HomeMy WebLinkAbout2011 05.31 Financial Report Village of Cayuga Heights.pdfVILLAGE OF CAYUGA HEIGHTS
Ithaca, New York
FINANCIAL REPORT
May 31, 2011
VILLAGE OF CAYUGA HEIGHTS
TABLE OF CONTENTS
FOR THE YEAR ENDED MAY 31, 2011
Independent Auditor’s Report ............................................................................................................................1-1a
Management’s Discussion and Analysis ...........................................................................................................2-2g
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Assets .............................................................................................................................3
Statement of Activities .................................................................................................................................4
Fund Financial Statements
Balance Sheet -Governmental Funds .......................................................................................................5
Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Assets ..........................6
Statement of Revenues, Expenditures, and Changes in Fund Balances -Governmental Funds ............7
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Statement of Activities .......................................................................................8
Statement of Fiduciary Net Assets -Fiduciary Finds .................................................................................9
Notes to Financial Statements ..............................................................................................................10-22
Required Supplementary Information
Budgetary Comparison Schedule -General Fund -Non-GAAP Budget Basis ............................................23
Budgetary Comparison Schedule -Special Revenue Funds -Non-GAAP Budget Basis ............................24-25
Schedule of Funding Progress ........................................................................................................................26
Notes to Required Supplementary Information .............................................................................................27
Reports Required Under Government Auditing Standards
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 ..................................................................................................................28-29
CORTLAND ITHACA WATKINS GLEN
John H. Dietershagen, C.P.A.
Jerry E. Mickelson, C.P.A.
Thomas K. Van Derzee, C.P.A.
Debbie Conley Jordan, C.P.A.
Patrick S. Jordan, C.P.A.
Duane R. Shoen, C.P.A.
Lesley L. Horner, C.P.A.
D. Leslie Spurgin, C.P.A.
Frederick J. Ciaschi, C.P.A.
Certified Public Accountants and Consultants
Ciaschi Dietershagen Little Mickelson
& Company, LLP
39 Church Street
Cortland, New York 13045
607-753-7439
fax 607-753-7874
108 West Fourth Street
Watkins Glen, New York 14891
607-535-4443
fax 607-535-6220
401 East State Street ~ Suite 500
Ithaca, New York 14850
607-272-4444
fax 607-273-8372
www.cdlm.com
INDEPENDENT AUDITOR’S REPORT
Mayor and Village Trustees
Village of Cayuga Heights
Ithaca, New York
We have audited the accompanying financial statements of the governmental activities, each major fund and
the aggregate remaining fund information of the Village of Cayuga Heights (the Village), as of and for the year
ended May 31,2011, which collectively comprise the Village’s basic financial statements as listed in the table of
contents. These financial statements are the responsibility of the Village’s management. 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 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 of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the governmental activities, each major fund and the aggregate remaining fund information of the
Village, as of May 31,2011, and the respective changes in financial position thereof, for the year then ended, in
conformity with accounting principles generally accepted in the United States of America.
During the year ended May 31, 2011, the Village implemented Governmental Accounting Standards Board
Statement Number 54, “Fund Balance Reporting and Governmental Fund Type Definitions.”
In accordance with Government Auditing Standards, we have also issued our report dated March 6, 2012,
on our consideration of the Village’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 and should be considered in assessing the results of our audit.
-1 -
-1a -
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis and budgetary comparison information on pages 2 through 2g and 23 through 27 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.
March 6, 2012
Ithaca, New York
VILLAGE OF CAYUGA HEIGHTS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED MAY 31, 2011
-2 -
The following is a discussion and analysis of the Village of Cayuga Heights’(the Village) financial performance
for the fiscal year ended May 31, 2011. This section is a summary of the Village’s financial activities based on
currently known facts, decisions, or conditions. It is also based on both the Government-wide and fund-based
financial statements. The results of the current year are discussed in comparison with the prior year, with an
emphasis placed on the current year. The Management’s Discussion and Analysis (MD&A) section is only an
introduction and should be read in conjunction with the Village’s financial statements, which immediately follow this
section.
FINANCIAL HIGHLIGHTS
During the year ended May 31, 2011, the Village updated their actuarial valuation of its retiree medical
insurance liability in accordance with the adoption of Governmental Accounting Standards Board (GASB)
Statem ent Number 45, “Accounting and Financial Reporting by Employers for Postemployment Benefits
Other than Pensions.” The Village’s annual required contribution (ARC) for 2011 was $311,624. However,
the Village’s expected employer contributions totaled $105,196 during the current fiscal year, resulting in a
net liability increase of $225,125 and a net liability of $536,781 for the remaining portion of the ARC.
The assets of the Village exceeded its liabilities at the close of the most recent fiscal year by $23,546,787
(net assets).To meet the government’s ongoing obligations to citizens and creditors,$2,393,110
(unrestricted net assets) may be used.
During the year, the Village had expenses that were $1,303,613 more than the $4,176,771 generated in tax
and other revenues for governmental programs.
The General Fund recorded a decrease of $(281,746)in 2011 and had a fund balance at the end of the
year of $1,508,273.
The resources available for appropriation in the General Fund were $(86,430)less than budgeted and
expenditures were $13,827 favorable when compared to budget. The difference in budgeted revenue
versus actual was due in part to CHIPS funding from the State being less than expected. The difference in
budgeted expenditures versus actual was due to lower than expected general government expenditures.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of three parts: MD&A (this section), the basic financial statements and
supplementary information, both required and not required. The basic financial statements include two kinds of
statements that present different views of the Village.
The first two statements are Government-wide financial statements that provide both short-term and
long-term information about the Village’s overall financial status.
The remaining statements are Governmental Fund financial statements that focus on individual parts of
the Village, reporting the Village’s operations in greater detail than the Government-wide financial
statements. The Governmental Fund financial statements concentrate on the Village’s most significant
funds with all other Non-Major Funds listed in total in one column.
The Governmental Funds statements detail how basic services such as regular and special
revenues were financed in the short-term as well as what remains for future spending.
The financial statements also include notes that explain some of the information in the statements and
provide more detailed data. The statements are followed by a section of required supplementary information
(RSI)that further explains and supports the financial statements with a comparison of the Village’s budgets for
the year.
VILLAGE OF CAYUGA HEIGHTS
MANAGEMENT’S DISCUSSION AND ANALYSIS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-2a -
Government-wide Statement of Net Assets and Statement of Activities
The Statement of Net Assets and Statement of Activities report information about the Village as a whole
using accounting methods similar to those used by private-sector companies. The Statement of Net Assets
includes all of the Village’s assets and liabilities. All of the current year’s revenues and expenses are accounted
for in the Statement of Activities regardless of when cash is received or paid.
The two Government-wide financial statements report the Village’s net assets and how they have changed.
Net assets -the difference between the Village’s assets and liabilities -are one way to measure the Village’s
financial health or position. Over time, increases or decreases in the Village’s net assets are an indicator of
whether its financial position is improving or deteriorating, respectively.
Governmental Fund Financial Statements
The Governmental Funds are accounting devices the Village uses to keep track of specific sources of funding
and spending. The Village’s basic services are included in Governmental Funds, which generally focus on (1) how
cash and other financial assets that can readily be converted to cash flow in and out and (2) the balances left at
year end that are available for spending. Consequently, the Governmental Funds Balance Sheet and Statement of
Revenues, Expenditures and Changes in Fund Balances provide a detailed short-term view that helps one
determine whether there are more or fewer financial resources that can be spent in the near future to finance the
Village’s programs. Because this information does not encompass the additional long-term focus of the Statement
of Net Assets and Statement of Activities, additional information in the notes to the financial statements explains the
relationship (or differences) between them.
FINANCIAL ANALYSIS OF THE VILLAGE AS A WHOLE
The Village’s combined net assets for fiscal year ended May 31, 2011 decreased from $24,850,400 to
$23,546,787. The Village’s investment in its capital assets (e.g. land, buildings, machinery and equipment and
infrastructure), less any related debt used to acquire those assets that is still outstanding, has a balance of
$21,153,677 at May 31, 2011. The Village uses these capital assets to provide services to citizens; consequently,
these assets are not available for future spending. Although the Village’s investment in its capital assets is reported
net of related debt, it should be noted that the resources needed to repay this debt must be provided by other
sources, as the capital assets themselves cannot be used to liquidate these liabilities.
