HomeMy WebLinkAbout2022 TOWN OF SOUTHOLD, NEW YORK
FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
(WITH INDEPENDENT AUDITORS' REPORT)
For the Year Ended December 31, 2022
FINANCIAL
SECTION
TABLE OF CONTENTS
FINANCIAL SECTION
Page
IndependentAuditors' Report...................................................................................................................... 1-4
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis..................................................................................................... 5-16
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:
Statementof Net Position .......................................................................................................................... 17
Statementof Activities................................................................................................................................ 18
Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet and Reconciliation of the Governmental Funds Balance Sheet to
the Statement of Net Position............................................................................................ 19-20
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.......................................................... 21-22
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position....................................................................................................... 23
Statement of Changes in Fiduciary Net Position................................................................................... 24
Notes to Financial Statements...................................................................................................................... 25-59
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN
MANAGEMENT'S DISCUSSION AND ANALYSIS
Schedule of Revenues, Expenditures, and Changes in Fund Balance- Budget and Actual:
GeneralFund.............................................................................................................................................. 60
HighwayFund............................................................................................................................................. 61
Community Preservation Fund.......................................................................................... 62
Schedule of Changes in the Town's Total Other Postemployment Benefits Liability and
RelatedRatios............................................................................................................... 63
Schedule of Pension Contributions....................................................................................... 64
Schedule of Proportionate Share of the Net Pension Liability(Asset)............................................ 65
TABLE OF CONTENTS (continued)
OTHER SUPPLEMENTARY INFORMATION
Page
Combining Fund Statements:
Nonmajor Governmental Funds:
CombiningBalance Sheet...................................................................................................................... 66
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances......................... 67
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.............................................................. 68-69
PKF
CCONNOR
DAVI 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, 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, 2022, 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
Aggregate Discretely Presented Component
Units Disclaimer
General Fund Unmodified
Highway Fund Unmodified
Capital Projects Fund Unmodified
Community Preservation Fund Unmodified
Aggregate Remaining Fund Information Unmodified
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.
Unmodified Opinions on Governmental 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, each major fund, and the aggregate
remaining fund information of the Town as of December 31, 2022, 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.
PKF O'CONNOR DAVIES, LLP
878 Veterans Memorial Highway,41"Floor, Hauppauge, NY 11788 1 Tel:631.434.9500 1 Fax:631.434.9518 1 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.
Basis for Disclaimer of Opinion and Unmodified Opinions
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.
Matter Giving Rise to Disclaimer of Opinion on the Aggregate Discretely Presented Component
Units
The financial statements of 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
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 Waste Management
District, Cutchogue — New Suffolk Park District, Southold 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 32%, 40%, and 26% of the assets, net position, and revenues, respectively, of the
Town's aggregate discretely presented component units. The financial statements of the Fishers
Island Ferry District were audited by other auditors.
Change in Accounting Principle
We draw attention to Note B3 in the notes to financial statements which disclose the effects of the
Town's adoption of the provisions of Governmental Accounting Standards Board ("GASB")
Statement No. 87, "Leases". 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.
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.
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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.
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.
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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 October 24,
2023 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.
PKF O'Connor Davies, LLP
Hauppauge, New York
October 24, 2023
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REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2022
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, 2022.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of the primary governmental activities of the Town exceeded its
liabilities and deferred inflows at the close of 2022 by$123,949,122 (net position).
• The Town's primary governmental activities net position increased by$5,632,672.
• As of the close of 2022, the Town's governmental funds reported combined ending fund balances
of$67,514,848. Of this amount, $1,075,271 is not in spendable form or is required to remain intact.
The remaining $66,439,577 or approximately 98.4% of total fund balance is in spendable form with
various levels of spending constraint: restricted, committed, assigned, or unassigned (see Note
B.2).
• At the end of 2022, the Town's total fund balance for the General Fund was $23,167,078, an
increase of$4,249,611 or 22.46% from the prior year. The assigned and unassigned fund balance
for the General Fund was $21,561,893 or 64.0% of total General Fund expenditures and other
uses.
• The Town's total long-term bonded debt was $19,830,000, excluding premiums of $1,404,118, a
decrease of 10.6%from 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.
The Town's government-wide financial statements include both the governmental 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.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2022
OVERVIEW OF THE FINANCIAL STATEMENTS (continued)
Government-wide Financial Statements (continued)
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.
Component Units- 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 as discretely presented.
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 two categories: governmental 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 ten (10) 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 six (6) other
governmental funds are combined into a single, aggregated presentation.
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".
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.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2022
OVERVIEW OF THE FINANCIAL STATEMENTS (continued)
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.
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
$123,949,122 at the close of the most recent year.
Condensed Statement of Net Position
Primary Governmental Activities
December 31,
2022 2021*
Assets
Current and other assets $ 83,015,126 $ 67,269,075
Noncurrent and other assets 4,779,979 1,691,896
Capital assets 205,952,058 200,302,455
Total Assets 293,747,163 269,263,426
Deferred Outflows of Resources 29,797,186 44,607,499
Liabilities
Current and other liabilities 11,841,722 9,453,933
Long-term liabilities 158,016,915 155,276,568
Total Liabilities 169,858,637 164,730,501
Deferred Inflows of Resources 29,736,590 30,823,974
Net Position
Net investment in capital assets 177,768,589 170,163,147
Restricted-Community Preservation 29,417,781 23,023,229
Unrestricted (deficit) (83,237,248) (74,869,926)
Total Net Position $ 123,949,122 $ 118,316,450
*The December 31, 2021 noncurrent and other assets, capital assets, long-term liabilities and
deferred inflows of resources were restated due to the implementation of GASB Statement No.
87"Leases". See Note B3.
Total assets and deferred outflows of resources of the primary government as of December 31, 2022 were
$323,544,349, an increase of$9,673,424 from the prior year. Total liabilities and deferred inflows of resources
as of December 31, 2022 were $199,595,227, which represents an increase of$4,040,752 from December 31,
2021. This resulted in a net position of $123,949,122, an increase of $5,632,672 from net position of
$118,316,450 as of December 31, 2021. Of the Town's net position, $177,768,589 was invested in capital
assets and $29,417,781 was restricted for community preservation, leaving an unrestricted deficit of
$83,237,248.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2022
GOVERNMENT-WIDE FINANCIAL ANALYSIS (continued)
By far, the largest portion of the Town's net position is $177,768,589 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.
Statement of Activities
Primary Governmental Activities
For the years ended December 31,
2022 2021
Program Revenues
Charges for services $ 5,156,370 $ 5,447,025
Operating grants and contributions 683,583 801,171
Capital grants and contributions 1,282,914 1,396,399
7,122,867 7,644,595
General Revenues
Real property taxes 40,410,416 39,135,166
Other real property tax items 432,325 76,805
Non-property tax items 15,748,704 16,101,389
Interest earnings 864,004 270,501
State aid- unrestricted 2,680,792 2,876,423
Other 613,743 655,655
60,749,984 59,115,939
Total Revenues 67,872,851 66,760,534
Program Expenses
General government support 16,031,758 13,627,768
Public safety 25,463,295 22,139,202
Public health 43,300 43,300
Transportation 8,553,838 7,245,113
Economic assistance and opportunity 2,721,975 2,121,134
Culture and recreation 693,765 714,288
Home and community services 7,750,011 7,264,917
Interest on debt 982,237 943,523
Total Expenses 62,240,179 54,099,245
Increase in Net Position 5,632,672 12,661,289
Net Position, beginning of year 118,316,450 105,655,161
Net Position, end of year $ 123,949,122 $ 118,316,450
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2022
GOVERNMENT-WIDE FINANCIAL ANALYSIS (continued)
Net position, from all government activities, increased by$5,619,923 in the current year.
Key elements of the governmental activities are:
• Overall program revenues decreased by$521,728 from the prior year. Charges for services decreased by
$290,655 from the prior year due to decreased building inspection fees. Operating grants and
contributions decreased by $117,588 primarily due to a decrease in federal aid from the Federal
Emergency Management Agency and from the Coronavirus Aid, Relief, and Economic Security Act.
Capital grants and contributions decreased by $113,485 from the prior year due to a decrease in capital
donations and State grants.
• General revenues increased by $1,634,045 from the prior year. This was primarily due to the increase in
property taxes of$1,275,250 due to the Town adopting a local law to pierce the tax cap in 2022, and an
increase in interest earnings of$593,503 due to an increase in interest rates.
• Overall expenses increased by $8,140,934 due to an increase in employee benefit expenses as
compared to the prior year.
Total Revenue(Cost)of Services
Net Cost of Services for Governmental Activities
For the years ended December 31,
Total Cost of Services Program Revenues Net(Cost)of Services
2022 2021 2022 2021 2022 2021
General government support $ 16,031,758 $ 13,627,768 $ 707,019 $ 615,736 $ (15,324,739) $ (13,012,032)
Public safety 25,463,295 22,139,202 1,250,163 1,452,718 (24,213,132) (20,686,484)
Public health 43,300 43,300 5,384 14,102 (37,916) (29,198)
Transportation 8,553,838 7,245,113 1,237,729 1,420,859 (7,316,109) (5,824,254)
Economic assistance
and opportunity 2,721,975 2,121,134 382,622 431,367 (2,339,353) (1,689,767)
Culture and recreation 693,765 714,288 269,434 252,112 (424,331) (462,176)
Home and community
services 7,750,011 7,264,917 3,270,516 3,457,701 (4,479,495) (3,807,216)
Interest on debt 982,237 943,523 (982,237) (943,523)
$ 62,240,179 $ 54,099,245 $ 7,122,867 $ 7,644,595 $ (55,117,312) $ (46,454,650)
The total cost of all governmental activities this year was $62,240,179. The net cost of these services after being
subsidized by program revenues of$7,122,867 was $55,117,312.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2022
GOVERNMENT-WIDE FINANCIAL ANALYSIS (continued)
Expenses and Program Revenues-Governmental Activities for the Year Ended December 31, 2022
$30,000,000
$25,000,000
®Expenses
$20,000,000 ®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 Homeand community Ime rest on debt
support opportunity services
Revenues by Source - Governmental Activities for the Year Ended December 31, 2022
Operating grants and Capital grants and
contributions contributions
1% 2%
Other general
revenues
3%
t
Non-property tax
items
23%
Charges for �) Real property
services taxes
8% 59%
State aid-
unrestricted
4%
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2022
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 - $1,075,271 (inherently nonspendable) includes the portion of net
resources that cannot be spent because they must be maintained intact.
