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2008-12-31 SECRET ARY Inez Maldonado TOWN BOARD William H. Beale Vincent Bettina Ismay Czamiecki Joseph P. Paoloni TOWN SUPERVISOR Christopher J. Colsey 20 MIDDLEBUSH ROAD WAPPINGERS FALLS, NY 12590 WWW.TOWNOFWAPPINGER.US (845) 297-4] 58 - Main (845) 297-2744 - Direct (845) 297 -4558 - Fax TOWN CLERK Chris Masterson HIGHWAY SUPERINTENDENT Graham Foster January 15, 2010 TO: Hon. William Beale Hon. Vincent Bettina Hon. Ismay Czamiecki Hon. Joseph Paoloni CC: Hon. Chris Masterson, Town Clerk Fredrick A wino, Town Accountant RE: 2008 Town Audit Report Revisions 1. Attached find the modified page in respect to the 2008 Town Audit Report as prepared by Sedore and Company, in accordance with the advice provided by the Town Board at the January 25,2010 meeting. Please review such at your convenience. An original copy has been provided to the Town Clerk and Town Accountant; 2. In review of minutes from previous years, I could not locate written resolutions in which the audit's were accepted by the Board, but there were verbal resolutions advising the Town Clerk to place such on file. To eliminate any future confusion, I have prepared a simple resolution for the February 8, 2010 meeting authorizing the Town Clerk to place the (revised) document on file for public access. Qnk you, hristo her Colsey, Super Town of Wappinger rlECEIVt:L JAN 2 7 20m "1/1'''', ~I ,:::,.". HUDSON VALLEY (PAs Navigating Your Success Partners James L. Sedore, Jr., CPA Mark S. O'Sullivan, CPA James F Letlerio, Jr., CPA Linda M. Hannigan, CPA Karen T. Hansen, CPA Jeffrey L. Brown, CPA Charles R. Rae, Jr., CPA i ~~ SEDORE December 21, 2009 btl:Cl:/VI::: . JAN 2 I...i . '''\ 1 2010 '4/" rl/ '" .'/ ~ /':)r To the Supervisor and the Town Board Town of Wappinger, New York We have audited the financial statements of the governmental activities, major funds and the aggregate remaining fund information of the Town of Wappinger for the year ended December 31, 2008, and have issued our report thereon dated December 21, 2009. Professional standards require that we provide you with the following information related to our audit. Our Responsibility Under U.S. Generally Accepted Auditing Standards and government Auditing Standards As stated in our engagement letter, our responsibility, as described by professional standards, is express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. As part of our audit, we considered the internal control of the Town of Wappinger. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the Town of Wappinger's compliance with certain provisions oflaws, regulations, contracts and grants. However, the objective of our tests was not to provide an opinion on compliance with such provisions. Planned Scope and Timing of the Audit We performed the audit according to the planned scope and timing previously communicated to you in our engagement letter about planning matters. Poughkeepsie Office 2678 South Road I Suite 101 I Poughkeepsie, New York 12601 Tel: (845) 485-5510 Fax: (845) 485-5547 I Emai1: info@sedoreco.com I Web: www.sedoreco.com POUGHKEEPSIE · PORT JERVIS · FISHKILL -/ Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for selection and use of appropriate accounting policies. The significant accounting policies used by the Town of Wappinger are described in Note A to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2007 . We noted no transactions entered into by the Town during the year for which there is a lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the fInancial statements were the estimate of the useful lives of the Town's depreciable assets and the estimated accrual of certain revenues, specifIcally sales taxes due through December 31, 2008 and mortgage taxes due for the months of October through December 31, 2008. Management's estimate of the useful lives of assets is based on past replacement requirements and its estimate of these receivables is generally based on past collections for similar periods. We evaluated the key factors and assumptions used to develop the estimates of the useful lives of assets and receivables' accruals in determining that it is reasonable in relation to the financial statements taken as a whole. The disclosures in the financial statements are neutral, consistent and clear. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were disclosures concerning debt, contingent liabilities relating to lawsuits and deficit fund balances. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole. The attached schedule summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the financial statements or the auditor's report. Weare pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated December 21, 2009. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the governmental unit's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit's auditors'. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. This information is intended solely for the use of the Supervisor, Town Board, and management of the Town of Wappinger and is not intended to be and should not be used by anyone other than those specified parties. Very truly yours, s~ ~~~. c.Pft~ Sedore and Company, CPA's, PC .. .. .. ... .. .. TOWN OF WAPPINGER, NEW YORK .. FINANCIAL STATEMENTS .. AS OF AND FOR THE YEAR ENDED DECEMBER 31.2008 .. .. .. .. .. ... .. .. - .. ... ilY12c Jfl 'S'/ VI.- ""4' ? t "Lw "1/1 l <'O~ '" .'1 J::-, ~~ .. . . ... TOWN OF WAPPINGER, NEW YORK TABLE OF CONTENTS DECEMBER 31.2008 ... ... DESCRIPTION PAGE (S) ... Independent Auditors' Report ...... ..... ........ .............. .... ........................ ....... ................. ...... ........... 1-2 ... Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards ..................................................................3-4 .. .. Management's Discussion and Analysis (unaudited) For The Year Ended December 31,2008 ............................................................................... 5-13 BASIC FINANCIAL STATEMENTS: .. Government-Wide Financial Statements: .. Statement of Net Assets - December 31, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................................ .14 .. Statement of Activities - For the Year Ended December 31, 2008 ............................................................................................................... 15-16 ... Fund Financial Statements: .. Balance Sheet - Governmental Funds - December 31, 2008....................... .................... ....... 17-18 .. Reconciliation of Governmental Funds Balance Sheet To The Statement of Net Assets - December 31, 2008..............................................................19 ... Statement of Revenues, Expenditures and Changes In Fund Balances- Governmental Funds - For the Year Ended December 31, 2008..... ........... ........... ..... .................... ............ ............... 20-21 ... .. lIII lIII .. .. Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Activities - For the Year Ended December 31, 2008............................................22 .. Statement of Net Assets - Fiduciary Funds - December 31, 2008 ...............................................23 III Notes to the Basic Financial Statements. ..... ...... ...... ...... ...... ...... ......... .... .......... .., .24-47 III REQUIRED SUPPLEMENTAL INFORMATION: lilt Exhibit I Budgetary Comparison Schedule - General Fund, Highway Fund, Water Fund and Sewer Fund For the Year Ended December 31, 2008.............................................................................. 48-51 lilt .. Exhibit II Other Post-Employment Benefit Plan Schedule of Funding Progress -December 31,2008............................................................... ..52 OTHER SUPPLEMENTAL INFORMATION: .. .. Exhibit III Combining Balance Sheet - Non-Major Governmental Funds - December 31,2008 ............................................................................ 53 .. Exhibit IV Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Non-Major Governmental Funds For the Year Ended December 31, 2008....................................................................... 54 .. lIII .. .. .. III . ~~ SEDORE IilIII HUDSON VALLEY (PAs Navigating Your Success Partners James L. Sedore, Jr., CPA Mark S 0 'Sullivan, CPA James F Letlerio, Jr., CPA Linda M. Hannigan, CPA Karen T Hansen, CPA Jeffrey L. Brown, CPA Charles R. Rae, Jr., CPA IilIII .. INDEPENDENT AUDITORS' REPORT .. .. To the Supervisor and Members of the Town Board Town of Wappinger, New York 20 Middlebush Road Wappingers Falls, New York 12590 .. .. We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Wappinger, New York, as of and for the year ended December 31, 2008, as listed in the Table of Contents. These financial statements are the responsibility of the Town of Wappinger, New York's management. Our responsibility is to express opinions on these basic financial statements based on our audit. . .. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained in the 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 audit provides a reasonable basis for our opinions. .. .. . As discussed in Note A.5.C, to the financial statements, the Town has not recorded certain infrastructure assets in governmental activities and, accordingly, has not recorded depreciation expense on those assets. Accounting principles generally accepted in the United States of America require that those general infrastructure assets be capitalized and depreciated, which would increase the assets and expenses of the governmental activities. The amount by which this departure would affect the assets and expenses of the governmental activities is not reasonably determinable. . .. .. .. .. Poughkeepsie Office 2678 South Road I Suite 101 I Poughkeepsie, New York 12601 Tel: (845) 485-5510 I Fax: (845) 485-5547 I Email: info@sedoreco.com I Web: www.sedoreco.com POUGHKEEPSIE · PORT JERVIS · FISH KILL 1 .. .. . In our opinion, because of the effects of the matter discussed in the preceding paragraph, the financial statements referred to above do not present fairly, the financial position of the governmental activities, of the Town of Wappinger, New York, as of December 31,2008, or the respective changes in financial position for the year then ended in conformity with accounting principles generally accepted in the United States of America. lit lit In addition, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of each major fund, and the aggregate remaining fund information of the Town of Wappinger, N ew York, as of December 31, 2008, and the respective changes in financial position for the year then ended in conformity with accounting principles generally accepted in the United States of America. .. .. Management's Discussion and Analysis, Exhibit I, budgetary comparison information and Exhibit II, Other Post-Employment Benefits Schedule of Funding Progress, listed in the Table of Contents, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. . .. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town of Wappinger, New York's basic financial statements. The combining non-major fund financial statements, Exhibits III and IV, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining non-major fund financial statements have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. .. .. .. In accordance with Government Auditing Standards, we have also issued our report dated December 21,2009 on our consideration of the Town of Wappinger, New York's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contract and grants. The report on compliance with laws and regulations and internal control over financial reporting is an integral part of an audit performed in accordance with Government Auditing Standards and, in considering the results of our audit, this report should be read in conjunction the auditor's report on the basic financial statements. .. .. .. s.e cku d- ~~, cP f} 'S Poughkeepsie, New York December 21, 2009 ... III ... .. 2 .. III ~~ SEDORE Partners James L. Sedore, Jr, CPA Mark S. O'Sullivan, CPA James F Letterio, Jr., CPA Linda M. Hannigan, CPA Karen T Hansen, CPA Je/key L. Brown, CPA Charles R. Rae, Jr., CPA III HUDSON VALLEY (PAs Navigating Your Success ... .. REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS .. .. To the Supervisor and Members of the Town Board Town of Wappinger, New York 20 Middlebush Road Wappingers Falls, New York 12590 .. .. We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Wappinger, New York as of and for the year ended December 31, 2008, which collectively comprise the Town of Wappinger, New York's basic financial statements and have issued our report thereon dated December 21, 2009. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in the Government Auditing Standards, issued by the Comptroller General of the United States. .. III .. Internal Control Over Financial Reoortin2 III In planning and performing our audit, we considered the Town of Wappinger's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town of Wappinger, New York's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Town of Wappinger, New York's internal control over financial reporting. III III Our consideration of the internal control over financial reporting was for the limited purpose described in the preceding paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies. III ... A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Town of Wappinger's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more that a remote likelihood that a misstatement of the .. ... Poughkeepsie Office 2678 South Road I Suite 101 I Poughkeepsie, New York 12601 Tel: (845) 485-5510 I Fax: (845) 485-5547 I Email: info@sedoreco,com I Web: www,sedoreco.com POUGHKEEPSIE · PORT JERVIS · FISHKILL 3 .. .. .. Town of Wappinger's financial statements that is more than consequential will not be prevented or detected by the Town's internal control. As more further described in a separate letter dated December 21, 2009 we consider the findings related to escrow recordkeeping and escrow fund negative balances to reflect significant deficiencies in internal controls. .. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in a more than remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the Town of Wappinger's internal control. .. .. Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. However, we believe that none of the significant deficiencies described above to be a material weakness. .. We noted others findings involving the internal control over financial reporting that we have reported to the management of the Town of Wappinger, New York in a separate letter dated December 21, 2009. .. Compliance and Other Matters .. As part of obtaining reasonable assurance about whether the Town of Wappinger, New York's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. .. .. .. We noted certain other matters that we reported to management of the Town of Wappinger in a separate letter dated December 21,2009. .. The Town of Wappinger's response to the findings identified in our audit is included in the separate letter described above. We did not audit the Town's response and, accordingly, we express no opinion on it. .. This report is intended solely for the information and use of the Supervisor, Town Board, Comptroller, management, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. .. .. Se dcu d- C-r~J C Nf IS Poughkeepsie, New York December 21, 2009 .. ... .. 4 .. .. .. MANAGEMENT'S DISCUSSION AND ANAL YSIS Required Supplemental Information For the Year Ended December 31, 2008 (Un-audited) .. .. 1. Overview of the Financial Statements .. These Audited Financial Statements consist of five parts. The Independent Auditors Report on our Financial Statements, Management's Discussion and Analysis (this section), Government Wide Financial Statements, Fund Financial Statements and Notes to the Financial Statements. .. -Government-Wide Financial Statements provide both long term and short term information about the Town's overall financial status. They report information about the Town as a whole using accounting methods similar to private sector companies. .. ... -Fund Financial Statements focus on the individual parts of Town government, reporting the Town's operations in more detail than the Government -Wide Financial Statements. They focus on the most significant or "major" funds-not the Town as a whole. See Note A in the notes to the financial statements for information regarding individual types of funds. .. -Notes to the Financial Statements provide further explanation and support for the information contained in the Financial Statements. .. 2. Financial Analysis of the Town as a whole .. Assets 2008 2007 Change Non-Capital $ 7,276,812 $ 7,601,318 $ (324,506) Capital 27,858,995 27,826,341 32,654 .. Total Assets $ 35.135.807 $ $ 35.427.659 (291.852) Liabilities . Current $ 7,282,579 $ 7,047,657 $ 234,922 Non-Current 27,422,967 29,490,846 (2,067,879) Total Liabilities 34,705,546 36,538,503 (1,832,957) .. Net Assets: Capital 10,374,937 5,898,337 4,476,600 .. Restricted 778,835 494,826 284,009 Unrestricted (10,723,511) (7,504,007) (3,219,504) Total Net Assets 430,261 (1,110,844) 1,541,105 .. Total Liabilities and Net Assets $ 35.135 807 $ 35.427.659 $ (291.852) ... .. 5 .. L. .. ... MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2008, Cont'd. (U n-audited) Revenues 2008 2007 Change Program Fines, Fees & Charges $ 3,077,145 $ 3,016,217 60,928 ~rating Grants 80,494 113,909 (33,415) Capital Grants 404,498 184,325 220,173 General Revenues Property Taxes 6,077,861 5,835,797 242,064 Other Taxes 2,405,493 2,703,917 (298,424) Investrrent Earnings 737,672 937,336 (199,664) State Aid 336,707 394,090 (57,383) Other Revenues 874,695 258,804 615,891 Total Revenues 13,994,565 13,444,395 550,170 Expenses General Goverrurent Support 2,541,193 2,833,492 (292,299) Public Safety 721,547 641,672 79,875 Heahh 402,407 417,439 ( 15,032) Transportation 2,863,411 1,887,805 975,606 Economic Assistance 30,287 28,227 2,060 Cuhure and Recreation 954,632 972,791 (18,159) Horre and Community Service 3,499,100 3,100,783 398,317 Other 1,440,883 1,599,620 (158,737) Total Expenses 12,453,460 11,481,829 971,631 Change in Net Assets $ 1.54 1.1 05 $ 1-962 566 $ (421.461) Governmental Funds: GENERAL FUND .. .. L ... ... ~, .. ~j .. .. ... .. The majority of activity for the Town is presented in the General Fund. Fund Balance for the General Fund decreased by $216,514 from 2007 to 2008. The major reason for the decrease in the fund balance was a shortfall in projected mortgage and sales tax revenues coupled with several unfunded, but necessary, expenses related to general operations. Such expenses were accounted for in the 2009 budget. The Town continued to incur legal expenses related to appeals for the Absolute lawsuit, which continued into 2009. ... ... Total General Fund Equity for 2008 is approximately $945,219, all of which is designated or restricted for particular purposes. ... .. 6 ... .. .. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2008, Cont'd. (Un-audited) .. .. The Following Charts describe significant categories of General Fund revenues and ex enses: General Fund Revenues 2008 . 24% .. . Property Taxes & Tax Items . State & Federal Aid . Fines, Licenses and Permits . All Other .. o Sales and Franchise Tax 8% o Interest & Earnings . 20% 6% . Departmental Income .. .. 33% ilia .. General Fund Expenses 2008 .. . General gove~nt support 1% .. o All Other . Public saiety D Transportation D Culnn-e and Recreation .. .. . HOIre and comnmity services . :fn1Jloyee benefits . Debt Service .. 5% .. .. 7 .. .. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2008, Cont'd. (Un-audited) .. HIGHWAY FUND .. The Highway Fund ended the year with $164,987 in Fund Balance. .. The following charts describe the significant categories of Highway Fund revenues and expenses: .. Highway Fund Revenues 2008 .. ill . Property Taxes . Sales Tax o Transfers from Other Funds o State & Federal Aid . Other Revenue .. .. ill .. Highway Fund Expenses 2008 .. . Street Maintenance 7% .. . Permment Road ~rovetrents o Snow RemJva1 .. .. o Other .. . Machinery Purchase and Maintenance . Errployee Benefits 18% 3% . Debt Service - 8 - .. .. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2008, Cont'd. (Un-audited) .. WATER FUND ... The Town operated four water districts after consolidation during 2008 with an overall Fund Balance of $812,258. Operating revenues totaled $2,352,907 with the expenses totaling $1,743,724 resulting in excess of revenues over expenditures in the amount of $609,183. This included a one-time revenue of $749,830 resulting from a successful MTBE settlement from major petroleum distributors. .. ... SEWER FUND .. The Town operated nine Sewer Districts during 2008 with an overall Fund Balance $1,145,119. Operating revenues totaled $3,413,153 with the expenses totaling $3,882,784 resulting in a (deficiency) of revenues (under) expenditures in the amount of ($469,631), which is more than planned as the Town had used appropriated Fund balance in the amount of $362,749 in the 2008 Budget. This resulted from a shortfall in budgeting appropriate operations and management charges to the end-users. In September 2009, the Supervisor, Accountant and Assessor audited and revised the rate structure for all Wappinger sewer districts to meet expected 0 & M costs, including a ten (10) year projected elimination of negative fund balances. The Supervisor has also initiated a consolidated sewer district, similar to the water districts, to level sewer costs with expected completion by early 2010. .. .. lilt .. BUDGETARY HIGHLIGHTS .. The Town Budget is adopted in November for the following year and is modified throughout the year as necessary. Variances in budgetary revenues and expenditures have been explained in the paragraphs above ... ... .. ... !III ... 9 ... .. . MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2008, Cont'd. (Un-audited) .. 