HomeMy WebLinkAbout2007FINANCIAL SECTION
Independent Auditors' Report ..................................................................................................................
1-2
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis ..................................................................................................
3-11
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Assets .........................................................................................................................
12
Statement of Activities ........................................................................................................................ 13
Fund Financial Statements
Governmental Fund Financial Statements
Balance Sheet and Reconciliation of the Governmental Funds Balance Sheet to
The Statement of Net Assets ............................................................................................................ 14-15
Statement of Revenues, Expenditures, and Changes in Fund Balances and
Reconciliation of the Governmental Funds Statement of Revenues, 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 ............................................................................................................. 19-36
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT DISCUSSION AND
ANALYSIS
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
General Fund ....................................................................................................................................... 37
Highway Fund ................................................................................................................ 38
OTHER SUPPLEMENTARY INFORMATION
COMBINING FUND STATEMENTS:
Non-major Governmental Funds Combining Balance Sheet .................................................................................................................
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ........................
39
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DISCRETELY PRESENTED COMPONENT UNITS
Discretely Presented Component Units:
Combining Statement of Net Assets ...................................................................................................... 41
Combining Statement of Activities ........................................................................................................ 42
Cef~tl~lEd PUBLIC ACCOUNTANTS, E~USINESS ADVISORS AND CONSULtANtS
25 Suffolk Court, Hauppauge, New York Il 788
631.434.9500 · Fax 631.434.9518
INDEPENDENT AUDITORS'REPORT
Honorable Supervisor and Town Board
Town of Southold
Southold, New York
We have audited the accompanying financial statements of the governmental activities, the aggregate
discretely presented component units, each major fund, and the aggregate remainin9 fund information of
the Town of Southold, New York, as of December 31, 2007, and for the year then ended, which
collectively comprise the Town's basic financial statements as listed in the table of contents. These
financial statements are the responsibility of the Town's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with auditing
standards generally accepted in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
matedal misstatement. An audit includes examining, on a test basis, evidence suppoding 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 of the Town of Southold's discretely presented component units with the
exception of one, the Fishers Island Ferry District, were not audited as of the report date, nor were we
able to satisfy ourselves as to those financial activities by other auditing procedures. The discretely
presented component units represent 29.5%, 34.8% and 35.4%, respectively, of the assets, net assets
and revenues of the aggregate 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 repods of the other auditors.
In our opinion, except for the effects of such adjustments if any as might have been determined to be
necessary had the unaudited component units financial statements been audited and based on our audit
and the reports of other auditors, the financial statements referred to above present fairly, in all material
respects, the respective financial position of the governmental activities, the aggregate discretely
presented component units, each major fund and the aggregate remaining fund information of the Town
of Southold, New York, as of December 31, 2007, and the respective changes in financial position for the
year then ended in conformity with accounting principles generally accepted in the United States of
America.
The Management's Discussion and Analysis and the budgetary information are not a required part of the
basic financial statements but are supplementary information required by accounting principles generally
accepted in the United States of America. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation of the
supplementary information. However, we did not audit the information and express no opinion on it.
ALBRECHT, VIGGIANO, ZURECK ~ COMPANY, P.C.
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Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively compdse 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
have been subjected to the auditing procedures applied in the audit of the basic financial statements of
the Town of Southold, New York, and, in our opinion, is fairly presented in all material respects in relation
to the basic financial statements taken as a whole.
Hauppauge, New York
October 2, 2008
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REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
The followin9 is a discussion and analysis of the Town of Southold's financial performance, providin9 an overview
of the Town's financial activities for the year ended December 31, 2007. Use this section in conjunction with the
Town's basic financial statements.
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The Statement of Net Assets and the
Statement of Activities provide information about the activities of the Town as a whole and present a longer-
term view of the Town's finances. For governmental activities, these statements tell how these services were
financed in the short term as well as what remains for future spending. Fund financial statements also report
the Town's operations in more detail than the government-wide statements by providing information about the
Town's most significant funds. The remaining statements provide financial information about activities for
which the Town acts solely as a trustee agent for the benefit of those outside of the government.
Reportin.cI the Town as a Whole
The Statement of Net Assets and the Statement of Activities
One of the most important questions asked about the Town's finances is, "is the Town as a whole better off or
worse off as a result of the year's activities?" The Statement of Net Assets and the Statement of Activities
report information about the Town as a whole and about its activities in a way that helps answer this question.
These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the
accounting used by most private-sector companies. The Statement of Activities is significantly different than a
typical Statement of Revenues, Expenses, and Changes in Fund Balance. You will notice that expenses are
listed in the first column with revenues from that particular program reported to the right. The result is a net
(expense)/revenue. The reason for this kind of format is to highlight the relative financial burden of each of the
functions on the Town's taxpayers. It also identifies how much each function draws from the general revenues
or if it is self-financing through fees and grants. All of the current year's revenues and expenses are taken into
account regardless of when cash is received or paid.
These two statements report the Town's net assets and their respective changes. You can think of the Town's
net assets--the difference between assets and 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; culture and
recreation and home and community services. Property taxes, sales taxes, franchise fees, fines, and
state and federal grants finance these activities. The Town also charges fees to customers to help it
cover the cost of certain services it provides.
Component units - The Town includes seven separate legal entities in its report (one ferry district, one
sanitation district, one mosquito district and four park districts). Although legally separate, these
component units are important because the Town is financially accountable for them. Complete
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, 2007
Reportin,q the Town's Most Si.qnificant Funds
Fund Financial Statements
The fund financial statements provide detailed information about the most significant funds--not the Town as a
whole. Some funds are required to be established by state law and by bond covenants. However, the Town
establishes many other funds to help it control and manage sources of fundin9 and spending related to specific
activities.
The Town's basic services are reported in governmental funds, which focus on how money flows into and out
of those funds and the balances left at year-end that are available for spending. These funds are reported
using an accountin9 method called modified accrual accounting, which measures cash and all other financial
assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term
view of the Town's 9eneral 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 describe the relationship (or differences) between
9overnmental activities (reported in the Statement of Net Assets and the Statement of Activities) and
governmental funds in a reconciliation that follows these fund financial statements.
The Town as Trustee
Reportinq the Town's Fiduciary Responsibilities
All of the Town's fiduciary activities are reported in a separate Statement of Fiduciary Net Assets. We exclude
these activities from the Town's other financial statements because the Town cannot use these assets to
finance its operations. The Town is responsible for ensuring that the assets reported in these funds are used
for their intended purposes.
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE
Our analysis below focuses on the net assets and changes in net assets of the Town's 9ovemmental activities.
Condensed Statement of Net Assets
Primary Governmental Activities
December 31, 2007 and 2006
2007 2006
Assets
Current and other assets $ 43,347,669 $ 23,769,534
Capital assets 109,728,421 100,557, 312
Total assets 153,076,090 124,326,846
Liabilities
Current and other liabilities 24,314,029 15,552,211
Long-term liabilities 28,413,510 14,773,434
Total liabilities 52,727,539 30,325,645
Net assets
Invested in capital assets,
net of related debt 83,294,421 84,334,214
Restricted:
Land acquisition 13,909,980 6,864,987
Debt service 79,339 17,572
Unrestricted 3,064,811 2,784,428
Total net assets $ 100,348,551 $ 94,001,201
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
Total assets in the Town as of December 31, 2007 were $153 million, an increase of $28.7 million. Total
liabilities as of December 31, 2007 were $52.7 million, which represents an increase of $22.4 million from
December 31, 2006. This results in a net asset balance of $100.3 million, an increase of $6.3 million. Of the
Town's net asset balance $83.2 million were invested in capital assets, net of related debt; $14 million was
restricted for future land acquisition and payments on debt service while $3 million was unrestricted.
Changes in Net Assets
Primary Governmental Activities
for the years ended December 31, 2007 and 2006
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 government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Expenses
Increase in Net Assets $
2007 2006
$ 3,260,873 $ 3,407,682
842,604 713,597
2,121,558 4,834,716
6,225,035 8,955,995
23,065,503 21,709,445
109,909 102,986
6,989,400 6,669,730
1,502,349 1,233,122
2,293,295 2,610,189
930,666 463,671
34,891,122 32,789,143
41,116,157 41,745,138
7,020,895 6,843,661
12,358,296 11,421,283
46,146 43,499
6,980,032 7,298,698
1,506,488 1,354,610
629,444 713,164
5,390,045 4,912,384
837,461 553,713
34,768,807 33,141,012
6,347,350 $ 8,604,126
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
Total Cost of Services
Primary Governmental Activities
for the year ended December 31, 2007
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Cost
of Services
$ 7,020,895
12,358,296
46,146
6,980,032
1,506,488
629,444
5,390,045
837,461
$ 34,768,807
Net Cost of Services
Primary Governmental Activities
for the year ended December 31, 2007
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Cost Program Net Cost
of Services Revenues of Services
$ 7,020,895 $ 322,350 $ 6,698,545
12,358,296 675,103 11,683,193
46,146 10,316 35,830
6,980,032 355,337 6,624,695
1,506,488 438,810 1,067,678
629,444 185,682 443,762
5,390,045 4,237,437 1,152,608
837,461 837,461
$ 34,768,807 $ 6,225,035 $28,543,772
The cost of all governmental activities this year was $34.8 million. The net cost of these services, however,
after subsidized by program revenues including charges for services and program grants, was $28.5 million.
