HomeMy WebLinkAboutVarious Purposes
2001 Land Preservation Bond
NEW ISSUE - SERIAL BONDS
01'EN SY'l'KE
. . In the oRinion ofHawki~ Delafield & Wood LLP,.BondCo.uYl.'i~lto the Town under ex.istin?st"ro~s and court decl~.si YI.'i afjd a$suming
contmumg complIance wIth cl!rtam tax certificatIOns descrIbed hlJrem, (j) mterest on ihe Bonds IS f!X.c1uded rom woss income or federal income
tax purp9ses pu~sua'1tto Sectwl} J 03 of the Int~rnal fI.,!"enue Co.de of' 986, f'S W'1end?d (th~ "Code "i. and iiJ interest on the onfis is not treated
qs ~ pre.Jf!re1'Jce Item I!, calculatmg the al~ernatrve mm.lmum tax l11Jposed on mdivlduals Q1}cJ corporafions under the Code; sue interest, however
. IS mclual!d In the a4/J!s.ted qurrent e~rrJlngs of certam corpora/IOns for purposes of calculatmg {he alternative minimum tax im]J.osed on such
qorporatlOns. In aaditio1J. In the opppon br lJond COJ!~t;l to tfle Town, under ~jslj1)g statutes, mtet;,est on the Bonds is exemptjrom personal
Income taxes afNew York State ana Its ponucal subdivISIOns, mcluding The CIty oJ New York. See Tax Matters" herein.
The Bonds will NOT be designated by the Town as "qualified tax-exempt obligations" pursuant to the provision of Section 265 ofthe
Code.
$14,650,000
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
(the "Town")
PUBLIC IMPROVEMENT SERIAL BONDS - 2007
[BOOK-ENTRY-ONL Y BONDS]
Dated: April 15, 2007 Principal Due: April 15, 2008-2030, inclusive
Interest Due: October 15, 2007 and semi-annually thereafter
BOND MATURITY SCHEDULE
Amount Maturitv Rate Yield Amount Maturitv Rate Yield Amount Maturitv Rate Yield
$700,000 2008 4.00% 3.42% $625,000 2016 4.25% 3.82% $ 725,000 2024 4.25% 4.23%
725,000 2009 4-'1. 3.45 675,000 2017 4.25 3.87 725,000 2025 4.25 4.25
575,000 2010 4_'1. 3.50 675,000 2018 4.25 3.95 550,000 2026 4.25 4.26
575,000 2011 4.25 3.52 675,000 2019 4.25 4.00 550,000 2027 4.25 4.28
600,000 2012 4.25 3.57 675,000 2020 4.25 4.05 550,000 2028 4.25 4.29
625,000 2013 4.25 3.62 675,000 2021 4.25 4.10 550,000 2029 4.25 4.30
625,000 2014 4.25 3.70 . 675,000 2022 4.25 4.15 550,000 2030 4.25 4.31
625,000 2015 4.25 3.77 725,000 2023 4.25 4.20
.The payment of the principal of and interest on the Bonds when due will be insured by a financial guaranty insurance
policy to be issued by Ambac Assurance Corporation simultaneously with the delivery ofthe Bonds.
Ambac
. . Security fmd Sources of Pqyment: The Bond~ wjll constitut~ general obligations of the Town and will contain a pledge c;>f
Its faIth and credIt for the punctual payment of the prInCIpal of and mTerest on the Bonds, and all the taxable real property wlthm
the Town will be subject to the levy 01 ad valorem taxes, without limitation as to rate or amount, for such purpose.
Prior Redemption: The Bonds maturing on April 15, 2018 and thereafter are subiect to redemption, at the option of the
TownAprior to maturIty in whole or in part, on any date on or after April 15,2017 in accordance with the terms described herein.
See "vptional Redemption" under "The Bonds," herein.
Form and Denomination: The Bonds will be issued as reJ!istered bond~, and, when issued, will be registered in the name
of Cede & Co. as nominee of The Depository Trust Company ("DTC") New I ark, New York, which will act as the Securities
Depository for the Bonds. Individual purchases of the Bonds may be made only in book-entry form in denominations of $5,000 or
intel!r.al multiples thereof. Bondholders will not receive certificates representing their ownership interest in the Bonds purchased.
See Book-Entry-Only System" under "The Bonds," herein.
Payment: Payment ofthe principal of and interest on the Bonds to the Beneficial Owners of the Bonds will be made by DTC
Participants and Indirect Participants in accordance with standing instructions and custom'!!Y practices, as is now the case with
muniCipal securities held for tlie accounts of customers in bearer form or registered in "street name." Payment will be the
responsibility of the DTC Particip'ant or Indirect Participant and not ofDTC or the Town, su!!iect to any statutory and regulatory
requirements as may be in effect from time to time. See "Book-Entry-Only System" under "The Bonds," herein.
Hawkins Dc;lafield & W Qod LLP has not participated in the preparation of thiS Official Statement, nQr verified
the accuracy, completeness or fairness of the intormation contained nerem, and, accordingly, expresses no opmion with
respect thereto.
The Bonds are offered sUQject to thefinal approvingoRinion of Hawkins Delafield & Wood LLP, New York, New York, Bond
Counsel, and certain other conditions. It is eX]Jected thiit aelivery of the Bonds In book-entry form will be made through the
facilities ofDTC on or about April 19, 2007 in New York, New York.
This revised cover, dated April 10, 2007, supplements the Official Statement of the Town dated March 27, 2007, relating
to the obligations describeil therein and herein including certain information omitted from such Official Statement in accordance
with SecurIties and ExchanJle Commission Rule 15c2-12 {the "Rule"), and shall constitute the Town's final Official Statement within
the meaninJ! of the Rule. OTher than as set forth on this revised cover page, the table of contents the section entitled "Bond Rating"
and the addjtion of "Appendix C - The Bond Insurer'~ there have been no other revisions to the Official Statement. For a description
of the Town's agreement to provide continuing diSClOsure as described in the Rule, see "Disclosure Undertaking" herein.
ROOSEVELT & CROSS, INC. AND ASSOCIATES
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
Town Hall
53095 Main Road
Southold, NY 11971
Telephone: (631) 765-4333
Fax: (631) 765-1366
TOWN BOARD
Scott A. Russell, Supervisor
William P. Edwards
Louisa P. Evans
Albert J. Krupski, Jr.
Daniel C. Ross
Thomas H. Wickham
Elizabeth A. Neville, Town Clerk
Peter W. Harris, Superintendent of Highways
John A. Cushman II, Town Comptroller
Patricia A. Finnegan, Esq., Town Attorney
George Sullivan, Receiver of Taxes
* * *
BOND COUNSEL
Hawkins Delafield & Wood LLP
New York, New York
* * *
FINANCIAL ADVISOR
MUNISTAT SERVICES, INC.
Municipal Finance Advisory Service
12 Roosevelt Avenue
Port Jefferson Station, N. Y. 1177 6
(631) 331-8888
E-mail: info@munistat.com
Website: http://www.munistat.com
TABLE OF CONTENTS
(Continued)
Page
TAX MATTERS........................................................................... 17
Opinion ofBond Counsel ................................................................ 17
Certain Ongoing Federal Tax Requirements and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 17
Certain Conateral Federal Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 17
Original Issue Discount.................................................................. 17
Bond Premium......................................................................... 18
Backup Withholding .................................................................... 18
Legislation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 18
DOCUMENTS ACCOMPANYING DELIVERY OFTHEBONDS. ................................ 18
Absence of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 18
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 19
Closing Certificates ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 19
DISCLOSURE UNDERTAKING............................................................. 19
BOND RATING ... . .. .. .. .. . . . . .. .. . . .. .. .. .. .. .. .. .. .. .. . . . . . .. .. . . .. .. .. .. .. .. .. .. .. .... 20
FINANCIAL ADVISOR .................................................................... 20
ADDITIONAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 20
APPENDIX A:
APPENDIX B:
APPENDIX C:
Financial Information
Audited Financial Statements For the Fiscal Year Ended December 31, 2005
Insurance on the Bonds
II
No dealer, broker, salesman or other person has been authorized by the Town to give any information or to make
any representations, other than those contained in this Official Statement and if given or made, such other information
or representations must not be relied upon as having been authorized by the Town. This Official Statement does not
constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in
any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth
herein has been obtained by the Town from sources which are believed to be reliable but it is not ~anteed as to
accuracy or completeness. The information and expressions of opinion herein are subject to change WIthout notice and
neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any
implication that there has been no change in the affaIrs of the Town since the date hereof.
TABLE OF CONTENTS
Page
THE BONDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. I
Description of the Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. I
Optional Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. I
Book-entry-only s5tem .................................................................. I
Authorization and ose . . . .. . .. .. .. . .. .. . . .. . . .. . . .. .. .. . .. . . . . .. . .. . . . .. . .. . . . . .. . . . ... 3
Security and Source 0 Payment ............................................................ 3
Remedies Upon Default. . . . . . . . . . . . . . . . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3
THE TOWN ............................................................................... 4
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 4
Government. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 4
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 5
ECONOMIC AND DEMOGRAPHIC INFORMATION.. .. . . . . . . . . . . . . . . . . .. . . . . . .. .. . . . . . . . . . ... 5
Population Characteristics ................................................................. 5
Median Income of Families ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 5
Unemployment Rate Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 6
Selected Listing of Larger Employers ................................................. . . . . . .. 6
INDEBTEDNESS OF THE TOWN ............................................................ 6
Constitutional Requirements ............................................................... 6
Statutory Procedure ................................................ ..................... 7
Computation of Debt Liroit and Calculation of Net Debt Contracting Margin. . . . . . . . . . . . . . . . . . . . . . . .. 8
TrenaofTownIndebtedness ............................................................... 8
Details of Short-Term Indebtedness Outstanding ............................................... 9
Debt Service Requirements - Outstanding Bonds ............................................... 9
Calculation of Estimated Overlapping and Underlying Indebtedness ................................ 9
Authorized But Unissued Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10
Capital Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10
Landfill Closure and Postclosure Care Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10
FINANCES OF THE TOWN ................................................................ I I
Financial Statements and Accounting Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. II
Fund Structure and Accounts ......................................................... 11
Basis of Accounting ................................................................ 11
~~j~=\!;.~~~aur'e~'::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: g
FinancialOperations .................................................................... 12
Revenues ............................................................................. 12
~r:.~~~iJ'~rtyTax~s.:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: g
~:K~~~i~~:en:.~ . : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :: :~
ContributIOns to the Retirement Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 13
Other Post Employment Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14
REAL PROPERTY TAX INFORMATION .................................................... 14
Real Property Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14
Tax Levy and Collection Record . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15
Tax CollectIOn Procedure ................................................................ 15
Tax Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15
Large Taxable Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., 15
LITIGATION............................................................................. 16
BONDHOLDER RISKS AND MARKET FACTORS AFFECTING FINANCINGS
OF THE STATE AND MUNICIPALITIES OF THE STATE ...................................... 16
OFFICIAL STATEMENT
$14,650,000
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
PUBLIC IMPROVEMENT SERIAL BONDS - 2007
[BOOK-ENTRY-ONLY BONDS]
This Official Statement presents certain information relatin~ to the Town of Southold, in the County of
Suffolk, in the State of New York (the "Town," "County" and "State,' respectively) in connection with the safe of
$14,650,000 Public Improvement Serial Bonds - 2007 (the "Bonds").
All quotations from and summaries and explanations of provisions of the Constitution and laws of the State
and acts and proceedings of the Town contained herein do not purport to be complete and are qualified in their
entirety by reference to the official compilations thereof and all references to the Bonds and the proceedings of the
Town relating thereto are qualified in their entirety by reference to the definitive form of the Bonds and such
proceedings.
THE BONDS
Description ofthe Bonds
The Bonds will be dated April 15, 2007 and will mature on April 15, in each of the years 2008 to 2030,
inclusive, in the principal amounts as set forth on the cover page hereof.
The Bonds will be issued in fully registered form and when issued will be registered in the name of Cede &
Co. as nominee of The Depository Trust Company ("DTC"), New York, New York. DTC will act as Securities
Depository for the Bonds. Individual purchases of the nonds may be made in book-entry form only, in denominations
of $5,000 or integral multiples thereof. Purchasers will not receive certificates representing their interest in the
Bonds.
Interest on the Bonds will be I?ayable October 15,2007, and semi-annually thereafter on April 15 and October
IS, in each year until maturity. Principal and interest will be paid by the Town to DTC, which will in turn remit such
principal and interest to its Participants, for subsequent distribution to the Beneficial Owners of the Bonds, as
described berein. The Bonds may be transferred in t1ie manner described on the Bonds and as referenced in certain
proceedings ofthe Town referred to therein.
The Record Date of the Bonds will be the last business day of the month preceding each interest payment
date.
Optional Redemption
The Bonds maturing on or before April 15, 2017 will not be subject to redemption prior to maturity. The
Bonds maturing on or after April IS, 2018 will be subjectto redemption prior to maturity, at the option of the Town,
on April 15, 2017 and thereafter on any date, in whole or in part, and if m part, in any order of their maturity and in
any am~unt within a maturity (selected by lot within a maturity), at par, plus accrued interest to the date of
redemptIOn.
The Bonds shall be redeemable prior to maturity upon the giving of notice which identifies the Bonds to be
redeemed, by mailing such notice to the registered holders thereof at their respective addresses as shown upon the
registration books of the Fiscal Agent at least 30 days prior to the date set for any such redemption. If notice of
redemption shall have been given as aforesaid, the Bonds so called for redemption shall become due and payable at
the applicable redemption price on the redemption date designated in such notice, and interest on such Bonds shall
cease to accrue from and after such redemption date.
Book-entry-only System
DTC will act as securities depository for the Bonds (the "Bonds"). The Bonds will be issued as fully-
registered Bonds registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be
requested by an authorized representative of DTC. One fully-registered Bond certIficate will be issued for each
maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.
I
DTC, the world's largest depository, is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of tile New York Banking Law, a member ofthe Federal
Reserve System, a "clearing corporation" within the meaning of the New York UnIform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section l7A of the Securities Exchange Act of1934. DTC
holds and provides asset servicing for over 2 million issues of U.S. and non-U.s. equi!r issues, corporate and
municipal aebt issues, and money market instruments from over 85 countries that DTC s partici{lants ("Direct
Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales
and other securitJes transactions in deposited securities, through electronic computerized book-entry transfers and
pledges between Direct Participants accounts. This eliminates the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust
& Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and
Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS
Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and EMCC, also
subsidiaries ofDTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and
the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both
U.S. and non-U .S. securities brokers and dealers, banks, trust companies, and clearin!l corporations that clearthrou~
or maintain a custodial relationship with a Direct Participant, either directly or indirectlY ("Indirect Participants' ).
DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the
Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will
receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond
("Beneficial Owner")is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will
not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive
written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the
Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting
on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests
in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subseguent transfers, all Bonds deposited by Direct Participants with DTC are registered in the
name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized
representative ofDTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such
other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners ofthe Bonds; DTC' s records reflect only the identity of the Direct Participants to whose accounts such Bonds
are credited, which mayor may not be the Beneficial Owners. The Direct and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to
Indirect PartiCipants, and by Direct Participants and Indirect Participants to BenefiCial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed,
DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be
redeemed.
Payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an
authorized representative ofDTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of
funds and corresponding detail information from the Town, on the payable date in accordance with their respective
holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary, practices, as is the case with bonds held for the accounts of customers in bearer form or
registered in "street name, ' and will be the responsibility of such Participant and not ofDTC nor its nominee, or the
Town, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments to Cede
& Co. (or such other nominee as may be requested by an authonzed representative ofDTC) is the responsibility of
the Town, disbursement of such {layments to Direct Participants will be the responsibili!}' ofDTC, and aisbursement
of such payments to the BeneficlRl Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving
reasonable notice to the Town. Under such circumstances, in the event that a successor depository is not obtained,
Bond certificates are required to be printed and delivered.
The Town may decide to discontinue use of the sy-stem of book-entry transfers through DTC (or a successor
securities depository). In that event, Bond certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-en~ system has been obtained from
sources that the Town believes to be reliable, but the Town takes no responsibility for the accuracy thereof.
2
--,.,.<""-,,..".,.._,,..~-,..._,,...~"".._--,..,,--
THE TOWN WILL NOT HAVE ANY RESPONSffiILITY OR OBLIGATION TO PARTICIPANTS, TO
INDIRECT PARTICIPANTS OR TO ANY BENEFICIAL OWNER WITII RESPECT TO (l) THE ACCURACY
OF ANY RECORDS MAINTAINED BY DTC, ANY PARTICIPANT, ORANYINDIREC1 PARTICIPANT; (ll)
THE PAYMENTS BY DTC OR ANY PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITB:
RESPECT TO THE PRINCIPAL OF, OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS; (Ill) ANY
NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO BONDHOLDERS; (IV) THE SELECTION
BY DTC OR ANY PARTICIPANT OR INDIRECTPARTIClPANT OF ANY PERSON TO RECEIVE PAYMENT
IN THE EVENT OF A PARTIAL REDEMPTION OF THE BONDS; OR (V) ANY CONSENT GIVEN OR OTHER
ACTION TAKEN BY DTC AS BONDOWNER.
Source: The Depository Trust Company
Authorization and Purpose
The Bonds are being issued pursuant to the Constitution and statutes ofthe State of New York, including
among others, the Town Law and the Local Finance Law, and various bond resolutions duly adopted by the Town
Board on their respective dates, authorizing the issuance of serial bonds for various capital projects of the Town.
Such projects, and their respective amounts of Bonds to be issued for each, are as follows:
Date of
Voter
Aooroval
Date
Authorized
08-26-03
08-28-01
08-23 -99
09-01-98
03-13-01 &
11-19-02
09-07-04
11-16-04
02-27-07
02-27-07
11-04-03
11-06-01
11-02-99
11-03-98
N.A.
N.A.
NA
N.A.
N.A.
Amount to
Puroose
be Issued
Open Space Preservation
Open Space Preservation
Open Space Preservation
Open Space Preservation
$ 4,000,000
2,000,000
2,000,000
1,987,900
1,200,000
315,000
3,000,000
95,000
52.100
...........................
............. ... ...........
...........................
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Solid Waste Management District - Land Acquisition ....
Payment of Settled Claim ..........................
Solid Waste Management District - Transfer Station .....
Acquisition of Excavator ...........................
Acquisition of Tractor-Mower . . . . . . . . . . . . . . . . . . . . . . .
Total ................................. ~14.650.000
A portion of the proceeds of the Bonds, together with available funds in the amount of$I,895,000, will be
used to redeem outstanding bond anticipation notes in the amount of $6,41 0,000; the balance of the proceeds of the
Bonds will provide original funds for the above referenced projects.
For further information regarding bond authorizations of the Town for capital purposes and other matters
relating thereto see "Indebtedness ofthe Town".
Security and Source of Payment
Each Bond when duly issued and paid for will constitute a contract between the Town and the holder thereof.
The Bonds will be general obligations of the Town and will contain a pledge of the faith and credit of the
Town for the payment of the principal thereof and the interest thereon. For the payment of such principal and
interest, the Town has the power and statutory authorization to levy ad valorem taxes on all taxable real property in
the Town without limitation as to rate or amount.
Under the Constitution of the State, the Town is rec;l';!ired to pledge its faith and credit for the payment of the
principal of and interest on the Bonds, and the State is specifically precluded from restricting the power of the Town
to levy taxes on real estate therefor.
Remedies Upon Default
Under current law, provision is made for contract creditors (including the Bondholders) of the Town to
enforce payments upon such contracts, if necessary, through court action, although the present statute limits interest
on the amount adjudged due to creditors to nine per centum per annum from the date due to the date of payment. As
a general rule,. property and fu!1ds of a municipal corpo.ration .serving the public w~lf~~ and interest have no~ been
judicially subjected to executIOn or attachment to satisfy a judgment, although Judicial m!illdates to offiCials to
appropriate and pay judgments out of current funds or the proceeds of a tax levy have been Issued.
3
Remedies for enforcement of payment are not expressly included in the Town's contract with holders of its
bonds and notes, although any permanent repeal by statute or constitUtional amendment of a Bondholder's remedial
right to judicial enforcement of the contract should, in the .opinion of Bond Counsel, be held unconstitutional.
The State has consented that any municipality in the State may file a petition with any United States district
court or court ofbankrupt~y under any J?fOvision of the laws of the United States, now or hereafter in effect for the
composition or adjustment of municipaJ Indebtedness. Subject to such consent, under the United States Constitution,
Congress has jurisdiction over such matters and has enacted amendments to the existing federal bankruptcy statute,
generally to the effect and with the purpose of affording municipal corporations, under certain circumstances, with
easier access to judicially approved adjustment of debts, Includingjudicial control over identifiable and unidentifiable
creditors.
In recent times, certain events and legislation affecting remedies on default have resulted in litigation. While
courts of final jurisdiction have upheld and sustained the rights of bondholders, such courts might hold that future
events including financial crises as they may oocur in the State and in municipalities of the State require the exercise
by the State of Its emergency police powers to assure the ~ontinuation of essential services.
No principal or interest payments on Town indebtedness are past due. The Town has never defaulted in the
payment of the pnncipal of and interest on any indebtedness.
THE TOWN
There follows in this Statement a brief description of the Town, together with certain information concerning
its economy and governmental organization, its indebtedness, current major revenue sources and expenditures and
general and specific funds.
General Information
The Town, with a land area of 54.5 square miles, is located in eastern Suffolk County on the north fork of
Long Island. Settlementtook place in 1640. The Village of Green port is located wholly within the Town. The Town
also Includes the area of Fishers Island which is looated approximately twelve miles east of the mainland. Fishers
Island is accessible only by water or air with ferry service operating between the Island and New London,
Connecticut.
.. 'The Town is primarily a rural resort area with substantial shopping facilities avaiIableutGreenport, at various
shopping centers withintbeTown,ancht Riverhead just to the west; . Some commercial:servicesare available within
the Town in the hamlets of Southold, Cutchogue and Mattituck.
Agriculture has been a major industry in the Town since its origins. In recent years, farm crops are gradually
evolving from basic production to nursery crops including shrubs, sod, potted plants and other ornamentals. A
substantial portion or these products are shipped by ferry across Long Island Sound for distribution throughout New
England. A number of vineyards have been establIshed and wine-making is an important industry. Fishing and fish
processing are now growing industries due to improved transportation facilities. The Town is also a major summer
resort area, utilizing bays, Inlets and Long Island and Block Island Sounds.
The main highways in the Town are New York State Route 25 and North Road. Rail transportation is
provided by the Long Island Rail Road with stations at Mattituck, Southold and Greenport. Ferry service is also
available between OnentPoint, east of Green port, and New London, Connecticut as well as from Greenport to Shelter
Island.
Electric service is provided by the Long Island Power Authority; gas service is provided by Keyspan Energy
Corporation. Fire protection is the responsibilIty of volunteer fire and fire protection districts. The Town provides
its own police protection. In the Village of Green port, electric service and fire protection are provided by the Village.
Government
Six independently governed school districts are located wholly or partially within the Town, which rely on
their own taxing powers granted by the State to raise revenues. The school districts use the Town's assessment roll
as their basis for taxation of property located within the Town.
Subjecttothe provisions of the State Constitution, the Town operates pursuant to the Town Law, the General
Municipal Law, the Local Finance Law, other laws generally applicable to the Town, and any special laws generally
applicable to the Town. Under such la~s, there is no authority for the Town to ~ave a ~harter, but pursuant to !he
Town Law and other laws generally applIcable to home rule, the Town may from time to time adopt local laws which
do not conflict with existing laws as enacted by the State.
4
The legislative power of the Town is vested in the Town Board, which consists of five members, elected for
a term of four years, ana the Supervisor, who is the chief executive officer of the Town, elected for a term of two
years; effective with the term commencing January 1,2008, the term of office of the Supervisor will be four years.
Such terms are staggered such that two or three councilmen are elected every two years. All the Town Board
members are elected at large and there is no limitation to the number of terms each may serve.
Employees
The Town provides services through approximately 217 full-time and 59 part-time employees, some of whom
are represented by organized labor.
The following table presents the number of employees' represented by organized labor, name of union and
contract expiration dates.
Date Contract
Exoires
Approximate
Membership
Name of Union
Civil Service Employees Assoc. .......................
Police Benevolent Assoc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
163
48
12-31-07
12-31-09
ECONOMIC AND DEMOGRAPffiC INFORMATION
Population Characteristics
The Town has had a population trend, as compared to the County and the State, as indicated below:
Year
Town of Suffolk New York
Southold County State
16,804 1,127,030 18,241,391
19,172 1,284,231 17,557,288
19,836 1,321,977 17,990,455
20,599 1,419,369 18,976,457
23,344 1,483,396 19,254,630
1970 .....................................
1980 .....................................
1990 .....................................
2000 .....................................
2005 .....................................
Source: U.S. Bureau of the Census, Long Island Power Authority.
Median Income of Families
Town
County
State
1980
$21,013
24,194
20,180
1990
$43,082
53,247
39,741
2000
$61,108
72,112
51,691
Source: U.S. Department of Commerce, Bureau of the Census.
Per Caoita Monev Income
1990 2000
Town
County
State
1980
$8,258
7,576
7,496
$19,037
18,481
16,501
$ 27,619
26,577
23,389
Source: U.S. Department of Commerce, Bureau of the Census.
5
Unemployment Rate Statistics
Unemployment statistics are not available for the Town as such. The smallest area for which such statistics
are available (wliich includes the Town) is the County of Suffolk. The information set forth below with respect to
such County is included for information purposes only. It should not be implied from the inclusion of such data in
this Statement that the Town is necessarily representative of the County or vice versa.
Suffolk
County
New York
State
Annual Averages:
2002
2003
2004
2005
2006
4.3%
4.3
4.5
4.2
3.9
5.9%
6.2
5.9
5.0
4.5
Source: Department of Labor, State of New York
Selected Listing of Larger Employers
Name
1m<
Hospital
Public School
U.S. Govt. Facility
Local Government
Public School
Nursing Home
Life Care Community
Public School
Approx. No.
of Emolovees
Eastern Long Island Hospital . . . . . . . . . . . . . . . . . . . . . . .
Mattttuck-Cutchogue UFSD .......................
Plum Island ADC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Town of South old ...............................
Southold UFSD .................................
San Simeon by the Sound .........................
Peconic Landmg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Greenport UFSD ................................
376
330
290
276
194
165
160
137
INDEBTEDNESS OF THE TOWN
Constitutional Requirements
The New York State Constitution limits the power of the Town (and othermunicil?alities and school districts
of the State) to issue obligations and to contract indebtedness. Such constitutional limitatIOns include the following,
in summary form, as generally applicable to the Town and the Bonds:
Purpose and Pledge. The Town shall not give or loan any money or property to or in aid of any individual,
or private corporation or pnvate undertaking or give or loan its creditto or in aId of any of the foregoing or any public
corporation.
The Town may contract indebtedness only for a Town purpose and shall pledge its faith and credit for the
payment of principal of and interest thereon.
Payment and Maturity. Except for certain short-term indebtedness contracted in anticipation of taxes or
to be paid within three fiscal year (leriods, indebtedness shall be paid in annual installments commencing no later than
two years after the date sucli indebtedness shall have been contracted and ending no later than the expiration of the
period of probable usefulness of the object or purpose determined by statute; no installment may be more than fifty
per centum in excess of the smallest pnor installment, unless the Town has authorized the issuance of indebtedness
having substantially level or declining annual debt service. The Town is required to provide an annual appropriation
for the payment of interest due during the year on its indebtedness and for the amounts required in such year for
payment of principal on its serial bonds, bOnd anticipation notes and capital notes.
Debt Limit. The Town has the power to contract indebtedness for any Town purpose so long as the principal
amount thereof shall not exceed seven 'per centum 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 consists of dividing
the total assessed valuation of taxable real estate for a specified assessment roll by the fmal equalization ratio
established for such assessment roll by the State Board of Real Property Services (tile "State Board"). The State
Legislature is required to prescribe the manner by which such ratio shan be determmed. Average fulf valuation is
determined by taking the sum of the full valuations of such last completed assessment roll and the four preceding
assessment rolls and dividing such sum by five.
