HomeMy WebLinkAbout2008TOWN OF SOUTHOLD
SINGLE AUDIT REPORTS
Year ended December 31, 2008
FINANCIAL SECTION
Independent Auditors' Report .................................................................................................................... 1-2
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis ................................................................................................... 3-10
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Assets ......................................................................................................................... 11
Statement of Activities ............................................................................................................................. 12
Fund Financial Statements
Governmental Fund Financial Statements
Balance Sheet and Reconciliation of the Governmental Funds Balance Sheet to
the Statement of Net Assets .............................................................................................................. 13-14
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 ......................................................... 15-16
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Assets .......................................................................................................... 17
Notes to Financial Statements ................................................................................................................... 18-38
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT DISCUSSION AND
ANALYSIS
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
General Fund ........................................................................................................................................ 39
Highway Fund ....................................................................................................................................... 40
OTHER SUPPLEMENTARY INFORMATION
Combining Fund Statements:
Non-major Governmental Funds Combining Balance Sheet ....................................................................................................................
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ........................
DISCRETELY PRESENTED COMPONENT UNITS
41
42
Discretely Presented Component Units:
Combining Statement of Net Assets ....................................................................................................... 43
Combining Statement of Activities .......................................................................................................... 44
OTHER REPORTS
Schedule of Expenditures of Federal Awards ................................................................................... 45
Note to Schedule of Expenditures of Federal Awards ....................................................................... 46
Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit
of Financial Statements Performed in Accordance with
Government Auditing Standards ........................................................................................................ 47-48
Report on Compliance with Requirements Applicable
To Each Major Program and Internal Control Over
Compliance in Accordance with OMB Circular A-133 ....................................................................... 49-50
Schedule of Findings and Questioned Costs .................................................................................... 51-52
FINANCIAL
SECTION
CERTIFIED PUBLIC ACCOUNTANTS
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, each major fund,
the aggregate discretely presented component units, and the aggregate remaining fund information of the
Town of Southold, New York, as of December 31, 2008, and for the year then ended, which collectively
compdse 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 opinions 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 Amedca 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 financial statements are free of matedal misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
The financial statements of the Town of Southold's discretely presented component units with the
exception of one, the Fishers Island Ferry District, was 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 not audited represent 32.4%, 37.3% and 36.8%, respectively, of the assets,
net assets and revenues of the aggregate discretely presented component units. The financial
statements of the Fishers Island Ferry District was 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, are based solely on the reports of the other auditors.
In our opinion, except for the effects of such adjustments discussed in the preceding paragraph, the
financial statements referred to above present faidy, in all material respects, the respective financial
position of the governmental activities, each major fund, the aggregate discretely presented component
units, and the aggregate remaining fund information of the Town of Southold, New York, as of December
31, 2008, 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.
As discussed in Note A.6 to the financial statements the Town adopted the previsions of GASB Statement
No. 45, Accounting and Financial Reporting by Employers for Post-employment Benefits Other Than
Pensions.
PERSONAL SERVICE.TRUSTED ADVICE.
ALBRECHT, VIGGIANO, ZURECK & COMPANY, PC
245 PARK AVENUE, 24TH FLOOR 25 SUFFOLK COURT
NEWYORK, NY 10167 HAUPPAUGE, NY11788-3715
-1- T: 212 792.4075 T:631 434.9500 F:631,4349518
www.avz.com
In accordance with Government Auditing Standards, we have also issued our report dated December 16,
2009 on our consideration of the Town of Southold'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.
The Management's Discussion and Analysis and the budgetary information ara not a raquirad part of the
basic financial statements but are supplementary information required by accounting principles generally
accepted in the United States of Amedca. 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.
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the Town of Southold, New York's basic financial statements. The accompanying
schedule of expenditures of federal awards is presented for purposes of additional analysis as required
by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and
Non-Profit Organizations, and is also not a raquirad part of the basic financial statements of the Town of
Southoid, New York. The combining and individual nonmajor fund financial statements and the schedule
of expenditures of federal awards have been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, is faidy presented in all material respects in relation to
the basic financial statements taken as a whole.
Hauppauge, New York
December 16, 2009
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REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2008
The following is a discussion and analysis of the Town of Southold's financial performance, providing an overview
of the Town's financial activities for the year ended December 31, 2008. 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.
Reporting the Town as a Whole
The Statement of Net Assets and the Statement of Activities
One of the most important questions asked about the Town's finances is, "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.2).
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TOWN OF SOIJTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2008
Reporting the Town's Most Significant 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 funding 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 accounting 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 general government operations and the basic services it provides. Governmental fund
information helps you determine whether there are more or fewer financial resources that can be spent in the
near future to finance the Town's programs. We describe the relationship (or differences) between
governmental 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
Reporting 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 governmental activities.
Condensed Statement of Net Assets
Pdmary Governmental Activities
December 31, 2008 and 2007
2008 2007
Assets
Current and other assets $ 18,927,261 $ 43,347,669
Capital assets 137,470,841 109,728,421
Total assets 156,398,102 153,076,090
Liabilities
Current and other liabilities 16,801,316 24,314,029
Long-term liabilities 38,933,700 28,413,510
Total liabilities 55,735,016 52,727,539
Net assets
Invested in capital assets,
net of related debt 104,156,915 83,294,421
Restricted:
Land acquisition 2,674,872 13,909,980
Debt service 14,158 79,339
Unrestricted (6,182,859) 3,064,811
Total net assets $ 100,663,086 $ 100,348,551
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2008
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
Total assets of the primary government as of December 31, 2008 were $156.4 million, an increase of $3.3
million. Total liabilities as of December 31, 2008 were $55.7 million, which represents an increase of $3.0
million from December 31, 2007. This results in a net asset balance of $100.7 million, an increase of $.3
million. Of the Town's net asset balance, $104.2 million were invested in capital assets, net of related debt;
$2.7 million was restricted for future land acquisition and payments on debt service while there was a deficit of
($6.2) million in unrestricted net assets.
The deficit balance of unrestricted net assets does not necessarily indicate stress. The deficit balance of
unrestricted net assets arose primarily because of the reclassification of net assets from unrestricted to
invested in capital assets, net of related debt due to the purchases of assets including community preservation
properties. In addition, long-term liabilities, which include other post-employment benefits payable,
compensated absences, and landfill closure and post closure care monitoring which will be funded through
future budgetary appropriations when they become payable in future periods.
Changes in Net Assets
Primary Governmental Activities
For the years ended December 31, 2008 and 2007
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 $
2008 2007
$ 3,603,426 $ 3,260,873
834,112 842,604
2,681,338 2,121,558
7,118,876 6,225,035
24,569,013 23,065,503
112,305 109,909
6,258,627 6,989,400
737,846 1,502,349
1,551,461 2,293,295
771,265 930,666
34,000,517 34,891,122
41,119,393 41,116,157
9,508,486 7,020,895
15,390,212 12,358,296
46,925 46,146
7,767,309 6,980,032
1,820,114 1,506,488
275,382 629,444
4,796,995 5,390,045
1,199,435 837,461
40,804,858 34,768,807
314,535 $ 6,347,350
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2008
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
Net Cost of Services
Primary Governmental Activities
For the year ended December 31,2008
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
$ 9,508,486 $ 352,686 $ 9,155,800
15,390,212 689,084 14,701,128
46,925 10,449 36,476
7,767,309 389,713 7,377,596
1,820,114 440,185 1,379,929
275,382 210,108 65,274
4,796,995 5,026,651 (229,656)
1,199,435 1,199,435
$ 40,804,858 $ 7,118,876 $33,685,982
The cost of all governmental activities this year was $40.8 million. The net cost of these services, however,
after subsidized by program revenues including charges for services and program grants, was $33.7 million.
The Town's change in net assets after general revenues of $34.0 million was an overall increase of $.3 million.
$18,000,000
SI6,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
Expenses and Program Revenues
Governmental Activities
iQ Expenses
i BProgram Revenues
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2008
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
12%
2%
19%
services
9%
State aid -
unrestdcted
6%
Revenue by Source
Governmental Activities
for the year ended December 31, 2008
Real property taxes $ 24,569,013
State aid - unrestricted 1,551,461
Charges for services 3,603,426
Other general revenues 7,880,043
Operating grants and contributions 834,112
Capital grants and contributions 2,681,338
$ 41,119,393
THE TOWN'S FUNDS
The general fund balance has decreased by approximately $1.7 million due to the decrease in mortgage tax
and interest earnings in the current year due to the current economic conditions.
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, 2008, and the amount of
change and percentage of total in relation to the prior year.
