HomeMy WebLinkAbout2019 Town AuditTOWN OF CORTLANDVILLE
Cortland, New York
FINANCIAL REPORT
For the Year Ended
December 31, 2019
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 .................................................................................................. 11-36
Required Supplementary Information
Budgetary Comparison Schedule - General Townwide Fund - Non-U.S. GAAP Budget Basis .. 37
Budgetary Comparison Schedule - General Parttown Fund - Non-U.S. GAAP Budget Basis ..... 38
Budgetary Comparison Schedule - Highway Parttown - Non-U.S. GAAP Budget Basis ............ 39
Budgetary Comparison Schedule - Water Fund - Non-U.S. GAAP Budget Basis ........................ 40
Budgetary Comparison Schedule - Sewer Fund - Non-U.S. GAAP Budget Basis ....................... 41
Schedule of Changes in the Town’s Total OPEB Liability and Related Ratios ............................ 42-42a
Schedule of the Town’s Contributions - NYSLRS Pension Plan ................................................... 43-43a
Schedule of the Town’s Proportionate Share of the Net Pension Liability .................................... 44-44a
Notes to Required Supplementary Information .............................................................................. 45-46
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 ................................................ 47-48
INDEPENDENT AUDITORS’ REPORT
Town Council
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, 2019, 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.
Insero & Co. CPA s, LLP
The Highest Standard | (800) 232-9547 | www.inserocpa.com
2
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, each major fund, and the aggregate remaining
fund information of the Town of Cortlandville, as of December 31, 2019, and the respective changes in
financial position for the year then ended in accordance with accounting principles generally accepted in
the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis, Budgetary Comparison Schedules, Schedule of Changes in the Town’s Total
OPEB Liability and Related Ratios, Schedule of the Town’s Contributions - NYSLRS Pension Plan,
Schedule of the Town’s Proportionate Share of Net Pension Liability, and the related notes to required
supplementary information on pages 3-3i and 37-46, 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 October 7, 2020
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
October 7, 2020
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2019
3
Our discussion and analysis of the Town of Cortlandville’s (the Town) financial performance provides
an overview of the Town’s financial activities for the fiscal year ended December 31, 2019. This section
is a summary of the Town’s financial activities based on currently known facts, decisions, or conditions.
It is also based on both the Government-wide and fund-based financial statements. The results of the
current year are discussed in comparison with the prior year, with an emphasis placed in the current year.
Please read it in conjunction with the Town’s financial statements, which begin on page 4.
FINANCIAL HIGHLIGHTS
The assets of the Town exceeded its liabilities at the close of the most recent fiscal year by
$8,560,855 (net position) compared to $8,212,098 in 2018.
The Town follows Governmental Accounting Standards Board (GASB) Statement No. 75,
“Accounting and Financial Reporting by Employers for Postemployment Benefits Other than
Pensions.” This statement requires the Town to record a liability and expense for a portion of the
Actuarial Accrued Liability. This liability amounted to $7,472,722 at December 31, 2019 and
expense recognized amounted to $281,859.
During the year ended December 31, 2019, the Town recorded its proportionate share of the net
pension liability along with deferred inflows and outflows of resources related to pensions in
accordance with the parameters of GASB Statement No. 68. “Accounting and Financial Reporting
for Pensions.” Current year recognition resulted in an increase of Government-Wide expenses of
$47,630.
During the year, the Town had expenses that were $348,757 less than the $8,276,096 generated in
tax and other revenues for governmental programs. Comparatively, in the prior year, expenses were
$59,725 less than the $7,983,935 generated in tax and other revenues for government programs.
The General Funds recorded a decrease in fund balances of $231,113 in 2019. General Funds
combined fund balances at year end were $1,908,574.
The Town’s long-term debt decreased $464,300 during the current fiscal year, to a total of
$7,531,500, as a result of debt payments.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2019
3a
USING THIS ANNUAL REPORT
This annual report consists of a series of basic financial statements. The Statement of Net Position and
the Statement of Activities (on pages 4-5) provide information about the Town as a whole and present a
longer-term view of the Town’s finances. Governmental Fund financial statements start on page 6. For
Governmental Activities, these statements tell how these services were financed in the short term, as
well as what remains for future spending. The Governmental Fund financial statements also report the
Town’s operations in greater detail than the Government-wide financial statements by providing
information about the Town’s most significant funds. The remaining statements provide financial
information about activities for which the Town acts solely as a trustee or agent for the benefit of those
outside the government. Following these statements are notes that provide additional information that is
essential to a full understanding of the data provided in the financial statements.
In addition to the basic financial statements, the annual report contains other information in the form of
combining statements for those funds that are not considered major funds and, therefore, are not
presented individually in the basic financial statements. The report also includes schedules comparing
the Town’s final budgets to actual revenues and expenditures for the General Funds and Major Special
Revenue Funds.
Reporting the Town as a Whole
Our analysis of the Town as a whole begins on page 4, with the Government-wide financial statements.
The Statement of Net Position and the Statement of Activities report information about the Town as a
whole and about its activities in a way that helps answer the question of whether the Town, as a whole,
is better off or worse off, as a result of the year’s activities. These statements include all assets and
liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-
sector companies. All of the current year’s revenues and expenses are taken into account, regardless of
when the cash is received or paid.
These two statements report the Town’s net position and changes in it. One can think of the Town’s net
position, the difference between assets, deferred outflows, and liabilities, as one way to measure the
Town’s financial health, or financial position. Over time, increases or decreases in the Town’s net
position are one indicator of whether its financial health is improving or deteriorating. One will need to
consider other nonfinancial factors, however, such as changes in the Town’s property tax base and the
condition of the Town’s infrastructure, to assess the overall health of the Town.
In the Statement of Net Position and the Statement of Activities, all of the Town’s activities, which are
governmental in nature, are reported in one column, including public safety, public health,
transportation, economic assistance, culture and recreation, home and community services, and general
administration. Property and sales taxes, and state and federal grants, finance most of these activities.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2019
3b
Reporting the Town’s Most Significant Funds
Governmental Fund Financial Statements
Analysis of the Town’s Major Funds begins on page 6. The Governmental Fund financial statements
provide detailed information about the most significant funds - not the Town as a whole. Some funds
are required to be established by state law. However, management establishes many other funds to help
it control and manage money for particular purposes or to show it is meeting legal responsibilities for
using certain taxes and grants.
Governmental Funds: All of the Town’s services are reported in the Governmental Funds, which
focus on how money flows into and out of those funds, and the balances left at year end that are
available for spending. These funds are reported using modified accrual accounting, which measures
cash and all other financial assets that can be readily converted to cash. The Governmental Fund
statements provide a detailed short-term view of the Town’s general governmental operations and
the basic services it provides. Governmental Fund information helps determine whether there are
more or fewer financial resources that can be spent in the near future to finance the Town’s
programs. The relationship (or differences) between Governmental Activities (reported in the
Government-wide financial statements) and Governmental Funds is explained in a reconciliation
following the Governmental Fund financial statements.
The Town as Trustee: The Town is the trustee, or fiduciary, for other assets that are held on behalf
of others. All of the Town’s Fiduciary Activities are reported in a separate Statement of Fiduciary
Net Position on page 10. We exclude these activities from the Town’s other financial statements
because the Town cannot use these resources to finance its operations. The Town is responsible for
ensuring the resources reported in this fund are used for their intended purposes.
THE TOWN AS A WHOLE
The Town’s combined net position for fiscal year ended December 31, 2019 increased from $8,212,098
to $8,560,855. A portion of the Town’s net position reflects its investment in capital assets (e.g. land,
buildings, machinery, equipment, and infrastructure) less any related debt used to acquire those assets
that is still outstanding. The Town has chosen not to report infrastructure assets acquired prior to
January 1, 2003, in accordance with the transition provisions of Governmental Accounting Standards
Board (GASB) Statement No. 34. An additional portion of the Town’s net position represents resources
subject to external restrictions on how they may be used and are reported as restricted. The remaining
category of total net position is unrestricted and may be used to meet the government’s ongoing
obligations and services to creditors and citizens.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2019
3c
Our analysis below focuses on the net position (Figure 1), and changes in net position (Figure 2), of
the Town’s Governmental Activities.
Figure 1 - Net Position
Current Assets 6,752,288$ 6,340,444$ (411,844)$ (6.1%)
Noncurrent Assets 2,027,105 1,886,825 (140,280) (6.9%)
Capital Assets, Net 19,904,835 20,318,173 413,338 2.1%
Total Assets 28,684,228 28,545,442 (138,786) (0.5%)
Pensions 780,792 473,707 (307,085) (39.3%)
OPEB 612,005 547,612 (64,393) (10.5%)
Total Deferred Outflows
of Resources
Current Liabilities 3,962,973 3,860,507 (102,466) (2.6%)
Noncurrent Liabilities 17,237,430 14,991,901 (2,245,529) (13.0%)
Total Liabilities 21,200,403 18,852,408 (2,347,995) (11.1%)
Pensions 664,524 159,029 (505,495) (76.1%)
OPEB - 1,994,469 1,994,469 100.0%
Total Deferred Inflows
of Resources 664,524 2,153,498
Net Investment in Capital Assets 8,976,727 9,786,673 809,946 9.0%
Restricted 2,089,261 1,960,182 (129,079) (6.2%)
Unrestricted (2,853,890) (3,186,000) (332,110) (11.6)%
Total Net Position 8,212,098$ 8,560,855$ 348,757$ 4.2%
224.1%1,488,974
(26.7%)1,021,319 (371,478) 1,392,797
Governmental Activities Dollar Change Percent Change
2018 - 2019 2018 - 201920182019
The decrease in current assets is primarily based on a decrease in cash, offset partly by increased
receivables. Noncurrent assets decreased largely because of the use of restricted cash. Capital assets
increased mainly due to capital outlay exceeding depreciation expenses. Current liabilities decreased
largely due to a decrease in accounts payable. Noncurrent liabilities decreased based on decreases in
bonds payable and other postemployment benefits liability, partially offset by an increase in net pension
liability-proportionate share.