The Town's change in net assets after general revenues of $28.8 million was an overall increase of $6.3
million.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2007
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
$14,000,000
$12,000,000
$10,000,000
Expenses and Program Revenues
Governmental Activities
I· Expenses
· Program Revenues
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$-
Public safety
Public health Transpodation
Interestondebt
Operating Capitar grants
grants and end
contributions contributions
2% 12%
Other ~~
Real
property
State aid
unrestricted
6%
Revenue by Source
Governmental Activities
for the year ended December 31, 2007
Real property taxes
State aid - unrestricted
Charges for services
Other general revenues
Operating grants and contributions
Capital grants and contributions
$ 23,065,503
2,293,295
3,260,873
9,532,324
842,604
2,121,558
$41,116,157
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
THE TOWN'S FUNDS
The general fund balance has decreased by approximately $300,000 due primarily to actual expenditures in
excess of revenues.
The following schedule presents a summary of the governmental funds - (general, special revenue, and
capital projects) revenues and expenditures for the year ended December 31, 2007, and the amount of
change and percentage of total in relation to the prior year.
REVENUES
Increase %
2007 2006 (Decrease) Change
Real property taxes
Other real property tax items
Non-properly 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
Total Governmental Fund Revenues
EXPENDITURES
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Home and community services
Culture and recreation
Employee benefits
Capital
Debt service principal and interest
Total Governmental Fund Expenditures
23,065,503 $ 21,709,041 $ 1,356,462 5.9%
109,909 102,986 6,923 6.3%
917,964 846,016 71,948 7.8%
2,559,292 2,753,784 (194,492) -7.6%
6,401,543 6,142,177 259,366 41%
1,650,001 1,376,729 273,272 16,6%
433,194 432,058 1,136 0.3%
155,477 171,763 (16,286) -10.5%
393,933 238,240 155,693 39.5%
487,582 303,912 183,670 37.7%
3,696,346 7,108,866 (3,412,520) -92.3%
1,280,709 595,604 685,105 53.5%
$ 41,151,453 $ 41,781,176 $ (629,723) -1.5%
5,322,653 $ 5,281,399 $ 41,254 0.8%
8,764,954 8,240,434 524,520 6.0%
42,608 40,092 2,516 5.9%
3,988,092 3,480,126 507,966 12.7%
1,064,905 949,740 115,165 10.8%
3,518,654 3,748,764 (230,110) -6.5%
417,654 530,270 (112,616) -27.0%
7,151,453 6,797,351 354,102 5.0%
12,436,627 13,324,188 (887,561) -7.1%
1,622,942 2,504,007 (881,065) 54.3%
$ 44,330,542 $ 44,896,371 $ (565,829) -1.3%
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, 2007
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
As of December 31, 2007 the Town had $109.7 million in net capital assets including land, buildings,
improvements, machinery and equipment, and infrastructure. The Town's component units had $22.1 million
in net capital assets including land, 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
Primary government- Total net capital assets
Component units Land
Construction in progress
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets
Less accumulated depreciation
Component units - Total net capital assets
2007 2006
$ 68,929,202 $ 58,341,517
1,067,738 220,114
8,316,323 8,307,223
13,624,650 13,618,159
10,197,793 9,916,143
71,461,368 70,694,655
173,597,074 161,097,811
63,868,653 60,540,499
$ 109,728,421 $ 100,557,312
$ 2,193,353 $ 2,213,759
404,367 12,947,081
3,500,910 3,566,885
17,028,469 3,220,732
3,504,995 3,320,899
2,172,080 2,145,280
28,804,174 27,414,636
6,702,685 6,074,572
$ 22,101,489 $ 21,340,064
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
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 bonds, which, at times, are preceded by issuance of bond anticipation notes for various periods of
time depending on the probable usefulness of the purpose of expenditure. The following sets forth a summary
of the Town's capital program.
Equipment 2008
General Fund $ 258,600
Highway Fund 110,000
Special Districts 689,000
Total Equipment $ 1,057,600
Improvements
General Fund $ 6,469,328
Special Districts 1,500,000
Total Improvements ~ 7,969,328
Total Program $ 9~026~928
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 bond credit rating from Moody's Investors Services was Aa2 as of December 31,
2007.
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, 2007 was 4.41%.
At December 31, 2007, the Town had approximately $25.0 million in long term general obligation bonds
outstanding, of which $22.4 million was for general Town purposes. Also outstanding at year-end were bond
anticipation notes in the amount of $6.2 million of which $4.4 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.
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TOWN OF SOUTHOLD
MANAGEMENT S DISCUSSION AND ANALYS S
December 31, 2007
ECONOMIC FACTORSANDNEXTYEAR'SBUDGETSAND RATEg
_Property Tax
The Town has adopted a budget for the 2008 fiscal year which factors in inflation and other adjustments to
revenues and expenditures as well as prior year positive and negative fund balances. The 2008 budget
includes an overall increase in real property tax revenues from the prior year of approximately 6.45% 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 2007, financial
assistance included state aid consisting of mortgage tax of $2.3 million, consolidated highway aid of $296
thousand, and other state aid of approximately $794 thousand. State aid per capita was $93 thousand and
County local government assistance was $286 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 2008 budget included similar amounts for this financial assistance.
Retirement System
In 2003 the Town of Southold adopted the New York State Early Retirement Incentive Program as authorized
by Chapter 69 of the Laws of 2002. The option to retire early ran through December 31, 2002. The eligibility
varied based on tier, age and years of service, but all options required that the employees be at least fifty (50)
years of age and being vested in the New York State Retirement System. The Town funds it retirement billing
currently.
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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TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF NET ASSETS
December 31, 2007
ASSETS
Current Assets:
Cash and investments
Cash - restricted
Accounts receivable
Due from fiduciary funds
Due from other governments
Due from primary government
State and federal aid receivables
Prepaid charges
Inventory of material and supplies
Total Current Assets
Non-Current Assets:
Deferred charges, net of accumulated amortization
Non-depreciable capital assets
Depreciable capital assets, net of depreciation
Total Non Current Assets
Total Assets
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities
Accrued interest payable
Bond anticipation notes payable
Due to other governments
Due to fiduciary funds
Unearned revenue
Non-current liabilities due within one year
General obligation bonds payable
Claims and judgments payable
Estimated liability for landfill closure
and postclosure care costs
Total Current Liabilities
Non-Current Liabilities:
General obligation bonds payable
Compensated absences
Claims and judgments payable
Estimated liability for landfill closure
and postclosure care costs
Total Non-Current Liabilities
Total Liabilities
NET ASSETS
Investment in capital assets, net of related debt
Restricted:
Land acquisition
Debt service
Unrestricted
Total Net Assets
Primary
Governmental Component
Activities Units
$ 27,003,180 $ 1,522,506
13,554,395
182,338 78,621
1,225,741
204,613
1,048,627
1,275
677,898
1,522,644
51,490
43,220,169 3,853,159
127,500
69,996,940 2,597,720
39,731,481 19,503,769
109,855,921 22,101,489
153,076,090 25,954,648
1,424,589 1,390,469
254,675 64,461
4,384,000 1,860,000
9,569,319
25,484
7,150,302 647,023
1,495,000 200,000
50,000
10,660
24,314,029 4,211,953
20,870,000 2,455,000
6,971,397
100,000
572,113
28,413,510 2,555,000
52,727,539 6,766,953
83,294,421 17,132,809
13,909,980
79,339 2,756
3,064,811 2,052,130
$100,348,551 $ 19,187,695
See notes to the financial statements.
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Function/Program
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF ACTIVITIES
Year ended December 31,2007
Program Revenues
Net Expenses and
Change in Net Assets
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
Primary
Government
Component
Units
PRIMARY GOVERNMENT
Government 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
7,020,895 $ 210,585 $ 111,765
12,358,296 543,811 131,292
46,146 10,316
6,980,032 39,074 20,000
1,506,488 184,273 254,537
629,444 185,682
5,390,045 2,097,448 314,694
837,461
$ 34,768,807 $ 3,260,873 $ 842,604
296,263
1,825,295
$ 6,698,545
11,683,193
35,830
6,624,695
1,067,678
443,762
1,152,608
837,461
$ 2,121,558 $ 28,543,772
193,250
86,911
2,819,880 $ 2,546,987
893,070
649,453 51,400
183,028
$ 1,220,744
$ 4,825,592 $ 2,598,387 $ ~0- $ 1,220,744
GENERAL REVENUES Real property taxes
Other real property tax items
Non-property tax items
Interest earnings
State aid - unrestricted
Other
Total General Revenues
Change in Net Assets
Net Assets at Beginning of Year
Net Assets at End of Year $
$ 193,250
86,911
(947,851)
893,070
598,053
183,028
$ 1,006,461
$ 23,065,503 $ 2,142,757
109,909 2,802
6,989,400 90,558
1,502,349 96,097
2,293,295 616,139
930,666 65,498
34,891,122
6,347,350
94,001,201
100,348,551
3,013,851
2,007,390
17,180,305
$ 19,187,695
See notes to financial statements.
