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Fishers Island Fire District
ANNUAL FINANCIAL REPORT
UPDATE DOCUMENT
December 31, 2010
C~COMPANY
TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT ......................................
ANNUAL FINANCIAL REPORT UPDATE DOCUMENT:
FINANCIAL SECTION ..............................................
SUPPLEMENTAL SECTION ..........................................
NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT ........
PAGE
A
1
18
25
~CO~IPANY
C/COMPANY
A PROI~ESSIONAL CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Board of Fire Commissioners
Fishers Island Fire District
Fishers Island, New York
We have audited the accompanying Annual Financial Report Update Document (Financial
Section) of Fishers Island Fire District, as of and for the years ended December 31, 2010 and
2009, as listed in the table of contents. This report is the responsibility of Fishers Island Fire
District's management. Our responsibility is to express an opinion on this report based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform oar audits to obtain reasonable assurance about whether the
Annual Financial Report Update Document is free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the Annual
Financial Report Update Document. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall
presentation. We believe that our audits provide a reasonable basis for our opinions.
As described more fully in Note 1, the Fishers Island Fire District prepares its Annual Financial
Report Update Document using accounting practices prescribed or permitted by the New York
State Office of the State Comptroller, which is a comprehensive basis of accounting other than
accounting principles generally accepted in the United States of America. The effects on the
Annual Financial Report Update Document of the variances between these regulatory accounting
practices and accounting principles generally accepted in the United States of America, although
not reasonably determinable, are presumed to be material.
In our opinion, the Annual Financial Report Update Document referred to above presents fairly,
in all material respects, the assets, liabilities and fund balances of Fishers Island Fire District, as
of December 31, 2010 and 2009 and the revenues it received and expenditures made for the
years then ended in conformity with the basis of accounting described in Note 1.
-A-
An Independent Member of the BDO Seidman Alliance
To the Board of Fire Commissioners
Fishers Island Fire District
Our audits were conducted for the purpose of forming opinions on the Annual Financial Report
Update Document (Financial Section) taken as a whole. The Supplemental Section listed on
page two of the Annual Financial Report Update Document is presented for purposes of
additional analysis and is not a required part of the basic financial statements. Such information,
except for the Fire District Questionnaire, has not been subjected to the auditing procedures
applied in the audit of the Annual Financial Report Update Document (Financial Section) and,
accordingly, we express no opinion on it.
In accordance with Government 2t uditing Standards, we have also issued our report dated March
2, 2011, on our consideration of the Fishers Island Fire District's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts
and grant agreements and other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing
and not to provide an opinion on the internal control over financial reporting or on compliance.
That report is an integral part of an audit performed in accordance with Government Auditing
Standards and should be considered in assessing the results of our audits.
March 2, 2011
~COM~IY
All Numbers in This Report
Have Been Rounded To
The Nearest Dollar
ANNUAL FINANCIAL REPORT
UPDATE DOCUMENT
For The
FIRE DISTRICT of Fishers Island
County of Suffolk
For the Fiscal Year Ended 12/31/2010
