The URL can be used to link to this page

Home My WebLink About2014Fishers Island Fire District ANNUAL FINANCIAL REPORT December 31, 2014 Sheehan TABLE OF CONTENTS INDEPENDENT AUDITOR'S REPORT ....................................... A ANNUAL FINANCIAL REPORT UPDATE DOCUMENT: FINANCIAL SECTION .............................................. 1 SUPPLEMENTAL SECTION ......................................... 17 NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT........ 25 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF ANNUAL FINANCIAL REPORT UPDATE DOCUMENT PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS .................................................. 36 Sheehan CONTA V 1 437 Madison Avenue, 29th Floor New York, NY 10022 • 212.962.4470 165 Orinoco Drive, Brightwaters, NY 11718 631.665.7040 • Fax: 631.665.7014 15 South Bayles Avenue, Port Washington, NY 11050 516.883.5510 9 Fax: 516.767.7438 A PROFESSIONAL CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS www.sheehanepa.com INDEPENDENT AUDITOR'S REPORT To the Board of Fire Commissioners Fishers Island Fire District Fishers Island, New York Report on Annual Financial Report Update Document We have audited the accompanying Annual Financial Report Update Document (Financial Section) of Fishers Island Fire District, as of and for the year ended December 31, 2014, and the related notes to the Annual Financial Report Update Document, as listed in the table of contents. Management's Responsibility for the Annual Financial Report Update Document Management is responsible for the preparation and fair presentation of the Annual Financial Report Update Document in accordance with the regulatory basis of accounting as prescribed by the State Comptroller's Office, which is a special purpose framework of accounting other than U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the Annual Financial Report Update Document that is free from material misstatemgnt, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on the Annual Financial Report Update Document based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Annual Financial Report Update Document is free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Annual Financial Report Update Document. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Annual Financial Report Update Document, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District's preparation and fair presentation of the Annual Financial Report Update Document in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant estimates made by management, as well as evaluating the overall presentation of the Annual Financial Report Update Document. IN An Independent Member of BDO Alliance USA To the Board of Fire Commissioners Fishers Island Fire District Fishers Island, New York We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit 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 special purpose framework 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. Opinions In our opinion, the Annual Financial Report Update Document (Financial Section) referred to above presents fairly, in all material respects, the assets and fund balances of Fishers Island Fire District, as of December 31, 2014, and the revenues it received and expenditures made for the year then ended in conformity with the basis of accounting described in Note 1. 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 2 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. The information, except for the Fire District Questionnaire, has not been subjected to the auditing procedures applied in the audit of the Annual Financial Report Update Document (Financial Section) and, accordingly, we express no opinion on it. In accordance with Government Auditing Standards, we have also issued our report dated March 4, 2015, 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 in considering Fishers Island Fire District's internal control over financial reporting and compliance. Brightwaters, New York March 4, 2015 -A- COMPANY All Numbers in This Report Have Been Rounded To The Nearest Dollar ANNUAL FINANCIAL REPORT UPDATE DOCUMENT For The FIRE DISTRICT of Fishers Island County of Suffolk For the Fiscal Year Ended 12/31/2014 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 2013 and has been used by the OSC as the basis for preparing this update document for the fiscal year ended 2014: (A) GENERAL (R) RESERVE (TA) AGENCY All amounts included in this update document for 2013 represent data filed by your government with OSC as reviewed and adjusted where necessary. *** 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 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 (A) GENERAL Balance Sheet _ 7.7CDsorpz Assets - Cash 86,760 A200 72,329 Page 3 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 (A) GENERAL Balance Sheet Fund Balance Unassigned Fund Balance 86,760 A917 72,329 Page 4 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 (A) GENERAL Results of Operation _ 4Ed Codef 2014' ��=._,.