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HomeMy WebLinkAbout2005 REC E.'\} ED <t~ ) ~qq"'{4 . ., ,'wn Cler~ SOUTHOLD FIRE DISTRICT FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES WITH INDEPENDENT AUDITORS' REPORT December 31, 2005 . SOUTH OLD FIRE DISTRICT Table of Contents December 31, 2005 . . Paae Independent Auditors' Report . Basic Financial Statements . Balance Sheet - Governmental Funds 2 Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds 3 . Statement of Fiduciary Net Assets - Fiduciary Fund 4 . Notes to Basic Financial Statements 5 Required Supplementary Information . Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 11 . Other Supplementary Information . Schedule of Fire Protection Expenditures - Budget and Actual - General Fund 12 Combining Balance Sheet - Capital Projects Fund 13 . Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Capital Projects Funds 14 . . . . . . . . T:\Office\20,OOO's\2540Q\2005\FS\Financial 05.doc . . . . . . . . . . . . . . . . . . . COUGHLIN FOUNDOTOS o 0 CULLEN & DANOWSKI. UP VINCENT D CULLEN. CPA lAMES E. DANOWSKI. CPA I[LL S F[CHTER. CPA CHR.ISTOPHER V RE[NO CPA PETER F RODRIGUEZ. CPA STEPHEN I WAGNER CPA ALAN YU. CPA INDEPENDENT AUDITORS' REPORT To the Board of Fire Commissioners Southold Fire District Southold, New York We have audited the accompanying financial statements of each major fund and the fiduciary fund of the South old Fire District as of and for the year ended December 31, 2005, which collectiveiy comprise a portion of the Southold Fire District's basic financial statements required by accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the South old Fire District's management Our responsibility is to express an opinion on these financial statements based on our audit We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 opinions. Management has not presented government-wide financial statements to display the financial position and changes in financial position of its governmental activities. Accounting principles generally accepted in the United States of America require the presentation of government-wide financial statements. The amounts that wouid be reported in government-wide financial statements for the Southold Fire District's governmental activities are not reasonably determinable. In our opinion, because of the effects of the matter discussed in the preceding paragraph, the financial statements referred to above do not present fairly, in conformity with accounting principles generally accepted in the United States of America, the financial position of the South old Fire District, as of December 31, 2005, or the changes in its financial position for the year then ended. ~~; .:f:.... .('?$:tA...Q,_~~~:LLP March 17, 2006 1650 ROUTE 112, PORT JEFFERSON STATiON, NEW YORK 11776.3060 C :J PHONE: 631-473.3400' FAX, 631-473,4863, WWW.CFCD.COM . . . . . . . . . . . . . . . . . . . SOUTHOLD FIRE DISTRICT Statement of Revenues, expenditures and Changes In Fund Balance - Governmental Funds Forthe Year Ended December 31, 2005 Total Cap~al Governmental General Projects Funds REVENUES Real property taxes $ 1,206,783 $ $ 1,206,783 Interest and earnings 14,648 13,480 28,128 Rentals 11,000 11,000 Sale of equipment 2,025 2,025 I nsurance recoveries 398 398 Miscellaneous 290 290 Total Revenues 1,235,144 13,480 1,248,624 EXPENDITURES Personal services 179,529 179,529 Equipment and capital outlay 155,587 594,845 750,432 Fire protection 466,1 02 466,102 State retirement system 16,522 16,522 Service award program 241 ,944 241,944 Social security 14,514 14,514 Workers' compensation 41,514 41,514 Medical and accident insurance 14,762 14,762 Principal retirement 100,000 100,000 I nterest payment 65,775 65,775 Total Expenditures 1 ,296,249 594,845 1,891,094 Excess (Deficiency) of Revenues Over Expenditures (61,105) (581 ,365) (642,470) OTHER SOURCES AND USES Operating transfers in 382,000 382,000 Operating transfers (out) (382,000) (382,000) Total Other Sources (Uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (61,105) (581,365) (642,470) Fund Balance w Beginning of Year 121,061 816,365 937,426 Fund Balance - End of Year $ 59,956 $ 235,000 $ 294,956 See Notes to Financial Statements - 3- I I SOUTHOLD FIRE DISTRICT Statement of Flduclery Net Aeaeta . Fiduclery Fund December 31,2005 I Trust & Agency ASSETS Due from other funds $ 25,158 Service award program assets 2,058,382 Total Assets $ 2,083,540 LIABILITIES Service awards $ 2,058,382 Other liabilities 25,158 Total Uabilities $ 2,083,540 I I I I I I I I I I I I I I I See Notes to Financial Statements -4- I . . . . . . . . . . . . . . . . . . . SOUTHOLD FIRE DISTRICT Notes to Basic Financial Statements 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Southold Fire District (District), as of and for the year ended December 