HomeMy WebLinkAbout2014 FI Waste Management (2)FISHERS ISLAND WASTE MANAGEMENT DISTRICT
State of New York
FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION WITH
INDEPENDENT AUDITOR'S REPORT
December 31, 2014
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
TABLE OF CONTENTS
Paee
Independent Auditor's Report 1
Management's Discussion and Analysis (MD&A) 3
Basic Financial Statements:
Statement of Net Position 9
Statement of Activities 10
Balance Sheet - Governmental Funds 11
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 12
Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 13
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Statement of Activities 14
Notes to the Financial Statements 15
Required Supplementary Information other than MD&A:
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual - General Fund 21
CULLEN & DANOWSKI, LLP____
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Board of Commissioners
Fishers Island Waste Management District
Southold, New York
V[NC:f NT I). CIJLLI?N, CPA
(1 9s0 - 2273)
JAME'S E. DANOWSKI, CPA
PETER F. RODRIGUEZ, CPA
JILL S. SANDERS, CPA
DONALD J. HOFFMANN, C'I'A
CHRISY4OPHER V. REINO, CPA
.ALAN YIJ, CPA
We have audited the accompanying financial statements of the governmental activities and each major fund of the
Fishers Island Waste Management District (District), a component unit of the Town of Southold, New York, as of and
for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise
the District's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America; this includes the design, implementation,
and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial
statements 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 accounting estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
1650 ROUTE 112, PORT JEFFERSON STATION, NEW YORK 11776-3060
PHONE: 631-473-3400 • FAX: 631-473-4863 • WWWCDLLP.NET
Opinions
In our opinion, the financial statements referred to previously present fairly, in all material respects, the respective
financial position of the governmental activities and each major fund of the Fishers Island Waste Management
District as of December 31, 2014, and the respective changes in financial position for the year then ended in
conformity with accounting principles generally accepted in the United States of America.
Other Matters - Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management's discussion and
analysis and budgetary comparison information on pages 3 through 8 and 21, be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management about the
methods of preparing the information and comparing the information for consistency with management's
responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the
basic financial statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
June 30, 2015
.2.
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
The Fishers Island Waste Management District's (District) discussion and analysis of the financial performance
provides an overall review of the District's financial activities for the fiscal year ended December 31, 2014. The
intent of this discussion and analysis is to look at the District's financial performance as a whole. This should be
read in conjunction with the financial statements, which immediately follow this section.
1. FINANCIAL HIGHLIGHTS,
Key financial highlights for fiscal year 2014 are as follows:
The District had a decrease in net position and fund balance of $176,586 for the year ended December
31, 2014.
s The District's net position and fund balance were $3,493,280 at December 31, 2014,
2. OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of three parts - Management's Discussion and Analysis (MD&A) (this section), the
basic financial statements, and required supplementary information. The basic financial statements consist of
government -wide financial statements, fund financial statements, and notes to the financial statements. A
graphic display of the relationship of these statements follows:
A. Government -Wide Financial Statements
The government -wide financial statements are organized to provide an understanding of the fiscal
performance of the District as a whole in a manner similar to a private sector business. There are two
government -wide financial statements - the Statement of Net Position and the Statement of Activities.
These statements provide both an aggregate and long-term view of the District's finances.
-3-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
These statements utilize the accrual basis of accounting. This basis of accounting recognizes the financial
effects of events when they occur, without regard to the timing of cash flows related to the events.
TIM tatetnent of Nit Position
The Statement of Net Position presents information on all of the District's assets and liabilities, with the
difference between the two reported as net position. Increases or decreases in net position may serve as
a useful indicator of whether the financial position of the District is improving or deteriorating.
h ., Statem. 21pf Activiti,
The Statement of Activities presents information showing the change in net position during the fiscal
year. All changes in net position are recorded at the time the underlying financial event occurs.
Therefore, revenues and expenses are reported in the statement for some items that will result in cash
flow in future fiscal periods.
