NEW YORK STATE

BRIDGE AUTHORITY

 

FINANCIAL REPORT

 

 DECEMBER 31, 2003

                               
 

 

 

Independent Auditor's Report

 

 

 

 

To the Governing Board

New York State Bridge Authority

 

We have audited the accompanying balance sheets of the New York State Bridge Authority (Authority) as of December 31, 2003 and 2002, and the related statements of revenues, expenses and changes in net assets, and cash flows for the years then ended.  These financial statements are the responsibility of the Authority’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the New York State Bridge Authority as of December 31, 2003 and 2002, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

As discussed in Note 1, the Authority changed its accounting policies related to financial statement presentation to comply with the provisions of pronouncements of the Governmental Accounting Standards Board effective January 1, 2002.

 

In accordance with Government Auditing Standards, we have also issued our report dated March 12, 2004 on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grants.  That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.

 

The Management’s Discussion and Analysis (MD&A) on pages 2 through 4 and bridge system assessments on page 16 are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board.  We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it.

 

 

 

 

Poughkeepsie, New York

March 12, 2004


 

New York State Bridge Authority

 

Management’s Discussion and Analysis

December 31, 2003

 

 

This management discussion and analysis serves to introduce the other elements of the financial section of this annual report which are the basic financial statements, notes to the financial statements and other supplementary financial information.  For the year ended December 31, 2002, the Authority was required to observe several new Governmental Accounting Standards Board pronouncements, which established new accounting and financial reporting standards.  The objective of these standards is to enhance the understandability and usefulness of the external financial reports.  During the first year of implementation of the new standards comparative financial information was not available, however for 2003, the Authority is providing a comparative analysis of certain financial information.

 

FINANCIAL HIGHLIGHTS

 

2003 toll revenues were $39.0 million, a 0.56 percent increase over the previous year.

 

Total operating expenses stood at $38.5 million.  The higher costs, including those for commercial insurance, health insurance and salaries, were offset by a significant reduction in expenditures for rehabilitation, reconstruction and bridge repairs.

 

Capital improvement expenditures totaled $17.0 million, a decrease of $11.4 million from 2002.

 

Net assets at year end were $57.6 million. This was $2.4 million below the prior year.

 

BASIC FINANCIAL STATEMENTS

 

The Authority’s financial statements are prepared in accordance with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board. These statements are designed to afford an overview of the Authority’s finances and consist of the Balance Sheet, Statement of Revenues, Expenses and Changes in Net Assets, and the Statement of Cash Flows.

 

The notes to the financial statements include additional information needed to provide a further understanding of the basic financial statements.

 

Other supplemental financial information serves to give the reader certain additional knowledge with regard to the condition of the bridge system and capital improvement expenditures.

 

FINANCIAL STATEMENT ANALYSIS

 

Balance Sheet

 

The balance sheet presents information on the Authority’s assets and liabilities, reporting net assets at year end. Increases or decreases in net assets may indicate whether or not an entity’s financial position is improving. A condensed summary of the Authority’s balance sheet is shown below.

 

                                                                               2003                                         2002

Assets                                                                 (In 000’s)                                    (In 000’s)

Current Assets                                                     $  65,249                                  $  70,022

Non-current Assets

    Capital assets                                                      84,730                                     85,079

    Other non-current assets                                            496                                          538

            Total assets                                             $150,475                                   $155,639


 

Liabilities

Current liabilities                                                    $  9,777                                $  8,703

Non-current liabilities

    General revenue bonds                                        77,920                                   82,225

    Other non-current liabilities                                     5,169                                     4,660

            Total liabilities                                           $92,866                                 $95,588

 

Net Assets

Invested in capital assets                                      $84,730                                  $85,079

Unrestricted                                                          (27,122)                                  (25,028)

            Total net assets                                        $57,608                                  $60,051

 

Statement of Revenues, Expenses and Changes in Net Assets

 

The statement of revenues, expenses and changes in net assets shows the effect of income and expenses on the Authority’s net assets for the year. This statement is prepared on an accrual basis meaning revenues are recognized in the period in which they are earned and expenses are recognized in the period in which they occur. The Authority’s statements for 2003 and 2002 are summarized as follows:

