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2010 III .. .. .. ... ... TOWN OF WAPPINGER, NEW YORK .. FINANCIAL STATEMENTS .. AS OF AND FOR THE YEAR ENDED DECEMBER 31. 2010 .. ~ .. .. [R1~~~~~~[Q) .. OCT 06 2011 TOWN OF WAPPINGER TOWN CLERK Ii. i, III i.. II. ... .. .. .. .. .. TOWN OF WAPPINGER, NEW YORK TABLE OF CONTENTS DECEMBER 31.2010 l... ... 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, 2010 ............ .......... ........ ............ ...................... ............... 5-13 BASIC FINANCIAL STATEMENTS: ... Government-Wide Financial Statements: ... Statement of Net Assets - December 31, 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....................................................... ..14 ilia Statement of Activities - For the Year Ended December 31, 2010 ............................................................................................................... 15-16 .. Fund Financial Statements: II. Balance Sheet - Governmental Funds - December 31, 2010.................................................. 17-18 *: .. Reconciliation of Governmental Funds Balance Sheet To The Statement of Net Assets - December 31, 2010 ..............................................................19 .. Statement of Revenues, Expenditures and Changes In Fund Balances- Governmental Funds - For the Year Ended December 31, 2010............................................................................... 20-21 i. .. ~. .. II. ;} ... ... .. .. ... ~ .. ... , ... .. ~.. .. tf G' .. k ... L g i. .. I. , r . ~~ SEDORE Partners James L. Sedore,Jr, CPA Mark S. O'Sullil'an, CPA James F Lellerio, .ft:, CPA Linda M. Hannigan, CPA Karen T Hansen, CPA Jeffrey L. Brown, CPA Charles R. Rae, ,h:, CPA HUDSON VAllEY (PAs Navigating Your Success INDEPENDENT AUDITORS' REPORT To the Supervisor and Members of the Town Board Town of Wappinger, New York 20 Middlebush Road Wappingers Falls, New York 12590 We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Wappinger, New York, as of and for the year ended December 31, 2010, which collectively comprise the Town's basic financial statements 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 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 fmancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. As discussed in Note A.5.C, to the fmancial 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, net 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. In our opinion, because of the effects of the matter discussed in the preceding paragraph, the financial statements referred to previously do not present fairly, in conformity with accounting principles generally accepted in the United States of America, the financial position of the governmental activities of the Town of Wappinger, New York, as of December 31, 2010, or the changes in financial position thereof for the year then ended. In addition, in our opinion, the financial statements referred to previously 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 31,2010, 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 .. .. .. .. iI. .. .... ... ... ... ... $i III i/ .. \, i.. ~; III 'l'; L. }'. ... .. ill 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. In accordance with Government Auditing Standards, we have also issued our report dated July 14, 2011 on our consideration of the Town of Wappinger, New York's internal control over financial reporting and on 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 fmancial 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 on pages 5 through 13, 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 fmancial statements, and other knowledge we obtained during our audit of the basic fmancial 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 fmancial statements that collectively comprise the Town of Wappinger, New York's basic financial statements. The combining non-major fund financial statements, Exhibits III and IV, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining non-major fund financial statements 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. ~/~~CM.s Poughkeepsie, New York July 14, 2011 2 ~7 ~ .. ~~ SEDORE HUDSON VALLEY CPAs Navigating Your Success Partners James L. Sedore, Jr, CPA Mark S O'Sulliu(]n, CPA James F Lellerio,Jr, CPA Linda M Hannigan, CPA Karen T Hansen, CPA Jeffrey L. Brown, CPA Charles R. Rae, Jr, CPA ;t! .. ~ .. .. 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 ... ... i.. To the Supervisor and Members of the Town Board Town of Wappinger, New York 20 Middlebush Road Wappingers Falls, New York 12590 j i. ... 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, 2010, which collectively comprise the Town of Wappinger, New York's basic financial statements and have issued our report thereon dated July 14, 2011. 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. 1.. .. Internal Control Over Financial ReDortinf! ~ i. In planning and performing our audit, we considered the Town of Wappinger's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town of Wappinger, New York's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Town of Wappinger, New York's internal control over financial reporting. i III i .. 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. ft; \, i. :; l 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 10 1 I Poughkeepsie, New York 12601 Tel: (84.5) 48.5-.5.510 Fax: (84.5) 48.5-.5.547 I Email: info@sedoreco,com I Web: www.sedoreco.com POUGHKEEPSIE · PORT JERVIS. FISHKILL 3 ~ II. it. certain deficiencies in internal control over financial reporting, described in a separate letter dated July 14, 2011, Finding 1 which 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 July 14,2011. ... The Town of Wappinger's response to the fmdings 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. .... ~ I~~,,^ t/~(}//l s Poughkeepsie, New York July 14,2011 fa .. .. G ill ~; L ... I. 4 III .. .. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2010 (Un-audited) .. .. .. 1. Overview of the Financial Statements \~ ilia 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. l .. -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 2010 2009 Change Non-Capital $ 5,758,838 $ 6,024,737 $ (265,899) ... Capital 28,776,054 28,894,037 (117,983) Total Assets $ 34.534.892 $ 34.918.774 $ (383.882) ilia Liabilities Current $ 4,207,125 $ 4,387,657 $ (180,532) ~- Non-Current 26,994,070 29,132,428 (2,138,358) i. Total Liabilities 31,201,195 33,520,085 (2,318,890 ) Net Assets: ,~ Capital 11,199,643 10,418,769 780,874 .. Restricted 546,307 609,508 (63,201) Unrestricted (8,412,253) (9,629,588) 1,217,335 t! 0 Total Net Assets 3,333,697 1,398,689 1,935,008 .. Total Liabilities and Net Assets $ 34.534.892 $ 34.918.774 $ 083.882) .. ~ .. 5 iIIl i; :i ill lie '- ... ... ... l, .. .. .... .. .... ... .. '- L ... .. .. .. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2010, Cont'd. (Un-audited) Revenues 2010 2009 Change Program Fines, Fees & Charges $ 4,074,946 $ 3,151,618 923,328 Operating Grants 64,066 38,876 25,190 Capital Grants 176,230 181,585 (5,355) General Revenues Property Taxes 7,037,641 6,364,834 672,807 Other Taxes 2,161,624 2,351,636 (190,012) Investment Earnings 472,999 539,135 (66,136) State Aid 300,557 347,366 (46,809) Other Revenues 31,602 308,576 (276,974) Total Revenues 14,319,665 13,283,626 1,036,039 Expenses General Government Support 2,371,767 2,620,457 (248,690) Public Safety 664,183 724,121 (59,938) Health 401,945 403,089 (1,144) Transportation 3,198,803 2,711,126 487,677 Economic Assistance 27,164 25,222 1,942 Culture and Recreation 857,282 941,494 (84,212) Home and Community Service 3,535,280 3,087,877 447,403 Other 1,328,233 1,401,525 (73,292) Total Expenses 12,384,657 11,914,911 469,746 Change in Net Assets $ 1.935,008 $ 1.368,715 $ 566.293 Governmental Funds: GENERAL FUND The majority of activity for the Town is presented in the General Fund. Fund Balance for the General Fund increased by $277,779 from 2009 to 2010. The main reason for the increase in the fund balance was strong results from sales tax revenue, building permits, planning board fees and revenue from fines and forfeited bail. Total General Fund Equity for 2010 is $1,039,899, all of which is designated or restricted for particular purposes. 6 .. ... MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2010, Cont'd. (Un-audited) '<< II-. The Following Charts describe significant categories of General Fund revenues and expenses: .. General Fund Revenues 2010 .. ... . Property Taxes & Tax Items . State & Federal Aid Ii. o Sales and Franchise Tax o Interest & Earnings i. .Departmental Income 1% . Fines, Licenses and Permits .. . All Other i. .. General Fund Expenses 2010 .... . General government support t, iR 1% .. . Public safety o Transportation o Culture and Recreation L . Home and community servi ces . Employee benefits ~ " ... . Debt Service .. IIAIl Other .. II 7 I. ... MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2010, Cont'd. (Un-audited) i. HIGHWAY FUND ~, .. The Highway Fund ended the year with $111,973 in Fund Balance, all of which is reserved. .. The following charts describe the significant categories of Highway Fund revenues and expenses: i.. Highway Fund Revenues 2010 1; .. 0% . Property Taxes i li. . Sales Tax eTransfers from Other Funds ~ eState & Federal Aid .. . Other Revenue i.. ... Highway Fund Expenses 2010 .Street Maintenance ... .Permanent Road Improvements CSnow Removal i. cOther t .. .Machinery Purchase and Maintenance L . Employee Benefits . Debt Service .. .. 8 III ill ill MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2010, Cont'd. (Un-audited) i). .. WATER FUND " .. The Town operated four water districts during 2010 with an overall Fund Balance of $1,368,918. Operating revenues totaled $1,790,926 with the expenses totaling $1,726,451 resulting in an excess of revenues over expenditures in the amount of $64,475. The excess is the result of revising water rates to match budgeted spending in 2010. The modest surplus will help build up the fund balance at the end of the year. Fund balances declined in 2009 due to its use as a source of financing for the budget. ... ... SEWER FUND ... !i i.. The Town operated nine Sewer Districts at the beginning of2010. Three sewer districts were consolidated into one United Wappinger sewer district, leaving a total of seven sewer districts at the end of 2010 with an overall Fund Balance $632,293. Operating revenues totaled $4,168,007 with the expenses totaling $4,083,786 resulting in an excess of revenues over expenditures in the amount of $84,221. The excess is the result of revising sewer rates to match budgeted spending in 2010. The surplus will help boost fund balances which declined significantly in 2009 due to the exhaustion of fund balances as a source of financing to bridge the budget gaps. l.. ~ ... BUDGETARY IDGHLIGHTS L. ... 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. Ii. ~ II.. L t ... .. .. 9 II .. .. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2010, Cont'd. (Un-audited) 3. Activities regarding capital assets, long and short term debt .. ... The Town spent approximately half a million dollars on nine capital projects in 2010. The top six projects were: Highway Blacktop Maintenance, Carnwath New Electrical Line, Highway Garage Complex Reconstruction, Cider Mill Loop Water Tank Rehabilitation, Carnwath Restoration, Wappinger Park Water System Abandonment, Underground Fuel Tanks and Highway Emergency Generator projects. The expenditures for these projects accounted for ninety-nine percent (99%) of the total capital expenditures. I ... Ii. Projects completed in 2010 include the Town Hall Boiler replacement, Carnwath New Electric Line, Highway Garage HV AC system replacement and the removal of the underground Fuel Tank within the Town Hall's compound. The Highway emergency Generator proj ect will be completed in 2011. II. '- The Central Wappinger Water Improvement Area 1999-2R project, which has connected six of the Town's water districts to a common source of water, is still ongoing. The project expenses are funded entirely by the property owners in the district. Long-term fmancing (Serial bonds) was issued in 2007 in the amount of $7,380,000, part of a total issue of $11,580,000. .. .. Long Term Debt .. The Town has retained a rating of Al in May 2011, which had been initially assigned in March 2009 by Moody's Investors Service. This rating allows for competitive bidding and lower interest rates on future borrowing. .. Total long term serial bond debt at the end of 2010 was $27,450,000. Of this debt, $5,274,988 belongs to the General Fund and $3,074,845 to Highway Fund. The majority of the Town's debt relates to its water and sewer districts amounting to $8,396,388 and $10,703,779, respectively. Water and sewer debt is paid by the property owners in the respective districts. Bond Anticipation Notes outstanding of $150,000 is also considered long term because it was re- fmanced. .. i.. .. In July 2011, the Town refinanced its Public Improvement (Serial) Bonds, 2000 in the amount of $1,260,000 with a potential savings in interest of approximately $85,000 in ten years. In addition, the Town issued a bond of $316,000 in June 2011 towards the cost of the construction at the Tri-Municipa1 Wastewater Treatment Plant. The Town Board is also discussing the possibility of issuing, in October 2011, a series of Bond Anticipation Notes amounting to a total of $1,018,375 towards the purchase of a Vactor ($350,000), Dump Truck ($425,250), Pick-up Trucks ($149,625), Mower Tractor ($78,500), and a Tow-Behind Mower ($15,000). .. L. , .. 10 .. :fr III It .. Short Term Debt MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2010, Cont'd. (Un-audited) % .. II. The Town currently has four Bond Anticipation Notes (BANs) outstanding of $725,000, all maturing on March 31, 2011 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 is to bring property assessments to full valuation and 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 tax levy and continues every year. lI. .. 