HomeMy WebLinkAbout2023 TOWN OF SOUTHOLD, NEW YORK
FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
(WITH INDEPENDENT AUDITORS' REPORT)
For the Year Ended December 31, 2023
TABLE OF CONTENTS
FINANCIAL SECTION
Page
IndependentAuditors' Report...................................................................................................................... 1-4
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis..................................................................................................... 5-17
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:
Statementof Net Position .......................................................................................................................... 18
Statementof Activities................................................................................................................................ 19
Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet and Reconciliation of the Governmental Funds Balance Sheet to
the Statement of Net Position............................................................................................ 20-21
Statement of Revenues, Expenditures, and Changes in Fund Balances and
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures
and Changes in Fund Balances to the Statement of Activities.......................................................... 22-23
Proprietary Fund Financial Statements
Statementof Net Position ....................................................................................................................... 24
Statement of Revenues, Expenses, and Changes in Fund Net Position............................................. 25
Statementof Cash Flows........................................................................................................................ 26
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position....................................................................................................... 27
Statement of Changes in Fiduciary Net Position................................................................................... 28
Notes to Financial Statements...................................................................................................................... 29-65
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN
MANAGEMENT'S DISCUSSION AND ANALYSIS
Schedule of Revenues, Expenditures, and Changes in Fund Balance- Budget and Actual:
GeneralFund.............................................................................................................................................. 66
HighwayFund............................................................................................................................................. 67
Community Preservation Fund.......................................................................................... 68
Schedule of Changes in the Town's Total Other Postemployment Benefits Liability and
RelatedRatios............................................................................................................... 69
Schedule of Pension Contributions....................................................................................... 70
Schedule of Proportionate Share of the Net Pension Liability(Asset)............................................ 71
TABLE OF CONTENTS (continued)
OTHER SUPPLEMENTARY INFORMATION
Page
Combining Fund Statements:
Nonmajor Governmental Funds:
CombiningBalance Sheet...................................................................................................................... 72
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances......................... 73
OTHER REPORTS
Independent Auditors' 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.............................................................. 74-75
FINANCIAL
SECTION
C11PKF
CCONNOR
D Y I E
ACCOUNTANTS AND ADVISORS
Independent Auditors' Report
The Honorable Supervisor and Town Board
of the Town of Southold, New York
Report on the Audit of the Financial Statements
Disclaimer of Opinion and Unmodified Opinions
We have audited the financial statements of the governmental activities, business-type activities,
each major fund and the aggregate remaining fund information of the Town of Southold, New York
("Town"), as of and for the year ended December 31, 2023, and the related notes to the financial
statements. We were not engaged to audit the financial statements of the aggregate discretely
presented component units. These financial statements collectively comprise the Town's basic
financial statements as listed in the table of contents.
Summary of Opinions
Opinion Unit Type of Opinion
Governmental Activities Unmodified
Business-type Activities Unmodified
Aggregate Discretely Presented Component Disclaimer
Units
General Fund Unmodified
Highway Fund Unmodified
Capital Projects Fund Unmodified
Community Preservation Fund Unmodified
Southold Local Development Corporation Unmodified
Aggregate Remaining Fund Information Unmodified
We did not audit the financial statements of the Southold Local Development Corporation, which is
both a major fund, and 100% of the assets, net position, and revenues of the business-type activities
as of December 31, 2023. Those statements were audited by other auditors whose report has been
furnished to us, and our opinion, insofar as it relates to the amounts included for Southold Local
Development Corporation, is based solely on the report of the other auditors.
Disclaimer of Opinion on the Aggregate Discretely Presented Component Units
Because of the significance of the matter described in the Basis for Disclaimer of Opinion and
Unmodified Opinions section of our report, we have not been able to obtain sufficient appropriate
audit evidence to provide a basis for an audit opinion on the financial statements of the aggregate
discretely presented component units of the Town. Accordingly, we do not express an opinion on
these financial statements.
PKF O'CONNOR DAVIES, LLP
878 Veterans Memorial Highway,41"Floor, Hauppauge, NY 11788 I Tel:631.434.9500 I Fax:631.434.9518 I www.pkfod.com
PKF O'Connor Davies, LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility
or liability for the actions or inactions on the part of any other individual member firm or firms.
Unmodified Opinions on Governmental Activities, Business-type Activities, Each Major Fund,
and Aggregate Remaining Fund Information
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, business-type activities, each major fund,
and the aggregate remaining fund information of the Town as of December 31, 2023, and the
respective changes in financial position for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America ("GAAS") 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 Auditors' Responsibilities for the
Audit of the Financial Statements section of our report. We are required to be independent of the
Town, 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 opinions.
Basis for Disclaimer of Opinion and Unmodified Opinions
Matter Giving Rise to Disclaimer of Opinion on the Aggregate Discretely Presented Component
Units
The financial statements of Fishers Island Ferry District, Fishers Island Waste Management District,
Cutchogue-New Suffolk Park District, Southold Park District, Orient-East Marion Park District,
Mattituck Park District, and Orient Mosquito District have not been audited, and we were not
engaged to audit the Fishers Island Ferry District, Fishers Island Waste Management District,
Cutchogue-New Suffolk Park District, Southold Park District, Orient-East Marion Park District,
Mattituck Park District, and Orient Mosquito District financial statements as part of our audit of the
Town's basic financial statements. The Fishers Island Ferry District, Fishers Island Waste
Management District, Southold Park District, Cutchogue-New Suffolk Park District, Orient-East
Marion Park District, Mattituck Park District, and Orient Mosquito District's financial activities are
included in the Town's basic financial statements as a part of the aggregate discretely presented
component units and represent 100% of the assets, net position, and revenues of the Town's
aggregate discretely presented component units.
Emphasis of Matter
We draw attention to Note I in the notes to financial statements which discloses the effects of a prior
period adjustment due to correction of an error. Our opinion is not modified with respect to this
matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud
or error.
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Responsibilities of Management for the Financial Statements (continued)
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 Town'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.
Auditors'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 auditors'
report that includes our opinions. Reasonable assurance is a high level of assurance but is not
absolute assurance and therefore is not a guarantee that an audit conducted in accordance with
GAAS 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 financial statements.
In performing an audit in accordance with GAAS and Government 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 Town'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.
• Conclude whether, in our judgement, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the Town'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.
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Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management's
Discussion and Analysis and the schedules included under Required Supplementary Information in
the accompanying table of contents be presented to supplement the basic financial statements.
Such information is the responsibility of management and, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the
required supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management's
responses to our inquiries, the basic financial statements, and other knowledge we obtained during
our audit of the basic financial statements. We do not express an opinion or provide any assurance
on the information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Town's basic financial statements. The combining fund financial statements
are presented for purposes of additional analysis and are 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 combining fund financial statements are fairly stated, in all material
respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December
20, 2024 on our consideration of the Town's internal control over financial reporting and on 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 Town'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 Town's internal control over financial reporting and compliance.
PW
PKF O'Connor Davies, LLP
Hauppauge, New York
December 20, 2024
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REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2023
As management of the Town of Southold, New York (the "Town"), we offer readers of the financial statements
this narrative overview and analysis of the financial activities for the year ended December 31, 2023.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of the primary government exceeded its liabilities and deferred
inflows at the close of 2023 by$136,864,321 (net position).
• The primary government's net position increased by$12,748,898.
• As of the close of 2023, the Town's governmental funds reported combined ending fund balances
of$77,174,099. Of this amount, $2,027,004 is not in spendable form or is required to remain intact.
The remaining $75,147,095 or approximately 97.4% of total fund balance is in spendable form with
various levels of spending constraint: restricted, committed, assigned, or unassigned (see Note
B.2).
• The Town reviewed the provisions of GASB Statement No. 96, "Subscription-Based Information
Technology Arrangements" ("SBITA's") and its impact on the financial statements for the fiscal year
ended December 31, 2023. The Town's evaluated the financial impact of GASB Statement No. 96
and determined that the implementation of this standard was not required as it did not have a
material impact on its financial statements.
• At the end of 2023, the Town's total fund balance for the General Fund was $26,335,261, an
increase of $3,168,183 or 13.7% from the prior year. The assigned and unassigned fund balance
for the General Fund was $24,172,006 or 65.9% of total General Fund expenditures and other
uses.
• The Town's total long-term bonded debt was $25,405,000, excluding premiums of $1,391,346, an
increase of 28.1%over the prior year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Town's basic financial statements.
The Town's basic financial statements comprise these components: (1)government-wide financial statements,
(2) fund financial statements, and (3) notes to basic financial statements. This report also contains
supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the
Town's finances, in a manner similar to a private-sector business. The intent of the government-wide financial
statements is to give the reader a long-term view of the Town's financial condition.
The Statement of Net Position presents financial information on all of the Town's assets, deferred outflows of
resources, liabilities, and deferred inflows of resources with the difference between the four reported as net
position. This statement combines and consolidates the Town's current financial resources with capital assets
and long-term obligations. Over time, increases or decreases in the Town's net position is one indicator of
whether its financial health is improving or deteriorating. You will need to consider other nonfinancial factors,
however, such as changes in the Town's property tax base and the condition of the Town's buildings, roads,
drainage and other assets to assess the overall health of the Town.
The Statement of Activities presents information showing how the Town's net position changed during the
most recent year. Revenues and expenses are reported by activity to give the reader an understanding of how
each of the Town's activities are being supported. All changes in net position are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus,
revenues and expenses are reported in this statement for some items that will only result in cash flows in
future periods. This method is known as the accrual basis of accounting and is different from the modified
accrual basis of accounting used in the Town's fund financial statements.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2023
OVERVIEW OF THE FINANCIAL STATEMENTS (continued)
Government-wide Financial Statements (continued)
The Town's government-wide financial statements include both the governmental and business-type activities
of the Town itself(known as the primary government) and of its legally separate component units for which the
Town is financially accountable. Financial information for all component units is reported separately (discretely
presented) from the financial information presented for the primary government. Each of the government-wide
financial statements distinguish functions of the Town that are principally supported by taxes and
intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a
significant portion of their costs through user fees and charges (business-type activities). The business-type
activities of the Town includes the activities of the Southold Local Development Corporation ("SLDC").
Governmental Activities - The Town's basic services are reported here, including: general government
support; public safety; public health; transportation; economic assistance and opportunity; culture and
recreation and home and community services. Property taxes, mortgage taxes, franchise fees, fines, and state
and federal grants finance these activities. The Town also charges fees to help cover the cost of certain
services it provides.
Business-type Activities—The activities of the SLDC are reported here.
Component Units — Discretely presented component units are legally separate organizations for which the
Town is either financially accountable, or the nature and significance of their relationship with the Town is such
that exclusion would cause the Town's financial statements to be misleading or incomplete. All of these
entities are reported in a separate column in the government-wide statements. The Town also includes one
blended component unit, the SLDC, that is in substance, a part of the Town's operations. The SLDC is
reported as a proprietary fund.
Information on separately issued financial statements is shown in Note E to the financial statements.
Fund Financial Statements
The fund financial statements focus on current available resources and are organized and operated on the
basis of funds, each of which is defined as an accounting entity with a self-balancing set of accounts
established for the purpose of carrying on specific or attaining certain objectives in accordance with special
regulations, restriction or limitations. The Town, like other governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the Town can be divided
into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental Funds
The Town's activities are reported in governmental funds. Governmental funds are used to account for
essentially the same functions reported as governmental activities in the government-wide financial
statements. However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spendable resources, as well as on balances of
spendable resources available at the end of the year. Such information may be useful in evaluating a
government's near-term financial requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it
is useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing so, readers may better
understand the long-term effect of the Town's near-term financial decisions. Both the governmental fund
balance sheet and governmental fund statement of revenues, expenditures, and change in fund balances
provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The Town maintains twelve (12) individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and
changes in fund balances for the four (4) major funds. The General Fund, Highway Fund, Capital Projects
Fund, and the Community Preservation Fund are reported as major funds. Data from the eight (8) other
governmental funds are combined into a single, aggregated presentation.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2023
OVERVIEW OF THE FINANCIAL STATEMENTS (continued)
Fund Financial Statements (continued)
The Town adopts an annual appropriated budget for its general and special revenue funds, except for the
Capital Projects Fund, and special grant fund. A budgetary comparison schedule for the General Fund,
Highway Fund, and Community Preservation Fund can be found in the section labeled "Required
Supplementary Information Other Than Management's Discussion and Analysis".
Proprietary Funds
The Town maintains one type of proprietary fund, an enterprise fund. Enterprise funds are used to report the
same functions presented as business-type activities in the government-wide financial statements. The Town
uses an enterprise fund to account for the SLDC. Proprietary funds prove the same type of information as the
government-wide financial statements, only in more detail. The proprietary fund financial statements can be
found in the "Basic Financial Statements"section of this report.
Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the government and as
the resources are not available to support the Town's programs, these funds are not reflected in the
government-wide financial statements. The Town has one fiduciary fund, a custodial fund, which primarily
accounts for real property taxes billed and collected on behalf of other municipalities, and bail collected and
held on behalf of bailees.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government-wide and fund financial statements. The notes to the financial statements can be found following
the basic financial statements.
Other information
In addition to the basic financial statements and accompanying notes, this report also presents required
supplementary information concerning the Town's budget to actual comparisons for the major governmental
funds, and progress in funding its obligation to provide pension and other postemployment benefits to its
employees. Required supplementary information immediately follows the notes to the financial statements.
The combining nonmajor governmental funds financial statements are presented immediately following the
required supplementary information.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2023
OVERVIEW OF THE FINANCIAL STATEMENTS (continued)
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the
case of the Town, assets and deferred outflows of resources exceeded liabilities and deferred inflows by
$136,864,321 at the close of the most recent year.
Condensed Statement of Net Position
Primary Government
December 31,
Governmental Activities Business-type Activities Total
2023 2022 2023 2022* 2023 2022*
Assets
Current and other assets $ 91,459,529 $ 83,015,126 $ 161,432 $ 168,051 $ 91,620,961 $ 83,183,177
Noncurrent and other assets 2,018,948 4,779,979 2,018,948 4,779,979
Capital assets 215,203,021 205,952,058 215,203,021 205,952,058
Total Assets 308,681,498 293,747,163 161,432 168,051 308,842,930 293,915,214
Deferred Outflows of Resources 19,300,948 29,797,186 -0- -0- 19,300,948 29,797,186
Liabilities
Current and other liabilities 12,715,556 11,841,722 1,800 1,750 12,717,356 11,843,472
Long-term liabilities 148,729,476 158,016,915 148,729,476 158,016,915
Total Liabilities 161,445,032 169,858,637 1,800 1,750 161,446,832 169,860,387
Deferred Inflows of Resources 29,832,725 29,736,590 -0- -0- 29,832,725 29,736,590
Net Position
Net investment in capital assets 187,909,885 177,768,589 187,909,885 177,768,589
Restricted 33,847,363 29,417,781 33,847,363 29,417,781
Unrestricted(deficit) (85,052,559) (83,237,248) 159,632 166,301 (84,892,927) (83,070,947)
Total Net Position $ 136,704,689 $ 123,949,122 $ 159,632 $ 166,301 $ 136,864,321 $ 124,115,423
*As restated,see note I.
Total assets and deferred outflows of resources of the primary government as of December 31, 2023 were
$328,143,878, an increase of$4,431,478 from the prior year. Total liabilities and deferred inflows of resources
as of December 31, 2023 were $191,279,557, which represents a decrease of$8,317,420 from December 31,
2022. This resulted in a net position of $136,864,321, an increase of $12,748,898 from net position of
$124,115,423 as of December 31, 2022. Of the Town's net position, $187,909,885 was invested in capital
assets and $33,847,363 was restricted for community preservation and community housing, leaving an
unrestricted deficit of$84,892,927.
By far, the largest portion of the Town's net position is $187,909,885 which reflects its investment in capital
assets (i.e. land, construction in progress, buildings, machinery and equipment, intangibles, and infrastructure)
less any related debt used to acquire those assets that is still outstanding. The Town uses these capital assets
to provide services to citizens; consequently, these assets are not available for future spending. Although the
Town's investment in its capital assets is reported net of related debt, it should be noted that the resources
needed to repay this debt must be provided from other sources, since the capital assets themselves will not be
used to liquidate these liabilities.
The deficit in the unrestricted net position does not necessarily indicate fiscal stress. At the end of the current
year, the Town is able to report a positive change in the categories of investment in capital assets, and
restricted net position. The deficit balance in unrestricted arose primarily due to long-term liabilities, which
includes other postemployment benefits, net pension liability, leases payable, compensated absences, claims
and judgments, and landfill closure and postclosure costs that will be funded through future budgetary
appropriations when they become payable in future periods.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2023
GOVERNMENT-WIDE FINANCIAL ANALYSIS (continued)
Statement of Acti\ties
Primary Government
For the years ended December 31, Governmental Activities Business-type Activities Total
2023 2022 2023 2022* 2023 2022*
Program Revenues
Charges for services $ 5,776,037 $ 5,156,370 $ 11,613 $ 18,775 $ 5,787,650 $ 5,175,145
Operating grants and contributions 901,255 683,583 901,255 683,583
Capital grants and contributions 1,792,278 1,282,914 1,792,278 1,282,914
8,469,570 7,122,867 11,613 18,775 8,481,183 7,141,642
General Revenues
Real property taxes 41,305,189 40,410,416 41,305,189 40,410,416
Other real property tax items 435,708 432,325 435,708 432,325
Non-property tax items 15,176,444 15,748,704 15,176,444 15,748,704
Interest earnings 2,609,288 864,004 3,318 341 2,612,606 864,345
State aid-unrestricted 1,808,050 2,680,792 1,808,050 2,680,792
Other 340,452 613,743 340,452 613,743
61,675,131 60,749,984 3,318 341 61,678,449 60,750,325
Total Revenues 70,144,701 67,872,851 14,931 19,116 70,159,632 67,891,967
Program Expenses
General government support 13,485,016 16,031,758 13,485,016 16,031,758
Public safety 23,636,418 25,463,295 23,636,418 25,463,295
Public health 43,300 43,300 43,300 43,300
Transportation 7,069,399 8,553,838 7,069,399 8,553,838
Economic assistance and opportunity 2,306,038 2,721,975 21,600 21,599 2,327,638 2,743,574
Culture and recreation 762,405 693,765 762,405 693,765
Home and community services 8,963,992 7,750,011 8,963,992 7,750,011
Interest on debt 1,122,566 982,237 1,122,566 982,237
Total Expenses 57,389,134 62,240,179 21,600 21,599 57,410,734 62,261,778
Increase(decrease)in Net Position 12,755,567 5,632,672 (6,669) (2,483) 12,748,898 5,630,189
Net Position,beginning of year 123,949,122 118,316,450 166,301 168,784 124,115,423 118,485,234
Net Position,end of year $ 136,704,689 $ 123,949,122 $ 159,632 $ 166,301 $ 136,864,321 $ 124,115,423
*As restated,see Note I.