 

2003                                        2002

(In 000’s)                                 (In 000’s)

Operating revenues

    Toll revenues                                                    $38,971                                 $38,753

    Other income                                                          355                                       211

        Total operating revenues                               $39,326                                 $38,964

 

Operating expenses

    Salaries                                                            $10,088                                 $  9,704

    Employee benefits                                               3,152                                     2,558

    Commercial insurance                                           1,760                                     1,133

    Rehabilitation, reconstruction

        and bridge repairs                                          17,014                                   28,404

    Electronic toll costs                                              2,259                                     2,240

    Other                                                                   4,261                                     3,586

        Total operating expenses                              $38,534                                 $47,625

 

Operating gain (loss)                                            $     792                                 $ (8,661)

Nonoperating revenues (expenses)

    Interest income                                                 $     623                                 $  1,316

    Interest and other                                               (3,858)                                   (3,637)

Total nonoperating expenses                    $ (3,235)                                $ (2,321)

 

Decrease in net assets                                          $ (2,443)                                $(10,982)

Net assets, beginning of year                                  60,051                                    71,033

Net assets, end of year                                         $57,608                                 $ 60,051

 

Accounting for most of the revenues were those from tolls which rose 0.56 percent and totaled $39.0 million.

 

Operating expenses of $38.5 million decreased as the cost for rehabilitation, reconstruction and bridge repairs fell from $28.4 million to $17.0 million.  Expense categories noting increases included: salaries, which rose from $9.7 million to $10.1 million, as a result of previously negotiated raises; insurance, where large increases in bridge property and liability coverages drove costs up 55 percent, to $1.8 million; and employee benefits which rose $0.6 million, to $3.2 million, for the most part due to $2.2 million in health insurance expenditures which increased $0.5 million.

 

Nonoperating income results from interest on investments.  A continued decline in interest rates on government obligations and bank certificates of deposit was responsible for interest income falling $0.7 million.  Interest paid on outstanding bonds accounts for substantially all of the nonoperating expenses and totaled $3.8 million this year.


 

Statement of Cash Flows

 

The statement of cash flows presents information on the major sources and uses of cash during the year. The cash flow statement shows net cash provided or used in operating, capital financing and investing activities.

 

Net cash provided by operating activities was $1.9 million as the $19.7 million in payments made to contractors for capital improvements was down $10.2 million from the previous year.  Capital financing activities, which in 2002 provided $44.3 million in net cash as a result of a $50 million bond issuance, showed net cash used of $8.6 million this year.  This, for the most part, resulted from principal and interest payments on the outstanding debt.  Cash flows from investing activities resulted in net cash of $6.5 million. These funds are used to finance capital projects.  The $33.0 million net cash used in 2002 was a result of the investment of funds from the $50 million sale of new debt.

 

AUTHORITY BUDGET

 

In October 2002, the Authority adopted a 2003 budget projecting toll revenues at $39.9 million. However, for the year ended December 31, 2003, only $39.0 million was collected.  This resulted from severe winter weather in the first quarter of the year when tolls were down 4.7 percent, or $406,000.

 

Operating expenses, which totaled $38.5 million for the year, were budgeted for in the Authority’s operating and capital improvement plan budgets. These budgets projected expenditures at $48.8 million. The significant difference between the budgeted and actual total was occasioned by the deferral beyond 2003 of several capital projects as well as competitive bid savings on others.  As such, capital expenditures came in $11.7 million under the budgeted figure.

 

CAPITAL ASSETS AND LONG TERM DEBT

 

As of December 31, 2003, the Authority’s investment in capital assets was $84.7 million.  Capital assets include bridges, roads, buildings, and equipment. In order to fund the commitment to its program of rehabilitation and improvement of the bridge facilities, in March 2002, the Authority issued $50 million General Revenue Bonds having a final maturity on January 1, 2017. All Authority revenue is pledged to repay these bonds and the outstanding Series 1997 issue.  As of January 1, 2004, $77.9 million of debt remained outstanding.

