Roosevelt & Cross, Inc.

Transcription

1 New Issue Ratings: See Ratings herein In the opinion of Locke Lord LLP, Bond Counsel, based upon an analysis of existing law and assuming, among other matters, compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the Code ). Interest on the Bonds will not be included in computing the alternative minimum taxable income of individuals. Under existing law, income from the Bonds is free from taxation by the State of Rhode Island (the State ) or any political subdivision or other instrumentality of the State, although the income therefrom may be included in the measure of Rhode Island estate taxes and certain Rhode Island corporate and business taxes. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on, the Bonds. See TAX EXEMPTION and APPENDIX C herein. OFFICIAL STATEMENT of the Town of Coventry, Rhode Island Relating to Dated: Date of Delivery $7,050,000 GENERAL OBLIGATION BONDS, 2019 SERIES A Due: March 15, , inclusive The Bonds are issuable only as fully registered Bonds without coupons, and, when issued, will be registered in the name of Cede & Co., as Bondowner and nominee for The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository for the Bonds. Purchases of the Bonds will be made in book-entry form, in the denomination of $5,000 or any integral multiple in excess thereof. Purchasers will not receive certificates representing their interest in Bonds purchased. So long as Cede & Co. is the Bondowner, as nominee of DTC, references herein to the Bondowners or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners (as defined herein) of the Bonds. So long as DTC, or its nominee Cede & Co., is the Bondholder, principal and semiannual interest payments will be made directly to such Bondholder. Principal of and interest on the Bonds will be payable to DTC by U.S. Bank National Association, as Paying Agent. Disbursement of such payments to the DTC Participants is the responsibility of DTC and disbursements of such payments to Beneficial Owners is the responsibility of the DTC Participants and the Indirect Participants, as more fully described herein. (See "THE BONDS Book-Entry Only System" herein.) Interest is computed on the basis of a 360-day year consisting of twelve 30-day months. The Bonds will be dated the date of delivery. Interest on the Bonds will be payable on September 15, 2019 and semiannually thereafter on March 15 and September 15 of each year at the rates as shown in the maturity schedule below. Principal of the Bonds will be payable on March15 as shown in the maturity schedule below. Maturity Principal Interest Price Maturity Principal Interest Price March 15 Amount Rate or Yield CUSIP March 15 Amount Rate or Yield CUSIP 2020 $ 50, % 1.500% PW $395, % 2.500% QG , PX , * QH , PY , QJ , PZ , * QK , QA , * QL , QB , QM , QC , QN , QD , QP , QE , QQ , QF , QR9 * Priced to the first optional call date of March 15, 2029 at a redemption price of 100%. CUSIP is a registered trademark of the American Bankers Association (ABA). The numbers have been assigned by an independent company not affiliated with the Town, Underwriter or the Municipal Advisor and are included solely for the convenience of the holders of the Bonds. None of the Town, the Municipal Advisor or the Underwriter is responsible for the selection or uses of the CUSIP numbers, and no representation is made as to their correctness on the Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity. The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Bonds by ASSURED GUARANTY MUNICIPAL CORP. The Bonds are subject to redemption prior to maturity, as further described herein. The Bonds will be designated as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Code. The Bonds are offered for delivery when, as, and if issued, subject to the final approving opinion of Locke Lord LLP Bond Counsel, and to certain other conditions. PFM Financial Advisors LLC is serving as municipal advisor to the Town on this transaction. It is expected that the Bonds in definitive form, will be available for delivery to DTC in New York, New York, or to its Custodial Agent, on or about March 27, Official Statement Dated March 6, 2019 Roosevelt & Cross, Inc.

2 TABLE OF CONTENTS Page THE BONDS... 1 Description of the Bonds... 1 Record Date... 1 Authorization and Purpose... 1 Book-Entry-Only System... 2 Redemption Prior to Maturity... 3 Security for the Bonds... 4 BOND INSURANCE... 6 Bond Insurance Policy... 6 Assured Guaranty Municipal Corp... 6 THE TOWN OF COVENTRY... 7 General... 7 Government... 7 Government Services... 8 Education... 8 Employee Relations... 9 Utilities... 9 Transportation PROPERTY TAXES General Tax Limitations Property Revaluation Assessed Valuations Analysis of Taxable Property Schedule of Tax Rate, Property Tax Levy and Collections ECONOMIC CHARACTERISTICS Population Median Family Income Income Distribution Employment Unemployment Housing TOWN DEBT General Outstanding Debt Bonded Debt Schedule Debt Ratios and Debt Per Capita Authorized But Unissued Debt Tax Anticipation Notes Bond Anticipation Notes Overlapping Debt TOWN FINANCES Financial Reporting Budgetary Procedures Town Budgets State Aid Retirement Programs Other Post Employment Benefits Capital Improvement Program Reporting Requirements of Municipalities and School Districts State Oversight TAX EXEMPTION CONTINUING DISCLOSURE LITIGATION SALE AT COMPETITIVE BIDDING FINANCIAL ADVISOR RATINGS MISCELLANEOUS APPENDIX A Comparative General Fund Financial Statements... A 1 APPENDIX B Audited Financial Statements for the Fiscal Year ended June 30, B 1 APPENDIX C Proposed Form of Legal Opinion for the Bonds... C 1 APPENDIX D Proposed Form of Continuing Disclosure Certificate for the Bonds... D 1 APPENDIX E Specimen Municipal Bond Insurance Policy... E 1

3 This Official Statement is not to be construed as a contract or agreement between the Town and the purchasers or holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinion and not as representations of fact. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Town since the date hereof. All quotations from and summaries and explanations of provisions of laws and documents described herein do not purport to be complete and reference is made to said laws and documents for full and complete statements of their provisions. No dealer, salesman or any other person has been authorized to give any information or to make any representations, other than information and representations contained herein, in connection with the offering of the Bonds, and if given or made, such information or representations must not be relied upon. This Official Statement does not constitute an offer to sell or solicitation of an offer to buy any of the Bonds in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. The information set forth herein has been furnished by the Town and other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness. Upon issuance, the Bonds will not be registered under the Securities Act of 1933, as amended, in reliance upon exemptions contained in such Act. The Bonds will not be listed on any stock or other securities exchange. Any registration or qualification of the Bonds in accordance with applicable provisions of securities laws of the states in which the Bonds may be registered or qualified and the exemption from registration or qualification in other states cannot be regarded as a recommendation thereof. Neither the Securities and Exchange Commission nor any other federal, state or other governmental entity or agency, except for the Town, will have passed upon the accuracy of the Official Statement or, except for the Town, approved the Bonds for sale. Any representation to the contrary may be a criminal offense. The information relating to The Depository Trust Company ("DTC") and the book-entry only system contained in this Official Statement has been furnished by DTC (see "THE BONDS--Book-Entry-Only System" herein). No representation is made by the Town as to the adequacy or accuracy of such information. The Town has not made any independent investigation of DTC or the book-entry only system. The municipal advisor to the Town has provided the following sentence for inclusion in this Official Statement. The municipal advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the Town and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the municipal advisor does not guarantee the accuracy or completeness of such information. Assured Guaranty Municipal Corp. ( AGM ) makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading BOND INSURANCE and Appendix E - Specimen Municipal Bond Insurance Policy. The cover page hereof, this page and the appendices attached hereto are part of this Official Statement.

4 OFFICIAL STATEMENT of the Relating to $7,050,000 GENERAL OBLIGATION BONDS, 2019 SERIES A This Official Statement provides certain information concerning the Town of Coventry, Rhode Island (the "Town") in connection with the issuance by the Town of its $7,050,000 General Obligation Bonds, 2019 Series A (the Bonds ) dated the date of delivery. Description of the Bonds THE BONDS The Bonds will mature annually on March 15 in the principal amounts shown on the cover page of this Official Statement. The Bonds will bear interest, payable on September 15, 2019 and semiannually thereafter on March 15 and September 15 of each year until maturity. The Bonds are issuable only as fully registered Bonds without coupons, and, when issued, will be registered in the name of Cede & Co., as Bondowner and nominee for The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository for the Bonds. Purchases of the Bonds will be made in book-entry form, in denominations of $5,000 or any integral multiple in excess thereof. Purchasers will not receive certificates representing their interest in Bonds purchased. So long as Cede & Co. is the Bondowner, as nominee of DTC, references herein to the Bondowners or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners (as defined herein) of the Bonds. See THE BONDS - Book-Entry Only System" below. Principal of and interest on the Bonds will be paid by U.S. Bank National Association, Corporate Trust Department, Boston, Massachusetts as Paying Agent to DTC. So long as DTC or its nominee, Cede & Co., is the Bondowner, such payments will be made directly to such Bondowner. Disbursement of such payments to the DTC participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of the DTC Participants and the Indirect Participants, as more fully described herein. Interest on the Bonds is computed on the basis of a 360-day year consisting of twelve 30-day months. For every transfer and exchange of the Bonds, whether in certificated form or otherwise, the Beneficial Owner may be charged a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto. Adequate indemnification may be required to replace any lost, stolen or destroyed Bonds, whether in certificated form or otherwise. Record Date The Record Date for each payment of interest on the Bonds is the close of business on the fifteenth day preceding the interest payment date or, if such day is not a business day of the Paying Agent, the next preceding day which is a regular business day of the Paying Agent. Authorization and Purpose Bonds in the amount of $150,000 are authorized pursuant to Rhode Island General Laws Section and a resolution of the Town Council duly adopted on September 24, 2018 to finance the repair of Upper Pond Dam and all attendant expenses required by a consent agreement between the Town and the Rhode Island Department of Environmental Management. Bonds in the amount of $6,900,000 are authorized pursuant to Chapters 242/287 of the Public Laws of 2016 and a vote of the Town electorate on November 8, 2016, and a resolution of the Town Council duly adopted on February 13, 2017 to finance the rehabilitation of the existing human services building including construction of an addition thereto for reuse as a police station/human services complex.

5 Book-Entry-Only System This section describes how ownership of the Bonds is to be transferred and how the principal of, premium, if any, and interest on the Bonds are to be paid to and credited by DTC while the Bonds are registered in its nominee name. The information in this section concerning DTC and the Book-Entry-Only System has been provided by DTC for use in disclosure documents such as this Official Statement. The Town believes the source of such information to be reliable, but takes no responsibility for the accuracy or completeness thereof. The Town cannot and does not give any assurance that (1) DTC will distribute payments of debt service on the Bonds, or redemption or other notices, to DTC Participants, (2) DTC Participants or others will distribute debt service payments paid to DTC or its nominee (as the registered owner of the Bonds), or redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or (3) DTC will serve and act in the manner described in this Official Statement. The current rules applicable to DTC are on file with the Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with DTC Participants are on file with DTC. The Depository Trust Company ( DTC ), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Bond certificate will be issued for each maturity of the Bonds in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has Standard & Poor s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC s records. The ownership interest of each actual purchaser of each Bond ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of 2

6 Bonds and Notes may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Town as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Bonds, and redemption proceeds for the Bonds, will be made to Cede & Co., or such other nominee as may be required by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts, upon DTC s receipt of funds and corresponding detail information from the Town or the Paying Agent/Registrar on payable dates in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as in the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Paying Agent or the Town, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds and principal and interest to Cede & Co., or such other nominee as may be required by an authorized representative of DTC is the responsibility of the Town, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Town and the Paying Agent/Registrar. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered. The Town may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. Use of Certain Terms in Other Sections of this Official Statement. In reading this Official Statement it should be understood that while the Bonds are in the Book-Entry-Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised through DTC and the Book-Entry-Only System, and (ii) except as described above, notices that are to be given to registered owners will be given only to DTC. The information in this section concerning DTC and DTC s Book-Entry-Only System has been obtained from sources that the Town believes to be reliable, but neither the Town nor the Municipal Advisor takes any responsibility for the accuracy thereof. Redemption Prior to Maturity The Bonds maturing on or after March 15, 2030 shall be subject to optional redemption prior to their stated dates of maturity, at the option of the Town, on or after March 15, 2029, as a whole or in part at any time (by lot by DTC), in any order of maturity designated by the Town, at 100% of the aggregate principal amount of the Bonds to be redeemed, together with interest accrued and unpaid to the redemption date. Notice of any redemption of the Bonds, specifying the numbers and other designations of the Bonds to be redeemed, shall be given not more than 60 days nor less than 30 days prior to the date set for redemption by mailing a copy of such notice to DTC or its nominees. The Town, so long as a book-entry system is used for determining beneficial ownership of the Bonds, shall send any notice of redemption to DTC, or its nominee, as registered owner of the Bonds. Transfer of such notice to the DTC Participants is the responsibility of DTC. Transfer of such notice to Beneficial Owners by DTC Participants is the responsibility of the DTC Participants and other nominees of Beneficial Owners of the Bonds. Any failure of DTC to mail such notice to any DTC 3

7 Participant, or any failure by any DTC Participant to notify any Beneficial Owner, will not affect the validity of the redemption of the Bonds. The Town can make no assurances that DTC, the DTC Participants or other nominees of the Beneficial Owners of the Bonds will distribute such redemption notices to the Beneficial Owners of the Bonds, or that they will do so on a timely basis, or that DTC will act as described in this Official Statement. Security for Bonds The Bonds will be general obligations of the Town, the payment of which the full faith and credit, ad valorem taxes and general fund revenues of the Town are pledged. The Rhode Island General Laws provide that the Town shall annually appropriate a sum sufficient to pay the principal and interest coming due within the year on all of its general obligation bonds and notes to the extent that monies therefore are not otherwise provided, and that if such sum is not appropriated, it shall nevertheless be added to the annual tax levy. In order to provide such amount, all taxable property in the Town is subject to ad valorem taxation without limitation as to rate or amount. Claims for Payment Due Rhode Island General Laws Section permits any person who shall have any claim for money due from any town, for any matter, to present a demand for such claim to the town council and if satisfaction of such claim is not made within forty (40) days to commence an action against the town treasurer for recovery of the claim. If judgment is obtained for such debt due and if the monies available in the town treasury are insufficient to pay the judgment, Rhode Island General Laws authorizes the town treasurer to apply to any justice of the peace for an order requiring the town to hold a special financial town meeting "for the speedy ordering and making a tax" to be collected for such purpose. If the town electors shall fail to assess voluntarily a tax sufficient to satisfy judgment on a town debt, the Superior Court is authorized to order the assessors of the town "to assess upon the ratable property, and the collector to collect, a tax sufficient for the payment of the judgment, with all incidental costs and charges and the expense of assessing and collecting the tax," pursuant to Rhode Island General Laws Section Statutory Lien In July of 2011, the General Assembly enacted amendments to Section of the Rhode Island General Laws to provide for a statutory lien on ad valorem taxes and general fund revenues for the benefit of general obligation debt of cities and towns and for giving priority to general obligation debt in a bankruptcy. The validity and priority of the lien granted by Section have not been adjudicated in any Chapter 9 bankruptcy proceeding. The amendments provide, in part, as follows: The faith and credit, ad valorem taxes and general fund revenues of each city and town are pledged for the payment of principal of, premium and interest on all general obligation bonds and notes of the city or town, whether or not the pledge is stated in the bonds and notes or in the proceedings authorizing their issue and the pledge constitutes a first lien on such ad valorem taxes and general fund revenues. In addition, annual appropriations for payment of financing leases and obligations securing bonds, notes or certificates ( other financing obligations ), have a first lien on ad valorem taxes and general fund revenues commencing on the date of each annual appropriation. Amounts appropriated or added to the tax levy to pay principal of, premium and interest on general obligation bonds or notes and payments of other financing obligations are applied to the payment of such obligations. Any municipal employee or official who intentionally violates such provisions of Section is personally liable to the city or town for any amounts not expended in accordance with such appropriations. The superior court has jurisdiction to adjudicate claims brought by any city or town and to order such relief as the court may find appropriate to prevent further violations under such provisions of Section Any municipal employee or official who violates such provisions of Section is subject to removal. Section further provides in part, that: notwithstanding any provision of any other law, including the Uniform Commercial Code, Title 6A of the Rhode Island General Laws: (1) the pledge of ad valorem taxes and general fund revenues to the payment of the principal, premium and interest on general obligation bonds and notes and payment of other financing obligations is valid and binding, and deemed continuously perfected from the time the bonds or notes or other financing obligations are issued; (2) no filing need be made under the Uniform Commercial Code or otherwise to perfect the first lien on ad valorem taxes and general fund revenues; (3) the pledge of ad valorem taxes or general fund revenues is subject to the lien of the pledge without delivery or segregation, and the first lien on ad valorem taxes and general fund revenues is valid and binding against all parties having claims of contract or tort or otherwise against the city or town, whether or not the parties have notice thereof; and (4) the pledge shall be a statutory lien effective by operation of law and shall apply to all general 4

8 obligation bonds and notes and financing obligations of cities, towns and districts and shall not require a security agreement to be effective. The July 2011 amendments, described above, provide that ad valorem taxes and general fund revenues may be applied as required by the pledge without further appropriation except for financing obligations which are subject to annual appropriation. State Aid Intercept Rhode Island General Laws creates a mechanism to enhance the creditworthiness of cities and towns in financial stress by providing for a state aid intercept mechanism to pay general obligation bonds and notes. Under the statute, the finance director is required to notify the town administrator and the town council if it appears to the finance director that the town is likely to be unable to pay in whole or in part the principal or interest, or both, on any of its bonds, notes or certificates of indebtedness when due. If the town administrator or town council, whether or not so notified, finds upon investigation that the payment cannot or is not likely to be made when due, he, she, or they are required to certify the inability or likely inability to the Director of Revenue of the State. The Town has never made such a certification. Upon receipt of the certificate, the Director of Revenue shall immediately investigate the circumstances and, if the Director finds that the town is, or in the Director's opinion will be, unable to make the payment when due, the Director shall forthwith certify the inability, the amount of the due or overdue payment and the name of the paying agent for the bonds, notes or certificates of indebtedness to the General Treasurer of the State. Notwithstanding any provision of general or special law or any rules or regulations with respect to the timing of payment of state aid payments, not later than three (3) days after receipt of the certification from the Director of Revenue or one business day prior to the date on which the principal or interest, or both, becomes due, whichever is later, the General Treasurer of the State is required to pay to the paying agent the amount of the due or overdue payment certified to him/her to the extent of the sums otherwise then payable and the sums estimated to become payable during the remainder of the fiscal year, from the treasury, to the town. The amounts so paid to the paying agent are held in trust and exempt from being levied upon, taken, sequestered or applied for any purpose other than paying principal or interest, or both, on bonds, notes or certificates of indebtedness of the town. For purposes of the statute, the sums otherwise payable from the treasury to a city or town shall be the funds made available to cities or towns: (i) as state aid pursuant to chapter of the Rhode Island General laws, but specifically excluding reimbursements to cities and towns for the cost of state mandates pursuant to of the Rhode Island General Laws; (ii) as school housing aid pursuant to of the Rhode Island General Laws, but subject to any pledge to bonds issued to finance school projects by the Rhode Island Health and Educational Building Corporation, and specifically excluding school operations aid provided for in of the Rhode Island General Laws; (iii) in replacement of motor vehicle and trailer excise taxes pursuant to chapter of the Rhode Island General Laws; (iv) from the public service corporation tax pursuant to chapter of the Rhode Island General Laws; (v) from the local meal and beverage tax pursuant to and the hotel tax pursuant to of the Rhode Island General laws; and (vi) pursuant to all acts supplementing such chapters. Enforceability of Town Obligations Enforcement of a claim for payment of principal of or interest on a bond or note issued by the Town is subject to the applicable provisions of the federal bankruptcy laws and of statutes, if any, hereafter enacted by the federal government or the State of Rhode Island extending the time for payment of such obligations or imposing other constitutionally valid constraints upon such enforcement. Judicial enforcement of statutes such as Rhode Island General Laws Sections described above under the heading "Claims for Payments Due", the statutory lien provided for in section and state aid intercepts such as that provided for in Section are within the discretion of a court. The status of these rights and remedies of owners of bonds and notes in a proceeding to restructure city or town debt under Chapter 9 of the Federal Bankruptcy Code, or pursuant to other subsequently enacted laws relating to creditors' rights has not been adjudicated. 5

9 BOND INSURANCE Bond Insurance Policy Concurrently with the issuance of the Bonds, Assured Guaranty Municipal Corp. ("AGM") will issue its Municipal Bond Insurance Policy for the Bonds (the "Policy"). The Policy guarantees the scheduled payment of principal of and interest on the Bonds when due as set forth in the form of the Policy included as Appendix E to this Official Statement. The Policy is not covered by any insurance security or guaranty fund established under New York, California, Connecticut or Florida insurance law. Assured Guaranty Municipal Corp. AGM is a New York domiciled financial guaranty insurance company and an indirect subsidiary of Assured Guaranty Ltd. ( AGL ), a Bermuda-based holding company whose shares are publicly traded and are listed on the New York Stock Exchange under the symbol AGO. AGL, through its operating subsidiaries, provides credit enhancement products to the U.S. and global public finance, infrastructure and structured finance markets. Neither AGL nor any of its shareholders or affiliates, other than AGM, is obligated to pay any debts of AGM or any claims under any insurance policy issued by AGM. AGM s financial strength is rated AA (stable outlook) by S&P Global Ratings, a business unit of Standard & Poor s Financial Services LLC ( S&P ), AA+ (stable outlook) by Kroll Bond Rating Agency, Inc. ( KBRA ) and A2 (stable outlook) by Moody s Investors Service, Inc. ( Moody s ). Each rating of AGM should be evaluated independently. An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies, including withdrawal initiated at the request of AGM in its sole discretion. In addition, the rating agencies may at any time change AGM s long-term rating outlooks or place such ratings on a watch list for possible downgrade in the near term. Any downward revision or withdrawal of any of the above ratings, the assignment of a negative outlook to such ratings or the placement of such ratings on a negative watch list may have an adverse effect on the market price of any security guaranteed by AGM. AGM only guarantees scheduled principal and scheduled interest payments payable by the issuer of bonds insured by AGM on the date(s) when such amounts were initially scheduled to become due and payable (subject to and in accordance with the terms of the relevant insurance policy), and does not guarantee the market price or liquidity of the securities it insures, nor does it guarantee that the ratings on such securities will not be revised or withdrawn. Current Financial Strength Ratings On December 21, 2018, KBRA announced it had affirmed AGM s insurance financial strength rating of AA+ (stable outlook). AGM can give no assurance as to any further ratings action that KBRA may take. On June 26, 2018, S&P announced it had affirmed AGM s financial strength rating of AA (stable outlook). AGM can give no assurance as to any further ratings action that S&P may take. On May 7, 2018, Moody s announced it had affirmed AGM s insurance financial strength rating of A2 (stable outlook). AGM can give no assurance as to any further ratings action that Moody s may take. For more information regarding AGM s financial strength ratings and the risks relating thereto, see AGL s Annual Report on Form 10-K for the fiscal year ended December 31, Capitalization of AGM At December 31, 2018: The policyholders surplus of AGM was approximately $2,533 million. The contingency reserves of AGM and its indirect subsidiary Municipal Assurance Corp. ( MAC ) (as described below) were approximately $1,034 million. Such amount includes 100% of AGM s contingency reserve and 60.7% of MAC s contingency reserve. 6

10 The net unearned premium reserves and net deferred ceding commission income of AGM and its subsidiaries (as described below) were approximately $1,873 million. Such amount includes (i) 100% of the net unearned premium reserve and deferred ceding commission income of AGM, (ii) the net unearned premium reserves and net deferred ceding commissions of AGM s wholly owned subsidiary Assured Guaranty (Europe) plc ( AGE ), and (iii) 60.7% of the net unearned premium reserve of MAC. The policyholders surplus of AGM and the contingency reserves, net unearned premium reserves and deferred ceding commission income of AGM and MAC were determined in accordance with statutory accounting principles. The net unearned premium reserves and net deferred ceding commissions of AGE were determined in accordance with accounting principles generally accepted in the United States of America. Incorporation of Certain Documents by Reference Portions of the following document filed by AGL with the Securities and Exchange Commission (the SEC ) that relate to AGM are incorporated by reference into this Official Statement and shall be deemed to be a part hereof: the Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (filed by AGL with the SEC on March 1, 2019). All consolidated financial statements of AGM and all other information relating to AGM included in, or as exhibits to, documents filed by AGL with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, excluding Current Reports or portions thereof furnished under Item 2.02 or Item 7.01 of Form 8-K, after the filing of the last document referred to above and before the termination of the offering of the Bonds shall be deemed incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing such documents. Copies of materials incorporated by reference are available over the internet at the SEC s website at at AGL s website at or will be provided upon request to Assured Guaranty Municipal Corp.: 1633 Broadway, New York, New York 10019, Attention: Communications Department (telephone (212) ). Except for the information referred to above, no information available on or through AGL s website shall be deemed to be part of or incorporated in this Official Statement. Any information regarding AGM included herein under the caption BOND INSURANCE Assured Guaranty Municipal Corp. or included in a document incorporated by reference herein (collectively, the AGM Information ) shall be modified or superseded to the extent that any subsequently included AGM Information (either directly or through incorporation by reference) modifies or supersedes such previously included AGM Information. Any AGM Information so modified or superseded shall not constitute a part of this Official Statement, except as so modified or superseded. Miscellaneous Matters AGM makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading BOND INSURANCE. General THE TOWN OF COVENTRY The Town of Coventry, established in 1643 and incorporated in 1741, covers a total area of 62.3 square miles with a land area of 59.5 square miles and 2.8 square miles of inland water. The Town is located about 19 miles southwest of Providence. It is bounded by the State of Connecticut on the west, and elsewhere by the Towns of Foster, Scituate, West Warwick, East Greenwich, West Greenwich and the City of Cranston. The land area of the Town is comprised of commercially and residentially developed land. Government The Town operates under a home rule charter adopted in 1972 providing for a council/town manager form of government, with a five-member Town Council headed by a Council President. Legislative powers of the Town are vested in the elected Town Council. Executive and administrative are vested in an appointed manager, who is responsible for the 7

11 day-to-day administration of town government. The Town s budget is approved by the electorate of the Town at an Annual Financial Town Meeting. Members of the Town Council are elected by district for a term of four years. The charter grants the Town Council the power to adopt, amend or repeal ordinances relating to the Town s property, affairs and government including the power to create offices, departments or agencies of the Town, to preserve the public peace, health and safety, to establish personnel policies, to authorize the issuance of bonds and notes and to provide for an annual audit of the Town s accounts. The Town Manager is appointed by the Town Council for an indefinite term with special preference to his/her education, administrative ability and experience. The Town Manager is responsible to the Council for the administration of all Town affairs placed in the Town Manager s charge. The charter grants to the Town Manager the authority to appoint or remove officers or employees of the Town, to prepare and submit to the Town Council the annual budget and annual report of the Town, and to make recommendations to the Town Council concerning the affairs of the Town. The Town currently has an Interim Town Manager, Edward Warzycha. The Town Council is in process of conducting a search for a permanent Town Manager. Government Services Public Safety In addition to its schools, the Town of Coventry provides a variety of other public services: The Coventry Police Department consists of 57 police officers, 3 animal control officers, 4 crossing guards and an additional 13 member civilian support staff in six divisions: patrol, detective, animal control, community service, records and emergency management. The Department provides 24-hour police protection. There are four independent fire districts in the Town. The districts have their own apparatus and permanent and volunteer staff. The districts are linked by a centralized fire alarm dispatch system so that all calls are dispatched from a single location to the various districts. The Town pays for the operation of the centralized fire alarm dispatch system, but it has no financial obligation for the districts. Each district sets and collects its own tax revenue. The four districts are: Coventry Fire District, Central Coventry Fire District, Hopkins Hill Fire District, and Western Coventry Fire District. Public Works The Department of Public Works provides a full range of services including highway maintenance, refuse collection and disposal, vehicle maintenance, snow and ice control, and maintenance of Town buildings and grounds. The Town also provides building inspection, engineering, and minimum housing. Recreation The Coventry Parks and Recreation Department offers a variety of services such as organized leagues in a variety of athletics events. 15 miles of the Washington Secondary Bike Path runs through Coventry. 9.2 miles of the path is paved and sections of the path also offer horseback riding paths. Special programs are provided for both children and adults, and hiking and fishing areas are available as well. Library The Coventry Public Library is open seven days a week and provides its patrons with extensive research and leisure reading materials. The library also offers its patrons computer database capabilities for research projects. Social Services The Town has a Department of Human Services. All senior citizen, welfare food services, basic human needs, and integrated health and mental health service coordination programs fall under the jurisdiction of the Director of Human Services. Education The general administration of the Town s school system is directed by an elected five-member School Committee. The School Committee determines and controls all policies affecting the administration, maintenance and operations of the 8

12 public schools in the Town, appoints a Superintendent of Schools as its chief administrative agent and appoints and removes all school employees upon recommendation of the Superintendent of Schools, except as may be provided otherwise by the laws of the State. The public school system of the Town currently consists of five elementary schools, one middle school, a high school and a regional vocational school. As of July 1, 2018, the school system employed 404 teachers, 53 additional certified professional employees, 234 support and non-professionals, and 29 administrative staff. School Population The following table shows enrollment and projected enrollment in the Town s public schools: Source: Town s School Department Administration. Employee Relations Utilities Water October Actual October Projected , , , , , , , , , ,870 As of July 1, 2018, the Town had 156 full-time employees, exclusive of the School Department. The current status of union contracts for municipal and school employees is: Municipal employees: three-year contract expires December 31, 2020 Police employees: three-year contract expires June 30, 2021 Teachers: three-year contract expires August 31, 2021 Other school employees: three-year contract expires August 31, 2021 Water service in the Town for those residents not connected to residential wells is provided by the Kent County Water Authority. Kent County Water Authority services 8,193 units in the Town. See TOWN DEBT Overlapping Debt herein. Sewers and Regional Wastewater Facilities Financing Approximately 97% of buildings in the Town have their own septic systems. The Town does have sewers along Route 3, the Eastern section of Route 117, and Hopkins Hill Road. The Town currently owns capacity in the regional sewer treatment plant located in the Town of West Warwick. This is provided for in an intermunicipal agreement with the Town of West Warwick dated July 20, 1999 (the Intermunicipal Agreement ) whereby the Town of West Warwick has agreed to receive, treat and dispose of the Town s wastewater. The Town of West Warwick has also entered into Intermunicipal Agreements for similar services with the City of Warwick, the Town of Scituate, the City of Cranston and the Town of West Greenwich. Under the Intermunicipal Agreement, the Town has agreed, among other things, to pay 21.43% of the costs and expenses incurred in upgrading the Town of West Warwick s wastewater collection and treatment facilities. The Rhode Infrastructure Bank ("RIIB") (formerly, Rhode Island Clean Water Finance Agency) and the Town of West Warwick arranged financing for the Town of West Warwick s wastewater facility. In 2003, the Town of West Warwick borrowed $21,422,900 over 20 years for the wastewater facility upgrade. In 2015, the Town of West Warwick borrowed 9

13 $7,000,000 over 20 years for additional wastewater facility upgrades. The Town s share of the project expenses relating to the 2003 and 2015 upgrades was $4,654,867 and $1,500,000, respectively. RIIB financed the loan secured by revenue bonds issued by the Town of West Warwick. The bonds are payable solely from revenues generated by the system. Financings issued through the RIIB offer communities with approved projects a lower rate of interest than the communities could achieve by direct issuance of obligations. The Town also had outstanding as of June 30, 2018, RIIB bonds in the amount of $16,334,951 which financed new sewer construction in the Town. While the bonds are special obligations payable solely from sewer revenues, the Town s General Fund has been providing support to the Sewer Enterprise Fund. An imbalance of revenues to support business activities occurred in FY 2016 which caused the Town to be out of compliance with its rate covenants and required the Sewer Enterprise Fund to be supported through the General Fund. Fiscal Year Due to General Fund 2015 $ ,075, ,286, ,656,700 In recognition of the sewer revenue imbalance, the Town refinanced its 2013 Series B RIIB Conduit Bond Issue on August 30, 2018, which generated debt service savings in fiscal years which is expected to reduce the impact of the imbalance. Additionally, all new construction relating to the Sewer Enterprise Fund has been placed on hold. All debt service payments on the revenue bonds have been paid when due. The Town is currently in process securing a consultant to conduct a new sewer rate study with recommendations to correct the imbalance. Furthermore, the sewer rate study scope will include recommendations for revenue levels required to reimburse the General Fund while supporting business operations. Town Council members have publically commented on their support of the study and willingness to incorporate the upcoming findings. Sewer expansion is expected to recommence once revenue balance is restored and the general fund is reimbursed. Transportation The Town is centrally located within the State. It is connected to all major metropolitan areas in the northeast corridor by a network of state and interstate highways, including I-95 and I-295. Air transportation is provided by the T.F. Green Airport which is located a short distance from the Town within the City of Warwick, Rhode Island. Nationwide inter-city rail passenger service is offered through AMTRAK s Providence, Rhode Island station. Freight transportation is provided by railroads and by local and long distance trucking firms and bus lines, while nearby Port of Providence provides shipping facilities. General PROPERTY TAXES Under Rhode Island law, municipalities (including the Town) may levy no general tax except ad valorem taxes upon real and tangible personal property, and an excise tax on motor vehicles. The Town s Fiscal Year begins July 1 with taxes based on assessments as of the preceding December 31. Taxes are payable in full the following August 15 or quarterly commencing August 15. The Town does not provide a discount for advance payment of taxes. The Town has periodic tax sales for prior year delinquent real property taxes. Delinquent automobile excise taxes are collected in cooperation with the Rhode Island Registry of Motor Vehicles. If automobile taxes have not been paid, information is supplied to the Registry of Motor Vehicles and motor vehicles may not be reregistered until taxes are paid in full. The Town assesses interest of 18% per annum on delinquent accounts. 10

14 Tax Limitations Rhode Island General Laws Section limits the amount by which a city or town may increase its tax levy unless it qualifies for certain exemptions relating to loss of non-property tax revenue, emergencies, payment of debt service and substantial increase in the tax base necessitating significant expenditures. For fiscal year 2013 and thereafter, the tax levy cap is four percent (4.00%) in excess of the prior year levy. The amount levied by a city or town may exceed the percentage increase as specified above if the city or town qualifies under one or more of the following provisions: (1) the city or town forecasts or experiences a loss in total nonproperty tax revenues and the loss is certified by the department of revenue; (2) The city or town experiences or anticipates an emergency situation, which causes or will cause the levy to exceed the percentage increase as specified above; (3) a city or town forecasts or experiences debt services expenditures which exceed the prior year s debt service expenditures by an amount greater than the percentage increase as specified above and which are the result of bonded debt issued in a manner consistent with general law or a special act; or (4) the city or town experiences substantial growth in its tax base as the result of major new construction which necessitates either significant infrastructure or school housing expenditures by the city or town or a significant increase in the need for essential municipal services. Any levy pursuant to this section in excess of the percentage increase as specified in Section shall be approved by the affirmative vote of at least four-fifths (4/5) of the full membership of the governing body of the city or town and, in the case of a town with a financial town meeting, the majority of electors present and voting at the financial town meeting. Section makes it clear that nothing contained in that Section constrains the payment of obligations as described by Section of the Rhode Island General Laws, which provides that the outstanding notes, bonds and contracts of cities and towns shall be paid and be fulfilled and that the power and obligation of each city and town to pay its general obligation bonds and notes shall be unlimited and each city and town shall levy ad valorem taxes upon all taxable property within the city or town for the payment of such bonds and notes and interest thereon, without limitation as to rate or amount, except as otherwise provided by or pursuant to law. Motor Vehicle Tax Exemption Prior to fiscal year 2018, State legislation required cities and towns to exempt a minimum of $500 on all motor vehicles subject to taxation. With adoption of the fiscal year 2018 State Budget the State directed implementation of a fiveyear phase-out of municipal authority to tax motor vehicles. The State will reimburse cities and towns for all lost revenue resulting from the close out of this municipal tax program. The Town s approved budget for fiscal year 2018 included an exemption of $1,000 and $2,000 has been included in fiscal year Property Revaluation The Rhode Island General Laws require that a full real property revaluation shall be completed every nine years by all cities and towns within State and a statistical update every three years. The last full town-wide property revaluation was completed December 31, A statistical update will be completed as of December 31, 2019 and will in effect for fiscal years 2021, 2022 and

15 Assessed Valuations Assessed Ratio of Estimated December 31, Value Assessment True Value 2017 $3,601,469, % $3,601,469, (1) 3,541,078, ,541,078, ,409,659, ,409,659, ,366,432, ,366,432, (2) 3,337,717, ,337,717, ,525,429, ,525,429, ,418,324, ,418,324, (2) 3,397,682, ,397,682, ,101,115, ,101,115, ,047,047, ,047,047,070 (1) Full Revaluation (2) Statistical Revaluation Source: Town Tax Assessor. Analysis of Taxable Property The following table shows the latest analysis of taxable property of the Town as of December 31, 2017 (for Fiscal year ending June 30, 2019) as compared to the State-wide average: Principal Taxpayers Assessed Value Breakdown by Classification Classification Coventry Statewide Residential 76.99% 74.82% Commercial/Industrial Tangible Motor Vehicle TOTAL % % The ten largest taxpayers in Town as of December 31, 2017 were as follows: Name Type of Business Assessed Valuation % of Total Valuation National Grid Utility (gas & electric) $25,066, % Wal-Mart Real Estate Business Trust Retail (Wal-Mart) 23,830, Rhodes Technologies Pharmaceuticals 23,641, Springfield Armory LP Apartments 20,539, RoadePot LLC & Keyserton LLC Retail (Home Depot) 15,182, Brady Sullivan Harris Mill LLC Apartments 12,168, BKD New England Bay LLC Assisted Living Facility 11,002, OHI Asset (CT) Lender LLC Nursing Home & Rehab 10,637, Commerce Park Associates 5 LLC Retail (BJ's) 10,609, Brady Sullivan Anthony Mill LLC Apartments 10,440, TOTALS $163,117, % Source: Town Tax Assessor. 12

16 Schedule of Tax Rate, Property Tax Levy and Collections By State law, valuations and assessments are established each December 31, and the levy thereon must be established by the following June 15. It may be paid in full or quarterly without penalty at the taxpayer s option. The Town s Fiscal Year begins July 1 and taxes on the prior December 31 assessments are payable in full on the following August 15 or quarterly commencing on August 15. Trends in levies and collections are shown in the following table: % Collected Total Fiscal Residential Current at End of Current & Collection Year Tax Net Taxes Fiscal Delinquent as % of Ending Rate Levy Collections Year Collections Levy 2019 (1) 21.61% $74,113,328 $33,907, % $34,229, % ,872,986 71,131, ,785, ,318,224 39,063, ,197, ,613,677 67,155, ,685, ,812,571 64,839, ,294, ,549,068 63,786, ,396, ,327,613 61,595, ,027, ,860,355 60,496, ,496, ,554,811 58,840, ,364, ,014,126 58,313, ,017, (1) Collections through November 1, ECONOMIC CHARACTERISTICS Population % Change % Change Increase Increase Year Town (Decrease) State (Decrease) , % 1,052, % , ,048, , ,003, , ,154 (0.3) , , , , , , , , , ,497 - The 2010 population density of the Town was 588 persons per square mile. According to the 2010 census, the Town ranked seventh in population among the State s 39 cities and towns. Source: U.S. Department of Commerce, Bureau of Census, Median Family Income Coventry $ 21,263 $ 41,883 $ 61,315 $ 77,791 $ 88,556 $ 86,632 Rhode Island 19,448 39,172 52,781 72,717 74,045 75,655 United States 19,917 35,225 50,046 64,719 66,011 67,871 Source: U.S. Department of Commerce, Bureau of the Census ; U.S. Census Bureau, Year American Community Survey. 13

17 Income Distribution Income for Families $0-9,999 10,000-24,999 25,000-49,999 50,000-74,999 75,000-99, , , ,000 and over Total Source: U.S. Census Bureau, Year American Community Survey. Town Families Percent % 1, , , , , , , % Employment During calendar year 2017, the Town of Coventry had 690 private business and industrial firms subject to employment security taxes, with yearly payrolls which totaled $242,638,634 and the average number of persons employed was 6,654 according to the most recent statistics. The following is a listing of the various types of industry in the Town covered by the Department of Labor and Training. % of Total # of Avg. Covered Wage Employers Empmnt. Emp. Agriculture, Forestry, Fishing & Hunting * 2 * * Mining * - * * Construction $ 17,005, % Manufacturing 40,757, Wholesale Trade 20,789, Retail Trade 48,202, , Transportation & Warehousing 3,344, Information 2,809, Finance & Insurance 3,985, Real Estate & Rental & Leasing 2,134, Professional & Technical Services 18,165, Management of Companies and Enterprises 2,871, Administrative & Waste Services 12,321, Educational Services 2,262, Health Care & Social Assistance 44,276, , Arts, Entertainment & Recreation * 7 * * Accommodations & Food Services 15,243, Other Service Except Public Administration 7,733, TOTAL $ 242,638, , % *Data not shown due to the possibility of identifying data of a specific employer. Totals may not add due to this exclusion. Source: Rhode Island Department of Labor & Training. Data compiled May

18 Unemployment Annualized Coventry 20.8% 11.1% 10.6% 9.8% 9.0% 7.3% 5.7% 5.0% 4.0% Rhode Island United States Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Coventry 5.5 % 5.3 % 4.6 % 3.7 % 3.3 % 3.2 % 3.9 % 3.9 % 3.2 % 2.7 % 3.3 % 3.7 % Rhode Island United States Housing According to the 2016 American Community Survey, there were 14,671 dwelling units in the Town compared to 13,059 dwelling units in The additional 1,612 dwelling units represented an increase of 12.34%. In 2010, 10,977 of the 13,723 occupied housing units or 80.0% were owner occupied. The median sale price for a single family dwelling unit in the Town for the 4th quarter of 2017 was $229,450 compared to the State average of $258,000. Economic Development The Town s economic development mission is to apply user-friendly business oriented techniques to enhance the creation of high quality, job-based development and revitalization of existing commercial districts in order to diversify the tax base and provide employment opportunities for Coventry residents. To accomplish this mission, the Town provides professional assistance and expedited permitting processes for existing and new commercial enterprises. It is anticipated that this assistance will: (1) produce economic development activities that have the potential of upgrading the skill and wage levels of the Town s labor force; (2) promote the expansion and recruitment of businesses offering career opportunities for secondary and post-secondary school graduates; and (3) emphasize diversity of commercial and industrial undertakings, all of which should promote steady employment patterns that withstand downturns in the economy. General TOWN DEBT There are three statutory mechanisms for municipalities in Rhode Island to obtain legal authority to issue general obligation debt: (1) Section of the General Laws (the 3% Debt Limit Statute ), (2) special acts of the General Assembly, and (3) ministerial approval by the State s Auditor General. Bonds issued pursuant to the 3% Debt Limit Statute or by ministerial approval or special legislation adopted by the General Assembly authorizing the Town to incur debt are subject to referendum by the electors of the Town. The 3% Debt Limit Statute was enacted in 1896 as a limitation on the amount of debt municipalities could incur. The 3% Debt Limit Statute provides that except as explained below, a municipality may not, without special statutory authorization, or ministerial approval by the Auditor General of the State (described below), incur any debt, which would increase its aggregate indebtedness not otherwise excepted by law to an amount greater than 3% of the full assessed value of the taxable property within the municipality. Deducted from the computation of aggregated indebtedness is the amount of any borrowing in anticipation of taxes authorized by law and the amount of any fund held on account to pay such indebtedness maintained by the municipality. In computing the value of taxable property, motor vehicles and trailers are valued at full value without regard to assessed value reductions provided for in other sections of the general laws. The 3% debt limit of the Town is $108,044,095, based on full assessed valuations of $3,601,469,819 as of December 31, The Town had $6,372,413 in outstanding bonds and notes issued pursuant to Section under the 3% debt limit as of June 30, 2018 leaving a remaining debt capacity of $101,671,

19 Over time, special acts have displaced the 3% Debt Limit Statute as the primary method for municipalities in the State to obtain authority to issue general obligation debt. On June 30, 2018, the Town had approximately $33,850,587 of debt outstanding that is outside the 3% debt limit. In July 2007, the Rhode Island State Legislature enacted legislation effective January 1, 2008 allowing for ministerial approval by the State s Auditor General of debt outside of the 3% debt limit for communities with an A rating or better, if the municipality also satisfies certain requirements. The Town has no debt outstanding under the ministerial approval process. In addition to debt authorized within the 3% debt limit and debt authorized by special act of the General Assembly, Rhode Island General Laws Section authorizes the State Director of Administration, upon petition by a municipality, to authorize such municipality to incur indebtedness in excess of the 3% debt limit whenever the Director shall determine that the sums appropriated by the municipality or its funds available are insufficient to pay the necessary expenses of the municipality. The Town has never requested the State Director of Administration to authorize indebtedness of the Town under Section Under Rhode Island General Laws Section a city or town may authorize the issuance of bonds, notes, or other evidences of indebtedness to pay the uninsured portion of any court judgment or settlement, except any court judgment or settlement arising out of any pension obligation of a municipality; provided however, that the outstanding principal amount, in the aggregate, shall not exceed five percent (5%) of the total amount of the city or town s most recently adopted municipal budget (or in the most case of the towns of Coventry and Middletown, shall not exceed ten percent (10%) of the most recent municipal budget). These bonds and notes are subject to the 3% debt limit. Judgment or settlement bonds may be issued without voter approval. The Town issued judgment bonds in 2012 and 2016 to fund the acquisition of land adjacent to its landfill in connection with its closure, to fund environmental remediation of the landfill and to finance dam repairs as required by a consent agreement with the Department of Environmental Management. See LITIGATION below. As of June 30, 2018, the Town had approximately $2,355,000 bonds outstanding issued pursuant to Rhode Island General Laws Section

20 Outstanding Debt As of June 30 for the years indicated, the outstanding long-term bond indebtedness of the Town was as follows: Governmental Activities (1) Refunding Bonds 2011 $ 11,150,000 $ 9,685,000 $ 8,240,000 $ 6,815,000 $ 5,410,000 Judgement Bonds ,055,000 3,795,000 3,530,000 3,260,000 2,980,000 RIHEBC School Bonds ,100,000 11,225,000 10,355,000 9,490,000 8,630,000 Capital Projects ,860,000 15,280,000 14,685,000 14,070,000 RIIB Road Bonds , , , ,000 RIIB Road Bonds , , , ,000 Refunding Bonds ,880,000 5,855,000 5,550,000 General Obligations Bonds ,100,000 4,910,000 Total $ 27,305,000 $ 41,805,000 $ 44,492,000 $ 46,323,000 $ 42,578,000 Business-Type Activities (2) (4) RIIB 2006 $ 2,361,000 $ 2,212,000 $ 2,060,000 $ 1,905,000 $ 1,747,000 RIIB ,924,000 3,697,000 3,466,000 3,231,000 2,991,000 RIIB 2009 (3) 2,142,117 2,032,311 1,919,847 1,804,727 1,686,951 RIIB ,398,000 2,397,000 2,290,000 2,181,000 2,070,000 RIIB ,399,000 2,398,000 2,300,000 2,201,000 1,100,000 RIIB 2013 Conduit 8,225,000 7,820,000 7,400,000 6,960,000 6,740,000 Total $ 21,449,117 $ 20,556,311 $ 19,435,847 $ 18,282,727 $ 16,334,951 (1) General Obligation Debt. (2) Revenue Bonds and Loans. (3) Shown net of American Recovery and Reinvestment Act principal forgiveness. (4) Excludes restructure of 2013 Conduit Bond with $6,740,000 RIIB Bonds dated August 30, The Town's bonds issued to the RIIB are special obligations payable solely from sewer system revenues and are not general obligations of the Town. 17

21 Bonded Debt Schedule The following table sets forth a schedule of debt service for the outstanding bonds of the Town for the fiscal years ending 2019 through Fiscal Existing Debt Service (1) Existing Business Type Debt Service (2) (3) This Issue of Bonds Total Year Principal Interest Principal Interest Principal Interest Debt Service 2019 $ 3,741,000 $ 1,314,671 $ 1,073,961 $ 438,621 $ - $ - $ 6,568, ,752,000 1,218,782 1,194, ,266 50, ,229 7,018, ,754,000 1,117,946 1,212, , , ,013 6,968, ,766,000 1,013,037 1,236, , , ,013 6,919, ,493, ,256 1,697, , , ,513 6,220, ,155, ,607 1,744, , , ,513 5,794, ,209, ,908 1,538, , , ,513 5,510, ,217, ,180 1,585, , , ,513 5,436, ,269, ,610 1,458, , , ,513 5,221, ,926, ,946 1,498, , , ,513 4,776, ,963, ,869 1,347, , , ,513 4,542, ,998, ,526 1,039, , , ,513 4,142, ,965, , , , , ,638 3,873, ,005, , ,000 99, ,000 95,788 3,834, ,045, , ,000 60, ,000 84,925 3,793, ,645, , ,000 22, ,000 73,075 3,142, ,685, , ,000 2, ,000 61,225 2,396, ,000 36, ,000 49,375 1,125, ,000 13, ,000 37, , ,000 25, , ,000 12, ,838 42,578,000 11,132,962 20,480,577 5,160,871 7,050,000 2,501,923 88,904,332 (1) General Obligation Bonds. (2) RIIB Revenue Bonds. (3) Includes restructure of 2013 Conduit Bond with $6,740,000 RIIB Bonds dated August 30, Debt Ratios and Debt Per Capita Estimated Ratio Fiscal Assessed Rate of Full Market Debt Per Bonded Debt/ Year Population (1) Value Assessment Value Bonded Debt (2) Capita EFMV ,014 $ 3,541,078, % $ 3,541,078,440 $ 42,578,000 1, % ,014 3,409,659, ,409,659,491 46,323,000 1, ,014 3,366,432, ,366,432,221 44,492,000 1, ,014 3,337,717, ,337,717,902 41,805,000 1, ,014 3,525,429, ,525,429,663 27,305, (1) US Census (2) Excludes revenue bonds. 18

