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Home My WebLink About1990TOWN OF SOUTHOLD AUDIT REPORT DECEMBER 31, 1990 o 4-3 O ~) .P ,.p 0 O o o 0 r~ 4.~ 0 To~n of SouthoLd Audit Report Decentmr 30, 1990 Index STATEMERTS combined BaLance Sheet - ALL Fund Types & Account Groups ............................ Combined Statement of Revenues, Expenditures, and Changes in Fund BaLance - AL[ GoverreentaL Fund Types ................................ Combined Statement of Reverades, Expenditures, end Changes in Fund BaLance - Budget and Actual - ALt Governments[ Fund Types ............ 1-2 3-& 5-6 Combining Statement of Revenues, Expenditures, and Changes in Fund BaLance - Budget end Ac[ua[ Genera[ Funds .............................................. 7 Special Revenue Funds ...................................... 8 Spec[at District end Capital Funds ......................... 9 Combining BaLance Sheets - Genera[ Funds .............................................. 10 Programs for the Aging ................................. ; .... Special Revenue Funds ....................................... 12 Special District Funds ..................................... Combining Statement of Revenues, Expenditure, and Changes in Fund BaLance - Genera[ Funds .............................................. Programs for the Aging ...................................... 15 Specie[ Revenue Funds ....................................... 16 Special District Funds ..................................... 17 SCBEOULES ScheduLe of Federal Assistance ................................... 18-19 ScheduLe of ObLigations PayabLe .................................. 20 Fishers IsLand Ferry District - BaLance Sheet .............................................. 21 Statement of Revenues, Expenditures, and Changes in Fund BaLance ................................................. 22 Departmental Bank Reconciliations - Town CLerk ................................................. 22 Tax Receiver ............................................... 22 Justice of the Peace ....................................... 24-25 To~n of $outhotd Audit Report December 30, 1990 index-Page 2 Fiducfary Bank Reconcitiation - Payrott Account ............................................ 26 Supervisor,s Tax Account ................................... 26 Report on SuppLementary information ScheduLe .................... 27 Report on Internal Accounting Control - Federal Funds ........... 28-30 Report on compliance - Federal Funds ............................ 31-32 Notes to Financier Statements ................................... 33-&6 ~ ASSE'ZS 4,980 38 369,091 24,470 25,732 37;810 148,829 1~.7,242 5;846 1,~,47 20,274 Absences P&l~ablo 142,301 $ 210,185 $ 19,332 $ 17,652 S 389,490 $ 369,092 38 4,321 $ 29,388 33,707 105,888 3,591 1,565 5,156 4,299 $ 726,770 726,770 851,121 761,749 1,258,706 61,677 2,082,132 12,692 1,611,400 1,397,900 3,008,900 2,473,400 $ 907,641 $1,470,494 $1,635,073 $ 79,329 $ 325,737 $ 0 $&,135,602 S 8,553,876 $ 6,158,238 907,641 $1,470,494 $1,635,073 $ 79,329 $ 325,737 $ 0 $4,135,602 $ 8,553,875 $ 6,158,238 $10,386,394 $10,386,394 $10,230,092 $ 17,107 $ 167,843 $ 125,000 309,950 182,855 620,000 $ 719o169 22,864 1,362,033 1,707,888 427,?46 61,702 489,448 228,755 (111,933) (1,811,400) (1,722,933) {1,496,783) (94,426) $1,218,589 $ (892,231) $ 209,566 $ 0 $10,386,394 $ 0 $10,824,892 $10,852,807 813,215 $2,686,083 $ 742,842 $ 288,898 $ 323,73? $10,386,394 $4,135,602 $19,378,768 $17,011,045 -2- TOTAT, m 274,197 $ 8,660,568 30,941 84,489 88;995 25,500 19,915 24,443 $ 8,867,941 73,099 27,601 1,240,442 1,073,677 281,130 220,437 452,707 547,627 82,442 94,108 47,593 40,501 159,668 26,442 237,365 48,848 1,043,081 1,150,052 173,316 0 131,200 303,281 643,956 982,764 87,500 0 327,000 249,000 $4,712,961 $8,043,320 $ 452,185 $ 463,991 $13,672,457 $13,708,378 ~1~ B~lte 253,857 1,610,284 1,864,141 1,697,462 ~ S~i~ 526,~4 39,354 25,487 1,417 S92,382 495,043 REVENUES from Page REVENUE P~DJECTS DIS~CT 12/31/g0 12/'31/89 $ 4,712,981 $ 8,043,320 $ 452,185 $ 463,991 $13,672,657 $13,705,378 (UNDER) E~RDITUR~9 (461,043) 171,139 58,533 47,164 $ (184,217) (306,076) PUNDBALANC~JARU~RY 1, 1990 PUBDBALANCEDEC~ER31, 1990 366,617 1,044,450 (950,764) 162,412 $ 622,715 $ 928,791 $ (94,426)$ 1,215,689 $ (692,231) $ 209,566 $ 438,498 $ 622,715 05 0 [1,220) 31,792 1,242 (~) (~9,~) $5,338,003 $ 8,645,093 $ 2,652,706 $ 4'74,690 $1"/,110,492 $13,856,6'74 $ 0 $ 3,253,8].8 S (775,000) $ (781,553) $ (149,832)$ (25,337) $(1,731,722)$ (184,23.7) -6- $2,589,086 $2,588,086 $ 0 $ 0 41,500 33,443 (8,057) 453,245 687,329 218,080 214,335 201,986 (12,352) 120,100 108,405 (11,695) $1,925,901 $1,891,930 $ 0 $ 33,971 149,230 145,290 3,940 87,040 80,531 6,509 257,512 283,610 3,002 470,832 417,092 53,740 360,505 337,239 23,356 953,979 925,775 28,204 262,319 253,857 8,461 526,223 526,124 99 $ (775,000) $ (461,043) 366,617 366,617 S (408,383) $ (94,426) 781,553 $8,645,093 S 263,141 $ 238,370 3,510,528 3,485,866 3,950 3,000 2,148,807 1,938,962 3,829,463 1,610,284 62,063 39,354 299,517 296,803 $ (781,553) $ 171,139 1,044,4S0 1,044,450 S 262,897 $1,215,589 0 81,222 48,644 (265) (9,601) 23,610 (1,294) (159,928) 24,771 24,662 990 309,845 168,084 219,177 22,709 2,714 772,912 FUND BALA/JCE - 3A~UARY 1, 1990 ............. CA~i~TAL FUNDS ............................ SPECIAL D/S~tTCTS .............. $ 1,749 $ 15,344 $ 13,395 274,197 $ 274,197 $ 0 30,309 30,941 732 102,816 88,995 (13,821) 30,000 23,500 (4,S00) 13,625 13,625 0 0,716 8,716 $ 13,212 $ 10,192 $ 3,021 122,750 122,325 425 40,000 40,000 0 28,360 28,560 0 487,73g 27,~04 459,933 307,368 232,962 54,406 Due To Ceneral/(Fro~) Aging $ 361,146 $ 2,390 $ 363,536 $ 116,138 8,712 149,245 594 148,829 42,736 25,732 25,732 21,562 $ 765,169 $ 48,027 $ 613,215 $ 604,066 $ 130,741 $ 11,560 $ 142,301 $ 174,027 (33,035) 33,035 55,276 721 2,970 3,591 4,299 761,187 562 761,749 3,848 $ 859,614 $ 48,027 $ 907,641 $ 237,449 $ 775,000 $ (94,426) $ 0 $ (94,426) $ 366,617 $ 765,188 $ 46,027 $ 813,215 $ 604,066 ASSETS FUND BALANCE8 $ 1,755 $ 635 $ 2,390 408 $ 138 S 38 584 23,711 8,538 $ 1,290 S 2,947 5,144 3,173 44,803 250 290 $ 25,874 $ 9,423 $ 1,290 $ 2,947 S 5,282 $ 3,211 $ 48,027 7,000 $ 1,227 $ 58 S 581 $ 1,962 $ 752 $ 11,560 1,067 875 928 2,870 582 562 $ 0 $ 0 $ 0 $ O $ 0 $ 0 $ 0 $ 905,018 $ 462,783 $ 984,158 $ 71,171 416 2,057 38 5,400 37,810 . 