HomeMy WebLinkAbout2009TOWN OF SOUTHOLD
SINGLE AUDIT REPORTS
Year ended December 31,2009
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 Govemmental Funds Balance Sheet to
the Statement of Net Assets .............................................................................................................. 13-14
Statement of Revenues, Expenditures, and Changes in Fund Balances and
Reconciliation of the Govemmental 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 ................................................................................................................... 18-39
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT DISCUSSION AND
ANALYSIS
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
General Fund ........................................................................................................................................ 40
Highway Fund ....................................................................................................................................... 41
Community Preservation Fund ....................................................................................... 42
Post-employment Benefits Healthcare Costs - Schedule of Funding Progress ............................... 43
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
44
45
Discretely Presented Component Units:
Combining Statement of Net Assets ....................................................................................................... 46
Combining Statement of Activities .......................................................................................................... 47
OTHER REPORTS
Schedule of Expenditures of Federal Awards ................................................................................... 48-49
Note to Schedule of Expenditures of Federal Awards ....................................................................... 50
Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit
of Financial Statements Performed in Accordance with
Govemment Auditing Standards ........................................................................................................ 51-52
Report on Compliance with Requirements Applicable
to Each Major Program and Internal Control Over
Compliance in Accordance with OMB Circular A-133 ....................................................................... 53-54
Schedule of Findings and Questioned Costs .................................................................................... 55-57
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, 2009, 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.
We did not audit the financial statements of the seven component units presented discretely in these
financial statements. The financial statements of the Fishers Island Ferry District, which represents
66.8%, 61.9%, and 66.2%, respectively, of the assets, net assets, and revenues of the aggregate
discretely presented component units 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 other auditors.
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 other discretely presented component units, which represents 33.2%,
38.1%, and 33.8%, respectively, of the assets, net assets, and revenues of the aggregate discretely
presented component units were not audited as of the report date, nor were we able to satisfy ourselves
as to those financial activities by other auditing procedures.
In our opinion, except for the effects of such adjustments, if any, as might be determined necessary had
those discretely presented component units been audited, 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, 2009, 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.
PERSONAL SERVICE.TRUSTED ADVICE.
ALBRECHT, VIGGIANO, ZURECK & COMPANY, RC
245 PARK AVENUE, 24TH FLOOR 25 SUFFOLK COURT
NEWYORK, NY 10167 HAUPPAUGE, NY11788 3715
-1- T: 212.7924075 T: 631.434.9500 F: 631.434.9518
www.avz.com
In accordance with Government Auditing Standards, we have also issued our report dated September
28, 2010, 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 descdbe the scope of our testing of intemal 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 are not a required part of the
basic financial statements but are supplementary information required by accounting principles generally
accepted in the United States of America. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation of the
supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively compdse the Town of Southold, New York's basic financial statements. The 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 required part of the basic financial statements of the Town of
Southold, New York. The combining and individual nonmajor fund financial statements and the schedule
of expenditures of federal awards has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, is fairly presented in all material respects in relation to
the basic financial statements taken as a whole.
Hauppauge, New York
September 28, 2010
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
The following is a discussion and analysis of the Town of Southold's financial pertormance, providing an overview
of the Town's financial activities for the year ended December 31, 2009. 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.
ReportinR 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~s 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).
-3-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2009
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 govemmental 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
Primary Governmental Activities
December 31, 2009 and 2008
Assets
Current and other assets
Capital assets
Total Assets
Liabilities
Current and other liabilities
Long-term liabilities
Total Liabilities
Net Assets
Invested in capital assets,
net of related debt
Restricted:
Land acquisition
Debt service
Unrestricted
Total Net Assets
2009 2008
$ 24,737,490 $ 18,927,261
137,372,036 137,470,841
162,109,526 156,398,102
16,056,714 16,801,316
48,578,196 38,933,700
64,634,910 55,735,016
102,662,021 104,156,915
8,141,524 2,674,872
4,981 14,158
(13,333,910) (6,182,859)
$ 97,474,616 $ 100,663,086
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
Total assets of the primary government as of December 31, 2009 were $162.1 million, an increase of $5.7
million. Total liabilities as of December 31, 2009 were $64.6 million, which represents an increase of $8.9
million from December 31, 2008. This results in a net asset balance of $97.5 million, a decrease of $3.2
million. Of the Town's net asset balance, $102.7 million were invested in capital assets, net of related debt;
$8.1 million was restricted for future land acquisition and payments on debt service while there was a deficit of
($13.3) 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 certain factors including the increase in the post
employment benefits liability of approximately $5.0 million. The decrease in net assets in the current year will
continue to decrease in subsequent years due to the ongoing recognition of Governmental Accounting
Standards Board (GASB) No. 45, Accounting and Financial Reporting by Employers for Postemployment
Benefits Other Than Pensions (OPEB). The unfunded liability for postemployment benefits healthcare costs
increased in 2009 by $5.0 million bringing the unfunded liability at year end to $8.7 million. Additional
information on Postemployment Benefits Healthcare Costs can be found in Note C.6 to the financial
statements. In addition, long-term liabilities, which include other post-employment benefits payable,
compensated absences, and land closure and post closure care monitoring, will be funded through future
budgetary appropriations when they become payable in future periods.
Changes ia Net Assets
Primary Governmental Activities
For the years ended December 31, 2009 and 2008
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 (Decrease) in Net Assets
2009 2008
$ 3,434,214 $ 3,603,426
701,718 834,112
2,365,728 2,681,338
6,501,660 7,118,876
27,118,830 24,569,013
70,017 112,305
4,135,566 6,258,627
186,229 737,846
1,100,006 1,551,461
700,131 771,265
33,310,779 34,000,517
39,812,439 41,119,393
8,497,539 9,508,486
15,827,695 15,390,212
47,576 46,925
8,130,069 7,767,309
1,810,543 1,820,114
489,347 275,382
6,885,454 4,796,995
1,312,687 1,199,435
43,000,910 40,804,858
$ (3,188,471). $ 314,535
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
Net Cost of Services
Primary Governmental Activities
For the year ended December 31, 2009
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
$ 8,497,539 $ 412,990 $ 8,084,549
t5,827,695 656,665 15,171,030
47,576 12,947 34,629
8,130,069 326,694 7,803,375
1,810,543 460,444 1,350,099
489,347 214,516 274,831
6,885,454 4,417,404 2,468,050
1,312,687 1,312,687
$ 43,000,910 $ 6,501,660 $36,499,250
The cost of all governmental activities in the primary government this year was $43.0 million. The net cost of
these services, however, after subsidized by program revenues including charges for services and program
grants, was $36.5 million. The Town's change in net assets after general revenues of $33.3 million was an
overall decrease of $3.2 million,
$18,000,000
Expenses and Program Revenues
$16,000,00o Governmental Activities
S14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$-
Program Revenues
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
Operating Capital grants
gran[s and and
contributions contributions
2% 6%
Other
general
reverlue$
13%
Charges for
8%
State aid
unrestricted
3%
Revenue by Source
Governmental Activities
for the year ended December 31,2009
Real property taxes $ 27,118,830
State aid - unrestricted 1,100,006
Charges for services 3,434,214
Other general revenues 5,091,943
Operating grants and contributions 701,718
Capital grants and contributions 2,365,728
$ 39,812,439
THE TOWN'S FUNDS
The General Fund balance has increased by approximately $1.2 million due to the combination of the
increase in property taxes to cover the costs of expenditures which has been previously subsidized by other
sources of revenues such as mortgage tax and interest earnings. The Town has also decreased their overall
spending 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, 2009, and the amount of
change and percentage of total in relation to the prior year.
