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CTTV  OF  CHICAGO 
CHTCAGO-O 'HARE  INTERNATIONAL  AIRPORT 


AUDIT  REPORT 
AT 
DECEMBER  31.  1975 


HSPOhV    VH 


T    .    i 


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■RfiN 

IE 

3797. 7C4 

:532aa 
1975 


Bansley  and  Kiener 

Certified  Public  Accountants 

300    WEST   WASHINGTON    STREET 

Chicagd,  Illinois  BDBDB 


'<£ 


to 


3  5556  029  780186 


• 


Bansley  and    Kiener 

Certified   Public   Accountants 

300     WEST    WASHINGTON     STREET 

CHICAGO,   ILLINOIS     60606 

AREA     CODE    312        263-2700 

June  18,  1976 


To  the  City  Council  of  the 
City  of  Chicago,  Illinois 


JOLIET    OFFICE: 

168    NORTH    OTTAWA    STREET 
JOLIET.   ILLINOIS    60431 
AREA    CODE    815    736-7361 


We  have  examined  the  balance  sheet  of  Chicago-O'Hare 
international  Airport  as  of  December  31,  1975,  and  the  related 
statements  of  revenue  and  expense,  changes  in  reserves,  changes  in 
contributions,  and  changes  in  retained  earnings  for  the  year  then 
ended.   Our  examination  was  made  in  accordance  with  generally 
accepted  auditing  standards,  and  accordingly  included  such  tests 
of  the  accounting  records  and  such  other  auditing  procedures  as  we 
considered  necessary  in  the  circumstances.   We  also  made  reference 
to  the  authorizing  ordinance  to  determine  that  accounting  trans- 
actions reflected  in  the  attached  financial  statements  were  within 
the  scope  of  the  authority. 

In  our  opinion,  the  accompanying  financial  statements, 
together  with  our  notes  pertaining  thereto,  present  fairly  the 
financial  position  of  Chicago-O'Hare  international  Airport  as  of 
December  31,  1975  and  the  results  of  its  operations  for  the  year 
then  ended,  in  conformity  with  generally  accepted  accounting 
principles  and,  except  as  stated  in  Note  1C3,  the  applicable 
provisions  of  the  Revenue  Bond  Ordinance,  applied  on  a  basis 
consistent  with  that  of  the  preceding  year. 


Certified  Public  Accountants 


(3 


0 


£1 

rHTCAGO-0'HA: 


EXHIBIT  A 
-2- 


E 

DEC 


JUTIONS  AND  RETAINED  EARNINGS 


CURRENT  ASSETS:  3iit  Assets)  : 

Operation  and  Maintenance  Accoufte  Year 
Cash  -  City  Treasurer 
Cash  -  Bank  Trustee 
U.S.  Treasury  Bills  (Note  1A) 
Accounts  Receivable  (Note  IB) rioted  Assets): 
Less  -  Allowance  for  Doubtful 
Due  from  Other  Funds 
Prepaid  Insurance 


$   4,676,000.00 

10,501,901.57 

2,276,398.87 

$  17,454,300.44 


Total  Current  Assets 


RESTRICTED  ASSETS: 
Special  Accounts: 

Cash  -  City  Treasurer 
Cash  -  Bank  Trustee 
U.S.  Treasury  Bills 

(Note  1A) 
U.S.  Treasury  Notes 

(Note  1A) 
Accrued  Interest  Receiv- 
able on  U.S.  Treasury 
Notes 
Due  from  Operation  and 
Maintenance  Account 
Construction  Accounts: 
Cash  -  City  Treasurer 
Cash  -  Bank  Trustee 
U.S.  Treasury  Bills 
(Note  1A) 


547,204.02 


599,615.44     1,146,819.46 


20 


23 


$  18,601,119.90 


$154,223,000.00 

4,676,000.00   149,547,000.00 


16,742,000.00 
2,631,170.41 
1,356,153.97 

25,392,160.56 

4,648,437.50 

36,010.00 

4,348,448.85 


55,154,381.29 


.rline 


Total  Restricted  Assets 

FIXED  ASSETS:  (Notes  1C  and  ID) : 
Land 
Buildings  and  Other 

Facilities  $286 

Less  -  Allowance  for 

Depreciation  105 

Construction  in  Progress 

Total  Fixed  Assets 

OTHER  ASSETS: 

Deferred  Engineering  Costs 
Less  -  Amortization 

Total  Assets 
Note  -  Retained  Earnings  include 
Note  -  Contract  commitments  to  be 

See  notes  to  financial  statements 


$  21,910,590.09 
32,883,975.83 
29,620,780.85 


84,415,346.77 
5,855,477.75 


Contributions  and 

$313.573.325.71 

red  income  to  reduce  1976  flight  fees. 
31,  1975. 


