ROOSEVELT & CROSS, INC. and Associates

Transcription

1 NEW ISSUE NEW AND RENEWAL ISSUES SERIAL BONDS BOND ANTICIPATION NOTES In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds and Notes is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of In the further opinion of Bond Counsel, interest on the Bonds and Notes is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes; although Bond Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. Bond Counsel is also of the opinion that interest on the Bonds and Notes is exempt from personal income taxes imposed by the State of New York or any political subdivision thereof (including The City of New York). Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds and Notes. See Tax Matters herein. The Bonds and Notes will be designated as qualified tax-exempt obligations pursuant to Section 265 (b)(3) of the Internal Revenue Code of VILLAGE OF OSSINING WESTCHESTER COUNTY, NEW YORK $4,718,000 PUBLIC IMPROVEMENT (SERIAL) BONDS, 2014 (the Bonds ) Date of Issue: Date of Delivery Maturity Date: November 1, ROOSEVELT & CROSS, INC. and Associates and $4,111, % BOND ANTICIPATION NOTES, 2014 (Reoffered at 0.29%) (the Notes ) TD SECURITIES (USA) LLC Date of Issue: November 18, 2014 CUSIP # XX4 Maturity Date: November 18, 2015 The Bonds and Notes are general obligations of the Village of Ossining, Westchester County, New York (the Village ), and will contain a pledge of the faith and credit of the Village for the payment of the principal thereof and interest thereon and, unless paid from other sources, the Bonds and Notes are payable from ad valorem taxes which may be levied upon all the taxable real property within the Village, subject to applicable statutory limitations. See Nature of Obligation and Tax Levy Limitation Law, herein. The Bonds will be issued in fully registered form, and when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository for the Bonds. Individual purchases may be made in book-entry form only, in the principal amount of $5,000 or integral multiples thereof, except for one necessary odd denomination which is or includes $3,000 maturing in Purchasers will not receive certificates representing their ownership interest in the Bonds. Payment of the principal of and interest on the Bonds will be made by the Village to DTC, which will in turn remit such principal and interest to its participants for subsequent disbursement to the beneficial owners of the Bonds as described herein. See Book-Entry-Only System herein. The Bonds will be dated their Date of Delivery, will bear interest from such date payable November 1, 2015 and semiannually thereafter on each May 1 and November 1 until maturity and will mature on November 1 in the years and amounts as set forth on the inside cover page hereof. The Bonds are subject to optional redemption prior to maturity as discussed herein (See Optional Redemption herein). The Notes will not be subject to redemption prior to maturity. The Notes will be issued in registered book-entry form registered to Cede & Co., as the partnership nominee for DTC. The Notes will be delivered to DTC, which will act as securities depository for the Notes. Beneficial owners will not receive certificates representing their interest in the Notes. Individual purchases may be made in denominations of $5,000 or integral multiples thereof, except for one necessary odd denomination which is or includes $1,787. A single note certificate will be issued for those Notes bearing the same rate of interest and CUSIP number in the aggregate principal amount awarded to such purchaser at such interest rate. Principal of and interest on said Notes will be paid in Federal Funds by the Village to Cede & Co., as nominee for DTC, which will in turn remit such principal and interest to its participants for subsequent distribution to the beneficial owners of the Notes as described herein. Transfer of principal and interest payments to beneficial owners by participants of DTC will be the responsibility of such participants and other nominees of beneficial owners. The Village will not be responsible or liable for payments by DTC to its participants or by DTC participants to beneficial owners or for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. (See Book-Entry-Only System herein.) The Bonds and Notes are offered when, as and if issued and received by the purchasers subject to the receipt of the respective final approving opinions of Orrick, Herrington & Sutcliffe LLP, New York, New York, Bond Counsel. It is anticipated that the Bonds and Notes will be available for delivery in Jersey City, New Jersey or as otherwise agreed with the purchasers on or about November 18, FOR A DESCRIPTION OF THE DISTRICT S AGREEMENT TO PROVIDE CONTINUING DISCLOSURE FOR THE BONDS AND NOTES AS DESCRIBED IN SECURITIES AND EXCHANGE COMMISSION RULE 15c2-12, SEE DISCLOSURE UNDERTAKING HEREIN. DATED: November 6, 2014

2 The Bonds mature on November 1 in each year as set forth below: Interest CUSIP Date Amount Rate Yield Number 2015 $313, % 0.35% XB , XC , XD , XE , XF , XG , XH , XJ , XK , XL , XM , XN , XP , XQ , XR , XS , XT , XU , XV , XW6

3 VILLAGE OF OSSINING WESTCHESTER COUNTY, NEW YORK William R. Hanauer Mayor BOARD OF TRUSTEES John Codman III...Village Trustee Robert R. Daraio...Village Trustee Victoria Gearity...Village Trustee Manuel R. Quezada...Village Trustee Richard A. Leins...Village Manager Thomas E. Warren... Village Treasurer Mary Ann Roberts...Village Clerk Lori Lee Dickson... Corporation Counsel INDEPENDENT AUDITORS O Connor Davies, LLP Harrison, New York BOND COUNSEL Orrick, Herrington & Sutcliffe LLP New York, New York FINANCIAL ADVISOR Capital Markets Advisors, LLC Hudson Valley * Long Island * New York City * Southern Tier * Western New York (845)

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5 No person has been authorized by the Village of Ossining to give any information or to make any representations not contained in this Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds and Notes by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information, estimates 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 Village of Ossining since the date hereof. TABLE OF CONTENTS Page THE BONDS... 1 Description of the Bonds... 1 Authority for and Purpose of the Bonds... 2 Optional Redemption of the Bonds... 2 THE NOTES... 2 Description of the Notes... 2 Authority for and Purposeof the Notes... 3 THE BONDS AND NOTES... 3 Book-Entry-Only System... 3 NATURE OF OBLIGATION... 5 Tax Levy Limitation Law... 7 SPECIAL PROVISIONS AFFECTING REMEDIES UPON DEFAULT... 8 MARKET FACTORS AFFECTING FINANCINGS OF THE STATE AND MUNICIPALITIES OF THE STATE THE STATE COMPTROLLER S FISCAL STRESS MONITORING SYSTEM LITIGATION TAX MATTERS LEGAL MATTERS DISCLOSURE UNDERTAKINGS Disclosure Undertaking for the Bonds Disclosure Undertaking for the Notes FINANCIAL ADVISOR RATINGS ADDITIONAL INFORMATION APPENDIX A - THE VILLAGE THE VILLAGE... A-1 General Information... A-1 Form of Government... A-1 Elected and Appointed Officials... A-2 Services... A-2 Employees... A-3 Employee Benefits... A-3 Other Postemployment Benefits... A-4 Page FINANCIAL FACTORS... A-5 Budgetary Procedure... A-5 Independent Audits... A-5 Summary of Significant Accounting Policies... A-6 Certain Information Obtained from Financial Statements... A-6 Investment Policy... A-6 Results of Operations... A-7 Revenues... A-8 REAL PROPERTY TAXES... A-10 Real Property Taxes, Assessments and Rates.. A-11 Tax Collection Procedures... A-11 Ten of the Largest Taxpayers... A-12 VILLAGE INDEBTEDNESS... A-13 Constitutional Requirements... A-13 Statutory Procedure... A-13 Constitutional Debt-Contracting Limitation... A-14 Short-Term Indebtedness... A-15 Energy Performance Contract Debt... A-16 Bond Anticipation Notes... A-16 Trend of Capital Debt... A-16 Overlapping Debt... A-17 Debt Ratios... A-18 Authorized but Unissued Debt... A-18 Debt Service Schedule... A-19 ECONOMIC AND DEMOGRAPHIC DATA... A-19 Population... A-19 Income... A-20 Employment... A-20 Financial Institutions... A-22 Utilities... A-22 Housing Data... A-23 Construction Activity... A-24 APPENDIX B - UNAUDITED SUMMARY OF FINANCIAL STATEMENTS APPENDIX C - AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013 APPENDIX D - FORMS OF BOND COUNSEL S OPINION

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7 OFFICIAL STATEMENT VILLAGE OF OSSINING, WESTCHESTER COUNTY, NEW YORK relating to $4,718,000 PUBLIC IMPROVEMENT (SERIAL) BONDS, 2014 (the Bonds ) and $4,111,787 BOND ANTICIPATION NOTES, 2014 (the Notes ) This Official Statement (the Official Statement ), which includes the cover page and appendices hereto, presents certain information relating to the Village of Ossining in the County of Westchester, in the State of New York (the Village, County, and State, respectively), in connection with the sale of $4,718,000 Public Improvement (Serial) Bonds, 2014 (the Bonds ) and $4,111,787 Bond Anticipation Notes, 2014 (the Notes ). All quotations from and summaries and explanations of the provisions of the Constitution and Laws of the State and acts and proceedings of the Village contained herein do not purport to be complete and are qualified in their entirety by reference to the official compilation thereof, and all references to the Bonds and Notes and the proceedings of the Village relating thereto are qualified in their entirety by reference to the definitive form of the Bonds and Notes and such proceedings. Description of the Bonds THE BONDS The Bonds will be dated the Date of Delivery, will bear interest from such date payable November 1, 2015 and semiannually thereafter on each May 1 and November 1 until maturity and will mature on November 1 in the years and amounts as set forth on the inside cover page hereof. The Bonds are subject to optional redemption prior to maturity (see Optional Redemption, herein). The Bonds will be issued in fully registered form and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ( DTC ), New York, New York. DTC will act as securities depository for the Bonds. Individual purchases may be made in book-entry form only, in the principal amount of $5,000 and integral multiples, except for one necessary odd denomination which is or includes $3,000 maturing in Purchasers will not receive certificates representing their ownership interest in the Bonds. Principal of and interest on the Bonds will be made by the Village to DTC, which will in turn remit such principal of and interest on to its Participants (defined herein), for subsequent disbursement to the Beneficial Owners (defined herein) of the Bonds as described herein. The Bonds may be transferred in the manner described on the Bonds and as referenced in certain proceedings of the Village referred to therein. The record date for payment of principal of and interest on the Bonds will be the last business day of the calendar month preceding each interest payment date. 1