�._ �E._.__._..::..._._..0 Revenues Real Property Taxes 395,055 A1001 395,051 x m.n TOTALReaf Property fixes.. , ... , _... w .� ��; �.. _ ?.. n.ro .. 395 055x 395,051 { Interest And Earnings09 A24 1 01 26 x c 109 26'` TOTAL�Use of`Money And Property Refunds of PriorE�< Year's Expenditures A2701 4,598 fi t t 4 598 TOTAL: Miscellaneous Locat Sources !,k Fed Aid - z � ,. -- Other Public Safety 1,000 A4389 TOTALiFederal;Aid < 00; T01°AL'Revenues ' ... �' . , ` ,..."_ ' . ` . 386,164 r 393,675 Interfund Transfers A5031 34,770 un <: 34,7T0 TOTAL_Interfund Transfers 0 TOTALOther,Sources r..". " 396,164 434,445, TOTAL :Detail Revenues And Other Page 5 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 (A) GENERAL Results of Operation TOTAL,Eniploy_ee Benefits,;; 112,4 9� 911,455: TOTAL. Detail :. 48,876: Page 6 OSC Municipality Code 471179004000 Expenditures Payment of Mta Payroll Tax,contr Expend A19804 TOTAL' Payment ofrMta PayrollTax`01 .r TOTAL!Gener'al Go`vernmentSupport, Qr O, Fire, Pers Sery 18,034 A34101 19,892 Fire, Equip & Cap Outlay 37,364 A34102 69,850 Fire, Contr Expend 199,180 A34104 247,679 TOTALFve ' 254,578 337,4 1 254,57&` TOTAL,'',Pubii , A et 2 337,421, State Retirement System 828 A90108 1,009 Local Pension Fund, Empl Bnfts 84,624 A90258 85,223 Social Security, Employer Cont 1,130 A90308 1,502 Worker's Compensation, Empl Bnfts 9,423 A90408 5,818 Life Insurance, Empl Bnfts 16,434 A90458 17,903 TOTAL,Eniploy_ee Benefits,;; 112,4 9� 911,455: TOTAL. Detail :. 48,876: Page 6 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 (A) GENERAL Analysis of Changes in Fund Balance COde„�eSGfIplI0R4 ,a ,�y, t r F Q e s 214. J ,. �.; . �3,EdpCod Analysis of Changes in Fund Balance f wod Balance - of Year 57,613 A8021 86,760 Restated Fund F."ni« mc-, 6,g of Year 57,613 A8022 86,760 ADD - REVENUES AND OTHER SOURCES 396,164 434,445 DEDUCT - EXPENDITURES AND OTHER USES 367,017 448,876 Fund Mwire - End of Year 86,760 A021D 72,329 Page 7 OSC Municipality Code 471179004000 C� Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 (A) GENERAL Budget Summary .; C e Description e , _7�7r r ^ �;4 r ,� e.� 2014',. 4 R k EdpCode,� '. 2015 ,.; ;'h w Estimated Revenues '~ Est Rev - Real Property Taxes 395,050 A1049N 395,175 Est Rev - Use of Money And Property 150 A2499N 25 TOTAL'EstimatedfRevenues ��_'�. {395,200` b��, 39 00 Estimated - Interfund Transfer 0 A5031 0 TOTAL: Estimated Other Source's 0 0 TOTAL;Estimated Revenues And Other Sources - 895,200 395,200 �r Page 8 OSC Municipality Code 471179004000 (A) GENERAL Budget Summary Appropriations App - Public Safety Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 270,900 A3999N 272,500 App - Employee Benefits 113,300 A9199N 114,200 TOTAL_Appropriations 364,200 , 386;700 App - Interfund Transfer 11,000 A9999N 8,500 TOTAL>OtherUses 11,000,> f 8,500 TOTAL,Appropnationt And Other Uses „- Page 9 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 (R) RESERVE Balance Sheet Assets Cash Special Reserves 845,081 8230 810,984 TOTAL ,Restricted Assets 845,081 810,984 e TOTAL'. ssets`.and�Deferred Outflows of Resources , 845,081 810,984 Page 10 OSC Municipality Code 471179004000 N Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 (R) RESERVE Balance Sheet "w.W.�.,W. G..,.,, .mss+„ $ �. IN Fund Fund Balance Capital Reserve 845,081 R878 810,984 Page 11 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 (R) RESERVE Results of Operation �ode`Description _._,_ry w 2613 N7 _ .... Revenues Interest & Earnings 1,477 R2401 673 IDTAl_11se.nfMoney"And Property 1,477 673 TOTAL Revenues 1,4 , �� 673 Interfund Transfers R5031 TOTALint6i6id Transfersot TOTAL Other;Spurces,`,: TOTA�L`DetailaRevenuesAnd°tither Sources, ,<` # _y 1,477 673' Page 12 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 (R) RESERVE Results of Operation : EtlpCode Other Uses Transfers, Other Funds R99019 34,770 TOTAL Operating Transfers„ 34,770' U TOTAL Other"Uses r..,. �.� �� ._�m.�..