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CULLEN, & DANOWSKI, LLP
CERTIFIED PU.BiIGACCC)UNTANTS
RECEIVED
OCT - 7 2024
July 19,2024
Southold Town Clerk
To the Board of Fire Commissioners
East Marion Fire District
East Marion,New York
We have audited the financial statements of each fund and account group of the East Marion Fire District
(District) for the year ended December 31, 2023,and have issued our report thereon dated July 19, 2024.
Professional standards require that we provide .you with information about our responsibilities under
generally accepted auditing standards(and,if applicable,Government Auditing Standards),as well as certain
information related to the planned scope and timing in our audit.We have communicated such information
in our previous letter to you dated February 7, 2024. Professional standards also require that we
communicate to you the following information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the District are described in Note 1 to the financial statements. No accounting
policies were adopted and the application of existing policies was not changed during the year.We noted no
transactions entered into by the District during the year for which there is a lack of authoritative guidance
or consensus. All significant transactions have been recognized in the financial statements in the proper
period.
Accounting estimates are an integral part of the financial statements prepared by management and are based
on management's knowledge and experience about past and current events and assumptions about future
events. Certain accounting estimates are particularly sensitive because of their significance to the financial
statements and because of the possibility that future events affecting them may differ significantly from those
expected.
The most sensitive estimates affecting the financial statements were:
• Historical Cost Value of Certain Capital Assets - Management's estimate of the historical cost value of
Land and Buildings is based on replacement cost converted to estimated historical cost using a
conversion factor based on the year the item was placed in service.
• Compensated Absences Liability - Management's estimate of the liability for compensated absences is
based on historical information regarding employees who have separated from the District and their
terminal payout amounts, in order to determine the probability and amount of future payouts to
employees for vested accumulated sick,vacation and/or leave terminal payouts.
1650 ROUTE 112,PORT JEFFERSON STATION,NEW YORK 11776-3060
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PHONE:631-473-3400•FAX:631-473-4863•WWW.CDLLP.NET
East Marion Fire District
For the Year Ended December 31,2023
• Actuarial Assumptions and Methods Underlying Pension Reporting - Management's acceptance of
various actuarial assumptions and methods underlying the calculation of the District's pension reporting
is based on the actuarial valuation prepared by the actuary for the ERS.
• Actuarial Assumptions and Methods Underlying Length of Service Award Program (LOSAP) Reporting-
Management's acceptance of various actuarial assumptions and methods underlying the calculation of
the District's actuarial present value of benefits and liability is based on actuarial valuations prepared by
the District's actuary for the LOSAP Plan.
We evaluated the key factors and assumptions used to develop these estimates in determining that they are
reasonable in relation to the financial statements taken as a whole.
The financial statement disclosures are neutral,consistent,and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit,other than those that are trivial,and communicate them to the appropriate level of management.
The attached audit adjustments correcting misstatements (which were accepted and recorded by the
District) in our judgment, indicate matters that could have a significant effect on the District's financial
reporting process.
Disagreements with Management
For purposes of this letter,a disagreement with management is a financial accounting,reporting,or auditing
matter,whether or not resolved to our satisfaction,that could be significant to the financial statements or
the auditor's report.We are pleased to report that no such disagreements arose during the course of our
audit.
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated July 19,2024.
Management Consultations with Other Indepen dent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters,similar to obtaining a"second opinion"on certain situations.If a consultation involves application
of an accounting principle to the District's financial statements or a determination of the type of auditor's
opinion that may be expressed on those statements, our professional standards require the consulting
accountant to check with us to determine that the consultant has all the relevant facts.To our knowledge,
there were no such consultations with other accountants.
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East Marion Fire District
For the Year Ended December 31,2023
Other Audit Finding or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the District's auditors. However, these
discussions occurred in the normal course of our professional relationship and our responses were not a
condition to our retention.
Other Matters
We were engaged to report on the schedule of revenues,expenditures and changes in fund balance-budget
and actual - general fund - operating, which accompanies the financial statements but is not required
supplementary information (RSI). With respect to this supplementary information, we made certain
inquiries of management and evaluated the form, content, and methods of preparing the information to
determine that the information complies with the reporting provisions of the New York State Office of the
State Comptroller,the method of preparing it has not changed from the prior period,and the information is
appropriate and complete in relation to our audit of the financial statements.We compared and reconciled
the supplementary information to the underlying accounting records used to prepare the financial
statements or to the financial statements themselves.
Restriction on Use
This information is intended solely for the information and use of the Board of Fire Commissioners and
management of East Marion Fire District and is not intended to be and should not be used by anyone other
than these specified parties.
Very truly yours,
&X e&yJ I. �, L--P
Cullen&Danowski,LLP
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EAST MARION FIRE DISTRICT
AUC-260 ADJUSTING JOURNAL ENTRIES
12/31/2023
Account Description Debit Credit
AJE01
General Fund-To record checks dated
12/31/2023 as accounts payable since they
were not sent out until January 2024.
A0.1000.0200.000 Operating Acct:TD Bank 4,365.05 0.00
A0.2000.0600.000 Accounts Payable/Accruals 0.00 4,236.26
A0.2010.0601.001 Payroll Liabilities 5.64 0.00
A0.2010.0601.003 Payroll Liabilities:Federal/FICA Liability 70.54 0.00
A0.2010.0601.004 Payroll Liabilities:NYS Withholding Payable 0.00 204.97
Total 4,441.23 4,441.23
AJE02
General Fund-to accrue unrecorded payables
identified in subsequent disbursement testing.
A0.5170.3410.200 FP-Equipment A200 6,885.00 0.00
A0.5100.3410.402 FP-Building Costs/Building Repair 931.10 0.00
A0.5170.3410.200 FP-Equipment A200 9,179.48 0.00
A0.2000.0600.000 Accounts Payable/Accruals 0.00 16,995.58
H1.5170.3410.200 FP-Fire Equip Capital Outlay 9,768.00 0.00
1-11.2000.0600.000 Accounts Payable 0.00 9,768.00
Total 26,763.58 26,763.58
AJE03
LOSAP-To record prior period adjustment for
prior year ending LOSAP asset balance
A1.1200.461 Service Award Program Assets 1,264,029.99 0.00
A1.3020.895 Restricted:Service Award Program 0.00 1,264,029.99
Total 1,264,029.99 1,264,029.99
AJE04
LOSAP-To record the current year activity for
the LOSAP asset.
A1.1200.461 Service Award Program Assets 769.10 0.00
A1.5100.3410.4 Fire Contractual Expenditures 498.41 0.00
A1.5130.9025.8 Service Award Program Benefits 104,817.23 0.00
A1.4085.2770 Contributions 0.00 35,000.00
A1.4040.2401 Interest&Earnings 0.00 71,084.74
A0.5100.3410.410 FP-Admin/Professional Fees 6,731.66 0.00
A0.5130.9025.800 Employee Benefits/LOSAP 0.00 6,731.66
Total 112,816.40 112,816.40
AJE05
LOSAP-To record net change in restricted fund
balance related to LOSAP.
A1.3310.917 Unassigned FB 769.10 0.00
A1.3020.895 Restricted:Service Award Program 0.00 769.10
Total 769.10 769.10
AJE06
LTD/LOSAP-To record the change in LOSAP
liability.