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. ilia lI. The Town is current with all tax certiorari cases to those filed in 2010, thereby eliminating unexpected retroactive exposures. ... The assessment roll established in 2010 for 2011 taxes resulted in homestead assessments decreasing by an average of 6.68%. However, overall, the proportion of non-homestead to homestead assessments changed by approximately 3%. Non-homestead assessments for 2010 are 39% of the total and homestead assessments are 61 %, instead of 36% and 64% in 2009, representing a shift in the tax burden away from homeowners to commercial properties. The Town adopted an increased tax levy of 16.6% for 2011 from the 2010 levy. ,j> .. i.. The Town implemented an in-house payroll system in January 2010 with KVS Software Company. The Town saved approximately $24,000 by implementing the in-house payroll. The Town has also implemented new software for Code Enforcement in compliance with new regulations and for more effective cash control. ~, ii. ill The Town has experienced (commercial) economic development along the Route 9 corridor including Adams FairAcre Farms (opening 2011), STS Tire (formerly vacant), Aroma Astoria, and Mercedes. There are more than ten commercial projects in the planning stages, including a proposed $80 million senior care facility along the Route 9D corridor. The town has commissioned a water and sewer services extension study on Route 9 to keep pace with these economic development/improvements. A feasibility study into a water line upgrade to Martz Field is ongoing. This effort is hoped will improve the supply and quality of the water to the area. .. .. .. The Town secured a three year CSEA contract for highway employees through 2012. The Town Hall employees have proposed a collective bargaining unit with the Teamsters. 11 .. ~ .. M. lr II. MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2010, Cont'd. (Un-audited) l .. ? ~ . 4. Currently Known Facts Bearing on the Future, (Continued) During the 2011 budget deliberations, the Town Board set aside $400,000 in the General fund for reduction of its indebtness to other Funds. ill. ... 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 ofthe vouchers/payments upon the budget line(s) and fund balances. ill. Greater control of the capital projects continued in 2010 through an up-to-date tracking of capital account transactions and fund balances. This allows the Town to consider infrastructure improvements utilizing capital fund balances, where appropriate, rather than extending general fund indebtedness. .. ... Dutchess County discontinued the sales tax exemption on clothing in 2010. This improved sales revenue in 2010, and it is hoped this will improve revenue from sales tax in 2011. i.. 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 within the first quarter 2010, allowing for the payment of permits, licenses and taxes. L f .. Dutchess County is proposing a charge back to municipalities for election expenses with a potential exposure of $100,000 to the Town. Currently, an audit committee consisting of county legislators and local officials is reviewing the proposal. L 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 will allow an efficiency of oversight and a decrease in payroll expenses. The Town recently hired a Recreation Director to be in charge of recreational activities. ~ .. ~ .. The Town 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. Due this initiative, an underground Fuel Tank was removed from the Town hall's compound and disposed of in the manner required by DEC. i. L. 12 .. f III ia MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2010, Cont'd. (Un-audited) ~ # .. 4. Currently Known Facts Bearing on the Future, (Continued) .. 11, .. 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. l') .. ... In 2010, 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. ... l.. .. ... ~: .. t '- l lit h 1:: Ii. ~ .. ... .. 13 1. SF .. ~ ... TOWN OF WAPPINGER, NEW YORK STATEMENT OF NET ASSETS DECEMBER 31.2010 ~. .. ASSETS .. Current assets: Cash and cash equivalents Cash and cash equivalents, restricted Receivables (net) Inventories Prepaid expenses t!. .. 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 .. Current Liabilities: Accounts Payable Accrued liabilities and retainage payable Notes payable Overpayments Deferred revenue Due to other governments Current portion oflong-term liabilities Landfill remediation liability Bonds payable - Capital Bonds payable - Non-capital Total current liabilities II. ~ II. ... 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 ~. .. z ~ .. ~i: .. Total liabilities '> 1': NET ASSETS Invested in Capital Assets, net of related debt Restricted for: Recreation Unrestricted .. ... Total net assets Total liabilities and net assets i. The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. ill GOVERNMENTAL ACTIVITIES $ 3,702,491 5,000 1,869,886 43,472 137,989 5,758,838 7,782,217 5,556,673 4,694,164 10,743,000 28,776,054 $ 34,534,892 $ 579,699 460,115 575,000 11,509 40,000 32,619 11,183 978,857 1,518,143 4,207,125 37,796 80,000 213,087 1,282,126 278,061 150,000 16,022,554 8,930,446 26,994,070 31,201,195 11,199,643 546,307 (8,412,253) 3,333,697 $ 34,534,892 14 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 Total governmental activities TOWN OF WAPPINGER, NEW YORK STATEMENT OF ACTMTIES DECEMBER 31.2010 J J J J j EXPENSES CHARGES FOR SERVICES OPERATING GRANTS AND CONTRIBUTIONS $ 2,371,767 664,183 401,945 3,198,803 27,164 857,282 3,535,280 1,328,233 $ 16,900 $ 653,115 4,320 167,596 3,233,015 4,074,946 64,066 38,114 25,952 J j 12,384,657 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 J j J J Change in net assets "I Ii Net assets - beginning , ,; .. Net assets - endi.ng ~ .. ,I .. , ,~ " .. The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. j 15 J ~ .. L ~ .. ~ NET (EXPENSE) REVENUE AND CHANGES IN NET ASSETS ~ .. CAPITAL GRANTSAND GOVERNMENTAL CONTRIBUTIONS ACTIVITIES $ 5,323 $ (2,311,430) 14,884 (397,625) (3,042,896) (27,164) (674,686) (302,265) (1,328,233) L. 155,907 ~ 15,000 i. 176,230 (8,069,415) t Ii. .. 6,949,329 88,312 1,256,448 527,282 377,894 472,999 300,557 18,927 12,675 10,004,423 I. La L 1,935,008 l i. 1,398,689 $ 3,333,697 I, .. t .. ~.. f ~ ... ?; .. 16 ~ i. 904,803 18,127 154 4 10,040 295 4,298 J J ,J I J J J J J J ~ ~ J j J TOWN OF WAPPINGER, NEW YORK BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31. 2010 GENERAL HIGHWAY WATER SEWER FUND FUND FUND FUND ASSETS Cash and cash equivalents $ 984,651 $ 13,222 $ 740,951 $ 69,570 Cash and cash equivalents, restricted Receivables: Charges for services 350,154 705,734 Other 178,099 Deposits with other governments Due from other funds 344,263 40,100 300,498 90,741 Due from other governments 449,770 State and federal receivable 178,178 Inventory, at cost 43,472 Prepaid expenses 66,509 70,244 1,236 Total assets $ 2,201,4 70 $ 167,038 $ 1,392,839 $ 866,045 LIABILITIES AND FUND EQUITY LIABILITIES Accounts payable Retainage payable Overpayments Bond anticipation notes payable Due to other funds Due to other governments $ 198,641 $ 54,911 $ 2,368 $ 229,159 11,509 FUND BALANCE Fund balance (deficit): Reserved for: Prepaids and inventory Debt service Miscellaneous Unreserved: Recreation Subsequent year's expenditures Undesignated Total fund balance 66,509 164,050 402,900 113,716 1,236 (139,867) 1,039,899 (1,743) 111,973 3,000 1,364,682 1,368,918 632,293 632,293 J J 546,307 Total liabilities and fund balance $ 2,201,470 $ 167,038 $ 1,392,839 $ 866,045 J ~ The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. 17 J J ,~r .. .. -it: CAPITAL NON- TOTAL Ii. PROJECTS MAJOR GOVERNMENTAL FUND FUNDS FUNDS it:: " $ 1,813,443 $ 80,654 $ 3,702,491 III 5,000 5,000 L. 1,055,888 229 7,722 186,050 .. 228,265 21,887 1,025,754 449,770 178,178 II. 43,472 137,989 $ 2,046,937 $ 110,263 $ 6,784,592 .. La $ 79,109 $ 15,511 $ 579,699 66,193 66,193 ... 