HomeMy WebLinkAboutNantucket Memorial AirportNANTUCKET MEMORIAL AIRPORT
An Enterprise Fund of the Town of
Nantucket, Massachusetts
Report on Examination of
Basic Financial Statements
Year Ended June 30, 2017
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
TABLE OF CONTENTS
JUNE 30, 2017
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 – 26
REQUIRED SUPPLEMENTARY INFORMATION:
Schedule of the Airport’s Proportionate Share of the Net Pension Liability 27
Schedule of the Airport’s Contribution to Pension Plan 27
Schedules of Funding Progress and Contribution Funding –
Other Postemployment Benefits 28
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, 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.
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, 2017, 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 28 Basic Annual Financial Statements
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 Airport’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 October 20, 2017 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
October 20, 2017
Nantucket Memorial Airport Page 2 of 28 Basic Annual Financial Statements
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, 2017. 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 $51.9 million (total net position).
• The Airport’s total net position at June 30, 2017 decreased nearly $0.7 million, or 1.3%, from
June 30, 2016. The Airport reported a net loss from operations of approximately $1.9 million in
2017. This operating loss was offset by over $1.2 million in capital grant intergovernmental
revenues.
• The Airport’s cash flows from operations totaled nearly $2.3 million in 2017 and its overall
cash and cash equivalents increased nearly $2.0 million to approximately $12.4 million at June
30, 2017.
• The Airport established a stabilization fund in June 2017 to assist it in funding future
employment-related obligations. The Airport made an initial contribution of $200,000 into this
stabilization fund in June 2017.
• The Airport’s general obligation bonds, net of unamortized premiums, decreased to
approximately $10.1 million at June 30, 2017 from $10.8 million at June 30, 2016. The Airport
received $203,000 from long-term general obligation bonds in 2017.
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.)
Nantucket Memorial Airport Page 3 of 28 Basic Annual Financial Statements
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.
FINANCIAL ANALYSIS
The following represents the condensed comparative financial data for the Airport’s net position for the
years ended June 30, 2017 and 2016:
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 approximately $51.9 million at June 30, 2017.
The Airport’s net position is categorized as either unrestricted or net investment in capital assets. The
vast majority of the Airport’s net position is classified as net investment in capital assets. This includes
the historical cost or donated value of land, buildings, infrastructure, vehicles, machinery and equipment
less any related debt used to acquire those assets outstanding at year end. The Airport uses these assets
to serve its customers and consequently these assets are not available for future spending. Although the
Airport’s investment in its capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
June 30,June 30,
2017 2016
Assets
Current assets 13,706,922$ 11,137,737$
Capital assets, net 64,623,050 66,091,460
Total assets 78,329,972 77,229,197
Deferred Outflows of Resources
Pensions 966,516 468,624
Liabilities
Current liabilities 8,050,478 6,446,192
Noncurrent liabilities 19,302,932 18,697,907
Total liabilities 27,353,410 25,144,099
Deferred Inflows of Resources
Pensions 85,926 -
Net Position
Net investment in capital assets 48,366,264 51,032,458
Unrestricted 3,490,888 1,521,264
Net Position 51,857,152$ 52,553,722$
Net Position
Nantucket Memorial Airport Page 4 of 28 Basic Annual Financial Statements
Unrestricted net position totaled nearly $3.5 million at June 30, 2017, which is significantly greater than
the prior year. This increase was due primarily to strong operating performance, excluding the effect of
depreciation expense. Unrestricted net position may be used by the Airport to meet its future
obligations, subject to statutory restrictions.
The following represents the condensed comparative financial data for the Airport’s changes in net
position for the years ended June 30, 2017 and 2016:
The Airport’s revenues increased approximately $438,000 year-over-year, due primarily to increased
volume of Airport transactions. Normal operating expenses, excluding depreciation expense, were
relatively consistent year-over-year. Depreciation expense (a non-cash item) increased significantly in
2017 as a significant amount of construction in-process was placed in service in 2017.