8 Authority for and Purpose of the Bonds Authorization. The Bonds are issued pursuant to the Constitution and laws of the State, including the Local Finance Law, and various resolutions adopted by the Village Board. Certain details of the Bonds will be prescribed by certificates of the Village Treasurer executed pursuant to powers delegated to him to fix terms, form and contents of the Bonds and to provide for the sale thereof. Purpose. The proceeds of the Bonds, together with other $115,000 in available funds, will be utilized to redeem $2,300,000 bond anticipation notes, which mature on November 19, 2014 and provide $2,533,000 in new money to finance various purposes. Details of the Bonds are as follows: Notes New Amount Currently Money of the Purpose Outstanding Paydowns Issue Bonds Sing Sing Kill Sewer Improvements $2,300,000 $115,000 $708,000 $2,893,000 Water Dept Generator , ,100 Tax Certiorari Claims , ,000 Police Vehicles & Motorcycles , ,000 Operations Center Generator , ,900 Pleasantville Rd Pump Station Generator , ,000 Parks Dept Trucks ,000 90,000 Police Dept Radio Repeater System ,000 85,000 DPW Curb Machine ,000 20,000 Optional Redemption of the Bonds $2,300,000 $115,000 $2,533,000 $4,718,000 Call Provisions. The Bonds maturing on or before November 1, 2022 will not be subject to redemption prior to maturity. The Bonds maturing on or after November 1, 2023 will be subject to redemption prior to maturity at the option of the Village, in whole or in part, and if in part, in any order of their maturity and in any amount within a maturity (selected by lot within a maturity) on any date on or after November 1, 2022 at par, plus accrued interest to the date of redemption. Call Notification. If less than all of the Bonds of any maturity are to be redeemed, the particular bonds of such maturity redeemed shall be selected by lot in any customary manner of selection as determined by the Village. Notice of such call for redemption shall be given by mailing such notice to the registered holder not more than sixty (60) days nor less than thirty (30) days prior to such date. Notice of redemption having been given as aforesaid, the bonds so called for redemption shall, on the date for redemption set forth in such call for redemption, become due and payable together with interest to such redemption date. Interest shall cease to be paid thereon after such redemption date (See Book-Entry-Only System for additional information concerning redemptions). Description of the Notes THE NOTES The Notes will be dated and will mature as reflected on the cover page hereof. The Notes will not be subject to redemption prior to maturity. Interest will be calculated on a 30-day month and 360-day year basis, payable at maturity. The Notes will be issued in registered form either registered in the name of the successful bidder(s) or registered to Cede & Co, as the partnership nominee for DTC. The Village will act as Paying Agent for the Notes. The Village 2

9 contact information is as follows: Thomas E. Warren, Treasurer, 16 Croton Avenue, Ossining, New York 10562, (914) , Authority for and Purposeof the Notes Authorization. The Notes are issued pursuant to the Constitution and laws of the State, including the Local Finance Law, and various bond resolutions adopted by the Village Board on various dates. Certain details of the Notes will be prescribed by certificates of the Village Treasurer executed pursuant to powers delegated to him to fix terms, form and contents of the Notes and to provide for the sale thereof. Purpose. The Notes are issued pursuant to the State Constitution and statutes of the State, including among others, the Village Law and the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State, and bond various resolutions adopted by the Board of Trustees of the Village authorizing the issuance of serial bonds for the purposes set forth below. The proceeds of the Notes together with $167,706 in available cash will be used to redeem $1,679,493 outstanding bond anticipation notes, which mature on November 19, 2014 and to provide $2,600,000 in original financing for various Village improvements as set forth below. Notes Note New Notes To Purpose Outstanding Paydowns Money Be Issued Reline/Replace Water Mains $ -0- $ -0- $2,600,000 $2,600,000 IBW Reservoir Dam 1,425,000 75, ,350,000 Police Vehicles 80,000 26, ,333 Fire Chief's Vehicle 48,000 16, ,000 DPW Truck 40,000 8, ,000 Police Vehicles 46,667 23, ,334 SCBA Cylinder Replacement 28,160 7, ,120 Fire Chief's Vehicle 11,666 11, $ 1,679,493 $ 167,706 $2,600,000 $4,111,787 Book-Entry-Only System THE BONDS AND NOTES The Depository Trust Company ( DTC ), New York, New York, will act as securities depository for the Bonds and if so requested, for the Notes. The Bonds and Notes 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 and will be deposited with DTC. One fully registered note certificate will be issued for the Notes bearing the same interest and CUSIP and deposited with DTC. DTC, the world s largest 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. 3

10 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 ). 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 the Bonds and Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds and Notes 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 and Notes 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 the Bonds and Notes, except in the event that use of the bookentry system for the Bonds and Notes is discontinued. To facilitate subsequent transfers, all Bonds and Notes 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 the Bonds and Notes with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds and Notes; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds and Notes 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. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds and Notes unless authorized by a Direct Participant in accordance with DTC s Money Market Instruments (MMI) Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Village 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 the Bonds and Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption notices shall be sent to DTC. If less than all of the Bonds and Notes 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. Principal and interest payments on the Bonds and Notes will be made to Cede & Co., or such other nominee as may be requested 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 Village, on payable date 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 is 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 or the Village, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Village, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 4

11 DTC may discontinue providing its services as depository with respect to the Bonds and Notes at any time by giving reasonable notice to the Village. Under such circumstances, in the event that a successor depository is not obtained, bond and note certificates are required to be printed and delivered. The Village may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, bond and note certificates will be printed and delivered as applicable. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the Village believes to be reliable, but the Village takes no responsibility for the accuracy thereof. Source: The Depository Trust Company THE INFORMATION CONTAINED IN THE ABOVE SECTION CONCERNING DTC AND DTC'S BOOK- ENTRY SYSTEM HAS BEEN OBTAINED FROM SAMPLE OFFERING DOCUMENT LANGUAGE SUPPLIED BY DTC, BUT THE VILLAGE TAKES NO RESPONSIBILITY FOR THE ACCURACY THEREOF. IN ADDITION, THE VILLAGE WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO PARTICIPANTS, TO INDIRECT PARTICIPANTS OR TO ANY BENEFICIAL OWNER WITH RESPECT TO: (I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY PARTICIPANT OR ANY INDIRECT PARTICIPANT; (II) THE PAYMENTS BY DTC OR ANY PARTICIPANT OR ANY INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OF, OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS AND NOTES OR (III) ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO OWNERS. THE VILLAGE CANNOT AND DOES NOT GIVE ANY ASSURANCES THAT DTC, DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS OF DTC WILL DISTRIBUTE TO THE BENEFICIAL OWNERS OF THE BONDS AND NOTES (1) PAYMENTS OF PRINCIPAL OF OR INTEREST OR REDEMPTION PREMIUM ON THE BONDS AND NOTES (2) CONFIRMATIONS OF THEIR OWNERSHIP INTERESTS IN THE BONDS AND NOTES OR (3) OTHER NOTICES SENT TO DTC OR CEDE & CO., ITS PARTNERSHIP NOMINEE, AS THE REGISTERED OWNER OF THE BONDS AND NOTES, OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC, DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE VILLAGE WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO DTC, THE DIRECT PARTICIPANTS, THE INDIRECT PARTICIPANTS OF DTC OR THE BENEFICIAL OWNERS WITH RESPECT TO (1) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT PARTICPANTS OR INDIRECT PARTICIPANTS OF DTC; (2) THE PAYMENT BY DTC OR ANY DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS OF DTC OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL AMOUNT OF OR INTEREST OR REDEMPTION PREMIUM ON THE BONDS AND NOTES; (3) THE DELIVERY BY DTC OR ANY DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS OF DTC OR ANY NOTICE TO ANY BENEFICIAL OWNER THAT IS REQUIRED OR PERMITTED TO BE GIVEN TO OWNERS ; OR (4) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE REGISTERED HOLDER OF THE BONDS AND NOTES. NATURE OF OBLIGATION Each Bond and Note, when duly issued and paid for, will constitute a contract between the Village and the holder thereof. Holders of any series of bonds or notes of the Village may bring an action or commence a proceeding in accordance with the civil practice law and rules to enforce the rights of the holders of such series of notes or bonds. The Bonds and Notes will be general obligations of the Village and will contain a pledge of the faith and credit of the Village for the payment of the principal thereof and the interest thereon as required by the Constitution and laws of the State. For the payment of such principal and interest, the Village has power and statutory authorization to levy ad valorem taxes on all real property within the Village, subject to applicable statutory limitations. See Tax Levy Limitation Law herein. 5

