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HomeMy WebLinkAbout2009Fishers Island Fire District ANNUAL FINANCIAL REPORT UPDATE DOCUMENT December 31, 2009 RECEIVED ~IAY 1 7 2010 ~,eulhold Town Clerk (~COMPANY TABLE OF CONTENTS INDEPENDENT AUDITORS' REPORT ...................................... ANNUAL FINANCIAL REPORT UPDATE DOCUMENT: FINANCIAL SECTION .............................................. SUPPLEMENTAL SECTION .......................................... NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT ........ PAGE A 1 18 24 OFCOMPAIqY COlVlPANY A PROFESSIONAL CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS www,$heehanc@a.eom INDEPENDENT AUDITORS' REPORT To the Board of Fire Commissioners Fishers Island Fire District Fishers Island, New York We have audited the accompanying Annual Financial Report Update Document (Financial Section) of Fishers Island Fire District, as of and for the year ended December 31, 2009, as listed in the table of contents. This report is the responsibility of Fishers Island Fire District's management. Our responsibility is to express an opinion on this report based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Annual Financial Report Update Document is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the mounts and disclosures in the Annual Financial Report Update Document. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation. We believe that our audit provides a reasonable basis for our opinions. As described more fully in Note 1, the Fishers Island Fire District prepares its Annual Financial Report Update Document using accounting practices prescribed or permitted by the New York State Office of the State Comptroller, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. The effects on the Annual Financial Report Update Document of the variances between these regulatory accounting practices and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. In our opinion, the Annual Financial Report Update Document referred to above presents fairly, in all material respects, the assets, liabilities and fund balances of Fishers Island Fire District, as -of December 31, 2009 and the revenues it received and expenditures made for the year then ended in conformity with the basis of accounting described in Note 1. An Independent Member of the BDO Seidman Alliance To the Board of Fire Commissioners Fishers Island Fire District Our audit was conducted for the purpose of forming an opinion on the Annual Financial Report Update Document (Financial Section) taken as a whole. The Supplemental Section listed on page two of the Annual Financial Report Update Document is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information, except for the Fire District Questionnaire, has not been subjected to the auditing procedures applied in the audit of the Annual Financial Report Update Document (Financial Section) and, accordingly, we express no opinion on it. In accordance with Government Auditing Standards, we have also issued our report dated March 25, 2010, on our consideration of the Fishers Island Fire District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. March 25, 2010 C~COMPANY All Numbers in This Report Have Been Rounded To The Nearest Dollar ANNUAL FINANCIAL REPORT UPDATE DOCUMENT For The FIRE DISTRICT of Fishers Island County of Suffolk For the Fiscal Year Ended 12/31/2009 AUTHORIZATION ARTICLE 3, SECTION 30 of the GENERAL MUNICPAL LAW: 1. ***Every Municipal Corporation *** shall annually make a report of its financial condition to the Comptroller. Such report shall be made by the Chief Fiscal Officer of such Municipal Corporation *** 5. All reports shall be certified by the officer making the same and shall be filed with the Comptroller *** It shall be the duty of the incumbent officer at the time such reports are required to be filed with the Comptroller to file such report State of NEW YORK Office of The State Comptroller Division of Local Government and School Accountability Albany, New York 12236 Page FIRE DISTRICT OF Fishers Island *** FINANCIAL SECTION *** Financial Information for the following funds and account groups are included in the Annual Financial Report filed by your government for the fiscal year ended 2008 and has been used by the OSC as the basis for preparing this update document for the fiscal year ended 2009: (A)GENERAL (~ Resewe ~A)AGENCY All amounts included in this update document for 2008 represent data filed by your government with OSC as reviewed and adjusted where necessary. *** ARRA SECTION *** The American Recovery and Reinvestment Act (ARRA) section of your Annual Financial Report is designed to report revenues and expenditures of federal stimulus money for the current fiscal year ended. *** SUPPLEMENTAL SECTION *** The Supplemental Section includes the following sections: 1) Statement