Increase %
2009 2008 (Decrease) Change
REVENUES
Real property taxes $ 27,118,830 $ 24,569,013 $ 2,549,817 10.4%
Other real property tax items 70,017 112,305 (42,288) -37.7%
Non-property tax items 4,135,566 6,258,627 (2,123,061) -33.9%
Departmental income 2,566,982 2,999,459 (432,477) -14.4%
Intergovernmental charges 356,548 262,977 93,571 35.6%
Use of money and property 338,016 876,863 (538,847) -61.5%
Licenses and permits 421,744 425,860 (4,116) -1.0%
Fines and forfeitures 210,209 169,119 41,090 24.3%
Sale of property and compensation for loss 576,314 379,797 196,517 51.7%
Miscellaneous local sources 117,288 551,492 (434,204) -78.7%
State aid 1,690,345 2,757,616 (1,067,271) -38.7%
Federal aid 2,230,027 1,757,284 472,743 26.9%
Total Governmental Fund Revenues $ 39,831,886 $ 41,120,412 $ (1,288,526) -3.1%
-7-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2009
THE TOWN'S FUNDS (continued)
Increase %
2009 2008 (Decrease) Change
EXPENDITURES
General government support $ 5,616,102 $ 5,747,219 $ (131,117) -2.3%
Public safety 9,694,008 9,455,215 238,793 2.5%
Public health 42,508 42,608 (100) -0.2%
Transportation 3,619,202 4,014,414 (395,212) -9.8%
Economic assistance and opportunity 1,139,753 1,147,293 (7,540) -0.7%
Culture and recreation 335,993 452,588 (116,595) -25.8%
Home and community services 3,556,535 3,749,271 (192,736) -5.1%
Employee benefits 7,578,847 8,245,765 (666,918) -8.1%
Capital 3,945,347 30,430,379 (26,485,032) -87.0%
Debt service pdncipal and interest 3,104,723 2,683,567 421,158 15.7%
Bond issuance costs 98,600 98,600 100.0%
TotalGovemmental Fund Expenditures $ 38,731,618 $ 65,968,319 $ (27,236,701) -41.3%
GENERAL FUND BUDGETARY HIGHLIGHTS
The Town appropriated expenditures in the original General Fund Budget in excess of estimated revenues in
the amounts of approximately $1.3 million, by designated unreserved fund balance from the prior year. Actual
revenues were less than anticipated by approximately $0.6 million. Actual mortgage tax revenue was less than
anticipated by approximately $0.3 million and actual interest earnings were less than anticipated by
approximately $0.3 million. Actual expenditures in all budgetary line items were less than the budgetary
appropriation by approximately $2.4 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 the original budget to final budget for revenues
did not change significantly. The decrease in the original budget to the final budget in expenditures is
attributable to the decreases in the employee benefits due to decreases in medical insurance premiums during
2009.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
As of December 31, 2009 the primary government had $137.4 million in net capital assets including land,
buildings, improvements, machinery and equipment, and infrastructure. The Town's component units had
$20.6 million in net capital assets including land, buildings, improvements, machinery and equipment, and
sewer mains.
Capital Assets at December 3t.
Primerv Government Land
Construction In progress
Buildings
Improvementa other than buildings
Machinery and equipment
Infrastructure
Total Capital Assets
Less accumulated depreciation
Primary Government - Total Net Capital Assets
2009 2008
$ 98,554.908 $ 95.541.778
3,450.336 3.428.182
11.914.658 8.829.508
'1 t,000.433 13.645.007
73.271.700 72.869,891
209.383,842 205.352,656
72.011,806 67,881.815
$ 137.372,036 $ 137.470,841
$ 2.193,353 $ 2.193.353
14.357.846 3.899.322
6.482,064 17.048.419
3,450.804 3.418.972
2,744.865 2.538.150
29,228.932 29.098.216
8.641.028 7.760,911
$ 20,587.904 $ 21,337,305
Comoonent Units
Land
Buildings
Improvernenta other than buildings
Machinery and equipment
Infrastructure
Total Capital Assets
Less accumulated depreciaUon
Component Units - Total Net Capital Assets
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2009
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 2010
General Fund $ 163,440
Total Equipment 163,440
Improvements
Highway Fund 1,200,000
Special Districts 750,000
Total Improvements
1,950,000
Total Program $ 2.113.44~0
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,
2009.
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, 2009 was 5.89%.
At December 31, 2009, the Town had approximately $35.4 million in long term general obligation bonds
outstanding, of which $33.2 million was for the primary government. Also outstanding at year-end were bond
anticipation notes in the amount of $5.1 million of which $4.1 million was for the primary government.
Additional information on the Town's debt activity can be found in Note C.4 to the financial statements.
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2009
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
Property Tax
The Town has adopted a budget for the 2010 fiscal year which factors in inflation and other adjustments to
revenues and expenditures as well as prior year positive and negative fund balances. The 2010 budget
includes an overall increase in real property tax revenues from the prior year of approximately 8.08% 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 2009, financial
assistance included state aid consisting of mortgage tax of $1.1 million, consolidated highway aid of $319
thousand, and other state aid of approximately $175 thousand. State aid per capita was $96 thousand and
County local government assistance was $275 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 2010 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, 2009
ASSETS
Current Assets:
Cash and investments
Cash - resthcted
Accounts receivable
Due from other governments
Due from primary govemrnent
State and federal aid receivables
Prepaid charges
Inventory of matedal and supplies
Total Current Assets
Non-Current Assets:
Deferred charges, net of accumulated amortization
Non-depreclable 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
Tax anticipation notes payable
Due to other governments
Due to component units
Unearned revenue
Non-current liabilities due within one year
General obligation 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
Estimated liability for landfill 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
$ 13,535,944 $ 1,790,110
7,765,471
225,294 8,231
1,922,432 28.762
513.316
188,621 2,649
914,398 47,000
1,730
24,553,890 2,390.068
183,600
102.005,244 2,193,353
35,366,792 18,394,551
137,555,636 20,587,904
162,109,526 22,977,972
1,560,129 149,088
343,507 29,123
4,119,000 940,000
300,000
1,766 3.098
513,316
7,045,718 513,316
1,868,000 150,000
279,000
47.664
26,278
16,056,714 1,832,289
31,300,000 2,100.000
7,330,735 172,896
1,227,895
8,719,566 97,100
48,578,196 2,369,996
64,634,910 4,202,285
~
102,662,021 17.981,827
8,141,524
4,981
(13,333,910) 793,860
$ 97,474,616 $ 18,775,887
See notes to the financial statements.
-11-
Function/Program
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF ACTIVITIES
Year ended December 31,2009
Program Revenues
Net Expenses and
Change in Net Assets
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
Pdmary Component
Government Units
PRIMARY GOVERNMENT
Government Activities:
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Primary Government
COMPONENT UNITS
General government support
Public health
Transportation
Culture and recreation
Home and community services
Interest on debt
Total Component Units
8,497,539 $ 250,855 $ 162,135
15,827,695 534,443 122,222
47,576 12,947
8,130,069 7,788
1,810,543 196,576 263,868
489,347 214,516
6,885,454 2,230,036 140,546
1,312,687
$ 43,000,910 $ 3,434,214 $ 701,718
$
$ 318,906
2,046,822
$ 2,365,728 $
190,461
75,585
3,099,568 $ 2,268,912
933,873
520,197 33,408
105,181
$ 225,078
$ 4,924,865 $ 2,302,320 $ -0- $ 225,078
GENERAL REVENUES Real property taxes
Other real property tax items
Non-property tax items
Interest eamings
State aid - unrestricted
Other
Total General Revenues
Change in Net Assets
Net Assets at Beginning of Year
Net Assets at End of Year
(8,084,549)
(15,171,030)
(34,629)
(7,803,375)
(1,350,099)
(274,831)
(2,468,050)
(1,312,687)
(36,499,250)
$ (190,461)
(75,585)
(605,578)
(933,873)
(486,789)
(lO5,181)
$ (2,397,467)
$ 27,118,830 $ 2,032,561
70,017 334
4,135,566
186,229 53,057
1,100,006 54,043
700,131 121,298
33,310,779 2,261,293
(3,188,471) (136,174)
100,663,087 18,911,861
$ 97,474,616 $ 18,775,687
See notes to financial statements.
-12-
TOWN OF SOUTHOLD
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2009
MAJOR GOVERNMENTAL FUNDS Non-Major
Capital Community Governmental
General Highway Projects Preservation Funds Totals
$ 11,202,324 $ 893,371 $ 610,533 $ 829,716 $ 13,535,944
$ 7,765,471 7,765,471
31,579 24,268 169,447 225,294
968,897 131,674 1,077,094 2,177,665
122,184 30,000 36,437 188,621
1,547,885 374,547 1,922,432
1.730 1,730
424,177 38,475 37,642 500,294
$ 13,329,879 $ 1,900,743 $ 772,207 $ 8,164,286 $ 2,150,336 $ 26,317,451
$ 13,329,879
ASSETS
Cash and investments
Cash - restricted
Accounts receivable
· Duefromotherfunds
State and federal aid receivable
Due from other governments
Supply inventory
Prepaids
Total Assets
LIABILITIES AND FUND BAJ.ANCES
LIABILITIES
Accounts payable $ 949,814
Retained percentages
Bond anticipation notes payable
Tax anticipation notes payable
Due to other funds 2,177,582
Due to component units 513,316
· Due to other governments 1,766
Deferred revenue 5,143,708
Total Liabilities 8,786,186
FUND BALANCE
Fund Balance - Reserved:
Encumbrances 26,119
· Supply inventory 1,730
Prapaids 424,177
Community preservation
Debt service
Fund Balance - Unreserved:
Designated - Ensuing year's budget 100,000
Insurance ctaims 646,911
· Special revenue funds
Undesignated 3,344,756
Total Fund Balance (Deficit) 4,543,693
Total Liabilities and Fund Balance
$ 234,546 $ 6,124 $ 18,831 $ 265,582 $ 1,474,897
85,232 85,232
4,119,000 4,119,000
300,000 300,000
83 2,177,665
513,316
1,766
961,389 940,621 7,045,718
1,196,018 4,210,356 18,831 1,506,203 15,717,594
17,753 43,872
1,730
37,642 500,294
8,141,524
4,981
38,475
8,141,524
1,050 3,931
265,020 365,020
646,911
358,000 358,000
401,230 (3,439,199) 230,738 537,525
704,725 (3,438,149) 8,145,455 644,133 10,599,857
$ 1,900,743 $ 772,207 $ 8,164,286 $ 2,150,336 $ 26,317,451
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, 2009
Total Fund Balances - Governmental Funds
Amounts repoded 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
govemmental 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
$102,005,244
107,378,598
(72,011,806)
$ (33,168,000)
(7,609,735)
(1,254,173)
(8,719,566)
10,599,857
137,372,036
(50,751,474)
414,104
183,600
(343,5O7)
$ 97,474,616
See notes to financial statements.