20,274 $ 19,070 94,290 $ 2,446,249 $ 1,068,037 83,399 157,242 44,193 38 168 24,470 2,695 37,810 33,672 20,274 17,853 $1,039;873 $ 463,199 $ 986,253 $ 19,070 $ 177,688 $ 2,686,083 $ 1,166,618 98,621 $ 20,877 $ 43,776 $ 19,070 $ 37,841 $ 210,185 $ 104,381 38 38 9,167 1/080 105 360 1,566 0 900,346 136,100 220,214 2,046 1,256,706 8,620 990,047 $ 157,120 $ 264,370 $ 19,070 $ 39,897 $ 1,470,494 $ 122,168 $ 18,562 $ 2,476 $ 9,004 $ 137,801 $ 167,643 $ 87,855 150,000 470,000 620,000 770,000 31,264 153,603 242,879 427,746 186,593 $ 49,826 $ 306,079 $ 721,683 $ 0 $ 137,801 $ 1,215,589 $ 1,044,450 TOTAL AS SEal'S 546 $ 5,543 $ 239,305 $ 231 $ 245,625 S 165,026 985 985 9,791 206 5,300 7,020 12,526 3,137 $ 1,407 $ 27,682 29,089 623 1,070 1,070 0 $ 10,307 $ 7,345 $ 17,652 S 6,150 9,791 $ 364 $ 2,477 $ 27,123 31,713 61,677 226 $ 125,000 $ 125,000 $ 95,000 $ 91 $ 0 S 559 $ 2,214 20,000 22,864 25,252 91 3,535 57,585 $ 491 61,702 42,160 LT9'99C $ (9~'f6) $ o $ (9:~'~6) $ (90s'gc;) $ (Cto'Tgt) t 0 $ (£to'lgt) $ $ 44,007 $ 11,619 $ 184 $ 19,851 $ 663 $ 76,324 57,754 29,664 $ 7,550 24;616 39,746 24,792 184,122 $ 1,550 $ 1,550 169,045 $ 38,836 $ 7,244 $ 24~296 63,898 $ 25,093 338,412 6,163 2,447 306 504 1,921 363 11,703 175,208 $ 41,283 $ 7,550 5 24,800 5 67,369 $ 25,455 5 341,665 $ 0 5 0 $ 0 $ 0 $ 0 $ 0 S 0 $ 05 05 05 05 05 05 0 $ 05 05 05 05 05 0S 0 -15- FU~D BALANC~ - DEC~ER 31, 1990 $5,736,989 21,677 27,601 494,122 484,122 439,372 53,644 53,644 46,767 150,204 47,136 106,265 $ 5,43B 309,043 322,912 6,690 545 7,235 7,310 9,119 ' 144,931 154,090 23,532 59,099 625 27,996 24,771 112,380 41,065 130,108 152,749 282,691 288,116 109,303 5,544 20,162 139,009 14,591 602,024 616,615 292,165 $ 69,981 69,981 203,20~ $ 200,455 $2,168,510 $ 69,991 $ 777,164 $8,043,320 $7,447,609 S4,827,180 138,816 $ 99,554 $ 238,370 $ 192,94,7 3,485,866 3,485,866 3,141,423 S 590,059 $1,248,903 1,838,962 1,749,030 3,000 3,000 3,326 289,561 $ 69,991 359,542 486,381 819,307 44,672 118,641 627,664 1,610,284 1,300,732 39,354 39,354 17,495 130,252 33,306 133,245 296,803 159,530 $4,866,802 $ 707,391 $1,500,789 $ 69,981 $ 727,218 S7,872,181 S7,050,864 S (39,622) $ (506,906) S 667,721 S 0 $ 49,946 $ 171,139 S 396,745 S 89,448 $ 812,985 $ 54,162 $ 0 S 87,855 $1,044,650 $ 647,705 $ 1,663 $ 122,184 2 134 $ 30,209 ?0 $ 259 $ 150,350 $ 274,197 $ 274,973 521 $ 5 30,871 10,546 69,855 19,140 88,995 85,334 25,500 25,500 27,600 19,504 155 19,985 18,098 24,443 24,443 906 $ 1,735 $ 122,318 $ 256 $ 30,209 S 290,173 $ 19,30D $ 463,991 $ 417,457 $ 44§ $ 260 $ 6,230 $ 3,249 $ 10,192 $ 10,693 $ 122,325 122,325 111,600 $ 28,560 29,560 9,717 $ 4,406 232,910 15,646 252,962 254,896 1,417 1,417 1,485 1,391 1,381 $ 1,962 $ 122,325 $ 4,406 $ 30,209 $ 239,140 $ 18,895 $ 416,937 388,371 $ (127) $ (7) $ (4,150) $ 0 $ 51,033 $ 405 $ 47,154 $ 29,086 $ 310 $ 566 $ 9,099 $ 0 $ 151,552 $ 86 $ 102,412 $ 133,326 $ 103 $ 599 $ 5,748 $ 0 $ 202,585 $ 491 $ 209,566 $ 162,412 -17- U.S. Departm~n= of Agriculture 10.550 $ 34,130 $ 0 $ 31,517 $ 31,517 $ 0 13.635 $ '49,702 0 49,702 49,702 0 U.S. Depar~men~ of Housing and Urban Development 835,985 (1) 0 69,991 $ 0 $ 151,200 69,981 0 $ 151,200 $ 0 $ 835,965 NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT -18- 20.106 $ 287,853 Fund 226,?92 $ 225,792 226,?92 $ 22~,792 Fund B&l~nce December 1990 $ 0 NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT -19- 6/90 6.60 $ 15,800 $ 15,800 $ 0 8/90 5.89 13,600 13,800 0 50/90 6.00 20,400 20,400 0 4/05 9.i0 1,385,000 75,000 1,310,000 1/91 6.00 12,000 6,000 6,000 10/91 6.30 16,000 8,000 6,000 4/92 5.99 105,000 35,000 70,000 6/92 6.28 64,000 28,000 56,000 10/92 6.35 1,600 1,200 2,400 11/92 6.20 45,000 15,000 30,000 11/92 6.20 42,000 14,000 26,000 11/92 6.20 135,000 45,000 90,000 10/93 6.29 48,000 12,000 36,000 5/93 6.24 68,000 17,000 51,000 6/94 6.25 170,000 34,000 136,000 9/94 6.19 150,000 30,000 120,000 11/94 6.31 160,000 32,000 128,000 3/95 5.89 $ 60,000 0 60,000 9/95 6.08 50,000 0 50,000 10/95 6.29 40,000 0 40,000 11/91 6.30 600,000 0 600,000 11/92 6.33 67,500 0 87,500 12/95 6.12 100,000 0 100,000 $2,473,400 $ 937,500 $ 402,000 $3,0O8,900 -20- $ 792,077 $ 10,161 $ 793,239 $ 813,937 13,931 13,931 18,325 195,328 195,338 0 1,735 4,435 6,176 0 $ 645,000 645,000 705,000 $ 993,074 $ 14,599 $ 645,000 $ 1,692,673 $ 1,537,262 $ 69,234 $ 491 $ 66,715 $ 6,425 13,931 13,931 15,325 127 127 0 25,524 29,924 0 197 167 0 $ 645,000 $ 643,000 705,000 $ 93,885 $ 14,599 $ 645,000 $ 753,484 $ 729,750 $ 899,189 $ 0 $ 0 $ 899,189 $ 607,512 $ 993,074 $ 14,599 $ 649,000 $ 1,692,673 $ 1,537,262 -21- TOWN OF SOUTHOLD DEPARTMENTAL BANK RECONCILIATIONS DECEMBER 31, 1990 TOWN CLERK - JUDITH T. TERRY Bank Balance - 1~/31/90 , Add: Deposit in Transit Less: Outstanding Checks Ledger Balance - 12/31/90 $ 84,968.70 5,095.64 (7.50) 90,056.84 90,056.84 TAX RECEIVER - GEORGE SULLIVAN checkinq Account Bank Balance 12/31/90 Add: Deposits in Transit Less: Outstanding Checks Miscellaneous Adjustment Ledger Balance 12/31/90 $ 693.13 (37.79) 647.13 647.13 Money Market Account Bank Balance 12/31/90 Add: Deposits in Transit Less: Outstanding Checks Miscellaneous Adjustment Ledger Balance 12/31/90 $1,498,842.16 0 0 7.00 $1,498,849.16 $1,498~849.16 NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT - 23 - Town OF EOUTHOLD JUSTICE OF THE PEACE BANK RECONCILIATIONS DECEMBER 31v 1990 JUSTICE PRICE Norstar Bank Balance 12/31/90 Checking Account Bail Account Add: Deposits in Transit Less: Outstanding Checks Justice's Ledqer Bail Held Due to Comptroller Due to Supervisor $19,970.26 6,385.86 (15o.00) $19,820.26 6,115.50 270.36 26,206.12 $26,206.12 NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT -24- TOWN OF SOUTHOLD JUSTICE OF THE PEACE B~NK RECONCILIATIONS DECEMBER 31, 1990 JUSTICE EDWARDS Bank Balance 12/31/90 Add: Deposits in Transit Less: Outstanding Checks Justice's Ledqer Bail Held Due to Comptroller $ 1,952.00 0 0 $ 1,060.00 892.00 $ 1,952.00 $ 1,952.00 NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT - 25 - TOWN OF SOUTHOLD FIDUCIARY BANK RECONCILIATIONS DECEMBER 31, 1990 PAYROLL ACCOUNT Bank Balance 12/31/90 Add: Deposits %n Transit Less: Outstanding Checks $ 40,787.09 9.99 (40,516.22) Ledger Balance 12/31/90 *Due to Supervisor-Interest on Account 280.06 280.86* BUPERVISOR'S ,TAN ACCOUNT Bank Balance 12/31/90 Add: Deposits in Transit Less: Outstanding Checks $2,913,668.25 0 (2,912,626.58) Ledger Balance 12/31/90 *Due to Supervisor-Interest on Account 1,041.67 1,041.67' *Explanation of Ledger Balance NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT. - 26 - E. F. KALDOR, C.P.A., P.C. CERTIFIED PUBLIC ACCOUNTANT REPORT ON SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE May 30, 1991 Town Board Town of Southold 53095 Main Road Southold, New York 11971 Members of the Board: We have examined the general purpose financial statements of the Town of Southold for the year ended December 31, 1990 and have issued