HomeMy WebLinkAbout2020 FI Waste Management District
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
St ³¤ ®¥ .¤¶ 9®±ª
FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION WITH
INDEPENDENT REPORT
December 31, 2020
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
TABLE OF CONTENTS
Page
)£¤¯¤£¤³ Report 1
(MD&A) 3
" ²¨¢ &¨ ¢¨ « 3³ ³¤¬¤³²Ȁ
Statement of Net Position 9
Statement of Activities 10
Balance Sheet General Fund 11
Reconciliation of the General Fund Balance Sheet to the Statement of Net Position 12
Statement of Revenues, Expenditures and Change in Fund Balance General Fund 13
Reconciliation of the General Fund Statement of Revenues,
Expenditures and Change in Fund Balance to the Statement of Activities 14
Notes to Financial Statements 15
2¤°´¨±¤£ 3´¯¯«¤¬¤³ ±¸ )¥®±¬ ³¨® ®³§¤± ³§ -$lj!:
Schedule of Revenues, Expenditures and Change in Fund Balance
Budget and Actual General Fund 21
WJODFOU!E/!DVMMFO-!DQB
KBNFT!F/!EBOPXTLJ-!DQB
QFUFS!G/!SPESJHVF\[-!DQB
KJMM!T/!TBOEFST-!DQB
EPOBME!K/!IPGGNBOO-!DQB
DISJTUPQIFS!W/!SFJOP-!DQB
BMBO!ZV-!DQB
).$%0%.$%.4 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, 2020,and the related notes to the financial statements,which collectively comprise
Management isresponsible for the preparation and fair presentationof 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.
Our responsibility is to express opinionson 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
dgment, including the assessment of the risks of
materialmisstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the 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 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 providea basis for our audit
opinions.
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, 2020, 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.
/³§¤± - ³³¤±² 2¤°´¨±¤£ 3´¯¯«¤¬¤³ ±¸ )¥®±¬ ³¨®
Accounting principles generally accepted in the United
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
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.
B!
April 15, 2021
- 2 -
&)3(%23 )3,!.$ 7!34%-!.!'%-%.4 $)342)#4
NALYSIS
The Fishers Island Waste Management District(District) discussion andanalysis of the financial performance
provides an overall review of the DistrictDecember 31, 2020, in
comparison with the year ended December 31, 2019, with emphasis on the current year. The intent of this discussion
and analysis is to look at the Districtfinancial performance as a whole. This should be read in conjunction with the
financial statements, which immediately follow this section.
1.&).!.#)!, ()'(,)'(43
Key financial highlights for fiscal year 2020are as follows:
-wide financial statements, decreased by
$21,642. This was due to an excess of expenses over revenues using the economic resources
$2,597,492
at December 31, 2020.
increased by
$94,116. This was due to an excess of revenues over expendituresusing the current financial resources
balance was $495,082at December 31, 2020.
2./6%26)%7 /& 4(% &).!.#)!, 34!4%-%NTS
This annual report consists of threeparts (this section), the
basic financial statements, and required supplementary information.The basic financial statements consist of
government-wide financial statements, fund financial statements, and notes tofinancial statements. A graphic
display of the relationship of these statements follows:
Required
Basic Financial
Supplementary
Discussion &
Statements
Information
Analysis
Government-Notes to
Fund Financial
Wide Financial Financial
Statements
StatementsStatements
A.Government-7¨£¤ &¨ ¢¨ « 3³ ³¤¬¤³²
The government-wide financial statements are organized to provide an understanding of the fiscal
performance of the Districtas a whole in a manner similar to a private sector business.There are two
government-wide financial statements -the Statement of Net Positionand the Statement of Activities. These
statements provide both an aggregate and long-term view of the District
-3 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
(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
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. 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 in the statement for some items that will result
in cash flow in future fiscal periods.
B.&´£ &¨ ¢¨ « 3³ ³¤¬¤³²
The fund financial statements provide more detailed information about the Districtthe 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
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, the reader may better
understand the long-term impact of the District-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 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
(Continued)
3.&).!.#)!, !.!,93)3 /& 4(% DISTRICT !3 ! 7(/,%
A..¤³ 0®²¨³¨®
The Districts total net position decreased by $21,642 between fiscal year 2020 and 2019. A summary of the
Districts of Net Position is as follows:
IncreasePercentage
20202019(Decrease)Change
Current and Other Assets$ 533,841$ 417,414$ 116,42727.89%
Capital Assets, Net 2,102,410 2,218,168 (115,758) (5.22)%
Total Assets 2,636,251 2,635,582 6690.03%
Current and Other Liabilities 38,759 16,448 22,311 100.00%
Net Position
Net Investment in Capital Assets 2,102,410 2,218,168 (115,758) (5.22)%
Unrestricted 495,082 400,966 94,116 23.47%
Total Net Position$ 2,597,492 $ 2,619,134 $ (21,642) (0.83)%
Current and other assets increased by $116,427, as compared to the prior year. The increase is primarily
related to an increase in cash of $120,975, offset by a decrease in prepaid expense of $4,548.