� ... �0` .` _ . , ,34,770° TOTAL`DetaiLExpenditures And Other; lJses 0 34;770 Page 13 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 (R) RESERVE Analysis of Changes in Fund Balance i d Code ,Code; Description _ � �_„_. �. � x�. � �,,. •`�, �.�.a n� ti . P�=-- Analysis of Changes in Fund Balance pulld salar.::�e - Beginning ci Year mr ,, to teo, Funci CS lance - E1f,,q of Yca<sr ADD - REVENUES AND OTHER SOURCES DEDUCT - EXPENDITURES AND OTHER USES Ff.,Md f.3 -31a; -'Ca - E ;ld O ` 03f 843,604 R8021 845,081 843,604 F:8!?22 845,081 1,477 673 34,770 845,081 R8029, 810,984 Page 14 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 (TA) AGENCY Balance Sheet Assets Service Award Program Assets 1,073,643 TA461 1,143,542 54 T,OTAL;fnvestments rt T,0 3,6 1,143, 7 43= 2; 1,073;643 1;143,542 TOTAL"As'sets and"Deferred,Outflows'of Res_ Page 15 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Annual Update Document For the Fiscal Year Ending 2014 (TA) AGENCY Balance Sheet Code.Descnpfion,�.� n;..' ,.t '.�... ��'_ pCo Service Awards 1,073,643 TA13 1,143,542 TOTAL Agency'LiabiUties 1,073,643 1,143,542 TOTAL,LIabilities _ 1,073,643 1 ,; TOTAL3Liabtlities, Deferred Inflows And Fund,Balance ^1,073,643 1,143,542. Page 16 OSC Municipality Code 471179004000 Statement of Indebtedness For the Fiscal Year Ending 2014 First Debt Cops Comp Date of Date of Int. Amt. Orig. O/S Beg. Paid Redeemed Prior Yr. Accreted O/S End Year Code Description Flag Flag Issue Maturity Rate Var? Issued of Year Dur. Year Bond Proc. Adjust. Interest of Year Page 17 Fishers Island FIRE DISTRICT Schedule of Time Deposits and Investments For the Fiscal Year Ending 2014 CASH: On Hand Demand Deposits Time Deposits Total COLLATERAL: - FDIC Insurance Collateralized with securities held in possession of municipality or its agent Total 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 EDP Code Amount 9Z2001 $0.00 9Z2011$885,297.0_0 9Z2021 - -. - - -- $0.00 $885,297.00 9Z2014 $250,000-00 972014A $667,062.00 $917,062.00 9Z4501 9Z4502 9Z4504A 9Z4511 9Z4512 9Z4514A Page 18 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Bank Reconciliation For the Fiscal Year Ending 2014 Include All Checking, Savings and C. D. Accounts Bank Add: Less: Adjusted Account Bank Deposit Outstanding Bank Number Balance In Transit Checks Balance $53,578 $0 $1,984 $51,594 *****-5704 _ .. _ .. _ _. $20,735 $0 _. $0 $20,735 *****-5662 $516,594 $0 $0 $516,594 ***** _...._-5654 ..___..__._._.... 484 $28, _ $0 *****-9461 $50,117 $0 0 $50,117 *****-9453 $215,789 $0 $0 $215,789 Total Adjusted Bank Balance _ $883,313 Petty Cash $.00 Adjustments $.00 Total Cash 9ZCASH * $883,313 Total Cash Balance All Funds 9ZCASHB * $883,313 * Must be equal Page 19 OSC Municipality Code 471179004000 Fishers Island FIRE DISTRICT Fire District Questionnaire For the Fiscal Year Ending 2014 Response 1) Has your district adopted a written procurement prolicy and is it complied with? Y 2) Has your district contracted to have an independent audit of its financial statements? Y 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? Y 4) Are monthly bank reconciliations performed? Y 5) What is your district's statutory spending limitation margin (amount) for the next fiscal $567,323 r 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 N Annuities Y Life Insurance Y Other (describe) 7) Has your Fire District adopted an investment policy as required by General Municipal _ _ Y Law, Section 39? Page 20 Fishers Island FIRE DISTRICT Employee and Retiree Benefits For the Fiscal Year Ending 2014 Total Full Time Employees Tn*ol Part Tima Fmnlnvaac• 3! Account Description Totat # of Full I # of Part # of Retirees Code Expenditures Time ( Time (All Funds) Employees Employees i 9010 State Retirement System $1,009.0 � 1 _ 9015 Police and Fire Retirement I 9025 Local Pension Fund $85,223,0 I ' 90308 �y Social Security T $1,502.0 r-90408 Worker's Compensation i $5,818.00 3 Insurance 90458 Life Insurance $17,903.0 9050 Unemployment Insurance I: : 9055 Disability Insurance f 9Q608 Hospital and Medical I I (Dental) Insurance V� 90708 Union Welfare Benefits I 9085 Supplemental Benefit Payment to Disabled Fire Fighters 9189q .....,_....... M....... ..._.. _ _,..:..,...r.:.... Other Employee Benefits I W,..,... ... I I Total , $111,455.00 ;Computed Total From Financial $111,455.00 Section (comparative purposes only) Page 21 OSC Municipality 471179004000 Fishers Island FIRE DISTRICT Energy Costs and Consumption For the Fiscal Year Ending 2014 Energy Type Total Total Volume Units Of Alternative Expenditures Measure Units Of Measure Gasoline $89; 18 gallons Diesei Fuel _ $1,223' 2351 __ gallons j - 'Fuel Oil # $10,5461 2,526' .. _ . gallons Natural Gas I cubic feet L____ _ _ - __ _.,___... _. _.