HomeMy WebLinkAbout2020 Town AuditTOWN OF CORTLANDVILLE
Cortland, New York
FINANCIAL REPORT
For the Year Ended
December 31, 2020
TOWN OF CORTLANDVILLE
TABLE OF CONTENTS
Independent Auditors’ Report 1-2
Required Supplementary Information
Management’s Discussion and Analysis 3-3j
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
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
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
Statement of Changes in Fiduciary Net Position 11
Notes to Financial Statements 12-37
Required Supplementary Information
Budgetary Comparison Schedule - General Townwide Fund - Non-U.S. GAAP Budget Basis 38
Budgetary Comparison Schedule - General Parttown Fund - Non-U.S. GAAP Budget Basis 39
Budgetary Comparison Schedule - Highway Parttown - Non-U.S. GAAP Budget Basis 40
Budgetary Comparison Schedule - Water Fund - Non-U.S. GAAP Budget Basis 41
Budgetary Comparison Schedule - Sewer Fund - Non-U.S. GAAP Budget Basis 42
Schedule of Changes in the Town’s Total OPEB Liability and Related Ratios 43-43a
Schedule of the Town’s Contributions - NYSLRS Pension Plan 44-44a
Schedule of the Town’s Proportionate Share of the Net Pension Liability 45
Notes to Required Supplementary Information 46-48
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 49-50
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, 2020, 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, 2020, 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.
Emphasis of a Matter
During the year ended December 31, 2020, the Town adopted Government Accounting Standards
Board (GASB) Statement No. 84, “Fiduciary Activities.” There was no effect on net position or fund
balance. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management’s Discussion and Analysis, Budgetary Comparison Schedules, Schedule of Changes in the
Town’s Total OPEB Liability and Related Ratios, 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 3-3j and 38-48, 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
November 1, 2021 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
November 1, 2021
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
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, 2020.
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 and deferred outflows of resources of the Town exceeded its liabilities and deferred
inflows of resources at the close of the most recent fiscal year by $8,321,819 (net position)
compared to $8,560,855 in 2019.
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 $9,504,194 at December 31, 2020 and
expense recognized amounted to $346,898.
During the year ended December 31, 2020, 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
$346,898.
During the year, the Town had expenses that were $239,036 more than the $8,290,610 generated
in tax and other revenues for governmental programs. Comparatively, in the prior year, expenses
were $348,757 less than the $8,276,096 generated in tax and other revenues for government
programs.
The General Funds recorded a decrease in fund balances of $266,159 in 2020. General Funds
combined fund balances at year end were $1,642,415.
The Town’s long-term debt decreased $462,500 during the current fiscal year, to a total of
$7,069,000 as a result of debt payments.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
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 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, 2020
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 on the Town as a whole. Some
funds are required to be established by New York 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 separate statements on
page 10 and 11. 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, 2020 decreased from
$8,560,855 to $8,321,819. A portion of the Town’s net position reflects its investment in capital
assets (e.g. land, buildings, machinery, equipment, and infrastructure) less any related debt used to
acquire those assets that is still outstanding. The Town has chosen not to report infrastructure assets
acquired prior to January 1, 2003, in accordance with the transition provisions of GASB Statement
No. 34. An additional portion of the Town’s net position represents resources subject to external
restrictions on how they may be used and are reported as restricted. The remaining category of total
net position is unrestricted and may be used to meet the government’s ongoing obligations and
services to creditors and citizens.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
3c
Our analysis below focuses on the net position (Figure 1), and changes in net position (Figure 2),
of the Town’s Governmental Activities.
Figure 1 - Net Position
Current Assets 6,783,972$ 5,966,022$ 817,950$ 13.7%
Noncurrent Assets 1,512,764 2,261,247 (748,483) (33.1%)
Capital Assets, Net 20,005,676 20,318,173 (312,497) (1.5%)
Total Assets 28,302,412 28,545,442 (243,030) (0.9%)
Pensions 1,335,600 473,707 861,893 181.9%
OPEB 1,869,191 547,612 1,321,579 241.3%
Total Deferred Outflows
of Resources
Current Liabilities 3,599,669 3,860,507 (260,838) (6.8%)
Noncurrent Liabilities 18,010,320 14,991,901 3,018,419 20.1%
Total Liabilities 21,609,989 18,852,408 2,757,581 14.6%
Pensions 38,373 159,029 (120,656) (75.9%)
OPEB 1,537,022 1,994,469 (457,447) (22.9%)
Total Deferred Inflows
of Resources 1,575,395 2,153,498
Net Investment in Capital Assets 10,091,676 9,786,673 305,003 3.1%
Restricted 1,823,359 1,960,182 (136,823) (7.0%)
Unrestricted (3,593,216) (3,186,000) (407,216) (12.8)%
Total Net Position 8,321,819$ 8,560,855$ (239,036)$ (2.8%)
Governmental Activities
(26.8%)(578,103)
213.8%3,204,791 2,183,472 1,021,319
Dollar Change Percent Change
2020 - 2019 2020 - 201920202019
The increase in current assets is primarily based on an increase in receivables, offset partly by
decreased cash. Noncurrent assets decreased largely because of the use of restricted cash. Capital
assets decreased mainly due to depreciation expenses exceeding capital outlay. Current liabilities
decreased largely due to decreases in BANs payable and interest payable. Noncurrent liabilities
increased based on increased net pension liability proportionate share and other postemployment
benefits liability, partially offset by a decrease in bonds payable.
Deferred outflows of resources - pensions increased and deferred inflows of resources - pensions
decreased based on actuarially determined amounts provided the NYSLRS. The increase in deferred
outflows of resources - OPEB and decrease 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, 2020
3d
Figure 2 demonstrates the operations of the Town’s Governmental Activities.
Figure 2 - Changes in Net Position
REVENUES
Program Revenues
Charges for Services 3,362,643$ 2,840,844$ 521,799$ 18.4%
Operating Grants and Contributions 281,908 258,232 23,676 9.2%
Capital Grants and Contributions 87,173 659,724 (572,551) (86.8)%
General Revenues
Property Taxes and Tax Items 2,033,508 2,001,519 31,989 1.6%
Nonproperty Taxes 2,527,104 2,479,926 47,178 1.9%
Use of Money and Property 8,465 10,462 (1,997) (19.1)%
Other General Revenues (10,191) 25,389 (35,580) (140.1)%
Total Revenues 8,290,610$ 8,276,096$ 14,514$ 0.2%
PROGRAM EXPENSES
General Governmental Support 2,008,707$ 1,765,060$ 243,647$ 13.8%
Public Safety 64,932 63,854 1,078 1.7%
Public Health 3,630 3,851 (221) (5.7)%
Transportation 2,899,269 2,930,423 (31,154) (1.1)%
Economic Assistance and Opportunity 21,500 18,429 3,071 16.7%
Culture and Recreation 414,078 397,894 16,184 4.1%
Home and Community Services 2,905,755 2,481,289 424,466 17.1%
Interest on Long-Term Debt 211,775 266,539 (54,764) (20.5%)
Total Expenses 8,529,646$ 7,927,339$ 602,307$ 7.6%
CHANGE IN NET POSITION (239,036)$ 348,757$ (587,793)$ (168.5)%
Governmental Activities and Total
Government Dollar Change
Percent
Change
2020 - 2019 2020 - 20192020 2019
Charges for services increased mainly due to increased building permit fees and increased water and
sewer rents. Operating grants and contributions increased primarily due to an increase in mortgage
tax, partially offset by a decrease in the Community Development Grant. Capital grants and
contributions decreased mainly due to less CHIPS funding. Additionally, two New York State grants
were received in 2019 but not in 2020.
