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2009 .. .. .. .. .. .. TOWN OF WAPPINGER, NEW YORK .. FINANCIAL STATEMENTS .. AS OF AND FOR THE YEAR ENDED DECEMBER 31.2009 .. .. .. .. .. .. .. .. .. .. .. ~~(f;;~~YJ~'SdJ j~~ \)6 lG\\ \j\J ~??lNGER iO\f.J;O~N CL\';RIZ .. [R1 rc 0~:. i"S'~, \\ i7 P [Q) JE'-il I \v/'? --=:=J \,.,-::/ ,_=':1 l \.1 I~ .. .. JAN 06 2011 TOWN OF WAPPINGER TOWN CLERK .. .. TOWN OF WAPPINGER, NEW YORK TABLE OF CONTENTS DECEMBER 31. 2009 .. .. 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 31,2009 ............................................................................... 5-13 - BASIC FINANCIAL STATEMENTS: Government-Wide Financial Statements: .. Statement of Net Assets - December 31, 2009......................................................... ...... ...........................................................14 .. Statement of Activities - For the Year Ended December 31, 2009 ............................................................................................................... 15-16 .. Fund Financial Statements: .. Balance Sheet - Governmental Funds - December 31, 2009.................................................. 17-18 Reconciliation of Governmental Funds Balance Sheet .. To The Statement ofN et Assets - December 31, 2009..............................................................19 Statement of Revenues, Expenditures and Changes .. In Fund Balances- Governmental Funds - For the Year Ended December 31, 2009.............. ........... .................................... ....... ........... 20-21 .. - .. .. .. .. .. 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 31,2009............................................22 .. Statement of Fiduciary Net Assets - Fiduciary Fund - December 31, 2009.................................23 Notes to the Basic Financial Statements............... ...................... ........ ................ ..24-46 ... REQUIRED SUPPLEMENTAL INFORMATION: .. Exhibit I Budgetary Comparison Schedule - General Fund, Highway Fund, Water Fund and Sewer Fund For the Year Ended December 31, 2009........ .................. .......... .................... ...................... 47-50 .. .. Exhibit II Other Post-Employment Benefit Plan Schedule of Funding Progress -December 31, 2009 ............................................................... ..51 .. OTHER SUPPLEMENTAL INFORMATION: .. Exhibit III Combining Balance Sheet - Non-Major Governmental Funds - December 31, 2009 ............................................................................ 52 .. Exhibit IV Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Non-Major Governmental Funds For the Year Ended December 31, 2009....................................................................... 53 .. .. .. .. .. .. .. ~~ SEDORE .. HUDSON VALLEY CPAs Navigating Your Success Partners James L. Sedore, Jr, CPA Mark 5 O'Sullivan, CPA James F Letterio,Jr, CPA Linda M Hannigan, CPA Karen T Hansen, CPA Jeffrey L. Brown, CPA Charles R. Rae. Jr, CPA .. INDEPENDENT AUDITORS' REPORT lilt lilt 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, 2009, 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. - - lilt 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. .. lilt 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 31,2009, 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. .. .. 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, New York, as of December 31, 2009, 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. .. .. 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 1 .. III III In accordance with Government Auditing Standards, we have also issued our report dated September 2,2010 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 grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. .. ... ... .. Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, budgetary comparison information, Exhibit I, and Other Post-Employment Benefits Schedule of Funding Progress, Exhibit II, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. .. ... .. .. .. 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 ofthe basic financial statements. The combining non-major fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements taken as a whole. ... .. ... .. .. .-dz..~ v: ~~, C/.# J Poughkeepsie, New York September 2, 2010 .. .. .. 2 . ~~ SEDORE . HUDSON VALLEY ePAs Navigating Your Success Partners James L. Sedore, Jr, CPA Mark S O'Sullivan, CPA James F Lelteria, Jr, CPA Linda M. Hannigan, CPA Karen T Hansen, CPA Jeffrey L. Brown, CPA Charles R. Rae, Jr, CPA .. .. 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 III ... 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, 2009, which collectively comprise the Town of Wappinger, New York's basic financial statements and have issued our report thereon dated September 2, 2010. 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 III MIl Internal Control Over Financial Reportin2 ... 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 [mancial 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. .. .. A deficiency in internal control 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 and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented or detected and corrected on a timely basis. .. .. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. However, we identified .. .. Poughkeepsie Office 2678 South Road I Suite 101 I Poughkeepsie, New York 12601 Tel: (845) 485-5510 Fax: (845) 485-5547 I Email: inlo@sedoreco.com I Web: www.sedoreco.com POUGHKEEPSIE · PORT JERVIS · FISHKILL 3 .. .. .. certain deficiencies in internal control over financial reporting, described in a separate letter dated September 2,2010, Findings 1,2 and 3 that we consider to be significant deficiencies in internal control over financial reporting. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with goverence. .. 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 September 2,2010 ... 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. ... ~v~,e,d/9s Poughkeepsie, New ~;rk r- - r1 September 2, 2010 III ... III IIlIIl III .. ... 4 .. .. .. TOWN OF WAPPINGER, NEW YORK MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2009 (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 2009 2008 Change .. Non-Capital $ 6,024,737 $ 7,276,812 $ (1,252,075) Capital 28,894,037 27,858,995 1,035,042 III Total Assets $ 34.918.774 $ 35.135.807 $ (217.033) Liabilities Current $ 4,387,657 $ 7,282,579 $ (2,894,922) .. Non-Current 29,132,428 27,823,254 1,309,174 Total Liabilities 33,520,085 35,105,833 (1,585,748) .. Net Assets: Capital 10,418,769 10,374,937 43,832 .. Restricted 609,508 778,835 (169,327) Unrestricted (9,629,588) (11,123,798) 1,494,210 Total Net Assets 1,398,689 29,974 1,368,715 .. Total Liabilities and Net Assets $ 34,918.774 $ 35.135.807 $ (217.033) .. 