our report thereon dated May 30, 1991. Our examigation of such general purpose financial statements was made in accordance with.generally aocepte~ auditing standards and the standards for financial and compliance audits contained in the Standards for Audit of Governmental Organizations, ProGrams. Activities. and Functions, issued by the U.S. General Accounting Off~ce, and accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. Our examination was made for the purpose of forming an opinion on the general ~urpose financial statements taken as a whole. The accompanying Schedule of Federal Financial Assistance is presented for purposes of additional analysis and is not a required part of the general purpose financial statements. The information in that schedule has been subjected to the auditing procedures applied in the examination of the general purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. Respectfully submitted, E.F. Kaldor, P.C. Certified Public Accountant EFK:vemc -27- E. E KALDOR, C. RA., P.C. CERTIFIED PUBLIC ACCOUNTANT 1~2 GRIFFING AVENUE RIVERHEAD, NEW YORK 1190! REPORT ON ACCOUNTING AND ADMINISTRATIVE CONTROLS AT THE FEDERAL FINANCIAL ASSISTANCE PROGR~u~ LEVEL May 31, 1991 Town Board Town of Southold 53095 Main Road Southold, New York 11971 Members of the Board: We have audited the general purpose financial statements of the Town of Southold for the year ended December 31, 1990 and have issued our report thereon dated May 30, 1991. These general purpose financial statements are the ~esponsibility of t~e.Town's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards; the standards for financial and compliance audits contained in the Standards for Audit of Governmental Orqanizations, Programs, Activities. and Functions, issued by the U.S. General Accounting O~ice; the Sinqle Audit Act of 1984; and the provisions of the OMB Circular A-128, Audits of State and Local Governments. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose 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. Under the date of May 30, 1991, we reported separately on the results of our understanding and assessment of the internal con%rol structure performed in connection with our audit of the general purpose financial statements. Our understanding and assessment of the internal accounting and administrative control structures used in administering federal financial assistance programs are presented herein. - 28 - For the purpose of this report, we have classified the significant internal accounting and administrative controls included in the internal control structures used in administering the federal financial assistance programs in the following categories: Cycles of Entities' Activity Financial Statement Captions Accounting Applications General Requirements Specific Requirements We considered all of the control categories listed above and determined that relevant policies and procedures have been placed in operation. We also performed an assessment of the control risk for a{1 of the categories listed above to determine the operating effectiveness of relevant policies and procedures in order to assess the control risk at the minimum level. The purpose of considering and assessing the internal control structure used in administering federal financial assistance programs was to determine that, with respect to federal financial assistance programs, resource use is consistent with laws, regulations, and policies; resources are safeguarded against waste, loss, and misuse; and reliable data are obtained, maintained, and fairly disclosed in reports. The management of the Town of Southold is responsible for establishing and maintaining the internal control structures used in administering federal financial assistance programs. In fulfilling that responsibility, estimates and judgements by management are required to assess the expected benefits and related costs of control structure. The objectives of the internal control structures used in administering federal financial assistance programs are to provide management with the ability to record, prqcess, summarize, and report financial data consistent with assertions embodied in the financial reports. With respect to the internal control structures used solely in administering non-major federal financial assistance programs, we considered the structure to obtain a sufficient understanding of the control environment, the accounting system and the control procedures. Accordingly, our examination would not necessarily disclose material weaknesses in the internal control structures used solely in administering non-major federal financial assistance programs. A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities 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. - 29 Our consideration of the internal control structure used in administering t~e federal financial assistance programs would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. These conditions were considered in determining the nature, timing, and extent of the audit tests to be applied in (1) our audit of the 1990 general purpose financial statements and (2) our audit and ~eview of t~e Town's compliance with those laws and regulations for which noncompliance could have a material effect on the allowability of program expenditures. This report does not affect our reports on the general purpose financial statements and on the Town's compliance with laws and regulations dated May 30, 1991. This report is intended solely for the use of management and its granting agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of th~s report, which, u?on acceptance by the Town of Southold, is a matter of public record. Respectfully submitted, E.F. Kaldor, P.C. Certified Public Accountant EFK:vemc - 30 - F. KAI..DOR, C.RA., P.C. CERTIFIED PUBLIC ACCOUNTANT REPORT ON COMPLIANCE AT THE FEDERAL FINANCIAL ASSISTANCE PROGRAM LEVEL May 30, 1991 Town Board Town of Southold 53095 Main Road Southold, New York 11971 Members of the Board: We have audited the general purpose financial statements of the Town of Southold as of and for the year ended Deoember 31, 1990 and have issued our report thereon dated May 30, 1991. These general purpose financial statements are the responsibility of the Town's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards for financial and compliance audits contained in the Standards for Audit o__f Governmental Organizations, Proqrams, Activities, and Functions issued by the U.S. General Accounting office; the Sinqle ~udit Act of 1984; and the provisions of OMB Circular A-128, Audits of State and Local Governments. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the.general purpose financial statements are free of material misstatements including misstatements resulting from noncompliance with laws and regulations. An audit includes examining, on a tes~ basis, evidence supporting the amounts and disclosures in the general purpose 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 management of the Town of Southold is responsible for the Town's compliance with laws and regulations. In connection with the audit referred to above, we selected and tested transactions and records from certain non-major federal financial assistance programs. The purpose of our testing of transactions and records from those federal financial assistance programs was to obtain reasonable - 31 ! assurance that the Town of Southold had, in all respects, administered its non-major program transactions in compliance with those laws and regulations for which noncompliance could have a material effect on the allowability of program expenditures. Such laws and regulations include those pertaining to federal financial reports and claims for advances and reimbursements. With regards to general requirements, the following areas were addressed: I. Political Activity. We tested the expenditures and related records of personnel, payroll and their costs, and found no indication of lobbying activities, publications and other materials which were intended to influence legislation or charged directly or indirectly, to federal assisted programs. II. Davis-Bacon Act. We identified the one agreement that exists between the Town and a subrecipient that'involves construction activities. We examined the Town's system for monitoring contracts and determined that there was adherence to the prescribed procedures. III. Civil Riqhts. The Town has a formal policy of non-discrimination and all advertisements specifically address that issue. The Town does not employ 15 or more persons in any federal financially assisted program. Contract agreements contain prohibitions against discrimination on the basis of race, sex or religion. No complaints have come to our attention with regard to discrimination in federal financially assisted programs. Facilities financed by federal funds are located in a non-discriminatory manner. Letters from our attorney do not indicate that there are any civil rights suits being adjudicated or pending. IV. Cash Manaqement. The Town's forecasting process was evaluated and deemed to be accurate. The Town's system for requesting federal funds were reviewed and evaluated to keep federal cash disbursements limited to the Town's immediate needs. Dates and amounts for advances and drawdowns were compared to the dates funds were disbursed. The size of the bank balances were evaluated and deemed to be satisfactory to the programs' needs. VI. Relocation Assistance and Real Property Acquisition. Relocation assistance is not applicable to the Town's federal financially assisted programs. The Town is not administering a federal or federally assisted program involving the acquisition of property or the displacement of households. - 32 Revised VII. Federal Financial Reports. The Town's procedure for preparing Federal financial reports were evaluated for accuracy. Testing of Federal financial reports were evaluated for completeness and timeliness of submission. We vouched and tested the data to the supporting documentation for completeness and accuracy. The results of our testing of transactions and records selected from non-major federal financial assistance programs indicate that for the transactions and records tested the Town of Southold complied with the laws and regulations referred to in the third paragraph of the report. Our testing was more limited than would be necessary to express an opinion on whether the Town of Southold administered those programs in compliance, in all material respects, with those laws and regulations for which noncompliance could have a material effect on the allowability of program expenditures. With respect to the transactions and records that were not tested by us, nothing came to our attention to indicate that the Town of Southold had not complied with laws and regulations. Respectfully submitted, E.F. Kaldor, P.C. Certified Public Accountant - 32A - Town of Southold Notes To The Financial Statements For the Fiscal Year Ended December 31, 1990 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Town of Southold have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the government's accounting policies are described below. A. FINANCIAL REPORTING ENTITY The Town of Southold, which was established in 1640, is governed by its Charter, the Local Municipal 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 Supervisor serves as Chief Executive Officer and as Chief Fiscal Officer. Basic services provided included Public Safety, Health, Transportation, Economic Assistance and Opportunity, Culture and Recreation, and Home and Community Services. All governmental activities and functions performed for the Town are its direct responsibility. No other governmental organizations have been included or excluded from the reporting entity. The financial reporting entity includes organizations, functions and activities over which elected officials exercise oversight responsibility. Oversight responsibility is determined on the basis of financial interdependency, selection of governing authority, designation of management, and ability to significantly influence operations and accountability for fiscal matters. 1. Included in the Reporting Entity - The following districts, located within the Town, are included in the reporting entity: East-West Fire Protection District Wendy Drive Road Improvement District West Creek Estates Road Improvement District West Greenport Water District 2. Excluded From the Reporting Entity - The following districts, located within the Town, are excluded from the reporting entity: Fishers Island Ferry District Orient Mosquito District Mattituck Park District Fishers Island Refuse and Garbage District Cutchogne-New Suffolk Park District -33- B. BASIS OF PRESENTATION - FUND ACCOUNTING The accounts of the Town are organized on the basis of funds or account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for within a separate set of self-balancing accounts that comprise its assets, Habilities, fund balance/retained earnings, revenues and expenditures/expenses 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 summarized by type in the financial statements. (Certain funds of the locai government are utilized