6
There is no constitutional limitation on the amount that may be raised by the Town by tax on real estate in
any fiscal year to pay interest and principal on all indebtedness.
General. The Town is further subject to constitutional limitation by the general constitutionally imposed
duty ofthe State Legislature to restrict the power of taxation, assessment, borrowing money, contracting indebtedness
and loaning the credit of the Town so as to prevent abuses in taxation and assessments and In contracting
indebtedness; however, as has been noted under "Security and Source of Payment" the State Legislature is prohibited
by a specific constitutional provision from restricting the power of the Town to levy taxes on real estate for the
payment of interest on or pnncipal of indebtedness theretofore contracted.
Statutory Procedure
In general, the State Legislature has authorized the power and procedure for the Town to borrow and incur
indebtedness by the enactment ofthe Local Finance Law subject, of course, to the constitutional provisions set forth
above. The power to spend money, however, generally derives from other law, including the Town Law and General
Municipal Law of the State.
Pursuant to the Local Finance Law, the Town authorizes the incurrence of indebtedness, including bonds and
bond anticipation notes issued in anticipation of such bonds, by the adoption of a resolution, approved by at least two-
thirds ofthe members of the Town Board, the finance board of the Town. Certain of such resolutions may be subject
to permissive referendum, or may be submitted to the Town voters at the discretion of the Town Board; In this latter
scenario, only a three-fifths vote of the Town Board is required.
The Local Finance Law also provides a twenty-day statute of limitations after publication of a bond
resolution, which in effect, estops thereafter legal challenges to the validity of obligations authorized by such bond
resolution except for alleged constitutional violations. The Town has complied with such procedure with respect to
the Bonds.
Each bond resolution usually authorizes the construction, acquisition or installation of the object or purpose
to be financed, sets forth the plan of financing and specifies the maximum maturity of the bonds subject to the legal
(Constitution, Local Finance Law and case law) restrictions relating to the period of probable usefulness with respect
thereto.
Each bond resolution also authorizes the issuance of bond anticipation notes prior to the sale of serial bonds.
Statutory law in New York permits notes to be renewed each year, provided annual principal reductions are made
and provided that such renewals generally do not extend five years beyond the original date of borrowing. However,
notes issued in anticipation of the sale of serial bonds for assessable Improvements are not subject to such five year
limit and may be renewed subject to annual principal reductions for the entire period of probable usefulness of the
purpose for which such notes were originally Issued. (See "Payment and Maturity" under "Constitutional
Requirements," and "Details of Short-Term Indebtedness Outstanding.")
In general, the Local Finance Law contains similar provisions providing the Town with power to issue
general obhgation revenue and tax anticipation notes and general obligatIOn budget and capital notes.
The following tables set forth the computation of debt limit and the calculation oftotal net indebtedness
ofthe Town in accordance with the constitutional requirements hereinabove described.
The following pages set forth certain details with respect to the indebtedness of the Town.
7
Computation of Debt Limit and Calculation of Net Debt Contracting Margin
(As of March 27, 2007)
F iscal Year
Ending
December 31:
State
Equalization
Rate
Assessed
Valuation
2003
2004
2005
2006
2007
$ 98,928,528
101,872,561
104,228,885
105,502,965
106,950,027
1.71 %
1.49
1.25
1.13
1.04
Total Five Year Full Valuation ................................................
Average Five Year Full Valuation .............................................
Debt Limit - 7% of Average Full Valuation ......................................
Inclusions:
Outstanding Bonds:
General Purposes .....................................................
Other .. . .. . .. . . .. .. . . . .. . .. . .. . .. .. .. . .. .. .. .. . .. . .. .. . . .. .. .. ..
Sub-Total
Bond Anticipation Notes ....................................................
Total Inclusions ........................................................
Exclusions:
Cash on !ll!Ild for Debt (Grant Proceeds) .....................................
AppropriatIOns .........................................................
Total Exclusions ........................................................
Total Net Indebtedness Before Issuing the Bonds .................................
The Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: BANs to be paid from bond proceeds ......................................
Net Effect ofIssuing Bonds .............................................:....
Total Net Indebtedness After Issuing the Bonds ..................................
Net Debt Contracting Margin After Issuing the Bonds .............................
Percent of Debt Limit Exhausted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Full
Valuation
$ 5,785,294,035
6,837,084,630
8,338,310,800
9,336,545,575
10.283.656.442
$40,580,891,482
8,116,178,296
568,132,480
$10,775,000
-0-
10.775.000
8.244.000
19.019.000
1,504,689
1.003.311
$ 2.508.000
15.511.000
14,650,000
4.515.000
10.135.000
25.646.000
$542.486.480
4.51%
Trend of Town Indebtedness
The following table represents the outstanding indebtedness ofthe Town at the end ofthe last five preceding
fiscal years.
Fiscal Year Endinl! December 31:
2002 2003 2004 2005 2006
Debt Outstanding End of Year: $7,615,000 $6,950,000 $6,5 I 5,000 $12,299,098 $ 11,349,098
Bonds ..................
Bond Anticipation Notes ... 11.020.709 14.768.302 12.625.600 11.720.000 8.244.000
Total Outstanding Debt ........ $18.635.709 $21.718.302 $19.140.600 $24.019.098 $19.593.098
8
Details of Short-Term Indebtedness Outstanding
Bond Anticioation Notes
Maturitv
Puroose
Amount
04-20-07
06-08-07
08-24-07
09-07-07
Various Purposes ..........................................
Fishers Island Fel'!)' District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fishers Island Refuse and Garbage District . . . . . . . . . . . . . . . .
Various Purposes ..........................................
$6,619,000.
1,625,000
560,000
1.110.000
Total ................................................ $ 8.244.000
.. To be funded from the proceeds of the Bonds and from available funds of the Town.
Debt Service Requirements - Outstanding Bonds
Fiscal Year
Endin~
Decem er 31: Principal Interest Total
2007 ....................... $ 979,098 $376,468 $1,355,566
2008 ....................... 995,000 345,309 1,340,309
2009 ....................... 1,025,000 312,348 1,337,348
2010 ....................... 1,000,000 277,957 1,277,957
2011 ....................... 1,025,000 242,982 1,267,982
2012 . . . . . . . . . . . . . . . . . . . . . . . 940,000 209,413 1,149,413
2013 . . . . . . . . . . . . . . . . . . . . . . . 800,000 180,382 980,382
2014 . . . . . . . . . . . . . . . . . . . . . . . 815,000 153,083 968,083
2015 ....................... 810,000 124,535 934,535
2016 ....................... 735,000 98,164 833,164
2017 ....................... 745,000 72,318 817,318
2018 ....................... 760,000 45,712 805,712
2019 ....................... 320,000 26,020 346,020
2020 . . . . . . . . . . . . . . . . . . . . . . . 200,000 15,600 215,600
2021 . . . . . . . . . . . . . . . . . . . . . . . 200.000 8.000 208.000
Totals ................... $11.349.098 $2.488.291 $13.837.389
a. Does not included refunded bonds.
Calculation of Estimated Overlapping and Underlying Indebtedness
Altclicable AIRl1icable
Overlallping Date of PercentaNe otal et
Unitsa Report Applicao e Indebtedness Indebtedness
County of Suffolk ..................... 12-11-06 3.71% $36,425,459 $30,380,486
V iIlage of Greenport ................... 03-10-06 100.00 13,583,997 12,564,797
School Districts:
Fishers Island . . . . . . . . . . . . . 06-30-06 100.00 455,000 455,000
Greenport ................. 06-30-06 100.00 270,000 270,000
Mattituck-Cutchogue ....... 06-30-06 98.49 29,113,644 25,328,870
New Suffolk Common ...... 06-30-06 100.00 - -
Oyster Ponds .............. 06-30-06 100.00 150,000 150,000
Southold ................. 06-30-06 100.00 10,795,000 10,795,000
Fire Districts:
Cutchogue .. . .. . . .. .. . . . . .. 12-31-05 100.00
East Marion ............... 12-31-03 100.00 410,683 410,683
Fishers Island .............. 12-31-05 100.00
Mattituck ................. 12-31-05 100.00
Orient .................... 12-31-05 100.00 25,000 25,000
Southold .................. 12-31-05 100.00 1.600.000 1.600.000
$ 97.693.283 $ 86.204.151
a. Does not include refunded bonds.
Sources: Annnal Financial Reports on file with the Office of the State Comptroller, or more recently published Official
Statements.
9
Authorized But Unissued Items
The following Bonds are authorized but unissued:
Date
Authorized
Puroose
09-01-98
08-23-99
08-28-0 I
02-25-03
08-26-03
08-16-05
11-21-06
02-27-07
02-27-07
02-27-07
02-27-07
Acquisition of Rights in Land-Open Space Preservation. . . . . . . . . . . . . . .
Acquisition of Rights in Land-Open Space Preservation ..............
Acquisition of Rights in Land-Open Space Preservation ..............
Mattituck Inlet Sliore Erosion Study ..............................
Acquisition of Rights in Land-Open Space Preservation. . . . . . . . . . . . . . .
Construction ofN'ew Town Animal Shelter. . . . . . . . . . . . . . . . . . . . . . . . .
Improvements to Peconic Recreation Center . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of Air Vacuum Drain Cleaner .........................
Acquisition of Rights in Land-Open Space Preservation. . . . . . . . . . . . . . .
Acquisition of Excavator .......................................
Acquisition of Tractor-Mower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total
a. To be funded in whole or in part from the proceeds of the Bonds.
Amount
$ 2,000,000'
2,000,000'
2,000,000'
82,750
4,000,000'
2,600,000
200,000
278,000
22,500,000
100,00'
60.000'
$35.820.750
Capital Program
The Town annually adopts a Capital Budget. Projects may be funded by State and Federal aid, reserves,
proceeds of obligations, property taxes or a combination thereof. A summary of the Capital Budget for 2007 is set
forth helow:
DeDartment
General Town ....................................
Highway Dept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SoTid Waste District ...............................
Wastewater Disposal District .......................
Total.......................................... .
Sources
Appropriations ...................................
Grants .. .. . .. .. . .. . .. . .. .. . .. . .. . . .. .. .. . .. . .
Town Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total
2007
$3,327,428
788,000
465,000
$ 4.580.428
$ 313,261
684,167
3.583.000
$ 4.580.428
Landfill Closure and Postclosure Care Costs
The Town owns a landfill on a site in the unincorporated area of Cutchogue, commonly known as the
Cutchogue Landfill. The Town ceased accepting waste at its Cutchogue Landfill as of October 8, 1993. Placement
of the ffnal cover, referred to as carping, on the landfill was completed in November 2003. In addition to placement
of the final cover on the landfil, state and federal regulations presently require the Town to perform certain
maintenance and monitoring functions at the site for up to thirty years. The Town has and will continue to comply
with said requirements. The ongoing post closure costs are esltmated to be between $20,000 and $25,000 per year
from 2007 through 2009. The Town paid $23,920 for such costs in 2006 and will continue to pay these costs in the
future.
Actual costs associated with the capping totaled $7,681,720. Financing for closure activities has been
provided in part through a grant from the New York State Department of Environmental Conservation in the amount
of$2,OOO,000. The balance was provided through a State subsidized loan received in July, 2004 from the New York
State Environmental Facilities Corporation. Costs associated with postclosure care will be covered by charges to
future users of the collection facility and site and future tax revenue.
10
FINANCES OF THE TOWN
Financial Statements and Accounting Procedures
The Town maintains its financial records in accordance with the Uniform System of Accounts for Towns
prescribed by the State Comptroller. The financial records of the Town are audited by Independent accountants. The
last such audit made available for public inspection covers the fiscal year ended Decemoer 31, 2005. In addition,
the financial affairs of the Town are subject to periodic compliance review by the Office of the State Comptroller
to ascertain whether the Town has complied with the requirements of various State and Federal statutes.
In June, 1999, the Governmental Accounting Standards Board ("GASB") issued Statement 34, "Basic
Financial Statements and Management's Discussions and Analysis for State and Local Governments". This
Statement established new finanCial reporting requirements for state and local governments throughout the United
States. It will required new information and restructuring of much of the information that governments have
presented in the past. Comparability with reports issued in an prior years will be affected. GASB required the Town
to implement thiS standard for the fiscal year ending December 31, 2003 and the Town has complied with such
requirements.
Fund Structure and Accounts
The Town utilizes fund accounting to record and report its various service activities. A fund represents both
a legal and an accounting entity which segregates the transactions of specific programs in accordance with special
regulations, restrictions or limitations.
There are three basic fund types: (I) governmental funds that are used to account for basic services and
capital projects; (2) proprietary funas that account for operations of a commercial nature; and, (3) fiduciary funds
that account for assets held in a trustee capacity. Account groups, which do not represent funds, are used to record
fixed assets and long-term obligations that are not accounted for in a specific fund.
The Town presently maintains the following governmental funds: General Fund, Highway Fund and Special
Districts Funds, and the Capital Projects Fund. Fiduciary funds consist of a Trust and Agency Fund. There are no
proprietary funds. Account groups are maintained for fixed assets and long-term debt.
Basis of Accounting
The Town's .!lovernmental funds are accounted for on a modified accrual basis of accounting. Under the
modified accrual baSIS, revenues are recognized when they become susceptible to accrual- that is, when they become
"measurable" and "available" to finance expenditures to the current period. Revenues are susceptible to accrual
include real property taxes, intergovernmental revenues (State and Federal aid) and operating transfers.
Expenditures are generally recognized under the modified accrual basis of accounting, that is when the
related fund liability is incurred. An exception to this general rule is unmatured interest on general long-term debt
which is recognized when due.
Investment Policy
Pursuant to State law, including Sections 10 and II of the General Municipal Law (the "GML"), the Town
is generally permitted to deposit moneys in banks or trust companies located and authorized to do business in the
State. All such deposits, including special time deposit accounts and certificates of deposit, in excess of the amount
insured under the Federal Depositlnsurance Act, are required to be secured in accordance with the provisions of and
subject to the limitations of Section 10 of the GML.
The Town may also temporarily invest moneys in: (I) obligations of the United States of America; (2)
obligations guaranteed by agencies of the United States of America where the payment of principal and interest are
guaranteed by the United States of America; (3) obligations of the State of New York; (4) with the approval of the
New York State Comptroller, in tax anticipation notes or revenue anticipation notes issued by any municipality,
school district, or district corporation, other than those notes issued by the Town, itself; (5) certificates of
participation issued in connection with installment purchase agreements entered into by political subdivisions of the
State pursuantto Section I 09-b( I 0) of the GML; (6) obligations of a New York public benefit corporation which are
made lawful investments for municipalities pursuant to the .enabling statute of such public benef!t cOl'J?Ora~ion; or (7)
in the case of moneys held in certaIn reserve funds estabhshed by the Town pursuant to law, In obligatIons of the
Town.
All of the foregoing investments are required to be. payable or redeemable at ~e option of the owner wi.thin
such times as the proceeds will be needed to meet expenditures for purposes for which the moneys were pr~vlded
and, in the case of obligations purc~a~ed with the proceeds of bonds or notes, shall b~ payable .or re~eemable In any
event, at the option of the owner, WithIn two years of the date of purchase. Unless registered or InSCribed In the name
11
of the Town, such instniments and investments must be purchased through, delivered to and held in custody ofa bank
or trust company in the State pursuant to a written custodial agreement as provided by Section 10 of the GML.
The Town Board has adopted an investment policy and such policy conforms with allplicable laws of the
State governing the deposit and investment of public moneys. All deposits and investments of the Town are made
in accordance with such policy.
Budgetary Procedures
The head of each administrative unit of the Town is required to file detailed estimates of revenues (other than
real property taxes) and expenditures for the next fiscal year With the budget officer (Supervisor) on or before August
15". Estimates for each fire district situated within the Town must also be filed with the budget officer by this date.
After reviewing these estimates, the budget officer prepares a tentative budget which includes his recommendations.
A budget message explaining the main features of the budget is also prepared at this time. The tentative budget is
filed with the Town Clerk not later than the 30th of September. Subsequently, the Town Clerk presents the tentative
budget to the Town Board at the regular or special hearing which must be held on or before October 5th. The Town
Board reviews the tentative budget and makes such changes as it deems necessary and that are not inconsistent with
the provisions of the law. Following this review process, the tentative budget and such modifications, if any, as
approved by the Board become the preliminary buClget. A public hearing, notice of which must be duly published
in the Town's official newspaper, on the preliminary budget is generally required to be held on the Thursday
immediately following the general election. At such hearing, any person may express his opinion concerning the
preliminary budget; however, there is no requirement or proVision tliat the prehminary budget or any portion thereof
be voted on by members of the public. After the public hearing, the Town Board may further change and revise the
preliminary budget. The Town Board, by resolutIOn, adopts the preliminary budget as submitted or amended no later
than November 20th, at which time, the preliminary budget becomes the annual budget of the Town for the ensuing
fiscal year. Budgetary control during the year is the responsibility of the Supervisor who is assisted in this area by
the Town Comptroller. However, any changes or modifications to the annual budget including the transfer of
appropriations among line items must be approved by resolution ofthe Town Board.
Budget Summaries for the 2006 and 2007 fiscal years may be found in Appendix A.
Financial Operations
The Supervisor functions as the chief fiscal officer as provided in Section 2 of the Local Finance Law; in this
role, the Supervisor is responsible for the Town's accounting and financial replJrtingactivities. In addition, the
Supervisor IS also the Town'sbudgevofficer and must therefore prepare the lIIlIliud tentativll'budget for submission
to the TownBoard. Pursuant to. Section 30 of the Local Finance Law;. the Supervisor has been authorized to issue
or renew certain specific. types of notes. As required by law, the Supervisor must execute an'authorizing certificate
which than becomes a matter of public record.
The Town Board, as a whole, serves as the finance board of the Town and is responsible for authorizing, by
resolution, all material financial transactions such as operating and capital budgets and bonded debt.
Town finances are operated primarily through the General and Special Revenue Funds. The General Fund
receives most of its revenue from real property tax and State aid. Current operating expenditures are paid from these
funds subject to available appropriatIons. The Town also has refuse, sewer and wastewater districts, which are
accounted for within separate funds. The primary sources of income for these districts comes from special
assessments levied against district properties at the same time real estate taxes are levied. Capital projects and
equipment purchases are accounted for In special capital projects funds. The Town observes a calendar year (January
I through December 3 I) for operating and reporting purposes.
Revenues
The Town receives most of its revenues from a real property tax on all non-exempt property situated within
the Town and from State Aid. A summary of such revenues for the five most recently completed fiscal years may
be found in Appendix A.
Real Property Taxes
See "Real Property Tax Information", herein.
State Aid
The Town is dependent upon financial assistance from the State which comes primarily in the form of a state
appropriation for State Aid to municipalities for operating purposes. There is no assurance, however, that the State
appropriation for State Aid to municipalities will continue, either pursuant to existing formulas or in any form
whatsoever and, in any event, if appropriated and apportioned to the Town, payment can be made only if such monies
are available therefore. The State IS not constitutionally obliged to maintain or continue such aid. See Appendix A.
12
Expenditures
The malor categories of expenditure for the Town are General Government Support, Public Safety,
Transportation, EconomIc Assistance and Opportunity Home and Community Services, Culture and Recreation
Employee Benefits and Debt Service. A summary oillie expenditures for the five most recently completed fiscal
years may be found in Appendix A.
Pension Systems
Substantially all employees of the Town are members of the New York State and Local Employees'
Retirement System l"ERS") or the New York State and Local Police and Fire Retirement System ("PFRS"). (Both
Systems are referred to together hereinafter as the "Retirement Systems" where appropriate.) The Retirement
Systems are cost-sharing multiple public employer retirement systems. The obligation of employers and employees
to contribute and the benefits to employees are governed by the New York State Retirement System and Social
Security Law (the "Retirement System Law"). The Retirement Systems offer a wide range of plans and benefits
which are related to years of service and fmal average salary vesting of retirement benefits, death and disability
benefits and optional methods of benefit pa.Y.Jllents. All bene~ts generally vest after five years of credited service.
The Retirement System Law generally provl(Jes that all participating employers in each retIrement system are jointly
and severally liable for any unfunded investments. Such amounts are collected throug/I annual billings to all
participating employers. Generally, all employeesl except certain part-time employees, participate in the Retirement
Systems. The Retirement Systems are non-contrioutory with respect to memllers hired prior to July 27, 1976. All
employees who became members on or after July 27, 1976 must contribute 3% of their gross annual salary towards
the cost of their retirement program. Chapter 86 of the Laws of 2000 eliminated the 3% for Tier 3 and Tier 4
members with 10 years of service credit.
Due to unfavorable capital market returns over recent years and negative returns in each of the past three
years, the State Comptroller lias sent notice to every school district and municipality in New York State that he
believes that the retirement contributions will continue to increase in subsequent years.
With regard to the Retirement Systems, a pension reform bill was signed by the Governor into Law as
Chapter 49 of the Laws of2003. Chapter 49 changed the cycle of billing to match budget cycles of the Town. Under
the previous method, the Town was unsure of how much it would have to pay to the system until after its budget was
implemented. Under the new system the contribution for a given fiscal year will be based on the value of the pension
fund on the prior April I instead of the following April I so that the Town will be able to more accurately include
the cost oftlie contribution into its budget. Chapter 49 requires the Town to make a minimum contribution of 4.5%
of payroll every year, including years in which the investment performance of the fund would make a lower
contribution possible.
On July 20,2004 the New York State Legislature passed a bill amendinKthe General Municipal Law, Local
Finance Law and the Retirement and Social SecurIty Law. On July 30, 2004, the Governor signed the new retirement
system legislation into Law as Chapter 260 of the Laws of2004. The bill gives the employer the option to move the
annual payment date for contributions from December 15th to February I Q, effective December 15, I004. It increases,
from five to ten years, the maximum amortization period of the portIOn of employer contributions that exceeds 7%
of payroll for the 2004-2005 fiscal )lear of the Retirement System (April I - March 31). It also allows employers to
issue bonds to finance their 2005-2006 and 2006-2007 fiscal year contributions in excess of 9.5% and 10.5%,
respectively. This amortization may be made with the Retirement System or the Town could issue a maximum of
I O-year general obligation bondsl tlie interest on which would be set at prevailing bond market rates on the date of
sale and would be taxable for feoeral income tax purposes.
For the payment due December 15,2007, it is estimated that the contribution will be approximately 11.5%
of payroll.
The Town paid its retirement obligation in full on December 15,2006 and has included its total obligation
for the 2006 fiscal year in its current budget. The Town does not plan to amortize its retirement system obligations.
While the Town is aware of the potential negative impact on its budget and will take the appropriate steps
to budget accordingly for the increase, there can be no assurance that its financial position will not be negatively
impacted as a result of the potential increase in such contributions.
Contributions to tbe Retirement Systems
Fiscal Year
Ending
Decemoer 31 :
Amount
of
Contribution
2002 .......................................
2003 .......................................
2004 .......................................
2005 .......................................
2006 ......................................
2007 (Budget) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 164,287
684,617
1,670, I 02
2,085,137
1,837,992
1,827,000
13
Other Post Employment Benefits
It should also be noted that the Town provides post-retirement healthcare benefits to various categories of
former employees. These costs may be expected to rise substantially in the future. There is now an accounting rule
that will reqUire governmental entIties, such as the Town, to account for post-retirement healthcare benefits as it
accounts for vested pension benefits. GASB Statement No. 45 ("GASB 45") of the Governmental Accounting
Standards Board ("GASB "), described below, requires such accounting. Although GASB 45 encourages earlier
adoption, implementation is required by the following dates, based on the size of government measured by annual
revenue:
Annual Revenue
Effective for Fiscal Year Ending After:
December 15, 2006
December 15, 2007
December 15, 2008
Greater than $100 million
Between $10 million and $100 million
Less than $10 million
School Districts and Boards of Cooperative Education Services, unlike other municipal units of government
in the State, have been prohibited from reducing retiree health benefits or increasing health care contributions
received or paid by retirees below the level of benefits or contributions afforded to or reqUired from active employees
since the implementation of Chapter 729 of the Laws of 1994. This protection from unilateral reduction of benefits
has been extended annually and continued through May 15,2006 pursuant to Chapter 16 of the Laws of 2006.
Legislative attempts to provide similar protection to retirees of other local units of government in the State have not
succeeded as oftliis date. Nevertheless, many such retirees of all varieties of municipal units in the State do presently
receive such benefits.
GASB 45 and OPEB. OPEB refers to "other post-employment benefits," meaning other than pension
benefits, disability benefits and OPEB consist primarily of health care benefits, and may include other benefits such
as disability benefits and life insurance. Until now, these benefits have generally been administered on a pay-as-you-
go basis and have not been reported as a liability on governmental financial statements.
GASB 45 will require municipalities and school districts to account for OPEB liabilities much like they
already account for r.ension liabilities, generally adopting the actuarial methodologies used for pensions, with
adjustments for the different characteristics of OPEB and the fact that most municipalities and school districts have
not set aside any funds against this liability. Unlike GASB 27, which covers accounting for pensions, GASB 45 does
not require municipalities or school districts to report a net OPEB obligation at the start.
Under GASB 45, based on actuarial valuation, an annual required contribution ("ARC") will be determined
for each municipality or school district. The ARC is the sum of (a) the normal cost for the year (the r.resent value
of future benefits being earned by current employees) plus (b) amortization of the unfunded accrued liability (benefits
already earned by current and former employees but not yet provided for), using an amortization period of not more
than 30 years. If a municipality or school district contributes an amount less than the ARC, a net OPEB obligation
will result, which is required to be recorded as a liability on its financial statements.
GASB 45 does not require that the unfunded liability actually be amortized nor that it be advance funded,
only that the municipality or school district account for its unfunded accrued liability and compliance in meeting its
ARC. The Town expects to be in compliance with the requirements ofGASB 45 by or before the applicable effective
date.
Actuarial valuation will be required every 2 years for OPEB plans with more than 200 members, every 3
years if there are less than 200 members.
REAL PROPERTY TAX INFORMATION
Real Property Taxes
The Town derives a significant portion of its annual revenue through a direct real property tax.
The following table presents the total tax levy, by purpose, with adjustments and collection performance for
each of the last five fiscal years.
14
Tax Levy and Collection Record
Fiscal Year Endin~ December 31:
2004 200 2006
Total Tax Levy. . . . . . . . . . . . . . . .
Amount Collected .............
Returned to County
Amount ....................
Percentage ..................
Uncollected at End of Year
of Levy ...................
2003
$74,603,829
72,211,402
2,392.427
3.20%
$89,934,663
86,628,595
3,106,068
3.45%
$79,909,681
77,595,985
2,313,696
2.90%
$89,495,573
83,356,976
2,138,597
2.39%
None
None
None
None
a. As of February 6. 2007
2007
$97,216,091
54,175,000'
43,041,091a
44.27%'
NA
Tax Collection Procedure
Property taxes for the Town are collected by the Town tax receiver. Such taxes are due and payable in equal
installments on December I and May 10, but may be paid without penalty by January 10 and May 31, respectively.
The penalty added to delinquent taxes is one-twelfth the rate of interest determined by the State Commissioner of
Taxation and Finance. The rate is determined each year by July 15 based on the one-year constant maturity yield
index for United States Treasury securities for the quarter-year ending on the immediately preceding June 30. The
rate is effective for a twelve month period commencing August 1 each year and in no event will be less than ten per
centum per annum.
The Town receives its full levy before the end of its fiscal year. Uncollected amounts are not segregated by
the Town tax receiver, and any deficiency in tax collection is the County's liability.
Tax Rates
(Per $100 Assessed Valuation)
Fiscal Year Endin~ December 31:
2003 2004 005 2006 2007
General- Townwide ................
General- Outside Village ............
Highway ......................
$133.38
3.10
36.59
$139.73
5.43
38.37
$140.37
4.90
40.68
$136.65
4.53
31.12
Large Taxable PropeIjes
2007 Assessment Roll
Name
Peconic Landingat Southold .......................
LILCO, LIPA, Marketspan, Keyspan .................
Village of Greenport-Power Plant. .. .. . .. .... . ... ....
Fishers Island Dev. Corp. ..........................
Robins Island Holding LLC . . . . . . . . . . . . . . . . . . . . . . . . .
AlanCardinale ..................................
Damianos,Herodotus............................. .
New York Telephone .............................