-13-
TOWN OF SOUTHOLD
BALANCE SHEET
GOVERNMENTALFUNDS
December31,2007
ASSETS
Cash and Investments
Cash * restricted
Accounts Receivable
Due from Other Funds
State and Federal Aid Receivable
Due from Other Governments
Supply Inventory
Prepaids
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable
Retained Percentages
Bond Anticipation Notes Payable
Due to Other Funds
Due to Trust Funds
Due to Other Governments
Deferred Revenue
Total Liabilities
FUND BALANCE
Fund Balances - Reserved:
Encumbrances
Supply Inventory
Prepaids
Community Preservation
Land Acquisition
Debt Service
Fund Balance ~ Unreserved:
Designated - Ensuing Year's Budget
Insurance Claims
Non-Major Special Revenue Funds
Undesignated
Total Fund Balance
Total Liabilities and Fund Balance
MAJOR GOVERNMENTAL FUNDS Non-Major
Capital Governmental
General Highway Projects Funds Totals
$ 21,437,689 $ 1,193,195 $ 3,305,435 $ 1,066,861 $ 27,003,180
13,554,395 13,554,395
17,263 11,906 153,169 182,338
74,500 1,260,522 126,342 902,933 2,364,297
62,377 100,000 42,236 204,613
826,834 398,907 1,225,741
1,275 1,275
460,951 52,151 48,546 561,648
$ 22,880,889 $ 2,505,868 $ 17,496,985 $ 2,213,745 $ 45,097,487
$ 830,531 $ 146,552 $ 195,162 $ 222,172 $ 1,394,417
30,172 30,172
4,384,000 4,384,000
2,305,222 27,090 31,985 2,364,297
25,484 25,484
9,569,319 9,569,319
5,066,541 1,253,005 830,756 7,150,302
17,797,097 1,426,647 4,609,334 1,084,913 24,917,991
193,041 25,770 218,811
1,275 1,275
460,951 23,315 484,266
10,890,710 10,890,710
3,019,270 3,019,270
79,339 79,339
1,816,000 491,000 2,307,000
588,614 588,614
323,400 323,400
2,023,911 588,221 (1,101,668) 756,347 2,266,811
5,083,792 1,079,221 12,887,651 1,128,832 20,179,496
$ 22,880,889 $ 2,505,868 $ 17,496,985 $ 2,213,745 $ 45,097,487
See notes to the financial statements.
-14-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
STATEMENT OF NET ASSETS
December 31, 2007
Total Fund Balances - Governmental Funds
Amounts reported for governmental activities in the
Statement of Net Assets are different because:
Capital assets less accumulated depreciation are
included in the Statement of Net Assets:
Capital assets - non-depreciable
Capital assets - depreciable
Accumulated depreciation
Other long-term assets are not available to pay for current-period
expenditures and, therefore, are deferred in the funds
Long-term liabilities applicable to the Town's
governmental activities are not due and payable
in the current period and accordingly are not
reported in the funds. However these liabilities
are included in the Statement of Net Assets:
General obligation bonds payable
Compensated absences
Estimated liability for landfill closure
and postclosure care costs
Prepaid items included in the Statement of Net Assets
Deferred charges, included in the Statement of Net Assets
Interest payable applicable to the Town's governmental
activities are not due and payable in the current period
and accordingly are not reported in the funds. However
these liabilities are included in the Statement of Net Assets.
Net Assets of Governmental Activities
$ 69,996,94O
103,600,134
(63,868,653)
$ (22,365,000)
(6,971,397)
(582,773)
20,179,496
109,728,421
(29,919,170)
486,979
127,500
(254,675)
$ 100,348,551
See notes to financial statements.
-15-
TOWN OF SOUTHOLD
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For ~he year ended December 31, 2007
MAJOR GOVERNMENTAL FUNDS Non Major
Capital Governmental
General Highway Projects Funds Totals
REVENUES
Real Properly Taxes $ 16,205,911 $4,027,695 $2,831,897 $ 23,065,503
Other Real Property Tax Items 92,606 12,722 4,581 109,909
Non-Property Tax Items 683,873 234,091 917,964
Depadmental Income 411,790 2,147,502 2,559,292
Intergovernmental Charges 329,202 $ 6,071,436 905 6,401,543
Use of Money and Property 764,912 142,501 648,227 94,361 1,650,001
Licenses and Permits 253,494 10,362 169,338 433,194
Fines and Forfeitures 155,477 155,477
Sale of Properly and Compensation for Loss 148,283 29,213 216,437 393,933
Miscellaneous Local Sources 185,945 288,354 13,283 487,582
State Aid 2,412,869 296,263 894,079 93,135 3,696,346
Federal Aid 145,568 924,966 21 O, 175 1,280,709
Total Revenues 21,789,930 4,518,756 8,827,062 6,015,705 41,151,453
EXPENDITURES
Current:
General Government Support 5,234,683 87,970 5,322,653
Public Safety 7,816,643 948,311 8,764,954
Public Health 35,238 7,370 42,608
Transportation 550,906 3,437,186 3,988,092
Economic Assistance and Opportunity 1,064,905 1,064,905
Home and Community Services 345,540 3,173,114 3,518,654
Culture and Recreation 417,654 417,654
Employee Benefils 6,172,279 510,185 468,989 7,151,453
Capital Outlay 12,436,627 12,436,627
Debt Service:
Principal 543,040 236,058 779,098
Interest 244,735 17,001 287,370 294,738 843,844
Total Expenditures 22,425,623 3,964,372 12,723,997 5,216,550 44,330,542
Excess (Deficiency) of Revenues Over
Expenditures (635,693) 554,384 (3,896,935) 799,155 (3,179T089)
Other Financing Sources (Uses)
Debt Proceeds 14,650,000 t4,650,000
Transfers In 2,738,349 211 1,333,814 4,072,374
Transfers Out (2,403,563) (794,696) (874,115) (4,072,374)
Total Other Financing Sources (Uses) 334,786 (794,485) 15,983,814 (874,115) 14,650,000
Net Change in Fund Balance (300,907) (240,101) 12,086,879 (74,960) 11,470,911
Fund Balances at Beginning of Year 5,384,699 1,319,322 800,772 1,203,792 8,708,585
Fund Balances at End of Year
$ 5,083,792 $1,079,221 $ 12,887,651 $1,128,832 $ 20,179,496
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 ACI-IVIT!ES
For the year ended December 31,2007
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 period is:
Capital outlay
Depreciation expense
Loss on dispositions
$13,193,594
(4,005,790)
(16,695)
Some expenses reported in the Statement of Activities do not require
the use of current financial resources and therefore, are not reported as
expenditures in governmental funds:
Prepaid charges
Deferred charges
The issuance of long-term debt and increase in obligations under capital
leases provides current financial resources to governmental funds, while the
repayment of the principal of long term debt and capital leases consumes
the current financial resources of governmental funds.
Neither transaction has any effect on net assets.
Bonds issued
Repayment of bond principal
Due to Employees Retirement System
Compensated absences
Estimated liability for landfill closure
and postclosure care cos[s
Accrued interest payable
$ 11,470,911
9,171,109
27,481
(21,250)
(14,650,000)
779,098
48,804
(495,736)
10,550
6,383
Change in Net Assets of Governmental Activities
$ 6,347,350
See notes to financial statements.
-17-
TOWN OF SOUTHOLD
STATEMENT OF FIDUCIARY NET ASSETS
December 31, 2007
ASSETS
Cash and investments
LIABILITIES
Other liabilities
Deposits held
Total Assets
Total Liabilities
Fishers Island
Town Ferry District Totals
$ 5,718,965 $ 34,367 $ 5,753,332
$ 5,718,965 $ 34,367 $ 5,753,332
$ 4,861,089 $ 34,367 $ 4,895,456
857,876 857,876
$ 5,718,965 $ 34,367 $ 5,753,332
See notes to financial statements.
-18-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Town of Southold (the "Town"), which was established in 1640, is governed by Town Law and other
general laws of the State of New York and various local laws. The Town Board is the legislative body
responsible for overall operations. The Town Board consists of the Supervisor who is elected for a term
of four years and five council members who are elected for terms of four years. The Town Board appoints
the Town Attorney, Comptroller and the Commissioner of Public Works whose terms are fixed by Town
Law. The Town Clerk, Receiver of Taxes, Superintendent of Highways, Justices and Town Trustees are
all elected and serve for four years, respectively. The Town provides a full range of municipal services,
includin9 public safety, transportation, home and community services, public works and road
maintenance, recreation and parks, and general and administrative services.
The financial statements of the Town of Southold have been prepared in conformity with accounting
principles generally accepted in the United States of America (GAAP) as applied to governmental units.
The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for
establishing governmental accountin9 and financial reporting principles.
The more significant of the government's accounting policies are described below.