-14-
TOWN OF SOUTHOLD
STATEMENT OFREVENUES, EXPENDITURESAND CHANGESIN FUND BALANCES
GOVERNMENTAL FUNDS
FortheyearendedDecember31.2009
· Home and community sen/ices
Emp~o~e benefits
Total Expe~dihJres
Total Other Financing Sources (Uses)
Net Change In Fund Balance
Fund Balances (Deficit) at Beginning of Year
Fund Balances (Deficit) at End of Year
MAJOR GOVERNMENTAL FUNDS NomMajo~
Capital Community Debt Governmental
General Highway Projects Prese~,ation Service Fu~ls
$ 20.165.953 $4.137.746
63.585 3,057
818.273
461,257
356.548
223.229 6.558
228,699 7,788
210.209
288.425 246
117.182 106
1.195.671 318.906
24~294,262 4,474.407
Totals
$ 3.040.294
$ 4.159 33.091 $ 63.600
$2,815.131
3.375
276.999
2,105.725
7.379
185.257
287.643
145.768
67~974
30.000
1.996.822
34~159 __ 5,070,207 63,600 5895251
$ 27.118.830
70,017
4.135.566
2,566.982
356.548
338,016
421.744
210.209
576.314
117,288
1.690.345
2~230.027
39~831.886
5.548.092 6.203
8,599.974
35.138
486,434 3.132.768
335.993
4,980.929 1.433.883
61.807 5.616.102
1.094.034 9.694.008
7.370 42.508
3.619.202
1.139.753
335,993
3.155.421 3.556.535
1.164.035 7.578.847
677.436 3.267.911 3.945.347
777.350 30.000 632.500 430.150 1.870.000
275,819 11.473 17.243 699.213 230.975 1.234.723
98,600 98.600
22,580.596 4.614.327 694~679 4.599~624 98.600 6.143~792 38.73%618
1.713.666 (139.920) (660.520) 470,583 (35,000}. (248.541). 1.100.268
283,000 5,000,000 5.283,000
(2.090.000) (2.090.000)
2.125,000 2.125.000
750.247 750.247
(532.299) (78.917) (139,031) (750.247)
(532.299) (78,917) 1.033.247 5,000,000 35.000 (139,031) 5.318.000
1.181.367 (218.837) 372.727 5.470.583 -0- (387.572) 6.418.268
3.362.326 923.562 (3,810.876) 2,674,872 -0- 1.031.705 4.181.589
$ 4.543.693 $ 704.725 $ (3.438,149) $ 8.145.455 $ -0- $ 644.133 $ 10.599.857
See notes to the financial statements,
-15-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
For the year ended December 31,2009
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
4,375,127
(4,455,613)
(18,320)
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
Payments to refunded bond escrow agent
Refunding bond issues
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
$ 6,418,268
(98,806)
(45,490)
77,350
(5,283,000)
1,870,000
(2,125,000)
2,090,000
(231,413)
(737,729)
(5,044,687)
(77,964)
$ (3,188,471)
See notes to financial statements.
-16-
TOWN OF SOUTHOLD
STATEMENT OF FIDUCIARY NET ASSETS
December 31, 2009
ASSETS
Cash and investments
Fishers Island
Town Ferry District Totals
$ 27,928,326 $ 28,762 $27,957,088
Total Assets $ 27,928,326 $ 28,762 $ 27,957,088
$ 18,948,332 $18,948,332
8,780,297 $ 28,762 8,809,059
199,697 199,697
Total Liabilities $ 27,928,326 $ 28,762 $ 27,957,088
LIABILITIES
Due to other governments
Other liabilities
Deposits held
See notes to financial statements.
-17-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Town of Southold (the "Town"), which was established in 1640, is governed by Town Law and other
general laws of the State of New York and various local laws. The Town Board is the legislative body
responsible for overall operations. The Town Board consists of the Supervisor who is elected for a term
of four years and five council members who are elected for terms of four years. The Town Board appoints
the Town Attorney, Comptroller and the Commissioner of Public Works whose terms are fixed by Town
Law. The Town Clerk, Receiver of Taxes, Supedntandent of Highways, 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 govemment's accounting policies are described below.
1. REPORTING ENTITY
The financial reporting entity consists of: (a) the pdmary govemment, which is the Town of
Southold; (b) organizations for which the primary government is financially accountable; and (c)
other organizations for which the nature and significance of their relationship with the pdmary
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 criteda 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 govemment.
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 govemment-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, 2009
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 govemment-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 rogulations, restrictions or limitations. The vadous
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 govemmental 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 Fund - 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.
Debt Service Fund - is used to account for the accumulation of resources for the payment of
debt principal, interest and related costs.
-19-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. BASIS OF PRESENTATION (continued)
Fund Financial Statements (continued)
Additionally, the Town reports the following non-major funds:
Special Revenue Funds - are used to account for the proceeds of specific revenue sources (other
than major capital projects) that are legally restricted to expenditures for specified purposes.
Special Revenue Funds include the following:
General Fund Part Town - to provide general services outside the Village of Greenport.
Special Grant Fund - segregate and account for projects funded by Community
Development revenue.
Special District Funds - to provide special services to areas that encompass less than the
whole town.
Fiduciary Funds - Fiduciary Funds are used to account for assets held by the Town in a trustee
or custodial capacity.
Agency Fund - is for money (and/or pmperty) 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 Waste Management 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 Waste
Management 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, 2009
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3. BASIS OF ACCOUNTING/MEASUREMENT FOCUS
Measurement focus refers to what is being measured whereas the basis of accounting refers to
when revenues and expenditures are recognized in the accounts and reported in the financial
statements. Basis of accounting relates to the timing of the measurement made, regardless of the
measurement focus applied.
In the govemment-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 er 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, govemmental 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 callected
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 appliceble
appropriation, is employed in the governmental funds. Appropriations for all govemmental 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
cemmilments 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 31,2009
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES AND FUND EQUITY (continued)
RECEIVABLES
Receivables include amounts due from Federal, State, and other govemments or entities for
services provided by the Town. Receivables are recorded and revenues recognized as eamed or
as specific program expenditures are incurred.
INVENTORY - MATERIALS AND SUPPLIES
Inventory in the general and special revenue funds is valued at cost. Inventory in these funds is
accounted for under the consumption method.
CAPITAL ASSETS
Capital assets purchased or acquired with an original cost of $5,000 or more are reported at
historical cost or estimated historical cost. Contributed assets are reported at fair market value
as of the date received. Additions, improvements and other capital outlays that significantly
extend the useful life of an asset are capitalized. Other costs incurred for repaim and
maintenance are expensed as incurred. Depreciation on all assets is provided on the straight-
line basis over the following estimated useful lives:
Buildings
Improvements and other
Machinery and equipment
Infrastructure
10-40 years
20 years
5-10 years
20-30 years
Infrastructure assets, consisting of certain improvements other than buildings including roads,
curbs, sidewalks, bridges and street lighting are capitalized along with other capital assets.
In the fund financial statements, capital assets are recorded as capital outlay expenditures in the
governmental fund upon acquisition.
DEFERRED CHARGES
Discounts and expenses related to the issuance of long-term debt and the loss on the eady
retirement of refunded debt am amortized on a straight-line basis over the life of the issue, and are
presented net of accumulated amortization, in the govemment-wide financial statements. Bond
issuance costs that are immaterial are charged as operating expenses in the fund servicing the
debt.
In the fund financial statements bond issuance costs are recognized, dudng the current peded, as
debt service expenditures in the fund servicing the debt.
PREMIUMS ON DEBTISSUANCE
Premiums related to the issuance of long-term debt are amortized on a straight-line basis over the
life of the issue and am presented as part of general obligations in the changes in long-term
liabilities (Note C.4). Premiums that are immaterial will not be amortized.
In the fund financial statements premiums are recognized, during the current pefied, and reported
as other financing sources.
22-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2009
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES AND FUND EQUITY (continued)
DEFERRED REVENU~UNEARNEDINCOME
Deferred revenues/uneamed income are those where asset recognition cdteria 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.
PREP~DS
Prepaids record payments to vendors that benefit future recording pedods and are reported on the
consumption basis. Prepaids in the general and special revenue funds represent insurance
premiums paid for coverage that will benefit the subsequent period and for retirement benefits that
will benefit a future period.
LONG-TERM OBLIGATIONS
The liabilities for long-term obligations consisting of general obligation bonds, compensated
absences, judgments, 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.