Total expenses increased in 2020 primarily due to increased pension and OPEB expenses.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
3e
Figures 3 and 4 show the sources of revenue for 2020 and 2019.
Figure 3 - Revenue by Source
2020
Charges for
Services
40.56%Other General
Revenues
(0.12)%
Operating
Grants and
Contributions
3.40%Capital Grants
and
Contributions
1.05%
Use of Money
and Property
0.10%
Nonproperty
Taxes
30.48%
Real Property
Taxes/Items
24.53%
Figure 4 - 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%
The cost of all Governmental Activities this year was $8,529,646. However, as shown in the Statement
of Activities, the net expense of these activities was $4,797,922, 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 $3,731,724. The Town paid for the remaining
“public benefit” portion of Governmental Activities with $4,558,886 in taxes and other revenues, such
as interest and general entitlements.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
3f
The total cost and revenue comparison of the Governmental Activities for each of the Town’s largest
programs follows. Note that the Town’s home and community service activities, which provide
water and sewer services, include debt service costs in their fee structures. Because debt service
costs are not expenses of this function, the excess revenue generated by these activities is used to
make principal and interest payments. The difference between cost and revenue shows the financial
burden placed on the Town’s taxpayers by each of these functions.
Figure 5 - Program Cost and Revenue Comparison - Governmental Activities
2020
0500,0001,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,000 Cost
Revenue
Figure 6 - Program Cost and Revenue Comparison - Governmental Activities
2019
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000 Cost
Revenue
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
3g
THE TOWN’S FUNDS
As the Town completed the year, its Governmental Funds, as presented in the Balance Sheet on page
6, reported a decrease in combined fund balance. The increase is primarily due to expenditures in
excess of revenues. Figure 7 shows the changes in fund balances during the year for the Town’s
funds.
Figure 7 - Governmental Funds - Fund Balances at Years Ended
General Fund - Townwide 850,045$ 1,225,893$ (375,848)$
General Fund - Parttown 792,370 682,681 109,689
Highway Fund - Parttown 2,758,238 2,244,847 513,391
Water Fund 2,091,092 2,001,571 89,521
Sewer Fund 1,510,304 1,275,578 234,726
Special Grant Fund 93,043 141,051 (48,008)
Capital Projects Fund (3,495,939)(3,308,045)(187,894)
Non-Major Fund 275,306 275,251 55
Totals 4,874,459$ 4,538,827$ 335,632$
Dollar Change
2020 2019 2020 - 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 $159,108 less than the
final budget. Expenditures and other financing uses were $730,692 favorable when compared
to budget due to cost containment measures.
Capital Assets and Debt Administration
Capital Assets
At the end of December 31, 2020, the Town had $41,383,755, less accumulated depreciation of
$21,378,079, invested in a broad range of capital assets, including buildings, machinery and
equipment, roads, and bridges.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
3h
Figure 8 - Capital Assets, Net of Depreciation
Land 1,220,406$ 1,220,406$ -$
Improvements 4,556,255 4,717,585 (161,330)
Buildings 7,111,070 7,049,485 61,585
Machinery and Equipment 1,410,986 1,337,590 73,396
Infrastructure 5,706,959 5,993,107 (286,148)
Totals 20,005,676$ 20,318,173$ (312,497)$
Governmental Activities and
Total Government Dollar Change
20192020 2020 - 2019
Depreciation expense during the year amounted to $1,154,792. 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 $9,914,000 as of December 31, 2020, as shown in Figure 9. Of the amount of bonds and
notes outstanding, $1,562,000 is subject to the constitutional debt limit and represented 2.20% of the
Town’s statutory debt limit. The Town’s bond rating is currently Aa3 from Moody’s.
Figure 9 - Major Outstanding Debt at Years Ending
Bond Anticipation Notes 2,845,000$ 3,000,000$ (155,000)$ (5.2%)
Serial Bonds 7,069,000 7,531,500 (462,500) (6.1%)
Totals 9,914,000$ 10,531,500$ (617,500)$ (5.9%)
Percent
Change
2020 - 201920202019 2020 - 2019
Governmental Activities and Total
Government Dollar Change
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
Approved 2021 budget shows an increase in tax rate of $0.05 per $1,000 of assessed value. The
Town Board did not override the tax cap.
Water benefit tax decreased $17.123874 per unit and the Sewer benefit tax decreased $5.06832. The
number of units calculated changes year to year as well as debt being paid down or added. The
water units had an increase in units and the sewer had a decrease in units.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
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 in the 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 2021 or 2022.
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 was completed 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. This was completed in 2021.
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 and is ongoing in 2021.
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 $178,240. The Town is continuing to work on paperwork to receive funds in 2021 or 2022.
Economic factors: Unknown financial impact as a result of the novel coronavirus pandemic
(COVID-19) in 2020. The pandemic may have an effect on sales tax revenue for the Town as well
as other economic concerns affecting the community. A hiring freeze was implemented in the Town
of Cortlandville in June 2020. The State of New York has reduced their funding about 20% for
CHIPS and Revenue Sharing. The Town may receive the 20% that was held back in 2020, in 2021.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
3j
Contacting the Town’s Financial Management
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors
with a general overview of the Town's finances and to show the Town's accountability for the money it
receives. If you have any questions about the report or need any additional financial information contact
Thomas Williams, Supervisor, Town of Cortlandville, at 3577 Terrace Road, Cortland, New York
13045.