to account for resources derived from, and/or expenditures applicable to an area less than the entire local government). The foliowing fund types and account groups are used: 1. FUND CATEGORIES a. GOVERNMENTAL FUNDS - Governmental funds are those through which most governmental functions are financed. The acquisition, use and balance 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. The following are the Town's governmental fund types. General Fund - the principal operating fund which includes all operations not required to be recorded in other funds. Special Revenue Funds - used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. The following Special Revenue Funds are utilized: Highway Funds-To maintain and operate highways General Fund Part Town-To provide general services outside the Village of Greenport Community Development Fund-Segregate and account for projects funded by special federal revenues Capital Projects Fund - used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by speeial assessment funds and trust funds). b. FIDUCIARY FUNDS - used to account for assets held by the local government in a trustee or custodial capacity: Trust and Agency Funds - used to account for money received and held in the capacity of trustee, custodian or agent. These include expendable trusts, non-expendable trusts, and agency funds. 2. ACCOUNT GROUPS Account Groups are used to establish accounting control and accountability for general fixed assets and general long-term debt. The two account groups are not "funds". They are concerned with measurement of financiai position and not results of operations. The General Fixed Assets Account Group - used to account for land, buildings, improvements other than buildings, and equipment utilized for general government purposes, except those accounted for in proprietary funds. The General Long-Term Debt Account Group - used to account for all long-term debt except that accounted for in proprietary and special assessment funds. C. BASIS OF ACCOUNTING/MEASUREMENT FOCUS Basis of accounting refers to when revenues and expenditures/expenses and the related assets and liabilities are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus. Measurement focus is the determination of what is measured, i.e. expenditures or expenses. Modified Accrual Basis - All governmental Funds and Expendable Trust Funds are accounted for using the modified accrual basis of accounting. Under this basis of accounting, revenues are recorded when measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Material revenues that are accrued include real property taxes, state and federal aid, sales tax and certain user charges. If expenditures are the prime factor for determining eligibility, revenues from federal and state grants are accrued when the expenditure is made. Expenditures are recorded when incurred except that: a. Expenditures for inventory-type items are recognized at the time of the disbursements. b. Principal and Interest on indebtedness are not recognized as an expenditure until due. -35- c. Compensated absences, such as vacations and sick leave which vests or accumulates, are charged as an expenditure when paid. See Note I-J. Accrual Basis - Proprietary funds are accounted for on the acc~uai basis of accounting, whereby revenues are recognized when earned and expenses are recorded when incurred. Fixed assets and long-term liabilities related to these activities are recorded within the funds. Account Groups - General fixed assets are recorded at actual or estimated cost or, in the case of gifts and contributions, at the fair market value at the time received. No provision for depreciation is made. General long-term debt liabilities are recorded at the par value of the principal amount. No liability is recorded for interest payable at maturity. D. PROPERTY TAXES County real property taxes are levied annually and become a Hen on December 1. Taxes are collected during the period December 1 to May 31. Taxes for county purposes (apportioned to the area of the county outside the Town of Southold) are levied together with taxes for town and special district purposes as a single bill. The towns and special districts receive the full amount of their levies annually out of the first amounts collected on the combined bills. The county assumes enforcement responsibility for all taxes levied in the towns (and for unpaid county taxes in the Town). Unpaid village taxes and school district taxes are turned over to the county for enforcement. Any such taxes remaining unpaid at year end are relevied as county taxes in the subsequent year. E. BUDGETARY DATA 1. BUDGET POLICIES - The budget policies are as follows: a. No later than October 1, the budget officer submits a tentative budget to the Town Board for the fiscal year commencing the following fiscai year. The tentative budget inclUdes the proposed means of financing for all funds. b. After public hearings are conducted to obtain taxpayer comments, no later than November 20, the governing board adopts the budget. c. All modifications of the budget must be approved by the governing board. -36- 2. ENCUMBRANCES Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded for budgetary control purposes to reserve that portion of the applicable appropriations is employed in ali funds. Encumbrances are reported as reservations of fund balances since they do not constitute expenditures or liabilities. Expenditures for such commitments are recorded in the period in which the liability is incurred. 3. BUDGET BASIS OF ACCOUNTING Budgets are adopted annually on a basis consistent with generally accepted accounting principles. Appropriations authorized for the current year are increased by the amount of encumbrances carried forward from the prior year. Budgetary controls for the special revenue funds are established in accordance with the applicable grant agreement which covers a period . other than the Towns fiscal year. Budgets have been adjusted to reflect the Town's fiscal year. F. CHANGES IN ACCOUNTING POLICIES There have been no changes in accounting policies. G. DEPARTURES FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) There are no departures from generally accepted accounting principles (GAAP). H. INSURANCE The Town assumes the liability for most risk including, but not limited to, property damage and personal injury liability. Judgements and claims are recorded when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. I. VACATION AND SICK LEAVE AND COMPENSATORY 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 and sick leave and compensatory absences