• Restricted fund balance - $32,587,452 (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 - $2,587,099 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 - $11,370,014 (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 - $19,895,012 (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, 2022 and 2021, and the
amount of change in relation to the prior year.
Increase
2022 2021 (Decrease)
Revenues:
Real property taxes $ 40,410,416 $ 39,135,166 $ 1,275,250
Other real property tax items 432,325 76,805 355,520
Non-property tax items 15,748,704 16,101,389 (352,685)
Departmental income 4,011,054 4,240,766 (229,712)
Intergovernmental charges 123,656 108,753 14,903
Use of money and property 793,929 257,928 536,001
Licenses and permits 748,579 734,685 13,894
Fines and forfeitures 323,203 398,097 (74,894)
Sale of property and compensation for loss 381,263 376,488 4,775
Miscellaneous local sources 307,322 309,965 (2,643)
Interfund revenues 5,756 138,371 (132,615)
State aid 4,177,217 3,912,235 264,982
Federal aid 420,345 964,236 (543,891)
Total Governmental Fund Revenues $ 67,883,769 $ 66,754,884 $ 1,128,885
Expenditures:
General government support $ 8,081,140 $ 8,251,476 $ (170,336)
Public safety 12,105,160 12,101,570 3,590
Public health 43,300 43,300 -0-
Transportation 4,625,847 4,496,658 129,189
Economic assistance and opportunity 1,315,973 1,190,441 125,532
Culture and recreation 331,389 349,272 (17,883)
Home and community services 9,366,936 11,309,533 (1,942,597)
Employee benefits 13,939,094 13,438,165 500,929
Capital Outlay 2,767,758 2,303,810 463,948
Debt service principal and interest 3,758,531 3,066,162 692,369
Total Governmental Fund Expenditures $ 56,335,128 $ 56,550,387 $ (215,259)
Other financing sources and uses:
Debt proceeds $ 2,541,841 $ 1,100,000 $ 1,441,841
Lease proceeds 64,393 64,393
Transfers in 2,587,488 1,276,796 1,310,692
Transfers out (2,587,488) (1,276,796) (1,310,692)
Total Governmental Fund Other Sources and Uses $ 2,606,234 $ 1,100,000 $ 1,506,234
-11-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2022
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS (continued)
Governmental Funds (continued)
• Although the Town appropriated $1,000,000 of prior year fund balance to finance the 2022 operations,
excluding open purchase orders brought forward, the total fund balance increased $14,154,875.
Governmental revenues increased by $1,128,885, which is primarily due to increases in real property
taxes of$1,275,250, use of money and property of$536,001, other real property tax items of$355,520,
and state aid of $264,982, offset by decreases in non-property tax items of $352,685, departmental
income of$229,712, and federal aid of$543,891.
• Overall, governmental expenditures decreased by $215,259, which is primarily due to decreases in
general government support of $170,336 and home and community services of $1,942,597 offset by
increases in employee benefits of $500,929, capital outlay of $463,948 and debt service of $692,369.
The increase in home and community services is the result of land acquisitions in the community
preservation fund in the current year which exceed those in the prior year.
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 $23,167,078, an increase of $4,249,611 or 22.5% from the prior year. Of
this amount, $750,389 is not in spendable form (i.e. inventory and prepaid items). The committed fund
balance of $854,796 represents park and recreation subdivision fees assessed through Town Code which
can only be expended on park, playground, or other recreational purposes. The remaining $21,561,893 of the
fund balance is in spendable form as follows: $497,000 is assigned for insurance claims; $900,000 has been
assigned by the Town Board for the subsequent year's budget and $269,881 has been assigned for
encumbrances resulting from open purchase orders, and the remaining $19,895,012 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 64.0% and 68.8%, respectively, of total general fund expenditures and other financing
uses.
The key elements of the fund balance increase of$4,249,611 are as follows:
• General government support was $1,345,009 under budget primarily due to personal services coming in
under budget by approximately $430,000 due to unfilled positions during the year, and contractual
expenditures under budget of approximately $930,000 including $400,000 budgeted for lead line
replacements which were not performed.
• Public safety was $829,889 less than budgeted which resulted mainly from savings of approximately
$750,000 in personnel costs due to unfilled positions and conservative overtime usage, equipment
purchases under budget of approximately$70,000.
• Employee benefits were $1,186,634 under budget due to the Town conservatively budgeting for
retirement contributions and medical insurance.
• State and federal aid exceeded budget expectations by$760,046 and $301,622 respectively.
• Use of money and property exceeded budget expectations by $267,350 due to an increase in interest
rates.
Highway Fund
At the end of the current year, the total fund balance of the highway fund was$4,167,836, an increase of$509,543
or 13.9%from the prior year. Of this amount, $204,755 is not in spendable form (i.e. prepaid and inventory items).
The remaining $3,963,081 of fund balance is in spendable form as follows: $400,000 has been assigned by the
Town Board for the subsequent year's budget, $29,809 has been assigned for encumbrances resulting from open
purchase orders, and the remaining $3,533,272 is assigned for highway purposes.
-12-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2022
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS (continued)
Governmental Funds (continued)
Highway Fund (continued)
The key elements of the fund balance increase of$509,543 are as follows:
• Transportation costs were $459,260 under budget as personal services came in under budget by
$307,000 due to due to conservative overtime budgeting, and $135,000 in equipment purchases being
lower than budgeted.
• Employee benefits savings of $279,212 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 $61,331
and $53,690 respectively. Those positive variances were offset by state aid being under budget by
$106,839.
Capital Projects Fund
At the end of the current year, the capital projects fund had total fund balance of$4,713,891, an increase of
$1,888,447 from the prior year. This increase resulted from debt proceeds of$2,541,841, lease proceeds of
$64,393, transfers in of $1,866,626, and revenues of $183,345, offset by capital outlay expenditures of
$2,767,758.
Community Preservation Fund
The Community Preservation Fund's total fund balance, which is restricted for land preservation acquisitions,
increased by $6,394,552 to $29,417,781. The increase in fund balance is primarily attributable to non-
property tax revenues (proceeds from the 2% tax on property sales) of $13,577,599 offset by home and
community services expenditures of$5,240,783 and debt service expenditures totaling $2,059,955.
Nonmajor Governmental Funds
At the end of the current year, the total fund balance of the nonmajor governmental funds was $6,048,262,
increasing $1,112,722 from the prior year. Of this amount, $114,307 is not in spendable form (i.e. prepaids
and inventory). The committed fund balance of$1,732,303 is related to housing fund fees assessed through
Town Code which can only be expended on affordable housing projects in the Town. The remaining
$4,201,652 of the fund balance is in spendable form as follows; $225,000 for subsequent year's budget,
$215,214 assigned for encumbrances resulting from open purchase orders, and the remaining $3,761,438 of
fund balance is assigned for nonmajor governmental fund purposes.
The key elements of the fund balance increase of$1,112,722 are as follows:
• The Part Town's fund balance is $4,023,012, an increase of$720,436 from the prior year which was
mainly due to expenditures coming in lower than budgeted by approximately $785,000 which
consisted of approximately $65,000 in general government support, approximately $180,000 in public
safety, approximately $290,000 in home and community service, and approximately $250,000 in
employee benefits. Revenues exceeded budgeted expectations by approximately $45,000, primarily
due to licenses and permits exceeding budgeted expectations by approximately $25,000, and use of
money and property coming in over budget by approximately$20,000. These variances were offset by
a planned deficit of$70,000, and prior year encumbrances of approximately$40,000.
Solid Waste Management's District fund balance is $1,939,499, an increase of$387,536, which was
due to expenditures coming in lower than budgeted by approximately $490,000, primarily due
approximately $355,000 in home and community, and approximately $90,000 in employee benefits,
and revenues exceeding budgeted amounts by approximately $40,000, offset by a planned deficit of
$125,000, and prior year encumbrances of approximately$20,000.
-13-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2022
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS (continued)
Governmental Funds (continued)
General Fund Budgetary Highlights
The Town appropriated expenditures in the original general fund budget in excess of estimated revenues in the
amounts of$953,736, inclusive of$153,736 of encumbrances, by assigning fund balance from the prior year.
Actual revenues and other financing sources were greater than anticipated by$1,220,451. Actual expenditures
and other uses in all budgetary line items were less than the budgetary appropriation by$4,082,129.
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$42,477 for various grant funds.
• Appropriated fund balance increased by $173,000 including $33,000 for transfers to the capital
projects fund, and $140,000 for land preservation.
• The Town increased their appropriations by $196,004 in transportation to account for a federal grants
passed through to Fishers Island Ferry District.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets,
As of December 31, 2022, the primary government had $205,939,309 in net capital assets including land and
land development rights, buildings, improvements, machinery and equipment, intangibles and infrastructure.
The Town's component units had $14,223,962 in net capital assets including land, buildings, improvements,
machinery and equipment, and infrastructure.
