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HomeMy WebLinkAboutAnnual Financial Report Update DocumentFishers Island Fire District ANNUAL FINANCIAL REPORT UPDATE DOCUMENT December 31, 2008 ~dCOMPANY TABLE OF CONTENTS INDEPENDENT AUDITORS' REPORT ...................................... ANNUAL FINANCIAL REPORT UPDATE DOCUMENT ....................... NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT ............. PAGE A 1 26 eCOMPANY COMPANY A PROFESSIONAL CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT To the Board of Fire Commissioners Fishers Island Fire District Fishers Island, New York We have audited the accompanying Annual Financial Report Update Document of Fishers Island Fire District, as of and for the year ended December 31, 2008, as listed in the table of contents. This report is the responsibility of Fishers Island Fire District's management. Our responsibility is to express an opinion on this report based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Annual Financial Report Update Document is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Annual Financial Report Update Document. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation. We believe that our audit provides a reasonable basis for our opinions. As described more fully in Note 1, the Fishers Island Fire District prepares its Annual Financial Report Update Document using accounting practices prescribed or permitted by the New York State Office of the State Comptroller, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. The effects on the Am~ual Financial Report Update Document of the variances between these regulatory accounting practices and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. In our opinion, the Am~ual Financial Report Update Document referred to above presents fairly, in all material respects, the assets, liabilities and fund balances of Fishers Island Fire District, as of December 31, 2008, and the revenues it received and expenditures made for the year then ended in conformity with the basis of accounting described in Note 1. An Independent Member of the BDO Seidman Alliance To the Board of Fire Commissioners Fishers Island Fire District In accordance with Government Auditing Standards, we have also issued our report dated May 3, 2009, on our consideration of the Fishers Island Fire District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. May 3, 2009 ~t COMPAiqY All Numbers in This Repod Have Been Rounded To The Nearest Dollar ANNUAL FINANCIAL REPORT UPDATE DOCUMENT For The FIRE DISTRICT of Fishers Island County of Suffolk For the Fiscal Year Ended 12/31/2008 AUTHORIZATION ARTICLE 3, SECTION 30 of the GENERAL MUNICPAL LAW: 1. ***Every Municipal Corporation *** shall annually make a report of its financial condition to the Comptroller. Such report shall be made by the Chief Fiscal Officer of such Municipal Corporation *** 5. All reports shall be certified by the officer making the same and shall be filed with the Comptroller within sixty days after the close of the fiscal year of such Municipal Corporation *** It shall be the duty of the incumbent officer at the time such reports are required to be filed with the Comptroller to file such report *** State of NEW YORK Office of The State Comptroller Division of Local Government and School Accountability Albany, New York 12236 Page 1 FIRE DISTRICT OF Fishers Island *** FINANCIAL SECTION *** Financial Information for the following funds and account groups are included in the Annual Financial Report filed by your government for the fiscal year ended 2007 and has been used by the OSC as the basis for preparing this update document for the fiscal year ended 2008: (A) GENERAL (R) Reserve (TA) AGENCY All amounts included in this update document for 2007 represent data filed by your government with OSC as reviewed and adjusted where necessary. *** SUPPLEMENTAL SECTION *** The Supplemental Section includes the following sections: 1 ) Statement of Indebtedness 2) Schedule of Time Deposits and Investments 3) Bank Reconciliation 4) Local Government Questionnaire 5) Schedule of Employee and Retiree Benefits 6) Schedule of Energy Costs and Consumption All numbers in this report will be rounded to the nearest dollar. Page 2 Fishors Isiand FIRE DISTRICT Ar~nual Update Docur'-'ent Fo~ the Fiscai Year Ending 2008 Frshers Island Fh~E DIS, ,RIOT Aanua! Update Document tine Fiscal Year Ending 2008 ?age4 OSC MLr cpa '~Ccd 47 · ,r~,,~,, Fishers Island FIRE DISTRICT Annual Update Document Foi the : sca Year Ending 2008 Detail Revenues And Other Sources 354,509 · · ' 1,853 356.362 356,719 2.280 A270! 