W0.1090.0125.000 Provisions in Future Budgets 27,087.00 0.00
W0.2200.689 Service Award Program Liability 0.00 27,087.00
Total 27,087.00 27,087.00
AJE07
General Fund-to remote extra two postings of
January 2023 T-Mobile cell tower rent.
A0.4045.2410.002 Rental Income:Cell tower Rent 3,564.20 0.00
A0.1020.0380.000 Audit-Accounts Receivable 0.00 3,564.20
Total 3,564.20 3,564.20
AJE08
General Fund-to defer January 2024 T-Mobile
cell tower rent payment(check rec'd
12/21/2023)
A0.1000.0200.000 Operating Acct.-TD Bank 1,835.67 0.00
A0.2180.0630.000 Collections in Advance 0.00 1,835.67
Total 1,835.67 1,835.67
AJE09
General Fund-to record prepaid portion of
workers comp.policies and manager fee(period
from 7/1/2023 to 7/1/2024)
A0.5130.9040.800 Employee Benefits/Work.Comp VFBL 0.00 2,314.48
A0.5130.9040.800 Employee Benefits/Work.Comp VFBL 0.00 1,093.40
A0.1050.0480.000 Prepaid Expenses 3,407.88 0.00
Total 3,407.88 3,407.88
AJE10
General Fund-to remove housing rent held in
accounts receivable that was deposited in
January 2023.
A0.4045.2410.000 Rental Income:Housing rent 150.00 0.00
A0.1020.0380.000 Audit-Accounts Receivable 0.00 150.00
Total 150.00 150.00
AJE11
General Fund-to reclassify workers comp.
dividend checks netting against the related
expenditure code,and to accrue unrecorded
dividend check receivable.
A0.5130.9040.800 Employee Benefits/Work.Comp VFBL 4,648.21 0.00
A0.4075.2701.000 Refunds of Prior Year's expense 0.00 4,648.21
A0.1020.0380.000 Audit-Accounts Receivable 4,770.25 0.00
A0.4075.2701.000 Refunds of Prior Year's expense 0.00 4,770.25
Total 9,418.46 9,418.46
AIE12
General Fund-to correct the expenditure code
for MLLP#7R.
A0.5100.3410.404a FP-Fire Equip&Alarms/Equipment Repair 0.00 1,128.68
A0.5100.3410.425 FP-Admin/Miscellaneous 1,128.68 0.00
Total 1,128.68 1,128.68
AIE13
General Fund-to reclassify insurance claim
proceeds out of"Equipment Repair"and into
"Insurance Proceeds".
A0.5100.3410.404a FP-Fire Equip&Alarms/Equipment Repair 4,075.86 0.00
A0.5100.3410.404a FP-Fire Equip&Alarms/Equipment Repair 1,570.00 0.00
A0.4060.2680.000 Insurance proceeds 0.00 5,645.86
Total 5,645.86 5,645.86
AIE14
General Fund-to reclassify insurance claim
proceeds out of"Building Repair"and into
"Insurance Proceeds".
A0.5100.3410.402 FP-Building Costs/Building Repair 1,425.24 0.00
A0.4060.2680.000 Insurance proceeds 0.00 1,425.24
Total 1,425.24 1,425.24
AIE15
General Fund-to reclassify CK#12603 from
"Equipment Repair"to"Building Repair".
A0.5100.3410.402 FP-Building Costs/Building Repair 980.00 0.00
A0.5100.3410.404a FP-Fire Equip&Alarms/Equipment Repair 0.00 980.00
Total 980.00 980.00
AIE16
General Fund-to record prepaid portion of
2023-24 tax bill payment(CK#12798).
A0.1050.0480.000 Prepaid Expenses 2,305.67 0.00
A0.5100.3410.425 FP-Admin/Miscellaneous 0.00 2,305.67
Total 2,305.67 2,305.67
AIE17
LTD-to record net pension liability per GASB 68
ERS report&remove prior year's net pension
asset.
W0.1090.0125.000 Provisions in Future Budgets 17,445.00 0.00
W0.2192.0637.000 Net Pension Liability:Proportionate Share 0.00 17,445.00
K0.1192.0108.000 Net Pension Asset:Proportionate Share 0.00 3,099.00
K0.3020.0899.000 Restricted-Pension 3,099.00 0.00
Total 20,544.00 20,544.00
AJE18
LTD-to record ERS deficiency payable per 2024
ERS annual invoice.
W0.1090.0125.000 Provisions in Future Budgets 4,527.00 0.00
W0.2120.0637.000 Due to ERS<1 yr 0.00 501.00
W0.2122.0637.000 Due to ERS>1yr 0.00 4,026.00
Total 4,527.00 4,527.00
AJE19
Building Reserve-to close out equity at year
end.
H1.3310.0917.000 Unassigned Fund Balance Building Reserve 47,001.70 0.00
H1.3020.0878.000 Building&Grounds Reserve Fund 0.00 47,001.70
Total 47,001.70 47,001.70
AJE20
Equipment Reserve-to close out equity at year
end.
H0.3020.0878.000 Equipment&Apparatus Reserve 20,923.24 0.00
H0.3310.0917.000 Unassigned:Fund Balance 0.00 20,923.24
Total 20,923.24 20,923.24
AJE21
General Fund-to adjust equity at year end.
A0.3010.0806.000 Nonspendable Fund Balance 3,870.80 0.00
A0.3305.0915.001 Assigned:Unappropriated/Encumbrances 0.00 0.00
A0.3300.0914.000 Assigned:Appropriated Fund Balance 15,000.00 0.00
A0.3310.0917.000 Unassigned:Fund Balance 0.00 18,870.80
Total 18,870.80 18,870.80
AJE22
GASB 87-to record opening lease receivable&
deferred inflow for Crown Castle misc.rent.
A0.1068.0454.000 Leases Receivable 37,496.12 0.00
A0.2520.0691.000 Deferred Leases 0.00 37,496.12
Total 37,496.12 37,496.12
AJE23
GASB 87-to reverse use of money or property
recorded during the year and breakout between
lease revenue and interest earned
A0.4045.2410.002 Rental Income:Cell tower Rent 1,671.05 0.00
A0.4040.2401.002 Interest Inc 0.00 1,671.05
Total 1,671.05 1,671.05
AJE24
GASB 87-to record the current year change in
the deferred inflow and lease receivable.
A0.2520.0691.000 Deferred Leases 81,552.40 0.00
A0.1068.0454.000 Leases Receivable 0.00 81,552.40
Total 81,552.40 81,552.40
AJE25
FS purposes-To adjusted restricted cash for FS
purposes only.
A0.1000.0200.000 Operating Acct.-TD Bank 54,646.00 0.00
A0.1010.0200.000 Cash Restricted Reserves 0.00 54,646.00
Total 54,646.00 54,646.00
AJE26
Fixed Assets-to record the current year
additions&deletions.