EQUFFY 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) extemal 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 am segregated for future use and therefore not
available for future apprepdation 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.
- 23-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2009
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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
general taxes. The Town's assessment rolls are used for the levy of real property taxes by the
Town and the School Districts, as well as by the County and by Special Districts of the County and
the Town.
The Town of Southotd Receiver of Taxes collects all real property taxes for the Town, Suffolk
County, Town Special Districts and School Districts. These taxes are levied on December 1, and
are due in two installments, 50% on December 1 and 50% on May 10, payable without penalty to
January 10 and May 31, respectively. Penalties are imposed thereafter at the rate of one-twelfth of
the rate of interest determined by the State Commissioner of Taxation and Finance, after which
taxes are payable to the County Treasurer. The Town retains the total amount of Town, Highway
and Town Special Districts levies from the amount collected, and forwards the balance collected to
the County which assumes collection responsibility. The Town and Town's Special Districts
therefore realize annually the 100% collection of real property taxes.
School District property taxes are also levied on December 1, and are also payable in two
installments. School property taxes are due in two installments, 50% on December 1 and 50% on
May 10 payable without penalty to January 10 and May 31, respectively. The County is also
responsible for uncollected school taxes.
INTERFUNDTRANSACTIONS
Interfund transactions have been eliminated from the government-wide financial statements. In
the funds statements inter[und transactions include:
a) Interfund Revenues
Interfund revenues, which are quasi-external transactions, in the general fund represent
amounts charged for services or facilifies 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 govemment-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.
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2009
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
OTHER POST EMPLOYMENT BENEFITS
In addition to providing pension benefits, the Town provides health insurance coverage and survivor
benefits for retired employees and their survivom. 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 t~e New York State Department of Civil Service), are provided through the New
York State Empire Plan (the "Empire Plan") whose premiums are based on the benefits paid
throughout the State during the year or under the Town of Southold's self insurance plan which is
further described in Note D.
The Town recognizes the cast 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 ceverage, 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.
POLLUTION REMEDIATION OBLIGATION
The Governmental Auditing Standards Board (GASB) issued Statement No. 49, Accounting and
Financial Reporting for Pollution Remediation Obligations. This Statement establishes spec'~ic
guidance on the measurement and recognition of pollution remediation obligations or
responsibilities. The guidance lists what events must occur for a government to~ be required to
calculate and report a pollution remediation liability. The Town adopted GASB statement No. 49 in
fiscal year ended 2008 which had no effect on the accompanying financial statements.
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
1o BUDGETARY DATA
Budgets am 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.
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2009
B. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (continued)
FUND BALANCES
DESIGNATION OF FUND BALANCE
Portions of the unreserved balances at December 31, 2009 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 Year's for Insurance
Fund Unreserved Budget Claims
Fund Balance
Unreserved
Undesignated
Major Governmental Funds
General Fund- Townwide $4,091,667
Highway Fund 666,250
Non-Major Funds:
Town Outside Village 525,779
East West Fire Protection District 12,469
Southold Wastewatar District 255,565
Fishers Island Sewer District 37,541
Solid Waste Management District (242,616)
FUND DEFICITS
$ 100,000 $ 646,911 $3,344,756
265,020 401,230
119,000 406,779
6,900 5,569
232,100 23,465
37,541
(242,616)
The capital projects fund had a deficit fund balance at December 31, 2009. 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, 2009. The solid
waste management fund deficit is due to budgeted revenues (primarily tipping fees) exceeding
actual amounts received. The solid waste management fund deficit will be eliminated as the tax
anticipation note is redeemed in 2010.
DETAILED NOTES ON ALL FUNDS
'1. CASH AND INVESTMENTS
Cash consists of funds deposited in demand accounts, time deposit accounts, and cedificates of
deposit with maturities of less than three months.
The Town's investments are govemed 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 3t, 2009
DETAILED NOTES ON ALL FUNDS (continued)
1. 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, 2009 the Town's cash book balanca was approximately $40,800,000. This
amount is inclusive of Fiduciary fund deposits of approximately $19,500,000 but exclusive of petty
cash of approximately $2,400. The available bank balance was approximately $40,900,000. Of the
bank balance, $1,485,964 was covered by Federal deposit insurance, and approximately
$39,400,000 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 govemment at December 31, 2009 were as
follows:
Major Governmental Funds:
General Fund - Town wide
Highway Fund
Capital Projects Fund
Non-Major Govemmental Funds:
General Fund - Part Town
East-West Fire District
Southold Wastewater District
Fishers Island Sewer District
Solid Waste Management District
Amount Amount
Receivable Payable
$ 2,177,582
$ 968,897 83
131,674
248,621
155,581
1,183
1,477
670,232
Total
Interfund receivable and payable balances for the primary government at December 31, 2009
are expected to be paid currently.
- 27-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
DETAILED NOTES ON ALL FUNDS (continued)
2. INTERFUND RECEIVABLES AND PAYABLES (continued)
Interfund transfer balances for the pdmary government at December 31, 2009 represent primarily
the payment of operating and capital expenditures and are stated as follows:
Major Govemmental Funds:
General Fund - Town wide
Highway Fund
Capital Projects Fund
Non-Major Govemmental Funds:
Fishers Island Sewer District
Solid Waste Management District
Total
Transfers Transfers
In Out
$ 532,299
78,917
$ 750,247
4,031
135,O00
$ 750.247 $ 750.247
3. CAPITAL ASSETS
Primal,, eovemment
Cap~l 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 depreciab~e capital assets
Less accumulated depredation
Buildings
Ireprovements other than buildings
Machinery and equipment
Infrastructure
Total accumulated depreciation $
Total net depreciable capital assets
Total net capital assets
Balance Balance
1/1/09 Reclassifications Additk)ns Deletions 12/31/09
95,541,778 $ 3,013,130 $ 98,554,908
3,428,182 468,313 $ 446,159 3,450,336
98,969,960 $ -0- 3,481,443 446,159 102,005,244
8,829,508 2,759,158 345,063 19,071 11,914,658
13,645,007 (2,759,158) 114,584 11,000,433
11,038.290 478,390 324,873 11.191,807
72,869,891 401.809 73,271,700
106,382,696 -0- 1,339,846 343,944 107,378,598
2,467,528 2,715,702 246,096 17,442 5,411,884
4,753,632 (2,715,702) 626,824 2,664,754
7.341,701 783,876 308,180 7.817,397
53,318,954 2,798,817 56,117,771
67,881,815 $ -0- $ 4,455,613 $ 325,622 72,011,806
35,366,792
$ 137,372,036
Depreciation expense was charged to govemmental functions as follows:
General government support
Public safety
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
$ 272,937
172,848
3,059,147
23,169
70,052
857,460
$ 4,455,613
- 28-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
DETAILED NOTES ON AEL FUNDS (continued)
3, CAPITAL ASSETS (continued)
Balance
Balance
Discretely presented component units
Capital assets not being depreciated
Land
Total capital assets not being depreciated
Depreciable capital assets
Buildings
Improvements other than buildings
Machinery and equipment
Inffastructum
Total depreciable capital assets
Less accumulated depreciation
Buildings
Improvements other than buildings
Machinery and equipment
Infras~ctare
Total accumulated depreciation $
Total net depreciable capital assets
Total net capital assets
Iil109 Reclassifications Add,ons Deletions 12/31109
2,193,353 $ 2,193,353
2,193,353 $ -0- $ -0- $ -0- 2,193,353
3,899,322 10,411,590 46,934 14,357,846
17,048,419 (10,572,255) 5,900 6,482,064
3,418,972 31,832 3,450,804
2,538,150 160,665 46,050 2,744,865
26,904,863 -0- 130,716 -0- 27,035,579
1,572,106 423,443 462,858 2,458,407
2,267,192 (557,980) 180,813 1,890,025
2,512,239 142,436 2,654,675
1,409,374 134,537 94,010 1,637,921
7,760,911 $ -0.. $ 880,117 $ -0- 8,541,028
18,394,551
$ 20,587,904
INDEBTEDNESS
SHORT TERM DEBT
Tax Anticipation Notes (TANs) -The liability for the tax anticipation notes are accounted for in the
Solid Waste and Refuse Fund. This note which beam an interest rate at .95% is due February 15,
2010.
A summary of changes in TANs for the year ended December 31, 2009 is as follows:
Balance Balance
1/1/09 Increases Reductions 12/31/09
Primary Govemment
Solid Waste
$ -0- $ 300,000 $ -0- $ 300,000
$~ -0- $ 300.000 $ -0- $ 300.000
- 29-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
DETAILED NOTES ON ALL FUNDS (continued)
4. INDEBTEDNESS (continued)
SHORT TERM DEBT (continued)
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 fn/e 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 pedod
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 vadous dates through 2010.
