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HomeMy WebLinkAbout2015 MATTITUCK FIRE DISTRICT AUDITED FINANCIAL STATEMENTS Year Ended December 31, 2015 TABLE OF CONTENTS Page No. INDEPENDENT AUDITORS' REPORT 1-2 FINANCIAL STATEMENTS Balance Sheet—Governmental Fund 3 Statement of Revenues, Expenditures and Changes in Fund Balance—Governmental Fund 4 Statement of Assets and Liabilities—Fiduciary Fund 5 Notes to Financial Statements 6-23 REQUIRED SUPPLEMENTARY INFORMATION General Fund—Schedule of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual 24 General Fund—Schedule of Detailed Expenditures and Appropriations 25-26 OTHER REPORT Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 27-28 -1- CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT To Board of Fire Commissioners Mattituck Fire District Mattituck, New York Report on the Financial Statements We have audited the accompanying financial statements of the Mattituck Fire District, New York which comprise the Balance Sheet—Governmental Fund, Statement of Revenues, Expenditures and Changes in Fund Balance— Governmental Fund, the Statement of Assets and Liabilities— Fiduciary Fund and the related notes to the financial statements as of and for the year ended December 31, 2015. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting practices prescribed or permitted by the Office of the New York State Comptroller's, Uniform System of Accounts for Fire Districts. Management is also responsible for 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 error or fraud. Auditors' Responsibility Our responsibility is to express an opinion 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 and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 auditors'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 Mattituck Fire District, New York'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 Mattituck Fire District, New York'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 opinion. PERSONAL SERVICE.TRUSTED ADVICE. —< ALBRECHT,VIGGIANO,ZURECK&COMPANY, PC 245 PARK AVENUE,39TH FLOOR 25 SUFFOLK COURT NEW YORK, NY 10167 HAUPPAUGE, NY 11788-3715 T 212 792 4075 T:631.434 9500 F.631 434.9518 www.avz.com INDEPENDENT MEMBER OF BKR INTERNATIONAL -2- Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles As described in Note 1 C, these financial statements are prepared on the accounting practices prescribed or permitted by the Office of the New York State Comptroller's, Uniform System of Accounts for Fire Districts which is a basis of accounting other than accounting principles generally accepted in the United States of America. The effects on the financial statements of the variances between the regulatory basis of accounting described in Note 1C and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. Adverse Opinion on U.S. Generally Accepted Accounting Principles In our opinion, because of the significance of the matter discussed in the "Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles" paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Mattituck Fire District, New York as of December 31, 2015, or changes in financial position for the year then ended. Unmodified Opinion on Regulatory Basis of Accounting In our opinion, the financial statements referred to in the first paragraph present fairly, in all material respects, the assets, liabilities and fund balance of the Mattituck Fire District, New York as of December 31, 2015, and the change in fund balance for the year then ended, in accordance with accounting practices prescribed or permitted by the Office of the New York State Comptroller's, Uniform System of Accounts for Fire Districts as described in Note 1C. Other Matters Required Supplementary Information The accounting practices prescribed or permitted by the Office of the New York State Comptroller's, Uniform System of Accounts for Fire Districts which is a basis of accounting other than accounting principles generally accepted in the United States of America requires that the accompanying financial information listed as required supplementary information in the table of contents be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the accounting practices prescribed or permitted by the Office of the New York State Comptroller's, Uniform System of Accounts for Fire Districts which is a basis of accounting other than accounting principles generally accepted in the United States of America, which consider it to be an essential part of financial reporting for placing the 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 financial statements, and other knowledge we obtained during our audit of the 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 25, 2016 on our consideration of the Mattituck Fire District, New York'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 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 the Mattituck Fire District, New York's internal control over financial reporting and compliance. r CUJA.J4- V i wr--‘1 Wi.A.J. CA-.-sy_i ,p -_, Hauppauge, New York March 25, 2016 -3- MATTITUCK FIRE DISTRICT GOVERNMENTAL FUND GENERAL FUND BALANCE SHEET December 31, 2015 ASSETS Cash $ 790,582 Cash in special reserves 1,746,607 Total Assets $ 2,537,189 LIABILITIES Accounts payable $ 48,852 Accrued expenses 4,458 Total Liabilities 53,310 FUND EQUITY Restricted 1,764,451 Assigned 81,180 Unassigned 638,248 Total Fund Equity 2,483,879 Total Liabilities and Fund Equity $ 2,537,189 See notes to financial statements. -4- MATTITUCK FIRE DISTRICT GOVERNMENTAL FUND GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 2015 REVENUES Real property taxes $ 1,890,426 Interest and earnings 3,477 Insurance recoveries and refunds 3,101 Miscellaneous income 20 Total Revenues 1,897,024 EXPENDITURES Personal services 190,096 Equipment and capital outlay 105,484 Fire protection 548,674 Employee benefits 379,647 Debt service 212,377 Total Expenditures 1,436,278 Net Change in Fund Balance 460,746 Fund Balance at Beginning of Year 2,023,133 Fund Balance at End of Year $ 2,483,879 See notes to financial statements. -5- MATTITUCK FIRE DISTRICT FIDUCIARY FUND STATEMENT OF ASSETS AND LIABILITIES December 31, 2015 ASSETS Service award program assets $ 3,648,126 Total Assets $ 3,648,126 LIABILITIES Service awards $ 3,648,126 Total Liabilities $ 3,648,126 See notes to financial statements. -6- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Mattituck Fire District (the "District"), which was established in 1905, is governed by Town Law and other general laws of the State of New York. The governing body of the District is the Board of Fire Commissioners which consists of five commissioners all of whom are elected to five year terms. The primary function of the District is to provide fire protection services to the community. Services such as firefighting,fire prevention, and public education support the primary function. The more significant of the District's accounting policies are described below. A. REPORTING ENTITY The financial reporting entity includes all functions and activities over which the elected officials exercise responsibility. No other governmental organizations have been included or excluded from the reporting entity. B. FUND FINANCIAL STATEMENTS The financial statements of the District have not been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The District prepares these financial statements on a prescribed basis of accounting that demonstrates compliance with the regulatory basis of accounting and budget laws of the State of New York, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. 