G 


d 


CITY    OF    CHICAGO 
CHTCAGO-O'HARE    INTERNATIONAL   AIRPORT 

BALANCE    SHEET 
DECEMBER   31,    1975 


EXHIBIT    A 
-2- 


ASSETS 

CURRENT  ASSETS: 

Operation  and  Maintenance  Account: 
Cash  -  City  Treasurer 
Cash  -  Bank  Trustee 
U.S.  Treasury  Bills  (Note  1A) 
Accounts  Receivable  (Note  IB) 
Less  _  Allowance  for  Doubtful  Accounts 
Due  from  Other  Funds 
Prepaid  Insurance 


Total  Current  Assets 


RESTRICTED  ASSETS: 
Special  Accounts: 

Cash  -  City  Treasurer 
Cash  -  Bank  Trustee 
U.S.  Treasury  Bills 

(Note  1A) 
U.S.  Treasury  Notes 

(Note  1A) 
Accrued  Interest  Receiv- 
able on  U.S.  Treasury 
Notes 
Due  from  Operation  and 
Maintenance  Account 
Construction  Accounts: 
Cash  -  City  Treasurer 
Cash  -  Bank  Trustee 
U.S.  Treasury  Bills 
(Note  1A) 


9,196,202.05 
2,093,838.37 


6,560,695.33 

604,142.55 

3,039,057.94 

7,102,363.68 
121,872.63 
439,160.65 


$  17,867, 292. li 


33,817.93 

4,992,698.00 

20,580,296.12 
23,018,398.45 

451,527.09 
2,276,398.87  $  51,353,136.46 


93,622.61 
25,177.06 

4,829,264.62 


4,948,064.29 


$  48,506,553.06 


Total  Restricted  Assets 

FIXED  ASSETS:  (Notes  lC  and  ID): 
Land 
Buildings  and  Other 

Facilities  $286,385,782.20 

Less  -  Allowance  for 

Depreciation  105,849,136.64   180,536,645.56 

Construction  in  Progress  10,117, 376.07 

Total  Fixed  Assets 


56,301,200.75 


OTHER  ASSETS: 

Deferred  Engineering  Costs 
Less  -  Amortization 


$   1,226,701.79 
982,444.30 


239,160,574.69 


244,257.49 


LIABILITIES,  RESERVES,  CONTRIBUTIONS  AND  RETAINED  EARNINGS 


CURRENT  LIABILITIES  (Payable  from  Current  Assets) : 
Revenue  Bonds  Payable  -  Due  within  One  Year 
Vouchers  and  Accounts  Payable 
Due  to  Special  Accounts 

CURRENT  LIABILITIES  (Payable  from  Restricted  Assets)  : 
Special  Accounts: 

Vouchers  and  Accounts  Payable  $     547,204.02 

Construction  Accounts: 

Vouchers  and  Accounts  Payable  599,615.44 

Total  current  Liabilities 


$   4,676,000.00 

10,501,901.57 

2,276,398.87 

$  17,454,300.44 


1,146,819.46 
$  18,601,119.90 


LONG-TERM  LIABILITIES: 

Revenue  Bonds  Payable  (Note  2) 
Less  -  Portion  Due  within  One  Year 

RESERVES  (Exhibit  C) : 
Debt  Service 
Revenue  Bond  Retirement 
Reserve  Maintenance 
Emergency  Reserve 

Matured  Interest  on  Revenue  Bonds 
Matured  Revenue  Bonds 
Construction 

Total  Reserves 

CONTRIBUTIONS  (Exhibit  D) : 
City  of  Chicago 
State  and  Federal 
Public  Utility,  Concessionaire  and  Airline 

Total  Contributions 

RETAINED  EARNINGS  (Exhibit  E) 


$154,223,000.00 
4,676,000.00 


16,742,000.00 
2,631,170.41 
1,356,153.97 

25,392,160.56 

4,648,437.50 

36,010.00 

4,348,448.85 


$  21,910,590.09 
32,883,975.83 
29,620,780.85 


149,547,000.00 


55,154,381.29 


84,415,346.77 


5,855,477.75 


Total  Liabilities,  Reserves,  Contributions  and 
Retained  Earnings 


Total  Assets  $313,573,325.71  Retained  Earnings  S313 , 573 , 325 .71 

Note  -  Retained  Earnings  include   $5,088,992.34  which  represent,   in  accordance  with  the  Revenue  Bond  Ordinance,  deferred  income  to  reduce  1976  flight  fees. 
Note  -  Contract  commitments  to  be  financed  by  the  Operation  and  Maintenance  Account  totaled  $7,774,015.10  at  December  31,  1975. 

See  notes  to  financial  statements. 


(3 


C 


o 


EXHIBIT    C 
-4- 


cr 


(THTCAflO-O'HAR 


ANALYSIS    O] 


FOR   THE   YEAR 


Re1  Matured 
B<  Revenue 
lnt<     Bonds 


Construction 


Total 


BALANCE  -  JANUARY  1,  197  5 

Add  -  Cash  on  Deposit 
with  Bank  Trustee  at 
January  1,  1975 

ADJUSTED  BALANCE  - 
JANUARY  1,  197  5 


JL90, 393.75 


$8,263,027.21  $52,635,870.78 


7,729,569.69 


J.90, 393.75  $8,263,027.21  $60,365,440.47 


Add: 

Allocation  of  Net  Revenue  $8,70 
Interest  Earned  on 

Investments  -  Restricted 
Transfer  from  Debt 

Service  Account 
Transfer  from  Revenue 

Bond  Interest  Account    (8, 54 


$  -  $21,201,513.82 

500,527.55         2,261,851.03 


Total 
Balance 


$      15( 


$      500,527.55    $23,463,364.85 


JL_iJLJL90, 393.75    $8,763,554.76    $83,828,805.32 


Less: 

