HomeMy WebLinkAbout2018 FI Waste Management District FISHERS ISLAND WASTE MANAGEMENT DISTRICT
State of New York
FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION WITH
INDEPENDENT AUDITOR'S REPORT
December 31,2018
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
TABLE OF CONTENTS
I'a e
Independent Auditor's Report 1
Management's Discussion and Analysis(MD&A) 3
Basic Financial Statements:
Statement of Net Position 9
Statement of Activities 10
Balance Sheet-Governmental Funds 11
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 12
Statement of Revenues,Expenditures and Changes in Fund Balance-Governmental Funds 13
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balance to the Statement of Activities 14
Notes to Financial Statements 15
Required Supplementary Information other than MD&A:
Schedule of Revenues, Expenditures and Changes in Fund Balance-
Budget and Actual-General Fund 21
VINCENT D.CULLEN,CPA
�(
(1950-2013)
CULLEN .&- DANOWSmKIm,mmLLP JAMES E.DANOWSK[,CPA
CERTIFIED PUBLIC ACCOUNTANTS PETER F.RODRIGUEZ,CPA
JILL S.SANDERS,CPA
DONALD J.HOFFMANN,CPA
CHRISTOPHER V.REINO,CPA
ALAN YU,CPA
INDEPENDENT AUDITOR'S REPORT
To the Board of Commissioners
Fishers Island Waste Management District
Fishers Island,New York
We have audited the accompanying financial statements of the governmental activities and each major fund of the
Fishers Island Waste Management District (District), a component unit of the Town of Southold, New York, as of and
for the year ended December 31, 2018, and the related notes to the financial statements,which collectively comprise
the District's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America;this includes 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 fraud or error.
Auditor's Responsibility
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.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 auditor's 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 entity's preparation 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 entitys 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
opinions.
1650 ROUTE 112,PORT JEFFERSON STATION,NEW YORK 11776-3060
PHONE:631-473-3400•FAX:631-473-4863 •WWW.CDLLP.NET
Opinions
In our opinion, the financial statements referred to previously present fairly, in all material respects,the respective
financial position of the governmental activities and each major fund of the Fishers Island Waste Management District
as of December 31,2018,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.
Other Matters—Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management's discussion and
analysis and schedule of revenues, expenditures and changes in fund balance - budget and actual- general fund on
pages 3 through 8 and 21,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.
June 12,2019
.2 m.
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
The Fishers Island Waste Management District's (District) discussion and analysis of the financial performance
provides an overall review of the District's financial activities for the fiscal year ended December 31, 2018, in
comparison with the year ended December 31,2017,with emphasis on the current year. The intent of this discussion
and analysis is to look at the District's financial performance as a whole. This should be read in conjunction with the
financial statements,which immediately follow this section.
1. FINANCIAL HIGHLIGHTS
Key financial highlights for fiscal year 2018 are as follows:
• The District's total net position,as reflected in the government-wide financial statements, decreased by
$120,928. This was due to an excess of expenses over revenues using the economic resources
measurement focus and the accrual basis of accounting. The District's total net position was$2,679,977
at December 31, 2018.
• The District's general fund total fund balance,as reflected in the fund financial statements,increased by
$17,963. This was due to an excess of revenues over expenditures using the current financial resources
measurement focus and the modified accrual basis of accounting. The District's general fund total fund
balance was $325,689 at December 31,2018.
2. OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of three parts - Management's Discussion and Analysis (MD&A) (this section),the
basic financial statements, and required supplementary information. The basic financial statements consist of
government-wide financial statements, fund financial statements, and notes to financial statements.A graphic
display of the relationship of these statements follows:
�uu'' elle
I
A. Government-Wide Financial Statements
The government-wide financial statements are organized to provide an understanding of the fiscal
performance of the District as a whole in a manner similar to a private sector business. There are two
government-wide financial statements-the Statement of Net Position and the Statement of Activities. These
statements provide both an aggregate and long-term view of the District's finances.
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FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
These statements utilize the economic resources measurement focus and the accrual basis of accounting.
This basis of accounting recognizes the financial effects of events when they occur, without regard to the
timing of cash flows related to the events.