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 $844,536. The primary contributors to the
difference between the Airport’s statutory operating loss and its increase in net position (i.e., net
income) on a GAAP basis include:
2017 2016
Operating revenues 13,105,004$ 12,667,077$
Expenses:
Operating expenses 11,147,113 11,164,653
Employee benefits 271,591 287,658
Depreciation expense 3,294,782 2,491,379
Total expenses 14,713,486 13,943,690
Nonoperating revenues, net 911,912 2,252,424
Change in net position (696,570) 975,811
Net position - beginning of year 52,553,722 51,577,911
Net position - end of year 51,857,152$ 52,553,722$
Year Ended June 30,
Changes in Net Position
Nantucket Memorial Airport Page 5 of 28 Basic Annual Financial Statements
CAPITAL ASSET AND DEBT ADMINISTRATION
The Airport’s capital assets, net of accumulated depreciation totaled over $64.6 million at June 30,
2017. This was approximately $1.5 million lower than the June 30, 2016 balance as fiscal year 2017
depreciation expense exceeded capital additions. 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 approximately $10.1 million
at June 30, 2017, which was approximately $0.7 million lower than the balance at June 30, 2016. Notes
G and H to the financial statements present detailed analyses of long-term and short-term debt.
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the Airport’s finances for all those
with an interest in its finances. Questions concerning any of the information provided in this report or
requests for additional financial information should be addressed to the Nantucket Memorial Airport, 14
Airport Road, Nantucket, Massachusetts 02554 or to the Town of Nantucket’s Finance Department, 16
Broad Street, Nantucket, Massachusetts, 02554.
Net income on a statutory basis 844,536$
Adjustments to convert statutory records to GAAP:
Repayment of bonds 839,000
Depreciation expense (3,294,782)
Capital additions 1,826,372
Revenue recognition (39,497)
Other postemployment benefits (289,613)
Pension accounting (516,187)
Other items (66,399)
Total adjustments to statutory net income (1,541,106)
Decrease in net position on a GAAP basis (696,570)$
Nantucket Memorial Airport Page 6 of 28 Basic Annual Financial Statements
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
STATEMENT OF NET POSITION
JUNE 30, 2017
Assets:
Current assets:
Cash and cash equivalents 12,375,993$
Investments 200,122
Trade receivables 374,669
Intergovernmental receivables 395,172
Inventory 360,966
Total current assets 13,706,922
Noncurrent assets:
Nondepreciable capital assets 5,936,512
Capital assets, net of accumulated depreciation 58,686,538
Total noncurrent assets 64,623,050
Total Assets 78,329,972
Deferred outflows of resources
Pensions 966,516
Liabilities:
Current liabilities:
Warrants payable 132,067
Accrued payroll 142,172
Accrued interest 86,432
Security deposits 418,794
Notes payable 6,108,213
Bonds payable 841,320
Compensated absences 321,480
Total current liabilities 8,050,478
Noncurrent liabilities:
Bonds payable 9,307,253
Compensated absences 321,480
Other postemployment benefits 2,968,066
Net pension liability 6,706,133
Total noncurrent liabilities 19,302,932
Total Liabilities 27,353,410
Deferred inflows of resources
Pensions 85,926
Net Position:
Net investment in capital assets 48,366,264
Unrestricted net assets 3,490,888
Total Net Position 51,857,152$
See accompanying notes to basic financial statements.
Nantucket Memorial Airport Page 7 of 28 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, 2017
Operating Revenues:
Charges for services and related revenues 13,105,004$
Operating Expenses:
Operating expenses 11,147,113
Maintenance 271,591
Depreciation expense 3,294,782
Total Operating Expenses 14,713,486
Operating Loss (1,608,482)
Nonoperating Revenues:
Intergovernmental grants 70,458
Interest income 50,138
Interest expense (418,564)
Total Nonoperating Revenues (297,968)
Loss Before Capital Contributions and Transfers (1,906,450)
Capital Contributions:
Capital grants 1,209,880
Change in Net Position (696,570)
Net Position - Beginning of year 52,553,722
Net Position - End of year 51,857,152$
See accompanying notes to basic financial statements.
