/oo^
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated
Government
Annual Financial Report
As of and for the
Year Ended December 31, 2008
Under provisions of stale law. this report is a public
document Acopy of the report has been submitted to
the entity and other appropriate public officials The
report is available for public inspection at the Baton
Rouge office of the Legislative Auditor and. where
^^i^xopmX^, at the office of the parish clerk of court.
Release Date
l/i^
Under the provisions of state law, this report \s a public document. A copy of this report has
been submitted to the Governor, Attomey General, and other public officials as required by
state lavy. A copy of this report has been made available for public inspection at the Baton
Rouge office of the Legislative Auditor and at the office of the parish clerk of court.
Houma-Terrebonne A i r p o r t C o m m i s s i o n
Terrebonne Parish Consolidated Government
Annual Financial Report
As of and for the Year Ended December 3 1 . 2008
Table of Contents
Independent Auditor's Report
1-2
Management's Discussfon and Analysis
3-6
Financial Statements
Statement of Net Assets
7
Statement oi Revenues, Expenses, and Change in Net Assets
8
Statement of Cash Flows
9
10-19
Notes to Financial Statements
Required Supplemental Information
20
Budgetary Comparison Schedule
Special Reports of Certified Public Accountants
Report on Intemal Control over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Perfonned In
2T-22-
Accordance with Government Auditing Standards
23
Schedule of Findings and Questioned Costs
24
Schedule of Prior Findings and Resolutions Matters
•II-
Martin
and
Pellegrin
Ctnlfltd PubUe Aecauinanjj
(A Pnrf<Jtianat Corporatitm)
]03 RnmeyRoad
Houma. Louisiana 70360
Ph. (985) 851-3638
Fax (985) 851-395!
INDEPENDENT AUDITOR'S REPORT
To the Board of Commissioners
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Houma, Louisiana
We have audited the accompanying basic financial statements of the Houma-Terrebonne
Airport Commission, a component unit of the Terrebonne Parish Consolidated
Government, as of and for the year ended December 31, 2008, as listed in the table of
contents. These basic financial statements are the responsibility of the Houma-Terrebonne
Airport Commission's management. Our responsibility is to express an opinion on these
basic 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 financialaudits 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 basic financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the basic financial statements. An audit also includes assessing the
-aeeoufrting-prifieiples-used-and-si§nifieant€stimates-made-by-managemeFvtr-as-well-asevaluating the overall basic financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the basic financial statements referred to above present fairly, in all material
respects, the financial position of the Houma-Terrebonne Airport Commission as of
December 31, 2008, and the results of its operations and cash flows for the year then
ended in conformity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing Standards, we have also issued a report dated
May 6,2009 on our consideration of the Houma-Terrebonne Airport Commission's internal
control over financial reporting and our tests of its compliance with certain provisions of
laws, regulations, contracts, grant agreements, and other matters. The purpose of that
report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing and not to provide an opinion on 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 and should be considered
in assessing the results of our audit.
To the Board of Commissioners
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Houma, Louisiana
Page 2
The Management's Discussion and Analysis on pages 3 through 6 and the budgetary
comparison information on page 20 are not a required part of the basic financial
statements but is supplementary infonnation required by the Governmental Accounting
Standards Board. We have applied certain limited procedures, which consisted principally
of inquiries of management regarding the methods of measurement and presentation of
the supplementary information. However, we did not audit the information and express no
opinion on it.
JKJ^- -^ ^ May 6, 2009
MANAGEMENT'S DISCUSSION AND ANALYSIS
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Management's Discussion and Analysis
December 31, 2008
As management of the Houma-Terrebonne Airport Commission (HTAC), we offer readers
of HTAC's financial statements this narrative overview and analysis of the financial
activities of HTAC for the year ended December 31, 2008,
FINANCIAL HIGHLIGHTS
•
Houma-Terrebonne Airport Commission's assets exceeded its liabilities by
$26,459,407 (net assets) as of December 31, 2008.
•
The Commission's total net assets increased by $29,911.
•
The Houma-Terrebonne Airport Commission received state and parish
capital contributions totaling $24,978 for capital projects.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis serves as an introduction to HTAC's basic financial
statements. The Houma-Terrebonne Airport Commission's basic financial statements
consist of four components: 1) Statement of Net Assets 2) Statement of Revenues,
Expenses, and Change in Fund Net Assets, 3) Statement of Cash Flows, and 4) Notes to
the Financial Statements.