Capital Assets at December 31,
Primary Government 2022 2021
Land $ 17,237,847 $ 17,237,847
Land development rights 148,201,050 143,133,133
Construction in progress 976,331 1,100,189
Buildings 21,553,092 21,458,581
Improvements otherthan buildings 16,940,190 16,913,211
Machineryand equipment 17,079,001 15,959,276
Software 1,335,425 1,233,802
Infrastructure 91,884,086 89,539,411
Right-to-use lease asset" 228,692 164,299
Total Capital Assets 315,435,714 306,739,749
Less:accumulated depreciation/amortization 109,483,656 106,437,294
Primary Government-Total Net Capital Assets $ 205,952,058 $ 200,302,455
Component Units
Land $ 2,103,162 $ 2,103,162
Construction in progress 139,982 119,762
Buildings 14,356,309 14,189,747
Improvements otherthan buildings 2,557,247 2,557,247
Machineryand equipment 6,513,966 6,398,942
Infrastructure 5,683,886 5,500,714
Total Capital Assets 31,354,552 30,869,574
Less:accumulated depreciation 17,130,590 16,295,693
Component Units-Total Net Capital Assets $ 14,223,962 $ 14,573,881
*The December 31, 2021, right-to-use lease asset was restated due to the
implementation of GASB Statement No. 87 "Leases". See Note B3.
-14-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2022
CAPITAL ASSET AND DEBT ADMINISTRATION (continued)
Capital Assets (continued)
In 2022, the primary government's capital asset acquisitions were as follows:
• Land development rights of$5,067,917.
• Construction in progress of$371,010.
• Buildings of$94,511.
• Improvements other than buildings of$33,000.
• Machinery and equipment of$1,267,901.
• Software of$131,376.
• Infrastructure of$2,344,675.
• Right-to-use lease asset of$64,393.
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:
2023 2024 2025
Land/development rights
General Fund $ 5,050,000
Machinery and equipment
General Fund 745,000
Highway Fund 830,000 $ 477,000 $ 985,000
Buildings and improvements
General Fund 480,000
Infrastructure
General Fund 250,000 250,000 250,000
Highway Fund 850,000 850,000 850,000
Intangible-software
General Fund 5,500 5,500 5,500
$ 8,210,500 $ 1,582,500 $ 2,090,500
Additional information on the Town's capital assets can be found in Note CA to the financial statements.
Debt
At December 31, 2022, the Town had approximately $31 million in long-term general obligation bonds and
bond anticipation notes outstanding.
Outstanding Debt Governmental Activities
2022 2021
General obligation bonds payable' $ 19,830,000 $ 22,170,000
Bond anticipation notes 11,370,000 7,828,159
$ 31,200,000 $ 29,998,159
*This did 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 Aa1 as of December 31,2022.
-15-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2022
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, 2022 was 3.35%.
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 2023 fiscal year which factors in inflation and other adjustments to
revenues and expenditures as well as prior year positive and negative fund balances. The 2023 budget
includes an overall increase in real property tax revenues from the prior year of approximately 2.5% for the
general Town governmental activities.
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 2022, financial
assistance included state aid consisting of mortgage tax of $2,592,464 and consolidated highway and other
NYS Department of Transportation aid of $1,006,132. State aid per capita was $88,328, and other State aid
was $302,388. County sales tax was $1,490,273. 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 2023 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.
-16-
BASIC FINANCIAL
STATEMENTS
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF NET POSITION
December 31, 2022
Primary Nonmajor
Governmental Component
Activities Units
ASSETS
Current Assets:
Cash and investments $ 76,692,272 $ 3,976,665
Accounts receivable 412,138 50,915
State and federal aid receivables 704,178 147,755
Due from other governments 3,833,469
Loans receivable 250,000
Leases receivable 87,786
Due from primary government 632,576
Inventory of material and supplies 181,345
Prepaids 853,938 146,045
Total Current Assets 83,015,126 4,953,956
Noncurrent Assets:
Net Pension asset-ERS 3,263,655 378,004
Leases receivable 1,516,324
Non-depreciable capital assets 166,415,228 2,243,144
Depreciable capital assets,net of depreciation/amortization 39,536,830 11,980,818
Total Noncurrent Assets 210,732,037 14,601,966
Total Assets 293,747,163 19,555,922
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refundings 990,342
Pensions 15,480,730 864,475
Other postemployment benefits 13,326,114 283,684
Total Deferred Outflows of Resources 29,797,186 1,148,159
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities 2,668,964 349,494
Accrued interest payable 335,096
Bond anticipation notes payable 1,000,000 2,410,000
Due to component units 632,576
Due to other governments 160 33,344
Unearned revenue 3,173,896
Noncurrent liabilities due within one year:
General obligation bonds payable 2,435,000
Bond anticipation notes payable 615,000
Leases payable 45,862
Compensated absences 781,549 86,073
Claims and judgments payable 134,225
Estimated liability for landfill closure and post closure care costs 19,394
Total Current Liabilities 11,841,722 2,878,911
Noncurrent Liabilities:
General obligation bonds payable,inclusive of premiums 18,799,118
Bond anticipation notes payable 9,755,000
Leases payable 142,799
Compensated absences 8,493,854 258,221
Claims and judgments payable 362,775
Estimated liability for landfill closure and post closure care costs 289,296
Net pension liability-PFRS 973,100 -
Total OPEB liability 119,200,973 867,113
Total Noncurrent Liabilities 158,016,915 1,125,334
Total Liabilities 169,858,637 4,004,245
DEFERRED INFLOWS OF RESOURCES
Lease related 1,564,122
Unearned revenue from real property taxes 7,475,979 632,576
Pensions 19,969,216 1,351,136
Other postemployment benefits 727,273 -
Total Deferred Inflows of Resources 29,736,590 1,983,712
NET POSITION
Net Investment in capital assets 177,768,589 11,950,411
Restricted-Community Preservation 29,417,781
Unrestricted(deficit) (83,237,248) 2,765,713
Total Net Position $ 123.949.122 $ 14.716.124
The notes to the financial statements are an integral part of this statement.
-17-
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF ACTIVITIES
Year Ended December 31, 2022
Net Revenue and
Program Revenues Changes in Net Position
Operating Capital
Charges for Grants and Grants and Primary Component
Function/Program Expenses Services Contributions Contributions Government Units
PRIMARY GOVERNMENT
General government support $ 16,031,758 $ 490,699 $ 88,483 $ 127,837 $ (15,324,739)
Public safety 25,463,295 1,050,603 84,865 114,695 (24,213,132)
Public health 43,300 5,384 (37,916)
Transportation 8,553,838 61,317 141,030 1,035,382 (7,316,109)
Economic assistance and opportunity 2,721,975 103,132 279,490 (2,339,353)
Culture and recreation 693,765 269,434 (424,331)
Home and community services 7,750,011 3,181,185 84,331 5,000 (4,479,495)
Interest on debt 982,237 (982,237)
Total Primary Government $ 62,240,179 $ 5,156,370 $ 683,583 $ 1,282,914 (55,117,312)
COMPONENT UNITS
General government support $ 128,446 $ (128,446)
Public health 34,350 (34,350)
Transportation 4,808,211 $ 3,387,122 17,444 $ 935,482 (468,163)
Culture and recreation 1,225,520 156,563 (1,068,957)
Home and community services 1,121,121 44,683 (1,076,438)
Interest on debt 31,625 (31,625)
Total Component Units $ 7,349,273 $ 3,588,368 $ 17,444 $ 935,482 (2,807,979)
GENERAL REVENUES
Real property taxes 40,410,416 3,121,781
Other real property tax items 432,325
Non-property tax items 15,748,704
Interest earnings 864,004 8,674
State aid-unrestricted 2,680,792
Other 613,743 160,155
Total General Revenues 60,749,984 3,290,610
Change in Net Position 5,632,672 482,631
Net Position at Beginning of Year 118,316,450 14,233,493
Net Position at End of Year $ 123,949,122 $ 14,716,124
The notes to the financial statements are an integral part of this statement.
-18-
TOWN OF SOUTHOLD
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2022
MAJOR GOVERNMENTAL FUNDS
Non-Major
Capital Community Governmental
General Highway Projects Preservation Funds Totals
ASSETS
Cash and investments $ 33,902,312 $ 4,399,151 $ 5,149,261 $ 26,874,289 $ 6,367,259 $ 76,692,272
Accounts receivable 51,983 7,820 8,912 65,611 277,812 412,138
Due from other funds 1,119,227 1,227,716 1,912,819 186 745,294 5,005,242
State and federal aid receivable 58,723 540,732 104,723 704,178
Due from other governments 1,302,574 2,512,671 18,224 3,833,469
Loans receivable 250,000 250,000
Leases receivable 1,604,110 1,604,110
Inventory of material and supplies 1,758 145,943 33,644 181,345
Prepaids 708,643 58,812 5,820 80,663 853,938
Total Assets $ 38,749,330 $ 6,380,174 $ 7,175,715 $ 29,458,577 $ 7,772,896 $ 89,536,692
LIABILITIES
Accounts payable and accrued
liabilities $ 1,542,018 $ 208,627 $ 536,755 $ 17,444 $ 364,120 $ 2,668,964
Claims and judgements 3,225 3,225
Bond anticipation notes payable 1,000,000 1,000,000
Due to other funds 3,032,826 808,805 918,085 23,352 222,174 5,005,242
Due to component units 632,576 632,576
Due to other governments 160 160
Unearned revenue 2,721,936 14,548 6,984 430,428 3,173,896
Total Liabilities 7,932,581 1,032,140 2,461,824 40,796 1,016,722 12,484,063
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 497,680 497,680
Lease related 1,564,122 1,564,122
Unearned revenue from
real property taxes 5,587,869 1,180,198 707,912 7,475,979
Total Deferred Inflows of Resources 7,649,671 1,180,198 -0- -0- 707,912 9,537,781
FUND BALANCES
Nonspendable 750,389 204,755 5,820 114,307 1,075,271
Restricted 3,175,491 29,411,961 32,587,452
Committed 854,796 1,732,303 2,587,099
Assigned 1,666,881 3,963,081 1,538,400 4,201,652 11,370,014
Unassigned 19,895,012 19,895,012
Total Fund Balances 23,167,078 4,167,836 4,713,891 29,417,781 6,048,262 67,514,848
Total Liabilities,Deferred Inflows of
Resources and Fund Balances $ 38,749,330 $ 6,380,174 $ 7,175,715 $ 29,458,577 $ 7,772,896 $ 89,536,692
The notes to the financial statements are an integral part of this statement.