11,509 575,000 575,000 L. 101,323 19,329 1,025,754 32,619 ~~ .. i 181,461 ~. 164,050 .. 402,900 L 546,307 3,000 1,225,312 75,423 3,156,100 ~ 1,225,312 75,423 4,453,818 ... f::: $ 2,046,937 $ 110,263 $ 6,784,592 Ii g: .. .. l. 18 .. L. TOWN OF WAPPINGER, NEW YORK RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS DECEMBER 31.2010 La L * .' .. Total fund equity for governmental funds $ 4,453,818 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. 28,776,054 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. (29,464,457) Grants received for capital assets are deferred and amortized over the life ofthe asset. (37,796) Accrued interest is not reported in the funds. (393,922) Total net assets of governmental activities $ 3,333,697 r L ~ ... L La ~ .. ... .. ... L ~ .. L L .. .. The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. 19 L TOWN OF WAPPINGER, NEW YORK j STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES J GOVERNMENTAL FUNDS DECEMBER 31.2010 GENERAL HIGHWAY WATER SEWER J FUND FUND FUND FUND REVENUES Real property taxes $ 1,837,477 $ 2,021,357 $ 729,553 $ 1,921,562 J Real property taxes items 88,312 Non property taxes items 1,329,342 305,000 Departmental income 421,055 1,043,801 2,005,060 J Intergovernmental charges 25,952 Use of money and property 215,836 1,192 11,043 241,385 Licenses and permits 323,306 Fines and forfeitures 292,239 ~ Sale of property and compensation for loss 10,590 1,808 6,529 Miscellaneous local sources 29,042 836 State aid 843,066 152,757 I Federal aid Total revenues 5,416,217 2,482,950 1,790,926 4,168,007 EXPENDITURES J General government support 1,726,413 69,039 116 69 " Public safety 456,527 Health 4,210 J Transportation 164,558 1,769,078 Economic assistance & opportunity 26,359 Culture and recreation 730,798 Home and community services 482,765 990,336 1,981,259 .~ Employee benefits 636,220 500,848 5,223 2,037 Debt service 960,578 265,261 730,776 2,100,421 Total expenditures 5,188,428 2,604,226 1,726,451 4,083,786 J Excess of revenues over expenditures 227,789 (121,276) 64,475 84,221 Other financing sources: J Proceeds of debt BANs redeemed from appropriations Operating transfers in 50,000 815,127 Operating transfers out (10) (50,000) (815,127) J Total other financing sources 49,990 (50,000) Excess (deficiency) ofrevenue and other sources , over expenditures and other uses 277,779 (171,276) 64,475 84,221 ~ Fund Balance, December 31, 2009 762,120 283,249 1,304,443 548,072 :~ 'J Fund Balance, December 31, 2010 $ 1,039,899 $ 111,973 $ 1,368,918 $ 632,293 lIII The accompanying Notes to the Financial Statements . should be read in conjunction with these Financial Statements. 20 . .. iii fi' .. .. CAPITAL NON- PROJECTS MAJOR TOTAL ~ FUND FUNDS FUNDS $ $ 439,380 $ 6,949,329 L. 88,312 1,634,342 8,475 3,478,391 < 25,952 .. 9,190 354 479,000 323,306 292,239 ... 18,927 1,016 30,894 995,823 .. 10,206 448,209 14,316,515 .. 162,464 54 1,958,155 456,527 395,000 399,210 259,145 43,943 2,236,724 .. 805 27,164 730,798 81,565 14,196 3,550,121 } 82 1,144,410 - 4,057,036 503,979 453,275 14,560,145 ... (493,773) (5,066) (243,630) .. 115,000 115,000 10 865,137 (865,137) .. 115,000 10 115,000 .. (378,773) (5,056) (128,630) 1,604,085 80,479 4,582,448 !it .. $ 1,225,312 $ 75,423 $ 4,453,818 '!. :',' ... 21 .. .. .. ~ .. TOWN OF WAPPINGER, NEW YORK RECONCILIATION OF STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES DECEMBER 31. 2010 ... ... Net change in fund balance - total government funds .. The change in net assets reported for governmental activities in the statement of activities is different because: .. Ii. 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. .. 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. .. .. Bond proceeds are reported on the financing sources in governmental funds and thus contribute to the change in fund balance. In the statement of net assets, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds but reduces the liability in the statement of net assets. II. ... Debt issued: Bonds payable issued Bond anticipation note redeemed Repayments: Bond anticipation note principal Bond principal (115,000) .. 115,000 2,552,000 .. 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 2010. ... ... 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 2010. ... .. Net change in net assets of governmental activities - The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. .. $ (128,630) (117,983) 3,150 2,552,000 61,803 (435,332) $ 1,935,008 22 i. %,' k ~;; ... TOWN OF WAPPINGER, NEW YORK STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUND DECEMBER 31. 2010 !W ill .. AGENCY FUNDS ASSETS :ji .. Cash and cash equivalents $ 145,694 Total assets 145,694 II. LIABILITIES .. Escrow funds returnable and other liabilities 145,694 ~f (f .. Total liabilities 145,694 .. NET ASSETS $ 145,694 Total liabilities and net assets III. Ill. F .. .. .. .. ... .. ... The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements 23 ,'? III ~. .. L. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31. 2010 ~ .. 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. .. ~ .. The Town provides the following services: highway maintenance, water, sewer, planning, zoning, building and safety inspection, lighting, and culture and recreation. ::;; .. The Town's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America as applied to governmental units (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements (Statements and Interpretations). The Town is also required to follow the pronouncements of the Financial Accounting Standards Board (FASB) issued through November 30, 1989 (when applicable) that do not conflict with or contradict GASB pronouncements, .in preparing its government-wide fmancial statements. The more significant accounting policies established by GAAP and used by the Town in preparing its government-wide and fund financial statements are discussed below. L. ~ .. .. 1. The Reportine: Entitv Ii. The Town, for financial purposes, includes all of the funds relevant to the operations of the Town of Wappinger, New York. The fmancial 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. ii, \:, ... ;,- L. 2. Basic Financial Statements - Government-Wide Statements .. The Town's basic fmancial statements include both government-wide (reporting the Town as a whole) and fund financial statements (reporting the Town's major funds). Both the government-wide and fund financial statements categorize primary activities as either governmental or business type activities. The Town's parks and recreation, public works, and general administrative services are classified as governmental activities. The Town's water services are also classified as governmental activities since user fees are not intended to cover all costs including depreciation. II. .. it .. .. .. 24 S~- iii '- .