Purchase  of  Chicago-O'Hare 

International  Airport 

Revenue  Bonds  $ 

Expenditures  by  Bank 

Trustee  during  1975 

for  Retirement  of 

Bonds  and  Payment 

of  Coupons 
Expenditures  from  Reserve 

Maintenance  Account 
Expenditures  for  Fixed 

Assets  Acquired  with 

Revenue  Bond  Money 


15) 


$  8,978,296.63 


154,383.75 


11,588,658.44 
3,692,363.05 

4,415,105.91    4,415,105.91 


Total 


£—iJ>l54,  383.75  $4,415,105.91  $28,674,424.03 


BALANCE  -  DECEMBER  31,  197  5  £ 


See  notes  to  financial  statements 


36.010.00  $4.348.448.85  $55.154.381.29 


a 


c 


i 


EXHIBIT  C 
-4- 


CITY  OF  CHICAGO 
CHICAGO-O'HARE  INTERNA TTONAL  AIRPORT 

ANALYSIS  OF  CHANGES  IN  RESERVES 
FOR  THE  YEAR  ENDED  DECEMBER  31,  197  5 


Revenue 

Revenue 

Matured 

Matured 

Bond 

Debt 

Bond 

Reserve 

Emergency 

Interest  on 

Revenue 

Interest 

Service 

Retirement 

Maintenance 

Reserve 

Revenue  Bonds 

Bonds 

Construction       Total 


BALANCE  -  JANUARY  1,  1975    $       -       $17,722,624.00  $      8,086.29  $3,663,002.88  $22,979,130.40  $  $  $8,263,027.21  $52,635,870.78 

Add  -  Cash  on  Deposit 
with  Bank  Trustee  at 
January  1,  1975  - = = - I 7,539,175.94   190,393.75 - 7,729,569.69 

ADJUSTED  BALANCE  - 

JANUARY  1,  1975  £ - $17,722,624.00  $      8,086.29  $3,663,002.88  $22,979,130.40  $  7,539,175.94  $190,393.75  $8,263,027.21  $60,365,440.47 

Add: 

Allocation  of  Net  Revenue  $8,701,980.28  $      9,576.00  $10,452,736.72  $1,160,000.00  $    877,220.82  $  $     -       $  $21,201,513.82 

Interest  Earned  on 

Investments  -  Restricted        -  225,514.14    1,535,809.34  -  -         500,527.55    2,261,851.03 

Transfer  from  Debt 

Service  Account  -  (990,200.00)     990,200.00         -  -  - 

Transfer  from  Revenue 

Bond  Interest  Account 

Total 

Balance 

Less: 

Purchase  of  Chicago-O'Hare 

International  Airport 

Revenue  Bonds  $   158,444.03  $        -       $  8,819,852.60  $       -       $        -       $        -       $-      $       -$  8,978,296.63 

Expenditures  by  Bank 

Trustee  during  1975 

for  Retirement  of 

Bonds  and  Payment 

of  Coupons  _____        11,434,274.69   154,383.75        -        11,588,658.44 

Expenditures  from  Reserve 

Maintenance  Account  -  3,692,363.05         -  -  -  -         3,692,363.05 

Expenditures  for  Fixed 

Assets  Acquired  with 

Revenue  Bond  Money 

Total 
BALANCE  -  DECEMBER  31,  197  5  £ 
See  notes  to  financial  statements. 


(8,543,536.25) 

1         -              -              -              -         8,543,536.25 

_ 

$   158,444.03 

$   (980,624.00)$11,442,936.72  $1,385,514.14  $  2,413,030.16  $  8,543,536.25 

$     -       $   500,527.55  $23,463,364.85 

$   158,444.03 

$16,742,000.00  $11,451,023.01  $5,048,517.02  $25,392,160.56  $16,082,712.19 

$190,393.75  $8,763,554.76  $83,828,805.32 

-              -              -              -            -       4,415,105.91    4,415,105.91 

$ 

158,444.03  $        -       $  8,819,852.60  $3,692,363.05  $       -       $11,434,274.69  $154,383.75  $4,415,105.91  $28,674,424.03 

$ 

$16,742,000.00  $  2.631.170.41  $1,356,153.97  $25,392,160.56  S  4.648.437.50  $  36.010.00  $4,348,448.85  $55,154,381.29 

o 


c 


c 


<r 


CTTY  OF  CHICAGO 
CHTCAGO-0 ' HARE  INTERNATIONA 

ANALYSIS  OF  CHANGES  IN  CON11. 


FOR  THE  YEAR  ENDED  DECEMBEI 


BALANCE  -  JANUARY  1,  1975 

Add: 

increase  in  Fixed  Assets  Acquired  with: 
City  Money 

State  and  Federal  Money  (Note  1C2) 
Public  Utility,  Concessionaire  and 
Airline  Money 

Total 

Balance 

Less : 

Provision  for  Depreciation 

Amortization  of  Deferred  Engineering  Costs 

Total 

BALANCE  -  DECEMBER  31,  1975 


Lty, 
ire 
e 

.48 


.93 


EXHIBIT  D 
-5- 


Total 


$71,557,301.96 


.30 

$  5,576,961. 
9,161,656. 

