HomeMy WebLinkAbout2023 CUTCHOGUE FIRE DISTRICT
ANNUAL FINANCIAL REPORT
December 31, 2023
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITOR'S REPORT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A
ANNUAL FINANCIAL REPORT
FINANCIAL SECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SUPPLEMENTAL SECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
NOTES TO ANNUAL FINANCIAL REPORT . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 28
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF ANNUAL FINANCIAL
REPORT PERFORMED IN ACCORDANCE WITH
GO VERNMENT A UDITING STANDARDS: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
bQ,HEEHAN
ACCOUNTANTSID I
165 Orinoco Drive
Brightwaters,NY 11718
T:631.665.7040 1 F:631.665.7014
15 South Bayles Avenue
Port Washington,NY 11050
T:516.883.5510 1 F:516.767.7438
www.sheehancpa.com
INDEPENDENT AUDITOR'S REPORT
To the Board of Fire Commissioners
Cutchogue Fire District
Cutchogue, New York
Report on the Audit of the Annual Financial Report
Unmodified Opinion under Regulatory Basis of Accounting
We have audited the accompanying Annual Financial Report (Financial Section) of Cutchogue
Fire District(the District), as of and for the year ended December 31, 2023, and the related notes
to the Annual Financial Report, which collectively comprise the District's basic financial
statements as listed in the table of contents.
In our opinion, the Annual Financial Report (Financial Section) referred to above presents fairly,
in all material respects, the assets, liabilities and fund balances of the District, as of December
31, 2023, and the revenues it received, and expenditures made for the year then ended in
conformity with the basis of accounting described in Note 1.
Adverse Opinion under U.S. Generally Accepted Accounting Principles
In our opinion, because of the significance of the matter discussed in the Basis for Adverse
Opinion under U.S. Generally Accepted Accounting Principles paragraph, the Annual Financial
Report (Financial Section) referred to above does not present fairly, in accordance with
accounting principles generally accepted in the United States of America, the financial position
of the District as of December 31, 2023, or changes in financial position for the year then ended.
Basis for Adverse Opinion under U.S. Generally Accepted Accounting Principles and
Unmodified Opinion under Regulatory Basis of Accounting
As described more fully in Note 1, the District prepares its Annual Financial Report (Financial
Section) using accounting practices prescribed or permitted by the New York State Office of the
State Comptroller, which is a basis of accounting other than accounting principles generally
accepted in the United States of America, to meet the requirements of the New York State Office
of the State Comptroller.
-A-
An Independent Member of the BDO Alliance USA
To the Board of Fire Commissioners
Cutchogue Fire District
Page A2
The effects on the Annual Financial Report (Financial Section) of the variances between the
regulatory basis of accounting described in Note 1 and accounting principles generally accepted
in the United States of America, although not reasonably determinable, are presumed to be
material.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the
Annual Financial Report (Financial Section) section of our report. We are required to be
independent of the District and 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 is sufficient and appropriate to provide a basis for our unmodified audit opinion on the
regulatory basis of accounting.
Responsibilities of Management for the Annual Financial Report(Financial Section)
Management is responsible for the preparation and fair presentation of the Annual Financial
Report(Financial Section) in accordance with the financial reporting provisions of the New York
State Office of the State Comptroller, as described in Note 1. Management is also responsible
for the design, implementation and maintenance of internal control relevant to the preparation
and fair presentation of the Annual Financial Report (Financial Section)that is free from material
misstatement, whether due to fraud or error.
In preparing the Annual Financial Report, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the District's
ability to continue as a going concern within one year after the date the financial statements are
available to be issued.
Auditor's Responsibilities for the Audit of the Annual Financial Report (Financial Section)
Our objectives are to obtain reasonable assurance about whether the Annual Financial Report
(Financial Section) as a whole is free from material misstatement, whether due to fraud or error,
and to issue an auditor's report that includes our opinion. 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 generally accepted auditing standards and Government Auditing Standards
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 Annual Financial Report(Financial Section).
In performing an audit in accordance with generally accepted auditing standards and Government
Auditing Standards, we:
To the Board of Fire Commissioners
Cutchogue Fire District
Page A3
• Exercise professional judgment and maintain professional skepticism throughout the
audit.
• Identify and assess the risks of material misstatement of the Annual Financial Report
(Financial Section), 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 Annual Financial Report
(Financial Section).
• 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 the District's internal control. Accordingly,
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 Annual Financial Report(Financial Section).
• Conclude whether, in our judgment there are conditions or events, considered in the
aggregate, that raise substantial doubt about the District's 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.
Other Information
Management is responsible for the other information included in the Annual Financial Report.
The other information comprises the supplemental section, except for the Fire District
Questionnaire, listed on the table of contents of the Annual Financial Report but does not include
the basic financial section and our auditor's report thereon. Our opinion on the Annual Financial
Report (Financial Section) does not cover the supplemental section except for the Fire District
Questionnaire, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the Annual Financial Report (Financial Section), our
responsibility is to read the other information and consider whether a material inconsistency
exists between the other information and the basic financial statements, or the other information
otherwise appears to be materially misstated. If, based on the work performed, we conclude that
an uncorrected material misstatement of the other information exists, we are required to describe
it in our report.
bSHEEHAN
To the Board of Fire Commissioners
Cutchogue Fire District
Page A4
Other Reporting Required by Government Auditinz Standards
In accordance with Government Auditing Standards, we have also issued our report dated
April 15, 2024 on our consideration of the District's internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations, contracts, grant
agreements, and other matters. The purpose of that report is solely to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the effectiveness of the District's internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering the District's internal control over financial
reporting and compliance.
�;���Joa7
Brightwaters, New York
April 15, 2024
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023 -12/31/2023
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
Authorization
Article 3, Section 30 of the General Municipal Law
1. ***Every Municipal Corporation*** shall annually make a report of its financial condition to the
Comptroller. Such report shall be made by the Chief Fiscal Officer of such Municipal
Corporation***
5. All reports shall be certified by the officer making the same and shall be filed with the
Comptroller*** it shall be the duty of the incumbent officer at the time such reports are required
to be filed with the Comptroller to file such report***
Certification Statement
I, Mr. Peter J. Zwerlein (LG471179002500), hereby certify that I am the Chief Financial Officer of the
Fire District of Cutchogue, and that the information provided in the Annual Financial Report of the Fire
District of Cutchogue for the fiscal year ended 12/31/2023, is true and correct to the best of my
knowledge and belief.
Table of contents
FinancialStatements ..................................................................................................................... 1
A- General .................................................................................................................. 2
H -Capital Projects .................................................................................................................. 12
K- Schedule of Non-Current Government Assets .................................................................................................................. 17
W-Schedule of Non-Current Government Liabilities .................................................................................................................. 19
SupplementalSchedules ..................................................................................................................... 20
Statement of Indebtedness .................................................................................................................. 21
BondRepayment .................................................................................................................. 23
BankReconciliation .................................................................................................................. 24
Employee and Retiree Benefits .................................................................................................................. 26
Fire District Questionnaire .................................................................................................................. 27
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
Financial Statements
Financial information for the following funds and accounts groups are included in the Annual Financial Report filed by your
government for the fiscal year ended 2023 and has been used by the OSC as the basis for preparing this Annual Financial
Report for the fiscal year ended 2023:
List of funds being used
• A- General
• H -Capital Projects
• K- Schedule of Non-Current Government Assets
• W-Schedule of Non-Current Government Liabilities
All amounts included in this Annual Financial Report for 2023 represent data filed by your government with OSC as
reviewed and adjusted where necessary.
