HomeMy WebLinkAbout2016 Town of Ithaca Audit Report FINANCIAL STATEMENTS S ®F
TOWN OF ITHACA
ITHACA,NEW YORK
FOR THE YEAR ENDED DECEMBER 31, 2016
TOWN OF IT GACA
INDEX
December 31, 2016
Tab
Independent Auditor's Report--- ------------------------------ -------------- ------------------ .............-_I
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 Goverm-nent Auditing
Standards.----------------------- --------------------------- --------------------------------- - ---
TOWN OF IT ACA
TABLE OF CONTENTS
December 31, 2016
Page
IndependentAuditor's Report............................. ........................................... ......... ..................... -
Management's Discussion and Analysis ............ ...... ......................... ........ .......................I-XVIII
Statementof Net Position .................................... ....................................................................... ...I
Statementof 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—
ProprietaryFunds............ ..................... ..........--............................... ........... ................... ....10
Statement of Cash Flows—Proprietary Funds—..... ............................. ........................... ...........I I
Statement of Fiduciary Net Position—Agency Funds..................... ......... ...................................12
Notes to Financial Statements....... .............. .............. ..................--... .................. .........— 13-43
Schedule of Funding Progress for the Retiree Health Plan.........................................................44
Schedule of Revenues and Expenditures Compared to Budget—
MajorFunds................ ............................................................................................................45
Schedule of the Town's Proportionate Share of the Net Pension Liability...................................46
Schedule of the Town's Pension Contributions..... ...................... .................. ...................... ......47
Capital Projects Fund— Detailed Balance Sheet ........... .....--... ........................ .................48
Capital Projects Fund—Detailed Revenues and Expenditures................... ................................49
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........................................................................................ 50-52
SCLARABBA,
WALKER8tc.-To
...................._'_`.............___
R
CETIFIED PUBLIC ACCO UNTANTS INDEPENDENT AUDITOR'S REPORT
r.3 USINESS CONSULTANTS
Supervisor and Town Board
Town of Ithaca
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 of Ithaca, NY, as of and for the year ended December 31, 2016, 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 Responsibilityfor 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) wVi/W.8WC11P.Corn
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, 2016, 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.
Correction of Error
As discussed in Note I I to the financial statements, certain errors resulting in understatement of
amounts previously reported for sewer rents, as of December 31, 2015 were discovered during
the current year. Accordingly, the beginning net assets were restated as of December 31, 2015 to
correct the error. Our opinion is not modified with respect to that matter.
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-XVIII), the Schedule of Funding Progress for
the Retiree Health Plan (page 44), the Schedule of Revenues and Expenditures Compared to
Budget - Major Funds (page 45), the Schedule of the Town's Proportionate Share of the Net
Pension Liability(page 46), and the Schedule of the Town's Pension Contributions (page 47), be
presented to supplement the basic financial statements. Such information, although not a part of
the basic financial staternents, 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 48 through 49 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
November 7, 2017 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.
Sciarabba Walker& Co., LLP
Ithaca, New York
November 7, 2017
The following is a discussion and analysis of the Town of Ithaca's financial performance for the
year ended December 31, 2016, 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 ftom 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 year 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 in the Statement of Net Position, increased by
$1,439,548 (6.52%).
• Revenue, as reflected in the Statement of Activities, increased $488,807 (2.59%).
• Expenditures increased by $969,947 (5.73%).
• The General Townwide Fund (the primary operating fund) fund balance increased by
$141,888 (4.06%) for the year ended December 31, 2016.
Town Highlights:
Year-end fund balance increased in general and fire funds and decreased in highway and
capital projects funds for major Town funds in Fiscal Year 2016.
GENERAL FUND - Fund equity increased by $142,401, with revenues and other sources of
$5,915,222 exceeding expenditures and other uses of$5,772,821. Sales tax and mortgage tax
collections decreased while state aid per capita increased compared to 2015. Ending fund
balance totaled $4,668,756, which includes reserves of $726,866 for the Parks and Open
Space Plan Reserve, $229,285 for the General Benefit Reserve, $40,097 in the Preserve
Maintenance Reserve and $10,018 in the Land Stewardship Reserve. (Townwide + Part-
Town+ Risk)
HIGHWAY FUND - With expenditures and other uses of$3,381,821 exceeding revenues and
other sources of $3,356,080, fund equity decreased by $25,741. Ending fund balance of
$1,799,478 includes reserves of $62,517 for the Highway Equipment Reserve and $88,480
for the General Benefit Reserve.
WATER FUND - For Fiscal Year 2016, the net position of the Water Fund increased by
$2,068,627. Operating and non-operating revenues totaling $5,565,333 exceeded operating
I
and non-operating expenditures of$3,496,706. Year-end net position of$6,686,609 includes
$17,863 for the General Benefit Reserve.
SEWER FUND - Net position of the Sewer Fund increased by $442,926 in Fiscal Year 2016.
Operating and non-operating revenues of$2,689,598 exceeded operating and non-operating
expenditures of$2,246,672. Net position at year-end of$5,414,145 includes $14,642 for the
General Benefit Reserve.
FIRE PROTECTION FUND - With revenues of $3,580,837 exceeding expenditures of
$3,195,715, fund equity increased by $385,122 to total $1,657,713 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, 2016, all major funds exceeded this
25% goal.
• Collections of sales tax and mortgage tax decreased in Fiscal Year 2016.
SALES TAX - Collections decreased to $3,003,943 in 2016 from the previous year's total of'
$3,067,337, a decrease of$63,394 or 2.07%. This is the second consecutive 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 2016 totaled $286,227, a decrease of$144,433 or 33.54%
over the previous year's total of $430,660. The 2015 total includes a one-time receipt of
$169,770 from the expansion of Kendall at Ithaca development.
• Year-end balances for the Town's reserve accounts either increased or decreased 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. During 2016, the Town
purchased land for $160,000 and transferred $75,000 from their savings account back to the
open space account resulting in a decreased fund balance for the year of approximately
$85,000. The balance at year-end was $726,866.
HIGHWAY EQuipmEN'r RESERVE - The Highway Fund includes reserve funds established for
the purchase/replacement of highway equipment and machinery. $187,471 was taken from
this reserve in 2016 to purchase an excavator for approximately $239,000. The balance at
year-end was $62,517.
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 $350,270,
11
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
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 $40,097.
LAND STEWARDS1.11P 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, 2016, the balance of this
reserve totaled $10,018.
• 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.
CONSTITUTIONAi. DEB,r LIMIT - The Town of Ithaca maintains a very low direct debt burden.
At year-end the Town had exhausted only 3.98% 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
III
presented as business-type activities in the government-wise financial statements. The
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 govermi'lental 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 govenii-nental 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-teen 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-teen, 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 ft-om 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 $1,439,548 or 6.52%.
Current assets increased by $559,637 or 3.06%.
Capital assets increased by $1,797,003 (net of 2016 depreciation expense of $1,359,148) or
7.12%.
Long-term serial bond debt decreased by $1,058,000 or 8.19%. The decrease reflects the 2016
principal payments as no new bond proceeds were issued during the year.
Unrestricted net position decreased by $1,425,715 or 17.30%.
The Town's current ratio (ratio of current assets to current liabilities) was 5.5:1 at December 31,
2016. The Town's quick ratio (cash and assets easily converted to cash compared to current
liabilities) was 3.6:1 at December 31, 2016.
Figures A-1 and A-2 present condensed information derived from. the Town's government-wide
statements.
FIGURE A-1
Condensed Statement,ofNet Position Ac 00e Afi
206 J-015
1 4- 2015
I I --,
Current assets, as restated $ 10,022,472 $ 9,604,301 $ 8,817,448 $ 8,675,982
Non-current assets 11,745,594 11,472,103 15,302,027 13,778,515
Total Assets zj,,,708;060:, 11�0
, 6404,1$- 24;11947�' 22,454,4917�$ ,,
$
Deferred pension outflow 1,962,790 598,701 181,357 50,831
Total Deferred Outflows of Resources $ 41,962,7
$ 598 i01 181,357 50L$31
Current liabilities $ 1,999,781 $ 858,715 $ 1,418,296 $ 1,194,094
Non-current liabilities 10,110,181 8,322,536 10,762,736 11,722,032
Total Liabilities " 12109 fi2 :9
11181,032,"$ 12,916
$
Deferred pension inflow 199,043 19,046
Total Deferred'Inflows of Resources 43 1$
,,9'046 $
Invested in capital assets,net of debt $ 8,165,712 $ 7,550,420 $ 7,023,909 $ 4,784,198
Restricted 1,192,685 1,485,224 32,505 22,245
Unrestricted net position, as restated 2,063,454 3,458,210 5,044,34,0 4,782,759
Total flet 1081tion 11,421,-8151 1$ 12,'493,S54 1$ 12,1001J54]$ 9,58.9,202
VI
FIGURE A-2
ri .,, r �, + /i iii /%/i✓/// / /% i„ / �/ /i / /i� / / / // ,/ r
/i;//% / r /„/, rill
ii/ r /r art ., // / % %/.// r, /!r/ i , I% <
REVENUES
Program revenues:
Charges for services $ 231,631 $ 215,896 $ 6,078,124 $ 5,967,175
Operating grants and contributions 429,205 330,213 - -
Capital grants and contributions 126,969 158,631 - -
General revenues:
Property taxes 7,729,873 7,253,378 1,013,902 974,239
Non property taxes 3,072,508 3,137,251 - -
Unrestricted state aid 289,486 440,046 - -
Interest earnings 15,058 14,303 5,264 4,732
Other general revenues 333,505 340,699 464 619
aha
PROGRAM EXPENSES
General government support $ 2,557,347 $ 2,292,583 $ - $ -
Public safety 3,298,060 3,458,331 -
Transportation 3,460,526 3,178,772 -
Culture and recreation 1,056,923 1,042,553 - -
Home and community services 1,946,407 1,718,076 -
Water and sewer - - 5,567,178 5,226,179
A1 690 , 567, 73 's 7
Transfers ( 980,976) ( 629,936) 980,976 629,936
7 ,r/��
Figure A-3 shows the sources of revenue for 2016.