Increase %
2008 2007 (Decrease) Change
REVENUES
Real property taxes $ 24,569,013
Other real property tax items 112,305
Non-property tax items 6,258,627
Departmental income 2,999,459
Intergovernmental charges 262,977
Use of money and property 876,863
Licenses and permits 425,860
Fines and forfeitures 169,119
Sale of property and compensation for loss 379,797
Miscellaneous local sources 551,492
State aid 2,757,616
Federal aid 1,757,284
Total Governmental Fund Revenues $ 41,120,412
$ 23,065,503
109,909
917,964
2,559,292
6,401,543
1,650,001
433,194
155,477
393,933
487,582
3,696,346
1,280,7O9
$ 41,151,453
$ 1,503,510 6.5%
2,396 2.2%
5,340,663 581.8%
440,167 17.2%
(6,138,566) -95.9%
(773,138) -46.9%
(7,334) -1.7%
13,642 8.8%
(14,136) -3.6%
63,910 1&1%
(938,730) -25.4%
476,575 37.2%
$ (31,041) ~
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2008
THE TOWN'S FUNDS .(continued)
EXPENDITURES
Increase %
2~ ~7 (Decrease) Change
General government support $ 5,747,219 $ 5,322,653 $ 424,566 8.0%
Public safety 9,455,215 8,764,954 690,261 7.9%
Public health 42,608 42~608 0.0%
Transportation 4,014,414 3,988,092 26,322 0.7°.4
Economic assistance and cpgortunity 1,147,293 1,064,905 82,388 7.7%
Home and comn~nity services 452,588 3,518,654 (3,066,066) -87.1%
Culture and recreation 3,749,271 417,654 3,331,617 797.7%
Employee benefits 8,245,765 7,151,453 1,094,312 15.3%
Capital 30,430,379 12,436,627 17,993,752 144.7%
Deb{ service prindpal and interest 2,683,567 1,622,942 1,060,625 65~4%
Tctal Governmental Fund Expenditures $ 65,968,319 $ 44,330,542 $ 21,637,777 48.8%
GENERAL FUND BUDGETARY HIGHLIGHTS
The Town appropriated expenditures in the original General Fund budget in excess of estimated revenues in
the amounts of approximately $2.2 million, by designating unrese~ed fund balance from the prior year. Actual
revenues were less than anticipated by approximately $.8 million. Actual mortgage tax revenue was less than
anticipated by approximately $.7 million. Actual expenditures in all budgetary line items were less than the
budgetary appropriation by approximately $2.6 million. 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. The change in original budget to final budget for
revenues did not change significantly. The increase in the original budget to the final budget in expenditures is
attributable to the increase in the employee benefits due to an increase in medical claims paid during 2008.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
As of December 31, 2008 the primary government had $137.5 million in net capital assets including land,
buildings, improvements, machinery and equipment, and infrastructure. The Town's component units had
$21.3 million in net capital assets including land, buildings, improvements, machinery and equipment, and
infrastructure.
Buildings $ 8,829,508 $ 8.316,323
Improvements other than buildings 13,645,007 13,624,650
Machinery and equipment 11,038,290 10.197,793
Infrastructure 72,869,891 71.461,368
Total capital assets
Less accumulated depreciation
Primary government - Total net capital assets
ComDonent 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
205,352,656 173.597,074
67,881,815 63,868,653
$ 137,470,841 $ 109,728,421
$ 2.193,353 $ 2,193,353
-0- 404,367
3,899,322 3,500,910
17,048,419 17.028,469
3,418,972 3,504,995
2,538,150 2,172,080
29,098,216 28,804,174
7,760,911 6,702,685
$ 21,337,305 $ 22,101,489
-8-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2008
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 2009
General Fund $ 12,900
Highway Fund 380,000
Special Districts 85,000
Total Equipment $ 4771900
Improvements
General Fund $ 221,500
Highway Fund 900,000
Special Districts 800,000
Total Improvements $ 1,921,500
Total Program $ 2.399.400
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 Aa3 as of December 31,
2008.
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, 2008 was 5.80%.
At December 31, 2008, the Town had approximately $32.2 million in long term general obligation bonds
outstanding, of which $29.7 million was for general Town purposes. Also outstanding at year-end were bond
anticipation notes in the amount of $6.6 million of which $5.2 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 ANALYSIS
December 31, 2008
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
Property Tax
The Town has adopted a budget for the 2009 fiscal year which factors in inflation and other adjustments to
revenues and expenditures as well as prior year positive and negative fund balances. The 2009 budget
includes an overall increase in real property tax revenues from the prior year of approximately 10.38% 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 2008, financial
assistance included state aid consisting of mortgage tax of $1.6 million, consolidated highway aid of $327
thousand, and other state aid of approximately $778 thousand. State aid per capita was $53 thousand and
County local government assistance was $143 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 2009 budget included similar amounts for this financial assistance.
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.
-10-
BASIC FINANCIAL
STATEMENTS
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF NET ASSETS
December 31, 2008
ASSETS
Current Assets:
Cash and investments
Cash - restricted
Accounts receivable
Due from fiduciary funds
Due from other governments
Due from pdmary 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 component units
Unearned revenue
Non-current liabilities due within one year
General obligafion bonds payable
Compensated absences
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 landSll closure
and postclosure care costs
Other post-employment benefits payable
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
Pdmary
Governmental Component
Activities Units
$ 13,042,627 $ 2,010,547
2,016,779
211,694 72,532
64,670
1,849,401
356,557
693,869 16,822
1,005,770 48,875
871
18,821,011 2,570,003
106,250
98,969,960 2,193,352
38,500,881 19,143,953
137,577,091 21,337,305
156,398,102 23,907,308
1,437,313 233,816
265,543 46,991
5,179,300 1,399,800
356,557
7,206,658 506,561
1,870,000 205,000
466,125 165,077
45,438
19,820
16,801,316 2,602,683
27,850,000 2,250,000
6,912,197
47,665
496,624
3,674,879 95,099
38,933,700 2,392,764
55,735,016 4,995,447
104,156,915 18,034,616
2,674,872
14,158
(6,182,859) 877,245
$100,663,086 $ 18,911,861
See notes to the financial statements.
-11-
Function/Program
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF ACTIVITIES
Year ended December 31, 2008
Program Revenues
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
Net Expenses (Revenues) and
Change in Net Assets
Primary Component
Govemment 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 Pdmary Govemment
COMPONENT UNITS
General govemment support
Public health
Transportation
Culture and recreation
Home and community services
Interest on debt
9,508,486 $ 217,644 $ 135,042 $ 9,155,800
15,390,212 583,364 105,720 14,701,128
46,925 10,449 36,476
7,767,309 26,893 36,000 $ 326,820 7,377,596
1,820,1 t4 186,093 254,092 1,379,929
275,382 210,108 65,274
4,796,995 2,379,324 292,809 2,354,518 (229,656)
1,199,435 1,199,435
$ 40,804,858 $ 3,603,426 $ 834,112 $ 2,681,338 $ 33,685,982
182,040
91,371
3,794,749 $ 2,497,801
836,395
727,308 41,726
144,802
Total Component Units $ 5,776,665 $ 2,539,527 $
$ 305,493
-0- $ 305,493
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
$ 182,040
91,371
991,455
836,395
685,582
144,802
$ 2,931,645
$ 24,569,013 $ 2,216,709
112,305 1,593
6,258,627 6,762
737,846 100,040
1,551,461 159,716
771,265 170,991
34,000,517 2,655,811
314,535 (275,834)
100,348,551 19,187,695
$ 100,663,086 $ 18,911,861
See notes to financial statements.