82 
.30 

.30 

$14,738,618 

.12 

.78 

$86,295,920 

.08 

.93     $  1,831,505.23 
49,068.08 


$  1,880,573.31 


85     $84.415.346.77 


See  notes  to  financial  statements 


c 


r 


< 


CITY  OF  CHICAGO 
CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

ANALYSIS  OF  CHANGES  IN  CONTRIBUTIONS 
FOR  THE  YEAR  ENDED  DECEMBER  31,  1975 


EXHIBIT  D 
-5- 


BALANCE  -  JANUARY  1,  1975 

Add: 

Increase   in  Fixed  Assets  Acquired  with: 
City  Money 

State   and  Federal  Money    (Note   1C2) 
Public  Utility,    Concessionaire   and 
Airline  Money 

Total 

Balance 


City 

of 

Chicago 


$19,145,986.71 


$    5,576,961.82 
(2,637,781.85) 


State 

and 

Federal 


$31,242,577.77 


2,637,781.85 


Public   Utility, 

Concessionaire 

and  Airline 

$21,168,737.48 


Total 


$71,557,301.96 


$    5,576,961.82 


- 

9, 

,161, 

,656. 

,30 

9, 

,161, 

,656.30 

$  2,939,179.97 

$  2,637,781.85 

$  9, 

,161, 

,656. 

.30 

$14, 

,738, 

,618.12 

$22,085,166.68 

$33,880,359.62 

$30, 

,330, 

,393, 

.78 

$86, 

,295, 

,920.08 

Less : 

Provision   for  Depreciation 

Amortization  of  Deferred  Engineering  Costs 

Total 

BALANCE  -  DECEMBER  31,  1975 


$ 

125, 
49, 

,508.51 
,068.08 

$ 

996,383.79 

$ 

709, 

,612.93 

$  1,831, 
49, 

505.23 
068.08 

$ 

174, 

,576.59 

$ 

996,383.79 

$ 

709, 

,612.93 

$  1,880, 

,573.31 

$21 

,910, 

,590.09 

$32 

,883,975.83 

$29 

,620, 

,780.85 

$84,415, 

,346.77 

See  notes  to  financial  statements. 


o 


c 


< 


CHICAGO 

-0 

CITY 
'HARE 

OF  CHICAGO 
INTERNATIONAL 

AIRPORT 

ANALYSIS 

OF 

CHANGES 

IN  RETAINEE 

)  EARNINGS 

DECEMBER  31,  1975 


EXHIBIT  E 
-6- 


Deferred 

Income  to 

Reduce  Future 

Flight  Fees 


City 
Equity 


Total 


BALANCE  - 

JANUARY  1,  1975 

Add: 

Increase  in  Fixed 

Assets  Acquired 

with  Revenue 

Bond  Money 
Revenue  Bonds 

Retired  during 

1975 

Total 

Balance 

Less: 

Provision  for 

Depreciation  of 
Assets  Acquired 
with  Revenue 
Bond  Money        (, 
Decrease  in  Deferred 
income  to  Reduce 
Future  Flight 
Fees 


$13,730,138.21   $(5,058,566.66)  $  8,671,571.55 


$  4,415,105.91   $  4,415,105.91 
9,477,000.00     9,477,000.00 


L 


$13,892,105.91   $13,892,105.91 


$13,730,138.21   $  8,833,539.25   $22,563,677.46 


8,641,145.87 


$  8,067,053.84   $  8,067,053.84 


8,641,145.87 


Total        $  8,641,145.87   $  8,067,053.84   $16,708,199.71 

BALANCE  - 

DECEMBER  31,  1975    |  5,088,992.34   $    766,485.41   $  5.855.477.75 


See  notes  to  financial  statements. 


< 


m 


SCHEDULE  A-l 
CITY  OF  CHICAGO  -7- 

CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

RECONCILIATION  TO  "NET  REVENUES"  AS  DEFINED 
IN  REVENUE  BOND  ORDINANCE 
FOR  THE  YEARS  ENDED  DECEMBER  31,  197  5  AND  1974 

Years  Ended  December  31, 


1975  1974 


NET  INCOME  $  1,641,904.80   $  7,613,812.65 

ADD  OR  (DEDUCT)  ADJUSTMENTS  TO  REFLECT 
ORDINANCE  BASIS  OF  ACCOUNTING: 

Amounts  included  Above  in  Deter- 
mination of  Net  income: 

Depreciation  9,898,559.07     9,736,636.37 

Amortization  of  Deferred 

Engineering  Costs  49,068.08        49,068.08 

Expenditures  from  Reserve 

Maintenance  Account  3,692,363.05     2,734,968.32 

Interest  Earned  on  Invest- 
ments -  Restricted  (2,261,851.03)   (3,429,491.82) 
interest  on  Revenue  Bonds       8,701,980.28     9,291,422.23 
Amounts  Not  Included  Above  in 
Determination  of  Net  Income: 
Expenditures  of  Operating 
Revenue  for  Capital 

Improvements  (Note  1C3)       (9,161,656.30)   (1,811,541.30) 
Application  of  Deferred 
Income  from  Preceding 
Year  as  Reduction  of 
Flight  Fees 