FIS A-3
Sources of Revenue for 2016
State and
federal Interest, Fines and
sources, 0.11% fees, 1.42%
4.3$%- 1%
a
Charges for
senAces,
32.65% +
Sales and
property
taxes,
61.14%
VII
Figure A-4 represents the Town's 2016 expenditures by program.
FIGURE A-4
Expenditures by Program
Intereston
long-term debt,
Depreciation, General
support,
rt,
su 'or
�*0'011.62%P
5.2
Home and Public safety,
community, 18A4%
services,
39.78%
Culture and Transportation,
recreation, 15.56%
5.51%
Total costs of services provided by the Town (Figure A-5) were $17,886,441. These charges
were offset by grants and contributions of $556,174 and charges for services of $6,309,755,
resulting in net cost of services of$11,020,512.
FIGURE A-5
rvics
An
gm
""y "V�
P 'dj�j
General government support $ 2,557,347 $ - 2,557,347
Public safety 3,298,060 - 3,298,060
Transportation 3,460,526 - 3,460,526
Culture and recreation 1,056,923 - 1,056,923
Home and community services 1,946,407 - 1,946,407
Water and sewer - 5,567,178 5,567,178
5,567,178
777-
total
AT
:�"P.'A
PrograM� o
General government support $ 2,224,753 $ 2,224,753
Public safety 3,297,910 3,297,910
Transportation 3,324,288 3,324,288
Culture and recreation 931,430 931,430
Home and community services 1,753,077 1,753,077
Water and sewer 510,946)1 510,946)
Total 11,5311458 1$ 4 0/) 11<020 512
Vill
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, 2016,. the Town reported a combined fund balance of$8,004,310, Total
fund balance decreased by $917,468 in 2016.
FIGURE A-6
Govi e'a^nme tal uhd zees
2a11bZQI C)i e
General Fund $ 4,668,756 $ 4,526,355 $ 142,401
Highway Fund 1,799,478 1,825,219 ( 25,741)
Fire Fund 1,657,713 1,272,591 385,122
Capital Projects Fund ( 561,811) 1,007,264 ( 1,569,075)
Other Funds 440,1.75 290,349 149,826
Total Fund Balance 9,004,311, $ '85,92 �� ,,467)
GENERAL, FUND BUDGETARY HIGHLIGHTS
Actual revenues were higher than budget estimates by $124,022 and actual expenditures were
less than budgeted expenditures by $31.8,547.
Figure A-7 surnmarizes the General Fund original budget, actual expenditures and the variances
for the year ended December 31, 2016.
FIGURE A-7
Condensed Budgetary Comparison- a�lanee
Cly Ural l a Ora e..
Crer e al Pund2DX6
Budget , Actual �Ft:ftfavorable)
REVENUES
Real.property taxes $ 2,648,000 $ 2,662,923 $ 14,923
Non-property taxes 1,420,000 1,419,319 ( 681)
State sources 524,750 507,361 ( 17,389)
All other 608,650 735,819 127,169
Total Revenues 8 5,201,400 5,325,422 $ 124,022
EXPENDITURES
General government support $ 1,769,531 $ 1,626,243 $ 143,288
Public safety 80,834 80,868 ( 34)
Transportation 41.3,090 395,434 17,656
Culture and recreation 1,028,790 1,011,717 1.7,073
Home and community services 1,305,970 1,102,559 203,411
Employee benefits 1,278,400 1,341,246 ( 62,846)
Total Expexiditures 5, 6'5 5,558',q 61,
Other financing sources $ 890,169 $ 589,800 $ ( 300,369)
Other financing uses 214,954 214,754 200
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 I K and IL in the current year's Notes to the Financial Statements,
In 2016, the Town expended $3,217,622 on capital additions. Figure A-8 reflects the changes in
net capital assets.
FIGURE A-8
Go*ernAcnitism
I
-A
7
0 2015,
20
Land 599,780 439,880
Construction in progress 68,696 1,895,909 466,363 3,499,576
Buildings 3,269,327 3,081,636 - -
Equipment and machinery 2,610,029 2,528,625 698,511 384,846
Furniture and furnishings 8,794 11,343 - -
Non-building improvements 665,136 239,411 - -
Infrastructures 4,523,832 3,275,299 14,137,153 9,894,093
Total $ 11,745,594 J$ JI,47ZJ03J$ 15,302,027-1$ 13,778,51
Major additions in 2016 included:
Infrastructure $ 1,560,400
Land 159,900
Construction in progress 473,068
Equipment acquisitions 963,450
Non-building improvements 60,804
Total 3.217. 22
DEBT ADMINISTRATION
Long-term debt decreased by $1,058,000.
The Town's liability for compensated absences increased $14,700 to $160,809 during 2016.
In 2008, the Town implemented the provisions of Governmental Accounting Standards Board
Statement No. 45, Accounting and Financial Reporting by Employers for Postemployinent
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
$5,071,622 as of December 31, 2016.
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 $453,097 at
December 31, 2016.
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, 2016.
Five-year average full valuation of taxable property $ 1,335,141,023
Debt limit- 7% thereof 93,459,872
Inclusions:
Serial bonds 14,296,000
Exclusions:
Water and sewer debt (1) 10,716,118)
Total net indebtedness 3,579,882
Net debt contracting margin 89,879,990
Percent of debt contracting power exhausted 3.98%
(1) Sewer and Water indebtedness are excluded pursuant to Section 136.00(4-a) and 136.00(2),
respectively, of the Local Finance Law.
Detailed information regarding the Town's long-term liabilities is presented in Note 6C in 2016
Notes to the Financial Statements. Figure A-9 reflects changes in the Town's debt for 2016.
FIGURE A-9
711111 1 1 7
`G
j",
Serial bonds 3,579,882 3,921,683 8,278,118 8,994,317
SCLIWC serial bonds - - 2,438,000 2,901,750
Compensated absences 144,706 133,199 16,103 12,910
Net pension liability 1,677,531 356,827 156,669 30,295
Other post-employment benefits 4,563,764 3,945,223 507,858 382,385
Liability for accrued sick time to
be applied to retiree's health
coverage 453,097 265,249 -
'T� 6/
5
nf,
7
Figure A-10 depicts historical changes in fund balances for the Town of Ithaca for the period
2010 through 2016. Information for the Capital Projects Fund is omitted.
X1
01CD <t rq — Iz CA M in
a' NS2 'n w 'o - c) N
n 0or- C�� d' Ci C�m el�
W, N - r4 Oi Cl vi N " C,
10 fn Nm
O clO .� vt .- C1
SE 16 W)
4A 6A v Gn 69 Gn v GO)
fn In kn
C-4 C>
CPI
(A Ge 6m fio9
m �o 10 10 O V e4
K
C, 00 w 00 w
b-0
Z�
(A Gn 69 6.9 V)
v " d- eq
00 kn
00 v
4 It . I I 1 4
Ol In
10 kn
C�
-t CD
cy4 6A 6A 69
00 cq �T Iz
QA Gn
10 �o
tnvt
-
-It
61) V) Gn 66
knkn kn M
C> r-� It -t, n n
1�1 0" ;� Cl C>= �t <4 0, �6
Q a3 C, Cl "r
1
,I: Jn v, rl000�
C'j V] cq
W9
C) o kn rn rn tri p CD tr, a, rn m
tl- CIA C,
10
In
fl.
'IT T e-4 C4 w
C', ll� �o Iz Cl Mi
ol r-o ei
00 c, 'o eq CD h V eq rq O 'IT
N vi N V el ob oo eq
0
X 0 to C�
V, 60) 69 66 Y5
CO M M N e4 clq C) C-1 en
E- C, In 01 tn
b0C� t-- N
cl\ tz cq Cw) r.
wIm
M c� In Co O
GI) (A 69 En Go�
11) N \0 a m
N =
V -
� c0
69 6A 6q 69 66
21,
r
a23 W au
Q
;4
r
'D C, m
C� eli 0 " a
10 00 e4
Eta kA 605
kri O a0
<= 10 �o
Cl
oc
Cl
to n I � I . I
c" b. Ooo m
GO3 ffi fim
O V7
trl "T M of
el 't
6A 49 fig 49 Gfr
lo C� 14�
- = r4
elt o O'
el
trl fq
G M
Go9 619 46 UD 66
Ir CT en M
lo IT h m m
O
Cl N Pi
= 2 *6 It It
cl
W s9 63 Ge 69 lfi 6R3
O It
It 'r -Ir
n c; n I o;cl Cl
O
cl;
-a c�jl M
9-
u ry Gn en 6 69
o
Qo 11
O cl
M N 45
M, N "t O� n Iwo,
'6 . = c' Ir,
;� " =
v� lclG tL
14 m
47
Cl oo to oo to Iz
O lll lo r4
to ol eq
rz 11' M lo, o — o1 1 6 1 4
RG
69 69 fi61 fr1 69 66 (o)
rr- V N M lo m N Otn
1z) m
o� 6m Ffl
M to C) Qo
lo, m
oo � oo 'o oo
•
O *I 41 cl O a,
O'
6m ffi
tt
t4
ur
e4
4343
a C4) CJ -a m v
rF " 6 u� Q
PI
vFA
�cJ -o v -o u.
en v
cr r
a r p o
C15 r
LLJ
C4 '(D W4 u
r
r
C) g' �D
I l
w
In lz:) �4 c—i
to vl ;I- 'o C:) 0, C>
It V-�,lz: to oC O� III C�O�O
10 Cl C:5 00 N 'o c, x
r = r 1 00 to tn
N
69 'A 60g
00 hC, 10
CA 6o, Gn
trl
bD
t5
69
00 C,4
GH Gof G'.
a tI — to
kn 4 r--7
cq C> � (4 It
46 6-1
-It 'IT
t4
69 69 6s
'T ltr lc�
10
'IT 00 06
�o ") en
ri.
fH 6s 690.
