CHESAPEAKE BAY BRIDGE AND TUNNEL DISTRICT...2018/12/03 · Overview of the Financial Statements The Chesapeake Bay Bridge and Tunnel District’s (the District) financial report for

CHESAPEAKE BAY BRIDGE AND TUNNEL DISTRICT

Quarterly Report for the Period Ending

December 31, 2018

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Overview of the Financial Statements

The Chesapeake Bay Bridge and Tunnel District’s (the District) financial report for the quarter ended December 31, 2018 provides long-term and short-term information about the District’s overall financial status. This report consists of two parts: management’s discussion and analysis and the basic financial statements, including notes to the basic financial statements. Management’s discussion and analysis introduces the basic financial statements and provides an analytical overview of the District’s financial activities. The basic financial statements are the statements of net position as of December 31, 2018 and 2017, the related statements of revenues, expenses, and changes in net position and the statement of cash flows for the quarter and year then ended. The notes to the basic financial statements consist of information that is essential to a user’s understanding of the basic financial statements. As it is considered a special-purpose government engaged only in business-type activities, the District follows enterprise fund reporting; accordingly, the basic financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. Under this basis, revenues are recognized in the period in which they are earned, expenses are recognized in the period in which they are incurred, and depreciation of nonbridge-tunnel infrastructure assets is recognized in the statements of revenues, expenses, and changes in net position. All assets and deferred outflows of resources and liabilities and deferred inflows of resources resulting from the operation of the District are included in the statements of net position.

Financial Highlights for the Quarter

Gross toll revenues before deductions for the second quarter of fiscal year 2019 (Q2 FY19) were $13,014,049 and were 0.4% less than toll revenues in the second quarter of fiscal year 2018 (Q2 FY18). During Q2 FY19, total revenue vehicles of 915,385 crossed the District’s facility. This represents a decrease in vehicular traffic of 3,822, less than Q2 FY18. The month of December represented an all-time monthly record for both traffic and revenue.

Other revenues in Q2 FY19 totaled $261,718, which is a decrease of $37,506, or 12.5% less than other revenues in Q2 FY18

Operating expenses before District facility expenses in Q2 FY19 totaled $3,511,432, which is an increase in operating expenses of $115,631, or 3.4% from Q2 FY18.

Non-operating revenues/expenses is a net revenue in Q2 FY19 of $3,074,920, which is an improvement of $6,311,582 from Q2 FY18. The large improvement is due to a $2,814,289 increase in the fair value of investments and to a one-time $1,835,351 loss on fixed asset disposal in prior year.

Total net position at December 31, 2018 was $715,037,985, a 6.1% increase over total net position at December 31, 2017.

Contacting the District’s Financial Management

This financial report is designed to provide the bondholders, customers, and other interested parties with a general overview of the District’s finances and to demonstrate the District’s accountability for the money it receives. If you have any questions about this report or need additional financial information, address your request to the Executive Director or the Deputy Executive Director of Finance and Operations, 32386 Lankford Highway, Cape Charles, Virginia 23310.


Statements of Net Position

December 31, 2018 and 2017

Assets and Deferred Outflows of Resources 2018 2017

Current assets:

Cash (note 3) $ 1,560,204 1,087,713 Investments (notes 3 and 6) 100,375,919 63,310,754 Accounts receivable and accrued interest receivable, net 1,448,762 1,147,137 Prepaid expenses and other assets 309,199 306,068

Total current assets 103,694,084 65,851,672 Restricted assets:

Cash (note 3) 15,837 13,520 Investments (notes 3 and 6) 166,714,405 247,568,530 Accrued interest receivable 180,334 22,057

Total restricted assets 166,910,576 247,604,107

Investments (notes 3 and 6) 118,364,166 134,077,214 Capital assets (note 4):

Bridge and tunnel facilities, including capitalized interest 422,370,201 422,370,201 Construction in progress – Thimble Shoal Parallel Tunnel 289,025,110 194,641,207 Miscellaneous capital assets, net of accumulated depreciation 10,099,778 10,701,555

Total capital assets 721,495,089 627,712,963

Bond insurance costs, net of accumulated amortization 2,688,647 2,800,940 Deferred outflow of resources:

Pension contributions 970,166 964,226 Differences between expected and actual experience - Pension 39,650 86,299 Pension investment experience — 809,919 OPEB Contributions 216,136 — Differences between expected and actual experience - OPEB 246,608 —

Total deferred outflows of resources 1,472,560 1,860,444

Total assets and deferred outflows of resources $ 1,114,625,122 1,079,907,340

Liabilities, Deferred Inflows and Net Position

Current liabilities:

Accounts payable and accrued expenses $ 4,367,644 18,929,286 Accrued interest 7,912,875 7,912,875 Unearned revenue 697,344 702,644

Total current liabilities 12,977,863 27,544,805

Long-term liabilities:

Long-term debt, net of current portion (note 5) 369,480,629 360,517,900 Net pension liability 10,414,363 12,591,061 Other postemployment benefit liability 5,148,033 5,367,423

Total long-term liabilities 385,043,025 378,476,384

Deferred inflows of resources:

Differences between expected and actual experience - Pension 262,839 266,887 Change in Assumptions - Pension 453,204 — Pension investment experience 469,713 — Change in Assumptions - OPEB 380,493 —

Total deferred inflows of resources 1,566,249 266,887

Total liabilities and deferred inflows of resources 399,587,137 406,288,076

Commitments and contingencies

Net position:

Net investment in capital assets 459,293,771 431,338,641 Restricted for debt service 54,391,197 61,936,728 Restricted for forfeited property 11,164 — Unrestricted 201,341,853 180,343,895

Total net position 715,037,985 673,619,264

Total liabilities and net position $ 1,114,625,122 1,079,907,340

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Three Months Ended Six Months Ended Twelve Months EndedDecember, 2018 December, 2017 December, 2018 December, 2017 December, 2018 December, 2017

Operating revenues: Toll $ 12,723,978 12,768,907 31,134,071 31,532,291 55,899,454 56,710,311 Other 261,718 299,224 499,859 731,630 1,112,779 1,298,169

Total operating revenues 12,985,696 13,068,131 31,633,930 32,263,921 57,012,233 58,008,480

