HomeMy WebLinkAbout2021 Town AuditTOWN OF CORTLANDVILLE
Cortland, New York
FINANCIAL REPORT
For the Year Ended
December 31, 2021
TOWN OF CORTLANDVILLE
TABLE OF CONTENTS
Independent Auditors’ Report 1-3
Required Supplementary Information
Management’s Discussion and Analysis 4-4h
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position 5
Statement of Activities 6
Governmental Fund Financial Statements
Balance Sheet - Governmental Funds 7
Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position 8
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds 9
Reconciliation of Governmental Funds Statement of Revenues, Expenditures,
and Changes in Fund Balances to the Statement of Activities 10
Statement of Fiduciary Net Position 11
Statement of Changes in Fiduciary Net Position 12
Notes to Financial Statements 13-38
Required Supplementary Information
Budgetary Comparison Schedule - General Town-Wide Fund - Non-U.S. GAAP Budget Basis 39
Budgetary Comparison Schedule - General Part-Town Fund - Non-U.S. GAAP Budget Basis 40
Budgetary Comparison Schedule - Highway Part-Town - Non-U.S. GAAP Budget Basis 41
Budgetary Comparison Schedule - Water Fund - Non-U.S. GAAP Budget Basis 42
Budgetary Comparison Schedule - Sewer Fund - Non-U.S. GAAP Budget Basis 43
Schedule of Changes in the Town’s Total OPEB Liability and Related Ratios 44
Schedule of the Town’s Contributions - NYSLRS Pension Plan 45
Schedule of the Town’s Proportionate Share of the Net Pension Liability 46
Notes to Required Supplementary Information 47-49
TOWN OF CORTLANDVILLE
TABLE OF CONTENTS
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 50-51
INDEPENDENT AUDITORS’ REPORT
Town Council
Town of Cortlandville
Cortland, New York
Report on the Audit of the Financial Statements
Opinions
We have audited the 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, 2021, and the related notes to the financial statements, which collectively comprise
the Town’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying 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, as of December 31, 2021, 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.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States (Government Auditing Standards).
Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the
Audit of the Financial Statements section of our report. We are required to be independent of the Town
and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements
relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for 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.
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the Town’s ability to continue
as a going concern for twelve months beyond the financial statement date, including any currently
known information that may raise substantial doubt shortly thereafter.
Insero & Co. CPA s, LLP
The Highest Standard | (800) 232-9547 | www.inserocpa.com
2
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance
and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government
Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the financial
statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements.
Obtain an understanding of internal control relevant to the audit 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, no such opinion is
expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Town’s ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control-related
matters that we identified during the audit.
3
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; and Schedule of the Town’s Proportionate Share of the Net Pension Liability be
presented to supplement the basic financial statements. Such information is the responsibility of
management and, 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
GAAS, 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 January 5,
2023, on our consideration of the Town’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 solely 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 the
effectiveness of the Town’s 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
Town’s internal control over financial reporting and compliance.
Respectfully submitted,
Insero & Co. CPAs, LLP
Certified Public Accountants
Ithaca, New York
January 5, 2023
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2021
4
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, 2021.
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 5.
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 $9,069,120 (net position)
compared to $8,321,819 in 2020.
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 the Actuarial
Accrued Liability. This liability amounted to $9,107,427 at December 31, 2021 and the net
liability increased by $216,305.
During the year ended December 31, 2021, the Town recorded its proportionate share of the net
pension liability along with deferred inflows and outflows of resources related to pensions in
accordance with the parameters of GASB Statement No. 68, “Accounting and Financial Reporting
for Pensions.” Current year recognition resulted in a decrease of Government-wide expenses of
$116,642.
During the year, the Town had expenses that were $747,301 less than the $9,264,807 generated in
tax and other revenues for governmental programs. Comparatively, in the prior year, expenses
were $239,036 more than the $8,290,610 generated in tax and other revenues for government
programs.
The General Funds recorded an increase in fund balances of $1,250,609 in 2021. General Funds
combined fund balances at year end were $2,893,024.
The Town’s long-term debt decreased $342,500 during the current fiscal year, due to a total of
$6,726,500 as a result of debt payments.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2021
4a
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 5-6) 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 5, 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, 2021
4b
Reporting the Town’s Most Significant Funds
Governmental Fund Financial Statements
Analysis of the Town’s Major Funds begins on page 7. 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 11 and 12. 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 the year ended December 31, 2021 increased from $8,321,819
to $9,069,120. A portion of the Town’s net position reflects its investment in capital assets (e.g.
land, buildings, machinery, equipment, and infrastructure) less any related debt used to acquire those
assets that is still outstanding. The Town has chosen not to report infrastructure assets acquired prior
to January 1, 2003, in accordance with the transition provisions of GASB Statement No. 34. An
additional portion of the Town’s net position represents resources subject to external restrictions on
how they may be used and are reported as restricted. The remaining category of total net position is
unrestricted and may be used to meet the government’s ongoing obligations and services to creditors
and citizens.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2021
4c
Our analysis below focuses on the net position (Figure 1), and changes in net position (Figure 2),
of the Town’s Governmental Activities.
Figure 1 - Net Position
Current Assets 8,166,006$ 6,783,972$ 1,382,034$ 20.4%
Noncurrent Assets 1,675,652 1,512,764 162,888 10.8%
Capital Assets, Net 19,086,699 20,005,676 (918,977) (4.6%)
Total Assets 28,928,357 28,302,412 625,945 2.2%
Total Deferred Outflows
of Resources
Current Liabilities 3,728,150 3,599,669 128,481 3.6%
Noncurrent Liabilities 15,491,253 18,010,320 (2,519,067) (14.0%)
Total Liabilities 19,219,403 21,609,989 (2,390,586) (11.1%)
Total Deferred Inflows
of Resources 3,944,931 1,575,395
Net Investment in Capital Assets 9,675,199 10,091,676 (416,477) (4.1%)
Restricted 1,687,380 1,823,359 (135,979) (7.5%)
Unrestricted (2,293,459) (3,593,216) 1,299,757 36.2%
Total Net Position 9,069,120$ 8,321,819$ 747,301$ 9.0%
Percent Change20212020
100,306 3,204,791
Governmental Activities Dollar Change
3.1%
150.4%
3,305,097
2,369,536
The increase in current assets is primarily based on an increase in unrestricted cash. Noncurrent
assets increased largely because of the additions to reserves. Capital assets decreased mainly due to
depreciation expenses exceeding capital outlay. Current liabilities increased largely due to unspent
ARPA funds, offset by decreased BANs payable. Noncurrent liabilities decreased based on decreased
net pension liability proportionate share, other postemployment benefits liability, and bonds payable.
Deferred outflows of resources and deferred inflows of resources changed due to changes in
actuarially determined amounts provided the NYSLRS and an actuarial valuation of the Town’s
Other Postemployment Benefits (OPEB) plan.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2021
4d
Figure 2 demonstrates the operations of the Town’s Governmental Activities.
