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2011 - - - - - - TOWN OF WAPPINGER, NEW YORK - FINANCIAL STATEMENTS - AS OF AND FOR THE YEAR ENDED DECEMBER 31,2011 - - - ~ - ... .. .. ,. ... fPa~~~aW~fD) SEP 1 9 2012 TOWN OF WAPPINGER T~WN CLERK - - - TOWN OF WAPPINGER, NEW YORK TABLE OF CONTENTS DECEMBER 31,2011 - DESCRIPTION PAGE (S) - Independent Audi tors' 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 31,2011 ............................................................................... 5-12 - BASIC FINANCIAL STATEMENTS: - Government-\Vide Financial Statements: Statement of Net Assets - December 31,2011..............................................................................13 - Statement of Activities - For the Year Ended Decenlber 31, 20 11 ............................................................................................................... 14-15 - Fund Financial Statements: - Balance Sheet Governmental Funds - December 31,2011.................................................. 16-17 - Reconciliation of Govemmental Funds Balance Sheet To The Statement of Net Assets - December 31,2011..............................................................18 - Statement of Revenues, Expenditures and Changes In Fund Balances- Govemmental Funds - For the Year Ended December 31, 2011............................................................................... 19-20 - Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Govemmental Funds to the Statement of Activities - For the Year Ended December 31,2011............................................21 - Statement of Fiduciary Net Assets - Fiduciary Fund - December 31,2011.................................22 -- Notes to the Basic Financial Statements.............................................................. .23-42 - - - - REQUIRED SUPPLEMENTAL INFORMATION: - Exhibit I Budgetary Comparison Schedule - General Fund, Highway Fund, Water Fund and Sewer Fund For the Year Ended December 31, 2011 .............................................................................43-47 - - Exhibit II Other Post-Employment Benefits Plan Schedule of Funding Progress -December 31,2011.............................................................. ...48 OTHER SUPPLEMENTAL INFORMATION: - - Exhibit III Combining Balance Sheet - Non-Major Governmental Funds - December 31,2011 ............................................................................ 49 - Exhibit IV Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Non-Major Governmental Funds For the Year Ended December 31, 2011.......................................................................50 - - Exhibit V Schedule of Findings, Recommendations and Responses For the Year Ended December 31,2011 ............................................................................. 51-53 - - - - - - .. - - ~~ SEDORE ~ ~ & COMPANY I \irt IIt'J"S HIlIIi S OS/lII/l'1I1l CP4 JIII/le:; F Lelleri,), Jr, el\\ Li/li!u ,\1. !/1I/lI/lJJ,IIII, ('1\\ - CERTIFIED PUBLIC ACCOUNTANTS, P.C Navigating Your Success Jrlll ii'S I., Sei!(}/(', JI C1) \ C1l11rle:; H, Hrw Jr, CP\ - 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 31,2011, 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. - - - - As discussed in Note A.6.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, 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, 2011, or the changes in financial position thereof for the year then ended. - - - Poughkeepsie Office 2678 South Road I Suite 101 I Poughkeepsie, New York 12601 Tel: (84S) 485-S51 0 Fax: (84S) 48S-5517 i Email: in!o@sedoreco.com \ Web: www.sedoreco.com POUGHKEEPSIE. PI lRT JERVIS. FISHKILL - - - 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, 2011, 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 August 21, 2012 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 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 on pages 5 through 12, 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 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. - - - - - ScL<n.;. ... ~. c f M Poughkeepsie, New York August 21, 2012 - 2 - - ~~ SEDORE ~ --:::J & COMPANY ll;\rtllc'rs 11U11i S () 'SU/I/UIIl. ('/:4 IUlue.'; I:' Lel/eiil!, Ii. ce\ Uudo M. f/ullf/lgulI, CJ'.1 - CE RTI FI ED PU BlIC ACCOU NT ANTS, P.c. Navigating Your Success IWlles L Sed(I}('.,Ii, ('['\ ChUlles R Ru('"Ii, (P\ - - REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS - - - To the Supervisor and Members of the Town Board Town of Wappinger, New York 20 Middlebush Road Wappingers Falls, New York 12590 - - We have audited the accompanying financial statements of the governmental actiVItIes, each major fund, and the aggregate remaining fund inforn1ation of the Town of Wappinger, New York as of and for the year ended December 31, 2011, which collectively comprise the Town of Wappinger, New York's basic financial statements and have issued our report thereon dated August 21, 20 12. 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. - - Internal Control Over Financial Reporting - In planning and perfonning 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. - - A deficiency in infernal control exists when the design or operation of a control does not allow management or employees, in the normal course of perfonning their assigned functions, to prevent, or detect and COlTect 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 conected 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 - - Poughkeepsie Office 2678 South Road I Suite 101 I Poughkeepsie, New York 12601 Tel: (845) 485-5510 Fax: (i'l45) 4i'l5-55.17 I Email: info@sedoreco.com I Web: www.sedoreco.com POUGHKEEPSIE. POIU JERVIS. FISH KILL 3 - - - internal control over financial repOliing 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 certain deficiencies in internal control over financial reporting, described in the Schedule of Findings, Recommendations and Responses, as listed in the Table of Contents, 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 perforn1ed 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 detennination 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 Schedule of Findings, Recommendations and Responses, as listed in the Table of Contents. - The Town of Wappinger's response to the findings identified in our audit is included in the Schedule 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 inforn1ation 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. - SC/4~~ ~IC?~':s Poughkeepsie, New York August 21, 2012 - - - . - - 4 . - - - MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2011 (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), Govemment Wide Financial Statements, Fund Financial Statements and Notes to the Financial Statements. - -Govemment- Wide Financial Statements provide both long term and short term information about the To\vn's overall financial status. They repOli 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 Govemment -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 As sets 2011 2010 Change Non-Capital $ 7,529.600 $ 5.758,838 $ 1.770,762 Capital 30350244 28,776,054 1.574,190 Total Assets $ 37.879,844 $ 34,534.892 $ 3,344.952 Liabilities Current $ 6.462.067 $ 4.207,125 $ 2.254.942 N on-C une nt 25,045.933 26.994,070 ( 1.948.137) Total Liabilities 3 1,508.000 3 \,201. 195 306,805 Net Assets: Capital 12226307 1 U 99,643 1.026,664 Restricted 39 \,795 546.307 ( 154.512) Unrestricted ( 6246,258) (8.412253) 2.165,995 Total Net Assets 6371.844 3,333,697 3,038.147 Total Liabilities and Net Assets $ 37,879.844 $ 34,534,892 $ 3,344,952 - - .... - - .. - - 5 - - - MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2011, Cont'd. (Un-audited) Revenues 2011 2010 Change Program Fines, Fees & Charges $ 3,859,293 $ 4,074,946 $ (215,653) Operating Grants 62.223 64,066 (1.843) Capital Grants 221.210 176.230 44,980 General Revenues Property Taxes 7,659,099 7,037,641 621,458 Other Taxes 2,455.911 2,161,624 294.287 Investment Earnings 442,797 472.999 (30.202) State Aid 209.409 300.557 (91,148) Other Revenues 97,129 31.602 65,527 Total Revenues 15,007,071 14,319,665 687.406 Expenses General Government Support 1.792.945 2.371.767 ( 578,822) Public Safety 599.104 664,183 (65.079) Health 401.108 401,945 (837) Transportation 3.424.846 3,198,803 226,043 Economic Assistance 10.614 27.164 ( 16.550) Culture and Recreation 1.187.441 857.282 330,159 Home and Community Service 3.350.606 3,535.280 ( 184,674) Other 1.202.262 1,328.233 (125,971) Total Expenses 11,968,926 12.384,657 (415.732) Change in Net Assets $ 3,038,145 $ 1,935,008 $ 1.103.138 - - - - - - - - - - - Governmental Funds: - GENERAL FUND - The majority of activity for the Town is presented in the General Funds, Town-Wide and Part- To\vn. Fund Balance for the General Funds increased by $109,209 and $65,821 from 2010 to 2011 respectively. The main reason for the surplus was setting aside funds in the 2011 budget for the reduction of the General Fund - Town-Wide's indebtedness to other funds. - ... General Fund Equity for 2011 is $123,390 - Town-Wide and $1,091,540 - Part-Town in total of which $90,032 is non-spendable, $958,745 is restricted, and $166,153 is assigned or unassigned. - 6 - - - MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2011, Cont'd. (Un-audited) - - The Following Charts describe significant categories of General Fund revenues and expenses: - General Fund Revenues 2011 - - IllProperty Ta;xes & T8..'