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Home My WebLink About2018 MATTITUCK FIRE DISTRICT PO BOX 666, PIKE STREET MATTITUCK, NEW YORK 11952-0666 Commissioners Warren Jackson,Chairman John C.Harrison,Secretary Amy Ball,Treasurer David F.Haas,Vice Chairman Brian K.Williams James D. Roache Jason P. Haas RECEIVE June 27, 2019 JUN 2 0 2019 Southold Town Clerk Soot oClerk Town CleJ Southold Town �. P O Box 1179 Southold, NY 11971 Dear Ms. Neville, The Board of Fire Commissioners of the Mattituck Fire District has directed me to forward to you the enclosed: 1. Independent audit conducted by Albrecht, Viggiano & Zureck & Co PC, certified public accountants of the Mattituck Fire District for the period ending December 31, 2018. If you require any additional information please do not hesitate to contact me. Sincerely, John C. Harrison Secretary/Fire District Manager cc: Board of Fire Commissioners Treasurer A. Bail Mr. William Moore, Esq. Mr. J. Ferreira, AVZ&Co., P.0 Office (631) 298-8837 Facsimile (631) 298-8841 MATTITUCK FIRE DISTRICT AUDITED FINANCIAL STATEMENTS Year Ended December 31, 2018 DECEIVE® JUN 2 8 2019 Southold Town Clerk TABLE OF CONTENTS Page No. INDEPENDENT AUDITORS' REPORT.................................................................................................... 1-2 FINANCIAL STATEMENTS Balance Sheet—Governmental Fund..................................................................................................... .. 3 Statement of Revenues, Expenditures and Changes in Fund Balance—Governmental Fund.................................................................................................... 4 Statement of Fiduciary Assets and Liabilities—Fiduciary Fund ............................................................... 5 Notesto Financial Statements................................................................................................................... 6-23 REQUIRED SUPPLEMENTARY INFORMATION General Fund—Schedule of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual.................................................................................... 24 General Fund—Schedule of Detailed Expenditures and Appropriations........................................................................................................................ ............... 25-26 OTHER REPORT Independent Auditors' 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.......................... 27-28 f l - 1 - _ 0 CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT f To the Board of Fire Commissioners Mattituck Fire District Mattituck, New York Report on the Financial Statements We have audited the accompanying financial statements of the Mattituck Fire District, New York which comprise the Balance Sheet—Governmental Fund, Statement of Revenues, Expenditures and Changes in Fund Balance— Governmental Fund, the Statement of Fiduciary Assets and Liabilities — Fiduciary Fund and the related notes to the financial statements as of and for the year ended December 31, 2018. Management's Responsibility for the Financial Statements -' Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting practices prescribed or permitted by the Office of the New York State Comptroller's, Uniform System of Accounts for Fire Districts. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to error or fraud. Auditors' Responsibility Our responsibility is to express an opinion 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 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 from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Mattituck Fire District, New York's preparation r and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Mattituck Fire District, New York's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. BEYOND THE NUMBERS... �— ALBRECHT,VIGGIANO,ZURECK&COMPANY, PC 245 PARK AVENUE, 39TH FLOOR 25 SUFFOLK COURT NEW YORK,NY 10167 HAUPPAUGE, NY 11788-3715 i ? T. 212 792 4075 T.631.434 9500 F:631.434 9518 www.avz.com INDEPENDENT MEMBER OF BKR INTERNATIONAL lY _2_ Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles As described in Note 1C, these financial statements are prepared on the accounting practices prescribed or ' permitted by the Office of the New York State Comptroller's, Uniform System of Accounts for Fire Districts which is a basis of accounting other than accounting principles generally accepted in the United States of America. The effects on the financial statements of the variances between the regulatory basis of accounting described in Note 1C and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. C) Adverse Opinion on U.S. Generally Accepted Accounting Principles In our opinion, because of the significance of the matter discussed in the `Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles" paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Mattituck Fire District, New York as of December 31, 2018, or changes in financial position for the (_ year then ended. Unmodified Opinion on Regulatory Basis of Accounting In our opinion, the financial statements referred to in the first paragraph present fairly, in all material respects, the assets, liabilities and fund balance of the Mattituck Fire District, New York as of December 31, 2018, and the change in fund balance for the year then ended, in accordance with accounting practices prescribed or permitted �- by the Office of the New York State Comptroller's, Uniform System of Accounts for Fire Districts as described in Note 1 C. Other Matters Required Supplementary Information The accounting practices prescribed or permitted by the Office of the New York State Comptroller's, Uniform System of Accounts for Fire Districts which is a basis of accounting other than accounting principles generally accepted in the United States of America requires that the accompanying financial information listed as Required Supplementary Information in the table of contents be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the accounting practices prescribed or permitted by the Office of the New York State Comptroller's, Uniform System of Accounts for Fire Districts which is a basis of accounting other than accounting principles generally accepted in the United States of America, which consider it to be an essential part of financial reporting for placing the 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 financial statements, and other knowledge we obtained during our audit of the 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 7, 2019 on our consideration of the Mattituck Fire District, New York's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, 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 in considering the Mattituck Fire District, New York's internal control over financial reporting and compliance. U�cu,&UjjS"I �C Hauppauge, New York 0 June 7, 2019 -3- MATTITUCK FIRE DISTRICT GOVERNMENTAL FUND GENERALFUND BALANCE SHEET December 31, 2018 ASSETS Cash $ 1,076,190 Cash in special reserves 1,335,527 Other receivables 9,861 Prepaid items 3,961 Total Assets $ 2,425,539 LIABILITIES Accounts payable $ 35,439 Accrued expenses 991 Total Liabilities 36,430 FUND BALANCE Nonspendable 3,961 Restricted 1,313,894 Assigned 205,801 Unassigned 865,453 Total Fund Balance 2,389,109 Total Liabilities and Fund Balance $ 2,425,539 i See notes to financial statements. -4- MATTITUCK FIRE DISTRICT GOVERNMENTAL FUND GENERALFUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 2018 REVENUES Real property taxes $ 