Operating Expenses: Administration 72,256 76,029 159,750 155,444 303,115 275,908 Finance 201,125 164,269 380,327 341,909 790,769 727,530 Operations 1,154,816 1,095,233 2,280,184 2,183,294 4,459,193 4,329,040 Maintenance 875,912 942,412 1,806,989 1,861,116 3,803,775 3,746,705 General 854,664 854,359 1,739,401 1,726,867 3,498,000 3,302,570 Consultants 156,811 76,285 214,181 168,996 583,163 617,828 Utilities 195,847 187,213 377,453 360,867 785,946 767,411

Total operating expenses before district facility expenses 3,511,432 3,395,801 6,958,285 6,798,491 14,223,961 13,766,992

District Facility Expenses: Insurance Expenses 211,448 219,233 464,708 397,370 1,020,745 837,362 Depreciation Expenses 99,317 287,857 387,174 575,715 964,433 1,212,627 Bridge and Tunnel Preservation Expenses 2,469,132 363,858 3,365,220 1,425,553 4,276,804 2,771,525 Other Capital Asset Expenses & Expenditures 31,068 163,950 86,741 369,517 (232,888) 189,354

Total district facility expenses 2,810,965 1,034,899 4,303,843 2,768,155 6,029,094 5,010,868

Total operating and district facility expenses 6,322,397 4,430,700 11,262,127 9,566,645 20,253,055 18,777,860

Operating income 6,663,300 8,637,431 20,371,803 22,697,275 36,759,178 39,230,620

Nonoperating revenues (expenses): Change in fair value of investments 1,537,130 (1,277,159) 1,546,304 (1,443,469) 330,691 (2,280,709) Interest income 1,881,071 1,490,690 3,685,984 3,081,457 6,869,741 6,708,106 Interest expense - Bonds (329,781) (1,601,327) (795,235) (3,591,938) (2,866,425) (9,088,401) Bond Issuance Costs - - - - - (356,822) Loss on Asset Disposal - (1,835,351) - (1,835,351) - (1,835,351) Other expenses, net (13,500) (13,515) (13,500) (12,831) (12,726) (6,083)

Total nonoperating expenses, net 3,074,920 (3,236,662) 4,423,553 (3,802,131) 4,321,281 (6,859,260)

Increase in net position 9,738,220 5,400,770 24,795,356 18,895,144 41,080,459 32,371,360

Total net position, beginning of period 705,299,765 668,218,495 690,242,629 654,724,120 673,619,264 641,247,904

Prior year adjustment of net position (note2) - - - - 338,262 -

Total net position, end of period $ 715,037,985 673,619,264 715,037,985 673,619,264 715,037,985 673,619,264

Chesapeake Bay Bridge & Tunnel District

Statement of Revenues, Expenses, and Changes in Net Position

As of December 31, 2018 & 2017

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Statements of Cash Flows

For the period ended December 31, 2018 and 2017

Q2 FY2019 Q2 FY2018 FYTD 2019 FYTD 2018

Cash flows from operating activities:Toll collections from customers $ 12,640,976 12,572,073 31,025,555 31,235,334 Scrip sales 76,836 112,120 171,877 210,585 Leasing revenue 255,224 256,588 427,369 682,580 Payments to employees for services and employee benefits (3,103,948) (3,073,518) (6,317,550) (5,598,351) Payments to suppliers and consultants (1,933,897) (1,106,239) (2,880,904) (2,685,218) Other (253,142) (183,268) (281,504) (316,450)

Net cash provided by operating activities 7,682,049 8,577,756 22,144,843 23,528,480

Cash flows from investing activities:Purchases of investments (111,077,824) (118,200,155) (308,584,334) (494,698,989)Interest income 1,825,006 1,825,201 3,299,410 3,372,875 Sales and maturities of investments 109,911,788 137,131,177 326,129,918 551,254,803

Net cash used in investing activities 658,970 20,756,223 20,844,994 59,928,689

Cash flows from capital and related financing activities:Capitalized expenditures (8,443,905) (29,145,218) (44,963,695) (75,728,867) Forfeited assets (1,532) 933 — 1,617 Bond proceeds — — 10,385,296 — Disposal of capital assets — 648 — 1,582 Other miscellaneous non-operating expenditures (13,500) (13,000) (13,500) (13,000) Interest paid — — (7,912,875) (7,912,875)

Net cash provided by (used in) capital and related financing activities (8,458,937) (29,156,637) (42,504,774) (83,651,543)

Net increase (decrease) in cash (117,918) 177,342 485,063 (194,374)

Cash, beginning of period 1,693,959 923,891 1,090,978 1,295,607

Cash, end of period $ 1,576,041 1,101,233 1,576,041 1,101,233

Cash and restricted cash are presented in the accompanying statements of net assets as follows:Cash $ 1,560,204 1,087,713 1,560,204 1,087,713 Restricted cash 15,837 13,520 15,837 13,520

$ 1,576,041 1,101,233 1,576,041 1,101,233

Reconciliation of operating income to net cash provided by operating activities:

Operating income $ 6,663,300 8,636,784 20,371,803 22,695,694 Adjustments to reconcile operating income to net cash provided by operating activities:

Depreciation 99,317 287,857 387,174 575,715 (Increase) decrease in operating assets:

Accounts receivable (190,412) (103,504) (103,887) 383,505 Prepaid expenses and other assets 177,611 177,261 321,172 323,478

Increase (decrease) in operating liabilities:Accounts payable and accrued expenses 976,558 (394,678) 1,247,943 (389,235) Unearned revenue (44,325) (25,964) (79,362) (60,677)

Net cash provided by operating activities $ 7,682,049 8,577,756 22,144,843 23,528,480

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Cash Investments TotalsGENERAL REVENUE BOND RESOLUTION FUNDS:

Unrestricted:Revenue Fund 1,510,944$ 2,323,498 3,834,442 Operations & Maintenance Reserve Fund - 3,872,969 3,872,969 Reserve Maintenance Fund 24,639 17,312,624 17,337,263 General Fund 24,621 195,230,994 195,255,615

Restricted:Parallel Thimble Shoal Tunnel Project Fund - 102,032,632 102,032,632 Parallel Thimble Shoal Tunnel Project Fund - TIFIA - 1,344,991 1,344,991 Parallel Thimble Shoal Tunnel Project Fund - VTIB - 9,106,357 9,106,357 Series 2016 Bonds - Capitalized Interest Fund - 24,127,391 24,127,391 Series 2016 Bonds - Interest Fund - 3,956,971 3,956,971 TIFIA Debt Service Reserve Fund - 22,774,870 22,774,870 VTIB Debt Service Reserve Fund - 3,371,193 3,371,193

