HomeMy WebLinkAbout2019 FI Waste Management District FISHERS ISLAND WASTE MANAGEMENT DISTRICT
State of New York
FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION WITH
INDEPENDENT AUDITOR'S REPORT
December 31,2019
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
TABLE OF CONTENTS
Paae
Independent Auditor's Report
1
Management's Discussion and Analysis(MD&A) 3
Basic Financial Statements:
9
Statement of Net Position
10
Statement of Activities
Balance Sheet-General Fund 11
Reconciliation of the General Fund Balance Sheet to the Statement of Net Position 12
Statement of Revenues,Expenditures and Change in Fund Balance-General Fund 13
Reconciliation of the General Fund Statement of Revenues, 14
Expenditures and Change in Fund Balance to the Statement of Activities
15
Notes to Financial Statements
Required Supplementary Information other than MD&A:
Schedule of Revenues,Expenditures and Change in Fund Balance- 21
Budget and Actual-General Fund
VINCENT D.CULLEN,CPA
LLP
(1 950-2013)
CULLEN & DANOWS KI, LLP JAMES E.DANOWSKI,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 31,2019,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 entity'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 nude 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 ofthe governmental activities and each major fund ofthe Fishers island Waste Management District
as of December 31,2019,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 tyre 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 ofthe 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.
May 8,2020
.2-
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, 2019, in
comparison with the year ended December 31,2018,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. INANCIA HIGHII
Key financial highlights for fiscal year 2019 are as follows:
• The District's total net position,as reflected in the government-wide financial statements,decreased by
$60,843. 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$2,619,134
at December 31,2019.
• The District's general fund total fund balance,as reflected in the fund financial statements,increased by
$75,277. 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$400,966 at December 31,2019.
2. E V E TH N NC L S A I ME TS'
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:.
OMAN
Managemen
Statements T]
Analysis
overnment- Fund Financial Financial
Wide Financial Statements Statements
Statements
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
govern ment-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.
.3-
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.
TlIe Sta nipoff_N i Po smti
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 tate ent Act". itis
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. Revenues are
recognized in the period when they are earned and expenses are recognized in the period when the liability
is incurred.Therefore,revenues and expenses are reported inthe 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 terin 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 govern me:nt-wide financial statements. By doing so,the reader 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.
-4-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
3. FINA CI L ANALSI F HE DI T IC"I"A A HH E
A. Net Position
The District's total net position decreased by$60,843 between fiscal year 2019 and 2018.A summary of the
District's Statements of Net Position is as follows:
Increase Percentage
2019 2018 (Decrease Chan
Current and Other Assets $ 417,414 $ 351,981 $ 65,433 18.59 %
Capital Assets,Net 2,218,168 2,354,288 136,120 (5.78)%
Total Assets 2,635,582 2,706,269 (70,687 (2.61)%
Current and Other Liabilities 16,448 26,292 9,844 (37.44)%
Net Position
Net Investment in Capital Assets 2,218,168 2,354,288 (136,120) (5.78)%
Unrestricted 400,966 325,689 75,277 23.11
13'4 $ 2,67'9,977n,843 (2.27)%
Total Net Position $ 2,6. 9,1
Current and other assets increased by $65,433, as compared to the prior year, The increase is primarily
related to an increase in cash of$355,926,offset by a decrease in the principal amount invested in certificates
of deposit with maturities greater than three months of$293,459.
Capital assets,net decreased by$136,120,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 decreased by$9,841,as compared to the prior year.This decrease is attributable
to decreases in accounts payable of$4,605 and payroll taxes payable of$5,239. The decreases are 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 from the prior
year because of depreciation expense of$136,120,There were no capital asset additions in fiscal year 2019.
The unrestricted amount of$400,966 relates to the balance of the District's net position.