5 b2r : 3.526 362,525 362.525 Fishers Island FIRE DISTRICT Anqual Update Document For tlne Fiscal Year Ending 2008 (A} C~ENERAL Detail Expenditures And Other Uses Nre, Equip & Cap Outlay 18,428 A34!02 12493 Fu~ Cor/tr Expend 165,245 A34104 176608 206;0¢7 82,563 A90258 84 ~16 1,633 A90306 1,491 A90488 4,990 A90456 18,462 Page 6 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2008 (a~ GENERAL Change., in Fund Equily Fund Equity Beginning of Year R( slated Fund Equity - Bo(.i of Year ADD REVENUES AND Ox HER SOURCES )E;)~CT - EXPENDITLJR~ S AND O!HER LJSES Fund Equity-End of Yea~ 466,942 A8021 481,103 466,942 A8022 481,103 356362 352525 342,200 356131 481,103 A8029 487,497 -~too 7 C',SO ML r icipaiit'; ~'- ~'? Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2008 ,: ~,~; ;;~:, ,~ , ...... 359,Z00 '0 TOTAL Estimated Re~nu~s,,A, nd!Otlier:Soi:irdbS ?? ,, r,. ;~, ,,~,, , ; Fishem island FIRE DISTRICT Annual Update Document For tine Fiscal Year Ending 2008 Ap'~ Jn~eFund transfer AgoggN 2(,500 Fishers Island FIRE DISTRICT Annual Update Document Fo~ the Fisca', Year' Ending 2008 Assets Cash, Special R~se~es 429,003 R230 4?%863 Pacje 10 OSC f'v~t~nicipaiit,~ C~de 47; 17~}Q~ i4,0', Fishers Island FIRE DISTRICT ,a,n~qua Update Document For the Fiscal Year Ending 2008 TOVAL L ab e~'An(~ F~n~ Equ iy ........ , ;, 471,863 ,,; 'i ; 429i003 471,863 Page 1 OSC M.inici,~sa O:>,'ce471 ..... Fishers IsJand FIRE DISTRICT /'~,nnual Update Docume¢~t For the Fiscai "/ear Ending 2008 ( F'L xJ Transf ,rs 1~861 1,8~1 R5031 56,000 ~Ab,9,tl~e~ Sources ,, ...... ~ , ....... ~,~, :, 56,000 4~,000 57,67~: 42,86'~ :;a,3e 1 © OSC r~unlchgahtv '-'r ~':!Si1{~rs Islarld FIRE DISTRICT Annual Updete Document For the Fiscal Year Ending 2008 Results of Opera~ion ueta,I Expend,tures And Other Uses .... ~'=~ ......... ~ Fire Equi?mentOtJtlay TOTAL Expend ure~ , ,,~ .... , , : TOTALDe{ailE×p'bnditfi'Fes'And,0ih~r(j~~ ;, R34102 ~ 0 ~ 0 0 0 P a,'je ! 3 CSC ~,/Ju'tdCl:3al t,, 'Ccc ns 47~ i ?(~){)(i,~', iI~l~ Fisners island FIRE DISTRICT Annual Update Document Fo, the Fiscal Year Ending 2008 Fund Equity - Beginning of Year x't~or Period Adj · Dec To Fund Equity Restat[d Fund Equity·Beg of Year 371,550 R8021 429,003 220 R8015 371,330 RaU22 429,003 57673 4286~ 429,003 R8029 471,863 Page 14 OSC L4unlcpa v0oci¢;47"~ ~ , Fishers Is!and FiRE DISTRICT Annual Update Document For the Fiscal Year Ending 2008 (TA AQENCV Balance Sheet Ser'~, ce Award Prcgml--~ Assets [A461 854,S}J4 TO,TAI: ~estments ~.' a~ ;-~ '~ :x ,':,? , s ~ ,~ ~ '~'~: ~'"" ':"": 0 854994 TOT'AL:Asses ;; = -:: ' ,,,'~,~ ;: ~ ~ ,' * { ' ;: ~' 0:, 854~994 Page ! 5 OSC Iv~k!nici,98 ~ :,~ O 6 474 ~ T)" , I,, Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2008 854,994 TO~El~lltes ~ ¢~ ~ · ' ~ .... ~ ~"~: .... '"' 854,994 ~OTAbbab tesAndFundEqu~ , ',, ,' ~;':, ';'k":,,, ~'* ;; :' 0 ;" 854;994 , . 0.¢,. r,,qJplcipaiit~ Code 47'~$7c~ ',' z IA) GENERAL · Adiustment Reason Account Code A8012 Account Code A8015 £R) Reserve Adiustment Reason Account Code R8015 Fishers Island FIRE DISTRICT Financial Comments For the Fiscal Year Ending 2008 Page 17 OSC Municipality Code 471 Fishers Island FIRE DISTRICT Statement of Indebtedness For the Fiscal Year Ending 2008 Page 18 Fishers Island FIRE DISTRICT Schedule of Time Deposits and Investments For the Fiscal Year Ending 2008 CASH: On Hand Demand Deposits Time Deposits Total COLLATERAL: - FDIC Insurance Coltateralized with securities held in possession of municipality or its agent Total EDP Code 9Z2001 9Z2011 9Z2021 9Z2014 9Z2014A Amount $0.00 ,o55.oo $962,066,00 $250,000.00 $905,162.88 $1,155~162,88 INVESTMENTS: - Securities (450) Book Value (cost) Market Value at Balance Sheet Date 9Z4501 9Z4502 Collateralized with securities held in possession of municipality or its agent 9Z4504A Repurchase Agreements (451) Book Value (cost) Market Value at Balance Sheet Date Coltateralized with securities held in possession of municipality or its agent 9Z4511 9Z4512 9Z4514A Page 19 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Bank Reconciliation For the Fiscal Year Ending 2008 Include All Checking, Savings and C.D. Accounts Bank Add: Account Bank Deposit Number Balance In Transit **~'~-54_98_ $3,234 ........ $0 ..... -5654 _._ $73,619 .... ~-5662 ....... $39~8,244 .......... $_0 ..... ~5704 $486,969 $0 Total Adjusted Bank Balance Betty Cash Adjustments Total Cash 9ZCASH Total Cash Balance All Funds 9ZCASHB * * Must be equal Less: Outstanding Checks __. $~ ...... $9 $0 Adjusted Bank Balance $528 $~3,619 $398,244 $486,969 . . $959,360 ..... $.o0 ...... $,~o ......... ....... $959,360 Page 20 OSC Municipality Code 471179004000 Fishers island FIRE DISTRICT Fire District Questionnaire For the Fiscal Year Ending 2008 1 ) Has your district adopted a written procurement prolicy and is it complied with? 2) Has your district contracted to have an independent audit of its financial statements? If not, has the Board of Fire Commissioners performed an internal audit of the Treasurer's records and reports? 