-12-
ASSETS
Cash and investments
Cash - restricted
· Accounts receivable
Due from other funds
State and federal aid receivable
Due from other governments
Suppty inventory
Prepaids
Total Assets
· LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
Retained percentages
Bond anticipation notes payable
Due to other funds
Due to component units
· Due to other governments
Deferred revenue
Total Liabilities
FUND BALANCE
Fund Balances - Reserved:
Encumbrances
Supply inventory
· Prepaids
Community preservation
Debt service
Fund Balance - Unreserved:
Designated - Ensuing year's budget
Insurance claims
Special revenue funds
· Undesignated
Total Fund Balance (Deficit)
Total Liabilities and Fund Balance
TOWN OF SOUTHOLD
BALANCE SHEET
GOVERNMENTALFUNDS
December31,2008
MAJOR GOVERNMENTAL FUNDS Non-Major
Capital Community Governmental
General Highway Projects Preservation Funds Totals
$ 8,437,480 $ 1,701,250 $ 1,604,503 $ 1,299,394 $ 13,042,627
$ 2,016,779 2,016,779
57,096 6,494 148,104 211,694
229,666 524,836 15,538 482,782 1,252,822
59,343 125,895 431,868 76,763 693,869
1,534,523 314,878 1,849,401
871 871
456.001 45,600 44,575 546,176
$ 10.774,980 $ 2,271,686 $ 1,745,936 $ 2,770,019 $ 2.051,618 $ 19,614.239
$ 668,607 $ 147,830 $ 189,244 $ 95,147 $ 192,811 $ 1,293,639
142,163 142,163
5.179,300 5,179,300
1.181.019 25.164 46.105 534 1,252,822
356,557 356,557
1,511 1,511
5,204,960 1.175,130 826.568 7,206.658
7,412,654 1,348,124 5,556,812 95,147 1,019,913 15,432,650
51,076 51,076
871 871
456,001 45,600 44,575 546,176
2,674,872 2,674,872
14,158 14,158
1,262.000 381,020 1,643,020
343,316 343,316
372.700 372,700
1.249,062 496.942 (3.825.034) 614.430 (1.464.600)
3.362,326 923,562 (3,810,876) 2,674.872 1,031.705 4,181.589
$ 10,774.980 $ 2.271,686 $ 1,745.936 $ 2,770,019 $ 2,051,618 $ 19,614,239
See notes to the financial statements.
-13-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
STATEMENT OF NET ASSETS
December 31, 2008
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
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
Other postemployment benefits payable
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
$ 98,969,960
106,382,696
(67,881,815)
$ (29,720,000
(7,378,322
(516,444
(3,674,879
4,181,589
137,470,841
(41,289,645)
459,594
106,250
(265,543)
$ 100,663,086
See notes to financial statements.
-14-
TOWN OF SOUTHOLD
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
Year ended December 31, 2008
REVENUES
Real property taxes
Other real property tax items
· Non-property tax items
Departmental income
Intergovernmental charges
Use of money and property
Licenses and permits
Fines and forfeitures
Sale of property and compensation for loss
Miscellaneous local sources
· State aid
Federal aid
Total Revenues
EXPENDITURES
Current:
General 9overnment support
Public safety
· Health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Employee benefits
Capital Outlay
· Debt Service:
Principal
Interest
Total Expenditures
Excess (Deficiency) of Revenues Over
Expenditures
· Other Financing Sources (Uses)
Debt proceeds
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balances at Beginning of Year
Fund Balances at End of Year
MAJOR GOVERNMENTAL FUNDS
Non-Major
Capital Community Governmental
General Highwa¥ Projects Preservation Funds Totals
$17.391.288 $4,316.095 $2,861.630 $24.569,013
94.113 11.777 6.415 112.305
751.073 $ 5.251,258 256.296 6.258.627
611.598 2.387.861 2.999.459
262.977 262,977
496.395 61.374 $ 67.076 209.082 42,936 876.863
244.910 13.190 167,760 425.860
169,119 169.119
159,726 7.416 212,655 379.797
190,816 13.703 14.064 332.020 889 551.492
1,656.760 326.820 125.895 431.868 216.273 2.757.616
147,711 1.464.735 144.838 1.757,284
22,176.486 4.750.375 207,035 7.688,963 6.297,553 41,120.412
5,479,661 135 267,423 5,747,219
8,398,429 1,056,786 9,455,215
35,238 7,370 42,608
470,797 3,543,617 4,0t4,414
1,147,293 t,147,293
452,588 452,588
426,656 3,322,615 3,749,271
7,276,770 498,813 470,182 8,245,765
13,677,617 16,752,762 30,430,379
703,040 27,1 O0 346,300 418,560 1,495,000
270,747 13,128 146,322 525,034 233,336 1,188,567
24.661.219 4.082.793 13.823.939 17.624.096 5,776,272 65,968,319
(2.484.733) 667,582 (13,616,904) (9.935.133) 521.281 (24.847.907)
8,850,000 8.850.000
3.493.057 678.382 4.171.439
(2.729.790) (823,241) (618.40S) (4.171.439)
763,267 (823.241) 9.528.382 -0- (618.408) 8.850.000
(1.721.466) (155.659) (4.088,522) (9.935.133) (97.127)
5.083.792 1.079,221 277.646 12.610.005 1,128,832
$ 3.362.326 $ 923,562 $ 3,810.876) $ 2,674.872 $1,031.705
(15.997,907)
20,179,496
$ 4.181,589
See notes to the financial statements.
-15-
TOWN OF SOIJTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
Year ended December 31,2008
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
31,860,086
(4,112,239)
(5,427)
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
Compensated absences
Estimated liability for landfill closure
and postclosure care costs
Other postemployment benefits payable
Accrued interest payable
Change in Net Assets of Governmental Activities
$ (15,997,907)
27,742,420
(27,385)
(21,250)
(8,850,000)
1,495,000
(406,925)
66,329
(3,674,879)
(10,868)
$ 314,535
See notes to financial statements.
-16-
TOWN OF SOUTHOLD
STATEMENT OF FIDUCIARY NET ASSETS
December 31, 2008
ASSETS
Cash and investments
Total Assets
Fishers Island
Town Ferry District Totals
$ 10,731,186 $ 64,670 $10,795,856
$ 10,731,186 $ 64,670 $10,795,856
LIABILITIES
Other liabilities $ 4,762
Due to other governments 10,024,906
Other liabilities 418,151
Deposits held 283,367
Total Liabilities
$ 64,670 $ 69,432
10,024,906
418,151
283,367
$ 10,731,186 $ 64,670 $10,795,856
See notes to financial statements.
-17-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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 vadous 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 ara 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 Highw~ays, Justices and Town Trustees are
all elected and serve for four years, respectively. The Town provides a full range of municipal services,
including public safety, transportation, home and community services, public works and 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 accounting and financial reporting principles.
The more significant of the government's accounting policies are described below.
1. REPORTING ENTrI'Y
The financial reporting entity consists of: la) the primary government, which is the Town of
Southold; lb) organizations for which the primary government is financially accountable; and lc)
other organizations for which the nature and significance of their relationship with the primary
government 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. 14 including legal standing, dependency and
financial accountability. Based on the application of these criteria, the following is a summary of
certain entities considered in determining the Town of Southold's reporting entity.
Certain special districts of the Town of Southold provide sanitation, ferry, and park services to
residents and businesses within the districts. These special districts are organized under New
York State Town law and have separately elected boards. Special districts cannot issue bonded
debt without the approval and the backing of the full faith and credit of the Town. 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 (reporting the Town's major funds).
Government-wide Financial Statements
The government-wide financial statements reports information on the Town as a whole, except
fiduciary activities, with separate columns for the primary governmental activities as well as the
discretely presented component units.
In the government-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.
-18-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2008
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 the 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).
Community Preservation Fund - is used to account for financial resources for the purchase of
land.
-19-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2008
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 am 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
- 20 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3. BASIS OF ACCOUNTINGIMEASUREMENT FOCUS
Measurement focus refem to what is being measured whereas the basis of accounting refers to
when revenues and expenditures are recognized in the accounts and reported 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.
RESTRICTED ASSETS
Certain assets of the community preservation fund are classified as restricted assets because their
use is restricted by contractual agreements and regulations.
-21 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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 fer 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 yearn
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 REVENU~UNEARNEDINCOME
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 vendom 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 pedod and for retirement benefits that
will benefit a future period.
LONG-TERM OBLIGATIONS
The liabilities for long-term obligations consisting of general obligation bonds, compensated
absences, due to employee retirement system, judgments and claims, other post employment
benefits, 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.
- 22 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES AND FUND EQUITY (continued)
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.
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.
5. REVENUES AND EXPENDITURES
REAL PROPERTYTAXASSESSMENTAND 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
generel taxes. The Town's assessment rolls are used for the levy of real property taxes by the
Town and the School Districts, as well as by the County and by Special Districts of the County and
the Town.
The Town of Southold Receiver of Taxes collects all real property taxes for the Town, Suffolk
County, Town Special Districts 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 1% per month
from January 10th until May 31st, 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.
- 23 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
5. REVENUES AND EXPENDITURES (continued)
INTERFUND TRANSACTIONS
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 general fund and capital projects funds from the other
funds for their appropriate share of the 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 non-current 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.
OTHER POSTEMPLOYMENT BENEFITS
In addition to providing pension benefits, the Town provides health insurance coverage and survivor
benefits for retired employaes 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 the 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 dudng the year or under the Town of Southold's self insurance plan which is
further described in Note D.
The Town recognizes the cost of providing benefits by recording its share of insurance premiums
as an expenditure in the year paid. The liability for these other post-employment benefits payable is
recorded as long-term debt in the government-wide statements. 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 experience 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.
