Page 34 - BAA CAFR 2017

BIRMINGHAM AIRPORT AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 NATURE OF ORGANIZATION AND REPORTING ENTITY

A. Nature of Organization
The Birmingham Airport Authority ("the Authority") was incorporated on
June 6, 1986, as a nonprofit corporation under the provisions of the Code of
Alabama, Title 4, Chapter 3, Article 2. The Authority is governed by a
seven (7) member Board of Directors, who are nominated by the Mayor and
elected by the City Council of the City of Birmingham ("the City").

The City owns the Birmingham-Shuttlesworth International Airport (the
"Airport"). Pursuant to a Lease Assignment and Operating Agreement
("Agreement") dated September 16, 1986 and amended October 1, 2009,
the City transferred to the Authority custody, control and management of
the Airport for a term that currently expires September 15, 2045, subject to
certain conditions contained in the Agreement. The Authority pays the sum
of $10 as annual rent to the City during the term of the Agreement. As of
June 30, 2017, the Authority was in compliance with the terms and
conditions of the Agreement.

B. Reporting Entity
The Authority meets the criteria set forth in generally accepted accounting
principles as promulgated by the Governmental Accounting Standards
Board (GASB) for inclusion as a component unit within the City's general
purpose financial statements based on the City's responsibility for the
appointment of the Authority members, and their approval of capital
programs and certain debt issuances and the Authority's annual operating
budget. As a component unit of the City, the Authority's financial
statements are discretely presented on the City's general purpose financial
statements. The accompanying financial statements present the financial
position of the Authority only. The Authority does not have any component
units and is not involved in any joint ventures.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Measurement Focus, Basis of Accounting, and Basis of Presentation
The accounting policies of the Authority conform to accounting principles
generally accepted in the United States of America applicable to state and
local governmental agencies, and as such, the Authority is accounted for as
a proprietary fund. The basic financial statements presented are reported
using the economic resources measurement focus and the accrual basis of
accounting. Under this method, revenues are recorded when earned and
expenses are recorded at the time the liabilities are incurred. The financial
statements are presented in accordance with GASB Statement No. 34, Basic
Financial Statements – and Management’s Discussion and Analysis – For
State and Local Governments, and related GASB pronouncements.

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