1 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
A-General
Balance Sheet
i V VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV
Cash and Cash Equivalents
200 - Cash $161,692.00 $963,373.00 $650,485.00
Total for Cash and Cash Equivalents $161,692.00 $963,373.00 $650,485.00
Restricted Cash and Cash Equivalents
230 - Cash Special Reserves $106,840.00 $1,885,942.00 $1,682,071.00
Total for Restricted Cash and Cash Equivalents $106,840.00 $1,885,942.00 $1,682,071.00
Investments
450 - Investments in Securities $1,423,826.00 - -
Total for Investments $1,423,826.00 $0.00 $0.00
Restricted Investments
452 - Investments in Securities Special Reserves $1,518,782.00 - -
461 - Service Award Program Assets $3,918,167.00 $3,502,929.00 $3,269,922.00
Total for Restricted Investments $5,436,949.00 $3,502,929.00 $3,269,922.00
2 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
A-General
Balance Sheet
Payables
600 -Accounts Payable $151,967.00 $56,217.00 $56,033.00
601 -Accrued Liabilities $17,105.00 $16,165.00 $15,793.00
Total for Payables $169,072.00 $72,382.00 $71,826.00
Restricted Fund Balance
878- Capital Reserve $1,625,622.00 $1,885,942.00 $1,682,071.00
895- Restricted for Service Award Program $3,918,167.00 $3,502,929.00 $3,269,922.00
Total for Restricted Fund Balance $5,543,789.00 $5,388,871.00 $4,951,993.00
Assigned Fund Balance
915-Assigned Unappropriated Fund Balance $36,287.00 $106,127.00 $33,484.00
Total for Assigned Fund Balance $36,287.00 $106,127.00 $33,484.00
Unassigned Fund Balance
917- Unassigned Fund Balance $1,380,159.00 $784,864.00 $545,175.00
Total for Unassigned Fund Balance $1,380,159.00 $784,864.00 $545,175.00
3 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
A-General
Balance Sheet
4 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
A-General
Results of Operations
Property Taxes
1001 - Real Property Taxes $2,022,531.00 $1,956,185.00 $1,691,135.00
Total for Property Taxes $2,022,531.00 $1,956,185.00 $1,691,135.00
Property Tax Items
1081 - Other Payments In Lieu of Taxes $16,104.00 $13,894.00 -
Total for Property Tax Items $16,104.00 $13,894.00 $0.00
Use of Money and Property
2401 - Interest and Earnings $539,377.00 $96,667.00 $99,011.00
2410 - Rental of Real Property $1,700.00 $1,625.00 $1,075.00
Total for Use of Money and Property $541,077.00 $98,292.00 $100,086.00
Sales of Property and Compensation for Loss
2665- Sales of Equipment $3,975.00 $1,000.00 $16,128.00
Total for Sales of Property and Compensation for Loss $3,975.00 $1,000.00 $16,128.00
Other Revenues
2701 - Refunds of Prior Year Expenditures $198.00 $50.00 $120.00
2770 - Unclassified - - $5.00
Total for Other Revenues $198.00 $50.00 $125.00
5 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
A-General
Results of Operations
Federal Aid
4960 - Federal Aid Emergency Disaster Assistance $4,011.00 - -
Total for Federal Aid $4,011.00 $0.00 $0.00
6 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
A-General
Results of Operations
Public Safety
Fire Protection
34101 - Fire Protection- Personal Services $226,607.00 $220,088.00 $215,780.00
34102- Fire Protection- Equipment and Capital Outlay $667,263.00 $107,397.00 $261,061.00
34104- Fire Protection- Contractual $635,527.00 $589,505.00 $504,201.00
Total for Fire Protection $1,529,397.00 $916,990.00 $981,042.00
Total for Public Safety $1,529,397.00 $916,990.00 $981,042.00
Employee Benefits
Employee Benefits
90108- State Retirement System - Employee Benefits $8,051.00 $5,797.00 $3,863.00
90258- Local Pension Fund - Employee Benefits $216,470.00 $246,219.00 $199,733.00
90308- Social Security- Employee Benefits $17,335.00 $16,837.00 $16,509.00
90408-Workers' Compensation - Employee Benefits $53,296.00 $51,838.00 $77,615.00
90458- Life Insurance- Employee Benefits $8,669.00 $8,669.00 $6,173.00
90508- Unemployment Insurance- Employee Benefits $2,421.00 $2,724.00 $2,182.00
90558- Disability Insurance- Employee Benefits $615.00 $637.00 $587.00
90608- Hospital, Medical and Dental Insurance- Employee $15,352.00 $14,579.00 $11,392.00
Benefits
Total for Employee Benefits $322,209.00 $347,300.00 $318,054.00
7 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
A-General
Results of Operations
Total for Employee Benefits $322,209.00 $347,300.00 $318,054.00
Debt Service
Debt Service
97856- Installment Purchase Debt- Debt Principal - - $47,961.00
97857- Installment Purchase Debt- Debt Interest - - $7,962.00
97886- Leases - Debt Principal $50,512.00 $49,220.00 -
97887- Leases - Debt Interest $5,405.00 $6,701.00 -
Total for Debt Service $55,917.00 $55,921.00 $55,923.00
Total for Debt Service $55,917.00 $55,921.00 $55,923.00
8 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
A-General
Changes in Fund Balance
8021 - Fund Balance- Beginning of Year $6,279,862.48 $5,530,652.48 $5,078,197.48
8012 - Prior Period Adjustment OR Change in Accounting - - $0.00
Principle- Increase in Fund Balance
8022 - Restated Fund Balance- Beginning of Year $6,279,862.48 $5,530,652.48 $5,078,197.48
Add Revenues and Other Sources $2,587,896.00 $2,069,421.00 $1,807,474.00
Deduct Expenditures and Other Uses $1,907,523.00 $1,320,211.00 $1,355,019.00
8029- Fund Balance- End of Year $6,960,235.48 $6,279,862.48 $5,530,652.48
9 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
A-General
Adopted Budget Summary
1049- Est Rev- Property Taxes $1,953,729.00 $2,022,529.00 $1,956,178.00
2499- Est Rev- Use of Money and Property $9,700.00 $3,050.00 $2,500.00
10 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
A-General
Adopted Budget Summary
3999-App- Public Safety $1,103,200.00 $1,120,450.00 $1,084,600.00
9199-App- Employee Benefits $225,600.00 $534,100.00 $568,050.00
9899-App- Debt Service $219,629.00 $56,029.00 $56,028.00
962 - Other Budgetary Purposes $415,000.00 $315,000.00 $250,000.00
11 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
H -Capital Projects
Balance Sheet
i V VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV
Investments
450 - Investments in Securities $823,003.00 - -
Total for Investments $823,003.00 $0.00 $0.00
12 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
H -Capital Projects
Balance Sheet
Payables
600 -Accounts Payable $8,619.00 - -
Total for Payables $8,619.00 $0.00 $0.00
Notes Payable
626- Bond Anticipation Notes Payable $1,500,000.00 - -
Total for Notes Payable $1,500,000.00 $0.00 $0.00
SOMINEENOWN
Unassigned Fund Balance
917- Unassigned Fund Balance ($685,616.00) - -
Total for Unassigned Fund Balance ($685,616.00) $0.00 $0.00
13 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
H -Capital Projects
Results of Operations
Use of Money and Property
2401 - Interest and Earnings $25,986.00 - -
Total for Use of Money and Property $25,986.00 $0.00 $0.00
14 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
H -Capital Projects
Results of Operations
Public Safety
Fire Protection
34102- Fire Protection- Equipment and Capital Outlay $711,602.00 - -
Total for Fire Protection $711,602.00 $0.00 $0.00