1. REPORTING ENTITY
The financial reportin9 entity consists of: Ia) the primary government, which is the Town of
Southold; (b) organizations for which the primary 9overnment is financially accountable; and (c)
other organizations for which the nature and significance of their relationship with the primary
9overnment are such that exclusion would cause the reporting entity's financial statements to be
misleading or incomplete as set forth in GASB Statement No. 14.
The decision to include a potential component unit in the Town of Southold reporting entity is based
on several criteria set forth in GASB Statement No. 'i4 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 reportin9 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. 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 are presented discretely in a
separate column in the combined financial statements to emphasize that they are legally separate
from the primary government.
2. BASIS OF PRESENTATION
The Town's basic financial statements include both government-wide (reporting the Town as a
whole) and fund financial statements (reportin9 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 well as the
discretely presented component units.
In the 9overnment-wide Statement of Net Assets, the Town's governmental 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--investments in capital assets, net of related
debt; restricted net assets; and unrestricted net assets.
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. BASIS OF PRESENTATION (continued)
The government-wide Statement of Activities reports both the gross and net cost of each of the
Town's functional categories (public safety, transportation, home and community services, etc.),
which are otherwise supported by general government revenues (property, sales and use taxes,
certain intergovernmental revenues, fines, permits and charges, etc.). The Statement of
Activities reduces gross expenses (including depreciation), by related program revenues and
operating and capital grants, to produce the net cost of each program. Program revenues
include (a) charges for services and (b) operating and capital grants and contributions that are
directly associated with the function. Operating grants include operating-specific and
discretionary (either operating or capital) grants while the capital grants column reflects 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 been eliminated in general purpose financial statements.
This government-wide focus is more on the sustainability of the Town as an entity and the
change in the Town's net assets resulting from the current year's activities.
Fund Financial Statements
The fund financial 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 non-major funds.
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.
Hi~qhway Funds - used to account for the maintenance and operation of highways.
Capital Proiects Fund - used to account for financial resources to be used for the acquisition
or construction of major capital facilities (other than those financed by special assessment
funds and trust funds).
- 20 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. BASIS OF PRESENTATION (continued)
Fund Financial Statements (continued)
Additionally, the Town reports the following non-major 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 specified 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:
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
Complete financial statements of these component units can be obtained from their respective
administrative offices:
Orient Mosquito District
145 Platt Road
Orient, NY 11957
Cutchogue-New Suffolk
Park District
P.O. Box 311
Cutchogue, NY 11935
Southold Park District
P.O. Box 959
Southold, NY 11971
Fishers Island Ferry District
P.O. Box 1179
Southold, NY 11971
Fishers Island Garbage
& Refuse District
Fishers Island, NY 06390
Orient-East Marion
Park District
P.O. Box 12
Orient, NY 11957
Mattituck Park District
P.O. Box 1413
Mattituck, NY 11952
-21 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3. BASIS OF ACCOUNTING/MEASUREMENT FOCUS
Measurement focus refers to what is being measured whereas the basis of accounting refers to
when revenues and expenditures are recognized in the accounts and repoded in the financial
statements. Basis of accounting relates to the timing of the measurement made, 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 from exchange and exchange-like transactions are recognized 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 collectible within the current period or soon enough thereafter to
pay liabilities of the current period. The Town considers all revenues available if they are collected
within 60 days after the year end. Revenues susceptible to accrual include Suffolk County local
assistance at year end on behalf of the Town, franchise fees, and charges for services,
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 incurred. In the Capital
Projects Fund, long-term debt is recognized as revenue upon receipt of the proceeds
Expenditures are recorded on the accrual basis except that (a) expenditures for prepaid expenses
are recognized when incurred; (b) principal and interest on indebtedness are recognized as
expenditures when due; (c) compensated absences, such as vacation and sick leave, which vest or
accumulate, are charged as expenditures when paid.
Encumbrance accounting, under which purchase orders, contracts and other commitments are
recorded for budgetary control purposes in order to reserve that portion of the applicable
appropriation, is employed in the governmental funds. Appropriations for all governmental 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 are recorded in the period in which the liability is incurred.
4. ASSETS, LIABILITIES AND FUND EQUITY
CASH AND CASH EQUIVALENTS
Cash consists of funds deposited in demand accounts, time deposit accounts and certificates of
deposit with maturities of less than three months.
For purposes of the Statement of Cash Flows, the Town considers all highly liquid investments with
a maturity when purchased of three months or less and all local government investment pools to be
cash equivalents.
RESTRICTED ASSETS
Certain assets of the Capital Projects including Community Preservation are classified as restricted
assets because their use is restricted by contractual agreements and regulations.
- 22 -
TOWN OF $OUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES AND FUND EQUITY (continued)
RECEIVABLES
Receivables include amounts due from Federal, State, and other governments or entities for
services provided by the Town. Receivables are recorded and revenues recognized as earned or
as specific program expenditures are incurred.
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 acquired with an original cost of $5,000 or more are reported at
historical cost or estimated historical cost. Contributed assets are reported at fair market value
as of the date received. Additions, improvements and other capital outlays that significantly
extend the useful life of an asset are capitalized. Other costs incurred for repairs and
maintenance are expensed as incurred. Depreciation on all assets is provided on the straight-
line basis over the following estimated useful lives:
Buildings
Improvements and other
Machinery and equipment
Infrastructure
10-40 years
20 years
5-10 years
20-30 years
Infrastructure assets, consisting of certain improvements other than buildings including roads,
curbs, sidewalks, bridges and 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 INCOME
Deferred revenues/unearned income are those 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 that have been deemed to be "measurable" but not
"available" to finance current expenses pursuant to generally accepted accounting principles.
PREPAIDS
Prepaids record payments to vendors that benefit future recording periods and are reported on the
consumption basis. Prepaids in the general and special revenue funds represent insurance
premiums paid for coverage that will benefit the subsequent period and for retirement benefits that
will benefit a future period
LONG-TERM OBLIGATIONS
The liabilities for long-term obligations consisting of §eneral obligation bonds, compensated
absences, due to employee retirement system, judgments, claims 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.
REVENUES AND EXPENDITURES
REAL PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES
In Suffolk County, the assessment and lien of real property for taxation is done by the County
Department of Assessment. Real property taxes become a lien on December 1 for both school and
general taxes. The Town's assessment rolls are used for the levy of real property taxes by the
Town and the School Districts, as well as by the County and by Special Districts of the County and
the Town.
- 23 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
5. REVENUES AND EXPENDITURES (continued)
REAL PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES (continued)
The Town of Southold Receiver of Taxes collects all real property taxes for the Town, Suffolk
County, Town Special Districts and School Districts. These taxes are levied on December 1, and
are due in two installments, 50% on December 1 and 50% on May 10, payable without penalty to
January 10 and May 31, respectively. Penalties are imposed thereafter at the rate of one-twelfth of
the rate of interest determined by the State Commissioner of Taxation and Finance, after which
taxes are payable to the County Treasurer. The Town retains the total amount of Town, Highway
and Town Special Districts levies from the amount collected, and forwards the balance collected to
the County which assumes collection responsibility. The Town and Town's Special Districts
therefore realize annually the 100% collection of real property taxes.
School District property taxes are also levied on December 1, and are also payable in two
installments. School property taxes are due in two installments, 50% on December 1 and 50% on
May 10 payable without penalty to January 10 and May 31, respectively. The County is also
responsible for uncollected school taxes.
INTERFUNDTRANSACTIONS
Interfund transactions have been eliminated from the government-wide financial statements. In
the funds statements interfund transactions include:
a) Interfund Revenues
Interfund revenues, which are quasi-external transactions, in the general fund represent
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 as an expenditure of that
fund.
b) Transfers
Transfers represent payments to the debt service, general fund and capital projects funds
from the other funds for their appropriate share of the debt service, general fund or capital
project costs.
COMPENSATED ABSENCES
The liability for vested or accumulated vacation or sick leave (compensated absences) is
recorded as current and noncurrent obligations in the 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 that 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 and reduced by the outstanding
balances of any bonds, notes, or other borrowings that are attributable to the acquisition,
construction, or improvement of those assets.
- 24 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
6. EQUITY CLASSIFICATIONS (continued)
b)
Restricted net assets--Consists of net assets with constraints placed on the use either by
(1) external groups such as creditors, grantors, contributors, or laws or regulations of other
governments; or (2) law through constitutional provisions or enabling legislation.
c)
Unrestricted net assets--All other net assets that do not meet the definition of "restricted"
or "invested in capital assets, net of related debt."
In the Fund Statements, governmental fund equity is classified as fund balance. Fund balance is
further classified as reserved and unreserved, with unreserved further split between designated
and 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 funds 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 are adopted annually on a basis consistent with generally accepted accounting
principles. Appropriations authorized for the current year are increased by the amount of
encumbrances carried forward from the prior year.
Budgetary controls for special revenue funds are established in accordance with the applicable
grant agreement, which may cover a period other than the Town's fiscal year. Appropriate
budgetary adjustments have been made to reflect these grant agreements during the Town's
fiscal year
The Town follows the procedures enumerated below in establishing the budgetary data reflected in
the financial statements:
a)
No later than October 1, the Supervisor submits a tentative budget to the Town Board for
the fiscal year commencing the following fiscal year. The tentative budget includes the
proposed means of financing for all funds.
b)
After public hearings are conducted to obtain taxpayer comments, no later than November
20, the Town Board adopts the budget.
c)
The Town Board must approve all modifications of the budget. However, the Supervisor
is authorized to transfer certain budgeted amounts within departments.