accumulated by governmental fund type employees have been recorded in the general long-term obligations account group. Payment of vacation and sick leave recorded in the general long-term obligations account group 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 and sick leave and compensatory absences when such payment becomes due. J. POST RETIREMENT BENEFITS In addition to providing pension benefits, the Town provides health insurance coverage and survivor benefits for retired employees and their survivors. Substantially, all of the Town's employees may become eligible for these benefits ff they reach normal retirement age while working for the Town. Health care benefits and survivors benefits are provided through either an insurance company or the Risk Retention Fund whose premiums are based on the benefits paid during the year. The Town recognizes the cost of providing benefits by recording its share of insurance premiums or the aetuai benefits paid from the Risk Retention Fund as an expenditure in the year paid. During the year . $ 814,710 was paid on behalf of 53 retirees and 184 active employees and is recorded as an expenditure in the Risk Retention Fund and the Special Revenue Fund. The cost of providing benefits for 53 retirees is not separable from the cost of of providing benefits for the 184 active employees. L. TOTAL COLUMNS ON THE GENERAL PURPOSE FINANCIAL STATEMENTS Total columns on the general purpose financial statements are captioned t'Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or changes in financial position in conformity with generally accepted accounting principles, nor is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of the data. II. STEWARDSHIP, COMPLIANCE, ACCOUNTABILITY A. MATERIAL VIOLATIONS OF FINANCE REALTED ACTIVITES - There are no material violations of finance-related provisions. B. DEFICIT FUND BALANCES 1. The General Fund had a deficit fund balance at December 31, 1990. Pricipal factors which caused this deficit are as follows: In it's 1990 Budget, $775,000 was appropriated of an anticipated 1989 unexpended Fund Balance. However, expenses amounting to $580,633 the Town had anticipated would be paid from Bond proceeds were charged to the 1989 Operating Budget, since the referendum to approve said financing was defeated by the electorate. The net effect resulted in an actual 1989 Fund Balance of $366,617. -38~ Based on prior years' mortgage tax allocations of $607,746 for 1989, $689,847 for 1988 and $894,105 for 1987, the Town estimated a mortgage tax allocation for 1990 of $600,000. However, due to a less than anticipated number of mortgages closed for the period October 1, 1989 through September 30,1990, the actual amount of the Town's 1990 mortgage tax allocation was $492,901. To provide the necessary cash and appropriations for 1991, an appropriation has been included in the 1991 budget to fund the deficit in the amount of $200,000. 2. The Capital Projects Fund had a deficit fund balance at December 31, 1990. The factor which caused this deficit is as follows: Bond Anticipation Notes were issued to finance the various projects included in this fund; appropriations were not included in the 1990 budget for this portion of the notes since this portion of the notes is due in ensuing years. Appropriations have been included in the 1991 budget to redeem the portion of the notes due in 1991. Appropriations wili be included in foliowing years' budgets to redeem the remainder of the notes issued to finance the projects. C. OVERDRAWN APPROPRIATIONS - There are no overdrawn appropriations. III.DETAIL NOTES ON ALL FUNDS AND ACCOUNT GROUPS A. ASSETS 1. CASH AND INVESTMENTS Town investment policies are governed by state statutes. In addition, the Town has its own written investment policy. Town monies are deposited in FDIC insured commercial banks or trust companies located within the state. The Supervisor is authorized to use demand accounts and certificates of deposits. Permissible investments include obligations of the U.S. Treasury and U.S. Agencies, repurchase agreements, and obligations of New York State or its localities. Collateral is required for demand deposits and certificates of deposit at 105 percent of all deposits not covered by federal deposit insurance. Obligations that may be pledged as coliateral are obligations of the United States and its agencies and obligations of the State and its municipalities and school districts. The written investment policy requires that repurchase agreements be purchased from banks located within the State and that underlying securities must be obligations of the federal government. Underlying securities must have a market value of at least 105 percent of the cost of the repurchase agreement. Deposits. All deposits, including certificates of deposits, are carried at cost plus accrued interest. Deposits at year-end were entirely covered by federal depository insurance or by collateral held by the Town's banking institutions in the Towns name. 2. CHANGES IN FIXED ASSETS Fixed assets increased from $10,230,092 to $10,386,394. B. LIABILITIES 1. PENSION PLANS General Information The Town participates in the New York Employees' Retirement System and the New York State Policemen's and Firemen's Retirement System. These are cost sharing multiple public employer retirement systems. Obligations of employers and employees to contribute and benefits to employees are governed by the New York State Retirement and Social Security Law (NYSRSSL). The systems offer a wide range of plans and benefits which are related to years of service and final average salary, vesting of retirement benefits, death and disability benefits and optional methods of benefit payments. All benefits generally vest after ten years of credited service. The NYSRSSL provides that all participants in each system are jointly and severally liable for any actuarial unfunded amounts. Such amounts are collected through annual billings to all participating employers. Generally, all employees, except certain part-time employees, participate in the Systems. The Systems are noncontributory except for employees who joined the Employees' Retirement System after July 27, 1976 who contribute 3% of their salary. Employee contributions are deducted by employer's from employee's paychecks and are sent currently to the Employees' Retirement System. Employee Groups Covered Nearly all Town of Southold employees are eligible for membership in the systems. All employees employed in a full-time position after June 30, 1976 are mandatory members. The total payroll for all employees of the Town of Southold