Our analysis below focuses on the net assets (Figure 1), and changes in net assets (Figure 2), of the Village’s
Governmental Activities.
Figure 1
Net Assets
Condensed Statements of Net Assets Governmental Activities Total Dollar Change
2010 2011 2010 -2011
Current assets $3,077,882 $3,034,474 $ (43,408)
Equity in joint venture 586,049 527,721 (58,328)
Capital assets, net 24,558,954 24,315,211 (243,743)
Total assets 28,222,885 27,877,406 (345,479)
Current liabilities 1,528,849 1,690,180 161,331
Noncurrent liabilities 1,843,636 2,640,439 796,803
Total liabilities 3,372,485 4,330,619 958,134
Invested in capital assets, net of debt 22,070,041 21,153,677 (916,364)
Unrestricted 2,780,359 2,393,110 (387,249)
Total net assets $ 24,850,400 $ 23,546,787 $ (1,303,613)
VILLAGE OF CAYUGA HEIGHTS
MANAGEMENT’S DISCUSSION AND ANALYSIS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-2b -
Current assets of the Village decreased by (1.4)% during the current year, primarily due to a decrease in
state and federal receivables from the prior year. Capital assets,net,decreased by (1.0)% during the year; this
is related to current year depreciation being higher than current year additions. Current liabilities increased by
10.6% as a result of the Village having a larger Bond Anticipation Note (BANs) outstanding at year end.
Noncurrent liabilities increased by 43.2%, as a result of the second year installment of Governmental Accounting
Standards Board (GASB) Statement Number 45 accounting for postemployment benefits during the current
fiscal year.
Net assets of the Village’s Governmental Activities decreased $(1,303,613).
Figure 2
Changes in Net Assets
Changes in Net Assets Governmental Activities Total Dollar
Change
Percent
Change
2010 2011 2010 -2011 2010 -2011
REVENUES
Program revenues:
Charges for services $1,557,201 $ 1,680,156 $ 122,955 7.9%
Operating grants 97,470 99,327 1,857 1.9%
Capital grants and contributions 92,050 133,021 40,971 44.5%
General revenues:
Property taxes and tax items 2,055,143 2,130,450 75,307 3.7%
Nonproperty taxes 677,721 770,046 92,325 13.6%
Use of money and property 23,794 19,438 (4,356)(18.3)%
Other general revenues 778,581 (655,667)(1,434,248)(184.2)%
Total revenues 5,281,960 4,176,771 (1,105,189)(20.9)%
PROGRAM EXPENSES
General government 836,519 888,894 52,375 6.3%
Public safety 1,603,637 2,041,322 437,685 27.3%
Transportation 1,358,655 1,051,599 (307,056) (22.6)%
Home and community services 1,072,168 1,365,653 293,485 27.4%
Interest on long-term debt 98,088 132,916 34,828 35.5%
Total expenses $4,969,067 $ 5,480,384 $ 511,317 10.3%
DECREASE IN NET ASSETS $ 312,893 $(1,303,613)$(1,616,506)(516.6)%
Governmental Activities
Capital grants and contributions increased due to the Town of Ithaca paying for one third of the cost of the new
fire engine.Other general revenues decreased significantly related to the Village receiving a premature deposit of
construction money in the amount of $725,732 during the prior year, which became debt for the current year.
Increases in general government, public safety, and home and community services expenditures are related to
increases in contractual expenditures. Transportation expenses decreased due to decreased costs in road
maintenance.
VILLAGE OF CAYUGA HEIGHTS
MANAGEMENT’S DISCUSSION AND ANALYSIS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-2c -
Figure 3
Revenue by Source -2011
Ch arges for
servi ces
40.23%
Operating grants
2.38%
Capital grants
3.18%Other
(15.23)%
Property taxes
and tax item s
51.00%
Nonproperty
taxes
18.44%
Figure 4
Revenue by Source -2010
Ch arges for
servi ces
29.48%
Operating grants
1.85%
Capital Grants
1.74%
Other
15.19%
Property taxes
and tax item s
38.91%
Nonprope rty taxes
12.83%
The cost of all Governmental Activities this year was $5,480,384. However, as shown in the Statement of
Activities, the amount our taxpayers ultimately financed for these activities through Village property and payments in
lieu of taxes was $3,567,880, as some of the cost was paid by those who directly benefited from the programs
$(1,680,156), or by other government and organizations that subsidized certain programs with grants and
contributions $(232,348). Overall, the Village’s governmental program revenues, including fees for services and
grants were $1,912,504. The Village paid for the remaining “public benefit” portion of Governmental Activities with
$2,264,267 in taxes and with other revenues, such as interest and general entitlements.
VILLAGE OF CAYUGA HEIGHTS
MANAGEMENT’S DISCUSSION AND ANALYSIS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-2d -
The total cost less revenues generated by activities, or the net cost, for each of the Village’s largest programs is
presented below. The net cost shows the financial burden placed on the Village’s taxpayers by each of these
functions.
Figure 5
Net Program Cost
Governmental Activities
2011
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2,200,000 Co st
Rev enue
Figure 6
Net Program Cost
Governmental Activities
2010
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000 Co st
Rev enue
VILLAGE OF CAYUGA HEIGHTS
MANAGEMENT’S DISCUSSION AND ANALYSIS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-2e -
FINANCIAL ANALYSIS OF THE VILLAGE’S FUNDS
Figure 7 shows the changes in fund balances for the year for the Village’s funds. As the Village completed the
year, its Governmental Funds, as presented in the balance sheet, reported a combined fund balance of $1,522,918.
Overall, most of the decreases were due to excess expenditure over revenue in the General and Capital Funds,
while the Water and Sewer Fund showed a planned increased in fund balance for the current year.
Figure 7 -Governmental Funds
Fund Balances at Year Ending
Governmental Fund Balances 2010 2011
Dollar Change
2010 -2011
General Fund $ 1,790,019 $ 1,508,273 $(281,746)
Water Fund 1,438 67,892 66,454
Sewer Fund 862,409 999,066 136,657
Capital Projects Fund (973,913)(1,052,313)(78,400)
Totals $ 1,679,953 $ 1,522,918 $(157,035)
General Fund Budgetary Highlights
Over the course of the year, the Village Board as well as the management of the Village revised the Village
budget several times. These budget amendments consist of (1) budget transfers between functions, which do not
increase the overall budget, and (2) budget revisions, which decreased estimated appropriations for the Sewer
Fund.
Even with these adjustments, the actual charges to appropriations (expenditures) were below the final budget
amounts. The most significant variance was recorded in general support activities.
Additionally, resources available for appropriation were $(86,430)less than the final budgeted amount this is
primarily due to the lower CHIPS funding received that expected.
VILLAGE OF CAYUGA HEIGHTS
MANAGEMENT’S DISCUSSION AND ANALYSIS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-2f -
Figure 8 summarizes the original and final budgets, actual expenditures (including encumbrances), and
variances for the General Fund for the year ending May 31, 2011.
Figure 8
Condensed Budgetary Comparison
General Fund -2011
Original
Budget
Revised
Budget
Actual w/
Encumbrances
Total Dollar
Variance
REVENUES
Real property taxes $2,125,300 $2,125,292 $ 2,125,292 $ -0-
Other tax items 666,000 775,204 775,204 -0-
State sources 241,610 264,091 177,661 (86,430)
All other 323,190 306,834 306,834 -0-
Total Revenues $3,356,100 $3,471,421 $ 3,384,991 $(86,430)
EXPENDITURES
General support 737,800 676,654 662,827 13,827
Public safety 1,036,450 989,091 989,091 -0-
Transportation 670,620 791,490 791,490 -0-
Home and community services 218,740 209,174 209,174 -0-
Employee benefits 762,690 778,453 778,453 -0-
Debt service 177,200 177,102 177,102 -0-
Total Expenditures $3,603,500 $3,621,964 $ 3,608,137 $ 13,827
INTERFUND TRANSFERS
Interfund transfers in 94,900 94,900 94,900 -0-
Interfund transfers (out) (77,500)(153,500) (153,500) -0-
Net Interfund Transfers $ 17,400 $(58,600)$ (58,600)$ -0-
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of May 31, 2011, the Village had $24,315,211, net of accumulated depreciation invested in a broad
range of capital assets, including buildings, machinery and equipment, streets and bridges. This amount
represents a net decrease (including additions and deductions) of 1.0% or $(243,743). Depreciation expense
during the year amounted to $1,030,134.