__ _...._- r_. _.., . _ Electricity 1 ..__.._.._.__.. $6,681; 26,7431 kilowatt-hours ` ;oal tons Page 22 OSC Municipality 471179004000 Fishers Island FIRE DISTRICT Schedule of Other Post Employment Benefits (OPER) For the Fiscal Year Ending 2014 Page 23 Fishers Island FIRE DISTRICT Financial Comments For the Fiscal Year Ending 2014 Page 24 Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT 1. Summary of significant accounting policies: The Annual Financial Report Update Document of the Fishers Island Fire District (the District), as of and for the year ended December 31, 2014 has been prepared in conformity with the cash (regulatory) basis of accounting as prescribed by the State Comptroller's Office, which is a special purpose framework of accounting other than United States generally 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 funding from property taxes. The District is governed by laws of the State of New York. The Board of Fire Commissioners is the legislative body responsible for the overall operation of the District. All activities and functions performed for the District are its direct responsibility. The Treasurer serves as Chief Fiscal Officer of the District. Basis of presentation: The Annual Financial Report Update Document provides information about the District's funds, including fiduciary funds. The accounts of the District are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. The following fund types are used: Governmental: General Fund The General Fund is the principal operating fund of the District and is used to account for all financial resources except those required to be accounted for in another fund. Equipment Repair Reserve Fund The Equipment Repair Reserve Fund is used to account for and report financial resources to be used for the acquisition and repair of equipment as needed by the District. Capital Reserve Fund The Capital Reserve Fund is used to account for and report financial resources to be used for the acquisition, construction or renovation of major capital facilities. -25- Sheehan Fishers Island Fire District �r- J NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT 1. Summary of significant accounting policies (continued): Governmental (continued): Interior and Exterior Repairs and Renovations Reserve Fund The Interior and Exterior Repairs and Renovations Reserve Fund is used to account for and report financial resources to be used for interior and exterior repairs and renovations. Pump Repair Reserve Fund The Pump Repair Reserve Fund is used to account for and report financial resources to be used for the repair and acquisition of fire pumps. Fiduciary Fund: Fiduciary funds are used to account for assets held by the District in a trustee or custodial capacity. The District utilizes the following fund: Agency Fund The Agency Fund is used to account for and report assets held by the District in the capacity of trustee, custodian or agent for individuals. Agency funds are custodial in nature and do not involve measurement of results of operations. Basis of accounting: The accompanying Annual Financial Report Update Document has been prepared on the cash (regulatory) basis of accounting, which is a special purpose framework of accounting other than generally accepted accounting principles. Under that basis, the only asset recognized is cash and no liabilities are recognized. All transactions are recognized as either cash receipts or disbursements. Non-cash transactions are not recognized in the Annual Financial Report Update Document. Cash and cash equivalents: Cash and cash equivalents include demand deposits and temporary investments with original maturities of three months or less from date of acquisition. Interfund transfers: The operations of the District give rise to certain transactions between funds, including transfers of expenditures and revenues to provide services and construct assets. This is either by budget, Board resolution, permissive referendum or mandatory referendum. -26- Sheehan rJ Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT 1. Summary of significant accounting policies (continued): Fund balances: In accordance with Governmental Accounting Standards