HomeMy WebLinkAbout2021 FI Waste Management District
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FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION WITH
INDEPENDENT REPORT
December 31, 2021
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TABLE OF CONTENTS
Page
)£¤¯¤£¤³ Report 1
(MD&A) 3
&¨ ¢¨ « Statements:
Statement of Net Position 10
Statement of Activities 11
Balance Sheet General Fund 12
Reconciliation of the General Fund Balance Sheet to the Statement of Net Position 13
Statement of Revenues, Expenditures and Change in Fund Balance General Fund 14
Reconciliation of the General Fund Statement of Revenues,
Expenditures and Change in Fund Balance to the Statement of Activities 15
Notes to Financial Statements 16
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Schedule of Revenues, Expenditures and Change in Fund Balance
Budget and Actual General Fund 22
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).$%0%.$%.4 REPORT
To the Board of Commissioners
Fishers Island Waste Management District
Fishers Island, New York
Opinions
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, 2021,and the related notes to the financial statements,which collectively comprise
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and each major fundof the District as of December 31,
2021, and the respective changes in financial position, for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
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We conducted our audit in accordance with auditing standards generally accepted in the United States of America
(GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the
Audit of the Financial Statements section of our report. We are required to be independent of the Districtand to meet
our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We
believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit
opinions.
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Management is responsible for the preparation and fair presentation of the financial statements in accordance with
accounting principles generally accepted in the United States of America, and for the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the ability to continue as a going concern
for twelve months beyondthe financial statement date, including any currently known information that may raise
substantial doubt shortly thereafter.
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Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that
an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they
would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we
exercise professional judgment and maintain professional skepticism throughout the audit.
identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, and design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
obtain an understanding of internal control relevant to the audit 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
dingly, no such opinion is expressed.
evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise
substantial doubt about the ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, and certain internal control related matters that we
identified during the audit.
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and analysis and budgetary comparison information on pages 3 through 9 and 23 be presented to supplement the
basic financial statements. Such information is the responsibility of management and, 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.
May 27, 2022
-2 -
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The Fishers Island Waste Management District(District) discussion and analysis of the financial performance
provides an overall review of the DistrictDecember 31, 2021, in
comparison with the year ended December 31, 2020, with emphasis on the current year. The intent of this discussion
and analysis is to look at the Districtnancial 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 2021 are as follows:
-wide financial statements, decreased by
$75,355. This was due to an excess of expenses over revenues using the economic resources
measurement focus and the accrual basis of accounting.
-wide financial statements, totaled
$917,863. Of this amount $59,199 was offset by program charges for services. General revenues of
$783,309 amount to 93% of total revenues, and were not adequate to cover the balance of program
expenses.
The general fund fund balance, as reflected in the fund financial statements was $535,689 at December
31, 2021. This balance represents a $40,607 increase (8.2%) over the prior year due to an excess of
revenues over expenditures, using the current financial resources measurement focus and the modified
accrual basis of accounting. Assigned fund balance decreased $21,637, which represents the changes in
appropriated fund balance and designated fund balance. Unassigned fund balance increased $63,456 to
$259,705.
2021 property tax levy of $783,150 was an 11.15% decrease from the 2020 tax levy.
2./6%26)%7 /& 4(% &).!.#)!, 34!4%-%.43
This annual report consists of three parts (this section), the
financial statements, and required supplementary information. The 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:
A.Government-7¨£¤ &¨ ¢¨ « 3³ ³¤¬¤³²
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
-3 -
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(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. To assess the
overall health of the District, one needs to consider additional nonfinancial factors such as changes in the
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.
See Paragraph on Required Supplementary Information Included in -4 -
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(Continued)
The District maintains one individual governmental fund, the general fund.