1,984,275 Use of money and property 19,259 Sale of apparatus and equipment 3,500 Insurance recoveries and refunds 95,335 Miscellaneous income 20 Total Revenues 2,102,389 EXPENDITURES Personal services 198,691 Equipment and capital outlay 188,986 Fire protection 646,080 Employee benefits 443,371 Debt service 108,515 Total Expenditures 1,585,643 Net Change in Fund Balance 516,746 Fund Balance at Beginning of Year 1,872,363 Fund Balance at End of Year $ 2,389,109 See notes to financial statements. -5- MATTITUCK FIRE DISTRICT FIDUCIARY FUND STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES December 31, 2018 ASSETS Service award program assets $ 4,140,662 Total Assets $ 4,140,662 LIABILITIES Service awards $ 4,140,662 Total Liabilities $ 4,140,662 See notes to financial statements. -6- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Mattituck Fire District (the "District"), which was established in 1905, is governed by Town Law and other general laws of the State of New York. The governing body of the District is the Board of Fire Commissioners which consists of five commissioners all of whom are elected to five year terms. The primary function of the District is to provide fire protection services to the community. Services such as firefighting, fire prevention, and public education support the primary function. _ The more significant of the District's accounting policies are described below. A. REPORTING ENTITY The financial reporting entity includes all functions and activities over which the elected officials exercise responsibility. No other governmental organizations have been included or excluded from the reporting entity. B. FUND FINANCIAL STATEMENTS The financial statements of the District have not been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The District prepares these financial statements on a prescribed basis of accounting that demonstrates compliance with the regulatory basis of accounting and budget laws of the State of New York, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. The accounts of the District are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund balances, revenues, and expenditures, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. The various funds are presented by type in the fund financial statements. Accordingly, the District maintains the following fund types: Governmental Fund—Governmental funds are those through which most governmental functions are financed. The acquisition, use and balances of expendable financial resources and the related liabilities are accounted for through governmental funds. The measurement focus of the governmental funds is upon determination of financial position and changes in financial position. The District reports the following governmental fund: General Fund — the principal operating fund of the District which includes all receipts and disbursements not required to be included in other funds. Fiduciary Fund — the Fiduciary Fund is used to account for assets held by the District in a trustee capacity or as an agent for individuals, private organizations, and other governments. The District reports the following fiduciary fund: Agency Fund — used to account for money (and/or property) received and held in a custodial capacity of trustee, custodian, or agent. C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION Measurement focus refers to what is being measured; basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurement made, regardless of the measurement focus applied. -7- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (continued) The District follows the Uniform System of Accounts as described in the Fire District Accounting and Reporting Manual issued by the Office of the New York State Comptroller. Under this system the District's governmental activities use a current financial resources measurement focus and are accounted for using the modified accrual basis of accounting. Under this basis of accounting, revenues are recognized in the accounting period in which they are available and measurable, and expenditures will generally be recognized in the accounting period in which the liability is actually incurred. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. This basis of accounting differs from accounting principles generally accepted in the United States of America for governments as promulgated by the Government Accounting Standards Board (GASB). D. ASSETS, LIABILITIES AND FUND EQUITY 1. CASH IN SPECIAL RESERVES Cash balances of the Capital Reserve for Building and Grounds and the Capital Reserve for Apparatus are classified as cash in special reserves because the use of these funds is restricted by New York State General Municipal Law. 2. RECEIVABLES Receivables are recorded and revenues recognized as earned or as specific program expenditures are incurred. 3. PREPAID ITEMS Prepaid items represent insurance benefits that will benefit a future period. 4. CAPITAL ASSETS All capital assets with an original cost of $1,000 or more are valued at historical cost or estimated historical costs if actual is unavailable, except for donated capital assets which are recorded at their estimated fair value at the date of donation. Depreciation is provided over the assets' estimated useful lives using the straight-line method of depreciation. The range of estimated useful lives by type of asset is as follows: Buildings 20-50 years Infrastructure 40 years Vehicles and related equipment 5-20 years Equipment 5-20 years In accordance with the Accounting and Reporting Manual for Fire Districts, issued by the Office of the New York State Comptroller, depreciation expense is not recorded in the District's governmental funds and instead it is disclosed in the notes to the financial statements along with the District's changes in capital assets. Additional information related to capital assets is disclosed in Note 3B to the financial statements. 5. PROPERTY TAXES Property taxes are collected by the Town of Southold on behalf of the District. Payments from the Town of Southold are normally received at various intervals during the year. -8- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. ASSETS, LIABILITIES AND FUND EQUITY (continued) 6. FUND EQUITY In the fund financial statements, governmental funds report aggregate amounts for five classifications of fund balances based on the constraints imposed on the use of these resources; they are 1) nonspendable, 2) restricted 3) committed, 4) assigned, or 5) unassigned. 1) Nonspendable fund balance includes amounts that cannot be spent because they are either (a) not in spendable form (i.e. prepaid items or inventories), or (b) will not convert to cash within the current period (i.e. long term receivables and financial assets held for resale), or (c) legally or contractually required to be maintained intact(i.e. the principal of a permanent fund). The spendable portion of the fund balance comprises the remaining four classifications: restricted, committed, assigned, and unassigned. 