Statement of Net Assets. This statement presents the Houma-Terrebonne Airport
Commission's assets and liabilities, with the difference of assets and liabilities reported as
net assets. The fluctuation in net assets can be used as an indication of whether the
financial position of HTAC is improving or deteriorating.
Statement of Revenues, Expenses, and Change in Fund Net Assets. Consistent with
the full accrual basis method of accounting, this statement accounts for current year
revenues and expenses regardless of when cash is received or paid. The statement also
exhibits the relationship of revenues and expenses with the changes in net assets.
Statement of Cash Flows. The statement of cash flows illustrates the cash inflows and
outflows of the Houma-Terrebonne Airport Commission.
Notes to the Financial Statements. The accompanying notes provide additional
information essential to a full understanding of the data provided in the basic financial
statements.
-3-
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Management's Discussion and Analysis
December 31, 2008
BASIC FINANCIAL ANALYSIS
As noted eariier, net assets may serve over time as a useful indicator of an entity's
financial position. In the case of HTAC, assets exceeded liabilities by $26,459,407 at the
close of the most recent year, December 31, 2008. The largest portion of HTAC's total
assets is cash and investments (20%) and net capital assets (79%).
HTAC's Net Assets
ASSETS
Current assets:
Cash and investments
Other
December 31,
2008
December 31,
2007
$
$
6.166.302
43,092
6.702,908
54.274
Capital assets, net of
23,881,954
24,227,354
30,091,348
30,984.536
114,630
104,601
6,944
13,439
136,000
3,374,367
130,000
4,307,000
3,631,941
4,555,040
20,371,587
6,087.820
19,790.354
6,639.142
accumulated depreciation
Total assets
LIABILITIES
Current liabilities
Compensated absences payable
Due within one year
-Bonds-payable
________
.^
Due in more than
one year
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Unrestricted
$
26.459,407
S
26,429,496
•
Total assets decreased by $893,188, and total liabilities decreased by $923,099.
•
The decrease in assets is attributable to a decrease in capital assets of $345,400
and a decrease In cash and investments of $536,606.
-4-
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Management's Discussion and Analysis
December 31, 2008
During the year, HTAC's net assets increased by $29,911. The elements of the increase
are as follows:
HTAC's Changes in Net Assets
Year Ended
December 31,
2008
OPERATING REVENUES
Rents and leases
Commissions on fuel
Total operating revenues
$
OPERATING EXPENSES
Personal services
Contractual services
Repairs and maintenance
Supplies and materials
Other expenses
Depreciation expense
Total operating expense
OPERATING LOSS
NONOPERATING INCOME (EXPENSE)
Interest income
— Interestexpense
Unrealized appreciation/(depreciation)
on investment valuation
Loss on sale of investments
Gain on disposal of fixed assets
Total nonoperating income
INCOME (LOSS) BEFORE OTHER REVENUES
1,347.101
90,319
1,437,420
six Months Ended
December 31,
2007
$
432,341
306.218
135,459
67.219
28.952
775.668
1.745.857
215,596
115.924
29.592
45,585
21,237
328,517
756.451
(308,437)
(89,915)
354.413
(-2S27542-)
129,027
(-108,240)--
230,352
(38.853)
(58,075)
313.370
37,266
8
4.933
(89.907)
373,921
24.978
CAPITAL CONTRIBUTIONS
$
INCREASE IN NET ASSETS
614,334
52,202
666.536
29.911
$
284.014
As indicated above, net assets increased by $29,911. This Increase is prinnarily due to
capital contributions from other governments of $24,978. The capital contributions consist
of state funds for the taxiway reconstruction project and reimbursement from the
Terrebonne Parish Consolidated Government for the Clendenning Road Project.
•5-
Houma-Terrebonne Airport C o m m i s s i o n
Terrebonne Parish Consolidated Government
Management's Discussion and Analysis
D e c e m b e r s ! 2008
HTAC's Cash Flows
Year Ended
December 31,
2008
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from tenants
Cash received from other sources
Cash paid to employees and suppliers
$
Net cash flows provided by
operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments
Proceeds from sales of investments
Principal returns on investments
Investment income
Net cash flovire provided by (used by)
investing activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Purchases of capital assets
Proceeds from sale of capital assets
Capital contributions from other governments
Principal payments on bond payable
Interest payments on bond payable
1,363,033
90,304
(981,171)
Six Months Ended
December 31,
2007
$
472,166
47.208
(674,857)
1.108,867
205,682
354,413
(3.767.541)
104.453
165,423
129,027
994,105
(3,368,638)
(631,142)
106,500
420,304
(53,000)
(108,210)
(430,268)
34.760
(926.633)
(232,542)
Net cash flows used in capital
^and7^ated~ftnancrngactivities~^
(265; 54a)-
(t;554;68-3h--
NET DECREASE IN CASH AND
CASH EQUIVALENTS
$
634,020
53,843
(640,655)
(88,412)
$
(3.586,978)
•
Total cash and cash equivalents decreased by $88,412.
