HomeMy WebLinkAbout2015 Town of Ithaca Audit ReportFINANCIAL STATEMENTS OF
TOWN OF ITHACA
ITHACA, NEW YORK
FOR THE YEAR ENDED DECEMBER 31, 2015
TOWN OF ITHACA
INDEX
December 31, 2015
Independent Auditor's Report _______________________________________________________________________________________________________________ l
Management's Discussion and Analysis ______________________________________________________________________________________________ 2
Financial Statements _____________________________________________________________________________________________________________________________ 3
Independent Auditor's Report on Internal Control over
Financial Reporting and on Compliance and Other
Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing
Standards ----------------------------------------·-·····------------------------------------------------------------------------------------------4
TOWN OF ITHACA
TABLE OF CONTENTS
December 31, 2015
Page
Independent Auditor's Report ......................................................................................................... -
Management's Discussion and Analysis ............................................................................... I-XVII
Statement of Net Position ................................................................................................................ 1
Statement of Activities ..................................................................................................................... 2
Balance Sheet -Governmental Funds ............................................................................................. 3
Reconciliation of the Total Fund Balances Shown in the Governmental
Funds to the Statement of Net Position ..................................................................................... .4
Statement of Revenues, Expenditures, and Changes in Fund
Balances -Governmental Funds ........................................................................................... 5-6
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balance of the Governmental Funds to the
Change in Net Position Shown in the Statement of Activities .............................................. 7-8
Statement of Net Position -Proprietary Funds ................................................................................ 9
Statement of Revenues, Expenses, and Changes in Fund Net Position -
Proprietary Funds ..................................................................................................................... 10
Statement of Cash Flows -Proprietary Funds ............................................................................... 11
Statement of Fiduciary Net Position -Agency Funds ................................................................... 12
Notes to Financial Statements .................................................................................................. 13-40
Schedule of Funding Progress for the Retiree Health Plan ........................................................ .41
Schedule of Revenues and Expenditures Compared to Budget -
Major Funds ............................................................................................................................. 42
Schedule of the Town 's Proportionate Share of the Net Pension Liability .................................. .43
Schedule of the Town's Pension Contributions ............................................................................ .44
Capital Projects Fund -Detailed Balance Sheet .................................................................... .45
Capital Projects Fund-Detailed Revenues and Expenditures ................................................... .46
Independent Auditor's Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance with
Government Auditing Standards ........................................................................................ 47-49
SCIARABBA
WALKERtt?
CERT I F IED PUBLIC ACCOUNTANTS
BUSINESS CONSULTANTS
INDEPENDENT AUDITOR'S REPORT
Supervisor and Town Board
Town oflthaca
Ithaca, New York 14850
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of the
Town oflthaca, NY, as of and for the year ended December 31, 2015, and the related notes to the
financial statements, which collectively comprise the Town's basic financial statements as listed in
the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity's internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
410 East Upland Road
Ithaca, New York 14850
607-272-5550 / 607-273-6357 (Fax)
839 State Route 13
Cortland, New York 13045
www.swcllp.com
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the Town of Ithaca, NY, as of
December 31, 2015, and the respective changes in financial position and, where applicable, cash
flows thereof for the year then ended in accordance with accounting principles generally
accepted in the United States of America .
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management's Discussion and Analysis (pages I-XVII), the Schedule of Funding Progress for
the Retiree Health Plan (page 41 ), the Schedule of Revenues and Expenditures Compared to
Budget -Major Funds (page 42), the Schedule of the Town's Proportionate Share of the Net
Pension Liability (page 43), and the Schedule of the Town's Pension Contributions (page 44), be
presented to supplement the basic financial statements. Such information, although not a part of
the basic financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic financial statements
in an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency
with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not
provide us with sufficient evidence to express an opinion or provide any assurance .
Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the Town of Ithaca's basic financial statements. The supplementary
information presented on pages 45 through 46 is presented for purposes of additional analysis
and are not a required part of the basic financial statements.
The information is the responsibility of management and was derived from and relates directly to
the underlying accounting and other records used to prepare the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the information is fairly stated, in all material respects, in relation to the
basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
September 23, 2016 on our consideration of the Town of Ithaca 's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws , regulations,
contracts, and grant agreements and other matters. The purpose of that report is to describe the
scope of our testing of internal control over financial reporting and compliance and the results of
that testing , and not to provide an opinion on internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering Town of Ithaca's internal control over financial reporting and
compliance .
j~ u/Jkr ///P
Sciarabba Walker & Co., LLP
Ithaca, New York
September 23 , 2016
The following is a discussion and analysis of the Town of Ithaca 's financial performance for the
year ended December 31, 2015. The Town of Ithaca discussion and analysis is designed to (a)
assist the reader in focusing on significant financial issues, (b) provide an overview of the
Town 's financial activity, (c) identify changes in the Town's financial position (its ability to
address the next and subsequent year challenges), (d) identify any material deviations from the
financial plan (the approved budget), and (e) identify individual fund issues or concerns.
The section is a summary of the Town 's financial activities based on currently known facts,
decisions , or conditions as provided by the Town 's Finance Officer. It is also based on both the
government-wide and fund-based financial statements. The results of the current y ear are
discussed in comparison with the prior year, with an emphasis placed on the current year. This
section is only an introduction and should be read in conjunction with the Town 's financial
statements, which immediately follow this section.
HIGHLIGHTS
Financial Highlights:
• The Town 's net position, as reflected m the Statement of Net Position, increased by
$1,920,688 (9.6%).
• Revenue, as reflected in the Statement of Activities, increased $546,585 (2 .99%).
• Expenditures increased by $58,053 (0 .34%).
• The General Townwide Fund (the primary operating fund) fund balance increased by
$378,350 (12.1 %) for the year ended December 31, 2015.
Town Highlights:
• Year-end fund balance increased in all major Town funds in Fiscal Year 2015 .
GENERAL FUND -Fund equity increased by $433,644, with revenues and other sources of
$6,054,464 exceeding expenditures and other uses of $5,620,820. Sales tax decreased while
mortgage tax collections increased compared to 2014. Ending fund balance totaled
$4,526,355 , which includes reserves of $811,260 for the Parks and Open Space Plan Reserve ,
$244, 117 for the General Benefit Reserve, $40,067 in the Preserve Maintenance Reserve and
$10,010 in the Land Stewardship Reserve. (Townwide +Part-Town+ Risk)
HIGHWAY FUND -With revenues and other sources of $2 ,884,917 exceeding expenditures
and other uses of $2,769 ,365 , fund equity increased by $115,552. Ending fund balance of
$1,825,219 includes reserves of $249 ,988 for the Highway Equipment Reserve and $99,954
for the General Benefit Reserve.
WATER FUND -For Fiscal Year 2015, the net position of the Water Fund increased by
$1,595,323. Operating and non-operating revenues totaling $4 ,969,656 exceeded operating
and non-operating expenditures of $3 ,374,333. Year-end net position of $4 ,617,983 includes
$14,234 for the General Benefit Reserve.
I
SEWER FUND -Net position of the Sewer Fund increased by $755,200 in Fiscal Year 2015.
Operating and non-operating revenues of $2,780,846 exceeded operating and non-operating
expenditures of $2,025,646. Net position at year-end of $4,896,049 includes $8,011 for the
General Benefit Reserve.
FIRE PROTECTION FUND -With revenues of $3,609,064 exceeding expenditures of
$3,374,613, fund equity increased by $234,451 to total $1,272,591 at year-end.
• The Town of Ithaca has an informal policy to maintain the fund balance percentage of any
fund, calculated as the percentage of the fund's year-end unreserved net assets compared to
the next year's budgeted expenditures, at a minimum of 25%. A 25% fund balance
percentage represents the approximate amount necessary to cover the expense of three
months of operations. For the year ended December 31, 2015, all major funds exceeded this
25% goal.
• Collections of sales tax decreased while mortgage tax increased in Fiscal Year 2015.
SALES TAX -Collections decreased to $3,067,337 in 2015 from the previous year's total of
$3,135,084, a decrease of $67,747 or 2.2%. This is the first year since 2009 in which sales
tax collections declined from the prior year. Sales tax revenues are split between General
Fund and Highway Fund.
MORTGAGE TAX -Collections for 2015 totaled $430,660, an increase of $101,386 or 30.8%
over the previous year's total of $329,274. The 2015 total includes a one-time receipt of
$169,770 from the expansion of Kendall at Ithaca development. Without this one-time
receipt, collections for 2015 would have totaled only $260,890.
• Year-end balances for the Town's reserve accounts all improved over the prior year and are
as follows:
PARKS AND OPEN SPACE PLAN RESERVE -The General Fund includes reserve funds
designated for the purpose of future park development and the purchasing of development
rights, as outlined in the Town's Parks and Open Space Plan. $75,000 in unreserved fund
balance was designated as reserved for this purpose by the Town Board in 2015. The
balance at year-end was $811,260.
HIGHWAY EQUIPMENT RESERVE -The Highway Fund includes reserve funds established for
the purchase/replacement of highway equipment and machinery. $37,879 was added to this
reserve m 2015 through the sale of surplus equipment. The balance at year-end was
$249,988.
GENERAL BENEFIT RESERVE -The General Fund, Highway Fund, Water Fund, and Sewer
Fund equity includes reserve funds established for managing unanticipated increases in
employee fringe benefit costs (e .g. NYS Retirement, Health Insurance). The aggregate
balance at year-end was $366,316.
PRESERVE MAINTENANCE RESERVE -The General Townwide Fund includes reserve funds
designated for the maintenance of the Pine Tree Wildlife Preserve, donated to the Town in
II
2013. In conjunction with the donation of the land, the amount of $40,000 was also donated
to provide for future maintenance of the preserve. The balance at year end was $40,067.
LAND STEWARDSHIP RESERVE -In 2014 the Town purchased the development rights to the
Indian Creek Farm with financial assistance through a State of New York grant. This grant
included $10,000 to be held in reserve by the Town, designated for the future stewardship of
the Indian Creek Farm lands. For the year ended December 31, 2015, the balance of this
reserve totaled $10,010.
• The Capital Improvement Program (CIP) process continues to be improved and refined.
Timely project reviews, detailed mapping, design, planning, and the development of five-
year budget projections have strengthened the fiscal accountability of the Town's CIP,
improving the Town's ability to analyze the cost of future borrowing needs and the potential
impact that such long-term borrowing would have on the property tax levy and property tax
rates. This analytical process assists the Town Board in prioritizing those projects that will
better serve the needs of the Town residents and maintain the quality of the Town's
transportation, water and sewer infrastructures.
• CONSTITUTIONAL DEBT LIMIT -The Town of Ithaca maintains a very low direct debt burden.
At year-end the Town had exhausted only 4.33% of its debt-contracting power.
• In December 2014, Moody's Investors Service upgraded the Town's bond rating from Aa2 to
Aal. The Aal bond rating was affirmed in September 2015, reflecting the Town's
"moderately-sized tax base with above-average income levels and significant institutional
presence, strong financial management and sound budgeting practices, ample reserve levels,
and a modest debt profile."
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of three parts: MD&A (this section), the basic financial statements,
and required supplementary information. The basic financial statements include two kinds of
statements that present different views of the Town:
• The first two statements are government-wide financial statements that provide both
short-term and long-term information about the Town's overall financial status.
• The remaining statements are fund financial statements that focus on individual parts of the
Town, reporting the Town's operations in more detail than the government-wide statements.
The fund financial statements concentrate on the Town's most significant funds.
• The governmental funds statements tell how basic services were financed in the short term as
well as what remains for future spending. The governmental activities include most of the
Town's basic services such as public safety, parks and recreation, and general administration.
Property taxes finance most of these activities.
• The proprietary funds provide the same type of information as the government-wide
financial statements, only in more detail. Enterprise funds are used to report the funds
presented as business-type activities in the government-wise financial statements. The
III
enterprise funds are those that the Town charges customers to provide. These include the
sewer and water services offered by the Town.
• Fiduciary funds statements provide information about the financial relationships in which the
Town acts solely as a trustee or agent for the benefit of others.
The financial statements also include notes that explain some of the information in the statements
and provide more detailed data. The statements are followed by a section of required
supplementary information that further explains and supports the financial statements with a
comparison of the Town's budget for the year.
Government-Wide Statements
The government-wide statements report information about the Town as a whole using accounting
methods similar to those used by private-sector companies. The statement of net position
includes all of the Town's assets and liabilities. All of the current year's revenues and expenses
are accounted for in the statement of activities regardless of when cash is received or paid.
The two government-wide statements report the Town's net position and how they have
changed. Net position, the difference between the Town's assets and liabilities, is one way to
measure the Town's financial health or position.
• Over time, increases or decreases in the Town's net position are an indicator of whether its
financial position is improving or deteriorating, respectively.
• To assess the Town's overall health, you need to consider additional non-financial factors
such as changes in the Town's property tax base and the condition of facilities and
infrastructures.
In the government-wide financial statements, the Town's activities are shown as governmental
activities and business-type activities. The Town's basic services are included as governmental
activities such as road maintenance (transportation), and administration (general governmental
support). Property taxes finance most of these activities. Business-type activities are reported
separately as they recover the majority of their expenses through charges to customers for the
services provided.
Fund Financial Statements
The fund financial statements provide more detailed information about the Town's funds,
focusing on its most significant or "major" funds -not the Town as a whole. Funds are
accounting devices the Town uses to keep track of specific sources of funding and spending on
particular programs:
• Some funds are required by State law and by bond covenants.
• The Town establishes other funds to control and to manage money for particular purposes
(such as repaying its long-term debts) or to show that it is properly using certain revenues .
IV
The Town has three kinds of funds :
• Governmental Funds: Most of the Town's basic services are included in governmental funds,
which generally focus on (1) how cash and other financial assets can readily be converted to
cash flow in and out and (2) the balances left at year end that are available for spending.
Consequently, the governmental funds statements provide a detailed short-term view that
helps you determine whether there are more or fewer financial resources that can be spent in
the near future to finance the Town's programs. Because this information does not
encompass the additional long-term focus of the government-wide statements, reconciling
statements (page 4 and pages 7-8) have been added to explain the relationship (or
differences) between them.
• Proprietary Funds: Consist of the water and sewer funds, those funds for which the Town
provides services and then charges customers for providing the service. The proprietary
statements include all assets and liabilities, both short-term and long-term, including debt and
capital assets. Accrual accounting is used and focus is on economic resources.
• Fiduciary Funds -Agency Funds: The Town acts in an agency capacity for assets that are
ultimately transferred to others, such as payroll withholdings. The Town also reports deposits
associated with its rental activities in this fund. The Town excludes these activities from the
government-wide financial statements because it cannot use these assets to finance its
operations.
v
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE
The Town's combined net position increased by $1,920,688 or 9.6%.
Current assets increased by $383,354 or 2.15%.
Capital assets increased by $2,998,847 (net of 2015 depreciation expense of $1,186,731) or
13.5%.
Long-term serial bond debt increased by $1,127,000 or 9.6%. The increase reflects the 2015
bond proceeds less principal payments.
Unrestricted net position increased by $844,900 or 11.5%.
The Town's current ratio (ratio of current assets to current liabilities) was 8.9: 1 at December 31,
2015. The Town's quick ratio (cash and assets easily converted to cash compared to current
liabilities) was 5.9:1 at December 31, 2015.
Figures A-1 and A-2 present condensed information derived from the Town's government-wide
statements.
FIGUREA-1
Governmental Business-type
Condensed Statemen,t of Net Position Activities Activities
2015 2014 2015 20114
Current assets $ 9,604,301 $ 9,898,568 $ 8,600,812 $ 7,923,191
Non-current assets 11,472,103 10,664,402 13,778,515 11,587,369
Total Assets $ 21,076,404 $ 20,562,970 $ 22,379,327 $ 19,510,560
Deferred pension outflow 598,701 524,871 50,831 45,641
Toial Deferred Outftlows of Resources $ 598_,7011 $ 524,871 $ 50,831 $ 45.641
Current liabilities $ 858,715 $ 865,875 $ 1,194,094 $ 1,150,445
Non-current liabilities 8,322,536 7,298,278 11,722,032 11,242,246
Total LiahiUties $ 9,181,251 $ 8,164~153 $ 1!2,91!6.,126 $ 12 . .,392,691
Invested in capital assets, net of debt $ 7,550,420 $ 7,260,002 $ 4,784,198 $ 4,112,769
Restricted 1,485,224 1,371,305 22,245 22,223
Unrestricted net position 3,458,210 4,292,381 4,707,589 3,028,518
Total Net Position $ 12,493,854 $ 12,923.,688 $ 9,,~1J4,0~2 $ 7,163,510
VI
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS
Figure A-6 shows the change in fund balances for the year for the Town's funds as presented in
the Town's Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental
Funds. At December 31, 2015, the Town reported a combined fund balance of$8,921,778. Total
fund balance decreased by $296,385 in 2015.