2) Restricted fund balance reflects the constraints imposed on resources either (a) externally by creditors, grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. The District has established the following restricted funds balances: Capital Reserve for Buildings and Grounds (GML §6-q) — The reserve is established by a resolution of the Board of Fire Commissioners and may not take effect until approved by a vote of the qualified electors of the District (i.e., mandatory referendum). The reserve established for the construction and repair of District buildings and grounds is funded by budgetary appropriations and revenues not required by law to be paid into any other fund or account.The reserve is accounted for in the General Fund. Capital Reserve for Apparatus (GML§6-g)—The reserve is established by a resolution of the Board of Fire Commissioners and may not take effect until approved by a vote of the qualified electors of the District(i.e., mandatory referendum). The reserve established for the purchase and repair of District equipment and apparatus is funded by budgetary appropriations and revenues not required by law to be paid into any other fund or account. The reserve is accounted for in the General Fund. 3) Committed fund balance reflects amounts that can only be used for specific purposes by a government using its highest and most binding level of decision making authority. The Board of Fire Commissioners is not empowered to establish local law; accordingly, the District will not have committed fund balance. 4) Assigned fund balance reflects the amounts constrained by the District's "intent" to be used for specific purposes, but are neither restricted nor committed. The Board of Fire Commissioners has the authority to assign amounts to be used for specific purposes. 5) Unassigned fund balance includes all other General Fund amounts that do not meet the definition of the above four classifications and are deemed to be available for general use by the District. When both restricted and unrestricted resources are available for use, the District uses restricted resources first, and then unrestricted resources—assigned and unassigned - in order as needed. -9- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) E. ENCUMBRANCES Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded for budgetary control purpose, is employed in the governmental funds. Encumbrances are reported as restrictions, commitments, or assignments of fund balances since they do not constitute expenditures or liabilities. Expenditures for such commitments are recorded in the period in which the liability is incurred. F. USE OF ESTIMATES The preparation of financial statements in conformity with a prescribed basis of accounting that demonstrates compliance with the regulatory basis of accounting and budget laws of the State of New York, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. G. SUBSEQUENT EVENTS Management has evaluated subsequent events for disclosure and/or recognition in the financial statements through the date of the financial statements. 2. STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY A. BUDGETARY INFORMATION The District prepares an annual budget for the General Fund which is approved by the Board of Fire Commissioners. The budget is then submitted to the Town of Southold for inclusion in the Town Budget and a public hearing is held thereon. The budget is not subject to referendum. Any revisions to the annual budget are adopted by resolution of the Board of Fire Commissioners. The budget is adopted annually on a prescribed basis of accounting that demonstrates compliance with the regulatory basis of accounting and budget laws of the State of New York, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. Appropriations authorized for the current year are increased by the amount of encumbrances, if any, carried forward from the prior year. B. REAL PROPERTY TAX LEVY CAP New York State has enacted Chapter 97, Laws of 2011 Real Property Tax Levy Cap and Mandate Relief Provisions, which includes a property tax cap for fire districts. For fiscal years, beginning in 2012 and lasting through at least June 15, 2020, annually, fire districts cannot increase their property tax levy by more than 2.00% or the rate of inflation (whichever is less) plus additional adjustments unless a resolution approved by a vote of 60% of the total voting power of the Board of Fire Commissioners is obtained to override the property tax levy limit for the coming fiscal year. The District has complied with this law in adopting its 2018 budget. - 10- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 2. STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (continued) C. FUND BALANCE The following table provides the detail regarding fund balance categories and classifications for the General Fund nonspendable, restricted and assigned fund balance. The unassigned fund balance is also shown. Fund Balances: Nonspendable: Prepaid items $ 3,961 Restricted for: Capital Reserve for Buildings and Grounds 238,271 Capital Reserve for Apparatus 1,075,623 Total Restricted 1,313,894 Assigned to: Buildings and Grounds 90,000 Apparatus 55,000 Length of Service Award Program Contribution 10,000 Purchases on order 50,801 Total Assigned 205,801 Unassigned 865,453 Total Fund Balance $ 2,389,109 D. CAPITAL RESERVES The District has established a Capital Reserve for Buildings and Grounds and a Capital Reserve for Apparatus. A summary of activity in each of the District's Capital Reserve Funds is as follows: Capital Reserve for Building and Grounds The Board of Fire Commissioners established a capital reserve for construction and repairs to building and grounds. A summary of activity in the Building and Grounds Capital Reserve Fund for the year ended December 31, 2018 is as follows: Fund Balance at beginning of year $ 88,348 Transfer from General Fund appropriations 185,000 Interest earned on reserve cash 121 Expenditures (35,198) Fund balance at end of year 238,271 Amount due to General Fund for reimbursement of costs 2,897 Cash balance at end of year 241,168 - 11 - MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 2. STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY(continued) D. CAPITAL RESERVES (continued) Capital Reserve for Apparatus The Board of Fire Commissioners established a capital reserve for purchases and repairs associated with apparatus and equipment. A summary of activity in the Apparatus Reserve Fund for the year ended December 31, 2018 is as follows: Fund Balance at beginning of year $ 830,450 Transfer from General Fund appropriations 335,000 Rental income 17,823 Sale of Equipment 3,500 Interest earned on reserve cash 546 Expenditures (111,696) Fund Balance at end of year 1,075,623 Amount due to General Fund for reimbursement of costs 18,736 Cash balance at end of year $ 1,094,a59 3. DETAILED NOTES A. CASH AND CASH IN SPECIAL RESERVES The District's investment policies are governed by State statutes. In addition, the District has its own investment policy. District monies must be deposited in FDIC-insured commercial banks or trust companies located within the State. Collateral is required for demand and time deposits at 105% of all deposits not covered by federal deposit insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of the State or its municipalities. Custodial Credit Risk - Deposits - Custodial credit risk for deposits exists when, in the event of the failure of a depository financial institution, a government may be unable to recover deposits, or recover collateral securities that are in possession of an outside agency. Deposits are required to be disclosed as exposed to custodial credit risk if they are not covered by depository insurance, and the deposits are either: • Uncollateralized; • Collateralized with securities held by the pledging financial institution in the District's name; or • Collateralized with securities held by the pledging financial institution's