3. Activities regarding capital assets, long and short term debt . The Town spent under one million dollars on eleven capital projects in 2008. The top four projects were: Highway Construction and Maintenance, Highway Blacktop Maintenance, Central Wappinger Water Improvement Area, and the Carnwath (Greystone) Renovation projects. The expenditures for these projects accounted for ninety-seven percent (97%) of the total capital expenditures. . . The Town purchased two (2) recreation pickup trucks as an amendment to a 2007 bond approval and while the majority of the process was completed prior to 2008, the completion documents were amended and executed in March 2008 for the Central Water District consolidation. . . The Town has initiated in 2009 several projects including the highway garage complex rehabilitation, demolition and replacement of the Town Hall boiler, Martz field Tennis court renovation, replacement of a boiler and fire/smoke alarm in the Emergency Services building, Cider Mill loop water tank rehabilitation, Robinson lane recreation park water system, Wappinger park water system abandonment and Rockingham section 1 & 2 subdivisions curbs repair and resurfacing of roads. . . The Central Wappinger Water Improvement Area 1999 -2R project has connected six of the Town's water districts to a common source of water. It is expected that the project will be completed in the year 2010. The project expenses are funded entirely by the property owners in the district. Long-term financing (serial bonds) was issued in 2007 in the amount of $7,380,000, part of a total issue of$11,580,000. . . The other projects related to town-wide road blacktopping and drainage, fuel tank replacements, roof stabilization, and water and sewer district improvements, other than grant revenue, are funded by the General, Highway Funds or by the property owners in each water and sewer district. Future bonding is expected to be issued to fund these projects. Please review the notes to the financial statements for information regarding these issues. . .. Long Term Debt . .. The Town received a Moody's rating of Aa3 when it issued new bonds in 2007 and has maintained this rating. This is the fourth highest rating possible and the highest for a municipality in Dutchess County. - .. 10 .. .. .. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2008, Cont'd. (Un-audited) .. ... Total long term serial bond debt at the end of 2008 was $28,825,000. Only, $3,836,321 of this balance is General Fund debt. The majority of the Town's debt relates to its water and sewer districts amounting to $9,085,387 and $13,722,952, respectively. Water and sewer debt is paid by the property owners in the respective districts. $225,000 of outstanding bond anticipation notes is also considered long term, as it has been re-financed. .. Short Term Debt .. .. The Town currently has three Bond Anticipation Notes (BANs) outstanding, $3,810,000, all maturing April 3, 2009 and funding various projects within the Town. Please review the notes to the financial statements for further information regarding this debt. 4. Currently Known Facts Bearing on the Future .. .. The Town of Wappinger, participating in the Southern Dutchess Consortium, whose purpose was to bring property assessments to full valuation, to provide equitable tax distribution among all homeowners within the town, county and shared school districts, completed the project in 2007. This revaluation went into effect for the 2008 and 2009 tax levy. .. In addition, the Town was able to settle sixteen tax certiorari cases in 2008, some of which were pending since 2000. In fifteen cases, the Town received favorable decisions and in one case the settlement resulted in a minor refund. ill .. The assessment roll established in 2009 for 2010 taxes resulted in homestead assessments decreasing by an average of 6.11 %. However, overall, the proportion of non-homestead to homestead assessments approximately changed by 2%. Non-homestead assessments for 2009 are 36% of the total and homestead assessments are 64%, instead of 34% and 66%, representing a shift in the tax burden away from homeowners to commercial properties. .. .. The Town will implement an in-house payroll system to start in 2010 with the same software company as the accounting program. The IT infrastructure was upgraded with the implementation of the software package, moving forward two generations of operating system with some resultant hardware upgrades. This has allowed greater departmental functionality and provided a higher level of security when paired with the new servers. A redundant backup system was .. .. - .. 11 .. .. .. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2008, Cont'd. (Un-audited) .. 4. Currently Known Facts Bearing on the Future, (Continued) .. employed for the accountant's and Town Clerk's computers to ensure the integrity of the information. .. The Town has seen some (commercial) economic development along the Route 9 corridor to include Adams Fairacre Farms (opening 2010), STS Tire (formerly vacant), Odd Jobs (opened in 2009), Sonic Restaurant (opened in 2009) and has more than ten commercial projects in the planning stage, to include a proposed $80 million senior care facility along the Route 9D corridor. .. .. The Town also secured a three year CSEA contract with highway employees. Several recreation staff were transferred to a more appropriate seasonal capacity to reflect their duties. .. The Town Hall and Highway building have updated their failing HV AC systems to more efficient units with an expected 50% savings in related energy utilization. .. .. In order to strengthen the verification process, the Town Board has undertaken a review of all vouchers/invoices prior to payment in 2008. While this has been a cumbersome process, as the review occurs at the end of the twice monthly evening meetings, corrections in the payment process have been incremental. An added benefit of this process allows the taxpayer to review the expenses via the internet. .. .. The Town plans to complete the retroactive reporting of its infrastructure assets in 2009 as well. .. The Town of Wappinger website was resurrected in May of2008 to a point that a majority of processes can be initiated or completed on-line. The Town plans to further these functions in the upcoming years. .. The Court offices upgraded their payment process to include the use of credit cards, thus eliminating the frequency of collection actions or bounced checks. .. The Code Enforcement Office (building, fire, zoning and planning) transferred their process of in-house payment collection to one of centralized payment through the Town clerk's office to increase the integrity of the system and provide redundant payment verification. The Town Clerk and Supervisor are implementing a credit card process with expected completion by first quarter 2010, allowing for the payment of permits, licenses and taxes. .. ... .. 12 .. ... ... MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2008, Cont'd. (Un-audited) ... 4. Currently Known Facts Bearing on the Future, (Continued) .. A Safety Committee was constituted in 2009 as converted from a Buildings Committee, formerly initiated in 2008. The purpose of this committee is a quarterly inspection of all Town owned building for which an employee or visitor would inhabit to limit potential injuries. Town Code Inspection Officers are assigned to specific buildings and generate a report to the Committee. Several potential concerns have been addressed. This Committee favorably affects the Town insurance coverage costs. .. ... .. .. ... ... .. .. .. .. .. .. .. iIIII 13 - . TOWN OF WAPPINGER, NEW YORK III STATEMENT OF NET ASSETS DECEMBER 31. 2008 GOVERNMENTAL ACTIVITIES .. ASSETS Current assets: Cash and cash equivalents $ 5,387,825 Receivables (net) 1,694,681 II Inventories 55,359 Deposits with other governments 5,000 Prepaid expenses 133,947 Total current assets 7,276,812 . Capital assets: Land 7,782,217 .. Infrastructure, net of depreciation 4,542,121 Buildings, machinery and equipment, net of depreciation 4,831,306 Construction in progress 10,703,351 Total capital assets 27,858,995 .. Total assets $ 35,135,807 LIABILITIES ill Current Liabilities: Accounts Payable $ 549,795 Accrued liabilities and retainage payable 553,233 . Notes payable 3,810,000 Deferred revenue 74,970 Due to other governments 21,073 Current portion of long-term liabilities . Landfill remediation liability 13,508 Bonds payable - Capital 808,864 Bonds payable - Non-capital 1,451,136 Total current liabilities 7,282,579 .. Non-current liabilities: Deferred revenues 44,096 ilia Judgment and claims 80,000 Compensated absence liabilities 195,320 Landfill remediation liability 313,551 Notes payable - Non-capital 225,000 . Bonds payable - Capital 14,623,268 Bonds payable - Non-capital 11,941,732 Total non-current liabilities 27,422,967 . Total liabilities 34,705,546 NET ASSETS Invested in Capital Assets, net of related debt 10,374,937 . Restricted for: Recreation 778,835 Unrestricted (10,723,511 ) .. Total net assets 430,261 Total liabilities and net assets $ 35,135,807 .. The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. 14 .. .. TOWN OF WAPPINGER, NEW YORK STATEMENT OF ACTDnTffiS FOR THE YEAR ENDED DECEMBER 31. 2008 FUNCTIONS/PROGRAMS Governmental Activities: General government support Public safety Health Transportation Economic assistance & opportunity Culture and recreation Home and community services Interest on long-term debt EXPENSES CHARGES FOR SERVICES OPERATING GRANTS AND CONTRIBUTIONS 7,194 $ 13,952 $ 442,708 4,010 78,149 2,538,326 3,077,145 $ 2,541,183 721,547 402,407 2,863,411 30,287 954,632 3,499,100 1,440,893 73,300 80,494 Total governmental activities 12,453,460 General revenues Taxes: Real property taxes Real property tax items Sales tax Mortgage tax Franchise taxes Unrestricted investment earnings Grants and contributions not restricted to specific programs Special item-Gain on sale of property and compensation for loss Miscellaneous Total general revenues, special items and transfers Change in net assets Net assets - beginning Net assets - ending The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. III .. .. ... IIIIIi ... ... .. III III III III IIllIl .. ... IIIIIlIi ... 15 .. .. iIIiII . NET (EXPENSE) REVENUE AND CHANGES IN iIIiII NET ASSETS CAPITAL GRANTS AND GOVERNMENTAL iIIiII CONTRIBUTIONS ACTIVITIES $ 6,556 $ (2,513,481) . (278,839) (398,397) 107,942 (2,682,169) iIIiII (30,287) 290,000 (586,483) (960,774) (1,440,893) . 404,498 (8,891,323) . 6,077,861 iIIiII 98,570 1,224,374 754,444 328,105 . 737,672 336,707 769,493 iIIiII 105,202 10,432,428 . 1,541,105 (1,110,844) . $ 430,261 . . .. .. 16 .. .. liliiii liliiii liliiii CAPITAL NON- TOTAL PROJECTS MAJOR GOVERNMENT AL FUND FUNDS FUNDS liliiii $ 3,193,540 $ 94,931 $ 5,387,825 liliiii 812,830 229 149,263 5,000 5,000 liliiii 349,537 966 3,418,241 405,899 326,689 liliiii 55,359 244 133,947 $ 3,548,306 $ 96,141 $ 10,695,053 liliiii liliiii $ 76,132 $ 3,866 $ 549,795 liliiii 43,695 42,926 42,926 3,735,000 3,810,000 85,050 3,054 3,418,241 liliiii 21,073 31,149 500 74,970 3,970,257 7,420 7,960,700 liliiii .. 