TOWN OF CORTLANDVILLE
STATEMENT OF NET POSITION
DECEMBER 31, 2020
See Notes to Financial Statements
4
Governmental
Activities
ASSETS
Current Assets
Cash and Cash Equivalents - Unrestricted 4,865,054$
Due from State and Federal Governments 302,803
Due from Other Governments 964,155
Other Receivables 471,542
Prepaid Expenses 169,823
Loans Receivable, Current Portion 10,595
Total Current Assets 6,783,972
Noncurrent Assets
Cash and Cash Equivalents - Restricted 1,261,635
Loans Receivable, Long-Term Portion 251,129
Capital Assets, Non-Depreciable 1,220,406
Other Capital Assets, Net of Accumulated Depreciation 18,785,270
Total Noncurrent Assets 21,518,440
Total Assets 28,302,412
DEFERRED OUTFLOWS OF RESOURCES
Pensions 1,335,600
Other Postemployment Benefits 1,869,191
Total Deferred Outflows of Resources 3,204,791
LIABILITIES
Current Liabilities
Accounts Payable 203,410
Accrued Liabilities 112,143
Bond Anticipation Notes Payable 2,845,000
Interest Payable 96,616
Current Portion of Noncurrent Obligations:
Bonds Payable 342,500
Total Current Liabilities 3,599,669
Noncurrent Liabilities and Obligations
Bonds Payable 6,726,500
Other Postemployment Benefits Liability 9,504,194
Net Pension Liability - Proportionate Share 1,779,626
Total Noncurrent Liabilities 18,010,320
Total Liabilities 21,609,989
DEFERRED INFLOWS OF RESOURCES
Pensions 38,373
Other Postemployment Benefits 1,537,022
Total Deferred Inflows of Resources 1,575,395
NET POSITION
Net Investment in Capital Assets 10,091,676
Restricted 1,823,359
Unrestricted (3,593,216)
Total Net Position 8,321,819$
TOWN OF CORTLANDVILLE
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2020
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 2,008,707$ 337,206$ 237,081$ $ - (1,434,420)$
Public Safety 64,932 201,214 - - 136,282
Public Health 3,630 - - - (3,630)
Transportation 2,899,269 - - 87,133 (2,812,136)
Economic Assistance and Opportunity 21,500 - - - (21,500)
Culture and Recreation 414,078 - - - (414,078)
Home and Community Services 2,905,755 2,824,223 44,827 40 (36,665)
Interest on Long-Term Debt 211,775 - - - (211,775)
Total Governmental Activities 8,529,646$ 3,362,643$ 281,908$ 87,173$ (4,797,922)
Real Property Taxes 1,975,936
Real Property Tax Items 57,572
Nonproperty Tax Items 2,527,104
Use of Money and Property 8,465
Sale of Property and Compensation for Loss (17,726)
Miscellaneous Local Sources 7,535
4,558,886
(239,036)
8,560,855
8,321,819$
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, 2020
See Notes to Financial Statements
6
Non-Major
Governmental
Fund
Special
Revenue Fund
General General Highway Special Capital Highway Total
Townwide Parttown Parttown Water Sewer Grant Projects Townwide Governmental
Fund Fund Fund Fund Fund Fund
Fund Fund Funds
Cash and Cash Equivalents - Unrestricted 557,142$ 536,014$ 2,095,083$ 594,780$ 775,201$ -$ 31,528$ 275,306$ 4,865,054$
Cash and Cash Equivalents - Restricted 241,370 20,664 300,433 132,989 473,136 93,043 - - 1,261,635
Due from Other Funds - - - 697,450 13,350 - - - 710,800
Due from State and Federal Governments 136,559 - - 166,244 - - - - 302,803
Due from Other Governments - 250,000 414,155 300,000 - - - - 964,155
Other Receivables 28,333 - (952) 207,808 236,353 - - - 471,542
Prepaid Expenses 85,840 3,860 48,390 17,725 14,008 - - - 169,823
Loans Receivable - - - - - 261,724 - - 261,724
Total Assets 1,049,244$ 810,538$ 2,857,109$ 2,116,996$ 1,512,048$ 354,767$ 31,528$ 275,306$ 9,007,536$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities
Accounts Payable 58,723$ 18,168$ 98,871$ 25,904$ 1,744$ -$ -$ -$ 203,410$
Accrued Liabilities 112,143 - - - - - - - 112,143
Due to Other Funds 28,333 - - - - - 682,467 - 710,800
Bond Anticipation Note Payable - - - - - - 2,845,000 - 2,845,000
Total Liabilities 199,199 18,168 98,871 25,904 1,744 -3,527,467 -3,871,353
Unavailable Revenues - - - - - 261,724 - - 261,724
Total Deferred Inflows of Resources -----261,724 --261,724
Fund Balances
Nonspendable 85,840 3,860 48,390 17,725 14,008 - - - 169,823
Restricted 241,370 20,664 300,433 432,989 473,136 93,043 - - 1,561,635
Assigned 517,667 95,874 2,409,415 1,640,378 1,023,160 - - 275,306 5,961,800
Unassigned 5,168 671,972 - - - - (3,495,939) - (2,818,799)
Total Fund Balances (Deficit)850,045 792,370 2,758,238 2,091,092 1,510,304 93,043 (3,495,939) 275,306 4,874,459
Total Liabilities, Deferred Inflows of Resources, and Fund Balances 1,049,244$ 810,538$ 2,857,109$ 2,116,996$ 1,512,048$ 354,767$ 31,528$ 275,306$ 9,007,536$
Special Revenue Funds
Deferred Inflows of Resources
Major Funds
ASSETS
TOWN OF CORTLANDVILLE
RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
DECEMBER 31, 2020
See Notes to Financial Statements
7
Total Governmental Fund Balances 4,874,459$
20,005,676
The Town’s proportion of the net pension liability is not reported in the funds.(1,779,626)
Deferred Inflows of Resources - Unavailable Revenue 261,724$
Deferred Inflows of Resources - Pension (38,373)
Deferred Inflows of Resources - OPEB (1,537,022)
Deferred Outflows of Resources - Pension 1,335,600
Deferred Outflows of Resources - OPEB 1,869,191 1,891,120
Accrued Interest Payable (96,616)
Other Postemployment Benefits Liability (9,504,194)
Bonds Payable (7,069,000)(16,573,194)
Net Position of Governmental Activities 8,321,819$
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.
