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2005-12-31 ;:,' L ~ I. I.. .. 11II I. TOWN OF WAPPINGER, NEW YORK i. FINANCIAL STATEMENTS L AS OF AND FOR THE YEAR ENDED DECEMBER 31. 2005 1 II. It. .. .. III III .. .. . .. iiIIII k. ... III it Ii. Ii. III II iIII III .. II .. .. .. .. .. .. ill TOWN OF WAPPINGER, NEW YORK TABLE OF CONTENTS DECEMBER 31. 2005 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, 2005...............................................................................5-11 BASIC FINANCIAL STATEMENTS: Government-Wide Financial Statements: Statement of Net Assets - December 31, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. .. .. . .. .. ... .. .... .. .... .. .. ..... ... ...... ." ..... ..12 Statement of Activities - For the Year Ended December 31, 2005 ............................................ ............................................. ...... ................ 13-14 Fund Financial Statements: Balance Sheet - Governmental Funds - December 31, 2005.................................................. 15-16 Reconciliation of Governmental Funds Balance Sheet To The Statement of Net Assets - December 31, 2005..............................................................17 Statement of Revenues, Expenditures and Changes In Fund Balances- Governmental Funds - For the Year Ended December 31, 2005............ .... ........................ ......... .......... ............ ........ 18-19 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, 2005............................................20 .. .. Statement of Net Assets - Fiduciary Funds - December 31, 2005 .................................... 21 II. Notes to the Basic Financial Statements......... .............. ........ ..... ........... ............... .................... 22-43 .. REQUIRED SUPPLEMENTAL INFORMATION: 0'1 .. Exhibit I Budgetary Comparison Schedule - General Fund - For the Year Ended December 31, 2005.... ........................................ .......44-46 .. OTHER SUPPLEMENTAL INFORMATION: ilia Exhibit II Combining Balance Sheet - Non-Major Governmental Funds - December 31, 2005 ........................................................................47-48 .. ill Exhibit III Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Non-Major Governmental Funds For the Year Ended December 31,2005................................................................... 49-50 ill II iii . .. .. .. .. .. i. i II ~~ Beechwood Office Park SEDORE & COMPANY 2678 South Road, Suite 101 Poughkeepsie, NY 12601 le'1845.485,5510 !'on 845.485.5547 /I'hkdl 845,897,1040 ~ L Certified Public Accountants, PC www.sedoreco.com I. INDEPENDENT AUDITORS' REPORT jal/les L Serlore, jr:, C/'i1 MiIIi: S OSulliuflil, CPA jallles F Lmmo, jI:, CPA /Jllrla M. HiIIllIigrlll, CPA X<lI'f'1l F HallSell, CPA L BUlIUlI, CPA Orades /I. N,il', jI:, CPA La II L To the Supervisor and Members of the Town Board Town of Wappinger, New York 20 Middlebush Road Wappingers Falls, New York 12590 L }- IIa 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, 2005, 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. i. L 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 fmancial 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. .. i. .. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective fmancial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Wappinger, New York, as of December 31, 2005, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. III i~ .. Management's Discussion and Analysis and Exhibit I, budgetary comparison information, 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. .. '\ .. Large Firm Expertise'" Local Firm Service 1 i. ,* La f~' II. " La Our audit was conducted for the purpose of forming opinions on the fmancial statements that collectively comprise the Town of Wappinger, New York's basic financial statements. The combining non-major fund financial statements 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. .. ~'1 .. .. In accordance with Government Auditing Standards, we have also issued our report dated December 7, 2006 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 Auditipg 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-.h/z.L d- (j~ AA C. f fl :..s Poughkeepsie, Ne; YorkU---' --d" December 7, 2006 L .. ... M .. .. ill .. .. .. .. - .. 2 .. i. ~~ Beechwood Office Park III SEDORE & COMPANY 2678 South Road, Suite 101 Poughkeepsie, NY 12601 [,I 845.485.5510 t.l\ 845.485.5547 Fi,l,kill 845.897.1040 www.sedoreco.com 0,' ;;~ Certified Public Accountants, pc. .. .. jflllles I. Sedore, f;:, (,j'i1 Mark S. OSulfi1'fl1l, CI'iI )</II/{'5 F Letterio, Jr., CI'l1 {inf'" AI. HarlJligtlJl, CJ-~l !\:1rOf r H,nlsol, C/>A .. ill 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 L RrowlI, CI~4 Chllle5 fl. Rae, jI:, Chi .. .. To the Supervisor and Members of the Town Board Town of Wappinger, New York 20 Middlebush Road Wappingers Falls, New York 12590 ill .. We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, 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, 2005, which collectively comprise the Town of Wappinger, New York's basic financial statements and have issued our report thereon dated December 7, 2006. 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. II .. Internal Control Over Financial Reportin2 .. .. In planning and performing our audit, we considered the Town of Wappinger's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the basic financial statements and not to provide an opinion on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses .. .. III .. Large Firm Expertise,... Local Firm Service 3 III .. .. .. We noted others matter 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 7, 2006. ita Compliance and Other Matters ita 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 7, 2006. lIII This report is intended solely for the information and use of the audit committee, Supervisor, Town Board, Finance Director, management, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Se~~ ~U\U'~'5 Poughkeepsie, New York December 7, 2006 lilt iIiI III ill III ita III .. .. 4 - ;r,:. II. ill ~ II. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2005 (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 ill 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 [mancial statements for information regarding individual types of funds. .. N, .. -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 2005 2004 Change Non-Capital $ 9,499,380 $ 10,535,739 $ (1,036,359) Capital 24,245,927 22,194,551 2,051,376 Total Assets $ 33,745,307 $ 32,730,290 $ 1,015,017 Liabilities Current $ 16,666,390 $ 13,995,439 $ 2,670,951 Non-Current 22,037,376 24,488,534 (2,451,158) Total Liabilities 38,703,766 38,483,973 219,793 Net Assets: Capital 5,124,127 5,614,308 (490,181 ) Restricted 42,165 65,587 (23,422) Unrestricted (10,124,751) (11,433,578) 1,308,827 Total Net Assets (4,958,459) (5,753,683) 795,224 Total Liabilities and Net Assets $ 33,745.307 $ 32,730,290 $ 1,015,017 .. .. .. .. lilt .. .. .. 5 La i. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2005, Cont'd. (Un-audited) &; .. ~; Ill. Revenues 2005 ~ ... Program Fines, Fees & Charges Operating Grants Capital Grants General Revenues Property Taxes Other Taxes Investment Earnings State Aid Other Revenues Total Revenues $ 2,351,165 $ 166,084 108,257 ... 5,579,837 3,195,552 686,716 233,806 579,331 12,900,748 .. ~.. II. .. Expenses General Government Support Public Safety Health Transportation Economic Assistance Culture and Recreation Home and Community Service Other 3,237,827 664,051 416,882 2,432,156 30,308 1,058,234 2,568,843 1,364,797 11,773,098 1.127.650 $ .. III II. Total Expenses Change in Net Assets $ .. Governmental Funds: GENERAL FUND .. 2004 2,330,762 $ 45,853 198,434 5,548,365 3,039,514 629,177 237,704 780,104 12,809,913 3,262,995 653,088 328,915 2,229,015 32,684 880,786 2,073,883 1,371,296 10,832,662 1.977 .251 $ Change 20,403 120,231 (90,177) 31,472 156,038 57,539 (3,898) (200,773) 90,835 (25,168) 10,963 87,967 203,141 (2,376) 177,448 494,960 (6,499) 940,436 (849.601 ) The majority of activity for the Town is presented in the General Fund. Fund Balance for the General Fund decreased by $448,138 from 2004 to 2005. The major reason for the decrease was the increase in Interfund Transfers to the Highway Fund and to the Carnwath/Greystone Restoration Proj ect. ill }(f/ .. Total General Fund Equity for 2005 is approximately $1,401,968 and $334,507 of this is unappropriated fund balance. .. The fluctuations in the budget are explained in the revenue and expense summary above. ... III 6 ~. .. ... ... MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2005, Cont'd. (Un-audited) lit The Following Charts describe significant categories of General Fund revenues and expenses: Ii. General Fund Revenues 2005 .. i.. 26% . Property Taxes 31% . State Aid ... 5% o Sales and Franchise Tax 4% o Real Property Tax Items .. 9% . Departmental Income . Licenses and Permits III . All Other 24% .. .. .. General Fund Expenses 2005 III 9% . General government support . Public safety .. o Culture and Recreation ., . , .. 11% ... ., . I o Home and community servIces . Employee benefits . Debt Service - 13% . All Other .. 7 III L. ~j .. .. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2005, Cont'd. (Un-audited) ~. III HIGHWAY FUND .. The Highway Fund ended the year with $19,265 Fund Balance. Contractual expenses for continued machinery maintenance increased by $16,100, an extended (6 months) workers' compensation disability increased the budget by $13,600 and New York State Retirement System benefits were $39,658 higher than anticipated. These items account for the decrease in the Fund Balance. .. .. The following charts describe the significant categories of Highway Fund revenues and expenses: .. Highway Fund Revenues 2005 ill .. . Property Taxes . Transfers from Other Funds o State Aid o Other Revenue i'~j lit II ill .. lit 1M .. .. .. 8 .. ill III MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2005, Cont'd. (Un-audited) .. !------ . Highway Fund Expenses 2005 Ji III . Street Maintenance 19% . Permanent Road Improvements o Snow Removal III .. .. o Machinery Purchase and Maintenance . Employee Benefits . Brush and Weeds II. 17% . Debt Service III WATER FUND III II. The Town operated twelve water districts during 2005 with an overall Fund Balance of $262,575. Operating revenues totaled $1,371,342 with the expenses totaling $1,443,460 resulting in excess (deficiency) of revenues over (under) expenditures in the amount of ($72,118). The Town has appropriated Fund Balance in the amount of $103,263 in the 2006 Budget and will continue to monitor available Fund Balance. .. SEWER FUND . II The Town operated nine Sewer Districts during 2005 with an overall Fund Balance $2,526,160. Operating revenues totaled $4,077,051 with the expenses totaling $3,877,603 resulting in excess of revenues over expenditures in the amount of $199,448. The Town has appropriated Fund balance in the amount of $772,024 for the 2006 Budget. .. .. .. t .. 9 iia III .. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2005, Cont'd. (Un-audited) .. BUDGETARY HIGHLIGHTS .. The Town Budget is adopted in OctoberlNovember 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. II. 3. Activities regarding capital assets, long and short term debt .. The Town spent over two million dollars on fifteen capital projects in 2005. The top five projects were: the Central Wappinger Water Improvement Area 1999-2R, the Sewer Improvement Area #4 Project, the Widmer Road Paving Project, the Multi-Town Revaluation Project and the Carnwath (Greystone) Renovation Project. The expenditures for these projects accounted for eighty one percent (81 %) of the total capital expenditures. Ita ill 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 2008. The project expenses are funded entirely by the members of the district. Additional bonding to finance the construction of the project took place in 2005 with long term financing to be issued in 2007. Total bonding for the project will be approximately $8,590,000. .. III .. The other projects related to purchase of highway equipment, town-wide road blacktopping and drainage, technology project, fuel tank replacements, and water and sewer district improvements, other than grant revenue, are funded by the General, Highway Funds or by the members of each water and sewer district. Future bonding is expected to be issued. Please review the notes to the financial statements for information regarding these issues. Ita Long Term Debt .. III The Town received a Moody's rating of Aa3 when it issued new bonds in 2003 and has maintained this rating. This is the fourth highest rating possible and the highest for a municipality in Dutchess County. .. .. .. 