Figure 2 - Changes in Net Position
Governmental Activities and Total Government Dollar Change
REVENUES
Program Revenues:
Charges for Services 2,902,613$ 3,362,643$ (460,030)$ (13.7%)
Operating Grants and Contributions 732,678 281,908 450,770 159.9%
Capital Grants and Contributions 430,641 87,173 343,468 394.0%
General Revenues:
Property Taxes and Tax Items 2,110,824 2,033,508 77,316 3.8%
Nonproperty Taxes 3,070,786 2,527,104 543,682 21.5%
Use of Money and Property 6,567 8,465 (1,898) (22.4%)
Other General Revenues 10,698 (10,191) 20,889 205.0%
Total Revenues 9,264,807$ 8,290,610$ 974,197$ 11.8%
PROGRAM EXPENSES
General Governmental Support 1,816,826$ 2,008,707$ (191,881)$ (9.6%)
Public Safety 59,613 64,932 (5,319) (8.2%)
Public Health 4,228 3,630 598 16.5%
Transportation 3,307,384 2,899,269 408,115 14.1%
Economic Assistance and Opportunity 20,308 21,500 (1,192) (5.5%)
Culture and Recreation 460,822 414,078 46,744 11.3%
Home and Community Services 2,682,851 2,905,755 (222,904) (7.7%)
Interest on Long-Term Debt 165,474 211,775 (46,301) (21.9%)
Total Expenses 8,517,506$ 8,529,646$ (12,140)$ (0.1%)
CHANGE IN NET POSITION 747,301$ (239,036)$ 986,337$ 412.6%
Percent Change20212020
Charges for services decreased mainly due to decreased water and sewer rents. Operating grants and
contributions increased primarily due to an increase in mortgage tax, youth programming, and
Community Development Grants. Capital grants and contributions increased due to CHIPS funding.
Total expenses decreased in 2021 primarily due to changes in pension and OPEB expenses.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2021
4e
Figures 3 and 4 show the sources of revenue for 2021 and 2020.
Figure 3 - Revenue by Source
2021
Charges for
Services
31.33%Other General
Revenues
0.12%
Operating
Grants and
Contributions
7.91%Capital Grants
and
Contributions
4.65%
Use of Money
and Property
0.07%
Nonproperty
Taxes
33.14%
Real Property
Taxes/Items
22.78%
Figure 4 - 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%
The cost of all Governmental Activities this year was $8,517,506. However, as shown in the Statement
of Activities, the net expense of these activities was $4,451,574, 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 $4,065,932. The Town paid for the remaining
“public benefit” portion of Governmental Activities with $5,198,875 in taxes and other revenues, such
as interest and general entitlements.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2021
4f
The total cost and revenue comparison of the Governmental Activities for each of the Town’s largest
programs follows. Note that the Town’s home and community service activities, which provide
water and sewer services, include debt service costs in their fee structures. Because debt service
costs are not expenses of this function, the excess revenue generated by these activities is used to
make principal and interest payments. The difference between cost and revenue shows the financial
burden placed on the Town’s taxpayers by each of these functions.
Figure 5 - Program Cost and Revenue Comparison - Governmental Activities
2021
0500,0001,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,000 Cost
Revenue
Figure 6 - Program Cost and Revenue Comparison - Governmental Activities
2020
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000 Cost
Revenue
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2021
4g
THE TOWN’S FUNDS
As the Town completed the year, its Governmental Funds, as presented in the Balance Sheet on
page 7, reported an increase in combined fund balance. Figure 7 shows the changes in fund balances
during the year for the Town’s funds.
Figure 7 - Governmental Funds - Fund Balances at Years Ended
2021 2020
General Fund - Town-Wide 973,208$ 850,045$ 123,163$
General Fund - Part-Town 1,919,816 792,370 1,127,446
Highway Fund - Part-Town 2,465,489 2,758,238 (292,749)
Water Fund 2,338,313 2,091,092 247,221
Sewer Fund 1,638,276 1,510,304 127,972
Special Grant Fund 9,257 93,043 (83,786)
Capital Projects Fund (3,280,510)(3,495,939)215,429
Non-Major Fund 275,361 275,306 55
Totals 6,339,210$ 4,874,459$ 1,464,751$
Dollar Change
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 in the General Funds were
$967,726 more than the final budget. Expenditures and other financing uses in the General Funds
were $1,012,982 favorable when compared to budget due to cost containment measures.
Capital Assets and Debt Administration
Capital Assets
At the end of December 31, 2021, the Town had $41,569,718, less accumulated depreciation of
$22,483,019, invested in a broad range of capital assets, including buildings, machinery and
equipment, roads, and bridges.
Figure 8 - Capital Assets, Net of Depreciation
Governmental Activities and
Total Government
Land 1,235,781$ 1,220,406$ 15,375$
Construction in Progress 54,199 - 54,199
Improvements 4,236,779 4,556,255 (319,476)
Buildings 6,893,517 7,111,070 (217,553)
Machinery and Equipment 1,245,611 1,410,986 (165,375)
Infrastructure 5,420,812 5,706,959 (286,147)
Totals 19,086,699$ 20,005,676$ (918,977)$
Dollar Change2021 2020
Depreciation expense during the year amounted to $1,117,320. The Town has not reported any
infrastructure assets prior to 2003, in accordance with the transition provisions of GASB Statement
No. 34.
TOWN OF CORTLANDVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2021
4h
Debt Administration
Debt (bonds and BANs), considered a liability of Governmental Activities, decreased, bringing total
debt to $9,411,500 as of December 31, 2021, as shown in Figure 9. Of the amount of bonds and
notes outstanding, $7,919,500 is subject to the constitutional debt limit and represented 10.9% of the
Town’s statutory debt limit. The Town’s bond rating is currently Aa3 from Moody’s.
Figure 9 - Major Outstanding Debt at Years Ending
Governmental Activities and
Total Government
Bond Anticipation Notes 2,685,000$ 2,845,000$ (160,000)$ (5.6%)
Serial Bonds 6,726,500 7,069,000 (342,500) (4.8%)
Totals 9,411,500$ 9,914,000$ (502,500)$ (5.1%)
2021 2020 Dollar Change Percent Change
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
Approved 2022 budget shows an increase in tax revenue of $67,711. The Town Board did not
override the tax cap.
Water benefit tax decreased $630 and the Sewer benefit tax increased $2,438.
The construction of the Gutchess Lumber Sports Complex is ongoing. The Town received a BAN
in January 2018 to finance part of the project. The BAN has been renewed annually since. 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. The Town received a
grant of $862,000 from Empire State Development in November 2022.
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 into 2023.
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 $178,240. The Town is continuing to work on paperwork to receive funds in 2023.
Contacting the Town’s Financial Management
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors
with a general overview of the Town's finances and to show the Town's accountability for the money it
receives. If you have any questions about the report or need any additional financial information contact
Thomas Williams, Supervisor, Town of Cortlandville, at 3577 Terrace Road, Cortland, New York
13045.