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2010 f} .. NOTE A - Summarv of Si~nificant Accountin~ Policies (Cont'd) 2. Basic Financial Statements - Government-Wide Statements (Cont'd) .. .. In the government-wide Statement of Net Assets, the governmental activities columns is presented on a consolidated basis by column, and is reported on a full accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long-term debt and obligations. The Town's net assets are reported in three parts-invested in capital assets, net of related debt; restricted net assets; and unrestricted net assets. The Town first utilizes restricted resources to finance qualifying activities. ti i,- .. .. The government-wide Statement of Activities reports both the gross and net cost of each of the Town's functions or activities. The functions are also supported by general government revenues (property and sales taxes, certain intergovernmental revenues, fines, permits and charges, etc.). The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants. Program revenues must be directly associated with the function (public works, community and youth services, etc.). Operating grants include operating-specific and discretionary (either operating or capital) grants while the capital grants column reflects capital-specific grants. ... lit ilia The net costs are normally covered by general revenue (property, sales or mortgage taxes, intergovernmental revenues, interest income, etc). t f III This government-wide focus is more on the sustainability of the Town as an entity and the change in the Town's net assets resulting from the current year's activities. .. 3. Basic Financial Statements - Fund Financial Statements r' The financial transactions of the Town are reported in individual funds in the fund financial statements. Each fund is accounted for by providing a separate set of self- balancing accounts that comprises its assets, liabilities, reserves, fund equity, revenues and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the Town or meets the following criteria: ... " .. .. .. a. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental fund are at least 10 percent of the corresponding total for all funds of that category or type; and ... ... t'. t> .. 25 i~' ill Ii. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2010 .. NOTE A - Summary of Shmificant AccountinS! 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. ill ... The following fund types are used by the Town: ... A. Governmental Funds .. The focus of the governmental funds' measurement (in the fund statements) is upon determination of financial position and changes in financial position (sources, uses, and balances of financial resources) rather than upon net income. ... The following is a description of the governmental funds of the Town: 1. General Fund is the general operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in another fund. The General Fund is considered a major fund and is presented separately. .. .. 2. Highway Fund is used to record the revenues and expenditures related to the maintenance of Town roadways. The Highway Fund is considered a major fund and is presented separately. ... 3. 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. L. 4. 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. ~, I; .. .. 5. Capital Projects Fund is used to account for fmancial 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. .. iI. 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. ... Ii. 26 .. III .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2010 ilia NOTE A - Summarv of Simificant Accountinf! 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. li .. 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 fmancial 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 fmancial statements are presented on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred. 'j II. 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. '- .. i. .. - '- 27 .. ill TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2010 - ... NOTE A - Summarv of Shmificant AccountiDi! 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. ... ... ... ... The cash and investments of the Town at December 31, 2010, are as follows: ... .. CAPITAL NON- GENERAL IDGHWAY WAnR SEWER PROJECTS MAJOR FUND FUND FUND FUND FUND FUNDS TOTAL Non-Interest Bearing Accounts $ 800 $ - $ - $ - $ - $ - $ 800 Interest Bearing Accounts 983.851 13.222 740.951 69.570 1.813.443 80.654 3.701.691 TOTALS $ 984,651 $ 13,222 $ 740,951 $ 69,570 $ 1,813,443 $ 80,654 $ 3,702,491 .. ... Ii Ii. 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. ili' .. ~ III. ... III 28 .. .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2010 .. NOTE A - Summarv of Shmificant AccountinS! 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 Ii. Capital assets purchased or acquired with an original cost of $500 or more are reported at historical cost or estimated historical cost. Contributed assets are reported at fair market value as of the date received. Additions, improvements and other capital outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. Depreciation on all assets is provided on the straight-line basis over the following estimated useful lives: .. .... Buildings Infrastructure - Water & Sewer Infrastructure - Roads Machinery and equipment Improvements 15-40 years 40 years 15 years 5-15 years 10-30 years .. .. GASB Statement No. 34 requires the Town to report and depreciate new infrastructure assets effective with the beginning of 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. ... ... ;;L .. i. " ~. .. ... l.. $' .. 29 .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2010 .. NOTE A - Summary of Sie:nificant Accountine: 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; .. .. .. .. j: .. .. 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, 2010, in the amount of $213,087. 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 fmancial resources. .. ~; .. E. Interfund Activitv ~;: lI. 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. / .. .. ~~ .. i. .. 30 III ill l. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2010 .. NOTE A - Summarv of Sie:nificant Accountine: Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) F. Bude:ets Ii. .. 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 i.. ... 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). .. ill. 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 fmancial statements and required supplementary information. That report may be obtained by writing to the New York State and Local Retirement Systems, 110 State Street, Albany, New York 12244. iii. ... Funding Policy , .. The Systems are noncontributory except for employees who joined the New York State and Local Employees' Retirement System after July 27, 1976 who contribute 3% of their salary. Under the authority of the NYSRSSL, the Comptroller shall certify annually the rates expressed as proportions of payroll of members, which shall be used in computing the contributions required to be made by employers to the pension accumulation fund. ik .. L ... ill. ~ 31 ~ . .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2010 " ilII NOTE A - Summarv of Sismificant Accountin2 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: " II. iI. ms 2010 $ 248,337 .. 2009 $ 191,926 2008 $ 216,806 ... 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-Employment Benefits The cost of post-employment healthcare benefits, like the cost of pension benefits, generally should be associated with the periods in which the cost occurs, rather than in the future year when it will be paid, which is the accrual accounting perspective. In adopting the requirements of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Post-employment Benefits Other Than Pensions, for the year ended December 31, 2010 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. II. ... L '- ~ 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: L .. L .. Ii. I. 32 .