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 Fishers Island
*** FINANCIAL SECTION ***
Financial Information for the following funds and account groups are included in the Annual Financial Report filed by
your government for the fiscal year ended 2009 and has been used by the OSC as the basis for preparing this
update document for the fiscal year ended 2010:
(A) GENERAL
(R) Reserve
(TA) AGENCY
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
(A) GENERAL
Balance Sheet
Fishers Island FIRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
Assets
Cash
Cash In Time Deposits
TOTAL Cash
TOTAL Assets
434,643 A200 23,814
434,643 23,814
23,814
Page 3 OSC Municipality Code 471179004000
(A) GENERAL
Balance Sheet
Fishers Island FiRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
Fund Equity
unreser~e(] Fund Balance UnapPropriated
TOTAL Unreserved Fund Balance - Unappropriated
]'OTAL Fund Equity
TOTAL Liabilities And Fund Equity
434.643
434,643
434,643
434,643
23814
23,814
23,814
23.814
Page 4 OSC Municipality Code 471179004000
Fishers Island FIRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
(A) GENERAL
Results of Operation
Real Property Taxes
TOTAL Real Property Taxe~
Interest And Earnings
TOTAL Use of Money And Property
Sales of Equipment
TOTAL Sale of Property And Compensation Fo~' Loss
TOTAL Revenues
ToTAl. Detail Reve"ues And Ot~l~r so0rce~
356,407 A1001 356,403
355 407 ' 3S6 403
1,276 A2401 952
1,276
2,500 A2665 5,000
2,500 5,000
360,183 . 362;3~5
360,183
Page 5 OSC Municipality Code 471179004000
Fishers Island FIRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
(A) GENERAL
Results of Operation
Expenditures
Payment of Mta Payroll Tax,contr Expend 48 A19804 89
89
TOTAL Payment of Mta Payroll Tax : : 89
ToTAl_General Government Support
Fire, Equip & Cap Outlay 6,947 A34102 17,292
Local Pension Fund, Empl Bnfts
Social Security, Employer Cont
Worker's Compensation, Empl Bnfts
Life Insurance, Empl Bnffs
85,607 A90258 84,808
1,537 A90308 2,189
6,217 A90408 6,364
19,213 A90458 18,599
112,574
TOTAL Employee Benefits
386,539
TOTAL Expenditures
26,500 A99019
Transfers, Other Funds
TOTAl Operating Tradsfers : :: : 26,500
TOTAL Other Uses 413;039
TOTAL Detail Expenditures And Other Uses
111,960
347,184
426,000
426,006
426,000
773,184
OSC Municipality Code 471179004000
Page 6
Fishers Island FIRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
(A) GENERAL
Ghanges 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
487,497 A8021 434,643
487,497 A8022 434,643
360,183 362,355
413,039 773,184
434,643 A8029 23,814
Page 7 OSC Municipality Code 471179004000
Fishers Island FIRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
(A) GENERAL
Budget Summary
Estimated Revenues
Est Rev- Real Property Taxes
Est Rev Use of MoneyAnd Propedy
TOTAL Estimated Revenues
Estimated I~tertund Transfer
TOTAL Estimated Other Sources
TOTAL Estimated Revenues And Other Sources
356,400
3,300
359,700
0
359,700
A1049N 356,400
A2499N 3,3OO
: 359 Too
A5031N 0
0
359,700
Page 8 OSC Municipality Code 471179004000
Fishers Island FIRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
(A) GENERAL
Budget Summary
Appropriations
App - Public Safety
App - Employee Benefits
TOTAL Appropriations
App Interfund Transfer
TOTAL Other Uses
TOTAL Appropriations And Other Uses
221,400 A3999N
112,300 A9199N
93~;?oo
26,000 A9999N
26,000
359,700
221,740
111,960
333,700
26,000
26,000
359,700
Page 9 OSC Municipality Code 471179004000
Fishers Island FIRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
(R) Reserve
Balance Sheet
Assets
Cash, Special Reserves 499,712 R230 792,481
TOTAL Restricte8 Assets 499,712 792,~
se 4997-, 12 792'481
TOTAL
As ts
Page 10 OSC Municipality Code 471179004000
Fishers Island FIRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
(R) Reserve
Balance Sheet
Fund Equity
Capital Reserve 499,712 R878 792,481
TOTAL Special Reserves 499 7i2 792 481
TOTAL Fund Equity 499 712 792 481
TOTAL Liabilities And Fund EquitY 499,712