31, 2005, have not been prepared in conformi1y with accounting principles generally accepted in the United States of America (GMP) as applied to government units. Management has elected not to present government-wide financial statements to display the financial position and changes in financial position of its governmental activities. GMP require the presentation of government-wide financial statements. The Govemmental Accounting Standards Board (GASB) is the accepted standards setting body for establishing governmental accounting and financial reporting principles. The more significant of the District's accounting policies are described below. A. Financial Reporting Entity The District is governed by Municipal Law and other laws of the state of New York. The scope of activities included within the accompanying financial statements are those transactions which comprise District operations, and are govemed by, or significantly influenced by, the Board of Fire Commissioners. The primary function of the District is to provide fire protection to the communi1y. Services such as firefighting, fire prevention and public education support the primary function. The financial reporting enti1y includes all funds, functions and organizations over which the District officials exercise oversight responsibili1y. Oversight responsibility is determined on the basis of financial interdependency, selection of governing authori1y, designation of management, ability to significantly influence operations and accountabili1y for fiscal matters. B. Basis of Presentation Fund Financial Statements The fund financial statements provide information about the District's funds, including fiduciary funds. Separate statements for each fund category, governmental and fiduciary, are presented. The emphasis of fund financial statements is on major governmental funds as defined by GASB, each displayed in a separate column. The District's financial statements reflect the following fund categories: Governmental Fund Types 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 based upon determination of financial position and changes in financial position. The following are the District's governmental fund types: a) General Fund - the general fund is the principal operating fund of the District. It is used to account for all financial resources except those required to be accounted for in another fund. b) Capital Projects Fund - the capital projects fund is used to account for the accumulation of financial resources and the disbursements for the acquisition, construction or renovation of major capital facilities, or equipment. Fiduciary Funds - are used to account for assets held by the District in a trustee or custodial capaci1y. C. Measurement Focus and Basis of Accounting The governmental fund statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The District considers all revenue reported in the governmental funds to be available if the revenues are collected within the current period or soon enough thereafter to be used to pay liabilities for the current period, except for real property taxes, which are considered to be available if they are collected within 60 days after the end of the year. - 5- . . . . . . . . . . . . . . . . . . . SOUTHOLD FIRE DISTRICT Notes to Basic Financial Statements (Continued) Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, unfunded claims and judgments, and unfunded compensated absences, which are recognized as expendnures to the extent they have been paid. General capnal asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisnions under capital leases are reported as other financing sources. D. Cash and Investments The District's cash and cash equivalents consist of cash on hand, demand deposns and short-term investments with original maturnies of three months or less from date of acquisnion E. Property Taxes Real property taxes are levied annually by the District no later than November 1 st and become a lien on December 1st. Taxes are collected during the period January 10.h to May 31st. The District's tax levy is collected by the Town of Southold and then remnted to the District. The County of Suffolk is responsible for all uncollected taxes. F. Due to/from Other Funds The amounts reported on the Balance Sheet for due to and due from other funds represents amounts due between different governmental fund types. A detailed description of the individual fund balances at year end is provided subsequently in these notes. G. Interfund Transfers The operations of the District give rise to certain transactions between funds, including transfers of expenditures and revenues to provide services and construct assets. This is either by budget, Board resolution or permissive referendum. Interfund transfers and the related receivables and payables (i.e., due