Total for Public Safety $711,602.00 $0.00 $0.00
15 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
H -Capital Projects
Changes in Fund Balance
8021 - Fund Balance- Beginning of Year $0.00 $0.00 $0.00
8022 - Restated Fund Balance- Beginning of Year $0.00 $0.00 $0.00
Add Revenues and Other Sources $25,986.00 $0.00 $0.00
Deduct Expenditures and Other Uses $711,602.00 $0.00 $0.00
8029- Fund Balance- End of Year ($685,616.00) $0.00 $0.00
16 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
K-Schedule of Non-Current Government Assets
Schedule of Non-Current Government Assets
i V VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV
101 - Land $1,053,403.00 $1,053,403.00 $1,053,403.00
105- Construction Work In Progress $47,250.00 - -
102 - Buildings $1,555,666.00 $1,579,876.00 $1,579,876.00
103- Improvements Other Than Buildings $297,207.00 $297,207.00 $297,207.00
104 - Machinery and Equipment $4,074,636.00 $4,037,311.00 $4,753,942.00
106- Infrastructure $425,648.00 $425,648.00 $425,648.00
124 - Intangible Lease Asset- Machinery and Equipment $716,631.00 $716,631.00 -
112 -Accumulated Depreciation Buildings ($821,547.00) ($795,879.00) ($795,879.00)
113-Accumulated Depreciation Improvements Other than ($190,791.00) ($178,424.00) ($178,424.00)
Buildings
114 -Accumulated Depreciation Machinery and Equipment ($2,854,695.00) ($2,651,643.00) ($2,812,887.00)
116-Accumulated Depreciation Infrastructure ($384,552.00) ($382,146.00) ($382,146.00)
134 -Accumulated Amortization, Intangible Lease Asset- ($232,908.00) ($197,076.00) -
Machin er and E ui meet
17 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
K-Schedule of Non-Current Government Assets
Schedule of Non-Current Government Assets
108- Net Pension Asset Proportionate Share - $4,984.00 -
18 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
W-Schedule of Non-Current Government Liabilities
Schedule of Non-Current Government Liabilities
i V VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV
685- Installment Purchase Contract Debt - $0.00 $259,364.00
638- Net Pension Liability Proportionate Share $38,581.00 $0.00 $185.00
682 - Lease Liability $159,632.00 $210,144.00 -
19 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
Supplemental Schedules
The Supplemental Schedules includes the following schedules:
• Statement of Indebtedness
• Bond Repayment
• Bank Reconciliation
• Employee and Retiree Benefits
• Fire District Questionnaire
20 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
Statement of Indebtedness
Debt Summary
Debt Type Beginning Balance Debt Issued Principal Paid Paid From debt Accreted Interest Prior Year Adjustment Ending Balance
Proceeds
Bond Anticipation
Note $0.00 $1,500,000.00 $0.00 $0.00 $0.00 $0.00 $1,500,000.00
Total $0.00 $1,500,000.00 $0.00 $0.00 $0.00 $0.00 $1,500,000.00
21 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
Statement of Indebtedness
Debt Records
Debt Type/Purpose Lender Issue Maturity Beginning Balance Debt Issued Principal Paid Paid From Debt Prior Year Accreted Interest Ending Balance
Name Date Date Proceeds Adjustment
Greene
Bond Anticipation Note County 6/27/23 6/27/24 $0.00 $1,500,000.00 $0.00 $0.00 $0.00 $0.00 $1,500,000.00
Fire House Project Comm
ercial
Bank
22 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
Bond Repayment
Fiscal Year Ending Bond Principal Due Bond Interest Due Total Due Remaining Principal Balance
2024 $0.00 $0.00 $0.00 $0.00
Total $0.00 $0.00 $0.00
$0.00 Total Bond Ending Balance for Statement of Indebtedness.
23 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
Bank Reconciliation
Accounts
Account No. Account Type Associated Fund(s) Bank Balance Deposits In Transit Outstanding Checks Adjustments Total
3591 Savings A $28,510.00 $0.00 $0.00 $0.00 $28,510.00
6692 Checking A $67,586.00 $97,572.00 ($43,159.00) $0.00 $121,999.00
6693 Checking A $11,183.00 $0.00 $0.00 $0.00 $11,183.00
9529 Savings A $5,040.00 $0.00 $0.00 $0.00 $5,040.00
3080 Savings A $101,800.00 $0.00 $0.00 $0.00 $101,800.00
Total $214,119.00 $97,572.00 ($43,159.00) $0.00 $268,532.00
Total Cash From Financials $268,532.00
24 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
Bank Reconciliation
Collateral ization of Cash Investments and Collateralization of Investments
Total Bank Balance $214,119.00 Investments From Financials $3,765,611.00
FDIC Insurance $214,119.00 Market Value as of Fiscal Year End Date $3,765,611.00
Collateralized with Securities held in possession of the Collateralized with Securities held in possession of the
municipality or its agent or otherwise secured $0.00 municipality or its agent or otherwise secured
$0.00
Total of FDIC Insurance and Collateralized with
securities held in possession of the municipality or its
agent or otherwise secured $214,119.00
25 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
Employee and Retiree Benefits
Total Number
Full Time Employees Part Time Employees Volunteers with Paid Benefits Retirees with Paid Benefits
1 16 99
Number Receving Benefits
Benefit Amount Full Time Part Time Volunteer Retiree
Local Pension Fund $216,470.00 99
Social Security $17,335.00 1 16
Worker's Compensation $53,296.00 1 16 99
Life Insurance $8,669.00 99
Unemployment Insurance $2,421.00 1 16
Disability Insurance $615.00 1 16
Hospital, Medical and Dental Insurance $15,352.00 1 99
Union Welfare Benefits
State Retirement System $8,051.00 1
Police Retirement
Fire Retirement
Employee Benefits,Other
Supplemental Benefit Payments to Disabled Firefighters
Total Employee Benefits Paid $322,209.00
26 OSC Municipality Code 471179002500
Fire District of Cutchogue
Annual Financial Report
For the Fiscal Period 01/01/2023- 12/31/2023
Fire District Questionnaire
Questions
1. Has your Fire District adopted a written procurement policy and is it complied with? Yes
2. Does your Fire District have a written travel policy and is it complied with? Yes
3. Does your Fire District perform monthly bank reconciliations? Yes
4. Has your Fire District adopted an investment policy as required by General Municipal Law, Section 39? Yes
5. Has your Fire District contracted to have an independent audit of its financial statements? Yes
6. What is your Fire District's statutory spending Limitation*for the next fiscal year? $2,956,733.00
7. What is your Fire District's statutory spending limitation margin for the next fiscal year? $2,055,104.00
8. Does your Fire District have a Length of Service Award Program (LOSAP)for volunteer firefighters? Yes
27 OSC Municipality Code 471179002500
CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
1. Summary of Significant Accounting Policies
The Annual Financial Report (AFR) of the Cutchogue Fire District (the District), as of
and for the year ended December 31, 2023, has been prepared in conformity with
accounting practices prescribed or permitted by the New York State Office of the State
Comptroller (regulatory basis), which is a special purpose framework of accounting other
than U.S. generally accepted accounting principles.