for fiscal year 1990 was $6,490,276, of which $3,724,914 was attributable to the Employees' Retirement System and $2,329,935 was attributable to the Policemen's and Firemen's Retirement System. Payments and Funding Status Through 1988, the Systems billed all participating employers by May 31 each year. Billings were based on salaries paid during the System's fiscal year which ended on March 31 of the previous calendar year, and in accordance with funding requirements determined by the System's actuary. Employers were required to remit in full by June 30. In 1989 and future years, the System's billings are based on Chapter 62 of the Laws of 1989 of the State of New York. This legislation requires participating employers to begin making payments on a current basis, while amortizing existing unpaid amounts relating to the System's fiscal years ending March 31, 1988 and 1989 (which otherwise were to have been paid on June 30, 1989 and 1990, respectively) over a 17 year period, with an 8.75% interest factor added. The payment covering the System's fiscal year ending March 31, 1990 and the first amortization instaliment was paid December 15, 1989. December l§th will be the payment date for amounts due on each succeeding year's liability and portion of the amortized amount. Any under or overpayment of the estimate paid for the System's fiscal year ending March 31, 1990 will be included in the succeeding December 15th payment. The acturial cost method used by the System to determine the annual contributions from employees through March 31, 1990 was the aggregate cost method. Under this method the excess of the acturial liabilities over the actuarial assets was funded by employees as a level percentage of salary over the current members' future working lifetimes. Subsequent to the System's March 31, 1990 fiscal year-end, the Legislature amended the Retirement and Social Security Law (Chapter 210) mandating a change to a modified projected unit cost method (PUC) for the fiscai year ending March 31, 1991. The new method utilizes a rolling amortization period for any difference between acturiai assets and actuarial accrued liabilities. Approximately 17% of such differences is recognized each year. The legislation also allows the reduction of the annual amortization payment by any yearly surplus due to the rolling amortization. In addition, the legislation required a retroactive change in the acturial smoothing method for years ended March 31, 1989 and March 31, 1990 from a four year smoothing to a five year smoothing. The anticipated effect of these changes for the year ending March 31, 1991 is that the Employees' Retirement System contributions will generally be zero, while the Police and Fire Retirement System contributions will generally be lower. The anticipated long term affect is that employer contributions wiLi be, for a time, less than they would have been under the aggregate method, but it is anticipated that future contributions will exceed those under the aggregate cash method. The total pension liability for services rendered by current employees of the Town of Southold during the current fiscai year includes $180,852 employers share and $105,764 paid by employees as a current contribution, representing less than 1% of the covered salaries paid. The total unpaid liability at the end of the fiscal year was $726,770, and is reported in the General Long-Term Debt Account Group. The Pension Benefit Obligation (PBO) of credited projected benefits is a standardized disclosul'e measure of the actuarial present value of pensiol~ benefits, adjusted for the effects of projected salary increases estimated to be payable in the future as a result of employees service to date. The retirement systems do not make separate measurements for individual employers. The PBO of credited projected benefits at March 31, 1990 for the Employee's Retirement System, determined through an actuarial valuation performed as of that date, is $36.97 billion. The net assets available to pay benefits at that date is $40.7 billion. The Town's employer contribution requirement was less than 1% of totai contributions required of all employers participating in this system. The PBO of credited projected benefits at March 31, 1990 for the Polieemen's and Firemen's Retirement System determined through an actuarial valuation performed as of that date is $ 7.31 billion. The net assets available to pay benefits at that date is $7.06 billion. The Town's employer contribution requirement was less than 1% of total contributions required of all employers participating in this system. Historical trend information showing the progress in accumulating sufficient assets to pay benefits when due is presented in the Annuai Financial Report of the two systems. Additional detailed information concerning the systems may aiso be found in the Report. 2. SHORT-TERM DEBT Liabilities for bond anticipation notes (BAN's) are generally accounted for in the capital projects funds. Principal payments on BAN's must be made annuaily. State law requires that BAN's issued for capitai purposes be converted to long-term obligations within five years after the originai issue date. However, BAN's issued for assessable improvement projects may be renewed for periods equivalent to the maximum life of the permanent financing, provided that stipulated annual reductions of principal are made. -42- To Be Redeemed 1991 Interest Budget Rate Appropriation Bonds Description Amount Equipment-Telephone 6,000 6.00 6,000 Building Repairs 8,000 6.30 8,000 Equipment-Compactor 70,000 5.99 35,000 35,000 Equipment- Scale 56,000 6.28 28,000 28,000 Road Improvement 2,400 6.35 1,200 1,200 Pound Improvement 28,000 6.20 14,000 14,000 Equipment- Computer 90,000 6.20 45,000 45,000 Equipment- Computer 36,000 6.29 12,000 24,000 Equipment- Computer 128,000 6.31 32,000 96,000 Equipment- Console 30,000 6.20 15,000 15,000 Equipment-Payloader 51,000 6.24 17,000 34,000 Highway Equipment 136,000 6.25 34,000 102,000 Equipment-Scale 120,000 6.19 30,000 90,000 Building Repairs 60,000 5.89 12,000 48,000 Fuel System 50,000 6.08 10,000 40,000 Road Improvement 40,000 6.29 8,000 32,000 Land Acquisition 600,000 6.30 600,000 Various Purposes 100,000 6.12 20,000 80,000 $1,611,400 $327,200 $1,284,200 3. LONG-TERM DEBT a. At December 31, 1990, the total outstanding indebtedness of the Town, excluding the above BAN's aggregated $4,135,602. b. Serial Bonds and Capital Notes - 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 full faith and credit debt of the local government, are recorded in the General Long-Term Debt Account Group. The provision to be made in future budgets for capital indebtedness represents the amount exclusive of interest, authorized to be collected in future years from taxpayers and others for liquidation of the long-term liabilities. c. Other Long-Term Debt - In addition to the above long-term debt the local government had the following noncurrent liabilities: 1. Due to Employees' Retirement System. Represents the noncurrent portion of the liability to the various state retirement systems. 