12 Although the State Legislature is restricted by Article VIII, Section 12 of the State Constitution from imposing limitations on the power to raise taxes to pay interest on or principal of indebtedness theretofore contracted prior to the effective date of any such legislation, the New York State Legislature may from time to time impose additional limitations or requirements on the ability to increase a real property tax levy or on the methodology, exclusions or other restrictions of various aspects of real property taxation (as well as on the ability to issue new indebtedness). On June 24, 2011, Chapter 97 of the Laws of 2011 was signed into law by the Governor (the Tax Levy Limitation Law ). The Tax Levy Limitation Law applies to local governments and school districts in the State (with certain exceptions) and imposes additional procedural requirements on the ability of municipalities and school districts to levy certain year-to-year increases in real property taxes. Under the Constitution of the State, the Village is required to pledge its faith and credit for the payment of the principal of and interest on the Bonds and Notes and is required to raise real estate taxes, and without specification, other revenues, if such levy is necessary to repay such indebtedness. While the Tax Levy Limitation Law imposes a statutory limitation on the Village s power to increase its annual tax levy with the amount of such increase limited by the formulas set forth in the Tax Levy Limitation Law, it also provides the procedural method to surmount that limitation. See Tax Levy Limitation Law, herein. The Constitutionally-mandated general obligation pledge of municipalities and school districts in New York State has been interpreted by the Court of Appeals, the State s highest court, in Flushing National Bank v. Municipal Assistance Corporation for the City of New York, 40 N.Y.2d 731 (1976), as follows: A pledge of the city s faith and credit is both a commitment to pay and a commitment of the city s revenue generating powers to produce the funds to pay. Hence, an obligation containing a pledge of the City s faith and credit is secured by a promise both to pay and to use in good faith the city s general revenue powers to produce sufficient funds to pay the principal and interest of the obligation as it becomes due. That is why both words, faith and credit are used and they are not tautological. That is what the words say and this is what the courts have held they mean. So, too, although the Legislature is given the duty to restrict municipalities in order to prevent abuses in taxation, assessment, and in contracting of indebtedness, it may not constrict the City s power to levy taxes on real estate for the payment of interest on or principal of indebtedness previously contracted. While phrased in permissive language, these provisions, when read together with the requirement of the pledge and faith and credit, express a constitutional imperative: debt obligations must be paid, even if tax limits be exceeded. In addition, the Court of Appeals in the Flushing National Bank case has held that the payment of debt service on outstanding general obligation bonds and notes takes precedence over fiscal emergencies and the police power of political subdivisions in New York State. The pledge has generally been understood as a promise to levy property taxes without limitation as to rate or amount to the extent necessary to cover debt service due to language in Article VIII Section 10 of the Constitution which provides an exclusion for debt service from Constitutional limitations on the amount of a real property tax levy, insuring the availability of the levy of property tax revenues to pay debt service. As the Flushing National Bank Court noted, the term faith and credit in its context is not qualified in any way. Indeed, in Flushing National Bank v. Municipal Assistance Corp., 40 N.Y.2d 1088 (1977), the Court of Appeals described the pledge as a direct constitutional mandate. In Quirk v. Municipal Assistance Corp., 41 N.Y.2d 644 (1977), the Court of Appeals stated that, while holders of general obligation debt did not have a right to particular revenues such as sales tax, with respect to traditional real estate tax levies, the bondholders are constitutionally protected against an attempt by the State to deprive the city of those revenues to meet its obligations. According to the Court in Quirk, the State Constitution requires the city to raise real estate taxes, and without specification other revenues, if such a levy be necessary to repay indebtedness. In addition, the Constitution of the State requires that every county, city, town, village, and school district in the State provide annually by appropriation for the payment of all interest and principal on its serial bonds and certain other obligations, and that, if at any time the respective appropriating authorities shall fail to make such appropriation, a sufficient sum shall be set apart from the first revenues thereafter received and shall be applied to such purposes. In the event that an appropriating authority were to make an appropriation for debt service and then 6

13 decline to expend it for that purpose, this provision would not apply. However, the Constitution of the State does also provide that the fiscal officer of any county, city, town, village, or school district may be required to set apart and apply such first revenues at the suit of any holder of any such obligations. In Quirk v. Municipal Assistance Corp., the Court of Appeals described this as a first lien on revenues, but one that does not give holders a right to any particular revenues. It should thus be noted that the pledge of the faith and credit of a political subdivision in New York State is a pledge of an issuer of a general obligation bond or note to use its general revenue powers, including, but not limited to, its property tax levy to pay debt service on such obligations, but that such pledge may not be interpreted by a court of competent jurisdiction to include a constitutional or statutory lien upon any particular revenues. While the courts in New York State have historically been protective of the rights of holders of general obligation debt of political subdivisions, it is not possible to predict what a future court might hold. Tax Levy Limitation Law On June 24, 2011, Chapter 97 of the Laws of 2011 was signed into law by the Governor (the Tax Levy Limitation Law ). The Tax Levy Limitation Law applies to all local governments, including school districts (with the exception of New York City, the counties comprising New York City and school districts in New York City, Buffalo, Rochester, Syracuse and Yonkers, the latter four of which are affected indirectly by applicability to their respective City). It also applies to independent special districts and to town and county improvement districts as part of their parent municipalities tax levies. The Tax Levy Limitation Law restricts, among other things, the amount of real property taxes (including assessments of certain special improvement districts) that may be levied by or on behalf of a municipality in a particular year, beginning with fiscal years commencing on or after January 1, It expires on June 15, 2016 unless certain legislation is extended. Pursuant to the Tax Levy Limitation Law, the tax levy of a municipality cannot increase by more than the lesser of (i) two percent (2%) or (ii) the annual increase in the consumer price index ("CPI"), over the amount of the prior year s tax levy. Certain adjustments would be permitted for taxable real property full valuation increases due to changes in physical or quantity growth in the real property base as defined in Section 1220 of the Real Property Tax Law. A municipality may exceed the tax levy limitation for the coming fiscal year only if the governing body of such municipality first enacts, by at least a sixty percent vote of the total voting strength of the board, a local law (resolution in the case of fire districts and certain special districts) to override such limitation for such coming fiscal year only. There are permissible exceptions to the tax levy limitation provided in the Tax Levy Limitation Law, including expenditures made on account of certain tort settlements and certain increases in the average actuarial contribution rates of the New York State and Local Employees Retirement System, the Police and Fire Retirement System, and the Teachers Retirement System. Municipalities are also permitted to carry forward a certain portion of their unused levy limitation from a prior year. Each municipality prior to adoption of its fiscal year budget must submit for review to the State Comptroller any information that is necessary in the calculation of its tax levy for such fiscal year. The Tax Levy Limitation Law does not contain an exception from the levy limitation for the payment of debt service on either outstanding general obligation debt of municipalities or such debt incurred after the effective date of the Tax Levy Limitation Law (June 24, 2011). While the Tax Levy Limitation Law may constrict an issuer s power to levy real property taxes for the payment of debt service on debt contracted after the effective date of the Tax Levy Limitation Law, it is clear that no statute is able (1) to limit an issuer s pledge of its faith and credit to the payment of any of its general obligation indebtedness or (2) to limit an issuer s levy of real property taxes to pay debt service on general obligation debt contracted prior to the effective date of the Tax Levy Limitation Law. Whether the Constitution grants a municipality authority to treat debt service payments as a constitutional exception to such a statutory tax levy limitation is not clear. Real Property Tax Rebate. Chapter 59 of the Laws of 2014 ( Chapter 59 ), a newly adopted State budget bill includes provisions which provide a refundable personal income tax credit to real property taxpayers in school districts and certain municipal units of government. Real property owners in school districts are eligible for this credit in the 2014 and 2015 taxable years of those property owners. Real property taxpayers in certain other 7

14 municipal units of government are eligible for this credit in the 2015 and 2016 taxable years of those real property taxpayers. The eligibility of real property taxpayers for the tax credit in each year depends on such jurisdiction s compliance with the provisions of the Tax Levy Limitation Law. School districts budgets must comply in their and fiscal years. Other municipal units of government must have their budgets in compliance for their 2015 and 2016 fiscal years. Such budgets must be within the tax cap limits set by the Tax Levy Limitation Law for the real property taxpayers to be eligible for this personal income tax credit. The affected jurisdictions include counties, cities (other than any city with a population of one million or more and its counties), towns, villages, school districts (other than the dependent school districts of New York City, Buffalo, Rochester, Syracuse and Yonkers, the latter four of which are indirectly affected by applicability to their respective city) and independent special districts. Certain additional restrictions on the amount of the personal income tax credit are set forth in Chapter 59 in order for the tax cap to qualify as one which will provide the tax credit benefit to such real property taxpayers. The refundable personal income tax credit amount is increased in the second year if compliance occurs in both taxable years. For the second taxable year of the program, the refundable personal income tax credit for real property taxpayers is additionally contingent upon adoption by the school district or municipal unit of a state approved government efficiency plan which demonstrates three year savings and efficiencies of at least one per cent per year from shared services, cooperation agreements and/or mergers or efficiencies. Municipalities, school districts and independent special districts must provide certification of compliance with the requirements of the new provisions to certain state officials in order to render their real property taxpayers eligible for the personal income tax credit. While the provisions of Chapter 59 do not directly further restrict the taxing power of the affected municipalities, school districts and special districts, they do provide an incentive for such tax levies to remain within the tax cap limits established by the Tax Levy Limitation Law. The implications of this for future tax levies and for operations and services of the Village are uncertain at this time. SPECIAL PROVISIONS AFFECTING REMEDIES UPON DEFAULT General Municipal Law Contract Creditors Provision. Each Bond and Note, when duly issued and paid for, will constitute a contract between the Village and the holder thereof. Under current law, provision is made for contract creditors of the Village to enforce payments upon such contracts, if necessary, through court action. Section 3-a of the General Municipal Law provides, subject to exceptions not pertinent, that the rate of interest to be paid by the Village upon any judgment or accrued claim against it on an amount adjudged due to a creditor shall not exceed nine per centum per annum from the date due to the date of payment. This provision might be construed to have application to the holders of the Bonds and Notes in the event of a default in the payment of the principal of and interest on the Bonds and Notes. Execution/Attachment of Municipal Property. As a general rule, property and funds of a municipal corporation serving the public welfare and interest have not been judicially subjected to execution or attachment to satisfy a judgment, although judicial mandates have been issued to officials to appropriate and pay judgments out of certain funds or the proceeds of a tax levy. In accordance with the general rule with respect to municipalities, judgments against the Village may not be enforced by levy and execution against property owned by the Village. Authority to File For Municipal Bankruptcy. The Federal Bankruptcy Code allows public bodies, such as the counties, cities, towns and villages, recourse to the protection of a Federal Court for the purpose of adjusting outstanding indebtedness. Section of the Local Finance Law contains specific authorization for any municipality in the State or its emergency control board to file a petition under any provision of Federal bankruptcy law for the composition or adjustment of municipal indebtedness. The State has consented that any municipality in the State may file a petition with the United States District Court or court of bankruptcy under any provision of the laws of the United States, now or hereafter in effect, for the composition or adjustment of municipal indebtedness. Subject to such State consent, under the United States 8