5 .. .. TOWN OF WAPPINGER, NEW YORK MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2009, Cont'd. (Un-audited) .. .. Revenues 2009 .. Program Fines, Fees & Charges Operating Grants Capital Grants General Revenues Property Taxes Other Taxes Investment Earnings State Aid Other Revenues Total Revenues 6,364,834 2,351,636 539,135 347,366 308,576 13,283,626 ill $ 3,151,618 $ 38,876 181,585 .. .. .. ill Expenses General Government Support Public Safety Health Transportation Economic Assistance Culture and Recreation Home and Community Service Other 2,620,457 724,121 403,089 2,711,126 25,222 941,494 3,087,877 1,401,525 11,914,911 $ 1.368.715 $ .. .. .. .. Total Expenses Change in Net Assets Governmental Funds: iIIIIII GENERAL FUND 2008 3,077,145 80,494 404,498 6,077 ,861 2,405,493 737,672 336,707 874,695 13,994,565 2,541,193 721,547 402,407 2,863,411 30,287 954,632 3,499,100 1,440,883 12,453,460 1,541,105 $ Change 74,473 (41,618) (222,913) 286,973 (53,857) (198,537) 10,659 (566,119) (710,939) 79,264 2,574 682 (152,285) (5,065) (13,138) (411,223) (39,358) (538,549) 072.390) The majority of activity for the Town is presented in the General Fund. Fund Balance for the General Fund decreased by $183,099 from 2008 to 2009. The major reason for the decrease in the fund balance was an increase in unfunded expenses relating to general operations, culture and recreation, home and community service and a reduction in revenue from licenses and permits and departmental income. iIIIIII .. - Total General Fund Equity for 2009 is approximately $762,120, all of which is designated or restricted for particular purposes. .. - 6 .. .. .. TOWN OF WAPPINGER, NEW YORK MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2009, Cont'd. (Un-audited) .. III The Following Charts describe significant categories of General Fund revenues and expenses: III General Fund Revenues 2009 III III . Property Taxes & Tax Items . State & Federal Aid o Sales and Franchise Tax .. o Interest & Earnings . Departmental Income .. II Fines, Licenses and Permits . All Other .. III General Fund Expenses 2009 .. . General government support ill 1% . Public safety ill o Transportation o Culture and Recreation ... . Home and community servIces . Employee benefits .. . Debt Service .. 3% IlijJAll Other 7 ... .. III .. TOWN OF WAPPINGER, NEW YORK MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2009, Cont'd. (Un-audited) ill .. HIGHWAY FUND .. The Highway Fund ended the year with $283,249 in Fund Balance, of which $211,853 is reserved. .. The following charts describe the significant categories of Highway Fund revenues and expenses: Highway Fund Revenues 2009 .. 1% .. . Property Taxes .. . Sales Tax o Transfers from Other Funds o State & Federal Aid .. . Other Revenue .. .. Highway Fund Expenses 2009 -Street Maintenance .. . Permanent Road Improvements III DSnow Removal o Other .. 8 Machinery Purchase and Maintenance .. . Employee Benefrts 8 Debt Service .. 8 .. .. ilia TOWN OF WAPPINGER, NEW YORK MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2009, Cont'd. (Un-audited) .. .. WATER FUND .. The Town operated four water districts during 2009 with an overall Fund Balance of $1,304,443, of which $684,131 was reserved for debt. Operating revenues totaled $1,654,365 with the expenses totaling $1,727,567 resulting in a deficiency of revenues over expenditures in the amount of $73,202. The deficiency is within what the Town had planned of $155,223 as the appropriated Fund Balance in the 2009 Budget. Included in revenue are compensations totaling $97,932 from petroleum distributors resulting from a successful MTBE settlement in 2008. IiIIL II1II .. SEWER FUND IIiIII. The Town operated nine Sewer Districts during 2009 with an overall Fund Balance $548,072. Operating revenues totaled $3,299,955 with the expenses totaling $3,907,868 resulting in a deficiency of revenues over expenditures in the amount of $607,913. The deficiency is within what the Town had planned of $649,327 as the appropriated Fund Balance in the 2009 Budget. In the 2010 budget, the rate structure for all Wappinger sewer districts were substantially revised to reflect expected operation and maintenance costs, the elimination of appropriated fund balance as a source of financing and including a ten (10) year projected elimination of deficit fund balances. The Supervisor also initiated a consolidated sewer district, similar to the water districts, to level sewer costs with expected completion in 2011. .. .. 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 .. ... .. .. 9 III .. .. TOWN OF WAPPINGER, NEW YORK MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2009, Cont'd. (Un-audited) .. .. 3. Activities regarding capital assets, long and short term debt .. The Town spent approximately one million dollars on nine capital projects in 2009. The top six projects were: Highway Blacktop Maintenance, Reconstruction of curbs and repaving of roads in the Rockingham I and Rockingham II Subdivisions, Town Highway Garage Complex Reconstruction, Repairs to the Martz Field Tennis Courts, Demolition of existing Boiler and Installation of Two New Boilers, and Central Wappinger Water Improvement Area projects. The expenditures for these projects accounted for ninety-two percent (92 %) of the total capital expenditures. .. III III 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. .. III The Central Wappinger Water Improvement Area 1999 -2R project has connected six of the Town's water districts to a common source of water. The project is ongoing and is expected to be completed soon. 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. ... III The other projects related to town-wide road blacktopping and drainage, fuel tank removal and replacement, 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 ... In 2009 Moody's adjusted the Town rating to an Al due to decreased fund balances from 2003 - 2008. In 2010, Moody's adjusted the Town rating to Aa2, which will allow for more competitive bidding and lower interest rates on future borrowing. .. Total long term serial bond debt at the end of 2009 was $29,927,000. 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 $8,746,467 and $12,233,461, respectively. Water and sewer debt is paid by the property owners in the respective districts. $150,000 of outstanding bond anticipation notes is also considered long term, as it was re-financed. .. III 10 III .. .. TOWN OF WAPPINGER, NEW YORK MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2009, Cont'd. (Un-audited) .. Short Term Debt ... .. The Town currently has three Bond Anticipation Notes (BANs) outstanding, $708,000, all maturing April 3, 2010 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. ... The Town, currently involved in a shared service agreement with the Town of Fishkill for a joint Assessor, is participating in a grant application to expand the partnership to include the Towns of LaGrange and Beekman, with a projected 34% savings potential to Wappinger based upon the feasibility study documents. ... .. The Town is current with all tax certiorari cases to those filed in 2009, thereby eliminating unexpected retroactive exposures. .. 