Financial reporting entity: The District is a governmental entity that provides fire
protection to the local community. The District receives most of its funding from
property taxes.
The District is governed by the laws of the State of New York. The Board of Fire
Commissioners is the legislative body responsible for the overall operation of the
District. All activities and functions performed for the District are its direct responsibility.
The Treasurer serves as Chief Fiscal Officer of the District.
Basis of presentation: The AFR provides information about the District's funds. 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 segregated for the purpose of
carrying on specific activities or attaining certain objectives in accordance with special
regulations, restrictions, or limitations. The following fund types are utilized by the
District:
Governmental:
General Fund
The General Fund is the principal operating fund of the District and is used to account
for all financial resources except those required to be accounted for in another fund.
Debt service is also accounted for in the General Fund.
Equipment Reserve Fund
The Equipment Reserve Fund is used to account for and report financial resources to be
used for the acquisition of equipment needed by the District.
Building Reserve Fund
The Building Reserve Fund is used to account for and report financial resources to be
used for the acquisition, construction, or renovation of major capital facilities.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
1. Summary of Significant Accounting Policies (continued)
Basis of presentation (continued):
Governmental (continued):
Service Award Program Fund
The Service Award Program Fund is used to account for and report financial
resources related to the District's length of service award program (LOSAP).
For AFR purposes, these funds are all combined and shown within the General Fund.
Capital Proiects Fund
This fund accounts for financial resources used for the acquisition, construction,
or improvement of major capital assets.
The initial funding for the Capital Projects Fund was derived from the issuance of a Bond
Anticipation Note (BAN).
Basis of accounting: The accompanying AFR has been prepared on the regulatory basis
of accounting using the current financial resources measurement focus. Revenues are
recognized when measurable and available. "Available" means collectible within the
current period or within 60 days after year-end. Expenditures are generally recognized
under the modified accrual basis of accounting when the related liability is incurred. The
exception to this general rule is that principal and interest on general obligation long-term
debt, if any, is recognized when due.
Cash and cash equivalents: Cash and cash equivalents include demand deposits, New
York Cooperative Liquid Assets Securities System (NYCLASS) accounts and temporary
investments with original maturities of three months or less from the date of acquisition.
Investments: An investment is a security or other asset (a) that a government holds
primarily for the purpose of income or profit and (b) with present service capacity that is
based solely on its ability to generate cash or to be sold to generate cash. Investments are
generally reported at fair value, except certificates of deposit, which are reported at cost.
Interfund transfers: The operations of the District give rise to certain transactions
between funds, including transfers of expenditures and revenues to provide services and
construct assets. This is either by budget, Board resolution, permissive referendum, or
mandatory referendum.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
1. Summary of Significant Accounting Policies (continued)
Encumbrances: Encumbrance accounting is used for budget control and monitoring
purposes and is reported as part of the governmental funds. Under this method, purchase
orders, contracts, and other commitments for the expenditures of monies are recorded to
reserve applicable appropriations. Outstanding encumbrances as of year-end are
presented as assigned unappropriated fund balance and do not represent expenditures or
liabilities. These commitments will be honored in the subsequent period. Related
expenditures are recognized at that time, as the liability is incurred, or the commitment is
paid.
Fund balance: In accordance with Governmental Accounting Standards Board (GASB)
Statement No. 54, Fund Balance Reporting and Governmental Fund 1 ype Definitions,
(GASB 54), fund balance is broken down into five different classifications: non-
spendable, restricted, committed, assigned, and unassigned.
Non-spendable consists of assets that are inherently non-spendable in the current period,
either because of their form or because they must be maintained intact, including prepaid
items, inventories, long-term portions of loan receivable, financial assets held for resale,
and principal of endowments.
Restricted consists of amounts that are subject to externally enforceable legal purpose
restrictions imposed by creditors, grantors, contributors, or laws and regulations of other
governments or through constitutional provisions or enabling legislation.
Committed consists of amounts that are subject to a purpose constraint imposed by a
formal action of the government's highest level of decision-making authority before the
end of the fiscal year and that require the same level of formal action to remove the
constraint. The Board of Fire Commissioners is the decision-making authority that can,
by Board resolution, prior to the end of the fiscal year, commit fund balance.
Assigned consists of amounts that are subject to a purpose constraint that represents an
intended use established by the District's highest level of decision-making authority or by
their designated body or official. The purpose of the assignment must be narrower than
the purpose of the General Fund and in funds other than the General Fund, assigned fund
balance represents the residual amount of fund balance. The Board of Fire
Commissioners, by Board resolution, can authorize the Treasurer to assign fund balance.
Unassigned represents the residual classification for the District's General Fund and could
report a surplus or deficit. In funds other than the General Fund, the unassigned
classification should be used only to report a deficit balance resulting from overspending
for specific purposes for which amounts had been restricted, committed, or assigned.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
1. Summary of Significant Accounting Policies (continued)
Fund balance (continued):
When resources are available from multiple classifications, the District spends funds in
the following order:
• Restricted amounts are deemed to have been spent when an expenditure is
incurred for purposes for which both restricted and unrestricted (committed,
assigned, or unassigned) amounts are available.
• Within unrestricted fund balance, expenditures are deemed to be spent first from
committed amounts, followed by assigned amounts and then unassigned amounts
when expenditures are incurred for purposes for which amounts in any of those
unrestricted fund balance classifications could be used.
Fixed assets: Fixed assets, which include land, buildings, improvements other than
buildings, machinery and equipment, and infrastructure, are reported on the Schedule K
(General Fixed Assets) on the AFR. The District defines fixed assets as assets with an
initial, individual cost of more than $2,500. Such assets are recorded at historical cost or
estimated historical cost if purchased or constructed.
Major outlays for fixed assets and improvements are capitalized as projects are
constructed. The cost of normal maintenance and repairs that do not add to the value of
the asset or materially extend assets life are not capitalized.
The costs associated with the acquisition or construction of fixed assets are shown as
capital outlay expenditures in governmental funds.
Real property taxes: All real property assessments are made by the Town of Southold.
Real property tax payments are due in two equal installments; the first half payable on
December 1st(lien and levy date) preceding the year for which the same is levied and the
second half payable May 10 h, with the first half payable without penalty to January l Om
and the second half payable without penalty to May 31'. After May 31", all taxes must be
paid to Suffolk County Treasurer with a 5% penalty charge and interest at the rate of 1%
per month from February 1st
The Town of Southold Receiver of Taxes collects all real estate taxes and distributes the
tax collections to the District. All payments made to the District are made in the year for
which the tax has been levied. The Town of Southold Receiver of Taxes turns over
uncollected items to the Suffolk County Treasurer who continues the collection of these
items. Responsibility for the collection of unpaid taxes rests with Suffolk County.
-31-
CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
1. Summary of Significant Accounting Policies (continued)
Budgetary data: The District prepares an operating budget for the General Fund each
year. The budget is adopted by the Board of Fire Commissioners as its final budget for
the coming year as it relates to total spending. The District can adjust the budget as
needed by transferring certain budgeted amounts between accounts. The budget is not
subject to referendum. All budget appropriations lapse at the end of each year.
Use of estimates: The preparation of the AFR in conformity with the regulatory basis of
accounting requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. The District's results are affected by economic,
political, legislative, regulatory, and legal actions. Economic conditions, such as
recessionary trends, inflation, interest and monetary exchange rates, government fiscal
policies, and changes in the prices of materials can have a significant impact on the
District's operations. These factors and other events may cause actual results to differ
from management's estimates.