"NET  REVENUES"  AS  DEFINED  IN  BOND 
ORDINANCE 

ALLOCATION  OF  "NET  REVENUES"  IN 
ORDER  OF  PRIORITY  (Note  IF) : 

Revenue  Bond  interest  $  8,701,980.28   $  9,291,422.23 

Debt  Service  9,576.00       316,808.00 

Revenue  Bond  Retirement  - 

Minimum  Payment  4,452,000.00     4,07  9,000.00 

Reserve  Maintenance  1,160,000.00     1,160,000.00 

Emergency  Reserve  877,220.82       902,979.58 

Deferred  Income  to  Reduce 

Flight  Fees  in  Following  Year     5,088,992.34    13,730,138.21 
Remainder  -  Additional  Allocation 

to  Revenue  Bond  Retirement        6,000,736.72     5,477,062.77 

TOTAL  ALLOCATION  OF  "NET  REVENUES"     $26,290.506.16   $34.957.410.79 


See  notes  to  financial  statements. 


13,730,138.21 

10,772,536.26 

$26,290,506.16 

$34,957,410.79 

( 


< 


CI 
CHTCAGO-0'HA 


ANALYSIS  OF  CHANGE 


FOR  THE  YEAR 


SCHEDULE  A- 2 
-8- 


g  and  Fueling 
ration  System 
mansion   Expansion 


BALANCE  -  JANUARY  1,  1975 


Add: 


Total 


93.36    $1,161,264.31    $8,263,027.21 


Interest  Earned  on  InvestmeJ 
Restricted 

Balance 


20.54 


57,138.57 


500,527.55 


13.90    $1,218,402.88    $8,763,554.76 


Less: 

Expenditures  for  Fixed  Asse* 

with  Revenue  Bond  Money   31.40 


1,030,548.00 


4,415,105.91 


BALANCE  -  DECEMBER  31,  1975   82.50    $   187.854.88    $4.348.448.85 


Note  -  Negative  amount  resulti 


See  notes  to  financial  stateme 


< 


c 


C7TY    OF  CHICAGO 
CHTCAGO-O'HARF,  INTERNATIONAL  AIRPORT 

ANALYSIS  OF  CHANGES  IN  RESERVE  FOR  CONSTRUCTION 
FOR  THE  YEAR  ENDED  DECEMBER  31,  1975 


SCHEDULE  A- 2 


BALANCE  -  JANUARY  1,  1975 


General 

Construction 

of  1968 


Elevated 
Garage 


Runway        Pedestrian     Heating  and      Fueling 

4R-22L        Tunnels  and   Refrigeration      System 

and  Land      Access  Roads  Plant  Expansion   Expansion 


Total 


$2,854,298.97     $317,910.97     $3,281,967.54     $347,192.06     $300,393.36    $1,161,264.31    $8,263,027.21 


Add: 


Interest  Earned  on  Investments 
Restricted 

Balance 


170,666.47 


71,661.78 


160,874.00 


19,666.19 


20,520.54 


57,138.57 


500,527.55 


$3,024,965.44     $389,572.75 


$3,442,841.54 


$366,858.25 


$320,913.90    $1,218,402.88    $8,763,554.76 


Less: 

Expenditures  for  Fixed  Assets  Acquired 
with  Revenue  Bond  Money 

BALANCE  -  DECEMBER  31,  1975 


$3,024,965.44 


(175,799.13) 


3,442,841.54 


49,284.10 


68,231.40 


1,030,548.00 


4,415,105.91 


$565,371.88 


$317.574.15 


$252,682.50    $   187.854.88    $4.348,448.85 


Note  -  Negative  amount  results  from  adjustment  to  final  contract  liability. 


See  notes  to  financial  statements. 


t 


-9- 


CTTY  OF  CHICAGO 
CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 
DECEMBER  31 ,  197  5 


NOTE  1  -  SIGNIFICANT  ACCOUNTING  POLICIES: 

A.   United  States  Treasury  Bills  and  Treasury  Notes: 

Investments  in  these  securities  are  carried  at  cost. 
Interest  is  accrued  only  on  those  securities  having  stated 
interest  rates,  i.e.,  Treasury  Notes.   Discounts  and  pre- 
miums are  recognized  at  the  time  of  maturity  or  sale.   The 
aggregate  market  value  of  securities  at  December  31,  197  5, 
was  $471,312.22  in  excess  of  cost.   Components  of  this 
excess  are  as  follows: 

Cost  Market 


Operation  and  Maintenance 

Account: 

Treasury  Bills  $  3,039,057.94  $  3,056,980.19 

Special  Accounts: 

Treasury  Bills  20,580,296.12   20,788,479.13 

Treasury  Notes  23,018,398.45   23,237,692.20 

Construction  Accounts: 

Treasury  Bills  4,829,264.62    4,855,177.83 

Total  $51.467.017.13  $51.938.329.35 

B.  Accounts  Receivable: 

In  accordance  with  the  Revenue  Bond  Ordinance,  all 
accounts  receivable  uncollected,  for  a  period  of  thirty  days 
after  due  date  are  considered  uncollectible  and  are  to  be 
provided  for.   As  of  December  31,  1975,  an  allowance  of 
$2,093,838.37  is  recorded  for  these  accounts.   Approximately 
$810,000.00  of  this  amount  was  subsequently  collected  through 
April  30,  1976. 