3) Does your district have a written travel policy and is it complied with? 4) Are monthly bank reconciliations performed? 5) What is your district's statutory spending limitation margin (amount) for the next fiscal 6) Does your district have a Length of Service Award Program (LOSAP) for volunteer firefighters? if so, how are the LOSAP funds invested? Marketable Securities Annuities Life Insurance Other (describe) _. Response Y Y N Y $762,372 N 7) Has your Fire District adopted an investment policy as required by General Municipal Law, Section 39? Y Page 21 Fishers island FIRE DISTRICT Employee and Retiree Benefits For the Fiscal Year Ending 2008 Account Code 90158 Total Full Time Employees: Total part Time Employees: State Retirement System Police and Fire Retirement Total # of Full Expenditures Time (All Funds) Employees $0.0( $0.0( # of Part # of Retirees Time Employees 90258 Local Pension Fund $84,116.0( 9030~ Socia Security $1,491.0( 9040~ Worker's Compensation $4,996.0( Insurance ' -- -'-~'~'~ Life Insurance $18,452.0( 9050~ Unemployment Insurance $0.0( 9055~ Disability Insurance $0.0I 9060~ Hospital and Medical $0,0( (Dental) Insurance 9070f Union Welfare Benefits $0.00 90851 Supplemental Benefit Payment to $0.00 Disabled Fire Fighters 9189( Oliver Employee Benefits "'~'~ Total $109 065 0O~. iComputed Total From Financial ~;".'~!~i{.'. i;¢' ~Secfion (comparafive purposes only) ..... Page 22 osc Municipality ,~71179004000 Fishers Island FIRE DISTRICT Energy Costs and Consumption For the Fiscal Year Ending 2008 Energy Type Total Total Volume Units Of Alternative Expenditures Measure Units Of Measure Die~,' F~! ' : :]' ~ ---~1,~ : -~-- ~:2_83~' gallon~': -'~)--~ ..... iNatural Oas ~ a ..... cubi~fe~7---- r ...... ": : Page 23 OSC Municipality 47I 179004000 FIRE DISTRICT DEMOGRAPHICS Postal Or.Ma!)ing Address: IPO Sox 222 IFishers Island Street Address or PO Box {631 ) 788-7019 Fire District Telephone Number ~fifiredistrict@fishersisland.n Official Email Address Physical Address: (If Different From Postal Address) I Street Address City (631) 788-7094 Fire District Fax Number [ Website I City State INv I06390 State Zip Zip BOARD DEMOGRAPHICS CHIEF FISCAL OFFICER rKristen Peterson jTreasurer Name TitJe [PO Box 708 IFishers Island NYF'[06390 Street Address or PO Box City [(631) 788-7019 1(63t ) 788-7094 Telephone Number Fax Number [ I 00/00/0000 Email Address Term End Date State Zip CHAIRMAN OF THE BOARD J James Wall JChairman Name Title [PO BOX 612 JFishers Island Street Address or PO Box City [(631 )788-7019 1(631 )788-7094 Telephone Number Fax Number ~firedistdct@fishersisland.n I 01/01/2010 Email Address Term End Date INY ]08390 State Zip I, IKristen Peterson hereby certify that I am the Chief Fiscal Officer of the IFishers island Fire District , and that the information provided in the annual financial repod of the [Fishers island Fire District , for the fiscal year ended I12/31/2008 , is true and correct to the best of my knowledge and belief. By entering the personal identification number assigned by the Office of the State Comptroller to me as the Chief Fiscal of the IFishers Island Fire District , and adopted by me as my signature for use in conjunction with the filing of the IFishers Is[and Fire District 's annual financial report, I am evidencing my express intent to authenticate my certification of the Fishers Island Fire District 's annual financial repod repod for the fiscal year endedI12/31/2008 and filed by means of electronic data transmission. I I ........ I oo/00 0o00 Name of Repod Preparer Personal Identification Number Date if different than Chief Fiscal Officer of Chief Fiscal Officer Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Summary of significant accounting policies: The Annual Financial Report Update Document of the Fishers Island Fire District (the District), as of and for the year ended December 31, 2008 has been prepared in confomaity with the cash regulatory basis of accounting as prescribed by the State Comptroller's Office, which is a comprehensive basis of accounting other than United States generally accepted accounting principles. Financial reporting entity: The District is a governmental entity that provides fire protection to the local community. The District receives most of its funding from property taxes. The District is governed by laws of the State of New York. The Board of Fire Commissioners is the legislative body responsible for the overall operation of the District. All activities and functions performed for the District are its direct