6. NEW ACCOUNTING PRINCIPLES
Effective with this financial report for the year ended December 31, 2008, the Town has adopted
Governmental Accounting Standards Board Statement No. 45, Accounting and Financial Reporting
by Employers for Post-employment Benefits Other than Pensions (OPEB). This statement
establishes standards for reporting the liability for non-pension post-employment benefits, chiefly
the health care premiums for retirees.
- 24 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
6. NEW ACCOUNTING PRINCIPLES (continued)
Effective with this financial report for the year ended December 31, 2008, the Town has adopted
Governmental Accounting Standards Board Statement No. 49 "Accounting and Financial Reporting
for Pollution Remediation Obligations." The Statement establishes accounting and financial
reporting standards for pollution remediation obligations which are obligations to address the
current or potential detrimental effects of existing pollution (e.g., hazardous waste spills and
asbestos contamination) by participating in pollution remediation activities such as site
assessments and cleanups. Pollution remediation obligations exclude pollution prevention or control
obligations relating to current operations and future pollution remediation activities such as landfill
closure and post-closure care. Statement No. 49 identifies the obligation events which require a
governmental entity to estimate the components of expected pollution remediation outlays and
determine whether outlays for those components should be accrued as a liability, or, if appropriate,
capitalized when goods and services are acquired. The Town has determined that there is no
impact on its financial position or results of operations resulting from the adoption.
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.
- 25 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2008
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (continued)
2. FUND BALANCES
DESIGNATION OF FUND BALANCE
Portions of the unreserved balances at December 31, 2008 were designated for the subsequent
year's operating budgets as follows:
Fund Balance
Unreserved and Fund Balance
Designated Unreserved and
Total for Subsequent Designated Fund Balance
Fund Balance Year's for Insurance Unreserved
Fund Unreserved Budget Claims Undesignated
Major Govemmental Funds
General Fund- Townwide $2,854,378 $1,262,000
Highway Fund 877,962 381,020
Non-Major Funds:
Town Outside Village 731,359 292,000
East West Fire Protection District 14,781 5,700
Southold Wastewater District 251,871 75,000
Fishers Island Sewer District 36,484
Solid Waste Management District (47,365)
FUND DEFICITS
$ 343,316 $1,249,062
496,942
439,359
9,081
176,871
36,484
(47,365)
The capital projects fund had a deficit fund balance at December 31, 2008. The capital projects
fund deficit will be eliminated as short-term debt is redeemed or converted to permanent financing.
The solid waste management fund has a deficit fund balance at December 31, 2008. The solid
waste management fund deficit is due to budgeted revenues primarily tipping fees exceeding actual
amounts received. The 2009 budget includes an appropriation to fund this deficit.
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 deposit 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.
- 26 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
DETAILED NOTES ON ALL FUNDS (continued)
t. CASH AND INVESTMENTS (continued)
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.
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, 2008 the Town's cash book balance was approximately $25,900,000. This
amount is inclusive of Fiduciary fund deposits of approximately $10,800,000 but exclusive of petty
cash of approximately $2,400. The available bank balance was approximately $29,100,000. Of the
bank balance, $1,740,628 was covered by Federal deposit insurance, and approximately
$37,200,000 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, 2008 were as
follows:
Major Governmental Funds:
General Fund - Town wide
Highway Fund
Capital Projects Fund
Non-Major Governmental Funds:
General Fund - Part Town
Special Grant Fund
East-West Fire District
$outhold Wastewater District
Fishers Island Sewer Distdct
Solid Waste Management District
Amount Amount
Receivable Payable
$ 229,666 $ 1,181,019
524,836 25,164
15,538 46,105
122,581
534
74,366
668
306
284,861
Total $ 1.252.82~22 $ 1.252.822
Interfund receivable and payable balances for the primary government at December 31, 2008
are expected to be paid currently.
- 27 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
DETAILED NOTES ON ALL FUNDS (continued)
2. INTERFUND RECEIVABLES AND PAYABLES (continued)
Interfund transfer balances for the primary government at December 31, 2008 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
Fishers Island Sewer Distdct
Solid Waste Management District
3. CAPITAL ASSETS
Primary qovemment
Capital assets not being depreciated
Land
Construction in progress
Total
Transfers Transfers
In Out
$ 3,493,057 $ 2,729,790
823,241
678,382
236,179
3,700
378,529
$ 4.171.43~9 $ 4.171.439
Balance Balance
1/1/08 Additions Deletions 12/31/08
$ 68,929,202 $ 26,612,576 $ 95,541,778
1,067,738 2,425,545 $ 65,101 3,428,182
69,996.940 29.038,121 65,101 98,969,960
513,185 8,829,508
20,357 13,645,007
945,001 104,504 11,038,290
1,408,523 72,869,891
103,600,134 2,887,066 104,504 106,382,696
Total capital assets not being depreciated
Depredable capital assets
Buildings 8,316,323
Improvements other than buildings 13,624,650
Machinery and equipment 10.197.793
Infrastructure 71,461,368
Total depreciable capital assets
Less accumulated depredation
Buildings 2.328,886
Improvements other than buildings 4,342,211
Machinery and equipment 6,650,154
Infrastructure 50,547.402
Total accumulated depreciation $ 63,868,653
Total net depreciable capital assets
Total net capital assets
138,642 2,467,528
411,421 4,753.632
790,624 99,077 7.341.701
2,771,552 53,318,954
$ 4,112,239 $ 99,077 67,881,815
38.500.881
$137,470.841
Depreciation expense was charged to governmental functions as follows:
General government support
Public safety
Transpor[ation
Economic assistance and opportunity
Culture and recreation
Home and community services
$ 260,106
1721597
3,0491245
37,013
66,708
526,570
$ 4,112,239
- 28 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
DETAILED NOTES ON ALL FUNDS (continued)
3. CAPITAL ASSETS (continued)
Discretely oresented 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
111/08 Additions Deletions 12/31/08
$ 2,193,353 $ 2,193,353
404,367 $ 404,367 -0-
2,597,720 -0- 404,367 2,193,353
3,500,910 398,412 3,899,322
17,028,469 19,950 17,048,419
3,504,995 23,683 109,706 3,418,972
2,172,080 366,070 2,538,150
26,206,454 808,115 109,706 26,904,863
1,458,075 114,031 1,572,106
1,551,097 716,095 2,267,192
2,371,528 152,536 11,825 2, 512,239
1,321,985 87,389 1,409,374
6,702,685 $ 1,070,051 $ 11,825 7,760,911
19,143,952
$ 21,337,305
Bond Anticipation Notes (BANs) - Bond anticipation notes (BANs) are used as a temporary
means of financing capital expenditures in the capital projects fund. State law requires that BANs
issued for capital purposes be converted to long-term obligations within five years after the original
issue date. The notes or renewal thereof may not extend more than two years beyond the original
date of issue unless a portion is redeemed within two years and within each 12 month period
thereafter. Liabilities for BANs are generally accounted for in the capital projects fund. BANs are
expected to be paid from the proceeds of future bond issues after renewal of these notes. These
BANs bear interest at various rates from 1.9% 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
financing source is recorded in the capital projects fund.
These notes are summarized as follows:
Interest
Description Amount Rate
Various Purposes $ 3,230,000 3.95%
Various Purposes 558,000 3.75%
Various Purposes 1,065,000 2.28%
Various Purposes 205,000 1.90%
Fishers Island Sewer 121,300 3.35%
New London Wharf 1,200,000 3.70%
Mattituck Park 199,800 3.00%
Total $ 6~579.100
- 29 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
DETAILED NOTES ON ALL FUNDS (continued)
4. INDEBTEDNESS (continued)
SHORT TERM DEBT (continued)
A summary of changes in BANs for the year ended December 31, 2008 is as follows:
BalanCe Balance
1/1/08 Increases Reductions 12/31/08
Primary Government $ 4,384,000 $ 1,342,000 $ 546,700 $ 5,179,300
Component Units 1,860,000 199,800 660,000 1,399,800
~ $ 1.541~800 $ 1.206.700 $ 6.579.100
LONG-TERM DEBT
Summary of changes in long-term debt transactions for the year ended December 31, 2008 is as
follows:
Non. current
Balance Balance liabili§es due Non-current
1/1/08 increases Reductions 12/31/08 within one year liabilities
Primary Government:
General obligation bonds $ 22,365,000 $ 8,850,000
Net compensated absences 6,971,397 406,925
Estimated liability for land611 closure
and post-closure care costs 582,773
Other postemployment benefits payable ~- 4,798,081
Component Units:
General obligation bonds 2,655,000
Net compensated absences q)- 165,077
Claims and judgments 150,000
Other postemployment benefits payable -0- 108,973
$ 1,495,000 $ 29,720,000 $1,870,000 $ 27,850,000
7,378,322 466,125 6,912,197
66,329 516,444 19,820 496,624
1,123,202 3,674,879 -0- 3,674,879
200,000 2,455,000 205,000 2,250,000
165,077 ~- 165,077
56,897 93,103 45,438 47,665
13,874 95,099 -0- 95,099
General 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 2009 through 2030.