-19-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
STATEMENT OF NET POSITION
December 31, 2022
Amounts reported for governmental activities in the Statement of Net Position are different because:
Total Fund Balances-Governmental Funds $ 67,514,848
Capital assets used in governmental activities are not financial resources and,
therefore, are not reported in the funds.
Capital assets- non-depreciable $ 166,415,228
Capital assets-depreciable/amortizable 149,020,486
Accumulated depreciation/amortization (109,483,656) 205,952,058
Deferred outflows of resources are included in the Statement of Net Position 29,797,186
Other long-term assets that are not available to pay for current period expenditures
and, therefore, are either deferred or not reported in the funds.
Net pension asset- ERS 3,263,655
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 (10,370,000)
General obligation bonds payable, inclusive of premiums (21,234,118)
Leases payable (188,661)
Compensated absences (9,275,403)
Claims and judgments payable (493,775)
Estimated liability for landfill closure and postclosure care costs (308,690)
Net pension liability- PFRS (973,100)
Total OPEB liability (119,200,973) (162,044,720)
Revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds. 497,680
Deferred inflows of resources are included in the Statement of Net Position (20,696,489)
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. (335,096)
Net Position of Governmental Activities $ 123,949,122
The notes to the financial statements are an integral part of this statement.
-20-
TOWN OF SOUTHOLD
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2022
MAJOR GOVERNMENTAL FUNDS
Non-Major
Capital Community Governmental
General Highway Projects Preservation Funds Totals
REVENUES
Real property taxes $ 29,943,980 $ 6,388,642 $ 4,077,794 $ 40,410,416
Other real property tax items 337,027 59,476 35,822 432,325
Non-property tax items 1,490,273 $ 13,577,599 680,832 15,748,704
Departmental income 536,637 3,474,417 4,011,054
Intergovernmental charges 123,656 123,656
Use of money and property 483,545 68,831 $ 1,104 207,373 33,076 793,929
Licenses and permits 370,411 58,690 319,478 748,579
Fines and forfeitures 323,203 323,203
Sale of property and compensation
for loss 85,447 5,719 290,097 381,263
Miscellaneous local sources 175,751 5,688 114,695 641 10,547 307,322
Interfund revenues 5,756 5,756
State aid 2,998,310 1,006,132 67,546 105,229 4,177,217
Federal aid 344,633 8,888 66,824 420,345
Total Revenues 37,218,629 7,602,066 183,345 13,785,613 9,094,116 67,883,769
EXPENDITURES
Current:
General government support 7,581,637 10,598 20,856 468,049 8,081,140
Public safety 10,468,535 1,636,625 12,105,160
Public health 43,300 43,300
Transportation 666,231 3,959,616 4,625,847
Economic assistance and
opportunity 1,315,973 1,315,973
Culture and recreation 331,389 331,389
Home and community services 343,616 5,240,783 3,782,537 9,366,936
Employee benefits 10,514,314 1,793,188 69,467 1,562,125 13,939,094
Capital Outlay 2,767,758 2,767,758
Debt Service:
Principal 808,498 284,972 1,580,373 285,751 2,959,594
Interest 211,591 44,295 479,582 63,469 798,937
Total Expenditures 32,285,084 6,092,669 2,767,758 7,391,061 7,798,556 56,335,128
Excess(Deficiency)of Revenues
Over(Under)Expenditures 4,933,545 1,509,397 (2,584,413) 6,394,552 1,295,560 11,548,641
OTHER FINANCING SOURCES(USES):
Debt proceeds 2,541,841 2,541,841
Lease proceeds 64,393 64,393
Transfers in 720,862 1,866,626 2,587,488
Transfers out (1,404,796) (999,854) (182,838) (2,587,488)
Total Other Financing
Sources(Uses) (683,934) (999,854) 4,472,860 -0- (182,838) 2,606,234
Net Change in Fund Balance 4,249,611 509,543 1,888,447 6,394,552 1,112,722 14,154,875
Fund Balances at Beginning of Year 18,917,467 3,658,293 2,825,444 23,023,229 4,935,540 53,359,973
Fund Balances at End of Year $ 23,167,078 $ 4,167,836 $ 4,713,891 $ 29,417,781 $ 6,048,262 $ 67,514,848
The notes to the financial statements are an integral part of this statement.
-21-
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, 2022
Net Change in Fund Balance-Total Governmental Funds $ 14,154,875
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 $ 8,873,894
Depreciation/amortization expense (3,224,291) 5,649,603
Revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds. (187,905)
Net change in deferred outflows of resources not reported in the governmental
fund statements:
Deferred charges on refundings (127,882)
Pension related amounts (4,103,434)
Other postemployment benefits (10,578,997) (14,810,313)
Net change in deferred inflows of resources not reported in the governmental
fund statements:
Pension related amounts 1,167,493
Other postemployment benefits (727,273) 440,220
Premiums on bond issuances recognized in governmental fund statements
when issued and capitalized and amortized in the Statement of Activities. 182,743
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 (2,541,841)
Leases issued (64,393)
Repayment of bond principal 2,340,000
Repayment of BAN principal 579,563
Repayment of lease principal 40,031 353,360
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 (412,189)
Claims and judgments payable 147,164
Estimated liability for landfill closure and postclosure care costs 52,003
Changes in net pension asset/(liability)proportionate share 5,307,172
Changes in OPEB liabilities (5,188,643)
Accrued interest payable (55,418) (149,911)
Change in Net Position of Governmental Activities $ 5,632,672
The notes to the financial statements are an integral part of this statement.
-22-
TOWN OF SOUTHOLD
STATEMENT OF FIDUCIARY NET POSITION
December 31, 2022
Custodial Fund
ASSETS
Cash and cash equivalents $ 19,330,210
Total Assets $ 19,330,210
LIABILITIES
Due to other governments $ 19,319,172
Other liabilities 11,038
Total Liabilities $ 19,330,210
The notes to the financial statements are an integral part of this statement.
-23-
TOWN OF SOUTHOLD
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
Year Ended December 31, 2022
Custodial Fund
ADDITIONS
Real property taxes collected for other governments $ 98,702,723
Bail collected 52,108
Total Additions 98,754,831
DEDUCTIONS
Payments of real property taxes to other governments 98,702,723
Bail returned or remitted 52,108
Total Deductions 98,754,831
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.
-24-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
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.
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.
-25-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1. REPORTING ENTITY(continued)
Discretely Presented Component Units(continued):
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.
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.
-26-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1. REPORTING ENTITY(continued)
Discretely Presented Component Units(continued):
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.
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:
-27-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (continued)
Fund Financial Statements (continued)
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.
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.
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.
-28-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
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.
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.
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").
-29-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET
POSITION/FUND BALANCE (continued)
CASH AND INVESTMENTS (continued)
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.
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:
-30-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND
NET/POSITION/FUND BALANCE (continued)
CAPITAL ASSETS (continued)
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 lease 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.
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.
-31-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
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)
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.
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.
-32-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES,AND NET
POSITION/FUND BALANCE (continued)
LEASES (continued)
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.
Lease assets are reported with other capital assets and 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, equity is classified as net position and displayed in three
components:
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).
-33-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
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)
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.
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.
-34-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
5. REVENUES AND EXPENDITURES (continued)
REAL PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES (continued)
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.
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
-35-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
5. REVENUES AND EXPENDITURES (continued)
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 PRONOUNCEMENTS
The Town has adopted all of the current Statements of the Governmental Accounting Standards Board
("GASB")that are applicable.
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 for issuance.
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.
-36-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
B. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY(continued)
1. BUDGETARY INFORMATION (continued)
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
exceeded the 2% property tax cap for the year ended December 31, 2022 after adopting a local
law in accordance with the New York State enacted Chapter 97, Laws of 2011 Real Property Tax
Levy Cap and Mandate Relief Provisions.
2. 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.