responsibility. The Treasurer serves as chief fiscal officer of the District. Basis of presentation: The Annual Financial Report Update Document provides information about the District's funds, including fiduciary funds. The accounts of the District are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. The following fund types are used: Governmental: General Fund The General Fund is the principal operating fund of the District and is used to account for all financial resources except those required to be accounted for in another fund. Debt service is also accounted for in the General Fund. Equipment Reserve Fund The Equipment Resmwe Fund is used to account for and report financial resources to be used for the acquisition of equipment needed by the District. Capital Reserve Fund The Capital Reserve Fund is used to account for and report financial resources to be used for the acquisition, construction, or renovation of major capital facilities. -26- C~ COYLPANY Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Summary of significant accounting policies (continued): Fiduciary Fund Fiduciary funds are used to account for assets held by the District in a trustee or custodial capacity. The District utilizes the following fund: Agency Fund The Agency Fund is used to account for and report assets held by the District in the capacity of trustee, custodian or agent for individuals. Agency funds are custodial in nature and do not involve measurement of results of operations. Basis of accounting: The accompanying Annual Financial Report Update Document has been prepared on the cash regulatory basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. Under that basis, the only asset recognized is cash, and no liabilities are recognized. All transactions are recognized as either cash receipts or disbursements. Non-cash transactions are not recognized in the financial statements. Cash and cash equivalents: Cash and cash equivalents include, demand deposits and temporary investments with original maturities of three months or less from date of acquisition. Interfund transfers: The operations of the District give rise to certain transactions between funds, including transfers of expenditures and revenues to provide services and construct assets. This is either by budget, Board resolution or permissive referendum. Fund balance - reserves and designations: Portions of fund balance are reserved or designated to either satisfy legal restrictions or to plan for future expenditures. The following is a description of the reserve utilized by the District: Reserve for equipment - used for the acquisition of fire apparatus and equipment. Reserve for capital - used for the acquisition, construction, or renovation of major capital facilities. -27- C~ CON, ANY Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Summary of significant accounting policies (continued): Real proper ,ty taxes: All real property assessments are made by the Town of Southold. Real property tax payments are due in two equal installments; the first half payable on December 1 (lien and levy date) preceding the year for which the same is levied and the second half payable May 10, with the first half payable without penalty to January 10 and the second half payable without penalty to May 31. After May 31, all taxes must be paid to the Suffolk County Treasurer with a 5% penalty charge and interest at the rate of 1% per month from February 1. The Town of Southold Receiver of Taxes collects all real estate taxes for the District. The Town of Southold Receiver of Taxes distributes the tax collections to the District. All payments made to the District are made in the year for which the tax has been levied. The Town of Southold Receiver of Taxes tums over uncollected items to the Suffolk County Treasurer who continues the collection of these items. Responsibility for the collection of unpaid taxes rests with Suffolk County. Budgetary data: The District prepares an operating budget for the General Fund each year. The budget is adopted by the Board of Fire District Commissioners as its final budget for the coming year. The budget is not subject to referendum. All budget appropriations lapse at the end of each year. Use of estimates: The preparation of the Annual Financial Report Update Document in conformity with the cash regulatory basis of accounting requires management to make significant estimates and assumptions that affect certain reported amounts disclosures. Accordingly, actual results could differ from those estimates. Deposits with financial institutions and investments: The District's investment activities are governed by State statutes. Resources must be deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks or trust