Fiscal Year 2023 MONROE COUNTY, FLORIDA
KEY WEST INTERNATIONAL AIRPORT
FINANCIAL STATEMENTS
As of and for the Year Ended September 30, 2023
And Report of Independent Auditor
KEY WEST INTERNATIONAL AIRPORT
MONROE COUNTY, FLORIDA
ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023
PAGE
INTRODUCTORY SECTION (Unaudited)
Transmittal Letter of the Clerk of the Circuit Courts & Comptroller A-1
List of Elected and Appointed Officials A-5
Organizational Chart A-6
FINANCIAL SECTION
Independent Auditor's Report B-1
Management's Discussion and Analysis (Unaudited) C-1
Basic Financial Statements:
Statement of Net Position D-1
Statement of Revenues, Expenses, and Changes in Net Position D-3
Statement of Cash Flows D-4
Notes to Financial Statements E-1
Required Supplementary Information (Unaudited)
Schedule of Airport's Proportionate Share of Net Pension Liability
Florida Retirement System Pension Plan F-1
Schedule of Airport's Contributions Florida Retirement System Pension Plan F-3
Schedule of Airport's Proportionate Share of Net Pension Liability
Health Insurance Subsidy Program F-5
Schedule of Airport's Contributions Health Insurance Subsidy Program F-7
Schedule of Changes in the Airport's Total OPEB Liability and Related Ratios F-9
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 G-1
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e°A Kevin Madok, CPA
�o ........ � Clerk of the Circuit Court& Comptroller— Monroe County, Florida
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March 28, 2024
The Honorable Holly Raschein
Mayor, Board of County Commissioners
Citizens of Monroe County, Florida
We are pleased to submit the Annual Financial Report for the Key West International Airport
Monroe County, Florida for the fiscal year (FY) ended September 30, 2023.
The Airport's Annual Financial Report is prepared by the Finance Department under the direction
of the Clerk of the Circuit Court & Comptroller (Clerk). Responsibility for both the accuracy of
the presented data and the completeness and fairness of the presentation, including all disclosures,
rests with the Clerk as Chief Financial Officer of Monroe County, Florida(the County). We assert
that, to the best of our knowledge and belief, this financial report is complete and reliable in all
material aspects. It is presented in a format designed to fairly present the financial position and
results of operations of the Airport as measured by the financial activity. All disclosures needed to
allow the reader to gain a comprehensive understanding of the Airport's financial activity have
been included.
The County has established a comprehensive internal control framework that is designed both to
protect the County's assets from loss,theft, or misuse and to compile sufficient reliable accounting
information for financial statement preparation in conformity with United States generally
accepted accounting principles (GAAP) established by the Government Accounting Standards
Board. Because the cost of internal controls should not outweigh their benefits, the objective is to
provide reasonable rather than absolute assurance that the financial statements will be free of
material misstatement.
Independent Audit
The County's auditor, RSM US LLP, has issued an unmodified("clean") opinion on the Airport's
financial statements for the year ended September 30, 2023. The report of the independent auditor
is located at the front of the Financial Section in this report.
Management Discussion and Analysis
GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management's Discussion and Analysis
(MD&A). The MD&A can be found immediately following the report of the independent auditor
in this report and fulfills this requirement. This Letter of Transmittal is designed to complement
the MD&A and should be read in conjunction with it.
KEY WEST MARATHON PLANTATION KEY
500 Whitehead Street 3117 Overseas Highway 88770 Overseas Highway
Key West, Florida 33040 Marathon, Florida 33050 Plantation Key, Florida 33070
Key West International Airport Profile
Basic Information
Located in the City of Key West in Monroe County, Florida, the Key West International Airport
has a unique history due to its compact size and strategic geographic location. Originally called
Meacham Field,Pan American Airways scheduled the Airport's first flight in 1928. During World
War 11, after the attack on Pearl Harbor,the Airport was used by the United States Army. In 1953,
the City of Key West granted Monroe County clear title to Meacham Field. Soon thereafter, the
Airport officially became the Key West International Airport.
The Airport sits on approximately 378 acres at an elevation of three feet. It has a single 5,076-foot
asphalt runway. The Airport's passenger terminal complex consists of two buildings, with the
original terminal, built in 1957, on the lower level serving arriving passengers and connecting to
the departure gates. The terminal was expanded in 2009 with a newer building as the upper level
that houses ticketing, check-in, and security checkpoints. Parking is available adjacent to the
landside terminal in a parking garage. The Airport provides for additional passenger services such
as car rental facilities and ground transportation.
Monroe County is the primary population area served by the Airport. Monroe County is the
southernmost county in the United States with only one road, U.S. 1, connecting some of the
islands known as the Florida Keys to the mainland. The City of Key West,the county seat and the
County's southernmost city, is approximately one hundred fifty miles southwest of Miami. The
Florida Keys are a popular domestic and international tourist destination. It offers the largest
national maritime sanctuary and the only living coral barrier reef in the continental United States.
The Airport falls under the governance of the Monroe County Board of County Commissioners
(Board). The Board is comprised of five members, all of whom are elected. The Board acts as a
local legislative and executive body, setting public policy, levying taxes, and funding projects,
programs, and the operations of county departments. The Board appoints a county administrator
to carry out the Board's policies and decisions. The Airport, a county department, is managed by
the Senior Director of Airports who reports directly to the County Administrator. Under the
direction of the elected Monroe County Clerk of Circuit Courts and Comptroller, the Monroe
County Finance Department maintains the accounting system for the Board's operations,including
the Airport's operations.
The Airport has a senior management team consisting of the executive director of airports, one
assistant director of airports and three deputy directors. The Airport is a financially self-sustaining
enterprise fund that generates revenues from user fees and lease revenues. The Airport's primary
function is to provide the infrastructure to facilitate air service for the residents and tourists of
Monroe County. As of September 30, 2023, the Airport has scheduled service from six domestic
carriers (American Airlines, Delta Airlines, United Airlines, Silver Airways, JetBlue, and
Allegiant) accommodating over 1.3 million passengers in the 12 months ending September 30,
2023. The Airport is also served by FedEx cargo carrier.
A-2
Buffet
According to Florida Statutes, Chapter 129, a budget shall be prepared, balanced, approved,
adopted, and executed each fiscal year (October 1 through September 30). The Board conducts
budget meetings on departmental budgets. The Airport prepares a tentative budget which is
presented to the Board for approval.
Formal budgetary integration is employed as a management control device during the year for all
fund types. During the year, the County's Office of Management and Budget acts on
intradepartmental cost center budget changes and interdepartmental cost center budget changes are
submitted to the Board as a Budget Resolution for approval.A budget amendment is required when
alterations are made to a fund's total revenues or expenditures. The Board may adopt the budget
amendment after public hearings are held.
Economic Condition and Outlook
Local Economy
Monroe County's economy is largely dependent on the tourism and hospitality industries. As a
result,reliable economic indicators include airline passenger enplanements/deplanements and bed
tax revenues. Total airline passengers decreased nearly 10.8% in the past year. However, the
Airport serviced more passengers in 2023 than it did in 2019, which was the Airport's best year
pre-pandemic.
Long-term Financial Planning
The Airport uses a commercial compensatory rate setting methodology. The cost of airlines
operating at the Airport is represented by cost per enplaned passenger or CPE. The CPE is
calculated as total airline revenues divided by total enplaned passengers. The Airport's CPE for
the past five years was:
2023 $11.65 (estimated)
2022 $ 8.80
2021 $ 8.39
2020 $13.32
2019 $ 9.28
The numbers reflect an average across all carriers. Individual airlines may have a CPE that is
higher or lower than the average based on their individual operating models.
The Airport negotiated with the airlines for a new five-year airline operating agreement, effective
October 1, 2021. The new lease agreement includes provisions for the airlines' use and occupancy
of facilities at the Airport. The Airport is currently under negotiation with the airlines for a second
five-year agreement to begin after the current agreement ends in 2026.
A-3
The Airport is currently constructing a new second-level Concourse A terminal building. The
primary goal of Concourse A is to enhance passenger experience. Construction began in 2022,
with a projected completion in 2026. Concourse A will be approximately 49,000 square feet and
include:
• Glass-enclosed passenger loading bridges;
• Expansion of additional baggage make tip areas and devices;
• Airline ramp/office spaces;
• Ramp equipment storage areas;
• Additional baggage claim device;
• Expanded rent-a-car facility and baggage service offices.
The Concourse A Terminal and Improvements Program also includes improvements to the existing
landside terminal including expanded security checkpoint with an area to support up to four lanes
and added support spaces; and a new extended passenger pedestrian bridge for public access to
airport administration offices.
Relevant Financial Policies
................
The Board strives to adhere to sound financial management principles to ensure that sufficient
funds are available to maintain a stable financial base for the Airport. To achieve a stable financial
base,the County budgets to maintain a net position sufficient to fund the Airport's cash flow needs,
and to provide financial reserves for unanticipated expenditures or unexpected revenue shortfalls,
In accordance with Section 218.415, Florida Statutes, the County's investment policy, approved
in January 2019, establishes investment objectives, maturity and liquidation requirements,
portfolio composition, risk and diversification requirements, and authorized investments. The
primary objective of investment activity is the safety of the principal of funds and to maintain
sufficient liquidity to meet anticipated cash flow needs. A secondary objective is to obtain
competitive returns on the investment of the County's surplus funds.
We would like to express Our appreciation to the entire Finance Department, the Board of County
Commissioners and Airport staff for their assistance in the preparation of this report.
We also extend our thanks and appreciation to our independent auditor, RSM US LLP, for its
outstanding efforts, advice, and assistance,
Sincerely,
- -—------------- .......
Kevin Madok, CPA Parri-Radloff, (.PA
Clerk of the Circuit Courts & Comptroller Monroe County
Chief Financial Officer Finance Director
A-4
MONROE COUNTY, FLORIDA
BOARD OF COUNTY COMMISSIONERS
HOLLY RASCHEIN
DISTRICT 5
CRAIG CATES MICHELLE LINCOLN
DISTRICT 1 DISTRICT 2
JIM SCHOLL DAVID RICE
DISTRICT 3 DISTRICT 4
KEVIN WILSON, P.E.
ACTING COUNTY ADMINISTRATOR
KEVIN MADOK, CPA
CLERK OF THE CIRCUIT COURT AND
COMPTROLLER
A-5
Key West International Airport
Organization Chart
Public
Board of
County Commissioners
Acting County
Administrator
Kevin Wilson, P.E.
Executive Director of
Airports
Richard Strickland
Assistant Director of Deputy Director, Deputy Director, Deputy Director,Airport
Airports Finance&Admin Operations&Security Facilities&Construction
Erick D'Leon Beth Leto Luis Garay Tyler Bethel
A-6
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Independent Auditor's Report
To the Clerk Ex Officio, Mayor
Board of County Commissioners
Monroe County, Florida
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of the Key West International Airport of Monroe County, Florida
(the Airport), an enterprise fund of Monroe County, Florida (the County), as of and for the year ended
September 30, 2023, and the related notes to the financial statements, as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material
respects, the financial position of the Airport, an enterprise fund of the County, as of September 30, 2023,
and the changes in its financial position and its cash flows for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit
of the Financial Statements section of our report. We are required to be independent of the County, and
to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to
our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the Airport, an enterprise fund of the
County, and do not purport to, and do not, present fairly the financial position of the County, as of
September 30, 2023, the changes in its financial position, or, where applicable, its cash flows for the year
then ended in accordance with accounting principles generally accepted in the United States of America.
Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for 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.
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B-1
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Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance
and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government
Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the financial
statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
• Obtain an understanding of internal control relevant to the audit 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 Airport's internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings and certain internal control-related
matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis, the schedule of the Airport's proportionate share of the net pension liability for
the Florida Retirement System Pension Plan (FRS)and Health Insurance Subsidy Pension Plan (HIS),
the schedule of the Airport's contributions for the FRS and HIS plans, and the schedule of the Airport's
changes in total OPEB liability and related ratios, as listed in the table of contents, be presented to
supplement the financial statements. Such information is the responsibility of management and, although
not a part of the financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the financial statements in an
appropriate operational, economic or historical context. We have applied certain limited procedures to the
required supplementary information in accordance with GAAS, 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 financial statements and other knowledge
we obtained during our audit of the 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 Information
Management is responsible for the other information included in the financial statements. The other
information comprises the introductory section but does not include the financial statements and our
auditor's report thereon. Our opinion on the financial statements does not cover the other information, and
we do not express an opinion or any form of assurance thereon.
B-2
In connection with our audit of the financial statements, our responsibility is to read the other information
and consider whether a material inconsistency exists between the other information and the financial
statements, or the other information otherwise appears to be materially misstated. If, based on the work
performed, we conclude that an uncorrected material misstatement of the other information exists, we are
required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 28,
2024 on our consideration of the Airport's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements and other
matters. The purpose of that report is solely 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
effectiveness of the Airport's 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
Airport's internal control over financial reporting and compliance.
Fort Lauderdale, Florida
March 28, 2024
B-3
Management's Discussion and Analysis
Airport Management offers readers this narrative overview and analysis of the financial activities of the
Key West International Airport(Airport) for the fiscal year ended September 30, 2023.
We encourage readers to consider this information in conjunction with additional information furnished
in the letter of transmittal in the Introductory Section of this report and the audited basic financial
statements for an overall view of the Airport's activities.
Financial Highlights and Summary
The Airport's financial highlights for the fiscal year are as follows:
• For the first time in the history of the County,the Airport completed negotiations and entered into
an Airline Operating Agreement with all six commercial service airlines serving the airport which
took effect in FY 2022.