Deferred outflows of resources - pensions and deferred inflows of resources - pensions decreased based
on actuarially determined amounts provided the NYSLRS. The decrease in deferred outflows of
resources - OPEB and increase in deferred inflows of resources - OPEB is based on an actuarial
valuation of the Town’s OPEB plan.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2019
3d
Figure 2 demonstrates the operations of the Town’s Governmental Activities.
Figure 2 - Changes in Net Position
REVENUES
Program Revenues
Charges for Services 2,782,982$ 2,840,844$ 57,862$ 2.1%
Operating Grants and Contributions 537,928 258,232 (279,696) (52.0%)
Capital Grants and Contributions 195,375 659,724 464,349 237.7%
General Revenues
Property Taxes and Tax Items 1,861,848 2,001,519 139,671 7.5%
Nonproperty Taxes 2,544,336 2,479,926 (64,410) (2.5%)
Use of Money and Property 12,555 10,462 (2,093) (16.7)%
Other General Revenues 48,911 25,389 (23,522) (48.1)%
Total Revenues 7,983,935$ 8,276,096$ 292,161$ 3.7%
PROGRAM EXPENSES
General Governmental Support 1,847,663$ 1,765,060$ (82,603)$ (4.5%)
Public Safety 60,862 63,854 2,992 4.9%
Public Health 3,543 3,851 308 8.7%
Transportation 3,017,038 2,930,423 (86,615) (2.9)%
Economic Assistance and Opportunity 18,000 18,429 429 2.4%
Culture and Recreation 423,591 397,894 (25,697) (6.1%)
Home and Community Services 2,315,198 2,481,289 166,091 7.2%
Interest on Long-Term Debt 238,315 266,539 28,224 11.8%
Total Expenses 7,924,210$ 7,927,339$ 3,129$ 0.0%
CHANGE IN NET POSITION 59,725$ 348,757$ 289,032$ 483.9%
Governmental Activities and
Total Government
Dollar
Change
Percent
Change
2018 - 2019 2018 - 201920182019
Operating grants and contributions decreased primarily due to a decrease in mortgage tax and the
Community Development Grant. Capital grants and contributions increased mainly due to funding for
Gutchess Park, and for water system improvements.
Total expenses in 2019 were consistent with 2018.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2019
3e
Figures 3 and 4 show the sources of revenue for 2019 and 2018.
Figure 3 - Revenue by Source
2019
Charges for
Services
34.33%
Other General
Revenues
0.31%Operating
Grants and
Contributions
3.12%
Capital Grants and
Contributions
7.97%
Use of Money and
Property
0.13%
Nonproperty Taxes
29.96%
Real Property
Taxes/Items
24.18%
Figure 4 - Revenue by Source
2018
Charges for
Services
34.85%Other General
Revenues
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%
The cost of all Governmental Activities this year was $7,927,339. However, as shown in the Statement
of Activities, the net expense of these activities was $4,168,539, because some of the cost was paid by
those who directly benefited from the programs or by other governments and organizations that
subsidized certain programs with grants and contributions. Overall, the Town’s governmental program
revenues, including fees for services and grants, were $3,758,800. The Town paid for the remaining
“public benefit” portion of Governmental Activities with $4,517,296 in taxes and other revenues, such
as interest and general entitlements.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2019
3f
The total cost and revenue comparison of the Governmental Activities for each of the Town’s largest
programs follows. Note that the Town’s home and community service activities, which provide water
and sewer services, include debt service costs in their fee structures. Because debt service costs are not
expenses of this function, the excess revenue generated by these activities is used to make principal and
interest payments. The difference between cost and revenue shows the financial burden placed on the
Town’s taxpayers by each of these functions.
Figure 5 - Program Cost and Revenue Comparison - Governmental Activities
2019
0500,0001,000,0001,500,0002,000,0002,500,0003,000,000
3,500,0004,000,000
Cost
Revenue
Figure 6 - Program Cost and Revenue Comparison - Governmental Activities
2018
0500,0001,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,000 Cost
Revenue
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2019
3g
THE TOWN’S FUNDS
As the Town completed the year, its Governmental Funds, as presented in the Balance Sheet on pages 6-
6a, reported a decrease in combined fund balance. The decrease is primarily due to expenditures in
excess of revenues. Figure 7 shows the changes in fund balances during the year for the Town’s funds.
Figure 7 - Governmental Funds - Fund Balances at Years Ending
General Fund - Townwide 1,579,757$ 1,225,893$ (353,864)$
General Fund - Parttown 559,930 682,681 122,751
Highway Fund - Parttown 2,437,770 2,244,847 (192,923)
Water Fund 1,892,945 2,001,571 108,626
Sewer Fund 1,032,793 1,275,578 242,785
Special Grant Fund 252,595 141,051 (111,544)
Capital Projects Fund (2,932,308) (3,308,045) (375,737)
Non-Major Fund 275,195 275,251 56
Totals 5,098,677$ 4,538,827$ (559,850)$
Dollar Change
2018 2019 2018 - 2019
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 sources available for appropriation were $249,501 more than the
final budget. Expenditures and other financing uses were $309,830 favorable when compared to
budget due to cost containment measures.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of December 31, 2019, the Town had $40,629,722, less accumulated depreciation of
$20,311,549, invested in a broad range of capital assets, including buildings, machinery and equipment,
roads, and bridges.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2019
3h
Figure 8 - Capital Assets, Net of Depreciation
Land 999,252$ 1,220,406$ 221,154$
Construction in Progress 4,416,261 - (4,416,261)
Improvements 5,027,297 4,717,585 (309,712)
Buildings 2,349,092 7,049,485 4,700,393
Machinery and Equipment 1,251,730 1,337,590 85,860
Infrastructure 5,861,203 5,993,107 131,904
Totals 19,904,835$ 20,318,173$ 413,338$
Governmental Activities and
Total Government Dollar Change
20192018 2018 - 2019
Depreciation expense during the year amounted to $1,058,585. The Town has not reported any
infrastructure assets prior to 2003, in accordance with the transition provisions of GASB Statement
No. 34.
Debt Administration
Debt (bonds and BANs), considered a liability of Governmental Activities, decreased, bringing total
debt to $10,531,500 as of December 31, 2019, as shown in Figure 9. Of the amount of bonds and notes
outstanding, $1,725,489 is subject to the constitutional debt limit and represented 2.44% of the Town’s
statutory debt limit. The Town’s bond rating is currently Aa3 from Moody’s.
Figure 9 - Major Outstanding Debt at Years Ending
Bond Anticipation Notes 3,000,000$ 3,000,000$ -$ 0.0%
Serial Bonds 7,995,800 7,531,500 (464,300) (5.8%)
Totals 10,995,800$ 10,531,500$ (464,300)$ (4.2%)
Percent
Change
2018 - 2019201820192018 - 2019
Governmental Activities and Total
Government Dollar Change
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
• Approved 2020 budget shows an increase in tax rate of $0.01 per $1,000 of assessed value. The Town
Board did not override the tax cap.
• Water benefit tax decreased $6.66 per unit and the Sewer benefit tax decreased $3.58. 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 an increase in units.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2019
3i
• In 2014, the Town Alienated under Home Rule Request a Town Park in exchange of 101 acres signed
by the Governor, Andrew M. Cuomo, in August of 2014, and took effect immediately. The Town
exercised its option in 2017 and began construction of the Gutchess Lumber Sports Complex - Phase I
in 2018. Phase I of the project was completed in June 2020. The Town received a BAN of $3,000,000
in January 2018 to finance part of the project. The BAN was renewed in January 2019 and again in
January 2020. The BAN is due January 2021. The Town was awarded and received Capital Grant
#AC571/CFA #74852 amount of $250,000 from the Dormitory Authority of the State of New York in
October 2019. There is one grant pending in the amount of $862,000 from Empire State Development,
which the Town expects to receive in 2020 or 2021.
• Construction of a Restroom and Pavilion at the Gutchess Lumber Sports complex was completed in
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
adopted July 11, 2018. Construction of the playground is expected to be complete in 2020.
• The Town Board awarded a bid in the amount of $642,000 for the "Town of Cortlandville
Miscellaneous Water and Sewer Improvements" projects in August of 2020 to complete the Lime
Hollow Chlorine Contact Time Water Main Loop; Hillside Drive Sewer Repairs; and Route 281 Water
Main Extension. The Town did not go to bond for the projects; the projects will be paid for using
water and sewer fund balance.