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 presented by type in the fund financial statements. Accordingly,the District maintains the following fund types: Governmental Funds-Governmental funds are those through which most governmental functions are financed. The acquisition, use and balances of expendable financial resources and the related liabilities are accounted for through governmental funds. The measurement focus of the governmental funds is upon determination of financial position and changes in financial position. The District reports the following governmental fund: General Fund — the principal operating fund of the District which includes all receipts and disbursements not required to be included in other funds. Fiduciary Fund — the Fiduciary Fund is used to account for assets held by the District in a trustee capacity or as an agent for individuals, private organizations, and other governments. The District reports the following fiduciary fund: Agency Fund — used to account for money (and/or property) received and held in a custodial capacity of trustee, custodian, or agent. C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION Measurement focus refers to what is being measured; basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurement made, regardless of the measurement focus applied. -7- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31,2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued) C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (continued) The District follows the Uniform System of Accounts as described in the Fire District Accounting and Reporting Manual issued by the Office of the New York State Comptroller. Under this system the District's governmental activities use a current financial resources measurement focus and are accounted for using the modified accrual basis of accounting. Under this basis of accounting, revenues are recognized in the accounting period in which they are available and measurable, and expenditures will generally be recognized in the accounting period in which the liability is actually incurred. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. This basis of accounting differs from accounting principles generally accepted in the United States of America for governments as promulgated by the Government Accounting Standards Board (GASB). D. ASSETS, LIABILITIES AND FUND EQUITY 1. CASH IN SPECIAL RESERVES Cash balances of the Capital Reserve for Building and Grounds and the Capital Reserve for Apparatus are classified as cash in special reserves because the use of these funds is restricted by New York State General Municipal Law. 2. RECEIVABLES i. Receivables are recorded and revenues recognized as earned or as specific program expenditures are incurred. 3. PREPAID ITEMS Prepaid items represent insurance benefits that will benefit a future period. 4. CAPITAL ASSETS All capital assets with an original cost of $500 or more are valued at historical cost or estimated historical costs if actual is unavailable, except for donated capital assets which are recorded at their estimated fair value at the date of donation. Depreciation is provided over the assets' estimated useful lives using the straight-line method of depreciation.The range of estimated useful lives by type of asset r is as follows: Buildings 20-50 years Infrastructure 40 years Vehicles and related equipment 5-20 years Equipment 5-20 years In accordance with the Accounting and Reporting Manual for Fire Districts, issued by the Office of the New York State Comptroller, depreciation expense is not recorded in the District's governmental funds and instead it is disclosed in the notes to the financial statements along with the District's changes in capital assets. Additional information related to capital assets is disclosed in Note 3B to the financial statements. 5. PROPERTY TAXES Property taxes are collected by the Town of Southold on behalf of the District. Payments from the Town of Southold are normally received at various intervals during the year. ' -8- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31,2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. ASSETS, LIABILITIES AND FUND EQUITY (continued) 6. FUND EQUITY In the fund financial statements, governmental funds report aggregate amounts for five classifications of fund balances based on the constraints imposed on the use of these resources; they are 1) nonspendable,2) restricted 3)committed, 4) assigned, or 5) unassigned. 1) Nonspendable fund balance includes amounts that cannot be spent because they are either(a) not in spendable form (i.e. prepaid items or inventories), or(b) will not convert to cash within the current period (i.e. long term receivables and financial assets held for resale), or (c) legally or contractually required to be maintained intact(i.e.the principal of a permanent fund). The spendable portion of the fund balance comprises the remaining four classifications: restricted, committed, assigned, and unassigned. 2) Restricted fund balance reflects the constraints imposed on resources either (a) externally by creditors, grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. The District has established the following restricted funds balances: Capital Reserve for Buildings and Grounds (GML §6-q) — The reserve is established by a resolution of the Board of Fire Commissioners and may not take effect until approved by a vote of the qualified electors of the District (i.e., mandatory referendum). The reserve established for the construction and repair of District buildings and grounds is funded by budgetary appropriations and revenues not required by law to be paid into any other fund or account.The reserve is accounted for in the General Fund. Capital Reserve for Apparatus (GML§6-q)—The reserve is established by a resolution of the Board of Fire Commissioners and may not take effect until approved by a vote of the qualified electors of the District (i.e., mandatory referendum). The reserve established for the purchase and repair of District equipment and apparatus is funded by budgetary appropriations and revenues not required by law to be paid into any other fund or account. The reserve is accounted for in the General Fund. 3) Committed fund balance reflects amounts that can only be used for specific purposes by a government using its highest and most binding level of decision making authority. The Board of Fire Commissioners is not empowered to establish local law; accordingly, the District will not have committed fund balance. 