TOWN OF CORTLANDVILLE
STATEMENT OF NET POSITION
DECEMBER 31, 2021
See Notes to Financial Statements
5
Governmental
Activities
ASSETS
Current Assets
Cash and Cash Equivalents - Unrestricted 6,415,441$
Due from State and Federal Governments 166,244
Due from Other Governments 749,807
Other Receivables 564,995
Prepaid Expenses 257,791
Loans Receivable, Current Portion 11,728
Total Current Assets 8,166,006
Noncurrent Assets
Cash and Cash Equivalents - Restricted 1,503,295
Loans Receivable, Long-Term Portion 172,357
Capital Assets, Non-Depreciable 1,289,980
Other Capital Assets, Net of Accumulated Depreciation 17,796,719
Total Noncurrent Assets 20,762,351
Total Assets 28,928,357
DEFERRED OUTFLOWS OF RESOURCES
Pensions 1,627,134
Other Postemployment Benefits 1,677,963
Total Deferred Outflows of Resources 3,305,097
LIABILITIES
Current Liabilities
Accounts Payable 149,158
Accrued Liabilities 100,733
Bond Anticipation Notes Payable 2,685,000
Interest Payable 60,287
Overpayments 18,550
Unearned Revenues 364,922
Current Portion of Noncurrent Obligations:
Bonds Payable 349,500
Total Current Liabilities 3,728,150
Noncurrent Liabilities and Obligations
Bonds Payable 6,377,000
Other Postemployment Benefits Liability 9,107,427
Net Pension Liability - Proportionate Share 6,826
Total Noncurrent Liabilities 15,491,253
Total Liabilities 19,219,403
DEFERRED INFLOWS OF RESOURCES
Pensions 1,986,065
Other Postemployment Benefits 1,958,866
Total Deferred Inflows of Resources 3,944,931
NET POSITION
Net Investment in Capital Assets 9,675,199
Restricted 1,687,380
Unrestricted (2,293,459)
Total Net Position 9,069,120$
TOWN OF CORTLANDVILLE
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2021
See Notes to Financial Statements
6
Net (Expense)
Revenue and
Change in
Net Position
Operating Capital Total
Charges for Grants and Grants and Governmental
Expenses Services Contributions Contributions Activities
Governmental Activities
General Governmental Support 1,816,826$ 272,776$ 368,634$ $ - (1,175,416)$
Public Safety 59,613 232,877 - - 173,264
Public Health 4,228 - - - (4,228)
Transportation 3,307,384 - - 430,641 (2,876,743)
Economic Assistance and Opportunity 20,308 - - - (20,308)
Culture and Recreation 460,822 - - - (460,822)
Home and Community Services 2,682,851 2,396,960 364,044 - 78,153
Interest on Long-Term Debt 165,474 - - - (165,474)
Total Governmental Activities 8,517,506$ 2,902,613$ 732,678$ 430,641$ (4,451,574)
Real Property Taxes 2,013,414
Real Property Tax Items 97,410
Nonproperty Tax Items 3,070,786
Use of Money and Property 6,567
Sale of Property and Compensation for Loss (25,784)
Miscellaneous Local Sources 36,482
5,198,875
747,301
8,321,819
9,069,120$
FUNCTIONS/PROGRAMS
Program Revenues
GENERAL REVENUES
Total General Revenues
Change in Net Position
Net Position - Beginning
Net Position - Ending
TOWN OF CORTLANDVILLE
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2021
See Notes to Financial Statements
7
Non-Major
Governmental
Fund
Special
Revenue Fund
General General Highway Special Capital Highway Total
Town-Wide Part-Town Part-Town Water Sewer Grant Projects Town-Wide Governmental
Fund Fund Fund Fund Fund Fund Fund Fund Funds
Cash and Cash Equivalents - Unrestricted 1,205,183$ 1,408,512$ 1,856,102$ 765,075$ 818,251$ -$ 86,957$ 275,361$ 6,415,441$
Cash and Cash Equivalents - Restricted 175,767 20,672 350,493 448,076 499,030 9,257 - - 1,503,295
Due from Other Funds - - - 718,041 59,460 - - - 777,501
Due from State and Federal Governments - - - 166,244 - - - - 166,244
Due from Other Governments - 485,000 264,807 - - - - - 749,807
Other Receivables 95,034 - - 221,904 248,057 - - - 564,995
Prepaid Expenses 102,023 13,712 99,928 28,246 13,882 - - - 257,791
Loans Receivable - - - - - 184,085 - - 184,085
Total Assets 1,578,007$ 1,927,896$ 2,571,330$ 2,347,586$ 1,638,680$ 193,342$ 86,957$ 275,361$ 10,619,159$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities
Accounts Payable 25,560$ 8,080$ 105,841$ 9,273$ 404$ -$ -$ -$ 149,158$
Accrued Liabilities 100,733 - - - - - - - 100,733
Due to Other Funds 95,034 - - - - - 682,467 - 777,501
Other Liabilities 18,550 - - - - - - 18,550
Bond Anticipation Note Payable - - - - - - 2,685,000 - 2,685,000
Unearned Revenue 364,922 - - - - - - - 364,922
Total Liabilities 604,799 8,080 105,841 9,273 404 -3,367,467 -4,095,864
Unavailable Revenues - - - - - 184,085 - - 184,085
Total Deferred Inflows of Resources -----184,085 --184,085
Fund Balances
Nonspendable 102,023 13,712 99,928 28,246 13,882 - - - 257,791
Restricted 175,767 20,672 350,493 448,076 499,030 9,257 - - 1,503,295
Assigned 450,000 - 2,015,068 1,861,991 1,125,364 - - 275,361 5,727,784
Unassigned 245,418 1,885,432 - - - - (3,280,510) - (1,149,660)
Total Fund Balances (Deficit)973,208 1,919,816 2,465,489 2,338,313 1,638,276 9,257 (3,280,510) 275,361 6,339,210
Total Liabilities, Deferred Inflows of Resources, and Fund Balances 1,578,007$ 1,927,896$ 2,571,330$ 2,347,586$ 1,638,680$ 193,342$ 86,957$ 275,361$ 10,619,159$
ASSETS
Special Revenue Funds
Deferred Inflows of Resources
Major Funds
TOWN OF CORTLANDVILLE
RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
DECEMBER 31, 2021
See Notes to Financial Statements
8
Total Governmental Fund Balances 6,339,210$
19,086,699
The Town’s proportion of the net pension liability is not reported in the funds.(6,826)
Deferred Inflows of Resources - Unavailable Revenue 184,085$
Deferred Inflows of Resources - Pension (1,986,065)
Deferred Inflows of Resources - OPEB (1,958,866)
Deferred Outflows of Resources - Pension 1,627,134
Deferred Outflows of Resources - OPEB 1,677,963 (455,749)
Accrued Interest Payable (60,287)
Other Postemployment Benefits Liability (9,107,427)
Bonds Payable (6,726,500)(15,833,927)
Net Position of Governmental Activities 9,069,120$
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:
Capital assets of the governmental funds,net of accumulated depreciation,used in
Governmental Activities are not financial resources and, therefore, are not reported
in the funds.
