TOWN OF EAST BRIDGEWATER, MASSACHUSETTS BASIC FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS WITH INDEPENDENT AUDITOR'S REPORT FOR THE

Transcription

1 BASIC FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS WITH INDEPENDENT AUDITOR'S REPORT FOR THE YEAR ENDING JUNE 30, 2009

2 BASIC FINANCIAL STATEMENTS AND MANAGEMENT~S DISCUSSION AND ANALYSIS FOR THE YEAR ENDING JUNE 30, 2009 TABLE OF CONTENTS Independent Auditor~ s Report Management~ s Discussion and Analysis 11 Basic Financial Statements Government-wide Financial Statements Statement of Net Assets Statement of Activities 2 Fund Financial Statements Balance Sheet - Governmental Funds 3 Statement of Revenues, Expenditures and Changes in Fund balance - Governmental Funds 4 Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds to Statement of Activities 5 Statement of Revenues, Expenditures, and changes in Fund Balance - Budgetary Basis - General Fund - Budget and Actual 6 Statement of Net Assets Propriety Funds 7 Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds 8 Statement of Cash Flows - Proprietary Funds 9 Statement of Net Assets - Fiduciary Funds 10 Statement of Changes in Net Assets - Fiduciary funds 11 Notes to Financial Statements 12 Required Supplementary Information 33

3 Malloy, Lynch, Bienvenue, LLP Certified Public Accountants & Advisors 99 Longwater Circle, Suite 200, Norwell, MA Telephone (781) Fax (781) Baystate Court, Brewster, MA Telephone (508) Fax (508) Internet: INDEPENDENT AUDITOR'S REPORT To the Honorable Board of Selectmen Town of East Bridgewater, Massachusetts 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 East Bridgewater, Massachusetts, as of and for the year ended, which collectively comprise the Town's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Town of East Bridgewater, Massachusetts' management. 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. W e beli~ve that our audit provides a reasonable basis for our opinions. 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 East Bridgewater, Massachusetts as of, and the respective changes in financial position and, where applicable, cash flows thereof and respective budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated February 5, 2010, on our consideration of the Town of East Bridgewater, Massachusetts' 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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis and schedule of funding progress and employer contributions, on the accompanying pages, is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. ~~\ j~1 {)~ LL-(l February 5, 2010

4 MANAGEMENT'S DISCUSSION AND ANALYSIS

5 Management's Discussion and Analysis As management of the Town of East Bridgewater, Massachusetts (the Town), we offer readers of the of the Town's financial statements this narrative overview and analysis of the financial activities of the Town for the year ended. Financial Highlights The assets of the Town exceeded its liabilities at the close of the most recent fiscal year by $40.1 million (net assets). Of this amount, approximately $8.0 million (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. The total cost of all Town services for fiscal year 2009 was $47.4 million. As of the end of the current fiscal year, unreserved fund balance for the general fund was $1,568,536 or approximately 4.1 % of general fund expenditures. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Town's basic financial statements. The Town's financial statelnents are comprised of four components: 1) government-wide financial statements, 2) fund financial statements, 3) budgetary comparison statements, and 4) notes to financial statements. Government-Wide Statements The government-wide financial statements are designed to provide readers with a broad overview of the Town's finances, in a manner similar to a private sector business. Statement of Net Assets: The Statement of Net Assets presents information on all of the Town's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Town is improving or deteriorating. The reader should consider other nonfinancial factors, such as the condition of the Town's infrastructure and changes to the property tax base, in order to assess the overall health of the Town. Statement of Activities: The Statement of Activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported for some items that will not result in cash flows until future fiscal periods (i.e. uncollected taxes, or earned but unused sick and vacation time). This statement also presents a comparison between direct expenses and program revenues for each function of the Town. Both of the government wide financial statements distinguish functions and activities of the Town that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions and activities that are intended to recover all or a significant portion of their costs through user fees or charges. The governmental activities of the Town include the broad functions of general government, public safety, education, public works, health and human services, culture and recreation, and the major services provided within each functional category. 11