• The Town of Cortlandville was awarded a Community Development Block Grant in 2019
(CDBG #287HR323-19) for a Town-Wide Housing and Rehabilitation Project in the amount of
$336,000. The CDBG project commenced in 2020.
• The Town submitted a 2019 Consolidated Funding Application (CFA) for the New York State
Department of Environmental Conservation's Water Quality Improvement Project (WQIP #93785)
Program for a Source Water Protection Grant to acquire three parcels totaling 107+ acres for the
purpose of protecting the town's drinking water supply wells (Lime Hollow wells). The Town was
awarded $178,240.
• Economic factors: Unknown financial impact as a result of the novel coronavirus pandemic (COVID-
19) in 2020. The pandemic may have an effect on sales tax revenue for the Town as well as other
economic concerns affecting the community. A hiring freeze was implemented in the Town of
Cortlandville in June 2020. The State of New York has reduced their funding about 20% for CHIPS
and Revenue Sharing.
CONTACTING THE TOWN'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with
a general overview of the Town's finances and to show the Town's accountability for the money it receives.
If you have any questions about the report or need any additional financial information contact Thomas
Williams, Supervisor, Town of Cortlandville, at 3577 Terrace Road, Cortland, New York 13045.
TOWN OF CORTLANDVILLE
STATEMENT OF NET POSITION
DECEMBER 31, 2019
See Notes to Financial Statements
4
Governmental
Activities
ASSETS
Current Assets
Cash and Cash Equivalents 5,368,031$
Taxes Receivable, Net 27,306
Due from State and Federal Governments 166,244
Due from Other Governments 611,386
Other Receivables 1,177
Prepaid Expenses 92,943
Loans Receivable, Current Portion 73,357
Total Current Assets 6,340,444
Noncurrent Assets
Restricted Cash and Cash Equivalents 1,520,866
Loans Receivable, Long-Term Portion 365,959
Capital Assets, Non-Depreciable 1,220,406
Other Capital Assets, Net of Accumulated Depreciation 19,097,767
Total Noncurrent Assets 22,204,998
Total Assets 28,545,442
DEFERRED OUTFLOWS OF RESOURCES
Pensions 473,707
OPEB 547,612
Total Deferred Outflows of Resources 1,021,319
LIABILITIES
Current Liabilities
Accounts Payable 182,107
Bond Anticipation Notes Payable 3,000,000
Interest Payable 148,881
Overpayments 67,019
Current Portion of Noncurrent Obligations:
Bonds Payable 462,500
Total Current Liabilities 3,860,507
Noncurrent Liabilities and Obligations
Bonds Payable 7,069,000
Other Postemployment Benefits Liability 7,472,722
Net Pension Liability - Proportionate Share 450,179
Total Noncurrent Liabilities 14,991,901
Total Liabilities 18,852,408
DEFERRED INFLOWS OF RESOURCES
Pensions 159,029
OPEB 1,994,469
Total Deferred Inflows of Resources 2,153,498
NET POSITION
Net Investment in Capital Assets 9,786,673
Restricted 1,960,182
Unrestricted (3,186,000)
Total Net Position 8,560,855$
TOWN OF CORTLANDVILLE
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2019
See Notes to Financial Statements
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 1,765,060$ 258,297$ 153,083$ $ (1,353,680)$
Public Safety 63,854 190,710 126,856
Public Health 3,851 (3,851)
Transportation 2,930,423 243,480 (2,686,943)
Economic Assistance and Opportunity 18,429 (18,429)
Culture and Recreation 397,894 250,000 (147,894)
Home and Community Services 2,481,289 2,391,837 105,149 166,244 181,941
Interest on Long-Term Debt 266,539 (266,539)
Total Governmental Activities 7,927,339$ 2,840,844$ 258,232$ 659,724$ (4,168,539)
Real Property Taxes 1,944,707
Real Property Tax Items 56,812
Nonproperty Tax Items 2,479,926
Use of Money and Property 10,462
Sale of Property and Compensation for Loss (10,335)
Miscellaneous Local Sources 35,724
4,517,296
348,757
8,212,098
8,560,855$
GENERAL REVENUES
Total General Revenues
Change in Net Position
Net Position - Beginning
Net Position - Ending
FUNCTIONS/PROGRAMS
Program Revenues
TOWN OF CORTLANDVILLE
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2019
See Notes to Financial Statements
6
General General
Townwide Parttown
Fund Fund
Cash and Cash Equivalents - Unrestricted 1,051,979$ 416,372$
Cash and Cash Equivalents - Restricted 243,616 20,664
Taxes Receivable (Net)27,306
Due from Other Funds
Due from State and Federal
Due from Other Governments 250,000
Other Receivables
Prepaid Expenses 32,101 3,725
Loans Receivable
Total Assets 1,355,002$ 690,761$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities
Accounts Payable 34,784$ 8,080$
Due to Other Funds 27,306
Other Liabilities 67,019
Bond Anticipation Note Payable
Total Liabilities 129,109 8,080
Unavailable Revenues
Total Deferred Inflows of Resources --
Fund Balances
Nonspendable 32,101 3,725
Restricted 243,616 20,664
Assigned 582,607 200,000
Unassigned 367,569 458,292
Total Fund Balances 1,225,893 682,681
Total Liabilities, Deferred Inflows of Resources, and Fund Balances 1,355,002$ 690,761$
ASSETS
Deferred Inflows of Resources
Major Funds
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
1,734,602$ 713,980$ 801,425$ $374,422$ 275,251$ 5,368,031$
250,383 417,905 447,247 141,051 1,520,866
27,306
696,319 13,454 709,773
166,244 166,244
361,386 611,386
73 630 474 1,177
29,431 14,708 12,978 92,943
439,316 439,316
2,375,875$ 2,009,786$ 1,275,578$ 580,367$ 374,422$ 275,251$ 8,937,042$
131,028$ 8,215$ $ $ $ $182,107$
682,467 709,773
67,019
3,000,000 3,000,000
131,028 8,215 - -3,682,467 -3,958,899
439,316 439,316
---439,316 --439,316
29,431 14,708 12,978 92,943
250,383 417,905 447,247 141,051 1,520,866
1,965,033 1,568,958 815,353 275,251 5,407,202
(3,308,045)(2,482,184)
2,244,847 2,001,571 1,275,578 141,051 (3,308,045) 275,251 4,538,827
2,375,875$ 2,009,786$ 1,275,578$ 580,367$ 374,422$ 275,251$ 8,937,042$
Special Revenue Funds
Major Funds
TOWN OF CORTLANDVILLE
RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
DECEMBER 31, 2019
See Notes to Financial Statements
7
Total Governmental Fund Balances 4,538,827$
20,318,173
(450,179)
Deferred Inflows of Resources - Unavailable Revenue 439,316$
Deferred Inflows of Resources - Pension (159,029)
Deferred Inflows of Resources - OPEB (1,994,469)
Deferred Outflows of Resources - Pension 473,707
Deferred Outflows of Resources - OPEB 547,612 (692,863)
Accrued Interest Payable (148,881)
Other Postemployment Benefits Liability (7,472,722)$
Bonds Payable (7,531,500) (15,004,222)
Net Position of Governmental Activities 8,560,855$
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.
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.
TOWN OF CORTLANDVILLE
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2019
See Notes to Financial Statements
8
General General
Townwide Parttown
Fund Fund
REVENUES
Real Property Taxes 1,186,032$ 292,202$
Real Property Tax Items 56,812
Nonproperty Tax Items 110,242 350,000
Departmental Income 2,611 130,325
Intergovernmental Charges 14,131
Use of Money and Property 380 3,626
Licenses and Permits 14,434
Fines and Forfeitures 190,395
Sale of Property and Compensation for Loss
Miscellaneous Local Sources 970
State Sources 122,798 30,285
Federal Sources 247
Total Revenues 1,699,052 806,438
EXPENDITURES
General Governmental Support 1,222,415 45,091
Public Safety 63,854
Public Health 2,677
Transportation 238,935
Economic Assistance and Opportunity 18,429
Culture and Recreation 792 475,747
Home and Community Services 18,875 263,176
Employee Benefits 468,448 96,996
Debt Service
Principal 97,500
Interest 108,081
Capital Outlay
Total Expenditures 2,237,329 883,687
Excess of Revenues (Expenditures)(538,277) (77,249)
OTHER FINANCING SOURCES (USES)
Interfund Transfers In 384,413 200,000
Interfund Transfers (Out)(200,000)
Total Other Financing Sources (Uses)184,413 200,000
Net Changes in Fund Balances (353,864) 122,751
Fund Balances (Deficit), Beginning 1,579,757 559,930
Fund Balances (Deficit), Ending 1,225,893$ 682,681$
8a
Revenue Fund
Highway Special Capital Highway Total
Parttown Water Sewer Grant Projects Townwide Governmental
Fund Fund Fund Fund Fund Fund Funds
466,473$ 207,095$ 300,346$ $ $ $2,452,148$
56,812
2,129,926 2,590,168
848,750 1,035,646 68,760 2,086,092
1,000 15,131
450 250 248 5,380 72 56 10,462
14,434
190,395
441 441
6,721 372 3,380 10,150 21,593
243,480 166,244 250,000 812,807
104,902 105,149
2,847,491 1,222,711 1,340,620 179,042 260,222 56 8,355,632
1,267,506
63,854
2,677
2,569,319 2,808,254
18,429
476,539
728,779 677,697 290,586 1,979,113
471,095 90,713 25,886 1,153,138
164,384 202,416 464,300
42,710 92,678 243,469
438,203 438,203
3,040,414 1,026,586 998,677 290,586 438,203 - 8,915,482
(192,923) 196,125 341,943 (111,544) (177,981) 56 (559,850)
584,413
(87,499)(99,158)(197,756)(584,413)
-(87,499) (99,158) -(197,756) --
(192,923) 108,626 242,785 (111,544) (375,737) 56 (559,850)
2,437,770 1,892,945 1,032,793 252,595 (2,932,308)275,195 5,098,677
2,244,847$ 2,001,571$ 1,275,578$ 141,051$ (3,308,045)$ 275,251$ 4,538,827$
Special Revenue Funds
TOWN OF CORTLANDVILLE
RECONCILIATION OF GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO
THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2019
See Notes to Financial Statements
9
Net Change in Fund Balances - Total Governmental Funds (559,850)$
Capital Outlay 1,482,699$
Depreciation Expense (1,058,585)
Net Book Value of Disposed Assets (10,776) 413,338
ERS (47,630)
Loans Issued 17,791$
Repayments (68,760)(50,969)
Debt Principal Payments 464,300
Change in Retainage Payable 182,431$
Change in Interest Payable (23,070)159,361
Other Postemployment Benefits Liability (29,793)
Change in Net Position of Governmental Activities 348,757$
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 loan repayments exceeded loans
issued.