• During FY 2023, total passengers at the Airport decreased 10.8% from the prior fiscal year.
• Allegiant Airlines and Silver Airways continued to experience passenger volume increases.
• Although total passengers decreased during FY 2023, operating revenue increased over 13.9%
over FY 2022. Revenue from the airlines increased 22% and revenue from parking and ground
transportation also increased. Parking revenue totaled $683,133 in FY 2023 versus $632,160 in
FY 2022, an increase of 8.1% and ground transportation totaled $541,039 in FY 2023 versus
$526,323 in FY 2022, an increase of 2.8%.
Overview of the Financial Statements. The discussion and analysis are intended to serve as an
introduction to the Airport's financial statements. The Airport's financial statements are comprised of the
basic financial statements, which include all revenue and expenses and required supplementary
information, which reflects changes in employer's share of net pension liability and employer's
contributions, along with the schedule of changes in the Airport's other post-employment benefits(OPEB)
liability and related ratios.
Basic Financial Statements. The Basic Financial Statements are made up of four components: (1)
Statement of Net Position; (2) Statement of Revenues, Expenses, and Changes in Net Position; (3)
Statement of Cash Flows; and (4) Notes to Financial Statements. These are designed to provide readers
with a broad overview of the Airport's finances, in a manner similar to a private sector business. The
financial statements are prepared in accordance with U.S. generally accepted accounting principles as
promulgated by the Government Accounting Standards Board(GASB).
Required Supplementary Information. Required supplementary information consists of the Schedule of
the Airport's Proportionate Share of Net Pension Liability for the Florida Retirement System's (FRS)
Pension Plan and the Health Insurance Subsidy (HIS) programs; the Schedule of the Airport's
Contributions for FRS' Pension Plan and HIS programs, and the Schedule of Changes in the Airport's
total OPEB liability and related ratios.
C-1
Airport's Net Position (in thousands)
The following is a condensed summary of Net Position compared to the prior year.
Suniniary of Net Position
September 30. 2023 and 2022
(000,S)
2023 2022
Current and Other Assets 98,763 S 78,975
Capital Assets 150,507 111.461
Total Assets 249,270 190,436
Defened Outflows of Resources 1,490 1,355
OnTent Liabilities 6.465 1,840
Long-Terin Liabilities 48,793 47A57
Total Liabilities 55.258 49.297
Defened Inflows of Resources 23A05 8,296
Net Position:
Net Investment ui Capital Assets 124.970 109.597
Restricted for passenger Facility Charges 3,878 3,463
Unrestricted 43,249 21.139
Total Net Position 172.097 $ 134.199
In FY 2023, activities for the Airport increased total assets by $58.83 million, increased deferred outflows
of resources by almost$.14 million, increased total liabilities by $5.96 million, increased deferred inflows
of resources by $15.1 million and increased total net position by $37.9 million as compared to September
30, 2022.
Net investment in capital assets is the largest portion of net position. This represents capital assets net of
accumulated depreciation and outstanding debt used to acquire assets. The net investment in capital asset
balance increased $15.4 million, or 14%, in comparison to the prior year. This increase is primarily due
to the on-going construction of the Airport's new second-level Concourse A terminal building.
The restricted net position stayed consistent with last fiscal year's restricted net position. This balance
represents assets that are subject to external restrictions imposed by creditors,through bond covenants,by
grantors,or by law on how they are used.In FY 2023 and FY 2022,the Airport's net position was restricted
for Passenger Facility Charges (PFC).
The remaining component of net position is unrestricted net position. Unrestricted net position may be
used to meet the Airport's ongoing obligations. The Airport's unrestricted net position balance increased
$22.1 million, or 104.6% in comparison to the prior year. This increase is primarily due to the $15.5
million increase in leases receivable recognized by the Airport from the prior fiscal year.Leases receivable
represents the present value of the lease receipts the Airport is expecting over the term of its lease
agreements with its tenants.
C-2
Airport Changes in Net Position (in thousands)
The Statement of Revenues, Expenses, and Changes in Net Position separately describe operating
revenues and operating expenses by logical categories; non-operating revenues made up of interest, PFC
reimbursements; operating grants, and capital contributions. The following table summarizes the changes
in net position for the current and previous fiscal years.
The Airport's total operating and non-operating revenues including capital contributions of almost$31.5
million exceeded total operating and non-operating expenses resulting in an increase in net position of
$37.9 million. A summary of revenues and expenses follows:
2023 2022
Operating Revenues 14,699 S 1.2,910
Operating Expenses 29„019 20„694
Lass from Operations (14„320) (7,784)
Non-operating Revenues and Expenses:
Operating Grants 4,895 16,844
Im,estment Income 3,185 137
Other Revenue 13,132 (11)
Total non-operating revenues and expenses 21,212 16,970
Net income before capital contributions 6,892 9,1.86
and transfers
Total Capital Contributions and Transfers 31,006 8,895
Change iti Net Position 37,899 18„081.
Net Position,October 1 134,199 116,118
Net Position,September 30 S 172,097 $ 134„199
Summary of Revenues and Expense Analysis
In FY 2023, operating revenues increased in comparison to the prior fiscal year. During the fiscal year,
the Airport's operating revenue increased $1.8 million or 13.9% from FY 2022. Specifically, from FY
2022 to FY 2023, the Airport's operating revenue generated from Airline and other rents increased over
$1 million. In addition, in FY 2023, the Airport began collecting customer facility charges (CFC) which
generated almost $.8 million. CFC fees are imposed on those who rent cars from the Airport's car rental
companies to help pay for the operating cost of rental car facilities.
In total, operating revenues in FY 2023 amounted to almost $14.7 million or 21.5% of all business-type
activities. Capital grants increased almost$21 million in FY 2023 while operating grants decreased $11.9
million.
Total expenses (excluding transfers to other funds) increased 40.20% from FY 2022 to FY 2023. The
Airport's salaries, wages, and benefits increased 33.33%. This increase is the FRS' pension assets
decreasing significantly during FY 2023 which, in turn, increased the related pension liability and
associated pension expense. Other expense categories also increased during FY 2023 from the previous
fiscal year due to the continued uptick in the Airport's operations.
The following charts and tables on pages C-5 and C-6 summarize Net Revenues and Expenses
respectively, for FY 2023.
C-3
Operating Revenue for Fiscal Year 2023
Airline Security, Terminal Rents, $480,349 Other Rents, $3,485,128
$1,200,631 ..."'...
Concessions, $1,245,338
Landing Fees, $3,292,771 �����llllllllllll�����
"" Parking, $683,133
Car Rentals, $13,766
Ground Transportation,
" $541,039
Customer Facility Charges,
$792,056
® Other Fees,
$107,714
Miscellaneous $9 409
Intergovernmental
Airline Rents, $2,739,619 Revenue, $107,849
FY FY FY 2023 Increase/ %
2023 2022 %of Total (Decrease) Change
Operating Revenues
Airline Rents S 2,739,619 S 2,016,405 18.6% $ 723,214 35.9%
Landing Fees 3,292,771 2,821,825 22.4% 470,946 16.7%
Airline Security 1,200,631 1,083,602 8.2% 117,029 10.8%
Terminal Rents 480,349 701,506 3.3% (221,157) -31.5%
Other Rents 3,485,128 627,890 23.7% 2,857,238 455.1%
Concessions 11245,338 3,593,071 8.5% (2,347,733) -65.3%
Parking 683,133 632,160 4.6% 50,973 8.1%
Car Rental 13,766 619,031 0.1% (605,265) -97.8%
Ground Transportation 541,039 526,323 3.7% 14,716 2.8%
Customer Facility Charges 792,056 - 5.4% 792,056 N/A
Other Fees 107,714 120,589 0.7% (12,875) -10.7%
Intergovernmental Revenue 107,849 108,172 0.7% (323) -0.3%
Miscellaneous 9,409 59,864 0.1% (50,455) -84.3%
Total Operating Revenues S 14,698,802 S 12,910,438 100.0% $ 1,788,364 13.9%
C-4
Operating Expenses for Fiscal Year 2023
Capital Outlay, Depreciation Expense,
$3,751,871 $3,866,036
Personnel Services,
Oher Expenses,
$5,959,621
$471,242 .
Promotional
Activities
$121 619
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Risk Management, � �1
$318,554
Repairs and,,
Maintenanc
e,
$801,202
Contractual Services,
$12,858,067
Utilities, $871,242
FY FY FY 2023 Increase/ %
2023 2022 %of Total (Decrease) Change
Operating Expenses
Salaries &Wages S 3,496,815 $ 3,016,174 12.1% S 480,641 15.9%
Fringe Benefits 2,462,806 1,454,915 8.5% 1,007,891 69.3%
Contractual Services 12,858,067 4,544,279 44.3% 8,313,788 183.0%
Travel and Per Diem 76,759 33,823 0.3% 42,936 126.9%
Utilities 871,242 756,736 3.0% 114,506 15.1%
Rentals and Leases 18,287 22,871 0.1% (4,584) -20.0%
Repairs and Maintenance 801,202 696,854 2.8% 104,348 15.0%
Risk Management 318,554 179,770 1.1% 138,784 77.2%
Printing Services 437 485 0.0% (48) -9.9%
Promotional Activities 121,619 100,683 0.4% 20,936 20.8%
Miscellaneous Expenses 13,076 12,568 0.0% 508 4.0%
Other Supplies 362,683 334,937 1.2% 27,746 8.3%
Capital Outlay 3,751,871 5,623,241 12.9% (1,871,370) -33.3%
Depreciation Expense 3,866,036 3,916,981 13.3% (50,945) -1.3%
Total Operating Expenses S 29,019,454 S 20,694,317 100.0% S 8,325,137 40.2%
C-5
Passenger Facility Charges
In 1992, the Board passed Resolution 357-1992 to allow the Airport to participate in the FAA's PFC
program. The purpose for establishing and implementing the PFC program was to ensure that the Airport's
passengers contribute to a greater degree toward the continued development of the Airport's facilities.
Initially, the FAA allowed the Airport to impose a PFC of $3.00 per eligible enplaned passenger but
increased this amount to $4.50 per eligible enplaned passenger in 2003.
The FAA oversees each public airport's PFC program by requiring each airport to apply to the FAA for
authority to impose a PFC for use on eligible projects. Opened and approved PFC-funded projects in FY
2023 included:
• $2.8 million for the noise insulation program projects;
• $2.6 million to a new FBO access road;
• $0.41 million to replace the airport beacon; and
• $2.7 million to rehabilitate the Customs Terminal.
Capital Assets
Capital assets, net of accumulated depreciation, increased by almost $39 million. Major capital outlay
spending in FY 2023 included the following capital projects which continue to be classified as
construction-in-progress as of September 30, 2023:
• Concourse A Terminal Expansion $39,011,772
• Taxi Rehab Taxiway A 10,369,949
• Fixed Base Operator(FBO)Parking Lot Access Road Design 4,442,038
In addition, in FY 23, the Airport used insurance proceeds to repair the Engineered Materials Arresting
System (EMAS) that was damaged during Hurricane Ian. The repairs cost$8.15 million.
The following table reflects a summary of the Airport's capital assets for FY 2023 and FY 2022.
Capital Assets
September 30, 2023 and 2022
FY 2023 FY 2022
Land $ 10,924,137 $ 1,645,908
Construction in Progress 58,605,176 25,400,237
Infrastructure 57,482,046 57,482,046
Buildings 61,637,207 61,587,587
Equipment 4,760,776 4,393,615
Right-to-Use Leased Equipment 10,263 11,308
Subtotal 193,419,605 150,520,701
Less: Accumulated
Depreciation/Amortization (42,912,492) (39,059,362)
Total Capital Assets $ 150,507,113 $ 111,461,339
Additional information on the Airport's capital assets can be found in Note 5 to the financial statements
page E-12.
C-6
Debt Administration
In September 2022, the Airport issued its Series 2022 Alternative Minimum Tax (AMT) Revenue Bonds
totaling $42,459,929, including unamortized original issue premium to be used to finance and re-finance
the costs associated with the Airport's Concourse A expansion project. The Airport pledged eligible PFC
revenue and its available net revenues for repaying this debt. In addition, the Airport was issued a non-
revolving line-of-credit taxable revenue note not to exceed $10 million to be used to acquire, construct,
and equip various capital improvements at the Airport in connection with the terminal expansion project.
At September 30'', the Airport had not drawn any funds from the line-of-credit. The Airport pledged a
portion of its future Airport Improvement Program (AIP) Entitlement Grants for fiscal years 2023 and
2024 and all AIP entitlement funds for fiscal years 2026 through 2028 along with the Federal fiscal year
2026 Bipartisan Infrastructure Law(BIL)grants and any BIL,discretionary grants the Airport may receive
between fiscal years 2024 through 2028 for the repayment of the revenue bonds.
Further details about long-term debt are available in Note 10 to the financial statements page E-27.
Airport Activities
The total passenger count for FY 2023 was 1,308,251, a decrease of 10.8% from the prior fiscal year.
The following chart exhibits the total passenger market share for the six commercial airlines operating at
the Airport during FY 2023.
FY 2023 Enplanements & Deplanemen1s
��11111111�1��1�111111���1if� ° Alin%nt
JetBlue
2%
United Airlines , .
9%
"� American Airlines
47%
Delt Airlines
Silver Airways
8%
Airlines serving the Airport with the designations include:
• American Airlines: Miami (MIA),Philadelphia(PHL), Charlotte(CLT), Dallas (DFW), Chicago
(ORD), New York(LGA), Washington D.C. (DCA);
• Delta Airlines: Atlanta(ATL) and New York (LGA);
• Allegiant: Tampa (TPA), Asheville (AVL), Indianapolis (IND), Sanford (SFB), Cincinnati
(CVG), and Pittsburgh (PIT);
C-7
• United Airlines: Houston (IAH), Newark (EWR), Washington-Dulles (IAD), and Chicago
(ORD);
• Silver Airways: Fort Lauderdale (FLL), Orlando (MCO), and Tampa(TPA); and
• JetBlue: Boston (BOS).