The Statement of Net Position
The Statement of Net Position presents information on all of the District's assets and liabilities, with the
difference between the two reported as net position. Increases or decreases in net position may serve as a
useful indicator of whether the financial position of the District is improving or deteriorating.
The Statement of Activities
The Statement of Activities presents information showing the change in net position during the fiscal year.
All changes in net position are recorded at the time the underlying financial event occurs. Therefore,
revenues and expenses are reported in the statement for some items that will result in cash flow in future
fiscal periods.
B. Fund Financial Statements
The fund financial statements provide more detailed information about the District's funds, not the District
as a whole. A fund is a grouping of related accounts that is used to maintain control over resources that have
been segregated for specific activities or objectives. The District may use fund accounting to ensure
compliance with finance-related legal requirements. The funds of the District are reported in the
governmental funds.
These statements utilize the current financial resources measurement focus and the modified accrual basis
of accounting. This basis of accounting recognizes revenues in the period that they become measurable and
available.It recognizes expenditures in the period in which the District incurs the liability,except for certain
expenditures related to long-term liabilities,which are recognized as expenditures to the extent the related
liabilities matures each period. Additionally, capital asset additions are reported as expenditures in
governmental funds, whereas they are capitalized and depreciated in the government-wide financial
statements.
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However, the governmental fund financial
statements focus on shorter term inflows and outflows of spendable resources, as well as on balances of
spendable resources available at the end of the fiscal year for spending in future years. Consequently, the
governmental fund statements provide a detailed short-term view of the District's operations and the
services it provides.
Because the focus of governmental funds is narrower than that of government-wide financial statements, it
is useful to compare the information presented for governmental funds with similar information presented
for governmental activities in the government-wide financial statements. By doing so, you may better
understand the long-term impact of the District's near-term financing decisions. Both the governmental
funds Balance Sheet and the governmental funds Statement of Revenues,Expenditures and Changes in Fund
Balance provide a reconciliation to facilitate this comparison between governmental funds and
governmental activities.
The District maintains one individual governmental fund,the general fund.
M4
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
3. FINANCIAL ANALYSIS "THE DI TRI 'I"A..A WII LE
A. Net Position
The District's total net position decreased by$120,928 between fiscal year 2018 and 2017.A summary of the
District's Statements of Net Position is as follows:
Increase Percentage
2018 2017 Decrease Chane
Current and Other Assets $ 351,981 $ 328,721 $ 23,260 7.08 %
Capital Assets,Net 2,354,288 2,493,179 ,891) (5.57)%
Total Assets 2,706,269 2,821,900 (115,631) (4.10)%
Current and Other Liabilities 26,292 20,995 5,297 25.23 %
Net Position
Net Investment in Capital Assets 2,354,288 2,493,179 (138,891) (5.57)%
Unrestricted 325,689 307,726 17,963 5.84 %
Total Net Position $ 2,679,977 $ 2,800,905 $ 120,9 (4.32)%
Current and other assets increased by $23,260, as compared to the prior year. The increase is primarily
related to an increase in the principal amount invested in certificates of deposit with maturities greater than
three months of$51,359, offset by a decrease in cash of$27,318.
Capital assets,net decreased by$138,891,as compared to the prior year.This decrease is due to depreciation
expense in excess of capital asset additions. The accompanying Notes to the Financial Statements, Note 5
"Capital Assets"provides additional information.
Current and other liabilities increased by$5,297,as compared to the prior year.This increase is attributable
to an increase in payroll taxes payable of$6,743, offset by a decrease in accounts payable of$1,446. The
payroll taxes payable increase and the accounts payable decrease,is mainly due to timing differences of bills
paid at year end.
The net investment in capital assets is the investment in capital assets at cost such as land, buildings and
improvements, and machinery and equipment, net of depreciation. This number decreased over the prior
year because of depreciation expense of$138,891.There were no capital asset additions in fiscal year 2018.
The unrestricted amount of$325,689 relates to the balance of the District's net position.
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FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
B. Changes in Net Position
The results of operations as reported in the Statement of Activities are as follows:.