K0.1070.0104.000 Equipment 160,000.00 0.00
K0.1070.0104.000 Equipment 0.00 54,253.00
K0.3000.0158.000 Investment in Capital Assets 0.00 105,747.00
Total 160,000.00 160,000.00
AJE27
To adjust encumbrances at 12/31/2023
A0.3305.0915.001 Assigned:Unappropriated/Encumbrances 142,189.95 0.00
A0.3310.0917.000 Unassigned:Fund Balance 0.00 142,189.95
Total 142,189.95 142,189.95
IE
CI 'D
0 CT - 7 2024
SOUthold Town Clerk
East Marion Fire District
Financial Statements (Regulatory Basis)
with Independent Auditor's Report
December 31, 2023
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EAST MARION FIRE DISTRICT
_ Table of Contents
December 31,2023
Page
Independent Auditor's Report 1
_- Basic Financial Statements(Regulatory Basis)
Balance Sheet-General Fund and Account Groups 4
-- Statement of Revenues,Expenditures,and Changes in
Fund Balance-General Fund 5
-i Notes to Financial Statements 6
I
Supplementary Information
Schedule of Revenues,Expenditures,and Changes in Fund Balance
-Budget and Actual-General Fund-Operating 24
- Independent Auditor's Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 25
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AVOWS SKI, LLP CULLEN ;'& D
CERTIFIED PU.B.LIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Board of Fire Commissioners
East Marion Fire District
East Marion,New York
' I
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements (regulatory basis) of the East Marion Fire District
(District), as of and for the year ended December 31, 2023, and the related notes to the financial statements,
which collectively comprise the District's basic financial statements as listed in the table of contents.
Unmodified 0 Opinion on Regulatory Basis o Accountin
P 9 r1' of Accounting
In our opinion,the financial statements referred to above present fairly,in all material respects,the respective
financial position of each fund and account group of the East Marion Fire District, as of December 31,2023,and
the respective changes in financial position for the year then ended,in accordance with the financial reporting
provisions of the New York State Office of the State Comptroller,as described in Note 1.
Adverse Opinion on U.S. Generally Accepted Accounting Principles
In our opinion, because of the significance of the matter discussed in the "Basis for Adverse Opinion on U.S.
Generally Accepted Accounting Principles section of our report,the financial statements referred to above do
not present fairly,in accordance with accounting principles generally accepted in the United States of America,
the financial position of the East Marion Fire District,as of December 31, 2023, and the respective changes in
-. financial position for the year then ended.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America.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 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 audit opinions.
1650 ROUTE 112,PORT JEFFERSON STATION,NEW YORK 11776-3060 - I
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PHONE:631-473,3400•FAX:631-473-4863•WWW.CDLLP.NET
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Basis for Adverse Opinion on U.S.Generally Accepted Accounting Principles
As described in Note 1,"Summary of Significant Accounting Policies,"the financial statements are prepared by
i the East Marion Fire District,on the basis of the financial reporting provisions of 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.The
effects on the financial statements 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 and pervasive.
Responsibilities of Management for the Financial Statements
- Management is responsible for the preparation and fair presentation of these financial statements in
accordance with the financial reporting provisions of the New York State Office of the State Comptroller, as
described in Note 1,to meet the reporting requirements of New York State. Management is also responsible
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.
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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 District's ability to continue as a
going concern for twelve months beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
Auditor's Responsibilities for the Audit of the Financial Statements
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 generally accepted 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 financial statements. In performing an audit in accordance with generally
accepted auditing standards,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 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 financial
statements.
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• 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.
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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.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
i comprise the East Marion Fire District's basic financial statements. The accompanying schedule of revenues,
expenditures,and changes in fund balance-budget and actual-general fund-operating on page 24 is presented
for purposes of additional analysis and is not a required part of the basic financial statements. Such information
is the responsibility of management and was derived from and relates directly to the underlying accounting and
other records used to prepare the basic financial statements.The information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to
prepare the basic financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America. In our
opinion,the schedule of revenues,expenditures,and changes in fund balance-budget and actual-general fund
-operating is fairly stated,in all material respects,in relation to the basic financial statements as a whole on the
basis of accounting described in Note 1.
Other Reporting Required by Government Auditing Standards
- In accordance with Government Auditing Standards,we have also issued our report dated July 19, 2024,on our
consideration of the East Marion Fire District's internal control over financial reporting and our tests of its
compliance with certain provisions of laws,regulations,contracts,and 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 East
Marion Fire 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 East Marion Fire
District's internal control over financial reporting and compliance.
a ;
July 19,2024 ,
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EAST MARION FIRE DISTRICT
Balance Sheet-General Fund and Account Groups
December 31,2023
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Account Groups
Non-Current Non-Current
General Governmental Governmental
Fund Assets Liabilities Total
- ASSETS
Cash and Cash Equivalents
Unrestricted $ 599,164 $ $ $ 599,164
Restricted 1,148,371 1,148,371
Accounts receivable 4,770 4,770
Lease receivable 251,871 251,871
Prepaids 33,532 33,532
Length of service award program 1,264,799 1,264,799
Land 2,493 2,493
Buildings and improvements 533,313 533,313
Equipment 1,604,702 1,604,702
Amount to be provided for
retirement of long-term debt 1,384,398 1,384,398
Total Assets $ 3,302,507 $ 2,140,508 $ 1,384,398 $ 6,827,413
LIABILITIES
Accounts payable $ 37,790 $ $ $ 37,790
Accrued liabilities 193 193
Guaranty and bid deposits 3,422 3,422
Collections in advance 25,727 25,727
P Due to employees'retirement system 4,527 4,527
Net pension liability-proportionate share 17,445 17,445
Length of service award program 1,362,426 1,362,426
Total Liabilities 67,132 1,384,398 1,451,530
DEFERRED INFLOWS OF RESOURCES
Deferred lease 251,871 251,871
FUND BALANCE
Investment in non-current governmental assets 2,140,508 2,140,508
Nonspendable:Prepaids 33,532 33,532
Restricted:
Capital,building 507,844 507,844
Capital,equipment 640,527 640,527
Length of service award program 1,264,799 1,264,799
Assigned:
Appropriated fund balance 32,000 32,000
Unappropriated fund balance 10,000 10,000
Unassigned 494,802 494,802
- Total Fund Balance 2,983,504 2,140,508 - 5,124,012
Total Liabilities,Deferred Inflows
_ of Resources,and Fund Balance $ 3,302,507 $ 2,140,508 $ 1,384,398 $ 6,827,413
4
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-- See Notes to Financial Statements -4-
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EAST MARION FIRE DISTRICT
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Statement of Revenues,Expenditures,and Changes in Fund Balance-General Fund
For the Year Ended December 31,2023
j General Fund
Length of
Capital Service Award
Operating Reserve Program Total
REVENUES
Real property taxes $ 554,655 $ $ $ 554,655
Payments in lieu of taxes 3,595 3,595
Interest and investment gains 20,392 26,959 71,085 118,436
Sale of equipment 1,500 1,500
- Insurance proceeds 7,071 7,071
_ Cell tower rental 111,581 111,581
Miscellaneous 11,579 11,579
Contributions 35,000 35,000
--, Total Revenues 710,373 26,959 106,085 843,417
t EXPENDITURES
Personal services 54,573 54,573
Equipment and capital outlay 35,474 170,880 206,354
+ Fire protection 343,237 499 343,736
State retirement system 7,062 7,062
Length of service award program 35,000 104,817 139,817
Social security 4,106 4,106
Workers'compensation 18,537 18,537
Unemployment Insurance 1,051 1,051
Total Expenditures 499,040 170,880 105,316 775,236
Excess(Deficiency)of Revenues Over Expenditures 211,333 (143,921) 769 68,181
P '
OTHER SOURCES AND USES
Operating transfers in 170,000 170,000
Operating transfers out (170,000) (170,000)
Total Other Sources and Uses (170,000) 170,000 - -
Net Change in Fund Balance 41,333 26,079 769 68,181
Fund Balance-
- Beginning of Year 529,001 1,122,292 1,264,030 2,915,323
Fund Balance-End of Year $ 570,334 $ 1,148,371 $ 1,264,799 $ 2,983,504
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See Notes to Financial Statements -5-
EAST MARION FIRE DISTRICT
j Notes to Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the East Marion Fire District (District) as of and for the year ended December
31,2023,have been prepared in accordance with the financial reporting provisions of the New York State
L Office of the State Comptroller(Regulatory Basis),which is a comprehensive basis of accounting other than
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 GAAP
for governmental units. The financial statements of the District have been prepared using only the current
financial resources measurement focus and the modified accrual basis of accounting. This method differs
from GAAP,which requires the preparation of additional financial statements using the economic resources
measurement focus and the accrual basis of accounting. GAAP basis financial statements require the
capitalization and depreciation of property and equipment and the recording of long-term liabilities. Under
the regulatory basis of accounting, property and equipment are recorded as an expenditure when
purchased, the proceeds of long-term debt are reported as other financing sources and the payments of
long-term debt and other long-term liabilities are recognized as expenditures to the extent that the liabilities
mature during the year. In addition, GAAP requires the financial statements to be prepared in accordance
with GASB Statement No. 34, Basic Financial Statements- and Management's Discussion and Analysis-for
? ! State and Local Governments. GASB Statement No. 34 financial statements require the presentation of
government-wide financial statements, and management's discussion and analysis. The accounting
practices used to prepare these financial statements do not require compliance with GASB Statement No.