•
The decrease was caused primarily by the payments on the bond payable of
$1,159,175.
REQUEST FOR INFORMATION
This financial report is designed to provide general overview of HTAC's finances for all
those with such an interest. Call the HTAC office (985-872-4646) and ask for Earl Hicks,
Airport Director, if you should have any further questions concerning any of the infonnation
provided in this report or have a request for additional financial infonnation.
-6-
FINANCIAL STATEMENTS
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Proprietary Fund - Enterprise Fund
Statement of Net Assets
December 31, 2008
ASSETS
Current assets
Cash and cash equivalents
Investments
Accounts receivable
Prepaid insurance
Total current assets
Capital assets, net of accumulated
depreciation of $7,651,042
TOTAL ASSETS
LIABILITIES
Accounts payable
Deferred revenues
Total current liabilities
Compensated absences payable
Bonds payable
Due"withirrone"year
Due in more than one year
TOTAL LIABILITIES
NET ASSETS
Invested in capital assets, net of related debt
Unrestricted
TOTAL NET ASSETS
The accompanying notes are an integral part of this statement.
-7-
$
953,906
5,212,396
5,807
37.285
6,209.394
23.881,954
30.091,348
17,115
97,515
114.630
6.944
--1367OO03.374,367
3,631,941
20,371,587
6.087.820
$ 26,459,407
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Proprietary Fund - Enterprise Fund
Statement of Revenues, Expenses,
and Change in Net Assets
For the Year Ended December 31, 2008
OPERATING REVENUES
Rents and leases
Commissions on fuel
Total operating revenues
1,347,101
90,319
1,437.420
OPERATING EXPENSES
Personal services
Contractual services
Repairs and maintenance
Supplies and materials
Other expenses
Depreciation expense
Total operating expenses
432.341
306,218
135,459
67,219
28,952
775.668
1,745,857
(308,437)
OPERATING LOSS
NONOPERATING REVENUE (EXPENSES)
Interest income
354,413
(232,542)
(38,853)
-230:352313.370
Interestexpense
Loss on sale of investments
"Dnrealized appreciation on investment valuation
Total nonoperating revenue
4,933
INCOME BEFORE CONTRIBUTIONS
CAPITAL CONTRIBUTIONS FROM OTHER GOVERNMENTS
24.978
CHANGE IN NET ASSETS
29,911
26,429,496
NET ASSETS AT BEGINNING OF YEAR
NET ASSETS AT END OF YEAR
The accompanying notes are an integral part of this statement.
-8-
$
26,459.407
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Govemment
Proprietary Fund - Enterprise Fund
Statement of Cash Flows
For the Year Ended December 31, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from tenants
Cash received from other sources
Cash paid to employees and suppliers
$
.
Net cash flows provided by operating activities
472,166
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments
Proceeds from sales of investments
Principal returns on investments
Investment income received
(674,857)
1,108.867
205,682
354,413
Net cash ftows provided by investing activities
994.105
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVrriES
Purchases of capital assets
Proceeds from safe of capital assets
Capital contributions from other governments
Principal payments on bond payable
Interest payments on bond payable
(430,268)
34,760
(926,633)
(232,542)
Net cash used by capital and related financing activities
(1,554,683)
Net decrease in cash and cash equivalents
(88,412)
CASH AND CASH EQUIVALENTS, beginning
CASH AND CASH EQUIVALENTS, ending
RECONCILIATION OF OPERATING LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Operating loss
Adjustments to reconcile operating loss to net cash
provided by operating activities:
Depreciation
(Increase) decrease in:
Accounts receivable
Prepaid Insurance
Increase (decrease) in:
Accounts payable
Deferred revenues
Compensated absences payable
Net cash flows provided by operating activities
The accompanying notes are an integral part of this statement.
-9-
1,363.033
90,304
(981,171)
1,042,318
$
953,906
$
(308,437)
775.668
(4.850)
6,250
(10,738)
20.768
(6.495)
_$
472.166
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Notes to Financial Statements
For the Year Ended December 31, 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Houma-Terrebonne Airport Commission was created by the City of Houma and the
Terrebonne Parish Police Jury in 1957, as authorized by Louisiana Revised Statute 2:602.