Board Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions" (GASB 54), fund balance is broken down into five different classifications: non - spendable, restricted, committed, assigned and unassigned. Non -spendable consists of assets that are inherently non -spendable in the current period either because of their form or because they must be maintained intact, including prepaid items, inventories, long-term portions of loan receivable, financial assets held for resale and principal of endowments. Restricted consists of amounts that are subject to externally enforceable legal purpose restrictions imposed by creditors, grantors, contributors or laws and regulations of other governments or through constitutional provisions or enabling legislation. Committed consists of amounts that are subject to a purpose constraint imposed by a formal action of the government's highest level of decision-making authority before the end of the fiscal year and that require. the same level of formal action to remove the constraint. The Board of Fire Commissioners is the decision-making authority that can, by Board resolution, prior to the end of the fiscal year, commit fund balance. Assigned consists of amounts that are subject to a purpose constraint that represents an intended use established by the government's highest level of decision-making authority or by their designated body or official. The purpose of the assignment must be narrower than the purpose of the General Fund and, in funds other than the General Fund, assigned fund balance represents the residual amount of fund balance. The Board of Fire Commissioners, by Board resolution, can authorize the Treasurer to assign fund balance. Unassigned represents the residual classification for the government's General Fund and could report a surplus or deficit. In funds other than the General Fund, the unassigned classification should be used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed or assigned. When resources are available from multiple classifications, the District spends funds in the following order: Restricted amounts are deemed to have been spent when an expenditure is incurred for purposes for which both restricted and unrestricted (committed, assigned or unassigned) amounts are available. -27- &COWPANY Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT 1. Summary of significant accounting policies (continued): Fund balances (continued): • Within unrestricted fund balance, expenditures are deemed to be spent first from committed amounts, followed by assigned amounts and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used. Real property taxes: All real property assessments are made by the Town of Southold. Real property tax payments are due in two equal installments; the first half payable on December 1 (lien and levy date) preceding the year for which the same is levied and the second half payable May 10, with the first half payable without penalty to January 10 and the second half payable without penalty to May 31. After May 31, all taxes must be paid to the Suffolk County Treasurer with a 5% penalty charge and interest at the rate of 1% per month from February 1. The Town of Southold Receiver of Taxes collects all real estate taxes for the District. The Town of Southold Receiver of Taxes distributes the tax collections to the District. All payments made to the District are made in the year for which the tax has been levied. The Town of Southold Receiver of Taxes turns over uncollected items to the Suffolk County Treasurer who continues the collection of these items. Responsibility for the collection of unpaid taxes rests with Suffolk County. In June 2011, New York State passed Chapter 97 of the Laws of 2011 (Tax Cap Law). This law applies to all local governments in New York State. The Tax Cap Law restricts the amount of real property taxes that may be levied by the District in a particular year, beginning with the 2012 - 2013 fiscal year. The growth in annual levy is limited to the lesser of 2% or annual change in the national unadjusted Consumer Price Index for All Urban Consumers - All Items (CPI -U) subject to certain limited exceptions and adjustments. Budgetary data: The District prepares an operating budget for the General Fund each year. The budget is adopted by the Board of Fire Commissioners as its final budget for the coming year. The budget is not subject to referendum. All budget appropriations lapse at the end of each year. Use of estimates: The preparation of