Future principal and interest payments to maturity for both the primary government and the
component units are as follows:
Year Endin.q Principal Interest
2009 $ 2,075,000 $ 1,242,518
2010 1,900,000 1,168,315
2011 1,925,000 1,096,262
2012 1,890,000 1,024,225
2013 1,775,000 955,164
2014-2018 8,965,000 3,746,531
2019-2023 6,220,000 2,197,651
2024-2028 5,375,000 985,125
2026-2030 2,0501000 871125
Totals $ 32.175.00~00 $ 12.502.916
- 30 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
DETAILED NOTES ON ALL FUNDS (continued)
4. INDEBTEDNESS(continued)
Other long-term liabilities for claims and judgments, compensated absences, other post
employment benefits, and the estimated liability for landfill closure and post closure costs are to
be paid by the fund that gave rise to the liability.
PRIORYEARDEFEASANCE 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, 2008, $1,340,000 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-sharing multiple-
employer retirement system. The System provides retirement benefits as well as death and
disability benefits.
Obligation of employers and employees to contribute and benefits to employees are govemed by
the New York State Retirement and Social Security Law (NYSRSSL). As set forth in the
NYSRSSL, the Comptroller of the State of New York (Comptroller) serves as sole trustee and
administrative head of the System. The Comptroller shall adopt 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.
Fundin.q Policy
The System is noncontributory except for employees who joined the New York State and Local
Employees' Retirement System after July 27, 1976 and who have less than ten years of
membership and less than ten years of credited service with a retirement system under the
provisions of article fourteen or f'~een 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
years were:
ERS PFRS
2008 $ 932,918 $ 905,458
2007 $ 980,628 $ 967,286
2006 $ 1,096,547 $ 741,445
The Town's contribution to the system was 100% of the contributions required each year.
- 31 -
Co
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2008
DETAILED NOTES ON ALL FUNDS (continued)
6. OTHER POST-EMPLOYMENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE)
In the government-wide financial statements, the cost of post employment healthcare benefits,
like the cost of pension benefits, generally should be associated with the period in which the
cost occurs, rather than in the future year when it will be paid. In adopting the requirements of
GASB 45, during the year ended December 31, 2008, the Town recognizes the cost of post
employment healthcare in the year when the employee services are received, reports the
accumulated liability from prior years and provide information useful in assessing potential
demands on the Town's future cash flows. Recognition of the liability accumulated from prior
years will be phased in over 30 years, commencing with the 2008 liability.
Plan Description:
The Town, as a single-employer defined benefit OPEB plan, per its contracts with employees, will
pay full premium costs for medical (currently provided by the Empire Plan) insurance coverage at
retirement. For non-police participants, the Town provides continuation of medical insurance to
employees who retire under the NYS Retirement System or who are at least 55 years old and have
at least 10 years of service with the Town. For police, the Town provides continuation of medical
insurance for employees who have at least 20 yearn of service with the Town. The retiree is eligible
for full Medicare reimbursement in the amount of $1,157 per year. Healthcare benefits for non-union
employees are similar to those of union employees. Surviving spouses of deceased employees
may continue coverage by paying the premium equivalent for participants~ They are also entitled to
Medicare part B premium reimbursement.
The number of participants as of January 1, 2008, the effective date of the OPEB valuation is as
follows. There have been no significant changes in the number or type of coverage since that date.
Active employees 205
Retirees 167
Spouses of retired employees 13
Total 385
Fundin,q Policy:
The Town currently pays for post employment health care benefits on a pay-as-you-go basis.
Annual Other Post-Employment Benefits Cost and Net Obli,qation:
For the year ended December 31, 2008, the Town's annual other post-employment benefit costs
(expenses) were $4,798,081. Considering the annual expense as well as the payment of current
health insurance premiums, which totaled $1,123,202 for retirees and their beneficiaries, the result
was an increase in the other post-employment benefits liability of $3,674,879 for the year ended
December 31, 2008. The Town's component units annual other post-employment benefits cost
(expenses) were $108,973. Considering the annual expense as well as the payment of current
health insurance premiums, which totaled $13,874 for retirees, the result was an increase in the
other pest-employment benefits liability of $95,099 for the year ended December 31, 2008.
Retired employees
Active employees
Unfunded actuarial accrued liability (UAAL)
Benefit Obliqations and Normal Cost
$ 19,563,574
26,242,684
$ 45.806.258
- 32 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2008
DETAILED NOTES ON ALL FUNDS (continued)
6. OTHER POST-EMPLOYMENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE)
(continued)
Annual Other Post-Employment Benefits Cost and Net Obliqation (continued)
The Town's annual other post-employment benefit cost is calculated based on the annual required
contribution (ARC) of the employer, an amount actuarially determined in accordance with the
parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an
ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial
liabilities (or funding excess) over a period not to exceed thirty years.
The Town's annual other post-employment benefits cost, the amount actually paid and changes to
the Town's net other post-employment benefits obligation to the Plan for the year ended December
31, 2008 are as follows:
Normal Cost $ 1,900,444
Amortization of unfunded actuarial
Liability (UAAL) over 30 years
Interest
2,691,021
206,616
Annual required contribution (ARC)
Interest on net other
post-employment benefits obligation
Adjustment to ARC
Annual OPEB cost (expense)
Less: contribution for year ended
December 31, 2008
Increase in net OPEB obligation
Net OPEB obligation- beginning of year
Net OPEB obligation- end of year
Pement of annual OPEB cost contributed
4,798,081
-0-
-0-
41798,081
11123,202
3,674,879
-0-
$ 3.674.879
30.56%
Funded Status and Fundin,q Pro.qress:
The percentage contributed for the current year was:
Annual Percentage
OPEB Cost Contributed
$ 4,798,081 30.56%
Net OPEB
Obligation
$ 3,674,879
The funded status of the plan as of January 1,2008 is as follows:
Actuarial Accreed Unfunded UAAL as a Percentage
Value of Liability AAL Funded Covered of
Assets (AAL) {UAAL) Ratio Payroll Payroll
Town $ -0- $ 45,806,258 $ 45,806,258 0% $ 13,830,871 331_19%
Component Unit ~- 1,068,859 1,068,859 0% 928,159 115.16%
Actuarial Methods and Assumptions:
The projection of future benefits for an ongoing plan involves estimates of the value of reported
amounts and assumptions about the probability of occurrence of future events far into the future.
Amounts determined regarding the funded status of a plan and the employer's annual required
contributions are subject to continual revision as actual results are compared with past expectations
and new estimates are made about the future.
- 33 -
D4
TOWN OF $OUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
DETAILED NOTES ON ALL FUNDS (continued)
OTHER POST-EMPLOYMENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE)
(continued)
Actuarial Methods and Assumptions (continued)
Projections of benefits for financial mpoding purposes are based on the substantive plan (the plan
as understood by the employer and the plan members) and include the types of benefits provided
at the time of each valuation and the historical pattern of sharing benefit costs between the
employer and plan members to that point. The actuarial methods and assumptions used include
techniques that are designed to reduce the effects of shod-term liability in actuarial accrued
liabilities, consistent with the long-term perspective of the calculations.
In the January 1, 2008 actuarial valuation, the liabilities were computed using the projected unit
credit cost method. The actuarial assumptions utilized a 4.5% discount rate. The valuation
assumes a 10-12% healthcare cost trend increase for the year, reduced by decrements down to
5% in fiscal year 2015. The remaining amortization period at December 31, 2008 was twenty
nine years.
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, 2008, the value of the accumulated vacation time and sick leave was
$7,378,322 for the pdmary 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 which is reported in the General 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 2008,
the attachment point for the aggregate policy was $2,910,475.