22 Authorized But Unissued Debt Below is a summary of the Town s authorized but unissued debt after this issue of Bonds. General Obligation Bonds Sewer Revenue Bonds Project Bonds Issued This Issue of Bonds Unissued School Roofs $ 4,965,000 $ - $ 35,000 School Fire Code Upgrades 397,000-3,000 School HVAC 1,589,000-11,000 School Parks and Grounds 546,000-4,000 Athletic Complex 993,000-7,000 Automated Refuse Equipment 4,525, ,000 Landfill 1,955,000-3,045,000 Upper Dam 550,000-10,000 Police Station/Human Services 5,000,000 6,900, ,000 Upper Pond Dam - 150,000 - $ 20,520,000 $ 7,050,000 $ 4,190,000 Authorized Resolution Authorized Project Bonds Issued but Unissued $10,000,000 Sewer System Extensions and Improvements $2,401,000 $7,599, $9,000,000 Refinancing RIEDC Immunex Bonds and Sewer System Extensions and Improvements (Tiogue Avenue) 8,255, ,000 (1) $600,000 Sewer System Extensions and Improvements ,000 (Flat River Road and Industrial Drive Project) Total $10,656,000 $8,954,000 (1) Cannot be used for general purposes. The Town's revenue bonds can only be issued through RIIB and are special obligations payable solely from sewer system revenues and are not general obligations of the Town. Tax Anticipation Notes Under State law, the Town may borrow in anticipation of the receipt of the proceeds of the property tax due in such fiscal year. The amount of notes shall not exceed the total tax levy of the then current fiscal year. Tax anticipation notes must be payable not later than one year from their date, but notes issued for less than one year may be renewed provided such renewal notes are payable within one year for the date of the original notes. The Town has not issued Tax Anticipation Notes for cash flow purposes since 2010 and currently does not expect to borrow in anticipation of taxes for cash flow purposes. Bond Anticipation Notes The Town currently has no outstanding bond anticipation notes. Lease Obligations As of June 30, 2018, the Town had $1,627,191 lease obligations outstanding. 19

23 Overlapping Debt Water services in the Town are provided by the Kent County Water Authority ("KCWA") which has no taxing power and which issues revenue bonds secured by user fees. The Town has no direct or contingent liability for KCWA bonds. As of June 30, 2018, the total outstanding debt of KCWA as it pertains to drinking water was $26,468,549 of which Town residents are responsible for approximately 30%. There are four independent fire districts in the Town. The fire districts have taxing power and ability to issue bonds. The Town has no direct or contingent liability for district bonds. As of June 30, 2018, the four districts currently had combined outstanding debt of approximately $870,151. Financial Reporting TOWN FINANCES All Governmental Funds and Expendable Trust Funds are accounted for using the modified accrual basis of accounting. Under this method, revenues are recognized when they become both measurable and available to finance current period expenditures. Property taxes, interest and penalties are recognized as revenue when collected. Expenditures are recorded when liabilities are incurred. Budgetary Procedures The Town maintains budgetary accounting control for the General Fund. The budget is submitted by the Town Manager, then reviewed and adopted by the Town Council. The budget is subsequently presented to the voters at the Town s Financial Meeting for final passage. The budget is prepared using estimated revenues along with the reappropriation of accumulated surpluses necessary to balance the budget and to maintain a reasonable tax rate. Appropriated amounts in the operating budget which are not expended lapse at year end and revert to fund balance. However, appropriated capital expenditures do not lapse at the end of the fiscal year. The Town Charter allows the unexpended balance to be reserved for a period of three year or longer, under certain conditions. To accurately state expenditures, the Town maintains a modified accrual system to record expenses when goods are received or services performed. Purchase orders encumbered during the year are reduced to the actual liability. At the end of the fiscal year, budgetary transfers approved by the Town Council are recorded as supplemental appropriations to fund the additional requirements in operations. Revenues reported in the Town s Financial Statements are recognized when they become measurable and available, in accordance with established accounting practices allowed by using the modified accrual basis of accounting. Revenues due from other municipalities, state and federal governments are recognized within sixty (60) days of the year end, with the exception of tax revenue. The current financial position is such that additional revenues need not be recognized within the budget. Property taxes, therefore, are measurable when their respective due dates occur. Expenditures are recognized and accrued for material received and invoices on hand for all expenditures incurred during the fiscal year. Payroll liabilities are recorded on behalf of the School Department. Accruals do not include accumulated unpaid vacation, sick pay and other employee amounts, or principal and interest on general long-term debt, which are recognized when due. The Town maintains a system of General Fixed Assets. Currently, all of the Town s assets have been entered into a computer system, and have been classified by function and purpose per instruction of the Town s independent auditor. The Town establishes its General Fund budget in accordance with provisions of its charter. The budget reflected in the financial statements was adopted at the Annual Financial Town Meeting. Transfers of appropriations are also approved in accordance with the provisions of the charter. Annual operating budgets are prepared for management control in both the Municipal and School Departments. Therefore, only the General Fund has a statement of revenues and expenditures measuring budget and actual. Unexpended 20

24 appropriations of the General Fund lapse at fiscal year-end, except for capital projects, which are reserved for a three year period. The reports are prepared with comparative dates showing current year revenues, expenditures, and balance sheet accounts against prior years in order to provide an understanding of changes in the Town s financial position and operations. It has been the Town s practice not to accrue and record unpaid vacation, accumulated sick pay and other employee benefits. Such expenses are recorded when incurred. Town Budgets (Fiscal Years 2017, 2018 and 2019) State Aid ADOPTED BUDGET 2017 ADOPTED BUDGET 2018 ADOPTED BUDGET 2019 REVENUES Local Property $70,120,238 $72,289,103 $ 73,209,426 State Restricted 24,311,603 24,516,704 25,585,359 Local Non-Property 5,408,992 5,421,648 4,936,854 Grant Funding 493, TOTAL REVENUES $100,334,719 $102,227,455 $ 103,731,639 EXPENDITURES Education $68,442,965 $69,088,324 $ 70,270,869 Municipal 26,087,074 26,987,780 27,410,857 Capital 219, Public Library 987, , ,490 Debt Retirement 4,596,993 5,157,861 5,056,423 TOTAL EXPENDITURES $100,334,719 $102,227,455 $ 103,731,639 State School Basic Education Aid for Operations Pursuant to Rhode Island General Laws Sections to et seq., as amended, the State provides basic education aid to each municipality and school district in the State, subject to annual appropriation by the General Assembly. The statutes provide for reimbursement of school expenditures based on a formula which adjusts the reimbursement ratio based on the relative equalized valuation of property and median family income relative to the State as a whole. There are no assurances, however, that the Rhode Island General Assembly will continue this program or appropriate sufficient funds for its implementation. State School Basic Education Aid is subject to pro-rata reduction in accordance with State law. Under this program the Town s School Department received $23,146,889 in the fiscal year ended June 30, The Town budgeted $22,683,807 of such receipts for the fiscal year ending June 30, In 2012, the General Assembly amended the general laws to provide that basic education aid may be intercepted to pay debt service on bonds issued by the Rhode Island Health and Educational Building Corporation ( RIHEBC ) for the benefit of a municipality in the event the municipality fails to make timely payments of debt service on school construction bonds issued for the municipality through RIHEBC. State School Construction Aid Pursuant to Rhode Island General Laws Sections to , as amended, the State provides construction aid to Rhode Island municipalities for the cost of building or renovating public schools. All buildings constructed or renovated since July 1, 1949 are eligible for assistance of a minimum of 30% of the full cost of such buildings. Such assistance level may be further increased by a formula which takes into account the equalized assessed valuation and debt service burden of the particular municipality. State aid reimbursement for school construction projects is based on the share ratio established for that year by the Rhode Island Department of Education. The recently enacted funding formula also raises the minimum reimbursement percentage to 35% for the fiscal year 2012 payments and 40% for the fiscal year 2013 payments and thereafter. For the fiscal year ending June 30, 2017 the Town s share ratio is 44%. This ratio can vary from year to year. 21

25 For projects approved by the voters after June 30, 2003, the cost of interest on any bond will be reimbursed as an eligible project cost only if the bonds for these projects are issued through the Rhode Island Health and Educational Building Corporation. School housing costs subject to State aid reimbursement shall not include bond issuance costs and demolition costs for buildings, facilities, or sites deemed surplus by the school committee. The legislation authorizing State School Construction Aid is subject to future change and all State aid is subject to annual appropriation by the Rhode Island General Assembly. The Town received $492,806 for the fiscal year ended June 30, The Town expects to receive $433,757 for the fiscal year ended June 30, Other State Aid Shown below is a summary of various state aid revenues credited to the Town's General Fund (excluding school operations and construction aid, which is accounted for in the Special Revenue Fund). FY2016 Actual FY2017 Actual FY2018 Actual FY2019 Budget Telephone Tax $450,490 $450,490 $696,676 $1,196,996 Excise Phase-Out Tax 246, , , ,244 Meals/Beverage Tax 389, , , ,650 Hotels Tax 96,031 98, , ,738 Retirement Programs All full-time employees of the Town hired before July 1, 2013 are covered by one of six separate pension plans, each of which are summarized below. For additional discussion of the Town s Retirement Programs, see Note 15 of the Town s 2018 Financial Statements included as APPENDIX B hereto. Town-Administered Municipal Retirement Plans For employees hired prior to July 1, 2013, the Town contributes to the Town s Municipal Employee Defined Benefit Retirement Plan (the Town Defined Benefit Plan ), which is a single-employer public employee defined benefit retirement system. The Town Plan was established by the Town in accordance with the Town Charter and federal and State statutes. The Town has delegated the authority to manage the plan assets to Fidelity Investments. For employees hired after July 1, 2013, the Town contributes to the Town s Municipal Employee Defined Contribution Retirement Plan (the Town Defined-Contribution Plan ), which is a single-employer public employee defined contribution retirement system. The Town Defined Contribution Plan was established by the Town in accordance with the Town Charter and federal and State statutes. The Town has delegated the management of this plan to International City Management Association-RC (ICMA-RC). Substantially all employees of the Town, except police, school employees and school administrators, are covered by either of these municipal plans. Participants who became active members of the Town Defined Benefit plan contribute specified percentages of their annual compensation to the plan. As of July 1, 2018, the Town Defined Benefit Plan had 87 active members, 39 inactive members, 76 retired members; and as of the same date, the Town Defined Contribution Plan had 2 active members, 0 inactive members, and 0 retired members. Under the provisions of the Town Defined Benefit Plan, benefits vest after ten years of creditable service. An employee may retire at age 62 with ten years of creditable service for full benefits, or at age 55 with ten years of creditable service for reduced benefits. Benefits begin vesting after four years of service and become fully vested after ten years of service. An employee s annual pension is determined by multiplying 2% of his/her average monthly pay by a benefit service rate. The average monthly pay is determined using the five highest consecutive pay years out of the ten latest pay years which give the highest average. The benefit service rate is the sum of the total periods of service. Under the provisions of the Town Defined Contribution Plan, employees hired on or after July 1, 2013 shall participate in a Defined-Contribution Plan in which the Town will match the employee contribution, up to 10% of an employee's annual base wages. The terms of the Plan will be negotiated in accordance with the Defined Contribution Plan rather than the Defined Benefit Plan. 22

26 In addition to pension benefits, the Town Plans also provide disability and death benefits. In order to receive the disability benefits, an employee must have at least ten years of creditable service when he/she becomes disabled and the employee must be totally disabled. Monthly disability benefits equal 25% of the employee s average monthly pay. Payments continue for the duration of the disability or until the employee reaches his early or normal retirement date. Death benefits are available to all qualified employees. An employee is qualified if he/she, 1) dies before retirement benefits begin, 2) was married for the full year before his/her death, and 3) if becoming an active member on or after July 1, 1991, has an account, or if becoming an active member prior to July 1, 1991, has a vesting percentage greater than zero. The death benefit equals 50% of the survivor s benefit and is payable as of the earliest date the employee could have retired after the date of death. All active employees hired before July 1, 2013 are required to contribute 10% of compensation to the Town Defined Benefit Plan. The Town makes annual contributions to the Town Defined Benefit Plan based on its legally adopted budget. Over the past six years, the Town has made the following contributions to the Defined Benefit Plan: Town Defined Benefit Plan - General Employees Hired Before July 1, 2013 Actuarially Fiscal Year Determined Contribution Actual Contribution Percent Contributed Unfunded Liability* Funded Ratio 2018 $845,691 $845, % $14,108, % , , ,669, , , ,170, , , ,434, ,124 1,086, ,111, ,068, , ,967, *Unfunded liability is calculated with an assumed rate of return of 7.00% for fiscal years and payroll growth of 4.00% for fiscal years The Town budgeted a contribution to the Town Defined Benefit Plan in the amount of $875,686 for fiscal year 2019, which represents 100% of the actuarially determined contribution. A contribution to the Town Defined Contribution Plan in the amount of $93,147 was made in fiscal year 2018 and $115,000 has been budgeted for fiscal year Town-Administered Police Pension Plan The Retirement Income Plan for the Police Officers of the Town of Coventry Pension Plan (the Police Plan ) is a single-employer defined benefit pension plan. The plan is governed by the Town which may amend plan provisions, and which is responsible for the management of the assets. The Town has delegated the authority to manage the plan assets to Fidelity Investments. As of July 1, 2018, the Police Plan has 57 active members, 10 inactive members and 81 retirees and beneficiary members. Under the provisions of the Police Plan, benefits vest at various times depending on the date of hire. An employee may retire with twenty years of creditable service if employed prior to January 1, 1994, twenty-three years if employed on or after January 1, 1994, or twenty-five years of creditable service and age 55 if employed on or after January 1, A participant s earned benefit is equal to 50% of earnings. For employees employed before January 1, 1994, the retirement benefit shall equal 50% of base pay, holiday pay, longevity pay, vacation time paid at termination, and overtime. In addition, participants employed prior to January 1, 1994 receive a 2.5% compounded COLA. For employees hired between January 1, 1994 and December 31, 2012, the retirement benefit shall be equal to fifty percent (50%) of base pay and longevity pay only, earned during the last twelve months of service. The retirement benefit for participants employed on or after January 1, 2013 shall be equal to fifty percent (50%) of the average base pay of the five (5) years immediately preceding retirement. The Town shall provide retirees who were hired on or after January 1, 1994 an annual 1.50% non-compound COLA or a COLA based upon the National Consumer Price Index for clerical workers (known as CPI-W) published by the Bureau of Labor Statistics whichever is higher. Under the provisions of the Police Plan, all officers who were members of the Police Department prior to July 1, 23

27 1989 are required to contribute 9.5% of total annual compensation from all sources as of July 1, 2016 and 11% effective July 1, Any participants who were hired between January 1, 1994 and December 31, 2012 are required to contribute 11% of their base pay as of July 1, 2016 and 12% effective July 1, Participants hired on or after January 1, 2013 are required to contribute 12% of base pay. In addition to pension benefits, the Police Plan also provides disability and death benefits. In order to receive disability benefits a participant must become disabled in the line of duty and that disability must be expected to last at least two years. In this situation, the participant will receive a 66 2/3% disability retirement benefit on the earlier date of completion of ten years of service or the date at which the participant reaches his normal retirement date. If the disability is not in the line of duty, but it is expected that the participant will be unable to return to active duty and the participant has ten years of service with the Town, the participant is entitled to a 25% disability benefit for up to one year. If after one year, the participant is still unable to work, the participant is automatically retired. If a participant dies before his normal retirement date, his beneficiary will receive a single sum payment of the employee s account, accumulated with interest. If death occurs after the normal retirement date, but before actual retirement, the participant s surviving spouse will receive a monthly benefit equal to the retirement benefit that participant would have received if retired on the date of death. If death occurs after the participant s retirement date, a death benefit is paid to the participant s surviving spouse, dependent child, or beneficiary. The Town makes annual contributions to the Police Plan based on its legally adopted budget. Over the past six years, the Town has made the following contributions: Police Plan Fiscal Year Actuarially Determined Contribution Actual Contribution Percent Contributed Unfunded Liability* Funded Ratio 2018 $4,808,076 $4,808, % $64,301, % ,656,200 4,715, ,386, ,565,873 4,619, ,801, ,495,252 4,152, ,531, ,481,020 4,563, ,090, *Unfunded liability is calculated with an assumed rate of return of 7.00% for fiscal years and payroll growth of 3.55% for fiscal years Figures provided from Milliman actuarial report dated October 19, The Town budgeted a contribution to the Police Plan in the amount of $4,957,710 in Fiscal year 2019, which represents 100% of the actuarially determined contribution. Locally Administered Pension Plans Experience Study As a result of legislation passed by the Rhode Island General Assembly in 2011, cities and towns were required to complete an experience study of any locally administered pension plan by April 1, The Town s experience study was completed for its Municipal and Police Plans and was submitted to the State pursuant to this legislation. Due to the fact that both the Municipal Plan and Police Plan were determined to be in critical status (unfunded ratios below 60%), the Town was required to submit a Funding Improvement Plan (FIP). The Town accepted the recommendations of the study and submitted a Funding Improvement Plan to the State pursuant to Rhode Island General Laws Funding Improvement Plan Municipal Pension Plans Based on the results of the Municipal Plan experience study, the actuary recommended a fiscal year 2013 contribution of $1,068,188 with a 22-year amortization. The Town contributed $559,077 in fiscal year 2013, or 52.3% of the required contribution. As part of its Funding Improvement Plan, the Town agreed to increase its annual ARC payment beginning in fiscal year 2014 by at least 20% until reaching 100% by fiscal year 2016; which was a year earlier than anticipated. The Town has annually increased its percent funding of the ARC as required as follows: FY %, FY %, FY16 100%, FY17 100% and FY18 100%. For FY19, 100% is budgeted and expected to be contributed. 24

28 Additionally, the Town also passed a resolution in 2012 which states that the Town will appropriate general fund reserves in excess of 10% of its annual operating budget toward additional pension contributions. The Town has made the following additional contributions to the Municipal Pension Plan since the adoption of this resolution: FY13 $213,977 FY14 $361,000, FY15 $50,365, FY16 - $12,567. For FY17, the Town passed a resolution to modify the 2012 resolution so that 25% of the reserves in excess of 10% of its annual operating budget toward additional pension contributions and the remaining 75% would be used to fund a Capital Improvement Program. For FY17, $13,916 was budgeted and contributed as an additional contribution to the Municipal Pension Plan. For FY18 and FY19, no additional pension contributions were budgeted. For FY16, the Town contributed $852,707, or 100% of the ARC of $852,707. In addition to this contribution, the Town made an additional contribution of $12,567 from fund balance. For FY17, the Town budgeted and contributed $821,825, or 100% of the ARC of $821,825. In addition to this contribution, the Town budgeted and contributed an additional $13,916 from fund balance. For FY18 the Town budgeted and is expected to pay 100% of the ARC of $845,691. No additional contributions beyond the ARC are expected to be made in FY18 and FY19. The Town is paying 1/12th of the budgeted amount on a monthly basis, and is on schedule to make the entire budgeted contribution. Because of concessions that were negotiated in its FY13-FY16 contract with its Municipal employees union, the ARC for FY15 decreased to $841,584 and the Town reached 100% funding of its annual ARC payment in FY16 instead of FY17. Finally, the unfunded portion amortization will be reset to 30 years. Based on these changes, the Town would be out of critical status with a 60% funded ratio in 19 years and 80% funded in 26 years. Funding Improvement Plan Police Pension Plans Based on the results of the Police Plan experience study, the actuary recommended a FY13 contribution of $4,784,700 with a 22-year amortization. The Town contributed $2,274,700 in fiscal year 2013 or 47.5% of the required contribution. As part of its Funding Improvement Plan, the Town agreed to increase its annual ARC payment beginning in fiscal year 2014 by at least 20% until reaching 100% which was expected by fiscal year The Town had annually increased its percent funding of the ARC as required as follows: FY %, FY %, FY16 100%, FY17 100% and FY18 100%. For FY19, 100% is budgeted and expected to be contributed. Additionally, the Town also passed a resolution in 2012 which states that the Town will appropriate general fund reserves in excess of 10% of its annual operating budget toward additional pension contributions. The Town has made the following additional contributions to the Police Plan since the adoption of this resolution: FY13 $986,023 FY14 $1,539,000, FY15 $214,712, FY16 - $53,573. For FY17, the Town passed a resolution to modify the 2012 resolution so that 25% of the reserves in excess of 10% of its annual operating budget toward additional pension contributions and the remaining 75% would be used to fund a Capital Improvement Program. For FY17, $59,328 was budgeted and was contributed. For FY18 and FY19, no additional pension contributions were budgeted. For FY17, the Town budgeted and contributed $4,656,200, or 100% of the ARC. In addition to this contribution, the Town budgeted and contributed an additional $59,328 from fund balance. For FY18, the Town budgeted and is expected to pay 100% of the ARC of $4,808,076. No additional contributions beyond the ARC are expected to be made in FY18.The Town is paying 1/12th of the budgeted amount on a monthly basis, and is on schedule to make the entire budgeted contribution. As with the Municipal Pension, the Town had reached 100% funding of its annual ARC payment in FY16 instead of FY17. In addition, the unfunded portion amortization will be reset to 30 years. Based on these changes, the Town would be out of critical status with a 60% funded ratio in 19 years and 80% funded in 24 years. Coventry School Employees Pension Plan (Non Teacher) The Coventry Teacher's Alliance School Related Personnel Pension Plan ( CTASRPP ) is a single-employer defined benefit pension plan. The plan is governed by the Town which may amend plan provisions, and which is responsible for the management of the assets. Under the provisions of the plan, benefits vest at various times depending on the date of hire. The plan covers school related personnel (non-teaching personnel) who are members of the bargaining unit. Each school employee who is a member of the Union shall be a participant of the plan. Participants contribute 8% of their annual compensation received in a Plan 25

29 year. The Town makes two types of annual contributions to the plan. The first such amount as is set forth under the relevant terms of the collective bargaining agreement between the Employer and the Union and is equal to 12.75% of the regular payroll of employees subject to the Plan. The second such amount shall be annually determined by an actuary for the Plan. As of July 1, 2016 employee membership data related to this plan was as follows: Active members 205 Inactive members 25 Retired members CTASRPP provisions include the following: Creation of a New Plan with modifications to the current Plan's pension-benefit structure, the Town will pay the remaining actuarial-determined contribution, the Coventry School Department will be responsible for the administration of the New Plan, and the Trustees will not have a role once the New Plan is adopted by all parties. The Tentative Agreement was subject to and conditioned upon agreement on a final plan of action for the Coventry School Employees Pension Plan and Trust and had no effect unless and until final agreement is reached on all issues and final ratification had been received from the Coventry Town Council, the Coventry School Department School Committee, and the Trustees of the Coventry School Employees Pension Plan and Trust. A Final Plan A Plan Document was drafted and presented to the parties in December Some changes were made to the draft; and in late January 2016 the attorneys for the each of the parties recommended that the Final Plan Plan Document be approved. In February 2016, the Town Council, Coventry School Department School Committee, and Trustees of the Coventry School Employees Pension Plan and Trust each voted to adopt the SRP Final Plan Plan Document. The Town Council also voted to adopt a Funding Improvement Plan which will bring the Plan above 60% funding by 2033 as required by the State of Rhode Island. The School Department took control of the Plan`s assets and the day-to-day administration of the Plan in November/December An actuarial valuation of the Plan as of July 1, 2018 was delivered to the Town on December 6, The UAAL as of July 1, 2016 is reported as $16,024,086; however, a change in the discount rate assumptions increased the UAAL to $17,730,375 as of July 1, 2018 It is important to note that the financial terms of the Final Plan Plan Document have been adhered to since July 2015 as the modifications w e r e m a d e to the Plan's pension-benefit structure and the Town has been paying the remaining actuarial-determined contribution since FY16. Net Pension Liability of the Coventry Teachers Alliance School Related Personnel Pension Plan June 30, 2018* Total pension liability $30,972,783 Plan fiduciary net position (13,242,408) Town's net pension liability $ 17,730,375 Plan fiduciary net position as a percentage of the total pension liability 42.75% * Assumes annual growth rate of 4.00% and investment rate of return of 6.50% 26

30 Over the past six years, the Town has made the following required contributions: Fiscal Year Annual Required Pension Contribution: Town (1) CTASRPP Annual Required Pension Contribution: Employees (1) 27 Percent Contributed 2018 $708,523 $415, % , , , , , , , , , , (1) Contribution amounts are not actuarially determined but contractually committed. A Town contribution in the amount of approximately $750,000 has been budgeted for fiscal year This contribution represents 100% of the contractually committed costs. For additional discussion of the CTASRP Plan, see Note 15 of the Town s 2018 Financial Statements. In addition to the contractually obligated amounts, the Town has made the remaining actuarially determined contribution to the CTASRPP for FY18 of approximately $412,000. For FY19, $412,000 is budgeted and expected to be contributed. School Administration Plan The Town contributes to the School Administration Pension Plan (the School Administration Plan ). The School Administration Plan is a defined contribution plan that covers certain school administrators who do not qualify for other school pension plans. The School Administration Plan was established by the Town in accordance with the Town Charter and federal and State statutes. The Town makes contributions to the School Administration Plan based on the Town's contribution requirements for the School Plan. In addition, participants may contribute a percentage of their annual salary to the School Administration Plan based on applicable tax law. Under the provisions of the School Administration Plan, benefits vest in the Town's contributions after three years of creditable service. The School Administration Plan also provides disability and death benefits. As of June 30, 2018, the School Administration Plan had 10 active members and 1 inactive member. Over the past six years, the Town has made the following required contributions: Fiscal Year A Town contribution in the amount of approximately $76,000 has been budgeted for fiscal year This contribution represents 100% of the annual actuarially determined contribution. School Teachers' Retirement Plan School Administration Plan Actuarially Determined Contribution Actual Contribution 2018 $73,225 $73, % ,117 69, ,797 67, ,186 44, ,460 60, ,298 45, Percent Contributed The Town provides retirement benefits to its public school teachers through its participation in the Employees Retirement System of Rhode Island ( ERSRI ), a statutory, mandatory, statewide, cost-sharing multi-employer defined benefit plan, which first covered State teachers on July 1, ERSRI is administered as a unified statewide system by the

31 State Retirement Board, the composition of which is set forth in the pertinent State statute. The assets are held in the custody of the State Treasurer as an undivided single fund. Rhode Island General Law currently sets the defined benefit contribution rates of participating employees at 3.75% of salary. Annual required contributions by both employers and the State on behalf of those employees are determined by actuaries and assessed as a percentage of participants payroll. The required contributions include (a) normal costs; (b) payments to amortize the unfunded frozen actuarial accrued liability as of June 30, 1999 over 30 years initially, but in conjunction with the implementation of RIRSA the amortization period was reset to 25 years as of June 30, 2010; and (c) interest on the unfunded frozen actuarial liability. As prescribed by Rhode Island General Laws, the State pays the entire portion of the defined benefit annual required contribution attributable to the costs of contributions deferred by the State in prior years, plus 40% of contributions assessed to employers on payroll not reimbursable through federal programs. Effective with the June 30, 2011 actuarial valuation, the funding method was changed to the Individual Entry Age Cost Method in order to be consistent with the Act and GASB statement No. 27 standards. The ERSRI does not maintain separate data for each of its participants. The ERSRI s website contains additional information ( The actuarial valuation prepared for ERSRI by Gabriel, Roeder, Smith & Company uses the Entry Age Normal (EAN) actuarial cost method. Valuations under this method assume a valuation date of June 30th of each plan year. This is the date as of which both the actuarial present value of future benefits and the actuarial value of assets are determined. The valuation assumes an annual salary increase on a scale of age/service. In addition, other actuarial assumptions are made for post-retirement increases and other contingencies as set forth in the published annual reports of the State Retirement Board. The following are comparative highlights for 2014 through 2018 for the Teachers Retirement System as a whole: 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 Active Participants 13,297 13,310 13,206 13,272 13,266 Pensioners & Beneficiaries 11,320 11,211 11,087 10,902 10,838 Inactive Participants 3,643 3,501 3,313 3,185 3,040 Market Value of Assets $ 3,781,560,920 $ 3,696,400,551 $ 3,733,025,598 $ 3,730,047,183 $ 3,875,901,034 Employer Contributions $ 239,092,095 $ 233,828,518 $ 225,569,556 $ 217,902,736 $ 196,927,737 Member & Other Misc. Contributions 50,768,637 50,960,566 50,458,325 37,487,177 37,377,996 Total Contributions $ 289,860,732 $ 284,789,084 $ 276,027,881 $ 255,389,913 $ 234,305,733 Investment income 282,535, ,115, ,477, ,523,894 Total Income Available for Benefit Payments $ 572,396,137 $ 675,904,097 $ 276,027,881 $ 336,866,925 $ 753,829,627 Benefit Payment $ (486,818,998) $ (490,467,141) $ (490,467,141) $ (478,553,346) $ (478,700,303) Transfer and Other Adjustments $ (416,770) $ 427,703 $ 252,229 $ 145,190 $ (290,471) Excess of Income Over Expenses $ 85,160,369 $ 185,864,659 $ (214,187,031) $ (141,541,231) $ 274,838,853 Funded Ratio 54.9% 54.8% 58.3% 58.8% 59.6% Fiscal Year 2013 includes results of pension reform. Compiled from Employees' Retirement System of Rhode Island - Actuarial Valuation Reports as of June 30, According to the statutory funding schedule, the combined contributions required each year by the Town and the State will remain relatively level as a percent of payroll as the System moves toward funding the full actuarial liability. Ultimately, however, because the actuarial funding results in the accumulation of reserves that are invested, the required appropriation will be significantly less than would be required if the Teacher s Retirement System was on a pay-as-you-go basis. The actuarial costs of the retirement benefits are partially funded by employee contributions of 9.50% of the actuarial costs of the retirement benefits effective July 1, The actuary determines the net employer actuarial costs annually and as provided by the State Retirement Board to the Department of Administration. Contributions are reported as a percent of payroll, payable in part by the State and in part by the Town. The split between State and the Town is specified in State statute. For fiscal year 2018, the State paid 40% and the Town paid 60%. 28

32 Actuarial costs and liabilities, as shown in the summary presentation above, are determined in the aggregate for the ERSRI. Accordingly, employer contributions are first determined in the aggregate for all participating employers in this multi-employer system and are then expressed as a percentage of the aggregate participating payroll. For fiscal year 2018, the Town applied 60 percent of this factor to its participating payroll (the remaining 40 percent of the employer cost is contributed by the State as well as the full cost of deferred contributions). Over the past six years, the Town has made the following required contributions: Fiscal Year Employees Retirement System of Rhode Island (Teachers) Annual Required Pension Cost 29 Actual Contribution Percent Contributed 2018 $5,710,578 $5,710, % ,651,591 5,651, ,021,844 5,021, ,610,827 4,610, ,364,664 4,364, ,010,296 4,010, A contribution in the amount of approximately $5,850,000 has been budgeted for fiscal year This contribution represents 100% of the annual required pension costs. At June 30, 2018, the Coventry School Department reported a liability of $5,625,341 for its proportionate share of the net pension liability that reflected a reduction for contributions made by the State. Litigation Challenging Pension Reform In recent years, the Rhode Island General Assembly made certain reforms to ERSRI and the Municipal Employees Retirement System administered by the State for general and municipal employees ( MERS ). The reforms have resulted in numerous lawsuits against the State brought by current and retired employees, as well as their unions. These lawsuits, some of which are still pending, are described below. The State is vigorously defending any liability in all pending pension reform litigation. In May of 2010, a number of unions representing State employees and teachers filed a lawsuit in the State s superior court (the Superior Court ) challenging the pension reform legislation enacted by the General Assembly in 2009 and In June of 2012, certain unions, active employees, retired State employees and associations of retired State and municipal employees who maintain they are current beneficiaries of ERSRI filed five separate lawsuits in Superior Court challenging the RIRSA. In April of 2014, a seventh lawsuit was filed in Superior Court by certain individual retired State workers and teachers. In September of 2014, the Cranston Firefighters, IAFF Local 1363, AFL-CIO and the International Brotherhood of Police Officers, Local 201 (Cranston Police), which had been parties to the 2012 lawsuit challenging RIRSA, withdrew from the original lawsuit and each filed separate lawsuits in Superior Court challenging RIRSA, resulting in nine lawsuits overall. These nine lawsuits were ultimately consolidated. In March of 2015, the Superior Court entered an order appointing a Special Master, tasking him with certain duties, including addressing all discovery issues, motions, and assisting the parties in narrowing and/or resolving disputed issues by agreement, subject to further approval by the Court. In April of 2015, the Special Master presented an interim report to the Superior Court stating that a settlement has been reached in five of the nine consolidated pension cases. The Special Master reported that the proposed settlement would impact 58,901 employees. A class action was filed for settlement purposes and in June of 2015, the Superior Court issued its decision approving the proposed settlement. The General Assembly passed legislation to carry out the settlement, which was enacted into law on June 30, 2015 ( New RIRSA ), and the Superior Court entered final judgments in July of The employees that are members of the unions that brought the non-settled consolidated cases will receive the same benefits afforded to the settling parties. In July of 2015, the State moved to dismiss three of the remaining six cases Cranston Firefighters, IAFF Local 1363, AFL-CIO v. Chafee; International Brotherhood of Police Officers, Local 301, AFL-CIO v. Chafee and City of Cranston Police Officers, International Brotherhood of Police Officers, Local 301, AFL, CIO v. Chafee for lack of justiciability on the grounds that because RIRSA was amended by New RIRSA, the plaintiffs claims were moot. The Superior Court granted the motion and dismissed the three cases without prejudice.

33 Nine appeals from two of the July 2015 judgments were filed with the State s Supreme Court (the Supreme Court ). The appeals do not affect the implementation of New RIRSA. Four of the nine appeals were dismissed by the Supreme Court. The remaining appeals were argued in April In May 2018, the State prevailed with the Supreme Court affirming the Superior Court s decision and judgment in all respects. In March of 2016, Cranston Firefighters, IAFF Local 1363, AFL-CIO and International Brotherhood of Police Officers, Local 301, AFL-CIO jointly filed a new lawsuit in the United States District Court for the District of Rhode Island captioned Cranston Firefighters, IAFF Local 1363, AFL-CIO, et al. v. Raimondo, et al. In that case, the Cranston police and firefighters unions claim that RIRSA and New RIRSA violate the Contracts Clause, Takings Clause and Due Process Clause of the United States Constitution. They also sought a declaration concerning the effect of the class action settlement on Cranston police and firefighter retirees. In March of 2017, the District Court granted the State s motion to dismiss all counts in the plaintiffs complaint. The plaintiffs subsequently filed an appeal with the United States Court of Appeals for the First Circuit, which issued its decision on January 22, 2018 affirming the District Court s decision to grant the State s motion to dismiss. The appeal period has expired. In addition to the foregoing cases, in September 2014, another case challenging RIRSA was commenced by the Rhode Island State Troopers Association and Rhode Island State Troopers Association ex rel. Kevin M. Grace and Ernest E. Adams in Superior Court. The State has answered the complaint in that action, which remains pending. There is no trial date set. The State intends to vigorously defend this lawsuit. A summary of the changes resulting from the enactment of New RIRSA can be found on the website of the Employees Retirement System of Rhode Island using the following link: Other Post-Employment Benefits In addition to pension benefits, cities and towns may provide retired employees with health care and/or life insurance benefits. The Governmental Accounting Standards Board ( GASB ) recently promulgated its Statement Nos. 43 and 45, which will for the first time require public sector entities to report the future costs of these non-pension, postemployment benefits in their financial statements. GASB 74 and 75 add disclosure requirements but also require a 20 year municipal bond rate to discount the unfunded portion while also requiring the a long-term rate of return of plan investments. The affect will be an overall increase to reported unfunded liabilities associated with OPEB. These new accounting standards do not require pre-funding such benefits, but the basis applied by the standards for measurement of costs and liabilities for these benefits is conservative if they continue to be funded on a pay-as-you-go basis and will result in larger yearly cost and liability accruals than if such benefits were pre-funded in a trust fund in the same manner as traditional pension benefits. The Town implemented the new GASB 43 and 45 reporting requirements for other post-employment benefits beginning with the fiscal year. The first year implementing the GASB 74 and 75 reporting regulations is fiscal year. The unfunded liability as of July 1, 2017 was $17,107,002. The Town pays for post-employment benefits on a pay-as-you-go basis. As of July 1, 2017, 469 School Department retirees and their spouses, 1 Town retiree and 17 Police retirees and their spouses meet the eligibility requirements. The Town pays for the other post-employment benefits on a pay-as-you-go basis. The annual medical and dental benefits premium cost for fiscal year ended June 30, 2018 was $909,397 for Town employees. Over the past six years, the Town has made the following required contributions: Other Post-Employment Benefits Fiscal Year Annual Required Contribution Actual Contribution Percent Contributed Unfunded Liability (1) Funded Ratio 2018 $1,605,868 $916,658 57% $17,107,002 0% ,471, , ,318, ,501, , ,319, ,464, , ,443, ,195, , ,443, ,214, , ,523,000 0 *Unfunded liability is calculated with an assumed rate of return of 4.00% and payroll growth of 4.00%. (1) An OPEB valuation is prepared on a bi-annual basis. 30

34 Capital Improvement Program Annually all commissions, agencies and departments of the Town submit to the Planning Board information on all capital projects planned or proposed for acquisition during the following five fiscal years. The Planning Board then reviews all proposals with the departments submitting them and develops a recommended five-year program of capital improvements for submission to the Town Manager. The Town Manager in turn files the program with the Town Council. In doing so the Board considers these factors: 1. The relative need for each project as shown in the facts presented by the agency; 2. The relationship of the project to plans for the development of the Town; 3. The relationship of the project to other projects; and 4. The Town s ability to finance the project. Capital projects are those which fall into at least one of these categories: 1. Acquisition or lease of land. 2. Construction of new buildings or facilities, including engineering design or other preconstruction costs. 3. Improvements or additions to existing buildings or facilities, not including annual replacement or items of routine maintenance and repair. 4. Purchase of any equipment costing over $5,000 or having a useful life of more than two years. A summary of the Town s Capital Improvement Program appears below*: Fiscal Year Police $ 35,000 $ 35,000 $ 65,000 $ 84,000 Public Works Engineering (810) 202, , ,000 - Building Official (820) Roads & Bridges (830) 1,290,000 1,549,125 1,489,000 1,250,000 Snow Removal (840) 20,500 26,500 35,210 - Building Maintenance (850) 34, Refuse Collection (860) 145, ,000 - Vehicle Maintenance (880) 32, ,961 Total Public Works 1,758,500 2,110,625 2,234,210 1,423,961 Parks & Recreation 365, , ,000 18,250 Library Human Services Capital Reserve Fund Total CIP $ 2,123,800 $ 2,317,125 $ 2,404,210 $ 1,442,211 * CIP provided from Planning Commission February 2018 plan. Financial Town Meeting voted not to fund improvement plan for FY 19. Resolution describes $0 funded for Capital Improvements. 31

35 Reporting Requirements of Municipalities and School Districts In June 2003, the Rhode Island General Assembly passed new financial reporting requirements for municipalities in order to ensure that municipalities and school districts monitor their financial operations on an ongoing basis and to prevent potential budget deficits (Rhode Island General Laws Sections et seq. (the "Financial Reporting Act")). Reporting The chief financial officer of the municipality must submit monthly reports to the municipality's chief executive officer, each member of the city or town council, and school district committee certifying the status of the municipal budget, including the school department budget or regional school budget. The chief financial officer of the municipality must also submit quarterly reports to the State Division Municipal Finance, the Commissioner of Education and the Auditor General certifying the status of the municipal budget. The chief financial officer of the school department or school district shall certify the status of the school district's budget and shall assist in the preparation of these reports. If any of the quarterly reports project a year-end deficit, the chief financial officer of the municipality must submit a corrective action plan, providing for the avoidance of a year-end deficit, to the State Division of Municipal Finance, the Commissioner of Education and the State Auditor General on or before the last day of the month succeeding the close of the fiscal quarter. If, at the end of the fiscal year, the chief financial officer determines that it is likely that the city or town's general fund or combined general fund and unrestricted school special revenue fund will incur a deficit, the municipality must notify the State Auditor General and the State Division of Municipal Finance and immediately develop a plan to eliminate the accumulated year-end deficit by annual appropriation over no more than five (5) years in equal or diminishing amounts. This plan must be submitted to the State Auditor General for approval. Restrictions and Requirements Except as provided in Chapter 45-9 of the Rhode Island General Laws, no municipality can sell long-term bonds in order to fund a deficit without prior approval by the State Auditor General and the Director of the Rhode Island Department of Revenue. No municipality can incur expenditures nor obligate the municipality to expend unbudgeted amounts in excess of $100,000 without first notifying the city or town council of the proposed expenditure and identifying the source of funding. Any such expenditure must be included in the chief financial officer's monthly report. No school committee or school department can incur accumulated unbudgeted expenditures in excess of $100,000 without notifying the chief financial officer of the municipality of the proposed expenditure and identifying the source of funding. Any such expenditure must be included in the chief financial officer's monthly report. School committees, boards or regional school districts that are independent government entities within a municipality must cooperate in providing to the chief financial officer all information needed to formulate his or her reports and the deficit elimination plan. Remedies If a municipality does not comply with the requirements of the Financial Reporting Act, the State Auditor General or State Division of Municipal Finance, through the State Director of Revenue, may elect any or all of the following remedies: - Petition the Superior Court for mandatory injunctive relief seeking compliance with the provisions of the Financial Reporting Act; - In the event a municipality fails to provide a year-end deficit elimination plan, implement a budget 32

36 review commission pursuant to Rhode Island General Laws Section ; or - Withhold State Aid. If a school committee or board fails to cooperate with the municipality or provide all information requested by the chief financial officer needed to formulate a plan: -The State Auditor General or the State Director of Revenue may petition the Superior Court to order the school committee or board to cooperate; and -The State Director of Revenue may also direct the Rhode Island Controller and General Treasurer to withhold state aid from a school committee until the school committee or board cooperates in the formulation of the plan. The Town has not been advised by the State Auditor General or the State Director of Revenue that it is not in compliance with the Financial Reporting Act. State Oversight On June 11, 2010, the Rhode Island General Assembly enacted An Act Relating to Cities and Towns Providing Financial Stability (the Financial Stability Act ) the purpose of which is to provide a predictable and stable mechanism for the State to work with cities and towns undergoing financial distress that threatens the fiscal well-being, public safety and welfare of such cities and towns, or welfare of other cities and towns or the State, in order to preserve the safety and welfare of citizens of the State and their property and the access of the State and its municipalities to the capital markets. The Financial Stability Act prohibits municipalities from filing for judicial receivership and clarifies that the Superior Court has no jurisdiction to hear such matters. The Financial Stability Act gives the State, acting primarily through the Department of Revenue, the power to exercise varying levels of support and control depending on the circumstances. It creates three levels of State oversight and control: Level 1--Fiscal Overseer, Level II-- Budget Commission, and Level III -- Receiver. The State Director of Revenue, in consultation with the State Auditor General, may skip fiscal overseer and budget commission by appointing a receiver in a fiscal emergency. Fiscal Overseer (Level 1) A fiscal overseer may be appointed by: (1) request of the municipality, which request is approved by the State s Division of Municipal Finance and the Auditor General; (2) the State Director of Revenue, if: (i) the Director of Revenue, in consultation with the Auditor General, finds that any two or more of the following events have occurred; or (ii) the Director of Revenue finds, in his or her sole discretion, that any two of the following events have occurred which are of such a magnitude that they threaten the fiscal wellbeing of the city or town, or diminish the city's or town's ability to provide for the public safety or welfare of its citizens: The city or town projects a deficit in the municipal budget in the current fiscal year and again in the upcoming fiscal year The city or town has not filed its audits with the Auditor General by the deadlines required by law for two (2) successive fiscal years (not including extensions authorized by the Auditor General) The city or town has been downgraded by one of the nationally recognized statistical rating organizations The city or town is otherwise unable to obtain access to credit markets on reasonable terms The city or town does not promptly respond to requests made by the Director of Revenue, or the Auditor General, or the chairpersons of the house or senate finance committees for financial information and operating data necessary to assess the fiscal condition of the city or town The Director of Revenue may also appoint a fiscal overseer for the city s or town s failure to comply with the financial reporting and action plan requirements relating to budget deficits. A fiscal overseer acts in an advisory capacity to municipal officials, approves budgets and reports to State officials regarding progress. 33

37 Budget Commission (Level II) A budget commission may be established by request of a municipality or without such a request, if the fiscal overseer reports to the State Director of Revenue that the city or town is unable to present a balanced municipal budget, faces a fiscal crisis that poses an imminent danger to the safety of the citizens of the city or town or their property, will not achieve fiscal stability without the assistance of a budget commission, or the tax levy of the fiscal year should not be approved, or otherwise determines that a budget commission should be established. A budget commission is composed of five (5) members: three (3) designees of the Director of Revenue, the elected chief executive officer of the city, and the president of the city or town council (or in cities or towns in which the elected chief executive officer is the president of the city or town council, then the appointed city or town manager). A budget commission has more significant powers over financial matters, including but not limited to the power to: Amend, formulate and execute annual and supplemental municipal budgets and capital budgets; Reorganize, consolidate or abolish municipal departments, commissions, authorities, boards, offices or functions; Issue bonds, notes or certificates of indebtedness to fund a deficit of the city or town, to fund cash flow and to finance capital projects. Receiver (Level III) The State Director of Revenue may appoint a receiver if the budget commission recommends appointment of a receiver after concluding that its powers are insufficient to restore fiscal stability to the city or town. A receiver may exercise any function or power of any municipal officer, employee, board or commission and has the power to file on behalf of a city or town for bankruptcy in federal bankruptcy court. The Town is not currently, and has never been, subject to State oversight pursuant to the Financial Stability Act. TAX EXEMPTION In the opinion of Locke Lord LLP, Bond Counsel to the Town ( Bond Counsel ), based upon an analysis of existing laws, regulations, rulings, and court decisions, and assuming, among other matters, compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the Code ). Bond Counsel is of the further opinion that interest on the Bonds will not be included in computing the alternative minimum taxable income of Bondholders who are individuals. Bond Counsel expresses no opinion regarding any other federal tax consequences arising with respect to the ownership or disposition of, or the accrual or receipt of interest on the Bonds. The Code imposes various requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. Failure to comply with these requirements may result in interest on the Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Bonds. The Town has covenanted to comply with such requirements to ensure that interest on the Bonds will not be included in federal gross income. The opinion of Bond Counsel assumes compliance with these requirements. Bond Counsel is also of the opinion that, under existing law, income from the Bonds is free from taxation by the State or any political subdivision or other instrumentality of the State, although the Bonds and the income therefrom may be included in the measure of certain Rhode Island corporate and business taxes. Bond Counsel has not opined as to other Rhode Island tax consequences arising with respect to the Bonds. Bond Counsel has not opined as to the taxability of the Bonds or the income therefrom under the laws of any state other than Rhode Island. A complete copy of the proposed form of opinion of Bond Counsel is set forth in APPENDIX C hereto. To the extent the issue price of any maturity of the Bonds is less than the amount to be paid at maturity of such Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Bonds), the difference constitutes original issue discount, the accrual of which, to the extent properly allocable to each owner thereof, is treated as interest on the Bonds which is excluded from gross income for federal income tax purposes and is exempt from Rhode Island personal income taxes. For this purpose, the issue price of a particular maturity of the Bonds is either the reasonably expected initial offering price to the public or the first price at which a substantial amount of such maturity of the Bonds is 34

38 sold to the public, as applicable. The original issue discount with respect to any maturity of the Bonds accrues daily over the term to maturity of such Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Bonds. Bondholders should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase such Bonds in the original offering to the public at the reasonably expected initial offering price or, if applicable, the first price at which a substantial amount of such Bonds is sold to the public. Bonds purchased, whether at original issuance or otherwise, for an amount greater than the stated principal amount to be paid at maturity of such Bonds, or, in some cases, at the earlier redemption date of such Bonds ( Premium Bonds ), will be treated as having amortizable bond premium for federal income tax purposes and Rhode Island personal income tax purposes. No deduction is allowable for the amortizable bond premium in the case of obligations, such as the Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, a Bondholder s basis in a Premium Bond will be reduced by the amount of amortizable bond premium properly allocable to such Bondholder. Holders of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds may adversely affect the value of, or the tax status of interest on, the Bonds. Although Bond Counsel is of the opinion that interest on the Bonds is excluded from gross income for federal income tax purposes and is exempt from Rhode Island personal income taxes, the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may otherwise affect the federal or state tax liability of a Bondholder. Among other possible consequences of ownership or disposition of, or the accrual or receipt of interest on, the Bonds, the Code requires recipients of certain social security and certain railroad retirement benefits to take into account receipts or accruals of interest on the Bonds in determining the portion of such benefits that are included in gross income. The nature and extent of all such other tax consequences will depend upon the particular tax status of the Bondholder or the Bondholder s other items of income, deduction, or exclusion. Bond Counsel expresses no opinion regarding any such other tax consequences, and Bondholders should consult with their own tax advisors with respect to such consequences. Risk of Future Legislative Changes and/or Court Decisions Legislation affecting tax-exempt obligations is regularly considered by the United States Congress and may also be considered by the Rhode Island legislature. Court proceedings may also be filed, the outcome of which could modify the tax treatment of obligations such as the Bonds. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Bonds will not have an adverse effect on the tax status of interest on the Bonds or the market value or marketability of the Bonds. These adverse effects could result, for example, from changes to federal or state income tax rates, changes in the structure of federal or state income taxes (including replacement with another type of tax), or repeal (or reduction in the benefit) of the exclusion of interest on the Bonds from gross income for federal or state income tax purposes for all or certain taxpayers. For example, H.R. 1, signed into law on December 22, 2017, reduces the corporate tax rate, modifies individual tax rates, eliminates many deductions, and raises the income threshold above which the individual alternative minimum tax is invoked, among other things. These changes may increase, reduce or otherwise change the financial benefits of owning state and local government bonds. Additionally, Bondholders should be aware that future legislative actions (including federal income tax reform) may retroactively change the treatment of all or a portion of the interest on the Bonds for federal income tax purposes for all or certain taxpayers. In all such events, the market value of the Bonds may be affected and the ability of Bondholders to sell their Bonds in the secondary market may be reduced. The Bonds are not subject to special mandatory redemption, and the interest rates on the Bonds are not subject to adjustment, in the event of any such change in the tax treatment of interest on the Bonds. Investors should consult their own financial and tax advisors to analyze the importance of these risks. CONTINUING DISCLOSURE In order to assist the Underwriters in complying with Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission (the Rule ), the Town will covenant for the benefit of owners of the Bonds to provide certain 35