 

Moody’s Investors Service continues to give the Authority’s bonds an Aa2 rating, having upgraded them from Aa3 when the 2002 bonds were issued.  Standard & Poor’s has issued an AA- rating on the Authority’s debt.

 

MODIFIED APPROACH FOR INFRASTRUCTURE ASSETS

 

The Authority has adopted the modified approach in reporting its infrastructure assets.  An alternative to depreciating its bridge facilities, this approach requires the Authority to maintain its infrastructure at a certain measurable standard and report the associated cost as preservation (rehabilitation, reconstruction and bridge repair) expenses.

 

The condition of the Authority’s bridge facilities is determined through annual inspections performed in accordance with New York State Department of Transportation (NYSDOT) requirements and Federal Highway Administration Guidelines. The yearly inspections by the Authority’s consulting engineers, Modjeski & Masters, Inc., measures the ability of each facility to function structurally utilizing a NYSDOT condition rating ranging between 1 and 7. The Authority’s policy is to keep the overall condition rating of each bridge at a 5, meaning the facility shows minor deterioration but is functioning as originally designed.

 

ADDITIONAL INFORMATION

 

This report is compiled for the use of the Authority’s bondholders, the investment community and members of the public interested in the Authority’s affairs. Questions with regard to this financial report or requests for additional information may be addressed to the Treasurer, New York State Bridge Authority, P.O. Box 1010, Highland, NY 12528.


 

New York State Bridge Authority

 

Balance Sheets

December 31, 2003 and 2002

 

See Notes to Financial Statements.

Text Box:  
 



 

New York State Bridge Authority

 

Statements of Revenues, Expenses and Changes in Net Assets

Years Ended December 31, 2003 and 2002

 

Text Box:  
See Notes to Financial Statements.

 


 

New York State Bridge Authority

 

Statements of Cash Flows

Years Ended December 31, 2003 and 2002

 

 

Text Box:  
See Notes to Financial Statements.

 


 

New York State Bridge Authority

 

Notes to Financial Statements

 

Note 1.    Nature of Organization and Summary of Significant Accounting Policies

 

                Nature of Organization:

                The New York State Bridge Authority (Authority) is a Public Benefit Corporation created in 1932 and existing pursuant to Title 2, of Article 3 of the Public Authorities Law, Chapter 43-A of the Consolidated Laws of the State of New York (The Act).  The Act provides that the Authority shall continue its corporate existence and operate and maintain its bridge facilities so long as it shall have bonds or other obligations outstanding and until its existence shall be terminated by law.  The Authority, which currently operates and maintains the Rip Van Winkle, Kingston-Rhinecliff, Mid-Hudson, Newburgh-Beacon, and Bear Mountain bridges crossing over the Hudson River, consists of a five member Board appointed by the Governor with the advice and consent of the Senate.  Since the Authority has no component units or potential component units, the accompanying financial statements include only the accounts of the Authority.  The Authority's financial statements are included in the New York State Comprehensive Annual Financial Report.

 

                A summary of the Authority's significant accounting policies follows:

 

                Basis of Presentation

 

                On January 1, 2002, the Authority adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34 “Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments” and GASB Statement No. 37 “Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments: Omnibus.”  Statement 34, as amended by Statement 37, established standards for external financial reporting and requires the capitalization of assets and recording of depreciation, except infrastructure assets, for which the modified approach for reporting has been implemented.  The statements require the classification of net assets into three components ‑ invested in capital assets, net of related debt; restricted; and unrestricted. These classifications are defined as follows:

 

·        Invested in capital assets – This component of net assets consists of capital assets, net of accumulated depreciation, reduced (as applicable) by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

 

·        Restricted – This component of net assets consists of constraints placed on net asset use through external restrictions imposed by creditors (such as through debt covenants), contributors, or laws or regulations of other governments or restrictions imposed by law through constitutional provisions or enabling legislation.

 

·        Unrestricted – This component of net assets consists of net assets that do not meet the definition of “restricted” or “invested in capital assets.”