6 Fund Financial Statements TOWN OF EAST BRIDGEWATER, MASSACHUSETTS Management's Discussion and Analysis A fund is a grouping of related accounts that is used to keep control over resources that have been allocated to specific projects or activities, the Town uses fund accounting to ensure and demonstrate compliance with several finance-related legal requirements. All of the Town funds can be divided into three categories: governmental, proprietary, and fiduciary funds. Governmental Funds: Most of the basic services provided by the Town are financed through governmental funds. Governmental funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. However, the governmental fund financial statements focus on near term inflows and outflows of resources to be spent. The focus is also on the balances left at the end of the fiscal year available for spending. This information is useful in evaluating the Town's near term financing requirements. This approach is the modified accrual basis of accounting, which uses the flow of current financial resources measurement focus. Such statements provide a detailed short-term view of the Town's finances that assist in determining whether there will be adequate financial resources available to meet current needs. Because the focus of governmental funds is narrower than that of the government wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. This comparison will assist the reader in understanding the long-term impact of the government's near tenn financing decisions. The governmental funds balance sheet and the governmental funds statement of revenues, expenditures and changes in fund balances provide reconciliations to facilitate the comparison. The reconciliation is presented on the page immediately following the governmental funds financial statements. The Town maintains several governmental funds. Of the funds three (3) are considered major funds (general fund, stabilization fund, and septic loan repayment fund) and are presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances. The remaining governmental funds are aggregated and shown as other governmental funds. The basic governmental fund financial statements can be found on the accompanying pages of this report. Proprietary Funds: Proprietary funds focus on the determination of operating income, changes in net assets, financial position, and cash flows. These funds measure economic resources using the full accrual basis of accounting. The Town maintains two types of proprietary funds. Enterprise funds are used to report activities that the government operates more like a business. These activities become the government's business-type activities in the governmentwide financial statements. The Town uses enterprise funds to account for its water and solid waste activities. Fiduciary Funds: Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not included in the government-wide financial statements because the resources of these funds are not available to support the Town's functions and activities. The full accrual basis of accounting is used for fiduciary funds. The fiduciary fund financial statements provide separate information for private purpose trust funds and agency funds. The fiduciary fund financial statements can be found on the accompanying pages of this report. iii

7 Management's Discussion and Analysis Notes to the Financial Statements: The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found the accompanying pages of this report. Government Wide Financial analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the Town of East Bridgewater, assets exceeded liabilities by $30.6 and $9.5 million for the governmental and business-type activities, respectively at the close of the most recent fiscal year as demonstrated in the following tables. FY2009 FY 2008 Governmental Governmental Percent Activities Activities Change Current assets $ 20,847,893 $ 21,729, % Capital assets 30,375,709 30,027, % Total assets $ 51,223,602 $ 51,756,789 -].0% Cun'ent liabilities $ 5,172,217 $ 3,876, % Long-tenn liabilities 15,473,097 14,824, % Total liabilities 20,645,314 18,701, % Net assets: Capital assets, net of related debt 18,798,286 17,891, % Restricted 5,401,021 6,199, % Unrestricted 6,378,981 8,964, % Total net assets $ 30,578,288 $ 33,055, % Included within the governmental activity current assets, unrelated to capital assets, are $4,564,921 in cash, $6,097,013 in investments, $10,139,436 in receivables, net of allowances for uncollectible accounts and $46,523 due from agency funds. Receivables consist primarily of approximately $1.4 million of sewer betterment, $3.7 million of property taxes, excise, charges for services and other, and $5.0 million of intergovernmental receivables. Intergovernmental receivables include state highway construction grants, veteran benefit receivable, school building assistance reimbursement and other federal and state town and school grants. Governmental activity long-term liabilities include $13.0 million in general obligation bonds, of which approximately $1.6 million has been classified as current because it is due within fiscal year Long-term liabilities also include $1.1 million for compensated absences, $2.3 million for other post employment benefits, $0.6 million for landfill closure and monitoring liability, and $0.1 million for capital leases. IV

8 Management's Discussion and Analysis FY2009 FY 2008 Business-type Business-type Percent Activities Activities Change CUlTent assets $ 5,608,571 $ 12,849, % Capital assets 17,096,999 7,366, % Total assets $ 22,705,570 $ 20,215, % Current liabilities $ 3,640,423 $ 867, % Long-tenn liabilities 9,569,710 10,028, % Total liabilities 13,210,133 10,896, % Net assets: Capital assets, net of related debt 7,880,515 4,955, % Unrestricted 1,614,922 4,364, % Total net assets $ 9,495,437 $ 9,319, % The largest portion of the Town's total net assets $26.7 million (66.6%) reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, and infrastructure); less any related debt used to acquire those assets that is still outstanding. The Town uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the Town investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the Town's net assets, $5.4 million (13.5%) represents resources that are subject to restrictions placed on how they may be used. The remaining balance of unrestricted net assets, which may be used to meet the government's ongoing obligations to citizens and creditors, is $8.0 million (19.9%) of total net assets. At the end of the current fiscal year, the Town is able to report positive balances in all categories of net assets. The Town's governmental activities' net assets decreased by $2,477,275 and businesstype activities' net assets increased by $175,781 during fiscal A summary of revenues and major functional expenditures is presented below. Revenues: Property taxes represent nearly 45% of the Town's governmental activities revenue. Property tax growth represents a combination of an annual increase, allowed in the levy under Proposition 2 12, and new growth. Operating grants and contributions make up the second largest governmental activities' revenue representing nearly 39% of the Town's total revenue. The largest proportion of this revenue, nearly $11.9 million represents Chapter 70 school aid and other educational grants received from the Commonwealth and federal government. Charges for services represent approximately 5.6% of the Town's governmental activities' total revenue. The Town's governmental activities include human services charges for services (septic betterments) of approximately $291,000, public safety charges for services (ambulance) of $726,000, education charges for services of $1,134,000 and various other charges for services of $232,000. v