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:
TOWN OF CORTLANDVILLE
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2020
See Notes to Financial Statements
8
Non-Major
Governmental
Fund
Special
Revenue Fund
General General Highway Special Capital Highway Total
Townwide Parttown Parttown Water Sewer Grant
Projects Townwide Governmental
Fund Fund Fund Fund Fund Fund Fund Fund Funds
REVENUES
Real Property Taxes 1,440,261$ 79,544$ 456,131$ 192,194$ 294,980$ -$ -$ -$ 2,463,110$
Real Property Tax Items 57,572 - - - - - - - 57,572
Nonproperty Tax Items 109,580 250,000 2,277,104 - - - - - 2,636,684
Departmental Income 62,251 212,033 - 1,085,226 1,251,823 93,646 - - 2,704,979
Intergovernmental Charges - - - - 726 - 40 - 766
Use of Money and Property 3,790 113 449 207 229 3,522 100 55 8,465
Licenses and Permits 12,586 - - - - - - - 12,586
Fines and Forfeitures 141,244 - - - - - - - 141,244
Sale of Property and Compensation for Loss - - 2,753 1,775 1,775 - - - 6,303
Miscellaneous Local Sources 2,203 - 5,332 - - - - - 7,535
State Sources 218,543 18,538 87,133 - - - - - 324,214
Federal Sources 214 - - - - 44,613 - - 44,827
Total Revenues 2,048,244 560,228 2,828,902 1,279,402 1,549,533 141,781 140 55 8,408,285
EXPENDITURES
General Governmental Support 1,215,411 61,010 - 8,327 - - - - 1,284,748
Public Safety 64,932 - - - - - - - 64,932
Public Health - 2,211 - - - - - - 2,211
Transportation 257,454 - 1,850,480 - - - - - 2,107,934
Economic Assistance and Opportunity 21,500 - - - - - - - 21,500
Culture and Recreation 79,089 125,833 - - - - - - 204,922
Home and Community Services 36,619 174,738 - 820,508 902,253 105,497 - - 2,039,615
Employee Benefits 526,167 86,747 465,031 90,080 24,900 - - - 1,192,925
Debt Service
Principal 252,500 - - 163,489 201,511 - - - 617,500
Interest 137,968 - - 37,665 88,407 - - - 264,040
Capital Outlay - - - - - - 427,326 - 427,326
Total Expenditures 2,591,640 450,539 2,315,511 1,120,069 1,217,071 105,497 427,326 - 8,227,653
Excess of Revenues (Expenditures)(543,396) 109,689 513,391 159,333 332,462 36,284 (427,186) 55 180,632
OTHER FINANCING SOURCES (USES)
Interfund Transfers In 167,548 - - - - - 84,292 - 251,840
Interfund Transfers (Out)- - - (69,812) (97,736) (84,292) - - (251,840)
BANs Redeemed from Appropriations - - - - - - 155,000 - 155,000
Total Other Financing Sources (Uses)167,548 --(69,812) (97,736) (84,292) 239,292 -155,000
Net Changes in Fund Balances (375,848) 109,689 513,391 89,521 234,726 (48,008) (187,894) 55 335,632
Fund Balances (Deficit), Beginning 1,225,893 682,681 2,244,847 2,001,571 1,275,578 141,051 (3,308,045) 275,251 4,538,827
Fund Balances (Deficit), Ending 850,045$ 792,370$ 2,758,238$ 2,091,092$ 1,510,304$ 93,043$ (3,495,939)$ 275,306$ 4,874,459$
Special Revenue Funds
Major 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, 2020
See Notes to Financial Statements
9
Net Change in Fund Balances - Total Governmental Funds 335,632$
Capital Outlay 866,324$
Depreciation Expense (1,154,792)
Net Book Value of Disposed Assets (24,029) (312,497)
ERS (346,898)
Repayments (177,592)
BANs Redeemed from Appropriations (155,000)$
Debt Principal Payments 617,500 462,500
Change in Interest Payable 52,265
Other Postemployment Benefits Liability (252,446)
Change in Net Position of Governmental Activities (239,036)$
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 of loan repayments.
Bond proceeds provide current financial resources to Governmental Funds,but issuing debt increases long-
term liabilities in the Statement of Net Position. Repayment of bond principal is an expenditure in the
Governmental Funds, but the repayment reduces long-term liabilities in the Statement of Net Position.
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 depreciation expense and the book value of disposed assets exceeded capital outlay 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 affect 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 FUND
DECEMBER 31, 2020
See Notes to Financial Statements
10
Custodial
Funds
ASSETS
Cash - Unrestricted -$
Total Assets -$
LIABILITIES
Other Liabilities -$
Total Liabilities -$
TOWN OF CORTLANDVILLE
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED DECEMBER 31, 2020
See Notes to Financial Statements
11
Custodial
Fund
Custodial Fund Balance, Beginning of Year -$
Custodial Fund Balance, End of Year -$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
12
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 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 2020, 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, 2020
13
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 paragraphs describe the
Town’s Governmental Funds.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
14
Note 1 Summary of Significant Accounting Policies - Continued
Governmental Funds - 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 Fund:
Custodial Fund - 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, 2020
15
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, such as 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, 2020
16
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, 2020
17
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, 2020, the Town’s deferred inflows of resources related to revenues
consisted of $261,724 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 - Governmental Activities and Fiduciary Fund
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.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
18
Note 1 Summary of Significant Accounting Policies - Continued
Equity Classifications - Governmental Activities and Fiduciary Fund - Continued
Restricted - Consists of resources with constraints placed on the use either by 1)
external groups such as creditors, grantors, contributors, or laws or regulations of
other governments, or 2) law through constitutional provisions or enabling legislation.
Unrestricted - Consists of all other resources which do not meet the definition of
"restricted" or "net investment in capital assets."
Equity Classifications - Governmental Funds
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 Funds. In funds other than the General Funds, assigned fund
balance represents the residual amount of fund balance.
Unassigned - Represents the residual classification of the government’s General Funds
and could report a surplus or deficit. In funds other than the General Funds, 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, 2020
19
Note 1 Summary of Significant Accounting Policies - Continued
Equity Classifications - Governmental Funds - 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 Ressources
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 U.S. GAAP requires
management to make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
20
Note 1 Summary of Significant Accounting Policies - Continued
Future Changes in Accounting Standards
GASB Statement No. 87, “Leases,” effective for the year ending December 31, 2022.
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, 2022.
GASB has issued Statement No. 90, “Majority Equity Interests - an amendment of GASB
Statements No. 14 and No. 61,” effective for the year ending December 31, 2021.
GASB has issued Statement No. 91, “Conduit Debt Obligations,” effective for the year
ending December 31, 2023.
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.
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.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
21
Note 2 Cash and Investments - Continued
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 $6,315,918 are either insured or collateralized
with securities held by the pledging financial institution in the Town’s name.
Restricted Cash
Total restricted cash of $1,261,635 is composed of $879,762 reserved for capital purposes,
$80,594 reserved for insurance, $93,043 for community development, $130,660 reserved for
debt, $1,646 for park improvements, and $75,930 reserved for retirement contributions.
Note 3 Property Taxes
At December 31, 2020, total real property taxes receivable was $28,333. No allowance for
uncollectible taxes has been reported, as all property taxes are deemed collectible.