OTHER RESTRICTED ASSETS:

Restricted Asset Forfeited Property Account 15,837 - 15,837

Totals 1,576,041$ 385,454,490 387,030,531

As of December 31, 2018

Chesapeake Bay Bridge and Tunnel DistrictStatement of Cash & Investments

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BB&TCoupon Maturity Maturity Market Value

Description Rate Date Value 12/31/2018Revenue Bond - Revenue Fund

BB&T Trust Deposit Variable Not Fixed 2,323,498.52$ 2,323,498.52$ 2,323,498.52 2,323,498.52

General Revenue Bond - Operations & Maintenance Reserve FundBB&T Trust Deposit Variable Not Fixed 3,872,968.76 3,872,968.76

3,872,968.76 3,872,968.76

General Revenue Bond - TIFIA Debt Service Reserve Fund US Treasury Notes 1.125% 12/31/19 11,606,000.00 11,435,078.44 FNMA Benchmark Notes 1.875% 12/18/20 11,360,000.00 11,214,569.28

BB&T Trust Deposit Variable Not Fixed 125,222.25 125,222.25 23,091,222.25 22,774,869.97

General Revenue Bond - VTIB Debt Service Reserve Fund US Treasury Notes 1.125% 12/31/19 1,715,000.00 1,689,743.20 FNMA Benchmark Notes 1.875% 12/28/20 1,680,000.00 1,658,492.64


General Revenue Bond - Series 2016 Interest FundBB&T Trust Deposit Variable Not Fixed 3,956,971.20 3,956,971.20

3,956,971.20 3,956,971.20 2016 Thimble Shoal Project Fund

Local Government Investment Pool Variable Not Fixed 102,027,020.46 102,027,020.46 BB&T Trust Deposit Variable Not Fixed 5,611.21 5,611.21

102,032,631.67 102,032,631.67 2016 Thimble Shoal Project Fund - TIFIA US Treasury Notes 0.875% 04/15/19 9,091,000.00 9,051,054.15


2016 Thimble Shoal Project Fund - VTIB US Treasury Notes 0.875% 04/15/19 1,342,000.00 1,336,103.25


2016 Capitalized Interest Fund US Treasury Notes 1.625% 06/30/19 3,805,000.00 3,787,759.55 US Treasury Notes 1.625% 12/31/19 3,835,000.00 3,796,799.57 US Treasury Notes 1.625% 06/30/20 3,865,000.00 3,812,760.66 US Treasury Notes 1.750% 12/31/20 3,900,000.00 3,844,393.80 US Treasury Notes 1.125% 06/30/21 4,900,000.00 4,742,474.80

BB&T Trust Deposit Variable Not Fixed 4,143,202.26 4,143,202.26 24,448,202.26 24,127,390.64

GR Reserve Maintenance Fund US Treasury Notes 0.750% 02/15/19 3,050,000.00 3,044,083.00 US Treasury Notes 1.500% 02/28/19 10,680,000.00 10,664,716.92 US Treasury Notes 0.750% 07/15/19 2,100,000.00 2,079,903.00 BB&T Trust Deposit Variable Not Fixed 1,523,920.58 1,523,920.58

17,353,920.58 17,312,623.50 GR General Fund Svenska Handelsbanken NY LT CD 1.890% 01/10/19 3,750,000.00 3,749,437.50 BNP Paribas NY Branch Commercial Paper Discount 02/25/19 3,000,000.00 2,987,922.00 Credit Agricole CIB NY Commercial Paper Discount 02/25/19 4,400,000.00 4,382,334.00 MUFG Bank LTD Commercial Paper Discount 02/25/19 5,420,000.00 5,397,783.42 JP Morgan Securities Commercial Paper Discount 02/25/19 5,425,000.00 5,402,491.68 Freddie Mac Global Notes 1.750% 05/30/19 5,000,000.00 4,984,145.00 Freddie Mac Global Notes 1.750% 05/30/19 2,210,000.00 2,202,992.09 US Treasury Notes 1.500% 05/31/19 540,000.00 537,806.52 US Treasury Notes 1.250% 06/30/19 2,150,000.00 2,136,562.50 US Treasury Notes 1.000% 06/30/19 2,400,000.00 2,382,000.00 Federal Home Loan Mortgage Corp. Notes 0.875% 07/19/19 6,320,000.00 6,259,713.52 Freddie Mac Global Notes 1.250% 08/01/19 2,300,000.00 2,280,859.40 Federal Home Loan Bank 0.875% 08/05/19 5,000,000.00 4,948,835.00 Freddie Mac Notes 1.375% 08/15/19 1,965,000.00 1,949,213.19 US Treasury Notes 1.250% 08/31/19 6,560,000.00 6,500,809.12 US Treasury Notes 1.000% 09/30/19 1,755,000.00 1,734,227.82 Freddie Mac Global Notes 1.250% 10/02/19 3,000,000.00 2,969,001.00 International Bank of Recon & Dev Global 1.875% 10/07/19 1,675,000.00 1,663,901.45 Fannie Mae Global Notes 1.000% 10/24/19 7,100,000.00 7,005,889.50 FNMA Benchmark Note 1.750% 11/26/19 2,000,000.00 1,983,892.00 US Treasury Notes 1.500% 11/30/19 5,030,000.00 4,978,130.64 US Treasury Notes 1.875% 12/31/19 2,740,000.00 2,720,091.16 US Treasury Notes 1.875% 12/31/19 3,025,000.00 3,003,020.35

Freddie Mac Global Notes 1.500% 01/17/20 1,850,000.00 1,829,248.55 Freddie Mac Agency Notes 1.500% 01/17/20 5,000,000.00 4,943,915.00 IBM Corporation Notes 1.900% 01/27/20 3,650,000.00 3,608,448.40 US Treasury Notes 1.250% 01/31/20 2,635,000.00 2,596,916.35 Microsoft Corp. 1.850% 02/06/20 910,000.00 903,396.13 Apple Inc. Bonds 1.900% 02/07/20 2,945,000.00 2,919,428.57 Federal Home Loan Bank Notes 2.125% 02/11/20 3,210,000.00 3,194,964.36 Nordea Bank CD 2.720% 02/20/20 2,690,000.00 2,688,364.48 Federal National Mortgage Assn. 1.500% 02/28/20 7,600,000.00 7,513,496.80

