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HomeMy WebLinkAbout2010All Numbers in This Report Have Been Rounded To The Nearest Dollar ANNUAL FINANCIAL REPORT UPDATE DOCUMENT For The FIRE DISTRICT of Cutchogue County of Suffolk For the Fiscal Year Ended 12/31/2010 AUTHORIZATION ARTICLE 3, SECTION 30 of the GENERAL MUNICPAL LAW: 1. ***Every Municipal Corporation *** shall annually make a report of its financial condition to the Comptroller. Such report shall be made by the Chief Fiscal Officer of such Municipal Corporation *** 5. All reports shall be certified by the officer making the same and shall be filed with the Comptroller *** It shall be the duty of the incumbent officer at the time such reports are required to be filed with the Comptroller to file such report *** State of NEW YORK Office of The State Comptroller Division of Local Government and School Accountability Albany, New York 12236 Page 1 FIRE DISTRICT OF Cutchogue *** FINANCIAL SECTION *** Financial Information for the following funds and account groups are included in the Annual Financial Report filed by your government for the fiscal year ended 2009 and has been used by the OSC as the basis for preparing this update document for the fiscal year ended 2010: (A) GENERAL (K) GENERAL FIXED ASSETS (R) Reserve (TA) AGENCY (VV) GENERAL LONG-TERM DEBT All amounts included in this update document for 2009 represent data filed by your government with OSC as reviewed and adjusted where necessary. *** ARRA SECTION *** The American Recovery and Reinvestment Act (ARRA) section of your Annual Financial Report is designed to report revenues and expenditures of federal stimulus money for the current fiscal year ended. *** SUPPLEMENTAL SECTION *** The Supplemental Section includes the following sections: 1 ) Statement of Indebtedness 2) Schedule of Time Deposits and Investments 3) Bank Reconciliation 4) Local Government Questionnaire 5) Schedule of Employee and Retiree Benefits 6) Schedule of Energy Costs and Consumption 7) Schedule of Other Post Employment Benefits (OPEB) All numbers in this report will be rounded to the nearest dollar. Page 2 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 (A) GENERAL Balance Sheet Assets Cash Cash In Time Deposits TOTAL Cash State & Federal, Other TOTAL State And Federal Aid Receivables Cash~ Special Reserves Cash In Time Deposits~ Spec Res TOTAL Restricted Assets TOTAL Assets 281,362 A200 343,237 A201 281,362 343,237 A410 0 0 1,706,433 A230 1,636,917 A231 1,706,433 t 1636,917 1,987,795 1,980,154 Page 3 OSC Municipality Code 471179002500 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 (A) GENERAL Balance Sheet Liabilities Accounts Payable TOTAL Accounts Payable Accrued Liabilities TOTAL Accrued Liabilities Other Liabilities Additional Description Retained Percentages, Contracts Payable TOTAL Other Liabilities TOTAL Liabilities Reserve For Encumbrances TOTAL Reserve For Encumbrances Capital Reserve TOTAL Special Reserves Unreserved Fund Balance Appropriated TOTAL Unreserved Fund Balance - Appropriated Unreserved Fund Balance Unappropriated TOTAL Unreserved Fund Balance - Unappropriated TOTAL Fund Equity TOTAL Liabilities And Fund Equity 27,353 A600 117,050 27,353 117,050 16,500 A601 17,000 16,500 17,000 A688 13,752 0 13,752 43,853 147,802 A821 48,617 0 48,617 1,706,433 A878 1,589,445 1,706,433 1,589,445 100,000 A910 125,000 100,000 125,000 137,509 A911 69,290 137,509 69,290 1,943,942 1,832,352 1,987,795 1,980,154 Page 4 OSC Municipality Code 471179002500 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 (A) GENERAL Results of Operation Revenues Real Property Taxes TOTAL Real Property Taxes Interest And Earnings Rental of Real Property TOTAL Use of Money And Property Sales of Real Property Insurance Recoveries TOTAL Sale of Property And Compensation For Loss Refunds of Prior YeaCs Expenditures Grants From Local Governments Unclassified (specify) Additional Description FOIA request TOTAL Miscellaneous Local Sources TOTAL Revenues TOTAL Detail Revenues And Other Sources 883,612 A1001 991,050 883,612 991,050 31.568 A2401 11,779 75 A2410 31,643 11,779 A2660 A2680 765 765 677 A2701 A2706 2 A2770 5 679 5 916,699 %002,834 916,699 1,002,834 Page 5 OSC Municipality Code 471179002500 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 (A) GENERAL Results of Operation Expenditures Payment of Mta Payroll Tax,contr Expend TOTAL Payment of Mta Payroll Tax TOTAL General Government Support Fire, Pets Serv Fire, Equip & Cap Outlay Fire, Contr Expend TOTAL Fire TOTAL Public Safety State Retirement System Local Pension Fund, Empl Bnffs Social Security, Employer Cont