Figure A-6
Governmental Funds
Total DoJlar 6ovemmental Fund Balances
2015 20Jl4 Change
General Fund $ 4,526,355 $ 4,092,711 $ 433,644
Highway Fund 1,825,219 1,709,667 115,552
Fire Fund 1,272,591 1,038,140 234,451
Capital Projects Fund 1,007,264 935,816 71,448
Other Funds 290,349 1,441,829 ( 1,151,480)
Total Fund Balance $ 8,921,778 $ 9,218,163 $ ( 296,385)
GENERAL FUND BUDGETARY HIGHLIGHTS
Actual revenues were higher than budget estimates by $45,169 and actual expenditures were less
than budgeted expenditures by $1,190,818.
Figure A-7 summarizes the General Fund original budget, actual expenditures and the variances
for the year ended December 31, 2015 .
Figure A-7
Variance
Condensed Budgetary, Compa'l?ison-Original Favorable
6ene;r,aJ Fund 2'015 Budget Actual (Unfavora.ble)
REVENUES
Real property taxes $ 2,654,500 $ 2,660,179 $ 5,679
Non-property taxes 1,475,000 1,542,541 67,541
State sources 568,350 620,017 51,667
All other 727,845 648,127 $ ( 79,718)
'Fotal Revenues $ 5,425,695 $ 5';4'70,864 $ 45,169
EXPENDITURES
General government support $ 2,077,800 $ 1,562,732 $ 515,068
Public safety 74,484 74,987 ( 503)
Transportation 527,520 429,530 97,990
Culture and recreation 1,082,064 916,374 165,690
Home and community services 1,548,675 1,201,823 346,852
Employee benefits 1,265,100 1,199,379 65,721
Total.E:xpenditulies $ 6,575,643 $ 5,384,825 $ 1,190,818
Other financing sources $ 1,381,168 $ 583,600 $ ( 797,568)
Other financing uses 231,220 235,995 ( 4,775)
IX
CAPITAL ASSETS
The Town records expenditures for land, buildings, equipment, machinery and infrastructures
(roads, water and sewer systems) as capital assets in the Statement of Net Position. Annual
depreciation expense is recorded in the Statement of Activities to reflect the use of these assets
over their useful lives. Land and construction in progress are not subject to depreciation. The
Town's depreciation methods, assumptions regarding useful lives and capitalization thresholds
are described in Notes lK and lL in the current year's Notes to the Financial Statements.
In 2015, the Town expended $4,316,426 on capital additions. Figure A-8 reflects the changes in
net capital assets.
Cham!es in Net Caoital Assets,
Land
Construction in progress
Buildings
Equipment and machinery
Furniture and furnishings
Non-building improvements
Infrastructures
Total
Major additions in 2015 included:
Infrastructure
Construction in progress
Equipment acquisitions
Non-building improvements
Building
Total
,,
$
$
Figure A-8
Govemmental
Activities
2015 2014
439,880 $ 439,880
1,895,909 1,874,449
3,081,636 3,059,856
2,528,625 2,675,330
11,343 23,076
239,411 134,985
3,275,299 2,456,826
11,472,103 $ 10,664,4102'
DEBT ADMINISTRATION
Long-term debt increased by $1,127,000.
$
$
Business-type
Activities
2015
-
3,499,576
-
384,846
-
-
9,894,093
13,718,515
2014
$ -
1,877,452
-
156,210
-
-
9,553,707
$ 11,587,369
$ 1,053,280
2,204,907
749,249
137,235
171 755
$ 4.316.426
The Town's liability for compensated absences decreased $7,502 to $146,109 during 2015.
In 2008, the Town implemented the provisions of Governmental Accounting Standards Board
Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment
Benefits Other Than Pensions. The standard requires that a liability be recognized based on an
actuarial measure of the current year funding costs associated with long-term liabilities for post-
employment benefits. The Town's liability for post-employment benefits under GASB 45 was
$4,327,608 as of December 31, 2015.
The Town continues to recognize a liability for accumulated sick time that can be credited to
employee's portions of health insurance at the date of retirement. The liability was $265,249 at
December 31, 2015.
x
The Town's most recent bond rating, as determined by Moody's Investor Service, Inc., is Aal.
Constitutional Debt Limit
The Town of Ithaca is restricted by the New York State Constitution, Article VIII, Section 2, on
the manner of creating and paying local indebtedness. The Town can only create debt for
"Town" purposes. The outstanding payback period for indebtedness is restricted to the period of
usefulness. As the issuer of debt (borrower) the Town is required to pledge in full faith and credit
for the payments of principal and interest to the bondholder (investor).
As required under the New York State Constitution, the Town of Ithaca cannot create debt in
excess of 7% of the five (5) year average full valuation of taxable property.
The following summary provides information regarding the Town's indebtedness, debt limit and
net debt-contracting margin as of December 31, 2015.
Five-year average full valuation of taxable property
Debt limit -7% thereof
Inclusions:
Serial bonds
Exclusions:
Water and sewer debt ( 1)
Total net indebtedness
Net debt contracting margin
Percent of debt contracting power exhausted
$
$
1,307,911,122
91,553,779
15,817,750
( 11,896,067)
3,921,683
87,632,096
4.48%
(1) Sewer and Water indebtedness are excluded pursuant to Section 136.00(4-a) and 136.00(2),
Detailed information regarding the Town's long-term liabilities is presented in Note 6C in 2015
Notes to the Financial Statements. Figure A-9 reflects changes in the Town's debt for 2015.
Figure A-9
Governmental Activities Business-type Activities
@utstandiing Dl!bt 2015 2014 2015 2014
Serial bonds $ 3,921,683 $ 3,404,400 $ 8,994,317 $ 8,384,600
SCLIWC serial bonds --2,901,750 3,068,700
Compensated absences 133, 199 141,864 12,910 11,747
Net pension liability 356,827 -30,295 -
Other post-employment benefits 3,945,223 3,313,546 382,385 274,367
Liability for accrued sick time to be
applied to retiree's health coverage 265,249 221,377 --
Total $ 8,622,181 $ 7,081,187 $ 12,321,657 $ 11,739,414
Figure A-10 depicts historical changes in fund balances for the Town of Ithaca for the period
2010 through 2015. Information for the Capital Projects Fund is omitted.
XI
I
I Description I General I General I
Townwide Part Town
Fund gguitv Becinning Detail
Operating Unreserved Funds $ 2,079,386 $ 288 ,188 $
Equipment Reserve F und
Parks & Open Space Reserve Funds 516,827
Genera 1 Benefit Reserve 151,912 44,843
Total Fund Equity Beginning @ 1/1/2010 $ 2,748,125 $ 333,031 $
Add: Revenue & Other Sources 3,713,462 1,124,0 13
Deduct: Expenses & Otl1er Uses ( 3,796,481) ( 1,089 ,792)
Fund Equity Ending Balance@ 12131/20111' $ 2;665,106 $ 367,252 $
I
I Description I General I General I Townwide Part Town
Fund ggu~ Becinning Detail
Operating Unreserved Funds $ 2 ,00 1,297 $ 345,002 $
Equipment Reserve Fund --
Other Reserves - -
Parks & Open Space Reserve Funds 579,002 -
General Benefit Reserve 84,807 22 ,250
Total Fund Equity Beginning @ 1/1/2011 $ 2,665,106 $ 367,252 $
Add: Revenue & Other Sources 3,889,647 1,18 1,278
Deduct: Expenses & Other Uses ( 3,814,600) ( 1, 100,607)
Fund Equity Ending Balance @ 12/31i2011 $ 2,740,153 $ 447,923 $
Highway
283,277
2,593
82,994
368,864
2.440,17 1
( 1,986,773)
822,262
Highway
750,785
27,190
-
-
4 4 ,287
822,262
2,382,578
( 2 .080,604)
1,124,236
CITY OF ITHACA
SUMMARY OF FUND BALANCE BY FUND
FOR THE YEARS ENDED 2010 AND 2011
2010
I Water I Sewer I
$ 867,870 $ 1,5 13,99 1 $
-
-
13 ,625 7 .764
$ 881,495 $ 1,521,755 $
2,966,149 1,3 89,453
( 2,6 1 1,329) ( 2,400, 749)
$ 1,236,315 $ 510,459 $
2011
I Water I Sewer I
$ 1,228,125 $ 504,672 $
--
--
-
8,190 5.787
$ 1 ,236,315 $ 510,459 $
3,119,759 2,205,573
( 3,214,059) ( 1.849,535)
$ 1,142,015 $ 866,497 $
XII
Fire I Risk I Debt I Lighting I Inlet Valley I Total
Protection Retention Service Districts Cemetery
407,835 $ 85 ,299 $ 84,884 $ 14,445 $ -$ 5,625,175
----2 ,593
---516,827
---301 ,138
407,835 $ 85,299 $ 84,884 $ 14,445 $ -$ 6,445,733
3,033,545 2 4 ,067 841,392 7 ,536 12 ,283 15,552,071
( 3,283,484) ( 49,152) ( 832,184) ( 12,295) ( 3,249) (16,065,488)
157,896 $ 60,214 $ 94,092 $ 9,686 $ 9,034 $ 5,932,316
Fire I Risk I Debt I Lighting I Inlet Valley I Total
Protection Retention Service Districts Cemetery
157,896 $ 60,2 14 $ 94,092 $ 9,686 $ -$ 5,151,769
-----27,190
- ---9,034 9,034
-- -
--579,002
--165,321
157,896 $ 6 0 ,214 $ 94,092 $ 9,686 $ 9,034 $ 5,932,316
3,411,157 53 ,126 775,858 13,180 16 17,032,172
( 3,494,246) ( 18 ,105) ( 815,493) ( 12,454) -(16,3 99, 703)
74,807 $ 95,235 $ 54,457 $ 10,412 $ 9,050 $ 6,564,785
I
I
Description I General I General I
Townwide Part Town
Ftmd ~uity Beginning Detail
Operating Umeserved Funds $ 2,003,055 $ 425,622
Equipment Reserve Ftmd --
Other Reserves --
Parks & Open Space Reserve Funds 652,149 -
General Benefit Reserve 84,949 22,301
Total Fund Equity Beginning @ 1/1/2012 $ 2,740,153 $ 447,923
Add: Revenue & Other Sources 3,978,276 1,353,861
Deduct: Expenses & Other Uses ( 4,219,959) ( 1, 135,864)
Fund Equity Ending Balance @ ii/3112012 $ 2,498,470 $ 665,920
I
I
Description I General I General I Townwide Part Town
Fund ~uity Beginning Detail
Operating Unreserved Ftmds $ 1,709,685 $ 627,279
Equipment Reserve Ftmd --
Other Reserves --
Parks & Open Space Reserve Ftmds 682,325 -
General Benefit Reserve 106,460 38,641
Restate Fund Balance-Proprietary Funds --
Total Fund Equity Beginning@ 111/2013 $ 2,498,470 $ 665,920
Add : Revenue & Other Sources 4,316,872 1,322,731
Deduct: Expenses & Other Uses ( 4,045 ,767) ( 1,200,769)
Fund F_,qulty Ending Balance @ 12131/2013 $ 2,769:575 $ 787,882
Less: Arnotmt of Additional Fund Balance
Appropriated and Assigned in the
Adopted 2014 Budget ( 442,203) ( 280,125)
Less: Reserved Portion of Fund Balance
Parks & Open Space ( 758,248) -
Gen'! Benefit Purposes ( 180,260) ( 63,501)
Presen1e Maintenance Reserve ( 40,006) -
Equipment --
Cemetery Maintenance --
Total Net Fund Equity Beginning 1/112014 $ 1,348,858 $ 444,256
Highway
$ 1,017,214
62,650
-
-
44,372
$ 1,124,236
2,377,555
( 2 ,056,104)
$ 1,4451687
Highway
$ 1,283,664
105,285
-
-
56, 738
-
$ 1,445,687
2,666,182
( 2,470,789)
$ 1,641:080
( 66,360)
-
( 99,799)
-
( 150,655)
-
$ 1,324,266
CITY OF ITHACA
SUMMARY OF FUND BALANCE BY FUND
FOR TEH YEARS ENDED 2012 ANS 2013
2012
I Water I Sewer I
$ 1,133,810 $ 860,700 $
--
--
--
8,205 5,797
$ 1,142,015 $ 866,497 $
3,420,692 2,737,945
( 3,218,181) ( 2,308.314)
$ 1:344,526 $ 1:296,128 $
2013
I Water
I
Sewer I
$ 1,336,309 $ 1,290,324 $
--
--
--
8,217 5,804
2,370,612 1,623,579
$ 3,715,138 $ 2,919,707 $
3,622,012 2,442,544
( 3,685,338) ( 1,943,940)
$ 3 1651,812 $ 3,418,311 $
-( 202,371)
--
( 14,206) ( 7,994)
--
--
--
$ 3,637,606 $ 3,207,946 $
XIII
Fire I Risk I Debt I Lighting I Inlet Valley I Total
Protection Retention Service Districts Cemetery
74,807 $ 95 ,235 $ 54,457 $ 10,412 $ -$ 5,675,312
-----62,650
----9,050 9 ,050
-----652,149
-----165,624
74,807 $ 95,235 $ 54,457 $ 10,412 $ 9,050 $ 6,564,785
3,680,181 15,623 1,103,235 11,964 10 18,679,342
( 3,252,220) ( 7,142) ( 697,010) ( 12,568) -(16,907,362)
502:768 $ 103,716 $ 460,682 $ 9,808 $ 9 1060 $ 81336,765
Fire I Risk I Debt I Lighting I Inlet Valley I Total
Protection Retention Service Districts Cemetery
502,768 $ 103,716 $ 460,682 $ 9,808 $ 1,500 $ 7,325,735
-----105,285
----7,560 7,560
-----682,325
-----215,860
-----3,994,191
502,768 $ 103,716 $ 460,682 $ 9,808 $ 9,060 $ 12,330,956
3,495,644 37,080 6_51,549 10,455 8 18,565,077
( 3,223,979) ( 18,570) ( 686,435) ( 12,054) -(17,287,641)
774,433 $ 122,226 $ 425,796 $ 8,209 •$ 9 1068 $ 13:608,392
--( 177,650) ( 3,390) ( 1,500) ( I , I 73,599)
-----( 758,248)
-----( 365,760)
-----( 40,006)
-----( 150,655)
----( 7,568) ( 7,568)
774,433 $ 122,226 $ 248,146 $ 4,819 $ -$ 11,112,556
I
I
Description I General I General I
Townwide Part Town
Flllld fu)uitv Beginning Detail
Operating Unreserved Fllllds $ 1,791,061 $ 724,381
Equipment Reserve Flllld --
Other Reserves --
Parks & Open Space Reserve Funds 758,248 -
General Benefit Reserve 180,260 63,501
Preserve Maintenance Reserve 40,006 -
Total Fund Equity Beginning @ 1/1/2014 $ 2,769,575 $ 787,882
Add: Revenue & Other Sources 4,668,521 1,295,105
Deduct: Expenses & Other Uses ( 4,320,995) ( 1,249,251)
Fund Equity Ending Balance@ 1ii3inoi4 $ 3,117,101 $ 833,736
Less: Ammmt of Additional Fund Balance
Appropriated and Assigned in the
Adopted 2015 Budget ( 599,813) ( 207,255)
Less: Reserved Portion of Fund Balance
Parks & Open Space ( 735,544) -
Gen'! Benefit Purposes ( 180,391) ( 63,548)
Preserve Maintenance Reserve ( 40,036) -
Land Stewardship ( 10,002) -
Equipment --
Cemetery Maintenance --
Total Net Fund Equity Beginning 1/1/2015 $ 1,551,315 $ 562,933
Highway
$ 1,390,626
150,655
-
-
99,799
-
$ 1,641,080
2,829,218
(2,760 ,631)
$ 1,709,667
( 324,711)
-
( 99,876)
-
-
( 212,109)
-
$ 1,072,971
CITY OF ITHACA
SUMMARY OF FUND BALANCE BY FUND
FOR THE YEAR ENDED 2014
2014
I Water I Sewer I
$ 3,637,606 $ 3,410,317 $
--
--
--
14,206 7,994
--
$ 3,651,812 $ 3 ,418,311 $
3 ,821,779 2,741,356
( 4,446,348) ( 2,016,362)
$ 3,027,243 $ 4,143,305 $
-( 341,398)
--
( 14,220) ( 8,003)
--
--
--
--
$ 3,013,023 $ 3,793,904 $
XIV
Fire I Risk I Debt I Lighting I Inlet Valley I Total
Protection Retention Service Districts Cemetery
774,433 $ 122,226 $ 425,796 $ 8,209 $ 1,500 $ 12 ,286,155
-----150,655
----7,568 7,568
-----758,248
-----365,760
-----40,006
774,433 $ 122,226 $ 425,796 $ 8,209 $ 9,068 $ 13,608,392
3,530,624 25,109 1,304,294 12 ,635 8 20,228,649
( 3,266,917) ( 5,461) ( 302,909) ( 15,272) -(18,384, 146)
1,038,140 $ 141,874 $ 1,427,181 $ 5,572 $ 9,076 $ 15,452,895
--( 247,416) ( 920) ( 1,500) ( 1,723,013)