Levin Family Lunited Partnership. . . . . . . . . . . . . . . . . . . .
Anderson, Bradley & Francesca .....................
Norris, Susan ....................................
Laurel Links & Country Club .......................
Kimogenor Pt Co. ................................
DriftWoodCove .................................
~
Commercial
Utility
Utility
Residential Development
Private Lands
S!)opping Center
Vme~ard
Utili
Mote & Restaurant
Farmland & Private Lands
Various Properties
Country Club
Co-Op
Co-Op
a. Assessmeot Roll established in 2006 for levy and collection of taxes during 2007 Fiscal Year.
b. Represents approximately 5.57% of the total taxable assessed valuation of the Town for 2007.
IS
$151.02
3..99
39.63
Assessed
Valuation
$ 1,707,704
1,558,702
585,000
362,000
330,500
285,500
234,000
233,985
148,950
113,800
111,800
96,300
94,600
90.000
$5.952.841 b
LITIGATION
The Town of Southold is subject to a number of lawsuits in the ordinll!}' conduct of its affairs. For the most
part, l!'Iy P!'tential adverse decisions in such suits, either individually or in the aggregate, are not likely to have a
materIal adverse effect on the Town.
There are certain matters worthy of special mention:
Stanton. at al. v. Town of Southold - This is an action in inverse condemnation and nuisance l1y fo!fY-two
property owners, allegmg property damage in the form of erosion caused by a Town-owned jetty. The Town is
engage3 in studIes to dclermme the issues surrounding the alleged erosion, its causes, and possible solutions.
Although this case was first filed in 1997, discovery has not been completed. The issues in this case are complex
and win require extensive expert testimony. The nature and extent of damages, if any, are unknown at this point.
Insurance coverage may be available for potentialliabili!y for alleged compensatory damages. The Town has denied
any wrongdoing and intends vigorously to defend any fUrther prosecution of this action.
uad Ente rises et al. v. Town of South old - This action arises from the Town Board of the Town of
Southol sa ege re sa to approve a c ange 0 zone app'lication filed bY]1laintiffs, which soug!Jt substantially to
increase the zomng density of a parcel ofland owned by a i1eveloper plaintiff. Plaintiffs assert claims under the Fair
Housing Act, Americans with Disabilities Act, State and Town Law, allegin,g housing discrimination ajlainst seniort
handicapped and disabled residents who are also named as "Jane Doe" plamtiffs. Plaintiffs seek declaratOlY relie
gJ:antingt1ieirdesired zoning, as well as compensatory and punitive damages of$5 million eachl respectively, for each
of the six federal causes of action. Insurance coverage may be available for potentia liability for alleged
c~mpensatory damages. Fact a,nd expert discovery is proceeding. The Town has demed all wrongdoing and intends
vIgorously to contest these claims.
Notices of Claim - Four noteworthy Notices of Claim have been filed against the Town relating to police
matters. Ihree ot the matters relate back to events in 2003 or 2004/ none of which have yet rip.ened into litigation.
In the first claim, claimant, Jason Weber, alleged that he suffereo physical injll!'Y, emotional injury, and loss of
earnings by virtue of the alleged excessive force used by Town police officers in tlieir arrest of claimant. Claimant
has SUbsequently been convIcted of driving while intoxicated, an underlying crime leading to the arrest at issue.
Claimant demanded $20 million, but has not served the Town with any lawsuit. In the second claim, the same
claimant demanded $2 million as a result of a traffic stop whereby claimant was ticketed for driving with a susp.ended
license. In that instance, claimant alleged emotional injuries and loss of employment due to allegeil false
imprisonment, and violation of his civil riiilits. Claimant has not served the Town with any lawsuit relating to this
matter. In the third claim, claimant Mark B'raziller demanded $5 million for alleged physic8.l and emotional mjuries
and civil rights violations arising out of a traffic stop. Claimant has not served the Town with any lawsuit relating
to this matter. Insurance coverage may be available m these matters for potential liability for alleged compensatory
damages. The. Town denies any wrongdoing in these matters, and intends vigorously. to contest these claIms in the
event iliat lawsuits are institutcilarising out of these allegations. The statute of limitations for state law claims has
run on each of these matters; the FedeniI statute of limitations has run on the first and third claims; and as of yet the
Town has not been served with notice of any filed lawsuit.
In the fourth Notice of Claim, Kenneth MacAlpin demands $5 million in damages for pJtysical , emotional
and civil rights iniuries related to an alh:ged incident, Iielieved to be an arrest by Town police officers "on or about
February 21, 2007 and prior arrests." The Town is not aware of any details of this purported claim, and intends
vigorously to contest it both prior to and after the institution of a lawsuit, if any is ever filed and served.
BONDHOLDER RISKS AND MARKET FACTORS AFFECTING FINANCINGS
OF THE STATE AND MUNICIPALITIES OF THE STATE
There are certain potential risks associated with an investment in the Bonds and investors should be
thoroughly familiar with thiS Official Statement, including its appendices, in order to make an informed investment
decision. Investors should consider, in particular, the following factors:
The Town's credit rating could be affected by circumstances beyond the Town's control. Economic
conditions such as the rate of unemployment and inflation, termination of commercial operations by corporate
taxpayers and emp'loyers, as well as natural catastrophes, could adversely affect the assessed valuation of Town
property and its a15ility to maintain fund balances ana other statistical indices commensurate with its current credit
rating. Accordingly, a decline in the Town's credit rating could adversely affect the market value of the Bonds.
In addition, if and when a holder of any of the Bonds should elect to sell a Bond prior to its maturity, there
can be no assurance that a market shall have been established, maintained and be in existence for the purchase and
sale of any Bonds. The price or principal value of the Bonds is dependent on the prevailing level of mterest rates.
If interest rates should increase, tl5e price of a bond or note may decline causing the bond or noteholder to potentially
incur a capital loss if such bond or note is sold prior to its maturity.
The financial condition of the Town as well as the market for the Bonds could be affected by a variety of
factors, some of which are beyond the Town's control. There can be no assurance that adverse events in the State,
including, for example, the seeking bya municipality of remedies pursuant to the Federal Bankruptcy Act or
otherwise, will not occur which migfit affect the market price of and the market for the Bonds. If a signifIcant default
or other financial crisis should occur in the affairs of the State or any of its agencies or political subdivisions thereby
further impairing the acceptability of obligations issued by borrowers withm the State, both the ability of the Town
16
,
"'''Nf
to arrange for additional borrowings and the market for and market value of outstanding debt obligations, including
the Bonds, could be adversely affected.
Future amendments to applicable statutes affecting the treatment of interest paid on municipal bonds,
including the Bonds, for income taxation purposes could have an adverse effect on the market value of the Bonds (see
"Tax Matters" herein).
TAX MATTERS
Opinion of Bond Counsel
In the opinion of Hawkins Delafield & Wood LLP, Bond Counsel to the Town, under existin,g statutes and
court decisions and assuming continuinR compliance with certain tax covenants described herein, (i) mterest on the
Bonds is excluded from gross income lor Federal income tax purposes pursuant to Section 103 of the Internal
Revenue Code of 1986, as amended (the "Code"), and (ii) interest on the Bonds is not treated as a preference item
in calculating the alternative minimum tax imposed on mdividuals and corporations under the Code; such interest,
however, is mcluded in the adjusted current earnings of certain corporations for purposes of calculating the
alternative minimum tax imposed on such corporations. In rendering its opinion, Bond Counsel has relied on certain
representations, certifications of fact, and statements of reasonable expectations made by the Town in connection
With the Bonds, and Bond Counsel has assumed compliance by the Town with certain onjloing covenants to comp'ly
with applicable requirements ofthe Code to assure tfie exclUSIOn of interest on the Bonds from gross income uniler
Section 103 of the Code.
In addition./)n the opinion of Bond Counsel to the Town, under existing statutes, interest on the Bonds is
exempt from New r ark State and New York City personal income taxes.
Bond Counsel expresses no opinion regarding any other Federal or state tax consequences with respect to
the Bonds. Bond Counsel renders its opinion under existing statutes and court decisions as of the issue date, and
assumes no obligation to update its opinion after the issue date to reflect any future action, fact or circumstance, or
change in law or interpretation, or otherwise. Bond Counsel expresses no opinion on the effect of any actIOn
hereafter taken or not taken in reliance upon an opinion of other counsel on the exclusion from gross income for
Federal income tax purposes of interest on the Bonds, or under state and local tax law.
Certain Ongoing Federal Tax Requirements aud Covenants
The Code establishes certain onRoing requirements that must be met subsequent to the issuance and delivery
of the Bonds in order that interest on the Banas be and remain excluded from gross mcome under Section 103 of the
Code. These requirements include, but are not limited to, requirements relating to use and expenditure of gross
proceeds of the Bonds, yield and other restrictions on investments of gross proceeds, and the arbitrage rebate
requirement that certain excess earnings on gross~roceeds be rebated to the Federal government. Noncompliance
with such requirements may cause interest on the Bonds to become included in gross income for Federal income tax
purposes retroactive to their issue date, irrespective of the date on which such noncompliance occurs or is discovered.
The Town has covenanted to comply with certain applicable requirements of the Code to assure the exclusion of
interest on the Bonds from gross income under SectIon 103 of the Code.
Certain Collateral Federal Tax Consequences
The following is a brief discussion of certain collateral Federal income tax matters with respectto the Bonds.
It does not purport to address all aspects of Federal taxation that may be relevant to a particular owner of a Bond.
Prospective investors, particularly those who may be subject to specIal rules, are advised to consult their own tax
advisors regarding the Federal tax consequences of owning and disposing of the Bonds.
Prosp.ective owners of the Bonds should be aware that the ownership of such obligations may result in
collateral Feileral income tax consequences to various categories of persons, such as cO!porations (including S
cOl]Jorations and foreign corporations), financial institutions, propertY and casualty and life insurance companies
individual recip.ients of Social Security and railroad retirement benefits, individuals otherwise eligible for the earned
income tax creilit, and taxpayers deemed to have incurred or continued mdebtedness to purchase or carry obligations
the interest on which is excluded from gross income for Federal income tax jJurposes. Interest on the Bonds may be
taken into account in determining the tax liability of foreign corporations subject to the branch profits tax imposed
by Section 884 of the Code.
Original Issue Discount
"Original issue discount" ("OlD") is the excess of the sum of all amounts payable at the stated maturity of
a Bond (excluding certain "gualified stated interest" that is unconditionally payable at least annually at prescribed
rates) over the issue price onhat maturity. In general, the "issue price" of a maturity means the first price at which
a substantial amount of the Bonds of that maturity was sold (excludinjl sales to bond houses, brokers, or similar
persons acting in the capacity as underwriters, placement agents, or wholesalers). In general, the issue price for each
maturity of Bonds is expected to be the initIal public ottering price set forto on !he cover page of the Official
Statement. Bond Counsel further is of the opinion that, for any Bonds having OlD (a "Discount13ond"), OlD that
17
has accrued and is properly allocable to the owners of the Discount Bonds under Section 1288 of the Code is
excludable from gross mcome for Federal income tax purposes to the same extent as other interest on the Bonds.
In general, under Section 1288 of the Code, OID on a Discount Bond accrues under a constant yield method,
based on periodic compounding of interest over prescribed accrual periods using a comJlounding rate determined by
reference to the yield on that Discount Bond. AD. owner's adjusted basis in a Discount Bond is increased by accrueo
OID for purposes of determining gain or loss on sale, exchange, or other disposition of such Bond. Accrued OlD may
be taken into account as an increase in the amount of tax-exempt income received or deemed to have been receiveo
for purposes of ~etermining various other tax consequences or owning a Discount Bond even though there will not
be a correspondIng cash payment.
Owners of Discount Bonds should consult their own tax advisors with respect to the treatment of original
issue discount for Federal income tax purposes; including various special rules relating thereto, and the state and local
tax consequences of acquiring, holding, and oisposing of Discount Bonds.
Bond Premium
In general, if an owner acquires a Bond for a purchase price (excluding accrued interest) or otherwise at a
tax basis tliat reflects a .premium over the sum of all amounts payable on the Bond after the acquisition date
(excluding certain "qualified stated interest" that is unconditionally payable at least annually at prescribed rates). that
premium constitutes "bond premium" on that Bond (a "Premium Bond"). In general, under Section 171 of the Codel
an owner of a Premium Bond must amortize the bona premium over the remaIning term ofthe Premium Bond, baseo
on the owner's yield over the remaining term of the Premium Bond deterrninedbased on constant yield principles
(in certain cases involving a Premium Bond callable prior to its stated maturity date, the amortization period and Yield
may be required to be determined on the basis of an earlier call date that results in the lowest yield on such bond).
An owner of a Premium Bond must amortize the bond premium by offsetting the qualified stated interest allocab[e
to each interest accrual period under the owner's regular method of accounting against the bond premium allocable
to that period. In the case of a tax-exempt Premium Bond, if the bond premium allocable to an accrual period exceeds
the qualified stated interest allocable to that accrual period, the excess is a nondeductible loss. Under certain
circumstancesj the owner of a Premium Bond may realize a taxable gain upon disposition of the Premium Bond even
though it is so d or redeemed for an amount less than or equal to tile owner's onginal acquisition cost. Owners of
any Premium Bonds should consult their own tax advisors regarding the treatment of bond premium for Federal
income tax purposes, including various special rules relating thereto, and state and local tax consequences, in
connection with the acquisition, ownership, amortization of bond premium on, sale, exchange, or other disposition
of Premium Bonds.
Backup Withholding
Under the Code, interest on tax-exempt obligations paid after March 31, 2007, includinginterest on the Bonds, is
subject to "backup withholding" if the recipient ofthe interest does not complete a Form W-9 Request for Taxpayer
Identification Number and Certification, or otherwise provide to the payor (i.e., the financial institution paying llie
interest on behalf of the Town a taxpayer identification number). "Backup Withholding" means that the payor is
required to deduct and withhold a tax from the interest payment, calculated in the marmer set forth in the Cooe.
In general, it is expected that owners purchasing the Bonds through a brokerage account will have executed
a Form W-9 in connection with the establishment of such account so that no backup withholding will occur. The
backup withholding requirement does not affect the excludability ofthe interest on the Bonds from gross income for
federal income tax purposes. Any amounts withheld pursuant to backup withholding would be allowed as a refund
or a credit against tile owner's federal income tax once the required information is furnished to the Internal Revenue
Service.
Legislation
Legislation affecting municipal bonds is regularly under consideration by the United States Congress. There
can be no assurance that legislation enacted or proposed after the date of issuance of the Bonds will not have an
adverse effect on the tax-exempt status or market pnce of the Bonds.
DOCUMENTS ACCOMPANYING DELIVERY OF THE BONDS
Absence of Litigation
Upon delivery of the Bonds the To~ shall furnish a certjf!cat~ of the Town Attorney, dated the date of
delivery of the Bonds, to the effect that there IS no controversy or htIgatIon of any nature pendIng or threatened to
restrain or enjoin the ISSuanC~ sale, execu~ion or deliv~!)' ofllie Bonos, or in any way contesting or affectjng ~e
validity of the Bonds or any or the proceedIngs taken With respect to the Issuance and sale thereof or the apphcatlOn
of moneys to the payment of the .Bonds, and fUrther sf!lting thatther~ is no controversy or litigation of any I)ature now
pending or threatened by or agaInst the Town whereIn an adverse Judgment or ruhng couldbave a matenal adverse
Impact on the financial conditIOn ofthe Town or adversely affect the power of the Town to It;vy colle.ct a~d enfor.ce
the collection of taxes or other revenues for the payment of the Bonds, which has not been disclosed In thiS OffiCial
Statement.
18
Legal Matters
Legal matters incident to the authorization issuance and sale of the Bonds will be subject to the final
aI>proying opinion of Hawkins Delafield & Wood LLp, Bond Counsel. Such opinion will be available at the time
or dehvery of the Bonds and will be to the effect that the Bonds are valid and legally binding general obligations of
the Town for which the Town has validly pledged its faith and credit and, unless paid from other sources, all the
taxable real property within the Town is subject to the levy of ad valorem real estate taxes to pay the Bonds and
interest thereon witliout limitation of rate or amount. Said opinion shall also contain further statements to the effect
that (a) the enforceability of rights or remedies with respectto such Bonds may be limited by bankruI>.tcy, insolvency,
or other laws affecting creditors' rights or remedies heretofore or hereafter enacted, and (b) said law firm has not been
requested to examine or review and has not examined or reviewed the accuracy or sufficiency of the Official
Statement, or any additional proceedings! reports, correspondence, financial statements or other documents,
containing financial or other information re ative to the Town which have been or may be furnished or disclosed to
purchase.rs of the Bonds, and expresses no opinion with respect to such financial or other information, or the accuracy
or suffiCIency thereof.
Closing Certificates
Upon the delivery_of the Bonds, the Purchaser will be furnished with the following items: (i) a Certificate
of the Supervisor to the effect that as of the date of this Official Statement and at all times subsequent thereto, up to
and including the time of delivery of the Bonds, this Official Statement did not and does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements herein, in the light of
the circumstances under which they were made, not misleading, and further stating that there has been no adverse
material change in the financial condition of the Town since the date of this Officilil Statement up to and including
the time of delivery of the Bonds, and having attached thereto a copy of this Official Statement; (ii) a Certificate
signed !Jy the Supervisor evidencing payment for the Bonds; (iii) a Signature Certificate evidencing the due execution
of the Bonds, including statements diat (a) no litigation of any nature is pending or threatened, restraining or
enjoining the Issuance and delivery ofthe gonds or the levy and collection of taxes to pay the principal of and interest
thereon, nor in any manner C[uestlOning the proceedings and authority under which tlie Bonds were authorized or
affecting the validIty of the Bonds thereunder, (b) neitlier the corporate existence or boundaries of the Town nor the
tide of any of the officers thereof to their respective offices is being contested, and (c) no authority or proceedings
for the issuance of the Bonds have been reRealed; revoked or rescinded; and (iv) an Arbitrage and1Jse of Proceeds
Certificate executed by the Supervisor, as aescrioed under "Tax Matters".
DISCLOSURE UNDERTAKING
This Official Statement is in a form" deemed final" by the Town for the pUfJloses of Securities and Exchange
Commission Rule l5c2-l2. At the time of the delivery of the Bonds, the Town will provide an executed copy of ItS
"Undertaking to Provide Continuing Disclosure" (the "Undertaking"). Said Undertaking will constitute a written
agreement or contract of the Town for the benefit of holders of and owners of beneficiarinterests in the Bonds, to
provide, or cause to be provided:
(I) during any succeeding fiscal year of the Town in which the Bonds are outstanding to (a) each nationally
recognizeo municipal securities information repository ("NRMSIR") and (b) the New York State Information
DeRository, if created, ("SID"), (i) certain annual financial information, in a form generally consistent with
the information contamed or cross-referenced in this Official Statement under the-headings: "The Town"j
"Economic and Demograrhic Information","Indebtedness of the Town", "Finances oftfie Town", "Rea
PropeI:ly Tax informatIOn, and "Litigation"; and in Appendix A, on or pnor to the 180th day following the
end of each fiscal year, including (ii) the audited financial statement, if any, for the preceeding fiscal year
of the Town, unless such audited financial statement, if any, shall not then be available in whIch case the
unaudited financial statement shall be provided and an audited financial statement shall be delivered to each
NRMSIR and to the SID within 30 days after it becomes available and in no event later than 360 days after
the end of each fiscal year;
(2) to (a) each NRMSIR, or to the Municipal Securities Rulemaking Board ("MSRB"), and to (b) the SID, timely
notice of the occurrence of any of the following events with respect to the Bonds, if material:
(i) principal and interest paY!l1ent delinquencies; (ii) non-payment related defaults; (iii) unscheduled draws
on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements
reflecting financial difficulties; (V) substitution of credit or hquidity providers, or their failure to perform;
(vi) adverse tax opinions or events affecting the tax-exempt status oftfie Bonds; (vii) modifications to rigjlts
of13ondholders; (viii) bond calls; (ix) defeasances; (x) release, substitution, or sale of property securing
repayment of the 13onds; and (xi) rating changes.
The Town may provide notice of the occurrence of certain other events, in addition to those listed above, if
it determines that any such other event is material with respect to the Bonds; but the Town does not undertake to
commit to provide any such notice of the occurrence of any material event except those events listed above; and
(3) to (a) each NRMS~ or to the MSRB, and to (b) the SID, in a timely manner, notice of a failure to provide
the annual financial mformation by the date specified.
19
The Town's Undertaking shall remain in full force and effect until such time as the principal of. redemption
premiums, if any, and interest on the Bonds shall have been paid in full. The sole and exclusive remedy for breach
or default under the Undertakin~ is an action to compel specific performance of the undertakings of the Town, and
no person or entity, including a liolder of the Bonds, snail be entitled to recover monetary damages thereunder under
any circumstances. Any failure by the Town to comply with the Undertaking will not constitute a default with respect
to the Bonds.
The Town reserves the right to amend or modif'y the Undertaking under certain circumstances set forth
therein provided that any such amendment or modification will be done in a manner consistent with Rule l5cZ-1Z
as then m effect.
The Town is in compliance with all previous undertakings made pursuant to Rule l5cZ-1Z.
BOND RATING
Moody's Investors Service, Inc., will assign their municipal bond rating of "Aaa" respectively, to this issue
of Bonds with the understandillg that up'on delivery of the Bonds, a policy insuring the payment when due of the
principal of and interest on the !Jonds will be issued by Ambac Assurance CorporatIOn. Such rating reflect only the
views of such rating agency and any desired explanatIOn of the si~ificance of such rating should 6e obtained trom
such rating agency. Gtmeraily, a ratmg agency !lases its ratings on the information and materials furnished it and on
investigatIon, studies and assumJJtions by the rating agency. There is no assurance that a particular ratin~ will apply
for any given period of time or that it will not be lowered or withdrawn entirely if, in the judgment oithe agency
originally establishing the rating, circumstances so warrant. The underwriter lias undertaken no respgnsibiIity to
bring to the attention of the holders of the Bonds any proposed revision or withdrawal. Any downward revision or
withorawal of such rating, or either of them, could have an adverse effect on the market pnce of the Bonds. Such
rating should not be taken as a recommendation to buy or hold the Bonds.
FINANCIAL ADVISOR
Munistat Services, Inc. has assisted the Town as financial advisor in certain matters with respect to the sale
and issuance of the Bonds.
ADDITIONAL INFORMATION
Additional information may be obtained upon request from the office of the Town Comptroller, Town of
Southold, Town Hall, P.O.B. 1179, Southold, New York 11971, teleJJhone number 631/765-4333, or from the office
of Munistat Services, Inc., 12 Roosevelt Avenue, Port Jefferson ~tation, New York 11776, telephone number
631/331-8888 and website: http://www.munistat.com.
Any statements in this Official Statement involving matters of opinion or estimates> whether or not expressly
so stated, are intended as such and not as representations of fact. No representation IS made that any of such
statements will be realized. This Official Statement is not to be construed as a contract or agreement between the
Town and the original purchasers or holders of any of the Bonds.
This Official Statement is submitted only in connection with the sale of the Bonds by the Town and may not
be reproduced or used in whole or in part for any other purpose.
TOWN OF SOUTHOLD, NEW YORK
By: s/s
SCOTT A. RUSSELL
Town Supervisor and Chief Fiscal Officer
March Z7, 2007
20
Balance Sheet
General Fund
Fiscal Year Ending December 31 :
2003 2004 2005
ASSETS
Cash and Investments $ 8,436,782 $ 10,081,581 $ 9,292,437
Cash - Restricted 0 0 0
Taxes Receivable 0 0 0
Accounts Receivable 1,168 85,426 24,533
Due From Other Funds 15,107 320,243 176,390
Due From Trust Funds 342,253 73 68
State and Federal Aid Receivables 13,195 56,357 81,849
Due From Other Governments 112,471 1,537,312 1,867,136
Supply Inventory 1,296 1,487 1,204
Prepaid Expenses 69,865 526,857 498,344
Deposit 10,000 2,219 0
Total Assets $ 9,002,137 $ 12,611,555 $ 11,941,961
LIABILITIES AND FUND EQUITY
Accounts Payable $ 792,860 $ 1,052,240 $ 627,049
Due to Other Funds 426,211 1,625,700 1,888,241
Due to Other Governments 0 388,944 393,570
Due to Trust Funds 595 4,248 7,044
Due to Compnent Units 0 0 0
Deferred Revenues 2,463,059 2,900,729 3,018,595
Total Liabilities 3,682,725 5,971,861 5,934,499
Fund Balances ~ Reserved:
lnsurance claims 1,033,085 1,234,066 I, I 05,879
Encumbrances 71,342 4,009
Supply Inventory 1,296 1,487 1,204
Prepaid Expenses 69,865 526,857 498,344
Fund Balances - Unreserved:
Designated - Ensuing Year's Budget 2,008,000 1,978,987 2,657,200
Undesignated 2,207,166 2,826,955 1,740,826
Total Fund Equity 5,319,412 6,639,694 6,007,462
Total Liabilities and Fund Equity $ 9,002,137 $ 12,611,555 $ 11,941,961
Sources: Audited Financial Reports of the Town
Table itself NOT audited.
A-I
"",,,.,,~,,,,,,,,,,~^,,,,,,,,,.._,,,.,,..""--~",,,."....,...~,..
Statement of Revenues, Expenditures and Changes in Fund Balance
General Fund Town Wide
Fiscal Year Ending December 31 :
l.QQl ~ 2ilill WQ1 2.QQ.1
Revenues:
Real Property Taxes $ 10,965,967 $ 12,237,940 $ 13,247,572 $ 13,962,268 $ 14,608,674
Other Real Property Tax Items 55,069 85,244 51,31 I 65,720 68,807
Non~Property Tax Items 508, I 30 40 I ,035 401,035 415,071 415,071
Departmental Income 3 I 2,033 431,743 3 I 5,289 344,217 345,956
Intergovernmental Charges 26 I ,646 214,738 202,917 296,050 252,558
Use of Money & Property 448,483 246,707 201,702 254,142 489,796
Licenses & Permits 198,949 210,863 188,480 214,461 249, I 78
Fines & Forfeitures 97,609 102,032 107,084 107,315 140,192
Sale of Property & Compo for Loss 76,4 71 135,345 56,893 405,077 93,290
Miscellaneous Local Sources 109,026 115,619 133,346 128,027 432,269
State Aid 1,465,3 12 1,698,069 2,225,40 I 2,974,027 2,637,870
Federal Aid 239,649 132,527 146,574 160,337 174,348
~-- ~..._-
14,738,344 16,011,862 17,277,604 19,326,712 19,908,009
Expenditures:
General Government Support 3,170,906 3,56 I, I 42 3,751,469 4,395,571 4,641,568
Poblic Safety 5,755,775 5,806,827 6,033,207 6,254,365 7,177,145
Public Health 33,288 33,288 32,988 33,288 33,288
Transportation 335,583 341,671 398,358 401,866 446,877
Economic Assistance & Opportunity 802,249 730,553 833,50 I 931,566 901,139
Culture & Recreation 356,570 350,121 317,769 304,071 354,768
Home & Community Services 501,790 315,764 228,578 341,764 315,273
Employee Benefits 2,742,583 3,616,745 2,617,783 4,868,116 5,857,963
Debt Service Principal & Interest 1,402,074 1,550,447 1,007,318 2, I 04,202 1,560,055
Total Expenditures 15,100,818 16,306,558 15,220,97 I 19,634,809 2 I ,288,076
Excess (Deficiency) of Revenues Over
Expenditures (362,474) (294,696) 2,056,633 ~208,097) (1,380,067)
Operating Transfers In 1,650,724 1,780,257 1,392,850 2,932,574 2,642,859
Operating Transfers Out (1,072,732) (1,021,931) ~10,781) (1,304,195) (1,895,023)
Total Other Financing Sources (Uses) 577,992 758,326 (517,931) 1,628,379 747,836
Excess (Deficiency) of Revenues and Other
Sources Over Expenditures and Other Uses 215,518 463,630 1,538,702 1,320,282 (632,231 )
Fund Balance Beginning of Year 3,101,561 3,317,080 3,780,710 5,319,412 6,639,694
----- --_._.."-~
Fund Balance End of Year $ 3,317,079 $ ~-.1}80,71O $ 5,319,412 $ 6,639,694 $ 6,007,463
Sources: Audited Financial Reports of the Town
Table itself NOT aodited.
