HomeMy WebLinkAbout2003TOWN OF SOUTHOLD
SINGLE AUDIT REPORTS
December 31,2003
AV
Albrecht, Viggiano,
Zureck & Company, P.C.
CErtifiEd Pul~lic Accou~/r,~zrs
TOWN OF SOUTHOLD
SINGLE AUDIT REPORTS
December 31,2003
FINANCIAL
SECTION
FINANCIAL SECTION
Independent Auditors' Report .................................................................................................................... 1-2
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion end Analysis ................................................................................... 3-11
IBASIC FINANCIAL STATEMENTS I
Govemment-Wide Financial Statements
Statement of Net Assets .........................................................................................................................
12
Statement of ActiviUes ............................................................................................................................. 13
Fund Financial Statements
Governmental Fund Financial Statements
Balance Sheet and Reconciliation of the Governmental Funds Balence Sheet to
The Statement of Net Assets .......................................................................................... 14-15
Statement of Revenues, F_xl~nditures, and Changes in Fund Balances and
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures,
And Changes in Fund Balances to the Statement of Activities ................................................ 16-17
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Assets ............................................................................................ 18
Notes to Financial Statements ................................................................................................................... 19-34
I
REQUIRED
SUPPLEMENTARY INFORMATION OTHER THAN MD&A I
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
General Fund ..............................................................................................................
Highway Fund ................................................................................................ .'...: .........
35
36
OTHER SUPPLEMENTARY INFORMATION
COMBINING FUND STATEMENTS:
Nenmajor Governmental Funds Combining Balance Sheet .............................................................................................
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ....................
37
38
DISCRETLY PRESENTED COMPONENT UNITS
Discretely Presented Component Units:
Combining Statement of Net Assets .......................................................................................................
Combining Statement of Activities ..........................................................................................................
39
4O
OTHER REPORTS
Schedule of Expenditures of Federal Awards ........................................................................................ 41
Note to Schedule of Expenditures of Federal Awards ............................................................................ 42
Report on Compliance and on Intemal Control Over Financial
Reporting Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards ..........................................................................
43
Report on Compliance with Requirements Applicable to each
Major Program and on Internal Control Over Compliance in
Accordance with OMB Circular A-133 ................................................................................................. 44-45
Schedule of Findings and Questioned Costa ......................................................................................... 46-47
ALBRECHT, VIGGIANO, ZURECK
& COMPANY, P.C.
INDEPENDENT AUDITORS' REPORT
Honorable Supervisor and Town Board
Town of Southold
Southold, New York
CERTIFIED PUBUC ACCOUNTANTS
25 SUFFOLK COURT
HAUPPAUGE, NY 11788
(631)4349500
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 Southoid, New York, as of December 31, 2003, 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
ara 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 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 financial
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 satisf~ ourselves as to those financial activities by other auditing procedures. Those
financial activities represent approximately 48% 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 biased on our audit and
the reports of other auditors, the financial statements referred to above present fairly, in ail material respects,
the financial position of the Town of Southoid, New York, as of December 31, 2003, and the results of its
operations for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
As described in Note A, the Town has implemented a new financial reporting model, as required by the provisions
of GASB Statement No. 34, Basic Financial Statements~and Management's Discussion and Analysis--for State
and Local Governments.
In accordance with Government Auditing Standards, we have also issued our report dated June 8, 2004, on
our consideration of the Town's internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in conjunction with this
report in considering the results of our audit.
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.
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Our audit was conducted for the purpose of forming opinions 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 and the schedule of
expenditures of federal awards 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 faidy presented in all material
respects in relation to the basic financial statements taken as a whole.
The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis
as required by the U.S. Office of Management and Budget Circular A-133, Audits of States and Local
Governments, and non-profit organizations, and is also not a required part of the basic financial statements of
the Town of Southold, New York.
Hauppauge, New York
June 8, 2004
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REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2003
The following is a discussion end analysis of the Town of Southold's financial performance, providing an overview
of the Town's financial activities for the year ended December 31, 2003. Use this section in conjunction with the
Town's basic financial statements.
GASB Statement No. 34 Basic Financial Statements - and Management's Discussion and Analysis - for State
and Local Governments, establishes new reporting requirements for state and local governments. The new
reporting requirements implemented for these statements include new information and restructure the
presentation of previous years. Consequently, for this 2003 implementation year, the presentation of
comparative data is not available or required. Comparative data will be available and presented for the 2004
report.
USING THIS ANNUAL REPORT
This annual report consists of a sedes of financial statements. The Statement of Net Assets and the
Statement of Activities (on pages 12-13) provide information about the activities of the Town as a whole and
present a Ionger-tarm view of the Town's finances. Fund financial statements start on page 14. 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
or agent for the benefit of those outside of the government.
Reporting 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, Uls 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 pdvata-sector companies. The Statement of Activities is significanfiy 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 liabilities~as one way to measure the Town's financial health,
or financial position. Over time, increases or decreases in the Town's net assets are one indicator of whether
its financial 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 Activities, 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; cultural 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 distdct and four park districts). Although legally separate, these
"component units" are important because the Town is financially accountable for them. Complete
financial statements of the individual component units can be obtained from their respective
administrative offices (Note A).
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2003
ReportinR the Town's Most Significant Funds
Fund Financial Statements
The fund financial statements begin on page 14 and provide detaitad 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 activfties.
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 govemmental fund statements provide a detailed short-term
view of the Town's general government operations and the basic services it provides. Governmental 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 desc~be the relationship (or differences) between
governmental activities (reported in the Statement of Net Assets and ~e Statement of Activities) and
governmental funds in a reconciliation that follows these fund financial statements.
The Town as Trustee
ReportinR the Town's Fiduciary Responsibilities
All of the Town's fiduciary activities are reported in a separate Statement of Fiduciary Net Assets on page 18.
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 ensudng that the assets reported in these funds
are used for their intended purposes.
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
Governmental Activities
as of December 31, 2003
Assets
Capital assets $ 76,948,071
Current and other assets 23,970,315
Total assets 100,918,386
Liabilities
Long-term liabilities 14,461,033
Other liabilities 17,769,928
Total liabilities 32,230,961
Net assets
Invested in capital assets,
net of related debt 69,872,715
U nrestdcted (1,185,290)
Total net assets $ 68,687,425
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2003
THE TOWN AS A WHOLE (continued)
The Town's combined net assets changed from the prior year, increasing by $6.2 million from $62.5 million to
$68.7 million. The Town's net assets include $69.9 million invested in capital assets and $1.2 million in
unrestricted deficit.
The deficit balance of unrestricted net assets does not necessarily indicate stress. The deficit balance of
unrestricted net assets arose primarily because of certain factom. The Town, in an effort to maintain present
tax rates, used up cash reserves and borrowed funds as needed. In addition, long-term liabilities which
include compensated absences, early retirement incentives, claims and judgments, the landfill closure'and
post closure monitoring will be funded through future budgetary appropriations when they become payable in
future periods.
Changes in Net Assets
Governmental Activities
for the year ended December 31,2003
Program Revenues
Charges for services
Operating grants and contributions
Capital grants and contributions
General Revenues Real property taxes
Other real property tax items
Non-property tax items
Interest earnings
State aid - unrestricted
Other
Total Revenues
Program Expenses
General govemment support
Public safety
Public health
Transportation
Economic assistance end opportunity
Culture and recreation
Home and community services
Interest on debt
Total Expenses
Increase in Net Assets
$ 7,827,147
760,118
2,406,727
10,993,992
18,958,999
58,613
518,484
205,719
2,138,006
317,347
22,197,168
33,191,160
5,218,482
9,652,286
41,639
6,777,032
1,124,806
227,789
3,470,584
508,605
27,021,223
$ 6,169,937
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
THE TOWN AS A WHOLE (continued)
Net Cost of Services
Governmental Activities
for the year ended December 31, 2003
December 31, 2003
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Cost Net Cost
of Services of Services
5,218,482 $ 4,924,406
9,652,286 8,947,863
41,639 32,829
6,777,032 6,226,842
1,124,806 762,537
227,789 50,799
3,470,584 (5,426,650)
508,605 508,605
$ 27,021,223 $ 16,027,231
The cost of all governmental activities this year was $27.0 million. The net cost of these services, however,
after subsidized by program revenues including charges for services and program grants, was $16.0 million.
The Town's change in net assets after general revenues of $22.2 million was $6.2 million.
Since this is the first year to report all activities on the accrual basis of accounting, a comparison to the prior
year is not possible (with the exception of the above comparison). However, in futura years, this section will
explain the differences between the current and prior year assets, liabilities, and changes in net assets.