34.
The significant accounting policies of the District are described below:
1
-' A. Financial Reporting Entity
The District is a district corporation and political subdivision of the State of New York,distinct from the
municipalities in which it is located. In general, the District is governed by an elected board of fire
commissioners (Board) and is required to have a treasurer and a secretary. The District has the legal
authority to levy taxes on real property and to borrow in its own name. The District is governed by
General Municipal Law(GML)and other laws of the state of New York and its subdivisions.The scope of
activities included in the accompanying financial statements is the transactions that comprise the
District's operations.
- The primary function of the District is to provide fire protection,rescue,and emergency services to the
community. Services such as firefighting, fire prevention, and public education support the primary
�f function.
i !
The financial reporting entity includes all funds, functions, and organizations over which the District's
Board exercises oversight responsibility.Oversight responsibility is determined on the basis of financial
interdependency, selection of governing authority, designation of management, ability to significantly
influence operations,and accountability for fiscal matters.
a B. Basis of Presentation
Fund Financial Statements
l �
! The District uses funds to report on its financial position and the results of its operations. Fund
accounting is designed to demonstrate legal compliance and to assist management by segregating
- transactions related to certain government functions or activities. A fund is a separate accounting entity
with a self-balancing set of accounts.
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
The District records its transactions in the fund types described below:
Governmental Funds
Governmental funds are those through which most governmental functions are financed. The
-, acquisition,use,and balances of expendable financial resources and the related liabilities are accounted
for through governmental funds. The measurement focus of the governmental funds is based upon the
determination of financial position and changes in financial position. The District utilizes the following
fund type:
General Fund - the general fund is the principal operating fund of the District. It is used to
account for all financial resources except those required to be accounted for in another fund.
k Account Groups
-- Account groups are used to establish accounting control and accountability for the District's capital
assets and general long-term obligations. The two account groups are not"funds". They are accounting
- entities,not fiscal entities,and are concerned only with the measurement of financial position,and not
with the results of operations. The District utilizes the following account groups:
Non-Current Governmental Assets Account Group - the non-current governmental assets
account group is used to account for land,buildings,improvements,and equipment owned by the
District.
Non-Current Governmental Liabilities Account Group - the non-current governmental
- liabilities account group is used to account for all long-term debt and other liabilities of the
District,as well as the District's proportionate share of the New York State and Local Employees'
Retirement System's (ERS)net pension liability.
j C. Measurement Focus and Basis of Accounting
Measurement focus describes what type of information is reported,and is either the economic resources
measurement focus or the current financial resources measurement focus. The economic resources
measurement focus reports all assets, liabilities, and deferred resources related to a given activity, as
�- well as transactions of the period that affect net position.For example,all assets,whether financial(e.g.,
cash and receivables)or capital (e.g.,property and equipment),and liabilities (including long-term debt
and obligations) are reported. The current financial resources measurement focus reports more
narrowly on assets,liabilities,and deferred resources that are relevant to near-term liquidity,along with
net changes resulting from transactions of the period. Consequently, capital assets and the unmatured
portion of long-term debt and certain other liabilities,the District would not expect to liquidate currently
with expendable available financial resources (e.g.,compensated absences for employees still in active
service)would not be reported.
Basis of accounting describes when changes are recognized,and is either the accrual basis of accounting
or the modified accrual basis of accounting.The accrual basis of accounting recognizes changes in net
i position when the underlying event occurs,regardless of the timing of related cash flows.The modified
accrual basis of accounting recognizes changes only at the point they affect near-term liquidity.
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
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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 governmental funds 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 pension costs,which are recognized as
expenditures to the extent they have matured.Capital asset acquisitions are reported as expenditures in
j governmental funds. Proceeds of general long-term debt and acquisitions under installment purchase
agreements and leases are reported as other financing sources.
D. Real Property Taxes
Real property taxes are levied annually by the District no later than November 1st and become a lien on
st
December 1 . The District's tax levy is collected by the Town of Southold and then remitted to the District
generally from January to June. The County of Suffolk is responsible for all uncollected taxes.
_ E. Payments in Lieu of Taxes(PILOT)
The District reports PILOT revenues in the general fund as part of other tax items revenues.These PILOT
revenues are often the result of tax abatements granted by industrial development agencies of the Town
and/or the County to help promote local economic development.Property owners make PILOT payments
to the government agencies,which in turn remit the collected payments to the District.
1— The District's PILOT revenues also include payments from the Long Island Power Authority (LIPA)
remitted to the Town of Southold.The LIPA Reform Act(Public Authorities Law§1020-q)gave LIPA tax
exempt status, as a public authority, in respect to any property if acquired from LILCO (Long Island
Lighting Company).Due to the potential fiscal impact of loss of local property tax revenues in response
to the exemption, the LIPA Reform Act provides for LIPA's payment of PILOT to the municipalities
—' affected by any acquisition of LILCO property.The District received$3,595 in PILOT revenue during the
2023 fiscal year.
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F. Use of Estimates
The preparation of financial statements in conformity with a comprehensive basis of accounting other
than GAAP requires management to make estimates and assumptions that affect the reported amount of
assets, liabilities, and deferred inflows of resources, and disclosure of contingencies at the date of the
financial statements, and the reported revenues and expenditures during the reporting period.
Accordingly,actual results could differ from those estimates.Estimates and assumptions are made in a
variety of areas,including pension costs.