15 Constitution, Congress has jurisdiction over such matters and has enacted amendments to the existing federal bankruptcy statute, being Chapter 9 thereof, generally to the effect and with the purpose of affording municipal corporations, under certain circumstances, with easier access to judicially approved adjustment of debt including judicial control over identifiable and unidentifiable creditors. No current state law purports to create any priority for holders of the Bonds and Notes should the Village be under the jurisdiction of any court, pursuant to the laws of the United States, now or hereafter in effect, for the composition or adjustment of municipal indebtedness. The rights of the owners of Bonds and Notes to receive interest and principal from the Village could be adversely affected by the restructuring of the Village s debt under Chapter 9 of the Federal Bankruptcy Code. No assurance can be given that any priority of holders of debt obligations issued by the Village (including the Bonds and Notes) to payment from monies retained in any debt service fund or from other cash resources would be recognized if a petition were filed by or on behalf of the Village under the Federal Bankruptcy Code or pursuant to other subsequently enacted laws relating to creditors rights; such monies might, under such circumstances, be paid to satisfy the claims of all creditors generally. Under the Federal Bankruptcy Code, a petition may be filed in the Federal Bankruptcy court by a municipality which is insolvent or unable to meet its debts as they mature. Generally, the filing of such a petition operates as a stay of any proceeding to enforce a claim against the municipality. The Federal Bankruptcy Code also requires that a plan be filed for the adjustment of the municipality s debt, which may modify or alter the rights of creditors and which could be secured. Any plan of adjustment confirmed by the court must be approved by the requisite number of creditors. If confirmed by the bankruptcy court, the plan would be binding upon all creditors affected by it. State Debt Moratorium Law. There are separate State law provisions regarding debt service moratoriums enacted into law in At the Extraordinary Session of the State Legislature held in November, 1975, legislation was enacted which purported to suspend the right to commerce or continue an action in any court to collect or enforce certain short-term obligations of The City of New York. The effect of such act was to create a three-year moratorium on actions to enforce the payment of such obligations. On November 19, 1976, the Court of Appeals, the State s highest court, declared such act to be invalid on the ground that it violates the provisions of the State Constitution requiring a pledge by such City of its faith and credit for the payment of obligations. As a result of the Court of Appeals decision in Flushing National Bank v. Municipal Assistance Corporation for the City of New York, 40 N.Y.2d 731 (1976), the constitutionality of that portion of Title 6-A of Article 2 of the Local Finance Law, as described below, enacted at the 1975 Extraordinary Session of the State legislature authorizing any county, city, town or village with respect to which the State has declared a financial emergency to petition the State Supreme Court to stay the enforcement against such municipality of any claim for payment relating to any contract, debt or obligation of the municipality during the emergency period, is subject to doubt. In any event, no such emergency has been declared with respect to the Village. Right of Municipality or State to Declare a Municipal Financial Emergency and Stay Claims Under State Debt Moratorium Law. The State Legislature is authorized to declare by special act that a state of financial emergency exists in any county, city, town or village. (The provision does not by its terms apply to school districts or fire districts.) In addition, the State Legislature may authorize by special act establishment of an emergency financial control board for any county, city, town or village upon determination that such a state of financial emergency exists. Thereafter, unless such special act provides otherwise, a voluntary petition to stay claims may be filed by any such municipality (or by its emergency financial control board in the event said board requests the municipality to petition and the municipality fails to do so within five days thereafter). A petition filed in supreme court in county in which the municipality is located in accordance with the requirements of Title 6-A of the Local Finance Law ( Title 6-A ) effectively prohibits the doing of any act for ninety days in the payment of claims, against the municipality including payment of debt service on outstanding indebtedness. This includes staying the commencement or continuation of any court proceedings seeking payment of debt service due, the assessment, levy or collection of taxes by or for the municipality or the application of any funds, property, 9

16 receivables or revenues of the municipality to the payment of debt service. The stay can be vacated under certain circumstances with provisions for the payment of amounts due or overdue upon a demand for payment in accordance with the statutory provisions set forth therein. The filing of a petition may be accompanied with a proposed repayment plan which upon court order approving the plan, may extend any stay in the payment of claims against the municipality for such additional period of time as is required to carry out fully all the terms and provisions of the plan with respect to those creditors who accept the plan or any benefits thereunder. Court approval is conditioned, after a hearing, upon certain findings as provided in Title 6-A. A proposed plan can be modified prior to court approval or disapproval. After approval, modification is not permissible without court order after a hearing. If not approved, the proposed plan must be amended within ten days or else the stay is vacated and claims including debt service due or overdue must be paid. It is at the discretion of the court to permit additional filings of amended plans and continuation of any stay during such time. A stay may be vacated or modified by the court upon motion of any creditor if the court finds after a hearing, that the municipality has failed to comply with a material provision of an accepted repayment plan or that due to a material change in circumstances the repayment plan is no longer in compliance with statutory requirements. Once an approved repayment plan has been completed, the court, after a hearing upon motion of any creditor, or a motion of the municipality or its emergency financial control board, will enter an order vacating any stay then in effect and enjoining of creditors who accepted the plan or any benefits thereunder from commencing or continuing any court action, proceeding or other act described in Title 6-A relating to any debt included in the plan. Title 6-A requires notice to all creditors of each material step in the proceedings. Court determinations adverse to the municipality or its financial emergency control board are appealable as of right to the appellate division in the judicial department in which the court is located and thereafter, if necessary, to the Court of Appeals. Such appeals stay the judgment or appealed from and all other actions, special proceedings or acts within the scope of Section of Title 6-A pending the hearing and determination of the appeals. Whether Title 6-A is valid under the Constitutional provisions regarding the payment of debt service is not known. However, based upon the decision in the Flushing National Bank case described above, its validity is subject to doubt. While the State Legislature has from time to time adopted legislation in response to a municipal fiscal emergency and established public benefit corporations with a broad range of financial control and oversight powers to oversee such municipalities, generally such legislation has provided that the provisions of Title 6-A are not applicable during any period of time that such a public benefit corporation has outstanding indebtedness issued on behalf of such municipality. Fiscal Stress and State Emergency Financial Control Boards. Pursuant to Article IX Section 2(b)(2) of the State Constitution, any local government in the State may request the intervention of the State in its property, affairs and government by a two-thirds vote of the total membership of its legislative body or on request of its chief executive officer concurred in by a majority of such membership. This has resulted in the adoption of special acts for the establishment of public benefit corporations with varying degrees of authority to control the finances (including debt issuance) of the cities of Buffalo, Troy and Yonkers and the County of Nassau. The specific authority, powers and composition of the financial control boards established by these acts varies based upon circumstances and needs. Generally, the State legislature has granted such boards the power to approve or disapprove budget and financial plans and to issue debt on behalf of the municipality, as well as to impose wage and/or hiring freezes and approve collective bargaining agreements in certain cases. Implementation is left to the discretion of the board of the public benefit corporation. Such a State financial control board was first established for New York City in In addition, on a certificate of necessity of the governor reciting facts which in the judgment of governor constitute an emergency requiring enactment of such laws, with the concurrences of two-thirds of the members elected in each house of the State legislature the State is authorized to intervene in the property, affairs and governments of local government units. This occurred in the case of the County of Erie in The authority of the State to intervene in the financial affairs of local government is further supported by Article VIII, Section 12 of the Constitution which declares it to be the duty of the State legislature to restrict, subject to other provisions of the Constitution, the power of taxation, assessment, borrowing money and contracting indebtedness and loaning the credit of counties, cities, towns and villages so as to prevent abuses in taxation and assessment and in contracting indebtedness by them. 10