Note 4 Other Receivables
Other receivables at December 31, 2020 were as follows:
Description Amount
Highway - Parttown Assessments (952)$
Water Fund Rents 207,808
Sewer Fund Rents 236,353
Total 443,209$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
22
Note 5 Capital Assets
A summary of changes in capital assets at December 31, 2020 is as follows:
Deletions/ Balance at
Governmental Activities Additions Reclassifications 12/31/2020
Non-Depreciable Capital Assets:
Land 1,220,406$ -$ -$ 1,220,406$
Total Non-Depreciable Capital Assets 1,220,406 - - 1,220,406
Depreciable Capital Assets:
Buildings 9,084,690 277,504 - 9,362,194
Improvements 6,193,604 149,822 - 6,343,426
Machinery and Equipment 5,673,514 438,998 (112,291) 6,000,221
Infrastructure 18,457,508 - - 18,457,508
Total Depreciable Capital Assets 30,324,626 866,324 (112,291) 40,163,349
Total Historical Cost 31,545,032 866,324 (112,291) 41,383,755
Less Accumulated Depreciation:
Buildings 2,035,205 215,919 - 2,251,124
Improvements 1,476,019 311,152 - 1,787,171
Machinery and Equipment 4,335,924 341,573 (88,262) 4,589,235
Infrastructure 12,464,401 286,148 - 12,750,549
Total Accumulated Depreciation 20,311,549 1,154,792 (88,262) 21,378,079
Governmental Activities Capital Assets, Net 20,318,173$ (288,468)$ (24,029)$ 20,005,676$
Balance at
12/31/19
Depreciation expense was charged to functions as follows:
General Governmental Support 72,640$
Transportation 351,026
Culture and Recreation 207,300
Home and Community Services 523,826
Total 1,154,792$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
23
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System
(ERS) (the System)
Plan Descriptions and Benefits Provided
Employees’ Retirement System (ERS)
The Town participates in the New York State and Local Employees’ Retirement System
(ERS). This is a cost-sharing multiple-employer retirement system. The System provides
retirement benefits as well as death and disability benefits. The net position of the System is
held in 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:
2020 2019 2018
ERS $ 278,538 $ 276,192 $ 281,685
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
24
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS)
(the System) - Continued
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources, and
Deferred Inflows of Resources Related to Pensions
At December 31, 2020, 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, 2020. 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 April 1, 2019
Net Pension Liability 26,480,579,097$
Town's Proportionate Share of the
Plan's Total Net Pension Liability 1,779,626
Town's Share of the Plan's
Total Net Pension Liability 0.0067205%
For the year ended December 31, 2020, the Town recognized pension expense of $288,866
for ERS in the financial statements. At December 31, 2020, the Town reported deferred
outflows of resources and deferred inflows of resources related to the pensions from the
following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences Between Expected and Actual Experience 104,738$ -$
Changes of Assumptions 35,833 30,941
Net Differences Between Projected and Actual
Earnings on Pension Plan Investments 912,323 -
Changes in Proportion and Differences
Between the Town’s Contributions
and Proportionate Share of Contributions 65,475 7,432
Town’s Contributions Subsequent to the
Measurement Date 217,231 -
Total $ 1,335,600 $ 38,373
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
25
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, 2021. 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
2021 189,638$
2022 274,626
2023 342,833
2024 272,899
2025 -
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, 2020
Actuarial Valuation Date April 1, 2019
Investment Rate of Return 6.8%
Salary Increases 4.2%
Cost of Living Adjustments 1.3%
Inflation Rate 2.5%
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-2018.
The actuarial assumptions used in the April 1, 2019, 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, 2020
26
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS)
(the System) - Continued
Actuarial Assumptions - Continued
The long-term rate of return on pension plan investments was determined using a building
block method in which best estimate ranges of expected future 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, 2020
Asset Type:
Domestic Equities 4.1%
International Equities 6.2%
Real Estate 5.0%
Private Equity/Alternative Investments 6.8%
Absolute Return Strategies 3.3%
Opportunistic Portfolio 4.7%
Real Assets 6.0%
Cash 0.0%
Inflation-Indexed Bonds 0.5%
Mortgages and Bonds 0.8%
Discount Rate
The discount rate used to calculate the total pension liability was 6.8%. 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 6.8%, 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 or higher than the current rate:
Current
1% Decrease Assumption
(5.8%) (6.8%)
Town’s Proportionate Share of the 3,266,117$ 1,779,626$ 410,562$
Net Pension Liability
ERS
1% Increase
(7.8%)
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
27
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, 2020
Employers' Total Pension Liability 194,596,261$
Plan Net Position (168,115,682)
Employers’ Net Pension Liability 26,480,579$
Ratio of Plan Net Position to the
Employers' Total Pension Liability 86.4%
Payables to the Pension Plans
For ERS, employer contributions are paid annually based on the System’s fiscal year
which ends on March 31. Accrued retirement contributions as of December 31, 2020
represent the projected employer contribution for the period of April 1, 2020 through
December 31, 2020 based on estimated ERS wages multiplied by the employer’s
contribution rate, by tier. Accrued retirement contributions as of December 31, 2020
amounted to $-0-.
Effect on Net Position
Changes in the net pension liability and deferred outflows and inflows of resources for the
year ended December 31, 2020 resulted in the following effect on net position:
Beginning Ending
Balance Change Balance
ERS
Net Pension Liability 450,179$ 1,329,447$ 1,779,626$
Deferred Outflows of Resources (473,707) (861,893) (1,335,600)
Deferred Inflows of Resources 159,029 (120,656) 38,373
Total Effect on Net Position 135,501$ 346,898$ 482,399$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
28
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, 2020, 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, 2020
29
Note 7 Other Postemployment Benefits - Continued
Total OPEB Liability
The Town’s total OPEB liability of $9,504,194 was measured as of January 1, 2020 and was
determined by an actuarial valuation as of January 1, 2019.
Actuarial Assumptions and Other Inputs - The total OPEB liability in the January 1, 2019
actuarial valuation was determined using the following actuarial assumptions and other
inputs, applied to all periods included in the measurement unless otherwise specified:
Single Discount Rate 2.7%
Salary Scale 3.5%
Inflation Rate 2.4%
Healthcare Cost Trend Rate 7.5%, declining to 3.94% in 2079
Mortality rates were based on the RPH-2014 Mortality Table with generational mortality
adjusted to 2006 using scale MP-2014 and projected forward with scale MP-2019.
Turnover rates were based on the experience under the NYS and Local Retirement System,
as reported in June 2019.
Retirement rates were based on the experience under the New York State and Local
Retirement System, as reported in June 2019.
The actuarial assumptions used in the January 1, 2019 valuation were consistent with the
requirements of GASB Statement No. 75 and Actuarial Standards of Practice (ASOPs).
Total OPEB
Liability
Balance at December 31, 2019 7,472,722$
Changes for the Year
Service Cost 249,163
Interest Cost 311,431
Changes of Benefit Terms -
Differences Between Expected and Actual Experience -
Changes in Assumptions or Other Inputs 1,722,944
Benefit Payments (252,066)
2,031,472
Balance at December 31, 2020 9,504,194$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
30
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
or higher than the current discount rate:
1% Decrease
(1.74%)
Discount Rate
(2.74%)
1% Increase
(3.74%)
Total OPEB Liability 11,156,695$ 9,504,194$ 8,188,528$
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 higher than the current healthcare cost trend rate:
Total OPEB Liability 7,982,719$ 9,504,194$ 11,463,168$
1% Decrease
Healthcare
Cost Trend
Rate 1% Increase
For the year ended December 31, 2020, the Town recognized OPEB expense of $511,262.