TOWN OF CORTLANDVILLE
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2021
See Notes to Financial Statements
9
Non-Major
Governmental
Fund
Special
Revenue Fund
General General Highway Special Capital Highway Total
Town-Wide Part-Town Part-Town Water Sewer Grant
Projects Town-Wide Governmental
Fund Fund Fund Fund Fund Fund Fund Fund Funds
REVENUES
Real Property Taxes 1,648,348$ -$ 365,066$ 104,615$ 264,541$ -$ -$ -$ 2,382,570$
Real Property Tax Items 97,410 - - - - - - - 97,410
Nonproperty Tax Items 109,958 1,430,528 1,640,258 - - - - - 3,180,744
Departmental Income 80,660 146,935 - 953,174 1,074,630 10,031 - - 2,265,430
Intergovernmental Charges - - - - 726 - - - 726
Use of Money and Property 3,116 162 503 171 242 2,315 3 55 6,567
Licenses and Permits 12,619 - - - - - - - 12,619
Fines and Forfeitures 154,755 - - - - - - - 154,755
Sale of Property and Compensation for Loss - - 1,836 - - - - - 1,836
Miscellaneous Local Sources 23,044 723 12,715 - - - - - 36,482
State Sources 275,096 93,538 430,641 - - - - - 799,275
Federal Sources 9,857 - - - - 354,187 - - 364,044
Total Revenues 2,414,863 1,671,886 2,451,019 1,057,960 1,340,139 366,533 3 55 9,302,458
EXPENDITURES
General Governmental Support 1,218,068 50,932 - 33,230 - - - - 1,302,230
Public Safety 59,613 - - - - - - - 59,613
Public Health - 2,891 - - - - - - 2,891
Transportation 228,099 - 2,289,514 - - - - - 2,517,613
Economic Assistance and Opportunity 20,308 - - - - - - - 20,308
Culture and Recreation 87,395 93,100 - - - - - - 180,495
Home and Community Services 10,013 179,605 - 517,213 816,536 450,319 - - 1,973,686
Employee Benefits 495,600 92,790 454,254 86,089 38,261 - - - 1,166,994
Debt Service
Principal 257,500 - - 70,000 175,000 - - - 502,500
Interest 82,774 - - 34,395 84,634 - - - 201,803
Capital Outlay - - - - - - 69,574 - 69,574
Total Expenditures 2,459,370 419,318 2,743,768 740,927 1,114,431 450,319 69,574 - 7,997,707
Excess of Revenues (Expenditures)(44,507) 1,252,568 (292,749) 317,033 225,708 (83,786) (69,571) 55 1,304,751
OTHER FINANCING SOURCES (USES)
Interfund Transfers In 167,670 - - - - 1,849 125,000 - 294,519
Interfund Transfers (Out)(125,122) - (69,812) (97,736) (1,849) - - (294,519)
BANs Redeemed from Appropriations - - - - - - 160,000 - 160,000
Total Other Financing Sources (Uses)167,670 (125,122) -(69,812) (97,736) -285,000 -160,000
Net Changes in Fund Balances 123,163 1,127,446 (292,749) 247,221 127,972 (83,786) 215,429 55 1,464,751
Fund Balances (Deficit), Beginning 850,045 792,370 2,758,238 2,091,092 1,510,304 93,043 (3,495,939) 275,306 4,874,459
Fund Balances (Deficit), Ending 973,208$ 1,919,816$ 2,465,489$ 2,338,313$ 1,638,276$ 9,257$ (3,280,510)$ 275,361$ 6,339,210$
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, 2021
See Notes to Financial Statements
10
Net Change in Fund Balances - Total Governmental Funds 1,464,751$
Capital Outlay 225,963$
Depreciation Expense (1,117,320)
Net Book Value of Disposed Assets (27,620) (918,977)
ERS 116,642
Forgivable Loans Written Off (70,418)$
Repayments (7,221) (77,639)
BANs Redeemed From Appropriations (160,000)$
Debt Principal Payments 502,500 342,500
Change in Interest Payable 36,329
Other Postemployment Benefits Liability (216,305)
Change in Net Position of Governmental Activities 747,301$
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.
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.
TOWN OF CORTLANDVILLE
STATEMENT OF FIDUCIARY NET POSITION
DECEMBER 31, 2021
See Notes to Financial Statements
11
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, 2021
See Notes to Financial Statements
12
Custodial
Fund
Custodial Fund Balance, Beginning of Year -$
Custodial Fund Balance, End of Year -$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
13
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 New York State, 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 2021, the Town collected and the submitted tax revenue in the amount
of $813,244 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, 2021
14
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, 2021
15
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 Town-Wide) and a second which accounts for activity outside the
Village of McGraw (General Part-Town).
Special Revenue Funds
Highway Part-Town 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 Town-Wide 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, 2021
16
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, 2021
17
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, 2021
18
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, 2021, the Town’s deferred inflows of resources related to revenues
consisted of $184,085 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, 2021
19
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, 2021
20
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, 2021
21
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. 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, 2021
22
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 $8,191,768 are either insured or collateralized
with securities held by the pledging financial institution in the Town’s name.
Restricted Cash
Total restricted cash of $1,503,295 is composed of $1,270,797 reserved for capital purposes,
$80,611 reserved for insurance, $9,257 for community development, $65,033 reserved for
debt, $1,647 for park improvements, and $75,950 reserved for retirement contributions.
Note 3 Property Taxes
At December 31, 2021, total real property taxes receivable was $95,034. No allowance for
uncollectible taxes has been reported, as all property taxes are deemed collectible.
Note 4 Other Receivables
Other receivables at December 31, 2021 were as follows:
Description Amount
General Fund Relevied taxes 95,034$
Water Fund Rents 221,904
Sewer Fund Rents 248,057
Total 564,995$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
23
Note 5 Capital Assets
A summary of changes in capital assets at December 31, 2021 is as follows:
Deletions/Balance at
Governmental Activities Additions Reclassifications 12/31/2021
Non-Depreciable Capital Assets
Land 1,220,406$ 15,375$ -$ 1,235,781$
Construction in Progress - 54,199 - 54,199
Total Non-Depreciable Capital Assets 1,220,406 69,574 - 1,289,980
Depreciable Capital Assets
Buildings 9,362,194 - - 9,362,194
Improvements 6,343,426 - - 6,343,426
Machinery and Equipment 6,000,221 156,389 (40,000) 6,116,610
Infrastructure 18,457,508 - - 18,457,508
Total Depreciable Capital Assets 40,163,349 156,389 (40,000) 40,279,738
Total Historical Cost 41,383,755 225,963 (40,000) 41,569,718
Less Accumulated Depreciation
Buildings 2,251,124 217,553 - 2,468,677
Improvements 1,787,171 319,476 - 2,106,647
Machinery and Equipment 4,589,235 294,144 (12,380) 4,870,999
Infrastructure 12,750,549 286,147 - 13,036,696
Total Accumulated Depreciation 21,378,079 1,117,320 (12,380) 22,483,019
Governmental Activities Capital Assets, Net 20,005,676$ (891,357)$ (27,620)$ 19,086,699$
Balance at
12/31/2020
Depreciation expense was charged to functions as follows:
General Governmental Support 71,431$
Transportation 330,553
Culture and Recreation 201,949
Home and Community Services 513,387
Total 1,117,320$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
24
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:
2021 2020 2019
ERS $ 289,641 $ 278,538 $ 276,192
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
25
Note 6 Pension Obligations - New York State and Local Employees’ Retirement System (ERS)
(the System) - Continued
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources, and
Deferred Inflows of Resources Related to Pensions
At December 31, 2021, 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, 2021. 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, 2020
Net Pension Liability 99,573,957$
Town's Proportionate Share of the
Plan's Total Net Pension Liability 6,826
Town's Share of the Plan's
Total Net Pension Liability 0.0068552%
For the year ended December 31, 2021, the Town recognized pension expense of $176,473
for ERS in the financial statements. At December 31, 2021, the Town reported deferred
outflows of resources and deferred inflows of resources related to the pensions from the
following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences Between Expected and Actual Experience 83,363$ -$
Changes of Assumptions 1,255,062 23,671
Net Differences Between Projected and Actual
Earnings on Pension Plan Investments - 1,960,799
Changes in Proportion and Differences
Between the Town’s Contributions
and Proportionate Share of Contributions 62,428 1,595
Town’s Contributions Subsequent to the
Measurement Date 226,281 -
Total $ 1,627,134 $ 1,986,065
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
26
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, 2022. 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
2022 (93,396)$
2023 (23,726)
2024 (94,939)
2025 (373,151)
2026 -
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, 2021
Actuarial Valuation Date April 1, 2020
Investment Rate of Return 5.9%
Salary Increases 4.4%
Cost of Living Adjustments 1.4%
Inflation Rate 2.7%
Annuitant mortality rates are based on April 1, 2015 - March 31, 2020, System experience
with adjustments for mortality improvements based on the Society of Actuaries’ Scale
MP-2020.