G. Cash and Cash Equivalents
Cash and cash equivalents consists of cash on hand,demand deposits,and short-term investments with
original maturities of three months or less from date of acquisition.
Certain cash balances are restricted by various legal and contractual obligations, such as legal reserves
and debt agreements.
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H. Receivables
j Receivables are shown net of an allowance for uncollectibles, if any. However, no allowance for
uncollectibles has been provided since it is believed that such allowance would not be material.
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EAST MARION FIRE DISTRICT
I Notes to Financial Statements
(Continued)
I. Lease Receivable
The District leases property it owns for cellular antenna equipment to multiple third parties. A lease
? receivable is measured and recorded at the present value of lease payments expected to be received by
the District during the lease term using an implicit discount rate, net of any provision for estimated
uncollectible amounts. As lease payments are received from the lessee, they are first allocated to the
I amortization of the discount on the lease receivable and recognized as interest revenue,and then to lease
receivable.
J. Prepaid Items
Prepaid items represent payments made by the District for which benefits extend beyond year end.
These payments to vendors reflect costs applicable to future accounting periods and are recorded as
assets on the Balance Sheet using the consumption method. Under the consumption method,a current
asset for the prepaid item is recorded at the time of receipt and/or purchase and an expenditure is
-, reported in the year the goods or services are consumed.
A portion of fund balance has been classified as nonspendable to indicate that prepaids do not constitute
available spendable resources.
K. Restricted Length of Service Award Program Investments
-, The District sponsors the East Marion Fire District's Length of Service Award Program(LOSAP),a defined
benefit pension plan,and has reported program assets.The underlying assets are reported at fair market
L value based on quoted market prices and include cash,life insurance,and fixed income annuities.
The LOSAP's assets are restricted for the purposes of providing benefits to the participants of the plan.
L. Net Pension Asset/(Liability)Proportionate Share
fl
The District participates in the New York State and Local Employees'Retirement System (ERS),which is
a cost-sharing multiple-employer, defined benefit, public employee pension plan. The ERS provides
retirement,disability,withdrawal,and death benefits to plan members and beneficiaries related to years
of service and final average salary.The District reports its proportionate share of the ERS'net pension
asset or liability in either the non-current governmental assets group or the non-current governmental
liabilities group.Net pension assets or liabilities of the ERS are determined based on an annual actuarial
1 valuation at the measurement date.
M. Capital Assets
Capital assets are reported in the non-current governmental assets account group at original 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.The capital threshold,the dollar
j value above which asset acquisitions are added to the capital assets accounts,is$2,000 for all assets.
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
N. Collections in Advance
,- Collections in advance arise when resources are received by the District before it has a legal claim to
I. them, as when grant monies are received prior to the incurrence of qualifying expenditures or when
monies are received in advance from payers prior to the services being rendered by the District.These
_ amounts are recorded as liabilities in the financial statements.The liabilities are removed and revenues
are recognized in subsequent periods when the District has legal claim to the resources.
0. Other Benefits
Eligible District employees participate in the ERS and eligible volunteer firefighters participate in the
-- District sponsored LOSAP.
j P. Deferred Inflows of Resources
Deferred inflows of resources represents an acquisition of net assets that applies to a future period and
r so will not be recognized as an inflow of resources (revenue/expense credit) until that time. In the
1 District-wide financial statements,long-term leases receivable for properties that the District leases to
third parties is reported as deferred inflows.Revenues will be recognized systematically over the terms
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of the lease agreements.
Q. Fund Balance
The governmental fund financial statements report fund balance classifications according to the relative
strength of spending constraints placed on the purpose for which resources can be used,as follows:
Nonspendable - Consists of amounts that are inherently nonspendable in the current period either
because of their form or because they must be maintained intact. Nonspendable fund balance consists
of prepaids,which are recorded in the general fund.
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. The District has established the following restricted
fund balances:
Capital Reserve
A Capital Reserve (GML §6-g) is used to finance all or part of the costs of construction,
reconstruction, or acquisition of "specific" or "type" capital improvements or equipment. The
establishment of any capital reserve is subject to mandatory referendum (voter approval).
Expenditures from a "specific" reserve require a resolution by the Board. Expenditures from a
r~, "type" reserve require a resolution by the Board, subject to permissive referendum. The District
has two capital reserves,which are accounted for in the general fund.
Restricted for Length of Service Award Program
The District sponsors a defined benefit service award program for its volunteer EMS/Ambulance
workers and is legally responsible for annual contributions to the program. The program is
administered through a trust. Payments made from the program are made from general assets,
which are subject to the claims of the District's creditors.The Trust does not meet the criteria in
paragraph 4 of GASB Statement No.73,Accounting and Financial Reporting forPensions and Related
Assets ThatAre Not within the Scope of GASB Statement 68,andAmendments to Certain Provisions of
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
L GASB Statements 67 and 68,because the assets are not protected from the District's creditors.The
District reports the assets and restricted fund balance in the general fund.
Assigned-Consists of amounts that are subject to a purpose constraint that represents an intended use
_ established by the District's Board.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
1 residual, positive amount of fund balance.Assigned fund balance includes an amount appropriated to
- partially fund the subsequent year's budget,as well as encumbrances not classified as restricted at the
end of the fiscal year.
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 is used only to report
a deficit fund balance resulting from overspending of available resources.
Fund Balance Classification
1 Any portion of fund balance may be applied or transferred for a specific purpose either by voter approval,
-' if required by law, or by formal action of the Board 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.
The Board shall retain the authority to assign fund balance.
In circumstances where an expenditure is incurred for a purpose for which amounts are available in
multiple fund balance classifications (e.g., expenditures related to reserves) the expenditure is to be
spent first from the restricted fund balance to the extent appropriated by any Board approved budget
revision,then from the assigned fund balance to the extent appropriated by the Board, and then from
- the unassigned fund balance.
2. FUTURE ACCOUNTING STANDARDS
The GASB Statements are issued to set generally accepted accounting principles (GAAP) for state and local
—i governments. The following is not an all-inclusive list of GASB statements issued,but the statements that
the District feels may have a future impact on these financial statements. The District will evaluate the
impact of these pronouncements and implement them,as applicable,if material.
1 Effective for the Year Ending Statement
December 31,2024 GASB No.99-Omnibus 2022
December 31,2024 GASB No.101-Compensated Absences
December 31,2025 GASB No.102-Certain Risk Disclosures
{
GASB Statement No.99 provides additional guidance to enhance comparability in accounting and financial
reporting to improve consistency of previously issued literature.
GASB Statement No. 101 was issued to better meet the information needs of financial statement users by
updating the recognition and measurement guidance for compensated absences.That objective is achieved
by aligning the recognition and measurement guidance under a unified model and amending previously
2 required disclosures.
e GASB Statement No. 102 provides users of government financial statements with essential information
about risks related to a government's vulnerabilities due to certain concentrations or constraints.
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EAST MARION FIRE DISTRICT
1 Notes to Financial Statements
(Continued)
l ! 3. STEWARDSHIP.COMPLIANCE.AND ACCOUNTABILITY
A. Budgets
The District's administration prepares a proposed budget for approval by the Board for the general fund,
the only fund with a legally adopted budget.Budgets are adopted annually on the modified accrual basis
I of accounting.