Figure 9 -Capital Assets
Net of Depreciation
Governmental Activities
And Total Government Dollar Change
2010 2011 2010 -2011
Land $102,401 $102,401 $ -0-
Construction-in-Progress -0--0- -0-
Infrastructure 17,999,121 17,557,204 (441,917)
Buildings and improvements 5,263,465 5,131,723 (131,742)
Equipment 1,193,967 1,523,883 329,916
Totals $24,558,954 $24,315,211 $(243,743)
VILLAGE OF CAYUGA HEIGHTS
MANAGEMENT’S DISCUSSION AND ANALYSIS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-2g -
Debt Administration
Debt, which consists of bonds, considered a liability of Governmental Activities, increased by $990,673. This
increase was primarily due new debt related to the phosphorous treatment project and the recording of
postemployment benefits, bringing total debt and long-term liabilities to $3,944,660 as of May 31, 2011, as shown in
Figure 10. Of the amount of bonds outstanding, $2,109,221 is subject to the constitutional debt limit and
represented 7.9% of the Village’s statutory debt limit.
Figure 10 -Major Outstanding Debt at Year Ending
Governmental Activities
and Total Government Dollar Change
2010 2011 2010 -2011
Serial bonds $1,515,000 $2,109,221 $594,221
BAN 1,000,351 1,155,000 154,649
Other postemployment benefits 311,656 536,781 225,125
Compensated absences 126,980 143,658 16,678
Totals $2,953,987 $3,944,660 $ 990,673
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
The Village of Cayuga Heights has little undeveloped area, thus most changes in the tax base occur through
reassessment. Opportunities for new sources of revenue are limited.
Pension costs are projected to escalate significantly in the coming years, and we still experience cost pressure
with health insurance.
Energy prices have only abated marginally.
CONTACTING THE VILLAGE’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with
a general overview of the Village’s finances and to show the Village’s accountability for the money it receives. If you
have questions about the report or need any additional financial information contact Jeffrey Silber, Treasurer, at 836
Hanshaw Road, Ithaca, New York 14850.
Governmental
Activities
Current Assets:
Cash and cash equivalents - Unrestricted $2,645,570
- Restricted 102,687
Due from other governments 63,404
Other receivables, net 178,606
Prepaid expenses 44,207
Total Current Assets 3,034,474
Noncurrent Assets:
Equity in joint venture 527,721
Land and other nondepreciable capital assets 102,401
Capital assets, net of accumulated depreciation 24,212,810
Total Noncurrent Assets 24,842,932
Total Assets 27,877,406
Current Liabilities:
Accounts payable 239,923
Accrued liabilities 116,633
Bond Anticipation Notes payable 1,155,000
Interest payable 29,403
Long-term liabilities due within one year:
Bonds payable 149,221
Total Current Liabilities 1,690,180
Long-term liabilities due after one year:
Compensated absences 143,658
Bonds payable 1,960,000
536,781
Total Long-term Liabilities 2,640,439
Total Liabilities 4,330,619
Invested in capital assets, net of related debt 21,153,677
Unrestricted 2,393,110
Total Net Assets $23,546,787
VILLAGE OF CAYUGA HEIGHTS
STATEMENT OF NET ASSETS
MAY 31, 2011
- 3 -
See Independent Auditor's Report and Notes to Financial Statements
ASSETS
LIABILITIES
Other postemployment benefit liability
NET ASSETS
VILLAGE OF CAYUGA HEIGHTS
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED MAY 31, 2011
Primary
Government
Net (Expense)
Revenue and
Changes in
Net Assets
Operating Capital Total
Charges for Grants and Grants and Governmental
Expenses Services Contributions Contributions Activities
Governmental Activities:
General governmental support $888,894 $11,845 $$133,021 $(744,028)
Public safety 2,041,322 195,322 (1,846,000)
Transportation 1,051,599 86,987 (964,612)
Home and community services 1,365,653 1,472,989 12,340 119,676
Interest on long-term debt 132,916 (132,916)
Total Governmental Activities $5,480,384 $1,680,156 $99,327 $133,021 (3,567,880)
Real property taxes 2,125,292
Real property tax items 5,158
Nonproperty tax items 770,046
Use of money and property 19,438
Sale of property and compensation for loss 10,113
Miscellaneous local sources (698,126)
State sources 90,674
Change in investment in joint venture (58,328)
Total General Revenues 2,264,267
Change in Net Assets (1,303,613)
Net Assets - Beginning of Year 24,850,400
Net Assets - End of Year $23,546,787
- 4 -
See Independent Auditor's Report and Notes to Financial Statements
Program Revenues
FUNCTIONS/PROGRAMS
GENERAL REVENUES
VILLAGE OF CAYUGA HEIGHTS
BALANCE SHEET
GOVERNMENTAL FUNDS
MAY 31, 2011
Capital Total
General Projects Water Sewer Governmental
Fund Fund Fund Fund Funds
Assets:
Cash and cash equivalent - Unrestricted $1,419,800 $(9,787) $131,596 $1,103,961 $2,645,570
Cash and cash equivalent - Restricted 102,687 102,687
Due from other funds 53,913 74 53,987
Due from other governments 63,404 63,404
Other receivables, net 20,136 133,021 24,327 1,122 178,606
Prepaid expenses 43,034 445 728 44,207
Total Assets $1,702,974 $123,308 $156,368 $1,105,811 $3,088,461
Liabilities:
Accounts payable $81,214 $20,270 $69,506 $68,933 $239,923
Accrued liabilities 108,444 351 4,847 2,991 116,633
Due to other funds 5,043 14,123 34,821 53,987
Bond Anticipation Notes payable 1,155,000 1,155,000
Total Liabilities 194,701 1,175,621 88,476 106,745 1,565,543
Fund Balances:
Fund Balances - Unreserved, Reported in:
General Fund:
Designated - Ensuing year's budget 360,000 360,000
Undesignated 1,148,273 1,148,273
Special Revenue Funds:
Designated - Ensuing year's budget 100,000 100,000
Undesignated 67,892 899,066 966,958
Capital Projects Fund:
Undesignated (1,052,313)(1,052,313)
Total Fund Balances 1,508,273 (1,052,313)67,892 999,066 1,522,918
Total Liabilities and Fund Balances $1,702,974 $123,308 $156,368 $1,105,811 $3,088,461
Major Funds
- 5 -
See Independent Auditor's Report and Notes to Financial Statements
Special Revenue Funds
AS SETS
LIABILITIES AND FUND BALANCES
Total Governmental Fund Balances $1,522,918
24,315,211
527,721
(29,403)
(2,789,660)
Net Assets of Governmental Activities $23,546,787
Capital assets,net of accumulated depreciation,used in Governmental Activities are not
current financial resources and, therefore, are not reported in the funds.
Investment in equity of the Southern Cayuga Lake Intermunicipal Water Commission is
not a current financial resource and is not reported in the Governmental Funds.
Accrued interest payable reported in the Statement of Net Assets does not require the use
of current financial resources and,therefore,is not reported as a liability in the
Governmental Funds.
Long-term liabilities,including bonds payable and the long-term portion of compensated
absences are not due and payable in the current period and,therefore,are not reported in
the funds.