-----( 735,544)
-----( 366,038)
-----( 40,036)
-----( 10,002)
-----( 212,109)
----( 7,576) ( 7,576)
1,038,140 $ 141,874 $ 1,179,765 $ 4,652 $ -$ 12,358,577
I
I Description I General I General I
Townwide Part Town
Fund E;guitv Beginning Detail
Operating Unreserved Funds $ 2,151,128 $ 770, 188
Equipment Reserve Fund --
Other Reserves --
Parks & Open Space Reserve Funds 735,544 -
General Benefit Reserve 180,391 63 ,548
Preserve Maintenance Reserve 40,036 -
Land Stewardship 10,002 -
Restate F und Balance-Proprietary Funds --
Total Fund Equity Beginning @ 11112015 $ 3,117,101 $ 833,736
Add: Revenue & Other Sources 4,688,822 1,337,045
Deduct: Expenses & Other Uses ( 4,310,472) ( 1,300,192)
Fund Equity Ending Balance @ 12/31/2015 $ 3,495,451 $ 870,589
Less: Am01mt of Additional Fund Balance
Appropriated and Assigned in the
Adopted 2016 Budget ( 93 ,244) ( 211,125)
Less: Reserved Portion ofFund Balance
Parks & Open Space ( 811,260) -
Gen'! Benefit Purposes ( 180,522) ( 63,595)
Preserve Maintenance Reserve ( 40,067) -
Land Stewardship ( 10,010) -
Equipment --
Cemetery Maintenance --
Total Net Fund Equity Beginning 1/1/2016 $ 2,360,348 $ 595,869
Highway
$ 1,397,682
212,109
-
-
99,876
-
-
-
$ 1,709,667
2,884,917
( 2,769,365)
$ 1,825,219
( 251,319)
-
( 99,954)
-
-
( 249,988)
-
$ 1,223,958
CITY OF ITHACA
SUMMARY OF FUND BALANCE BY FUND
FOR THE YEAR ENDED 2015
2015
I Water I Sewer l
$ 3,013,023 $ 4,135,302 $
--
--
--
14,220 8,003
--
--
( 4,583) ( 2,456)
$ 3,022,660 $ 4,140,849 $
4,969,655 2,780.846
( 3,374,333) ( 2 ,025.646)
$ 4,617,982 $ 4,896,049 $
-( 516,027)
--
( 14,234) ( 8,011)
--
--
--
--
$ 4,603,748 $ 4,372,011 $
xv
Fire l Risk I Debt I Lighting I Inlet Valley I Total
Protection Retention Service Districts Cemetery
1,038,140 $ 141,874 $ 1,427,181 $ 5,572 $ 1,500 $ 14,081,590
-----212,109
----7,576 7,576
-----735,544
- -
---366,038
-----40,036
-----10.002
- ----( 7,039)
1,038,140 $ 141,874 $ 1,427,181 $ 5,572 $ 9,076 $ 15,445,856
3.609,064 28,597 1,253 13,210 7 20,313,416
( 3,374.613) ( 10,156) ( I, 152,239) ( 13,711) -(18,330,727)
1,272,591 '$ 160,315 $ 276,195 \$ 5,071 $ 9,083 $ 17,428,545
--( 195,000) ( 1,500) ( 1,268,215)
-----( 811,260)
-----( 366,316)
-----( 40,067)
-----( 10 ,010)
-----( 249,988)
----( 7,583) ( 7,583)
1,272,591 $ 160,315 $ 81,195 $ 5,071 $ -$ 14,675,106
Factors Bearing on the Town's Future
• On June 24, 2011, Chapter 97 of the Laws of 2011 (the "Tax Levy Limitation Law") was
signed into law. The Tax Levy Limitation Law applies to all local governments, including
most school districts, independent special districts, and to town and county improvement
districts as part of their parent municipalities tax levies. The Tax Levy Limitation Law
restricts, among other things, the amount of real property taxes (including assessments of
certain special improvement districts) that may be levied by or on behalf of a municipality in
a particular year, beginning with fiscal years commencing on or after January 1, 2012. It
expires on June 16, 2016 unless extended. Pursuant to the Tax Levy Limitation Law, the tax
levy of a municipality cannot increase by more than the lesser of (i) two percent (2%) or (ii)
the annual increase in the consumer price index ("CPI"), over the amount of the prior year's
tax levy. Certain adjustments would be permitted for taxable real property full valuation
increases or changes in physical or quantity growth in the real property base as defined in
Section 1220 of the Real Property Tax Law. A municipality may exceed the tax levy
limitation for the coming fiscal year only if the governing body of such municipality first
enacts, by at least a sixty percent vote of the total voting strength of the board, a local law
(resolution in the case of fire districts and certain special districts) to override such limitation
for such coming fiscal year only. There are permissible exceptions to the tax levy limitation
provided in the Tax Levy Limitation Law, including expenditures made on account of certain
tort settlements and certain increases in the average actuarial contribution rates of the New
York State and Local Employees' Retirement System. Municipalities are also permitted to
carry forward a certain portion of their unused levy limitation from a prior year. Each
municipality prior to adoption of each fiscal year budget must submit for review to the State
Comptroller any information that is necessary in the calculation of its tax levy for each fiscal
year.
The Town exceeded the allowable increase in the tax levy limit in Fiscal Years 2012, 2014
and 2015.
• The 2008 recession has impacted the local economy of the Town to a lesser degree than the
State and National economies, due in part to the stabilizing influence of the local colleges
and other large employers. Cornell University and Ithaca College in particular, with
combined totals of almost 10,000 employees and 27 ,850 students, supports a wide array of
businesses in the retail, service and real estate sectors. The local unemployment rate has
consistently been lower than the state and national unemployment rates during and after the
2008 recession. The average annual unemployment rate for 2011, 2012, 2013, 2014 and
2015, respectively, in Tompkins County was 6.1%, 6.1%, 5.2%, 4.3% and 4.1%, compared
with 8.3%, 8.5%, 7.7%, 6.3%, and 5.3% for New York State.
While the economy continues to slowly improve, it is difficult to foresee when, or if,
unemployment rates will return to pre-recession levels of 3.5% for Tompkins County and
4.6% for New York State.
• The Town of Ithaca anticipates continuing an aggressive Capital Improvement Program
(CIP). The Five-Year CIP for Fiscal Years 2016 -2020 identifies various capital projects to
be constructed at a total estimated cost of $17,490,000. Of this total, $7,650,000 is for the
improvement of water infrastructure, $2,800,000 for sewer infrastructure, $750,000 for storm
water drainage improvements, $4, 700,000 for road improvements, $1, 150,000 for
XVI
improvements to Town facilities, and $440,000 for parks and trails development. Funding
will be provided with $6,990,000 from current year revenues or reserves and $10,500,000
from the issuance of new long-term bonded debt.
• Sales tax collections have increased each year since 2009, from $2,528 ,600 in 2009 to
$3,135,084 in 2014, but have since decreased in 2015 with $3,067,337 in the process
surpassing the pre-recession high of $2,733,139 collected in 2008. Mortgage tax collections,
have returned to pre-recession levels. With increases in each of the last three years, total
collections of $430,660 in 2015 have surpassed the pre-recession high of $372,390 collected
in 2008.
FINANCIAL CONTACT
The Town's financial statements are designed to present users (citizens, taxpayers, customers,
investors and creditors) with a general overview of the Town's finances and to demonstrate the
Town's accountability. If you have questions about the report or need additional financial
information, contact the Town's Supervisor, Town oflthaca, 215 North Tioga Street, Ithaca, NY
14850.
XVII
TOWN OF ITHACA
STATEMENT OF NET POSITION
December 31, 2015
ASSETS
Governmental Business-type
Activities Activities Total
CURRENT ASSETS :
Cash
Cash, restricted
Accounts receivable :
Water and sewer rents
Due from other funds
Due from other governments
Prepaid expenses
TOT AL CURRENT ASSETS
CAPITAL ASSETS, net:
Construction in progress
TOTAL CAPITAL ASSETS
TOT AL ASSETS
$ 7,404,043
1,455,396
76,862
654,696
13 ,304
9 ,604,301
9,576,194
1,895,909
11,472,103
21,076,404
$ 4,757,457
22 ,245
894,623
2,926,487
8,600 ,812
10,278,939
3,499,576
13,778,515
22,379,327
DEFERRED OUTFLOWS OF RESOURCES
DEFERRED PENSION OUTFLOW
TOT AL ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES
See notes to financial statements .
598,701 50,831
$ 21,675 ,105 $ 22,430,158
$ 12 ,161,500
1,477,641
894,623
76,862
3 ,581,183
13,304
18,205,113
19,855,133
5,395 ,485
25,250,618
43,455,731
649,532
$ 44,105,263
LIABILITIES
Governmental
Activities
CURRENT LIABILITIES:
Accrued liabilities $ 510,967
Bond interest payable 26,508
Due to other funds
Due to other governments
Long-term debt, current portion 321,240
TOT AL CURRENT LIABILITIES 858,715
LONG-TERM DEBT' non current 3,600,443
PREMIUM ON BONDS PAYABLE 46,451
NET PENSION LIABILITY 356,827
LONG-TERM LIABILITIES 4,318,815
TOT AL LIABILITIES 9,181,251
NET POSITION
INVESTED IN CAPITAL ASSETS,
net of related debt
RESTRICTED:
Culture and recreation
Equipment
Benefits
Cemetery maintenance
UNRESTRICTED
TOTAL NET POSITION
TOT AL LIABILITIES AND NET POSITION
7,550,420
861,337
249,988
366,316
7,583
3,458,210
12,493,854
$ 21,675,105
-1 -
Business-type
Activities
$ 289,162
51,310
76,862
40,000
736,760
1,194,094
11,159,307
137,136
30,294
395,295
12,916,126
4,784,198
22,245
4,707,589
9,514,032
$ 22,430,158
$
Total
800,129
77,818
76,862
40,000
1,058,000
2,052,809
14,759,750
183,587
387,121
4,714,110
22,097,377
12,334,618
861,337
249,988
388,561
7,583
8,165,799
22,007,886
$ 44,105,263
TOWN OF ITHACA
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2015
Program
Governmental Activities
Functions/Programs
Expenses
General governmental support $ 2,292,583
Public safety 3,458,331
Transportation 3,178,772
Culture and recreation 1,042,553
Home and community services 1,718,076
Total governmental activities $ 11,690,315
Business-type activities:
Water 3,374,333
Sewer 1,851,846
Total business-type activities 5,226,179
$ 16,916,494
GENERAL REVENUES:
Real property taxes and related tax items
Non-property taxes
Interest earnings
Fines and fees -town court
State aid not restricted to specific purposes
Other miscellaneous revenues
Transfers
TOTAL GENERAL REVENUES
CHANGE IN NET POSITION
NET POSITION, beginning of year, as restated
NET POSITION, end of year
See notes to financial statements.
Revenue
Operating
Charges for Grants and
Services Contributions
$ 15,216 $ 259,387
270
25,290
70,826
175,120
$ 215,896 $ 330,213
3,390,381
2,576,794
5,967,175
$ 6,183,071 $ 330,213
Net (Expenses)
Program Revenues and
Revenue Changes in Net Position
Capital Grants
and Governmental Business-type
Contributions Activities Activities Total
$ 51,450 $ ( 1,966,530) $ $ ( 1,966,530)
( 3,458,061) ( 3,458,061)
107,181 ( 3,046,301) ( 3,046,301)
( 971,727) ( 971,727)
( 1,542,956) ( 1,542,956)
$ 158,631 $ (10,985,575) $ $ (10,985,575)
16,048 16,048
724,948 724,948
740,996 740,996
$ 158,631 $ (10,985,575) $ 740,996 $ (10,244,579)
$ 7,253,378 $ 974,239 $ 8,227,617
3,137,251 3,137,251
14,303 4,732 19,035
264,210 264,210
440,046 440,046
76,489 619 77,108
( 629,936) 629,936
10,555,741 1,609,526 12,165,267
( 429,834) 2,350,522 1,920,688
12,923,688 7,163,510 20,087,198
$ 12,493,854 $ 9,514,032 $ 22,007,886
-2 -
TOWN OF ITHACA
BALANCE SHEET-GOVERNMENTAL FUNDS
December 31, 2015
ASSETS AND OTHER DEBITS:
Unrestricted cash
Restricted cash
Due from other funds
Due from other governments
Prepaid expenses
TOTAL ASSETS AND OTHER DEBITS
LIABILITIES, FUND EQUITY, AND OTHER CREDITS:
LIABILITIES:
Accrued liabilities
Due to other funds
TOTAL LIABILITIES
FUND BALANCES:
Nonspendable -prepaid expenses
Restricted
Committed
Assigned
Unassigned
TOTAL FUND BALANCES
TOTAL LIABILITIES, FUND EQUITY,
AND OTHER CREDITS
See notes to financial statements.
General
$ 3,385,043
1,105,453
71,709
287,881
107,277
$ 4 ,957,363
$ 374,014
56,994
431,008
107,278
1,105,455
1,036,720
2,276,902
4,526,355
$ 4,957,363
Major Funds
Highway
$ 1,217,227
349,942
119,756
305,599
32,484
$ 2,025,008
$ 180,919
18,870
199,789
32,484
349,942
1,442,793
1,825,219
$ 2,025 ,008
Fire
$ 1,379,967
$ 1,379,967
$ 107 ,376
107,376
1,272,591
1,272,591
$ 1,379,967
Nonmajor
Major Funds Funds Total
Capital Other Governmental
Projects Funds Funds
$ 1,130,254 $ 283,969 $ 7,396,460
7,583 1,462,978
191,465
3,597 597,077
139,761
$ 1,133,851 $ 291,552 $ 9,787,741
$ 87,848 $ 1,203 $ 751,360
38,739 114,603
126,587 1,203 865,963
139,762
7,583 1,462,980
1,007,242 1,007,242
282,766 4,034,870
22 2,276,924
1,007,264 290,349 8,921,778
$ 1,133,851 $ 291,552 $ 9,787,741
-3 -
TOWN OF ITHACA
RECONCILIATION OF THE TOTAL FUND BALANCES SHOWN IN
THE GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
December 31, 2015
Total fund balances in the fund financial statements for the governmental funds. $ 8,921, 778
This amount differs from the balance of net position in the Statement of Net
Position due to the following:
Capital assets are included as assets in the government-wide statements and
are added, net of accumulated depreciation. 11, 472,103
Long-term liabilities for bonded debt are included as liabilities in the government-
wide statements and are deducted. ( 3,968,134)
Receivables for revenues earned and measurable, but not available to provide
financial resources, are included in the government-wide statements as assets
and are added . 57,621
Long-term liabilities for compensated absences and other post employment benefits
are included in the government-wide statements as liabilities and are deducted . ( 4,078,422)
Current liabilities for bond interest payable are included in the government-
wide statements as liabilities and are deducted.
Deferred outflows of resources are included in the government-wide
statements and are added.
Net pension liability is included in the government-wide statements
and is subtracted.