trust department or agent, but not in the District's name. At December 31, 2018, the District's bank balances were $2,414,744. Of the District's bank balances, $259,448 was covered by federal deposit insurance and $2,155,296 was secured by collateral held by the District's agent, a third party financial institution, in the District's name. The District does not typically purchase investments for long enough duration to cause it to believe that it is exposed to any material interest rate risk. The District does not typically purchase investments dominated in a foreign currency, and is not exposed to foreign currency risk. The District does not have any investments subject to credit risk or concentration of risk. - 12- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 3. DETAILED NOTES (continued) B. CAPITAL ASSETS Capital assets consist of the following at December 31,2018: The District evaluates prominent events or changes in circumstances affecting capital assets to determine whether impairment of a capital asset has occurred.The District's policy is to record an impairment loss in the period when the District determines that the carrying amount of the asset will not be recoverable.At December 31, 2018, the District has not recorded any such impairment losses. Balance Balance 1/1/18 Additions Deletions Reclassifications 12/31/18 Capital assets,not being depreciated Land $ 787,000 $ 787,000 Land improvements -0- $ 35,000 $ 418,939 453,939 Total capital assets,not being depreciated 787,000 35,000 $ -0- 418,939 1,240,939 Capital assets,being depreciated Buildings 3,236,114 3,100 (418,939) 2,620,275 Infrastructure 437,750 437,750 Vehicles and related equipment 4,644,027 129,836 59,651 4,714,212 Equipment 1,117,095 23,357 707 1,139,745 Total capital assets,being depreciated 9,434,986 156,293 60,358 (418,939) 9,111,982 Less accumulated depreciation for. Buildings 1,196,852 69,134 5,237 1,260,749 Infrastructure 335,426 8,249 343,675 Vehicles and related equipment 2,770,438 219,853 51,634 2,938,657 Equipment 721,481 60,711 707 781,485 Total accumulated depreciation $ 5,024,197 $ 357,947 $ 57,578 $ -0- 5,324,566 Total capital assets,being depreciated,net 3,787,416 Total capital assets,net $ 5,028,355 Total depreciation expense $ 357,947 C. INDEBTEDNESS LONG TERM DEBT The following is a summary of changes in long-term debt transactions for the year ended December 31, 2018: Balance Balance 1/1/18 Increases Reductions 12/31/18 General obligation serial bonds $ 210,000 $ -0- $ 102,000 $ 108,000 - 13- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 3. DETAILED NOTES (continued) C. INDEBTEDNESS (continued) LONG TERM DEBT(continued) General Obligation Serial Bonds - The District borrows money in order to acquire land, equipment, construct buildings or make improvements. This enables the cost of these capital assets to be borne by the present and future taxpayers receiving the benefit of the capital assets. These long-term liabilities are full faith and credit debt of the District. The provision to be made in future budgets for capital indebtedness represents the amount, exclusive of interest, authorized to be collected in future years from taxpayers and others for liquidation of the long-term liabilities. General obligation serial bonds of the District will be repaid from tax revenues. General obligation serial bonds bear interest at 3.70% and 4.20% and have final maturity dates through 2019. The following is a summary of maturity of general obligation serial bonds: Final Interest Outstanding Issue Date Maturity Rate 12/31/18 2004 2019 3.70% $ 85,000 2005 2019 4.20% 23,000 $ 108,000 Future principal and interest payments to maturity are as follows: Year Principal Interest Total 2019 $ 108,000 $ 2,539 $ 110,539 D. RETIREMENT SYSTEM Plan Description The District participates in the New York State and Local Employees' Retirement System (the "System"). This is a cost-sharing multiple-employer retirement system.The System provides retirement benefits as well as death and disability benefits. The net position of the System is held in the New York State Common Retirement Fund (the"Fund"), which was established to hold all net assets and record changes in plan net position allocated to the System. The Comptroller of the State of New York serves as the trustee of the Fund and is the administrative head of the System. The Comptroller is an elected official determined in a direct election and serves a four year term. System benefits are established under the provisions of the New York State Retirement and Social Security Law ("RSSL"). Once a public employer elects to participate in the System, the election is irrevocable. The New York State Constitution provides that pension membership is a contractual relationship and plan benefits cannot be diminished or impaired. Benefits can be changed for future members only by enactment of a State statute. The District also participates in the Public Employees' Group Life Insurance Plan (GLIP), which provides death benefits in the form of life insurance. The System is included in the State's financial report as a pension trust fund. That report, including information with regard to benefits provided, may be found at www.osc.state.ny.us/retire/publications/index.php or obtained by writing to the New York State and Local Retirement System, 110 State Street, Albany, NY 12244. - 14- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 3. DETAILED NOTES (continued) D. RETIREMENT SYSTEM (continued) Benefits Provided The System provides retirement benefits as well as death and disability benefits. Tiers 1 and 2 Eligibility: Tier 1 members, with the exception of those retiring under special retirement plans, must be at least age 55 to be eligible to collect a retirement benefit, there is no minimum service requirement. Tier 2 members, with the exception of those retiring under special retirement plans, must have five years of service and be at least age 55 to be eligible to collect a retirement benefit. The age at which full benefits may be collected for Tier 1 and Tier 2, is 55 and 62, respectively. Benefit calculation: Generally, the benefit is 1.67% of final average salary for each year of service if the member retires with less than 20 years. If the member retires with 20 or more years of service,the benefit is 2% of final average salary for each year of service. Tier 2 members with five or more years of service can retire as early as age 55 with reduced benefits. Tier 2 members age 55 or older with 30 or more years of service can retire with no reduction in benefits. As a result of Article 19 of the RSSL, Tier 1 and 2 members who worked continuously from April 1, 1999 through October 1, 2000 received an additional month of service credit for each year of credited service they have at retirement, up to a maximum of 24 additional months. Final average salary is the average of the wages earned in the three highest consecutive years. For Tier 1 members who joined on or after June 17, 1971, each year of final average salary is limited to no more than 20% of the previous year. For Tier 2 members, each year of final average salary is limited to no more than 20%of the average of the previous two years. Tiers 3, 4, and 5 Eligibility: Tier 3 and 4 members, with the exception of those retiring under special retirement plans, must have five years of service and be at least age 55 to be eligible to collect a retirement benefit. Tier 5 members,with the exception of those retiring under