39 financial information and operating data relating to the Town by not later than nine (9) months after the end of each fiscal year, commencing with the fiscal year ending June 30, 2018 (the Annual Report ), and to provide notices of the occurrence of certain enumerated events. The covenants will be contained in a Continuing Disclosure Certificate, the proposed form of which is provided in APPENDIX D. The Town is in compliance with its continuing disclosure obligations during the past five years. The Town s obligation under the Continuing Disclosure Certificate will terminate upon payment in full of Bonds. LITIGATION The Town has several lawsuits pending against it. In the opinion of the Town Solicitor, except as follows, there is no litigation pending against the Town which, either individually or in the aggregate, would result in judgments that would have a materially adverse effect on the Town's financial position or its ability to meet its debt service obligations. RI Builders Association, et als v. Town of Coventry, et al, C.A. No. KC This is a case which claims the Town of Coventry improperly enacted an ordinance regarding impact fees and has been improperly requiring developers to pay such impact fees since its inception. The Rhode Island Interlocal Risk Management Trust is defending the Town under a reservation of rights. The claim is quite substantial (probably in excess of $1,000,000.00). We do not believe it has merit and will contest it vigorously. It is impossible to estimate what, if any, damage could result, if unsuccessful. Coventry Landfill. The Town has been named as a responsible party in connection with the investigation and remediation of the former Coventry Landfill owned and operated by the Town and located off Arnold Road in Coventry. The Town is one of a number of persons to whom a Letter of Responsibility was issued in June 2003 by the Rhode Island Department of Environmental Management requiring such persons to conduct the investigation and remediation of the Landfill under applicable state and federal law and regulations. The Town is one of a number of such persons who executed and delivered that certain Partial Consent Decree in 2005 in the case of State of Rhode Island, Department of Environmental Management v. Town of Coventry, C. A. No S, pursuant to which the signatories agreed to conduct and pay for an environmental investigation of the site. As a result of that investigation, the Town is obligated to conduct and pay for the remediation of the Landfill as approved by the Rhode Island Department of Environmental Management. Pursuant to that certain Settlement Contribution Agreement dated as of March 1, 2010, by and between (i) the Town and (ii) Mallinckrodt, LLC, Oce Imaging Supplies, Inc. Chevron Environmental Management Company, CAN Holdings, Inc., Sunoco, Inc. and Teknor Apex Company, the Town agreed to pay for sixty percent (60%) of the costs of the investigation and remediation of the Landfill, and the other parties thereto agreed to pay the remaining forty percent (40%). The current estimate of the cost of the remediation of the Landfill is approximately $6.5 million (of which the Town is obligated under the above Agreement to pay sixty percent (60%) thereof.) The Town continues to participate in the remediation of the site as part of the potentially responsible party ( PRP ) group. Cambio et. als. v. Town of Coventry We are handling a number of cases involving Nicholas Cambio, Commerce Park Realty and its various sub-entities including PM No , PB ; Kent County Case, Civil Action No , Civil Action No These matters are all intertwined and arise out of Mr. Cambio s assertions that he does not owe the Town various monies arising out of sewer assessment and use taxes. The following lawsuits were initiated against the Town by Mr. Cambio through his various entities, remain pending against the Town, and are not being defended by the Interlocal Trust: Commerce Park Associates 1, 2, 6, 13 LLC, Commerce Park Properties, LLC, Commerce Park Realty, LLC, Commerce Park Realty 2, LLC, Nicholas Cambio, Trustee and Vincent A. Cambio v Town of Coventry et al PB Commerce Park Associates 1, 2, 5, 6, 13, Commerce Park Realty, LLC, Commerce Park Realty 2 and 3 LLC v. Town of Coventry Sewer Assessment KC

40 Commerce Park Associates 1, 2, 6, 13 LLC, Commerce Park Properties, LLC, Commerce Park Realty, LLC, Commerce Park Realty 2, LLC, Commerce Park Management, LLC v. Monique Houle, in her capacity as Tax Collector of the Town of Coventry et al KB Commerce Park Associates 8, 9 and 4 LLC v Town of Coventry KC There has been no activity on any of these lawsuits in the last three and one-half years. Baird Properties, LLC v. Town of Coventry This is a counterclaim in a suit to enforce the Town s Zoning Ordinances against a marijuana grower who was in violation thereof. The Town prevailed on the zoning enforcement claims in the Superior Court and Baird has petitioned the State Supreme Court for relief. His petition was denied, and Baird s counterclaim (for Slander of Title ) to the property used for marijuana is thus doubtful. The counterclaim seeks unspecified damages and it is impossible to project with precision, the likely outcome of the counterclaims. Miozzi v. Town of Coventry This lawsuit claims the Town violated the Plaintiffs constitutional rights in enforcing certain closing hours ordinances. The Interlocal Trust is defending the Town. Plaintiff sought preliminary injunctive relief in US District Court (RI) which was denied in October The Plaintiff dismissed the federal case and brought a similar case in Kent County Superior Court seeking an unspecified amount of damages only. The outcome is impossible to predict. Texiera v. Town of Coventry This matter was an employment discrimination lawsuit filed in the United States District Court (RI). The case was tried to a jury in 2016 and a defense verdict was returned. The Plaintiff sought unspecified damages which were more than $500,000.00, as claimed. The Plaintiff took an appeal to the United States Court of Appeals for the First Circuit. The appeal was denied. Further appellate review is extremely unlikely. Tax Appeals The Town is also involved in the following tangible tax appeal cases: National Grid v. Coventry, KC ; National Grid v. Coventry, KC ; The collective exposure for these claims, in the event that the Town is liable for repayment of overassessment(s) is not expected to exceed more than $125,000. SALE AT COMPETITIVE BIDDING The Bonds were offered for sale at competitive bidding on March 6, 2019 and were awarded to Roosevelt & Cross, Inc. (the "Underwriter"). The Underwriter has supplied the information as to the prices and yields of the Bonds as set forth on the cover page hereof. The Bonds are being purchased from the Town by the Underwriter at an aggregate price of $7,196,635.15, reflecting the principal amount of $7,050,000.00, plus an original issue premium of $230, (excluding the payment of the bond insurance premium), minus Underwriter s discount of $83,889. The Underwriter may offer to sell the Bonds to certain dealers and others at prices other than the initial public offering prices and the public offering prices may be changed from time to time by the Underwriter. MUNICIPAL ADVISOR PFM Financial Advisors LLC ( PFM ) has served as municipal advisor to the Town for the issuance of the Bonds. PFM is not obligated to undertake, and has not undertaken, either to make an independent verification of or to assume responsibility for, the accuracy, completeness, or fairness of the information contained in the Official Statement. PFM is an independent municipal advisory firm and is not engaged in the business of underwriting, trading, or distributing public securities. 37

41 RATINGS Based on an insurance policy to be issued by AGM concurrently with the delivery of the Bonds, S&P Global Ratings, a business unit of Standard & Poor s Financial Services LLC ( S&P ), Kroll Bond Rating Agency, Inc. ( KBRA ) and Moody s Investors Service, Inc. ( Moody s ) are expected to assign insured ratings on the Bonds of AA (stable outlook), AA+ (stable outlook), and A2 (stable outlook), respectively. Each rating of AGM should be evaluated independently. An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies, including withdrawal initiated at the request of AGM in its sole discretion. Moody s has assigned an underlying rating on the Bonds of A1 (negative outlook). MISCELLANEOUS All quotations from and summaries and explanations of laws herein do not purport to be complete, and reference is made to said laws for full and complete statements of their provisions. This Official Statement is submitted only in connection with the sale of the Bonds by the Town and may not be reproduced or used in whole or in part for any other purpose. Dated: March 6, 2019 By: /s/ John Arnett Director of Finance 38

42 APPENDIX A Set forth below are comparative financial statements which were prepared from audited financial statements. Balance Sheet as of June 30, Assets Cash & cash equivalents $ 15,129,157 $ 13,089,957 $ 13,102,086 $ 12,061,890 $ 15,080,359 Accounts Receiveable: Real estate & personal property taxes - 2,658,416 2,393,942 2,575,158 2,556,336 Due from federal & state governments 2,496, Other receivables 1,440,114 1,318,165 1,026, , ,753 Due from other funds 3,409,912 4,542,931 3,660,920 3,841,066 3,716,747 Total Assets $ 22,475,245 $ 21,609,469 $ 20,183,928 $ 19,372,681 $ 22,189,195 Liabilities & Fund Balances Liabilities: Accounts payable & accrued expenditures $ 364,065 $ 341,526 $ 384,223 $ 144,606 $ 301,986 Due to other funds 7,625,841 6,699,004 5,347,796 4,636,570 6,187,945 Other libilities 1,205, , , , ,670 Total Liabilities $ 9,195,611 $ 7,969,653 $ 6,434,667 $ 5,392,416 $ 6,930,601 Unavailable tax revenue $ 2,446,563 $ 2,605,127 $ 2,427,493 $ 2,624,506 $ 2,579,656 Fund Balances: Non-spendable Sewer interfund receivable ,286,086 2,656,700 Committed for: Public works programs 7,593 17,481 47,561 51,335 29,261 Use of budgeted surplus in future years 265,077 66, , Public Safety programs 1,514 2,802 23,042 19,516 52,391 Culture and Recreation 1,033,023 1,304,970 1,326,358 1,540,316 1,956,013 Unassigned 9,525,864 9,643,296 9,631,831 7,458,506 7,984,573 Total Fund Balances 10,833,071 11,034,689 11,321,768 11,355,759 12,678,938 Total Liabilities & Fund Balances $ 22,475,245 $ 21,609,469 $ 20,183,928 $ 19,372,681 $ 22,189,195 Source: Prepared from audited financial reports A-1

43 Statement of Revenues, Expenditures and Changes in Fund Balance as of June 30, Revenues Real estate & personal property taxes $ 64,396,833 $ 65,367,621 $ 67,685,504 $ 69,985,564 $ 71,652,257 Other taxes 920, , , ,821 1,005,987 Penalties & interest on taxes 605, , , , ,433 Licenses, fees & permits 763, , , , ,512 Investment income 178,414 82, , , ,181 Intergovernmental 1,556,915 2,309,057 2,026,484 1,838,699 2,358,888 Charges for services 223, , , , ,589 Miscellaneous 722, ,615 1,508, , ,938 Total Revenues $ 69,367,281 $ 70,914,883 $ 74,126,465 $ 75,576,435 $ 77,724,785 Expenditures Current: General government $ 5,296,820 $ 5,003,241 $ 5,918,157 $ 6,056,865 $ 5,890,896 Public safety 11,269,592 11,081,420 12,355,884 12,326,651 12,530,200 Public works 5,170,446 5,378,909 5,128,738 5,036,458 5,450,874 Community & economic development 302, , , , ,198 Health & human services 779, , , , ,822 Culture & recreation 2,084,905 2,042,536 2,062,512 2,310,837 2,237,014 Debt service: Principal 2,165,000 2,600,000 3,193,000 3,269,000 3,745,000 Interest 873, ,250 1,226,802 1,325,449 1,412,861 Total Liabilities $ 27,941,945 $ 27,980,981 $ 30,995,894 $ 31,524,709 $ 32,319,865 Excess revenues over (under) expenditures $ 41,425,336 $ 42,933,902 $ 43,130,571 $ 44,051,726 $ 45,404,920 Other financing sources (uses) Transfers from other funds $ 571,368 $ 283,646 $ 58,701 $ 122,323 $ - Transfers to other funds (43,048,483) (43,015,930) (43,103,325) (44,140,058) (44,304,450) Debt issuance and premium , Total other financing sources (uses) (42,477,115) (42,732,284) (42,843,492) (44,017,735) (44,304,450) Excess revenues & other sources over (under) expenditures & other uses (1,051,779) 201, ,079 33,991 1,100,470 Fund Balance - Beginning 11,440,022 (1) As restated. Source: Prepared from audited financial reports (1) 10,833,071 (1) 11,034,689 11,321,768 11,578,468 (1) Fund Balance - Ending $ 10,388,243 $ 11,034,689 $ 11,321,768 $ 11,355,759 $ 12,678,938 A-2

44 APPENDIX B AUDITED FINANCIAL STATEMENTS

45 TOWN OF COVENTRY ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE John R. Arnett FINANCE DIRECTOR Prepared by: Finance Department COVENTRY, RHODE ISLAND

46 ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS I. INTRODUCTORY SECTION LIST OF TOWN OFFICIALS IT. FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT MANAGEMENT'S DISCUSSION AND ANALYSIS 1 4 BASIC FINANCIAL STATEMENTS Government Wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet - Governmental Funds Statement of Revenues, Expenditures and Changes in Unreserved Fund Balances - Governmental Funds Reconciliation of the Statement ofrevenues, Expenditures and Changes in Unreserved Fund Balances of the Governmental Funds to the Statement of Activities Statement of Net Position- Proprietary Funds Statement of Revenues, Expenses, and Changes in Net Position- Proprietary Funds Statement of Cash Flows - Proprietary Funds Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position Notes to the Financial Statements Required Disclosures and Other Information REQUIRED SUPPLEMENTARY INFORMATION (RSI) Budgetary Comparison Schedule- Schedule of Revenues, and Expenditures- General Fund Budgetary Comparison Schedule- Schedule of Revenues Budget and Actual (Budgetary Basis)- General Fund Budgetary Comparison Schedule - Schedule of Expenditures Budget and Actual (Budgetary Basis) - General Fund (continued)

47 TOWNOFCOVENTRY,RHODE~LAND ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS (continued) REQUIRED SUPPLEMENTARY INFORMATION (RSI) (continued) Budgetary Comparison Schedule - Statement of Revenues, Expenditures and - School Unrestricted Fund Notes to Required Supplementary Information- Reconciliation of Budgetary Basis to GAAP -General Fund and School Unrestricted Fund Schedule of Changes in Net Pension Liability and Related Ratios-Town Plan Schedule of Town Contributions and Investment Returns Schedule of Changes in Net Pension Liability and Related Ratios-Police Plan Schedule of Town Police Plan Contributions and Investment Returns Schedule of Contributions Teacher's Retirement Plan and Schedule of Proportionate Share of Net Pension Liability- ERS Schedule of Contributions Teacher's Survivor Benefit Plan and Schedule of Proportionate Share of Net Pension Liability (Asset)- ERS Schedule of Changes in Net Pension Liability and Related Ratios-School Plan Schedule of Town Contributions and Investment Returns- School Plan OPEB Plan- Schedule of Changes in the Net OPEB Liability and related ratios OPEB Plan- Schedule of Contributions and Investment Returns Supplementary Information Combining Balance Sheet- Non-major Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Non-major Governmental Funds Combining Balance Sheet- Restricted Special Revenue Funds Town Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Restricted Special Revenue Funds Town Combining Balance Sheet - Restricted Special Revenue Funds School Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Restricted Special Revenue Funds School Combining Balance Sheet - Capital Project Funds Combining Statement ofrevenues, Expenditures and Changes in Fund Balances- Capital Project Funds Combining Statement of Net Position- Pension Trust Funds Combining Statement of Revenues, Expenses and Changes in Net Position- Pension Trust Funds Combining Balance Sheet - Private Purpose Trust Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Private Purpose Trust Funds Combining Statement of Changes in Assets and Liabilities -Agency Funds Town General Fund Balance Sheet- Funds Combined with the Town General Fund for GASB 54 Reporting Purposes Town General Fund Statement of Revenues, Expenditures, Other Financing Sources (Uses) and Changes in Fund Balance- Funds Combined with the General Fund for GASB 54 Reporting Purposes (continued)

48 ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS (continued) Supplementary InfOrmation - continued School Unrestricted Fund Balance Sheet-Funds Combined with the School Unrestricted Fund for GASB 54 Reporting Purposes School Unrestricted Fund Statement of Revenues, Expenditures, Other Financing Sources (Uses) and Changes in Fund Balance - Funds Combined with the School Unrestricted Fund for GASB 54 Reporting Purposes Annual Supplemental Transparency Reports (MTP2) Notes to Supplementary Information ill. STATISTICAL SECTION Schedule of Tax Collections Schedule of Assessed Property Valuations Tax Collectors Annual Report Schedule of Long-term Liabilities- Primary Government Computation of Legal Debt Margin IV. SINGLE AUDIT SECTION 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 Report on Compliance for Each Major Federal Program and on Internal Control Over Compliance as Required by the Uniform Guidance Schedule of Expenditures off ederal Awards Schedule offindings and Questioned Costs Schedule of Prior Year Findings and Questioned Costs Notes to Schedule of Expenditures of Federal Awards (concluded)

49 INTRODUCTORY SECTION This Section Contains the Following Subsections: List of Town Officials

50 As of June 30, 2018 TOWN COUNCIL Glenford Shibley- President Gregory Laboissonniere - Vice-President Karen M. Carlson Debra Bacon Kerry L. McGee TOWN MANAGER INTERIM Edward Warzycha FINANCE DIRECTOR John R. Arnett i

51 FINANCIAL SECTION This Section Contains the Following Subsections: Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements Required Supplementary Information Supplementary Information

52 BAXTER DANSEREAU & AssociATEs, LLP Accounting, Consulting & Tax Services Partners William]. Baxter, Jr., CPA Paul L. Dansereau, CPA The Honorable President and Members ofthe Town Council Town of Coventry Coventry, Rhode Island Report on the Financial Statements INDEPENDENT AUDITOR'S REPORT We have audited the accompanying fmancial statements of the governmental activities, the business type activities, each major fund, and the aggregate remaining fund information of the Town of Coventry, Rhode Island (Town) as of and for the year ended June 30, 2018, and the related notes to the fmancial statements, which collectively comprise the Town's basic fmancial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these fmancial 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 fmancial 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 fmancial 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 fmancial 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 fmancial 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 opinions. 207 Quaker Lane, Suite 20.'3 West Warwick, RI 0289.'3 T: F:

53 Opinions In our opinion, the fmancial 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 Coventry, Rhode Island as of June 30, 2018, 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. Emphasis of Matter As discussed in Note 19 for the fmancial statements, during the fiscal year ended June 30, 2018, the Town adopted new accounting guidance, Government Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (OPEB). The net position of the Town has been restated to recognize the Net OPEB Liability required in implementing GASB No. 75. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison information on pages 4-13 and be presented to supplement the basic fmancial statements. Such information, although not a part of the basic fmancial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of fmancial 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 fmancial 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 opinions on the financial statements that collectively comprise the Town of Coventry, Rhode Island's basic financial statements. The introductory section, combining and individual nonmajor fund fmancial statements, other supplementary information, schedules, the Annual Supplemental Transparency Report (MTP2) and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic fmancial statements. 2

54 The combining and individual nonmajor fund financial statements, other supplementary information, the Annual Supplementary Transparency Report (MTP2) and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic fmancial 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 fmancial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund fmancial statements, other supplementary information, the Annual Supplementary Transparency Report, MTP2 and the schedule of expenditures of federal awards are fairly stated in all material respects in relation to the basic fmancial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 14, 2019, on our consideration of the Town of Coventry, Rhode Island's internal control over fmancial 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 fmancial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Town of Coventry, Rhode Island's internal control over fmancial reporting and compliance. <i!jji~::;daafa..la,...~cf~1 U'P Baxter Dansereau & Associates, LLP West Warwick, Rhode Island February 14,

55 Management's Discussion and Analysis

56 Management's Discussion and Analysis For the Year Ended June 30, 2018 (Un-audited) Management of the Town of Coventry provides this Management's Discussion and Analysis of the Town of Coventry's Annual Financial Report for the readers of the Town's financial statements. This narrative overview and analysis of the financial statements of the Town of Coventry is for the fiscal year ended June 30,2018. We encourage readers to consider this information in conjunction with the Town's financial statements that follow. Financial Highlights! The net position of the Town's primary government decreased by $126,555 as a result of current year's operations. On a government-wide basis the liabilities and deferred inflows of resources of the Town of Coventry exceeded its assets and deferred outflows of resources at the close of the most recent fiscal year by $130,962,282. The net position of the Town's business activities decreased by $232,963 or 2.06%, and the net position of Governmental Activities increased by $106,408 or less than.07% in the current period. Also, during the fiscal year ended June 30, 2018, the Town adopted new accounting guidance, GASB Statement No. 75, Accounting and Financial Reporting by Employers for Post-Employment Benefits Other than Pension. Therefore, the beginning net position of the Town has been restated to recognize the net OPEB liability required in implementing GASB No. 75. The effect of the implementation caused the unrestricted net position to decrease by net ($13,607,086). See note 19 for explanations of other restatement items that had to do with previous accounting periods.! The Town's Government-wide (governmental and business activities) operating expenses were $114,835,816 a 1. 7% increase from the prior year, while revenues collected were $114,709,261 a 1. 7% increase from the prior year.!! As of the close ofthe fiscal year, the Town's governmental funds reported combined ending fund balances of$20,535,998. Over 32.8% of this amount, $6,737,749 is unassigned and available for use within the Town's specific designations and fiscal policies or subject to outside restrictions. At the end of the current fiscal year, the general fund unassigned fund balance was $7,984,573 or 10% of the total general fund expenditures for the fiscal year. The current fiscal year's revenues and transfers in exceeded expenditures and transfers out by $1,100,4 70. On a budgetary basis revenue exceeded expenditures and transfers by $674,243. 4

57 Overview of the Financial Statements Management's Discussion and Analysis For the Year Ended June 30, 2018 (Un-audited) This discussion and analysis are intended to serve as an introduction to the Town's basic fmancial statements. These basic financial statements consist of three components: Government - wide financial statements Fund financial statements Notes to financial statements In addition to the basic financial statements, this report also contains other supplementary information. The Town's basic financial statements and other supplementary financial information provide information about all the Town's activities. They provide both a short-term and a long-term view of the Town's financial health as well as information about activities for which the Town acts solely as a trustee for the benefit of those outside of the Town's government. Government-wide financial statements - are designed to provide readers with a broad overview of the Town's finances in a manner, which is similar to a private-sector business. They are presented on the accrual basis of accounting where revenues and expenditures are recognized on the date, they occurred rather than on the date they were collected or paid. The Statement of Net Position presents information on all of the Town's assets, deferred outflows of resources, liabilities and deferred inflows of resources with the difference between these items reported as net position. Over time, increases or decreases in the Town's net position may serve as a useful indicator of whether the financial position of the Town is improving or deteriorating. The Statement of Activities presents information which shows how the Town's net position changed during the fiscal year. All changes in the Town's net position are reported when the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in the future fiscal periods. Examples are uncollected taxes and earned but unused compensated absences. Both of the government-wide financial statements distinguish functions of the Town, which are supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The Town's governmental activities include general government, public safety, education, public works, community and economic development services, health and human services, cultural and recreational services and interest on long-term debt. The Town's business activities include the Sewer Fund. The government wide financial statements are reported on pages 14 through 15. 5

58 Management's Discussion and Analysis For the Year Ended June 30, 2018 (Un-audited) Fund financial statements- A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Town, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All the funds of the Town can be divided into three categories governmental funds, proprietary funds and fiduciary funds. Governmental Funds - Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund fmancial statements focus on current sources and uses of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. 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. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental funds balance sheet and the governmental fund statements of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Town maintains various governmental funds. Information is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund and School Special Revenue Unrestricted Fund which are considered to be major funds. Data from the other funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining supplementary information statements elsewhere in this report. Proprietary Funds- The Town's proprietary fund is used to report the same functions presented as business-type activities in the government-wide financial statements. The Town has one enterprise fund and one internal service fund. The Coventry Sewer Enterprise Fund, which accounts for the Town's sewer system and the Self Insurance Reserve Fund which is an internal service fund. This fund accounts for the School Departments health care selfinsurance activity with WB Community Health. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund fmancial statements provide separate information for the Coventry Sewer Fund since it is a major fund of the Town. The Internal Service Fund is folded into the Governmental Activities of the Government Wide Financial Statements when the fund financial statements are consolidated. The basic proprietary fund financial statements are presented on pages 19 through 21. 6

59 Management's Discussion and Analysis For the Year Ended June 30, 2018 (Un-audited) Fiduciary Funds - Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide fmancial statement because resources of those funds are not available to support the Town's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund fmancial statements can be found on pages 22 and 23. Notes to 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 fmancial statements are presented on pages 24 through 90. Other Information - In addition to the basic fmancial statements and accompanying notes, this report also presents certain supplementary information pertinent to the Town's operations. Required Supplementary information is presented on pages 91 through 107. The combining statements referred to earlier in connection with non-major governmental funds, are presented on pages 108 through 168. Government-wide Financial Analysis Analysis of the Town of Coventry's Net Position As noted earlier, the Town's net position may serve over time as a useful indicator of a government's fmancial position and an important determinant of its ability to fmance services in the future. The Town of Coventry, governmental activities liabilities and deferred inflows of resources exceeded assets and deferred outflow of resources by $130,962,282 as of June 30, The cumulative deficit in the governmental activities net position decreased by $106,408 from current year activity. Listed on the following page is a comparison of the current and prior fiscal years. 7

60 Management's Discussion and Analysis For the Year Ended June 30,2018 (Un-audited) Town of Coventry Net Position June30,2018 June 30,2017 GJvem- Business GJvem- Business mental Type mental Type Activities Activities Total Activities Activities Total Current and Other Assets $ 35,924,427 $ 11,931,952 $ 47,856,379 $ 38,563,604 $ 14,001,306 $ 52,564,910 Capital assets 45,592,088 27,953,223 73,545,311 44,191,449 28,027,902 72,219,351 Total Assets 81,516,515 39,885, ,401,690 82,755,053 42,029, ,784,261 Deferred outflows of resources 22,233,596 22,233,596 17,162,272 17,162,272 Other Liabilities 5,206,999 2,964,615 8,171,614 5,457,658 2,927,370 8,385,028 Long-Tenn Liabilities 226,548,839 18,202, ,751, ,058,268 19,482, ,540,995 Total liabilities 231,755,838 21,167, ,922, ,515,926 22,410, ,926,023 Deferred inflows of resources 14,013,899 7,660,707 21,674,606 9,655,894 8,328,804 17,984,698 Net Position: Net investment in capital assets 7,517,224 11,100,041 18,617,265 7,689,162 11,141,342 18,830,504 Restricted for: Education programs 668, ,840 1,046,486 1,046,486 Public safety programs 374, , , ,231 Culture and recreation 42,892 42,892 42,492 42,492 Health & human services 184, , , ,947 Unrestricted (150,806,925) (42,697) (150,849,622) (141,601,813) 148,965 (141,452,848) Tota!Net Position $ (142,019,626) $ 11,057,344 $ (130,962,282) $ (132,254,495) $ 11,290,307 $ (120,964, 188) The largest portion of the Town's Governmental net position, $7,517,224 consists of its investments in capital assets such as land, buildings and improvements, motor vehicles, furniture and equipment and infrastructure, less any debt used to acquire these assets, which is still outstanding. The Town uses these capital assets to provide services to its citizens. Consequently, these assets are not available for future spending. Although the Town's 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 are unlikely to be used to liquidate these liabilities. The remaining balance of the Town's unrestricted net position may be used to meet the government's ongoing obligations to its citizens and creditors. The unrestricted net position for governmental activities reported a $150,806,925 deficit while the business-type activities reported a $42,697 deficit position. As of June 30, 2018 the Town of Coventry reports positive balances in the net investment in capital assets category and restricted items. 8

61 Analysis of the Town of Coventry's Operations Management's Discussion and Analysis For the Year Ended June 30, 2018 (Un-audited) The following analysis provides a summary of the Town's operations for the year ended June 30, The Town first implemented GASB Statement 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments for the fiscal year June 30, Prior year comparative data is available and is presented in the following schedules. Governmental activities increased the Town's net position by $106,408 for the current period accounting for a less than 1% increase in the Town's governmental net position, while business-type activities decreased the Town's net position by $232,963 or 2.06% for the current period. Overall the Town's decrease in net position was $126,555 for current year's activity. The following page presents the Changes in Net Position for the current year's activity. Town of Coventry Changes in Net Position June 30, 2018 June 30,2017 Govern- Business Govern- Business mental Type mental Type Activities Activities Total Activities Activities Total Revenues Program revenues Charges for services $ 4,754,982 $ 2,620,627 $ 7,375,609 $ 4,488,409 $ 2,788,347 $ 7,276,756 Federal/State grants 33,689,481 33,689,481 32,763, ,333 32,972,350 General Revenues Property taxes 72,613,394 72,613,394 71,157,398 71,157,398 Investment earnings 223,076 5, , ,005 2, ,058 Miscellaneous 802, , , ,525 Total revenues 112,083,053 2,626, ,709, ,917,354 2,999, ,917,087 Expenses General government 6,512,174 6,512,174 6,707,887 6,707,887 Public safety 12,786,220 12,786,220 12,926,648 12,926,648 Education 80,458,843 80,458,843 78,507,798 78,507,798 Public works 6,524,759 6,524,759 6,095,250 6,095,250 Community and economic development 421, , , ,229 Health and human services 1,473,237 1,473,237 1,778,433 1,778,433 Culture and recreation 2,403,972 2,403,972 2,440,262 2,440,262 Interest on long-termdebt 1,396,258 1,396,258 1,375,098 1,375,098 Sewer Fund Expenses 2,859,171 2,859,171 2,652,693 2,652,693 Total expenses 111,976,645 2,859, ,835, ,226,605 2,652, ,879,298 Transfers 436,457 (436,457) Change in net position 106,408 (232,963) (126,555) 127,206 (89,417) 37,789 Net position- beginning restated (142,126,034) 11,290,307 (130,835, 727) {132,381,701) 11,379,724 (121,001,977) Net position- ending $ (142,019,626) $ 11,057,344 $ (130,962,282) $ (132,254,495) $ 11,290,307 $ (120,964,188) 9

62 Management's Discussion and Analysis For the Year Ended June 30, 2018 (Un-audited) Financial Analysis of the Town of Coventry's Funds Governmental Funds -The focus of the Town of Coventry's governmental funds is to provide information on nearterm inflows, outflows and balances of spendable resources. Such information is useful in assessing the Town's financing requirements. In particular, the unreserved fund balance may serve as a useful measure of the Town's net resources available for spending at the end ofthe fiscal year. As of the close of the fiscal year, the Town's governmental funds reported combined ending fund balances of $20,535,998. Over 32% of this amount, $6,737,749 is unassigned and available for use within the Town's specific designations and fiscal policies. Fund Balance Categories Non-spendable for: Sewer fund inter-fund receivable $ 2,656,700 Prepaid items 637,250 Restricted for: Educational programs 668,840 Public safety programs 374,158 Culture and recreation 42,892 Health & human services 184,185 Committed for: Public works programs 6,307,570 Public safety programs 52,391 Culture and recreation 2,874,263 Unassigned: 6,737,749 Total fund balances $ 20,535,998 Proprietary Funds- The Town of Coventry's proprietary fund statements provide the same type of information as presented in the government-wide fmancial statements, but in more detail. The unrestricted net position of the Sewer Fund is a deficit of $42,697. General Fund Budgetary Highlights Revenues: Total Revenues- were under budget by $230,469. General Property Taxes- were under budget by $636,846 because oflower than anticipated collection of the same. Intergovernmental revenue- exceeded budget $696,676 due to the unknown exact reimbursement from the Rhode Island's Motor Vehicle phase out. 10

63 Management's Discussion and Analysis For the Year Ended June 30, 2018 (Un-audited) General Fund Budgetary Highlights - (continued) Other Revenue- was under budget by $200,469 mainly because oflower than anticipated collection of Miscellaneous Receipts and Police Car Rentals. Expenses: Total Expenses- were under budget by $904,712. Public Works- was under budget by $308,325 mainly because of salaries and fringe benefits savings from employee turnover as well as efficiency gains throughout the department. Public Safety- was under budget by 463,314. The primary driver of cost savings was the military activation of some police officers during the fiscal year. The Town of Coventry's Capital Assets The Town of Coventry's investment in capital assets for its governmental and business-type activities amounts to $73,545,311 net of accumulated depreciation at June 30, Included are land, building and improvements, motor vehicles, furniture, machinery and equipment and infrastructure. Additional information on the Town of Coventry's capital assets is located in Note 6 of the notes to the fmancial statements. Town of Coventry Capital Assets (Net of Accumulated Depreciation) June 30, 2018 June 30, 2017 Govern- Business Govern- Business mental Type mental Type Activities Activities Total Activities Activities Total Land 9,688,933 9,688,933 9,688,933 9,688,933 Construction in progress 4,940,363 2,259,136 7,199, ,101 1,685,150 1,837,251 Infrastructure 2,875,917 2,875,917 3,055,454 3,055,454 Buildings & Improvements 24,427,177 24,427,177 27,129,143 27,129,143 Machinery and equipment 230, , , ,457 Office equipment and furniture 214, , , ,636 Vehicles 3,214,856 3,214,856 3,541,725 3,541,725 Wastewater collection system 25,694,087 25,694,087 26,342,752 26,342,752 Total 45,592,088 27,953,223 73,545,311 44,191,449 28,027,902 72,219,351 11

64 The Town of Coventry's Debt Administration Management's Discussion and Analysis For the Year Ended June 30, 2018 (Un-audited) At the end of the current fiscal year, the Town of Coventry's Governmental Activities had a total bonded debt of $42,717,163. Of this amount, 100% comprises bonded debt backed by the full faith and credit ofthe government. The following is a summary of the Town's long-term debt. Town of Coventry Outstanding Debt General Obligation & Notes Payable June 30, 2018 June 30, 2017 Govern- Business Govern- Business mental Type mental Type Activities Activities Total Activities Activities Total Bonds Payable 42,717,163 42,717,163 46,451,028 46,451,028 Notes Payable 1,015,576 18,202,509 19,218,085 1,051,009 19,482,727 20,533,736 Totals 43,732,739 18,202,509 61,935,248 47,502,037 19,482,727 66,984,764 Additional information on the Town's long-term debt can be found in Note 9 of the Notes to the Financial Statements and on pages 179 and 171. Economic Factors and Next Year's Budgets and Rates The Town of Coventry's total budget for fiscal year 2019 amounts to $103,934,261, which reflects an increase of $1,795,855 over fiscal 2018's budget of$102,227,455. Of the Town's 2019 budget, $70,473,482, or67.8% is budgeted for educational purposes, 27,410,163 or 26.4% for municipal government, $5,056,423 or 4.9% for debt service and $993,490 or 1.0% for library resource sharing. The State of Rhode Island is budgeted to contribute $ 24,074,085 toward the Town's educational expenses for the fiscal year This is an increase of $871,110 from the $23,202,975 contributed by the State in the fiscal year For fiscal2019 the Town's residential and commercial property tax rates were and , respectively, with 62.1% allocated for education, 29.7% for municipal government, 8.2% for debt service, capital improvements and library resource sharing. For fiscal2018 the Town's residential and commercial property tax rates were $ and $25.285, respectively, with 61.6% allocated for education, 33.1% for municipal government, 5.3% for debt service, capital improvements and library resource sharing 12

65 Request for Information Management's Discussion and Analysis For the Year Ended June 30, 2018 (Un-audited) The fmancial report is designed to provide our citizens, taxpayers and creditors with a general overview of the Town's fmances and to show the Town's accountability for the tax dollars received. If you have questions about this report or need additional fmancial information, contact the Finance Director's Office, Town of Coventry, 1670 Flat River Road, Coventry RI John Arnett Finance Director/Treasurer 13

66 BASIC FINANCIAL STATEMENTS

67 Government-Wide Financial Statements

68 TOWN OF COVENTRY Statement of Net Position June 30, 2018 Prima!}: Government Governmental Business-type Activities Activities Total Assets: Current Assets: Cash and cash equivalents $ 17,692,174 $ 17,394 $ 17,709,568 Investments 4,557,670 4,557,670 Real estate and personal property tax receivable, net 2,556,336 2,556,336 Water and sewer use fees receivable, net 1,066,963 1,066,963 Due from federal and state government 1,170,644 1,349,327 2,519,971 Net pension asset 6,023,168 6,023,168 Prepaid expenses 669, ,074 Other assets, net 1,778,566 1,778,566 Other receivables, net 1,476,795 1,476,795 Total current assets 35,924,427 2,433,684 38,358,111 Noncurrent assets: Sewer assessments receivable 7,738,436 7,738,436 Capital assets: Land 9,688,933 9,688,933 Construction in progress 4,940,363 2,259,136 7,199,499 Property, plant & equipment - net 30,962,792 25,694,087 56,656,879 Capital assets, net 45,592,088 27,953,223 73,545,311 Other assets, net 1,759,832 1,759,832 Total noncurrent assets 45,592,088 37,451,491 83,043,579 Total assets 81,516,515 39,885, ,401,690 Deferred outflow of resources 22,233,596 22,233,596 Liabilities: Accounts payable and accrued liabilities 7,235, ,915 7,542,944 Internal balances (2,656,700) 2,656,700 Unearned revenues 188, ,000 Other 440, ,670 Total current liabilities 5,206,999 2,964,615 8,171,614 Long-term liabilities: Due within one year 3,817,865 1,318,121 5,135,986 OPEB liability 17,107,002 17,107,002 Pension liability 161,583, ,583,565 Due in more than one year 44,040,407 16,884,388 60,924,795 Total noncurrent liabilities 226,548,839 18,202, ,751,348 Total liabilities 231,755,838 21,167, ,922,962 Deferred inflows of resources 14,013,899 7,660,707 21,674,606 Net Position: Net investment in capital assets 7,517,224 11,100,041 18,617,265 Restricted for: Education programs 668, ,840 Public safety programs 374, ,158 Culture and recreation 42,892 42,892 Health & human services 184, ,185 Unrestricted {150,806,925) (42,697) {150,849,622) Total net position $ (142,019,626) $ 11,057,344 $ (130,962,282) See auditor's report and accompanying notes to these financial statements 14

69 Statement of Activities For the Year Ended June 30, 2018 Program revenues Net (Ex~ense) Revenue and Changes in Net Position Operating Primary Government Charges for Grants and Governmental Business-type Expenses Services Contributions Activities Activities Total Functions/ Programs Governmental Activities: Governmental activities: General government $ 6,512,174 $ 747,873 $ 1,941,884 $ (3,822,417) $ (3,822,417) Public safety 12,786, ,122 - (12,673,098) (12,673,098) Education 80,458,843 2,336,436 31,427,384 (46,695,023) (46,695,023) Public works 6,524, , ,213 (6,074,369) (6,074,369) Community and economic development 421,182 1,037, , ,732 Health and human services 1,473, (1,473,237) (1,473,237) Culture and recreation 2,403, ,460 35,000 (2,014,512) (2,014,512) Interest on long-term debt 1,396, (1,396,258) (1,396,258) Total governmental activities 111,976,645 4,754,982 33,689,481 (73,532,182) (73,532,182) Business type activities: Sewer Fund 2,859,171 2,620, $ (238,544) (238,544) Total business-type activities 2,859,171 2,620, (238,544) (238,544) Total $ 114,835,816 $ 7,375,609 $ 33,689,481 (73,532,182) (238,544) (73, 770, 726) General revenues: Real estate and personal property taxes 72,613,394-72,613,394 Interest on property taxes 461, ,433 Investment earnings 223,076 5, ,657 Miscellaneous 340, ,687 Total general revenues 73,638,590 5,581 73,644,171 Change in net position 106,408 (232,963) (126,555) Net position-beginning (142,126,034) 11,290,307 (130,835, 727) Net position-ending $ (142,019,626) $ 11,057,344 $ (130,962,282) See auditor's report and accompanying notes to these financial statements 15

70 Fund Financial Statements

71 Balance Sheet Governmental Funds June 30, 2018 General Fund School Unrestricted Fund Other Governmental Funds Total Governmental Funds ASSETS Cash and cash equivalents Investments Accounts receivable: Real estate and personal property taxes Due from federal and state governments Other receivables Due from other funds Prep aids Total assets $ 10,522,689 $ 86,033 4,557,670 2,556,336 73, , ,109 3,716,747 5,996, ,250 $ 22,189,195 $ 6,994,613 $ 7,083,452 $ 17,692,174 4,557,670 2,556,336 1,096,789 1,170,644 1,036,862 2,106,467 11,819, ,250 $ 10,286,708 $ 39, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable and accrued expenditures $ 301,986 $ 5,707,709 $ 993,550 $ 7,003,245 Due to other funds 6,187, ,354 2,275,648 8,722,947 Unearned revenues 188, ,000 Other liabilities 440, ,670 Total liabilities 6,930,601 5,967,063 3,457,198 16,354,862 DEFERRED INFLOWS OF RESOURCES Unavailable tax revenue 2,579,656 2,579,656 Fund balances: Non-spendable for: Sewer inter-fund receivable 2,656,700 2,656,700 Prepaid items 637, ,250 Restricted for: Educational programs 390, , ,840 Public safety programs 374, ,158 Culture and recreation 42,892 42,892 Health & human services 184, ,185 Committed for: Public works programs 29,261 6,278,309 6,307,570 Public safety programs 52,391 52,391 Culture and recreation 1,956, ,250 2,874,263 Unassigned: 7,984,573 {1,246,824} 6,737,749 Total fund balances 12,678,938 1,027,550 6,829,510 20,535,998 Total liabilities, deferred inflows of resources and fund balances $ 22,189,195 $ 6,994,613 $ 10,286,708 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not fmancial resources and therefore are not reported in the funds. (Note 7) 45,592,088 Other long-term assets are not available to pay for current-period expenditures and therefore are deferred in the funds. (Note 7) 4,126,438 Some liabilities, including bonds payable, pension liabilities and deferred inflows and outflows of resources, are not due and payable in the current period and therefore are not reported in the funds. (Note 7) (212,274,150) Net position of governmental activities $(142,019,626} See auditor's report and accompanying notes to these financial statements 16

72 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2018 School Other Total General Unrestricted Governmental Governmental Fund Fund Funds Funds Revenues Real estate and personal property taxes $ 71,652,257 $ $ $ 71,652,257 Other taxes 1,005,987 1,005,987 Penalties and interest on taxes 461, ,433 Licenses, fees and permits 789, ,512 Investment income 151,181 71, ,076 Intergovernmental 2,358,888 27,589,846 4,468,593 34,417,327 Contributions and private grants 24,091 24,091 Charges for services 517, ,205 1,075,397 2,501,191 Miscellaneous 787,938 2, , ,164 Total revenues 77,724,785 28,500,419 5,823, ,049,038 Expenditures Current: General government 5,890,896 49,064 5,939,960 Public safety 12,530, ,487 12,749,687 Education 72,321,147 4,429,616 76,750,763 Public works 5,450,874 5,178,738 10,629,612 Community and economic development 344,198 76, ,182 Health and human services 708, ,345 1,400,167 Culture and recreation 2,237,014 8,977 2,245,991 Capital outlay 131, ,851 Debt service Principal payments 3,745,000 3,745,000 Interest and fiscal charges 1,412,861 1,412,861 Total expenditures 32,319,865 72,321,147 10,786, ,427,074 Excess of revenues over (under) expenditures before other financing sources (uses) 45,404,920 (43,820,728) ( 4,962,228) (3,378,036) Other financing sources (uses) Issuance of debt 54,567 54,567 Transfers from other funds 44,315, ,254 44,570,010 Transfers to other funds {44,304,450} {12,279} {253,281} {44,570,010} Total other financing sources (uses) (44,304,450} 44,303,477 55,540 54,567 Excess of revenues and other sources over (under) expenditures and other uses 1,100, ,749 ( 4,906,688} (3,323,469} Fund balances - beginning restated 11,578, ,801 11,736,198 23,859,467 Fund balances - ending $ 12,678,938 $ 1,027,550 $ 6,829,510 $ 20,535,998 See auditor's report and accompanying notes to these financial statements 17

73 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30,2018 Net change in fund balances-total governmental funds $ (3,323,469) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds reported capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Also, other various capital activity is not recognized in the governmental funds but is recognized in the Statement of Activities. Capital Outlays Depreciation expense Change to Net Position 5,205,688 (3,805,049) 1,400,639 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Interest expenses in the statement of activities includes accrued interest calculated for bonds payable (44,850) 16,603 The issuance oflong-term debt (e.g., bonds, leases) provides current fmancial resources to governmental funds, while the repayment of the principal oflong-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is frrst issued, whereas bond premiums are deferred and amortized in the statement of activities. These amounts is the net effect of these differences in the treatment oflong-term debt and related items. Bond principal payments Issuance of debt Bond premium amortization Prepaid bond insurance Changes in the Town's Net Pension Assets, Deferred Outflows of Resources related to pension plans or Net Pension Liability and Deferred Inflows of Resources related to pension plans result in an increase or decrease to the pension expense reported in the Statement of Activities. The effect of these adjustments resulted in a decrease in pension expense reported in the Statement of Activities. The Internal Service Fund is used by management to charge the costs of Employee Health claims. The net revenues (expenses) of the Internal Service Fund is reported with Govermnental Activities in the Government-Wide fmancial statements. Other certain accrued expenditures that do not use current financial resources are not reported in the fund fmancial statements. However, in the statement of activities these accrued expenses are recognized and charged to current activities. 3,745,000 (54,567) 78,865 (2,121) (1,925,046) (86,546) 301,900 Change in net position of governmental activities. $ 106,408 Please see Note 8 for a more detailed explanation of the differences between the Government-Wide Financial Statements and the Fund Financial Statements See auditor's report and accompanying notes to these financial statements 18

74 Statement of Net Position Proprietary Fund June 30, 2018 Enterprise Fund Sewer Fund Internal Service Fund Self Insurance Reserve ASSETS Current assets: Cash and cash equivalents $ 17,394 $ Accounts receivable, net: Water and sewer use fees 1,066,963 Other assets held for health benefits 1,778,566 Due from borrowing sources 1,349,327 Total current assets 2,433,684 1,778,566 Non-current assets: Capital assets Construction in progress 2,259,136 Depreciable assets - net 25,694,087 Sewer assessments 7,738,436 Other assets, net 1,759,832 Total noncurrent assets 37,451,491 Total assets 39,885,175 1,778,566 LIABILITIES & DEFERRED INFLOWS Current liabilities: Accounts payable and accrued expenses 307,915 Due to other funds 2,656,700 Current portion oflong term debt 1,318,121 Total current liabilities 4,282,736 Non-current liabilities: Bonds and loans payable 16,884,388 Total noncurrent liabilities 16,884,388 Total liabilities 21,167,124 Deferred Inflows Deferred sewer assessment fees 7,442,657 Other deferred revenue 218,050 Total deferred inflows of resources 7,660,707 NET POSITION Invested in Capital assets, net of related debt 11,100,041 Unrestricted {42,697) 1,778,566 Total net position $ 11,057,344 $ 1,778,566 See auditor's report and accompanying notes to these financial statements 19

75 Statement of Revenues, Expenses, and Changes in Net Position Proprietary Fund For the Fiscal Year Ended June 30, 2018 Enterprise Funds Sewer Fund Internal Service Fund Self Insurance Reserve Operating revenues Assessments and user fees $ 2,593,434 Charges for services Other revenues 27,193 Total operating revenues 2,620,627 Operating expenses Contract services 60,894 Health care management Operations & Maintenance 1,615,095 Depreciation and amortization 648,665 Total operating expenses 2,324,654 Operating income (loss) 295,973 Non-operating revenues (expenses) Interest and dividend income 5,581 Interest expense (534,517) Total non-operating revenues (expenses) (528,936) Change in Net Position (232,963) Total Net Position- Restated 11,290,307 $ 8,865,405 8,865,405 8,951,951 8,951,951 (86,546) (86,546) 1,865,112 Total Net Position- Ending $ 11,057,344 $ 1,778,566 See auditor's report and accompanying notes to these financial statements 20

76 Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended June 30,2018 Enterprise Funds Sewer Fund Cash flows from operating activities Cash received from customers $ 2,751,670 Cash payments to suppliers for goods and services (2,009,358) Other operating receipts 27,193 Net cash provided by (used for) operating activities 769,505 Internal Service Fund Self Insurance Reserve $ 8,951,951 (8,951,951) Cash flows from non-capital f"mancing activities Interfund loans 370,614 Net cash provided by (used for) non-capital f"mancing activities 370,614 Cash flows from capital and related f"mancing activities Additions to capital assets (573,986) Principal paid on bonds, notes and loans (1,280,218) Note drawdowns 1,246,840 Capitalized bond cost (3,818) Interest paid on notes (534,517) Net cash provided (used for) capital and related f"mancing activities (1,145,699) Cash flows from investing activities Interest and dividends on investment 5,581 Net cash provided by (used for) investing activities 5,581 Net increase (decrease) in cash and cash equivalents 1 Cash and cash equivalents at beginning of year 17,393 Cash and cash equivalents at end of year $ 17,394 $ Reconciliation of operating income to net cash provided by operating activities Operating income (Loss) $ 295,973 $ (86,546) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization 648,665 Changes in assets and liabilities: (Increase) decrease in accounts receivable or other assets 158,236 Increase (decrease) in accounts payable (333,369) Total adjustments 473,532 Net cash provided by operating activities $ 769,505 $ 86,546 86,546 See auditor's report and accompanying notes to these financial statements 21

