumed to be ordinary (90% are service
connected)
Mortality rates: Pre-retirement rates reflect the RP-2000 Employee
projected generationally with a Scale AA to 2010;
healthy retiree rates reflect the RP-2000 Healthy
Annuitant table projected generationally with a Scale
AA from 2010; disabled retiree rates reflect the RP-
2000 Healthy Annuitant Mortality table set forward
three years (for males only) projected generationally
with Scale AA from 2010
The investment rate of return assumption is a long-term assumption and is based on capital market
expectations by asset class, historical returns and professional judgment. The market expectations
analysis used a building-block approach, which included expected returns by asset class and the target
asset allocation. These ranges 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 returns for each
major asset class are summarized in the following table:
Nantucket Memorial Airport Page 19 of 27 Basic Annual Financial Statements
Asset Class
Target
Allocation
Long-term Expected
Real Rate of Return
Domestic equity 20.0% 6.6%
International developed markets equity 16.0% 7.1%
International emerging markets equity 7.0% 9.4%
Core fixed income 13.0% 2.2%
High-yield fixed income 10.0% 4.7%
Real estate 10.0% 4.4%
Commodities 4.0% 4.4%
Hedge fund, GTAA, Risk parity 10.0% 3.9%
Private equity 10.0% 11.7%
Discount Rate – The discount rate used to measure the total pension liability in the January 1, 2014
actuarial valuation report was 7.75%, which was a reduction from the previous discount rate of
7.875%. The projection of cash flows used to determine the discount rate assumed plan member
contributions were made at the current contribution rate and that employer contributions will be made
at rates equal to the actuarially-determined contribution rates and the member rate. Based on those
assumptions, the Retirement System’s fiduciary net position was projected to be available to make all
projected future benefit payments of 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 Analysis – The following presents the Airport’s proportionate share of the net pension
liability calculated using the discount rate of 7.75% as well as the Airport’s proportionate share of the
net pension liability using a discount rate that is one percentage point lower (6.75%) or one
percentage point higher (8.75%) than the current rate (dollar amounts are in thousands):
1% Decrease
(6.75%)
Current
Discount
(7.75%)
1% Increase
(8.75%)
Airport’s proportionate share of
the net pension liability
$ 6,667,547
$ 5,172,032
$ 3,903,912
NOTE J – OTHER POSTEMPLOYMENT BENEFITS
In addition to the pension benefits previously described, the Airport provides health and life insurance
benefits to current and future retirees, their dependents and beneficiaries (the “Plan”) in accordance
with Massachusetts General Law Chapter 32B. Specific benefit provisions and contribution rates are
established by collective bargaining agreements, state law, and Town ordinance. All benefits are
provided through the Town’s insurance program. The Plan does not issue a stand-alone financial
report since there are no assets legally segregated for the sole purpose of paying benefits under the
Plan. For purposes of the Plan, the Airport is a department within the Town, which at June 30, 2014
(the date of the latest actuarial valuation) had 490 active employees and 311 retirees, beneficiaries
and dependents for a total of 801.
Nantucket Memorial Airport Page 20 of 27 Basic Annual Financial Statements
Funding Policy – The contribution requirements of Plan members and the Airport are established
through collective bargaining agreements. Retirees contribute approximately 20% of the calculated
contribution primarily through pension benefit deductions. The remainder of the cost is funded by the
Airport. The Airport currently contributes enough money to the Plan to satisfy current obligations on
a pay-as-you-go basis. The costs of administering the Plan are paid by the Airport.
Annual OPEB Cost and Net OPEB Obligation – The Airport’s annual OPEB cost is calculated based
on the annual required contribution (“ARC”) of the employer, and actuarially determined amount that
is calculated in accordance with GASB Statement Number 45, Accounting and Financial Reporting
by Employers for Postemployment Benefits Other Than Pensions. The ARC represents a level of
funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize
any unfunded liabilities over a period not to exceed thirty years.