244 189,306 164,050 .. 402,900 778,835 .. 88,477 893,027 (421,951) 306,235 (421,951) 88,721 2,734,353 .. $ 3,548,306 $ 96,141 $ 10,695,053 .. 18 .. I11III .. .. TOWN OF WAPPINGER, NEW YORK RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS DECEMBER 31. 2008 .. .. Total fund equity for governmental funds $ 2,734,353 .. Total net assets reported for governmental activities in the statement of net assets are different because: .. Capital assets used in governmental activities are not fmancial resources and therefore are not reported in the funds. 27,858,995 .. Long-term liabilities, including honds payable, compensated absences, judgement and claims and landfill remediation liabilities are not due and payable in the current period .. and therefore are not reported in the funds. (29,652,379) Grants received for capital assets are deferred and amortized over .. the life of the asset. (44,096) Accrued interest is not reported in the funds. (466,612) .. Total net assets of governmental activities $ 430,261 .. .. .. .. .. .. - The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. 19 - - - TOWN OF WAPPINGER, NEW YORK STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES .. GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31.2008 .. GENERAL HIGHWAY WATER SEWER FUND FUND FUND FUND REVENUES .. Real property taxes $ 1,656,236 $ 1,785,710 $ 639,120 $ 1,557,217 Real property taxes items 98,570 Non property taxes items 1,250,617 301,862 .. Departmental income 227,683 889,300 1,517,394 Use of money and property 289,198 8,160 15,354 332,472 Licenses and permits 292,183 Fines and forfeitures 150,585 .. Sale of property and compensation for loss 5,339 2,043 756,899 Miscellaneous local sources 333,871 4,407 52,234 6,070 State aid 1,103,521 225,338 - Federal aid Total revenues 5,407,803 2,327,520 2,352,907 3,413,153 EXPENDITURES - General government support 2,176,052 71,790 Public safety 554,023 Health 3,510 .. Transportation 263,536 1,709,692 Economic assistance & opportunity 30,287 Culture and recreation 746,632 .. Home and community services 551,421 996,910 1,711,485 Employee benefits 610,507 462,766 3,708 2,415 Debt service 913,349 166,201 743,106 2,168,884 Total expenditures 5,849,317 2,410,449 1,743,724 3,882,784 .. Excess of revenues over expenditures (441,514) (82,929) 609,183 (469,631) .. Other financing sources: Proceeds of debt 225,000 BANs redeemed from appropriations .. Operating transfers in 55,Q31 5,526 Operating transfers out Total other financing sources 225,000 55,031 5,526 IIIlll Excess (deficiency) of revenue and other sources over expenditures and other uses (216,514) (27,898) 609,183 (464,105) .. Fund Balance, December 31, 2007 1,161,733 192,885 203,075 1,609,224 Fund Balance, December 31, 2008 $ 945,219 $ 164,987 $ 812,258 $ 1,145,119 .. The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. .. 20 - .. .. .. .. CAPITAL NON- PROJECTS MAJOR TOTAL FUND FUNDS FUNDS III $ $ 439,578 $ 6,077,861 98,570 III 1,552,479 2,634,377 86,947 5,541 737,672 292,183 III 150,585 5,212 769,493 396,582 III 1,328,859 92,159 445,119 14,038,661 III 31,339 324 2,279,505 554,023 .. 396,927 400,437 565,594 40,180 2,579,002 30,287 .. 746,632 189,987 3,449,803 531 1,079,927 .. 3,991,540 786,920 437,962 15,111,156 (694,761) 7,157 (1,072,495) ... 225,000 .. 281,000 281,000 60,557 (60,557) (60,557) 220,443 506,000 .. (474,318) 7,157 (566,495) .. 52,367 81,564 3,300,848 .. $ (421,951) $ 88,721 $ 2,734,353 .. 21 .. .. .. .. TOWN OF WAPPINGER, NEW YORK RECONCILIATION OF STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31.2008 .. Net change in fund balance - total government funds $ (566,495) .. The change in net assets reported for governmental activities in the statement of activities is different because: .. .. Governmental funds report all capital outlays as expenditures. However, in the statement of activities, the cost of certain assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation expense in the current period. 32,654 .. .. Grants received for capital projects are amorized over the life of the asset. This is the amount by which the grant exceeded the amortization in the current period. (44,096) .. Bond proceeds are reported on the financing sources in governmental funds and thus contribute to the change in fund balance. In the statement of net assets, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds but reduces the liability in the statement of net assets. - .. Debt issued: Long term bond anticipation note issued Bond anticipation note redeemed Repayments: Bond anticipation note principal Bond principal (225,000) (281,000) .. 281,000 2,200,000 1,975,000 .. .. In the statement of activities, interest is accrued on outstanding bonds, whereas in governmental funds, an interest expenditure is reported when due. This amount represents the change between what was paid and what was accrued through 2008 69,647 .. Some expenses reported in the statement of activities, such as compensated absences and landfill liabilities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. This amount represents the change between what was paid and what was accrued through 2008 74,395 .. III Net change in net assets of governmental activities $ 1,541,105 MIl The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. MIl 22 .. iIIII TOWN OF WAPPINGER, NEW YORK STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUND DECEMBER 31. 2008 .. .. AGENCY FUNDS ASSETS Cash and cash equivalents $ 641,993 Total assets 641,993 LIABILITIES Escrow funds returnable and other liabilities 641,993 Total liabilities 641,993 NET ASSETS Total liabilities and net assets $ 641,993 iIIII iIIII iIIII .. .. .. iIIII iIIII .. iIIII .. .. The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements ... 23 .. ... .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31.2008 .. NOTE A - Summary of Sbroificant Accountin2 Policies .. The Town of Wappinger, New York ("the Town") was incorporated on May 20, 1875, under the provisions of the State of New York. The Town operates under a Town Board form of government, consisting of a Supervisor and four Councilmen/women. The Supervisor serves as the Chief Executive Officer and as the Chief Fiscal Officer of the Town. .. The Town provides the following services: highway maintenance, water, sewer, planning, zoning, building and safety inspection, lighting, and culture and recreation. The Town's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America as applied to governmental units (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements (Statements and Interpretations). The Town is also required to follow the pronouncements of the Financial Accounting Standards Board (FASB) issued through November 30, 1989 (when applicable) that do not conflict with or contradict GASB pronouncements, .in preparing its government-wide financial statements. The more significant accounting policies established by GAAP and used by the Town in preparing its government-wide and fund financial statements are discussed below. .. .. .. .. 1. The Reportin2 Entitv .. The Town, for financial purposes, includes all of the funds relevant to the operations of the Town of Wappinger, New York. The financial statements include organizations, function and activities that are controlled by or dependent upon the Town. Control or dependence is determined on the basis of budget adoption, taxing authority, funding and appointment ofthe respective governing board. Under these criteria, no other entities are included in the Town's financial statements. .. .. 2. Basic Financial Statements - Government-Wide Statements .. The Town's basic financial statements include both government-wide (reporting the Town as a whole) and fund financial statements (reporting the Town's major funds). Both the government-wide and fund financial statements categorize primary activities as either governmental or business type activities. The Town's parks and recreation, public works, and general administrative services are classified as governmental activities. The Town's water services are also classified as governmental activities since user fees are not intended to cover all costs including depreciation. .. .. .. ilia .. 24 .. II II TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 III NOTE A - Summarv of Si2:nificant Accountin2: Policies (Cont'd) III 2. Basic Financial Statements - Government-Wide Statements (Cont'd) III In the government-wide Statement of Net Assets, the governmental activities columns is presented on a consolidated basis by column, and is reported on a full accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long-term debt and obligations. The Town's net assets are reported in three parts-invested in capital assets, net of related debt; restricted net assets; and unrestricted net assets. The Town first utilizes restricted resources to finance qualifying activities. .. .. The government-wide Statement of Activities reports both the gross and net cost of each of the Town's functions or activities. The functions are also supported by general government revenues (property and sales taxes, certain intergovernmental revenues, fines, permits and charges, etc.). The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants. Program revenues must be directly associated with the function (public works, community and youth services, etc.). Operating grants include operating-specific and discretionary (either operating or capital) grants while the capital grants column reflects capital-specific grants. .. .. .. The net costs are normally covered by general revenue (property, sales or mortgage taxes, intergovernmental revenues, interest income, etc). .. This government-wide focus is more on the sustainability of the Town as an entity and the change in the Town's net assets resulting from the current year's activities. .. 3. Basic Financial Statements - Fund Financial Statements .. The financial transactions of the Town are reported in individual funds in the fund financial statements. Each fund is accounted for by providing a separate set of self- balancing accounts that comprises its assets, liabilities, reserves, fund equity, revenues and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the Town or meets the following criteria: a. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental fund are at least 10 percent of the corresponding total for all funds of that category or type; and .. III II .. .. 25 . ... ... TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2008 ... ... NOTE A - Summary of Shmificant Accountine: Policies (Cont'd) 3. Basic Financial Statements - Fund Financial Statements (Cont'd) ... b. Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined. ... The following fund types are used by the Town: A. Governmental Funds ... The focus of the governmental funds' measurement (in the fund statements) is upon determination of financial position and changes in financial position (sources, uses, and balances of financial resources) rather than upon net income. ... The following is a description of the governmental funds of the Town: ... 