Com ponentu nitfinancialstatem ents A nd R eportof Indepen denta uditors

Transcription

1 03. 2 f. ;.~?:53 Com ponentu nitfinancialstatem ents A nd R eportof Indepen denta uditors A irporta uthority fora irp ortd istrict#1 O f Calcasieu Parish Lake Charles,Louisiana D ecem ber31,2002 and 2001

2 TA BLE OF CON TEN TS Page IndependentA uditors'report M anagem ent's D iscussion and A nalysis G eneralpurpose FinancialStatem ents Statem entsof N eta ssets Statem entsof Revenues,Expensesand Changesin N eta ssets Statem entsof Cash Flow s Schedule of FederalFinancialA ssistance N otes to FinancialStatem ents IndependentA uditors'report on Com pliance and Internal Controlover FinancialReporting Based on an A uditof FinancialStatem entsperform ed in A ccordan ce w ith G overnm ent Auditing Standards Report on Com pliance W ith Requirem ents Applicable to Each M ajorprogram and InternalControloverComplian ce in A ccordance w ith O M B CircularA Supplem entalinform ation

3 Stulb & A ssociates,~a'ac Certified PublicAccoun~ant* JamesE Stulb,C.P.A. Kristine S.Carter,C.P.A. IN D EPEN D ENT A UD ITO RS'RE PO RT Board of Com m issioners A irporta uthority fora irportd istrict#1 of Caleasieu Parish L~ke Charles,Louisiana W e have audited the accom panying financialstatem entsof the A irporta uthority fora irportd istrict#1 of Calcasieu Parish,com ponentunitof Calcasieu Parish Police Jury,asofDecem ber31,2002 and 2001 and for the years then ended,as listed in the table of contents. These financialsta tem ents are the responsibility ofthe Authority's management. Ourresponsibility isto express an opinion on these financialstatem entsbased on ouraudit. W e conducted our auditin accordance with auditing standards generally accepted in the United Statesof A merica and the standardsapplicable to financialauditscontained in GovernmentAuditing Standards', issued by the Com ptrollergeneralof the U nited Statesof America.Those standardsrequire thatwe plan and perform the audit to obtain reasonable assur ance about whether the general purpose finan cial statem ents are free of m aterialm isstatem ent.an audit includes exam ining,on a testbasis,evidence supporting the am ounts and disclosures in the general purpose financial statem ents. A n audit also includesassessing th e accounting principlesused and significantestim atesm ade by m anagem ent,asw ell as evaluating th e overallfinancialstatem entpresentation.w e believe thatourauditprovidesa reasonable basisfor our opinion. In our opinion,the financialstatem ents referred to above present fairly,in allmaterialrespects,the financialposition of the Airport Authority D istrict#iof Calcasieu Parish asof Decem ber31,2002 and 2001,and changes in financialposition and cash flow s thereof for the year ended in conform ily w ith aecouatixtg pritaciples generally accepted in the United States of Am erica. A sdescribed in N ote B,th e Authority hasim plem ented a new financia]reporting m odel,asrequired by th e provisionsof GASB StatenlentN o.34,basic FinancialStatements - and M anagem ent's D iscussion and Analysis - for State and LocalGovernments,as ofdecember 31,2002. The management's discussion and analysis on pages5 to 8,ar e nota required partof the basic financialstatem entsbutare supplem entary inform ation required by accounting principlesgenerally accep ted in the United Statesof A m erica. W e have applied certain lim ited procedures,which consisted principally of inquiries of m anagem entregarding the m ethods of m easurem entand presentation of the supplem entary inform ation. H owever,w e did notauditthe inform ation and expressno opinion on it. In accordance w ith Governm entauditing Standards,w e-have also issued our reportdated M ay 27,2003. on our consideration of the Airp ort Authority District#1 ofcaleasieu Parish's intern alcontrolover financialreporting and ourtestof itscom pliance with certain provisionsof laws,regulations,contracts and grants.thatreport isan integr alpartof an auditperform ed in accordance with GovernmentAuditing Standardsand should beread in conjunction with thisreport in considering the resultsof ouraudit. H ibem iatower M em beraicpa ~ M emberlcpa M emberpcps/theaicpa Alliance forcpa Firms ~ Suite1510 ~ P.O.Boxlll7 ~ LakeChades,Louisiasaa70602 (337) ~ 037) Fax stulb _ cpas@lightwire,net

4 Our audit was perform ed for the purpose of form ing an opinion on the general purp ose financial statements of AirportAuthority District#1 of Calcasieu Parish,taken as a whole.the accompanying schedule of expendituresof federalawardsispresented forpurp oses of additionalanalysisasrequired by U.S.OfficeofM anagementand BudgetCircularA-133,Auditsof States,LocalGovermnents,and Non- ProfitOrganizationsand isnotarequired partofthegeneralpurp osefinancialstatementsofairport Authority District#IofCalcasieu Parish.Such infomaation hasbeen subjected to theauditing procedures applied in the auditof the generalpurpose financialstatem entsand,in ouropinion,isfairly stated,in all m aterialrespects,in relation to the generalpurposefinancialstatem entstaken asa whole. M ay 27,2003