17 In 2013, the State established a new state advisory board to assist counties, cities, towns and villages in financial distress. The Financial Restructuring Board for Local Governments (the FRB ), is authorized to conduct a comprehensive review of the finances and operations of any such municipality deemed by the FRB to be fiscally eligible for its services upon request by resolution of the municipal legislative body and concurrence of its chief executive. The FRB is authorized to make recommendations for, but cannot compel improvement of fiscal stability, management and delivery of municipal services, including shared services opportunities and is authorized to offer grants and/or loans of up to $5,000,000 through a Local Government Performance and Efficiency Program to undertake certain recommendations. If a municipality agrees to undertake the FRB recommendations, it will be automatically bound to fulfill the terms in order to receive the aid. The FRB is also authorized to serve as an alternative arbitration panel for binding arbitration. Although from time to time, there have been proposals for the creation of a statewide financial control board with broad authority over local governments in the State, the FRB does not have emergency financial control board powers to intervene such as the public benefit corporations established by special acts as described above. Several municipalities in the State are presently working with the FRB. School districts and fire districts are not eligible for FRB assistance. Constitutional Non-Appropriation Provision. There is in the Constitution of the State, Article VIII, Section 2, the following provision relating to the annual appropriation of monies for the payment of due principal of and interest on indebtedness of every county, city, town, village and school district in the State: If at any time the respective appropriating authorities shall fail to make such appropriations, a sufficient sum shall be set apart from the first revenues thereafter received and shall be applied to such purposes. The fiscal officer of any county, city, town, village or school district may be required to set aside and apply such revenues as aforesaid at the suit of any holder of obligations issued for any such indebtedness. This constitutes a specific non-exclusive constitutional remedy against a defaulting municipality or school district; however, it does not apply in a context in which monies have been appropriated for debt service but the appropriating authorities decline to use such monies to pay debt service. However, Article VIII, Section 2 of the Constitution of the State also provides that the fiscal officer of any county, city, town, village or school district may be required to set apart and apply such revenues at the suit of any holder of any obligations of indebtedness issued with the pledge of the faith of the credit of such political subdivision. See General Municipal Law Contract Creditors Provision herein. The Constitutional provision providing for first revenue set asides does not apply to tax anticipation notes, revenue anticipation notes or bond anticipation notes. Default Litigation. In prior years, certain events and legislation affecting a holder s remedies upon default have resulted in litigation. While courts of final jurisdiction have upheld and sustained the rights of noteholders and bondholders, such courts might hold that future events including financial crises as they may occur in the State and in political subdivisions of the State require the exercise by the State or its political subdivisions of emergency and police powers to assure the continuation of essential public services prior to the payment of debt service. See Nature of Obligation and State Debt Moratorium Law herein. No Past Due Debt. No principal of or interest on Village indebtedness is past due. The Village has never defaulted in the payment of the principal of and interest on any indebtedness. MARKET FACTORS AFFECTING FINANCINGS OF THE STATE AND MUNICIPALITIES OF THE STATE The financial and economic condition of the Village as well as the market for the Bond and Notes could be affected by a variety of factors, some of which are beyond the Village s control. There can be no assurance that adverse events in the State and in other jurisdictions, including, for example, the seeking by a municipality or large taxable property owner of remedies pursuant to the Federal Bankruptcy Code or otherwise, will not occur which might affect the market price of and the market for the Bond and Notes. If a significant default or other financial crisis 11

18 should occur in the affairs of the State or another jurisdiction or any of its agencies or political subdivisions thereby further impairing the acceptability of obligations issued by borrowers within the State, both the ability of the Village to arrange for additional borrowings, and the market for and market value of outstanding debt obligations, including the Bonds and Notes, could be adversely affected. There can be no assurance that the State appropriation for State aid to school districts will be continued in future years, either pursuant to existing formulas or in any form whatsoever. State aid appropriated and apportioned to the Village can be paid only if the State has such monies available therefore. The availability of such monies and the timeliness of such payment may also be affected by a delay in the adoption of the State budget and other circumstances, including State fiscal stress. In any event, State aid appropriated and apportioned to the Village can be paid only if the State has such monies available therefore. (See State Aid herein). Should the Village fail to receive monies expected from the State in the amounts and at the times expected, the Village is permitted to issue revenue anticipation notes in anticipation of the receipt of delayed State aid. If and when a holder of any of the Bonds and Notes should elect to sell a Bond or Note prior to its maturity, there can be no assurance that a market shall have been established, maintained and be in existence for the purchase and sale of any of the Bonds and Notes. In addition, the price and principal value of the Bonds and Notes is dependent on the prevailing level of interest rates; if interest rates rise, the price of a bond or note will decline, causing the bondholder or noteholder to incur a potential capital loss if such bond or note is sold prior to its maturity. Amendments to U.S. Internal Revenue Code could reduce or eliminate the favorable tax treatment granted to municipal debt, including the Bonds and Notes and other debt issued by the Village. Any such future legislation would have an adverse effect on the market value of the Bonds and Notes (See Tax Matters herein). The enactment of Chapter 97 of the Laws of 2011 on June 24, 2011, which imposes a tax levy limitation upon municipalities, school districts, including the Village, and fire districts in the State could have an impact upon operations of the Village and as a result, the market price for the Bonds and Notes. (See Tax Levy Limitation Law, herein.) THE STATE COMPTROLLER S FISCAL STRESS MONITORING SYSTEM The New York State Comptroller has reported that New York State s school districts and municipalities are facing significant fiscal challenges. As a result, the Office of the State Comptroller has developed a Fiscal Stress Monitoring System ( FSMS ) to provide independent, objectively measured and quantifiable information to school district and municipal officials, taxpayers and policy makers regarding the various levels of fiscal stress under which the State s school districts and municipalities are operating. The fiscal stress scores are based on financial information submitted as part of each school district s ST-3 report filed with the State Education Department annually, and each municipality s annual report filed with the State Comptroller. Using financial indicators that include year-end fund balance, cash position and patterns of operating deficits, the system creates an overall fiscal stress score which classifies whether a school district or municipality is in significant fiscal stress, in moderate fiscal stress, as susceptible to fiscal stress or no designation. Entities that do not accumulate the number of points that would place them in a stress category will receive a financial score but will be classified in a category of no designation. This classification should not be interpreted to imply that the entity is completely free of fiscal stress conditions. Rather, the entity s financial information, when objectively scored according to the FSMS criteria, did not generate sufficient points to place them in one of the three established stress categories. The most current applicable report of the State Comptroller designates the Village as No Designation. For villages only, visit For a copy of the Comptroller s fiscal stress common themes report for villages visit: 12

19 For a complete description of the Comptroller s Fiscal Stress Monitoring System visit: For quick facts on the Fiscal Monitoring System, visit: Note: Reference to websites implies no warranty of accuracy of information therein. LITIGATION General Information. There are presently pending against the Village claims which seek damages for alleged negligent acts or omissions. These claims are in various stages of litigation from the filing of Notice of Claim to the same commencement of formal legal proceedings. There are currently pending a number of claims against the Village some of which in the opinion of legal counsel, could result in monetary damages. See below for a description of certain cases currently pending against the Village. Village officials, however, have indicated such damages will be covered by insurance, which has self-intention provisions as noted below, and are not expected to have an adverse effect on the financial position of the Village. The Village is involved in a civil rights case. Discovery has been completed and the Village is awaiting a decision on the motion. The firm representing the Village on this matter estimates that if tried and lost, which they believe to be unlikely, the ultimate financial exposure to the Village could range between $0 and $100,000. The Village is involved in a case regarding a motorcycle accident. Discovery has been completed and a motion for summary judgment based on lack of prior written notice has been submitted. According to the firm representing the Village, if the motion is lost and if lost at trial the matter has a full value between $0 and $175,000. The Village is involved in a two cases involving a slip and fall. The firm representing the Village has estimated the total of each case has a possible exposure to be between $0 to $175,000 and $0 to $1,000,000. Risk Management. The Village's policies for general liability, automobile liability, property and public officials errors and omissions coverage have self-insured retention levels of $100,000 per occurrence for the 12/31/ policy year. Primary insurance coverage is purchased for losses in excess of the retention levels, to a maximum limit of $900,000. Excess insurance policies have been secured for losses in excess of $1 million ($100,000 retention + $900,000 primary insurance policy) to a maximum of $10 million per occurrence for all liability losses and $64,248,159 for property. The Workers' Compensation self-insured retention level is $150,000 with primary insurance coverage limit of $350,000. Excess Workers Compensation insurance is purchased for losses in excess of $500,000 ($150,000 Retention + $350,000 Primary Limit). Excess Workers' Compensation is written for Statutory Limits (unlimited in New York), with a $1 million cap on employer's liability claims. The governmental funds are charged premiums by the respective Internal Service Fund. Claims payable in the Internal Service funds include provisions for claims reported and claims incurred but not reported. The Village is also self-insured for health benefits. A plan administrator has been retained to review and approve all claims. The Village has specific stop-loss insurance which establishes a maximum exposure limit of $120,000 for each individual covered in the plan up to a maximum of $1 million reimbursement to the Village. The Village also has aggregate stop-loss insurance which established a maximum exposure limit of $5,967,727 for the 2013 plan year. Settled claims resulting from these risks have not exceeded commercial coverage in any of the past three fiscal years. See Audited Financial Statements for the year ended December 31, 2013, Note 4, herein. Tax Certiorari Claims. There is also pending against the Village various proceedings brought pursuant to Article 7 of the Real Property Tax Law to review and reduce real estate assessments and obtain a refund for alleged overpayments of real estate taxes. The Village, with minor adjustments, adopts the assessment roll prepared by the Town of Ossining (the Town ). Proceedings to review real estate assessments are defended by the Town. Adjustments to the Village s assessment roll are made to reflect changes resulting from stipulations of judgment for 13