The following table reflects the activity regarding the Airport’s OPEB obligation:
Trend information regarding annual OPEB cost, the percentage of the annual OPEB cost contributed
and the net OPEB obligation is as follows:
Fiscal Year
Ending
Annual
OPEB Cost
(AOPEBC)
Percentage of
AOPEBC
Contributed
Net OPEB
Obligation
June 30, 2015 $ 377,913 31% $ 2,356,377
June 30, 2014 385,890 38% 2,094,350
June 30, 2013 387,675 34% 1,854,402
Annual required contribution (ARC)365,093$
Interest on net OPEB obligation 76,423
Adjustment to ARC (63,603)
Annual OPEB cost 377,913
Contributions made (115,886)
Increase in net OPEB obligation 262,027
Net OPEB obligation at beginning of year 2,094,350
Net OPEB obligation at end of year 2,356,377$
Nantucket Memorial Airport Page 21 of 27 Basic Annual Financial Statements
Funding Status and Funding Progress – The funded status of the Plan at June 30, 2015 for the Town,
for which the Airport is an enterprise fund, for the most recent actuarial valuation performed as of
June 30, 2014, was as follows (in millions):
Actuarial
Value of
Assets
(A)
Actuarial
Accrued
Liability (AAL)
Entry Age
Normal Cost
(B)
Unfunded
AAL
(UAAL)
(B – A)
Funded
Ratio
(A/B)
Covered
Payroll
(C)
UAAL as a
Percentage
of Covered
Payroll
((B-A)/C)
$0.25 $ 88.8 $ 88.8 0.28% N/A N/A
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events into the future. Amounts determined
regarding the funded status of the Plan and the ARC of the employer are subject to continual revision
as estimates are compared to actual results and past expectations. The schedules of funding progress,
presented as required supplementary information (RSI) following the notes to the financial
statements, present multi-year trend information about whether the actuarial values of plan assets are
increasing or decreasing over time relative to the AAL for benefits.
Methods and Assumptions – Projections of benefits for financial reporting purposes are based on the
substantive Plan and include the types of benefits provided at the time of each valuation and the
historical pattern of sharing of benefit costs between the employer and the Plan members to that point.
The actuarial methods and assumptions used include techniques that are designed to reduce short-
term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the
long-term perspective of the calculations. The significant methods and assumptions as of the latest
valuation are as follows:
Valuation date June 30, 2014
Actuarial cost method Projected Unit Credit
Amortization method Amortization payments increasing at 4.0%
Amortization period 30 years open
Interest discount rate 4.5%
Inflation rate 4.0%
Healthcare/medical cost trend rate 10.0% decreasing by 0.5% for 10 years to an
ultimate level of 5.0% per year
NOTE K – COMMITMENTS AND CONTINGENCIES
At June 30, 2014, the Airport had open contracts totaling over $5.8 million, the majority of which
pertained to various construction-related projects at the Airport facility.
The Airport is party to certain legal claims, which are subject to many uncertainties, and the outcome
of individual litigation matters is not always predictable with assurance. Although the amount of
liability, if any, at June 30, 2015, cannot be determined, management believes that any resulting
liability, if any, should not materially affect the basic financial statements of the Airport at June 30,
2015.
Nantucket Memorial Airport Page 22 of 27 Basic Annual Financial Statements
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor
agencies, principally the federal and state governments. Any disallowed claims, including amounts
already collected, may constitute a liability of the applicable funds. The amount, if any, of
expenditures which may be disallowed by the grantor cannot be determined at this time, although the
Airport expects such amounts, if any, to be immaterial.
The Airport is subject to certain Federal arbitrage laws in accordance with long-term borrowing
agreements. Failure to comply with the rules could result in the payment of penalties. The amount of
penalties, if any, cannot be determined at this time, although the Airport expects such amounts, if any,
to be immaterial.
NOTE L – ECONOMIC DEPENDENCE
The Airport is dependent in part on intergovernmental grants from federal and state agencies as well
as operating transfers from the Town. In fiscal years 2015 and 2014, the Airport recorded and
$5,468,664 and $1,808,226 in intergovernmental revenues, respectively. Without these funds, the
Airport would not generate sufficient funds from its operations to sustain its operations.
NOTE M – SUBSEQUENT EVENTS
The Airport has evaluated subsequent events through [Date Pending Approval] which is the date the
financial statements were available to be issued.