It O C>
Cl
16
41ol
Nr- Or-
Gv
In
C� CD
N
to r4 N
lO, It- C�
M
L� va
C> 0 0 Cl C> a,
IC
ELJ H% iA to
w n 2
11—
rl1
t
of
of
11 OC� 1=1
ol
V-) UOI Go� ry
I�z
a)
C)
10
m
dd v W C, Id N
, 00 E15,-6 U ,, UE � u e
—----------
O a, -,t z, N Q1 z
0.'a v-
O 10 t- fn
67 N
6R FJ3 6Fs N,
00 0i7 rn M C1 O Ch
V 66 66
kn kn
G 0h0 ol
c,6r r r r r r
ol It e4
C.,"'
� tl- t1l
raj C) Cl
'Ir
In to a 69 G6 60i
o >
N 14 IN
r-
ca ov �o r-
kn
N
Go)
co 00 40 rn hl Ch in vr'i C,
00ol 11:1
n !i! I q I I I I00
CD
A fA
00
In
Cl C) - It
C� 0 6 th co O WS -I z CD 61 6
ol Cl
fn 'T Ir en
(f1 EA PV4 Ya
Vi
Cl
in W ell
tt
bi
u
cr-
En
U. cCr
Cyr
� OV (D 0. 1 w u
r 1
11%,ri.d' lf>
o w
47 N
bH
ID
kA tn
Lr"� tri r
tn
Eit 66 4fi GO)
in rA O N
kr'
47, kA
cl IIt t " e4
N 10 'T
Cl)
6A N9 yq GP
10
4'3 FH 61 b9
kil m
eq C�
r- m ol
el ll� �
66
00
O
FI
-0
00 " =10 00
llc� C�
<D r4
00 10
C/5
..........-
C� Ol kt)
eqM ON w 10 e4
00
ol IT
oo W I-
c Iq
tn 'o c' C--
ol en
l
It z
cq It
V) 65 66
0
E <
00 V)
cr
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, 2011 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,
2015 and 2016.
• 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 28,000 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, 2015
and 2016, respectively, in Tompkins County was 6.1%, 6,1%, 5.2%, 4.4%, 4.4%, and 4.1%,
compared with 8.3%, 8.5%, 7.7%, 6.3%, 5.3%, and 4.9% for New York State, and 8.9%,
8.1%, 7.4%, 6.2%, 5.3%, and 4.9% for the national average.
• The Town of Ithaca anticipates continuing an aggressive Capital Improvement Program
(CIP). The Five-Year CIP for Fiscal Years 2017 - 2021 identifies various capital projects to
be constructed at a total estimated cost of$18,075,000. Of this total, $7,850,000 is for the
improvement of water infrastructure, $2,800,000 for sewer infrastructure, $750,000 for storm
water drainage improvements, $4,600,000 for road improvements, $1,600,000 for
improvements to Town facilities, and $475,000 for parks and trails development. Funding
will be provided with $7,327,000 from current year revenues or reserves, $98,000 from
grants and donations, and $10,650,000 from the issuance of new long-term bonded debt.
XVII
Sales tax collections increased each year since 2009, from $2,528,600 in 2009 to $3,135,084
in 2014, but have since decreased in 2015 and 2016 with $3,067,337 and $3,003,943,
respectively and in the process surpassing the pre-recession high of$2,733,139 collected in
2008. Mortgage tax collections, had returned to pre-recession levels. There were increases in
each of the three preceding years; however total collections of$286,227 in 2016 were less
than 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 'Tour's Supervisor, Town of Ithaca, 215 North Tioga Street, Ithaca, NY
14850.
Xvill
TOWN OF ITHACA
STATEMENT OF NET POSITION
December 31, 2016
ASSETS
Governmental Business-type
Activities Activities Total
CURRENT ASSETS:
Cash 8,174,285 3,983,397 12,157,682
Cash, restricted 1,157,263 32,505 1,189,768
Accounts receivable:
Water and sewer rents - 1,114,175 1,114,175
Due from other funds 88,933 1,224,634 1,313,567
Due from other governments 575,610 2,462,737 3,038,347
Other receivables 11,537 - 11,537
Prepaid expenses 14,844 - 14,844
TOTAL CURRENT ASSETS 10,022,472 8,817,448 18,839,920
CAPITAL ASSETS, net: 11,676,898 14,835,664 26,512,562
Construction in progress 68,696 466,363 535,059
TOTAL CAPITAL ASSETS 11,745,594 15,302,027 27,047,621
TOTAL ASSETS 21,768,066 24,119,475 45,887,541
DEFERRED OUTFLOWS OF RESOURCES
DEFERRED PENSION OUTFLOW 1,962,790 181,357 2,144,147
TOTAL ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES 23,730,856 24,300,832 $ 48,031,688
See notes to financial statements.
LIABILITIES
Governmental Business-type
Activities Activities Total
CURRENT LIABILITIES'
Accrued liabilities 419,745 485,170 904,915
Bond interest payable 26,637 51,958 78,595
Due to other funds 1,224,634 88,933 1,313,567
Due to other governments - 32,000 32,000
Long-tens debt, current portion 328,765 760,235 1,089,000
TOTAL CURRENT LIABILITIES 1,999,781 1,418,296 3,418,077
LONG-TERM DEBT, non current 3,251,117 9,955,883 13,207,000
PREMIUM ON BONDS PAYABLE 43,177 126,223 169,400
NET PENSION LIABILITY 1,677,531 156,669 1,834,200
LONG-TERM LIABILITIES 5,138,356 523,961 5,662,317
TOTAL LIABILITIES 12,109,962 12,181,032 24,290,994
DEFERRED INFLOWS OF RESOURCES
DEFERRED PENSION INFLOW 199,043 19,046 218,089
NET POSITION
INVESTED IN CAPITAL ASSETS,
net of related debt 8,165,712 7,023,909 15,189,621
RESTRICTED:
Culture and recreation 776,981 - 776,981
Equipment 62,517 - 62,517
Benefits 350,270 32,505 382,775
Cemetery maintenance 2,917 - 2,917
UNRESTRICTED 2,063,454 5,044,340 7,107,794
TOTAL NET POSITION 11,421,851 12,100,754 23,522,605
TOTAL LIABILITIES, DEFERRED INFLOWS
AND NET POSITION $ 23,730,856 $ 24,300,832 $ 48,031,688
TOWN OF IT ACA
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2016
Program
Governmental Activities Revenue
Operating
FunctionL/Programs Charges for Grants and
Expenses Services Contributions
General governmental support $ 2,557,347 $ 17,345 $ 303,712
Public safety 3,298,060 150 -
Transportation 3,460,526 20,806 -
Culture and recreation 1,056,923 - 125,493
Home and community services 1,946,407 193,330 -
Total governmental activities $ 12,319,263 231,631 429,205
Business-type activities:
Water 3,496,706 3,593,387 -
Sewer 2,070,472 2,484,737
Total business-type activities 5,567,178 6,078,124 -
$ 17,886,441 $ 6,309,755 $ 429,205
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
NETPOSITION, beginning of year, as restated
NET POSITION, end of year
See notes to financial statements.
Net (Expenses)
Program Revenues and
Revenue Changes in Net Position
Capital Grants
and Governmental Business-type
Contributions Activities Activities Total
$ 11,537 $ ( 2,224,753) $ - $ ( 2,224,753)
( 3,297,910) - ( 3,297,910)
115,432 ( 3,324,288) - ( 3,324,288)
( 931,430) - ( 931,430)
( 1,753,077) - ( 1,753,077)
$ 126,969 $ (I1,531,458) $ - $ (11,531,458)
- - 96,681 96,681
414,265 414,265
- - 510,946 510,946
$ 126,969 $ (11,531,458) $ 510,946 $ (11,020,512)
$ 7,729,873 $ 1,013,902 $ 8,743,775
3,072,508 - 3,072,508
15,058 5,264 20,322
273,619 - 273,619
289,486 - 289,486
59,886 464 60,350
( 980,976) 980,976 -
10,459,454 2,000,606 12,460,060
( 1,072,004) 2,511,552 1,439,548
12,493,855 9,589,202 22,083,057
$ 11,421,851 $ 12,100,754 $ 23,522,605
- 2 -
TOWN OF ITHACA
BALANCE SHEET–GOVERNMENTAL FUNDS
December 31, 2016
Major Funds
General — _1Highway Fire
ASSETS AND OTHER DEBITS:
Unrestricted cash $ 3,662,232 $ 1,589,864 $ 1,858,955
Restricted cash 1,006,265 150,997 -
Due from other funds 72,686 86,804 -
Due from other governments 284,489 167,380 -
Prepaid expenses 105,699 26,128 -
Other receivables 11,538 - -
'TOTAL ASSETS AND OTHER DEBITS $ 5,142,90-9 $ 2,021,173 $ 1,858,955
LIABILITIES, FUND EQUITY, AND OTHER CREDITS:
LIABILITIES:
Accrued liabilities $ 416,670 $ 208,622 $ 201,242
Due to other funds 57,483 13,073 -
'TOTAL LIABILITIES 474,153 221,695 201,242
FUND BALANCES:
Nonspendable - prepaid expenses 105,699 26,128 -
Restricted 1,006,266 150,997
Committed - - -
Assigned 1,408,072 1,622,353 1,657,713
Unassigned 2,148,719 - -
TOTAL FUND BALANCES 4,668,756 1,799,-478 1,657,713
-- - ---- --
TOTAL LIABILITIES, FUND EQUITY,
AND OTHER CREDITS $ 5,142,909 $ 2,021,173 1,858,955
See notes to financial statements.