\ Items - . State & Federal Aid o Sales and Franchise Tax - o Interest & Eaming:; .Departmental Income - .Fines, Licenses and Pennits .All Other - - General Fund Expenses 2011 [3 General government support - 0%> .Public safety - o Transportation - o Culture and Recreation - .Home and conUlllUlity serVIces . Employee benefits .Debt Senice o All Other - - 7 - - - MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2011, Cont'd. (Un-audited) - - HIGHW A Y FUND - The Highway Fund ended the year with $578,707 in Fund Balance, of which $338,585 is non-spendable, $2,265 is restricted, and $237,857 is assigned. - The following charts describe the significant categories of Highway Fund revenues and expenses: Highway Fund Revenues 2011 - 0% - c Property Taxes - ... .Sales Tax ... o State & Federal Aid oOther Revenue ... - Highway Fund Expenses 2011 eStreet Maintenance - .Permanent Road Improvements - DSnow Removal DOther .- .Machlnery Purchase and Maintenance - .Employee Benefits _Debt Service - 2% 8 - - - MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2011, Cont'd. (Un-audited) - - WATER FUND - The Town operated four \vater districts during 2011 vvith an overall Fund Balance of $1,379,607. Operating revenues totaled $1,767,878 with the expenses totaling $1,757,189 resulting in an excess of revenues over expenditures in the amount of $10,689. The modest surplus is the result of managemenfs determination to keep spending as close as possible to the budget. - SE\VER FUND - - The TO\vn operated nine Sewer Districts during 2011. with an overall fund balance of $773,478, the main sewer district being the United Wappinger Sewer District, with a fund balance of $706,631 Operating revenues for the nine sewer districts totaled $4,128,521 with the expenses totaling $4,049,337 resulting in an excess of revenues over expenditures in the amount of $79,184. The excess is the result of controlling spending amidst rising costs. - BUDGET ARY HIGHLIGHTS - The TO\\n Budget is adopted in Novcmber for the following year and is moditied throughout the year as necessary. Variances in budgetary revenues and expenditures have been explained in the paragraphs above. - 3. Activities regarding capital assets, long and short term debt ,a - The Town spent approximately $1.6 million dollars on eight capital projects in 2011. The top seven projects were: Cider Mill Loop Water Tank Rehabilitation, Highvvay Emergency Generator. computer software upgrades in the code enforcement department, higlnvay equipment, recreation equipment, co-funding of the Tri-Municipal wastevvater treatment plant construction, and the construction and installation of handicapped accessible baseball/softball (challenger) field project. The expenditures for these projects accounted for ninety-nine percent (99%) ofthc total capital expenditures. - - The highway emergency generator project and the computer software upgrades were completed in 2011. Phase I of the handicapped accessible baseball/softball field project was completed in 2012, as well as the purchase of the highway and recreation equipment. Phase II of the handicapped baseball field project involving the construction of the parking space, dug outs, and bathrooms has commenced and is expected to be completed by the spring of 2013. - - - 9 - - - MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31, 2011, Cont'd. (Un-audited) - - 3. Activities regarding capital assets, long and short term debt (Continued) - The main project of the Town in 2011 was the Cider Mill Loop Water Storage Tank, which involved the demolition and replacement of the existing 1,000,000 gallon steel water tank with a new 1,1 00,000 gallon glass lined vvater tank at a cost of approximately $940,000 in contract price and inspections. - Long Term Debt - The Town has maintained a rating of A 1 since May 2011 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 2011 was $25,191,000. Of this debt. $4,768,542 belongs to the General Fund and $2,935,828 to Highway Fund. The majority of the Town's debt relates to its water and sewer districts amounting to $8,037,200 and $9,449,430, respectively. Water and sewer debt is paid by the property owners in the respective districts. Bond Anticipation Notes outstanding of $75,000 is also considered long term because it \vas re-tinanced. - - - The 10wn issued a bond of $316,000 ill June 2011 towards the cost of the construction at the Tri-Municipal Wastewater Treatment Plant. 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 $115,000 over ten years. In the same month, the Tovvn issued a series of Bond Anticipation Notes amounting to a total of $1.018375 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). In October 20 11, the Town issued a Bond Anticipation Note of $250,000 towards paving of various roads within the Town. ... - Short Term Debt - The Town had three Bond Anticipation Notes (BANs) outstanding of $1,921,375 as of December 31, 2011 funding various projects within the Town. These BANs were renevved on March 29, 2012 for $1,663,375 at an interest rate of 1.5% per annum and is payable in full at maturity on March 29, 2013. Please review the notes to the tinancial statements for further infonnation regarding this debt. - - - - 10 - - - - MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2011, Cont'd. (Un-audited) - 4. Currently Known Facts Bearing on the Future - The Town pm1icipated in the Southern Dutchess Consortium for the 2007 revaluation of propel1y assessments. The 2007 revaluation successfully brought all property assessments to full valuation and provided equitable tax distribution among all homeowners within the tovvn, county and shared school districts. This revaluation went into effect for the 2008 tax levy. The Town has continued with the revaluation process for the 2008, 2009, 2010, 2011 and 2012 assessment years. - - The Town is also involved in a shared service agreement \vith the Town of Fishkill for a Joint Assessor. This program is known as the Coordinated Assessment Program or CAP. The CAP has and will continue to deliver cost savings to the Town. - The Town is current \-vith all tax certiorari cases to those filed in 201 L thereby limiting unexpected retroactive exposures. - - The assessment roll established in 20 II for 2012 taxes resulted in homestead assessments decreasing by an average of 5.17%. However, overall, the proportion of non-homestead to homestead assessments changed by approximately 5%. Non-homestead assessments for 20 II are 41 % of the total and homestead assessments are 59%, instead of 39% and 61 % in 20 I 0, representing a shift in the tax burden avvay from homeowners to commercial properties. The Town adopted an increased tax levy of 1.97% for 2012 from the 2011 levy. - - The Town continues its use of an in-house payroll system as well as improved sothvare for the code enforcement department - The Town has experienced (commercial) economic development along the Route 9 corridor including Adams Fairacre Farms, STS Tire (formerly vacant), Aroma Ostoria, DCH Toyota and Friendly Mercedes. There are more than ten commercial projects in the planning stages, including a proposed $80 million senior care t~lcility along the Route 90 corridor. The Town has commissioned a water and sewer services extension study on Route 9 to keep pace with these economic development/improvements. Developers have also approached the Town about a possible development of senior citizen housing. These efforts are hoped \vill improve the supply and quality of the water to the area. - - - - - II - - - MANAGEMENT'S DISCUSSION AND ANALYSIS Required Supplemental Information For the Year Ended December 31,2011, Cont'd. (Un-audited) - - 4. Currently Known Facts Bearing on the Future, (Continued) - The Town secured a three year CSEA contract for highway employees through 2012. Town Hall employees also secured a collective bargaining unit with the Teamsters in 2012. - During the 2012 budget deliberations, the Town Board set aside $155,000 in the General Fund for reduction of its indebtness to other Funds. This had a positive impact in the General Fund balance at the end of the year. - The TOViD Hall and Highway buildings have updated HV AC systems to more eflicient units with noted decreases in energy consumption. The Town upgraded and rebuilt the plumbing and septic systems at the Emergency Services building - - The Code Enforcement Otlice (building. fire, zoning and planning) transferred their 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 Tmvn continues its partnership with an external professional consultant to inspect and monitor underground storage tanks to ensure compliance vvith DEC standards and avoid fines. vvhich could eliminate an exposure in excess of $100.000 if non-compliance was determined at a Town facility during a site inspection. Due to this initiative, additional fuel tanks were discovered that needed replacement. Work