20 any such proceeding to which the Village is also a party. For the year ending December 31, 2014, there are currently pending various certiorari claims which were filed seeking assessment reductions and Small Claims Assessment Reviews ( SCARs ). The results of tax certiorari proceedings cannot be ascertained at this time; however, future refunds resulting from an adverse pending settlement or judgment will be funded in the year of payment. For 2013, the Village paid $266,224 in direct tax refunds (including $44,530 in SCARs). For the 2014 fiscal year (as of October 1, 2014) the Village has paid $113,525 in direct tax refunds (including $21,610 in SCARs). Village officials presently anticipate $246,276 in additional tax refunds during the 2014 fiscal year. Pursuant to the Local Finance Law, the Village in the past has issued Bonds or used budgetary appropriations to pay tax refunds. It is believed that an adverse decision, in any or all of the tax certiorari proceedings, in whole or in part, whether by stipulation or judgment, will not have a material impact on the financial condition of the Village. There is no action, suit, proceedings or investigation, at law or in equity, before or by any court, public board or body pending or, to the best knowledge of the Village, threatened against or affecting the Village to restrain or enjoin the issuance, sale or delivery of the Bonds or any proceedings or authority of the Village taken with respect to the authorization, issuance or sale of the Bonds or contesting the corporate existence or boundaries of the Village. TAX MATTERS In the opinion of Orrick, Herrington & Sutcliffe LLP ( Bond Counsel ), based upon an analysis of existing laws, regulations, rulings, and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds and Notes is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the Code ) and is exempt from personal income taxes imposed by the State of New York or any political subdivision thereof (including The City of New York). Bond Counsel is of the further opinion that interest on the Bonds and Notes is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. A complete copy of the proposed forms of opinions of Bond Counsel are set forth in Appendix D hereto. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds and Notes. The Village has covenanted to comply with certain restrictions designed to insure that interest on the Bonds and Notes will not be included in federal gross income. Failure to comply with these covenants may result in interest on the Bonds and Notes being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Bonds and Notes. The opinion of Bond Counsel assumes compliance with these covenants. 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 and Notes may adversely affect the value of, or the tax status of interest on, the Bonds and Notes. Further, no assurance can be given that pending or future legislation or amendments to the Code, if enacted into law, or any proposed legislation or amendments to the Code, will not adversely affect the value of, or the tax status of interest on, the Bonds and Notes. Certain requirements and procedures contained or referred to in the Arbitrage Certificate, and other relevant documents may be changed and certain actions (including, without limitation, economic defeasance of the Bonds and Notes) may be taken or omitted under the circumstances and subject to the terms and conditions set forth in such documents. Bond Counsel expresses no opinion as to any Bonds and Notes or the interest thereon if any such change occurs or action is taken or omitted. Although Bond Counsel is of the opinion that interest on the Bonds and Notes is excluded from gross income for federal income tax purposes and is exempt from income taxes imposed by the State of New York or any political subdivision thereof (including The City of New York), the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds and Notes may otherwise affect a Owner s federal or state tax liability. The nature and extent of these other tax consequences will depend upon the particular tax status of the Owner or the Owner s other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences. Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause 14

21 interest on the Bonds and Notes to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest. For example, certain recent legislative proposals have been made in recent years that would limit the exclusion from gross income of interest on obligations like the Bonds and Notes to some extent for taxpayers who are individuals and whose income is subject to higher marginal income tax rates. Other proposals have been made that could significantly reduce the benefit of, or otherwise affect, the exclusion from gross income of interest on obligations like the Bonds and Notes. The introduction or enactment of any such legislative proposals or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Bonds and Notes. Prospective purchasers of the Bonds and Notes should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, and regarding the impact of future legislation, regulations or litigation, as to which Bond Counsel expresses no opinion. LEGAL MATTERS Legal matters incident to the authorization, issuance and sale of the Bonds and Notes are subject to the respective approving legal opinions of Orrick, Herrington & Sutcliffe LLP, Bond Counsel. Bond Counsel s respective opinions will be in substantially the forms attached hereto as Appendix D. Disclosure Undertaking for the Bonds DISCLOSURE UNDERTAKINGS In accordance with the requirements of Rule 15c2-12, as the same may be amended or officially interpreted from time to time (the Rule ), promulgated by the Securities and Exchange Commission (the Commission ), the Village has agreed to provide, or cause to be provided, (1) to the Electronic Municipal Market Access ( EMMA ) system of the Municipal Securities Rulemaking Board ( MSRB ) or any other entity designated or authorized by the Commission to receive reports pursuant to the Rule, during each fiscal year in which the Bonds are outstanding, (i) certain annual financial information and operating data for the preceding fiscal year in a form generally consistent with the information contained or cross-referenced in the final Official Statement dated November 6, 2014 of the Village relating to the Bonds under the heading Litigation and in Appendix A under the headings The Village, Financial Factors Real Property Taxes, Village Indebtedness and Economic and Demographic Data and Appendix B by the end of the sixth month following the end of each succeeding fiscal year, commencing with the fiscal year ended December 31, 2014, and (ii) a copy of the audited financial statement, if any, (prepared in accordance with accounting principles generally accepted in the United States of America in effect at the time of the audit) for the preceding fiscal year, commencing with the fiscal year ended December 31, 2014; such audit, if any, will be so provided on or prior to the later of either the end of the sixth month of each such succeeding fiscal year or, if an audited financial statement is not available at that time, within sixty days following receipt by the Village of its audited financial statement for the preceding fiscal year, but, in any event, not later than the last business day of each such succeeding fiscal year; and provided further, in the event that the audited financial statement for any fiscal year is not available by the end of the sixth month following the end of any such succeeding fiscal year, unaudited financial statements in the form provided to the State, if available, will be provided no later than said date; provided however, that provision of unaudited financial statements in any year shall be further conditioned upon a determination by the Village of whether such provision is compliant with the requirements of federal securities laws including Rule 10b-5 of the Securities Exchange Act of 1934 and Rule 17(a)(2) of the Securities Act of 1933; (2) timely notice, not in excess of ten (10) business days after the occurrence of such event, of the occurrence of any of the following events: (i) principal and interest payment delinquencies; (ii) non-payment related defaults, if material; (iii) 15

22 unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) 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 of determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (vii) modifications to rights of Bondholders, if material; (viii) Bond calls, if material, and tender offers; (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Bonds, if material; (xi) rating changes; (xii) bankruptcy, insolvency, receivership or similar event of the Village; (xiii) the consummation of a merger, consolidation, or acquisition involving the Village or the sale of all or substantially all of the assets of the Village, 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; and (xiv) appointment of a successor or additional trustee or the change of name of a trustee, if material. Event (iii) is included pursuant to a letter for the SEC staff to the National Association of Bond Lawyers dated September 19, However, event (iii) is not applicable, since no debt service reserves will be established for the Bonds. With respect to event (iv) the Village does not undertake to provide any notice with respect to credit enhancement added after the primary offering of the Bonds. With respect to event (xii) above, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Village in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or government authority has assumed jurisdiction over substantially all of the assets or business of the Village, 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 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 Village. The Village may provide notice of the occurrence of certain other events, in addition to those listed above, if it determines that any such other event is material with respect to the Bonds; but the Village does not undertake to commit to provide any such notice of the occurrence of any event except those events listed above; and (3) in a timely manner, notice of a failure to provide the annual financial information and operating data and such audited financial statement by the date specified. The Village s Undertaking shall remain in full force and effect until such time as the principal of, redemption premiums, if any, and interest on the Bonds shall have been paid in full or in the event that those portions of the Securities and Exchange Commission Rule 15c2-12 ( Rule 15c2-12 ) which require the Undertaking, or such provision, as the case may be, do not or no longer apply to the Bonds. The sole and exclusive remedy for breach or default under the Undertaking is an action to compel specific performance of the undertakings of the Village, and no person or entity, including a Holder of the Bonds, shall be entitled to recover monetary damages thereunder under any circumstances. Any failure by the Village to comply with the Undertaking will not constitute a default with respect to the Bonds. The Village reserves the right to amend or modify the Undertaking under certain circumstances set forth therein; provided that any such amendment or modification will be done in a manner consistent with Rule 15c2-12, as amended. Since 2007, there have been in excess of 50 rating actions reported by Moody s Investors Service, Standard & Poor s Rating Corporation and Fitch Ratings affecting the municipal bond insurance companies, some of which had insured bonds previously issued by the Village. Due to widespread knowledge of these rating actions, material event notices were not filed by the Village in each instance. For the Village s fiscal years ending December 31, 2009, 2010, 2011, 2012 and 2013 the respective undertakings were filed on November 23, 2009, December 7, 2010, December 15, 2011, October 31, 2013, and June 27, For these same years audit reports were filed on November 23, 2009, December 7, 2010, December 15, 2011, October 31, 2013, and June 10, The 2011 and 2012 filings were last due to a misunderstanding that the required filing date was not the end of the succeeding fiscal year. The Village has been made aware of the correct filing dates and intends to file all future documents in a timely manor. In addition, the Village did not file a defeasance notice in 2012 in connection with the refunding of a series 2004 Bonds. 16