In order to show the full legal level of budgetary compliance for the general and 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.
- 25
Calculation of Estimated Overlapping and Underlying Indebtedness
Applicable Ap~
Overlapping Date of Percentage Total
Units Report Applicable Indebtedness lnd~c
County of Suffolk ..................... 10-23-07 3.71% $34,381,249 $29,
Village of Greenport ................... 05-31-07 100.00 12,132,000
School Districts:
Fishers Island 06-30-07 100.00 · 405,000
Greenport .... iiiiiiiiiiiii 06-30-07 100.00 135,000
Mattituck-Cutchogue ....... I2-27-07 98.49 43,424,241 39:
New Suffolk Common ...... 06-30-07 100.00
Oyster Ponds .............. 06-30-07 100.00 150,001~
Southold ................. 11-30-07 100.00 l 0,090,681 10,~
Fire Districts (Est.) ..................... Various 100.00 2,750,000
$ 90,627,490
Sources: Annual Financial Reports on file with the Office of the State Comptroller, or more recently published Official
Statements.
~tCL5 Authorized But Unissued Items
following Bonds are authorized but unissued:
Authorized Purpose
02-25-03 /Mattituck lnlet Shore Erosion Study ................................. $
02-27-07 [ Open Space Preservation: Non-Agricultural Land ......................
08-28-07 [ ,Open Space Preservation: Agricultural Lands ...................
02-26-08 { Acquisition of Land and Building (Peconic School Property) ......... i.. '
04-22-08 ~ Tax Collection Software .................................... i ....
~ Total ................................. $2
a. To be funded in whole or in part by the issuance of the Bonds.
Capital Program
The Town annually adopts a Capital Budget. Projects may be funded by State attd Federal aid.
proceeds of obligations, property taxes or a combination thereof A summary of the Capital Budget for 2
forth below: '
Department
General Town ....................................
Highway Depot ...................................
Sohd Waste Distr ct
Wastewater Disposal
Total
Sources.
Appropriations ...................................
Grants .......................................
Town Debt .................................
Total ...........................................
2008
$6,727,928
110,000
689,000
1,500,000
$ 9,026,928
$ 186,100
8,840,028
9,026,828
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (continued)
2, FUND BALANCES
DESIGNATION OF FUND BALANCE
Portions of the unreserved balances at December 31, 2007 were designated for the subsequent
year's operating budgets as follows:
Total for Subsequent Fund Balance
Fund Balance Year's Unreserved
Fund Unreserved Budget Undesignated
Major Governmental Funds
General Fund- Townwide
Highway Fund
Non-Major Funds:
Town Outside Village
East West Fire Protection District
Southold Wastewater District
Fishers Island Sewer District
Solid Waste Management District
$ 3,839,911 $ 1,816,000 $ 2,023,911
1,079,221 491,000 588,221
699,645 317,000 382,645
20,198 6,400 13,798
213,094 213,094
36,581 36,581
110,229 110,229
FUND DEFICITS
The capital projects fund had an undesignated deficit fund balance at December 31, 2007. The
capital projects fund deficit will be eliminated as shod-term debt is redeemed or conveded to
permanent financing.
DETAILED NOTES ON ALL FUNDS
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 are governed by a formal investment policy. The Town's monies must
be deposited in FDIC-insured commercial banks or trust companies located within the state.
The Town is authorized to use demand accounts and certificates of deposit. Permissible
investments include obligations of the U.S. Treasury, U.S. Agencies and investments made by
the Cooperative Liquid Asset Security System (CLASS).
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.
Collateral is required for demand deposits and time deposits accounts at 105% of all deposits not
covered by federal deposit insurance. Obligations that may be pledged as collateral include
obligations of the United States and its agencies and obligations of the State and its municipalities
and school districts. The Town's collateral agreements are based on the Town's available balance.
Custodial Credit Risk - Deposits/Investments - Custodial credit risk for deposits exists when, in
the event of the failure of a depository financial institution, a government may be unable to
recover deposits, or recover collateral securities that are in possession of an outside agency.
Custodial credit risk for investments exists when, in the event of the failure of the counterparty, a
government will not be able to recover the value of its investments or collateral securities that
are in possession of an outside party.
- 26 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
DETAILED NOTES ON ALL FUNDS (continued)
CASH AND INVESTMENTS (continued)
Governmental Accounting Standards Board Statement No. 40 directs that deposits be disclosed
as exposed to custodial credit risk if they are not covered by depository insurance, and the
deposits are either:
· Uncollateralized
· Collateralized with securities held by the pledging financial institution, or
· Collateralized with securities held by the pledging financial institution's trust department or
agent but not in the Town's name
At December 31, 2007 the Town's cash book balance was approximately $47,805,000. This
amount is inclusive of Fiduciary fund deposits of approximately $5,700,000 but exclusive of petty
cash of approximately $2,000. The available bank balance was approximately $46,200,000. Of the
bank balance, $1,100,000 was covered by Federal deposit insurance, and approximately
$86,800,000 was covered by collateral held by the Town's agent, a third-party financial institution, in
the Town's name.
2. INTERFUND RECEIVABLES AND PAYABLES
Interfund receivables and payables for the primary government at December 31, 2007 were as
follows:
Major Governmental Funds:
General Fund - Town wide
Highway Fund
Capital Projects Fund
Non-Major Governmental Funds:
General Fund - Part Town
East-West Fire District
Southold Wastewater District
Fishers Island Sewer District
Solid Waste Management District
Amount Amount
Receivable Payable
$ 74,500 $ 2,305,222
1,260,522 27,090
126,342
Total
267,093
157,192
1,051
470 2,000
477,127 29,985
$ 2.364.297 $ 2~364~297
Interfund receivable and payable balances for the primary government at December 31, 2007
are expected to be paid currently.
Interfund transfer balances for the primary government at December 31, 2007 represent primarily
the payment of operating and capital expenditures and are stated as follows:
Major Governmental Funds:
General Fund - Town wide
Highway Fund
Capital Projects Fund
Non-Major Governmental Funds:
General Fund - Part Town
Solid Waste Management District
Total
Transfers Transfers
In Out
$ 2,738,349 $ 2,403,563
211 794,696
1,333,814
226,842
647,273
$ 4,072,374 $ 4,072,374
27-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
DETAILED NOTES ON ALL FUNDS (continued)
3. CAPITAL ASSETS
Primary aovemmenl
Capital assets not being depreciated
Land
Construction in progress
Total capital assets not being depreciated
Depreciable capital assets
Buildings
Improvemenls other than buildings
Machinery and equipment
Infrastructure
Total depreciable capital assets
Less accumulated depreciation
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Totalaccumulated depreciation $ 60,540,499
Total net depreciable capital assets
Total net capital assets
Balance Balance
1/1/07 Additions Deletions 12/31/07
$ 58,341,517 $ 10,587,685 $ 68,929,202
220,114 847,624 1,067,738
58,561,631 1 t ,435,309 69,996,940
8,307,223 9,100 8,316,323
13,618,159 13,817 $ 7,326 13,624,650
9,916,143 968,653 687,003 10,197,793
70,694,655 766,713 71,461,368
102,536,180 1,758,283 694,329 103,600,134
2,206,266 129,946 7,326 2~328,886
3,932,088 410,123 4,342,211
6,597,870 722,594 670,310 6,650,154
47,804,275 2,743,127 50,547,402
$ 4,005,790 $ 677,636 63,868,653
39,731,481
$109,728,421
Depreciation expense was charged to governmental functions as fallows:
General government support
Public safety
Transpodation
Economic assistance and oppodunity
Culture and recreation
Home and community services
$ 246,830
160,526
2,972,168
37,295
64,207
524,764
$ 4,005,790
- 28 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
DETAILED NOTES ON ALL FUNDS (continued)
3. CAPITAL ASSETS (continued)
Discretely presented component units
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
Improvements other than buildings
Machinery and equipment
Infrastructure
Total accumulated depreciation
Total net depreciable capital assets
Total net capital assets
INDEBTEDNESS
SHORT TERM DEBT
Balance Balance
1/1/07 Additions Deletions 12/31/07
$ 2,213,759 $ 20,406 $ 2,193,353
12,947,081 $ 39,489 12,582,203 404,367
15,160,840 39,489 12,602,609 2,597,720
3,566,885 9,485 75,460 3,500,910
3,220,732 13,807,737 17,028,469
3,320,899 245,096 61,000 3,504,995
2,145,280 26,800 2,172,080
12,253,796 14,089,118 136,460 26,206,454
1,373,575 84,500 1,458,075
1,179,246 410,900 39,049 1,551,097
2,284,411 148,117 61,000 2,371,528
1,237,340 84,645 1,321,985
$ 6,074,572 $ 728,162 $ 100,049 6,702,685
19,503,769
$ 22,101,489
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 conveded to long-term obligations within five years after the original
issue date. The notes or renewal thereof may not extend more than two years beyond the original
date of issue unless a portion is redeemed within two years and within each 12 month period
thereafter. Liabilities for BANs are generally accounted for in the capital projects fund. BANs are
expected to be paid from the proceeds of future bond issues after renewal of these notes. These
BANs bear interest at various rates from 3.35% to 3.95% and are due at various dates through
2008.