on these will continue in 2012. - - The Town is currently considering bonding for a project to replace its entire t1eet of 2,500 water meters at a cost of approximately $750.000 due to potential problem of meter reading equipment failure. Meters are essential in recording water consumption. In the absence of these meters, every household/benefit unit would be billed a minimum. with potential for huge revenue loss to the Town. - - The Town has entered into an Agreement in Principle with the New York City Department of Environmental Protection to prepare design plans and specifications and a Map, Plan and Report for the United Wappinger Water District water main extension to the NYCDEP Shaft 6 parcel on River Road. - - - - 12 - - TOWN OF WAPPINGER, NEW YORK STA TEMENT OF NET ASSETS DECEMBER 31, 2011 - GOVERNMENTAL ACTIVITIES ASSETS - CUITent assets: Cash and cash equivalents Cash and cash equivalents, restricted Receivahles (net) Inventories Prepaid expenses - - Capital assets: Land Infrastructure. net of depreciation Buildings, machinery and equipment. net of depreciation Construction in progress Total capital assets $ 5,076.352 5.000 2.018.192 262,077 167.979 7.529,600 7,782.217 5.422.199 4.668.552 12.477.276 30.350,244 $ 37.879.844 Total current assets - - Total assets LIABILITIES - - Current Liahilities: Accounts Payahle Accrued liahilities and retainage payahle Notes payahle Overpayments Deferred revenue Due to other governments Current pOltion of long-term liahilities Landfill remediation liahility Bonds payahle - Capital Bonds payahle - Non-capital Total current liahilities - Non-current liahilities: Deferred revenues Judgment and claims Compensated ahsence liahilities Other postemployment henefits liahility Landfill remediation liahility Bonds payahle - Capital Bonds payahle - Non-capital Total non-current liahilities $ 1.454.386 527,507 1,846.375 22. 902 43.944 3 1. 697 9.256 953,842 1.572.158 6.462.067 34,646 80,000 230.704 1.790.532 245,051 15.323,720 7.341.280 25.045.933 31,508.000 12,226.307 391.795 (6,246.258) 6.371.844 $ 37.879.844 - - - - Total liabilities - - NET ASSETS Invested in Capital Assets, net of related deht Restricted for: Recreation Unrestricted Total net assets - Total liabilities and net assets - The accompanying Notes to the Financial Statements should he read in conjunction with these Financial Statements, 13 - FUNCTIONS/PROGRAMS Governmental Activities: General government support Puhlic safety Health Transportation Economic assistance & opportunity Culture and recreation Home and community services Interest on long-term deht Total governmental activities TOWN OF WAPPINGER, NEW YORK STATEMENT OF ACTIVITIES DECEMBER 31, 2011 - .. EXPENSES CHARGES FOR SERVICES OPERA TING GRANTS AND CONTRIBUTIONS - .. $ $ 24,37X $ 1 7,446 60 I ,8R2 3,410 44,777 101,893 3,127,730 1,792,945 599, I 04 401,IOR 3,424,846 10,614 1,1 R7,441 3,350,606 1,202,262 - - - 11,968,925 3,859,293 62,223 General revenues Taxes: Real property taxes Real property tax items Sales tax Mortgage tax Franchise taxes Unrestricted investment earnings Grants and contrihutions not restricted to specific programs Special item-Gain on sale of property and compensation for loss Miscellaneous Total general revenues, special items and transfers - - - - Change in net assets - Net assets - heginning - Net assets - ending - - .. ... The accompanying Notes to the Financial Statements should he read in conjunction with these Financial Statements. 14 .. - - - NET (EXPENSE) REVENUE AND CHANGES IN NET ASSETS - CAPIT AL GRANTS AND GOVERNMENT AL CONTRIBUTIONS ACTIVITIES - $ $ (1,751,121) 2,778 - (397,698) 156,210 (3,223,859) (10,614) - 65,000 (1,020,548 ) (222,876) ( I ,202,2(2) - 221,210 (7,826,199) - 7,579,153 - 79,948 1,562,405 460,458 - 433,048 442,797 209,409 - 14,405 82,724 10,864,347 - 3,038,147 3,333,697 - $ 6,371,844 - - - - - 15 - - TOWN OF WAPPINGER, NEW YORK BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31. 2011 - GENERAL GENERAL TOWN-WIDE PART-TOWN HIGHW A Y WATER - FUND FUND FUND FUND ASSETS Cash and cash equivalents $ 742,594 $ 663,050 $ 19,276 $ 992,OOX - Cash and cash equi valents, restricted Receivahles: Charges for services 368,315 - Other 59,646 IIX,927 Due from other funds 161,323 188,655 133,450 133,069 Due from other governments 31,272 234,414 207,303 - State and federal receivahle 119,000 153,060 Inventory, at cost 262,077 Prepaid expenses 67,137 22,895 76,50X 1,439 - Total assets $ 1,180,972 $ ] ,227,941 $ 851,674 $ 1,494,X31 - LIABILITIES AND FUND EQUITY LIABILITIES - Accounts payahle $ 2XX,613 $ 109,253 $ 223,631 $ 79,523 Accrued liabilities 1,467 Il,H\2 Retainage payable - Overpayments 22,902 Bond anticipation notes payahle Due to other funds 705,991 27,14X 3X,000 3,076 Due to other governments 17,567 154 9,723 - Deferred revenues 43,944 Total liabilities 1,057,5X2 136,40 I 272,967 115,224 - FUND BALANCE fund balance (deficit): N onspendahlc: - Prepaids and inventory 67,137 22,X95 33X,5X5 1,439 Restricted: Deht service 164,050 - Capital outlay 2,265 Miscellaneous 402,900 Recreation 391,795 - Assigned 501,695 237,X57 1,378,16X Unassigned (335,542) Total fund balance 123,390 1,091,540 578,707 1,379,607 - Total liabilities and fund balance $ I, I XO,972 $ 1,227,941 $ 851,674 $ 1,494,831 - The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statcments. - 16 - - - CAPIT AL NON- TOTAL - SEWER PROJECTS MAJOR GOVERNMENT AL FUND FUND FUNDS FUNDS - $ 363,400 $ 2,212,666 $ 83,358 $ 5,076,352 5,000 5,000 - 726,026 1,094,341 229 178,802 232,522 120,608 969,627 - 472,989 272,060 262,077 - 167,979 $ 1,089,426 $ 2,450,417 $ 203,966 $ 8,499,227 - - $ 305.677 $ 444,108 $ 3,581 $ 1,454,386 12,649 - 54,956 10,238 65,194 22,902 1,846,375 1,846,375 - 6,018 73,244 116,150 969,627 4.253 31,697 43,944 315,948 2,418,683 129,969 4,446,774 - - 430,056 - 164,050 409,078 411,343 402,YOO - 3Y 1,795 773,478 73,997 2,965,195 (377,344) (712,886 ) - 773,478 31,734 73,YY7 4,052,453 - $ 1,089,426 $ 2,450,417 $ 203,966 $ 8,499,227 - 17 - - - TOWN OF WAPPINGER, NEW YORK RECONCILIA TION OF GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS DECEMBER 31, 2011 - - Total fund equity for governmental funds $ 4,052,453 - 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. 30,350,244 - 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. (27 ,546,543) - Grants received for capital assets are deferred and amortized over the life of the asset. (34,646 ) - Accrued interest is not reported in the funds. (449,664) Total net assets of governmental acti vities $ 6,371,845 - - - - - - - - The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. 18 - - TOWN OF WAPPINGER, NEW YORK STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS DECEMBER 31, 20Il - GENERAL GENERAL TOWN-WIDE PART-TOWN HIGHWAY WATER FUND FUND FUND FUND - REVENUES Real property taxes $ 2,420.765 $ $ 2.077.5RO $ 723.102 Real property taxes items 79.R96 - Non property taxes items 1.203.553 525.000 Departmental income 103,S54 159.010 1,m5.002 Intergovernmental charges Use of money and property 222.R II R46 1,092 R.7IR - Licenses and permits lJ.270 2R2.520 Fines and forfeitures 272.247 Sale of property and compensation for loss 11,437 1.912 1.056 .- Miscellaneous local sources 91.154 3.927 5.958 State aid 744.R04 153.060 Federal aid 44.777 Total revenues 3.955.93R 1.651.768 2.R07,467 1.767.878 - EXPENDITURES General government support 1.532.32R 216,49R 63.509 1.130 .. Puhlic safety 37.192 364.RO I Health 3,432 Transportation 14X.56lJ 34,416 1.603.603 Economic assistance & opportunity 600 10.014 - Culture and recreation 70~.372 112.R 12 Home and community services 277.nO 170,421 1.03 U 13 Employee henefits 622,411 169.907 576,44lJ 5.350 .- Deht service 52UM 317.078 2R7.172 719.396 Total expenditures 3.R46.729 1.3lJ5.947 2.530.n3 1.757.18lJ Excess of revenues over expenditures I09.20lJ 255.R21 276.n4 10.6R9 - Other financing sources: Proceeds of deht - BANs redeemed from appropriations Operating transfers in 190.000 Operating transfers out ( 190,0(0) Refunding deht escrow payment - Total other financing sources ( 190,(00) 190.000 Excess (deficiency) of revenue and other sources over expenditures and other uses 109.209 65.R21 466. n4 10.6X9 - Fund Balance, December 31,2010 14.IRI 1.025.719 1I1.9n U6X.918 - Fund Balance, December 31, 2011 $ 123,190 $ 1,091.540 $ 578,707 $ 1.17lJ.607 .. - - The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements. 