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 adopted a reduced tax levy of 1.37% for 2010 from the 2009 levy, and overall, expenses are tracking well with the proposed budget through June 2010 ... .. .. The Town implemented an in-house payroll system in January 2010 with the same software company as the accounting program. The Town has experienced (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. Water and sewer are being extended on Route 9 to encourage economic development/improvement. ... ... ... The Town secured a three year CSEA contract with highway employees in late 2009. The Town Hall employees have proposed a collective bargaining unit with the Teamsters. ... 11 ... .. .. TOWN OF WAPPINGER, NEW YORK MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2009, Cont'd. (Un-audited) IiIII .. 4. Currently Known Facts Bearing on the Future, (Continued) .. The Town Hall and Highway buildings have updated their failing HV AC systems to more efficient units with noted decreases in energy consumption. .. The Town Board continues a twice monthly review of all vouchers/invoices prior to payment. An added benefit of this process allows the taxpayer to review the expenses via the internet. This process was enhanced in 2010 by the Town Board with real time information in respect to the effect of the vouchers/payments upon the budget line(s) and fund balances. .. .. Infrastructure assets reporting has not commenced to this date, due to other internal priorities, but it is recognized that such is important and required, with initiation to start by the end of2010. .. Starting in 2009 and updated in 2010, greater control of the capital projects has occurred through an up-to-date tracking of capital account transactions and fund balances. This has allowed the Town to consider infrastructure improvements utilizing capital fund balances, where appropriate rather than extending indebtedness. ... ... Dutchess County has discontinued the sales tax exemption on clothing. The Legislature report projects an additional $50,000 in revenues to the Town. .. 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 have implemented a credit card process with in first quarter 2010, allowing for the payment of permits, licenses and taxes. .. IiIII The Highway Department is proposing a replacement of some equipment (large trucks) in 2010 to phase out units reaching levels of obsolescence and ongoing repairs of significance. .. Dutchess County is proposing a charge back to municipalities for election expenses to a potential exposure of $100,000 to the Town. Currently, an audit committee consisting of county legislators and local officials is reviewing the proposal. .. .. The position of Recreation Director and Senior Center Director in the Town was consolidated with the advent of the resignation of the senior director. This allows an efficiency of oversight and decreases payroll exposures. .. 12 .. .. .. TOWN OF WAPPINGER, NEW YORK MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2009, Cont'd. (Un-audited) .. .. 4. Currently Known Facts Bearing on the Future, (Continued) .. The Town has hired an external professional consultant to inspect and monitor underground storage tanks to ensure compliance with DEC standards and avoid fines, which could eliminate an exposure in excess of $100,000 if non-compliance was determined at a Town facility during a site inspection. .. .. 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 buildings 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. The Town Board hired a Civil Service qualified Supervisor of Buildings and Grounds to address maintenance and safety concerns on a more expeditious cycle than experienced in 2009. ... .. .. .. .. .. .. .. .. .. ... 13 .. III III TOWN OF WAPPINGER, NEW YORK STATEMENT OF NET ASSETS DECEMBER 31. 2009 .. ASSETS III Current assets: Cash and cash equivalents Receivables (net) Inventories Deposits with other governments Prepaid expenses III Total current assets .. Capital assets: Land Infrastructure, net of depreciation Buildings, machinery and equipment, net of depreciation Construction in progress Total capital assets .. Total assets .. LIABILITIES III Current Liabilities: Accounts Payable Accrued liabilities and retainage payable Notes payable Deferred revenue Due to other governments Current portion oflong-term liabilities Landfill remediation liability Bonds payable - Capital Bonds payable - Non-capital Total current liabilities .. .. .. Non-current liabilities: Deferred revenues Judgment and claims Compensated absence liabilities Other postemployment benefits liability Landfill remediation liability Notes payable - Non-capital Bonds payable - Capital Bonds payable - Non-capital Total non-current liabilities .. III .. Total liabilities III NET ASSETS Invested in Capital Assets, net of related debt Restricted for: Recreation Unrestricted .. Total net assets Total liabilities and net assets .. The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. .. GOVERNMENTAL ACTIVITIES $ 4,091,694 1,749,512 47,661 5,000 130,870 6,024,737 7,782,217 5,630,202 4,541,360 10,940,258 28,894,037 $ 34,918,774 $ 648,288 524,774 633,000 29,640 62,3 12 12,643 983,857 1,493,143 4,387,657 40,946 80,000 198,805 836,769 300,908 225,000 17,001,411 10,448,589 29,132,428 33,520,085 10,493,769 609,508 (9,704,588) 1,398,689 $ 34,918,774 14 .. TOWN OF WAPPINGER, NEW YORK STATEMENT OF ACTMTIES FOR THE YEAR ENDED DECEMBER 31. 2009 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 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 $ 2,620,457 724,121 403,089 2,711,126 25,222 941,494 3,087,877 1,401,525 Total governmental activities 11,914,911 Change in net assets Net assets - beginning Prior period adjustment .. .. CHARGES FOR SERVICES OPERATING GRANTS AND CONTRIBUTIONS .. $ 16,550 $ 430,631 4,670 2,889 85,168 2,611,710 3,151,618 38,876 .. .. .. 38,876 .. .. .. - - - Net assets - beginning, restated - Net assets - ending .. - .. - The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. .. 15 .. .. NET (EXPENSE) REVENUE AND CHANGES IN .. NET ASSETS CAPITAL GRANTS AND GOVERNMENTAL .. CONTRIBUTIONS ACTIVITIES $ 6,322 $ (2,558,709) .. (293,490) (398,419) 155,231 (2,553,006) .. (25,222) 20,032 (836,294) (476,167) .. (1,401,525) 181,585 (8,542,832) .. 6,364,834 .. 89,418 1,163,607 747,673 .. 350,938 539,135 347,366 ... 113,982 194,594 9,911,547 .. 1,368,715 .. 430,261 (400,287) .. 29,974 $ 1,398,689 .. .. .. .. .. 16 .... The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. 17 - .. .. .. CAPITAL NON- TOTAL PROJECTS MAJOR GOVERNMENTAL FUND FUNDS FUNDS III $ 2,350,670 $ 82,659 $ 4,091,694 .. 