Increase Percentage
2018 2017 Decrease Change
Revenues
Program Revenues
Charges for Services $ 53,850 $ 56,188 $ (2,338) (4.16)%
Operating Grants 8,726 (8,726) (100.00)%
General Revenues
Real Property Taxes 855,586 566,554 289,032 51.02 %
Other 7,717 23,057 15,340 (66.53)%
Total Revenues 917,153 654,525 262,628 40.12 %
Expenses
General Government Support 1,038,081 936,193 101,888 10.88
Decrease in Net Position $ 120,928) $ (281,668) $ 1.60,740 (57.07)%
The District primarily relies on real property taxes to support its operations. The net increase in total
revenues in 2018 as compared to 2017 was $262,628 as shown above. The increase is due to real property
taxes of$289,032.
The total expenses in 2018 were$101,888 or 10.88%greater than 2017. In 2018,the District had increased
consulting expenses of 27,464, depreciation expense of$28,284,and salaries of$58,073.
4. FINANCIAL ANALY E DISTRI ' ' DS
At December 31, 2018, the general fund, which is the only governmental fund, reported a fund balance of
$325,689, which is an increase of$17,963 from the prior year. This increase is due to revenues in excess of
expenditures for the fiscal year, and is the same as the change in unrestricted net position.
Increase
2018 2017 � (Decrease)
General Fund
Nonspendable:Prepaids $ 21,669 $ 22,449 $ (780)
Assigned:Designated 228,699 237,355 (8,656)
Unassigned:Fund balance 75,321 47,922 27,399
$ 325,689 $ 307,726 $ 17,963
. 6..
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
5. G NI'RAL F D B D HIGHLIGHTS
A. 2018 Budget
The District's general fund original budget for the year ended December 31,2018 was$908,975.
The budget was primarily funded by real property taxes.
B. Change in General Fund's Unassigned Fund Balance (Budget to Actual)
The general fund's unassigned fund balance is the component of total fund balance that is the residual of
prior years'excess revenues over expenditures,net of transfers to restricted fund balances and assignments,
such as amounts classified as nonspendable.The change in this balance demonstrated through a comparison
of the actual revenues and expenditures for the year compared to budget follows:
Opening,Unassigned Fund Balance $ 47,922
Revenues Over Budget 8,178
Expenditures Under Budget 9,785
Change in Nonspendable Fund Balance 780
Net Change in Assigned Fund Balance 8,656
Closing,Unassigned Fund Balance $ 75,321
pen in ,Unassigned Eund Ela 7
The $47,922 shown in the table is the portion of the District's December 31, 2017 fund balance that was
unassigned.
&venues Under Jud e
The 2018 budget for revenues was$908,975.Actual revenues received for the year were $917,153.Actual_
revenues were more than estimated or budgeted revenues by $8,178. This difference increases the
unassigned portion of the general fund-fund balance from December 31,2017 to December 31,2018.
( aadturwrBjd et
The 2018 budget for expenditures was $908,975. Actual expenditures for 2018 were $899,190. The final
budget was under expended by $9,785. This under expenditure increases the unassigned portion of the
general fund-fund balance from December 31,2017 to December 31,2018.
Change
LLt Nil roc) k ie Fuad l .nc
The District prepaid various insurance policies at December 31, 2018. This resulting balance sheet asset
(prepaids) cannot be spent because it is not in a spendable form,meaning it will not be converted to cash.
Accordingly,an equal amount of fund balance is classified as nonspendable.The decrease in nonspendable
fund balance increases unassigned fund balance.
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FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
hLiat Change in A g d Ftp xnd BaLiDge
Assigned fund balance includes amounts earmarked for specific purposes. The decrease in assigned fund
balance increases unassigned fund balance.
Closine. [fin a�Fwarnc Balk
Based upon the summary changes shown in the above table,the District will begin the 2019 fiscal year with
an unassigned fund balance of$75,321. This is a $27,399 increase from the prior year unassigned fund
balance.
6. CAPITAL ASSETS AND LONG- RM DEB
At December 31,2018,the District had invested in a broad range of capital assets,as indicated in the table below.