- 34 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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 Retentio'n 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,
2008 and 2007 are as follows:
General
Medical Liability
2008 2007 2008 2007
Unpaid Claims as of December 31.
prioryear $ 447.844 $ 161,976 $ 1,215 $ 906
Incurred Claims:
Provision for insured events
of the current fiscal year 3,126,515 2,524,953 20,904 6,857
Increase (decrease) in net provision for
insured events of prior fiscal years (53,276) 48 556 (127) 309
Total Incurred Claims and
Claim adjustments 3,521,083 2,735,485 21,992 8,072
Payments of:
Claims during the current year 3,353,593 2,287,641 20,904 6,857
Unpaid Claims as of December 31,
currentyear $ 167.490 $ 447~844 $ 1.0~ $ 1.215
During the year ended December 31, 2008 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
$ 1,911,381
223,403
622,241
230,827
$ 2,987,852
$ 479,653
12,776
12,776
505,205
$ 3.493.057
- 35 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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 certain maintenance and monitoring functions at the sites for thirty years after closure. The Town
ceased accepting waste at its Cutchogue landfill as of October 8, 1993. The Town entered into a
stipulation of settlement with the New York State Department of Environmental Conservation in
October of 1994 in which all charges of operational violations at the Cutchogue landfill were dropped.
Under the stipulation, the Town agreed to close and place a final cover over the landfill and to pay a
civil penalty of $650,000 over seven years. Construction of the final cover commenced in the summer
of 2001 and was completed in the fall of 2003.
In addition to 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, 2008 the Town has recorded a liability of $516,444 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 er 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, 2008 were $197,281. Future obligations over the primary
terms of the Town's leases as of December 31, 2008 are as follows:
2009 $ 188,297
2010 133,658
2011 107,881
2012 95,910
2013 and thereafter 443,199
Total $ 968.945
CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED
COMPONENTUNITS
The following represents condensed financial statements for the discretely presented component units as
of and for the year ended December 31, 2008:
Condensed Statement of Net Assets:
Due from Capital Assets Other
Current Pdrnary Net of Current Long-Term Net
Assets Government Depreciation Liabilities Liabilities Assets
Fishers Island Ferry District $ 488,947
Fishers Island Refuse and Garbage 1,084,975
Cutchogue-New Suffolk Park Distdct 159,308
Southold Park District 123,180
Odent-East Madon Park District 4,906
MaUJtuck Park District 329,809
Odent Mosquito Distdct 22,321
$ 74,472 $ 15,606,174 $ 1,749,140 $ 2,557,841 $ 11,862,612
50,464 2,899,178 174,331 3,860,286
18,302 121,163 18,302 280,471
39,760 748,856 42,882 868,914
4,491 432,985 16,044 426,338
160,232 1,510,197 414,673 1,585,565
8,836 18,752 22,234 27,675
$ 2,213,446 $ 356,557 $ 21,337,305 $ 2,437,606 $ 2,557,841 $ 18,911,861
- 36 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED
COMPONENT UNITS (continued)
Condensed Statement of Activities:
Program General Revenue Net Assets
Property
Expenses Revenue Net Expense Tax Other Change 111108 12131108
FisherslslandFem/DisMct $4,122,369 $2,497,801 $1.624,568 $ 590,000 $ 391.015 $(643,553) $12,506,165 $11,862.612
Fishem Island Refuse
and Garbage 734.319 41,726 692,593 563,800 170,858 42,065 3.818.221 3,860,286
Cutchogue-New Suffolk Park
District 119.424 '[19.424 145.000 4,684 30.260 250,211 280,471
Southold Park District 245,735 245,735 315.000 44,625 113,890 755.024 868,914
Orient-East Mado~ Park Dis~ct 33,636 33.636 34.780 88 1.232 425,106 426.338
Malfitock Park District 429,811 429,811 481,229 132.508 183.926 1,401,639 1,585.565
Orient Mosquito Distdct 91,371 91,371 86.900 817 (3.654} 31.329 27,675
$ 5,776,665 $ 2,539,527 $ 3,237,138 $ 2,216,7C9 $ 744,595 $ (275,834) $ 19,187,695 $ 18,911,861
F. 2% TRANSFER TAX
In November 1998, the voters of the Town approved a referendum for a 2% Transfer Tax, which became
effective on Apdl 1, 1999. The transfer tax receipts are recorded in the community preservation fund, 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, 2008, and for the four previous years, the Town has the following 2% transfer tax revenue
which was utilized for the conservation, environmental or historic preservation expenses of:
Revenues Expenditures
Yearend December31,2008 $ 5,251,258 $ 17,624,096
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
G. SUBSEQUENT EVENTS
The Town issued Public Improvement Serial Bonds in the amount of $5,283,000 which was dated March
15, 2009. This issue included $5,000,000 for Open Space purchases and various town improvements.
Interest rates vary from 3% to 4.375%, and the final payment is due March 2030.
In March 2009, the Town refunded $2,125,000 serial bonds. The issues refunded were 1998 $2,020,000
and 1999 $2,070,000 serial bonds. Interest rates vary from 2% to 5% which mature in March 2019.
H. NEW PRONOUNCEMENTS
The GASB has issued Statement No. 51, "Accounting and Financial Reporting for Intangible Assets." This
statement established accounting and financial reporting requirements for intangible assets including
easements, water rights, timber rights, patents, trademarks, and computer software. The requirements of
this statement become effective for the Town for the year ended December 31, 2010.
- 37 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
H. NEW PRONOUNCEMENTS (continued)
The GASB has issued Statement No. 53, "Accounting and Financial Reporting for Derivative Instruments."
This statement addressed the recognition, measurement, and disclosure of information regarding
derivative instruments entered into by state and local governments. The requirements of this statement
become effective for the Town for the year ended December 31, 2010.
The GASB has issued Statement No. 54, "Fund Balance Reporting and Governmental Fund Type
Definitions." This statement establishes criteria for classifying fund balances into specifically defined
classifications and clarifies definitions for governmental fund types. The requirements of this statement
become effective for the Town for the year ended December 31,2011.
The Town is currently evaluating the impact of the above pronouncements.
- 38 -
REQUIRED SUPPLEMENTARY
INFORMATION OTHER THAN
MANAGEMENT DISCUSSION AND
ANALYSIS
TOWN OF SOUTHOLD
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
Year ended December 31, 2008
REVENUES
Real property taxes
Other mai property tax items
Non-property tax items
Departmental income
Intergovernmental charges
Use of money and property
Licenses and permits
Fines and forfeitures
Sale of property and compensation for loss
Miscellaneous local sources
State aid
Federal aid
Total Revenues
EXPENDITURES
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Employee benefits
Debt Service - Principal and Interest
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
Other Financing Sources (Uses)
Transfers in
Transfers out
Total Other Financing Soumes (Uses)
Net Change in Fund Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
Variance
Original Final Positive
Budget Budget Actual (Negative)
17,391,288 $ 17,391,288 $ 17,391,288
93,000 93,000 94,113 $ 1,113
616,670 616,670 751,073 134,403
669,116 822,275 611,598 (210,677)
269,518 158,154 262,977 104,823
735,000 735,000 496,395 (238,605)
288,455 288,455 244,910 (43,545)
165,000 165,000 169,119 4,119
28,500 32,900 159,726 126,826
196,644 204,494 190,816 (13,678)
2,339,522 2,396,269 1,656,760 (739,509)
111,364 147,711 36,347
22,792,713 23,014,869 22,176,486 (838,383)
6,498,699 6,308,574 5,479,661 828,913
8,728,075 8,747,488 8,398,429 349,059
38,250 38,250 35,238 3,012
488,500 491,200 470,797 20,403
1,135,950 1,175,950 1,147,293 28,657
382,530 502,530 452,588 49,942
460,012 501,981 426,656 75,325
6,891,738 7,404,938 7,276,770 128,168
1,118,475 1,118,475 973,787 144,688
25,742,229 26,289,386 24,661,219 1,628,167
(2,949,516) (3,274,517) (2,484,733) 789,784
3,261,856 3,761,856 3,493,057 (268,799)
(2,521,381) (3,046,381) (2,729,790) 316,591
740,475 715,475 763,267 47,792
$ (2,209,041) $ (2,559,042) (1,721,466) $ 837,576
5,083,792
$ 3,362,326
See notes to the financial statements.
-39-
TOWN OF SOUTHOLD
HIGHWAY FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Year ended December 31, 2008
REVENUES
Original Final
Budget Budget Actual
Real property taxes $ 4,316,095 $ 4,316,095
Other real property tax items 12,700 12,700
Use of money and property 145,000 140,000
Licenses and permits 7,000 7,000
Sale of property and compensation
for loss 5,000
Miscellaneous local sources
State aid 231,332 326,820
Vadance
Positive
(Negative)
$ 4,316,095
11,777 $ (923)
61,374 (78,626)
13,190 6,190
7,416 2,416
13,703 13,703
326,826 -0-
Total Revenues 4,712,127 4,807,615 4,750,375 (57,240)
EXPENDITURES
Public safety 140
Transportation 3,749,227 3,844,715
Employee benefits 569,300 569,300
Debt Service - Principal and Interest 68,900 64,219
Total Expenditures
Excess of Revenues
Over Expenditures
Other Financing Uses Transfers out
Total Other Financing Uses
Net Change in Fund Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
135 5
3,543,617 301,096
498,813 70,487
40,228 23,991
4,387,427 4,478,374 4,082,793 395,581
324,700 329,241 667,582 338,341
(815,700)
(815,700) (820,241)
(491,000) $ (491,000)
(820,241)~ (3,000)
(823,241) (3,000)
(155,659) $ 335,341
1,079,221
$ 923,562
See notes to the financial statements.