Appropriations are established by the adoption of the budget,are recorded at the program line item level,
r 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, 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. A summary of the general fund operating budget is as
follows:
r—
Budget approved by the Board $ 689,652
Encumbrances from prior year 152,190
Final Budget $ 841,842
B. Encumbrances
Encumbrance accounting is used for budget control and monitoring purposes,and is reported as a part
of the governmental funds.Under this method, purchase orders,contracts,and other commitments for
the expenditure of monies are recorded to reserve applicable ,appropriations. Outstanding
— encumbrances as of year end are presented as part of assigned fund balance, unless classified as
restricted,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.
C. Over Expenditure of Certain Appropriations
Certain general fund appropriations were over expended. These were in the following appropriation
categories of the budget:workers'compensation and unemployment insurance.The general fund budget
in total was not over expended.
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
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4. DEPOSITS WITH FINANCIAL INSTITUTIONS AND INVESTMENTS
f The District's investment policies are governed by state statutes and District policy. Resources must be
deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks or trust companies
located within the State.Permissible investments include obligations of the U.S.Treasury and U.S.Agencies,
repurchase agreements,and obligations of New York State or its localities.Collateral is required for demand
and time deposits, and certificates of deposit not covered by FDIC insurance. Obligations that may be
pledged as collateral are obligations of the United States and its Agencies,and obligations of New York State
and its municipalities.Investments are stated at fair value.
Custodial credit risk is the risk that in the event of a bank failure, the District may be unable to recover
deposits or collateral securities that are in possession of an outside agency. GASB directs that deposits be
r : disclosed as exposed to custodial credit risk if they are not covered by depository insurance.These deposits
are as follows:
A. Uncollateralized,
J B. Collateralized by securities held by the pledging financial institution,or
C. Collateralized by securities held by the pledging financial institution's trust department or agent but
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not in the District's name.
The District's aggregate bank balances were covered by FDIC insurance or fully collateralized by letters of
credit pledged on the District's behalf at year end.
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The District did not have any investments at year end or during the year.Consequently,the District was not
exposed to any material interest rate risk.
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Investment Pool:
The District participates in the New York Cooperative Liquid Assets Securities System (NYCLASS),a multi-
municipal cooperative investment pool agreement pursuant to GML Articles 3-A and 5-G,whereby it holds
a portion of the investments in cooperation with other participants. NYCLASS is rated by the S&P Global
Ratings. The current rating is 'AAAm'. The investments are highly liquid and are considered to be cash
r� equivalents.All NYCLASS investment and collateral policies and in accordance with GML§10 and§11.
The District's investments in NYCLASS consisted of repurchase agreements, U.S. Treasury Securities,and
collateralized bank deposits,with various interest rates and due dates.The dollar weighted average days to
maturity(WAM) of NYCLASS at December 31, 2023,was 41 days to the weighted average life (WAL) was
�- 87 days.These investments are included in cash and cash equivalents as follows:
Carrying
Fund Amount
General Fund $ 100,479
Securities other than repurchase agreements,are valued at the most recent market bid price as obtained
from one or more market makers for such securities. Repurchase agreements are recorded at cost,which
approximates fair value.The lead participant of NYCLASS is the Village of Potsdam.Additional information
1-~ concerning NYCLASS,including the annual report,can be found on its website at www.newyorkclass.org.
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
� I
S. CAPITAL ASSETS
A. Changes
Capital assets balances and activity for the year ended December 31,2023 are as follows:
t Balance Balance
December 31, December 31,
2022 Additions Deletions 2023
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Land $ 2,493 $ $ $ 2,493
Buildings and improvements 533,313 533,313
Equipment 1,498,955 160,000 (54,253) 1,604,702
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$ 2,034,761 $ 160,000 $ (54,253) $ 2,140,508
B. Impairment Loss
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The District evaluates prominent events or changes in circumstances affecting capital assets to
determine whether impairment of a capital asset has occurred. The District's policy is to record an
impairment loss in the period when the District determines that the carrying amount of the asset will not
be recoverable.At December 31,2023,the District has not recorded any such impairment losses.
6. LEASE RECEIVABLE
4 '
Site Lease Agreements
The District has entered into property lease agreements to allow other third parties to utilize District
property for cellular antenna equipment.Under the agreements,the District receives installments in each
year covered by the agreements.The monthly installments increase on the annual lease renewal dates based
on the lease terms and agreement until the expiration dates.During the year ended December 31,2023,the
District recognized lease revenue and lease interest in the amounts of$81,552 and$1,671,respectively.For
�^ purposes of financial presentation,the$81,552 of lease revenue is reflected in the cell tower rental revenues
r-- on the statement of revenues,expenditures,and changes in fund balance.
7. CAPITAL RESERVES
Activity for the capital reserves during the year under audit is as follows:
Building Equipment Total
Reserve Balances-Beginning of Year $ 460,842 $ 661,450 $ 1,122,292
Additions to Reserve:
Board approved transfers:
Planned budget increase 45,000 125,000 170,000
Interest 11,770 15,189 26,959
Use of Reserve:
Capital outlay (9,768) (161,112) (170,880)
r Reserve Balances-End of Year $ 507,844 $ 640,527 $ 1,148,371
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
8. LONG-TERM LIABILITIES
j A. Changes
Long-term liability balances and activity for the year,excluding pensions,are summarized below:
jl
Balance Balance Amounts
December 31, December 31, Due Within
2022 Additions Reductions 2023 One Year
Other long-term liabilities:
Due to employees'
retirement system $ - $ 4,527 $ - $ 4,527 $ 501
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The general fund has typically been used to liquidate long-term liabilities.
9. PENSION PLAN-NEW YORK STATE
A. New York State and Local Employees'Retirement System
Plan Description
The District participates in the ERS. This is a cost-sharing, multiple-employer defined benefit, public
employee,pension plan.The ERS provides retirement,disability,withdrawal,and death benefits to plan
members and beneficiaries related to years of service and final average salary.
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Provisions and Administration
Obligation of employers and employees to contribute and benefits to employees are governed by the New
York State Retirement and Social Security Law(NYSRSSL).The net position of the ERS is held in the New
York State Common Retirement Fund(the Fund),which was established to hold all net assets and record
changes in plan net position allocated to the ERS.As set forth in the NYSRSSL,the Comptroller of the State
of New York(Comptroller) serves as the trustee of the Fund and is the administrative head of the ERS.
Once a public employer elects to participate in the ERS,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.The ERS is included in the State's financial report as a pension
trust fund. That report, including information with regard to benefits provided may be found at
www.osc.state.ny.us/retire/publications/index.php or may be obtained by writing to: New York State
and Local Employees'Retirement System,110 State Street,Albany,NY 12244.
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
Funding Policies
Plan members who joined the system before July 27,1976,are not required to make contributions.Those
joining on or after July 27,1976,and before January 1,2010,with less than ten years of credited services
are required to contribute 3%of their salary.Those joining on or after January 1,2010 and before April
1, 2012,are required to contribute 3% of their salary throughout active membership.Those joining on
or after April 1, 2012, are required to contribute between 3% and 6% dependent on their salary
-- throughout active membership.Employers are required to contribute at an actuarially determined rate
_ based on covered salaries paid.For the ERS,the Comptroller annually certifies the actuarially determined
rates expressly used in computing the employers'contributions for the ERS'fiscal year ended March 3 1st,
_i and employer contributions are either paid by December 15th less a 1%discount or by February 1s.The
District paid 100%of the required contributions as billed by the ERS for the current year.The District's
average contribution rate was 16.8%of covered payroll for the ERS'fiscal year ended March 31,2023.