When BANs are not redeemed with the proceeds of bond issues, but instead paid fi.om 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 $ 3,748,000 .99%
Various Purposes 371,000 2.00%
New London Wharf 850,000 1.73%
Mattituck Park 90,000 .99%
Total $ 5.059.000
A summary of changes in BANs for the year ended December 31, 2009 is as follows:
Balance Balance
1/1/09 Increases Reductions 12/31/09
Primary Government $ 5,179,300 $ 1,060,300 $ 4,119,000
Component Units 1,399,800 459,800 940,000
$ 6.579.100 $ -0- $ 1.520__._:.100 $ 5.059.000
LONG TERM DEBT
Summary of changes in long-term debt transactions for the year ended December 31, 2009 is as
follows:
Non-current
Balance Balance liabilities due Non-current
1/1109 Increases Reductions 12/31/09 within one year liab~fifies
General obligation bonds $ 3,960,000 $ 33,168,000 $ 1,868,000 $ 31,300.000
Net compensated absences 7,609,735 279,000 7,330,735
Estimated liability for landfill closure
and post-closure care costs 516,444 752,108 14,379 1.254.173 26,278 1,227,894
Other postemployment benefits payable 3.674,879 6,339,666 1.294,979 8.719,566 8,719.566
Component Units:
General obligation bonds 2,455.000 205,000 2,250,000 150,000 2,100,000
Net compensated absences 172,896 172,896 172,896
Claims and judgments 93,103 45,439 47,664 47,664
Other postemployment benefits payable 95,099 2.001 97,100 97.100
$ 29,720,000 $ 7,408,000
7,378,322 231,413
- 30-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2009
DETAILED NOTES ON ALL FUNDS (continued)
4. INDEBTEDNESS (continued)
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 ara backed by the full faith and credit of the Town, bear interest at various rates
from 3.14% to 6.375% and have matudty dates in 2009 through 2030.
Future principal and interest payments to matudty for both the primary govemment and the
component units are as follows:
Year Endin,q Principal Interest
2010 $ 2,043,000 $ 1,445,066
2011 2,165,000 1,268,833
2012 2,130,000 1,195,581
2013 1,965,000 1,125, 731
2014 1,980,000 1,056,464
2015-2019 9,610,000 4,178,683
2020-2024 7,310,000 2,492,775
2025-2029 6,835,000 1,013,625
2030 1,380,000 29,547
Totals $ 35.418.000 .$ 13.806.305
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.
CURRENT REFUNDING OFBONDS
Dudng May 2009, the Town issued $2,125,000 in general obligation bonds with an interest rate
ranging from 2.00% to 5.00% to current refund $1,020,000 of outstanding 1998 Agricultural Land
Preservation Serial Bonds with an interest rate that ranges from 4.850% to 4.875% through the
year 2018, and $1,070,000 of 1999 Open Space Preservation Sedal Bonds with an interest rate of
4.70% through the year 2019.
The net proceeds of $2,130,238 (the par amount of the bonds plus a net premium of $63,600 and
less an Underwriter's discount and other costs of issuance of $98,600) were used to purchase
U.S. Government securities. Those securities were deposited in an irrevocable trust with an
escrow agent to provide for all future debt service payments on the 1998 and 1999 bonds. All of
the refunded issues were called in 2009 and therefore no outstanding bonds from this issue are
considered defeased.
The Town current refunded the 1998 and 1999 bonds to reduce its total debt service payments
O O
over the next ten years by 5.9 ~ and 4.2 Yo, respectively, to obtain an economic gain of $104,907
(the difference between present values of the debt service payments on the old and new debt).
PRIOR YEAR DEFEASANCE OF DEBT
In prior years, the Town defeased certain bonds by placing the proceeds of new bonds in an
irrevocable trust with an escrow agent to provide for all future debt service payments on the old
bonds. Accordingly, the trust account assets and liability for the defeased bonds are not included in
the Town's financial statements. At December 31, 2009, there were no amounts considered
defeased.
-31-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
DETAILED NOTES ON ALL FUNDS (continued)
8. 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 governed by
the New York State Retirement and Social Security Law (NYSRSSL). As set forth in the
NYSRSSL, the Comptroller of the State of New York (Comptroller) serves as sole trustee and
administrative head of the System. The Comptroller shall adopt and may amend rules and
regulations for the adminislration and transaction of the business of the System and for the custody
and control of their funds.
A publicly available annual report containing financial statements and required supplemental
information for the Employees' Retirement System may be obtained by writing to the New York
State Retirement System, Governor Smith State Building, Albany, NY 12244.
Fundinq Policy
The System is noncontributory except for employees who joined the New York State and Local
Employees' Retirement System after July 27, 1976 and who have less than ten years of
membership and less than ten years of credited service with a retirement system under the
provisions of article fourteen or t'~een of the NYSRSSL, who contribute 3% of their salary. Pdor 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
eady 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
2009 $ 794,550 $ 861,865
2008 $ 932,918 $ 905,458
2007 $ 980,628 $ 967,286
The Town's contribution to the system was 100% of the conthbutions required each year.
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, which commenced with the 2008 liability.
- 32-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2009
DETAILED NOTES ON ALL FUNDS (continued)
OTHER POST-EMPLOYMENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE)
(continued)
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
10 years of service with the Town. For police, the Town provides continuation of medical insurance
for employees who have at least 20 years of service with the Town. The retiree is eligible for full
Medicare reimbursement in the amount of $1,388 for police and $1,157 for other employees per
year. Healthcare benefits for non-union employees are similar to those of union employees.
Sun/iving 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 participants as of January 1, 2009, 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 217
Retirees 167
Spouses of retired employees 6
Total 390
Funding 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, 2009, the Town's annual other post-employment benefits cost
(expenses) were $6,339,666. Considering the annual expense as well as the payment of current
health insurance premiums, which totaled $1,294,979 for retirees and their beneficiaries, the result
was an increase in the other post-employment benefits liability of $5,044,687 for the year ended
December 31, 2009. The Town's component units annual other post-employment benefits cost
(expenses) were $114,335. Considering the annual expense as well as the payment of current
health insurance premiums, which totaled $17,235 for retirees, the result was an increase in the
other post-employment benefits liability of $97,100 for the year ended December 31,2009.
Retired employees
Active employees
Unfunded actuarial accrued liability (UAAL)
Benefit Obligations and Normal Cost
$ 21,596,874
40,896,406
- 33-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2009
DETAILED NOTES ON ALL FUNDS (continued)
6. OTHER POST-EMPLOYMENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE)
(continued)
Annual Other Post-Employment Benefits Cost and Net ObliRation (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 no[mai 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
31,2009 are as follows:
Normal Cost
Amortization of unfunded actuarial
liability (UAAL) over 30 years
Interest
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, 2009
Increase in net OPEB obligation
Net OPEB obligation- beginning of year
Net OPEB obligation- end of year
Percent of annual OPEB cost contributed
Funded Status and Fundinq Proqress:
$ 2,681,091
3,474,993
246,243
6,402,327
140,574
(203,235)
6,339,666
1,294,979
5,044,687
3,674,879
$ 8.719.566
20.43%
The percentage contributed, as it relates to the Town of Southold, for the current year and
preceding year was:
Annual
Annual Contribution Percentage Net OPEB
OPEB Cost Made Contributed Obliqation
2009 $ 6,339,666 1,294,979 20.43% $ 8,719,566
2008 4,798,081 1,123,202 23.41% 3,674,879
The schedule of funding progress presents trend information about whether the actuarial value of
plan assets is increasing or decreasing over time relative to the actuarial accrued liability for
benefits.
- 34-
Co
Do
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
DETAILED NOTES ON ALL FUNDS (continued)
OTHER POST-EMPLOYMENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE)
(continued)
The funded status of the plan as of January 1, 2009 is as follows:
Actuarial Accrued Unfunded UAAL as a
Value of Liability AAL Funded Covered
Assets (AAL) (UAAL) Ratio Payroll
Town $ -0- $ 62,493,280 $ 62,493,280 0% $ 14,754,952
Component Units -0- 1,146,345 1,146,345 0% 974,567
Percentage
of
Payroll
423.54%
117.63%
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 am subject to continual revision as actual results am compared with past expectations
and new estimates are made about the future.
Projections of benefits for financial reporting 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 pattem 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 short-term liability in actuarial accrued
liabilities, consistent with the long-term perspective of the calculations.
In the January 1, 2009 actuarial valuation, the liabilities were computed using the projected unit
credit cost method. The actuarial assumptions utilized a 4,0% 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, 2009 was twenty
eight 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 acoumulated 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, 2009, the value of the accumulated vacation time and sick leave was
$7,609,735 for the primary govemment.
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.
- 35-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
COMMITMENTS AND CONTINGENCIES (continued)
Risk Management (continued)
For the year ended December 31, 2009, the Town has a deductible liability exposure of $50,000 per
claim for General Liability, $25,000 per claim for Automobile Liability, Police Liability and Employee
Benefits, and $10,000 per claim for Public Officials and Employment Practices. Any liability exposure
above the deductible amounts is covered by primary insurance policies up to $1,000,000 per claim for
General Liability, Public Officials, Police and Employment Practices, and Employee Benefits.