B. Fund Financial Statements
The fund financial statements provide more detailed information about the District's funds, not the District
as a whole. A fund is a grouping of related accounts that is used to maintain control over resources that
have been segregated for specific activities or objectives. The District may use fund accounting to ensure
compliance with finance -related legal requirements. The funds of the District are reported in the
governmental funds.
These statements utilize the modified accrual basis of accounting. This basis of accounting recognizes
revenues in the period that they become measurable and available. It recognizes expenditures in the
period that they become measurable, funded through available resources and payable within a current
period.
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government -wide financial statements. However, the governmental fund financial
statements focus on shorter term inflows and outflows of spendable resources, as well as on balances of
spendable resources available at the end of the fiscal year for spending in future years. Consequently, the
governmental fund statements provide a detailed short-term view of the District's operations and the
services it provides.
Because the focus of governmental funds is narrower than that of government -wide financial statements, it
is useful to compare the information presented for governmental funds with similar information presented
for governmental activities in the government -wide financial statements. By doing so, you may better
understand the long-term impact of the District's near-term financing decisions. During the current year,
there are no differences in the government -wide financial statements and the governmental fund financial
statements; therefore no reconciliation of these statements is necessary.
The District maintains one individual governmental fund, the general fund.
-4.
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
3. FINANCIAL F THE DISTRICT AS A WHOLE
A. Net Position
The District's total net position decreased by $176,586 between fiscal year 2014 and 2013. A summary of
the District's Statement of Net Position is as follows:
Current and Other Assets
Capital Assets, Net
Total Assets
Current and Other Liabilities
Net Position
Net investment in capital assets
Unrestricted
Total Net Position
Increase Percentage
2014 2013 (Decrease) Change
$ 750,420 $ 1,160,458 $ (410,038)
2,883,343 2,660,809 222,534
3,633,763 3,821,267 (187,504)
140,483
151,401 (10,918)
2,883,343 2,660,809 222,534
609,937 1,009,057 (399,120)
$ 3,493,280 $ 3,669,866 $176,586
(35.33)%
8.36 %
(4.91)%
(7.21)%
8.36 %
(39.55)%
(4.81)%
Current and other assets decreased by $410,038, primarily as a result of purchases of capital assets,
Current and other liabilities decreased by $10,918 as a result of an increase in payroll taxes payable offset
by a decrease in unearned credits.
The net investment in capital assets in the amount of $2,883,343 relates to capital assets at cost less
depreciation. This number increased over the prior year as follows:
Capital asset additions $ 350,516
Depreciation expense (127,982)
$ 222,534
.5-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
B. Changes in Net Position
The results of this year's operations as reported in the Statement of Activities are as follows:
Revenues
Program Revenues
Charges for Services
Operating Grants
General Revenues
Real Property Taxes
Other
Total Revenues
Expenses
General government support
Increase / (Decrease) in Net Position
Increase Percentage
( .
2014 2013 Decrease Canae,
$ 48,812 $ 42,997 $ 5,815 13.52 %
11,517 (11,517) (100.00)%
547,714
3,870
600,396
536,950
3,872
595,336
10,764 2.00 %
(0.05)%
5,060 0.85 %
776,982 557,155 219,827
(176,586) $ 38,181 $ 214,767)
39.46 %
(562.50)%
The District primarily relies on real property taxes to support its operations. The net increase in total
revenues in 2014 as compared to 2013 was $5,060 as shown above.
The total expenses in 2014 was $219,827 or 39.46% higher than 2013. In 2014, the District had increased
payroll and related expenses of $108,871 due to additional personnel being hired.
pK41.0#11 all
At December 31, 2014, the general fund, which is the only governmental fund, reported a fund balance of
$609,937, which is a decrease of $399,120 from the prior year. This decrease is due to expenditures in excess
of revenues for the fiscal year, and is the same as the change in unrestricted net position.