Net position, from all combined activities, increased by$12,748,898 in the current year. The governmental
activities increased by$12,755,567 and the business-type activities decreased by$6,669.
Key elements of the changes in governmental activities were:
• Overall program revenues increased by $1,346,703 from the prior year. Charges for services increased
by $619,667 due to increases in waste disposal fees, building permits, and trustee permits. Operating
grants and contributions increased by $217,672 primarily due to an increase in the community
development block grants and the public safety answering point grant. Capital grants and contributions
increased by $509,364 due to an increase in revenues from the Coronavirus State and Local Fiscal
Recovery Funds.
• General revenues increased by $925,147 from the prior year. This was primarily due to the increase in
property taxes of $894,773 due to an increase in the tax levy, and an increase in interest earnings of
$1,745,284 due to an increase in interest rates. This was offset by a decrease in State aid of$872,72 due
to a decrease in mortgage tax and a decrease in non-property tax items of$572,260 due a decrease in
transfer taxes.
• Overall expenses decreased by$4,851,045 due to a decrease in other postemployment benefits expense
offset by an increase in pension expense.
There were no significant changes in the business-type activities.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2023
GOVERNMENT-WIDE FINANCIAL ANALYSIS (continued)
Total Revenue(Cost)of Services
Net Cost of Services for Primary Government
For the years ended December 31,
Total Cost of Services Program Revenues Net(Cost)of Services
2023 2022* 2023 2022* 2023 2022*
Governmental activities:
General government support $ 13,485,016 $ 16,031,758 $ 1,081,419 $ 707,019 $ (12,403,597) $ (15,324,739)
Public safety 23,636,418 25,463,295 1,367,176 1,250,163 (22,269,242) (24,213,132)
Public health 43,300 43,300 5,000 5,384 (38,300) (37,916)
Transportation 7,069,399 8,553,838 1,772,583 1,237,729 (5,296,816) (7,316,109)
Economic assistance
and opportunity 2,306,038 2,721,975 445,869 382,622 (1,860,169) (2,339,353)
Culture and recreation 762,405 693,765 314,919 269,434 (447,486) (424,331)
Home and community
services 8,963,992 7,750,011 3,482,604 3,270,516 (5,481,388) (4,479,495)
Interest on debt 1,122,566 982,237 (1,122,566) (982,237)
Total governmental activities $ 57,389,134 $ 62,240,179 $ 8,469,570 $ 7,122,867 $ (48,919,564) $ (55,117,312)
Business-type activities*:
Economic assistance
and opportunity $ 21,600 $ 21,599 $ 11,613 $ 18,775 $ (9,987) $ (2,824)
Total business-type activities $ 21,600 $ 21,599 $ 11,613 $ 18,775 $ (9,987) $ (2,824)
Total primary government $ 57,410,734 $ 62,261,778 $ 8,481,183 $ 7,141,642 $ (48,929,551) $ (55,120,136)
*As restated,see note I.
The total cost of all activities this year was$57,410,734 ($57,389,134 in the governmental activities and $21,600 in
the business-type activities). The net cost of these services after being subsidized by program revenues of
$8,481,183 was$48,929,551.
Expenses and Program Revenues-Governmental Activities for the Year Ended December 31, 2023
$25,000,000
$20,000,000
®Expenses
®Program Revenues
$15,000,000
$10,000,000
$5,000,000
$0
General government Public safety Public health Transportation Economic assistance and Culture and recreation Home and community Interest on debt
support opp ortu n ity services
-10-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2023
GOVERNMENT-WIDE FINANCIAL ANALYSIS (continued)
Revenues by Source - Governmental Activities for the Year Ended December 31, 2023
Operating grants and Capital grants and
contributions contributions
1% 2%
Other general
revenues
5%
i
Non-property tax
items
22%
Real property
Charges for taxes
services 59%
Bova
State aid-
unrestricted
3%
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS
Governmental Funds
The focus of the Town's governmental funds is to provide information on near term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the Town's financing requirements.
In particular, spendable fund balance may serve as a useful measure of a government's net resources
available for spending at the end of the year.
• Nonspendable fund balance - $2,027,004 (inherently nonspendable) includes the portion of net
resources that cannot be spent because they must be maintained intact.
• Restricted fund balance - $38,490,648 (externally enforceable limitations on use) includes amounts
subject to limitations imposed by creditors, grantors, contributors, or laws and regulations of other
governments.
• Committed fund balance - $2,089,331 includes amounts subject to constraints placed on the use of
its own resources by the Town's highest level of decision-making authority.
• Assigned fund balance - $12,968,058 (limitation resulting from intended use) consists of amounts
where the intended use is established by the Town Board, but do not meet the criteria to be classified
as restricted or committed.
• Unassigned fund balance - $21,599,058 (residual net resources) is the total fund balance in the
general fund in excess of nonspendable, restricted, committed and assigned fund balance and
negative fund balances in funds other than the general fund.
The following schedule presents a summary of the Governmental Funds - (general, special revenue, and
capital projects) revenues and expenditures for the years ended December 31, 2023 and 2022, and the
amount of change in relation to the prior year.
-11-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2023
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS (continued)
Governmental Funds (continued)
Increase
2023 2022 (Decrease)
Revenues:
Real propertytaxes $ 41,305,189 $ 40,410,416 $ 894,773
Other real property tax items 435,708 432,325 3,383
Non-property tax items 15,176,444 15,748,704 (572,260)
Departmental income 4,222,851 4,011,054 211,797
Intergovernmental charges 264,494 123,656 140,838
Use ofmoneyand property 2,458,519 793,929 1,664,590
Licenses and permits 907,768 748,579 159,189
Fines and forfeitures 368,222 323,203 45,019
Sale of propertyand compensation for loss 485,801 381,263 104,538
Miscellaneous local sources 210,072 307,322 (97,250)
Interfund revenues 5,129 5,756 (627)
State aid 3,213,730 4,177,217 (963,487)
Federal aid 1,175,622 420,345 755,277
Total Governmental Fund Revenues $ 70,229,549 $ 67,883,769 $ 2,345,780
Expenditures:
General government support $ 9,128,560 $ 8,081,140 $ 1,047,420
Public safety 12,752,682 12,105,160 647,522
Public health 43,300 43,300 -0-
Transportation 4,551,610 4,625,847 (74,237)
Economic assistance and opportunity 1,374,421 1,315,973 58,448
Culture and recreation 460,048 331,389 128,659
Home and community services 11,893,790 9,366,936 2,526,854
Employee benefits 15,044,670 13,939,094 1,105,576
Capital Outlay 5,003,720 2,767,758 2,235,962
Debtservice principal and interest 12,075,930 3,758,531 8,317,399
Total Governmental Fund Expenditures $ 72,328,731 $ 56,335,128 $ 15,993,603
Otherfnancing sources and uses:
Debt proceeds $ 11,610,000 $ 2,541,841 $ 9,068,159
Lease proceeds 148,433 64,393 84,040
Transfers in 3,520,641 2,587,488 933,153
Transfers out (3,520,641) (2,587,488) (933,153)
Total Governmental Fund Other Sources and Uses $ 11,758,433 $ 2,606,234 $ 9,152,199
• Although the Town appropriated $1,525,000 of prior year fund balance to finance the 2023 operations,
excluding open purchase orders brought forward, the total fund balance increased $9,659,251.
Governmental revenues increased by $2,345,780, which is primarily due to increases in real property
taxes of $894,773, use of money and property of $1,664,990, and federal aid of $755,277, offset by
decreases in non-property tax items of$572,260, and State aid of$963,487.
• Overall, governmental expenditures increased by $15,993,603, which is primarily due to increases in
general government support of $1,047,420, home and community services of $2,526,854, employee
benefits of$1,105,576, capital outlay of$2,235,962, and debt service of$8,317,399.The increase in debt
service is due to the repayment of a long-term bond anticipation note with a public improvement bond.
• Debt proceeds increased $9,068,159 due to issuance of a public improvement bond, and issuance of
long-term bond anticipation notes.
-12-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2023
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS (continued)
Governmental Funds (continued)
General Fund
The General Fund is the chief operating fund of the Town. At the end of the current year, the total fund
balance of the General Fund was $26,335,261, an increase of$3,168,183, or 13.7% from the prior year. Of
this amount, $1,445,626 is not in spendable form (i.e. inventory and prepaid items). The committed fund
balance of $717,629 represents park and recreation subdivision fees assessed through Town Code which
can only be expended on park, playground, or other recreational purposes. The remaining $24,172,006 of the
fund balance is in spendable form as follows: $460,000 is assigned for insurance claims; $1,900,000 has
been assigned by the Town Board for the subsequent year's budget and $212,948 has been assigned for
encumbrances resulting from open purchase orders, and the remaining $21,599,058 represents unassigned
fund balance.
As a measure of the general funds' liquidity, it may be useful to compare spendable fund balance and total
fund balance to total fund expenditures and other financing uses. Spendable and not committed and total fund
balance represents 65.9% and 71.8%, respectively, of total general fund expenditures and other financing
uses.
The key elements of the fund balance increase of$3,168,183 are as follows:
• General government support was $1,750,090 under budget primarily due to personal services coming in
under budget by approximately $200,000 due to unfilled positions during the year, police retirements
under budget by approximately $300,000, $600,000 budgeted for lead line replacements which were not
performed, and other contractual expenditures under budget of approximately$500,000.
• Public safety was $793,883 less than budgeted which resulted mainly from savings of approximately
$600,000 in personnel costs due to unfilled positions and conservative overtime usage, and contractual
expenditures under budget of approximately$180,000.
• Employee benefits were $634,667 under budget due to the Town conservatively budgeting for retirement
contributions and medical insurance.
• Use of money and property exceeded budget expectations by $948,344 due to an increase in interest
rates.
• Non-property tax items exceeded budget expectations by $470,400 due sales tax revenues exceeding
budgeted expectations.
• State aid was under budget by $679,698 due mortgage tax coming in under budget approximately
$190,000, and lead service line replacement grants under budget of $600,000, offset by various other
State grants over budget approximately$120,000.
• The general fund final budget included a planned deficit of$1,436,439.
Highway Fund
At the end of the current year, the total fund balance of the highway fund was$4,296,522, an increase of$128,686
or 3.1% from the prior year. Of this amount, $378,289 is not in spendable form (i.e. prepaid and inventory items).
The remaining $3,918,233 of fund balance is in spendable form as follows: $642,000 has been assigned by the
Town Board for the subsequent year's budget, $32,513 has been assigned for encumbrances resulting from open
purchase orders, and the remaining $3,243,720 is assigned for highway purposes.
-13-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2023
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS (continued)
Governmental Funds (continued)
Highway Fund (continued)
The key elements of the fund balance increase of$128,686 are as follows:
• Transportation costs were $585,545 under budget as personal services came in under budget by
approximately $370,000 due to due to conservative overtime budgeting, approximately $90,000 in
equipment purchases being lower than budgeted, and contractual expenditures under budget of
approximately$130,000.
• Employee benefits savings of $134,682 resulted from conservative budgeting for retirement and health
insurance costs, and the decrease in wages noted above.
• Use of money and property and licenses and permit fees exceeded budgeted expectations by$211,069
and $122,070 respectively.
• The final budget included a planned deficit of$914,809.
Capital Projects Fund
At December 31, 2023, the capital projects fund had total fund balance of $6,184,443, of which $4,650,923
was restricted, and $1,533,520 was assigned to capital projects. The increase in fund balance of$1,470,552
was due to debt proceeds of $11,610,000, lease proceeds of $148,433, transfers in of $2,700,728, and
revenues of$172,673, offset by capital outlay expenditures of$5,003,720, and repayment of long-term bond
anticipation notes of$8,010,000.
Community Preservation Fund
The Community Preservation Fund's total fund balance, which is restricted for land preservation acquisitions,
increased by $3,195,773 to $32,613,554. The increase in fund balance is primarily attributable to non-
property tax revenues (proceeds from the 2% tax on property sales) of$11,401,403, and interest income of
$775,300 offset by home and community services expenditures of$6,807,949 and debt service expenditures
totaling $2,073,086.
Nonmajor Governmental Funds
At the end of the current year, the total fund balance of the nonmajor governmental funds was $7,744,319,
increasing $1,696,057 from the prior year. Of this amount, $195,451 is not in spendable form (i.e. prepaids
and inventory). The restricted fund balance of $1,233,809 is restricted for community housing initiatives, and
the committed fund balance of$1,371,702 is related to housing fund fees assessed through Town Code which
can only be expended on affordable housing projects in the Town. The remaining $4,943,357 of the fund
balance is in spendable form as follows; $286,000 for subsequent year's budget, $216,637 assigned for
encumbrances resulting from open purchase orders, and the remaining $4,440,720 of fund balance is
assigned for nonmajor governmental fund purposes.
The key elements of the fund balance increase of$1,696,057 are as follows:
Solid Waste Management's District fund balance is $2,302,859, an increase of$363,360, which was
due to expenditures coming in lower than budgeted by approximately $230,000, primarily due
approximately $110,000 in home and community, and approximately $110,000 in employee benefits,
and revenues exceeding budgeted amounts by approximately $290,000, offset by a planned deficit of
$125,000, and prior year encumbrances of approximately$130,000.
The fund balance of the Community Housing Fund is $1,233,809, an increase of $1,233,809, which
was due a new 0.5% transfer tax (see Note F) collected on sales of real property within the Town, and
which is restricted for use on affordable housing initiatives.
-14-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2023
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS (continued)
Governmental Funds (continued)
General Fund Budgetary Highlights
The Town appropriated expenditures and other financing uses in the original general fund budget in excess of
estimated revenues and other financing sources in the amounts of $1,169,881, inclusive of $269,881 of
encumbrances, by assigning fund balance from the prior year. Actual revenues and other financing sources
were greater than anticipated by$352,418. Actual expenditures and other uses in all budgetary line items were
less than the budgetary appropriation by$4,039,256.
Over the course of the year, the Town Board revises the budget as needed so that expenditures do not exceed
appropriations. In all Town funds, various transfers between appropriations were approved for this purpose.
The following are the main components of the increase in appropriations:
• State and federal aid were increased by $170,869 for various grant funds, including an increase in
appropriation for transportation of $86,869 to account for federal grants passed through to Fishers
Island Ferry District.
• Appropriated fund balance increased by$266,558 primarily for parks and recreation.
• Miscellaneous local sources increased by$70,505 for various local grants and donations.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
As of December 31, 2023, the primary government had $215,203,021 in net capital assets and the Town's
component units had $15,031,158 in net capital assets as listed below:
Capital Assets at December 31,
Primary Government 2023 2022
Land $ 22,250,399 $ 17,237,847
Land development rights 150,285,469 148,201,050
Construction in progress 2,305,671 976,331
Buildings 22,137,720 21,553,092
Improvements other than buildings 16,940,190 16,940,190
Machinery and equipment 18,165,585 17,079,001
Software 1,364,303 1,335,425
Infrastructure 94,153,615 91,884,086
Right-to-use lease asset 377,125 228,692
Total Capital Assets 327,980,077 315,435,714
Less:accumulated depreciation/amortization 112,777,056 109,483,656
Primary Government-Total Net Capital Assets $ 215,203,021 $ 205,952,058
Component Units
Land $ 2,103,162 $ 2,103,162
Construction in progress 328,452 139,982
Buildings 14,363,629 14,356,309
Improvements other than buildings 2,889,774 2,557,247
Machinery and equipment 6,726,939 6,513,966
Infrastructure 6,605,408 5,683,886
Total Capital Assets 33,017,364 31,354,552
Less:accumulated depreciation 17,986,206 17,130,590
Component Units-Total Net Capital Assets $ 15,031,158 $ 14,223,962
-15-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2023
CAPITAL ASSET AND DEBT ADMINISTRATION (continued)
Capital Assets (continued)
In 2023, the primary government's capital asset acquisitions were as follows:
• Land of$5,012,552
• Land development rights of$2,084,419.
• Construction in progress of$1,361,700.
• Buildings of$584,628.
• Machinery and equipment of$1,266,009.
• Software of$28,878.
• Infrastructure of$2,269,529.
• Right-to-use lease asset of$148,433.
The capital program is a long-range financing guide and not a definitive plan. Each appropriation must be
authorized by Town Board resolution before being undertaken. Each may be financed by issuance of general
obligation bonds, which, at times, are preceded by issuance of bond anticipation notes for various periods of
time depending on the period of probable usefulness of the purpose of expenditure. The Town's three-year
capital plan is summarized below:
2024 2025 2026
Land/development rights
General Fund
Machinery and equipment
General Fund $ 509,335 $ 237,950 $ 220,000
Highway Fund 638,000 845,000
Nonmajor Funds 210,000 30,000
Buildings and improvements
General Fund 25,000
Infrastructure
General Fund 587,000 390,000 390,000
Highway Fund 1,500,000 1,000,000 1,250,000
Nonmajor Funds 36,000
Intangible-software
General Fund 5,500 5,500 5,500
$ 3,510,835 $ 2,508,450 $ 1,865,500
Additional information on the Town's capital assets can be found in Note CA to the financial statements.
Debt
At December 31, 2023, the Town had approximately $31 million in long-term general obligation bonds and
bond anticipation notes (short-term and long-term)outstanding.
Outstanding Debt Primary Government
Governmental Activities
2023 2022
General obligation bonds payable* $ 25,405,000 $ 19,830,000
Bond anticipation notes 5,345,000 11,370,000
$ 30,750,000 $ 31,200,000
*Does not include the bond premium as presented in the Statement of Net Position.
The Town's bond credit rating from Moody's Investors Services was Aaa as of December 31,2023.
-16-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2023
CAPITAL ASSET AND DEBT ADMINISTRATION (continued)
Debt(continued)
Debt Limit - The Town has the power to contract indebtedness for any Town purpose so long as the principal
amount thereof, subject to certain limited exceptions, shall not exceed seven percent of the average full
valuation of taxable real estate of the Town, and subject to certain enumerated exclusions and deductions
such as water and certain sewer facilities and cash or appropriations for current debt service.
The constitutional method for determining full valuation is calculated by taking the assessed valuation of
taxable real estate as shown upon the latest completed assessment roll and dividing the same by the
equalization rate as determined by the State Board of Equalization and Assessment. The State Legislature is
required to prescribe the manner by which such ratio shall be determined. Average full valuation is determined
by taking the sum of the full valuation of the last completed assessment roll and the four preceding
assessment rolls and dividing such sum by five. The percentage of debt contracting power exhausted at
December 31, 2023 was 2.97%.