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.
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.
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.In addition,changes in deferred outflows of
resources and deferred inflows of resources do not affect current financial resources and are also not reported
in the Governmental Funds.
TOWN OF CORTLANDVILLE
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
DECEMBER 31, 2019
See Notes to Financial Statements
10
Agency
Funds
ASSETS
Cash - Unrestricted 24,234$
Total Assets 24,234$
LIABILITIES
Other Liabilities 24,234$
Total Liabilities 24,234$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
11
Note 1 Summary of Significant Accounting Policies
The basic financial statements of the Town of Cortlandville (Town) have been prepared in
conformity with generally accepted accounting principles (U.S. GAAP) as applied to
government units. The Governmental Accounting Standards Board (GASB) is the accepted
standard setting body for establishing governmental accounting and financial reporting
principles. The significant government's accounting policies are described below.
Financial Reporting Entity
The Town, which was established in 1829, is governed by its Charter, Town Law, other general
laws of the State of New York, and various local ordinances. The Town Board is the legislative
body responsible for overall operations, the Town Supervisor serves as chief executive officer,
and the bookkeeper serves as chief fiscal officer.
The following basic services are provided: highways and streets, water, sanitation, health,
culture and recreation, public improvements, planning and zoning, and general administration.
Fire protection is provided by a separate department which is funded by a Fire Tax District (the
District). The District is funded by means of a tax on the real property tax bill to the Town’s
taxpayers. In 2019, the Town collected and the submitted tax revenue in the amount of $780,750
to the District.
The financial reporting entity consists of the following, as defined by GASB Statement No. 14,
“The Financial Reporting Entity,” as amended.
• The primary government, which is the Town,
• Organizations for which the primary government is financially accountable, and
• Other organizations for which the nature and significance of their relationship with the
primary government are such that exclusion would cause the reporting entity's basic
financial statements to be misleading or incomplete.
The decision to include a potential component unit in the reporting entity is based on the criteria
set forth in GASB Statement No. 14, as amended, 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.
Basic Financial Statements
The Town's basic financial statements include both Government-wide (reporting the Town as
a whole) and Governmental Fund financial statements (reporting the Town's funds). The
Government-wide and Governmental Fund financial statements categorize primary activities
as governmental. The Town's general governmental support, public safety, public health
transportation, economic assistance, culture and recreation, and home and community
services are classified as Governmental Activities.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
12
Note 1 Summary of Significant Accounting Policies - Continued
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
position resulting from the current year's activities.
In the Government-wide Statement of Net Position, the Governmental Activities column is
presented on a consolidated basis and is reported on a full accrual, economic resource basis,
which recognizes all long-term assets and receivables as well as long-term debt and obligations.
The Town's net position is reported in three parts - net investment in capital assets, restricted, and
unrestricted. The Town first utilizes restricted resources to finance qualifying activities.
The Statement of Activities reports both the gross and net cost for each of the Town's
functions or programs. Gross expenses are direct expenses, including depreciation, that are
specifically associated with a service, program, or department and are, therefore, clearly
identifiable to a particular function. These expenses are offset by program revenues - charges
paid by the recipients of the goods or services offered by the programs, grants, and
contributions - that are restricted to meeting the program or capital requirements of a
particular program. Revenues which are not classified as program revenues are presented as
general revenues of the Town, with certain limited exceptions. The net cost represents the
extent to which each function or program is self-financing or draws from the general
revenues of the Town.
The Town does not allocate indirect costs. Indirect costs are reported in the function entitled
"general governmental support."
Governmental Fund Financial Statements
The financial transactions of the Town are reported in individual funds in the fund financial
statements. Each fund is accounted for by providing a separate set of self-balancing accounts
that comprise its assets, liabilities, reserves, fund balance, revenues, and expenditures or
expenses. Fund accounting is designed to demonstrate legal compliance and to aid financial
management by segregating transactions related to certain government functions or activities.
The Town records its transactions in the funds described below:
Governmental Funds
Governmental Funds are those through which most governmental functions are financed. The
acquisition, use, and balances of expendable financial resources, and the related liabilities, are
accounted for through Governmental Funds. The measurement focus of the Governmental Funds
is based upon determination of financial position and changes in financial position under the
modified accrual basis of accounting. The following are the Town’s Governmental Funds:
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
13
Note 1 Summary of Significant Accounting Policies - Continued
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, §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.
• 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, §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.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
14
Note 1 Summary of Significant Accounting Policies - Continued
Basis of Accounting/Measurement Focus
Basis of accounting refers to when revenues and expenditures and the related assets and liabilities
are recognized in the accounts and reported in the basic financial statements. Basis of accounting
relates to the timing of the measurements made, regardless of the measurement focus.
Measurement focus is the determination of what is measured, i.e. expenditures or expenses.
Accrual Basis
The Government-wide financial statements are presented on the “economic resources”
measurement focus and the accrual basis of accounting. Accordingly, all of the Town's assets
and liabilities, including capital assets, as well as infrastructure assets and long-term
liabilities, are included in the accompanying Statement of Net Position. The Statement of
Activities presents changes in net position. Under the accrual basis of accounting, revenues
are recognized when earned and expenses are recognized when incurred.
Modified Accrual Basis
The Governmental Fund financial statements are prepared using the modified accrual basis of
accounting. Under this basis of accounting, revenues are recorded when measurable and
available. Available means collectible within the current period or soon enough thereafter to
be used to pay liabilities of the current period. Material revenues that are accrued include
real property taxes, state and federal aid, sales tax, and certain user charges. The Town
considers property tax receivables collected within 60 days after yearend to be available and
recognizes them as revenues of the current year. All other revenues that are deemed
collectible within one year after year end are recognized as revenues in the current year. If
expenditures are the prime factor for determining eligibility, revenues from federal and state
grants are accrued when the expenditure is made.
Expenditures are recorded when incurred. The cost of capital assets is recognized as an
expenditure when the asset is received. Exceptions to this general rule are 1) principal and
interest on indebtedness are not recognized as an expenditure until due, and 2) compensated
absences, such as vacation and sick leave, which vest or accumulate, 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% tax collection. Responsibility for the collection of
unpaid taxes rests with the county. Uncollected tax liens are sold annually by the County.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
15
Note 1 Summary of Significant Accounting Policies - Continued
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.
Capital Assets
All capital assets are valued at historical cost or estimated historical cost. Contributed assets
are reported at fair market value as of the date received. Additions, improvements, and other
capital outlays that significantly extend the useful life of an asset are capitalized. Other costs
incurred for repairs and maintenance are expensed as incurred. Depreciation on all assets is
provided on the straight-line basis over the estimated useful lives of the assets. Governmental
capital assets purchased or acquired with an original cost of at least $1,000 and having a useful
life of greater than one year are capitalized. The estimated useful lives for governmental
capital assets are as follows:
Buildings 40 Years
Machinery and Equipment 5-20 Years
Infrastructure 15-60 Years
Unearned Revenues
The Town reports unearned revenues on its Statement of Net Position and its Balance Sheet -
Governmental Funds. Unearned revenues arise when resources are received by the Town
before it has legal claim to them, as when grant monies are received prior to the incidence of
qualifying expenditures. In subsequent periods, when the Town has legal claim to the
resources, the liability for unearned revenues is removed and revenues are recorded.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
16
Note 1 Summary of Significant Accounting Policies - Continued
Deferred Inflows and Deferred Outflows of Resources
In addition to assets, the Statement of Net Position reports a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of
resources, represents a consumption of net position that applies to a future period and will not
be recognized as an outflow of resources (expense/expenditure) until then. The Town reports
deferred outflows of resources related to pensions 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, 2019, the Town’s deferred inflows of resources related to revenues consisted of
$439,316 in rehabilitation loans receivable. In addition, the Statement of Net Position reports a
separate section for deferred inflows of resources related to pensions and other postemployment
benefits; these types of deferred inflows of resources are described in Notes 6 and 7, respectively.