Nantucket Memorial Airport Page 8 of 28 Basic Annual Financial Statements
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 2017
Cash Flows from Operating Activities:
Receipts from customers and users 13,033,756$
Payments to vendors (6,299,211)
Payments for salaries, wages and related employee benefits (4,456,134)
Net cash provided by operating activities 2,278,411
Cash Flows from Noncapital Financing Activities:
Intergovernmental grants for operations 70,458
Net cash provided by capital and related financing activities 70,458
Cash Flows from Capital and Related Financing Activities:
Proceeds from the issuance of bonds and notes payable 203,000
Principal payments on bonds and notes payable (839,000)
Intergovernmental grants for construction 814,708
Acquisition and construction of capital assets (1,826,372)
Proceeds from bond anticipation notes 3,802,100
Repayment of bond anticipation notes (1,942,867)
Interest payments on bonds and notes payable (458,378)
Net cash used in capital and related financing activities (246,809)
Cash Flows from Investing Activities:
Purchase of investments (200,122)
Investment income 50,138
Net cash provided by (used for) investing activities (149,984)
Net Increase in Cash and Cash Equivalents 1,952,076
Cash and Cash Equivalents:
Beginning of year 10,423,917
End of year 12,375,993$
Reconciliation of Operating Income to Net Cash Provided By
Operating Activities:
Operating loss (1,608,482)$
Depreciation and amortization 3,294,782
Changes in assets and liabilities:
Accounts receivable (71,415)
Inventory 49,600
Warrants payable and accrued expenses (243,200)
Accrued long-term employee benefits 856,959
Security deposits 167
Net cash provided by operating activities 2,278,411$
See accompanying notes to basic financial statements.
Nantucket Memorial Airport Page 9 of 28 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, 2017
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.
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 28 Basic Annual Financial Statements
Fair Value of Investments – The Airport reports its investments at fair value. When actively quoted
observable prices are not available, the Airport generally uses either implied pricing from similar
investments or valuation models based on net present values of estimated future cash flows (adjusted
as appropriate for liquidity, credit, market and/or other risk factors).
The Airport categorizes its fair value measurements within the fair value hierarchy established by
GAAP. This hierarchy is based on valuation inputs used to measure the fair value of the asset or
liability. The three levels of the hierarchy are as follows:
• Level 1 – Inputs are quoted prices in active markets for identical investments at the
measurement date.
• Level 2 – Inputs (other than quoted prices included in Level 1) are either directly or indirectly
observable for the investment through correlation with market data at the measurement date
and for the duration of the instrument’s anticipated life.
• Level 3 – Inputs reflect the Town’s best estimate of what market participants would use in
pricing the investment at the measurement date.
The following table presents the Airport’s investments carried at fair value on a recurring basis in the
statement of net position at June 30, 2017:
The Airport’s investment in negotiable certificates of deposit were classified as Level 1. Short-term
investments in the Massachusetts Municipal Depository Trust, or MMDT, are measured at amortized
cost.
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. The Airport did not report an allowance for uncollectible accounts at June 30, 2017.
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, 2017.
6/30/17 Level 1 Level 2 Level 3
Investments by fair value level
Debt securities:
Certificates of deposit 200,122$ 200,122$ -$ -$
Investments measured at amortized cost
MMDT 663,089
Total investments 863,211$
Fair Value Measurements Using
Nantucket Memorial Airport Page 11 of 28 Basic Annual Financial Statements
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.
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 reports deferred outflows and inflows of resources relative to pensions at June 30, 2017,
as more fully described in Note I.
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, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
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
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 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.
Nantucket Memorial Airport Page 12 of 28 Basic Annual Financial Statements
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 or negotiable FDIC-insured certificates of deposit.
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.