Statement of InvestmentsAs of December 31, 2018

Chesapeake Bay Bridge and Tunnel District

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Chesapeake Bay Bridge and Tunnel District

BB&TCoupon Maturity Purchase Maturity Market Value

Description Rate Date Date Value 12/31/2018

General Fund (Continued): Toyota Motor Credit Corp. 1.950% 04/17/20 04/11/17 1,005,383.40 1,007,331.60 Federal Home Loan Mortgage Corp. Notes 1.375% 04/20/20 04/20/17 1,956,606.23 1,964,799.69 Federal Home Loan Mortgage Corp. Notes 1.375% 04/20/20 05/31/17 8,826,795.00 8,863,758.00 Federal Home Loan Mortgage Corp. Notes 1.375% 04/20/20 06/29/17 2,157,661.00 2,166,696.40 Federal Home Loan Mortgage Corp. Notes 1.375% 04/20/20 06/05/17 4,280,995.58 4,298,922.63 Federal Home Loan Mortgage Corp. Notes 1.375% 04/20/20 06/26/17 2,942,265.00 2,954,586.00 Federal Home Loan Mortgage Corp. Notes 1.375% 04/20/20 11/13/17 1,539,785.35 1,546,233.34 FNMA Notes 1.500% 07/30/20 08/31/17 3,670,916.25 3,687,993.75 US Treasury Notes 1.625% 07/31/20 09/26/18 1,995,571.88 2,006,143.70 International Bank of Recon & Dev Global 1.561% 09/12/20 09/19/17 3,274,912.80 3,293,522.98 Federal Home Loan Bank Notes 1.375% 09/28/20 09/07/17 2,264,517.45 2,277,988.50 Federal Home Loan Bank Notes 2.625% 10/01/20 12/31/18 770,400.40 771,001.77 Proctor & Gamble Co. Corp. Notes 1.900% 10/23/20 10/25/17 714,578.02 719,398.94 Swedbank New York CD 2.270% 11/16/20 11/17/17 2,598,522.84 2,604,655.89 Johnson & Johnson Corp. Notes 1.950% 11/10/20 11/10/17 740,472.29 743,940.01 Federal Home Loan Mortgage Corp. Notes 1.875% 11/17/20 12/06/17 2,006,412.90 2,019,535.66 Walmart Stores Inc. Corp. Notes 1.900% 12/15/20 10/20/17 3,321,854.40 3,346,660.80 Asian Development Bank Note 2.250% 01/20/21 01/19/18 1,706,530.82 1,719,386.45 Freddie Mac Notes 2.375% 02/16/21 07/05/18 2,429,323.16 2,446,476.24 Freddie Mac Notes 2.375% 02/16/21 08/03/18 2,968,623.00 2,989,584.00 Berkshire Hathaway Inc. 2.200% 03/15/21 03/05/18 2,474,621.20 2,491,882.10 African Development Bank Note 2.625% 03/22/21 03/14/18 1,285,617.73 1,295,502.46 Toyota Motor Credit Corp. Notes 2.950% 04/13/21 04/10/18 2,069,879.57 2,090,313.50 Federal Home Loan Mortgage Corp. Notes 6.000% 06/01/21 06/22/06 44,315.84 44,310.42 US Treasury Notes 1.125% 06/30/21 09/26/17 5,519,698.56 5,574,827.52 US Treasury Notes 1.125% 06/30/21 10/26/17 3,215,032.76 3,247,143.46 US Treasury Notes 1.125% 06/30/21 08/28/17 3,315,652.26 3,348,767.92 US Treasury Notes 1.125% 06/30/21 11/30/17 2,683,186.80 2,709,985.60 US Treasury Notes 1.125% 07/01/21 01/25/18 1,964,476.05 1,984,096.60 International Bank of Recon & Dev Global 2.750% 07/23/21 07/25/18 2,622,918.53 2,645,716.55 US Treasury Notes 2.000% 10/31/21 03/01/18 2,769,219.50 2,798,564.58 Federal National Mortgage Assn. 5.500% 11/01/21 11/16/06 23,682.66 23,570.87 Federal Home Loan Mortgage Corp. Notes 5.500% 02/01/22 04/10/07 62,062.54 62,107.54 Fannie Mae Pool 3.000% 06/01/22 08/17/12 258,458.74 260,688.51 Federal Home Loan Mortgage Corp. Notes 6.000% 07/01/22 07/17/07 33,152.38 33,155.87 GNMA Pool #5276 3.000% 01/01/27 04/16/13 467,200.08 471,402.35 GNMA Pool #794283 3.500% 03/01/27 04/16/13 276,277.21 278,360.13 GNMA Pool #MA0007 3.000% 04/01/27 06/18/12 779,717.38 786,729.74 Fannie Mae Pool #1084 3.500% 06/01/32 07/17/12 857,269.96 867,136.99 BB&T Trust Deposit Variable Not Fixed 428,877.71 428,877.71

195,578,445.23 195,230,994.27 Total All Investments 395,719,311.81$ 385,454,489.85$

Statement of InvestmentsAs of December 31, 2018

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DESCRIPTION/CLASS CURRENT YEAR

3 Months 6 Months 12 MonthsOctober November December Ended Ended Ended

Cars/Light Trucks: 2018 2018 2018 12/31/18 12/31/18 12/31/18

Class 1 221,824 228,876 215,264 665,964 1,667,296 2,926,629 Class 1 Round Trip 31,648 30,096 31,328 93,072 195,747 369,828 Class 1 Commuter 15,525 14,895 13,438 43,858 85,111 170,110 Class 2 2,546 1,845 1,449 5,840 18,161 31,526 Class 2 Round Trip 305 279 283 867 2,017 3,678 Class 3 4,205 2,658 2,284 9,147 24,857 43,325 Class 3 Round Trip 389 370 451 1,210 2,375 4,367 Class 4 240 193 143 576 1,266 2,382 Class 4 Round Trip 28 17 26 71 139 231 Sub Total 276,710 279,229 264,666 820,605 1,996,969 3,552,076