On January 9, 1984, after a vote of the citizens of Terrebonne Parish, the City of Houma
and the Ten-ebonne Parish Police Jury were consolidated to form the Terrebonne Parish
Consolidated Government. The Airport Commission is governed by a seven-member
board. The Terrebonne Parish Consolidated Government appoints all members, two of
which are nominated by the Parish President. The Airport Commission is responsible for
maintaining and operating the Houma-Terrebonne Airport, which provides airport facilities
and services that accommodate general aviation.
The Houma-Tenrebonne Airport has an aviation/industrial complex comprising of
approximately 1,800 acres. Ninety percent is oil field related and produces approximately
168 leases. A busy helicopter oil field shuttle dominates the flying operations. The airport
is equipped with a full instrument landing system. Through four fixed based operators, a
full range of aviation services results in approximately 100,000+ aircraft movements each
year. Unlimited potential exists for aviation and industrial development with directflight line
and parking apron access available on 600 leasable acres. Hard-surfaced roads, access
to major highways, water canals, and port facilities, as well as a large non-union labor pool,
are readily available.
In April of 1984, the Financial Accounting Foundation established the Governmental
Accounting Standards Board (GASB) to promulgate U.S. generally accepted accounting
principles and reporting standards for state and local governmental entities. The GASB
has issued a codification of governmental accounting and financial reporting standards
(1987). This codification and subsequent GASB pronouncements are recognized as U.S.
generally accepted accounting principles for state and local governments. The
accompanying financial statements have been prepared in accordance with such
principles.
GASB Statement No. 14 established criteria for determining the governmental reporting
entity and component units that should be included within the reporting entity. Financial
accountability by the consolidated government is determined on the basis of the following
criteria:
1.
2.
3.
4.
5.
Appointment of a voting majority of the governing board
Imposition of will
Financial benefit or burden
Fiscal dependence
Designation of management
•10-
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Notes to Financial Statements
For the Year Ended December 31, 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Because the consolidated government appoints the governing board and thusly can
impose its will, the Commission was determined to be a component unit of the Terrebonne
Parish Consolidated Government, the governing body of the parish and the governmental
body with financial accountability. The accompanying financial statements present
information only on the funds maintained by the Commission and do not present
information on the consolidated government, the general government services provided by
that governmental unit, or the other governmental units that comprise the governmental
reporting entity.
A. FUND ACCOUNTING
The Houma-Terrebonne Airport Commission is organized and operated on a fund basis
whereby a self-balancing set of accounts (Enterprise Fund) is maintained that comprises its
assets, liabilities, net assets, revenues, and expenses. The operations are financed and
operated in a manner similar to a private business enterprise, where the intent of the
governing body is that the cost (expenses, including depreciation) of providing services on
a continuing basis be financed primarily through user charges.
B. NET ASSETS
The Houma-Terrebonne Airport Commission's resources are classified for accounting and
reporting purposes into the following three net asset categories:
Invested in capital assets, net of related debt consists of capital assets, net of
accumulated depreciation and reduced by outstanding balances for bonds, notes, and
other debt that are attributed to the acquisition, construction, or improvement of those
assets.
Restricted net assets result when constraints placed on net asset use are either
externally imposed by creditors, grantors, contributions, and the like, or imposed by law
through constitutional provisions or enabling legislations.
Unrestricted net assets consist of net assets which do not meet the definition of the two
preceding categories. Unrestricted net assets often are designated to indicate that
management does not consider them to be available for general operations. Unrestricted
net assets often have constraints on resources which are imposed by management, but
can be removed or modified.
•11
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Notes to Financial Statements
For the Year Ended December 31, 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont)
C. CAPITAL ASSETS
Capital assets of the Airport Commission, excluding donated property and equipment, are
valued at cost. All donated property and equipment are recorded at estimated fair market
value on the date of the donation. Assets are capitalized if costs exceed $500 and if they
have an estimated useful life of at least one year. Depreciation of all exhaustible fixed
assets is charged as an expense against operations. Capital assets reported on the
statement of net assets are net of accumulated depreciation. Depreciation is computed
using the straight-line method over the estimated useful life of the individual asset.
Estimated useful lives of assets range from 1 to 40 years as follows:
Property
Master Plan Phase I - taxiways and paving
Runways and parking apron
Runways and approach lighting
Buildings
Equipment
Automobiles and trucks
Office furniture and fixtures
Land improvements
Industrial park improvements
Miscellaneous
Estimated
Life
in Years
20-40
5-40
5-40
3-40
1-40
5-14
5-20
5-40
20-40
2-20
Airport improvements generally have been constructed or acquired with capital
contributions from other governments. Depreciation shown on the statement of revenues,
expenses, and changes in fund net assets includes depreciation of assets acquired from
such contributions.