A-2
Statement of Revenues, Expenditures and Fund Balance
Highway Fund
Fiscal Year Ended December 31 ;
2001 2002 2003 2004 2005
Revenues:
Real Property Taxes $ 3,165,059 $ 3,428,570 $ 3,513,902 $ 3,520,332 $ 3,805,032
Other Real Property Tax Items 6,028 11 ,885 6,428 3,679 9,046
Non-Property Tax items 396 3,098 0 0
Intergovernmental Charges 116,821 0 15,573 0 0
Use of Money & Property 79,827 34,626 18,520 23,884 77,817
Licenses & Permits 5,887 10,351 8,231 4,937 11,126
Sale of Property & Compo for Loss 9,593 0 4,033 2,960 2,796
Miscellaneous Local Sources 1,416 25,937 0 16 155,054
Interfund Revenues 8,517 4,852 0 0 0
State Aid 223,305 0 458,686 228,337 188,147
Federal Aid 0 0 67,699 0 0
3,616,849 3,519,319 4,093,072 3,784,145 4,249,018
Expenditures:
Transportation 3,076,012 2,550,776 2,733,518 2,638,121 2,913,768
Employee Benefits 281,070 340,172 976,406 415,102 500,343
Debt Service 97,594 88,544 15,128 22,219 178,371
Total Expenditures 3,454,676 2,979,492 3,725,052 3,075,442 3,592,482
Excess (Deficiency) of Revenues Over
Expenditures 162,173 539,827 368,020 708,703 656,536
Residual Equity Transfer
Operating Transfers In 0 0 0 0 0
Operating Transfers Out (380,965) (433,271) (60,000) (690,390) (520,~85)
Total Other Financing Sources (Uses) (380,965) (433,271) (60,000) (690,390) (520,085)
Excess (Deficiency) of Revenues and Other
Sources Over Expenditures and Other Uses (218,792) 106,556 308,020 18,313 136,451
Fund Balance Beginning of Year 706,300 487,508 594,064 902,084 920,397
~--~ -_._~-~---
Fund Balance End of Year $ 487,508 $ 594,064 $ 902,084 $ 920,397 $ 1,056,848
Sources; Audited Financial Reports of the Town
Table itself NOT audited.
A-3
Statement of Revenues, Expenditures and Changes in Fund Balance
Non-Major Governmental Funds (1)
Fiscal Year Ending December 31:
2QQl 2002 IQ!U ZQlM 2l1.Q2
Revenues:
Real Property Taxes $ 1,584,261 $ 1,465,060 $ 2,197,525 $ 2,506,945 $ 2,381,335
Other Real Property Tax Items 1,037 1,495 874 3,105 2,516
Non-Property Tax Items 97,680 110,225 117,449 336,139 213,786
Departmental Income 2,125,493 2,931,896 2,339,227 2,517,584 2,504,880
Intergovernmental Charges 18,444 1,400 1,614 1,013 1,013
Use of Money & Property 88,750 35,650 18,147 21,365 64,092
Licenses & Permits 139,615 139,295 139,620 199,849 165,965
Fines and Forfeitures 0 0 49,000 0 0
Sale of Property & Camp. for Loss 76,928 29,772 44,450 76,069 109,137
Miscellaneous Local Sources 13,462 11,423 230 5,025 153,591
[nterfund Revenues 2,274 0 0 0 0
State Aid 102,353 72,935 161,393 72,651 75,374
Federal Aid 210,644 119,380 111,299 166,368 224,136
4,460,941 4,918,531 5,180,828 5,906,113 5,895,825
----
Expenditures:
General Government Support 42,052 42,783 134,969 92,514 99,895
Public Safety 786,251 875,307 749,904 739,198 807,474
Public Health 5,924 6,161 6,408 6,664 6,864
Home & Community Services 0 0 3,230,201 3,225,586 3,102,639
Culture and Reccreation 2,872,654 2,973,763 0 0 0
Employee Benefits 188,543 226,380 874,049 371,038 444,858
Debt Service 314,869 624,315 117,562 88,803 671,720
Total Expenditures 4,210,293 4,748,709 5,113,093 4,523,803 5,133,450
Excess (Deficiency) of Revenues Over
Expenditures 250,648 169,822 67,735 1,382,310 762,375
Operating Transfers In 0 0 0 0 0
Operating Transfers Out _(491,624) (375,055) (483,500) (1,081,441) (504,720)
Total Other Financing Sources (Uses) (491,624) (375,055) __ (483_,.500) (1,081,441) _ (504,720)
Excess (Deficiency) of Revenues and Other
Sources Over Expenditures and Other Uses (240,976) (205,233) __~15,765) 300,869 257,655
Fund Balance Beginning of Year 1,707,548 1,466,572 1,261,339 845,574 1,146,444
~--"--~
Fund Balance End of Year $ 1,466,572 $ 1,261,339 $ 845,574 $ 1,146,443 $ 1,404,099
~.._--~
(I) Includes the following funds: General Fund Part Town, Special Grant Fund, East-West Fire Protection Fund, Southold Wastewater
District, Fishers Island Sewer District and Solid Waste Management District.
Sources: Audited Financial Reports of the Town
Table itself NOT audited.
A-4
BUDGET SUMMARY
Fiscal Year Ending December 31, 2006
Appropriations Less: Less:
and Provisions Estimated Unexpended Amount to be
Fund for Other Uses Revenues Balance Raised by Tax
General $ 22,209,199 $ 4,679,263 $ 2,657,200 $ 14,872,736
General-Outside Village 1,795,416 958,174 344,246 492,996
Highway-Townwide 0 100 16,000 (16,100)
Highway~Outside Village 4,769,679 318,332 339,900 4,111,447
Community Development 159,000 159,000 0 0
Risk Retention Fund 1,055,000 1,055,000 0 0
Community Preservation Fund 4,606,000 4,606,000 0 0
Employees Health Plan 2,411,400 2,036,400 375,000 0
Total-Town $ 37,005,694 $ 13,812,269 $ 3,732,346 $ 19,461,079
East-West Fire Protection District 464,393 2,000 4,350 458,043
Fishers Island Ferry District 2,389,000 1,989,000 0 400,000
Solid Waste Management District 4,031,733 2,096,200 168,000 1,767,533
Southold Wastewater District 1 J 1,790 14,000 75,000 22,790
Fishers Island Sewer District 20,000 17,700 2,300 0
F.I. Refuse & Garbage District 563,500 0 0 563,500
Orient Mosquito District 76,285 0 0 76,285
Subtotal-Special Districts $ 7,656,70 I $ 4,118,900 $ 249,650 $ 3,288,151
Orient-East Marion Park District 27,655 37 0 27,618
Southold Park District 315,000 0 0 315,000
Cute hogue-New Suffolk Park Dist. 141,000 0 0 141,000
Mattituck Park District 504,910 18,800 60,000 426,110
Subtotal-Park Districts $ 988,565 $ 18,837 $ 60,000 $ 909,728
Fishers Island Fire District 343,300 3,300 0 340,000
Orient Fire District 356,540 2,000 0 354,540
East Marion Fire District 427,342 8,640 0 418,702
Southold Fire District 1,358,392 21,000 0 1,337,392
Cutchogue Fire District 1,413,000 1,400 0 1,411,600
Mattituck Fire District 1,818,135 0 0 1,818,135
Subtotal-Fire Districts $ 5,716,709 $ 36,340 $ 0 $ 5,680,369
Total-All Districts 14,361,975 4,174,071_ 309,650 9,878,248_
Grand Total $ 51 ,367,669 $ 17,986,346 $ 4,041.996 $ 29,339,327
Source: Annual Budget of the Town.
A-5
BUDGET SUMMARY
Fiscal Year Ending December 31, 2007
Appropriations Less: Less;
and Provisions Estimated Unexpended Amount to be
Fund for Other Uses Revenues ~ Raised bv Tax
General $ 22,951,102 $ 4,810,191 $ 1,935,000 $ 16,205,911
General-Outside Village 1,869,139 1,002,600 459,000 407,539
Highway-Townwide 0 600 16,900 (17,500)
Highway-Outside Village 4,938,330 406,635 486,500 4,045,195
Community Development 136,000 136,000 0 0
Risk Retention Fund 1,015,000 1,015,000 0 0
Community Preservation Fund 10,697,328 5,350,000 5,347,328 0
Employees Health Plan 2,662,000 2,412,000 _ 250,000_ 0
Total-Town $ 44,268,899 $ 15,133,026 $ 8,494,728 $ 20,641,145
East-West Fire Protection District 509,828 4,600 6,228 499,000
Fishers Island Ferry District 3,038,000 2,448,000 0 590,000
Solid Waste Management District 4,058,562 2,151,500 0 1,907,062
Southold Wastewater District 128,316 10,020 100,000 18,296
Fishers Island Sewer District 20,000 17,700 2,300 0
F.1. Refuse & Garbage District 512,300 0 0 512,300
Orient Mosquito District 82,235 0 0 82,235
Subtotal-Special Districts $ 8,349,241 $ 4,631,820 $ ] 08,528 $ 3,608,893
Orient-East Marion Park District 30,695 0 0 30,695
Southold Park District 315,000 0 0 315,000
Cutchogue-New Suffolk Park Dist. 145,000 0 0 145,000
Mattituck Park District 540,027 22,500 50,000 467,527
Subtotal. Park Districts $ 1,030,722 $ 22,500 $ 50,000 $ 958,222
Fishers Island Fire District 357,300 3,300 0 354,000
Orient Fire District 401,040 2,000 0 399,040
East Marion Fire District 490,600 12,200 0 478,400
Southold Fire District 1,512,875 33,540 0 1,479,335
Cutchogue Fire District 1,412,500 1,400 0 1,411,100
Mattituck Fire District 1,857,967 0 0 1,857,967
Subtotal-Fire Districts $ 6,032,282 $ 52,440 $ 0 $ 5,979,842
Total.AII Districts _12c412,24~ 4,706,760 ]58,5~ ] 0,546,957
Grand Total $ 59,681,144 $ 19,839,786 $ ~,653,256 $ 31.188,102
Source: Annual Budget of the Town.
A-6
TOWN OF SOUTHOLD
APPENDIX B
AUDITED FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005
\ FINANCIAL SECTION \
Independent Audttors' Report.... ................... ..... ......... ............ .... ........... .................. ............................. .... . 1-2
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis............ .
........--............................................ ..............
3-11
I BASIC FINANCIAL STATEMENTS I
Government-Wide Financial Statements
Statement of Net Assets......................................................................................................................... 12
Statement of Activtties ............................................................................................................. ............... 13
Fund Financial Statements
Governmental Fund Rnancial Statements
Balance Sheet and Reconciliation of the Governmental Funds Balance Sheet to
The Statement of Net Assets............ .................................... ............................ ............. 14-15
Statement of Revenues, Expenditures, and Changes in Fund Balances and
Reconciliation of the Governmental Funds Statement of Revenues, Expendttures,
And Changes in Fund Balances to the Statement of Activtties..................... .............. ............ 16-17
Fiduciary Fund Financial statements
Statement of Rduciary Net Assets................................................... ...... .................................. 18
Notes to Financial Statements .................................................................................................................. 19-33
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANGEMENT DISCUSSION AND ANALYSIS
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
General Fund ... ........................... .................................................... ......... ............ ...... 34
Highway Fund... ......... ......... ......... ............ ............ .................. ...... ............... .......... ...... 35
I OTHER SUPPLEMENTARY INFORMATION
COMBINING FUND STATEMENTS:
Non-major Governmental Funds
Combining Balance Sheet... ............... ..................... ............ ............ ..................... ......... 36
Combining Statement of Revenues, Expendttures, and Changes in Fund Balances................... 37
DISCRETELY PRESENTED COMPONENT UNITS
Discretely Presented Component Units:
Combining Statement of Net Assets ...................................................................................................... 38
Combining Statement of Activities.......................................................................................................... 39
OTHER REPORTS
Schedule of Expenditures of Federal Awards......................................................................................... 40
Notes to Schedule of Expenditures of Federal Awards.......................................................................... 41
Report on Compllanc-.e and on Internal Control Over
Financial Reporting Based on an Audit of Financial
Statements Performed in Accordance with Government
Auditing Standards............................................................................................................................ 42
Report on Compliance with Requirements Applicable
To Each Major Program and Internal Control OVer
Compliance in Accordance with OMB Circular A-133 ...................................................................... 43-44
Schedule of Findings and Questioned Costs.................................................................................... 45-46
FINANCIAL
SECTION
CERTIFIED PUBLIC ACCOUNTANTS. BUSINESS AOVISORS AND CONSULTANTS
25 Suffolk Court, Hauppauge, New furk 11788
631.434.9500 . Fax 631.434.9518
WWlY.Qvz.com
INDEPENDENT AUDITORS' REPORT
Honorable Supervisor and Town Board
Town of South old
. Southold, New York
We have audited the accompanying 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, as of December 31, 2005, and for the year then ended, which
collectively comprise the Town's basic financial statements as listed in the table of contents. These
financial statements are the responsibility of the Town's management. Our responsibility Is to express an
opinion on these financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit In accordance with auditing
standards generally accepted in the United States of America and the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States. The financial statements of the component units presented discretely in these financial
statements with the exception of one, the Fishers Island Ferry District, were not audited in accordance
with Government Auditing Standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financiaf statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
The financial statements supporting the financial activities of the Town of Southold's discretely presented
component units with the exception of one, the Fishers Island Ferry District, were not audited as of the
report date, nor were we able to satisfy ourselves as to those financial activities by other auditing
procedures. Those financial activities represent approximately 34% of the net assets of the discretely
presented component units. The financial statements of the Fishers Island Ferry District were audited by
other auditors whose report thereon have been furnished to us and in our opinion, insofar as it relates to
the amounts included for that one component unit, is based solely on the reports of the other auditors.
In our opinion, except for the effects of such adjustments if any as might have been determined to be
necessary had the unaudited component units financial statements been audited and based on our audit
and the reports of other auditors, the financial statements referred to above present fairly, in all material
respects, the financial position of the Town of Southold, New York, as of December 31, 2005, and the
results of its operations for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
The Management's Discussion and Analysis and the budgetary information are not a required part of the
basic financial statements but are supplementary information required by accounting principles generally
accepted In the United States of America. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation of the
supplementary information. However, we did not audit the Information and express no opinion on it.
-1-
ALsRECHT, VJooIANO, ZURECK & CoMfWIY, P.C.
I l JI'......,.IItCR~
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the Town of Southold, New York's basic financial statements. The combining and
individual fund financial statements are presented for purposes of additional analysis and are not a
required part of the basic financial statements. The combining and individual fund financial statements
has been subjected to the auditing procedures applied in the audit of the basic financial statements of the
Town of Southold, New York, and, in our opinion, is fairly presented in all material respects in relation to
the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report dated June 8, 2006 on
our consideration of the Town of Southold, New York intemal control over financial reporting and our
tests of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial
statements, taken as a whole. The accompanying schedule of expenditures of federal awards is
presented for purposes of additional analysis as required by U.S. Office Management and Budget
Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required
part of the general purpose financial statements of the Town of Soulhold, New York. Such Information
has been subjected to the auditing procedures applied in the audit of the general purpose financial
statements and, in our opinion, is fairly stated, in all material respects, in relation to the general purpose
financial statements taken as a whole.
~ '( .ft:#~. ? L-l' c....,~. r. c.
Hauppauge, New York
June 8, 2006
-2-
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2005
The following is a discussion and analysis of the Town of Southold's financial performance, providing an overview
of the Town's financial activities for the year ended December 31, 20OS. Use this section in conjunction with the
Town's basic financial statements.
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The Statement of Net Assets and the
Statement of Activities provide Information about the activities of the Town as a whole and present a longer-
term view of the Town's finances. For governmental activities, these statements tell how these services were
financed in the short term as well as what remains for future spending. Fund financial statements also report
the Town's operations In more detail than the government-wide statements by providing Information about the
Town's most significant funds. The remaining statements provide financial Information about activities for
which the Town acts solely as a trustee agent for the benefit of those outside of the government.
Reportinll the Town as a Whole
The Statement of Net Assets and the Statement of Activities
One of the most important questions asked about the Town's finances is, "Is the Town as a whole better off or
worse off as a result of the year's activities? The Statement of Net Assets and the Statement of Activities
report information about the Town as a whole and about Its activities in a way that helps answer this question.
These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the
accounting used by most private-sector companies. The Statement of Activities is significantly different than a
typical Statement of Revenues, Expenses, and Changes in Fund Balance. You will notice that expenses are
listed in the first column with revenues from that particular program reported to the right. The result Is a net
(expense )/revenue. The reason for this kind of format Is to highlight the relative financial burden of each of the
functions on the Town's taxpayers. It also identifies how much each function draws from the general revenues
or if it Is self-financing through fees and grants. All of the current year's revenues and expenses are taken into
account regardless of when cash is received or paid.
These two statements report the Town's net assets and their respective changes. You can think of the Town's
net assets-the difference between assets and Iiabilities-as one way to measure the Town's financial health,
or financlal position. Over time, increases or decreases in the Town's net assets are one Indicator of whether
its financlal health Is Improving or deteriorating. You will need to consider other non-financial 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.
In the Statement of Net Assets and the Statement of Activilles, we divide the Town Into two kinds of activities:
. 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, sales taxes, franchise fees, fines, and
state and federal grants finance these activities. The Town also charges fees to customers to help it
cover the cost of certain services It provides.
. Component units - The Town Includes 7 separate legal entities In Its report (one ferry district, one
sanitation district, one mosquito district and four park districts). Although legally separate, these
.component units" are important because the Town is financially accountable for them. Complete
financlal statements of the Individual component units can be obtained from their respective
administrative offices (Note A).
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2005
ReportinQ the Town's Most Slllnfficant Funds
Fund Financial Statements
The fund financial statements provide detailed information about the most significant funds-not the Town as a
whole. Some funds are required to be established by State law and by bond covenants. However, the Town
establishes many other funds to help it control and manage sources of funding and spending related to specific
activities.
The Town's basic services are reported in governmental funds, which focus on how money flows into and out
of those funds and the balances left at year-end that are available for spending. These funds are reported
using an accounting method called modified accrual accounting, which measures cash and all other financial
assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term
view of the Town's general government operations and the basic services it provides. Govemmental fund
information helps you determine whether there are more or fewer financial resources that can be spent in the
near future to finance the Town's programs. We describe the relationship (or differences) between
governmental activilles (reported in the Statement of Net Assets and the Statement of Activities) and
governmental funds in a reconciliation that follows these fund financial statements.
The Town as Trustee
Reoortino the Town's Fiduclarv Responsibilities
All of the Town's fiduciary activilles are reported In a separate Statement of Fiduciary Net Assets. We exclude
these activities from the Town's other financial statements because the Town cannot use these assets to
finance its operations. The Town is responsible for ensuring that the assets reported in these funds are used
for their intended purposes.
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE
Our analysis below focuses on the net assets and changes in net assets of the Town's governmental activities.
Condensed Statement of Net Assets
Govemmental Activities
as of December 31,2005 and 2004
Assets
Current and other assets
Capital assets
Total assets
Liabilities
Other liabilities
Long-term liabilities
T otalliabilities
Net assets
Invested in capital assets,
net of related debt
Unrestricted
Total net assets
2005 2004
$ 26,265,665 $ 25,448,645
90,294,079 81,374,480
116,559,744 106,823,125
16,289,370 14,665,546
14,916,051 15,732,844
31,205,421 30,398,390
81,044,981
4,309,342
$ 85,354,323 $
71,352,951
5,071,784
76,424,735
-4-
TOWN OF SOUTHOLD
MANAGEMENTS DISCUSSION AND ANALYSIS
December 31, 2005
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
Total assets in the Towns as of December 31,2005 were $116.5 million, an increase of $9.7 million. Total
liabilities as of December 31, 2005 were $31 million, an increase of approximately $1 million. This results in a
net asset balance of $85.3 million, an increase of $8.9 million. Of the Town's net asset balance $81 mlliion
were invested in capital assets, net of related debt; while $4.3 million was unrestricted.
Changes in Net Assets
Governmental Activities
for the years ended December 31, 2005 and 2004
2005 2004
Program Revenues
Charges for services $ 10,723,686 $ 9,556,554
Operating grants and contributions 859,484 790,169
Capital grants and contributions 3,502,247 915,998
Total Program Revenues 15,085.417 11 ,262,721
General Revenues
Real property taxes 20,795,041 19,989,545
Other real property tax items 80,369 72,504
Non-property tax items 628,857 751,210
Interest earnings 786.413 264,223
State aid - unrestricted 2,527,110 2,867,169
Other 709,352 228,738
Total General Revenues 25,507,142 24,173,389
Total Revenues 40,592,559 35,436,110
Program Expenses
General government support 6,621,408 7,274,110
Public safety 11,342,991 9,899,209
Public health 43,559 42,551
Transportation 6,627,876 6,297,105
Economic assistance and opportunity 1,208,467 1,225,690
Culture and recreation 356,167 447,119
Home and community services 4,961,051 2,052,178
Interest on debt 501,452 460,838
Total Expenses 31,662,971 27,698,800
I ncrease in Net Assets $ 8,929,588 $ 7,737,310
-5-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANAL VSIS
December 31,2005
FINANCIAL ANAL VSIS OF THE TOWN AS A WHOLE (continued)
Net Cost of Services
Govemmental ActM/ies
for the year ended December 31, 2005
General govemment support
Public safety
Public heatth
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Cost
of Services
$ 6,621,408
11,342,991
43,559
6,627,876
1,208,467
356,167
4,981,051
501,452
$ 31,662,971
__~._ ,..... '___d.....'~,,___
Net Cost
of Services
$ 6,265,526
10,588,154
33,574
6,426,952
833,388
168,136
(8,239,628)
501,452
$ 16,577,554
The cost of all govemmental activities this year was $31.6 million. The net cost of these services, however,
after subsidized by program revenues including charges for services and program grants, was $16.5 million.
The Town's change in net assets after general revenues of $25.5 million was an increase of $8.9 million.
Net Cost of Services
Govemmental Activities
for the year ended December 31, 2005
General govemment support
Public safety
Public health
Transporlalion
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
JL
Total Cost
of Services
$ 6,621,408
11,342,991
43,559
6,627,876
1,208.467
356,167
4,981,051
501,452
$ 31,662,971
Program
Revenues
$ 355,882
754,837
9,985
200,924
375,079
188,031
13,200,679
$ 15,085,417
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2005
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$8,000,000
$4,000,000
$2.000,000
0pen0Irv
-...
-
""
Expenses and Program Revenues
Governmantal ActIVIties
$-
. Expenses
. Program Revenues
-...
"""""""
.......
_an
debt
-
-"""""
-
PublIc SIIf8ty Public he8IIlh TrBnsportaIIon EconDnic
...........
...
-
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....-
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_and
..............
0%
Olhor
-
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-
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"-aId-
Revenue by Source
Governmental ActMtles
For the year ended December 31. 2005
Real property laxes
Stale aid - unrestrlcted
Charges for services
Other general revenues
Operating grants and contributions
Capital grants and contributions
$ 20,795,041
2,527,110
10,723.666
2,184,991
659,484
3,502,247
$ 40.592,559
TOWN OF SOUTHOLD
MANAGEMENrS DISCUSSION AND ANALYSIS
December 31, 2005
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
THE TOWN'S FUNDS
The general fund balance has decreased by approximately $600,000 due primarily to actual expenditures In
excess of revenues. Although there was a decrease in fund balance, this decrease was less than amounts
budgeted.
The following schedule presents a summary of the govemmental fund - (general, special revenue, and capital
projects) revenues and expenditures for the year ended December 31, 2005, and the amount of change and
percentage of total in relation to the prior year.
Increase %
2005 2004 (Decrease) Change
Kl:Vl:NUl:S
Real property taxes $ 20,795,041 $ 19,989,545 $ 805,496 3.9%
Other real property tax items 80,369 72,504 7,865 9.8%
Non-property tax Items 628,857 751,210 (122,353) -19.5%
Departmental income 2,850,836 2,861,801 (10,965) -0.4%
Intergovemmental charges 7,453,845 6,342,748 1,111,097 14.9%
Use of money and property 906,684 407,338 499,326 55.1%
Licenses and permits 426,269 419,247 7,022 1.6%
Fines and forfeitures 140,192 107,315 32,877 23.5%
Sale of property and compensation for loss 205,223 484,106 (278,883) -135.9%
Miscellaneous local sources 1,292,371 294,522 997,849 77.2%
State aid 3,946,391 3,825,015 121,376 3.1%
Federal aid 1,909,023 326,705 1,582,318 82.9%
Total Govemmental Fund Revenues $ 40,635,081 $ 35,882,056 $ 4,753,025 11.7%
EXPENDITURES
General govemment support $ 4,741,463 $ 4,488,085 $ 253,378 5.3%
Public safety 7,984,619 6,993,563 991,056 12.4%
Public health 40,152 39,952 200 0.5%
Transportation 3,360,845 3,039,987 320,658 9.5%
Economic assistance and opportunity 901,139 931,566 (30.427) -3.4%
Culture and recreation 3,457,407 3,567,350 (109,943) -3.2%
Home and community services 315,273 304,071 11,202 3.6%
Employee benefits 6,803,164 5,654,256 1,148,908 16.9%
Capital 12,788,366 8,756,057 4,032,309 31.5%
Debt service principal and Interest 2,439,675 2,215,224 224,451 9.2%
Total Govemmental Fund Expenditures $ 42,831,903 $ 35,990,111 $ 6,841,792 16.0%
GENERAL FUND BUDGETARY HIGHLIGHTS
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.
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2005
CAPITAL ASSET AND DEBT ADMINISTRATION
Caoltal Assets
As of December 31, 2005 the Town had $90.3 miUion in net capital assets including land, buildings,
Improvements, machinery and equipment, and infrastructure. The Town's component units had $8 million In
net capital assets including land, buildings, Improvements, machinery and equipment, and sewer mains.
Capital Assets at December 31,
Prlmarv aovemment 2005 2004
Land $ 47,772,278 $ 37,795,087
Construction in progress 1,608,081 398,912
Buildings 4,574,513 4,569,296
Improvements other than buildings 13,498,954 13,469,136
Machinery and equipment 9,522,815 8,686,593
Infrastructure 70,038,525 69,334,187
Total capnal assets 147,015,166 134,253,211
Less accumulated depreciation 56,721,087 52,878,731
Primary government - Total net capital assets $ 90,294,079 $ 81,374,480
Comoonent unns
Land $ 2,213,759 $ 2,213,759
Buildings 3,540,111 3,416,944
Improvements other than buildings 2,575,589 2,575,589
Machinery and equipment 3,200,728 3,170,695
Infrastructure 2,138,386 2,121,386
Total capnal assets 13,668,573 13,498,373
Less accumulated depreclatlon 5,639,830 5,236,652
Component units - Total net capital assets $ 8,028,743 $ 8,261,721
-9-
TOWN OF SOUTH OLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2005
CAPITAL ASSET AND DEBT ADMINISTRATION (continued)
Caoital Assets (continued)
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 probable usefulness of the purpose of expenditure. The following sets forth a summary
of the ToWll's capital program.
(Dollars in thousands):
Eauioment
2006
General Fund
Highway Fund
Special Districts
$
345,900
2,500
20.000
368.400
Total Equipment
$
Imorovements
General Fund
Special Districts
Total Improvements
$ 440,130
800.000
$ 1.240.130
$ 1 608 530
Total Program
Additional information on the Town's capital assets can be found in Note C.3 to the financial statements.
Debt Administration
The Town of Southold's credit rating from Moody's Investors Services was upgraded to A1 from A2 in
February 2005.
Debt Umit - 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 dMding 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 dMding such sum by five. Percentage of debt contracting power exhausted at December
31, 2005 was 2.16%.
At. December 31, 2005, the Town had approximately $9.2 million in long term general obligation bonds
outstanding, of which $9 million was for general Town purposes. Also outstanding at year-end were bond
anticipation notes in the amount of $8.8 million of which $6 million was for general Town purposes.