Heavy Trucks:

Class 9 5,021 4,440 3,953 13,414 29,338 56,131 Class 10 1,895 1,491 1,150 4,536 9,151 18,082 Class 11 1,248 887 738 2,873 6,514 12,840 Class 12 25,103 23,390 21,472 69,965 140,894 275,884 Class 13 266 212 176 654 1,261 2,995 Class 16 76 51 44 171 338 761 Sub Total 33,609 30,471 27,533 91,613 187,496 366,693

Buses:

Class 8 146 139 146 431 687 1,574 Class 14 102 30 20 152 440 723 Class 15 931 859 794 2,584 5,309 10,571 Sub Total 1,179 1,028 960 3,167 6,436 12,868

Totals 311,498 310,728 293,159 915,385 2,190,901 3,931,637

DESCRIPTION/CLASS PRIOR YEAR

3 Months 6 Months 12 MonthsOctober November December Ended Ended Ended

Cars/Light Trucks: 2017 2017 2017 12/31/17 12/31/17 12/31/17

Class 1 229,344 229,672 213,072 672,088 1,699,585 3,006,152 Class 1 Round Trip 30,129 30,107 30,260 90,496 191,189 360,891 Class 1 Commuter 15,589 15,116 14,009 44,714 89,782 174,523 Class 2 2,797 1,882 1,445 6,124 19,213 32,408 Class 2 Round Trip 277 268 232 777 1,876 3,478 Class 3 4,072 2,537 2,000 8,609 23,280 40,488 Class 3 Round Trip 324 280 320 924 1,964 3,829 Class 4 172 173 152 497 1,112 2,056 Class 4 Round Trip 19 12 10 41 89 202 Sub Total 282,723 280,047 261,500 824,270 2,028,090 3,624,027

Heavy Trucks:

Class 9 5,078 4,542 3,852 13,472 29,663 56,962 Class 10 1,679 2,163 1,783 5,625 11,024 20,334 Class 11 1,244 1,026 775 3,045 7,276 14,345 Class 12 23,962 23,521 21,025 68,508 136,841 265,345 Class 13 257 356 306 919 1,895 3,389 Class 16 90 68 61 219 482 1,019 Sub Total 32,310 31,676 27,802 91,788 187,181 361,394

Buses:

Class 8 149 88 114 351 692 1,629 Class 14 96 43 22 161 467 726 Class 15 900 920 817 2,637 5,596 11,452 Sub Total 1,145 1,051 953 3,149 6,755 13,807

Totals 316,178 312,774 290,255 919,207 2,222,026 3,999,228


Vehicular Traffic Statistics

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December 31, 2018

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(1) Organization and Summary of Operations

The Chesapeake Bay Bridge and Tunnel District (the District) was created as a political subdivision of the Commonwealth of Virginia by Chapter 693 of the Acts of Virginia of 1954. Chapter 693 was subsequently amended by the following Chapters of the Acts of Virginia: Chapters 462 and 714 of the 1956 Session, Chapter 24 of the 1959 Extra Session, Chapters 228 and 605 of the 1962 Session, Chapter 348 of the 1964 Session, Chapter 203 of the 1990 Session, Chapter 548 of the 1998 Session, Chapters 238 and 705 of the 2000 Session, and Chapters 270 and 297 of the 2005 Session, (collectively, the Acts). All such Acts have been codified into Title 33.2 Code of Virginia, Chapter 22. The District comprises the area, all within the Commonwealth of Virginia, in Accomack and Northampton Counties, the Cities of Virginia Beach, Hampton, Newport News, Chesapeake, Norfolk, and Portsmouth, and the area of the Chesapeake Bay between these subdivisions.

By the Acts, the Chesapeake Bay Bridge and Tunnel Commission (the Commission) was created as the governing body of the District. These Acts authorized the Commission to acquire, establish, construct, maintain, repair, and operate a project comprising public ferry service over and across the waters between any two points within the boundaries of the District, where such public ferry services would form a connecting link in the system of state highways.

Under the Acts, the Commission was also authorized to establish, construct, maintain, repair, and operate a bridge or tunnel or a bridge and tunnel project from any point within the boundaries of the District to a point in the County of Northampton, including such approaches and approach highways as the Commission deemed necessary to facilitate the flow of traffic in the vicinity of such project or to connect such project with the highway system or other facilities in the state.

The Chesapeake Bay Bridge and Tunnel (the Bridge-Tunnel) is a 20-mile, four-lane trestle and bridge and two-lane tunnel crossing at the mouth of the Chesapeake Bay between the City of Virginia Beach and Northampton County on the Eastern Shore of Virginia. The Bridge-Tunnel consists principally of low-level trestles, four bridges, two tunnels, approach highways, and an earth-fill causeway. The Bridge-Tunnel is designated as part of U.S. Route 13, the main north-south highway on Virginia’s Eastern Shore and the only direct link between Virginia’s Eastern Shore and the metropolitan area of south Hampton Roads, Virginia.

The District sold a revenue bond issue of $200,000,000 (1960 Bonds) under a Trust Indenture dated July 1, 1960, and constructed the two-lane bridge and tunnel project. The project was opened to traffic on April 15, 1964. The Commission discontinued ferry service following the opening of the two-lane bridge and tunnel project.

On April 15, 1964, the Bridge-Tunnel opened as a two-lane facility. A three-staged parallel crossing project began in 1995. Stage 1 of this project was completed in April 1999. This stage included construction of parallel trestles, bridges, roadways, and rehabilitation of the original two-lane facility. Stage 2 is ongoing and will consist of construction of an additional two-lane tunnel under Thimble Shoal Channel. Stage 3 will complete the parallel crossing with construction of an additional two-lane tunnel under Chesapeake Channel.



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(2) Summary of Significant Accounting Policies

The District is accounted for under the economic resources measurement focus and the accrual basis of accounting as a special-purpose government engaged in business-type activities, which follows enterprise fund reporting. Special-purpose governments engaged in business-type activities are used to account for the ongoing activities that are financed and operated similar to those often found in the private sector. Accordingly, revenues are recognized in the period earned and expenses are recognized when they are incurred. The District distinguishes operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from the District’s ongoing operations. Operating revenues include revenue from toll collection, recognized when travelers cross the bridge and tunnel, and lease income. Operating expenses include District facility and administrative expenses. All revenues and expenses not meeting these definitions are reported as nonoperating revenues and expenses.