When BANs are not redeemed with the proceeds of bond issues, but instead paid from budgetary
appropriations, the principal amount paid is recorded as an expenditure in the operating fund and a
financin9 source is recorded in the capital projects fund.
These notes are summarized as follows:
Interest
Description Amount Rate
Various Purposes $ 3,560,000 3.95%
Various Purposes 699,000 3.75%
Fishers Island Sewer 125,000 3.35%
New London Wharf 1,500,000 3.70%
Fishers Island Garbage 360,000 3.76%
Total $ 6,244,000
- 29 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
Deceml)er 31, 2007
DETAILED NOTES ON ALL FUNDS (continued)
4, INDEBTEDNESS (continued)
SHORT TERM DEBT (continued)
A summary of changes in BANS for the for the year ended December 31, 2007 is as follows:
Balance Balance
1/1/07 Increases Reductions 12/31/07
Primary Government $ 7,729,000 $ 3,673,000 $ 7,018,000 $ 4,384,000
Component Units 2,185,000 -0- 325,000 1,860,000
$ 9,914,000 $ 3,673~000 ~ 7.343.000 $ 6,244~000
LONG TERM DEBT
Summary of changes in long-term debt transactions for the year ended December 31, 2007 is as
follows:
Non-current
Bafance Balance liabilities due Non-current
1/1/07 Increases Reductions 12/31/07 within one year liabilities
General obligation bonds $ 8494.098
Due to Employees Retirement
System 48.804
Net compensated absences 6.475,661
Estimated liability for landfill closure
and post closure care costs 593.323
Component Units:
$ 14,650,000
495T736
$ 779,098 $ 22,365.000 $ 1,495,000 S 20,870,000
48T804 --0-
6,971,397 6,971,397
10T550 582,773 10,660 572,113
General obligation bonds 2.855.000 200,000 2,655,000 200,000 2,455,000
6eneral Obligation Bonds - The Town borrows money in order to acquire land, equipment or
construct buildings and improvements. This enables the cost of these capital assets to be borne by
the present and future taxpayers receiving the benefit of the capital assets. These long-term
liabilities, which are backed by the full faith and credit of the Town, bear interest at various rates
from 3.14% to 6.375% and have maturity dates in 2008 through 2030.
Future principal and interest payments to maturity for both the primary government and the
component units are as follows:
Year Endinq Principal Interest
2008 $ 1,695,000 $ 950,557
2009 1,750,000 888,643
2010 1,575,000 827,440
2011 1,600,000 768,387
2012 1,540,000 709,850
2013 1,425,000 654,789
2014 1,440,000 600,927
2015 1,435,000 545,816
2016-2020 6,085,000 1,948,783
2021-2025 3,725,000 973,281
2026-2030 2,750,000 292,188
Totals $ 25~020.000 ~ 9,160,661
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 9ave rise to the liability.
- 30 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
DETAILED NOTES ON ALL FUNDS (continued)
4. INDEBTEDNESS (continued)
PRIOR YEAR DEFEASANCE OF DEBT
In prior years, the Town defeased certain bonds by placing the proceeds of new bonds in an
irrevocable trust with an escrow agent to provide for all future debt service payments on the old
bonds. Accordingly, the trust account assets and liability for the defeased bonds are not included in
the Town's financial statements. At December 31, 2007, $1,700,000 of these bonds outstanding
are considered defeased.
5. RETIREMENT SYSTEM
Plan Description
The Town of Southold participates in the New York State and Local Employees' Retirement System
(ERS) and Local Police and Fire Retirement System (PFRS). This is a cost-sharin9 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 governed by
the New York State Retirement and Social Security Law (NYSRSSL). As set forth in the
NYSRSSL, the Comptroller of the State of New York (Comptroller) serves as sole trustee and
administrative head of the System. The Comptroller shall adopt and may amend rules and
regulations for the 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.
Fundinq 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 service with a retirement system under the
provisions of article fourteen or fifteen of the NYSRSSL, who contribute 3% of their salary. Prior to
October 1, 2000, all employees who joined the System after July 27, 1976 were required to
contribute 3% of their salary. Under the authority of the NYSRSSL, the Comptroller shall certify
annually the rates expressed as proportions of payroll of members, which shall be used in
computing the contributions required to be made 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 actuarially required amounts and also include additional contributions to fund various
early retirement incentives made available to the Town employees. The credits and miscellaneous
adjustments represent modification made by the ERS for prior year's contributions.
The required contributions, for the Primary government, for the current year and two preceding
ERS PFRS
years were:
2007 $ 980,628 $ 967,286
2006 $ 1,096,547 $ 741,445
2005 $ 1,068,200 $ 1,016,937
The Town's contribution to the system was 100% of the contributions required each year
-31 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
DETAILED NOTES ON ALL FUNDS (continued)
6. POST-EMPLOYMENT BENEFITS
In addition to providing pension benefits, the Town provides health insurance coverage and survivor
benefits for retired employees and their survivors. Substantially all of the Town's employees may
become eligible for these benefits if they reach normal retirement age while working for tl~e Town.
Health care benefits in accordance with New York State Health Insurance Rules and Regulations
(administered by the New York State Department of Civil Service), are provided through the New
York State Empire Plan (the "Empire Plan") whose premiums are based on the benefits paid
throughout the State during the year.
The Town recognizes the cost of providing benefits by recording its share of insurance premiums
as an expenditure in the year paid. The Town's union contracts and ordinances require that it
provide its eligible enrollees with Empire Plan benefit coverage, or if another provider is utilized, the
equivalent coverage. Under the provisions of the Empire Plan, premiums are adjusted on a
prospective basis for any losses experienced by the Empire Plan. The Town has the option to
terminate its participation in the Empire Plan at any time without liability for its respective share of
any previously incurred loss. During the 2007 year, $3,471,322 was paid on behalf of 96 retirees
and 216 active employees and is recorded as an expenditure in the various funds of the primary
government.
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 compensatory 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, 2007, the value of the accumulated vacation time and sick leave was
$6,971,397 for the primary government.
COMMITMENTS AND CONTINGENCIES
Risk Management
In common with other municipalities, the Town receives numerous notices of claims. The Town
established a self-insurance risk management program for general liability and health insurance
which are both accounted for in the Risk Retention Fund.
For general liability, the Town has a self-insured liability exposure of $50,000 per claim. Any
liability exposure above the $50,000 self-insured liability for General Liability, Automobile
Liability, and Police Liability is covered by primary insurance policies up to $1,000,000 per claim
and $3,000,000 in aggregate for the year. After primary policy limits are exhausted, the excess
exposure above the $1,000,000 is covered by an Umbrella Liability Policy of $10,000,000 per
claim and $10,000,000 in the aggregate. The Town has a Public Officials Liability policy with a
$25,000 deductible per claim, with the excess exposure above that $25,000 amount covered by
a Primary Liability rider of up to $1,000,000 per claim, with the excess exposure above that
$1,000,000 amount covered by the aforementioned Umbrella Liability Policy.
For insurance for health benefits that are self-insured, the Town has insurance policies which
provide coverage for specific medical cases in excess of $175,000 incurred and paid within the
calendar year, as well as coverage for all other claims in the aggregate. The exposure to the
Town under the aggregate policy is based on monthly enrollment. Considering the changes to
enrollment during 2007, the attachment point for the aggregate policy was $2,948,438.
32
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
COMMITMENTS AND CONTINGENCIES (continued)
Risk Management (continued)
There have been no significant reductions in insurance coverage as compared to the prior year, and
there were no settlements in excess of insurance coverage over the last three years.
The Risk Retention Fund reserves for general liability claims are determined by a third party
administrator, and are reported when it is probable that a loss has occurred and the amount of that loss
can be reasonably estimated. Claims reserves for general liability claims are reevaluated periodically to
take into consideration recently settled claims and any new developments and changes.
The Risk Retention Fund liabilities for medical claims outstanding at year end are reported by the third
party administrator and are recorded when the claim has been incurred and paid within 60 days of the
year end.
The Town's discretely presented component units are not included in the Town's self-insurance risk
management program for any claims.