9 Management's Discussion and Analysis Charges for services for the Town's business-type activities of $2,766,873, represent 6.1 % of total Town revenue. Charges for services related to the water fund and solid waste fund are $2,277,068 and $489,805 respectively. Expenses: Increases in general government expenses resulted from the other post employment benefit obligation recorded in the current fiscal year ($2,310,452). Employee benefit costs rose approximately 6.0% due to rising health insurance costs. Business-type activities' operational expenses increased approximately 14.9%. The increase is mainly attributable to the increased depreciation expense related to the water filtration project. Governmental activities: Summary of Schedule of Governmental Activities For the Years Ended and 2008 June 30~ 2009 June 30~ 2008 % Change Revenues: Program Revenues: Charges for services $ 2,383,475 $ 2,577, % Operating grants and contributions 16,591,171 15,771, % Capital grants and contributions 285, , % Total program revenues 19,259,718 18,909, % General Revenues: Property taxes levied 19,172,468 18,719,]42 2.4% Excise taxes 1,330,622 1,481, % Penalties and interest on taxes 172, , % Grants and contributions not restricted 1,736,690 2,076, % Investment income 227, , % Miscellaneous 318, % Total general revenues 22,958,182 23,230, % Total Revenues 42,217,900 42,139, % Expenses: General government 14,002,818 11,303, % Public safety 4,710,544 4,486, % Education 21,529,350 20,328, % Public works 2,403,917 2,409, % Health and human services 600, , % Culture and recreation 631, ,65] 26.6% Interest 498, , % State and county charges 268, , % Total Expenses 44,645,943 40,362, % Transfers: Transfer to water enterplise fund (50,000) (3,298) % Transfer from fiduciary fund 23, % Transfer from solid waste fund % Changes in net assets $ (2,477,275) % vi

10 Business-type activities: TOWN OF EAST BRIDGEW ATER, MASSACHUSETTS Managenlent's Discussion and Analysis FY2009 FY 2008 Business-type Business-type Activities Activities % Change Operating revenues: Charge for services/departmental and other $ 2,766,873 $ 3,030, % Total operating revenues 2,766,873 3,030, % Expenses: Salaries and wages 526, , % Operating expenses 1,485,829 1,364, % Depreciation 469, , % Total operating expenses 2,481,842 2,159, % Operating Income (Loss) 285, , % Non-operating income (expense) Investment income 71, , % Interest expense (230,413) (113,468) 103.1% Total non-operating revenue (expense), net (158,482) 9, % Transfers: Transfer from special revenue fund 50, % Transfer to general fund (768) 3, % Changes in net assets $ 175,781 $ 884, % Financial Analysis of the Government's Fund Financial Statements The focus of the Town's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Town's financial requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of and 2008, the Town's governmental funds reported combined ending fund balances of $7,382,557 and $9,066,766, a decrease of $1,684,209 and an increase of $1,245,370 in 2009 and 2008 respectively. As of and 2008, approximately $6.7 and $8.6 million constitutes unreserved fund balance, of this amount $1,386,200 and $1,999,605 has been appropriated for the next fiscal year, respectively. The remainder of the fund balance is reserved to indicate it is not available for new spending because it has already been committed to liquidate contracts; continued appropriations for capital outlay and improvement purposes; noncurrent loans receivable and non expendable permanent fund balances. The general fund is the chief operating fund of the Town. At and 2008, unreserved fund balance of the general fund is $1,568,536 and $2,836,618 respectively. As a measure of the general fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 4.1 % and 7.5% of total general fund expenditures, while total fund balance represents 5.8% and 8.7% at and 2008, respectively. Vll

11 Management's Discussion and Analysis It is essential that governments maintain adequate levels of fund balance to mitigate current and future risks (e. g. revenue shortfalls and unanticipated expenditures) and to ensure stable tax rates. During 2002, the Government Finance Officers Association (GFOA) issued a recommendation that at a minilnum, general purpose governments, regardless of size maintain unreserved fund balance in their general fund of no less than five to fifteen percent of regular general fund operating revenues, or no less than one to two months' of regular general fund operating expenditures. As of and 2008, the Town's unreserved fund balance is 4.1 % and 7.5% of the general fund operating revenues. The total general fund balance of the Town decreased by $1,047,429 or 31.8% during 2009 and increased by $17,605 or 0.5% during For 2009, general fund expenditures increased approxjmately 2.2% and revenues increased approximately 0.6%. Net transfers for 2009 resulted in a net transfer out of $336,125. Net transfers for 2008 resulted in a net transfer in from other funds of $146,723. Property tax growth represents a combination of the annual increase allowed in the levy by proposition 2 Yj and new growth. The Town's total levy grew 4.6% and 4.9% in 2009 and 2008 (including new growth), not maximizing the allowable under proposition General Fund Budgetary Highlights The difference between the original budget of $37,596,097 and the final budget of $37,050,084 is due to approximately $286,000 of additional appropriations at special Town meetings, less approximately $680,000 in encumbrances being carried over to the subsequent fiscal year and $152,000 of appropriations reclassified to the septic loan fund. The Town incun"ed snow and ice deficits in the amount of approximately $600,000, contributing to the over expenditure in public works appropriations. This amount is included as a general fund unreserved fund balance to be raised on the fiscal 2010 tax rate recapitulation sheet. Capital Asset and Debt Administration Governmental Activities Capital Assets: The Town's investment in capital assets for governmental activities as of and 2008 amounts to $30,375,709 and $30,027,081 which is net of accumulated depreciation of $39,532,782 and $38,158,725. The investment in capital assets includes land; buildings; improvements; machinery and equipment and infrastructure. The table below represents a summary of the Town's capital assets by category (in millions): Governmental Activities Land $ 4.9 $ 4.9 Works of art and historical treasurers Buildings and improvements Machinery and equipment Infrastructure $ 30.4 $ 30.0 Vll1