The statements of net position reports all assets, deferred outflows of resources, liabilities, deferred inflows of resources, and the residual net position of the District. Deferred outflows of resources are defined as a consumption of net position by the District that is applicable to a future reporting period. Similarly, deferred inflows of resources are defined as an acquisition of net position by the District that is applicable to a future reporting period.

(a) Cash and Investments

Cash includes cash on hand and various checking accounts.

In accordance with GAAP, the District reports its investment securities at fair market value. Fair market value is determined as of the statements of net position date. The fair value is based on either quotations obtained from national security exchanges or on the basis of quotations provided by a pricing service, which uses information with respect to transactions on bonds, quotations from bond dealers, market transactions in comparable securities, and various relationships between securities.

(b) Restricted Assets

In accordance with applicable covenants of certain bond issues, cash, investments, and accrued interest receivables have been appropriately restricted. When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, and then unrestricted resources, as they are needed.

(c) Capital Assets

The bridge and tunnel assets are stated at cost and include capitalized interest. No provision for depreciation or obsolescence of the Bridge-Tunnel facilities is provided as the District has adopted the modified approach to account for these assets. Nonbridge and tunnel assets are being depreciated over their estimated useful lives of 3 years up to 50 years.

(d) Restricted Net Position

Restricted net position, as defined by GAAP, is reported when constraints are placed on the use of assets either externally by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling



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legislations. At December 31, 2018 and 2017, the District had net position restricted for debt service of $54,391,197 and $61,936,728, respectively.

(e) Management’s Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and deferred outflows and liabilities and deferred inflows and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(f) Revenue Recognition

Toll revenues represent the tolls collected, net of any deductions such as credit card fees, EZ Pass fees and medical and educational toll discounts. Revenues are recognized when earned.

(g) Pensions

For purposes of measuring net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the District’s Retirement Plan and the additions to/deductions from the District’s Retirement Plan’s net fiduciary position have been determined on the same basis as they were reported by the Virginia Retirement System (VRS). For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

(h) New Accounting Pronouncements

In FY2018, the District adopted GASB Statement No. 75 – Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions., which replaces the requirements of Statements No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, as amended, and No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans, for OPEB. Statement No. 75 addresses accounting and financial reporting for other postemployment benefits (OPEB), like retiree health insurance, that is provided to the employees of state and local governmental employers. This Statement establishes standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures. For defined benefit OPEB, this Statement identifies the methods and assumptions that are required to be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. Note disclosure and required supplementary information requirements about defined benefit OPEB also are addressed.

Due to limitations on the information available for the prior fiscal year, it was determined to be impractical for the District to restate the FY17 financial statements. As such, the cumulative effect of applying GASB Statement No. 75 is being reported as a prior period adjustment increasing the beginning balance of net position for FY18 by $338,262 of which $213,142 represents deferred outflows of resources related to benefit payments/OPEB contributions made by the District in FY17 that will be recognized in



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total OPEB liability in FY18 under GASB Statement No. 75. The remaining adjustment of $125,120 is a result of a decrease in the total OPEB liability at June 30, 2017.

(3) Cash Deposits and Investments.

(a) Deposits

The carrying value of the District’s deposits (unrestricted and restricted) was $1,576,041 and $1,101,233 at December 31, 2018 and 2017, respectively. The entire bank balance was covered for both fiscal years by federal depository insurance or collateralized in accordance with the Virginia Security for Public Deposits Act (VSPD Act). In accordance with the VSPD Act, the District’s depository institution pledged collateral in the form of federal agency obligations with a market value equal to 110% of the District’s deposits with a third-party trustee in the name of the Treasurer of the Commonwealth of Virginia. In the event that the banking institution fails, the Treasurer will take possession of the collateral, liquidate it, and reimburse the District up to the value of its deposits. The State Treasury Board is responsible for monitoring compliance with the collateralization and reporting requirements of the VSPD Act and for notifying local governments of compliance by banks.

(b) Investments

The District is authorized to invest in obligations of the United States or agencies thereof; obligations of any state or territory of the United States and any political subdivision thereof; obligations permitted by the laws of the Commonwealth of Virginia; repurchase agreements with respect to the foregoing obligations; certificates of deposit, time deposits, or interest in money market portfolios issued by any bank, banking association, savings and loan association, or trust company insured by the FDIC or Federal Savings and Loan Insurance Corporation; commercial paper, shares in one or more open-ended investment funds provided that the funds are registered under the State Securities Act or the Federal Investment Company Act; bankers’ acceptances; and units representing beneficial interests in investment pools created pursuant to the Government Non-Arbitrage Investment Act of the Commonwealth of Virginia.

(c) Credit Risk

Credit risk is defined as the risk that an issuer or other counterparty to an investment will not fulfill its obligations. As required by state statute, the policy requires that commercial paper have a short-term debt rating of no less than “A-1” (or its equivalent) from at least two of the following: Moody’s Investors Service, Standard & Poor’s, Fitch Investors Service, and Duff and Phelps. Corporate notes, negotiable certificates of deposit, and bank deposit, notes maturing in less than one year must have a short-term debt rating of at least “A-1” by Standard & Poor’s and “P-1” by Moody’s Investors Service. Notes having a maturity of greater than one year must be rated “AA” by Standard & Poor’s and “Aa” by Moody’s Investors Service.



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The District’s investment securities using the Standard & Poor’s credit quality ratings scale are presented below:

(d) Concentration of Credit Risk

The District’s investment policy establishes guidelines on portfolio composition by investment type in order to control concentration of credit risk. As of December 31, 2018, the District’s portfolio was invested as follows:

2018 PercentageInvestment type Fair value of portfolio

U.S. Treasuries $ 107,543,964 27.90%U.S. Agencies 100,926,804 26.18Federal Agency Mortgage-

Backed 2,827,462 0.73Supra-National Agency 10,618,030 2.75Certificate of Deposit 9,042,458 2.35Money Market Funds 118,494,441 30.74Commercial Paper 18,170,531 4.71Corporate Notes 17,830,800 4.63

$ 385,454,490 100.0%

(e) Interest Rate Risk

Interest rate risk is defined as the risk that changes in interest rates will adversely affect the fair value of an investment. The District’s investment policy limits the investment of funds as a means of limiting exposure to fair value losses. Investments in the General Resolution General Fund are limited to investments with maturities that are consistent with the schedule of planning, development, and construction of parallel tunnels that would complete the parallel crossing. Investments are selected based on the current perception of the direction of interest rates with a greater emphasis on yield and a lesser emphasis on liquidity.