Nonmaj or
Major Funds Funds Total
Capital Other Governmental
Projects Funds Funds
$ 623,059 $ 437,311 $ 8,171,421
- 2,864 1,160,126
- - 1.59,490
62,863 - 51.4,732
- - 131,827
- - 11,538
$ 685,922 $ 440,175 $ 10,149,134
$ 23,098 $ - $ 849,632
1,224,635 - 1,295,1.91
1,247,733 - 2,1.44,823
- - 131,827
- 2,864 1,160,127
603,339 - 603,339
- 437,311 5,125,449
( 1,165,150) - 983,569
( 561,811) 440,175 8,004,311
$ 685,922 $ 440,175 $ 10,149,134
- 3 -
TOWN OF ITHACA
RECONCILIATION OF THE TOTAL FUND BALANCES SHOWN IN
THE GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
December 31, 2016
Total fund balances in the fund financial statements for the governmental funds. $ 8,004,311
This amount differs ftom 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. 11,745,594
Lang-term liabilities for bonded debt are included as liabilities in the government-
wide statements and are deducted. 3,623,059)
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. 60,879
Long-term liabilities for compensated absences and other post employment benefits
are included in the government-wide statements as liabilities and are deducted, 4,708,470)
Current liabilities for bond interest payable are included in the government-
wide statements as liabilities and are deducted. 26,637)
Deferred outflows of resources are included in the government-wide
statements and are added. 1,962,790
Net pension liability is included in the government-wide statements
and is subtracted. 1,677,531)
Prepaid pension expense is included in the fund financial statements
and is subtracted. 116,983)
Deferred inflows of resources are included in the government-wide
statements and are subtracted. 199,043)
Interfund receivables and payables within the governmental funds are eliminated
in the government-wide statements. The amounts offset:
Due from other funds 70,557
Due to other funds 70,557)
Total Net Position - End of Year $ 11,421,851
See notes to financial statements.
- 4 -
TOWN OF ITHACA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2016
Major Funds
General— Highway Fire
REVENUES:
Real property taxes $ 2,599,982 $ - $ 3,549,967
Real property tax items 62,941 1,499,984
Non-property tax items:
Sales tax 1,350,754 1,653,189
Other non-property tax items 68,565 -
Departmental income 210,343 -
Intergovernmental charges 113,493 20,806 -
Use of money and property 6,662 2,596 4,055
Rental income 29,716 - -
Licenses and permits 22,958
Fines and forfeitures 273,619 -
Sale of property and compensation for loss 6,563 61,539
Local sources 72,465 2,534
State sources:
Mortgage tax 286,227 -
State aid per capita 221,134 -
NYS highway improvement (CHIPS) - 115,432 -
Miscellaneous - - 26,815
TOTAL REVENUES 5,325,422 3,356,080 3,580,837
Other Sources:
Inter-fund transfers 589,800 - -
TOTAL REVENUES AND OTHER SOURCES 5,915,222 3,356,080 3,580,837
See notes to financial statements.
Major Nonmajor
Funds Funds Total
Capital Other Governmental
Projects Funds Funds
$ 16,999 6,166,948
- 1,562,925
- - 3,003,943
- - 68,565
- - 210,343
- - 134,299
596 1,149 15,058
- 29,716
- - 22,958
- - 273,619
- - 68,102
- - 74,999
- - 286,227
- - 221,134
- - 115,432
5,363 - 32,178
5,959 18,148 12,286,446
68,526 600,912 1,259,238
74,485 619,060 13,545,684
- 5 -
TOWN OF IT ACA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
GOVERNMENTAL FUNDS (continued)
For the Year Ended December 31, 2016
Major Funds
General Highway Fire
EXPENDITURES:
General governmental support $ 1,626,242 $ 65,422 $ 3,180
Public safety 80,868 - 3,192,535
Transportation 395,434 2,459,766 -
Culture and recreation 1,011,717 -
Home and community services 1,102,560 -
Employee benefits 1,341,246 468,029
Debt service (principal and interest) - - -
TOTAL EXPENDITURES 5,558,067 2,993,217 3,195,715
Other Uses:
Interfund transfers 214,754 388,604 -
TOTAL, EXPENDITURES AND OTHER USES 5,772,821 3,381,821 3,195,715
EXCESS (DEFICIT) OF REVENUES
OVER EXPENDITURES 142,401 25,741) 385,122
FUND BALANCE, beginning of year 4,526,355 1,825,219 1,272,591
FUND BALANCE, end of year $ 4,668,756 $ 1,799,478 $ 1,657,713
See notes to financial statements.
Major Nonmajor
Funds Funds Total
Capital Other Governmental
Projects Funds Funds
$ - $ 3,123 $ 1,697,967
- 3,273,403
- 16,225 2,871,425
6,704 - 1,018,421
- 4,670 1,107,230
- 1,809,275
- 445,216 445,216
6,704 469,234 12,222,937
1,636,856 - 2,240,214
1,643,560 469,234 14,463,151
( 1,569,075) 149,826 ( 917,467)
1,007,264 290,349 8,921,778
$ ( 561,811) $ 440,175 $ 8,004,311
- 6 -
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 31,2016
Net change in fund balances shown for total Governmental Funds. This amount differs
from the change in net position reflected in the Statement of Activities due to the
following: $ 917,467)
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 1,269,354
Depreciation expense 934,392) 334,962
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
equipment:
Proceeds from equipment sales 60,348)
Loss recognized 1,123) 61,471)
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 60,879
Prior year revenues 57,620) 3,259
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: 341,801
See notes to financial statements.
- 7 -
TOWN OF IT ACA.
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES ANIS CHANGES IN
FUND BALANCE OF THE GOVERNMENTAL FUNDS TO THE CHANGE IN NET POSITI®N
SHOWN IN THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31,2016(continued)
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: ( 129)
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 133,199
Current year expenses ( 144,706) ( 11,507)
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 the estimated
present value of future benefits over a thirty-year period: ( 618,542)
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: ( 146,184)
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: 3,274
Interfund transactions are eliminated in the Statement of Activities. The amounts
offset, and have a zero effect on operations:
Transfers in 939,568
Transfers out ( 939,568) -
Change in Net Position $ ( 1,072,004)
See notes to financial statements.
_ g _
TOWN F IT ACA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2016
PROPRIETARY FUNDS
Sewer Water
Fund Fund Total
CURRENT ASSETS:
Cash $ 2,832,562 $ 1,150,835 $ 3,983,397
Cash, restricted 14,642 17,863 32,505
Accounts receivable:
Water and sewer rents 475,003 639,172 1,114,175
Due from other governments - 2,462,737 2,462,737
Due from other funds - 1,224,634 1,224,634
TOTAL CURRENT ASSETS 3,322,207 5,495,241 8,817,448
CAPITAL ASSETS, net:
Equipment and machinery 448,523 249,988 698,511
Infrastructure 2,152,491 11,984,662 14,137,153
Construction in progress - 466,363 466,363
TOTAL CAPITAL ASSETS 2,601,014 12,701,013 15,302,027
TOTAL ASSETS 5,923,221 18,196,254 24,119,475
DEFERRED PENSION OUTFLOW 62,118 119,239 181,357
TOTAL ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES $ 5,985,339 $ 18,315,493 $ 24,300,832
CURRENT LIABILITIES:
Accrued liabilities $ 231,991 $ 253,179 $ 485,1.70
Bond interest payable - 51,958 51,958
Due to other funds 44,913 44,020 88,933
Due to other governments 32,000 - 32,000
Long-term debt, current portion - 760,235 760,235
TOTAL CURRENT LIABILITIES 308,904 1,109,392 1,418,296
LONG-TERM DEBT, non current - 9,955,883 9,955,883
PREMIUM ON BONDS PAYABLE - 126,223 126,223
NET PENSION LIABILITY 53,539 103,130 156,669
LONG-TERM LIABILITIES 202,275 321,686 523,961
TOTAL LIABILITIES 564,718 11,616,314 12,181,032
DEFERRED PENSION INFLOW 6,476 12,570 19,046
INVESTED IN CAPITAL ASSETS,
net of related debt 2,601,014 4,422,895 7,023,909
RESTRICTED:
Benefits 14,642 17,863 32,505
UNRESTRICTED 2,798,489 2,245,851 5,044,340
TOTAL NET POSITION 5,414,145 6,686,609 12,100,754
TOTAL LIABILITIES, DEFERRED INFLOWS
AND NET POSITION $ 5,985,339 $ 18,315,493 $ 24,300,832
See notes to financial statements.
- 9 -
TOWN
p 7�,7 �g 7 F ACA AND
�7
STATEMENT OF REVENUES, EXPENSES, ANI) CHANGES
IN FUND NET POSITION
PROPRIETARY FUNDS
December 31, 2016
PROPRIETARY FUNDS
Sewer Water
Fund Fund Total
OPERATING REVENUES:
Charges for services $ 2,476,497 $ 3,530,697 $ 6,007,194
TOTAL OPERATING REVENUES 2,476,497 3,530,697 6,007,194
OPERATING EXPENSES:
Cost of sales and services 1,675,338 2,517,317 4,192,655
Wages and benefits 272,675 345,660 618,335
Depreciation 84,101 340,655 424,756
Administration 38,358 62,008 100,366
TOTAL OPERATING EXPENSES 2,070,472 3,265,640 5,336,112
OPERATING INCOME 406,025 265,057 671,082
NON-OPERATING REVENUES (EXPENSES):
Real property taxes 201,906 811,997 1,013,903
Intergovernmental charges - 464 464
Local sources 8,240 62,690 70,930
Interest expense - ( 231,066) ( 231,066)
Use of money and property 2,955 2,309 5,264
TOTAL NON-OPERATING REVENUES 213,101 646,394 859,495
INTERFUND OPERATING TRANSFERS ( 176,200) 1,157,176 980,976
CHANGE IN NET POSITION 442,926 2,068,627 2,511,553
NET POSITION, beginning of year, as restated 4,971,219 4,617,982 9,589,201
NET POSITION, end of year $ 5,414,145 $ 6,686,609 $ 12,100,754
See notes to financial statements.