Capital Community Other
General Highway Projects Preservation Governmental
Fund Fund Fund Fund Funds Total
Fund Balances:
Nonspendable:
Long-term receivables
-lease related $ 39,988 $ 39,988
Inventory 1,758 $ 145,943 $ 33,644 181,345
Prepaids 708,643 58,812 $ 5,820 80,663 853,938
Total Nonspendable 750,389 204,755 $ -0- 5,820 114,307 1,075,271
Restricted for:
Unspent debt proceeds 3,155,723 3,155,723
Grantors and donor restrictions 19,768 19,768
Land/Land right purchases 29,411,961 29,411,961
Total Restricted -0- -0- 3,175,491 29,411,961 -0- 32,587,452
Comnitted for:
Parks and Recreation 854,796 854,796
Affordable Housing 1,732,303 1,732,303
Total Corrmitted 854,796 -0- -0- -0- 1,732,303 2,587,099
Assigned to:
Subsequent year's budget 900,000 400,000 225,000 1,525,000
Purchases on order
or contractual obligations 269,881 29,809 706,018 215,214 1,220,922
Special revenue funds 3,533,272 3,761,438 7,294,710
Capital projects 832,382 832,382
Judgments and claims 497,000 497,000
Total Assigned 1,666,881 3,963,081 1,538,400 -0- 4,201,652 11,370,014
Unassigned,reported in:
General Fund 19,895,012 19,895,012
Total Unassigned 19,895,012 -0- -0- -0- -0- 19,895,012
Total Fund Balances $ 23,167,078 $ 4,167,836 $ 4,713,891 $ 29,417,781 $ 6,048,262 $ 67,514,848
-37-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
B. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY(continued)
3. CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE
The Town implemented the provisions of GASB Statement No. 87, "Leases," for the year ended
December 31, 2022, which established a single model for lease accounting based on the concept that
leases are a financing of a "right-to-use" underlying asset. This statement requires a lessee to recognize a
lease liability and an intangible right-to-use lease asset. As a result, the Town has reported a cumulative
effect of change in accounting principle of$164,299 for the right-to-use leased assets and a ($164,299)
liability for leases payable for a cumulative effect of $0 to the December 31, 2021 net position of the
governmental activities. This statement also requires a lessor to recognize a lease receivable and lease
related deferred inflow of resources. As a result, the Town has reported a cumulative effect of change in
accounting principle of$1,691,896 for lease receivable, and a $1,691,896 for lease related deferred inflow
of resources, for a net cumulative effect of$0 to the December 31, 2021 fund balance of the general fund,
and net position of the governmental activities.
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, 2022, the Town's cash book balance was $95,963,104. This amount is inclusive of
fiduciary fund deposits of$19,330,210 but exclusive of petty cash of$1,738 and CLASS of$57,640. The
available bank balance was $96,249,135 exclusive of CLASS deposits. Of the bank balance, $9,782,303
was covered by Federal depository insurance, and $86,466,832 was covered by collateral held by the
Town's agents, third-party financial institutions, in the Town's name.
-38-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
C. DETAILED NOTES ON ALL FUNDS (continued)
1. CASH AND INVESTMENTS (continued)
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.
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 $57,640 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, 2022, the Town did not have any investments subject to credit risk, interest-rate risk
or concentration of credit risk.
-39-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
C. DETAILED NOTES ON ALL FUNDS (continued)
2. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
Interfund receivable and payable balances for the primary government at December 31, 2022 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 $ 1,119,227 $ 3,032,826
Highway Fund 1,227,716 808,805
Capital Projects Fund 1,912,819 918,085
Community Preservation Fund 186 23,352
Total Major Funds 4,259,948 4,783,068
Nonmajor Governmental Funds:
General Fund-Part-Town 174,637 27,396
Special Grant 148 -0-
East-West Fire Protection District 158,264 115,000
Southold Wastewater District 22 -0-
Fishers Island Sewer District 10,725 -0-
Solid Waste Management District 401,498 79,778
Total Nonmajor Funds 745,294 222,174
Total $ 5,005,242 $ 5,005,242
Interfund transfer balances for the primary government at December 31, 2022 represent capital project
transfers and risk retention transfers and are stated as follows:
Transfers In Transfers Out
Major Governmental Funds:
General Fund-Town-wide $ 720,862 $ 1,404,796
Highway Fund -0- 999,854
Capital Projects Fund 1,866,626 -0-
Total Major Funds 2,587,488 2,404,650
Nonmajor Governmental Funds:
General Fund- Part-Town -0- 64,896
Solid Waste Management District -0- 117,942
Total Nonmajor Funds -0- 182,838
Total $ 2,587,488 $ 2,587,488
-40-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
C. DETAILED NOTES ON ALL FUNDS (continued)
3. LEASES RECEIVABLE
The Town has entered into five 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 5-298 months. During 2022, the Town recognized
$127,774 of lease revenue in the general fund, and $48,978 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
2023 $ 88,845 $ 57,771 $ 146,616
2024 55,821 55,360 111,181
2025 58,185 53,364 111,549
2026 66,430 51,208 117,638
2027 71,176 48,750 119,926
2028-2032 438,447 201,434 639,881
2033-2037 375,300 124,047 499,347
2038-2042 327,819 49,689 377,508
2043-2047 122,087 12,647 134,734
Total $ 1,604,110 $ 654,270 $ 2,258,380
4. CAPITAL ASSETS
Balance Transfers and Balance
Primary Government 1/1/2022* Additions Deletions 12/31/2022
Capital assets not being depreciated:
Land $ 17,237,847 $ 17,237,847
Land development rights 143,133,133 $ 5,067,917 148,201,050
Construction in progress 1,100,189 371,010 $ 494,868 976,331
Total Capital Assets Not Being Depreciated 161,471,169 5,438,927 494,868 166,415,228
Depreciable capital assets:
Buildings 21,458,581 94,511 21,553,092
Improvements other than buildings 16,913,211 33,000 6,021 16,940,190
Machinery and equipment 15,959,276 1,267,901 148,176 17,079,001
Software 1,233,802 131,376 29,753 1,335,425
Inf restructure 89,539,411 2,344,675 91,884,086
Right-to-use lease asset* 164,299 64,393 228,692
Total Depreciable Capital Assets 145,268,580 3,935,856 183,950 149,020,486
Less accumulated depreciation/amortization:
Buildings 8,359,189 622,699 3,247 8,978,641
Improvements other than buildings 11,112,171 548,528 (402) 11,661,101
Machinery and equipment 11,748,746 881,567 177,929 12,452,384
Software 1,295,826 58,815 1,354,641
Infrastructure 73,921,362 1,068,033 (2,845) 74,992,240
Right-to-use lease asset - 44,649 44,649
Total Accumulated Depreciation $ 106,437,294 $ 3,224,291 $ 177,929 109,483,656
Total Net Depreciable Capital Assets 39,536,830
Total Net Capital Assets $ 205,952,058
*As restated, see note B3.
-41-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
C. DETAILED NOTES ON ALL FUNDS (continued)
4. CAPITAL ASSETS (continued)
Depreciation expense was charged to governmental functions as follows:
General government support $ 672,358
Public safety 424,797
Transportation 1,362,244
Economic assistance and opportunity 29,672
Culture and recreation 77,327
Home and community services 657,893
$ 3,224,291
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, 2022, the Town has not recorded any such impairment losses.
Balance Reclassifications/ Balance
Nonmajor Component Units 1/1/2022 Additions Deletions 12/31/2022
Capital assets not being depreciated:
Land $ 2,103,162 $ 2,103,162
Construction in progress 119,762 $ 40,890 $ 20,670 139,982
Total Capital Assets Not Being Depreciated 2,222,924 $ 40,890 20,670 2,243,144
Depreciable capital assets:
Buildings 14,189,747 166,562 14,356,309
Improvements other than buildings 2,557,247 2,557,247
Machinery and equipment 6,398,942 115,024 6,513,966
Infrastructure 5,500,714 183,172 5,683,886
Total Depreciable Capital Assets 28,646,650 464,758 -0- 29,111,408
Less accumulated depreciation:
Buildings 7,628,580 369,176 7,997,756
Improvements other than buildings 1,312,047 185,030 1,497,077
Machinery and equipment 4,015,982 145,108 4,161,090
Infrastructure 3,339,084 135,583 3,474,667
Total Accumulated Depreciation $ 16,295,693 $ 834,897 $ -0- 17,130,590
Total Net Depreciable Capital Assets 11,980,818
Total Net Capital Assets $ 14,223,962
Depreciation expense was charged to governmental functions as follows:
Transportation $ 592,193
Culture and recreation 106,256
Home and community services 136,448
$ 834,897
-42-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
C. DETAILED NOTES ON ALL FUNDS (continued)
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, 2022 the Town reported bond anticipation
notes outstanding of $13,780,000, of which $1,000,000 were reported by the primary government as
short-term debt, and $2,410,000 relate to Fishers Island Ferry District and were reported as short term
debt. The remaining $10,370,000 was reported as long-term debt by the primary government. These
BANs were issued in September 2022, bear interest at 3.75% and matured in September 2023.
A summary of changes in BANs for the year ended December 31,2022 is as follows:
Balance Balance
1/1/2022 Increases Reductions 12/31/2022
Primary Government $ - $ 1,000,000 $ 1,000,000
component Units 2,530,000 120,000 2,410,000
Total BANs Payable $ 2,530,000 $ 1,000,000 $ 120,000 $ 3,410,000
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, 2022.
These long-term liabilities 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 2034.
At December 31, 2022, 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% $ 4,675,000
2016 Refunding Serial Bonds Refunding Bond February 15,2030 October 4,2016 2.00%-4.00% 12,255,000
2016 Public Improvement Serial Bonds Public Improvement August 15,2034 August 25,2016 2.00%-2.25% 2,900,000
$ 19,830,000
-43-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
C. DETAILED NOTES ON ALL FUNDS (continued)
5. INDEBTEDNESS (continued)
LONG-TERM DEBT(continued)
Future principal and interest payments to maturity for the primary government are as follows:
Primary Government
Years Ending
December 31, Principal Interest Totals
2023 $ 2,435,000 $ 556,312 $ 2,991,312
2024 2,465,000 457,912 2,922,912
2025 2,510,000 356,388 2,866,388
2026 2,290,000 274,388 2,564,388
2027 2,275,000 212,788 2,487,788
2028-2032 7,385,000 346,909 7,731,909
2033-2034 470,000 15,864 485,864
Total $ 19,830,000 $ 2,220,561 $ 22,050,561
Bond Anticipation Notes Payable-The bond anticipation note in the amount of$13,780,000 that was
issued on September 21, 2022 with an interest rate of 3.75%was renewed on September 21, 2023. The
Town reported $1,000,000 as a short-term liability in the fund financial statements, $2,410,000 as a short
term liability in the component unit financial statements, and $10,370,000 as a long-term liability in the
government-wide financial statements.