of Indebtedness 2) Schedule of Time Deposits and Investments 3) Bank Reconciliation 4) Local Government Questionnaire 5) Schedule of Employee and Retiree Benefits 6) Schedule of Energy Costs and Consumption All numbers in this report will be rounded to the nearest dollar, Page 2 Fishers island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2009 (A) GENERAL Balance Sheet Assets Cash 487,497' A200 43*4,643 Cash In Time Deposits A201 !! Page 3 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2009 (A) GENERAL Balance Sheet Fund Equi[7 Capita~ Reserve A878 Unreser~,ed Fund Balance Unappropriated 487,497 A911 434,643 Page 4 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2009 (A) GENERAL Results of Operation Revenues Real Property Taxes 356,719 A1001 356,407 Interes[ And Earnings 2,130 A2401 1,277 Rental of Real Property 150 A2410 Sales of Equipment A2665 2,500 Refunds of Prior Year's Expenditures 3,526 A2701 Page 5 OSC Municipality Code 471179004000 Fishers island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2009 (A) GENERAL Results of Operation Expenditures Payment of Mta Payroll Tax,contr Expend A19804 48 Fire, Pets Serv 16,966 A34101 20,092 Fire, Equip & Cap Outlay 12,493 A34102 6,947 Fire, Contr Expend 176,608 A34104 246,878 Locat Pension Fund, Empl Bnfts 84,116 A90258 85,606 Social Security, Employer Cont 1,491 A90308 1,537 Worker's Compensation, Empl Bnfts 4,996 A90408 6,217 Life Insurance, Empl Bnffs 18,462 A90458 19,213 Transfers, Other Funds 41,000 A99019 26,500 Page 6 OSC Municipality Code 471179004000 Fishers island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2009 (A) GENERAL Changes in Fund Equity ANALYSIS OF CHANGES IN FUND EQUITY Fund Equity. Beginning of Year Restated Fund Equity - Beg of Year ADD ~ REVENUES AND OTHER SOURCES DEDUCT ~ EXPENDITURES AND OTHER USES Fund Equity-End of Year 481,103 A8021 487,497 481,103 A8022 487,497 362.525 360.184 356.131 413,038 487,497 A8029 434,643 Page 7 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annuat Update Document For the Fiscal Year Ending 2009 (A) GENERAL Budget Summary Estimated Revenues Est Rev- Real Property Taxes 356,400 A1049N 356,400 Est Rev - Use of Money And Property 3,300 A2499N 3,300 Estimated ~ Interfund Transfer 0 A5031N Page 8 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2009 (A) GENERAL Budget Summary Appropriations App - Public Safety 220,900 A3999N 221,400 App - Employee Benefits 112,300 A9199N 112,300 App - Interfund Transfer 26,500 A9999N 26,000 Page 9 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2009 (R) Reserve Balance Sheet Assets Cash, Special Reserves 471,863 R230 499,712 Page 10 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2009 (R) Resen/e Balance Sheet Fund EClUi~y Capital Reserve 471,863 R878 499,712 Page 11 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2009 (R) Reserve Results of Operation Revenues Interest & Earnings .1,861 P,.240.1 '1,349 ~nter~und Transfers ,41,000 R5031 26,500 · Page 12 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2009 Results of Operation Page 13 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2009 (R) Reserve Changes in Fund Equity ANALYSIS OF CHANGES IN FUND EQUITY Fund Equity - Beginning of Year Prior Period Adj - Dec To Fund Equity Restated Fund Equity - Beg of Year ADD - REVENUES AND OTHER SOURCES Fund Equity - End of Year 429,003 R8021 471,863 R8015 429,003 R0022 471,863 42,861 27,849 471,863 R8029 499,712 Page 14 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2009 (TA) AGENCY Balance Sheet Assets Service Award Program Assets 854,994 TA461 908,918 ~, , Page 15 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2009 (TA) AGENCY Balance Sheet Liabilities Service Awards 854,994 TA13 908,918 Page 16 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Financial Comments For the Fiscal Year Ending 2009 Page 17 Fishers Island FIRE DISTRICT Statement of Indebtedness For the Fiscal Year Ending 2009 Page 18 Fishers Island FIRE DISTRICT Schedule of Time Deposits and Investments For the Fiscal Year Ending 2009 CASH: On Hand Demand Deposits Time Deposits Total COLLATERAL: - FDIC Insurance Collateralized with securities held in possession of municipality or its agent Total EDP Code Amount 9Z2001 $0.00 9Z2011 $939,350.47 9Z2021 $0.00 $939,35O.47 9Z2014 $250,000.00 9Z2014A $723,818.81 $973,818.81 INVESTMENTS: - Securities (450) Book Value (cost) Market Value at Balance Sheet Date 9Z4501 9Z4502 Collateralized with securities held in possession of municipality or its agent 9Z4504A - Repurchase Agreements (451) Book Value (cost) Market Value at Balance Sheet Date Collateralized with securities held in possession of municipality or its agent 9Z4511 9Z4512 9Z4514A Page 19 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Bank Reconciliation For the Fiscal Year Ending 2009 Include All Checking, Savings and C.D Accounts Bank Account Number *****-5498 ..... -5654 · .....