Newly adopted accounting standards: The District has adopted all current standards of
the GASB that are applicable.
Subsequent events: Management has evaluated subsequent events through the date of
the report, which is the date the financial statements were available to be issued.
2. Deposits with Financial Institutions and Investments
The District's investment policies are governed by state statutes and District policy.
Resources must be deposited in Federal Deposit Insurance Corporation (FDIC) insured
commercial banks or trust companies located within the state. Permissible investments
include special time deposit accounts, certificates of deposit, obligations of the United
States of America, obligations guaranteed by agencies of the United States of America,
and obligations of the State of New York. Collateral is required for demand and time
deposits and certificates of deposit not covered by FDIC insurance.
Custodial credit risk is the risk that in the event of a bank failure, the District's deposits
may not be returned to it. The District's risk exposure can be categorized as follows:
1. Collateralized by securities held by the pledging financial institution's trust
department or agent, but not in the District's name.
2. Collateralized by securities held by the pledging financial institution, but not
in the District's name.
3. Uncollateralized.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
2. Deposits with Financial Institutions and Investments (continued)
At December 31, 2023, the District's bank balances were $214,119 of which the entire
amount was covered by FDIC insurance and/or collateral issued by M&T Bank, which is
held by the pledging financial institution, in the District's name.
Market risk includes global events that could impact the value of investment securities
such as a pandemic, international conflict, or bank failure.
Investment Pool: The District participates in a multi-municipal cooperation investment
pool agreement pursuant to New York State General Municipal Law Article 5-G, Section
119-0, whereby it holds a portion of the investments in cooperation with other
participations. At December 31, 2023, the District held $3,864,983 in NYCLASS in
investments consisting of various investments in securities issued by the United States
and its agencies. The investments are highly liquid and considered to be cash equivalents
and are included as such of the District's AFR.
Fund Amount
General $ 1,423,826
Equipment Reserve 826,441
Building Reserve 791,713
Capital Projects 823,003
Total $ 3,864,983
The above amounts represent the cost of the investment pool shares and are considered to
approximate market value.
The investment pool is categorically exempt from the New York State collateralization
requirements.
3. Short-Term Liabilities
Liabilities for Bond Anticipation Notes (BANS) are generally accounted for in the capital
projects fund. The notes or renewal thereof, may not extend more than two years beyond
the original date of issue unless a portion is redeemed within two years and within each
12-month period, thereafter.
State law requires that BANS issued for capital purposes be converted to long-term
obligations within five-years after the original issue date. However, BANS issued for
assessable improvement projects may be renewed for periods equivalent to the maximum
life of the permanent financing, provided that stipulated annual reductions of principal
are made.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
3. Short-Term Liabilities (continued)
As of December 31, 2023, the District had one BAN outstanding, which matures on June
27, 2024. The District plans to repay the BAN with proceeds from a bond issuance,
which was approved by voters at a special election on September 27, 2022. A summary
of the BAN is as follows:
Gross Interest
BAN Amount Amount Rate
Construction project $1,500,000 $63,600 4.24%
4. Fixed Assets
A summary of changes in fixed assets follows:
Balance Balance
12/31/22 Additions Deletions 12/31/23
Fixed assets not being depreciated
Land $1,053,403 $ - $ - $1,053,403
Construction-in-progress - 47,250 - 47,250
Total fixed assets not being
depreciated 1,053,403 47,250 - $1,100,653
Fixed assets being depreciated
Buildings 1,579,876 - (24,210) 1,555,666
Improvements other than buildings 297,207 - - 297,207
Machinery and equipment 4,037,311 37,325 - 4,074,636
Infrastructure 425,648 - - 425,648
Intangible lease asset-machinery
and equipment 716,631 - - 716,631
Total fixed assets being depreciated 7,056,673 37,325 24,210 7,069,788
Less: accumulated depreciation and
amortization 4,205,168 279,325 - 4,484,493
Total fixed assets being depreciated,
net 2,851,505 (242,000) 24,210 2,585,295
Fixed assets,net $3,904,908 $(194,750) $ 24,210 $3,685,948
The truck lease amortization and intangible lease asset are presented on the District's
AFR, which is included in the above table as Intangible lease asset - machinery and
equipment. With the implementation of GASB 87, a lease meeting the criteria of this
Statement requires the lessee to recognize a lease liability and an intangible right-to-use
asset.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
5. Lease
In 2017, the District entered into a lease purchase finance agreement with M&T Bank
Equipment Finance for the purchase of a 2017 Spartan Fire Truck that ends on November
21, 2026. The value of the equipment at the inception of the lease was $716,631 which is
included in Note 4 as Intangible lease asset- machinery and equipment.
The District made a down payment of $216,631 and financed the remaining $500,000
balance. Interest and principal are being provided for in the General Fund. Interest is at
an annual rate of 2.594%. Lease activity for the year ended December 31, 2023, was as
follows:
Beginning Ending
Balance Additions Reductions Balance
M&T Bank Equipment
Finance $ 210,144 $ - $ (50,511) $ 159,632
Total $ 210,144 $ - $ (50,511) $ 159,632
Annual requirements to amortize this lease liability and related interest are as follows:
Due in Fiscal Year Ended Principal Interest Total
2024 $ 51,838 $ 4,190 $ 56,028
2025 53,199 2,829 56,028
2026 54,595 1,433 56,028
Total $ 159,632 $ 8,452 $ 168,084
6. Pension Plan
Plan description: The District participates in the New York State and Local Employees'
Retirement System (ERS), which is part of the New York State and Local Retirement
System (the System). This is a cost-sharing, multiple-employer-defined benefit retirement
system. The net position of the System is held in the New York State Common
Retirement Fund (the Fund), which was established to hold all net assets and record
changes in fiduciary net position allocated to the System.
The Comptroller of the State of New York serves as the Trustee of the Fund and is the
administrative head of the System. System benefits are established under the provisions
of the New York State Retirement and Social Security Law (NYSRSSL). Once a public
employer elects to participate in the System, the election is irrevocable. The New York
State Constitution provides that pension membership is a contractual relationship and
plan benefits cannot be diminished or impaired. Benefits can be changed for future
members only by enactment of a State statute. The District also participates in the Public
Employees' Group Life Insurance Plan (GLIP), which provides death benefits in the form
of life insurance. GLIP amounts are apportioned to and included in the ERS.
-35-
CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
6. Pension Plan (continued)
Plan description (continued):
The System is included in the State's financial report as a pension trust fund. The
System's financial report may be found at https://www.osc.state.ny.us/retirement/
resources/financial-statements-and-supplementary-information or obtained by writing to
the New York State and Local Retirement System, 110 State Street, Albany, New York
12244.
Benefits provided: The System provides retirement benefits as well as death and
disability benefits.
Tiers I and 2
Eligibility: Tier 1 members, with the exception of those retiring under special retirement
plans, must be at least age 55 to be eligible to collect a retirement benefit. There is no
minimum service requirement for Tier 1 members. Tier 2 members, with the exception of
those retiring under special retirement plans, must have five years of service and be at
least age 55 to be eligible to collect a retirement benefit. The age at which full benefits
may be collected for Tier 1 is 55 and the full benefit age for Tier 2 is 62.
Benefit calculation: Generally, the benefit is 1.67% of final average salary for each year
of service if the member retires with less than 20 years. If the member retires with 20 or
more years of service, the benefit is 2% of final average salary for each year of service.