12 Management's Discussion and Analysis Capital asset events during 2009 include the following: Improvements to town roads Purchase of a fire departlnent vehicles Purchase of a police cruiser School information technology and security improvements Capital asset events during 2008 include the following: Improvements to town roads Purchase of a police cruiser Purchase of an ambulance Storm water remediation Business-type Activities Capital Assets: The Town's investment in capital assets for business-type activities as of and 2008 amounts to $17,096,999 and $7,366,631 which is net of accumulated depreciation of $7,709,921 and $7,240,724. The investment in capital assets includes land; buildings; improvements; machinery and equipment and infrastructure. The table below represents a summary of the Town's business-type activities capital assets by category (in millions): Land Buildings and improvements Machinery and equipment Infrastructure (mains, wells, tanks, meters, valves) Business-type Activities $ 0.19 $ $ $ 7.37 Capital asset events during 2009 include the following: Construction of water filtration system Capital asset events during 2008 include the following: Construction of water filtration system Long Term Debt Governmental Activities At and 2008, the Town's governmental activities had total bonded debt outstanding of $13,005,240 and $14,682,639, respectively. This debt is a general obligation of the Town's governmental activities. IX

13 Management's Discussion and Analysis The Town's governmental activities had short-term notes of$i,431,000 at June 30,2009 and $200,000 at June 30, Current year short-term debt consisted of borrowing $1,231,000 for general obligations. Business-type Activities At and 2008, the Town's business-type activities had total bonded debt outstanding of$9,991,351 and $10,436,653, respectively. This debt is supported by water rates. The Town's business-type activities had a short-term note of $2,948,560 at June 30,2009 and $200,000 at June 30, Current year short-term debt consisted of borrowing related to the water filtration proj ect. A2. The Town of East Bridgewater maintains bond rating with Moody's Investor Service of Economic Factors and Next Year's Budgets and Rates The Town has increased its property tax levy by 4.250/0 which includes new growth. The operating budget decreased 0.2% over the FY 09 budget. Contacting the Town's Financial Management This financial report is designed to provide our citizens, taxpayers, customers and creditors with a general overview of the Town's finances and to show the Town's accountability for the money it receives. Questions concerning any information provided in this report or requests for additional information should be addressed to Town of East Bridgewater, Attn: Town Administrator, 175 Central Street, East Bridgewater, MA x

14 BASIC FINANCIAL STATEMENTS

15 Statement of Net Assets Primary Government Governmental Business-tYQe Activities Activities ASSETS Cash and cash equivalents $ 4,564,921 $ 1,422,551 Investments 6,097,013 2,163,657 Receivables 10,139,436 1,979,462 Inventories 42,901 Due from agency funds 46,523 Capital assets, net of accumulated depreciation 30,375,709 17,096,999 Total assets $ 51,223,602 $ 22,705,570 Total $ 5,987,472 8,260,670 12,118,898 42,901 46,523 47,472,708 $ 73,929,172 LIABILITIES Accounts payable, wages and other current liabilities $ 1,541,745 $ 120,857 Provision for refund of paid taxes 409,871 Accrued interest 112, ,025 Notes payable 1,431,000 2,948,560 Noncurrent liabilities Due within one year 1,677, ,981 Due in more than one year 15,473,097 9,569,710 Tota11iabilities 20,645,314 13,210,133 $ 1,662, , ,131 4,379,560 2,145,476 25,042,807 33,855,447 NET ASSETS Invested in capital assets, net of related debt 18,798,286 7,880,515 Restricted 5,401,021 Unrestricted 6,378,981 1,614,922 Total net assets 30,578,288 9,495,437 Total liabilities and net assets $ 51,223,602 $ 22,705,570 26,678,801 5,401,021 7,993,903 40,073,725 $ 73,929,172 The accompanying notes are an integral part of these financial statements. 1