Additional information on the Town's debt activity can be found in Note C.5 to the financial statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
Property Tax
The Town has adopted a budget for the 2024 fiscal year which factors in inflation and other adjustments to
revenues and expenditures as well as prior year positive and negative fund balances. The 2024 budget
includes an overall increase in real property tax revenues from the prior year of approximately 2.2% for the
governmental funds.
In June 2011, New York State enacted Chapter 97, Laws of 2011 Real Property Tax Levy Cap and Mandate
Relief Provisions, which includes a 2% property tax cap for municipalities that affects the Town and its
municipal component units. Beginning in 2012, no local government is authorized to increase its property tax
levy by more than 2% or the rate of inflation (whichever is less). Local governments can exceed the tax levy
limit by a 60% vote of the governing body, or local law. There are permitted exceptions and adjustments. The
Town continuously evaluates the effect of the cap on future year's budgets.
State Aid and Local Assistance
The Town receives financial assistance from New York State and from Suffolk County. During 2023, financial
assistance included state aid consisting of mortgage tax of $1,809,333 and consolidated highway and other
NYS Department of Transportation aid of $1,113,720. State aid per capita was $88,328, and other State aid
was $202,349. County sales tax was $1,759,073. Additionally, if the State should not adopt its budget in a
timely manner, municipalities and school districts in the State, including the Town, may be affected by a delay
in the payment of state aid. The State is not constitutionally obligated to maintain or continue state aid to the
Town. The Town's 2024 budget included similar amounts for this financial assistance.
CONTACTING THE TOWN'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and creditors with a general
overview of the Town's finances and to show the Town's accountability for the money it receives. If you have
questions about this report or need additional financial information, contact the Town, Office of the Town
Comptroller, Southold, New York.
-17-
BASIC FINANCIAL
STATEMENTS
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF NET POSITION
December 31, 2023
Primary Government Nonmajor
Governmental Business-Type Component
Activities Activities Total Units
ASSETS
Current Assets:
Cash and investments $ 86,257,959 $ 161,432 $ 86,419,391 $ 2,470,270
Accounts receivable 481,344 481,344 62,211
State and federal aid receivables 913,680 913,680
Due from fiduciary funds 750 750
Due from other governments 1,603,059 1,603,059
Loans receivable 250,000 250,000
Leases receivable 63,272 63,272
Due from primary government -0- 757,860
Inventory of material and supplies 219,303 219,303
Prepaids 1,670,162 1,670,162 149,080
Total Current Assets 91,459,529 161,432 91,620,961 3,439,421
Noncurrent Assets:
Leases receivable 2,018,948 2,018,948
Non-depreciable capital assets 174,841,539 174,841,539 2,431,614
Depreciable capital assets,net of depreciation/amortization 40,361,482 40,361,482 12,599,544
Total Noncurrent Assets 217,221,969 -0- 217,221,969 15,031,158
Total Assets 308,681,498 161,432 308,842,930 18,470,579
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refundings 862,460 862,460
Pensions 15,339,473 15,339,473 845,535
Other postemployment benefits 3,099,015 3,099,015 93,136
Total Deferred Outflows of Resources 19,300,948 -0- 19,300,948 938,671
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities 1,877,198 1,800 1,878,998 673,048
Accrued interest payable 341,563 341,563 18,340
Bond anticipation notes payable -0- 450,000
Due to component units 757,860 757,860
Due to other governments -0- 33,258
Unearned revenue 2,539,613 2,539,613
Noncurrent liabilities due within one year:
General obligation bonds payable 2,750,130 2,750,130 39,869
Bond anticipation notes payable 320,000 320,000
Leases payable 52,308 52,308
Compensated absences 898,670 898,670 88,447
Claims and judgments payable 59,805 59,805
Estimated liability for landfill closure and post closure care costs 19,394 19,394
Other postemployment benefits payable 3,099,015 3,099,015
Total Current Liabilities 12,715,556 1,800 12,717,356 1,302,962
Noncurrent Liabilities:
General obligation bonds payable,inclusive of premiums 24,046,216 24,046,216 1,080,131
Bond anticipation notes payable 5,025,000 5,025,000
Leases payable 235,368 235,368
Compensated absences 8,328,739 8,328,739 265,341
Claims and judgments payable 400,195 400,195
Estimated liability for landfill closure and post closure care costs 256,126 256,126
Net pension liability 19,473,733 19,473,733 1,047,126
Total OPEB liability 90,964,099 90,964,099 659,071
Total Noncurrent Liabilities 148,729,476 -0- 148,729,476 3,051,669
Total Liabilities 161,445,032 1,800 161,446,832 4,354,631
DEFERRED INFLOWS OF RESOURCES
Lease related 1,997,377 1,997,377
Unearned revenue from real property taxes 8,724,137 8,724,137 757,860
Pensions 1,086,762 1,086,762 100,081
Other postemployment benefits 18,024,449 18,024,449 36,403
Total Deferred Inflows of Resources 29,832,725 -0- 29,832,725 894,344
NET POSITION
Net Investment in capital assets 187,909,885 187,909,885 13,461,158
Restricted:
Community preservation 32,613,554 32,613,554
Affordable housing 1,233,809 1,233,809
Grant restrictions -0- 7,500
Unrestricted(deficit) (85,052,559) 159,632 (84,892,927) 691,617
Total Net Position $ 136.704.689 $ 159.632 $ 136,864,321 $ 14,160,275
The notes to the financial statements are an integral part of this statement.
-18-
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF ACTIVITIES
Year Ended December 31, 2023
Net Revenue and
Program Revenues Changes in Net Position
Operating Capital Primary Government
Charges for Grants and Grants and Governmental Business-type Component
Function/Program Expenses Services Contributions Contributions Activities Activities Total Units
PRIMARY GOVERNMENT
Government Activities:
General government support $ 13,485,016 $ 532,558 $ 355,388 $ 193,473 $ (12,403,597) $ (12,403,597)
Public safety 23,636,418 1,161,488 205,688 (22,269,242) (22,269,242)
Public health 43,300 5,000 (38,300) (38,300)
Transportation 7,069,399 191,251 877 1,580,455 (5,296,816) (5,296,816)
Economic assistance and opportunity 2,306,038 153,795 292,074 (1,860,169) (1,860,169)
Culture and recreation 762,405 314,919 (447,486) (447,486)
Home and community services 8,963,992 3,422,026 42,228 18,350 (5,481,388) (5,481,388)
Interest on debt 1,122,566 (1,122,566) (1,122,566)
Total governmental activities 57,389,134 5,776,037 901,255 1,792,278 (48,919,564) (48,919,564)
Business-type Activities
Economic assistance and opportunity 21,600 11,613 $ (9,987) (9,987)
Total business-type activities 21,600 11,613 -0- -0- -0- (9,987) (9,987)
Total primary government $ 57,410,734 $ 5,787,650 $ 901,255 $ 1,792,278 (48,919,564) (9,987) (48,929,551)
COMPONENT UNITS
General government support $ 175,938 $ (175,938)
Public health 79,726 (79,726)
Transportation 5,248,191 $ 3,584,625 $ 5,655 $ 100,511 (1,557,400)
Culture and recreation 1,458,721 129,366 (1,329,355)
Home and community services 1,088,842 48,723 (1,040,119)
Interest on debt 22,376 (22,376)
Total Component Units $ 8,073,794 $ 3,762,714 $ 5,655 $ 100,511 (4,204,914)
GENERAL REVENUES
Real property taxes 41,305,189 41,305,189 3,514,893
Other real property tax items 435,708 435,708
Non-property tax items 15,176,444 15,176,444
Interest earnings 2,609,288 3,318 2,612,606 48,370
State aid-unrestricted 1,808,050 1,808,050
Other 340,452 340,452 85,802
Total General Revenues 61,675,131 3,318 61,678,449 3,649,065
Change in Net Position 12,755,567 (6,669) 12,748,898 (555,849)
Net Position at Beginning ofYear,as restated 123,949,122 166,301 124,115,423 14,716,124
Net Position at End ofYear $ 136,704,689 $ 159,632 $ 136,864,321 $ 14,160,275
The notes to the financial statements are an integral part of this statement.
-19-
TOWN OF SOUTHOLD
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2023
MAJOR GOVERNMENTAL FUNDS
Non-Major
Capital Community Governmental
General Highway Projects Preservation Funds Totals
ASSETS
Cash and investments $ 37,273,484 $ 4,242,399 $ 5,435,269 $ 31,812,472 $ 7,494,335 $ 86,257,959
Accounts receivable 56,440 2,913 12,767 81,604 327,620 481,344
Due from other funds 723,549 1,338,508 1,772,451 830,163 4,664,671
Due from fiduciary funds 750 750
State and federal aid receivable 45,551 801,047 40,427 26,655 913,680
Due from other governments 626,150 732,848 244,061 1,603,059
Loans receivable 250,000 250,000
Leases receivable 2,082,220 2,082,220
Inventory of material and supplies 4,975 190,875 23,453 219,303
Prepaids 1,303,112 187,414 7,638 171,998 1,670,162
Total Assets $ 42,116,231 $ 6,763,156 $ 7,260,914 $ 32,634,562 $ 9,368,285 $ 98,143,148
LIABILITIES
Accounts payable and accrued
liabilities $ 738,048 $ 300,857 $ 359,159 $ 15,879 $ 463,255 $ 1,877,198
Claims and judgements 124 124
Due to other funds 3,098,208 811,006 710,328 5,129 40,000 4,664,671
Due to component units 757,860 757,860
Unearned revenue 2,110,421 16,813 6,984 405,395 2,539,613
Total Liabilities 6,704,661 1,128,676 1,076,471 21,008 908,650 9,839,466
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 408,069 408,069
Lease related 1,997,377 1,997,377
Unearned revenue from
real property taxes 6,670,863 1,337,958 715,316 8,724,137
Total Deferred Inflows of Resources 9,076,309 1,337,958 -0- -0- 715,316 11,129,583
FUND BALANCES
Nonspendable 1,445,626 378,289 7,638 195,451 2,027,004
Restricted 4,650,923 32,605,916 1,233,809 38,490,648
Committed 717,629 1,371,702 2,089,331
Assigned 2,572,948 3,918,233 1,533,520 4,943,357 12,968,058
Unassigned 21,599,058 21,599,058
Total Fund Balances 26,335,261 4,296,522 6,184,443 32,613,554 7,744,319 77,174,099
Total Liabilities,Deferred Inflows of
Resources and Fund Balances $ 42,116,231 $ 6,763,156 $ 7,260,914 $ 32,634,562 $ 9,368,285 $ 98,143,148
The notes to the financial statements are an integral part of this statement.
-20-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
STATEMENT OF NET POSITION
December 31, 2023
Total Fund Balances-Governmental Funds $ 77,174,099
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources and,
therefore, are not reported in the funds.
Capital assets- non-depreciable $ 174,841,539
Capital assets-depreciable/amortizable 153,138,538
Accumulated depreciation/amortization (112,777,056) 215,203,021
Deferred outflows of resources are included in the Statement of Net Position
Pensions 15,339,473
Other postemployment benefits 3,099,015 18,438,488
Long-term liabilities applicable to the Town's governmental activities are not due
and payable in the current period, and accordingly, are not reported in the
funds. However, these liabilities are included in the Statement of Net Position:
Bond anticipation notes payable (5,345,000)
General obligation bonds payable (25,405,000)
Leases payable (287,676)
Compensated absences (9,227,409)
Claims and judgments payable (459,876)
Estimated liability for landfill closure and postclosure care costs (275,520)
Net pension liability (19,473,733)
Total OPEB liability (94,063,114) (154,537,328)
Governmental funds report the effect of premiums,discounts, and refundings
and similar items when debt is first issued,whereas these amounts are
deferred and amortized in the Statement of Activities:
Deferred charges on refundings 862,460
Premium on general obligation bonds (1,391,346) (528,886)
Revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds. 408,069
Deferred inflows of resources are included in the Statement of Net Position
Pensions (1,086,762)
Other postemployment benefits (18,024,449) (19,111,211)
Interest payable applicable to the Town's governmental activities are not due
and payable in the current period, and accordingly, are not reported in the
funds. However, these liabilities are included in the Statement of Net Position. (341,563)
Net Position of Governmental Activities $ 136,704,689
The notes to the financial statements are an integral part of this statement.
-21-
TOWN OF SOUTHOLD
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2023
MAJOR GOVERNMENTAL FUNDS
Non-Major
Capital Community Governmental
General Highway Projects Preservation Funds Totals
REVENUES
Real property taxes $ 31,031,438 $ 6,421,797 $ 3,851,954 $ 41,305,189
Other real property tax items 341,687 60,524 33,497 435,708
Non-property tax items 1,759,073 $ 11,401,403 2,015,968 15,176,444
Departmental income 460,247 3,762,604 4,222,851
Intergovernmental charges 264,494 264,494
Use of money and property 1,185,994 221,069 $ 133,412 775,300 142,744 2,458,519
Licenses and permits 521,868 162,070 223,830 907,768
Fines and forfeitures 368,222 368,222
Sale of property and compensation
for loss 172,781 8,199 27 304,794 485,801
Miscellaneous local sources 186,690 3,182 6,227 13,973 210,072
Interfund revenues 5,129 5,129
State aid 1,945,766 1,113,720 39,261 114,983 3,213,730
Federal aid 821,734 353,888 1,175,622
Total Revenues 39,065,123 7,990,561 172,673 12,182,957 10,818,235 70,229,549
EXPENDITURES
Current:
General government support 8,558,741 17,749 32,374 519,696 9,128,560
Public safety 10,972,152 1,780,530 12,752,682
Public health 43,300 43,300
Transportation 569,855 3,981,755 4,551,610
Economic assistance and
opportunity 1,374,421 1,374,421
Culture and recreation 460,048 460,048
Home and community services 452,870 6,807,949 4,632,971 11,893,790
Employee benefits 11,300,883 1,937,796 73,775 1,732,216 15,044,670
Capital Outlay 5,003,720 5,003,720
Debt Service:
Principal 819,293 318,222 8,010,000 1,661,515 300,388 11,109,418
Interest 401,382 89,667 411,571 63,892 966,512
Total Expenditures 34,952,945 6,345,189 13,013,720 8,987,184 9,029,693 72,328,731
Excess(Deficiency)of Revenues
Over(Under)Expenditures 4,112,178 1,645,372 (12,841,047) 3,195,773 1,788,542 (2,099,182)
OTHER FINANCING SOURCES(USES):
Debt proceeds 11,610,000 11,610,000
Lease proceeds 148,433 148,433
Transfers in 787,398 2,700,728 32,515 3,520,641
Transfers out (1,731,393) (1,516,686) (147,562) (125,000) (3,520,641)
Total Other Financing
Sources(Uses) (943,995) (1,516,686) 14,311,599 -0- (92,485) 11,758,433
Net Change in Fund Balance 3,168,183 128,686 1,470,552 3,195,773 1,696,057 9,659,251
Fund Balances at Beginning of Year 23,167,078 4,167,836 4,713,891 29,417,781 6,048,262 67,514,848
Fund Balances at End of Year $ 26,335,261 $ 4,296,522 $ 6,184,443 $ 32,613,554 $ 7,744,319 $ 77,174,099
The notes to the financial statements are an integral part of this statement.
-22-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2023
Net Change in Fund Balance-Total Governmental Funds $ 9,659,251
Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in
the Statement of Activities,the cost of those assets is allocated over their
estimated useful lives and reported as depreciation/amortization expense.The
amount by which capital outlay exceeds depreciation in the current period is:
Capital asset additions $ 12,723,788
Depreciation/amortization expense (3,462,692)
Loss on dispositions (10,133) 9,250,963
Revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds. (89,611)
Net change in deferred outflows of resources not reported in the governmental
fund statements:
Deferred charges on refundings (127,882)
Pension related amounts (141,257)
Other postemployment benefits (10,227,099) (10,496,238)
Net change in deferred inflows of resources not reported in the governmental
fund statements:
Pension related amounts 18,882,454
Other postemployment benefits (17,297,176) 1,585,278
Premiums on bond issuances recognized in governmental fund statements
when issued and capitalized and amortized in the Statement of Activities.
Premiums issued (173,872)
Premiums amortized 186,644 12,772
Bond and other debt proceeds provide current financial resources to governmental funds, but
issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of
bond and other debt principal is an expenditure in the governmental funds, but the repayment
reduces long-term liabilities in the Statement of Net Position.Also,governmental funds
report the effect of premiums,discounts and similar items when debt is first issued,whereas
these amounts are deferred and amortized in the Statement of Activities.
Issuance of long-term bond anticipation notes (3,600,000)
Leases issued (148,433)
Bonds issued (8,010,000)
Repayment of bond principal 2,435,000
Repayment of BAN principal 8,625,000
Repayment of lease principal 49,418 (649,015)
Some expenses reported in the Statement of Activities do not require the use of current
financial resources and therefore,are not reported as expenditures in the governmental
funds:
Compensated absences 47,994
Claims and judgments payable 33,899
Estimated liability for landfill closure and postclosure care costs 33,170
Changes in net pension asset/(liability)proportionate share (21,764,288)
Changes in OPEB liabilities 25,137,859
Accrued interest payable (6,467) 3,482,167
Change in Net Position of Governmental Activities $ 12,755,567
The notes to the financial statements are an integral part of this statement.
-23-
TOWN OF SOUTHOLD
STATEMENT OF NET POSITION
PROPRIETARY FUND
December 31, 2023
Southold Local
Development
Corporation
ASSETS
Current assets:
Cash and cash equivalents $ 161,432
Total assets 161,432
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 1,800
Total liabilities 1,800
NET POSITION
Unrestricted 159,632
Total net position $ 159,632
The notes to the financial statements are an integral part of this statement.
-24-
TOWN OF SOUTHOLD
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
PROPRIETARY FUND
Year Ended December 31, 2023
Southold Local
Development
Corporation
OPERATING REVENUES
Charges for sales and services:
Administrative fees $ 11,613
Total operating revenues 11,613
OPERATING EXPENSES
Cost of sales and services:
Consultant fees 19,200
Professional fees 1,800
Website 600
Total operating expenses 21,600
Operating (loss) income (9,987)
NON-OPERATING REVENUE (EXPENSE)
Interest income 3,318
Total non-operating revenue 3,318
Change in net position (6,669)
Total net position - beginning of year (As restated) 166,301
Total net position -ending $ 159,632
The notes to the financial statements are an integral part of this statement.