companies located within the State. Collateral is required for demand and time deposits and certificate of deposit not covered by FDIC insurance. In 2009, the District adopted a formal investment policy allowing investments in special time deposit accounts, certificates of deposit, obligations of the United States of America, obligations guaranteed by agencies of the United States of America where the payment of principal and interest are guaranteed by the United States of America, obligations of the State of New York, and obligations issued by a municipality, school district, or fire district other than the District. -28- ~£OMPANY Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT o Deposits with financial institutions and investments (continued): Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be term'ned to it. The District's risk exposure can be categorized as follows: 1. Insured by FDIC insurance. 2. Collateralized by securities held by the pledging financial institution's trust department or agent but not in the District's name. 3. Collateralized by securities held by the pledging financial institution but not in the District's name. 4. Uncollateralized. The District's deposits held by the banks are categorized, based on the above criteria, as follows: Category Amount 1 $ 250,OOO 2 3 905,163 4 Total $1,155.163 The District did not have any investments at year end or during the year. Consequently, the District was not exposed to any material interest rate risk. Length of Service Awards Program - LOSAP: The information contained in this note is based on information for the Length of Service Awards Program for the plan year ending December 31, 2008, which is the most recent plata year for which complete information is available. The funding detail is for the period January 1, 2007 through December 31,2007. The District established a defined benefit LOSAP for the active volunteer firefighters of the District. The program took effect on January 1, 1993. The program was established pursuant to Article 11-A of the General Municipal Law. The program provides municipally-funded pension-like benefits to facilitate the recruitment and retention of active volunteer firefighters. The District is the sponsor of the program. -29- C~ COivIPANY Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT o Length of Service Awards Program - LOSAP (continued): Program description: Participation~ vesting and service credit: Active volunteer firefighters who have reached the age of 18 and who have completed one year of service are eligible to participate in the program. Participants acquire a nonforfeitable right to a service award after being credited with 5 years of firefighting service or upon attaining the program's entitlement age and completing one year of plan participation. The program's entitlement age is 65. In general, an active volunteer firefighter is credited with a year of firefighting service for each calendar year after the establishment of the program in which he or she accumulates fifty points. Points are granted for the performance of certain activities in accordance with a system established by the sponsor on the basis of a statutory list of activities and point values. A participant may also receive credit for 5 years of fire fighting service rendered prior to the establishment of the program. Benefits: A participant's benefit under the program is the actuarial equivalent of a monthly payment for life, with ten years certain, equal to $20 multiplied by the person's total number of years of firefighting service. The number of years of firefighfing service used to compute the benefit cannot exceed thirty. Benefits are not payable until the first day of the month coincident with or following the attainment of age 65 and completion of one year of plan participation. Except in the case of disability or death, benefits are payable when a participant reaches entitlement age. The program provides statutorily mandated death and disability benefits. Fiduciar~ investment and control: Service credit is determined by the governing board of the sponsor, based on the information certified to the governing board by the fire company. The fire company must maintain all required records on forms prescribed by the governing board. The governing board of the sponsor has retained and designated Hometown Insurance Agency (Hometown) to assist in the administration of the program. The designated program administrator's functions include providing basic annual administration services as follows: -30- Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Length of Service Awards Program - LOSAP (continued): Program description (continued): Fiduciary investment and control: a) providing