C.  Fixed  Assets: 

All  fixed  assets  are  recorded  at  cost.   Land  includes 
the  costs  of  earthwork  and  landscaping.   The  financial  state- 
ments reflect  fixed  assets  acquired  with  Revenue  Bond  money 
and  with  money  from  other  sources.   These  sources  are: 

City  money 

State  and  Federal  money 
Public  Utility,  Concessionaire 
and  Airline  money 


<" 


-10- 

CTTY  OF  CHICAGO 
CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 

DECEMBER  31,  1975 

(Continued) 


C.  Fixed  Assets  (Continued) : 

At  December  31,  197  5,  the  gross  amount  of  those  assets 
acquired  with  money  from  other  sources  is  $107,625,571.24 
less  allowances  for  depreciation  of  $23,454,481.96.   The 
net  amount  of  these  assets  is  reflected  by  source  in  the 
"Contributions"  section  of  the  Balance  Sheet. 

1.  Fixed  assets  acquired  with  City  money  include  capital- 
ized interest  for  the  use  of  City  money.   Interest  is 
capitalized  from  the  commencement  of  the  land  improve- 
ment or  construction  activity  through  the  year  of 
completion. 

2.  Fixed  assets  acquired  with  State  and  Federal  money 
represent  grants  received  that  are  reimbursements  to 
the  City  for  fixed  assets  acquired  with  City  money. 
These  grants  are  recognized  only  as  received.   As  of 
December  31,  1975,  a  maximum  of  $7,825,192.71  may  be 
realized  in  future  periods  from  such  grants. 

3.  Fixed  assets  acquired  with  Public  Utility,  Concession- 
aire and  Airline  money  are  comprised  of  direct  reim- 
bursements and  amounts  expended  directly  and  indirectly 
from  operating  revenues.   The  Revenue  Bond  Ordinance 
does  not  allow  the  expenditure  of  operating  revenues 
for  capital  improvements.   However,  the  Airline  Repre- 
sentative has  agreed  to  substantially  all  of  these 
expenditures.   Using  operating  revenues  for  this 
purpose  has  the  effect  of  raising  flight  fees. 

In  accordance  with  the  Revenue  Bond  ordinance,  all 
replacements  of  vehicles,  furnishings,  signs  and  other 
equipment  are  expensed  during  the  year  of  acquisition. 

D.  Depreciation  and  Amortization: 

Depreciation  on  Buildings  and  Other  Facilities  is  pro- 
vided on  a  straight-line  basis  over  the  estimated  useful 
life  of  the  individual  assets.   Depreciation  charges  are 
begun  in  the  year  following  the  year  of  acquisition  or 
completion.   Deferred  Engineering  Costs  with  an  original 
balance  of  $1,226,701.79  are  being  amortized  on  a  straight- 
line  basis  over  25  years. 


t 


< 


< 


-11- 


E 


CITY  OF  CHICAGO 
CHICAGO-0 ' HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 

DECEMBER  31,  1975 

(Continued) 


Revenues : 


In  accordance  with  the  Revenue  Bond  Ordinance,  all 
operating  revenues  and  unrestricted  interest  earned  on 
investments  are  accounted  for  through  the  Revenue  Fund. 
These  revenues  are  to  be  allocated  first  to  the  Operation 
and  Maintenance  Account  and  then  allocated  in  the  following 
order  of  priority  to  the  following  special  accounts: 

Revenue  Bond  Interest 
Debt  Service 
Revenue  Bond  Retirement 
Reserve  Maintenance 
Emergency  Reserve 

Further  explanation  of  the  allocations 
for  197  5  are  detailed  in  Note  IF. 

Restricted  interest  earned  on  investments  is  com- 
prised of: 


Special  Accounts: 

Reserve  Maintenance 
Emergency  Reserve 

Construction  Accounts 

Total 


$   225,514.14 
1,535,809.34  $1,761,323.48 

500,527.55 

$2.261.851.03 


While  the  restricted  interest  of  the  special  accounts 
is  accounted  for  through  the  Revenue  Fund,  no  restricted 
interest  is  included  in  the  above  allocation  of  revenues. 
Restricted  interest  of  the  construction  accounts  is 
accounted  for  in  the  individual  construction  accounts. 


F.   Allocation  of  Revenues : 

The  Revenue  Bond  Ordinance  requires  the  allocation  of 
revenues  for  specified  purposes  in  the  following  order  of 
priority: 

1.  For  ordinary  costs  of  operation  and  maintenance,  but 
not  in  excess  of  the  amount  budgeted  by  the  City  for 
such  purposes. 

2.  For  amounts  equal  to  interest  on  bonds  outstanding. 
Interest  of  $8,701,980.28  was  paid  during  1975. 


-12- 

CTTY  OF  CHICAGO 
CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 
'""     DECEMBER  31,  197  5 
(Continued) 


F.   Allocation  of  Revenues  (Continued) : 

3.  To  maintain  the  balance  of  the  Debt  Service  Reserve  at 
an  amount  equal  to  two  years*  interest  requirements. 
During  the  year  all  revenue  bond  issues  became  fully 
funded  after  an  allocation  of  $9,576.00  was  made  to 
the  Reserve  for  the  Revenue  Bond  Series  of  1972.   Bonds 
in  the  principal  amount  of  $9,477,000.00  were  purchased 
during  197  5  and  the  corresponding  interest  requirement 
of  $990,200.00  for  197  5  was  transferred  to  the  Revenue 
Bond  Retirement  Reserve. 