- 10 -
TOWN OF IT ACA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
December 31, 2016
PROPRIETARY FUNDS
Sewer Water
Fund Fund Total
CASH FLOWS FROM OPERATING ACTIVITIES:
Received from user charges and other assessments 2,496,505 $ 3,366,307 $ 5,862,812
Payments for administration 38,358) 62,008) ( 100,366)
Payments for wages and benefits 267,611) ( 335,829) ( 603,440)
Payments to suppliers for goods and services 1,369,397) ( 2,509,498) ( 3,878,895)
NET CASH PROVIDED BY OPERATING ACTIVITIES 821,139 458,972 1,280,111
CASH FLOWS FROM NON-CAPITAL FINANCING:
Real property taxes 201,906 811,996 1,013,902
Operating grants 10,300 ( 1,159,469) ( 1,149,169)
Transfers to other funds 176,200) 1,157,176 980,976
NET CASH PROVIDED BY
NON-CAPITAL FINANCING ACTIVITIES 36,006 809,703 845,709
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Acquisition of capital assets 578,848) ( 1,369,420) ( 1,948,268)
Principal paid on capital debt - ( 716,199) ( 716,199)
Interest paid on capital debt - ( 230,417) ( 230,417)
NET CASH USED IN CAPITAL AND
RELATED FINANCING ACTIVITIES 578,848) ( 2,316,036) ( 2,894,884)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest on cash and CD's 2,955 2,309 5,264
NET CASH PROVIDED BY INVESTING ACTIVITIES 2,955 2,309 5,264
NET CHANGE IN CASH AND CASH EQUIVALENTS 281,252 ( 1,045,052) ( 763,800)
Cash,beginning of year 2,565,952 2,213,750 4,779,702
Cash, end of year $ 2,847,204 $ 1,168,698 $ 4,015,902
RECONCILIATION OF OPERATING INCOME To NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Operating income $ 406,025 $ 265,057 $ 671,082
Adjustments to reconcile operating income to net
cash provided by operating activities:
Depreciation 84,101 340,655 424,756
Amortization of bond premiums - 10,913) 10,913)
Changes in receivables 20,008 164,390) ( 144,382)
Changes in prepaid expenses - - -
Changes in deferred outflows of resources 44,380) 86,146) ( 130,526)
Changes in liabilities 348,909 102,139 451,048
Changes in deferred inflows of resources 6,476 12,570 19,046
NET CASH PROVIDED BY OPERATING ACTIVITIES 821,139 $ 458,972 $ 1,280,111
See notes to financial statements.
TOWN OF ITHACA
STATEMENT OF FIDUCIARY NET POSITION
AGENCY FUNDS
December 31, 2016
ASSETS:
Cash $ 181,280
TOTAL ASSETS $ 181,280
LIABILITIES:
Accounts payable and other liabilities $ 181,280
TOTAL LIABILITIES 181,280
NET POSITION -
TOTAL LIABILITIES AND NET POSITION $ 181,280
See notes to financial statements.
- 12 -
TOWN OF IT ACA
NOTES TO FINANCIAL STATEMENTS
December 31, 2016
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 goverinnental 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. Set-vices for fire
protection are contracted out through the City of Ithaca and the Village of Cayuga
Heights.
All governmental activities and functions perfort-ned 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.
I. Southern Cayuga Lake Intermunicipal Water Commission (SCLIWC) is a
joint venture involving the Towns of Ithaca, 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.
• SCLIWCs executive body consists of ten members, two members being
appointed by each municipality. The Treasurer of SCLIWC is traditionally
the Town of Ithaca'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,
2016, the audited financial statements of the Commission showed:
Total Assets 13,754,672
Deferred Outflows of Resources 659,645
Total Liabilities 8,031,027
Deferred Inflows of Resources 68,136
Net Position 6,315,154
Revenues 5,084,943
Expenses 3,757,774
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 1.984 and was completed
in 1986.
• The Special Joint Committee (governing body) of the IAWTP 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 of Ithaca 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 IAWTP for the year ended December 31, 2015 (latest available):
Total Assets $ 35,050,927
Deferred Outflows of Resources $ 114,291
Total Liabilities $ 20,736,292
Deferred Inflows of Resources $ 2,616
Net Position $ 14,426,310
Total Revenues $ 3,646,606
Total Expenses $ 5,277,679
C. Basis of Presentation
I. Government-wide Statements
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 non-exchange
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 of Ithaca 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.
• Cal)ital 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 Fundto 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 goven-Iments,
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. Non-
exchange 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 Goverm-nental 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 can-ent 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-tern 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 V2 the total bill,
plus a 2.5% processing fee. If the installment option is selected, the first payment
is due between January I 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 I to January 31 at face value and from
February I 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, 2016, 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
accounts and certificates of deposit. Permissible investments include obligations
of the U.S. Treasury and U.S. Agencies, repurchase agreements, and obligations
of New York State or its localities.
Collateral is required for demand 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.
- 1.8 -
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.
1. 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 cost. 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:
Estimated
Capitalization Useful
Threshold Life
Building and improvements 5,000 30-40 years
Non-building improvements 5,000 1.5-20 years
Equipment and machinery 5,000 5-15 years
Furniture and funiishings 5,000 10 years
L. Infrastructure
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:
Estimated
Capitalization Useful
Threshold Life
Road systems 10,000 20 years
Water and sewer systems 10,000 40 years
- 19 -
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 has one item that
qualifies for reporting in this category; the deferred inflow related to pensions
reported in the Statement of Net Position.
N. Vested Employee Benefits
Employees accrue (earn) vacation leave based on the number of years employed
up to a maximum of 20 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 2016, the Town has recognized
a liability of $453,097 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 ($23,210) and long-term ($429,887) 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
- 20 -
is available to all eligible participants, permits participants to defer a portion of
their salary (100% of gross wages not to exceed $18,000 or $24,000 for
employees over the age of 50 to allow for catch up contributions) 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 of Ithaca is exposed to various risks of loss 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, 2016, $13,535 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 of related debt."
2. Fund Financial Statements
During the year ending December 31, 2011, the Town implemented
Governmental Accounting Standards Board (GASB) Statement No. 54, Fund
- 21 -
Balance Reporting and Governmental Fund Type Definitions. Statement No.
54 changes the terminology and classification of fund balance to reflect
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.
w 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.
- 22 -
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 deten-nined first and then restricted
fund balances for specific purposes are deten-nined. 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 deten-nined next and then assigned fund balance. The remaining
amounts are reported as unassigned. Assigm-nents 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 2016
was $726,866. 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 2016 was $62,517. 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 carried
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
include 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 2016 was
$350,270. 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 $ 169,306
General Part-Town Fund 59,979
General Part-Town Highway Fund 88,480
Water Fund 17,863
Sewer Fund 14,642
.............350.270
• 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 arnount of $40,000 was donated to provide for future
maintenance of the preserve. As of December 31, 2016, the balance of the
reserve totaled $40,097.
_ 23 -
• 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 $10,018 at December
31, 2016.
• The Inlet Valley Cemetery Fund reserve includes funds provided for the
maintenance of the cemetery. The balance at the end of 2016 was $4,417.
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
GASB 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 adopted GASB Statement No. 72 for its 2016 financial
statements,
GASB 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 governinents 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.
GASB Statement No. 76
In June 2015, the GASB issued Statement No. 76, "The Hierarchy of Generally
Accepted Accounting Principles for State and Local Governi-nents". 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 non-
authoritative 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
adopted GASB Statement No. 76 for its 2016 financial statements.
GASB Statement 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
- 24 -
governments to disclose information about their own tax abatements separately
from information about tax abatements that are entered into by other governments
and reduce the reporting government's tax revenues. The Town adopted GASB
Statement No. 77 for its 2016 financial statements.
GASB 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 from 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 has early implemented GASB
Statement No. 82 for its 2016 financial statements.
GAS13 Statement.No. 83
In November 2016, the GASB issued Statement No. 83, "Certain Asset
Retirement Obligations". This Statement addresses accounting and financial
reporting for certain asset retirement obligations (AROs). An ARO is a legally
enforceable liability associated with the retirement of a tangible capital asset. A.
government that has legal obligations to perform future asset retirement activities
related to its tangible capital assets should recognize a liability based on the
guidance in this Statement. The Town is required to adopt GASB Statement No.
83 for its 2019 financial statements.
GASB Statement No. 84
In January 2017, the GASB issued Statement No. 84, "Fiduciary Activities". This
Statement's objective is to improve guidance regarding the identification of
fiduciary activities for accounting and financial reporting purposes and how those
activities should be reported. This Statement establishes criteria for identifying
fiduciary activities of all state and local governments. The focus of the criteria
generally is on (1) whether a goveriunent is controlling the assets of the fiduciary
activity and (2) the beneficiaries with whom a fiduciary relationship exists.
Separate criteria are included to identify fiduciary component units and
postemployment benefit arrangements that are fiduciary activities. The Town is
required to adopt GASB Statement No. 84 for its 2019 financial statement.
GASB Statement No. 85
In March 2017, the GASB issued Statement No. 85, "Omnibus 2017". This
Statement's objective is to address practice issues that have been identified during
implementation and application of certain GASB Statements. This Statement
addresses a variety of topics including issues related to blending component units,
goodwill, fair value measurement and application, and postemployinent benefits
(pensions and other postemployment benefits [OPEB]). Specifically, this
Statement addresses the following topics:
• Blending a component unit in circumstances in which the primary
government is a business-type activity that reports in a single column
for financial statement presentation.
• Reporting amounts previously reported as goodwill and "negative"
goodwill.
• Classifying real estate held by insurance entities.
• Measuring certain money market investments and participating
interest-earning investment contracts at amortized cost,
• Timing of the measurement of pension or OPER liabilities and
expenditures recognized in financial statements prepared using the
current financial resources measurement focus.
- 25 -
• Recognizing on-behalf payments for pensions or OPEB in employer
financial statements.
• Presenting payroll-related measures in required supplementary
information for purposes of reporting by OPEB plans and employers
that provide OPEB.
• Classifying employer-paid member contributions for OPEB.
• Simplifying certain aspects of the alternative measurement method of
OPEB.
• Accounting and financial reporting for OPEB provided through certain
multiple-employer defined benefit OPEB plans.
The Town is required to adopt GASB Statement No. 85 for its 2018 financial.
statements.
GASB Stateinent No. 86
In May 2017, the GASB issued Statement No. 86, "Certain Debt Extinguishment
Issues". This Statement's primary objective is to improve consistency in
accounting and financial reporting for in-substance defeasance of debt by
providing guidance for transactions in which cash and other monetary assets
acquired with only existing resources—resources other than the proceeds of
refunding debt—are placed in an irrevocable trust for the sole purpose of
extinguishing debt. This Statement also improves accounting and financial
reporting for prepaid insurance on debt that is extinguished and notes to financial
statements for debt that is defeased in substance, The Town is required to adopt
GASB Statement No. 86 for its 2018 financial statements.