10 III .. III .. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2005, Cont'd. (Un-audited) ill Ii. Total long term debt at the end of 2005 was $23,065,000. Only, $4,184,080 ofthis balance is General Fund debt. The majority of the Town's debt relates to its water and sewer districts amounting to $1,171,176 and $17,709,744, respectively. Water and sewer debt is paid by the members of the respective districts. .. Short Term Debt .. The Town currently has four Bond Anticipation Notes (BANs) outstanding. The Central Wappinger Water Improvement Area 1999-2R Capital project has two BANs totaling $7.27 million. The long term financing for the Central W appinger Water Improvement Area 1999- 2R Water District will take place in 2007. There are two other BANs totaling $4,699,918 funding various projects within the Town. Please review the notes to the financial statements for further information regarding short- term debt. II. Ira 4. Currently Known Facts Bearing on the Future ... The Town of Wappinger is participating in a revaluation project with several other Southern Dutchess Municipalities. The purpose of revaluation is to bring present property assessments to full valuation. Full valuation will provide equitable tax distribution among all homeowners within the Town, County and the shared school districts. The project was awarded in 2004 and will require three years to complete. Final valuations are expected to be in place by the March 1 S\ 2007 valuation date. The total project cost to the town has been budgeted at $575,000. These funds have been financed by a five year serial bond. Once full valuation has been established the Southern Dutchess Consortium has agreed to undergo annual reassessment to maintain full valuation. State funding is currently available to assist with this maintenance cost. ... .. .. .. III .. .. .. 11 III .. TOWN OF WAPPINGER, NEW YORK STATEMENT OF NET ASSETS DECEMBER 31. 2005 III GOVERNMENTAL ACTIVITIES .. ASSETS Current assets: Cash and cash equivalents $ 7,681,055 .. Receivables (net) 1,758,103 Inventories 47,866 Deposits with other governments 5,000 Prepaid expenses 7,356 III Total current assets 9,499,380 Capital assets: .. Land 7,782,217 Infrastructure, net of depreciation 2,963,853 Buildings, machinery and equipment, net of depreciation 5,274,734 .. Construction in progress 8,225,123 Total capital assets 24,245,927 l1li Total assets $ 33,745,307 LIABILITIES l1li Current Liabilities: Accounts Payable $ 1,174,015 Accrued liabilities and retainage payable 668,904 III Notes payable 11,969,918 Deferred revenue 15,628 Due to other governments 28,892 .. Current portion of long-term liabilities LandfIll remediation liability 1,019,033 Bonds payable 1,790,000 Total current liabilities 16,666,390 III Non-current liabilities: Judgment and claims 80,000 III Compensated absence liabilities 181,271 LandfIll remediation liability 501,105 Bonds payable 21,275,000 III Total non-current liabilities 22,037,376 Total liabilities 38,703,766 iii NET ASSETS Invested in Capital Assets, net of related debt 5,124,127 .. Restricted for: Recreation 42,165 Unrestricted (10,124,751) Total net assets (4,958,459) IilII Total liabilities and net assets $ 33,745,307 IilII The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. 12 .. .. TOWN OF WAPPINGER, NEW YORK STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31. 2005 .. EXPENSES CHARGES FOR SERVICES OPERATING GRANTS AND CONTRIBUTIONS .. .. 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 .. $ 3,237,827 664,051 416,882 2,432,156 30,308 1,058,234 2,568,843 1,364,797 $ 17,941 99,349 $ 7,370 .. 61,363 2,172,512 158,714 .. Total governmental activities 11,773,098 2,351,165 166,084 III General revenues Taxes: Real property taxes Non-property ciX items Sales tax Mortgage tax Franchise taxes Unrestricted investment earnings Grants and contributions not restricted to specific programs Permits and licenses Fines and forfeited bail Special item-Gain on sale of property and compensation for loss Payments from other governments Miscellaneous Total general revenues, special items and transfers .. .. - .. .. Change in net assets before extraordinary item Extraordinary item - Landfill remediation cost Change in net assets Net assets - beginning III Net assets - ending III .. The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. - 13 .. .. II. MIl NET (EXPENSE) REVENUE AND CHANGES IN NET ASSETS .. CAPITAL GRANTS AND GOVERNMENTAL CONTRIBUTIONS ACTIVITIES ill iIIIII 108,257 $ (3,212,516) (564,702) (416,882) (2,323,899) (30,308) (838,157) (396,331) (1,364,797) $ .. IIiIIII 108,257 (9,147,592) IIiIIII 5,579,837 76,613 1,262,899 IIiIIII 1,607,294 248,746 686,716 IIiIIII 233,806 229,214 144,424 25,060 .. 5,013 175,620 10,275,242 IIiIIII 1,127,650 (332,416) .. 795,234 (5,753,693) MIl $ (4,958,459) IIiIIII .. .. 14 .. .. III TOWN OF WAPPINGER, NEW YORK BALANCE SHEET GOVERNMENTAL FUNDS .. DECEMBER 31.2005 .. GENERAL HIGHWAY SEWER FUND FUND FUND ASSETS .. Cash and cash equivalents $ 614,042 $ 6,238 $ 2,333,593 Receivables: Charges for services 448,422 .. Other 163,549 4,089 Deposits with other governments Due from other funds 661,347 81,564 2,600 .. Due from other governments 408,378 State and federal receivable 401,008 108,257 Inventory, at cost 47,866 .. Prepaid expenses 5,991 . Total assets $ 2,254,315 $ 248,014 $ 2,784,615 .. LIABILITIES AND FUND EQUITY .. LIABILITIES Accounts payable $ 405,309 $ 201,913 $ 235,855 Accrued liabilities 24,324 12,765 .. Retainage payable 983 Bond anticipation notes payable Due to other funds 387,211 14,071 22,600 .. Due to other governments 18,892 Deferred revenues 15,628 Total liabilities 852,347 228,749 258,455 III FUND BALANCE .. Fund balance (deficit): Reserved for: Recreation 42,165 .. Prepaids and inventory 5,991 47,866 Miscellaneous 402,900 Unreserved: ill Subsequent year's expenditures 616,405 291,867 Undesignated 334,507 (28,601) 2,234,293 Total fund balance 1,401,968 19,265 2,526,160 .. Total liabilities and fund balance $ 2,254,315 $ 248,014 $ 2,784,615 .. The accompanying Notes to the Financial Statements .. should be read in conjunction with these Financial Statements. 