5 A IRPO R T A UTH O R ITY FO R A IR PO RT DIST RIC T #1 O F C A LC A SIEU PA RISH -LA K E C H A R LES,LO U ISIA N A M AN A G EM ENT'S DISC U SSIO N A N D AN A LY SIS U sing T his A nnualr eport The new basic financialstatements(implemented foryearended December31,2002)tbcuson the A irportas a w hole. These ba sic statem entsare designed to em ulate corpo rate presentation m odels w hereby all A irport activities ar e consolidated into one business-type fund. The Ibcus of the Statem ents of N et A sse ts is designed to be sim ilar to bottom line results for the A irp ort. This statcm cntcom bines currentfinancialresources with capitalassets. The Statem ents of Revenues, Expense s,and Chan ges in N eta sse ts focuseson results of operations and non-operating revenues thatsupportoperationsoftbe A irport. O verview of the year 2002 Am cricans ar c rctum ing to a normalro ntine and passenger trafi c is steadily com ing back to a reasonable volum e of businessand leisure travel. Ibe lieve thatthe experience of flying in A m erica has changed in profound w ays. Passe ngers arc adaptin g and understandin g the need to arrive atthe airport one hour be fo re their flightdeparts. Passengercheck-in and baggage check has changed trem endously w ith the ar rivalof the TSA this year. Follow ing the terroristattacks of 2001,the airline industry sufered a record netlossof $7.7 billion,even afterreceiving $4 billion in aftertax com pensation from the Stabilization A ct. O n the brighterside,how ever,cooperation from airtravelerssince 9/11 has been terrific. They ar e contributing im m easurably to Am erica'sse curity by being inform ed and concerned travelers. Th ey recognize the im portance of our w ork to the w ell-being of ourindustry. Iam pleased to tellyou thatallchecked baggage is be ing screened fo rexplosives atallairp orts. Thisistrem endoussuccess,a creditto our screeners,ournew FederalM ar shallchad Prhneaux,the A irportsecurity Coordinator M r.v incenta ntoine,the airlines and our contractpartners. M any have w orked incredibly hard to reach a m ilestone thatm akes every airport in this nation - an d everyone w ho flies - sa ferthan they have everbeen. Screenin g checked bags is anotherlayerof secur ity in our "system of system s" designed to stay ahead of th e terrorists that threaten our hom eland. TSA w orked w ith every airp ort individually to develop the ba ggage sc reening plansthat were im plem ented. Each plan is tailored to the needs of the individual airport, usin g Congressionally-approved m ethodsto screen allba gs. Last year I reported that Lake Charles Regional A irport had taken on a broad cam paign to em pha size the fhctthatsma llairports m ustm eetthe sa m e security requirem ents across the boar d sin ce w e are a link to the lar geraviation system. Iam proud to tellyou thatw e have reached allof oar goalsin W e w ere successfulin obtaining a FederalGrant fi'om the D epartm ent of Transportation in the amountof $500,000 along with matching State,City and localfundsamounting to near $1m ilion fbrthe developm entof additional air service forlak e Clm rlesand Southw estlouisiana. W e established contacts atd elta A irlin es and there seem s to be interestin our requestfo rservice for Dallas/Fort W orth and Atlanta in the futur e. There are days w hen D elta show sconsiderable interest in our marketand then there are timeswhen Isee their financial reportsand sense thatthey just

6 can 't conunit to a sm allnew m arket even w ith subsidy. W e have reopened negotiations w ith N orthw esta irlines. W e m ade a decision to go back to N orthwestand propose subsidy,advertising and a travelaccountto them justaswe had to Delta.RepresentativeChrisJohn wascontacted and has agreed to represe nt Lake Charles w ith our proposalto N orthwest. I feel it is enorm ously im portantw ork w e are doing as w e m ak e plans to im prove our air transportation system for the future. O ur challenge is to elim inate co m placency from our vocabulary and to continue w ith the im provem entsw e so desperately need. ContinentalAirlines,ExpressJetconverted theirservice to an aljetfleetin December.ahead of schedule. An extensive advertising package was implemented in a jointefortby Lake Charles Regional A irport and Continental A irlin~ to educate the travelin g public. Radio, television, new spaper and billboard advertising is being utilized to m ake Southwest Louisiana aware of Contin entala irlin es and the RegionalA irp ort'snew changes. FinancialH ighlights Asof Decem ber31,2002,the A irport's netassets have increase d to $13.3 m illion from $11.3 m illion at D ecem ber 31,2001. This increase is due in partto the addition of capitalassets,in particularrunw ay im provem entsfu nded by airportim provem entgrants. At year -end, operating revenues w ere slightly less due to the decrease in landing fees.n onoperating revenues increased significa ntly due lar gely to grantsreceived forrunway rehabilitation. Leas es and rentals in the lasttwo year s ha ve beco m e so diversified and in m any casestw o and three term leases have gone to the e~ al ation clauses of each lease. Those am ounts have created additionalrevenues. Interestincom e from our cas h reserves fellto an alltim e low. W e did sw itch ourfisca lagency m anagem entand we hope to see som e positive results. R evenue by Source O perating Revenue [] Rentalinco m e [] Landing fees