4) Assigned fund balance reflects the amounts constrained by the District's "intent" to be used for specific purposes, but are neither restricted nor committed. The Board of Fire Commissioners has the authority to assign amounts to be used for specific purposes. 5) Unassigned fund balance includes all other General Fund amounts that do not meet the definition of the above four classifications and are deemed to be available for general use by the District. When both restricted and unrestricted resources are available for use, the District uses restricted resources first, and then unrestricted resources—assigned and unassigned- in order as needed. -9- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) E. ENCUMBRANCES Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded for budgetary control purpose, is employed in the governmental funds. Encumbrances are reported as restrictions, commitments, or assignments of fund balances since they do not constitute expenditures or liabilities. Expenditures for such commitments are recorded in the period in which the liability is incurred. F. USE OF ESTIMATES The preparation of financial statements in conformity with a prescribed basis of accounting that demonstrates compliance with the regulatory basis of accounting and budget laws of the State of New York, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. G. SUBSEQUENT EVENTS Management has evaluated subsequent events for disclosure and/or recognition in the financial statements through the date of the financial statements. 2. STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY A. BUDGETARY INFORMATION The District prepares an annual budget for the General Fund which is approved by the Board of Fire Commissioners. The budget is then submitted to the Town of Southold for inclusion in the Town Budget and a public hearing is held thereon. The budget is not subject to referendum. Any revisions to the annual budget are adopted by resolution of the Board of Fire Commissioners. The budget is adopted annually on a prescribed basis of accounting that demonstrates compliance with the regulatory basis of accounting and budget laws of the State of New York, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. Appropriations authorized for the current year are increased by the amount of encumbrances, if any, carried forward from the prior year. B. REAL PROPERTY TAX LEVY CAP New York State has enacted Chapter 97, Laws of 2011 Real Property Tax Levy Cap and Mandate Relief Provisions, which includes a property tax cap for fire districts. For fiscal years, beginning in 2012 and lasting through at least June 15, 2020, annually, fire districts cannot increase their property tax levy by more than 2.00% or the rate of inflation (whichever is less) plus additional adjustments unless a resolution approved by a vote of 60% of the total voting power of the Board of Fire Commissioners is obtained to override the property tax levy limit for the coming fiscal year. The District has complied with this law in adopting its 2015 budget. -10- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31,2015 2. STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY(continued) C. CAPITAL RESERVES The District has established a Capital Reserve for Buildings and Grounds and a Capital Reserve for Apparatus.A summary of activity in each of the District's Capital Reserve Funds is as follows: Capital Reserve for Building and Grounds The Board of Fire Commissioners established a capital reserve for construction and repairs to building and grounds. A summary of activity in the Building and Grounds Capital Reserve Fund for the year ended December 31, 2015 is as follows: Fund Balance at beginning of year $ 511,693 Transfer from General Fund appropriations 145,000 Interest earned on reserve cash 312 Expenditures -0- Fund balance at end of year $ 657.005 Capital Reserve for Apparatus The Board of Fire Commissioners established a capital reserve for purchases and repairs associated with apparatus and equipment. A summary of activity in the Apparatus Reserve Fund for the year ended December 31,2015 is as follows: Fund Balance at beginning of year $ 908,955 Transfer from General Fund appropriations 230,000 Rental income 2,000 Interest earned on reserve cash 531 Expenditures (34,040) Fund Balance at end of year 1,107,446 Amount due from General Fund for excess transfers to General Fund (17,844) Cash balance at end of year $1.089.602 3. DETAILED NOTES A. CASH AND CASH IN SPECIAL RESERVES Custodial Credit Risk - Deposits - Custodial credit risk for deposits exists when, in the event of the failure of a depository financial institution, a government may be unable to recover deposits, or recover collateral securities that are in possession of an outside agency. The District's investment policies are governed by State statutes. In addition, the District has its own investment policy. District monies must be deposited in FDIC-insured commercial banks or trust companies located within the State. The Treasurer is authorized to use demand accounts and certificates of deposit. Permissible investments include obligations of the United States Treasury and United States agencies, and obligations of New York State or its localities. -11- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2015 3. DETAILED NOTES (continued) A. CASH AND CASH IN SPECIAL RESERVES (continued) Collateral is required for demand and time deposits at 105% of all deposits not covered by federal deposit insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of the State or its municipalities. Deposits are required to be disclosed as exposed to custodial credit risk if they are not covered by depository insurance, and the deposits are either: • Uncollateralized; • Collateralized with securities held by the pledging financial institution in the District's name; or • Collateralized with securities held by the pledging financial institution's trust department or agent, but not in the District's name. At December 31, 2015, the District's bank balances were $2,540,363. Of the District's bank balances, $270,173 was covered by federal deposit insurance and $2,270,190 was secured by collateral held by the District's agent, a third party financial institution, in the District's name. The District does not typically purchase investments for long enough duration to cause it to believe that it is exposed to any material interest rate risk. The District does not typically