Prepaid pension expense is included in the fund financial statements
and is subtracted.
Interfund receivables and payables within the governmental funds are eliminated
in the government-wide statements . The amounts offset:
Due from other funds
Due to other funds
Total Net Position -End of Year
See notes to financial statements .
- 4 -
( 26,508)
598, 701
( 356,827)
( 126,458)
114,603
( 114 ,603)
$ 12 ,493 ,854
TOWN OF ITHACA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2015
Major Funds
General Highway
REVENUES:
Fire
Real property taxes $ 2,600,000 $ $ 3,579,999
Real property tax items 60,179 1,000,001
Non-property tax items:
Sales tax 1,472,627 1,594,710
Other non-property tax items 69,914
Departmental income 180,665
Intergovernmental charges 71,996 24,120
Use of money and property 6,611 1,929 3,701
Rental income 28,790
Licenses and permits 21,699
Fines and forfeitures 264,210
Sale of property and compensation for loss 8,348 151,950
Local sources 65,808 5,026
State sources:
Mortgage tax 430,660
State aid per capita 137,907
NYS highway improvement (CHIPS) 107,181
Miscellaneous 51,450 25,364
TOT AL REVENUES 5,470,864 2,884,917 3,609,064
Other Sources:
Inter-fund transfers 583,600
Proceeds of obligations
TOT AL REVENUES AND OTHER SOURCES 6,054,464 2,884,917 3,609,064
See notes to financial statements .
$
Major
Funds
Capital
Projects
791
30,874
31,665
139,531
810,657
981,853
Nonmajor
Funds
Other
Funds
$ 13,199
1,271
14,470
14,470
Total
Governmental
$
Funds
6,193,198
1,060,180
3,067,337
69,914
180,665
96,116
14 ,303
28,790
21,699
264,210
160,298
70,834
430,660
137,907
107,181
107,688
12,010,980
723,131
810,657
13,544,768
- 5 -
TOWN OF ITHACA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
GOVERNMENTAL FUNDS (continued)
For the Year Ended December 31, 2015
Major Funds
General Highway
EXPENDITURES:
General governmental support 1,562,731 61,531
Public safety 74,987
Transportation 429,530 1,902,700
Culture and recreation 916,374
Home and community services 1,201,824
Employee benefits 1,199,379 460,231
Debt service (principal and interest)
TOTAL EXPENDITURES 5,384,825 2,424,462
Other Uses:
Interfund transfers 235,995 344,903
TOTAL EXPENDITURES AND OTHER USES 5,620,820 2,769,365
EXCESS (DEFICIT) OF REVENUES
OVER EXPENDITURES 433,644 115,552
FUND BALANCE, beginning of year 4,092,711 1,709,667
Fire
1,648
3,372,965
3,374,613
3,374,613
234,451
1,038,140
FUND BALANCE, end of year $ 4,526,355 $ 1,825,219 $ 1,272,591
See notes to financial statements.
Major
Funds
Capital
Projects
888,946
21,459
910,405
910,405
71,448
935,816
$ 1,007,264
Nonmajor
Funds
Other
Funds
3,277
13,711
376,793
393,781
772,169
1,165,950
( 1,151,480)
1,441,829
$ 290,349
Total
Governmental
Funds
1,629,187
3,447,952
3,234,887
937,833
1,201,824
1,659,610
376,793
12,488,086
1,353,067
13,841,153
( 296,385)
9,218,163
$ 8,921,778
-6 -
TOWN OF ITHACA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE OF THE GOVERNMENT AL FUNDS TO THE
CHANGE IN NET POSITION SHOWN IN THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2015
Net change in fund balances shown for total Governmental Funds .
This amount differs from the change in net position reflected
$ ( 296,385)
in the Statement of Activities due to the following:
Capital outlays for the acquisition of capital assets and capital projects
are reported in the Governmental Funds as expenditures . In the Statement
of Activities, the cost of those assets is allocated over their useful lives
and reported annually as depreciation expense. In the Statement of Activities,
acquisition costs are removed and depreciation expense is added as follows:
Capital expenditures
Depreciation expense
Proceeds from sales of equipment are recorded as revenue in the Governmental
Funds . In the Statement of Activities, a gain or loss is recognized based on the net
book value of the asset sold (cost minus accumulated depreciation) and the sale price
of the equ ipment.
Proceeds from equipment sales
Gain recognized
Major revenues are recorded in the Governmental Funds when they are
earned, measurable and available to provide current financial resources .
In the Statement of Activities , major revenues are recognized when they
are earned and measurable, regardless of when they become available.
Current year revenues, earned and measurable, are recognized in the Statement
of Activities . The Governmental Funds include amounts that were earned
and measurable in the prior year, and these amounts are removed to
prevent overstating revenues on the Statement of Activities :
Current year revenues
Prior year revenues
Proceeds from serial bonds are recorded as revenue in the Governmental
Funds. Bond proceeds are reported as liabilities on the Statement of Net
Position and are not reflected on the Statement of Activities. In 2015, bond
proceeds were :
See notes to financial statements.
- 7 -
1,820,663
( 882 ,114)
( 151,740)
20 ,892
57,621
( 47,334)
938,549
( 130,848)
10,287
( 810,657)
TOWN OF ITHACA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE OF THE GOVERNMENTAL FUNDS TO THE
CHANGE IN NET POSITION SHOWN IN THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2015 (continued)
Bond principal payments are reflected as expenditures in the Governmental Funds .
These payments are reflected on the Statement of Net Position as a reduction of
debt obligations and are not included in the Statement of Activities. Bond
principal payments for the current year are as follows:
Interest on debt is reported in the Governmental Funds when the payments are
rendered. In the Statement of Activities, interest expense is allocated over the time
periods it pertains to. Interest expense allocated to applicable periods is greater than
Governmental Funds interest expense by the following amount:
Payments for compensated absences are reported in the Governmental Funds as
they are due . In the Statement of Activities, these amounts are reported in the
periods that the liabilities are incurred. Current year expenditures for amounts
due from prior years are removed and an expense is recognized for current
year liabilities that have not been paid:
Prior year expenses
Current year expenses
Payments for other post employment benefits are reported in the Governmental Funds
as they are due . In the Statement of Activities , an expense is recognized based on an
actuarial estimate of the current year cost associated with amortizing
141 ,864
( 133 ,199)
(
282,717
1,467)
8,665
the estimated present value of future benefits over a thirty-year period. ( 631,675)
Payments for pension expenses are reported in the Governmental Funds as they are due .
In the Statement of Activities, the expense is adjusted based on pension information
provided by the retirement system in accordance with GASB 68 .
Amortization of bond premiums are not reported in the Governmental Funds. In the
Statement of Activities, an adjustment to interest expense is recognized based on
the current year amortization associated with the bonds.
Interfund transactions are eliminated in the Statement of Activities . The amounts
offset, and have a zero effect on operations:
Change in Net Position
Transfers in
Transfers out
See notes to financial statements .
- 8 -
580,898
( 580,898)
198,323
2,657
$ ( 429,834)
TOWN OF ITHACA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2015
PROPRIETARY FUNDS
Sewer Water
Fund Fund Total
CURRENT ASSETS:
Cash $ 2,557,941 $ 2, 199,516 $ 4,757,457
Cash, restricted 8,011 14,234 22,245
Accounts receivable:
Water and sewer rents 419,841 474,782 894,623
Due from other governments 2,926,487 2,926,487
TOT AL CURRENT ASSETS 2,985,793 5,615,019 8,600,812
CAPITAL ASSETS, net:
Equipment and machinery 170,203 214,643 384,846
Infrastructure 1,586,590 8,307,503 9,894,093
Construction in progress 349,474 3,150,102 3,499,576
TOTAL CAPITAL ASSETS 2,106,267 11,672,248 13,778,515
TOT AL ASSETS 5,092,060 17,287,267 22,379,327
DEFERRED PENSION OUTFLOW 17,738 33,093 50,831
TOTAL ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES $ 5,109,798 $ 17 ,320,360 $ 22,430,158
CURRENT LIABILITIES:
Accrued liabilities $ 14,989 $ 274,173 $ 289,162
Bond interest payable 51,310 51,310
Due to other funds 34,853 42,009 76,862
Due to other governments 40,000 40,000
Long-term debt, current portion 736,760 736,760
TOTAL CURRENT LIABILITIES 89,842 1,104,252 1,194,094
LONG-TERM DEBT' non current 11,159,307 11,159,307
PREMIUM ON BONDS PAYABLE 137,136 137,136
NET PENSION LIABILITY 10,571 19,723 30,294
LONG-TERM LIABILITIES 113,336 281,959 395,295
TOT AL LIABILITIES 213,749 12,702,377 12,916,126
INVESTED IN CAPITAL ASSETS,
net of related debt 2,106,267 2,677,931 4,784,198
RESTRICTED:
Benefits 8,011 14,234 22,245
UNRESTRICTED 2,781,771 1,925,818 4,707,589
TOTAL NET POSITION 4,896,049 4,617,983 9,514,032
TOT AL LIABILITIES AND NET POSITION $ 5,109,798 $ 17,320,360 $ 22,430,158
See notes to financial statements.
- 9 -
TOWN OF ITHACA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES
IN FUND NET POSITION
PROPRIETARY FUNDS
December 31, 2015
PROPRIETARY FUNDS
Sewer Water
Fund Fund Total
OPERA TING REVENUES:
Charges for services $ 2,567,817 $ 3,378,122 $ 5,945,939
TOT AL OPERA TING REVENUES 2,567,817 3,378,122 5,945,939
OPERATING EXPENSES:
Cost of sales and services 1,613,957 2,482,694 4,096,651
Wages and benefits 140,811 379,655 520,466
Depreciation 60,471 244,146 304,617
Administration 36,607 47,063 83,670
TOTAL OPERATING EXPENSES 1,851,846 3,153,558 5,005,404
OPERATING INCOME 715,971 224,564 940,535
NON-OPERATING REVENUES (EXPENSES):
Real property taxes 201,581 772,659 974,240
Intergovernmental charges 619 619
Local sources 8,977 12,259 21,236
Interest expense ( 220,775) ( 220,775)
Use of money and property 2,471 2,261 4,732
TOTAL NON-OPERATING REVENUES 213,029 567,023 780,052
INTERFUND OPERA TING TRANSFERS ( 173,800) 803,736 629,936
CHANGE IN NET POSITION 755,200 1,595,323 2,350,523
NET POSITION, beginning of year 4,140,849 3,022,660 7,163,509
NET POSITION, end of year $ 4,896,049 $ 4,617,983 $ 9,514,032
See notes to financial statements.
-10 -
TOWN OF ITHACA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
December 31, 2015
PROPRIETARY FUNDS
Sewer Water
Fund Fund Total
CASH FLOWS FROM OPERA TING ACTIVITIES:
Received from user charges and other assessments $ 2,559,853 $ 3,330,660 $ 5,890,513
Payments for administration ( 36,607) ( 47,063) ( 83,670)
Payments for wages and benefits ( 150,434) ( 397,608) ( 548,042)
Payments to suppliers for goods and services ( 1,602,273) ( 2,416,154) ( 4,018,427)
NET CASH PROVIDED BY OPERA TING ACTIVITIES 770,539 469,835 1,240,374
CASH FLOWS FROM NON-CAPITAL FINANCING:
Real property taxes 201,581 772,658 974,239
Operating grants 39,315 17,747 57,062
Transfers to other funds ( 173,800) 803,736 629,936
NET CASH PROVIDED BY
NON-CAPITAL FINANCING ACTIVITIES 67,096 1,594,141 1,661,237
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Proceeds from capital debt 145,141 145,141
Acquisition of capital assets ( 260,591) ( 201,499) ( 462 ,090)
Principal paid on capital debt ( 1,540,283) ( 1,540,283)
Interest paid on capital debt ( 220,530) ( 220,530)
NET CASH USED IN CAPITAL AND
RELATED FINANCING ACTIVITIES ( 260,591) ( 1,817,171) ( 2,077,762)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest on cash and CD's 2,471 2,261 4,732
NET CASH PROVIDED BY INVESTING ACTIVITIES 2,471 2,261 4,732
NET CHANGE IN CASH AND CASH EQUIV A LENTS 579,515 249,066 828,581
Cash, beginning of year 1,986,437 1,964,684 3,951,121
Cash, end of year $ 2,565,952 $ 2,213,750 $ 4,779,702
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED BY OPERA TING ACTIVITIES:
Operating income $ 715,971 $ 224,564 $ 940 ,535
Adjustments to reconcile operating income to net
cash provided by operating activities:
Depreciation 60,471 244,146 304,617
Amortization of bond premiums ( 9,249) ( 9,249)
Changes in receivables ( 7,964) ( 47,462) ( 55,426)
Changes in prepaid expenses 3,596 7,569 11, 165
Changes in deferred outflows of resources ( 17,738) ( 33,093) ( 50 ,831)
Changes in liabilities 16,203 83,360 99,563
NET CASH PROVIDED BY OPERA TING ACTIVITIES $ 770,539 $ 469,835 $ 1,240,374
See notes to financial statements.
-11 -
TOWN OF ITHACA
STATEMENT OF FIDUCIARY NET POSITION
AGENCY FUNDS
December 31, 2015
ASSETS:
Cash
TOT AL ASSETS
LIABILITIES:
Accounts payable and other liabilities
TOT AL LIABILITIES
NET POSITION
TOTAL LIABILITIES AND NET POSITION
See notes to financial statements.
-12 -
$ 131,753
$ 131,753
$ 131,753
131,753
$ 131,753
TOWN OF ITHACA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the Town of Ithaca have been prepared in conformity
with generally accepted accounting principles (GAAP) as applied to government units. The
Governmental Accounting Standards Board (GASB) is the accepted standard setting body for
establishing governmental accounting and financial reporting principles.
A. Financial Reporting Entity
The Town of Ithaca, which was established in 1821, is governed by the Town
Law, other general municipal laws of the State of New York, and various local
laws. The Town Board is the legislative body responsible for the overall
operation, the Town Supervisor serves as Chief Executive Officer and Chief
Fiscal Officer.
The Town provides the following principal services : fire protection, transportation
(streets and highways), recreation, planning and zoning, general administration,
and public improvements.
Street lighting is provided by the Town Board in nine separate areas of the Town
called lighting districts. It is funded by means of a tax on the real property
situated within each district. The Town provides for intersection street lighting
from the General Fund appropriations.
Fire protection for certain areas of the Town outside the village is provided by the
Town Board via the Ithaca Fire Protection District. This district is funded by
means of a tax on the real property situated within the district. Services for fire
protection are contracted out through the City of Ithaca and the Village of Cayuga
Heights.
All governmental activities and functions performed for the Town of Ithaca are its
direct responsibility. No other governmental organization has been included or
excluded from the reporting entity.
The financial reporting entity consists of the following, as defined by
Governmental Accounting Standards Board (GASB) Statement #14, "The
Financial Reporting Entity:"
1. The primary government which is the Town of Ithaca.
2. Organizations for which the primary government is financially accountable,
and;
3. Other organizations for which the nature and significance of their relationship
with the primary government is such that exclusion would cause the reporting
entity's general purpose 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 #14, including legal standing, fiscal
dependency, and financial accountability.
-13 -
B. Excluded from the Reporting Entity
The following activities are jointly undertaken with other municipalities. These
activities are excluded from the Town's financial statements.
1. Southern Cayuga Lake Intermunicipal Water Commission (SCLIWC) is a
joint venture involving the Towns oflthaca, Dryden, Lansing and the Villages
of Cayuga Heights and Lansing. The joint venture operates under terms of an
original agreement dated March 1, 1977 and has been amended several times,
the last on which is dated January 1, 2011.
• SCLIWC's executive body consists of ten members, two members being
appointed by each municipality. The Treasurer of SCLIWC is traditionally
the Town oflthaca's Supervisor.
• The Town of Ithaca owns a majority (51.87%) of the Commission and
must adopt its budget and any subsequent amendments.
• The executive body has established charges at rates intending to be self-
sustaining to cover all operating costs and debt service. Any shortfalls in
revenues produced by such charges will ultimately be provided by
contributions from participants.