7 N on-operating revenue N on operating revenues [] Int~ est [] Ad Valorem t~.x [] ~ ato r~venue ~haring D F~ ralgrants [] ~ ate grants [] LocalGrants [] l'as.~.'rlgerfacililych~ s A s indicated above a significant source of non-operating revenues cam e from grants. These revenueswere largely used forapproxim ately $2.5 m illion of runway rehabilitation. Thisyear, however,we had significa ntcostoverrunsin ourmajorprojectsand itappearstha treimbursement in 2003 willhappen. The state has agreed thatthey w illreim bur se their share provided the FAA willallocate the funds. Irequested taking the overrun am ounts from the 2003 entitlem ents and using thebalance toward the PassengerTerminalBuilding remodeling project. Totalexpenses (before depreciation) for the year were some $20,000 under budget and down approximately $35,000 from las tyear. Ins urance costwentup and surprisingly marketfu elcost w entup,butour usage keptus underbudget. /

8 [] Other Ii J O perating expenses2002 I i t9salariesandbenetits [] Contractualservices [] MaterialsandsuppliesD Oficeexpense [ [] Utilities and telephone [] O utside secta-ity [] Insurance [] Promotion I [] Airservice consulting [] Depreciation i!

9 A irportauthority forairp ortdistrict#1of Calcasieu Parish -Lake Clmrles,Louisiana STATEM ENTS OF NET ASSETS D ecem ber and 2001 CurrentAssets Cash A ccountsreceivable,net Trade A dvalorem taxes Slaterevenue sharing Federa lgrants Slate grants Passengerfacility charges $ 1,096,857 $ 917,505 36, ,621 13, ,844 25,965 15, ,301 37, , ,647 13,322 8, ,058 Prepaid insurance TotalO urenta ssets N oncurentassets Land Constru ction in progress O thercapitalas sets,netof accum ulated depreciation Totalnoncurrcntassets ,715,926 2,410,409 95,282 9,510,573 12,016,264 8,768 1,477,331 2,410, ,492 7,334,493 9,934,394 TOTA L A SSETS 13,732,190 11,411,726 CurrentLiabilities A ccounts payable Constraction contract paya ble Payrolltaxesand benefits Deduction payable pension D eferred revenues TotalCu rentliabilities N oncurrentliabilities Security deposit TOTA L LIA BILITIES 12, ,127 25,916 11, ,990 4, ,938 82,411 25,757 10, , ,832 Invested in ca pitalassets U nrestricted TOTA L NET A SSETS 11,888,137 1,468,063 $ 13,356,200 9,851,983 1,424,910 $ 11,276,893 See accom panying notesto financialstatem ents.

10 A irporta uthority fora irportd istrict#i of Calcasiea Parish -Lake Charles,Louisiana STATEM ENTS OF REVENUES,EXPENSES,AND CHANGE IN NET ASSETS Forthe yearsended Decem ber31,2002 and 2001 O perating revenues Rentalincom e Landing fees M iscelaneous Totaloperating revenues Operating Expenses Salariesand benefits Contractualservices M aterials an d supplies O ffice expense Utilities and telephone O utside security Insurance Prom otion A irservice consulting D epreciation O ther $ 641,204 60, , , ,433 94,742 15,501 89, ,501 43,086 22,218 21, ,022 9,117 1,568,811. $ 633,717 70,377 1,5(~0 705, , , ,032 13, , ,899 38,512 40,355 18, ,235 7,964 1,656,;~.!2 Operating income(loss) (866,471) ~ ) Nonoperatlng revenues(exp enses) Interest A d V al orem tax State revenue sharing Federalgrants State grants Localgrants Passeng erfacility charges A d valorem tax deduction Increase (decrease) in netassets N etassets,beginning of year N etassets,end of year 17, ,326 13,066 2,210, ,306 5, ,591 (I1,601) 2,945,778 44, , ,010 8,514 33,248 56,354.. ~ag T~ ) 727,281 2,079,307 (223,337) 11,276,893 11,500,230 $ 13,356,200 ~Ll11.276,893 See accom panying notes to financialstatem ents.