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2010 ... NOTE A - Summarv of Silmificant Accountinl! Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) ... H. Other Post-Emolovment Benefits (Cont'd) ... % 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% ... ... .. Fundinl! Policv .. 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 Postemolovment Benefit Cost II. The Town's OPEB cost (expense) amounted to $445,358 for the year ended December 31, 2010. The Town's OPEB cost was equal to the Annual Required Contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45 less the amount that the Town paid in the current year for retirees. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs plus a past service cost each year and amortize any unfunded actuarial liabilities over a period of 30 years. .. ... .. Actuarial Accrued Liability (AAL) Retirees & Dependents Acitves Fully Eligible Acitvies Not Fully Eligible Total Actuarial Accned Liability $ 1ir! .. $ .. Past Service Costs N onnal Costs Annual Required Contribution (ARC) $ 150,618 353,527 504,145 ... $ 1. III 33 .. III III TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2010 - NOTE A - Summary of Si!mificant AccountiDf! Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) H. Other Post-Employment Benefits (Cont'd) ... i- Net OPEB Obligation - beginning of the year Annual OPEB cost Actual Employer Contributions* Net OPEB Obigation - end of the year $ 836,769 495,018 (49,661) 1,282,126 ... $ Percent of annual OPEB cost contributed 0.00% i- *This contribution is the pay-as-you-go am:mnt, as an actual plan has not been established, see Funding Policy. Net Other Postemplovment Benefit Obli2ation ... ... Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the trend of health care costs. Amounts determined regarding the funding status of the plan and the required contributions of the Town are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value for plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. ... .. .. Actuarial Methods and Assumptions .. Projections of benefits for fmancial 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, 2010 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: III .. III .. ill 34 III II1II TOWN OF WAPPINGER, NEW YORK .. NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2010 NOTE A - Summarv of Si!mificant Accountine: Policies (Cont'd) II. 5. Financial Statement Amounts (Cont'd) .. H. Other Post-Employment Benefits (Cont'd) 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% J. 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% ... t. Prescription Medical ~ Dental Vision - Healthcare cost trend rate ass~d for next fiscal year 9.00% 9.00% 4.00% 3.00% Rate to which the cost trend rate is assmned 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 ; .. ... it. iii I. Property Taxes The Town submits an approved budget to the Dutchess County Commissioner of Finance by December 5th of the previous year. The County then establishes the warrant for the year, which is due and payable on or about January 1 of each year. The Town collects the taxes on behalf of the Town and County without penalty through February 28th and with penalties and interest through August 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 l1li III .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31.2010 .. NOTE A - Summarv of Si!!nificant Accountin!! Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) J. Lon!!- Term Liabilities II. ... 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. ... ... K. Reservations of Fund Eauitv The Town records indicate that portions of the fund equity are segregated for specific future uses. The following details the description and amounts of the reserves used by the Town: t .. i.. Ii. Iii. ill II. ill ii" .. L. The Town also has $546,307 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 Carnwath 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 financial presentation purposes these amounts are completely reclassed to the General Fund and restricted. ill. .. 36 II .. i' III TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2010 .. NOTE A - Summarv of Sie:nificant Accountine: Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) L. Risk Manae:ement The Town of Wappinger assumes the liability for most risk including, but not limited to, property damage and personal injury liability. Such risks are covered by the purchase of commercial insurance. Judgments and claims are recorded when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. Workers compensation coverage is provided through a retrospective policy, wherein premiums are recorded based on the ultimate cost of the experience to date of workers in similar occupations. The Town does not estimate claims, which may have occurred but are not reported in areas where the Town is not insured. ... .. ... ... .. M. Use of Estimates ilia The preparation of basic fmancial 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 fmancial statements and the accompanying notes. Actual results could differ from those estimates. .... NOTE B - Other Receivables f, a. Other Receivables at December 31, 2010, consist of the following: , .. ~: .... CAPITAL NON GENERAL HIGHWAY WATER SEWER PROJECTS MAJOR FUND FUND FUND FUND FUND FUNDS TOTAL Accounts Receivable $ 178,099 $ - $ - $ - $ 229 $ 7,722 $ 186,050 Rents Receivable 350,154 705,734 1,055,888 TOTALS $ 178,099 $ - $ 350,154 $ 705,734 $ 229 $ 7,722 $ 1,241,938 ... .. .. , .. II. 37 III iii i' .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2010 ',: .. 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, 2010. 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. l III i. .. AMOUNT AMOUNT FUND RF.CElV ABLE PAYABLE Gen eral $ 344,263 $ 904,803 Highway 40,100 Water 300,498 4 Sewer 90,741 295 Capital Projects 228,265 101,323 Non-Major 21,887 19,329 TOTALS $ 1,025,754 $ 1,025,754 ... .. ... l. FUND Gen eral Highway Water Sewer Capital Projects Non-Major TOTALS TRANSFERS IN $ 50,000 TRANSFERS our $ 10 '50,000 II. 815,127 815,127 10 $ 865,137 ill $ 865,137 .. ill NOTE D - Cauital Assets The following is a summary of changes and adjustments in the Capital Assets, for the year ended December 31,2010: ... BALANCE BALANCE JANUARY 1, DECEMBFR31, 2010 ADDITIONS (DISPOSALS) 2010 Land $ 7,782,217 $ $ $ 7,782,217 Buildings 5,701,533 286,587 5,988,120 Improvements Other Than Buildings 726,446 289,050 1,015,496 '- .. II. 38 ';\; II. II. .. .. ia i. ... .. .. ... ;; iia .. ~ .. * Depreciation was charged to govemmentalactivities as follows: Generalgovern~ntsupport 92~98 Public safety 48,963 Transportation 521,302 Culture and recreation 56,321 Home and connnunity services 62,166 Total depreciation expense $ 781,050 l' ... r I" ill .. 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 .. fi: .. Ii. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2010 Ie .. NOTE E - Bond Anticipation Notes Payable (Cont'd) i' .. 