Worker's Compensation, Empl Bnfts Unemployment Insurance, Empl Bnfts Disability Insurance, Empl Bnffs Hospital & Medical (dental) Ins, Empl Bnff EdPCode :i : 2010 TOTAL Employee Benefits TOTAL Expenditures TOTAL Detail Expenditures And Other Uses 556 A19804 685 556 685 566 688 194,223 A34101 201,520 138,827 A34102 274,167 350,510 A34104 361,856 683,660 837,543 683,560 837,543 5,463 A90108 11,945 174,612 A90258 201,617 14,694 A90308 15,416 35,415 A90408 36,861 967 A90508 1,190 675 A90558 709 7,825 A90608 8,458 239,651 276,196 923,767 1,114,424 923,767 1,114,424 Page 6 OSC Municipality Code 471179002500 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 (A) GENERAL Changes in Fund Equity ANALYSIS OF CHANGES IN FUND EQUITY Fund Equity-Beginning of Year Restated Fund Equity - Beg of Year ADD - REVENUES AND OTHER SOURCES DEDUCT - EXPENDITURES AND OTHER USES Fund Equity-End of Year 1,951,010 A8021 1,943,942 1,951,010 A8022 1,943,942 916,699 1,002,834 923,767 1,114,424 1,943,942 A8029 1,832,352 Page 7 OSC Municipality Code 471179002500 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 (A) GENERAL Budget Summary ~_~od~, < 2010 i EdpC~ [ Estimated Revenues Est Rev - Real Property Taxes Est Rev - Use of Money And Property TOTAL Estimated Revenues Appropriated Reserve TOTAL Estimated Other Sources TOTAL Estimated Revenues And Other Sources 991,050 A1049N 7,500 A2499N 998,550 100,000 A511N 100,000 1,098,850 2011 1,020,440 2,000 1,022,440 125,000 t25,000 1,147,440 Page 8 OSC Municipality Code 471179002500 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 (A) GENERAL Budget Summary ..... , , 2-o- J~ E i Appropriations App - Public Safety App - Employee Benefits App - Debt Service TOTAL Appropriations App - Interfund Transfer TOTAL Other Uses TOTAL Appropriations And Other Uses 726,350 A3999N 806,090 272,200 A9199N 291,350 0 A9899N 998,550 1,097,440 100,000 A9999N 50,000 100,000 50,000 t,098,550 1,147,440 Page 9 OSC Municipality Code 471179002500 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 Balance Sheet Page 10 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 Balance Sheet Page 11 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 Balance Sheet Page 12 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 Balance Sheet ~C ~d 2009 E~,...ode 20!0 Page 13 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 Results of Operation 2010 Page 14 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 Results of Operation Page 15 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 (R) Reserve Changes in Fund Equity ~-~ _~__:-:, ~"-~ ! ~ -:': -. ~ ~9 -i~c~0d~~ ~i)i0 ANALYSIS OF CHANGES IN FUND EQUITY Fund Equity - Beginning of Year R8021 Restated Fund Equity - Beg of Year R8022 Fund Equity - End of Year R8029 Page 16 OSC Municipality Code 471179002500 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 (TA) AGENCY Balance Sheet Assets Service Award Program Assets TOTAL Investments TOTAL Assets 702,802 TA461 658,297 702,802 658,297 702,802 658,297 Page 17 OSC Municipality Code 471179002500 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 (TA) AGENCY Balance Sheet Liabilities Service Awards TOTAL Agency Liabilities TOTAL Liabilities TOTAL Liabilities And Fund Equity 702,802 TA13 658,297 702,802 658,297 702,802 658,297 702,802 658,297 Page 18 OSC Municipality Code 471179002500 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 Balance Sheet Page 19 Cutchogue FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2010 Balance Sheet Page 20 Cutchogue FIRE DISTRICT Financial Comments For the Fiscal Year Ending 2010 Page 21 Cutchogue FIRE DISTRICT Statement of Indebtedness For the Fiscal Year Ending 2010 Page 22 Cutchogue FIRE DISTRICT Schedule of Time Deposits and Investments For the Fiscal Year Ending 2010 CASH: On Hand Demand Deposits Time Deposits Total COLLATERAL: - FDIC Insurance Collaterelized with securities held in possession of municipality or its agent Total EDP Code Amount 9Z2001 9Z2011 $2,010,594.00 9Z2021 $2,010,594.00 9Z2014 $250,000.00 9Z2014A $1,848,625.00 $2,098,625.00 INVESTMENTS: - Securities (450) Book Value (cost) Market Value at Balance Sheet Date Collateralized with securities held in possession of municipality or its agent 9Z4501 9Z4502 9Z4504A - Repumhase Agreements (451) Book Value (cost) Market Value at Balance Sheet Date Collateralized with securities held in possession of municipality or its agent 9Z4511 9Z4512 9Z4514A Page 23 OSC Municipality Code 471179002500 Cutchogue FIRE DISTRICT Bank Reconciliation For the Fiscal Year Ending 2010 Include All Checking, Savings and C.D. Accounts Bank Account Number ..... -2534 ..... -2591 ..... -2609 ..... -2617 Bank Balance $54,663 $372,450 $335,302 $1,248,179 TotalA~usted Bank Balance Pe~y Cash A~ustments Total Cash Total Cash Balance All Funds * Must be equal Add: Less: Deposit Outstanding In Transit Checks $83,744 $130,489 $100,000 $0 $0 $0 $0 $83,744 9ZCASH 9ZCASHB * Adjusted Bank Balance $7,918 $472,450 $335,302 $1,164,435 $1,980,105 $.00 $49.00 $1,980,154 $1,980,154 Page 24 OSC Municipality Code 471179002500 Cutchogue FIRE DISTRICT Fire District Questionnaire For the Fiscal Year Ending 2010 1) Has your district adopted a written precurement prolicy and is it complied with? 2) Has your district contracted to have an independent audit of its financial statements? If not, has the Board of Fire Commissioners performed an internal audit of the Treasurer's records and reports? 3) Does your district have a written travel policy and is it complied with? 4) Are monthly bank reconciliations performed? 5) What is your district's statutory spending limitation margin (amount) for the next fiscal 6) Does your district have a Length of Service Award Program (LOSAP) for volunteer firefighters? If so, how are the LOSAP funds invested? Marketable Securities Annuities Life Insurance Other (describe) 7) Has your Fire District adopted an investment policy as required by General Municipal Law, Section 39? Response Y Y Y Y $1,339,660 N Y Y Y Page 25 Cutchogue FIRE DISTRICT Employee and Retiree Benefits For the Fiscal Year Ending 2010 9010~ State Retirement System 9015~ Police and Fire Retirement 9025~ 9030~ 9040~ Total Full Ti~e Employees:/I 13~0~ Total Part Time Employees: Account Description Total # of Full Code Expenditures Time Employees (All Funds) $11,9~5'0l Local Pension Fund $201,617.0¢ Social Security $15,416,0C Worker's Compensation $36,861.0( Insurance 9045~ Life Insurance 9050~ U nernPloyrn~n{ in ~u-ra nce $1,190,0 9055~ ..... Disability Insurance $7090( 9060~ Hospital and Medical $8,458.0( (Dental) Insurance 9070~ Union Welfare Benefits ~085~ Supplemental Benefit Payment to Disabled Fire Fighters 9189( Other Employee Benefits Total Computed Total From Financial :Section (comparative purposes only) Time Employees 2 3 1( 3 3 # of Retirees $278,196.00! $276;196:()C~ Page 26 OSC Municipality 471179002500 Cutchogue FIRE DISTRICT Energy Costs and Consumption For the Fiscal Year Ending 2010 Energy Type iDi~Se~ Fuel !Fuel Oil iNatural Gas !Electricity Ceai Total Total Volume Units Of Alternative Expenditures Measure Units Of Measure $13.465 $7.474 $8.723 $24.2121 5.154 gaHons 2,805 gallons gallons 5.790 cubic ~et 128.127 kilowa~s Page 27 OSC Municipality 471179002500 Cutchogue FIRE DISTRtCT Schedule of Other Post Employment Benefits (OPEB) For the Fiscal Year Ending 2010 Annual OPEB Cost and Net OPEB Obligation Type of Other Post Employment Benefits Plan Annual Required Contribution(ARC) Interest on Net OPEB Obligation Adjustment to Annual Required Contribution Annual OPEB Expense Less: Actual Contribution Made Increase in Net OPEB Obligation Net OPEB Obligation - beginning of year Net OPEB Obligation - end of year Total Other Post Employment Benefits as reported in Accounts 683 in Financial Section, Current Fiscal Year Percentage of Annual OPEB Cost Contributed (Actual Contribution Made/Annual OPEB Cost) Funded Status and Funding Process Actuarial Accrued Liability(AAL) Less: Actuarial Value of Plan Assets Unfunded Actuarial Accrued Liability(UAAL) Funded Ratio(Actuarial Value of Plan Assets/AAL) Annual Covered Payroll (of active employees covered by the plan) UAAL as Percentage of Annual Covered Payroll Other OPEB Information Date of most recent actuarial valuation Actuarial method used Assumed rate of return on investments discount rate Amortization period of UAAL(in years) .00% Page 28 OSC Municipality 471179002500 FIRE DISTRICT DEMOGRAPHICS Postal or Mailing Address: ~260 i~ew Suffolk Road Street Address or PO Box (631) 734-6907 Fire District Telephone Number Itu ffdt teas@ optonline.net Official Email Address Physical Address: (If Different From Postal Address) ~Cutchogue City 1(631) 734-7079 Fire District Fax Number 'IN¥ I t93s State Zip ~wvw.cutchogueflredept,org Website I I Street Address City BOARD DEMOGRAPHICS CHIEF FISCAL OFFICER State Zip tPeter J. Zwerlein Name ~60 New Suffolk Road Street Address or PO Box (63 ) 734-6907 1 Telephone Number Icutfdtreas@optonline.net Email Address Title ICutcho~ue City (631) 734-7079 Fax Number I 12/31/2011 Term End Date INY 111935 State Zip CHAIRMAN OF THE BOARD ~oseph S. Zuhoski, Jr. Name ~60 New Suffolk Road Street Address or PO Box I(631 )734-6907 Telephone Number lcutfd@optonline,net Email Address ]Commissioner Title ICutchogue City 1(631 )734-7079 Fax Number I 12/31/2011 Term End Date tNY 111935 State Zip I, [Peter J, Zwerlein hereby certify that I am the Chief Fiscal Officer of the ICutchogue Fire District , and that the information provided in the annual financial report of the ICutchogce Fire District , for the fiscal year ended 112/31/2010 , is true and correct to the best of my knowledge and belief, By entering the personal identification number assigned by the Office of the State Comptroller to me as the Chief Fiscal Officer cf the ~Cutchogue Fire District , and adopted by me as my signature for use in conjunction with the filing of the [Cutchogue Fire District 's annual financial report, I am evidencing my express intent to authenticate my certification of the jCutchogue Fire District 's annual financial report report for the fiscal year ended r12/31/2010 and filed by means of electronic data transmission. I I ........ I 02/25/2011 Name of Report Preparer Personal Identification Number Date if different than Chief Fiscal Officer of Chief Fiscal Officer Cutchogue Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Summary of significant accountin~ oolicies: The Annual Financial Report Update Document (AUD) of the Cutchogue Fire District (the District), as of and for the year ended December 31, 2010 has been prepared in conformity with the modified accrual regulatory basis of accounting as prescribed by the State Comptroller's Office, which is a comprehensive basis of accounting other than U.S. generally accepted acceunfing principles. Financial reporting entity: The District is a governmental entity that provides fire protection to the local commllnity. The District receives most of its funding from property taxes. The District is governed by laws of the State of New York. The Board of Fire Commissioners is the legislative body responsible for the overal] operafon of the District. All activities and functions performed for the District are its direct responsibility. The Treasurer serves as chief fiscal officer of the District. Basis of presentation: The AUD provides information about the District's funds, including fiduciary funds. The accounts of the District arc organized on the basis of funds, each of which is considered a separate ax;counting entity. The operations of each fund are segregated for the purpose of can'ying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. The following fund types are used: Governmental: General Fund The General Fund is the principal operating fund of the District and is used to account for all financial resources except those required to be accounted for in another fund. Debt service is also accounted for in the General Fund. Equipment Reserve Fund The Equipment Reserve Fund is used to account for and report financial resources to be used for the acquisition of equipment needed by the District. -29- Cutchogue Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Summary of significant accounting policies (continued): Governmental (continued): Building Reserve Fund The Building Reserve Fund is used to account for and report financial resources to be used for the acquisition, construction or renovation of major capital facilities. For AUD purposes, these funds are all combined and shown as the General Fund. Fiduciar~ Fund Fiduciary funds are used to account for assets held by the District in a trustee or custodial capacity. The District utilizes the following fund: Agency Fund The Agency Fund is used to account for aad report assets held by the District in the capacity of trustee, custodian or agent for individuals. Agency funds are custodial in nature and do not involve measurement of results of operations. Basis of accounting: The accompanying AUD has been prepared on the modified accrual regulatory basis of accounting using the current financial resources measurement focus. Revenues are recognized when measurable and available. "Available" means collectible within the current period or within 60 days after year end. Expenditures are generally recognized under the modified accrual regulatory basis of accounting when the related liability is incurred. The exception to this general nde is that principal and interest on general obligation long-term debt, if any, is recognized when due. Cash and cash equivalents: Cash and cash equivalents include demand deposits and temporary investments with ofigina/maturities of three months or less from the date of acquisition. Interfund transfers: The operations of the District give rise to certain Iransactious between funds, including transfers of expenditures and revenues