The net decrease in capital assets is due to depreciation of$138,891. There were no capital additions for the
year ended December 31, 2018.A summary of the District's capital assets, net of depreciation at December 31,
2018 and December 31,2017 is as follows:
Increase
2018 2017 Decrease)
Land $ 517,262 $ 517,262 $ -
Buildings and improvements 1,585,264 1,676,702 (91.,438)
Machinery and equipment 251,762 299,215 (47,453
P $ 2,493,179 $ (138,89
Capital assets,net $ 2,354,288
The District has no outstanding long-term debt.
7. ECONOMIC FACTORS AND NE YEAR'S BIJDGf3T
A. Subsequent Year's Budget
The general fund budget for the year ending December 31, 2019 is $917,531. This is an increase of$8,556
or 0.940/6 from the previous year's budget. T he District budgeted property tax revenues at an$8,556 increase
(1.00%) over the prior year's estimate.
B. Tax Cap
New York State law limits the increase in the property tax levy of local governments to the lesser of 2% or
the rate of inflation.There are additional statutory adjustments in the law.Local governments may override
the tax levy limit by first passing a local law that allows for the tax levy limit to be exceeded. The override
vote requires a 60% vote of the total voting power of the governing board. The District's 2019 tax levy
required an override vote.
8. ONT CTING THE ICT
This financial report is designed to provide the reader with a general overview of the District's finances and to
demonstrate the District's accountability for the funds it receives. Requests for additional information can be
directed to:
John Patterson, Chairman
P.O.Box 22
Fishers Island, NY 06390
,.g.
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Statement of Net Position
December 31,2018
ASSETS
Cash $ 36,853
Investments 293,459
Prepaids 21,669
Capital assets:
Not being depreciated-land 517,262
Being depreciated,net of accumulated depreciation 1,837,026
Total Assets 2,706,269
LIABILITIES
Payables
Accounts payable 18,975
Payroll taxes payable 7,317
Total Liabilities 26,292
NET POSITION
Net investment in capital assets 2,354,288
Unrestricted 325,689
Total Net Position $ 2,679,977
See Notes to Financial Statements -9
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Statement of Activities
For The Year Ended December 31,2018
Program Net(Expense)
Revenues Revenue and
Charges for Changes in
Exenses Services Net Position
FUNCTIONS/PROGRAMS
General government support $ 1,038,081 $ $ (1,038,081)
Compost facility 53,850 53,850
Total Functions and Programs $ 1,038,081 $ 53,850 (984,231)
GENERAL REVENUES
Real property taxes 855,586
Use of money and property 7,717
Total General Revenues 863,303
Change in Net Position (120,928)
Total Net Position-Beginning of Year 2,800,905
Total Net Position-End of Year $ 2,679,977
See Notes to Financial Statements
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Balance Sheet-Governmental Funds
December 31,2018
Total
Governmental
General Funds
ASSETS
Cash $ 36,853 $ 36,853
Investments 293,459 293,459
Prepaids 21,669 21,669
Total Assets $ 351,981 $ 351,981
LIABILITIES
Payables
Accounts payable $ 18,975 $ 18,975
Payroll taxes payable 7,317 7,317
Total Liabilities 26,292 26,292
FUND BALANCE
Nonspendable: Prepaids 21,669 21,669
Assigned,Designated for:
Compost facility/monitoring 93,192 93,192
Compost facility/equipment 17,550 17,550
Other equipment 17,957 17,957
Wages 100,000 100,000
Unassigned:Fund balance 75,321 75,321
Total Fund Balance 325,689 325,689
Total Liabilities and Fund Balance $ 351,981 $ 351,981
See Notes to Financial Statements - 11 -
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
December 31,2018
Total Governmental Fund Balance $ 325,689
Amounts reported for governmental activities in the Statement of Net Position
are different because:
The cost of building and acquiring capital assets(land,buildings,
equipment)financed from the governmental funds are reported as
expenditures in the year they are incurred,and the assets do not appear
on the Balance Sheet.However,the Statement of Net Position includes
those capital assets among the assets of the District as a whole,and their
original costs are expensed annually over their useful lives.