special retirement plans, must have ten years of service and be at least 55 to be eligible to collect a retirement benefit.The full benefit age for Tiers 3, 4 and 5 is 62. Benefit calculation: Generally the benefit is 1.67% of final average salary for each year of service if the member retires with less than 20 years. If a member retires with between 20 and 30 years of service, the benefit is 2%of final average salary for each year of service. If a member retires with more than 30 years of service, an additional benefit of 1.5% of final average salary is applied for each year of service over 30 years.Tier 3 and 4 members with five or more years of service and Tier 5 members with ten or more years of service can retire as early as age 55 with reduced benefits.Tier 3 and 4 members age 55 or older with 30 or more years of service can retire with no reduction in benefits. Final average salary is the average of the wages earned in the three highest consecutive years. For Tier 3, 4, and 5 members, each year of final average salary is limited to no more than 10% of the average of the previous two years. Tier 6 Eligibility: Tier 6 members, with the exception of those retiring under special retirement plans, must have ten years of service and be at least age 55 to be eligible to collect a retirement benefit. The full benefit age for Tier 6 members is age 63 for ERS members. ` - 15- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 3. DETAILED NOTES (continued) D. RETIREMENT SYSTEM (continued) Benefit calculation: Generally, the benefit is 1.67% of final average salary for each year of service if the member retires with less than 20 years. If a member retires with 20 years of service,the benefit is 1.75% of final average salary for each year of service. If a member retires with more than 20 years of service, an additional benefit of 2% of final average salary is applied for each year of service over 20 years. Tier 6 members with ten or more years of service can retire as early as age 55 with reduced benefits. Final average salary is the average of the wages earned in the five highest consecutive years. For Tier 6 members, each year of final average salary is limited to no more than 10% greater than the average of the previous four years. Disability Retirement Benefits Disability retirement benefits are available to members unable to perform their fob duties because of permanent physical or mental incapacity. There are three general types of disability benefits: ordinary, performance of duty, and accidental disability benefits. Eligibility, benefits amounts, and other rules such as any offsets of other benefits depend on a member's tier,years of service, and plan. Ordinary Death Benefits Death benefits are payable upon the death, before retirement, of a member who meets eligibility requirements as set forth by law. The first$50,000 of an ordinary death benefit is paid in the form of group life term life insurance.The benefit is generally three times the member's annual salary. For most members, there is also a reduced post-retirement ordinary death benefit available. Post-Retirement Benefit Increases A cost-of-living adjustment is provided annually to: 1) all pensioners who have attained age 62 and have been retired for five years; 2) all pensioners who have attained age 55 and have been retired for ten years; 3) all disability pensioners, regardless of age, who have been retired for five years; 4) recipients of an accidental death benefit, regardless of age, who have been receiving such benefit for five years; and 5) the spouse of a deceased retiree receiving a lifetime benefit under an option elected by the retiree at retirement. An eligible spouse is entitled to one-half the cost-of-living adjustment amount that would have been paid to the retiree when the retiree would have met the eligibility criteria.This cost-of-living adjustment is a percentage of the annual retirement benefit of the eligible member as computed on a base benefit amount not to exceed $18,000 of the annual retirement benefit. The cost-of-living percentage shall be 50% of the annual consumer price index as published by the U.S. Bureau of Labor, but cannot be less than 1% or exceed 3%. Contributions Generally, Tier 3, 4 and 5 members must contribute 3% of their salary to the System. As a result of Article 19 of the NYSRSSL, eligible Tier 3 and 4 employees, with a membership date on or after July 27, 1976, who have ten or more years of membership or credited service with the System, are not required to contribute. Members cannot be required to begin making contributions or to make increased contributions beyond what was required when membership began. For Tier 6 members, the contribution rate varies from 3%to 6% depending on salary. Generally, Tier 5 and 6 members are required to contribute for all years of service. Under the authority of the NYSRSSL, the Comptroller shall certify annually the actuarially determined rates expressly used in computing the employers' contributions based on salaries paid during the System's year ended March 31. {J - 16- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS - . 3. DETAILED NOTES (continued) D. RETIREMENT SYSTEM (continued) The contribution for the year ended December 31, 2018 was $29,185 which was 100% of the required contribution. Pension Assets, Liabilities, Pension Expense, and Deferred Outflows and Inflows of Resources Related to Pensions At December 31, 2018, the District reported a liability of $15,936 for its proportionate share of the net pension liability for the System. The net pension liability was measured as of March 31, 2018 for ERS and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of April 1, 2017. The District's proportion of the net pension liability was based on a projection of the - District's projected contributions of all participating members, actuarially determined. Below is the proportionate share of the net pension liability of the System and the related employer allocation percentage as of March 31, 2018 (measurement date). ERS Net pension liability $ 15,936 District's portion of the Plan's total net pension liability 0.0004938% Change in allocation of the System's total Net Pension Liability since the prior measurement date 0.000090800% There was no significant change to the District's proportion from March 31, 2017 to March 31, 2018. At December 31, 2018, the District had deferred outflows of resources related to pension from the following sources: Deferred Outflows Deferred Inflows of of Resources Resources Differences between expected and actual experience $ 5,684 $ 4,697 Changes of assumptions 10,567 Net difference between projected and actual earnings on pension plan investments 23,146 45,687 Changes in proportion and differences between the District's contributions and proportionate share of contributions 22,334 853 District's contribution subsequent to the measurement date 29,185 Total $ 90,916 $ 51,237 - 17- MAT 1TUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 3. DETAILED NOTES (continued) D. RETIREMENT SYSTEM (continued) The District's contribution subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2018. Other amounts reported as deferred outflows of resources related to pensions will be recognized as follows: Years Ending December 31, 2019 $ 12,499 2020 9,205 2021 (7,945) 2022 (3,265) $ 10,494 Actuarial Assumptions The total pension liability as of the measurement date of March 31, 2018 was determined by using an actuarial valuation