The actuarial assumptions used in the April 1, 2020, valuation are based on the results of
an actuarial experience study for the period April 1, 2015 - March 31, 2020.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
27
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, 2021
Asset Type:
Domestic Equities 4.05%
International Equities 6.30%
Real Estate 4.95%
Private Equities 6.75%
Opportunistic Portfolio/ARC 4.50%
Real Assets 5.95%
Cash 0.50%
Credit 3.63%
Discount Rate
The discount rate used to calculate the total pension liability was 5.9%. 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, 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
(4.9%) (5.9%)
Town’s Proportionate Share of the
Net Pension Liability 1,894,605$ 6,826$ (1,734,148)$
ERS
1% Increase
(6.9%)
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
28
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, 2021
Employers' Total Pension Liability 220,680,157$
Plan Net Position (220,580,583)
Employers’ Net Pension Liability 99,574$
Ratio of Plan Net Position to the
Employers' Total Pension Liability 99.9%
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, 2021
represent the projected employer contribution for the period of April 1, 2021 through
December 31, 2021 based on estimated ERS wages multiplied by the employer’s
contribution rate, by tier. Accrued retirement contributions as of December 31, 2021
amounted to $-0-.
Current Year Activity
Changes in the net pension liability and deferred outflows and inflows of resources for the
year ended December 31, 2021 resulted in the following effect on net position:
Beginning Ending
Balance Change Balance
ERS
Net Pension Liability 1,779,626$ (1,772,800)$ 6,826$
Deferred Outflows of Resources (1,335,600) (291,534) (1,627,134)
Deferred Inflows of Resources 38,373 1,947,692 1,986,065
Total Effect on Net Position 482,399$ (116,642)$ 365,757$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
29
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, 2021, the following employees
were covered by the benefit terms:
Inactive Employees or Beneficiaries
Currently Receiving Benefit Payments 22
Active Employees Fully
Eligible for Benefits 37
Total 59
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
30
Note 7 Other Postemployment Benefits - Continued
Total OPEB Liability
The Town’s total OPEB liability of $9,107,427 was measured as of January 1, 2021 and was
determined by an actuarial valuation as of January 1, 2021.
Actuarial Assumptions and Other Inputs - The total OPEB liability in the January 1, 2021
actuarial valuation was determined using the following actuarial assumptions and other
inputs, applied to all periods included in the measurement unless otherwise specified:
Single Discount Rate 2.12%
Salary Scale 3.5%
Inflation Rate 2.5%
Healthcare Cost Trend Rate 7.5%, declining to 3.94% in 2079
Mortality rates were based on the RPH-2014 Mortality Table with generational mortality
adjusted to 2006 using scale MP-2014 and projected forward with scale MP-2021.
Turnover rates were based on the experience under the NYS and Local Retirement System,
as reported in June 2019.
Retirement rates were based on the experience under the New York State and Local
Retirement System, as reported in August 2020.
The actuarial assumptions used in the January 1, 2021 valuation were consistent with the
requirements of GASB Statement No. 75 and Actuarial Standards of Practice (ASOPs).
Total OPEB
Liability
Balance at December 31, 2020 9,504,194$
Changes for the Year
Service Cost 340,040
Interest Cost 266,186
Changes of Benefit Terms -
Differences Between Expected and Actual Experience (1,070,026)
Changes in Assumptions or Other Inputs 325,849
Benefit Payments (258,816)
(396,767)
Balance at December 31, 2021 9,107,427$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
31
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
(1.12%)
Discount Rate
(2.12%)
1% Increase
(3.12%)
Total OPEB Liability 10,738,227$ 9,107,427$ 7,810,069$
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 7,666,818$ 9,107,427$ 10,974,068$
1% Decrease
Healthcare
Cost Trend
Rate 1% Increase
For the year ended December 31, 2021, the Town recognized OPEB expense of $511,262.
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to OPEB
At December 31, 2021, the Town reported deferred outflows of resources and deferred
inflows of resources related to OPEB from the following sources:
Differences Between Expected and Actual Experience -$ 1,589,423$
Changes in Assumptions or Other Inputs 1,470,025 369,443
Contributions Subsequent to Measurement Date 207,938 -
Total 1,677,963$ 1,958,866$
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
32
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, 2022. 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
2022 (181,983)$
2023 (233,117)
2024 24,113
2025 (16,932)
2026 (80,922)
2027 and Thereafter -
December 31,
Fiscal Year Ending
Current Year Activity
The following is a summary of current year activity:
Beginning Ending
Balance Change Balance
Other Postemployment Benefits Liability 9,504,194$ (396,767)$ 9,107,427$
Deferred Outflows of Resources (1,869,191) 191,228 (1,677,963)
Deferred Inflows of Resources 1,537,022 421,844 1,958,866
Total Effect on Net Position 9,172,025$ 216,305$ 9,388,330$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
33
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
12/31/2020 Issued Redeemed 12/31/2021
Bond Anticipation Notes 2,845,000$ 2,845,000$ 3,005,000$ 2,685,000$
Interest expense on short-term debt for fiscal year 2021 was $39,119. BANs redeemed from
appropriations totaled $160,000.
Note 9 Long-Term Debt
At December 31, 2021, the total outstanding indebtedness of the Town aggregated
$9,411,500. Of this amount, $7,919,500 was subject to the constitutional debt limit and
represented 10.9% of its debt limit.
Serial Bonds and Notes
The Town borrows money in order to acquire land or equipment or construct buildings and
improvements. This enables the cost of these capital assets to be borne by the present and
future taxpayers receiving the benefit of the capital assets. These long-term liabilities, which
are full faith and credit debt of the local government, are recorded in the general Government-
wide financial statements. The provision to be made in future budgets for capital
indebtedness represents the amount exclusive of interest, authorized to be collected in future
years from taxpayers and others for liquidation of the long-term liabilities.
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
34
Note 9 Long-Term Debt - Continued
Debt Maturity Schedule
The following is a summary of bonds outstanding at December 31, 2021 with corresponding
maturity schedules:
Description of Issue
Date
Issued
Original
Amount
Interest
Rate
Final
Maturity
Balance
Outstanding
Polkville Water Improvements 2012 980,000$ 2.00%2050 874,000$
Town Hall Building 2007 275,000 4.57%2026 137,500
Town Hall Expansion 2006 325,000 4.57%2026 162,500
NYSEFC Sewer Improvements 2005 1,475,000 2.48%2035 1,160,000
Route 13 Sewer Project 2016 2,754,000 1.63%2053 2,470,000
Public Improvements 2017 1,675,000 2-3.00%2032 1,285,000
Highway Garage Project 2018 750,000 3.95%2038 637,500
Total 6,726,500$
Interest paid on certain Serial Bonds varies from year to year, in accordance with the interest
rates specified in bond agreements.