4.  For  required  minimum  payments  to  the  Revenue  Bond 
Retirement  Reserve,  which  range  from  $4,452,000.00  in 
1975  to  $14,545,000.00  in  1998.   Additional  allocations 
for  1975  are  $990,200.00  and  $6,000,736.72  as  explained 
in  Notes  F-3  and  F-8  respectively.   The  total  alloca- 
tion to  the  Revenue  Bond  Retirement  Reserve  during  197  5 
was  $11,442,936.72. 

5.  For  annual  payment  of  $1,160,000.00  to  Reserve  Mainte- 
nance until  $4,833,334.00  is  accumulated  in  the  Reserve. 
This  money  is  available  for  the  payment  of  major  repairs, 
renewals  and  replacements.   Expenditures  of  $3,692,363.05 
were  made  from  this  account  during  197  5  for  the  specified 
purposes. 

6.  To  pay  to  the  Emergency  Reserve  an  amount  equal  to  the 
sum  of  the  annual  provisions  for  depreciation  and  amor- 
tization of  fixed  and  other  assets  acquired  with  City 
money  and  interest  on  City  money  invested  in  fixed  and 
other  assets  of  the  Airport. 

The  components  of  this  amount  for  197  5  are: 

Depreciation  $125,508.51 

Amortization  49,068.08 

interest  702,644.23 

Total  $877.220.82 

Monies  held  to  the  credit  of  the  emergency  reserve 
account  shall  be  treated  as  revenues  to  provide  for 
the  abatement  of  landing  fees  in  the  event  that  the 
Airport  is  closed. 


f 


< 


< 


s 


-13- 

CTTY  OF  CHICAGO 
CHICAGO-0 ' HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 

DECEMBER  31,  197  5 

(Continued) 

F.   Allocation  of  Revenues  (Continued) : 

7.  To  provide  for  deferred  income  to  reduce  future  flight 
fees.   To  the  extent  that  revenues  for  the  year  as 
defined  in  the  Ordinance,  including  the  application  of 
deferred  income  from  the  previous  year,  exceed  "Airport 
expense"  as  defined,  the  excess  shall  be  considered 
deferred  income  and  as  revenues  of  the  next  succeeding 
year.   For  the  year  ended  December  31,  197  5, 
$5,088,992.34  has  been  deferred  to  reduce  flight 

fees  for  1976. 

8.  To  provide  for  retirement  of  Revenue  Bonds  in  addition 
to  minimum  payment  referred  to  in  Note  F-4.   Any 
remaining  revenues  after  making  the  previously  listed 
allocations  shall  be  allocated  to  the  Revenue  Bond 
Retirement  Reserve,  $6,000,736.72  was  so  credited  for 
1975. 

NOTE  2  -  REVENUE  BONDS  AND  RETIREMENT 

A.   Revenue  Bonds: 

The  Chicago-O'Hare  International  Airport  Revenue  Bonds 
were  issued  under  the  authority  of  an  ordinance  adopted 
December  29,  1958,  and  subsequent  supplemental  ordinances. 
The  Bonds  were  issued  to  provide  monies  for  the  extension 
and  improvement  of  the  Airport  and  its  facilities.   The 
following  information  is  presented  regarding  the  status  of 
the  Bonds  as  of  December  31,  197  5: 

Amount  authorized  $238,000,000.00 

Amount  sold  232,000,000.00 

Amount  called  or  purchased 

and  retired  77,740,990.00 

Amount  called  or  purchased 

but  not  presented  to  bank 

trustee  for  retirement  36,010.00 

Amount  outstanding  154,22  3,000.00 


) 


( 


-14- 


CITY  OF  CHICAGO 
CHIC AGO -O' HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 

DECEMBER  31.  1975 

(Continued) 


A.  Revenue  Bonds  (Continued) ; 

The  Revenue  Bonds  outstanding  are  composed  of  the 
following: 

4-3/4%  Series  of  1959  $  69,315,000.00 

4-3/4%  Series  A  of  1961  14,339,000.00 

4-1/4%  Series  B  of  1961  2,094,000.00 

4-1/2%  Series  of  1967  3,078,000.00 

5%  Series  of  1968  12,037,000.00 

6.80%  Series  of  March,  1970  45,810,000.00 

6%  Series  of  1972  7.550,000.00 

Total  $1.54.223.000.00 

The  unexpended  proceeds  from  Revenue  Bond  issue 
amounted  to  $4,348,448.85  at  December  31,  1975.   This 
amount  is  comprised  of: 

Construction  Accounts'  Assets        $4,948,064.29 
Less  -  Construction  Accounts ' 