23 The Village is in compliance in all respects with all previous undertakings made pursuant to the Rule 15c2-12 during the last five years. Disclosure Undertaking for the Notes At the time of the delivery of the Notes, the Village will provide an executed copy of its Undertaking to Provide At the time of the delivery of the Notes, the Village will provide an executed copy of its Undertaking to Provide Material Event Notices (the Undertaking ). Said Undertaking will constitute a written agreement or contract of the Village for the benefit of holders of and owners of beneficial interests in the Notes, to provide, or cause to be provided, timely notice not in excess of ten (10) business days after the occurrence of any of the following events with respect to the Notes: (i) principal and interest payment delinquencies; (ii) non-payment related defaults, if material; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) 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 of determinations with respect to the tax status of the Notes, or other material events affecting the tax status of the Notes; (vii) modifications to rights of Noteholders, if material; (viii) Note calls, if material, and tender offers; (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Notes, if material; (xi) rating changes; (xii) bankruptcy, insolvency, receivership or similar event of the Village; (xiii) the consummation of a merger, consolidation, or acquisition involving the Village or the sale of all or substantially all of the assets of the Village, 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; and (xiv) appointment of a successor or additional trustee or the change of name of a trustee, if material. Event (iii) is included pursuant to a letter for the SEC staff to the National Association of Bond Lawyers dated September 19, However, event (iii) is not applicable, since no debt service reserves will be established for the Notes. With respect to event (iv) the Issuer does not undertake to provide any notice with respect to credit enhancement added after the primary offering of the Notes. With respect to event (xii) above, the event is considered to occur when any of the following occur: 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 other proceeding under state or federal law in which a court or government 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 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. The Village may provide notice of the occurrence of certain other events, in addition to those listed above, if it determines that any such other event is material with respect to the Notes; but the Village does not undertake to commit to provide any such notice of the occurrence of any material event except those events listed above. The Village s Undertaking shall remain in full force and effect until such time as the principal of, redemption premiums, if any, and interest on the Notes shall have been paid in full. The sole and exclusive remedy for breach or default under the Undertaking is an action to compel specific performance of the undertakings of the Village, and no person or entity, including a holder of the Notes, shall be entitled to recover monetary damages thereunder under any circumstances. Any failure by the Village to comply with the Undertaking will not constitute a default with respect to the Notes. 17

24 The Village reserves the right to amend or modify the Undertaking under certain circumstances set forth therein; provided that, any such amendment or modification will be done in a manner consistent with Rule 15c2-12 as then in effect. Since 2007, there have been in excess of 50 rating actions reported by Moody s Investors Service, Standard & Poor s Rating Corporation and Fitch Ratings affecting the municipal bond insurance companies, some of which had insured bonds previously issued by the Village. Due to widespread knowledge of these rating actions, material event notices were not filed by the Village in each instance. The Village is in compliance in all material respects with Rule 15c2-12 during the last five years. FINANCIAL ADVISOR Capital Markets Advisors, LLC, Hopewell Junction, New York, (the Financial Advisor ) has served as the independent financial advisor to the Village in connection with the sale of the Bonds and Notes. In preparing the Official Statement, the Financial Advisor has relied upon governmental officials, and other sources, who have access to relevant data to provide accurate information for the Official Statement, and the Financial Advisor has not been engaged, nor has it undertaken, to independently verify the accuracy of such information. The Financial Advisor is not a public accounting firm and has not been engaged by the Village to compile, review, examine or audit any information in the Official Statement in accordance with accounting standards. The Financial Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities and therefore will not participate in the underwriting of the Bonds and Notes. RATINGS Moody s Investors Service ( Moody s ) has assigned a MIG 1 rating to the Notes and an underlying rating of Aa2 to the outstanding uninsured bonded debt of the Village, including the Bonds Such rating reflects only the views of such organization and any desired explanation of the significance of such rating should be obtained from Moody s at the following address: 7 World Trade Center, 250 Greenwich Street, New York, New York There can be no assurance that such rating will continue for any specified period of time or that such rating will be revised or withdrawn, if in the judgment of Moody's circumstances so warrant. Any such change or withdrawal of such rating may have an adverse effect on the market price of the Bonds and Notes or the availability of a secondary market for the Bonds and Notes. ADDITIONAL INFORMATION Additional information may be obtained from the Treasurer of the Village, Thomas E. Warren, 16 Croton Avenue, Ossining, New York 10562, (914) , TWarren@villageofossining.org or from the Village s Financial Advisor, Capital Markets Advisors, LLC, 1075 Route 82 Suite 4, Hopewell Junction, New York, (845) and is also available at Any statements in this Official Statement involving matters of opinion or estimates, whether or not expressly so stated, are intended as such and not as representations of fact. No representation is made that any of such statements will be realized. This Official Statement is not to be construed as a contract or agreement between the Village and the original purchasers or holders of any of the Bonds and Notes. Statements in the Official Statement, and the documents included by specific reference, that are not historical facts are forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, 18

25 and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties, and which are based on the Village management s beliefs as well as assumptions made by, and information currently available to the Village s management and staff. Because the statements are based on expectations about future events and economic performance and are not statements of fact, actual results may differ materially from those projected. Important factors that could cause future results to differ include legislative and regulatory changes, changes in the economy, and other factors discussed in this and other documents that the Village s files with the MSRB. When used in Village documents or oral presentations, the words anticipate, believe, intend, plan, foresee, likely, estimate, expect, objective, projection, forecast, goal, will, or should, or similar words or phrases are intended to identify forward-looking statements. To the extent any statements made in this Official Statement involve matters of opinion or estimates, whether or not expressly stated, they are set forth as such and not as representations of fact, and no representation is made that any of the statements will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the holder of the Bonds and Notes. Orrick, Herrington & Sutcliffe LLP, New York, New York, Bond Counsel to the Village, expresses no opinion as to the accuracy or completeness of information in any documents prepared by or on behalf of the Village for use in connection with the offer and sale of the Bonds and Notes, including but not limited to, the financial or statistical information in this Official Statement. References herein to the Constitution of the State and various State and federal laws are only brief outlines of certain provisions thereof and do not purport to summarize or describe all of such provisions. Concurrently with the delivery of the Bonds and Notes, the Village will furnish a certificate to the effect that as of the date of the Official Statement, the Official Statement did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements herein, in the light of the circumstances under which they were made, not misleading, subject to limitation as to information in the Official Statement obtained from sources other than the Village, as to which no representation can be made. Capital Markets Advisors, LLC may place a copy of this Official Statement on its website at Unless this Official Statement specifically indicates otherwise, no statement on such website is included by specific reference or constitutes a part of this Official Statement. Capital Markets Advisors, LLC has prepared such website information for convenience, but no decisions should be made in reliance upon that information. Typographical or other errors may have occurred in converting original source documents to digital format, and neither the Village nor Capital Markets Advisors, LLC assumes any liability or responsibility for errors or omissions on such website. Further, Capital Markets Advisors, LLC and the Village disclaim any duty or obligation either to update or to maintain that information or any responsibility or liability for any damages caused by viruses in the electronic files on the website. Capital Markets Advisors, LLC and the Village also assume no liability or responsibility for any errors or omissions or for any updates to dated website information. This Official Statement is submitted only in connection with the sale of the Bonds and Notes by the Village and may not be reproduced or used in whole or in part for any other purpose. VILLAGE OF OSSINING WESTCHESTER COUNTY, NEW YORK DATED: November 6, 2014 By: /s/ Thomas E. Warren Treasurer and Chief Fiscal Officer 19

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27 APPENDIX A THE VILLAGE

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29 THE VILLAGE There follows in this Official Statement a brief description of the Village together with certain information concerning its governmental organization, economy, indebtedness and finances. General Information The Village was incorporated in 1813 and encompasses approximately 3.0 square miles within the Town of Ossining (the Town ). The Village is situated on the eastern bank of the Hudson River, approximately 30 miles north of New York City. The Village is residential in character with single-family and two-family as well as condominiums and apartments. Approximately 94% of the total area of the Village is classified residential; 4% is classified as open space; and 2% is classified as non-residential. In 2009 the Village of Ossining adopted a Comprehensive Plan which provides an overall vision for the Village of Ossining for the next ten to twenty years, in order to enhance the attractiveness and desirability of Ossining as a place to live. The Comprehensive Plan helps lay out a vision for the redevelopment of the waterfront and downtown areas of the Village with an emphasis on both residential and commercial development. Furthermore, in 2009 the Village of Ossining also adopted a new Zoning Code to implement the many recommendations in the Comprehensive Plan. These changes help promote and facilitate development in the waterfront areas along the Hudson River as well as the business districts including the downtown, Route 9 and Route 133 corridors. All of the zoning changes expand the development potential and the land use options for the waterfront and business districts. A State Correctional Facility, which occupies a 55-acre site in the Village, is the largest employer in the Village (current employment is estimated to be approximately 1,020). The Village's population, according to 2013 interim U.S. Census data, is estimated to be 25,382 (an increase of 322 persons or 1.3% since the 2010 U.S. census). Except for a decline of 6.75% recorded by the 1980 census, population in the Village has increased steadily with each official decennial census since Population trends for the County and State are generally comparable to the trends experienced by the Village during this period of time. Wealth levels in the Village are below County and State levels as a whole. According to the US Census Bureau (American Community Survey 5 Year Estimate), median family income in the Village for 2012 was $69,698 compared to $103,545 and $69,968 for families in the County and State, respectively. Approximately 34.8% of all families in the Village had annual incomes greater than $100,000. More than 51.6% of all families living in the County had incomes in excess of $100,000 for The percentage of families in the entire State reporting annual incomes of more than $100,000 in 2012 was 33.4%. Per capita income in the Village for 2012 was $29,240 compared to $48,385 for the County and $32,104 for the State as a whole. Unemployment statistics are not maintained for the Village. However, such statistics are maintained for the Town and the number of unemployed persons historically has been lower than for the County, State or nation taken as a whole. Form of Government The Village was established as a municipal government by the State and is vested with such powers and responsibilities inherent in the operation of municipal government, including the adoption of rules and regulations to govern its affairs. In addition, the Village may tax real property situated in its boundaries and issue debt subject to the provision of the Local Finance Law. There is one independent school district operating in the Village, which possesses the same powers with respect to taxation and debt issuance. Village residents also pay real property taxes to the Town and County to support programs administered by these governmental bodies. Government operations of the Village are subject to the provisions of the State Constitution and various statutes affecting village governments including Village Law, the General Municipal Law and the Local Finance Law. The Village has a special charter, which in many instances takes precedence over general statutory requirements. Real property assessment, collection, and enforcement procedures are determined by the Real Property Tax Law. A-1