Net Cost of Services
Governmental Activities
for the year ended December 31, 2003
Total Cost Program
of Services Revenues
General government support $ 5,218,482
Public safety 9,652,286
Public health 41,639
Transportation 6,777,032
Economic assistance and opportunity 1,124,806
Culture and recreation 227,789
Home and community services 3,470,584
Interest on debt 508,605
· $ 294,076
704,423
8,810
550,190
362,269
176,990
8,897,234
27,021,223 $ 10,993,992
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2003
THE TOWN AS A WHOLE {continued)
$12.O00,OOO :
$10,OOO,OOO
· Program Revenues
24% ~
Revenue by Source
Governmental Activities
For the year ended December 31,2003
Real property taxes $ 18,958,999
State aid - unresticted 2,138,006
Charges for services 7,827,147
Other general revenues 1,100,163
Operating grants and contributions 760,118
Capital grants and contributions 2,406,727
$ 33,191,160
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2003
THE TOWN AS A WHOLE (continued)
THE TOWN'S FUNDS
The general fund balance has increased by $1.5 million due primarily to actual revenues in excess of those
amounts budgeted. Mortgage tax received this year was up from the prior by $551 thousand. The refuse and
garbage fund balance increased by $121 thousand to a fund balance of $224 thousand.
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, 2003, and the amount of change and
percentage of total in relation to the prior year.
Increase %
2003 2002 (Decrease) Change
I~I-VENUE,~
Real property taxes
Other real property tax items
Non-property tax items
Departmental income
Intargovemmental charges
Use of money and property
Licenses and permits
Fines and forfeitures
Sale of property and compensation for loss
Miscellaneous local sources
Interfund revenues
State aid
Federal aid
Total Govemmental Fund Revenues
EXPENDITURES
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Employee benefits
Capital
Debt service principal and interest
Total Govemmental Fund Expenditures
$ 18,958,999 $ 17,131,570 $ 1,827,429 6.3%
58,613 98,624 (40,011) -0.1%
518,484 514,358 4,126 0.0%
2,654,516 3,363,639 (709,123) -2.4%
4,823,458 4,077,171 746,287 2.6%
320,963 472,358 (151,395) -0.5%
336,331 360,509 (24,178) -0.1%
156,084 102,032 54,052 0.2%
121,376 165,117 (43,741) -0.2%
211,240 159,982 51,258 0.2%
4,852 (4,852) 0.0%
4,226,230 2,275,101 1,951,129 6.7%
872,572 251,907 620,665 2.1%
$ 33,258,866 $ 28,977,220 $ 4,281,646 14.8%
$ 3,886,438$ 3,603,925$ 282,5130.9%
6,783,111 6,682,130 100,981 0.3%
39,396 39,449 (53) 0.0%
3,131,876 2,892,447 - . 239,429 0.7%
833,501 730,553 102,948 0.3%
3,547,970 3,289,527 258,443 0.8%
228,578 350,121 (121,543) -0.4%
4,468,238 4,183,297 284,941 0.9%
5,801,986 9,059,320 (3,258,254) -9.8%
1,171,737 2,263,306 (1,091,569) -3.3%
$ 29,891,911 $ 33,094,075 $ (3,202,164)-9.6%
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.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2003
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
As of December 31, 2003 the Town had $76.9 million in net capital assets including land, buildings,
improvements, machinery and equipment, and infrastructure. The Town's component units had $9.7 million in
net capital assets including lend, buildings, improvements, machinery and equipment, and sewer mains.
Capital Assets at December 31,
Primary government Land
Construction in progress
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets
Less accumulated depreciation
Pdmary government - Total net capital assets
Component units
Land
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets
Less accumulated depreciation
Component units - Total net capital assets
2003 2002
31,253,329 $ 27,778,470
3,066,170
4,352,714 4,102,824
10,585,564 9,080,465
8,118,119 7,650,557
68,977,685 67,938,222
126,353,581 116,550,538
49,405,510 45,905,974
$ 76,948,071 $ 70,644,564
2,213,759 $ 2,213,759
3,361,906 3,341,126
3,916,748 3,521,031
2,959,367 2,922,606
2,121,386 2,121,386
14,573,166 14,119,908
4,837,344 4,453,467
$ 9,735,822 $ 9,666,441
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2003
CAPITAL ASSET AND DEBT ADMINISTRATION (continued)
Capital 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 bends, which, at times, are preceded by issuance of bond anticipation notes for various periods of
time depending on the probabta usefulness of the p~.rpose of expenditure. The following sets forth a summary
of the Town's capital program, as originally adopted for 2004.
(Dollam in thousands):
Equipment 2004 2005
General Fund $ 617 $ 16
Highway Fund 400 310
Special Districts 575
Total Equipment $1 ~592 $ 326
Improvements
General Fund $1,077
Special Districts 2~110
Total Improvements $3~187
Total Program $4,77~ $ 32,,,~,,==~6
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 A2. credit rating from Moody's investment rating has remained unchanged.
Debt Limit - The Town has the power to contract indebtedness for any Town purpose so long as the principal
amount thereof, subject to certain limited exceptions, shall not exceed seven percent of the average full
valuation of taxable real estate of the Town, and subject to certain enumerated exclusions and deductions
such as water and certain sewer facilities and cash or appropriations for current debt service.
The constitutional method for determining full valuation is calculated by taking the assessed valuation of
taxable real estate as shown upon the latest completed assessment roll and dividing the same by the
equalization rate as determined by the State Board of Equalization and Assessment. The State Legislature is
required to prescribe the manner by which such ratio shall be determined. Average full valuation is
determined by taking the sum of the full valuation of the last completed assessment roll and the four preceding
assessment rolls and dividing such sum by five. Percentage of debt contracting power exhausted at December
31, 2003 was 2.05%.
At December 31, 2003, the Town had approximately $6.9 million in long term general obligation bonds
outstanding, of which $6.9 million was for general Town purposes. Also outstanding at year-end were bond
anticipation notes in the amount of $14.8 million of which $10.6 million was for general Town purposes.
Additional information on the Town's debt activity can be found in Note C.4 to the financial statements.
-10-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2003
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
Property Tax
The Town has adopted a budget for the 2003 fiscal year which factors in inflation and other adjustments to
revenues and expenditures as well as prior year positive and negative fund balances. The 2003 budget
includes an overall increase in real property tax revenues from the prior year of approximately 10.68% for the
general Town governmental activities.
State Aid and Local Assistance
The Town receives financial assistance from New York State and from Suffolk County. During 2003, financial
assistance included state aid - mortgage tax of $2.1 million; state aid - per capita $72.5 thousand and County
local government assistance of $160.9 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 2004 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 2003. When establishing the 2003 budget, the Town had anticipated these excess
payments. However, due to a change in the billing cycle, the State was able to hold the contribution rates to
those the State had originally anticipated. The Town subsequently re-appropriated that budgeted but
unexpended excess payment in the 2004 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
vaded 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.