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 31,2010, are as follows: .. AMOUNT OUfSTANDING AT DECEMBER 31, 2010 PURPOSE ORIGINAL ISSUE DATE MATURITY DATE IN'll!lUS T RATE ORIGINAL AMOUNT OF ISSUE ... Ii. Revaluation, Boilers, & Highway 04/01/10 04/01/11 Camwath Fanns 12/15/10 04/01/11 Short-Term Bond Anticipation Notes Subtotal 1.08% l.59<l1o 490,000 85,000 575,000 490,000 85,000 575,000 .. L Long-Term Bond Anticipation Notes Lawsuit Settlement 12/02/07 04/01/11 1.08% 225,000 150,000 .. Total - Bond Anticipation Notes $ 800,000 $ 725,000 .. .. Changes in Bond Anticipation Notes Payable as of December 31,2010, are as follows: .. BALANCE BALANCE .. JANUARY 1, NEW RE-FINANCE/ DECEMBIiR 31, PURPOSE 2010 IS SUES PAYMENTS 2010 " Various Purposes $ 458,000 $ 85,000 $ (218,000) $ 325,000 .. Highway 400,000 400,000 ... TOTALS $ 858,000 $ 85,000 $ (218,000) $ 725,000 .. ilia 40 i. ~; .. TOWN OF WAPPINGER, NEW YORK L NOTES TO THE FINANCIAL STATEMENTS (CONT'D) ... DECEMBER 31.2010 NOTE F - Lone:- Term Liabilities .. 1. Serial Bonds ~' Serial Bonds may be issued for any object or purpose for which a period of probable usefulness II. has been established. The Serial Bonds Payable, as of December 31, 2010, are as follows: .. AMOUNT ours TANDING ORIGINAL FINAL ORIGINAL AT Ii. ISSUE MATURITY INDREST AMOUNT DECEMBER 31, PURPOSE DATE DATE RATE OF ISSUE 2010 .. Sewer - Tn-Municipal 11/12/92 09/15/12 5.80010-6.65% $ 6,060,000 $ 750,000 Sewer - Tn-Municipal 03/14/02 04/15/21 1.21%-4.98% 9,836,556 5,850,000 ,; Sewer - Tn-Municipal 11/26/02 05/15/15 3.18%-5.99% 8,519,786 2,360,000 i. Sewer - Tn-Municipal 06/01/95 11/15/15 3.70010-5.55% 2,610,054 800,000 Water - Fleetwood 07/30/98 10/15/18 3.70010-5.15% 510,000 245,000 .. Greystone Property Purchase 10/01/00 10/01/20 4.75%-6.50% 2,085,000 1,315,000 , Fmergency Services ... Building 06/01/95 11/15/15 3.70010-5.55% 1,275,000 460,000 Water 452,732 37,461 ;; .. Sewer 288,876 29,904 Drainage 1,253,392 117,635 !' 10/02/01 08/15/11 3.77% 1,995,000 185,000 II. 429,129 Water 564,000 Sewer 905,000 688,589 .. Lighting 785,000 597,282 02/25/03 03/01/23 4.00%-4.50010 2,254,000 1,715,000 .. Gen eral 662,400 604,054 Water/Sewer 8,674,300 7,910,242 Highway 2,243,300 2,045,704 .. 08/01/07 08/01/27 4.00010-5.00% 11,580,000 10,560,000 .. - .. 41 II.. .. ... TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2010 .... NOTE F - Lon1!-Term Liabilities (Cont'd) 1. Serial Bonds (Cont'd) ilia AMOUNT ours TANDING ORIGINAL FINAL ORIGINAL AT ISSUE MATURITY INnREST AMOUNT DECEMBER 31, PURPOSE DATE DATE RATE OF ISSUE 2010 General 1,070,000 1,021,624 Highway 1,074,000 1,025,443 Home & Connnunity Services 1,218,000 1,162,933 04/02109 04/01/22 2.00010-5.00%1 3,362,000 3,210,000 TOTAlS $ 50,087,396 $ 27,450,000 .. ... . .. .. 2. Chan1!es .. The changes in the Town's indebtedness during the year ended December 31, 2010, are summarized as follows: .. I.. BALANCE BALANCE AMOUNTS JANUARY 1, DECEMBER 31, DUE WITIllN 2010 INCRFASE IDECRFASE) 2010 ONE YEAR Serial Bonds Note F.1 $ 29,927,000 $ - $ (2,477,000) $ 27,450,000 $ 2,497,000 Compensated Absences Note A.8 198,805 13,642 212,447 Landfill Closure and Post Post Costs Note J 313,551 (24,307) 289,244 11,183 Judgement & Claims Note J.1 80,000 80,000 TOTALS $ 30,519,356 $ 13,642 $ (2,501,307) $ 28,031,691 $ 2,508,183 .. I. i. it. ... ... .. 42 ilia .. ~i It TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2010 ';, I' .. NOTE F - LODl~-Term Liabilities (Cont'd) L. 3. Debt Service Requirements The annual requirements to amortize bonded debt, as of December 31, 2010, are as follows: ... :; .... YFAR ENDING DECEMBER 31. PRINCIPAL INTF.lUS T TOTAL 2011 2,600,000 1,203,668 3,803,668 2012 2,490,000 1,084,808 3,574,808 2013 2,185,000 968,254 3,153,254 2014 2,275,000 867,278 3,142,278 2015 1,870,000 771,185 2,641,185 2016-2020 8,215,000 2,707,143 10,922,143 2021-2025 4,835,000 1,107,268 5,942,268 2026-2030 2,980,000 323,002 3,303,002 TOTALS $ 27,450,000 $ 9,032,606 $ 36,482,606 ... ... ... .. .. NOTE G - Operatin2 Leases (i .. 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 31,2010 amounted to $51,494. At December 31, 2010, the approximate annual operating lease commitments, subject to appropriation of funds, were as follows: .. .. YEAR ENDING DECEMBER 31. 2011 2012 2013 2014 2015 OPERATING LFASl)S $ 43,383 39,417 34,959 24,686 17,520 4,380 $ 164,345 i.. .. Thereafter Total mininnlm lease payments ... i.. 43 II. .. .. Ii. Ii. .. .. .. 1. ~ ~ - .. ... .. Ii. , III it. ... .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2010 NOTE H - Comoliance 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 $207,012. NOTE I - Commitments and Contine:ent 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. 2. Tri-Municioal 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 $10,448,589. Debt service is provided by the residents of two sewer districts. 3. Central Waooine:er Water Imorovement 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, 2010, 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 $6,728,696. The costs incurred on the project amounted to $8,075,246, as of December 31, 2010. 44 ~ III .. II. ~ ... i. Ii. .. ... .. .. .. .. L .. .. .. ... ... ... TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2010 NOTE I - Commitments and Contine:ent Liabilities (Cont'd) 4. Authorized Debt As of December 31, 2010, the Town has authorized, but not issued, the following new debt: Authorizati on 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 03/12/03 550,000 200,000 Mower 04/25/11 78,750 78,750 Pick-up Truck 04/25/11 13,125 13,125 Dump Trucks 04/25/11 425,250 425,250 Tow-behind Mower 04/25/11 15,000 15,000 Vactor 04/25/11 350,000 350,000 TOTALS $ 18,022,125 $ 3,832,125 NOTE J - Municipal Landfills 1. Castle Point Landfill The Town has voluntarily entered into a Consent Order with the New York State Department of Environmental Conservation to close, cap and monitor the landfill at Castle Point. The closing and capping project was completed in 1999. The costs of monitoring, which could be required for up to thirty years after closure, are currently estimated to amount to $79,614. The Town has recorded the long term liability of$75,191 and short term liability of $4,423 in the Statement of Net Assets. The costs of both closure and post closure monitoring are ordinarily recognized over the expected useful life of the landfill. However, since the landfill has stopped accepting refuse and is now closed, any additional costs over the estimate is being recognized as incurred. The Town incurred $4,423 in monitoring costs during 2010. The future costs may be higher due to inflation, changes in technology or subsequent changes in regulations. 2. Poue:hkeepsie-Wappine: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, 2010, amounted to $8,220. The following is a summary of unaudited financial information at December 31, 2010, 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: 45 .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2010 NOTE J - Municipal Landfills (Cont'd) .. 2. Pou2:hkeepsie-Wappin2:ers-LaGram!:e Joint LandfIll (Cont'd) .. ll. Total Assets $ 124,832 Total Liabilities $ Total Venture Equity $ 124,832 Total Revenues $ 24 Total Expenditures $ 23,605 ... .. .. During 2002, violations were documented at the landfill and in 2003 an Order of Consent was issued through the New York State Department of Environmental Conservation to remediate Environmental Conservation Law and New York Codes Rule and Regulations violations. To comply with this order the municipalities need to perform final closure of the landfill under current regulations by December 31, 2005 and perform post closure care and monitoring for a minimum of thirty years thereafter. The estimated cost of fmal closure is $10,000,000. All costs 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, 2010 is $1,162,933. 