77 Statement of Fiduciary Net Position Fiduciary Funds For the Fiscal Year Ended June 30, 2018 Pension Trust Funds Private Purpose Trust Funds Agency Funds ASSETS Cash Receivables: Internal balances Other Total receivables Investments, at fair value: Fixed income Mutual funds Equities Total investments Total Assets $ 3,684,358 $ 531, , ,421 6,680,193 9,467 15,274,505 1,810,618 14,015, ,456 35,970,212 2,604,541 39,654,570 3,376,264 $ 2,035,294 67,334 67,334 $ 2,102,628 LIABILITIES Internal balances 90,000 Deposits held in custody for others Total liabilities 90,000 $ 590,354 1,512,274 $ 2,102,628 NET POSITION Restricted for: Employees' pension benefits 39,654,570 Held in trust other purposes 3,286,264 TOTAL NET POSITION $ 39,654,570 $ 3,286,264 See auditor's report and accompanying notes to these financial statements 22

78 Statement of Changes in Fiduciary Net Position Fiduciary Funds For the Fiscal Year Ended June 30, 2018 Pension Trust Funds Additions Contributions Employer contributions $ 6,873,647 Plan members contributions 1,414,763 Other contributions 1,012 Total contributions 8,289,422 Investment earnings Interest and dividends 406,112 Net increase (decrease) in fair value of investments 2,809,891 Total investment earnings 3,216,003 Less investment expense 215,371 Net investment earnings 3,000,632 Total additions 11,290,054 Deductions Benefits paid 7,217,397 Operating expenses Total deductions 7,217,397 Change in net position 4,072,657 Net position- beginning of year 35,581,913 Net position- end of year $ 39,654,570 Private Purpose Trust Funds $ 24, , , , ,599 9,247 9, ,352 3,116,912 $ 3,286,264 See auditor's report and accompanying notes to these financial statements 23

79 Notes to Financial Statements

80 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The fmancial statements of the Town of Coventry, Rhode Island have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The following notes to the financial statements are an integral part of the Town's financial statements. Reporting Entitv The Town of Coventry was incorporated in The Town is governed largely under the 1973 Coventry Home Rule Charter. In some matters, including the issuance of short and long-term debt, the general laws of the State of Rhode Island govern the Town. The Town operates under a Council/Manager form of government and provides the following services as authorized by its charter: Public Safety (police, fire alarm, animal control and inspections) Public Works (sanitation, roads and bridges, engineering and building maintenance), Parks and Recreation, Education, Social Services, and General Administrative Services. Members of the Town Council are elected by district for a term of four years. The Town Council is granted all powers to enact, amend or repeal ordinances relating to the Town's property, affairs and government, including the power to create offices, departments or agencies of the Town, preserving the public peace, health and safety, establishing personnel policies, giving effect to any vote of the Financial Town Meeting authorizing the issuance of bonds and providing for an annual audit of the Town's accounts. This report includes all of the funds and account groups of the Town of Coventry. The reporting entity for the town consists of (a) the primary government, (b) organizations for which the primary government is fmancially accountable and (c) other organizations for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the reporting entity's financial statements to be misleading or incomplete. Component units are legally separate organizations for which the elected officials of the primary government are fmancially accountable. In evaluating the inclusion of other separate and distinct legal entities as component units within its financial reporting entity, the Town applied the criteria prescribed by GASB Statement No. 14, as amended by GASB Statement No. 39, "Determining Whether Certain Organizations are Component Units." A component unit is a legally separate organization for which the elected officials of the primary government are financially accountable or for which the nature and significance of its relationship with the primary government is such that exclusion would cause the reporting entity's fmancial statements to be misleading or incomplete. Through the application of GASB Statement Nos. 14 and 39 criteria, no separate entities have been determined to be component units of the Town. Component units are legally separate entities that meet any one of the following three tests: 24 continued

81 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Test 1- the primary government appoints the voting majority of the board of the potential Component unit and *Is able to impose its will on the potential component unit and/or * Is in a relationship of financial benefit or burden with the potential component unit; Test 2- the potential component unit is fiscally dependent upon the primary government; or Test 3 - the financial statements would be misleading if data from the potential component unit was not included. The following entity was considered for classification as component units for fiscal year 2018: * Coventry School System Although the Coventry School System met certain criteria of the tests listed above, this entity is not deemed to have separate legal status apart from the Town. As a result, the financial data of this entity has been included as Special Revenue Fund within the Town's financial statements and is not considered a component unit of the Town. BASIS OF PRESENTATION The accounts of the Town are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows, liabilities, deferred inflows, fund equity, net position, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds to demonstrate legal compliance and to aid management by segregating transactions related to specific Town functions or activities. Recently Issued Accounting Standards The Town implemented the following accounting pronouncements for the year ended June 30, 2018: GASB Statement No. 75 -Accounting for Postemployment Benefit Plans Other than Pension Planseffective for the Town's fiscal year ending June 30, GASB Statement No. 80- Blending Requirements for Certain Component Units, an Amendment of GASB Statement No. 14- effective for the Town's fiscal year ending June 30, GASB Statement No. 81 -Irrevocable Split- Interest Agreements- effective for the Town's fiscal year ending June 30,2018. GASB Statement No. 82- Pension Issues, an Amendment of GASB Statements No. 67, 68, and 73 - effective for the Town's fiscal year ending June 30, GASB Statement No. 86- Certain Debt Extinguishment Issues- effective for the Town's fiscal year ending June 30, continued

82 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The Town will adopt the following new accounting pronouncements in future years: GASB Statement No. 83- Certain Asset Retirement Obligations- effective for the Town's fiscal year ending June 30, GASB Statement No. 84- Fiduciary Activities- effective for the Town's fiscal year ending June 30, GASB Statement No. 85- Omnibus effective for the Town's fiscal year ending June 30, GASB Statement No. 87- Leases- effective for the Town's fiscal year ending June 30, GASB Statement No. 88- Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements- effective for the Town's fiscal year ending June 30, Government-Wide Financial Statements The statement of Net Position and the statement of activities display information about the reporting government as a whole. They include all funds of the reporting entity except for fiduciary funds (the activity of these funds is reported in the statements of fiduciary Net Position and changes in fiduciary Net Position). The government-wide financial statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. Fund Financial Statements Fund financial statements of the reporting entity are organized into funds, each of which, is considered to be separate accounting entities. Each fund is accounted for by providing a separate set of self-balancing accounts, which constitute its assets, liabilities, fund equity, revenues and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the Town or meets the following criteria: (a) Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or enterprise fund are at least 1 0 percent of the corresponding total (assets, liabilities, and so forth) for all funds of that category or type (that is, total governmental or total enterprise funds), and (b) Total assets, liabilities, revenues or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined. In addition to funds that meet the major fund criteria, any other governmental or enterprise fund that the government's officials believe is particularly important to financial statement users (for example, because of public interest or consistency) may be reported as a major fund. 26 continued

83 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) GOVERNMENTAL FUND TYPES These are the funds through which most governmental functions are typically fmanced. The funds included in this category are as follows: General Fund- is used to account for resources devoted to fmancing the general services that the Town performs for its citizens. General tax revenues and other sources of revenues used to finance the fundamental operations of the Town are included in this fund. The fund is charged with all costs of operating the government for which a separate fund has not been established. Special Revenue Funds - are used to account for restricted or committed revenues that comprise a substantial portion of the inflows of a fund. Capital Projects Funds- are used to account for fmancial resources to be used for the acquisition or construction of major capital facilities (other than those fmanced by Proprietary or Trust funds). PROPruETARYFUNDTYPE This fund type accounts for operations that are organized to be self-supporting through user charges. The fund included in this category is as follows: Enterprise Funds- are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be fmanced or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy management control, accountability, or other purposes. Internal Service Fund-this fund is used by the School Department to manage their self-insured health care cost with WB Community Health. FIDUCIARY FUND TYPES These funds account for assets held by the Town as a trustee or agent for individuals, private organizations, and other units of governments. These funds are as follows: Agency Funds - are used to account for funds that are to be used for educational and welfare expenditures and for funds held in escrow for other parties. Private Purpose Trust Funds - These funds account for assets held by the Town under various trust arrangements for the benefit of certain individuals and groups. Pension Trust Funds - is established to provide pension benefits to various employees of the Town. The principal revenue source for this fund is employer and employee contributions and investment income. 27 continued

84 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) BASIS OF ACCOUNTING Measurement Focus- Government Wide Financial Statements In the government wide financial statements the Statement of Net Position and Statement of Activities (governmental and business-type activities) are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expense, gains, losses, assets, deferred outflows of resources, liabilities and deferred inflows of resources resulting from exchange and exchange-like transactions should be recognized when the exchange takes place. Revenues, expense, gains, losses, assets, deferred outflows of resources, liabilities and deferred inflows of resources resulting from non-exchange transactions should be recognized in accordance with the requirements of Section NSO. BASIS OF ACCOUNTING Those revenues susceptible to accrual are property taxes, franchise taxes, special assessments, licenses, interest revenue and charges for services. Sales taxes collected and held by the state at year-end on behalf of the government also are recognized as revenue. Fines, permits, and parking meter revenues are not susceptible to accrual because generally they are not measurable until received in cash. The accounting and financial reporting treatment applied to the fund financial statements is determined by its measurement focus. All Governmental Fund Types are accounted for using a "current financial resources" measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. All Proprietary Fund Types and Fiduciary Fund Types are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the balance sheet. Fund equity (i.e., net total position) is segregated into contributed capital and retained earnings components. Proprietary Fund Type operating statements present increases (i.e., revenues) and decreases (i.e. expenses) in net total position. All Governmental Fund Types and Agency Funds are accounted for using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual, i.e. both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Licenses and permits, charges for services, fines, forfeits, and miscellaneous revenue are recorded as revenues when received in cash. Those revenues susceptible to accrual are property taxes and investment earnings. Fines and permits are not susceptible to accrual because generally they are not measurable until received in cash. Expenditures are recognized in the accounting period in which the fund liability is incurred, if measurable, except expenditures for debt service and other long-term obligations, which are recognized when paid. 28 continued

85 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Non-current portions of long-term receivables of Governmental Fund Types are reported on their balance sheets, in spite of their spending measurement focus. Special reporting treatments are used to indicate however, that they should not be considered "available expendable resources" since they do not represent net current assets. Recognition of Governmental Fund Type revenues represented by non-current receivables is deferred until they become current receivables. Because of their spending measurement focus, expenditure recognition for Governmental Fund Types excludes amounts represented by non-current liabilities. Since they do not affect net current position, such long-term amounts are not recognized as Governmental Fund Type expenditures or fund liabilities. They are instead reported as Long-term Liabilities - Governmental Activities. In applying the "susceptible to accrual" concept to intergovernmental revenues the legal and contractual requirements of the numerous individual programs are used as guidance. There are, however, essentially two types of such revenues. For one type, amounts must be expended on the specific purpose or project before any amounts will be paid to the Town; therefore, revenues are recognized based upon the expenditures recorded. For the other type, revenues are virtually unrestricted as to purpose of expenditure and revocable only for failure to comply with the prescribed requirements, such as a Community Development Block Grant. These resources are reflected as revenues at the time of receipt or earlier if they meet the "available" criteria. All Proprietary Funds and Pension Trust Funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned, and their expenses are recognized when they are incurred. Cash Equivalents For the purpose of the Statement of Cash Flows, the Propriety Fund Types consider all highly liquid investments with a maturity date of three months or less when purchased to be cash equivalents. Investments Investments are Government Securities, Commercial Paper and various types of corporate stocks and bonds held in the Governmental and Fiduciary Fund types, which are recorded at fair value. Fair value is determined wherever possible, by use of published quoted amounts, where quotes are not available, formal valuations are obtained. When discounts or premiums are present, the Town will capitalize and amortize the amount over the period of the related investment. Inventories Inventories of supplies are considered to be expenditures at the time of purchase. No significant inventory balances were on hand at June 30,2018. Capital Assets Capital assets in Governmental Fund type operations are accounted for using the "current fmancial resources" measurement focus. Capital assets which include property, plant and equipment, and infrastructure (e.g. road, bridges, curbs and gutters, streets and sidewalks, and drainage systems) are reported in the applicable governmental or business-type activity columns in the government-wide fmancial statements. The Town 29 continued

86 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) defmes capital assets as assets with an individual cost of more than $5,000 and an estimated useful life in excess of five years. Such assets are recorded at historical cost or estimated historical cost (for certain assets acquired prior to 1960). Donated assets are recorded at estimated fair market value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are recorded as expenditures as incurred. The Town capitalizes certain interest costs in accordance with GASB Code Section 1400 as part of constructed assets. Interest is capitalized throughout the construction period in the Capital projects fund prior to the assets being transferred to the governmental fund and placed in service. Property, plant and equipment for Proprietary Fund Types are valued at historical cost. Additions, improvements and other capital outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance is expensed as incurred. Property, plant and equipment of the primary government are depreciated using the straight line method over the following estimated useful lives: Estimated Description Lives (years) Building Machinery and equipment Improvements Other infrastructure Unearned Revenues Unearned revenues represent funds received in advance of being owed or receivables, which will be collected and included in revenues of future fiscal years. Deferred Outflows of Resources Represent a consumption of net position or fund balance by a government that is applicable to a future reporting period. Deferred Inflows of Resources In addition to liabilities, the statement of net position and/or balance sheet can report deferred inflows of resources. Deferred inflows of resources represent the acquisition of net position that applies to a future period and which will not be recognized as an inflow of resources (revenue) until a later date. Pensions -For purposes of measuring the net pension liability, net pension asset, deferred outflows of resources, and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Town of Coventry, Rhode Island's various pension plans (described in more detail in Note 15) and additions to/deductions from the pension plans fiduciary net position have been determined on the same basis as they have been reported by the pension plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 30 continued

87 NOTES TO FINANCIAL STATE:MENTS JUNE 30, 2018 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Equity Classifications Government-Wide Statements- Equity is classified as Net Position and displayed in three components: Net Investment in capital assets- Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Restricted- Consists of Net Position with constraints placed on their 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- All other Net Position that do not meet the definition of "restricted" or "net investment in capital assets". Governmental Funds - Equity is classified into five categories: The Town has adopted the requirements of the Government Accounting Standards Board GASB Statement No Fund Balance Reporting and Governmental Fund Type Definitions. Acceptance of this statement has changed the Town's presentation of the elements of fund balances, a key indicator of inter-period equity. Listed below are the new fund balance categories and their definitions. Non-spendable - are balances that are permanently precluded from conversion to cash such as permanent funds and inventories. Restricted - requires that inflows and outflows of resources and balances be constrained to a specific purpose of enabling legislation, external parties or constitutional provisions. Committed - are balances with constraints imposed by the government using the highest level of decision-making authority. These constraints can only be removed or changed by the same decision making authority taking the same type of action. Assigned- are balances intended for a specific purpose by the government's management and are also appropriations of existing fund balances. Unassigned - are balances available for any purpose. They are not precluded by a management decision, law constitutional provision in the general fund. The Town has set classification policies and procedures for the above noted level of fund balance reporting. a) For committed fund balances: the Town Council is the highest level of decision making authority and a meeting of the Town Council is required to establish, modify or rescind a fund balance commitment. b) For assigned fund balance: The Town's Finance Director and the School Department's Director of Administration are authorized to assign amounts to a purpose and with authorization given by the Town Council and the School Committee. c) The Town considers restricted amounts to have been spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available and considers committed amounts to have been spent when and expenditure is incurred for purposes for which amounts in any other unrestricted fund balance could be used. 31 continued

88 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenues, Expenditures and Expenses Revenues for governmental funds are recorded when they are determined to be both measurable and available. Generally, tax revenues, fees and non-tax revenues are recognized when received. Grants from other governments are recognized when qualifying expenditures are incurred. Expenditures for governmental funds are recorded when the related liability is incurred. Revenues and expenses of proprietary fund types are recognized using the full accrual basis of accounting. Revenue is recognized when earned and expenses as incurred. Program Revenues and Expenses fu the statement of activities specific revenues are allocated to program expenses due to their direct relationships. Collections for licenses, fees, tickets and fmes are among some of the revenue sources that are program revenues. fudirect expenses are not allocated to functions in the statement of activities. Property Taxes The Town is permitted by state law to levy property taxes. Current tax collections for the Town were approximately 99.4% of the total December 31, 2016levy. The Town's fiscal 2018 property taxes were levied in July of 2017 on assessed valuation as of December 31, Upon levy, taxes are billed quarterly and are due on August 15, November 15, February 15, and May 15. Failure to mail payments by due dates will result in lien on taxpayer's property. Assessed values are established by Tax Assessor's Office and are currently calculated at 100% of assessed value for real estate and 100% of market value for motor vehicles. Vacation, Sick Leave, and Other Compensated Absences Vacation leave is earned by all full-time Town employees. Upon termination, employees are entitled to receive compensation for their unused accrued vacation leave. Sick leave is earned by all full-time employees as well as part-time employees at the School Department. Unused vacation leave is paid upon an employee's termination. Upon retirement, municipal union employees are entitled to receive their accumulated sick leave up to 480 hours, policemen receive all accumulated unused sick leave up to 120 days, and school employees are entitled to receive compensation for their accrued sick leave balance, up to 140 days for teachers and classified personnel. Part-time employees are eligible to receive one half of the above amounts. Upon termination, the Town's non-union employees are entitled to one half of their accumulated sick leave up to 480 hours. Upon retirement eligible School Department employees are entitled to receive one half of their accumulated sick leave after 15 years of service. For Governmental Fund Types accrued compensated absences are presented as a current liability for those amounts expected to be paid with current fmancial resources. For those compensated absences not to be paid with current financial resources the liability is recorded in the Statement of Net Position of the Government Wide Financial Statements. Inter-fund Transactions Quasi-external transactions are accounted for as fund revenues, expenditures or expenses (as appropriate). Transactions which constitute reimbursements of a fund for expenditures or expenses initially made from it that are properly applicable to another fund are recorded as expenditures or expenses (as appropriate) in the reimbursing fund and as reductions of the expenditure or expense in the fund that is reimbursed. All inter- 32 continued

89 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) fund transactions, except advances, quasi-external transactions and reimbursements, are accounted for as transfers. Nonrecurring or non-routine transfers of equity between funds are considered equity transfers. All other inter-fund transactions are treated as operating transfers. Short-Term Inter-fund Receivable/Payables During the course of operations, numerous transactions occur between individual funds for goods provided or serviced rendered. These receivables and payables are classified as "internal balances" on the balance sheet. Advances to Other Funds Noncurrent portions of long-term inter-fund loan receivables are reported as advances and are offset equally by a fund balance reserve account which indicates that they do not constitute expendable available financial resources and, therefore, are not available for appropriations. Estimates The preparation of fmancial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures I expenses during the reporting period. Actual results could differ from those estimates and the differences may be material. NOTE 2 -BUDGETARY DATA AND BUDGETARY COMPLIANCE In accordance with the Home Rule Charter, the Town has formally established budgetary accounting control for its General Fund and the School Unrestricted Fund, which is a Special Revenue Fund. The General Fund is subject to an annual operating budget adopted at the financial Town Meeting. The School Unrestricted Fund is subject to an annual operating budget approved by the School Committee and adopted at the financial Town meeting. The annual operating budgets' appropriation amounts are supported by revenue estimates and take into account the elimination of accumulated deficits and the re-appropriation of accumulated surpluses to the extent necessary. Appropriations which are not expended or encumbered lapse at year end. The School Department has established formal budgetary accounting as a management control for all funds. Annual operating budgets are adopted each fiscal year through the passage of an annual budget. The School Department budgets its expenditures based upon its estimate of state aid and the funding provided by the Town. Federal and state grants, included in the restricted special revenue fund, are not part of the legally adopted Town or School Department budget since their receipt is uncertain at the time the budgeting process is completed. The General Fund and Special Revenue- School Unrestricted Fund's annual operating budgets are in conformity with generally accepted accounting principles. The budget to actual presentation in the financial statements is reflected on the budgetary basis. The only Special Revenue fund that has a legally enacted budget is the School Unrestricted Fund. Therefore, the budget and actual figures presented for Special Revenue Funds in the Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual only include this fund. 33 continued

90 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 3-STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Legal Debt Margin The Town's legal debt margin as set forth by State Statute is limited to three percent of total assessed value, which approximates $103,897,331 based on the December 31, 2016 assessment. As of June 30, 2018 the Town's debt is under the debt limit by $76,387,331. In addition to the bonding authority granted under of the RI General Laws, the Town of Coventry can authorize bond issues pursuant to a special act of the RI General Assembly. Bond issues authorized by a special act of the General Assembly are normally not subject to any legal debt limit, but are subject to financial constraints such as the Town's ability and willingness to service the bonded debt. NOTE 4- CASH AND INVESTMENTS Deposits: The Town maintains deposits in various fmancial institutions that are carried at cost except for those amounts which are carried as petty cash. The carrying amount of deposits is separately displayed on the balance sheet as "Cash and Cash Equivalents". Investments: Investment of all idle funds are made through national banks or trust companies, providing that the fmancial conditions and integrity of these institutions are verifiable and can be monitored. The investment of funds are in direct obligations of the United States Government and "money market instruments" rated "A" or better. Investments in any one institution cannot exceed five (5) percent of that institutions capital and surplus as set forth in the institutions most recent audited fmancial statements. "All investments are made as would be done by prudent men of discretion and intelligence in such matters who are seeking a reasonable income and preservation of their capital." Interest Rate Risk: The Town limits its exposure to fair value losses arising from changes in interest rates by structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity, and investing operating funds primarily in shorter-term securities, money market funds, or similar investment pools. Concentrations: The Town policy is to maintain a diversified portfolio to minimize the risk of loss resulting from over concentration of assets in a specific maturity. Custodial Credit Risk Deposits: This is the risk that, in the event of failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. As ofjune 30,2018, $4,725,055 of the Town's bank balance of$27,119,384 was uninsured and uncollateralized. Investments: This is the risk that in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. 34 continued

91 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 4- CASH AND INVESTMENTS (continued) Cash and investments ofthe Town consist ofthe following at June 30, 2018 Cash and Cash Equivalents Deposits with fmancial institutions Investments Private Purpose Trust Funds: Fixed Income Pool Mutual Funds Equities Total Private Purpose Trust Funds Pension Trust Funds: Fixed Income Mutual Funds Equities Total Pension Trust Funds Total Cash and Investments $ 23,960,522 9,467 1,810, ,456 2,604,541 9,904,280 16,608,088 14,015,514 40,527,882 $ 67,092,945 Cash and investments are classified in the accompanying financial statements as follows: Statement of Net Position Cash and cash equivalents Fiduciary Funds Cash Investments Total Cash and Investments $ 17,709,568 6,250,954 38,574,753 44,825,707 $ 67,092,945 Interest Rate Risk: This is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. Information about the exposure of the town's debt type investments to this risk using the segment time distribution model is as follows: 35 continued

92 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 4- CASH AND INVESTMENTS (continued) Investment Maturities {in Years 1 Fair Less Than Type of Investment Value 1 Year Years Years Corporate Bonds $ 6,379,400 $ 232,159 $ 2,412,142 2,429,439 Government Bonds 3,524,880 88,506 1,144,550 1,091,794 Total $ 9,904,280 $ 320,665 $ 3,556,692 3,521,233 Over 10 Years 1,305,660 1,200,030 2,505,690 Credit Risk: Generally, credit risk is the risk that an issuer of a debt type investment will not fulfill its obligation to the holder of the investment. This is measured by assignment of a rating by a nationally recognized rating organization. U.S. government securities or obligations explicitly guaranteed by the U.S. Government are not considered to have credit risk exposure. Presented below is the minimum rating as required for each debt investment type. Average Rating Municipal& Corporate Bonds Aaa $2,046,638 Aal 160,019 Aa2 249,855 Aa3 294,920 AI 793,997 A2 547,998 A3 1,234,476 Baal 608,480 Baa2 215,863 Baa3 227,274 $6,379,520 NOTE 5- PROPERTY TAXES The Town is responsible for assessing, collecting, and distributing property taxes in accordance with enabling state legislation. All property taxes for fund statement purposes are recognized in compliance with NCGA Interpretation-3 (Revenue Recognition - Property Taxes), which states that such revenue is recorded when it becomes measurable and available. Available means due, or past due and receivable within the current period and collected no longer than 60 days after the close of the current period. The Town does not use an allowance method for bad debts. It directly writes off receivables as they become un-collectible as per state law. 36 continued

93 NOTE 6- CAPITAL ASSETS NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 The Town defines capital assets as assets with an individual cost of more than $5,000 and an estimated useful life in excess of five years. Such assets are recorded at historical cost or estimated historical cost (for certain assets acquired prior to 1960). The following schedules list prior year balances and current year activity for all Governmental Fund fixed asset transactions and Proprietary Funds. Capital asset activity for government funds for the fiscal year ended June 30, 2018 was as follows: Beginning Balance Increases Primary Government Decreases Ending Balance Governmental activities: Capital assets not being depreciated: Land $ Construction in Progress Total capital assets not being depreciated 9,688, ,101 9,841,034 $ 4,788,262 4,788,262 $ $ 9,688,933 4,940,363 14,629,296 Depreciable assets Infrastructure Buildings & improvements Machinery and equipment Office equipment and furniture Vehicles Total other capital assets at historical cost 35,693, ,946,906 1,322,437 6,674,336 7,706, ,343, , , ,426 35,693, ,135,385 1,322,437 6,674,336 7,935, ,761,346 Less accumulated depreciation for: Infrastructure Buildings & improvements Machinery and equipment Office equipment and furniture Vehicles Total accumulated depreciation 32,638,220 85,817, ,980 6,375,700 4,164, ,993, ,537 2,890,445 94,784 84, ,816 3,805,049 32,817,757 88,708,208 1,091,764 6,460,167 4,720, ,798,554 Net Depreciable Assets 34,350,415 (3,387,623) 30,962,792 Governmental activities capital assets, net $ 44,191,449 $ 1,400,639 $ $ 45,592,088 Depreciation expense was charged to functions/programs as follows: Governmental activities: General Government $ 127,145 Public safety 121,938 Public Works 814,284 Health and Human Services 73,070 Education 2,510,631 Culture and Recreation 157,981 Total governmental activities depreciation expense $ 3,805, continued

94 NOTE 6- CAPITAL ASSETS (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 Capital asset activity for business-type activity for the fiscal year ended June 30, 2018 was as follows: Beginning Balance Primary Government Increases Decreases Ending Balance Business-type activities: Capital assets not being depreciated: Construction in progress Total capital assets not being depreciated $ 1,685,150 1,685,150 $ 595,170 $ 21, ,170 21,184 $ 2,259,136 2,259,136 Other capital assets: Wastewater collection system Total other capital assets at historical cost 32,109,792 32,109,792 32,109,792 32,109,792 Less accumulated depreciation for: Wastewater collection system Total accumulated depreciation Business-type activities capital assets, net 5,767,040 5,767,040 $ 28,027, , ,665 $ (53,495) $ 21,184 6,415,705 6,415,705 $ 27,953,223 Depreciation expense was charged to functions as follows: Business-type activities: Sewer Total business-type activities depreciation expense $ 648,665 $ 648, continued

95 TOWN OF COVENTRY NOTES TO FINANCIAL STATEMENTS June 30,2018 NOTE 7-DIFFERENCES BETWEEN GOVERNMENTAL FUND BALANCE SHEET AND THE STATEMENT OF NET POSITION. "Total fund balances" of the Town's governmental funds of$20,535,998 differs from the "net position" of governmental activities of$(142,019,626) reported in the statement of net position. This difference primarily results from the long-term economic focus of the statement of net position versus the current financial resources focus of the governmental fund balance sheets. The effect of the differences is illustrated below. Balance Sheet I Statement of Net Position Total Long-term Reclassifications Statement Governmental Assets/ and Net Position Funds Liabilities {1) Eliminations {2) Totals Assets Cash and cash equivalents $ 17,692,174 $ $ - $ 17,692,174 Investments 4,557,670 4,557,670 Accounts receivable: Real estate & personal property taxes receivable 2,556,336 2,556,336 Due from federal and state governments 1,170,644 1,170,644 Other receivables 1,036, ,933 1,476,795 Due from other funds 11,819,580 (11,819,580) Net pension asset 6,023,168 6,023,168 Other assets 1,778,566 1,778,566 Prepaid expenses 637,250 31, ,074 Land 9,688,933 9,688,933 Construction in progress 4,940,363 4,940,363 Depreciable capital assets - net 30,962,792 30,962,792 Total assets 39,470,516 51,647,080 {9,601,081) 81,516,515 Deferred outflow of resources - 22,233,596-22,233,596 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable and accrued expenses 7,003, ,784 7,235,029 Due to other funds 8,722,947 - (11,379,647) (2,656, 700) Unearned revenues 188, ,000 Other liabilities 440, ,670 Long-term liabilities Due within one year 3,817,865 3,817,865 Due in more than one year 222,730, ,730,974 Total liabilities 16,354, ,780,623 {11,379, ,755,838 Deferred inflow of resources 2,579,656 11,434,243 14,013,899 Fund Balances, Deferred Inflows/Net Position Total fund balances/net position 20,535,998 (164,334,190) 1,778,566 (142,019,626) Total liabilities, deferred inflows of resources and fund balances/net position $ 39,470,516 $ 73,880,676 $ (9,601,081) $ 103,750, (continued)

96 TOWN OF COVENTRY NOTES TO FINANCIAL STATEMENTS June 30,2018 NOTE 7- DIFFERENCES BETWEEN GOVERNMENTAL FUND BALANCE SHEET AND THE STATEMENT OF NET POSITION. (1) When capital assets (land, buildings, equipment) tbat are to be used in governmental activities are purchased or constructed, the cost of these assets are reported as expenditures in governmental funds. However, the statement of net position includes those capital assets among the assets of the Town as a whole. Land Construction in progress Cost of capital assets Accumulated depreciation Because the focus of governmental funds is on short term financing, some assets will not be available to pay for current-period expenditures. Those assets (for example receivables) are offset by deferred revenues in the governmental funds and thus are not included in the fund balance. Adjustment of unearned revenue Interest on long-term debt is accrued in the statement of net position but is not accrued in governmental funds, rather it is recognized as an expenditure when due. Adjustment of accrued interest expense Long-tern liabilities applicable to the city's governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities, both current and long-term are reported in the statement of net position. Bonds & notes payable Bond premium Prepaid bond insurance Accrued compensated absences Net pension liability Net OPEB liability $ 9,688,933 4,940, ,761,346 (133,798,554) $ 45,592,088 $ 2,579,656 $ (231,784) $ 42,565,576 1,167,163 (31,824) 4,125, ,583,565 17,107,002 $ 226,517,015 Town pension plans with a net pension asset balance at the end of the year. Net pension asset- TSB $ (6,023,168) Deferred inflows and outflows of resources are amounts used under GASB 68 in developing the annual pension expense. Deferred inflows and outflows arise with differences between expected and actual experiences; such as changes of assumptions or differences in expected and actual investment returns. These amounts will be recognized in future periods. Deferred inflows of resources - pensions Deferred outflows of resources - pensions (2) The Internal Service Fund is used by management to recognize revenues and charge the costs of Health Care activity. The assets and liabilities of the Internal Service Fuud are included in Governmental Activities in the Government-Wide Statement ofnet Position. (2) The elimination of internal balances of governmental and business type activities. The reclassification of monies owed to and from fiduciary funds $ $ $ $ $ (14,013,899) 22,233,596 1,778,566 11,379,647 (439,933) 40 ( continned)

97 TOWN OF COVENTRY NOTES TO FINANCIAL STATEMENTS June 30,2018 NOTE 8- DIFFERENCES BETWEEN GOVERNMENTAL FUND OPEBA11NG STATEMENTS AND THE STATEMENT OF ACTIVITIES The "net change in the fund balances" for governmental funds ($3,323,469) differs from the "change in net position" for governmental activities $106,408 reported in the statement of activities. The differences are primarily from the long-term economic focus of the statement of activities versus the current financial resources focus of the governmental funds. The effect of the differences are illustrated below. Statement of Revenues, Expenditures, and Changes in Fund Balances I Statement of Activities Long-term Total Revenues/ Capital- Internal Long-term Statement Governmental Expenses& related Service Debt of Activities Funds Reclassifications ~1) Items (2) Fund(3) Transactions (4) Totals Revenues Real estate and personal property taxes $ 71,652,257 $ (44,850) $ - $ $ $ 71,607,407 Other taxes 1,005,987 1,005,987 Penalties and interest on taxes 461, ,433 Licenses, fees and permits 789, ,512 Investment income 223, ,076 Intergovernmental 34,417,327 34,417,327 Contributions and private grants 24,091-24,091 Charges for services 2,501,191 2,501,191 Miscellaneous 974,164 78,865 1,053,029 Total revenues 112,049,038 (44,850) - 78, ,083,053 Expenditures Current General government 5,939, ,145 86, ,523 6,512,174 Public safety 12,749, ,938 (85,405) 12,786,220 Education 76,750,763-2,355,931 1,352,149 80,458,843 Public works 10,629,612 (4,104,853) 6,524,759 Community and economic development 421, ,182 Health and human services 1,400,167 73,070 1,473,237 Culture and recreation 2,245, ,981 2,403,972 Capital outlay 131,851 (131,851) Debt service Principal payments 3,745,000 (3,745,000) Interest and fiscal charges 1,412,861 ~16,603~ 1,396,258 Total expenditures 115,427,074 (16,603) 1,400,639}_ 86,546 (2,119,733) 111,976,645 Other fmancing uses/changes in net position Issuance of debt 54,567 (54,567) Total other fmancing uses 54,567 (54,567) Net change for the year $ (3,323,469) $ (28,247) $ 1,400,639 $ (86,546) $ 2,144,031 $ 106, (continued)

98 TOWN OF COVENTRY NOTES TO FINANCIAL STATEMENTS June 30,2018 NOTE 8- DIFFERENCES BETWEEN GOVERNMENTAL FUND OPERATING STATEMENTS AND THE STATEMENT OF ACTIVITIES (1) Because some property taxes and other receivables will not be collected for several months after fiscal year ends, they are not considered as "available" revenues in the governmental funds. Interest expense in the statement of activities differs from the amount reported in gove=ental funds. Accrued interest was calculated for bonds and notes payable. Unearned revenue property taxes Accrued interest expenditure adjustment $ $ (44,850) (44,850) 16,603 (2) When capital assets that are to be used in gove=ental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in gove=ental funds. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. As a result, fund balance decreases by the amount of financial resources expended, whereas net position decrease by the amount of depreciation expense charged for the year. Capital outlay Depreciation expense Difference $ 5,205,688 (3,805,049) 1,400,639 (3) Internal service funds are use by management to charge the cost of certain activates, such as health care to individual funds. The adjustments for internal service funds "close" those funds by charging additional amounts or reducing expenditures to the gove=ental funds thus eliminating any surplus or deficit on the internal service fund. $ (86,546) (3) Other accrued expenditures are not recorded on the funds statement but are shown on the statement of activities in order to present the true financial position of the Town on its long-term liabilities. Net (increase)/decrease in compensated absences Net (increase )/decrease in net pension liability Net increase/( decrease) in net pension asset Net (increase )/decrease in net OPEB liability Net increase/( decrease) in net deferred outflows Net (increase )/decrease in deferred inflows Difference $ $ (168,743) (1,602,409) (1,035,956) 470,643 5,071,324 (4,358,005) (1,623,146) Repayment of bond and note principal is reported as an expenditure in the gove=ental funds and, thus, bas the effect of reducing fund balance because current financial resources bave been used. For the town as a whole, however, the principal payments reduce the liabilities in the statement of net position an do not result in an expense in the statement of activities. Bond principal payments Issuance of debt Bond premium amortization Prepaid bond insurance amortization Total principal payments made $ 3,745,000 (54,567) 78,865 (2,121) 3,767, (continued)

99 NOTE 9 -LONG-TERM LIABILITIES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 Governmental long-term liabilities do not appear in the fund financial statements but rather are a reconciling item in the presentation of the government-wide financial statements and are included in the statement ofnet Position. Long-Term liabilities directly related to and intended to be paid from the Proprietary Fund Types are included in the accounts of such fund. Long-term liability activity for the fiscal year ended June 30, 2018 was as follows: Governmental Activities Amounts Balance Balance Due within July 1, 2017 Additions Retirements June 30, 2018 One Year Bonds Payable $ 45,205,000 $ $ 3,655,000 $ 41,550,000 $ 3,650,000 Issuance premium on bonds 1,246,028 78,865 1,167,163 78,865 Total bonds payable 46,451,028 3,733,865 42,717,163 3,728,865 Other liabilities : Notes payable 1,051,009 54,567 90,000 1,015,576 89,000 Accrued compensated absences 3,956, ,743 4,125,533 Net pension liability 159,981,156 1,602, ,583,565 Net 0 PEB liability 17,577, ,643 17,107,002 Total other liabilities 182,566,600 1,825, , ,831, Governmental Activities long-term liabilities $ 229,017,628 $ 1,825,719 $ 4,294,508 $ 226,548,839 $ 3,817,865 Business-Type Activities Rhode Island Infrastructure Bank 19,482,727 1,280,218 18,202, ,121 Business-Type long-term liabilities 19,482,727 1,280,218 18,202,509 1,318,121 The following schedule summarizes the Town's bonds and notes Interest Rates Principal Due Dates Governmental bonds 2.00%- 4.00% $ 42,717, Enterprise Funds notes payable.47%-5.08% 18,202, Total All Funds $ 60,919, continued

100 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 9 -LONG-TERM LIABILITIES (continued) The debt service through maturity for the Governmental bonds are as follows: Fiscal Year Ended June 30 Principal Interest ,650,000 1,291, ,660,000 1,197, ,660,000 1,098, ,670, , ,395, , ,055, , ,105, ,730 Thereafter 20,355,000 3,892,733 TOTALS $ 41,550,000 $ 10,965,553 Total 4,941,519 4,857,167 4,758,063 4,665,043 3,296,336 2,881,962 2,867,730 24,247,733 $ 52,515,553 The debt service through maturity for the Enterprise funds loans are as follows: Fiscal Year Ended June 30 Principal Interest ,318, , ,357, , ,401, , ,443, , ,493, , ,535, , ,586, ,190 Thereafter 8,067, ,245 TOTALS $ 18,202,509 $ 3,857,864 Total 1,888,241 1,887,984 1,889,384 1,887,537 1,890,804 1,884,508 1,884,311 8,847,604 $ 22,060, continued

101 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 9 -LONG-TERM LIABILITIES (continued) SEWER FUND INTER-MUNICIPAL AGREEMENT The Town of Coventry has entered into an Inter-Municipal Agreement with the Town of West Warwick, RI. Under the provisions of this agreement, the Town of Coventry is responsible for certain costs and improvements to the wastewater/sewer treatment facility and operations located in the Town ofwest Warwick. In addition to its own normal operating costs and outstanding debt obligations, the Town of Coventry is also responsible for portions of the outstanding debt obligations and interest which is due annually on these debt obligations which are presented on the Town of West Warwick's annual financial statements. The portion of the debt obligations to be paid by the Town of Coventry in accordance with the Inter-Municipal Agreement has been recorded as a special assessments receivable and revenue by the Town ofw est Warwick when the project was completed and the obligation entered into. The Town of Coventry records the annual related expenses assessed to the town as operating expenses on its Sewer Fund which is accounted for as an enterprise fund on its annual fmancial statements. The following schedule shows the annual percentage share of the cost related to the Town of West Warwick's debt service payments the Town of Coventry has contracted to pay. Fiscal Year Ended June 30 Total 2019 $ 682, , , , , ,060 Thereafter 2,637,628 TOTALS $ 6,665, continued

102 NOTE 10- FUND DEFICITS NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 The following individual funds had deficit fund equity balances as of June 30, 2018: Governmental Funds Special Revenue Funds RIRRC Compo sting Grant $ 1, Isle of Capri 4,320 Read Schoolhouse Renovations 26,404 Anthony Village 18,882 Byrne Grant 580 Drug Seizure Fund 17,075 Resource Sharing 539 RIEMA Maple Valley & Franklin 18,296 RIEMA Industrial Drive 7,990 RIEMA Hannnet Ave 6,462 RIEMA Johnson Blvd 24,577 Coventry Emergency Management 297 Federal Energy Grant 2 13,088 RIDOT Leap Road 197,267 Blizzard N emo 21,263 Storm Juno 6,810 Perkins Vocational Ed 3,348 Title ill 3,919 Direct Reimbursement 4,246 CTE Categorical Fund 10,372 CTE Categorical Fund Even Year 3,202 CTE Categorical Fund 2 39,115 CTE Development & hnplmentation 1,496 Feinstein Restricted Fund 2,496 CPEFFund 2,779 Sports Programs 20,313 School Food Service Fund 411,409 Capital Project Funds Capital hnprovement Fund ,937 High School AC Unit 3,957 Hannnett Road/Island Drive 1,775 Private Purpose Trust Fund Cemetery Fund 29,009 Total $ 1,275,833 ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** * ** ** ** ** ** ** * * ** ** ** * * The deficit balance will require a future administration plan to fund this deficit. ** The deficit balance will be eliminated by future reimbursements from either the State, the Federal Government or external financing. 46 continued

103 NOTE 11-NOTES RECEIVABLE NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 As of June 30, 2018, a balance of $357,266 is due to the Town of Coventry from two mortgage promissory notes. These notes were issued by the Maple Root Corporation and Ramblewood Housing Cooperative Corporation. The original, amount of the notes were for $560,912 and $439,088 respectively and were issued on February 3, 2004 with an interest rate of 3.5% per annum. The notes are to be paid with 240 monthly installments of $3, and $2, respectively, commencing March 1, The above receivables are secured by land. NOTE 12 -INTERFUND RECEIVABLES AND PAYABLES Inter-fund receivables represent loans to various funds for use in operations. These amounts are expected to be repaid at certain future dates. Below are balances at June 30,2018. Due from other funds Due to other funds General Fund Special Revenue Funds: $ 3,716,747 $ 6,187,945 School Unrestricted School Restricted School Food Service Town Restricted Coventry Landfill Fund Capital Projects: 5,996, ,354 9, ,301 7,001, , , ,833 1,631,336 School Improvement Town Capital Improvement Fiduciary Funds: 284, ,587 1,101, , , ,666 Permanent Funds Agency Funds Proprietary Funds 240, ,421 90, , ,354 Sewer Fund Totals $ 12,060,001 2,656,700 $ 12,060, continued -,_

104 NOTE 13- FUND EQUITY NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 The following fund balance category reservations are recorded in the fmancial statements at June 30,2018: Non-spendable - are balances that are permanently precluded from conversion to cash such as permanent funds and inventories. Restricted- requires that inflows and outflows of resources and balances be constrained to a specific purpose of enabling legislation, external parties or constitutional provisions. Committed - are balances with constraints imposed by the government using the highest level of decision-making authority. These constraints can only be removed or changed by the same decisionmaking authority taking the same type of action. Assigned- are balances intended for a specific purpose by the government's management and are also appropriations of existing fund balances. Unassigned - are balances available for any purpose. They are not precluded by a management decision, law constitutional provision in the general fund. NOTE 14-SUMMARY DISCLOSURE OF SIGNIFICANT CONTINGENCIES A. Litigation The Town has been named as a responsible party in connection with the investigation and remediation of the former Coventry landfill owned and operated by the Town and located off Arnold Road in Coventry. The Town is one of a number of persons to whom a Letter of Responsibility was issued in June, 2003 by the Rhode Island Department of Environmental Management requiring such persons to conduct the investigation and remediation of the landfill under applicable state and federal law and regulations. The Town is one of a number of such persons who executed and delivered that certain Partial Consent Decree in 2005 in the case of State of Rhode Island, Department of Environmental Management v. Town of Coventry, pursuant to which the signatories agree to conduct and pay for an environmental investigation of the site. The current estimate of the total cost of the remediation of the landfill is approximately $7- $10 million (of which the Town is obligated under the above Agreement to pay 60% thereof). However, it is expected that due to the ongoing use of Beneficial Use Determination ("BUD") materials, which Performing Parties accept tipping fees for the material it receives to use as cover at the Landfill, the overall cost of the remediation may be significantly less than the estimated amount, and the Performing Parties could complete the remediation with a monetary surplus. For a period of approximately 30 years thereafter, the Performing Parties will need to fund operation and maintenance of the landfill to satisfy RID EM requirements, which could cost the Town approximately $600,000 over that 30-year period. Negotiations are under way which, if successful, may result in the further acceptance of additional BUD materials at the landfill which would be used to offset most of the $600,000 in going-forward operation and maintenance costs following landfill closure. During the ordinary course of its operations, the Town is a party to various claims, other legal actions and complaints. These various legal actions include disputes in property valuations and torts for which the Town has been named as a defendant. In the opinion of the Town's management and legal counsel, other than the matter stated above they do not anticipated any of them to have a material fmancial impact or at this time their legal counsel has been unable to assess liability, if any, on the part of the Town. 48 continued

105 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 14- SUMMARY DISCLOSURE OF SIGNIFICANT CONTINGENCIES (continued) B. Federally Assisted Programs - Compliance Audits The Town participates in a number of federally assisted programs. The audits of these programs through the year ended June 30, 2018 were audited in connection with the accompanying financial statements under the Single Audit Concept and the auditor's reports thereon are presented in the Single Audit Report. Management believes that the amounts, if any, of expenditures, which may be disallowed, will not be material to the financial position of the Town. NOTE 15 -PENSION PLANS In the fiscal year ended June 30, 2015 the Town adopted the requirements of the Government Accounting Standards Board GASB Statement No. 68 -Accounting and Financial Reporting for Pension -an amendment of GASB Statement No. 27. The objective of the Statement is to improve financial reporting by state and local governmental pension plans. The Statement resulted from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for pensions with regard to providing decisionuseful information, supporting assessments of accountability and inter-period equity, and creating additional transparency. The Statement amends Statement No. 27 Accounting for Pensions by State and Local Governmental Employees, as it relates to pension plans that are administered through trusts or equivalent arrangements (hereafter jointly referred to as trusts) that meet certain criteria. Substantially all full-time employees of the Town of Coventry are covered by one of seven separate pension plans, each one of which are discussed below. 1. Municipal Employees Retirement Plan (Town Plan) Plan Description The Town of Coventry contributes to the Town's Municipal Employee Retirement Plan, which is a singleemployer public employee retirement system (PERS). This plan was established by the Town in accordance with the Town Charter and Federal and State Statues. Substantially all employees of the Town, except police, school employees and administrators, and some Town administrators are covered under this defined benefit municipal plan. A 11 me m b e r s of the P 1 an contribute specified percentages of their annual compensation to the plan. As of July 1, 2017, employee membership data related to this plan was as follows: Active Members Inactive Members Retired Members TOTAL continued

106 NOTE 15-PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Municipal Employees Retirement Plan (Town Plan) (continued) Plan Description Under the provisions of the plan, benefits vest after ten years of creditable service. An employee may retire at age 62 with ten years of creditable service for f-un benefits, or at age 55 with ten years of creditable services for reduced benefits. This pension plan also provides disability and death benefits. Benefits begin vesting after four years of service and become fully vested after ten years of service. An employee' s annual pension is determined by multiplying 2% of his average monthly pay by a benefit service rate. The average monthly pay is determined using the five highest consecutive pay years out of the ten latest pay years which give the highest average. The benefit service rate is the sum of the total periods of service. Under the provisions of the plan, a 11 active em p 1 o y e e s are required to contribute 10% of total pay. In addition to pension benefits, this plan also provides disability and death benefits. In order to receive disability benefits an employee must have at least ten years of creditable service when he becomes disabled and the employee must be totally disabled. Monthly disability benefits equal 25% of the employee's average monthly pay. Payments continue for the duration of the disability or until the employee reaches his early or normal retirement date. Death benefits are available to qualified employees. An employee is a qualified if he/she 1) dies before retirement benefits begin, 2) was married for the full year before his death, and 3) if becoming an active member on or after July 1, 1991, has an accmmt, or if becoming an active member prior to July 1, 1991, has a vesting percentage greater than zero. The death benefit equals the survivor's benefit at 50% survivor form and is payable as of the earliest date the employee could have retired on or after the date of death. Summary of Significant Accounting Policies Basis of Accounting The plan's policy is to prepare its fmancial statements on the accrual basis of accounting. Plan member contlibutions are recognized in the period in which the contributions are due. Employer contributions to the plan are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Valuation of Investments Investments are reported at fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. 50 continued

107 NOTE 15 -PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Municipal Employees Retirement Plan (Town Plan) (continued) Plan Description Contributions All Active members are required to contribute 10% of compensation to the plan. Any remaining obligation with respect to the pension plan shall be paid by the employer. The Town makes annual contributions to the plan based on its legally adopted budget. Summary of Significant Accounting Policies Investments The pension plan's policy in regard to the allocation of invested assets is established and may be amended by the MERP Board by a majority vote of its members. It is the policy of the MERP Board to pursue an investment strategy that reduces risk through the prudent diversification of the portfolio across a broad selection of distinct asset classes. The pension plan's investment policy discourages the use of cash equivalents, except for liquidity purposes, and aims to refrain from dramatically shifting asset class allocations over short time spans. The following was the Board's adopted asset allocation policy as of June 30, 2018: Asset Class Domestic equity International equity Fixed income Other Total allocation Target Allocation 34.89% 21.78% 35.83% 7.50% % Rate of return: For the year ended June 30, 2018, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 8.13% The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. The components of the net position liability of the Town of Coventry at June 30, 2018, were as follows: 51 continued