purchase investments dominated in a foreign currency, and is not exposed to foreign currency risk. The District does not have any investments subject to credit risk or concentration of risk. B. CAPITAL ASSETS Capital assets consist of the following at December 31, 2015: Balance Balance 1/1/15 Additions Deletions 12/31/15 Capital assets, not being depreciated: Land, $ 386,000 $ 386,000 Construction in progress -0- -0- Total capital assets, not being depreciated 386,000 -0- -0- 386,000 Capital assets, being depreciated: Buildings 2,632,088 2,632,088 Infrastructure 437,750 437,750 Vehicles and related equipment 4,219,367 $ 19,169 4,238,536 Equipment 865,256 53,550 918,806 Total capital assets,being depreciated 8,154,461 72,719 -0- 8,227,180 Less accumulated depreciation for: Buildings 1,012,013 66,456 1,078,469 Infrastructure 310,679 8,249 318,928 Vehicles and related equipment 2,563,776 194,084 2,757,860 Equipment 613,316 56,024 669,340 Total accumulated depreciation $ 4,499,784 $ 324,813 $ -0- 4,824,597 Total capital assets, being depreciated, net 3,402,583 Total capital assets, net $ 3,788,583 Total depreciation expense $ 324,813 -12- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31,2015 3. DETAILED NOTES (continued) B. CAPITAL ASSETS (continued) The District evaluates prominent events or changes in circumstances affecting capital assets to determine whether impairment of a capital asset has occurred. The District's policy is to record an impairment loss in the period when the District determines that the carrying amount of the asset will not be recoverable. At December 31,2015, the District has not recorded any such impairment losses. C. INDEBTEDNESS LONG TERM DEBT The following is a summary of changes in long-term debt transactions for the year ended December 31, 2015: Balance Balance 1/1/15 Increases Reductions 12/31/15 General obligation serial bonds $ 506,000 $ 95,000 $ 411,000 Capital lease obligations 179,105 90,026 89,079 $ 685,105 $ -0- $ 185,026 $ 500,079 General Obligation Serial Bonds - The District borrows money in order to acquire land, equipment, construct buildings or make improvements. This enables the cost of these capital assets to be borne by the present and future taxpayers receiving the benefit of the capital assets. These long-term liabilities are full faith and credit debt of the District.The provision to be made in future budgets for capital indebtedness represents the amount, exclusive of interest, authorized to be collected in future years from taxpayers and others for liquidation of the long-term liabilities. General obligation serial bonds of the District will be repaid from tax revenues. General obligation serial bonds bear interest at 3.70% and 4.20% and have final maturity dates through 2019. The following is a summary of maturity of general obligation serial bonds: Final Interest Outstanding Issue Date Maturity Rate 12/31/15 2004 2019 3.70% $ 325,000 2005 2019 4.20% 86,000 $ 411,000 Future principal and interest payments to maturity are as follows: Year Principal Interest Total 2016 $ 100,000 $ 14,157 $ 114,157 2017 101,000 10,357 111,357 2018 102,000 6,515 108,515 2019 108,000 2,538 110,538 $ 411,000 $ 33,567 $ 444,567 -13- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2015 3. DETAILED NOTES (continued) C. INDEBTEDNESS(continued) LONG TERM DEBT(continued) CAPITAL LEASE OBLIGATIONS The District entered into a contract to acquire a 95 Foot Aerial Platform fire truck under a capital lease agreement. The liability for this obligation is payable annually and matures in May 2016. The interest rate is 5.15%.The cost for the underlying equipment was$764,478. Future principal and interest payments to maturity are as follows: Year Principal Interest Total 2016 $ 89,079 $ 10,433 $ 99,512 The actual allocation of principal and interest for the District's capital lease obligations may be different due to the leasing company recalculating the interest on a daily basis as opposed to a monthly basis as presented here. Management believes any differences as a result of this presentation are not significant. D. RETIREMENT SYSTEM Plan Description The District participates in the New York State and Local Employees' Retirement System (ERS) and the Public Employees' Group Life Insurance Plan, collectively known as NYSLRS. These are cost-sharing multiple-employer retirement systems. The NYSLRS provides retirement benefits as well as death and disability benefits. Obligations of employers and employees to contribute and benefits to employees are governed by the New York State Retirement and Social Security Law (NYSRSSL). As set forth in the NYSRSSL, the Comptroller of the State of New York (Comptroller) serves as sole trustee and administrative head of the NYSLRS. The Comptroller shall adopt and may amend rules and regulations for the administration and transaction of the business of the NYSLRS and for the custody and control of its funds. The NYSLRS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be found at http://www.osc.state.ny.us/retire/publications/index.php or obtained by writing to the New York State and Local Retirement System, 110 State Street, Albany, NY 12244. Funding Policy The NYSLRS are noncontributory except for employees who joined the New York State and Local Employees' Retirement System on or after July 27, 1976, who generally contribute 3.00% of their annual salary for the first ten years of membership, employees who joined on or after January 1, 2010 (ERS) who generally contribute 3.00% of their salary for their entire length of service, and employees who joined on or after April 1, 2012 (ERS) who generally contribute between 3.00% and 6.00% (based on annual wages) for the entire length of service. Under the authority of the NYSRSSL, the Comptroller annually certifies the actuarially determined rates expressly used in computing the employers' contributions based on salaries paid during the NYSLRS'fiscal year ending March 31. -14- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2015 3. DETAILED NOTES (continued) D. RETIREMENT SYSTEM (continued) Contributions for the current year and two preceding years were equal to 100.00% of the contributions required, and were as follows: Percent Contribution of Covered Year Amount Payroll 2015 $ 37,652 18.60% 2014 $ 37,205 20.10% 2013 $ 38,401 20.80% Chapter 57 of the Laws of 2010 of the State of New York allows local employers to amortize a portion of their retirement bill for ten years in accordance with the following stipulations: • For State fiscal year 2010 - 2011, the amount in excess of the graded rate of 9.50% of employees' covered pensionable salaries, with the first payment of those pension costs not due until the fiscal year succeeding that fiscal year in which the amortization was instituted. • For subsequent State fiscal years, the graded rate will increase or decrease by