Tier 2 members with five or more years of service can retire as early as age 55 with
reduced benefits. Tier 2 members ages 55 or older with 30 or more years of service can
retire with no reduction in benefits. As a result of Article 19 of the NYSRSSL, Tier 1
and Tier 2 members who worked continuously from April 1, 1999, through October 1,
2000, received an additional month of service credit for each year of credited service they
have at retirement, up to a maximum of 24 additional months.
Final average salary is the average of the wages earned in the three highest consecutive
years. For Tier 1 members who joined on or after June 17, 1971, each year of final
average salary is limited to no more than 20% of the previous year. For Tier 2 members,
each year of final average salary is limited to no more than 20% of the average of the
previous two years.
Tiers 3, 4, and 5
Eligibility: Tier 3, 4, and 5 members, with the exception of those retiring under special
retirement plans, must have five years of service and be at least age 55 to be eligible to
collect a retirement benefit. Legislation that went into effect as of April 9, 2022 changed
the vesting requirements for Tier 5 members from ten to five years. The full benefit age
for Tiers 3, 4, and 5 is 62.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
6. Pension Plan (continued)
Benefits provided (continued):
Tiers 3, 4, and 5 (continued)
Benefit calculation: Generally, the benefit is 1.67% of final average salary for each year
of service if the member retires with less than 20 years. If a member retires with between
20 and 30 years of service, the benefit is 2% of final average salary for each year of
service. If a member retires with more than 30 years of service, an additional benefit of
1.5% of final average salary is applied for each year of service over 30 years. Tier 3, 4,
and 5 members with five or more years of service can retire as early as age 55 with
reduced benefits. Tiers 3 and 4 members ages 55 or older with 30 or more years of
service can retire with no reduction in benefits.
Final average salary is the average of the wages earned in the three highest consecutive
years. For Tier 3, 4, and 5 members, each year of final average salary is limited to no
more than 10% of the average of the previous two years.
Tier 6
Eligibility: Tier 6 members, with the exception of those retiring under special retirement
plans, must have five years of service and be at least age 55 to be eligible to collect a
retirement benefit. The legislation mentioned previously changed the vesting
requirements for Tier 6 members from ten to five years. The full benefit age for Tier 6 is
63 for ERS members.
Benefit calculation: Generally, the benefit is 1.67% of final average salary for each year
of service if the member retires with less than 20 years. If a member retires with 20 years
of service, the benefit is 1.75% of final average salary for each year of service. If a
member retires with more than 20 years of service, an additional benefit of 2% of final
average salary is applied for each year of service over 20 years. Tier 6 members with ten
or more years of service can retire as early as age 55 with reduced benefits.
Final average salary is the average of the wages earned in the five highest consecutive
years. For Tier 6 members, each year of final average salary is limited to no more than
10% of the average of the previous four years.
Disability Retirement Benefits
Disability retirement benefits are available to ERS members unable to perform their job
duties because of permanent physical or mental incapacity. There are three general types
of disability benefits: ordinary, performance of duty, and accidental disability benefits.
Eligibility, benefit amounts, and other rules such as any offsets of other benefits depend
on a member's tier, years of service, and plan.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
6. Pension Plan (continued)
Benefits provided (continued):
Ordinary Death Benefits
Death benefits are payable upon the death, before retirement, of a member who meets
eligibility requirements as set forth by law. The first $50,000 of an ordinary death benefit
is paid in the form of group-term life insurance. The benefit is generally three times the
member's annual salary. For most members, there is also a reduced post-retirement
ordinary death benefit available.
Post-Retirement Benefit Increases
A cost-of-living adjustment is provided annually to: (i) all retirees who have attained age
62 and have been retired for five years, (ii) all retirees who have attained age 55 and have
been retired for ten years, (iii) all disability retirees, regardless of age, who have been
retired for five years, (iv) ERS recipients of an accidental death benefit, regardless of age,
who have been receiving such benefit for five years, and (v) the spouse of a deceased
retiree receiving a lifetime benefit under an option elected by the retiree at retirement. An
eligible spouse is entitled to one-half the cost-of-living adjustment amount that would
have been paid to the retiree when the retiree would have met the eligibility criteria. This
cost-of-living adjustment is a percentage of the annual retirement benefit of the eligible
member as computed on a base benefit amount not to exceed $18,000 of the annual
retirement benefit. The cost-of-living percentage shall be 50% of the annual Consumer
Price Index as published by the U.S. Bureau of Labor but cannot be less than 1% or
exceed 3%.
Contributions: Tier 1 and 2 members do not have to contribute any of their salary to the
System. Generally, however, Tier 3, 4, and 5 members contribute 3 percent of their salary
to the System. As a result of Article 19 of the RSSL, eligible Tier 3 and 4 employees,
with a membership date on or after July 27, 1976, who have ten or more years of
membership or credited service with the System, are not required to contribute. Members
cannot be required to begin making contributions or to make increased contributions
beyond what was required when membership began. For Tier 6 members, the
contribution rate varies from 3% to 6% depending on salary. Generally, Tier 5 and 6
members are required to contribute for all years of service. Under the authority of the
NYSRSSL, the Comptroller annually certifies the actuarially determined rates expressly
used in computing the employers' contributions based on salaries paid during the
Systems' fiscal year ending March 31. Contributions for the current year and two
preceding years were equal to 100% of the contributions required, and were as follows:
-38-
CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
6. Pension Plan (continued)
Contributions (continued):
Year Ended December 31, Amount
2023 $ 8,051
2022 5,797
2021 3,863
Chapter 57 of the Laws of 2013 of the State of New York, Part BB, amending several
sections of the Retirement and Social Security Law, was enacted to allow local employers
to amortize a portion of their retirement bill for up to 12 years in accordance with the
following stipulations:
The maximum amount an employer can amortize is the difference between the
normal annual contribution (total bill, excluding payments for deficiency, group life,
previous amortizations, incentive costs, and prior year adjustments) and the graded
contribution.
For subsequent State Fiscal Years (SFYs), the graded rate will increase or decrease by
up to one-half of 1% depending on the gap between the increase or decrease in the
System's average rate and the previous graded rate.
• The interest rate will be set annually and will be comparable to a 12-year U.S.
Treasury Bond plus 1%.
• For subsequent SFYs in which the System's average rates are lower than the graded
rates, the employer will be required to pay the graded rate. Any additional
contributions made will first be used to pay off existing amortizations and then any
excess will be deposited into a reserve account and will be used to offset future
increases in contribution rates.
This law requires participating employers to make payments on a current basis, while
amortizing existing unpaid amounts relating to the System's fiscal years when the local
employer opts to participate in the program.
The District's total pension liability was paid as of December 31, 2023.
Pension liabilities, pension expense and deferred outflows of resources and deferred
inflows of resources related to pensions: At December 31, 2023, the District reported a
liability of$38,581 for its proportionate share of the net pension liability. The net pension
liability was measured as of March 31, 2023, and the total pension liability used to
calculate the net pension liability was determined by an actuarial valuation as of that date.
The District's proportion of the net pension liability was based on a projection of the
District's long-term share of contributions to the pension plan relative to the projected
contributions of all participating members, actuarially determined.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
6. Pension Plan (continued)
Pension liabilities, pension expense and deferred outflows of resources and deferred
inflows of resources related to pensions (continued):
At March 31, 2023, the District's proportion was 0.0001799%, which was an increase of
0.0001189 from its proportion measured at March 31, 2022.
