HomeMy WebLinkAbout2015 FI Waste Management (2) FISHERS ISLAND WASTE MANAGEMENT DISTRICT
State of New York
FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION WITH
INDEPENDENT AUDITOR'S REPORT
December 31,2015
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
TABLE OF CONTENTS
Page
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 Balance-Governmental Funds 13
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balance 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 22
VINCENT D.CULLEN,CPA
(1950-2013)
CULLEN & DANOWSKI, LLP JAMES E.DANOWSKI,CPA
CERTIFIED PUBLIC ACCOUNTANTS PETER F.RODRIGUEZ,CPA
JILL S.SANDERS,CPA
DONALD J.HOFFMANN,CPA
CHRISTOPHER V.REINO,CPA
ALAN YU,CPA
INDEPENDENT AUDITOR'S REPORT
To the Board of Commissioners
Fishers Island Waste Management District
Fishers Island,New York
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, 2015,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 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 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•WWW.CDLLP.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, 2015, 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.
L,L7o
May 16, 2016
-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, 2015, in
comparison with the year ended December 31, 2014, with emphasis on the current year. 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. EitakCIAL HIGHLIGHTS
Key financial highlights for fiscal year 2015 are as follows:
▪ The District's total net position, as reflected in the government-wide financial statements, decreased
by $159,596. This was due to an excess of expenses over revenues using the economic resources
measurement focus and the accrual basis of accounting. The District's total net position was
$3,333,684 at December 31, 2015.
• The District's general fund total fund balance, as reflected in the fund financial statements, decreased
by $23,925. This was due to an excess of expenditures over revenues using the current financial
resources measurement focus and the modified accrual basis of accounting. The District's general
fund total fund balance was$586,012 at December 31, 2015.
2. QVERVIEW 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:
Management's Requiredl
Analysis
nal st // / � S /a ti 3n�%„�
a
e
fGovernment- % ' Fin c Notes toWide Financial
Staltements
Staten'ents gents
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.
The Statement of Net Positi
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.
The Statement of Activities
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 in which the District incurs the liability, except for certain expenditures related to long-term
liabilities,which are recognized as expenditures to the extent the related liabilities matures each 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. Both the governmental
fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures and Changes in Fund
Balance provide a reconciliation to facilitate this comparison between governmental funds and
governmental activities.
The District maintains one individual governmental fund,the general fund.
4
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
3. FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE,
A. Net Position
The District's total net position decreased by$159,596 between fiscal year 2015 and 2014.A summary of
the District's Statements of Net Position is as follows:
Increase Percentage
2015 2014 (Decrease) Change
Current and Other Assets $ 726,043 $ 750,420 $ (24,377) (3.25)%
Capital Assets,Net 2,747,672 2,883,343 (135,671) (4.71)%
Total Assets 3,473,715 3,633,763 (160,048) (4.40)%
Current and Other Liabilities 140,031 140,483 (452) (0.32)%
Net Position
Net Investment in Capital Assets 2,747,672 2,883,343 (135,671) (4.71)%
Unrestricted 586,012 609,937 (23,925) (3.92)%
Total Net Position $ 3,333,684 $ 3,493,280 $ (159,596) (4.57)%
Current and other assets decreased by$24,377,primarily as a result of a reduction in the principal amount
invested in certificates of deposit with maturities greater than three months.
Current and other liabilities decreased by$452 as a result of a decrease in payroll taxes payable offset by
an increase in unearned credits.
Capital assets, net and the net investment in capital assets in the amount of$2,747,672 relates to capital
assets at cost less depreciation.This number decreased over the prior year as follows:
Capital asset additions $ 7,840
Depreciation expense (143,511)
$ (135,671)
- 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:
Increase Percentage
2015 2014 (Decrease) Change
Revenues
Program Revenues
Charges for Services $ 43,559 $ 48,812 $ (5,253) (10.76)%
General Revenues
Real Property Taxes 558,653 547,714 10,939 2.00 %
Other 1,999 3,870 (1,87 (48.35)%
Total Revenues 604,211 600,396 3,815 0.64 %
Expenses
General government support 763,807 776,982 (13,175) (1.70)%
Decrease in Net Position $ (159,596) $ (176,586) $ 16,990 (9.62)%
The District primarily relies on real property taxes to support its operations. The net increase in total
revenues in 2015 as compared to 2014 was$3,815 as shown above.
The total expenses in 2015 was $13,175 or 1.70% lower than 2014. In 2015, the District had decreased
maintenance expenses of$57,348, offset by an increase in payroll and related expenses of$40,158.
4. FINANCIAL ANALYSIS OF THE DISTRICT'S FUNDS
At December 31, 2015, the general fund, which is the only governmental fund, reported a fund balance of
$586,012, which is a decrease of$23,925 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.