A separate audited financial statement is available from the administrative
offices of the Southern Cayuga Lake Intermunicipal Water Commission, 1402
East Shore Drive, Ithaca, New York 14850. For the year ended December 31,
2015, the audited financial statements of the Commission showed:
Total Assets
Deferred Outflows of Resources
Total Liabilities
Net Position
Revenues
Expenses
$
$
$
$
$
$
12,773,625
181,156
7,966,796
4,987,985
4,494,054
3,506,752
2 . The Ithaca Area Wastewater Treatment Plant (IAWTP) is a joint venture
involving the Towns of Ithaca and Dryden, and the City of Ithaca. This joint
venture was formed for the treatment of wastewater. The joint venture
operates under terms of an original agreement dated December 22, 1981 and
has been amended several times, the last of which is dated December 31,
2003. Construction of the treatment plant began in 1984 and was completed
in 1986.
• The Special Joint Committee (governing body) of the IA WTP consists of
eight members; four from the City of Ithaca, three from the Town of
Ithaca, and one from the Town of Dryden. The City oflthaca operates the
plant and has custody of the joint activity funds.
• Capital costs allocated to the Town of Ithaca are 40.69% of the total.
• The governing body has established charges at rates intending to be self-
sustaining to cover all operating costs and debt service. Any shortfall in
revenues produced by such charges is to be provided by equal share
contributions from the participants.
-14 -
The following information is from the separately issued financial statements
of the IA WTP for the year ended December 31, 2012 (latest available):
Total Assets
Total Liabilities
Total Equity
Total Revenues
Total Expenses
C. Basis of Presentation
1. Government-wide Statements
$ 32,161,483
$ 12,261,156
$ 19,900,327
$ 3,619,504
$ 4,895,629
The Statement of Net Position and the Statement of Activities present
financial information about the Town's governmental activities. These
statements include the financial activities of the overall government in its
entirety, except those that are fiduciary. Eliminations have been made to
minimize the double counting of internal transactions. These statements
distinguish between the governmental and business-type activities of the
Town. Governmental activities generally are financed through taxes, state
aid, intergovernmental revenues, and other exchange and nonexchange
transactions. Business-type activities are financed in whole or in part by fees
charged to external parties. Operating grants include operating-specific and
discretionary (either operating or capital) grants, while the capital grants
column reflects capital-specific grants.
The Statement of Activities presents a comparison between direct expenses
and program revenues for each function of the Town's governmental
activities. Direct expenses are those that are specifically associated with and
are clearly identifiable to a particular function. Program revenues include
charges paid by the recipients of goods or services offered by the programs,
and grants and contributions that are restricted to meeting the operational or
capital requirements of a particular program. Revenues that are not classified
as program revenues, including all taxes, are presented as general revenues.
2. Fund Financial Statements
The fund statements provide information about the Town's funds, including
fiduciary funds. Separate statements for each fund category (governmental,
proprietary, and fiduciary) are presented. The emphasis of fund financial
statements is on major Governmental and Enterprise Funds, each displayed in
a separate column. All remaining Governmental Funds are aggregated and
reported as non-major funds.
Proprietary fund operating revenues, such as charges for services, result from
exchange transactions associated with the principal activity of the fund.
Exchange transactions are those in which each party receives and gives up
essentially equal values. Non-operating revenues, such as subsidies and
investments earnings, result from non-exchange transactions or ancillary
activities.
-15 -
The Town oflthaca reports the following major Governmental Funds:
• General Fund: This is the Town's primary operating fund. It
accounts for all financial transactions that are not required by law or
other provision to be accounted for in other funds.
• Highway Fund: Used to account for revenues and expenditures for
part town highway purposes.
• Fire Protection District Fund: Used to record transactions involving
the Town Fire Protection District and the contracts for fire protection
with the City of Ithaca and Village of Cayuga Heights.
• Capital Projects Fund: Used to account for capital improvements
financed from current monies transferred from other funds, federal and
state grants and proceeds of obligations.
The Town also reports the following non-major funds:
• Lighting District Fund: Used to record operation and maintenance
transactions. Revenues derived from special districts' assessment.
• Debt Service Fund: Used to account for interest earned on proceeds
of borrowing for capital projects. Interest earned is transferred to the
Debt Service Fund from the Capital Projects Fund and then to the
Operating Funds for payment of principal and interest. Annual
principal and interest payments due on serial bonds are transferred
from the Town's other funds. Payments are made directly from the
Debt Service Fund to the respective paying agents.
• Inlet Valley Cemetery Fund: The Inlet Valley Cemetery Association
was dissolved in 2010, upon which ownership of the cemetery
devolved to the Town in accordance with state statutes . This account
is used to account for funds used for maintenance of the cemetery.
The Town reports the following major enterprise funds:
• Water Fund: This enterprise fund is used to account for the activity
of providing water service to residents of the Town of Ithaca. The
Town is responsible for the collection of water revenues in the Town
of Ithaca and contracts for delivery services with the Southern Cayuga
Lake Intermunicipal Water Commission (SCLIWC) and Ithaca Area
Wastewater Treatment Plant (IAWTP).
• Sewer Fund: This enterprise fund is used to account for the activity
of providing sewer service to residents of the Town of Ithaca. The
Town is responsible for the collection of sewer revenues in the Town
of Ithaca and contracts for treatment services with the Southern
Cayuga Lake Intermunicipal Water Commission (SCLIWC) and
Ithaca Area Wastewater Treatment Plant (IAWTP).
The Town reports the following fiduciary funds:
• Agency Fund: Used to account for those funds held in custody and
subsequent distributions, transmittal or release to other governments,
individuals or to other funds.
-16 -
D. Measurement Focus and Basis of Accounting
The Government-Wide financial statements are reported using the economic
resources measurement focus and the accrual basis of accounting. Revenues are
recorded when earned and expenses are recorded at the time liabilities are
incurred, regardless of when the related cash transaction takes place .
Nonexchange transactions, in which the Town gives or receives value without
directly receiving or giving equal value in exchange, include property taxes,
grants and donations. On an accrual basis, revenue from property taxes is
recognized in the fiscal year for which the taxes are levied . Revenue from grants
and donations are recognized in the fiscal year in which all eligibility
requirements have been satisfied.
Proprietary funds distinguish operating revenues and expenses from non-
operating items. Operating revenues and expenses generally result from
providing services and producing and delivering goods in connection with a
proprietary fund's principal ongoing operations. The principal operating revenues
of the Town are charges to customers for sewer and water fees. Operating
expenses for enterprise funds include the cost of sales and services, administrative
expenses, and depreciation on capital assets. All revenues and expenses not
meeting this definition are reported as non-operating revenues and expenses.
The Governmental Funds are reported using the current financial resources
measurement focus and 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. 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 the related fund liability is incurred, except for
principal and interest on general long-term debt, claims and judgments, and
compensated absences, which are recognized as expenditures to the extent they
have matured. General capital asset acquisitions are reported as expenditures in
Governmental Funds. Proceeds of general long-term debt and acquisitions under
capital leases are reported as other financing sources.
E. Property Taxes
Town real property taxes are levied annually on January 1, and become a lien on
that date. Property owners can elect to pay their taxes using one of two options.
Taxpayers may elect to pay their bill in two installments equal to Yi the total bill,
plus a 2.5% processing fee. If the installment option is selected, the first payment
is due between January 1 and January 14, without penalty, or between January 15,
and January 20, with 1 % interest (election to pay in installments ceases January
20). The second installment is due on or before July 1, payable to the County
Division of Budget and Finance.
Taxpayers may elect to pay their tax bill in full. Using this method, taxes are
collected during the period January 1 to January 31 at face value and from
February 1 to May 31 with interest added. The Town Receiver of Taxes collects
all real estate taxes for Town and County purposes. The Town Receiver
-17 -
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.
F. Budgetary Data
1. Budget Policies -The budget policies are as follows:
a. No later than October 5, 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.
b. After public hearings are conducted to obtain taxpayer comments, no later
than November 20, the Town Board adopts the budget.
c. All modifications of the budget must be approved by the Town Board.
However, the Town Supervisor is authorized to transfer certain budgeted
amounts within departments.
d. Appropriations lapse at year-end.
2. Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other
commitments for the expenditure of monies are recorded for budgetary control
purposes to reserve that portion of the applicable appropriations, is employed
in all funds. Encumbrances are reported as reservations of fund balances
since they do not constitute expenditures or liabilities. Expenditures for such
commitments are recorded in the period in which the liability is incurred. For
the year ended December 31 , 2015, no budgetary encumbrances were
outstanding. In the interest of accurately monitoring, budgeting and
maintaining an adequate operating fund balance in all funds, it is the Town's
fiscal practice not to encumber unused appropriations into the ensuing year's
budgeted operations.
G. Cash and Investments
The Town of Ithaca's investment policies are governed by State statutes . In
addition, the Town of Ithaca has its own written investment policy. Town of
Ithaca's monies must be deposited in FDIC insured commercial banks or trust
companies located within the State. The supervisor is authorized to use demand
account 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 deposits and certificates of deposit not covered
by federal deposit insurance. Obligations that may be pledged as collateral are
obligations of the United States and its agencies and obligations of the State and
its municipalities and school districts.
The written investment policy requires repurchase agreements to be purchased
from banks located within the state and that underlying securities must be
obligations of the federal government and New York State. Underlying securities
must have market value of at least the cost of the repurchase agreement.
-18 -
H. Accounts Receivable
Accounts receivable are shown gross, with uncollectible amounts recognized
under the direct write-off method. No allowance for uncollectible accounts has
been provided since it is believed that such allowance would not be material. All
receivables are expected to be collected within the subsequent fiscal year.
I. Due to/from Other Funds
Amounts due to and due from within the same fund type are eliminated in the
Government-wide statements. Inter-fund receivables and payables are detailed in
Note 4 on page 28 .
J. Inventories and Prepaid Items
Purchases of inventoriable items are recorded as expenditures in the
Governmental Funds at the time of purchase. Inventory-type items are considered
immaterial and , consequently, are not provided in the Government-wide
statements.
Prepaid items represent payments made by the Town for which benefits extend
beyond year-end.
K. Capital Assets
Capital assets are reported at historical costs . The Town depreciates capital assets
using the straight-line method over the estimated useful life of the assets.
Capitalization thresholds (the dollar value above which capital asset acquisitions
are added to the capital asset accounts) and estimated useful lives of capital assets
reported in the Government-wide statements are as follows:
Building and improvements
Non-building improvements
Equipment and machinery
Furniture and furnishings
L. Infrastructure
Capitalization
Threshold
$ 5,000
5,000
5,000
5,000
Estimated
Useful
Life
30-40 years
15-20 years
5-15 years
10 years
The Town includes long-lived improvements to roads, water and sewer systems as
capital assets in the Government-wide statements . Infrastructures are reported at
historical costs and are depreciated using the straight-line method over their
estimated useful lives.
Capitalization thresholds and estimated useful lives for infrastructures are as
follows:
Road systems
Water and sewer systems
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Capitalization
Threshold
$ 10,000
10 ,000
Estimated
Useful
Life
20 years
40 years
M. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position will sometimes report 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(s) and so will not be recognized as an outflow of
resources (expense/expenditure) until then . The Town has one item that qualifies
for reporting in this category; the deferred outflow related to pensions reported in
the Statement of Net Position.
In addition to liabilities, the statement of net position will sometimes report a
separate section for deferred inflows of resources. This separate financial
statement element, deferred inflows of resources , represents an acquisition of net
position that applies to a future period(s) and therefore, will not be recognized as
an inflow of resources (revenue) until that time. The Town does not have items
that qualify for reporting in this category for the year ended December 31 , 2015 .
N. Vested Employee Benefits
Employees accrue (earn) vacation leave based on the number of years employed
up to a maximum of20 days a year. Upon separation from service, employees are
paid for unused vacation time.
Employees accrue (earn) sick leave at the rate of one day per month and may
accumulate such credits up to a total of 120 days . Employees who retire apply
any unused sick leave to pay for individual cost employee health insurance
benefits and potentially add accumulated sick time to be credited to their service
time in the New York State Retirement System. In 2015 , the Town has recognized
a liability of $265 ,249 based on accumulated sick time balances currently being
spent down by retirees and accumulated sick time balances of current Town
employees who have reached minimum retirement age and would be eligible to
apply accumulated sick time towards the payment of health insurance premiums.
The balance is allocated to a current ($24,856) and long-term ($240 ,393) liability
in the Government-wide statements. The liability for accrued vacation time is
reflected in the Government-wide statements as a long-term liability.
In addition to providing pension benefits, the Town of Ithaca provides health
insurance coverage for retired employees . Substantially all of the Town's
employees may become eligible for these benefits if they reach normal retirement
age while working for the Town. Health care benefits are provided through an
insurance company whose premiums are based on the benefits paid during the
year for the community. These benefits are further discussed in Note 9.
0. Unemployment Insurance
As of January 1, 1978, Town employees are covered by unemployment insurance.
The Town has chosen to discharge its liability to the New York State
Unemployment Insurance Fund by means of the benefit reimbursement method.
This is a dollar-for-dollar reimbursement to the Unemployment Insurance Fund
for the benefits paid to former employees and charged to the Town's account. The
Town is exempt from federal unemployment insurance tax.
P. Deferred Compensation
The Town offers their employees a Deferred Compensation Plan (the Plan)
created in accordance with Internal Revenue Code Section 457 . The Plan, which
is available to all eligible participants, permits participants to defer a portion of
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their salary (25% of gross wages not to exceed $8,000) until future years.
Amounts deferred under the Plan are not available to the employee until
termination, retirement, death or unforeseeable emergency.
Effective, January 1, 1998, all amounts of compensation deferred under the Plan,
all property and rights purchased with the amounts, and all income attributable to
these amounts are the sole property of the employee. As required, the Town
Supervisor is the Chairman of the Town's Deferred Compensation Committee and
Trustee.
Q. Risk Retention
The Town oflthaca is exposed to various risks ofloss related to employee injury.
During 1996 the Town established reservations of fund balance to finance certain
uninsured risks of loss in the interest of lower annual insurance costs. Claims that
will be paid from these reserves are for small employee medical claims. During
the year ended December 31, 2015, $10,156 was paid out on behalf of the
employees .
R. Restricted Resources
When an expense is incurred for purposes for which both restricted and
unrestricted net position is available, it is the Town's policy to apply restricted
funds before unrestricted funds, unless otherwise prohibited by legal
requirements.
S. Equity Classification
1. Government-wide Statements
Equity is classified as net position and displayed in three components:
• Invested in Capital Assets, Net of Related Debt
Consists of capital assets including restricted capital assets, net of
accumulated depreciation and reduced by the outstanding balances of any
bonds, mortgages, notes or other borrowings that are attributable to the
acquisition, construction, or improvement of those assets.
• Restricted Net Position
Consists of net position 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 Net Position
All other net position that does not meet the definition of "restricted" or
"invested in capital assets, net ofrelated debt."
2. Fund Financial Statements
During the year ending December 31, 2011, the Commission implemented
Governmental Accounting Standards Board (GASB) Statement No. 54, Fund
Balance Reporting and Governmental Fund Type Definitions. Statement No.
54 changes the terminology and classification of fund balance to reflect
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spending constraints on resources, rather than availability for appropriation to
provide users more consistent and understandable information about a fund's
net resources. Constraints are broken down into five different classifications:
nonspendable, restricted, committed, assigned, and unassigned. The
classifications serve to inform readers of the financial statements of the extent
to which the government is bound to honor constraints on the specific
purposes for which resources in a fund can be spent.
Governmental fund equity is classified as fund balance. In the fund basis
statements there are five classifications of fund balance:
• Nonspendable Fund Balance
Consists of assets that are 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 principal of endowments .
The Town's nonspendable fund balance is comprised of prepaid expenses.
• Restricted Fund Balance
Consists of amounts that are subject to externally enforceable legal
purpose restrictions imposed by creditors, grantors, contributors or laws or
regulations of other governments; or imposed by law through
constitutional provisions or enabling legislation. The Town's restricted
fund balance includes a general purpose benefit reserve, a parks and open
space plan reserve, a highway equipment reserve and a reserve for
cemetery maintenance.
• Committed Fund Balance
Consists of amounts that are subject to a purpose constraint imposed by
formal action of the Town's highest level of decision making authority
(the Town Board) before the end of the fiscal year and that require the
same level of formal action to remove the constraint.
• Assigned Fund Balance
Consists of amounts that are subject to a purpose constraint that represents
an intended use established by the government's highest level of decision
making authority or by their designated body or official. In funds other
than the General Fund, the Town's assigned fund balance represents the
residual amount of fund balance. In the General Fund, assigned fund
balance represents the portion of fund balance appropriated for the ensuing
year's budget.