11 A irporta uthority fora irp o71district#1 of Calcasieu Parish -Lake Charles,Louisimla STATEM EN TS OF CASH FLOW S Forthe Y earsended Decem ber2002 an d 2001 Cash flow sfrom operating activities: Cash received from charges Cash paym ents to suppliers for goodsand services Cash paym entsto em ployeesfor services 703,587 (539,332) 721,492 (585,128) N etcash used by operating activities (394,797) (426,666) Cas h flow sfrom capitaland related finan cing ac tivities A cquisition mad eonslruction of capitalas sets A d Valorem taxesreceived Capitalgrants received Passenger facility char ges State revenue sharing received (2,506,263) 329,719 2,604, , (268,450) 311, ,256 47, Netcash provided (used )by cap italand related finan cing activities 556, ,632 Cas h flow sfrom investing activities: Intereston inveslanents Netcash provided by investing activities 17, Netincrease (decrease)in cash and cash equivalents 179,352 Cas h and cash equivalents,beginning of year 917,505 Cas h an d cash equivalents,end of year $ 1,096,857 (112,602) See ac com pan ying notesto finan cialstatements.

12 I A irporta uthority fora irportdistrict#1 of Calcasieu Parish -Lake Charles,Louisiana STATEM EN TS O F CA SH FLO W S Forthe yearsended D ecem ber2002 and 200] Reconciliation of operating incom e to net cash provided by operating activities: Operating income (loss) D epreciation Changesin assetsand liabilities: (Increase)decreasein accountsreceivable Increase (decrease)in accountspayable Increase(decrease)in wages and benefitspayable Totaladjustments N etcash used by operating activities 2O02 $ (866,471) 470,022 1, , (950,618) 522,235 15,898 (10,041) (4,140) 1,717 See accom panying notesto financialsta tem ents. 12

13 A irporta uthority fora irportd istrict#]of Calcasieu Parish Lake Charles,Louisiana SCH ED U LE O F FED ERA L FIN AN CIAL A SSISTAN CE Y earended D ecem ber3 l,2002 FederalGrantor/Pass-througb Grantor/Program Title Federal CFDA N um ber Federal Expenditures U S Departm entof Transportation AirportIm provem entprogram $2,318,647 U S D epartm entof Tran sportation Sm allcom m unity AirService D evelopm entpilotprogram 14,608

14 A irportauthority fora irp ortd istrict#1of Calcasieu Parish Lake Charles,Louisiana N OTES TO FIN AN CIAL STATEM EN TS D ecem ber31,2002 an d 2001 N OTE A. O R G AN IZA TIO N AirportAuthority forairp ort District#1ofCalcasieu Parish (the Authority)wascreated by the Calcasieu Parish Police Jury asprovided by R evised Statutes2:602.The A uthority is goveru ed by a board of five com m issioners who,along w ith the A irp ort M anager, establish regulations govenling the m aintenance and operations of the facilities of the Lake CharlesRegionalA irp ort. The finan cialstatem entsof the A uthority w illbe included in the Calcasieu Parish Police Jury's flnalcialreporting as a discretely presented com ponentunit. In determ ining the financialreporting entity,the A uth ority com plies w ith the provisionsof GA SB Statem ent N o.14,"the Finan cialreporting Entity." A sa discretely presented com ponentunit,the A uthority isa separ ate legalentity,butth e Police Jury hasan oversightrelationship w ith the A uthority. N OTE B. SUM M A R Y O F SIG N IFICAN T A CC O UN TING PO LIC IES The Authority complies with Generaly Accep ted Accounting Principles (GAAP). Because the A uthority accounts forits activities as a proprietar y fund,the A uthority has elected to apply algovernm entalaccounting StandardsBoard (GASB)pronouncements an d Finan cialaccounting Stan dardsboard (FASB)pronouncementsissued on orbefore N ovem ber 30, 1989, unless those FA SB pronouncem ents conflict w ith or contradict G A SB pronouncem ents,in which case,g A SB prevails. The A uthority im plem ented new reporting m odel stan dar ds in year ended Therefore,certain year ended 2001balan ceshave been reclas sified to conform w ith the adoption of the new reporting m odelreflected in the year ended 2002 finan cial statem ent presentation. U nder the new reporting m odelallactivity isreported as a single fund. 1. B asisfor Accounting The m easurem ent focus is on the flow of econom ic resources an d the accrualbasis of accounting;w hereby revenues are recognized w hen earned an d expenses are recorded w hen incurred. 2. BudgetPolicy A proposed budgetisprepared and subm itted to the Boar d of Com m issionerspriorto the beginning of each year.a budgetsum m ary and notice of public hear ing ispublished w ith th e public hearing being conducted priorto the com m encem entof the budgetyear. The annual operating budget prepar ed on th e accrualbasis of accounting,covers all authority activities.a tthe end of the fiscalyear unexpended appropriationsautom atically lapse. 14