Additional information on the Town's debt activity can be found in Note CA to the financial statements.
-10-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2005
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
Prooertv Tax
The Town has adopted a budget for the 2006 fiscal year which factors in inflation and other adjustments to
revenues and expenditures as well as prior year positive and negative fund balances. The 2006 budget
includes an overall increase in real property tax revenues from the prior year of approximately 3.9% for the
general Town governmental activities.
State Aid and Local Assistance
The Tawn receives financial assistance from New York State and from Suffolk County. During 2005, financial
assistance Included state aid consisting of mortgage tax of $2.5 million, consolidated highway aid of $188
thousand, and community preservation aid of approximately $1 million. State aid per capita was $75.3
thoulXlnd and County local government assistance was $211.7 thousand. 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 2006 budget included similar amounts for this financial assistance.
Retirement SYStem
The New York State Employees Retirement System, having suffered some adverse effects of the weak stock
market conditions, was expected to require payments in excess of amounts the State had originally anticipated
for the year ended 2005. When establishing the 2005 budget. the Tawn had anticipated these excess
payments. However, due to a change in the biDing cycle. the State was able to hold the contribution rates to
those the State had originally anticipated. The Town subsequentiy re-appropriated the budgeted but
unexpended excess payment In the 2005 budget. The State's new billing cycle will require a minimum
contribution rate of 4.5%. Employer contribution for subsequent years will be based on the Russell 3000
performance as of April 1 of the preceding two years.
In 2003 the Town of Southold adopted the New York State Early Retirement Incentive Program as authorized
by Chapter 69 of the Laws of 2002. The option to retire early ran through December 31, 2002. The eligibility
. varied based on tier. age and years of service. but all options required that the employees be at least fifty (50)
years of age and being vested in the New York State Retirement System. As part of Its contractual
agreements with the unions, the Town of Southold also offers fully paid health insurance benefits (but not
welfare benefits) for the retiree and their present spouse until death of the retiree.
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 of Southold, Office of the
Town Comptroller, Southold, New York.
BASIC FINANCIAL
STATEMENTS
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
December 31,2005
ASSETS
Current Assets:
Cash and investments
Accounts receivable, net of allowances
Due from fiduciary funds
Due from other governments
Due from primary government
State and federal aid receivables
Prepaid charges
Inventory of material and supplies
Total Current Assets
Non-Current Assets:
Deferred charges, net of accumulated amortization
Non-depreciable capital assets
Depreciable capital assets, net of depreciation
Total NorH:urrent Assets
Total Assets
UABIUTIES
Current Liabilities:
Accounts payable and accrued liabilities
Accrued interest payable
Bond anticipation notes payable
Due to other governments
Due to fiduciary funds
Unearned revenue
Other liabilities
Non-current liabilities due within one year
General obligation bonds payable
Due to Employees Retirement System
Claims and judgments payable
Estimated liability for landfill ciosure
and postclosure care costs
Total Current Uabilities
Non-Current Uabilltles:
General obligation bonds payable
Due to Employees Retirement System
Compensated absences
Estimated liability for landfill closure
and postclosure care costs
Total Non-Current Liabilities
Total Liabilities
NET ASSETS
Investment in capital assets, net of related debt
Unrestricted
T atal Net Assets
Primary
Governmental
Activities
Component
Units
$ 20,968,117 $ 1,250,827
236,215 3,561
68
2,631,939
949,145
1,127,523 48,767
1,130,599 45,140
1,204
26,095,665 2,297,440
170,000
49,380,359 15,284,596
40,913,720 5,918,714
90,464,079 21,203,310
116,559,744 23,500,750
1 ,344,864
227,617
8,875,000
393,570
7,044
4,402,014
755,000
45,189
220,000
19,072
16,289,370
8,494,098
48,804
5,779,826
593,323
14,916,051
31,205,421
81,044,981
4,309.342
$ 85,354.323
442.802
63,941
2,845,000
2,271
392,414
195,000
3,941,428
2,855,000
2.855,000
6,796,428
14,093,268
2,611,054
$ 16,704,322
See notes to the financial statements
-12-
TOWN OF 80UTHOLQ
GOVERNMENT-WIDE FINANCIAl.. STATEMENTS
STATEMENT OF ACTIVITIES
Year ended December 31, 2005
Net Expenses (Revenues) and
Program Revenues Capital Change In Net Assets
0_
Charges for Grants and Grants and Prlmary Component
Functlon/Prograrn Expenses Services Contributions Contnbutlons Government Units
PRIMARY GOVERNMENT
Government Ac:tIvftIes:
General govemment support $ 6,621,408 $ 204.757 $ 151,125 $ 6,265,528
Publ'1C safety 11,342,991 539,891 214,948 10,588.154
Public health 43,569 9,985 33.574
Transportation 6.827,876 12,777 $ 188,147 6,426,952
Economic assistance and opportunity 1,208.467 174,830 200,249 833,388
CuIhn and recreation 356,167 188,031 168,136
Home and community services 4,961,051 9,603,400 283,179 3,314,100 (8.239.628)
Interest on debt 501,452 501,452
Total Primary Government. $ 31,662,971 $ 10,723.686 $ 859.484 $ 3.502.247 $ 16,577.554
COMPONENT UNITS
General government s~port $ 80.610 $ 80.610
Public health 60,371 60,371
Transportation 2,532,192 $ 1,884,374 $ 1,983.139 (1.335,321)
Culture and recreation 814.501 814,501
Home and community services 495,832 47,644 ....,88
Interest on debt 102.579 102,579
Total Component Units $ 4.066,085 $ 1 ,932,016 $ 1,983.139 $ 170.928
GENERAL REVENUES
Real property ..... $ 20,795.041 $ 1,960.880
Other real property lax Items 80.389 566
Non-property tax !lema 628,857 18.449
Interest earnings 766,413 68.883
State aid 2,527,110 884
Other 709.352 "',296
Total General Revenues 25.507.142 2,089.738
Change In Net Assets 8.929.588 1.918,810
~t Assets at Beginning of Ye.r 76,424,735 14,785.512
Net Assets at End of Year $ 85.354,323 $ 16,704.322
See notes to the financial statements.
-13-
TOWN OF SOUTHOLD
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2005
MAJOR FUNDS Non-Major
Capital Governmental
General Highway Projec1s Funds Totals
ASSETS
Cash and invesbnents $ 9,292,437 $ 1,022,924 $ 9,406,620 $ 1,246,136 $ 20,968,117
Accounts receivable, net of allowance 24,533 8,190 30,500 172,992 236,215
Due from other funds 176,390 828,984 251,100 733,039 1,989,513
Due from trust funds 68 68
Slate and federal aid receivable 81,849 43,424 1,002,250 1,127,523
Due from other governments 1,867,136 759,803 5,000 2,631,939
Supply invenlory 1,204 1,204
Prepaids 498,344 56,947 54,024 609,315
Total Assets $ 11,941,961 $ 1,960,469 $ 11,450,273 $ 2,211,191 $ 27,563,894
UABIUTIES AND FUND BALANCES
LIABILITIES
Accounts payable $ 627,049 $ 72,436 $ 337,613 $ 227,184 $ 1,284,282
Retained percentages 80,560 80,580
Bond an1lclpallon notes payable 8,875,000 8,875,000
Due 10 other funds 1,888,241 73,598 27,674 1,989,513
Due 10 trust funds 7,044 7,044
Due 10 other governments 393,570 393,570
Deferred revenue 3,018,595 831,185 552,234 4,402,014
Tolal Uablllties 5,934,499 903,621 9,388,791 807,092 17,012,003
FUND BAlANCE
Fund Balances - reserved:
Encumbrances 4,009 4,009
Supply invenlory 1,204 1,204
Prepalds 498,344 26,686 525,030
Insurance claims 1,105,879 1,105,879
Fund Balance - unreserved: 18,000 18,000
Designatad - ensuing yeafs budget 2,657,200 339,900 348,596 3,345,696
Undeslgnatad 1,740,826 700,948 2,083,482 1,028,817 5,554,073
Tolal Fund Equity 6,007,462 1,056,848 2,083,482 1,404,099 10,551,891
Total Liabilities and Fund Equity $ 11,941,961 $ 1,960,469 $ 11,450,273 $ 2,211,191 $ 27,563,894
See notes to the financial statements.
~
TOWN OF SOUTHOLD
RECONCilIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
STATEMENT OF NET ASSETS
December 31,2005
Total Fund Balances - Governmental Funds $ 10,551,891
Amounts reported for governmental activities in the
Statement of Net Assets are different because:
Capital assets less accumulated depreciation are
included in the Statement of Net Assets:
Capital assets - non-depreciable $49,380,359
Capftal assets - depreciable 97,634,807
Accumulated depreciation (56,721,087)
90,294,079
Other long-term assets are not available to pay for current-period
expendftures and, therefore, are deferred in the funds
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 Assets:
General obligation bonds payable (9,249,O98)
Due to Employees Retirement System (93,993)
Compensated absences (5,779,826)
Claims and judgments payable (220,000)
Estimated Iiabilfty for landfill closure
and postclosure care costs (612,395)
(15,955,312)
Prepaid items included in the Statement of Net Assets 521,282
Deferred charges included in the Statement of Net Assets 170,000
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 fu nds. However
these liabilities are included in the Statement of Net Assets. (227,617)
Net Assets of Governmental Activities $ 85,354,323
See notes to the financial statements.
-15-
TOWN OF SOUTHOLD
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BAlANCES
GOVERNMENTAL FUNDS
For the year ended December 31, 2005
MAJOR GOVERNMENTAL FUNDS Non-Major
Capital Governmental
General HiQhwav Prolecls Funds Totals
REVENUES
Real property taxes $14,608,674 $3,605,032 $2,381,335 $ 20,795,041
Other real properly tax nems 68,607 9,046 2,516 80,369
Non-properly tax items 415,071 213,786 628,857
Departmental income 345,956 2,504,880 2,850,836
Intergovernmental charges 252,558 $ 7,200,274 1,013 7,453,845
Use of money and properly 489,796 77,817 274,959 64,092 906,664
Licenses and penmlls 249,178 11,126 165,965 426,269
Anes and forfeitures 140,192 140,192
Sale of properly and compensation for loss 93,290 2,796 109,137 205,223
Miscellaneous local sources 432,269 155,054 551,457 153,591 1,292,371
State aid 2,637,870 188,147 1,045,000 75,374 3,946,391
Federal aid 174,348 1,510,539 224,136 1,909,023
Total Revenues 19,908,009 4,249,018 10,582,229 5,895.825 40.635,081
EXPENDITURES
C~rent
General government support 4,641,568 99,895 4,741,463
Public safety 7,ln,145 807,474 7,984,619
Public haaHh 33,288 6,864 40,152
Transportation 446,8n 2,913,768 3,360,645
Economic asslstanca and opportuMy 901,139 901,139
Home and communny servlcas 354,768 3,102,639 3,457,407
Cullure and racreatlon 315,273 315,273
Employee benefits 5,857,963 500,343 444,858 6,803, 164
Capital oullay 12,788,366 12,788,366
Principal and interest 1,560,055 178,371 29,529 671,720 2,439,675
Bond Issuance costs 70,075 70,075
Advanced refunding escrow 112,758 112,758
Total Expendftures 21,288,076 3,592,482 13,000,728 5.133.450 43,014.736
Excess (Dellcleney) of Revenues Over
Expenditures (1,380,067) 658,536 (2,418,499) 762.375 (2,379,655)
Other Financing Sources (UMS)
Proceeds of ralunding bonds 2,380,000 2,380,000
Payments 10 refunded bond escrow agents (2,210,000) (2,210,000)
Premium on special assessment debt 12,833 12,833
BANs redeemed from appropriations 1,065,095 1,065,095
Transfers in 2,642,859 276,969 2,919,628
Transfers out (1,895,023) 1520,085) 1504,720) (2,919,628)
Total Other Anancing Sources (Uses) 747,836 (520,085) 1,524,897 (504,720) 1,247,928
Excess (Deficiency) of Revenues and Other
Sourcas Over Expenditures and Other UMS (632,231) 136,451 (893,602) 257,655 (1,131,727)
Fund Balance at Beginning of Year 6,639,693 920,397 2,9n.084 1,146,444 11.683,618
Fund Balances at End of Year $ 6.007,462 $1,056.848 $ 2,083,462 $1,404,099 $10,551,891
See notes to the financial statements.
-16-
TOWN OF SOUTH OLD
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, 2005
Net Change in Fund Balance
$
(1,131,727)
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 expense. The amount
by which capital outlay exceeds depreciation in the current period is:
Capital outlay
Depreciation expense
Loss on dispositions
$13,205,174
(4,082,748)
(202,828)
8,919,598
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 governmental funds:
Prepaid charges
Deferred charges
(53,286)
170,000
The issuance of long-term debt and increase In obligations under capital
leases provides current financial resources to governmental funds, while the
repayment of the principal of long term debt and capital leases consumes
the current financial resources of governmental funds.
Neither transaction has any effect on net assets.
Bonds issued
Repayment of bond principal
Due to Employees Retirement System
Compensated absences
Claims and judgments payable
Estimated liability for landfill closure
and postclosure care costs
Accrued interest payable
(2,380,000)
3,162,431
41,841
(117,468)
378,630
18,872
(79,303)
Change in Net Assets of Governmental Activities
$
8,929,588
See notes to the financial statements.
-17-
TOWN OF SOUTHOLD
STATEMENT OF FIDUCIARY NET ASSETS
December 31, 2005
Fishers Island
Town Ferry District Totals
ASSETS
Cash and investments $ 14,898,809 $ 43,462 $14,942,271
Other receivables 17 40,638 40,655
Due from other funds 7,044 7,044
Total Assets $ 14,905,870 $ 84,100 $14,989,970
LIABILITIES
Due to other funds $ 68 $ 38,829 $ 38,897
Due to school districts 11,675,920 11,675,920
Due to component units 517,902 517,902
Due to other governments 1,664,259 1,664,259
Other liabilities 8,881 8,881
Deposits held 1,038,840 45,271 1,084,111
Total Liabilities $ 14,905,870 $ 84,100 $14,989,970
See notes to the financial statements.
-18-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Town of Soulhold (the "Town"), which was established in 1640. is govemed 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
oflwo years and five council members who are elected for terms of four years. The Town Board appoints
the Town Attorney, Comptroller and the Commissioner of Public Works whose terms are fixed by Town
Law. 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 seNices,
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 of Southold have been prepared in conformity with accounting
principles generaRy accepted In the United Stales of America (GAAP) as applied to govemmental units.
The Govemmenlal Accounting Standardis Board (GASB) is the accepted standard selling body for
establishing govemmental accounting and financial reporting principles.
The more significant of the govemmenfs accounllng policies are described below.
1. REPORTING ENTITY
The financial reporting entity consists of: (a) the primary govemment, which is the Town of
Southold; (b) organizations for which the primary govemment is financially accountable; and (c)
other organJzallons for which the nature and significance of their relationship with the primary
govemment are such that exclusion would cause the reporting entity's financial statements to be
misleading or incomplete as set forth in GASB Statement No. 14.
The decision 10 include a potential component unit in the Town of SouIhold reporting entity is based
on several criteria set forth in GASB SlaIement No. 14 including legal standing, dependency and
financial accountability. Based on the application of these criteria, the following is a summary of
cerlaln enlllles considered in determining the Town of SouIhold's reporting entity.
Certain speclaJ districts of the Town of Soulhold provide sanitation, ferry, and park services to
residents and businesses within the districts. These special districts are organized under New
York State Town law and have separately elected boards. Special districts cannot issue bonded
debt without the approval and the backing of the full faith and credit of the Town. Tax levies of the
special districlis are collecled by the Town Receiver of Taxes. As a resull of this fiscal dependency,
the Town Is financially accountable for these special districts. Accordingly, these special dislricls
have been determined 10 be component units of the Town and are presented disaelely i1 a
separate column in the combined financial statements 10 emphasize that they are legally separate
from the primary govemment
2. BASIS OF PRESENTATION
The Town's basic financial statements include both govemment-wide (reporting the Town as a
whole) and fund financial statements (reporting the Town's major funds).
Govemment-wlde Financial Statements
The govemment-wide financial statements reports Information on the Town as a whole, except
fiduciary activities, with separate columns for the primary governmental activities as well as the
discretely presented component units.
In the govemment-wide Statement of Net Assets, the Town's govemmental activiliesare
presented on a consolidated basis and are reported on a full accrual, economic resource basis,
which recognizes all long-term assets and receivables as well as long-term debt and obligations.
The Town's net assets are reported in three parts-investments in capital assets, net of related
debt; restricted net assets; and unrestricted net assets.
- 19-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
A. SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES (continued)
2. BASIS OF PRESENTATION (continued)
The government-wide Statement of Activities reports both the gross and net cost of each of the
Town's functional categories (public safety, transportation, home and community services, etc.),
which are otherwise supported by general government revenues (property, sales and use taxes,
certain intergovernmental revenues, fines, pennlls and charges, etc.). The Statement of
Activities reduces gross expenses (including depreciation), by related program revenues and
operating and capital grants, to produce the net cost of each program. Program revenues
include (a) charges for services and (b) operating and capital grants and contributions that are
directly associated with the function. Operating grants include operating-specific and
discretionary (either operating or capital) grants while the capital grants column reflects capltal-
specific grants. The net costs (by function) are normally covered by general revenue (property,
taxes, intergovernmental revenues, interest Income, ete). As a general rule the effect of
interfund activity has been eliminated in general purpose financial statements.
This government-wide focus is more on the sustainability of the Town as an entity and the
change In the Town's net assets resulting from the current yea(s activities.
Fund Financial Statements
The fund financlal statements are similar to the financial statements presented in the previous
model. The new emphasis is on the major funds in the fund financial statements.. NorHnajor funds
are summarized into a single column.
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, rlBbilities, fund balances, revenues, and
expenditures, which are segregated for the purpose of carrying on specific activities or attaining
certain objectfves In accordance with special regulatfons, restrIclions or limitations. The various
funds are presented by type In the fund financial statements. Accordingly, the Town maintains the
followfng fund types:
Governmental Funds - Govemmental 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 foalS of
the governmental funds is upon delenninatfon of financial position and changes In financial
position. Governmental funds are further classified as major and non-major funds.
The Town reports the following major governmental funds:
General FOnd - is the principal operating fund of the Town. This fund is used to account for all
financial resouroes except those required to be accounted for in other funds.
Hlohwav Funds - to maintain and operate highways.
Cacltal Prolects Fund - used to account for financial resources to be used for the acquisition or
construction of major capital facilities (other than those financed by special assessment funds
and trust funds).
_ ?O_
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
A. SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES (continued)
2. BASIS OF PRESENTATION (continued)
Fund Financial Statements (continued)
Additionally, the Town reports the following non-rnajor funds:
Special Revenue Funds - are used to account for the proceeds of speclflc revenue sources (other
than major capital projects) that are legally restricted to expendnures for speclfled purposes.
Special Revenue Funds Indude the following:
General Fund Part Town - to provide general services outside the Village of Greenport.
SDecial Grant Fund - segregate and account for projects funded by Communny
Development revenue.
SDecial District Funds - to provide special services to areas that encompass less than the
whole town.
Fiduciary Funds - Rduclary Funds are used to account for assets held by the Town in a trustee or
custodial capadty.
Agency Fund - is for money (and/or property) received and held in the capacny of trustee,
custodian or agenL
Discretely Presented Component Units
Certain special districls that have separately elected boards provide transportation, park, mosquito
conlrol, and sanitation services to residents and businesses within these districls, and follow
govemment fund accounting ptindples. These districls, which are accounted for as discretely
presented component unns, are as follows:
The Fishers Island Ferry District, established in 1947
Orient Mosquno District, established in 1916
Fishers Island Garbage and Refuse District, established in 1952
Cutchogue-New Suffolk Park District, established in 1953
Orient-East Marion Park District, established In 1969
Southold Park District, established in 1907
Mattituck Park District, established in 1941
Complete financial statements of these component units can be obtained from their respective
administrative offices:
Orient Mosquito District
145 Platt Road
Orient, NY 11957
Cutchogue-New Suffolk
Park District
P.O. Box 311
Cutchogue, NY 11935
Soulhold Park District
P.O. Box 959
Southold, NY 11971
Rshers Island Ferry District
P.O. Box 1179
Southold, NY 11971
FIshers Island Garbage
& Refuse District
Fishers Island, NY 06390
Orient-East Marion
Park District
P.O. Box 12
Orient, NY 11957
Mattituck Park District
P.O. Box 1413
Matt/tuck, NY 11952
_ ?1 _
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2005
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3. BASIS OF ACCOUNTlNGlMEASUREMENT FOCUS
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.
In the govemment-wide statements, govemmental activitles are presented using the economic
resources measurement focus and are presented using 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 or economic asset used. Revenues, expenses, gains, losses, assets,
and liabilities resulting from exchange and exchange-like transactions are recognized when the
exchange takes place.
In the funds statements, govemmental funds use a current financtal resources measurement focus
and are accounted for using the modified accrual basis of accounting. Under the modified accrual
basis of accounting, revenues are recognized when susceptible to accrual (measurable and
available to finance current operations). "Measurable" means the amount of the transaction can be
determined and "available" means collectible within the current period or soon enough thereafter to
pay liabilities of the current period. The Town considers all revenues available if they are collected
within 60 days after the year end. Revenues susceptible to accrual Include Suffolk County local
assistance at year end on behalf of the Town, franchise fees, and charges for services,
intergovemmental revenues and operating transfers. Permits, fees, and other slmUar 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 llrants, revenues are recognized when the expenditure Is Incurred. In the Capital
Projects Fund, long-term debt is recognized as revenue upon receipt of the proceeds.
Expenditures are recorded on the accrual basis except that (a) expenditures for prepaid expenses
are recognized when incurred; (b) principal and Interest on Indebtedness are recognized as
expenditures when due; (c) compensated absences, such as vacation and sick leave, which vest or
accumulate, are charged as expenditures when paid.
Encumbrance accounting, under which purchase orders, contracts and other commitments are
recorded for budgetary control purposes in . order to reserve that portion of the applicable
appropriation, is employed in the governmental funds. Appropriations for all govemmental funds
except the capital projects fund lapse at year-end. However, encumbrances reserved against fund
balances are re-appropriated In the ensuing year. Encumbrances are reported as reservations of
fund balances since they do not conslltute expenditures or liabilities. expenditures for such
commitments are recorded in the period in which the liability is incurred.
4. ASSETS, LIABILITIES AND FUND EQUITY
RECEIVABLES
Receivables include amounts due from Federal, Slate, and other governments or entities for
services provided by the Town. Receivables are recorded and revenues recognized as earned or
as specific prOlJram expenditures are incurred.
INVENTORY. MATERIALS AND SUPPLIES
Inventory In the general and special revenue funds is valued at cost Inventory In these funds Is
accounted for under the consumption method.
-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES AND FUND EQUITY (continued)
CAPITAL ASSETS
Capital assets purchased or acquired with an original cost of $5,000 or more are reported at
historical cost or estimated historical cost. Contributed assets are reported at fair market value
as of the date received. 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 on all assets Is provided on the straight-
line basis over the following estimated useful lives:
Buildings
Improvements and other
Machinery and equipment
Infrastructure
10-40 years
20 years
5-10 years
20-30 years
Infrastructure assets, consisting of certain improvements other than buildings induding roads,
curbs. sidewalks, bridges, street lighting are capitalized along with other capital assets.
In the fund financial statements, capital assets are recorded as capital outlay expenditures in the
govemmental fund upon acquisition.
DEFERRED REVENUElUNEARNED INCOME
Deferred revenues/uneamed income are those where asset recognition criteria have been met, but
which revenue recognition criteria have not been met. Such amounts indude collections In
advanoa, unearned income and amounts that have been deemed to be "measurable" but not
"available" to finance current expenses pursuant to generally acoapted aocountlng principles.
PREPAlDS
Prepaids record payments to venders that benefit future recording periods and are reported on the
consumptlon basis. Prepaids in the General and Special Revenue Funds represent Insurance
. premiums paid for coverage that will benefit the subsequent period and for retirement benefits that
will benefit a future period.
LONG-TERM OBUGATlONS
The liabilities for long-term obligations consisting of general obligation bonds, compensated
absences, due to employee retlrement system, judgments, claims and liability for landfill closure
and post dosure costs are recognized in the govemment-wide financial statements.
In the fund statements, long-term obligations are not reported as liabilities. The debt proceeds
are reported as other financing sources and payment of principal and Interest reported as
expenditures.
5. REVENUES AND EXPENDITURES
REAL PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES
In Suffolk County, the assessment and lien of real property for taxation is done by the County
Department of Assessment. Real property taxes become a lien on December 1 for both school and
general taxes. The Town's assessment rolls are used for the levy of real property taxes by the
Town and the School Districts, as well as by the County and by Special Districts of the County and
the Town.
..,~
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
A. SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES (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 500/0 on May 10, payable without penalty 10
January 10 and May 31, respectively. Penalties are Imposed thereafter at the rate of one-twelfth of
the rate of interest deterTl1ined by the State Commissioner of Taxation and Finance, aller which
taxes are payable 10 the County Treasurer. The Town retains the 1ola1 amount of Town, Highway
and Town Special Districts levies rom the amount collected, and forwards the balance collected 10
the County which assumes collecllon responsibility. The Town and Town's Special Districts
therefore realize annually the 100% collection of real property taxes.
School District property taxes are also levied on December 1, and are also payable In two
installments. School property taxes are due in two installments, 50% on December 1 and 50% on
May 10 payable without penalty 10 January 10 and May 31, respecllvely. The County is also
responsible for uncollected school taxes.
INTERFUNDTRANSACTIONS
Interfund transactions have been eliminated from the govemment-wide financial statements. In
the funds statements inlerfund transactions include:
a) Interfund Revenues
Inlerfund revenues, quasi-extemal transactions, in the general fund represent amounts
charged for services or faciflties provided by the general fund. The amounts paid by the fund
recelving the benefit of the service or facilities are reflected as an expenditure of that fund.
b) Transfers
Transfers represent payments 10 the debt sefVlce, general fund and capital projects funds
rom the other funds for their appropriate share of the debt SefVlce, general fund or capital
project costs.
COMPENSATED ABSENCES
The liability for vested or accumulated vacation or sick leave (compensated absences) is
recorded as current and noncurrent obligations in the govemment-wide statements. The current
portion of this debt is estimated based on historical trends. In the fund financial statements only
the compensated absence liability payable from expendable available financial resources is
incurred.
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 il
6. EQUITY CLASSIFICATIONS
In the government-wide statements, equity Is classified as net assets and displayed in three
components:
a) Invested in capital assets, net of related debt - 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.
-24 -
TOWN OF SOUTH OLD
NOTES TO FINANCIAL STATEMENTS
December 31,2005
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
6. EQUITY CLASSIFICATIONS (continued)
b) Restricted net assets - consists of net assets 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 net assets - all other net assets that do not meet the definition of "restricted"
or "invested in capital assets, net of related debt"
In the fund statements, governmental fund equity Is classified as fund balance. Fund balance is
further classified as reserved and unreserved, with unreserved further split between designated
and undeslgnated. Portions of fund equity are segregated for future use and therefore not
available for future appropriation or expenditure. Amounts reserved for encumbrances, inventory,
insurance claims and debt service represent portions of fund equity, which are required to be
segregated In accordance with state law or GAN'. Designations of fund balances In governmental
funds Indicate the utilization of these resources in the subsequent year's budget or tentative plans
for future use.
B. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
1. BUDGETARY DATA
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.
Budgetary controls for special revenue funds are established in accordance with the applicable
grant agreement, which may cover a period other than the Town's fiscal year. Appropriate
budgetary adjustments have been made to reflect these grant agreements dUring the Town's
fiscal year.
The Town follows the procedures enumerated below In establishing the budgetary data reflected in
the financial statements:
a. No later than October 1, 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
20, the Town Board adopts the budget
c. The Town Board must approve all modifications of the budget However, the Supervisor is
authorized to transfer certain budgeted amounts within departments.
In order to show the full legal level of budgetary compliance for the general and ceriain special
revenue funds, detailed indMduaf statements of revenues, expenditures and changes in fund
balances - budget and actual, are presented in a separate budget report.