19 - - - CAPIT AL NON- - SEWER PROJECTS MAJOR TOTAL FUND FUND FUNDS FUNDS $ 1,916,42(, $ $ 441,2RO $ 7,579,153 - 52 79,94R !,728,553 1,992,7R2 209,409 3.499,757 945 945 - 207,305 6,723 210 447,705 12,000 303,790 272,247 - 14,405 R 33.732 134,779 R97,R64 44,7 77 - 4,12R,521 40,455 651,896 15,003,923 - 120 225,630 2,039,215 401,993 195,000 39R,432 624,149 4.1,729 2,454,466 - 10,614 R7,J 92 903.176 1 ,977 ,249 591,561 214,593 4,264,867 - 2,6R7 1,376,R04 2,069,2R 1 3,914,Cl22 4,049,337 1,530,512 653,322 15,763,789 - 79,IR4 ( 1 ,490,(77) (1,426) (759,R66) - 1,576,000 1,576,000 10,000 30,000 62,000 592.690 R44,690 ( 654,6(0) (R44,690) - (L247,501) (L247,501) 62,000 296,499 358,499 - 14 LI 84 (LI 93,57R) (1,426) (401,167) 612.294 1,225,312 75,423 4,453,820 - $ 7n47R $ 3 !,714 $ 71.997 $ 4,Cl52,453 - - - - 20 - - TOWN OF WAPPINGER, NEW YORK RECONCILIA TION OF STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES DECEMBER 31,2011 - Net change in fund balance - total government funds - The change in net assets reported for governmental activities in the statement of activities is different because: - - Governmental funds report all capital outlays as expenditures. However, in the statement of activities, the cost of certain assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation expense in the current period. - - 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 contrihute to the change in fund halance. In the statement of net assets, however, issuing deht increases long-term liahilities and does not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds hut reduces the liahility in the statement of net assets. - - Deht issued: Bonds payahle issued Less: non-cash refunding issue Bond anticipation notes redeemed Repayments: Bond anticipation note principal Bond principal ( I ,576,0(0) 1,260,000 ( 30,(00) - 30,000 2,725,000 - - In the statement of activities, interest is accrued on outstanding honds, whereas in governmental funds, an interest expenditure is reported when due. This amount represents the change hetween what was paid and what was accrued through 20 II. - .. Some expenses reported in the statement of activities, such as compensated ahsences, landfillliahilities and postemployment henefits do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. This amount represents the change hetween what was paid and what was accrued through 2011 . - Net change in net assets of governmental activities - The accompanying Notes to the Financial Statements should he read in conjunction with these Financial Statements. - $ (401,367) 1,574,190 3,150 2,409,000 (55,740) (491,086) $ 3,038,147 21 - TOWN OF WAPPINGER, NEW YORK ST A TEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUND DECEMBER 31, 2011 - - - ASSETS - Cash and cash equivalents Total assets - LIABILITIES - Escrow funds retumable and other liabilities - Total liabilities - NET ASSETS Total liabilities and net assets - - - - - - - - AGENCY FUNDS $ 408,421 $ 408,421 $ 408,421 408,421 $ 408,421 - The accompanying Notes to the Financial Statements should be read in conjunction with these Financial Statements - 22 - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2011 - NOTE A - Summary of Significant Accounting Policies - The Town of Wappinger, New York ("the Town") was incorporated on May 20, 1875, under the provisions of the State of New York. The Town operates under a Town Board form of government, consisting of a Supervisor and four Councilmen/women. The Supervisor serves as the Chief Executive Officer and as the Chief Fiscal Officer of the Town. - The Town provides the following services: highway maintenance, water, sewer, planning, zoning, building and safety inspection, lighting, and culture and recreation. - The Town's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America as applied to governmental units (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements (Statements and Interpretations). The Town is also required to follow the pronouncements of the Financial Accounting Standards Board (FASB) issued through November 30, 1989 (when applicable) that do not conflict with or contradict GASB pronouncements, .in preparing its government-wide financial statements. The more significant accounting policies established by GAAP and used by the Town in preparing its government-wide and fund financial statements are discussed below. - - - 1. The Reporting 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 respecti ve governing board. Under these criteria, no other entities are included in the Town's financial statements. - 2. Basic Financial Statements - Government-Wide Statements - - The Town's basic financial statements include both government-wide (reporting the Town as a whole) and fund financial statements (reporting the Town's major funds). Both the government-wide and fund financial statements categorize primary activities as either governmental or business type activities. The Town's parks and recreation, public works, and general administrative services are classified as governmental activities. The Town's water services are also classified as governmental activities since user fees are not intended to cover all costs including depreciation. - - 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. - - - 23 - .. - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2011 - NOTE A - Summary of Shwificant Accounting Policies (Cont'd) 2. Basic .Financial Statements - Government-Wide Statements (Cont'd) - The government-wide Statement of Activities reports both the gross and net cost of each of the Town's functions or activities. The functions are also supported by general government revenues (property and sales taxes, certain intergovernmental revenues, fines, permits and charges, etc.). The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants. Program revenues must be directly associated with the function (public works, community and youth services, etc.). Operating grants include operating-specific and discretionary (either operating or capital) grants while the capital grants column reflects capital-specific grants. .. .. - - The net costs are normally covered by general revenue (property, sales or mortgage taxes, intergovernmental revenues, interest income, etc). This government-wide focus is more on the sustainability of the Town as an entity and the change in the Town's net assets resulting from the current year's activities. - 3. Basic Financial Statements - Fund Financial Statements - The financial transactions of the Town are reported in individual funds in the fund financial statements. Each fund is accounted for by providing a separate set of self- balancing accounts that comprises its assets, liabilities, reserves, fund equity, revenues and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the Town or meets the following criteria: - - - a. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental fund are at least 10 percent of the corresponding total for all funds of that category or type; and .. b. Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined. .. The following fund types are used by the Town: A. Governmental Funds - The focus of the governmental funds' measurement (in the fund statements) is upon determination of financial position and changes in financial position (sources, uses, and balances of financial resources) rather than upon net income. - - 24 - .. - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31, 2011 - NOTE A - Summary of Significant Accounting Policies (Cont'd) 3. Basic Financial Statements - Fund Financial Statements (Cont'd) - The following is a description of the governmental funds of the Town: - I. General Fund - Town-wide 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 separatel y. - 2. - 3. - 4. - General Fund - Part-Town is used to record revenues and expenditures related to services provided to residents living outside the Village of Wappingers Falls, such as police protection, planning and zoning services. The General Fund - Part-Town is considered a major fund and is presented separately. 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. - 5. 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. - - 6. 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. - - 7. 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. 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. - 25 - - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31, 2011 - NOTE A - Summary of Si2nificant Accountin2 Policies (Cont'd) 4. Basis of Accountin2 - - Basis of accounting refers to the point at which revenues or expenditures/expenses are recognized in the accounts and reported in the financial statements. It relates to the timing of the measurements made regardless of the measurement focus applied. A. Accrual - 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. - - 5. f'inancial 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, 2011, are as follows: .. GENERAL mGHWAY WATER SEWER FUNDS FUND FUND FUND - Accounts Receivahle '5 In.573 '5 '5 '5 Rents Receivahle :16X.3l5 726.026 TOTAIB $ 178,573 $ $ 368,315 $ 726,026 - CAPITAL PROJECTS FlIND NON MAJOR FUNDS TOTAL '5 In,X02 1.094.34 I $ 1,273,143 '5 229 '5 $ 229 $ 26 - - - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31, 2011 NOTE A - Summary of Significant Accounting Policies (Cont'd) - 5. Financial Statement Amounts (Cont'd) A. Cash and Investments (Cont'd) - - 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. - - B. Inventories - Inventories consist of significant expendable supplies primarily sand and road salt and are carried at cost. - C. Capital Assets - Capital assets purchased or acquired with an original cost of $500 or more are reported at historical cost or estimated historical cost. Contributed assets are reported at fair market value as of the date received. Additions, improvements and other capital outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. Depreciation