The following is a summary of maturing debt service requirements for general obligation
bonds and notes:
Bonds Bonds
Year Principal Interest Total
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 374,500 116,141 490,641
2027-2031 1,681,500 449,553 2,131,053
2032-2036 1,206,500 251,296 1,457,796
2037-2041 624,000 152,028 776,028
2042-2046 599,000 98,121 697,121
2047-2051 611,000 44,604 655,604
2052-2053 195,000 4,761 199,761
Total 6,726,500$ 1,675,575$ 8,402,075$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
35
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, 2021:
Balance Maturities/Balance
Governmental Activities 12/31/2020 Payments 12/31/2021
General Obligation Bonds 7,069,000$ -$ (342,500)$ 6,726,500$ 349,500$
Amount Due
Within One Year
New Issues/
Additions
Interest Paid on Short-Term and Long-Term Debt 201,803$
Prior Year Accrued Interest (96,616)
Current Year Accrued Interest 60,287
Interest Expense 165,474$
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, 2021 are as follows:
Interfund Interfund Interfund Interfund
Receivables Payables Revenue Expense
General Fund - Town-Wide -$ 95,034$ 167,670$ -$
General Fund - Part-Town - - - 125,122
Water Fund 718,041 - - 69,812
Sewer Fund 59,460 - - 97,736
Special Grant Fund - - 1,849 1,849
Capital Projects Fund - 682,467 125,000 -
Total 777,501$ 777,501$ 294,519$ 294,519$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
36
Note 11 Reconciliation Between Restricted Fund Balance and Restricted Net Position
Restricted Fund Balance in Governmental Fund Financial Statements 1,503,295$
Reconciling Item: Special Grant Fund Deferred Inflows of Resources 184,085
Restricted Net Position in the Government-Wide
Financial Statements 1,687,380$
Note 12 Fund Balance Detail
At December 31, 2021, 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 102,023$ 13,712$ 99,928$ 28,246$ 13,882$ -$ -$
Total Nonspendable
Fund Balance 102,023$ 13,712$ 99,928$ 28,246$ 13,882$ -$ -$
Restricted
Unemployment
Insurance Reserve 80,611$ -$ -$ -$ -$ -$ -$
Retirement
Contribution Reserve 30,123 19,025 353 13,036 13,413 - -
Reserve for Debt 65,033 - - - - - -
Other - 1,647 - - - 9,257 -
Capital Reserve - - 350,140 435,040 485,617 - -
Total Restricted
Fund Balance 175,767$ 20,672$ 350,493$ 448,076$ 499,030$ 9,257$ -$
Assigned
Appropriated for Next
Year’s Budget 450,000$ -$ 806,670$ -$ -$ -$ 275,062$
Encumbrance - - 197,624 - - - -
Remaining
Fund Balance - - 1,010,774 1,861,991 1,125,364 - 299
Total Assigned
Fund Balance 450,000$ -$ 2,015,068$ 1,861,991$ 1,125,364$ -$ 275,361$
TOWN OF CORTLANDVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021
37
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, 2021 of the Governmental Funds reserves were as follows:
Beginning Interest Ending
Balance Additions Earned Appropriated Balance
Unemployment Insurance Reserve 80,594$ -$ 17$ -$ 80,611$
Retirement Contribution Fund Reserve 75,930 - 20 - 75,950
Park Improvements 1,646 - 1 - 1,647
Capital Reserve 1,179,762 90,800 235 - 1,270,797
Reserve for Debt 130,660 - - (65,627) 65,033
Special Grant Fund 93,043 366,533 - (450,319) 9,257
Total Restricted Fund Balance 1,561,635$ 457,333$ 273$ (515,946)$ 1,503,295$
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, 2021
38
Note 16 Stewardship, Compliance and Accountability
Deficit Fund Balance
At December 31, 2021, the Capital Projects Fund had a deficit fund balance of $3,280,510.
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 $2,293,459 at December 31, 2021. This is
primarily due to the reporting of the OPEB liability and is not expected to be eliminated in the
near term.
Note 17 Tax Abatements
For the year ended December 31, 2021, the Town was subject to tax abatements negotiated
by the Cortland County Industrial Development Agency (CCIDA). Abatement agreements
entered into by CCIDA reduce property taxes collected by the Town. During 2021,
additional agreements with solar producers began; these agreements call for more level
payments, and cause the payments received to be higher than taxes in the initial years.
Information relevant to disclosure of the program for the year ended December 31, 2021 is
as follows:
Amount of
Tax Abatement Program Taxes Abated
Economic Development:
Real Property Tax (38,541)$
Total (38,541)$
Note 18 Subsequent Event
On January 5, 2022, the Town issued a $2,000,000 bond for construction at the Gutchess
Sports Park.
On January 27, 2022, the Town issued a $3,815,000 BAN, partly to renew BANs
outstanding at December 31, 2021.
Note 19 Economic Uncertainty - COVID-19
In March 2020, the COVID-19 outbreak was declared to be a pandemic. Actions taken around
the world to help mitigate the spread of the coronavirus include restrictions on travel,
quarantines in certain areas, and forced closures of certain types of public places and
businesses. Coronavirus and actions taken to mitigate it have had and are expected to continue
to have an adverse impact on the economies and financial markets of many countries,
including the area in which the Town exists. While it is unknown how long these conditions
will last and what the complete financial effect will be, the Town expects disruptions to
businesses and residents, which could negatively impact operating results in future periods.
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
GENERAL TOWN-WIDE FUND - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2021
See Notes to Required Supplementary Information
39
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 1,648,348$ 1,648,348$ 1,648,348$ -$
Real Property Tax Items 90,000 90,000 97,410 7,410
Nonproperty Tax Items 110,000 110,000 109,958 (42)
Departmental Income 52,250 52,250 80,660 28,410
Use of Money and Property 19,000 19,000 3,116 (15,884)
Licenses and Permits 11,000 11,000 12,619 1,619
Fines and Forfeitures 150,000 150,000 154,755 4,755
Miscellaneous Local Sources - - 23,044 23,044
State Sources 138,000 138,000 275,096 137,096
Federal Sources 247 247 9,857 9,610
Total Revenues 2,218,845 2,218,845 2,414,863 196,018
EXPENDITURES
General Governmental Support 1,897,324 1,911,132 1,218,068 693,064
Public Safety 76,500 76,500 59,613 16,887
Transportation 307,880 307,880 228,099 79,781
Economic Assistance and Opportunity 23,000 23,000 20,308 2,692
Culture and Recreation 167,264 167,264 87,395 79,869
Home and Community Services 30,500 30,500 10,013 20,487
Employee Benefits 521,176 521,176 495,600 25,576
Debt Service (Principal and Interest)380,416 380,416 340,274 40,142
Total Expenditures 3,404,060 3,417,868 2,459,370 958,498
Excess of Revenues (Expenditures) (1,185,215) (1,199,023) (44,507) 1,154,516
OTHER FINANCING SOURCES (USES)
Proceeds of Obligations 500,000 500,000 - (500,000)
Interfund Transfers In 167,548 167,548 167,670 122
Total Other Financing Sources (Uses)667,548 667,548 167,670 (499,878)
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)(517,667) (531,475) 123,163 654,638$
Appropriated Fund Balance 517,667 531,475
Net Change in Fund Balance -$ -$ 123,163
Fund Balance, Beginning 850,045
Fund Balance, Ending 973,208$
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
GENERAL PART-TOWN FUND - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2021
See Notes to Required Supplementary Information
40