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The Districts total net position decreased by $75,355 between calendar year 2021 and 2020. The decrease
is due to expenses in excess of revenues using the economic resources measurement focus and the accrual
basis of accounting. A summary of the Districts of Net Position is as follows:
IncreasePercentage
20212020(Decrease)Change
ASSETS
Current and Other Assets$ 562,613$ 533,841$ 28,7725.39%
Capital Assets, Net 1,986,448 2,102,410 (115,962)(5.52)%
Total Assets 2,549,061 2,636,251 (87,190)(3.31)%
LIABILITIES
Current and Other Liabilities 26,924 38,759 (11,835)(30.53)%
.%4 0/3)4)/.
Net Investment in Capital Assets 1,986,448 2,102,410 (115,962)(5.52)%
Unrestricted 535,689 495,082 40,6078.20%
Total Net Position$ 2,522,137 $ 2,597,492$ (75,355)(2.90)%
Current and other assets increased as a result of an increase in cash.
Capital assets, net decreased by $115,962, 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
ormation.
Current and other liabilities decreased as a result of a decrease in accounts payable, offset by an increase in
payroll taxes payable.
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 $134,364, offset by capital asset additions of $18,402.
The unrestricted amount relates to the balance of the
B.#§ ¦¤² ¨ .¤³ Position
The results of operations as a whole are reported in the Statement of Activities. A summary of this statement
for the calendar year 2021 and 2020 are as follows:
See Paragraph on Required Supplementary Information Included in - 5 -
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(Continued)
IncreasePercentage
20212020(Decrease)Change
Revenues
Program Revenues
Charges for Services$ 59,199$ 38,773$ 20,42652.68%
General Revenues
Real Property Taxes 783,150 881,413 (98,263)(11.15)%
Other 159 5,434 (5,275)(97.07)%
Total Revenues 842,508 925,620 (83,112)(8.98)%
Expenses
General Government Support 844,473 889,665 (45,192)(5.08)%
Compost Facility 73,390 57,597 15,79327.42%
Total Expenses 917,863 947,262 (29,399)(3.10)%
Decrease in Net Position$ (75,355)$ (21,642)$ (53,713)100.00%
net position decreased by $75,355 and $21,642 for the years ended December 31, 2021 and
2020, respectively.
The Dist or 8.98%, primarily due to a decrease in real property taxes.
The Distor 3.10%, primarily due to a decrease in wages.
4.FINANCIAL !.!,93)3 /& 4(% DISTRICT
At December 31, 2021, the general fund, which is the only governmental fund, reported a fund balance of
$535,689, which is a net increase of $40,607 over the prior year. This increase is due to revenues in excess of
expenditures using the current financial resources measurement focus and the modified accrual basis of
accounting. A summary of the change in the components of fund balance is as follows:
IncreasePercentage
20212020(Decrease)Change
'¤¤± « &´£
Nonspendable: Prepaids$ 18,875$ 20,087$ (1,212)(6.03)%
Assigned: Appropriated 63,150 70,000 (6,850)(9.79)%
Assigned: Designated 193,959 208,746 (14,787)(7.08)%
Unassigned: Fund balance 259,705 196,249 63,456 32.33%
$ 535,689$ 495,082$ 40,6078.20%
The net change in the general fund fund balance is an increase of $40,607, compared to an increase of $94,116
in 2020. This resulted from revenues in excess of expenditures.
decreased by $83,112 or 8.98%, predominantly due to a decrease in real property taxes of
$98,263, based on the approved budget by the Board of Commissioners, offset by an increase in compost station
charges of $20,426decreased by $29,603 or 3.56%, primarily as a result of decreases
in wages and benefits; hazardous waste removal; and
See Paragraph on Required Supplementary Information Included in - 6 -
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(Continued)
equipment maintenance; garbage tipping, fees and hauling; and landfill maintenance. Wages and benefits, and
due to the District having fewer
employees, on average, than the prior year, while hazardous waste removal decreased $19,049 as there was no
need for waste removal during the current year.
5.'%.%2!, &5.$ "5$'%4!29 ()'(,)'(43
A.2021 Budget
The Districtgeneral fund adopted budget for the year ended December 31, 2021 was $895,250, which was
primarily funded by estimated property taxes.