to provide services and construct assets. This is either by budget, Board resolution, permissive referendum or mandatory referendum. -30- Cutchogue Fire District NOTES TO ANNUAL ~'fNANCIAL REPORT LrPDATE DOCUMENT Summary of significant accounting policies (continued): Eneumbranees: Encumbrance accounting is used for budget control and monitoring purposes and is reported as part of the governmental funds. Under this method, purchase orders, contracts and other commltJnents for the expenditures of monies are recorded to reserve applicable appropriations. Outstanding encumbrances as of year end are presented as reservations of fund balance and do not represent expenditures or liabilities. These commitments will be honored in the subsequent period. Related expenditures are recognized at that time, as the liability is incurred or the commitment is paid. l~und balance - reserves and designations: Portions of fund balance are reserved or designated to either satisfy legal restrictions or to plan for future expenditures. The following is a description of the reserves utilized by the District: Reserve for equipment - used for the acquisition of equipmem. Reserve for building - used for the acquisition, construction or renovation of major capital facilities. Reserve for encumbrances - represents the mount of outstanding encumbrances at the end of the fiscal year. Real property taxes: All real property assessmems are made by the Town of Southold. Real property tax payments are due in two equal installments; the first half payable on December 1 (1/eh and levy date) preceding the year for which the same is levied and the second half payable May 10, with the first half payable without penalty to January 10 and the second half payable without penalty to May 31. After May 31, all taxes must be paid to Suffolk County Treasurer with a 5% penalty charge and interest at the rate of 1% per month from February 1. The Town of Southold Receiver of Taxes collects all real estate taxes for the District. The Town of Southold Receiver of Taxes distributes the tax collections to the District. All payments made to the District are made in the year for wlfich the tax has been levied. The Town of Southold Receiver of Taxes tums over uncollected items to the Suffolk County Treasurer who continues the collection of these Rems. Responsibility for the collection of unpaid taxes rests with Suffolk County. -31- $C0MPA~Y Cutchogue Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUM[ENT Summary of si~aificant aceountine nolicie~ (continued): Budgetary data: The District prepares aa operating budget for the General Fund each year. The budget is adopted by the Board of Fire Commissioners as its final budget for the coming year as it relates to total spending. The District can axijust the budget as needed by ~cansferring certain budgeted amounts between accounts. The budget is not subject to referendum. All budget appropriations lapse at the end of each year. Use of estimates: The preparation of the AUD in conformity with the modified accrual regulatory basis of accounting requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Deposits with f'mancial institutions and investmeutn: The District's inveslment policies are governed by state statutes and District po[icy. Resources must be deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks or trust companies located within the state. Permissible investments where the payment and interest are guaranteed by the United States of Americaand includes special time deposit accounts, certificates of deposit, obligations of the United States of America, obligations guaranteed by agencies of the United States of America and obligations of the State of New York. Collateral is requked for demand and time deposits and certificates of deposit not covered by FDIC insurance. Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The District's risk exposure can be categorized as follows: 1. Insured by FDIC insurance. 2. Collateralizec~ by securities held by the pledging financiai institution's trust department or agent, but not in the District's name. 3. Collateralized by securities held by the pledging financial institution, but not in the District's name. 4. Uncollateraiized. The District's deposits held by the banks are categorized, based on the above criteria, as follows: -32- $COMP)3~Y Cutchogue Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Deposits with financial institutions and investments (continued): Category Amount 1. $ 250,000 2. 3. 