Original cost of capital assets $ 4,049,342
Accumulated depreciation (1,695,054)
2,354,288
Total Net Position $ 2,679,977
See Notes to Financial Statements - 12 -
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Statement of Revenues,Expenditures
and Changes in Fund Balance-Governmental Funds
For The Year Ended December 31,2018
Total
Governmental
General Funds
REVENUES
Real property taxes $ 855,586 $ 855,586
Use of money and property 7,717 7,717
Compost facility 53,850 53,850
Total Revenues 917,153 917,153
EXPENDITURES
General government support 743,536 743,536
Transportation 69,789 69,789
Employee benefits 85,865 85,865
Total Expenditures 899,190 899,190
Net Change in Fund Balance 17,963 17,963
Fund Balances-
Beginning of Year 307,726 307,726
End of Year $ 325,689 $ 32 x,689
See Notes to Financial Statements - 13 -
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Reconciliation of the Governmental Funds Statement of Revenues,Expenditures and
Changes in Fund Balance to the Statement of Activities
For The Year Ended December 31,2018
Net Change in Fund Balance $ 17,963
Amounts reported for governmental activities in the Statement of Activities
are different because:
` i al 1� iated l��l'leren. c �
Capital outlays to purchase or build capital assets are reported in
governmental funds as expenditures.However,for governmental
activities those costs are capitalized and shown in the Statement of Net
Position and allocated over their useful lives as annual depreciation
expense in the Statement of Activities.This is the amount by which
depreciation exceeded capital outlays in the period.
Capital outlays $
Depreciation expense 138,891
— (138,891
Change in Net Position of Governmental Activities $ 120,928)
See Notes to Financial Statements - 14-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
LSU MMAID' IGNIFI N I`Af 1IhlT1N C[ES
Fishers Island Waste Management District (District) is governed by Town Law and other general laws of the
State of New York. The Board of Commissioners is the legislative body responsible for overall operations. The
Board of Commissioners consists of five members. The primary function of the District is to provide safe and
efficient disposal of household garbage, furniture, appliances, recyclables, construction waste, and yard and
landscaping debris.
The financial statements of the District have been prepared in conformity with accounting principles generally
accepted in the United States of America (GAAP) for governmental units. The Governmental Accounting
Standards Board (GASB) is the standard-setting body for establishing governmental accounting and financial
reporting principles. The more significant of these accounting policies are as follows:
A. Financial Reporting Entity
The Town of Southold, New York(Town) is financially accountable, as a result of fiscal dependency, for the
District. Long-term debt and operating deficits (if any) of the District,which are backed by the full faith and
credit of the Town, and other fiscal matters, result in a fiscal interdependency with the Town. Accordingly,
the District has been determined to be a component unit of the Town of Southold, New York.
B. Basis of Presentation
Govern sent-Wide, EinanciaLStat2rneniL
The Statement of Net Position and the Statement of Activities present information about the overall
governmental financial activities of the District.The Statement of Net Position presents the financial position
of the District at fiscal year end. The Statement of Activities presents a comparison between expenses for
waste disposal and revenues for the fiscal year. Program revenues include fees charged for certain disposal
services and operating grants.Revenues that are not classified as program revenues,including real property
taxes, are presented as general revenues.
Fund_Fing l a 'ta eme i
The fund financial statements provide information about the District's funds. The District only has one fund,
the general fund. The general fund is the principle operating fund of the District and is used to account for
all financial transactions of the District except those required to be accounted for in another fund, of which
there are none.
C. Measurement Focus and Basis of Accounting
Accounting and financial reporting treatment is determined by the applicable measurement focus and basis
of accounting. Measurement focus indicates the type of resources being measured such as current financial
resources or economic resources. The basis of accounting indicates the timing of transactions or events for
recognition in the financial statements.
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the
time liabilities are incurred, regardless of when the related cash transaction takes place. Non-exchange
transactions,in which the District gives or receives value without directly receiving or giving equal value in
exchange, include real property taxes. On an accrual basis, revenue from real property taxes is recognized
in the fiscal year for which the taxes are levied.
- 15-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
The fund financial statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Revenues are recognized when measurable and available. The District
considers all revenues reported in the general fund to be available if the revenues are collected within 60
days after the end of the fiscal year. Expenditures are recorded when the related fund liability is incurred,
except for certain expenditures related to long-term liability,if any,which are recognized as expenditures to
the extent they have matured. General capital asset acquisitions are reported as expenditures in the
governmental funds.