 

Prior to the adoption of Statements 34 and 37, the Authority utilized applicable governmental fund types for financial reporting purposes, and the Authority did not depreciate capital assets. In adopting the provisions of these statements, management reviewed the Authority’s activities in determining that the Authority should utilize the business-type activities reporting model for its financial statements. The business-type activities model requires the Authority to include a balance sheet, a statement of revenues, expenses and changes in net assets and a statement of cash flows.


 

New York State Bridge Authority

 

Notes to Financial Statements

 

Note 1.    Nature of Organization and Summary of Significant Accounting Policies, Continued

 

                For internal accounting and reporting, the accounts of the Authority are maintained in conformity with fund accounting.  Fund accounting facilitates the observance of statutory limitations and restrictions on the use of resources.

 

                The following funds were established by the Authority in compliance with Article V, Section 5.02 of the General Revenue Bond Resolution ("Series 1997 Resolution") adopted December 19, 1996.  These funds are grouped by fund type in accordance with generally accepted accounting principles for governmental entities.  All monies are to be transferred to such funds in accordance with terms outlined below, and held in depository by the designated Trustee, with the exception of the operating fund.

 

                A.  General Fund

 

Revenue Fund: Established to receive daily toll revenues and make payments to the designated funds in accordance with the terms outlined below.

 

Operating Fund: Established to make payments from amounts received from the revenue fund, as may be required for the reasonable and necessary operating expenditures of the Authority.  Amounts to be maintained in the operating fund are limited to the amounts not more than sufficient to provide for reasonable and necessary operating expenditures for the remainder of the current month and ensuing two months.

 

General Fund: Established to hold monies not required by other Authority designated funds, for any other lawful corporate purpose of the Authority.

 

                B.  Debt Service Funds

 

                     Debt Service Fund: Established to make principal and interest payments to the Trustee or paying agent required by the Series 1997 Resolution, from amounts received from the revenue fund.

 

Debt Service Reserve Fund: Established to receive payments from the revenue fund to the extent necessary to make the amount in such fund, as of the date of the calculation, equal to the maximum amount of principal and interest due to be paid on bonds then outstanding in the then current or any future fiscal year to which the calculation relates, excluding interest to be paid from monies held in the debt service fund.

 

Subordinated Indebtedness Fund: Established to issue evidences of indebtedness payable out of, and which may be secured by a pledge of, such amounts in the subordinated indebtedness fund or general fund as may from time to time be available for the purpose of payment thereof.

 

                         Rebate Fund: Established to hold monies for rebates of certain investment earnings.

 

                    C.  Capital Projects Fund

 

Construction Fund: Established to hold monies paid into it from the sale of bonds to pay for costs of "The Project" or any "Additional Projects" as defined in the Series 1997 Resolution.  Any remaining money upon completion or abandonment of such projects shall be transferred to other funds in accordance with the terms of the Resolution.


 

New York State Bridge Authority

 

Notes to Financial Statements

 

Note 1.    Nature of Organization and Summary of Significant Accounting Policies, Continued

 

Maintenance Reserve Fund: Established to make payments from amounts received from the revenue fund, for the cost of construction of additions, improvements or betterments to, or reconstruction of Authority bridge facilities, renewals or replacements of Authority facilities and for the purchase of major or extraordinary vehicles and equipment necessary to operate and/or maintain the Authority bridge facilities.

 

Insurance Fund: Established to receive payments from the revenue fund to the extent that, together with multi-risk insurance, it shall provide for the adequate protection against the physical loss or damage of a bridge facility.  Additionally, the Authority may pay into a separate account in this fund, amounts sufficient to provide coverage, in addition to, or instead of, such commercial insurance policies required by the Series 1997 Resolution.

 

Restatement

 

The Authority applied the adoption of Statements 34 and 37 retroactively by restating net assets as of January 1, 2002, principally to give effect to the recording of accumulated depreciation of the Authority’s fixed assets, except for the bridge system which is accounted for using the modified approach for infrastructure assets, and outstanding bonds payable.

 

Basis of Accounting

 

The accounting policies of the Authority conform to generally accepted accounting principles in the United States of America.  The Authority’s reports are based on all applicable GASB pronouncements as well as applicable Financial Accounting Standards Board (FASB) Statements and Interpretations, issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements.