1,848,625 4. Total The District did not have any investments at year end or during the year. Consequently, the District was not exposed to any material interest rate risk. Pension Plan: Plan description: The District participates in the New York State and Local Employees' Retirement System (ERS). This is a cost-sharing, multiple-employer retirement system. The System provides retirement benefits as well as death and disability benefits. Obligations 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 aclmlnlstrative head of the System. The Comptroller shall adopt and may amend rules and regulations for the administration and transa~on of the business of the System and for the custody and control of their funds. The System issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to the New York State and Local Employees' Retirement Systems, 110 State Street, Albany, New York 12244. Fundin~ nolicv: The System is non-contributory except for employees who joined the ERS after July 27, 1976 who contribute 3% of their salary for the first 10 years of membership and employees who joined on or alter January 1,2010 (ERS) who generally conU'ibute 3% of their salary for the entire length of service. Under the authority of the NYSRSSL, the Comptroller annually certifies the acmarially determined rates expressed used in computing the employers' contributions based on salaries paid during the System's fiscal year ending March 31. Contributions for the current year and two preceding years were equal to 100% of the contributions required, and were as follows: -33- ~COMPA~Y Cutchogue Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Pension Plan (continued): Funding oolicv (continued): Year Ending December 31~ Amolrut 2010 $11,945 2009 $ 5,463 2008 $ 7,724 Chapter 260 of the Laws of 2004 of the State of New York was enacted that allows local employers to bond or amortize a portion of their retirement bill for up to 10 years in accordance with the following schedule: For State Fiscal Year (SFY) 201M-05, the amount in excess of 7.00% of employees' covered pensionable salaries, with the first payment of those pension costs not due until the fiscal year succeeding that fiscal year in which the bonding/amortization was instituted. For SFY 2005-06, the amount in excess of 9.50% of employees' covered pensionable salaries. For SFY 2007-08, the amount in excess of 10.50% of employees' covered pension salaries. This law requires participating employers to make payments on a current basis, while bonding or amortizing existing unpaid amounts relating to the System's fiscal years ending March 31, 2005 through 2008. Chapter 57 of the Laws of 2010 of the State of New York was enacted that allows local employers to amortize a portion of their retirement bill for 10 years in accordance with the following stipulations: For SFY 2010-11, the amount in excess of the graded rate of 9.50% of employees covered pensionable salaries, with the first payment of those pension costs not due until the fiscal year succeeding that fiscal year in which the amortization was instituted. For subsequent SFY's, the graded rote will increase or decrease by up to 1.00% depending on the gap between the increase or decrease in the System's average rate and the previous graded rate. -34- Cutchogue Fire District NOTES TO ANNUAL I~NANCIAL REPORT UPDATE DOCUMENT Pension Plan {continued): Funding poUc~ (continued): For subsequent SFY's in which the System's average rates are lower than the graded rates, the employer will be required to pay the graded rate. Any additional contributions made will first be used to pay off existing amortizations and then any excess will be deposited into a reserve account and will be used to offset furore increases in contribution rates. This law requires participating employers to make payments on a current basis, while amortizing existing unpaid amounts relating to the System's fiscal years when the local employer opts to participate in the program. The total unpaid liability at the end of the fiscal year was $-0-. Length of Service Award Prom'am fLOSA}'): The District's AUD is for the year ended December 31, 2010. However, the information contained in this note is based on information for the LOSAP for the plan year ending on February 28, 2011, which is the most recent plan year for which complete information is available. The funding detail is for the period March 1, 2009 through February 28, 2010. The District es~blished a defined benefit LOSAP for the active volunteer firefighters of the District. The program took effect on March 1, 1993. The program was established pursuant to Article l l-A of the General Municipal Law. The program provides municipally funded pension-like benefits to facilitate