as of April 1, 2017 with update procedures used to roll forward the total pension liability to the measurement date. Significant actuarial assumptions used in the valuations were as follows: ERS Measurement date March 31, 2018 Actuarial valuation date April 1, 2017 Interest rate 7.0% Salary scale 3.8% Decrement tables April 1, 2010 - March 31, 2015 System's Experience Inflation rate 2.5% Annuitant mortality rates are based on April 1, 2010 — March 31, 2015 System's experience with adjustments for mortality improvements based on the Society of Actuaries' Scale MP-2014. The actuarial assumptions used in the April 1, 2017 valuation are based on the results of an actuarial experience study for the period April 1, 2010—March 31, 2015. The long term rate of return on pension plan investments was determined using a building block method in which best estimate ranges of expected future real rates of return (expected returns net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by each of the target asset allocation percentages and by adding expected inflation. Best estimates of the arithmetic real rates of return for each major asset class included in the target asset allocation are summarized below: ERS Long-term Target Expected Rate Allocation of Return Asset type Domestic equity 36.0% 4.55% International equity 14.0% 6.35% Private equity 10.0% 7.50% Real estate 10.0% 5.55% Absolute return strategies 2.0% 3.75% Opportunistic portfolio 3.0% 5.68% Real assets 3.0% 5.29% Bonds and mortgages 17.0% 1.31% Cash 1.0% -0.25% Inflation indexed bonds 4.0% 1.25% 100.0% - 18- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 3. DETAILED NOTES (continued) D. RETIREMENT SYSTEM (continued) Discount Rate The discount rate used to calculate the total pension liability was 7.0%. The projection of cash flows used to determine the discount rate assumes that contributions from plan members will be made at the current contribution rates and that contributions from employers will be made at statutorily required rates, actuarially. Based upon the assumptions,the System's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Proportionate Share of the Net Pension Asset/ (Liability) to the Discount Rate Assumption The following presents the District's proportionate share of the net pension liability calculated using the discount rate of 7.0%, as well as what the District's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1% point lower (6.0%) or 1% point higher (8.0%) than the current rate: 1% Current 1% Decrease Assumption Increase (6.0%) (7.0%) (8.0%) Employer's proportionate share of the net pension asset/(liability) $ (120,575) $ (15,936) $ 72,585 Pension Plan Fiduciary Net Position The components of the current-year net pension liability of the employers participating in the system as of March 31, 2018, were as follows: (Dollars in Thousands) Employers'total pension liability $ 183,400,590 Plan Fiduciary Net Position (180,173,145) Employers' net pension asset/(liability) $ 3,227,445 Ratio of plan fiduciary net position to the Employers'total pension liability 98.24% Detailed information about the pension plan's fiduciary net position is available in the System's separately issued financial statements. 4. COMMITMENTS AND CONTINGENCIES A. RISK MANAGEMENT The District is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets; injuries to employees, errors and omissions; natural disasters, etc. These risks are covered by commercial insurance purchased from independent third parties. Settled claims from these risks have not exceeded commercial insurance coverage for the past two years. Management believes that all claims currently pending are either adequately covered by insurance or will not materially affect the financial position or results of operations of the District. - 19- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 4. COMMITMENTS AND CONTINGENCIES (continued) B. LENGTH OF SERVICE AWARD PROGRAM (LOSAP) The District's financial statements are for the year ended December 31, 2018. The information contained in this note is based on information for the District's Length of Service Award Program (the "Plan") as of January 1, 2019 for the Plan year ended December 31, 2018, which is the most recent Plan year for which complete information is available. Actuarial values are calculated as of January 1, 2019 based upon information and service accruals earned through December 31, 2018 under the Plan. The District established a defined benefit Plan (referred to as "LOSAP" — Length of Service Award Program — under Section 457(e)(11) of the Internal Revenue Code) for active volunteer firefighters of the Mattituck Fire Department. The program took effect on January 1, 1992. The Plan was established pursuant to Article 11-A of New York State General Municipal Law. The Plan provides municipally-funded pension-like benefits to facilitate the recruitment and retention of active volunteer firefighters. The District is the sponsor of the Plan and the Plan administrator(administration assistance provided by Penflex, Inc.). Plan Description: Participation. Vesting and Service Credit Active volunteer firefighters who have reached the age of 18 and who have completed one year of firefighting service are eligible to participate in the Plan. Participants acquire a nonforfeitable right to a service award after being credited with five years of firefighting service or upon attaining the Plan's entitlement age. The Plan's entitlement age is age 62. In general, an active volunteer firefighter is credited with a year of firefighting service for each calendar year after tl4e establishment of the Plan in which they accumulate fifty points. Points are granted for the performance of certain activities in accordance with a system ("Point System") established by the District on the basis of a statutory list of activities and point values. A Participant may also receive service credit for five years of active volunteer firefighting service rendered prior to the establishment of the Plan. Benefits A Participant's benefit under the Plan is the actuarial equivalent of a monthly payment for life equal to$20 multiplied by the Participant's total number of years of firefighting service. The number of years of firefighting service used to compute the benefit cannot exceed forty. Except in the case of Pre-Entitlement Age death or total and permanent disablement, a Participant's benefit will not be paid until the Participant reaches the Entitlement Age ("EX) of 62. A Participant's benefit is paid as a ten-year certain and continuous monthly payment life annuity. Currently, there are no other forms of payment of a Participant's earned Plan benefit. The Plan provides statutorily mandated death and disability benefits. The Plan also provides optional line of duty disability benefits. Should a volunteer firefighter of the District become totally and temporarily disabled, or partially and permanently disabled, as certified by the Workers' Compensation Board or other competent authority approved by the Board of Fire Commissioners, and the disability occurs during the course of service as a volunteer, while actively engaged in providing line of duty services, as defined in subdivision one of section five of the Volunteer Firefighters' Benefit Law, the firefighter shall receive five points for each complete calendar month of such disability under the Point System up to the earlier of the date such volunteer is no longer totally and temporarily or partially