 

As previously described, the operations of the Authority are reported under the business‑type activities model and, as such, are accounted for on a flow of economic resources measurement focus and the accrual basis of accounting. Within this measurement focus, all assets and liabilities associated with operations are included on the balance sheet with revenues recorded when earned and expenses recorded at the time liabilities are incurred.

 

                Cash Deposits and Investments

 

                The Authority is limited under its investment guidelines to the investment of funds in obligations of the United States of America (United States Government Securities), the State of New York or certificates of deposit.  All cash and funds invested in certificates of deposit in any fiduciary bank or trust company must be secured at all times by United States Government Securities or obligations of the State of New York, with a market value, combined with any FDIC coverage, at least equal to the amount of such deposits.  Monies held by the Trustee only may also be secured by obligations guaranteed by the United States of America.  Investments, consisting principally of U.S. Treasury obligations and certificates of deposit with a remaining maturity of one year or less at the time of purchase, are stated at cost plus accrued interest.


 

New York State Bridge Authority

 

Notes to Financial Statements

 

Note 1.    Nature of Organization and Summary of Significant Accounting Policies, Continued

 

                Capital Assets

 

Capital assets include buildings and furniture and equipment.  Capital assets purchased or acquired with an original cost of $5,000 or more are reported at historical cost or estimated historical cost.  Additions, improvements and other capital outlays that significantly extend the useful life of an asset are capitalized.  Other costs incurred for repairs and maintenance are expensed as incurred.  Depreciation on all assets is provided on the straight line basis over the following estimated useful lives:

 

Bridge System

 

The bridge system consists of five bridges (6 spans) spanning the Hudson River together with the related toll plazas and approaches.  The bridge system is reported at historical cost. The Authority uses the modified approach to account for the bridge system.  Under the modified approach expenditures for additions and improvements to eligible infrastructure assets, which increase capacity or efficiency of the assets rather than preserve their lives, are capitalized.  All other expenditures, including preservation costs, are expensed in the period incurred and the bridge system is not depreciated.  The Authority performs condition assessments on the bridge system, makes annual estimates of the outlay necessary to maintain and preserve the assets at predetermined condition levels and documents that the assets are being maintained at the predetermined condition level.

 

                Real Property

 

                Real property utilized by the Authority is held in the name of the State of New York.  The Authority has, however, the right to possess and, with the approval of the Commissioner of Transportation, to sell, lease, exchange, or otherwise dispose of any property or rights therein, not necessary for its corporate purpose.

 

Compensated Absences

 

                In conformity with pronouncements of the Governmental Accounting Standards Board, the Authority accrues vacation and other benefits as earned by its employees.

 

                Operating Revenues

 

Operating revenues consist principally of toll revenue.

 

Nonoperating Revenues

 

Nonoperating revenues consist principally of interest income.

 

                Operations

 

                Provisions of the Series 1997 Resolution require that revenues in excess of expenses for operation and maintenance of the bridge system be used first for the payment of interest and principal on outstanding bonds, then for debt service reserve, subordinated indebtedness (if any), insurance, maintenance reserve, construction and finally general fund requirements.  It also requires that expenses for operation and maintenance of the bridge system shall not include any provisions for depreciation of the bridge facilities or equipment, or any principal payment on bonds outstanding or any other debt obligation of the Authority.


 

New York State Bridge Authority

 

Notes to Financial Statements

 

Note 1.    Nature of Organization and Summary of Significant Accounting Policies, Continued

 

                The Authority's right to operate and collect tolls for the use of the Newburgh-Beacon Bridge is governed in part by an agreement dated December 15, 1988, between the Authority, the State of New York and the United States Department of Transportation.  Consistent with the terms of Section 120(c)(2) of Public Law 100-17 and Section 402 of Title II of Public Law 101-45, the Agreement permits the use of revenues collected at that bridge only for construction and reconstruction, debt service, proper operation and maintenance of the bridges, approach roads and support facilities subject to the jurisdiction of the Authority.