Insurance and Risk Management
The Town maintains insurance coverage for most risk including, but not limited to, property
damage and personal injury liability. Judgments and claims are recorded when it is probable that
an asset has been impaired or a liability has been incurred and the amount of loss can be
reasonably estimated. No settlements exceeded insurance coverage in any of the past three years.
Vacation, Sick Leave, and Compensatory Absences
Town employees are granted vacation, sick leave, and other leave benefits as defined in
agreements between the Town and employee representative units. Limited amounts of leave time
may be accumulated up to 40 hours and the cost, therefore, is recognized when payment is made
to employees. In the event of termination, an employee is entitled to payment for accumulated
vacation, unused compensatory absences, and one half of accumulated sick leave.
Equity Classifications
Equity is classified as net position and displayed in three components:
• Net Investment in Capital Assets - Consists of capital assets including restricted capital
assets, net of accumulated depreciation, and reduced by the outstanding balances of any
bonds, mortgages, notes, or other borrowings that are attributable to the acquisition,
construction, or improvement of those assets.
• Restricted - Consists of resources with constraints placed on the use either by 1) external
groups such as creditors, grantors, contributors, or laws or regulations of other
governments; or 2) law through constitutional provisions or enabling legislation.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
17
Note 1 Summary of Significant Accounting Policies - Continued
Equity Classifications - Continued
• Unrestricted - Consists of all other resources which do not meet the definition of
"restricted" or "net investment in capital assets."
Governmental Fund Financial Statements
The Town follows GASB Statement No. 54, which reports 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.
• 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.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
18
Note 1 Summary of Significant Accounting Policies - Continued
Governmental Fund Financial Statements - Continued
The Town Council 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 interfund receivables and payables as appropriate and are subject to
elimination upon consolidation. Services provided, deemed to be at market or near market
rates, are treated as revenues and expenditures/expenses. Reimbursements occur when one
fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a
reimbursement. All other interfund transactions are treated as transfers. Transfers between
Governmental Funds are netted as part of the reconciliation to the Government-wide financial
statements.
Revenues
Substantially all governmental fund revenues are accrued. Property tax receivables expected
to be received later than 60 days after year end are deferred. In applying GASB Statement
No. 33 to grant revenues, the provider recognizes liabilities and expenses and the recipient
recognizes receivables and revenue when the applicable eligibility requirements, including
time requirements, are met. Resources transmitted before the eligibility requirements are met
are reported as advances by the provider and unearned revenue by the recipient.
Restricted Resources
When an expense is incurred for purposes for which both restricted and unrestricted net
resources are available, it is the Town’s policy to apply restricted funds before unrestricted
funds, unless otherwise prohibited by legal requirements.
Use of Estimates
The presentation of financial statements in conformity with the prescribed basis of
accounting as applied to governmental units requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
New Accounting Standards
The Town has adopted and implemented the following Statements of the GASB that are
applicable as of December 31, 2019:
• GASB Statement No. 83, “Certain Asset Retirement Obligations,” effective for the year
ended December 31, 2019.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
19
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:
During May 2020, GASB issued Statement No. 95, “Postponement of the Effective Dates of
Certain Authoritative Guidance,” which changed the effective dates for the Statements
below.
• GASB Statement No. 84, “Fiduciary Activities,” effective for the year ended December 31,
2020. This statement improves guidance regarding identification of fiduciary activities for
accounting and reporting purposes.
• GASB Statement No. 87, “Leases,” effective for the year ending December 31, 2022.
• GASB has issued Statement No. 88, “Certain Disclosures Related to Debt, Including Direct
Borrowings and Direct Placements,” effective for the year ending December 31, 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 December 31, 2021.
• GASB Statement No. 92, “Omnibus 2020,” effective for the year ending December 31,
2022.
The Town will evaluate the impact each of these pronouncements may have on its financial
statements and will implement them as applicable and material.
Note 2 Cash and Investments
The Town's investment policies are governed by state statutes. In addition, the Town has its own
written investment policy. The Town of Cortlandville's monies must be deposited in Federal
Deposit Insurance Corporation (FDIC) insured commercial banks or trust companies located
within the state. The Town Supervisor is authorized to use demand accounts and certificates of
deposit. Permissible investments include obligations of the U.S. Treasury and U.S. Agencies,
repurchase agreements, and obligations of New York State or its localities.
Collateral is required for demand and time deposits and certificates of deposit at 105% of all
deposits not covered by Federal Deposit Insurance. Obligations that may be pledged as collateral
are obligations of the United States and its agencies and obligations of the state and its
municipalities and school districts.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
20
Note 2 Cash and Investments - Continued
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.
Custodial credit risk is the risk that in the event of a bank failure, the Town’s deposits may
not be returned to it. While the Town does not have a specific policy for custodial credit risk,
New York State statutes govern the Town’s investment policies, as discussed previously.
GASB Statement No. 40 directs that deposits be disclosed as exposed to custodial credit risk
if they are not covered by depository insurance, and the deposits are either uncollateralized or
collateralized with securities held by the pledging financial institution’s trust department or
agent, but not in the Town’s name.
The Town’s aggregate bank balances of $7,009,320 are either insured or collateralized with
securities held by the pledging financial institution in the Town’s name.
Restricted Cash
Total restricted cash of $1,520,866 is composed of $1,088,744 reserved for capital purposes,
$82,846 reserved for insurance, $141,051 for community development, $130,660 reserved for
debt, $1,646 for park improvements and $75,919 reserved for retirement contributions.
Note 3 Property Taxes
At December 31, 2019, total real property taxes receivable was $27,306. No allowance for
uncollectible taxes has been reported, as all property taxes are deemed collectible.
Note 4 Other Receivables
Other receivables at December 31, 2019 were as follows:
Description Amount
Highway - Parttown Assessments 73$
Water Fund Rents 630
Sewer Fund Rents 474
Total 1,177$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
21
Note 5 Capital Assets
A summary of changes in capital assets at December 31, 2019 is as follows:
Deletions/Balance at
Governmental Activities Additions Reclassifications 12/31/2019
Non-Depreciable Capital Assets:
Land 999,252$ 221,154$ $1,220,406$
Construction in Progress 4,416,261 438,203 (4,854,464) -
Total Non-Depreciable Capital Assets 5,415,513 659,357 (4,854,464) 1,220,406
Depreciable Capital Assets:
Buildings 4,230,226 4,854,464 9,084,690
Improvements 6,193,604 6,193,604
Machinery and Equipment 5,309,091 412,145 (47,722) 5,673,514
Infrastructure 18,046,311 411,197 18,457,508
Total Depreciable Capital Assets 33,779,232 823,342 4,806,742 39,409,316
Total Historical Cost 39,194,745 1,482,699 (47,722) 40,629,722
Less Accumulated Depreciation:
Buildings 1,881,134 154,071 2,035,205
Improvements 1,166,307 309,712 1,476,019
Machinery and Equipment 4,057,361 315,509 (36,946) 4,335,924
Infrastructure 12,185,108 279,293 12,464,401
Total Accumulated Depreciation 19,289,910 1,058,585 (36,946) 20,311,549
Governmental Activities Capital Assets, Net 19,904,835$ 424,114$ (10,776)$ 20,318,173$
Balance at
12/31/18
Depreciation expense was charged to functions as follows:
General Governmental Support 70,497$
Transportation 312,069
Culture and Recreation 141,559
Home and Community Services 534,460
Total 1,058,585$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
22
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 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 New
York State serves as the trustee of the Fund and is the administrative head of the System.
System benefits are established under the provisions of the New York State Retirement and
Social Security Law (RSSL). Once a public employer elects to participate in the System, the
election is irrevocable. The New York State Constitution provides that pension membership is
a contractual relationship and plan benefits cannot be diminished or impaired. Benefits can be
changed for future members only by enactment of a state statute. The Town also participates in
the Public Employees’ Group Life Insurance Plan (GLIP), which provides death benefits in the
form of life insurance. The System is included in the state’s financial report as a pension trust
fund. That report, including information with regard to benefits provided, may be found at
www.osc.state.ny.us/retire/publications/index.php or obtained by writing to the New York
State and Local Retirement System, 110 State Street, Albany, New York 12244.
The System is noncontributory except for employees who joined after July 27, 1976, who
contribute 3% of their salary for the first ten years of membership, and employees who joined
on or after January 1, 2010, who generally contribute 3.0 to 3.5% of their salary for their entire
length of service. In addition, employee contribution rates under ERS Tier VI vary based on a
sliding salary scale. For ERS, the Comptroller annually certifies the actuarially determined
rates expressly used in computing the employers’ contributions based on salaries paid during
the System’s fiscal year ending March 31.