881,113 229 159,835 5,000 5,000 Ilia 77,633 4,836 932,606 412,532 296,032 Ilia 47,661 130,870 $ 2,433,532 $ 87,495 $ 6,957,343 .. .. $ 161,482 $ 4,016 $ 648,288 .. 61,949 69,048 28,000 605,000 605,000 III 3,000 932,606 62,312 1,016 29,640 .. 829,447 7,016 2,374,894 .. 178,531 .. 164,050 402,900 .. 609,508 3,000 1,604,085 80,479 3,224,460 III 1,604,085 80,479 4,582,449 .. $ 2,433,532 $ 87,495 $ 6,957,343 ... ... 18 .. iI. TOWN OF WAPPINGER, NEW YORK RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS DECEMBER 31. 2009 .. .. Total fund equity for governmental funds $ 4,582,449 .. 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. 28,894,037 .. 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. (31,581,125) .. Grants received for capital assets are deferred and amortized over the life of the asset. (40,946) .... Accrued interest is not reported in the funds. (455,726) Total net assets of governmental activities $ 1,398,689 .. .. .. .. .. Ii.. ... .. The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. 19 .. IIIIIIiI TOWN OF WAPPINGER, NEW YORK STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS III FOR THE YEAR ENDED DECEMBER 31,2009 .. GENERAL HIGHWAY WATER SEWER FUND FUND FUND FUND REVENUES .. Real property taxes $ 1,950,315 $ 1,961,447 $ 644,695 $ 1,384,997 Real property taxes items 89,334 Non property taxes items 1,223,674 290,871 .. Departmental income 206,044 898,078 1,638,927 Intergovernmental charges 2,839 Use of money and property 225,975 3,241 10,340 276,031 - Licenses and permits 156,860 50 Fines and forfeitures 248,821 Sale of property and compensation for loss 3,812 9,620 100,550 Miscellaneous local sources 69,800 14,886 702 - State aid 1,122,772 152,081 Federal aid Total revenues 5,297,407 2,435,035 1,654,365 3,299,955 .. EXPENDITURES General government support 1,945,378 66,735 769 22,933 - Public safety 517,631 Health 4,861 Transportation 173,165 1,715,509 .. Economic assistance & opportunity 24,250 Culture and recreation 839,974 Home and community services 490,398 984,412 1,753,690 .. Employee benefits 660,563 445,547 4,137 2,569 Debt service 918,071 220,415 738,249 2,128,676 Total expenditures 5,574,291 2,448,206 1,727,567 3,907,868 .. Excess of revenues over expenditures (276,884) (13,171) (73,202) (607,913) Other financing sources: .. Proceeds of debt BANs redeemed from appropriations 75,000 Operating transfers in 126,192 146,110 684,135 28,901 .. Operating transfers out (107,407) (14,677) (118,748) (18,035) Total other financing sources 93,785 131,433 565,387 10,866 - Excess (deficiency) of revenue and other sources over expenditures and other uses (183,099) 118,262 492,185 (597,047) - Fund Balance, December 31, 2008 945,219 164,987 812,258 1,145,119 Fund Balance, December 31,2009 $ 762,120 $ 283,249 $ 1,304,443 $ 548,072 - 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 .. $ $ 423,380 $ 6,364,834 84 89,418 .. 1,514,545 17,000 2,760,049 2,839 .. 22,194 1,355 539,136 156,910 248,821 113,982 ... 129,653 50 215,091 1,274,853 ... 151,847 441,869 13,280,478 .. 282,352 478 2,318,644 517,631 395,000 399,861 .. 672,053 41,829 2,602,556 972 25,222 839,974 - 63,963 12,561 3,305,024 243 1,113,059 4,005,411 .. 1,019,340 450,111 15,127,382 (867,493) (8,242) (1,846,904) .. 3,362,000 3,362,000 258,000 333,000 .. 935,832 1,921,170 (1,662,303) (1,921,170) 2,893,529 3,695,000 - 2,026,036 (8,242) 1,848,096 - (421,951) 88,721 2,734,353 $ 1,604,085 $ 80,479 $ 4,582,449 - - 21 - II .. 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 31.2009 .. .. Net change in fund balance - total government funds $ 1,848,096 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. 1,035,042 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. 3,150 .. 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 ~e governmental funds but reduces the liability in the statement of net assets. filii Debt issued: Bonds payable issued (3,362,000) Bond anticipation note redeemed (333,000) .. Repayments: Bond anticipation note principal 333,000 Bond principal 2,260,000 .. (1,102,000) 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 2009. 10,887 .. Some expenses reported in the statement of activities, such as compensated absences, landfill liabilities and postemployment benefits .. 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 2009. (426,460) - Net change in net assets of governmental activities $ 1,368,715 - The accompanying Notes to the Financial Statements - should be read in conjunction with these Financial Statements. 22 .. TOWN OF WAPPINGER, NEW YORK STATEMENT OF FIDUCIARY NET ASSETS III FIDUCIARY FUND DECEMBER 31. 2009 IIiIlt AGENCY IIiIlt FUNDS ASSETS IIiIlt Cash and cash equivalents $ 611,999 Total assets 611,999 .. LIABILITIES .. Escrow funds returnable and other liabilities 611,999 . Total liabilities 611,999 .. NET ASSETS Total liabilities and net assets $ 611,999 .. IIiIlt .. .. .. .. .. .. - The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements 23 - ill ill TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31. 2009 iiIIIII NOTE A - Summary of Sie:nificant Accountine: 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. ill ... The Town provides the following services: highway maintenance, water, sewer, planning, zoning, building and safety inspection, lighting, and culture and recreation. ill 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 [mancial statements are discussed below. III ill ill 1. The Reportine: Entity 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 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 ill 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. .. .. .. .. ... .. 24 .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 III NOTE A - Summary of Sh~nificant Accountine: Policies (Cont'd) .. 2. Basic Financial Statements - Government-Wide Statements (Cont'd) III In the govermnent-wide Statement of Net Assets, the govermnental 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. III .. The govermnent-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 govermnent revenues (property and sales taxes, certain intergovermnental 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, intergovermnental revenues, interest income, etc). .. This govermnent-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 III III 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 govermnental and proprietary categories. A fund is considered major if it is the primary operating fund of the Town or meets the following criteria: .. III a. Total assets, liabilities, revenues, or expenditures/expenses of that individual govermnental fund are at least 10 percent of the corresponding total for all funds of that category or type; and .. .. .. 25 .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2009 NOTE A - Summarv of Si2nificant Accountin2 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. .. A. .. .. - .. .. 3. - 4. .. 