-25-
TOWN OF SOUTHOLD
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
Year Ended December 31,2023
Southold Local
Development
Corporation
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users $ 11,613
Cash payments for contractual expenses (21,550)
Net cash from operating activities (9,937)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income 3,318
Net cash from investing activities 3,318
Net increase (decrease) in cash and cash equivalents (6,619)
Cash and cash equivalents at January 1, 2023 (As restated) 168,051
Cash and cash equivalents at December 31, 2023 $ 161,432
Reconciliation of operating income (loss) to net cash provided by operating activities:
Operating income (loss) $ (9,987)
Increase (decrease) in accounts payable and accrued liabilities 50
Net cash from operating activities $ (9,937)
The notes to the financial statements are an integral part of this statement.
-26-
TOWN OF SOUTHOLD
STATEMENT OF FIDUCIARY NET POSITION
December 31, 2023
Custodial Fund
ASSETS
Cash and cash equivalents $ 22,909,869
Total Assets $ 22,909,869
LIABILITIES
Due to other governments $ 22,896,386
Due to governmental funds 750
Other liabilities 12,733
Total Liabilities $ 22,909,869
The notes to the financial statements are an integral part of this statement.
-27-
TOWN OF SOUTHOLD
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
Year Ended December 31, 2023
Custodial Fund
ADDITIONS
Real property taxes collected for other governments $ 113,680,010
Bail collected 10,625
Total Additions 113,690,635
DEDUCTIONS
Payments of real property taxes to other governments 113,680,010
Bail returned or remitted 10,625
Total Deductions 113,690,635
Change in Fiduciary Net Position -0-
Net Position - Beginning of year -0-
Net Position - End of year $ -0-
The notes to the financial statements are an integral part of this statement.
-28-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Town of Southold (the "Town"), which was established in 1640, is governed by Town Law and other
general laws of the State of New York and various local laws. The Town Board is the legislative body
responsible for overall operations. The Town Board consists of the Supervisor who is elected for a term of four
years and five board members who are elected for terms of four years. The Town Board appoints the Town
Attorney and Town Comptroller. The Town Clerk, Receiver of Taxes, Superintendent of Highways, Justices
and Town Trustees are all elected and serve for four years, respectively. The Town provides a full range of
municipal services, including public safety, transportation, home and community services, public works and
road maintenance, recreation and parks, and general and administrative services.
The financial statements of the Town have been prepared in conformity with accounting principles generally
accepted in the United States of America ("GAAP") as applied to governmental units. The Governmental
Accounting Standards Board ("GASB") is the accepted standard setting body for establishing governmental
accounting and financial reporting principles.
The more significant of the government's accounting policies are described below.
1. REPORTING ENTITY
The financial reporting entity consists of: (a) the primary government, which is the Town;
(b)organizations for which the primary government is financially accountable; and (c)other organizations
for which the nature and significance of their relationship with the primary government are such that
exclusion would cause the reporting entity's financial statements to be misleading or incomplete.
The decision to include a potential component unit in the Town's reporting entity is based on several
criteria including legal standing, dependency and financial accountability. The current guidance also
clarifies the status as a major or nonmajor component unit. Based on the application of these criteria, the
following is a summary of certain entities considered in determining the Town's reporting entity.
Blended Component Unit.
Though a legally separate entity, this component unit is, in substance, part of the Town's operations. The
blended component unit serves or benefits the primary government almost exclusively. Financial
information from this unit is combined with that of the primary government. The Town's only blended
component unit is the Southold Local Development Corporation.
a) Southold Local Development Corporation ("SLDC") is a not-for-profit corporation incorporated on
June 27, 2014 under New York Law. SLDC's purpose is to promote and conduct economic
development activities in the Town, and to finance facilities for not-for-profit corporations so that they
may acquire, improve, maintain, equip, and furnish such projects. The SLCD can enter into contracts,
sue and be sued, and acquire and own real and personal property, each on its own behalf and in its
own name. The SLDC can incur debt and issue bonds and notes in its own name and, unless the
Town elects to guarantee principal and interest on, or only the interest on, indebtedness issued by the
SLDC, all indebtedness of the SLDC is a liability only of the SLDC and not the Town.
The inclusion of the SLDC as a blended component unit of the Town is required because the SLDC is
organized as a nonprofit corporation with the Town as the sole corporate member as identified in the
SLDC's articles of incorporation. In addition, the Town appoints the voting majority of the Board of the
SLDC.The activities of the SLDC are reported as a proprietary fund of the Town.
-29-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1. REPORTING ENTITY(continued)
Discretely Presented Component Units:
The following entities are discretely presented component units of the Town of Southold:
a) Fishers Island Ferry District was established in 1947 by a special act of legislation within the State of
New York, known as the Ferry District Enabling Act. The Board of Commissioners is the legislative
body responsible for the overall operations. The Board of Commissioners consists of five members,
all of whom are elected by the residents of the District. The primary function of the District is to
provide ferry operations and services to District residents. Special districts cannot issue bonded debt
without the approval and the backing of the full faith and credit of the Town. The Town issues
indebtedness on behalf of the District which is responsible for the payment of annual debt service on
the obligations. Budgets and tax rates are not approved by the Town. Tax levies of the District are
collected by the Town Receiver of Taxes. This District is included in the Town's reporting entity since
the primary government issues debt on behalf of the District as these districts cannot issue bonded
debt without the approval and the backing of the full faith and credit of the Town.
b) Fishers Island Waste Management District was established in 1952 and is governed by the laws of
New York State. The Board of Commissioners is the legislative body responsible for the overall
operations. The Board of Commissioners consists of five members, all of whom are elected by the
residents of the District. The primary function of the District is to provide waste management and
disposal services to District residents. Special districts cannot issue bonded debt without the approval
and the backing of the full faith and credit of the Town. The Town issues indebtedness on behalf of
the District which is responsible for the payment of annual debt service on the obligations. Tax levies
of the District are collected by the Town Receiver of Taxes. This District is included in the Town's
reporting entity since the primary government issues debt on behalf of the District as these districts
cannot issue bonded debt without the approval and the backing of the full faith and credit of the Town.
c) Cutchogue-New Suffolk Park District was established in 1953 and is governed by the laws of New
York State. The Board of Commissioners is the legislative body responsible for the overall operations.
The Board of Commissioners consists of three members, all of whom are elected by the residents of
the District. The primary function of the District is to maintain and operate the specific private beaches
of residents who reside within the park district. Special districts cannot issue bonded debt without the
approval and the backing of the full faith and credit of the Town. The Town issues indebtedness on
behalf of the District which is responsible for the payment of annual debt service on the obligations.
Tax levies of the District are collected by the Town Receiver of Taxes. This District is included in the
Town's reporting entity since the primary government issues debt on behalf of the District as these
districts cannot issue bonded debt without the approval and the backing of the full faith and credit of
the Town.
d) Southold Park District was established in 1907 and is governed by the laws of New York State. The
Board of Commissioners is the legislative body responsible for the overall operations. The Board of
Commissioners consists of three members, all of whom are elected by the residents of the District.
The primary function of the District is to maintain and operate the specific private beaches of residents
who reside within the park district. Special districts cannot issue bonded debt without the approval
and the backing of the full faith and credit of the Town. The Town issues indebtedness on behalf of
the District which is responsible for the payment of annual debt service on the obligations. Tax levies
of the District are collected by the Town Receiver of Taxes. This District is included in the Town's
reporting entity since the primary government issues debt on behalf of the District as these districts
cannot issue bonded debt without the approval and the backing of the full faith and credit of the Town.
-30-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1. REPORTING ENTITY(continued)
Discretely Presented Component Units(continued):
e) Orient-East Marion Park District was established in 1969 and is governed by the laws of New York
State. The Board of Commissioners is the legislative body responsible for the overall operations. The
Board of Commissioners consists of three members, all of whom are elected by the residents of the
District. The primary function of the District is to maintain and operate the specific private beaches of
residents who reside within the park district. Special districts cannot issue bonded debt without the
approval and the backing of the full faith and credit of the Town. The Town issues indebtedness on
behalf of the District which is responsible for the payment of annual debt service on the obligations.
Tax levies of the District are collected by the Town Receiver of Taxes. This District is included in the
Town's reporting entity since the primary government issues debt on behalf of the District as these
districts cannot issue bonded debt without the approval and the backing of the full faith and credit of
the Town.
f) Mattituck Park District was established in 1941 and is governed by the laws of New York State. The
Board of Commissioners is the legislative body responsible for the overall operations. The Board of
Commissioners consists of three members, all of whom are elected by the residents of the District.
The primary function of the District is to maintain and operate the specific private beaches of residents
who reside within the park district. Special districts cannot issue bonded debt without the approval
and the backing of the full faith and credit of the Town. The Town issues indebtedness on behalf of
the District which is responsible for the payment of annual debt service on the obligations. Tax levies
of the District are collected by the Town Receiver of Taxes. This District is included in the Town's
reporting entity since the primary government issues debt on behalf of the District as these districts
cannot issue bonded debt without the approval and the backing of the full faith and credit of the Town.
g) Orient Mosquito District was established in 1916 and is governed by the laws of New York State. The
Board of Commissioners is the legislative body responsible for the overall operations. The Board of
Commissioners consists of five members, all of whom are elected by the residents of the District. The
primary function of the District is to provide pest control services to District residents. Special districts
cannot issue bonded debt without the approval and the backing of the full faith and credit of the Town.
The Town issues indebtedness on behalf of the District which is responsible for the payment of
annual debt service on the obligations. Tax levies of the District are collected by the Town Receiver of
Taxes. This District is included in the Town's reporting entity since the primary government issues
debt on behalf of the District as these districts cannot issue bonded debt without the approval and the
backing of the full faith and credit of the Town.
All of the Town's discretely presented component units are considered nonmajor.
2. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The Town's basic financial statements include both government-wide (reporting the Town as a whole)
and fund financial statements (reporting the Town's major funds).
Government-wide Financial Statements
The government-wide financial statements (i.e. the Statement of Net Position and the Statement of
Activities) report information on all of the non-fiduciary activities of the Town as a whole with separate
columns for the primary governmental activities, as well as the discretely presented component units.
For the most part, the effect of interfund activity has been eliminated from the government-wide
financial statements, except for interfund services provided and used.
-31-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (continued)
Government-wide Financial Statements (continued)
The government-wide Statement of Activities demonstrates the degree to which the direct expenses of
a given function are offset by program revenue. Direct expenses are those that are clearly identifiable
with a specific function. Program revenues include (1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function,
(2) grants and contributions that are restricted to meeting the operation and capital requirements of a
particular function, or (3) interest earned on grants or capital projects that is required to be used to
support a particular program or project. Taxes and other items not properly included among program
revenues are reported as general revenues. The Town does not allocate indirect expenses to specific
functions in the Statement of Activities.
Fund Financial Statements
The accounts of the Town are organized on the basis of funds, each of which is considered a separate
accounting entity. The operations of each fund are accounted for with a separate set of self-balancing
accounts that comprise its assets, liabilities, deferred inflows of resources, fund balances, revenues, and
expenditures, which are segregated for the purpose of carrying on specific activities or attaining certain
objectives in accordance with special regulations, restrictions or limitations. The various funds are
presented by type in the fund financial statements. Certain funds of the Town are utilized to account for
resources derived from and/or expenditures applicable to an area less than the entire Town. The focus of
the governmental funds financial statements is on the major funds. Accordingly, the Town maintains the
following fund types:
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 upon the determination of financial position and changes in financial position. Governmental
funds are further classified as major and nonmajor funds.
The Town reports the following major governmental funds:
General Fund -the principal operating fund of the Town. This fund is used to account for all financial
resources not accounted for and reported in another fund.
Special Revenue Funds - used to account for and report the proceeds of specific revenue sources
that are restricted, committed, or assigned to expenditures for specified purposes other than debt
service or capital projects.
Highway Fund - used to account for revenues and expenditures for highway purposes
provided to the Town and to the area of the Town located outside of the Village of Greenport.
The major areas of expenditures are repairs and improvements to roadways, machinery, and
snow removal. The major source of revenue is real property taxes.
Community Preservation Fund - used to account for and report financial resources that are
restricted for the purchase of land and land development rights. The major source of revenue
is the transfer tax. See Note F.
Capital Projects Fund - used to account for and report financial resources that are restricted,
committed, or assigned to expenditures for capital outlays, including the acquisition or construction
of major capital facilities and other capital assets.
-32-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (continued)
Fund Financial Statements (continued)
Additionally, the Town accounts for and reports the following nonmajor funds:
Special Revenue funds include the following:
General Fund Part Town - used to account for revenues and expenditures for certain services
provided to the area of the Town located outside of the Village of Greenport. The major source
of revenue is real property taxes, non-property tax items and building permits.
Special Grant Fund - used to account for federal aid for the Community Development Block
Grant Program.
Special District Funds - used to account for taxes or other revenues, which are raised or
received to provide special services to areas that encompass less than the whole town. The
Special District Funds consist of a number of separate districts, which are administered by the
Town Board as follows: East-West Fire Protection District, Southold Wastewater District,
Fishers Island Sewer District, and the Solid Waste Management District.
Community Housing and Affordable Housing Funds - used to account for revenues and
expenditures relating to the Town's community housing and affordable housing programs.
Proprietary Fund— is used to account for ongoing activities which are similar to those often found in
the private sector. Proprietary fund financial statements include a Statement of Net Position, a
Statement of Revenues, Expenses and Changes in Fund Net Position and a Statement of Cash
Flows for the proprietary fund.
The proprietary fund is accounted for using the "economic resources" measurement focus and the
accrual basis of accounting. Accordingly, all assets, deferred outflows, liabilities (whether current or
non-current) and deferred inflows are included on the Statement of Net Position. The State of
Revenues, Expenses and Changes in Fund Net Position presents increases (revenues) and
decreases (expenses)in net position.
The Town has presented the following proprietary fund:
Southold Local Development Corporation — is used to account for the activities of the blended
component SLDC.
Fiduciary Fund (Not included in government-wide financial statements) — is used to account for
assets held by the Town on behalf of others.
The Town has presented the following fiduciary fund:
Custodial Fund - is used primarily to account for amounts due to other governments for general
and school taxes collected, as well as amounts due to others for bail.
-33-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION
The accounting and financial reporting treatment is determined by the applicable measurement focus
and basis of accounting. Measurement focus refers to what is being measured, whereas the basis of
accounting refers to when revenues and expenditures are recognized in the accounts and reported in
the financial statements. Basis of accounting relates to the timing of the measurement made,
regardless of the measurement focus applied.
The government-wide statements are reported using the economic resources measurement focus and the
accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when
earned and expenses are recorded when the liability is incurred, regardless of the timing of related cash
flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed by the provider have
been met.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered available when they are collectible within the current
period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Town
generally considers revenues to be available if they are collected within 60 days after the year end. In
certain circumstances this application of the Town's normal availability period for a given revenue source
might distort revenue trends from one year to the next. In such unusual circumstances, revenues may be
considered available if received beyond 60 days. However, to the extent the revenue remains uncollected
after one year the Town would classify the fund balance as nonspendable.
Revenues susceptible to accrual include Suffolk County local assistance at year end on behalf of the
Town, franchise fees, mortgage taxes and certain charges for services and intergovernmental revenues.
Permits, fees, and other similar revenues are not susceptible to accrual because generally they are not
measurable until they are received in cash. In those instances where expenditures are the prime factor in
determining eligibility for state and federal grants, revenues are recognized when the expenditure is
incurred. In the governmental funds, the issuance of long-term debt is reported as other financing sources
upon receipt of the proceeds. Expenditures generally are recorded when a liability is incurred, as under
accrual accounting. However, debt service expenditures, as well as expenditures related to compensated
absences, claims and judgments, landfill closure and postclosure care costs, other postemployment
benefits payable and the proportionate share of the net pension liability are recorded when payment is
due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of
long-term debt and acquisitions under leases are reported as other financing sources.
The proprietary fund distinguishes operating revenues and expenses from non-operating items. Operating
revenues generally result from providing and delivering services and/or goods in connection with the
proprietary fund's principal ongoing operations. Operating expenses include the cost of personnel
(salaries and benefits), materials and supplies, direct costs, equipment and depreciation of capital assets.
All revenues and expenses not meeting this definition are reported as non-operating revenues (such as
interest earnings)and expenses (such as interest expense).
The custodial fund utilizes the accrual basis of accounting.
Because governmental fund statements are presented using a measurement focus and a basis of
accounting different from that used in the government-wide statements governmental column, a
reconciliation is presented that briefly explains the adjustment necessary to reconcile ending net position
and the change in net position.
-34-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET
POSITION/FUND BALANCE
CASH AND INVESTMENTS
Cash consists of funds deposited in demand accounts, time deposit accounts and certificates of deposit
with maturities of less than three months. State statutes govern the Town's investment policies. The
Town's investments are governed by a formal investment policy. The Town's monies must be
deposited in FDIC-insured commercial banks or trust companies located within the State. The Town is
authorized to use demand accounts and certificates of deposit. Permissible investments include
obligations of the U.S. Treasury, U.S. Agencies and investments made by the Cooperative Liquid
Asset Security System ("CLASS").
Collateral is required for demand deposits and time deposit accounts at 100% of all deposits not covered
by federal deposit insurance. Obligations that may be pledged as collateral include obligations of the
United States and its agencies, obligations of the State and its municipalities, and school districts. The
Town's collateral agreements are based on the Town's available balance.
RECEIVABLES
Receivables include amounts due from federal, State and other governments or entities for services
provided by the Town. Receivables are recorded, and revenues recognized as earned or as specific
program expenditures are incurred.
DUE FROM/TO OTHER FUNDS
During the course of operations, the government has activity between funds for various purposes. Any
residual balance outstanding at year-end is reported as due from/due to other funds. While these
balances are reported in fund financial statements, certain eliminations are made in the preparation of the
government-wide financial statements.
INVENTORY AND PREPAID ITEMS
Inventory in the General and Special Revenue Funds is valued at cost, using weighted average cost
method. Inventory in these funds is accounted for under the consumption method.
Certain payments to vendors reflect costs applicable to future accounting periods and are reported as
prepaid items in both the government-wide and fund financial statements. Prepaids represent health
insurance and retirement benefits that will benefit a future period.
In governmental funds, amounts reported as inventories and prepaid items are equally offset by
nonspendable fund balance amounts, indicating that they do not constitute "available spendable
resources"even though they are a component of assets.