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BASIC FINANCIAL
STATEMENTS
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF NET ASSETS
December 31, 2003
ASSETS
Current Assets:
Cash and investments
Accounts receivable, net of allowances
Due from fiduciary funds
Due from other governments
Due from primary govemment
State and federal aid receivables
Prepaid charges
Inventory of material and supplies
Other assets
Total Current Assets
Non-Current Assets:
Non-depreciable capital assets
Depreciable capital assets, net of depreciation
Total Non-Current Assets
Primary
Governmental Component
Activities Units
$ 21,624,970 $ 3,245,231
129,301 4,254
498,377
725,051
753,091
228,229
1,296
10,000
464,236
481,075
16,691
23,970,315 4,211,487
34,319,499 2,213,759
42,628,572 7,522,063
76,948,071 9,735,822
100,918,386 13,947,309
Total Assets
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities
Accrued interest payable
Bond anticipation notes payable
Due to other governments
Due to f'~luciary funds
Unearned revenue
Non-current liabilities due within one year
General obligation bonds payable
Due to Employees Retirement System
Compensated absences
Total Current Liabilities
Non-Current Liabilities:
General obligation bonds payable
Due to Employees Retirement System
Compensated absences
Claims and judgements payable
Estimated liability for landfill closure
and postclosure care costs
Total Non-Current Liabilities
2,021,418 868,938
134,271 12,041
10,576,000 4,192,302
447
71,020
4,268,259 307,895
642,431 32,569
38,742
17,787
17,769,928 5,414,192
6,242,429 32,571
135,834
5,165,082
1,000,000
1,917,688
14,461,033 32,571
32,230,961 5,446,763
69,872,715 7,206,528
(1,185,290) 1,294,018
Total Liabilities
NET ASSETS
Investment in capital assets, net of related debt
Unrestricted
Total Net Assets $ 68,687,425 $ 8,500,546
See notes to the financial statements
-12-
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF ACTIVITIES
Year ended December 31, 2003
Function/Program
PRIMARY GOVERNMENT
Govemment Activities:
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Primary Government
COMPONENT UNITS
General government support
Public health
Transportation
Culture and recreation
Home and community services
Interest on debt
Total Component Units
Expenses
Procjram Revenues
Operating Capital
Charges for Grants and Grants and
Services Contributions Contributions
Net Expenses and Change in Net Assets
Pdmary Component
Government Units
$ 5,218,482 $ 167,637 $ 110,439 $ 16,000$ 4,924,406
9,652,286 558,947 145,476 8,947,863
41,639 8,810 32,829
6,777,032 8,231 78,982 462,977 6,226,842
1,124,806 158,430 203,839 762,537
227,789 176,990 50,799
3,470,584 6,756,912 212,572 1,927,750 (5,426,650)
508,605 508,605
$ 27,021,223 $ 7,827,147 $
760,118 $ 2,406,727 $ 16,027,231
105,446
66,961
3,486,299
808,987
365,392
24,587
$ 5,246
1,716,565 $
20,597
5,650 $ 549,718
20,000
196,843
$ 4,857,672 $ 1,742,408 $ 25,650 $ 746,561
GENERAL REVENUES Real preporty taxes
Other real property tax items
Non-property tax items
Interest earnings
State aid
Other
Total General Revenues
Change in Net Assets
Net Assets at Beginning of Year
Net Assets at End of Year
$ 105,446
61,715
1,214,366
788,987
147,952
24,587
$ 18,958,999 $
58,613
518,484
205,719
2,138,006
317,347
22,197,168
6,169,937
62,517,488
$ 68,687,425 $
$ 2,343,053
1,595,730
2OO
46,952
131,436
1,774,318
(568,735)
9,069,281
8,500,546
See notes to financial statements.
-13-
TOWN OF SOUTHOLD
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2003
ASSETS
Cash and Investments
Accounts Receivable
Due from ot~er Funds
Due from Trust Funds
State and Federal Aid Receivable
Due from Other Governments
Supply Inventory
Prapaids
Deposit
Total Assets
LIABIMTIES AND FUND BALANCES
MABILITIES
Accounts Payable
Retained Percentages
Bond Anticipation Notes Payable
Due to Other Funds
Due to Trust Funds
Deferred Revenue
Total Liabilities
FUND BALANCE
Fund Balances - Reserved:
Supply Inventory
Prapaids
Insurance Claims
Fund Balance (Deficit) - Unreserved:
Designated - Ensuing Year's Budget
Undesignated
Total Fund Equity(Deficit)
Total Uabllities and Fund Equity(Deficit)
MAJOR GOVERNMENTAL FUNDS Non-Major
Capital Governmental
General Hi~lhwa¥ Projects Funds Totals
8.436,782 $ 1.569.090 $ 9,673.846 $ 1.945,252 $ 21.624,970
1,168 1.154 31.004 95,975 129,301
15,107 3,469 194,719 230.623 443,918
342,253 83.198 6,830 66,096 498.377
13.195 49,843 601,310 88,743 753,091
112.471 577,529 35,051 725,051
1,296 1.296
69,865 1,320 71,185
10,000 10,000
$ 9,002,137 $ 1,706,'754 $ 11,085,23~8 $ 2,463,060 $ 24,257,189
792.860 $ 185.976 $ 304.734 $ 342,848 $ 1,626,418
395.000 395,000
10,576.000 10,576,000
426,211 2,601 15.106 443,918
595 70,425 71,020
2,463,059 616,093 1,189,107 4,268,259
3,682,725 804,670 11,275,734 1,617,486 17.380,615
1,296 1,296
69,865 1.320 71,185
1.033,085 1.033,085
112,000 112,000
2,008.000 239,000 329,000 2,576.000
2,207,166 551,084 (190.496) 515,254 3,083,008
5,319,412 902,084 (190,496) 845,574 6,876,574
$ ,2,463,060 $ 24,257,18~9
$ 9.002,13~7 $ 1,706,754 $ 11,085,23~8
See notes to the financial statements.
-14-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
STATEMENT OF NET ASSETS
As of December 31, 2003
Total Fund Balances - Governmental Funds
Amounts reported for govermental 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
Capital assets - depreciable
Accumulated depreciation
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
Due to Employees Retirement System
Compensated absences
Claims and judgements payable
Estimated liability for landfill closure
and postclosure care costs
Prepaid items included in the Statement of Net Assets
Interest payable applicable to the Town's governmental
activities are not due and payabte in the current period
and accordingly are not reported in the funds. However
these liabilities are included in the Statement of Net Assets.
Net Assets of Governmental Activities
$34,319,499
92,034,082
(49,405,510)
(6,884,860)
(174,576)
(5,182,869)
(1,o0o,o00)
(1,917,688)
$ 6,876,574
76,948,071
(15,159,993)
157,044
(134,271)
$ 68,687,425
See notes to financial statements.
-15-
TOWN OF SOUTHOLD
STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the year ended December 31. 2003
MAJOR GOVERNMENTAL FUNDS Non-Major
Total Revenues
General
Highway
$3.513.902
6.428
REVENUES
Real Property Taxes $13.247.572
Other Real Property Tax Items 51.311
Non-Property Tax Items 401.035
Departmental Income 315.289
Intargovemmental Charges 202.917 15.573
Use of Money and Property 201.702 18.520
Ucenses and Permits 188.480 8.231
Fines and Fodeitures 107.084
Sale of Property and Compensation for Loss 56.893 4.033
Miscellaneous Local Sources 133.346
State Nd 2.225.401 458.686
Federal Aid 146~574 67~699
17~277~604 4.093.072
EXPENDITURES
Cuffeat
General Govemment Support 3.751.469
Public Safety 6.033.207
Public Health 32.988
Transportation 398.358 2.733.518
Economic Assistance and Opportunity 833.501
Home and Community Services 317.769
Culture and Recreation 228.578
Employee Benefits 2.617.783 976.406
Capital Outlay
Interest 1.007.318 15~128
Total E)q)enditures 15~220.971 3.725~052
Excess (Deficiency) of Revenues Over
Expenditures 2,056,633 368,020
Other Financing Sources (Uses)
Transfers in 1,392,850
Transfers Out (1,910,781) (60~000)
Total Other Financing Sources (Uses) (517.931) (60,000)
Excess (Deficiency) of Revenues and Other
Sources Over Expenditures and Other Uses
Fund Balance at Beginning of Year
Prior Pedod Adjustment
Fund Balances(Deficit) at End of Year
Capital Governmental
ProJects Funds Totals
$ 2.197.525 $18.958.999
874 58.613
117.449 518.484
2.339.227 2.654.516
$4.603.354 1.614 4.823.458
82.594 18.147 320.963
139.620 336.331
49.000 156.084
16.000 44.450 121.376
77.664 2'30 211.240
1.380.750 161.393 4.226.230
547.000 111 ~299 872.572
6r707.362 5~1801828 33t258~866
134.969 3.886.438
749.904 6.783.111
6.408 39.396
3.131.876
833.501
3.230.201 3.547.970
228.578
874.049 4.468.238
5.801.066 5.801.066
31.729 117.562 1.171~737
51832.795 5~113.093 29~891.911
874.567 67.735 3.366.955
1.061.431 ' * 2.454.281
(483,500) (2.454.281)
1.061.431 (483.500) -0-
1.538.702 308.020 1.935.998 (415.765) 3.366.955
3.780.710 594.064 (3.645.679) 1.261.339 1.990.434
1.519.185 1.519.185
$ 5.319.412 S 902.084 $ (190.496) S 845.574 $ 6.876.574
See notes to the financial statements.
-16-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
December 31,2003
Net Change in Fund Balance
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 pedod is:
Capital outlay
Depreciation expense
Loss on dispositions
$ 9,942,859
(3,571,646)
(67,706)
Some expenses reported in the Statement of Activities do not require
the use of current financial resources and therefore, are not reported as
expeditures in governmental funds:
Prepaid charges
The issuance of long-term debt and increase in obligations under capital
leases provides current financial resoumes 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.
Repayment of bond principal
Due to Employees Retirement System
Compensated absences
Estimated liability for landfill closure
and postclosure care costs
Accrued interest payable
$ 3,366,955
6,303,507
157,044
632,429
(174,576)
(2,228,437)
(1,917,688)
30,703
Change in Net Assets of Governmental Activities
$ 6,169,937
See notes to financialstatemen~.