GASB Statement No. 87
In June 2017, the GASB issued Statement No. 87, "Leases". This Statement
requires that, govenitrient lessees:
• Recognize the following: (a) a lease liability and (b) an intangible asset
representing the lessee's right to use the leased asset; and
• Report in its financial statements: (a) amortization expense for using the
lease asset over the shorter of the tenn of the lease or the useful life of the
underlying asset, (b) interest expense on the lease liability and (c) note
disclosures about the lease.
This Statement requires that government lessors:
• Recognize: (a) a lease receivable and (b) a deferred inflow of resources
and continue to report the leased asset in its financial statements; and
• Report in its financial statements: (a) lease revenue, recognized over the
tern of the lease, corresponding with the reduction of the deferred inflow,
(b) interest income on the receivable; and (c) note disclosures about the
lease.
The Town is required to adopt GASB Statement No. 87 for its 2020 financial
statement.
V. Non-Cash Capital and Related Financing Activities - Proprietary Funds
The Water Fund recorded debt and a receivable of$2,438,000 related to the Town
of Ithaca's proportionate share of bond liabilities related to the Southern Cayuga
Intermunicipal Water Commission. This activity is not reflected in the Statement
of Cash Flows for Proprietary Funds.
- 26 -
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 Goveri-irriental 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 Govern-mental 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 they 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.
• Lang-tern 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
Govermnental Fund Statements and the change in net position reported in the
Statement of Activities.
- 27 -
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;
1 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, 2016, per the bank,
were $13,755,800.
1 2 3
Governmental funds $ 9 3
580 38 $
A� $...............
Enterprise funds $ 3,983397 $.__.....__._
Agency fiends 192,065
NOTE 4– INTER-FUND ACTIVITY
Inter-fund receivables and payables at December 31, 2016, were as follows:
Inter-Fund Inter-Fund
Fund Type Receivables Payables
General town-wide $ 72,686 $ 57,483
Highway 86,804 13,073
Water 1,224,634 44,021
Sewer - 44,913
Capital projects - 1,224,634
$ 1,384,124 $ 1,384,124
Inter-fund revenues and expenditures at December 31, 2016, were as follows:
Inter-Fund Inter-Fund
112d_Te Revenues— Expenditures
General town-wide $ 569,800 $ 131,454
General part-town - 83,300
Highway - 388,604
Water 1,300,646 143,470
Sewer - 176,200
Capital projects 68,526 1,636,856
Risk retention 20,000 -
Non-major 600,912 -
$ 2,559,884 $ 2,559,884
- 28 -
NOTE 5 -CAPITAL ASSETS
Capital asset balances and activity for the year ended December 31, 2016, were as follows:
Beginning Disposals & Ending
Balance Additions Reclassifications Balance
Governmental Funds
CAPITAL ASSETS THAT ARE
NOT DEPRECIATED:
Land 439,880 159,900 599,780
Construction in progress 1,895,909 6,704 1,833,917 68,696
TOTAL NON-DEPRECIABLE
HISTORICAL COST 2,335,789 166,604 1,833,917 668,476
CAPITAL ASSETS THAI' ARE DEPRECIATED-.
Buildings 4,711,249 337,666 - 5,048,915
Equipment and machinery 5,209,410 663,162 289,964 5,582,608
Furniture and furnishings 209,179 - - 209,179
Non-building improvements 548,431 462,552 - 1,010,983
Infrastructures 3,934,289 2,285,633 812,346 5,407,576
TOTAL DEPRECIABLE HISTORICAL COST 14,612,558 3,749,013 1,102,310 17,259,261
LESS AccumULATED DEPRECIATION-.
Buildings 1,629,613 149,975 - 1,779,588
Equipment and machinery 2,680,785 520,287 228,493 2,972,579
Furniture and furnishings 197,836 2,549 - 200,385
Non-building improvements 309,020 36,827 345,847
Infrastructures 658,990 224,754 - 883,744
TOTAL ACCUMULATED DEPRECIATION 5,476,244 934,392 228,493 6,182,143
TOTAL HISTORICAL COST, net 11,472,103 2,981,225 2,707,734 11,745,594
Depreciation was charged to governmental functions as follows:
General government support $ 111,313
Transportation 583,822
Culture and recreation 71,244
Home and community services 168,013
Total Depreciation Expense $ 934,392
- 29 -
Beginning Disposals & Ending
Balance— Additions— Reclassifications Balance
Enter rise Funds
CAPITAL ASSETS THAT ARE
NOT DEPRECIATED:
Construction in progress $ 3,499,576 $ 466,364 $ 3,499,577 $ 466,363
CAPITAL ASSETS THAT ARE DEPRECIATED:
Equipment and machinery 422,952 373,220 - 796,172
Infrastructures 11,990,117 4,608,261 - 16,598,378
TOTAL DEPRECIABLE HISTORICAL COST 12,413,069 4,981,481 - 17,394,550
LESS ACCUMULATED DEPRECIATION:
Equipment and machinery 38,106 59,555 - 97,661
Infrastructures 2,096,024 365,201 - 2,461,225
TOTAL .AccumULATED DEPRECIATION 2,134,130 424,756 - 2,558,886
TOTAL HISTORICAL Cosi,, net $ 13,778,515 $ 5,023,089 $ 3,499,577 $ 15,302,027
Depreciation was charged to enterprise funds as follows:
Sewer fund $ 84,101
Water fund 340,655
Total Depreciation Expense 424,756
NOTE 6– LIABILITIES
A. Pension Plans
Plan Description
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.
- 30 -
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
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 41j 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 deten-nined rate.
The required contributions for the current year and four preceding years were:
ERS
2016 $ 513,481
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 2016 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 Deferred Outflows and Inflows of Resources Related
to Pensions
At December 31, 2016, 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, 2016. The total pension liability used to
calculate the net pension liability was determined by an actuarial valuation.
- 31 -
Measurement date March 31, 2016
Net pension liability $ 1,834,200
Town's portion of the Plan's total net pension liability 0.011%
At year end December 31, 2016, the Town recognized pension expenses of
$684,034. The Town reported deferred outflows of resources related to pensions
from the following sources:
Deferred
Outflows of
Resources
Differences between expected and actual experience $ 9,268
Changes of assumptions 489,126
Net difference between projected and actual
investment earnings on pension plan investments 1,088,149
Changes in proportion and differences between
employer contributions and proportionate share of
contributions 44,122
Employer contributions subsequent to the measurement date 513,482
Total $ 2,144,147
The Town reported deferred inflows of resources related to pensions from the
following sources:
Deferred
Inflows of
Resources
Differences between expected and actual experience $ 217,414
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 675
Total $ 218,089
The Town's contributions subsequent to the measurement date for the Plans
amounted to $513,482.
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, 2017.
The Town's balances of deferred outflows and inflows of resources related to
pension will be recognized in the pension expense as follows:
- 32 -
2017 359,428
2018 359,428
2019 359,428
2020 334,292
Total 1,412,576
Actuarial Assumptions
The Town's total pension liability as of the measurement date was determined by
using an actuarial valuation as of April 1, 2015, with updated procedures used to
roll forward the total pension liability to March 31, 2016. The actuarial
valuations used the following actuarial assumptions:
Actuarial cost method Entry age normal
Inflation 2.5%
Investment rate of return 7.0%
Salary scale 3.8%
Projected COLAs 1.3%
Decrement tables 04/01/10-03/31/15
System's experience
Annuitant mortality rates are based on April 1, 2010 — March 31, 2015 System's
experience with adjustments for mortality improvements based on the Society of
Actuaries Scale MP-2014,
The Town's long-term rate of return on pension plan investments was determined
using a building block method in which best estimate ranges of expected future
real rates of return (expected returns net of investment expense and inflation) are
developed for each major asset class. These ranges are combined to produce the
long-ten-ii expected rate of return by weighting the expected future real rates of
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 7.34% at the valuation date of
March 31, 2016.
Discount rate
The Discount rate used to calculate the total pension liability was 7.0%. The
projection of cash flows used to determine the discount rate assumes that 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 7.0%, as well as what the
Town's proportionate share of the net pension liability would be if it were
- 33 -
calculated using a discount rate that is one percentage point lower (6.0%) or one
percentage point higher(8.0%) that the current rate:
Current
I%Decrease Assumption I% Increase
(6.0%) (7.0%) (8.0%)
Town's
proportionate share of the
net pension (asset)/liability 4,135,991 1,834,200 ( 110,712)
Pension Plan Fiduciary Net Position
The components of the current-year net pension liabilities of the employers as of
March 31, 2016 were as follows:
Employers' total pension liability 172,303,544,000)
Fiduciary net position 156,253,265,000
Employers' net pension liability 16,050,279,000)
Ratio of Plan net position to the
employers' total pension asset/(liability) 90.7%
B. Short-Term Debt
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 (115) 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 period's
equivalent to the maximum life of the permanent financing, provided that
stipulated annual reductions of principal are made.
As of December 31, 2016, temporary financing in outstanding bond anticipation
notes totaled $0.
C. Long-Term Debt
Bonds: The Town of Ithaca 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, 2016, the total principal indebtedness outstanding of the Town
of Ithaca aggregated $14,296,000. Of this amount, $3,579,882 was subject to the
Town's constitutional debt limit and represented 3.98% 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.