LEASES RECEIVABLE
The Town is a lessor for noncancellable leases of various cell towers. The Town recognizes a lease
receivable and a deferred inflow of resources in the financial statements. At the commencement of a
lease, the Town initially measures the lease receivable at the present value payments expected to be
received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of
lease payments received. The deferred inflow of resources is initially measured at the initial amount of the
lease receivable. Subsequently, the deferred inflow of resources is recognized as revenue over the life of
the lease term. The Town monitors changes in circumstances that would require remeasurement of its
leases, and will remeasure the leases receivable and deferred inflows of resources if certain changes
occur that are expected to significantly affect the amount of the lease receivable.
-35-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET
POSITION/FUND BALANCE (continued)
CAPITAL ASSETS
Capital assets purchased or acquired with an original cost of$5,000 or more are reported at historical
cost or estimated historical cost. Contributed assets are reported at acquisition value as of the date of
donation. Additions, improvements and other capital outlays that significantly extend the useful life of
an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred.
Depreciation and amortization on all assets is provided on the straight-line basis over the following
estimated useful lives:
Buildings 10-40 years
Improvements other than buildings 20 years
Machinery and equipment 5-10 years
Software 5-10 years
Infrastructure 20-30 years
Right-to-use assets 4-10 years
Infrastructure assets, consisting of certain improvements other than buildings including roads, curbs,
sidewalks, bridges, drainage and street lighting are capitalized along with other capital assets.
Intangible assets lack physical substance, are nonfinancial in nature, and have an estimated useful life
extending beyond a single reporting period.
In the fund financial statements, capital assets are recorded as capital outlay expenditures in the
governmental fund upon acquisition.
DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred
outflows of resources. Deferred outflows of resources represent a consumption of net assets that applies
to a future period(s) and so will not be recognized as an outflow of resources (expenditure/expense) until
that time. Deferred outflows of resources consist of deferred charges on refunding, pension related
amounts, and other postemployment benefits related amounts. The deferred charges on refunding stem
from advanced refunding of debt. The difference between the cost of securities placed in a trust for future
payment of refunded debt and the net carrying value of that debt is deferred and amortized as a
component of interest expense over the shorter of the term of the refunding issue or the original term of
the refunded debt. The amounts related to pensions consists of differences between the pension plans
expected and actual experience, changes of assumptions, changes in proportion and differences between
employer contribution and proportionate share of contributions, and contributions made subsequent to the
measurement date. The amounts related to other postemployment benefits consists of differences
between actual and expected experience, changes of assumptions, and contributions made subsequent
to the measurement date.
-36-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND
NET/POSITION/FUND BALANCE (continued)
DEFERRED OUTFLOWS/INFLOWS OF RESOURCES (continued)
In addition to liabilities, the Statement of Net Position and balance sheet will sometimes report a separate
section for deferred inflows of resources. This separate financial statement element, deferred inflows of
resources, represents an acquisition of net assets that applies to a future period(s) and so will not be
recognized as an inflow of resources (revenue) until that time. The Town's deferred inflows of resources
consists of the following: unavailable revenue, unearned revenue from real property taxes and pension
related amounts. In the governmental funds, unavailable revenue represents amounts that do not meet
the availability criteria applicable to revenue recognition under the modified accrual basis of accounting.
These amounts are deferred and recognized as an inflow of resources in the period the amounts become
available. The unavailable revenue includes amounts for mortgage tax that relates to the current year but
does not meet the availability criteria. The unearned revenue relates to the collection of real estate taxes
for a future period and are accordingly reported as a deferred inflow in the government-wide Statement of
Net Position as well as the governmental Balance Sheet. In the Statement of Net Position, the Town
reports deferred inflows of resources associated with its pension and the amounts are derived from the
differences between expected and actual experience, changes of assumptions, net difference between
projected and actual investment earnings on pension plan investments, and changes in proportion and
differences between the Town's contributions and proportionate share of contributions.
Deferred inflows of resources also include deferred inflows relating to the leases receivable. These
amounts are deferred and are amortized to lease revenue in a systematic and rational manner over the
term of the lease.
UNEARNED REVENUE
Unearned revenues, reported as liabilities in the fund and government-wide financial statements, are
those which asset recognition criteria have been met, but which revenue recognition criteria have not
been met for exchange type transactions. Such amounts include collections in advance for fee income
relating to future periods.
PREMIUMS OF DEBT ISSUANCE
Premiums related to the issuance of long-term debt are amortized on a straight-line basis over the life of
the issue and are presented as part of the general obligation bonds payable in the non-current liabilities.
LONG-TERM OBLIGATIONS
In the government-wide financial statements, liabilities for long-term obligations consisting of general
obligation bonds, bond anticipation notes, leases, compensated absences, claims and judgments, liability
for landfill closure and postclosure costs, net pension liability, and other postemployment benefits payable
are recognized in the Statement of Net Position. Bond premiums or discounts are deferred and amortized
on a straight-line basis over the life of the bonds. Bonds payable are reported net of applicable bond
premium or discount. Bond issuance costs are expensed as incurred.
In the fund financial statements, long-term obligations are not reported as liabilities. Governmental funds
recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The
face amount of the debt issued is reported as other financing sources and the payment of principal and
interest is reported as expenditures. Premiums received on debt issuances are reported as other
financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs,
whether or not withheld from actual debt proceeds received, are reported as capital outlays.
-37-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET
POSITION/FUND BALANCE (continued)
LEASES
The Town is a lessee for noncancellable leases of equipment. The Town recognizes a lease liability and
an intangible right-to-use lease asset ("lease asset") in the government-wide financial statements. The
Town recognizes lease liabilities with an initial, individual value of$5,000 or more.
At the commencement of a lease, the Town initially measures the lease liability at the present value of
payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the
principal portion of lease payments made. The lease asset is initially measured as the initial amount of the
lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain
initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its useful life.
Key estimates and judgments related to leases include how the Town determines (1) the discount rate it
uses to discount the expected lease payments to present value, (2)lease term, and (3) lease payments.
The Town uses the interest rate charged by the lessor as the discount rate. When the interest rate
charged by the lessor is not provided, the Town generally uses its estimated incremental borrowing rate
as the discount rate for leases.
The lease term includes the noncancellable period of the lease. Lease payments included in the
measurement of the lease liability are comprised of fixed payments and purchase option price that the
Town is reasonably certain to exercise. The Town monitors changes in circumstances that would require
a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that
are expected to significantly affect the amount of the lease liability.
Right-to-use leased assets are reported with other capital assets and right-to-use lease liabilities are
reported with long-term liabilities on the Statement of Net Position.
INTERFUND TRANSACTIONS
Interfund transactions, exclusive of interfund services provided and used, have been eliminated from the
government-wide financial statements. In the funds statements, interfund transactions include:
a) Interfund Revenues
In the general fund, interfund revenues,which are quasi-external transactions, represent amounts
charged for services or facilities provided by the general fund. The amount paid by the fund
receiving the benefit of the service or facilities is reflected as an expenditure of that fund.
b) Transfers
Transfers primarily represent payments to the capital projects fund from the other funds for their
appropriate share of the capital project costs or related BAN debt service amounts.
NET POSITION AND FUND EQUITY CLASSIFICATIONS
In the government-wide statements and in the propriety fund statements, equity is classified as net
position and displayed in three components:
-38-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES,AND NET
POSITION/FUND BALANCE (continued)
NET POSITION AND FUND EQUITY CLASSIFICATIONS (continued)
a) Net investment in capital assets - Consists of capital assets including restricted capital assets,
net of accumulated depreciation and reduced by the outstanding balances of any bonds,
notes, or other borrowings that are attributable to the acquisition, construction, or improvement
of those assets. Accounts payable in the capital projects fund is considered capital related
debt and is used in the calculation of net investment in capital assets.
b) Restricted - Consists of net position with constraints placed on the use either by (1) external
groups such as creditors, grantors, contributors, or laws or regulations of other governments;
or (2) law through constitutional provisions or enabling legislation.
c) Unrestricted - All other net position that does not meet the definition of "restricted" or
"net investment in capital assets".
In the fund financial statements, governmental funds report aggregate amounts for five classifications
of fund balances based on the constraints imposed on the use of these resources; they are
(1) nonspendable, (2) restricted, (3)committed, (4)assigned, or (5) unassigned.
1) Nonspendable fund balance includes amounts that cannot be spent because they are either
(a) not in spendable form (i.e. prepaid items or inventories), or (b) will not convert to cash
within the current period (i.e. long-term receivables and financial assets held for resale), or
(c) legally or contractually required to be maintained intact (i.e. the principal of a permanent
fund).
The spendable portion of the fund balance comprises the remaining four classifications: restricted,
committed, assigned, and unassigned.
2) Restricted fund balance reflects the constraints imposed on resources either (a) externally by
creditors, grantors, contributors, or laws or regulation of other governments; or (b) imposed by
law through constitutional provisions or enabling legislation.
3) Committed fund balance reflects amounts that can only be used for specific purposes by a
government using its highest and most binding level of decision-making authority. The Town's
highest decision-making authority is the Town Board, who by adoption of a Town ordinance
prior to year-end, can commit fund balance. Those committed amounts cannot be used for
any other purpose unless the Town Board removes or changes the specified use by taking the
same type of action imposing the commitment.
4) Assigned fund balance reflects the amounts constrained by the Town's "intent" to be used for
specific purposes but are neither restricted nor committed. The Town Board has the authority
to assign amounts to be used for specific purposes. Assigned fund balances include all
remaining amounts (except negative balances) that are reported in governmental funds, other
than the general fund, that are not classified as nonspendable and are neither restricted nor
committed.
5) Unassigned fund balance is the residual classification for the general fund. It is also used to
report negative fund balances in other governmental funds.
-39-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET
POSITION/FUND BALANCE (continued)
NET POSITION AND FUND BALANCE FLOW ASSUMPTIONS
When outlays for a particular purpose can be funded from both restricted and unrestricted net position
resources it is the Town's policy to consider restricted - net position to have been depleted before
unrestricted - net position is applied.
When both restricted and unrestricted resources are available for use, it is the Town's default policy to
use restricted resources first, and then unrestricted resources -committed, assigned and unassigned -
in order as needed.
FUND BALANCE POLICIES
The Town has, by resolution, adopted a fund balance policy that states the Town must maintain a
minimum unassigned fund balance in the general fund equal to 10% of general fund expenditures. In
the event that the balance drops below the established minimum level, the Town's Board will develop
a plan to replenish the fund balance to the established minimum level within the current or ensuing
fiscal year.
5. REVENUES AND EXPENDITURES
REAL PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES
Real property taxes are levied annually no later than December 1st and are recognized as revenue
January 1st of the year for which they were levied. The Town has its own Assessor's Office whose
responsibilities are independent and distinct from those of the Receiver of Taxes ("Receiver'). The Town
assessment rolls are used for the levy of property taxes by the Town and the school districts, as well as by
the County of Suffolk, New York("County")and by special districts based upon a single tax bill.
The Town of Southold Receiver of Taxes collects all real property taxes for the Town, Suffolk County,
Town Special Districts and School Districts. These taxes are levied on December 1, and are due in two
installments, 50% on December 1 and 50% on May 10, payable without penalty to January 10 and May
31, respectively. Penalties are imposed thereafter at the rate of one-twelfth of the rate of interest
determined by the State Commissioner of Taxation and Finance, after which taxes are payable to the
County Treasurer. The Town retains the total amount of Town, Highway and Town Special Districts levies
from the amount collected, and forwards the balance collected to the County which assumes collection
responsibility. The Town and Town's Special Districts therefore realize annually the 100% collection of
real property taxes.
OTHER POSTEMPLOYMENT BENEFITS
In addition to providing pension benefits, the Town provides health insurance coverage and survivor
benefits for retired employees. Substantially all of the Town's employees may become eligible for these
benefits if they reach normal retirement age while working for the Town.
Health care benefits in accordance with New York State Health Insurance Rules and Regulations
(administered by the New York State Department of Civil Service), are provided through the New York
State Empire Plan (the "Empire Plan") whose premiums are based on the benefits paid throughout the
State during the year.
-40-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
5. REVENUES AND EXPENDITURES (continued)
OTHER POSTEMPLOYMENT BENEFITS(continued)
The Town recognizes the cost of providing benefits by recording its share of insurance premiums as an
expenditure in the year paid. The Town's union contracts and ordinances require that it provide its eligible
enrollees with Empire Plan benefit coverage, or if another provider is utilized, the equivalent coverage.
Under the provisions of the Empire Plan, premiums are adjusted on a prospective basis for any losses
experienced by the Empire Plan. The Town has the option to terminate its participation in the Empire Plan
at any time without liability for its respective share of any previously incurred loss. The liability for other
postemployment benefits payable is recorded as a non-current liability in the government-wide
statements.The current year increase in the liability is based on the most recent actuarial valuation.
COMPENSATED ABSENCES
The liability for vested or accumulated vacation or sick leave (compensated absences) is recorded as
current and non-current obligations in the government-wide statements. The current portion of this
debt is estimated based on historical trends and currently known facts. Compensated absence
liabilities and expenditures are reported in governmental funds only if they have matured, for example,
as a result of employee resignations, terminations, and retirements. The amount that is expected to be
liquidated with expendable available financial resources is reported as expenditures and a liability in the
funds statement in the respective fund that will pay the liability.
PENSIONS
The Town, as a participant in the New York State and Local Employees' Retirement System and Local
Police and Fireman Retirement System, recognizes the proportionate share of the net pension liability,
deferred outflows of resources, and deferred inflows of resources in the government-wide financial
statements, using the accrual basis of accounting, regardless of the amount recognized as pension
expenditures in the fund financial statements. The amounts recognized have been determined on the
same basis as reported by the Systems, utilizing the year end of March 31 st
ENCUMBRANCES
Encumbrance accounting, under which purchase orders, contracts and other commitments for the
expenditures of monies are recorded for budgetary control purposes, is employed in the governmental
funds. Encumbrances are reported as restrictions, commitments, or assignments of fund balances since
they do not constitute expenditures or liabilities. Expenditures for such commitments are recorded in the
period in which the liability is incurred.
6. USE OF ESTIMATES
The preparation of basic financial statements, in conformity with accounting principles generally accepted
in the United States of America, requires management to make estimates and assumptions that affect the
reported amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources
and, disclosure of contingent amounts, at the date of the financial statements, and the reported amounts
of revenues and expenditures during the reporting period.Actual results could differ from those estimates.
7. NEW ACCOUNTING PRONOUNCEMENT
GASB Statement No. 96, "Subscription-Based Information Technology Arrangements (SBITA's),
established a single model for SBITA accounting based on the concept that SBITA's are a financing of a
"right-to-use" underlying asset. This statement requires a subscriber to recognize a subscription liability
and an intangible right-to-use subscription asset. The requirements of GASB Statement No. 96 are
effective for the Town's fiscal year ended December 31, 2023. The Town has completed its evaluation of
the financial impact of GASB Statement No. 96 and determined that the implementation of this standard
was not required as it did not have a material impact on its financial statements.
-41-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
8. SUBSEQUENT EVENTS
Management has evaluated subsequent events for disclosure and/or recognition in the financial
statements through the date the financial statements were available to be issued,which date is December
20, 2024.
B. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
1. BUDGETARY INFORMATION
Budgets are adopted annually on a basis consistent with generally accepted accounting principles.
Appropriations authorized for the current year are increased by the amount of encumbrances carried
forward from the prior year.
Budgets for the general and special revenue funds, exclusive of the special grant fund, are legally
adopted for each year. The budgets are adopted on a basis of accounting consistent with GAAP,
except that appropriations authorized for the current year are increased by the amount of
encumbrances carried forward from the prior years. In the event that unanticipated revenues are
received (i.e. specific grant revenues) and exceed budgeted amounts, additional budgetary
appropriations may be made. The capital projects and special grant funds are budgeted on a project
or grant basis.
The Town follows the procedures enumerated below in establishing the budgetary data reflected in the
financial statements:
a) No later than October 1 st, the Supervisor submits a tentative budget to the Town Board for the
fiscal year commencing the following fiscal year. The tentative budget includes the proposed
means of financing for all funds.
b) After public hearings are conducted to obtain taxpayer comments, no later than November
20th, the Town Board adopts the budget.
c) The Town Board must approve all modifications of the budget. However, the Comptroller is
authorized to transfer certain budgeted amounts within departments.
d) In June 2011, New York State enacted Chapter 97, Laws of 2011 Real Property Tax Levy Cap
and Mandate Relief Provisions, which includes a 2% property tax cap for municipalities.
Beginning in 2012, no local government is authorized to increase its property tax levy by more
than 2% or the rate of inflation (whichever is less); however, local governments can exceed the
tax levy limit by a 60% vote of the governing body and annually adopting a local law. The Town
did not override the tax cap for the year ended December 31, 2023.
2. FUND BALANCE AND NET POSITION
FUND BALANCE
The following table provides the detail regarding fund balance categories and classifications for the
governmental funds which show components of nonspendable fund balances, as well as the purposes for
restricted, committed and assigned fund balance. The unassigned fund balance is also shown.
-42-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
B. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY(continued)
2. FUND BALANCE AND NET POSITION (continued)
FUND BALANCE (continued)
Capital Corn unity Other
General Highway Projects Reservation Governmental
Fund Fund Fund Fund Funds Total
Fund Balances:
Nonspendable:
Long-term receivables
-lease related $ 137,539 $ 137,539
Inventory 4,975 $ 190,875 $ 23,453 219,303
Prepaids 1,303,112 187,414 $ 7,638 171,998 1,670,162
Total Nonspendable 1,445,626 378,289 $ -0- 7,638 195,451 2,027,004
Restricted for:
Unspent debt proceeds 4,632,585 4,632,585
Grantors and donor restrictions 18,338 18,338
Land/Land right purchases 32,605,916 32,605,916
Affordable housing 1,233,809 1,233,809
Total Restricted -0- -0- 4,650,923 32,605,916 1,233,809 38,490,648
Corrrritted for:
Parks and Recreation 717,629 717,629
Affordable Housing 1,371,702 1,371,702
TotalCorrrritted 717,629 -0- -0- -0- 1,371,702 2,089,331
Assigned to:
Subsequent year's budget 1,900,000 642,000 286,000 2,828,000
Purchases on order
or contractual obligations 212,948 32,513 994,359 216,637 1,456,457
Special revenue funds 3,243,720 4,440,720 7,684,440
Capital projects 539,161 539,161
Judgments and claims 460,000 460,000
Total Assigned 2,572,948 3,918,233 1,533,520 -0- 4,943,357 12,968,058
Unassigned,reported in:
General Fund 21,599,058 21,599,058
Total Unassigned 21,599,058 -0- -0- -0- -0- 21,599,058
Total Fund Balances $ 26,335,261 $ 4,296,522 $ 6,184,443 $ 32,613,554 $ 7,744,319 $ 77,174,099
NET POSITION—NET INVESTMENT IN CAPITAL ASSETS
Net investment in capital assets, governmental activities, consists of capital assets, net of accumulated
depreciation, reduced by the outstanding balance of any long-term debt used to build or acquire the
capital assets. The net investment in capital assets of $187,909,885 included as part of the
governmental activities net position is calculated as follows:
Capital assets, net of depreciation $ 215,203,021
Deferred charges on refunding 862,460
Serial bonds payable (25,405,000)
Unamortized premiums (1,391,346)
BANS payable (5,345,000)
Unspent debt proceeds 4,632,585
Leases payable (287,676)
Capital related accounts payable (359,159)
Balance at December 31,2023 $ 187,909,885
-43-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS
1. CASH AND INVESTMENTS
Custodial Credit Risk- Deposits/Investments - Custodial credit risk for deposits exists when, in the event
of the failure of a depository financial institution, a government may be unable to recover deposits, or
recover collateral securities that are in possession of an outside agency. Custodial credit risk for
investments exists when, in the event of the failure of the counterparty, a government will not be able to
recover the value of its investments or collateral securities that are in possession of an outside party.