Page 11 OSC Municipality Code 471179004000
(R) Reserve
Results of Operation
nterest & Earnings
TOTAL Use.of M<~ne~y And Property
TOTAL Revenues
nteflund Transfers
TOTAL Interfund Transfers
TOTAL Other Sources
TOTAL Detail Revenues And Other Sources
Fishers Island FIRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
1.349 R2401 1.269
1,349 1,269
1,349 1.269
26.500 R5031 426.000
26.500 426,000
26.500 426.000
27.849 427,269
Page 12 OSC Municipality Code 471179004000
Fishers Island FIRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
(R) Reserve
Results of Operation
Expenditures
Fire. E(zuJDment Outlay
TOTAL Fire
TOTAL Public Safety
TOTAL Expenditures
TOTAL Detail Expenditures And Other Uses
R34102 134,500
0 134,500
0 134.500
0 134.500
0 134.500
Page 13 OSC Municipality Code 471179004000
Fishers Island FIRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
(R) Reserve
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
471,863 R8021 499,712
471,863 R8022 499,712
27,849 427,269
134,500
499,712 R8029 792,481
Page 14 OSC Municipality Code 471179004000
Fishers Island FIRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
(TA) AGENCY
Balance Sheet
Assets
Service Award Program Assets 908,918 TA461 962,277
TOTAL investments 9o8,~)~8 962 2~
TOTAL AssetsI ; 908,918 : 962,277~
Page 15 OSC Municipality Code 471179004000
Fishers Island FIRE DISTRICT
Annual Update Document
For the Fiscal Year Ending 2010
·
(TA) AGENCY
Balance Sheet
Liabilities
Service Awards 908,918 TA13 962,277
TOTAL Agency Liabilities ~08!9~8 ,: : , ~6~!277
TOTAL Liabilities ; 908,918 962,277
ToTAL Liabilities And Fund EquitY 90~,9i8 962,277
Page 16 OSC Municipality Code 471179004000
Fishers Island FIRE DISTRICT
Financial Comments
For the Fiscal Year Ending 2010
Page 17
Fishers Island FIRE DISTRICT
Statement of Indebtedness
For the Fiscal Year Ending 2010
Page 18
Fishers Island 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
Collateralized with securities held in
possession of municipality or its agent
Total
EDP Code
9Z2001
9Z2011
9Z2021
9Z2014
9Z2014A
Amount
$0.00
$821,677.64
$0.00
$821,677.64
$250,000.00
$600,261.58
$850,261.58
INVESTMENTS:
- Securities (450)
Book Value (cost)
Market Value at Balance Sheet Date
Collateralized with securities held in
possession of municipality or its agent
- Repurchase Agreements (451)
Book Value (cost)
Market Value at Balance Sheet Date
Collateralized with securities held in
possession of municipality or its agent
9Z4601
9Z4502
9Z4504A
9Z4511
9Z4612
9Z4514A
Page 'i 9 OSC Municipality Code 471179004000
Fishers Island FIRE DISTRICT
Bank Reconciliation
For the Fiscal Year Ending 2010
IncludeAII Checking, Savings and C.D Accounts
Bank Add: Less: Adjusted
Account Bank Deposit Outstanding Bank
Number Balance In Transit Checks Balance
..... -5498 $8,619 $0 $5,383 $3,236
· ..... -5704 320,578 $0 $0 $20,578
..... -5662 $716,469 $0 $0 $716,469
..... -5654 $76,012 $0 $0 $76,012
Total Adjusted Bank Balance $816,295
$.00
Petty Cash
Adjustments $.00
Total Cash 9ZCASH $816,295
Total Cash Balance A~I Funds 9ZCASHB $816,295
* Must be equal
Page 20 OSC Municipality Code 471179004000
Fishers Island FIRE DISTRICT
Fire District Questionnaire
For the Fiscal Year Ending 2010
1)
2)
·
3)
4)
5)
!· 6>
Has your district adopted a written procurement prolicy and is it complied with?
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?
Does your district have a written travel policy and is it complied with?
Are monthly bank reconciliations performed?
What is your district's statutory spending limitation margin (amount) for the next fiscal
Does your district have a Length of Service Award Program
(LOSAP) for volunteer firefighters?
If so, how are the LOSAP funds invested?
Marketable Securities
Annuities
Life Insurance
Other (describe) Demand Deposits
Response
Y
Y
Y
Y
$679,804
N
Y
Y
7) Has your Fire District adopted an investment policy as required by General Municipal
[ · Law, Section 39?