Capital assets, net decreased by $115,758, 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
Current and other liabilities increased by $22,311, as compared to the prior year. This increase is attributable
to increases in accounts payable of $14,441 and payroll taxes payable of $7,870. The increases 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 $134,666, offset by capital asset additions of $18,908.
The unrestricted amount of $495,082
- 5 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
(Continued)
B.#§ ¦¤² ¨ .¤³ Position
The results of operations as reported in the Statement of Activities are as follows:
IncreasePercentage
20202019(Decrease)Change
Revenues
Program Revenues
Charges for Services$ 38,773$ 48,586$ (9,813)(20.20)%
General Revenues
Real Property Taxes 881,413 864,131 17,282 2.00%
Other 5,434 8,315 (2,881)(34.65)%
Total Revenues 925,620 921,032 4,5880.50%
Expenses
General Government Support 947,262 981,875 (34,613)(3.53)%
Decrease in Net Position$ (21,642) $ (60,843) $ 39,201(64.43)%
The District primarily relies on real property taxes to support its operations. The net increase in total
revenues in 2020 as compared to 2019 was $4,588, as shown above. The increase is due to an increase in
real property taxes of $17,282, offset by a decrease in charges for services of $9,813.
The total expenses in 2020 were $34,613 or 3.53% less than 2019. In 2020, the District had decreased
employee benefits, taxes and wages of $22,093 and consulting expenses of $19,665, offset by an increase in
hazardous waste removal of $19,049.
4.FINANCIAL !.!,93)3 /& 4(% DISTRICT
At December 31, 2020, the general fund, which is the only governmental fund, reported a fund balance of
$495,082, which is an increase of $94,116 over the prior year. This increase is due to revenues in excess of
expenditures for the fiscal year, and is the same as the change in unrestricted net position.
Increase
20202019(Decrease)
'¤¤± « &´£
Nonspendable: Prepaids$ 20,087 $ 24,635 $ (4,548)
Assigned: Appropriated 70,000 70,000
Assigned: Designated 208,746 228,699 (19,953)
Unassigned: Fund balance 196,249 147,632 48,617
$ 495,082$ 400,966$ 94,116
5.'%.%2!, &5.$ "5$'%4!29 ()'(,)'(43
A.2020 Budget
The Districtgeneral fund original budget for the year ended December 31, 2020 was $943,413.
The budget was primarily funded by real property taxes.
- 6 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
(Continued)
B.Unassigned &´£ " « ¢¤ Ȩ"´£¦¤³ ³® !¢³´ «ȩ
The general funassigned fund balance is the component of total fund balance that is the residual of
assignments, and amounts classified as nonspendable. The
change in this balance demonstrated through a comparison of the actual revenues and expenditures for the
year compared to budget follows:
Opening, Unassigned Fund Balance$ 147,632
Revenues Under Budget (17,793)
Expenditures Under Budget 111,909
Change in Nonspendable Fund Balance 4,548
Appropriated for the 2021 Budget (70,000)
Net Change in Assigned: Designated Fund Balance 19,953
Closing, Unassigned Fund Balance$ 196,249
Opening, Unassigned Fund Balance
The $147,632 December 31, 2019 fund balance that was
unassigned.
Revenues Over Budget
The 2020 budget for revenues was $943,413. Actual revenues recognized for the year were $925,620.
Actual revenues were less than estimated or budgeted revenues by $17,793. This difference decreases the
unassigned portion of the general fund - fund balance from December 31, 2019 to December 31, 2020.
Expenditures Under Budget
The 2020 budget for expenditures was $943,413. Actual expenditures for 2020 were $831,504. The final
budget was under expended by $111,909. This under expenditure increases the unassigned portion of the
general fund - fund balance from December 31, 2019 to December 31, 2020.
Change in Nonspendable Fund Balance
The District prepaid various insurance policies at December 31, 2020. 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.