General Fund
Nonspendable: Prepaids
Assigned: Designated
Unassigned: Fund balance (deficit)
Increase
2014 2013 (Decrease)
$ 23,398
586,539
$ 28,774
993,157
12,874
$ (5,376)
(406,618)
12,874
$ 609,937 $ 1,009,057 $ (399,120)
1 C .11, I.. 11
A. 2014 Budget
The District's general fund original budget for the year ended December 31, 2014 was $965,935.
The budget was primarily funded by real property taxes.
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
B. Change in General Fund's Unassigned Fund Balance (Budget to Actual)
The general fund's unassigned fund balance is the component of total fund balance that is the residual of
prior years' excess revenues over expenditures, net of transfers to restricted fund balances and
assignments, such as amounts to fund the subsequent year's budget. It is this balance that is commonly
referred to as the "Fund Balance." The change in this balance demonstrated through a comparison of the
actual revenues and expenditures for the year compared to budget follows:
Opening, Unassigned Fund Balance (Deficit) $ (12,874)
Revenues Under Budget
Expenditures Over Budget
(3,293)
(33,581)
Net Change in Nonspendable Fund Balance 5,376
Net Change in Assigned Fund Balance 44,372
Closing, Unassigned Fund Balance
ni .l 5si ned. Fund Bd, n
The $(12,874) shown in the table is the deficit portion of the District's December 31, 2013 fund balance
that was unassigned.
Revenues Over Bud e
The 2014 budget for revenues was $547,689 from real property taxes, $56,000 from the compost facility
and $362,246 from fund balance. Actual revenues received for the year were $600,396. Actual revenues
were less than estimated or budgeted revenues by $3,293. This change decreased the unassigned portion
of the general fund - fund balance from December 31, 2013 to December 31, 2014.
Expenditures 1 e r B t
The 2014 budget for expenditures was $965,935. Actual expenditures for 2014 were $999,516. The final
budget was over expended by $33,581. This over expenditure was primarily the result of higher than
anticipated personnel. This over expenditure decreases the unassigned portion of the general fund - fund
balance from December 31, 2013 to December 31, 2014.
N.-. t Change in Assigned Fun-d—B—a—U—n—ce
The net change of $44,372 in assigned fund balance is the result of the decrease from 2013 to 2014 of
$406,618, plus the amount of $362,246 appropriated to fund the 2014 budget.
Closing. Una sigad Fund. Balance.
Based upon the summary changes shown in the above table, the District will begin the 2015 fiscal year
with an unassigned fund balance of $-0-. This is an increase of $12,874 over the prior year unassigned
fund balance.
-7-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
6. CAPITAL ASSETS AND LONG-TERM DEBT
At December 31, 2014, the District had invested in a broad range of capital assets, as indicated in the table
below. The net increase in capital assets is due to capital additions of $350,516 less depreciation recorded of
$127,982 for the year ended December 31, 2014. A summary of the District's capital assets, net of
depreciation at December 31, 2014 and 2013 is as follows:
Land
Buildings and improvements
Machinery and equipment
Capital assets, net
2014
$ 517,262
1,954,485
411,596
Increase
2013 __ Decrease
$ 517,262 $
2,047,237 (92,752)
96,310 315,286
$ 2,883,343 $ 2,660,809 $ 222,534
7. ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
A. Subsequent Year's Budget
The general fund budget for the year ending December 31, 2015 is $610,540. This is a decrease of
$355,395 or 36.79% from the previous year's budget. The District budgeted property tax revenues at a
$10,954 increase over the prior year's estimate.
B. Tax Cap
Chapter 97 of the 2011 Laws of New York limits the increase in the property tax levy of local governments
to the lesser of 2% or the rate of inflation. There are additional statutory adjustments in the law. Local
governments may override the tax levy limit by first passing a local law that allows for the tax levy limit to
be exceeded. The override vote requires a 60% vote of the total voting power of the governing board. The
District's 2015 tax levy is within the tax levy limit.