Net assets in the Risk Retention Fund are reserved for future catastrophic losses and are not available
for other uses. Changes in the liability for claims and judgments for the year ended December 31,
2007 and 2006 are as follows:
General
Medical Liability
2007 2006 2007 2006
Unpaid Claims as of December 31,
prioryear $ 161,976 $ 200,131
Incurred Claims:
Provision for insured events
of the current fiscal year 2,524,953 2,171,127
Increase (decrease) in net provision for
insured events of prior fiscal years 48,556 2,011
Total Incurred Claims and
Claim adjustments 2,573,509 2,173,138
Payments of:
Claims during the current year 2,287,641 2,211,293
Unpaid Claims as of December 31,
current year $ 447,844 $ 161,976
$ 9O6 $ 1,811
6,857 3,600
309 (905)
7,166 2,695
6,857 3,600
=~%215 $ 906
During the year ended December 31, 2007 charges to the operating funds for the self-insurance programs
were made as follows:
Medical
General Fund Whole Town
General Fund Part Town
Highway Fund Part Town
Solid Waste District
General Liability
General Fund Whole Town
General Fund Part Town
Solid Waste District
Total Charges
$ 1,035,189
193,550
452,648
183,399
$ 356,316
16,421
16,421
$ 1,864,786
389,158
$ 2,2~944
- 33-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
COMMITMENTS AND CONTINGENCIES (continued)
Landfill Closure and Post-Closure Care Costs
State and federal laws and regulations required the Town to place a final cover on its landfill sites and to
perform cedain maintenance and monitoring functions at the sites for thidy 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 placement 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, 2007 the Town has recorded a liability of $582,773 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 Corporation. Costs associated with post closure 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 year ended December 31, 2007 were $209,842. Future obligations over the primary
terms of the Town's leases as of December 31, 2007 are as follows:
2OO8 $ 189,393
2009 180,047
2010 105,458
2011 77,125
2012 and thereafter 486,777
Total $ 1.038.800
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, 2007:
Condensed Statement of Net Assets:
Due from Capilal Assets Other
Current Primary Net of Current Long Term
Assets Government Depreciation Liabilities Liabilities
Fishers Island Ferry Dislrict $ 1,621,229
Fishers Island Refuse and Garbage 1,064,451
Cutchogue-New Suffolk Park District 128,029
Southold Park District 86,189
Orient East Marion Park District 3,536
Mattituck Park District 262,824
Orient Mosquito District 9,003
Net
Assels
205,649 $ 16,464,366 $ 3,285,079 $ 2,500,000 $ 12,506,165
163,675 3,137,414 547,319 3,818,221
42,095 122,182 42,095 250,211
91,450 668,835 91,450 755,024
10,095 432,985 21,510 425,106
139,704 1,253,381 199,270 55,000 1,401,639
25,230 22,326 25,230 31,329
$ 3,175,261 $ 677,898 $ 22,101,489 $ 4,211,953 $ 2,555,000 $ 19,187,695
- 34 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
E. CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED
COMPONENT UNITS (continued)
Condensed Statement of Activities;
Property
Expenses Revenue Net Expense Tax Other Change 1/1/07 12/31/07
$ 3,187,121 $ 2.546.987 $ 640.134 $ 590.000 $ 1.278.382 $ (1.228.248) $11.277.917 $12.506.165
654.016 51.400 602.616 512.300 716,644 (626.328) 3.191893 3818.221
Fishers Island Ferry District
Fishers Island Refuse
and Garbage
Cutchogue New Suffotk Park
Distnct 132.084
Southold Park District 339.999
Orient-East Marion Park Distdct 32.993
Mattduck Park Distnct 392,468
Orient Mosquito District 86.911
132.084 145,000 5.446 (18.362) 231.849 250.211
339.999 315.000 41.854 (16.855) 738.169 755.024
32.993 30.695 50 2.248 427.354 425.106
392,468 467.527 47.243 {122.302) 1279.337 1.401.639
86,911 82,235 2.219 2.457 33.786 31.329
$ 4.825,592 $ 2,598,387 $ 2.227,205 $ 2.142,757 $ 2.091.838 $ (2.007.390) $ 17180.305 $ 19.187.695
F. 2% TRANSFER TAX
In November 1998, the voters of the Town approved a referendum for a 2% Transfer Tax, which became
effective on April 1, 1999~ The transfer tax receipts are recorded in the capital projects fund-community
preservation, and are used for the purchase and/or preservation of agricultural land, open space, parks, or
historic preservation sites. The tax applies to sales of vacant land worth $100,000 or more or sales or
improved land worth $250,000 or more. Conveyance of real property for open space, parks or historic
preservation purposes are exempt from this tax.
At December 31, 2007, and for the four previous years, the Town has the following 2% transfer tax revenue
and parks or historic preservation to any not-for-profit, or tax exempt organization, operating for conservation,
environmental or historic preservation purposes are expense of:
Revenues Expenditures
Yearend December31,2007 $ 6,071,436 $ 2,423,659
2006 5,823,714 10,969,280
2005 7,200,274 10,132,009
2004 6,045,685 6,408,951
2003 4,603,354 2,439,367
G. SUBSEQUENT EVENTS
The Town issued Public Improvement Serial Bonds in the amount of $8,850,000 which were dated May
15, 2008. This issue included $7.5M for Open Space purchases and $1.35M for the Acquisition and
Improvements of the Peconic Lane School. Interest rates vary from 4% to 4¼%, and the final payment is
due 5/15/30.
35-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
H. NEW PRONOUNCEMENTS
The Governmental Accounting Standards Board (GASB) approved new accounting standards applicable
to "other post-employment benefits" (OPEB's) and "termination benefits", which are non pension benefits
provided after a person leaves employment, including retiree health care. Until now, these benefits have
generally been administered by municipalities on a pay-as-you-go basis and have not been reported as a
liability on financial statements.
GASB 45 and 47 requires municipalities which adhere to GAAP (Generally Accepted Accounting
Principles) to account for OPEB and termination liabilities on an accrual basis much like they already
account for pension liabilities, generally adopting the actuarial methodologies used for pensions, with
adjustments for the different characteristics of OPEB and termination benefits and the fact that most
municipalities have not set aside any funds against this liability.
Under GASB 45 and 47, based on actuarial valuation, an annual required contribution ("ARC") will be
determined for each municipality and then be periodically updated depending on the number of members
within the plan.
The Town is required to implement GASB 45 and 47 for the year ended December 31, 2008. The Town
will implement the new pronouncement when effective. Based on an actuarial valuation prepared as of
December 31, 2007, the Town will have an accrued liability of approximately $42 million related to this
pronouncement.
Governmental Accounting Standards Board (GASB) issued Statement No. 49 (GASB 49) which is a new
accounting standard applicable to pollution remediation obligations. The statement provides guidance on
how to calculate and report the costs and obligations associated with pollution cleanup efforts. Until now,
these costs generally have been on a pay-as-you-go basis and have not been reported as a liability on
the financial statements. The Town is required to implement GASB 49 for the year ended December 31,
2008.
- 36 -
REQUIRED SUPPLEMENTARY
INFORMATION OTHER THAN
MANAGEMENT DISCUSSION AND
ANALYSIS
TOWN OF SOUTHOLD
GENERALFUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE -BUDGET AND ACTUAL
Yearended December31,2007
REVENUES
Real Property Taxes
Other Real Property Tax Items
Non-Property Tax Items
Depadmental 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
Total Revenues
EXPENDITURES
General Government Suppod
Public Safety
Public Health
Transpodation
Economic Assistance and Opportunity
Culture and Recreation
Home and Community Services
Employee Benefits
Debt Service - Principal and Interost
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
Other Financing Sources (Uses)
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Funrt Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
Variance with
Original Final Final Budget
Budget Budget Actual Encumbrances Positive/(Negafive)
$16,205,911 $16,205,911 $16,205,911
80,000 80,000 92,606 12,606
616,000 616,000 683,873 67,873
473,600 591,100 411,790 (179,310)
421,244 347,219 329,202 (18,017)
555,000 564,000 764,912 200,912
234,900 234,900 253,494 18,594
127,000 127,000 155,477 28,477
7,550 58,208 148,283 90,075
92,554 104,819 185,945 81,126
2,332,897 2,422,952 2,412,869 (10,083)
181,025 145,568 (35,457)
21,146,656 21,533,134 21,789,930 256,796
6,480,095 6,490,347 5,234,683 $ 109,889 1,145,775
7,704,283 7,913,905 7,816,643 83,152 14,110
33,300 35,250 35,238 12
526,410 581,526 550,906 30,620
1,091,260 1,090,225 1,064,905 25,320
373,870 373,870 345,540 28,330
406,556 481,326 417,654 63,672
6,190,823 6,329,564 6,172,279 157,285
1,430,540 1,193,543 787,775 405,768
24,237,137 24,489,556 22,425,623 193,041 1,870,892
(3,090,481) (2,956,422) (635,693) (193,041) 2,127,688
3,296,446 3,336,895 2,738,349 (598,546)
(2,390,965) (2,596,808) (2,403,563) 193,245
905,481 740,087 334,786 (405,301)
$(2,185,000) $ (2,216,335) (300,907) $ (193,041) $ 1,722,387
5,384,699
$ 5,083,792.
See notes to the financial statements.