Appropriated Fund Balance
The District has chosen to use $70,000 of its available December 31, 2020 fund balance to partially fund
the 2021 approved operating budget. As such, the December 31, 2020 unassigned fund balance must be
reduced by this amount.
Net change in Assigned Fund Balance
Assigned fund balance includes amounts earmarked for specific purposes. The decrease in assigned fund
balance increases unassigned fund balance.
- 7 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
(Continued)
Closing, Unassigned Fund Balance
Based upon the summary changes shown in the above table, the District will begin the 2021 fiscal year with
an unassigned fund balance of $196,249. This is a $48,617 increase over the prior year unassigned fund
balance.
6.CAPITA, !33%4S
At December 31, 2020, 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 $134,666, offset by capital additions of $18,908. A
December 31, 2020 and December 31, 2019 is as
follows:
Increase
20202019(Decrease)
Land$ 517,262$ 517,262$ -
Buildings and improvements 1,407,826 1,496,511 (88,685)
Machinery and equipment 177,322 204,395 (27,073)
Capital assets, net$ 2,102,410$ 2,218,168$ (115,758)
7.%#/./-)# &!#4/23 !.$
A.
The general fund budget for the year ending December 31, 2021 is $895,250. This is a decrease of $48,163
or 5.10% from The District budgeted property tax revenues at a $98,263
decrease (12.54%) over
B.4 · # ¯
New York State law limits the increase in the property tax levy of local governments to the lesser of 2% or
the rate of inflation. There are additional statutory adjustments in the law. Local governments may override
the tax levy limit by first passing a local law that allows for the tax levy limit to be exceeded. The override
vote requires a 60% 2021 tax levy did
not require an override vote.
8.#/.4!#4).' 4(% DISTRICT
This financial report is designed to provide the reader with a general overview of the District
demonstrate the District
directed to:
Bruce Hubert, Chairman
P.O. Box 22
Fishers Island, NY 06390
- 8 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
3³ ³¤¬¤³ ®¥ .¤³ 0®²¨³¨®
December 31, 2020
ASSETS
Cash $ 513,754
Prepaids 20,087
Capital assets:
Not being depreciated - land 517,262
Being depreciated, net of accumulated depreciation 1,585,148
Total Assets 2,636,251
LIABILITIES
Payables
Accounts payable 28,811
Payroll taxes payable 9,948
Total Liabilities 38,759
.%4 0/3)4)/.
Net investment in capital assets 2,102,410
Unrestricted 495,082
Total Net Position$ 2,597,492
See Notes to Financial Statements- 9 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
3³ ³¤¬¤³ ®¥ !¢³¨µ¨³¨¤²
For The Year Ended December 31, 2020
ProgramNet (Expense)
RevenuesRevenue and
Charges forChanges in
ExpensesServicesNet Position
FUNCTIONS/PROGRAMS
General government support$ 947,262$$ (947,262)
Compost facility 38,773 38,773
Total Functions and Programs$ 947,262$ 38,773 (908,489)
'%.%2!, 2%6%.5%3
Real property taxes 881,413
Use of money and property 5,434
Total General Revenues 886,847
Change in Net Position (21,642)
Total Net Position - Beginning of Year 2,619,134
Total Net Position - End of Year$ 2,597,492
See Notes to Financial Statements- 10 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
" « ¢¤ 3§¤¤³ ȃ '¤¤± « &´£
December 31, 2020
General
ASSETS
Cash$ 513,754
Prepaids 20,087
Total Assets$ 533,841
LIABILITIES
Payables
Accounts payable$ 28,811
Payroll taxes payable 9,948
Total Liabilities 38,759
&5.$ "!,!.#%
Nonspendable: Prepaids 20,087
Assigned:
Appropriated 70,000
Designated for:
Compost facility / monitoring 91,109
Compost facility / equipment 12,600
Other equipment 5,037
Wages 100,000
Unassigned: Fund balance 196,249
Total Fund Balance 495,082
Total Liabilities and Fund Balance$ 533,841
See Notes to Financial Statements- 11 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
2¤¢®¢¨«¨ ³¨® ®¥ ³§¤ '¤¤± « &´£ " « ¢¤ 3§¤¤³
³® ³§¤ 3³ ³¤¬¤³ ®¥ .¤³ 0®²¨³¨®
December 31, 2020
Total Governmental Fund Balance$ 495,082
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$ 4,068,250
Accumulated depreciation (1,965,840)
2,102,410
Total Net Position$ 2,597,492
See Notes to Financial Statements- 12 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
3³ ³¤¬¤³ ®¥ 2¤µ¤´¤²Ǿ %·¯¤£¨³´±¤²
£ #§ ¦¤ ¨ &´£ " « ¢¤ ȃ '¤¤± « &´£
For The Year Ended December 31, 2020
General
REVENUES
Real property taxes$ 881,413
Use of money and property 5,434