15 A irporta uthority for A irp ortd istrict#1of Calcasieu Parish Lake Charles,Louisiana 3. C apitalassetsand D epreciation N O TES TO F/N A NCIA L STATEM EN TS D ecem ber31,2002 and 2001 Property an d equipm ent ar e stated at actual or estim ated historical cost, net of accum ulated depreciation. The Authority generally capitalizes assets w ith a cost of $2,500 orm ore. Depreciation iscomputed on a straight-line m ethod overthe estim ated usefullivesas follow s: Building and im provem ent Lan d im provem ents M achinery an d equipm ent Furn iture an d fixtures Y ear s O perating R evenuesand E xpenses The A uthority distringuishes betw een operating an d nonoperating revenuesand expenses in itsstatem entof Revenues,Expenses,an d Changesin N eta ssets. Forthispurp ose,all revenues generated by operations at the airport ar e reported as operating revenues. O perating expenses include allcosts of operatin g the airp ort. A s a result,nonoperating revenues an d expenses include allinvesting an d finaneing tran sactions,including gran ts an d passenger facilities chargesreq uired to be used to finan ce the capitalstructure of the A uthority. 5. PassengerFacility Charges(PFC)Revenue Beginning in M arch,2001 PassengerFacility Charges atthe rate of $3 per enplaned pas senger have been levied by th e Authority under Fed eral Aviation A dm inistration (FAA)approved applicationsto impose and use$4,251,977 forreimbursementofprior FA.A approved im provem ents an d construction of new im provem ents. Total PFC revenuesrem itted to th e Auth ority as of Decem ber31,2002 an d 2001w ere $126,591an d $56,354 respectively. 6. R entalincom e The A uthority leas es its property to com m ercial airlines, car rental com panies, concessionaires,fixed bas e operators who service th e airline industry,th e FAA,an d others. A significantportion of these leasesar e non-can celable operating leases. M inim um rentals on non-eancelable operating leases for the next five year s ar e as follow s: Y ear Am oun t 2003 $341, , , , ,056 15

16 A irporta uthority for A irportdistrict#1of Calcasieu Parish Lake Charles,Louisiana 7. Statem entof C ash Flow s N O TES TO FIN AN CIA L STATEM EN TS D ecem ber31,2002 and 2001 Forpurposesof reporting cash flowsallhighly liquid investments(including restricted assets)with amaturity ofthree monthsorlessare considered to becash equivalents. 8. U se of Estim ates The financialstatem ents ar e prepared in conform ity w ith generally accepted accounting principles and, accordingly, include am oun ts that are bas ed on m anagem ent's best estimatesand judgmen ts.actualresultscould diferfrom theseestimates. N OTE C. C A SH The A uthority'sdepositsare fully collateralized by Federaland State governm entbonds held by Bank One Louisiana in th e nam e of AirportAuth ority for Airport District#1of Calcasieu Parish. Cas h of the A uthority is classified into three categoriesto give an indication of the level of risk assum ed atth e year end. Category 1: includes deposits insured or collateralized w ith securities held by the Authority or itsagentin the nam e of th e A uth ority. Category 2:includes depositscollateralized w ith securities held by the pledging financial institution'strustdepartm entoragentin th e A uthority'snam e. Category 3:includes insured an d unregistered deposits w ith th e securities held by the pled ging finan cial institution, or by its trust departm ent or agent, but not in the A uthority's nam e. Cas h as of D ecem ber31,2002 an d 2001w as allclassified as Category 1 N OTE D. PEN SIO N PLA N Full-tim e em ployees of the A uthority ar e m em bers of the Parochial Em ployees' Retirement System of Louisian a,a multi-employer (cost-sharing),public employee retirementsystem (PERS),controled an d administered by aseparateboard oftrustees. The System iscom posed of tw o distinctplans,plan A an d Plan B,w ith separ ated assets an d benefitprovisions.eligible em ployeesof th e A uthority w ere m em bersof Plan A for 1998.U nderplan A,m em bers w ith 10 yearsof creditable service m ay retire atage 60; m em bers w ith 25 year sof service m ay retire atage 55;m em bersw ith 30 years of service m ay retire regardless of age.th e retirem entallow ance is equalto three percentof the member'sfinalaveragecompensation (defined asthe average of thehigh estco nsecutive 36 months)multiplied by hisyearsof creditableservice.however,an y employeewho w as a m em ber of th e supplem entalplan only prior to the revision date has th e benefit earned forservice credited prior to th e revision date on the bas is of one percentof final com pen sation plus tw o dollars per m onth for each year credited prior to th e revision date, and three percentof finalcom pensation for each year of serv ice credited afterthe revision 16