1. General Fund is the general operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in another fund. The General Fund is considered a major fund and is presented separately. 2. Highway Fund is used to record the revenues and expenditures related to the maintenance of Town roadways. The Highway Fund is considered a major fund and is presented separately. ... . 3. ... 4. ... 5. . Water Fund is used to record the revenues and expenditures related to the delivery of water to the Town's customers. The Water Fund is considered a major fund and is presented separately. Sewer Fund is used to record the revenues and expenditures related to the delivery of sewer services to the Town's customers. The Sewer Fund is considered a major fund and is presented separately. . Capital Projects Fund is used to account for financial resources to be used for the acquisition and construction of major capital facilities. The Capital Projects Fund is considered a major fund and is presented separately. However, no budgetary comparison schedule is presented as required supplemental information, as the Town is not legally required to adopt an annual budget for the Capital Projects Fund. ... - 6. Non-major Funds include those that are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. These include the Lighting and Miscellaneous (Ambulance) Funds. .. 26 .. . . . TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 . NOTE A - Summary of Shmificant Accountin~ Policies (Cont'd) 3. Basic Financial Statements - Fund Financial Statements (Cont'd) . B. Fiduciary Funds MIll Fiduciary Funds are used to report assets held in a trustee or agency capacity for others and therefore are not available to support Town programs. The reporting focus is on net assets and changes in net assets and are reported using accounting principles similar to proprietary funds. . The Town's fiduciary funds are presented in the fiduciary fund financial statements. Since by definition these assets are being held for the benefit of a third party and cannot be used to address activities or obligations of the government, these funds are not incorporated into the government-wide statements. .. 4. Basis of Accountin~ . MIll Basis of accounting refers to the point at which revenues or expenditures/expenses are recognized in the accounts and reported in the financial statements. It relates to the timing of the measurements made regardless of the measurement focus applied. A. Accrual MIll The governmental activities in the government-wide financial statements and fiduciary fund financial statements are presented on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred. MIll B. Modified Accrual .. The governmental funds financial statements are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual; i.e., both measurable and available. "Available" means collectible within the current period or within 60 days after year- end. Expenditures are generally recognized under the modified accrual basis of accounting when the related liability is incurred. The exception to this general rule is that principal and interest on general obligation long-term debt, if any, is recognized when due. ilIII .. .. .. .. 27 .. ill .. ill TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2008 .. NOTE A - Summary of Sitmificant Accountine: Policies (Cont'd) ill 5. Financial Statement Amounts A. Cash and Investments ill Cash includes amounts in demand and time deposits, as well as, short-term investments. State statutes and the Town's own written investment policy govern the investment policies of the Town. The Town may invest its funds in banks or trust companies authorized to do business in the State of New York, as well as investing in obligations ofthe U. S. Treasury, U.S. Agencies, and obligations of the State of New York and its political subdivisions. Deposits not covered by Federal Deposit Insurance, are collateralized by the banking institutions with investments governed under state statutes. Short-term investments consist of investments in repurchase agreements. The repurchase agreements involve purchases by a broker of portfolio securities concurrently with an agreement by the broker to sell the same securities at a later date at a fixed price. Generally, the effect of such a transaction is that the Town can invest its excess cash balances at competitive interest rates. The Town reports its repurchase agreements at market value, which approximates cost plus accrued interest. ill iI .. .. The cash and investments of the Town at December 31, 2008, are as follows: .. .. GEMRAL InGHWAY WAnR FlJND FlJND FlJND SEWm. FlJND CAPITAL NON- PROJECTS MAJOR FUND FlJNDS lOTAL .. Non- Interes t Bearing Accounts $ 800 $ - $ - $ - $ - $ - $ 800 Interest Bearing Accounts 1.075.953 23.770 752..661 246.170 3.193.540 94.931 5.387.025 lOTALS $ 1,076,753 $ 23,770 $ 752,661 $ 246,170 $ 3,193,540 $ 94,931 $ 5,387,825 .. .. Custodial credit risk is the risk that in the event of a bank failure, the Town's deposits may not be returned to it. While the Town does not have a specific policy for custodial credit risk, New York State statues govern the Town's investment policies, as discussed previously in these Notes. Governmental Accounting Standards Board Statement No. 40 Deposit and Investment Risk Disclosure directs that deposits be disclosed as exposed to custodial credit risk if they are not covered by depository insurance, or collateralized by securities held by the Town or its agent in the Town's name. The Town's cash balances were fully collateralized with securities held by the Town's third party custodian and not subject to custodial credit risk. II .. .. 28 .. .. III IIlIIl TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2008 .. IIlIIl NOTE A - Summary of Shmificant Accountin2 Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) B. Inventories III Inventories consist of significant expendable supplies primarily sand and road salt and are carried at cost. IIlIIl C. Capital Assets IIlIIl Capital assets purchased or acquired with an original cost of $500 or more are reported at historical cost or estimated historical cost. Contributed assets are reported at fair market value as of the date received. 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: IIlIIl .. Buildings Infrastructure - Water & Sewer Infrastructure - Roads Machinery and equipment Improvements 15-40 years 40 years 15 years 5-15 years 10-30 years . .. GASB Statement No. 34 requires the Town to report and depreciate new infrastructure assets effective with the beginning of 2003. Infrastructure assets include roads, bridges, underground pipe (other than related to utilities), traffic signals, etc. These infrastructure assets are likely to be the largest asset class of the Town. Neither their historical cost nor related depreciation had historically been reported in the financial statements. The retroactive reporting of infrastructure is subject to an extended implementation period and is first effective for fiscal years ending in 2007. The Town implemented the general provisions of GASB Statement No. 34 in 2003 but had not implemented the retroactive reporting of infrastructure assets by the end of 2007 as required. It expects to implement those retroactive infrastructure provisions in the year ending December 31, 2009. .. .. .. IIlIIl .. - 29 .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2008 .. NOTE A - Summary of Shmificant Accountim!: Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) D. Accumulated Compensated Absences It is the Town's policy to permit employees of the Highway Department to accumulate a limited amount of earned but unused vacation and sick leave, which will be paid to employees upon separation from the Town's service. Other Town employees may accumulate a limited amount of unused compensated absences as well. However, for other Town employees, only unused vacation leave will be paid upon separation from the Town's service.. The Town accrues a liability for compensated absences, which meet the following criteria: ilia .. .. .. 1. The Town's obligations relating to employees' rights to compensation for future absences is attributable to employee's services already rendered; .. 2. .. 3. 4. The obligation relates to rights that vest or accumulate; Payment of the compensation is probable; The amount can be reasonably estimated. .. In accordance with the above criteria, the Town has accrued a liability for vacation pay, which has been earned and not taken by Town employees as of December 31, 2008, in the amount of $195,320. The non-current portion (the amount estimated to be used in subsequent fiscal years) for governmental funds is maintained separately and represents a reconciling item between the fund and government-wide presentations. It is anticipated that none of these liabilities will be liquidated with expendable available financial resources. .. III E. Interfund Activitv .. Interfund activity is reported as either loans, services provided, reimbursements or transfers. Loans are reported as interfund receivables and payables as appropriate and are subject to elimination upon consolidation. Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide financial statements. III .. III III lit 30 .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 .. NOTE A - Summary of Shmificant Accountine: Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) .. F. Bude:ets .. The Town employs formal budgetary accounting as a management tool, on a basis consistent with generally accepted accounting procedures. During the year, a budget was adopted and modified by the Town Council for the General Fund and Non-major Funds. Budgetary controls are established or adopted for the Capital Projects Fund on a project basis. Unused appropriations of the annually budgeted funds lapse at the end of the year. .. .. G. Pension Plans Plan Description .. .. The Town of Wappinger participates in the New York State and Local Employees' Retirement System (ERS), the New York State and Local Police and Fire Retirement System (PFRS) and the Public Employees' Group Life Insurance Plan (Systems). These are cost-sharing multiple-employer retirement systems. The Systems provide 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 (NYSRSSL). .. .. As set forth in the NYSRSSL, the Comptroller of the State of New York (Comptroller) serves as sole trustee and administrative head of the Systems. The Comptroller shall adopt and may amend rules and regulations for the administration and transaction of the business of the Systems and for the custody and control of their funds. The Systems issue a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to the New York State and Local Retirement Systems, 110 State Street, Albany, New York 12244. III .. .. Funding Policy .. The Systems are noncontributory except for employees who joined the New York State and Local Employees' Retirement System after July 27, 1976 who contribute 3% of their salary. Under the authority of the NYSRSSL, 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. .. .. .. 