D. Real Property Taxes
Property taxes are collected by the Town of Southold Receiver of Taxes on behalf of the District.The Town
of Southold Receiver of Taxes collects all property taxes for the Town,Suffolk County,Town Special Districts
and School Districts.Town and County taxes are levied annually,and are due by October 1st.The Town remits
the amount of real property tax levied to the District from December to June. Responsibility for collection of
unpaid taxes is assumed by Suffolk County.There was no amount due from the Town at December 31,2018.
E. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported revenues and expenses/expenditures during the reporting period. Accordingly,
actual results could differ from those estimates. Estimates and assumptions are made in a variety of areas,
including potential contingent liabilities.
F. Cash and Cash Equivalents/Investments
Cash and cash equivalents consist of cash on hand, bank deposits and investments with a maturity date of
three months or less from date of acquisition.
Investments consist of certificates of deposit with maturity dates of more than three months from date of
acquisition and are reported at fair value,based on quoted market prices.
G. Prepaid Items
Prepaid items represent payments made by the District for which benefits extend beyond year-end. These
payments to vendors reflect costs applicable to future accounting periods and are recorded as assets on the
Statement of Net Position and Balance Sheet using the consumption method.Under the consumption method,
a current asset for the prepaid amounts is recorded at the time of purchase and an expense/expenditure is
reported in the year the goods or services are consumed.
H. Capital Assets
Capital assets are reflected in the government-wide financial statements. Capital assets purchased or
acquired with an original cost of$10,000 or more are required to be capitalized according to District policy
and are reported at actual cost, when the information is available, or estimated historical cost based on
professional third-party information. Donated assets are reported at acquisition value at the date of
donation.
16
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
All capital assets,except land and construction in progress,are depreciated on a straight line basis over their
estimated useful lives. Costs incurred for repairs and maintenance are expensed as incurred. Estimated
useful lives of capital assets as reported in the government-wide statements are as follows:
Estimated
Useful Life
Buildings 20-40 years
Improvements and other 15-30 years
Machinery and equipment 8-10 years
Infrastructure 25 years
1. Equity Classifications
( ae.tinnien't-M&Statements
In the government-wide statements there are three potential classes of net position:
Net investment in capital assets - consists of net capital assets (cost less accumulated depreciation)
reduced by outstanding balances of related debt obligations from the acquisitions, construction and
improvements of those assets.
Restricted-reports net position when constraints placed on the assets or deferred outflows of resources
are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or
laws or regulations of other governments, or imposed by law through constitutional provisions or
enabling legislation.
Unrestricted - reports the balance of net position that does not meet the definition of the above two
classifications.
The District's net position consists of net investment in capital assets and unrestricted resources..
Fund Statements
The fund statements report fund balance classifications according to the relative strength of spending
constraints placed on the purpose for which resources can be used,as follows:
Nonspendable - Consists of amounts that are inherently nonspendable in the current period either
because of their form or because they must be maintained intact.Nonspendable fund balance consists of
prepaids.
Restricted - Consists of amounts that are subject to externally enforceable legal purpose restrictions
imposed by creditors, grantors, contributors, or laws and regulation of other governments; or through
constitutional provisions or enabling legislation. The District has no restricted fund balance.
Assigned- Consists of amounts that are subject to a purpose constraint that represents an intended use
established by the District's Board of Commissioners. The purpose of the assignment must be narrower
than the purpose of the general fund.
Unassigned - represents the residual classification for the District's general fund and could report a
surplus or deficit.
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FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
Fund Balance Classification
Any portion of fund balance may be applied or transferred for a specific purpose by law, voter approval if
required by law or by formal action of the Board of Commissioners if voter approval is not required.
Amendments or modification to the applied or transferred fund balance must also be approved by formal
action of the Board of Commissioners.
In circumstances where an expenditure is incurred for a purpose for which amounts are available in multiple
fund balance classifications (that is restricted, assigned or unassigned) the expenditure is to be spent first
from the restricted fund balance to the extent appropriated by either the original budget or a board approved
budget revision and then from the assigned fund balance to the extent that there is an appropriation and
then from the unassigned fund balance.