B.Unassigned &´£ " « ¢¤ Ȩ"´£¦¤³ ³® !¢³´ «ȩ
The general funassigned fund balance is the component of total fund balance that is the residual of
current and prior net of appropriations to fund the subsequent
assignments, and amounts classified as nonspendable. The change in this balance
demonstrated through a comparison of the actual revenues and expenditures for the year compared to
budget follows:
Opening, Unassigned Fund Balance$ 196,249
Revenues Over Budget17,258
Expenditures Under Budget93,349
Change in Nonspendable Fund Balance 1,212
Appropriated for the 2022 Budget (63,150)
Net Change in Assigned: Designated Fund Balance14,787
Closing, Unassigned Fund Balance$ 259,705
Opening, Unassigned Fund Balance
The $196,249 December 31, 2020 fund balance that was
retained as unassigned.
Revenues Over Budget
The 2021 final budget for revenues was $825,250. Actual revenues for the year were $842,508. The excess
of actual revenues over estimated or budgeted revenues was $17,258, which contributes directly to the
change to the general fund unassigned fund balance from December 31, 2020 to December 31, 2021. The
accompanying Required Supplementary Information, Schedule of Revenues, Expenditures and Changes in
Fund Balance Budget and Actual General Fund, provides additional information.
Expenditures Under Budget
The 2021 final budget for expenditures was $895,250. Actual expenditures for 2021 were $801,901. The
final budget was under expended by $93,349. This under expenditure increases the unassigned portion of
the general fund - fund balance from December 31, 2020 to December 31, 2021. The accompanying Required
Supplementary Information, Schedule of Revenues, Expenditures and Changes in Fund Balance Budget
and Actual General Fund, provides additional information.
See Paragraph on Required Supplementary Information Included in -7 -
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(Continued)
Change in Nonspendable Fund Balance
The District prepaid various insurance policies at December 31, 2021. 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 $63,150 of its available December 31, 2021 fund balance to partially fund the
2022 approved operating budget. As such, the December 31, 2021 unassigned fund balance must be
reduced by this amount.
Net change in Assigned Designated Fund Balance
Assigned designated fund balance includes amounts earmarked for specific purposes. The decrease in
assigned designated fund balance increases unassigned fund balance.
Closing, Unassigned Fund Balance
Based upon the summary changes shown in the above table, the District will begin the 2022 fiscal year with
an unassigned fund balance of $259,705. This is a $63,456 increase over the prior year unassigned fund
balance.
6.CAPITA, !33%4S
At December 31, 2021, 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 $134,364, offset by capital additions of $18,402
recorded for the year ended December 31, 2021. A
at December 31, 2021 and December 31, 2020 is as follows:
Increase
20212020(Decrease)
Land$ 517,262$ 517,262$ -
Buildings and improvements 1,319,150 1,407,826 (88,676)
Machinery and equipment 150,036 177,322 (27,286)
Capital assets, net$ 1,986,448$ 2,102,410$ (115,962)
7.%#/./-)# &!#4/23 !.$
A.Subsequent
The general fund budget, as approved by the Board of Commissioners, for the year ending December 31,
2022 is $856,400. This is a decrease of $38,850 or 4.34% from The District
budgeted revenues other than property taxes at a $34,000 decrease from the 2020 estimate. The assigned,
appropriated fund balance applied to the budget in the amount of $63,150 is a $6,850 decrease from previous
year. The District budgeted property tax revenues at a $2,000 increase (0.26%) over
estimate.
See Paragraph on Required Supplementary Information Included in -8 -
FISHERSISLANDWASTEMANAGEMENTDISTRICT
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(Continued)
B. FutureBudgets
The property tax cap and the continuing effect of th¤ #/6)$ȃΐΘ ¯ £¤¬¨¢ ¶¨«« ¨¬¯ ¢³ ³§¤ $¨²³±¨¢³Ȍ² ¥´³´±¤
budgets.
