Budget Process and Financial Policies
The Port Authority's annual budget is prepared on a basis consistent with agency bylaws. The Board approves an annual expenditure budget comprising operating expenses, debt service, gross capital expenditures and other expenditures such as heavy vehicles and computer systems that are deferred and amortized in future periods. The Board also approves the long-term strategic plan and updated capital plan of the agency, and approves amendments to the current year's budget as necessary.
The Port Authority is financially self-sustaining and must raise the monies necessary to operate its facilities and provide services to the public through tolls, fares, rentals and other user charges. Funds needed for capital improvements, construction and acquisition of facilities are raised on the basis of the Port Authority's own credit rating. The Port Authority cannot pledge the credit of either of the states of New York and New Jersey or any municipality, nor can it levy taxes or assessments.
Within the context of programmatic agency-wide objectives, the Port Authority has established various financial measures designed to ensure that the agency is able to sustain its projects, plan for the future and fund debt service. The Port Authority maintains two reserve funds, the General Reserve Fund and the Consolidated Bond Reserve Fund, which were established in accordance with applicable laws and statutes. The agency has set specific targets for the times to debt service earned ratio, monies contained in the General Reserve Fund and the operating ratio.
The Port Authority's basic financial statements are included in the
financial section of the Annual Report and comprise the Consolidated
Statements of Net Assets; the Consolidated Statements of Revenues, Expenses
and Changes in Net Assets; the Consolidated Statements of Cash Flows; and
the Notes to the Consolidated Financial Statements. The Consolidated
Statements of Net Assets present the financial position of the Port
Authority at the end of the fiscal year and include all of its assets and