- 25-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
B. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (continued)
2. FUND BALANCES
DESIGNATION OF FUND BALANCE
Portions of the unreserved balances at December 31, 2005 were designated for the subsequent
year's operating budgets as follows:
Fund Balance
Unreserved and
Designated
Total for Subsequent Fund Balance
Fund Balance Year's Unreserved
Fund Unreserved Budget Undesignated
Non-Major Funds:
Town Outside Village $ 845,309 $ 370,932 $ 474,377
East West Fire Protection District 15,112 4,350 10,762
Southold Wastewater District 176,657 176,657
Fishers Island Sewer District 32,546 32,546
Solid Waste Management District 334,475 334,475
Total $ 1,404,099 $ 375,282 $ 1,028,817
C. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS
1. CASH AND INVESTMENTS
Cash consists of funds deposited in demand accounts, time deposit accounts and certificates of
deposit with maturlties of less than three months.
The Town's investments are governed by a formal investment policy. The Town's monies must be
deposited in FDIC-lnsured 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 Securlty System (CLASS).
CLASS is a cooperative investment plan 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.
It is the Town's policy to require coliateral held in the name of the Town for demand deposits,
money market deposits and certificates of deposit for all deposits not covered by federal deposit
insurance. Obligations that may be pledged as collateral are obligations of the United States and
its agencies and obligations of the State and its municipalities and school districts.
At December 31, 2005 the cash in banks was approximately $37,160,000 and collateral held
against cash in banks was $60,410,000 consisting of FDIC insurance and/or securities held in
the name of the Town of Southold.
-26 -
TOWN OF SOUTH OLD
NOTES TO FINANCIAL STATEMENTS
December 31,2005
C. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (continued)
2. INTERFUND RECEIVABLES AND PAYABLES
Interfund receivables and payables for the primary government at December 31, 2005 were as
follows:
General Fund - Town wide
Highway Fund
Capital Projects Fund
Part Town
East-West Fire District
Southold Wastewater District
Fishers Island Sewer District
Solid Waste Management District
Amount
Receivable
$ 176,390 $
628,984
251,100
152,519
92.199
4,752
325
483.244
Amount
Pavable
1.888,241
73.598
6,974
20.700
$ 1 989 513 $ 1 989513
Interfund receivable and payable balances for the primary government at December 31, 2005 are
expected to be paid currently.
3. CAPITAL ASSETS
Primary govemment
Capital assets not being depreciated
land
Construction in progress
Total capital assets not being depreciated
Depreciable capital assets
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total depreciable capila! assets
less accumulated depreciation
Buildings
Improvements other than buiidlngs
Machinery and equipment
Infrastructure
T olal accumulated depreciation $
T oIal net depreciable capital assets
T olal net capital assets
Balance
1/1/05
$ 37,795,087 $
398,912
38,193,999
4,569,296
13,469,136
8,686.593
69,334,187
96,059,212
1,933.832
3,020,775
5,567,555
42,356.569
52,878,731
- 27-
Additions
Deletions
9,977,191 $
1,362,656
11,339,847
-0- $
153,487
153,487
5,217
29,818
1,125,955
704,338
1,865,328
289,733
289,733
$
134,698
521,309
714,211
2,712,530
4,082,748 $
240,392
240,392
Balance
12/31105
47,772,278
1,608,081
49,380,359
4,574,513
13,498,954
9,522,815
70,038,525
97.634,807
2,068,530
3,542,084
6,041,374
45,069,099
56,721,087
40,913,720
$ 90,294,079
TOWN OF SOUTHOlD
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
C. DETAILED NOTES ON All FUNDS AND ACCOUNT GROUPS (continued)
3. CAPITAL ASSETS (continued)
Depreciation elCpense was charged to governmental functions as fonows:
General government support
Public safety
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
$ 231,471
179,200
2,923,649
36,230
61,206
650,992
$ 4,082,748
Balance Balance
Discretely presented component units 1/1/05 Additions Deletions 12/31/05
Capital assets not being depreciated
land $ 2,213,759 $ 2,213,759
Construction in progress 10,592,179 $ 2,596,828 $ 16,440 13,174,567
Total capital assets not being depreciated 12,805,938 2,596,828 16,440 15,388,326
Depreciable capital assets
Buildings 3,416,944 123,167 3,540,111
Improvements other than buildings 2,575,589 2,575,589
Machinery and equipment 3,170,695 30,033 3,200,728
Infrastructure 2,121,388 17,000 2,138,386
Total depreciable capital assets 11,284,614 170,200 11,454,814
Less accumulated depreciation
Buildings 1,186,077 103,656 1.289,733
Improvements other than buildings 973,574 88,000 1,061;574
Machinery and equipment 2,003,454 129,203 2,132,657
Infrastructure 1,073,547 82,319 1,155,886
Total accumulated depreciation $ 5,236,652 $ 403,178 5,639,830
Total net depreciable capital assets 5,814,984
Total net capital assets $ 21,203,310
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
C. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (continued)
4. INDEBTEDNESS
SHORT TERM DEBT
Bond Anticipation Notes (BANs) - Bond anticipation notes (BANs) 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. These
BANs bear interest at various rates from 2.64% to 3.06% and are due at various dates through
2006.
When BANs are not redeemed with the proceeds of bond issues, but instead paid from budgetary
appropriations, the principal amount paid is recorded as an expenditure in the operating fund and a
financing source is recorded in the capital projects fund.
These notes are summarized as follows:
DescriDtion
Various Purposes
Various Purposes
New London Wharf
Fishers Island Garbage
Total
Amount
$ 7,175,000
1,700,000
1,725,000
1.120.000
S 11 720.000
Interest
Rate
2.64%
3.05%
2.75%
3.06%
Of the $11,720,000 in bond anticipation notes, $8,875,000 relates to the primary government and
the remaining $2,645,000 relates to the component units.
LONG TERM DEBT
Summary of changes In long-term debt transactions for the year ended December 31, 2005 is as
follows:
Non-current
Balance Balance IlabDities due Non-cummt
1/1105 Increases Reductions 12/31105 within one year liabilities
Primary Government
General obIigetlon bonds $ 10,031,529 $ 2,380,000 $ 3,162,431 $ 9,249,098 $ 755,000 $ 8,494,098
Due to Employees Retirement Sys!el 135,834 41,841 93,993 45,189 48,804
Compensated absences 5,662,358 860,531 743,063 5,779,826 5,779,826
Claims and judgments 598,630 378,630 220,000 220,000
Estimated labiDty for landfill closure
and post-closulIl care costs 631,267 18,872 612,395 19,072 593,323
Component Units:
General obligation bonds 272,589 3,000,000 222,569 3,050,000 195,000 2,855,000
TOWN OF SOUTH OLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
C. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (continued)
4. INDEBTEDNESS (continued)
LONG TERM DEBT (continued)
General Obligation Bonds - The Town borrows money in order to acquire land or equipment or
construct buildings and improvements. This enables the cost of these capital assets to be bome by
the present and future taxpayers receiving the benefit of the capital assels. These long-term
liabilities, which are backed by the full faith and credi1 of the Town, bear Interest at various rates
from 2.95% to 6.375% and have maturity dates in 2006 through 2021.
Future principal and interest paymenls to maturity for both the primary government and the
component units are as follows:
Year Endlna
2006
2007
2008
2009
2010
2011-2015
2016-2021
$
Princioal
950,000
979,098
995,000
1,025,000
1,000,000
4,390,000
2.960.000
$
Interest
405,624
376,466
345,307
312,347
2n,956
910,394
265.814
Totals $ 12 299 098 $ 2 893 908
Other long-term Iiabllitles for claims and judgments, compensated absences, retlrement system
and the estimated lfabili1y for landfill clOsure and post closure cosls are to be paid by the fund
that gave rise to the liablli1y.
During the year ended 2005, the Town issued $2,380,000 in general obligatlon bonds with an
Interest rate ranging from 2.50% 10 3.75% 10 advance refund $2,210,000 of aulstanding 1993 and
1995 Serial bonds with Interest rates between 5.00% and 5.10%. The net proceeds of $2.392,833
include an original Issue premium of $12.833 which were used in part 10 pay Insurance,
underwritlng fees and admlnlstratlve costs of $70,075 with the balance deposited In an Irrevocable
trust with an escrow agent 10 provide for all future debt seIVice payments on the various general
obligatlon bonds. As a result, these bonds are considered 10 be defeased and the Ilabili1y for those
bonds has been removed from the Town.
The Towns advance refunded the various general obligatlon bonds in order to reduce Its lotal debt
service paymenls over the next 10 years by $100,505 and 10 obtain an economic gain of $66,538
(difference between the present values of the debt service payments on the old and new debt).
5. RETIREMENT SYSTEM
Plan DescriDlion
The Town of Southold participates In the New York Stale and Local Employees' Retirement System
(ERS) and Local Police and Are Retirement System (PFRS). This is a cost-5haring multiple-
employer retirement system. The System provides retirement benefils as wen as death and
disablli1y benefits.
Obligation of employers and employees to contribute and benefits to employees are governed by
the New York State Retirement and Social Security Law (NYSRSSL). As set forth in the
NYSRSSL. the Comptroller of the State of New York (Comptroller) serves as sole trustee and
administrative head of the System. The Comptroller shall adopt and may amend rules and
regulations for the admlnlstratlon and transaction of the business of the System and for the cuslody
and control of their funds.
A publicly available annual report containing financlal statemenls and required supplemental
informatlon for the Employees' Retirement System may be obtained by writing 10 the New York
State Retirement System, Governor Smith State Building, Albany, NY 12244.
- 30-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
C. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (continued)
5. RETIREMENT SYSTEM (continued)
Fundina PoIicv
The System is nonconbibutory except for employees who joined the New York Slate and Local
Employees' Retirement System after July 27, 1976 and who have less than ten years of
membership and less than ten years of credited selVice with a retirement system under the
provisions of article fourteen or fifteen of the NYSRSSL, who contribute 3% of their salary. Prior to
October 1, 2000, all employees who joined the System after July 27, 1976 were required to
conbibute 3% of their salary. Under the authority of the NYSRSSL, the Comptroller shall certify
annually the rates expressed as proportions of payroll of members, which shall be used in
computing the conbibutions required to be made by employers to the pension accumulation fund.
The Town is required to conbibute at an actuarially determined rate. The actual contributions were
equal to the actuarially required amounts and also include additional conbibutlons to fund various
early retirement incentives made available to the Town employees. The credits and miscellaneous
adjustments represent modification made by the ERS for prior year's conbibutions.
The required conbibutions, for the Primary govemment, for the am'ent year and two preceding
years were:
2005
2004
2003
ERS
$ 1,068,200
$ 992,023
$ 443,861
$
$
$
PFRS
1,016,937
679,079
240,756
The Town's conbibution to the system was 100% of the conbibutions reqi.8'ed each year.
6. POST EMPLOYMENT BENEFITS
In addition to providing pension benefits, the Town provides health insurance coverage and survivor
benefits for retired employees and their survivors. Substantially all of the Town's employees may
become eligible for these benefits if they reach normal retirement age while worl<ing for the TO'Ml.
Health care benefits are provided through either a self-funded plan whose premiums are based on
the benefits paid during the year or are provided in aax>rdance with New York Stale Health
Insurance Rules and Regulations (administered by the New York Slate Department of Civil Service)
through the New York Slale Empire Plan (the "Empire Plan") whose premiums are based on the
benefits paid throughout the Slate during the year.
The Town recognizes the cost of providing benefits by recording Its share of insurance
premiums or the actual benefits paid as expenditure in the year paid. The Town's union
contracts and ordinances require that it provide its eligible enrollees with benefit coverage under
either the self-funded plan or the Empire Plan. Under the provlsloos 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. During the 2005 year,
$3,014,128 was paid on behalf of 88 retirees and 207 active employees and is recorded as an
expenditure In the General Fund.
7. COMPENSATED ABSENCES
Town employees are granted vacation and sick leave and eam 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.
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
C. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (continued)
7. COMPENSATED ABSENCES (continued)
Estimated vacation, sick leave and compensatory absences accumulated by govemmental fund
type employees have been recorded in the statements of net assets. Payment of vacation time and
sick leave Is dependent upon many factors; therefore, timing of future payments Is not readily
delennlnable. However, management believes that sufficient resources wili be made available for
the payments of vacation, sick leave and compensatory absences when such payments become
due. As of December 31, 2005, the value of the accumulated vacation time and sick leave was
$5,779,826 for the primary govemment.
D. COMMITMENTS AND CONTINGENCIES
Risk Management
The Town is self-Insured for both medical insurance and general liability Insurance. The amount of
medical claims outstanding at December 31, 2005 Is $200,131. This amount has been reserved
against fund balance In the General Fund.
In common with other municipalities, the Town receives numerous notices of claims. Prior to 2005,
coverage for bodily injury and property damage was previously written on a primary non-self insured
retention ("SIR") basis. Insurance market conditions and availability precluded the Town from obtaining
coverage in 2005 without an SIR. As a result, in 2005 the Town self-insured for bodily Injury and
property damage up to a maximum of $50,000 per claim. The $50,000 limitation was the minimum
retention amount available to the Town. Claims in excess of $50,000 are covered by excess liability
policies providing coverage for $10,000,000 per occurrence and in the aggregate. Although the
eventual outcome of these 2005 claims cannot presently be determined, the Town's third party
administrator has estimated unsettled claims at December 31, 2005 to be $94 thousand. These
amounts have been reserved against fund balance in the General Fund. The Town is of the opinion
that the ultimate settiement of the outstanding claims will not result in a material adverse effect on the
Town's financial position.
Since 2005, there have been no significant reductions in insurance coverage as compared to the prior
year; in addition there were no settiements on excess of insurance coverage over the last three years.
The Town Is also self-insured for unemployment benefits paid.
Landfill Closure and Post-Closure Care Costs
State and federal laws and regulations require the Town to place a final cover on its landfill sites and to
perfonn certain maintenance and monitoring functions at the sites for thirty years after closure. The Town
ceased accepting waste at its Culchogue landfill as of October 8, 1993. The Town entered into a
stipulation of settiement with the New Yark State Department of Environmental Conservation in
October of 1994 in which all charges of operational violations at the Cutchogue landfili were dropped.
Under the stipulation, the Town agreed to close and place a final cover over the landfill and. to pay a
. civil penalty of $650,000 over saven years. Construction of the final cover commenced in the summer
of 2001 and was completed in the fall of 2003.
In addition to placement of the final cover on the landfili, state and federal regulations presentiy require
the Town to perform certain maintenance and monitoring functions at the site for up to thirty years.
Accordingly, as of December 31, 2005 the Town has recorded a liability of $612,395 which represents the
provision to be made In future budgets for posl-closure landfill costs. Actual costs may vary due to
inflation or deflation, changes In technology, or changes in regulations or applicable laws.
Actual costs associated with the placement of the final cover totaled $7,681,719. Financing for closure
activities was provided through a $2,000,000 grant from the New York State Department of
Environmental Conservation. with the balance provided with a state subsidized loan through the New
Yark State Environmental Facilities Corporation. Costs associated with post closure care wili be
covered by charges to future landfill users and future lax revenue.
- 32-
TOWN OF SOUTH OLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
D. COMMITMENTS AND CONTINGENCIES (continued)
Lease Commitments and Leased Assets
The Town leases property and equipment under operating leases. Total rental expendttures on such
leases for the fiscal year ended December 31,2005 were approximately $205,000. Future obligations
over the primary terms of the Town's leases as of December 31,2005 are as follows:
2006
2007
2008
2009 and thereafter
Total
$
115,9n
94,997
85,184
684.824
980 982
$
E. CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED
COMPONENT UNITS
The following represents condensed financial statements for the disaetely presented component units as
of and for the year ended December 31, 2005:
Condensed Statement of Net Assets:
Due from Capital Assets other
Current Prfmary Net of Cu""nt Lo~.T",," Net
District Assets Govenment DepreclaUon UabJlltles L_ Assets
Fishers Island Feny $ 333,136 $ 119,344 $ 15,757,994 $ 2,439,520 $ 2,700,000 $ 11,070,954
Fish... Island Refuse and Garbage 640,862 631,328 3,026,171 1,235,336 3,063,025
QJtchogue-New Suffolk Parl< 125,728 28,382 124,218 28,382 249,946
Southold Parl< 21,550 63,406 648,159 65,677 667,438
Orient-East Marion Parl< 4,182 5,559 432,985 16,002 426,724
Mattituck Parl< 190,451 85,771 1,204,103 141,156 155,000 1,184,169
Orient Mosquko 32,386 15,355 9,680 15,355 42,066
$ 1,348,295 $ 949,145 $ 21,203,310 $ 3,941,428 $ 2,855,000 $ 16,704,322
Condensed Statement of Activities:
Program General R.......... Net Assets
Property
DistrfcI Expenses Revenue Net Expense Tax Olher Cha~e 1/1105 12/31105
Fish...lsIend Ferry $ 2,714,385 $ 1,884,374 $ 830,011 $ 400,000 $ 2,026,871 $ (1,596,860) $ 9,474,094 $ 11,070,954
Fisherllsland Refuse & Garbage 489,806 47,644 441,962 599,400 36,696 (194,136) 2,668,889 3,083,025
C~-NewSuffoI<Palfc 136,633 138,633 141,000 2,850 (5,217) 244,729 249,948
5outholdPar1< 350,068 350,066 315,000 34,090 998 668,438 887,438
Orient-East Marion Palfc 29,000 29,000 24,900 82 4,038 430,782 428,724
MaIlltuckPalfc 304,002 304,002 405,930 11,025 (112,953) 1,071,216 1,184,169
Orient Mosquko 60,371 60,371 74,850 401 (14,880) 27,388 42,066
$ 4,086,085 $ 1,932,018 $ 2,154.067 $ 1,960,880 $ 2,111,997 $ (1.918,810) $ 14,785,512 $ 16,704,322
~~
REQUIRED SUPPLEMENTARY
INFORMATION OTHER THAN
MANAGEMENT DISCUSSION AND
ANALYSIS
TOWN OF SOUTHOLD
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
Year ended December 31,2005
Original Final Variance
Budget Budget Actual PositiveJ(Negative )
REVENUES
Real property taxes $14,608,674 $ 14,608,674 $ 14,608,674
Other real property tax items 66,000 66,000 68,807 2,807
Non-property tax items 401,035 401,035 415,071 14,036
Departmental income 349,900 349,900 345,956 (3,944)
Intergovernmental charges 194,160 269,823 252,558 (17,265)
Use of money and property 286,625 286,625 489,796 203,171
Licenses and permits 218,330 218,330 249,178 30,848
Fines and forfeitures 112,000 112,000 140,192 28,192
Sale of property and compensation for loss 45,350 70,025 93,290 23,265
Miscellaneous local sources 86,648 113,654 432,269 318,615
Stale aid 2,348,264 2,483,083 2,637,870 154,787
Federal aid 270,000 270,000 174,348 (95,652)
Total Revenues 18,986,984 19,249,149 19,908,009 658,860
EXPENDITURES
General government support 5,545,742 5,764,043 4,641,568 1,122,475
Public safety 6,889,518 7,189,570 7,177,145 12,425
Public health 33,300 33,300 33,288 12
Transportation 420,500 466,131 446,877 19,254
Economic assistance and opportunity 993,400 982,510 901,139 81,371
Culture and recreation 388,870 398,370 354,768 43,602
Home and community services 299,101 316,755 315,273 1,482
Employee benefits 5,811,949 5,868,274 5,857,963 10,311
Debt service - principal and interest 1,773,100 1,577,799 1,560,055 17,744
Total Expenditures 22,155,480 22,596,752 21,288,076 1,308,676
Deficiency of Revenues
Over Expenditures (3,168,496) (3,347,603) (1,380,067) 1,967,536
Other Financing Sources (Uses)
Transfers in 5,488,341 5,559,682 2,642,859 (2,916,823)
Transfers out (2,319,845) (2,212,079) (1,895,023) 317,056
Total Other Financing Sources (Uses) 3,168,496 3,347,603 747,836 (2,599,767)
Excess (Deficiency) of Revenues and Other
Sources Over Expenditures and Other Uses (632,231 ) $ (632,231 )
Fund Balance at Beginning of Year 6,639,693
Fund Balance at End of Year $ 6,007,462
See notes to the financial statements.
-34-
TOWN OF SOUTHOLD
HIGHWAY FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Year ended December 31, 2005
Original Final Variance
REVENUES Budget BUdget Actual Posltive/(Negative)
Real Property Taxes $ 3,805,032 $ 3,805,032 $ 3,805,032
Other Real Property Tax Items 3,600 3,600 8,935 5,335
Non-Property Tax Items 111 111
Use of Money and Property 25,300 25,300 77,817 52,517
Licenses and Permits 5,000 5,000 11,126 6,126
Sale of Property and Compensation for Loss 1,000 1,000 2,796 1,796
Miscellaneous Local Sources 155,054 155,054
State Aid 223,700 223,700 188,147 (35,553)
Total Revenues 4,063,632 4,063,632 4,249,018 185,386
EXPENDITURES
Transportation 3,228,488 3,228,488 2,913,768 314,720
Employee Benefits 553,741 553,741 500,343 53,398
Debt Service - Principal and Interest 189,932 189,932 178,371 11,561
Total Expenditures 3,972,161 3,972,161 3,592,482 379,679
Excess of Revenues
Over Expenditures 91,471 91,471 656.536 565,065
Other Financing Uses (Sources)
Operating Transfers In 494,564 494,564 (494,564)
Transfers Out (586,035) (586,035) (520,085) 65,950
Total Other Financing Uses (91.471 ) (91,471 ) (520.085) (428,614)
Excess of Revenues Over
Expenditures and Other Uses 136,451 $ 136,451
Fund Balance at Beginning of Year 920,396
Fund Balance at End of Year $ 1.056,847
See notes to the financial statements.
-35-
OTHER SUPPLEMENTARY
INFORMATION
TOWN OF SOUTHOLD
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
December 31, 2005
East-West Fire Southold Ashers Solid Waste
General Fund Special Protection Wastewater Island Sewer Management
Part Town Grant District DlstMct District District Totals
ASSETS
Cash and Investments $ 740,370 $ 27,767 $ 176,492 $ 30,994 $ 270,513 $1,246,136
Accounts receivable, net of allowance 46,769 1,289 124,934 172,992
Due from other funds 152,519 92,199 4,752 325 483,244 733,039
Due from other governments $ 5,000 5,000
State and Federal Receivables
Prepaid expenditures 26,666 27,338 54,024
Total Assets $ 966,344 $ 5,000 $ 119,966 $ 181,244 $ 32.608 $ 906,029 $2,211,191
UABIUTlES AND FUND EQUITY
LIABILITIES
Accounts payable $ 14,395 $ 5,000 $ 12,656 $ 62 $ 195,071 $ 227,184
Due to other funds 6,974 20,700 27,674
Deferred revenue 99,666 92,198 $ 4,587 355,783 552,234
Total Uahllltles 121,035 5,000 104,654 4,587 62 571,554 807,092
FUND EQUllY
Fund balance - reserved:
Prepaid expenses 26,666 26,686
Fund balance - unreserved:
Designated. ensuing year's budget 344,246 4,350 348,596
Undesignated 474,377 10,762 176,657 32,546 334,475 1,028,817
Total Fund Equity 845,309 15,112 176,657 32,546 334,475 1 ,404,099
Total Uabilities and Fund Equity $ 966,344 $ 5,000 $ 119,966 $ 181,244 $ 32,608 $ 906,029 $2,211,191
-36-
TOWN OF SOUTHOLD
COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES
IN FUND BALANCES. NON-MAJOR GOVERNMENTAL FUNDS
Year ended December 31, 2005
East-West fire Southold Fishers Solid Waste
General Fund Special Protection Wastewater Island Sewer Management
Part Town Grant District District District District Totals
REVENUES
Real property taxes $ 538. n3 $ 413,058 $ 137,450 $ 1,814 $ 1,290,440 $ 2,381,335
Other real property tax items 1,220 290 97 2 907 2,516
Non property tax items 213,766 213,786
Departmental Income 739,283 26.231 17,423 1.721,943 2,504,660
Intergovernmental charges 1,013 1,013
Use of money and property 28,321 2,689 6,666 1,190 25,226 64,092
Licenses and permits 5,200 160,765 165,965
Sale of property and compensation for loss 8,556 100,581 109,137
Miscellaneous local sources 74,427 4,621 74,543 153,591
State aid 75,374 75,374
Federal aid $ 224,138 224,136
Total Revenues 1,684,940 224,138 416,037 175,065 20,229 3,375,418 5,895,825
EXPENDITURES
General government support 99,895 99,895
Public safety 393,192 414,282 807,474
Public heatth 6,864 6,864
Home and community services 563,269 224,755 1,B46 29,598 2,283,171 3,102,639
Emplcyee benefits 210,n6 212 233,870 444,858
Debt service - principal and Interest 5,385 2,475 663,860 671,720
Total Expenditures 1,279,381 224,755 414,282 4,533 29,598 3,180,901 5,133,450
Excess (Deficiency) of Revenues
Over Expenditures 405.559 (619) 1,755 170,532 (9,369) 194,517 762,375
Other Financing Uses:
Operating transfers out (264,969) (239,751) (504,720)
Total Other Financlng Uses (264,969) (239.751) (504,720)
Excess (Deficiency) of Revenues
Over Expenditures and other Uses 140,590 (619) 1,755 170,532 (9,389) (45,234) 257,655
Fund Balance at Beginning ofVear 704,719 619 13,357 6,125 41,915 379,709 1,146,444
Fund Balances at End of Year $ 845,309 $ -Q- $ 15,112 $ 176,657 $ 32,546 $ 334,475 $ 1.404.099
-37.
DISCRETELY PRESENTED COMPONENT UNITS
TOWN OF SOUTHOLD
OISCRETEL Y PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF NET ASseTS
~ber31,2005
TOWN OF SOUTHOLD
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF ACTIVITlES
Year ended December 31, 2005
Fishers Island CutchogUtr Southold Orient-East Mattltuck Orient
FIshers Refuse and New Suffolk Pari< Marion Park Pari< Mosquito
Island Ferry Garbage District Pari< District District District Dlsbict District
District (Unaudited) (Unaudited) (Unaud~ed) (Unaudited) (Unaudfted) (Unaudited) Totals
REVENUES
Program revenues $ 1,884,374 $ 47,844 $ 1,932,018
Real property taxes 400,000 599,400 $ 141,000 $ 315,000 $ 24,900 $ 405,930 $ 74,650 1,960,880
other real property tax Items 281 285 566
Miscellaneous revenue, other govemments 18,449 18,449
Interest and earnings 17,420 36,698 2,850 62 11,432 401 68,863
State AId 684 684
Federal Aid 1,983,139 1,983,139
other 6,898 34,090 (692) 40,296
Total Revenues 4,311 ,245 683,742 143,850 349,090 24,962 416,955 75,051 6,004,895
EXPENSES
General government support 80,610 80,610
Public health 60,371 60,371
Transportation 2,532,192 2,532,192
Culture and recreation 138,633 350,088 29,000 296,780 814,501
Home and community services 16,942 478,890 495,832
Interest 84,641 10,718 7,222 102,579
Total Expenses 2,714,385 489,606 138,633 350,088 29,000 304,002 60,371 4,066,085
Changes in Net Assets 1,596,880 194,136 5,217 (998) (4,038) 112,953 14,680 1,918,810
Net Assets at Beginning of Year 9,474,094 2,868,889 244,729 668,438 430,762 1,071,216 27,388 14,785,512
Net Assets at End of Year $11,070,954 $ 3,063,025 $ 249.946 $ 667,438 $ 426.724 $ 1,184,169 $ 42.066 $16,704,322
-39-
OTHER REPORTS
TOWN OF SOUTHOLD
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
December 31.2005
FEDERALGRANTO~PASS
THROUGH GRANTORIPROGRAM TITLE
U.S. Deoar/ment of Health & Human Services
Passed throuah Suffolk County:
Nutrition Services Incentive Program
U.S Deoartment of Health & Human Services
Passed throuah Suffolk County:
Nutrition
U.,S. Deoartment of Homeland Security
Passed throuah the Stale of New York
Buffer Zone Protection Plan
U.S Deoartment of Aariculture
Natural Resouce Conservation Service
Farm & Ranchland Protection Program
U.S Deoartment of Housina and Urban Develooment
Passed throuah Suffolk Countv:
Community Development Block Grant
U.S Deoarlment of the Interior
Fish and Wildlife Service
Passed throuah the State of New Yark
Deoartment of Environmental Conservation:
Coastal Wetlands Conservation Grant
-40-
FEDERAL
CFDA
NUMBER EXPENDITURES
93.053 $
93.045
97.078
10.913
14.218
15.614
21,174
103,174
50,000
510,539
224,136
1,000,000
$ 1,909,023
TOWN OF SOUTHOlD
NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
December 31, 2005
Note A - Basis of Presentation
The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Town
of Southold and is presented on the modified accrual basis of accounting. The information in this schedule is
presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments,
and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts
presented in, or used in the preparation of, the basic financial statements.