The Town's investments policy defines permissible investments, limits the amount of deposits at any time
at any one bank or trust company, requires that bank balances in excess of the Federal Deposit
Insurance Corporation insurance limits of $250,000 be protected with custodial agreements which
requires that balances are fully collateralized in accordance with New York State General Municipal Law
("GML")and limits the form of acceptable collateralization.
Credit Risk - The Town's written investment guidelines and policies are designed to protect principal by
limiting risk. State and Town law limit investments to those authorized by State statutes.
Interest-Rate Risk- Interest-rate risk arises because potential purchasers of debt securities will not agree
to pay face value for those securities if interest rates substantially increase, thereby affording potential
purchasers more favorable rates on essentially equivalent securities. Accordingly, such investments
would have to be held to maturity to avoid a potential loss.
Concentration of Credit Risk — Concentration of credit risk can arise as a result of failure to adequately
diversify investments. Concentration risk disclosure is required for positions of 5 percent or more in
securities of a single issuer.
Financial institutions can satisfy collateral requirements by furnishing an eligible letter of credit, an eligible
surety bond, by pledging eligible securities as specified in Section 10 of GML or participating in a deposit
placement program pursuant to Section 9-r of the banking law. Irrevocable letters of credit issued as
collateral in certain situations may require a threshold of up to 140% of aggregate deposits. Eligible
securities that may be pledged as collateral includes but is not limited to obligations of the United States
or its agencies, obligations of New York State and obligations of municipalities of New York State.
The use of available daily balances to determine collateral requirements may result in the available
balance being under-collateralized at various times during the year.
At December 31, 2023, the Town's cash book balance was $81,517,994. This amount is inclusive of
fiduciary fund deposits of$22,909,869 but exclusive of petty cash of$2,044 and CLASS of$27,809,222.
The available bank balance was $82,643,383 exclusive of CLASS deposits. Of the bank balance,
$10,325,298 was covered by Federal depository insurance, and $72,318,085 was covered by collateral
held by the Town's agents,third-party financial institutions, in the Town's name.
External Investment Pool
The Town participates in the Cooperative Liquid Assets Securities System- New York("CLASS"), a multi-
municipal cooperative investment pool consisting of U.S. Treasury Obligations and repurchase
agreements relating to treasury obligations. Investments are stated at cost, which approximates market
value. CLASS was established as a cooperative investment arrangement organized under the CLASS
Municipal Cooperation Agreement made pursuant to New York General Municipal Law, Article 3A and
5-G. The pool is not registered with the SEC and is overseen by an elected Governing Board. The Town's
fair value of its position in the pool is the same as the value of pool shares.
-44-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
1. CASH AND INVESTMENTS (continued)
External Investment Pool (continued)
In accordance with FASB guidance, CLASS utilizes ASC 820, "Fair Value Measurement and
Disclosure"to define fair value, establish a framework for measuring fair value, and expand disclosure
requirements regarding fair value measurements. ASC 820 does not require new fair value
measurements but is applied to the extent that other accounting pronouncements require or permit fair
value measurements. This standard emphasizes that fair value is a market-based measurement that
should be determined based on the assumptions that market participants would use in pricing an asset
or liability. Various inputs are used in determining the value of CLASS's portfolio investments defined
pursuant to this standard.
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 market value. There have been no significant changes in valuation
techniques used in valuing any such positions held by CLASS since the beginning of their fiscal year.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk
associated with investing in those securities.
The Town's $27,809,222 CLASS investment consists of U.S. Treasury Obligations and repurchase
agreements relating to Treasury obligations and is not subject to risk categorization.
The above amounts represent the cost of the investment pool shares and are considered to approximate
market value. Additional information concerning the cooperative is presented in the annual report of the
New York CLASS,which can be found on its website at www.newyorkclass.org.
As of December 31, 2023, the Town did not have any investments subject to credit risk, interest-rate risk
or concentration of credit risk.
2. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
Interfund receivable and payable balances for the primary government at December 31, 2023 are
expected to be paid currently. These balances represent various temporary loans, charges, and
reimbursements between funds for operating and capital expenditures and are stated as follows:
Amount
Receivable Amount Payable
Major Governmental Funds:
General Fund-Town-wide $ 724,299 $ 3,098,208
Highway Fund 1,338,508 811,006
Capital Projects Fund 1,772,451 710,328
Community Preservation Fund -0- 5,129
Total Major Funds 3,835,258 4,624,671
Nonmajor Governmental Funds:
General Fund-Part-Town 213,478 40,000
Special Grant 13,886 -0-
East-West Fire Protection District 183,281 -0-
Fishers Island Sewer District 18,000 -0-
Solid Waste Management District 401,518 -0-
Total Nonmajor Funds 830,163 40,000
Fiduciary Funds
Custodial Fund 750
Total $ 4,665,421 $ 4,665,421
-45-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
2. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS (continued)
Interfund transfer balances for the primary government at December 31, 2023 represent capital project
transfers and risk retention transfers and are stated as follows:
Transfers In Transfers Out
Major Governmental Funds:
General Fund-Town-wide $ 787,398 $ 1,731,393
Highway Fund -0- 1,516,686
Capital Projects Fund 2,700,728 147,562
Total Major Funds 3,488,126 3,395,641
Nonmajor Governmental Funds:
General Fund-Part-Town -0- 80,000
Solid Waste Management District -0- 45,000
Total Nonmajor Funds 32,515 125,000
Total $ 3,520,641 $ 3,520,641
3. LEASES RECEIVABLE
The Town has entered into six various agreements to lease its buildings and land to others for cell
towers. The Town recognizes lease receivables and deferred inflows of resources - lease related in
the government-wide and fund financial statements. The Town expects to renew these leases for all
renewable periods. The lease terms are for up to 299 months. During 2023, the Town recognized
$134,305 of lease revenue in the general fund, and $59,516 of interest income in the general fund.
The following table is the amortization schedule for the lease receivables:
Primary Government
Years Ending
December 31, Principal Interest Totals
2024 $ 63,272 $ 76,156 $ 139,428
2025 66,491 73,870 140,361
2026 75,633 71,393 147,026
2027 81,321 68,581 149,902
2028 85,278 65,612 150,890
2029-2033 527,901 275,323 803,224
2034-2038 474,982 183,740 658,722
2039-2043 411,906 88,737 500,643
2044-2048 295,436 27,039 322,475
Total $ 2,082,220 $ 930,451 $ 3,012,671
-46-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
4. CAPITAL ASSETS
Balance Transfers and Balance
Primary Government 1/01/2023 Additions Deletions 12/31/2023
Capital assets not being depreciated:
Land $ 17,237,847 $ 5,012,552 $ 22,250,399
Land development rights 148,201,050 2,084,419 150,285,469
Construction in progress 976,331 1,361,700 $ 32,360 2,305,671
Total Capital Assets Not Being Depreciated 166,415,228 8,458,671 32,360 174,841,539
Depreciable/amortizable capital assets:
Buildings 21,553,092 584,628 22,137,720
Improvements other than buildings 16,940,190 16,940,190
Machinery and equipment 17,079,001 1,266,009 179,425 18,165,585
Software 1,335,425 28,878 1,364,303
Infrastructure 91,884,086 2,269,529 94,153,615
Right-to-use lease asset 228,692 148,433 377,125
Total Depreciable/Amortizable Capital Assets 149,020,486 4,297,477 179,425 153,138,538
Less accumulated depreciation/amortization:
Buildings 8,978,641 632,452 9,611,093
Improvements other than buildings 11,661,101 546,736 12,207,837
Machinery and equipment 12,452,384 986,407 169,292 13,269,499
Softw are 1,354,641 55,084 1,409,725
Infrastructure 74,992,240 1,189,625 76,181,865
Right-to-use lease asset 44,649 52,388 97,037
Total Accumulated Depreciation/Amortization $ 109,483,656 $ 3,462,692 $ 169,292 112,777,056
Total Net Depreciable/Amortizable Capital Assets 40,361,482
Total Net Capital Assets $ 215,203,021
Depreciation/amortization expense w as charged to governmental functions as follow s:
General government support $ 780,872
Public safety 455,056
Transportation 1,458,940
Economic assistance and opportunity 25,536
Culture and recreation 78,305
Home and community services 663,983
$ 3,462,692
The Town evaluates prominent events or changes in circumstances affecting capital assets to
determine whether impairment of a capital asset has occurred. The Town's policy is to record an
impairment loss in the period when the Town determines that the carrying amount of the asset will not
be recoverable. At December 31, 2023, the Town has not recorded any such impairment losses.
-47-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
4. CAPITAL ASSETS (continued)
Balance Reclassifications/ Balance
Nonmajor Component Units 1/1/2023 Additions Deletions 12/31/2023
Capital assets not being depreciated:
Land $ 2,103,162 $ 2,103,162
Construction in progress 139,982 $ 188,470 328,452
Total Capital Assets Not Being Depreciated 2,243,144 $ 188,470 2,431,614
Depreciable capital assets:
Buildings 14,356,309 7,320 14,363,629
Improvements other than buildings 2,557,247 332,527 2,889,774
Machinery and equipment 6,513,966 212,973 6,726,939
Infrastructure 5,683,886 921,522 6,605,408
Total Depreciable Capital Assets 29,111,408 1,474,342 -0- 30,585,750
Less accumulated depreciation:
Buildings 7,997,756 452,729 8,450,485
Improvements other than buildings 1,497,077 92,560 1,589,637
Machinery and equipment 4,161,090 156,513 4,317,603
Infrastructure 3,474,667 153,814 3,628,481
Total Accumulated Depreciation $ 17,130,590 $ 855,616 $ -0- 17,986,206
Total Net Depreciable Capital Assets 12,599,544
Total Net Capital Assets $ 15,031,158
Depreciation expense w as charged to governmental functions as follow s:
Transportation $ 617,767
Culture and recreation 103,118
Home and community services 134,731
$ 855,616
5. INDEBTEDNESS
SHORT-TERM DEBT
Bond Anticipation Notes ("BANs") - Bond anticipation notes are used as a temporary means of
financing capital expenditures in the Capital Projects Fund. State law requires that BANs issued for capital
purposes be converted to long-term obligations within five years after the original issue date. 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. Liabilities for BANs are generally
accounted for in the Capital Projects Fund. BANs are expected to be paid from the proceeds of future
bond issues after renewal of these notes. As of December 31, 2023 the Town reported bond anticipation
notes outstanding of $5,795,000, of which $450,000 relate to Fishers Island Ferry District and were
reported as short term debt. The remaining $5,345,000 was reported as long-term debt by the primary
government. These BANs were issued in September 2023, bear interest at 4.50% and matured in
September 2024.
A summary of changes in short-term BANs for the year ended December 31, 2023 is as follows:
Balance Balance
1/1/2023 Increases Reductions 12/31/2023
Primary Government $ 1,000,000 $ 1,000,000 $ -0-
Component Units 2,410,000 1,960,000 450,000
Total BANs Payable $ 3,410,000 $ -0- $ 2,960,000 $ 450,000
-48-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
5. INDEBTEDNESS
LONG-TERM DEBT
General Obligation Bonds - The Town borrows money in order to acquire land, equipment or construct
buildings and improvements. This enables the cost of these capital assets to be borne by the present and
future taxpayers receiving the benefit of the capital assets.
Arbitrage provisions of the Internal Revenue Tax Act of 1986 require the Town to rebate excess arbitrage
earnings from bond proceeds to the federal government. There were no excess arbitrage earnings for the
year ended December 31, 2023.
These long-term direct obligation bonds are backed by the full faith and credit of the Town which are
payable from tax revenues of the General Fund and Special Revenue Funds. Interest rates on these
bonds vary from 2.00% to 5.00% and have maturity dates in 2021 through 2042.
At December 31, 2023, bonds payable consisted of the following individual issues:
Primary Government
Interest Outstanding
Issue Purpose Final Maturity Issue Date Rate Amount
2015 Refunding Serial Bonds Refunding Bond March 1,2030 July 29,2015 2.00%-5.00% $ 3,985,000
2016 Refunding Serial Bonds Refunding Bond February 15,2030 October 4,2016 2.00%-4.00% 10,800,000
2016 Public Improvement Serial Bonds Public Improvement August 15,2034 August 25,2016 2.00%-2.25% 2,610,000
2023 Public Improvement Serial Bonds Public Improvement September 15,2042 September 20,2023 3.00%-5.00% 8,010,000
$ 25,405,000
Future principal and interest payments to maturity for the primary government are as follows:
Primary Government
Years Ending General Obligation Bonds
December 31, Principal Interest Totals
2024 $ 2,750,130 $ 777,560 $ 3,527,690
2025 2,803,905 666,282 3,470,187
2026 2,597,064 569,588 3,166,652
2027 2,599,612 492,634 3,092,246
2028 2,647,157 420,202 3,067,359
2029-2033 7,271,441 1,272,749 8,544,190
2034-2038 2,542,374 717,096 3,259,470
2039-2042 2,193,317 223,369 2,416,686
Total $ 25,405,000 $ 5,139,480 $ 30,544,480
Bond Anticipation Notes Payable — The bond anticipation note in the amount of$5,795,000 that was
issued on September 20, 2023 with an interest rate of 4.50%was renewed on September 19, 2024. The
Town reported $450,000 as a short term liability in the component unit financial statements, and
$5,345,000 as a long-term liability in the government-wide financial statements.
-49-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
4. INDEBTEDNESS (continued)
LONG-TERM DEBT(continued)
Leases Payable - Leases payable as of December 31, 2023 are composed of the following individual
agreements:
Primary Government
Interest Outstanding
Purpose Year of Issue Final Maturity Rate Amount
Copiers 2019 2024 3.05% $ 499
Copiers 2020 2024 3.00% 1,564
Copiers 2021 2025 3.02% 3,206
Copiers 2022 2026 3.20% 37,230
Mail machine 2018 2024 3.05% 857
Solar panels 2021 2026 3.02% 10,858
Hi-band radio 2018 2028 3.03% 88,585
Copiers 2023 2027 2.69% 6,367
Copiers 2023 2027 2.77% 4,767
Copiers 2023 2027 2.69% 4,803
Parking lot 2023 2043 4.33% 128,940
$ 287,676
Interest expense of$5,530 was recorded in the fund financial statements, of which $5,408 was reported in
the general fund, and $122 was reported in the highway fund.
Future principal and interest payments for leases payable for the primary government are as follows:
Primary Government
Years Ending
December 31, Principal Interest Totals
2024 $ 52,308 $ 4,616 $ 56,924
2025 51,203 3,228 54,431
2026 36,591 1,980 38,571
2027 27,678 1,226 28,904
2028 22,325 576 22,901
2029-2033 31,940 1,530 33,470
2034-2028 32,520 950 33,470
2039-2043 33,111 359 33,470
Total $ 287,676 $ 14,465 $ 302,141
-50-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
5. INDEBTEDNESS (continued)
CHANGES IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended December 31, 2023 is as follows:
Noncurrent
Balance Balance Liabilities Due Noncurrent
1/01/2023 Increases Reductions 12/31/2023 Within One Year Liabilities
Primary Government:
General obligation bonds $ 19,830,000 $ 8,010,000 $ 2,435,000 $ 25,405,000 $ 2,750,130 $ 22,654,870
Add:premiuns on obligations 1,404,118 173,872 186,644 1,391,346 1,391,346
Total general obligation bonds
payable 21,234,118 8,183,872 2,621,644 26,796,346 2,750,130 24,046,216
Bond anticipation notes 10,370,000 3,600,000 8,625,000 5,345,000 320,000 5,025,000
Leases payable 188,661 148,433 49,418 287,676 52,308 235,368
Compensated absences 9,275,403 47,994 9,227,409 898,670 8,328,739
General claims and judgments
liability 497,000 75,000 112,000 460,000 59,805 400,195
Estinated liability for landfill closure
and postclosure care costs 308,690 33,170 275,520 19,394 256,126
Net pension liability 973,100 18,500,633 19,473,733 19,473,733
Total OPEB liability 119,200,973 6,844,488 31,982,347 94,063,114 3,099,015 90,964,099
$ 162,047,945 $ 37,352,426 $ 43,471,573 $ 155,928,798 $ 7,199,322 $ 148,729,476
Noncurrent
Balance Balance Liabilities Due Noncurrent
1/01/2023 Increases Reductions 12/31/2023 Within One Year Liabilities
Component Units:
General obligation bonds $ -0- $ 1,120,000 1,120,000 $ 39,869 $ 1,080,131
Compensated absences 344,294 9,494 353,788 88,447 265,341
Net pension liability -0- 1,047,126 1,047,126 1,047,126
Other postenployrrent benefits
payable 867,113 $ 208,042 659,071 659,071
$ 1,211,407 $ 2,176,620 $ 208,042 $ 3,179,985 $ 128,316 $ 3,051,669
The liabilities for compensated absences, leases, net pension liability and other postemployment
benefits payable will be liquidated through future budgetary appropriations in the funds that gave rise
to the liability. In most instances, these amounts will be liquidated from the general fund, highway fund,
and certain special revenue funds. Payments for estimated claims and judgments will be liquidated
primarily from the general fund. The estimated liability for landfill closure and post closure costs will be
liquidated by the solid waste management fund.