-17-
TOWN OF SOUTHOLD
STATEMENT OF FIDUCIARY NET ASSETS
December 31, 2003
ASSETS
Cash and investments
Other receivables
Due from other funds
LIABILITIES
Due to other funds
Due to school districts
Due to component units
Due to other governments
Other liabilities
Deposits held
Total Assets
Total Liabilities
Fishem Island
Town Ferry District Totals
$ 10,433,163 $ 121,469 $10,564,632
55,160 55,160
71,020 71,020
$ 10,504,183 $ 176,629 $10,680,812
$ 498,377 $ 498,377
8,989,713 8,989,713
307,895 $ 156,341 464,236
1,634 1,634
5,642 5,042
700,922 20,288 721,210
$ 10,504,183 $ 176,629 $10,680,812
See notes to financial statements.
-18-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Town of Southotd (the "Town"), which was established in 1640, is governed by Town Law and other
general laws of the State of New York and various local laws. The Town Board is the legislative body
responsible for overall operations. The Town Board consists of the Supervisor who is elected for a term
of two years and f'n/e 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
Low. The Town Clerk and Receiver of Taxes are elected and serve for four years, respectively. The
Town provides a full range of municipal services, including public safety, transportation, home and
community services, public works and read 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 generally accepted in the Untied States of America (GAAP) as applied to gevemmental units.
The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for
establishing govemmental accounting and financial reporting principles.
In June 1999, the Governmental Accounting Standards Board (GASB) unanimously approved
Statement No. 34, Basic Financial StatementHnd Management's Discussion and Analysis--for
State and Local Governments. Significant changes in the Statement include the following:
For the first time the financial statements include:
,, A Management Discussion and Analysis (MD&A) section providing an analysis of the Town's
overall financial position and results of operations.
· The financial statements are prepared using full accrual accounting for all of the Town's activities,
including the recording of depreciation expense for all capital assets.
· A change in the fund financial statements to focus on the major funds.
These and other changes are reflected in the accompanying financial statements (including notes to
financial statements). The Town has elected to implement the general previsions of the Statement in
the current year.
The more significant of the govemmant's accounting policies ara described below.
1. REPORTING ENTITY
The financial reporting entity consists of: (a) the pdmary govemment, which is the Town of
Southeld; (b) organizations for which the pdmary government is financially accountable; and (c)
other organizations for which the nature and significance of their relationship with the primary
govemment ara such that exclusion would cause the reporting enfity's financial statements to be
misleading or incomplete as set forth in GASB Statement No. 14.
The decision to include a potential component unit in the Town of Southeld reporting entity is based
on several criteria set forth in GASB Statement No. 14 including legal standing, dependency and
financial accountability. Based on the application of these criteria, the following is a summary of
certain entities considered in determining the Town of Southold's reporting entity.
Certain special districts of the Town of Southold 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. Budgets and tax
rates are approved by the Town. Tax levies of the special districts are collected by the Town
Receiver of Taxes. As a result of this fiscal dependency, the Town is financially accountable for
these special districts. Accordingly, these special districts have been determined to be component
units of the Town and ara presented discretely in a separate column in the combined financial
statements to emphasize that they are legally separate from the primary government. Condensed
financial statements, along with the addresses of the administrative office for these component
units, are presented in Note A.
-19-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. BASIS OF PRESENTATION
The Town's basic financial statements include both government-wide (reporting the Town as a
whole) and fund financial statements (reporting the Town's major funds).
Government-wide Financial Statements
The government-wide financial statements reports information on the Town as a whole, except
fiduciary activities, with separate columns for the primary governmental activities as welt as the
discretely presented component units.
In the govemment-wide Statement of Net Assets, the Town's govemmentsl activities are
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~nvestments in capital assets, net of related
debt; restricted net assets; and unrestricted net assets.
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, permits and charges, etc.). The Statement of
Activities reduces gross expenses (including depreciation), by related program revenues and
operating end capital grants, to preduca 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 capital-
specific grants. The net costs (by function) are normally covered by general revenue (property,
taxes, intergovernmental revenues, interest income, etc). As a general rule the effect of
interfund activity has bean 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 year's activities.
Fund Financial Statements
The fund finencial 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. Non-major 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, liabilities, fund balances, revenues, and
expenditures, which are segregated for the purpose of carrying on specific activities or attaining
certain objectives in accordance with special regulations, restrictions or limitations. The various
funds are presented by type in the fund financial statements. Accordingly, the Town maintains the
following fund types:
Governmental Funds - Governmental funds are those through which most governmental
functions are financed. The acquisition, use and balances of expendable financial resources and
the related liabilities are accounted for through governmental funds. The measurement focus of
the governmental funds is upon determination of financial position and changes in financial
position. Governmental funds are further classified as major and nonmajor funds.
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
BASIS OF PRESENTATION (continued)
Fund Financial Statements (continued)
The Town reports the following major governmental funds:
General Fund - is the principal operating fund of the Town. This fund is used to account for all
financial resources except those required to be accounted for in other funds.
Highway Funds - To maintain and operate highways.
Caoital 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 fonds
and trust fonds).
Additionally, the Town reports the following nonmajor funds:
Special Revenue Funds - are used to account for the proceeds of specific revenue sources (other
than major capital projects) that are legally restricted to expenditures for specif'~l purposes.
Special Revenue Funds include the following:
General Fund Part Town - To provide general services outside the Village of Greenport.
Special Grant Fund - Segregate and account for projects funded by Community
Development revenue,
Special District Funds - To provide special services to areas that encompass less than the
whole town.
Fiduciary Funds - Fiduciary Funds are used to account for assets held by the Town in a trustee or
custodial capacity.
Agency Fund - is for money (and/or property) received and held in the capacity of trustee,
custodian or agent.
Discretely Presented Component Units
Certain special districts that have separately elected boards provide transportation, park, mosquito
control, and sanitation services to residents and businesses within these districts, and follow
government fund accounting principles. These districts, which are accounted for as discretely
presented component units, are as follows:
These districts include the following:
The Fishers Island Ferry District, established in 1947
Orient Mosquito 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
-21-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. BASIS OF PRESENTATION (continued)
Complete financial statements of these component units can be obtained from their respective
administrative offices:
Orient Mosquito District
Main Road
Orient, NY 11957
Fishers Island Garbage
& Refuse District
Fishers Island, NY 06390
Cutchogue-New Suffolk
Park District
P.O. Box 311
Cutchogue, NY 11935
Orient-East Marion
Park District
Route 25
Orient, NY 11957
Southold Park District
P.O. Box 959
Southold, NY 11971
Mattituck Park District
P.O. Box 1413
Mattituck, NY 11952
Fishers Island Ferry District
Main Street
Southold, NY 11971
3. BASIS OF ACCOUNTING/MEASUREMENT FOCUS
Measurement focus refers to what is being measured whereas the basis of accounting refers to
when revenues end expenditures are recognized in the accounts and reported in the financial
statements. Basis of accounting relates to the timing of the measurement mede, regardless of the
measurement focus applied.
In the government-wide statements, governmental activities 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 fi.om exchange and exchenge-like transactions are mcngnized when the
exchange takes place.
In the funds statements, governmental funds use a current financial 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 collect~le 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,
intergovernmental revenues and operating transfers. Permits, fees, and other similar revenues are
not susceptible to accrual because generally they are not measurable until they are received in
cash. In those instances where expenditures are the prime factor in determining eligibility for state
and federal grants, revenues are recognized when the expenditure is incun'ed. In the Capital
Projects Fund, long-term debt is recognized as revenue upon receipt of the proceeds.
Expenditures ara 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.
-22-
3.
TOWN OF SOUTNOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
BASIS OF ACCOUNTING/MEASUREMENT FOCUS (continued)
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 govammental 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 constitute expenditures or liabilities. Expenditures for such
commitments ere recorded in the pednd in which the liability is incurred.
4. ASSETS, UABILITIES AND FUND EQUITY
RECEIVABLES
Receivables include amounts due ffem Federal, State, and other governments or entities for
services provided by the Town. Receivables am recorded and revenues recognized as earned or
as specific program 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.
CAPITAL ASSETS
Capital assets purchased or ac, quimd 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 including 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
governmental fund upon acquisition.
DEFERRED REVENUE/UNEARNED REVENUE
Deferred revenues/unearned revenue are these where asset recognition criteria have been met, but
which revenue recognition criteria have not been met. Such amounts include collections in
advance, unearned income and amounts have been deemed to be "measurable" but not "available"
to finance current expenses pursuant to generally accepted accounting principals.