31 .. III III TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 1M NOTE A - Summary of Significant Accounting Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) 1M G. Pension Plans: Plan Description (Cont'd) 1M The Town of Wappinger is required to contribute at an actuarially determined rate. The required contributions for the current year and two preceding years were: 1M l1RS III 2008 2007 2006 $ $ $ 216,806 206,422 263,931 III The Town's contributions made to the Systems were equal to or in excess of 100 percent of the contributions required for each year. l1li H. Other Post-Employment Benefits The cost of post-employment healthcare benefits, like the cost of pension benefits, generally should be associated with the periods in which the cost occurs, rather than in the future year when it will be paid, which is the accrual accounting perspective. In adopting the requirements of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Post-employment Benefits Other Than Pensions, for the year ended December 31,2008 on a prospective basis, the Town recognizes the cost of post- employment healthcare in the year when the employee services are received, reports the accumulated liability from prior years, and provides information useful in assessing potential demands on the Town's future cash flows. Recognition of the liability accumulated from prior years will be phased in over 30 years. The Town calculated its annual required contribution (ARC) and related information using the alternative measurement method permitted by GASB #45 for employers in plans with fewer that 100 total plan members. .. l1li III III ill The Town provides continuation of medical insurance coverage to employees that retire under the New York Retirement Systems at the same time they end their service to the Town. This plan is a single employer plan, established by authority of the Town Board and administered by the Town. Currently, there are approximately 14 retirees or beneficiaries receiving post employment benefits. Based on the current employment policy, the retiree and his or her beneficiaries receive coverage for the life of the retiree based on the retiree's years of service at retirement. A copy of the report on these benefits can be requested at Town Hall. A summary of benefits is as follows: IiIIIIl iIIII .. 1M 32 .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2008 NOTE A - Summary of Sie:nificant Accountine: Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) .. I. Other Post-Employment Benefits .. .. % Paid by Town Under 65 Over 65 Years of Service 10-14 Years 35% 35% 15-19 Years 50% 50% 20-24 Years 60% 60% 25 or More Years 70% 70% .. .. . Fundine: Policy .. The Town provides funding on the pay-as-you-go method by payment of current insurance premiums. Currently, New York's General Municipal Laws do not permit funding of the OPEB obligation, therefore there are no plan assets. . Annual Other Postemplovment Benefit Cost .. The Town's OPEB cost (expense) amounted to $400,287 for the year ended December 31, 2008. The Town's OPEB cost was equal to the Annual Required Contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45 less the amount that the Town paid in the current year for retirees. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs plus a past service cost each year and amortize any unfunded actuarial liabilities over a period of 30 years. Past Service Costs N onnal Costs Annual Required Contnbution (ARC) $ 131,436 319,985 451,421 .. . .. $ .. Net OPEB Obligation - beginning of the year Annual OPEB cost Actual Employer Contributions* Net OPEB Obigation- end of the year $ III 451,421 (51,134) 400,287 $ ... Percent of annual OPEB cost contnbuted 11.33% .. * This contnbution is the pay- as- you- go amount, as an actual plan has not been established, see Funding Policy. 33 .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 .. NOTE A - Summary of Si2l1ificant Accountin2 Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) J. Other Post-Emplovment Benefits iIIII iIIII Net Other Postemplovment Benefit Obli2ation .. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the trend of health care costs. Amounts determined regarding the funding status of the plan and the required contributions of the Town are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value for plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. .. .. iIIII Actuarial Methods and Assumptions .. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the December 21, 2008, actuarial valuation, the liabilities were computed using the entry age actuarial cost method and level percentage of payroll amortization. The actuarial assumptions utilized a 2% baseline discount rate. The valuation assumes the following rates of increase in health care costs: Fiscal Prescription Year Medical ~ Dental VISion .. .. IiIII .. .. Year 1 9.00% 9.00% 4.00% 3.00% Year 2 8.00% 8.00% 3.50% 3.00% Year 3 7.00% 7.00% 3.00% 3.00% Year 4 6.00% 6.00% 3.00% 3.00% Year 5 5.80% 5.80% 3.00% 3.00% Year 6 5.60% 5.60% 3.00% 3.00% Year 7 5.60% 5.60% 3.00% 3.00% Year 8 5.50% 5.50% 3.00% 3.00% Year 9 5.50% 5.50% 3.00% 3.00% Year 10+ 4.70% 4.70% 3.00% 3.00% 34 IiIII .. .. .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 .. NOTE A - Summary of Shmificant Accountim! Policies (Cont'd) .. 5. Financial Statement Amounts (Cont'd) K. Other Post-Employment Benefits .. III Prescription Medical !2!:!!g Dental VlSion - Hea1thcare cost trend rate assl..llred fur next fiscal year 9.00% 9.00% 4.00% 3.00% Rate to much the cost trend rate is assl..llred to decline (the uhimate trend rate) 5.50% 5.50% 25.00% 0.00% Fiscal year that the rate reaches the ultirmte.trend rate 2018 2018 2018 2018 .. .. .. .. L. Propertv Taxes .. The Town submits an approved budget to the Dutchess County Commissioner of Finance by December 5th of the previous year. The County then establishes the warrant for the year, which is due and payable on or about January I of each year. The Town collects the taxes on behalf of the Town and County without penalty through February 28th and with penalties and interest through August 31st. The Town's portion of the taxes is recognized and transferred prior to the County's portion. Therefore, the Town receives its entire tax, leaving the unpaids to be collected by the County Commissioner of Finance. III III III III .. ... ... 35 III .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 .. NOTE A - Summary of Shmificant Accountinf! Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) .. M. Lonf!- Term Liabilities .. Long- Term Debt is recognized as a liability of a governmental fund when due, or when resources have been accumulated for payment early in the following year. For other long-term obligations, only that portion expected to be financed from expendable available financial resources is reported as a fund liability of a governmental fund. The remaining portion of such obligations is only reported in the statement of net assets, Long-Term Liabilities. .. .. N. Reservations of Fund Eauitv .. The Town records indicate that portions of the fund equity are segregated for specific future uses. The following details the description and amounts of the reserves used by the Town: .. BALANCE AT 12/31/08 .. General Fund Reserved for Prepaids and Inventol)' Reserved for Recreation Reserved for Debt Service Reserved for Miscellaneous: Inspection Fees Total General Fund $ 69,757 $ 778,835 164,050 .. .. 402.900 1.415.542 .. HighWlY Fund Reserved for Prepaids and Inventol)' 118.332 .. Water Fund Reserved for Prepaids and Inventol)' 973 .. Non-Mljor Funds Reserved for Prepaids and Inventol)' 244 .. TOTAL FUND BALANCE RESERVES $ 1,535,091 .. - 36 - .. III TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2008 III NOTE A - Summary of Shroificant Accountin2 Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) .. .. O. Risk Mana2ement The Town of Wappinger assumes the liability for most risk including, but not limited to, property damage and personal injury liability. Such risks are covered by the purchase of commercial insurance. Judgments and claims are recorded when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. Workers compensation coverage is provided through a retrospective policy, wherein premiums are recorded based on the ultimate cost of the experience to date of workers in similar occupations. The Town does not estimate claims, which may have occurred but are not reported in areas where the Town is not insured. .. III .. P . Use of Estimates .. The preparation of basic financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the amounts reported in the basic financial statements and the accompanying notes. Actual results could differ from those estimates. .. NOTE B - Other Receivables .. Other Receivables at December 31, 2008, consist of the following: III CAPITAL GEMRAL WATER SEWFR PROJHTS FUND FUND FUND FUND lOTAL Accounts Receivable $ 149,034 $ - $ - $ 229 $ 149,263 Rents Receivable 292,312 520,518 812,830 lOTALS $ 149,034 $ 292,312 $ 520,518 $ 229 $ 962,093 ill .. .. .. .. ... 37 ill .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 .. NOTE C - Interfund Receivables and Pavables and Transfers The following is a summary of amounts due from and due to other funds, as of December 31, 2008. These interfund balances have been eliminated as part of the aggregation of fund balances. Such balances arise through the use of a pooled cash disbursement account and the temporary funding of capital projects. .. .. AMJUNT FlJND RECElV ABLE General $ 1,746,886 Highway 248,005 Water 159,895 Sewer 912,952 Capital Projects 349,537 Non-Major 966 TOTALS $ 3,418,241 .. AMJUNT PAYABLE $ 1,987,960 637,595 374,558 330,024 85,050 3,054 $ 3,418,241 .. .. .. lRANSFERS lRANSFERS FlJND IN our Highway $ 7,785 $ .. Sewer 5,526 Capital Projects 47,246 60,557 .. TOTALS $ 60,557 $ 60,557 .. .. .. .. III .. ... 38 ... IlII TOWN OF WAPPINGER, NEW YORK III NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 NOTE D - Capital Assets .. The following is a summary of changes and adjustments in the Capital Assets, for the year ended December 31, 2008: IIIIIl BAlANCE BAlANCE JANUARY 1, DELEMBER31, 2008 ADDmONS (DISPOSAlS) 2008 .. Land $ 7,7'62,217 $ $ $ 7,7'62,217 Buildings 5,589,358 5,589,358 iIII hnproverrents Other Than Buildings 726,446 726,446 iIII Roads 2,636,285 166,900 2,803,185 Infras tructure 2,631,015 2,631,015 IlII Machinery & Equiprrent 4,357,700 469,804 4,827,504 .. Construction in Progress 10,632,612 70,739 10,703,351 Total 34,355,633 707,443 35,063,076 .. Less accumulateddep-eciation Buildings 2,328,165 143,954 2,472,119 hnproverrents .. Other Than Buildings 575,881 14,360 590,241 Roads 386,235 186,879 573,114 III Infrastructure 253,190 65,775 318,965 Machinery & Equiprrent 2,985,821 263,821 3,249,642 IIIIIl Total accumulated dep-eciation 6,529,292 674,789 7,204,081 Gowrnmental activities cap tal assets, net $ 27,826,341 $ 32,654 $ $ 27,858,995 III *Depreciation was charged to govenurental activities as follows: III General govenurent support 125,465 Public safety 50,338 Transportation 415,488 III Ollture and recreation 34,066 Horre and comnmity services 49,432 Total dep-eciation expense $ 674,789 .. .. 