5. .. .. .. .. .. - The following fund types are used by the Town: 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 ofthe 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. 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 Special Grant, Lighting and Miscellaneous (Ambulance) Funds. 26 .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 .. .. NOTE A - Summarv of Sie:nificant Accountine: Policies (Cont'd) 3. Basic Financial Statements - Fund Financial Statements (Cont'd) .. B. Fiduciary Funds .. 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 Accountine: .. 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 .. 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. .. 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. .. .. Mill .. .. .. 27 .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 .. NOTE A - Summarv of Sienificant Accountine Policies (Cont'd) .. 5. Financial Statement Amounts A. Cash and Investments .. .. 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 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. .. iiIIiI .. .. The cash and investments of the Town at December 31, 2009, are as follows: - CAPITAL NON- GENERAL IllGHW AY WATER SEWER PROJECTS MAJOR FUND FUND FUND FUND FUND FUNDS TOTAL Non-Interest Bearing Accounts $ 800 $ - $ - $ - $ - $ - $ 800 Interest Bearing Accounts 991.481 127.297 520,849 17,938 2,350.670 82,659 4,090,894 TOTALS $ 992,281 $ 127,297 $ 520,849 $ 17,938 $ 2,350,670 $ 82,659 $ 4,091,694 .. - .. - 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. .. .. ... - 28 .. .... ... TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 .. NOTE A - Summary of Sie:nificant Accountine: Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) .. B. Inventories .. Inventories consist of significant expendable supplies primarily sand and road salt and are carried at cost. .. C. Capital Assets ilia 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 ... III 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. The Town currently does not have a timetable in place for implementing the retroactive infrastructure prOVISIOns. .. .. ... .. .. ... .. 29 .. - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 - NOTE A - Summary of Sil::mificant Accountin2: 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: - - 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. .. .. 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, 2009, in the amount of $198,805. 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 Activity ... 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. ... ... ... ... ... 30 ... ... ... TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 ... ... NOTE A - Summary of Si2nificant Accountin2 Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) F. Bud2ets ... 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 the Public Employees' Group Life Insurance Plan (Systems). ERS is a cost-sharing multiple-employer retirement system. 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. ... ... .. 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 .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 .. - NOTE A - Summarv of Silmificant Accountine: Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) 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 2009 $ 191,926 .. 2008 $ 216,806 2007 $ 206,422 .. - 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. Other Post-EmDlovment 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, 2009 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 No. 45 for employers in plans with fewer that 100 total plan members. - .. - .. 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: .. .. .. .. .. ... 32 .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2009 NOTE A - Summary of Shmificant AccountiDi! 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% .. .. .. Fundin2 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 Postemployment Benefit Cost .. The Town's OPEB cost (expense) amounted to $436,481 for the year ended December 31, 2009. 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 proj ected to cover normal costs plus a past service cost each year and amortize any unfunded actuarial liabilities over a period of 30 years. ... .. .. Actuarial Accrued Liability (AAL) Retirees & Dependents Acitves Fully Eligible Acitvies Not Fully Eligible Total Actuarial Accrued Liability $ .. $ .. .. Past Service Costs Normal Costs Annual Required Contribution (ARC) $ 150,618 338,843 489,461 $ .. 33 - .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 .. NOTE A - Summarv of Sie:nificant Accountine: Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) J. Other Post-Employment Benefits .. .. Net OPEB Obligation- begirmingofthe year AnnualOPEB cost Actual Employer Contnbutions* Net OPEB Obigation- end of the year $ 400,288 485,583 (49,102) 836,769 - $ .. Percent ofamual OPEB cost contnbuted 0.00% .. *This contribution is the pay-as-you-go aroount, as an actual plan has not been established, see Funding Policy. Net Other Postemplovment Benefit Oblie:ation .. 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. .. .. III 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 31, 2009 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: .. .. - - - 34 III TOWN OF WAPPINGER, NEW YORK .. NOTES TO THE FINANCIAL STATEMENTS (CONTI D) DECEMBER 31. 2009 .. NOTE A - Summary of Sh~nificant Accountinl! Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) .. K. Other Post-Emnlovment Benefits .. Fiscal Prescription Year Medical ~ Dental Vision .. 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% .. Prescription Medical !?!!!g Dental Vision - - Healthcare cost trend rate assumed fur next fiscal year 9.00% 9.00% 4.00% 3.00% Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 5.50% 5.50% 25.00% 0.00% Fiscal year that the rate reaches the ultimate trend rate 2018 2018 2018 2018 .. .. .. .. L. Pronerty 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 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. .. .. .. 35 .. TOWN OF WAPPINGER, NEW YORK .. NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 NOTE A - Summary of Si~nificant Accountin~ Policies (Cont'd) .. .. 5. Financial Statement Amounts (Cont'd) M. Lon~- 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 12/31/09 General Fund Reserved for Prep aids and Inventory $ 66,677 Reserved for Debt Service 164,050 Reserved for Miscellaneous: Inspection Fees 402.900 Total General Fund 633.627 Highway Fund Reserved for Prepaids and Inventory 110,372 110J72 Water Fund Reserved for Prepaids and Inventory 1,340 1340 Sewer Fund Reserved for Prepaids and Inventory 142 TOTAL FUND BALANCERESERVIS $ 745,481 .. .. .. .. .. .. .. ... The Town also has $609,508 of unreserved but restricted funds for recreation, which includes funds commonly referred to as Parkland Trust deposits, as well as funds set- aside for the Camwarth property. These amounts are accounted for in the Trust and Agency fund and transferred to the General Fund when released from restriction. For GASB No. 34 [mancial presentation purposes these amounts are completely reclassed to the General Fund and restricted. ... ... 