PREPAIDS
Prepaids record payments to venders that benefit futura recording periods and ara reported on the
consumption basis. Prapaids 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 futura period.
-23-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
LONG-TERM OBLIGATIONS
The liabilities for long-term obligations consisting of general obligation bond, compensated
absences, due to employee retirement system, judgments, ctaims and liability for landfill closure
and post closure costs are recognized in the government-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 I 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.
The Town of Southold Receiver of Taxes collects all real property taxes for the Town, Suffolk
County, Town Special Districts end School Districts. These taxes are levied on December 1, and
are due in two installments, 50% on December 1 and 50% on May 10, payable without penalty to
January 10 and May 3'1, respectivaly. Penalties ars imposed thereafter at the rate of one-twelfth of
the rate of interest determined by the State Commissioner of Taxation and Finance, after which
taxes are payable to the County Treasurer. The Town rstains the total amount of Town, Highway
and Town Special Districts levies fi-om the amount collected, and forwards the balance collected to
the County which assumes collection responsibility. The Town and Town's Special Districts
therefore realize annually the 100% collection of real property taxes.
School District property taxes ars also levied on December 1, and ars 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 to January 10 and May 31, respectively~ The County is also
responsible for uncollected schoot taxes.
INTERFUND TRANSACTIONS
Interfund transactions have been eliminated from the government-wide financial statements. In
the funds statements interfund transactions include:
a) Inte~und Revenues
Intarfund revenues, quasi-external transactions, in the general fund rspresent amounts
charged for services or facilities provided by the general fund. The amounts paid by the fund
receiving the benefit of the service or facilities are reflected es an expenditurs of that fund.
b) Transfers
Transfers rspresent payments to the debt service and capital projects funds from the other
funds for their appropriate share of the debt service or capital project costs.
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
COMPENSATED ABSENCES
The liability for vested or accumulated vacation or sick leave (compensated absences) is
recorded as current and noncurrent obligations in the government-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 Ihat will pay it.
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 end reduced by the outstanding
balances of any bonds, notes, or other borrowings that are attributable to the acquisition,
construction, or improvement of those assets.
b)
Restricted net assets~Consists of net assets with constraints placed on the use either by
(1) extemal 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~AII 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 undesignated. 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 GAAP. Designations of fund balances in
governmental f~nds indicate the utilization of these resources in the subsequent year's budget or
tentative plans for future use.
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
1. BUDGETARY DATA
Budgets ara 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 agraement, 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.
TOWN OF SOUTNOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (continued)
BUDGETARY DATA (continued)
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 headngs 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 certain special
revenue funds, detailed individual statements of revenues, expenditures and changes in fund
balances - budget and actual, are presented in a separate budget report
2. FUND BALANCES
DESIGNATION OF FUND BALANCE
Portions of the unreserved balances at December 31, 2003 were designated for the subsequent
year's operating budgets as follows:
Fund
Fund Balance
Unreserved and
Designated Fund Balance
Total for Subsequent (Deficit)
Fund Balance Year's Unreserved
Unreserved Budget Undesignated
Non-Major Funds:
Town Outside Village
Special Grant
East West Fire Protection District
Southold Wastewater Distdct
Fishers Island Sewer Distdct
Solid Waste Management District
$ 555,356 $ 329,000 $ 225,036
7,532 7,532
22,265 22,265
36,066 36,066
224,355 224,355
Total $ 845,574 $ 329,000 $ 515,254
FUND DEFICITS
The capital projects fund had a deficit fund balance at December 31, 2003. The capital projects
fund deficit will be eliminated as short-term debt is redeemed or converted to permanent
financing.
-26-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2003
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 maturities of less than three months.
The Town's investments ara governed by a formal investment policy. The Town's monies must be
deposited in FDiC-insured commercial banks or trust companies located within the state. The
Town is authorized to use demand accounts and certificates of deposit. Permissible investments
include obligations of the U.S. Treasury, U.S. Agencies and investments made by the Cooperative
Liquid Asset Secudty 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 collateral 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, 2003 the cash in banks was approximately $35,500,000 and collateral held
against cash in banks was $42,100,000 consisting of FDIC insurance and/or securities held in
the name of the Town of Southold.
INTERFUND RECEIVABLES AND PAYABLES
Intarfund receivables and payables for the primary government at December 31, 2003 were as
follows:
General Fund - Townwide
Highway Fund
Capital Projects Fund
Part Town
Special Grant
Southold Wastewater
Solid Waste Management District
Amount Amount
Receivable Paveble
$ 15,107 $ 426,211
3,469 2,601
194,719
56,007 106
15,000
3,283
171,333
$ 443.918 $
443.918
Interfund receivable and payable balances for the pdmary government at December 31, 2003 ara
expected to be paid currently.
-27-
TOWN OF SOUTNOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
DETAILED NOTES ON ALL FUNDS (continued)
3. C~AL ~SETS
Primary government
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 capital assets
Less accumulated depreciation
Buildings
Impmvementa other than buildings
Machinery and equipment
Infrastructure
Total accumulated depreciation
Total net depreciable capital assets
Total net capital assets
Balance Balance
1/1/03 Additions Deletions 12/31/03
$ 27,778,470 $ 3,474,859 $ 31,253,329
3,066,170 3,066,170
27,778,470 6,541,029 34,319,499
4,102,824 249,890 4,352,714
9,080,465 1,505,099 10,585,564
7,658,557 607,378 $ 139,816 8,118,119
67,938,222 1,039,463 58,977,585
88,772,068 3,401,830 139,816 92,034,082
1,696,048 113,508 1,809,556
2,325,478 175,626 2,581,104
4,582,189 621,273 72,110 5,431,352
37,002,259 2,661,239 39,663,498
$ 45,905,974 $ 3,571,646 $ 72,110 49,405,510
42,628,572
$ 76,948,071
Depreciation expense was charged to governmental functions as follows:
General govemment support
Public safety
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
$ 224,659
149,075
2,643,757
34,511
7,365
312,279
$ 3,571,646
-28-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
DETAILED NOTES ON ALL FUNDS (continued)
4. CAPITAL ASSETS (continued)
Discretely presented component units
Capital assets not being depreciated
Land $
Depreciable capital assets
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total depreciabla capital assets
Less accumulated depreciation
Buildings
Improvements other than buildings
Machineq/and equipment
Infrastructure
Total accumulated depreciation $
Total net depreciabla capital assets
Total net capital assets
Balance Balance
1/1/03 Additions Deletions 12/31/03
2,213,759 $ 2,213,759
3,341,126 $ 20,780 3,361,906
3,521,031 395,717 3,916,748
2,922,606 36,761 2,959,367
2,121,386 2,121,386
11,906,149 453,258 12,359,407
981,356 100,954 1,082,310
799,977 85,596 885,573
1,774,186 103,651 1,877,837
897,948 93,676 991,624
4,453,467 $ 383,877 4,837,344
7,522,063
$ 9,735,822
4. INDEBTEDNESS
SHORTTERM 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
BANa bear interest at various rates from 0.00% to 1.22% and are due at various dates through
2004.
When BANs are not redeemed with the proceeds of bend 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.
-29-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
DETAILED NOTES ON ALL FUNDS (continued)
4. INDEBTEDNESS (continued)
SHORT TERM DEBT (continued)
These notes are summarized as follows:
To Be Redeemed 2004
Interest Budget
Description Amount Rate Aooroodations
Various Purposes $ 2,096,000 1.140% $ 426,000
Various Purposes 3,800,000 1.216% 370,000
Landfill Closure 4,680,000 1.190% 310,000
New London Wharf 3,045,000 1.220% 70,000
Pickett Landfill Closure 1,147,302 0.000%
Total ~ ~
Bonds
$ 1,670,000
3,430,000
4,370,000
2,975,000
1,147,302
Of the $14,768,302 in bend anticipation notes, $10,576,000 relates to the pdmary government and
the remaining $4,192,302 relates to the component units.
LONG TERM DEBT
Summary of changes in long-term debt transactions for the year ended December 31, 2003 is as
follows:
Non-current
Balance Balance liabilities due Non-current
t/1103 Increases Redustons 12/31/03 within one year liabilities
Primary Govemment:
Ge~eralobligabonbonds $ 7,517,289 $ 632,429 $ 6,884,860 $ 642,431 $ 6,242,429
Due to Employees Relimment System -0- $ 174,576 174,576 38,742 135,834
Compensated abcences 2,954,432 2,423,988 195,551 5,182,869 17,787 5,165,082
Claims and judgments 1,000,088 1,000,088 1,880,880
Estimated liabti['/for landfill closure
and bost..dosure cam costs -0- 1,917,688 1,917,688 1,917,688
Component Units:
General obiiga6on bonds 97,771 32,631 65,140 ' 32,569 32,571
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 borne by
the present and future taxpayers receiving the benefit of the capital assets. These long-term
liabilities, which are backed by the full faith and credit of the Town, bear interest at various rotes
from 4.7% to 9.1% and have matudty dates in 2004 through 2019.