39 .. III III TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 .. NOTE E - Bond Anticioation Notes Payable Bond Anticipation Notes can be used for any purpose for which bonds are authorized, and are generally accounted for in the Capital Projects Fund, since maturities cannot exceed one year. Local finance law allows the notes to be renewed, up to five years for capital purposes and up to the period of probable usefulness for assessable improvements, provided that stipulated annual reductions of principal are made. III liII The Town's intent is to pay the lawsuit settlement through the use of bond anticipation notes and refinanced that note in 2009. The refinanced portion is considered long-term. The Bond Anticipation Notes outstanding as of December 31,2008, are as follows: .. III ISSUE MA1lJRI1Y INDREST Al\1OUNT DIOC:E\1BER 31, PURPOSE DAlE DAlE RAlE OF ISSUE 2008 .. Landfill 08111/04 04103/09 2.75% 420,000 362,719 Revaluation 06/02/05 04103/09 2.75% 575,000 230,000 Landfill 08110/06 04103/09 2~75% 566,900 515,900 III Landfill 08110/05 04103/09 2.75% 430,368 392,381 Camwath 08109/07 04103/09 2.75% 600,000 600,000 .. Lawsuit Settlerrent 12/02/07 04103/09 2.75% 75,000 75,000 Camwath 11/08107 04103/09 2.75% 525,000 525,000 Road Reconstruction 11/08107 04103/09 2.75% 450,000 450,000 liII Highway Equiprrent 05/01/08 04103/09 2.75% 450,000 450,000 Subtotal 4,092,268 3,601,000 III Road Repaving 10/14/08 04103/09 3.86% 209,000 209,000 Subtotal 209,000 209,000 liII Short- Term Bond Anticipltion Notes Subtotal 4,301,268 3,810,000 .. Long-Term Bond AnticiJlltion Notes Lawsuit Settlerrent 12/02/07 04103/09 2.75% 225,000 225,000 liII TOTALS $ 4,526,268 $ 4,035,000 .. ... .. 40 .. - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 NOTE E - Bond Anticipation Notes Payable (Cont'd) - .. Changes in Bond Anticipation Notes Payable as of December 31, 2008, are as follows: .. BALANCE BALANCE JANUARY 1, NEW REFlNANCFJ DIOCEv.lBER 31, PURPOSE 2008 ISSUES PAYMENTS 2008 Various Purposes $ 3,207,000 $ - $ (281,000) $ 2,926,000 Highway 450,000 659,000 1,109,000 lOTALS $ 3,657,000 $ 659,000 $ (281,000) $ 4,035,000 .. - .. - .. - .. - - .. .. ... - 41 ... .. TOWN OF WAPPINGER, NEW YORK .. NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 NOTE F - Lon2-Term Liabilities .. 1. Serial Bonds .. Serial Bonds may be issued for any object or purpose for which a period of probable usefulness has been established. The Serial Bonds Payable, as of December 31,2008, are as follows: AMOUNT .. ours TANDING ORIGINAL FINAL ORIGINAL AT ISSUE MATURITY INT.EREBT AMOUNT DECEMBFR31, .. PURPOSE DATE DATE RATE OF ISSUE 2008 Sewer - Tn-Municipal 11/12/92 09/15/12 5.80%-6.65% $ 6,060,000 $ 1,480,000 .. Sewer - Tn-Municipal 03/14/02 04/15/21 1.210/0-4.98% 9,836,556 6,755,000 Sewer - Tn-Municipal 11/26/02 05/15/15 3. 18%-5.99D/o 8,519,786 3,310,000 .. Sewer - Tn-Municipal 06/01/95 11/15/15 3.70%-5.55% 2,610,054 1,085,000 Water - Fleetwood 07/30/98 10/15/18 3.70%-5.15% 510,000 295,000 Greystone Property .. Purchase 10/01/00 10/01/20 4.75%-6.50% 2,085,000 1,500,000 Emergency Services III Building 06/01/95 11/15/15 3.70%-5.55% 1,275,000 665,000 Water 452,732 127,100 Sewer 288,876 87,100 .. Drainage 1,253,392 365,800 10/02/01 08/15/11 3.77% 1,995,000 580,000 .. Water 564,000 475,420 Sewer 905,000 762,868 Lighting 785,000 661,712 III 02/25/03 03/01/23 4.00%-4.50% 2,254,000 1,900,000 General 662,400 643,809 .. Water/Sewer 8,674,300 8,430,851 Road Reconstruction 1,974,800 1,918,700 Equipmmt 268,500 261,640 .. 08/01/07 08/01/27 4.00%-5.00% 11,580,000 11,255,000 TOTALS $ 46,725,396 $ 28,825,000 .. - .... 42 .... .. MIl .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 .. NOTE F - Lom!-Term Liabilities (Cont'd) .. 2. Cham!es The changes in the Town's indebtedness during the year ended December 31, 2008, are summarized as follows: .. BALANCE BALANCE AlVDUNTS MIl JANUARY 1, DHEVlBFR31, DUEWITHIN 2008 INCRFASE (DIOC:lU'ASE) 2008 ONEYFAR .. Serial Bonds Note F.1 $ 31,025,000 $ - $ (2,200,000) $ 28,825,000 $ 2,260,000 Compensated Absences MIl Note A.8 228,902 (33,582) 195,320 Landfill Oosure and Post Post Costs Note J 350,274 (23,215) 327,059 13,508 MIl Judgemmt & OairrE Note 1.1 80,000 80,000 .. lOTAlS $ 31,684,176 $ - $ (2,256,797) $ 29,427,379 $ 2,273,508 3. Debt Service ReQuirements .. The annual requirements to amortize bonded debt, as of December 31,2008, are as follows: MIl ... YFAR ENDING DOCEMBFR31. PRINCIPAL INTEREST lOTAL 2009 2,260,000 1,311,597 3,571,597 2010 2,325,000 1,207,333 3,532,333 2011 2,385,000 1,097,150 3,482,150 2012 2,270,000 981,664 3,251,664 2013 1,960,000 868,745 2,828,745 2014-2018 7,635,000 3,092,160 10,727,160 2019-2023 5,700,000 1,518,084 7,218,084 2024-2028 3,500,000 626,878 4,126,878 2029 790,000 33,576 823,576 lOTAlS $ 28,825,000 $ 10,737,187 $ 39,562,187 43 .. .. .. ... .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 .. NOTE G - Operatim! Leases .. The Town is committed under various leases for office equipment and communication equipment. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended December 31, 2008 amounted to $55,418. At December 31, 2008, the approximate annual operating lease commitments, subject to appropriation of funds, were as follows: .. .. YFAR :ENDING DIrEMB.ER31. OP.ERATlNG LFASFB .. 2009 2010 2011 39,100 21,037 3,965 64,102 .. Total minimum lease payrrents $ .. NOTE H - Deficit Fund Balances .. Certain Capital Projects had fund equity deficits at the end of the year. Certain of those deficits arose through the funding of expenditures by issuing bond anticipation notes. As these notes are paid, revenue will be recognized and the deficits will be eliminated. There were five such capital projects with accumulated fund equity deficits totaling $2,614,430. In addition, there were five capital projects with accumulated fund equity deficits totaling $560,120, whose expenditures were funded by loans from other funds. .. .. NOTE I - Commitments and Contin2ent Liabilities .. 1. Lawsuits .. The Town is a defendant in various lawsuits and tax certiorari cases. The outcome of the majority of these cases and lawsuits, as determined by the Town Attorney, should not result in material unfavorable settlements. The Town has recorded an estimated liability amounting to $80,000 as Judgment and Claims, representing possible future settlements on tax certiorari cases. .. .. .. - 44 III .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 NOTE I - Commitments and Contin2:ent Liabilities (Cont'd) .. 2. Tri-Municipal Sewer Commission .. As a result of a consent judgment signed between the Town and the New York State Department of Environmental Conservation, regarding alleged environmental violations, the Town was required to fund construction of a sewer line to the Tri-Municipal Sewer Treatment Plant, plus a one million gallon expansion of said plant. The plant is owned and operated by the Tri- Municipal Sewer Commission, made up of representatives of the Town of Poughkeepsie and the Village of Wappingers Falls. The Town, therefore, does not have ownership rights, nor does it have voting rights on the Commission's governing board. .. .. .. Subsequently, in January 1999, the Town Board authorized the Phase 3A Sewer Improvement Project to further expand the Commission's sewage treatment facility, from 2.4 million gallon per day capacity to 3.4 million gallon per day capacity, the costs of which were also to be funded by the Town. . Funding for these projects has been provided by the issuance of bond anticipation notes and serial bonds. Currently there are five serial bond issues outstanding, with an original issue total of $27,931,400 and a current total of $13,392,868. Debt service is provided by the residents of two sewer districts. .. 3. Central Wappin2:er Water Improvement Area 99-2R .. In February 2001, the Town Board adopted a Bond Resolution authorizing the issuance of $8,590,000 in serial bonds to pay the costs of water improvement. As of December 31, 2008, the Town has issued $8,490,000 of this authorization in bonds and notes to pay for the costs of aforesaid project. In August 2007, the Town issued $7,380,000 in serial bonds as permanent financing. The current outstanding balance is $7,172,580. .. .. The costs incurred on the project amounted to $8,075,246, as of December 31,2008. 4. Authorized Debt .. As of December 31, 2008, the Town has authorized, but not issued, the following new debt: .. Authorization Authorized Un-issued PURPOSE Date Amount Amount Refunding Bonds 02/01/99 $ 4,700,000 $ 1,430,000 Central Wappinger Water 02/12/01 8,590,000 100,000 Road Irq)roverrent OS/27/03 3,300,000 1,220,000 Corrputer Hardware and Software 03/12/03 550,000 200,000 TOTALS $ 17,140,000 $ 2,950,000 .. .. .. ... 45 .. . . TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2008 .. NOTE J - Municipal Landfills 1. Castle Point Landfill . . The Town has voluntarily entered into a Consent Order with the New York State Department of Environmental Conservation to close, cap and monitor the landfill at Castle Point. The closing and capping project was completed in 1999. The costs of monitoring, which could be required for up to thirty years after closure, are currently estimated to amount to $88,460. The Town has recorded the long term liability of $84,037 and short term liability of $4,423 in the Statement of Net Assets. The costs of both closure and post closure monitoring are ordinarily recognized over the expected useful life of the landfill. However, since the landfill has stopped accepting refuse and is now closed, any additional costs over the estimate is being recognized as incurred. The Town incurred $4,423 in monitoring costs during 2008. The future costs may be higher due to inflation, changes in technology or subsequent changes in regulations. . . 2. Pou2:hkeepsie-Wappin2:ers-LaGran2:e Joint Landfill . . The Town has shared in the monitoring costs of a closed landfill, the Poughkeepsie- Wappinger-LaGrange Joint Landfill. This joint activity includes the City and Town of Poughkeepsie, New York, the Village of Wappingers Falls, New York, the Town of LaGrange, New York and the Town of Wappinger, New York. All costs associated with monitoring are recognized as incurred. The Town's share of monitoring costs, for the year ended December 31, 2008, amounted to $6,505. . . The following is a summary of unaudited fmancial information at December 31,2008, which is included in the separate fmancia1 statements available from the Joint Landfill Board of Governors, Town of Poughkeepsie, One Overocker Road, Poughkeepsie, New York, 12603: . Total Assets $ 140,416 Total liabilities $ Total Venture Equity $ 140,416 Total Revenues $ 285,889 Total Expenditures $ 373,445 . . During 2002, violations were documented at the landfill and in 2003 an Order of Consent was issued through the New York State Department of Environmental Conservation to remediate Environmental Conservation Law and New York Codes Rule and Regulations violations. To comply with this order the municipalities need to perform fmal closure of the landfill under current regulations by December 31, 2005 and perform post closure care and monitoring for a minimum of thirty years thereafter. The estimated cost of final closure is $10,000,000. All costs are borne proportionately by each municipality: the Town of Wappinger's share is 14.1728% or $1,417,280. The Town issued $1,425,368 in bond anticipation notes to fmance its share. Currently $1,271,000 is outstanding on these notes. . . ... ... 