5
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
2019 2018 (Decrease) Chan ee
Revenues
Pro am Revenues
Charges for Services $ 48,586 $ 53,850 $ (5,264) (9.78)%
General Revenues
86
Real Property Taxes 4,131 855,586 8,545 1.00
Other 8,315 7,717 598 7.75 %
Total Revenues 921,032 917,153 3,879 0.42 %
Expenses %
General Government Support 981,875 1,038,081 .... (5.41)%
$..
Decrease in Net Position
60,843° $ 120,928) $ 60,085 (49.69)%
The District primarily relies on real property taxes to support its operations. The net increase in total
revenues in 2019 as compared to 2018 was $3,879, as shown above. The increase is due to real property
taxes of$8,545, offset by a decrease in charges for services of$5,264.
The total expenses in 2019 were $56,206 or 5.41% less than 2018. In 2019, the District had decreased
consulting expenses of$77,833 and hazardous waste removal of$15,540,offset by an increase in employee
benefits,taxes,and wages of$38,980.
4. FIN CIA AN LYS C1F THE DISTIIIC 'S l ND
At December 31, 2019, the general fund, which is the only governmental fund, reported a fund balance of
$400,966, which is an increase of$75,277 over the prier 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
2019 2018 (Decrease)_
General Fund
Nonspendable:Prepaids $ 24,635 $ 21,669 $ 2,966
Assigned:Designated 228,699 228,699
Unassigned:Fund balance 147,632 75,321 72,311
400,966
=1====325,689 $ 75,277
-6-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
5. EN RAL F NIl BIID TRY HIGHLIGM
A. 2019 Budget
The District's general fund original budget for the year ended December 31,2019 was$917,531.
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,assignments, and 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 $ 75,321
Revenues Over Budget 3,501
Expenditures Under Budget 71,776
Change in Nonspendable Fund Balance (2,966)
Closing,Unassigned Fund Balance $ 147,632
-QP s
The $75,321 shown in the table is the portion of the District's December 31, 2018 fund balance that was
unassigned.
RgygnmOv r Bucl et
The 2019 budget for revenues was $917,531. Actual revenues recognized for the year were $9121,032.
Actual revenues were more than estimated or budgeted revenues by$3,501.This difference increases the
unassigned portion of the general fund-fund balance from December 31,2018 to December 31,2019.
E—xPdit�t�r sere
The 2019 budget for expenditures was$917,531. Actual expenditures for 2019 were $845,755. The final
budget was under expended by$71,776.This under expenditure increases the unassigned portion of the
general fund-fund balance from December 31,2018 to December 31,2019.
Change in Nanspe�lable Fun� B alac e
The District prepaid various insurance policies at December 31, 2019, This resulting balance sheet asset
(prepaids)cannot be spent because it is not in a spendable form, ineaning it will not be converted to cash.
Accordingly, an equal amount of fund balance is classified as nonspendable.The increase in nonspendable
fund balance decreases unassigned fund balance.
Dja a ance
Based upon the summary changes shown in the above table,the District will begin the 2020 fiscal year with
an unassigned fund balance of$147,632.This is a$72,311 increase over the prior year's unassigned fund
balance.
-7-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
6. CA9aAL—A55—EVS
At December 31,2019,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$136,12,0.There were no capital additions for the
year ended December 31,2019. A summary of the District's capital assets, net of depreciation at December 31,
2019 and December 31,2018 is as fbllows:
Increase
2019 2018
Land $ 517,262 $ 517,262 $
Buildings and improvements 1,496,511 1,585,264 (88,753)
Machinery and equipment 204,395 251,762
_E,367)
Capital assets,net $ 2,218,168 $ 2,354,288 $ (136,120)
7. D NEXT YEAR_S BUD-Ci-E-1
A. Subsequent Year's Budget
The general fund budget for the year ending December 31, 2020 is$943,413, This is an increase of$25,882
or 2.82%from the previous year's budget. The District budgeted property tax revenues at a$17,282 increase
(2.00%) 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 2020 tax levy
required an override vote.