-30-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
DETAILED NOTES ON ALL FUNDS (continued)
4. INDEBTEDNESS (continued)
LONG TERM DEBT (continued)
Future principal and interest payments to maturity for both the primary govemment and the
component units are as follows:
Year Endin.q Principal Interest
2004 $ 675,000 $ 351,053
2005 700,000 309,748
2006 500,000 273,545
2007 520,000 247,053
2008 530,000 220,060
2009-2013 2,515,000 681,178
2014-2018 1,390,000 187,011
2019 120,000 2,820
Totals $ 6.950.000 ~
Other long-term liabilities for claims and judgments, compensated absences, retirement system
and the estimated liability for landfill closure and post closure costs are to be paid by the fund
that gave rise to the liability.
5. RETIREMENT SYSTEM
Plan Description
The Town of Southold participates in the New York State and Local Employees' Retirement System
(ERS). This is a cost-sharing multiple-employer retirement system. The System provides
retirement benefits as well as death and disability benefits.
Obligation of employers and employees to contribute and benefits to employees are govemed 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 end may amend rules and
regulations for the administration and transaction of the business of the System and for the custody
and control of their funds.
A publicly available annual report containing financial statements and required supplemental
information for the Employees' Retirement System may be obtained by writing to the New York
State Retirement System, Governor Smith State Building, Albany, NY 12244.
Fundin.q Policy
The System is noncontributory except for employees who joined the New York State 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 semice with a retirement system under the
provisions of article fourteen or fifteen of the NYSRSSL, who contribute 3% of their salary. Pdor to
October 1, 2000, all employees who joined the System after July 27, 1976 were required to
contribute 3% of their salary. Under the authority of the NYSRSSL, the Comptroller shall ce~'y
annually the rates expressed as proportions of payroll of members, which shall be used in
computing the contributions required to be mede by employers to the pension accumulation fund.
The Town is required to contribute at an actuarially determined rate. The actual contributions were
equal to the actuadally required amounts and also include additional contributions to fund various
eady retirement incentives made available to the Town employees. The credits and miscellaneous
adjustments represent modification made by the ERS for pdor year's contributions.
-31-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
DETAILED NOTES ON ALL FUNDS (continued)
5. RETIREMENT SYS'rEM (continued)
Funding Policy (continued)
The required contributions, for the Primary government, for the current year and two preceding
years were:
ERS PFRS
2003 $ 443,861 $ 240,756
2002 $ 99,200 $ 65,087
2001 $ 61,327 $ 63,568
The Town's contribution to the system was 100% of the contributions required each year.
6. POST EMPLOYMENT BENEFITS
In addition to providing pension benefits, the Town provides health insurance coverage and survivor
benef'~ for retired employees and their survivors. Substantially all of the Town's employees may
become aligible for these benefits if they reach normal retirement age while working for the Town.
Health care benef'~ in accordance with New York State Health Insurance Rules and Regulations
(administered by the New York State Department of Civil Service), are provided through the New
York State Empire Plan (the 'Empire Plan") whose premiums ara based on the benefits paid
throughout the State dudng the year.
The Town recognizes the cost of providing benefits by recording its share of insurance premiums
as an expenditure in the year paid. The Town's union contracts and ordinances require that it
provide its eligible enrollees with Empire Plan benefit coverage, or if another provider is utilized, the
equivalent coverage. Under the provisions of the Empire Plan, premiums ara adjusted on a
prospective basis for any Iceses 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 2003 year, $2,396,302 wes paid on behalf of 83 retirees
and 206 active employees and recorded as an expenditure in the vadous funds of the Primary
govemment.
7. COMPENSATED ABSENCES
Town employees are granted vacation and sick leave and earn compensatory absences in
varying amounts. In the event of termination or upon retirement, an employee is entitled to
payment for accumulated vacation and sick leave and unused compensatory absences at
various rates subject to certain maximum limitations.
Estimated vacation, sick leave and compansatory absences accumulated by governmental 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
determinable. However, management believes that sufficient resources will be made available for
the payments of vacation, sick leave and compensatory absences when such payments become
due. As of December 31, 2003, the value of the accumulated vacation time and sick leave wes
$5,182,869 for the primary government.
-32-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2003
COMMITMENTS AND CONTINGENCIES
Risk Management
The State of New York has commenced a lawsuit against the Town for unlawful discharge of gasoline
and petroleum products at the Town's Highway department on Peconic Lane. As of the date of this
report, the likelihood of an unfavorable outcome is uncertain, but is at least reasonably possible that
cleanup costs and interest could total up to $1,000,000.
The Town is self-insured for medical insurance only. The amount of claims outstanding at December
31, 2003 is $112,929 and is reserved against fund balance in the General Fund.
The Town is self-insured for workers' compensation insurance and disability insurance. Estimated
benefits to be paid are appropriated in the various operating funds of the Town. 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
perform certain maintenance and monitoring functions at the sites for thirty years after closure. The Town
ceased accepting waste at its Cutchogue landfill as of October 8, 1993. The Town entered into a
stipulation of settlement with the New York State Department of Environmental Conservation in
October of 1994 in which all charges of operational violations at the Cutchogue landfill 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 seven years. Construction of the final cover commenced in the summer
of 2001 and was completed in the fall of 2003.
In addition to placoment of the final cover on the landfill, state and federal regulations presently require
the Town to perform certain maintenance and monitoring functions at the site for up to thirty years.
Accordingly, as of December 31, 2003 the Town has recorded a liability of $1,917,688 which represents
the provision to be made in future budgets for post-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
York State Environmental Facilities Coq~oration. Costs associated with post cio.sure care will be
covered by charges to future landfill users and future tax revenue.
Lease Commitments And Leased Assets
The Town leases property and equipment under operating leases. Total rental expenditures on such
leases for the fiscal year ended December 31, 2003 were approximately $120,231. Future obligations
over the primary terms of the Town's leases as of December 31,2003 are as follows:
2004 $ 153,192
2005 124,156
2006 108,405
2007 60,425
Total $ 446.178
-33-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED
COMPONENT UNITS
The following represents condensed financial statements for the discretely presented component units as
of and for the year ended December 31, 2003:
Condensed Statement of Net Assets:
Due from Capital Assets Other
Current Pdmary NCt of Current Long-Term NCt
Assets Go'~emment Deffeciation Liabilities Uabilitise Assets
Fishers Island Fem/District $ 2.952.718
Fishets Island Refuse and GaFeage Dis 420.511
Cutchogue-N~v Suffolk Park District 98.713
Soufl-~old Park District 16.287
Orient-East Marion Park Distrk;t 8.864
Mattituck Park Distdct 232.976
Orient Mosquito District 17.182
$ 3.747.251
$ 224.595 $ 5.172.242 $ 3.933.911 $ 32.571$ 4.383.073
79.691 2.509,008 1.255.389 1.753.821
126.254 370 224,597
58.666 655.861 103.676 627.138
5.421 432.985 14.412 432,858
83.612 839.472 94.183 1.061.877
12.251 12.251 17.182
464,236 $ 9,735.822 $ 5,414,192 $ 32,571$ 8.500.546
Program Gene~l Revenue Ne( Assets
F_~ Re~mflue
Tax Ob~er Change 111~03 12/31/03
Fishers Island Fern/District $ 3.634.725
Rshe~ Island Reflse a~d Garbage 346.889
Cutd,~gue-New Suffolk Park Dislfic 112.200
Soufho~ Pad( Dis~ict 371.275
0fie~t-Eaxt Mmts~ Park Distdct 29.138
O~e~ Mosquito I~s~ct 66.881
$ 2,271,933 $ 1,88~,792 $ 880,000 S 14.354 $ 968,438 $ 5,881,511 $ 4,3~3,073
217,440 129,549 411,150 4.107 (285,708) 1,468,113 1,753,821
112.200 148.000 738 (36.5.38) 188.059 224.597
371,275 235,000 29,646 106.629 733,767 627,138
29,138 21,700 119 7,31~J 440,177 432,858
20.000 276.384 334.880 129.323 (187.819) 574.088 1.061,877
5,246 61,715 65.0~0 301 (3.586) 13.588 17.182
$ 4,857.672 $ 2.514.619 $ 2,343,053 $ 1,595,730 $ 178,588$ 568,735$ 9,(]69,281 $ 8,500,546
F. SUBSEQUENT EVENTS
In July 2004, the Town issued State Clean Water and Ddnking Water Revolving Fund Revenue Bonds, sedes
2004D through New York Environmental Facilifies Corporation in the amount of $3,789,098 at interest rates
ranging fi.om 1.201% to 4.586%. In addition, the Town issued public improvement sedal bonds on behalf of the
Mattituck Park District in September 2004 in the amount of $240,000 with an interest rate of 3.14%.