Standard & Poor Credit RatingTotal AAA AA+ AA AA- A-1+ A-1 A+

US Treasuries 107,543,964$ - 107,543,964 - - - - - Supra-National Agency 10,618,030 10,618,030 - - - - - -

US Agencies 100,926,804 - 100,926,804 - - - - - Federal Agency

Mortgage-Backed 2,827,462 - 2,827,462 - - - - - Commercial Paper 18,170,531 - - - - - 18,170,531 -

Certificate of Deposit 9,042,458 - - - 9,042,458 - - - Corporate Notes 17,830,800 1,647,336 2,919,429 5,838,543 3,817,044 - - 3,608,448

266,960,049$ 12,265,366 214,217,659 5,838,543 12,859,502 - 18,170,531 3,608,448



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Proceeds from the sale of bonds issued by the District are invested in compliance with the specific requirements of the bond covenants without further restriction as to the maximum term of securities purchased.

As of December 31, 2018, the District had the following investments and maturities:

Investment maturities (in years)Fair Less Greater Not

Investment type value than 1 year 1 to 3 years than 3 years fixed

U.S. Treasuries $ 107,543,965 48,233,157 59,310,808 — — U.S. Agencies 100,926,804 34,584,541 66,342,263 — —Federal Agency Mortgage-Backed 2,827,462 — 44,310 2,783,152 —Supra-National Agency 10,618,029 1,663,901 8,954,128 — —Commercial Paper 18,170,531 18,170,531 — — —Certif icates of Deposit 9,042,458 3,749,438 5,293,020 — —Money Market Funds 118,494,441 — — — 118,494,441Corporate Notes 17,830,800 — 17,830,800 — —

Total $ 385,454,490 106,401,568 157,775,329 2,783,152 118,494,441

(f) Summary of Changes in Fair Value of Investments

The calculation of realized gains and losses is independent of the calculation of the change in fair value (including purchases and sales) that occurred during the year. Realized gains and losses on investments that were held by the District during previous years, but sold during the current year, were used to compute the change in fair value of investments for the previous year as well as the current year. The change in fair value of investments for the quarter ended December 31, 2018 is calculated as follows:

Q2 FY19

Fair value of investments at end of quarter $ 385,454,490 Add:

Proceeds from sales and maturities during the quarter 109,911,788

Less:Cost of investments purchased during the quarter (111,077,824) Fair value of investments at beginning of quarter (382,751,324)

Change in fair value of investments $ 1,537,130

(4) Capital Assets

Capital assets include bridge and tunnel assets, capitalized interest and financing expenses, and other capital assets. The bridges, trestles, approach roads, Fisherman Island Causeway, tunnels, portal islands with all attached improvements, toll plaza infrastructure and the rest area facility, and site-wide utilities are



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classified as bridge and tunnel assets. Capitalized interest and financing expenses include the amount of money that was funded from the 1960 Bonds issued for debt service and associated costs of the bonds during construction until the opening of the Bridge-Tunnel in 1964. Miscellaneous capital assets include all other assets that the District has capitalized such as land, buildings, fleet vehicles, and equipment.

The District utilizes the modified approach to infrastructure reporting on bridge and tunnel assets and capitalized interest and financing expenses. In lieu of reporting depreciation on bridge and tunnel assets, the costs incurred for maintaining bridge and tunnel assets at the condition level that is specified by Commission policy are reported as preservation expenses on the accompanying statements of revenues, expenses, and changes in net position.

The District has elected to continue to use the traditional approach or depreciation method for buildings, fleet vehicles, and equipment that are depreciable, as stipulated in the District’s Capital Asset Policy.

U.S. generally accepted accounting principles (GAAP) requires that governmental entities that utilize the modified approach for infrastructure reporting must have their governing board set a policy for the condition levels at which modified approach assets will be maintained. GAAP also requires that a third party perform condition level assessments of the modified approach assets annually and that the condition levels for the current and prior two fiscal years be disclosed in the notes to the financial statements.

The Commission’s preservation policy is to maintain 90% of the bridge and tunnel assets at a maintenance rating program (MRP) condition level of “good” or better.



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Jacob’s Engineering, Inc., the District’s consulting engineer, has inspected the District’s bridge and tunnel assets. Jacob’s Engineering, Inc. determines the MRP condition level for the bridge and tunnel assets as a numeric scaled rating. The numeric scaled rating is based on a condition index utilized by the Virginia Department of Transportation whereby 0 is a failed condition level and 9 is an excellent condition level. The table below defines the numeric scaled ratings assigned by Jacob’s Engineering, Inc.:

MRP Numeric code scaleNumeric Narrative

code code Definition

9 ExcellentComponent/Element has been recently put in service or remains in new condition

8 Very Good No problems noted, potential exists for minor preventative maintenance

7 Good Potential exists for minor maintenance

6 Satisfactory Potential exists for major maintenance

5 Fair Potential exists for minor repair or rehabilitation

4 Poor Potential exists for major repair or rehabilitation

3 Serious Major repair or rehabilitation required

2 CriticalThe need for repair or rehabilitation is urgent. Component/Element should be taken out of service until indicated repair is complete.

1 Imminent Failure Component is out of service; study feasibility for repair or rehabilitation

0 Failed Component is out of service and beyond repair, replacement required

The following two tables derive percentages in different ways. Trestles and bridges that have an MRP numeric condition level are described as a percentage of lane miles. All other bridge and tunnel assets that have an MRP numeric condition level are described as a percentage of that specific bridge and tunnel asset.