2. ^ PLANATI N OF cEwrAIN VIEEL-MENCES BETWEEN THE fUND STATEMENTS AND THE- s NMENT-
WIDE STATEMENTS
Due to the differences in the measurement focus and basis of accounting used in the fund statements and the
government-wide statements, certain financial transactions are treated differently. The basic financial
statements contain a full reconciliation of these items. The differences result primarily from the economic
resource measurement focus of the government-wide statements, compared with the current financial
resources measurement focus of the fund statements.
A. Total Fund Balances of General Fund vs.Net Position of Governmental Activities
Total fund balances of the District's general fund differ from net position of governmental activities reported
in the Statement of Net Position.This difference primarily results from the long-term economic focus of the
Statement of Net Position versus the current financial resources focus of the governmental fund Balance
Sheet.
B. Statement of Revenues,Expenditures and Changes in Fund Balance vs.Statement of Activities
Differences between the Statement of Revenues, Expenditures and Changes in Fund Balance and the
Statement of Activities can fall into any of three broad categories.
Zoon -Term Revenue and :per ifferenee
Long-term revenue differences arise because governmental funds report revenues only when they are
considered "available",whereas the Statement of Activities reports revenues when earned. Differences in
long-term expenses arise because governmental funds report on a modified accrual basis, whereas the
accrual basis of accounting is used on the Statement of Activities.
,pital Related Differences
Capital related differences include the difference between proceeds from the sale of capital assets reported
on fund statements and the gain or loss on the sale of assets as reported on the Statement of Activities,and
the difference between recording an expenditure for the purchase of capital items in the fund statements
and depreciation expense on those items as recorded in the Statement of Activities.
Long-Term Debt Transaction DifferLnic es
Long-term debt transaction differences occur because the issuance of long-term debt provides current
financial resources to governmental funds,but is recorded as a liability in the Statement of Net Position.In
addition, both interest and principal are recorded as expenditures in the fund statements when due and
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FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
payable, whereas interest expense is recorded in the Statement of Activities as it accrues, and principal
payments are recorded as a reduction of liabilities in the Statement of Net Position.
3. STI AR C MPLI C E AND A ` ABI:LITY
A. Budgets
The District administration prepares a proposed budget for approval by the Board of Commissioners for the
general fund, the only fund with a legally adopted budget. The budget is then submitted to the Town of
Southold for inclusion in the Town budget and a public hearing is held thereon.
Appropriations are adopted at the program line item level.
Appropriations established by the adoption of the budget constitute a limitation on expenditures (and
encumbrances) that may be incurred. Appropriations authorized for the year are increased by the amount
of encumbrances carried forward from the prior year.Appropriations lapse at the end of the fiscal year unless
expended or encumbered. Encumbrances will lapse if not expended in the subsequent year.Appropriations
authorized for the current year can be funded by the planned use of specific reserves, and can be increased
by budget amendments approved by the Board of Commissioners as a result of selected new revenue sources
not included in the original budget (when permitted by law) and appropriation of fund balances. These
supplemental appropriations may occur subject to legal restrictions, if the Board approves them because of
a need that exists which was not determined at the time the budget was adopted. No supplemental
appropriations occurred during the year.
Budgets are adopted annually on a basis consistent with GAAP.
B. Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other commitments for the
expenditure of monies are recorded for budgetary control purposes to reserve that portion of the applicable
appropriations,is employed in the general fund.Encumbrances are reported as assignments of fund balance,
since they do not constitute expenditures or liabilities. Expenditures for such commitments are recorded in
the period in which the liability is incurred. Encumbrances are shown in the fund financial state���ents only.
There were no encumbrances at December 31,2018.
4. DEPOSITS ITH EINANCIAL INSTITUTIQN 3 AND INVESTMENTS
The District's investment policies are governed by state statutes and District policy. Resources must be
deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks or trust companies
located within the state. Permissible investments include obligations of the U.S. Treasury and U.S. Agencies,
repurchase agreements and obligations of New York State or its localities.Collateral is required for demand and
time deposits and certificates of deposit not covered by FDIC insurance. Obligations that may be pledged as
collateral are obligations of the United States and its Agencies and obligations of New York State and its
municipalities. Investments are stated at fair value.