from/to other funds) have been recorded in the funds where applicable. H. Accrued Liabilities and Long-Term Obligations In the fund financial statements, liabilities are reported only to the extent that they are due for payment during the current year. I. Encumbrances Encumbrance accounting, under which purchase orders, contracts, and other commitments of the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is used in the general fund and capital projects fund. Encumbrances outstanding at year end are reported as reservations of fund balance since they do not constitute expendnures or liabilities. J. Fund Balance - Reserves and Deslgnatlona Portions of fund balance are reserved or designated to enher satisfy legal restrictions or to plan for future expenditures. Interest earned on reserve fund resources becomes part of the respective reserve fund. While a separate bank account is not necessary for each reserve fund, a separate identity for each reserve fund must be maintained. The following is a description of the reserves utilized by the District: Reserved for Encumbrances - represents the amount of outstanding encumbrances at the end of the fiscal year. Reserved for Caoital Proiects - used to finance all or part of the cost of construction, reconstruction or acquisition of a specific or type of capital improvement or acquisition of a specific item or items or type of equipment. - 6- . . . . . . . . . . . . . . . . . . . SOUTHOLD FIRE DISTRICT Notes to Basic Financial Statements (Continued) K. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. DEPOSITS WITH FINANCIAL INSTITUTIONS AND INVESTMENTS The District's investment policies are governed by state statutes and District policy. Resources must be deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks or trust companies located within the state. 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 and time deposits and certificates of deposit not covered by FDIC insurance. Obligations that may be pledged as collateral are obligations of the United State and its Agencies and obligations of New York State and its municipalities. Investments are stated at fair value. Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. GASB directs that deposits be disclosed as exposed to custodial credit risk if they are not covered by depository insurance and the deposits are either: A. Uncollateralized, B. Collateralized by securities held by the pledging financial institution, or C. Collateralized by securities held by the pledging financial institution's trust department or agent but not in the District's name. None of the District's aggregate bank balances, not covered by depository insurance, were exposed to custodial credit risk as described above at year-end. The District did not have any investments at year-end or during the year. Consequently, the District was not exposed to any material interest rate risk. The District participates in a multi-municipal cooperative investment pool agreement pursuant to New York State General Municipal Law Article 5-G, ~119-0, whereby it holds a portion of the investments in cooperation with other participants. At December 31, 2005, the District held $300,699 in investments consisting of various investments in securities issued by the United States and its agencies. The investments are highly liquid, and considered to be cash equivalents. The cost of the investment pool shares are considered to approximate market value. The investment pool is categorically exempt from the New York State collateraliza1ion requirements. 3. INTERFUND TRANSACTIONS Interfund balances at December 31, 2005 are as follows: I nterfund Interfund Interfund Interfund Receivable Payable Revenues Expenses General fund $ 19,726 $ 40,223 $ $ Capital reserve 40,018 44,679 362,000 382,000 Trust & agency 25,158 Total $ 84,902 $ 84,902 $ 382,000 $ 382,000 -7 - SOUTHOLD FIRE DISTRICT Notes to Basic Finsnclal Statements (Continued) 4. PENSION PLANS A. New York State and Local Emolovees' Retirement SYStem Plan Description The District elected to participate in the New York State and Local Employees' Retirement System (ERS). This system is a cost-sharing, multiple-employer, defined benefit pension plan. The system offers retirement and disability benefits, annual cost of living increases, and death benefits to plan members and beneficiaries. The ERS is established pursuant to the New York State Retirement and Social Security Law to provide benefits for the state, local governments, and their employees. ERS plan benefits are guaranteed by state constitution. The system issues publicly available financial reports that include financial statements and required supplementary information. These reports may be obtained by writing or calling the system at the following location: NYS and Local Retirement Systems, Governor