Airline Rates and Charges
The Airport negotiated a new airline use agreement with participating airlines (referred to as Signatory
Airlines), with key terms of the agreement approved by the Board in the latter half of 2021. The
Agreements commenced on October 1, 2021, with a five-year term, expiring on September 30, 2026.
Rates for fees paid by airlines are adjusted annually in accordance with the methodology set forth in the
agreement. After proposing a schedule of rates for fees and charges for the upcoming fiscal year, the
Airport meets with the Signatory Airlines to agree upon a Final Statement of Rates. The Final Statement
of Rates is calculated based on the Airport's budget for the upcoming fiscal year. No later than May 3 1"
of each year,the Airport uses the agreed-upon rate and fee schedule to recalculate the rates for the previous
fiscal year using actual financial data in order to provide the airlines with a final settlement amount either
due to the Airport or the Airline, if any.
Landing fees are calculated based upon the total maximum weight of passenger and cargo aircraft per
1,000 pounds times the landing fee rate. Terminal rents are calculated using a commercial compensatory
method (i.e., rentable square foot divisor). Charges for the leasing of all terminal space will be assessed
on a square-footage basis. In FY 2023, the Signatory Airlines paid the Airport over $7.2 million.
Economic Factors and Budget Highlights
The following factors were considered for the Airport's budget preparation:
• The total adopted FY 2024 operating budget of almost 200% from the previous fiscal year due to
construction of the Airport's new second-level Concourse A terminal building.
• Increases in personnel costs were the result of increased staffing as well as annual cost-of-living
and merit adjustments.
• Budgeted operating expenses remained relatively flat and are on target in FY 2024.
Requests 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 information should be addressed to the Finance Director, Monroe County Clerk of the
Courts and Comptroller, 500 Whitehead Street, Key West, Florida 33040.
C-8
KEY WEST INTERNATIONAL AIRPORT
MONROE COUNTY, FLORIDA
STATEMENT OF NET POSITION
SEPTEMBER 30, 2023
ASSETS
Current Assets:
Cash and Cash Equivalents $ 15,510,168
1 nvestments 25,444,473
Accounts Receivable, Net 1,614,919
Leases Receivable 4,032,383
Due from Other Governmental Units 6,086,602
Due from Monroe County Sheriff 9,906
Interest Receivable 166,429
Total Current Unrestricted Assets 52,864,880
Noncurrent Assets:
Restricted Cash and Cash Equivalents 26,172,037
Restricted Accounts Receivable 409,488
Leases Receivable Noncurrent 19,317,091
Land and Other Nondepreciable Assets 69,529,313
Capital Assets Depreciated, Net 80,969,760
Right-To-Use Leased Assets, Net of Amortization 8,040
Total Noncurrent Assets 196,405,729
Total Assets 249,270,609
DEFERRED OUTFLOWS OF RESOURCES
Related to Pensions 1,373,523
Related to OPEB 116,800
Total Deferred Outflows of Resources 1,490,323
LIABILITIES
Current Liabilities:
Accounts Payable 4,779,674
Retainage Payable 1,195,159
Accrued Wages and Benefits Payable 197,443
Due to Other Governmental Units 33,695
Accrued Comp. Absences Payable 118,548
Unearned Revenues 138,251
Lease Liabilities 1,990
Other Current Liabilities 19
Total Current Liabilities 6,464,779
The notes to the financial statements are an integral part of this statement.
D-1
KEY WEST INTERNATIONAL AIRPORT
MONROE COUNTY, FLORIDA
STATEMENT OF NET POSITION (CONTINUED)
SEPTEMBER 30, 2023
Noncurrent Liabilities:
Accrued Comp. Absences Payable $ 474,192
Lease Liabilities 6,157
Revenue Bonds Payable 42,459,929
Total OPEB Liability 782,000
Net Pension Liability 5,071,098
Total Noncurrent Liabilities 48,793,376
Total Liabilities 55,258,155
DEFERRED INFLOWS OF RESOURCES
Related to Leases 23,066,256
Related to Pensions 286,716
Related to OPEB 52,400
Total Deferred Inflows of Resources 23,405,372
NET POSITION
Net Investment in Capital Assets 124,970,056
Restricted for:
Passenger Facility Charges 3,877,575
Unrestricted 43,249,774
Total Net Position $ 172,097,405
The notes to the financial statements are an integral part of this statement.
D-2
KEY WEST INTERNATIONAL AIRPORT
MONROE COUNTY,FLORIDA
STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30,2023
Operating Revenues:
Airline Rents $ 2,739,619
Landing Fees 3,292,771
Airline Security 1,200,631
Terminal Rents 480,349
Other Rents 3,485,128
Concessions 1,245,338
Parking 683,133
Car Rental 13,766
Ground Transportation 541,039
Customer Facility Charges 792,056
Other Fees 107,714
Intergovernmental Revenue 107,849
Miscellaneous 9,409
Total Operating Revenues 14,698,802
Operating Expenses:
Personnel Services 5,959,621
Contractual Services 12,858,067
Travel and Per Diem 76,759
Utilities 871,242
Rentals and Leases 18,287
Repairs and Maintenance 801,202
Risk Management 318,554
Printing Services 437
Promotional Activities 121,619
Miscellaneous Expenses 13,076
Other Supplies 362,683
Capital Outlay 3,751,871
Depreciation and Amortization 3,866,036
Total Operating Expenses 29,019,454
Operating Loss (14,320,652)
Nonoperating Revenues(Expenses):
CARES,CRSSA,ARPA Federal Stimulus Funds 1,139,206
Operating Grants 3,756,288
Grants and Donations-Other Sources 9,278,229
Investment Income 3,185,381
Insurance Recoveries 5,010,163
Debt Service Costs (1,151,221)
Loss on Disposition of Assets (4,867)
Total Non-Operating Revenues(Expenses) 21,213,179
Net Income Before Capital Contributions
and Transfers 6,892,527
Total Capital Contributions and Transfers:
Capital Contributions 28,909,314
Capital Contributions-Passenger Facility Charges 2,573,832
Transfers to Other Funds (477,280)
Total Capital Contributions and Transfers 31,005,866
Change in Net Position 37,898,393
Net Position-October 1 134,199,012
Net Position-October 1,restated 134,199,012
Net Position-September 30 $ 172,097,405
The notes to the financial statements are an integral part of this statement.
D-3
KEY WEST INTERNATIONAL AIRPORT
MONROE COUNTY, FLORIDA
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 2023
Operating Activities:
Cash Received for Services $ 13,378,282
Cash Received from Insurance Recoveries 5,010,163
Cash Payments to Suppliers for Goods and Services (14,728,244)
Cash Payments for Employee Services (4,878,248)
Cash Received from(Paid to)Other Sources 4,869,536
Other Operating Revenue 12,880
Net Cash Used In
Operating Activities 3,664,369
Noncapital Financing Activities:
Grants Received 4,895,494
Transfers to Other Funds (477,280)
Net Cash Provided by Noncapital
Financing Activities 4,418,214
Capital and Related Financing Activities:
Proceeds from Capital Grants 31,483,146
Acquisition of Capital Assets (19,244,439)
Purchase and Construction of Capital Assets (15,545,225)
Net Cash Provided By Capital and
Related Financing Activities (31306,518)
Investing Activities:
Investment Income (Losses) 3,185,381
Proceeds from Sales and Maturities of Investments 18,889,528
Purchase of Investment Securities (31,287,121)
Net Cash Used in Investing Activities (9,212,212)
Net Increase(Decrease) in Cash and
Cash Equivalents (4,436,147)
Cash and Cash Equivalents:
October 1 46,118,352
September30 $ 41,682,205
The notes to the financial statements are an integral part of this statement.
D-4
KEY WEST INTERNATIONAL AIRPORT
MONROE COUNTY, FLORIDA
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED SEPTEMBER 30, 2023
Reconciliation of Operating Loss
to Net Cash Used in Operating
Activities:
Operating Loss $ (14,320,652)
Adjustments to Reconcile Operating Income (Loss)
to Net Cash Provided by(Used in)Operating
Activities:
Depreciation and Amortization 3,866,036
Nonoperating Income 5,010,163
Change in Assets, Liabilities, and Deferrals:
(Increase)Decrease in Accounts Receivable (1,084,138)
(Increase) Decrease in Lease Receivable (15,495,709)
(Increase)Decrease in Due from Other Funds 6,373
(Increase)Decrease in Due from Other Gov't Units 4,737,353
(Increase)Decrease in Due from Constitutional Ofcrs 113,514
(Increase) Decrease in Interest Receivable (104,378)
Increase (Decrease)in Accounts Payable 3,505,449
Increase (Decrease)in Retainage Payable 970,548
Increase (Decrease)in Accrued Wages/Benefits (9,872)
Increase (Decrease)in Other Current Liabilities (5)
Increase (Decrease)in Due to Other Gov't Units 12,296
Increase (Decrease)in Comp.Absences Payable 110,706
Increase (Decrease)in Deposits in Escrow (8,000)
Increase (Decrease)in Leases Payable (2,439)
Increase (Decrease)in Unearned Revenue 132,384
Increase (Decrease)in OPEB Liability 52,000
Increase (Decrease)in Pension Liability 1,198,293
Increase (Decrease)in Deferred Inflows Leases 15,244,201
Increase (Decrease)in Deferred Outflows (135,306)
Increase (Decrease)in Deferred Inflows (134,448)
Total Adjustments 17,985,021
Net Cash Used in
Operating Activities $ 3,664,369
Noncash Investing, Capital,and Financing Activities:
Loss on Disposition of Assets $ (4,867)
Noncash Investing, Capital, and Financing Activities: $ (4,867)
Cash Reconciliation:
Unrestricted $ 15,510,168
Restricted 26,172,037
Total $ 41,682,205
The notes to the financial statements are an integral part of this statement.
D-5
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following summary of the more significant accounting policies of the Key West International Airport
of Monroe County, Florida (Airport) is presented to assist the reader in interpreting these financial
statements and should be viewed as an integral part of this report.
Reporting Entity:
Monroe County,Florida(County)is a Non-Charter County established as provided by Article VIII Section
1 of the Florida Constitution and Chapter 125, Florida Statutes. The primary government of the County is
comprised of the Board of County Commissioners (Board) and five "constitutional officers": Clerk of the
Circuit Court & Comptroller (Clerk), Property Appraiser, Sheriff, Supervisor of Elections, and Tax
Collector.
The Board,composed of five members, acts as a local legislative and executive body,setting public policy,
levying taxes, and funding projects, programs, and the operations of county departments. The Board
appoints a county administrator to carry out the Board's policies and decisions. The Airport, a county
department, is managed by the Senior Director of Airports who reports directly to the county
administrator. Under the direction of the Clerk, the Monroe County Finance Department maintains the
accounting system for the Board's operations, including the Airport's operations.
Entity status for financial reporting purposes is governed by Statement No. 14, as amended. The Airport
is not operationally autonomous from the Board. Therefore, under GASB guidelines, the Airport is
reported as a part of Board's financial operations. The financial statements of the Board, when combined
with its blended component units and the constitutional officers, constitute the "primary government" of
Monroe County according to generally accepted accounting principles (GAAP)for governmental entities.
The primary government constitutes the complete GAAP basis financial reporting entity of the County,
presented in the Monroe County Florida Annual Comprehensive Financial Report.
The financial statements present only the Airport, an enterprise fund of the County, and do not purport to,
and do not,present fairly the financial position of the County as of September 30, 2023, the changes in its
financial position, or where applicable, its cash flows for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Measurement Focus and Basis of Accounting:
Basis of accounting refers to when revenues, expenditures, or expenses are recognized and reported in the
financial statements. Basis of accounting relates to timing of the measurements made, regardless of the
measurement focus applied. The Airport's basic financial statements are reported using the economic
resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned
and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
Grants and similar items are recognized as revenue as soon as all the eligibility requirements imposed by
the grantor have been met.
E-1
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The Airport operates as an enterprise fund. The Airport distinguishes operating revenues and expenses
from nonoperating items in its statements of revenues, expenses, and changes in net position. The Airport
defines operating revenues and expenses as revenues earned and expenses incurred from aviation
operations and services provided to customers and tenants. Nonoperating revenues and expenses include
investment income, grants, donations and settlements.
Cash and Cash Equivalents:
The Airport's cash balances are pooled with other cash balances of other Board's funds for investment
purposes. Earnings from such investments are allocated to the respective funds based on applicable cash
participation by each fund. The investment pools are managed such that all participating funds have the
ability to deposit and withdraw cash as if they were demand deposit accounts. Therefore, all balances
representing participants' equity in the investment pools are classified as cash equivalents for purposes of
these statements. Investments held separately from the pools, and which are highly liquid (including
restricted assets)with an original or remaining maturity of 90 days or less,are considered cash equivalents.
Investments:
Section 218.415, Florida Statutes, authorizes local governments to invest its funds pursuant to a written
investment plan. The Board's written plan allows investment of surplus funds in the following:
1) U.S. Treasury & Government Guaranteed — U.S. Treasury obligations, and obligations the
principal and interest of which are backed or guaranteed by the full faith and credit of the U.S.
Government.
2) Federal Agency/Government Sponsored Enterprise (GSE) — Debt obligations, participations or
other instruments issued or fully guaranteed by any U.S. Federal agency, instrumentality or GSE.