Aggregate exposures are $1,000,000 per claim for Public Officials, Police and Employment Practices,
$3,000,000 for Employee Benefits and $5,000,000 for General Liability. After primary policy limits are
exhausted, the excess exposure above the per claim or aggregate limits is covered by an Umbrella
Liability Policy of $10,000,000 per claim and $10,000,000 in the aggregate.
For insurance for health benefits that are self-insured, the Town has insurance policies which provide
coverage for specific medical cases in excess of $100,000 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 2009,
the attachment point for the aggregate policy was $3,149,188.
There have been no significant reductions in insurance coverage as compared to the prior year, and
there were no settlements in excess of insurance coverage over the last three years.
The Risk Retention Fund reserves for general liability claims are determined by a third party
administrator, and are reported when it is probable that a loss has occurred and the amount of that loss
can be reasonably estimated. Claims reserves for general liability claims are reevaluated periodically to
take into consideration recently settled claims and any new developments and changes.
The Risk Retention Fund liabilities for medical claims outstanding at year end are reported by the third
party administrator and are recorded when the claim has been incurred and paid within 60 days of the
year end.
The Town's discretely presented component units are not included in the Town's self-insurance risk
management program for any claims.
Net assets in the Risk Retention Fund are reserved for future catastrophic losses and are not available
for other uses. Changes in the liability for claims and judgments for the year ended December 31,
2009 and 2008 are as follows:
General
Medical Liability
2009 2008 2009 2008
Unpaid Claims as of December 31,
pdoryear $ 167,490 $ 447,844 $ 1,088 $ 1,215
Incurred Claims:
Provision for insured events
of the current fiscal year 2,769,328 3,126,515 4,250 20,904
Increase (decrease) in net provision for
insured events of prior fiscal years ~ (53,276) 2,308 (127)
Total Incurred Claims and
Claim adjustments 2,934,602 3,521,083 7,646 21,992
Payments of:
Claims during the current year 2,766,226 3,353,593 4,250 20,904
Unpaid Claims as of December 31,
current year $ 168.376 $ 167.490 $ 3.396 _$ 1.088
- 36-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2009
COMMITMENTS AND CONTINGENCIES (continued)
Risk Management (continued)
During the year ended December 31, 2009 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
Landfill Closure and Post-Closure Care Costs
1,578,504
310,435
952,692
359,406
$ 3,201,037
297,882
15,000
15,000
327,882
$ 3.528.919
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 yearn 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 yearn.
Accordingly, as of December 31, 2009 the Town has recorded a liability of $1,254,173 which represents
the prevision to be made in future budgets for post-closure landfill costs. Actual costs may vary due to
inflation or deflation, changes in technology, or changes in regulations or applicable laws.
Actual costs associated with the placement of the final cover totaled $7,681,719. Financing for closure
activities was provided through a $2,000,000 grant from the New York State Department of
Environmental Conservation with the balance provided with a state subsidized loan through the New
York State Environmental Facilities Corporation. Costs associated with post closure care will be
covered by charges to future landfill users and future tax revenue.
Lease Commitments and Leased Assets
The Town leases property and equipment under operating leases. Total rental expenditures on such
leases for the year ended December 31, 2009 were $201,067. Future obligations over the primary
terms of the Town's leases as of December 31,2009 are as follows:
2010 $ 227,220
2011 212,396
2012 200,425
2013 109,519
2014 and thereafter 358,533
Total $ 1.108.093
- 37-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2009
CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED
COMPONENT UNITS
The following represents condensed financial statements for the discretely presented component units as
of and for the year ended December 31, 2009:
Condensed Statement of Net Assets:
Fishers island Ferry District
Fishers island Waste Management District
Cutchogue-New Suffolk Park D[stdct
Southold Park District
Orient-East Madon Park District
Mattituck Par~ District
Orient Mosquito District
Due Eom Capital Assets Ot~er
Current Pdmary Net of Current Long-Term Net
Assets Government Depreciation Liabilities Liabilities Assets
$ 308.746 $ 178.811 $ 14,863.902 $ 1.358.968 $ 2.369.996 $ 11,622,495
921,706 91.063 2.866.526 99.964 3.779.331
115,247 30.994 120.141 30.994 235.388
86.835 75.101 800.446 78.064 884.318
3,171 8.615 432.985 10.150 434,621
433.846 109.659 1.488,726 234.877 1.797.354
7.201 19.073 15.178 19.272 22.180
$ 1.876.752 $ 513.316 $ 20.587.904 $ 1,832,289 $ 2.369.996 $ 18.775.687
Condensed Statement of Activ'dies:
Program General Revenue Net Assets
Pmpedy
Expenses Revenue Net Expense Tax Other Change 1/1/09 12J3t/09
RsherslslandFenyD[sthct $ 3,409.483 $ 2.268.912 $ 1.140.571 $ 590.000 $ 310,454 $ (240,117) $11,862.612 $11.622,495
Rshers Island Waste
Management Dist~ct 520.197 33.408 486,789 399.800 6.034 (80,955) 3.860.286 3.779.331
Cutchogue~ew Suffolk Park
District 191.501 191.501 145,000 1.418 (45.083) 280,471 235.388
Southold Park District 341.616 341,616 315,000 42.020 15,404 868.914 884.318
Orient-East Madon Park Dist~int 37,943 37,943 35.583 10.643 8.283 426.338 434.621
Matfituck Park Disthct 348,540 348,540 477.178 83.151 211.789 1.585,565 1,797.354
Odent Mosquito District 75.585 75.585 70.000 90 (5.495) 27.675 22.180
$ 4.924.865 $ 2.302.320 $ 2.622,545 $ 2.032.561 $ 453.810 $ (136.174) $ 18.911,861 $ 18.775.687
2% TRANSFER TAX
In November 1998, the voters of the Town approved a referendum for a 2% transfer tax, which became
effective on April 1, 1999. The transfer tax receipts are recorded in the 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, 2009, 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 purposes
expenses of:
Revenues Expenditures
Yearend December31,2009 $ 3,040,294 $ 4,599,624
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
- 38-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2009
SUBSEQUENT EVENTS
On February 15, 2010, the Tax Anticipation Note in the Solid Waste Management Fund was redeemed
for $300,000.
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.
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.
- 39-
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 31,2009
Vadance
Original Final Positive
Budget Budget Actual Encumbrances (Negative)
REVENUES
Real property taxes $20.165.953
Other real property tax items 89,100
Non-property tax items 818,273
Departmental income 486,150
Intergovernmental charges 464,578
Use of money and property 570.000
Licenses and permits 263,388
Fines and forfeitures 172,500
Sale of pmpe~'y and compensation for loss 79.000
Miscellaneous local sources 187,872
State aid 1.393,015
Federal aid
Total Revenues
$ 20.165.953 $ 20.165,953 $
89.100 63,585 (25.515)
818.273 818.273
596.600 461,257 (135,343)
349,607 356,548 6.941
570,000 223.229 (346,771)
263,388 228,699 (34,689)
181,500 210.209 28,709
79.000 288,425 209,425
204,011 117,182 (86,829)
1,489.100 1.195.671 (293,429)
126.991 165,231 38.240
24.689.829 24.933.523 24,294,262 (639.261)
EXPENDITURES
General government support 6,321,876
Public safety 9.484.438
Public health 35.250
Transportation 494.100
Economic assistance and opportunity 1,219,500
Culture and recreation 369,020
Home and community services 437,331
Employee benefits 6.018.709
Debt service - principal and interest 1,090,281
Total Expenditures
6.682.522 5,548.092 $ 24,007 1,110,423
9.318.453 8.599,974 2,112 716,367
35.250 35,138 112
500.665 486,434 14.231
1,220,075 1,139,753 80.322
370,490 335.993 34,497
437.754 401.114 36,640
5.389.709 4.980,929 408.780
1.090.281 1,053,169 37.112
25.470.505 25.045.199 22,580,596 26.119 2.438.484
(780,676) (111,676) 1.713.666 (26.119) 1,799,223
Excess(Deficiency)of Revenues
Over Expenditures
Other Financing Sources (Uses)
Transfers out ~
Total Other Financing Sources (Uses) ~
Net Change in Fund Balance $ (1,313.076)
Fund Balance at Beginning of Year
Fund Balance at End of Year
(539,400) (532,299) 7,101
(539,400) (532,299) 7,101
$ (651,076) 1,181,367 $ (26,119) $ 1,806,324
3,362,326
$ 4.543,693
See notes to the financial statements.