Y
Page 21
Fishers Island FIRE DISTRICT
Employee and Retiree Benefits
For the Fiscal Year Ending 2010
Total Full Time Empioyees:
Total Part Time Employees: [
Code Expenditures
(All Funds)
9010t Stale Retirement System I
~015[ P~t~ and Fire Retirement
9025[ Local Pension Fund ~'- ~84~§08.0[
§530[ ...... ~o~i~l Security $~1
9040[ Worker's Compensation $6,364.0(
Insurance
9~)-45~ --Life Insurance i ...... ~$~8,~-9~
Unemployment insurance
9055¢ Disability Insurance
90608 Hospital and Medical
(Dental) Insurance
90708 Union Welfare Benefits
9~)858~Su~p'~r~ta~Benefi~'Payr~e~' i'°l, Disabled Fire Fighters
~I8~d --' Other Ernpl~)yee Senefii~
#of F~-I[ =-- :-- #'~¢~art~ =T~ '~of Retiree~
Time Time
Employees I Employees
i
Computed letal From Financial
Section (comparative purposes only)
Page 22 OSC Municipality 471179004000
Fishers Island FIRE DISTRICT
Energy Costs and Consumption
For the Fiscal Year Ending 2010
Energy Type Total Total Volume Units Of Alternative
Expenditures Measure Units Of
Measure
~$01in~ I $266 7~ galJons ][
Diesel Fuel 'r $982!L 280 gallons Ii
, .INaturaIGas J; ~ [,
Electricity 23,144~ kilowatts t , i
~Coal iF IF ? tons il 1
cubic feet
Page 23 OSC Municipality 471179004000
Fishers Island FIRE DISTRICT
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 Obli§ation
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 Rafio(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
Amodization period of UAAL(in years)
.00%
Page 24 OSC Municipality 471179004000
Fishers Island Fire District
NOTES TO ANNUAL FINANCIAL REPORT UPI)ATE DOCUMENT
Summary of significant accounting policies:
The Annual Financial Report Updatc Document of the Fishers Island Fire District (the
District), as of and for the year ended December 31, 2010 has been prepared in
conformity with the cash regulatory basis of accounting as prescribed by the State
Comptroller's Ofllce, which is a comprehensive basis of accounting other than United
States gcncrally accepted accounting principles.
Financial reporting entity: The District is a governmental entity that provides fire
protection to the local community. The District receives most of its fl~nding from
property taxes.
The District is governed by laws of thc State of New York. The Board of Fire
Commissioners is the legislative body responsible for the overall operation of the
District. All activities and functions performed for the District are its direct
responsibility. Thc Treasurer serves as Chief Fiscal Officer of the District.
Basis of presentation: The Annual Financial Report Update Docmncnt provides
information about the District's funds, including fiduciary funds. The accounts of the
District are organized on thc basis of funds, each of ;vhich is considered a separate
accounting entity. The operations of each fired are segregated fbr the purpose of carrying
on specific activities or attaining certain objectives in accordancc with special
regulations, restrictions or limitations. The following fund types are used:
Governmental:
General Fund
The General Fund is the principal operating fund of thc 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 thc General Fund.
Equipment Reserve Fund
The Equipment Reserve Fund is used to account for and report financial resources
to bc used for the acquisition of equipment needed by the District.
Capital Reserve Fund
The Capital Reserve Fund is used to account l'or and report tinancial resources to
be used for the acquisition, construction, or renovation or'major capital I:acilities.
-25-
~COUPANY
Fishers Island Fire District
NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT
Summary of significant accounting policies (continued):
Fiduciary Fund
Fiduciary funds are used to account fbr assets held by thc District in a trustee or custodial
capacity. The District utilizes thc following fund:
Agency Fund
Thc Agency Fund is used to account for and report assets held by the District in
thc capacity of trustee, custodian or agent tbr individuals. Agency funds arc
custodial in nature and do not involve measurement of results of operations.