3) Supranationals — U.S. dollar denominated debt obligations of a multilateral organization of
governments where the U.S. is a shareholder and voting member.
4) Corporates —U.S. dollar denominated corporate notes, bonds, or other debt obligations issued or
guaranteed by a domestic corporation, financial institution, non-profit, or other entity.
5) Municipals — Obligations, including both taxable and tax-exempt, issued or guaranteed by any
State, territory, or possession of the U.S., political subdivision, public corporation, authority,
agency board, instrumentality or other unit of local government of any state or territory.
6) Agency Mortgage Backed Securities (MBS) — MBS are backed by residential, multi-family or
commercial mortgages, that are issued or fully guaranteed as to principal and interest by a U.S.
Federal agency or government sponsored enterprise, including but not limited to pass-throughs,
collateralized mortgage obligations (CMOs) and real estate mortgage investment conduits.
7) Asset-Backed Securities —Asset-backed securities (ABS) whose underlying collateral consists of
loans, leases, or receivables, including but not limited to auto loans/leases, credit card receivables,
student loans, equipment loans/leases, or home-equity loans.
E-2
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
8) Non-Negotiable Certificate of Deposit and Savings Accounts —Non-negotiable interest-bearing
time certificates of deposit, or savings accounts in banks organized under the laws of the State of
Florida or in national banks organized under the laws of the United States and doing business in
Florida, provided that any such deposits are secured by the Florida Security for Public Deposits
Act, Chapter 280, Florida Statutes.
9) Commercial Paper — U.S. dollar denominated commercial paper issued or guaranteed by a
domestic corporation, company, financial institution, trust or other entity, only unsecured debt
permitted.
10) Bankers' Acceptances —Bankers' acceptances issued, drawn on, or guaranteed by a U.S. bank or
U.S. branch of a foreign bank.
11) Repurchase Agreements — Repurchase agreements that meet specific requirements listed in
Monroe County Resolution 032-2019.
12) Money Market Funds — Shares in open-end and no-load money market mutual funds, provided
such funds are registered under the Investment Company Act of 1940 and operate in accordance
with Rule 2a-7.
13) Intergovernmental Investment Pools — Intergovernmental Investment Pools that are authorized
pursuant to the Florida Interlocal Cooperation Act, as provided in Section 163.01,Florida Statutes.
All investments are stated at fair value or at amortized cost.
Use of Estimates:
The presentation of financial statements in conformity with GAAP, as applicable to governmental units,
requires management to make use of estimates that affect the reported amounts in the financial statements.
Actual results could differ from estimates, particularly given the significant social and economic
disruptions and uncertainties associated with the ongoing coronavirus pandemic and control responses.
Accounts Receivable:
Amounts due from private individuals, organizations, or other governments, which pertain to charges for
services rendered by the Airport, are reported as accounts receivable. Receivables are reviewed
periodically to establish or update the provisions for uncollectible amounts. These provisions are estimated
based on an analysis of the age of the various accounts.
E-3
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Leases Receivable:
The Airport's lease receivable is measured at the present value of lease payments expected to be received
during the lease term. Under the lease agreement, the Airport may receive variable lease payments that
are dependent upon the lessee's revenue. The variable payments are recorded as an inflow of resources in
the period the payment is received.
A deferred inflow of resources is recorded for the lease. The deferred inflow of resources is recorded at
the initiation of the lease in an amount equal to the initial recording of the lease receivable. The deferred
inflow of resources is amortized on a straight-line basis over the term of the lease.
Interfund Balances and Activity:
Relationship with County Departments—The Airport reimburses the County's General Fund for its portion
of various transactions. Examples of these transactions include providing services, constructing assets,
matching grants, or servicing debt.
For the year ended September 30, 2023, the Airport recorded an expense in the amount of approximately
$477,280 for such transactions.
As of September 30, 2023,the Airport does not have any pending payments due to the County for various
services. For this same period, the Airport has no pending receivables due from the County.
Capital Assets:
Capital assets of the Airport include property, buildings, equipment, and infrastructure assets (e.g.
runways, terminal buildings, aprons, lighting systems). Constructed or purchased assets are recorded at
historical or estimated historical cost at the time of purchase. Donated assets are recorded at estimated
acquisition value at the date of donation.
The Board requires the Airportto maintain a$1,000 threshold for additions to equipmentwith an estimated
useful life in excess of two years. Buildings are capitalized when the value is $15,000 or greater. Public
domain and infrastructure assets represent major expenditures for such items as roads, runways, aprons,
and drainage systems. Additions and improvements for infrastructure are capitalized when the cost
amounts to $250,000.
Depreciation has been provided using the straight-line method. The estimated useful lives of the various
classes of depreciable capital assets are as follows: buildings— 10 to 50 years; equipment—5 to 10 years;
intangible assets—10 to 15 years; and infrastructure—10 to 50 years. Maintenance and repairs are charged
to expenses as incurred.
E-4
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Management evaluates whether there has been significant unexpected decline in the utility of a capital
asset that could indicate an impairment in the capital asset. If there is an indication that an asset may be
impaired, the Airport follows Governmental Accounting Standards Board (GASB) Statement No. 42,
Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries, to
determine whether an impairment should be recognized. The Airport concluded that no impairment
occurred for the year ended September 30, 2023.
Leased Assets:
The Airport is the lessee for leases of equipment. The Airport has recognized intangible right-to-use lease
assets (lease assets) in the financial statements.
The lease assets are measured at the start of the lease as the initial amount of the lease liability, adjusted
for lease payments made at or before the lease commencement date, plus certain initial direct costs.
Subsequently, the lease asset is amortized on a straight-line basis over its useful life.
Key estimates and judgments related to leases include how the Airport determines the discount rate it uses
to discount the expected lease payments to present value, lease term and lease payments. The Airport uses
the interest rate charged by the lessor as the discount rate. When the interest rate is not provided, the
Airport uses the County's estimated incremental borrowing rate as the discount rate for leases. The lease
term includes the noncancellable period of the lease. Lease payments included in the measurement of the
lease liability are composed of fixed payments and a purchase price option that the Board is reasonably
certain to exercise.
The Airport monitors changes in circumstances that would require remeasurement of its leases and will
remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the
amount of the lease liability.
Compensated Absences:
Board policy permits employees to accumulate a limited amount of annual and sick leave, which will be
paid to employees upon termination of employment. Accumulated annual and sick leave is accrued when
earned. An expense and a liability are recorded as the leave is earned.
Restricted Assets:
The use of certain assets is restricted by specific provisions of resolutions and agreements with various
parties. Assets so designated are identified as restricted assets on the balance sheet. When both restricted
and unrestricted resources are available for use, the hierarchy of Airport spending is to use restricted
resources first, followed by unrestricted resources, as they are needed. Restricted assets are classified as
noncurrent if they are for acquisition or construction of capital assets, for liquidation of long-term debt, or
are for other than current operations.
E-5
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Deferred Inflows of Resources:
Deferred inflows of resources represent an acquisition of net position that applies to a future period and
therefore will not be recognized as an inflow of resources until that time. The Airport has three items that
qualify for reporting in this category: (1)Pension-related items; (2) Other Post-Employment Benefits; and
(3) Leases. The Airport reports deferred inflows for pension-related and other post-employment benefit
items as actuarially determined.
Deferred Outflows of Resources:
Deferred outflows of resources represent a consumption of net position that applies to a future period and
therefore will not be recognized as an outflow of resources (expense) until that future time. The Airport
reports deferred outflows for pension-related and other post-employment benefit items as actuarially
determined.
Lone-Term Obligations:
Long-term obligations are reported as a liability in the Airport's statement of net position. Net pension
liabilities and total OPEB liability are determined based on actuarial valuations. See Notes 6, 7 and 10 for
additional information.
Net Position:
Net position in the Airport's financial statements is classified into three categories:
• Net investment in capital assets —This component of net position consists of capital assets, net of
accumulated depreciation,reduced by the outstanding balances of any bonds, mortgages,notes, or
other borrowings that are attributable to the acquisition, construction, or improvement of those
assets. If there are significant unspent related debt proceeds at year-end, the portion of debt
attributable to the unspent proceeds is not included in the calculation of net investment in capital
assets. Rather, that portion of the debt is included in the same net position component as the
unspent proceeds.
• Restricted net position—This component of net position consists of amounts which have external
constraints placed on their use imposed by creditors (such as through debt covenants), grantors,
contributors, or laws or regulations of other governments or constraints imposed by law through
constitutional provisions or enabling legislation.
• Unrestricted net position — This component consists of net position that does not meet the
definition of"net investment in capital assets" or"restricted net position."
E-6
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue Recognition:
Passenger Facility Charge Revenue: The Aviation Safety and Capacity Expansion Act of 1990 (Public
Law 101-508, Title 11, Subtitle B) authorized the imposition of a local Passenger Facility Charge (PFC)
and use of the resulting PFC revenues for approved Federal Aviation Administration (FAA)projects. On
July 16, 1992, the Board passed Resolution 357-1992 directing the Airport to apply to the FAA to allow
the Airport to collect and expend PFC revenue. A $4.50 PFC charge is imposed on enplaning passengers
for the purpose of generating resources for airport projects that increase capacity,increase safety, security,
or that mitigate noise impacts. PFCs may be collected one application at a time and must be collected in
consecutive order of their approval. The excess (deficit) of amounts collected over amounts expended in
each year is recorded as capital contributions in the Statement of Revenues, Expenses, and Change in Net
Position. Cumulative amounts collected, yet unexpended at September 30, are reflected as net position
restricted for passenger facility projects in the Statement of Net Position.
Airfield Landing Fees: Landing fees are principally generated from scheduled passenger and cargo
carriers, as well as non-scheduled commercial aviation, and are based on maximum landed weight of the
aircraft. The estimated landing fee structure is determined annually pursuant to an agreement between the
Airport and each of the Signatory Airlines based on the Certified Gross Weight of the aircraft landed.
Landing fees are recognized as revenue when activity is completed.
Terminal Rents, Airline Rents, Car Rental, Parking, and Concessions: Rental and concession fees are
generated from airlines,parking facilities, food and beverage operations, rental car agencies, advertisers,
and other commercial tenants. Each October 1, the Airport adjusts charges for leases sufficient to recover
the cost of operations (excluding certain debt service payments), maintenance, and debt service related to
the airfield and the space rented by the airlines. The rates and charges may also be adjusted by the Airport
if, at any time during the fiscal year, rates are expected to vary by more than 10% from established rates.
Grant Revenue and Capital Contributions: Grants and similar items are recognized as revenue as soon as
all eligibility requirements imposed by the provider have been met.
New Accounting Pronouncement:
Effective October 1, 2022, the Board adopted the provisions of GASB Statement No. 96, Subscription-
Based Information Technology Arrangements (SBITAs). To comply with this Statement, the Board's
statements now include a liability for the present value of payments expected to be made and right-to-use
intangible assets that will be recognized over the term of the subscription. However, the Airport did not
have any technology arrangements that met the definition of SBITA.
The following are new accounting pronouncements that have been issued but are not yet effective:
GASB Statement No. 99, Omnibus 2022. The requirements of this Statement are effective as follows:
E-7
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The requirements related to financial guarantees and the classification and reporting of derivative
instruments within the scope of Statement 53 are effective for fiscal years beginning after June 15, 2023,
and all reporting periods thereafter. Earlier application is encouraged and is permitted by topic.
GASB Statement No. 100, Accounting Changes and Error Corrections an amendment of GASB
Statement No. 62. The primary objective of this Statement is to enhance accounting and financial reporting
requirements for accounting changes and error corrections to provide more understandable, reliable,
relevant, consistent, and comparable information for making decisions or assessing accountability.
Effective Date: For fiscal years beginning after June 15, 2023, and all reporting periods thereafter.
GASB Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the
information needs of financial statement users by updating the recognition and measurement guidance for
compensated absences. That objective is achieved by aligning the recognition and measurement guidance
under a unified model and by amending certain previously required disclosures. The requirements of this
Statement are effective for fiscal years beginning after December 15, 2023, and
all reporting periods thereafter.
GASB Statement No. 102, Certain Risk Disclosures. The State and local governments face a variety of
risks that could negatively affect the level of service they provide or their ability to meet obligations as
they come due. Although governments are required to disclose information about their exposure to some
of those risks, essential information about other risks that are prevalent among state and local governments
is not routinely disclosed because it is not explicitly required. The objective of this Statement is to provide
users of government financial statements with essential information about risks related to a government's
vulnerabilities due to certain concentrations or constraints. This Statement defines a concentration as a
lack of diversity related to an aspect of a significant inflow of resources or outflow of resources.
A constraint is a limitation imposed on a government by an external party or by formal action of the
government's highest level of decision-making authority. Concentrations and constraints may limit a
government's ability to acquire resources or control spending. The requirements of this Statement are
effective for fiscal years beginning after June 15, 2024, and all reporting periods thereafter.
Management is in the process of determining what impact, if any, implementation of the above statements
may have on the financial statements of the Airport.
NOTE 2 —CASH, CASH EQUIVALENTS,AND INVESTMENTS
All funds of the Airport are invested with the Board's cash and investment pool, which consists of the
Board's cash and investments. Except for cash and investments restricted for specific purposes, there are
no restrictions on the Airport's ability to withdraw funds from the Board's pool, so all amounts are
considered cash and cash equivalents. All cash and cash equivalents are stated at fair value, based on the
Airport's investment portion of the fair value of the Board's pooled investments. The Board's investment
pool is not rated.
E-8
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 2 —CASH, CASH EQUIVALENTS,AND INVESTMENTS (continued)
The Board categorizes its fair value measurements within the fair value hierarchy established by GAAP.