Summary of Significant Accounting Policies
The System’s financial statements, from which the System’s 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 System’s 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:
2019 2018 2017
ERS $ 276,192 $ 281,685 $ 275,760
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
23
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, 2019, 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, 2019. 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 4/1/2019
Net Pension Liability 7,085,304,242$
Town's Proportionate Share of the
Plan's Total Net Pension Liability 450,179
Town's Share of the Plan's
Total Net Pension Liability 0.0063537%
For the year ended December 31, 2019, the Town recognized pension expense of $277,952 for
ERS in the financial statements. At December 31, 2019, the Town reported deferred outflows
of resources and deferred inflows of resources related to the pensions from the following
sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences Between Expected and Actual Experience 88,650$ 30,220$
Changes of Assumptions 113,156
Net Differences Between Projected and Actual
Earnings on Pension Plan Investments 115,541
Changes in Proportion and Differences
Between the Town’s Contributions
and Proportionate Share of Contributions 62,997 13,268
Town’s Contributions Subsequent to the
Measurement Date 208,904
Total $ 473,707 $ 159,029
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
24
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS)
(the System) - Continued
Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred
Inflows of Resources Related to Pensions - Continued
Town contributions subsequent to the measurement date, reported as deferred outflows of
resources, will be recognized as a reduction of the net pension liability in the year ending
December 31, 2020. Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to pensions will be recognized in pension expense as follows:
Year Ending ERS
2020 115,229$
2021 (78,133)
2022 2,227
2023 66,451
2024 -
Thereafter -
Actuarial Assumptions
The total pension liability as of the measurement date was determined by using an actuarial
valuation as noted in the table below, with update procedures used to roll forward the total
pension liability to the measurement date. The actuarial valuations used the following
actuarial assumptions:
ERS
Measurement Date March 31, 2019
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%
Annuitant mortality rates are based on April 1, 2010 - March 31, 2015 System experience
with adjustments for mortality improvements based on the Society of Actuaries’ Scale MP-
2014.
The actuarial assumptions used in the April 1, 2018 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, 2019
25
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 real rates of return (expected
returns net of investment expense and inflation) are developed for each major asset class.
These ranges are combined to produce the long term expected rate of return by weighting the
expected future real rates of return by each the target asset allocation percentage and by
adding expected inflation. Best estimates of the arithmetic real rates of return for each major
asset class included in the target asset allocation are summarized below:
ERS
Measurement Date March 31, 2019
Actuarial Valuation Date April 1, 2018
Interest Rate 7.0%
Salary Increases 4.2%
Cost of Living 1.3%
Inflation Rate 2.5%
Discount Rate
The discount rate used to calculate the total pension liability was 7.0%. The projection of
cash flows used to determine the discount rate assumes that contributions from plan members
will be made at the current contribution rates and contributions from employers will be made
at statutorily required rates, actuarially. Based on the assumptions, the System’s fiduciary
net position was projected to be available to make all projected future benefit payments of
current plan members. Therefore, the long term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the total
pension liability.
The following presents the Town’s proportionate share of the net pension liability calculated
using the discount rate of 7.0%, as well as what the Town’s proportionate share of the net
pension liability would be if it were calculated using a discount rate that is 1 percentage point
lower (6.0%) or 1 percentage point higher (8.0%) than the current rate:
Current
1% Decrease Assumption
(6.0%)(7.0%)
Town’s Proportionate Share of the 1,968,252$ 450,179$ (825,111)$
Net Pension Liability/Asset
ERS
1% Increase
(8.0%)
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
26
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS) -
Continued
Pension Plan Fiduciary Net Position
The components of the current-year net pension liability of the employers as of the respective
valuation dates were as follows:
Dollars in
Thousands
ERS
Valuation Date March 31, 2019
Employers' Total Pension Liability 189,803,429$
Plan Net Position (182,718,124)
Employers’ Net Pension Liability 7,085,305$
Ratio of Plan Net Position to the
Employers' Total Pension Liability 96.3%
Payables to the Pension Plans
For ERS, employer contributions are paid annually based on the System’s fiscal year which
ends on March 31st. Accrued retirement contributions as of December 31, 2019 represent the
projected employer contribution for the period of April 1, 2019 through December 31, 2019
based on estimated ERS wages multiplied by the employer’s contribution rate, by tier.
Accrued retirement contributions as of December 31, 2019 amounted to $-0-.
Current Year Activity
Changes in the net pension liability and deferred outflows and inflows of resources for the
year ended December 31, 2019 resulted in the following effect on net position:
Beginning Ending
Balance Change Balance
ERS
Net Pension Liability (204,139)$ (246,040)$ (450,179)$
Deferred Outflows of Resources 780,792 (307,085) 473,707
Deferred Inflows of Resources (664,524) 505,495 (159,029)
Total Effect on Net Position (87,871)$ (47,630)$ (135,501)$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
27
Note 7 Other Postemployment Benefits
Postemployment Benefits Other Than Pensions (OPEB)
The Town follows GASB Statement No. 75, “Accounting and Financial Reporting for
Postemployment Benefits Other than Pensions.”
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. The plan is a single-employer defined benefit healthcare plan
administered by the Town. Article 11 of the State Compiled Statutes grants the authority to
establish and amend benefit terms and financing requirements to the Town Board. 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 on which contract each employee falls under. The
specifics of each contract are on file at the Town offices and are available upon request.
Employees Covered by Benefit Terms - At December 31, 2019, the following employees were
covered by the benefit terms:
Inactive Employees or Beneficiaries
Currently Receiving Benefit Payments 22
Active Employees Fully
Eligible for Benefits 40
Total 62
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
28
Note 7 Other Postemployment Benefits - Continued
Total OPEB Liability
The Town’s total OPEB liability of $7,472,722 was measured as of December 31, 2019 and
was determined by an actuarial valuation as of January 1, 2019.
Actuarial Assumptions and Other Inputs - The total OPEB liability in the January 1, 2019
actuarial valuation was determined using the following actuarial assumptions and other inputs,
applied to all periods included in the measurement unless otherwise specified:
Single Discount Rate 4.1%
Salary Scale 3.5%
Inflation Rate 2.4%
Healthcare Cost Trend Rate 7.5%, declining to 3.94%
Mortality rates were based on the Scale MP-2014 and projected forward with Scale MP-2019
(generational mortality) published by the pension mortality study released by the Society of
Actuaries.
Turnover rates were based on the experience under the NYS and Local Retirement System, as
reported in June 2019.
Retirement rates were based on the experience under the New York State and Local Retirement
System, as reported in June 2019.
The actuarial assumptions used in the January 1, 2019 valuation were consistent with the
requirements of GASB Statement No. 75 and Actuarial Standards of Practice (ASOPs).
Total OPEB
Liability
Balance at December 31, 2018 9,501,791$
Changes for the Year
Service Cost 318,761
Interest Cost 333,875
Changes of Benefit Terms -
Differences Between Expected and Actual Experience (1,612,841)
Changes in Assumptions or Other Inputs (839,075)
Benefit Payments (229,789)
(2,029,069)
Balance at December 31, 2019 7,472,722$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
29
Note 7 Other Postemployment Benefits - Continued
Total OPEB Liability - Continued
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 (3.10%) or 1
percentage point higher (5.10%) than the current discount rate:
1% Decrease
(3.10%)
Discount Rate
(4.10%)
1% Increase
(5.10%)
Total OPEB Liability 8,646,265$ 7,472,722$ 6,524,646$
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 6,435,130$ 7,472,722$ 8,777,239$
1% Decrease
Healthcare
Cost Trend
Rate 1% Increase
For the year ended December 31, 2019, the Town recognized OPEB expense of $281,859.
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB
At December 31, 2019, the Town reported deferred outflows of resources and deferred inflows
of resources related to OPEB from the following sources:
Differences Between Expected and Actual Experience -$ 1,311,938$
Changes in Assumptions or Other Inputs 295,546 682,531
Contributions Subsequent to Measurement Date 252,066 -
Total 547,612$ 1,994,469$
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
30
Note 7 Other Postemployment Benefits - Continued
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources -
Continued
Related to OPEB - Continued
Amounts reported as deferred outflows of resources and deferred inflows of resources related
to OPEB will be recognized in OPEB expense as follows:
Amount
2020 (370,777)$
2021 (370,777)
2022 (370,777)
2023 (421,911)
2024 (164,681)
2025 and Thereafter
December 31,
Fiscal Year Ending
Current Year Activity
The following is a summary of current year activity:
Beginning Ending
Balance Change Balance
Other Postemployment Benefits Liability 9,501,791$ (2,029,069)$ 7,472,722$
Deferred Outflows of Resources (612,005) 64,393 (547,612)
Deferred Inflows of Resources - 1,994,469 1,994,469
Total Effect on Net Position 8,889,786$ 29,793$ 8,919,579$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
31
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
12/31/2018 Issued Redeemed 12/31/2019
Bond Anticipation Notes 3,000,000$ 3,000,000$ 3,000,000$ 3,000,000$
Interest expense on short-term debt for fiscal year 2019 was $55,800. BANs redeemed from
appropriations totaled $-0-.
Note 9 Long-Term Debt
At December 31, 2019, the total outstanding indebtedness of the Town aggregated $10,531,500.
Of this amount, $1,725,489 was subject to the constitutional debt limit and represented 2.44% of
its debt limit.