up to 1.00% depending on the gap between the increase or decrease in the NYSLRS's average rate and the previous graded rate. • For subsequent State fiscal years in which the NYSLRS's average rates are lower than the graded { rates, the employer will be required to pay the graded rate. Any additional contributions made will first be used to pay off existing amortizations, and then any excess will be deposited into a reserve account and will be used to offset future increases in contribution rates. The law requires participating employers to make payments on a current basis, while amortizing existing unpaid amounts relating to the NYSLRS's fiscal years when the local employer opts to participate in the program. Chapter 57 of the Laws of 2013 of the State of New York allows local employers to amortize a portion of their retirement bill for up to twelve years in accordance with the following stipulations: • The maximum amount an employer can amortize is the difference between the normal annual contribution (total bill, excluding payments for deficiency, group life, previous amortizations, incentive costs and prior year adjustments) and the graded contribution. • For subsequent State fiscal years, the graded rate will increase or decrease by up to 0.50% depending on the gap between the increase or decrease in the NYSLRS's average rate and the previous graded rate. • For subsequent State fiscal years in which the NYSLRS's average rates are lower than the graded rates, the employer will be required to pay the graded rate. Any additional contributions made will first be used to pay off existing amortizations, and then any excess will be deposited into a reserve account and will be used to offset future increases in contribution rates. The law requires participating employers to make payments on a current basis, while amortizing existing unpaid amounts relating to the NYSLRS's fiscal years when the local employer opts to participate in the program. The District did not participate in these programs and therefore has no outstanding liability at December 31,2015. -15- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31,2015 ' 3. DETAILED NOTES (continued) D. RETIREMENT SYSTEM (continued) Pension Assets, Liabilities, Pension Expense, and Deferred Outflows and Inflows of Resources Related to Pensions At December 31, 2015, the District reported the following asset/(liability) for its proportionate share of the net pension asset/(liability)for the System. The net pension asset/(liability) was measured as of March 31, 2015 for ERS. The total pension asset/(liability) used to calculate the net pension asset/(liability) was determined by an actuarial valuation.The District's proportion of the net pension asset/(liability) was based on a projection of the District's long-term share of contributions to the System relative to the projected contributions of all participating members, actuarially determined. This information was provided by the r ERS System in reports provided to the District. ERS Actuarial valuation date April 1, 2014 Net pension asset/(liability) $ (14,807) District's portion of the Plan's total net pension asset/(liability) 0.0004383% At December 31, 2015, the District had deferred outflows of resources related to pension from the following sources: ( Deferred Outflows of Resources ERS Differences between expected and actual experience $ 474 Changes of assumptions -0- Net difference between projected and actual earnings on pension plan investments 2,572 Changes in proportion and differences between the Districts contributions and proportionate share of contributions 9,743 District's contribution subsequent to the measurement date 37,652 Total $ 50,441 -16- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31,2015 3. DETAILED NOTES (continued) D. RETIREMENT SYSTEM (continued) The District's contribution subsequent to the measurement date will be recognized as a reduction/increase of the net pension liability/asset in the year ended December 31, 2016. Other amounts reported as deferred outflows of resources related to pensions will be recognized as follows: ERS Years Ending December 31, 2016 $ 3,197 2017 3,197 2018 3,197 2019 3,198 Actuarial Assumptions The total pension liability/asset as of the measurement date was determined by using an actuarial valuation as noted in the table below, with update procedures used to roll forward the total pension liability/asset to the measurement date. Significant actuarial assumptions used in the valuations were as follows: ERS Measurement date March 31, 2015 Actuarial valuation date April 1, 2014 Interest rate 7.5% Salary scale 4.9% Decrement tables April 1, 2005 - March 31, 2010 System's Experience Inflation rate 2.7% Annuitant mortality rates are based on April 1, 2005 — March 31, 2010 System's experience with adjustments for mortality improvements based on MP-2014. The actuarial assumptions used in the April 1, 2014 valuation are based on the results of an actuarial experience study for the period April 1, 2005—March 31,2010. -17- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31,2015 3. DETAILED NOTES (continued) D. RETIREMENT SYSTEM (continued) The long term rate of return on pension plan investments was determined using a building block method in which best estimate ranges of expected future real rates of return (expected returns net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by each of the target asset allocation percentages and by adding expected inflation. Best estimates of the arithmetic real rates of return for each major asset class included in the target asset allocation are summarized below: ERS Long-term Target Expected Rate Allocation of Return Asset type Domestic equity 38.0% 7.30% International equity 13.0% 8.55% Real estate 8.0% 8.25% Alternative investments 19.0% 6.75-11.00% Bonds and mortgages 18.0% 4.00% Cash 2.0% 2.25% Inflation indexed bonds 2.0% 4.00% 100.0% Discount Rate The discount rate used to calculate the total pension liability was 7.5%. The projection of cash flows used ' to determine the discount rate assumes that contributions from plan members will be made at the current contribution rates and that contributions from employers will be made at statutorily required rates, actuarially. Based upon the assumptions,the System's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Proportionate Share of the Net Pension Asset/(Liability)to the Discount Rate Assumption The following presents the District's proportionate share of the net pension liability calculated using the discount rate of 7.5%, as well as what the District's proportionate share of the net pension asset/(liability) would be if it were calculated using a discount rate that is 1% point lower(6.5%) or 1% point higher(8.5%) than the current rate: 1% Current 1% Decrease Assumption Increase (6.5%) (7.5%) (8.5%) Employer's proportionate