The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs
are unadjusted quoted prices in active markets for identical assets. Level 2 inputs are either directly or
indirectly observable for an asset(including quoted prices for similar assets), which may include inputs
in markets that are not considered active. Level 3 inputs securities are significant unobservable inputs.
Securities classified in Level 2 are evaluated prices from the custodian bank's primary external pricing
vendors. The pricing methodology involves the use of evaluation models such as matrix pricing which is
based on the securities' relationship to benchmark quoted prices. Other evaluation models use actual trade
data, collateral attributes, broker bids, new issue pricings and other observable market information.
There are no restrictions or limitations on withdrawals; however, FLCLASS may, on the occurrence of an
event that has a material impact on liquidity or operations, impose restrictions on withdrawals for up to
48 hours.
Please see Monroe County's Annual Comprehensive Financial Report for further detail on the County's
pooled deposits and investments with their respective credit ratings.
Credit Risk and Concentration of Credit Risk — The Board approved and adopted its Investment Policy
(Policy) in January 2019. The Policy outlines permitted investments, and establishes limitations on
portfolio composition, by both investment type and by issuer, in order to control concentration of credit
risk. The following table identifies the investment requirements and allocation limits on security types,
issuers, and maturities as established by the County.
Under the Policy, the Clerk has the option to further restrict investment percentages from time to time
based on market conditions, risk, and diversification strategies. The percentage allocation requirements
for investment types and issuers are calculated based on the original cost at the time of purchase of each
investment.
Portfolio Per Issuer
Investment Maximum Maximum Minimum Ratings Maximum
Type (%) (%) Requirement' Maturity
U.S.Treasury 100% 5.50 Years
GNMA 100% 40% N/A (5.50 Years
Other U.S. Government avg. life'
Guaranteed(e.g.AID,GTC 10% for GNMA)
Federal Agency/GSE:
FNMA,FHLMC, 40%'
FHLB,FFCBS 75% N/A 5.50 Years
Federal Agency/GSE o
other than those above 10/o
Supranationals Highest ST or Highest LT Rating
where U.S.is a shareholder 25% 10% Categories 5.50 Years
and voting member (A-1/P-1,AAA/Aaa,or equivalent)
E-9
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 2 —CASH, CASH EQUIVALENTS,AND INVESTMENTS (continued)
Portfolio Per Issuer
Investment Maximum Maximum Minimum Ratings Maximum
Type % % Requirement' Maturity
Highest ST or Three Highest
Corporates 50%' 5% LT Rating Categories 5.50 Years
(A-1/P-1,A-/A3 or equivalent)
Highest ST or Three Highest
Municipals 25% 5% LT Rating Categories 5.50 Years
(SP-1/MIG 1,A-/A3,orequivalent)
Agency Mortgage-Backed 25% 40%1 N/A 5.50 Years
Securities(MBS) Avg.Life'
Asset-Backed Securities 25% 5% Highest ST or LT Rating 5.50 Years
(ABS) (A-1+/P-1,AAA/Aaa,or equivalent) Avg.Life'
Non-Negotiable o None,if fully
Collateralized Bank Deposits 50% collateralized None,if fully collateralized. 2 Years
or Savings Accounts
Commercial Paper(CP) 50%' 5% Highest ST Rating Category 270 Days
(A-1/P-1,or equivalent)
Bankers' Acceptances(BAs) 10%, 5% Highest ST Rating Category 180 Days
(A-1/P-1,or equivalent)
Counterparty(or if the counterparty is
not rated by an NRSRO,then the
Repurchase Agreements o counterparty's parent)must be rated in
(Repo or RP) 40/0 20/o the Highest ST Rating Category 1 Year
(A-1/P-1,or equivalent)
If the counterparty is a Federal
Reserve Bank,no rating is required
Highest Fund Quality and Volatility
Intergovernmental Pools 50% 25% Rating Categories by all NRSROs N/A
(LGIPs) who rate the LGIP,
(AAAm/AAAf, S1,or equivalent)
Florida Local Government Highest Fund Rating by all NRSROs
Surplus Funds Trust Funds 25% N/A who rate the fund N/A
(Florida Prime) (AAAm/Aaa-mf,or equivalent)
Notes:
Rating by at least one SEC-registered Nationally Recognized Statistical Rating Organization(NRSRO),unless otherwise noted.
ST=Short-term;LT=Long-term.
Maximum allocation to all corporate and bank credit instruments is 50%combined.
s Maximum exposure to any one Federal agency,including the combined holdings of Agency debt and Agency MBS,is 40%.
4 The maturity limit for MBS and ABS is based on the expected average life at time of settlement,measured using Bloomberg or other
industry standard methods.
5 Federal National Mortgage Association(FNMA);Federal Home Loan Mortgage Corporation(FHLMC);Federal Home Loan Bank or
its District banks(FHLB);Federal Farm Credit Bank(FFCB).
E-10
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 2 —CASH, CASH EQUIVALENTS,AND INVESTMENTS (continued)
At September 30, 2023, the portion of the Board's investment portfolio invested in Federal
instrumentalities is detailed as follows:
Percent of
Investment
Issue Portfolio
Federal Agency Mortgage-Backed Security (MBS) 1.67%
Federal Agency Bond- Discount 6.25%
Federal Agency Bond 0.30%
Custodial Credit Risk — The Policy requires bank deposits to be secured as provided by Chapter 280,
Florida Statutes. This law requires local governments to deposit funds only in financial institutions
designated as qualified public depositories by the Chief Financial Officer of the State of Florida. Demand
and time deposits are fully insured by the Federal Deposit Insurance Corporation for the first$250,000 at
each institution and the remaining balances are insured 100% by the State of Florida collateral pool, a
multiple institution pool with the ability to assess its members for collateral shortfalls if a member
institution fails.
The Policy requires execution of a third-party custodial safekeeping agreement for all purchased securities
and requires that securities be held in the Board's name. As of September 30, 2023, all of the Airport's
investments are held in a bank's trust department in the Board's name.
Interest Rate Risk — The Policy limits the investment of three months of operating expenditures to 24
months. The Policy limits the investment of noncurrent operating funds to 5.50 years.
Restricted Cash and Cash Equivalents—The Airport has the following unrestricted and restricted cash and
cash equivalents at September 30, 2023:
Demand
Cash and Cash Equivalents Deposits
Unrestricted Cash and Cash Equivalents $ 15,510,168
Restricted Cash and Cash Equivalents 26,172,037
Total Cash and Cash Equivalents $41,682,205
E-11
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 3 —RESTRICTED ASSETS
Restricted assets for the Airport includes those assets created by resolutions adopted by the Board for the
Airport's unspent bond proceeds and passenger facility charges. Total restricted assets as of September
30, 2023 are as follows:
Cash and Cash Accounts
Equivalents Receivable Total
Key West Airport Passenger Facility Charges $ 3,468,086 $ 409,488 $ 3,877,574
Key West Airport Unspent Bond Proceeds 22,703,951 - 22,703,951
Total Restricted Assets $26,172,037 $ 409,488 $26,581,525
NOTE 4 —LEASES RECEIVABLE
The Airport, acting as lessor, has entered into lease agreements involving airport facilities. The total
amount of inflows of resources, including lease revenue, interest revenue, and other lease-related inflows,
recognized during FY 2023 was $23,066,256. This total includes $3,749,165 of variable and other
payments not previously included in the measurement of the leases receivable. Lease receivable balance
at September 30, 2023 is $23,349,474.
Year Ending
September 30 Principal Interest Total
2024 4,032,383 728„772 4,761,155
2025 4,006;229 588,838 4,595,067
2026 4,141,541 448„725 4,590,266
2027 4,286,479 303,787 4,590,266
2028 1,482,572 188,166 1,670,738
Thereafter 5,400,270 1,101,911 6,502,181
Total 23,349,474 3,3601199 26,709,673
E-12
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 5 —CAPITAL ASSETS
Amounts associated with the Airport's capital assets, related accumulated depreciation and depreciation
expense are reported on the Airport's financial statements.
Capital asset activity for the year ended September 30, 2023 is shown in the following table:
Beginning Ending
Balance Additions Reductions Balance
Capital assets not depreciated:
Land $ 1,645,908 $ 9,278,229 $ - $ 10,924,137
Construction in progress 25,400,237 33,254,559 (49,620) 58,605,176
Total capital assets not depreciated 27,046,145 42,532,788 (49,620) 69,529,313
Capital assets depreciated/amortized:
Buildings 61,587,587 49,620 - 61,637,207
Equipment 4,393,615 379,024 (11,863) 4,760,776
Infrastructure 57,482,046 - - 57,482,046
Right-to-use leased equipment 11,308 - (1,045) 10,263
Total assets depreciated or
amortized 123,474,556 428,644 (12,908) 123,890,292
Less accumulated depreciation/
amortization for:
Buildings (16,877,076) (1,719,105) - (18,596,181)
Equipment (2,894,519) (398,324) 11,863 (3,280,980)
Infrastructure (19,287,050) (1,746,058) - (21,033,108)
Right-to-use leased equipment (717) (2,549) 1,043 (2,223)
Total accumulated depreciation/
amortization (39,059,362) $ (3,866,036) $ 12,906 (42,912,492)
Total capital assets depreciated/
amortized,net 84,415,194 80,977,800
Capital assets,net $ 111,461,339 $ 150,507,113
Depreciation and amortization expense for the year ended September 30, 2023 was $3,866,036.
E-13
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 6—POST EMPLOYMENT BENEFITS OTHER THAN PENSION
General Information about the Other Post-Employment Benefits:
Plan Description — The Board administers a single-employer defined benefits healthcare plan (Plan).
Section 112.0801, Florida Statutes, requires the County to provide retirees and their eligible dependents
with the option to participate in the Plan if the County provides health insurance to its active employees
and their eligible dependents. The Plan provides medical coverage, prescription drug benefits, and life
insurance to both active and eligible retired employees. The Plan does not issue a publicly available
financial report.No assets are accumulated in a trust that meets the criteria as set forth in GASB Statement
No. 75.
The Board may amend the plan design,with changes to the benefits,premiums and/or levels of participant
contribution at any time. In an open session, on at least an annual basis and prior to the annual enrollment
process,the Board approves the rates for the coming calendar year for the retiree and County contributions.
The Plan includes participants from the Board and each Constitutional Officer. The Board is responsible
for funding all obligations not funded on a pay-as-you-go basis by Constitutional Officers. However, the
following disclosures are based on the Airport's share of the total Other Post-Employment Benefits
(OPEB) obligation.
Benefits Provided — Employees who retire as active participants in the Plan and were hired on or after
October 1, 2001 may continue to participate in the Plan by paying the monthly premium established
annually by the Board. Employees who retire as active participants in the Plan,were hired before October
1, 2001, have at least ten years of full-time service with the County and meet the retirement criteria of the
Florida Retirement System(FRS)but are not eligible for Medicare,may maintain group insurance benefits
with the County following retirement, provided that the retiring employee pays the retiree contributions
based on their years of service with Monroe County.Pre-Medicare retirees with at least 25 years of service
who satisfy the rule of 70 pay the FRS subsidy for coverage, which is $5 per year of service month with
a maximum of $150 per month. For those with 20-24 years of service, the retirees will pay 25% of the
actuarial rate, and for those with 10-19 years of service the retirees will pay 50% of the actuarial rate.
Retirees who have met the requirements for early retirement,have not achieved age 60 and whose age and
years of service do not equal 70 (rule of 70)must pay the standard monthly premium until the age criteria
or the rule of 70 is met. At that time,the retiree's cost of participation will be based on the preceding table.
Surviving spouses and dependents of participating retirees may continue in the Plan if eligibility criteria
specific to those classes are met.
E-14
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 6—POST EMPLOYMENT BENEFITS OTHER THAN PENSION (continued)
An employee who retires as an active participant in the Plan, was hired prior to October 1, 2001, has at
least ten years of full-time service with the County, and meets the retirement criteria of the FRS and is
eligible for Medicare at the time of retirement or becomes eligible for Medicare following retirement,may
maintain group health insurance benefits with the County following retirement, provided the retiring
employee contributes the Actuarial Rate for Medicare retirees as determined by the actuarial firm engaged
by the County, less a $250 per month County subsidy. Alternatively, retirees meeting these criteria may
elect to leave the County health plan and receive a$250 per month payment from the County,payable for
the lifetime of the retiree.
Employees Covered by Benefit Terms — Eligibility for post-employment participation in the Plan is
limited to full-time employees of the County and the Constitutional Officers.At September 30,2023,there
were no terminated employees entitled to deferred benefits. The membership of the Board's medical plan
consisted of:
Active Employees 584
Retirees and Beneficiaries Currently Receiving Benefits 434
Total Membership 1,018
Contributions —The Board establishes, and may amend, the contribution requirements of Plan members.
The required contribution is based on pay-as-you-go financing requirements,net of member contributions.
Total OPEB Liability:
The Airport's total OPEB liability of $782,000 was measured as of September 30, 2023, and was
determined by an actuarial evaluation as of September 30, 2023 issued on November 21, 2023.
Actuarial Methods and Assumptions — The valuation, dated November 21, 2023, was prepared using
generally accepted actuarial principles and practices, and relied on unaudited census data and medical
claims data reported by the Board as of September 30, 2023.
The total OPEB liability for the Airport in the September 30, 2023 actuarial valuation was determined
using the following actuarial assumptions and other inputs, applied to all periods included in the
measurement, unless otherwise specified:
Actuarial Cost Method Entry Age Normal based on level of percentage
of projected salary.