See Independent Auditor's Report and Notes to Financial Statements
- 6 -
VILLAGE OF CAYUGA HEIGHTS
RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
MAY 31, 2011
Amounts reported for Governmental Activities in the Statement of Net Assets are different
because:
VILLAGE OF CAYUGA HEIGHTS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED MAY 31, 2011
Capital Total
General Projects Water Sewer Governmental
Fund Fund Fund Fund Funds
REVENUES
Real property taxes $2,125,292 $$$$2,125,292
Real property tax items 5,158 5,158
Nonproperty tax items 770,046 770,046
Departmental income 38,737 514,209 235,494 788,440
Intergovernmental charges 177,442 133,021 685,629 996,092
Use of money and property 14,773 239 4,426 19,438
Licenses and permits 10,765 10,765
Fines and forfeitures 17,880 17,880
Sale of property and compensation for loss 22,597 11,292 33,889
Miscellaneous local sources 24,640 163 24,803
State sources 177,661 12,340 190,001
Total Revenues 3,384,991 133,021 514,611 949,181 4,981,804
EXPENDITURES
Current:
General governmental support 662,827 1,330 14,326 678,483
Public safety 989,091 989,091
Transportation 791,490 791,490
Home and community services 209,174 311,506 607,110 1,127,790
Employee benefits 778,453 12,983 21,127 812,563
Debt Service:
Principal 100,000 75,000 40,000 215,000
Interest 77,102 22,438 24,893 124,433
Capital outlay 474,989 474,989
Total Expenditures 3,608,137 474,989 423,257 707,456 5,213,839
Excess of (Expenditures) Revenues (223,146) (341,968) 91,354 241,725 (232,035)
OTHER FINANCING SOURCES (USES)
Interfund transfers in 94,900 188,568 283,468
Interfund transfers (out)(153,500)(24,900) (105,068) (283,468)
Proceeds of obligations 75,000 75,000
Total Other Financing (Uses) Sources (58,600) 263,568 (24,900) (105,068) 75,000
Excess of (Expenditures) and Other (Uses)
Over Revenues and Other Financing Sources (281,746) (78,400) 66,454 136,657 (157,035)
Fund Balances, Beginning of Year 1,790,019 (973,913) 1,438 862,409 1,679,953
Fund Balances, End of Year $1,508,273 $(1,052,313)$67,892 $999,066 $1,522,918
Special Revenue Funds
Major Funds
- 7 -
See Independent Auditor's Report and Notes to Financial Statements
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
Net Change in Fund Balances - Total Governmental Funds $(157,035)
Capital outlay $786,391
Depreciation (1,030,134) (243,743)
Principal payment $140,000
Proceeds of obligations (734,221) (594,221)
Change in other postemployment benefits $(225,125)
Net change in accrued interest payable (8,483)
Net change in compensated absences (16,678)
Net change in investment in joint venture equity (58,328) (308,614)
Change in Net Assets of Governmental Activities $(1,303,613)
- 8 -
See Independent Auditor's Report and Notes to Financial Statements
Bond proceeds provide current financial resources to Governmental Funds,but issuing
debt increases long-term liabilities in the Statement of Net Assets.Repayment of debt
principal is an expenditure in the Governmental Funds,but the repayment reduces long-
term liabilities in the Statement of Net Assets.This is the net amount of principal
payments and proceeds of obligations.
Amounts reported for Governmental Activities in the Statement of Activities are different
because:
Governmental Funds report purchases of capital assets as expenditures.However,in the
Statement of Activities,the cost of those assets is allocated over their estimated useful
lives as depreciation expense.This is the amount by which depreciation expense
exceeded capital outlay in the current period.
VILLAGE OF CAYUGA HEIGHTS
RECONCILIATION OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED MAY 31, 2011
Some expenses reported in the Statement of Activities do not require the use of current
financial resources and,therefore,are not reported as expenditures in the Governmental
Funds.
Agency
Funds
Cash and cash equivalents - Unrestricted $(1,748)
Due from governmental funds 4,925
Total Assets $3,177
Agency liabilities 3,177
Total Liabilities $3,177
- 9 -
VILLAGE OF CAYUGA HEIGHTS
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
MAY 31, 2011
See Independent Auditor's Report and Notes to Financial Statements
ASSETS
LIABILITIES
VILLAGE OF CAYUGA HEIGHTS
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED MAY 31, 2011
-10 -
Note 1 -Summary of Significant Accounting Policies
The accompanying financial statements of the Village of Cayuga Heights (the Village)have been
prepared in conformity with generally accepted accounting principles (GAAP) as applied to
government units. The Governmental Accounting Standards Board (GASB) is the accepted standard
setting body for establishing governmental accounting and financial reporting principles. The more
significant of the Village’s accounting policies are described below.
A.Financial Reporting Entity
The Village was established in 1915 and is governed by Village Law, various local laws, and
other municipal laws of the State of New York. The Mayor and six trustees are the legislative
body responsible for overall operation;the Mayor serves as chief executive officer and the
Treasurer serves as chief fiscal officer.
The following basic services are provided: public safety (police and fire), highways and
streets, home and community services,public improvements, planning and zoning, water, sewer
and general administration.
All Governmental Activities and functions performed for the Village are its direct responsibility.
Ambulance service is provided by a private organization.
The financial reporting entity consists of the following, as defined by GASB Statement
Number 14, “The Financial Reporting Entity,”as amended by GASB Statement Number 39,
“Determining Whether Certain Organizations are Component Units.”
a.The primary government, which is the Village,
b.Organizations for which the primary government is financially accountable, and;
c.Other organizations for which the nature and significance of their relationship with the
primary government are such that exclusion would cause the reporting entity’s basic
financial statements to be misleading or incomplete as set forth in GASB Statement
Number 14 as amended by GASB Statement Number 39.
The decision to include a potential component unit in the Village's reporting entity is based on
several criteria set forth in GASB Statement Number 14 as am ended by GASB Statement
Number 39, including legal standing, fiscal dependency, and financial accountability. Based on
the application of these criteria, the following is a brief review of certain entities considered in
determining the Village's reporting entity.
1.Joint Venture
The Southern Cayuga Lake Intermunicipal Water Commission (the Commission)is a joint
venture undertaken with the Village and the Towns of Ithaca, Dryden,and Lansing under
Article 5 of the General Municipal Law of the State of New York. The purpose of the
Commission is to provide water services to its member municipalities. Because the
Commission and its functions or activities are related to the Village, it is included in the
Village's Government-wide Statement of Net Assets as an investment in a joint venture.
Separate financial statements of the joint venture are issued and can be obtained at the
Commission in Ithaca, NY.
VILLAGE OF CAYUGA HEIGHTS
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-11 -
B.Basis of Presentation
1.Government-wide Financial Statements
The Government-wide financial statements include a Statement of Net Assets and a
Statement of Activities. These statements present summaries of activities for the primary
government. Government-wide financial statements do not include the activities reported in the
Fiduciary Funds. The focus of the Government-wide financial statements addresses the
sustainability of the Village as an entity and the change in the Village’s net assets resulting from
the current year's activities.
In the Government-wide Statement of Net Assets, the Governmental Activities column is
presented on a consolidated basis, and is reported on a full accrual, economic resource basis,
which recognizes all long-term assets and receivables as well as long-term debt and obligations.
The Village’s net assets are reported in three parts -invested in capital assets, net of related debt;
restricted net assets; and unrestricted net assets. The Village first utilizes restricted resources to
finance qualifying activities.
The Statement of Activities reports both the gross and net cost for each of the Village’s
functions or programs. Gross expenses are direct expenses, including depreciation, that are
specifically associated with a service, program or department and are, therefore, clearly
identifiable to a particular function. These expenses are offset by program revenues -
charges paid by the recipients of the goods or services offered by the programs, grants, and
contributions -that are restricted to meeting the program or capital requirements of a
particular program. Depreciation on assets that are shared by essentially all of the Village’s
programs has been reported in general governmental support. Revenues which are not
classified as program revenues are presented as general revenues of the Village, with certain
limited exceptions. The net cost represents the extent to which each function or program is
self-financing or draws from the general revenues of the Village.
2.Governmental Fund Financial Statements
The financial transactions of the Village are reported in individual funds in the
Governmental Fund financial statements. Each fund is accounted for by providing a separate
set of self-balancing accounts that comprise its assets, liabilities, reserves, fund equity,
revenues and expenditures or expenses. Fund accounting is designed to demonstrate legal
compliance and to aid financial management by segregating transactions related to certain
government functions or activities.
The Village records its transactions in the funds described below:
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 based upon determination of financial position and
changes in financial position under the modified accrual basis of accounting. The
following are the Village’s Governmental Funds:
Major Funds
General Fund -Principal operating fund which includes all operations not
required to be recorded in other funds.