share of the net pension asset/(liability) $ (98,695) $ (14,807) $ 56,015 -18- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31,2015 3. DETAILED NOTES(continued) D. RETIREMENT SYSTEM (continued) Pension Plan Fiduciary Net Position The components of the current-year net pension asset/(liability) of the employers as of the respective valuation dates, were as follows: (Dollars in Thousands ERS Valuation date April 1, 2014 Employers'total pension liability $ 164,591,504 Plan Fiduciary Net Position 161,213,259 Employers' net pension asset/(liability) $ (3,378,245) E. FUND BALANCE The following table provides the detail regarding fund balance categories and classifications for the General Fund which shows the components of restricted and assigned fund balance. The unassigned fund balance is also shown. General Fund Restricted for: Capital Reserve for Buildings and Grounds $ 657,005 Capital Reserve for Apparatus 1,107,446 Total Restricted 1,764,451 Assigned to: Buildings and Grounds 65,000 Purchases on order 16,180 Total Assigned 81,180 Unassigned 638,248 Total Fund Equity $ 2,483,879 4. COMMITMENTS AND CONTINGENCIES A. RISK MANAGEMENT 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 for the past two years. Management believes that all claims currently pending are either adequately covered by insurance or will not materially affect the financial position or results of operations of the District. -19- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31,2015 4. COMMITMENTS AND CONTINGENCIES (continued) B. LENGTH OF SERVICE AWARD PROGRAM (LOSAP) The District's financial statements are for the year ended December 31, 2015. The information contained in this note is based on information for the District's Length of Service Award Program (the "Plan") as of January 1, 2016 for the Plan year ended December 31, 2015, which is the most recent Plan year for which complete information is available. Actuarial values are calculated as of January 1, 2016 based upon information and service accruals earned through December 31, 2015 under the Plan. The District established a defined benefit Plan (referred to as "LOSAP" — Length of Service Award Program — under Section 457(e)(11) of the Internal Revenue Code) for active volunteer firefighters of the Mattituck Fire Department. The program took effect on January 1, 1992. The Plan was established pursuant to Article 11-A of New York State General Municipal Law. The Plan provides municipally-funded pension-like benefits to facilitate the recruitment and retention of active volunteer firefighters.The District is the sponsor of the Plan and the Plan administrator(administration assistance provided by Penflex, Inc). Plan Description: Participation, Vesting and Service Credit Active volunteer firefighters who have reached the age of 18 and who have completed one year of firefighting service are eligible to participate in the Plan. Participants acquire a nonforfeitable right to a service award after being credited with five years of firefighting service or upon attaining the Plan's entitlement age. The Plan's entitlement age is age 62. In general, an active volunteer firefighter is credited with a year of firefighting service for each calendar year after the establishment of the Plan in which they accumulate fifty points. Points are granted for the performance of certain activities in accordance with a system ("Point System") established by the District on the basis of a statutory list of activities and point values. A Participant may also receive service credit for five years of active volunteer firefighting service rendered prior to the establishment of the Plan. Benefits A Participant's benefit under the Plan is the actuarial equivalent of a monthly payment for life equal to$20 multiplied by the Participant's total number of years of firefighting service. The number of years of firefighting service used to compute the benefit cannot exceed forty. Except in the case of Pre-Entitlement Age death or total and permanent disablement, a Participant's benefit will not be paid until the Participant reaches the Entitlement Age ("EA") of 62. A Participant's benefit is paid as a ten-year certain and continuous monthly payment life annuity. Currently, there are no other forms of payment of a Participant's earned Plan benefit. The Plan provides statutorily mandated death and disability benefits. The Plan also provides optional line of duty disability benefits. Should a volunteer firefighter of the District become totally and temporarily disabled, or partially and permanently disabled, as certified by the Workers' Compensation Board or other competent authority approved by the Board of Fire Commissioners, and the disability occurs during the course of service as a volunteer, while actively engaged in providing line of duty services, as defined in subdivision one of section five of the Volunteer Firefighters' Benefit Law, the firefighter shall receive five points for each complete calendar month of such disability under the Point System up to the earlier of the date such volunteer is no longer totally and temporarily or partially and permanently disabled or attains the _ EA. However, if such disability becomes a permanent and total disability and a Mattituck Fire District , Service Award Program Total and Permanent Disability is awarded on account of such disablement, then no future points shall be credited under this special line of duty disability benefit provision after the date of the awarding of such Total and Permanent Disability by the Board of Fire Commissioners. -20- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31,2015 4. COMMITMENTS AND CONTINGENCIES (continued) B. LENGTH OF SERVICE AWARD PROGRAM (LOSAP) (continued) Plan Description: (continued) Benefits (continued) If a Participant is awarded a Total and Permanent Service Award Program Disability by the Board of Fire Commissioners before attaining the EA for a disability commencing after December 31, 1991, the Participant is entitled to receive an amount equal to the Participant's Accrued Service Award earned as of the date such disability payment is awarded by the Board of Fire Commissioners and payable on the first day of every month for the lifetime of the Participant or for ten years, whichever is greater. Once a Participant is awarded a Total and Permanent Service Award Program Disability under the Plan provisions, such Participant shall no longer be eligible to participate in the District's Plan. If a Participant dies before attaining the EA, a lump-sum shall be paid to the Participant's designated beneficiary equal to the discounted actuarial present value of the Participant's Accrued Service Award earned as of the date of death. If the Participant was an active volunteer firefighter of the District as of the date of death, the minimum death benefit payable to the Participant's