NOTE D – ACCOUNTS RECEIVABLE
Accounts receivable at June 30, 2017 consisted of the following:
Gross
Amount
Allowance for
Uncollectible
Accounts
Net
Amount
Airport fees 231,707$ -$ 231,707$
Passenger facility charges 142,962 - 142,962
Intergovernmental 395,172 - 395,172
769,841$ -$ 769,841$
Nantucket Memorial Airport Page 13 of 28 Basic Annual Financial Statements
NOTE E – CAPITAL ASSETS
Capital asset activity for the Airport for the fiscal year ended June 30, 2017 was as follows:
NOTE F – INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
There were no interfund balances at June 30, 2017. In addition, there were no interfund transfers
made during the year ended June 30, 2017.
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.
Beginning Ending
Balance Increases Decreases Balance
Capital assets not being depreciated:
Land 2,736,587$ -$ -$ 2,736,587$
Construction in process 6,469,048 1,115,178 (4,384,301) 3,199,925
Total capital assets not being depreciated 9,205,635 1,115,178 (4,384,301) 5,936,512
Capital assets being depreciated:
Infrastructure 35,607,057 28,174 - 35,635,231
Buildings and improvements 50,508,882 4,703,601 (2,941,264) 52,271,219
Vehicles 4,037,222 58,090 (223,584) 3,871,728
Machinery and equipment 2,758,464 305,630 - 3,064,094
Total capital assets being depreciated 92,911,625 5,095,495 (3,164,848) 94,842,272
Less accumulated depreciation (36,025,800) (3,294,782) 3,164,848 (36,155,734)
Total capital assets being depreciated, net 56,885,825 1,800,713 - 58,686,538
Capital assets, net 66,091,460$ 2,915,891$ (4,384,301)$ 64,623,050$
Nantucket Memorial Airport Page 14 of 28 Basic Annual Financial Statements
Details related to temporary debt activity for the fiscal year ended June 30, 2017 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 for a variety of construction projects to the Airport’s runways, aprons,
terminal and security systems.
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, 2017:
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.”
Balance Balance
Interest Maturity July 1, June 30,
Type Rate Date 2016 Additions Retirements Rollovers 2017
BAN 1.75% matured 1,106,912$ -$ (1,106,912)$ -$ -$
BAN 1.50% matured 3,142,068 - (835,955) (2,306,113) -
BAN 1.50% 11/30/17 - 1,960,764 - 614,326 2,575,090
BAN 2.00% 11/30/17 - 1,841,336 - 1,691,787 3,533,123
4,248,980$ 3,802,100$ (1,942,867)$ -$ 6,108,213$
Beginning Ending Due within
Description of Issue Balance Additions Deletions Balance one year
General obligation bonds payable 10,624,000$ 203,000$ (839,000)$ 9,988,000$ 818,000$
Unamortized premiums 186,022 - (25,449) 160,573 23,320
Net 10,810,022 203,000 (864,449) 10,148,573 841,320
Compensated absences 591,801 347,059 (295,900) 642,960 321,480
Other postemployment benefits 2,678,453 516,601 (226,988) 2,968,066 -
Net pension liability 5,777,980 2,052,289 (1,124,136) 6,706,133 -
Total 19,858,256$ 3,118,949$ (2,511,473)$ 20,465,732$ 1,162,800$
Nantucket Memorial Airport Page 15 of 28 Basic Annual Financial Statements
General obligation bonds outstanding at June 30, 2017 were as follows:
Future Debt Payoff – Payments on general long-term debt obligation bonds due in future years are as
follows:
At June 30, 2017, the Airport had approximately $12.1 million in authorized and unissued debt.