on all assets is provided on the straight-line basis over the following estimated useful lives: - - Buildings Infrastructure - Water & Sewer Infrastructure - Roads Machinery and equipment Improvements 15-40 years 40 years 15 years 5-15 years 10-30 years - - GASB Statement No. 34 requires the Town to report and depreciate new infrastructure assets effective with the beginning of 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. - - - 27 - - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31, 2011 - NOTE A - Summary of Si2nificant Accountin2 Policies (Cont'd) - 5. Financial Statement Amounts (Cont'd) D. Fund Balance Classifications - In 2011, the Townjmplemented Governmental Accounting Standards Board Statement No. 54, Fund Balance Reporting and Govenzmental Fund Type Definitions (GASB 54). GASB 54 changed the classification of fund balance to focus on the constraints imposed on resources in governmental funds, instead of the previous focus on availability for appropriation and clarified definitions of special revenue funds. - - Fund balance is now broken down into five different classifications: non-spendable, restricted, committed, assigned, and unassigned. - Non-spendable consists of assets that are inherently nonspendable in the current period either because of their form or because they must be maintained intact, including prepaid items, inventories, long-term portions of loans receivable, financial assets held for resale, and principal of endowments. - - Restricted consists of amounts that are subject to external! y enforceable legal purpose restrictions imposed by creditors, grantors, contributors, or laws and regulations of other governments; or through constitutional provisions or enabling legislation. - Committed consists of amounts that are subject to a purpose constraint imposed by a formal action of the government's highest level of decision-making authority before the end of the fiscal year, and that require the same level of formal action to remove the constraint. The Board is the decision-making authority that can, prior to the end of the fiscal year, commit fund balance. - - Assigned consists of amounts that are subject to a purpose constraint that represents an intended use established by the government's highest level of decision-making authority, or by their designated body or official. The purpose of the assignment must be narrower than the purpose of the general fund, and in funds other than the general fund, assigned fund balance represents the residual amount of fund balance. - - Unassigned represents the residual classification for the government's general fund, and could report a surplus or deficit. In funds other than the general fund, the unassigned classification should be used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned. - When resources are available from multiple classifications, the Town spends funds in the following order: restricted, committed, assigned, unassigned. - As a result of implementing GASB 54, the Town has separated the General Fund --Town- Wide and General Fund - Part-Town, reporting both as major funds. - 28 - - - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2011 - NOTE A - Summary of Significant Accounting Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) - D. Fund Balance Classifications. (Cont'd) :lIII The following details the allocations and amounts of fund balance following the implementation of GASB 54.: - BALANCEAT 12/31/11 - General Fund Nons pendahle: Prepaids and Inventory Restricted: Deht Service Miscellaneous Recreation: Total General Fund $ 90m2 - 164,050 402,9()() 391,795 1,048,777 - Highmty Fund Nonspendah1c: Prepaids and Inventory 119,980 119,980 .. - Water Fund Nons pendah1c: Pn:paids and Inventory 1,439 1,439 - TOTAL $ 1,170,196 - The Town also has $391,795 of unassigned 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 reclassified to the General Fund and restricted. - - - - 29 - .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31, 2011 - NOTE A - Summary of Si2nificant Accountin2 Policies (Cont'd) - 5. Financial Statement Amounts (Cont'd) E. 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: - - - I. 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, 2011, in the amount of $230,704. 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. .. - F. 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. - - G. 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. 30 - - - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2011 NOTE A - Summary of Significant Accounting Policies (Cont'd) - 5. Financial Statement Amounts (Cont'd) _ H. 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. - 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: - 2011 2010 2009 ERS $ 323,973 $ 248,337 $ 191,926 - - The Town's contributions made to the Systems were equal to or in excess of 100 percent of the contributions required for each year. - - - 31 - - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2011 - NOTE A - Summary of Significant Accounting Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) - I. 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, 2011 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. For the year ended 20 II, the Town prepared a valuation. For the year ended 2010, the Town used the valuation prepared for 2009, as allowed under GASB No. 45. - - - - - 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: - - - % 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% - - - Funding 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. - 32 - - - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2011 NOTE A - Summary of Sh?:nificant Accounting Policies (Cont'd) - 5. Financial Statement Amounts (Cont'd) - I. Other Post-Employment Benefits (Cont'd) Annual Other Postemployment Benefit Cost - The Town's OPEB cost (expense) amounted to $508,406 for the year ended December 3], 20 II. 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 Actives Fully Eligible Actives Not Fully Eligible Total Actuarial Accrued Liability $ - $ - Past Service Costs Normal Costs Annual Required Contribution (ARC) $ 190,733 387,168 577,901 .. $ - Net OPEB Obligation - beginning of the year Annual 0 PEB cost Actual Employer Contributions* Net OPEB Obigation - end of the year $ ] ,282, 126 562,239 (53,833 ) 1,790,532 - $ Percent of annual OPEB cost contributed 0.00% - *This contribution is the pay-as-you-go amount, as an actual plan has not been established, see Funding Policy. - - - 33 - - - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31, 2011 NOTE A - Summary of Sh?:nificant Accountin2 Policies (Cont'd) - 5. Financial Statement Amounts (Cont'd) - I. Other Post-Employment Benefits (Cont'd) 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, 20 II actuarial valuation, the liabilities were computed using the entry age actuarial cost method and level percentage of payroll amortization. The actuarial assumptions utilized a 2% baseline discount rate. The valuation assumes the following rates of increase in health care costs: - - - - Fiscal Prescription Year Medical Drug Dental Vision Year I 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% 3.00o/c, 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(70 - - - - - - Prescription Medical Drug Dental Vision - - Healthcare cost trend rate assun~d for next fiscal year 9.00% 9.00% 4.00% 3.00% Rate to which the cost trend rate is assurred 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 34 - - - - - TO\VN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31,2011 - NOTE A - Summary of Significant Accounting Policies (Cont'd) 5. Financial Statement Amounts (Cont'd) - J. 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 transfened 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. - - K. Long-Term Liabilities - Long- Teml Debt is recognized as a liability of a govemmental 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 govemmental fund. The remaining portion of such obligations is only reported in the statement of net assets, Long-Tenn Liabilities. - L. Risk Management - 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 incuned 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 rep0l1ed in areas where the Town is not insured. - - - M. Use of Estimates - The preparation of basic financial statements, in confol111ity 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 31,2011, consist of the following: CAPITAL NO""' GE:'\ ERAI. III GII WA Y WATER SEWER PRO./HTS ;\1A.10R Fl'ND FUN D Fl:ND FlIND FUN () FUN ()S TOTAL - ACCOLillts Rccclvab Ie 178,573 $ $ $ $ 229 $ $ 178.802 35 Rents Receivable 368,3 15 726,026 1,094,341 TOTALS $ 178,573 $ $ 368,315 $ 726,026 $ 229 $ $ 1,273,143 - - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31, 2011 - 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, 2011. 