8. CONTACTING THE DISTRICT
This financial report is designed to provide the reader with a general overview of the District's finances and to
demonstrate the District's accountability for the funds it receives. Requests for additional information can be
directed to:
Ann Banks, Chairwoman
Fishers Island Waste Management District
P.O. Box 22
Fishers Island, NY 06390
-8-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Statement of Net Position
December 31, 2014
ASSETS
Cash
$ 9,885
Investments
596,971
Due from Town of Southold
120,166
Prepaids
23,398
Capital assets:
Not being depreciated - land
517,262
Being depreciated, net of accumulated depreciation
2,366,,081
Total Assets
3,633,763
LIABILITIES
Payables
Accounts payable 8,362
Payroll taxes payable 11,955
Unearned credits
Collections in advance 120,166
Total Liabilities 140,483
NET POSITION
Net investment in capital assets 2,883,343
Unrestricted 609,937
Total Net Position $ 3,493,280
See Notes to Financial Statements -91
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Statement of Activities
For The Year Ended December 31, 2014
Net (Expense)
Program Revenues Revenue and
Charges for Changes in
Expenses Services Net Position
FUNCTIONS/PROGRAMS
General government support $ 776,982 $ $ (776,982)
Compost facility 48,812 48,812
Total Functions and Programs $ 776,982 $ 48,812 (728,170)
GENERAL REVENUES
Real property taxes 547,714
Use of money and property 3,870
Total General Revenues 551,584
Change in Net Position (176,586)
Total Net Position - Beginning of Year 3,669,866
Total Net Position - End of Year $ 3,493,280
See Notes to Financial Statements -10-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Balance Sheet - Governmental Funds
December 31, 2014
See Notes to Financial Statements - 11-
Total
Governmental
General
Funds
ASSETS
Cash
$
9,885
$
9,885
Investments
596,971
596,971
Due from other governments
120,166
120,166
Prepaids
23,398
23,398
Total Assets
$
750,420
$
750,420
LIABILITIES
Payables
Accounts payable
$
8,362
$
8,362
Payroll taxes payable
11,955
11,955
Unearned credits
Collections in advance
120,166
120,166
Total Liabilities
140,483
140,483
FUND BALANCES
Nonspendable: Prepaids
23,398
23,398
Assigned, Designated for:
Designated for:
Compost facility / monitoring
217,150
217,150
Equipment purchases
46,081
46,081
Compost facility / equipment
22,500
22,500
Wages
100,000
100,000
Consulting
60,000
60,000
Unallocated
140,808
140,808
Unassigned: Fund balance
-
Total Fund Balances
609,937
609,937
Total Liabilities and Fund Balance
$
750,420
$
750,420
See Notes to Financial Statements - 11-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
December 31, 2014
Total Governmental Fund Balances $ 609,937
Amounts reported for governmental activities in the Statement of Net Position
are different because:
The cost of building and acquiring capital assets (land, buildings,
equipment) financed from the governmental funds are reported as
expenditures in the year they are incurred, and the assets do not appear
on the Balance Sheet. However, the Statement of Net Position includes
those capital assets among the assets of the District as a whole, and their
original costs are expensed annually over their useful lives.
Original cost of capital assets $ 4,009,302
Accumulated depreciation (1,125,959)
2,883,343
Total Net Position $ 3,493,280
See Notes to Financial Statements -12-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Statement of Revenues, Expenditures
and Changes in Fund Balances - Governmental Funds
For The Year Ended December 31, 2014
REVENUES
Real property taxes
Use of money and property
Compost facility
Total Revenues
EXPENDITURES
General government support
Transportation
Employee benefits
Capital outlay
Total Expenditures
Deficiency of Revenues
Over Expenditures
Fund Balances -
Beginning of Year
End of Year
See Notes to Financial Statements
Total
Governmental
General
Funds
$ 547,714
$ 547,714
3,870
3,870
48,812
48,812
600,396
600,396
518,964
518,964
55,323
55,323
74,713
74,713
350,516
350,516
999,516
999,516
(399,120)
(399,120)
1,009,057
1,009,057
$ 609,937
$ 609,937
See Notes to Financial Statements
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and
Changes in Fund Balances to the Statement of Activities
For The Year Ended December 31, 2014
Net Change in Fund Balances
Amounts reported for governmental activities in the Statement of Activities
are different because:
QAWja,Related Dift4
Capital outlays to purchase or build capital assets are reported in
governmental funds as expenditures. However, for governmental
activities those costs are capitalized and shown in the Statement of Net
Position and allocated over their useful lives as annual depreciation
expenses in the Statement of Activities. This is the amount by which
capital outlays exceeded depreciation in the period.