Smith State Office Building, Albany, NY 12244, (518) 474-1101. Funding Policy The system is noncontributory except for employees who joined the retirement system after July 27, 1976 with less than ten years of service, who contribute 3% of their salary. Regardless of start date, all members may elect to make member contributions. The Comptroller shall certify annually the rates expressed as proportions of the members' payroll, which shall be used in computing the contributions required to be made by employers to the pension accumulation fund. The District is required to contribute on an annual basis. Contributions are generally made to the ERS on December 15, for the period April 1 to March 31 of the following year based on estimated eligible employees' salaries. Contributions are adjusted in the following year based on actual salaries. The following represents the District's regular pension contribution to the system based on annual covered payroll: District Contributions Rate District Contributions 2005 10.2% $16,525 2004 11.4% $13,327 2003 4.9% $5,320 The District's contribution to the system is actuarially determined and is established and may be amended by the ERS Board ofTrustees. B. Service Award Proaram The District voters approved a Length of Service Award Program effective January 1, 1993, which is an unqualified deferred compensation plan. Under the state enabling legislation, the Service Award Program was specifically excluded from the state's retirement system. Plan Description The Service Award Program has no minimum months of service requirement for participation in the plan. All members who are credited with sufficient "Service Award Points" are eligible. The minimum age of a participant is 18; completion of one year of participation in the plan is required to collect benefits. Participants are fully vested in the fifth year of the plan. Benefits begin on the anniversary date following attainment of age 62. - 8 - SOUTHOLD FIRE DISTRICT Notes to Basic Financial Statements (Continued) Benefits The benefits provided to members of the program are established by the plan. The benefit at entitlement date is $20 per month multiplied by the total years of seNiee. Total years of seNiee cannot exceed 40 years and seNiee prior to January 1, 1993 is limited to five years. The normal form of the benefit is in monthly payments for Ine (with payments guaranteed for at least 10 years). The death benefrt represents the present value of accrued benefits. The accrued benefit represents $20 per month multiplied by the total years of credited seNiee as of the determination date, and is payable beginning at the entitlement date. The termination benefits are 0% vesting up to five years and 100% thereafter. District Information The following represents information relating to the District's participation in the above pension plan as of December 31, 2004. The 2005 information is not yet available. Present Value of Benefits Less: Assets Available for Benefits $ 4,909,767 1,9n,039 Total Unfunded Benefits Less: Unfunded Liability for Prior SeNice 2,932,728 Present Value of Future Normal Cost $ 2,932,728 Contribution Requirements The District contributes to the plan based on a group funding calculation. The assumptions for determining the contributions and present value of accrued benefits are as follows: Pre-retirement - interest rate: Post-retirement - annuity factors: 6% compounded annually 6% compounded annually The District's contribution to the Length of SeNice Award Program for the years ended December 31, 2005, 2004 and 2003 was $241,944, $225,962 and $231,068, respectively. 5. BUDGET REVISION The following recaps the 2005 budget modification: Original Budget Prior year encumbrances $ 1,209,775 86,000 Revised budget $ 1,295,775 6. COMMITMENTS AND CONTINGENCIES A. Risk Management Genera/Information The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; injuries to employees; errors and omissions; natural disasters, etc. These risks are covered by commercial insurance purchased from independent third parties. Settled claims from these risks have not exceeded commercial insurance coverage for the past two years. - 9- . . . . . . . . . . . . . . . . . . . SOUTHOLD FIRE DISTRICT Notes to Basic Financial Statements (Continued) B. Indebtness Long-term Debt Serial Bonds The changes in the Districfs Long-term indebtedness during the year ended December 31, 2005 are summarized as follows: Balance Balance January 1, December 31, 2005 Additions Reductions 2005 Serial Bonds 1,700,000 (100,000) 1,600,000 $ 1,700,000 $ $ (100,000) $ 1,600,000 C. Maturity of Long-Term Indebtedness Serial Bonds The following is a summary of maturity of long-term indebtedness: Issue Date Final Maturity Interest Rate Outstanding December 31 , 2005 2002 2017 3.7% - 4.2% 1,600,000 The