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. - - - FUND General - Town-Wide General- Part-Town Highway Water Sewer Capital Projects Non-Major TOTALS - - - - FUND General- Part-Town Highway Sewer Capital Projects Non-Major TOTALS - - - NOTE D - Capital Assets AMOUNT RECEIVABLE $ 161,323 188,655 133,450 133,069 232,522 120,608 $ 969,627 TRANSFERS IN $ 190,000 62,000 592,690 $ 844,690 AMOUNT PAYABLE $ 705,991 27,148 38,000 3,076 6,018 73,244 116,150 $ 969,627 TRANSFERS OUT $ 190,000 654,690 $ 844,690 - The following is a summary of changes and adjustments in the Capital Assets, for the year ended December 31,2011: - Land Huildings Improven"Cnts Other Than Buildings Roads In fras tructure Machinery and Equipn"Cnt Construction in Progress Total - - BALANCE JANUARY I, 2011 $ 7,782.2\7 5.988.120 \.015.496 ],966,731 ],150.464 4,890.789 10,74-'.O()0 ]7.5]6,817 ADDfl10NS $ 22-'.647 BALANCE DF1:El\1BFR 31, (DL"POSALS) 2011 $ $ 7,782.217 5.988,120 1.015.496 4.190.-'78 -'.150.464 5.-'50,880 (1.067) 12.477,276 (l.067) ]9,954.8] 1 460.091 1.735.-'4] 2.419,081 - - 36 - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2011 - NOTE D - Capital Assets (Cont'd) - BALANCE JANUARY 1, 2011 ADDfIl0NS (Dl"lPOSAU,j BALANCE DECFMBER31, 2011 - Less accumulated depreciation Buildings Improven~nts Other Than Buildings Roads Infrastructure Machinery and Equipn~nt Total accumulated depreciation Governmental acti~ties capital assets, net 2.766,184 617,031 1,084,033 476,489 3,817,()26 8,760,763 190,623 12.345 279,359 78.762 282,735 843,824 2,956.807 629,376 1,363.392 555,25 I 4,099,761 9,604,587 - $ 28,776,054 $ 1,575,257 $ ( 1,0(7) $ 30,350,244 - - "Depreciation was charged to govemrrental activities as follows: ~neral govemment suppOI1 S 97,453 Public safety 48,850 Transpol1ation 560,911 Culture and recreation 11.',.557 Hon~ and community services 23,053 Total depreciation expense $ 843,824 - NOTE E - Bond Anticipation Notes Pavable - - 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. - The Bond Anticipation Note financing the lawsuit settlement met the criteria for classification as long-term, the Town having the intention to pay the settlement through the use of bond anticipation notes, and having renewed the note post-balance sheet in prior years. - - The Bond Anticipation Notes outstanding as of December 31, 20 II, are as follows: AMOlINT olrrsTANDING AT m:Cl<J\m I<.R 31, 2011 PURPOSE ORIGINAL L~SlJE DATE MATURelY DATE INl'1<1llilT RATE ORIGINAL AMmJNT OFL~SUE - - Various Equipment 07/28/11 03/30/12 I.IY7< $ 1,018,375 $ 1.018,375 Revaluation, Boilers, & Highway 04/01/10 03/30/12 0.89'7< 490,(XXl 460,(XX] Highway Paving 10/20/11 03/30/12 1.09'7< 250,(XXl 250,(XX) Computer Software 03/21/11 03/30/12 0.89'X 33,(XX) lHXX) Camwath Farms 12115/1 0 03/30/12 0.89'7< 85,(XX) 85,<XX) Short-Term Bond Anticipation Notes Subtotal 1,876,375 1.846,375 Long-Term Bond Anticipation Notes Lawsuit Settlement 12/02/07 03/30/12 O.89'X 225,(XX) 75,(XX) Total - Bond Anticipation Notes $ 2,101,375 $ 1,921,375 37 - - - - .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31. 2011 .. NOTE E - Bond Anticipation Notes Pavable (Cont'd) Changes in Bond Anticipation Notes Payable as of December 31, 20 II, are as follows: BALANCE BALANCE J ANlJARY I, NEW IU::"FINANCE/ DECl<MBER 31, PtJRPOSE 2011 l"'StJJ<5 PAYMI<JIITS 2011 - - Various Equipmcnt Revaluation, Boilers, & Highway Highway Paving Computer Software Carnwath Fanlls Lawsuit Scttlement - .. NOTE F - Long-Term Liabilities - 1. Serial Bonds - - PURPOSE - Scwer - Tli-Municipal Scwcr - Tn-Municipal Scwer - Tn-Municipal Sewcr - Tn-Municipal Watcr - Fleetwood Sev.er - Home & Community Services (keystone Propcrty Purchasc (Refunding) Emcrgcncy Services Building .. .. .. Water Scwcr Lighting CCneral .. WaterlSewer Highway - (cneral Highway Home & Community Services - TOTAIB .. - TOTAL"! $ ORIGINAL L"'S IJE DATE 11/12/92 03114/02 11/26/02 0610 I 195 07 /J0/9K 06/021 II 06/021 II 06/01195 02/25/03 08/01/07 04/02/0lJ s $ LOIS,:m $ 490,(XXl 460,000 250,00:) 33,000 85,Om 150,()(x) 75.tXXJ 725,(XXJ $ 1,836.375 $ (I 50,(XXJ) (64tJ,(X)()) S Fh"llAL MA T{JRffV INTHU}olT 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 31,2011, are as follows: AMOUNT OUrSTANIlING AT DECl<MBER31, 2011 DA 11~ RATE 0911 5112 5.80'Jr -6.65'h $ 04/15121 1.21 'h A.9K'X 05/15115 3.1K'1c -'i.99'X 11/15/15 3.70'k -'i.5Yk lOll 51 18 3.70'X -5.IYh 04/01/21 2.75'X -3.'i0'h 10/01/20 2.(X)'h -3.'iO'X 11/I'i1l5 3.7tY!.' -5.'i5'.1r 03/01/23 4.00'/; A.5lYh 08/01/27 4.fXYJr -5.<x)7< 04/01122 2.(X)'7, -5.007< (490,t)()()) ORIGINAL AMOUNT OF L"'SUE 6,060,om $ 9,836.556 8,519,786 2,610,054 510,tXXl 316,(XXl 1.260,eXXl 1.275,eXXl 564,(XXl 905,(XXl 785,tXXJ 2.254,OOJ 662,4eX) 8,674JtX) 2,243JeXl 11.580,eXX) 1,070,tXXl 1.074,00) 1.2 I 8,(xx) 3J62,OOO $ 47.583J96 s 1.018,375 460,()()() 250,Om 33,000 X'i,Om 7\OtXJ 1.92 \,375 375,eXX) 5J80,(XXl 1,860'(XXl 650.m0 nO,tXXl 316,(XX) 1.240,(XXl 350,tXXl 404,107 648,4 38 562,455 1,615,()()() 577.848 7,633,085 1.979,067 IO,190,tXXl 953,197 956.761 I,085,(J42 2,995,tXX) $ 25,191,tXXl 38 - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31, 2011 - NOTE F - Lon2- Term Liabilities (Cont'd) 2. Chan2es - The changes in the Town's indebtedness during the year ended December 31, 2011, are summarized as follows: - BALANCE BALANCE AMOllNTS J ANtJARY I, DECFMBER31, DUE WlTl-DN 2011 INCRFASE (DECRFASEl 2011 ONEYFAR Serial Bonds Note F.I $ 27,450.000 $ 1.576JXXl $ (3Jm,CXlOl $ 25.19l,(XXl $ 2.526.0(){) Compensated Absences Note A.5'o ] 98.805 31.899 nO.704 Landfill Closure and Post Pos t Cos ts Note J 289.244 (34.937) 254.307 I 1.181 Jlldgem,~nt & Claims Note 1.1 80,CXXl 80JXXl TOTALS $ 28.018.049 $ 1.607.899 $ (3.869.937) $ 25.756.011 $ 2.537.183 - - - - 3. Debt Service Requirements - The annual requirements to amortize bonded debt, as of December 31, 2011, are as follows: - YEAR f1\lDING mrEJ\m ER 31, PRINCIPAL INTERE'! T 2012 $ 2,526,(Xl0 $ 1,063,443 2013 2.225,txlO 948,975 2014 2,3 15,Om 850,938 2015 1,905.000 756.241 2016 1,560,000 677,872 2017-2021 8,5(Xl,000 2.291,165 2022-2026 3,880,000 925,503 2027-203 I 2,280,(XXl 196,352 TOT AL..~ $ 25,191,000 $ 7,710,488 $ TOTAL 3,589,443 3,173,975 3.165.938 2,661,241 2,237,872 10,79],165 4,805,503 2,476,352 32,901,488 - - - $ - 4. Advance Refundin2 of Debt - In June 2011, the Town issued $1,260,000 in General Obligation Bonds with an average interest rate of 2.79 percent to advance refund $1,215,000 of outstanding 2000 Series bonds with an average rate of 5.46 percent. The net proceeds of $1 ,293,732 (including bond premium of $33,732 and less payment of $46,231 in underwriting fees and other issuance costs) were used to purchase U.S. Government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for future debt service payments on the 2000 Series bonds. As a result, the 2000 Series bonds are considered to - - 39 - .. .. TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31, 2011 NOTE F - Long-Term Liabilities (Cont'd) .. be defeased and the liability for the bonds has been removed from the Town's accounts. In October 2011, the 2000 Series bonds were called and paid from the escrow funds. .. .. The Town advance refunded the 2000 Series Bonds to reduce its total debt service payments over the next 10 years by $] 26,380 and to obtain an economic gain (difference between the present values of the debt service payments on the old and new debt) of $] 15,260. NOTE G - Leases .. - The Town is committed under various leases for office equipment, communication equipment, and vehicles. For accounting purposes, these leases can be considered either operating or capital leases. Lease expenditures for the year ended December 31, 2011 amounted to $60,699. At December 31, 20] I, the approximate annual lease commitments, subject to appropriation of funds, were as follows: - YFAR ENDING DFX::EMBER. 31, 2012 2013 2014 2015 2016 OPERA TING Ui\SI!S $ 59.785 55.326 42.721 21,451 4,380 183.663 - .. .. Total minimum lease payments $ .. NOTE H - 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. .. 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 40 .. - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31, 2011 - NOTE H - Commitments and Contingent Liabilities (Cont'd) 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 $8,913,438. Debt service is provided by the residents of two sewer districts. - 3. Central Wappinger Water Improvement Area 99-2R - In February 200 I, 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 3 I, 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 $6,494,145. - The costs incurred on the project amounted to $8,840,347, as of December 31, 2011 . 4. Authorized Debt - As of December 31, 2011, 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,(X)O $ 1,430,000 Cenlral Wappinger Waler 02/12/01 8,5 90, (X)O I 00,000 Road Improverrcnl OS/27/03 3,3(X),OOO 1,220,(XXl Computer Hardware and Soft ware 03/12/03 550,mO 2(Xl,lXXl TOTALS $ 17,140,(XXl $ 2,950,000 NOTE I - 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 $70,768 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 2011. The future costs may be higher clue to inflation, changes in technology or subsequent changes in regulations. - - - 41 - - - TOWN OF WAPPINGER, NEW YORK NOTES TO THE FINANCIAL STATEMENTS (CONT'D) DECEMBER 31, 2011 NOTE I - Municipal Landfills (Cont'd) - 2. Pou2hkeepsie-Wappin2ers-LaGran2e 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 31,20 II, amounted to $6,760. - ... The following is a summary of unaudited financial information at December 31, 2011, 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 $ 98,098 Total Liabilities $ - Total Venture Equity $ 98,098 Total Revenues $ 18 Total Expenditures $ 26,752 ... - 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, 20 II is $1,085,042. Post closure and monitoring costs, which commenced in 2007 and continue for 30 years, are estimated to amount to $1,263,800, with the Town's share being $179,116. - ... ... - ... - - - 42 - - EXHIBIT I TOWN OF WAPPINGER, NEW YORK BUDGETARY COMPARISON SCHEDULE - DECEMBER 31. 