Leases Payable - Leases payable as of December 31, 2022 are composed of the following individual
agreements:
Primary Government
Interest Outstanding
Purpose Year of Issue Final Maturity Rate Amount
Copiers 2019 2024 3.05% $ 3,434
Copiers 2020 2024 3.00% 4,623
Copiers 2021 2025 3.02% 4,882
Copiers 2022 2026 3.20% 52,938
Mail machine 2018 2024 3.05% 4,216
Solar panels 2021 2026 3.02% 14,977
Hi-band radio 2018 2028 3.03% 103,591
$ 188,661
Interest expense of$6,008 was recorded in the fund financial statements in the general 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
2023 $ 45,862 $ 5,162 $ 51,024
2024 41,304 3,778 45,082
2025 40,046 2,543 42,589
2026 25,277 1,452 26,729
2027 20,166 820 20,986
2028 16,006 201 16,207
Total $ 188,661 $ 13,956 $ 202,617
-44-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
C. DETAILED NOTES ON ALL FUNDS (continued)
5. INDEBTEDNESS (continued)
LONG-TERM DEBT(continued)
CHANGES IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended December 31, 2022 is as follows:
Noncurrent
Balance Balance Liabilities Due Noncurrent
1/1/2022* Increases Reductions 12/31/2022 Within One Year Liabilities
Primary Government:
General obligation bonds $ 22,170,000 $ 2,340,000 $ 19,830,000 $ 2,435,000 $ 17,395,000
Add:premiums on obligations 1,586,861 182,743 1,404,118 1,404,118
Total general obligation bonds
payable 23,756,861 2,522,743 21,234,118 2,435,000 18,799,118
Bond anticipation notes 8,407,722 $ 2,541,841 579,563 10,370,000 615,000 9,755,000
Leases payable* 164,299 64,393 40,031 188,661 45,862 142,799
Compensated absences 8,863,214 412,189 9,275,403 781,549 8,493,854
General claims and judgments
liability 641,000 50,000 194,000 497,000 134,225 362,775
Estimated liability for landfill closure
and postclosure care costs 360,693 52,003 308,690 19,394 289,296
Net pension liability 3,016,617 1,541,581 3,585,098 973,100 973,100
Total OPEB liability 114,012,330 7,961,409 2,772,766 119,200,973 119,200,973
$ 159,222,736 $ 12,571,413 $ 9,746,204 $ 162,047,945 $ 4,031,030 $ 158,016,915
Noncurrent
Balance Balance Liabilities Due Noncurrent
1/1/2022 Increases Reductions 12/31/2022 Within One Year Liabilities
Component Units:
Compensated absences $ 218,809 $ 125,485 344,294 $ 86,073 $ 258,221
Net pension liability 4,596 4,596 - -
Other postemployment benefits
payable 853,383 13,730 867,113 867,113
$ 1,076,788 $ 139,215 $ 4,596 $ 1,211,407 $ 86,073 $ 1,125,334
*As restated, see Note B3.
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.
-45-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
C. DETAILED NOTES ON ALL FUNDS (continued)
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.
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.
-46-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
C. DETAILED NOTES ON ALL FUNDS (continued)
6. RETIREMENT SYSTEM (continued)
Benefits Provided (continued)
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.
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.
-47-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
C. DETAILED NOTES ON ALL FUNDS (continued)
6. RETIREMENT SYSTEM (continued)
Benefits Provided (continued)
Ordinary Death Benefits
Death benefits are payable upon the death, before retirement, of a member who meets eligibility
requirements as set forth by law. The first$50,000 of an ordinary death benefit is paid in the form of group
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%.
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
2022 $ 2,184,473 $ 1,895,299
2021 1,904,517 1,631,922
2020 1,718,149 1,579,168
Pension (Assets)/Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows
of Resources Related to Pension
At December 31, 2022, the primary government reported an asset of ($3,263,655) for ERS and a
liability of $973,100 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, 2022 and the total pension liability
used to calculate the net pension (asset)/liability was determined by an actuarial valuation as of April
1, 2021. 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, 2022.
-48-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
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)
Allocation of the
Net Pension System's Total
Measurement Date (Asset)Liability Net Liability
ERS March 31,2022 $ (3,263,655) 0.0399244%
PFRS March 31,2022 $ 973,100 0.1713070%
There was no significant change in the primary government's proportionate share from March 31,
2021 to March 31, 2022.
For the year ended December 31, 2022, the primary government recognized pension expense of
$1,167,364, of which $256,915 relates to ERS and $910,449 relates to PFRS. At December 31, 2022,
the primary government reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
ERS PFRS Totals
Deferred Outflows of Resources:
Difference between expected and actual experience $ 247,161 $ 524,605 $ 771,766
Changes of assumptions 5,446,673 5,824,214 11,270,887
Changes in proportion and differences between employer
contributions and proportionate share of contributions 800,712 86,562 887,274
Contributions made subsequent to the measurement date 1,139,184 1,411,619 2,550,803
Total Deferred Outflows of Resources-pension amounts $ 7,633,730 $ 7,847,000 $ 15,480,730
Deferred Inflows of Resources:
Differences between expected and actual experience $ 320,582 $ 320,582
Changes of assumptions 91,907 91,907
Net difference betw een projected and actual investment
earnings on pension plan investments 10,687,102 $ 8,176,582 18,863,684
Changes in proportion and differences between the Tow n's
contributions and proportionate share of contributions 565,997 127,046 693,043
Total Deferred Inflows of Resources-pension amounts $ 11,665,588 $ 8,303,628 $ 19,969,216
Contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended December 31, 2023. Other amounts reported as deferred outflows of resources
and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
-49-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
C. DETAILED NOTES ON ALL FUNDS (continued)
6. RETIREMENT SYSTEM (continued)
Pension Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pension (continued)
ERS PFRS
Years ended December 31,2023 $ (741,418) $ (401,187)
2024 (1,125,494) (664,523)
2025 (2,718,298) (1,912,977)
2026 (585,832) 1,083,885
2027 26,555
$ (5,171,042) $ (1,868,247)
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:
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.
ERS PFRS
Measurement date March 31,2022 March 31,2022
Actuarial valuation date April 1,2021 April 1,2021
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
System's Experience System's Experience
Inflation rate 2.70% 2.70%
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, 2022 are summarized below:
-50-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
C. DETAILED NOTES ON ALL FUNDS (continued)
6. RETIREMENT SYSTEM (continued)
Actuarial Assumptions (continued)
Long-term
Target Expected Real
Asset Type: Allocation Rate of Return
Equity:
Domestic equity 32.00% 3.30%
International equity 15.00% 5.85%
Private equity 10.00% 6.50%
Real estate 9.00% 5.00%
Opportunistic/absolute return strategies 3.00% 4.10%
Credit 4.00% 3.78%
Real assets 3.00% 5.80%
Fixed income 23.00% 0.00%
Cash 1.00% -1.00%
100.00%
The real rate of return is net of the long-term inflation assumption of 2.7%.
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%
Town's proportionate share of the
collective net pension liability(asset)
ERS $ 8,400,614 $ (3,263,655) $ (13,020,255)
PFRS 10,824,236 973,100 (7,181,025)
-51-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
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, 2021 were as follows:
ERS PFRS
(Dollars in thousands) (Dollars in thousands)
Errployers'total pension liability $ 223,874,888 $ 42,237,292
Flan net position 232,049,473 41,669,250
Errployers'net pension liability(asset) $ (8,174,585) $ 568,042
Ratio of plan net position to the
Errployers'total pension liability -103.65% -98.66%
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 1,2021, the effective date of the OPEB valuation is as follows:
Active employees 199
Retirees and dependents 145
Total 344
There have been no significant changes in the number or type of coverage since that date.
-52-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
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 $119,200,973 was measured as of January 1, 2021 and was
determined by an actuarial valuation as of January 1, 2021 with updated procedures used to rollforward
the OPEB liability to the reporting date of December 31, 2022.
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, 2021 measurement date was determined using the following
actuarial assumptions and other inputs:
Discount Rate 2.06%
Healthcare cost trend rates 7%for 2022 decreasing 0.4% per year to an ultimate trend rate
of 5.0% after 5 years.
The discount rate was based on the January 1, 2021 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, 2021 valuation were based on standard tables modified
for certain plan features such as eligibility for full and early retirement where applicable.
-53-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
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, 2021 $ 114,012,330
Changes for the year:
Service cost 3,872,339
Interest 2,428,716
Differences between expected and actual experience -0-
Changes in assumptions and other inputs 1,660,354
Benefit payments (2,772,766)
Balance at December 31, 2022 $ 119,200,973
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 (1.06%) or
1-percentage-point higher(3.06%)than the discount rate.
1.00% Discount 1.00%
Decrease Rate Increase
1.06% 2.06% 3.06%
$ 148,132,931 $ 119,200,973 $ 98,058,930
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
(starts at 6%) (starts at 7%) (starts at 8%)
$ 98,444,143 $ 119,200,973 $ 146,813,504
For the year ended December 31, 2022, the Town recognized OPEB expense of $8,864,165. At
December 31, 2022, 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 $ 727,273
Changes of assumptions $ 10,553,348
Contributions made subsequent to the measurement date 2,772,766
Total Deferred Outflows of Resources -OPEB $ 13,326,114 $ 727,273
-54-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
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, 2023 2,563,010
2024 2,563,010
2025 2,563,010
2026 2,475,165
2027 (575,314)
Thereafter 237,194
$ 9,826,075
Contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB
liability in the year ended December 31, 2023.
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, 2022, the value of the accumulated vacation time and sick leave was $9,275,403 for the
primary government.