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to OPEB
At December 31, 2020, the Town reported deferred outflows of resources and deferred
inflows of resources related to OPEB from the following sources:
Differences Between Expected and Actual Experience -$ 1,011,035$
Changes in Assumptions or Other Inputs 1,610,375 525,987
Contributions Subsequent to Measurement Date 258,816 -
Total 1,869,191$ 1,537,022$
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
31
Note 7 Other Postemployment Benefits - Continued
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to OPEB - Continued
Town contributions subsequent to the measurement date, reported as deferred outflows of
resources, will be recognized as a reduction of the OPEB liability in the year ending
December 31, 2021. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to OPEB will be recognized in pension expense as
follows:
Amount
2021 (49,332)$
2022 (49,332)
2023 (100,466)
2024 156,764
2025 115,719
2026 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 7,472,722$ 2,031,472$ 9,504,194$
Deferred Outflows of Resources (547,612) (1,321,579) (1,869,191)
Deferred Inflows of Resources 1,994,469 (457,447) 1,537,022
Total Effect on Net Position 8,919,579$ 252,446$ 9,172,025$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
32
Note 8 Short-Term Debt - Bond Anticipation Notes
Notes issued in anticipation of proceeds from the subsequent sale of bonds are recorded as
current liabilities of the funds that will actually receive the proceeds from the issuance of the
bonds. Such notes may be classified as long-term debt when (1) the intention is to refinance
the debt on a long-term basis, and (2) the intention can be substantiated through a post
balance sheet issuance of long-term debt or by an acceptable financing agreement.
State law requires that bond anticipation notes (BANs) issued for capital purposes be
converted to long-term financing within five years after the original issue date. The Town
issues BANs to finance capital improvements.
Changes in short-term debt outstanding are as follows:
Payable at Payable at
12/31/2019 Issued Redeemed 12/31/2020
Bond Anticipation Notes 3,000,000$ 3,000,000$ 3,155,000$ 2,845,000$
Interest expense on short-term debt for fiscal year 2020 was $90,000. BANs redeemed from
appropriations totaled $155,000.
Note 9 Long-Term Debt
At December 31, 2020, the total outstanding indebtedness of the Town aggregated
$9,914,000. Of this amount, $1,562,000 was subject to the constitutional debt limit and
represented 2.20% of its debt limit.
Serial Bonds and Notes
The Town borrows money in order to acquire land or equipment or construct buildings and
improvements. This enables the cost of these capital assets to be borne by the present and
future taxpayers receiving the benefit of the capital assets. These long-term liabilities, which
are full faith and credit debt of the local government, are recorded in the general Government-
wide financial statements. The provision to be made in future budgets for capital
indebtedness represents the amount exclusive of interest, authorized to be collected in future
years from taxpayers and others for liquidation of the long-term liabilities.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
33
Note 9 Long-Term Debt - Continued
Debt Maturity Schedule
The following is a summary of bonds outstanding at December 31, 2020 with corresponding
maturity schedules:
Description of Issue
Date
Issued
Original
Amount
Interest
Rate
Final
Maturity
Balance
Outstanding
Polkville Water Improvements 2012 980,000$ 2.00%2050 896,000$
Town Hall Building 2007 275,000 4.57%2026 165,000
Town Hall Expansion 2006 325,000 4.57%2026 195,000
NYSEFC Sewer Improvements 2005 1,475,000 2.48%2035 1,225,000
Route 13 Sewer Project 2016 2,754,000 1.63%2053 2,528,000
Public Improvements 2017 1,675,000 2-3.00%2032 1,385,000
Highway Garage Project 2018 750,000 3.95%2038 675,000
Total 7,069,000$
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
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 368,500 125,724 494,224
2026-2030 1,702,500 492,732 2,195,232
2031-2035 1,417,500 284,724 1,702,224
2036-2040 652,500 165,858 818,358
2041-2045 589,000 108,367 697,367
2046-2050 640,000 55,349 695,349
2051-2053 290,000 9,474 299,474
Total 7,069,000$ 1,841,258$ 8,910,258$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
34
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, 2020:
Balance Maturities/Balance
Governmental Activities 12/31/2019 Payments 12/31/2020
General Obligation Bonds 7,531,500$ -$ (462,500)$ 7,069,000$ 342,500$
Total 7,531,500$ -$ (462,500)$ 7,069,000$ 342,500$
Amount Due
Within One Year
New Issues/
Additions
Interest Paid on Short-Term and Long-Term Debt 264,040$
Prior Year Accrued Interest (148,881)
Current Year Accrued Interest 96,616
Interest Expense 211,775$
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, 2020 are as follows:
Interfund Interfund Interfund Interfund
Receivables Payables Revenue Expense
General Fund - Townwide -$ 28,333$ 167,548$ -$
General Fund - Parttown - - - -
Water Fund 697,450 - - 69,812
Sewer Fund 13,350 - - 97,736
Special Grant Fund - - - 84,292
Capital Projects Fund - 682,467 84,292 -
Total 710,800$ 710,800$ 251,840$ 251,840$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
35
Note 11 Reconciliation Between Restricted Fund Balance and Restricted Net Position
Restricted Fund Balance in Governmental Fund Financial Statements 1,561,635$
Reconciling Item: Special Grant Fund Deferred Inflows of Resources 261,724
Restricted Net Position in the Government-Wide
Financial Statements 1,823,359$
Note 12 Fund Balance Detail
At December 31, 2020, 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 85,840$ 3,860$ 48,390$ 17,725$ 14,008$ -$ -$
Total Nonspendable
Fund Balance 85,840$ 3,860$ 48,390$ 17,725$ 14,008$ -$ -$
Restricted
Unemployment
Insurance Reserve 80,594$ -$ -$ -$ -$ -$ -$
Retirement
Contribution Reserve 30,116 19,018 353 13,033 13,410 - -
Reserve for Debt 130,660 - - - - - -
Other - 1,646 - - - 93,043 -
Capital Reserve - - 300,080 419,956 459,726 - -
Total Restricted
Fund Balance 241,370$ 20,664$ 300,433$ 432,989$ 473,136$ 93,043$ -$
Assigned
Appropriated for Next
Year’s Budget 517,667$ 95,874$ 1,000,000$ -$ -$ -$ 275,062$
Encumbrance - - 197,624 - - - -
Remaining
Fund Balance - - 1,211,791 1,640,378 1,023,160 - 244
Total Assigned
Fund Balance 517,667$ 95,874$ 2,409,415$ 1,640,378$ 1,023,160$ -$ 275,306$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
36
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, 2020 of the Governmental Funds reserves were as follows:
Beginning Interest Ending
Balance Additions Earned Appropriated Balance
Unemployment Insurance Reserve 82,846$ -$ 16$ (2,268)$ 80,594$
Retirement Contribution Fund Reserve 75,919 - 11 - 75,930
Park Improvements 1,646 - - - 1,646
Capital Reserve 1,088,744 90,800 218 - 1,179,762
Reserve for Debt 130,660 - - - 130,660
Special Grant Fund 141,051 141,781 - (189,789) 93,043
Total Restricted Fund Balance 1,520,866$ 232,581$ 245$ (192,057)$ 1,561,635$
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.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
37
Note 16 Stewardship, Compliance and Accountability
Deficit Fund Balance
At December 31, 2020, the Capital Projects Fund had a deficit fund balance of $3,495,939.