15 . .. iIIIl $ 228,755 $ 102,183 $ 1,174,015 72,234 62 109,385 .. 95,416 96,399 11,969,918 11,969,918 313,425 12,000 749,307 .. 10,000 28,892 15,628 12,689,748 114,245 14,143,544 .. - 16 .. .. TOWN OF WAPPINGER, NEW YORK RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS DECEMBER 31.2005 ill .. III Total fund equity for governmental funds $ (3,894,857) Total net assets reported for governmental activities in the statement .. of net assets are different because: .. Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. 24,245,927 .. Long-term liabilities, including bonds 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. .. (24,846,409) ".. .. Accrued interest is not reported in the funds. (463,120) Total net assets of governmental activities $ (4,958,459) .. .. .. .. .. .. .. - The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. 17 - .. (t .. TOWN OF WAPPINGER, NEW YORK STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS , ill FOR THE YEAR ENDED DECEMBER 31. 2005 j: .. GENERAL IDGHWAY SEWER FUND FUND FUND REVENUES II. Real property taxes $ 1,333,804 $ 1,662,016 $ 1,575,821 Real property taxes items 76,543 Non property taxes items 1,511,645 III Departmental income 273,611 1,433,768 Intergovernmental charges 5,013 .. Use of money and property 148,878 11,242 482,533 Licenses and permits 229,294 Fines and forfeitures 144,424 II. Sale of property and compensation for loss 13,489 Miscellaneous local sources 118,393 7,287 3 State aid 1,855,227 108,257 Total revenues 5,705,308 1,793,815 3,492,125 ... EXPENDITURES .. General government support 2,357,094 32,511 Public safety 499,760 Health 3,800 III Transportation 216,580 1,508,539 Economic assistance & opportunity 30,308 Culture and recreation 817,485 .. Home and community services 578,120 1,600,858 Employee benefits 699,977 416,410 1,300 Debt service 738,032 243,958 2,242,934 .. Total expenditures 5,941,156 2,168,907 3,877,603 Excess of revenues over expenditures (235,848) (375,092) (385,478) AlII Other financing sources: .. BANs redeemed from appropriations Operating transfers in 87,710 327,687 584,926 Operating transfers out (300,000) Total other financing sources (212,290) 327,687 584,926 . Excess (deficiency) of revenue and other sources .. over expenditures and other uses (448,138) (47,405) 199,448 Fund Balance, December 31, 2004 1,850,106 66,670 2,326,712 .. Fund Balance, December 31, 2005 $ 1,401,968 $ 19,265 $ 2,526,160 - The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. 18 .. .. .. CAPITAL NON- .. PROJECTS MAJOR TOTAL FUND FUNDS FUNDS .. $ $ 1,008,196 $ 5,579,837 70 76,613 1,511,645 .. 634,238 2,341,617 5,013 123,429 19,983 786,065 .. 229,294 144,424 8,921 2,650 25,060 .. 15,763 96,250 237,696 1,963,484 Ii. 148,113 1,761,387 12,900,748 i .. 757,601 212 3,147,418 499,760 L 409,382 413,182 476,365 32,500 2,233,984 30,308 38,123 855,608 i. 1,254,326 712,136 4,145,440 5,267 1,122,954 727,729 3,952,653 ... 2,526,415 1,887,226 16,401,307 (2,378,302) (125,839) (3,500,559) .. La 818,550 818,550 225,850 1,226,173 (926,173) (1,226,173) ~ (107,623) 225,850 818,550 f .. m (2,485,925) 100,011 (2,682,009) L (5,741,399) 285,063 (1,212,848) t; ... $ (8,227,324) $ 385,074 $ (3,894,857) k L L 19 .. 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. 2005 .. .. ill Net change in fund balance - total government funds 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. iIIII lit Bond proceeds are reported on the financing sources in governmental furlds and thus contribute to the change in fund balance. fu the statement of net assets, however, issuing debt increases long-tenn 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: Bond anticipation note redeemed Repayments: Bond anticipation note principal Bond principal lit - In the statement of activities, interest is accured on outstanding bonds, whereas in governmental funds, an interest expenditure is reported when due. - .. 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. .. Net change in net assets of governmental activities .. .. - The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. .. (818,550) 818,550 1,848,556 $ (2,682,009) 2,051,376 1,848,556 (79,250) (343,439) $ 795,234 20 .. .. .. .. .. .. .. The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements 21 .. .. .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31. 2005 .. NOTE A - Summary of Sie:nificant Accountine: Policies The Town of Wappinger, New York (lithe 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 ofthe 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 fmancial statements are discussed below. .. ... ... 1. The Reportine: Entitv The Town, for fmancial 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 of the 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 fmancial 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. .. .. .. .. .. 22 ill IiIIIIl .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2005 IiIIIIl NOTE A - Summary of Sie:nificant Accountine: Policies (Continued) 2. Basic Financial Statements - Government-Wide Statements. Cont'd .. 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. II 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: II II 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 .. .. .. 23 .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2005 i lit NOTE A - Summary of Shmificant Accountin2: Policies (Continued) 3. Basic Financial Statements - Fund Financial Statements. Cont'd lit 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. Ii. 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 fmancial position and changes in financial position (sources, uses, and balances of financial resources) rather than upon net income. Ira 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. ill ill 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. 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. .. . 4. 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. i. ill 5. 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. ... ... .. 24 .. .. II. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2005 .. NOTE A - Summary of Si2nificant Accountim~ Policies (Continued) B. Fiduciary Funds ill III 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. .. if. III 1iJt: .. 4. Basis of Accountin2 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 II The governmental activities in the government-wide financial statements and fiduciary fund fmancial statements are presented on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred. .. B. Modified Accrual if:' 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. T{. III ill ''A iii III .. .. i. 25 .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2005 .. NOTE A - Summary of Si2nificant Accountin2 Policies (Continued) 5. Financial Statement Amounts J. A. Cash and Investments .. Cash includes amounts in demand and time deposits, as well as, short-tt:mn 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 of the 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. :,\ ... it. .. ill The cash and investments of the Town at December 31,2005, are as follows: .. CAPITAL NON- GENERAL IDGHWAY SEWER PROJECTS MAJOR FUND ~ FUND FUND ~ TOTAL Non-Interest Bearing Accounts $ 800 $ - $ - $ - $ - $ 800 Interest Bearing Accounts 613.242 6.238 2,333.593 4,427.129 300.053 7.680.255 TOTALS $ 614,042 $ 6,238 $ 2,333,593 $4,427,129 $ 300,053 $7,681,055 III .. ill ... 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, and the deposits are either: .. .. 1. 2. 3. iIIIlI Uncollateralized, or; Insured or collateralized with securities held by a pledging financial institution in the Town's name, or; Collateralized with securities held by the pledging financial institution's trust department or agent but not in the Town's name. a. 26 .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2005 ., .. NOTE A - Summary of Si2nificant Accountin2 Policies (Continued) 5. Financial Statement Amounts (Continued) A. Cash and Investments (Continued) III iii 1 2 3 $ 3,257 $ 7,676,998 $ ... Amounts on deposit differ from the Town's cash by outstanding checks, deposits clearing after year-end and balances handled by the Town's judges. .. B. Inventories .. Inventories consist of significant expendable supplies primarily sand and road salt and are carried at cost. C. Canital Assets . .. 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: "' .. . 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 the current year. 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 has historically been reported in the financial statements. The retroactive ill .. .. .. 27 .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) .. DECEMBER 31.2005 .. NOTE A - Summary of Sil!nificant Accountinl! Policies (Continued) 5. Financial Statement Amounts (Continued) .. C. Capital Assets (Continued) .. reporting of infrastructure is subj ect to an extended implementation period and is first effective for fiscal years ending in 2006. The Town has implemented the general provisions of GASB Statement No. 34 in 2003 and expects to implement the retroactive infrastructure provisions in the year ending December 31, 2006. ... 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: .. .. 1. The Town's obligations relating to employees' rights to compensation for future absences is attributable to employee's services already rendered; .. 2. The obligation relates to rights that vest or accumulate; 3. Payment of the compensation is probable; 4. The amount can be reasonably estimated. .. ill 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 31,2005, in the amount of$I8I,27I. 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. .. E. Interfund Activitv ill ... 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 fmandaI statements. .. .. 28 .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2005 .. NOTE A - Summary of Shmificant Accountim! Policies (Continued) 5. Financial Statement Amounts (Continued) ... F. Bud1!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. i. G. Pension Plans lit 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). ... l.. r .. 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, NY 12244. It. .. 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. lit I. j. II. .. 29 . .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) ill DECEMBER 31. 2005 .. NOTE A - Summarv of Sig:nificant Accounting: Policies (Continued) 5. Financial Statement Amounts (Continued) iIIlI G. Pension Plans: Plan Description (Continued) 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: .. ERS III iIIlI 2005 2004 2003 $ 238,735 $ 210,000 $ 115,996 .. The Town's contributions made to the Systems were equal to or in excess of 100 percent of the contributions required for each year. H. Post Emplovment Benefits II In addition to providing pension benefits, the Town provides health insurance coverage and survivor benefits for retired employees and their survivors. Substantially all of the Town employees may become eligible for these benefits if they reach normal retirement age while working for the Town. Health care benefits and survivors benefits are provided through an insurance company whose premiums are based on the benefits paid during the year. The Town recognizes the cost of providing benefits by recording its share of insurance premiums as an expenditure in the year paid. .. ill III For the year of 2005, $54,952 was paid on behalf of sixteen retirees, and recorded as expenditures in the General and Special Revenue Funds. .. I. Property 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 1 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 31 st. 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 .. - ... 30 .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONTID) .. DECEMBER 31. 2005 .. NOTE A - Summary of Shmificant Accountinl! Policies (Continued) 5. Financial Statement Amounts (Continued) ... J. Lonl!- 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. .. II. K. 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 12/31/05 .. .. .. General Fund Reserved for Recreation Reserved for Prepaids and Inventory Reserved for Miscellaneous: Inspection Fees Total General Fund $ 42,165 5,991 .. 