Basis of accounting: The accompanying Annual Financial Report Update Document has
been prepared on thc cash regulatory basis of accounting, which is a comprehensive basis
of accounting other than generally accepted accounting principles. Under that basis, the
only asset recognized is cash and no liabilities arc recognized. Ail transactions arc
recognized as either cash receipts or disbursements. Non-cash transactions arc not
recognized in the Annual Financial Report Update Document.
Cash and cash equivalents: Cash and cash equivalents include demand deposits and
temporary invcsnncnts with original maturities of three months or less from date ol'
acquisition.
lnterfund lransfers: The operations of the District give rise to certain transactions
between funds, including transfers of expenditures and revenues to provide services and
construct assets. This is cithcr by budget, Board resolution, permissive referendum or
mandatory referendum.
Fund balance - reserves and designations: Portions of fund balauce arc reserved or
designated to either satisfy' legal restrictions or to plan for future expenditures. The
following is a description of the reserve utilized by Iht District:
Reserve for equipment - used lbr thc acquisition of fire apparatus and
equipment.
Reserve for capital - used for the acquisition, construction, or renovation of
mgjor capital facilities.
-26-
~COMPANY
Fishers Island Fire District
NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT
Summary of significant accounting policies (continued):
Real propert~ taxes: All real property assessments are made by the To~vn of Southold.
Real property tax payments are duc in two cqual installments; the first half payable on
December 1 (lien and levy date) preceding the year for which the same is levied and the
second half payable May 10, with the first half payable without penalty to January 10 and
thc second half payable without penalty to May 31. After May 31, all taxes must be paid
to the Suffolk County Treasurcr with a 5% penalty charge and interest at the ratc of 1%
pcr month from February 1.
'[he Toxvn of Southold Rcceivcr of Taxes collccts all real estate taxes fbr the District.
The Town of Southold Receiver of Taxes distributes thc tax collections to the District.
All payments made to the District are made in the year for which the tax has been levied.
The Town of Southold Receiver of Taxes turns over uncollected items to the Suffolk
County Treasurer who continues thc collection of these items. Responsibility for the
collection of unpaid taxes rests with Suffolk County.
Budgetary data: The District prepares an operating budget for the General Fund each
year. The budget is adopted by the Board of Fire Commissioners as its final budget for
the coming year. Fhe budget is not subject to referendum. All budget appropriations
lapse at the end of each year.
Use of estimates: The preparation of thc Ammal Financial Report Updatc Document in
conformity with thc cash rcgulatory basis of accounting requires management to make
significant estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
New accounting pronouncement: Thc Govermnental Accounting Standards Board
("GASB") has issued a new accounting statement which thc District ',,ill be required to
implemcnt for thc year ending December 31, 2011, Statement No. 54, "Fund Balance
Reporting and Governmental Fund Type D~/initions."
Thc purpose of this Statement is to enhance the uscfulness of f\md balancc information
by providing clearer fund balance classifications that can be more consistently applied
and by clarifying the existing governmental fund type definitions. The Statement
establishes fund balance classification that comprise a hierarchy based primarily on thc
extent to which a government is bound to observe constraints imposed upon thc use of
the resources reported in governmental funds.
-27-
~COMPANY
Fishers Island Fire District
NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT
o
o
Deposits with financial institutions and investments:
The District's investment activities are governed by state statutes. Resources must be
deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks or
trust companies located within the state. Collateral is required lbr demand and time
deposits and certificates of deposit not covered by FDIC insurance.
The District adopted a lbrmal investment policy allowing investments in special time
deposit accounts, certificates of deposit, obligations of the United States of America,
obligations guaranteed by agencies of the United States of America where the paymcnt of
principal and intcrcst are guaranteed by thc United States of America, obligations of the
Statc of New York and obligations issued by a municipality, school district, or fire
districl other than thc District.