-40-
TOWN OF SOUTHOLD
HIGHWAY FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Year ended December 31, 2009
REVENUES
Real property taxes
Other mai property tax items
Use of money and property
Licenses and permits
Sale of property and compensation
for loss
Miscellaneous local sources
State aid
Total Revenues
Variance
Original Final Positive
Budget Budget Actual (Negative)
$ 4,137,746 $ 4,137,746 $ 4,137,746 $
11,700 11,700 3,057 (8,643)
70,000 70,000 6,558 (63,442)
10,000 10,000 7,788 (2,212)
3,000 3,000 246 (2,754)
106 106
326,819 326,819 318,906 (7,913)
4,559,265 4,559,265 4,474,407 (84,858)
EXPENDITURES
General government support 500
Transportation 3,339,469
Employee benefits 1,480,036
Debt service - principal and interest 42,280
Total Expenditures
Excess of Revenues
Over Expenditures
Other Financing Uses Transfem out
Total Other Financing Uses
Net Change in Fund Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
6,500 6,203 297
3,273,469 3,132,768 140,701
1,439,399 1,433,883 5,516
42,000 41,473 527
4,862,285 4,761,368 4,614,327 147,041
(303,020) (202,103) (139,920) 62,183
(78,000) (78,917) (78,917)
(78,000) (78,917) (78,917) __
(381,020) $ (281,020) (218,837) $ 62,183
923,562
$ 704,725
See notes to the financial statements.
-41-
TOWN OF SOUTHOLD
COMMUNITY PRESERVATION FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Year ended December 31, 2009
REVENUES
Non-property tax items
Use of money and property
State aid
Federal Aid
Total Revenues
Variance
Positive
(Negative)
Original Final
Budget Budget Actual
$ 3,600,000 $ 3,600,000 $ 3,040,294 $ (559,706)
75,000 87,159 33,091 (54,068)
322,500 321,415 (321,415)
1,996,822 1,996,822
3,997,500 4,008,574 5,070,207 1,061,633
EXPENDITURES
General govemment support 82,000 89,000
Home and community services 1,261,902 20,253,817
Employee benefits 18,693 18,693
Debt service - principal and interest 2,634,905 2,647,086
Total Expenditures
Excess of Revenues
Over Expenditures
Other Financing Sources
Debt proceeds
Total Other Financing Uses
13,421 75,579
3,242,792 17,011,025
11,698 6,995
1,331,713 1,315,373
3,997,500 23,008,596 4,599,624 18,408,972
-0- (19,000,022) 470,583 19,470,605
19,000,000 5,000,000 (14,000,000)
-0- 19,000,000 5,000,000 (14,000,000)
Net Change in Fund Balance $ -0- $
Fund Balance at Beginning of Year
Fund Balance at End of Year
(22) 5,470,583
2,674,872
$ 8,145,455
$ 5,470,605
See notes to the financial statements.
-42-
TOWN OF SOUTHOLD
POST-EMPLOYMENT BENEFITS HEALTHCARE COSTS - SCHEDULE OF FUNDING
PROGRESS
Year ended December 31, 2009
Unfunded
Liability as a
Actuarial Actuarial Actuarial Percentage of
Valuation Date Value of Accrued Unfunded Covered
Janua~/1, Assets Liability Liability Funded Ratio Covered Payroll Payroll
2009 $ -0- $ 62,493,280 $ 62,493,280 0.00% $14,754,952 423.54%
2008 -0- 45,806,258 45,806,258 0.00% 13,830,871 331.19%
OTHER SUPPLEMENTARY
INFORMATION
TOWN OF SOUTHOLD
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
December 31, 2009
ASSETS
Cash and investments
Accounts receivable
Due from other funds
State and federal receivables
Prepaids
General Fund
Part Town
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable
Tax anticipation notes payable
Deferred revenue
$ 485,377
71,291
248,621
23,045
19,352
East-West Fire Southold Fishers Solid Waste
Special Protection Wastewater Island Sewer Management
Grant Distdct Distdct Distdct District
$ 12,500
$ 27,655
155,581
$ 255,425
1,183
Total Assets $ 847,686 $ 12,500 $ 183,236 $ 256,608
$ 39,314
263,241
$ 15,186
155,581
$ 12,500
Total Liabilities 302,555 12,500 170,767
19,352
119,000
406,779
6,900
5,569
FUND BALANCE
Fund Balance - Reserved:
Encumbrances
Prepaids
Fund Balance - Unreserved:
Designated - ensuing year's budget
Undesignated
Total Fund Balance (Deficit)
$ 1,043
1,043
Total Liabilities and Fund Balance
232,100
23,465
545,131 -0- 12,469 255,565
$ 847,686 $ 12,500 $ 183,236 $ 256,608
$ 37,453
1,844
1,477
$ 40,774
$ 3,233
3,233
37,541
37,541
$ 40,774
$ 23,806
96,312
670,232
892
18,290
$ 809,532
$ 195,349
300,000
520,756
1,016,105
17,753
18,290
(242,616)
(206,573)
$ 809,532
Totals
$ 829,716
169,447
1,077,094
36,437
37,642
$ 2,150,336
$ 265,582
300,000
940,621
1,506,203
17,753
37,642
358,000
230,738
644,133
$ 2,150,336
-44-
TOWN OF SOUTHOLD
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - NON-MAJOR GOVERNMENTAL FUNDS
For the year ended December 31, 2009
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
State aid
Federal aid
EXPENDITURES
General govemment support
Public safety
Public 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 District District
$ 713,928
528
276,999
522,955
2,192
6,275
134
126,067
5,934
1,655,012
45,487
501,852
7,370
746,204
563,232
$ 62,040
62,040
62,040
$ 589,163 $ 4,500
119
1,050
588 637
Fishers
Island Sewer
Distdct
$ 2,422
35,231
114
589,870 6,187 37,767
592,182
13,452
17,862
2,250
243 1,365
1,864,145 62,040 592,182 2,493 32,679.
(209,133) (2,312) 3,694 5,088
(4,031 )
-0- -0- -0- (4,031 )
(209,133) (2,312) 3,694 1,057
754,264 14,781 251,871 36,484
$ 545,131 $ -0- $ 12,469 $ 255,565 $ 37,541
Solid waste
Management
District
$ 1,507,540
3O6
1,546,489
3,848
178,982
287,509
19,701
3,544,375
2,868
2,329,315
600,803
427,900
229,367
3,590,253
(45,878)
(135,000)
(135,000)
(180,878)
(25,695)
$ (206,573)
Totals
$ 2,815,131
3,375
276,999
2,105,725
7,379
185,257
287,643
145,768
67,974
5,895,251
61,807
1,094,034
7,370
3,155,421
1,164,035
430,150
230,975
6,143,792
(248,541)
(139,031)
(139,031)
(387,572)
1,031,705
$ 644,133
Net Change in Fund Balance
Fund Balances at Beginning of Year
Fund Balances at End of Year
DISCRETELY PRESENTED COMPONENT UNITS
TOWN OF SOUTHOLD
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF NET ASSETS
December 31, 2009
ASSETS
Current Assets:
Cash and investments
Accounts receivable
Due from primary government
Due from other govemments
State and federal aid receivables
Prepaid charges and other assets
Total Current Assets
Non-Current Assets: Non-depreciable capital assets
Depreciable capital assets, net of depreciation
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities
Accrued interest payable
Due to other governments
Bond anticipation notes payable
Uneamed 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
Other post-employment benefits payable
Total Non-Current Liabilities
Total Liabilities
NET ASSETS
Investment in capital assets, net of related debt
Unrestricted
Total Net Assets
Fishers
Island Ferry
District
Fishers Island Cutchogue- Southold Orient~East Mattituck Odent
Waste Management New Suffolk Park Madon Park Park Mosquito
Distdct Park District District District Distdct Distdct
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Totals
$ 250,196 $ 893,614 $ 115,247
8,231
178,811 91,063 30,994
28,762
2,649
18,908 28,092
86,835 $ 3,171
75,101 8,615
433,846 $ 7,201 $ 1,790,110
8,231
109,659 19,073 513,316
28,762
2,649
47,000
487,557 1,012,769 146,241 161,936 11,786 543,505 26,274 2,390,068
41,717 517,263 101,198 588,849 432,985 511,341 2,193,353
14,822,185 2,349,263 18,943 211,597 977,385 15,178 18,394,551
14,863,902 2,866,526 120,141 800,446 432,985
15,351,459 3,879,295 266,382 962,382 d~,771
1,488,726 15,178. 20,587,904
2,032,231 41,452 22,977,972
103,662 5,803
28,831
3,098
850,000
178,811 91,063
30,994
2,963 1,535 34,926 199 149,088
292 29,123
3,098
90,000 940,000
75,101 8,615 109,659 19,073 513,316
150,000
47,664
1,358,968 99,964 30,994
78,064 10,150
2,100,000
172,896
97,100
2,369,996 -0- -0- -0- -0-
3,728,964 99,964 30,994 78,064 10,150
150,000
47,664
234,877 19,272 1,832,289
2,100,000
172,896
97,100
-0- -O- 2,369,996
234,877 19,272 4,202,285
11,763,902 3,860,286
(141,407) (80,955) 235,388
$ 11,622,495. $ 3,779,331 $ 235,388
868,913 1,488,726 17,981,827
15,405 434,621 308,628 22,180 793,860
$ 884,318 $ 434,621 $ 1,797,354 .~ 22,180 $ 18,775,687
TOWN OF SOUTHOLD
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF ACTIVITIES
Year ended December 31, 2009
REVENUES
Program revenues
Real property taxes
Other real property tax items
Interest earnings
State Aid
Federal Aid
Other
Total Revenues
EXPENSES
General government support
Public health
Transportation
Culture and recreation
Home and community services
Interest on debt
Fishers
Island Ferry
District
Changes in Net Assets
$ 2,268,912
590,000
120
1,093
4,043
225,078
80,120
3,169,366
190,461
3,099,568
18,748
100,706
Fishers Island Cutchogue- Southold
Waste Managemenl New Suffolk Park
Distdct Park District Distdct
(Unaudited) (Unaudited) (Unaudited)
Orient-East Mattituck Odent
Marion Park Park Mosquito
District Distdct District
(Unaudited) (Unaudited) (Unaudited)
33,408
399,800 $ 145,000 $ 315,000 $ 35,583
81 29 7
4,556 1,389 42,020 5
10,631
1,397
439,242 146,418
Totals
$ 2,302,320
$ 477,178 $ 70,000 2,032,561
97 334
3,904 90 53,057
50,000 54,043
225,078
29,150 121,298
357,020 46,226 560,329 70,090 4,788,691
191,501 341,616 37,943
520,197
190,461
75,585 75,585
3,099,568
344,065 933,873
520,197
4,475 105,181
Total Expenses 3,409,483 520,197 191,501 341,616 37,943 348,540 75,585 4,924,865
(240,117) (60,955) (45,083) 15,404 8,283 211,789 (5,495) (136,174)
11,862,612 3,860,286 280,471 868,914 426,338 1,585,565 27,675 18,911,861
Net Assets at Beginning of Year
Net Assets at End of Year
$11,622,495
$ 3,779,331 $ 235,388 $ 884,318 $ 434,621 $ 1,797,354. $ 22,180 $18,775,687
OTHER REPORTS
TOWN OF SOUTHOLD
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year ended December 31, 2009
Federal Grantor/Pass-through Grantod
Program or Cluster Title
U. S. Department of Housing and Urban Development
Federal
CFDA
Number
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
ARRA - Special Programs for the Aging - Title III, Part C-2
Home Delivered Meals
ARRA - Special Programs for the Aging - Title III, Part C-1
Home Congregate Meals
93.045
93.053
93.705
93.707
U.S. Department of Justice
Pass-through program from:
Suffolk County, New York
ARRA - Edward Byme Memorial Justice Assistance Grant
16.804
U.S. Department of Transportation
Pass-through program from:
New York State
State and Community Highway Safety
20.600
Pass-through program from:
New York State
Safety Incentive Grants for the Use of Seathelts
20.604
U.S. Department of Commerce
Direct program from:
National Oceanic and Atmospheric Administration
Coastal Zone Management Administration Award
11.419
U.S. Department of the Interior
Pass-through program from:
New York State
Clean Vessel Act
15.616
Federal
Expenditures
62,040
53,148
27,792
22,837
11,194
12,000
6,414
3,214
1,996,822
20,000
TOWN OF SOUTHOLD
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year ended December 31,2009
Federal GrantodPass-through Grantod
Program or Cluster Title
Federal
CFDA
Number
U.S. Department of Homeland Security
Pass-through program from:
New York State and Suffolk County
Pre-Disaster Mitigation
97.047
Pass-through program from:
New York State and Suffolk County
Urban Areas Security Incentive
97.008
Pass-through program from:
New York State and Suffolk County
Homeland Security Grant Program
97.067
Total expenditures of federal awards
Federal
Expenditures
10,665
641
3,260
$ 2.230.027
See accompanying note to schedule of expenditures of federal awards
-49-
TOWN OF SOUTHOLD
NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
December 31, 2009
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 Slates, Local Governments, and
Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ fi'om amounts
presented in, or used in the preparation of, the basic financial statements.
-50-
CERTIFIED PUBLIC ACCOUNTANTS
REPORT ON INTERNAL OONTROL OVER FINANOIAL REPORTING
AND ON OOMPLIANOE AND OTHER MA'FI-ERS BASED ON AN AUDIT OF FINANOIAL STATEMENT8
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Supervisor and Town Board
Town of Southold
Southold, New York
We have audited the financial statements of the govemmental 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, 2009, which coIlecfively compdse the Town of Southold, New York's basic financial
statements and have issued our report thereon dated September 28, 2010. 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 unit represents
33.2%, 38.1% and 33.8%, respectively, of the assets, net assets and revenues of the aggregate discretely
presented component units. The financial statements of the Fishers Island Fern/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 was not audited in accordance with Government Auditing Standards.
Internal Control Over Financial Reportin.q
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 deficiency in internal control 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 and correct
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control such that there is a reasonable possibility that a material misstatement of the entity's financial
statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over financial
reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any
deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined
above.
PERSONAL SERVICE.TRUSTED ADVICE.
ALBRECHT, VIGGIANQ, ZURECK & COMPANY, RC.
245 PARK AVENUE, 24TH FLOOR 25 SUFFOLK COURT
NEWYORK, NY 10167 HAUPPAUGE, NY11788 3715
T:212.7724075 T: 631.434 7500 F:631.4349518
-51- www avz.com
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town of Southold, New York's financial statements
are free of material 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 September 28, 2010.
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
September 28, 2010
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CERTIFIED PUBLIC ACCOUNTANTS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO
EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER
COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Honorable Supe~isor 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) Cimular A-133 Compliance Supplement that are
applicable to each of its major federal programs for the year ended December 31,2009. Town of Southold, New
York's major federal programs are identified in the summary of auditor's results section of the accompanying
schedule of findings and questioned costs. Compliance with the requirements of laws, regula~ns, contracts, and
grants applicable to each of its major federal programs is the responsibility of Town of Southold, New York's
management. Our responsibility is to express an opinion on Town of Southold, Now 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 Govemment Auditing Standards,
issued by the Comptroller General of the United States; and OMB Circular 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 occurred.
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 in 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 matedal respects, with the requirements referred
to above that are applicable to each of its major federal programs for the year ended December 31, 2009.
However, the results of our auditing procedures disclosed instances of noncompliance with those requirements,
which are required to be reported in accordance with OMB Circular A-133 and which are described in the
accompanying schedule of findings and questioned costs as items 2009-01.
Intemal Controls Over Compliance
Management of Town of Southotd, 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 intemal control
over compliance with the requirements that could have a direct and matedal 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.
PERSONAL SERVICE. TRUSTED ADVICE.
ALBRECHT, VIGGIANO, ZURECK & COMPANY, PC
245 PARK AVENUE, 24TH FLOOR 25 SUFFOLK COURT
NEWYORK, NY 10167 HAUPPAUGE, NY11788-3715
T:2127924075 T:631 4349500 F:631 434.9518
WWW avz corn
A deficiency in internal control over compliance exists when the design or operation of a control over compliance
does not allow management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, noncompliance with a type of ceompliance requirement of a federal program on a timely
basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in
internal control over compliance, such that there is a reasonable possibility that material noncompliance with a
type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely
basis.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in intemal control over compliance that might be
deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in intemal
control over compliance that we consider to be material weaknesses, as defined above. However, we identified
certain deficiencies in internal control over compliance that we consider to be significant deficiencies as described
in the accompanying schedule of findings and questioned costs as item 2009-01. A significant deficiency in
internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over
compliance with a type of compliance requirement of a federal program that is less severe than a material
weakness in internal control over compliance, yet important enough to merit attention by those charged with
governance.
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 the response.
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
September 28, 2010
TOWN OF SOUTHOLD
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year ended December 31,2009
SUMMARY OF AUDIT RESULTS
1. The auditors' report expresses an unqualified opinion on the basic financial statements of the Town of
Southold.
No significant deficiencies in intemal 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 MA'I-I'ERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS".
3. No instances of noncompliance matedal to the financial statements of the Town of Southold were
disclosed during the audit.
44
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 were:
CFDA Number
Name of Federal Pro.qram 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, 2009
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
2009-01 NO FORMAL WRI'I-FEN OFFER TO PROPERTY OWNER
Criteria
A written offer letter of the appraised value was not made to the property owner.
Condition
It was noted that a formal offer letter was not sent to the property owner.
Effect
The appraised value of the property should be made know to the property owner to ensure that they are
receiving reasonable compensation.
Recommendation
The Town should ensure that property owners are notified in writing what the offer price is for their property.
Questioned Cost
Unknown
Manaqement's Response
The Town has a system in place to ensure that formal written offer letters are made to the property owners, In
this particular case, the Town had been in negotiations with the property owner for a long period of time and
when an amount was agreed on, the purchase went into contract where the property owner and the Town
agreed on the purchase price.
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TOWN OF SOUTHOLD
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year ended December 31,2009
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
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
Criteda
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. It was noted that a review appraisal was not performed.
Recommendation
The Town should obtain a review appraisal for appraisals performed to determine if the amount appraised is
reasonable and accurate.
Current Status
The current grant agreement for the property pumhased did not require a review appraisal to be performed.
The Town was in compliance with all of the guidelines relating to this matter in the current grant agreement.
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