-40-
OTHER SUPPLEMENTARY
INFORMATION
TOWN OF SOUTHOLD
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
December 31, 2008
ASSETS
Cash and investments
Accounts receivable
Due from other funds
State and federal receivables
Prepaids
Total Assets
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable
Due to ether funds
Deferred revenue
FUND BALANCE
Fund Balance - Reserved:
Prepaids
Fund Balance - Unreserved:
Designated - ensuing year's budget
Undesignated
General Fund
Part Town
$ 771,368
65,057
122,581
51,373
22,905
East-West Fire Southold Fishers Solid Waste
Special Protection Wastewater Island Sewer Management
Grant Distdct Distdct Distdct Distdct
$ 18,125
$ 109,271
74,366
$ 252,261
668
$ 35,179
1,871
3O6
$ 131,315
81,176
284,861
7,265
21,670
$1,033,284 $ 18,125 $ 183,637 $ 252,929 $ 37,356 $ 526,287
$ 27,753 $ 17,591 $ 12,655
534
251,267 156,201
Total Liabilities 279,020 18,125 168,856
5,700
9,081
22,905
292,000
439,359
$ 1,058
1,058
75,000
176,871
754,264 -0- 14,781 251,871
$1,033,284 $ 18,125 $ 183,637 $ 252,929
Total Fund Balance
$ 872
872
36,484
36,484
$ 37,356
Total Liabilities and Fund Balance
$ 133,940
418,042
551,982
21,670
(47,365)
(25,695)
$ 526,287
Totals
$1,299,394
148,104
482,782
76,763
44,575
$ 2,051,618
$ 192,811
534
826,568
1,019,913
44,575
372,700
614,430
1,031,705
$ 2,051,618
-41-
TOWN OF SOUTHOLD
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - NON-MAJOR GOVERNMENTAL FUNDS
Year ended December 31, 2008
REVENUES
Real property taxes
Other real property tax items
Non-property tax items
Departmental income
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
Health
Home and community
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 Distdct Distdct
$ 809,977 $ 541,463 $ 3,245
2,194 475 3
256,296
632,198 7,070
20,352 3,229 4,953
5,500
4,922
147,302
$ 144,838
1,878,741 144,838 545,167 15,271
97,231
506,202
7,370
767,517
232,938
1,611,258
267,483
(236,179)
(236,179)
144,838
550,584
Fishers
Island Sewer
Distdct
$ 2,422
27,495
973
30,890
10,425
16,443
1,960
304 419
144,838 550,584 2,264 27,287
(5,417) 13,007 3,603
(3,700)
-0~ -0- -0- (3,700)
(5,417) 13,007 (97)
20,198 238,864 36,581
$ -0~ $ 14,781 $ 251,871 $ 36,484
Solid Waste
Management
District
$ 1,506,945
1,321
1,721,098
13,429
162,260
207,733
889
68,971
3,682,646
159,767
2,393,817
237,244
416,600
232,613
3,440,041
242,605
(378,529)
(378,529)
(135,924)
110,229
Totals
$ 2,861,630
6,415
256,296
2,387,861
42,936
167,760
212,655
889
216,273
144,838
6,297,553
267,423
1,056,786
7,370
3,322,615
470,182
418,560
233,336
5,776,272
521,281
(618,408)
(618,408)
(97,127)
1,128,832
Net Change in Fund Balance
Fund Balances at Beginning of Year
Fund Balances at End of Year
31,304
722,960
$ 754,264
$ (25,695)
$ 1,031,705
DISCRETELY PRESENTED COMPONENT UNITS
TOWN OF SOUTHOLD
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF NET ASSETS
December 31, 2008
ASSETS
Current Assets:
Cash and investments
Accounts receivable
Due from pdmary government
Due from fiduciary funds
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
Fishers
Island Ferry
District
Fishers Island Cutchogue- Southold Orient-East Mattituck Odent
Garbage and New Suffolk Park Madon Park Park Mosquito
Refuse District Park District District Distdct District District
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
311,048 $ 1,059,975 $ 159,308 $ 123,180
72,532
74,472 50,464 18,302 39,760
64,670
16,822
23,875 25,000
Totals
4,906
4,491
329,809
160,232
$ 22,321 $ 2,010,547
72,532
8,836 356,557
64,670
16,822
48,875
563,419 1,135,439 177,610 162,940 9,397. 490,041 31,157 2,570,003
41,717 517,263 101,198 588,849
15,564,457 2,381,915 19,965 160,007
432,985
511,340
998,857
15,606,174 2,899,178 121,163 748,856 432,985 1,510,197
Total Assets 16,169,593 4,034,617 298,773 911,796 442,382 2,000,238
2,193,352
18,752 19,143,953
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 judgments payable
Total Current Liabilities
Non-Current Liabilities:
General obligation bonds payable
Compensated absences payable
Claims and judgments payable
Other post-employment benefits payable
Total Non-Current Liabilities
18,752 21,337,305
49,909 23,907,308
144,909 48,898 3,122 11,553 25,071 263 233,816
45,151 1,840 46,991
1,200,000 199,800 1,399,800
163,642 125,433 18,302 39,760 4,491 132,962 21,971 506,561
150,000
45,438
55,000
205,000
45,438
1,749,140 174,331 18,302 42,882 16,044 414,673 22,234 2,437,606
2,250,000
165,077
47,665
95,099
2,250,000
165,077
47,665
95,099
2,557,841 -0- -0- -0- -0- -0-
-0- 2,557,841
Total Liabilities 4,306,981 174,331 18,302 42,882 16,044 414,673 22,234 4,995,447
NET ASSETS
Investment in capital assets, net of related debt
Restricted:
Unrestricted
Total Net Assets
12,006,174 3,818,221
(143,562) 42,065
$ 11,862,612 $ 3,860,286
280,471
755,024
113,890
426,338
1,455,197 18,034,616
130,368 27,675 877,245
$ 280,471 $ 868,914 $ 426,338 $ 1,585,565
$ 27,675 $ 18,911,861
-43-
TOWN OF SOUTNOLD
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF ACTIVITIES
Year ended December 31, 2008
REVENUES
Program revenues
Real property taxes
Other real property tax items
Non-property tax items
Interest earnings
State Aid
Federal Aid
Other
Fishers
Island Ferry
Distdct
$ 2,497,801
590,000
518
16,036
18,593
305,493
50,375
Fishers Island Cutchogue- Southold Orient-East Mattituck Orient
Garbage and New Suffolk Park Marion Park Park Mosquito
Refuse District Park Distdct District District District District
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Totals
$ 41,726 $ 2,539,527
563,800 $ 145,000 $ 315,000 $ 34,780 $ 481,229 $ 86,900 2,216,709
495 127 31 422 1,593
6,762 6,762
22,478 4,557 44,625 57 11,470 817 100,040
141,123 159,716
305,493
120,616 170,991
Total Revenues 3,478,816 776,384 149,684 359,625 34,868 613,737 87,717 5,500,831
EXPENSES
General government support
Public health
Transportation
Culture and recreation
Home and community services
Interest on debt
182,040
3,794,749
12,102
133,478
4,122,369
(643,553)
12,506,165
$11,862,612
Changes in Net Assets
Total Expenses
Net Assets at Beginning of Year
Net Assets at End of Year
182,040
91,371 91,371
3,794,749
119,424 245,735 33,636 425,498 836,395
727,308 727,308
7,011 4,313 144,802
734,319 119,424 245,735 33,636 429,811 91,371 5,776,665
42,065 30,260 113,890 1,232 183,926 (3,654) (275,834)
3,818,221 250,211 755,024 425,106 1,401,639 31,329 19,187,695
$ 3,860,286 $ 280,471 $ 868,914 $ 426,338 $ 1,585,565 $ 27,675 $18,911,861
-44-
OTHER REPORTS
TOWN OF SOUTHOLD
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year ended December 31,2008
Federal GrantodPass-through Grantod
Program or Cluster Title
Fedeml
CFDA
Number
U. S. Department of Housing and Urban Development
Pass-through program from:
Suffolk County, New York
Community Development Block Grant Program
14.218
U.S. Department of Health and Human Services
Pass-through program from:
Suffolk County, New York
Special Programs for the Aging - Title III,
Part C - Nutrition
Nutrition Services Incentive Program
93.045
93.053
U.S. Department of Justice
Pass-through program from:
New York State
Bulletproof Vest Partnership
16.607
U.S. Department of Transportation
Pass-through program from:
New York State
Highway Planning and Construction
20.205
U.S. Department of Commerce
Direct program from:
National Oceanic and Atmospheric Administration
Coastal Zone Management Administration Award
11.419
Total expenditures of federal awards
Federal
Expenditures
144,838
85,743
25,621
347
36,000
1,464,735
1,757.284
See accompanying note to schedule of expenditures of federal awards
-45-
TOWN OF SOUTHOLD
NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
December 31, 2008
Note A - Basis of Presentation
The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Town of
Southold and is presented on the modified accrual basis of accounting. The information in this schedule is
presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and
Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts
presented in, or used in the preparation of, the basic financial statements.