• Unassigned Fund Balance
Represents the residual classification of the government's general fund
and could report a surplus or a deficit. In funds other than the general
fund, the unassigned classification is used only to report a deficit balance
resulting from overspending for specific purposes for which amounts had
been restricted, committed or assigned .
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3. Order of Use of Fund Balance
The Town's policy is to apply expenditures against nonspendable fund
balance, restricted fund balance, committed fund balance, assigned fund
balance and unassigned fund balance at the end of the fiscal year. For all
funds, nonspendable fund balances are determined first and then restricted
fund balances for specific purposes are determined. Any remaining fund
balance amounts for funds other than the General Fund are classified as
committed or assigned fund balance. In the General Fund, committed fund
balance is determined next and then assigned fund balance. The remaining
amounts are reported as unassigned. Assignments of fund balance cannot
cause a negative unassigned fund balance.
4. Fund Financial Statements -Restricted Fund Balance
• The General Town-Wide Fund equity includes reserve funds established
for the purpose of future park development and purchasing rights as
outlined in the Town's Open Space Plan. The balance at the end of 2015
was $811,260. This Reserve Fund was designated by Board Resolution
No. 170 of October 2, 1997. Interest earnings and additional funding for
the year both increased the Reserve Fund.
• The General Part-Town Highway Fund equity includes reserve funds
established for the replacement of highway machinery. The balance at the
end of 2015 was $249,988. This Highway Equipment Reserve Fund was
designated by Board resolution No. 193 of November 8, 1984, and any
unexpended appropriation for machinery at year end is to be transferred to
the Reserve Fund. The Reserve Fund is also increased by interest earned
for the year.
• The General Town-Wide Fund, the General-Part Town Fund, the General
Part-Town Highway Fund, the Water Fund, and the Sewer Fund equity
includes funds established for fiscally managing annual economic
increases and decreases in employee fringe benefits (E.g. NYS Retirement
Costs, Health Insurance). The aggregate balance at the end of 2015 was
$366,316. This Reserve Fund was established at the June 13, 2005 Town
Board meeting under Board Resolution No. 084. The reserve is funded on
an annual basis as assessed by the Town Board. The reserve also is
increased by interest earned for the year. The balance by fund is as
follows:
General Town-wide Fund
General Part-Town Fund
General Part-Town Highway Fund
Water Fund
Sewer Fund
$
$
180,522
63,595
99,954
14,234
8 011
366.316
• The General Town-Wide Fund equity includes reserve funds designated
for the maintenance of the Pine Tree Wildlife Preserve, donated to the
Town by a local family in 2013. In conjunction with the donation of the
land, the amount of $40,000 was donated to provide for future
maintenance of the preserve. As of December 31, 2015, the balance of the
reserve totaled $40,067.
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• In 2014, the Town purchased development rights to Indian Creek Farm
with financial assistance through a grant provided by New York State. The
grant included $10,000 to be held in reserve by the Town, designated for
future stewardship of Indian Creek Farm lands. The reserve is reflected in
the General Townwide Fund and had a balance of $10,010 at December
31, 2015.
• The Inlet Valley Cemetery Fund reserve includes funds provided for the
maintenance of the cemetery. The balance at the end of 2015 was $9,083.
T. Inter-fund Transfers
The operations of the Town gives rise to certain transactions between funds,
including transfers to provide services and construct assets. The amounts reported
on the Statement of Revenues, Expenditures and Changes in Fund Balance-
Governmental Funds for inter-fund transfers have been eliminated for the
Statement of Activities. A detailed description of the individual fund transfers
that occurred during the year is provided subsequently in these Notes.
U. New Accounting Pronouncements
GASE Statement No. 68
In June 2012, the GASB issued Statement No. 68, "Accounting and Financial
Reporting for Pensions". The objective of this Statement is to improve financial
reporting by state and local governmental pension plans . The Statement improves
information provided by state and local governmental employers about financial
support provided for pensions that is provided by other entities. The Town has
adopted GASB Statement No. 68 for its 2015 financial statements.
GASE Statement No. 69
In January 2013, the GASB issued Statement No. 69, "Government Combinations
and Disposals of Government Operations". The objective of this Statement is to
improve financial reporting by addressing accounting and financial reporting for
government combinations and disposals of government operations . The Town
adopted GASB Statement No. 69 in its 2015 financial statements. No transactions
occurred during 2015 within the scope of the statement.
GASE Statement No. 70
In April 2013 , the GASB issued Statement No. 70, "Accounting and Financial
Reporting for Nonexchange Financial Guarantees". The objective of this
Statement is to improve the recognition, measurement, and disclosure guidance
for state and local governments that have extended or received financial
guarantees that are nonexchange transactions. The Town adopted GASB
Statement No. 70 in its 2015 financial statements. No transactions occurred
during 2015 within the scope of the statement.
GASE Statement No . 71
In November 2013 , the GASB issued Statement No. 71, "Pension Transition for
Contributions Made Subsequent to the Measurement Date". The objective of this
Statement is to improve accounting and financial reporting by addressing an issue
in Statement No. 68 , "Accounting and Financial Reporting for Pensions",
concerning transition provisions related to certain pension contributions made to
defined benefit pension plans prior to implementation of that Statement by
employers and non-employer contributing entities. The Town adopted GASB
Statement No. 71 for its 2015 financial statements.
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GASE Statement No . 72
In February 2015 , the GASB issued Statement No. 72 , "Fair Value Measurement
and Application". The objective of this Statement is to improve financial
reporting by clarifying the definition of fair value for financial reporting purposes ,
establishing general principles for measuring fair value, providing additional fair
value application guidance, and enhancing disclosures about fair value
measurements. The Town is required to adopt GASB Statement No. 72 for its
2016 financial statements.
GASE Statement No. 73
In June 2015, the GASB issued Statement No. 73 , "Accounting and Financial
Reporting for Pensions That Are Not within the Scope of GASB 68 ". This
Statement establishes requirements for defined benefit pensions that are not
within the scope of Statement No. 68, Accounting and Financial Reporting for
Pensions, as well as for the assets accumulated for purposes of providing those
pensions. In addition , it establishes requirements for defined contribution
pensions that are not within the scope of Statement 68 . It also amends certain
provisions of Statement No . 67, Financial Reporting for Pension Plans, and
Statement 68 for pension plans and pensions that are within their respective
scopes. The Town is required to adopt GASB Statement No . 73 for its 2016
financial statements .
GASE Statement No . 74
In June 2015, the GASB issued Statement No. 74, "Financial Reporting for
Postemployment Benefit Plans Other Than Pension Plans ". The statement is
effective for the 2017 year. The Town has determined that GASB 74 i s not
currently applicable to their OPEB Plan .
GASE Statement No . 75
In June 2015, the GASB issued Statement No . 75, "Accounting and Financial
Reporting for Postemployment Benefits Other Than Pensions". The statement
replaces the requirements of GASB Statement No . 45 , "Accounting and Financial
Reporting by Employers for Postemployment Benefits Other Than Pensions ".
Among other things , Statement 75 requires governments to report a liability on
the face of the financial statements for the OPEB that they provide and requires
governments in all types of OPEB plans to present more extensive note
disclosures and required supplementary information about their OPEB liabilities.
The Town is required to adopt GASB Statement No . 75 for its 2018 financial
statements .
GASE Statem ent No. 76
In June 2015 , the GASB issued Statement No. 76 , "The Hierarchy of Generally
Accepted Accounting Principles for State and Local Governments ". The objective
of this Statement is to identify-in the context of the current governmental
financial reporting environment-the hierarchy of generally accepted accounting
principles (GAAP). This Statement reduces the GAAP hierarchy to two categories
of authoritative GAAP and addresses the use of authoritative and nonauthoritative
literature in the event that the accounting treatment for a transaction or other event
is not specified within a source of authoritative GAAP. The Town is required to
adopt GASB Statement No. 76 for its 2016 financial statements.
GASE Statem ent No. 77
In August 2015 , the GASB issued Statement No. 77 , "Tax Abatement
Disclosures". The Statement requires state and local governments, for the first
time, to disclose information about tax abatement agreements . It requires
governments to disclose information about their own tax abatements separately
from information about tax abatements that are entered into by other governments
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and reduce the reporting government's tax revenues. The Town is required to
adopt GASB Statement No. 77 for its 2016 financial statements.
GASE Statement No. 78
In December 2015, the GASB issued Statement No. 78, "Pensions Provided
through Certain Multiple-Employer Defined Benefit Pension Plans". This
Statement amends the scope and applicability of state or local governmental
employers through a cost-sharing multiple-employer defined benefit pension plan
that is not a state or local governmental pension plan, is used to provide defined
benefit pensions both to employees of state or local governmental employers and
has no predominant state or local governmental employer. The Town is required
to adopt GASB Statement No. 78 for its 2016 financial statements.
GASE Statement No. 79
In December 2015, the GASB issued Statement No. 79, "Certain External
Investment Pools and Pool Participants". This Statement permits qualifying
external investment pools to measure pool investments at amortized cost for
financial reporting purposes and provides guidance that will allow many pools to
continue to qualify for amortized cost accounting. The Town is required to adopt
GASB 79 for its 2016 financial statements.
GASE Statement No. 80
In January 2016, the GASB issued Statement No. 80, "Blending Requirements for
Certain Component Units". This Statement clarifies the display requirements in
GASB Statement No. 14, The Financial Reporting Entity, by requiring these
component units to be blended into the primary state or local government's
financial statements in a manner similar to a department or activity of the primary
government. The Town is required to adopt GASB Statement No. 80 for its 2017
financial statements.
GASE Statement No. 81
In March 2016, the GASB issued Statement No. 81, "Irrevocable Split-Interest
Agreements". This Statement required that a government that receives resources
pursuant to an irrevocable split-interest agreement recognize assets, liabilities, and
deferred inflows of resources at the inception of the agreement. The Statement
also requires that a government recognize assets representing its beneficial
interests in irrevocable split-interest agreements that are administered by a third
party. The Town is required to adopt GASB Statement No. 81 for its 2017
financial statements .
GASE Statement No. 82
In March 2016, the GASB issued Statement No. 82, "Pension Issues". This
Statement addresses presentation of payroll-related measures in required
supplementary information, selection of assumptions and the treatment of
deviations form guidance in Actuarial Standards of Practice for financial reporting
purposes , and classification of payments made by employers to satisfy plan
member contribution requirements. This Statement is designed to improve
consistency in the application of the pension standards by clarifying or amending
related areas of existing guidance. The Town is required to adopt GASB
Statement No. 82 for its 2017 financial statements.
V. Non-Cash Capital and Related Financing Activities -Proprietary Funds
In 2015, the Water Fund acquired capital assets totaling $2,033,673 with the
proceeds of debt. This activity is not reflected in the Statement of Cash Flows for
Proprietary Funds .
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NOTE 2 -EXPLANATION OF CERTAIN DIFFERENCES BETWEEN
GOVERNMENTAL FUND STATEMENTS AND GOVERNMENT-WIDE
STATEMENTS
Due to the differences in the measurement focus and basis of accounting used in the
governmental fund statements and the Government-wide statements, certain financial
transactions are treated differently. The differences result primarily from the
economic focus of the Statement of Activities, compared with the current financial
resources focus of the Governmental Funds.
A. Total Fund Balances of Governmental Funds vs . Net Position of Governmental
Activities:
Total fund balances of the Town's governmental funds differ from "net position"
of governmental activities reported in the Statement of Net Position. This
difference primarily results from the additional long-term economic focus of the
Statement of Net Position versus the solely current financial resources focus of
the Governmental Fund Balance Sheet.
B. Explanation of Difference between Governmental Funds Operating Statement and
the Statement of Activities :
Differences between the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balance and the Statement of Activities fall
into one of three broad categories. The amounts shown below represent these
differences as follows :
• Long-term revenue differences arise because Governmental Funds report
revenues only when the y are considered "available ," whereas the Statement of
Activities reports revenues when earned. Differences in long-term expenses
arise because Governmental Funds report on a modified accrual basis,
whereas the accrual basis of accounting is used on the Statement of Activities .
• Capital related differences include the difference between proceeds for the
sale of capital assets reported on governmental fund statements and the gain or
loss on the sale of assets as reported on the Statement of Activities, and the
difference between recording an expenditure for the purchase of capital items
in the governmental fund statements and depreciation expense on those items
as recorded in the Statement of Activities .
• Long-term debt transaction differences occur because both interest and
principal payments are recorded as expenditures in the Governmental Fund
statements , whereas interest payments are recorded in the Statement of
Activities as incurred, and principal payments are recorded as a reduction of
liabilities in the Statement of Net Position.
The basic financial statements contain a detailed reconciliation of 1) the items
creating the differences between fund balance reported in the Governmental Fund
Statements and net position reported on the Statement of Net Position and 2) the
items creating the differences between the change in fund balance reported in the
Governmental Fund Statements and the change in net position reported in the
Statement of Activities.
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NOTE 3-CASH
The Town of Ithaca's investment policies are governed by State statutes, as
previously described in these Notes. Deposits are valued at cost or cost plus
interest and are categorized as either:
1. Insured or collateralized with securities held by the entity or by its agent in the
entity's name;
2. Collateralized with securities held by the pledging financial institution's trust
department or agency in the entity's name; or
3 . Uncollateralized.
Total financial institution (bank) balances at December 31, 2015, per the bank,
were $14,603,500.
1 2
Governmental funds $ 9.593.035 $ $
Enterprise funds $ 4.757.349 $ $
Agency funds ==$======2==5==3==. 1""'1"""6 $ $
NOTE 4 -INTER-FUND ACTIVITY
Inter-fund receivables and payables at December 31, 2015, were as follows:
Fund Type
General town-wide
General part-town
Highway
Water
Sewer
Capital projects
Debt service
Agency
Inter-Fund
Receivables
$ 70,709
$
1,000
119,756
191,465
Inter-Fund
Payables
$ 56,994
$
18,870
42,009
34,853
38,739
191,465
Inter-fund revenues and expenditures at December 31, 2015, were as follows:
Inter-Fund Inter-Fund
Fund Type Revenues Expenditures
General town-wide $ 558,600 $ 153,295
General part-town 82,700
Highway 344,903
Water 803,736
Sewer 173,800
Capital projects 139,531
Risk retention 25,000
Non-major 772,169
$ 1,526,867 $ 1,526,867
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3
NOTE 5 -CAPITAL ASSETS
Capital asset balances and activity for the year ended December 31, 2015, were as follows:
Beginning Disposals & Ending
Balance Additions Reclassifications Balance
Governmental Funds
CAPITAL ASSETS THAT ARE
NOT DEPRECIATED:
Land $ 439,880 $ $ $ 439,880
Construction in progress 1,874,449 21,460 1,895,909
TOTAL NON-DEPRECIABLE
HISTORICAL COST 2,314,329 21,460 2,335,789
CAPITAL ASSETS THAT ARE DEPRECIATED:
Buildings 4,539,494 171,755 4,711,249
Equipment and machinery 5,042,016 497,082 329,688 5,209,410
Furniture and furnishings 209,179 209,179
Non-building improvements 411,196 137,235 548,431
Infrastructures 2,941,158 993,131 3,934,289
TOTAL DEPRECIABLE HISTORICAL COST 13,143,043 1,799,203 329,688 14,612,558
LESS ACCUMULATED DEPRECIATION:
Buildings 1,479,638 149,975 1,629,613
Equipment and machinery 2,366,686 512,939 198,840 2,680,785
Furniture and furnishings 186,103 11, 733 197,836
Non-building improvements 276,211 32,809 309,020
Infrastructures 484,332 174,658 658,990
TOT AL ACCUMULATED DEPRECIATION 4,792,970 882,114 198,840 5,476,244
TOTAL HISTORICAL COST, net $ 10,664,402 $ 938,549 $ 130,848 $ 11,472,103
Depreciation was charged to governmental functions as follows:
General government support $ 125,427
Transportation 529,154
Culture and recreation 73,173
Home and community services 154,360
Total Depreciation Expense $ 882,114
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Beginning Disposals & Ending
Balance Additions Reclassifications Balance
Enterprise Funds
CAPITAL ASSETS THAT ARE
NOT DEPRECIATED:
Construction in progress
CAPITAL ASSETS THAT ARE DEPRECIATED:
Equipment and machinery
Infrastructures
TOT AL DEPRECIABLE HISTORICAL COST
LESS ACCUMULATED DEPRECIATION:
Equipment and machinery
Infrastructures
TOT AL ACCUMULATED DEPRECIATION
TOTAL HISTORICAL COST, net
$ 1,877,452
170,785
11,368,645
.11,539,430
14,575
1,814,938
1,829,513
$ 11,587,369
$ 2,183,447
252,167
821,172
1,073,339
23,531
281,086
304,617
$ 2,952,169
$ 561,323
199,700
199,700
$ 761,023
Depreciation was charged to governmental functions as follows :
Home and community services
Total Depreciation Expense
NOTE 6 -LIABILITIES
A. Pension Plans
Plan Description
$ 3,499,576
422,952
11,990,117
12,413,069
38,106
2,096,024
2,134,130
$ 13,778,515
$ 304,617
$ 304,617
The Town of Ithaca participates in the New York State and Local Employees'
Retirement System (ERS) and the Public Employees' Group Life Insurance Plan
(Systems). These are cost-sharing multiple-employer retirement systems. The
Systems provide retirement benefits as well as death and disability benefits.