108 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 15 -PENSION PLANS- (continued) 1. Municipal Employees Retirement Plan (Town Plan) (continued) Summary of Significant Accounting Policies Net Pension Liability of the Town Total pension liability Plan fiduciary net position Town's net pension liability June 30, 2018 $ 24,555,490 10,447,416 $ 14,108,074 Plan fiduciary net position as a percentage of the total pension liability 42.55% Summary of Significant Accounting Policies Actuarial Assumptions Summary of Actuarial Assumptions Used in the Valuations to determine the Net Pension Liability at the June 30,2018 measurement date (July 1, 2017 valuation date) Actuarial Cost Method Entry Age Normal - methodology is used. the Individual Entry Age Actuarial Cost Amortization Method Equivalent Single Remaining Amortization Period Level Percent of Payroll- Closed 25 years at July 1, 2017 Actuarial Assumptions Amotized Growth Rate 3.40% Investment Rate of Return 7.00% Projected Salary Increases Based on service with an ultimate rate of 3.40% Inflation 2.70% Mortality RP-2000 Combined Healthy Mortality Table with generational lproiectionper Scale AA. Cost of Living Adjustments None 52 continued

109 NOTE 15- PENSION PLANS (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Municipal Employees Retirement Plan (Town Plan) (continued) Summary of Significant Accounting Policies The long-term expected 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 pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Asset Class Long-Term Expected Real Rate of Return Domestic equity International equity Fixed income Other 5.11% to 6.53% 5.66% to 8.19% 2.69% to 5.70% 2.17% to 4.16% Discount rate: The discount rate used to measure the total pension liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that Town contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan'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 net pension liability to changes in the discount rate: The following presents the net pension liability of the Town, calculated using the discount rate of 7.00%, as well as what the Town's net pension liability would be if it were calculated using a discount rate that is!-percentage-point lower (6.00%) or 1- percentage point higher (8.00%) than the current rate: 7.00% 1% Current 1% Decrease Discount Rate Increase 6.00% 7.00% 8.00% Total pension liability $ 27,421,541 $ 24,555,490 $ 22,055,508 Fiduciary net position 10,447,416 10,447,416 10,447,416 Net position liability $ 16,974,125 $ 14,108,074 $ 11,608, continued

110 NOTE 15-PENSION PLANS (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Municipal Employees Retirement Plan (Town Plan) (continued) Changes in Net Pension Liability Coventry Municipal Plan Total Pension Liability (a) Increase (Decrease) Plan Fiduciary Net Position (b) Net Pension Liability (a)- (b) Balances as of June 30,2017 $ 23,583,082 $ 9,406,576 $14,176,506 Changes for the year: Service cost Interest on total pension 1iability Effect of plan changes Effect of econonic/demographic gains or losses Effect of assumptions changes or inputs Benefit payments Employer contributions Member contributions Net investment income Administrative expenses Net changes 468,760 1,646,935 (76,843) (1,066,444) 972,408 (1,066,444) 845, , ,447 (1,457) 1,040, ,760 1,646,935 (76,843) (845,691) (483,603) (779,447) 1,457 (68,432) Balance as of June 30,2018 $ 24,555,490 $ 10,447,416 $14,108, continued

111 NOTE 15-PENSION PLANS (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Municipal Employees Retirement Plan (Town Plan) (continued) Pension Expense and Deferred Outflow of Resources and Deferred Inflow of Resources Related to the Municipal Employees Retirement Plan For the year ended June 30, 2018 the Town recognized pension expense of $816,152 At June 30, 2018, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Inflows I Outflows: Differences between expected and actual experience Changes of assumptions Net difference between projected and actual earnings Total Town Municipal Plan Deferred Inflows Deferred Outflows ofresources of Resources $ $ (458,861) (74,066) (532,927) $ 62,361 $ 62,361 Amounts reported as deferred outflows and inflows of resources related to the plan will be recognized in pension expense as follows: Year ended Jme 30: Thereafter Net Total Net Deferred Inflows/Outflows of Resources (149,570) (186,616) (112,054) (22,326) (470,566) 55 continued

112 NOTE 15- PENSION PLANS (continued) 2. Town Police Pension Plan Plan Description NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 The Retirement Income Plan for the Police Officers of the Town of Coventry Pension Plan is a single-employer defmed benefit pension plan. The plan is governed by the Town of Coventry which may amend plan provisions, and which is responsible for the management of the assets. As of July 1, 2017 employee membership data related to this plan was as follows: Active members 57 Inactive members 10 Retired members Under the provisions of the plan, benefits vest at various times depending on the date of hire. An employee may retire at age 55 with twenty years of creditable service if employed prior to January 1, 1994 or twentythree years if employed on or after January 1, This plan also provides disability and death benefits. A participant's earned benefit is equal to 50% of earnings. A participant's earning are the compensation received during the preceding twelve month period, including holiday pay, longevity, vacation time and overtime. In addition, participants employed prior to January 1, 1994, may be eligible for a cost-of-living adjustment. In addition to pension benefits, this plan also provides disability and death benefits. In order to receive disability benefits a participant must become disabled in the line of duty and that disability must be expected to last at least two years. In this situation the participant will receive a 66 2/3% disability retirement benefit on the earlier of the date of completion of ten years of service or the date at which the participant reaches his normal retirement date. If the disability is not in the line of duty, but it is expected that the participant will be unable to return to active duty and the participant has ten years of service with the Town of Coventry, the participant will be entitled to a 25% disability benefit for up to one year. If after one year, the participant is still unable to work, the participant will automatically be retired. 56 continued

113 NOTE 15- PENSION PLANS (continued) 2. Police Pension Plan NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 Death benefits are available to qualified employees. If a participant dies before his normal retirement date, his beneficiary will receive a single sum payment of the employee's account, accumulated with interest. If death occurs after the normal retirement date, but before actual retirement, the participants' surviving spouse will receive a monthly benefit equal to the retirement benefit that participant would have received if retired on the date of death. If death occurs after retirement date, a death benefit will be paid to the participant's surviving spouse, dependent child, or beneficiary. Plan Changes For members hired after December 31, 2012: The employee contribution rate is 12% Longevity pay is removed from pensionable compensation. Retirement eligibility is 25 years of Credited Service, but no earlier than age 55. The final average earnings period is the finals years ofbase compensation. The normal benefit equals 50% of the average base pay of the 5 years immediately preceding retirement. For any member who works beyond 25 years, his or her pension benefit shall be increased by 2% for each year worked to a maximum of 60% of the 5-year average base pay. Basis of Accounting The plan's policy is to prepare its fmancial statements on the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to the plan are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Valuation of Investments Investments are reported at fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Contributions Active members hired between January 1, 1994 and December 31, 2012 will continue to contribute 11% of their base pay effective on July 1, 2016 with an increase to 12% effective July 1, 2017 (previously 10% effective on July 1, 20 15). All other employees will contribute 9.5% of their total annual compensation effective on July 1, 2016 with an increase to 11% effective on July 1, 2017 (previously 8% effective on 7/1/2000). 57 continued

114 NOTE 15 -PENSION PLANS (continued) 2. Police Pension Plan Summary of Significant Accounting Policies Investments NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 The pension plan's policy in regard to the allocation of invested assets is established and may be amended by the Police Pension Board by a majority vote of its members. It is the policy of the Police Pension Board to pursue an investment strategy that reduces risk through the prudent diversification of the portfolio across a broad selection of distinct asset classes. The pension plan's investment policy discourages the use of cash equivalents, except for liquidity purposes, and aims to refrain from dramatically shifting asset class allocations over short time spans. The following was the Board's adopted asset allocation policy as of June 30, 2018: Asset C1ass Domestic equity International equity Fixed income Other Total allocation Target Allocation 34.89% 21.78% 35.83% 7.50% % Rate of return: For the year ended June 30, 2018, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 7.68%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. The components of the net position liability of the Police Pension Plan at June 30,2018, were as follows: Net Pension Liability of the Police Pension Plan Total pension liability P1an flduciary net position Town's net pension liability June 30, 2018 $ 80,275,899 15,974,327 $ 64,301,572 P1an flduciary net position as a percentage of the total pension liability 19.90% 58 continued

115 NOTE 15 -PENSION PLANS (continued) 2. Police Pension Plan Actuarial Assumptions NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 Summary of Actuarial Assumptions Used in the Valuations to determine the Net Pension Liability at the June 30,2018 measurement date (July 1, 2017 valuation date) Actuarial Cost Method Amortization Method Equivalent Single Remaining Amortization Period Entry Age Normal - the Individual Entry Age Actuarial Cost methodology is used. Level Percent of Payroll- Closed 21 years at July 1, 2017 Actuarial Assumptions Amotized Growth Rate 3.50% Investment Rate of Return 7.00% Projected Salary Increases Based on service with an ultimate rate of 3.50% Inflation 2.70% Mortality Cost of Living Adjustments RP-2000 Combined Healthy Mortality Table with generational lproiection per Scale AA. For officers retired prior to July 1, 1986; 1.5% compounded, For officers retired after July 1, 1986 (and hired prior to January 1, 1994) 2.50% compounded, For officers hired on or after January 1, 1994, 2. 70% non-compounded 59 continued

116 NOTE 15- PENSION PLANS (continued) 2. Police Pension Plan Summary of Significant Accounting Policies NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 The long-term expected 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 pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation are from our actuary firm Milliman's investment consulting practice as of December 31, Asset Class Long-Term Expected Real Rate of Return Domestic equity International equity Fixed income Other 5.11% to 6.53% 5.66% to 8.19% 2.69% to 5.70% 2.17% to 4.16% Discount rate: The discount rate used to measure the total pension liability was 7.00 percent. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that Town contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan'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 net pension liability to changes in the discount rate: The following presents the net pension liability of the Town, calculated using the discount rate of 7.00%, as well as what the Town's net pension liability would be if it were calculated using a discount rate that is!-percentage-point lower (6.00%) or! percentage point higher (8.00%) than the current rate: 7.00% 1% Current 1% Decrease Discount Rate Increase 6.00% 7.00% 8.00% Total pension liability $ 90,931,322 $ 80,275,899 $ 71,123,269 Fiduciary net position 15,974,327 15,974,327 15,974,327 Net position liability $ 74,956,995 $ 64,301,572 $ 55,148, continued

117 NOTE 15-PENSION PLANS (continued) 2. Police Pension Plan NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 Changes inn et Pension Liability Coventry Police Plan Total Pension Liability (a) Increase (Decrease) Plan Fiduciary Net Position (b) Net Pension Liability (a)- (b) Balances as of July 1, 2017 $ 78,099,606 $ 13,712,629 $64,386,977 Changes for the year: Service cost Interest on total pension liability Effect ofplanchanges Effect of econonic/demographic gains or losses Effect of assumptions changes or inputs Benefit payments Employer contnbutions Member contributions Net investment income Administrative expenses Net changes 924,177 5,391,727 (72,638) (4,066,973) 2,176,293 (4,066,973) 4,808, ,127 1,105,511 (6,043) 2,261, ,177 5,391,727 (72,638) ( 4,808,076) (421,127) (1,105,511) 6,043 (85,405) Balance as of June 30, 2018 $ 80,275,899 $ 15,974,327 $64,301, continued

118 NOTE 15-PENSION PLANS (continued) 2. Police Pension Plan NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 Pension Expense and Deferred Outflow of Resources and Deferred Inflow of Resources Related to the Municipal Employees Retirement Plan For the year ended June 30, 2018 the Town recognized pension expense of $4,932,608. At June 30, 2018, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Inflows I Outflows: Differences between expected and actual experience Changes of assumptions Net difference between projected and actual earning3 Total Town Police Plan Deferred Inflows Deferred Outflows ofresotrrces ofresomces $ $ (522,460) (53,797) (576,257) $ $ 463, , ,507 Amounts reported as deferred outflows and inflows of resources related to the plan will be recognized in pension expense as follows: Year ended June 30: Thereafter Net Total Net Deferred Inflows/Outflows of Resources 31,605 (43,919) (36,740) 82,322 (10,018) 23, continued

119 NOTE 15 -PENSION PLANS (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Coventry Teacher's Alliance School Related Personnel (CTASRP) Pension Plan Plan Description The Coventry Teacher's Alliance School Related Personnel Pension Plan is a single-employer defined benefit pension plan. The plan is governed by the Town of Coventry which may amend plan provisions, and which is responsible for the management of the assets. As of July 1, 2017, employee membership data related to this plan was as follows: Active members 224 Inactive members 26 Retired members Under the provisions of the plan, benefits vest at various times depending on the date of hire. The plan covers school related personnel (non-teaching personnel) who are members of the bargaining unit. Each school employee who is a member of the Union shall be a participant of the plan. Participants contribute 8% of their annual compensation received in a Plan year. The Town makes two types of annual contributions to the plan. The first such amount as is set forth under the relevant terms of the collective bargaining agreement between the Employer and the Union and is equal to 12.75% of the regular payroll of employees subject to the Plan. The second such amount shall be annually determined by an actuary for the Plan. The pension plan is considered to be a single-employer defined benefit pension plan that was administered by an independent board of trustees as of December 31, This plan, originally established in April1977, was most recently restated as of February 11, 2016 by the School Committee of the Town of Coventry and the CTA/SRP Local1075 (the "Union") in accordance with Federal and State Statutes. Under the provisions of the Plan, benefits vest after ten years of creditable service. A participant may retire at age 65 with ten years of creditable service or upon completion of thirty years of creditable service, regardless of age, for full benefits, or age 60 with fifteen years of creditable service for reduced benefits. Benefits fully vest after ten years of service. An employee's annual pension is determined by multiplying a specified percentage to the employee's annual compensation and the number of years of service. In addition to pension benefits, this plan also provides disability and death benefits. A participant is entitled to receive disability benefits determined at the date of disability retirement, in an amount equal to the actuarial equivalent of accrued benefit the employee must be separates from service by reason of total and permanent disability. The condition must have existed for a period of at least three months and must prevent the participant from engaging in substantial gainful activity. Death benefits are available to qualified employees. A participant's beneficiary shall be entitled to death benefits equal to the actuarial equivalent of the participant's accrued benefit, determined as of the date of death. Qualified pre-retirement survivor annuity benefits provide a monthly pension benefit equal to the amount which the spouse would have received if the participant had retired on the day before death and elected a joint and 50% surviving spouse annuity which was the actuarial equivalent of the vested accrued benefit. The Plan does not provide for Cost of Living Adjustments (COLA's). 63 continued

120 NOTE 15- PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Coventry Teacher's Alliance School Related Personnel (CTASRP) Pension Plan Summary of Significant Accounting Policies Basis of Accounting The Plan's policy is to prepare financial statements on the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to the plan are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Valuation of Investments Investments are reported at fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Contributions Active members hired after April1, 1996 will continue to contribute 8.00% of their base pay. Investments The pension plan's policy in regard to the allocation of invested assets is established and may be amended by the Pension Board by a majority vote of its members. It is the policy of the Pension Board to pursue and investment strategy that reduces risk through the prudent diversification of the portfolio across a broad selection of distinct asset classes. The pension plan's investment policy discourages the use of cash equivalents, except for liquidity purposes, and aims to refrain from dramatically shifting asset class allocations over short time spans. The following was the Board's adopted asset allocation policy as of June 30, 2018: June 30, 2018 Target Asset Class Asset Allocation Allocation Large Cap Equity 55.59% 26.80% Mid Cap Equity 3.49% 5.00% Small Cap Equity 1.10% 4.50% Developed International Equity 11.66% 17.00% Emerging International Equity 1.00% 8.00% Real Estate/MLPs 0.00% 7.50% Private Equity 1.27% 1.20% Intermediate Fixed Income 15.68% 20.00% High Yield Fixed Income 0.00% 6.00% Emerging Market Bonds 0.00% 2.00% Cash Equivalents 10.21% 2.00% Total allocation % % 64 continued

121 NOTE 15-PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Coventry Teacher's Alliance School Related Personnel (CTASRP) Pension Plan Rate of Return: For the year ended June 30, 2018, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 6. 71%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. The components of the net position liability of the Coventry Teachers Alliance Pension Plan at June 30, 2018, were as follows: Net Pension Liability of the Coventry Teachers Alliance School Related Personnel Pension Plan Total pension liability Plan fiduciary net position Town's net pension liability June 30, 2018 $ 30,972,783 (13,242,408) $ 17,730,375 Plan fiduciary net position as a percentage of the total pension liability 42.75% Summary of Actuarial Assumptions Used in the Valuations to determine the Net Pension Liability at the June 30,2018 measurement date (July 1, 2017 valuation date) Actuarial Cost Method Amortization Method Equivalent Single Remaining Amortization Period Entry Age Normal - the Individual Entry Age Actuarial Cost methodology is used. Level Percent of Payroll- Closed 23 years at July 1, 2017 Actuarial Assumptions Amotized Growth Rate 4.00% Investment Rate of Return 6.50% Projected Salary Increases Based on service with an ultimate rate of 4.0% Inflation 3.00% Mortality RP-2014 B1ue Collar Healthy Annuitant with Scale MP-2018 Generational Improvements from 2006 (Male/Female) Cost of Living Adjustments None 65 continued

122 NOTE 15-PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Coventry Teacher's Alliance School Related Personnel (CTASRP) Pension Plan Summary of Significant Accounting Policies The long-term expected rate of return on pension plan investments was determined using a building-block method in which the best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation are from our actuary firm's investment manager. Asset Class Long-Term Expected Real Rate of Return Large Cap Equity Mid Cap Equity Small Cap Equity Developed International Equity Emerging International Equity Real Estate/MLP s Private Equity Intermediate Fixed Income High Yield Fixed Income Emerging Market Bonds Cash Equivalents Total allocation 6.50% 7.10% 7.60% 8.60% 10.80% 7.70% 9.10% 3.70% 6.00% 5.70% 2.30% Projcted rate of return 6.71% Discount Rate: The discount rate used to measure the total pension liability was 6.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that Town contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan'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. 66 continued

123 NOTE 15-PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Coventry Teacher's Alliance School Related Personnel {CTASRP) Pension Plan Sensitivity of the net pension liability to changes in the discount rate: The following presents the net position liability of the Town, calculated using the discount rate of 6.50%, as well as what the Town's net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (5.50%) or 1- percentage point higher (7.50%) than the current rate. 1% Decrease 5.50% Current Discount Rate 6.50% 1% Increase 7.50% Net pension liability $ 21,019,236 $ 17,730,375 $ 14,922,594 Changes inn et Pension Liability Coventry Teacher's Alliance School Related Personnel Pension Plan Total Pension Liability (a) Increase (Decrease) Plan Fiduciary Net Position (b) Net Pension Liability (a)- (b) Balances as of July 1, 2017 $ 28,486,826 $ 12,462,740 $16,024,086 Changes for the year: Service cost Interest on total pension liability Difference between expected and actual experience Changes in assmnptions Benefit payments Employer contributions Member contributions Net investment income Administrative expenses Net changes 330,922 1,938, ,100 1,385,191 (2,084, 118) 2,485,957 (2,084,118) 1,218, ,905 1,226,407 (90,462) 779, ,922 1,938, ,100 1,385,191 (1,218,936) (508,905) (1,226,407) 90,462 1,706,289 Balance as of June 30, 2018 $ 30,972,783 $ 13,242,408 $17,730, continued

124 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 15-PENSION PLANS- (continued) 3. Coventry Teacher's Alliance School Related Personnel (CTASRP) Pension Plan Pension Expense and Deferred Outflow of Resources and Deferred Inflow of Resources Related to the Coventry Teacher's Alliance School Related Personnel Pension Plan For the year ended June 30, 2018 the Town recognized pension expense of $1,069,566. At June 30, 2018, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Inflows I Outflows: D:i:f:furences between expected and actual experience Changes of assumptions Net difference between projected and actual earnings Total School Resource Personnel Plan Deferred Inflows Deferred Outflows ofresmrrces of Resources $ $ (751,231) $ (751,231) $ 805,802 1,199,683 2,005,485 Amounts reported as deferred outflows and inflows of resources related to the plan will be recognized in pension expense as follows: Year ended June 30: Thereafter Net Total Net Deferred Inflows/Outflows of Resources 84,293 84,293 84, , ,761 1,254, continued

125 NOTE 15- PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Employee's Retirement System of the State of Rhode Island (ERS) General Information about the Pension Plan Plan description- Certain employees of the Coventry School Department participate in a cost-sharing multipleemployer defmed benefit pension plan - the Employees' Retirement System plan - administered by the Employees' Retirement System of the State of Rhode Island (System). Under a cost-sharing plan, pension obligations for employees of all employers are pooled and plan assets are available to pay the benefits of the employees of any participating employer providing pension benefits through the plan, regardless of the status of the employers' payment of its pension obligation to the plan. The plan provides retirement and disability benefits and death benefits to plan members and beneficiaries. The System issues a publicly available financial report that includes financial statements and required supplementary information for the plans. The report may be obtained at Benefit provisions-the level of benefits provided to participants is established by Chapter of the General Laws, which is subject to amendment by the General Assembly. Member benefit provisions vary based on service credits accumulated at dates specified in various amendments to the General Laws outlining minimum retirement age, benefit accrual rates and maximum benefit provisions. In general, members accumulate service credits for each year of service subject to maximum benefit accruals of 80% or 75%. For those hired after June 30, 2012, the benefit accrual rate is 1% per year with a maximum benefit accrual of 40%. Members eligible to retire at September 30, 2009 may retire with 10 years of service at age 60 or after 28 years of service at any age. The retirement eligibility age increases proportionately for other members reflecting years of service and other factors until it aligns with the Social Security Normal Retirement Age, which applies to any member with less than 5 years of service as of July 1, Members are vested after 5 years of service. The plan provides for survivor's benefits for service connected death and certain lump sum death benefits. Joint and survivor benefit provision options are available to members. Cost of living adjustments are provided but are currently suspended until the collective plans administered by ERSRI reach a funded status of 80%. Until the plans reach an 80% funded status, interim cost of living adjustments are provided at four-year intervals commencing with the plan year ending June 30, continued

126 NOTE 15- PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Employee's Retirement System of the State of Rhode Island (ERS) The plan also provides nonservice-connected disability benefits after five years of service and serviceconnected disability benefits with no minimum service requirement. Contributions- The funding policy, as set forth in the General Laws, Section , provides for actuarially determined periodic contributions to the plan. For fiscal 2017, Coventry School Department teachers were required to contribute 3.75% of their annual covered salary except for teachers with twenty or more years of service as of June 30, 2012 must contribute 11% of their annual covered salary. The state and the Coventry School Department are required to contribute at an actuarially determined rate, 40% of which is to be paid by the state and the remaining 60% is to be paid by Coventry School Department; the rates were 9.89% and 13.24% of annual covered payroll for the fiscal year ended June 30, 2018 for the state and Coventry School Department, respectively. The Coventry School Department contributed $4,760,634, $4,948,791 and $5,039,744 for the fiscal years ended June 30, 2018, 2017 and 2016, respectively, equal to 100% of the required contributions for each year. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources At June 30,2018, the Coventry School Department reported a liability of$65,443,544 for its proportionate share of the net pension liability that reflected a reduction for contributions made by the state. The amount recognized by the Coventry School Department as its proportionate share of the net pension liability, the related state support and the total portion of the net pension liability that was associated with the Coventry School Department were as follows: Coventry School Dept's proportionate share of the net pension liability $ 65,443,544 State's proportionate share of the net pension liability associated with the Coventry School Dept. Total net pension liability 49,459,596 $ 114,903,140 The net pension liability was measured as of June 30, 2017, the measurement date, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2016 rolled forward to June 30, The Coventry School Department's proportion of the net pension liability was based on a projection of the Coventry School Department's long-term share of contributions to the pension plan relative to the projected contributions of all participating employers and the state, actuarially determined. At June 30,2017 the Coventry School Department proportion was %. 70 continued

127 NOTE 15-PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Employee's Retirement System of the State of Rhode Island (ERS) Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources For the year ended June 30, 2018 the Coventry School Department recognized gross pension expense of $9,872,802 and revenue of$4,582, 770 for support provided by the State. At June 30, 2018 the Coventry School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Schedule of Deferred In:Dows & Out:Dows Deferred out:dows ofresources: Net difference between projected and actual investment earnings $ 5,063,681 Changes in proportion and difference between employer contributions and proportionate share of contributions 135,071 Changes in assumptions 5,715,551 Contributions made subsequent to the measurement date Total 4,760,634 $ 15,674,937 Deferred in:dows ofresources: Difference between expected and actual experience $ 1,551,512 Changes in assumptions 1,031,288 Changes in proportion and difference between employer contributions and proportionate share of contributions 3,219,833 Net difference between projected and actual earnings on pension plan investments Total 3,410,533 $ 9,213, continued

128 NOTE 15-PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Employee's Retirement System of the State of Rhode Island (ERS) $4,760,634reported as deferred outflows of resources related to pensions resulting from the Coventry School Department's contributions in fiscal year 2018 subsequent to the measurement date will be recognized as a reduction of the net pension liability for the year ended June 30, Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: thereafter $ 135,724 1,225, ,908 (731,407) 178, ,554 $1,701,137 Actuarial Assumptions - the total pension liability was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.50% Salary increases 3.0% to 13.50% Investment rate of return 7.0% Mortality- variants of the RP-2014 mortality tables- for the improvement scale, update to the ultimate rates of the MP-2016 projection scale. The actuarial assumptions used in the June 30, 2016 valuation rolled forward to June 30, 2017 and the calculation of the total pension liability at June 30, 2016 were consistent with the results of an actuarial experience study performed as of June 30, The long-term expected rate of return best-estimate on pension plan investments was determined by the actuary using a building-block method. The actuary started by calculating best-estimate future expected real rates of return (expected returns net of pension plan investment expense and inflation) for each major asset class, based on a collective summary of capital market expectations from 35 sources. The June 30, 2016 expected arithmetic returns over the long-term (20 years) by asset class are summarized in the following table: 72 continued

129 NOTE 15- PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Employee's Retirement System of the State of Rhode Island (ERS) ~~ ti""s~ lo.m% 6.15% ~tioml~ed:eq\uv u.~a> 6.7!% =~~~~ S.SOOA>!.91% Prinlt. Gnm6 Private EqUty U.3~A> 9.62% Non-Conn :2.2~-" 5.11% OW Privata Cncit l.sooa> 9.62% Jacome Him11eld~ 1.01>% 4.26% um 1.000h 5.17% Liquid Credit l.s:o% 4.:26% Private Credit 3.20% 4.:26% cmw~an.n Tneasut'Y Duntion: 4.000A CU3% Syates:IU\tie Ttmd 4.000A> 3.8!% ~PI'Citwtmn Core Raat Estate 3.M% 5.11% Ptivild:a hui:aatn:jc:tt.mt 240% 5.51% me l. OA> 1.12% N~R.Olml&S l.oooa 3.WA vutmty~ EGf'adbome ll.~a> 2.1::.?;0.4 Absolute Rstu«:n 6.50% 3.lU% Cash 3.00% <U3% These return assumptions are then weighted by the target asset allocation percentage, factoring in correlation effects, to develop the overall long-term expected rate of return best-estimate on an arithmetic basis. Discount rate- the discount rate used to measure the total pension liability was 7.0 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rate and that contributions from the employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the pension plan'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. 73 continued

130 NOTE 15-PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Employee's Retirement System of the State of Rhode Island (ERS) Sensitivity of the net pension liability (asset) to changes in the discount rate - the following presents the net pension liability (asset) calculated using the discount rate of7.0 percent as well as what the net pension liability (asset) would be if it were calculated using a discount rate that is!-percentage-point lower or!-percentagepoint higher than the current rate % Decrease (6.0%) $ 82,246,898 Current Discount Rate (7.0%) $ 65,443,544 $ 1. 00% Increase (8.0%) 52,927,719 Pension plan fiduciary net position- detailed information about the pension plan's fiduciary net position is available in the separately issued ERSRI financial report. 5. Defined Benefit Pension Plan (Survivors Benefit) Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pension, and pension expense, information about the fiduciary net position of the Teachers' Survivors Benefit plan (TSB) and the additions to/deductions from TSB fiduciary net position have been determined on the same basis as they are reported by TSB. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Plan description -Certain employees of the Coventry School Department participate in a cost-sharing multipleemployer defmed benefit pension plan - the Teachers' Survivors Benefit plan - administered by the Employees' Retirement System of the State of Rhode Island (System). Under a cost-sharing plan, pension obligations for employees of all employers are pooled and plan assets are available to pay the benefits of the employees of any participating employer providing pension benefits through the plan, regardless of the status of the employers' payment of its pension obligation to the plan. The plan provides a survivor benefit to public school teachers in lieu of Social Security since not all school districts participate in Social Security. The System issues a publicly available financial report that includes financial statements and required supplementary information for the plans. The report may be obtained at / 74 continued

131 NOTE 15-PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Defined Benefit Pension Plan (Survivors Benefit) Eligibility and plan benefits - the plan provides a survivor benefit to public school teachers in lieu of Social Security since not all school districts participate in the plan. Specific eligibility criteria and the amount of the benefit is subject to the provisions of Chapter of the Rhode Island General Laws which are subject to amendment by the General Assembly. Spouse, parents, family and children's benefits are payable following the death of a member. A spouse shall be entitled to benefits upon attaining the age of sixty (60) years. Children's benefits are payable to the child, including a stepchild or adopted child of a deceased member if the child is unmarried and under the age of eighteen (18) years or twenty-three (23) years and a full time student, and was dependent upon the member at the time of the member's death. Family benefits are provided if at the time of the member's death the surviving spouse has in his or her care a child of the deceased member entitled to child benefits. Parents benefits are payable to the parent or parents of a deceased member if the member did not leave a widow, widower, or child who could ever qualify for monthly benefits on the member's wages and the parent has reached the age of 60 years, has not remarried, and received support from the member. In January, a yearly cost-of-living adjustment for spouse's benefits is paid and based on the annual social security adjustment. Survivors are eligible for benefits if the member has made contributions for at least six months prior to death or retirement. The TSB plan provides benefits based on the highest salary at the time of retirement of the teacher. Benefits are payable in accordance with the following table: Highest Annual Salary Basic Monthly Spouses' Benefit $17,000 or less $ 750 $17,001 to $25,000 $ 875 $25,000 to $33,000 $ 1,000 $33,001 to $40,000 $ 1,125 $40,001 and over $ 1,250 Benefits payable to children and families are equal to the spousal benefit multiplied by the percentage below: Parent and 1 Parent and 2 or Two children Three or more Dependent child more children One child alone alone children alone parent 150% 175% 75% 150% 175% 100% 75 continued

132 NOTE 15- PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Defined Benefit Pension Plan (Survivors Benefit) Contributions - The contribution requirements of active employees and the participating school districts were established under Chapter of the Rhode Island General Laws, which may be amended by the General Assembly. The cost of the benefits provided by the plan are two percent (2%) of the member's annual salary up to but not exceeding an annual salary of $9,600; one-half (1/2) of the cost is contributed by the member by deductions from his or her salary, and the other half (1/2) is contributed and paid by the respective school district by which the member is employed. These contributions are in addition to the contributions required for regular pension benefits. The Coventry School Department contributed $53,687, $42,948 and $45,534 for the fiscal years ended June 30, 2018, 2017 and 2016, respectively, equal to 100% of the required contributions for each year. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources At June 30, 2018 the Coventry School Department reported an asset of $6,023,168 for its proportionate share of the net pension asset related to its participation in TSB. The net pension asset was measured as of June 30, 2017, the measurement date, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of June 30, The Coventry School Department's proportion of the net pension asset was based on its share of contributions to the TSB for fiscal year 2016 relative to the total contributions of all participating employers for that fiscal year. At June 30, 2017 the Coventry School Department's proportion was %. For the year ended June 30, 2018 the Coventry School Department recognized pension expense of $1,247,234 -a decrease in the net pension asset. At June 30, 2018 the Coventry School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: 76 continued

133 NOTE 15- PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Defined Benefit Pension Plan (Survivors Benefit) Deferred Outflows of resources Difference between expected and actual experience Net difference between projected and actual investment earnings Changes in proportion and differences between employer contributions and proportionate share of contributions Changes in assumptions Contributions subsequent to the measurement date Total Deferred inflows ofresources Net difference between projected and actual investment earnings Changes in proportion and differences between employer contnbutions and proportionate share of contributions Difference between projected and actual experience Total 1,188,716 1,384, , ,264 53,687 3,891, , ,757 1,265,700 2,462,414 $53,687 reported as deferred outflows of resources related to pensions resulting from the Coventry School Department's contributions in fiscal year 2018 subsequent to the measurement date will be recognized as an addition to the net pension asset for the year ended June 30, Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: Thereafter 226, , ,803 (10,845) 165, ,845 1,375, continued

134 NOTE 15 -PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Defined Benefit Pension Plan (Survivors Benefit) Actuarial Assumptions - the total pension liability was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.55% Salary increases 3.0% to 13.50% Investment rate of return 7.0% Mortality- variants of the RP-2014 mortality tables- for the improvement scale, update to the ultimate rates of the MP-2016 projection scale. Cost of living adjustment - eligible survivors receive a yearly cost of living adjustment based on the annual social security adjustment- for valuation purposes, a 2.75% cost ofliving adjustment is assumed. The actuarial assumptions used in the June 30, 2016 valuation and the calculation of the total pension liability at June 30,2017 were consistent with the results of an actuarial experience study performed as ofjune 30,2016. The long-term expected rate of return best-estimate on pension plan investments was determined by the actuary using a building-block method. The actuary started by calculating best-estimate future expected real rates of return (expected returns net of pension plan investment expense and inflation) for each major asset class, based on collective summary of capital market expectations from 35 sources. The June 30, 2017 expected arithmetic returns over the long-term (20 years) by asset class are summarized in the following table: 78 continued

135 NOTE 15 -PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Defined Benefit Pension Plan (Survivors Benefit) Global Equity us mtamacional D~tVa1<W>l!d!qutv ""'" "~5""* 1\~;!t$ Pdvata Grtlri Private N on.cora.re OPPPci,. ate Credit m~»ma Him Yield mua.strue.ture: ru::m CtOOit Pt+vate: Cre:di.t. Crisis F':l <:>tedion (l.'las T:rea~Wf'Y :il.. lration InhrionPft>tecrion Core Real &tate Pciveta Wal!tru::tufe TIPs Natural Res our<:ea Volatility Protection!G Fixed b:omt~~ Abaol.ute Rerum Cub 20.~% 15.9{)% 3.5\1'11. H30% 2~20''~ L50% 1.00% LOO% ::uo% 3.:20'% 4J)()''?l. 4.00% :UO% :2.40% 1.00% LOO% U50% &.5\1' ?. fl US% Ul~~ $.91% %. 5.1'7% 9.1$:2'% 4.215~ \) 5J7% 4..2"% 4..26% '% 3.3.1% 5.!7% 5.57~ L7:2% 3.98~:.; :uz% 3.Sl% 0.$3% These return assumptions are then weighted by the target asset allocation percentage, factoring in correlation effects, to develop the overall long-term expected rate of return best-estimate on an arithmetic basis. Discount rate- the discount rate used to measure the total pension liability was 7.0 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rate and that contributions from the employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the pension plan'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. 79 continued

136 NOTE 15 -PENSION PLANS- (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, Defined Benefit Pension Plan (Survivors Benefit) Sensitivity of the net pension liability (asset) to changes in the discount rate - the following presents the net pension liability (asset) calculated using the discount rate of7.0 percent as well as what the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower or!-percentagepoint higher than the current rate. 1.00% Decrease Current Discount 1.00% Increase (6.0%) Rate (7.0%) (8.0%) $ ( 4,119,678) $ (6,023,168) $ (7,440,267) Pension plan fiduciary net position- detailed information about the pension plan's fiduciary net position is available in the separately issued ERSRl financial report. 6. School Administration Pension Plan The Town of Coventry contributes to the School Administration Pension Plan. This plan is a defined contribution plan that covers certain school administrators who do not qualify for other school pension plans. The plan was established by the Town in accordance with the Town Charter and Federal and State Statues. The Town makes contributions to this plan based on the Town's contribution requirements for the Certified School Employees Pension Plan. In addition, participants may contribute a percentage of their annual salary to the plan based on applicable tax law. Under the provisions of the plan, benefits vest in the Town's contributions after three years of creditable service. This pension plan also provides disability and death benefits. As of June 30, 2018 employee membership data related to this plan was as follows: Required Contributions: Active members lq Total 10 Fiscal Yr Ended June 30, Required Pension Cost 73,225 69,234 67,797 Percentage Contributed 100% 100% 100% 80 continued

137 NOTE 15-PENSION PLANS- (continued) 7. Defined Contribution Plan NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 A. State of Rhode Island Defined Contribution Retirement Plan Employees participating in the defined benefit plan with less than 20 years of service as of June 30, 2012, as described above, also participate in a defmed contribution plan authorized by General Law Chapter The defined contribution plan is established under IRS section 401(a) and is administered by TIAA-CREF. Employees may choose among various investment options available to plan participants. Employees contribute 5% of their annual covered salary and employers contribute between 1% and 1.5% of annual covered salary depending on the employee's total years of service as of June 30, Employee contributions are immediately vested while employer contributions and any investment earnings thereon are vested after three years of contributory service. Benefit terms and contributions required under the plan by both the employee and employer are established by the General Laws, which are subject to amendment by the General Assembly. Amounts in the defmed contribution plan are available to participants in accordance with Internal Revenue Service guidelines for such plans. The Coventry School Department recognized pension expense of $824,863 for the fiscal year ended June 30, ERSmembers ERS- Teachers- contribute to Social Security -less than 20 years of service at 7/1/2012 ERS- Teachers- do not contribute to Social Security - less than 20 years of service at 7/ EE contribution 8 2 ER contribution 1% to 1.5% depending on years of service 3% to 3.5% depending on xears of service ERS - Teachers - more than 20 years of service at 7/1/2012 NO DC plan contributions (ee and er) after July 1, 2015 The System issues a publicly available fmancial report that includes fmancial statements and required supplementary information for plans administered by the system. The report may be obtained at 81 continued

138 NOTE 15- PENSION PLANS- (continued) 8. Defined Contribution Plan B. Local Defined Contribution Plan Plan Description NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 ill fiscal year 2014, the Town created a new defmed contribution plan for employees hired after July 1, The Plan, which is a single-employer public employees defined contribution plan, was established by the Town Council in accordance with the Town charter and Federal and State statutes. Under the provisions of the Plan, all employees hired on or after July 1, 2013 are able to participate in a defined contribution plan in which the Town will match employee contributions, up to 10% of an employee's annual base wage, the terms of which shall be negotiated by the parties. Employee contributions are 100% vested from day one of employment. As of June 30, 2018 employee membership data related to this plan was as follows: Active members 20 Required Contributions: Fiscal Yr Ended June 30, Annual Required Pension Cost 84,072 63,002 49,088 Percentage Contributed 100% 100% 100% 82 continued

139 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 16- OTHER POST EMPLOYMENT BENEFITS Plan Description and Eligibility In addition to the pension benefits described above, the Town provides post-employment health care benefits in accordance with Town union contracts. These benefits are for continued full family or individual health care for the employee groups as described below. Retiree medical coverage is only to age 65, while dental continues post-65. Town Hall Employees Members of this group are eligible to receive medical and dental benefits for themselves and their spouse at the earlier of age 62 or age 55 with 10 years of service. The cost of benefits is 100% retiree-paid. Membership as ofjuly 1, 2017 Police Employees Active members- 101 Retired members - 1 Spouses of retirees - 0 Total 102 Members of this group are eligible to receive medical and dental benefits for themselves and their spouse at the earlier of: 1. Schedule A (hired prior to ): 20 years of service 2. Schedule B (hired after 111/1994 but prior to January 1, 2013): 23 years of service 3. Schedule C (hired after 111/2013): age 55 with 25 years of service The cost of benefits is 100% retiree-paid. Membership as of July 1, 2017 Active members- 66 Retired members - 10 Spouses of retirees - ]_ Total continued

140 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 16- OTHER POST EMPLOYMENT BENEFITS (continued) School Teachers and Administrators Members of this group who have retired under the Employees' Retirement System of Rhode Island, with a minimum of 15 years of service with the Coventry School District are eligible to receive medical and dental benefits for themselves and their spouse at the earlier of: 1. Schedule A (vested prior to 7 /1/05) a. 28 years of service b. Age 60 with 10 years of service 2. Schedule B (vested after 711/05) a. Age 65 with 10 years of service b. Age 59 with 29 years of service The cost of benefits is as follows: 1. Pre-65: The District pays an annual health premium not to exceed $1,200 for members and their spouses from their date of retirement through age Post-65: The District pays an annual health premium not to exceed $1,000 for members and their spouses. Balance of premium is 100% retiree paid. Membership as of July 1, 2017 School Others Active members- 476 Retired members Spouses of retirees- 175 Total 923 Members who have retired from the Coventry School District shall be eligible to receive medical and dental benefits for themselves and their spouse at the earlier of 30 years of service or age 58 with 10 years of service. The cost of benefits for other school employees is limited. For a period of six years following the member's retirement date, the School District pays an annual health premium not to exceed $1,200. There are no OPEB benefits beyond the initial six years after retirement. Membership as of July 1, 2017 Funding Policy Active members- 235 Retired members - 28 Spouses of retirees - _Q Total 263 The Town pays for the other post-employment benefits on a pay-as-you-go basis. The annual medical & dental benefits premium cost for fiscal year ended June 30, 2018 was $222,278 for Town employees and $271,208 for School employees. 84 continued

141 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 16- OTHER POST EMPLOYMENT BENEFITS (continued) Net OPEB Liability of the Town The components of the net OPEB liability of the Town at June 30, 2018, were as follows: Total OPEB liability Plan fiduciary net position Town's net OPEB liability $ $ 17,107,002 17,107,002 Plan fiduciary net position as a percentage of the total OPEB liability 0.00% Actuarial assumptions: The total OPEB liability was determined by an actuarial valuation as of June 30, 2018, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Summary of Actuarial Assumptions Used in the Valuations to determine the Net OPEB Liability at the June 30, 2018 measurement date (July 1, 2017 valuation rolled forward to June 30, 2018) Actuarial Cost Method Entry Age Normal - the Individual Entry Age Actuarial Cost methodology is used. Actuarial Assumptions Inflation Rate 2.70% Discount rate Projected Salary Increases 3.58% 20 year Tax Exempt Municipal Bond Rate Graded by service Health Care Cost Trend Rates 5.48% % over 75 years Participation Rate Mortality 20% of Police and Town, 25% of School Others, and 70% of School Teachers are assumed to elect coverage upon retirement. 30% of School Teachers are assumed to purchase health insurance elsewhere and receive the Town stipend. RP-2000 Combined Healthy Table for males and females with generational projection per Scale AA. Discount Rate The discount rate used to measure the total OPEB liability was 3.58%. The projection of cash flows used to determine the discount assumed that plan member contributions will be made at the current contribution rate and that Town contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the plans 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 investments was applied to all periods of projected benefit payments to determine the total OPEB liability. 85 continued

142 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 16- OTHER POST EMPLOYMENT BENEFITS (continued) Changes in Net Ope b Liability Increase (Decrease) Plan Fiduciary Total OPEB Liability (a) Net Position (b} Balances as of June 30, 2017 $ 17,577,645 $ Changes for the Year Service Cost 352,175 Interest on the total OPEB liability 625,753 Changes in benefits Difference between expected and actual experience Changes in assrunptions (539,174) Employer contributions Net investment income Benefit payments, including employee refimds (909,397) Administrative expense Other changes Net changes (470,643) Balances as of June 30, 2018 $ 17,107,002 $ NetOPEB Liability (a) - {b} $ 17,577, , ,753 (539,174) (909,397) (470,643) $ 17,107,002 Sensitivity of the OPEB liability to changes in the discount rate: The following presents the net OPEB liability of the Town, calculated using the discount rate of 3.87%, as well as what the Town's net OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (2.87%) or 1 percentage point higher (4.87%) than the current discount rate. 1.00% Decrease Current Discount 1. 00% Increase (2.87%) Rate (3.87%) (4.87%) $ 19,087,280 $ 17,107,002 $ 15,437, continued

143 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 16- OTHER POST EMPLOYMENT BENEFITS (continued) Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates: The following presents the net OPEB liability of the Town, calculated using the trend rate of 5.50% per year graded down by the getzen model to an ultimate rate of 3.84% per year, as well as what the Town's net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1 percentage point lower or 1 percentage point higher than the current healthcare trend rates. 1% Decrease Current HCCTR 1% Increase $ 16,236,389 $ 17,107,002 $ 18,140,126 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30,2018, the Town recognized OPEB expense of$916,658. At June 30,2018, the Town reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Deferred Outflows ofresources Inflows ofresources Difference between expected and actual experience Changes of assumptions $ $ (477,904) Total $ $ (477,904) Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in pension expense as follows: OPEB Plan Net Deferred Year Ending (outflows)/inflow June 30 s of resources 2019 $ (61,270) 2020 (61,270) 2021 (61,270) 2022 (61,270) 2023 (61,270) Thereafter (171,554) Total $ (477,904) 87 continued

144 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 NOTE 17- RISK MANAGEMENT The Town of Coventry is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; injuries to employees; and natural disasters. As a result, the Town participates in a non-profit, public entity risk pool (Rhode Island Inter-local Risk Management Trust, Inc.) that provides coverage for property/liability claims and workers' compensation claims. Upon joining the Trust, the Town signed a participation agreement that outlines the rights and responsibilities of both the Trust and the Town. The agreement states that for premiums paid by the Town, the Trust will assume fmancial responsibility for the Town's losses up to the maximum amount of insurance purchased, minus the Town's deductible amounts. The policy is not retrospectively rated, but rather, premiums are based on the ultimate cost of the groups experience to date. The pool is allowed to make additional assessments for claims that are reasonably possible and estimable. The Trust provides this insurance coverage through a pooled, self-insurance mechanism, which includes reinsurance purchased by the Trust to protect against large, catastrophic claims above the losses the Trust, retains internally for payment from the pooled contributions of its Members. Under the participation agreement, the Town is insured for a maximum of $5,000,000 per occurrence. Settled claims resulting from these risks have not exceeded the Trust coverage in any of the past three fiscal years. And it is not anticipated that the risks will exceed the trust coverage in the current year. There were no reductions in the insurance coverage during the fiscal year up and through the report date. The town insures the entire risk arising from employee related health issues through the purchase of standard health insurance policies for all employees. Policy costs are charged in full to insurance expense in the general, special revenue and enterprise funds on a monthly basis. There are no retrospective adjustments to the monthly premiums charged to the town. The carrier, in advance of the new policy year and to account for the town's historical costs, adjusts the premiums annually. Self-insurance: The School Department participates in a multi-employer cost reimbursement healthcare self-insurance risk pool managed by WB Community Health (WBCH) which is presented as an Internal Service Fund in the Proprietary Funds ofthe Towns financial statements. The School Department pays WBCH monthly premiums based upon "working rates" that are periodically adjusted to reflect changes in actual costs. Funds on deposit with WBCH are made available to pay claims, claim reserves and administrative costs. As of June 30, 2018, the reported expenditures exceeded premiums on deposit by $86,546 which resulted in a balance of $1,778,566 in the net adjusted reserve. Liabilities of the fund are reported when it is probable that a loss has occurred and the amount ofthe loss can be reasonably estimated. Liabilities include an amount for IBNR claims. The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, including retroactive assessments for hospital costs and other settlements occurring after the end of the fiscal year and not determinable at the end of the fiscal year. An excess coverage insurance policy covers individual claims exceeding $125, continued

145 NOTE 17- RISK MANAGEMENT (continued) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 Changes in the deposit balance for fiscal year 2018 is as follows: Year ended June 30, 2018 Beginning cumulative surplus (deficit) Premium deposits Incurred claims (excluding IBNR) Administrative fees $ 1,350,351 8,865,405 (8,901,269) (44,730) Ending cash deposit balance Change in IBNR (three month estimate) Run out reserve balance Net adjusted reserve 1;269,757 5, ,361 $ 1,778,566 NOTE 18- SUBSEQUENT EVENT Management has evaluated subsequent events through February 14, 2019 the date the fmancial statements were available to be issued. 89 continued

146 NOTE 19- PRIOR PERIOD RESTATEMENT Basic Financial statements NOTES TO FINANCIAL STATEMENTS JUNE 30, 2018 The following restatements were recorded to the beginning of net position of the governmental activities as a result of implementation of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The Town also adjusted for other various liabilities and deposits the required restatement of prior period balances for the General Fund and for a new Proprietary Internal Service Fund. Beginning net position- Governmental Activities $ (132,254,495) Restatement for: Reversal of net OPEB obligation per GASB 45 Record net OPEB liability at July I, 2017 per GASB 75 Prior years reserve for abatement WB Community Health Deposit Restatement of School Department Total Pension Liability Total adjustment to net position: Beginning net position- Restated as of7/l/2017 3,970,559 (17,577,645) 222,709 1,865,112 1,647,726 (9,871,539) $ (142,126,034) Beginning net position- Internal Service Fund WB Community Health Deposit Beginning net position- Restated as of7/1/2017 1,865,112 $ $ 1,865,112 Beginning fund balance- General Fund Prior years reserve for abatement Beginning fund balance - Restated as of 7/1/ ,709 $ 11,355,759 $ 11,578, concluded