6. RETIREMENT SYSTEM
Plan Description
The Town participates in the New York State and Local Employees' Retirement System ("ERS") and
Local Police and Fire Retirement System ("PFRS"), which are collectively referred to as the New York
State and Local Retirement System (the "System"). These are cost-sharing multiple-employer defined
benefit pension plans. The net position of the System is held in the New York 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. The Comptroller is an elected official determined in a direct
statewide election and serves a four-year term. System benefits are established under the provisions of
the New York State Retirement and Social Security Law ("RSSL"). Once a public employer elects to
participate in the System, the election is irrevocable.
-51-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
6. RETIREMENT SYSTEM (continued)
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 Town also participates in the Public Employees' Group Life Insurance
Plan ("GLIP"), which provides death benefits in the form of life insurance. The System is included in the
State's financial report as a pension trust fund. That report may be found at http://www.osc.state.ny.us/
retire/publications/index.php or obtained by writing to the New York State and Local Retirement
System, 110 State Street, Albany, New York 12244-0001.
Benefits Provided
The System provides retirement benefits as well as death and disability benefits.
Tiers 1 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. 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 and Tier 2, is 55 and 62, respectively.
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 age 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 RSSL, Tiers 1 and 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 of
employment. For Tier 1 members who joined on or after June 17, 1971, each year's compensation used
in the final average salary calculation is limited to no more than 20% greater than the previous year. For
Tier 2 members, each year of final average salary is limited to no more than 20% than the average of the
previous two years.
Tiers 3, 4 and 5
Eligibility: Tiers 3 and 4 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. Tier 5
members, with the exception of those retiring under special retirement plans, must have five years of
service and be at least 55 to be eligible to collect a retirement benefit. The full benefit age for Tiers 3, 4
and 5 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 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. Tiers 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 age 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 of
employment. For Tiers 3, 4 and 5 members, each year's compensation used in the final average salary
calculation is limited to no more than 10%greater than the average of the previous two years.
-52-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
6. RETIREMENT SYSTEM (continued)
Benefits Provided (continued)
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 full benefit
age for Tier 6 members is age 63 for ERS members and 62 for PFRS 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 five 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 of
employment. For Tier 6 members, each year's compensation used in the final average salary calculation
is limited to no more than 10%greater than the average of the previous four years.
Special Plans
The 25-Year Plan allows a retirement after 25 years of service with a benefit of one-half of final average
salary, and the 20-Year Plan allows a retirement after 20 years of service with a benefit of one-half of final
average salary. These plans are available to certain PFRS members, sheriffs, and correction officers.
Disability Retirement Benefits
Disability retirement benefits are available to members unable to perform their job duties because of
permanent physical or mental capacity. 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.
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
life 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: (1) all pensioners who have attained age 62 and have
been retired for five years; (2) all pensioners who have attained age 55 and have been retired for ten
years; (3)all disability pensioners, regardless of age,who have been retired for five years; (4) recipients of
an accidental death benefit, regardless of age, who have been receiving such benefit for five years; and
(5)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%.
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TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
6. RETIREMENT SYSTEM (continued)
Contributions
Plan members who joined the system before July 27, 1976 are not required to make contributions.
Those joining after July 27, 1976 and before January 1, 2010 with less than ten years of membership
are required to contribute 3% of their annual salary. Those joining on or after January 1, 2010 and
before April 1, 2012 are required to contribute 3% of their salary for NYSERS members throughout
active membership. Those joining on or after April 1, 2012 are required to contribute between 3% and
6%, depending upon their salary, throughout active membership. Under the authority of the NYSRSSL,
the Comptroller shall certify annually the actuarially determined rates expressly used in computing the
employers' contributions based on salaries paid during the System's year ended March 31. The actual
contributions were equal to 100% of the actuarially required amounts. The required contributions as
billed by the Plan, for the primary government,for the current year and two preceding years were:
ERS PFRS
2023 $ 1,635,452 $ 1,882,159
2022 $ 2,184,473 $ 1,895,299
2021 $ 1,904,517 $ 1,631,922
Pension (Assets)/Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows
of Resources Related to Pension
At December 31, 2023, the primary government reported a liability of $8,850,096 for ERS and a
liability of$10,623,637 for PFRS, for its proportionate share of the net pension (asset)/liability for the
Systems. The net pension liability was measured as of March 31, 2023 and the total pension liability
used to calculate the net pension (asset)/liability was determined by an actuarial valuation as of April
1, 2022. The primary government proportion of the net pension (asset)/liability was based on a
projected contribution of all participating members, actuarially determined.
Below is the primary government's proportionate share of the net pension (asset)/liability of the
System and its related employer allocation percentage as of March 31, 2023.
Employer Change in Employer
Net Pension Allocation Allocation Percentage Since
Measurement Date (Asset)Liability Percentage Prior Measurement Date
ERS March 31,2023 $ 8,850,096 0.0412706% 0.0013462%
PFRS March 31,2023 $ 10,623,637 0.1927900% 0.0214830%
For the year ended December 31, 2023, the primary government recognized pension expense of
$6,602,377, of which $3,271,986 relates to ERS and $3,330,391 relates to PFRS. At December 31,
2023, the primary government reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
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TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
6. RETIREMENT SYSTEM (continued)
Pension (Assets)/Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows
of Resources Related to Pension (continued)
ERS PFRS Totals
Deferred Outflows of Resources:
Difference between expected and actual experience $ 942,605 $ 1,038,354 $ 1,980,959
Changes of assumptions 4,298,177 5,176,870 9,475,047
Net difference betw een projected and actual investment
earnings on pension plan investments 18,781 18,781
Changes in proportion and differences betw een employer
contributions and proportionate share of contributions 794,717 334,603 1,129,320
Contributions made subsequent to the measurement date 1,276,770 1,458,596 2,735,366
Total Deferred Outflow s of Resources-pension amounts $ 7,312,269 $ 8,027,204 $ 15,339,473
Deferred Inflows of Resources:
Differences between expected and actual experience $ 248,544 $ 248,544
Changes of assumptions 47,503 47,503
Net difference betw een projected and actual investment
earnings on pension plan investments 51,994 51,994
Changes in proportion and differences betw een the Tow n's
contributions and proportionate share of contributions 497,823 $ 240,898 738,721
Total Deferred Inflows of Resources-pension amounts $ 845,864 $ 240,898 $ 1,086,762
Contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended December 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:
ERS PFRS
Years ended December 31,2024 $ 1,277,017 $ 1,192,641
2025 (368,899) (213,250)
2026 1,838,046 3,161,018
2027 2,443,471 1,968,654
2028 218,647
$ 5,189,635 $ 6,327,710
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:
ERS PFRS
Measurement date March 31,2023 March 31,2023
Actuarial valuation date April 1,2022 April 1,2022
Interest rate 5.90% 5.90
Salary increases 4.40% 6.20
Decrement tables April 1,2015- April 1,2015-
March 31,2020 March 31,2020
Systerrfs Experience System's Experience
Inflation rate 2.90% 2.90%
Cost of living adjustment 1.50% 1.50
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TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
6. RETIREMENT SYSTEM (continued)
Actuarial Assumptions (continued)
Annuitant mortality rates are based on the System's experience with adjustments for mortality
improvements based on the Society of Actuaries' Scale MP-2020. 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 in accordance
with Actuarial Standard of Practice ("ASOP") No. 27, "Selection of Economic Assumptions for
Measuring Pension Obligations."ASOP No. 27 provides guidance on the selection of an appropriate
assumed investment rate of return. Consideration was given to expected future real rates of return
(expected returns net of pension plan investment expenses and inflation) for equities and fixed
income, as well as historical investment data and plan performance.
Best estimates of the 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
Target Expected Real
Asset Type: Allocation Rate of Return
Equity:
Domestic equity 32.00% 4.30%
International equity 15.00% 6.85%
Private equity 10.00% 7.50%
Real estate 9.00% 4.60%
Opportunistic/absolute return strategies 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%
100.00%
The discount rate used to calculate the total pension liability was 5.9% for the Systems. 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 Systems' 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 Assumption
The following presents the primary government's proportionate share of the net pension liability
calculated using the discount rate of 5.9%, as well as what the primary government's proportionate
share of the net pension liability/(asset) 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:
1.00% Current 1.00%
Decrease Assumption Increase
4.90% 5.90% 6.90%
Tow n's proportionate share of the
collective net pension liability(asset)
ERS $ 21,387,398 $ 8,850,096 $ (1,625,889)
PFRS 22,145,468 10,623,637 1,082,869
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TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
6. RETIREMENT SYSTEM (continued)
Pension Plan Fiduciary Net Position
The components of the current-year net employees' retirement system pension liability of the
employers as of the respective valuation date of April 1, 2022 were as follows:
ERS PFRS Total
(Dollars in thousands) (Dollars in thousands) (Dollars in thousands)
Employers'total pension liability $ 232,627,259 $ 43,835,333 $ 276,462,592
Plan net position (211,183,223) (38,324,863) (249,508,086)
Employers'net pension liability(asset) $ 21,444,036 $ 5,510,470 $ 26,954,506
Ratio of plan net position to the
Employers'total pension liability 90.78% 87.43% 90.25
Detailed information about the System pension plan's fiduciary net position is available in the System's
separately issued financial statements.
7. OTHER POSTEMPLOYMENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE)
Plan Description
The Town established and administers a single-employer defined benefit OPEB plan for its
employees. Article 11 of the State Compiled Statutes grants the authority to establish and amend the
benefit terms and financial requirements to the Town Board. No assets are accumulated in a trust that
meets the criteria in paragraph 4 of GASB Statement No. 75.
The Town, as a single-employer defined benefit OPEB plan, per its contracts with employees, will pay
full premium costs for medical insurance coverage (currently provided by the Empire Plan) at
retirement with the exception of PBA members hired after 2013 who pay 15% while active and into
retirement. Employees are eligible for retiree health insurance provided that the employee has been
eligible for coverage under the Town's health insurance plan for at least 10 consecutive years and is
employed by the Town on the last date immediately prior to retirement. The retiree and spouse are
eligible for full Medicare premium reimbursement. Healthcare benefits for non-union employees are
similar to those of union employees. Surviving spouses of deceased employees may continue
coverage by paying the premium equivalent for participants.
Employees Covered by Benefit Terms
The number of participants as of January 1,2023, the effective date of the OPEB valuation is as follows:
Active employees 205
Retirees and dependents 148
Total 353
There have been no significant changes in the number or type of coverage since that date.
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TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
7. OTHER POSTEMPLOYMENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE) (continued)
Total OPEB Liability
The Town's total OPEB liability of $94,063,114 was measured as of December 31, 2023 and was
determined by an actuarial valuation as of January 1, 2023 with updated procedures used to roll forward
the OPEB liability to the reporting date of December 31, 2023.
Funding Policy
The Town currently pays for other postemployment health care benefits on a pay-as-you-go basis.
Actuarial Assumptions and Other Inputs
The projection of future benefits for an ongoing plan involves estimates of the value of reported
amounts and assumptions about the probability of occurrence of events far into the future. Amounts
determined regarding the funded status of a plan and the employer's annual required contributions are
subject to continual revision as actual results are compared with past expectations and new estimates
are made about the future.
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include the types of benefits provided at the
time of each valuation and the historical pattern of sharing benefit costs between the employer and
plan members to that point. The actuarial methods and assumptions used include techniques that are
designed to reduce the effects of short-term liability in actuarial accrued liabilities, consistent with the
long-term perspective of the calculations.
The total OPEB liability in the January 1, 2023 valuation date was determined using the following actuarial
assumptions and other inputs:
Discount Rate 3.65%
Healthcare cost trend rates 7%for 2023 decreasing 0.4% per year to an ultimate trend rate
of 5.0% in year 6 and thereafter.
The discount rate was based on the January 1, 2023 Bond Buyer GO-20 municipal bond index rate.
Mortality rates were based on the RP-2014 mortality table with projected mortality.
The decrement tables used for this valuation are based on the New York State Employees' Retirement
System and New York State Police and Fire Retirement System.
The actuarial assumptions used in the January 1, 2023 valuation were based on standard tables modified
for certain plan features such as eligibility for full and early retirement where applicable.
-58-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
7. OTHER POSTEMPLOYMENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE) (continued)
Changes in the Total OPEB Liabilitv
Balance at December 31, 2022 $ 119,200,973
Changes for the year:
SenAce cost 4,066,061
Interest 2,468,861
Differences between expected and actual experience 309,565
Changes in assumptions and other inputs (29,209,581)
Benefit payments (2,772,765)
Balance at December 31, 2023 $ 94,063,114
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the Town, as well as what the Town's total OPEB liability
would be if it were calculated using a discount rate that is 1-percentage-point lower (2.65%) or
1-percentage-point higher(4.65%)than the discount rate.
1.00% Discount 1.00%
Decrease Rate Increase
2.65% 3.65% 4.65%
$ 113,340,703 $ 94,063,114 $ 79,733,697
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rate
The following presents the total OPEB liability of the Town, as well as what the Town's total OPEB liability
would be if it were calculated using a healthcare cost trend rate that is 1-percentage-point lower or
1-percentage-point higher than the healthcare cost trend rate.
1.00% Trend 1.00%
Decrease Rate Increase
(6.00%to 4.00%) (7.00%to 5.00%) (8.00%to 6.00%)
$ 79,565,032 $ 94,063,114 $ 112,891,269
For the year ended December 31, 2023, the Town recognized OPEB expense of $5,485,430. At
December 31, 2023, the Town reported deferred outflows or inflows of resources related to OPEB
from the following sources.
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences Between Actual and Expected Experience $ 797,530
Changes of assumptions 17,226,919
Contributions made subsequent to the measurement date $ 3,099,015
Total Deferred Outflows of Resources-OPEB $ 3,099,015 $ 18,024,449
-59-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. DETAILED NOTES ON ALL FUNDS (continued)
7. OTHER POSTEMPLOYMENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE) (continued)
The amounts reported as deferred inflows of resources related to OPEB will be recognized in OPEB
expense as follows:
Year ending December 31, 2024 $ (1,049,492)
2025 (1,049,492)
2026 (1,137,336)
2027 (4,187,816)
2028 (3,375,308)
Thereafter (7,225,005)
$ (18,024,449)
Contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB
liability in the year ended December 31, 2024.
8. COMPENSATED ABSENCES
Town employees are granted vacation and sick leave and earn compensatory absences in varying
amounts. In the event of termination or upon retirement, an employee is entitled to payment for
accumulated vacation and sick leave and unused compensatory absences at various rates subject to
certain maximum limitations. Estimated vacation, sick leave and compensatory absences accumulated
by governmental fund type employees have been recorded in the Statement of Net Position. Payment of
vacation time and sick leave is dependent upon many factors; therefore, timing of future payments is not
readily determinable. However, management believes that sufficient resources will be made available for
the payments of vacation, sick leave and compensatory absences when such payments become due. As
of December 31, 2023, the value of the accumulated vacation time and sick leave was $9,227,409 for the
primary government, and $353,788 for the component units.
D. COMMITMENTS AND CONTINGENCIES
Risk Management
In common with other municipalities, the Town receives numerous notices of claims. The Town established a
self-insurance risk management program for general liability insurance which is accounted for in the general
fund. Although the eventual outcome of these claims cannot be presently determined, the Town has
estimated unsettled claims and litigation to be $460,000 which is reported as claims and judgments payable
in the government-wide financial statements, $3,225 of which is included as judgments and claims payable
as a current liability in the fund financial statements. The Town is of the opinion that the ultimate settlement of
the outstanding claims will not result in a material adverse effect on the Town's financial position.
For the year ended December 31, 2023, the Town has a deductible liability exposure of$50,000 per claim
for general liability, $25,000 per claim for automobile liability, police liability and employee benefits, and
$10,000 per claim for public officials and employment practices. Any liability exposure above the
deductible amounts is covered by primary insurance policies up to $1,000,000 per claim for general
liability, public officials, police and employment practices, and employee benefits.
Aggregate exposures are $1,000,000 per claim for public officials, police and employment practices,
$3,000,000 for employee benefits and general liability. After primary policy limits are exhausted, the
excess exposure above the per claim or aggregate limits is covered by an umbrella liability policy of
$10,000,000 per claim and $10,000,000 in the aggregate.
There have been no significant reductions in insurance coverage as compared to the prior year and there
were no settlements in excess of insurance coverage over the last three years.
-60-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
D. COMMITMENTS AND CONTINGENCIES (continued)
Risk Management(continued)
The Town liability for general liability claims is determined and reported by a third-party administrator and is
reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably
estimated. Claims reserves for general liability claims are re-evaluated periodically to take into consideration
recently settled claims and any new developments and changes.
The Town's discretely presented component units are not included in the Town's self-insurance risk
management program for any claims.
Fund balance is assigned for future catastrophic losses. Changes in the long-term liability for claims and
judgments for the years ended December 31, 2023 and 2022 are as follows:
General Liability
2023 2022
Unpaid Claims as of December 31st, prior year $ 497,000 $ 641,000
Incurred claims:
Provision for insured events of the current
fiscal year 75,000 50,000
Increase(decrease)in net provision for insured
events of prior fiscal years (12,000) (126,182)
Total incurred claims and claim adjustments 560,000 564,818
Payments of claims during the fiscal year (100,000) (67,818)
Unpaid claims as of December 31st $ 460,000 $ 497,000
Contingent Liabilities
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor
agencies, principally the federal and state government. Any disallowed claims, including amounts already
collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be
disallowed by the grantor cannot be determined at this time, although the Town expects such amounts, if
any, to be immaterial.
Landfill Closure and Post-Closure Care Costs
State and federal laws and regulations required the Town to place a final cover on its landfill sites and to
perform certain maintenance and monitoring functions at the sites for thirty years after closure. The Town
ceased accepting waste at its Cutchogue landfill as of October 8, 1993. Accordingly, as of December 31,
2023, the Town has recorded a liability of $275,520, in the government-wide financial statements which
represents the provision to be made in future budgets for unfunded closure and postclosure landfill costs. As
the liability is based on 100% of capacity there are no estimated costs of closure or postclosure remaining to
be recognized. Actual costs may vary due to inflation or deflation, changes in technology, or changes in
regulations or applicable laws.
Construction and Other Capital Acquisition Commitments
The Town is committed to capital improvements to its various facilities and infrastructure. At December 31,
2023, these commitments amounted to $994,359 in the capital projects fund.