the Annual Financial Report Update Document in conformity with the cash (regulatory) basis of accounting requires management to make significant estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. -28- R OWPANY Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT 2. Deposits with financial institutions and investments: The District's investment activities are governed by state statutes. Resources must be deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks or trust companies located within the state. Collateral is required for demand and time deposits and certificates of deposit not covered by FDIC insurance. The District adopted a formal investment policy allowing investments in special time deposit accounts, certificates of deposit, obligations of the United States of America, obligations guaranteed by agencies of the United States of America where the payment of principal and interest are guaranteed by the United States of America, obligations of the State of New York and obligations issued by a municipality, school district or fire district other than the District. Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The GASB directs that deposits be disclosed according to custodial credit risk. The District's custodial risk is specified by the following categories: 1. Insured by FDIC insurance. 2. Collateralized by securities held by the pledging financial institution's trust department or agent but not in the District's name. 3. Collateralized by securities held by the pledging financial institution but not in the District's name. 4. Uncollateralized. The District's deposits held by the banks are categorized, based on the above criteria, as follows: Category Amount 1 $250,000 2 667,062 3 - 4 - Total917 062 -29- COMPANY Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT 3. Length of Service Awards Program (LOSAP): The District's Annual Financial Report Update Document is for the year ended December 31, 2014. However, the information contained in this note is based on information for the LOSAP for the plan year ending on December 31, 2013, which is the most recent plan year for which complete information is available. The District established a defined benefit LOSAP for the active volunteer firefighters of the District. The Program took effect on January 1, 1993. The Program was established pursuant to Article 11-A of the General Municipal Law. The Program provides municipally -funded, pension -like benefits to facilitate the recruitment and retention of active volunteer firefighters. The District is the Sponsor of the Program. g Program description: Participation, vesting and service credit: Active volunteer firefighters who have reached the age of 18 and who have completed 1 year of service are eligible to participate in the Program. Participants acquire a non -forfeitable right to a service award after being credited with 5 years of firefighting service or upon attaining the Program's entitlement age and completing 1 year of Plan participation. The Program's entitlement age is 65. In general, an active volunteer firefighter is credited with a year of firefighting service for each calendar year after the establishment of the Program in which he or she accumulates 50 points. Points are granted for the performance of certain activities in accordance with a system established by the Sponsor on the basis of a statutory list of activities and point values. A participant may also receive credit for 5 years of firefighting service rendered prior to the establishment of the Program. Benefits: A participant's benefit under the Program is the actuarial equivalent of a monthly payment for life, with 10 years certain, equal to $20 multiplied by the person's total number of years of firefighting service. The number of years of firefighting service used to compute the benefit cannot exceed 30. Benefits are not payable until the first day of the month coincident with or following the attainment of age 65 and completion of 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 the information certified to the Governing Board by the fire company. The fire company must maintain all required records on forms prescribed by the Governing Board. �Shee an 11I Aw Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT 3. Length of Service Awards Program (LOSAP) (continued): Fiduciary investment and control (continued): The Governing Board of the Sponsor has retained and designated Hometown Insurance Agency (Hometown)/RSA