and permanently disabled or attains the EA. However, if such disability becomes a permanent and total disability and a Mattituck Fire District Service Award Program Total and Permanent Disability is awarded on account of such disablement, then no future points shall be credited under this special line of duty disability benefit provision after the date of the awarding of such Total and Permanent Disability by the Board of Fire Commissioners. -20- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 4. COMMITMENTS AND CONTINGENCIES (continued) B. LENGTH OF SERVICE AWARD PROGRAM (LOSAP) (continued) Plan Description: (continued) Benefits (continued) If a Participant is awarded a Total and Permanent Service Award Program Disability by the Board of Fire Commissioners before attaining the EA for a disability commencing after December 31, 1991, the Participant is entitled to receive an amount equal to the Participant's Accrued Service Award earned as of the date such disability payment is awarded by the Board of Fire Commissioners and payable on the first day of every month for the lifetime of the Participant or for ten years, whichever is greater. Once a Participant is awarded a Total and Permanent Service Award Program Disability under the Plan provisions, such Participant shall no longer be eligible to participate in the District's Plan. If a Participant dies before attaining the EA, a lump-sum shall be paid to the Participant's designated beneficiary equal to the discounted actuarial present value of the Participant's Accrued Service Award earned as of the date of death. If the Participant was an active volunteer firefighter of the District as of the date of death, the minimum death benefit payable to the Participant's designated beneficiary shall be $20,000. Participants who are active after attaining the EA and who have commenced receiving their Plan benefit have the opportunity to earn Plan credit and to thereby increase their Plan payments. In addition, Participants who are active at the time of reaching EA receive an additional death benefit of$20,000. Fiduciary Investment and Control Service credit is determined based on information certified to the Board of Fire Commissioners by the Chief of each fire company having members who participate in the Plan. Each fire company must maintain all required records on forms prescribed by the Board of Fire Commissioners. The Board of Fire Commissioners of the District has retained and designated Penflex, Inc. to assist in the administration of the Plan. The designated Plan administrator's functions include calculating the amount to be contributed at the end of each year based upon the criteria set forth in the Plan Document. Disbursements of Plan assets for the payment of benefits or administrative expenses must be approved by the Board of Fire Commissioners and delivered to the Custodian through a Payment Schedule. The Board of Fire Commissioners of the District has retained and designated Nationwide Life Insurance as the Custodian of the Plan's assets. Nationwide Life Insurance shall make payments to Plan Participants and their beneficiaries in accordance with the Payment Schedule. Plan assets are required to be held in trust by Length of Service Award Program legislation, for the exclusive purpose of providing benefits to Participants and their beneficiaries or for the purpose of defraying the reasonable expenses of the operation and administration of the Plan. The trust agreement is dated January 1, 1992 as amended, and the trustees are the Board of Fire Commissioners of the District. Authority to invest Plan assets is vested in the Board of Fire Commissioners of the District. Subject to restrictions in the Plan document, Plan assets are invested in accordance with a statutory"prudent person" rule. The Plan document restricts the Trustee from investing in securities or obligations issued by the Mattituck Fire District, other than a de minimis amount held in common investment vehicles in which the Trustee invests. The District is required to retain an actuary to determine the amount of the District's contributions to the plan. The actuary retained by the District for this purpose is Kati Young, ASA, EA, MAAA of Penflex, Inc. Portions of the following information are derived from a,report prepared by the actuary dated March 7, 2019. -21 - MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 4. COMMITMENTS AND CONTINGENCIES (continued) B. LENGTH OF SERVICE AWARD PROGRAM (LOSAP) (continued) Plan Financial Condition Assets and Liabilities: Actuarial present value of benefits at December 31, 2018 $ 5,324,668 Less: assets available for benefits, Cash (Other) $ 1,533,474 Small Cap Stocks 387,924 Internationals stocks 411,716 Mid-cap stocks 393,242 Large-cap stocks 1,414,306 Benefits payable 20,060 Total net assets available for benefits 4,160,722 Total unfunded benefits $ 1,163,946 Receipts and Disbursements Plan net assets, beginning of year $ 4,394,572 Changes during the year: Plan contributions $ 271,000 Changes in fair market value of investments (223,864) Investment expense (24) Plan benefit withdrawals (282,202) Changes in benefits payable 1,240 Plan net assets, end of year $ 4,160,722 Prior Service Costs There are no prior service costs associated with the Plan. Separately Amortized Costs The unfunded liability for additional benefits earned after attainment of the EA is being amortized over three years at 5.50%. The unfunded liability for the other unfunded accrued liability is being amortized over fifteen years at 5.50%. Contributions Amount of District's contribution recommended by actuary: $ 270,938 Amount of District's actual contribution: $ 271,000 Administration Fees Fees paid to designated Plan administrator/actuary: $ 4,862 -22- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS r 4. COMMITMENTS AND CONTINGENCIES (continued) B. LENGTH OF SERVICE AWARD PROGRAM (LOSAP) (continued) Funding Methodology and Actuarial Assumptions: Normal Costs The actuarial valuation methodology used by the actuary to determine the District's contribution is the "Attained Age Normal Cost Method". Under this cost method, there are two components to the annual cost each year. The first component, the "normal cost', is equal to the level annual payment required to fund the current Participants' projected benefits based on their service credit earned after the effective date of the Plan and before the EA. The second component, the annual amortization cost, equals the level annual payments required to fund the liabilities accrued due to (1) service credit earned before the effective date of the Plan, (2) service credit earned after the attainment of the EA, or(3) other unfunded accrued liability over the amortization period. Amortization period for post-EA service liability—3 years Amortization period for unfunded program liability as of 1/1/16—15 years Under the Attained Age Normal Cost Method, the unfunded accrued liability is calculated using the Unit Credit Cost Method. Actuarial gains and losses are amortized over the future years of firefighting service before the EA for the group of firefighters participating in the Plan on the valuation date. Higher than expected investment income, for example, in any one particular year will reduce the normal cost in that year and in each of the future years based upon the ages of the current firefighters participating in the program on the valuation date. Likewise, losses to the Plan's Trust Fund will result in an increase