- 34 -
The following is a summary of the Town of Ithaca's outstanding serial bonds for
the year ended December 31, 2016:
Original
Date Original Interest Maturity Outstanding
Description of Issue Amount Rate Date 12/31/2016
GENERAL TOWNWIDE FUND
2003 Public Improvement 12/29/03 $ 1,000,000 3.95% 12/29/17 $ 72,000
2011 Public Improvement 9/1/11 300,000 2.25% 9/1/21 150,000
2013 Public Improvement 8/1/13 790,000 2.00% 8/l/23 594,000
WATER FUND
2004 Public Improvement 2/12/04 1,000,000 3.88% 2/12/19 201,000
2009 Public Improvement 10/1/09 1,125,000 2.75% 10/1/24 660,000
2011 Public Improvement 9/1/11 2,000,000 2.25% 9/1/31 1,645,000
2013 Public Improvement 8/1/13 1,420,000 2.00% 8/1/23 1,154,000
2014 Public Improvement 12/30/14 950,000 2.00% 12/15/29 1,816,000
2014 Refunding Bond 12/30/14 910,000 2.00% 5/15/24 790,000
2015 Public Improvement 11/13/15 2,150,000 2.00% 10/15/30 2,026,000
SCLIWC serial bonds various 3,763,000 various various 2,438,000
HIGHWAY FUND
2011 Public Improvement 9/1/11 350,000 2.25% 9/1/21 175,000
2013 Public Improvement 8/1/13 1,240,000 2.00% 8/1/23 992,000
2014 Public Improvement 12/30/14 950,000 2.00% 12/15/29 829,000
2015 Public Improvement 11/13/15 800,000 2.00% 10/15/30 754,000
Total Serial Bonds Payable 7 1-4,296,000
Interest on long-term debt paid during the year was:
Interest paid $ 333,833
Add interest accrued - current year 78,595
Less interest accrued - prior year 77,818)
$ 334,610
Interest expense has been allocated to the following governmental functions:
General $ 10,027
Transportation 93,517
$ 103,544
Interest expense has been allocated to the following enterprise funds:
Water fund 231,066
_ 35 _
Long-term liability balances and activity for the year are summarized below:
Beginning Ending
Governmental Funds Balance Issued Redeemed Balance
Serial bonds 3,921,683 $ ( 341,801) 3,579,882
Total serial bonds and $ 3,921,683 $ ( 341,801) 3,579,882
Other liabilities:
Compensated absences $ 133,199 $ 11,507 $ - 144,706
Net pension liability 356,827 1,320,704 - 1,677,531
Convertible sick/personal time (1) 265,249 187,848 - 453,097
Other post-employment benefits 3,945,223 618,541 - 4,563,764
Total long-term liabilities $ 8,622,181 $ 2,138,600 $ ( 341,801) $ 10,418,980
(I) Value of accumulated sick/personal time that maybe used by retirees to offset retiree portion
of health insurance premiums. See Note 9.
Beginning Ending
Enterprise Funds Balance Issued Redeemed Balance
Serial bonds $ 8,994,317 716,199) $ 8,278,118
SCLIWC serial bonds 2,901,750 463,750) 2,438,000
Total serial bonds and
bond anticipation notes $ 11,896,067 $ - $ 1,179,949) $ 10,716,118
Other liabilities:
Compensated absences 12,91.0 $ 3,193 $ $ 16,103
Net pension liability 30,295 126,374 156,669
Convertible sick/personal time (1) - - -
Other post-employment benefits 382,385 125,473 507,858
Total long-term liabilities $ 12,321,657 $ 255,040 $ 1,179,949) $ 11,396,748
(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):
- 36 -
Serial Bonds Year Principal Interest Total
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 1,040,000 212,769 1,252,769
2022-2026 4,135,000 671,647 4,806,647
2027-2031 2,445,000 175,675 2,620,675
Total Serial Bonds $ 11,858,000 $ 2,159,934 $ 14,017,934
The following long-term debt has been authorized,but remains unissued at December 31, 2016:
Trumansburg Water Tank Replacement $ 900,000
Park Lane Water Main Replacment 500,000
Sapsucker Woods Water Main Replacement 425,000
Christopher Circle Water Main Replacement 325,000
Total- authorized, but unissued debt $ 2,150,000
NOTE 7—DEBT: SOUTHERN CAYUGA LAKE INTERMUNICIPAL WATER
COMMISHgNjSCSIVVC)
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$2,438,000 representing the Town's
approximate 53% share of the total outstanding serial bond debt associated with SCLIWC as of
December 31, 2016. 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$2,438,000 at December 31, 2016 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, 2016:
Date Original Date of Outstandings
Description of Issue Amount I/R Final Maturity 12/31/2016
Joint Water
Improvement 1 11/23/2004 $ 1,000,000 4.75% 11/23/2024 $ 490,000
Joint Water
Improvement 2 5/18/2005 1,000,000 4.84% 5/18/2025 -
Joint Water
Improvement 3 5/17/2006 1,000,000 4.66% 5/17/2026 600,000
Joint Water
Improvement 4 10/5/2012 2,600,000 2% - 3% 10/5/2032 2,170,000
Joint Water
Improvement 5 6/12/2013 1,500,000 3%-3,25% 6/12/2033 1,340,000
Total Serial Bonds $ 4,600,000
- 37 -
The following is a summary of the maturity of total long-term indebtedness for
SCLIWC debt:
Year Principal Interest Total
Serial Bonds 2017 $ 290,000 $ 145,498 $ 435,498
2018 290,000 136,072 426,072
2019 295,000 126,572 421,572
2020 310,000 116,996 426,996
2021 310,000 106,846 416,846
2022-2033 3,105,000 544,616 3,649,616
Total Serial Bonds $ 4,600,000 $ 1,176,600 $ 5,776,600
NOTE 8 —UNRESTRICTED BALANCES
Of the $6,815,255 in unrestricted net position, $1,256,671 has been appropriated by
the Town for 2017 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 of retirement.
In addition, retiring employees can convert unused sick 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 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. For employees whose most recent date of hire is
prior to I/1/2015, the following percentages apply:
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%
- 38 -
For employees who were hired on or after I/1/2015, the following percentages apply:
Years of Commission
Service Contribution
30 and over 50.0%
25-29 35.0%
10-24 20.0%
less than 10 0.0%
For fiscal year 2016, the Town contributed $55,079 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 non-nal 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.
Annual required contribution $ 847,302
Interest on net OPEB obligation 119,009
Adjustment to annual required contribution 167,218)
Annual OPEB expense 799,093
Contributions made 55,079)
Increase in net OPEB obligation 744,014
Net OPEB obligation-beginning of year 4,327,608
Net OPEB obligation- end of year 5,071,622
The Town's annual OPEB cost, the percentage of annual OPEB cost contributed to
the plan, and the net OPEB obligation for fiscal year, 2008 through 2016 are as
follows:
Percentage of Net
Year Annual Annual OPEB OPEB
Ended OPEB Cost Cost Contributed —Obligation
12/31/2008 $ 349,422 7.70% 322,544
12/31/2009 $ 362,344 11.15% 644,482
12/31/2010 $ 375,221 9.16% $ 985,330
12/31/2011 $ 662,956 7.27% $ 1,600,116
12/31/2012 $ 681,399 7.94% $ 2,227,380
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
12/31/2016 $ 799,093 6.89% $ 5,071,622
- 39 -
Funded Status and Funding Progress - As of December 31, 2016 (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 $3,397,458 and the ratio of the unfunded actuarial accrued
liability to the covered payroll was 222.67%. See the Schedule of Funding Progress
on page 43 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 infonnation 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 tliat point. The methods and assumptions used include techniques that are
designed to reduce the effects of short-tens volatility in actuarial accrued liabilities
and the actuarial value of assets, consistent with the long-tenor perspective of the
calculations.
The following simplifying assumptions were made:
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--Lif.'e 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
was 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 calculation of the present value of total benefits to be paid.
- 40 -
Inflation rate—The expected long-term inflation assumption of 2.8 percent was based
on projected changes in the Consumer Price Index for Urban Wage Earners and
Clerical Workers (CPI-W) in The 2014 Annual Report of the Board of 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 2.75 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, 2016, was twenty three 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, 2016 there were five retirees spending down a cumulative balance of
$26,513 and thirteen employees who had reached retirement age with a cumulative
balance of $426,584. The total liability was $453,097 at December 31, 2016. The
Town calculates this liability separately from its OPER liability under GASB 45.
NOTE 10–POLLUTION REMEDIATION-CONTINGENT OBLIGATION
In 2009, a site commonly known as the Ithaca Area Wastewater Treatment Plant
(IAWTP), 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
Ithaca is liable for $80,000, payable over a ten year period. At December 31, 2016,
the remaining liability totaled $32,000.
NOTE 11 –RESTATEMENT OF NET POSITION
Certain prior period inaccuracies have resulted in the restatement of opening balances
for the matters related to the following previously reported items: sewer rents
receivables and unrestricted net position (business-type activities/sewer fund): The
restatements were caused by not accounting for additional outstanding sewer rents
owed to the Town.
The following is a summary of the restatements for 2015:
Increase in previously reported sewer rents $ 75,170
Total. increase in beginning of year unrestricted net position $ 75,170
The effect on the Town's previously issued 2015 financial statements is summarized
as follows:
- 41 -
Previously Increase
Reported (Decrease) Restated
Sewer rents receivable 419,841 $ 75,170 $ 495,011
Beginning unrestricted net position 4,896,049 75,170 4,971,219
NOTE 12 —TAX ABATEMENTS
Town of Ithaca negotiates property tax abatement agreements on an individual basis.
The Town of Ithaca has tax abatement agreements with five entities as of December
31, 2016:
Percentage of
Taxes Abated Amount of Taxes
during the Fiscal Abated during
Purpose Year the Fiscal Year
Acquire, construct and equip a new
residential campus for student housing. 36% $ 81,201
Purchase of housing development fund
company and continuation to conform
to requirements for low income housing. 26% 6,504
Acquiring title to acres of vacant land and
maintain and operate solely as a housing
project for persons of low income. 23% 3,594
Construction of new brewing facility,
welcome center and brew pub. 36% 3,660
Operate and maintain a facility for the
benefit of the citizens of Tompkins County,
New York and its practice of providing
Charitable Services 50% $ 51,633
Each agreement was negotiated under the Real Property Tax Law of the State of New
York allowing localities to abate property taxes for a variety of purposes, including
acquiring and constructing a new residential campus for student housing, maintaining
and operating housing for persons of low income, construction of a new brewing
facility, and maintaining and. operating a facility to benefit the citizens of Tompkins
County, New York. The taxes were originally based on the assessed value of the
property and through PILOT Agreements have been reduced to an agreed upon value
for the given year. As long as each individual agreement is met based on the
conditions set, taxes will continue to be abated each year.