C. TaxCap
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. The District is authorized to
exceed the tax levy limit only if the governing body enacts, by a 60% vote, to override the tax levy limit. The
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8. CONTACTINGTHEDISTRICT
This financial report is designed to provide the reader wi³§ ¦¤¤± « ®µ¤±µ¨¤¶ ®¥ ³§¤ $¨²³±¨¢³Ȍ² ¥¨ ¢¤² £ ³®
£¤¬®²³± ³¤ ³§¤ $¨²³±¨¢³Ȍ² ¢¢®´³ ¡¨«¨³¸ ¥®± ³§¤ ¥´£² ¨³ receives. Requests for additional information can be
directed to:
David Burnham, Chairman
P.O. Box 22
Fishers Island, NY 06390
See Paragraph on Required Supplementary Inform ³¨® )¢«´£¤£ ¨ !´£¨³®±Ȍ² 2¤¯®±³ ȃ Θ ȃ
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December 31, 2021
ASSETS
Cash$ 543,738
Prepaids 18,875
Capital assets:
Not being depreciated 517,262
Being depreciated, net of accumulated depreciation 1,469,186
Total Assets 2,549,061
LIABILITIES
Payables
Accounts payable9,358
Payroll taxes payable 17,566
Total Liabilities 26,924
.%4 0/3)4)/.
Net investment in capital assets 1,986,448
Unrestricted 535,689
Total Net Position$ 2,522,137
See Notes to Financial Statements-10 -
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3³ ³¤¬¤³ ®¥ !¢³¨µ¨³¨¤²
For the Year Ended December 31, 2021
ProgramNet (Expense)
RevenuesRevenue and
Charges forChanges in
ExpensesServicesNet Position
FUNCTIONS/PROGRAMS
General government support$ 844,473$$ (844,473)
Compost facility 73,390 59,199 (14,191)
Total Functions and Programs$ 917,863$ 59,199 (858,664)
'%.%2!, 2%6%.5%3
Real property taxes 783,150
Use of money and property 159
Total General Revenues 783,309
Change in Net Position (75,355)
Total Net Position - Beginning of Year 2,597,492
Total Net Position - End of Year$ 2,522,137
See Notes to Financial Statements- 11 -
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" « ¢¤ 3§¤¤³ ȃ '¤¤± « &´£
December 31, 2021
General
ASSETS
Cash$ 543,738
Prepaids 18,875
Total Assets$ 562,613
LIABILITIES
Payables
Accounts payable$ 9,358
Payroll taxes payable 17,566
Total Liabilities 26,924
&5.$ "!,!.#%
Nonspendable: Prepaids 18,875
Assigned:
Appropriated fund balance 63,150
Designated for:
Compost facility / monitoring 81,359
Compost facility / equipment 12,600
Wages 100,000
Unassigned: Fund balance 259,705
Total Fund Balance 535,689
Total Liabilities and Fund Balance$ 562,613
See Notes to Financial Statements-12 -
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2¤¢®¢¨«¨ ³¨® ®¥ ³§¤ '¤¤± « &´£ " « ¢¤ 3§¤¤³
³® ³§¤ 3³ ³¤¬¤³ ®¥ .¤³ 0®²¨³¨®
December 31, 2021
Total Governmental Fund Balance$ 535,689
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$ 4,086,652
Accumulated depreciation (2,100,204)
1,986,448
Total Net Position$ 2,522,137
See Notes to Financial Statements- 13 -
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3³ ³¤¬¤³ ®¥ 2¤µ¤´¤²Ǿ %·¯¤£¨³´±¤²
£ #§ ¦¤ ¨ &´£ " « ¢¤ ȃ '¤¤± « &´£
For the Year Ended December 31, 2021
General
REVENUES
Real property taxes$ 783,150
Use of money and property 159
Compost facility 59,199
Total Revenues 842,508
EXPENDITURES
General government support 646,210
Transportation 81,368
Employee benefits 74,323
Total Expenditures 801,901
Net Change in Fund Balance 40,607
Fund Balance -
Beginning of Year 495,082
End of Year$ 535,689
See Notes to Financial Statements- 14 -
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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, 2021
Net Change in Fund Balance$ 40,607
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$ 18,402
Depreciation expense (134,364)
(115,962)
Change in Net Position of Governmental Activities$ (75,355)
See Notes to Financial Statements- 15 -
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NOTES TO FINANCIAL STATEMENTS
1.35--!29 /& 3)'.)&)#!.4 !##/5.4).' 0/,)#)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.&¨ ¢¨ « 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. Revenues that are not classified as
program revenues, including real property taxes, are presented as general revenues.