in the future annual normal cost. The assumptions used by the actuary to determine the District's contribution and the actuarial present value of benefits are: Assumed rate of return on investment: 5.50%, net of investment expenses Mortality Tables used for: Withdrawal: None Disability: None Retirement: 100%at Entitlement Age Pre-Entitlement Age: RP-2014 Mortality Table without projection for calculation of self-insured death benefits only Post-Entitlement Age: RP-2014 Male Mortality Table without projection C. LEASE AGREEMENTS The District leases communication tower space in Sag Harbor, New York for a radio signal repeater under an operating lease agreement which commenced May 27, 2009. The term of the lease agreement is for a five (5) year period with 4 automatic renewal terms for an additional five (5) year period.The lease expires May 31, 2033. The lease payments are $500 per month increased on the anniversary of the commencement date by an annual escalator of three (3) percent. In addition, there is an annual site inspection fee of $500 increased on the anniversary of the commencement date by the three (3) percent annual escalator. Expenditures under this operating lease for the year ended December 31, 2018 were approximately$7,700. -23- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS 4. COMMITMENTS AND CONTINGENCIES (continued) C. LEASE AGREEMENTS (continued) Minimum annual commitments under the operating leases described above are as follows: Year ended December 31, 2019 $ 7,952 2020 8,192 2021 8,439 2022 8,691 2023 8,950 2024-2028 48,955 2029-2033 49,668 $ 140,847 REQUIRED SUPPLEMENTARY INFORMATION -24- MATTITUCK FIRE DISTRICT GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2018 Variance Original Final Positive REVENUES Budget Budget Actual Encumbrances (Negative) Real property taxes $ 1,984,237 $ 1,984,237 $ 1,984,275 $ 38 Use of money and property 19,259 19,259 Sale of apparatus and equipment 3,500 3,500 Insurance recoveries and refunds 95,335 95,335 Miscellaneous income 20 20 Total Revenues 1,984,237 1,984,237 2,102,389 118,152 EXPENDITURES Personal services 192,804 215,954 198,691 $ 17,250 13 Equipment and capital outlay 112,500 202,466 188,986 9,000 4,480 Fire protection 643,002 700,402 646,080 24,551 29,771 Employee benefits 414,416 445,016 443,371 1,645 Debt service 108,515 108,515 108,515 -0- Total Expenditures 1,471,237 1,672,353 1,585,643 50,801 35,909 Net Change in Fund Balance' $ 513,000 $ 311,884 516,746 $ (50,801) $ 154,061 Fund Balance at Beginning of Year 1,872,363 Fund Balance at End of Year $ 2,389,109 The difference in the net change in fund balance for the original budget and the final budget is due to budget amendments for$54,222 related to the carryforward of prior year encumbrances and $146,894 in unbudgeted capital reserve expenditures incurred during the year that were approved via permissive referendums. -25- MATTITUCK FIRE DISTRICT GENERALFUND SCHEDULE OF DETAILED EXPENDITURES AND APPROPRIATIONS Year Ended December 31, 2018 Variance Original Final Positive Budget Budget Actual Encumbrances (Negative) Personal Services $ 192,804 $ 215,954 $ 198,691 $ 17,250 $ 13 Equipment and Capital Outlay 112,500 202,466 188,986 9,000 4,480 Fire Protection Services Administrative Expenses Office supplies 17,000 18,600 18,564 36 Association dues 1,250 1,350 1,324 26 Legal and audit fees 74,500 74,140 67,880 6,260 Publications 7,750 8,650 2,600 6,000 50 Election expense 1,000 1,060 1,052 8 Total Administrative Expenses 101,500 103,800 91,420 6,000 6,380 Utility and Water Expenses Gas and electric 59,000 52,900 47,682 5,218 Telephone 14,500 14,560 14,556 4 Hydrant rental 32,000 31,940 31,564 376 Total Utility and Water Expenses 105,500 99,400 93,802 -0- 5,598 Firefighters Expense Uniforms 10,000 11,150 11,102 48 Medical exams 34,000 32,850 32,541 309 Inspection dinner 20,000 20,000 19,075 925 Total Firefighters Expense 64,000 - 64,000 62,718 -0- 1,282 Travel and Convention Expenses 19,500 23,200 16,503 6,600 97 Building Costs Building repairs 107,500 174,000 173,990 0 10 Total Building Costs 107,500 174,000 173,990 -0- 10 Fire Equipment and Alarm Fire alarm service 2,500 200 155 45 Gas and diesel 20,000 15,000 14,889 111 Repairs and maintenance 125,000 136,100 124,087 11,951 62 Medical supplies 25,000 17,800 17,718 82 Total Fire Equipment and Alarm 172,500 169,100 156,849 11,951 300 Insurance Costs Vehicle and property 72,502 66,902 50,798 16,104 Total Insurance Costs 72,502 66,902 50,798 -0- 16,104 Total Fire Protection Services 643,002 700,402 646,080 24,551 29,771 (continued) -26- MATTITUCK FIRE DISTRICT GENERALFUND SCHEDULE OF DETAILED EXPENDITURES AND APPROPRIATIONS Year Ended December 31, 2018 Variance Original Final Positive Budget Budget Actual Encumbrances (Negative) Employee Benefits Social security 14,750 15,250 15,191 59 State retirement system 30,100 29,600 29,185 415 Service award program 250,000 275,900 275,862 38 Workers'compensation insurance 59,646 65,246 65,199 47 Unemployment insurance 1,050 1,050 459 591 Life insurance 15,250 13,350 12,934 416 Medical and accident insurance 43,620 44,620 44,541 79 Total Employee Benefits 414,416 445,016 443,371 -0- 1,645 Debt Service Principal 102,000 102,000 102,000 -0- Interest 6,515 6,515 6,515 -0- Total Debt Service 108,515 108,515 108,515 -0- -0- Totals $ 1,471,237 $ 1,672,353 $ 1,585,643 $ 50,801 $ 35,909 OTHER REPORT -27- IE _ 0 CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS To Board of Fire Commissioners Mattituck Fire District Mattituck, New York We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued r" by the Comptroller General of the United States, the Balance Sheet — Governmental Fund, Statement of Revenues, Expenditures and Changes in Fund Balance — Governmental Fund, the Statement of Fiduciary Assets and Liabilities — Fiduciary Fund information and the related notes to the financial statements of the Mattituck Fire District, New York, as of and for the year ended December 31, 2018, which collectively comprise the Mattituck Fire District, New York's financial statements, and have issued our report thereon dated June 7, 2019. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Mattituck Fire District, New York's internal control over financial reporting (Internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Mattituck Fire District, New York's internal control. Accordingly, we do not express an opinion on the effectiveness of the Mattituck Fire District, New York's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Mattituck Fire District's financial statements will not be prevented, or detected and corrected on a timely basis. 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 governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in Internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been Identified. �J BEYOND THE NUMBERS... �— ALBRECHT,VIGGIANO,ZURECK&COMPANY, P.0 245 PARK AVENUE,39TH FLOOR 25 SUFFOLK COURT NEW YORK, NY 10167 HAUPPAUGE, NY 11788-3715 T.212 792.4075 T• 631 434 9500 F:631.434.9518 www.avz com INDEPENDENT MEMBER OF BKR INTERNATIONAL -28- Compliance and Other Matters As part of obtaining reasonable assurance about whether Mattituck Fire District, New York's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Mattituck Fire District's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Mattituck Fire District's internal control and compliance. Accordingly,this communication is not suitable for any other purpose. n c" Hauppauge, New York June 7, 2019 r i