402.900 451,056 III Highway Fund Reserved for Prepaids and Inventory 47.866 .. Non-Major Funds Reserved for Prepaids and Inventory 1,365 TOTAL FUND BALANCE RESERVES $ 500,287 lit .. L. Risk Manal!ement 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. .. .. .. 31 .. lit TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) III DECEMBER 31. 2005 .. NOTE A - Summarv of Sie:nificant Accountine: Policies (Continued) 5. Financial Statement Amounts (Continued) .. M. Use of Estimates <1 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. .. ill NOTE B - Other Receivables .. Other Receivables at December 31, 2005, consist of the following: ill CAPITAL NON GENERAL SEWER IDGHWAY PROJECTS MAJOR ill FUND FUND FUND FUND FUNDS TOTAL Accounts Receivable $ 163,549 $ 4,089 $ 229 $ . $ 167,867 .. Rents Receivable 448,422 194,105 642,527 TOTALS $ 163,549 $ 448,422 $ 4,089 $ 229 $ 194,105 $ 810,394 L ill till ... .. - ... 32 ... IiII .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) DECEMBER 31. 2005 lit .. 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, 2005. 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. lit .. AMOUNT AMOUNT FUND RECEN ABLE PAYABLE General $ 661,347 $ 387,211 Highway 81,564 14,071 Sewer 2,600 22,600 Capital Projects 313,425 Non-Major 3,796 12,000 TOTALS $ 749,307 $ 749,307 .. .. .. .. TRANSFERS TRANSFERS FUND IN OUT General $ 87,710 $ 300,000 Highway 327,687 Sewer 584,926 Capital Projects 926,173 Non-Major 225,850 TOTALS $ 1,226,173 $ 1,226,173 .. ill .. .. .. ... ... 33 .. . .. . TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) DECEMBER 31.2005 NOTE D - Capital Assets .. The following is a summary of changes and adjustments in the Capital Assets, for the year ended December 31, 2005: .. BALANCE JANUARY 1, 2005 ADDmONS Land $ 7,782,217 $ Buildings 5,584,203 5,155 Improvements Other Than Buildings 693,686 32,760 Roads 493,863 489,825 Infrastructure 1,880,196 347,532 Machinery & Equipment 4,011,616 151,948 Construction in Progress 6,638,467 1,586,656 Total 27,084,248 2,613,876 Less: accumulated depreciation Buildings 1,895,867 144,387 Improvements Other Than Buildings 531,688 15,468 Roads 52,832 65,579 Infrastructure 72,886 55,678 Machinery & Equipment 2,336,423 280,800 Total accumulated depreciation 4,889,696 561,912 Governmental activities capital assets, net $ 22,194,552 $ 2,051,964 $ (588) .. (DISPOSALS) $ .. .. (603) .. (603) .. .. II. (15) .. (15) .. .. *Depreciation was charged to governmental activities as follows: General government support $ 138,767 Public safety 54,466 Transportation 260,416 Culture and recreation 69,276 Home and community services 38,987 Total depreciation expense $ 561,912 ill - ... ... BALANCE DECEMBER 31, 2005 $ 7,782,217 5,589,358 726,446 983,688 2,227,125 4,163,564 8,225,123 29,697,521 2,040,254 547,156 118,411 128,549 2,617,223 5,451,593 $ 24,245,928 34 . . TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) . DECEMBER 31. 2005 NOTE E - Bond Anticipation 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 fmance 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. . The Bond Anticipation Notes outstanding as of December 31, 2005, are as follows: AMOUNT iii. OUTSTANDING ORIG INAL FINAL ORIGINAL AT .. ISSUE MATURITY INlEREST AMOUNT DECEMBER 31, PURPOSE DAlE DAlE RAlE OF ISSUE 2005 .. Sewer - Tri-Municipal 11/12/92 09/15/12 5.80%-6.65% 4,342,000 1,265,000 Sewer - Tri-Municipal 08/07/02 06/15/12 2.00%-4.40% 1,718,000 1,235,000 Sewer - Tri-Municipal 03/14/02 04/15/21 1.21 %-4.98% 9,836,556 8,060,000 .. Sewer - Tri-Municipal 11/26/02 05/15/15 3.18%-5.99% 8,519,786 4,635,000 Sewer - Tri-Municipal 06/01/95 11/15/15 3.70%-5.55% 2,610,054 1,480,000 . Water - Fleetwood 07/30/98 10/15/18 3.70%-5.15% 510,000 370,000 AMOUNT OUTSTANDING .. ORIGINAL FINAL ORIGINAL AT ISSUE MATURITY INlEREST AMOUNT DECEMBER 31, . PURPOSE DAlE DAlE RAlE OF ISSUE 2005 Greystone Property Purchase 1 % 1/00 1 % 1/20 4.75%-6.50% 2,085,000 1,750,000 .. Water 452,732 263,200 Sewer 288,876 171,500 ... Drainage 1,253,392 745,300 10/02/01 08/15/11 3.77% 1,995,000 1,180,000 Emergency Services .. Building 06/01/95 11/15/15 3.70%-5.55% 1,275,000 940,000 Water 564,000 537,976 Sewer 905,000 863,244 - Lighting 785,000 748,780 02/25/03 03/01/23 4.00%-4.50% 2,254,000 2,150,000 III TOTALS $ 35,145,396 $ 23,065,000 35 III Ii. L. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) DECEMBER 31. 2005 .. NOTE E - Bond Anticiuation Notes Payable (Continued) Changes in Bond Anticipation Notes Payable as of December 31, 2005, are as follows: II. BALANCE BALANCE JANUARY 1, NEW DECEMBER 31, PURPOSE 2005 ISSUES PAYMENTS 2005 Various Purposes $ 728,600 $ 1,203,368 $ (113,750) $ 1,818,218 Highway 1,453,000 700,000 (232,400) 1,920,600 Water 8,415,000 288,500 (472,400) 8,231,100 TOTALS $ 10,596,600 $ 2,191,868 $ (818,550) $ 11,969,918 NOTE F - Lonf!-Term Liabilities 1. Serial Bonds .. .. .. !l:' ill .. 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, 2005, are as follows: ... ill AMOUNT OUTSTANDING ORIGINAL FINAL ORIGINAL AT ISSUE MATURITY INTEREST AMOUNT DECEMBER 31, PURPOSE 11m 11m RATE OF ISSUE ~ Sewer - Tri-Municipal 11/12/92 09/15/12 5.80%-6.65% 4,342,000 1,265,000 Sewer - Tri-Municipal 08/07/02 06/15/12 2.00%-4.40% 1,718,000 1,235,000 Sewer - Tri-Municipal 03/14/02 04/15/21 1.21 %-4.98% 9,836,556 8,060,000 Sewer - Tri-Municipal 11/26/02 05/15/15 3.18%-5.99% 8,519,786 4,635,000 Sewer - Tri-Municipal 06/01/95 11/15/15 3.70%-5.55% 2,610,054 1,480,000 Water - Fleetwood 07/30/98 10/15/18 3.70%-5.15% 510,000 370,000 .. .. III .. .. ... 36 .. It lit .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) DECEMBER 31. 2005 II ilia NOTE F - Lon2- Term Liabilities (Continued) 1. Serial Bonds (Continued) . AMOUNT OUTSTANDING ORIGINAL FINAL ORIGINAL AT ISSUE MATURITY INTEREST AMOUNT DECEMBER 31, PURPOSE DATE DATE RATE OF ISSUE 2005 Greystone Property Purchase 1 % 1/00 1 % 1120 4.75%-6.50% 2,085,000 1,750,000 Water 452,732 263,200 Sewer 288,876 171,500 Drainage 1,253,392 745,300 10/02/01 08/15/11 3.77% 1,995,000 1,180,000 Emergency Services Building 06/01/95 11/15/15 3.70%-5.55% 1,275,000 940,000 Water 564,000 537,976 Sewer 905,000 863,244 Lighting 785,000 748,780 02/25/03 03/01/23 4.00%-4.50% 2,254,000 2,150,000 TOTALS $ 35,145,396 $ 23,065,000 .. .. II. .. .. ill . Ii. .. III .. .. .. 37 .. III .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) DECEMBER 31. 