By a quit-claim deed executed on April 9, 1958, the Houma-Terrebonne Airport
Commission acquired 1743.47 acres of airport property and existing facilities that were
transferred to the City of Houma and the Terrebonne Parish Police Jury by the General
Services Administration pursuant to the authority contained in the Federal Property and
Administrative Services Act of 1949 and the Surplus Property Act of 1944. Administration
of this property is governed by the provisions of this quit-claim deed. The quit-claim deed
is earned on the books at the nominal value of $1 and, accordingly, no depreciation is
included in the accompanying financial statements.
Long-term liabilities are recognized within the Enterprise Fund.
•12-
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Notes to Financial Statements
For the Year Ended December 31, 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
D. BASIS OF ACCOUNTING
Basis of accounting refers to when revenues and expenses are recognized in the accounts
and reported in the financial statements. Basis of accounting also refers to the timing of
the measurements made, regardless of the measurement focus applied. The Airport
Commission's records are maintained on the cash basis of accounting. However, the
Enterprise Fund reported in the accompanying financial statements has been converted to
the accrual basis of accounting. Revenues are recognized when they are earned, and
expenses are recognized when they are incurred. The Enterprise Fund is reported using a
flow of economic resources measurement focus and a determination of net income and
capital maintenance.
E. CASH AND CASH EQUIVALENTS
Under state law, the commission may deposit funds within a fiscal agent bank organized
under the laws of the State of Louisiana, the laws of another state in the Union, or the laws
of the United States. As of December 31, 2008, the Commission had cash and cash
equivalents (book balances) totaling $953,906 as follows:
Petty cash
Checking account
Govemment money market fund
Total
$
200
146,112
807,594
$
953,906
These deposits are stated at cost, which equals market. Under state law, these deposits
(or the resulting bank balances) must be secured by federal deposit insurance or the
pledge of securities owned by the fiscal agent bank. The market value of the pledged
securities plus the federal deposit insurance must at all times equal the amount on deposit
with the fiscal agent bank. The securities are held in the name of the pledging fiscal agent
bank in a holding or custodial bank that is mutually acceptable to both parties.
The government money market fund is secured by pooled government securities.
For purposes of the statement of cash flows, the Commission considers all highly liquid
investments purchased with an initial maturity of three months or less to be cash
equivalents.
•13-
Houma-Terrebonne Airport Commission
Ten-ebonne Parish Consolidated Govemment
Notes to Financial Statements
For the Year Ended December 31, 2008
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
F. INVESTMENTS
Under state law, the Commission may invest in United States bonds, treasury notes,
certificates, and commercial paper. As of December 31, 2008, the Commission holds
investments as follows;
Cost
Market Value
Govemment National Mortgage Assoc.
Federal National Mortgage Assoc.
Federal Home Loan Mortgage Corp.
$
3,180.059
729,107
1,545,064
$ 5.454,230
$
2,955.896
1,003,903
1.252,597
$ 5.212.396
The Commission's investment philosophy as related to these investments is to hold these
investments until maturity. Such philosophy results in no loss of principal regardless of
market conditions.
G. VACATION AND SICK LEAVE
Employees of the Airport Commission are granted from 10 to 15 days of vacation leave
each year, depending on their length of service.
In addition, employees are granted 10 days of sick leave each year. A maximum of 10 days
of unused vacation leave may be carried fonward from year to year. Sick leave can be
accumulated not to exceed 90 days. Upon separation of employment, employees are
compensated for accumulated vacation leave at the employee's current rate of pay.
Employees retiring with more than 10 years of service are compensated for 50 percent of
the accumulated sick leave to a maximum of 45 days. As of December 31, 2008,
employees of the Airport Commission have accumulated $6,944 of employee leave
benefits,
H. ESTIMATES
The preparation of flnancial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual results could differ from
those estimates.
I. ACCOUNTS RECEIVABLE
The Commission accounts for bad debts using the allowance method. As of December 31,
2008, the Company allowed for all accounts that were deemed unlikely of collection.
14-
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Notes to Financial Statements
For the Year Ended December 31, 2008
NOTE 2 - DEPOSITS
Louisiana state law allows all political subdivisions to invest excess funds in obligations of
the United States or other federally insured investments, certificates of deposit of any bank
domiciled or having a branch in the state of Louisiana, guaranteed investment contracts
and investment grade (A-1/P-1) commercial paper of domestic corporations.