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 $209,630. II. .. .. .. NOTE K - New Reportin2: Standard In February 2009, the Governmental Accounting Standards Board (GASB) issued Statement 54 .. Fund Balance Reporting and Governmental Fund Type Definitions. This Statement establishes certain new fmancial reporting requirements for state and local governments throughout the United States. When implemented, it will require the reporting of fund balance in five II. categories: nonspendable, restricted, committed, assigned, and unassigned. The Town is required to implement this standard for the year ending December 31,2011. The Town is in the process of implementing the provisions of GASB Statement 54. The implementation of GASB III. Statement 54 will not have a substantive effect on the Town's government wide or governmental (fund) financial position. .. filii .. 46 .. III ... ... .. .. REQUIRED SUPPLEMENTAL INFORMATION ... .. ... ilia III ilia .. III ... .. ... ... III .. !; I. I' .. HIGHWAY FUND III VARIANCE ORIGINAL FINAL FAVORABLE BUDGET BUDGET ACTUAL (UNFAVORABLE) " REVENUES i. Real property taxes $ 2,020,872 $ 2,020,872 $ 2,021,357 $ 485 Real property tax items Non property tax items 305,000 305,000 305,000 il Departmental income .. Intergovernmental charges 2,300 2,300 (2,300) ~ Use of money and property 10,000 10,000 1,192 (8,808) l.. Licenses and permits Fines and forfeitures Sale of property and compensation for loss 15,000 15,000 1,808 (13,192) Miscellaneous local sources 836 836 .. State aid 150,000 150,000 152,757 2,757 Federal aid .. Total revenues 2,503,172 2,503,172 2,482,950 (20,222) Appropriation of prior year's fund balance 50,000 (50,000) Total revenues and appropriation of prior year's fund balance 2,503,172 2,553,172 2,482,950 (70,222) II. EXPENDITURES AND ENCUMBRANCES .. General Government Support 41,371 41,371 69,039 (27,668) Public safety Health t Transportation 1,710,868 1,710,868 1,769,078 (58,210) .. Economic assistance & opportunity Culture and recreation Home and community service $/ Employee benefits 487,546 487,546 500,848 (13,302) .. Debt service 263,387 263,387 265,261 (1,874) ... Total expenditures and encumbrances 2,503,172 2,503,172 2,604,226 (101,054) Excess (deficiency) of revenues and appropriation of I, prior year's fund balance over (under) .. expenditures and encumbrances 50,000 (121,276) (171,276) Other financing sources (uses) II.. Operating transfers in Operating transfers out (50,000) (50,000) ~; Total other financing sources (50,000) (50,000) [if ilIIII Excess (deficiency) of revenues and appropriation of prior year's fund balance and other sources .. over (under) expenditures, encumbrances $ $ $ (171,276) $ (171,276) ''< . 48 .. .. 49 iii II. .. SEWER FUND .. VARIANCE ORIGINAL FINAL FAVORABLE BUDGET BUDGET ACTUAL (UNFAVORABLE) r! REVENUES II. Real property taxes $ 1,921,562 $ 1,921,562 $ 1,921,562 $ Real property tax items Non property tax items i. Departmental income 1,866,510 1,866,510 2,005,060 138,550 Intergovernmental charges Use of money and property 239,419 239,419 241,385 1,966 ... Licenses and permits Fines and forfeitures Sale of property and compensation for loss Miscellaneous local sources .. State aid Federal aid ... Total revenues 4,027,491 4,027,491 4,168,007 140,516 Appropriation of prior year's fund balance 597,047 597,047 Total revenues and appropriation of prior year's fund balance 4,027,491 4,027,491 4,765,054 737,563 ... EXPENDITURES AND ENCUMBRANCES ia General Government Support 150 150 69 81 Public safety Health \' Transportation ... Economic assistance & opportunity Culture and recreation Home and community service 1,892,641 1,892,641 1,981,259 (88,618) [: Employee benefits 3,190 3,190 2,037 1,153 . Debt service 2,131,510 2,131,510 2,100,421 31,089 \; Total expenditures and encumbrances 4,027,491 4,027,491 4,083,786 (56,295) .. Excess (deficiency) of revenues and appropriation of prior year's fund balance over (under) .. expenditures and encumbrances 681,268 681,268 Other fmancing sources (uses) (, Operating transfers in 815,127 815,127 .. Operating transfers out (815,127) (815,127) Total other fmancing sources .. Excess (deficiency) of revenues and appropriation of prior year's fund balance and other sources over (under) expenditures, encumbrances $ $ $ 681,268 $ 681,268 ... ill. 50 .. .. .. EXIllBIT IT .. TOWN OF WAPPINGER, NEW YORK OTHER POST-EMPLOYMENT BENEFITS PLAN SCHEDULE OF FUNDING PROGRESS DECEMBER 31.2010 ... ... Unfunded UAL as a Actuarial Accrued Percentage Actuarial Value of Accrued Liability Funded Covered of Covered Valuation Assets Liability (UAL) Ratio Payroll Payroll Year Ended Date (a) (b) (b-a) (aIb) (c) ((b-a)/c) 12/31/2010 12/31/2010 $ - $ 4,925,385 $ 4,925,385 0.0% $ 2,326,424 211.71% 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% .... .. ... ... .. .. a. K ... Ii. .. ... .. .. 51 See independent auditor's report. iii t~, .. 'l .. .. .. OTHER SUPPLEMENTAL INFORMATION .. .. .. II. .. a. h .. \; .. .. II. lit .. ... .. ~ " .. EXHIBIT III {, TOWN OF WAPPINGER, NEW YORK II. COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS .. DECEMBER 31, 2010 TOTAL ti SPECIAL MISC NON-MAJOR .. GRANT LIGHT AMBULANCE GOVERNMENTAl FUND FUND FUND FUNDS .. ASSETS Cash and cash equivalents $ $ 14,457 $ 66,197 $ 80,654 "- Accounts receivable 7,722 7,722 Due from other funds 21,475 412 21,887 ... Total assets $ 29,197 $ 14,457 $ 66,609 $ 110,263 .. LIABILITIES AND FUND EQUITY .. LIABILITIES Accounts payable $ 11,819 $ 3,692 $ $ 15,511 .. Due to other funds 19,178 151 19,329 Total liabilities 30,997 3,843 34,840 ... FUND BALANCE Fund balance (deficit): . Unreserved: Undesignated (1,800) 10,614 66,609 75,423 Total fund balance (1,800) 10,614 66,609 75,423 '" ... Total liabilities and fund balance $ 29,197 $ 14,457 $ 66,609 $ 110,263 ~ II. f .. It: .. ... See independent auditor's report .. 52 II. EXHmIT IV i.. TOWN OF WAPPINGER, NEW YORK COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS DECEMBER 31,2010 .. .. TOTAL MISC NON-MAJOR SPECIAL LIGHT AMBULANCE GOVERMENTAI ... GRANT FUND FUND FUNDS REVENUES Ii. Property taxes $ $ 44,380 $ 395,000 $ 439,380 Departmental Income 8,475 8,475 Use of money and property 51 303 354 L Miscellaneous local sources Total revenues 8,475 44,431 395,303 448,209 iii EXPENDITURES if I, General government support 50 4 54 iii Health 395,000 395,000 L Transportation 43,943 43,943 Home and community service 14,196 14,196 Employee benefits 82 82 II. Total expenditures 14,246 44,029 395,000 453,275 ill. Excess (deficiency) of revenues over expenditures (5,771) 402 303 (5,066) .. Other financing sources: Operating transfers in 10 10 Operating transfers out .. Total other financing sources 10 10 ill Excess (deficiency) of revenue and other and other sources over expendiutes and other uses (5,761) 402 303 (5,056) .. Fund Balance, December 31, 2009 3,961 10,212 66,306 80,479 ... Fund Balance, December 31,2010 $ (1,800) $ 10,614 $ 66,609 75,423 ... See independent auditor's report 53 .