For the year ended December 31, 2023, the District recognized pension expenditures of
$8,051. At December 31, 2023, the District reported deferred outflows of resources and
deferred inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual
experience $ 4,109 $ 1,083
Changes of assumptions 18,737 207
Net difference between projected and actual
earnings on pension plan investments - 227
Changes in proportion and differences between
District contributions and proportionate share of
contributions 6,391 9,908
District contributions subsequent to the
measurement 8,051 -
Total $ 37,288 $ 11,425
The $8,051 reported as deferred outflows of resources related to pensions resulting from
District contributions subsequent to the measurement date will be recognized as a
reduction of the net pension liability in the year ended March 31, 2024. Other amounts
reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be recognized in pension expense as follows:
Year Ended March 31, Amount
2024 $ 3,073
2025 (3,123)
2026 6,547
2027 11,315
Actuarial assumptions: The total pension liability at March 31, 2023, was determined
using a roll-forward procedure to advance the liability calculated using system
assumptions and member demographics from the actuarial valuation completed as of
April 1, 2022. Economic assumptions used in the April 1, 2022, actuarial valuation
include:
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
6. Pension Plan (continued)
Actuarial assumptions (continued):
Inflation 2.9%
Salary increases 4.4%
Investment rate of return (net of
investment expense, including
inflation) 5.9%
Cost-of-living adjustments 1.5%
The long-term expected rate of return on pension plan investments was determined using
a building-block method in which best-estimate ranges of expected future real rates of
return (expected return, net of investment expenses and inflation) are developed for each
major asset class. These ranges are combined to produce the long-term expected rate of
return by weighting the expected future real rates of return by the target asset allocation
percentage and by adding expected inflation.
Demographic assumptions used in the April 1, 2022, actuarial valuation are based on the
results of an actuarial experience study completed April 1, 2020. Demographic
assumptions are primarily based on System experience over the period April 1, 2015 -
March 31, 2020. Annuitant mortality rates are adjusted to incorporate mortality
improvements under the Society of Actuaries' Scale MP-2021.
Best estimates of arithmetic real rates of return for each major asset class included in the
target asset allocation as of March 31, 2023, are summarized below:
Long-Term Expected Real
Asset Class Target Allocation Rate of Return
Domestic equity 32.00% 4.30%
International equity 15.00% 6.85%
Private equity 10.00% 7.50%
Real estate 9.00% 4.60%
Opportuni sti c/Ab solute
return strategy 3.00% 5.38%
Credit 4.00% 5.43%
Real assets 3.00% 5.84%
Fixed income 23.00% 1.50%
Cash 1.00% 0.00%
Total 100.00%
The real rate of return is net of the long-term inflation assumption of 2.50%.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
6. Pension Plan (continued)
Discount rate: The discount rate used to calculate the total pension liability was 5.9%.
The projection of cash flows used to determine the discount rate assumes that
contributions from plan members will be made at the current contribution rates and that
contributions from employers will be made at statutorily required rates, actuarially. Based
upon the assumptions, the System's fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-
term expected rate of return on pension plan investments was applied to all periods of
projected benefit payments to determine the total pension liability.
Sensitivity of the proportionate share of the net pension liability to the discount
rate: The following presents the current period net pension liability of the District's
proportionate share of the net pension liability calculated using the current period
discount rate assumption of 5.9%, as well as what the District's collective net pension
liability would be if it were calculated using a discount rate that is 1 percentage point
lower(4.9%) or 1 percentage point higher(6.9%)than the current rate:
1% Current 1%
Decrease Assumption Increase
(4.9%) (5.9%) (6.9%)
District's proportionate share of the net
pension liability (asset) $ 93,233 $ 38,581 $ (7,088)
Pension plan fiduciary net position: The components of the collective net pension
liability of the participating employers as of March 31, 2023, were as follows:
(Dollars in Thousands)
Employees' Retirement
System
Employers' total pension liability $ 232,627,259
Plan net position (211,183,223)
Employers' net pension liability (asset) $ 21,444,036
Ratio of plan net position to the employers' total
pension liability 90.78%
7. Length of Service Award Program (LOSAP)
The District's AFR is for the year ended December 31, 2023. The information contained
in this note is based on information for the District's Service Award Program for the
program year ending on December 31, 2022, which is the most recent Program year for
which complete information is available.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
7. Length of Service Award Program (LOSAP) (continued)
The District established a defined benefit award program (referred to as a LOSAP,
Length of Service Award Program, under section 457(e)(11) of the Internal Revenue
Code), effective March 1, 1993, for the active volunteer firefighter members of the
district. The Program was established pursuant to Article 11-A of the General Municipal
Law. The Program provides municipally funded, pension-like benefits to facilitate the
recruitment and retention of active volunteer firefighters. The District is the Sponsor of
the Program.
Program description:
Participation, vesting, and service credit: Active volunteer firefighters who have
reached the age of 17 and who have completed their probationary period are eligible to
participate in the Program. Participants acquire a non-forfeitable right to a service award
after being credited with five years of firefighting service or upon attaining the Program's
entitlement age. The Program's entitlement age is age 65. In general, an active volunteer
firefighter is credited with a year of firefighting service for each calendar year after the
establishment of the Program in which he or she accumulates 50 points.
Points are granted for the performance of certain activities in accordance with a system
established by the sponsor based on a statutory list of activities and point values. A
participant may also receive credit for five years of firefighting service rendered prior to
the establishment of the Program.
Benefits: A participant's benefit under the Program is the actuarial equivalent of a
monthly payment for life equal to $20 multiplied by the person's total number of years of
firefighting service. The number of years of firefighting service used to compute the
benefit cannot exceed 30. Benefits are not payable until the first day of the month
coincident with or following the attainment of age 65 and completion of one year of plan
participation. Except in the case of disability or death, benefits are payable when a
participant reaches entitlement age. The Program provides statutorily mandated death and
disability benefits.
Fiduciary investment and control: Service credit is determined by the Governing Board
of the sponsor, based on information certified to the Governing Board by each fire
company having members who participate in the Program. Each fire company must
maintain all required records on forms prescribed by the Governing Board.
The Governing Board of the sponsor has retained and designated Firefly Admin, Inc. to
assist in the administration of the Program. The services provided by Firefly Admin, Inc.
are described as follows:
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
7. Length of Service Award Program (LOSAP) (continued)
Fiduciary investment and control (continued):
a) Providing participant enrollment forms.
b) Provide annual reminder letter with a review list for the current anniversary date.
c) Preparation of Explanation of Plan Benefits.
d) Calculation of Schedule of Benefits and costs annually.
e) Participants' benefit calculation at time of severance or retirement.
f) Auxiliary Fund valuation and suggested deposit.
g) Summary of required annual contribution.
h) Annual actuarial review and recommended benefit enhancements.
Disbursements of Program assets for the payment of benefits or administrative expenses
must be approved. The following is an explanation of the process for approving
disbursements:
Payment of benefits:
1. Entitlement benefits — Firefly Admin, Inc. prepares and submits to the plan
sponsor a Verification of Benefits Statement and an Annuity Enrollment form for
participants active at entitlement age and for vested participants upon termination
from the plan. Following review for accuracy, the plan sponsor signs and returns
the paperwork to Firefly Admin, Inc. authorizing Firefly Admin, Inc. to disburse
entitlement benefits.