Funds Financial Statements
The accounts of the District are organized on the basis of funds, each of which is considered a separate
accounting entity. The operations of each fund are accounted for with a separate set of self-balancing
accounts that comprise its assets, liabilities, fund balances, revenues and expenditures, which are segregated
for the purpose of carrying on specific activities or attaining certain objectives in accordance with special
regulations, restrictions or limitations. The funds are summarized by type in the financial statements. The
District only reports governmental fund types, which consists solely of the general fund, as follows:
'¤¤± « &´£ - is the general operating fund and is used to account for all financial transactions except
those required to be accounted for in another fund.
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.
- 16 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
NOTES TO FINANCIAL STATEMENTS
(Continued)
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.
The governmental 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
and School Districts. Town and County taxes are levied annually, and are due in two equal installments
payable in January and May. The Town remits the amount of real property tax levied to the District from
January to June. Responsibility for collection of unpaid taxes is assumed by Suffolk County. There was no
amount due from the Town at December 31, 2021.
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 revenue availability, potential contingent liabilities, and useful lives of capital assets.
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.
-17 -
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NOTES TO FINANCIAL STATEMENTS
(Continued)
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.
All capital assets, except land, 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. Assigned fund balance includes amounts appropriated to partially
facility equipment, and wages.
5 ²²¨¦¤£ .
-18 -
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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.%80,!.!4)/. /& #%24!). $)&&%2%.#%3 "%47%%. 4(% GOVERNMENT-WIDE 34!4%-%.43 !.$ 4(%
FUND STATEMENTS
Due to the differences in the measurement focus and basis of accounting used in the government-wide
statements and the fund statements, certain financial transactions are treated differently. The financial
statements contain a full reconciliation of these items.
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, as applied to the reporting of capital assets and long-term assets and liabilities.
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 four broad categories; however, the District does not have any
long-term revenue, expense, debt, pension, or other postemployment benefits transaction differences.
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.
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.
- 19 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
NOTES TO FINANCIAL STATEMENTS
(Continued)
Appropriations are established by the adoption of the budget, recorded at the program line item level, and,
constitute a limitation on expenditures (and encumbrances) that may be incurred. Appropriations
authorized for the year are increased by the amount of encumbrances carried forward from the prior year.
Appropriations lapse at the end of the fiscal year unless expended or encumbered. Encumbrances will lapse
if not expended in the subsequent year. Appropriations authorized for the current year can be funded by the
planned use of specific reserves, and can be increased by budget amendments approved by the Board of
Commissioners as a result of selected new revenue sources not included in the original budget (when
permitted by law) and appropriation of fund balances. These supplemental appropriations may occur subject
to legal restrictions, if the Board approves them because of a need that exists which was not determined at
the time the budget was adopted. No supplemental appropriations occurred during the year.
Budgets are adopted annually on a basis consistent with GAAP.
B.Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other commitments for the
expenditure of monies are recorded for budgetary control purposes to reserve that portion of the applicable
appropriations, is employed in the general fund. Encumbrances are reported as assignments of fund balance,
since they do not constitute expenditures or liabilities. Expenditures for such commitments are recorded in
the period in which the liability is incurred. Encumbrances are shown in the fund financial statements only.
There were no encumbrances at December 31, 2021.
4.$%0/3)43 7)4( &).!.#)!, ).34)454)/.3 !.$ INVESTMENTS
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.
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.
The District was not exposed to any material interest rate risk or foreign currency risk.