L
The Comptroller annually certifies the actuarially determined rates expressly used in computing the
employer's contributions based on salaries paid during the ERS' fiscal year ending March 31. The
resulting contributions paid in the current year,and two preceding years,were equal to 100 percent of
the contributions required,and were as follows:
r-,
2023 2022 2021
District contributions $ 6,486 $ 6,082 $ 6,509
1
B. Pension Asset/(Liability)
At December 31,2023,the District reported the following asset/(liability)for its proportionate share of
the net pension asset/(liability) for the ERS in the non-current governmental assets/(liability) account
group.The net pension asset/(liability) was measured as of March 31, 2023.The total pension liability
used to calculate the net pension asset/(liability) was determined by an actuarial valuation as of that
date. The District's proportion of the net pension asset/(liability) was based on a projection of the
District's long-term share of contributions to the system relative to the projected contributions of all
F7 participating members, actuarially determined. This information was provided by the ERS in reports
L
provided to the District.
Measurementdate March 31,2023
District's proportionate share of the
net pension liability $ (17,445)
District's portion of the Plan's
net pension liability 0.0000814%
Change in proportion since the
prior measurement date 0.0000435
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
Actuarial Assumptions
The total pension liability as of the measurement date was determined by using an actuarial valuation as
noted in the table below,with update procedures used to roll forward the total pension liability to the
measurement date.The actuarial valuations used the following actuarial assumptions:
Measurement date March 31,2023
Actuarial valuation date April 1,2022
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%
-' Annuitant mortality rates are based on April 1, 2015 - March 31, 2020 system experience with
adjustments for mortality improvements based on the Society of Actuaries'scale MP-2021.The previous
actuarial valuation as of April 1,2021 used the same assumptions for the measurement of total pension
liability.
The actuarial assumptions were based on the results of an actuarial experience study for the period April
1,2015-March 31,2020.
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.
The target allocation and best estimates of the arithmetic real rates of return for each major asset class
r are summarized as follows:
Long-term
- Target Expected Real
`
Allocation Rate of Return
_i
Measurementdate March 31,2023
Asset class
Domestic equity 32.0% 4.30%
17 International equity 15.0% 6.85%
Real estate 9.0% 4.60%
Private equity 10.0% 7.50%
r Alternative investments 10.0% 5.38-5.84%
Fixed income 23.0% 1.50%
Cash 1.0% 0.00%
100.00 %
L' Real rates of return are net of a long-term inflation assumption of 2.5%.
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(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 determined.Based upon the assumptions,the ERS'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 Asset/Liability to the Discount Rate Assumption
The following presents the District's proportionate share of the net pension liability calculated using the
discount rate of 5.9%,as well as what the District's proportionate share of the net pension asset/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:
Current
1%Decrease Assumption 1%Increase
4.9 % 5.9 % 6.9
District's proportionate share of
the net pension asset(liability) $ (42,157) $ (17,445) $ 3,205
I I
Pension Plan Fiduciary Net Position
The components of the current-year net pension asset/(liability) of the employers, rounded to the
nearest thousand,as of the measurement date were as follows:
(Dollars in Thousands)
Measurement date March 31,2023
Employers'total pension liability $ (232,627,259)
i
Plan fiduciary net position 211,183,223
Employers'net pension liability $ (21,444,036)
Ratio of plan fiduciary net position to the
employers'total pension liability 90.78%
Prepayment to the Pension Plan
Employer contributions are paid annually based on the ERS'fiscal year,which ends on March 31st.Annual
payments are due February 1s.An employer can elect to prepay the amount due by December 15th to
receive a 1%discount.The District paid the annual invoice in December,which resulted in a prepayment
of$1,621 for the period January 1,2024 through March 31,2024.Employee contributions are remitted
monthly.
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
it
10. LENGTH OF SERVICE AWARD PROGRAM(LOSAEa
A. General Information
The District established a single employer defined benefit LOSAP for the active volunteer firefighters of
the East Marion Fire Department. The program took effect on January 1, 1992. The program was
established pursuant to Article 11-A of GML. 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.The information contained in this note is based on information for the LOSAP
for the plan year ending on December 31,2023.
-- B. Program Description
Participation, Vesting,and Service Credit
- Active volunteer firefighters who have reached the age of 18 and who have completed 1 year of
firefighting service are eligible to participate in the program.Participants acquire a non-forfeitable right
to a service award after being credited with 5 years of firefighting services or upon attaining the
program's entitlement age.The program's entitlement age is age 62 and completion of 1 year of service.
In general,an active firefighter is credited with a year of firefighting service for each calendar year after
the establishment of the program for which he or she accumulates fifty points.Points are granted for the
performance of certain activities in accordance with a system established by the sponsor on the basis of
a statutory list of activities and point values. A participant may also receive credit for 5 years of
firefighting service rendered prior to the establishment of the program.
Benefits
A participant's benefit under the program is life annuity with 10 years 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 40 and 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.
_ Participants
- At the December 31, 2023 measurement date, the following participants were covered by the benefit
terms:
Inactive participants currently receiving benefits 15
Inactive participants entitled to but not yet receiving benefits 18
- Active participants 14
47
Contributions
GML§219-d(1)requires the Board,to contribute to an actuarially determined contribution on an annual
basis.The actuarially determined contribution shall be appropriated annually by the Board.
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
Trust Assets
Although assets have been accumulated in an irrevocable trust such that assets are dedicated to
providing pensions to plan members in accordance with benefit terms,the trust assets are not legally
protected from creditors of the District. As such,the trust assets do not meet the criteria in paragraph 4
of GASB Statement No. 73. The underlying assets are reported at Level 1,which is fair value based on
quoted market prices and includes the following:
Level 1
Cash&money market $ 42,460
U.S.equities 417,578
International equities 131,662
Fixed income 594,730
Other assets 81,808
Interest Receivable 3,778
Benefits payable (7,217)
$ 1,264,799
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_! C. 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 Penflex, Inc. to assist in the
administration of the program. The designated program administrator's primary responsibility is to
administer the plan for the exclusive benefit of the participants and their beneficiaries. Such duties
include,but are not limited to,determining eligibility of firefighters to participate in the plan,compute
participant entitlement, authorize disbursements to participants, compute necessary contribution
amounts, maintain all necessary records, and consult with the sponsor and the trustee on long-term
investment plans. Disbursements of program assets for the payment of benefits or administrative
expenses must be reviewed by the trustee,and the Board,and be signed by at least two board members
prior to being disbursed by the administrator.
Program assets are required to be held in trust by GML,for the exclusive purpose of providing benefits
— to participants and their beneficiaries, or for the purpose of defraying the reasonable expenses of the
_ operation and administration of the program. The Board created a service award program trust fund
through the adoption of a trust document,a copy of which is available from the Fire District Secretary.
The Board of Fire Commissioners is the program trustee.
Authority to invest program assets is vested in the program administrator,with the Board's prior written
approval. Subject to restrictions in the program document, program assets are invested in accordance
with a statutory"prudent person' rule.The program document calls for all investment decisions to be
chosen and approved by the trustee,prior to being invested by the administrator.