Capital outlays
Depreciation expense
Change in Net Position (Deficit) of Governmental Activities
$ 350,516
127,982
(399,120)
222,534
$176,580
See Notes to Financial Statements -14-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY QE SJGNIFJCANTACCQUNIUIJG IE
Fishers Island Waste Management District (District) is governed by Town Law and other general laws of the
State of New York. The Board of Commissioners is the legislative body responsible for overall operations. The
Board of Commissioners consists of five members. The primary function of the District is to provide safe and
efficient disposal of household garbage, furniture, appliances, recyclables, construction waster, yard and
landscaping debris.
The financial statements of the District have been prepared in conformity with accounting principles
generally accepted in the United States of America (GAAP) for governmental units. The Governmental
Accounting Standards Board (GASB) is the standard-setting body for establishing governmental accounting
and financial reporting principles. The more significant of these accounting policies are as follows:
A. Financial Reporting Entity
The Town of Southold, New York (Town) is financially accountable, as a result of fiscal dependency, for the
District. Long-term debt and operating deficits (if any) of the District, which are backed by the full faith
and credit of the Town, and other fiscal matters, result in a fiscal interdependency with the Town.
Accordingly, the District has been determined to be a component unit of the Town of Southold, New York.
B. Basis of Presentation
Fund Financial Statements
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 accounted for with a separate set of self -balancing
accounts that comprise its assets, liabilities, fund balances, revenues and expenditures, which are
segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance
with special regulations, restrictions or limitations. The various funds are summarized by type in the
financial statements. Accordingly, the District maintains the following fund type:
General Fund - is the general operating fund and is used to account for all financial transactions except
those required to be accounted for in another fund.
C. Basis of Accounting and Measurement Focus
The government -wide financial statements are reported on the accrual basis of accounting using the
economic resources measurement focus. Revenues are recorded when earned and expenses are recorded
at the time liabilities are incurred, regardless of when the related cash transaction takes place. Non-
exchange transactions, in which the District gives or receives value without directly receiving or giving
equal value in exchange, include real property taxes. On an accrual basis, revenue from real property taxes
is recognized in the fiscal year for which the taxes are levied.
The governmental fund statements are reported on the modified accrual basis of accounting using the
current financial resources measurement focus. Revenues are recognized when measurable and available.
The District considers all revenues reported in the governmental funds to be available if the revenues are
collected within 60 days after the end of the fiscal year. Expenditures are recorded when the related fund
liability is incurred, except for principal and interest on general long-term debt and claims and judgments,
which are recognized as expenditures to the extent they have matured. General capital asset acquisitions
are reported as expenditures in the governmental funds.
-is-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
D. Real Property Taxes
Property taxes are collected by the Town of Southold Receiver of Taxes on behalf of the District. The Town
of Southold Receiver of Taxes collects all property taxes for the Town, Suffolk County, Town Special
Districts and School Districts. Town and County taxes are levied annually, and are due by October 1St. The
Town remits the amount of real property tax levied to the District from December to June. Responsibility
for collection of unpaid taxes is assumed by Suffolk County. At December 31, 2014, $120,166 was due from
the Town.
E. Budgetary Data
P,,
The District prepares an annual budget for the general fund, on a basis consistent with generally accepted
accounting principles, which is approved by the Board of Commissioners. The budget is then submitted to
the Town of Southold for inclusion in the Town budget and a public hearing is held thereon.
Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other commitments for the
expenditure of monies are recorded for budgetary control purposes to reserve that portion of the
applicable appropriations, is employed in the general fund. Encumbrances are reported as assignments of
fund balance, since they do not constitute expenditures or liabilities. Expenditures for such commitments
are recorded in the period in which the liability is incurred. Encumbrances are shown in the fund financial
statements only. There were no encumbrances at December 31, 2014.
F. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the
reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported revenues and expenses during the reporting period.
Accordingly, actual results could differ from those estimates. Estimates and assumptions are made in a
variety of areas, including potential contingent liabilities.
G. Cash and Cash Equivalents/Investments
Cash and cash equivalents consist of cash on hand, bank deposits and investments with a maturity date of
three months or less from date of acquisition.
Investments are reported at fair value, based on quoted market prices.
H. Prepaid Items
Prepaid items represent payments made by the District for which benefits extend beyond year-end. These
payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid
items in both the district -wide and fund financial statements. These items are reported as assets on the
Statement of Net Position and Balance Sheet using the consumption method. Under the consumption
method, a current asset for the prepaid amounts is recorded at the time of purchase and an
expense/expenditure is reported in the year the goods or services are consumed.
-16-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
I. Capital Assets
Capital assets are reflected in the district -wide financial statements. Capital assets purchased or acquired
with an original cost of $10,000 or more are reported at actual cost, when the information is available, or
estimated historical cost based on professional third -party information. Donated assets are reported at
estimated fair market value at the date of donation.
All capital assets, except land and construction in progress, are depreciated on a straight line basis over
their estimated useful lives. Costs incurred for repairs and maintenance are expensed as incurred.
Estimated useful lives of capital assets as reported in the district -wide statements are as follows:
Estimated
Useful Life
Buildings 20-40 years
Improvements and other 15-30 years
Machinery and equipment 8-10 years
Infrastructure 25 years
I. Collections in Advance
Collections in advance arise when resources are received by the District before it has a legal claim to them,
as when grants monies are received prior to the incurrence of qualifying expenditures or when charges for
services monies are received in advance from payers prior to the services being rendered by the District.
These amounts are recorded as liabilities in the financial statements. The liabilities are removed and
revenues are recognized in subsequent periods when the District has legal claim to the resources.
K. Equity Classifications
District -Wide Statements
In the district -wide statements there are three potential classes of net position:
Net investment in capital assets - consists of net capital assets (cost less accumulated depreciation)
reduced by outstanding balances of related debt obligations from the acquisitions, construction and
improvements of those assets.
Restricted - reports net position when constraints placed on the assets or deferred outflows of
resources are either externally imposed by creditors (such as through debt covenants), grantors,
contributors, or laws or regulations of other governments, or imposed by law through constitutional
provisions or enabling legislation.
Unrestricted - reports the balance of net position that does not meet the definition of the above two
classifications.
The District's net position consists of net investment in capital assets and unrestricted resources.
Fund Statements
The fund statements report fund balance classifications according to the relative strength of spending
constraints placed on the purpose for which resources can be used, as follows:
-17-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
Nonspendable - Consists of amounts that are inherently nonspendable in the current period either
because of their form or because they must be maintained intact. Nonspendable fund balance consists
of prepaids.
Assigned - Consists of amounts that are subject to a purpose constraint that represents an intended use
established by the District's Board of Commissioners. The purpose of the assignment must be
narrower than the purpose of the general fund.
Unassigned - represents the residual classification for the District's general fund and could report a
surplus or deficit.
2. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENTS AND,
THE DISTRICT -WIDE STATEMENTS
Due to the differences in the measurement focus and basis of accounting used in the governmental fund
statements and the district -wide statements, certain financial transactions are treated differently. The basic
financial statements contain a full reconciliation of these items. The differences result primarily from the
economic resource measurement focus of the District -wide statements, compared with the current financial
resource measurement focus of the governmental funds.
A. Total Fund Balances of Governmental Funds vs. Net Position of Governmental Activities
Total fund balances of the District's governmental funds differ from "net position" of governmental
activities reported in the Statement of Net Position. This difference primarily results from the long-term
economic focus of the Statement of Net Position versus the solely current financial resources focus of the
governmental fund Balance Sheet.