Serial Bonds and Notes
The Town borrows money in order to acquire land or equipment or construct buildings and
improvements. This enables the cost of these capital assets to be borne by the present and future
taxpayers receiving the benefit of the capital assets. These long-term liabilities, which are full
faith and credit debt of the local government, are recorded in the general Government-wide
financial statements. The provision to be made in future budgets for capital indebtedness
represents the amount exclusive of interest, authorized to be collected in future years from
taxpayers and others for liquidation of the long-term liabilities.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
32
Note 9 Long-Term Debt - Continued
Debt Maturity Schedule
The following is a summary of bonds outstanding at December 31, 2019 with corresponding
maturity schedules:
Description of Issue
Date
Issued
Original
Amount
Interest
Rate
Final
Maturity
Balance
Outstanding
Polkville Water Improvements 2012 980,000$ 2.00%2050 918,000$
Town Hall Building 2007 275,000 4.57%2026 192,500
Town Hall Expansion 2006 325,000 4.57%2026 227,500
NYSEFC Sewer Improvements 2005 1,475,000 2.48%2035 1,290,000
Sewer Refunding 2004 110,464 2.50-4.00%2020 26,511
Water Refunding 2004 389,536 2.50-4.00%2020 93,489
Route 13 Sewer Project 2016 2,754,000 1.63%2053 2,586,000
Public Improvements 2017 1,675,000 2-3.00%2032 1,485,000
Highway Garage Project 2018 750,000 3.95%2038 712,500
Total 7,531,500$
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
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 361,500 135,210 496,710
2025-2029 1,729,500 536,695 2,266,195
2030-2034 1,519,500 322,580 1,842,080
2035-2039 781,000 182,126 963,126
2040-2044 578,000 118,430 696,430
2045-2049 630,000 66,310 696,310
2050-2053 422,000 16,088 438,088
Total 7,531,500$ 2,015,300$ 9,546,800$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
33
Note 9 Long-Term Debt - Continued
Changes in Indebtedness
The following is a summary of changes in the Town’s indebtedness for the year ended December
31, 2019:
Balance Maturities/Balance
Governmental Activities 12/31/2018 Payments 12/31/2019
General Obligation Bonds 7,995,800$ -$ (464,300)$ 7,531,500$ 462,500$
Total 7,995,800$ -$ (464,300)$ 7,531,500$ 462,500$
Amount Due
Within One Year
New Issues/
Additions
Interest Paid on Short-Term and Long-Term Debt 243,469$
Prior Year Accrued Interest (125,811)
Current Year Accrued Interest 148,881
Interest Expense 266,539$
Note 10 Interfund Balances
During the course of normal operations, the Town has numerous transactions between funds
including expenditures and transfers of resources primarily to provide services. The
Governmental Funds financial statements generally reflect such transactions as transfers.
The Town also loans resources between funds for the purpose of mitigating the effects of
transient cash flow issues. All interfund payables are expected to be repaid within one year.
Interfund balances at December 31, 2019 are as follows:
Interfund Interfund Interfund Interfund
Receivables Payables Revenue Expense
General Fund - Townwide $27,306$ 384,413$ 200,000$
General Fund - Parttown 200,000
Water Fund 696,319 87,499
Sewer Fund 13,454 99,158
Special Grant Fund
Capital Projects Fund 682,467 197,756
Total 709,773$ 709,773$ 584,413$ 584,413$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
34
Note 11 Reconciliation Between Restricted Fund Balance and Restricted Net Position
Restricted Fund Balance in Governmental Fund Financial Statements 1,520,866$
Reconciling Item: Special Grant Fund Deferred Inflows of Resources 439,316
Restricted Net Position in the Government-Wide
Financial Statements 1,960,182$
Note 12 Fund Balance Detail
At December 31, 2019, nonspendable, restricted and assigned fund balance in the
governmental funds was as follows:
General General Highway Total
Townwide Parttown Parttown Water Sewer Special Non-Major
Fund Fund Fund Fund Fund Grant Fund Fund
Nonspendable
Prepaid Expenses 32,101$ 3,725$ 29,431$ 14,708$ 12,978$ $ $
Total Nonspendable
Fund Balance 32,101$ 3,725$ 29,431$ 14,708$ 12,978$ -$ -$
Restricted
Unemployment
Insurance Reserve 82,846$ $$$$$$
Retirement
Contribution Reserve 30,110 19,018 353 13,030 13,408
Reserve for Debt 130,660
Other 1,646 141,051
Capital Reserve 250,030 404,875 433,839
Total Restricted
Fund Balance 243,616$ 20,664$ 250,383$ 417,905$ 447,247$ 141,051$ -$
Assigned
Appropriated for Next
Year’s Budget 582,607$ 200,000$ 1,000,000$ $ $ $275,062$
Remaining
Fund Balance 965,033 1,568,958 815,353 189
Total Assigned
Fund Balance 582,607$ 200,000$ 1,965,033$ 1,568,958$ 815,353$ -$ 275,251$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
35
Note 13 Restricted Fund Balances
Portions of fund balance are restricted and are not available for current expenditures as
reported in the Governmental Funds Balance Sheet. The balances and activity for the year
ended December 31, 2019 of the Governmental Funds reserves were as follows:
Beginning Interest Ending
Balance Additions Earned Appropriated Balance
Unemployment Insurance Reserve 82,829$ $17$ $82,846$
Retirement Contribution Fund Reserve 75,898 21 75,919
Park Improvements 1,646 1,646
Capital Reserve 1,186,008 90,800 239 (188,303) 1,088,744
Reserve for Debt 130,660 130,660
Special Grant Fund 252,595 179,042 (290,586) 141,051
Total Restricted Fund Balance 1,598,976$ 400,502$ 277$ (478,889)$ 1,520,866$
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. These risks are covered
by commercial insurance purchased from independent third parties. Settled claims for these risks
have not exceeded commercial insurance coverage for the past three years.
The Town has several tax review proceedings pending. All of these proceedings are currently in
negotiation and expected to be resolved; no adjustments have been made for potential refunds.
Note 15 Environmental Liability
The Town was designated a potentially responsible party by the New York State Department
of Environmental Conservation (NYSDEC) for an inactive waste site located in the Town.
The site was closed using grant funds at no cost to the Town. Monitoring of the site is
estimated to cost $1,250,000 over the next 25 years.
In 2017, the Board authorized the Supervisor to sign an Order on Consent and Administrative
Settlement received by the NYSDEC that requires the Town to undertake future costs
stemming from the monitoring and maintenance of the site. No liability has been recorded in
the financial statements due to the uncertainty regarding the amount for which the Town will
be responsible.
Note 16 Stewardship, Compliance and Accountability
Deficit Fund Balance
At December 31, 2019, the Capital Projects Fund had a deficit fund balance of $3,308,045. This
deficit will be eliminated as short-term debt is converted to long-term debt and other sources of
funds.
Deficit Net Position
The Town reported an unrestricted net deficit of $3,186,000 at December 31, 2019. This is
primarily due to the reporting of the OPEB liability and is not expected to be eliminated in the
near term.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
36
Note 17 Tax Abatements
For the year ended December 31, 2019, the Town was subject to tax abatements negotiated by
the Cortland County Industrial Development Agency (CCIDA). Abatement agreements
entered into by CCIDA reduce property taxes collected by the Town.
Information relevant to disclosure of the program for the year ended December 31, 2019 is as
follows:
Amount of
Tax Abatement Program Taxes Abated
Economic Development:
Real Property Tax 22,271$
Total 22,271$
Note 18 Subsequent Event
On January 29, 2020, the Town renewed a $3,000,000 BAN due January 29, 2021 at an interest
rate of 1.375%.
In March 2020, the COVID-19 outbreak was declared to be a pandemic. Actions taken around
the world to help mitigate the spread of the coronavirus include restrictions on travel, quarantines
in certain areas, and forced closures of certain types of public places and businesses. Coronavirus
and actions taken to mitigate it have had and are expected to continue to have an adverse impact
on the economies and financial markets of many countries, including the area in which the Town
exists. While it is unknown how long these conditions will last and what the complete financial
effect will be, the Town expects disruptions to businesses and residents, which could negatively
impact operating results in future periods.