Outstanding Outstanding
Interest at June 30, Maturities and at June 30,
Description Rate 2016 Additions Retirements 2017
General obligation bonds - February 2008 3.00 - 5.00% 75,000$ -$ (75,000)$ -$
General obligation bonds - February 2011 2.00 - 5.00% 4,260,000 - (160,000) 4,100,000
General obligation bonds - June 2012 2.00 - 5.00% 2,170,000 - (145,000) 2,025,000
General obligation bonds - June 2013 2.00 - 3.00% 890,000 - (135,000) 755,000
General obligation bonds - June 2014 2.00 - 3.35% 3,085,000 - (285,000) 2,800,000
General obligation bonds - October 2015 2.00 - 3.00% 144,000 - (39,000) 105,000
General obligation bonds - November 2016 2.00 - 5.00%- 203,000 - 203,000
10,624,000 203,000 (839,000) 9,988,000
Unamortized premiums on June 2012 bonds 186,022 - (25,449) 160,573
10,810,022$ 203,000$ (864,449)$ 10,148,573$
Year Ending
June 30,Principal Interest Total
2018 818,000$ 367,169$ 1,185,169$
2019 800,000 341,087 1,141,087
2020 680,000 316,338 996,338
2021 605,000 294,362 899,362
2022 610,000 270,938 880,938
2023 - 2027 2,620,000 1,035,850 3,655,850
2028 - 2032 2,485,000 584,638 3,069,638
2033 - 2036 1,370,000 146,413 1,516,413
Total 9,988,000$ 3,356,795$ 13,344,795$
Nantucket Memorial Airport Page 16 of 28 Basic Annual Financial Statements
NOTE I – RETIREMENT SYSTEM
Pension Plan Description – The Airport contributes to the Barnstable County Regional Retirement
System (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, 2016 were issued
and are available at the Retirement Board’s offices located at 750 Attucks Lane, Hyannis,
Massachusetts 02601.
Membership in the Retirement System for all employers as of January 1, 2016 (the date of the latest
actuarial valuation report) was as follows:
Retirees and beneficiaries currently receiving benefits 2,937
Inactive members 622
Active members 4,699
8,258
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 for each municipal retirement
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 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.
Nantucket Memorial Airport Page 17 of 28 Basic Annual Financial Statements
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 $569,586 to the Retirement System in fiscal year 2017, which equaled the
actuarially-determined contribution requirement for the fiscal year. The Airport’s contributions as a
percentage of covered payroll was approximately 22% in fiscal year 2017.
Net Pension Liability – At June 30, 2017, the Airport reported a liability of $6,706,133 for its
proportionate share of the net pension liability. The net pension liability was measured as of January
1, 2016 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, 2016. 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 0.955% at December 31, 2016 versus
0.918% at December 31, 2015.
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, 2016, 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 the Commonwealth’s Public Employee Retirement
Administration Commission, or 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 $1,085,773 in pension expense in the statement of
activities in fiscal year 2017.
Nantucket Memorial Airport Page 18 of 28 Basic Annual Financial Statements
Deferred Outflows of Resources and Deferred Inflows of Resources – At June 30, 2017, the Airport
reported deferred outflows of resources and deferred inflows of resources related to pensions from the
following sources:
The net deferred outflows of resources are expected to be recognized in the Airport’s pension expense
as follows:
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,
2016. The significant actuarial assumptions used in the January 1, 2016 actuarial valuation included:
Actuarial cost method: Entry age normal
Amortization method: Appropriations increase at 5.28% per year
Remaining amortization period: 20 years from July 1, 2016 for 2002 and 2003 Early
Retirement Incentives, retiree sherrifs liability and
remaining unfunded liability; and 6 years from July 1,
2016 for 2010 Early Retirement Inventive
Investment rate of return: 7.625%, net of pension plan investment expenses,
including inflation
Cost of living adjustments: 3% on the first $16,000 of benefits as of July 1, 2015,
$17,000 as of July 1, 2016 and $18,000 as of July 1,
2017
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and actual experience -$ 85,926$
Changes of assumptions 397,812 -
Net difference between projected and actual earnings
on pension plan investments 381,197 -
Changes in proportion and differences between Airport
contributions and proportionate share of contributions 187,507 -
Airport contributions subsequent to the
measurement date - -
Total 966,516$ 85,926$
Year ended June 30,
2018 226,111$
2019 226,111
2020 223,804
2021 106,302
2022 98,262
880,590$
Nantucket Memorial Airport Page 19 of 28 Basic Annual Financial Statements
Asset valuation method: A preliminary actuarial value is first determined by
taking the actuarial value of assets at the beginning of
the year and adding assumed investment earnings (at
the assumed actuarial rate of return) and the net new
money during the year (contributions less benefit
payments and administrative expenses). Twenty
percent of the difference between the market value of
assets as reported in the Retirement System’s Annual
Statement and the preliminary actuarial value of assets
is added to the preliminary actuarial value. In order
for the actuarial value to not differ too significantly
from the market value of assets, the final actuarial
value of assets must be within 20% of the market
value of assets.