Bank Deposits:
State law requires that deposits (cash and certificates of deposits) of all political
subdivisions be fully collateralized at all times. Acceptable collateralization includes FDIC
insurance and the market value of securities purchased and pledged to the political
subdivision. Obligations of the United States, the State of Louisiana, and certain political
subdivisions are allowed as security for deposits. Obligations furnished as security must
be held by the political subdivision or with an unaffiliated bank or trust company for the
account of the political subdivisions.
The year-end balance of deposits is as follows:
Bank
Balance
Cash and cash equivalents
$
974,958
Reported
Amount
$
953.906
Custodial credit risk is the risk that in the event of a bank failure, the Commission's
deposits may not be returned to it. The Commission has a written policy for custodial credit
risk. As of December 31, 2008, $807,594 of the Commission's bank balance of $953,906
was exposed to credit risk. These deposits were uninsured and were collateralized with
securities held by the pledging flnancial institution's trust department or agent, but not in
the Commission's name.
As of December 31,2008, cash was adequately collateralized in accordance with state law
by securities held by an unafflliated bank for the account of the Commission. The
Governmental Accounting Standards Board (GASB), which promulgates the standards for
accounting and financial reporting for state and local governments, considers these
securities subject to custodial credit risk. Even though the pledged securities are
considered subject to custodial credit risk under the provisions of GASB Statement 40,
Louisiana Revised Statute 39:1229 imposes a statutory requirement on the custodial bank
to advertise and sell the pledged securities within ten days of being notified by the
depositor that the flscal agent has failed to pay deposited funds upon demand.
15-
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Notes to Financial Statements
For the Year Ended December 31, 2008
NOTE 3 - INVESTMENTS
During the year ended December 31, 2008, the Commission invested in asset/liability
based derivatives in the form of collateralized mortgage obligations (CMOs). CMOs are
bonds that are collateralized by whole loan mortgages, mortgage pass-through securities
or stripped mortgage-backed securities. Income is derived from payments and
prepayments of principal and interest generated from collateral mortgages. Due to varying
established payment orders, some CMOs have more stable cashflov\rerelative to changes
in interest rates than others, which can be significantly sensitive to interest rate
fluctuations. In a declining interest rate environment, some CMOs may be subject to a
reduction in interest payments as a result of prepayments of mortgages, which make up
the collateral pool. Reductions in interest payments cause a decline in cash flows and, thus
a decline in market value of the CMO security. Rising interest rates may cause an
increase in interest payments, thus an increase in the value of the security.
The Commission's investments are categorized to give an indicafion of the level of risk
assumed by the Commission as of December 31, 2008. The categories are described as
follows:
Category 1 - Insured or registered, with securities held by the Commission or its
agent in the Commission's name.
Category 2 - Uninsured and unregistered, with securities held by the counterparty's
trust department or agent in the Commission's name.
Category 3 - Uninsured and unregistered, with securities held by the counterparty,
or its trust department or agent but not in the Commission's name.
Investments, categorized by level of risk, are:
1
U.S. Government Securities
-0-
Category
2
3
-0-
$ 5,212,396
Fair
Value
Cost
i
!
$ 5.212,396
$ 5.454,230
'
Investments are registered in the name of the broker for the benefit of the Airport
Commission and are held by the broker. Because the underiying securities are not held in
the Airport Commission's name and are not held by the Airport Commission or its agents,
they are considered uninsured and unregistered (Category 3) in applying the credit risk of
GASB Codification Section I 50.125. During the year ended December 31, 2008, the
Commission recognized $230,352 of unrealized appreciation on such investments.
•16-
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Govemment
Notes to Financial Statements
For the Year Ended December 31, 2008
NOTE 4 - CAPITAL CONTRIBUTIONS FROM OTHER GOVERNMENTS
During the year ended December 31, 2008, the Airport Commission received capital
contributions from the following governments:
Ten-ebonne Parish Consolidated Govemment
State of Louisiana/Department of Transportation and Development
$
$
20,000
4,978
24.978
These contributions were designated for use in taxiway reconstruction projects and
reimbursement on the Clendening Road project.