VILLAGE OF CAYUGA HEIGHTS
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-12 -
Capital Projects Fund -Accounts for and reports financial resources to be used
for the acquisition, construction, or renovation of the Village’s major capital
facilities or equipment.
Special Revenue Funds
Water Fund -Accounts for revenues derived from charges for water
consumption and benefited assessments, and the application of such
revenues toward related operating expenses and debt retirement.
Sewer Fund -Accounts for revenues derived from charges for sewer usage
and benefited assessments, and the application of such revenues toward
related operating expenses and debt retirement.
Fiduciary Fund Types
Account for assets held by the local government in a trustee or custodial capacity.
The following is the Village’s Fiduciary Fund type:
Agency Funds -Account for money and/or property received and held in the
capacity of trustee, or custodian or agent.
C.Basis of Accounting/Measurement Focus
Basis of accounting refers to when revenues and expenditures and the related assets and
liabilities are recognized in the accounts and reported in the basic financial statements. Basis of
accounting relates to the timing of the measurements made, regardless of the measurement focus.
Measurement focus is the determination of what is measured, i.e. expenditures or expenses.
1.Accrual Basis
The Government-wide financial statements are presented on an “economic resources”
measurement focus and the accrual basis of accounting.Accordingly, all of the Village’s
assets and liabilities, including capital assets, as well as infrastructure assets and long-term
liabilities, are included in the accompanying Statement of Net Assets. The Statement of
Activities presents changes in net assets. Under the accrual basis of accounting, revenues
are recognized when earned and expenses are recognized when incurred.
2.Modified Accrual Basis
The Governmental Fund financial statements are prepared using the modified accrual
basis of accounting. Under this basis of accounting, revenues are recorded when
measurable and available. Available means collectible within the current period or soon
enough thereafter to be used to pay liabilities of the current period. Material revenues that
are accrued include real property taxes, state and federal aid, sales tax, and certain user
charges. The Village considers property tax receivables collected within 60 days after year
end to be available and recognizes them as revenues of the current year. All other revenues
that are deemed collectible within one year after year end are recognized as revenues in the
current year. If expenditures are the prime factor for determining eligibility, revenues from
federal and state grants are accrued when the expenditure is made.
Expenditures are recorded when incurred. The cost of capital assets is recognized as an
expenditure when the asset is received. Exceptions to this general rule are 1) principal and
interest on indebtedness are not recognized as an expenditure until due, and 2) compensated
absences, such as vacation and sick leave, which vests or accumulates, are charged as an
expenditure when paid.
VILLAGE OF CAYUGA HEIGHTS
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-13 -
D.Property Taxes
Real property taxes are levied annually by the Village no later than June 1, and become a lien on
June 1. Taxes are collected during the period June 1 to November 1.
Uncollected real property taxes are subsequently enforced by the County of Tompkins in which
the Village is located. An amount representing uncollected real property taxes transmitted to the
County for enforcement is paid by the County to the Village no later than the forthcoming April 1.
E.Receivables
Receivables are recorded without allowances for uncollectible amounts, as all material
receivables are expected to be received. Amounts due from state and federal governments
represents amounts owed to the Village to reimburse it for expenditures incurred pursuant to state
and federally funded programs.
F.Capital Assets
All capital assets are valued at historical cost or estimated historical cost. The reported value of
the Village’s infrastructure as of May 31, 2004 has been estimated based on estimates of
acquisition dates and costs. Contributed assets are reported at fair market value as of the date
received. Additions, improvements, and other capital outlays that significantly extend the useful life
of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as
incurred. Depreciation on all assets is provided on the straight-line basis over the estimated useful
lives of the assets. Governmental capital assets purchased or acquired with an original cost of at
least $25,000 and having a useful life of greater than one year are capitalized. The estimated
useful lives for governmental capital assets are as follows:
Buildings 40-50 years
Machinery and equipment 5-50 years
Infrastructure 50-75 years
G.Insurance and Risk Management
The Village maintains insurance coverage for most risk including, but not limited to, property
damage and personal injury liability. Judgments and claims are recorded when it is probable that an
asset has been impaired or a liability has been incurred and the amount of loss can be reasonably
estimated. No settlements exceeded insurance coverage in any of the past three years.
H.Vacation, Sick Leave, and Compensated Absences
The Village employees are granted vacation and sick leave and earn compensatory absences
in varying amounts. In the event of termination or upon retirement, an employee is entitled to
payment for accumulated sick leave above a certain number of hours and unused compensated
absences; therefore, compensated absences recorded in the Statement of Net Assets include
sick leave and unused compensated absences.
Payment of sick leave recorded in the Statement of Net Assets is dependent upon many
factors, therefore, timing of future payments is not readily determinable. However, management
believes that sufficient resources will be made available for the payment of sick leave when such
payment becomes due.
VILLAGE OF CAYUGA HEIGHTS
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-14 -
The Village recognizes a liability for vacation leave and other compensated absences with
similar characteristics and additional salary-related payments as the benefits are earned by the
employees, based on the rendering of past service and the probability that the employees will be
compensated for the benefits through paid time off or some other means. This includes vacation
leave and other compensated absences with similar characteristics that were earned but not used
during the current or prior periods and for which employees can receive compensation in a future
period. Amounts do not include leave expected to lapse and includes leave that (new) employees
will (eventually) qualify for.
In addition,the Village recognizes a liability for vesting sick leave and other compensated
absences with similar characteristics and additional salary-related payments as employees earn
benefits. The Village will, to the extent probable,compensate 20 employees for the benefits
through cash payments (which may be conditioned on the employees’ termination or retirement),
rather than absences due to illness or other contingencies.
The liability for compensated absences is calculated at rates in effect as of the balance sheet
date and is recorded in the Governmental Funds inasmuch as it will be funded from current
financial resources, and in the Statement of Net Assets for amounts to be paid from future
financial resources.
I.Other Postemployment Benefits
In addition to providing pension benefits, the Village provides partial health insurance
coverage and survivor benefits for eligible retired employees and their survivors. Substantially all
of the Village’s employees may become eligible for these benefits if they reach normal retirement
age while working for the Village. Health care and survivors benefits are provided through an
insurance company whose premiums are based on the benefits paid during the year. The Village
pays 75% of the cost of an individual’s health insurance, and 75% of the additional cost for a
family plan. In 2010, the Village adopted new GASB standards to account for these benefits; see
Note 7.H for detailed information.
J.Equity Classifications
1.Government-wide Financial Statements
Equity is classified as net assets and displayed in three components:
Invested in Capital Assets, Net of Related Debt -Consists of capital assets including
restricted capital assets, net of accumulated depreciation and reduced by the
outstanding balances of any bonds, mortgages, notes or other borrowings that are
attributable to the acquisition, construction, or improvement of those assets.
Restricted Net Assets -Consists of net assets with constraints placed on their use
either by 1)external groups such as creditors, grantors, contributors, or laws or
regulations of other governments; or 2) law through constitutional provisions or
enabling legislation.
Unrestricted Net Assets -Consists of all other net assets that do not meet the
definition of “restricted”or “invested in capital assets, net of related debt.”
VILLAGE OF CAYUGA HEIGHTS
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-15 -
2.Governmental Fund Financial Statements
Governmental Fund equity is classified as fund balance. Fund balance is further
classified as reserved and unreserved, with unreserved further split between designated and
undesignated.
K.Interfund Activity
Interfund activity is reported as loans, services provided,reimbursements or transfers. Loans
are reported as interfund receivables and payables as appropriate and are subject to elimination
upon consolidation. Services provided, deemed to be at market or near market rates, are treated
as revenues and expenditures/expenses. Reimbursements occur when one fund incurs a cost,
charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All
other interfund transactions are treated as transfers.
L.Restricted Resources
When an expense is incurred for purposes for which both restricted and unrestricted net
assets are available, it is the Village’s policy to apply restricted funds before unrestricted funds,
unless otherwise prohibited by legal requirements.