Liabilities  599.615.44 

Reserve  for  Construction         $4.348.448.85 

B.  Retirement: 

Revenue  Bonds  are  to  be  retired  as  rapidly  as  practic- 
able through  the  revenues  allocated  to  the  Revenue  Bond 
Retirement  Reserve.   Bonds  may  be  redeemed  by  call  at 
prices  ranging  downward  from  105%  to  100%  of  principal 
amount  plus  accrued  interest  to  December  31,  1991,  and 
thereafter,  at  par  value  plus  accrued  interest.   In  addi- 
tion, Bonds  may  be  redeemed  by  purchase  in  the  open  market 
or  tender  at  prices  not  in  excess  of  the  next  predeter- 
mined call  prices.   The  following  information  is  presented 
regarding  Bonds  purchased  for  retirement  through  December 
31,  1975: 

1975        Cumulative 

Par  value  of  Bonds 

purchased  $9,477,000.00  $77,777,000.00 

Cost  of  Bonds  purchased  8,819,852.60  71,918,720.10 
Premiums  paid  on 

Bonds  purchased  60,477.50      581,092.50 

Premiums  paid  on  Bonds  purchased  are  charged  to  Airport 
operations  in  the  year  of  payment.   Discounts  on  Bonds 
purchased  are  retained  in  the  Bond  Retirement  Reserve  to 
purchase  additional  Bonds. 


( 


( 


-15- 

CTTY  OF  CHICAGO 
CHICAGO -O' HARE  INTERNATIONAL  AlRPQRT 

NOTES  TO  FINANCIAL  STATEMENTS 

DECEMBER  31,  1975 

(Continued) 

Bonds  also  may  be  redeemed  with  monies  that  are  not 
allocations  of  revenues  to  the  Retirement  Reserve.   Call 
prices  for  this  type  of  redemption  have  been  adopted  which 
exceed  the  previously  referred  to  call  prices  by  not  more 
than  2%   of  principal  amount.   As  of  December  31,  1975,  the 
City  has  never  opted  to  retire  Airport  Bonds  by  this  method, 

NOTE  3  -  OTHER  INFORMATION 

A.  The  Revenue  Bond  Ordinance  provides  that  "Airport 
Expense, "  for  the  purpose  of  computing  flight  fees  collect- 
ible from  the  airlines,  shall  include  depreciation  and 
amortization  only  on  fixed  assets  acquired  with  City  money 
and  interest  on  City  money  invested  in  land,  buildings, 
other  facilities  and  deferred  engineering  costs.   See 

Note  F-6. 

B.  The  Reserve  for  Matured  Interest  on  Revenue  Bonds  is 
comprised  of  the  following: 

Payment  to  bank  trustee  for 

coupons  due  January  1,  1976        $4,185,500.00 
Prior  payments  to  bank  trustee  - 

coupons  not  presented  for 

redemption  462,937.50 

Total  $4.648.437.50 

C.  The  Reserve  for  Matured  Bonds  represents  bonds  called 
or  purchased  but  not  presented  to  the  bank  trustee  for 
retirement. 


i 


♦ 


-16- 


r.TTV  OF  CHICAGO 
CHICAGO-0 '  HARE  INTERNATIONAL 

NOTES  TO  FINANCIAL  STATI 


DECEMBER  31,  197  5 


(Continued) 


NOTE  4  -  GENERAL  COMMENTS 


The  financial  statements  of  Chica  in  accordance 
with  guidelines  for  reporting  of  muni 

As  a  result,  the  ending  balances  had  to  be 
adjusted.   The  following  elimination ive  at  revised 
opening  balances  on  January  1,  197  5, 

Balance 
January  1,  197  5 

Anticipated  future  revenues  to 
be  used  for  retirement  of 
Revenue  Bonds  outstanding 

Property  Fund  -  Assets  Acquired 
with  Revenue  Bond  money  - 
Fund  Balance 


Retained  Earnings  -  Excess  of 
Depreciation  over  Bonds  retiree 

Total 


5,058,566.66 
$5.058.566.66 


< 


-16- 


CTTY  OF  CHICAGO 
CHICAGO-O'HARE  INTERNATIONAL  AIRPORT 

NOTES  TO  FINANCIAL  STATEMENTS 

DECEMBER  31,  1975 

(Continued) 


NOTE  4  -  GENERAL  COMMENTS 


The  financial  statements  of  Chicago-O'Hare  International  Airport  for  197  5  are  presented  in  accordance 
with  guidelines  for  reporting  of  municipal  enterprise  funds. 

As  a  result,  the  ending  balances  at  December  31,  1974  of  certain  balance  sheet  accounts  had  to  be 
adjusted.   The  following  elimination  details  the  changes  made  in  the  ending  balances  to  arrive  at  revised 
opening  balances  on  January  1,  1975. 

Balance  Balance 

December  31,  1974  Elimination  January  1,  197  5 

Anticipated  future  revenues  to 
be  used  for  retirement  of 
Revenue  Bonds  outstanding  $  163,700,000.00  $(163,700,000.00)  $ 

Property  Fund  -  Assets  Acquired 
with  Revenue  Bond  money  - 
Fund  Balance  (158,641,433.34)  158,641,433.34 

Retained  Earnings  -  Excess  of 

Depreciation  over  Bonds  retired    - 5, 058, 566.66  5, 058, 566.66 

Total  $    5.058.566.66  $  $5.058.566.66 


{ 


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2/15/2010 
WT  190242   1  41  00 


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