2005 It NOTE F - Lone-Term Liabilities (Continued) 3. Chanees .. The changes in the Town's indebtedness during the year ended December 31, 2005, are summarized as follows: .. BALANCE BALANCE AMOUNTS JANUARY 1, DECEMBER 31, DUE WITIIIN i. ~ INCREASE (DECREASE) 2005 ONE YEAR Serial Bonds Note F.1 $ 24,881,556 $ - $ (1,816,556) $ 23,065,000 $ 1,790,000 III Statutory Installment Bonds Note 32,000 (32,000) Compensated Absences .. Note A8 156,386 24,885 181,271 Landfill Closure and Post Post Costs Note J 1,202,169 317,969 1,520,138 1,019,033 III Judgement & Claims Note 1.1 80,000 80,000 .. TOTALS $ 26,352,111 $ 342,854 $ (1,848,556) $ 24,846,409 $ 2,809,033 4. Debt Service Reauirements It The annual requirements to amortize bonded debt, as of December 31, 2005, are as follows: III YEAR ENDING DECEMBER 31. PRINCIPAL INTEREST TOTAL lilII 2006 $ 1,790,000 $ 1,045,347 $ 2,835,347 2007 1,830,000 974,726 2,804,726 III 2008 1,875,000 898,090 2,773,090 2009 1,920,000 816,209 2,736,209 .. 2010 1,970,000 728,945 2,698,945 2011-2015 8,270,000 2,285,067 10,555,067 IIIIll 2016-2020 4,315,000 814,839 5,129,839 2021-2023 1,095,000 48,152 1,143,152 TOTALS $ 23,065,000 $ 7,611,374 $ 30,676,374 .. 38 .. iii III .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) DECEMBER 31. 2005 ... NOTE G - Operatine: 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, 2005 amounted to $47,816. At December 31, 2005, the approximate annual operating lease commitments, subject to appropriation of funds, were as follows: It .. YEAR ENDING DECEMBER 31. OPERATING LEASES .. 2006 2007 2008 2009 2010 $ 46,051 32,893 29,926 20,178 3,930 132,978 .. ill Total minimum lease payments 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 seventeen such capital projects with accumulated fund equity deficits totaling $8,612,904. In addition, there were five capital projects with accumulated fund equity deficits totaling $290,932, whose expenditures were funded by loans from other funds. ill .. NOTE I - Commitments and Contine:ent Liabilities .. 1. Lawsuits iIIII 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. One case has resulted in a decision against the Town for approximately $450,000. This case is under appeal, The Town has not recorded any liabilities related to this lawsuit. However, the Town has recorded an estimated liability amounting to $80,000 as Judgment and Claims, representing possible future settlements on tax certiorari cases. ill - - 39 .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) ... DECEMBER 31. 2005 ilia NOTE I - Commitments and Contine:ent Liabilities (Continued) 2. Grants ... The Town has received amounts from grantor agencies, principally the Department of Housing and Urban Development. Any allowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures, which may be disallowed by the grantor agency, cannot be determined at this time. IIIl 3. Tri-Municipal Sewer Plant Expansion .. III 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. lilt .. Funding for the project has been provided by two authorizations, for a total estimated project cost of $19,630,054. Through December 31, 2005, $17,189,840 in bonds have been issued through the Environmental Facility Corporation (EFC), and $2,060,414 in Bond Anticipation Notes had been issued. - Total project costs incurred through December 31, 2002, amounted to $18,590,291. The unspent construction funds are periodically being applied toward the Town's principal and interest payments. 4. Tri Municipal Sewer Plant Expansion - Phase ilIA 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 to be funded by the Town. The Town estimated construction and related project costs to be $10,400,000, which was increased to $10,900,000 in April 2001. The Town has incurred $10,399,170 in professional fees and project costs to date. The Town initially issued bond anticipation notes through the Environmental Facilities Corporation totaling $10,900,000 to fund project costs. On March 14,2002, long-term financing for the project was issued through the New York State Environmental Facilities Corporation in the amount of $9,836,556. Additionally, on March 3, 2003, the Town issued a bond in the amount of $905,000 to cover costs not eligible for bonding on the project through New York State Environmental Facilities Corporation. Included in Deposits with Other Governments, is $5,000, representing cash held by the Tri- Municipal Sewer Commission for project expenditures to be paid by that entity. .. IIIl III .. .. .. .. 40 .. .. III TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) DECEMBER 31. 2005 III NOTE I - Commitments and Contine:ent Liabilities (Continued) .. 5. Central Wappine: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 31,2005 the Town has issued $7,950,000 in bond anticipation notes to pay for the costs of aforesaid project. .. The Town is planning to apply for long-term financing for the project through the New York State Environmental Facilities Corporation. .. The costs incurred on the project amounted to $7,376,483, as of December 31, 2005. 6. Authorized Debt Ira As of December 31, 2005, the Town has authorized, but not issued, the following new debt: .. PURPOSE Autho rimtion Date Authorized Amount 550,000 Un-issued Amount $ 1,430,000 640,000 2,670,000 225,000 $ 4,965,000 III II Refunding Bonds Central Wappinger Water Road Improvement Computer Hardware and Software 02/01/99 02/12/01 05/27/03 $ 4,700,000 8,590,000 3,300,000 ill 03/12/03 lOTALS $ 17,140,000 ill III 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 $53,076. The Town has recorded the long term liability of $48,653 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 $14,426 in monitoring costs during 2005. The future costs may be higher due to inflation, changes in technology or subsequent changes in regulations. .. .. .. 41 .. ill .. ill TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) DECEMBER 31. 