G. PRIOR PERIOD ADJUSTMENT
As of January 1, 2003, all capital projects and related debt was transferred from the primary government to the
discretely presented component units in accordance with generally accepted accounting principles. The net
effect was an increase in fund balance in the capital projects fund of $1,519,185.
-34-
REQUIRED SUPPLEMENTARY
INFORMATION OTHER THAN MD&A
TOWN OF SOUTHOLD
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
Year ended December 31,2003
Original Final
Budget Budget
REVENUES
Real Property Taxes $13,247,572 $13,247,572
Other Real Property Tax Items 60,000 60,000
Non-Property Tax Items 400,000 400,000
Departmental Income 336,400 410,121
Intergovernmental Charges 246,914 116,910
Use of Money and Property 243,964 243,964
Licenses and Permits 187,850 187,850
Fines and Forfeitures 96,500 96,500
Sale of Property and Compensation for Loss 240,400 249,939
Miscellaneous Local Sources 118,200 138,829
State Aid 1,302,000 1,339,616
Federal Aid 146,433
Total Revenues
Variance with
Final Budget
Actual Over/(Under)
$13,247,572
51,311 $ (8,689)
401,035 1,035
315,289 (94,832)
202,917 86,007
201,702 (42,262)
188,480 630
107,084 10,584
56,893 (193,046)
133,346 (5,483)
2,225,401 885,785
146,574 141
16,479,800 16,637,734 17,277,604 639,870
EXPENDITURES
General Government Support 3,836,825 4,024,052
Public Safety 6,235,956 6,272,245
Public Health 33,300 33,300
Transportation 369,200 410,725
Economic Assistance and Opportunity 649,560 866,388
Culture and Recreation 350,555 350,555
Home and Community Services 223,011 244,016
Employee Benefits 5,475,016 5,356,462
Debt Service - Principal and Interest 1,483,600 1,433,600
Total Expenditures
Deficiency of Revenues
Over Expenditures
Other Financing Sources (Uses)
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Excess (Deficiency) of Revenues and Other
Sources Over Expenditures and Other Uses
Fund Balance at Beginning of Year
Fund Balance at End of Year
3,751,469 272,583
6,033,207 239,038
32,988 312
398,358 12,367
833,501 32,887
317,769 32,786
228,578 15,438
3,795,373 1,561,089
1,007,318 426,282
18,857,023 18,991,343 16,398,561 2,592,782
(2,377,223) (2,353,609) 879,043 3,232,652
2,749,900 2,749,900 2,570,440 (179,460)
(1,558,677) (1,582,291) (1,910,781 ) (328,490)
1,191,223 1,167,609 659,659 (507,950)
$ (1,186,000) $ (1,186,000)
1,538,702 $ 2,724,702
3,780,710
$ 5,319,412
See notes to the financial statements.
-35-
TOWN OF SOUTHOLD
HIGHWAY FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Year ended December 31, 2003
REVENUES
Real Property Taxes
Other Real Property Tax Items
Non-Property Tax Items
Intergovernmental Charges
Use of Money and Property
Licenses and Permits
Sale of Property and Compensation for Loss
Interfund Revenues
State Aid
Federal Aid
Total Revenues
EXPENDITURES
Transportation
Employee Benefits
Debt Service - Principal and Interest
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
Other Financing Uses
Transfers Out
Total Other Financing Uses
Variance with
Original Final Final Budget
Budget Budget Actual Over/(Under)
$ 3,513,902 $ 3,513,902 $ 3,513,902
7,000 7,000 4,574 $ (2,426)
1,854 1,854
15,573 15,573
32,000 32,000 18,520 (13,480)
21,000 21,000 8,231 (12,769)
4,000 4,000 4,033 33
3,500 3,500 (3,500)
223,700 458,686 458,686
67,699 67,699
3,805,102 4,107,787 4,093,072 (14,715)
2,737,400 3,085,735 2,733,518 352,217
566,577 1,183,427 976,406 207,021
78,925 78,925 15,128 63,797
3,382,902 4,348,087 3,725,052 623,035
422,200 (240,300) 368,020 608,320
(689,000) ~ (60,000)
(689,000) ~ ~
Excess (Deficiency) of Revenues Over
Expenditures and Other Uses
Fund Balance at Beginning of Year
Fund Balance at End of Year
$ (266,800) $ (300,300) 308,020 $ 608,320
594,064
$ 902,084
See notes to the financial statements.
-36-
OTHER SUPPLEMENTARY
INFORMATION
Combining Fund Statements of Revenues,
Expenditures and Changes in Fund Balance
r~
TOWN OF SOUTHOLD
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
December 31,2003
ASSETS
Cash and Investments
Accounts Receivable, net of allowance
- Due from Other Funds
Due from Trust Funds
Due from Other Govemments
State and Federal Receivables
Prepaid Expenditures
Total Assets
General Fund
Part Town
$ 661,685
56,007
34,072
1,320
$ 753,084
East-West Fire Southold Fishers Solid Waste
Special Protection Wastewater Island Sewer Management
Grant Distdct District District District
$ 35,051
$ 835,710 $ 54,057 $ 48,651
3,283
2,121
$ 35,051 $ 835,710 $ 59,461
$ 48,651
$ 345,149
95,975
171,333
29,903
88,743
$ 731,103
Totals
$1,945,252
95,975
230,623
66,096
35,051
88,743
1,320
$ 2,463,060
LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable
Due to Other Funds
Due to Trust Funds
Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balance - Reserved:
Prepaid Expenses
Fund Balance - Unreserved:
Designated - Ensuing Year's Budget
Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
$ 49,672
106
70,425
77,525
197,728
1,320
329,000
225,036
555,356
$ 753,084
$ 20,051 $ 12,441
15,000
35,051
$ 35,051_
815,737
828,178
$ 13,972 $ 12,189 $ 234,523
23,224
37,196
7,532 22,265
7,532 22,265
$ 835,710 $ 59,461
396
12,585
36,066
36,066
$ 48,651
272,225
506,748
224,355
224,355
$ 731,103
$ 342,848
15,106
70,425
1,189,107
1,617,486
1,320
329,000
515,254
845,574
$ 2,463,060.
-37-
TOWN OF SOUTHOLD
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - NON-MAJOR GOVERNMENTAL FUNDS
Year ended December 31, 2003
REVENUES
Real Property Taxes
Other Real Property Tax Items
Non Property Tax Items
Departmental Income
Intergovernmental Charges
Use of Money and Property
Licenses and Permits
Fines and Forfeitures
Sale of Property and Compensation for Loss
Miscellaneous Local Sources
State Aid
Federal Aid
EXPENDITURES
General Govemment Support
Public Safety
Public Health
Home and Community Services
Employee Benefits
Debt Service - Principal and Interest
Total Revenues
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
Other Financing Uses:
Operating Transfers Out
Total Other Financing Uses
Excess (Deficiency) of Revenues
Over Expenditures and Other Uses
Fund Balance at Beginning of Year
Fund Balances at End of Year
East-West Fire Southold
General Fund Special Protection Wastewater
Part Town Grant District District
$ 294,256 $ 338,261 $ 154,864
542 59 27
117,449
543,604 88,049
8,557
2,000
49,000
8,248
230
72,650
1,096,536
134,969
408,437
6,408
628,311
435,67O
6,009
$ 111,299
111,299
111,299
735 1,318
Fishers
Island Sewer
Distdct
$ 17,606
464
Solid Waste
Management
District
$ 1,410,144
246
1,689,968
1,614
7,073
137,620
36,202
88,743
Totals
$ 2,197,525
874
117,449
2,339,227
1,614
18,147
139,620
49,000
44,450
230
161,393
111,299
339,055 244,258 18,070 3,371,610 5,180,828
35,363
211,308
24,201
2,950
341,467
2,243,920
414,178
108,603
2,766,701
604,909
(483,500)
(483,500)
121,409
102,946
$ 224,355
1,619,804 111,299 341,467 238,459
(523,268) (2,412) 5,799
(523,268) (2,412) 5,799
1,078,624 9,944 16,466
$ 555,356 $ -0- $ 7,532 $ 22,265..