Note 2 -Cash and Investments
A.Cash
The Village’s investment policies are governed by State statutes. The Village’s monies must be
deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks or trust
companies located within the State. The Village Treasurer is authorized to use demand accounts and
certificates of deposit. 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 (security) is required for demand and time deposits and certificates of deposit 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 and its
municipalities and school districts.
Custodial credit risk is the risk that in the event of a bank failure, the Village’s deposits may
not be returned to it. While the Village does not have a specific policy for custodial credit risk,
New York State statutes govern the Village’s investment policies, as discussed previously in
these notes. GASB Statement Number 40 directs that deposits be disclosed as exposed to
custodial credit risk if they are not covered by depository insurance, and the deposits are either
uncollateralized or collateralized with securities held by the pledging financial institution’s trust
department or agent, but not in the Village’s name.
The Village’s aggregate bank balances of $2,747,259 are either insured or collateralized with
securities held by the pledging financial institution in the Village’s name.
VILLAGE OF CAYUGA HEIGHTS
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-16 -
Note 3 -Interfund Balances and Activity
Interfund balances at May 31,2011, are as follows:
Interfund Interfund Interfund Interfund
Assets Liabilities Revenues Expenditures
General Fund $53,913 $5,043 $94,900 $153,500
Water Fund 14,123 24,900
Sewer Fund 34,821 105,068
Capital Projects Fund 74 188,568
Total Governmental Funds $53,987 $53,987 $283,468 $283,468
Interfund receivables,payables and transfers are eliminated on the Statement of Net Assets.
The Village typically loans resources between funds for the purpose of mitigating the effects of
transient cash flow issues. All interfund payables are expected to be repaid within one year.
Note 4 -Capital Assets
A summary of changes in capital assets at May 31, 2011 follows:
Balance
at
5/31/10 Additions
Deletions/
Adjustments
Balance
at
5/31/11
Governmental Activities:
Non-depreciable Capital Assets:
Land $102,401 $$$102,401
Total Non-depreciable Capital Assets 102,401 -0- -0-102,401
Depreciable Capital Assets:
Buildings 6,740,304 6,740,304
Machinery and equipment 2,866,188 540,107 (344,795)3,061,500
Infrastructure 40,113,742 258,768 40,372,510
Total Depreciable Capital Assets 49,720,234 798,875 (344,795)50,174,314
Total Historical Cost 49,822,635 798,875 (344,795)50,276,715
Less Accumulated Depreciation:
Buildings 1,476,839 131,742 1,608,581
Machinery and equipment 1,672,221 197,707 (332,311)1,537,617
Infrastructure 22,114,621 700,685 22,815,306
Total Accumulated Depreciation 25,263,681 1,030,134 (332,311)25,961,504
Governmental Activities Capital
Assets,Net $24,558,954 $(231,259)$ (12,484)$24,315,211
VILLAGE OF CAYUGA HEIGHTS
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-17 -
Depreciation expense was charged to functions as follows:
Governmental Activities:
General governmental support $820
Public safety 112,655
Transportation 816,543
Home and community services 100,116
Total Governmental Activities Depreciation Expense $1,030,134
Note 5 -Liabilities
A.Pension Plans
1.Plan Description
The Village participates in the New York State and Local Employees’Retirement System
(ERS), the New York State and Local Police and Fire Retirement System (PFRS), and the Public
Employees’Group Life Insurance Plan (Systems). These are cost-sharing multiple-employer
defined benefit retirement systems. The Systems provide 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 Systems.
The Comptroller shall adopt and may amend rules and regulations for the administration and
transaction of the business of the Systems and for the custody and control of their funds. The
Systems issue a publicly available financial report that includes financial statements and required
supplementary information. That report may be obtained by writing to the New York State and
Local Retirement Systems, 110 State Street, Albany, NY 12244.
2.Funding Policy
The Systems are noncontributory except for employees who joined the New York State and
Local Employees’Retirement System after July 27, 1976 who contribute 3% of their salary.
Employees in the System more than ten years are no longer required to contribute. Under the
authority of the NYSRSSL, the Comptroller shall certify annually the rates expressed as
proportions of payroll of members, which shall be used in computing the contributions required to
be made by employers to the pension accumulation fund.
The Village is required to contribute at an actuarially determined rate. The required
contributions for the current year and two preceding years were:
Year ERS PFRS
2011 $100,078 $122,153
2010 54,153 97,354
2009 57,195 68,294
The Village’s contributions made to the Systems were equal to 100% of the contributions
required for each year.
VILLAGE OF CAYUGA HEIGHTS
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-18 -
Note 6 -Short-term Debt
A.Bond Anticipation Notes
Liabilities for Bond Anticipation Notes (BANs) are generally accounted for in the Capital
Projects Fund. Principal payments on BANs must be made annually.
State law requires that BANs issued for capital purposes be converted to long-term
obligations within five years after the original issue date. However, BANs issued for assessable
improvement projects may be renewed for period’s equivalent to the maximum life of the
permanent financing, provided that stipulated annual reductions of principal are made.
During the year ended May 31, 2011, a $230,000 BAN was issued to pay a portion of the
purchase cost of a fire engine at an interest rate of 1.60%.This BAN matures on May 31, 2012.
Also, a $925,000 BAN was issued to pay for construction of im provements to the water
distribution system at an interest rate of 2.00%. This BAN matures on May 25, 2012
Note 7 -Long-term Debt
A.Constitutional Debt Limit
At May 31, 2011, the total outstanding indebtedness of the Village aggregated $3,264,221.
Of this amount, $2,109,221 was subject to the constitutional debt limit and represented
approximately 7.9% of its debt limit.
B.Serial Bonds
The Village borrows money in order to acquire land or equipment or construct buildings and
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, which are
full faith and credit debt of the local government, are recorded in the Statement of Net Assets.
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 long-term liabilities.
C.Other Long-term Debt
In addition to the above long-term debt, the Village had the following noncurrent liabilities:
Compensated Absences -Represents the unfunded value of the liability for compensated
absences. These liabilities are generally liquidated in the same fund as the payroll of the
applicable employees.
Other Postemployment Benefits -Represents an actuarially determined value of the
Village's obligation to provide health insurance for retired employees.
VILLAGE OF CAYUGA HEIGHTS
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-19 -
D.Summary of Long-term Debt
The following is a summary of long-term liabilities outstanding at May 31, 2011:
Original Final
Payable from/Date Original Interest Maturity Outstanding
Description Issued Amount Rate Date Balance
General Fund:
Fire Projects 06/00 $1,000,000 6.0%12/19 $605,000
Fire Project 05/00 1,000,000 6.0%05/19 605,000
Subtotal General Fund 1,210,000
Water Fund:
Phosphorous Treatment 06/10 734,221 2.13%10/30 704,221
Sewer Fund:
Trickling Filters 07/05 257,600 2.77%07/25 195,000
Total $2,109,221
E.Changes in Debt
Debt activity for the year ended May 31, 2011 is as follows:
Balance at
5/31/10 Issued Paid
Balance at
5/31/11
Due W ithin
One Year
Serial bonds $1,515,000 $734,221 $140,000 $2,109,221 $149,221
BAN 1,000,351 1,155,000 1,000,351 1,155,000 1,155,000
Compensated absences 126,980 16,678 143,658
Other postemployment benefits 311,656 225,125 536,781
Totals $2,953,987 $2,131,024 $1,140,351 $3,944,660 $1,304,221
Additions and deletions to compensated absences are shown net, as it is impractical to determine
the amounts separately.
F.Interest Expenditure/Expense
Interest expenditure for 2011 was $124,433. Interest expense, as reported in the Statement of
Activities,totaled $132,916 after adjustments to accrued interest.
G.Summary of Debt Maturity
The following is a summary of maturity of indebtedness:
Fiscal Serial Bonds
Year Principal Interest
2012 $149,221 $98,992
2013 160,000 91,767
2014 160,000 83,970
2015 175,000 75,824
2016 175,000 67,026
2017-2021 830,000 189,989
2022-2026 245,000 66,755
2027-2031 215,000 23,178
Total $2,109,221 $697,501
VILLAGE OF CAYUGA HEIGHTS
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
-20 -
H.Other Postemployment Benefits Liability
In 2010, the Village adopted GASB Statement Number 45, “Accounting and Financial
Reporting by Employers for Postemployment Benefits Other than Pensions.” In the past, the
Village reported the cost of retiree health care on a “pay-as-you-go” basis.