16 Statement of Activities For the Year Ended Program Revenues Net (Expense) Revenue and Changes in Net Assets Operating Capital Grants Primary Government Charges for Grants and and Governmental Business-type Functions/Programs EX,Qenses Services Contributions Contributions Activities Activities Total Primary government Governmental activities General government $ 14,002,818 $ 195,120 $ 3,948,596 $ $ (9,859,102) $ $ (9,859,102) Public safety 4,710, , ,798 (3,746,407) (3,746,407) Education 21,529,350 1,134,312 11,940,010 (8,455,028) (8,455,028) Public works 2,403,917 2, ,072 (2,116,269) (2,116,269) Health and human services 600, ,261 52,505 (257,052) (257,052) Culture and recreation 631,455 33,867 32,147 (565,441) (565,441) Interest 498, ,115 (118,713) (118,713) State and county charges 268,213 (268,213) (268,213) Total governmental activities 44,645,943 2,383,475 16,591, ,072 (25,386,225) (25,386,225) Business-type activities Water 1,842,419 2,277, , ,649 Solid waste 869, ,805 (380,031) (380,031) Total business-type 2,712,255 2,766,873 54,618 54,618 Total primary government $ 47,358,198 $ 5,150,348 $ 16,591,171 $ 285,072 (25,386,225) 54,618 (25,331,607) General revenues Property taxes, net of allowances for uncollectibles 19,172,468 19,172,468 Excise taxes 1,330,622 1,330,622 Penalties and interest on taxes 172, ,112 Grants and contributions not restricted to specific programs 1,736,690 1,736,690 Investment income 227,909 71, ,840 Miscellaneous 318, ,381 Total general revenues and special items 22,958,182 71,931 23,030,113 Transfers (49,232) 49,232 Change in net assets (2,477,275) 175,781 (2,350,726) Net assets - beginning of year 33,055,563 9,319,656 42,375,219 Net assets - end of year $ 30,578,288 $ 9,495,437 $ 40,073,725 The accompanying notes are an 2 part of these financial statements.

17 Balance Sheet - Governmental Funds SeRtic Loan General Stabilization ReRayments ASSETS Cash and cash equivalents $ 1,149,592 $ $ 1,543,923 $ Investments 2,668,639 2,602,381 Receivables 7,370,262 1,594,655 Due from other funds 46,523 Total assets $11,235,016 $ 2,602,381 $ 3,138,578 $ Non-major Governmental Funds 1,871, ,993 1,308,127 4,005,526 Total Governmental Funds $ 4,564,921 6,097,013 10,273,044 46,523 $ 20,981,501 LIABILITIES Accounts payable, wages, and other current liabilities $ 1,263,405 $ $ $ Provision for refund of paid taxes 409,871 Deferred revenue 7,313,546 1,594,655 Notes payable 200,000 Total liabilities 8,986,822 1,794, ,340 1,308,127 1,231,000 2,817,467 $ 1,541, ,871 10,216,328 1,431,000 13,598,944 FUND BALANCES Reserved for: Encumbrances and continued appropriations 679,658 Unreserved General fund 1,568,536 Special revenue funds 2,602,381 1,343,923 Capital projects funds Permanent funds Total fund balances 2,248,194 2,602,381 1,343,923 Total liabilities and fund balances $11,235,016 $ 2,602,381 $ 3,138,578 $ 1,781,723 (821,875) 228,211 1,188,059 4,005, ,658 1,568,536 5,728,027 (821,875) 228,211 7,382,557 $ 20,981,501 Amounts reported for governmental activities in the statement of net assets are different because: Total fund balances of governmental funds Capital assets used in governmental activities are not financial resources and not reported in funds. The cost of the assets is $69,908,491, net accumulated depreciation of$39,532,782. Accounts receivable are not available to pay for current-period expenditures and are deferred in funds, net of uncollectibles Long-term liabilities, net of deferred costs, are not due and payable in the CUITent period and are not included in funds. Reporting ofliabilities on full accrual basis requires associated interest, net of subsidies, be accrued. Net assets of governmental activities $ 7,382,557 30,375,709 10,082,720 (17,150,592) (112,106) $ 30,578,288 The accompanying notes are an integral part of these financial statements. 3

18 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended Sentic Loan General Stabilization RenaY!Qents Revenues Properiy taxes $19,028,948 $ $ Excise taxes 1,377,785 Licenses and permits 196,307 Penalties and interest 172,112 Investment income 131,834 34,899 Charges for services 390,000 Fees and fines 125,434 Deparimental and other 510,771 Intergovernmental Total revenues 34, ,000 Expenditures Current: General government 11,150,337 Public safety 4,388,750 Education 18,182,861 Public works 1,735,861 Human services 345, ,968 Culture and recreation 464,954 State and county assessments 268,213 Debt Service: Principal 1,525, ,069 Interest and other charges Total Expenditures 366,037 Revenues over (under) expenditures (711,304) 34,899 23,963 Other financing sources (uses) Transfers in from other funds 402,875 Transfers out to other funds (80,094) Total other financing sources and (uses) (80,094) Revenues and other financing sources (under) expenditures and other financing uses (1,047,429) 34,899 (56,131) Fund balances, begilli1ing of year 3,295,623 2,567,482 1,400,054 Fund balances, end of year $ 2,602,381 $ 1,343,923 Other Governmental Funds Total Governmental Funds $ $ 19,028,948 1,377, , ,112 61, ,909 1,553,552 1,943,552 10, , , ,770 2,776,235 19,077,973 42,792,733 66,564 11,216, ,211 5,350,961 3,516,915 21,699, ,721 2,532,582 41, , , , ,213 1,677, ,395 44,427,710 (1,634,977) 739,000 1,141,875 (372,013) (1,191,107) (49,232) (615,548) (1,684,209) 9,066,766 $ 1,188,059 $ 7,382,557 The accompanying notes are an integral part of these financial statements. 4