Projected salary increases: Varied by length of service with ultimate ranges of
4.25%, 4.50% and 4.75% for groups 1, 2 and 4,
respectively
Rates of retirement: Varies based upon age for general, police and fire
employees
Rates of disability: For general employees, it was assumed that 45% of all
disabilities are ordinary (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
Mortality Table projected generationally with Scale
BB2D for 2009
Healthy retiree rates reflect the RP-2000 Healthy
Annuitant Mortality Table projected generationally
with Scale BB2D from 2009
Disabled retiree rates reflect the RP-2000 Healthy
Annuitant Table projected generationally with Scale
BB2D from 2015
The Retirement System’s investment policy in regard to the allocation of its invested assets is
established by the Commonwealth’s Pension Reserves Investment Management Board. Retirement
System assets are managed on a total return basis with a long-term objective of achieving a fully-
funded status for the benefits provided through the pension plan.
The long-term expected rate of return on pension plan investments was determined using a building-
block method in which best-estimate ranges of expected future real rates of return (expected returns,
net of pension plan investment expense and inflation) are developed for each major asset class. 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.
Best estimates of arithmetic real rates of return for each major asset class included in the pension
plan's target asset allocation as of January 1, 2016 are summarized in the following table:
Nantucket Memorial Airport Page 20 of 28 Basic Annual Financial Statements
Discount Rate – The discount rate used to measure the total pension liability in the January 1, 2016
actuarial valuation report was 7.625%, which represents a decrease from 7.75% in the previous
actuarial valuation. The projection of cash flows used to determine the discount rate assumed plan
member contributions will be made at the current contribution rate and that contributions will be
made at rates equal to the actuarially determined contribution 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 7.625% as well as the Airport’s proportionate share of
the net pension liability using a discount rate that is one percentage point lower (6.625%) or one
percentage point higher (8.625%) than the current rate:
Long-Term
Target Expected Real
Asset Class Allocation Rate of Return
Domestic equities 18.00% 6.44%
International equities:
Developed markets 16.00% 7.40%
Emerging markets 6.00% 9.42%
Core fixed income 13.00% 2.02%
High-yield fixed income 10.00% 4.43%
Real estate 10.00% 5.00%
Commodities 4.00% 4.43%
Hedge fund, GTAA, Risk parity 13.00% 3.75%
Private equity 10.00% 10.47%
Current
1% Decrease Discount Rate 1% Increase
(6.625%)(7.625%)(8.625%)
Airport's proportionate share of the
net pension liability 8,533,626$ 6,706,133$ 5,164,732$
Nantucket Memorial Airport Page 21 of 28 Basic Annual Financial Statements
NOTE J – OTHER POSTEMPLOYMENT BENEFITS
In addition to the pension benefits described in Note I, 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, 2016
(the date of the latest actuarial valuation) had 542 active employees and 372 retirees, beneficiaries
and dependents for a total of 914.
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.