NOTE 5 - CAPITAL ASSETS
A summary of changes in capital assets follovire:
Land
Buildings
Improvements other than
buildings
Furniture and equipment
Construction in progress
Less accumulated
depreciation
Totals
Balance
January 1, 2008 Additions
$ 1,069.079 $
1,624.070
28.177
27,338,090
457,147
614,342
31.102,728
621,858
792
372,938
1,023,765
(6,875,374)
$24,227,354
(775,668)
$ 248,097
Deletions
$
-
Balance
December 31, 2008
1.069.079
$
1,652,247
(593.497)
(593,497)
$
(593,497)
27,959.948
457.939
393,783
31.532,996
$
(7.651,042)
23,881,954
NOTE 6 - PENSION PLA N
Effective January 1987, the Commission provides pension benefits for all of its fuil-time
employees through a defined contribution plan administered by the Public Employees
Benefit Services Corporation as authorized by the pension plan contract dated January
1987. In a defined contribution plan, benefits depend solely on amounts contributed to the
plan, plus investment earnings. Employees are eligible to participate from the date of
employment. The plan requires that both the employee and the Commission contribute an
amount equal to five percent of the employee's base salary each month. For employees
hired prior to July 1,1993, the Commission's contributions for each employee (and interest
allocated to the employee's account) are fully vested after three years of continuous
service. Employees hired subsequent to July 1, 1993 receive vesting under a five year
sliding schedule. Commission contributions for, and interest forfeited by, employees who
leave employment before vesting are used to reduce the Commission's current-period
contribution requirement.
-17-
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Notes to Financial Statements
For the Year Ended December 31, 2008
NOTE 6 - PENSION PLAN (Cont)
The Commission and the employees made the required five percent contributions, $12,651
or $25,302 in total.
NOTE 7 - BONDS PAYABLE
After appropriate approval by the Louisiana State Bonding Commission on June 27,2007,
the Commission issued $4,490,000 of revenue bonds,Series 2007A, for the purpose of
constructing and acquiring improvements, extensions and replacements to the taxiways,
airport lighting systems, AWOS systems, and other governmental projects, including a new
administrative office and fire station, and all appurtenant equipment accessories,
replacements and additions related thereto, all works of public improvement and/or
revenue producing projects. The agreement includes monthly principal and interest
payments ranging from $93,759 to $94,769, an interest rate of 5.65%, and a maturity date
of June 1, 2027. The outstanding balance of bonds payable as of December 31, 2008 is
$3,510,367. Maturities of long-term debt are as follows:
Year Ending December 31.
2009
2010
2011
2012
2013
Thereafter
$
136,000
144,000
152,000
162.000
171,000
2,745,367
$ 3,510,367
NOTE 8 - LEASES
The Airport Commission leases various parcels of land and/or buildings located at the
airport to various aviation, industrial, and business concerns. These are noncancelable
leases with obligated terms ranging from one to ten years or other maximums established
by Louisiana Revised Statutes. All leases contain escalation clauses. The leases are
subject to state bid laws and final approval by the Federal Aviation Administration under
the terms of the quit-claim deed signed April 9,1958. The following is a schedule of future
minimum rental income from noncancelable operating revenue leases:
18-
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Notes to Financial Statements
For the Year Ended December 31, 2008
NOTE 8 - LEASES (Cont)
The following is a schedule of future minimum rental income from noncancelable operating
revenue leases:
Year Ending December 31,
2009
2010
2011
2012
2013
Thereafter
$ 1,290,558
942,637
828,517
670,558
598,694
2.912.266
$ 7,243.230
NOTE 9 - COMPENSATION OF BOARD COMMISSIONERS
As provided by Louisiana Revised Statute 2:603, the Commissioners have elected to use
the monthly meeting method of compensation. Under this method, the chairman and other
board members receive a payment for each meeting attended with a limit of two paid
meetings per month. The chainnan receives $200 per meeting. The board members
receive $80 per meeting. The compensation is included in personal services expense on
the statement of revenues, expense and changes in net assets. The following amounts
were paid to commissioners for the year ended December 31, 2008:
L J . Pizzolatto, Jr.