17 A irporta nthority fora irp ortd istrict#1of Calcasieu Parish Lake Charles,Louisiana N OTES TO FIN AN CIA L STATEM EN TS D ecem ber31,2002 and 2001 date.the retirem entallow an ce m ay notexceed the greaterof one hundred percentof a m em ber's finalsalary orthe finalcom pensation.contributions to the System include 1/4 of 1% of the taxesshow n lo be collectible by the tax rollsof each parish,excepto rlean s and EastBaton Rouge Parishes.These tax dollarsare divided betw een Plan A an d Plan B based proportionately on the salaries of th e active m em bers of each plan.state statute requirescovered em ployeesto contribute a percentage of th eirsalaries,9.5% underplan A, to the System. A s provided by Louisiana Revised Statute 11:103, the em ployer contributions are determ ined by an actuarial valuation for the prior fiscal year.the em ployer contributions for2002 and 2001 w ere 7.75% of covered em ployees'salaries. The payroll for th e A uthority em ployees covered by the system for the year ended Decem ber31,2002 an d 2001was$378,238 and $363,495;the Authority'stotalpayroll and accrued benefitsfor2002 an d 2001was$559,211and $558,890,respectively.The Authority contributed $29,313 an d $28,171 to the system during the years 2002 and N OTE E. A N NU A L A N D SIC K LEA V E Perm anentem ployeesearn one to six w eeksof annualleave and tw o to six w eeksof sick leave each yeardepending on length of service w ith the Authority.A m axim um of ten days of an nualleave m ay be accum ulated an d carried forw ar d w ithoutlim itation.upon term ination,em ployeesare paid forunused annualleave only. N OTE F. A D VAL O R EM TAX ES Forthe yearended D ecem ber31,2002,taxes of.63 m illsw ere levied on property with taxable assessed valuations of $564,433,380 and w as dedicated to the operation and m aintenan ce of th e A irp ort. Property tax m illage ratesar e adopted on a 10 yearbas is.a lltax esar e due an d collectible w hen the as sessm entrollsare filed on orbefore N ovem ber 15thof the currentyear, and becom e delinquentafter D ecem ber31.property taxesnotpaid by the end of February ar e subjectto lien. A renew alelection w as held and pas sed in October 1994 to levy m illage beginning in 1996 an d expiring N OTE G. C A PITA L A SSETS Capitalassetsconsistof th e follow ing: Balance 12/31/01 A dditions D isposals B alance 12~ 1~ 2 Lan d $ 2,410,409 Buildings & Im provem ents 4,285,479 Lan d Im provem ents 13,263,206 M achinery & Equipm ent 1,058,195 Furnitu re & Fixtures 152,642 Construction in progress ,359, $ $ 12,640 2,597,965 35,497 2,659,106 5,305, $ 2,410,409 4,298,119 15,861,171 1,093, , (2,753,316) 23,911,315

18 A irporta uthority forairportd istrict#1of Calcasieu Parish Lake Char les,louisiana N O TES TO FIN AN CIA L STATEM EN TS D ecem ber31,2002 an d 2001 Lessaccmnulated depreciation B alance 12/31/01 A dditions D isposals Balance 12/31/02 Buildings& Im provem ents 2,502,071 Land Im provem ents 8,096,141 M achinery & Equipm ent 712,129 Furniture & Fixtures 114,688 11,425,029 N etcapitalassets 91, ,878 52,389 12, ,022 2,593,689 8,410, , ,825 11,895,051 N OTE H. RELATED PA R TY TRA NSA CTIO N S Pursuantto a Cooperative Endeavoragreem entbetw een the Calcasieu Parish Police Jury an d the Airp ort A uthority for A irport Dislriet #1 of Calcasieu Parish,funding in the am ountof $600,000 isto be provided by th e Police Jury fora generalaviation com plex. As of D ecem ber 31,2001,funding in the am ount of $33,248 had been provided for ar chitectfees.construction has been delayed isexpected to begin in N OTE I. C O M M ITM EN TS AN D C O N TIG ENCIES AsofDecember3I,2002 theauthority had completedtwo runway projectsasfolows Expended through D ecem ber31,2001 Expended during 2002 Total cost Jointsealproject Taxiw ay rehabilitation an d equipm ent $ 72,167 82,505 $ 717,428 $ 789,595 1,687,170 1,769,675 A s of D ecem ber 31, 2002 the A uthority had a construction contract for fire station renovationsin progressasfollow s: A pproved contract Expended through D ecem ber31,2002 Com m itted for2003 Sl14,200 45,959 $ Funding for the fire station renovation w ill be m ade from PFC revenues an d th e A uthority.