-5662 ..... -5704 Add: Bank Deposit Balance In Transit $5,965 $74,822 $424,890 $433,673 Total Adjusted Bank Balance Betty Cash Adjustments Total Cash Total Cash Balance All Funds * Must be equal Less: Outstanding Checks $0 $4,995 $0 $0 $0 $0 $0 $0 9ZCASH * 9ZCASHB * A~usted Bank Balance $971 $74,822 $424,890 $433,673 $934,356 $.00 $.00 $934,356 $934,356 Page 20 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Fire District Questionnaire For the Fiscal Year Ending 2009 1) Has your district adopted a written procurement prolicy and is it complied with? 2) Has your district contracted to have an independent audit of its financial statements? If not, has the Board of Fire Commissioners performed an internal audit of the Treasurer's records and reports? 3) Does your district have a written travel policy and is it complied with? 4) Are monthly bank reconciliations performed? 5) What is your district's statutory spending limitation margin (amount) for the next fiscal 6) Does your district have a Length of Service Award Program (LOSAP) for volunteer firefighters? If so, how are the LOSAP funds invested? Marketable Securities Annuities Life Insurance Other (describe) Demand deposits Response Y Y Y Y $681,153 N Y Y Y · 7) Has your Fire District adopted an investment policy as required by General Municipal Law, Section 39? Page 21 Fishers Island FIRE DISTRICT Employee and Retiree Benefits For the Fiscal Year Ending 2009 Total Full Time Employees: Total Part Time Employees: 3 Account Description Total # of Full # of Part # of Retirees Code Expenditures Time Time (All Funds) Employees Employees 9015~ Police and Fire Retirement I i --9~25~ £ocal Pensi'on Fund ,I $85,606.00 ~- 90301 Social Secudty $1,537.00 9040~ Worker's Compensation $6,217.00 3 insurance 90451 Lite Insurance $19,213.00 90501 Unemployment insurance 9055~ Disability insurance [ 9060~ Hospital and Medical (Dental) insurance ! 9070~ Union Welfare Benefits i I 9085~ Supplemental Benefit Payment tc Disabled Fire Fightem i 91§9( Other Empl°yee Benefits I Tota,I $1t2,573.0( ~Computed Total From Financial I $t12,fi73.0[ ~Section (comparative purposes only) Page 22 dSC Municipality 471179004000 Fishers Island FIRE DISTRICT Energy Costs and Consumption For the Fiscal Year Ending 2009 Energy Type Total Total Volume Units Of Alternative Expenditures Measure Units Of Measure ~a.so[ine [ $37tj~ ~Diesel Fuel ]. $850j~ 2,534[ gallons I cubic feet Electricity I $6'302 oai I 25,179~ kilowatts Page 23 OSC Municipality 471179004000 FIRE DISTRICT DEMOGRAPHICS _Postal or Mailing Address: IPO Box 222 IFishers island Street Address or PO Box City 1(631) 788-7019 Fire District Telephone Number ~firedistdct@fishersisla nd.n [n/e Official Email Address Website Physical Address: (if Different From Posta~Address) I (631) 788-7094 Fire District Fax Number Street Address City N yr~.~--- [06390 State Zip I I State Zip BOARD DEMOGRAPHICS CHIEF FISCAL OFFICER IKristen M, Paterson ~Treasurer Name Title tPO Box 222 iFishers Island Street Address or PO Box City State 1(631) 788-7019 Telephone Number ~fi flredistrict@fishe rsisland, n Email Address J(631) 788-7094 Fax Number I 00/00/0000 Term End Date 06390 Zip ~James Wall Name tPO Box 222 Street Address or PO Box 1(631)780-7019 Telephone Number ~fifiredistdct@fishersisland,n Email Address CHAIRMAN OF THE BOARD IChairman of the Board Title IFishers Island City 1(631)788-7094 Fax Number J 00/00/0000 Term End Date INY 106390 State Zip I, IKristen Peterson hereby certify that I am the Chief Fiscal Officer of the iFishem Island Fire District , and that the information provided in the annual financial report of the IFishem island Fire District , for the fiscal year ended 112/3112009 , is true and correct to the best of my knowledge and belief By entering the personal identification number assigned by the Office of the State Comptroller to me as the Chief Fiscal Officer of the IFishem island Fire Distdct , and adopted by me as my signature for use in conjunction with the filing of the rFishars Island Fire District 's annual financial report, I am evidencing my express intent to authenticate my certification of the rFishers Island Fire District 's annual financial report report for the fisoat year ended112/31/2009 and flied by means of electronic data transmission. I t I Name of Repot[ Preparer Personal Identification Number Date if different than Chief Fiscal Officer of Chief Fiscal Officer Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Summary of significant accounting oolicies: The Annual Financial Report Update Document of the Fishers Island Fire District (the District), as of and for the year ended December 31, 2009 has been prepared in conformity with the cash regulatory basis of accounting as prescribed by the State Comptroller's