36 1M .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 - .. NOTE A - Summary of Shmificant 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. - .. .. .. 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, 2009, consist of the following: .. CAPITAL GENERAL ffiGHW AY WATER SEWER PROJECTS FUND FUND FUND FUND FUND TOTAL Accounts Receivable $ 151,356 $ 8,250 $ - $ - $ 229 $ 159,835 Rents Receivable 306,987 574,126 881,113 TOTAIB $ 151,356 $ 8,250 $ 306,987 $ 574,126 $ 229 $ 1,040,948 .. 1M .. .. - - .. 37 .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 III .. 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, 2009. 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. .. .. AMOUNT AMOUNT FUND RECElV ABLE PAYABLE General $ 123,245 $ 929,606 Highway 79,154 Water 485,704 Sewer 162,034 Capital Projects 77,633 Non-Major 4,836 3,000 TOTALS $ 932,606 $ 932,606 .. III .. III TRANSFmS TRANSFmS FUND IN our General $ 126,192 $ 107,407 Highway 146,110 14,677 Water 684,135 118,748 Sewer 28,901 18,035 Capital Projects 935,832 1,662,303 TOTALS $ 1,921,170 $ 1,921,170 NOTE D - Capital Assets .. .. ... .. The following is a summary of changes and adjustments in the Capital Assets, for the year ended December 31, 2009: .. ... BALANCE BALANCE JANUARY 1, DECEMBFR31, 2009 ADDffiONS (DISPOSALS) 2009 $ 7,782,217 $ $ $ 7,782,217 5,589,358 112,175 5,701,533 726,446 726,446 Land .. Buildings Improvements Other Than Buildings .. III 38 .. * Depreciation was charged to governmental activities as follows: General government support 91,447 Public safety 49,143 Transportation 515,377 Culture and recreation 57,184 Home and connnunity services 62,481 Total depreciation expense $ 775,632 .. .. 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 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. .. .. .. 39 .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2009 .. NOTE E - Bond Anticipation Notes Payable (Cont'd) .. The Town's intent is to pay the lawsuit settlement through the use of bond anticipation notes, which were refinanced in 2009. The refinanced portion is considered long-term. The Bond Anticipation Notes outstanding as of December 31, 2009, are as follows: .. AMOUNT OUfSTANDING .. ORIGINAL ORIGINAL AT ISSUE MATURITY INTERl!S T AMOUNT DECEMBER 31, PURPOSE DATE DATE RATE OF ISSUE 2009 .. Revaluation 06/02/05 04/03/09 2.75% 575,000 115,000 .. Town Hall Boilers 12/09/09 04/02/10 2.20% 90,000 90,000 Highway Garage Complex 11/17/09 04/02/10 1.25% 400,000 400,000 Short-Term Bond Anticipation Notes Subtotal 1,065,000 605,000 .. .. Long-Term Bond Anticipation Notes Lawsuit Settlement 12/02/07 04/02/10 2.75% 225,000 Total- Bond Anticipation Notes $ 1,290,000 $ Grinnell LIbrary Budget Note 10/27/09 04/01/10 2.38% 28,000 Total - Budget Notes $ 28.000 $ 225,000 830,000 .. .. 28,000 28,000 - Total - Bond Antici pation Notes and Budget Notes $ 1,318,000 $ 858,000 .. Changes in Bond Anticipation Notes Payable and Budget Notes Payable as of December 31, 2009, are as follows: IIiII BALANCE BALANCE JANUARY 1, NEW RE-FlNANCFJ DECEMBER 31, .. PURPOSE 2009 ISS~ P AYMFNTS 2009 Various Purposes $ 2,926,000 $ 118,000 $ (2,586,000) $ 458,000 - Highway 1,109,000 400,000 (1,109,000) 400,000 TOTALS $ 4,035,000 $ 518,000 $ (3,695,000) $ 858,000 - .. 40 .. TOWN OF WAPPINGER, NEW YORK _ NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 _ NOTE F - Bude:et Note During 2009, the Town issued a budget note for the $28,000 increase in the tax levy due to .. Grinnell Library. A provision was not made for this amount in the 2009 Town budget. The note was issued on 10/27/2009 with a 2.38% interest rate and matures on 4/1/2010. The principal amount of the original issue is $28,000, which is the amount outstanding at December 31, 2009. .. NOTE G - Lone:- 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 31,2009, are as follows: AMOUNT .. OUfSTANDING ORIGINAL FINAL ORIGINAL AT ISSUE MATIJRITY INTElUST AMOUNT DECEMBER 31, .. PURPOSE DATE DATE RATE OF ISSUE 2009 Sewer - Tri-Municipal 11/12/92 09/15/12 5.80%-6.65% $ 6,060,000 $ 1,120,000 ... Sewer - Tri-Municipal 03/14/02 04/15/21 1.21 %-4.98% 9,836,556 6,305,000 Sewer - Tri-Municipal 11/26/02 05/15/15 3.18%-5.99% 8,519,786 2,845,000 .. Sewer - Tri-Municipal 06/01/95 11/15/15 3.70%-5.55% 2,610,054 945,000 Water - Fleetwood 07/30/98 10/15/18 3.70%-5.15% 510,000 270,000 Greystone Property III Purchase 10/01/00 10/01/20 4.75%-6.50% 2,085,000 1,410,000 Emergency Services Building 06/01/95 11/15/15 3.70%-5.55% 1,275,000 565,000 .. Water 452,732 81,713 Sewer 288,876 58,140 III Drainage 1,253,392 240,147 10/02/01 08/15/11 3.77% 1,995,000 380,000 Water 564,000 452,900 .. Sewer 905,000 726,732 Lighting 785,000 630,368 .. 02/25/03 03/01/23 4.00%-4.50% 2,254,000 1,810,000 General 662,400 624,361 Water/Sewer 8,674,300 8,176,164 - Highway 2,243,300 2,114,475 08/01/07 08/01/27 4.00%-5.00% 11,580,000 10,915,000 - - 41 .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2009 .. .. NOTE G - Lon2:-Term Liabilities (Cont'd) 1. Serial Bonds (Cont'd) .. PURPOSE General Highway Home & Connnunity Services ORIGINAL ISSUE DATE FINAL MATURITY DATE INTERl1S T RATE ORIGINAL AMOUNT OF ISSUE 1,070,000 1,074,000 1,218,000 3,362,000 $ 50,087,396 AMOUNT ours TANDING AT DECEMBER 31, 2009 1,070,000 1,074,000 1,218,000 3,362,000 $ 29,927,000 .. 04/02/09 04/01/22 2.00%-5.00% .. TOTALS 2. Chan2:es .. The changes in the Town's indebtedness during the year ended December 31, 2009, are summarized as follows: BALANCE BALANCE AMOUNTS JANUARY 1, DECEMBER 31, DUE WITIllN 2009 INCREASE (DECREASE) 2009 ONE YEAR SerialBonds Note F.l $ 28,825,000 $ 3,362,000 $ (2,260,000) $ 29,927,000 $ 2,477,000 Compensated Absences Note A.8 195,320 3,485 198,805 Landfill Closure and Post Post Costs Note J 327,059 (13,508) 313,551 12,643 Judgement & Claims Note J.l 80,000 80,000 TOTALS $ 29,427,379 $ 3,365,485 $ (2,273,508) $ 30,519,356 $ 2,489,643 3. Debt Service Requirements .. .. .. .. .. .. .. The annual requirements to amortize bonded debt, as of December 31, 2009, are as follows: YEAR ENDING DECEMBER 31. PRINCIPAL INTERl1ST TOTAL 2010 2,477,000 1,383,904 3,860,904 2011 2,600,000 1,210,688 3,810,688 2012 2,490,000 1,090,851 3,580,851 2013 2,185,000 973,201 3,158,201 2014 2,275,000 871,212 3,146,212 2015-2019 8,330,000 3,097,610 11,427,610 2020-2024 5,920,000 1,340,210 7,260,210 2025-2029 3,650,000 478,128 4,128,128 TOTALS $ 29,927,000 $ 10,445,804 $ 40,372,804 42 .. .. - - .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 .. NOTE H - Operatimf 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, 2009 amounted to $47,500. At December 31, 2009, the approximate annual operating lease commitments, subject to appropriation of funds, were as follows: .. YFAR ENDING DECEMBER 31. OPmATING LEASES .. .. 