19 AirportAuthority fora irportdistrict#1of Calcasieu Parish Lake Charles,Louisiana N OTES TO FINAN CIAL STATEM EN TS D ecem ber31,2002 an d 2001 N OTE J. C O M M ITM ENTS A ND CO N TIG EN C IES On Septem ber16,2002,the authority w asaw arded a grantin the am ountof $709,516 by FederalA viation A dm inistration forthe purchase of an aircraftrescue and fire fighting vehicle. The purchase an d delivery of the vehicle isexpected in On Septem ber 20,2002,the authority w as aw arded a grantby the United States of Am erica DepartmentofTransportation (USDOT)fora SmalCommunity AirService D evelopm entpilotprogram. The gran tsupports efforts of the Authority to secure air service from a second carrier. The authority is to use the funds to provide greater prom otion and m arketing of new service an d to provide subsidy to the new airline during the initialstage of itsservice. The grantprovidesfunding of $500,000 from USD OT and $100,000 each from the parish,city,and state. Asof Decem ber31,2002,pursuantto a cooperative endeavoragreem ent between the Calcasieu Parish Police Jury,the City of Lake Charles,an d the A irport A uth ority fora irportd istricl#1 of Calcasieu Parish,th e parish an d city provided $100,000 each to be used forthe pilotprogr am. The Federal gr antfundsar e notavailable to the A uthority untilexpensesare incurred,atw hich tim e a receivable is recognized. A s of D ecem ber31,2002 th e receivable for the gran ttotaled $14,607. O f the localm atching fu nds,$5,842 wasrecogn ized asincom e and the balance of the funds received is reflected as deferred revenue of $194,158. Funding from the state is pursuant to a cooperative endeavor agreem ent betw een Louisiana Econom ic D evelopm ent Corp oration and A irport Authority for A irp ortd istrict #1 of Calcasieu Par ish. The agreem entprovidesfu nding of $100,000 to be paid in periodic installm ents of $25,000 beginning M ay,2003. Paym entsare to be supported by invoicesfrom the A uthority detailing costsan d expensesincured in connection with the program 19

20 Stulb & A ssociates,at'ac Certified PublicAccoun JamesE Stulb,C.P.A. Kristine S.Carter,C.P.A. IN D EPEN D ENT A UD ITO R S'RE PO R T O N CO M PLIA N CE A N D INTER NA L C O NTR O L O V ER FIN AN C IAL RE PO RTIN G BA SED O N A N A U D IT O F FIN AN C IA L STATEM EN T S PERFO RM ED IN A C C O R D A NC E W ITH G O VERN M ENT A U D ITING STA ND ARD S Board of Com m issioners A irportauthority fora irportd istrict#1 of Calcasieu Parish Lake Charles,Louisiana W e have audited the financialstatem ents of the AirportAuthority forairp ortdistriet#1 of Calcasieu Parish,a com ponentunitof Caleasieu Parish Police Jury,asof and forthe years ended D ecem ber3 l, 2002 and 2001,and have issued our report thereon dated M ay 27,2003.W e conducted our audit in accordance w ith auditing standardsgenerally accepted in the United Statesof Am erica and the standards applicable to financialaudits contained in Governm entauditing Standards,issued by the Com ptroller G eneralof the U nited Sta tes. C om pliance A spartofobta ining reasonable assurance aboutwhetherthe Airp ortauthority forairport D istrict#1of Ca]casieu Parish's financial statem ents are free of m aterial m isstatem ent, we perform ed tests of its com pliance w ith certain provisionsof law s,regulations,contracts,and gran ts,noncom pliance w ith w hich could have a directand m aterialeffecton the determ ination of financialstatem entam ounts.h ow ever, providing an opinion on compliance with those provisionswas notan objective ofour audit,and accordingly,we do not express such an opinion. The results of our tests disclosed no instances of noncom pliance thatare required to be reported under GovernmentAuditing Standard~. In planning and per form ing our audit,we considered the Airp ortauth ority forairp ort District#l of Calcasieu Parish'sinternalcontroloverfinan cialreporting in orderto determ ine ourauditing procedures for the purpose of expressing our opinion on the financialstatem entsand notto provide assurance on th e intem alcontroloverfinancialreporting.o ur consideration of the internalcontroloverfinancialreporting w ould notnecessarily disclose allm attersin the internalcontrolover financialreporting thatm ighthe m aterialw eaknesses.a ma ter ialweakn essisa condition in which the design or operation of one orm ore of the internalcontrolcomponentsdoesnotreduce to a relatively low levelthe risk thatm isstatementsin am ountsthatwould be m aterialin relation to the finaneialstatem entsbeing audited m ay occurand notbe detected w ithin a tim ely per iod by em ployeesin the norm alcourse of perform ing theirassign ed functions. W e noted no m atters involving the internalcontrolover financialreporting and its operation thatwe consider to be a m aterialweakness. This report is intended for the inform ation of th e Board of Com m issioners,m anagem en t,and federal awarding agencies and pass-through enlities and isnotintended to be and should notbe used by anyone oth er than th ese speeified parties. H ibernia Tower M em beraicpa ~ M emberlcpa M em berpcps/the AICPA A liancef~rcpa Firm s ~ Suite1510 ' P.O.Box 1117 ~ LakeCharles,Louisiana70602 (337) * (337) Fax stulb _ cpas@ligh twire.net