Salary Increase Rate 3.0%per annum
Discount Rate 4.02%per annum (Beginning of Year)
4.09%per annum (End of Year)
Source: Bond Buyer 20-Bond GO index
E-15
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 6—POST EMPLOYMENT BENEFITS OTHER THAN PENSION (continued)
Marriage Rate The assumed percentage of married participants
at retirement is 25% and is based on the current
retired population of the Board.
Spouse Age Spouse dates of birth were provided by the
County. Where this information was missing,
male spouses were assumed to be three years
older than female spouses.
Medicare Eligibility All current and future retirees were assumed to
be eligible for Medicare at age 65.
Amortization Method Experience/Assumptions gains and losses were
amortized over a closed period of 9.9 years
starting on October 1, 2021, equal to the
average remaining service of active and inactive
plan members (who have no future service).
Plan Participation Percentage The assumptions for participation of eligible
retirees in the County's postemployment
benefit plan are:
Retirees with 25+ Years of Service: 100%
Retirees with 20—24 Years of Service: 75%
Retirees with 10-19 Years of Service: 50%
The actuarial assumptions include an annual health care cost trend rates of 7.0% initially, reduced by
decrements of 0.25% to an ultimate rate of 4.0%. The assumptions included a discount rate tied to the
return expected on the funds used to pay the benefits, and assumes for an unfunded plan, that the benefits
continue to be funded on a pay-as-you-go basis.
Mortality rates were based on the Pub-2010 weighted base mortality table,projected generationally using
Scale MP-2021,applied on a gender-specific and job class basis(teacher, safety,or general, as applicable).
Expected retiree claim costs were developed using 24 months historical claim experience through July
2022. Recent claims experience did not suggest adjustments for COVID-19 was necessary for future claim
cost projections.
E-16
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 6—POST EMPLOYMENT BENEFITS OTHER THAN PENSION (continued)
Changes in the Total OPEB Liability For the Airport:
Total OPEB
Liability
Balance at the beginning of the year $ 730,000
Changes for the year:
Service cost 23,800
Interest cost 31,500
Changes in assumptions or other inputs (85,200)
Benefit payments 81,900
Net change in total OPEB liability 52,000
Balance at the end of the year $ 782,000
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate—The following presents the total
OPEB liability of the Airport, as well as what the total OPEB liability for the Airport would be if it were
calculated using a discount rate that is 1-percentage-point lower (3.09%) or 1-percentage-point higher
(5.09%)than the current discount rate:
Current Discount
1% Decrease Rate 1% Increase
(3.09%) (4.09%) (5.09%)
Total OPEB Liability $860,500 $782,000 $715,100
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates — The following
presents the total OPEB liability of the Airport, as well as what the total OPEB liability would be for the
Airport if it were calculated using a healthcare cost trend rates that are 1-percentage-point lower (6.0%
decreasing to 3.0%) or 1-percentage-point higher (8.0% decreasing to 5.0%) than the current healthcare
cost trend rates:
Healthcare Cost Trend Rates
1% Decrease Current Trend 1% Increase
(6.0%decreasing to (7.0%decreasing to (8.0%decreasing to
3.0%) 4.0%) 5.0%)
Total OPEB Liability $750,000 $782,000 $819,600
E-17
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 6—POST EMPLOYMENT BENEFITS OTHER THAN PENSION (continued)
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
OPEB
For the year ended September 30, 2023, the Airport recognized an OPEB expense of $100,900. At
September 30,2023,the Airport reported deferred outflows of resources and deferred inflows of resources
related to the OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Changes of Assumptions or Other Inputs $ 116,800 $ (52,400)
The amounts the Airport's reported as deferred outflows of resources and deferred inflows of resources
related to OPEB will be recognized in OPEB expense as follows:
OPEB
For Fiscal Year: Amount
2024 $ 6,200
2025 7,500
2026 10,100
2027 11,300
2028 11,400
Thereafter 17,900
Total $ 64,400
NOTE 7—FLORIDA RETIREMENT SYSTEM RETIREMENT PLANS
General Information:
The Airport's employees participate in the Florida Retirement System (FRS). As provided by Chapters
121 and 112,Florida Statutes,the FRS provides two cost sharing,multiple employer defined benefit plans
administered by the Florida Department of Management Services, Division of Retirement, including the
FRS Pension Plan (Pension Plan) and the Retiree Health Insurance Subsidy (HIS Plan). Under Section
121.4501,Florida Statutes,the FRS also provides a defined contribution plan(Investment Plan)alternative
to the FRS Pension Plan,which is administered by the State Board of Administration(SBA). As a general
rule membership in the FRS is compulsory for all employees working in a regularly established position
for a state agency, county government, district school board, state university, community college, or a
participating city or special district within the State of Florida. The FRS provides retirement and disability
benefits, annual cost-of-living adjustments,and death benefits to plan members and beneficiaries.Benefits
are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code.
Amendments to the law can be made only by an act of the Florida State Legislature.
E-18
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 7—FLORIDA RETIREMENT SYSTEM RETIREMENT PLANS (continued)
The State of Florida annually issues a publicly available financial report that includes financial statements
and required supplementary information for the FRS. The latest available report may be obtained by
writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box
9000, Tallahassee, Florida 32315-9000, or from the Web site:
www.dms.myflorida.com/workforce_operations/retirement/publications.
Pension Plan:
Plan Description — The Pension Plan is a cost-sharing multiple-employer defined benefit pension plan,
with a Deferred Retirement Option Program (DROP) for eligible employees.
Benefits Provided — Benefits under the Pension Plan are computed on the basis of age, average final
compensation, and service credit. For Pension Plan members enrolled before July 1, 2011, Regular class
members who retire at or after age 62 with at least six years of credited service or 30 years of service
regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final
average compensation based on the five highest years of salary, for each year of credited service. Vested
members with less than 30 years of service may retire before age 62 and receive reduced retirement
benefits. All Airport employees are regular class member in the FRS.
For Plan members enrolled on or after July 1, 2011, the vesting requirement is extended to eight years of
credited service for all these members and increasing normal retirement to age 65 or 33 years of service
regardless of age for Regular class members. Also, the final average compensation for regular members
will be based on the eight highest years of salary.
As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the Pension Plan
before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living
adjustment is 3% per year. If the member is initially enrolled before July 1, 2011, and has service
credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual
cost-of-living adjustment is a proportion of 3% determined by dividing the sum of the pre-July 2011
service credit by the total service credit at retirement multiplied by 3%. Plan members initially enrolled
on or after July 1, 2011, will not have a cost-of-living adjustment after retirement.
In addition to the above benefits, the DROP program allows eligible members to defer receipt of monthly
retirement benefit payments while continuing employment with a FRS employer for a period not to exceed
96 months after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and
accrue interest. There are no required contributions by DROP participants.
E-19
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 7—FLORIDA RETIREMENT SYSTEM RETIREMENT PLANS (continued)
Contributions —Effective July 1, 2011, all enrolled members of the FRS, other than DROP participants,
are required to contribute 3%of their salary to the FRS.In addition to member contributions,governmental
employers are required to make contributions to the FRS based on state-wide contribution rates established
by the Florida Legislature. These rates are updated as of July 1 of each year. The employer contribution
rates by job class for the periods from October 1, 2022 through June 30, 2023 and from July 1, 2023
through September 30, 2023, respectively, were as follows: Regular11.91% and 13.57%; and DROP
participants18.60% and 21.13%. These employer contribution rates include 1.66% HIS Plan subsidy
for the periods October 1, 2022 through June 30, 2023 and 2.0% from July 1, 2023 through September
30, 2023, respectively.
The Airport's contributions, including employee contributions, to the Pension Plan totaled $464,061 for
the fiscal year ended September 30, 2023.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions —The Airport recognizes pension liabilities, pension expense and deferred
outflows of resources and deferred inflows of resources related to pensions on the accrual basis of
accounting. At September 30, 2023, the Airport reported a liability of $3,841,219 for its proportionate
share of the Pension Plan's net pension liability. The net pension liability was measured as of June 30,
2023, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of July 1, 2023. The Board's proportionate share of the net pension liability was
based on the Board's FY 2023 contributions relative to the FY 2023 contributions of all participating
members. At June 30, 2023, the Board's proportionate share for all funds was 0.1337%, which was an
increase of 0.001464%from its proportionate share measured as of June 30,2022. Approximately 13.09%
of the Board's proportionate share of the net pension liability was allocated to the Airport based on the
Airport's proportionate share of the Board's Pension Plan contributions.
For the fiscal year ended September 30, 2023, the Airport recognized a pension expense of$936,978. In
addition,these activities reported deferred outflows of resources and deferred inflows of resources related
to pensions from the following sources:
FRS Pension
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences Between Expected and Actual Experience $ 354,811 $ -
Changes of Assumptions 246,344 Net Difference Between Projected and Actual
Earnings on Pension Plan Investments 157,819 -
Changes in Proportion and Differences Between
Pension Plan Contributions and Proportionate Share
of Contributions 285,620 127,682
Pension Plan Contributions Subsequent to
the Measurement Date 119,440 -
Total $ 1,164,034 $ 127,682
E-20
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 7—FLORIDA RETIREMENT SYSTEM RETIREMENT PLANS (continued)
The Pension Plan's deferred outflows of resources related to the Airport contributions to the Pension Plan
subsequent to the measurement date, totaling $119,440, will be recognized as a reduction of the net
pension liability in the fiscal year ended September 30,2024. Other amounts reported as deferred outflows
of resources and deferred inflows of resources related to the Pension Plan will be recognized in pension
expense of the Airport as follows:
FRS
For Fiscal Year: Amount
2024 $ 124,963
2025 (49,510)
2026 749,838
2027 71,228
2028 20,393
Total $ 916,912
Actuarial Assumptions — The total pension liability in the June 30, 2022 actuarial valuation was
determined using the following actuarial assumptions, applied to all periods included in the measurement:
Inflation 2.40%
Salary increases 3.25%, average, including inflation
Investment rate of return 6.70%, net of pension plan investment
expense, including inflation
Mortality rates were based on the PUB2010 base table varies by member category and sex, projected
generationally with Scale MP-2018 details in the valuation report.
The actuarial assumptions used in the July 1, 2022 valuation were based on the results of an actuarial
experience study for the period July 1, 2013 through June 30, 2018.
The long-term expected rate of return remained at 6.70%, and the active member mortality assumption
was updated.
The long-term expected rate of return on Pension Plan investments was not based on historical returns,
but instead is based on a forward-looking capital market economic model. The allocation policy's
description of each asset class was used to map the target allocation to the asset classes shown below.
Each asset class assumption is based on a consistent set of underlying assumptions and includes an
adjustment for the inflation assumption. The target allocation and best estimates of arithmetic and
geometric real rates of return for each major asset class are summarized in the following table:
E-21
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 7-FLORIDA RETIREMENT SYSTEM RETIREMENT PLANS (continued)
Compound
Annual Annual
Target Arithmetic (Geometric) Standard
Asset Class Allocation Return Return Deviation
Cash 1.0% 2.9% 2.9% 1.1%
Fixed Income 19.8% 4.5% 4.4% 3.4%
Global Equity 54.0% 8.7% 7.1% 18.1%
Real Estate (Property) 10.3% 7.6% 6.6% 14.8%
Private Equity 11.1% 11.9% 8.8% 26.3%
Strategic Investments 3.8% 6.3% 6.1% 7.7%
Total 100.0%
Assumed Inflation - Mean 2.4% 1.4%
Discount Rate - The discount rate used to measure the total pension liability was 6.70%. The Pension
Plan's fiduciary net position was projected to be available to make all projected future benefit payments
of current active and inactive employees. Therefore, the discount rate for calculation of the total pension
liability is equal to the long-term expected rate of return.
Sensitivity of the Airport's Proportionate Share of the Net Position Liability to Changes in the Discount
Rate - The following represents the Airport's proportionate share of the net pension liability calculated
using the discount rate of 6.70%, as well as what the proportionate share of the net pension liability would
be if it were calculated using a discount rate that is one percentage point lower(5.70%) or one percentage
point higher(7.70%)than the current rate:
FRS Net Pension Liability
Current Discount
1% Decrease Rate 1% Increase
(5.70%) (6.70%) (7.70%)
Airport'sProportionate Share of the
Net Pension Plan Liability $6,561,432 $3,841,219 $1,565,272
Pension Plan Fiduciary Net Position - Detailed information regarding the Pension Plan's fiduciary net
position is available in the separately issued FRS Pension Plan and Other State-Administered Systems
Annual Comprehensive Financial Report.
E-22
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 7—FLORIDA RETIREMENT SYSTEM RETIREMENT PLANS (continued)
HIS Plan:
Plan Description — The HIS Plan is a cost-sharing multiple-employer defined benefit pension plan
established under Section 112.363,Florida Statutes, and may be amended by the Florida legislature at any
time. The benefit is a monthly payment to assist retirees of state-administered retirement systems in paying
their health insurance costs and is administered by the Florida Department of Management Services,
Division of Retirement.
Benefits Provided — For the fiscal year ended September 30, 2023, eligible retirees and beneficiaries
received a monthly HIS payment of $5 for each year of creditable service completed at the time of
retirement,with a minimum HIS payment of$30 and a maximum HIS payment of$150 per month. To be
eligible to receive these benefits,a retiree under a state-administered retirement system must provide proof
of health insurance coverage, which may include Medicare.