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
GENERAL TOWNWIDE FUND - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2019
See Notes to Required Supplementary Information
37
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 1,207,232$ 1,186,032$ 1,186,032$ -$
Real Property Tax Items 26,500 47,700 56,812 9,112
Nonproperty Tax Items 110,000 110,000 110,242 242
Departmental Income 2,500 2,500 2,611 111
Intergovernmental Charges 14,131 14,131
Use of Money and Property 100 100 380 280
Licenses and Permits 10,500 10,500 14,434 3,934
Fines and Forfeitures 270,000 270,000 190,395 (79,605)
Miscellaneous Local Sources 970 970
State Sources 147,711 147,711 122,798 (24,913)
Federal Sources 200 200 247 47
Total Revenues 1,774,743 1,774,743 1,699,052 (75,691)
EXPENDITURES
General Governmental Support 1,287,793 1,285,868 1,222,415 63,453
Public Safety 76,500 76,500 63,854 12,646
Transportation 298,620 298,620 238,935 59,685
Economic Assistance and Opportunity 21,000 21,000 18,429 2,571
Culture and Recreation 5,430 5,922 792 5,130
Home and Community Services 36,960 36,960 18,875 18,085
Employee Benefits 502,432 503,865 468,448 35,417
Debt Service (Principal and Interest)205,581 205,581 205,581 -
Total Expenditures 2,434,316 2,434,316 2,237,329 196,987
Excess of Revenues (Expenditures) (659,573) (659,573) (538,277) 121,296
OTHER FINANCING SOURCES (USES)
Interfund Transfers In 186,657 186,657 384,413 197,756
Interfund Transfers (Out)(200,000)(200,000)-
Total Other Financing Sources (Uses)186,657 (13,343) 184,413 197,756
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)(472,916) (672,916) (353,864) 319,052$
Appropriated Fund Balance 472,916 672,916
Net Change in Fund Balance -$ -$ (353,864)
Fund Balance, Beginning 1,579,757
Fund Balance, Ending 1,225,893$
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
GENERAL PARTTOWN FUND - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2019
See Notes to Required Supplementary Information
38
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 292,202$ 292,202$ 292,202$ -$
Nonproperty Tax Items 250,000 250,000 350,000 100,000
Departmental Income 102,300 102,300 130,325 28,025
Use of Money and Property 4,000 4,000 3,626 (374)
State Sources 30,500 30,500 30,285 (215)
Total Revenues 679,002 679,002 806,438 127,436
EXPENDITURES
General Governmental Support 68,600 64,396 45,091 19,305
Public Health 3,000 3,000 2,677 323
Culture and Recreation 252,700 521,408 475,747 45,661
Home and Community Services 302,063 304,105 263,176 40,929
Employee Benefits 102,239 103,621 96,996 6,625
Total Expenditures 728,602 996,530 883,687 112,843
Excess of Revenues (Expenditures) (49,600) (317,528) (77,249) 240,279
OTHER FINANCING SOURCES (USES)
Interfund Transfers in 200,000 200,000 -
Total Other Financing Sources (Uses)-200,000 200,000 -
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)(49,600) (117,528) 122,751 240,279$
Appropriated Fund Balance 49,600 117,528
Net Change in Fund Balance -$ -$ 122,751
Fund Balance, Beginning 559,930
Fund Balance, Ending 682,681$
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
HIGHWAY PARTTOWN - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2019
See Notes to Required Supplementary Information
39
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 466,093$ 466,093$ 466,473$ 380$
Nonproperty Tax Items 1,970,000 1,970,000 2,129,926 159,926
Use of Money and Property 150 150 450 300
Sale of Property and Compensation for Loss 10,000 10,000 441 (9,559)
Miscellaneous Local Sources 6,721 6,721
State Sources 220,109 243,480 243,480 -
Total Revenues 2,666,352 2,689,723 2,847,491 157,768
EXPENDITURES
Transportation 3,109,316 3,167,087 2,569,319 597,768
Employee Benefits 527,036 527,036 471,095 55,941
Total Expenditures 3,636,352 3,694,123 3,040,414 653,709
Excess of Revenues (Expenditures) (970,000) (1,004,400) (192,923) 811,477
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)(1,020,000) (1,054,400) (192,923) 861,477$
Appropriated Fund Balance 1,020,000 1,054,400
Net Change in Fund Balance -$ -$ (192,923)
Fund Balance, Beginning 2,437,770
Fund Balance, Ending 2,244,847$
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
WATER FUND - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2019
See Notes to Required Supplementary Information
40
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 207,095$ 207,095$ 207,095$ -$
Departmental Income 722,406 722,406 848,750 126,344
Use of Money and Property 200 200 250 50
Miscellaneous Local Sources 372 372
State Sources 166,244 166,244
Total Revenues 929,701 929,701 1,222,711 293,010
EXPENDITURES
General Governmental Support 10,000 10,000 10,000
Home and Community Services 494,965 864,573 728,779 135,794
Employee Benefits 115,142 115,142 90,713 24,429
Debt Service (Principal and Interest)207,095 207,095 207,094 1
Total Expenditures 827,202 1,196,810 1,026,586 170,224
Excess of Revenues (Expenditures) 102,499 (267,109) 196,125 463,234
OTHER FINANCING SOURCES (USES)
Interfund Transfers (Out)(102,499) (102,499) (87,499) 15,000
Total Other Financing Sources (Uses)(102,499) (102,499) (87,499) 15,000
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)-(369,608) 108,626 478,234$
Appropriated Fund Balance - 369,608
Net Change in Fund Balance -$ -$ 108,626
Fund Balance, Beginning 1,892,945
Fund Balance, Ending 2,001,571$
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
SEWER FUND - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2019
See Notes to Required Supplementary Information
41
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 300,346$ 300,346$ 300,346$ -$
Departmental Income 962,325 962,325 1,035,646 73,321
Intergovernmental Charges 726 726 1,000 274
Use of Money and Property 100 100 248 148
Miscellaneous Local Sources 3,380 3,380
Total Revenues 1,263,497 1,263,497 1,340,620 77,123
EXPENDITURES
General Governmental Support 10,000 10,000 10,000
Home and Community Services 822,974 824,621 677,697 146,924
Employee Benefits 52,288 52,288 25,886 26,402
Debt Service (Principal and Interest)295,104 295,104 295,094 10
Total Expenditures 1,180,366 1,182,013 998,677 183,336
Excess of Revenues (Expenditures) 83,131 81,484 341,943 260,459
OTHER FINANCING SOURCES (USES)
Interfund Transfers (Out)(124,958) (124,958) (99,158) 25,800
Total Other Financing Sources (Uses) (124,958) (124,958) (99,158) 25,800
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)(41,827) (43,474) 242,785 286,259$
Appropriated Fund Balance 41,827 43,474
Net Change in Fund Balance -$ -$ 242,785
Fund Balance, Beginning 1,032,793
Fund Balance, Ending 1,275,578$
TOWN OF CORTLANDVILLE
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
42
2019 2018 2017
Service Cost 318,761$ 305,831$ $ *
Interest Cost 333,875 332,908 *
Changes of Benefit Terms - - *
Differences Between Expected and Actual Experience (1,612,841) - *
Changes in Assumptions or Other Inputs (839,075) 468,886 *
Benefit Payments (229,789) (214,202) *
(2,029,069) 893,423 *
Total OPEB Liability - Beginning 9,501,791 8,608,368 *
Total OPEB Liability - Ending 7,472,722$ 9,501,791$ 8,608,368$
Covered Employee Payroll 1,542,739$ 2,133,472$ $ *
Liability as a % of Covered Employee Payroll 484%445%
*Information for periods prior to implementation of GASB Statement No. 75
will be completed for each year going forward as it becomes available.
42a
2016 2015 2014 2013 2012 2011 2010
$ *$ *$ *$ *$ *$ *$ *
*******
*******
*******
*******
*******
*******
*******
$ *$ *$ *$ *$ *$ *$ *
$ *$ *$ *$ *$ *$ *$ *
TOWN OF CORTLANDVILLE
SCHEDULE OF THE TOWN'S CONTRIBUTIONS
NYSLRS PENSION PLAN
FOR THE YEARS ENDED DECEMBER 31,
See Notes to Required Supplementary Information
43
2019 2018 2017
Contractually Required Contribution 276,192$ 281,685$ 275,760$
Contributions in Relation to the Contractually
Required Contribution (276,192)(281,685)(275,760)
Contribution Deficiency (Excess)- - -
Town's Covered Employee Payroll 1,948,061 1,882,997 1,841,476
Contributions as a Percentage of Covered
Employee Payroll 14.18%14.96%14.97%
* Information Not Available
43a
2016 2015 2014 2013 2012 2011 2010
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
SCHEDULE OF THE TOWN'S PROPORTIONATE
SHARE OF THE NET PENSION LIABILITY
FOR THE YEARS ENDED DECEMBER 31,
See Notes to Required Supplementary Information
44
2019 2018 2017
Town's Proportion of the Net Pension Liability 0.0063537%0.0063251%0.0064701%
Town's Proportionate Share
of the Net Pension Liability 450,179$ 204,139$ 607,946$
Town's Covered Employee Payroll 1,948,061 1,882,997 1,841,476
Town's Proportionate Share of the Net Pension Liability 23.1%10.8%33.0%
as a Percentage of its Covered Employee Payroll
Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 96.3%98.2%90.7%
44a
2016 2015
0.0069912%0.0067653%
1,122,102$ 228,548$
1,824,459 1,886,537
61.5%12.1%
90.7%97.9%
TOWN OF CORTLANDVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2019
45
Note 1 Budget Basis of Accounting
Except as indicated below, budgets are adopted annually on a basis consistent with
accounting principles generally accepted in the United States of America. Appropriations
authorized for the current year are increased by the amount of encumbrances carried forward
from the prior year. Encumbrances are not considered a disbursement in the financial plan or
an expenditure in U.S. 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 Council.
The Town Council 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 U.S. GAAP
No adjustment is necessary to convert the excess of revenues and other sources over
expenditures and other uses on the U.S. GAAP basis to the budget basis, as there were no
encumbrances recorded at December 31, 2019.
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:
2019 - 4.10%
2018 - 3.44%
TOWN OF CORTLANDVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2019
46
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 five 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.
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, 2018 actuarial valuation.
Methods and Assumptions Used in Calculations of Actuarially Determined
Contributions
The April 1, 2018 actuarial valuation determines the employer rates for contributions payable
in fiscal year 2019. 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, 2019, and the related notes to the financial statements, which
collectively comprise the Town’s basic financial statements, and have issued our report thereon dated
October 7, 2020.
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
The Highest Standard | (800) 232-9547 | www.inserocpa.com
48
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
October 7, 2020