 

Note 2.    Cash Deposits

 

                The carrying amount of the Authority's deposits with financial institutions at December 31, 2003 was approximately $2,530,000 (combined with cash on hand and included in the caption cash and cash equivalents in the balance sheet) and the bank balance was $2,458,845.  The bank balance is categorized as follows:

 

Note 3.    Investments

 

                The cost and market value of investments (United States Government Securities) held by the Authority as of December 31 are summarized as follows:

 

 

                In accordance with Governmental Accounting Standards Board Statement No. 3, all Authority investment securities are classified as securities acquired by a financial institution for a governmental entity held by the financial institution's trust department in the entity's name.

 


 

New York State Bridge Authority

 

Notes to Financial Statements

 

Note 4.    Funds Held for Designated Purposes

 

                At December 31 funds held for designated purposes by fund category consisted of the following:

 

 

                Cash in the debt service fund at December 31, 2003 and 2002 was on deposit with the paying agent to meet bond and interest payments due on January 1, 2004 and January 1, 2003, respectively.

 

Note 5.    Capital Assets

 

Capital assets consist of the following at December 31:

 

 

Depreciation expense for the year ended December 31, 2003 was $744,691 ($653,839 in 2002).

 

Note 6.    Bridge System

 

                The bridge system consisted of the following at December 31, 2003 and 2002:

 


 

New York State Bridge Authority

 

Notes to Financial Statements

 

Note 7.    Bond Indebtedness

 

                On January 22, 1997 the Authority issued $49,015,000 of General Revenue Bonds (Series 1997) in the open market in order to provide funds (a) for the costs of providing for the payment at or in advance of maturity (defease) of the Outstanding Series 1989 Bridge System Revenue Bonds (Series 1989) and the Series 1992 Bridge System Revenue Bonds (Series 1992) of the Authority, (b) to finance a portion of the costs of the 1997 Project, which consists of certain reconstruction and rehabilitation projects for the Authority's Bridge system, (c) to fund the debt service reserve fund to the level required by the Resolution and (d) to pay the costs of issuance of the Series 1997 Bonds.

 

On March 7, 2002 the Authority issued $50,000,000 of General Revenue Bonds (Series 2002) in the open market in order to provide funds to finance a portion of the costs of the 2002 Project, which consists of certain reconstruction and rehabilitation projects for the Authority’s Bridge System.  The proceeds will also be used to (a) fund the debt service reserve fund to the level required by the Bond Resolution and (b) pay the costs of issuance of the Series 2002 Bonds.

 

                Changes in indebtedness for the year ended December 31, 2003 are summarized as follows:

 

 

                The bonds have serial maturities as follows:

 

 

                The Series 1997 Bonds, which bear interest ranging from 5% to 6%, and the Series 2002 Bonds which bear interest ranging from 3% to 5.0%, are general obligations of the Authority and are payable from and secured by a pledge of all monies or revenues of the Authority, including tolls and other revenues derived from the operations of the Authority's bridge facilities.

 

                The Series 1997 Bonds maturing on or after January 1, 2008 are subject to redemption prior to maturity, at the option of the Authority, as a whole or in part at any time on or after January 1, 2007, at prices ranging from 100% to 102% of the principal amount plus accrued interest to the redemption date.

 

The Series 2002 Bonds maturing on or after January 1, 2013 are subject to redemption prior to maturity, at the option of the Authority, as a whole or in part at any time on or after January 1, 2012, at the redemption price of par plus accrued interest to the redemption date.


 

New York State Bridge Authority

 

Notes to Financial Statements

 

Note 8.    Retirement Plan

 

                A.  Plan Description

 

The New York State Employees' Retirement System (System) provides retirement benefits as well as death and disability benefits.  Obligations of employers and employees to contribute and benefits to employees are governed by the New York State Retirement and Social Security Law.  The System issues a publicly available financial report that includes financial statements and required supplementary information.  The report may be obtained by writing to the New York State and Local Retirement System, Gov. Alfred E. Smith State Office Building, Albany, New York 12244.

 

                B.  Funding Policies

 

The System is contributory (3%) except for employees who joined the System before July 27, 1976.  Employees who joined the System after July 27, 1976 and have been members of the System for at least ten years, or have at least ten years of credited service are not required to contribute 3% of their salaries.  For the New York State and Local Employees' Retirement System, the Comptroller shall certify annually the rates expressed as proportions of payroll of members, which shall be used in computing the contributions required to be made by employers to the pension accumulation fund.