Contributions — The HIS Plan is funded by required contributions from FRS participating employers as
set by the Florida Legislature. Employer contributions are a percentage of gross compensation for all
active FRS members. For the fiscal year ended September 30, 2023, the HIS contribution for the period
October 1, 2022 through June 30, 2023 and from July 1, 2023 through September 30, 2023 was 1.66%
and 2.0%, respectively. The Airport contributed 100% of its statutorily required contributions for the
current and preceding three years. HIS Plan contributions are deposited in a separate trust fund from which
payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative
appropriation. In the event legislative appropriation or available funds fail to provide full subsidy benefits
to all participants, benefits may be reduced or cancelled.
The Airport's contributions to the HIS Plan totaled $59,721 for the fiscal year ended September 30, 2023.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions—The basis of accounting and financial reporting of the Airport's HIS Plan
is identical to that of the Airport's Pension Plan. At September 30, 2023, the Airport reported a liability
of$1,229,885 for its proportionate share of the Board's HIS Plan's net pension liability. The net pension
liability was measured as of June 30, 2022, and the total pension liability used to calculate the net pension
liability was determined by an actuarial valuation as of July 1, 2022. The Board's proportionate share of
the net pension liability was based on the Board's FY 2023 contributions relative to the FY 2023
contributions of all participating members. At June 30, 2023, the Board's proportionate share of all funds
was 0.1135%, which was a decrease of 0.0053% from its proportionate share measured as of June 30,
2022. Approximately 6.75% of the Board's proportionate share of the net pension liability was allocated
to Airport based on its proportionate share of the Board's HIS Plan contributions.
E-23
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 7—FLORIDA RETIREMENT SYSTEM RETIREMENT PLANS (continued)
For the fiscal year ended September 30, 2023, the Airport's total recognized HIS pension expense was
$555,514. In addition, these activities reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
HIS Pension
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences Between Expected and Actual Experience $ 20,333 $ 3,259
Changes of Assumptions 36,514 120,355
Net Difference Between Projected and Actual
Earnings on HIS Plan Investments 717 -
Changes in Proportion and Differences Between
HIS Plan Contributions and Proportionate Share
of Contributions 135,907 35,420
HIS Plan Contributions Subsequent to
the Measurement Date 16,018 -
Total $ 209,489 $ 159,034
The deferred outflows of resources related to the HIS Plan resulting from the Airport's contributions to
the HIS Plan subsequent to the measurement date, totaling $16,018, will be recognized as a reduction of
the net pension liability in the fiscal year ended September 30, 2024. Other amounts reported as deferred
outflows of resources and deferred inflows of resources related to the HIS Plan will be recognized as
pension expense by the Airport as follows:
HIS
For Fiscal Year: Amount
2024 $ 6,017
2025 3,648
2026 6,070
2027 11,905
2028 6,306
Thereafter 491
Total $ 34,437
Actuarial Assumptions—The total pension liability in the July 1,2023, actuarial valuation was determined
using the following actuarial assumptions, applied to all periods included in the measurement:
Inflation 2.40%
Salary increases 3.25%, average, including inflation
Municipal bond rate 3.65%
E-24
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 7—FLORIDA RETIREMENT SYSTEM RETIREMENT PLANS (continued)
Mortality rates were based on the Generational RP-2010 with Projection Scale MP-2018 tables.
The actuarial assumptions used in the July 1, 2022 valuation were based on the results of an actuarial
experience study for the period July 1, 2013 through June 30, 2018.
The municipal rate used to determine total pension liability increased from 3.54%to 3.65%.
Discount Rate — The discount rate used to measure the total pension liability was 3.65%. In general, the
discount rate for calculating the total pension liability is equal to the single rate equivalent to discounting
at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because
the HIS benefit is essentially funded on a pay-as-you-go basis, the depletion date is considered to be
immediate, and the single equivalent discount rate is equal to the municipal bond rate selected by the HIS
Plan sponsor. The Bond Buyer General Obligation 20-Bond Municipal Bond Index was adopted as the
applicable municipal bond index.
Sensitivity of the Airport's Proportionate Share of the Net Position Liability to Changes in the Discount
Rate — The following represents the Airport's proportionate share of the net pension liability calculated
using the discount rate of 3.65%, as well as what the proportionate share of the net pension liability would
be if it were calculated using a discount rate that is 1-percentage point lower (2.65%) or 1-percentage
point higher(4.65%)than the current rate:
HIS Net Pension Liability
Current Discount
1% Decrease Rate 1% Increase
(2.65%) (3.65%) (4.65%)
Airport's Proportionate Share
of the Net HIS Plan Liability $ 1,403,108 $ 1,229,885 $ 1,086,296
Pension Plan Fiduciary Net Position—Detailed information regarding the HIS Plan's fiduciary net position
is available in the separately issued FRS Pension Plan and Other State-Administered Systems Annual
Comprehensive Financial Report.
Investment Plan:
The SBA administers the defined contribution plan officially titled the FRS Investment Plan. The
Investment Plan is reported in the SBA's annual financial statements and in the State of Florida Annual
Comprehensive Financial Report.
E-25
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 7—FLORIDA RETIREMENT SYSTEM RETIREMENT PLANS (continued)
As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to participate in the
Investment Plan in lieu of the FRS defined benefit plan. Airport employees participating in DROP
are not eligible to participate in the Investment Plan. Employer and employee contributions, including
amounts contributed to individual member's accounts, are defined by law, but the ultimate benefit
depends in part on the performance of investment funds. Benefit terms, including contribution
requirements, for the Investment Plan are established and may be amended by the Florida Legislature.
The Investment Plan is funded with the same employer and employee contribution rates that are based
on salary and membership class, as the Pension Plan. Contributions are directed to individual member
accounts, and the individual members allocate contributions and account balances among various
approved investment choices. Costs of administering the Investment Plan, including the FRS Financial
Guidance Program, are funded through an employer contribution of 0.04% and 0.06% of payroll and
by forfeited benefits of plan members for the periods October 1, 2022 through June 30, 2023 and from
July 1, 2023 through September 30, 2023, respectively. Allocations to an investment member's accounts
during the F Y 2023, as established by Section 121.72, Florida Statutes, are based on a percentage of
gross compensation, by membership class. For Regular members this was 6.30%.
For all membership classes, employees are immediately vested in their own contributions and are vested
after one year of service for employer contributions and investment earnings. If an accumulated benefit
obligation for service credit originally earned under the Pension Plan is transferred to the Investment
Plan, the member must have the years of service required for Pension Plan vesting(including the service
credit represented by the transferred funds) to be vested for these funds and the earnings on the funds.
Non-vested employer contributions are placed in a suspense account for up to five years. If the employee
returns to FRS-covered employment within the five-year period, the employee will regain control over
their account. If the employee does not return within the five-year period, the employee will forfeit
the accumulated account balance. For the fiscal year ended September 30, 2023, the information for
the amount of forfeitures was unavailable from the SBA; however, management believes that these
amounts, if any, would be immaterial to the Airport.
After termination and applying to receive benefits, the member may rollover vested funds to another
qualified plan, structure a periodic payment under the Investment Plan, receive a hump sum distribution,
leave the funds invested for future distribution, or any combination of these options. Disability
coverage is provided; the member may either transfer the account balance to the Pension Plan when
approved for disability retirement to receive guaranteed lifetime monthly benefits under the Pension
Plan or remain in the Investment Plan and rely upon that account balance for retirement income.
The Airport's total recognized pension expense for the Investment Plan for the fiscal year ended
September 30, 2023, was $121,136.
E-26
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 8 —CAPITAL AND OTHER SIGNIFICANT COMMITMENTS
For the fiscal year ended September 30, 2023, the Airport had outstanding engineering and construction
contracts in the amount of $95,542,176 as detailed below. The major funding sources for the capital
projects are grants awarded by federal and state agencies and other entities along with eligible PFC
revenues.
Concourse A Terminal Improvements $80,704,899
Taxiway Extension 7,155,560
Aircraft Apron and Mitigation 6,146,884
Noise Improvement Program—Single Family Homes 1,534,833
Total $95,542,176
NOTE 9 —LEASES OBLIGATIONS
The Airport leases photocopiers that qualify as other than short-term leases under GASB Statement No.
87, Leases and, therefore, have been recorded at the present value of the future minimum lease payments
(lease liability) as of the date of their inception.
The Airport has two lease agreements for the year ending September 30, 2023. The lease liability and
interest expense due as of September 30, 2023, were as follows:
Year Ending
September 30 Principal Interest Total
2024 $ 1,990 $ 218 $ 2,208
2025 2,051 157 2,208
2026 2,113 94 2,207
2027 1,993 30 2,023
Totals $ 8,147 $ 499 $ 8,646
E-27
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 10 —LONG-TERM DEBT
Long-term debt activity for the year ended September 30, 2023 is as follows:
C111'rent Portion
Beginning Ending of Long-term
Balances Additions Payments Balances Liabilities
Revenue Bonds $ 42,459,929 $ - 42,459,929 $ -
Accrued Comp. Absences 482,034 350,434 239,728 592,740 119,548
Lease Liabilities 10,586 2,439 8,147 1,9190
OPEB Liability 730,000 175,100 123,100 782,000 -
Pension.Liability-FRS&HIS 3,872,805 1,722,075 523,782 5,071,098 -
Total Long Term Debt 47,555,354 $ 2,247,609 S 889,049 $49,913,914 $ 120,538
The Airport has an outstanding revenue bonds totaling $42,459,929, including unamortized original issue
premium, at fiscal year-end. The Series 2022 (AMT) revenue bond was issued to address the Airport's
need for financing is Concourse A Expansion Project. The Airport pledged its net revenues and eligible
PFC revenues in accordance with the PFC Regulation and its PFC collection authority. In addition, the
Airport also has a taxable revenue note from direct borrowings for a line of credit not to exceed$10 million
to also address financing needs of its Concourse A Expansion Project. At September 30, 2023,the Airport
had not drawn any funds from the line of credit.
The following summary reflects the Airport's revenue bond and revenue note as of September 30, 2023:
Revenue Bonds:
Key West International Airport Revenue Bonds, Series 2022 $ 41,340,000
Unamortized Original Issue Premium, Series 2022 1,119,929
Total Revenue Bonds $ 42,459,929
Series 2022 Monroe County, Florida Key West International Airport(Airport) Revenue Bonds
• Final maturity: October 1, 2052
• Principal payment date: October I with first principal payment due October 1, 2025.
• Interest payment dates: April I and October 1, with the first payment date being April 1, 2023.
• Interest rate: 5.000% for maturities from October 1, 2025, through October 1, 2042; 5.250%
interest rate apples to term bonds due on October 1, 2047; 5.000% applies to term bonds due on
October 1, 2052.
• Capitalized Interest Fund was established in the amount of $4,275,138, with one installment of
$1,138,488 paid on April 1, 2023, and three more installments of$1,045,550 to be paid over each
of the next three six-month periods.
• Amount of principal outstanding at September 30, 2023: $41,340,000.
• Reserve requirement: Reserve Fund was established in the initial amount of$2,864,750.
E-28
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 10 —LONG-TERM DEBT (continued)
• Revenue pledged: Eligible PFC Revenues in accordance with the PFC regulation. Total pledged
revenue was $2,573,827.
• Purpose: Provide Key West International Airport funding for the costs related to the Concourse A
expansion project.
• Call provisions: Bonds maturing on or after October 1,2033,may be redeemed at par at the option
of the County on or after October 1, 2032.
PNC Line of Credit for Monroe County, Florida Taxable Master Airport Revenue Note Series 2022
• Final maturity: September 15, 2025
• Principal payment date: Principal of all draws are due and payable on the final maturity date.
Minimum draw amounts are $100,000 and must be in denomination of$10,000. Principal amount
shall be in an amount equal to not exceeding $10,000,000; Provided, however, the aggregate
principal amount of draws that may be made against the Tax-exempt Master Note may not exceed
$8,660,000, unless and until the public approval requirements are met to the Noteholder's
satisfaction with respect to the issuance by the County of tax-exempt debt in excess thereof for the
Proj ect.
• Interest payment dates: Payable quarterly in arrears on the first business day of January, April,
July, and October of each year.
• Non-Use Fee: Beginning January 1, 2023, when the total principal drawn is less than 100% of
$10 million, Key West International Airport will be charged a non-use fee of 0.12% annual of the
principal amount not yet drawn. Non-use fees paid in FY 2023 totaled $12,733.
• Interest rate: The tax exempt rate equals 79% of Term Secured Overnight Financing Rate (SOFR)
plus 0.73%per annum. The taxable rate equals Term SOFR pls 0.79%per annum.
• Amount outstanding at September 30, 2023: $0
• Reserve requirement: None
• Revenue pledged: A Senior Lien will be placed on all AIP Entitlement Grants for Fiscal Years
2026,2027,and 2028;Federal Fiscal Year 2026 BIL Entitlement Grant; and any BIL Discretionary
Grant received in fiscal years 2024, 2025, 2026, 2027, and 2028. The Airport cannot use these
grant proceeds for any other purpose than to repay the PNC Line of Credit unless they obtain prior
written consent from PNC.If there is not sufficient grant receipts to pay quarterly interest payments
or to repay principal balances due, the expectation is that the County will pay PNC from the
Airport's net revenues or eligible PFC. However,paying PNC Line of Credit with net revenues or
PFCs is subordinate to repaying the Airport's revenue bonds.
• Purpose: Acquire, construct and equip various capital improvements at the Airport in connection
with the Airport's Concourse A Expansion.