The following tables detail the MRP condition level of bridge and tunnel assets for the last three years:

Percentage of capital assets at an MRP condition Level 7 or betterBridge and tunnel assets 2016 2017 2018

Approach roads 100% 100% 100%Fisherman Island Causeway 100 100 100Tunnels 96 77 87Portal islands 90 90 90Toll plaza infrastructure 100 100 96Site-wide utilities 97 97 100



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Percentage of land miles at an MRP condition Level 7 or betterBridge and tunnel assets 2016 2017 2018

Original bridges 100% 100% 100%Parallel crossing bridges 100 100 100Original trestles 100 100 100Parallel crossing trestles 100 100 100

(5) General Resolution Revenue Bonds

Bond activity for Q2 FY19 was as follows:

In July 2016, the Commission awarded a contract to Chesapeake Tunnel Joint Venture to design and build the Parallel Thimble Shoal Tunnel Project (the “Project”). On October 24, 2016, to finance the costs of the Project, the Commission adopted and approved a new General Revenue Bond Resolution (the “2016 Resolution”) along with three Supplemental Resolutions authorizing the issuance of $321,515,000 First Tier General Resolution Revenue Bonds, Series 2016 (the “Series 2016 Bonds”), a loan from the United States Department of Transportation under the TIFIA program (the “TIFIA Loan”) in the amount of up to $338,528,672, plus capitalized interest and a loan from the Virginia Transportation Infrastructure Bank (the “VTIB Loan”) in the amount of up to $50,000,000, plus capitalized interest.

The Series 2016 Bonds are term bonds maturing from July 1, 2041 through July 1, 2055 with coupon interest rate of 4.0% to 5.0%. The proceeds from the Series 2016 Bonds, along with the proceeds of the TIFIA Loan and VTIB Loan and cash contributed by the District will be utilized to finance the develoment and construction of the Parallel Thimble Shoal Tunnel Project. The remaining portion of the proceeds from the Series 2016 Bonds will be utilized to (i) pay capitalized interest on a portion of the Series 2016 Bonds to and including July 1, 2021, (ii) to obtain a municipal bond debt service reserve insurance policy for the Series 2016 Bonds, and (iii) to pay the related issuance expenses, including bond insurance premiums.

The Series 2016 Bonds are subject to optional redemption prior to maturity by the District on or after July 1, 2026, in whole or in part, at par plus accrued interest. The Series 2016 Bonds are subject to mandatory sinking fund redemption in part prior to maturity on July 1 of each year starting in 2035.

AmortizationBalance, of costs, Balance, Amounts due

September 30, Bond premiums, Capitalized December 31, within2018 proceeds discounts, net Interest 2018 one year

2016 Subordinate TierTIFIA Bonds $ 9,081,650 - - 65,688 9,147,338 -

2016 Subordinate TierVTIB Bonds 1,341,375 - - 9,770 1,351,145 -

2016 First Tier GeneralResolution Revenue Bonds 359,366,085 - (383,939) - 358,982,146 -

$ 369,789,110 - (383,939) 75,458 369,480,629 -



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The 2041 Term Bond and the 2055 Term Bond are insured by Assured Guaranty Municipal Corporation. The Series 2016 Bonds Debt Service Reserve Fund Requirement of $24,774,566 is secured by a debt service reserve fund policy also issued by Assured Guaranty Municipal Corporation.

The TIFIA Loan and the VTIB Loan are issued on the Subordinate Lein of the 2016 Resolution and bear interest rates of 2.88% and 2.90%, respectively. The loans do not incur interest until drawn which is in the Fall of 2018. Both loans have first semi-annual interest repayments commencing January 1, 2021 and first annual principal repayments commencing on July 1, 2025. Final repayment on both loans is July 1, 2054.

The underlying credit rating on the Series 2016 Bonds is Baa2 and BBB by Moody’s Investors Service and S&P Global Ratings, respectively. The TIFIA Loan is also rated Baa2 and BBB by Moody’s Investors Service and S&P Global Ratings, respectively. The VTIB Loan is unrated.

The bond premiums for General Resolution Revenue Bonds are being accreted using the straight-line method, which is not materially different from using the effective-interest method, over the period the bonds will be outstanding.

Tolls and other revenues derived from the operation of the Bridge-Tunnel are pledged as security for the General Resolution Revenue Bonds. The General Revenue Bond Resolution includes covenants such as minimum toll rate covenant ratios and minimum debt service reserve requirements.

(6) Fair Value Measurements

The District utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The District determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at measurement date.

Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantively the full term of the asset or liability.

Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identified assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements).

The level in the fair value hierarchy within which a fair value measurement, in its entirety falls in, is based on the lowest level input that is significant to the fair value measurement in its entirety.



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Portfolio investments are assigned a level based upon the observability of the inputs which are significant to the overall valuation. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

All of the District’s investments in debt securities are in one of the four categories below and therefore the entire portfolio of debt securities is Level 2.

Debt securities classified in Level 2 are valued using the following approaches:

U.S. Treasuries, U.S. Agencies, and Supra-Nationals: quoted prices for similar securities in the market are used to draw appropriate correlations;

Corporate Notes and Municipal Bonds: relevant trade data, benchmark quotes and surveys of the dealer community are incorporated into the evaluation process;

Certificates of Deposit: matrix pricing based on various market makers and dealers;

Federal Agency Mortgage-Backed: solicited prices from market buy and sell side sources, including primary and secondary dealers, portfolio managers and research analysts are used.

The fair value of investments in money market funds is based on the published net asset values per share of those funds. The District has the following recurring fair value measurements as of December 31, 2018:

Fair value measurements usingQuoted

prices inactive Significant

markets for other SignificantFair identical observable unobservable

value assets inputs inputs2018 (Level 1) (Level 2) (Level 3)

Investments by fair value level:U.S. Treasuries $ 107,543,965 — 107,543,965 — Supra-National Agency 10,618,030 — 10,618,030 — U.S. Agencies 100,926,803 — 100,926,803 — Federal agency mortgage-backed 2,827,462 — 2,827,462 — Certificate of Deposit 9,042,458 — 9,042,458 — Commercial Paper 18,170,531 — 18,170,531 — Corporate notes 17,830,800 — 17,830,800 —

Total investments by fairvalue level 266,960,049 — 266,960,049 —

Investments measured at the net assetvalue (NAV):

Money market funds 118,494,441

Total investments measuredat the NAV 118,494,441

Total investments measuredat fair value $ 385,454,490

Documents

CHESAPEAKE BAY BRIDGE AND TUNNEL DISTRICT...2018/12/03 · Overview of the Financial Statements The Chesapeake Bay Bridge and Tunnel District’s (the District) financial report for