2005 ill NOTE J - Municipal Landfills (Continued) 2. Pou!!hkeepsie-Wappin!!ers-LaGran!!e Joint Landfill ill ill 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 ofWappingers 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, 2005, amounted to $2,374. III .. The following is a summary of unaudited financial information at December 31, 2005, which is included in the separate financial statements available from the Joint Landfill Board of Governors, Town of Poughkeepsie, One Overocker Road, Poughkeepsie, New York, 12603: .. Total Assets $ 9,260,124 Total Liabilities $ .. Total Venture Equity $ 9,260,124 Total Revenues $ 7,250,410 Total Expenditures $ 6,927,737 ill .. 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 final 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 fmal closure is $10,000,000. All costs will be borne proportionately by each municipality: the Town of Wappinger's share is 14.1728%. The Town paid $1,014,610 in October 2006 for its share offmal closure costs, $402,670 having been paid in prior years and funded with boand anticipation notes. Currently the Town has $830,368 in bond anticipation notes outstanding with cash of $455,380, representing unspent proceeds on hand. To partially finance this project the municipalities have applied for a grant through the NYS DEC's LCSAP program to the extent of $2,000,000 which will be refunded to the respective participants when received. .. ill .. ill .. Post closure and monitoring costs, which will commence in 2007 and continue for 30 years, are estimated to amount to $3,192,400, with the Town's share being $452,452. .. 42 .. III .. III TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) DECEMBER 31. 2005 III NOTE K - Subsequent Events The Town has issued the following new debt: II ISSUE MATURITY TYPE DATE DATE Rate PURPOSE AMOUNT III Bond Anticipation Note 08/09/06 08/09/07 3.72% Road Resurfacing $ 1,000,000 III Joint Landfill Closure 566,900 Renewal of previously .. issued Notes 4,066,918 $ 5,633,818 . Bond Anticipation Note 09/21/06 08/09/07 3.60% Sewer Improvement Area # 5 $ 250,000 III Construction of Roads 402,000 Construction Equipment 240,000 II $ 892,000 Note L - New Renortin2 Standard . In June 2004, the Governmental Accounting Standards Board (GASB) issued Statement 45 Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. This Statement establishes certain new financial reporting requirements for state and local governments throughout the United States. When implemented, it will require the reporting of liabilities pertaining to postemployment benefits earned by employees on a current basis. The Town is required to implement this standard for the year ending December 31,2008. IIiIII .. - The Town is in the process of implementing the provisions of GASB Statement 45. The implementation of GASB Statement 45 will have a substantive effect on the Town's government wide financial position. However, the Town does not believe that it will have a significant effect on its governmental (fund) financial position, upon which the Town's budgets are based and taxes are raised. III - - 43 .. .. .. 45 .. .. III .. SEWER FUND VARIANCE ORIGINAL FINAL FAVORABLE BUDGET BUDGET ACTUAL UNFAVORABLE) .. REVENUES Real property taxes $ 1,454,555 $ 1,454,555 $ 1,575,821 $ 121,266 Real property tax items II Non property tax items Departmental income 1,474,417 1,474,417 1,433,768 (40,649) Use of money and property 374,850 374,850 482,533 107,683 III Licenses and permits Fines and forfeitures Sale of property and compensation for loss Miscellaneous local sources 3 3 II State aid Total revenues 3,303,822 3,303,822 3,492,125 188,303 .. Appropriation of prior's year's fund balance 768,024 768,024 385,478 (382,546) Total revenues and appropriation of prior year's fund balance 4,071,846 4,071,846 3,877,603 (194,243) .. EXPENDITURES AND ENCUMBRANCES General Government Support 32,511 (32,511) II Public safety Health Transportation Economic assistance & opportunity .. Culture and recreation Home and community service 1,874,736 1,874,736 1,600,858 273,878 Employee benefits 1,395 1,395 1,300 95 . Debt service 2,202,965 2,202,965 2,242,934 (39,969) Total expenditures and encumbrances 4,079,096 4,079,096 3,877,603 201,493 .. Excess (deficiency) ofrevenues and appropriation of prior year's fund balance over (under) expenditures and encumbrances (7,250) (7,250) 7,250 .. Other financing sources (uses) Operating transfers in 7,250 7,250 (7,250) .. Operating transfers out Total other financing sources 7,250 7,250 (7,250) .. Excess (deficiency) ofrevenues and appropriation of prior year's fund balance and other sources over (under) expenditures, encumbrances $ $ $ $ - - 46 - .. .. ill III .. .. .. OTHER SUPPLEMENTAL INFORMATION .. .. .. .. .. .. .. .. .. .. .. .. .. III TOWN OF WAPPINGER, NEW YORK COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS DECEMBER 31,2005 .. .. MISC WATER LIGHT GRANT FUND FUND FUND .. ASSETS .. Cash and cash equivalents $ 176,149 $ 1,510 $ 122,394 Receivables: Charges for services 194,105 lit Other Due from other funds 2,500 Inventory, at cost .. Prepaid expenses 1,365 Total assets $ 374,119 $ 1,510 $ 122,394 .. II EXHIBIT II .. II III $ $ 102,183 62 12,000 III ill 114,245 II 1,365 III 133,745 . 1,296 249,964 1,296 385,074 ... $ 1,296 $ 499,319 .. 48 ... .. TOWN OF WAPPINGER, NEW YORK COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31,2005 .. iIII iIII REVENUES .. Propeliy taxes Property tax items Departmental income Use of money and property Sale of property and compensation for loss Miscellaneous local sources State aid iIII II . Total revenues EXPENDITURES ill ill General government support Health Transportation Home and community services. Employee benefits Debt service ill ill Total expenditures Excess (deficiency) of revenues over expenditures II1II . Other financing sources: Operating transfers in Total other financing sources .. Excess (deficiency) of revenue and other sources over expenditures and other uses .. Fund Balance, December 31, 2004 - Fund Balance, December 31, 2005 WATER FUND LIGHT FUND $ 495,984 $ 24,250 634,238 12,620 2,650 309 1,145,492 24,559 93 32,500 711,420 4,218 727,729 1,443,460 32,500 (297,968) (7,941) 225,850 225,850 (72,118) (7,941) 334,693 6,824 $ 262,575 $ (1 , 11 7) .. See independent auditor's report - MISC GRANT FUND $ 487,962 70 7,046 96,250 591,328 119 409,382 1,049 410,550 180,778 180,778 (58,458) $ 122,320 49 .. ... II II SPECIAL GRANT FUND ... $ II .. .. EXHIBIT III TOTAL NON-MAJOR GOVERMENTAL FUNDS 8 $ 1,008,196 70 634,238 19,983 2,650 96,250 8 1,761,387