8. CD TA. TINGJ
THE DTR
IS jfT—
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:
Bruce Hubert, Chairman
P.O. Box 22
Fishers Island,NY 06390
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Statement of Net Position
December 31,2019
ASSETS $ 392,779
Cash 24,635
Prepaids
Capital assets: 517,262
Not being depreciated-land 1,700,906
Being depreciated,net of accumulated depreciation
2,,635,582
Total Assets
LIABILITIES
Payables 14,370
Accounts payable 2,078
Payroll taxes payable
Total Liabilities 16,448
NET POSITION 2,218,168
Net investment in capital assets 400,966
Unrestricted
Total Net Position $ 2,619,1.34
See Notes to Financial Statements -
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Statement of Activities
For The Year Ended December 31,2019
Program Net(Expense)
Revenues Revenue and
Charges for Changes in
Ex enses Services Net Position
FUNCTIONS/PROGRAMS $ (981,875)
General government support $ 981,875 $
Compost facility 48,586 48,586
Total Functions and Programs $ 981.,875 $ 48,586 (933,289)
GENERAL REVENUES 864,131
Real property taxes 8,315
Use of money and property
Total General Revenues 872,446
Change in Net Position (60,843)
Total Net Position-Beginning of Year 2,679,977
Total Net Position-End of Year $ 2,619,134
- 10-
See Notes to Financial Statements
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Balance Sheet-General Fund
December 31,2019
General
ASSETS $ 392,779
Cash 24,635
Prepaids
Total Assets $ 417,414
LIABILITIES
Payables
Accounts payable $ 14,370
Payroll taxes payable 2"078
Total Liabilities 16,448
FUND BALANCE
Nonspendable:Prepaids 24,635
Assigned,Designated for:
Compost facility/monitoring 93,192
Compost facility/equipment 17,550
Other equipment 17,957
100,000
Wages
147,632
Unassigned:Fund balance
Total Fund Balance 400,.966
Total Liabilities and Fund Balance $ 41.7,414
See Notes to Financial Statements
- 11 -
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Reconciliation of the General Fund Balance Sheet
to the Statement of Net Position
December 31,2019
Total Governmental Fund Balance $ 400,966
Amounts reported for governmental activities in the Statement of Net Position
are different because:
The costs 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 depreciation1''8„31,1741
2,218.,168
Total Net Position $ 2,619,134
See Notes to Financial Statements - 12 -
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Statement of Revenues,Expenditures
and Change in Fund Balance-General Fund
For The Year Ended December 31,2019
General
REVENUES
Real property taxes $ 864,131
Use of money and property 8,315
48,586
Compost facility
Total Revenues 921,032
EXPENDITURES
General government support 670,066
72'874
Transportation
102,815
Employee benefits
Total Expenditures 845,755
Net Change in Fund Balance 75'277
Fund Balances-
Beginning of Year 325,689
End of Year $ 400,966
See Notes to Financial Statements - 13-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Reconciliation of the General Fund Statement of Revenues,Expenditures and
Change in Fund Balance to the Statement of Activities
For The Year Ended December 31,2019
Net Change in Fund Balance $ 75,277
Amounts reported for governmental activities in the Statement of Activities
are different because:
C it 1pjgd 1��1"�'er en -
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 13 ,120
(136,120)
Change in Net Position of Governmental Activities -$ _60,843a_
See Notes to Financial Statements - 14-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
GNIFI A AC OU TI POLICIES
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
overnrn,et_wj�Iel.nnciaL:StajemewLa
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.
Fun_d_r-JDajic a] 5Lajtm__en_t5
�J_
The fund financial statements provide information about the Districes 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.,
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 Tower of Southold Receiver of Taxes on behalf of the District.The'rown
of Southold Receiver of Taxes collects all property taxes for the Town,Suffolk County,Town Special Districts
and School Districts.Town and Countytaxes 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 31,2019.
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.
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$1.0,000 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
I. Equity Classifications
ernment-"A"icl tatenen
In the government-wide statements there are two 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.
Unrestricted - reports the balance of net position that does not meet the definition of the above
classification.
Fu t° eats
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.
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 tale 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.