Custodial credit risk is the risk that in the event of a bank failure,the District's deposits may not be returned to
it. GASB directs that deposits be disclosed as exposed to custodial credit risk if they are not covered by
depository insurance and the deposits are as follows:
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FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
A. Uncollateralized,
B. Collateralized by securities held by the pledging financial institution, or
C. Collateralized by securities held by the pledging financial institution's trust department or agent but not
in the District's name.
The District's aggregate bank balances and certificates of deposit were covered by FDIC insurance at year end.
The District was not exposed to any material interest rate risk or foreign currency risk.
5. CAPITAL ASSETS
Capital asset balances and activity for the year ended December 31,2018 were as follows:
Balance Balance
12/31/2017 Additions Reductions 12/3112018 ,
Governmental activities
Capital assets not being depreciated
Land $ 517,262 $ $ $ 517,262
Total capital assets
not being depreciated 517,262 - - 517,262
Capital assets being depreciated
Buildings and improvements 2,777,259 2,777,259
Machinery and equipment 754,821 754,821
Total capital assets
being depreciated 3,532,080 3,532,080
Less accumulated depreciation for:
Buildings and improvements 1,100,557 91,438 1,191,995
Machinery and equipment 455,606 47,453 503,059
Total accumulated depreciation 1,556,163 138,891 - 1,695,054
Total capital assets,
being depreciated,net 1,975,917 (138,891) 1,837,026
Capital assets,net $ 2,493,179 $ (138,891) $ - $ 2,354,288
Depreciation expense was$138,891.
6. RISK MANAGEMEN
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; and natural disasters. 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 three years.
7. SUBSEQUENT VENT'
The District has evaluated subsequent events through the date of the auditor's report, which is the date the
financial statements were available to be issued. No significant events were identified that would require
adjustment of or disclosure in the financial statements.
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FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Schedule of Revenues,Expenditures and Changes in Fund Balance
Budget and Actual-General Fund
For The Year Ended December 31,2018
Final Budget
Original Final Variance with
Budget Budget Actual Actual
REVENUES
Real Property Taxes $ 855,575 $ 855,575 $ 855,586 $ 11
Use of Money&Property 3,400 3,400 7,717 4,317
Compost Facility 50,000 50,000 53,850 3,850
Total Revenues $ 908,975 $ 908,975 917,153 $ 8,178
EXPENDITURES
Accounting $ 11,000 $ 11,000 11,000 $ -
Bank Charges 3,100 3,100 3,022 78
Building Maintenance 5,500 6,400 6,381 19
Building Utilities 8,000 15,700 15,639 61
Commissioner's Fees 13,000 17,600 17,572 28
Compost Equipment Maintenance 7,215 7,215 6,116 1,099
Compost Facility Maintenance 7,200 7,158 42
Compost Facility Supplies 1,200 1,175 25
Compost Facility Utilities 3,000 3,500 3,416 84
Consultants 100,000 100,000 99,330 670
Employee Benefits,Taxes&Wages 529,820 454,820 448,832 5,988
Employee Training 6,000 15,500 15,427 73
Equipment Maintenance 26,550 14,950 14,397 553
Ferry Transportation 60,000 69,800 69,789 11
Garbage Tipping Fees&Hauling 77,000 97,100 97,028 72
Hazardous Waste Removal 300 15,600 15,540 60
Insurance 24,870 24,870 24,278 592
Legal Fees 10,000 11,500 11,451 49
Office Expense 4,120 9,820 9,735 85
Transfer Station Utilities 3,500 4,700 4,629 71
Transfer Station Improvements 4,000 4,200 4,166 34
Workers' Compensation 12,000 13,200 13,109 91
Total Expenditures $ 908,975 $ 908,975 899,190 $ 9,785
Net Change in Fund Balance 17,963
Fund Balance-Beginning of Year 307„726
Fund Balance-End of Year $ 325,689
Note to Required Supplementary Information
Budgets are adopted on the modified accrual basis of accounting consistent with accounting principles generally accepted
in the United States of America.
See Paragraph on Required Supplementary Information Included in Auditor's Report - 21 -