Original Final
Budget Budget Actual Variance
REVENUES
Nonproperty Tax Items 250,000$ 250,000$ 1,430,528$ 1,180,528$
Departmental Income 135,200 135,200 146,935 11,735
Use of Money and Property 100 100 162 62
Miscellaneous Local Sources - - 723 723
State Sources 15,000 15,000 93,538 78,538
Total Revenues 400,300 400,300 1,671,886 1,271,586
EXPENDITURES
General Governmental Support 71,811 71,811 50,932 20,879
Public Health 4,000 4,000 2,891 1,109
Culture and Recreation 65,350 93,100 93,100 -
Home and Community Services 245,516 245,516 179,605 65,911
Employee Benefits 109,497 109,497 92,790 16,707
Total Expenditures 496,174 523,924 419,318 104,606
Excess of Revenues (Expenditures) (95,874) (123,624) 1,252,568 1,376,192
OTHER FINANCING SOURCES (USES)
Interfund Transfers (Out) - (75,000) (125,122) (50,122)
Total Other Financing Sources (Uses)-(75,000) (125,122) (50,122)
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)(95,874) (198,624) 1,127,446 1,326,070$
Appropriated Fund Balance 95,874 198,624
Net Change in Fund Balance -$ -$ 1,127,446
Fund Balance, Beginning 792,370
Fund Balance, Ending 1,919,816$
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
HIGHWAY PART-TOWN - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2021
See Notes to Required Supplementary Information
41
Original Final
Budget Budget Actual Encumbrances Variance
REVENUES
Real Property Taxes 363,608$ 363,608$ 365,066$ -$ 1,458$
Nonproperty Tax Items 1,750,000 1,750,000 1,640,258 - (109,742)
Use of Money and Property 150 150 503 - 353
Sale of Property and Compensation for Loss 42,700 42,700 1,836 - (40,864)
Miscellaneous Local Sources - - 12,715 - 12,715
State Sources 193,481 193,481 430,641 - 237,160
Total Revenues 2,349,939 2,349,939 2,451,019 - 101,080
EXPENDITURES
Transportation 3,164,539 3,362,163 2,289,514 197,624 875,025
Employee Benefits 535,400 535,400 454,254 - 81,146
Total Expenditures 3,699,939 3,897,563 2,743,768 197,624 956,171
Excess of Revenues (Expenditures) (1,350,000) (1,547,624) (292,749) (197,624) 1,057,251
OTHER FINANCING SOURCES (USES)
Proceeds of Obligations 400,000 400,000 - - (400,000)
Total Other Financing Sources (Uses)400,000 400,000 - -(400,000)
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)(950,000) (1,147,624) (292,749) (197,624)$ 657,251$
Appropriated Fund Balance 950,000 1,147,624
Net Change in Fund Balance -$ -$ (292,749)
Fund Balance, Beginning 2,758,238
Fund Balance, Ending 2,465,489$
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
WATER FUND - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2021
See Notes to Required Supplementary Information
42
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 104,615$ 104,615$ 104,615$ -$
Departmental Income 855,036 855,036 953,174 98,138
Use of Money and Property - - 171 171
Total Revenues 959,651 959,651 1,057,960 98,309
EXPENDITURES
General Governmental Support 10,000 38,033 33,230 4,803
Home and Community Services 642,811 642,811 517,213 125,598
Employee Benefits 117,413 117,413 86,089 31,324
Debt Service (Principal and Interest)104,615 104,615 104,395 220
Total Expenditures 874,839 902,872 740,927 161,945
Excess of Revenues (Expenditures) 84,812 56,779 317,033 260,254
OTHER FINANCING SOURCES (USES)
Interfund Transfers (Out)(69,812) (69,812) (69,812) -
Total Other Financing Sources (Uses)(69,812) (69,812) (69,812) -
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)15,000 (13,033) 247,221 260,254$
Appropriated Fund Balance/Additions to Reserves (15,000) 13,033
Net Change in Fund Balance -$ -$ 247,221
Fund Balance, Beginning 2,091,092
Fund Balance, Ending 2,338,313$
TOWN OF CORTLANDVILLE
BUDGETARY COMPARISON SCHEDULE
SEWER FUND - NON-U.S. GAAP BUDGET BASIS
FOR THE YEAR ENDED DECEMBER 31, 2021
See Notes to Required Supplementary Information
43
Original Final
Budget Budget Actual Variance
REVENUES
Real Property Taxes 264,541$ 264,541$ 264,541$ -$
Departmental Income 1,004,060 1,004,060 1,074,630 70,570
Intergovernmental Charges 726 726 726 -
Use of Money and Property - - 242 242
Total Revenues 1,269,327 1,269,327 1,340,139 70,812
EXPENDITURES
General Governmental Support 10,000 - - -
Home and Community Services 823,114 836,216 816,536 19,680
Employee Benefits 53,036 53,036 38,261 14,775
Debt Service (Principal and Interest)259,641 259,641 259,634 7
Total Expenditures 1,145,791 1,148,893 1,114,431 34,462
Excess of Revenues (Expenditures) 123,536 120,434 225,708 105,274
OTHER FINANCING SOURCES (USES)
Interfund Transfers (Out)(97,736) (97,736) (97,736) -
Total Other Financing Sources (Uses) (97,736) (97,736) (97,736) -
Excess of Revenues and Other Financing Sources
Over Expenditures and Other Financing (Uses)25,800 22,698 127,972 105,274$
Appropriated Fund Balance/Additions to Reserves (25,800) (22,698)
Net Change in Fund Balance -$ -$ 127,972
Fund Balance, Beginning 1,510,304
Fund Balance, Ending 1,638,276$
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
44
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Service Cost 340,040$ 249,163$ 318,761$ 305,831$ $ *$ *$ *$ *$ *$ *
Interest Cost 266,186 311,431 333,875 332,908 ******
Changes of Benefit Terms - - - - ******
Differences Between Expected and Actual Experience (1,070,026) - (1,612,841) - ******
Changes in Assumptions or Other Inputs 325,849 1,722,944 (839,075) 468,886 ******
Benefit Payments (258,816) (252,066) (229,789) (214,202) ******
(396,767) 2,031,472 (2,029,069) 893,423 ******
Total OPEB Liability - Beginning 9,504,194 7,472,722 9,501,791 8,608,368 ******
Total OPEB Liability - Ending 9,107,427$ 9,504,194$ 7,472,722$ 9,501,791$ 8,608,368$ $ *$ *$ *$ *$ *
Covered Employee Payroll 2,098,429$ 2,317,975$ 1,542,739$ 2133472 $ *$ *$ *$ *$ *$ *
Liability as a % of Covered Employee Payroll 434%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.
TOWN OF CORTLANDVILLE
SCHEDULE OF THE TOWN'S CONTRIBUTIONS
NYSLR PENSION PLAN
FOR THE YEARS ENDED DECEMBER 31,
See Notes to Required Supplementary Information
45
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Contractually Required Contribution 289,641$ 278,538$ 276,192$ 281,685$ 275,760$ 354,575$ 374,517$ 354,583$ 329,969$ 330,497$
Contributions in Relation to the Contractually
Required Contribution (289,641)(278,538) (276,192) (281,685) (275,760) (354,575) (374,517) (354,583) (329,969) (330,497)
Contribution Deficiency (Excess)- - - - - - - - - -
Town's Covered Employee Payroll 2,036,563 2,019,083 1,948,061 1,882,997 1,841,476 1,824,459 1,886,537 1,841,761 1,789,298 1,343,189
Contributions as a Percentage of Covered
Employee Payroll 14.22%13.80% 14.18% 14.96% 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
46
2021 2020 2019 2018 2017 2016 2015
Town's Proportion of the Net Pension Liability 0.0068552%0.0067205%0.0063537%0.0063251%0.0064701%0.0069912%0.0067653%
Town's Proportionate Share
of the Net Pension Liability 6,826$ 1,779,626$ 450,179$ 204,139$ 607,946$ 1,122,102$ 228,548$
Town's Covered Employee Payroll 1,949,914 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 0.4%88.1%23.1%10.8%33.0%61.5%12.1%
Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 99.9%86.4%96.3%98.2%90.7%90.7%97.9%
TOWN OF CORTLANDVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2021
47
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, 2021.