C~flF~ ~J'~l' lC ACCOUNTANTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS
Honorable Supervisor and Town Board
Town of Southold
Southold, New York
We have audited the financial statements of the governmental activities, the discretely presented component unit,
each major fund, and the aggregate remaining fund information of Town of Southold, New York, as of and for the
year ended December 31, 2008, which collectively comprise the Town of Southold, New York's basic financial
statements and have issued our report thereon dated December 16, 2009. We conducted our audit in accordance
with auditing standards generally accepted in the United States of America and the standards applicable to
financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States.
The financial statements of the Town of Southold's discretely presented component units with the exception of
one, the Fishers Island Ferry District, was 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 not audited
represent 32.4%, 37.3% and 36.8%, respectively, of the assets, net assets and revenues of the aggregate
discretely presented component units. The financial statements of the Fishers Island FerTy 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, are based solely on the reports of the other auditors. The financial
statements of Fishers Island Ferry District were not audited in accordance with Government Auditing Standards.
Internal Control Over Financial Reportincl
In planning and performing our audit, we considered Town of Southold, New York's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the
financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town of
Southold, New York's internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the Town of Southold, New York's internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow management or employees, in
the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A
significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Town
of Southold, New York's ability to initiate, authorize, record, process, or report financial data reliably in accordance
with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement
of the Town of Southold, New York's financial statements that is more than inconsequential will not be prevented
or detected by the Town of Southold, New York's internal control.
A matedal weakness is a significant deficiency, or combination of significant deficiencies, that results in more than
a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by
the Town of Southold, New York's internal control.
PERSONAL SERVICE. TRUSTED ADVICE.
ALBRECHT, VIGGIANO, ZURECK & COMPANY, RC
245 PARK AVENUE, 24TH FLOOR 25 SUFFOLK COURT
NEWYORK, NY 10167 HAUPPAUGE, NY 11788 3715
T: 212 792 4075 T:631.434.9500 F:631.4349518
www.avz.com
Our consideration of the internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in the internal control that might be
significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over
financial reporting that we consider to be matedal weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town of Southold, New York's financial statements
are free of matedal misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those provisions
was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance or other matters that are required to be reported under Government
Auditing Standards.
We noted certain other matters that we reported to management of the Town of Southold in a separate letter
dated December 16, 2009.
This report is intended solely for the information and use of management, Town Board, federal awarding agencies
and pass-through entities and is not intended to be and should not be used by anyone other than these specified
parties.
Hauppauge, New York
December 16, 2009
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C~E~F~-D PUBLIC AC-COt~TANTS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO
EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER
COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Honorable Supervisor and Town Board
Town of Southold
Southold, New York
Compliance
We have audited the compliance of Town of Southold, New York, with the types of compliance requirements
described in the U.S. Office of Management and Budget (OMB) Circular A~133 Compliance Supplement that are
applicable to its major federal program for the year ended December 31, 2008. Town of Southold, New York's
major federal program is identified in the summary of auditor's results section of the accompanying schedule of
findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants
applicable to its major federal program is the responsibility of Town of Southold, New York's management. Our
responsibility is to express an opinion on Town of Southold, New York's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States; and OMB Cimular A-133, Audits of States, Local
Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and
perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance
requirements referred to above that could have a direct and material effect on a major federal program occur~d.
An audit includes examining, on a test basis, evidence about Town of Southold, New York's compliance with those
requirements and performing such other procedures as we considered necessary under the circumstances. We
believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination
of Town of Southold, New York's compliance with those requirements.
In our opinion, the Town of Southold, New York, complied, in all material respects, with the requirements referred
to above that are applicable to each of its major federal programs for the year ended December 31, 2008.
Internal Controls Over Compliance
The management of Town of Southold, New York, is responsible for establishing and maintaining effective internal
control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal
programs. In planning and performing our audit, we considered the Town of Southold, New York's internal control
over compliance with the requirements that could have a direct and material effect on a major federal program in
order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for
the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do
not express an opinion on the effectiveness of the Town of Southold, New York's internal control over compliance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph
of this section and would not necessarily identify all deficiencies in the entity's internal control that might be
significant deficiencies or material weaknesses as defined above. However, as discussed above, we identified
certain deficiencies in internal control over compliance that we consider to be significant deficiencies.
PERSONAL SERVICE. TRUSTED ADVICE.
ALBRECHT, VIGGIANO, ZURECK & COMPANY, RC.
245 PARK AVENUE, 24TH FLOOR 25 SUFFOLK COURT
NEWYORK, NY 10167 HAUPPAUGE, NY11788-37~5
T:212.7924075 T:631 434 9500 F:631 4349518
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A control deficiency in an entity's internal control over compliance exists when the design or operation of a control
does not allow management or employees, in the normal course of performing their assigned functions, to prevent
or detect noncompliance with a type of compliance requirement of a federal program on a timely basis. A
significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the
entity's ability to administer a federal program such that there is more than a remote likelihood that noncompliance
with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented
or detected by the entity's internal control. We consider the deficiency described in the accompanying schedule of
findings and questioned costs to be a significant deficiency in internal control over financial reporting as item 2008-
01 to be a significant deficiency.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than
a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will
not be prevented or detected by the entity's internal control. Of the significant deficiencies in internal control over
compliance described in the accompanying schedule of findings and questioned costs, we consider no items to be
material weaknesses.
Town of Southold, New York's response to the findings identified in our audit is described in the accompanying
schedule of findings and questioned costs. We did not audit Town of Southold, New York's response and,
accordingly, we express no opinion on it.
This report is intended solely for the information and use of management, Town Board, others within the Town,
federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone
other than these specified parties.
Hauppauge, New York
December 16, 2009
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TOWN OF SOUTHOLD
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year ended December 31, 2008
SUMMARY OF AUDIT RESULTS
1. The auditors' report expresses an unqualified opinion on the basic financial statements of the Town of
Southold.
2. No control deficiencies in internal control relating to the audit of the financial statements are reported
in the 'REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS".
3. No instances of noncompliance material to the financial statements of the Town of Southold were
disclosed during the audit.
4. One deficiency in internal control relating to the audit of the major federal award programs are
reported in the ~REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH
MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH
OMB CIRCULAR A-133".
5. The auditors' report on compliance for the major federal awards programs for the Town of Southold
expresses an unqualified opinion on all major federal programs.
6. Audit findings that are required to be reported in accordance with Section 510(a) of OMB Circular A-
133 are reported in this Schedule.
7. The program tested as major programs was:
CFDA Number Name of Federal Prof:lram or Cluster
11.419 Coastal Zone Management Administration Award
8. The threshold for distinguishing Types A and B programs was $300,000.
9. The Town of Southold was not determined to be a Iow-risk auditee.
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TOWN OF SOUTHOLD
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year ended December 31, 2008
FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAMS AUDIT
FINDINGS
PROGRAMS
DEPARTMENT OF COMMERCE
NATIONAL OCEANIC ADMINISTRATION AWARD
COASTAL ZONE MANAGEMENT ADMINISTRATION AWARD - CFDA No. 11.419
2008-01
Criteria
Appraisals performed should be examined by a review appraiser and the review appraiser should prepare a
signed statement that explains the basis for adjusting comparable sales to reach the review appraiser's
determination of the fair market value.
Condition
It was noted that a review appraisal was not performed.
Effect
The value of the appraised property can be improperly valued.
Recommendation
The Town should obtain a review appraisal for appraisals performed to determine if the amount appraised is
reasonable and accurate.
Questioned Cost
Unknown.
Mana,qement's Response
The Town has put a system in place to monitor the appraisals for land purchased with federat funds.
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