The Village administers a single-employer defined benefit healthcare plan. The Plan provides
lifetime healthcare insurance for eligible retirees through the Village’s group health insurance
plan, which covers both active and retired members. Benefit provisions are established through
negotiations between the Village and its employees. The Plan does not issue a publicly available
financial report.
Contribution requirements also are negotiated between the Village and its employees. The
Village contributes a percentage of the cost of current-year premiums for eligible retired plan
members. For fiscal year 2011, the Village contributed $105,196 to the plan. Plan members
receiving benefits contribute a portion of their premium costs, depending on their agreement with
the Village.
The Village’s annual other postemployment benefit (OPEB) cost (expense) is calculated
based on the annual required contribution of the employer (ARC). The Village has elected to
calculate the ARC and related information using the alternative measurement method permitted
by GASB Statement Number 45 for employers with plans covering fewer than one hundred total
plan members. The ARC represents a level of funding that is paid on an ongoing basis, is
projected to cover normal cost each year and to amortize any unfunded actuarial liabilities (or
funding excess) over a period not to exceed thirty years.
The following table shows the components of the Village’s annual OPEB cost for the year, the
amount actually contributed to the plan, and changes in the Village’s net OPEB obligation to the
Retiree Health Plan:
The Village’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan,
and the net OPEB obligation for 2010 were as follows:
Fiscal
Year End
Annual
OPEB Cost
Percentage of
Annual OPEB Cost
Contributed
Net OPEB
Obligation
2011 $330,321 31.8%536,781
2010 $311,656 33.4%$311,656
As of May 31, 2011, the actuarial accrued liability for benefits was $2,356,414, all of which
was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was
$1,446,122, and the ratio of the unfunded actuarial accrued liability to the covered payroll was
162.2%.
Annual required contribution $ 311,624
Interest on net OPEB obligation 18,697
Adjustment to annual required contribution -0-
Annual OPEB cost 330,321
Contributions made (105,196)
Increase in net OPEB obligation 225,125
Net OPEB obligation-beginning of year 311,656
Net OPEB obligation-end of year $ 536,781
VILLAGE OF CAYUGA HEIGHTS
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
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The projection of future benefit payments for an ongoing plan involves estimates of the value
of reported amounts and assumptions about the probability of occurrence of events far into the
future.The Schedule of Funding Progress, presented as required supplementary information
following the notes to the financial statements, presents multi-year trend information about
whether the actuarial value of plan assets is increasing or decreasing over time relative to the
actuarial liabilities for benefits.
Projections of benefits for financial reporting purposes are based on the substantive plan (the
plan as understood by the employer and plan members) and include the types of benefits
provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The methods and assumptions used
include techniques that are designed to reduce the effects of short-term volatility in actuarial
accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of
the calculations.
The following simplifying assumptions were made:
Retirement age for active employees -Based on the historical average retirement age for
the covered group, active plan members were assumed to retire at age 62, or at the first
subsequent year in which the member would qualify for benefits.
Mortality -Life expectancies were based on mortality tables from the National Center for
Health Statistics. The 2006 United States Life Tables for Males and for Females were
used.
Turnover -Non-group-specific age-based turnover data from GASB Statement No.45
were used as the basis for assigning active members a probability of remaining employed
until the assumed retirement age and for developing an expected future working lifetime
assumption for purposes of allocation to periods of present value of total benefits to be
paid.
Healthcare cost trend rate -The expected rate of increase in healthcare insurance
premiums as bases on projections of the Office of the Actuary at the Centers for Medicare
& Medicaid Services. For most employees, a set dollar amount was used, since most
employees do not receive increased benefits over time. Otherwise, a varying range
between 5 and 7.5% increase was used.
Health insurance premiums -2011 health insurance premiums for retirees were used as
the basis for calculation of the present value of total benefits to be paid.
Based on the historical and expected returns of the Village’s short-term investment portfolio, a
discount rate of 6.0% was used. In addition, a simplified version of the unit credit cost method
was used with the Unfunded Actuarial Accrued Liability (UAAL)amortized as a level dollar
amount. The remaining amortization period at May 31, 2011 was thirty years.
Note 8 -Commitments and Contingencies
A.Risk Financing and Related Insurance
1.General Information
The Village is exposed to various risks of loss related to, but not limited to, torts; theft of,
damage to, and destruction of assets; injuries to employees; errors and omissions; 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.
VILLAGE OF CAYUGA HEIGHTS
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
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Note 9 -Joint Venture
The following is an activity undertaken jointly with other municipalities. Only the Village’s equity in
the joint venture, and the changes therein, are reported in the Village’s financial statements.
Separate financial statements are issued for the joint venture.
The Villages of Lansing and Cayuga Heights, along with the Towns of Ithaca, Dryden, and
Lansing,jointly own the Southern Cayuga Lake Intermunicipal Water Commission. The venture
operates under the terms of an agreement originally dated March 1, 1977 with several amendments,
the most recent am endment dated October 20, 2003. The agreement is to remain in force until such
time as the bonds issued by the member municipalities for the construction of Project I and II have
been fully paid, satisfied, and discharged, and shall continue thereafter until further agreement of all
of the members.
Significant provisions of the agreement are as follows:
The executive body of the Southern Cayuga Lake Intermunicipal Water Commission consists
of ten members. Each member municipality appoints two members. Of the members so
appointed, at least one member from each municipality shall be an elected official from the
governing body.
Maintenance, operating, and debt retirement costs are funded primarily through water rent
revenues collected by the member municipalities and paid over to the Commission quarterly.
A separate assessment is made annually to provide for the balance of the revenue needed to
operate the joint activity. The assessment is determined one year in advance and is based
on the water consumption of each municipality during the previous twelve-month period.
The following is an audited summary of financial information included in financial statements
issued for the joint venture:
Balance
Sheet Date:
December 31,
2010
Total Assets $6,634,604
Total Liabilities 3,996,000
Joint Venture Equity 2,638,604
Total Revenues 2,786,234
Total Expenses 3,077,873
Note 10 -Stewardship, Compliance and Accountability
A.Deficit Fund Balance
The Capital Projects Fund reported a deficit fund balance of $(1,052,313)as of May 31, 2011.
This deficit will be eliminated as short-term borrowings are converted to long-term debt.