E-29
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 10 —LONG-TERM DEBT (continued)
Debt Service Funding Requirements —The total annual debt service requirements for the Airport's Series
2022 (AMT) Revenue Bonds outstanding at September 30, 2023 are as follows:
Key West International Airport Activities
Principal Interest Total
2024 $ - $ 2,091,100 $ 2,091,100
2025 - 2,091,100 2,091,100
2026 605,000 2,075,975 2,680,975
2027 480,000 2,048,850 2,528,850
2028 505,000 2,024,225 2,529,225
2029-2033 4,305,000 9,572,875 13,877,875
2034-2038 5,890,000 8,274,250 14,164,250
2039-2043 7,520,000 6,606,000 14,126,000
2044-2048 9,640,000 4,415,975 14,055,975
2049-2053 12,395,000 1,609,375 14,004,375
Total Required Debt Service $ 41,340,000 $ 40,809,725 $ 82,149,725
Unamortized Original Issue
Premium on Series 2022 Bonds 1,119,929
Total Debt Service $ 42,459,929
NOTE 11 —RISK MANAGEMENT
The Airport is exposed to various risks of loss related to tort;theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. The Airport participates in the coverage
provided by the Board for Workers' Compensation, Group Insurance, and Risk Management Internal
Service Funds.
Under these programs, Workers' Compensation provides $500,000 coverage per claim for regular
employees. Workers' Compensation claims in excess of the self-insured coverage are covered by an
excess insurance policy. Risk Management has a$5,000,000 excess insurance policy for general liability
claims with a $200,000 self-insured retention, and building property damage is covered for the actual
value of the building with a deductible of$50,000. Deductibles for windstorm and flood vary by location.
Monroe County purchases commercial insurance for claims in excess of coverage provided by the funds
and for all other risks of loss. Settled claims have not exceeded this commercial coverage in any of the
past three years.
The Airport makes payments to the County's Workers' Compensation, Group Insurance and Risk
Management Funds based on estimates of the amounts needed to pay prior and current year claims.
E-30
KEY WEST INTERNATONAL AIRPORT-MONROE COUNTY, FLORIDA
Notes To Financial Statements
For the Year Ended September 30, 2023
NOTE 12 —LITIGATION AND CLAIMS
The Airport is a parry from time to time in various lawsuits and other claims incidental to the ordinary
course of its operation, some of which are covered by the Board's self-insurance program. While the
results of litigation cannot be predicted with certainty, management believes the final outcome of such
litigation will not have a material adverse effect on the Airport's financial position.
NOTE 13 —COMMITMENTS AND CONTINGENCIES
Grant Programs — The Airport participates in a number of federal and state grant programs that are
governed by various rules and regulations of the grantor agencies. Amounts received or receivable from
grant agencies are subject to financial and compliance audits by the grantors or their representatives. Any
disallowed claims, including amounts already collected, may constitute a liability of the applicable funds.
The amount, if any, which may be disallowed by the grantor, cannot be determined at this time, although
the Airport expects such amounts, if any, to be immaterial.
NOTE 14 —SUBSEQUENT EVENTS
Management has evaluated subsequent events through March 31,2024, in connection with the preparation
of these financial statements, which is the date the financial statements were available to be issued.
E-31
REQUIRED
SUPPLEMENTARY INFORMATION
KEY WEST INTERNATIONAL AIRPORT-MONROE COUNTY, FLORIDA
SCHEDULE OF THE AIRPORT'S PROPORTIONATE SHARE OF NET PENSION LIABILITY
FLORIDA RETIREMENT SYSTEM PENSION PLAN
LAST TEN FISCAL YEARS*
2023 2022 2021
Airport's proportional share of the net pension liability 0.133741137% 0.119102640% 0.127201763%
Airport's proportionate share of the net pension liability $ 3,841,213 $ 3,204,733 $ 743,397
Airport's covered payroll $ 2,915,743 $ 2,892,733 $ 2,396,523
Airport's proportionate share of the net pension liability as a
percentage of its covered payroll 131.74% 110.79% 31.02%
Plan fiduciary net position as a percentage of the total pension liability 82.38% 82.89% 96.40%
*The amounts presented for each fiscal year were determined as of June 30.
F-1
2020 2019 2018 2017 2016 2015 2014
0.127836047% 0.122381778% 0.129013726% 0.110416195% 0.107471975% 0.103158114% 0.104891393%
$ 3,811,648 $ 2,973,628 $ 2,762,545 $ 2,357,006 $ 1,996,602 $ 962,376 $ 942,826
$ 2,237,856 $ 1,918,198 $ 1,886,507 $ 1,725,916 $ 1,732,902 $ 1,444,208 $ 1,223,898
170.33% 155.02% 146.44% 136.57% 115.22% 66.64% 77.03%
78.85% 82.61% 84.26% 83.89% 84.88% 92.00% 96.09%
F-2
KEY WEST INTERNATIONAL AIRPORT-MONROE COUNTY,FLORIDA
SCHEDULE OF THE AIRPORT'S CONTRIBUTIONS
FLORIDA RETIREMENT SYSTEM PENSION PLAN
LAST TEN FISCAL YEARS*
2023 2022 2021
Contractually required contribution $ 463,990 $ 389,901 $ 318,603
Contributions in relation to the contractually required contributions (463,990) (389,901) (318,603)
Contribution deficiency(excess) $ - $ - $ -
Airport's covered payroll $ 3,496,816 $ 3,016,174 $ 2,504,492
Contributions as a percentage of covered payroll 13.27% 12.93% 12.72%
*The amounts presented for each fiscal year were determined as of September 30.
F-3
2020 2019 2018 2017 2016 2015 2014
$ 279,252 $ 228,057 $ 231,876 $ 206,623 $ 196,304 $ 181,589 $ 165,884
(279,252) (228,057) (231,876) (206,623) (196,304) (181,589) (165,884)
$ 2,499,491 $ 2,087,862 $ 2,016,884 $ 1,950,812 $ 1,774,952 $ 1,645,335 $ 1,441,723
11.17% 10.92% 11.50% 10.59% 11.06% 11.04% 11.51%
F-4
KEY WEST INTERNATIONAL AIRPORT-MONROE COUNTY,FLORIDA
SCHEDULE OF THE AIRPORT'S PROPORTIONATE SHARE OF NET PENSION LIABILITY
HEALTH INSURANCE SUBSIDY PROGRAM
LAST TEN FISCAL YEARS*
2023 2022 2021
Airport's proportional share of the net pension liability 0.000000000% 0.113535555% 0.118822592%
Airport's proportionate share of the net pension liability $ 1,229,885 $ 668,072 $ 840,204
Airport's covered payroll $ 2,915,743 $ 2,892,733 $ 2,396,523
Airport's proportionate share of the net pension liability as a
percentage of its covered payroll 42.18% 23.09% 35.06%
Plan fiduciary net position as a percentage of the total pension liability 3.00% 3.00% 3.00%
*The amounts presented for each fiscal year were determined as of June 30.
F-5
2020 2019 2018 2017 2016 2015 2014
0.117668137% 0.110141787% 0.113326095% 0.098952229% 0.095343347% 0.093902398% 0.093727524%
$ 827,311 $ 705,948 $ 687,673 $ 607,323 $ 637,305 $ 546,424 $ 549,761
$ 2,237,856 $ 1,918,198 $ 1,886,507 $ 1,725,916 $ 1,732,902 $ 1,444,208 $ 1,223,898
36.97% 36.80% 36.45% 35.19% 36.78% 37.84% 44.92%
3.00% 2.63% 2.15% 1.64% 0.97% 0.50% 0.99%
F-6
KEY WEST INTERNATIONAL AIRPORT-MONROE COUNTY, FLORIDA
SCHEDULE OF THE AIRPORT'S CONTRIBUTIONS
HEALTH INSURANCE SUBSIDY PROGRAM
LAST TEN FISCAL YEARS*
2023 2022 2021
Contractually required contribution $ 59,721 $ 49,466 $ 41,656
Contributions in relation to the contractually required contributions (59,721) (49,466) (41,656)
Contribution deficiency(excess) $ - $ - $ -
Airport's covered payroll $ 3,496,816 $ 3,016,174 $ 2,504,492
Contributions as a percentage of covered payroll 1.71% 1.64% 1.66%
*The amounts presented for each fiscal year were determined as of September 30.
No data is available for the previous year.
F-7
2020 2019 2018 2017 2016 2015 2014
$ 40,976 $ 34,503 $ 35,684 $ 24,573 $ 28,931 $ 20,496 $ 18,334
(40,976) (34,503) (35,684) (24,573) (28,931) (20,496) (18,334)
$ 2,499,491 $ 2,087,862 $ 2,016,884 $ 1,950,812 $ 1,774,952 $ 1,645,335 $ 1,441,723
1.64% 1.65% 1.77% 1.26% 1.63% 1.25% 1.27%
F-8
KEY WEST INTERNATIONAL AIRPORT-MONROE COUNTY,FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE AIRPORT'S TOTAL OPEB LIABILITY AND RELATED RATIOS
LAST TEN FISCAL YEARS*
2023 2022 2021 2020 2019 2018
Total OPEB liability
Service cost $ 23,800 $ 75,200 $ 29,200 $ 23,100 $ 17,243 $ 16,551
Interest 31,500 17,000 12,900 15,200 19,835 37,165
Changes of benefit terms - 53,800 - - - (402,380)
Differences between expected and actual experience - (9,500) - - - -
Changes in assumptions or other inputs (85,200) (97,400) 3,500 259,700 72,886 (8,455)
Benefit payments 81,900 93,900 (5,600) (291,000) (32,906) (2,868)
Net change in total OPEB liability 52,000 133,000 40,000 7,000 77,058 (359,987)
Total OPEB liability-Beginning of Year 730,000 597,000 557,000 550,000 469,000 828,987
Total OPEB liability-End of Year $ 782,000 $ 730,000 $ 597,000 $ 557,000 $ 546,058 $ 469,000
Covered-employee payroll $ 3,496,800 $ 3,016,200 $ 2,504,500 $ 2,506,100 $ 2,098,000 $ 2,032,700
Total OPEB liability as a percentage of covered-employee payroll 22.36% 24.20% 23.84% 22.23% 26.03% 23.07%
Notes to Schedule:
No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No.75.
Effective January 1,2018,the Board implemented cost-saving benefit changes for its other postemployment benefit plan.These included premium rates that are calculated based on expected retiree costs
for Medicare retirees and lower premium subsidies for eligible retirees.
Changes include updating the mortality to be a generational table with updated projection scales as published by the Society of Actuaries,an interest rate using 20-year bond rates,and a change in Actuarial
Cost methodology to the Entry Age Normal method.The discount rate at the beginning of the year was 4.02%and was 4.09%at the end of the year.
*This schedule should present information for the last ten years.However,until a full ten years of information can be compiled,information will be presented for as many years as are available.
F-9
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RSM
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
Independent Auditor's Report
To the Clerk Ex Officio, Mayor
Board of County Commissioners
We have audited, in accordance with the 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 (Government Auditing Standards), the financial
statements of the Key West International Airport (the Airport), an enterprise fund of Monroe County,
Florida, as of and for the year ended September 30, 2023, and the related notes to the financial
statements, which collectively comprise the Airport's basic financial statements, and have issued our
report thereon dated March 28, 2024. Our report contained an emphasis of matter paragraph related to
the basis of presentation of the financial statements.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Airport's internal
control over financial reporting (internal control) as a basis for designing the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinion on the financial statements,
but not for the purpose of expressing an opinion on the effectiveness of the Airport's internal control.
Accordingly, we do not express an opinion on the effectiveness of the Airport's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may
exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies
in internal control that we consider to be material weaknesses. We identified a deficiency in internal
control, described in the accompanying schedule of findings and questioned costs as item IC 2023-001,
that we consider to be a significant deficiency.
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G-1
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Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Airport's financial statements are free from
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 financial statements. 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 or other matters that are required to be reported under
Government Auditing Standards.
Airport's Response to Finding
Government Auditing Standards requires the auditor to perform limited procedures on the Airport's
response to the finding identified in our audit and described in the accompanying schedule of findings and
questioned costs. The Airport's response was not subjected to the other auditing procedures applied in
the audit of the financial statements and, accordingly, we express no opinion on the response.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity's internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Fort Lauderdale, Florida
March 28, 2024
G-2
Key West International Airport
Schedule of Findings and Questioned Costs
Financial Statement Finding
IC 2023-001 —Financial Reporting
Criteria: Management is responsible for the preparation and fair presentation of 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. Internal control policies and procedures should provide reasonable assurance regarding the
reliability of the financial reporting and disclosure of lease balances.
Condition: We noted that management did not detect errors in reporting its lease related balances
when implementing Governmental Accounting Standards Board Statement No. 87, Leases, (GASB 87)
in the prior year. During the current year completeness review of their rental income accounts,we
noted that a lessor lease with a third party was not previously identified and recorded with the adoption of
GASB 87 in the prior year.This resulted in the understatement of the lease receivable and related deferred
inflows of resources of approximately$1.1 million.
Context: The condition relates to the proper accounting and financial reporting for leases on an ongoing
basis and appears to be an isolated incident.
Cause: The Airport has multiple leases with the third party and inadvertently missed the recognition of
one lease during the implementation of GASB 87.
Effect: See condition above.
Current Year Recommendation: We recommend that management perform an annual completeness
review of all lease balances, which should include a reconciliation of the detail listing of lease accounts to
the general ledger and a review of governing board minutes to ensure that all leases are captured.
Views of Responsible Officials and Planned Corrective Action: Management acknowledges that in
FY 2022 one of the Airport's leases from 2012 was inadvertently missed during the implementation of
GASB Statement No. 87. This was corrected during FY 2023. While the revenue from this lease was
appropriately recognized and accounted for in the Airport's Statement of Revenues, Expenses, and
Changes in Net Position, the lease was not included on the Statement of Net Position as a Lease
Receivable and Deferred Inflows Related to Leases. Management will conduct another review of board
minutes to ensure all lease arrangements that should be recognized are appropriately recognized.
G-3