HomeMy WebLinkAbout2017 Town AuditTOWN OF CORTLANDVILLE
Cortland, New York
FINANCIAL REPORT
December 31, 2017
TOWN OF CORTLANDVILLE
TABLE OF CONTENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
Independent Auditor’s Report ............................................................................................................. 1-2
Required Supplementary Information:
Management’s Discussion and Analysis ......................................................................................... 3-3i
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position ............................................................................................................. 4
Statement of Activities .................................................................................................................. 5
Fund Financial Statements:
Balance Sheet - Governmental Funds ........................................................................................... 6-6a
Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position ........... 7
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds ................................................................................................................... 8-8a
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Statement of Activities ......................................................................... 9
Statement of Fiduciary Net Position - Fiduciary Funds ............................................................... 10
Notes to Financial Statements .................................................................................................. 11-35
Required Supplementary Information:
Budgetary Comparison Schedule - General Townwide Fund - Non-GAAP Budget Basis ........... 36
Budgetary Comparison Schedule - General Parttown Fund - Non-GAAP Budget Basis .............. 37
Budgetary Comparison Schedule - Highway Parttown - Non-GAAP Budget Basis ...................... 38
Budgetary Comparison Schedule - Water Fund - Non-GAAP Budget Basis ................................. 39
Budgetary Comparison Schedule - Sewer Fund - Non-GAAP Budget Basis ................................. 40
Schedule of Funding Progress .......................................................................................................... 41
Schedule of the Town’s Contributions - NYSLRS Pension Plans ................................................... 42-42a
Schedule of the Town’s Proportionate Share of the Net Pension Liability .................................... 43
Notes to Required Supplementary Information ............................................................................... 44-45
Report Required Under Government Auditing Standards:
Independent Auditor's 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 ..................................................................................................... 46-47
INDEPENDENT AUDITOR’S REPORT
Town Board
Town of Cortlandville
Cortland, New York
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund
and the aggregate remaining fund information of the Town of Cortlandville, (the Town), as of and for the
year ended December 31, 2017, and the related notes to the financial statements, which collectively
comprise the Town’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 and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the 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 Town’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 Town’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.
Insero & Co. CPA s, LLP
Rochester | Ithaca | Corning | Cortland | Watkins Glen | (800) 232-9547 | www.inserocpa.com
2
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, each major fund and the aggregate remaining
fund information of the Town of Cortlandville, as of December 31, 2017, and the respective changes in
financial position for the year then ended in accordance 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 the Management’s
Discussion and Analysis, Budgetary Comparison Schedules, Schedule of Funding Progress, Schedules of
the Town’s Contributions - NYSLRS Pension Plans, the Schedule of the Town’s Proportionate Share of
Net Pension Liability, and the related notes to required supplementary information on pages 3-3i and 36-
45, 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.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated July 2 , 2018 on
our consideration of the Town of Cortlandville’s internal control over financial reporting and on our tests
of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the Town’s internal control over financial
reporting and compliance.
Respectfully Submitted,
Insero & Co. CPAs, LLP
Certified Public Accountants
Ithaca, New York
July 2 , 2018
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2017
3
Our discussion and analysis of the Town of Cortlandville’s (the Town) financial performance provides
an overview of the Town’s financial activities for the fiscal year ended December 31, 2017. This section
is a summary of the Town’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 in the current year.
Please read it in conjunction with the Town’s financial statements, which begin on page 4.
FINANCIAL HIGHLIGHTS
The assets of the Town exceeded its liabilities at the close of the most recent fiscal year by
$13,639,459 (net position) compared to $13,143,384 in 2016.
The Town follows Governmental Accounting Standards Board (GASB) Statement No. 45,
“Accounting and Financial Reporting by Employers for Postemployment Benefits Other than
Pensions.” This statement requires the Town to record a liability and expense for a portion of the
Actuarial Accrued Liability. This liability amounted to $2,907,080 at December 31, 2017 and the
expense recognized amounted to $601,111.
During the year ended December 31, 2017, the Town recorded its proportionate share of the net
pension liability along with deferred inflows and outflows of resources related to pensions in
accordance with the parameters of GASB Statement No. 68. “Accounting and Financial Reporting
for Pensions.” Current year recognition resulted in an increase of Government-wide expenses of
$87,777.
During the year, the Town had expenses that were $(496,075) less than the $7,402,145 generated in
tax and other revenues for governmental programs. Comparatively, in the prior year expenses were
$(559,453) less than the $7,192,035 generated in tax and other revenues for government programs.
The General Funds recorded an increase in fund balances of $419,956 in 2017. General Funds
combined fund balances at year end were $2,245,045.
The Town’s debt decreased $(730,900) during the current fiscal year, to a total of $7,667,100, as a
result of the maturity of bond anticipation notes exceeding the amount of serial bonds issued during
the year, in combination with debt payments of $339,900.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2017
3a
USING THIS ANNUAL REPORT
This annual report consists of a series of basic financial statements. The Statement of Net Position and
the Statement of Activities (on pages 4-5) provide information about the Town as a whole and present a
longer-term view of the Town’s finances. Governmental Fund financial statements start on page 6. For
Governmental Activities, these statements tell how these services were financed in the short term, as
well as what remains for future spending. The Governmental Fund financial statements also report the
Town’s operations in greater detail than the Government-wide financial statements by providing
information about the Town’s most significant funds. The remaining statements provide financial
information about activities for which the Town acts solely as a trustee or agent for the benefit of those
outside the government. Following these statements are notes that provide additional information that is
essential to a full understanding of the data provided in the financial statements.
In addition to the basic financial statements, the annual report contains other information in the form of
combining statements for those funds that are not considered major funds and, therefore, are not
presented individually in the basic financial statements. The report also includes schedules comparing
the Town’s final budgets to actual revenues and expenditures for the General Funds and Major Special
Revenue Funds.
Reporting the Town as a Whole
Our analysis of the Town as a whole begins on page 4, with the Government-wide financial statements.
The Statement of Net Position and the Statement of Activities report information about the Town as a
whole and about its activities in a way that helps answer the question of whether the Town, as a whole,
is better off or worse off, as a result of the year’s activities. These statements include all assets and
liabilities using the accrual basis of accounting, which is similar to the accounting used by most
private-sector companies. All of the current year’s revenues and expenses are taken into account,
regardless of when the cash is received or paid.
These two statements report the Town’s net position and changes in it. One can think of the Town’s net
position, the difference between assets, deferred outflows, and liabilities, as one way to measure the
Town’s financial health, or financial position. Over time, increases or decreases in the Town’s net
position are one indicator of whether its financial health is improving or deteriorating. One will need to
consider other nonfinancial factors, however, such as changes in the Town’s property tax base and the
condition of the Town’s infrastructure, to assess the overall health of the Town.
In the Statement of Net Position and the Statement of Activities, all of the Town’s activities, which are
governmental in nature, are reported in one column, including public safety, public health,
transportation, economic assistance, culture and recreation, home and community services, and general
administration. Property and sales taxes, and state and federal grants finance most of these activities.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2017
3b
Reporting the Town’s Most Significant Funds
Governmental Fund Financial Statements
Analysis of the Town’s Major Funds begins on page 6. The Governmental Fund financial statements
provide detailed information about the most significant funds - not the Town as a whole. Some funds
are required to be established by state law. However, management establishes many other funds to help
it control and manage money for particular purposes or to show it is meeting legal responsibilities for
using certain taxes and grants.
Governmental Funds: All of the Town’s services are reported in the Governmental Funds, which
focus on how money flows into and out of those funds, and the balances left at year end that are
available for spending. These funds are reported using modified accrual accounting, which measures
cash and all other financial assets that can be readily converted to cash. The Governmental Fund
statements provide a detailed short-term view of the Town’s general governmental operations and
the basic services it provides. Governmental Fund information helps determine whether there are
more or fewer financial resources that can be spent in the near future to finance the Town’s
programs. The relationship (or differences) between Governmental Activities (reported in the
Government-wide financial statements) and Governmental Funds is explained in a reconciliation
following the Governmental Fund financial statements.
The Town as Trustee: The Town is the trustee, or fiduciary, for other assets that are held on behalf
of others. All of the Town’s Fiduciary Activities are reported in a separate Statement of Fiduciary
Net Position on page 10. We exclude these activities from the Town’s other financial statements
because the Town cannot use these resources to finance its operations. The Town is responsible for
ensuring the resources reported in this fund are used for their intended purposes.
THE TOWN AS A WHOLE
The Town’s combined net position for fiscal year ended December 31, 2017 increased from $13,143,384
to $13,639,459. A portion of the Town’s net position reflects its investment in capital assets (e.g. land,
buildings, machinery, equipment and infrastructure) less any related debt used to acquire those assets
that is still outstanding. The Town has chosen not to report infrastructure assets acquired prior to
January 1, 2003, in accordance with the transition provisions of GASB Statement No. 34. An additional
portion of the Town’s net position represents resources subject to external restrictions on how they may
be used and are reported as restricted. The remaining category of total net position is unrestricted and
may be used to meet the government’s ongoing obligations and services to creditors and citizens.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2017
3c
Our analysis below focuses on the net position (Figure 1), and changes in net position (Figure 2), of
the Town’s Governmental Activities.
Figure 1 - Net Position
Current assets $5,882,759 $6,082,508 $199,749 3.4%
Noncurrent assets 2,020,538 1,991,680 (28,858) (1.4%)
Capital assets, net 16,047,137 16,312,983 265,846 1.7%
Total Assets 23,950,434 24,387,171 436,737 1.8%
Pensions 1,248,863 623,208 (625,655) (50.1%)
Total Deferred Outflows
of Resources 1,248,863
Current liabilities 2,502,736 500,810 (2,001,926) (80.0%)
Noncurrent liabilities 9,420,171 10,760,826 1,340,655 14.2%
Total Liabilities 11,922,907 11,261,636 (661,271) (5.5%)
Pensions 133,006 109,284 (23,722) (17.8%)
Total Deferred Inflows
of Resources 133,006 109,284
Net investment in capital assets 8,107,359 8,645,883 538,524 6.6%
Restricted 2,081,137 2,057,530 (23,607) (1.1%)
Unrestricted 2,954,888 2,936,046 (18,842) (0.6%)
Total Net Position $13,143,384 $13,639,459 $496,075 3.8%
Governmental Activities Dollar Change Percent Change
2016 - 2017 2016 - 201720162017
(50.1%)623,208 (625,655)
(23,722) (17.8%)
The increase in current assets is primarily due to an increase in cash on hand which increased as a result
of revenues exceeding expenditures for the year. Capital assets increased mainly due to capital outlay
exceeding depreciation expense. Current liabilities decreased due to a significant decrease in BANs
payable. Noncurrent liabilities increased due to increases in bonds payable and other postemployment
benefits liability, offset by a decrease in net pension liability-proportionate share.
Deferred outflows of resources and deferred inflows of resources decreased based on actuarially
determined amounts provided the NYSLRS.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2017
3d
Figure 2 demonstrates the operations of the Town’s Governmental Activities.
Figure 2 - Changes in Net Position
REVENUES
Program Revenues :
Charges for services $2,556,511 $2,410,132 $(146,379) (5.7%)
Operating grants 211,095 363,577 152,482 72.2%
Capital grants 189,781 219,285 29,504 15.5%
General Revenues :
Property taxes and tax items 1,761,286 1,791,899 30,613 1.7%
Nonproperty taxes 2,362,936 2,454,641 91,705 3.9%
Use of money and property 8,428 14,048 5,620 66.7%
Other general revenues 101,998 148,563 46,565 45.7%
Total Revenues $7,192,035 $7,402,145 $210,110 2.9%
PROGRAM EXPENSES
General government 1,717,294 1,210,374 (506,920) (29.5%)
Public safety 82,139 84,147 2,008 2.4%
Public health 5,437 3,798 (1,639) (30.1%)
Transportation 3,181,310 3,330,852 149,542 4.7%
Economic assistance 18,000 18,000 - 0.0%
Culture and recreation 401,361 93,743 (307,618) (76.6%)
Home and community services 1,097,019 1,999,235 902,216 82.2%
Interest on long-term debt 130,022 165,921 35,899 27.6%
Total Expenses 6,632,582 6,906,070 273,488 4.1%
INCREASE IN NET POSITION $559,453 $496,075 $(63,378) (11.3%)
Governmental Activities and Total
Government Dollar Change Percent
Change
2016 - 2017 2016 - 201720162017
Charges for services decreased primarily based on lower Water and Sewer Fund revenues. Operating
grants increased primarily due to an increase in mortgage tax aid and a new community development
grant received in 2017. Capital grants increased due to increased State aid. Use of money and property
increased as a result of new revenue from the Gutchess lease.
The increase in home and community services and culture and recreation expenses is mainly a result of
timing differences related to construction projects. General government expenditures decreased based on
the trade in of a land parcel that was not expensed from funds.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2017
3e
Figures 3 and 4 show the sources of revenue for 2017 and 2016.
Figure 3 - Revenue by Source
2017
Charges for
services
32.56%
Miscellaneous
2.01%
Operating grants
4.91%
Capital grants
2.96%
Use of money
and property
0.19%
Nonproperty
taxes
33.16%
Real property
taxes/items
24.21%
Figure 4 - Revenue by Source
2016
Charges for
services
35.55%
Miscellaneous
1.42%
Operating grants
2.94%
Capital grants
2.64%
Use of money
and property
0.11%
Nonproperty
taxes
32.85%
Real property
taxes/items
24.49%
The cost of all Governmental Activities this year was $6,906,070. However, as shown in the Statement
of Activities, the net expense of these activities was $3,913,076, because some of the cost was paid by
those who directly benefited from the programs or by other governments and organizations that
subsidized certain programs with grants and contributions. Overall, the Town’s governmental program
revenues, including fees for services and grants, were $2,992,994. The Town paid for the remaining
“public benefit” portion of Governmental Activities with $4,409,151 in taxes and other revenues, such
as interest and general entitlements.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2017
3f
The total cost and revenue comparison of the Governmental Activities for each of the Town’s largest
programs follows. Note that the Town’s home and community service activities, which provide water
and sewer services, include debt service costs in their fee structures. Because debt service costs are not
expenses of this function, the excess revenue generated by these activities is used to make principal and
interest payments. The difference between cost and revenue shows the financial burden placed on the
Town’s taxpayers by each of these functions.
Figure 5 - Program Cost and Revenue Comparison - Governmental Activities
2017
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
Cost
Revenue
Figure 6 - Program Cost and Revenue Comparison - Governmental Activities
2016
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000 Cost
Revenue
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2017
3g
THE TOWN’S FUNDS
As the Town completed the year, its Governmental Funds, as presented in the balance sheets on pages 6-
6a, reported an increase in combined fund balance. The increase was primarily due to the elimination of
the majority of the deficit fund balance in the Capital Projects Fund in the current year. Figure 7 shows
the changes in fund balances during the year for the Town’s funds.
Figure 7 - Governmental Funds - Fund Balances at Years Ending
General Fund - Townwide $1,072,417 $1,466,909 $394,492
General Fund - Parttown 752,672 778,136 25,464
Highway Fund - Parttown 1,831,222 2,009,576 178,354
Water Fund 1,813,161 2,019,632 206,471
Sewer Fund 799,762 867,548 67,786
Special Grant Fund 256,769 322,014 65,245
Capital Projects Fund (1,617,778) (166,573) 1,451,205
Non-Major Funds 275,086 275,140 54
Totals $5,183,311 $7,572,382 $2,389,071
Dollar Change
2016 2017 2016 - 2017
The increases in fund balance across all funds is a result of an excess of revenues over expenditures.
The increase in the Capital Projects Fund was due to proceeds of obligations for capital projects
exceeding capital outlay; the negative fund balance will be eliminated when short-term debt is converted
to long-term debt.
General Funds Budgetary Highlights
Over the course of the year, the Town Council and management of the Town revised the Town budgets
several times. These budget amendments consisted of transfers between functions.
Resources available for appropriation were $263,832 more than the final budget. Expenditures
and other financing uses were $473,107 favorable when compared to budget due to cost
containment measures.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2017
3h
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of December 31, 2017, the Town had $35,012,667, less accumulated depreciation of
$18,699,684, invested in a broad range of capital assets, including buildings, machinery and equipment,
roads and bridges.
Figure 8 - Capital Assets, Net of Depreciation
2016 2017 2016 - 2017
Land $457,912 $999,252 $541,340
Construction in progress 4,418,739 266,581 (4,152,158)
Improvements 1,045,967 5,337,170 4,291,203
Buildings 2,544,691 2,456,873 (87,818)
Equipment 1,516,586 1,433,674 (82,912)
Infrastructure 6,063,242 5,819,433 (243,809)
Totals $16,047,137 $16,312,983 $265,846
Governmental Activities and
Total Government Dollar Change
Depreciation expense during the year amounted to $847,864. The Town has not reported any
infrastructure assets prior to 2003, in accordance with the transition provisions of GASB Statement
No. 34.
Debt Administration
Debt (bonds and BANs), considered a liability of Governmental Activities, decreased, bringing total
debt to $7,667,100 as of December 31, 2017, as shown in Figure 9. Of the amount of bonds and notes
outstanding, $540,000 is subject to the constitutional debt limit and represented 0.83% of the Town’s
statutory debt limit. The Town’s bond rating is currently Aa3 from Moody’s.
Figure 9 - Major Outstanding Debt at Years Ending
Bond anticipation notes $2,076,000 $- $(2,076,000) (100.0%)
Serial bonds 6,322,000 7,667,100 1,345,100 21.3%
Totals $8,398,000 $7,667,100 $(730,900) (8.7%)
Dollar Change
Percent
Change
2016 - 2017201620172016 - 2017
Governmental Activities and Total
Government
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2017
3i
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
• Approved 2018 budget shows an increase in tax rate of $0.08 per $1,000 of assessed value.
• Water benefit tax increased $7.27 per unit as a result of new water line construction. Debt payment
led to a lower sewer benefit tax.
• The Town closed on 101 acres of land, which will eventually become Gutchess Lumber Sports
Complex. Phase 1 of construction will begin in 2018, including 2 ball fields, water and sewer, road
and parking. The estimated cost is $4,312,000. The Town of Cortlandville was awarded a Capital
Grant for the Sports Complex in the amount of $250,000 from the Dormitory Authority of the State of
New York and $862,000 from the Empire State Development.
• The Town signed a lease agreement with Gutchess Lumber regarding the Town’s Citizen Park. A
countdown of 24 months commenced with the purchase of the 101 acres and the lease agreement to
move Citizens Park.
• The Farmland Protection Plan should be completed in the summer of 2018.
CONTACTING THE TOWN’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors
with a general overview of the Town’s finances and to show the Town’s accountability for the money it
receives. If you have questions about the report or need any additional financial information contact
Richard Tupper, Supervisor, Town of Cortlandville, at 3577 Terrace Road, Cortlandville, New York
13045.
TOWN OF CORTLANDVILLE
4
Governmental
Activities
ASSETS
Current Assets
Cash and cash equivalents $5,281,908
Taxes receivable, net 28,335
Due from other governments 615,803
Other receivables, net 570
Prepaid expenses 90,042
Loans receivable, current portion 65,850
Total Current Assets 6,082,508
Noncurrent Assets
Restricted cash and cash equivalents 1,578,134
Loans receivable, long-term portion 413,546
Capital assets, non-depreciable 1,265,833
Other capital assets, net of accumulated depreciation 15,047,150
Total Noncurrent Assets 18,304,663
Total Assets 24,387,171
DEFERRED OUTFLOWS OF RESOURCES
Pensions 623,208
Total Deferred Outflows of Resources 623,208
LIABILITIES
Current Liabilities
Accounts payable 22,410
Interest payable 57,100
Current portion of noncurrent obligations:
Bonds payable 421,300
Total Current Liabilities 500,810
Noncurrent Liabilities and Obligations
Bonds payable 7,245,800
Other postemployment benefits liability 2,907,080
Net pension liability - Proportionate share 607,946
Total Noncurrent Liabilities 10,760,826
Total Liabilities 11,261,636
DEFERRED INFLOWS OF RESOURCES
Pensions 109,284
Total Deferred Inflows of Resources 109,284
NET POSITION
Net investment in capital assets 8,645,883
Restricted 2,057,530
Unrestricted 2,936,046
Total Net Position $13,639,459
See Independent Auditor's Report and Notes to Financial Statements
STATEMENT OF NET POSITION
DECEMBER 31, 2017
TOWN OF CORTLANDVILLE
5
Net (Expense)
Revenue and
Change in
Net Position
Operating Capital Total
Charges for Grants and Grants and Governmental
Expenses Services Contributions Contributions Activities
Governmental Activities
General governmental support $1,210,374 $189,577 $314,524 $$(706,273)
Public safety 84,147 282,080 197,933
Public health 3,798 (3,798)
Transportation 3,330,852 219,285 (3,111,567)
Economic assistance and opportunity 18,000 (18,000)
Culture and recreation 93,743 (93,743)
Home and community services 1,999,235 1,938,475 49,053 (11,707)
Interest on long-term debt 165,921 (165,921)
Total Governmental Activities $6,906,070 $2,410,132 $363,577 $219,285 (3,913,076)
Real property taxes 1,742,751
Real property tax items 49,148
Nonproperty tax items 2,454,641
Use of money and property 14,048
Sale of property and compensation for loss 32,144
Miscellaneous local sources 116,419
4,409,151
496,075
13,143,384
$13,639,459
See Independent Auditor's Report and Notes to Financial Statements
FUNCTIONS/PROGRAMS
Program Revenues
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2017
GENERAL REVENUES
Total General Revenues
Change in Net Position
Net Position - Beginning
Net Position - Ending
TOWN OF CORTLANDVILLE
6
General General
Townwide Parttown
Fund Fund
Cash and cash equivalents - Unrestricted $1,338,709 $250,011
Cash and cash equivalents - Restricted 113,698 20,655
Taxes receivable (net)28,335
Due from other funds 254,731
Due from other governments 250,000
Other receivables, net
Prepaid expenses 25,147 2,739
Loans receivable
Total Assets $1,505,889 $778,136
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities
Accounts payable $10,645 $
Due to other funds 28,335
Total Liabilities 38,980 -
Unavailable revenues
Total Deferred Inflows of Resources --
FUND BALANCES
Nonspendable 25,147 2,739
Restricted 113,698 20,655
Assigned 151,893 420,000
Unassigned 1,176,171 334,742
Total Fund Balances 1,466,909 778,136
Total Liabilities, Deferred Inflows of Resources, and Fund Balances $1,505,889 $778,136
See Independent Auditor's Report and Notes to Financial Statements
ASSETS
Deferred Inflows of Resources
Major Funds
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2017
6a
Non-Major
Governmental
Fund
Special
Revenue Fund
Highway Special Capital Highway Total
Parttown Water Sewer Grant Projects Townwide Governmental
Fund Fund Fund Fund Fund Fund Funds
$1,284,735 $1,602,964 $430,341 $$100,008 $275,140 $5,281,908
338,540 387,746 395,481 322,014 1,578,134
28,335
13,201 26,984 294,916
365,803 615,803
522 48 570
32,263 15,199 14,694 90,042
479,396 479,396
$2,021,341 $2,019,632 $867,548 $801,410 $100,008 $275,140 $8,369,104
$11,765 $$$$$$22,410
266,581 294,916
11,765 - - -266,581 -317,326
479,396 479,396
---479,396 --479,396
32,263 15,199 14,694 90,042
338,540 387,746 395,481 322,014 1,578,134
1,638,773 1,616,687 457,373 275,140 4,559,866
(166,573)1,344,340
2,009,576 2,019,632 867,548 322,014 (166,573) 275,140 7,572,382
$2,021,341 $2,019,632 $867,548 $801,410 $100,008 $275,140 $8,369,104
Special Revenue Funds
Major Funds
TOWN OF CORTLANDVILLE
7
Total Governmental Fund Balances $7,572,382
16,312,983
(607,946)
Deferred inflows of resources - Unavailable revenue $479,396
Deferred inflows of resources - Pension (109,284)
Deferred outflows of resources - Pension 623,208 993,320
Accrued interest payable (57,100)
Other postemployment benefits liability $(2,907,080)
Bonds payable (7,667,100) (10,574,180)
Net Position of Governmental Activities $13,639,459
See Independent Auditor's Report and Notes to Financial Statements
Capital assets of the governmental funds,net of accumulated depreciation,used in
Governmental Activities are not financial resources and,therefore,are not reported
in the funds.
RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
DECEMBER 31, 2017
Deferred inflows of resources are not recognized as revenue until a future period
and,therefore,are not reported as revenue in Governmental Funds.Deferred
outflows and inflows of resources related to pensions do not affect current period
expenditures and,therefore,are not reported as assets and liabilities,respectively,
in the Governmental Funds.
Certain accrued obligations and expenses reported in the Statement of Net Position
do not require the use of current financial resources and,therefore,are not reported
as liabilities in Governmental Funds.
Long-term liabilities are not due and payable in the current period and,therefore,
are not reported in the funds.
Amounts reported for Governmental Activities in the Statement of Net Position are
different because:
The Town’s proportion of the collective net pension liability is not reported in the
funds.
TOWN OF CORTLANDVILLE
8
General General
Townwide Parttown
Fund Fund
REVENUES
Real property taxes $1,274,096 $52,626
Real property tax items 49,148
Nonproperty tax items 112,812 250,000
Departmental income 3,195 62,449
Intergovernmental charges
Use of money and property 343 5,192
Licenses and permits 11,280
Fines and forfeitures 281,195
Sale of property and compensation for loss 64,887
Miscellaneous local sources 92 (1,653)
State sources 278,864 35,660
Federal sources 264
Total Revenues 2,076,176 404,274
EXPENDITURES
Current:
General governmental support 1,081,890 44,802
Public safety 64,170 19,824
Public health 2,369
Transportation 210,041
Economic assistance and opportunity 18,000
Culture and recreation 300 341,637
Home and community services 4,508 141,283
Employee benefits 395,642 83,625
Debt Service:
Principal 60,000
Interest 28,320
Capital outlay
Total Expenditures 1,862,871 633,540
Excess of Revenues (Expenditures)213,305 (229,266)
OTHER FINANCING SOURCES (USES)
Interfund transfers in 181,187 254,730
Interfund transfers (out)
Proceeds of obligations
BANs redeemed from appropriations
Total Other Financing Sources (Uses)181,187 254,730
Net Changes in Fund Balances 394,492 25,464
Fund Balances, Beginning 1,072,417 752,672
Fund Balances, Ending $1,466,909 $778,136
See Independent Auditor's Report and Notes to Financial Statements
Major Funds
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2017
8a
Non-Major
Governmental
Fund
Special
Revenue Fund
Highway Special Capital Highway Total
Parttown Water Sewer Grant Projects Townwide Governmental
Fund Fund Fund Fund Fund Fund Funds
$416,029 $183,119 $325,353 $$$$2,251,223
49,148
2,204,641 2,567,453
679,370 750,633 58,089 1,553,736
726 726
347 621 327 7,156 8 54 14,048
11,280
281,195
47,917 112,804
8,630 9,350 100,000 116,419
219,285 533,809
48,789 49,053
2,888,219 871,740 1,086,389 114,034 100,008 54 7,540,894
1,126,692
83,994
2,369
2,309,735 2,519,776
18,000
341,937
318,368 647,351 48,789 1,160,299
400,130 94,700 30,598 1,004,695
121,879 158,021 339,900
46,238 86,379 160,937
78,224 78,224
2,709,865 581,185 922,349 48,789 78,224 6,836,823
178,354 290,555 164,040 65,245 21,784 54 704,071
849 436,766
(84,933)(96,254)(255,579)(436,766)
1,675,000 1,675,000
10,000 10,000
-(84,084) (96,254) -1,429,421 -1,685,000
178,354 206,471 67,786 65,245 1,451,205 54 2,389,071
1,831,222 1,813,161 799,762 256,769 (1,617,778)275,086 5,183,311
$2,009,576 $2,019,632 $867,548 $322,014 $(166,573) $275,140 $7,572,382
Special Revenue Funds
Major Funds
TOWN OF CORTLANDVILLE
9
Net Change in Fund Balances - Total Governmental Funds $2,389,071
Capital outlay $1,194,370
Depreciation expense (847,864)
Net book value of disposed assets (80,660) 265,846
ERS (87,777)
Loans issued $45,310
Forgiveable loans written off (107,091)
Repayments (58,089)(119,870)
Proceeds of obligations $(1,675,000)
BANs redeemed from appropriations (10,000)
Debt principal payments 339,900 (1,345,100)
Change in interest payable (4,984)
Other postemployment benefits liability (601,111)
Change in Net Position of Governmental Activities $496,075
See Independent Auditor's Report and Notes to Financial Statements
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Governmental Funds report capital outlay 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 capital outlay exceeded depreciation expense as well as the book value of disposed
assets in the current period.
FOR THE YEAR ENDED DECEMBER 31, 2017
Changes in the Town's proportionate share of net pension liabilities have no effect on current financial
resources and,therefore,are not reported in the Governmental Funds.In addition,changes in the Town's
deferred outflows and deferred inflows related to pensions do not effect current financial resources and are
also not reported in the Governmental Funds.
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 Governmental Funds.
Long-term obligations,such as those associated with employee benefits,are reported in the Statement of
Net Position.Therefore expenses which result in an (increase)or decrease in these long-term obligations
are not reflected in the Governmental Fund financial statements.These are changes in amounts reported in
the Statement of Activities.
RECONCILIATION OF GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
Cash outflows from the issuance of loans to qualified recipients under revolving loan programs are
recorded as expenditures,whereas loan repayments are recorded as revenue in the fund financial
statements.In the Government-wide statements,these transactions affect only cash and loans receivable
and are not recorded in the Statement of Activities.This is the amount by which loans issued exceeded
loan repayments.
Bond proceeds provide current financial resources to Governmental Funds,but issuing debt increases long-
term liabilities in the Statement of Net Position.Repayment of bond principal is an expenditure in the
Governmental Funds, but the repayment reduces long-term liabilities in the Statement of Net Position.
TOWN OF CORTLANDVILLE
10
FIDUCIARY FUNDS
Agency
Funds
ASSETS
Cash
Unrestricted $30,626
Total Assets $30,626
LIABILITIES
Other liabilities $30,626
Total Liabilities $30,626
See Independent Auditor's Report and Notes to Financial Statements
FOR THE YEAR ENDED DECEMBER 31, 2017
STATEMENT OF FIDUCIARY NET POSITION
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
11
Note 1 Summary of Significant Accounting Policies
The basic financial statements of the Town of Cortlandville (Town) 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 significant government's accounting policies are described below.
Financial Reporting Entity
The Town, which was established in 1829, is governed by its Charter, Town Law, other general
laws of the State of New York, and various local ordinances. The Town Board is the legislative
body responsible for overall operations, the Town Supervisor serves as chief executive officer and
the bookkeeper serves as chief fiscal officer.
The following basic services are provided: highways and streets, water, sanitation, health, culture
and recreation, public improvements, planning and zoning, and general administration.
Fire protection is provided by a separate department which is funded by a Fire Tax District (the
District). The District is funded by means of a tax on the real property tax bill to the Town’s
taxpayers. In 2017, the Town collected and the submitted tax revenue in the amount of $765,460
to the District.
The financial reporting entity consists of the following, as defined by GASB Statement No. 14,
“The Financial Reporting Entity,” as amended by GASB Statement No. 39, “Determining
Whether Certain Organizations are Component Units,” and GASB Statement No. 61, "The
Financial Reporting Entity: Omnibus."
• The primary government, which is the Town.
• Organizations for which the primary government is financially accountable, and
• 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.
The decision to include a potential component unit in the reporting entity is based on the criteria
set forth in GASB Statement No. 14, as amended by GASB Statements Nos. 39 and 61, including
legal standing, fiscal dependency, and financial accountability. Based on the application of these
criteria, no component units have been included in the Town's reporting entity.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
12
Note 1 Summary of Significant Accounting Policies - Continued
Basic Financial Statements
The Town's basic financial statements include both Government-wide (reporting the Town as
a whole) and Governmental Fund financial statements (reporting the Town's funds). The
Government-wide and Governmental Fund financial statements categorize primary activities
as governmental. The Town's general governmental support, public safety, public health
transportation, economic assistance, culture and recreation, and home and community
services are classified as Governmental Activities.
Government-wide Financial Statements
The Government-wide financial statements include a Statement of Net Position and a Statement
of Activities. These statements present summaries of activities for the primary government
(Governmental and Business-type). 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 Town as an entity and the change in the Town's net
assets resulting from the current year's activities.
In the Government-wide Statement of Net Position, 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 Town's net position is reported in three parts - net investment in capital assets, restricted, and
unrestricted. The Town first utilizes restricted resources to finance qualifying activities.
The Statement of Activities reports both the gross and net cost for each of the Town'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. Revenues which are not classified as program revenues are presented as
general revenues of the Town, 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 Town.
The Town does not allocate indirect costs. Indirect costs are reported in the function entitled
"general governmental support."
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
13
Note 1 Summary of Significant Accounting Policies - Continued
Governmental Fund Financial Statements
The financial transactions of the Town are reported in individual funds in the 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 Town 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 Town’s Governmental Funds:
Major Funds
• General Funds - Principal operating funds which include all operations not required to be
recorded in other funds. There are two general funds; one accounting for activity affecting the
entire Town (General Townwide), and a second which accounts for activity outside the
Village of McGraw (General Parttown).
Special Revenue Funds
• Highway Parttown Fund - Established pursuant to Highway Law, Section 141, used to
account for revenues and expenditures for highway purposes outside the Village of
McGraw.
• Water Fund - Established by law to account for revenues derived from charges for water
consumption and the application of such revenues toward related operating expenses and
debt retirement.
• Sewer Fund - Established by law to account for revenues derived from charges for sewer
usage and the application of such revenues toward related operating expenses and debt
retirement.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
14
Note 1 Summary of Significant Accounting Policies - Continued
Special Revenue Funds - Continued
• Special Grant Fund - Established by law to account for activities under the Housing and
Community Development Act of 1974.
Capital Projects Fund - Used to account for financial resources to be used for the acquisition,
construction, or renovation of major capital facilities.
Non-Major Fund
Special Revenue Fund
• Highway Townwide Fund - Established pursuant to Highway Law, Section 141, used to
account for revenues and expenditures for highway purposes of the entire Town.
Fiduciary Fund Types
Fiduciary Fund types are used to account for assets held by the local government in a trustee or
custodial capacity. The Town reports the following Fiduciary Fund:
• Agency Funds - Used to account for money and/or property received and held in the capacity
of trustee, custodian or agent.
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.
Accrual Basis
The Government-wide financial statements are presented on the “economic resources”
measurement focus and the accrual basis of accounting. Accordingly, all of the Town's
assets and liabilities, including capital assets, as well as infrastructure assets and long-term
liabilities, are included in the accompanying Statement of Net Position. The Statement of
Activities presents changes in net position. Under the accrual basis of accounting, revenues
are recognized when earned and expenses are recognized when incurred.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
15
Note 1 Summary of Significant Accounting Policies - Continued
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 Town
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.
Property Taxes
Real property taxes are levied annually by the Town no later than January 1, and become a lien on
January 1. Town taxes are payable from January 1, to a date not later than June 1, and are
deposited directly to the credit of the Town fiscal officer. The Town collects all real estate
taxes for Town and County purposes. The Town distributes the collected tax money to the
Town Supervisor prior to distributing the balance collected to the County on June 1. The
Town thereby is assured of 100% tax collection. Responsibility for the collection of unpaid
taxes rests with the County. Uncollected tax liens are sold annually by the County.
Cash and Cash Equivalents
For financial statement purposes, all highly liquid investments having maturities of three
months or less are considered cash equivalents.
Investments
Investments are stated at fair value.
Receivables
Property tax receivables are stated net of the estimated allowance for uncollectible amounts.
Amounts due from state and federal governments represent amounts owed to the Town to
reimburse it for expenditures incurred pursuant to state and federal programs. Other receivables
represent amounts owed to the Town, which include sewer rents, water rents, and assessments.
No provision has been made for uncollectible accounts for amounts due from the state and federal
governments and other receivables as it is believed that such amounts would be immaterial.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
16
Note 1 Summary of Significant Accounting Policies - Continued
Capital Assets
All capital assets are valued at historical cost or estimated historical cost. 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 $1,000 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 years
Machinery and equipment 5-20 years
Infrastructure 15-60 years
Unearned Revenues
The Town reports unearned revenues on its Statement of Net Position and its Balance Sheet -
Governmental Funds. Unearned revenues arise when resources are received by the Town
before it has legal claim to them, as when grant monies are received prior to the incidence of
qualifying expenditures. In subsequent periods, when the Town has legal claim to the
resources, the liability for unearned revenues is removed and revenues are recorded.
Deferred Inflows and Deferred Outflows of Resources
In addition to assets, the Statement of Net Position reports a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of
resources, represents a consumption of net position that applies to a future period and will
not be recognized as an outflow of resources (expense/expenditure) until then. The Town
reports deferred outflows of resources related to pensions in the Statement of Net Position.
The types of deferred outflows of resources related to pensions are described in Note 6.
The Town has deferred inflows of resources related to unavailable revenue, which is reported only
on the Balance Sheet - Governmental Funds. This separate financial statement element, deferred
inflows of resources, represents an acquisition of net position that applies to a future period(s) and
will not be recognized as an inflow of resources (revenue) until that time.
At December 31, 2017, the Town’s deferred inflows of resources related to revenues consisted of
$479,396 in rehabilitation loans receivable. In addition, the Statement of Net Position reports a
separate section for deferred inflows of resources related to pensions; these types of deferred
inflows of resources are described in Note 6.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
17
Note 1 Summary of Significant Accounting Policies - Continued
Insurance and Risk Management
The Town 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.
Vacation, Sick Leave, and Compensatory Absences
Town employees are granted vacation, sick leave, and other leave benefits as defined in
agreements between the Town and employee representative units. Limited amounts of leave time
may be accumulated up to 40 hours and the cost, therefore, is recognized when payment is made
to employees. In the event of termination, an employee is entitled to payment for accumulated
vacation, unused compensatory absences, and one half of accumulated sick leave.
Equity Classifications
Equity is classified as net assets and displayed in three components:
• Net Investment in Capital Assets - 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 - Consists of resources with constraints placed on the 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 - Consists of all other resources which do not meet the definition of
"restricted" or "invested in capital assets, net of related debt."
Governmental Fund Financial Statements
The Town follows GASB Statement No. 54, which changed the terminology and classification
of fund balance to reflect spending constraints on resources, rather than availability for
appropriation. This approach is intended to provide users more consistent and understandable
information about a fund’s net resources.
Constraints are broken into five classifications: nonspendable, restricted, committed, assigned,
and unassigned. These classifications serve to inform readers of the financial statements of the
extent to which the government is bound to honor any constraints on specific purposes for
which resources in a fund can be spent.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
18
Note 1 Summary of Significant Accounting Policies - Continued
Governmental Fund Financial Statements - Continued
• Nonspendable - Consists of assets inherently nonspendable in the current period either
because of their form or because they must be maintained intact; including prepaid items,
inventories, long-term portions of loans receivable, financial assets held for resale, and
endowment principal.
• Restricted - Consists of amounts subject to legal purpose restrictions imposed by creditors,
grantors, contributors, or laws and regulations of other governments and enforced
externally; or through constitutional provisions or enabling legislation. Most of the Town’s
legally adopted reserves are reported here.
• Committed - Consists of amounts subject to a purpose constraint imposed by formal action
of the government’s highest level of decision-making authority prior to the end of the fiscal
year, and requires the same level of formal action to remove said constraint.
• Assigned - Consists of amounts subject to a purpose constraint representing an intended use
established by the government’s highest level of decision-making authority, or their
designated body or official. The purpose of the assignment must be narrower than the
purpose of the General Fund. In funds other than the General Fund, assigned fund balance
represents the residual amount of fund balance.
• Unassigned - Represents the residual classification of the government’s General Fund, and
could report a surplus or deficit. In funds other than the General Fund, the unassigned
classification should only be used to report a deficit balance resulting from overspending
amounts restricted, committed, or assigned for specific purposes.
The Board of the Town has not adopted any resolutions to commit or assign fund balance.
Currently, fund balances are assigned by the Town Clerk for encumbrances and the Board, by
resolution, approves fund balance appropriations for next year’s budget. The Town applies
expenditures against nonspendable fund balance, restricted fund balance, committed fund
balance, assigned fund balance, and unassigned fund balance.
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. Transfers between
Governmental Funds are netted as part of the reconciliation to the Government-wide
financial statements.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
19
Note 1 Summary of Significant Accounting Policies - Continued
Governmental Fund Financial Statements - Continued
Revenues
Substantially all governmental fund revenues are accrued. Property tax receivables expected
to be received later than 60 days after year end are deferred. In applying GASB Statement
No. 33 to grant revenues, the provider recognizes liabilities and expenses and the recipient
recognizes receivables and revenue when the applicable eligibility requirements, including
time requirements, are met. Resources transmitted before the eligibility requirements are met
are reported as advances by the provider and deferred revenue by the recipient.
Restricted Resources
When an expense is incurred for purposes for which both restricted and unrestricted net
resources are available, it is the Town’s policy to apply restricted funds before unrestricted
funds, unless otherwise prohibited by legal requirements.
Use of Estimates
The presentation of financial statements in conformity with the prescribed basis of
accounting as applied to governmental units requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Future Changes in Accounting Standards
The Town will evaluate the impact each of the following pronouncements may have on its
financial statements and will implement them as applicable and when material:
• GASB has issued Statement No. 75, “Accounting and Financial Reporting for
Postemployment Benefits Other than Pensions,” effective for the year ending December 31,
2018. This Statement replaces the requirements of Statements No. 45, “Accounting and
Financial Reporting by Employers for Postemployment Benefits Other than Pensions,” as
amended, and No. 57, “OPEB Measurements by Agent Employers and Agent Multiple-
Employer Plans, for OPEB.”
• GASB has issued Statement No. 83, “Certain Asset Retirement Obligations,” effective for the
year ending December 31, 2019.
• GASB has issued Statement No. 84, “Fiduciary Activities,” effective for the year ending
December 31, 2020. This statement improves guidance regarding identification of fiduciary
activities for accounting and reporting purposes.
• GASB has issued Statement No. 85, “Omnibus 2017,” effective for the year ending
December 31, 2018.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
20
Note 1 Summary of Significant Accounting Policies - Continued
Future Changes in Accounting Standards - Continued
• GASB has issued Statement No. 86, “Certain Debt Extinguishment Issues,” effective for the
year ending December 31, 2018.
• GASB has issued Statement No. 87, “Leases,” effective for the year ending December 31,
2021.
Note 2 Cash and Investments
The Town's investment policies are governed by state statutes. In addition, the Town has its own
written investment policy. The Town of Cortlandville's monies must be deposited in Federal
Deposit Insurance Corporation (FDIC) insured commercial banks or trust companies located
within the State. The Town Supervisor 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 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.
The written investment policy requires repurchase agreements to be purchased from banks located
within the State and that underlying securities must be obligations of the Federal government.
Underlying securities must have a market value of at least 105% of the cost of the repurchase
agreement.
Custodial credit risk is the risk that in the event of a bank failure, the Town’s deposits may
not be returned to it. While the Town does not have a specific policy for custodial credit
risk, New York State statutes govern the Town’s investment policies, as discussed previously
in the first paragraph above.
GASB Statement No. 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 Town’s name.
The Town’s aggregate bank balances of $7,012,696 are either insured or collateralized with
securities held by the pledging financial institution in the Town’s name.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
21
Note 2 Cash and Investments - Continued
Restricted Cash
Total restricted cash of $1,578,134 is composed of $1,094,987 reserved for capital purposes,
$83,600 reserved for insurances, $322,014 for community development, $1,645 for other
purposes and $75,888 reserved for retirement contributions.
Note 3 Property Taxes
At December 31, 2017, total real property taxes receivable was $28,335. No allowance for
uncollectible taxes has been reported, as all property taxes are deemed collectible.
Note 4 Other Receivables
Description Amount
Water Fund Rents $522
Sewer Fund Rents 48
Total $570
Note 5 Capital Assets
A summary of changes in capital assets at December 31, 2017 is as follows:
Deletions/Balance at
Governmental Activities Additions Reclassifications 12/31/2017
Non-depreciable Capital Assets:
Land $457,912 $594,000 $(52,660) $999,252
Construction in progress 4,418,739 333,046 (4,485,204) 266,581
Total Non-depreciable Capital Assets 4,876,651 927,046 (4,537,864) 1,265,833
Depreciable Capital Assets:
Buildings 4,385,217 4,158 4,389,375
Improvements 1,704,750 3,650 4,485,204 6,193,604
Machinery and equipment 5,353,101 259,516 (194,983) 5,417,634
Infrastructure 17,746,221 17,746,221
Total Depreciable Capital Assets 29,189,289 267,324 4,290,221 33,746,834
Total Historical Cost 34,065,940 1,194,370 (247,643) 35,012,667
Less Accumulated Depreciation:
Buildings 1,840,526 91,976 1,932,502
Improvements 658,783 197,651 856,434
Machinery and equipment 3,836,515 314,428 (166,983) 3,983,960
Infrastructure 11,682,979 243,809 11,926,788
Total Accumulated Depreciation 18,018,803 847,864 (166,983) 18,699,684
Governmental Activities Capital Assets, Net $16,047,137 $346,506 $(80,660) $16,312,983
Balance at
12/31/16
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
22
Note 5 Capital Assets - Continued
Depreciation expense was charged to functions as follows:
General governmental support $70,279
Public safety 153
Transportation 273,446
Culture and recreation 84,853
Home and community services 419,133
Total $847,864
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS)
(the System)
Plan Descriptions and Benefits Provided
Employees’ Retirement System (ERS)
The Town participates in the New York State and Local Employees’ Retirement System (ERS).
This is a cost-sharing multiple-employer retirement system. The System provides retirement
benefits as well as death and disability benefits. The net position of the System is held in the
New York State Common Retirement Fund (the Fund), which was established to hold all net
assets and record changes in plan net position allocated to the System. The Comptroller of the
State of New York serves as the trustee of the Fund and is the administrative head of the
System. System benefits are established under the provisions of the New York State Retirement
and Social Security Law (RSSL). Once a public employer elects to participate in the System,
the election is irrevocable. The New York State Constitution provides that pension membership
is a contractual relationship and plan benefits cannot be diminished or impaired. Benefits can
be changed for future members only by enactment of a State statute. The Town also participates
in the Public Employees’ Group Life Insurance Plan (GLIP), which provides death benefits in
the form of life insurance. The System is included in the State’s financial report as a pension
trust fund. That report, including information with regard to benefits provided, may be found at
www.osc.state.ny.us/retire/publications/index.php or obtained by writing to the New York State
and Local Retirement System, 110 State Street, Albany, New York 12244.
The System is noncontributory except for employees who joined after July 27, 1976, who
contribute 3% of their salary for the first ten years of membership, and employees who joined
on or after January 1, 2010 who generally contribute 3.0 to 3.5% of their salary for their entire
length of service. In addition, employee contribution rates under ERS Tier VI vary based on a
sliding salary scale. For ERS, the Comptroller annually certifies the actuarially determined
rates expressly used in computing the employers’ contributions based on salaries paid during
the System’s fiscal year ending March 31.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
23
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS)
(the System) - Continued
Summary of Significant Accounting Policies
The Systems’ financial statements from which the Systems’ fiduciary respective net position is
determined are prepared using the accrual basis of accounting. Plan member contributions are
recognized when due and the employer has a legal requirement to provide the contributions.
Benefits and refunds are recognized when due and payable in accordance with the terms of the
plan. Plan investments are reported at fair value. For detailed information on how investments
are valued, please refer to the Systems’ annual reports.
Contributions
Contributions for the current year and two preceding Plan years were equal to 100% of the
contributions required, and were as follows:
2017 2016 2015
ERS $275,760 $354,575 $374,517
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions
At December 31, 2017, the Town reported the following liability for its proportionate share of
the net pension liability for the System. The net pension liability was measured as of March 31,
2017. The total pension liability used to calculate the net pension liability was determined by
an actuarial valuation. The Town’s proportionate share of the net pension liability was based
on a projection of the Town’s long-term share of contributions to the System relative to the
projected contributions of all participating members, actuarially determined. This information
was derived from report provided to the Town by the ERS System.
ERS
Actuarial valuation date 4/1/2016
Net pension liability $9,396,223,126
Town's proportionate share of the
Plan's total net pension liability 607,946
Town's share of the Plan's
total net pension liability 0.0064701%
For the year ended December 31, 2017, the Town recognized pension expense of $367,982 for
ERS in the financial statements. At December 31, 2017 the Town reported deferred outflows
of resources and deferred inflows of resources related to the pensions from the following
sources:
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
24
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS)
(the System) - Continued
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions - Continued
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and actual experience $15,235 $92,320
Changes of assumptions 207,697
Net differences between projected and actual
earnings on pension plan investments
Changes in proportion and differences
between the Town’s contributions
and proportionate share of contributions
Town’s contributions subsequent to the
measurement date
Total $623,208 $109,284
16,964
211,264
121,432
67,580
Town contributions subsequent to the measurement date, reported as deferred outflows of
resources, will be recognized as a reduction of the net pension liability in the year ended
December 31, 2018. Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to pensions will be recognized in pension expense as follows:
Year Ended ERS
2018 $134,809
2019 134,809
2020 114,869
2021 (81,827)
2022 -
Thereafter -
Actuarial Assumptions
The total pension liability as of the measurement date was determined by using an actuarial
valuation as noted in the table below, with update procedures used to roll forward the total
pension liability to the measurement date. The actuarial valuations used the following
actuarial assumptions:
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
25
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS)
(the System) - Continued
Actuarial Assumptions - Continued
ERS
Measurement date March 31, 2017
Actuarial valuation April 1, 2016
Interest rate 7.0%
Salary increases 3.8%
Cost of living 1.3%
Inflation rate 2.5%
Annuitant mortality rates are based on April 1, 2010 - March 31, 2015 System’s experience
with adjustments for mortality improvements based on MP-2014.
The actuarial assumptions used in the April 1, 2016 valuation are based on the results of an
actuarial experience study for the period April 1, 2010 - March 31, 2015.
The long term rate of return on pension plan investments was determined using a building
block method in which best estimate ranges of expected future real rates of return (expected
returns net of investment expense and inflation) are developed for each major asset class.
These ranges are combined to produce the long term expected rate of return by weighting the
expected future real rates of return by each the target asset allocation percentage and by
adding expected inflation. Best estimates of the arithmetic real rates of return for each major
asset class included in the target asset allocation are summarized below:
ERS
Measurement date March 31, 2017
Asset Type:
Domestic equities 4.55%
International equities 6.35%
Real estate 5.80%
Private equity/Alternative investments 7.75%
Absolute return strategies 4.00%
Opportunistic portfolio 5.89%
Real assets 5.54%
Cash -0.25%
Inflation-indexed bonds 1.50%
Mortgages and bonds 1.31%
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
26
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS) -
Continued
Discount Rate
The discount rate used to calculate the total pension liability was 7.0%. The projection of
cash flows used to determine the discount rate assumes that contributions from plan members
will be made at the current contribution rates and contributions from employers will be made
at statutorily required rates, actuarially. Based on the assumptions, the System’s fiduciary
net position was projected to be available to make all projected future benefit payments of
current plan members. Therefore, the long term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the total
pension liability.
The following presents the Town’s proportionate share of the net pension liability calculated
using the discount rate of 7.0%, as well as what the Town’s proportionate share of the net
pension liability would be if it were calculated using a discount rate that is 1-percentage point
lower (6.0%) or 1-percentage point higher (8.0%) than the current rate:
Current
1% Decrease Assumption
(6.0%)(7.0%)
Town’s proportionate share of the
net pension liability (asset)$1,941,660 $607,946 $(519,706)
ERS
1% Increase
(8.0%)
Pension Plan Fiduciary Net Position
The components of the current-year net pension liability of the employers as of the respective
valuation dates were as follows:
Dollars in
Thousands
ERS
Valuation date March 31, 2017
Employers' total pension liability $ 177,400,586
Plan net position (168,004,363)
Employers’ net pension liability $ 9,396,223
Ratio of Plan Net Position to the
Employers' Total Pension Liability 94.7%
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
27
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS) -
Continued
Payables to the Pension Plans
For ERS, employer contributions are paid annually based on the System’s fiscal year which
ends on March 31st. Accrued retirement contributions as of December 31, 2017 represent the
projected employer contribution for the period of April 1, 2017 through December 31, 2017
based on estimated ERS wages multiplied by the employer’s contribution rate, by tier.
Accrued retirement contributions as of December 31, 2017 amounted to $-0-.
Effect on Net Position
Changes in the net pension liability and deferred outflows and inflows of resources for the
year ended December 31, 2017 resulted in the following effect on net position:
Beginning Ending
Balance Change Balance
ERS:
Net pension liability $(1,122,102) $514,156 $(607,946)
Deferred outflows of resources 1,248,863 (625,655) 623,208
Deferred inflows of resources (133,006) 23,722 (109,284)
Total $(6,245) $(87,777) $(94,022)
Note 7 Postemployment Benefits Other than Pensions
The Town follows GASB Statement No. 45 “Accounting and Financial Reporting by Employers
for Postemployment Benefits Other Than Pensions.” In the past, the Town reported the cost of its
retiree health care postretirement benefits on a “pay-as-you-go” basis. The most recent full
actuarial valuation of the Town Postretirement Medical Plans (Plan) was performed as of
January 1, 2017 for the fiscal year ending December 31, 2017.
The Plan is a single-employer, defined benefit healthcare plan administered by the Town. The
Plan provides medical, dental, vision and prescription drug benefits to eligible retirees and their
spouses and can be amended by action of the Town subject to applicable collective
bargaining and employment agreements. The Town assigns the authority to establish and
amend benefit provisions to the Town Board for non-bargaining unit employees. The Plan does
not issue a stand-alone financial report.
The contribution requirements of Plan members and the Town are established and may be
amended by the Town Board. The Town Board has negotiated several collective bargaining
agreements, which include obligations of Plan members and the Town. The required
contribution is based on projected pay-as-you-go financing requirements. Plan members
receiving benefits may be required to contribute to the Plan depending on their collective
bargaining unit.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
28
Note 7 Postemployment Benefits Other than Pensions - Continued
The Town’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on
the annual required contribution of the employer (ARC), an amount actuarially determined in
accordance with the parameters of GASB Statement No. 45. The ARC represents a level of
funding that, if paid on an ongoing basis, is projected to cover normal cost each year and
accumulate sufficient total accruals for all postretirement benefits when due.
The following table shows the components of the Town’s annual OPEB cost for the year, the
amount expected to be contributed to the Plan, and changes in the Town’s net OPEB obligation
to the Town’s Plan:
Normal cost $321,563
Amortization of Unfunded Actuarial Accrued Liability (UAAL)554,932
Total Annual Required Contribution (ARC)876,495
Interest on net OPEB liability 92,239
Adjustment to annual required contribution (153,433)
Annual OPEB Cost (Expense)815,301
Contributions made on behalf of employees (expected)(214,190)
Increase in Net OPEB Obligation 601,111
Net OPEB Obligation - January 1, 2017 2,305,969
Net OPEB Obligation - December 31, 2017 $2,907,080
The Town’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and
the net OPEB obligation for 2017 is as follows:
Percentage of
Fiscal Annual Annual OPEB Net OPEB
Year Ended OPEB Cost Cost Contributed Obligation
12/31/2017 $815,301 26.27%$2,907,080
12/31/2016 419,907 25.60%2,305,969
12/31/2015 400,551 24.30%1,993,365
As of December 31, 2017, the Plan was not funded. The actuarial accrued liability for benefits
was $8,019,380; there are no assets legally segregated for the Plan. The covered payroll (annual
payroll of active employees covered by the Plan) was $2,133,472 and the ratio of UAAL to the
covered payroll was 375.9%.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
29
Note 7 Postemployment Benefits Other than Pensions - Continued
Actuarial valuations of an ongoing Plan involve estimates of the value of reported amounts
and assumptions about the probability of occurrence of events far into the future. Examples
include assumptions about future employment, mortality, and healthcare cost trends.
Amounts determined regarding funded status of the Plan and annual required contributions of
the employer are subject to continual revision as actual results are compared with past
expectations and new estimates are made about 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 accrued liabilities
for benefits.
Actuarial Methods and Assumptions - Projections of benefits for financial reporting purposes
are based on the substantive Plan (the Plan as understood by the employer and the 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 actuarial 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.
In the January 1, 2017 Actuarial Valuation Report, the projected unit credit method was
used. Under this method, each participant’s projected benefit is calculated at all possible
ages based on the Plan provisions as well as the initial data and actuarial assumptions.
Actuarial assumptions included an annual discount rate of 4.00%. Additional actuarial
assumptions included a dental and vision trend rate of 4.00% per year and an initial annual
medical cost trend rate of 8.00%, reduced by decrements to an ultimate rate of 4.03% after
69 years.
Note 8 Short-term Debt - Bond Anticipation Notes
Notes issued in anticipation of proceeds from the subsequent sale of bonds are recorded as current
liabilities of the funds that will actually receive the proceeds from the issuance of the bonds.
Such notes may be classified as long-term debt when (1) the intention is to refinance the debt on a
long-term basis and (2) the intention can be substantiated through a post balance sheet issuance of
long-term debt or by an acceptable financing agreement.
State law requires that bond anticipation notes (BANs) issued for capital purposes be converted to
long-term financing within five years after the original issue date. The Town issues BANs to
finance capital improvements.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
30
Note 8 Short-term Debt - Bond Anticipation Notes - Continued
Changes in short-term debt outstanding are as follows:
Payable at Payable at
12/31/2016 12/31/2017
Bond Anticipation Notes $ 2,076,000 $ - $ (2,076,000)$ -
RedeemedIssued
There were no BANs outstanding at December 31, 2017.
Interest expense on short-term debt for fiscal year 2017 was $21,206. BANs redeemed from
appropriations totaled $10,000.
Note 9 Long-term Debt
At December 31, 2017, the total outstanding indebtedness of the Town aggregated $7,667,100.
Of this amount, $540,000 was subject to the constitutional debt limit and represented 0.83% of its
debt limit.
Serial Bonds and Notes
The Town 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 general Government-wide
financial statements. The provision to be made in future budgets for capital indebtedness
represents the amount exclusive of interest, authorized to be collected in future years from
taxpayers and others for liquidation of the long-term liabilities.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
31
Note 9 Long-term Debt - Continued
Debt Maturity Schedule
The following is a summary of bonds outstanding at December 31, 2017 with corresponding
maturity schedules:
Date Balance
Description of Issue Issued Original Amount Interest Rate Final Maturity Outstanding
Polkville water improvements 2012 $980,000 2.00%2050 $960,000
Town Hall building 2007 275,000 4.57%2026 247,500
Town Hall expansion 2006 325,000 4.57%2026 292,500
NYSEFC sewer improvements 2005 1,475,000 2.48%2035 1,415,000
Sewer refunding 2004 110,464 2.50-4.00%2020 81,743
Water refunding 2004 389,536 2.50-4.00%2020 288,257
Sewer improvements 1982 12,400 5.00%2019 8,100
Route 13 sewer project 2016 2,754,000 1.63%2053 2,699,000
Public improvements 2017 1,675,000 2-3.00%2032 1,675,000
Total $7,667,100
Interest paid on certain Serial Bonds varies from year to year, in accordance with the interest rates
specified in bond agreements.
The following is a summary of maturing debt service requirements for general obligation bonds
and notes:
Bonds Bonds
Year Principal Interest Total
2018 $421,300 $169,304 $590,604
2019 426,800 158,054 584,854
2020 425,000 145,897 570,897
2021 305,000 139,021 444,021
2022 312,000 128,460 440,460
2023-2027 1,595,000 523,960 2,118,960
2028-2032 1,531,000 340,734 1,871,734
2033-2037 803,000 193,991 996,991
2038-2042 559,000 138,030 697,030
2043-2047 609,000 87,701 696,701
2048-2052 582,000 34,475 616,475
2053 98,000 1,593 99,593
Total $7,667,100 $2,061,220 $9,728,320
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
32
Note 9 Long-term Debt - Continued
Changes in Indebtedness
The following is a summary of changes in the Town’s indebtedness for the year ended December
31, 2017:
Balance Maturities/Balance
Governmental Activities 12/31/2016 Payments 12/31/2017
General obligation bonds $6,322,000 $1,675,000 $(329,900) $7,667,100 $421,300
Total $6,322,000 $1,675,000 $(329,900) $7,667,100 $421,300
Amount Due
Within One Year
New Issues/
Additions
Interest paid on short-term and long-term debt $160,937
Prior year accrued interest (52,116)
Current year accrued interest 57,100
Interest Expense $165,921
Note 10 Interfund Receivables and Payables
During the course of normal operations, the Town has numerous transactions between funds
including expenditures and transfers of resources primarily to provide services. The
Governmental Funds financial statements generally reflect such transactions as transfers.
The Town also 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.
Interfund receivable and payable balances at December 31, 2017 are as follows:
Interfund Interfund Interfund Interfund
Receivables Payables Revenue Expense
General Fund - Townwide $$28,335 $181,187 $
General Fund - Parttown 254,731 254,730
Water Fund 13,201 849 84,933
Sewer Fund 26,984 96,254
Capital Projects Fund 266,581 255,579
Total $294,916 $294,916 $436,766 $436,766
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
33
Note 11 Reconciliation Between Restricted Fund Balance and Restricted Net Position
Restricted fund balance in Governmental Fund financial statements $1,578,134
Reconciling item: Special grant fund deferred inflows of resources 479,396
Restricted Net Position in the Government-Wide Financial Statements $2,057,530
Note 12 Fund Balance Detail
At December 31, 2017, nonspendable, restricted and assigned fund balance in the
governmental funds was as follows:
General General Highway Total
Townwide Parttown Parttown Water Sewer Special Non-Major
Fund Fund Fund Fund Fund Grant Fund Funds
Nonspendable
Prepaid expenses $25,147 $2,739 $32,263 $15,199 $14,694 $- $-
Total Nonspendable
Fund Balance $25,147 $2,739 $32,263 $15,199 $14,694 $- $-
Restricted
Unemployment
insurance reserve $83,600 $$$$$$
Retirement
contribution reserve 30,098 19,010 353 13,025 13,402
Other 1,645 322,014
Capital reserve 338,187 374,721 382,079
Total Restricted
Fund Balance $113,698 $20,655 $338,540 $387,746 $395,481 $322,014 $-
Assigned
Appropriated for next
year’s budget $151,893 $420,000 $940,000 $23,614 $128,038 $$275,062
Remaining
fund balance 309,278 698,773 1,593,073 329,335 78
Total Assigned
Fund Balance $151,893 $729,278 $1,638,773 $1,616,687 $457,373 $- $275,140
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
34
Note 13 Restricted Fund Balances
Portions of fund balance are restricted and are not available for current expenditures as
reported in the Governmental Funds Balance Sheet. The balances and activity for the year
ended December 31, 2017 of the Governmental Funds reserves were as follows:
Beginning Interest Ending
Balance Additions Earned Appropriated Balance
Insurance reserve $83,610 $$17 $(27) $83,600
Retirement contribution fund reserve 135,863 25 (60,000) 75,888
Miscellaneous reserve 1,645 1,645
Capital reserve 1,003,984 90,800 203 1,094,987
Special grant fund 256,769 114,034 (48,789) 322,014
Total Restricted Fund Balance $1,481,871 $204,834 $245 $(108,816) $1,578,134
Reserved Fund Balance
Note 14 Contingencies
The Town is exposed to various risks of loss related to torts; theft of, damage to, and destruction
of assets; injuries to employees; errors and omissions; natural disasters, etc. These risks are
covered by commercial insurance purchased from independent third parties. Settled claims for
these risks have not exceeded commercial insurance coverage for the past three years.
The Town has several tax review proceedings pending. All of these proceedings are currently in
negotiation and expected to be resolved; no adjustments have been made for potential refunds.
Note 15 Environmental Liability
The Town was designated a potentially responsible party by the New York State Department
of Environmental Conservation (NYSDEC) for an inactive waste site located in the Town.
The site was closed using grant funds at no cost to the Town. Monitoring of the site is
estimated to cost $1,250,000 over the next 25 years.
During the year, the Board authorized the Supervisor to sign an Order on Consent and
Administrative Settlement received by the NYSDEC that requires the Town to undertake
future costs stemming from the monitoring and maintenance of the site. No liability has been
recorded in the financial statements due to the uncertainty regarding the amount for which
the Town will be responsible.
Note 16 Stewardship, Compliance and Accountability
Deficit Fund Balance
At December 31, 2017, the Capital Projects Fund had a deficit fund balance of $(166,573). This
deficit will be eliminated as funds are transferred from other funds or from other sources.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2017
35
Note 17 Tax Abatements
For the year ended December 31, 2017, the Town was subject to tax abatements negotiated by
the Cortland County Industrial Development Agency (CCIDA). Abatement agreements entered
into by CCIDA reduce property taxes collected by the Town.
Information relevant to disclosure of the program for the year ended December 31, 2017 is as
follows:
Amount of
Tax Abatement Program Taxes Abated
Economic Development:
Real Property Tax $21,144
Total $21,144
TOWN OF CORTLANDVILLE
36
Original Final
Budget Budget Actual Variance
REVENUES
Real property taxes $1,272,733 $1,272,733 $1,274,096 $1,363
Real property tax items 50,000 50,000 49,148 (852)
Nonproperty tax items 102,000 102,000 112,812 10,812
Departmental income 2,500 2,500 3,195 695
Use of money and property 343 343
Licenses and permits 11,010 11,010 11,280 270
Fines and forfeitures 250,050 250,050 281,195 31,145
Sale of property and compensation for loss 32,444 64,887 32,443
Miscellaneous local sources 92 92
State sources 128,000 128,000 278,864 150,864
Federal sources 200 200 264 64
Total Revenues 1,816,493 1,848,937 2,076,176 227,239
EXPENDITURES
Current:
General governmental support 1,194,742 1,227,186 1,081,890 145,296
Public safety 74,000 74,000 64,170 9,830
Transportation 260,011 260,011 210,041 49,970
Economic assistance and opportunity 21,000 21,000 18,000 3,000
Culture and recreation 5,430 5,430 300 5,130
Home and community services 19,000 19,000 4,508 14,492
Employee benefits 486,890 486,890 395,642 91,248
Debt service (principal and interest)88,320 88,320 88,320 -
Total Expenditures 2,149,393 2,181,837 1,862,871 318,966
Excess of (Expenditures) Revenues (332,900) (332,900) 213,305 546,205
OTHER FINANCING SOURCES
Interfund transfers in 181,007 181,007 181,187 180
Total Other Financing Sources 181,007 181,007 181,187 180
Excess of (Expenditures) and Other (Uses)
Over Revenues and Other Financing Sources (151,893) (151,893) 394,492 $546,385
Appropriated Fund Balance 151,893 151,893
Net Change in Fund Balance $-$-394,492
Fund Balance, Beginning 1,072,417
Fund Balance, Ending $1,466,909
See Independent Auditor's Report and Notes to Required Supplementary Information
BUDGETARY COMPARISON SCHEDULE
GENERAL TOWNWIDE FUND - NON-GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2017
TOWN OF CORTLANDVILLE
37
Original Final
Budget Budget Actual Variance
REVENUES
Real property taxes $52,626 $52,626 $52,626 $-
Nonproperty tax items 250,000 250,000 250,000 -
Departmental income 46,055 46,055 (46,055)
Intergovernmental charges 62,449 62,449
Licenses and permits 5,192 5,192
Interfund revenues (1,653) (1,653)
State sources 19,000 19,000 35,660 16,660
Total Revenues 367,681 367,681 404,274 36,593
EXPENDITURES
Current:
General governmental support 69,000 69,000 44,802 24,198
Public safety 20,000 20,000 19,824 176
Public health 3,000 3,000 2,369 631
Culture and recreation 401,904 401,904 341,637 60,267
Home and community services 196,746 196,746 141,283 55,463
Employee benefits 97,031 97,031 83,625 13,406
Total Expenditures 787,681 787,681 633,540 154,141
Excess of (Expenditures) Revenues (420,000) (420,000) (229,266) $190,734
OTHER FINANCING SOURCES (USES)
Interfund transfers in 254,730 254,730
Total Other Financing Sources --254,730 254,730
Excess of (Expenditures) and Other (Uses)
Over Revenues and Other Financing Sources (420,000) (420,000) 25,464 $445,464
Appropriated Reserve
Appropriated Fund Balance 420,000 420,000
Net Change in Fund Balance $-$-25,464
Fund Balance, Beginning 752,672
Fund Balance, Ending $778,136
See Independent Auditor's Report and Notes to Required Supplementary Information
BUDGETARY COMPARISON SCHEDULE
GENERAL PARTTOWN FUND - NON-GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2017
TOWN OF CORTLANDVILLE
38
Original Final
Budget Budget Actual Variance
REVENUES
Real property taxes $416,029 $416,029 $416,029 $-
Nonproperty tax items 1,970,000 1,970,000 2,204,641 234,641
Use of money and property 250 250 347 97
Sale of property and compensation for loss 16,000 16,000 47,917 31,917
State sources 189,000 189,000 219,285 30,285
Total Revenues 2,591,279 2,591,279 2,888,219 296,940
EXPENDITURES
Current:
Transportation 3,007,999 3,007,999 2,309,735 698,264
Employee benefits 533,280 533,280 400,130 133,150
Total Expenditures 3,541,279 3,541,279 2,709,865 831,414
Excess of (Expenditures) Revenues (950,000) (950,000) 178,354 1,128,354
OTHER FINANCING SOURCES (USES)
Interfund transfers (out)(50,000) (50,000) 50,000
Total Other Financing (Uses) Sources (50,000) (50,000) -50,000
Excess of (Expenditures) and Other (Uses)
Over Revenues and Other Financing Sources (1,000,000) (1,000,000) 178,354 $1,178,354
Appropriated Reserve 60,000
Appropriated Fund Balance 940,000 1,000,000
Net Change in Fund Balance $-$-178,354
Fund Balance, Beginning 1,831,222
Fund Balance, Ending $2,009,576
See Independent Auditor's Report and Notes to Required Supplementary Information
BUDGETARY COMPARISON SCHEDULE
HIGHWAY PARTTOWN - NON-GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2017
TOWN OF CORTLANDVILLE
39
Original Final
Budget Budget Actual Variance
REVENUES
Real property taxes $183,119 $183,119 $183,119 $-
Departmental income 715,148 715,148 679,370 (35,778)
Use of money and property 200 200 621 421
Miscellaneous local sources 8,630 8,630
Total Revenues 898,467 898,467 871,740 (26,727)
EXPENDITURES
Current:
General governmental support 10,000 10,000 10,000
Home and community services 530,035 530,035 318,368 211,667
Employee benefits 113,994 113,994 94,700 19,294
Debt service (principal and interest)168,119 168,119 168,117 2
Total Expenditures 822,148 822,148 581,185 240,963
Excess of Revenues 76,319 76,319 290,555 214,236
OTHER FINANCING (USES) SOURCES
Interfund transfers in 849 849
Interfund transfers (out)(99,933) (99,933) (84,933) 15,000
Total Other Financing (Uses) Sources (99,933) (99,933) (84,084) 15,849
Excess of (Expenditures) and Other (Uses)
Over Revenues and Other Financing Sources $(23,614) $(23,614) 206,471 $230,085
Appropriated Reserve
Appropriated Fund Balance 23,614 23,614
Net Change in Fund Balance $-$-206,471
Fund Balance, Beginning 1,813,161
Fund Balance, Ending $2,019,632
See Independent Auditor's Report and Notes to Required Supplementary Information
BUDGETARY COMPARISON SCHEDULE
WATER FUND - NON-GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2017
TOWN OF CORTLANDVILLE
40
Original Final
Budget Budget Actual Variance
REVENUES
Real property tax items $325,353 $325,353 $$(325,353)
Departmental income 789,077 789,077 750,633 (38,444)
Intergovernmental charges 726 726 726 -
Use of money and property 100 100 327 227
Miscellaneous local sources 9,350 9,350
Total Revenues 1,115,256 1,115,256 1,086,389 (28,867)
EXPENDITURES
Current:
General governmental support 10,000 10,000 10,000
Home and community services 776,920 776,920 647,351 129,569
Employee benefits 48,207 48,207 30,598 17,609
Debt service (principal and interest)286,113 286,113 244,400 41,713
Total Expenditures 1,121,240 1,121,240 922,349 198,891
Excess of (Expenditures) Revenues (5,984) (5,984) 164,040 170,024
OTHER FINANCING SOURCES (USES)
Interfund transfers (out)(122,054) (122,054) (96,254) 25,800
Total Other Financing Sources (Uses) (122,054) (122,054) (96,254) 25,800
Excess of (Expenditures) and Other Financing (Uses)
Over Revenues and Other Financing Sources (128,038) (128,038) 67,786 $195,824
Appropriated Reserve
Appropriated Fund Balance 128,038 128,038
Net Change in Fund Balance $-$-67,786
Fund Balance, Beginning 799,762
Fund Balance, Ending $867,548
See Independent Auditor's Report and Notes to Required Supplementary Information
BUDGETARY COMPARISON SCHEDULE
SEWER FUND - NON-GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2017
TOWN OF CORTLANDVILLE
41
Actuarial UAAL as a
Actuarial Actuarial Accrued Unfunded Percentage
Valuation Year Value of Liability (AAL) -AAL Funded Covered of Covered
Date Ended Assets Entry Age (UAAL)Ratio Payroll Payroll
1/1/2017 2017 $-$8,019,380 $8,019,380 0.0%$2,133,472 375.9%
1/1/2014 2016 -4,413,487 4,413,487 0.0%2,116,847 208.5%
1/1/2014 2015 - 4,178,273 4,178,273 0.0% 2,168,755 192.7%
1/1/2014 2014 -3,946,970 3,946,970 0.0%2,167,774 182.1%
1/1/2012 2013 -4,211,134 4,211,134 0.0%2,060,834 204.3%
1/1/2012 2012 -3,957,241 3,957,241 0.0%2,133,962 185.4%
See Independent Auditor's Report and Notes to Required Supplementary Information
SCHEDULE OF FUNDING PROGRESS
FOR THE YEAR ENDED DECEMBER 31, 2017
TOWN OF CORTLANDVILLE
42
2017 2016
Contractually required contribution $275,760 $354,575
Contributions in relation to the contractually required contribution (275,760)(354,575)
Contribution deficiency (excess)- -
Town's covered - employee payroll 1,841,476 1,824,459
Contributions as a percentage of covered - employee payroll 14.97%19.43%
See Independent Auditor's Report and Notes to Required Supplementary Information
SCHEDULE OF THE TOWN'S CONTRIBUTIONS
NYSLRS PENSION PLAN
FOR THE YEARS ENDED DECEMBER 31,
42a
2015 2014 2013 2012 2011 2010 2009 2008
$374,517 $354,583 $329,969 $330,497 $205,690 $126,990 $- $-
(374,517)(354,583)(329,969)(330,497)(205,690)(126,990)- -
- - - - - - - -
1,886,537 1,841,761 1,789,298 1,343,189 - - - -
19.85%19.25%18.44%24.61%0.00%0.00%0.00%0.00%
TOWN OF CORTLANDVILLE
43
2017 2016 2015
Town's proportion of the net pension liability 0.0064701%0.0069912%0.0067653%
Town's proportionate share of the net pension liability $607,946 $1,122,102 228,548
Town's covered-employee payroll 1,841,476 1,824,459 1,886,537
Town's proportionate share of the net pension liability 33.0%61.5%12.1%
as a percentage of its covered-employee payroll
Plan fiduciary net position as a percentage of the total pension liability 90.7%90.7%97.9%
See Independent Auditor's Report and Notes to Required Supplementary Information
FOR THE YEARS ENDED DECEMBER 31,
SCHEDULE OF THE TOWN'S PROPORTIONATE
SHARE OF THE NET PENSION LIABILITY
TOWN OF CORTLANDVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2017
44
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 ensuring that appropriations are not exceeded.
Note 2 Budget Policies
Budget policies are as follows:
• Annual operating budgets are maintained for the following Governmental Fund Types:
o General Funds
o Special Revenue Funds (Highway, Water, and Sewer Funds)
The Special Grant Fund does not have an annual budget because individual projects have separate
budgets, which are not prepared on an annual basis.
No later than September 15, the budget officer submits a tentative budget to the Town Board for
the fiscal year commencing the following January 1. The tentative budget includes proposed
expenditures and the proposed means of financing for all funds.
After public hearings are conducted to obtain taxpayer comments, no later than October 15, the
governing board adopts the budget.
Annual budgets adopted represent the legal limit on expenditures for that period. At the end of
each year unexpended, unencumbered appropriations lapse. Encumbered appropriations do not
lapse and are carried forward.
Expenditures may not legally exceed appropriations at the fund level.
All modifications of the budget must be approved by the Town Board.
The Town Board may increase the appropriations budget during the fiscal year where additional
revenues or expenditures not involved in the original adopted budget are identified.
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 December 31, 2017.
TOWN OF CORTLANDVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2017
45
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.
Note 5 Schedules of the Town’s Proportionate Share of the Net Pension Liability
The Schedules of the Town’s Proportionate Share of the Net Pension Liability, required
supplementary information, present three years of information. These schedules will present
ten years of information as it becomes available from the pension plans.
Note 6 Schedules of Town’s Contributions - NYSLRS Pension Plans and Schedules of the Town’s
Proportionate Share of the Net Pension Liability
The Schedules of Town’s Contributions presents partial information, and will present ten years of
information as it becomes available.
NYSLRS
Changes in Benefit Terms
There were no significant legislative changes in benefits for the April 1, 2016 actuarial
valuation.
Changes of Assumptions
There were changes in the economic (investment rate of return, inflation, COLA, and salary
scales) and demographic (pensioner mortality and active member decrements) assumptions
used in the April 1, 2016 actuarial valuation.
Methods and Assumptions Used in Calculations of Actuarially Determined
Contributions
The April 1, 2016 actuarial valuation determines the employer rates for contributions payable in
fiscal year 2017. The following actuarial methods and assumptions were used:
Actuarial cost method The System is funded using the Aggregate Cost Method. All
unfunded actuarial liabilities are evenly amortized (as a percentage
of projected pay) over the remaining worker lifetimes of the
valuation cohort.
Asset valuation period 5 year level smoothing of the difference between the actual gain
and the expected gain using the assumed investment rate of return.
Inflation 2.5%
Salary scale 3.8% in ERS, indexed by service.
Investment rate of return 7.0% compounded annually, net of investment expenses,
including inflation.
Cost of living adjustments 1.3% annually
INDEPENDENT AUDITOR’S 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
Town Council
Town of Cortlandville
Cortland, New York
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of governmental activities,
each major fund, and the aggregate remaining fund information of the Town of Cortlandville, (the Town),
as of and for the year ended December 31, 2017, and the related notes to the financial statements, which
collectively comprise the Town’s basic financial statements, and have issued our report thereon dated
July 2, 2018.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Town's internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the Town’s internal control. Accordingly, we do
not express an opinion on the effectiveness of the Town’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of
the Town’s financial statements will not be prevented, or detected and corrected on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe
than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
46
Insero & Co. CPA s, LLP
Rochester | Ithaca | Corning | Cortland | Watkins Glen | (800) 232-9547 | www.inserocpa.com
47
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the Town’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the Town’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Respectfully Submitted,
Insero & Co. CPAs, LLP
Certified Public Accountants
Ithaca, New York
July 2, 2018