Funding Status and Funding Progress – The funded status of the Plan at June 30, 2017 for the Town,
for which the Airport is an enterprise fund and is included, for the most recent actuarial valuation
performed as of June 30, 2016, was as follows:
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:
Actuarial value of assets (a)1,341,213$
Actuarial accrued liability (AAL) (b)105,351,555
Unfunded AAL (b-a)104,010,342
Funded ration (a/b)1.3%
Covered payroll (c)N/A
UAAL as a percentage of covered payroll (b-a)/c N/A
Annual required contribution (ARC)426,167$
Interest on net OPEB obligation 107,138
Adjustment to ARC (16,704)
Annual OPEB cost 516,601
Contributions made (226,988)
Increase in net OPEB obligation 289,613
Net OPEB obligation at beginning of year 2,678,453
Net OPEB obligation at end of year 2,968,066$
Nantucket Memorial Airport Page 22 of 28 Basic Annual Financial Statements
Trend information regarding annual OPEB cost, the percentage of the annual OPEB cost contributed
and the net OPEB obligation is as follows:
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, or 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:
Actuarial cost method: Individual entry age normal
Amortization method: Amortized increasing at 4.0% per year over 30 years
at transition
Remaining amortization period: 21 years at June 30, 2016
Investment rate of return: 4.00% per annum
Actuarial valuation of assets: Market value
Healthcare trend rates: Increasing 5% per year
General inflation assumption: 2.75% per annum
Annual compensation increases: 3.00% per annum
Mortality rates: Pre-, post- and disabled retirement rates reflect the
RP-2000 Employee Mortality Table projected
generationally with Scale BB and a base year 2009
Participation in Town OPEB Plan – The Airport participates in the Plan, which is administered by
the Town. The Town established an OPEB trust fund to account for funds reserve to fund this future
obligation. Full financial statements of the OPEB trust fund, including RSI, can be found in the
Town’s financial statements for the year ended June 30, 2017.
Annual Percentage of
Fiscal Year OPEB Cost AOPEBC Net OPEB
Ended (AOPEBC)Contributed Obligation
June 30, 2017 516,601$ 44%2,968,066$
June 30, 2016 483,272 33%2,678,453
June 30, 2015 377,913 31%2,356,377
Nantucket Memorial Airport Page 23 of 28 Basic Annual Financial Statements
NOTE K – COMMITMENTS AND CONTINGENCIES
At June 30, 2017, the Airport had open contracts totaling approximately $3.9 million primarily for
equipment, buildings and infrastructure projects.
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, 2017, 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,
2017.
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 2017 and 2016, the Airport recorded $1,280,338
and $2,599,824 in intergovernmental revenues, respectively. Without these funds, the Airport would
not generate sufficient funds from its operations to sustain its operations.
NOTE M – SUBSEQUENT EVENTS
The Airport has evaluated subsequent events through October 20, 2017 which is the date the financial
statements were available to be issued.
NOTE N – IMPLEMENTATION OF GASB PRONOUNCEMENTS
Current Year Implementations
In June 2015, the GASB issued GASB Statement No. 74, Financial Reporting for
Postemployment Benefit Plans Other than Pension Plans. GASB 74’s objective was to improve
the usefulness of information about postemployment benefits other than pensions included in the
general purpose external financial reports of state and local governmental OPEB plans for making
decisions and assessing accountability. The provisions of this Statement became effective for the
Airport in fiscal year 2017. The Airport does not maintain a separate OPEB trust fund nor does it
administer an OPEB plan; rather these services are performed and accounted for by the Town.
Nantucket Memorial Airport Page 24 of 28 Basic Annual Financial Statements
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION - PENSION
YEAR ENDED JUNE 30, 2017
2016 2015 2014
Airport's proportion of the net pension
liability (asset)0.9545%0.9180%0.9160%
Airport's proportionate share of the net
pension liability (asset)6,706$ 5,778$ 5,172$
Airport's covered-employee payroll 2,644$ 2,424$ 2,404$
Airport's proportionate share of the net
pension liability (asset) as a percentage
of its covered-employee payroll 253.6%238.4%215.1%
Plan fiduciary net position as a percentage
of the total pension liability 60.43%58.10%60.43%
2017 2015
Actuarially determined contribution 570$ 543$ 477$
Contributions in relation to the
actuarially determined contribution 570 543 477
Contribution deficiency (excess)-$ -$ -$
Airport's covered-employee payroll 2,644$ 2,424$ 2,404$
Contributions as a percentage of
covered-employee payroll 21.56%22.40%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.