37-
TOWN OF SOUTHOLD
HIGHWAY FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Year ended December 31,2007
Variance with
Original Final Final Budget
REVENUES Budget Budget Actual Positive/(Negative)
Real Property Taxes $ 4,045,195 $ 4,045,195 $ 4,027,695
Other Real Property Tax Items 11,100 11,100 12,722
Use of Money and Property 125,000 125,000 142,501
Licenses and Permits 7,000 7,000 10,362
Sale of Property and Compensation
for Loss
State Aid
Total Revenues
(17,500)
1,622
17,501
3,362
29,213 29,213
263,535 296,263 296,263
4,451,830 4,484,558 4,518,756 34,198
EXPENDITURES
Transportation 3,551,380 3,697,181 3,437,186
Employee Benefits 548,150 545,450 510,185
Debt Service - Principal and Interest 247,600 250,300 17,001
Total Expenditures
Excess of Revenues
Over Expenditures
Other Financing Sources (Uses)
Operating Transfers In
Transfers Out
259,995
35,265
233,299
4,347,130 4,492,931 3,964,372 528,559
104,700 (8,373) 554,384 562,757
211 211
(591,200) (595,952) (794,696) (198,744)
Total Other Financing Sources (Uses) (591,200) (595,952)
(794,485) (198,533)
Net Change in Fund Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
$ (486,500) $ (604,325) (240,101) $ 364,224
1,319,322
$ 1,079,221
See notes to the financial statements.
-38-
TOWN OF SOUTHOLD
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
December 31, 2007
ASSETS
Cash and investments
Accounts receivable
Due from other funds
Due from other governments
Prepaids
Total Assets
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable
Due to other funds
Deferred revenue
General Fund
Part Town
FUND BALANCE
Fund balance - reserved:
Encumbrances
Prepaids
Fund balance - unreserved:
Designated - Ensuing Year's Budget
Undesignated
$ 621,398
61,567
267,093
23,315
$ 973,373
$ 15,272
235,141
East-West Fire Southold Fishers Solid Waste
Special Protection Wastewater Island Sewer Management
Grant District District District District
$ 42,236
$ 32,854
157,192
$ 238,754
1,051
$ 39,849
1,144
470
$ 42,236 $ 190,046 $ 239,805 $ 41,463
$ 42,236
$ 12,656
157,192
Total Liabilities 250,413 42,236 169,848
Total Fund Balance
Total Liabilities and Fund Balance
23,315
317,000
382,645
6,400
13,798
$ 941
941
25,770
213,094
238,864
$ 239,8O5
722,960 20,198
$ 973,373 $ 42,236 $ 190,046
$ 2,882
2,000
4,882
36,581
36,581
$ 41,463
$ 134,006
90,458
477,127
25,231
$ 726,822
$ 149,126
29,985
437,482
616,593
110,229
110,229
$ 726,822
Totals
$1,066,861
153,169
902,933
42,236
48,546.
$ 2,213,745
$ 222,172
31,985
830,756
1,084,913
25,770
23,315
323,400
756,347
1,128,832
$ 2,213,745
-39-
TOWN OF SOUTHOLD
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - NON-MAJOR GOVERNMENTAL FUNDS
For the year ended December 31, 2007
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
Sale of Property and Compensation for Loss
Miscellaneous Local Sources
State Aid
Federal Aid
EXPENDITURES
General Government Support
Public Safety
Public Health
Home and Community Services
Employee Benefits
Debt service:
Principal
Interest
Excess (Deficiency) of Revenues
Over Expenditures
Other Financing Uses:
Transfers out
Total Revenues
Total Expenditures
Total Other Financing Uses
East-West Fire Southold
General Fund Special Protection Wastewater
Part Town Grant District District
$ 407,539 $ 499,000 $ 18,296
1,282 679 25
234,091
669,746 20,997
44,654
5,150
2,164
93,135
6,055 11,721
$ 210,175
1,457,761 210,175 505,734 51,039
87,970
443,127
7,370
656,988
220,697
505,184
Fishers
Island Sewer
District
1,416,152
41,609
226,842
226,842
185,233
908,193
$ 722,96O
$ 2
9,929
1,908
11,839.
215,175 33,639 16,206
Solid Waste
Management
District
$ 1,907,062
2,593
1,446,830
9O5
30,023
164,188
214,273
13,283
3,779,157
2,251,106
248,292
Totals
$ 2,831,897
4,581
234,091
2,147,502
9O5
94,361
169,338
216,437
13,283
93,135
210,175
6,015,705
87,970
948,311
7,370
3,173,114
468,989
1,960 234,098 236,058
355 294,383 294,738
215,175 505,184 35,954 16,206 3,027,879 5,216,550
(5,000) 550 15,085 (4,367) 751,278 799,155
(647,273) (874,115)
(647,273) (874,115)
(5,000) 550 15,085 (4,367) 104,005 (74,960)
5,000 19,648 223,779 40,948 6,224 1,203,792
$ -0- $ 20,198 $ 238,864 $ 36,581 $ 110,229 $ 1,128,832
Net Change in Fund Balance
Fund Balances at Beginning of Year
Fund Balances at End of Year
-40-
DISCRETELY PRESENTED COMPONENT UNITS
TOWN OF SOUTHOLD
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF NET ASSETS
December 31, 2007
ASSETS
Current Assets:
Cash and investments
Accounts receivable
Due from primary government
State and federal aid receivables
Prepaid charges
Total Current Assets
Non-Current Assets:
Non-depreciable capital assets
Depreciable capital assets, net of depreciation
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities
Accrued interest payable
Bond anticipation notes payable
Unearned revenue
Non-current liabilities due within one year
General obligation bonds payable
Claims and jud9ments payable
Total Current Liabilities
Non-Current Liabilities:
General obligation bonds payable
Claims and judgments payable
Fishers Island Cutchogue- Southold Orient-East Mattituck Orient
Fishers Refuse and New Suffolk Park Marion Park Park Mosquito
Island Ferry Garbage District Park District District District District District
District (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Totals
$ 600,638 $ 432,382 $ 128,029 $ 86,189 $ 3,536 $ 262,729 $ 9,003 $ 1,522,506
64,422 14,104 95 78,621
205,649 163,675 42,095 91,450 10,095 139,704 25,230 677,898
933,870 588,774 1,522,644
22,299 29,191 51,490
1,826,878 1,228,126 170,124 177,639 13,631 402,528 34,233 3,853,159
41,717 517,262 101,198 568,801 432,985 935,757 2,597,720
16,422,649 2,620,152 20,984 100,034 317,624 22,326 19,503,769
16,464,366 3,137,414 122,182 668,835 432,985 1,253,381 22,326 22,101,489
18,291,244 4,365,540 292,306 846,474 446,6t6 1,655,909 56,559 25,954,648
1,350,160 20,152 11,415 8,742 1,390,469
63,637 824 64,461
1,500,000 360,000 1,860,000
171,282 167,167 42,095 91,450 10,095 139,704 25,230 647,023
150,000 50,000 200,000
50,000 50,000
3,285,079 547,319 42,095 91,450 21,510 199,270 25,230 4,211,953
2,400,000 55,000 2,455,000
100,000 100,000
Total Liabilities 5,785,079 547,319 42,095 91,450 21,510 254,270 25,230 6,766,953
NET ASSETS
Investment in capital assets, net of related debt
Restricted:
Debt service
Unrestricted
12,414,366 2,831,893 738,169 1,148,381 17,132,809
2,756 2,756
89,043 986,328 250,211 16,855 425,106 253,258 31,329 2,052,130
$ 12,506,165 $ 3,818,221 $ 250,211 $ 755,024 $ 425,106 $ 1,401,639 $ 31,329 $ 19,187,695
Total Net Assets
-41 -
TOWN OF SOUTHOLD
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF ACTIVITIES
Year ended December 31, 2007
REVENUES
Program revenues
Real property taxes
Other real property tax items
Non-property tax items
Interest earnings
State Aid
Federal Aid
Other
Total Revenues
EXPENSES
General government support
Public health
Transportation
Culture and recreation
Home and community services
Interest on debt
Total Expenses
Changes in Net Assets
Net Assets at Beginning of Year
Net Assets at End of Year
Fishers Island Cutchogue- Southold Orient-East Mattituck Orient
Fishers Refuse and New Suffolk Park Marion Park Park Mosquito
Island Ferry Garbage District Park District Distdct District District District
District (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Totals
$ 2,546,987 $ 51,400 $ 2,598,387
590,000 512,300 $ 145,000 $ 315,000 $ 30,695 $ 467,527 $ 82,235 2,142,757
802 697 197 428 42 636 2,802
90,558 90,558
22,479 36,615 5,249 3,238 8 26,536 1,972 96,097
27,365 588,774 616,139
1,220,744 1,220,744
6,992 38,188 20,071 247 65,498
4,415,369 1,280,344 150,446 356,854 30,745 514,770 84,454 6,832,982
193,250 193,250
86,911 86,911
2,819,880 2,819,880
132,084 339,999 32,993 387,994 893,070
16,405 633,048 649,453
157,586 20,968 4,474 183,028
3,187,121 654,016 132,084 339,999 32,993 392,468 86,911 4,825,592
1,228,248 626,328 18,362 16,855 (2,248) 122,302 (2,457) 2,007,390
11,277,917 3,191,893 231,849 738,169 427,354 1,279,337 33,786 17,180,305
$12,506,165 $ 3,818,221 $ 250,211 $ 755,024 $ 425,106 $ 1,401,639 $ 31,329 $19,187,695
-42-