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 $3,593,216 at December 31, 2020. This is
primarily due to the reporting of the OPEB liability and is not expected to be eliminated in the
near term.
Note 17 Tax Abatements
For the year ended December 31, 2020, the Town was subject to tax abatements negotiated
by the Cortland County Industrial Development Agency (CCIDA). Abatement agreements
entered into by CCIDA reduce property taxes collected by the Town.
Information relevant to disclosure of the program for the year ended December 31, 2020 is
as follows:
Amount of
Tax Abatement Program Taxes Abated
Economic Development:
Real Property Tax 18,709$
Total 18,709$
Note 18 Subsequent Event
On January 28, 2021, the Town renewed a $2,685,000 BAN due January 28, 2022 at an
interest rate of .42%.
Note 19 Economic Uncertainty - COVID-19
In March 2020, the COVID-19 outbreak was declared to be a pandemic. Actions taken around
the world to help mitigate the spread of the coronavirus include restrictions on travel,
quarantines in certain areas, and forced closures of certain types of public places and
businesses. Coronavirus and actions taken to mitigate it have had and are expected to continue
to have an adverse impact on the economies and financial markets of many countries,
including the area in which the Town exists. While it is unknown how long these conditions
will last and what the complete financial effect will be, the Town expects disruptions to
businesses and residents, which could negatively impact operating results in future periods.
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
GENERAL TOWNWIDE FUND - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2020
See Notes to Required Supplementary Information
38
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 1,440,261$ 1,440,261$ 1,440,261$ -$
Real Property Tax Items 48,378 48,378 57,572 9,194
Nonproperty Tax Items 110,000 110,000 109,580 (420)
Departmental Income 42,250 42,250 62,251 20,001
Use of Money and Property 4,100 4,100 3,790 (310)
Licenses and Permits 10,500 10,500 12,586 2,086
Fines and Forfeitures 200,000 200,000 141,244 (58,756)
Miscellaneous Local Sources - - 2,203 2,203
State Sources 141,000 141,000 218,543 77,543
Federal Sources 247 247 214 (33)
Total Revenues 1,996,736 1,996,736 2,048,244 51,508
EXPENDITURES
General Governmental Support 1,343,301 1,354,282 1,215,411 138,871
Public Safety 76,500 76,500 64,932 11,568
Transportation 310,480 310,480 257,454 53,026
Economic Assistance and Opportunity 21,000 22,207 21,500 707
Culture and Recreation 412,730 412,730 79,089 333,641
Home and Community Services 34,000 43,731 36,619 7,112
Employee Benefits 513,412 541,629 526,167 15,462
Debt Service (Principal and Interest)385,468 390,468 390,468 -
Total Expenditures 3,096,891 3,152,027 2,591,640 560,387
Excess of Revenues (Expenditures) (1,100,155) (1,155,291) (543,396) 611,895
OTHER FINANCING SOURCES (USES)
Proceeds of Obligations 350,000 350,000 - (350,000)
Interfund Transfers In 167,548 167,548 167,548 -
Total Other Financing Sources (Uses)517,548 517,548 167,548 (350,000)
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)(582,607) (637,743) (375,848) 261,895$
Appropriated Fund Balance 582,607 637,743
Net Change in Fund Balance -$ -$ (375,848)
Fund Balance, Beginning 1,225,893
Fund Balance, Ending 850,045$
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
GENERAL PARTTOWN FUND - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2020
See Notes to Required Supplementary Information
39
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 79,544$ 79,544$ 79,544$ -$
Nonproperty Tax Items 250,000 250,000 250,000 -
Departmental Income 73,200 73,200 212,033 138,833
Use of Money and Property 100 100 113 13
State Sources 18,000 18,000 18,538 538
Total Revenues 420,844 420,844 560,228 139,384
EXPENDITURES
General Governmental Support 70,743 69,200 61,010 8,190
Public Health 3,000 3,000 2,211 789
Culture and Recreation 176,700 178,243 125,833 52,410
Home and Community Services 264,306 264,306 174,738 89,568
Employee Benefits 106,095 106,095 86,747 19,348
Total Expenditures 620,844 620,844 450,539 170,305
Excess of Revenues (Expenditures) (200,000) (200,000) 109,689 309,689
Appropriated Fund Balance 200,000 200,000
Net Change in Fund Balance -$ -$ 109,689
Fund Balance, Beginning 682,681
Fund Balance, Ending 792,370$
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
HIGHWAY PARTTOWN - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2020
See Notes to Required Supplementary Information
40
Original Final
Budget Budget Actual Encumbrances Variance
REVENUES
Real Property Taxes 455,577$ 455,577$ 456,131$ -$ 554$
Nonproperty Tax Items 2,050,000 2,050,000 2,277,104 - 227,104
Use of Money and Property 150 150 449 - 299
Sale of Property and Compensation for Loss - - 2,753 - 2,753
Miscellaneous Local Sources - - 5,332 - 5,332
State Sources 243,481 243,481 87,133 - (156,348)
Total Revenues 2,749,208 2,749,208 2,828,902 - 79,694
EXPENDITURES
Transportation 3,169,539 3,169,539 1,850,480 197,624 1,121,435
Employee Benefits 529,669 529,669 465,031 - 64,638
Total Expenditures 3,699,208 3,699,208 2,315,511 197,624 1,186,073
Excess of Revenues (Expenditures) (950,000) (950,000) 513,391 (197,624)$ 1,265,767$
Budgetary Provisions for Other Uses (50,000) -
Appropriated Fund Balance 1,000,000 950,000
Net Change in Fund Balance -$ -$ 513,391
Fund Balance, Beginning 2,244,847
Fund Balance, Ending 2,758,238$
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
WATER FUND - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2020
See Notes to Required Supplementary Information
41
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 192,194$ 192,194$ 192,194$ -$
Departmental Income 839,000 839,000 1,085,226 246,226
Use of Money and Property 100 100 207 107
Sale of Property and Compensation for Loss 7,000 7,000 1,775 (5,225)
Total Revenues 1,038,294 1,038,294 1,279,402 241,108
EXPENDITURES
General Governmental Support 10,000 10,000 8,327 1,673
Home and Community Services 636,342 1,005,447 820,508 184,939
Employee Benefits 114,946 114,946 90,080 24,866
Debt Service (Principal and Interest)192,194 201,154 201,154 -
Total Expenditures 953,482 1,331,547 1,120,069 211,478
Excess of Revenues (Expenditures) 84,812 (293,253) 159,333 452,586
OTHER FINANCING SOURCES (USES)
Interfund Transfers (Out)(84,812) (69,812) (69,812) -
Total Other Financing Sources (Uses)(84,812) (69,812) (69,812) -