UlysseGuidry
Tim Bourgeois
Edward Marmande
Carmelita Ratna
Ronney Picou
Meriin Lirette
Total
$
4,000
1.760
1,820
1,600
1,280
1,360
1.440
$ 13^260
-19-
REQUIRED SUPPLEMENTAL INFORMATION
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Budgetary Comparison Schedule
Year Ended December 31, 2008
Variance with
Revised Budget
Actual
Over
Original
Final
Amounts
(Under)
$ 1.331,702
$ 1,331,702
$ 1.347,101
Budgeted Amounts
REVENUES
Rents and leases
$
15.399
85.923
85,923
90.319
4,396
296,524
296.524
354.413
57,889
2,000
2,000
-
1,716.149
1.716,149
1.791.833
75.684
Personal services
430,663
430,663
432,341
1.678
Contractual services
219.600
219.600
306.218
86,618
116,000
116,000
135,459
19,459
Commissions on fuel
Interest earned
Ottier
TOTAL REVENUES
(2,000)
EXPENDITURES
Repairs and maintenance
Supplies and materials
81,700
81,700
67,219
(14,481)
Other expenses
40,000
40,000
28,952
(11.048)
887,963
887.963
970,189
82,226
TOTAL EXPENDITURES
-20-
SPECIAL REPORT OF CERTIFIED PUBLIC ACCOUNTANTS
Martin
and
Pellegrin
CerHfM Public Accounianit
(A Pro/tjjwnat CorponHinn)
103 Ramey Road
Houma, Louisiana 70360
Ph. (985) 851-3638
Fax(985) 851-3951
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
To the Board of Commissioners
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Houma, Louisiana
We have audited the basic financial statements of the Houma-Terrebonne Airport
Commission as of and for the year ended December 31, 2008, and have issued our report
thereon dated May 6, 2009. 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 Govemment Auditing Standards, issued by the Comptroller
General of the United States.
Internal Control Over Financial Reporting
In planning and perfonning our audit, we considered the Houma-Terrebonne Airport
Commission's internal control overfinancial reporting as a basis for designing our auditing
procedures for the purpose of expressing our opinion on the financial statements, but not
for the purpose of expressing our opinion on the effectiveness of the Commission's internal
control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the Commission's internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow
management or employees, in the nomnal course of performing their assigned functions, to
prevent or detect misstatements on a timely basis. A significant deficiency is a control
deficiency, or combination of control deficiencies, that adversely affects the entity's ability
to initiate, authorize, record, process, or report financial data reliably in accordance with
generally accepted accounting principles such that there is more than a remote likelihood
that a misstatement of the entity's financial statements that is more than inconsequential
will not be prevented or detected by the entity's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies,
that results in more than a remote likelihood that a material misstatement of the financial
statements will not be prevented or detected by the entity's internal control.
-21-
To the Board of Commissioners
Houma-Ten-ebonne Airport Commission
Terrebonne Parish Consolidated Government
Houma, Louisiana
Page 2
Our consideration of intemal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify all
deficiencies in intemal control that might be significant deficiencies or material
weaknesses. We did not identify any deficiencies in internal control over financial reporting
that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Houma-Terrebonne Airport
Commission's financial statements are free of material misstatement, we performed tests
of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements, noncompliance with which could have a direct and material effect on the
detemiination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit and. accordingly, we do
not express such an opinion. The results of our tests disclosed no instances of
noncompliance that are required to be reported under Govemment Auditing Standards.
This report is intended solely for the infonnation and use of the Board of Commissioners,
management and the Louisiana Legislative Auditor and is not intended to be and should
not be used by anyone other than these specified parties. Under Louisiana Revised
Statute 24:513, this report is distributed by the Legislative Auditor as a public document.
May 6, 2009
-22-
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Schedule of Findings and Questioned Costs
As of and for the Year Ended December 31, 2008
Section I - Summarv of Auditor's Results
1. The auditor's report expresses an unqualified opinion on the basic financial
statements of the Houma-Terrebonne Airport Commission.
2. No significant deficiencies were noted during the audit of the financial statements.
3. No instances of noncompliance material to the financial statements of the HoumaTerrebonne Airport Commission, which would be required to be reported in
accordance with Govemment Auditing Standards, were disclosed during the audit.
4. A management letter was not issued.
Section II - Financial Statement Findings
No findings material to the basic financial statements of the Houma-Terrebonne
Airport Commission were noted during the audit.
Section III - Internal Control Findings
No findings related to the Houma-Ten'ebonne Airport Commission's intemal control,
which would be required to be reported in accordance with Govemment Auditing
Standards, were noted during the audit.
Section IV - Findings and Questioned Costs ^MaJor Federal Award Program Audit
This section is not applicable.
-23-
Houma-Terrebonne Airport Commission
Terrebonne Parish Consolidated Government
Schedule of Prior Findings and Resolution Matters
As of and for the Year Ended December 31, 2008
Note: All prior findings relate to the December 31, 2007 audit engagement.
Section I - Internal Control and Compliance Material to the Financial Statements
No findings related to the Houma-Terrebonne Airport Commission's internal control,
which would be required to be reported in accordance with Govemment Auditing
Standards, were noted during the audit. No compliance findings material to the
basic financial statements were noted during the audit.
Section M - Internal Control and Compliance Material to Federal Awards
This section is not applicable.
Section III - Management Letter
A management letter was not Issued.
-24-