designated beneficiary shall be $20,000. Participants who are active after attaining the EA and who have commenced receiving their Plan benefit have the opportunity to earn Plan credit and to thereby increase their Plan payments. In addition, Participants who are active at the time of reaching EA receive an additional death benefit of$20,000. Fiduciary Investment and Control Service credit is determined based on information certified to the Board of Fire Commissioners by the Chief of each fire company having members who participate in the Plan. Each fire company must maintain all required records on forms prescribed by the Board of Fire Commissioners. The Board of Fire Commissioners of the District has retained and designated Penflex, Inc. to assist in the administration of the Plan.The designated Plan administrator's functions include calculating the amount to be contributed at the end of each year based upon the criteria set forth in the Plan Document. Disbursements of Plan assets for the payment of benefits or administrative expenses must be approved by the Board of Fire Commissioners and delivered to the Custodian through a Payment Schedule. The Board of Fire Commissioners of the District has retained and designated Nationwide Life Insurance as the Custodian of the Plan's assets. Nationwide Life Insurance shall make payments to Plan Participants and their beneficiaries in accordance with the Payment Schedule. Plan assets are required to be held in trust by Length of Service Award Program legislation, for the exclusive purpose of providing benefits to Participants and their beneficiaries or for the purpose of defraying the reasonable expenses of the operation and administration of the Plan. The trust agreement is dated January 1, 1992 as amended, and the trustees are the Board of Fire Commissioners of the District. Authority to invest Plan assets is vested in the Board of Fire Commissioners of the District. Subject to restrictions in the Plan document, Plan assets are invested in accordance with a statutory"prudent person" rule. The Plan document restricts the Trustee from investing in securities or obligations issued by the Mattituck Fire District, other than a de minimis amount held in common investment vehicles in which the Trustee invests. The District is required to retain an actuary to determine the amount of the District's contributions to the plan. The actuary retained by the District for this purpose is Tony Fiorillo, ASA, MAAA of Penflex, Inc. Portions of the following information are derived from a report prepared by the actuary dated February 12,2016. -21- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December31, 2015 4. COMMITMENTS AND CONTINGENCIES (continued) B. LENGTH OF SERVICE AWARD PROGRAM (LOSAP) (continued) Plan Financial Condition Assets and Liabilities: Actuarial present value of benefits at December 31, 2015 $ 4,429,523 Less: assets available for benefits Bond funds Mid-Cap stock funds $ 178,492 Large-Cap stock funds 899,145 International stock funds 536,055 Balanced 544,973 Specialty 378,394 Other 1,111,067 Benefits Payable (6,160) Total net assets available for benefits 3,641,966 Total unfunded benefits $ 787,557 Prior Service Costs There are no prior service costs associated with the Plan. Separately Amortized Costs The unfunded liability for additional benefits earned after attainment of the EA is being amortized over three years at 5.50%. The unfunded liability for the other unfunded accrued liability is being amortized over fifteen years at 5.50%. Receipts and Disbursements: Plan net assets, January 1, 2015 $ 3,674,203 Changes during the year: Plan contributions $ 220,000 Changes in fair market value of investments (66,437) Plan benefit withdrawals (185,800) Plan net assets, December 31, 2015 $ 3,641,966 -22- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31,2015 4. COMMITMENTS AND CONTINGENCIES (continued) B. LENGTH OF SERVICE AWARD PROGRAM (LOSAP) (continued) Plan Financial Condition (continued) Contributions Contributions Amount of District's contribution recommended by actuary: $ 208,559 Amount of District's actual contribution: $ 220,000 Administration Fees Fees paid to designated Plan administrator/actuary: $ 4,401 Funding Methodology and Actuarial Assumptions: Normal Costs The actuarial valuation methodology used by the actuary to determine the District's contribution is the "Attained Age Normal Cost Method". Under this cost method,there are two components to the annual cost each year. The first component, the "normal cost", is equal to the level annual payment required to fund the current Participant's projected benefits based on their service credit earned after the effective date of the Plan and before the EA. The second component,the annual amortization cost, equals the level annual payments required to fund over the amortization period(s), the Participant's benefits, if any based on (1) service credit earned before the effective date of the Plan, (2) service credit earned after the attainment of the EA, and (3) other unfunded accrued liability. Amortization period for liability for service after EA—3 years Amortization period for re-established unfunded liability—15 years Under the Attained Age Normal Cost Method, the unfunded accrued liability is calculated using the Unit Credit Cost Method. Actuarial gains and losses are amortized over the future years of firefighting service before the EA for the group of firefighters participating in the Plan on the valuation date. Higher than expected investment income, for example, in any one particular year will reduce the normal cost in that year and in each of the future years based upon the ages of the current firefighters participating in the program on the valuation date. Likewise, losses to the Plan's Trust Fund will result in an increase in the future annual normal cost. The assumptions used by the actuary to determine the District's contribution and the actuarial present value of benefits are: Assumed rate of return on investment 5.50% Mortality Tables used for: Withdrawal: None Disability: None Retirement: 100%at Entitlement Age Death (Active): None Death (Inactive):1994 Uninsured Pensioner Male Mortality Table projected with scale AA to 2007 -23- MATTITUCK FIRE DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2015 4. COMMITMENTS AND CONTINGENCIES (continued) C. LEASE AGREEMENTS The District leases training space in Mattituck, New York under an operating lease agreement which commenced June 1, 2005 and was amended on September 27, 2006. The amended lease agreement expires May 31, 2031.The District has the option to renew this lease for one (1) additional twenty-five (25) year period. The lease payments are $200 per month payable annually on the anniversary date of the initial lease term and increases to $800 per month on the renewal date. Expenditures under