35,363
(17,293)
(17,293)
53,359
$ 36,066
134,969
749,904
6,408
3,230,201
874,049
117,562
5,113,093
67,735
(483,500)
(483,500)
(415,765)
1,261,339
$ 845,574
-38-
DISCRETLY PRESENTED COMPONENT UNITS
TOWN OF SOUTHOLD
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF NET ASSETS
December 31, 2003
ASSETS
Current Assets:
Cash and investments
Accounts receivable, net of allowance
Due from primary govemment
State and federal receivables
Prepaid charges
Total Current Assets
Non-Current Assets:
Non-depreciable capital assets
Depreciable capital assets, net of depreciation
Total Assets
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities
Accured interest payable
Due to other govemments
Deferred Revenue
Bond anticipation notes payable
Non-current liabilities due within one year
General obligation bonds payable
Total Current Liabilities
Noncurrent Liabilities:
General obligation bonds payable
Total Liabilities
NET ASSETS
Investment in capital assets, net of related debt
Unrestricted
Total Net Assets
Fishers
Island Ferry
District
Fishers Island Cutchogue- Southold Orient-East Mattituck Orient
Refuse and New Suffolk Park Marion Park Park Mosquito
Garbage District Park District District District District District
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Totals
2,471,643
224,595
481,075
3,177,313
399,566
4,254
79,691
16,691
500,202
$ 98,713 $
16,287
58,666
8,864
5,421
232,976
83,612
17,182
12,251
$ 3,245,231
4,254
464,236
481,075
16,691
98,713 74,953 14,285 316,588 29,433 4,211,487
41,717 517,266 101,198 588,847
5,130,525 1,991,742 25,056 67,014
432,985
531,746
307,726
2,213,759
7,522,063
8,349,555
3,009,210 224,967 730,814 447,270 1,156,060 29,433 13,947,309
821,057
12,031
68,254
3,000,000
32,569
28,396
79,691
1,147,302
37O
10
58,666
45,000
8,991
5,421
10,124
447
83,612
12,251
868,938
12,041
447
307,895
4,192,302
32,569
3,933,911
32,571
1,255,389 370 103,676 14,412 94,183
12,251 5,414,192
32,571
3,966,482
1,255,389 370 103,676 14,412 94,183
12,251 5,446,763
3,790,250 1,361,706 126,254 655,861 432,985 839,472 7,206,528
592,823 392,115 98,34~33 (28,723) (127) 222,405 17,182 1,294,018
$ 4,383,073 $ 1,753,821 $ 224,59.~._7 ~$ 627,138
$ 432,858 $ 1,061,877 $ 17,182 $ 8,500,546
TOWN OF SOUTHOLD
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF ACTIVITIES
Year ended December 31, 2003
REVENUES
Program revenues
Real property taxes
Other real property tax items
Interest and earnings
Other
Total Revenues
EXPENDITURES
General government support
Public health
Transportation
Culture and recreation
Home and community services
Debt service - interest
Total Expenditures
Fishers
Island Ferry
District
Fishers Island Cutchogue- Southold Orient-East
Refuse and New Suffolk Park Marion Park
Garbage District Park District District District
(Unaudited) .. (Unaudited) (.Unaudited) (Unaudited) .
$ 2,271,933
380,000
66
9,384
4,904
217,440
411,150 $ 148,000 $ 235,000
72
4,035 738 29,646
2,666,287 632,697 148,738 264,646..
$ 21,700
4
115
21,819
105,446
3,486,299
112,200 371,265 29,138
18,403 346,989
24,577 .... 10
3,634,725 346,989_ 112,200 371,275 29,138
Mattituck
Park
District
(Unaudited)
$ 20,000
334,880
58
2,733
126,532
Orient
MosquEo
District
(UnaudEed)
Totals
5,246 $ 2,514,619
65,000 1,595,730
20O
301 46,952
131,436
484,203 70,547 4 288 937
296,384
296,384
105,446
66,961 66,961
3,486,299
808,987
365,392
24,587
66,961 4,857,672
Changes in Net Assets
Net Assets at Beginning of Year
Net Assets at End of Year
(968,438)
5,351,511
$ 4,383,O73
285,708
1,468,113
$ 1,753,821.
36,538 (106,629) (7,319)
188,059 733,767. 440,177
224 597 $ 627,138 $ 432,858
187,819 3,586 (568,735)
874,058 13,596 9,069,281
$ 1,061,877 $ 17,182 $ 8,500,546
OTHER REPORTS
TOWN OF SOUTHOLD
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year ended December 31, 2003
Federal Grantor/Pass-through Grantor/
Pro(imm or Cluster Title
U.S. Department of Aqdculture
Passed through Suffolk County
Cash-In-Lieu of Food Awards
Natural Resource Conservation Service
Farm and Ranchland Protection Program
U.S. Department of Health and Human Services
Pass-through Suffolk County, New York
Nutrition
U. S. De~adment of Housina and Urban Development
Pass-through from Suffolk County, New York
Community Development Block Grant Program
U. S. Department of Justice
Bulletproof Vest Partnership Program
Federal Eme~lency ManaRement A~qency
Pass-through program from State of New York
2003 Presidents Day Snowstorm 3184 EM NY
Total expenditures of federal awards
Federal
CFDA
Number
Federal
Expenditures
10.550 $ 41,621
10.913 547,000
93.045
14.218
16.607
83.548
87,197
111,299
3,988
81,467
See accompanying note to schedule of expenditures of federal awards.
-41-
TOWN OF SOUTHOLD
NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year ended December 31,2003
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.
ALBRECHT, VIGGIANO, ZURECK
& COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
25 SUFFOLK COURT
HAUPPAUGE, NY 11788
(631) 434-9500
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER
FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Town Board
Town of Southoid
Southold, New York
We have audited the financial statements of the governmental activities, the aggregate discretely presented
component units, each major fund, and the aggregate remaining fund information of the Town of Southold,
New York as of and for the year ended December 31, 2003, which collectively comprise the Town of
Southold's basic financial statements, and have issued our report thereon dated June 8, 2004, which was
qualified because 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. 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.
Comoliance
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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Town of Southold, New York's internal 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 internal control over financial reporting. Our
consideration of the internal control over financial reporting would not necessarily disclose all matters in the
internal control 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 internal control
components does not reduce to a relatively Iow 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.
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.
Hauppauge, New York
June 8, 2004
-43-
ALBRECHT, VIGGIANO, ZURECK
& COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
25 SUFFOLK COURT
HAUPPAUGE, NY 11788
(631) 434-9500
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO
EACH MAJOR PROGRAM AND O1'4 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) Circular A-133 Compliance Supplement that
are applicable to each of its major federal programs for the year ended December 31, 2003. 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'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
Govemments, 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 matedal 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 audit provides a reasonable basis for our opinion. Our
audit does not provide a legal determination of the Town of Southold'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,
2003.
Intemal Controls Over Compliance
The management of the Town of Southold is responsible for establishing and maintaining effective internal
control over compliance with the requirements of laws, ragulations, 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 internal control over compliance would not necessarily disclose all matters in the internal
control that might be a material weakness. A matedal weakness is a condition in which the design er operation
of one er more of the internal control components does not reduce to a relatively Iow level the dsk of
noncompliance with applicable requirements of laws, regulations, contracts and grants that would be matedal 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.
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.
Hauppauge, New York
June 8, 2004
TOWN OF SOUTHOLD
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year ended December 31, 2003
SUMMARY OF AUDITOR'S RESULTS
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 unit, the Fishers Island Ferry District, was audited by other
auditors.
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".
3. No instances of noncompliance material to the financial statements of the Town of Southold were
disclosed during the audit.
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 Farm and Ranchland Protection Program 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 one "Type A" program for the year ended December 31, 2003.
8. The program tested as a major program includes:
CFDA Number
Name of Federal Prof:lram or Cluster
10.913
U.S. Department of Agriculture
Farm and Ranchland Protection Prograrn
9. The threshold for distinguishing Types A and B programs was $300,000.
10. The Town of Southold was determined to be a Iow-risk auditee.
TOWN OF SOUTHOLD
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year ended December 31,2003
FINDINGS-FINANCIAL STATEMENTS AUDIT
REPORTABLE CONDITIONS
There were no findings or reportable conditions noted.
FINDINGS AND QUESTIONED COSTS- MAJOR FEDERAL
AWARD PROGRAMS AUDIT
U.S. Dept of Agriculture - CFDA # 10.913
Farm and Ranchland Protection Program
Thero were no findings or reportable conditions noted.
Questioned Cost $ -0-