SCHEDULE OF THE AIRPORT'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
(dollar amounts are in thousands)
SCHEDULE OF THE AIRPORT'S CONTRIBUTIONS TO PENSION PLAN
(dollar amounts are in thousands)
Year Ended June 30,
2016
Year Ended December 31,
Nantucket Memorial Airport Page 25 of 28 Basic Annual Financial Statements
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION - OPEB
YEAR ENDED JUNE 30, 2017
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)
6/30/2016 82$ 6,334$ 6,334$ 1.3%N/A N/A
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
SCHEDULES OF CONTRIBUTION FUNDING
(dollar amounts are in thousands)
Other Postemployment Benefits
Annual
Year Ended OPEB Actual Percentage
June 30,Cost Contributions Contributed
2017 517$ 227$ 43.9%
2016 483 161 33.3%
2015 378 116 30.7%
See accompanying independent auditors' report.
Nantucket Memorial Airport Page 26 of 28 Basic Annual Financial Statements
In December 2015, the GASB issued GASB Statement No. 78, Pensions Provided through
Certain Multiple-Employer Defined Benefit Pension Plans. The provisions of GASB 78 were
applicable to certain government pension plans that (i) are not administered as a trust by a state or
local governmental pension plan, (ii) are shared between governmental and nongovernmental
employees, and (iii) have not predominant state of local governmental employer. The provisions
of this Statement became effective for the Airport in fiscal year 2017. The adoption of GASB
No. 78 did not have a material effect on the Airport.
In January 2016, the GASB issued GASB Statement No. 80, Blending Requirements for Certain
Component Units. The provisions of GASB 80 apply to component units that are organized as
not-for-profit corporations in which the primary government is the sole corporate member. Such
component units should be included in the reporting entity financial statements using the blending
method. The provisions of this Statement became effective for the Airport in fiscal year 2017.
The adoption of GASB No. 80 did not have a material effect on the Airport.
In March 2016, the GASB issued GASB Statement No. 82, Pension Issues – an amendment of
GASB Statements No. 67, No. 68, and No. 73. The objective of GASB 73 was to address issues
raised with respect to previously issued statements related to pensions. The provisions of this
Statement became effective for the Airport in fiscal year 2017. The adoption of GASB No. 82
did not have a material effect on the Airport.
Future Implementations
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
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 expects adoption will have a material impact on the financial statements.
In March 2016, the GASB issued GASB Statement No. 81, Irrevocable Split-Interest
Agreements. The objective of the 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. The provisions of this
Statement are effective for financial reporting periods beginning after December 15, 2016 (fiscal
year 2018) and should be applied retroactively. The Airport is currently evaluating whether
adoption will have a material impact on the financial statements.
In November 2016, the GASB issued GASB Statement No. 83, Certain Asset Retirement
Obligations. The objective of the Statement is to address accounting and financial reporting for
certain asset retirement obligations that have legally enforceable liability associated with the
retirement of a tangible capital asset. The provisions of this Statement are effective for financial
reporting periods beginning after June 15, 2018 (fiscal year 2019). The Airport is currently
evaluating whether adoption will have a material impact on the financial statements.
In January 2017, the GASB issued GASB Statement No. 84, Fiduciary Activities. The objective
of the Statement is to improve guidance regarding the identification of fiduciary activities for
accounting and financial reporting purposes and how these activities should be reported. The
provisions of this Statement are effective for financial reporting periods beginning after
December 15, 2018 (fiscal year 2020). The Airport is currently evaluating whether adoption will
Nantucket Memorial Airport Page 27 of 28 Basic Annual Financial Statements
have a material impact on the financial statements.
In May 2017, the GASB issued GASB Statement No. 86, Certain Debt Extinguishment Issues.
The objective of the Statement is to improve consistency in accounting and financial reporting for
in-substance defeasance of debt. 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 2017, the GASB issued GASB Statement No. 87, Leases. This Statement redefines the
manner in which long-term leases are accounted and reported. The provisions of this Statement
are effective for financial reporting periods beginning after December 15, 2019 (fiscal year 2021).
The Airport is currently evaluating whether adoption will have a material impact on the financial
statements.
** * * * *
Nantucket Memorial Airport Page 28 of 28 Basic Annual Financial Statements