this operating lease for the year ended December 31, 2015 were$2,400. The District leases communication tower space in Sag Harbor, New York for a radio signal repeater under an operating lease agreement which commenced May 27, 2009. The term of the lease agreement is for a five (5) year period with 4 automatic renewal terms for an additional five (5) year period. The lease expires May 31, 2033. The lease payments are $500 per month increased on the anniversary of the commencement date by an annual escalator of three (3) percent. In addition, there is an annual site inspection fee of $500 increased on the anniversary of the commencement date by the three (3) percent annual escalator. Expenditures under this operating lease for the year ended December 31, 2015 were approximately$7,100. Minimum annual commitments under the operating leases described above are as follows: Year ended December 31, 2016 $ 9,678 2017 9,894 - 2018 10,117 2019 10,352 2020 10,592 2021 -2025 56,798 2026-2030 63,944 2031 -2033 28,961 $ 200,336 i ) REQUIRED SUPPLEMENTARY INFORMATION -24- MATTITUCK FIRE DISTRICT GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL Year Ended December 31, 2015 Variance Original Final Positive Budget Budget Actual Encumbrances (Negative) REVENUES Real property taxes $ 1,890,426 $ 1,890,426 $ 1,890,426 $ -0- Interest and earnings 3,477 3,477 Insurance recoveries and refunds 3,101 3,101 Miscellaneous income 20 20 Total Revenues 1,890,426 1,890,426 1,897,024 6,598 EXPENDITURES Personal services 201,719 201,719 190,096 $ 5,680 5,943 Equipment and capital outlay 112,500 170,940 105,484 65,456 Fire protection 647,126 653,126 548,674 10,500 93,952 Employee benefits 416,704 416,704 379,647 37,057 Debt service 212,377 212,377 212,377 -0- Total Expenditures 1,590,426 1,654,866 1,436,278 16,180 202,408 Net Change in Fund Balance* $ 300,000 $ 235,560 460,746 $ (16,180) $ 209,006 Fund Balance at Beginning of Year 2,023,133 Fund Balance at End of Year $ 2,483,879 *The difference in the net change in fund balance for the original budget and the final budget is due to budget amendments for$30,400 related to the carryforward of prior year encumbrances and$34,040 in unbudgeted capital reserve expenditures incurred during the year that were approved via permissive referendums. r r r , -25- MATTITUCK FIRE DISTRICT GENERAL FUND SCHEDULE OF DETAILED EXPENDITURES AND APPROPRIATIONS Year Ended December 31, 2015 Variance Original Final Positive Budget Budget Actual Encumbrances (Negative) Personal Services $ 201,719 $ 201,719 $ 190,096 $ 5,680 $ 5,943 Equipment and Capital Outlay 112,500 170,940 105,484 -0- 65,456 Fire Protection Services Administrative Expenses Office supplies 17,000 24,292 24,282 10 Association dues 1,000 1,839 1,814 25 Legal and audit fees 73,500 77,520 74,648 2,872 Publications 7,750 9,250 9,222 28 Election expense 1,000 1,000 666 334 Total Administrative Expenses 100,250 113,901 110,632 -0- 3,269 Utility and Water Expenses Gas and electric 66,500 48,143 41,258 6,885 Telephone 14,500 14,500 14,134 366 Hydrant rental 28,000 29,700 29,620 80 Total Utility and Water Expenses 109,000 92,343 85,012 -0- 7,331 Firefighters Expense Uniforms 10,000 9,400 3,329 6,071 Medical exams 35,000 35,000 30,736 4,264 Inspection dinner 20,000 23,606 23,508 98 Total Firefighters Expense 65,000 68,006 57,573 -0- 10,433 Travel and Convention Expenses 19,500 19,500 7,894 -0- 11,606 Building Costs Building repairs 107,500 112,000 92,787 9,000 10,213 Total Building Costs 107,500 112,000 92,787 9,000 10,213 Fire Equipment and Alarm Fire alarm service 2,500 2,500 2,500 Gas and diesel 28,000 28,000 12,649 15,351 Repairs and maintenance 124,704 126,204 115,359 1,500 9,345 Medical supplies 25,000 25,000 15,508 9,492 Total Fire Equipment and Alarm 180,204 181,704 143,516 1,500 36,688 Insurance Costs Vehicle and property 65,672 65,672 51,260 14,412 Total Insurance Costs 65,672 65,672 51,260 -0- 14,412 Total Fire Protection Services 647,126 653,126 548,674 10,500 93,952 (continued) -26- MATTITUCK FIRE DISTRICT GENERAL FUND SCHEDULE OF DETAILED EXPENDITURES AND APPROPRIATIONS Year Ended December 31, 2015 Variance Original Final Positive Budget Budget Actual Encumbrances (Negative) Employee Benefits Social security 15,431 15,431 14,543 888 State retirement system 37,205 37,705 37,652 53 Service award program 250,000 250,000 224,401 25,599 Workers'compensation insurance 44,168 44,168 40,289 3,879 Unemployment insurance 1,050 1,300 1,272 28 Life insurance 13,000 13,200 13,199 1 Medical and accident insurance 55,850 54,900 48,291 6,609 Total Employee Benefits 416,704 416,704 379,647 -0- 37,057 Debt Service Principal 184,796 185,026 185,026 -0- Interest 27,581 27,351 27,351 -0- Total Debt Service 212,377 212,377 212,377 -0- -0- Totals $ 1,590,426 $ 1,654,866 $ 1,436,278 $ 16,180 $ 202,408 , OTHER REPORT I_ -27- ! 1 CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To Board of Fire Commissioners Mattituck Fire District Mattituck, 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 Balance Sheet – Governmental Fund, Statement of Revenues, Expenditures and Changes in Fund Balance – Governmental Fund, the Statement of Assets and Liabilities – Fiduciary Fund information and the related notes to the financial statements of the Mattituck Fire District, New York, as of and for the year ended December 31, 2015, which collectively comprise the Mattituck Fire District, New York's financial statements, and have issued our report thereon dated March 25, 2016. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Mattituck Fire District, New York'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 opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Mattituck Fire District, New York's internal control. Accordingly, we do not express an opinion on the effectiveness of the Mattituck Fire District, New York'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 Mattituck Fire District'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. 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. PERSONAL SERVICE.TRUSTED ADVICE. --a— ALBRECHT,VIGGIANO,ZURECK&COMPANY, P.C. 245 PARK AVENUE,39TH FLOOR 25 SUFFOLK COURT NEW YORK, NY 10167 HAUPPAUGE, NY 11788-3715 T:212.792.4075 T:631.434 9500 F 631 434 9518 www.avz.com INDEPENDENT MEMBER OF BKR INTERNATIONAL -28- Compliance and Other Matters As part of obtaining reasonable assurance about whether Mattituck Fire District, New York's financial statements are 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 financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. r, 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 Mattituck Fire 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 Mattituck Fire District's internal control and compliance. Accordingly,this communication is not suitable for any other purpose. v at,...) :a{A-42-4.1 C, Pc. Hauppauge, New York March 25, 2016