-41-
CERTIFIED PUBLIC ACCOUNTANTS. BUSINESS ADVISORS AND CONSULTANTS
25 Suffolk Court, Hauppauge, New If>rk 11788
631.434.9500 . Fax 631.434.9518
www.avz.com
REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MA TIERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
. Town Board
Town of Southold
Southold, New York
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 as of and for the year ended Deoember 31,
2005, which collectively comprise the Town of Southold's basic financial statements, and have Issued our
report thereon dated June 8, 2006, which was qualified because the Town of Southold's discretely presented
component units with the exception of one, the Fishers Island Ferry Dlsbict, were not audited as of the report
date. We conducted our audit in accordance with auditing standards generally accepted In the United Stales
of America and the standards appracable to financial audits contained in Government Auditing Standerds,
issued by the Comptroller General of the United Stales.
Internal Control Over Financial Reoortina
In planning and performing our audit, we considered the Town of Southold, New York's intemal control over
financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on
the financial statements and not to provide assurance on the intemal control over financial reporting. Our
consideration of the internal control over financial reporting would not necessarily disclose all matters in the
internal conrol over financial reporting that might be material weaknesses. A material weakness Is a condition
in which the design or operation of one or more of the intemal control components does not reduce to a
relatively low level the risk that misstatements in amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. We noted no matters involving the internal control' over
financial reporting and Its operation that we consider to be material weaknesses.
Comoliance and Other Matters
As part of obtaining reasonable assurance about whether the Town of Southold's financial statements are free
of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grants, noncompliance with which could have a direct and material effect on the determination
Of financial statement amounts. 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 that are required to be reported under Government Auditing .
Standards.
This report is intended solely for the information of the Town Board, management, others within the
organization, and federal awarding agencies and pass-through entities and is not intended to be and should
not be used by anyone other than those specified parties.
(ilJ,....u-, ~ ( 2v . Iv -r ~I (.? {,;
Hauppauge, New York
June 8, 2006 - 42 -
ALBRECHT, VIGGIANO, ZURECK & COMPANY, P.C.
__ ...::II. ....Dto,.l!ICR~
CERTIFIED PUBLIC ACCOUNTANTS. BUSINESS ADVISORS AND CONSULTANTS
25 Suffolk Court, Hauppauge, New lbrk 11788
631.434.9500 . Fax 631.434.9518
WWlVoQvz.com
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO
EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER
COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Town Board
Town of Southold
. Southold, New York
Comoliance
We have audited the compliance of the Town of Southold, New York with types of compliance requirements
described in the U. S. Office of Management and Budget (OMB) Cirr:ular A-133 Compliance Supplement that
are applicable to each of its major federal programs for the year ended December 31, 2005. The Town of
Southold's major federal programs are identified in the summary of auditor's results section of the
accompanying schedule of findings and questioned costs. Compliance with the requirements of laws,
regulations, contracts, and grants applicable to each of Its major federal programs is the responsibility of the
Town of Southold, New York's management Our responsibility is to express an opinion on the Town of
Southold, New York's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing standards,
issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of states, Local
Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan
and perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about the Town of Southold, New
York's compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our auell provides a reasonable basis for our opinion. Our
audit does not provide a legal determination of the Town of Southold, New York's compliance with those
requirements.
In our opinion, the Town of Southold, New York complied, in all material respects, with the requirements
referred to above that are applicable to each of its major federal programs for the year ended December 31,
2005.
Internal Control Over Comoliance
The management of the Town of Soulhold Is responsible for establishing and maintaining effective Intemal
control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal
programs. In planning and performing our audit, we considered the Town of Southold's internal control over
compliance with requirements that could have a direct and material effect on a major federal program In order
to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and
report on the internal control over compliance in accordance with OMB Circular A.133.
Our consideration of the intemal control over compliance would not necessarily disclose all matters In the
internal control that might be a material weakness. A material weakness is a condition In which the design or
operation of one or more of the internal control components does not reduce to a relatively low level the risk of
noncompliance with applicable requirements of laws, regulations, contracts and grarits that would be material
in relation to a major federal program being audited may occur and not be detected within a timely period by
employees in the normal course of performing the assigned functions. We noted no matters involving the
internal control over compliance and its operation that we consider to be material weaknesses.
-43 -
ALBRECHT, VlClOIANO. ZuRECK 150 CoM~. p.c.
1_ ,MDIIUtCl"IIKR~
This report is intended solely for the information of the Town Board, management, others within the
organization, and federal awarding agencies and pass-through entities and is not Intended to be and should
not be used by anyone other than those specified parties.
~I \J'~I ""2:.. - .1,., J- Crr,. f".c;
Hauppauge, New York
June 8, 2006
-44-
TOWN OF SOUTHOLD
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year ended December 31, 2005
SUMMARY OF AUDIT RESULTS
1. The auditor's report expresses a qualified opinion on the financial statements of the Town of Southold due
to the fact that six of the seven component units of the Town of Southold that were discretely presented
were not audited. The remaining component uni~ the Fishers Island Ferry District, was audited by other
auditors.
2. No reportable conditions disclosed during the audit of the financial statements are reported in the
"REPORT ON COMPlIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED
ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS~ None of the conditions are reported as a material weakness.
3. No instances of noncompliance material to the financial statements of the Town of Southold were
disclosed during the audit.
4. No reportable conditions disclosed during the audit of the major federal award programs are reported in
the "REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM
AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-
133". No material weaknesses were noted.
5. The auditor's report on compliance for the U.S. Department of the Interior- Fish and Wildlife Service
expresses an unqualified opinion; the report on the remaining programs are unqualified.
6. No audit findings relative to the major federal award programs for the Town of Southold are reported in
this schedule.
7. The Town of Southold had two "Type A" programs for the year ended December 31, 2005.
8. The program tested as a major program includes:
CFDA Number
Name of Federal Proaram or Cluster
15.614
U.S. Department of the Interior
Fish and Wildlife Service
9. The threshold for distinguishing Types A and B programs was $500,000.
10. The Town of Soulhold was determined to be a low-risk aud/tee.
-45-
TOWN OF SOUTHOLD
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year ended December 31,2005
FINDINGS-FINANCIAL STATEMENTS AUDIT
REPORTABLE CONDITIONS-
FINDINGS AND QUESTIONED COSTS- MAJOR FEDERAL
AWARD PROGRAMS AUDIT-
Questioned Cost
-46-
None
None
$
APPENDIX C
INSURANCE ON THE BONDS
AMBAC ASSURANCE
Payment Pursuant to Financial Guaranty Insurance Policy
Ambac Assurance Corporation ("Ambac Assurance") has made a commitment to issue a financial guaranty insurance
policy (the "Financial Guaranty Insurance Policy") relating to the Bonds effective as of the date of insurance ofthe
Bonds. Under the terms of the Financial Guaranty Insurance Policy, Ambac Assurance will pay to The Bank of New
York, in New York, New York or any successortbereto (the "Insurance Trustee"), that portion of the principal of and
interest on the Bonds which shall become Due for Payment but shall be unpaid by reason of Nonpa~ent by the
Obligor (as such terms are defined in the Financial Guaranty Insurance Policy). Ambac Assurance will make such
payments to the Insurance Trustee on the later of the date on which such principal and/or interest becomes Due for
Payment or within one business day following the date on which Ambac Assurance shall have received notice of
Nonpayment from the Trustee/Paying Agent. The insurance will extend for the term of the Bonds and, once issued,
cannot be canceled by Ambac Assurance.
The Financial Guaranty Insurance Policy will insure payment only on stated maturity dates and on mandatory sinking
fund installment dates, in the case of prmcipal, and on stated dates for payment, in the case of interest. If the Bonds
become subject to mandatory redemption and insufficient funds are available for redemption of all outstanding
Bonds, Ambac Assurance will remain obligated to pay principal of and interest on outstandin~ Bonds on the
originally scheduled interest and principal payment dates including mandatory sinking fund redemptIon dates. In the
event of any acceleration of the principal of the Bonds, the insured payments will be made at such times and in such
amounts as would have been made had there not been an acceleration, except to the extent that Ambac Assurance
elects, in its sole discretion, to pay all or a portion of the accelerated principal and interest accrued thereon to the date
of acceleration (to the extent unpaid by the Obligor). Upon payment of all such accelerated principal and interest
accrued to the acceleration date, Ambac Assurance's obligations under the Financial Guaranty Insurance Policy shall
be fully discharged.
In the event the Trustee/Paying Agent has notice that any payment of principal of or interest on a Bond that has
become Due for Payment and that is made to a Bondholder by or on behalf of the Obligor has been deemed a
preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy
Code in accordance with a final, nonappealable order of a court of competent jurisdiction, such registered owner will
be entitled to payment from Ambac Assurance to the extent of such recovery if sufficient funds are not otherwise
available.
The Financial Guaranty Insurance Policy does not insure any risk other than Nonpayment, (as set fourth in the
Financial Guaranty Insurance Policy). Specifically, the Financial Guaranty Insurance Policy does not cover:
I. payment on acceleration, as a result of a call for redemption (other than mandatory sinking fund
redemption) or as a result of any other advancement of maturity.
2. payment of any redemption, prepayment or acceleration premium; and
3. nonpayment of principal or interest caused by the insolvency or negligence of any Trustee, Paying Agent
or Bond Registrar, if any.
If it becomes necessary to call upon the Financial Guaranty Insurance Policy, payment of principal requires surrender
of Bonds to the Insurance Trustee together with an appropriate instrument of assignment so as to permit ownership
of such Bonds to be registered in the name of Ambac Assurance to the extent ofthe payment under the Financial
Guaranty Insurance Policy. Payment of interest pursuant to the Financial Guaranty Insurance Policy requires proof
of Bondholder entitlement to interest payments and an appropriate assignment of the Bondholder's right to payment
to Ambac Assurance.
Upon payment of the insurance benefits, Ambac Assurance will become the owner of the Bond, appurtenant coupon,
if any, or ri~ht to payment of principal or interest on such Bond and will be fully subrogated to the surrendering
Bondholder s rights to payment.
The insurance provided by the Financial Guaranty Insurance Policy is not covered by the property/casualty insurance
security fund specified by the insurance laws of the State of New York.
AMBAC ASSURANCE CORPORATION
Ambac Assurance is a Wisconsin-domiciled stock insurance corporation regulated by the Office of the Commissioner
of Insurance of the State of Wisconsin, and is licensed to do business in 50 states, the District of Columbia, the
Territory of Guam, the Commonwealth of Puerto Rico and the U.S. Virgin Islands, with admitted assets of
aPRTOximately $10,015,000,000 (unaudited) and statutory capital of approximately $6,371,000,000 (unaudited) as
of December 31, 2006. Statutory capital consists of Ambac Assurance's policyholders' surplus and statuto2'
contingency reserve. Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody s
Investor Service and Fitch Ratings have each assigned a triple-A financial strength rating to Ambac Assurance.
Ambac Assurance has obtained a ruling from the Internal Revenue Service to the effect that the insuring of an
obligation by Ambac Assurance will not affect the treatment for federal income tax purposes of interest on such
obligation and that insurance proceeds representing maturing interest paid by Ambac Assurance under policy
provisions substantially identical to those contained in its Financial Guaranty Insurance Policy shall be treated for
federal income tax purposes in the same manner as if such payments were made by the Obligor of the Bonds.
Ambac Assurance makes no representation regarding the Bonds or the advisability of investing in the Bonds and
makes no representation regardmg, nor has it participated in the preparation of, the Official Statement other than the
information supplied by Ambac Assurance and presented under the heading "Appendix C".
AVAILABLE INFORMATION
The parent company of Ambac Assurance, Ambac Financial Group, Inc. (the "Com~any"), is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended (the 'Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with the Securities and Exchan*e
Commission (the "SEC"). These reports, proxy statements and other information can be read and copied atthe SEC s
public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call tile SEC at 1-800-
SEC-0330 for further information on the public reference room. The SEC maintains an internet site at
http://www.sec.gov that contains reports, proxy and information statements and other information regarding
companies that file electronically with the SEC, including the Company. These reports, proxy statements and other
information can also be read atthe offices of the New York Stock Exchange, Inc., at 20 Broad Street, New York, New
York 10005.
Copies of Ambac Assurance's financial statements prepared in accordance with statutory accounting standards are
available from Ambac Assurance. The address of Ambac Assurance's administrative offices and its telephone number
are One State Street Plaza, 19th Floor, New York, New York, 10004 and (212) 668-0340.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document filed by the Company with the SEC (File No. I -I 0777) is incorporated by reference in this
Official Statement:
The Company's Annual Report of Form 10-K for the fiscal year ended December 31, 2006 and filed on
March 1,2007.
All documents subsequently filed by the Company pursuant to the requirements of the Exchange Act after the dateiof this Official Statement will be available for inspection in the same manner as described above in "AVAILABLE
INFORMA nON".
Ambac
Ambac Assurance Corporation
One State Street Plaza. 15th Floor
New York. New York 10004
Telephone: (212) 668-0340
Financial Guaranty Insurance Policy
Obligor:
Policy Number:
Obligattons:
Premium:
Ambac Assurance Corporation (Ambac). a Wisconsin stock insurance corporation, in consideration of the p
premium and subject to the terms of this Policy, hereby agrees to pay to The Bank of New York, as trustee, or its u essor (the
"Insurance Trustee"), for the benefit of the Holders, that portion of the principal of and interest on the above-describe 0 igattons
(the "Obligations") which shall become Due for Payment but shall be unpaid by reason of Nonpayment b e Obliga
Ambac will make such payments to the Insurance Trustee within one (1) business day following wri en t ~
Nonpayment. Upon a Holder's presentation and surrender to the Insurance Trustee of such unpa! gati
uncanceled and 1n bearer form and free of any adverse claim, the Insurance Trustee wtll d to the
principal and interest which is then Due for Payment but is unpaid. Upon such disburse bac
the surrendered Obligations and/or coupons and shall be fully subrogated to all of th Ho e Jig
In cases where the Obligations are issued in registered form, the Insurance Trustee 01 er only upon
presentation and surrender to the Insurance Trustee of the unpaid Obligation, un v claim, together
with an instrument of assignment, in form satisfactory to Ambac and nsurance the Holder or such
Holder's duly authorized representative, so as to permit ownership of s h aUon i name of Ambac or its
nominee. The Insurance Trustee shall disburse interest to a er a cd n 0 y upon presentation to the
Insurance Trustee of proof that the claimant is the person enutI 0 he p toe Obligation and delivery to the
Insurance Trustee of an instrument of assignment, in form satisfac 0 nsurance Trustee, duly executed by the
Holder or such Holder's duly authortzed representa rrin t under such Obligation to receive the
interest in respect of which the insurance disburs was de. e subrogated to all of the Holders' lights to
payment on registered Obligations to the extent 0 y insurance disbu made.
In the event that a trustee or paying noU that any payment of principal of or interest on an
Obligation which has become Due fa t a Holder by or on behalf of the Obligor has been deemed a
preferential transfer and theretofo r vered f nt to the United States Bankruptcy Code in accordance with
a final. nonappealable order of a u of co Holder will be entitled to payment from Ambac to the extent
of such recovery if sufficie nds
As used herein, the 0 er than (i) the Obligor or (ii) any person whose obligations constitute the
underlying secu ations who, at the time of Nonpayment, is the owner of an Obligation or of
a coupon relating ein, "Due for Payment", when referring to the principal of Obligations, is when
the sch tu e mandata emption date for the application of a required sinking fund installment has been
reach not fer any earlier date on which payment is due by reason of call for redemption (other than by application
of r red sinking fu ta1lments), acceleration or other advancement of maturity; and. when referring to interest on the
Db g tions e e h uled date for payment of interest has been reached, As used herein, "Nonpayment" means the failure
of tie ro d sufficient funds to the trustee or paying agent for payment in full of all principal of and interest
on the igations ch are Due for Payment.
c elable. The premium on this Policy is not refundable for any reason, including payment of the Obligations
prtor to This Policy does not insure against loss of any prepayment or other acceleration payment which at any time
may become due in respect of any Obligation, other than at the sole option of Ambac, nor against any rtsk other than Nonpayment.
In witness whereof, Ambac has caused this Policy to be affixed With a facsimile of its corporate seal and to be signed by its duly
authorized officers. in facsimile to become effective as its ortginal seal and signatures and binding upon Ambac by Virtue of the
countersignature of its duly authorized representative.
fJj .EL
President
.....,.....
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SecretaI)'
Effective Date:
Authorized Representative
~
Authortied Officer of Insurance Trustee
THE BANK OF NEW YORK acknowledges that It has agreed
to perform the duties of Insurance Trustee under this Policy.
Form No.: 2B-0012 (1101)
A-
-
Ambac
Ambac Assurance Corporation
One State Street Plaza,
New York, New York 10004
Telephone: (212) 668-0340
Endorsement
Policy [()r:
Attached to and forming part of Policy No.:
up
ter, 'Waive or extend any of the terms, conditions, provisions, agreements
other than as above stated.
The insurance provided by this Policy is not covered
fund specified by the insurance laws of the State N
J Ambac has caused this Endorsement to be affixed with a facsimile of its corpofacc seal and to
ized officers in facsimile to become effective as its original seal and signatures and binding
e countersignature of its duly authorized representative.
Ambou: Auuranc:e Corporation
{.Jj ~
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I!! SEAL \.~
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President
Secretary
Authorized Representative
r"orm No: 28-0004 (J197)
No. 4R-I $979,0~0
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
BOND ANTICIPATION NOTE FOR VARIOUS PURPOSES-2001
The Town of Southold, in the County of Suffolk. a municipal corporation of the State of New
York, hereby acknowledges itself indebted and for value received promises to pay to the bearer of this Note, or if it be
registered, to the registered holder, the sum of NINE HUNDRED SEVENTY-NINE THOUSAND DOLLARS
($979,000) on the 10th day of May, 2002, together with interest thereon from the date hereof at the rate of three and
twenty-five hundredths per centum (3.25%) per annum, payableat maturity. Both principal of and interest onthis
Note will be paid in lawful money of the United States of America, at The Bridgehampton National Bank. Southold.
New York.
At the request of the holder, the Town Clerk shall canvert this Note into a registered Notu by
registering it in the name of the holder in the books of the Town kept in the office of such Town Clerk and endorsing
a certificate of such registration hereon, after which both principal of and interest on this Note shall be payable only to
the registered holder, his legal representatives, successors or transferees. This Note shall then be transferable only
upon presentation to such Town Clerk with a writteu transtkr of title and such Town Clerk shall thereupon register this
Note th the name of the transferee in his books and shall endorse a certificate of such registration hereon. Such
transfer shall be dated, and signed by the registered holder, or his legal representatives, and it shall be duly
acknowledged or proved, or in the alternative the signature thereto shall be certified as to its genuineness by an officer
of a bank or trust company located and authorized to do business in this State.
This Note is the only Note of tm authorized co~nbined issue, the aggregate principal amount of
which is $979,000.
This Note is issued pursuant to the provisions of the Local Finance Law. constituting Chapter 33-a
of the Consolidated Laws of the State of New York. ten bond resolutions duly adopted by the Town Board on their
respective dates, authorizing various purposes in and for the Term. and the Certificate of Determination executed by
the Supervisor on May ! 1. 2001.
This Note has been designated by the Town as a qualified tux-exempt obligation pursuant to the
provisions of Section 265 of the Internal Revenue Code of 1986. as mnended.
The faith and credit of such Town of Southold are hereby irrevocably pledged for the punctual
payment of the principal of and interest on this Note according to its terms. It is hereby certified and recited that all
conditions, acts and things required by the Constitution and statutes of the State of New York to exist, to have
happened and to have been performed precedent to and in the issuance of this Note. exist, have happened and have
been performed, and that this Note, together with all other indebtedness of such Town of Southold. is within every
debt and other limit proscribed by the Constitution and laws of such State.
IN WITNESS WHEREOF, the Town of Southold has caused this Note to be signed by its
Supervisor, and its corporate seal (or a facsimile thereo0 to be affixed, impressed, imprinted, engraved, or otherwise
reproduced hereon and attested by its Town Clerk and this Note to be dated as of the llth da}' of May, 2001.
TOWN OF SOUTHOLD
(SEAL)
ATrEST:
~wn Clerl~
Supervisor
Cl 7 , c. D O W
PADS
2066
REGISTRATION CERTIFICATE
It is hereby certified that the within Note has been registered as follows:
Date of Registration Name of Registered Registered by
Holder
CERTIFICATE OF DETERMINATION BY THE SUPERVISOR
RELATIVE TO AUTHORIZATION, SALE, ISSUkNCE, FORM
i%ND CONTENTS OF THE $979,000 BOND ANTICIPATION
NOTE FOR VARIOUS PURPOSES-2001 OF THE TOWN OF
SOUTHOLD, NEW YORK.
I, Jean W. Cochran, Supervisor of the Town of Southold,
New York (herein called the "Town"), HEREBY CERTIFY that pursuant
to the powers and duties delegated to me as the chief fiscal
officer of the Town, by the Town Board of the Town, pursuant to
the bond resolutions duly adopted and as referred to in
paragraphs 1 to t0, inclusive, hereof, and subject to the
limitations prescribed in said bond resolutions, I have made the
following determinations:
1. A bond anticipation note of the Town in the
principal amount of $28,000 shall be issued to renew, in part,
the $60,000 bond anticipation note dated May 12, 2000, maturing
May 11, 2001, and heretofore issued in anticipation of the sale
of the serial bonds authorized pursuant to the bond resolution
entitled:
"Bond Resolution of the Town of Southold, New
York, adopted February 4, 1997, authorizing the
acquisition of a Vacall drain cleaner for use by
the Town Highway Department; stating the estimated
maximum cost thereof is $175,000; appropriating
said amount therefor, including the amount of
$15,000 to be received as the trade-in allowance
on the drain cleaner now owned by the Town and
applied towards the cost of such vacall drain
cleaner, and authorizing the issuance of $160,000
serial bonds of said Town to finance the balance
of said appropriation,"
duly adopted by the Town Board on the date therein referred to,
and the Certificate of Determination executed by the Supervisor
on May 12, 2000, the redemption of said $60,000 bond anticipation
note having been heretofore provided to the extent of $32,000
from a source other than the proceeds of serial bonds.
2. A bond anticipation note of the Town in the
principal amount of $26,000 shall be issued to renew, in part,
the $66,000 bond anticipation note dated May 12, 2000, maturing
May 11, 2001, and heretofore issued in anticipation of the sale
of the serial bonds authorized pursuant to the bond resolution
entitled:
368531.1 015558 CERT
"Bond Resolution of the Town of Southold, New
York, adopted October 28, 1997, appropriating the
amount of $200,000 for the increase and
improvement of facilities of the Southold Solid
Waste Management D±strict, in said Town, and
authorizing the issuance of $200,000 serial bonds
of said Town to finance said appropriation,"
duly adopted by the Town Board on the date therein referred to,
and the Certificate of Determination executed by the Supervisor
on May 12, 2000, the redemption of said $66,000 bond anticipation
note having been heretofore provided to the extent of $40,000
from a source other than the proceeds of serial bonds.
3. A bond anticipation note of the Town in the
principal amount of $15,000 shall be issued to renew, in part,
the $35,000 bond anticipation note dated May 12, 2000, maturing
May 11, 2001, and heretofore issued in anticipation of the sale
of the serial bonds authorized pursuant to the bond resolution
entitled:
"Bond Resolution of the Town of Southold, New York,
adopted January 20, 1998, authorizing the purchase of a
garbage truck for use by the Department of Public
Works; stating the estimated maximum cost thereof is
$90,000; appropriating said amount therefor,
authorizing the amount of at least $2,000 expected to
be received as the trade-in allowance on the garbage
truck now owned by the Town to be applied towards the
cost of such new garbage truck and authorizing the
issuance of not to exceed $88,000 serial bonds of said
Town to finance the balance of said appropriation,"
duly adopted by the Town Board on the date therein referred to,
and the Certificate of Determination executed by the Supervisor
on May 12, 2000, the redemption of said $35,000 bond anticipation
note having been heretofore provided to the extent of $20,000
from a source other than the proceeds of serial bonds.
4. A bond anticipation note of the Town in the
principal amount of $75,000 shall be issued to renew, in part,
the $100,000 bond anticipation note dated May 12, 2000, maturing
May 11, 2001, and heretofore issued in anticipation of the sale
of the serial bonds authorized pursuant to the bond resolution
entitled:
368531.1 015558 CERT
"Bond resolution of the Town of Southold, New York,
adopted January 19, 1999, authorizing the acquisition
of a street sweeper for use by the Town Highway
Department, stating the estimated maximum cost of
$130,000, appropriating said amount therefor, and
authorizing the issuance of $130,000 serial bonds of
said Town to finance said appropriation,"
duly adopted by the Town Board on the date therein referred to,
and the Certificate of Determination executed by the Supervisor
on May 12, 2000, the redemption of said $100,000 bond
anticipation note having been heretofore provided to the extent
of $25,000 from a source other than the proceeds of serial bonds.
5. A bond anticipation note of the Town in the
principal amount of $100,000 shall be issued to renew, in part,
the $135,000 bond anticipation note dated May 12, 2000, maturing
May 11, 2001, and heretofore issued in anticipation of the sale
of the serial bonds authorized pursuant to the bond resolution
entitled:
"Bond Resolution of the Town of Southold, New York,
adopted January 19, 1999, appropriating the amount of
$170,000 for the increase and improvement of facilities
of the Southold Solid Waste Management District, in
said Town, and authorizing the issuance of $170,000
serial bonds of said Town to finance said
appropriation,"
duly adopted by the Town Board on the date therein referred to,
and the Certificate of Determination executed by the Supervisor
on May 12, 2000, the redemption of said $135,000 bond
anticipation note having been heretofore provided to the extent
of $35,000 from a source other than the proceeds of serial bonds.
6. A bond anticipation note of the Town in the
principal amount of $45,000 shall be issued to renew, in part,
the $65,000 bond anticipation note dated May 12, 2000, maturing
May 11, 2001, and heretofore issued in anticipation of the sale
of the serial bonds authorized pursuant to the bond resolution
entitled:
"Bond resolution of the Town of Southold, New York,
adopted February 2, 1999, authorizing the acquisition
of a payloader for use by the Town Highway Department,
stating the estimated maximum cost thereof is $100,000,
appropriating said amount therefor and authorizing the
issuance of not to exceed $100,000 serial bonds of said
Town to finance said appropriation,"
368531.! 0~$58 CERT
duly adopted by the Town Board on the date therein referred to,
and the Certificate of Determination executed by the Supervisor
on May 12, 2000, the redemption of said $65,000 bond anticipation
note having been heretofore provided to the extent of $20,000
from a source other than the proceeds of serial bonds.
7. A bond anticipation note of the Town in the
principal amount of $220,000 shall be issued to renew, in part,
the $275,000 bond anticipation note dated May 12, 2000, maturing
May 11, 2001, and heretofore issued in anticipation of the sale
of the serial bonds authorized pursuant to the bond resolution
entitled:
"Bond resolution of the Town of Southold, New York,
adopted September 28, 1999, authorizing the original
improvement and embellishment of a new public park and
recreational area on the land containing 13.85 acres,
more or less, on the west side of Peconic Lane,
heretofore acquired and now owned by and situate in,
said Town; stating the estimated maximum cost thereof
is $275,000 including preliminary costs and costs
incidental thereto and the financing thereof;
appropriating said amount therefor and authorizing the
issuance of $275,000 serial bonds of said Town to
finance said appropriation,"
duly adopted by the Town Board on the date therein referred to,
and the Certificate of Determination executed by the Supervisor
on May 12, 2000, the redemption of said $275,000 bond
anticipation note having been heretofore provided to the extent
of $55,000 from a source other than the proceeds of serial bonds.