Consultants to assist in the administration of the Program. The designated Program administrator's functions include providing basic annual administration services as follows: a) Providing participants enrollment forms; b) Providing an annual reminder letter with a review list for the current anniversary date; c) Preparation of Explanation of Plan Benefits; d) Calculation of Schedule of Benefits and cost annually; e) Participants' benefit calculation at time of severance or retirement; f) Auxiliary Fund valuation and suggested deposit; g) Summary of required annual contribution; h) Annual actuarial review and recommended benefit enhancements. Disbursements of Program assets for the payment of benefits or administrative expenses must be approved. The following is an explanation of the process for approving disbursements: Payment of benefits: 1. Entitlement benefits - When a participant becomes eligible to receive entitlement benefits, the Plan Sponsor prepares and submits an authorization letter to Hometown indicating the participant's name, address, age, social security number, term of service and other pertinent information. Hometown will then facilitate the disbursement of entitlement benefits. 2. Death benefits - Upon notification from the Plan Sponsor of a participant's death, Hometown forwards an individual claim form to the Plan Sponsor for, completion. The Plan Sponsor will then complete and return this form, accompanied by a death certificate, to Hometown, authorizing the disbursement of a death benefit. 3. Disability benefits - When a participant becomes disabled, the Plan Sponsor will notify Hometown in writing of a participant's total and permanent disability. Hometown will then verify that the participant has been declared 100% disabled by the Workers Compensation Board. Subsequent to this verification, Hometown will facilitate the disbursement of disability benefits. Sheehan i�r;ul Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT 3. Length of Service Awards Program (LOSAP) (continued): C; Payment of administrative expenses: 1. Per the executed Service Fee Agreement, the Plan Sponsor agrees to payment as contracted. Authority to invest Program assets is vested in Genworth Life Insurance Company of New York, New York Life Insurance Co. and First Security Benefit Life Insurance and Annuity Company of New York. Subject to restrictions in the Program document, Program assets are invested in accordance with a statutory "prudent person" rule. The Sponsor has invested plan funds in Group Annuity Contracts with guaranteed floor rates of interest of 3% per annum. ' The Sponsor is required to retain an actuary to determine the amount of the Sponsor's contributions to the Plan. The actuary retained by the Sponsor for this purpose is Harbridge Consulting Group, LLC. Portions of the following information are derived from a report prepared by the actuary dated April 2014. Program financial condition: Assets and liabilities: Actuarial present value of accrued benefits at December 31, 2013: Vested Non -vested Total present value of accrued benefits Accrued liability at January 1, 2014 Less assets available for benefits: -32- &COMPANY $1,432,919 11,955 $ 17,612 331,187 212,436 532,083 1 444 874* $1,591,922* 1,093,318 498,604** 498,604*** % of Total Empire National Bank 1.61% First Security Benefit Annuity 30.29% Genworth Financial Annuity 19.43% Cash value of life insurance 48.67% Total net assets available for benefits 100.00% Total unfunded liability as of January 1, 2014 Less unfunded liability for prior service Unfunded normal benefits -32- &COMPANY $1,432,919 11,955 $ 17,612 331,187 212,436 532,083 1 444 874* $1,591,922* 1,093,318 498,604** 498,604*** C, Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT 3. Length of Service Awards Program (LOSAP) (continued): Program financial condition (continued): Assets and liabilities: * Present value of vested accrued benefits and accrued liability were determined using different actuarial assumptions. ** The unfunded liability was recomputed as of January 1, 2014 to incorporate any actuarial or experience gains or losses which occurred in 2013. * * * Prior service costs are being amortized over a range of 23 to 10 years at a discount rate of 5.25%. Funded ratio: Assets $1,093,318 Accrued liability $1,591,922 Percent funded 68.7% Receipts and disbursements: Plan net assets, beginning of year Changes during the year: Plan contributions $ 35,000 Death claim 31,157 Investment income earned 18,511 Stripped cash value insurance 2,888 Plan benefit withdrawals (57,960) Bank Reversal (7,440) Decrease in cash value of life policies (A) (15,205) Plan net assets, end of year $1,086,367 6,951 1 093 318 (A) Decrease to life insurance policies is shown net, since it is impracticable to determine the amounts separately. Contributions: Range of Sponsor's contribution recommended by actuary $88,619 to $ 111,959 Amount of Sponsor's actual contribution $ 81,323 -33- &COMPANY 3. 