Compost facility 38,773
Total Revenues 925,620
EXPENDITURES
General government support 674,858
Transportation 82,211
Employee benefits 74,435
Total Expenditures 831,504
Net Change in Fund Balance 94,116
Fund Balances -
Beginning of Year 400,966
End of Year$ 495,082
See Notes to Financial Statements- 13 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
2¤¢®¢¨«¨ ³¨® ®¥ ³§¤ '¤¤± « &´£ 3³ ³¤¬¤³ ®¥ 2¤µ¤´¤²Ǿ %·¯¤£¨³´±¤² £
#§ ¦¤ ¨ &´£ " « ¢¤ ³® ³§¤ 3³ ³¤¬¤³ ®¥ !¢³¨µ¨³¨¤²
For The Year Ended December 31, 2020
Net Change in Fund Balance$ 94,116
Amounts reported for governmental activities in the Statement of Activities
are different because:
Capital Related Differences
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$ 18,908
Depreciation expense (134,666)
(115,758)
Change in Net Position of Governmental Activities$ (21,642)
See Notes to Financial Statements- 14 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
NOTES TO FINANCIAL STATEMENTS
1.SUMMARY /& 3)'.)&)#!.4 !##/5.4).' 0/,)#)%3
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.&¨ ¢¨ « 2¤¯®±³¨¦ %³¨³¸
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." ²¨² ®¥ 0±¤²¤³ ³¨®
Government-Wide Financial Statements
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 Financial Statements
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.-¤ ²´±¤¬¤³ &®¢´² £ " ²¨² ®¥ !¢¢®´³¨¦
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 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
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.2¤ « 0±®¯¤±³¸ 4 ·¤²
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
st
and School Districts. Town and County taxes are levied annually, and are due by October 1. 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, 2020.
E.5²¤ ®¥ %²³¨¬ ³¤²
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.# ²§ £ # ²§ %°´¨µ «¤³²ȝ)µ¤²³¬¤³²
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.0±¤¯ ¨£ )³¤¬²
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.# ¯¨³ « !²²¤³²
Capital assets are reflected in the government-wide financial statements. Capital assets purchased or
acquired with an original cost of $5,000 or more are required to be capitalized according to District policy
and are reported at actual cost, when the information is available, or estimated historical cost based on
professional third-party information. Donated assets are reported at acquisition value at the date of
donation.
- 16 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
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
Buildings20-40 years
Improvements and other15-30 years
Machinery and equipment8-10 years
Infrastructure25 years
I.%°´¨³¸ #« ²²¨¥¨¢ ³¨®²
Government-Wide Statements
In the government-wide statements there are two classes of net position:
.¤³ ¨µ¤²³¬¤³ ¨ ¢ ¯¨³ « ²²¤³² 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.
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:
.®²¯¤£ ¡«¤ 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.
!²²¨¦¤£ Consists of amounts that are subject to a purpose constraint that represents an intended use
than the purpose of the general fund.
5 ²²¨¦¤£
surplus or deficit.
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.
- 17 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
NOTES TO FINANCIAL STATEMENTS
(Continued)
2.%80,!.!4)/. /& #%24!). $)&&%2%.#%3 "%47%%. 4(% &5.$ 34!4%-%.43 !.$ 4(% GOVERNMENT-
7)$% 34!4%-%.43
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.4®³ « &´£ " « ¢¤² ®¥ General Fund µ²ȁ .¤³ 0®²¨³¨® ®¥ '®µ¤±¬¤³ « !¢³¨µ¨³¨¤²
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.3³ ³¤¬¤³ ®¥ 2¤µ¤´¤²Ǿ %·¯¤£¨³´±¤² £ #§ ¦¤² ¨ &´£ " « ¢¤ µ²ȁ 3³ ³¤¬¤³ ®¥ !¢³¨µ¨³¨¤²
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.
Long-Term Revenue and Expense Differences
Long-term revenue differences arise because governmental funds report revenues only when they are
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.
Capital 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 Differences
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
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 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
NOTES TO FINANCIAL STATEMENTS
(Continued)
3.STEWARDSHIPǾ #/-0,)!.#% !.$ !##/5.4!"),)49
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.
4.$%0/3)43 7)4( &).!.#)!, ).34)454)/.3 !.$ INVESTMENTS
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.