Obligations of employers and employees to contribute and benefits to employees
are governed by the New York State Retirement and Social Security Law
(NYSRSSL). As set forth in the NYSRSSL, the Comptroller of the State of New
York (Comptroller) serves as sole trustee and administrative head of the Systems.
The Comptroller shall adopt and may amend rules and regulations for the
administration and transaction of the business of the Systems and for the custody
and control of their funds. The Systems issue a publicly available financial report
that includes financial statements and required supplementary information. That
report may be obtained by writing to the New York State and Local Retirement
Systems, Gov. Alfred E. Smith State Office Building, Albany, NY 12244.
Funding Policy
The Systems are noncontributory except for employees who joined the New York
State and Local Employees' Retirement System after July 27, 1976 who
contribute 3% of their salary for their first 10 years in the system, and employees
who joined on or after January 1, 2010 who generally contribute 3% percent of
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their salary for their entire length of service. Under the authority of the
NYSRSSL, the Comptroller shall certify annually the rates expressed as
proportions of member payroll and employer contributions, used in computing the
contributions required to be made by employers to the pension accumulation fund.
Chapter 126 adds Article 19 "Benefits Enhancements" of the New York State and
Local Employees Retirement System. An Eligible Tier III or IV member with ten
or more years of membership or ten years credited service, will not be required to
contribute to the Retirement System. Effective in 2000 the Town adopted Section
4 lj of the Retirement System. This allows a retiring municipal employee to add
service credit by using accumulated sick time.
The Town of Ithaca is required to contribute at an actuarially determined rate.
The required contributions for the current year and three preceding years were:
ERS
2015 $ 548,769
2014 $ 570,512
2013 $ 602,622
2012 $ 545,008
Town contributions made to the Systems were equal to 100% of the contributions
required for each year. Since 1989, the Systems' billings have been based on
Chapter 62 of the Laws of 1989 of the State of New York. This legislation
requires participating employers to make payments on a current basis, while
amortizing existing unpaid amounts relating to the Systems' fiscal years ended
March 31, 1988 and 1989 (which otherwise were to have been paid on June 30,
1989 and 1990, respectively) over a 17 year period, with an 8.75% interest factor
added. Local governments were given the option to prepay this liability. The
Town's total unpaid liability at the end of 2015 fiscal year was $0.
a. Southern Cayuga Lake Intermunicipal Water Commission Pension Plan
The Southern Cayuga Lake Intermunicipal Water Commission's payroll is
prepared through the Town of Ithaca, resulting in the New York State and
Local Retirement Plan billings being a combination of the Town's and the
Water Commission's. The Water Commission is remitted along with the
Town's share.
Pension Liabilities and Def erred Outflows of Resources Related to Pensions
At December 31, 2015, the Town reported the following liability for its
proportionate share of the net pension liability for the Systems. The net pension
liability was measured as of March 31, 2015. The total pension liability used to
calculate the net pension liability was determined by an actuarial valuation.
Measurement date
Net pension liability
Town's portion of the Plan's total net pension liability
March 31, 2015
$ 387,122
0.011%
At year end December 31, 2015, the Town recognized pension expenses of
$339,044. The Town reported deferred outflows of resources related to pensions
from the following sources:
-31 -
Differences between expected and actual experience
Changes of assumptions
Net difference between projected and actual
investment earnings on pension plan investments
Changes in proportion and differences between
employer contributions and proportionate share of
contributions
Total
$
$
Deferred
Outflows of
Resources
12,392
67,238
21,130
100,760
The Town's contributions subsequent to the measurement date for the Plans
amounted to $548,700.
The Town's contributions subsequent to the measurement date will be recognized
as a reduction of the net pension liability in the year ended December 31, 2016.
The Town's balances of deferred outflows of resources related to pensions will be
recognized in the pension expense as follows:
Actuarial Assumptions
2016
2017
2018
2019
Total
$
$
25,190
25,190
25,190
25,190
100,760
The Town's total pension liability as of the measurement date was determined by
using an actuarial valuation as of April 1, 2014, with updated procedures used to
roll forward the total pension liability to March 31, 2015. The actuarial
valuations used the following actuarial assumptions:
Actuarial cost method
Inflation
Investment rate of return
Salary scale
Projected COLAs
Decrement tables
Entry age normal
2.7%
7.5%
4.9%
1.4%
04/01/05-03/31/10
System's experience
Annuitant mortality rates are based on April 1, 2005 -March 31, 2010 System's
experience with adjustments for mortality improvements based on MP-2014.
The Town's long term rate ofreturn 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
-32 -
return by each of the target asset allocation percentages and by adding expected
inflation. Best estimate of the arithmetic real rates of return for each major asset
class included in the target asset allocation is 6.98% at the valuation date of
March 31, 2015.
Discount rate
The Discount rate used to calculate the total pension liability was 7.5%. The
projection of cash flows used to determine the discount rate assumes that the
contributions from plan members will be made at the current contributions rates
and that contributions from employers will be made at statutorily required rates,
actuarially determined. Based upon 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.
Sensitivity of the Proportionate Share of the Net Pension Liability to the
Discount Rate Assumption
The following tables present the Town's proportionate share of the net pension
liability/ (asset) calculated using the discount rate of 7.5%, 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 one percentage point lower (6.5%) or one
percentage point higher (8.5%) that the current rate:
Town's
proportionate share of the
1% Decrease
(6.5%)
Current
Assumption
(7.5%)
1 % Increase
(8.5%)
net pension (asset)/liability $ 2,580,340 $ 387,122 $ ( 1,464,497)
Pension Plan Fiduciary Net Position
Employers' total pension liability
Fiduciary net position
Employers' net pension liability
Ratio of Plan net position to the
employers' total pension asset/(liability)
B. Short-Term Debt
(164,591,504,000)
161,213,259,000
$ ( 3,378,245,000)
97.9%
Liabilities for bond anticipation notes (BANs) are generally accounted for in the
Capital Projects Fund. The notes or renewal thereof may not extend more than
five years beyond the original date of issue unless a portion is redeemed within
five years and within each 12 month period thereafter. For short-term financing
the Town of Ithaca redeems (pays down) one-fifth (1/5) of the original BAN
borrowing.
State law requires that BANs issued for capital purposes be converted to long-
term obligations within five years after the original issue date. However, BANs
issued for assessable improvement projects may be renewed for periods
-33 -
equivalent to the maximum life of the permanent financing, provided that
stipulated annual reductions of principal are made.
As of December 31, 2015, temporary financing in outstanding bond anticipation
notes totaled $0.
C. Long-Term Debt
Bonds: The Town oflthaca 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.
At December 31, 2015, the total principal indebtedness outstanding of the Town
of Ithaca aggregated $15,817,750. Of this amount, $3,921,683 was subject to the
Town's constitutional debt limit and represented 4.48% of the Town's debt limit.
Further calculations disclosed that the Town of Ithaca meets the 7% indebtedness
requirement and has not exhausted its borrowing and repayment abilities.
The following is a summary of the Town of Ithaca's outstanding serial bonds for
the year ended December 31, 2015:
Original
Date Original
Description of Issue Amount
GENERAL TOWNWIDE FUND
2003 Public Improvement 12/29/03 $ 1,000,000
2011 Public Improvement 9/1111 300,000
2013 Public Improvement 8/1/13 790,000
WATER FUND
2004 Public Improvement 2/12/04 1,000,000
2009 Public Improvement 10/1/09 1,125,000
2011 Public Improvement 9/1/11 2,000,000
2013 Public Improvement 8/1/13 1,420,000
2014 Public Improvement 12/30/14 950,000
2014 Refunding Bond 12/30/14 910,000
2015 Public Improvement 11/13/15 2,150,000
SCLIWC serial bonds vanous 3,763,000
HIGHWAY FUND
2011 Public Improvement 9/1/11 350,000
2013 Public Improvement 8/1/13 1,240,000
2014 Public Improvement 12/30/14 950,000
2015 Public Improvement 11/13/15 800,000
Total Serial Bonds Payable
Interest on long-term debt paid during the year was:
Interest paid
Add interest accrued -current year
Less interest accrued -prior year
-34 -
Interest Maturity Outstanding
Rate Date 12/31/2015
3.95% 12/29/17 $ 143,000
2.25% 9/1/21 180,000
2.00% 8/1/23 662,000
3.88% 2/12/19 268,000
2.75% 10/1/24 730,000
2.25% 9/1/31 1,720,000
2.00% 8/1/23 1,252,000
2.00% 12/15/29 1,935,000
2.00% 5/15/24 900,000
2.00% 10/15/30 2,150,000
various vanous 2,901,750
2.25% 9/1/21 210,000
2.00% 8/1/23 1,076,000
2.00% 12/15/29 890,000
2.00% 10/15/30 800,000
$ 15,817,750
$ 314,606
77,818
( 76,106)
$ 316,318
Interest expense has been allocated to the following government functions:
General
Transportation
Home and Community Services
$ 10,581
84,962
220,775
$ 316,318
Long-term liability balances and activity for the year are summarized below:
Beginning
Governmental Funds Balance Issued Redeemed
Serial bonds $ 3,404,400 $ 800,000 $ ( 282,717)
Total serial bonds and $ 3,404,400 $ 800,000 $ ( 282,717)
Other liabilities:
Compensated absences $ 141,864 $ $ ( 8,665)
Net pension liability 356,827
Convertible sick/personal time (1) 221,377 43,872
Other post-employment benefits 3,313,546 631,677
Total long-term liabilities $ 7,081,187 $ 1,832,376 $ ( 291,382)
Ending
Balance
$ 3,921,683
$ 3,921,683
$ 133,199
356,827
265,249
3,945,223
$ 8,622,181
(1) Value of accumulated sick/personal time that may be used by retirees to offset retiree portion
of health insurance premiums. See Note 9.
Beginning Ending
Enterprise Funds Balance Issued Redeemed Balance
Serial bonds $ 8,384,600 $ 2,150,000 $ ( 1,540,283) $ 8,994,317
SCLIWC serial bonds 3,068,700 ( 166,950) 2,901,750
Total serial bonds and
bond anticipation notes $ 11,453,300 $ 2,150,000 $ ( 1,707,233) $ 11,896,067
Other liabilities:
Compensated absences $ 11,747 $ 1,163 $ $ 12,910
Net pension liability 30,295 30,295
Convertible sick/personal time (1)
Other post-employment benefits 274,367 108,018 382,385
Total long-term liabilities $ 11,739,414 $ 2,289,476 $ ( 1,707,233) $ 12,321,657
(1) Value of accumulated sick/personal time that may be used by retirees to offset retiree portion
of health insurance premiums. See Note 9.
Activity for compensated absences is shown at net due to the impracticability of
determining these amounts separately. Payments of compensated absences are
dependent upon future factors and, therefore, the timing of such payments cannot be
determined. Compensated absences are reflected as a long-term liability in the
Statement of Net Position.
The following is a summary of the maturity of total long-term indebtedness
(excluding SCLIWC bonds):
-35 -
Serial Bonds Year Principal Interest Total
2016 $ 1,058,000 $ 333,833 $ 1,391,833
2017 1,089,000 314,012 1,403,012
2018 1,047,000 288,643 1,335,643
2019 1,082,000 260,569 1,342,569
2020 1,020,000 236,619 1,256,619
2021-2025 4,520,000 793,709 5,313,709
2026-2030 2,960,000 261,481 3,221,481
2031 140,000 4,900 144,900
Total Serial Bonds $ 12,916,000 $ 2,493,766 $ 15,409,766
There is no long-term debt that has been authorized, and remains unissued at December 31, 2015.
NOTE 7 -DEBT: SOUTHERN CAYUGA LAKE INTERMUNICIPAL WATER
COMMISSION (SCLIWC)
Per agreement, the Town of Ithaca is a joint obligor of debt used to fund the capital activities of
the Southern Cayuga Lake Intermunicipal Water Commission (SCLIWC). The Town has
recorded a liability for bonds payable in the Water Fund of $2,901,750 representing the Town's
approximate 53% share of the total outstanding serial bond debt associated with SCLIWC as of
December 31, 2015. Historically, and consistent with the cooperative agreement of the SCLIWC
participating municipalities, the repayment of SCLIWC debt and related interest has been funded
through user fees charged by the Water Commission. Accordingly, the Water Fund reflects a
receivable (due from other governments) of $2,901,750 at December 31, 2015 which reflects the
anticipated debt principal payments to be made by SCLIWC.
The following reflects information related to the total serial bond debt for SCLIWC at December
31, 2015:
Date Original Date of Outstandings
Description of Issue Amount VR Final Maturity 12/31/2015
Joint Water
Improvement 1 11/23/2004 $ 1,000,000 4.75% 11/23/2024 $ 545,000
Joint Water
Improvement 2 5/18/2005 1,000,000 4.84% 5/18/2025 600,000
Joint Water
Improvement 3 5/17/2006 1,000,000 4.66% 5/17/2026 645,000
Joint Water
Improvement 4 10/5/2012 2,600,000 2%-3% 10/5/2032 2,280,000
Joint Water
Improvement 5 6/12/2013 1,500,000 3%-3.25% 6/12/2033 1,405,000
Total Serial Bonds $ 5,475,000
The following is a summary of the maturity of total long-term indebtedness for
SCLIWC debt:
-36 -
Serial Bonds
Total Serial Bonds
Year
2016
2017
2018
2019
2020
2021-2033
NOTE 8 -UNRESTRICTED BALANCES
Principal
$ 330,000
345,000
345,000
350,000
365,000
3,740,000
$ 5,475,000
Interest
$ 182,066
170,545
158,457
146,295
134,057
690,787
$ 1,482,207
Total
$ 512,066
515,545
503,457
496,295
499,057
4,430,787
$ 6,957,207
Of the $8, 165, 799 in unrestricted net position, $1,268,215 has been appropriated by
the Town for 2016 expenditures.
NOTE 9 -POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Plan Description -The Town of Ithaca administers a single-employer defined benefit
healthcare plan ("the Retiree Health Plan"). The plan provides lifetime healthcare
insurance for eligible retirees and their spouses through the Town's group health
insurance plan, which covers both active and retired members. The Town pays a
portion of retiree's premiums for healthcare insurance based on the number of years
of service to the Town at the time ofretirement.
The Retiree Health Plan does not issue a publicly available financial report.
Funding Policy -The Town contributes a portion of the retiree's healthcare premium
according to the following schedule:
Years of Town
Service Contribution
30 and over 75.0%
25-29 50.0%
15-24 35.0%
5-14 20.0%
less than 5 0.0%
For fiscal year 2015, the Town contributed $39,057 to the plan.
Annual OPEB Cost and Net OPEB Obligation -The Town's annual other
postemployment benefit (OPEB) cost (expense) is calculated based on the annual
required contribution of the employer (ARC). The Town has elected to calculate the
ARC and related information using the alternative measurement method permitted by
GASB Statement 45 for employers in plans with fewer than one hundred total plan
members. The ARC represents a level of funding that, if paid on an ongoing basis, is
projected to cover normal costs each year and to amortize any unfunded actuarial
liabilities (or funding excess) over a period not to exceed thirty years. The following
table shows the components of the Town's annual OPEB cost for the year, the
amount actually contributed to the plan, and changes in the Town's net OPEB
obligation to the Retiree Health Plan.