Original Final
Budget Budget Actual Variance
REVENUES
Real property taxes $2,125,300 $2,125,292 $2,125,292 $-0-
Real property tax items 6,000 5,158 5,158 -0-
Nonproperty tax items 660,000 770,046 770,046 -0-
Departmental income 36,250 38,737 38,737 -0-
Intergovernmental charges 189,000 177,442 177,442 -0-
Use of money and property 27,800 14,773 14,773 -0-
Licenses and permits 12,500 10,765 10,765 -0-
Fines and forfeitures 25,000 17,880 17,880 -0-
Sale of property and compensation for loss 32,000 22,597 22,597 -0-
Miscellaneous local sources 640 24,640 24,640 -0-
State sources 241,610 264,091 177,661 (86,430)
Total Revenues 3,356,100 3,471,421 3,384,991 (86,430)
EXPENDITURES
Current:
General governmental support 737,800 676,654 662,827 13,827
Public safety 1,036,450 989,091 989,091 -0-
Transportation 670,620 791,490 791,490 -0-
Home and community services 218,740 209,174 209,174 -0-
Employee benefits 762,690 778,453 778,453 -0-
Debt service (principal and interest)177,200 177,102 177,102 -0-
Total Expenditures 3,603,500 3,621,964 3,608,137 13,827
Excess of (Expenditures) (247,400) (150,543) (223,146) (72,603)
OTHER FINANCING SOURCES (USES)
Interfund transfers in 94,900 94,900 94,900 -0-
Interfund transfers (out)(77,500)(153,500)(153,500)-0-
Total Other Financing Sources (Uses) 17,400 (58,600) (58,600) -0-
Excess of (Expenditures) and Other (Uses)
Over Revenues and Other Financing Sources (230,000) (209,143) (281,746) $(72,603)
Appropriated Fund Balance 230,000 209,143
Net (Decrease) $-0-$-0-(281,746)
Fund Balance, Beginning of Year 1,790,019
Fund Balance, End of Year $1,508,273
See Independent Auditor's Report and Notes to Required Supplementary Information
VILLAGE OF CAYUGA HEIGHTS
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND - NON-GAAP BUDGET BASIS
FOR THE YEAR ENDED MAY 31, 2011
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Original Final
Budget Budget Actual Variance
REVENUES
Departmental income $233,730 $235,494 $235,494 $-0-
Intergovernmental charges 683,424 685,629 685,629 -0-
Use of money and property 2,000 4,426 4,426 -0-
Licenses and permits 1,000 -0-
Sale of property and compensation for loss 846 11,292 11,292 -0-
State sources 4,000 12,340 12,340 -0-
Total Revenues 925,000 949,181 949,181 -0-
EXPENDITURES
Current:
General governmental support 53,500 14,326 14,326 -0-
Home and community services 725,700 607,110 607,110 -0-
Employee benefits 27,950 21,127 21,127 -0-
Debt service (principal and interest)58,130 64,893 64,893 -0-
Total Expenditures 865,280 707,456 707,456 -0-
Excess of Revenues 59,720 241,725 241,725 -0-
OTHER FINANCING SOURCES (USES)
Interfund transfers in -0-
Interfund transfers (out)(68,000) (105,068) (105,068) -0-
Total Other Financing (Uses)(68,000) (105,068) (105,068) -0-
Excess of (Expenditures) and Other (Uses) over
Revuenues and Other Financing Sources (8,280) 136,657 136,657 $-0-
Net Increase $-0-$-0-136,657
Fund Balance, Beginning of Year 862,409
Fund Balance, End of Year $999,066
See Independent Auditor's Report and Notes to Required Supplementary Information
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Sewer Fund
VILLAGE OF CAYUGA HEIGHTS
BUDGETARY COMPARISON SCHEDULE
SPECIAL REVENUE FUNDS - NON-GAAP BUDGET BASIS
FOR THE YEAR ENDED MAY 31, 2011
Original Final
Budget Budget Actual Variance
REVENUES
Departmental income $494,180 $514,208 $514,209 $1
Use of money and property 700 239 239 -0-
Sale of property and compensation for loss 1,120 163 163 -0-
Total Revenues 496,000 514,610 514,611 1
EXPENDITURES
Current:
General governmental support 1,330 1,330 -0-
Home and community services 376,850 311,506 311,506 -0-
Employee benefits 21,550 12,983 12,983 -0-
Debt service (principal and interest)73,600 137,438 97,438 40,000
Total Expenditures 472,000 463,257 423,257 40,000
Excess of Revenues 24,000 51,353 91,354 40,001
OTHER FINANCING SOURCES (USES)
Interfund transfers (out)(24,000) (24,900) (24,900) -0-
Total Other Financing (Uses) Sources (24,000) (24,900) (24,900) -0-
Excess of (Expenditures) and Other (Uses)
over Revenues and Other Financing Sources -0-26,453 66,454 $40,001
Net Increase $-0-$26,453 66,454
Fund Balance, Beginning of Year 1,438
Fund Balance, End of Year $67,892
(CONTINUED)
FOR THE YEAR ENDED MAY 31, 2011
Water Fund
SPECIAL REVENUE FUNDS - NON-GAAP BUDGET BASIS
- 25 -
See Independent Auditor's Report and Notes to Required Supplementary Information
VILLAGE OF CAYUGA HEIGHTS
BUDGETARY COMPARISON SCHEDULE
Actuarial
Actuarial Actuarial Liability (AAL) -Unfunded Percentage
Valuation Value of Simplified AAL Funded Covered of Covered
Date Assets Entry Age (UAAL)Ratio Payroll Payroll
5/31/2011 $-0-$2,356,414 $2,356,414 0%$1,446,122 162.2%
5/31/2010 $-0-$2,687,107 $2,687,107 0%$1,344,231 199.9%
MAY 31, 2011
SCHEDULE OF FUNDING PROGRESS
VILLAGE OF CAYUGA HEIGHTS
See Independent Auditor's Report and Notes to Required Supplementary Information
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VILLAGE OF CAYUGA HEIGHTS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED MAY 31, 2011
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Note 1 -Budget Basis of Accounting
Except as indicated below, budgets are adopted annually on a basis consistent with accounting
principles generally accepted in the United States of America. Appropriations authorized for the
current year are increased by the amount of encumbrances carried forward from the prior year.
Encumbrances are not considered a disbursement in the financial plan or an expenditure in GAAP
based financial statements. Encumbrances reserve a portion of the applicable appropriation for
purchase orders, contracts, and other commitments not expended at year end, thereby ensuing that
appropriations are not exceeded.
Note 2 -Budget Policies: Budgetary Procedures and Budgetary Accounting
The Chief Fiscal Officer submits a tentative budget to the Village Board of Trustees for approval. The
Village Board of Trustees reviews and approves a tentative budget no later than March 31. The tentative
budget includes proposed expenditures and the proposed means of financing for all funds. A public
hearing is held to receive comments from the residents. The final budget is adopted and the Village’s tax
rate is set no later than April 30. All modifications of the budget must be approved by the governing board;
however, the Treasurer is authorized to transfer certain budgeted amounts within departments. All
appropriations lapse at year end.
Budgets are adopted annually on a basis consistent with generally accepted accounting principles for
the General, Sewer and Water Funds. Appropriations authorized for the current year are increased by
the amount of encumbrances carried forward from the prior year. Encumbrances are not considered
a disbursement in the financial plan or expenditure in the GAAP based basic financial statements, but
reserve a portion of the applicable appropriation, thereby ensuring that the appropriations are not
exceeded.
Budgets are adopted annually on a basis consistent with GAAP.
Note 3 -Reconciliation of the Budget Basis to GAAP
No adjustment is necessary to convert the excess of revenues and other sources over
expenditures and other uses on the GAAP basis to the budget basis,as there were no encumbrances
recorded at May 31, 2011.
Note 4 -Schedule of Funding Progress
The Schedule of Funding Progress, presented as required supplementary information,presents
multi-year trend information about whether the actuarial value of Plan assets is increasing or
decreasing over time relative to the actuarial accrued liabilities for benefits. Because this is only the
second year of implementation, only two years of information are presented for the year ending May
31, 2011.
CORTLAND ITHACA WATKINS GLEN
John H. Dietershagen, C.P.A.
Jerry E. Mickelson, C.P.A.
Thomas K. Van Derzee, C.P.A.
Debbie Conley Jordan, C.P.A.
Patrick S. Jordan, C.P.A.
Duane R. Shoen, C.P.A.
Lesley L. Horner, C.P.A.
D. Leslie Spurgin, C.P.A.
Frederick J. Ciaschi, C.P.A.
Certified Public Accountants and Consultants
Ciaschi Dietershagen Little Mickelson
& Company, LLP
39 Church Street
Cortland, New York 13045
607-753-7439
fax 607-753-7874
108 West Fourth Street
Watkins Glen, New York 14891
607-535-4443
fax 607-535-6220
401 East State Street ~ Suite 500
Ithaca, New York 14850
607-272-4444
fax 607-273-8372
www.cdlm.com
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHERS MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE W ITH GOVERNMENT AUDITING STANDARDS
Mayor and Village Trustees
Village of Cayuga Heights
Ithaca, New York
We have audited the financial statements of the governmental activities,each major fund and the aggregate
remaining fund information of the Village of Cayuga Heights (the Village) as of and for the year ended May 31,
2011, which collectively comprise the Village of Cayuga Heights’basic financial statements and have issued our
report thereon dated March 6, 2012. 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Village of Cayuga Heights’internal control over
financial reporting as a basis for designing our auditing procedures 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 Village’s
internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the
Village’s internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial
statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over
financial reporting that we consider to be material weaknesses, as defined above.
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Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Village’s financial statements are free of
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.
This report is intended solely for the information and use of management, the Board of Trustees, and others
within the Village of Cayuga Heights, and is not intended to be and should not be used by anyone other than
these specified parties.
March 6, 2012
Ithaca, New York