NOTE N – IMPLEMENTATION OF GASB PRONOUNCEMENTS
Current Year Implementations
In June 2012, the GASB issued GASB Statement No. 68, Accounting and Financial Reporting
for Pensions — an amendment of GASB Statement No. 27. Statement 68 replaced the
requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental
Employers and Statement No. 50, Pension Disclosures, as they relate to governments that provide
pensions through pension plans administered as trusts or similar arrangements that meet certain
criteria. Statement 68 required governments providing defined benefit pensions to recognize their
long-term obligation for pension benefits as a liability for the first time, and to more
comprehensively and comparably measure the annual costs of pension benefits. The Statement
also enhanced accountability and transparency through revised and new note disclosures and
required supplementary information. The provisions of GASB 68 became effective for the
Airport in fiscal year 2015 and had a material effect on its financial statements and required a
restatement of the prior period’s reported net position. Refer to Note E.
In January 2013, the GASB issued GASB Statement No. 69, Government Combinations and
Disposals of Government Operations. GASB 69 established accounting and financial reporting
standards to government combinations and disposals of government operations. The provisions
of GASB 69 became effective for the Airport in fiscal 2015 and did not have a material effect on
its financial statements.
Nantucket Memorial Airport Page 23 of 27 Basic Annual Financial Statements
In April 2013, the GASB issued GASB Statement No. 70, Accounting and Financial Reporting
for Nonexchange Financial Guarantees. The objective of GASB 70 was to improve accounting
and financial reporting by governments that extend and receive nonexchange financial
guarantees. The provisions of GASB 70 became effective for the Airport in fiscal year 2015 and
did not have a material effect on its financial statements.
In November 2013, the GASB issued GASB Statement No. 71, Pension Transition for
Contributions Made Subsequent to the Measurement Date—an amendment of GASB Statement
No. 68. The objective of GASB 71 was to address an issue regarding application of the transition
provisions of GASB 68. The issue related to amounts associated with contributions, if any, made
by a state or local government employer or nonemployer contributing entity to a defined pension
plan after the measurement date of the government’s beginning net pension liability. The
provisions of GASB 71 became effective for the Airport in fiscal year 2015 and had a material
effect on its financial statements. Refer to Note E.
Future Implementations
In February 2015, the GASB issued GASB Statement No. 72, Fair Value Measurement and
Application. GASB 72 addresses accounting and financial reporting issues relating to fair value
measurements by providing guidance for determining a fair value measurement for financial
reporting purposes. The provisions of this Statement are effective for financial reporting periods
beginning after June 15, 2015 (fiscal year 2016). The Airport is currently evaluating whether
adoption will have a material impact on the financial statements.
In June 2015, the GASB issued GASB Statement No. 73, Accounting and Financial Reporting
for Pension and Related Assets That Are Not within the Scope of GASB Statement No. 68 and
Amendments to Certain Provision of GASB Statement No. 67 and No. 68. The objective of
GASB 73 is to improve the usefulness of information about pensions included in the general
purpose external financial reports of state and local governments for making decisions and
assessing accountability. This Statement establishes requirements for defined benefit pensions
that are not within the scope of Statement 68, as well as for the assets accumulated for purposes
of providing those pensions. In addition, it establishes requirements for defined contribution
pensions that are not within the scope of Statement 68. The provisions of this Statement are
effective for financial reporting periods beginning after June 15, 2015 (fiscal year 2016) – except
those provisions that address employers and governmental nonemployer contributing entities for
pensions that are not within the scope of GASB Statement No. 68, which are effective for fiscal
years beginning after June 15, 2106 (fiscal year 2017). The Airport is currently evaluating
whether adoption will have a material impact on the financial statements.
In June 2015, the GASB issued GASB Statement No. 74, Financial Reporting for
Postemployment Benefit Plans Other than Pension Plans. GASB 74’s objective is to improve the
usefulness of information about postemployment benefits other than pensions included in the
general purpose external financial reports of state and local governmental OPEB plans for making
decisions and assessing accountability. The provisions of this Statement are effective for financial
reporting periods beginning after June 15, 2016 (fiscal year 2017). The Airport is currently
evaluating whether adoption will have a material impact on the financial statements.