Office, which is a comprehensive basis of accounting other than United States generally accepted accounting principles. Financial reporting entiW,: The District is a governmental entity that provides fire protection to the local community. The District receives most of its funding from property taxes. The District is governed by laws of the State of New York. The Board of Fire Commissioners is the legislative body responsible for the overall operation of the District. All activities and functions performed for the District are its direct responsibility. The Treasurer serves as Chief Fiscal Officer of the District. Basis of presentation: The Annual Financial Report Update Document provides information about the District's funds, including fiduciary funds. The accounts of the District are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. The following fund types are used: Governmental: General Fund The General Fund is the principal operating fund of the District and is used to account for all financial resources except those required to be accounted for in another fund. Debt service is also accounted for in the General Fund. Equipment Reserve Fund The Equipment Reserve Fund is used to account for and report financial resources to be used for the acquisition of equipment needed by the District. Capital Reserve Fund The Capital Reserve Fund is used to account for and report financial resources to be used for the acquisition, construction, or renovation of major capital facilities. -24- Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Summary of significant accounting policies (continued): Fiduciary Fund Fiduciary funds are used to account for assets held by the District in a trustee or custodial capacity. The District utilizes the following fund: Agency Fund The Agency Fund is used to account for and report assets held by the District in the capacity of trustee, custodian or agent for individuals. Agency funds are custodial in nature and do not involve measurement of results of operations. Basis of accounting: The accompanying Annual Financial Report Update Document has been prepared on the cash regulatory basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. Under that basis, the only asset recognized is cash and no liabilities are recognized. All transactions are recognized as either cash receipts or disbursements. Non-cash transactions are not recognized in the financial statements. Cash and cash equivalents: Cash and cash equivalents include demand deposits and temporary investments with original maturities of three months or less from date of acquisition. Interfund transfers: The operations of the District give rise to certain transactions between funds, including transfers of expenditures and revenues to provide services and construct assets. This is either by budget, Board resolution, permissive referendum or mandatory referendum. Fund balance - reserves and designations: Portions of fund balance are reserved or designated to either satisfy legal restrictions or to plan for future expenditures. The following is a description of the reserve utilized by the District: Reserve for equipment equipment. used for the acquisition of fire apparatus and Reserve for capital - used for the acquisition, construction, or renovation of major capital facilities. -25- COMPANY Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Summary of significant accounting policies (continued): Real property taxes: All real property assessments are made by the Town of Southold. Real property tax payments are due in two equal installments; the first half payable on December 1 (lien and levy date) preceding the year for which the same is levied and the second half payable May 10, with the first half payable without penalty to January 10 and the second half payable without penalty to May 31. After May 31, all taxes must be paid to the Suffolk County Treasurer with a 5% penalty charge and interest at the rate of 1% per month from February 1. The Town of Southold Receiver of Taxes collects all real estate taxes for the District. The Town of Southold Receiver of Taxes distributes the tax collections to the District. All payments made to the District are made in the year for which the tax has been levied. The Town of Southold Receiver of Taxes turns over uncollected items to the Suffolk County Treasurer who continues the collection of these items. Responsibility for the collection of unpaid taxes rests with Suffolk County. Budgetary data: The District prepares an operating budget for the General Fund each year. The budget is adopted by the Board of Fire Commissioners as its final budget for the coming year. The budget is not subject to referendum. All budget appropriations lapse at the end of each year. Use of estimates: The preparation of the Annual Financial Report Update Document in conformity with the