following is a summary of maturing debt service requirements for the statutory installment bonds: Fiscal Year Ending December 31, Principal Interest Total 2006 $ 100,000 $ 62,025 $ 162,025 2007 100,000 58,275 158,275 2008 125,000 54,525 179,525 2009 125,000 49,837 174,837 2010 125,000 45,150 170,150 2011 and Thereafter 1,025,000 168,037 1,193,037 $ 1,600,000 $ 437,849 $ 2,037,849 7. SPENDING LIMITATION The District did not exceed the statutory spending limitation imposed by state law. -10 - . . . . . . . . . . . . . . SOUTHOLD FIRE DISTRICT Statement of Revenues, expenditures snd Chsnges In Fund Bslence - Budget snd Actual - General Fund For the Year Ended December 31,2005 Variance Original Final Favorable Budget Budget Actual (Unfavorable) REVENUES Real property taxes $ 1,206,775 $ 1,206,775 $ 1,206,783 $ 8 Interest and earnings 3,000 3,000 14,648 11,648 Rentals 11,000 11,000 Sale of equipment 2,025 2,025 Insurance recoveries 398 398 Miscellaneous 290 290 Total Revenues 1,209,775 1,209,775 1,235,144 25,369 EXPENDITURES Personal services 191,195 179,535 179,529 6 Equipment and capital outlay 118,000 153,645 155,587 (1,742) Fire protection 397,000 467,301 466,102 1,199 State retirement system 12,000 16,525 16,522 3 Service award program 246,000 242,000 241,944 56 Social security 13,805 14,515 14,514 1 Workers' compensation 50,000 41,514 41,514 Medical and accident insurance 16,000 14,765 14,762 3 Principal retirement 100,000 100,000 100,000 I nterest payment 65,775 65,775 65,775 Total Expenditures 1,209,775 1,295,775 1,296,249 (474) Excess of Revenues Over Expenditures (86,000) (61,105) 24,895 Excess (Deficiency) of Revenues Over Expenditures and Other Uses (86,000) (61,105) 24,895 Fund Balance - Beginning of Year 86,000 121,061 35,061 Fund Balance - End of Year $ $ $ 59,956 $ 59,956 See Independent Auditors' Report -11- I SOUTHOLD FIRE DISTRICT I Schedule of Fire Protection Expenditures - Budget snd Actusl - General Fund For the Year Ended December 31 , 2005 I Variance Original Final Favorable Budget Budget Actual (Unfavorable) Administrative I Office supplies & computers $ 6,000 $ 6,400 $ 6,336 $ 64 Legal fees & expenses 12,000 10,200 10,200 Aud~lng & accounting 12,000 12,500 12,393 107 Miscellaneous 5,000 5,000 4,428 572 I Total Administrative 35,000 34,100 33,357 743 Utilities Utilities & telephone 60,000 60,400 60,353 47 I Hydrant rental 50,000 49,600 49,585 15 Total Utilities 110,000 110,000 109,938 62 Travel, conventions, etc. 20,000 17,300 17,287 13 I Insurance 88,000 51 ,488 51,344 142 I Firefighters expense Medical exams 7,000 15,815 15,809 6 Fire training seminars 10,000 5,700 5,678 24 Dept. dinners & awards 9,000 9,000 8,856 144 I Total Firefighters expense 26,000 30,515 30,341 174 Building Building maintenance 50,000 152,200 152,147 53 I Building - substation 30,000 32,200 32,200 Total Building 80,000 184,400 184,347 53 Fire equipment & alarm . Apparatus maintenance 40,000 20,580 20,556 24 Equipment maintenance 18,000 18,940 18,932 8 Total Fire equipment & alarm 58,000 39,520 39,488 32 I Total Fire Protection Expenditures $ 397,000 $ 467,321 $ 466,1 02 $ 1,219 I I . I . . See I ndependent Auditors' Report -12- . I I SOUTHOLD FIRE DISTRICT Combining Balance Sheet - Capital Projects Fund For the Year Ended December 31,2005 II Cap~al Building Equipment Proiect Reserve Reserve Total ASSETS Cash $ 4,914 $ 39,707 $ 195,040 $ 239,661 Due from other funds 39,765 253 40,018 Total Assets $ 44,679 $ 39,960 $ 195,040 $ 279,679 LIABILITIES Due to other funds $ 44,679 $ $ $ 44,679 Total Liabilities 44,679 44,679 FUND BALANCE Reserved for encumbrances 30,480 30,480 Reserved for capital projects 9,480 195,040 204,520 Total Fund Balance 39,960 195,040 235,000 Total Liabilities and Fund Balance $ 44,679 $ 39,960 $ 195,040 $ 279,679 I I II II II II II II II . . . II II . See independent Aud~ors' Report - 13- II I SOUTHOLD FIRE DISTRICT Combining Statement of Revenues, Expenditures and Changes In Fund Bslance . Capital Projects Fund For the Year Ended December 31,2005 Capital Building Equipment Project Reserve Reserve Total REVENUES Interest and earnings $ 1,982 $ 11,498 $ 13,480 T atal Revenues 1,982 11,498 13,480 EXPENDITURES Equipment and cap~al outlay 374,894 219,951 594,845 Total Expenditures 374,894 219,951 594,845 Excess (Deficiency) of Revenues Over Expenditures (374,894) (217,969) 11,498 (581,365) OTHER SOURCES AND USES Operating transfers in 150,000 232,000 382,000 Operating transfers (out) (150,000) (232,000) (382,000) Total Other Sources (Uses) 150,000 82,000 (232,000) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (224,894) (135,969) (220,502) (581,365) Fund Balance - Beginning of Year 224,894 175,929 415,542 816,365 Fund Baiance - End of Year $ $ 39,960 $ 195,040 $ 235,000 I I I I I I I I I I I I I I I I I See Independent Auditors' Report -14 - I