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.
end.
The District was not exposed to any material interest rate risk or foreign currency risk.
- 19 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
NOTES TO FINANCIAL STATEMENTS
(Continued)
5.CAPITAL ASSETS
Capital asset balances and activity for the year ended December 31, 2020 were as follows:
BalanceBalance
12/31/2019AdditionsReductions12/31/2020
Governmental activities
Capital assets not being depreciated
Land$ 517,262 $ $ $ 517,262
Capital assets being depreciated
Buildings and improvements 2,777,259 2,777,259
Machinery and equipment 754,821 18,908 773,729
Total capital assets
being depreciated 3,532,080 18,908 - 3,550,988
Less accumulated depreciation for:
Buildings and improvements 1,280,748 88,685 1,369,433
Machinery and equipment 550,426 45,981 596,407
Total accumulated depreciation 1,831,174 134,666 - 1,965,840
Total capital assets,
being depreciated, net 1,700,906 (115,758) - 1,585,148
Capital assets, net$ 2,218,168$ (115,758)$ -$ 2,102,410
Depreciation expense was $134,666.
6.2)3+ -!.!'%-%.4
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
injuries to employees; errors and omissions; and natural disasters. These risks are covered by commercial
insurance purchased from independent third parties. Settled claims from these risks have not exceeded
commercial insurance coverage for the past three years.
7.!33)'.%$Ȁ !002/02)!4%$ &5.$ "!,!.#%
The amount of $70,000 has been appropriated to reduce taxes for the year ending December 31, 2021.
8.35"3%15%.4 EVENTS
The District has evaluated subsequent events through h is the date the
financial statements were available to be issued. No significant events were identified that would require
adjustment of or disclosure in the financial statements, except for the following:
On March 11, 2020, coronavirus disease (COVID-19) was declared a pandemic by the World Health
Organization. COVID-19 is an international, national and New York State public health emergency. As such, the
COVID-19 outbreak is disrupting business activity across a range of industries. At this point, the extent of the
impact of COVID-
developments, including the duration and spr
employees and vendors, as well as the State, all of which are uncertain and cannot be predicted.
- 20 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
3¢§¤£´«¤ ®¥ 2¤µ¤´¤²Ǿ %·¯¤£¨³´±¤² £ #§ ¦¤ ¨ &´£ " « ¢¤
"´£¦¤³ £ !¢³´ « ȃ '¤¤± « &´£
For The Year Ended December 31, 2020
Final Budget
OriginalFinalVariance with
BudgetBudgetActualActual
REVENUES
Real Property Taxes$ 881,413$ 881,413$ 881,413$ -
Use of Money & Property 6,000 6,000 5,434 (566)
Compost Facility 56,000 56,000 38,773 (17,227)
Total Revenues$ 943,413$ 943,413 925,620$ (17,793)
EXPENDITURES
Accounting$ 11,000$ 16,200 16,150$ 50
Bank Charges 2,400 2,400 1,551 849
Building Maintenance 4,266 7,666 7,586 80
Building Utilities 17,772 17,772 8,791 8,981
Commissioner's Fees 10,000 13,400 13,320 80
Compost Equipment Maintenance 4,215 6,815 6,746 69
Compost Facility Supplies 1,000 1,000 1,000
Compost Facility Utilities 3,500 3,500 3,245 255
Consultants 15,000 15,000 1,832 13,168
Employee Benefits, Taxes & Wages 578,490 527,390 465,719 61,671
Employee Training 5,000 5,000 5,000
Equipment Maintenance 16,500 25,700 25,684 16
Ferry Transportation 74,000 82,300 82,211 89
Garbage Tipping Fees & Hauling 116,400 116,400 109,061 7,339
Hazardous Waste Removal 16,900 19,100 19,049 51
Insurance 28,970 28,970 25,912 3,058
Legal Fees 11,000 11,000 2,223 8,777
Office Expense 5,000 7,800 7,703 97
Transfer Station Utilities 5,000 5,000 4,685 315
Transfer Station Improvements 3,000 3,000 2,094 906
Workers' Compensation 14,000 28,000 27,942 58
Total Expenditures$ 943,413$ 943,413 831,504$ 111,909
Net Change in Fund Balance 94,116
Fund Balance - Beginning of Year 400,966
Fund Balance - End of Year$ 495,082
.®³¤ ³® 2¤°´¨±¤£ 3´¯¯«¤¬¤³ ±¸ )¥®±¬ ³¨®
Budget Basis of Accounting
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 -