B. Statement of Revenues, Expenditures and Changes in Fund Balance vs. Statement of Activities
Differences between the Statement of Revenues, Expenditures and Changes in Fund Balance and the
Statement of Activities fall into one of three broad categories.
Ung -Term Revenue acid Expense Differences,
Long-term revenue differences arise because governmental funds report revenues only when they are
considered "available", whereas the Statement of Activities reports revenues when earned. Differences in
long-term expenses arise because governmental funds report on a modified accrual basis, whereas the
accrual basis of accounting is used on the Statement of Activities.
Capital Related Differ en
Capital related differences include the difference between proceeds from the sale of capital assets
reported on fund statements and the gain or loss on the sale of assets as reported on the Statement of
Activities, and the difference between recording an expenditure for the purchase of capital items in the
fund statements and depreciation expense on those items as recorded in the Statement of Activities.
Lo --T r Differences
Long-term debt transaction differences occur because the issuance of long-term debt provides current
financial resources to governmental funds, but is recorded as a liability in the Statement of Net Position.
In addition, both interest and principal are recorded as expenditures in the fund statements when due
and payable, whereas interest expense is recorded in the Statement of Activities as it accrues, and
principal payments are recorded as a reduction of liabilities in the Statement of Net Position.
-18-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
3. STEWARDStilP. COMPLIANCE AND ACCOUNTABILITY
A. Budgets
The District administration prepares a proposed budget for approval by the Board of Commissioners for
the general fund, the only fund with a legally adopted budget.
Appropriations are adopted at the program line item level.
Appropriations established by the adoption of the budget constitute a limitation on expenditures (and
encumbrances) that may be incurred. Appropriations authorized for the year are increased by the amount
of encumbrances carried forward from the prior year. Appropriations lapse at the end of the fiscal year
unless expended or encumbered. Encumbrances will lapse if not expended in the subsequent year.
Appropriations authorized for the current year can be funded by the planned use of specific reserves, and
can be increased by budget amendments approved by the Board of Education as a result of selected new
revenue sources not included in the original budget (when permitted by law) and appropriation of fund
balances. These supplemental appropriations may occur subject to legal restrictions, if the Board approves
them because of a need that exists which was not determined at the time the budget was adopted. No
supplemental appropriations occurred during the year.
Budgets are adopted annually on a basis consistent with GAAP.
Budgets are established and used for individual capital project funds expenditures as approved by a special
referendum of the District's voters. The maximum project amount authorized is based primarily upon the
cost of the project, plus any requirements for external borrowings, not annual appropriations. These
budgets do not lapse and are carried over to subsequent fiscal years until the completion of the projects.
B. Encumbrances
Encumbrance accounting is used for budget control and monitoring purposes and is reported as a part of
the governmental funds. Under this method, purchase orders, contracts and other commitments for the
expenditure of monies are recorded to reserve applicable appropriations. Outstanding encumbrances as of
year-end are presented as part of other assigned, unappropriated fund balance, unless classified as
restricted, 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.
4. DEPOSITS WITH FINANCIAL INSTITUTIONS AND INVESTMENTS,
The District's investment policies are governed by state statutes and District policy. Resources must be
deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks or trust companies
located within the state. Permissible investments include obligations of the U.S. Treasury and U.S. Agencies,
repurchase agreements and obligations of New York State or its localities. Collateral is required for demand
and time deposits and certificates of deposit not covered by FDIC insurance. Obligations that may be pledged
as collateral are obligations of the United States and its Agencies and obligations of New York State and its
municipalities. Investments are stated at fair value.
Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned
to it. GASB directs that deposits be disclosed as exposed to custodial credit risk if they are not covered by
depository insurance and the deposits are as follows:
-19-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
A. Uncollateralized,
B. Collateralized by securities held by the pledging financial institution, or
C. Collateralized by securities held by the pledging financial institution's trust department or agent but
not in the District's name.