21 Stulb & A ssociates,apac Certified PublicAccountanu JamesE Stulb,C.PA Kristine S,Carter,C.P.A REPORT ON COM PLIANCE W ITH REQUIREM ENTS APPLICABLE TO EACH M AJOR PRO G RAM A ND INTERNAL CO NTRO L O VER CO M PLIANCE IN ACCO RD AN CE W ITH O M B CIRCULAR A-133 Board of Com m issioners A irportauthority of A irportd istrict#1 of Calcasien Parish Lake Charles,Louisiana W e have audited the com pliance of A irport Authority of Airp ort D istrict# 1with the typesof compliance requirementsdescribed in theu.s.office of M anagemem and Budget(OM B)CircularA-133 Compliance Supplementthatareapplicableto each ofitsmajorfederalprogramsfortheyearended December31, 2002.TheAuthority'smajorfederalprogramsarc identified in thesummary ofauditors'resultssection of the accompanying schedule of findings and questioned costs. Com pliance with the requirem entsof laws,regulations,contracts and grants applicable to each of its major federal programs is the responsibility of the Authority 's m anagem ent. Our responsibility is to express an opinion on the Authofity 'scom pliance based on ouraudit. W e conducted ourauditof com pliance in accordance w ith auditing standardsgenerally accepted in the U nited Sta tes of Am erica;the sta ndards applicable to the financial audits contained in Governm ent Auditing Standards,issued by th e C om ptroller Generalof th e United States,and OM B CircularA -133, Auditsof States,LocalGovernments,and Non-ProfitOrganizations.Thosestandardsand OM B Circular A -133 require that w e plan and per form the audit to obtain reasonable assurance about whether noncompliance with the typesof com pliance requirem entsreferred to above thatcould have a directand materialeffecton a majorfederalprogram occurred. An auditincludesexamining,on a testbasis, evidence aboutthe A uthority'scom pliance w ith those requirem entsand per form ing such otherprocedures aswe considered necessary in the circum stances. W e believe thatour auditprovidesa reasonable basis forouropinion. Ourauditdoesnotprovide a legaldeterm ination of the Authority 's compliance with those requirem ents. In ouropinion,the A uthority com plied,in allm aterialrespects,w ith the requirem entsreferred to above thatareapplicableto each ofitsmajorfederalprogramsfortheyear ended December31,2002. The m an agem entof the A irp orta uthority of A irp ortd istrict#1 of Calcasieu Parish is responsible for establishing an d m aintaining effective inteaam l control over com pliance with requirem ents of law s, regulations,contracts,and gr antsapplicable to federalprogram s. In planning and perform ing ouraudit, we considered the Authority 'sinternalcontrolovercompliance with requirementsthatcould have a direct ma terialefecton ama jorfederalprogram in orderto determineourauditing proceduresforthepurpose of expressing our opinion on com pliance and to testan d reporton in tern alcontrolover com pliance in accordance w ith O M B CircularA H iberniatower M em beraicpa ~ M emberlcpa M em berpcps/theaicpa AllianceforCPA Firms SuitelSl0 ~ P.O.Boxlll7 ~ Lake Charles,LouisianaT0602 (337) ~ (337) Fax em ail:stulb cpas@ ligh twire.n et

22 Ourconsideration of the internalcontrolovercompliancewould notnecessarily disclose allm attersin the internalcontrolth atm ightbe m aterialweaknesses. A materialweaknessis a condition in which th e design oroperation of one ormore of th e intem alcontrolcomponentsdoesnotreduceto a relatively low levelthe risk th atnoncompliance w ith applicable requirementsof law s,regulations,contracts,and grants thatwould bematerialinrelationtoamajorfederalprogram being audited may occurandnotbedetected w ithin a tim ely period by employeesin the norm alcourse ofperform ing theirassigned functions. W e noted no m attersinvolving the internalcontrolovercompliance and itsoperation thatwe considerto be m aterialw eaknesses. This report is intended for the inform ation of the Board of Com m issioners,m anagem ent,the Fed eral A viation A dm inistration and the Louisiana Legislative Auditor. Thisrestriction isnotintended to lim it th e distribution of this report,whieh isa m atterof public reco rd. M ay 27,2003

23 Supplem entalinform ation

24 CURR EN T A UD IT A irporta uthority fora irp ortd istrict#1of Calcasieu Parish Lake Charles,Louisiana SCHEDULE OF FINDINGS ANq:)QUESTIONED COSTS D ecem ber31,2002 U S D epartm entof Tran sportation A irportim provem entprogram - CFD A N um ber U S D epartm entof Transportation Sm allcom m unity Air Service Developm entpilotprogram There w ere no findingsorquestioned costsin the currentauditreportthatrequiresfurther com m ent.