147 REQUIRED SUPPLEMENTARY INFORMATION

148 REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule-General Fund Schedule of Revenues and Expenditures (Budgetary Basis and Actual) For the Fiscal Year Ended June 30, 2018 Original Revised Budgeted Budget Actual Revenues: General property taxes $ 72,289,103 $ 72,289,103 $ 71,652,257 Other taxes 1,005,380 1,005,380 1,005,987 Intergovernmental revenue 1,700,418 1,700,418 2,358,888 Licenses, fees and permits 787, , ,512 Fines and interest on late payments 550, , ,167 Interest on investments 112, , ,181 Other revenue 919, , ,120 Total revenues 77,363,581 77,363,581 77,133,112 Expenditures: Legislative, judicial and general administrative 1,575,223 1,575,223 1,554,641 Financial administrative 770, , ,828 Public safety 12,955,428 12,955,428 12,492,114 Public works 5,610,127 5,674,814 5,366,489 Parks & Recreation 2,159,008 2,159,008 2,073,608 Human resources 822, , ,354 Planning & Development 338, , ,227 General government 3,739,925 3,739,925 3,792,297 Debt service: Principal payments 3,745,000 3,745,000 3,745,000 Interest and fiscal charges 1,412,861 1,412,861 1,412,861 Total expenditures 33,129,131 33,129,131 32,224,419 Excess/(deficiency) of revenues over expenditures 44,234,450 44,234,450 44,908,693 Variance $ (636,846) ,470 1,832 (92,833) 39,181 (200,880) (230,469) 20,582 24, , ,325 85,400 58,168 (3,611) (52,372) 904, ,243 Other financing sources/(uses): Transfers (to) other funds (10,000) (10,000) (10,000) School appropriation ( 44,224,450) { 44,224,450) (44,224,450) Total other financing sources ( 44,234,450) (44,234,450) (44,234,450) Excess/( deficiency) of revenues and other f"mancing sources over expenditures and other financing uses $ $ $ 674,243 $ 674,243 91

149 REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule - General Fund Schedule of Revenues -Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2018 Original Revised Budget Budget Actual Revenues Revenues Revenues General property taxes Real Estate Taxes - Current $ 62,699,878 $ 62,699,878 $ 62,468,317 Real Estate Taxes - Prior 486, , ,101 Real Estate Taxes - Debt Service - School 1,444,077 1,444,077 1,444,077 Real Estate Taxes -Debt Service- Town 2,395,167 2,395,167 2,395,167 Motor Vehicle Excise Tax 5,263,981 5,263,981 4,938,595 Total general property taxes 72,289,103 72,289,103 71,652,257 Other Taxes Telephone Tax 450, , ,558 Hotel Tax 116, , ,496 Meal and Beverage Tax 438, , ,933 Total other taxes 1,005,380 1,005,380 1,005,987 Intergovernmental Revenue State Aid School Housing 1,313,729 1,313,729 1,313,730 State Motor Vehicle Phase out 696,676 Payment in Lieu of Taxes 106, ,898 62,238 State Aid to Libraries 35,000 35,000 35,000 State Reimbursement Auto Tax 244, , ,244 Total Intergovernmental Revenue 1,700,418 1,700,418 2,358,888 Licenses and Permits Building Permits 135, , ,026 Plumbing and Heating 23,000 23,000 25,653 Electrical Permits 21,000 21,000 25,045 Recording Fees 330, , ,398 Probate Fees 53,000 53,000 54,340 Marriage Licenses 1,400 1,400 1,256 Dog Licenses 16,355 16,355 10,174 Animal Rescue Fees 9,400 9,400 6,421 Realty Fees 40,000 40,000 40,000 Alcoholic Beverage Licenses 21,300 21,300 21,023 Hunting and Fishing Licenses Library Fees 22,000 22,000 17,780 Planning Commission Fees 8,200 8,200 10,120 Planning Commission Steno Fees 4,000 4,000 4,137 Miscellaneous Fees 103, , ,137 Total Licenses and Permits 787, , ,512 Variance $ (231,561) (79,899) (325,386) (636,846) (26,932) 15,186 12, ,676 (44,660) 6, ,470 8,026 2,653 4,045 (2,602) 1,340 (144) (6,181) (2,979) (277) (23) (4,220) 1, ,832 (continued) 92

150 REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule - General Fund Schedule of Revenues- Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2018 (continued) Original Revised Budget Budget Actual Revenues Revenues Revenues Fines and Interest on Late Payments Interest and Penalties 550, , ,167 Total Fines and Interest on Late Payments 550, , ,167 Interest on Investments Interest Earnings 112, , ,181 Total Interest on Investments 112, , ,181 Other Revenue Police Car Rental 150, , ,881 Municipal Court 78,000 78,000 87,422 Westwood Reimbursement 8,000 8,000 9,876 Land Trust Fees 350, , ,312 Miscellaneous Receipts 333, , ,629 Total Other Revenue 919, , ,120 Total Town Revenue $ 77,363,581 $ 77,363,581 $ 77,133,112 Variance (92,833) (92,833) 39,181 39,181 (42,119) 9,422 1,876 21,312 (191,371) (200,880) $ (230,469) (concluded) 93

151 REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule - General Fund Schedule of Expenditures- Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2018 Original Revised Budgeted Budgeted Actual Expenditures Expenditures Expenditures Variance Legislative, Judicial and General Administrative Town Council $ 26,398 $ 26,398 $ 28,432 Town Manager 211, , ,749 Citizens Advisory Committee 1,077 1, Human Relations 85,347 85,347 76,083 Information Technology 333, , ,893 Town Clerk 327, , ,790 Town Solicitor 440, , ,043 Board of Canvassers 84,388 84,388 59,885 Probate Court 17,972 17,972 15,238 Municipal Court 47,648 47,648 46,492 Total Legislative, Judicial and General Administrative 1,575,223 1,575,223 1,554,641 Financial Administration Treasurer 342, , ,879 Board of Assessment Review 3,219 3,219 3,014 Tax Assessor 179, , ,043 Tax Collector 245, , ,892 Total Financial Administration 770, , ,828 Public Safety Police 12,664,711 12,662,550 12,209,467 Animal Control 231, , ,452 Emergency Management 27,580 27,580 21,022 Town Sergeant 2,358 2,358 2,311 Crossing Guards 29,670 29,670 28,862 Total Public Safety 12,955,428 12,955,428 12,492,114 Public Works Engineering 154, , ,190 Inspection and Permits 230, , ,258 Roads and Bridges 2,169,857 2,119,064 1,872,126 Snow Removal 311, , ,880 Building Maintenance 491, , ,512 Refuse Collection 859, , ,407 Refuse Disposal 518, , ,244 Vehicle Maintenance 874, , ,872 Total Public Works 5,610,127 5,674,814 5,366,489 $ (2,034) 11,460 1,041 9,264 4,999 14,502 (47,043) 24,503 2,734 1,156 20,582 20, (1,471) 5,339 24, ,083 2,818 6, ,314 15,543 16, ,938 (1,285) 15,345 19,874 (12,877) 7, ,325 (continued) 94

152 REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule - General Fund Schedule of Expenditures- Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30,2018 Continued Original Revised Budgeted Budgeted Actual Expenditures Expenditures Expenditures Human Resources Human Services 822, , ,354 Total Human Resources 822, , ,354 Parks and Recreation Public Libraries 993, , ,799 Recreation 1,165,518 1,165,518 1,087,809 Total Parks and Recreation 2,159,008 2,159,008 2,073,608 Planning and Development Planning Commission 289, , ,060 Planning Department 17,380 17,880 17,339 Zoning Board 10,363 15,863 15,671 Conservation Commission 2,760 2,760 1,090 Land Trust Commission 7,365 7,365 1,594 Economic Development 2,000 Historic District Commission 7,615 1, Coventry Housing Authority 4,069 4,069 2,971 Total Planning and Development 338, , ,227 General Government Town General 3,739,925 3,739,925 3,792,297 Total General Government 3,739,925 3,739,925 3,792,297 Variance 58,168 58,168 7,691 77,709 85,400 (11,996) ,670 5,771 (2,000) 1,113 1,098 (3,611) (52,372) (52,372) Debt Service Principal 3,745,000 3,745,000 3,745,000 Interest 1,412,861 1,412,861 1,412,861 Total Debt Service 5,157,861 5,157,861 5,157,861 Other Financing Uses Transfers to School Unrestricted 44,224,450 44,224,450 44,224,450 Transfers to Other Funds 10,000 10,000 10,000 Total Other Uses 44,234,450 44,234,450 44,234,450 Total Expenditures and Other Financing Uses $ 77,363,581 $ 77,363,581 $ 76,458,869 $ 904,712 (concluded) 95

153 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues and Expenditures Budget (Budgetary Basis) and Actual Special Revenue Funds - School Unrestricted For the Fiscal Year Ended June 30, 2018 Original Final Budget Budget Revenues State Aid $ 23,202,975 $ 23,202,975 Federal Aid 745, ,210 Charges for Service 762, ,000 Miscellaneous 7,500 7,500 Total revenues 24,717,685 24,717,685 Expenditures Salaries 44,139,500 44,139,500 Employee benefits 15,183,869 15,183,869 Purchased services 7,124,128 7,124,128 Supplies and materials 2,114,800 2,114,800 Capital outlay 474, ,000 Other 52,027 52,027 Total expenditures 69,088,324 69,088,324 Excess of revenues over (under) expenditures before other financing sources (44,370,639) (44,370,639) Other f"mancing sources (uses) Operating transfers - Town appropriation 44,224,450 44,224,450 Transfer from Cell Tower Fund 70,000 70,000 Transfer in from Restricted Funds - - Transfer out to Restricted Funds - - Budgeted use of Fund Balance 76,189 76,189 Total other f"mancing sources/(uses) 44,370,639 44,370,639 Excess (deficiency) of revenue and other sources over expenditures and other uses $ - $ - Actual Variance $ 23,189,487 $ (13,488) 844,273 99, , ,549 2,368 (5,132) 24,924, ,992 43,646, ,790 15,196,376 (12,507) 7,279,618 (155,490) 2,015,598 99, ,020 (95,020) 39,417 12,610 68,746,739 (341,585) (43,822,062) 548,577 44,224,450 70,000 21,306 21,306 (92,391) (92,391) 76,189 44,299~_54 (71,085) $ 477,492 $ 477,492 96

154 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2018 The accompanying Statement of Revenues, Expenditures I Expenses (GAAP or Budgetary Basis Non-GAAP) presents comparisons of the legally adopted budget with actual data on a budgetary basis. Because accounting principals applied for purposes of developing data on a budgetary basis differ significantly from those used to present financial statements in conformity with GAAP, a reconciliation of resultant basis, entity and timing differences in the excess (deficiency) of revenues and other financial resources over expenditure I expenses and other uses of financial resources for the year ended June 30, 2018 is presented below: General School Fund Umestricted Excess (deficiency) of revenues and other sources over (under) expenditures and other uses (budgetary basis) $ 674,243 $ 477,492 Excess of revenues and other sources over expenditures and other uses of funds classified with the General Fund for purposes of GASB Statement No ,227 81,446 Use of accumulated fund balance surplus (76,189) Excess (deficiency) of revenues and other sources over (under) expenditures and other uses (GAAP basis) $ 1,100,470 $ 482,749 97

155 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2018 Schedule of Changes in Net Pension Liability and Related Ratios Coventry Municipal Employees' Retirement Plan (in l,ooos) Fiscal Year Ending June 30, Total Pension Liability Service Cost $ 469 $ 482 $ 519 $ 546 $ 539 N/A N/A N/A N/A N/A Interest on Total Pension Liability 1,647 1,591 1,511 1,477 1,402 N/A N/A N/A N/A N/A Effect of Economic/Demographic Gains or Loses (78) (264) (509) (248) N/A N/A N/A N/A N/A Effect of Assumption Changes or Inputs - (191) N/A N/A N/A N/A N/A Benefit Payments (1,066) (912) (803) (690) (695) N/A N/A N/A N/A N/A Net Change in Total Pension Liability ,085 1,246 N/A N/A N/A N/A N/A Total Pension Liability, beginning 23,583 22,686 22,159 21,074 19,828 N/A N/A N/A N/A N/A Total Pension Liability, ending (a) $ 24,555 $ 23,583 $ 22,686 $ 22,159 $ 21,074 N/A N/A N/A N/A N/A Fiduciary Net Position Employer Contributions $ 846 $ 836 $ 864 $ 829 $ 1,080 N/A N/A N/A N/A N/A Member Contributions N/A N/A N/A N/A N/A Investment fucome Net offuvestment Expenses N/A N/A N/A N/A N/A Benefit Expenses (1,066) (912) (803) (690) (695) N/A N/A N/A N/A N/A Administrative Expenses (1) (I) (1) (1) (1) N/A N/A N/A N/A N/A Net Change in Fiduciary net Position 1,041 1, ,502 N/A N/A N/A N/A N/A Fiduciary Net Position, beginning 9,407 8,201 7,544 6,905 5,403 N/A N/A N/A N/A N/A Fiduciary net Position, ending (b) $ 10,448 $ 9,407 $ 8,201 $ 7,544 $ 6,905 N/A N/A N/A N/A N/A Net Pension Liability, ending= (a)- (b) 14,107 14,176 14,485 14,615 14,169 N/A N/A N/A N/A N/A Fiduciary Net Position as a% of Total Pension Liability 42.55% 39.89% 36.15% 34.D4% 32.77% N/A N/A N/A N/A N/A Covered Payroll $ 4,850 $ 5,239 $ 5,412 $ 5,382 $ 5,469 N/A N/A N/A N/A N/A Net Pension Liability as a % of Covered Payroll 290.9% 270.6% 267.6% 271.6% 259.1% N/A N/A N/A N/A N/A Notes: 1.) This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. 98

156 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2018 Schedule of Town Contributions Last 10 Fiscal Years Coventry Municipal Employees Retirement Plan Fiscal Year Ending June 30, Actuarially determined contribution Contributions in relation to the actuarially determined contribution Contribution deficiency/( excess) Covered payroll per employee Contributions as a percentage of coveredemployee payroll $ 845,691 $ 821,825 $ 852,707 $ 841,584 $ 991,124 1,068, , , , ,250 1,080, ,054 (13,916) (11,586) 12,334 (88,953) 295,134 4,850,270 5,239,342 5,412,437 5,382,148 5,469,059 5,289, % 15.95% 15.97% 15.41% 19.75% 14.62% 986, , , , , , , , ,558 5,486,026 5,275,025 N/A 10.19% 8.39% N/A 806, , ,558 5,191, % Notes: 1.) This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. Schedule of Investment Returns Last 10 Fiscal Years Coventry Municipal Employees Retirement Plan Fiscal Year Ending June 30, Annual money-weighted rate of return, net of investment expense 8.13% 9.42% 1.04% 0.77% 11.76% N/A N/A N/A N/A N/A Notes: 1.) The money-weighted rate of return considers the changing amounts actually invested during a period and weights the amount of pension plan investments by the proportion of time they are available to earn a return during that period. 2.) This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. 99

157 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2018 Schedule of Changes in Net Pension Liability and Related Ratios Coventry Police Officers' Retirement Plan (in l,ooos) Fiscal Year Ending June 30, Total Pension Liability Service Cost $ 924 $ 903 $ 812 $ 918 $ 903 N/A N!A N/A N!A N!A Interest on Total Pension Liability 5,392 5,195 5,050 4,944 4,844 N/A N/A N!A N/A NIA Effect ofplan Changes (1) (12) N!A N/A N/A N!A N/A Effect of Economic/Demographic Gains or Loses (73) 696 (379) (938) - N/A N/A N/A N/A NIA Effect of Assumption Changes or Inputs (111) N/A N!A N!A N/A N/A Benefit Payments (4,067) (3,932) (3,842) (3,495) (3,437) N/A N/A N/A N/A N/A Net Change in Total Pension Liability 2,176 2,861 1,530 1,429 2,298 N!A N!A N/A N!A N!A Total Pension Liability, beginning 78,100 75,239 73,709 72,280 69,982 N/A N/A N/A N/A NIA Total Pension Liability, ending (a) $ 80,276 $ 78,100 $ 75,239 $ 73,709 $ 72,280 N/A N!A N!A N/A N/A Fiduciary Net Position Employer Contributions $ 4,808 $ 4,716 $ 4,620 $ 4,152 $ 4,564 N!A N/A N/A N/A N/A Member Contributions N!A N/A N/A N/A N/A Investment Income Net of Investment Expenses 1,106 1, N/A N/A N/A N!A N!A Benefit Expenses (4,067) (3,932) (3,842) (3,495) (3,437) N/A N!A N!A N/A N/A Administrative Expenses (6) (6) (6) (6) (6) N/A N/A NIA NIA NIA Net Change in Fiduciary net Position 2,262 2,275 1, ,211 N/A N/A N!A N/A N/A Fiduciary Net Position, beginning 13,713 11,438 10,178 9,190 6,979 N/A N/A N!A N/A NIA Fiduciary net Position, ending (b) $ 15,975 $ 13,713 $ 11,438 $ 10,178 $ 9,190 NIA N/A N/A N/A N/A Net Pension Liability, ending= (a)- (b) $ 64,301 $ 64,387 $ 63,801 $ 63,531 $ 63,090 N/A N/A N/A N/A N/A Fiduciary Net Position as a% of Total Pension Liability 19.90% 17.56% 15.20% 13.81% 12.71% N!A N/A N/A N/A N!A Covered Payroll $ 3,523 $ 3,077 $ 3,145 $ 3,047 $ 3,125 N/A N/A N/A N/A N/A Net Pension Liability as a% of Covered Payroll % % % % % N/A N/A N/A N!A N/A Notes: 1.) This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. 100

158 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2018 Schedule of Town Contributions Last 10 Fiscal Years Coventry Police Officers Retirement Plan Fiscal Year Ending June 30, ActuariaiJy detennined contribution Contributions in relation to the actuarially determined contribution Contribution deficiency/(excess) Covered payroll per employee Contributions as a percentage of coveredemployee payroll $ 4,808,076 $ 4,656,200 $ 4,565,873 $ 4,495,252 $ 4,481,020 4,784,708 4,808,076 4,715,528 4,619,691 4,148,062 4,563,733 3,260,756 (59,328) (53,818) 347,190 (82,713) 1,523,952 3,523,041 3,076,771 3,144,906 3,047,317 3,124,718 3,246, % % % % % % ,530,006 3,278,626 3,084,953 3,084,953 2,274,733 2,274,733 2,274,733 2,274,733 1,255,273 1,003, , ,220 3,513,681 3,378,540 N/A 3,598, % 67.33% N/A 63.21% Notes: I.) This schedule is presented to illustrate the requirement to show information for I 0 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. Schedule of Investment Returns Last 10 Fiscal Years Coventry Police Officers Retirement Plan Fiscal Year Ending June 30, Annual money-weighted rate of return, net of investment expense 7.68% 9.12% 1.15% 0.52% 10.81% N/A N/A NIA N/A N/A Notes: 1.) The money-weighted rate of return considers the changing amounts actually invested during a period and weights the amount of pension plan investments by the proportion of time they are available to earn a return during that period. 2.) This schedule is presented to illustrate the requirement to show infonnation for I 0 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. 101

159 NOTES TO REQIDRED SUPPLEMENTARY INFORMATION JUNE 30, 2018 Schedule of Town Contributions Last 1 0 Fiscal Years State of Rhode Island Employees Retirement System Fiscal Year Ending June 30, Actuarially determined contribution Contributions in relation to the actuarially determined contribution Contribution deficiency/( excess) Covered employee payroll Contributions as a percentage of coveredemployee payroll $ 4,760,634 $ 4,851,664 $ 4,943,999 $ 4,610,827 4,760,634 4,851,664 4,943,999 4,610,827 35,956,339 35,843,399 35,677,230 32,958, % 13.54% 13.86% 13.99% N/A N/A NIA N/A N/A N/A Notes: 1.) The amounts presented for each fiscal year were determined as of June 30 measurement date prior to the fiscal year-end. 2.) This schedule is intended to show information for 10 years- additional years will be displayed as they become available. Schedule of Coventry's Proportionate Share of Net Pension Liability Last 1 0 Fiscal Years State of Rhode Island Employees Retirement System Fiscal Year Ending June 30, Coventry proportion of the net pension liability % % % % N/A N/A N/A N/A NIA N/A Coventry proportionate share of the net pension liability $ 65,443,544 $ 65,393,587 $ 60,158,353 $ 53,951,207 N/A N/A N/A N/A N/A N/A State's proportionate share of the net pension liability associated with the school district 49, ,785,005 41,098,299 36,996,828 N/A N/A Total: $114,903,140 $110,178,592 $101,256,652 $ 90,948,035 N/A N/A N/A N/A NIA N/A NIA N/A N/A N/A Coventry covered payroll 35,956,339 35,843,399 35,677,230 32,958,819 N/A N/A N/A N/A N/A N/A Coventry proportionate share of the net pension liability as a percentage of it's covered employee payroll % % % % N/A N/A N/A N/A N/A N/A Plan fiduciary net position as a % of the total pension liability 54.0% 54.06% 57.55% 61.40% N/A N/A NIA N/A NIA N/A Notes: 1.) Employers participating in the State Employee's Retirement System are required by Rl General Laws, Section , to contribute an actuarially determined contribution rate each year. 2.) This schedule is intended to show information for 10 years- additional years will be displayed as they become available. 102

160 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2018 Schedule of Town of Coventry's Contributions Teachers' Survivor Benefit Plan Last 10 Fiscal Years Fiscal Year Ending June 30, Statutorily determined contribution Contributions in relation to the actuarially determined contribution Contribution deficiency/( excess) Covered employee payroll Contributions as a percentage of coveredemployee payroll $ 53,687 $ 42,948 $ 45,534 $ 33,821 53,687 42,948 45,534 33,821 35,956,339 35,843,399 35,677,230 32,958, % 0.12% 0.13% N/A N/A N/A N/A N/A N/A N/A Notes: 1.) The amounts presented for each fiscal year were determined as of June 30 measurement date prior to the fiscal year-end. 2.) This schedule is intended to show information for 10 years- additional years will be displayed as they become available. Schedule of Coventry's Proportionate Share of Net Pension Liability (Asset) Teachers' Survivor Benefit Plan Last 10 Fiscal Years Fiscal Year Ending June 30, Coventry proportion of the net pension asset % % % % N/A N/A Coventry proportionate share of the net pension asset 6,023,168 7,059,124 6,794,407 9,223,335 N/A N/A Coventry covered payroll 35,956,339 35,843,399 35,677,230 32,958,819 N/A N/A Coventry proportionate share of the net pension liability as a percentage of it's covered employee payroll 16.75% 19.69% 19.04% 27.98% N/A N/A Plan fiduciary net position as a % of the total pension liability 136.1% 153.3% 146.6% 173.3% N/A N/A NIA N/A N/A N/A NIA NIA NIA N/A N/A N/A N/A N/A N/A N/A N/A N/A NIA N/A N/A N/A Notes: 1.) Employers participating in the Teachers' Survivor's Benefit Plan contribute at a rate established by the Rl General Laws, Section ) This schedule is intended to show information for 10 years- additional years will be displayed as they become available. 103

161 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2018 Schedule of Changes in Net Pension Liability and Related Ratios Coventry School Employees' Retirement Plan Fiscal Year Ending June 30, Total Pension Liability Service Cost Interest on Total Pension Liability Differences between expected and actual experience Effect of Assumption Changes or Inputs Benefit Payments Net Change in Total Pension Liability Total Pension Liability, beginning Total Pension Liability, ending (a) $ 330,922 $ 309,273 NIA N/A N/A N/A 1,938,862 1,905,251 N/A N/A N/A N/A 915,100 18,495 N/A N/A N/A N/A 1,385,191 N/A N/A NIA NIA (2,084,118) (1,756,434) NIA NIA NIA NIA 2,485, ,585 NIA N/A NIA N/A 28,486,826 28,010,241 NIA NIA N!A N/A $ 30,972,783 $ 28,486,826 NIA NIA NIA N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N!A N/A N/A N/A N/A NIA N/A N!A NIA NIA NIA NIA NIA NIA N/A N/A N/A NIA N!A NIA NIA NIA Fiduciary Net Position Employer Contributions Member Contributions Net Investment Income Benefit Expenses Administrative Expenses Net Change in Fiduciary net Position Fiduciary Net Position, beginning Fiduciary net Position, ending (b) $ 1,218,936 $ 1,157,788 NIA NIA NIA N!A 508, ,321 NIA N/A NIA NIA 1,226,407 1,546,143 NIA N/A NIA NIA (2,084, 118) (1,756,434) NIA N/A NIA NIA (90,462) (149,427) NIA NIA NIA NIA 779,668 1,261,391 NIA N/A N!A NIA 12,462,740 11,201,349 NIA NIA N!A NIA $ 13,242,408 $ 12,462,740 NIA NIA NIA NIA NIA NIA NIA NIA NIA N/A NIA NIA NIA N/A NIA NIA N/A N/A N/A NIA N/A N/A NIA NIA NIA NIA NIA NIA NIA NIA NIA NIA NIA NIA NIA NIA Net Pension Liability, ending= (a)- (b) 17,730,375 16,024,086 N/A NIA NIA NIA N/A N/A N/A N!A Fiduciary Net Position as a% of Total Pension Liability 42.75% 43.75% NIA NIA NIA NIA NIA N/A N/A N!A Covered Payroll $ 5,625,341 $ 5,249,633 NIA NIA NIA NIA NIA NIA NIA NIA Net Pension Liability as a% of Covered Payroll 315.2% 305.2% NIA N!A N/A NIA NIA NIA N!A N!A Notes: 1.) This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the current GASB standards, they should not be reported. 104

162 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2018 Schedule of Town Contributions Last 10 Fiscal Years Coventry School Employees Retirement Plan Fiscal Year Ending June 30, Actuarially determined contribution Contributions in relation to tbe actuarially determined contribution Contribution deficiency/( excess) Covered employee payroll Contributions as a percentage of coveredemployee payroll $ $ 1,339,244 $ 1,264,236 N/A N/A N/A N/A TBD 1,218,936 N/A N/A N/A N/A 45,300 N/A N/A N/A N/A 5,625,341 $ 5,249,633 N/A N/A N/A N/A TBD 23.22% N/A N/A NfA NfA N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A NfA N/A N/A N/A N/A N/A NfA Notes: 1.) This schedule is presented to illustrate tbe requirement to show information for 10 years. However, recalculations of prior years are uot required, and if prior years are not reported in accordance witb the current GASB standards, tbey should not be reported. Schedule of Investment Returns Last 10 Fiscal Years Coventry School Employees Retirement Plan Fiscal Year Ending June 30, Annual money-weighted rate of return, net of investment expense 10.16% 14.13% N/A N/A N/A N/A N/A N/A N/A N/A Notes: 1.) The money-weighted rate of return considers the changing amounts actually invested during a period and weights the amount of pension plan investments by tbe proportion of time tbey are available to earn a return during that period. 2.) This schedule is presented to illustrate tbe requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance witb the current GASB standards, tbey should not be reported. 105

163 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2018 Town of Coventry, Rhode Island Schedule of Changes in the Town of Coventry's Net OPEB Liability and Related Ratios Last 10 Fiscal Years Fiscal Year Ending June 30, A. Total OPEB liability 1. Service Cost 2. Interest on the Total OPEB Liability 3. Changes of benefrt terms 4. Difference between expected and actual experience of the Total OPEB Liability 5. Changes of assumptions 6. Benefit payments, including refunds of employee contributions 7. Net change in total OPEB liability 8. Total OPEB liability- beginning 9. Total OPEB liability- ending (a) 2018 $ 352, ,753 (539,174) (909,397) (470,643) $ 17,107,002 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ B. Plan fiduciary net position 1. Contributions - employer 2. Contributions- employee 3. Net investment income 4. Benefrt payments, including refunds of employee contributions 5. OPEB Plan Administrative Expense 6. Other 7. Net change in plan fiduciary net position 8. Plan fiduciary net position - beginning 9. Plan fiduciary net position- ending (b) C. Net OPEB liability - ending (a) - (b) D. Plan fiduciary net position as a percentage of the total OPEB liability E. Covered employee payroll F. Net OPEB liability as a percentage of covered payroll $ $ 17,107, % N/A 0.00% $ $ $ $ $ $ $ $ $ Notes: 1.) This schedule is intended to show information for 10 years - additional years will be displayed as they become available. 106

164 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2018 Schedule of Plan Contributions Last 10 Fiscal Years Coventry OPEB Plan Fiscal Year Ending June 30, Actuarially determined contribution Contributions in relation to the actuarially determined contribution Contribution deficiency/( excess) Covered payroll per employee Contributions as a percentage of coveredemployee payroll ** $ $ $ $ - $ $ $ $ $ Notes: 1.) This schedule is intended to show information for 10 years - additional years will be displayed as they become available. The town does not pre-fund benefits. The current funding policy is to pay benefits directly from general assets on a pay as you go basis. Schedule of Investment Returns Last 10 Fiscal Years Coventry OPEB Plan Fiscal Year Ending June 30, Annual money-weighted rate of return, net of investment expense N/A NIA N/A NIA NIA NIA NIA N/A NIA NIA The money-weighted rate of return considers the changing amounts actually invested during a period and weights the amount of OPEB plan investments by the proportion of time they are available to earn a return during that period. 107

165 SUPPLEMENTARY INFORMATION

166 SUPPLEMENTARY INFORMATION Combining Balance Sheet- Non-Major Governmental Funds June 30, 2018 ASSETS Cash Intergovernmental receivables Due from other funds Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable Due to other funds Accrued salaries Unearned revenue Total liabilities Fund balances (deficits) Restricted for: Educational programs Public safety programs Culture and recreation Health & human services Committed for: Public works programs Culture and recreation Unassigned Fund balances (deficits) Total liabilities and fund balances Special Revenue Special Revenue School School Restricted Restricted Food Improvement Town School Service Capital Fund $ 1,180,462 $ 82,239 $ 162,876 $ 81, ,868 54, , ,354 9, ,800 $ 1,997,853 $ 1,302,461 $ 227,132 $ 284,800 $ 12,404 $ 56,243 $ 638,541 $ 521, , , , , ,237 1,134, , , , ,158 42, , , ,250 - (365,460) (91,286) (411,409) - 1,275, ,763 (411,409) $ 1,997,853 $ 1,302,461 $ 227,132 $ 284,800 Town Capital Improvement Funds Totals $ 5,657,875 $ 7,083,452 1,096, ,587 2,106,467 $ 6,474,462 $ 10,286,708 $ 58,056 $ 765, ,866 2,275, , , ,922 3,457,198 19, , ,158 42, ,185 6,156,718 6,278, ,250 (378,6692 (1,246,824) 5,797,540 6,829,510 $ 6,474,462 $ 10,286,

167 SUPPLEMENTARY INFORMATION Combining Statement of Revenues, Expenditures and Changes in Fund Balance- Non-Major Governmental Funds For the fiscal year ended June 30, 2018 Special Revenue Special Revenue School School Town Capital Restricted Restricted Food Improvement Improvement Town School Service Capital Fund Funds Totals REVENUES Intergovernmental $ 931,726 $ 2,523,808 $ 727,846 $ - $ 285,213 $ 4,468,593 Charges for service 375, ,385 1,075,397 Investment income 1,867 70,028 71,895 Contributions and private grants 24, ,091 Other 169,515 14, ,858 Total Revenues 1,502,211 2,538,151 1,428, ,241 5,823,834 EXPENDITURES Executive and administration 49, ,064 Public safety 219, ,487 Public works 107,137-5,071,601 5,178,738 Community and economic development 76,984-76,984 Health and human services 691, ,345 Culture & recreation 8, ,977 Education 2,829,067 1,543,174 57,375 4,429,616 Capital expenditures 130,485-1, ,851 Total Expenditures 1,283,479 2,829,067 1,543,174 57,375 5,072,967 10,786,062 Excess of revenues over (under) Expenditures 218,732 (290,916) (114,943) (57,375) (4,717,726) (4,962,228) Other Financing Sources (uses) Operating transfers in 10,000 7, , ,254 Operating transfers out (85,326) (21,306) - (146,649) (253,281) Issuance of debt ,567 54,567 Total other financing sources (75,326) (14,270) - 145,136 55,540 Excess of revenues and other sources over (under) expenditures and other uses 143,406 (305,186) (114,943) (57,375) ( 4,572,590) (4,906,688) FUND BALANCE- July 1, ,132, ,949 (296,466) 57,375 10,370,130 11,736,198 FUND BALANCE -June 30, 2018 $ 1,275,616 $ 167,763 $ (411,409) $ - $ 5,797,540 $ 6,829,

168 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Balance Sheet June 30, RIRRC Composting Grant 210 Friends of Human Services 211 Project Friends Legislative 246 Anthony Bramley Grant Mapleroot Village Grant Police Cemetery ASSETS Cash Intergovernmental receivables Due from other funds Total assets $ $ - $ - $ - $ - $ - $ - $ 4, ,147 3,239 4,100 - $ 4,000 $ 128,147 $ - $ 3,239 $ - $ 4,100 LIABILITIES AND FUND BALANCES Liabilities Due to other funds ljnearnedrevenue Accounts payable Total liabilities Fund balances (deficits) Restricted for: Public safety programs Culture and recreation Health and human services Committed for: Public works programs Culture and recreation Unassigned Total fund balances (deficits) Total liabilities and fund balances $ $ 1,610 $ - $ - $ 18,882 $ - $ - $ 1,610 18,882 4, ,147 (1,610) (18,882) (1,610) 4, ,147 (18,882) 3,239 4,100 - $ 4,000 $ 128,147 $ - $ 3,239 $ - $ 4,100 3,239 4,100 (continued) 110

169 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Balance Sheet June 30, Document Preservation Coventry Drug Seizure Fund Teen Center Operations Byrne Grant Resource Sharing 63 Isle of Capri Emergency Management ASSETS Cash Intergovernmental receivables Due from other funds Total assets $ - $ 802 $ 802 $ 180,106 $ 180,106 $ - $ 5,826 5,826 $ - $ 15,205 15,205 $ - $ - $ 25,000 2,114 2,114 $ - $ 25,000 LIABILITIES AND FUND BALANCES Liabilities Due to other funds Unearned revenue Accounts payable Total liabilities $ - $ 9,181 $ 188, ,181 - $ 9,575 $ 6,210 15,785 - $ 4,320 $ 24,677 2, ,653 4,320 25,000 Fund balances (deficits) Restricted for: Public safety programs Culture and recreation Health and human services Committed for: Public works programs Culture and recreation Unassigned Total fund balances (deficits) Total liabilities and fund balances $ 802 $ 5,826 (17,075) (580) _(539) _{4,320) (17,075) 5,826 (580) (539) (4,320) 180,106 $ 5,826 $ 15,205 $ 2,114 $ - $ 25,000 (continued) 111

170 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Balance Sheet June 30, Oaks RIEMA RIEMA RIEMA RIEMA Coventry Legislative Offsite Maple Valley Industrial Hannnet Johnson Blvd Emergency Grant Resurfacing & Franklin Drive Road Dra.inage Management Raptakis ASSETS Cash Intergovernmental receivables Due from other funds Total assets $ $ - $ 115, ,482 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 10,571 10,571 $ 3 3 LIABILITIES AND FUND BALANCES Liabilities Due to other funds Unearned revenue Accounts payable Total liabilities $ - $ 18,296 $ 7,990 $ 18,296 7,990 6,462 $ 6,462 24,577 $ 24,577 10,868 $ 10,868 Fund balances (deficits) Restricted for: Public safety programs Culture and recreation Health and human services Committed for: Public works programs Culture and recreation Unassigned Total fund balances (deficits) Total liabilities and fund balances $ 115, , ,482 $ (18,296) (7,990) (6,462) (24,577) (297) (18,296) (7,990) (6,462) (24,577) (297) - $ - $ - $ - $ 10,571 $ (continued) 112

171 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Balance Sheet Jnne 30, National Grid ArnoldRd DUI/Speed Health& Bulletproof Click it Wellness Vests or Ticket US Fish& Laurel Ave/ DEA&US Wildlife Anthony Mill Marshals Sandy Acre River ASSETS Cash $ - $ Intergovernmental receivables Due from other funds 174,293 Total assets $ 174,293 $ - $ - $ - 1,351 7,115 1,783-1,783 $ 1,351 $ 7,115 $ - $ - $ 861 9,508 3,997 $ 861 $ 9,508 3,997 LIABILITIES AND FUND BALANCES Liabilities Due to other funds $ - $ Unearned revenue Accounts payable Total liabilities - $ 1,351 $ 6,825 1,351 6,825 $ - $ Fund balances (deficits) Restricted for: Public safety programs 174,293 Culture and recreation Health and human services Committed for: Public works programs Culture and recreation Unassigned Total fund balances (deficits) 174,293 Total liabilities and fund balances $ 174,293 $ ,783 1, ,783 $ 1,351 $ 7, ,997 9, ,508 3,997 $ 861 $ 9,508 $ 3,997 (continued) 113

172 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Balance Sheet June 30, Federal Energy Grant I 322 MEDS Grant 109 Recycling Grant 326 Federal Energy Grant2 327 Federal Energy Grant3 332 Tropical Storm Irene Dual-Electric Charging Station ASSETS Cash futergovernmental receivables Due from other funds Total assets $ $ - $ 1,885 1,885 $ - $ 31,499 31,499 $ - $ $ - $ - $ - $ - $ 49,682 11,730 49,682 $ 11,730 $ 2,648 2,648 LIABILITIES AND FUND BALANCES Liabilities Due to other funds Unearned revenue Accounts payable Total liabilities $ - $ - $ - $ 13,088 $ 13,088 - $ - $ Fund balances (deficits) Restricted for: Public safety programs Culture and recreation Health and human services Committed for: Public works programs Culture and recreation Unassigned Total fund balances (deficits) Total liabilities and fund balances $ 1,885 1,885 1,885 $ 31, , ,499 $ 212 $ - $ 49,682 11,730 49,682 11,730 49,682 $ 11,730 $ 2,648 2,648 2,648 (continued) 114

173 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Balance Sheet June 30, RIDOT Read 336 Leap Road Storm Schoolhouse Hurricane Resurfacing Juno Renovations Sandy 337 Blizzard Nemo 400 Food Bank 238 RIEMA Police Awards ASSETS Cash Intergovernmental receivables Due from other funds Total assets $ $ - $ - $ - $ - $ 6,461 - $ - $ - $ 6,461 $ - $ - $ - $ 44,386 44,386 $ 2,495 2,495 LIABILITIES AND FUND BALANCES Liabilities Due to other funds ljnearnedrevenue Accounts payable Total liabilities $ 197,267 $ 6,810 $ 23,948 $ - $ 2, ,267 6,810 26,404 21,263 $ 21, $ 2,495 2,495 Fund balances (deficits) Restricted for: Public safety programs Culture and recreation Health and human services Committed for: Public works programs Culture and recreation Unassigned Total fund balances (deficits) Total liabilities and fund balances $ 6,461 (197,267) (6,810) (26,404) (21,263) (197,267) (6,810) (26,404) 6,461 (21,263) - $ - $ - $ 6,461 $ - $ 43,624 43,624 44,386 $ 2,495 (continued) 115

174 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Balance Sheet June 30, Faith in Action Impact CDBG Hazard Fees Funds Mitigation Champlin Fire District DPWPublic Fund EMA Events ASSETS Cash $ - $ Intergovernmental receivables Due from other funds 9,389 Total assets $ 9,389 $ 996,861 $ - $ - 2,028 17, ,861 $ 2,028 $ 17,325 $ 3,495 $ - $ 120,957 1,797 $ 3,495 $ 120,957 $ 1,797 LIABILITIES AND FUND BALANCES Liabilities Due to other funds $ - $ ljnearnedrevenue Accounts payable Total liabilities Fund balances (deficits) Restricted for: Public safety programs Culture and recreation Health and human services Committed for: Public works programs Culture and recreation 9,389 Unassigned Total fund balances (deficits) 9,389 Total liabilities and fund balances $ 9,389 $ 89,519 $ 2,028 $ 17,325 89,519 2,028 17, , , ,861 $ 2,028 $ 17,325 $ 3,476 $ - $ 3, ,957-1, ,957 1,797 $ 3,495 $ 120,957 $ 1,797 (continued) 116

175 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Balance Sheet June 30, 2018 ASSETS Cash $ Intergovernmental receivables Due from other funds Total assets $ 414 ASPCA Grant - 1,500 1,500 Total Special Revenue Town $ 1,180,462 81, ,301 $ 1,997,853 LIABILITIES AND FUND BALANCES Liabilities Due to other funds $ ljnearnedrevenue Accounts payable Total liabilities Fund balances (deficits) Restricted for: Public safety programs Culture and recreation Health and human services Committed for: Public works programs Culture and recreation Unassigned Total fund balances (deficits) Total liabilities and fund balances $ ,500-1,500 1,500 $ 521, ,000 12, , ,158 42, , , ,250 {365,460) 1,275,616 $ 1,997,853 (concluded) 117

176 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, RIRRC Composting Grant Friends of Legislative 246 Human Project Anthony Bramley Grant Mapleroot Services Friends Village Grant Police Cemetary REVENUES Intergovernmental Charges for services Inves1ment income Contributions and private grants Other Total Revenues $ $ - $ 477,813 $ - $ - $ 620 $ 477, EXPENDITURES Executive and administration Public safety Public works Community and economic development Health and human services Culture & recreation Capital expenditures Total Expenditures 451, , Excess of revenues over (under) Expenditures ,520 (6) 120 Other Financing Sources (uses) Operating transfers in Operating transfers out Total other financing sources Excess of revenues and other sources over (under) expenditures and other uses ,520 (6) 120 FUND BALANCE- July 1, 2017 FUND BALANCE- June 30, 2018 $ (1,935) 4, ,627 (18,882) 3,245 (120) 4,100 (1,610) $ 4,000 $ 128,147 $ (18,882) $ 3,239 $ - $ 4,100 (continued) 118

177 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, Document Preservation Coventry Drug Seizure Teen Center Byrne Resource 63 Isle of Emergency Fund Operations Grant Sharing Capri Management REVENUES Intergovernmental Charges for services Jnv~entll1come Contributions and private grants Other Total Revenues $ - 36,299-36,299 $ - $ - $ 15,205 $ 203,140 $ - $ 25,000 69,515 69,515 15, ,140 25,000 EXPENDITURES Executive and administration Public safety Public works Co=unity and economic development Health and human services Culture & recreation Capital expenditures Total Expenditures 44,066 44, ,741 15,205 25,000 1, , ,741 1,052 15, ,140 25,000 Excess of revenues over (under) Expenditures (7,767) (54,226) (1,052) Other Financing Sources (uses) Operating transfers in Operating transfers out Total other financing sources Excess of revenues and other sources over (under) expenditures and other uses (7,767) (54,226) (1,052) FUND BALANCE- July 1, 2017 FUND BALANCE -June 30, 2018 $ 8,569 37,151 6,878 (580) (539) (4,320) 802 $ (17,075) $ 5,826 $ (580) $ (539) $ (4,320) $ (continued) 119

178 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, Oaks RIEMA RIEMA RIEMA RIEMA Coventry Legislative Offsite Maple Valley Industrial Hammet Johnson Blvd Emergency Grant Resurfacing & Franklin Drive Road Drainage Management Raptakis REVENUES Intergovernmental Charges for services Inves1ment income Contributions and private grants Other Total Revenues EXPENDITURES Executive and administration Public safety Public works Community and economic development Health and human services Culture & recreation Capital expenditures Total Expenditures Excess of revenues over (under) Expenditures Other Financing Sources (uses) Operating transfers in Operating transfers out Total other financing sources $ - $ - $ - $ - $ - $ 10,570 $ 5, , ,000 10,570 5,000 34,518 10,867 34,518 10,867 4,998 65,482 (297) 2 4,998 Excess of revenues and other sources over (under) expenditures and other uses FUND BALANCE- July 1, 2017 FUND BALANCE -June 30, 2018 $ 65,482 (297) 2 50,000 (18,296) (7,990) (6,462) (24,577) 115,482 $ (18,296) $ (7,990) $ (6,462) $ (24,577) $ (297) $ 3 (continued) 120

179 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, National Grid ArnoldRd DUI/Speed Health& Bulletproof Click it Weliness Vests or Ticket US Fish& Laurel Ave/ DEA&US Wildlife Anthony Mill Marshals Sandy Acre River REVENUES Intergovernmental Charges for services Investment income Contributions and private grants Other Total Revenues $ - $ - $ 6,389 $ 32,659 6,389 32,659 $ 8,375 $ - $ 8,375 EXPENDITURES Executive and administration Public safety Public works Community and economic development Health and human services Culture & recreation Capital expenditures Total Expenditures 6,389 24,703 6,389 24,703 7,514 7,514 Excess of revenues over (under) Expenditures 7, Other Financing Sources (uses) Operating transfers in Operating transfers out Total other financing sources Excess of revenues and other sources over (under) expenditures and other uses 7, FUND BALANCE- July 1, 2017 FUND BALANCE -June 30, 2018 $ 174,293 1,783 (7,666) 174,293 $ 1,783 $ - $ 290 $ 9,508 3, $ 9,508 $ 3,997 (continued) 121

180 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, Federal Energy Grant I 322 MEDS Grant 109 Recycling Grant 326 Federal Energy Grant2 327 Federal Energy Grant3 332 Tropical Storm Irene Dual-Electric Charging Station REVENUES Intergovernmental Charges for services Investment income Contributions and private grants Other Total Revenues $ - $ 400 $ - $ - $ $ - $ EXPENDITURES Executive and administration Public safety Public works Community and economic development Health and human services Culture & recreation Capital expenditures Total Expenditures Excess of revenues over (under) Expenditures 400 Other Financing Sources (uses) Operating transfers in Operating transfers out Total other imancing sources Excess of revenues and other sources over (under) expenditures and other uses 400 FUND BALANCE -July 1, 2017 FUND BALANCE -June 30, 2018 $ 1,885 31, (13,088) 1,885 $ 31,499 $ 212 $ (13,088) $ 49,682 49,682 $ 11,730 11,730 $ 2,648 2,648 (continued) 122

181 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, RIDOT Read 336 Leap Road Storm Schoolhouse Hurricane Resurfacing Juno Renovations Sandy 337 Blizzard Nemo 400 Food Bank 238 RIEMA Police Awards REVENUES Intergovernmental Charges for services Investment income Contributions and private grants Other Total Revenues $ - $ - $ - $ - $ - $ - $ 15,091 15,091 2,495 2,495 EXPENDITURES Executive and administration Public safety Public works Community and economic development Health and human services Culture & recreation Capital expenditures Total Expenditures 26,404 26,404 24,556 24,556 2,495 2,495 Excess of revenues over (under) Expenditures (26,404) (9,465) Other Financing Sources (uses) Operating transfers in Operating transfers out Total other financing sources Excess of revenues and other sources over (under) expenditures and other uses (26,404) (9,465) FUND BALANCE- July 1, 2017 FUND BALANCE -June 30, 2018 $ (197,267) (6,810) - 6,461 (21,263) (197,267) $ (6,810) $ (26,404) $ 6,461 $ (21,263) $ 53,089 43,624 $ (continued) 123

182 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, Faith in Impact CDBG Hazard Champlin Fire District DPWPublic Action Fees Funds Mitigation Fund EMA Events REVENUES futergovernmental $ 11,625 $ - $ 49,528 $ 17,325 $ 55,257 $ 10,000 $ Charges for services - 338,713 fuvestment income 1, Contributions and private grants - - 2,000 Other Total Revenues 11, ,541 49,528 17,325 55,296 10,000 2,000 EXPENDITURES Executive and administration Public safety ,067 Public works - 69,817-2, Community and economic development 49,528 Health and human services 12,356 Culture & recreation - 3,477 Capital expenditures 78,685 51,800 Total Expenditures 12, ,502 49,528 2,599 55,277 3, Excess of revenues over (under) Expenditures (731) 192,039 14, ,933 1,797 Other Financing Sources (uses) Operating transfers in - 10,000 Operating transfers out (85,326} Total other financing sources (85,326) ,000 Excess of revenues and other sources over (under) expenditures and other uses (731) 106,713 14, ,933 1,797 FUND BALANCE- July 1, , ,629 - {14,726) - 104,024 FUND BALANCE -June 30, 2018 $ 9,389 $ 907,342 $ - $ - $ 19 $ 120,957 $ 1,797 (continued) 124

183 SUPPLEMENTARY INFORMATION Special Revenue Restricted Town Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, ASPCA Grant Total Special Revenue Revenue Town REVENUES Intergovernmental Charges for services Inv~entincome Contributions and private grants Other Total Revenues $ 7,000 7,000 $ 931, ,012 1,867 24, ,515 1,502,211 EXPENDITURES Executive and administration Public safety Public works Community and economic development Health and human services Culture & recreation Capital expenditures Total Expenditures 5,500 5,500 49, , ,137 76, ,345 8, ,485 1,283,479 Excess of revenues over (under) Expenditures 1, ,732 Other Financing Sources (uses) Operating transfers in Operating transfers out Total other financing sources 10,000 (85,326) (75,326) Excess of revenues and other sources over (under) expenditures and other uses 1, ,406 FUND BALANCE- July 1, 2017 FUND BALANCE -June 30, 2018 $ 1,500 1,132,210 $ 1,275,

184 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Balance Sheet June 30, IDEA PartB IDEA PreSchool Title I Title II Perkins Vocational Ed. Title ill CS4RI ASSETS Cash $ - futergovernmental receivables 516,089 Due from other funds - Total assets $ 516,089 $ - $ - $ - 9, ,945 68,590 $ 9,184 $ 233,945 $ 68,590 $ - $ - $ 84,018-6,275-1,408 $ 84,018 $ - $ 7,683 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 31,753 Due to other funds 388,732 Accrued salaries 95,604 Total liabilities 516,089 Fund balances (deficits) Restricted for: Educational programs Unassigned - Total fund balances (deficits) Total liabilities and fund balances $ 516,089 $ - $ - $ - 9, ,200 41,250-66,745 27,340 9, ,945 68, $ 9,184 $ 233,945 $ 68,590 $ 185 $ 1,941 $ 3,750 75,100 1,978 12,081 87,366 3,919 3,750-3,933 {3,348) (3,919) (3,348) (3,919} 3,933 $ 84,018 $ - $ 7,683 ( contioued) 126