- 20 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
NOTES TO FINANCIAL STATEMENTS
(Continued)
5.CAPITAL ASSETS
Capital asset balances and activity for the year ended December 31, 2021 were as follows:
BalanceBalance
12/31/2020AdditionsReductions12/31/2021
Governmental activities
Capital assets not being depreciated
Land$ 517,262$ $ $ 517,262
Capital assets being depreciated
Buildings and improvements 2,777,259 2,777,259
Machinery and equipment 773,729 18,402 792,131
Total capital assets
being depreciated 3,550,988 18,402 - 3,569,390
Less accumulated depreciation for:
Buildings and improvements 1,369,433 88,676 1,458,109
Machinery and equipment 596,407 45,688 642,095
Total accumulated depreciation 1,965,840 134,364 - 2,100,204
Total capital assets,
being depreciated, net 1,585,148 (115,962) - 1,469,186
Capital assets, net$ 2,102,410$ (115,962)$ - $ 1,986,448
Depreciation expense was$134,364.
6.2)3+ -!.!'%-%.4
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
injuries to employees; errors and omissions; and natural disasters. These risks are covered by commercial
insurance purchased from independent third parties. Settled claims from these risks have not exceeded
commercial insurance coverage for the past three years.
7.!33)'.%$Ȁ !002/02)!4%$ &5.$ "!,!.#%
The amount of $63,150 has been appropriated to reduce taxes for the year ending December 31, 2022.
8.#/--)4-%.43 !.$ #/.4).'%.#)%3
Litigation
The District is not aware of any material pending or threatened litigation claims against the District. The District
is also unaware of any unasserted claims or assessments that would require financial statement disclosure.
9.35"3%15%.4 %6%.43
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.
-21 -
&)3(%23 )3,!.$ 7!34% -!.!'%-%.4 $)342)#4
3¢§¤£´«¤ ®¥ 2¤µ¤´¤²Ǿ %·¯¤£¨³´±¤² £ #§ ¦¤ ¨ &´£ " « ¢¤
"´£¦¤³ £ !¢³´ « ȃ '¤¤± « &´£
For the Year Ended December 31, 2021
Final Budget
OriginalFinalVariance with
BudgetBudgetActualActual
REVENUES
Real Property Taxes$ 783,150$ 783,150$ 783,150$ -
Use of Money & Property7,100 7,100 159 (6,941)
Compost Facility 35,000 35,000 59,199 24,199
Total Revenues 825,250 825,250 842,508$ 17,258
!002/02)!4%$ &5.$ "!,!.#%
Prior years' surplus 70,000 70,000
Total Revenues and
Appropriated Fund Balance$ 895,250$ 895,250
EXPENDITURES
Bank Charges$ 1,600$ 4,0003,943 $ 57
Building Maintenance6,000 6,000 5,791 209
Building Utilities 12,000 12,600 12,51684
Commissioner's Fees 12,500 12,500 11,690 810
Compost Equipment Maintenance8,000 8,000 3,299 4,701
Compost Facility Supplies2,000 2,000 2,000
Compost Facility Utilities4,200 4,200 3,681 519
Consultants5,000 11,100 11,08515
Employee Benefits, Taxes & Wages 520,100 476,800 431,498 45,302
Employee Training5,000 5,000 1,969 3,031
Equipment Maintenance9,800 36,100 36,03367
Ferry Transportation 84,000 84,000 81,3682,632
Garbage Tipping Fees & Hauling 129,000 130,800 130,74654
Insurance 38,700 38,700 20,913 17,787
Landfill Maintenance7,000 12,700 12,68515
Legal Fees6,000 6,000 1275,873
Office Expense4,850 5,250 5,173 77
Professional Fees 12,000 12,000 11,250 750
Transfer Station Utilities5,500 5,500 4,726 774
Transfer Station Improvements2,000 2,000 1,943 57
Workers' Compensation 20,000 20,000 11,4658,535
Total Expenditures$ 895,250$ 895,250 801,901$ 93,349
Net Change in Fund Balance 40,607
Fund Balance - Beginning of Year 495,082
Fund Balance - End of Year$ 535,689
.®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-22 -