2010 2011 2012 2013 2014 37,771 22,183 18,218 13,759 5,710 97,641 .. Total minimum lease payments $ .. NOTE I - Compliance .. 1. Deficit Fund Balances .. Two funds had un-reserved fund equity deficits at the end of the year, the General Fund and the Capital Projects Fund. The General Fund deficit occurred as a result of expenditures exceeding revenues, while the Capital Projects Fund deficit 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 $306,583. ... .. 2. Inter-fund Borrowings .. During 2009 a water district advanced cash to the General Fund and several sewer districts. However these advances were not paid back by the end of the year, as required, and no interest was assessed. The total amount of these advances was $740,000. These balances are included in the caption, Due From and Due To Other Funds. NOTE J - Commitments and Contingent 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. .. 43 .. - TOWN OF WAPPINGER, NEW YORK _ NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 .. NOTE J - Commitments and Contine: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 $11,941,732. Debt service is provided by the residents of two sewer districts. .. 3. 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, 2009, 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 $6,955,896. The costs incurred on the project amounted to $8,075,246, as of December 31, 2009. 4. Authorized Debt - .. As of December 31, 2009, 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 Improvement OS/27/03 3,300,000 1,220,000 Computer Hardware and Software 03/12103 550,000 200,000 TOTALS $ 17,140,000 $ 2,950,000 - - - 44 - .. TOWN OF WAPPINGER, NEW YORK lit NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2009 .. NOTE K - 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 $84,037. The Town has recorded the long term liability of $79,614 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 usefu1life 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 2009. The future costs may be higher due to inflation, changes in technology or subsequent changes in regulations. .. .. .. 2. Poue:hkeepsie- W appine:ers-LaGrane: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, 2009, amounted to $9,085. .. .. The following is a summary of unaudited financial information at December 31,2009, 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 $ 148,413 Total Liabilities $ Total Venture Equity $ 148,413 Total Revenues $ 60,249 Total Expenditures $ 52,252 .. .. 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 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 finance its share. The notes were re-financed in 2009 into a serial bond and the amount outstanding as of December 31,2009 is $1,218,000. ... .. ... ... 45 - .. TOWN OF WAPPINGER, NEW YORK .. NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2009 .. NOTE K - Municipal Landfills (Cont'd) 2. Pou2hkeepsie-Wappin!~ers-LaGran2e Joint Landfill (Cont'd) liIlIII 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 $229,514. .. .. NOTE L - Prior Period Adjustment The financial statements include a prior period adjustment for the recognition of the 2008 portion of the Town's postemployment benefits obligation. This obligation was not recognized on the .. December 31, 2008 financial statements. This adjustment reduces beginning net assets on the government-wide financial statements by $400,287 for the year ending December 31, 2009, and would increase expenses by $400,287 for the year ended December 31, 2008. IIllII .. NOTE M - Subseauent Event In August 2010, the Town and others signed a Memorandum of Dnderstanding (MOD) with the Worker's Compensation Board, with regard to a potential allocation of deficit among former members of the Public Entity Trust of New York. This MOD requires a monthly payment to be made during the term of the agreement, currently estimated to total $30,580 through April 2011. The deficit allocation to the Town could approximate $284,000 when ultimately determined. .. .. .. .. .. .. .. .. .. 46 .. .. .. .. .. IiIIIlI REQUIRED SUPPLEMENTAL INFORMATION IiIIIlI .. .. IiIIIlI .. .. .. .. .. .. .. .. .. .. .. EXHIBIT I TOWN OF WAPPINGER, NEW YORK BUDGETARY COMPARISON SCHEDULE .. FOR THE YEAR ENDED DECEMBER 31. 2009 GENERAL FUND .. VARIANCE ORIGINAL FINAL FAVORABLE BUDGET BUDGET ACTUAL (UNFAVORABLE) REVENUES .. Real property taxes $ 1,950,315 $ 1,950,315 $ 1,950,315 $ Real property tax items 107,005 107,005 89,334 (17,671) Non property tax items 897,813 897,813 1,223,674 325,861 .. Departmental income 325,947 325,947 206,044 (119,903) Intergovernmental charges Use of money and property 250,000 250,000 225,975 (24,025) .. Licenses and permits 314,300 314,300 156,860 (157,440) Fines and forfeitures 135,500 135,500 248,821 113,321 Sale of property and compensation for loss 3,812 3,812 Miscellaneous local sources 69,800 69,800 .. State aid 907,522 907,522 1,122,772 215,250 Federal aid .. Total revenues 4,888,402 4,888,402 5,297,407 409,005 Appropriation of prior year's fund balance Total revenues and appropriation of prior year's fund balance 4,888,402 4,888,402 5,297,407 409,005 - EXPENDITURES AND ENCUMBRANCES .. General Government Support 1,603,495 1,603,495 1,945,378 (341,883) Public safety 449,213 449,213 517,631 (68,418) Health 3,000 3,000 4,861 (1,861) Transportation 163,975 163,975 173,165 (9,190) .. Economic assistance & opportunity 20,100 20,100 24,250 (4,150) Culture and recreation 641,276 641,276 839,974 (198,698) Home and community service 369,710 369,710 490,398 (120,688) .. Employee benefits 719,561 719,561 660,563 58,998 Debt service 918,072 918,072 918,071 1 Total expenditures and encumbrances 4,888,402 4,888,402 5,574,291 (685,889) .. Excess (deficiency) of revenues and appropriation of prior year's fund balance over (under) .. expenditures and encumbrances (276,884) (276,884) Other financing sources (uses) .. Operating transfers in 126,192 126,192 Operating transfers out (107,407) (107,407) Total other fmancing sources 18,785 18,785 .. Excess (deficiency) of revenues and appropriation of prior year's fund balance and other sources - over (under) expenditures, encumbrances $ $ $ (258,099) $ (258,099) .. See independent auditor's report. 