19 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds to the Statement of Activities For the Year Ended Revenues and other financing sources expenditures and other financing uses - governmental funds Governmental funds report outlays for capital assets as expenditures, however, the cost of those assets is allocated over the estimated useful lives and reported as deprecation expense in the Statement of Activities. Capital outlays during the fiscal year Depreciation recorded for the fiscal year $ (1,684,209) 2,266,756 (1,918,128) Revenues are recognized on the modified accrual basis of accounting in the fund financial statements, but are recognized on the accrual basis of accounting in the government-wide financial statements. Net change in deferred revenue Net change in allowance for uncollectible accounts (615,085) 40,252 The issuance and repayment of long-term debt are recorded as other financing sources or uses in the fund financial statements, but have no effect on net assets in the government-wide financial statements. Also, governmental funds report issuance costs, premiums, discounts, and similar items as expenditures when paid, whereas these amounts are deferred and amortized on a government-wide basis. Principal and other payments on long-term debt The fund financial statements record interest on long-term debt when due and revenue from related subsidies when received. The government-wide financial statements report interest on long-term debt and revenue on subsidies when incurred. Accrued interest expense Certain liabilities are not funded through the use of current financial resources and, therefore, are not reported in the fund financial statements, however, these liabilities are reported in the government-wide financial statements. The net change in these liabilities is reflected as an expense in the Statement of Activities. Changes in liabilities is reflected as an expense in the Statement of Activities. Changes in liabilities are as follows: Other Post Employment Benefits Capital Leases Compensated absences Landfill closure and monitoring Change in net assets of governmental activities 1,677,399 (4,434) (2,310,452) (123,790) 171,161 23,255 $ (2,477,275) The accompanying notes are an integral part of these financial statements. 5

20 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budgetary Basis General Fund - Budget and Actual For the Year Ended Original Final Budget Budget Actual Revenues Property Taxes $ 18,667,343 $ 18,667,343 $ 18,846,063 Excise Taxes 1,350,000 1,350,000 1,377,785 Licenses and permits 200, , ,307 Penalties and interest 160, , ,112 Investment interest 300, , ,834 Fees and fines 156, , ,434 Departmental and other 176, ,500 5lO,771 Intergovernmental 13,775,259 13,775,259 12,534,482 Total revenues 34,785,319 34,785,319 33,894,788 Expenditures General government 9,238,692 9,158,165 7,842,471 Public safety 4,402,647 4,440,935 4,388,750 Education 18,543,106 18,510,767 ]8,182,861 Public works 1,191,253 1,]64,685 1,735,861 Human services 675, , ,532 Culture and recreation 460, , ,954 State and county assessments 224, , ,213 Debt Service 2,859,425 2,699,675 2,597,594 Total Expenditures 37,596,097 37,050,084 35,826,236 Revenues over (under) expenditures (2,810,778) (2,264,765) (1,931,448) Other financing sources (uses) Transfers in from other funds 1,450,328 1,433,973 1,440,134 Transfers out to other funds (739,000) (739,000) (739,000) Total other financing sources 711, , ,134 Revenues and other financing sources over (under) expenditures and other financing uses (2,099,450) (1,569,792) (1,230,314) Variance with Final Budget Positive (Negative) $ 178,720 27,785 (3,693) 12,112 (168,383) (30,566) 334,271 (1,240,777) (890,531) 1,315,694 52, ,906 (571,176) 36,228 4,777 (43,847) 102,081 1,223, ,317 (6,161) (6,161) $ 327,156 Fund balance, beginning of year 3,728,725 Fund balances, end of year $ 2,498,411 Other budget items Free cash appropriations $ 1,424,605 $ 1,564,605 Funding from overlay 575, ,000 Carryover encumbrances 459,005 (220,653) Funding of prior year deficits (359,160) (359,160) Total other budget items 2,099,450 1,569,792 Net budget $ $ The accompanying notes are an integral part of these financial statements. 6

21 Statement of Net Assets - Proprietary Funds June 30~ 2009 ASSETS Water Business-Type Activities Solid Waste Cash and cash equivalents $ 1~309~353 $ 113~198 Investments 819,901 1,343,756 Receivables, net of allowances for uncollectibles 1,855, ,495 Inventory 42,901 Capital assets, net of accumulated depreciation 17,086,799 10,200 Total assets $ 21,072,020 $ 1,633~550 $ $ Totals 1,422~551 2,163,657 1,979,462 42,901 17,096,999 22,705,570 LIABILITIES Accounts payable, wages and other current liabilities $ 59,720 $ 61,137 Accrued interest 103,025 Notes payable 2,948,560 Noncurrent liabilities: Due within one year 467,981 Due in more than one year 9,568,097 1,613 T otalliabilities 13,147,383 62,750 $ 120, ,025 2,948, ,981 9,569,7lO 13,210,133 NET ASSETS Invested in capital assets, net of related debt 7,870,315 10,200 Unrestricted 54,322 1,560,600 Total net assets 7,924,637 1,570,800 T otal1iabilities and net assets $ 21,072,020 $ 1,633,550 $ 7,880,515 1,614,922 9,495,437 22,705,570 The accompanying notes are an integral part of these financial statements. 7