the recruitment and retention of active volunteer firefighters. The District is the sponsor of the program. Program descriotion: Participation, vesting and service credit: Active volunteer firefighters who have reached the age of 18 and who have completed their probationary period are eligible to participate in the program. Participants acquire a nonfoffeitable right to a service award after being credited with 5 years of firefighting service or upon attaining the program's entitlement age. The program's entitlement age is age 65. In general, an active volunteer facfighter is credited with a year of firefighfing service for each calendar year aiter the establishment of the program in which he or she accumulates 50 points. Points are granted for the performance of certain activities in accordance with a system established by the sponsor on the basis of a statutory list of activities and point values. A participant may also receive credit for 5 years of firefighting service rendered prior to thc establishment of the program. -35- Cutchogue Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCLFM~NT Length of Service Award Program (LOSAP) (continued): Program description (continued): Benefits: A participant's benefit under the program is the actuarial equivalent of a monthly payment for life equal to $20 muitiplied by the person's total number of years of firefighting service. The number of years of firefighting service used to compute the benefit cannot exceed 30. Benefits are not payable until the first day of the month coincident with or following the attainment of age 65 and completion of 1 year of plan participation. Except in the case of disability or death, benefits are payable when a participant reaches entitlement age. The program provides statutorily mandated death and disability benefits. Fiduciary investment and control: Service credit is determined by the governing board of the sponsor, based on information certified to the governing board by each ftre company having members who participate in the program. Each fire company must maintain all required records on forms prescribed by the governing board. The governing board of the sponsor has retained and designated Volunteers Firemen's Insurance Services, Inc. (VFIS) to assist in the administration of the program; The designated program administrator's functions include providing basic annual adm/rdstration services as follows: a) providing participant enrollment forms b) providing an annual reminder letter with a review list for the current anniversary date c) preparation of Explanation of Plan Benefits d) calculation of Schedule of Benefits and costs annually e) participants' benefit calculation at time of severance or retirement f) Auxiliary Fund valuation and suggested deposit g) summary of required annual contribution h) annual actuarial review and recommended benefit enhancements Disbursements of program assets for the paymem of benefits or administrative expenses must be approved. The following is an explanation of the process for approving disbursements: -36- $C0~ANY Cutchoguc Fire District OTrS XO A UAL CtAr m PO tT UPOAT Length of Service Award Program (LOSAP) (continued): Payment of benefits: Entitlement benefits - VFIS prepares and submits to the plan sponsor a Verification of BenefiB statement and an ~nmlity Enrollment form for participants active at entitlement age and for vested participants upon termination from the plan. Following review for accuracy, the plan sponsor signs and returns the paperwork to VFIS antho~qTing VFIS to disburse entitlement banefits. Death benefits - Upon notification from the plan sponsor of a participanfs death, VFIS prepares a Verification of Benefits statement and a Lump-Sum Death Benefit form. Following review for accuracy, the plan sponsor signs and returns the paperwork accompanied by a death certificate to VFIS authorizing VFIS to disburse a death benefit. Disability benefits - Upon notification from the plan sponsor of a participant total and permanent disability, VFIS prepares a Verification of Benefits statement, a Physician Statement form and a Lump-Sum Disability Benefit form. Following review for accuracy, the plan sponsor signs and returns the paperwork authorizing VFIS to disburse a dimbility benefit. Payment of administrative expenses: 1. Per the executed Service Fee Agreement, the plan sponsor agrees to payment as contracted. Authority to invest program assets is vested in The Hartford Life Insurance Company. Subject to restrictions in the program document, program assets are invested in accordance with a statutory "prudent person" rule. The