Increase
2015 2014 (Decrease)
General Fund
Nonspendable:Prepaids $ 18,057 $ 23,398 $ (5,341)
Assigned:Designated 387,846 445,731 (57,885)
Unassigned:Fund balance 180,109 140,808 39,301
$ 586,012 $ 609,937 $ (23,925)
5. GENERAL FUND BUDGETARY HIGHLIGHTS
A. 2015 Budget
The District's general fund original budget for the year ended December 31, 2015 was$610,540.
The budget was primarily funded by real property taxes.
-6-
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 and amounts classified as
nonspendable. 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 $ 140,808
Revenues Under Budget (6,329)
Expenditures Over Budget (17,596)
Change in Nonspendable Fund Balance 5,341
Net Change in Assigned Fund Balance 57,885
Closing,Unassigned Fund Balance $ 180,109
Op ming Uoasiig..n ed Fund Balance
The$140,808 shown in the table is the portion of the District's December 31, 2014 fund balance that was
unassigned.
Revenues Over Budget
The 2015 budget for revenues was $610,540. Actual revenues received for the year were $604,211.
Actual revenues were less than estimated or budgeted revenues by$6,329. This difference decreases the
unassigned portion of the general fund-fund balance from December 31, 2014 to December 31, 2015.
awendit ares Over B. d t '
The 2015 budget for expenditures was $610,540. Actual expenditures for 2015 were $628,136.The final
budget was over expended by $17,596. This over expenditure was primarily the result of higher than
anticipated personnel costs and related benefits. This over expenditure decreases the unassigned
portion of the general fund-fund balance from December 31, 2014 to December 31, 2015.
Change in Nonspendable Fund Balance
The District prepaid various insurance policies at December 31, 2015. This resulting balance sheet asset
(prepaids) cannot be spent because it is not in a spendable form, meaning it will not be converted to cash.
Accordingly, an equal amount of fund balance is classified as nonspendable. The decrease in
nonspendable fund balance increases unassigned fund balance.
Net Change in As i,n•• Fund Balance
Assigned fund balance includes amounts earmarked for specific purposes. The decrease in assigned fund
balance increase unassigned fund balance.
-7-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Continued)
Closing,Unassigned Fund Balance
Based upon the summary changes shown in the above table, the District will begin the 2016 fiscal year
with an unassigned fund balance of$180,109. This is a $39,301 increase over the prior year unassigned
fund balance.
6. CAPITAL ASSETS AND LONG-TERM DEBT
At December 31, 2015, the District had invested in a broad range of capital assets, as indicated in the table
below. The net decrease in capital assets is due to depreciation of$143,511 in excess of capital additions of
$7,840 for the year ended December 31, 2015. A summary of the District's capital assets, net of depreciation
at December 31, 2015 and 2014 is as follows:
Increase
2015 2014 (Decrease)
Land $ 517,262 $ 517,262 $
Buildings and improvements 1,861,778 1,954,485 (92,707)
Machinery and equipment 368,632 411,596 (42,964)
Capital assets,net $ 2,747,672 $ 2,883,343 $ (135,671)
The District has no outstanding long-term debt.
7. ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
A. Subsequent Year's Budget
The general fund budget for the year ending December 31, 2016 is $614,871. This is an increase of$4,331
or 0.70% from the previous year's budget. The District budgeted property tax revenues at a $4,078
increase (0.73%) over the prior year's estimate.
B. Tax Cap
New York State law 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 2016 tax
levy is within the tax levy limit.