Fund Balance la cca n
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 ft,ind 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.
- 17-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
2. ESP AN'ATIO DF RTAIN DIF ER Ni E BETWI NV HE , ND STAT MENTS AND E 0 V 'RNtiNMENTY
WIDE ST
AT RM "1"
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; however, the District does not have any
long-term revenue,expense or debt transaction differences.
Lotti -T rm l vera me a a Erns Diff.ren es
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.
a iM.I�� e Differen
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.
_Qjn -Term Debt r n acti n Differgs
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 iin the fund statements when due and
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.
- 18-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
3. kNCE AND ACC V.NJA--B-1L-1Ty
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
bybudget 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.
4. JAL INSTIT JTIQ SA—MVIN—M-1—MENJILS
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 US. 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:
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.
- 19-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
5. CAP`IT'AL SS JS
Capital asset balances and activity for the year ended December 31, 2019 were as follows:
Balance Balance
12 31 2018 Additions Reductions 12/31 f 2019
Governmental activities
Capital assets not being depreciated
$ 517,262 $ $ $ 517,262
Land
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 1,191,995 88,753 r,1 1,280,748
Machinery and equipment 503,059 47,367 550,426
Total accumulated depreciation 1,695,054 136,120 1,831,174
Total capital assets,
being depreciated,net 1,837,026 136,120 1,700,906
Capital assets,net $ 2,3'54',288 (1.3 x,12 $ - $ 2'218,168
Depreciation expense was$136,120.
6. l M N EM T
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. SUESE'Q I 1ENT E-VE NIS
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,except for the following:
The COVI D-19 outbreak is disrupting business activity across a range of industries.At this point,the extent of
the impact of COVID-19 on the District's operational and financial performance will depend on certain
developments, including the duration and spread of the outbreak, and the effect on the District's residents,
employees and vendors,all of which are uncertain and cannot be predicted.
-20-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Schedule of Revenues,Expenditures and Change in Fund Balance
Budget and Actual-General Fund
For The Year Ended December 31,2019
Final Budget
Original Final Variance with
Budget Budget Actual Actual
REVENUES
86
Real Property Taxes $ 4,131 $ 864,131 $ 864,131 $
Use of Money&Property 3,400 3,400 8,315 4,915
Compost Facility 50,000 50,000 48,5861,414
Total Revenues $ 917,531 $ 917,531 921,032 $ 3,501
EXPENDITURES
Accounting $ 11,000 $ 11,000 11,000 $
Bank Charges 3,100 5,400 5,351 49
Building Maintenance 5,500 5,500 5,467 33
Building Utilities 8,198 14,198 14,152 46
Commissioner's Fees 13,000 13,000 11,720 1,280
Compost Equipment Maintenance 7,215 7,215 2,060 5,155
Compost Facility Maintenance 7,100 7,033 67
Compost Facility Supplies 2,000 1,953 47
Compost Facility Utilities 3,500 3,500 3,260 240
Consultants 100,000 25,000 21,497 3,503
Employee Benefits,Taxes&Wages 529,800 529,800 487,812 41,988
Employee Training 10,000 10,000 4,277 5,723
Equipment Maintenance 26,550 26,550 17,523 9,027
Ferry Transportation 60,000 72,900 72,874 26
Garbage Tipping Fees&Hauling 77,000 111,600 111,525 75
Hazardous Waste Removal 300 300 300
Insurance 24,870 28,170 28,098 72
Legal Fees 10,000 10,000 9,135 865
Office Expense 4,300 7,000 6,939 61
Transfer Station Utilities 4,000 4,700 4,646 54
Transfer Station Improvements 7,198 7,198 4,128 3,070
Workers'Compensation 12,000 15,400 15,305 95
Total Expenditures $ 917,531 $ 91.7,531 845,755 $ 71,776
Net Change in Fund Balance 75'277
Fund Balance-Beginning of Year 325,689
Fund Balance-End of Year $ 400,966
Note to Required Supplementary Information
.OAAgt Basi ea i
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 -