185 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Balance Sheet June 30, RICenter for the Arts Leg. Grant Teacher Quality Champlin HHArtClub Recruitment Advance Place Environmental Direct CTE Systems Inst Reimbursement Trust ASSETS Cash $ - Intergovernmental receivables - Due from other funds 586 Total assets $ 586 $ - $ - $ 82, $ 164 $ - $ 82,239 $ - $ - $ 5, ,000 $ 950 $ 5,543 $ 50,000 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - Due to other funds Accrued salaries Total liabilities $ - $ - $ 10,244 59,639 69,883 $ - $ - $ - 9, ,789 Fund balances (deficits) Restricted for: Educational programs 586 Unassigned Total fund balances (deficits) 586 Total liabilities and fund balances $ , ,356 $ 164 $ - $ 82, , ,000 $ 950 $ $ 50,000 (continued) 127

186 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Balance Sheet June 30, English Lang. Categorical Leg. Grant Western After WC Wireless School Academ,r RISCA RISCA RISCA RISCAArts GiveMeS Big Yellow Bus TalkHS ASSETS Cash $ - Intergovernmental receivables Due from other funds 220 Total assets $ 220 $ - $ - $ $ - $ - $ 225 $ - $ - $ 800 1,199 2,542 $ 800 $ 1,199 $ 2,542 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - Due to other funds Accrued salaries Total liabilities Fund balances (deficits) Restricted for: Educational programs 220 Unassigned Total fund balances (deficits) 220 Total liabilities and fund balances $ 220 $ - $ - $ $ - $ - $ 225 $ - $ - $ 800 1,199 2, ,199 2,542 $ 800 $ 1,199 $ 2,542 (continued) 128

187 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Balance Sheet June 30, CCSSMath CTE Categorical Fund CTE Categorical CTE Categorical CTE Develop. Feinstein Comm. Fund - Even Year Fund 2 & Implement Feinstein Support ASSETS Cash Intergovernmental receivables Due from other funds Total assets $ $ - $ - $ - $ 14,185 14,185 $ - $ - $ - $ - $ - $ - $ - $ 2,000 77,646 79,646 $ 10,315 10,315 LIABILITIES AND FUND BALANCES Liabilities Accounts payable Due to other funds Accrued salaries Total liabilities $ - $ 24,557 24,557 - $ 1,156 $ 2,046 3,202 1,102 $ 38,013 39,115 - $ 1,496 1, $ Fund balances (deficits) Restricted for: Educational programs Unassigned Total fund balances (deficits) Total liabilities and fund balances $ - $ (10,372) (3,202) _(39,115) _(_1,496) (10,372) (3,202) (39,115) (1,496) 14,185 $ - $ - $ - $ 79,102 79,102 79,646 $ 10,315 10,315 10,315 (continued) 129

188 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Balance Sheet June 30, Feinstein CPEF USDA Kitchen Kids Schwab United Way Restricted Fund Amgen Fund Equipment Consortium Scholarship ASSETS Cash Intergovernmental receivables Due from other funds Total assets $ $ - $ $ - $ - $ - $ $ - $ - $ - $ - $ - $ $ 575 LIABILITIES AND FUND BALANCES Liabilities Accounts payable Due to other funds Accrued salaries Total liabilities $ - $ - $ 2,496 2,496 - $ - $ 2,779 2,779 - $ - $ Fund balances (deficits) Restricted for: Educational programs Unassigned Total fund balances (deficits) Total liabilities and fund balances $ $ (2,496) (2,496) - $ $ (2,779) (2,779) - $ - $ $ 575 (continued) 130

189 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Balance Sheet June 30, New England Rl Learning Transportation Learn & Serve Athletic Sports Fresh Fruits Dairy & Food Champions Fundraiser Raffie Field Fund Program and Vegetables ASSETS Cash futergovernmental receivables Due from other funds Total assets $ - $ - $ - $ 4,369 2,047 $ 4,369 $ - $ 2,047 $ - $ - $ 185 7, $ 7,501 $ - $ 4,686 4,686 $ 9,552 9,552 LIABILITIES AND FUND BALANCES Liabilities Accounts payable Due to other funds Accrued salaries Total liabilities $ - $ - $ - $ - $ - $ - $ 24, , ,425 9,552 Fund balances (deficits) Restricted for: Educational programs Unassigned Total fund balances (deficits) Total liabilities aud fund balances 4,369 2,047 4,369 2,047 $ 4,369 $ - $ 2,047 $ 185 7, , $ 7,501 $ (20,313) (20,313) 4,686 $ 9,552 (continued) 131

190 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Balance Sheet June 30, Kiducation ASSETS Cash $ - Intergovernmental receivables Due from other funds 258 Total assets $ RI wci NE Secondary Foundation Wireless Class. Sch. Consortium $ - $ - $ $ - $ - $ Remedial LISC Adult Ed Summer School $ - $ - $ 79,694 $ - $ 79,694 $ LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - Due to other funds Accrued salaries Total liabilities Fund balances (deficits) Restricted for: Educational programs 258 Unassigned Total fund balances (deficits) 258 Total liabilities and fund balances $ 258 $ - $ - $ $ - $ - $ 265 $ - $ - $ 79,694 79,694 $ - $ 79,694 $ (continued) 132

191 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Balance Sheet June 30, RILearning Cham~ions RI Kindergarten RI Interlocal Curriculum Walmart Trust RIMath ROTC Naval Interventions Leadershi~ Feinstein 2014 ASSETS Cash $ - Intergovernmental receivables 527 Due from other funds Total assets $ 527 $ - $ 6,956 - $ - - 2, $ 6,956 $ 2,500 $ 16 $ - $ - $ $ 657 $ - $ 381 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - Due to other funds 527 Accrued salaries Total liabilities 527 $ 3,528 $ 2,457 $ - 3,428 6,956 2,457 $ - $ - $ Fund balances (deficits) Restricted for: Educational programs - Unassigned Total fund balances (deficits) - Total liabilities and fund balances $ $ 6,956 $ 2,500 $ $ 657 $ - $ 381 (continued) 133

192 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Balance Sheet June 30, VTA Grant Rev. Total Special Revenue Restricted School ASSETS Cash Intergovernmental receivables Due from other funds Total assets $ 12,846 $ 12,846 $ 82, , ,354 $ 1,302,461 LIABILITIES AND FUND BALANCES Liabilities Accounts payable Due to other funds Accrued Salaries Total liabilities Fund balances (deficits) Restricted for: Educationalprognuns Unassigned Total fund balances (deficits) Total liabilities and fund balances $ - 12, ,846 - $ 12,846 $ 56, , ,306 1,134, ,049 {91,286) 167,763 $ 1,302,461 (concluded) 134

193 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, IDEA PartB IDEA Pre School Title I Title II Perkins Vocational Ed Title ill CS4RI REVENUES Federal Grants State Grants Other Total revenues $ 1,382,892 $ - 1,382,892 29,113 $ 574,213 $ 183,174 $ , , , , ,621 $ - $ 6,275 6,275 EXPENDITURES Salaries Employee benefits Purchased services Supplies and materials Property and equipment Capital expenses Total expenditures 834, , ,025 25,177 30,235 1,382,892 19, , ,860 5, ,309 51,500 4,070 5,879 5, ,264 11, , ,174 77,117 48,947 64,640 15,324 4, , , ,919 3,750 3,750 Excess (deficiency) of revenues over (under) expenditures (283) (3,919) 2,525 Other Financing Sources (uses) Operating transfers in Operating transfers out Total other financing sources Excess of revenues and other sources over (under) expenditures and other uses (283) (3,919) 2,525 FUND BALANCE- July 1, 2017 FUND BALANCE- June 30, 2018 $ - $ - $ - $ - $ (3,065) (3,348) $ (3,919) $ 1,408 3,933 (continued) 135

194 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, RICenter for the Arts Leg. Grant HHArtClub Teacher Quality Recruitment Champlin Advance Place Environmental Systems Inst Direct Reimbursement CTE Trust REVENUES Federal Grants State Grants Other Total revenues $ - $ - $ - $ - $ ,000 1,000 - $ - $ 50,000 50,000 EXPENDITURES Salaries Employee benefits Purchased services Supplies and materials Property and equipment Capital expenses Total expenditures 59,773-10,110 69, Excess (deficiency) of revenues over (under) expenditures (69,777) ,000 Other Financing Sources (uses) Operating transfers in Operating transfers out Total other financing sources Excess of revenues and other sources over (under) expenditures and other uses 65 (69,777) ,000 FUND BALANCE- July 1, 2017 FUND BALANCE -June 30, 2018 $ $ 164 (65) 82, (4,246) 164 $ - $ 12,356 $ 950 $ (4,246) $ 50,000 (continued) 136

195 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, English Lang. Leg. Grant Western After RISCA RISCA Categorical WC Wireless School Academy RISCA Give Me 5 Big Yellow Bus RISCAArts TalkHS REVENUES Federal Grants State Grants Other Total revenues $ - $ $ - $ - $ - $ - $ ,667 1,667 EXPENDITURES Salaries Employee benefits Purchased services Supplies and materials Property and equipment Capital expenses Total expenditures ,327 Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (uses) Operating transfers in Operating transfers out Total other f"mancing sources (12) (12) 3 3 Excess of revenues and other sources over (under) expenditures and other uses (12) FUND BALANCE- July 1, 2017 FUND BALANCE- June 30, 2018 $ $ 12 - $ (3) - $ $ 800 $ 1,099 1,199 $ 2,202 2,542 (continued) 137

196 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, CCSSMath CTE Categorical Fund CTE Categorical Fund- Even Yr CTE Categorical Fund CTE Develop. Feinstein Comm. & Implement Feinstein Support REVENUES Federal Grants State Grants Other Total revenues $ - $ - $ - $ - $ - $ - $ EXPENDITURES Salaries Employee benefits Purchased services Supplies and materials Propetty and equipment Capital expenses Total expenditures 126,252 44, ,612 1,838 1,364 3,202 30,000 8,511 8,833 47,344 2,809 1,870 5,000 29, , ,168 31,957 Excess (deficiency) of revenues over (under) expenditures (170,612) (3,202) (47,344) (12,168) (31,957) Other Financing Sources (uses) Operating transfers in Operating transfers out Total other financing sources (35) (35) Excess of revenues and other sources over (under) expenditures and other uses (35) (170,612) (3,202) (47,344) (12,168) (31,957) FUND BALANCE- July 1, 2017 FUND BALANCE- June 30, $ - $ 160,240-8,229 10, ,059 10,315 (10,372) $ (3,202) $ (39,115) $ (1,496) $ 79,102 $ 10,315 (continued) 138

197 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, 2018 REVENUES Federal Grants State Grants Other Total revenues EXPENDITURES Salaries Employee benefits Purchased services Supplies and materials Property and equipment Capital expenses Total expenditures Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (uses) Operating transfers in Operating transfers out Total other fmancing sources $ Feinstein CPEF USDA Kitchen Kids Schwab United Way Restricted Fund Amgen Fund Equipment Consortium Scholarship - $ - $ - $ - $ 4,140 $ - $ - 4, ,674 4,140 Excess of revenues and other sources over (under) expenditures and other uses FUND BALANCE- July 1, 2017 FUND BALANCE- June 30, 2018 $ 436 (2,496) 663 (2,779) $ (2,496) $ 663 $ (2,779) $ - $ 224 $ 575 (continued) 139

198 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, 2018 REVENUES Federal Grants State Grants Other Total revenues EXPENDITURES Salaries Employee benefits Purchased services Supplies and materials Property and equipment Capital expenses Total expenditures Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (uses) Operating transfers in Operating transfers out Total other financing sources Excess of revenues and other sources over (under) expenditures and other uses FUND BALANCE- July 1, 2017 FUND BALANCE- June 30, 2018 $ $ New England Rl Learning Transportation Learn & Serve Athletic Sports Fresh Fruits Diary & Food Champions Fundraiser Raffle Field Fund Program and Vegetables - $ - $ - $ - $ - $ - $ 31,632 4,297 4,297 31, , ,428 4,686 1,211 31, ,211 4,295 11,199 31,632 (1,211) 2 - (11,199) (2) (2) (1,211) (11,199) 5,580 2,Q_4I 185 7,501 (9,114) 4,369 $ - $ 2,047 $ 185 $ 7,501 $ (20,313) $ (continued) 140

199 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, Kiducation RI Foundation WCI Wireless Class NE Secondary Sch. Consortium LISC Adult Education Remedial Summer School REVENUES Federal Grants State Grants Other Total revenues $ - $ - $ - $ - $ - $ 7,580 7,580 - $ EXPENDITURES Salaries Employee benefits Purchased services Supplies and materials Property and equipment Capital expenses Total expenditures Excess (deficiency) of revenues over (under) expenditures 7,580 Other Financing Sources (uses) Operating transfers in Operating transfers out Total other financing sources 6,968 (37) (37) 6,968 - (13) (13) - (21,207) (21,207) Excess of revenues and other sources over (under) expenditures and other uses (37) 6,968 (13) 7,580 (21,207) FUND BALANCE- July 1, 2017 FUND BALANCE -June 30, $ 258 $ 37 (6, $ - $ 265 $ 13 - $ 72,114 79,694 $ 21,207 (continued) 141

200 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, Rl Learning Rl Kindergarten Walmart Rl Interlocal Rl Math ROTC Naval Champions Curriculum Trust Interventions Leadership Feinstein 2014 REVENUES Federal Grants State Grants Other Total revenues $ - $ $ 6,720 6,720 2,500 2,500 - $ - $ - $ 2, , $ EXPENDITURES Salaries Employee benefits Purchased services Supplies and materials Property and equipment Capital expenses Total expenditures ,565-5,155 6,720-2,457-2,457-1, , Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (uses) Operating transfers in Operating transfers out Total other financing sources Excess of revenues and other sources over (under) expenditures and other uses FUND BALANCE- July 1, 2017 FUND BALANCE- June 30, 2018 $ - $ - $ 43 $ 16 $ - $ - $ (continued) 142

201 SUPPLEMENTARY INFORMATION Special Revenue Restricted School Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, 2018 REVENUES Federal Grants $ State Grants Other Total revenues EXPENDITURES Salaries Employee benefits Purchased services Supplies and materials Property and equipment Capital expenses Total expenditures Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (uses) Operating transfers in Operating transfers out Total other financing sources Excess of revenues and other sources over (under) expenditures and other uses FUND BALANCE- July 1, 2017 FUND BALANCE -June 30, 2018 $ VTA Grant Rev. 37,144-37,144 33, ,746 37,144 Total Special Revenue Restricted School $ 2,452,929 70,879 14,343 2,538,151 1,630, , , ,198 50,901 23,526 2,829,067 (290,916) 7,036 (21,306) (14,270) (305,186) 472,949 $ 167,763 (concluded) 143

202 SUPPLEMENTARY INFORMATION Capital Project Funds Combining Balance Sheet June 30, Police Human Services ASSETS Cash $ 4,579,558 Due from other funds Total assets $ 4,579,558 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 45,197 Due to other funds 14,654 Total liabilities 59,851 Fund balances (deficits) Committed for: Public works programs 4,519,707 Reserved for: Education programs Unassigned Total fund balances (deficits) 4,519,707 Total liabilities and fund balances $ 4,579, Capital Capital RIHEBC Improvement Improvement Capital Fund 17 Fund 12 Fund $ $ $ 61,583 85,217 $ 85,217 $ $ 61,583 $ - $ - $ - 372, ,937 85,217 61,583 - (372,937) 85,217 {372,937) 61,583 $ 85,217 $ - $ 61, Capital High School Bus Yard Improvement School Capital School Fund 14 ACUnit $ $ 25,649 $ - $ 19,356-90,606 $ 19,356 $ 25,649 $ 90,606 $ $ $ 5,898 $ $ ,957 6,158-3,957 19,356 90,606 19, (3,957) 19,356 19,491 90,606 (3,957) $ 19,356 $ 25,649 $ 90,606 $ continued 144

203 SUPPLEMENTARY INFORMATION Capital Project Funds Combining Balance Sheet June 30, Capital Program Fund ASSETS Cash $ - Due from other funds 23,983 Total assets $ 23,983 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ Due to other funds Total liabilities Fund balances (deficits) Committed for: Public works programs 23,983 Reserved for: Education programs Unassigned Total fund balances (deficits) 23,983 Total liabilities and fund balances $ 23, Capital 179 Automated Improvement Road Bond Collection Bond Fund2016 Fund2016 Fund2016 $ - $ 98,744 $ 47,297 86, ,213 - $ 86,513 $ 383,957 $ 47,297 $ $ $ 45,403-45,403 86, ,957 1,894 86, ,957 1,894 $ 86,513 $ 383,957 $ 47, Upper Pond Landtlll HammetRoad School Dam Repair Remediation Island Impact 2016 Bond2016 Drive Fees $ 117,443 $ 389,132 $ $ - 85,326 $ 117,443 $ 389,132 $ $ 85,326 $ 1,251 $ 5,710 $ $ ,775 85,326 1,251 5,810 1,775 85, , ,322 - (1,775) 116, ,322 (1,775) $ 117,443 $ 389,132 $ - $ 85,326 continued 145

204 SUPPLEMENTARY INFORMATION Capital Project Funds Combining Balance Sheet.June 30, Energy Bond ASSETS Cash $ 224,665 $ Due from other funds Total assets $ 224,665 $ LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - $ Due to other funds Total liabilities Fund balances (deficits) Committed for: Public works programs 224,665 Reserved for: Education programs - Unassigned Total fund balances (deficits) 224,665 Total liabilities and fund balances $ 224,665 $ Refuse Automated Road Collection Collection Bond Bond Bond $ 98,668 $ 15, , ,373 $ 98,668 $ 15,136 - $ $ - 85,632 8,822 85,632 8, ,373 13,036 6, ,373 13,036 6, ,373 $ 98,668 $ 15,136 Total Capital Projects $ 5,657, ,587 $ 6,474,462 $ 58, , ,922 6,156,718 19,491 (378,669) 5,797,540 $ 6,474,462 concluded 146

205 SUPPLEMENTARY INFORMATION Capital Project Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, Police Human Services REVENUES Intergovernmental $ Interest income 39,678 Total revenues 39,678 EXPENDITURES Non- capital 527,561 Capital Total expenditures 527,561 Excess of revenues over (under) Expenditures (487,883) Other Financing Sources (uses) Operating transfers in Operating transfers out (146,649) Issuance of debt - Total other financing sources (uses) (146,649) Excess of revenues and other sources over (under) expenditures and other uses (634,532) FUND BALANCE- July 1, ,154,239 FUND BALANCE -June 30, 2018 $ 4,519, Capital Capital RIHEBC Improvement Improvement Capital Fund 17 Fund 12 Fund $ $ $ 3,829 14,813 1,366 5,195 14,813 (5,195) (14,813) - - (5,195) - (14,813) 90,412 (372,937) 76,396 $ 85,217 $ (372,937) $ 61, Capital High School Bus Yard Improvement School 9!p_ital School Fund 14 ACUnit $ $ $ $ , ,939 (126,543) 146, ,649-20,106 19,356 (615) 90,606 {3,957) $ 19,356 $ 19,491 $ 90,606 $ (3,957) continued 147

206 SUPPLEMENTARY INFORMATION Capital Project Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, 2018 REVENUES Intergovernmental $ Interest income Total revenues EXPENDITURES Non- capital Capital Total expenditures Excess of revenues over (under) Expenditures 126 Capital Program Fund Capital 179 Automated Improvement Road Bond Collection Bond Fund 2016 Fund 2016 Fund2016 $ $ 285,213 $ - 15, , ,174,144 3,174,144 (2,873,318) Upper Pond Landfill HammetRoad School Dam Repair Remediation Island Impact 2016 Bond2016 Drive Fees $ $ - $ $ 2,941 7,054 2,941 7, ,484 97,871 88, ,484 97,871 88,480 (410,543) (90,817) (88,480) Other Financing Sources (uses) Operating transfers in Operating transfers out Issuance of debt - Total other financing sources (uses) ,569 54,567-54,567 90,569 Excess of revenues and other sources over (under) expenditures and other uses (2,873,318) 273 (410,543) (90,817) 54,567 2,089 FUND BALANCE- July 1, ,983 FUND BALANCE- June 30, 2018 $ 23,983 86,513 3,257,275 1,621 $ 86,513 $ 383,957 $ , ,139 (56,342) (2,089) $ 116,192 $ 383,322 $ (1,775) $ continued 148

207 SUPPLEMENTARY INFORMATION Capital Project Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance For tbe fiscal year ended June 30, Energy Bond REVENUES Intergovernmental $ $ Interest income 1,817 Total revenues 1,817 EXPENDITURES Non- capital Capital Total expenditures Excess of revenues over (under) Expenditures 1,817 Other Financing Sources (uses) Operating transfers in - Operating transfers out - Issuance of debt Total other financing sources (uses) Excess of revenues and other sources over (under) expenditures and other uses 1,817 FUND BALANCE- July 1, ,848 FUND BALANCE- June 30, 2018 $ 224,665 $ Refuse Automated Road Collection Collection Bond Bond Bond $ $ 1, , ,658 8, ,658 8,822 (614,059) 570 (8,735) (614,059) 570 (8,735) 754,432 12,466 15, ,373 $ $ 6,314 TOTAL Capital Projects $ 285,213 70, ,241 5,071,601 1,366 5,072,967 (4,717,726) 237,218 (146,649) 54, ,136 (4,572,590) 10,370,130 $ 5,797,540 concluded 149

208 SUPPLEMENTARY INFORMATION Combining Statement of Net Position Pension Trust Funds For the Fiscal Year Ended June 30, 2018 Police Pension Fund Municipal Pension Fund School SRP Pension Fund Total ASSETS Cash $ 1,992,146 $ 517,227 $ 1,174,985 $ 3,684,358 Investments, at fair value: Fixed income Mutual funds Equities Total investments Total Assets 3,294,720 8,284,259 2,402,983 13,981,962 15,974,108 2,344,664 3,659,697 3,925,761 9,930,122 10,447,349 1,040,809 3,330,549 7,686,770 12,058,128 13,233,113 6,680,193 15,274,505 14,015,514 35,970,212 39,654,570 NET POSITION Restricted for: Employees' pension benefits TOTAL NET POSITION 15,974,108 $15,974,108 10,447,349 $ 10,447,349 13,233,113 $ 13,233,113 39,654,570 $ 39,654,

209 SUPPLEMENTARY INFORMATION Combining Statement of Revenues, Expenses and Changes in Net Position Pension Trust Funds For the Fiscal Year Ended June 30,2018 Police Municipal School SRP Pension Fund Pension Fund Pension Fund Additions Contributions Employer contributions $ 4,808,076 $ 845,691 $ 1,219,880 Plan members contributions 421, , ,905 Other contributions 1,012 Total contributions 5,230,388 1,330,249 1,728,785 Investment earnings Interest and dividends 159, , ,296 Net increase (decrease) in fair value of investments 1,012, ,882 1,101,048 Total investment earnings 1,172, ,315 1,219,344 Less investment expense 73,233 47,889 94,249 Net investment earnings 1,099, ,426 1,125,095 Total additions 6,329,499 2,106,675 2,853,880 Deductions Benefits paid 4,067,989 1,065,902 2,083,506 Total deductions 4,067,989 1,065,902 2,083,506 Change in net position 2,261,510 1,040, ,374 Net position- beginning of year 13,712,598 9,406,576 12,462,739 Net position- end of year $ 15,974,108 $ 10,447,349 $ 13,233,113 Total $ 6,873,647 1,414,763 1,012 8,289, ,112 2,809,891 3,216, ,371 3,000,632 11,290,054 7,217,397 7,217,397 4,072,657 35,581,913 $ 39,654,

210 SUPPLEMENTARY INFORMATION Private Purpose Trust Funds Combining Balance Sheet June 30, 2018 Waterman Fund Fiske Fund Cemetery Fund Total ASSETS Cash Investments Due from other funds Total assets $ 523,127 $ 4,029 2,266, , ,324 3,097 $ 3,026,494 $ 288,779 $ 4,146 $ 531,302 56,845 2,604, ,421 $ 60,991 $ 3,376,264 LIABILITIES Due to other funds Total liabilities FUND BALANCES Unreserved Total fund balances (deficits) Total liabilities and fund balances $ - $ ,026, ,779 3,026, ,779 $ 3,026,494 $ 288,779 $ 90,000 $ 90,000 90,000 90,000 (29,009) 3,286,264 (29,009) 3,286,264 $ 60,991 $ 3,376,

211 SUPPLEMENTARY INFORMATION Private Purpose Trust Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the fiscal year ended June 30, Waterman Fiske Fund Fund 602 Cemetery Fund Total REVENUES Investment income $ 21,256 $ 2,943 Net increase( decrease) in fair value of investments 126,566 14,030 Total Revenues 147,822 16,973 EXPENDITURES Social services 8,187 1,060 Total Expenditures 8,187 1,060 Excess of revenues over (under) Expenditures 139,635 15,913 FUND BALANCE- July 1, ,886, ,866 FUND BALANCE -June 30, 2018 $ 3,026,494 $ 288,779 $ - $ 24,199 13, ,400 13, ,599-9,247-9,247 13, ,352 (42,813) 3,116,912 $ (29,009) $ 3,286,

212 SUPPLEMENTARY INFORMATION Agency Funds- Town Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30,2018 Balance July 1, 2017 Additions Deductions PARKS & RECREATION Assets Cash $ 128,816 $ 75,755 $ 80,774 Total assets $ 128,816 $ 75,755 $ 80,774 Liabilities Deposits held in custody for others $ 128,816 $ 75,755 $ 80,774 Total liabilities $ 128,816 $ 75,755 $ 80,774 Balance June 30, 2018 $ 123,797 $ 123,797 $ 123,797 $ 123,797 PERFORMANCE BONDS Assets Cash $ 1,272,578 $ 38,436 $ 42,212 Total assets $ 1,272,578 $ 38,436 $ 42,212 Liabilities Deposits held in custody for others $ 1,272,578 $ 38,436 $ 42,212 Total liabilities $ 1,272,578 $ 38,436 $ 42,212 $ 1,268,802 $ 1,268,802 $ 1,268,802 $ 1,268,802 TOTAL Assets Cash $ 1,401,394 $ 114,191 $ 122,986 Total assets $ 1,401,394 $ 114,191 $ 122,986 Liabilities Deposits held in custody for others $ 1,401,394 $ 114,191 $ 122,986 Total liabilities $ 1,401,394 $ 114,191 $ 122,986 TOTAL TOWN & SCHOOL Assets Cash $ 2,030,622 $ 2,526,103 $2,521,431 Due from Retirees 82,016 67,334 82,016 Total assets $ 2,112,638 $2,593,437 $2,603,447 Liabilities Due to other funds $ 497,841 $ 826,108 $ 733,595 Deposits held in custody for others 1,614,797 1,767,329 1,869,852 Total liabilities $ 2,112,638 $2,593,437 $2,603,447 $ 1,392,599 $ 1,392,599 $ 1,392,599 $ 1,392,599 $ 2,035,294 67,334 $ 2,102,628 $ 590,354 1,512,274 $ 2,102,

213 SUPPLEMENTARY INFORMATION Agency Funds School Department Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 2018 Balance July 1, 2017 Additions Deductions COVENTRYHIGHSCHOOL Assets Cash $ 153,166 $ 554,210 $ 507,119 Total assets $ 153,166 $ 554,210 $ 507,119 Liabilities Due to other funds $ $ $ Deposits held in custody for others 153, , ,119 Total liabilities $ 153,166 $ 554,210 $ 507,119 Balance June 30, 2018 $ 200,257 $ 200,257 $ 200,257 $ 200,257 FEINSTEIN MIDDLE SCHOOL Assets Cash $ 95,808 $ 490,046 $ 495,774 Total assets $ 95,808 $ 490,046 $ 495,774 Liabilities Due to other funds $ $ $ Deposits held in custody for others 95, , ,774 Total liabilities $ 95,808 $ 490,046 $ 495,774 CULINARY ARTS SCHOLARSHIP FUND Assets Cash $ 11,953 $ 15 $ Total assets $ 11,953 $ 15 $ Liabilities Deposits held in custody for others $ 11,953 $ 15 $ Total liabilities $ 11,953 $ 15 $ HOPKINS HILL Assets Cash $ 21,138 $ 11,407 $ 8,479 Total assets $ 21,138 $ 11,407 $ 8,479 Liabilities Due to other funds $ $ $ Deposits held in custody for others 21,138 11,407 8,479 Total liabilities $ 21,138 $ 11,407 $ 8,479 $ 90,080 $ 90,080 $ 90,080 $ 90,080 $ 11,968 $ 11,968 $ 11,968 $ 11,968 $ 24,066 $ 24,066 $ 24,066 $ 24,066 (continued) 155

214 SUPPLEMENTARY INFORMATION Agency Funds School Department Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30,2018 Balance Balance July 1, 2017 Additions Deductions June 30, 2018 BLACK ROCK Assets Cash $ 24,134 $ 17,694 $ 29,712 $ 12,116 Total assets $ 24,134 $ 17,694 $ 29,712 $ 12,116 Liabilities Due to other funds $ $ $ $ Deposits held in custody for others 24,134 17,694 29,712 12,116 Total liabilities $ 24,134 $ 17,694 $ 29,712 $ 12,116 OAK HAVEN Assets Cash $ 1,020 $ $ $ 1,020 Total assets $ 1,020 $ $ $ 1,020 Liabilities Due to other funds $ $ $ $ Deposits held in custody for others 1,020 1,020 Total liabilities $ 1,020 $ $ $ 1,020 REGIONAL CAREER & TECH CTR Assets Cash $ 54,286 $ 285,377 $ 274,515 $ 65,148 Total assets $ 54,286 $ 285,377 $ 274,515 $ 65,148 Liabilities Due to other funds $ $ $ $ Deposits held in custody for others 54, , ,515 65,148 Total liabilities $ 54,286 $ 285,377 $ 274,515 $ 65,148 TIOGUE SCHOOL Assets Cash $ 8,912 $ 27,875 $ 24,947 $ 11,840 Total assets $ 8,912 $ 27,875 $ 24,947 $ 11,840 Liabilities Due to other funds $ $ $ $ Deposits held in custody for others 8,912 27,875 24,947 11,840 Total liabilities $ 8,912 $ 27,875 $ 24,947 $ 11,840 (continued) 156

215 SUPPLEMENTARY INFORMATION Agency Funds School Department Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 2018 Balance Balance July 1, 2017 Additions Deductions June 30, 2018 WESTERN COVENTRY Assets Cash $ 21,695 $ 53,006 $ 53,954 $ 20,747 Total assets $ 21,695 $ 53,006 $ 53,954 $ 20,747 Liabilities Due to other funds $ $ $ $ Deposits held in custody for others 21,695 53,006 53,954 20,747 Total liabilities $ 21,695 $ 53,006 $ 53,954 $ 20,747 WASHINGTON OAK SCHOOL Assets Cash $ 31,613 $ 42,570 $ 34,837 $ 39,346 Total assets $ 31,613 $ 42,570 $ 34,837 $ 39,346 Liabilities Due to other funds $ $ $ $ Deposits held in custody for others 31,613 42,570 34,837 39,346 Total liabilities $ 31,613 $ 42,570 $ 34,837 $ 39,346 PHYSICAL PLANT Assets Cash $ 1,012 $ $ 233 $ 779 Total assets $ 1,012 $ $ 233 $ 779 Liabilities Due to other funds $ $ $ $ Deposits held in custody for others 1, Total liabilities $ 1,012 $ $ 233 $ 779 LITTLE OAKERS PRE SCHOOL Assets Cash $ 58,387 $ 72,757 $ 59,490 $ 71,654 Accounts receivable 1,100 1,100 Total assets $ 58,387 $ 73,857 $ 59,490 $ 72,754 Liabilities Due to other funds $ $ $ Deposits held in custody for others 58,387 73,857 59,490 72,754 Total liabilities $ 58,387 $ 73,857 $ 59,490 $ 72,754 (continued) 157

216 SUPPLEMENTARY INFORMATION Agency Funds School Department Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 2018 Balance Balance July 1, 2017 Additions Deductions June 30, 2018 BENEFITS Assets Cash $ 112,806 $ 840,721 $ 901,707 $ 51,820 Accounts receivable 82,016 66,234 82,016 66,234 Total assets $ 194,822 $ 906,955 $ 983,723 $ 118,054 Liabilities Due to other funds $ 497,841 $ 826,108 $ 733, ,354 Deposits held in custody for others (303,019} 80, ,128 (472,300) Total liabilities $ 194,822 $ 906,955 $ 983,723 $ 118,054 RETIREE MEDICAL Assets Cash $ 22,000 $ $ $ 22,000 Total assets $ 22,000 $ $ $ 22,000 Liabilities Due to other funds $ $ $ Deposits held in custody for others 22,000 22,000 Total liabilities $ 22,000 $ $ $ 22,000 ADMIN CHECKING Assets Cash $ 11,298 $ 16,234 $ 7,678 $ 19,854 Total assets $ 11,298 $ 16,234 $ 7,678 $ 19,854 Liabilities Due to other funds $ $ $ Deposits held in custody for others 11,298 16,234 7,678 19,854 Total liabilities $ 11,298 $ 16,234 $ 7,678 $ 19,854 TOTAL AGENCY FUNDS Assets Cash $ 629,228 $ 2,411,912 $ 2,398,445 $ 642,695 Accounts receivable 82,016 67,334 82,016 67,334 Total assets $ 711,244 $ 2,479,246 $ 2,480,461 $ 710,029 Liabilities Due to other funds $ 497,841 $ 826,108 $ 733,595 $ 590,354 Deposits held in custody for others 213,403 1,653,138 1,746, ,675 Total liabilities $ 711,244 $ 2,479,246 $ 2,480,461 $ 710,029 (concluded) 158

217 Funds Combined for GASB 54 Reporting Purposes Town General Fund School Department

218 SUPPLEMENTARY INFORMATION Town General Fund Balance Sheet Funds Combined with Town General Fund for GASB 54 Purposes June 30, General Town Personal Pilot Land Cellphone Fund G:r_mnasium Watercraf!. ProiJ!:.am Trust Tower ASSETS Cash and cash equivalents $ 10,322,108 $ $ $ $ $ Investments 4,557,670 Accounts receivable: Real estate and personal property taxes 2,556,336 Other receivables 835,753 Due from other funds 3,716,747 Total assets $ 21,988,614 $ $ $ $ $ LIABILI11ES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable and accrued expenditures $ 298,963 $ $ $ $ $ Due to other funds 8,027,781 (45,301) (120) (18,679) (1,376,549) (193,653) Other liabilities 440,670 Total liabilities 8, {45,301) (120) {18,679) {1,376,549) {193,653) DEFERRED INFLOWS OF RESOURCES Unavailable tax revenue 2,579,656 Fund balances: Non-spendable for: Sewer fund receivable 2,656,700 Committed for: Public works programs Public safety programs Culture and recreation 45, ,679 1,376, ,653 Unassigned: 7,984,844 Total fund balances 10,641,544 45, ,679 1,376, ,653 - Total liabilities, deferred inflows of resources and fund balances $ 21,988,614 $ $ $ $ $ (Continued) 159

219 SUPPLEMENTARY INFORMATION Town General Fund Balance Sheet Funds Combined with Towu General Fund for GASB 54 Purposes June 30, Transfer Station Scrap Metal Scrap Metal Transportation Low Income Anima/Care DPW DPW Parks&Rec Programs ~/Neuter Fund ASSETS Cash and cash equivalents $ $ $ $ 200,581 $ $ ill vestments Accounts receivable: Real estate and personal property taxes Other receivables Due from other funds Total assets $ $ $ $ $ $ LIABILJTIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable and accrued expenditures $ 2,100 $ 200 $ $ $ $ Due to other funds (1,829) (18,551) (10,313) (9,262) (2,732) Other liabilities Total liabilities 271 {18,351} {10,313} {9,262} {2,732) DEFERRED INFLOWS OF RESOURCES Unavailable tax revenue Fund balances: Non-spendable for: Sewer fund receivable Committed for: Public works programs - 18,351 Public safety programs 9,262 2,732 Culture and recreation 10, ,581 Unassigned: {271} Total fund balances {271} 18,351 10, ,581 9, ,732 Total liabilities, deferred inflows of resources and fund balances $ $ $ $ $ $ (Continued) 160

220 SUPPLEMENTARY INFORMATION Town General Fund Balance Sheet Funds Combined with Town General Fund for GASB 54 Purposes June 30, Concession Vendor Collection Agency Historical Records T Shirt Program Donations Celebrate Parks&Rec Tax Collector Trust Parks&Rec Police CoventrJ'_ ASSETS Cash and cash equivalents $ $ $ $ $ $ Investments Accounts receivable: Real estate and personal property taxes Other receivables Due from other funds Total assets $ $ $ $ $.J LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable and accrued expenditures $ $ 723 $ $ $ $ Due to other funds (7,858) (4,368) (43,754) (11,330) (2,277) Other liabilities Total liabilities {7,858) (3,645) {43,754} {11,330} {2,277) DEFERRED INFLOWS OF RESOURCES Unavailable tax revenue Fund balances: Non-spendable for: Sewer fund receivable Committed for: Public works programs Public safety programs 2,277 Culture and recreation 7,858 3,645 43,754 11,330 Unassigned: Total fund balances 7,858 3,645 43,754 11,330 2,277 Total liabilities, deferred il!flows of resources and fund balances $ $ $ $ $ $ (Continued) 161

221 SUPPLEMENTARY INFORMATION Town General Fund Balance Sheet Funds Combined with Town General Fund for GASB 54 Purposes June 30, Library Book Spay I Neuter Donantions Recycling Parks&Rec Insurance Sale Fund Parks&Rec Garb/Waste Mg_nt Field Fund Settlements TOTAL ASSETS Cash and cash equivalents $ $ $ $ $ $ $ 10,522,689 Investments 4,557,670 Accounts receivable: Real estate and personal property taxes 2,556,336 Other receivables 835,753 Due from other funds 3,716,747 Total assets $ $ $ $ $ - $ 22,189,195 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable and accrued expenditures $ $ $ - $ $ $ 301,986 Due to other funds (26,233) (5,516) (10,121) (10,910) (7,876) (32,604) 6,187,945 Other liabilities 440,670 Total liabilities {26,233} {5,516} {10,121} {10,910} {7,876} {32,604} 6,930,601 DEFERRED INFLOWS OF RESOURCES Unavailable tax revenue 2,579,656 Fund balances: Non-spendable for: Sewer fund receivable 2,656,700 Committed for: Public works programs 10,910 29,261 Public safety programs 5,516 32,604 52,391 Culture and recreation 26,233 10,121 7,876 1,956,013 Unassigned: 7,984,573 Total fund balances 26,233 5,516 10,121 10,910 7,876 32,604 12,678,938 Total liabilities, deferred inflows of resources and fund balances $ - $ $ $ $ $ $ 22,189,195 (Concluded) 162

222 SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures, Other Financing Sources (Uses) and Changes in Fund Balance Funds Combined with Town General Fund for GASB 54 Purposes June 30, General Town Personal Pilot Land Cellphone Fund Gymnasium Watercraf!. Program Trust Tower Revenues Real estate and personal property taxes $ 71,652,257 $ $ $ $ $ Other taxes 1,005,987 Penalties and interest on taxes 457,167 Licenses, fees and permits 789,512 Investment income 151,181 Intergovernmental 2,358,888 Charges for services 4, ,636 Miscellaneous 718,120 Total revenues 77,133,112 4, ,636 Expenditures Current: General government 6,092,766 (205,656) Public safety 12,492,114 Public works 5,366,489 Community and economic development 342,227 1,476 Health and human services 699,354 9,468 Culture and recreation 2,073,608 4,375 Debt service Principal payments 3,745,000 Interest and fiscal charges I Total expenditures 32,224,419 9,468 4,375 (204,180) Excess of revenues over (under) expenditures before other financing sources (uses) 44,908,693. (?,;n!ll (3,852) 204, ,636 Other financing sources (uses) Transfers to other funds ( 44,234,450} 40, (70,000} Total other financing sources (uses) (44,234,450) 40,000 12,327 - (70,000) Excess of revenues and other sources over (under) expenditures and other uses 674,243 34,782 8, ,180 57,636 Fund balances - beginning restated 9,967, ,172, ,017 Fund balances - ending $ 10,641,544 $ $ 120 $ $ 1,376,549 $ 193,653 (Continued) 163

223 SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures, Other Financing Sources (Uses) and Changes in Fund Balance Funds Combined with Town General Fund for GASB 54 Purposes.June 30, Transfer Station Scrap Metal Scrap Metal Transportation Low Income Animal Care DPW DPW Parks&Rec Programs Spay/Nenter Fund Revenues Real estate and personal property taxes $ $ $ $ $ $ Other taxes Penalties and interest on taxes licenses, fees and permits Investment income Intergovernmental Charges for services 11,756 35,804 1, ,848 1, Miscellaneous Total revenues 11, , Expenditures Current: General government Public safety 375 Public works 26,144 40,163 Community and economic development Health and human services Culture and recreation 2, ,703 Debt service Principal payments Interest and fiscal charges Total expenditures 26,144 40,163 2, , Excess of revenues over (under) expenditures before other financing sources (uses) (14,388) (4,359) (117) 154, Other financing sources (uses) Transfers to other funds (73,732} Total other financing sources (uses) (73,732) Excess of revenues and other sonrces over (under) expenditures and other uses (14,388) (4,359) (117) 80, Fund balances - beginning 14,117 22,710 10, , ,486 Fund balances -ending $ (271} $ $ $ 200,581 $ 9,262 $ (Continued) 164

224 SUPPLEMENTARY INFORMATION TOWN OF COVENTRY, RIIODE ISLAND Schedule of Revenues, Expenditures, Other Financing Sources (Uses) and Changes in Fund Balance Funds Combined with Town General Fund for GASB 54 Purposes June 30, Concession Vendor Collection Agency Historical Records T Shirt Program Donations Celebrate Parks&Rec Tax Collector Trust Parks&Rec Police Coventry Revenues Real estate and personal property taxes $ $ $ $ $ $ Other taxes Penalties and interest on taxes 4,266 Licenses, fees and permits Investment income Intergovernmental Charges for services 2,980 6,113 1,257 Miscellaneous 152 Total revenues 2,980 4,266 6, Expenditures Current: General governmeot 3,786 Poblic safety Poblic works Community and economic developmeot Health and human services Culture and recreation 7,601 Debt service Principal payments Interest and fiscal charges Total expenditures 3,786 7,601 Excess of revenues over (under) expenditures before other financing sources (uses) 2, ,113 (6,344) 152 Other financing sources (uses) Transfers to other funds (1,027} Total other financing sources (uses) (1,027) Excess of revenues and other sources over (under) expenditures and other uses 2, , _ (1,027) Fund balances - beginning 4,878 3,165 37,641 5,674 2,125 1,027 - Fund balances - ending $ $ $ $ 11,330 $ 2,277 $ (Continued) 165

225 SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures, Other Financing Sources (Uses) and Changes in Fund Balance Funds Combined with Town General Fund for GASB 54 Purposes June 30, Library Book Spay Neuter Donations Recycling Parks&Rec Insurance Sale Fund Parks&Rec Garb/Waste Mg!}t Field Fund Settlements Total Revenues Real estate and personal property taxes $ $ $ $ $ $ $ 71,652,257 Other taxes - 1,005,987 Penalties and interest on taxes - 461,433 Licenses, fees and pennits - 789,512 Investment income - 151,181 Intergovernmental 2,358,888 Charges for services 3,817 8,068 14,480 9, ,589 Miscellaneous 3, ,938 Total revenues 3,946 3,817 8,068 14, ,720 77,724,785 Expenditures Current: General government 5,890,896 Public safety 4,595 33,116 12,530,200 Public works 18,078 5,450,874 Community and economic development ,198 Health and human services 708,822 Cultore and recreation 8,624 7,048 2,237,014 Debt service Principal payments - 3,745,000 Interest and fiscal charges I 412,861 Total expenditures 495 4,595 8, ,048 33,116 32,319,865 Excess of revenues over (under) expenditures before other financing sources (uses) 3,451 (778} (556} (3,598} 2,799 32,604 45,404,920 Other financing sources (uses) Transfers to other funds 10,432 ( 44,304,450} Total other financing sources (uses) ( 44,304,450) Excess of revenues and other sources over (under) expenditures and other uses 3,451 (778} 9,876 (3,598) 2;]99_ 32,604 1,100,470 Fund balances - beginning ,508 5,077 11,578,468 Fund balances - ending $ 26,233 $ $ $ $ 7,876 $ $ 12,678,938 (Concluded) 166

226 SUPPLEMENTARY INFORMATION School Balance Sheet Funds Combined with School Unrestricted (School General Fund) for GASB 54 Purposes June 30, Total SRUF Hopkins Hill School GAAPBASIS Chrome book Ins Before Care Unrestricted ASSETS Cash $ 86,033 $ - $ - $ 86,033 Due from General fund 4,195,162-4,195,162 Due from other school funds 1,801, ,801,204 Intergovernmental receivables 73, ,855 Other receivables 200, ,109 Prepaid expenses 637, ,250 Total assets $ 6,993,623 $ - $ 990 $ 6,994,613 LIABILITIES AND FUND BALANCE Liabilities Accounts Payable $ 465,186 $ - $ - $ 465,186 Due to other funds 261,421 - (2,067) 259,354 Accrued salaries 5,240,800-1,723 5,242,523 Total liabilities 5,967,407 - (344) $ 5,967,063 Fund balance Non-spendable for: Prepaid items 637, ,250 Restricted for: Education programs 388,966-1, ,300 Unassigned Total fund balance 1,026,216-1,334 1,027,550 TOTAL LIABILITIES AND FUND BALANCE $ 6,993,623 $ - $ 990 $ 6,994,

227 SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures, Other Financing Sources (Uses) and Changes in Fund Balance Funds Combined with School Unrestricted (School General Fund) for GASB 54 Purposes June 30, Total SRUF Hopkins Hill School GAAPBASIS Chromebook Ins. Before Care Unrestricted Revenues State Aid $ 26,745,573 $ $ $ 26,745,573 Federal Aid 844, ,273 Charges for Service 888,549-19, ,205 Miscellaneous 2,368-2,368 Total revenues 28,480,763 19,656 28,500,419 Expenditures Salaries 43,646,710-17,601 43,664,311 Employee benefits 18,752, ,753,183 Purchased services 7,279,618-7,279,618 Supplies and materials 2,015, ,015,598 Capital outlay 569, ,020 Other 39, ,417 Total expenditures 72,302,825-18,322 72,321,147 Excess of revenues over (under) expenditures (43,822,062) - 1,334 (43,820,728) Other financing sources (uses) Operating transfers - Town appropriation 44,224, ,224,450 Transfer from Cell Tower Fund 70,000-70,000 Transfer from Restricted Grants 21, ,306 Transfer out to Chrome Book (80,112) 80,112 Transfer out to Restricted Grants (12,279) - - (12,279) Total other rmancing sources/(uses) 44,223,365 80,112-44,303,477 Excess (deficiency) of revenue and other sources over expenditures and other uses 401,303 80,112 1, ,749 Fund Balance - beginning 624,913 (80,112) - 544,801 Fund Balance - ending $ 1,026,216 $ - $ 1,334 $ 1,027,

228 OTHER SUPPLEMENTARY INFORMATION The Annual Supplemental Transparency Report Schedules required by the State of Rhode Island General Law and Annual Supplemental Transparency Report (MTP2) - Revenue Annual Supplemental Transparency Report (MTP2) - Expenditures Combining Schedule of Reportable Government Services with Reconciliation to MTP2 - Municipal Combining Schedule of Reportable Government Services with Reconciliation to MTP2 - Education Department Notes to Supplementary Information- Annual Supplemental Transparency Report (MTP2)

229 Town of Coventry Annual Supplemental Transparency Report (MTP2) Fiscal Year Ended June 30, 2018 Education REVENUE Municipal Department Current Year Levy Tax Collection $ 71,104,159 $ Last Year's Levy Tax Collection 406,101 Prior Years Property Tax Collection 141,997 Interest & Penalty 457,167 PILOT & Tax Treaty (excluded from levy) Collection 62,238 Other Local Property Taxes 11,625 Licenses and Permits 329,316 Fines and Forfeitures Investment Income 151,181 Departmental 1,388,577 Rescue Run Revenue Police & Fire Detail 107,881 Other Local Non-Property Tax Revenues 273,531 Tuition 877,931 Impact Aid Medicaid 844,273 Federal Stabilization Funds Federal Food Service Reimbursement 756,147 CDBG COPS Grants SAFER Grants Other Federal Aid Funds 123,768 2,421,298 MV Excise Tax Reimbursement & Phase-out 947,920 State PILOT Program Distressed Community Relief Fund Library Resource Aid 238,140 Library Construction Aid Public Service Corporation Tax 423,558 Meals & Beverage Tax I Hotel Tax 582,429 LEA Aid 23,190,085 Group Home Housing Aid Capital Projects Housing Aid Bonded Debt 1,313,730 State Food Service Revenue 20,087 Incentive Aid Property Revaluation Reimbursement Other State Revenue 496,143 70,781 Other Revenue 707,247 Local Appropriation for Education 44,224,450 Regional Appropriation for Education Supplemental Appropriation for Education Regional Supplemental Appropriation for Education Other Education Appropriation Rounding Total Revenue $ 78,559,461 $ 73,112,298 Financing Sources: Transfer from Capital Funds $ $ Financing Sources: Transfer from Other Funds 155,326 Financing Sources: Debt Proceeds Financing Sources: Other Rounding Total Other Financing Sources $ $ 155,