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 $497,000 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, 2022, 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.
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TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
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, 2022 and 2021 are as follows:
General Liability
2022 2021
Unpaid Claims as of December 31st, prior year $ 641,000 $ 824,762
Incurred claims:
Provision for insured events of the current
fiscal year 50,000 81,000
Increase(decrease)in net provision for insured
events of prior fiscal years (126,182) (114,762)
Total incurred claims and claim adjustments 564,818 791,000
Payments of claims during the fiscal year (67,818) (150,000)
Unpaid claims as of December 31st $ 497,000 $ 641,000
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,
2022, the Town has recorded a liability of $308,690, 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,
2022, these commitments amounted to $760,975 in the capital projects fund.
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TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
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,
2023 $ 275,859
2024 281,376
2025 287,004
2026 48,791
Total $ 893,030
E. CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED COMPONENT UNITS
The following represents condensed financial statements for the discretely presented component units as of
and for the year ended December 31,2022:
Condensed Statement of Net Position:
Due from Capital Assets Deferred Other Deferred
Current and Primary Net of Outflows Current Long-Term Inflows Net
Other Assets Government Depreciation of Resources Liabilities Liabilities of Resources Position
Fishers Island
Ferry District $ 3,432,001 $ 248,310 $ 9,625,398 $ 1,148,159 $ 2,834,053 $ 1,125,334 $ 1,599,446 $ 8,895,035
Fishers Island Waste
Management District* 340,199 163,275 1,909,627 32,129 163,275 2,217,697
Cutchogue-New Suffolk
Park District* 165,783 24,957 122,479 24,957 288,262
Southold Park District* 324,917 63,805 688,453 626 63,805 1,012,744
Orient-East Marion
Park District* 1,515 9,189 451,900 137 9,189 453,278
Mattituck Park District* 283,136 104,681 1,426,105 10,568 104,681 1,698,673
Orient Mosquito District* 151,833 18,359 1,398 18,359 150,435
$ 4,699,384 $ 632,576 $ 14,223,962 $ 1,148,159 $ 2,878,911 $ 1,125,334 $ 1,983,712 $ 14,716,124
*Unaudited component units.
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TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
E. CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED COMPONENT UNITS
(continued)
Condensed Statement of Activities:
Program General Revenue Net Position
Property
Expenses Revenue Net Expense Tax Other Change 1/1/22 12/31/22
Fishers Island
Ferry District $ 4,984,162 $ 4,340,048 $ 644,114 $ 1,419,772 $ 24,558 $ 800,216 $ 8,094,819 $ 8,895,035
Fishers Island Waste
Management District* 1,114,180 44,683 1,069,497 758,150 6,907 (304,440) 2,522,137 2,217,697
Cutchogue-New Suffolk
Park District* 120,700 120,700 136,315 80 15,695 272,567 288,262
Southold Park District* 444,584 444,584 343,124 54,888 (46,572) 1,059,316 1,012,744
Orient-Fast Marion
Park District* 58,728 58,728 46,460 (12,268) 465,546 453,278
Mattituck Park District* 592,569 156,563 436,006 320,000 74,494 (41,512) 1,740,185 1,698,673
Orient Mosquito District* 34,350 34,350 97,960 7,902 71,512 78,923 150,435
$ 7,349,273 $ 4,541,294 $ 2,807,979 $ 3,121,781 $ 168,829 $ 482,631 $ 14,233,493 $ 14,716,124
*Unaudited corTonent units.
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. 2% TRANSFER TAX
Transfer tax 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. The tax applies to sales of
vacant land amounts in excess of$100,000 or sales of improved land in excess of$250,000. Conveyance of
real property for open space, parks or historic preservation purposes and certain first-time home buyers are
exempt from this tax.
G. SUBSEQUENT EVENTS
On January 3, 2023, the Town entered into a lease agreement with Fishers Island Farms, LLC for the period
of January 1, 2023- December 31, 2023 for housing for New York State Police assigned to Fishers Island in
the amount of$110,000.
On February 16, 2023, the Town purchased in partnership with the County, two parcels of land located on
Middle Road in Nassau Point, New York, at a purchase price of$2,848,000, of which $1,424,000 was paid by
the Town, and $1,424,000 was paid by the County.
On April 11, 2023, the Town Board ratified a collective bargaining agreement between the Town and the Civil
Service Employee's Association for the period of January 1, 2023 through December 31, 2026.
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TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2022
G. SUBSEQUENT EVENTS (continued)
On September 11, 2023, Moody's Investor Service upgraded the Town's rating from Aal to Aaa on the
Town's outstanding general obligation debt.
On September 20, 2023, the Town issued $5,795,000 Bond Anticipation Notes with an annual interest rate of
4.50% and a premium of$45,143 which mature on September 20, 2024.
On September 20, 2023, the Town issued $9,130,000 Public Improvement Serial Bonds with interest rates of
3.00%-5.00%and a premium of$198,183 which mature on September 15, 2030.
H. NEW 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. 94, "Public-Private and Public-Public Partnerships and Availability Payment
Arrangements", this Statement has been issued to improve financial reporting related to public-
private and public-public partnership arrangements, in which one a government (transferor)
contracts with an operator (governmental or nongovernmental entity) to provide public services by
conveying the right to operate or use a nonfinancial assets. The requirements of this Statement are
effective the year ending December 31, 2023.
Statement No. 96, "Subscription-Based Technology Arrangements (SBITAs)", this Statement has
been issued to improve financial reporting by establishing a definition for SBITAs and providing
uniform guidance for accounting and financial reporting for transactions that meet the definition. The
requirements of this Statement are effective for the year ending December 31, 2023.
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.
The Town is currently evaluating the impact of the above pronouncements.
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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, 2022
Variance
Original Final with Final
Budget Budget Actual Encumbrances Budget
REVENUES
Real property taxes $ 29,943,980 $ 29,943,980 $ 29,943,980 $ -0-
Other real property tax items 332,000 332,000 337,027 5,027
Non-property tax items 1,288,673 1,288,673 1,490,273 201,600
Departmental income 399,750 399,750 536,637 136,887
Intergovernmental charges 166,319 166,319 123,656 (42,663)
Use of money and property 216,195 216,195 483,545 267,350
Licenses and permits 523,450 523,450 370,411 (153,039)
Fines and forfeitures 320,100 323,958 323,203 (755)
Sale of property and compensation for loss 69,000 82,237 85,447 3,210
Miscellaneous local sources 374,700 394,292 175,751 (218,541)
Interfund revenues 12,000 12,000 5,756 (6,244)
State aid 2,217,464 2,238,264 2,998,310 760,046
Federal aid 21,334 43,011 344,633 301,622
Total Revenues 35,884,965 35,964,129 37,218,629 1,254,500
EXPENDITURES
Current:
General government support 9,508,670 9,123,593 7,581,637 $ 196,947 1,345,009
Public safety 11,057,486 11,336,362 10,468,535 37,938 829,889
Public health 43,300 43,300 43,300 -0-
Transportation 492,625 688,629 666,231 22,398
Economic assistance and opportunity 1,643,075 1,647,585 1,315,973 12,427 319,185
Culture and recreation 488,493 488,689 331,389 5,682 151,618
Home and community services 527,664 538,219 343,616 16,887 177,716
Employee benefits 11,712,362 11,700,948 10,514,314 1,186,634
Debt service:
Principal 771,500 808,531 808,498 33
Interest 133,500 211,608 211,591 17
Total Expenditures 36,378,675 36,587,464 32,285,084 269,881 4,032,499
Excess(Deficiency)of Revenues
Over(Under)Expenditures (493,710) (623,335) 4,933,545 (269,881) 5,286,999
OTHER FINANCING USES
Transfers in 754,911 754,911 720,862 (34,049)
Transfers out (1,214,937) (1,454,426) (1,404,796) 49,630
Total Other Financing Uses (460,026) (699,515) (683,934) -0- 15,581
Net Change in Fund Balance $ (953,736) $ (1,322,850) 4,249,611 $ (269,881) $ 5,302,580
Fund Balance at Beginning of Year 18,917,467
Fund Balance at End of Year $ 23,167,078
See Independent Auditors' Report.
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TOWN OF SOUTHOLD
HIGHWAY FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE- BUDGET AND ACTUAL
REQUIRED SUPPLEMENTARY INFORMATION
Year Ended December 31, 2022
Variance
Original Final with Final
Budget Budget Actual Encumbrances Budget
REVENUES
Real property taxes $ 6,388,642 $ 6,388,642 $ 6,388,642 $ -0-
Other real property tax items 51,650 51,650 59,476 7,826
Use of money and property 7,500 7,500 68,831 61,331
Licenses and permits 5,000 5,000 58,690 53,690
Sale of property and compensation for loss 3,000 3,000 5,719 2,719
Miscellaneous local sources 5,688 5,688
State aid 931,087 1,112,971 1,006,132 (106,839)
Federal aid 8,888 8,888
Total Revenues 7,386,879 7,568,763 7,602,066 33,303
EXPENDITURES
Current:
General government support 8,608 11,653 10,598 1,055
Transportation 4,233,096 4,448,685 3,959,616 $ 29,809 459,260
Employee benefits 2,096,175 2,072,400 1,793,188 279,212
Debt Service:
Principal 280,000 285,000 284,972 28
Interest 26,000 44,775 44,295 480
Total Expenditures 6,643,879 6,862,513 6,092,669 29,809 740,035
Excess(Deficiency)of Revenues
Over(Under)Expenditures 743,000 706,250 1,509,397 (29,809) 773,338
OTHER FINANCING USES
Transfers out (818,000) (1,006,250) (999,854) 6,396
Total Other Financing Uses (818,000) (1,006,250) (999,854) -0- 6,396
Net Change in Fund Balance $ (75,000) $ (300,000) 509,543 $ (29,809) $ 779,734
Fund Balance at Beginning of Year 3,658,293
Fund Balance at End of Year $ 4,167,836
See Independent Auditors' Report.
-61-
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, 2022
Variance
Original Final with Final
Budget Budget Actual Encumbrances Budget
REVENUES
Real property taxes
Other real property tax items
Non-property tax items $ 10,000,000 $ 10,000,000 $ 13,577,599 $ 3,577,599
Use of money and property 15,000 15,000 207,373 192,373
Miscellaneous local sources 641 641
Total Revenues 10,015,000 10,015,000 13,785,613 3,770,613
EXPENDITURES
Current:
General government support 147,042 92,042 20,856 $ 5,500 65,686
Home and community services 17,797,805 17,852,805 5,240,783 62,000 12,550,022
Employee benefits 121,294 121,294 69,467 51,827
Debt service:
Principal 1,580,373 1,580,373 1,580,373 -0-
Interest 479,582 479,582 479,582 -0-
Total Expenditures 20,126,096 20,126,096 7,391,061 67,500 12,667,535
Excess(Deficiency)of Revenues
Over(Under)Expenditures (10,111,096) (10,111,096) 6,394,552 (67,500) 16,438,148
Net Change in Fund Balance $ (10,111,096) $ (10,111,096) 6,394,552 $ (67,500) $ 16,438,148
Fund Balance at Beginning of Year 23,023,229
Fund Balance at End of Year $ 29,417,781
See Independent Auditors' Report.
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TOWN OF SOUTHOLD
SCHEDULE OF CHANGES IN THE TOWN'S TOTAL OTHER POSTEMPLOYMENT
BENEFIT LIABILITY AND RELATED RATIOS
REQUIRED SUPPLEMENTARY INFORMATION
Year Ended December 31, 2022
2022 2021 2020 2019 2018
Total OPEB Liability
Service Cost $ 3,872,339 $ 3,507,372 $ 3,340,354 $ 1,913,830 $ 1,822,695
Interest 2,428,716 2,857,905 3,226,259 2,708,144 2,721,521
Differences between Actual and Expected Experience (5,119,594) 8,515,166
Changes in Assumptions 1,660,354 11,588,857 21,353,355 (11,542,778) 4,162,884
Benefit Payments (2,772,766) (2,507,492) (2,507,492) (2,179,535) (1,871,347)
Net Change in Total OPEB Liability 5,188,643 10,327,048 25,412,476 (585,173) 6,835,753
Total OPEB Liability-Beginning 114,012,330 103,685,282 78,272,806 78,857,979 72,022,226
Total OPEB Liability-Ending $ 119,200,973 $ 114,012,330 $ 103,685,282 $ 78,272,806 $ 78,857,979
Covered employee payroll $ 20,157,714 $ 22,111,282 $ 21,800,313 $ 18,729,794 $ 17,995,841
Total OPEB liability as a percentage of covered payroll 591.34% 515.63% 475.61% 417.91% 438.20%
Note:
"This schedule is intended to show information for 10 years.Since 2018 is the first year for this presentation,no other date prior to 2018
is available.However,additional years will be included as they become available
Notes to Schedule:
No assets are accumulated in a trust that meets the criteria in GASB Statement No.75,paragraph 4,to pay other postemployment
benefits(OPEB).
The Town currently contributed enough money to the plan to satisfy current obligations on a pay-as-you-go basis
Changes of Benefit Terms
None
Changes of Assumptions
Changes of assumptions and other inputs reflect the effects of changes in the discount rate each period,
The following are the discount rates used in each period:
Discount rate January 1,2022 2.06%
January 1,2021 2.12%
January 1,2020 2.73%
January 1,2019 4.10%
January 1,2018 3.44%
January 1,2017 3.78%
Medical Trend Assumption January 1,2022 Started at 7%in current year decreasing by.4%per year to an ultimate trend rate
of 5%after 6 years.
January 1,2021 Started at 7%in current year decreasing by.4%per year to an ultimate trend rate
of 5%after 6 years.
January 1,2020 Started at 8%in current year decreasing by.5%per year to an ultimate trend rate
of 5%after 7 years.
January 1,2019 Started at 8%in current year decreasing by.5%per year to an ultimate trend rate
of 5%after 7 years.
January 1,2018 Started at 10%decreasing by 1%over the next four years and 5%after 5 years.
Mortality Rates January 1,2022 RP-2014 mortality table with projected mortality
January 1,2021 RP-2014 mortality table with projected mortality
January 1,2020 RP-2017 mortality table with projected mortality
January 1,2019 RP-2017 mortality table with projected mortality
January 1,2018 RP-2014 mortality table with projected mortality
See Independent Auditors' Report.
-63-
TOWN OF SOUTHOLD
SCHEDULE OF PENSION CONTRIBUTIONS
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended December 31, 2022
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
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
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.
-64-
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OTHER SUPPLEMENTARY
INFORMATION
TOWN OF SOUTHOLD
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
December 31, 2022
Special Revenue Funds
East-West Fire Southold Fishers Solid Waste Total
General Fund Special Protection Wastewater Island Sewer Management Non-Major
Part Town Grant District District District District Funds
ASSETS
Cash and investments $ 3,814,244 $ 139,716 $ 154,658 $ 7,990 $ 53,529 $ 2,197,122 $ 6,367,259
Accounts receivable 171,908 215 42 105,647 277,812
Due from other funds 174,637 148 158,264 22 10,725 401,498 745,294
Due from other governments 18,224 18,224
Loans receivable 250,000 250,000
Inventory of materials and supplies 33,644 33,644
Prepaids 43,168 37,495 80,663
Total Assets $ 4,453,957 $ 158,088 $ 313,137 $ 8,012 $ 64,296 $ 2,775,406 $ 7,772,896
LIABILITIES
Accounts payable and
accrued liabilities $ 52,811 $ 13,138 $ 2,942 $ 295,229 $ 364,120
Due to other funds 27,396 115,000 79,778 222,174
Unearned revenue 188,119 $ 158,088 10,350 73,871 430,428
Total Liabilities 268,326 158,088 128,138 $ -0- 13,292 448,878 1,016,722
DEFERRED INFLOWS OF RESOURCES
Unearned revenue from
real property taxes 162,619 158,264 387,029 707,912
FUND BALANCES
Nonspendable 43,168 71,139 114,307
Committed 1,732,303 1,732,303
Assigned 2,247,541 26,735 8,012 51,004 1,868,360 4,201,652
Total Fund Balances 4,023,012 -0- 26,735 8,012 51,004 1,939,499 6,048,262
Total Liabilities,Deferred Inflows of
of Resources and Fund Balances $ 4,453,957 $ 158,088 $ 313,137 $ 8,012 $ 64,296 $ 2,775,406 $ 7,772,896
See Independent Auditors' Report.
-66-
TOWN OF SOUTHOLD
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - NON-MAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2022
Special Revenue Funds
East-West Fire Southold Fishers Solid Waste Total
General Fund Special Protection Wastewater Island Sewer Management Non-Major
Part Town Grant District District District District Funds
REVENUES
Real property taxes $ 1,044,227 $ 839,216 $ 2,194,351 $ 4,077,794
Other real property tax items 9,846 7,381 18,595 35,822
Non-property tax items 680,832 680,832
Departmental income 1,429,087 $ 31,108 2,014,222 3,474,417
Use of money and property 20,502 957 155 11,462 33,076
Licenses and permits 108,665 210,813 319,478
Sales of property and compensation
for loss 290,097 290,097
Miscellaneous local sources 732 9,815 10,547
State aid 88,328 16,901 105,229
Federal aid $ 66,824 66,824
Total Revenues 3,382,219 66,824 847,554 $ -0- 31,263 4,766,256 9,094,116
EXPENDITURES
Current:
General government support 211,852 5,000 251,197 468,049
Public safety 797,309 839,316 1,636,625
Home and community services 794,292 66,824 20,986 2,900,435 3,782,537
Employee benefits 793,434 341 768,350 1,562,125
Debt service:
Principal 7,135 278,616 285,751
Interest 1,289 62,180 63,469
Total Expenditures 2,596,887 66,824 839,316 -0- 34,751 4,260,778 7,798,556
Excess(Deficiency)of Revenues
Over Expenditures 785,332 -0- 8,238 -0- (3,488) 505,478 1,295,560
Other Financing Uses:
Transfers out (64,896) (117,942) (182,838)
Total Other Financing Uses (64,896) -0- -0- -0- -0- (117,942) (182,838)
Net Change in Fund Balance 720,436 -0- 8,238 -0- (3,488) 387,536 1,112,722
Fund Balances at Beginning of Year 3,302,576 -0- 18,497 8,012 54,492 1,551,963 4,935,540
Fund Balances at End of Year $ 4,023,012 $ -0- $ 26,735 $ 8,012 $ 51,004 $ 1,939,499 $ 6,048,262
See Independent Auditors' Report.
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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, 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, 2022, and the related notes to the financial statements, which collectively comprise the
Town's basic financial statements, and have issued our report thereon dated October 24, 2023. Our
report includes the following opinions:
Opinion Unit Type of Opinion
Governmental Activities Unmodified
Aggregate Discretely Presented Component
Units Disclaimer
General Fund Unmodified
Highway Fund Unmodified
Capital Projects Fund Unmodified
Community Preservation Fund Unmodified
Aggregate Remaining Fund Information Unmodified
Our report includes a reference to other auditors who audited the financial statements of Fishers Island
Ferry District, 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, with the
exception of the one referenced above, 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 32%, 40% and 26%, respectively, 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.
PKF O'Connor Davies, LLP
Hauppauge, New York
October 24, 2023
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