46 . .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2008 NOTE J - Municipal Landfills (Cont'd) .. 2. Pou2hkeepsie-Wappim!ers-LaGran2e Joint Landfill (Cont'd) .. Post closure and monitoring costs, which commenced in 2007 and continue for 30 years, are estimated to amount to $1,683,500, with the Town's share being $238,599. III NOTE K - Subseauent Events .. The Town has issued the following new debt which permanently financed bond anticipation notes. No new proceeds were obtained. .. TYPE ISSUE DATE MATURITY DATE RATE PURPOSE AMOUNT .. Serial Bonds 04/01/09 04/01/22 2.00-4.00% Public Improvement $ 3,362,000 .. $ 3,362,000 .. .. IiIIll . .. . . .. ... 47 - .. .. .. .. .. REQUIRED SUPPLEMENTAL INFORMATION .. .. .. .. . .. .. .. .. ilia .. ... ... - III EXHIBIT I TOWN OF WAPPINGER, NEW YORK BUDGETARY COMPARISON SCHEDULE ill FOR THE YEAR ENDED DECEMBER 31.2008 GENERAL FUND .. VARIANCE ORIGINAL FINAL FAVORABLE BUDGET BUDGET ACTUAL (UNFAVORABLE) REVENUES .. Real property taxes $ 1,656,236 $ 1,656,236 $ 1,656,236 $ Real property tax items 70,500 70,500 98,570 28,070 Non property tax items 1,153,000 1,153,000 1,250,617 97,617 .. Departmental income 189,500 189,500 227,683 38,183 Intergovernmental charges Use of money and property 238,000 238,000 289,198 51,198 .. Licenses and permits 226,500 226,500 292,183 65,683 Fines and forfeitures 145,250 145,250 150,585 5,335 Sale of property and compensation for loss 5,339 5,339 Miscellaneous local sources 333,871 333,871 .. State aid 1,521,500 1,521,500 1,103,521 Federal aid .. Total revenues 5,200,486 5,200,486 5,407,803 625,296 Appropriation of prior year's fund balance 253,914 253,914 120,000 (133,914) Total revenues and appropriation of prior year's fund balance 5,454,400 5,454,400 5,527,803 491,382 .. EXPENDITURES AND ENCUMBRANCES .. General Government Support 1,789,299 1,799,497 2,176,052 (376,555) Public safety 479,924 479,924 554,023 (74,099) Health 2,750 2,750 3,510 (760) .. Transportation 240,625 219,726 263,536 (43,810) Economic assistance & opportunity 25,850 62,950 30,287 32,663 Culture and recreation 786,522 775,823 746,632 29,191 Home and community service 498,121 482,421 551,421 (69,000) .. Employee benefits 716,726 716,726 610,507 106,219 Debt service 914,583 914,583 913,349 1,234 .. Total expenditures and encumbrances 5,454,400 5,454,400 5,849,317 (394,917) Excess (deficiency) of revenues and appropriation of prior year's fund balance over (under) .. expenditures and encumbrances (321,514) 96,465 Other financing sources (uses) .. Proceeds of debt 225,000 225,000 Operating transfers in Operating transfers out .. Total other financing sources 225,000 225,000 Excess (deficiency) of revenues and appropriation of ... prior year's fund balance and other sources over (under) expenditures, encumbrances $ $ $ (96,514) $ 321,465 ... The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. 48 ... .. .. HIGHWAY FUND .. VARIANCE ORIGINAL FINAL FAVORABLE BUDGET BUDGET ACTUAL (UNFAVORABLE) REVENUES .. Real property taxes $ 2,090,709 $ 1,785,710 $ 1,785,710 $ Real property tax items Non property tax items 305,000 301,862 (3,138) .. Departmental income Intergovernmental charges 1,500 1,500 (1,500) Use of money and property 10,000 10,000 8,160 (1,840) .. Licenses and permits Fines and forfeitures Sale of property and compensation for loss 2,043 2,043 Miscellaneous local sources 4,407 4,407 .. State aid 125,000 125,000 225,338 100,338 Federal aid .. Total revenues 2,227,209 2,227,210 2,327,520 100,310 Appropriation of prior year's fund balance Total revenues and appropriation of prior year's fund balance 2,227,209 2,227,210 2,327,520 100,310 .. EXPENDITURES AND ENCUMBRANCES .. General Government Support 32,258 71,790 (39,532) Public safety Health .. Transportation 1,677,341 1,645,164 1,709,692 (64,528) Economic assistance & opportunity Culture and recreation Home and community service .. Employee benefits 494,845 494,845 462,766 32,079 Debt service 166,223 166,143 166,201 (58) .. Total expenditures and encumbrances 2,338,409 2,338,410 2,410,449 (72,039) Excess (deficiency) of revenues and appropriation of prior year's fund balance over (under) .. expenditures and encumbrances (111,200) (111,200) (82,929) 28,271 Other financing sources (uses) .. Proceeds of debt Operating transfers in 111,200 111,200 55,031 (56,169) Operating transfers out .. Total other financing sources 111,200 111 ,200 55,031 (56,169) Excess (deficiency) of revenues and appropriation of - prior year's fund balance and other sources over (under) expenditures, encumbrances $ $ $ (27,898) $ (27,898) - 49 - .. .. WATER FUND .. VARIANCE ORIGINAL FINAL FAVORABLE BUDGET BUDGET ACTUAL (UNFAVORABLE) REVENUES .. Real property taxes $ 636,368 $ 639,120 $ 639,120 $ Real property tax items Non property tax items .. Departmental income 810,736 810,736 889,300 78,564 Intergovernmental charges Use of money and property 5,130 5,130 15,354 10,224 .. Licenses and permits Fines and forfeitures Sale of property and compensation for loss 756,899 756,899 Miscellaneous local sources 52,234 52,234 .. State aid Federal aid .. Total revenues 1,452,234 1,454,986 2,352,907 897,921 Appropriation of prior year's fund balance 99,542 96,699 (96,699) Total revenues and appropriation of prior year's fund balance 1,551,776 1,551,685 2,352,907 801,222 .. EXPENDITURES AND ENCUMBRANCES 11II General Government Support Public safety Health 11II Transportation Economic assistance & opportunity Culture and recreation Home and community service 897,566 897,566 996,910 (99,344) .. Employee benefits 7,685 7,594 3,708 3,886 Debt service 743,159 743,159 743,106 53 11II Total expenditures and encumbrances 1,648,410 1,648,319 1,743,724 (95,405) Excess (deficiency) of revenues and appropriation of prior year's fund balance over (under) .. expenditures and encumbrances (96,634) (96,634) 609,183 705,817 Other financing sources (uses) .. Proceeds of debt Operating transfers in 96,634 96,634 (96,634) Operating transfers out 11II Total other financing sources 96,634 96,634 (96,634 ) Excess (deficiency) of revenues and appropriation of .. prior year's fund balance and other sources over (under) expenditures, encumbrances $ $ $ 609,183 $ 609,183 .. 50 .. .. .. SEWER FUND .. VARIANCE ORIGINAL FINAL FAVORABLE BUDGET BUDGET ACTUAL (UNFAVORABLE) REVENUES .. Real property taxes $ 985,542 $ 1,556,987 $1,557,217 $ 230 Real property tax items Non property tax items .. Departmental income 2,020,231 1,450,951 1,517,394 66,443 Intergovernmental charges Use of money and property 287,261 287,261 332,472 45,211 .. Licenses and permits Fines and forfeitures Sale of property and compensation for loss Miscellaneous local sources .. State aid 6,070 6,070 Federal aid .. Total revenues 3,293,034 3,295,199 3,413,153 117,954 Appropriation of prior year's fund balance 528,311 544,213 362,749 (181,464) Total revenues and appropriation of prior year's fund balance 3,821,345 3,839,412 3,775,902 (63,510) .. EXPENDITURES AND ENCUMBRANCES .. General Government Support Public safety Health .. Transportation Economic assistance & opportunity Culture and recreation Home and community service 1,627,848 1,627,848 1,711,485 (83,637) . Employee benefits 6,612 6,611 2,415 4,196 Debt service 2,186,885 2,204,953 2,168,884 36,069 .. Total expenditures and encumbrances 3,821,345 3,839,412 3,882,784 (43,372) Excess (deficiency) of revenues and appropriation of prior year's fund balance over (under) IIIlII expenditures and encumbrances (106,882) (106,882) Other financing sources (uses) .. Proceeds of debt Operating transfers in 5,526 5,526 Operating transfers out .. Total other financing sources 5,526 5,526 Excess (deficiency) of revenues and appropriation of .. prior year's fund balance and other sources over (under) expenditures, encumbrances $ $ $ (101,356) $ (101,356) .. 51 .. ... ... EXHIBIT II . TOWN OF WAPPINGER, NEW YORK OTHER POST-EMPLOYMENT BENEFITS PLAN SCHEDULE OF FUNDING PROGRESS DECEMBER 31. 2008 . . Unfunded UAL as a Actuarial Accrued Percentage Actuarial Value of Accrued Liability Funded Covered of Covered Valuation Assets Liability (VAL) Ratio Payroll Payroll Year Ended, Date (a) (b) (b-a) (a/b ) (c) ((b-a)/c) 12/31/2008 12/31/2008 $ - $ 4,469,088 $ 4,469,088 0.0% $ 2,378,751 187.88% . . ... . ... . . .. .. .. .. - 52 - .. .. iIIll iIIll III OTHER SUPPLEMENTAL INFORMATION iIIll .. .. III III III .. iIIll .. III III III - - - .. ASSETS EXHIBIT III TOWN OF WAPPINGER, NEW YORK COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS DECEMBER 31,2008 TOTAL SPECIAL MISC NON-MAJOR GRANT LIGHT AMBULANCE GOVERNMENTAL FUND FUND FUND FUNDS $ $ 18,121 $ 76,810 $ 94,931 500 466 966 244 244 $ 500 $ 18,121 $ 77,520 $ 96,141 .. .. .. .. Cash and cash equivalents Receivables: Charges for services Due from other funds Prepaid expense .. Total assets .. .. LIABILITIES AND FUND EQUITY LIABILITIES .. Accounts payable $ $ 3,651 $ 215 $ 3,866 Accrued liabilities Due to other funds. 3,000 54 3,054 Deferred revenues 500 500 .. Total liabilities 500 6,651 269 7,420 FUND BALANCE .. Fund balance (deficit): Reserved for: Prepaids and Inventory .. Unreserved: Designated: Subsequent year's expenditures 11,470 77,251 88,721 Undesignated .. Total fund balance 11,470 77,251 88,721 Total liabilities and fund balance $ 500 $ 18,121 $ 77,520 $ 96,141 .. .. .. See independent auditor's report .. 53 .. .. III EXHIBIT IV III TOWN OF WAPPINGER, NEW YORK COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS III FOR THE YEAR ENDED DECEMBER 31,2008 III TOTAL MISC NON-MAJOR LIGHT AMBULANCE GOVERMENTAL III FUND FUND FUNDS REVENUES Property taxes $ 40,483 $ 399,095 $ 439,578 Use of money and property 582 4,959 5,541 III Total revenues 41,065 404,054 445,119 III EXPENDITURES III General government support 324 324 Health 396,927 396,927 Transportation 40,180 40,180 III Employee benefits 531 531 Total expenditures 40,180 397,782 437,962 III Excess (deficiency) of revenues over expenditures 885 6,272 7,157 III Other fmancing sources: Operating transfers in III Operating transfers out Total other financing sources .. Excess (deficiency) of revenue and other sources over expenditures and other uses 885 6,272 7,157 III Fund Balance, December 31, 2007 10,585 70,979 81,564 Fund Balance, December 31, 2008 $ 11,470 $ 77,251 $ 88,721 .. III See independent auditor's report 54 ... ... ...