230 Town of Coventry Annual Supplemental Transparency Report (MTP2) Fiscal Year Ended June 30, 2018 General Social Centralized Public Parks and Pollee EXPENDITURES Government Finance Services IT Planning Libraries Works Rec Department Compensation- Group A 556, , , , , ,254 2,514, ,108 4,708,252 Compensation- Group B 357,707 Compensation- Group C Compensation -Volunteer Overtime- Group A 7,212 10, , ,773 Overtime- Group B 33,919 Overtime- Group C Police & Fire Detail 8,839 Active Medical Insurance- Group A 69,508 93, ,428 6,319 28, , , , ,261 Active Medical Insurance- Group B 45,320 Active Medical Insurance- Group C Active Dental insurance- Group A 5,557 7,670 7,832 2,690 6,322 38,578 6,904 39,811 Active Dental Insurance- Group B 2,966 Active Dental Insurance- Group C Payroll Taxes 49,238 43,311 34,936 8,105 17,870 48, ,556 55, ,711 Life Insurance 2,359 1,243 1, ,855 1,569 10,586 State Defined Contribution- Group A 412,000 State Defined Contribution- Group B State Defined Contribution- Group C Other Benefits- Group A 6, ,852 Other Benefits- Group B Other Benefits- Group C Local Defined Benefit Pension- Group A 82,850 55,233 82,850 9,206 18,411 55, ,455 92,055 4,852,387 Local Defined Benefit Pension -Group B 36,822 Local Defined Benefit Pension -Group C State Defined Benefrt Pension- Group A State Defined Benefrt: Pension- Group B State Defined Benefit Pension -Group C Other Defined Benefit I Contribution 66,492 44,841 51,879 2,987 5,973 17, ,987 29, ,997 Purchased Services 666, , ,665 1, ,012 12,188 47,133 Materials/Supplies ,434 6,142 32,451 2, ,537 13,396 39,225 66,327 Software Licenses 40,099 Capital Outlays 19,879 Insurance 547,206 Maintenance 8,300 7, ,079 26,377 82,756 Vehicle Operations 462,406 33, ,022 Utilities 411,565 29,052 16,679 62,386 9,619 31,386 Contingency Street lighting Revaluation Snow Removal-Raw Material & External Contracts 305,369 Trash Removal & Recycling 437,875 Claims & Settlements 1,837 Community Support Other Operation Expenditures 85,632 3, , ,336 22, , , , ,799 Local Appropriation for Education Regional Appropriation for Education Supplemental Appropriation for Education Regional Supplemental Appropriation for Education other Education Appropriation Municipal Debt- Principal Municipal Debt-Interest School Debt- Principal School Debt- Interest Retiree Medical Insurance- Total Retiree Dental Insurance- Total OPEB Contribution- Total Non-Qualified OPEB Trust Contribution Rounding Total Expenditures 3,020, ,931 1,331, , ,610 1,262,092 6,046,632 1,373,993 $ 12,761,

231 Town of Coventry Annual Supplemental Transparency Report (MTP2) Fiscal Year Ended June 30, 2018 Fire Centralized Public Safety Education Total Education EXPENDITURES Deeartment Dispatch Other Aeeropriation Debt OPEB Municipal Department Compensation- Group A $ 10,556,286 $ 35,487,002 Compensation- Group B 4,868 44, ,148 3,154,616 Compensation- Group C 6,561,526 Compensation -Volunteer Overtime- Group A 677,326 Overtime- Group B 33,919 Overtime- Group C 77,023 Police & Fire Detail 8,839 Active Medical insurance- Group A 1,768,668 4,754,100 Active Medical Insurance- Group B 8,960 14,933 69, ,460 Active Medical Insurance- Group C 1,376,954 Active Dental insurance- Group A 115, ,334 Active Dental Insurance- Group B 2,966 37,905 Active Dental Insurance- Group C 196,436 Payroll Taxes 355 4, ,992 1,094,376 Life Insurance 25, ,409 State Defined Contribution- Group A 412, ,043 State Defined Contribution -Group B 56,821 State Defined Contribution- Group C Other Benefits- Group A 97, ,184 Other Benefits- Group B 2,922 Other Benefits- Group C 1,241 Local Defined Benefit Pension- Group A 5,671, Local Defined Benefit Pension -Group B 27,617 46, ,466 71,025 Local Defined Benefrt: Pension -Group C 740,597 State Defined Benefrt: Pension- Group A 4,704,263 State Defined Benefit Pension- Group B 334,752 State Defined Benefit Pension- Group C other Defined Benefit I Contribution 727, ,129 Purchased Services 404, ,292,155 8,456,070 Materials/Supplies , ,853 Software licenses 40, ,193 Capital Outlays 19, ,044 Insurance 547, ,213 Maintenance 10, , ,842 Vehicle Operations 759, ,321 Utilities 560,687 1,291,899 Contingency Street Lighting Revaluation Snow Removal-Raw Material & External Contracts 305,369 Trash Removal & Recycling 437,875 Claims & Settlements 1,837 Community Support Other Operation Expenditures 2,356 1,731,988 91,440 Local Appropriation for Education 44,224,450 44,224,450 Regional Appropriation for Education Supplemental Appropriation for Education Regional Supplemental Appropriation for Education Other Education Appropriation Municipal Debt- Principal 1,480,000 1,480,000 Municipal Debt-Interest 919, ,305 School Debt- Principal 2,265,000 2,265,000 School Debt- Interest 492, ,806 Retiree Medica/Insurance- Total 102, , ,208 Retiree Dental insurance- Total 5,626 5,626 OPEB Contribution- Total Non-Qualified OPEB Trust Contribution Rounding Total Expenditures 446, ,155 $ 44,224,450 5,157, ,004 $ 77,406,750 $ 73,252,562 Financing Uses: Transfer to Capital Funds Financing Uses: Transfer to Other Funds 80,000 Financing Uses: Payment to Bond Escrow Agent Financing Uses: Other Total Other Financing Uses 80,000 Net Change in Fund Balance 1 1,072,711 15,062 Fund Balancel- beginning of year $11,563,296 $799,540 Funds removed from Reportable Government Services (RGS) (24,729) Funds added to Reportable Government Services (RGS) 1,759 Prior period adjustments 222,709 Misc. Adjustment Fund Balance 1 - beginning of year adjusted 11,786, ,570 Rounding Fund Balance 1 - end of year $ 12,858, ,632 1 and Net Position if Enterprise Fund activity is included in the transparency portal report. 171

232 Town of Coventry Combining Schedule of Reportable Government Services with Reconciliation to MTP2 Municipal Fiscal Year Ended June 30, 2018 Total Other Total Other Net Change Beginning Fund Restated Beginning Ending Per Audited Fund Financial Statements Total Financing Total Financing in Fund Fund Balance~ Prior Period Fund Balance.L Fund Balance" Fund Description Revenue Sources Expenditures Uses Balance 1 (Deficit) Adjustment (Deficit) (Deficit) Fund Balance'- per MTP-2 at June 30, 2017 $ 11,563,296 $ 11,563,296 Click it or Ticket (RGS Fund) ending fund balance removed for FY 17 Impaired Driving (RGS Fund) ending fund balance removed for FY 17 Speed Enforcement (RGS Fund) ending fund balance removed for FY 17 Speed Management (RGS Fund) ending fund balance removed for FY 17 Impaired Driving (RGS Fund) ending fund balance removed for FY 17 Prior period adjustments for FY , ,709 Fund Balance'- per MTP-2 at June 30, 2017 adjusted $ 11,563,296 $ 11,786,005 General Fund $ 77,724,785 $ $ 32,319,865 $ 44,304,450 1,100,470 $ 11,355, ,709 $ 11,578,468 $ 12,678,938 Recycling Grant (RGS Fund) Senior Center Operations (RGS Fund) Friends of Human Services (RGS Fund) 4,000 4,000 4,000 Project Friends (RGS Fund) 477, ,293 26, , , ,147 RISAPA Task Force- Bramley Grant (RGS Fund) 3,239 3,239 3,245 3,245 6,484 Drug Seizure (RGS Fund) 69, ,741 (54,226) 37,151 37,151 (17,075) Teen Center Operations (RGS Fund) 1,052 (1,052) 6,878 6,878 5,826 Byrne Grant (RGS Fund) 15,205 15,205 (580) (580) (580) Grant in Aid/Resource Sharing (RGS Fund) 203, ,140 (539) (539) (539) Help America Vote Act (RGS Fund) Traffic Grant (RGS Fund) Bulletproof Vests (RGS Fund) 6,389 6,389 DUI Speed Click or Ticket (RGS Fund) 32,659 24,703 7,956 (7,666) (7,666) 290 Food Bank (RGS Fund) 15,091 24,556 (9,465) 53,089 53,089 43,624 Faith in Action (RGS Fund) 11,625 12,356 (731) 10,120 10,120 9,389 Totals per audited financial statements $ 78,559,461 $ $ 33,182,300 $ 44,304,450 $ 1,072,711 $ 11,563,296 $ 222,709 $ 11,786,005 $ 12,858,716 Reconciliation from financial statements to MTP2 Reclassify transfer of municipal appropriation to Education Department as expenditure on MTP2 $ $ $ 44,224,450 $ (44,224,450) $ $ $ $ $ Rounding Totals Per MTP2 $ 78,559,461 $ $ 77,406,750 $ 80,000 $ 1,072,711 $ 11,563,296 $ 222,709 $ 11,786,005 $ 12,858,716 1 and Net Position if Enterprise Fund activity is included in the transparency portal report. 172

233 Town of Coventry Combining Schedule of Reportable Government Services with Reconciliation to MTP2 Education Department Fiscal Year Ended June 30, 2018 Total Other Total Other Net Change Beginning Fund Restated Beginning Ending Per Audited Fund Financial Statements Total Financing Total Financing in Fund Fund Balance' Prior Period Fund Balance' Fund Balance' Fund Description Revenue Sources Expenditures Uses Balance 1 (Deficit) Adjustment (Deficit) (Deficit) Fund Balance'- per MTP-2 at June 30, 2017 $ 799,540 $ 799,540 Fund is Special Revenue Fund in financial statements not in MTP2 included in FY 17 1,759 1,759 Object code 7000 series in financial statements not MTP2 in FY 17 (19,510) (19,510) Miscellaneous variances in FY 17 (5,219) (5,219) Fund Balance'- per MTP-2 atjune 30, 2017 adjusted $ 776,570 $ 776,570 School Unrestricted Fund $ 28,500,419 $ 44,315,756 $ 72,321,147 $ 12,279 $ 482,749 $ 544,801 $ $ 544,801 $ 1,027,550 School Special Revenue Funds-Restricted 2,538,151 7,036 2,829,067 21,306 (305,186) 472, , ,763 School Food Service- reported as Non-Major Governmental Fund 1,428,231 1,543,174 (114,943) (296,466) (296,466) (411,409) School Improvement Capital Fund -reported as Non-Major Governmental Fund 57,375 (57,375) 57,375 57,375 School Capital Project Fund-Impact Fees 90,569 88,480 2,089 (2,089) (2,089) Totals per audited financial statements $ 32,466,801 $ 44,413,361 $ 76,839,243 $ 33,585 $ 7,334 $ 776,570 $ $ 776,570 $ 783,904 Reconciliation from financial statements to MTP2 Municipal appropriation for Education reported as a transfer in financial statements but as revenue in MTP2 and UCOA report. $ 44,224,450 $ (44,224,450) $ $ $ $ $ $ $ State contributions on behalf of teacher pensions reported as revenue and expenditures in financial statements only. (3,556,086) (3,556,086) Transfer from School Unrestricted Fund to Fund Impact Fees reported in financial statements but not reported in UCOA report or MTP 2. (5,243) (5,243) Transfer from School Unrestricted Fund to to School Restricted Funds reported in financial statements but not reported in UCOA report or MTP 2 (7,036) (7,036) Transfers From School Restricted Funds to School Unrestricted Fund reported in financial statements but not reported in UCOA report or MTP 2 (21,306) (21,306) Old accounts receivable was written off and reported as a reduction of revenue in MTP2 and UCOA report but not in financial statements Fund Feinstein. (2,000) (2,000) (2,000) Old accounts receivable was written off and reported as reduction of revenue in MTP2 and UCOA report but as a write-off expenditure in financial statements Fund New England Dairy. (1,211) (1,211) (0) (0) Fund expenditures in object code 7000 series are included in financial statements but not reported in the MTP2 and UCOA report. (10,778) 10,778 10,778 Hopkins Hill Before Care Fund combined in financial statements with School Unrestricted Special Revenue Fund (see page 169) for GASB 54 purposes, but not in MTP2 and UCOA reports since those reports exclude funds coded as Agency Funds. (19,656) (18,322) (1,334) (1,334) Miscellaneous variances between MTP2 & financial statements (284) Rounding Totals Per MTP2 $ 73,112,298 $ 155,326 $ 73,252,562 $ $ 15,062 $ 776,570 $ $ 776,570 $ 791,632 Reconciliation from MTP2 to UCOA Funds recorded as transfer in MTP2 but excluded in UCOA report 155,326 (155,326) Totals per UCOA Validated Totals Report $ 73,267,624 $ 73,252,562 1 and Net Position if Enterprise Fund activity is included in the transparency portal report. 173

234 NOTE 1. Basis ofpresentation Notes to Supplementary Information Annual Supplemental Transparency Report (MTP2) June 30, 2018 The Annual Supplemental Transparency Report (MTP2) is a supplemental schedule required by the State ofrhode Island General Laws and This supplementary schedule included within the audit report is part of a broader project to create a municipal transparency portal (MTP) website to host municipal fmancial information in a centralized location. The format of the Annual Supplemental Transparency Report (MTP2) was prescribed by the State Department of Revenue (Division of Municipal Finance), Office of the Auditor General, and the Department of Education. NOTE 2. Reportable Government Services Data consistency and comparability are among the key objectives of the State's Municipal Transparency portal. Consistent with that goal, the State has defined "reportable government services", RGS, to include those operational revenues, expenditures, and transfers related to activities which are essential to the achievement of municipal operations. The determination of RGS may be different from the activities included within the legally adopted budget of the municipality. In practice, some communities report certain RGS in separate funds (e.g., special revenue funds, enterprise funds) rather than the municipality's general fund. The Annual Supplemental Transparency Report (MTP2) includes a reconciliation to the fund level statements. NOTE 3. Allocations The State reporting requires expenditures to be reported by departments, as defined by the State. Some of the departmental groupings are not consistent with the departments reflected in the Town's budget and accounting system. To report these costs, the Town's made allocations of costs to the State's departmental groupings based on a reasonable basis. NOTE 4. Employee Groups - Compensation and Benefit Costs Compensation includes salaries, longevity, stipends, clothing allowance/maintenance, shift differential, out-of-rank, holiday pay and bonuses. For Public Safety departments (i.e., police, fire, and centralized dispatch) and the Education Department, compensation and most benefits costs are reported in the following employee groupings: Group A: This group consists of employees who serve the primary function of the department. Police Department - police officers (e.g., uniform personnel - including, leadership positions) Fire Department - fire fighters (e.g., uniform personnel - including, leadership positions) Centralized Dispatch Department - civilian dispatchers only Education Department - professional staff providing direct services to students 174

235 Notes to Supplementary Information Annual Supplemental Transparency Report (MTP2) June 30, 2018 For the remaining departments - all employees' compensation and benefits are reported under Group A Group B: For Police and Fire Departments, compensation and benefits paid to its administrative employees and civilian dispatch employees are reported under Group B. The Education Department reports compensation and benefits paid to executive/mid-level educational administration employees under Group B. Group C: This group is only used for the Education Department and it includes administrative and support staff. Other post-employment benefits (OPEB) are not reported by employee groups on the MTP2. They are reported in total as either (1) contributions to a qualified OPEB trust or (2) the amount paid for medical and dental insurance for retirees when an OPEB trust fund has not been established. The detail employee group information for the Education Department can be found on the State's Municipal Transparency portal website. NOTE 5. Education Revenue and Expenditures The revenues and expenditures presented on the MTP2 under the Education Department is consistent with existing Uniform Chart of Accounts (UCOA) guidelines. Each MTP account code has been mapped to the corresponding UCOA code or group ofucoa codes to facilitate the preparation of the MTP reporting. Additional guidance and definitions regarding the State's Municipal Transparency Portal can be found on the State Division of Municipal Finance website: 175

236 STATISTICAL SECTION The Statistical Schedules differ from other financial statement presentations because they generally disclose more than one fiscal year and may present non-accounting data such as social and economic data and financial trends of the Town.

237 Schedule of Tax Collections For the Fiscal Year Ended June 30, 2018 Total (a) Real Estate and Balance Additions Refunds and Total Balance Property Tax Uncollected Assessment Adjustments Abatements Adjustments Available for Uncollected Assessment of 7/1/2017 Collection Collections 6/30/ $ - $ 66,948,511 $ 139,156 $ (406,265) $ 188,959 $ 66,870,361 $ 66,411,809 $ 458, ,205 1,862 (9,605) 18, , , , , (2,076) (14) 174,887 24, , , (3,147) 200,852 10, , , (21,491) 143,371 7, , ,915 (4,856) 149,059 8, , ,329 (3,974) (577) 92,778 8,854 83, ,307 - (2,639) 76,668 7,349 69, ,302 - (2,360) 52,942 4,475 48, ,572 - (1,752) - 45,820 4,032 41, ,061 (1,286) 21,775 1,421 20, ,158 34,158 1,377 32, and prior 183, ,009 5, ,494 TOTAL PROPERTY $ 1,680,111 $ 66,948,511 $ 141,560 $ (459,451) $ 207,226 $ 68,517,957 $ 66,817,907 $ 1,700,050 Total Auto Excise Tax Balance Additions Authorized Total Balance Assessment Uncollected Assessment Adjustments Abatements Transfers and Available for Uncollected of 7/1/2017 Adjustments Collection Collections 6/30/ $ - $ 4,924,475 $ 3,500 $ (8,205) $ 28,403 $ 4,948,173 $ 4,719,688 $ 228, ,098 - (3,761) , , , , (3,087) ,095 25,041 86, ,769 (4,409) 49 82,409 9,100 73, ,171 (2,803) 76,368 8,290 68, ,800 - (1,284) 74,516 8,455 66, ,368 - (1,589) 69,779 3,780 65, ,684 - (1,368) 24, , ,812 (1,433) 27, , ,156 (622) 35, , ,041 (309) 34, , ,189 (1,019) 32, , and prior 3, ,608 1,030 3,578 TOTAL AUTO $ 895,047 $ 4,924,475 $ 3,500 $ (29,889) $ 30,195 $ 5,823,328 $ 4,967,042 $ 856,286 TOTAL PROPERTY TAX AND AUTO EXCISE TAX Is 2,575,158 $ 71,872,986 $ 145,060 $ (489,340) $ 237,421 $ 74,341,285 $ 71,784,949 $ 2,556,

238 Supplementary Information Schedule of Assessed Property Valuations, Exemptions and Tax Levy For the Year Ended June 30, 2018 December 31, 2016 December 31, 2015 December 31, 2014 December 31, 2013 December December 31,2011 December December December 31, 2008 December 31, 2007 Assessed Property Valuations: Real Property $ 3,197,529,325 $ 3,003,102,100 $ 2,973,343,095 $ 2,952,373,605 $ 3,176,709,030 $ 3,146,610,970 $ 3,098,994,584 $ 3,688,440,259 $ 3,679,277,325 $ 3,661,025,184 Tangibles 71,394,235 67,006,090 64,485,885 63,607,365 61,396,945 60,180,870 94,324, ,421, ,794, ,558,916 Motor Vehicles 305,582, ,551, ,603, '736, , ,336, ,253, ,975, ,618 3,574,506,108 3,409,659,491 3,366,432,221 3,337,717,902 3,558,316,885 3,525,429,693 3,502,655,042 4,101,115,397 4,047,047,070 4,060,718,718 Less Exemptions: Blindness 346, , , , , , , , , ,830 Elderly and Disabled 21,468,561 21,183,296 20,897,200 20,510,000 20,382,000 20,106,268 19,792,580 19,752,580 19,488,580 19,472,580 Gold Star Mothers 6,000 6,000 9,000 9,000 9,000 9,000 9,000 15,000 15,000 18,000 Rectories and Parsonages 453, ,400 State Veterans 114, , , , , , , , , ,795 Veterans 15,030,165 15,701,466 16,270,500 16,763,300 17,546,300 18,127,946 18,640,480 18,959,180 19,303,080 19,750,880 POW's 15,000 15,000 15,000 15,000 15,000 30,000 30,000 30,000 30,000 30, % Disabled Veterans 53,000 55,000 55,000 47, , , , , , ,400 Variable 14,397,533 15,385,144 15,407,406 15,517,906 11,296,810 10,000 10,000 2,085,572 Specially Adapted Housing 12,300 30,300 Motor Vehicle Phase-out 42,832,347 42,773,022 48,306,003 47,830,923 47,139,090 45,879,416 42,749, ,838,839 Tax ReliefProgram , ,978,591 21, ,699 23,471,310 24,368,374 26,616,550 Total Exemptions , , ,972, ,892, ,049 67,024,735 NET TAXABLE ASSESSED PROPERTY VALUATIONS $ 3,463,244,373 $ 3,295,901,232 $ 3,245,885,048 $ 3,217,528,723 $ 3,439,672,048 $ 3,418,314,319 $ 3,397,682,946 $ 3,872,223,379 $ 3,982,672,021 $ 3,993,693,983 Tax Levy: Real and personal property and tangible tax $ 66,948,511 $ 64,756,309 $ 62,359,964 $ 60,678,892 $ 59,430,967 $ 57,215,357 $ 56,864,263 $ 57,044,768 $ 56,830,394 $ 56,350,234 Motor vehicle tax , , ,133,679 5, ,995,985 2,518, ,732 2,756,369 TOTAL TAXES ASSESSED, NET OF EXEMPTIONS $ 71,872,986 $ 70,318,224 $ 67,613,677 $ 65,812,571 $ 64,549,068 $ 62,327,612 $ 61,860,248 $ 59,562,835 $ 59,014,126 $ 59,106,

239 TAX COLLECTOR'S ANNUAL REPORT For the Fiscal Year Ended June 30, 2018 TAX CURRENT YEAR BALANCE YEAR END Jull1, 2017 ASSESSMENT 2017 $ $ 71,872, , , , , , , , , , , , &Prior 187,848 REFUNDS/ ADDITIONS ABATEMENTS ADJUSTMENTS 142,656 $ (414,470) $ 217,362 1,862 (13,366) 19, (5,163) (7,556) (24,294) (6,140) - (5,563) (577) - (4,007) (3,793) (2,374) - (1,595) (1,019) 769 AMOUNT CURRENT TOBE YEAR COLLECTED COLLECTIONS June 30,2018 $ 71,818,534 $ 71,131,497 $ 687, , , , ,982 49, , ,261 19, , ,739 15, , ,575 16, , ,557 12, , ,984 8,056 92,928 80,321 5,121 75,200 81,354 4,970 76,384 56,507 2,266 54,241 66,328 1,427 64, ,617 6, ,072 $ 2,575,158 $ 71,872,986 $ $ (489,3402 $ 237,421 $ 74,341,285 $ 71,784,949 $ 2,556,336 SCHEDULE OF MOST RECENT NET ASSESSED PROPERTY VALUE BY CATEGORY RECONCILIATION OF CURRENT YEAR PROPERTY TAX REVENUE DESCRIPTION VALUATIONS OF PROPERTY December 31,2016 Real property $ 3,197,529,325 Motor vehicles 305,582,548 Tangible personal 71,394,235 TOTAL 3,574,506,108 Less exemptions 111,261,735 NET ASSESSED VALUE $ 3,463,244,373 $ $ LEVY 67,726,597 5,729,681 1,497,632 74,953,910 (3,080, ,872,986 Current year collections $ 71,784,949 Less: Refunds, adjustments (160,670) July- August 2018 Collections Subject to 60- day FY 2018 Accrual 235,776 July- August 2017 Collections Subject to 60 - day FY 2017 Accrual (207,798) Current Year Property Tax Revenue $ 71,652,

240 Schedule of long-term liabilities - Primary Government For the fiscal year ended June 30, 2018 Date of Issuance Interest Rate Date of Maturity Outstanding Maturities Outstanding Interest Authorized July 1, 2017 Additions During Year June 30, 2018 Paid General Obligation Bonds Payable GO Bond Refunding GO Bond RIHEBC GO Bond GO Bond GO Bond GO Bond General obligation bonds payable Issuance premium on bonds Total general obligation bonds payable 10/27/11 3/17/15 4/ / /16/16 3/30/ % to 3.375'X % to 4.00% 3/15/ % to 4.00% 04/ % to 4.00% 04/ % 3/15/ % to 4.00% 3/15/37 $ 13,770,000 6,815,000 $ - $ 1,405,000 $ 5,410,000 $ 191,675 15,860,000 14,685, ,000 14,070, ,756 12,520,000 9,490, ,000 8,630, ,131 4,330,000 3,260, ,000 2,980, ,531 5,880,000 5,855, ,000 5,550, ,650 I 5,100,000 5,100, ,000 4,910, ,950 57,460,000 45,205,000 3,655,000 41,550,000 1,387, ,246,028 78,865 1,167,163 57,460,000 46,451,028 3,733,865 42,717,163 1,387,693 Loans Payable Rl Infrastructure Bank Rl Infrastructure Bank Total loans payable Total general obligation bonds and loans payable 9/3/14 5/28/15.26% to 2.01% 9/ % to 2.55% 9/ , ,000-32, ,000 5, , ,009 54,567 58, ,576 17,186 I 1,24o,ooo l,05l,oo9 54,567 9o,ooo 1,015,576 22,826 I I 58,700,000 47,502,037 54,567 3,823,865 43,732,739 1,410,519 I Sewer Loans Payable Rl Infrastructure Bank Rl Infrastructure Bank Rl Infrastructure Bank Rl Infrastructure Bank Rl Infrastructure Bank Rl Infrastructure Bank All American Investment All American Investment 12/6/06 12/12/07 6/28/12 6/ /6/09 9/3113 5/1117 5/ % 9/ % to 5.08% 9/ %-2.99% 9/ %- 3.23% 9/1134.7o/o-2.64% 9/ % 9/ % 5/15/ % 5/15/27 3,205,000 1,905, ,000 1,747,000 34,767 5,000,000 3,231, ,000 2,991,000 56,482 2,400,000 2,181, ,000 2,070,000 65,859 2,400,000 2,201, ,000 2,101,000 51,914 2,564,519 1,804, ,777 1,686,950 44,293 8,225,000 6,960, ,000 6,505, , , ,000 63, ,921 28, , ,000 35, ,638 23,625 Total Sewer loans payable 1 24,994,519 19,482,727-1,28o,218 18,202, ,83n Total bonds and loans payable 1 $- 83,694,519 66,984,764 54,567 5,1o4,o83 61,935,248 2,025,350 1 Accrued expenses Compensated absences Net pension liability Net OPEB liability 3,956, ,981,156 17,577, ,743 1,602, ,643 4,125, ,583,565 17,107,002 n/a n/a n/a Total accrued expenses Total long-term liabilities 1 181,515,591 1,771, , ,816,1oo ,5oo,35s $ 1,825,719 $ 5,574,726 $ 244~

241 COMPUTATION OF LEGAL DEBT MARGIN June 30,2018 Grossed assessed value Less: exemptions and adjustments $ 3,574,506,108 (111,261,735) Total taxable assessed value I $ 3,463,244,373 I Debt Limit - 3 percent of total assessed value Amount of debt applicable to debt limit: Total bonded debt-governmental bonds Legal debt margin $ 103,897,331 27,510,000 I $ 76,387,331 I 180

242 SINGLE AUDIT FOR THE YEAR ENDED JUNE 30, 2018

243 BAXTER DANSEREAU & AssociATEs, LLP Accounting, Consulting & Tax Services Partners WilliamJ. Baxter, Jr., CPA Paul L. Dansereau, CPA 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 The Honorable President and Members of the Town Council Town of Coventry, Rhode Island INDEPENDENT AUDITOR'S REPORT 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 Coventry, Rhode Island as of and for the year ended June 30, 2018, and the related notes to the frnancial statements, which collectively comprise the Town of Coventry's basic frnancial statements, and have issued our report thereon dated February 14, 2019 Internal Control Over Financial Reporting In planning and performing our audit of the frnancial statements, we considered Town of Coventry's internal control over frnancial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the frnancial statements, but not for the purpose of expressing an opinion on the effectiveness of Town of Coventry's internal control. Accordingly, we do not express an opinion on the effectiveness oftown of Coventry's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's frnancial 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. Compliance and Other Matters As part of obtaining reasonable assurance about whether Town of Coventry's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of frnancial statement amounts. However, providing an opinion on compliance with those provisions was not an Quaker Lane, Suite 203 West Warwick, RI T: F:

244 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 performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. 182

245 BAXTER DANSEREAU & AssociATEs, LLP Accounting, Consulting & Tax Services Partners WilliamJ. Baxter, Jr., CPA PaulL. Dansereau, CPA REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE INDEPENDENT AUDITOR'S REPORT The Honorable President and Members of the Town Council Town of Coventry, Rhode Island Report on Compliance for the Major Federal Program We have audited the Town of Coventry's compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the Town of Coventry, Rhode Island's major federal programs for the year ended June 30, The Town of Coventry's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the Town of Coventry, Rhode Island's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Town of Coventry, Rhode Island's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Town of Coventry, Rhode Island's compliance. 207 Quaker Lane, Suite 203 West Warwick, IH%2893 T: F:

246 Opinion on Each Major Federal Program In our opinion, the Town of Coventry, Rhode Island, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, Report on Internal Control Over Compliance Management of the Town of Coventry, Rhode Island, is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Town of Coventry, Rhode Island's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Town of Coventry, Rhode Island's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. axter, Dansereau & Associates, LLP West Warwick, Rhode Island February 14,

247 Schedule of Expenditures of Federal Awards For the Fiscal Year Ended June 30, 2018 Federal Pass-Through CFDA Entity Federal Grantor/Pass-through Grantor/Program or Cluster Title Number ldenti!iing Number Passed Through to Subreci(!ients Ex(!enditures U.S. Department of Agriculture: Passed through State of Rhode Island Department of Education: Child Nutrition Cluster: School Breakfast Program N/A National School Lunch Program N/A Special School Milk Program for Children NIA Child Nutrition Discretionary Grants Limited Availablity NIA Food Commodity Program- See Note N/A Total Child Nutrition Cluster Fresh Fruit and Vegetable Program N/A Total U.S. Department of Agriculture U.S. Department of Housing and Urban Development: Pass-Through State of Rhode Island Division of Planning, Office of Housing and Community Development Community Development Block Grant NIA Total U.S. Department of Housing and Urban Development U.S. Department of Justice: Pass-Through State of Rhode Island Governor's Justice Commission Bulletproof Vests Partnership Program NIA Edward Byrne Memorial Justice Assistance Grant NIA Total U.S. Department of Justice U.S. Department of Transportation Pass-through State of Rhode Department of Transportation Alcohol Impaired Driving Countermeasures Incentive Grants I NIA Total U.S. Department of Transportation U.S. Environmental Protection Agency Direct Award ARRA- Capitalization Grant for Clean Water State Revolving Fund NIA Total U.S. Environmental Protection Agency U.S. Department of Education: Passed through State of Rhode Island Department of Education: Title I Grants to Local Education Agencies Career & Technical Education - Basic Grants to States Improving Teacher Quality State Grants Consolidated Grant to Outlying Areas NIA Special Education Cluster: Special Education Grants to States Special Education Preschool Grants Total Special Education Cluster: Total U.S. Department of Education U.S. Department of Health & Human Services Passed-through the State of Rhode Island Department of Behavioral Healthcare Medical Assistance Program NIA Total U.S. Department of Health & Human Services U.S. Department of Homeland Security Pass-through State of Rhode Island Emergency Management Agency: Hazard Mitigation Grant NIA Emergency Management Performance Grants NIA Homeland Security Grant Program NIA Total U.S. Department of Homeland Security Total Expenditures of Federal Awards The accompanying notes are an integral part of this schedule. $ $ 131, , ,140 91, ,804 31,632 $ $ 855,436 $ $ 49,528 $ $ 49,528 $ $ 6,339 15,205 $ $ 21,544 $ $ 24,703 $ $ 24,703 $ $ 14,537 $ $ 14,537 $ $ 574, , ,174 3,919 1,382,892 29,113 1,412,005 $ $ 2,421,076 $ $ 451,293 $ $ 451,293 2,599 13,363 25,000 $ $ 40,962 $ $ 3 879,079 concluded 185

248 Schedule of Findings and Questioned Costs For The Year Ended June 30,2018 SECTION I- SUMMARY OF AUDITORS' RESULTS Financial Statements Type of auditor's report issued: Unmodified Internal control over financial reporting: Material weakness ( es) identified? yes X no Significant deficiency (ies) identified? yes ~ nonereported Noncompliance material to financial statements noted? yes X no Federal Awards Internal control over major federal programs: Material weakness (es) identified? yes X no Significant deficiency (ies) identified? yes ~ none reported Type of auditor's report issued on compliance for major programs: Any audit findings disclosed that are required to be reported in accordance with 2 CFR (a)? Identification of major programs: Unmodified yes X no CFDA Number(s) Name of Federal Program or Cluster Special Education Cluster Special Education Grants to States Special Education Preschool Grants Medical Assistance Program Dollar threshold used to distinguish between Type A and Type B programs: Auditee qualified as low risk auditee? SECTION II- FINANCIAL STATEMENT FINDINGS SECTION III- FEDERAL A WARDS FINDINGS AND QUESTIONED COSTS $ 750,000 yes X no yes X none yes X none 186

249 Schedule of Findings and Questioned Costs For The Year Ended June 30,2018 (continued) SECTION II- FINDINGS RELATING TO THE FINANCIAL STATEMENT AUDIT AS REQUIRED TO BE REPORTED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS A. Significant Deficiency in Internal Control None Reported. B. Compliance None Reported. SECTION III- FINDINGS AND QUESTIONED COST FOR FEDERAL A WARDS A. Findings None Reported B. Questioned Costs None Reported 187

250 Schedule of Prior Year Findings and Questioned Costs For the Year Ended June 30,2018 PRIOR YEAR FINDINGS AND QUESTIONS COSTS FOR FEDERAL AWARDS A. Findings None Reported B. Questioned Costs Finding Material Weakness -New Finding MEDICAL ASSISTANCE PROGRAM Federal Award Agency: U.S. Department of Health and Human Services Passed through- State of Rhode Island Department of Health Award Year: Fiscal Year ended 6/30/2018 Condition During or audit it was noted that some of the fmal time sheets submitted to the payroll clerk did not agree to the original time sheets prepared by the employee or service provider. fu each case the time worked for that employee was increased. Time sheets were altered prior to their final submission to the payroll clerk. Also we noted during our inquiry and testing of compliance program officials could not provide us with documentation that would support the billing for services provided to their clients. This documentation would have been used to bill the State of Rhode Island (BHDDH) for reimbursement and also support the amount of remittance received by the program. It appeared that the program was billing the state for the maximum allowed for each client they serviced. Criteria The Town of Coventry maintains a federally funded health care services organization through the Coventry Resource and Senior Center called "Project Friends". This program works in coordination with the State of Rhode Island Department of Behavioral Healthcare, Developmental Disabilities, and Hospitals (BHDDH) and is regulated by the "Rules and Regulations for the Licensing of Developmental Disability Organizations. Under the Federal Uniform Guidance ( Improper Payment) and state laws (Section 9.0- Program Documentation Requirements of the Rules and Regulations for the Licensing of Developmental Disability Organizations) the provider shall maintain program documentation and records for all services provided and for all request for reimbursement under the program. Questioned Cost: Unknown Cause: We were not able to discuss the reasons for the missing documentation or for the discrepancies in the employee's timesheets due to the fact that the former program director had since retired and other individuals were not able to provide us with complete answers. It appears from our review of the documentation that was available time sheets were intentionally changed to increase the pay of certain individuals and billing for services were arbitrarily charged for program clients. 188

251 Schedule of Prior Year Findings and Questioned Costs For the Year Ended June 30,2018 SECTION Ill- FINDINGS AND QUESTIONED COST FOR FEDERAL AWARDS (continued) Effect: The State of Rhode Island and the Federal Government program may have been overcharged for program services related to the clients they served. Auditor's Recommendation: Town officials should meet with current employees who are running the program and develop written procedural controls that provide for the safeguarding and accurate reporting of federal funds and there request for reimbursement. These controls should follow the federal and state guidelines noted in the criteria above. As with any well written internal control procedure it is the execution of the process and its follow up that makes the system work. Views of Responsible Officials and Planned Corrective Actions: During the course of the audit, the DHS staff fully cooperated with the auditor; however some documentation was missing and the former director was retired and not available to answer questions that the then-current DHS staff didn't know the answers to. Immediately following the departure of the former DHS Director, Town officials met in early July 2018 with the then Interim Director regarding billing and payroll inconsistencies within the Project Friends program. Written procedures were developed and implemented in July 2018 that includes the following: All Project Friends employees will use a time clock at the start and end of their work shift when working during normal work hours. A biometric timeclock was installed in at DHS in August The time clock is not able to be utilized for the family support functions that take place after hours during the week and/or weekends. Employees involved in these support functions are now required to complete case notes on the family support date and sign out sheets for the after hours worked. Both the supervisor and coordinator of the Project Friends program shall sign all the case notes to insure the work being claimed has actually been completed. All program documentation and records for all services provided as well as all requests for reimbursement under the program shall be kept in a manner that is consistent with the requirements set forth by the Federal Uniform Guidance ( Improper Payment) and state laws (Section Program Documentation Requirements of the Rules and Regulations for the Licensing of Developmental Disability Organizations). Any deviation from the schedule needs to be authorized by the Project Friends supervisor who also now is responsible for the billing. Employees and client families may also receive a call from the administrative assistant or Project Friends supervisor during the family support time to verify the hours are in fact being provided. 189

252 Schedule of Prior Year Findings and Questioned Costs For the Year Ended June 30, 2018 SECTION III- FINDINGS AND QUESTIONED COST FOR FEDERAL AWARDS (continued) Mileage reimbursement claims submitted by Project Friends employees must be made on an official Town Mileage Reimbursement Request Form. The mileage to and from each individual trip must be stated. When signing the Form, the Project Friends Supervisor and DHS Director (or his/her designee) is attesting that the mileage is accurate. All future hiring in the Project Friends program is now subject to approval by the Town of Coventry Human Resources department. On a go-forward basis, the Town is confident that the creation, implementation, and execution of these new procedures/ controls will provide for the safeguarding of information and the accurate reporting of all Project Friends activities. Status: Implemented 190

253 Notes to Schedule of Expenditures of Federal Awards June 30,2018 NOTE 1 -BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the schedule) includes the federal grant activity of the Town of Coventry, Rhode Island under programs of the federal government for the year ended June 30, The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of the Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Town of Coventry, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Town of Coventry, Rhode Island. NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of the Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein certain types of expenditures are not allowable or are limited as to reimbursement. NOTE 3 -Indirect Cost Rates The Town of Coventry has elected to use the 10 percent de-minimis indirect cost rate as allowed under the Uniform Guidance when applicable. NOTE 4 -Non-Cash Assistance- School Lunch Commodities Nonmonetary assistance is reported in the Schedule of Expenditures of Federal Awards at the cost of commodities provided by the School Lunch Program. The total federal share of these commodities was $91,817 for the fiscal year ended June 30, The amounts have been included in the schedule of expenditures of federal awards under CFDA

254 APPENDIX C PROPOSED FORM OF LEGAL OPINION FOR THE BONDS

255 APPENDIX C One Financial Plaza Suite 2800 Westminster Street Providence, RI Telephone: Fax: [Date of Closing] Town of Coventry, Rhode Island 1670 Flat River Road Coventry, Rhode Island Ladies and Gentlemen: $7,050,000 Town of Coventry, Rhode Island General Obligation Bonds, 2019 Series A (the "Bonds") We have acted as bond counsel to the Town of Coventry, Rhode Island (the Town ) in connection with the issuance of the Bonds. In such capacity, we have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon representations and covenants of the Town in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based on our examination, we are of the opinion under existing law, as follows: 1. The Bonds are valid general obligations of the Town, and all taxable property in the Town is subject to taxation without limitation as to rate or amount to pay the Bonds and the interest thereon. 2. Interest on the Bonds is excluded from the gross income of the owners of the Bonds for federal income tax purposes. In addition, interest on the Bonds is not a specific preference item for purposes of the federal individual alternative minimum tax. In rendering the opinions set forth in this paragraph, we have assumed compliance by the Town with all requirements of the Internal Revenue Code of 1986 that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, and continue to be, excluded from gross income for federal income tax purposes. The Town has covenanted to comply with all such requirements. Failure by the Town to comply with certain of such requirements may cause interest on the Bonds to become included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. We express no opinion regarding any other federal tax consequences arising with respect to the Bonds. C-1

256 Town of Coventry, Rhode Island [Date of Closing] Page 2 3. Income from the Bonds is free from taxation by the State of Rhode Island or any political subdivision or other instrumentality of the State although the income therefrom may be included in the measure of Rhode Island estate taxes and certain Rhode Island corporate and business taxes. We express no opinion regarding any other Rhode Island tax consequences arising with respect to the Bonds or any tax consequences arising with respect to the Bonds under the laws of any state other than Rhode Island. This opinion is expressed as of the date hereof, and we neither assume nor undertake any obligation to update, revise, supplement or restate this opinion to reflect any action taken or omitted, or any facts or circumstances or changes in law or in the interpretation thereof, that may hereafter arise or occur, or for any other reason. The rights of the holders of the Bonds and the enforceability of the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights heretofore or hereafter enacted to the extent constitutionally applicable, and their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Very truly yours, LOCKE LORD LLP C-2

257 APPENDIX D PROPOSED FORM OF CONTINUING DISCLOSURE CERTIFICATE FOR THE BONDS

258 APPENDIX D CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the Disclosure Certificate ) is executed and delivered by the Town of Coventry, Rhode Island (the Issuer ) in connection with the issuance of its $7,050,000 General Obligation Bonds, 2019 Series A (the Bonds ). The Issuer covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule. SECTION 2. Definitions. For purposes of this Disclosure Certificate the following capitalized terms shall have the following meanings: Annual Report shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. Listed Events shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. MSRB shall mean the Municipal Securities Rulemaking Board as established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934, or any successor thereto or to the functions of the MSRB contemplated by this Disclosure Certificate. Filing information relating to the MSRB is set forth in Exhibit A attached hereto. Owners of the Bonds shall mean the registered owners, including beneficial owners, of the Bonds. Participating Underwriter shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. Rule shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. SECTION 3. Provision of Annual Reports. (a) The Issuer shall, not later than nine (9) months after the end of each fiscal year, commencing with the fiscal year ending June 30, 2018, provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted when available separately from the balance of the Annual Report. (b) If the Issuer is unable to provide to the MSRB an Annual Report by the date required in subsection (a), the Issuer shall send a notice to the MSRB, in substantially the form attached as Exhibit B. D-1

259 SECTION 4. Content of Annual Reports. The Issuer s Annual Report described in Section 1 shall contain or incorporate by reference the following: (a) quantitative information for the preceding fiscal year of the type presented in the Issuer s Official Statement dated March 6, 2019 relating to the Bonds regarding (i) the revenues and expenditures of the Issuer relating to its operating budget, (ii) capital expenditures, (iii) fund balances, (iv) property tax information, (v) outstanding indebtedness and overlapping debt of the Issuer, (vi) pension obligations of the Issuer, and (vii) other post-employment benefits liability of the Issuer, and (b) the most recently available audited financial statements of the Issuer, prepared in accordance with generally accepted accounting principles. If audited financial statements for the preceding fiscal year are not available when the Annual Report is submitted, the Annual Report will include unaudited financial statements for the preceding fiscal year and audited financial statements for such fiscal year shall be submitted when available. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which (i) are available to the public on the MSRB internet website or (ii) have been filed with the Securities and Exchange Commission. The Issuer shall clearly identify each such other document so incorporated by reference. SECTION 5. (a) Reporting of Significant Events. The Issuer shall give notice of the occurrence of any of the following events with respect to the Bonds: 1. Principal and interest payment delinquencies. 2. Non-payment related defaults, if material. 3. Unscheduled draws on debt service reserves reflecting financial difficulties. 4. Unscheduled draws on credit enhancements reflecting financial difficulties. 5. Substitution of credit or liquidity providers, or their failure to perform. 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds. 7. Modifications to rights of the Owners of the Bonds, if material. 8. Bond calls, if material, and tender offers. 9. Defeasances. 10. Release, substitution or sale of property securing repayment of the Bonds, if material. D-2

260 11. Rating changes. 12. Bankruptcy, insolvency, receivership or similar event of the Issuer.* 13. The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material. 15. Incurrence of a financial obligation of the Obligated Person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the Obligated Person, any of which affect Owners of the Bonds, if material. 16. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the Obligated Person, any of which reflect financial difficulties. (b) Upon the occurrence of a Listed Event, the Issuer shall, in a timely manner not in excess of ten (10) business days after the occurrence of the event, file a notice of such occurrence with the MSRB. SECTION 6. Transmission of Information and Notices. Unless otherwise required by law, all notices, documents and information provided to the MSRB shall be provided in electronic format as prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the MSRB. SECTION 7. Termination of Reporting Obligation. The Issuer s obligations under this Disclosure Certificate shall terminate upon the prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5(b). * As noted in the Rule, this event is considered to occur when any of the following occur: (i) the appointment of a receiver, fiscal agent or similar officer for the Issuer in a proceeding under the U.S. Bankruptcy Code or in any proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or (ii) the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Issuer. For purposes of event numbers 15 and 16 in Section 5(a) of this Disclosure Certificate, the term financial obligation means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation excludes municipal securities for which a final official statement has been provided to the MSRB consistent with the Rule. D-3

261 SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate and any provision of this Disclosure Certificate may be waived if such amendment or waiver is permitted by the Rule, as evidenced by an opinion of counsel expert in federal securities law (which may include bond counsel to the Issuer), to the effect that such amendment or waiver would not cause the Disclosure Certificate to violate the Rule. The first Annual Report filed after enactment of any amendment to or waiver of this Disclosure Certificate shall explain, in narrative form, the reasons for the amendment or waiver and the impact of the change in the type of information being provided in the Annual Report. If the amendment provides for a change in the accounting principles to be followed in preparing financial statements, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information in order to provide information to investors to enable them to evaluate the ability of the Issuer to meet its obligations. To the extent reasonably feasible, the comparison shall also be quantitative. A notice of the change in the accounting principles shall be sent to the MSRB. SECTION 9. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate any Owner of the Bonds may seek a court order for specific performance by the Issuer of its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not constitute a default with respect to the Bonds, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action for specific performance of the Issuer s obligations hereunder and not for money damages in any amount. SECTION 10. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Owners of the Bonds from time to time, and shall create no rights in any other person or entity. Date: March 27, 2019 By: Director of Finance/Town Treasurer D-4

262 EXHIBIT A Filing information relating to the Municipal Securities Rulemaking Board is as follows: Municipal Securities Rulemaking Board D-5

263 EXHIBIT B NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Name of Issue: Town of Coventry, Rhode Island Town of Coventry, Rhode Island $7,050,000 General Obligation Bonds, 2019 Series A Date of Issuance: March 27, 2019 NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate of the Issuer dated March 27, The Issuer anticipates that the Annual Report will be filed by. Dated: By: D-6

264 APPENDIX E SPECIMEN MUNICIPAL BOND INSURANCE POLICY

265 MUNICIPAL BOND INSURANCE POLICY ISSUER: BONDS: $ in aggregate principal amount of Policy No: -N Effective Date: Premium: $ ASSURED GUARANTY MUNICIPAL CORP. ("AGM"), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee") or paying agent (the "Paying Agent") (as set forth in the documentation providing for the issuance of and securing the Bonds) for the Bonds, for the benefit of the Owners or, at the election of AGM, directly to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer. On the later of the day on which such principal and interest becomes Due for Payment or the Business Day next following the Business Day on which AGM shall have received Notice of Nonpayment, AGM will disburse to or for the benefit of each Owner of a Bond the face amount of principal of and interest on the Bond that is then Due for Payment but is then unpaid by reason of Nonpayment by the Issuer, but only upon receipt by AGM, in a form reasonably satisfactory to it, of (a) evidence of the Owner's right to receive payment of the principal or interest then Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the Owner's rights with respect to payment of such principal or interest that is Due for Payment shall thereupon vest in AGM. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by AGM is incomplete, it shall be deemed not to have been received by AGM for purposes of the preceding sentence and AGM shall promptly so advise the Trustee, Paying Agent or Owner, as appropriate, who may submit an amended Notice of Nonpayment. Upon disbursement in respect of a Bond, AGM shall become the owner of the Bond, any appurtenant coupon to the Bond or right to receipt of payment of principal of or interest on the Bond and shall be fully subrogated to the rights of the Owner, including the Owner's right to receive payments under the Bond, to the extent of any payment by AGM hereunder. Payment by AGM to the Trustee or Paying Agent for the benefit of the Owners shall, to the extent thereof, discharge the obligation of AGM under this Policy. Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's Fiscal Agent are authorized or required by law or executive order to remain closed. "Due for Payment" means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity unless AGM shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall also include, in respect of a Bond, any payment of principal or interest that is Due for Payment made to an Owner by or on behalf of the Issuer which has been recovered from such Owner pursuant to the