22 Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds Business-Type Activities Water Solid Waste Operating revenues Charges for services, departmental and other $ 2,277,068 $ 489,805 Total operating revenues 2,277, ,805 $ Totals 2,766,873 2,766,873 Operating expenses Salaries and wages 460,910 65,906 Expenses 683, ,230 Depreciation 467,497 1,700 Total operating expenses 1,612, ,836 Operating income (loss) 665,062 (380,031) 526,816 1,485, ,197 2,481, ,031 Non operating revenues (expenses) Interest income 24,078 47,853 Interest expense (230,413) Total non-operating revenue (expenses), net (206,335) 47,853 71,931 (230,413) (158,482) Transfers Transfers in from other funds 50,000 Transfers out to other funds (768) Total transfers 50,000 (768) Change in net assets 508,727 (332,946) 50,000 (768) 49, ,781 Net assets at beginning of year 7,415,910 1,903,746 Net assets at end of year $ 7,924,637 $ 1,570,800 $ 9,319,656 9,495,437 The accompanying notes are an integral part of these financial statements. 8

23 Statement of Cash Flows - Proprietary Funds For the Year Ended Cash flows from operating activities Receipts from customers and users Payments to vendors, including fringe benefits Payments to employees Net cash provided by (used for) operating activities Business-Type Activities Total Solid Waste Enterprise $ 2,221,840 $ 490,797 (688,395) (824,750) (453,291) (64,293) 1,080,154 (398,246) $ 2,712,637 (1,5l3,145) (517,584) 681,908 Cash flows from capital and related financing activities Principal payments on bonds and notes Proceeds from issuance of debt Construction of infrastructure, net Transfer in from Road Maintenance Fund Interest expense Net cash used for capital and related financing activities Cash flows from investing activities Investing activities, net Net cash used for investing activities (445,302) 9,999,005 (10,199,565) 50,000 (225,363) (821,225) (795,823) 400,823 (795,823) 400,823 (445,302) 9,999,005 (10,199,565) 50,000 (225,363) (821,225) (395,000) (395,000) Net change in cash and cash equivalents Balances at the beginning of year Balances at the end of year (536,894) 2,577 1,846, ,621 $ 1,309,353 $ 113,198 (534,317) 1,956,868 $ 1,422,551 Reconciliation of operating income to net cash provided by operating activities Operating (loss) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization Changes in assets and liabilities: User fees receivables, net of allowance for collectibles Inventory Accounts payable and other liabilities Total adjustments Net cash provided by (used for) operating activities $ 665,062 $ (380,031) 467,497 1,700 (55,228) 992 (23,796) 2,823 2, ,092 (18,215) $ 1,080,154 $ (398,246) $ 285, ,197 (54,236) (23,796) 5, ,877 $ 681,908 The accompanying notes are an integral part of these financial statements. 9

24 Statelnent of Net Assets - Fiduciary Funds Private Purpose Trust Fund ASSETS Cash and cash equivalents $ 364,753 Investments Receivables Total assets $ 364,753 Agency Accounts $ 1, ,267 46,523 $ 966,299 LIABILITIES Guaranteed deposits $ Due to General Fund Due to student groups Total liabilities $ 918,267 46,523 1, ,299 NET ASSETS Held in trust 364,753 Total liabilities and net assets $ 364,753 $ 966,299 The accompanying notes are an integral part of these financial statements. 10

25 Statement of Changes in Net Assets - Fiduciary Funds For the Year Ended Additions Contributions and donations $ Interest and dividends Total additions Private Purpose Trust Funds 9,625 5,638 15,263 Deductions Scholarships and awards Total deductions Change in net assets Net assets at beginning of year Net assets at end of year $ 16,750 16,750 (1,487) 366, ,753 The accompanying notes are an integral part of these financial statements. 11