47 MIll ... ... ... HIGHWAY FUND VARIANCE ORIGINAL FINAL FAVORABLE BUDGET BUDGET ACTUAL (UNFAVORABLE) ... REVENUES Real property taxes $ 1,961,447 $ 1,961,447 $ 1,961,447 $ Real property tax items .. Non property tax items 305,000 305,000 290,871 (14,129) Departmental income Intergovernmental charges 2,300 2,300 2,839 539 Use of money and property 10,000 10,000 3,241 (6,759) .. Licenses and permits 50 50 Fines and forfeitures Sale of property and compensation for loss 15,000 15,000 9,620 (5,380) .. Miscellaneous local sources 14,886 14,886 State aid 150,000 150,000 152,081 2,081 Federal aid .. Total revenues 2,443,747 2,443,747 2,435,035 (8,712) Appropriation of prior year's fund balance Total revenues and appropriation of IilII prior year's fund balance 2,443,747 2,443,747 2,435,035 (8,712) EXPENDITURES AND ENCUMBRANCES - General Government Support 41,371 41,371 66,735 (25,364) Public safety Health .. Transportation 1,698,202 1,698,202 1,715,509 (17,307) Economic assistance & opportunity Culture and recreation .. Home and community service Employee benefits 487,546 487,546 445,547 41,999 Debt service 216,628 216,628 220,415 (3,787) .. Total expenditures and encumbrances 2,443,747 2,443,747 2,448,206 (4,459) Excess (deficiency) of revenues and appropriation of .. prior year's fund balance over (under) expenditures and encumbrances (13,171) (13,171) Other fmancing sources (uses) .. Operating transfers in 146,110 146,110 Operating transfers out (14,67,J) (14,677) .. Total other fmancing sources 131,433 131,433 Excess (deficiency) of revenues and appropriation of prior year's fund balance and other sources - over (under) expenditures, encumbrances $ $ $ 118,262 $ 118,262 - 48 - ... ... WATER FUND ... VARIANCE ORIGINAL FINAL FAVORABLE BUDGET BUDGET ACTUAL (UNFAVORABLE) REVENUES ... Real property taxes $ 644,713 $ 644,713 $ 644,695 $ (18) Real property tax items Non property tax items ... Departmental income 891,444 891,444 898,078 6,634 Intergovernmental charges Use of money and property 4,729 4,729 10,340 5,611 Licenses and permits ... Fines and forfeitures Sale of property and compensation for loss 100,550 100,550 Miscellaneous local sources 702 702 ... State aid Federal aid Total revenues 1,540,886 1,540,886 1,654,365 113,479 IIlII Appropriation of prior year's fund balance 155,223 155,223 73,202 (82,021) Total revenues and appropriation of prior year's fund balance 1,696,109 1,696,109 1,727,567 31,458 ... EXPENDITURES AND ENCUMBRANCES General Government Support 769 (769) IIlII Public safety Health Transportation IIlII Economic assistance & opportunity Culture and recreation Home and community service 949,324 949,324 984,412 (35,088) .. Employee benefits 7,799 7,799 4,137 3,662 Debt service 738,986 738,986 738,249 737 Total expenditures and encumbrances 1,696,109 1,696,109 1,727,567 (31,458) .. Excess (deficiency) of revenues and appropriation of prior year's fund balance over (under) .. expenditures and encumbrances Other fmancing sources (uses) Operating transfers in .. Operating transfers out Total other fmancing sources . Excess (deficiency) of revenues and appropriation of prior year's fund balance and other sources over (under) expenditures, encumbrances $ $ $ $ .. ... 49 ... III .. III SEWER FUND VARIANCE ORIGINAL FINAL FAVORABLE BUDGET BUDGET ACTUAL (UNFAVORABLE) .. REVENUES Real property taxes $ 1,384,997 $ 1,384,997 $ 1,384,997 $ Real property tax items ... Non property tax items Departmental income 1,680,627 1,680,627 1,638,927 (41,700) Intergovernmental charges Use of money and property 139,569 139,569 276,031 136,462 - Licenses and permits Fines and forfeitures Sale of property and compensation for loss ... Miscellaneous local sources State aid Federal aid .. Total revenues 3,205,193 3,205,193 3,299,955 94,762 Appropriation of prior year's fund balance 649,327 649,327 597,047 (52,280) Total revenues and appropriation of ... prior year's fund balance 3,854,520 3,854,520 3,897,002 42,482 EXPENDITURES AND ENCUMBRANCES ... (22,933) General Government Support 22,933 Public safety Health .. Transportation Economic assistance & opportunity Culture and recreation .. Home and community service 1,684,021 1,684,021 1,753,690 (69,669) Employee benefits 6,680 6,680 2,569 4,111 Debt service 2,181,854 2,181,854 2,128,676 53,178 .. Total expenditures and encumbrances 3,872,555 3,872,555 3,907,868 (35,313) Excess (deficiency) of revenues and appropriation of .. prior year's fund balance over (under) expenditures and encumbrances (18,035) (18,035) (10,866) 7,169 Other financing sources (uses) .. Operating transfers in 18,035 18,035 28,901 10,866 Operating transfers out (18,035) (18,035) .. Total other financing sources 18,035 18,035 10,866 (7,169) Excess (deficiency) of revenues and appropriation of prior year's fund balance and other sources - over (under) expenditures, encumbrances $ $ $ $ IIlII 50 IIlII III III EXHIBIT II III TOWN OF WAPPINGER, NEW YORK OTHER POST -EMPLOYMENT BENEFITS PLAN SCHEDULE OF FUNDING PROGRESS DECEMBER 31,2009 III Unfunded UAL as a Actuarial Accrued Percentage III Actuarial Value of Accrued Liability Funded Covered of Covered Valuation Assets Liability (VAL) Ratio Payroll Payroll Year Ended Date (a) (b) (b-a) (aIb ) (c) ((b-a)/c) III 12/31/2009 12/31/2009 $ - $ 4,925,385 $ 4,925,385 0.0% $ 2,117,550 232.60% 12/31/2008 12/31/2008 $ - $ 4,469,088 $ 4,469,088 0.0% $ 2,378,751 187.88% III III - III - III III III III - - - 51 See independent auditor's report. - III III III .. .. OTHERSUPPLEMENTALINFO~TION .. .. III .. .. .. .. .. .. .. III - - - .. EXHIBIT III .. TOWN OF WAPPINGER, NEW YORK COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS DECEMBER 31,2009 .. .. SPECIAL GRANT FUND LIGHT FUND MISC AMBULANCE FUND TOTAL NON-MAJOR GOVERNMENTAl FUNDS .. ASSETS .. Cash and cash equivalents Due from other funds $ $ 16,765 $ 65,894 412 $ 82,659 4,836 4,424 Total assets $ 4,424 $ 16,765 $ 66,306 $ 87,495 .. .. LIABILITIES AND FUND EQUITY .. LIABILITIES Accounts payable $ 463 $ 3,553 $ $ 4,016 Due to other funds. 3,000 3,000 .. Total liabilities 463 6,553 7,016 .. FUND BALANCE Fund balance (deficit): Unreserved: .. Undesignated 3,961 10,212 66,306 80,479 Total fund balance 3,961 10,212 66,306 80,479 .. Total liabilities and fund balance $ 4,424 $ 16,765 $ 66,306 $ 87,495 .. .. .. .. - See independent auditor's report 52 - IIIIlI EXHIBIT IV III TOWN OF WAPPINGER, NEW YORK COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31,2009 .. .. TOTAL MISC NON-MAJOR SPECIAL LIGHT AMBULANCE GOVERMENTAI III GRANT FUND FUND FUNDS REVENUES Property taxes $ $ 40,380 $ 383,084 $ 423,464 .. I>epanrnentallncome 17,000 17,000 Use of money and property 191 1,164 1,355 .. Miscellaneous local sources 50 50 Total revenues 17,000 40,571 384,298 441,869 . EXPENDITURES . General governnnent support 478 478 Health 395,000 395,000 Transportation 41,829 41,829 . Home and connnnunity service 12,561 12,561 Employee benefits 243 243 . Total expenditures 13,039 41,829 395,243 450,111 ill Excess (deficiency) of revenues over expenditures 3,961 (1,258) (10,945) (8,242) IIIIlI Other financing sources: Operating transfers in Operating transfers out .. Total other financing sources . Excess (deficiency) of revenue and other and other sources over expendiutes and other uses 3,961 (1,258) (10,945) (8,242) - Fund Balance, December 31, 2008 11,470 77,251 88,721 - Fund Balance, December 31, 2009 $ 3,961 $ 10,212 $ 66,306 80,479 .. See independent auditor's report 53 -