The sponsor is required to retain an actuary to determine the amount of the sponsor's contributions to
the plan.The actuary retained by the sponsor for this purpose is Penflex,IAL.Portions of the following
information are derived from a report prepared by the actuary dated March 27, 2024 for the plan year
ended December 31,2023.
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
D. Program Financial Condition
Assets and Liabilities
Actuarial Present Value of Benefits at December 31 2023 1362 426
Less:
Assets.Available for Benefits
%of total
Cash&money market 3.36% $ 42,460
U.S.equities 33.02% 417,578
International equities 10.41% 131,662
Fixed income 47.02% 594,730
Other assets 6.47% 81,808
- Interest Receivable 0.30% 3,778
Benefits payable -0.57% (7,217)
Total Net Assets Available for Benefits 1,264,799
- Total Unfunded Benefits $ 97,627
Prior Service Costs
Prior service costs are being amortized over a range of 10-19 years at a discount rate of 5.00%.
Receipts and Disbursements
Plan Net Assets,Beginning of Year $ 1,264,030
- Changes during the year
JI +Plan contributions $ 35,000
__ +Investment income earned 50,921
+/-Changes in fair market value of investments 29,297
Investment expenses (9,133)
Plan benefit withdrawals (90,920)
+/-Changes in benefits payable (13,897)
Administrative and other fees/charges (499)
769
Plan Net Assets,End of Year $ 1,264,799
Contributions
-I' Amount of sponsor's contribution recommended by actuary: $ 28,558
Amount of sponsor's actual contribution: 35,000
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
Administration Fees
Fees paid to designated program administrator $ 6,732
Normal Costs
The actuarial valuation methodology used by the actuary to determine the sponsor's contribution is
attained age normal cost method. 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 5.25%
Mortality tables used for
Withdrawal None
Disability None
Retirement None
Death(actives) RP-2014 Male
Death(inactives) RP-2014 Male
Other None
The actuarial valuation methodology used by the actuary to determine the sponsor's contribution is
i '
attained age normal cost method. The assumptions used by the actuary to determine the sponsors
1 contribution and the actuarial present value of benefits are:
Interest rate: 5.25%compounded annually
Retirement: RP2000 combined-unisex
11. ASSIGNED:APPROPRIATED FUND BALANCE
The amount of$32,000 has been appropriated to reduce taxes for the year ending December 31,2024.
12. COMMITMENTS AND CONTINGENCIES
A. Encumbrances
- All encumbrances are classified as either restricted or assigned fund balance. At December 31,2023,the
District encumbered the following amounts:
Assigned:Unappropriated
General Fund
Fire protection $ 10,000
� I
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EAST MARION FIRE DISTRICT
Notes to Financial Statements
(Continued)
II
_ B. 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; and natural disasters, etc.These risks are covered
by commercial insurance purchased from independent third parties. There have been no significant
-- reductions in insurance coverage as compared to the prior year,and settled claims from these risks have
not exceeded commercial insurance coverage for the past three years.
C. 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.
13. SPENDING LIMITATION
The District did not exceed the statutory spending limitation imposed by New York State Law for the year
ended December 31,2023,or the budget for the year ending December 31,2024.
14. SUBSEQUENT EVENT
The District has evaluated subsequent events through the date of the auditor's report,which is the date the
financial statements were available to be issued. No significant events were identified that would require
adjustment of or disclosure in the financial statements,except for the following:on April 24,2024,the Board
approved,subject to permissive referendum, the use of up to $350,000 from the unassigned fund balance
and$250,000 from the building reserve to fund an asphalt and drainage project at the firehouse.
' I
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EAST MARION FIRE DISTRICT
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual-General Fund-Operating
For the Year Ended December 31,2023
Board- Final Budget
Approved Final Variance with
Budget Budget Actual Actual
REVENUES
Real property taxes $ 554,652 $ 554,652 $ 554,655 $ 3
Payments in lieu of taxes 3,400 3,400 3,595 195
_ Interest and earnings 4,000 4,000 20,392 16,392
Sale of equipment 1,500 1,500
Insurance proceeds 7,071 7,071
Cell tower rental 80,600 80,600 111,581 30,981
Miscellaneous 11,579 11,579
Total Revenues 642,652 642,652 710,373 $ 67,721
APPROPRIATED FUND BALANCE
Prior years'surplus 47,000 47,000
Prior year's encumbrances 152,190
Total Appropriated Fund Balance 47,000 199,190
-
Total Revenues and
Appropriated Fund Balance $ 689,652 $ 841,842
Final Budget
Variance with
Year End Actual and
Encumbrances Encumbrances
EXPENDITURES
- Personal services $ 60,152 $ 60,152 54,573 $ $ 5,579
Equipment and capital outlay 46,000 46,000 35,474 10,526
Fire protection 345,500 497,690 343,237 10,000 144,453
State retirement system 8,000 8,000 7,062 938
Length of service award program 42,000 42,000 35,000 7,000
Social security 5,000 5,000 4,106 894
Workers'compensation 12,000 12,000 18,537 (6,537)
Unemployment insurance 1,000 1,000 1,051 (51)
Total Expenditures 519,652 671,842 499,040 10,000 162,802
OTHER FINANCING USES
Operating transfers out 170,000 170,000 170,000 -
Total Expenditures and Other Uses $ 689,652 $ 841,842 669,040 $ 10,000 $ 162,802
Net Change in Fund Balance 41,333
Fund Balance-Beginning of Year 529,001
Fund Balance-End of Year $ 570,334
Note to Supplementary Information
Budget Basis of Accounting
Budgets are adopted on the modified accrual basis of accounting.
See Paragraph on Supplementary Information Included in Auditor's Report -24-
CULLEN , & DANOWSKI, LLP
CERTIFIED PU-Bf4d-AC-COUNTANTS
` _U-1- � �,
i
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Fire Commissioners
East Marion Fire District
East Marion,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 financial statements of the East Marion Fire District(District),as of
and for the year ended December 31, 2023, and the related notes to financial statements, which collectively
comprise the District's basic financial statements, and have issued our report thereon dated July 19, 2024.As
described more fully in Note 1, the East Marion Fire District has prepared these financial statements in
accordance with the financial reporting provisions of the New York State Office of the State Comptroller,which
is a comprehensive basis of accounting other than accounting principles generally accepted in the United States
of America.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements,we considered the East Marion Fire District's
- internal control over financial reporting(internal control)as a basis for designing the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial statements,but not
for the purpose of expressing an opinion on the effectiveness of the East Marion Fire District's internal control.
Accordingly,we do not express an opinion on the effectiveness of the East Marion Fire 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 combination of deficiencies,in internal
control, such that there is a reasonable possibility that a material misstatement of the District's financial
statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a
deficiency, or 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 were not identified.
1650 ROUTE 112,PORT JEFFERSON STATION,NEW YORK 11776-3060
O O
PHONE:631-473-3400•FAX:631-473-4863•WWW.CDLLP.NET -25-
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the East Marion Fire District's financial statements are
free from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations,contracts and grant agreements,noncompliance with which could have a direct and material effect
on the financial statements. 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
instances 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.
July 19,2024
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