sponsor invested plan funds in a Group Annuity Contract with guarantees of both principal and interest. The sponsor is required to retain an actuary to determine the amount of sponsor's contributions to the plan. The actuary retained by the sponsor for this purpose is J'F Actuarial Services. Portions of the following information were derived from a report prepared by the actuary dated November 22, 2010. -37- $COM P/ Cutchogue Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Length of Service Award Prom'am (LOSAP) (continued): Program financial condition: Assets and Liabilities % of Total Actuarial present value of accrued benefits at February 28, 2010: Vested Non-vested Less assets available for benefits: Group Annuity Fixed Funds Total net assets available for benefits Total unfunded benefits 100% $651,307 $1,278,024 20,640 1298,664 651,307 647-357 Prior service cost: The unfunded liability is associated with the frozen initial I/ability that was established at March 1, 1993 for prior service costs. The initial liability was $731,356, of which $493,520 is still unpaid at this time. The prior service costs are being amortized over 30 years at a discount rate of 6.0%. Receipts and Disbursements Plan net assets, be~nning of year Changes during the year (increases/(decreases)): Plan contributions $174,612 Investment income earned 33,108 Change in fair market value of investments 2,267 Plan benefit withdrawals (241,060) Administrative and other fees/charges (3,188) Life insurance premium (14,608) $700,176 (48,869) Plan net assets, end of year $651.307 -38- $C0MPAN~ Cutchogue Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Length of Service Award Program (LOSAP) (continued): Program financial condition (continued): Contributions Amount of sponsor's contribution recommended by actuary $197.970 Amount of sponsor's actual contribution $174.612 Contributions paid in excess of recommended amount are for administration fees and other adjustments. Administration Fees Fees paid to designated program administrator ~ Flmding methodology and actuarial assumptions: Normal costs: The actuarial valuation methodology used by the actuary to determine the sponsors contribution is Entry Age Normal Frozen Initial Liab'flity. The assumptions used by the actuary to determine the sponsor's contribution and the actuarial present value of benefits are: Assumed rote of return on investment 6.00% Mortality tables used for: Pre-retirement U8400 Post-retirement U8400 Commitments and contingencies: Legal: The District is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets, injuries to employees, errors and omissions, natural disasters, etc. These risks are covered by commercial insurance purchased from independent third parties. Settled claims from these risks have not exceeded commercial insurance coverage. -39- d~ COlVlPAN7 Cutchogue Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Commitments and contingencies (continued): Encumbrances: As described in Note 1, encumbrances consist of purchase orders, contracts and other commitments. Even though unencumbered appropriations lapse at the end of the fiscal year, unfilled purchase orders of the current year are carried forward and the next year's appropriations are likewise encumbered. The District requires that fund balances be reserved at fiscal year end to report an mount likely to be expended from the next fiscal year's budget as a result of purchase orders, contracts and other commitments outstanding at December 31, 2010. Encumbrances outstanding for the General Fund and Building Reserve Fund as of December 31, 2010 are as follows. General Fund $14,897 Building Reserve Fund 33,720 Total encumbrances Construction commitments: The District entered into a construction contract during the fiscal year for the renovation and ~ebuilding of the District's parking lot. As of December 31, 2010, the District had outstanding construction contract costs totaling $33,720 that are included in the reserve for encumbrances. In addition, the District with-held $13,752 from contract payments as reminage. Rem/nage is calculated as 10% of the completed contract mount and is shown as "Rem/ned Percentages, Contracts Payable" on the District's AUD. New accounting standard: The Governmental Accounting Standards Board (GASB) has issued a new accounting statement, Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions", which the District will be required to implement for the year ending December 3i, 2011. This Statement is to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. This Statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds.