HomeMy WebLinkAbout2018 Town AuditTOWN OF CORTLANDVILLE
Cortland, New York
FINANCIAL REPORT
December 31, 2018
TOWN OF CORTLANDVILLE
TABLE OF CONTENTS
Independent Auditors’ 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
Governmental 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 .................................................................................................. 11-37
Required Supplementary Information
Budgetary Comparison Schedule - General Townwide Fund - Non-GAAP Budget Basis ........... 38
Budgetary Comparison Schedule - General Parttown Fund - Non-GAAP Budget Basis .............. 39
Budgetary Comparison Schedule - Highway Parttown - Non-GAAP Budget Basis ...................... 40
Budgetary Comparison Schedule - Water Fund - Non-GAAP Budget Basis ................................. 41
Budgetary Comparison Schedule - Sewer Fund - Non-GAAP Budget Basis ................................. 42
Schedule of Changes in the Town’s Total OPEB Liability and Related Ratios ............................. 43-43a
Schedule of the Town’s Contributions - NYSLRS Pension Plan .................................................... 44-44a
Schedule of the Town’s Proportionate Share of the Net Pension Liability .................................... 45
Notes to Required Supplementary Information ............................................................................... 46-47
Report Required Under Government Auditing Standards
Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards ..................................................................................................... 48-49
INDEPENDENT AUDITORS’ 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, 2018, 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.
Auditors’ 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 auditors’ judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the 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.
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, 2018, 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.
Insero & Co. CPA s, LLP
Rochester | Ithaca | Corning | Cortland | Watkins Glen | (800) 232-9547 | www.inserocpa.com
2
Emphasis of a Matter
During the year ended December 31, 2018, the Town adopted Government Standards Board (GASB)
Statement No. 75, “Accounting and Financial Reporting for Postemployment Benefits Other than
Pensions.” As described in Notes 7 and 18 to the financial statements, December 31, 2017 net position has
been restated to reflect the adoption. Our opinion is not modified with respect to this matter.
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 Changes in the Town’s Total
OPEB Liability and Related Ratios, Schedules of the Town’s Contributions - NYSLRS Pension Plan, 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 38-47, 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 9, 2019 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 9, 2019
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2018
3
Our discussion and analys is 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, 2018. This section
is a summary of the Town’s financial activities based on currently known fa cts, 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 s tatements, 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
$8,212,098 (net position) compared to $8,152,373 in 2017.
❖ The Town adopted Governmental Accounting Standar ds Board (GASB) Statement No. 75,
“Accounting and Financial Reporting by Employers for Postemployment Benefi ts 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 $9,501,791 at December 31, 2018 and
expense recognized amounted to $1,107,625.
❖ During the year ended December 31, 2018 , 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 a decrease of Government-wide expenses of
$6,151.
❖ During the year, the Town had expenses t hat were $59,725 less than the $7,983,935 generated in tax
and other revenues for governmental programs. Comparatively, in the prior year , expenses were
$496,075 less than the $7,402,145 generated in tax and other reve nues for government programs.
❖ The General Funds recorded a de crease in fund balances of $105,358 in 2018. General Funds
combined fund balances at year end were $2,139,687.
❖ The Town’s long-term debt increased $328,700 during the current fiscal year, to a total of
$7,995,800, as a result of a serial bond in the amount of $750,000 being issued , offset by debt
payments of $421,300.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2018
3a
USING THIS ANNUAL REPORT
This annual report consists of a series of basic financial statements. The Statement of Net Position a nd
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 fina ncial 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 inform ation 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 t he 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 decr eases 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 healt h,
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
FOR THE YEAR ENDED DECEMBER 31, 2018
3b
Reporting the Town’s Most Significant Funds
Governmental Fund Financial Statements
Analysis of the Tow n’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 informatio n 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 Fiduciar y 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 f or
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, 2018 increased from $8,152,373
to $8,212,098. A portion of the Town’s net po sition reflects its investment in capital assets (e.g. land,
buildings, machinery, equipment and infrastructure) less any related debt used to acquire those assets
that is still outstanding. The Town has chosen not to report infrastructure assets acquired prior to
January 1, 2003, in accordance with the transition provisions of GASB Statement No. 34. An additional
portion of the Town’s net position represents resources subject to external restrictions on how they may
be used and are reported as restricted. The remaining category of total net position is unrestricted and
may be used to meet the government’s ongoing obligations and services to creditors and citizens.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2018
3c
Our analysis below focuses on the net position (Figure 1), and changes in net position (Figure 2), of
the Town’s Governmental Activities.
Figure 1 - Net Position
Current Assets 6,082,508$ 6,752,288$ 669,780$ 11.0%
Noncurrent Assets 1,991,680 2,027,105 35,425 1.8%
Capital Assets, Net 16,312,983 19,904,835 3,591,852 22.0%
Total Assets 24,387,171 28,684,228 4,297,057 17.6%
Pensions 623,208 780,792 157,584 25.3%
OPEB 214,202 612,005 397,803 185.7%
Total Deferred Outflows
of Resources
Current Liabilities 500,810 3,962,973 3,462,163 691.3%
Noncurrent Liabilities 16,462,114 17,237,430 775,316 4.7%
Total Liabilities 16,962,924 21,200,403 4,237,479 25.0%
Pensions 109,284 664,524 555,240 508.1%
Total Deferred Inflows
of Resources 109,284 664,524
Net Investment in Capital Assets 8,645,883 8,976,727 330,844 3.8%
Restricted 2,057,530 2,089,261 31,731 1.5%
Unrestricted (2,551,040) (2,853,890) (302,850) (11.9)%
Total Net Position 8,152,373$ 8,212,098$ 59,725$ 0.7%
837,410
Governmental Activities Dollar Change Percent Change
2017 - 2018 2017 - 201820172018
18.8%1,392,797 157,584
555,240 508.1%
The increase in current assets is primarily due to an increase in cash on hand based on revenues
exceeding expen ses for the year. Capital assets increased mainly due to capital outlay exceeding
depreciation expenses. Current liabilities in creased due to an increase in BANs payable of $3,000,000.
Noncurrent liabilities increased based on increases in bonds payable and other postemployment benefits
liability, partially offset by a decrease in net pension liability-proportionate share.
Deferred outflows of resource s - pensions and deferred inflows of resources - pensions increased based
on actuarially determined amounts provided the NYSLRS. The increase in d eferred outflows of
resources - OPEB is primarily due to current year implementation and recognition of GASB No. 75 and
changes from the prior year as restated, based on an actuarial valuation of the Town ’s OPEB Plan.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2018
3d
Figure 2 demonstrates the operations of the Town’s Governmental Activities.
Figure 2 - Changes in Net Position
REVENUES
Program Revenues
Charges for Services 2,410,132$ 2,782,982$ 372,850$ 15.5%
Operating Grants and Contributions 363,577 537,928 174,351 48.0%
Capital Grants and Contributions 219,285 195,375 (23,910) (10.9)%
General Revenues
Property Taxes and Tax Items 1,791,899 1,861,848 69,949 3.9%
Nonproperty Taxes 2,454,641 2,544,336 89,695 3.7%
Use of Money and Property 14,048 12,555 (1,493) (10.6)%
Other General Revenues 148,563 48,911 (99,652) (67.1)%
Total Revenues 7,402,145$ 7,983,935$ 581,790$ 7.9%
PROGRAM EXPENSES
General Governmental Support 1,210,374$ 1,847,663$ 637,289$ 52.7%
Public Safety 84,147 60,862 (23,285) (27.7)%
Public Health 3,798 3,543 (255) (6.7)%
Transportation 3,330,852 3,017,038 (313,814) (9.4)%
Economic Assistance and Opportunity 18,000 18,000 - 0.0%
Culture and Recreation 93,743 423,591 329,848 351.9%
Home and Community Services 1,999,235 2,315,198 315,963 15.8%
Interest on Long-term Debt 165,921 238,315 72,394 43.6%
Total Expenses 6,906,070$ 7,924,210$ 1,018,140$ 14.7%
INCREASE IN NET POSITION 496,075$ 59,725$ (436,350)$ (88.0)%
Governmental Activities and
Total Government Dollar Change
Percent
Change
2017 - 2018 2017 - 201820172018
Charges for services in creased primarily based on higher Water and Sewer Fund revenues. Operating
grants and contributions increased primarily due to a significant increase in the Community
Development Grant. Capital grants and contributions decreased due to decreased state aid. Other
general revenues decreased as a result of a $100,000 donation received in 2017, which was not
duplicated in 2018 .
The 2017 general governmental support expenses were unusually low due to the sale of a parcel of land;
the 2018 expense is within historical amounts. Transportation expenditures decreased due to a decrease
in highway maintenance expenditures. The increases in home and community servi ces and culture and
recreation expenses is mainly a result of an increase in non -capitalizable contractual expenses.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2018
3e
Figures 3 and 4 show the sources of revenue for 2018 and 2017.
Figure 3 - Revenue by Source
2018
Charges for
Services
34.85%
Miscellaneous
0.61%
Operating
Grants and
Contributions
6.74%Capital Grants
and
Contributions
2.45%
Use of Money
and Property
0.16%
Nonproperty
Taxes
31.87%
Real Property
Taxes/Items
23.32%
Figure 4 - Revenue by Source
2017
Charges for
Services
32.56%
Miscellaneous
2.01%
Operating
Grants and
Contributions
4.91%
Capital Grants
and
Contributions
2.96%
Use of Money
and Property
0.19%
Nonproperty
Taxes
33.16%
Real Property
Taxes/Items
24.21%
The cost of all Governmental Activities this year was $7,924,210. However, as shown in the Statement
of Activities, the net expense of these activities was $4,407,925, because some of the cost was paid by
those who directly ben efited 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 $3,516,285. The Town paid for the remaining
“public benefit” portion of Governmental Activities with $4,467,650 in taxes and other revenues, such
as interest and general entitlements.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2018
3f
The total cost and revenue comparison of the Governmental Activities for each of the Town’s larg est
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
2018
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
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
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2018
3g
THE TOWN’S FUNDS
As the Town completed the year, its Governmental Funds, as presented in the Balance Sheet on pages 6-
6a, reported a decrease in combined fund balance . The decrease was primarily due to issuance of a
BAN in the am ount of $3,000,000. Figure 7 shows the changes in fund balances during the year for the
Town’s funds.
Figure 7 - Governmental Funds - Fund Balances at Years Ending
General Fund - Townwide 1,466,909$ 1,579,757$ 112,848$
General Fund - Parttown 778,136 559,930 (218,206)
Highway Fund - Parttown 2,009,576 2,437,770 428,194
Water Fund 2,019,632 1,892,945 (126,687)
Sewer Fund 867,548 1,032,793 165,245
Special Grant Fund 322,014 252,595 (69,419)
Capital Projects Fund (166,573) (2,932,308) (2,765,735)
Non-Major Fund 275,140 275,195 55
Totals 7,572,382$ 5,098,677$ (2,473,705)$
Dollar Change
2017 2018 2017 - 2018
The increase in Highway Fund is a result of a decrease in expenditures compared to the prior year while
revenues remained consistent. The decrease in the Capital Projects Fund was due the issuance of a BAN;
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 and other financing sour ces available for appropriation were $198,947 more than the
final budget. Expenditures and other financing uses were $481,149 favorable when compared to
budget due to cost con tainment measures.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2018
3h
CAPITAL ASSETS AND DEB T ADMINISTRATION
Capital Assets
At the end of December 31, 2018, the Town had $39,194,745, less accumulated depreciation of
$19,289,910, invested in a broad range of capital assets, including buildings, machinery and equipment,
roads and bridges.
Figure 8 - Capital Assets, Net of Depreciation
Land 999,252$ 999,252$ -$
Construction in Progress 266,581 4,416,261 4,149,680
Improvements 5,337,170 5,027,297 (309,873)
Buildings 2,456,873 2,349,092 (107,781)
Equipment 1,433,674 1,251,730 (181,944)
Infrastructure 5,819,433 5,861,203 41,770
Totals 16,312,983$ 19,904,835$ 3,591,852$
20182017 2017 - 2018
Governmental Activities and
Total Government Dollar Change
Depreciation expense during the year amounted to $986,765. The Town has not reported any
infrastructure assets prior to 2 003, in accordance with the transition provisions of GASB Statement
No. 34.
Debt Administration
Debt (bonds and BAN s), considered a liability of Governmental Activities, increased, bringing total
debt to $10,995,800 as of December 31, 2018, as shown in Figure 9. Of the amount of bonds an d notes
outstanding, $1,892,873 is subject to the constitutional debt limit and represented 2.69% of the Town’s
statutory debt limit. The Town’s bond rating is currently Aa3 from Moody’s.
Figure 9 - Major Outstanding Debt at Year s Ending
Bond Anticipation Notes -$ 3,000,000$ 3,000,000$ 100.0%
Serial Bonds 7,667,100 7,995,800 328,700 4.3%
Totals 7,667,100$ 10,995,800$ 3,328,700$ 43.4%
Dollar Change
Percent
Change
2017 - 2018201720182017 - 2018
Governmental Activities and Total
Government
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2018
3i
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
• Approved 2019 budget shows an increase in tax rate of $0.21 per $1,000 of assessed value. The Town
Board voted for an override in the tax cap.
• Water benefit tax decreased $.72 per unit and sewer benefit tax increased $.53. The number of units
calculated changes year to year as well as debt being paid down or added. The water units had an
increase in units and the sewer had a decrease in units.
• In 2014, the Town alienated under Home Rule Request a Town Park in exchange of 101 acres signed
by the Governor, Andrew M. Cuomo, on August of 2014, and took effective immediately. The Town
exercised its option in 2017 and began phase I of construction in 2018. The Town received a BAN of
$3,000,000 in January of 2018 to begin phase I of construction. Phase I is to be completed in May of
2019. Grants pending upon completion are as follows:
Capital Grant #AC571/CFA #74852 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 expects to
receive the grants in 2019.
• Construction of a Restroom and Pavilion at the Gutchess Lumber Sports Complex will begin in May of
2019.
• NYS OCR has approved the use of the Town’s uncommitted program income of $84,292, as well as
CDBG loan repayments received by the Town since April 1, 2018, for the purchase of playground
equipment to be installed at the Gutchess Lumber Sports Complex per Town Board Resolution #185,
as of July 11, 2018.
• Construction of a new highway garage began in 2018 and is expected to be completed in 2019. The
Town Board approved a Bond of $750,000 for this project.
• A NYS CDBG Project #287SB902-18 Economic Development/Small Business Program Award for
program Year 2018 awarded $100,000 to Royal Nissan of Cortland Inc. Additionally, local program
income of $108,800 was loaned to Royal Nissan of Cortland Inc.
CONTACTING THE TOWN’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors
with a general overview of the Town’s finances and to show the Tow n’s accountability for the money it
receives. If you have questions about the report or need any addi tional financial information contact
Richard Tupper, Supervisor, Town of Cortlandville, at 3577 Terrace Road, Cortlandville, New York
13045.
TOWN OF CORTLANDVILLE
4
Governmental
Activities
ASSETS
Current Assets
Cash and Cash Equivalents 5,869,798$
Taxes Receivable, Net 28,233
Due from Other Governments 648,796
Other Receivables, Net 18,532
Prepaid Expenses 124,773
Loans Receivable, Current Portion 62,156
Total Current Assets 6,752,288
Noncurrent Assets
Restricted Cash and Cash Equivalents 1,598,976
Loans Receivable, Long-term Portion 428,129
Capital Assets, Non-Depreciable 5,415,513
Other Capital Assets, Net of Accumulated Depreciation 14,489,322
Total Noncurrent Assets 21,931,940
Total Assets 28,684,228
DEFERRED OUTFLOWS OF RESOURCES
Pensions 780,792
OPEB 612,005
Total Deferred Outflows of Resources 1,392,797
LIABILITIES
Current Liabilities
Accounts Payable 288,529
Bond Anticipation Notes Payable 3,000,000
Interest Payable 125,811
Overpayments 84,333
Current Portion of Noncurrent Obligations:
Bonds Payable 464,300
Total Current Liabilities 3,962,973
Noncurrent Liabilities and Obligations
Bonds Payable 7,531,500
Other Postemployment Benefits Liability 9,501,791
Net Pension Liability - Proportionate Share 204,139
Total Noncurrent Liabilities 17,237,430
Total Liabilities 21,200,403
DEFERRED INFLOWS OF RESOURCES
Pensions 664,524
Total Deferred Inflows of Resources 664,524
NET POSITION
Net Investment in Capital Assets 8,976,727
Restricted 2,089,261
Unrestricted (2,853,890)
Total Net Position 8,212,098$
STATEMENT OF NET POSITION
DECEMBER 31, 2018
See Notes to Financial Statements
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 1,847,663$ 199,393$ 208,404$ $ (1,439,866)$
Public Safety 60,862 249,061 188,199
Public Health 3,543 (3,543)
Transportation 3,017,038 26,755 195,375 (2,794,908)
Economic Assistance and Opportunity 18,000 (18,000)
Culture and Recreation 423,591 (423,591)
Home and Community Services 2,315,198 2,307,773 329,524 322,099
Interest on Long-term Debt 238,315 (238,315)
Total Governmental Activities 7,924,210$ 2,782,982$ 537,928$ 195,375$ (4,407,925)
Real Property Taxes 1,809,635
Real Property Tax Items 52,213
Nonproperty Tax Items 2,544,336
Use of Money and Property 12,555
Sale of Property and Compensation for Loss 13,654
Miscellaneous Local Sources 35,257
4,467,650
59,725
8,152,373
8,212,098$
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2018
GENERAL REVENUES
Total General Revenues
Change in Net Position
Net Position - Beginning
Net Position - Ending
See Notes to Financial Statements
FUNCTIONS/PROGRAMS
Program Revenues
TOWN OF CORTLANDVILLE
6
General General
Townwide Parttown
Fund Fund
Cash and Cash Equivalents - Unrestricted 1,524,114$ 293,102$
Cash and Cash Equivalents - Restricted 112,933 20,660
Taxes Receivable (Net)28,233
Due from Other Funds
Due from Other Governments 250,000
Other Receivables, Net
Prepaid Expenses 40,384 3,753
Loans Receivable
Total Assets 1,705,664$ 567,515$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities
Accounts Payable 13,341$ 7,585$
Due to Other Funds 28,233
Other Liabilities 84,333
BAN Payable
Total Liabilities 125,907 7,585
Unavailable Revenues
Total Deferred Inflows of Resources --
FUND BALANCES
Nonspendable 40,384 3,753
Restricted 112,933 20,660
Assigned 472,916 49,600
Unassigned 953,524 485,917
Total Fund Balances 1,579,757 559,930
Total Liabilities, Deferred Inflows of Resources, and Fund Balances 1,705,664$ 567,515$
See Notes to Financial Statements
ASSETS
Deferred Inflows of Resources
Major Funds
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2018
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
1,668,943$ 777,902$ 580,383$ $750,159$ 275,195$ 5,869,798$
388,609 402,821 421,358 252,595 1,598,976
28,233
695,739 14,961 710,700
398,796 648,796
14,100 2,372 2,060 18,532
47,887 18,718 14,031 124,773
490,285 490,285
2,518,335$ 1,897,552$ 1,032,793$ 742,880$ 750,159$ 275,195$ 9,490,093$
80,565$ 4,607$ $ $ $ $106,098$
682,467 710,700
84,333
3,000,000 3,000,000
80,565 4,607 - -3,682,467 -3,901,131
490,285 490,285
---490,285 --490,285
47,887 18,718 14,031 124,773
388,609 402,821 421,358 252,595 1,598,976
2,001,274 1,471,406 597,404 275,195 4,867,795
(2,932,308)(1,492,867)
2,437,770 1,892,945 1,032,793 252,595 (2,932,308) 275,195 5,098,677
2,518,335$ 1,897,552$ 1,032,793$ 742,880$ 750,159$ 275,195$ 9,490,093$
Special Revenue Funds
Major Funds
TOWN OF CORTLANDVILLE
7
Total Governmental Fund Balances 5,098,677$
19,904,835
(204,139)
Deferred Inflows of Resources - Unavailable Revenue 490,285$
Deferred Inflows of Resources - Pension (664,524)
Deferred Outflows of Resources - Pension 780,792
Deferred Outflows of Resources - OPEB 612,005 1,218,558
Retainage Payable (182,431)$
Accrued Interest Payable (125,811) (308,242)
Other Postemployment Benefits Liability (9,501,791)$
Bonds Payable (7,995,800) (17,497,591)
Net Position of Governmental Activities 8,212,098$
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 OPEB and 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.
See 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, 2018
TOWN OF CORTLANDVILLE
8
General General
Townwide Parttown
Fund Fund
REVENUES
Real Property Taxes 1,186,032$ 202,379$
Real Property Tax Items 52,213
Nonproperty Tax Items 115,051 250,000
Departmental Income 2,564 70,665
Intergovernmental Charges 14,603
Use of Money and Property 396 5,209
Licenses and Permits 10,787
Fines and Forfeitures 248,661
Sale of Property and Compensation for Loss 241
Miscellaneous Local Sources 538
State Sources 189,868 18,536
Federal Sources 215
Total Revenues 1,821,169 546,789
EXPENDITURES
Current
General Governmental Support 1,152,411 46,427
Public Safety 60,759
Public Health 2,075
Transportation 234,501
Economic Assistance and Opportunity 18,000
Culture and Recreation 300 159,918
Home and Community Services 20,696 213,713
Employee Benefits 441,163 88,132
Debt Service
Principal 60,000
Interest 25,488
Capital Outlay
Total Expenditures 2,013,318 510,265
Excess of Revenues (Expenditures)(192,149) 36,524
OTHER FINANCING SOURCES (USES)
Interfund Transfers In 304,997
Interfund Transfers (Out)(254,730)
Proceeds of Obligations
Total Other Financing Sources (Uses)304,997 (254,730)
Net Changes in Fund Balances 112,848 (218,206)
Fund Balances, Beginning 1,466,909 778,136
Fund Balances, Ending 1,579,757$ 559,930$
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2018
See Notes to Financial Statements
Major Funds
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
421,224$ 211,816$ 308,965$ $ $ $2,330,416$
52,213
2,294,336 2,659,387
838,080 948,912 70,298 1,930,519
726 15,329
390 392 206 5,392 515 55 12,555
10,787
248,661
29,636 29,877
5,716 14,400 20,654
222,130 430,534
329,309 329,524
2,973,432 1,050,288 1,258,809 404,999 14,915 55 8,070,456
1,198,838
60,759
2,075
2,081,943 2,316,444
18,000
160,218
781,528 663,956 352,418 2,032,311
463,295 97,848 26,943 1,117,381
164,384 196,916 421,300
47,432 96,684 169,604
3,797,231 3,797,231
2,545,238 1,091,192 984,499 352,418 3,797,231 - 11,294,161
428,194 (40,904) 274,310 52,581 (3,782,316) 55 (3,223,705)
23,110 266,581 594,688
(85,783)(109,065)(145,110)(594,688)
750,000 750,000
-(85,783) (109,065) (122,000) 1,016,581 -750,000
428,194 (126,687) 165,245 (69,419) (2,765,735) 55 (2,473,705)
2,009,576 2,019,632 867,548 322,014 (166,573)275,140 7,572,382
2,437,770$ 1,892,945$ 1,032,793$ 252,595$ (2,932,308)$ 275,195$ 5,098,677$
Special Revenue Funds
Major Funds
TOWN OF CORTLANDVILLE
9
Net Change in Fund Balances - Total Governmental Funds (2,473,705)$
Capital Outlay 4,594,840$
Depreciation Expense (986,765)
Net Book Value of Disposed Assets (16,223) 3,591,852
ERS 6,151
Loans Issued 81,187$
Repayments (70,298)10,889
Proceeds of Obligations (750,000)$
Debt Principal Payments 421,300 (328,700)
Change in Retainage Payable (182,431)$
Change in Interest Payable (68,711)(251,142)
Other Postemployment Benefits Liability (495,620)
Change in Net Position of Governmental Activities 59,725$
RECONCILIATION OF GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
Cash outflows of resources 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.
See 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, 2018
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 of resources and deferred inflows of resources 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.This is the change reported in the Statement of
Activities.
TOWN OF CORTLANDVILLE
10
FIDUCIARY FUNDS
Agency
Funds
ASSETS
Cash
Unrestricted 71,701$
Total Assets 71,701$
LIABILITIES
Other Liabilities 71,701$
Total Liabilities 71,701$
DECEMBER 31, 2018
STATEMENT OF FIDUCIARY NET POSITION
See Notes to Financial Statements
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
11
Note 1 Summary of Significant Accounting Policies
The basic fin ancial statements of the Tow n of Cortlandville (Town) have been prepared in
conformity with generally accepted accounting principles (GAAP) as applied to government
units. The Governmental Accounting Standards Bo ard (GASB) is the accepted standard
setting body for establishing govern mental accounting and financial reporting principles.
The significant government's accounting policies are descri bed 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 2018, 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,” GASB Statement No. 61, “The Financial
Reporting Entity: Omnibus - an Amendment to GASB Statements No. 14 and No. 34,” and
GASB Statement No. 85, “Omnibus 2017.”
• 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 relati onship with the
primary government are such that exclus ion would cause the reporting entity's basic
financial statements to be mislea ding 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 No. 39, No. 61, and No.
85 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
DECEMBER 31, 2018
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 (repo rting the Town's funds). The
Government-wide and Governmental Fund financial statements categorize primary activities
as governmental. The Town's general governmental s upport, public safety, pu blic health
transportation, economic assistance, culture and r ecreation, and home and communit y
services are classifi ed 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 bot h 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 particu lar function. These expenses are offset by program revenues - charges
paid by the recipients of the goods or services offe red by the programs, grants, and
contributions - that are restricted to meeting the program or capital requirements of a
particular program. Revenues which are not clas sified as program revenue s are presented as
general revenues of the Town, with certain limited exceptions. The net cos t 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
DECEMBER 31, 2018
13
Note 1 Summary of Significant Accounting Policies - Continued
Governmental Fund Financial Statements
The financial transactions of the Town are reported in indi vidual funds in the fund financial
statements. Each fund is a ccounted for by providing a separate set of self-balancing accounts
that comprise its assets, liabilities, reserves, fund equity, rev enues 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
DECEMBER 31, 2018
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 Funds:
• 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 a ssets, as well as infrastructure assets and long-term
liabilities, are included in the accompanying Statement of Net Position. The S tatement of
Activities presents chan ges in net position. Un der the accrual basis of accounting, revenues
are recognized when earned and expenses are recognized when incurred.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
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 thi s basis of accounting, revenues are recorded when measu rable 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, an d 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 tha t are deemed
collectible within one year after year end are recognized as revenues in the current year. If
expenditures are the prim e 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 Cortland 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% ta x collection. Responsibility for th e
collection of unpaid taxes rests with the county. Uncollected tax liens are sold ann ually 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
DECEMBER 31, 2018
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. Unearn ed revenues arise when resources are received by the Town
before it has legal claim to them, as when grant monies are received prior to t he incidence of
qualifying ex penditures. In subsequent periods, when the Town has lega l claim to the
resources, the li ability for unearned revenues is removed and revenues are recorded.
Deferred Inflows and Deferred Ou tflows 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 tha t applies to a future period and wil l
not be recognized as an out flow of resources (expense/expenditure) until then. The Town
reports deferred outflows of resources related to pensions and other postemployment benefits
in the Statement of Net Position. The types of deferred outflows of resources related to
pensions and other postemployment benefits are described in Notes 6 and 7, respectively.
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, 2018, the Town’s deferred inflows of resources related to revenues consisted of
$490,285 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
DECEMBER 31, 2018
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 classifi ed 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 o f any
bonds, mortgages, notes, or other borrowings that are attributable to the acquisition,
construction, or improvement o f those assets.
• Restricted - Consists of resources wit h constraints placed on the use either by 1) external
groups such as creditors , grantors, contributors, or la ws or regulations of other
governments; or 2) law through constitutional provisions or enabl ing legislation.
• Unrestricted - Consists of all other resources which do not meet the definition of
"restricted" or "invested in cap ital assets, net of related deb t."
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
DECEMBER 31, 2018
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 Town Board 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. Town management 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 i nterfund receivables and payables as appropriate and are subject to
elimination upon consolidation. Servic es provided, deemed to be at market or near market
rates, are treated as revenues and expendit ures/expenses. Reimbursements o ccur when one
fund incurs a cost, charges the appropriate benefiting fund and reduces its related cos t as a
reimbursement. All other interfund transactions are treated as transfers. Transfers between
Governmental Funds are netted as part of the reconcili ation to the Government -wide
financial statements.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
19
Note 1 Summary of Significant Accounting Policies - Continued
Revenues
Substantially all governmental fund revenues a re accrued. Property tax receivables expected
to be received later than 60 days after year end are deferred. In applying GASB State ment
No. 33 to grant revenues , the provider recognizes liabilities and expenses and the recipient
recognizes receivables and revenue when the applicable el igibility requirements, including
time requirements, are met. Resources transmitted before the eligi bility requirements are met
are reported as advances by the provider and unearned revenue by the recipient.
Restricted Resources
When an expense is incu rred for purposes for w hich 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.
New Accounting Standards
The Town has adopted and implemented the following Statements of the Governmental
Accounting Standards Board (GASB) that are applicable as of December 31, 2018:
• GASB has issued Statement No. 75, “Accounting and Financial Reporting for
Postemployment Benefits Other than Pensions,” effective for the year ended 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. 85, “Omnibus 2017,” effective for the year ended December
31, 2018.
• GASB has issued Statement No. 86, “Certain Debt Extinguishment Issues,” effective for the
year ended December 31, 2018.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
20
Note 1 Summary of Significant Accounting Policies - Continued
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. 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. 87, “Leases,” effective for the year ending December 31,
2021.
• GASB has issued Statement No. 88, “Certain Disclosures Related to Debt, Including Direct
Borrowings and Direct Placements,” effective for the year ending June 30, 2020. This
statement improves the information that is disclosed in the notes to government financial
statements related to debt, including direct borrowings and direct placements.
• GASB has issued Statement No. 89, “Accounting for Interest Cost Incurred Before the End of
a Construction Period,” effective for the year ending June 30, 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 In surance 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 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.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
21
Note 2 Cash and Investments - Continued
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 th e Town does not have a specific policy for custodi al credit
risk, New York State statutes govern the Town’s investment policies, as discussed
previously.
GASB Statement No. 40 directs that d eposits be disclosed as exposed to c ustodial 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 $7,607,218 are either insured or collateralized with
securities held by the pledging fi nancial institution in the Town’s name.
Restricted Cash
Total restricted cash of $1,598,976 is composed of $1,186,008 reserved for capital purposes,
$82,829 reserved for insurances, $252,595 for community development, $1,646 for other
purposes and $75,898 reserved for retirement contributions.
Note 3 Property Taxes
At December 31, 2018, total real property taxes receivable was $28,233. No allowance for
uncollectible taxes has been reported, as all property taxes are deemed collectible.
Note 4 Other Receivables
Other receivables at December 31, 2018 were as follows:
Description Amount
Highway - Parttown Sale of Equipment 14,100$
Water Fund Rents 2,372
Sewer Fund Rents 2,060
Total 18,532$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
22
Note 5 Capital Assets
A summary of changes in capital assets at December 31, 2018 is as follows:
Deletions/Balance at
Governmental Activities Additions Reclassifications 12/31/2018
Non-Depreciable Capital Assets:
Land 999,252$ $$999,252$
Construction in Progress 266,581 4,161,531 (11,851) 4,416,261
Total Non-Depreciable Capital Assets 1,265,833 4,161,531 (11,851) 5,415,513
Depreciable Capital Assets:
Buildings 4,389,375 (159,149) 4,230,226
Improvements 6,193,604 6,193,604
Machinery and Equipment 5,417,634 145,070 (253,613) 5,309,091
Infrastructure 17,746,221 288,239 11,851 18,046,311
Total Depreciable Capital Assets 33,746,834 433,309 (400,911) 33,779,232
Total Historical Cost 35,012,667 4,594,840 (412,762) 39,194,745
Less Accumulated Depreciation:
Buildings 1,932,502 91,558 (142,926) 1,881,134
Improvements 856,434 309,873 1,166,307
Machinery and Equipment 3,983,960 327,014 (253,613) 4,057,361
Infrastructure 11,926,788 258,320 12,185,108
Total Accumulated Depreciation 18,699,684 986,765 (396,539) 19,289,910
Governmental Activities Capital Assets, Net 16,312,983$ 3,608,075$ (16,223)$ 19,904,835$
Balance at
12/31/17
Depreciation expense was charged to funct ions as follows:
General Governmental Support 70,010$
Public Safety 103
Transportation 297,826
Culture and Recreation 84,766
Home and Community Services 534,060
Total 986,765$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
23
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.
Generally, Tiers 3, 4, and 5 members must contribute 3% of their salary to the System. As a
result of Article 19 of the RSSL, eligible Tiers 3 and 4 employees, with a membership date on
or after July 2 7, 1973, who have ten or more years of membership or credited service with the
System, are not required to contribute. Members cannot be required to begin making
contributions or to make increased contributions beyond what was required when membership
began. For Tier 6 members, the contribution rate varies from 3% to 6% depending on salary.
Generally, Tier 5 and 6 members are required to contribute for all years of service.
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. 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:
2018 2017 2016
ERS $ 281,685 $ 275,760 $ 354,575
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
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
At December 31, 2018, 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,
2018. 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 reports provided to the Town by the ERS System.
ERS
Actuarial Valuation Date 4/1/2017
Net Pension Liability $ 3,227,444,946
Town's Proportionate Share of the
Plan's Total Net Pension Liability 204,139
Town's Share of the Plan's
Total Net Pension Liability 0.0063251%
For the year ended December 31, 2018, the Town recognized pension expense of $271,413 for
ERS in the financial statements. At December 31, 2018, the Town reported deferred outflows
of resources and deferred inflows of resources related to the pensions from the following
sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences Between Expected and Actual Experience $ 72,810 $ 60,167
Changes of Assumptions 135,361
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 $ 780,792 $ 664,524
19,104
207,144
296,496 585,253
68,981
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
25
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
Town contributions subsequent to the measurement date, reported as deferred outflow s 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 pensio n expense as follows:
Year Ending ERS
2019 68,319$
2020 48,631
2021 (143,913)
2022 (63,913)
2023 -
Thereafter -
Actuarial Assumptions
The total pension liability as of the measurement date was deter mined by using an actuarial
valuation as noted in the table below, with update procedur es used to roll forward the total
pension liability to the measurement da te. The actuarial valuations used the following
actuarial assumptions:
ERS
Measurement Date March 31, 2018
Actuarial Valuation Date April 1, 2017
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 morta lity improvements based on MP-2014.
The actuarial assumptions used in the April 1, 201 7 valuation are based on the results of an
actuarial experience study for the period April 1, 2010 - March 31, 2015.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
26
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS)
(the System) - Continued
Actuarial Assumptions - Continued
The long term rate of return on pension plan investments was determined using a building
block method in which best estimate ranges of expected future r eal rates of return (ex pected
returns net of investment expense and inflation) are developed for ea ch major asset class.
These ranges are combined to produce the long term ex pected rate of return by weighting the
expected future real rates of return by ea ch the target asset allocation percentage and by
adding expected inflation. Best estimates of the arithmetic real rates of return for each major
asset class in cluded in the t arget asset allocation are summarized below:
ERS
Measurement Date March 31, 2018
Asset Type:
Domestic Equities 4.6%
International Equities 6.4%
Real Estate 5.6%
Private Equity/Alternative Investments 7.5%
Absolute Return Strategies 3.8%
Opportunistic Portfolio 5.7%
Real Assets 5.3%
Cash (0.3%)
Inflation-indexed Bonds 1.3%
Mortgages and Bonds 1.3%
Discount Rate
The discount rate used to calculate the total pensi on 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 p ayments 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.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
27
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS) -
Continued
Discount Rate - Continued
The following presents the Town’s proporti onate 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 1,544,572$ 204,139$ (929,813)$
Net Pension Liability (Asset)
ERS
1% Increase
(8.0%)
Pension Plan Fiduciary Net Posi tion
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, 2018
Employers' Total Pension Liability 183,400,590$
Plan Net Position (180,173,145)
Employers’ Net Pension Liability 3,227,445$
Ratio of Plan Net Position to the
Employers' Total Pension Liability 98.2%
Payables to the Pension Plans
For ERS, employer contributions are paid annually based on the System’s fiscal year which
ends on March 31 st. Accrued retirement contributions as of December 31, 2018 represent the
projected employer contribution for the period of April 1, 2017 through December 31, 2018
based on estimated ERS wages multiplied by the employer’s contribution rate, by tier.
Accrued retirement contributions as of December 31, 2018 amounted to $-0-.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
28
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS) -
Continued
Effect on Net Position
Changes in the net pension liability and deferred outflows and inflows of resources for the
year ended December 31, 2018 resulted in the following effect on net position:
Beginning Ending
Balance Change Balance
ERS
Net Pension Liability (607,946)$ 403,807$ (204,139)$
Deferred Outflows of Resources 623,208 157,584 780,792
Deferred Inflows of Resources (109,284) (555,240) (664,524)
Total (94,022)$ 6,151$ (87,871)$
Note 7 Other Postemployment Benefits
Postemployment Benefits Other than Pensions
During the year ended December 31, 2018, the Town implemented GASB 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.”
General Information about the OPEB Plan
Plan Description - The Town provides medical and Medicare Part B benefits to retired
employees and their eligible dependents. The benefits provided to employees upon retirement
are based on provisions in various contracts that the Town has in place with different
classifications of employees. No assets are accumulated in a trust that meets the criteria in
paragraph 4 of GASB Statement No. 75. The Plan does not issue separate financial statements,
as there are no assets legally segregated for the sole purpose of paying benefits under the plan.
Benefits Provided - The Town provides healthcare benefits for eligible retirees and their
spouses. Benefit terms are dependent of which contract each employee falls under. The
specifics of each contract are on file at the Town offices and are available upon request.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
29
Note 7 Other Postemployment Benefits - Continued
General Information about the OPEB Plan - Continued
Employees Covered by Benefit Terms - At December 31, 2018, the following employees were
covered by the benefit terms:
Inactive Employees or Beneficiaries
Currently Receiving Benefit Payments 18
Active Employees Fully
Eligible for Benefits 39
Single Discount Rate 3.4%
Rate of Compensation Increase 3.5%
Inflation Rate 2.2%
Total OPEB Liability
The Town’s total OPEB liability of $9,501,791 was measured as of December 31, 2018, and
was determined by an actuarial valuation as of January 1, 2017.
Actuarial Assumptions and Other Inputs - The total OPEB liability in the December 31, 2018
actuarial valuation was determined using the following actuarial assumptions and other inputs,
applied to all periods included in the measurement, unless otherwise specified:
Total OPEB
Liability
Balance at December 31, 2017 8,608,368$
Changes for the Year
Service Cost 305,831
Interest Cost 332,908
Changes of Benefit Terms -
Differences Between Expected and Actual Experience -
Changes in Assumptions or Other Inputs 468,886
Benefit Payments (214,202)
893,423
Balance at December 31, 2018 9,501,791$
Mortality rates were based on the Scale MP-2014 and projected forward with Scale MP-2017
(generational mortality) published by the pension mortality study released by the Society of
Actuaries.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
30
Note 7 Other Postemployment Benefits - Continued
Total OPEB Liability - Continued
Termination rates were based on the experience under the NYS and Local Retirement System.
Retirement rates are based on the experience under the New York State and Local Retirement
System.
The actuarial assumptions used in the January 1, 2017 valuation were consistent with the
requirements of GASB Statement No. 75 and Actuarial Standards of Practice (ASOPs).
Sensitivity of the total OPEB liability to changes in the discount rate - The following presents
the total OPEB liability of the Town as well as what the Town’s total OPEB liability would be
if it were calculated using a discount rate that is 1 - percentage-point lower (2.44%) or 1-
percentage-point higher (4.44%) than the current discount rate:
1% Decrease
(2.44%)
Discount Rate
(3.44%)
1% Increase
(4.44%)
Total OPEB Liability 11,106,652$ 9,501,791$ 8,215,651$
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rate - The
following presents the total OPEB liability of the Town, as well as what the Town’s total OPEB
liability would be if it were calculated using a healthcare cost trend rate that is 1 percentage
point lower or 1 percentage point higher than the current healthcare cost trend rate:
Total OPEB Liability 8,023,253$ 9,501,791$ 11,383,440$
1% Decrease
Healthcare
Cost Trend
Rate 1% Increase
For the year ended December 31, 2018, the Town recognized OPEB expense of $1,107,625.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
31
Note 7 Other Postemployment Benefits - Continued
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB
At December 31, 2018, the Town reported deferred outflows of resources and deferred inflows
of resources related to OPEB from the following sources:
Differences Between Expected and Actual Experience -$ -$
Changes in Assumptions or Other Inputs 382,216 -
Contributions Subsequent to Measurement Date 229,789 -
Total 612,005$ -$
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Amounts reported as deferred outflows of resources and deferred inflows of resources related to
OPEB will be recognized in OPEB expense as follows:
Fiscal Year
Ending December 31, Amount
2019 86,670$
2020 86,670
2021 86,670
2022 86,670
2023 and Thereafter 35,536
Current Year Activity
The following is a summary of current year activity:
Beginning Ending
Balance Change Balance
Other Postemployment Benefits Liability 8,608,368$ 893,423$ 9,501,791$
Deferred Outflows of Resources (214,202) (397,803) (612,005)
Total Effect on Net Position 8,394,166$ 495,620$ 8,889,786$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
32
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.
Changes in short-term debt outstanding are as follows:
Payable at Payable at
12/31/2017 Issued Redeemed 12/31/2018
Bond Anticipation Notes -$ 3,000,000$ -$ 3,000,000$
Interest expense on short-term debt for fiscal year 2018 was $-0-. BANs redeemed from
appropriations totaled $-0-.
Note 9 Long-term Debt
At December 31, 2018, the total outstanding indebtedness of the Town aggregated $7,995,800.
Of this amount, $1,892,873 was subject to the constitutional debt limit and represented 2.69% 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
DECEMBER 31, 2018
33
Note 9 Long-term Debt - Continued
Debt Maturity Schedule
The following is a summary of bonds outstanding at December 31, 2018 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 939,000$
Town Hall Building 2007 275,000 4.57%2026 220,000
Town Hall Expansion 2006 325,000 4.57%2026 260,000
NYSEFC Sewer Improvements 2005 1,475,000 2.48%2035 1,355,000
Sewer Refunding 2004 110,464 2.50-4.00%2020 54,127
Water Refunding 2004 389,536 2.50-4.00%2020 190,873
Sewer Improvements 1982 12,400 5.00%2019 3,800
Route 13 Sewer Project 2016 2,754,000 1.63%2053 2,643,000
Public Improvements 2017 1,675,000 2-3.00%2032 1,580,000
Highway Garage Project 2018 750,000 3.95%2038 750,000
Total 7,995,800$
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
2019 464,300$ 187,679$ 651,979$
2020 462,500 174,041 636,541
2021 342,500 165,683 508,183
2022 349,500 153,641 503,141
2023 355,500 144,496 499,996
2024-2028 1,755,500 581,601 2,337,101
2029-2033 1,621,500 363,574 1,985,074
2034-2038 904,500 201,891 1,106,391
2039-2043 568,000 128,309 696,309
2044-2048 620,000 77,098 697,098
2049-2053 552,000 24,966 576,966
Total 7,995,800$ 2,202,979$ 10,198,779$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
34
Note 9 Long-term Debt - Continued
Changes in Indebtedness
The following is a summary of changes in the Town’s indebtedness for the ye ar ended December
31, 2018:
Balance Maturities/Balance
Governmental Activities 12/31/2017 Payments 12/31/2018
General Obligation Bonds 7,667,100$ 750,000$ (421,300)$ 7,995,800$ 464,300$
Total 7,667,100$ 750,000$ (421,300)$ 7,995,800$ 464,300$
Amount Due
Within One Year
New Issues/
Additions
Interest Paid on Short-term and Long-term Debt 169,604$
Prior Year Accrued Interest (57,100)
Current Year Accrued Interest 125,811
Interest Expense 238,315$
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 t he effects of
transient cash flow issues. All interfund payables are expected to be repaid within one ye ar.
Interfund receivable and payable balances at December 31, 2018 are as follows:
Interfund Interfund Interfund Interfund
Receivables Payables Revenue Expense
General Fund - Townwide $28,233$ 304,997$ $
General Fund - Parttown 254,730
Water Fund 695,739 85,783
Sewer Fund 14,961 109,065
Special Grant Fund 23,110 145,110
Capital Projects Fund 682,467 266,581 -
Total 710,700$ 710,700$ 594,688$ 594,688$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
35
Note 11 Reconciliation Between Restricted Fund Balance and Restricted Net Position
Restricted Fund Balance in Governmental Fund Financial Statements 1,598,976$
Reconciling Item: Special Grant Fund Deferred Inflows of Resources 490,285
Restricted Net Position in the Government-Wide Financial Statements 2,089,261$
Note 12 Fund Balance Detail
At December 31, 2018, nonspendable, restricted and as signed 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 Fund
Nonspendable
Prepaid Expenses 40,384$ 3,753$ 47,887$ 18,718$ 14,031$ $ $
Total Nonspendable
Fund Balance 40,384$ 3,753$ 47,887$ 18,718$ 14,031$ -$ -$
Restricted
Unemployment
Insurance Reserve 82,829$ $$$$$$
Retirement
Contribution Reserve 30,104 19,014 353 13,025 13,402
Other 1,646 252,595
Capital Reserve 388,256 389,796 407,956
Total Restricted
Fund Balance 112,933$ 20,660$ 388,609$ 402,821$ 421,358$ 252,595$ -$
Assigned
Appropriated for Next
Year’s Budget 472,916$ 49,600$ 800,000$ $ 41,827$ $275,062$
Remaining
Fund Balance 1,201,274 1,471,406 555,577 133
Total Assigned
Fund Balance 472,916$ 49,600$ 2,001,274$ 1,471,406$ 597,404$ -$ 275,195$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
36
Note 13 Restricted Fund Balances
Portions of fund balance are restricted and are not available for current expenditures as
reported in the Governmental F unds Balance Sheet. The balances and activity for the year
ended December 31, 2018 of the Governmental Funds reserves were as follows:
Beginning Interest Ending
Balance Additions Earned Appropriated Balance
Unemployment Insurance Reserve 83,600$ $17$ (788)$ 82,829$
Retirement Contribution Fund Reserve 75,888 10 75,898
Miscellaneous Reserve 1,645 1 1,646
Capital Reserve 1,094,987 90,800 221 1,186,008
Special Grant Fund 322,014 428,109 (497,528) 252,595
Total Restricted Fund Balance 1,578,134$ 518,909$ 249$ (498,316)$ 1,598,976$
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 wa ste site located in the Town.
The site was closed using grant funds at no cost to the Town. Monit oring 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 fin ancial statements due to the uncertainty regarding th e amount for which
the Town will be responsible.
Note 16 Stewardship, Compliance and Accountability
Deficit Fund Balance
At December 31, 2018, the Capital Projects Fund had a deficit fund balance of $(2,932,308). This
deficit will be eliminated as short-term debt is converted to long-term debt.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
37
Note 17 Tax Abatements
For the year ended December 31, 2018, the Town was subject to tax abatements negotiated by
the Cortland County Industrial Development Agency (CCIDA). Abatement agreements entered
into by CCIDA reduce property taxes collected by the Town.
Information relevant to disclosure of the program for the year ended December 31, 2018 is as
follows:
Amount of
Tax Abatement Program Taxes Abated
Economic Development:
Real Property Tax 21,144$
Total 21,144$
Note 18 Restatement
Net Position Beginning of Year 13,639,459$
GASB Statement No. 75 Implementation
Beginning OPEB Plan Liability (5,487,086)
Net Position Beginning of Year, as Restated 8,152,373$
Note 19 Subsequent Event
On January 30, 2019, the Town renewed a $3,000,000 BAN due January 30, 2020 at an interest
rate of 3.0%.
TOWN OF CORTLANDVILLE
38
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 1,186,032$ 1,186,032$ 1,186,032$ -$
Real Property Tax Items 49,000 49,000 52,213 3,213
Nonproperty Tax Items 110,000 110,000 115,051 5,051
Departmental Income 3,000 3,000 2,564 (436)
Intergovernmental Charges 14,603 14,603
Use of Money and Property 396 396
Licenses and Permits 10,500 10,500 10,787 287
Fines and Forfeitures 266,000 266,000 248,661 (17,339)
Sale of Property and Compensation for Loss 241 241
Miscellaneous Local Sources 538 538
State Sources 141,000 141,000 189,868 48,868
Federal Sources 200 200 215 15
Total Revenues 1,765,732 1,765,732 1,821,169 55,437
EXPENDITURES
Current
General Governmental Support 1,250,474 1,308,649 1,152,411 156,238
Public Safety 76,500 76,500 60,759 15,741
Transportation 295,490 295,490 234,501 60,989
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 44,160 20,696 23,464
Employee Benefits 491,949 492,736 441,163 51,573
Debt Service (Principal and Interest)85,488 85,488 85,488 -
Total Expenditures 2,245,331 2,329,453 2,013,318 316,135
Excess of Revenues (Expenditures) (479,599) (563,721) (192,149) 371,572
OTHER FINANCING SOURCES (USES)
Interfund Transfers In 182,997 182,997 304,997 122,000
Total Other Financing Sources (Uses)182,997 182,997 304,997 122,000
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)(296,602) (380,724) 112,848 493,572$
Appropriated Fund Balance 296,602 380,724
Net Change in Fund Balance -$ -$ 112,848
Fund Balance, Beginning 1,466,909
Fund Balance, Ending 1,579,757$
BUDGETARY COMPARISON SCHEDULE
GENERAL TOWNWIDE FUND - NON-GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2018
See Notes to Required Supplementary Information
TOWN OF CORTLANDVILLE
39
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 202,379$ 202,379$ 202,379$ -$
Nonproperty Tax Items 250,000 250,000 250,000 -
Departmental Income 49,900 49,900 70,665 20,765
Use of Money and Property 4,000 4,000 5,209 1,209
State Sources 19,000 19,000 18,536 (464)
Total Revenues 525,279 525,279 546,789 21,510
EXPENDITURES
Current
General Governmental Support 69,000 68,609 46,427 22,182
Public Health 3,000 3,000 2,075 925
Culture and Recreation 250,272 238,606 159,918 78,688
Home and Community Services 254,662 266,719 213,713 53,006
Employee Benefits 98,345 98,345 88,132 10,213
Total Expenditures 675,279 675,279 510,265 165,014
Excess of Revenues (Expenditures) (150,000) (150,000) 36,524 186,524
OTHER FINANCING SOURCES (USES)
Interfund Transfers (Out)(254,730) (254,730) -
Total Other Financing Sources (Uses)-(254,730) (254,730) -
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)(150,000) (404,730) (218,206) 186,524$
Appropriated Fund Balance 150,000 404,730
Net Change in Fund Balance -$ -$ (218,206)
Fund Balance, Beginning 778,136
Fund Balance, Ending 559,930$
BUDGETARY COMPARISON SCHEDULE
GENERAL PARTTOWN FUND - NON-GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2018
See Notes to Required Supplementary Information
TOWN OF CORTLANDVILLE
40
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 421,224$ 421,224$ 421,224$ -$
Nonproperty Tax Items 1,970,000 1,970,000 2,294,336 324,336
Use of Money and Property 200 200 390 190
Sale of Property and Compensation for Loss 22,300 22,300 29,636 7,336
Miscellaneous Local Sources 5,716 5,716
State Sources 189,000 195,375 222,130 26,755
Total Revenues 2,602,724 2,609,099 2,973,432 364,333
EXPENDITURES
Current
Transportation 2,755,863 2,762,238 2,081,943 680,295
Employee Benefits 535,501 535,501 463,295 72,206
Total Expenditures 3,291,364 3,297,739 2,545,238 752,501
Excess of Revenues (Expenditures) (688,640) (688,640) 428,194 1,116,834
OTHER FINANCING SOURCES (USES)
Interfund Transfers (Out)(50,000) (50,000) 50,000
Total Other Financing Sources (Uses)(50,000) (50,000) -50,000
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)(738,640) (738,640) 428,194 1,166,834$
Appropriated Fund Balance 738,640 738,640
Net Change in Fund Balance -$ -$ 428,194
Fund Balance, Beginning 2,009,576
Fund Balance, Ending 2,437,770$
BUDGETARY COMPARISON SCHEDULE
HIGHWAY PARTTOWN - NON-GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2018
See Notes to Required Supplementary Information
TOWN OF CORTLANDVILLE
41
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 211,816$ 211,816$ 211,816$ -$
Departmental Income 668,543 668,543 838,080 169,537
Use of Money and Property 200 200 392 192
Total Revenues 880,559 880,559 1,050,288 169,729
EXPENDITURES
Current
General Governmental Support 10,000 10,000 10,000
Home and Community Services 591,585 955,885 781,528 174,357
Employee Benefits 113,994 113,994 97,848 16,146
Debt Service (Principal and Interest)211,816 211,816 211,816
Total Expenditures 927,395 1,291,695 1,091,192 200,503
Excess of Revenues (Expenditures) (46,836) (411,136) (40,904) 370,232
OTHER FINANCING (USES) SOURCES
Interfund Transfers (Out)(100,783) (100,783) (85,783) 15,000
Total Other Financing Sources (Uses)(100,783) (100,783) (85,783) 15,000
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)(147,619) (511,919) (126,687) 385,232$
Appropriated Fund Balance 147,619 511,919
Net Change in Fund Balance -$ -$ (126,687)
Fund Balance, Beginning 2,019,632
Fund Balance, Ending 1,892,945$
BUDGETARY COMPARISON SCHEDULE
WATER FUND - NON-GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2018
See Notes to Required Supplementary Information
TOWN OF CORTLANDVILLE
42
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 308,965$ 308,965$ 308,965$ -$
Departmental Income 734,767 734,767 948,912 214,145
Intergovernmental Charges 826 826 726 (100)
Use of Money and Property 100 100 206 106
Sale of Property and Compensation for Loss 25,500 25,500 (25,500)
Total Revenues 1,070,158 1,070,158 1,258,809 188,651
EXPENDITURES
Current
General Governmental Support 10,000 10,000 10,000
Home and Community Services 818,847 806,996 663,956 143,040
Employee Benefits 52,125 52,125 26,943 25,182
Debt Service (Principal and Interest)296,278 296,278 293,600 2,678
Total Expenditures 1,177,250 1,165,399 984,499 180,900
Excess of Revenues (Expenditures) (107,092) (95,241) 274,310 369,551
OTHER FINANCING SOURCES (USES)
Interfund Transfers (Out)(123,014) (134,865) (109,065) 25,800
Total Other Financing Sources (Uses) (123,014) (134,865) (109,065) 25,800
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)(230,106) (230,106) 165,245 395,351$
Appropriated Fund Balance 230,106 230,106
Net Change in Fund Balance -$ -$ 165,245
Fund Balance, Beginning 867,548
Fund Balance, Ending 1,032,793$
BUDGETARY COMPARISON SCHEDULE
SEWER FUND - NON-GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2018
See Notes to Required Supplementary Information
TOWN OF CORTLANDVILLE
43
2018 2017 2016
Service Cost 305,831$ $ *$ *
Interest Cost 332,908 **
Changes of Benefit Terms - **
Differences Between Expected and Actual Experience - **
Changes in Assumptions or Other Inputs 468,886 **
Benefit Payments (214,202) **
893,423 **
Total OPEB Liability - Beginning 8,608,368 **
Total OPEB Liability - Ending 9,501,791$ 8,608,368$ $ *
Covered Employee Payroll 2,133,472$ $ *$ *
*Information for periods prior to implementation of GASB Statement No. 75
will be completed for each year going forward as it become available.
SCHEDULE OF CHANGES IN THE TOWN'S TOTAL OPEB LIABILITY
AND RELATED RATIOS
FOR THE LAST 10 FISCAL YEARS
See Notes to Required Supplementary Information
43a
2015 2014 2013 2012 2011 2010 2009
$ *$ *$ *$ *$ *$ *$ *
*******
*******
*******
*******
*******
*******
*******
$ *$ *$ *$ *$ *$ *$ *
$ *$ *$ *$ *$ *$ *$ *
TOWN OF CORTLANDVILLE
44
2018 2017
Contractually Required Contribution 281,685$ 275,760$
Contributions in Relation to the Contractually Required Contribution (281,685)(275,760)
Contribution Deficiency (Excess)- -
Town's Covered - Employee Payroll 1,882,997 1,841,476
Contributions as a Percentage of Covered - Employee Payroll 14.96%14.97%
* - Information Not Available
SCHEDULE OF THE TOWN'S CONTRIBUTIONS
NYSLRS PENSION PLAN
FOR THE YEARS ENDED DECEMBER 31,
See Notes to Required Supplementary Information
44a
2016 2015 2014 2013 2012 2011 2010 2009
354,575$ 374,517$ 354,583$ 329,969$ 330,497$ 205,690$ 126,990$ $ *
(354,575)(374,517)(354,583)(329,969)(330,497)(205,690)(126,990)-
- - - - - - - -
1,824,459 1,886,537 1,841,761 1,789,298 1,343,189 ***
19.43%19.85%19.25%18.44%24.61%***
TOWN OF CORTLANDVILLE
45
2018 2017 2016 2015
Town's Proportion of the Net Pension Liability 0.0063251%0.0064701%0.0069912%0.0067653%
Town's Proportionate Share
of the Net Pension Liability 204,139$ 607,946$ 1,122,102$ 228,548$
Town's Covered-employee Payroll 1,882,997 1,841,476 1,824,459 1,886,537
Town's Proportionate Share of the Net Pension Liability 10.8%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 98.2%90.7%90.7%97.9%
FOR THE YEARS ENDED DECEMBER 31,
SCHEDULE OF THE TOWN'S PROPORTIONATE
SHARE OF THE NET PENSION LIABILITY
See Notes to Required Supplementary Information
TOWN OF CORTLANDVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2018
46
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 carrie d forward
from the prior year. Encumbrances are not consider ed 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, 2018.
TOWN OF CORTLANDVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2018
47
Note 4 Schedule of Changes in the Town’s Total OPEB Liability and Related Ratios
Changes in assumptions and other inputs reflect the effects of changes in the discount rate
each period. The following are the discount rates in each period:
2018 - 3.44%
2017 - 3.78%
Note 5 Schedule of the Town’s Proportionate Share of the Net Pension Liability
The Schedule of the Town’s Proportionate Share of the Net Pension Liability, required
supplementary information, presents four years of information. This schedule will present ten
years of information as it becomes available from the pension plans.
Note 6 Schedule of the Town’s Contributions - NYSLRS Pension Plans and Schedule of the Town’s
Proportionate Share of the Net Pension Liability
The Schedule of the 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, 2017 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, 2017 actuarial valuation.
Methods and Assumptions Used in Calculations of Actuarially Determined
Contributions
The April 1, 2017 actuarial valuation determines the employer rates for contributions payable in
fiscal year 2018. 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 AUDITORS’ REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
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, 2018, 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 9, 2019.
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.
Insero & Co. CPA s, LLP
Rochester | Ithaca | Corning | Cortland | Watkins Glen | (800) 232-9547 | www.inserocpa.com
49
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 9, 2019