2. Death benefits - Upon notification from the plan sponsor of a participant's death,
Firefly Admin, Inc. prepares a Verification of Benefits statement and a Lump-
Sum Death Benefit form. Following review for accuracy, the plan sponsor signs
and returns the paperwork accompanied by a death certificate to Firefly Admin,
Inc. authorizing Firefly Admin, Inc. to disburse a death benefit.
3. Disability benefits - Upon notification from the plan sponsor of a participant's
total and permanent disability, Firefly Admin, Inc. prepares a Verification of
Benefits statement, a Physician Statement form and a Lump-Sum Disability
Benefit form. Following review for accuracy, the plan sponsor signs and returns
the paperwork authorizing Firefly Admin, Inc. to disburse a disability benefit.
Authority to invest Program assets is vested in East End Financial Group. Subject to
restrictions in the Program document, Program assets are invested in accordance with a
statutory "prudent person" rule. The sponsor invested plan funds in a general investment
account.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
7. Length of Service Award Program (LOSAP) (continued)
Fiduciary investment and control (continued):
The Board of Fire Commissioners is required to retain an actuary to determine the
amount of the District's contributions to the plan. The actuary retained by the sponsor for
this purpose is Craig T. Relyea of Firefly Admin, Inc. Mr. Relyea is an associate of the
American Society of Actuaries. Portions of the following information are derived from a
report prepared by the actuary dated March 10, 2023.
Program financial condition:
Assets and liabilities
Actuarial present value of accrued benefits $3,484,996
Total as of December 31, 2022 $ 3,484,996
Less: assets available for benefits:
Cash and cash equivalents $ 134,383
Fixed income 288,343
Mutual funds 2,397,393
Equity funds 385,492
Exchange-traded funds 281,218
3,486,829
January payments withdrawn in December 16,100
Total net assets available for benefits 3,502,929 (A)
Total unfunded benefits (surplus) 17 933)
Receipts and disbursements
Plan net assets, beginning of year, l/l/22 $3,269,922
Changes during the year(increases/(decreases)):
Plan contributions $394,504
Net investment earnings 94,703
Plan benefit withdrawals (246,219)
Administrative and other fees/charges (9,981)
233,007
Plan net assets, end of year, 12/31/23 3 502 929
Funded ratio:
Plan assets $ 3,502,929
Present value of accrued benefits $ 3,484,996
Funded ratio 100.5%
The funded ratio is 100.5%. The Plan's funded status has remained consistent with prior
year.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
7. Length of Service Award Program (LOSAP) (continued)
Contributions:
Amount of Sponsor's contribution recommended by actuary $ 302,972
Amount of Sponsor's actual contribution $ 394,504
Administrative Fees:
Fees paid for investment management $ 8,071
Fees paid for administrative services $ 9,981
Per the executed Service Fee Agreement, the Plan Sponsor agrees to payment as
contracted.
(A)This amount represents the net assets available for payment of benefits as of December
31, 2022 as determined by the actuarial report dated March 2023. The value being
reported on the face of the AFR represents the asset value of the Plan as of December 31,
2023.
Funding methodology and actuarial assumptions:
Normal costs: The actuarial valuation methodology used by the actuary to determine the
Sponsor's contribution is the Unit Credit Method. This Method is designed to fund the
Program by requiring an annual contribution equal to the present value of the service
earned in the previous year. The assumptions used by the actuary to determine the
Sponsor's contribution and the actuarial present value of benefits are:
Assumed rate of return on investment 4.50%, net of investment expenses
Tables used for:
Post entitlement age mortality RP-2014 Mortality Table (gender specific)
with no projection for mortality
improvement
*Pre-entitlement age mortality None
*Pre-entitlement age withdrawal None. Participants are assumed to
commence collecting the monthly benefit at
the entitlement date
* For program cost calculation purposes, all pre-entitlement age active volunteer
firefighter participants are assumed to survive to the entitlement age, remain active
and earn 50 points each year and begin to be paid service awards upon attainment of
the entitlement age.
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CUTCHOGUE FIRE DISTRICT
NOTES TO ANNUAL FINANCIAL REPORT
8. Commitments and Contingencies
Encumbrances: In the current year, the District has two reported encumbrances in the
amount of $36,287. This amount is represented in the assigned unappropriated fund
balance of $36,287 reported in the AFR. This amount is mainly for the purchase of a
garage door for building and portable radios.
Assigned appropriated fund balance: The District, from time-to-time, will appropriate
a portion of its unassigned unappropriated fund balance. During 2023, no such
appropriation was made.
Risk management: The District is exposed to various risks of loss related to torts, theft
of, damage to and destruction of assets, injuries to employees, errors and omissions,
natural disasters, etc. These risks are covered by commercial insurance purchased from
independent third-parties. Settled claims from these risks have not exceeded commercial
insurance coverage.
Legal: The District is party to various litigation matters arising in the ordinary course of
business. In the opinion of management, the outcome of these litigation matters will not
have a material adverse effect on the District's financial position.
9. Economic Dependency
For the year ended December 31, 2023, approximately 77% of the District's gross
revenues were derived from real property taxes and PILOT provided by the Town of
Southold.
10. Rental of Real Property
On December 13, 2016, the District entered into a lease agreement to lease ground space
on its property to a company for the positioning of a communication tower, which has not
yet been positioned on the property. The communication tower will not be District-
owned. This is a 30-year lease commencing on the date of commercial operation of the
leased space. Upon notice of lessee, the lease will be renewed for three additional terms
of five years each and one additional term of four years. The terms of the lease allow for
the lessee to sublease the property and requires the lessee to pay the District 30% of all
rents received from the first sublessee, 35% for the second sublessee and 40% from all
subsequent sublessees. There was no rental income related to this lease during the year
ended December 31, 2023, and future rental income is not readily determinable.
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bSHEEHAN
ACCOUNTANTSID I
165 Orinoco Drive
Brightwaters,NY 11718
T:631.665.7040 1 F:631.665.7014
15 South Bayles Avenue
Port Washington,NY 11050
T:516.883.5510 1 F:516.767.7438
www.sheehancpa.com
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED
ON AN AUDIT OF ANNUAL FINANCIAL REPORT PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Board of Fire Commissioners
Cutchogue Fire District
Cutchogue, New York
We have audited, in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States, the Annual Financial Report
of Cutchogue Fire District (the District), as of and for the year ended December 31, 2023, and
the related notes to the Annual Financial Report (Financial Section), which collectively comprise
the District's basic financial statements and have issued our report thereon dated April 15, 2024.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the Annual Financial Report (Financial Section), we
considered the District's internal control over financial reporting (internal control) as a basis for
designing audit procedures that are appropriate in the circumstances for the purpose of
expressing our opinion on the Annual Financial Report (Financial Section) but not for the
purpose of expressing an opinion on the effectiveness of the District's internal control.
Accordingly, we do not express an opinion on the effectiveness of the District's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the District's Annual Financial Report (Financial
Section)will not be prevented or detected and correct on a timely basis.
-48-
An Independent Member of the BDO Alliance USA
To the Board of Fire Commissioners
Cutchogue Fire District
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that
is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses or significant deficiencies may exist that have not been identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District's Annual Financial Report
(Financial Section) is free from material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements, non-compliance with
which could have a direct and material effect on the determination of Annual Financial Report
(Financial Section). However,providing an opinion on compliance with those provisions was not
an objective of our audit and, accordingly, we do not express such an opinion. The results of our
tests disclosed no instance of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the District's internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the District's
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
1 19� cam`�mol 7 C110-4 100C.
Brightwaters, New York
April 15, 2024
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