TOWN OF CORTLANDVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2021
48
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:
2021 - 2.12%
2020 - 2.74%
2019 - 4.10%
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 partial 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
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, 2020 actuarial valuation.
TOWN OF CORTLANDVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2021
49
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, 2020 actuarial valuation determines the employer rates for contributions
payable in fiscal year 2021. The following actuarial methods and assumptions were used:
Actuarial Cost Method
Inflation
Salary Scale
Investment Rate of Return
Cost of Living 1.3% annually.
2.5%
4.2% in ERS, indexed by service.
6.8% compounded annually, net of investment expenses, including
inflation.
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.
Note 7 Overexpenditures
Interfund transfer expenditures were overexpended in the General Part-Town Fund. The final
budget appropriation was $75,000 and actual expenditures were $125,122.
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, 2021, and the related notes to the financial
statements, which collectively comprise the Town’s basic financial statements, and have issued our
report thereon dated January 5, 2023.
Report on 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
51
Report on 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
January 5, 2023
COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE
AT THE CONCLUSION OF THE AUDIT
Town Council
Town of Cortlandville
Cortland, New York
We have audited the financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of the Town of Cortlandville (the Town), for the year ended
December 31, 2021. Professional standards require that we provide you with information about our
responsibilities under generally accepted auditing standards, Government Auditing Standards, as
well as certain information related to the planned scope and timing of our audit. We have
communicated such information in our letter to you dated April 5, 2022. Professional standards
also require that we communicate to you the following information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The
significant accounting policies used by the Town are described in Note 1 to the financial statements.
During the year ended December 31, 2021, no new accounting policies were adopted, and the
application of existing policies was not changed. We noted no transactions entered into by the Town
during the year for which there is a lack of authoritative guidance or consensus. All significant
transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and
are based on management’s knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive because of
their significance to the financial statements and because of the possibility that future events
affecting them may differ significantly from those expected. The most sensitive estimates affecting
the Town’s financial statements were other postemployment benefits (OPEB) liability,
proportionate share of net pension liabilities, and the deferred inflows and outflows of resources
related to pensions and OPEB.
Management’s estimate of the OPEB liability and the deferred outflows and inflows of
resources related to OPEB is based on the actuarially determined cost of future retiree benefits.
Management’s estimate of the Town’s proportionate share of net pension liabilities and the
deferred outflows and inflows of resources related to pensions is based on its proportionate
share of the New York State and Local Employee’s Retirement System actuarially determined
net pension liability. We evaluated the key factors and assumptions used to develop the
estimates in determining they are reasonable in relation to the financial statements taken as a
whole.
Insero & Co. CPA s, LLP
The Highest Standard | (800) 232-9547 | www.inserocpa.com
Town of Cortlandville
January 5, 2023
Page 2
Certain financial statement disclosures are particularly sensitive because of their significance to
financial statement users. The most sensitive disclosures affecting the financial statements were:
The disclosures related to capital assets, pension obligations, OPEB, long-term debt, and fund
balance in Notes 5, 6, 7, 9, 12, and 13 to the financial statements.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and
completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified
during the audit, other than those that are clearly trivial, and communicate them to the appropriate
level of management. There were no material corrected or uncorrected misstatements detected as a
result of audit procedures.
Disagreements With Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditors’ report. We are pleased to report that no such disagreements arose during
the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated January 5, 2023.
Management Consultations With Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation
involves application of an accounting principle to the governmental unit’s financial statements or a
determination of the type of auditors’ opinion that may be expressed on those statements, our
professional standards require the consulting accountant to check with us to determine that the
consultant has all the relevant facts. To our knowledge, there were no such consultations with other
accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the Town’s auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses
were not a condition to our retention.
Town of Cortlandville
January 5, 2023
Page 3
Other Matters
We applied certain limited procedures to Management’s Discussion and Analysis, Budgetary
Comparison Schedules, Schedule of Changes in the Town’s Total OPEB Liability and Related
Ratios, Schedule of Town’s Contributions - NYSLRS Pension Plan, and Schedule of the Town’s
Proportionate Share of the Net Pension Liability, which are required supplementary information
(RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of
management regarding 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 did not audit the RSI
and do not express an opinion or provide any assurance on the RSI.
Restriction on Use
This information is intended solely for the use of the Town Council and management of the Town
of Cortlandville and is not intended to be, and should not be, used by anyone other than these
specified parties.
Respectfully submitted,
Insero & Co. CPAs, LLP
Certified Public Accountants
Ithaca, New York
January 5, 2023
MANAGEMENT COMMENT LETTER
Town Council
Town of Cortlandville
Cortland, New York
In planning and performing our audit of the financial statements of the governmental activities, each
major fund, and the aggregate remaining fund information of the Town of Cortlandville (the Town)
for the year ended December 31, 2021, in accordance with auditing standards generally accepted in
the United States of America, we considered the Town’s internal control over financial reporting
(internal control) as a basis for designing our auditing procedures for the purpose of expressing our
opinion on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the 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
combination of deficiencies in internal control, such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected, on a timely basis.
Our consideration of internal control was for the limited purpose described in the first paragraph
and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies, and therefore, material weaknesses or significant
deficiencies may exist that were not identified. 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.
OTHER MATTERS
Prior Year Finding - Resolved
Loans Receivable
Finding:
During our prior year audit, there was a delinquent loan receivable in the Special Grant Fund. Upon
inquiry, there had been no communication with the loan recipient regarding this delinquency.
Resolution:
The Town subsequently contacted the loan recipient regarding the delinquency.
Insero & Co. CPA s, LLP
The Highest Standard | (800) 232-9547 | www.inserocpa.com
Town of Cortlandville
January 5, 2023
Page 2
Cash Disbursements
Prior Year Finding:
During our prior year testing, 8 of 10 purchase orders were approved after the invoice date. This
reduces the effectiveness of the budget system.
Resolution:
We noted no purchase orders dated after the invoice date in the current audit.
DISCUSSION ITEM
Impact of Future Standards of the Governmental Accounting Standards Board (GASB)
The Town is in the process of assessing the future effects of each of the following GASB Statements.
GASB has issued 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. 91, “Conduit Debt Obligations,” effective for the year ending
December 31, 2023.
GASB has issued Statement No. 92, “Omnibus 2020,” effective for the year ending December
31, 2022.
Town management should consider the impact each of these pronouncements may have on its
financial statements and will implement them as applicable and when material.
We would like to take this opportunity to express our appreciation to the Town’s management and
staff for their time and cooperation in aiding us in our audit work. Their assistance resulted in an
expedient and efficient audit process.
This communication is intended solely for the information and use of the Town Council and
management of the Town of Cortlandville and is not intended to be, and should not be, used by
anyone other than these specified parties.
Respectfully submitted,
Insero & Co. CPAs, LLP
Certified Public Accountants
Ithaca, New York
January 5, 2023