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)-(363,065) 89,521 452,586$
Appropriated Fund Balance - 363,065
Net Change in Fund Balance -$ -$ 89,521
Fund Balance, Beginning 2,001,571
Fund Balance, Ending 2,091,092$
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
SEWER FUND - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2020
See Notes to Required Supplementary Information
42
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 294,980$ 294,980$ 294,980$ -$
Departmental Income 987,325 987,325 1,251,823 264,498
Intergovernmental Charges 726 726 726 -
Use of Money and Property 100 100 229 129
Sale of Property and Compensation for Loss 7,000 7,000 1,775 (5,225)
Total Revenues 1,290,131 1,290,131 1,549,533 259,402
EXPENDITURES
General Governmental Support 10,000 2,824 - 2,824
Home and Community Services 814,157 950,402 902,253 48,149
Employee Benefits 52,520 52,520 24,900 27,620
Debt Service (Principal and Interest)289,918 289,918 289,918 -
Total Expenditures 1,166,595 1,295,664 1,217,071 78,593
Excess of Revenues (Expenditures) 123,536 (5,533) 332,462 337,995
OTHER FINANCING SOURCES (USES)
Interfund Transfers (Out)(123,536) (97,736) (97,736) -
Total Other Financing Sources (Uses) (123,536) (97,736) (97,736) -
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)-(103,269) 234,726 337,995$
Appropriated Fund Balance - 103,269
Net Change in Fund Balance -$ -$ 234,726
Fund Balance, Beginning 1,275,578
Fund Balance, Ending 1,510,304$
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
43
2020 2019 2018
Service Cost 249,163$ 318,761$ 305,831$
Interest Cost 311,431 333,875 332,908
Changes of Benefit Terms - - -
Differences Between Expected and Actual Experience (1,612,841) -
Changes in Assumptions or Other Inputs 1,722,944 (839,075) 468,886
Benefit Payments (252,066) (229,789) (214,202)
2,031,472 (2,029,069) 893,423
Total OPEB Liability - Beginning 7,472,722 9,501,791 8,608,368
Total OPEB Liability - Ending 9,504,194$ 7,472,722$ 9,501,791$
Covered Employee Payroll 2,317,975$ 1,542,739$ 2,133,472$
Liability as a % of Covered Employee Payroll 410%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.
43a
2017 2016 2015 2014 2013 2012 2011
$ *$ *$ *$ *$ *$ *$ *
*******
*******
*******
*******
*******
*******
*******
8,608,368$ $ *$ *$ *$ *$ *$ *
$ *$ *$ *$ *$ *$ *$ *
TOWN OF CORTLANDVILLE
SCHEDULE OF THE TOWN'S CONTRIBUTIONS
NYSLR PENSION PLAN
FOR THE YEARS ENDED DECEMBER 31,
See Notes to Required Supplementary Information
44
2020 2019 2018
Contractually Required Contribution 278,538$ 276,192$ 281,685$
Contributions in Relation to the Contractually
Required Contribution (278,538)(276,192) (281,685)
Contribution Deficiency (Excess)- - -
Town's Covered Employee Payroll 2,019,083 1,948,061 1,882,997
Contributions as a Percentage of Covered
Employee Payroll 13.80%14.18% 14.96%
* Information Not Available
44a
2017 2016 2015 2014 2013 2012 2011
275,760$ 354,575$ 374,517$ 354,583$ 329,969$ 330,497$ 205,690$
(275,760) (354,575) (374,517) (354,583) (329,969) (330,497) (205,690)
- - - - - - -
1,841,476 1,824,459 1,886,537 1,841,761 1,789,298 1,343,189 *
14.97% 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
45
2020 2019 2018 2017 2016 2015
Town's Proportion of the Net Pension Liability 0.0067205%0.0063537%0.0063251%0.0064701%0.0069912%0.0067653%
Town's Proportionate Share
of the Net Pension Liability 1,779,626$ 450,179$ 204,139$ 607,946$ 1,122,102$ 228,548$
Town's Covered Employee Payroll 2,019,083 1,948,061 1,882,997 1,841,476 1,824,459 1,886,537
Town's Proportionate Share of the Net Pension
Liability as a Percentage of its Covered
Employee Payroll 88.1%23.1%10.8%33.0%61.5%12.1%
Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 86.4%96.3%98.2%90.7%90.7%97.9%
TOWN OF CORTLANDVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2020
46
Note 1 Budget Basis of Accounting
Except as indicated below, budgets are adopted annually on a basis consistent with
accounting principles generally accepted in the United States of America. Appropriations
authorized for the current year are increased by the amount of encumbrances 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. Encumbrances, if
present, are presented in a separate column and are not included in the actual results at
December 31, 2020.
TOWN OF CORTLANDVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2020
47
Note 4 Schedule of Changes in the Town’s Total OPEB Liability and Related Ratios
Changes in assumptions and other inputs reflect the effects of changes in the discount rate
each period. The following are the discount rates in each period:
2020 - 2.74%
2019 - 4.10%
2018 - 3.44%
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 six 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, 2019 actuarial valuation.
TOWN OF CORTLANDVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2020
48
Note 6 Schedule of the Town’s Contributions - NYSLRS Pension Plans and Schedule of the
Town’s Proportionate Share of the Net Pension Liability - Continued
NYSLRS - Continued
Methods and Assumptions Used in Calculations of Actuarially Determined
Contributions
The April 1, 2019 actuarial valuation determines the employer rates for contributions
payable in fiscal year 2020. The following actuarial methods and assumptions were used:
Actuarial Cost Method
Inflation
Salary Scale
Investment Rate of Return
Cost of Living
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 Five-year phase in deferred recognition of each year’s net
investment income/loss in excess of (or less than) 7.5% at a rate of
20% per year, until fully recognized after five years. For fiscal
years ending prior to June 30, 2015, realized and unrealized
appreciation in excess of (or less than) the assumed inflationary
rate of 3.0% is subject to the five-year phase in.
1.3% annually.
2.5%
3.8% in ERS, indexed by service.
7.0% compounded annually, net of investment expenses, including
inflation.
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, 2020, and the related notes to the financial
statements, which collectively comprise the Town’s basic financial statements, and have issued our
report thereon dated November 1, 2021.
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) as a basis for designing 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
50
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 financial statements. 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
November 1, 2021