The Town of Ithaca has not made any commitments as part of the agreements other
than to reduce taxes. The Town of Ithaca is not subject to any tax abatement
agreements entered into by other governmental agencies. The Town of Ithaca has
chosen to disclose information about its tax abatement agreements individually.
- 42 -
There was no established quantitative threshold of the total dollar amount of taxes
abated during the year.
NOTE 13 — SUBSEQUENT EVENTS
Subsequent events were evaluated through November 7, 2017, which is the date the
financial statements were available to be issued.
- 43 -
TOWN OF IT ACA
SCHEDULE OF FUNDING PROGRESS
FOR THE RETIREE HEALTH PLAN
December 31, 2016
Actuarial
Accrued
Actuarial Liability UAAL as a
Value (AAL) Unfunded Percentage
Actuarial of Simplified AAL Funded Covered of Covered
Fiscal Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll
Year Date (a) (b) (b-a) (a/b) ( C ) ((b-a) /c)
20 08 12/3-1/08 $ 3,302,265 $ 3,302,262 0.00% $ 2,935,300 112,50%
2009 12/31/08 3,302,265 3,302,262 0.00% 3,047,779 108.35%
2010 12/31/08 3,302,265 3,302,262 0.00% 3,127,364 105.59%
2011 12/31/11 6,513,090 6,513,090 0.00% 2,713,389 240.04%
2012 12/31/11 6,513,090 6,513,090 0.00% 3,023,321 215.43%
2013 12/31/11 6,513,090 6,513,090 0.00% 3,255,652 200.05%
2014 12/31/14 7,565,004 7,565,004 0.00% 2,941,028 257.22%
2015 12/31/14 7,565,004 7,565,004 0.00% 3,381,971 223.69%
2016 12/31/14 7,565,004 7,565,004 0.00% 3,397,458 222.67%
See independent auditor's report.
- 44 -
TOWN OF IT ACA
SCHEDULE OF REVENUES AND EXPENDITURES
COMPARED TO BUDGET
MAJOR FUNDS
For the Year Ended December 31, 2016
GENERAL HIGHWAY
Original Original
Budget Actual Budget Actual
REVENUES:
Real property taxes $ 2,600,000 $ 2,599,982 $ 1,500,000 $ 1,499,984
Real property tax items 48,000 62,941 - -
Nonproperty tax items 1,420,000 1,419,319 1,650,000 1,653,189
Departmental income 208,800 210,343 - -
Intergovernmental charges 58,500 113,493 10,000 20,806
Interest income 6,500 6,662 2,500 2,596
Rental income 27,350 29,716 - -
Licenses and permits 12,500 22,958 - -
Fines and forfeitures 280,000 273,619 - -
Sale of property and compensation for loss - 6,563 25,000 61,539
Local sources 15,000 72,465 - 2,534
State and federal sources 524,750 507,361 74,000 115,432
TOTAL REVENUES 5,201,400 5,325,422 3,261,500 3,356,080
OTHER SOURCES:
Interfund transfers 590,300 589,800 - -
Proceeds of obligations - - 300,000 -
Appropriated fund balance 299,869 - 251,319 -
TOTAL REVENUES AND OTHER SOURCES 6,091,569 5,915,222 3,812,819 3,356,080
EXPENDITURES:
General governmental support 1,769,531 1,626,243 71,800 65,422
Public safety 80,834 80,868 - -
Transportation 413,090 395,434 2,789,665 2,459,766
Culture and recreation 1,028,790 1,011,717 - -
Home and community services 1,305,970 1,102,559 - -
Employee benefits 1,278,400 1,341,246 562,650 468,029
TOTAL EXPENDITURES 5,876,615 5,558,067 3,424,115 2,993,217
OTHER USES:
Interfund transfers 214,954 214,754 388,704 388,604
TOTAL EXPENDITURES AND OTHER USES 6,091,569 5,772,821 3,812,819 3,381,821
EXCESS OF REVENUES
OVER EXPENDITURES - 142,401 - ( 25,741)
FUND BALANCE,beginning of year 4,526,355 4,526,355 1,825,219 1,825,219
FUND BALANCE, end of year $ 4,226,486 $ 4,668,756 $ 1,573,900 $ 1,799,478
See independent auditor's report.
FIRE
Original
Budget Actual
$ 3,550,000 $ 3,549,967
4,000 4,055
20,000 26,815
3,574,000 3,580,837
( 164,000) -
3,410,000 3,580,837
5,000 3,180
3,405,000 3,192,535
3,410,000 3,195,715
3,410,000 3,195,71.5
- 385,122
1,272,591 1,272,591
$ 1,436,591 $ 1,657,713
- 45 -
TOWN OFI ACA
SCHEDULE OF THE TOWN'S PROPORTIONATE SHARE OF THE NET PENSION
LIABILITY
For the Year Ended December 31, 2016
2016 2015
Proportion of the net pension liability(asset) 0.011% 0.011%
Proportionate share of the net pension liability(asset) $ 1,834,200 $ 387,122
Covered-employee payroll $ 3,256,757 $ 3,310,664
Proportionate share of the net pension liability(asset)
as a percentage of its covered-employee payroll 56.32% 11.69%
Plan fiduciary net position as a percentage of the total pension liability(asset) 90.7% 97,9%
See independent auditor's report.
- 46 -
TOWN F' IT' ACA
SCHEDULE OF THE TOWN'S PENSION CONTRIBUTIONS
For the Year Ended December 31, 2016
2016 2015
Contractually required contribution $ 513,481 $ 548,770
Contributions in relation to the contractually required contribution 513,481 548,770
Contribution deficiency(excess) $ - $ -
Covered-employee payroll $ 3,397,458 $ 3,381,971
Contributions as a percentage of covered-employee payroll 15.11% 16.23%
See independent auditor's report.
- 47 -
TOWN OF IT' ACA
CAPITAL PROJECTS FUND
DETAILED BALANCE SHEET
December 31, 2016
ASSETS
Active Proie ts
Sand Bank Park Christopher
Hanshaw Road Pine Tree Rd. Gateway Road Lane Circle
Walkway Ped ELjj&e_ Trail Reconstr. Water Main Water Main
ASSETS:
Cash in savings 100,679 69,958 $ 67,159 360,180 12,049 $ 4,315
Due Frorn other gov't - - 5,363 - - -
100,679 69,958 72,522 360,180 12,049 4,315
TOTAL ASSETS 100,679 $ 69,958 72,522 360,180 $ 12,049 $ 4,315
LIABILITIES AND FUND BALANCE
LIABILITIES:
Due to other funds - $ $ $ - $ 454,571 $ 5,010
Retainage 23,098 -
ToTAL LIABILITIES - - - - 477,669 5,010
FUND BALANCE:
Committed fund balance 100,679 69,958 72,522 360,180 - -
Unassigned fund balance - - - - ( 465,620) 695)
TOTAL FUND BALANCE 100,679 69,958 72,522 360,1.-819 ( 465,620) ...L mm 6951
TOTAL LIABILITIES
AND FUND EQUITY $ 100,679 $ 69,958 $ 72,522 $ 360,180 $ 12,049 $ 4,315
See independent auditor's report.
Active Closed
Sapsucker Trmnnoubwzg Winner Christopher Co6Jingkou 8upewukor B000eoa Marcy
Water Water Circle Circle Road Water Land Court
Main Tank Recoostr. Water Tank Water Main IankTotal�2 ��a���
� 4,961 $ 3,758 $ - $ $ - $ $ - $ 623.059
- 57,500 62,863
4961 61,258 - - - - 685922
4,961
$ 61,258 $ 685,922
$ 5,010 $ 768,044 $ - * - $ 1,224,635
_ _ - - - 23,098
5,0l0 760`844 - - - - 1`247,733
_ _ _ - - 603,339
- -
49) 62L,786)
- - - - -
561,811)
$ 685,922
===== ===== ===== ===== ===== =====
- 48 -
TOWN OF IT ACA
CAPITAL PROJECTS FUND
DETAILED REVENUES AND EXPENDITURES
For the Year Ended December 31, 2016
Active Projects
Sand Bank Park
Hanshaw Road Pine Tree Rd. Gateway Road Lane
Walkway Ped Bridge Trail Reconstruction Water Main
REVENUE:
Interest earnings 77 $ 53 $ 52 $ 274
Interfund transfers -
State and federal grants 5,363
Contributions -
TOTAL REVENUE $ 77 $ 53 $ 5,415 $ 274
EXPENDITURES:
Design $ - 6,704 $ $ -
General construction contract - - 464,216
Contract administration - 809
Row per - -
Testing - 595
Transfers to other funds - - -
TOTAL EXPENDITURES $ - 6,704 $ $ 465,620
See independent auditor's report.
Active Projects Closed Projects
Christopher Sapsucker Trumansburg Total for
Circle Water Water all Closed
Water Main Main Tank Projects Total —
138 594
11,026 11,026
- 5,363
57,500 - 57,500
57,500 11,164 74,483
$ - 6,704
749,516 77,996 1,291,728
395 49 4,729 - 5,982
300 230 530
1,811 - 2,406
- 336,210 336,210
695 49 756,286 414,206 1,643,560
- 49 -
TOWN OF ITHACA
INDEPENDENT AUDITOR'S REPORT ON
INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ONCOMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
YEAR ENDED DECEMBER 31, 2016
SCIARABBA
WAIXER&L c.,P0
CERTIFIED PUBLIC ACCOUN_rA NTS
B
USXNESS CONSULTAN1 S
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 of Ithaca
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 of Ithaca, as of and for the year ended December 31, 2016, and the
related notes to the financial statements, which collectively comprise the Town's basic financial
statements, and have issued our report thereon dated November 7, 2017.
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 of Ithaca'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 non-nal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the Town's financial statements will not be prevented,
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However,material weaknesses may exist that have not been identified.
410 East Upland Road
Ithaca,New York 14850
607-272-5550/607-273-6357 (Fax) www,s'A'C11P.Corr1
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 effectiveness of
the entity's internal control or on compliance. This report is an integral part of an audit
perforined in accordance with Government Auditing Standards in considering the Town's
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
Sciarabba Walker& Co., LLP
Ithaca, New York
November 7, 2017
- 52 -