cash regulatory basis of accounting requires management to make significant estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Deposits with financial institutions and investments: The District's investment activities are governed by state statutes. Resources must be deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks or trust companies located within the state. Collateral is required for demand and time deposits and certificates of deposit not covered by FDIC insurance. -26- Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Deposits with financial institutions and investments (continued): The District adopted a formal investment policy allowing investments in special time deposit accounts, certificates of deposit, obligations of the United States of America, obligations guaranteed by agencies of the United States of America where the payment of principaI and interest are guaranteed by the United States of America, obligations of the State of New York and obligations issued by a municipality, school district, or fire district other than the District. Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. Governmental Accounting Standards Board (GASB) directs that deposits be disclosed as exposed to custodial credit risk if they are not covered by depository insurance and the deposits are either: 1. Insured by FDIC insurance. 2. Collateraiized by securities held by the pledging financial institution's trust department or agent but not in the District's name. 3. Collateralized by securities held by the pledging financial institution but not in the District's name. 4. Uncollateralized. The District's deposits held by the banks are categorized, based on the above criteria, as follows: Category Amount 1 $250,000 2 3 723,819 4 Total $973.819 Length of Service Awards Program (LOSAP): The information contained in this note is based on information for the LOSAP for the plan year ending December 31, 2009, which is the most recent plan year for which complete information is available. The funding detail is for the period January 1, 2008 through December 31, 2008. -27- ~COMPA~Y Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Length of Service Awards Program (LOSAP) (continued): The District established a defined benefit LOSAP for the active volunteer firefighters of the District. The program took effect on January 1, 1993. The program was established pursuant to Article 11-A of the General Municipal Law. The program provides municipally-funded, pension-like benefits to facilitate the recruitment and retention of active volunteer firefighters. The District is the sponsor of the program. Program description: Participation~ vesting and service credit: Active volunteer firefighters who have reached the age of 18 and who have completed one year of service are eligible to participate in the program. Participants acquire a nonforfeitable right to a service award after being credited with 5 years of firefighting service or upon attaining the program's entitlement age and completing one year of plan participation. The program's entitlement age is 65. In general, an active volunteer firefighter is credited with a year of firefighting service for each calendar year after the establishment of the program in which he or she accumulates 50 points. Points are granted for the performance of certain activities in accordance with a system established by the sponsor on the basis of a statutory list of activities and point values. A participant may also receive credit for 5 years of firefighting service rendered prior to the establishment of the program. Benefits: A participant's benefit under the program is the actuarial equivalent of a monthly payment for life, with 10 years certain, equal to $20 multiplied by the person's total number of years of firefighting service. The number of years of firefighting service used to compute the benefit cannot exceed 30. Benefits are not payable until the first day of the month coincident with or following the attainment of age 65 and completion of one year of plan participation. Except in the case of disability or death, benefits are payable when a participant reaches entitlement age. The program provides statutorily mandated death and disability benefits. Fiduciary investment and control: Service credit is determined by the governing board of the sponsor, based on the information certified to the governing board by the fire company. The fire company must maintain all required records on forms prescribed by the governing board. The governing board of the sponsor has retained and designated Hometown Insurance Agency (Hometown)/RSA Consultants to assist in the administration of the program. The designated program administrator's functions include providing basic annual administration services as follows: -28- Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT o Length of Service Awards Program (LOSAP) (continued): Program description (continued): Fiduciary investment and control (continued): a) providing participants enrollment forms b) providing an annual reminder letter with a review list for the current anniversary date c) preparation of Explanation of Plan Benefits d) calculation of Schedule of Benefits and cost annually e) participants' benefit calculation at time of severance or retirement f) Auxiliary Fund valuation and suggested deposit g) summary of required annual contribution h) annual actuarial review and recommended benefit enhancements Disbursements of program assets for the payment of benefits or administrative expenses must be approved. The following is an explanation of the process for approving disbursements: Payment of benefits: Entitlement benefits - When a participant becomes eligible to receive entitlement benefits, the Plan Sponsor prepares and submits an authorization letter to Hometown indicating the participant's name, address, age, social security number, term of service and other pertinent information. Hometown will then facilitate the disbursement of entitlement benefits. Death benefits - Upon notification from the Plan Sponsor of a participant's death, Hometown forwards an individual claim form to the Plan Sponsor for completion. The Plan Sponsor will then complete and return this form, accompanied by a death certificate, to Hometown, authorizing the disbursement of a death benefit. Disability benefits - When a participant becomes disabled, the Plan Sponsor will notify Hometown in writing of a participant's total and permanent disability. Hometown will then verify that the participant has been declared 100% disabled by the Workers Compensation Board. Subsequent to this verification, Hometown will facilitate the disbursement of disability benefits. -29- ~C0MPANY Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT o Length of Service Awards Program (LOSAP) (continued): Payment of administrative expenses: 1. Per the executed Service Fee Agreement, the Plan Sponsor agrees to payment as contracted. Authority to invest program assets is vested in Genworth Financial, Inc. and Standard Security Life Insurance Company. Subject to restrictions in the program document, program assets are invested in accordance with a statutory "prudent person" rule. The Sponsor has invested plan funds in Group Annuity Contracts with guaranteed floor rates of interest of 3% per annum. The Sponsor is required to retain an actuary to determine the amount of the Sponsor's contributions to the plan. The actuary retained by the Sponsor for this purpose is Harbridge Consulting Group, LLC. Portions of the following information are derived from a report prepared by the actuary dated March 2009. Program financial condition: Assets and liabilities: Actuarial present value of vested accrued benefits at December 31, 2008: Vested Non-vested Less assets available for benefits % of Total $1,042,253 21,767 $1,064,020 New York Commercial Trust Standard Security armuity Genworth Financial annuity Cash value of life insurance Total net assets available for benefits Total unfunded benefits 1.89% 28.05% 38.37% 41.69% 16,165 239,842 242,564 356,423 854,994 209,026 -30- ~fCO~PAN7 Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT J Length of Service Awards Program (LOSAP) (continued): Program financial condition (continued): Receipts and disbursements: Plan net assets, beginning of year $799,952 Changes during the year: Plan contributions $ 35,000 Investment income earned 19,050 Plan benefit withdrawals (40,920) Cash value of life insurance 45,816 Life insurance premium (3,904) 55,042 Plan net assets, end of year $854.994 Contributions: Range of Sponsor's contribution recommended by actuary $67,292 - $79,375 Amount of Sponsor's actual contribution $80,816 Administration fees: Fees paid to designated program administrator from separate District funds $ 3,300 Funding methodology and actuarial assumptions: Normal costs: The actuarial valuation methodology used by the actuary to determine the Sponsor's contribution is the Unit Credit Cost Method. The assumptions used by the actuary to determine the Sponsor's contribution and the actuarial present value of benefits are: Assumed rate of return on investment 6% Mortality table used for: Pre-retirement: None Post-retirement: 1994 Group Annuity - Male -31- COMPA Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Commitments and contingencies: The District is exposed to various risks of loss related to torts; theft of; damage to; and destruction of assets; injuries to employees; errors and omissions; natural disasters, etc. These risks are covered by commercial insurance purchased fzom independent third parties. Settled claims from these risks have not exceeded commercial insurance coverage. -32- eeCOM~A~