Custodial credit risk is the risk that in thc event of a bank failure, the District's deposits
may not be returned to it. The GASB dirccts that dcposits be disclosed according to
custodial credit risk. Thc District's custodial risk is specified by the following categories:
1. Insured by FDIC insurancc.
2. Collateralized by securities hcld by the pledging financial institution's trust
department or agcnt but not in thc District's namc.
3. Collateralized by securities held by the pledging financial institntion but not
in thc District's name.
4. Uncollateralized.
The District's deposits held by thc banks are catcgorized, based on the above criteria, as
follows:
Category Amount
1 $250,OOO
2 600,262
3
4
Total $8~_~,~62
Length of Service Awards Program (LOSAP):
The intbrmation contained in this note is based on intbrmation for the LOSAP {'or thc
plan year ending December 3l, 2010, which is thc most recent plan year for which
complete inlbrmation is available. The funding detail is lbr tbe period January 1. 2009
Ibrough December 31,2009.
-28-
~COMPANY
Fishers Island Fire District
NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT
o
Length of Service Awards Program (LOSAP) (continued):
The District established a dcfincd benefit LOSAP fbr the active volunteer firefighters of
the District. The program took effect on January 1, 1993. Thc program ;vas established
pursuant to Article I I-A of the General Municipal Law. The progrmn provides
municipally-funded, pension-like benefits to facilitate the recruitment and retention of
active volunteer firefighters. The District is the sponsor of the program.
Program description:
Participation, vesting and service credit: Active voluntccr firelighters who have
reached thc age of 18 and w'ho have completed one year of service are cligible to
participate in thc program. Participants acquire a nonforfeitablc right to a service award
after being credited with 5 years of firefighting servicc or upon attaining the program's
entitlement age and completing one year of plan participation. The program's entitlement
age is 65. In general, an active volunteer fircfighter is credited with a year of fircfighting
service for each calcndar year after the establishment of thc program in which hc or she
accumulates 50 points. Points are granted for the performance of certain activities in
accordance with a system established by thc sponsor on the basis of a statutory list
of activities and point values. A participant ~nay also receive credit for 5 years of
firefighting service rendered prior to the establisb2ncnt of the program.
Benefits: A participant's bencfit undcr thc program is the actuarial equivalent of' a
monthly payment for life, with 10 years certain, equal to $20 multiplied by the person's
total number of years of firefighting service. Thc number of years of firefigbting service
used to compute the benefit cannot cxcccd 30. Benefits are not payable until thc first day
of the month coincident with or tbllowing the attainment of age 65 and completion of
one year of plan participation. Except in the case of disability or death, bcnefits are
payable when a participant reaches entitlemcnt age. The program provides statutorily
mandated death and disability bcncfits.
Fiduciary investment and control: Service credit is detcrmined by the governing board
of the sponsor, based on the information ccrlilied to the governing board by the lire
company. The fire company must maintain all rcqnired records on fortns prescribed by
thc governing board.
The governing board of the sponsor has retained and designated ltometown Insurance
Agency (Hometown)/RSA Consultants to assist in the administration of the program.
The designated program administrator's fl~nctions include providing basic annual
administration services as follows:
-29-
~WCOMPANY
Fishers Island Fire District
NOTES TO ANNUAL FINANCIAl, REPORT UPI)ATE DOCUMENT
o
Length of Service Awards Program (LOSAP) (continued):
Program description (continued):
Fiduciary investment and control (continued'}:
a) providing participants enrollment forms
b) providing an annual reminder letter with a review list for the current anniversary
date
c) preparation of Explanation of Plan Benefits
d) calculation of Schedule of Benefits and cost annually
c) participants' benefit calculation at time of severance or rctircrncnt
l) Auxiliary Fund valuation and suggested deposit
g) summary of required ammal contribution
h) annual actuarial review and recommended benefit enhancements
Disbursements of program assets for the paymcnt of benefits or administrative cxpcnscs
must be approved. The following is an explanation of the process for approving
disbursements:
Payment of benefits:
Entitlement benefits - When a participant becomes eligible to receive entitlement
benefits, the Plan Sponsor prepares and submits an authorization lcttcr to 1 lometown
indicating the participant's name, address, age, social security number, term of service
and other pertinent inlbrmation. Hometown will then facilitate the disbursement of
entitlement benefits.