8. A bond anticipation note of the Town in the
principal amount of $72,000 shall be issued to renew, in part,
the $90,000 bond anticipation note dated May 12, 2000, maturing
May 11, 2001, and heretofore issued in anticipation of the sale
of the serial bonds authorized pursuanE to the bond resolution
entitled:
"Bond Resolution of the Town of Southold, New York,
adopted December 21, 1999, authorizing the construction
of a salt storage building in the Highway Yard, in
Peconic, in said Town, for use by the Town Highway
Department, stating the estimated maximum cost thereof
is $90,000, appropriating said amount therefor and
authorizing the issuance of $90,000 serial bonds to
finance said appropriation,"
36853L1 015558 CERT
duly adopted by the Town Board on the date therein referred to,
and the Certificate of Determination executed by the Supervisor
on May 12, 2000, the redemption of said $90,000 bond anticipation
note having been heretofore provided to the extent of $18,000
from a source other than the proceeds of serial bonds.
9. A bond anticipation note of the Town in the
principal amount of $230,000 shall be issued in anticipation of
the sale of serial bonds authorized pursuant to the bond
resolution entitled:
"Bond Resolution of the Town of Southold, New York,
adopted March 27, 2001, authorizing the acquisition and
installation of a computer system network, including
hardware, software and appurtenant equipment,
machinery, apparatus and furnishings, in the Town
Clerk's office at the estimated maximum cost of
$184,000 and the Tax Receiver's Office at the estimated
maximum cost of $38,000; stating the estimated total
cost thereof, including preliminary costs and costs
incidental thereto in the amount of $8,000, is
$230,000; appropriating said amount therefor and
authorizing the issuance of $230,000 serial bonds of
said Town to finance the said appropriation,"
duly adopted by the Town Board on the date therein referred to.
10. A bond anticipation note of the Town in the
principal amount of $168,000 shall be issued in anticipation of
the sale of serial bonds authorized pursuant to the bond
resolution entitled:
"Bond Resolution of the Town of Southold, New York,
adopted August 29, 2000, authorizing the construction
of improvements at the Down's Farm Preserve Park at
Fort Corchaug, in Cutchogue, in said Town, stating the
estimated maximum cost thereof is $210,000,
appropriating said amount therefor and authorizing the
issuance of $210,000 serial bonds to finance said
appropriation,"
duly adopted by the Town Board on the date therein referred to.
note,
said
said
11. Said $28,000 note, said $26,000 note, said $15,000
said $75,000 note, said $100,000 note, said $45,000 note,
$220,000 note, said $72,000 note, said $230,000 note and
$168,000 shall be combined for the purpose of sale into a
368531.1 015558 CERT
single note issue in the aggregate principal amount of $979,000
(hereinafter referred to as the "Note").
12. The terms, form and details of said Note shall be
as follows:
Amount and Title:
$979,000 Bond Anticipation Note for
Various Purposes-2001
Dated: May 11, 2001
Matures: May 10, 2002
Number and
Denomination: No. 4R-l, at $979,000
Interest Rate
per annum:
3.25%
Form of Note:
Substantially in accordance with
form prescribed by Schedule B, 2 of
the Local Finance Law of the State
of New York.
13. The amount of bond anticipation notes originally
issued in anticipation of the issuance of serial bonds authorized
pursuant to the resolutions referred to in paragraphs 1 to 10,
inclusive, hereof, including the Note, is (1) $156,000, (2)
$200,000, (3) $55,000, (4) $130,000, (5) $170,000, (6) $100,000,
(7) $275,000, (8) $90,000, (9) $230,000 and (10) $168,000
respectively, and the amount of bond anticipation notes which
will be outstanding after the issuance of the Note, including
said Note, will be (1) $28,000 (2) $26,000, (3) $15,000, (4)
$75,000 (5) $100,000, (6) $45,000, (7) $220,000 and (8) $72,000,
(9) $230,000 and (10) $168,000 respectively.
14. The serial bonds authorized pursuant to the bond
resolutions referred to in paragraphs 1, 3, 4, 6, 7, 8, 9 and 10
hereof are for improvements which are non-assessable. The serial
bonds authorized pursuant to the bond resolution referred to in
paragraphs 2 and 5 hereof are for improvements which are
assessable.
15. Pursuant to said powers and duties delegated to
me, I DO HEREBY AWARD kND SELL said Note to The Bridgehampton
National Bank, Southold, New York, for the purchase price of
$979,000, plus accrued interest, if any, from the date of said
Note to the date of delivery thereof, and I FURTHER DETERMINE
that said Note shall be payable as to both principal and interest
at The Bridgehampton National Bank, Southold, New York, and shall
bear interest at the rate of three and twenty-five hundredths per
centum (3.25%) per annum, payable at maturity.
368531.1 015558 CERT
16. Said Note shall be executed in the name of the
Town by its Supervisor and the corporate seal of the Town (or a
facsimile thereof) shall be affixed, impressed, imprinted,
engraved or otherwise reproduced thereon and attested by its Town
Clerk.
I HEREBY FURTHER CERTIFY that the powers and duties
delegated to me to issue and sell the Note hereinabove referred
to are in full force and effect and have not been modified,
amended or revoked.
IN WITNESS WHEREOF, I have hereunto set my hand thLs
llth day of May, 2001.
Supervisor
368531.1 015558 CERT
CLERK'S CERTIFICATE
I, Elizabeth A. Neville, Town Clerk of the Town of
Southold, in the County of Suffolk, New York, HEREBY CERTIFY that
I have compared the foregoing copy of the Certificate of
Determination executed by the Supervisor and the same is a true
and complete copy of the Certificate filed with said Town in my
office as Town Clerk on the llth day of May, 2001; and
I FURTHER CERTIFY that no resolution electing to
reassume any of the powers or duties mentioned in said
Certificate and delegated to the Supervisor by the resolutions
cited in said Certificate has been adopted by the Town Board of
the Town.
IN WITNESS WHEREOF,
I have hereunto set my hand and
affixed the corporate seal of said
Town this llth day of May, 2001.
(SEAL)
Town Clerk~
368531.1 015558 CERT
ARBITRAGE AND USE OF PROCEEDS CERTIFICATE
I, Jean W. Cochran, Supervisor of the Town of Southold
(the "Issuer"), in the County of Suffolk, State of New York,
HEREBY CERTIFY with respect to the Issuer's $979,000 Bond
Anticipation Note for Various Purposes-2001 (the "Note") dated
and issued on May 11, 2001, as follows:
Unless the context clearly requires otherwise, all
capitalized terms not otherwise defined herein shall have the
meanings set forth below or in the Resolutions, the Code or the
Regulations (each as defined below):
ARTICLE I
General
1.1. Authoritv of Siqnatory. I am an officer of the
Issuer charged with the responsibility for the execution,
delivery, and issuance of the Note and am acting for and on
behalf of the Issuer in signing this certificate.
1.2. Purpose of Certificate. This certificate is made
for the purpose of establishing evidence of the expectations of
the Issuer as of the date hereof as to future events regarding
the amount and use of proceeds of the Note. It is intended and
may be relied upon for purposes of Sections 103 and 148 of the
Internal Revenue Code of 1986, as amended (the "Code"), and as a
certification described in Section 1.148-2(b) (2) of the Treasury
Regulations (the "Regulations"). This certificate is executed
and delivered as part of the record of proceedings in connection
with the issuance of the Note. The provisions of this
certificate constitute a contractual obligation of the Issuer in
consideration for the purchase of and payment for the Note by
th7e purchaser(s) thereof.
1.3. Reasonable Expectations. This certificate sets
forth the facts, estimates and circumstances now in existence
which form the basis for the Issuer's expectation that the
proceeds of the Note will not be used in a manner that would
cause the Note to be an arbitrage bond under Section 148 of the
Code or a private activity bond under Sections 103 and 141 of the
Code. To the best of my knowledge and belief, such expectation
is reasonable and there are no other facts, estimates or
circumstances that would materially change that expectation.
368531.1 015558 CERT
1.4. Composite Issue. No other governmental
obligations have been sold fewer than 15 days prior to, or will
be sold fewer than 15 days after, the sale date of the Note.
1.5 No Federal Guarantee. The Issuer represents and
covenants that, except for the gross proceeds of the Note which
are: (a) invested during the temporary period referred to in
Article III, (b) held in any refunding escrow or (c) invested in
obligations of the United States Treasury or in obligations
issued pursuant to Section 2lB(d} (3) of the Federal Home Loan
Bank Act, as amended by Section 511(a) of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, or any
successor provision to Section 2lB(d) (3) of the Federal Home Loan
Bank Act, as amended:
(i)
No portion of the payment of principal or interest
with respect to the Note is or will be guaranteed
directly or indirectly by the United States or any
agency or instrumentality thereof (herein
"federally guaranteed"); and
(ii)
No portion of the gross proceeds of the Note in
excess of five percent of such gross proceeds is
or will be (A) used in making loans the payment of
principal or interest with respect to which is to
be federally guaranteed, or (B) invested directly
or indirectly in federally insured deposits or
accounts.
1.6. Tax Representation. The Issuer expects to be able
to and will comply with all the procedures and provisions set
forth herein, and will do and perform all acts and things
necessary and desirable within its reasonable control in order to
assure that interest paid on the Note shall be excluded from
gross income of the owners thereof for the purpose of federal
income taxation.
1.7. Additional Information. The Issuer will provide
such other information as may be required to assure the exclusion
from gross income of interest on the Note for federal income
taxation purposes.
1.8. Non-Purpose Investments. Not more than 50% of the
proceeds of the Note are being invested in investments not
acquired to carry out the governmental purposes of the issue at a
guaranteed yield and having a term of 4 years or more.
1.9 IRS Information Reportinq. The Issuer will make a
timely filing of the appropriate IRS Form 8038-G or 8038-GC.
368531.1 015558 CERT
ARTICLE II
Use of Project and Proceeds
2.1. Authorization. (a) The Note is authorized to be
issued pursuant to applicable provisions of the laws of the State
of New York and ten bond resolutions adopted by the Town Board on
their respective dates (the "Resolutions"), as referred to in the
Certificate of Determination executed by the Supervisor on May
11, 2001 (the "Certificate").
(b) For purposes of this Article II the term
"proceeds" means the net amount (after payment of all costs and
expenses associated with issuing the Note) received by the Issuer
from the sale of the Note, excluding accrued interest.
2.2.
provide funds
(collectively,
Resolutions.
Purpose of Issue. The Note is being issued to
for various purposes in and for the Town
"the Project"), as further described in the
2.3. Use of Proceeds. A portion of the proceeds of
sale of the Notes in the amount of $581,000 (the "Current
Refunding Note") will be used, together with other available
funds in the amount of $245,000, to redeem a prior issue of bond
anticipation notes which mature on May 11, 2001, in the principal
amount of $826,000 (the "Prior Issue"), heretofore issued to
finance the Project. The balance of the proceeds of sale of the
Notes in the amount of $398,000 (the "New Money Note") will be
used to provide original funds for the Project as further
described in the Resolutions.
2.4. Ownership/Lease/Sal~. The Project will be owned
by the Issuer or another state or local governmental unit and
will not be leased to any person who is not a state or local
governmental unit. It will not (except to the extent that any of
the projects financed involve grants) be sold or otherwise
disposed of, in whole or in part, except for incidental sales of
surplus items the proceeds of which will not constitute net
operating profits or net capital profits to the Issuer, prior to
the maturity date of the Notes.
2.5. Private Loans. Not more than the lesser of 5
percent or $5,000,000 of the proceeds of the Notes will be used
directly or indirectly to make loans to persons other than a
governmental unit.
368531.1 01~558 CERT
2.6. Private Use. The aggregate amount of proceeds of
the Notes used directly or indirectly in a trade or business
carried on by a person other than a state or local governmental
unit ("Private Use"), will not exceed 10% of such proceeds in the
event Ehat more than 10% of the principal or 10% of the interest
due on the Notes during the term thereof is, under the terms of
the Notes or any underlying arrangement, directly or indirectly,
secured by any interest in property used or to be used for a
Private Use or in payments in respect of property used or to be
used for a Private Use or is to be derived from payments, whether
or not to the Issuer, in respect of property or borrowed money
used or Eo be used for a Private Use.
2.7. Unrelated/Related Disproportionate Use. No more
than 5% of the proceeds of the Notes will be used directly or
indirectly in the trade or business of a person other than a
governmental unit that is unrelated or related and
disproportionate to the governmental use of the property being
financed, including any private loan financing described in
Section 2.5 which meets this test. For purposes of this
Arbitrage and Use of Proceeds Certificate, proceeds of the Notes
are allocable to an unrelated Private Use if such use is neither
directly nor operationally related to a governmental use and
proceeds of the Notes are allocable to a disproportionate related
Private Use to the extent that the proceeds of the Notes which
are to be used to finance property used by a nongovernmental
person in a trade or business which is related to the
governmental use of the property referred to in Section 2.6
above, exceeds the proceeds of the Notes which are to be used for
the governmental use to which such Private Use relates.
2.8. Other Private Uses Defined. For purposes of
Sections 2.6 and 2.7, a Private Use consists of any contract or
other arrangement including, without limitation, leases,
management contracts, guarantee contracts, take or pay contracts,
or put or pay contracts, which provides for a use of the Project
by a person or persons who are not State or local governments on
a basis different than the general public. Any management, or
operations contract or agreement which provides for
nongovernmental use will provide for reasonable compensation
which is in no part based on net profits and will satisfy the
provisions of (a), (b) or (c) below:
(a) for contracts which provide compensation for each
annual period based on a periodic fixed fee, a capitation
fee or combination thereof, (i) the contract has a term
(including renewal options) not exceeding five years; (ii)
the issuer may terminate the contract, without penalty, at
368531.1 015558 CERT
the end of any three year period, and (iii) at least 50% of
the compensation paid is on a periodic, fixed fee basis;
(b) for contracts entered into or materially modified
(other than pursuant to a renewal option) after March 15,
1993, which provide compensation based on a per unit fee or
a combination per unit and periodic fixed fee, (i) the
contract has a term (including renewal options) not
exceeding three years; (ii) the issuer may terminate such
contract (without penalty) at the end of the second year of
the term, and (iii) the amount of the per unit fee is
specified in the contract or oEherwise limited by the
qualified user or a third party;
(c) for contracts entered into or materially modified
(other than pursuant to a renewal option) after March 15,
1993, which provide compensation based on a percentage of
fees charged, (i) the contract has a term (including renewal
options) not exceeding two years, (ii) the issuer may
terminate the contract (without penalty) at the end of the
first year, and (iii) the service provider primarily
provides services to third parties or the contract involves
a facility during an initial start-up period;
(d) For purposes of this Section 2.8:
(i)
"capitation fee" means a fixed periodic amount
paid under a management contract or agreement for
each person for whom the service provider assumes
the responsibility to provide all needed services
for a specified period, provided the quantity and
type of services actually provided vary
substantially;
(ii)
"periodic fixed fee" means a stated dollar amount
for services rendered during a specified period of
time (i.e. SXX per month) which amount may
automatically increase according to a specified,
objective, external standard; and
(iii)
"per unit fee" means a stated dollar amount
for each unit of service provided (i.e. SXX
per medical procedure).
2.9. Pooled Loan Financinqs. To the extent the amount
of proceeds of the Notes to be used to make loans to any
borrowers (including loans referred to in Section 2.5 above and
loans to state or local governmental units) exceeds $5,000,000,
at least 95% of the net proceeds of the issue (as defined in
368531.1 015558 CERT
Section 150 of the Code but without including proceeds used to
finance costs of issuance or capitalized interest) that are to be
used to make loans, will have been used within 3 years of the
date hereof to make such loans. The payment of legal and
underwriting costs is not contingent and aE least 95% of the
reasonably expected legal and underwriting costs associated with
issuance will be paid within 180 days of the date hereof.
2.10. Output Facilities. No more than 5% of the
proceeds of the Notes are to be used with respect to any output
facility (other than a facility for the furnishing of water). No
more than the lesser of $5,000,000 or 5% of the proceeds of the
Notes are to be used (directly or indirectly) for the acquisition
of a nongovernmental output facility.
ARTICLE III
ArbitraGe/Rebate Exemption
proceeds
proceeds
3.1. Temporary Period-Refundinq. With respect to the
of the sale of the Current Refunding Note representing
allocable to the Prior Issue:
(a) Ail of the proceeds of the Prior Issue have been
expended, or any such proceeds which have not been expended
as of the date hereof, shall become transferred proceeds of
this issue. Such transferred proceeds may be invested
without restriction as to yield until three years after the
date of original issuance of the Prior Issue. If any
Eransferred proceeds remain unexpended after three years
after the date of original issuance of the Prior Issue, such
proceeds will be invested at a yield not in excess of the
yield on the Notes.
(b) The proceeds of the Notes will be used to refund
the Prior Issue within 90 days of the date hereof, and may
be invested during such time without restriction as to
yield.
3.2. TemporarV Period-New Money. With respect to the
New Money Note:
(a) The Issuer has entered into or will enter into
within six months from the date of this certificate, binding
commitment(s) for the acquisition, construction or
accomplishment of the Project cited in Section 2.2 hereof,
and the amount of such commitment(s) with respect to such
Project will or do exceed the amount equal to 5% of
368531.1 015558 CERT
$398,000, being the aggregate amount of obligations
currently issued for such Project.
(b) Such Project has been completed, or, if such
Project has not been completed, work on the acquisition,
construction or accomplishment of such Project will proceed
or is proceeding with due diligence ~o completion.
(c) It is reasonably expected that at least 85 percent
of the net sale proceeds of such New Money Note will be
expended within three years from the date of this
Certificate. No more than 50 percent of the proceeds of the
Notes will be invested in nonpurpose investments with a term
of four years or more.
3.3. Rebate. (a) Neither the Prior Issue nor the New
Money Note was or is subject to the rebate requirement imposed by
Section 148 of the Code because, with respect to each:
(i) the Issuer was or is a governmental unit with
general taxing powers;
(ii)
the Prior Issue/New Money Note did not or does not
constitute a "private activity bond" as that term
is defined in Section 141 of the Code;
(iii)
ninety-five percent or more of the net
proceeds of the sale of the Prior Issue/New
Money Note was or is to be used for local
governmental activities of the Issuer; and
(iv)
the Issuer (including all agencies,
instrumentalities and political subdivisions of
the Issuer) reasonably expected or expects that
the aggregate face amount of all tax-exempt bonds
issued by the Issuer during the calendar year in
which the Prior Issue was issued and the current
calendar year would not or will not exceed
$5,000,000. For purposes of such determination,
no tax-exempt obligation was or shall be taken
into account if it was or is a current refunding
obligation issued in the calendar year in which
the Prior Issue/New Money Note (as applicable) was
or is being issued which does not exceed the
outstanding (redeemed) principal amount of the
obligation to be refunded.
(b) The Current Refunding Note is not subject to the
rebate requirement imposed by Section 148 of the Code because all
368531.1 015558 CERT
of the Gross Proceeds of such Current Refunding Note will be
expended to pay the Prior Issue within 90 days of the date hereof
and will, therefore, qualify for'the six-month expenditure
exception to rebate.
3.4. No Excess Proceeds. The total proceeds of sale
of all bond anticipation notes issued to date for the Project do
not exceed the total cost of the Project.
3.5. Source of Repavment Funds. The Notes will be
paid from taxes and the proceeds of other obligations of the
Issuer issued to fund the Notes.
3.6. Debt Service Fund. The taxes used to pay
principal and interest on the Notes, whether or not deposited in
a debt service fund, will be expended within 13 months of the
date of deposit in such fund, or the date of their accumulation,
in the payment of debt service on the Notes. Any amounts
received from the investment of such deposit or accumulation will
be expended within one year of receipt. The debt service fund,
if any, will be used to achieve a proper matching of revenues and
debt service and will be depleted at least annually except for a
reasonable carryover amount will not exceed the greater of the
earnings on such fund for the immediately preceding year or one-
twelfth of the debt service on the Notes.
3.7. Sinkinq Funds. Except for the debt service fund
described herein the Issuer has not created or established, and
does not expect to create or establish, any sinking fund or other
similar fund which the Issuer reasonably expects to use to pay
principal or interest on the Notes.
ARTICLE IV
Bank Qualification
4.1. Desiqnation. The Notes are hereby designated as
"qualified tax-exempt obligations" pursuant to the provisions of
Section 265 of the Code.
(a) In making such designation it has been determined
with respect to the Current Refunding Note that:
(i) the Notes currently refund the Prior Issue;
(ii) the Prior Issue was designated as a "qualified
tax-exempt obligation";
(iii) the aggregate face amount of the Notes does not
exceed $10,000,000;
368531.! 015558 CERT
(iv) the Prior Issue had a weighted average maturity of
3 years or less;
(v)
the maturity date of the Notes, as measured from
the original date of issuance of the notes issued
pursuant to the Ordinance, in renewal of which
such Notes are being issued, does not exceed 30
years; and
(vi)
not more than $10,000,000 of obligations issued by
the Issuer during the calendar year in which the
Prior Issue was issued were designated by the
Issuer as "qualified tax-exempt obligations."
(b) In making such designation it has been determined
with respect to the New Money Note that:
the Issuer does not reasonably anticipate that the
amount of "qualified tax-exempt obligations" to be
issued by the Issuer during the current calendar
year will exceed $10,000,000; and
(ii)
the amount of "qualified tax-exempt obligations"
issued by the Issuer during the current calendar
year does not as of this date, and including this
issue, exceed $10,000,000.
IN WITNESS
WHEREOF,
I have hereunto set my hand and
affixed the corporate seal of the
Town of Southold this llth day of
May, 2001.
Supervisor
368531.1 015558 CERT
AFFIDAVIT AS TO NO CONFLICT OF INTEREST
STATE OF NEW YORK
COUNTY OF SUFFOLK
Elizabeth A. Neville, being duly sworn upon her oath
deposes and says:
1. I am the duly appointed, qualified and acting Town
Clerk of the Town of Southold, in the County of Suffolk, New York
(herein and in Schedule A annexed hereto called "Town");
2. That with respect to the contract of sale of the
Note of the Town described in the Certificate of Determination
executed by the Supervisor on the llth day of May, 2001 to the
financial institution indicated in such Certificate, I have made
a careful inquiry of each officer and employee of the Town having
the power or duty to (a) negotiate, prepare, authorize or approve
the contract or authorize or approve payment thereunder, (b)
audi~ bills or claims under the contract or (c) appoint an
officer or employee who has any of the powers or duties set forth
above, as to whether or not such officer or employee has an
interest (as defined pursuant to Article 18 of the General
Municipal Law) in such contract;
3. That upon information and belief, as a result of
such inquiry, no such officer or employee has any such interest
in said contract, unless otherwise noted in Schedule A annexed
hereto and by this reference made a part hereof.
Subscribed and sworn to before me
this llth day of May, 2001.
~o ~a~i c,/~S t a t e~o f ~e jyo r k
LYNDA M. BOHN
NOTARY PUBUC, State of
No. 01 B06020932
Oualmed In Suffolk Counll~
*term Expires Marc~
368531.1 015558 CERT
SCHEDULE A
1. , is a stockholder of the
purchaser, owning or controlling, directly or indirectly, less
than five per centum (5%) of the outstanding stock thereof but no
disclosure of such interest by said officer is required pursuant
to said Law.
2. , has an interest in the purchaser,
solely by reason of employment as an officer or employee thereof,
but the remuneration of such employment will not be directly
affected as a result of said contract and the duties of such
employment do not directly involve the procurement, preparation
or performance of any such part of such contract.
3. , has publicly disclosed the
nature and extent of such interest in writing to the governing
board of the Town. Such written disclosure has been made a part
of and set forth in the official record of proceedings of the
Town.
368531.1 015558 CERT
CERTIFICATES AS TO SIGNATURES, LITIGATION,
AND DELIVERY AND PAYMENT
WE, the undersigned officers of the Town of Southold,
in the County of Suffolk, a municipal corporation of the State of
New York and herein referred to as the "Town", HEREBY CERTIFY
that on or before May 11, 2001, we officially signed and properly
executed by manual signatures the $979,000 Bond ~knticipation Note
for Various Purposes-2001 (the "Note") of the Town, said Note to
be payable to bearer and otherwise described in Schedule A
annexed hereto and by this reference made a part hereof, and that
at the time of such signing and execution and on the date hereof
we were and are the duly chosen, qualified and acting officers of
the Town authorized to execute said Note and holding the offices
indicated by the respective titles set opposite our signatures
hereto for terms expiring on the dates set opposite such titles.
WE FURTHER CERTIFY that no litigation of any nature is
now pending or threatened restraining or enjoining the issuance
or delivery of said Note or the levy or collection of any taxes
to pay the interest on or principal of said Note, or in any
manner questioning the authority or proceedings for the issuance
of said Note or for the levy or collection of said taxes, or
relating to said Note or affecting the validity thereof or the
levy or collection of said taxes, that neither the corporate
existence or boundaries of the Town nor the title of any of the
present officers thereof to their respective offices is being
contested, and that no authority or proceedings for the issuance
of said Note has or have been repealed, revoked or rescinded.
WE FURTHER CERTIFY that the seal which is impressed
upon this certificate has been affixed, impressed, imprinted or
otherwise reproduced upon said Note and is the legally adopted,
proper and only official corporate seal of the Town.
~knd, I, Jean W. Cochran, Supervisor, HEREBY FURTHER
CERTIFY that on May 11, 2001, I delivered or caused the delivery
of said Note to The Bridgehampton National Bank, Southold, New
York, the purchaser thereof, and that at the time of such
delivery of said Note, I received from said purchaser the amount
hereinbelow stated, in full pa~ent for said Note, computed as
follows:
Price ............................... $979,000
Interest on said Note accrued to the
date of such delivery ............. 0
A-mount Received .....................
$979,000
368531.1 015558 CERT
IN WITNESS WHEREOF, we have hereunto set our hands and
said corporate seal has hereunto been affixed this llth day of
May, 2001.
Term of Office
Signature Expires Title
December 31, 2001
December 31, 2001
Supervisor
Town Clerk
(SEAL)
I HEREBY CERTIFY that the signatures of the officers of
the above-named Town, which appear above, are true and genuine
and that I know said officers and know them to hold the
respective offices set opposite their signatures.
(Ti~e)
of
The B~idgehampton National Bank
Main Road
Southeld, NY 11971
(Name of Bank)
368531.1 015558 CERT
ATTORNEY'S CERTIFICATE
I, Gregory F. Yakaboski, HEREBY CERTIFY that I am a
licensed attorney at law of the State of New York having offices
at Town Hall, 53095 Main Road, Southold, New York, and am the
duly chosen, qualified and acting Town Attorney of the Town of
Southold, in the County of Suffolk, a municipal corporation of
the State of New York and herein referred to as the "Town", that
no litigation of any nature is now pending or threatened
restraining or enjoining the issuance or delivery of the Note of
the Town, said Note to be payable to bearer and otherwise
described as set forth in Schedule A annexed hereto and by this
reference made a part hereof or the levy or collection of any
taxes to pay the interest on or principal of said Note, or in any
manner questioning the authority or proceedings for the issuance
of said Note or for the levy or collection of said taxes, or
relating to said Note or affecting the validity thereof or the
levy or collection of said taxes, that neither the corporate
existence or boundaries of the Town nor the title of any of the
present officers thereof to their respective offices is being
contested, and that no authority or proceedings for the issuance
of said Note has or have been repealed, revoked or rescinded.
IN WITNESS WHEREOF,
I have hereunto set my hand this
llt~~
~w' ~//Attorney
368531.1 0[5558 CERT
SCHEDULE A
Amount and Title:
Dated:
Mature:
Number and
Denomination:
Interest Rate
per annum:
$979,000 Bond Anticipation Note for Various
Purposes-2001
May 11, 2001
May 10, 2002
No. 4R-l, at $979,000
3.25~',
368531,1 015558 CERT