26 NOTES TO FINANCIAL STATEMENTS

27 Note 1. Organization and Reporting Entity A. Organization TOWN OF EAST BRIDGEWATER, MASSACHUSETTS Notes to Financial Statements The Town of East Bridgewater, Massachusetts (the "Town"), was incorporated in The Town operates under a Town Meeting form of government. The Town's major operations include police and fire protection, education, parks, library and recreation, public works and general administrative services. In addition, the Town owns and operates a water system and solid waste disposal and recycling services. B. Reporting Entity The accompanying financial statements present the Town of East Bridgewater (the primary governn1ent) and its component units. Component units are included in the reporting entity if their operational and financial relationships with the Town are significant. Pursuant to these criteria, the Town of East Bridgewater did not identify any component units requiring inclusion in the accompanying financial statements. Joint Ventures The Town has entered into joint ventures with other municipalities to pool resources and share the costs, risks, and rewards of providing goods or services to venture participants directly, or for the benefit of the general public or specific recipients. The following is a list of the Town's joint ventures, their purpose, and the annual assessment/payments made by the Town in Financial statements may be obtained from each the joint ventures by contacting each of them directly. The Town does not have an equity interest in any j oint venture. Joint venture and address Southeastern Regional School District 250 Foundry Street, Easton, MA Massachusetts Bay Transit Authority 45 High Street, Boston, MA Related Organizations Purpose To provide vocational education To provide regional transportation 2009 Assessment $ 515,335 $ 88,353 Board members for the East Bridgewater Housing Authority are elected by Town voters; thus, the Town has no accountability for these organizations. Note 2. Summary of Significant Accounting Policies A. Basis of Presentation The Town's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements (Statements and Interpretations). Governments are also required to follow the pronouncements of the Financial Accounting Standards Board (FASB) issued through November 30, 1989 (when applicable) that do not conflict with or contradict GASB pronouncements. Although the Town has the option to apply F ASB pronouncements issued after that date to its business-type activities and enterprise funds, the Town has chosen not to do so. The more significant accounting policies established in GAAP and used by the Town is discussed below. 12

28 Notes to Financial Statements The Town's basic financial statements include both government-wide (reporting the Town as a whole) and fund financial statements (reporting the Town's funds). Both the government-wide and fund financial statements categorize primary activities as either governmental or business type. The Town's police and fire protection, parks, library and recreation, public works, educational, and general administrative services are classified as governmental activities. The Town's water and solid waste - disposal and recycling services are classified as business-type activities. Government-wide Statements In the government-wide Statement of Net Assets, both the governmental and business-type activities columns are presented on a consolidated basis by column and are reported on a full accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long-term debt and obligations. The Town's net assets are reported in three parts - invested in capital assets (net of related debt); restricted net assets, and unrestricted net assets. The Town first utilizes restricted resources to finance qualifying activities. The government-wide Statement of Activities reports both the gross and net cost of each of the Town's functions and business-type activities. Gross expenses (including depreciation) are reduced on the Statement of Activities by related program revenues, operating and capital grants. Program revenues must be directly associated with the function or a business-type activity. Operating grants include operatingspecific and discretionary (either operating or capital) grants while the capital grants column reflects capital-specific grants. The net costs (by function or business-type activity) are norn1ally covered by general revenue. Certain costs, such as pension benefits, property, liability and health insurance, state assessments, among others are not allocated among the Town's functions and are included in general government expenses in the Statement of Activities. The government-wide focus is more on the sustainability of the Town as an entity and the change in the Town's net assets resulting from the current year's activities. Fund Financial Statements The financial transactions of the Town are reported in individual funds in the fund financial statements. Each fund is accounted for by providing a separate set of self-balancing accounts that comprises its assets, liabilities, reserves, fund equity, revenues and expenditures/expenses. The various funds are reported by generic classification within the financial staten1ents. The following fund types are used by the Town: Governmental Funds: The focus of the governmental funds' measurement (in the fund statements) is upon determination of financial position and changes in financial position (sources, uses, and balances of financial resources) rather than upon net income. The following is a description of the governn1ental funds of the Town: Major Funds General fund is the primary operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in another fund. 13

29 Notes to Financial Statelnents Stabilization fund is a special revenue fund used to account for the accumulation of resources to provide general and/or capital reserves, and planning and development's ongoing and future operations. Septic loan repayment fund is a special revenue fund used to account for the repaylnents of Title V septic loans issued to residents for colnmunity septic management. Nomnajor govermnental funds consist of other special revenue, capital projects and pern1anent funds that are aggregated and presented in the nonmajor governmental funds colunm of the governmental funds financial statements. The following describes the general use of these fund types: Special revenue funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. Debt service funds are used to account for the accumulation of funds for the periodic payment of principal and interest on general long-term debt. Cunently, the Town does not utilize a debt service fund. Capital proj ects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by businesstype/proprietary funds). Permanent funds are used to account for financial resources that are legally restricted to the extent that only ean1ings, not principal, may be used for purposes that support the governmental progran1s. Proprietary Funds: The focus of proprietary fund measurement is upon detelmination of operating income, changes in net assets, financial position, and cash flows. The generally accepted accounting principles applicable are those similar to businesses in the private sector. The following is a description of the proprietary funds of the Town: Enterprise funds are required to be used to account for operations for which a fee is charged to external users for goods or services and the activity is financed with debt that is solely secured by a pledge of the net revenues, has third party requirements that the cost of providing services, including capital costs, be recovered with fees and charges or establishes fees and charges based on a pricing policy designed to recover similar costs. These fees and charges are considered operating revenue. Internal service funds are used to account for the financing of goods or services provided by an activity to other departments, funds or component units of the Town on a cost-reimbursement basis. Cunently, the Town does not utilize internal service funds. 14