Death benefits - Upon notification from the Plan Sponsor of a parlicipant's death,
Hometown forwards an individual claim fbrm to the Plan Sponsor for completion.
The Plan Sponsor w'ill then complcte and return this fbrm, accompanied by a death
certificate, to [lomctow'n, authorizing thc disburscmcnt of a dcath benefit.
Disability benefits - When a participant becomes disabled, the Plan Sponsor will
notify Hometown in writing of a participant's total and permanent disability.
Ilometown ,:,'ill then verify, that the participant has been declared 100% disabled by
thc Workers Compensation Board. Subsequent to this verification, Hometown will
facilitate the disbursement of disability benefits.
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~COMPANY
Fishers Island Fire District
NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT
Length of Service Awards Program (LOSAP) (continued):
Pawncnt of administrative cxpcnses:
1. Per the executed Service Fcc Agreement, the Plan Sponsor agrees to payment as
contractcd.
Authority to invest program assets is vested in Gcnwortb Financial, Inc. and Standard
Security Life lnsurancc Company. Subject to restrictions in thc program document,
program assets are iovested in accordance with a statutory "prudent person" rule. Thc
Sponsor has invested plan funds in Group Annuity Contracts with guaranteed floor rates
of interest of 3% per annum.
The Sponsor is required to retain an actuary to determine the amount of the Sponsor's
contributions to thc plan. The actuary retained by tbe Sponsor for this purpose is
ltarbridgc Consulting Group, LLC. Portions of the following information are derivcd
from a report preparcd by the actuary dated May 2010.
Program financial condition:
Assets and liabilities:
Actuarial present value of vested accrued
benefits at December 31,2009:
Vested
Non-vested
Less assets available fi)r benefits
% of Total
1.11%
27.44%
27.94%
43.51%
100,00%
$1,102,576
30~445
$1,133,021
New York Commercial Trust
Standard Security annuity
Genworth Financial annuity
Cash value of life insurance
Total net assets available
lbr benefits
Total unfundcd benefits
10,082
249,437
253,906
395,493
908,918
224=1~3
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c?COMPANY
Fishers Island Fire District
NOTES TO ANNUAL FINANCIAL REPORT UPI)ATE DOCUMENT
o
Length of Service Awards Program (LOSAP) (continued):
Program financial condition (continued):
Receipts and disbursements:
Plan net assets, beginning of year $854,994
Changes during the year:
Plan contributions $ 36,000
Investment income earned 21,027
Plan benefit withdrawals (46,200)
Cash value of life insurance 47,137
Life insurance premium (4,040) 53,924
Plan ncr assets, end of .,,'ear $908~991~
Contributions:
Rangc of Sponsor's contribution recommended by actuary $67.292 - $79,375
Amount of Sponsor's actual contribution $83.137
Administration fees:
Fees paid to designated program administrator from
separate District funds $ 3.700
Funding methodology and actuarial assumptions:
Normal costs: The actuarial valuation methodology uscd by the actuary to determine
the Sponsor's contribution is the Unit Credit Cost Method. The assumptions used by thc
actuary to determine the Sponsor's contribution and the actuarial present value of benefits
arc:
Assumed rate of return on investmcnt 6%
Mortality table used lk~r:
Pre-retirement: None
Post-retirement: 1994 Group Annuity - Male
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C0MPANY
Fishers Island Fire District
NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT
Commitments and contingencies:
The District is exposed to various risks o1' loss related to torts; theft of; damage to; and
destruction of assets; injuries to employecs; errors and omissions; natural disasters, etc.
These risks are covered by coinmercial insurancc purchased from independcnt third
parties. Settled claims from thcse risks have not exceeded commercial insurancc
coverage.
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~COMPANY