In June 2015, the GASB issued GASB Statement No. 75, Accounting and Financial Reporting
for Postemployment Benefits Other Than Pension Plans. GASB 75 establishes new accounting
and financial reporting requirements for governments whose employees are provided with OPEB,
as well as for certain nonemployer governments that have a legal obligation to provide financial
Nantucket Memorial Airport Page 24 of 27 Basic Annual Financial Statements
support for OPEB provided to the employees of other entities. The provisions of this Statement
are effective for financial reporting periods beginning after June 15, 2017 (fiscal year 2018). The
Airport is currently evaluating whether adoption will have a material impact on the financial
statements.
In June 2015, the GASB issued GASB Statement No. 76, The Hierarchy of Generally Accepted
Accounting Principles for State and Local Governments. The objective of GASB 76 is to identify
– in the context of the current governmental financial reporting environment – the hierarchy of
generally accepted principles, or GAAP. This Statement reduces the GAAP hierarchy to two
categories of authoritative GAAP and addresses the use of authoritative and nonauthoritative
literature in the event that the accounting treatment for a transaction or other event is not specified
within a source of authoritative GAAP. The provisions of this Statement are effective for
financial reporting periods beginning after June 15, 2015 (fiscal year 2016). The Airport is
currently evaluating whether adoption will have a material impact on the financial statements.
* * * * * *
Nantucket Memorial Airport Page 25 of 27 Basic Annual Financial Statements
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION - PENSION
YEAR ENDED JUNE 30, 2015
SCHEDULE OF THE AIRPORT'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
Year Ended December 31,
2014
Airport's proportion of the net pension
liability (asset)0.9160%
Airport's proportionate share of the net
pension liability (asset)5,172$
Airport's covered-employee payroll 2,404$
Airport's proportionate share of the net
pension liability (asset) as a percentage
of its covered-employee payroll 215.1%
Plan fiduciary net position as a percentage
of the total pension liability 60.43%
SCHEDULE OF THE AIRPORT'S CONTRIBUTIONS TO PENSION PLAN
Year Ended December 31,
2014
Actuarially determined contribution 477$
Contributions in relation to the
actuarially determined contribution 477
Contribution deficiency (excess)-$
Airport's covered-employee payroll 2,404$
Contributions as a percentage of
covered-employee payroll 19.84%
The Airport is a member of the Barnstable Country Contributory Retirement System.
Stand-alone, audited financial statements may be obtained by contacting the Barnstable
County Retirement System at 750 Attucks Lane, Hyannis, MA 02601.
This schedule is presented to illustrate the requirement to show information for ten years.
However, until a full ten-year trend is compiled, information is presented for those years
in which information is available.
See accompanying independent auditors' report.
(dollar amounts are in thousands)
(dollar amounts are in thousands)
Nantucket Memorial Airport Page 26 of 27 Basic Annual Financial Statements
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION - OPEB
YEAR ENDED JUNE 30, 2015
SCHEDULES OF FUNDING PROGRESS
(dollar amounts are in thousands)
UAAL as a
Actuarial Actuarial Actuarial Unfunded Percentage
Valuation Value of Accrued AAL Funded Covered of Covered
Date Assets Liability (AAL)(UAAL)Ratio Payroll Payroll
(a)(b)(b-a)(a/b)(c)(b-a/c)
6/30/2014 -$ 4,867$ 4,867$ 0.0%N/A N/A
6/30/2012 - 5,116 5,116 0.0%N/A N/A
6/30/2010 - 5,429 5,429 0.0%N/A N/A
SCHEDULES OF CONTRIBUTION FUNDING
(dollar amounts are in thousands)
Other Postemployment Benefits
Annual
Year Ended OPEB Actual Percentage
June 30,Cost Contributions Contributed
2015 378$ 116$ 30.7%
2014 386 146 37.8%
2013 388 133 34.3%
See accompanying independent auditors' report.
Nantucket Memorial Airport Page 27 of 27 Basic Annual Financial Statements