8. CONTACTING THE DI ST IC.
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 31,2015
ASSETS
Cash $ 25,345
Investments 557,385
Due from Town of Southold 125,256
Prepaids 18,057
Capital assets:
Not being depreciated-land 517,262
Being depreciated,net of accumulated depreciation 2,230,410
Total Assets 3,473,715
LIABILITIES
Payables
Accounts payable 8,490
Payroll taxes payable 6,285
Unearned credits
Collections in advance 125,256
Total Liabilities 140,031
NET POSITION
Net investment in capital assets 2,747,672
Unrestricted 586,012
Total Net Position $ 3,333,684
See Notes to Financial Statements -9 -
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Statement of Activities
For The Year Ended December 31,2015
Net(Expense)
Program Revenues Revenue and
Charges for Changes in
Expenses Services Net Position
FUNCTIONS/PROGRAMS
General government support $ 763,807 $ $ (763,807)
Compost facility 43,559 43,559
Total Functions and Programs $ 763,807 $ 43,559 (720,248)
GENERAL REVENUES
Real property taxes 558,653
Use of money and property 1,999
Total General Revenues 560,652
Change in Net Position (159,596)
Total Net Position-Beginning of Year 3,493,280
Total Net Position-End of Year $ 3,333,684
See Notes to Financial Statements - 10-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Balance Sheet-Governmental Funds
December 31,2015
Total
Governmental
General Funds
ASSETS
Cash $ 25,345 $ 25,345
Investments 557,385 557,385
Due from other governments 125,256 125,256
Prepaids 18,057 18,057
Total Assets $ 726,043 $ 726,043
LIABILITIES
Payables
Accounts payable $ 8,490 $ 8,490
Payroll taxes payable 6,285 6,285
Unearned credits
Collections in advance 125,256 125,256
Total Liabilities 140,031 140,031
FUND BALANCE
Nonspendable:Prepaids 18,057 18,057
Assigned,Designated for:
Compost facility/monitoring 209,600 209,600
Compost facility/equipment 22,500 22,500
Other equipment 41,989 41,989
Wages 100,000 100,000
Consulting 13,757 13,757
Unassigned:Fund balance 180,109 180,109
Total Fund Balance 586,012 586,012
Total Liabilities and Fund Balance $ 726,043 $ 726,043
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 31,2015
Total Governmental Fund Balance $ 586,012
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 $ 4,017,142
Accumulated depreciation (1,269,470)
2,747,672
Total Net Position $ 3,333,684
See Notes to Financial Statements - 12-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Statement of Revenues,Expenditures
and Changes in Fund Balance-Governmental Funds
For The Year Ended December 31,2015
Total
Governmental
General Funds
REVENUES
Real property taxes $ 558,653 $ 558,653
Use of money and property 1,999 1,999
Compost facility 43,559 43,559
Total Revenues 604,211 604,211
EXPENDITURES
General government support 495,784 495,784
Transportation 56,298 56,298
Employee benefits 68,559 68,559
Capital outlay 7,495 7,495
Total Expenditures 628,136 628,136
Deficiency of Revenues
Over Expenditures (23,925) (23,925)
Fund Balances-
Beginning of Year 609,937 609,937
End of Year $ 586,012 $ 586,012
See Notes to Financial Statements - 13 -
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Reconciliation of the Governmental Funds Statement of Revenues,Expenditures and
Changes in Fund Balance to the Statement of Activities
For The Year Ended December 31,2015
Net Change in Fund Balance $ (23,925)
Amounts reported for governmental activities in the Statement of Activities
are different because:
itai Reiat'edDiff r
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
depreciation exceeded capital outlays in the period.
Capital outlays $ 7,840
Depreciation expense (143,511)
(135,671)
Change in Net Position of Governmental Activities $ (159,596)
See Notes to Financial Statements - 14-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POILCIES
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
Government-Wide Financial Statement
The Statement of Net Position and the Statement of Activities present information about the overall
governmental financial activities of the District. The Statement of Net Position presents the financial
position of the District at fiscal year end. The Statement of Activities presents a comparison between
expenses for waste disposal and revenues for the fiscal year. Program revenues include fees charged for
certain disposal services. Revenues that are not classified as program revenues, including real property
taxes,are presented as general revenues.
Fund Financial Statements
The fund financial statements provide information about the District's funds. The District only has one
fund, the general fund. The general fund is the principle operating fund of the District and is used to
account for all financial transactions of the District except those required to be accounted for in another
fund,of which there are none.
C. Measurement Focus and Basis of Accounting
Accounting and financial reporting treatment is determined by the applicable measurement focus and
basis of accounting. Measurement focus indicates the type of resources being measured such as current
financial resources or economic resources. The basis of accounting indicates the timing of transactions or
events for recognition in the financial statements.
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting. 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.
15
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
The fund financial statements are reported using the current financial resources measurement focus and
the modified accrual basis of accounting. Revenues are recognized when measurable and available. The
District considers all revenues reported in the general fund 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 certain expenditures related to long-term liability, if any, which are recognized as
expenditures to the extent they have matured. General capital asset acquisitions are reported as
expenditures in the governmental funds.
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, 2015, $125,256 was due from
the Town.
E. 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.
F. 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 consist of certificates of deposit with maturity dates of more than three months from date of
acquisition and are reported at fair value,based on quoted market prices.
G. 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.
H. 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 required to be capitalized according to District policy and 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.
- 16-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
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.
J. Equity Classifications
Government-W . .µ me is
In the government-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:
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.
- 17-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
Restricted - Consists of amounts that are subject to externally enforceable legal purpose restrictions
imposed by creditors, grantors, contributors, or laws and regulation of other governments; or through
constitutional provisions or enabling legislation. The District has no restricted fund balance.
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.
Fund Balance Classif ion
Any portion of fund balance may be applied or transferred for a specific purpose by law,voter approval if
required by law or by formal action of the Board of Commissioners if voter approval is not required.
Amendments or modification to the applied or transferred fund balance must also be approved by formal
action of the Board of Commissioners.