2011 GENERAL FUND - TOWN-WIDE - VARIANCE ORIGINAL FINAL FAVORABLE BUDGET BUDGET ACTUAL (UNFAVORABLE) REVENUES - $ $ Real property taxes 2,420,765 2,420,765 $ 2,420,765 $ Real property tax items 70,500 70,500 79,896 9,396 Non property tax items - Departmental income 206,300 207,950 103,554 ( 104,396) Intergovernmental chargcs Use of moncy and property 202,000 202,000 222,811 20,811 - Licenses and permits 5,600 5,600 9,270 3,670 Fines and forfeitures 285,500 285,500 272,247 ( 13,253) Sale of propcrty and compensation for loss 1\,437 11,437 Miscellaneous local sources 9L154 9 L154 - State aid 869,323 89(U02 744,804 ( 145,498) Federal aid - Total revenues 4,059,988 4,082,617 3,955,938 ( 126,679) Appropriation of prior year's fund nalance Total revenues and appropriation of prior year's fund balance 4,059,988 4,082,617 3,955,938 (126,679) - EXPENDITURES AND ENCUMBRANCES - General Government Support 2,082,228 2,103.207 1,532,328 570,879 Punlic safety 30,632 30,632 37,192 (6,560) Health 3,000 3,000 3,432 (412) Transportation 14 \,825 14\,825 148,569 (6,744) - Economic assistance & opportunity 600 (600) Culture and recreation 442,456 444,106 703,372 (259,266) Home and community service 221,500 221,500 277,730 (56,230) - Employee nenefits 612,963 612,963 622,411 (9,448) Dent service 525,384 525,384 521,095 4,289 Total expenditures and encumbrances 4,()59,988 4,082,617 3,846,729 235,888 - Excess (deficiency) of revenues and appropriation of prior year's fund balance over (under) - expenditures and encumbrances 109,209 109,209 Other financing sources (uses) - Operating transfers in Operating transfers out Total other financing sources - Excess (deficiency) of revenues and appropriation of prior year's fund balance and other sources - over (under) expenditures, encumbrances $ $ $ 109,209 $ 109,209 - See independent auditors' report. 43 - - - GENERAL FUND - PART-TOWN .. VARIANCE ORIGINAL FINAL FA VORABLE BUDGET BUDGET ACTUAL UNFAVORABLE REVENUES - Real property taxes $ $ $ $ Real property tax items Non property tax items 1.019,53 I l,() 19,531 1,203,553 184,C)22 .. Departmental income 168,147 168,\47 ]59,010 (9,137) Intergovernmental charges Lise of money and property 500 500 846 346 .. Licenses and permits 200,000 200,000 282,520 82,520 Fines and forfeitures Sale of property and compensation for loss 1,912 1.912 Miscellaneous local sources 3,927 3.927 - State aid Federal aid .. Total revenues 1,388,17X 1,388,17X 1,65 L768 263.590 Appropriation of prior year's fund halance 170,250 ( 170,250) Total revenues and appropriation of prior year's fund balance 1,388,178 1,558,428 1,65 L768 93.340 - EXPENDITURES AND ENCUMBRANCES .. General Gowrnment Support 246,600 246,600 216,498 30.102 Puhlic safety 357,295 356,295 364,80 I (8.506) Health Transportati on 22,000 22,000 34,416 (12416) - Economic assistance & opportunity 24,000 24,000 10,014 IJ.986 Culture and recreation 110450 110450 112,812 (2.362 ) Home and community service 130,225 13 1,225 170,421 (39196) - Employee henefits 179,750 179,750 169,907 9.843 Deht service 317,858 317,858 317 ,07X 7X0 Total expenditures and encumbrances 1.388,178 1,388,17X 1.395,947 (7.769) .. Excess (deficiency) of revenues and appropriation of prior year's fund balance over (under) .. expenditures and encumbrances 255,821 85..571 Other financing sources (uses) .. Operating transfcrs in 19,750 ( 19750) Operating transfers out ( 190,000) (l90'c)00) Total other financing sources ( 170,250) ( 190,0(0) ( 19.750) .. Excess (deficiency) of revenues and appropriation of prior year's fund balance and other sources - over (under) expenditures, encumbrances $ $ ( 170,250) $ 65,821 $ 65,821 - See independent auditors' report. 44 - - .. HIGHWAY FUND .. VARIANCE ORIGINAL FINAL FA VORABLE BUDGET BUDGET ACTUAL (lJNFA VORABLE) REVENUES - Real property taxes $ 2.077,5RO $ 2.077,5RO $ 2.077,5RO $ Real property tax items Non property tax items 525.000 525.000 525.000 - Departmental income Intergovernmental charges 2.ROO 2.ROO (2.800) Use of money and property ROO 800 1,Cl92 292 .. Licenses and permits Fines and forfeitures Sale of property and compensation for loss Miscellaneous local sources 5.95R 5.958 - State aid 150.000 150.000 153.060 \060 Federal aid 44.777 44.777 - Total revenues 2.756.180 2.756.1 RO 2.R07.467 51,2R7 Appropriation of prior year's fund halance Total revenues and appropriation of prior year's fund balance 2.756.180 2.756.180 2.R07.467 51.287 - EXPENDITURES AND ENCUMBRANCES - General Government Support 119.400 5R.400 63,509 (5.109) Puhlic safety Health Transportation 1.775.420 2.026.420 1.603.603 422.817 - Economic assistance & opportunity Culture and recreation Home and community service - Employee henefits 573.500 573.500 576.449 (2.949) Deht service 2R7.860 287.860 2R7.172 688 Total expenditures and encumbrances 2.756.180 2.946.IRO 2.530.733 415.447 - Excess (deficiency) of revenues and appropriation of prior year's fund balance over (under) - expenditures and encumbrances ( 190,0(0) 276.734 466.734 Other financing sources (uses) .. Operating transfers in 190.000 190.000 Operating transfers out Total other financing sources 190.000 190.000 .. Excess (deficiency) of revenues and appropriation of prior year's fund balance and other sources - over (under) expenditures, encumbrances $ $ $ 466.734 $ 466.734 - See independent auditors' report. 45 - - - WATER FUND - VARIANCE ORIGINAL FINAL FAVORABLE BUDGET BUDGET ACTUAL (UNFAVORABLE) REVENUES - Real property taxes $ 723, 102 $ 723.102 $ 723.102 $ Real property tax items Non property tax items - Departmental income 1.014.687 1.014.687 1.035.002 20.315 Intergovernmental charges Use of money and propcrty 3.927 3.927 8.718 4.791 - Licenscs and permits Fines and forfeitures Sale of property and compensation for loss 1,056 1.056 Miscellancous local sources - State aid Fcderal aid - Total revenues 1.741.716 1.741.716 1.767.878 20.162 Appropriation of prior year's fund balance 3.000 3,000 (lOOO) Total revenues and appropriation of prior year's fund balance 1.744.716 1.744.716 1.767,878 23.162 - EXPENDITURES AND ENCUMBRANCES - Gencral Government Support 47.663 47.663 1.130 46,533 Public safety Health Transportation - Economic assistance & opportunity Culture and recreation Home and community service 962.537 962.537 1,03 U 13 (6,':.776) - Employee benefits 8.100 8.100 5.350 2.750 Debt service 726.416 726.416 719.396 7.020 Total expenditures and encumbrances 1.744.716 1.744.716 1.757.189 ( 12.473) - Excess (deficiency) of revenues and appropriation of prior year's fund balance over (under) - expenditures and encumbrances 10.689 10,689 Other financing sources (uses) - Operating transfers in Operating transfers out Total other tinancing sources - Excess (deficiency) of revenues and appropriation of prior year's fund balance and other sources - over (under) expenditures, encumbrances $ $ $ 10.689 $ 10.689 - See independent auditors' report. 46 - .. .. SEWER FUND - VARIANCE ORIGINAL FINAL FA VORABLE BUDGET BUDGET ACTUAL (UNFAVORABLE) REVENUES .. Real property taxes $ 1.916.426 $ 1.9]6.426 $ 1.916.426 $ Real property tax items Non property tax items - Departmental income 1.94R,970 1,94R,970 1.992,7R2 4UI2 Intergovernmental charges Use of money and property 204,5R9 204,5R9 207,305 2,716 - Licenses and permits 12,000 12,000 Fines and forfeitures Sale of property and compensation for loss Miscellaneous local sources - State aid R R Federal aid - Total revenues 4'<)69,9R5 4,069,9R5 4,12R,S21 5R,536 Appropriation of prior year's fund halanee Total revenues and appropriation of prior year's fund balance 4,069,9R5 4,069,9R5 4,12R,S21 5R,S36 - EXPENDITURES AND ENCUMBRANCES - General Government Support 72.435 72.435 120 72,3 IS Puhlie safety Health Transportation - Economic assistance & opportunity Culture and recreation Home and community service 1,920,622 L 920,622 1,977.249 (S6,627) - Employee henefits 3,190 3,190 2,6R7 503 Deht service 2,073. nR 2.073.nR 2,069.2R I 4.457 Total expenditures and encumbrances 4,069,9R5 4.069,9R5 4,049,337 20,64R .. Excess (deficiency) of revenues and appropriation of prior year's fund balance over (under) .. expenditures and encumbrances 79,IR4 79,IR4 Other financing sources (uses) Operating transfers in 17,933 17,933 62,000 44,067 .. Operating transfers out (17,933) (17,9.B) 17,933 Total other financing sources 62,000 62,000 - Excess (deficiency) of revenues and appropriation of prior year's fund balance and other sources - over (under) expenditures, encumbrances $ $ $ 141.184 $ 14 Ll R4 - See independent auditors' report. 