 

The Authority is required to contribute at an actuarially determined rate.  The required contribution for the year ended December 31, 2003 was $382,184.  There were no required contributions for the years ended December 31, 2002 and 2001.

 

The Authority's contributions made to the System were equal to 100% of the contributions required for each year.

 

Note 9.    Post Retirement Health Care Benefits

 

                The Authority provides certain health care benefits for retired employees.  Substantially all of the Authority's employees may become eligible for these benefits if they reach the normal retirement age, of the respective tier of the New York State Employees' Retirement System, while working for the Authority.  The Authority, on an annual basis, accrues the cost which represents the present value of these benefits to be paid over the estimated lives of the retirees.  Total expenditures charged to operations were approximately $1,121,600 in 2003 ($765,000 in 2002).  At December 31, 2003, this liability, included in noncurrent accrued fringe benefits, was approximately $3,588,000 ($2,995,300 in 2002).

 

Note 10.  Risk Management

 

                The Authority purchases commercial insurance policies in varying amounts for general liability, vehicle liability, damage to fixed assets, and public officials and employee liability coverages.  The Authority also pays unemployment claims to the State of New York as incurred.  There are no claims relating to the bridge facilities, however, the Authority has reserved approximately $6,812,000 in the capital projects fund to meet its deductible should a claim arise.

 

Note 11.  Commitments and Contingencies

 

                Bridge Construction

 

                At December 31, 2003, the Authority had contractual commitments outstanding of approximately $7.4 million for bridge rehabilitation and repairs on several of its bridge facilities.

 

Contingencies

 

The Authority is a defendant in lawsuits.  While the outcome of these lawsuits or other proceedings against the Authority cannot be predicted with certainty, the Authority does not expect that these matters will have a material adverse effect on its financial position.


 

ADVANCE \y172

 

 

 

 

Required Supplementary Information


 

New York State Bridge Authority

 

Bridge System Assessments

Year Ended December 31, 2003

 

 

*The condition of the Authority’s bridge system is determined using its annual inspection procedures.  The Inspections were conducted in accordance with New York State Department of Transportation (NYSDOT) requirements and Federal Highway Administration Guidelines.  The NYSDOT bridge condition rating, which is an assessment of the ability to function structurally, uses a numerical condition scale ranging from 1.0 (totally deteriorated) to 7.0 (New condition).  The complete NYSDOT numerical rating scale is as follows:

 

  1. Totally deteriorated, or in failed condition
  2. Used to shade between ratings 1 and 3
  3. Serious deterioration, or not functioning as originally designed
  4. Used to shade between 3 and 5
  5. Minor deterioration, but functioning as originally designed
  6. Used to shade between 5 and 7
  7. New Condition, No deterioration

 

The number of bridges included in the annual inspection process includes the six spans crossing the Hudson River and three overpasses.

 

It is the Authority’s policy to keep the overall condition number of each bridge at a condition rating of at least 5. Presently, all bridges are inspected annually with three bridges receiving biennial inspections and three receiving maintenance inspections.

 

 

Significant variations between the estimated, or budgeted, and actual costs of capital improvements are noted in 1999, 2000, 2002, and 2003.  In 1999, a $30 million project to rehabilitate, and replace the deck on, the Kingston-Rhinecliff Bridge was delayed until a toll increase was in place in early 2000.  The 1999 budget included $9 million for this work.

 

In 2000, $11.0 was budgeted for the Kingston-Rhinecliff rehabilitation but the initial year’s actual costs came in at $6.2 million.  In addition, approximately $11.0 million for various projects originally scheduled for this year was moved to 2001, or came in under budget.

 

The $10.4 million estimated to actual difference in 2002 was the result of several projects that were either let late in the year, delayed, or completed under budget.

 

In 2003, several projects that would not interfere with the safe and reliable operation of the bridges were deferred to 2004 or beyond.  Other projects realized savings of $1.5 million which reduced cost below that which was budgeted.