2. Compensated Absences. Represents the value of earned and unused portion of the liability for compensated absences. d. Summary Long-Term Debt - The following is a summary of long-term liabilities outstanding at December 31, 1990 by fund type and account group: Liability Serial Bonds Capital Notes Total Bonds and Notes General-Long Term Debt Account Group $1,310,000 87,500 $1,397,500 Unbilled Retirement Compensated Absences Total Long-Term Debt 726,770 2,011,332 $4,135,602 e. The following is a summary of changes in the long term liabilities for the period ended December 31, 1990: Payable at Beginning of Fiscal Year Bonds and Notes Unbilled Retirement Compensated Absences $1,385,000 $851,121 $2,157,485 Additions 87,500 Deletions 75,000 Payable at End of Fiscal Year $1,397,500 $726,770 $2,011,332 Additions and deletions to unbilled retirement and compensated absences are shown net since it is impracticable to determine these amounts separately. f. Long Term Debt Maturity Schedule - The following is a statement of the serial bond and Capital Note with corresponding maturity schedules: Serial Bond Payable from: General Fund Description: Agriculture Development Rights Dated: October 1, 1984 Issue Amount: $1,662,500 Interest Rate: 9.1% Final Maturity Date: April 1, 2005 Balance as of December 31, 1990:$1,310,000 -44- Capital Note Payable from: General Fund Description: Acquisition of Land Dated: November 9, 1990 Issue Amount: $87,500 Interest Rate: 6.33% Final Maturity Date: November 9, 1992 Baiance as of December 31, 1990:$87,500 g. The following table summarizes the Town's future debt service requirement of the Serial Bond as of December 31, 1990: Year Ending Principal Interest 1991 75,000 115,798 1992 75,000 108,973 1993 75,000 102,148 1994 75,000 95,323 1995 85,000 88,043 1996-2000 425,000 324,188 2001-2005 500,000 113,750 h. In addition to the debt shown above, the following long-term debt has been authorized but remains unissued at December 31, 1990 (See Note VII). Payable from: General Fund Description: Open Space Acquisition Serial Bonds Authorized Amount: $1,062,500 Payable from: General Fund Description: Hydrogeologic Investigation of Landfill Authorized Amount: $400,000 Payable from: Generai Fund Description: Gull Pond Bnikhead Reconstruction Project Authorized Amount: $100,000 C. INTERFUND RECEIVABLES AND PAYABLES Interfund receivables and payables at December 31, 1990 were as follows: Interfund Interfund Fund Receivables Payables General Fund Whole Town $ 4,580 Highway Fund Whole Town 1,407 Highway Fund Part Town 38 Fire Protection District 27,682 Capital Projects Trust and Agency Total Interfund $33,707 $ 38 4,321 29,348 $33,707 -45- VIII.' D. FUND EQUITY 1. RESERVES The capital projects fund equity include 18 capital reserve funds established for varying purposes. E. DEFERRED COMPENSATION PLAN No employees have elected to participate in a deferred compensation plan. F. LEASE COMMITMENTS AND LEASED ASSETS The Town leases several photocopy machines under operating leases. Total rental expenditure on this leased equipment for the fiscal year ended December 31, 1990 were approximately $4,300. VI. CONTINGENCIES The local government has received grants which are subject to audit by agencies of the State and Federal Governments. Such audits may result in disallowances and a request for a return of funds to the federal and state governments. Based on past audits, the local government administration believes disallowances, ff any, will be immaterial. VII. SUBSEQUENT EVENTS In February, 1991, the Town issued Various Purpose Serial Bonds in the amount of $2,708,500. The proceeds of the Bonds, together with available funds in the amount of $175,000, will be used to retire outstanding indebtedness in the amount of $1,321,000 evidenced by Bond Anticipation Notes. The issuance of the Bonds will provide the Town with additional funds' of $1,562,500 for Open Space Acquisition ($1,062,500), Hydrogeologic Investigation of the Landfill ($400,000) and a Bulkhead Reconstruction Project ($100,000). The interest rate on the bonds is 6.375%. The final maturity date of the bonds is 2011. CONTINGENCIES AND CLAIMS Attached hereto is letter from the Town Attorney stating current status of lawsuits against the town. -46- HARVEY A. ARNOFF oTo.,wn Attorney MATFHEW G. KIERNAN Assistant Town Attorney OFFICE OF THE TOWN ATTORNEY TOWN OF SOUTHOLD SCOTF L. HARRIS Supervisor Town Hall, 53095 Main Road P.O. Box 1179 Southold, New York 11971 Fax (516) 765-1823 Telephone (516) 765-1800 May 31, 1991 E.F. Kaldor, C.P.A., P.C. Certified Public Accountant 162 Grlfflng Avenue Riverhead, NY 11901 Dear Ms. Kaldor: As the chief legal officer of the Town of Southold I have analyzed the llst of lawsuits existing against the Town of Southold as of December 31, 1990, a copy of that list is annexed hereto. For your ease in handling my opinion, the following matters may result in a settlement or judgment being paid by insurance proceeds: 1. Robert Arner v. Town of Southold 2. Louis Buonagura v. Town of $outhold 3. Patricia Burleson v. Town of Southold Richard Dupre v. Town of $outhold 5. Frances Jackson et.al., v. Town of Southold 6. Kouladis v. Southold Police Department 7. Petratos v. Town of Southold 8. Tallerak v. Town of $outhold 9. $chroeder v. Town of $outhold 10. Marcln v. Town of Southold Of the remaining lawsuits there is the possibility that the Town would be liable for monetary damages in the following proceedings: 1. Inland Homes v. Zoning Board of Appeals 2. Xikis v. Planning Board 3. Zahra v. Building Department In each of the above instances it is not my opinion that the Town will be found to be liable but, there always remains the possibility that plaintiff would succeed after a trial of all of the issues. All remaining lawsuits are for declaratory judgments etc., none of which should result in any type of monetary relief to the petitioner. Elaine F. Kaldor ~May 31, 1991 Page 2 I trust that would be sufficient for you to complete financial statements for the Town of Southold. Should you wish any additional information from me, please feel fr'ee to contact me. HAA:mls Enc.