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TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
D. COMMITMENTS AND CONTINGENCIES (continued)
Animal Shelter Agreement
In May 2011, the Town entered into an agreement with the North Fork Animal Welfare League to operate
and manage the Town's Animal Shelter. The agreement is for a term of four years commencing on June 1,
2011. The agreement was renewed in March 2015 with added lease terms beginning March 2016 expiring
in February 2026. The future minimum payments associated with this agreement are as follows:
Year Ending December 31,
2024 $ 284,486
2025 290,175
2026 49,330
Total $ 623,991
E. CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED COMPONENT UNITS
The following represents condensed financial statements (unaudited) for the discretely presented component
units as of and for the year ended December 31, 2023:
Condensed Statement of Net Position:
Cue from Capital Assets Deferred Other Deferred
Current and Primary Net of Outflow s Current Long-Term Inflow s Net
Other Assets Government Depreciation of Resources Liabilities Liabilities of Resources Position
Fishers Island
Ferry District $ 1,386,998 $ 298,577 $ 10,650,013 $ 938,671 $ 1,220,104 $ 3,051,669 $ 435,061 $ 8,567,425
Fishers Island Waste
Management District 361,204 201,103 1,768,908 32,769 201,103 2,097,343
Cutchogue-New Suffolk
Park District 156,623 28,916 120,745 21,555 28,916 255,813
Southold Park District 226,497 74,476 672,978 540 74,476 898,935
Orient-East Marion
Park District 5,530 11,357 450,814 120 11,357 456,224
Matttuck Park District 371,362 122,064 1,367,700 26,324 122,064 1,712,738
Orient Mosquito District 173,347 21,367 1,550 21,367 171,797
$ 2,681,561 $ 757,860 $ 15,031,158 $ 938,671 $ 1,302,962 $ 3,051,669 $ 894,344 $ 14,160,275
Condensed Statement of Activities:
Program General Revenue Net Position
Property
Expenses Revenue Net Expense Tax Other Change 1/1/23 12/31/23
Fishers Island
Ferry District $ 5,446,505 $ 3,683,291 $ 1,763,214 $ 1,419,700 $ 15,904 $ (327,610) $ 8,895,035 $ 8,567,425
Fishers Island Waste
Management District 1,088,842 48,723 1,040,119 888,425 31,340 (120,354) 2,217,697 2,097,343
Cutchogue-New Suffolk
Park District 195,959 195,959 136,858 26,652 (32,449) 288,262 255,813
Southold Park District 517,745 517,745 349,945 53,991 (113,809) 1,012,744 898,935
Orient-East Marion
Park District 55,019 7,500 47,519 50,465 2,946 453,278 456,224
Mattituck Park District 689,998 129,366 560,632 569,600 5,097 14,065 1,698,673 1,712,738
Orient Mosquito District 79,726 79,726 99,900 1,188 21,362 150,435 171,797
$ 8,073,794 $ 3,868,880 $ 4,204,914 $ 3,514,893 $ 134,172 $ (555,849) $ 14,716,124 $ 14,160,275
-62-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
E. CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED COMPONENT UNITS
(continued)
Complete financial statements and financial records of these component units can be obtained from their
respective administrative offices:
Orient Mosquito District Fishers Island Waste
145 Platt Road Management District
Orient, NY 11957 Fishers Island, NY 06390
Cutchogue-New Suffolk Orient-East Marion
Park District Park District
P.O. Box 311 P.O. Box 12
Cutchogue, NY 11935 Orient, NY 11957
Southold Park District Mattituck Park District
P.O. Box 959 P.O. Box 1413
Southold, NY 11971 Mattituck, NY 11952
Fishers Island Ferry District
P.O. Box H
Fishers Island, NY 06390
F. TRANSFER TAX
A 2.0% transfer tax is applied to sales of vacant land amounts in excess of$75,000 or sales of improved land
in excess of$200,000 located within the Town. Receipts are recorded in the Community Preservation Fund
and are used for the purchase and/or preservation of agricultural land, open space, parks, or historic
preservation sites. Conveyance of real property for open space, parks or historic preservation purposes and
certain first-time home buyers are exempt from this tax.
Beginning on April 1, 2023, a 0.5% transfer tax is applied to sales of vacant land amounts in excess of
$75,000 or sales of improved land in excess of$200,000 located within the Town. Receipts are recorded in
the Affordable Housing Fund and are used for affordable housing initiatives. Conveyance of real property for
open space, parks or historic preservation purposes and certain first-time home buyers are exempt from this
tax.
G. CONDUIT DEBT OBLIGATIONS
The SLDC may issue revenue bonds to provide financial assistance to not-for-profit corporations for the
acquisition of construction and equipment facilities for not-for-profits deemed to be in the public interest or
refunding high-interest debt. The bonds are required to be secured by the property financed and are payable
solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of
the acquired facilities transfers to the not-for-profit organization served by the bond issuance.
Neither the SLDC, the Town, nor any political subdivision of thereof, is obligated in any manner for repayment
of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements.
Conduit debt outstanding for the year ended December 31, 2023 totaled $26,805,340.
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TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
H. RECLASSIFICATION
In the Town's financial statements for the year ended December 31, 2022, the affordable housing fund was
reported in the general fund part town fund. For the year ended December 31, 2023, the affordable housing
fund was reported separately as a nonmajor fund. Fund balance at the beginning of the year was reclassified
to conform to this presentation.The chart below details the changes to opening fund balance.
As Reported As Restated Change
Fund balance,beginning of year
General fund part town $ 4,023,012 $ 2,694,239 $ (1,328,773)
Affordable housing fund -0- 1,328,773 1,328,773
Total $ 4,023,012 $ 4,023,012 $ -0-
I. RESTATEMENT
During the year ended December 31, 2023, the Town identified a component unit which was not previously
included in the Town's financial reporting entity. The Town determined that the component unit, the Southold
Local Development Corporation ("SLDC") must be reported as a blended component unit, and has accounted
for the SLDC as a proprietary fund. The chart below details the changes to assets, liabilities, and net position
as reported and as restated. Amounts listed below represent the changes to opening balances for both the
proprietary fund statements and the government-wide statements.
As Reported As Restated Change
Total assets $ -0- $ 168,051 $ 168,051
Total liabilities $ -0- $ 1,750 $ 1,750
Net position -0- 166,301 166,301
Total liabilities and net position $ -0- $ 168,051 $ 168,051
J. SUBSEQUENT EVENTS
On September 19, 2024, the Town issued $18,354,160 Bond Anticipation Notes with an annual interest rate of
4.00% and a premium of$184,826 which mature on September 19, 2025.
K. RECENT PRONOUNCEMENTS
The Governmental Accounting Standards Board (GASB) has issued the following Statements that may have
an impact on the Town's financial reporting:
Statement No. 99, "Omnibus 2022", was issued to enhance comparability in accounting and
financial reporting and consistency of authoritative language on various topics. The requirements of
this Statement are effective for certain requirements effective for the year ending December 31,
2023. The remaining requirements are effective for the year ending December 31, 2024.
Statement No. 100, "Accounting Changes and Error Corrections — an Amendment of GASB
Statement No. 62", this Statement has been issued to enhance accounting and financial reporting
requirements for accounting changes and error corrections to provide more understandable,
reliable, relevant and comparable information for making decisions or assessing accountability. The
requirements of this Statement are effective for the year ending December 31, 2024.
Statement No. 101, "Compensated Absences", this Statement has been issued to update the
recognition and measurement guidance for compensated absences. The requirements of this
Statement are effective for the year ending December 31, 2024.
-64-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
K. RECENT PRONOUNCEMENTS (continued)
Statement No. 103, "Financial Reporting Model Improvements", has been issued to improve key
components of the financial reporting model to enhance its effectiveness in providing information
that is essential for decision making and assessing a government's accountability. The requirements
of this Statement are effective for the year ending December 31, 2026.
Statement No. 104, "Disclosure of Certain Capital Assets", has been issued to improve disclosures
about certain types of capital assets by requiring additional disclosures for capital assets held for
resale (historical cost and accumulated depreciation and carrying amount of debt for which capital
asset is pledged as collateral) as well as requiring certain types of assets to be disclosed separately
in the capital asset footnote (such as right to use assets recognized from lease liabilities,
subscription liabilities and public-private and public-public partnerships and availability payment
arrangements). The requirements of this Statement are effective for the year ending December 31,
2026.
The Town is currently evaluating the impact of the above pronouncements.
-65-
REQUIRED SUPPLEMENTARY
INFORMATION OTHER THAN
MANAGEMENT'S DISCUSSION AND
ANALYSIS
Schedules of Revenues, Expenditures and
Changes in Fund Balance - Budget and
Actual Major Governmental Funds and
Schedule
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
The budgets are adopted on a basis of accounting consistent with
GAAP. In the event that actual revenues received exceed
budgeted amounts, additional budgetary appropriations are made.
The Capital Projects and Special Grant Funds are budgeted on a
project or grant basis.
TOWN OF SOUTHOLD
GENERALFUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE- BUDGET AND ACTUAL
REQUIRED SUPPLEMENTARY INFORMATION
Year Ended December 31, 2023
Variance
Original Final with Final
Budget Budget Actual Encumbrances Budget
REVENUES
Real property taxes $ 31,031,438 $ 31,031,438 $ 31,031,438 $ -0-
Other real property tax items 348,400 348,400 341,687 (6,713)
Non-property tax items 1,288,673 1,288,673 1,759,073 470,400
Departmental income 411,270 411,270 460,247 48,977
Intergovernmental charges 274,257 274,257 264,494 (9,763)
Use of money and property 237,650 237,650 1,185,994 948,344
Licenses and permits 527,050 527,050 521,868 (5,182)
Fines and forfeitures 383,100 383,100 368,222 (14,878)
Sale of property and compensation for loss 67,500 67,500 172,781 105,281
Miscellaneous local sources 415,500 486,005 186,690 (299,315)
Interfund revenues 15,000 15,000 5,129 (9,871)
State aid 2,617,464 2,625,464 1,945,766 (679,698)
Federal aid 650,275 813,144 821,734 8,590
Total Revenues 38,267,577 38,508,951 39,065,123 556,172
EXPENDITURES
Current:
General government support 10,222,393 10,443,587 8,558,741 $ 134,756 1,750,090
Public safety 11,752,013 11,825,320 10,972,152 59,285 793,883
Public health 43,300 43,300 43,300 -0-
Transportation 511,360 598,320 569,855 28,465
Economic assistance and opportunity 1,582,862 1,587,632 1,374,421 797 212,414
Culture and recreation 538,192 560,611 460,048 4,090 96,473
Home and community services 683,613 716,965 452,870 14,020 250,075
Employee benefits 12,181,225 11,935,550 11,300,883 634,667
Debt service:
Principal 822,500 837,056 819,293 17,763
Interest 362,500 401,572 401,382 190
Total Expenditures 38,699,958 38,949,913 34,952,945 212,948 3,784,020
Excess(Deficiency)of Revenues
Over(Under)Expenditures (432,381) (440,962) 4,112,178 (212,948) 4,340,192
OTHER FINANCING USES
Transfers in 805,500 991,152 787,398 (203,754)
Transfers out (1,543,000) (1,986,629) (1,731,393) 255,236
Total Other Financing Uses (737,500) (995,477) (943,995) -0- 51,482
Net Change in Fund Balance $ (1,169,881) $ (1,436,439) 3,168,183 $ (212,948) $ 4,391,674
Fund Balance at Beginning of Year 23,167,078
Fund Balance at End of Year $ 26,335,261
See Independent Auditors' Report.
-66-
TOWN OF SOUTHOLD
HIGHWAY FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE- BUDGET AND ACTUAL
REQUIRED SUPPLEMENTARY INFORMATION
Year Ended December 31, 2023
Variance
Original Final with Final
Budget Budget Actual Encumbrances Budget
REVENUES
Real property taxes $ 6,421,797 $ 6,421,797 $ 6,421,797 $ -0-
Other real property tax items 53,000 53,000 60,524 7,524
Use of money and property 10,000 10,000 221,069 211,069
Licenses and permits 40,000 40,000 162,070 122,070
Sale of property and compensation for loss 5,500 5,500 8,199 2,699
Miscellaneous local sources 3,182 3,182
State aid 961,736 1,172,083 1,113,720 (58,363)
Federal aid 485,000 -0-
Total Revenues 7,977,033 7,702,380 7,990,561 288,181
EXPENDITURES
Current:
General government support 9,183 19,187 17,749 1,438
Transportation 4,398,298 4,599,813 3,981,755 $ 32,513 585,545
Employee benefits 2,143,861 2,072,478 1,937,796 134,682
Debt Service:
Principal 266,500 318,304 318,222 82
Interest 79,000 89,895 89,667 228
Total Expenditures 6,896,842 7,099,677 6,345,189 32,513 721,975
Excess(Deficiency)of Revenues
Over(Under)Expenditures 1,080,191 602,703 1,645,372 (32,513) 1,010,156
OTHER FINANCING USES
Transfers out (1,510,000) (1,517,512) (1,516,686) 826
Total Other Financing Uses (1,510,000) (1,517,512) (1,516,686) -0- 826
Net Change in Fund Balance $ (429,809) $ (914,809) 128,686 $ (32,513) $ 1,010,982
Fund Balance at Beginning of Year 4,167,836
Fund Balance at End of Year $ 4,296,522
See Independent Auditors' Report.
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TOWN OF SOUTHOLD
COMMUNITY PRESERVATION FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE- BUDGET AND ACTUAL
REQUIRED SUPPLEMENTARY INFORMATION
Year Ended December 31, 2023
Variance
Original Final with Final
Budget Budget Actual Encumbrances Budget
REVENUES
Non-property tax items $ 10,000,000 $ 10,000,000 $ 11,401,403 $ 1,401,403
Use of money and property 25,000 25,000 775,300 750,300
Sale of property and compensation
for loss 27 27
Miscellaneous local sources 6,227 6,227
Total Revenues 10,025,000 10,025,000 12,182,957 2,157,957
EXPENDITURES
Current:
General government support 86,608 92,108 32,374 $ 5,646 54,088
Home and community services 20,725,257 20,664,757 6,807,949 2,250 13,854,558
Employee benefits 124,428 124,428 73,775 50,653
Debt service:
Principal 1,661,515 1,661,515 1,661,515 -0-
Interest 411,572 411,572 411,571 1
Total Expenditures 23,009,380 22,954,380 8,987,184 7,896 13,959,300
Excess(Deficiency)of Revenues
Over(Under)Expenditures (12,984,380) (12,929,380) 3,195,773 (7,896) 16,117,257
Net Change in Fund Balance $ (12,984,380) $ (12,929,380) 3,195,773 $ (7,896) $ 16,117,257
Fund Balance at Beginning of Year 29,417,781
Fund Balance at End of Year $ 32,613,554
See Independent Auditors' Report.
-68-
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TOWN OF SOUTHOLD
SCHEDULE OF PENSION CONTRIBUTIONS
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended December 31, 2023
Contributions
Recognized by the Plan Contribution
Contractually in Relation to the Contribution as a Percentage
Years Ended Required Contractually Required Deficiency Covered of Covered
December 31, Contributions Contributions (excess) Payroll Payroll
ERS
2023 $ 1,656,498 $ 1,656,498 $ -0- $ 13,927,431 11.89%
2022 1,639,109 1,639,109 -0- 13,356,709 12.27%
2021 1,975,904 1,975,904 -0- 13,064,163 15.12%
2020 1,857,925 1,857,925 -0- 13,150,975 14.13%
2019 1,825,922 1,825,922 -0- 13,396,868 13.63%
2018 1,709,862 1,709,862 -0- 12,081,905 14.15%
2017 1,740,156 1,740,156 -0- 11,706,859 14.86%
2016 1,783,174 1,783,174 -0- 11,594,297 15.38%
2015 1,981,226 1,981,226 -0- 11,429,154 17.33%
2014 2,053,052 2,053,052 -0- 11,076,674 18.53%
2013 2,362,280 2,362,280 -0- 10,713,710 22.05%
PFRS
2023 $ 1,929,136 $ 1,929,136 $ -0- $ 7,676,848 25.13%
2022 1,881,986 1,881,986 -0- 7,308,743 25.75%
2021 1,819,083 1,819,083 -0- 7,230,653 25.16%
2020 1,618,733 1,618,733 -0- 7,140,672 22.67%
2019 1,583,285 1,583,285 -0- 6,843,730 23.13%
2018 1,606,947 1,606,947 -0- 6,943,972 23.14%
2017 1,677,894 1,677,894 -0- 6,971,643 24.07%
2016 1,587,581 1,587,581 -0- 7,139,568 22.24%
2015 1,762,500 1,762,500 -0- 6,769,147 26.04%
2014 1,455,243 1,455,243 -0- 6,737,987 21.60%
2013 2,073,878 2,073,878 -0- 6,127,253 33.85%
Note-Amounts presented for each year were determined as of December 31 st and the contractually required
contributions are based on the amounts invoiced by the New York State Local Retirement System.
See Independent Auditors' Report.
-70-
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OTHER REPORTS
COPKF
OCONNOR
DAY I E
ACCOUNTANTS AND ADVISORS
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
Independent Auditors' Report
The Honorable Supervisor and Town Board
of the Town of Southold, New York
We have audited, in accordance with the 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 governmental
activities, business-type activities, the aggregate discretely presented component units, each major fund
and the aggregate remaining fund information of the Town of Southold, New York ("Town") as of and for
the year ended December 31, 2023, and the related notes to the financial statements, which collectively
comprise the Town's basic financial statements, and have issued our report thereon dated December 20,
2024. Our report includes the following opinions:
Opinion Unit Type of Opinion
Governmental Activities Unmodified
Business-type Activities Unmodified
Aggregate Discretely Presented Component
Units Disclaimer
General Fund Unmodified
Highway Fund Unmodified
Capital Projects Fund Unmodified
Community Preservation Fund Unmodified
Southold Local Development Corporation Unmodified
Aggregate Remaining Fund Information Unmodified
Our report includes a reference to other auditors who audited the financial statements of Southold Local
Development Corporation, as described in our report on the Town's financial statements. This report
does not include the results of the other auditors testing of internal control over financial reporting or
compliance and other matters that are reported on separately by those auditors.
The financial statements of the Town of Southold's discretely presented component units, were not
audited as of the report date, nor were we able to satisfy ourselves as to those financial activities by
other auditing procedures. The unaudited discretely presented component units represent 100% of the
assets, net position, and revenues of the aggregate discretely presented component units.
PKF O'CONNOR DAVIES, LLP
878 Veterans Memorial Highway,41"Floor, Hauppauge, NY 11788 I Tel:631.434.9500 I Fax:631.434.9518 I www.pkfod.com
PKF O'Connor Davies,LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability
for the actions or inactions on the part of any other individual member firm or firms.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Town'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 opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the Town's
internal control. Accordingly, we do not express an opinion on the effectiveness of the Town'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 Town's financial statements will not be prevented, or detected and
corrected, on a timely basis. 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 were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town'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
Town'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 Town's internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
)OW N /
PKF O'Connor Davies, LLP
Hauppauge, New York
December 20, 2024
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