-37 -
Annual required contribution
Interest on net OPEB obligation
Adjustment to annual required contribution
Annual OPEB expense
Contributions made
Increase in net OPEB obligation
Net OPEB obligation-beginning of year
Net OPEB obligation-end of year
$ 818,721
98,668
( 138,637)
778,752
( 39,057)
739,695
3,587,913
$ 4,327,608
The Town's annual OPEB cost, the percentage of annual OPEB cost contributed to
the plan, and the net OPEB obligation for fiscal year, 2013, 2014 and 2015 is as
follows:
Percentage of Net
Year Annual Annual OPEB OPEB
Ended OPEB Cost Cost Contributed Obligation
12/31/2013 $ 700,217 7.45% $ 2,875,456
12/31/2014 $ 759, 159 6.15% $ 3,587,913
12/31/2015 $ 778,752 5.02% $ 4,327,608
Funded Status and Funding Progress -As of December 31, 2015 (actuarial valuation
date of 12/31/14), the actuarial accrued liability for benefits was $7,565,004, all of
which was unfunded. The covered payroll (annual payroll of active employees
covered by the plan) was $2,941,028 and the ratio of the unfunded actuarial accrued
liability to the covered payroll was 257.22%. See the Schedule of Funding Progress
on page 41 for additional details.
The projection of future benefit payments for an ongoing plan involves estimates of
the value of reported amounts and assumptions about the probability of occurrence of
events far into the future. Examples include assumptions about future employment,
mortality, and the healthcare cost trend. Amounts determined regarding the funded
status of the plan and the annual required contributions of the employer are subject to
continual revision as actual results are compared with past expectations and new
estimates are made about the future. The schedule of funding progress, presented as
required supplementary information following the notes to the financial statements,
presents multi-year trend information about whether the actuarial value of plan assets
is increasing or decreasing over time relative to the actuarial accrued liabilities for
benefits.
Methods and Assumptions -Projections of benefits for financial reporting purposes
are based on the substantive plan (the plan as understood by the employer and plan
members) and include the types of benefits provided at the time of each valuation and
the historical pattern of sharing of benefit costs between the employer and plan
members to that point. The methods and assumptions used include techniques that are
designed to reduce the effects of short-term volatility in actuarial accrued liabilities
and the actuarial value of assets, consistent with the long-term perspective of the
calculations.
The following simplifying assumptions were made:
-38 -
Retirement age for active employees-Based on the historical average retirement age
for the covered group, active plan members were assumed to retire at age 62, or at the
first subsequent year in which the member would qualify for benefits.
Marital status-Marital status of members at the calculation date was assumed to
continue throughout retirement.
Mortality-Life expectancies were based on mortality tables from the National Center
for Health Statistics . The 2009 United States Life Tables for Males and for Females
were used.
Turnover-Non-group-specific age-based turnover data from GASB Statement 45
were used as the basis for assigning active members a probability of remaining
employed until the assumed retirement age and for developing an expected future
working lifetime assumption for purposes of allocating to periods the present value of
total benefits to be paid.
Healthcare cost trend rate-The expected rate of increase in healthcare insurance
premiums was based on current premium rates and projections of the Office of the
Actuary at the Centers for Medicare & Medicaid Services. A rate of 7.8 percent was
used initially, reduced to an ultimate rate of 7 .0 percent after six years.
Health insurance premiums-2014 health insurance premiums for retirees were used
as the basis for caiculation of the present value of total benefits to be paid.
Inflation rate-The expected long-term inflation assumption of 2.8_]Jercent was based
on projected changes in the Consumer Price Index for Urban Wage Earners and
Clerica1 Workers (CPI-W) in The 2014 Annual Report of the Board o; Trustees of the
Federal Old-age and survivors insurance and disability insurance trust funds for an
intermediate growth scenario.
Payroll growth rate-The expected long-term payroll growth rate was assumed to
equal 2 .0%.
Based on the historical and expected returns of the Town's short-term investment
portfolio, a discount rate of 2. 7 5 percent was used. In addition, a simplified version of
the entry age actuarial cost method was used. The unfunded actuarial accrued liability
is being amortized as a level percentage of projected payroll on an open basis. The
remaining amortization period at December 31, 2015, was twenty five years.
In addition to the plan described above, retiring employees can convert a portion of
unused sick and vacation time to offset portions of healthcare premiums that are the
retiree's responsibility. The Town tracks the accumulated balances and makes
premium payments on behalf of the retirees until the balances are exhausted. The
Town estimates its liability based on an analysis of accumulated sick and vacation
time for current retirees and employees who have reached retirement age (55). At
December 31, 2015 there were four retirees spending down a cumulative balance of
$44,590 and fifteen employees who had reached retirement age with a cumulative
balance of $220,659. The total liability was $265,249 at December 31, 2015. The
Town calculates this liability separately from its OPEB liability under GASB 45.
NOTE 10 -POLLUTION REMEDIATION CONTINGENT OBLIGATION
In 2009, a site commonly known as the Ithaca Area Wastewater Treatment Plant
(IA WTP), which is jointly owned and operated by the City of Ithaca and the Towns
of Ithaca and Dryden, was listed as a site under CERCLA for hydrocarbon
contamination (coal-tar). The City of Ithaca was sued by First Energy (parent
company of New York State Electric & Gas) for $750,000 in remediation costs. The
Town of Ithaca and Dryden voluntarily joined in defense of this lawsuit. In 2010 an
out-of-court settlement was reached in the amount of $284,249, of which the Town of
-39 -
Ithaca is liable for $80,000, payable over a ten year period. At December 31, 2015,
the remaining liability totaled $40,000.
NOTE 11 -RESTATEMENT OF NET POSITION
For the fiscal year ended December 31, 2015, the Town implemented GASB
Statement No. 68 Accounting and Financial Reporting for Pensions -Amendment to
GASB Statement No. 27 and GASB Statement No. 71, Pension Transition for
Contributions Made Subsequent to the Measurement Date. The implementation of
Statements No. 68 and No. 71 resulted in the reporting of a deferred outflow of
resources and a liability related to the Town's participation in the New York State
Employees' (ERS) retirement system. The Town's net position has been restated as
follows:
Net position beginning of year, as previously stated
GASB Statement No. 68 and No. 71 implementation:
Beginning net pension liability
Beginning deferred outflow of resources for
contributions subsequent to the measurement date:
Net position beginning of year, as restated
NOTE 12 -SUBSEQUENT EVENTS
$ 20,177,143
( 517,829)
427,884
$ 20,087,198
Subsequent events were evaluated through September 23, 2016, which is the date the
financial statements were available to be issued.
On May 13, 2016, the Town purchased 61.78 acres of land on West Hill in the
vicinity or Coy Glen Creek from the Estate of Marcia Brown Meigs for a total of
$161,871. This land will be held as undeveloped forest preserve. The land was
valued at $159,900. $160,110 of the purchase price came from the General Fund
Park and Open Space Reserve Account.
-40 -
Actuarial
Value
Actuarial of
Valuation Assets
Date (a)
12/31/2014 $
TOWN OF ITHACA
SCHEDULE OF FUNDING PROGRESS
FOR THE RETIREE HEALTH PLAN
December 31, 2015
Actuarial
Accrued
Liability
(AAL) Unfunded
Simplified AAL Funded
Entry Age (UAAL) Ratio
(b) (b-a) (alb)
$ 7,565,004 $ 7,565,004 0.00%
See independent auditor's report.
-41 -
Covered
Payroll
(c)
$ 2,941,028
UAAL as a
Percentage
of Covered
Payroll
((b-a)/c)
257.22%
TOWN OF ITHACA
SCHEDULE OF REVENUES AND EXPENDITURES
COMPARED TO BUDGET
MAJOR FUNDS
For the Year Ended December 31, 2015
GENERAL HIGHWAY
Original Original
Budget Actual Budget Actual
REVENUES:
Real property taxes $ 2,600,000 $ 2,600,000 $ 1,000,000 $ 1,000,001
Real property tax items 54,500 60,179
Nonproperty tax items 1,475,000 1,542,541 1,480,000 1,594,710
Departmental income 201,900 180,665
Intergovernmental charges 81,595 71,996 10,000 24,120
Interest income 6,000 6,611 2,500 1,929
Rental income 26,850 28,790
Licenses and permits 13,500 21,699
Fines and forfeitures 280,000 264,210
Sale of property and compensation for loss 8,348 25,000 151,950
Local sources 118,000 65,808 5,026
State and federal sources 568,350 620,017 74,000 107,181
TOT AL REVENUES 5,425,695 5,470,864 2,591,500 2,884,917
OTHER SOURCES:
Interfund transfers 583,600 583,600
Proceeds of obligations 800,000
Appropriated fund balance 797,568 384,711
TOTAL REVENUES AND OTHER SOURCES 6,806,863 6,054,464 3,776,211 2,884,917
EXPENDITURES:
General governmental support 2,077,800 1,562,732 61,120 61,531
Public safety 74,484 74,987
Transportation 527,520 429,530 2,897,120 1,902,700
Culture and recreation 1,082,064 916,374
Horne and community services 1,548,675 1,201,823
Employee benefits 1,265,100 1,199,379 482,500 460,231
TOT AL EXPENDITURES 6,575,643 5,384,825 3,440,740 2,424,462
OTHER USES:
Interfund transfers 231,220 235,995 335,471 344,903
TOTAL EXPENDITURES AND OTHER USES 6,806,863 5,620,820 3,776,211 2,769,365
EXCESS OF REVENUES
OVER EXPENDITURES 433,644 115,552
FUND BALANCE, beginning of year 4,092,711 4,092,711 1,709,667 1,709,667
FUND BALANCE, end of year $ 3,295,143 $ 4,526,355 $ 1,324,956 $ 1,825,219
See independent auditor's report.
FIRE
Original
Budget
$ 3,580,000
5,000
20,000
3,605,000
( 200,000)
3,405,000
5,000
3,400,000
3,405,000
3,405,000
1,038 ,140
$ 1,238,140
Actual
$ 3,579,999
3,701
25 ,364
3,609,064
3,609,064
1,648
3,372 ,965
3,374,613
3,374,613
234,451
1,038,140
$ 1,272 ,591
-42 -
TOWN OF ITHACA
SCHEDULE OF THE TOWN'S PROPORTIONATE SHARE OF THE NET PENSION
LIABILITY
For the Year Ended December 31, 2015
Proportion of the net pension liability (asset)
Proportionate share of the net pension liability (asset)
Covered-employee payroll
Proportionate share of the net pension liability (asset)
as a percentage of its covered-employee payroll
Plan fiduciary net position as a percentage of the total pension liability (asset)
See independent auditor's report.
-43 -
$
$
2015
0.015%
387,122
3,310,664
11 .69%
97.9%
TOWN OF ITHACA
SCHEDULE OF THE TOWN'S PENSION CONTRIBUTIONS
For the Year Ended December 31, 2015
Contractually required contribution
Contributions in relation to the contractually required contribution
Contribution deficiency (excess)
Covered-employee payroll
Contributions as a percentage of covered-employee payroll
See independent auditor's report.
-44 -
$
$
$
2015
548,770
548,770
3,381,971
16.23%
TOWN OF ITHACA
CAPITAL PROJECTS FUND
DETAILED BALANCE SHEET
December 31, 2015
ASSETS
Active Projects
Sand Bank Winner
Hanshaw Road Pine Tree Rd. Gateway Road Circle
Walkway Ped Bridge Trail Reconstruction Reconstruction
ASSETS:
Cash in savings $ 100,602 $ 69,904 $ 70,214 $ 359,906 $ 40,762
Due from other funds 3,597
100,602 69,904 73,811 359,906 40,762
TOTAL ASSETS $ 100,602 $ 69,904 $ 73,811 $ 359,906 $ 40,762
LIABILITIES AND FUND BALANCE
LIABILITIES:
Accrued liabilities $ $ $ $ $
Due to other funds
Retainage
TOTAL LIABILITIES
FUND BALANCE:
Committed fund balance 100,602 69,904 73,811 359,906 40,762
Unassigned fund balance
TOTAL FUND BALANCE 100,602 69,904 73,811 359,906 40,762
TOT AL LIABILITIES
AND FUND EQUITY $ 100,602 $ 69,904 $ 73,811 $ 359,906 $ 40,762
See independent auditor's report.
Active Projects Closed Projects
Christopher Coddington Sapsucker Honness Marcy Forest Home Whitetail
Circle Road Water Land Court Drive Upstream Drive
Water Tank Water Main Tank Improvement Improvement Bridge Reconstruction
$ 68,309 $ 117,699 $ 239,783 $ 58,540 $
68,309 117,699 239,783 58,540
$ 68,309 $ 117,699 $ 239,783 $ 58,540 $
$ $ $ 16,451 $ $
23,177
6,601 64,796
6,601 81,247 23,177
68,309 111,098 158,536 35,363
68,309 111,098 158,536 35,363
$ 68,309 $ 117,699 $ 239,783 $ 58,540 $
-45 -
4,535 $
4,535
4,535 $
15,562
15,562
( 11,049)
22
( 11,027)
=====
$
-----
4,535 $
=====
$
$
$
$
Total
$ 1,130,254
3,597
1,133,851
$ 1,133,851
$ 16,451
38,739
71,397
126,587
1,007,242
22
1,007,264
$ 1,133,851
TOWN OF ITHACA
CAPITAL PROJECTS FUND
DETAILED REVENUES AND EXPENDITURES
For the Year Ended December 31, 2015
Active Projects
Sand Bank Winner
Hanshaw Road Pine Tree Rd. Gateway Road Circle
Walkway Ped Bridge Trail Reconstruction Reconstruction
REVENUE:
Interest earnings $ 76 $ 33 $ 52 $ 275 $ 31
Interfund transfers 34,775
State and federal grants 30,874
Bond proceeds
TOTAL REVENUE $ 76 $ 34,808 $ 30,926 $ 275 $ 31
EXPENDITURES:
Bond issuance costs $ $ $ $ $
Design 21,459
General construction contract
Contract administration
Testing
TOTAL EXPENDITURES $ $ $ 21,459 $ $
See independent auditor's report.
Active Projects Closed Projects
Christopher Coddington Sapsucker Honness Marcy Total for
Circle Road Water Land Court all Closed
Water Tank Water Main Tank Improvement Improvement Projects Total
$ 72 $ 94 $ 52 $ 74 $ 5 $ 27 $ 791
95,484 9,272 139,531
30,874
506,643 304,014 810,657
$ 72 $ 94 $ 95,536 $ 506,717 $ 304,019 $ 9,299 $ 981,853
$ $ $ $ 5,379 $ 3,228 $ $ 8,607
21,459
464,213 311,239 102,500 877,952
47 253 300
1,762 325 2,087
$ $ $ $ 471,401 $ 315,045 $ 102,500 $ 910,405
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TOWN OF ITHACA
INDEPENDENT AUDITOR'S REPORT ON
INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
YEAR ENDED DECEMBER 31, 2015
SCIARABBA
WALKERtt~
CERTIFIED PUBLIC A C COUNTANTS
BUSINES S CONSULTANTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Supervisor and Town Board
Town oflthaca
Ithaca, New York 14850
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 the
governmental activities, the business-type activities, each major fund, and the aggregate remaining
fund information of the Town oflthaca, as of and for the year ended December 31, 2015, and the
related notes to the financial statements, which collectively comprise the Town's basic financial
statements, and have issued our report thereon dated September 23, 2016.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Town of
Ithaca's internal control over financial reporting to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the Town of
Ithaca's internal control. Accordingly, we do not express an opinion on the effectiveness of the
Town oflthaca'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 Organization'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.
410 East Upland Road
Ithaca, New York 14850
607 -272 -5550 I 607-273 -6357 (Fax)
839 State Route 13
Cortland, New York 13045
www.swcllp .com
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town of Ithaca's financial statements
are free of material misstatement, we performed tests of its compliance with certain provisions of
laws , regulations, contracts, and grant agreements , noncompliance with which could have a direct
and material effect on the determination of financial statement amounts. However, providing an
opinion on compliance with those provisions was not an objective of our audit, and accordingly, we
do not express such an opinion. The results of our tests disclosed no instances of noncompliance or
other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effecti veness of
the entity'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 Organization's
internal control and compliance . Accordingly, this communication is not suitable for any other
purpose .
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Sciarabba Walker & Co ., LLP
Ithaca, New York
September 23, 2016
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