None of the District's aggregate bank balances, not covered by depository insurance, were exposed to
custodial credit risk as described above at year end.
At December 31, 2014, the District had investments in certificates of deposit. The District was not exposed to
any material interest rate risk or foreign currency risk.
S. CAPITAL ASSET
Capital asset balances and activity for the year ended December 31, 2014 were as follows:
Governmental activities
Capital assets not being depreciated
Land
Total capital assets
not being depreciated
Capital assets being depreciated
Buildings and improvements
Machinery and equipment
Total capital assets
being depreciated
Less accumulated depreciation for:
Buildings and improvements
Machinery and equipment
Total accumulated depreciation
Total capital assets,
being depreciated, net
Capital assets, net
Balance
12Z31/13 Additions
$ 517,262 $
517,262
2,777,213
364,311 350,516
3,141,524 350,516
729,976 92,752
268,001 35,230
997„977 127,982
2,143,547
222,534
Balance
Reductions 12/31/14
$ $ 517,262
517,262
$ 2,660,809 $ 222,534 $
2,777,213
714,827
3,492,040
822,728
303,231
1,125,959
2,366,081
$ 2,883,343
Depreciation expense in the amount of $127,982 was charged to general governmental support.
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; and natural disasters. These risks are covered by commercial
insurance purchased from independent third parties. Settled claims from these risks have not exceeded
commercial insurance coverage for the past three years.
-20-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - General Fund
For The Year Ended December 31, 2014
REVENUES
Local Sources
Real Property Taxes
Use of Money & Property
Compost Facility
Total Revenues
APPROPRIATED FUND BALANCE
Approriation of fund balance
Original Final
Budget Bud et Actual
$ 547,689 $ 547,689 $ 547,714
3,870
56,000 56,000 48,812
603,689 603,689 600,396
362,246 362,246
Total Revenues and Appropriated
Fund Balance $ 965,935 $ 965,935
EXPENDITURES
Accounting
Bank Charges
Building & Maintenance
Building Utilities
Casual Labor
Commissioner's Fees
Compost Equipment Maintenance
Compost Facility Utilities
Consultants
Employee Benefits, Payroll & Wages
Employee Training
Equipment
Equipment Maintenance
Ferry Transportation
Garbage Tipping Fees & Hauling
Hazardous Waste Removal
Insurance
Compost Facility Maintenance
Legal Fees
Office Expense
Transfer Station Utilities
Transfer Station Improvements
Workers' Compensation
Total Expenditures
Net Change in Fund Balance
Fund Balances - Beginning of Year
Fund Balances - End of Year
12,000
3,000
5,000
13,000
12,000
17,754
4,000
5,000
259,300
2,500
362,246
25,000
70,000
92,000
18,000
25,000
10,000
10,000
5,635
4,500
10,000
12,000
3,000
5,000
13,000
12,000
17,754
4,000
5,000
259,300
2,500
362,246
25,000
70,000
92,000
18,000
25,000
10,000
10,000
5,635
4,500
10,000
$ 965,935 $ 965,935
Note to Required Supplementary Information
7,500
3,435
7,557
11,021
6,505
10,356
18,460
3,038
25,457
292,260
2,852
350,516
23,915
55,323
78,515
15,181
27,375
6,950
6,927
7,749
2,768
27,020
8,836
Final Budget
Variance with
Actual
$ 25
3,870
(7,188)
$ (3,293)
$ 4,500
(435)
(2,557)
1,979
(6,505)
1,644
(706)
962
(20,457)
(32,960)
(352)
11,730
1,085
14,677
13,485
2,819
(2,375)
3,050
3,073
(2,114)
1,732
(17,020)
(8,836
999,516 $ 33,581)
(399,120)
1,009,057
$ 609,937
fludW-&i.5j,N..Qf-Aco ati g
Budgets are adopted on the modified accrual basis of accounting consistent with accounting principles generally accepted
in the United States of America.
See Paragraph on Required Supplementary Information Included in Auditor's Report -21-