4. 61 Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT Length of Service Awards Program (LOSAP) (continued): Administration fees: Fees paid to designated program administrator from separate District funds $ Funding methodology and actuarial assumptions: 3,900 Normal costs: The actuarial valuation methodology used by the actuary to determine the Sponsor's contribution is the Unit Credit Cost Method. The assumptions used by the actuary to determine the Sponsor's contribution and the actuarial present value of benefits are: Assumed rate of return on investment Mortality table used for: Pre -retirement: None Post-retirement: 1994 Group Annuity - Male Commitments and contingencies: 5.25% for determining contribution 6.00% for determining present value of accrued benefits 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. Leases: The District entered into a radio repeater ground lease agreement that commenced on June 5, 2014. The lease is a five year lease expiring on June 5, 2019. Rental payments are $3,500 in year one with an escalation of 3% per year thereafter. The lease agreement calls for a onetime payment of $18,582 which was due on June 5, 2014. This onetime payment will cover the life of the lease. Since the lease was not signed by the District until December 2014, this onetime payment is scheduled to be made during 2015. Accordingly, the District did not report any rental expense related to this lease for the years ended December 31, 2014 and 2013. -34- &COMPANY Fishers Island Fire District NOTES TO ANNUAL FINANCIAL REPORT UPDATE DOCUMENT 5. Leases (continued): The District has the right to extend the term of the lease for two successive five year terms, but not beyond June 5, 2029. The annual basic rent during each renewal term shall continue, including escalation, as though the basic rents set forth from the original term of this lease continue to escalate at a compounded annual rate of 3%. -35- &COMPANY Sheehan A PROFESSIONAL CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS 437 Madison Avenue, 29th Floor New York, NY 10022 • 212.962.4470 165 Orinoco Drive, Brightwaters, NY 11718 631.665.7040 • Fax: 631.665.7014 15 South Bayles Avenue, Port Washington, NY 11050 516.883.5510 • Fax: 516.767.7438 www.sheehancpa.com INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED �= ON AN AUDIT OF ANNUAL FINANCIAL REPORT UPDATE DOCUMENT PERFORMED IN ACCORDANCE WITH GOVERIVMENTAUDITING STANDARDS To the Board of Fire Commissioners Fishers Island Fire District Fishers Island, New York We have audited, in accordance with the 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 Annual Financial Report Update Document of Fishers Island Fire District (the District), as of and for the year ended December 31, 2014 and the related notes to the Annual Financial Report Update Document and have issued our report thereon dated March 4, 2015. Internal Control Over Financial Reporting In planning and performing our audit of the Annual Financial Report Update Document, we considered the District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the Annual Financial Report Update Document but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do not express an opinion on the effectiveness of the District's internal control. 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. A significant deficiency is a deficiency, or a combination of deficiencies, in. internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. -36- An Independent Member of BDO Alliance USA To the Board of Fire Commissioners Fishers Island Fire District Fishers Island, New York Compliance and Other Matters As part of obtaining reasonable assurance about whether the District's Annual Financial Report Update Document is free from 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 Annual Financial Report Update Document 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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Brightwaters, New York March 4, 2015 s