In circumstances where an expenditure is incurred for a purpose for which amounts are available in
multiple fund balance classifications (that is restricted, assigned or unassigned) the expenditure is to be
spent first from the restricted fund balance to the extent appropriated by either the original budget or a
board approved budget revision and then from the assigned fund balance to the extent that there is an
assignment and then from the unassigned fund balance.
2. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE FUND STATEMENTS AND THE GOVERNMENT-
WIDE STATEMENTS
Due to the differences in the measurement focus and basis of accounting used in the fund statements and the
government-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 government-wide statements, compared with the current financial
resources measurement focus of the fund statements.
A. Total Fund Balances of General Fund vs.Net Position of Governmental Activities
Total fund balances of the District's general fund 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 can fall into any of three broad categories.
Long-Term Revenue and 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.
- 18-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
ital Related Differences
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.
Dong-Teras Debt Transaction Differences
ncts
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.
3. STEWARDSHIP",COMPLIANCE AND ACCOUNNTABILITY
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.The budget is then submitted to the Town of
Southold for inclusion in the Town budget and a public hearing is held thereon.
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 Commissioners 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.
B. 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 31,2015.
C. Over Expenditure of the Budget
Certain general fund appropriations were over expended. In addition, the general fund budget was over
expended in total.
-19-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
4. IEPOSITS WITH FINANCIAL INSTITU'T'IONS 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:
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.
The District's aggregate bank balances and certificates of deposit were covered by FDIC insurance at year end.
The District was not exposed to any material interest rate risk or foreign currency risk.
5. CAPITAL ASSETS
Capital asset balances and activity for the year ended December 31, 2015 were as follows:
Balance Balance
12/31/14 Additions Reductions 12/31/15
Governmental activities
Capital assets not being depreciated
Land $ 517,262 $ $ $ 517,262
Total capital assets
not being depreciated 517,262 517,262
Capital assets being depreciated
Buildings and improvements 2,777,213 45 2,777,258
Machinery and equipment 714,827 7,795 722,622
Total capital assets
being depreciated 3,492,040 7,840 3,499,880
Less accumulated depreciation for:
Buildings and improvements 822,728 92,752 915,480
Machinery and equipment 303,231 50,759 353,990
Total accumulated depreciation 1,125,959 143,511 1,269,470
Total capital assets,
being depreciated,net 2,366,081 (135,671) - 2,230,410
Capital assets,net $ 2,883,343 $ (135,671) $ $ 2,747,672
Depreciation expense was$143,511.
-20-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
NOTES TO FINANCIAL STATEMENTS
(Continued)
6. 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; 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.
-21-
FISHERS ISLAND WASTE MANAGEMENT DISTRICT
Schedule of Revenues,Expenditures and Changes in Fund Balance
Budget and Actual-General Fund
For The Year Ended December 31,2015
Final Budget
Original Final Variance with
Budget Budget Actual Actual
REVENUES
Local Sources
Real Property Taxes $ 558,643 $ 558,643 $ 558,653 $ 10
Use of Money&Property 3,872 3,872 1,999 (1,873)
Compost Facility 48,025 48,025 43,559 (4,466)
Total Revenues $ 610,540 $ 610,540 604,211 $ (6,3291
EXPENDITURES
Accounting $ 12,000 $ 12,000 11,000 $ 1,000
Bank Charges 2,500 2,500 3,090 (590)
Building&Maintenance 6,000 6,000 4,683 1,317
Building Utilities 13,260 13,260 9,994 3,266
Casual Labor 69 (69)
Commissioner's Fees 15,000 15,000 8,979 6,021
Compost Equipment Maintenance 15,100 15,100 5,861 9,239
Compost Facility Utilities 4,100 4,100 2,931 1,169
Consultants 15,000 15,000 32,861 (17,861)
Employee Benefits,Payroll&Wages 301,400 301,400 326,282 (24,882)
Employee Training 5,000 5,000 3,506 1,494
Equipment 7,495 (7,495)
Equipment Maintenance 30,200 30,200 17,308 12,892
Ferry Transportation 50,000 50,000 56,298 (6,298)
Garbage Tipping Fees&Hauling 85,420 85,420 76,442 8,978
Hazardous Waste Removal 364 (364)
Insurance 25,500 25,500 29,623 (4,123)
Compost Facility Maintenance 7,550 (7,550)
Legal Fees 10,000 10,000 71 9,929
Office Expense 3,460 3,460 4,168 (708)
Research and Development 1,000 1,000 1,000
Transfer Station Utilities 5,400 5,400 3,160 2,240
Transfer Station Improvements 10,200 10,200 6,567 3,633
Workers'Compensation 9,834 (9,834)
Total Expenditures $ 610,540 $ 610,540 628,136 $ (17,596)
Net Change in Fund Balance (23,925)
Fund Balance-Beginning of Year 609,937
Fund Balance-End of Year $ 586,012
Note to Required Supplementary Information
13 g41 a i$of AcomiLing
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 -22 -