47 - - - EXHIBIT II - TOWN OF WAPPINGER, NEW YORK OTHER POST-EMPLOYMENT BENEFITS PLAN SCHEDULE OF FUNDING PROGRESS DECEMBER 31, 2011 - Unfunded UAL as a Actuarial Accrued Percentage - Actuarial Valuc of Accrued Liahility Funded Covered of Covered Valuation Assets Liahility (UAL) Ratio Payroll Payroll Year Ended Dale (a) (h) (h-a) (a/h) (e) ((h-a)/c) - 12131/2011 12131/2011 $ - $ 6.237,176 $ 6,237,176 O.O'X $ 2,196,774 283,92'1r 12131/2010 12131/2010 $ - $ 4,925,385 $ 4,925,385 O.WIr $ 2326,424 211.71 'II - 12131/2009 12131/2009 $ $ 4,925,385 $ 4,925,31\5 (J.(J'1r $ 2,117,550 232.60'11 - - - - - - - - - - - - See independent auditors' report. 48 - - EXHIBIT III - - TOWN OF WAPPINGER, NEW YORK COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS DECEMBER 31, 2011 TOTAL NON-MAJOR GOVERNMENTAl FUNDS - - SPECIAL GRANT FUND LIGHT FUND MISC AMBULANCE FUND ASSETS - Cash and cash equivalents Accounts receivable Due from other funds $ $ ] 6,925 $ 66,433 $ 83,358 120,196 412 120,608 - Total assets $ 120,196 $ 16,925 $ 66,845 $ 203,966 - - LIABILITIES AND FUND EQUITY LIABILITIES - Accounts payable $ $ 3,580 $ $ 3,580 Retainage payable 10,238 10,238 Due to other funds 115,996 154 116,150 - Total liabilities 126,234 3,734 129,968 - FUND BALANCE Fund balance (deficit): Unassigned (6,039) 13,191 66,845 73,997 - Total fund balance (6,039) 13,191 66,845 73,997 Total liabilities - and fund balance $ 120,195 $ 16,925 $ 66,845 $ 203,965 - - - - See independent auditor's report 49 - .. EXHIBIT IV .. TOWN OF WAPPINGER, NEW YORK COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NON-MAJOR GOVERNMENTAL FUNDS DECEMBER 31, 2011 .. TOTAL MISC NON-MAJOR SPECIAL LIGHT AMBULANCE GOVERMENTAl - GRANT FUND FUND FUNDS REVENUES Property taxes $ $ 46,280 $ 395,000 $ 441,280 - Real property taxes items 52 52 Departmental Income 209,409 209,409 Intergovernmental charges 945 945 - Use of money and property 26 184 210 Miscellaneous local sources - Total revenues 210,354 46,306 395,236 651,896 EXPENDITURES - General government support Health 395,000 395,000 .. Transportation 43,729 43,729 Home and community service 214,593 214,593 Employee benefits - Total expenditures 214,593 43,729 395,000 653,322 .. Excess (deficiency) of revenues over expenditures (4,239) 2,577 236 (1,426 ) .. 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 (4,239) 2,577 236 (1,426) .. Fund Balance, December 31, 2010 (1,800) 10,614 66,609 75,423 - Fund Balance, December 31, 2011 $ (6,039 ) $ 13,191 $ 66,845 73,997 - See independent auditor's report 50 - - Exhibit V - TOWN OF WAPPINGER, NEW YORK SCHEDULE OF FINDINGS AND RECOMMENDATIONS FOR THE YEAR ENDED DECEMBER 31.2011 - SECTION I - SIGNIFICANT DEFICIENCIES: - PRIOR YEAR FINDINGS - CONTINUING: - Finding 1 - Infrastructure Reporting Finding: As part of the implementation of GASB Statement #34, the Town was required to retroactively report and depreciate infrastructure assets as of December 31,2003, by December 31,2007. The Town has yet to do so. ... Cause: The Town has not completed an inventory of its infrastructure assets. - Effect: The Town's govemment-wide financial statements can be materially mis- stated by this omission. - Recommendation: The Town should develop and implement a plan to inventory all its in frastructure assets, record and depreciate them. - Response: A plan for implementing this recommendation will be put in place once funding has been ascertained. - Finding 2 - Escrow Recordkeeping .. Finding: The Town has applied considerable effort in the reconciliation of applicant escrow subsidiary ledgers to the Town's general ledger balances, however material differences continue to exist, the amounts of which change from year to year. Such changes indicate an unreliable reconcili ation methodology. Our examination of the escrow reconciliation revealed the following: .. - · As of December 31, 2011, the escrow subsidiary ledgers exceeded the general ledger balances by $175,456. · Comments related to escrows have been made since 1993; .. Cause: In the past there existed a lack of communication between the Planning Department and the Comptroller's Office regarding fees charged to indi vidual escrows. Individual schedules were not always updated and invoices were coded incorrectly. Reconciliations between the Planning Department and the Comptroller's Office were not performed regularly so that these errors were not caught on a timely basis. .. - Effect: The Town is responsible for payment of fees that should be taken from escrow accounts. If not reconciled timely, the Town may not be able to recover these fees from the rightful applicant. - - 51 - - - TO\VN OF WAPPINGER, NEW YORK SCHEDULE OF FINDINGS AND RECOMMENDATIONS, CONT'D FOR THE YEAR ENDED DECEMBER 31, 2011 - Finding 2 - Escrow Recordkeeping (Cont'd.) - Recommendation: No amounts should be returned to an applicant until a thorough review of all transactions has been made, including confinning receipt of escrow funds received and analysis of all disbursements made on that applicant's behalf. This will serve as a check that funds are not being returned appropriately. - - A signi ficant portion of the outstanding escrow liability pertains to inactive applications. The Town should re-review these balances, including making inquiries of engineers and attorneys regarding their fees rclated to these applicants, to confinn that all appropriate disbursements have been charged to the appropriate applicants. - - The analysis of Escrow schedules should continue to be completed on a monthly basis, comparing department receipt records and charges posted to individual escrow schedules to general ledger transactions. Names of cscrows should be consistent, such as code and name of property, to avoid confusion betwecn department and general ledger transactions. - Response: All applications for refunds are currently carefully reviewed and verified before payments are made. In addition, the Town sends letters on a monthly basis to developers with outstanding escrow balances to replenish their accounts. Escrow schedules are reconciled to the general ledger on a monthly basis - - - Finding 3 - Escrow Funds Negative Balances Finding: Payments have been made in excess of escrow amounts collected resulting in excess paymcnts being made on behalf of individual project owners/developers. As of December 31, 2011, 133 escrow accounts indicatcd debit/negative balances totaling $154,279, of a total of 438 accounts amounting to $772,291. - - Cause: The Town collects escrow funds to ensure that costs incurred by the Town, while projects or subdivisions are being considcred by the Planning Board, are borne by the applicants. The Town maintains records for each project/applicant so that balances can be monitored; however, in numerous cases the disbursements exceeded the escrow collected. - - Effect: Unanticipated liabilities could be incurred by the Town for which no revcnues/funds have been provided. - - 52 - - - TO\VN OF WAPPINGER, NEW YORK SCHEDULE OF FINDINGS AND RECOMMENDATIONS, CONT'D FOR THE YEAR ENDED DECEMBER 31,2011 Finding 3 - Escrow Funds Negative Balances (Cont'd.) - - Recommendation: We note that the Town Board authorized legislation during 2002 and 2006 which provided for policies and procedures to ensure that the Town does not subsidize applicant review costs. However, we note that debit balances have not significantly changed from 2006 through 2011, ($184,812, $171,058, $151,770, $138,115, $157,583, and $154,279, respectively). Also, as noted above a significant portion of these balances pertain to inactive or old applications, amounting to $107,440. Along with the reconciliations noted above, we recommend that the Town make the confirmation and collection of these balances a priority, reviewing the pertinent documentation and determining a course of action for collection of each account. - - - Response: The Town will involve the Town Attorney in the collection of overdue escrow accounts. All the professionals have been advised to withhold their services on overdue escrow accounts until they are replenished. The Town will also explore the possibility of accepting partial payment as a way of settling very old accounts. - SECTION II - OTHER FINDINGS: - CURRENT YEAR FINDINGS: - Finding 4 - Due To/From Balances - Finding: The Town's Due To Other Funds/Due From Other Funds balances total approximately $970,000. Of that, the General Fund - Town-Wide owed funds with funding sources that were not Town-Wide (special districts and capital projects) nearly $449,220. - Cause: Inter-fund balances were not re-paid by year-end. - Effect: The Town is not in compliance with General Municipal law which requires that sLlch funds be paid by the end of the year. FUl1her appropriate interest should be paid if lending occurs between funds with different taxpayer bases. - Recommendation: The Town should review the inter-fund balances periodically, re-paying these balances or at a minimum, detennining a re-paymcnt plan. - Response: Since 2011, the Town has set aside funds in the budget to pay inter-fund balances. This will continue until all inter-fund balances are repaid. - - Status of Prior Year Findings: Findings #4, 5, & 6 Were Satisfied OR No Longer Applicable - 53 -