participants enrollment forms b) providing an annual reminder letter with a review list for the current anniversary date c) preparation of Explanation of Plan Benefits d) calculation of Schedule of Benefits and cost annually e) participants' benefit calculation at time of severance or retirement f) Auxiliary Fund valuation and suggested deposit g) summary of required annual contribution h) annual actuarial review and recommended benefit enhancements Disbursements of program assets for the payment of benefits or administrative expenses must be approved. The following is an explanation of the process for approving disbursements: Payment of benefits: Entitlement benefits - When a participant becomes eligible to receive entitlement benefits, the Plan Sponsor prepares and submits an authorization letter to Hometown indicating the participant's name, address, age, social security number, term of service and other pertinent information. Hometown will then facilitate the disbursement of entitlement benefits. Death benefits - Upon notification from the Plan Sponsor of a participant's death, Hometown forwards an individual claim form to the Plan Sponsor for completion. The Plan Sponsor will then complete and return this form, accompanied by a death certificate, to Hometown, authorizing the disbursement of a death benefit. Disability benefits - When a participant becomes disabled, the Plan Sponsor will notify Hometown in writing of a participant's total and permanent disability. Hometown will then verify that the participant has been declared 100% disabled by the Workers Compensation Board. Subsequent to this verification, Hometown will facilitate the disbursement of disability benefits. -31- ~C0~ANY Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Length of Service Awards Program ~ LOSAP (continued): Payment of administrative expenses: 1. Per the executed Service Fee Agreement, the Plan Sponsor agrees to payment as contracted. Authority to invest program assets is vested in Genworth Financial, Inc. and Standard Security Life Insurance Company. Subject to restrictions in the program document, program assets are invested in accordance with a statutory "prudent person" rule. The Sponsor has invested plan funds in Group Annuity Contracts with guaranteed floor rates of interest of 3% per mmum. The sponsor is required to retain an actuary to determine the amount of the sponsor's contributions to the plan. The actuary retained by the sponsor for this purpose is Harbridge Consulting Group, LLC. Portions of the following information are derived from a report prepared by the actuary dated March, 2008. Program financial condition: Assets and liabilities: Actuarial present value of vested accrued benefits at December 31, 2007: Vested Non-vested Less: assets available for benefits % of Total $958,9O8 37,467 $996,375 New York Commercial Trust Standard security annuity Genworth financial annuity Cash value of life insurance Total net assets available for benefits Total unfunded benefits 1.73% 28.73% 30.22% 39.32% $ 13,883 229,818 241,74l 314,510 799,952 $196,423 -32- C CON A P Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Length of Service Awards Program - LOSAP (continued): Program financial condition (continued): Receipts and disbursements: Plan net assets, beginning of year $760,357 Changes during the year: Plan contributions $ 37,100 Investment income earned 17,132 Cash value - surrendered life policies 4,779 Plan benefit withdrawals (32,220) Cash value of life insurance 15,701 Life insurance premium (2,897) 39,595 Plan net assets, end of year $799,952 Contributions: Range of sponsor's contribution recommended by actuary $61,524 - $73,066 Amount of sponsor's actual contribution $37,100 Administration fees: Fees paid to designated program administrator from separate District funds $ 2,900 Funding methodology and actuarial assumptions: Normal costs: The actuarial valuation methodology used by the actuary to determine the sponsor's contribution is the Unit Credit Cost Method. The assumptions used by the actuary to determine the sponsor's contribution and the actuarial present value of benefits are: Assumed rate of return on investment 6% Mortality table used for: Pre-retirement: None Post-retirement: 1994 Group Annuity - Male -33- ~COMPANY Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Commitments and contingencies: The District is exposed to various risks of loss related to torts; theft of; damage to; and destruction of assets; injuries to employees; errors and omissions; natural disasters, etc. These risks are covered by commercial insurance purchased from independent third parties. Settled claims from these risks have not exceeded commercial insurance coverage. -34- C~COMP~P~