30 Elected and Appointed Officials Elected Officials. The Village Board of Trustees is the legislative, appropriating, governing and policy determining body of the Village and consists of four trustees and a Mayor, all of whom are elected at large to serve two-year terms. The number of terms which may be served is not limited. It is the responsibility of the Village Board to enact, by resolution, all legislation including ordinances and local laws. Annual operating budgets for the Village must be approved by the Board; modifications and transfers between budgetary appropriations also must be authorized by the Board. The original issuance of all Village indebtedness is subject to approval by the Village Board. The Mayor is elected for a two-year term of office with the right to succeed himself. In addition, the Mayor is a full member of and the presiding officer of the Village Board. Appointed Officials. Pursuant to a public referendum held in 1968, the Village has a Village Manager who is appointed by the Village Board and serves at its pleasure. The Manager is the chief executive officer of the Village and is responsible for the day-to-day operations. The Manager appoints certain department heads and hires employees. The Manager serves as the Budget Officer of the Village. The Village Clerk is appointed by the Board for a four-year term. The responsibilities of the Clerk are many and varied. The Clerk has custody of the corporate seal, books, records, and papers of the Village, and all the official reports and communications of the Board of Trustees. In addition, the Clerk serves as the clerk to the Board of Trustees and various village boards and keeps the records of their proceedings. The Village Clerk is responsible for maintaining the Village code of laws and ordinances as it relates to the codes for building, plumbing, electric, zoning, vehicle and traffic regulations, and general ordinances. The Village Treasurer is appointed by the Village Manager subject to confirmation by the Board of Trustees. The Treasurer is the chief fiscal officer of the Village and also serves as the Comptroller for the Town pursuant to an intermunicipal agreement. Duties and responsibilities of the position are as follows: maintain the Village's accounting systems and records including the responsibility to prepare and file an annual financial report with the State Comptroller, custody and investment of Village funds, and debt management. In addition, the Treasurer is the tax collector responsible for collecting and enforcing delinquent Village taxes. Services The Village provides its residents with many of the services traditionally provided by village governments in the State. In addition, the Town and County furnish certain other services. A list of the services provided by the Village are as follows: police protection and law enforcement; water and sewer services; refuse collection (the Village is a member of County Refuse District No. 1); highway and public facilities maintenance; cultural and recreational activities; building code enforcement and; planning and zoning administration. The Ossining Public Library, sponsored by the Ossining School District, provides library services to Village residents. Fire protection is furnished by a volunteer fire department, which is funded as a Village function. Pursuant to State law, the County, not the Village, is responsible for funding and providing various social service and health care programs such as Medicaid, aid to the families with dependent children, home relief and mental health programs. The County is also responsible for certain sewer services for which purpose special county districts were established. A two-year community college, which is a member of the State University system, is sponsored by the County. (The remainder of this page has been left intentionally blank.) A-2

31 Employees (1) The Village employs 169 full-time employees and approximately 160 part-time and seasonal employees. Certain employees are represented by one of two unions. Clerical and certain laborers belong to the Civil Service Employees Association. The Ossining Police Benevolent Association is the collective bargaining agent for the police officers. The following tables summarize the contract status of each unit. (1) In negotiations. Contract Number of Union Expiration Employees Representation Date 52 Ossining Police Benevolent Assoc (1) 98 Civil Service Employees Assoc Source: Village Officials. Employee Benefits Substantially all employees of the Village are members of the New York State and Local Employees Retirement System ( ERS ) or the New York State and Local Police and Fire Retirement System ( PFRS ) (collectively, the Retirement System for both ERS and PFRS). The Retirement System is a cost-sharing multiple public employee retirement system. The obligation of employers and employees to contribute and the benefits to employees are governed by the New York State Retirement and Social Security Law (the Retirement System Law ). The Retirement System offers a wide range of plans and benefits which are related to years of service and final average salary, vesting of retirement benefits, death and disability benefits and optional methods of benefit payments. All benefits generally vest after five years of credited service. The Retirement System Law generally provides that all participating employers in the Retirement System are jointly and severally liable for any unfunded amounts. Such amounts are collected through annual billings to all participating employers. Generally, all employees, except certain part-time employees, participate in the Retirement System. The Retirement System is non-contributory with respect to members hired prior to July 27, All members hired on or after July 27, 1976 and before January 1, 2010 must contribute three percent of their gross annual salary toward the costs of retirement programs until they attain ten years in the Retirement System, at such time contributions become voluntary. On December 10, 2009, a Tier V pension was signed into law. The law is effective for new ERS and PFRS employees hired after January 1, 2010 and before April 2, New Tier V ERS employees will contribute 3% of their salaries and there is no provision for these contributions to cease after a certain period of service. On March 16, 2012, Governor Cuomo signed into law Chapter 18 of the Laws of 2012, which legislation provides for a Tier VI for employees hired after April 1, The new pension tier has progressive contribution rates between 3% and 6%; it increases the retirement age for new employees from 62 to 63 and includes provisions allowing early retirement with penalties. Under Tier VI, the pension multiplier will be 1.75% for the first 20 years of service and 2% thereafter; vesting will occur after 10 years; the time period for calculation of final average salary is increased from three years to five years; and the amount of overtime to be used to determine an employee s pension is capped at $15,000, indexed for inflation, for civilian and non-uniform employees and at 15% of base pay for uniformed employees outside of New York City. It also includes a voluntary, portable, defined contribution plan option for new non-union employees with salaries of $75,000 or more. No current employees were affected by the legislation. The New York State Retirement System allows municipalities to make employer contribution payments in December, at a discount, or the following February, as required. The Village generally opts to make pension payments in December to take advantage of the discount. Due to poor performance of the investment portfolio of the State Retirement System ( SRS ), the employer contribution rates for required pension contributions to the SRS have increased. To help mitigate the impact of such A-3

32 increases, legislation was enacted that permitted local governments to amortize a portion of such contributions. Under such legislation, local governments that choose to amortize will be required to set aside and reserve funds with the SRS for certain future rate increases. The Village has not and does not reasonably expect to amortize such contributions in the foreseeable future. Beginning July 1, 2013, a voluntary defined contribution plan option was made available to all unrepresented employees of New York State public employers hired on or after that date, and who earn $75,000 or more on an annual basis. In Spring 2013, the State and ERS approved a Stable Contribution Option ( SCO ), which modified its existing SCO adopted in 2010, that gives municipalities the ability to better manage spikes in Actuarially Required Contribution rates ( ARCs ). The plan allows municipalities to pay the SCO amount in lieu of the ARC amount. For ERS, the SCO rate is 12%. The Village will not participate in the SCO program. For Fiscal Year , the average contribution rate for ERS will decrease by 0.8% of payroll, from 20.9% to 20.1% and the average contribution rate for PFRS will decrease by 1.3% of payroll from 28.9% to 27.6%. Projections of required contributions will vary by employer depending on factors such as retirement plans, salaries and the distribution of their employees among the six retirement tiers. The employer contribution rates announced will apply to each employer s salary base during the period of April 1, 2014 through March 31, ERS and PFRS Contributions. For the years ended December 31, 2009 through 2013 and as budgeted for 2014, the Village s contributions to the ERS and PFRS are as follows: Fiscal Year Ended December 31: ERS PFRS 2009 $ 638,465 $ 866, ,140 1,001, ,270,320 1,271, ,596,992 1,538, ,738,790 1,775, (Budget) (1) 1,944,350 1,791,443 (1) Inclusive of all Village funds. Contributions to the various funds are as follows: General ($1,359,558), Water ($471,937), Sewer ($83,630) and Section 8 ($29,225). Source: Annual audited financial statements 2009 through 2013, and the 2014 adopted budget. The summary itself is not audited. See Notes to Financial Statements- Note 3-D in the audited financial statements. Other Postemployment Benefits GASB Statement No. 45 ( GASB 45 ) of the Governmental Accounting Standards Board ( GASB ) requires state and local governments to account for and report their costs associated with post-retirement healthcare benefits and other non-pension benefits ( OPEB ). GASB 45 generally requires that employers account for and report the annual cost of the OPEB and the outstanding obligations and commitments related to OPEB in essentially the same manner as they currently do for pensions. Under previous rules, these benefits have generally been administered on a payas-you-go basis and have not been reported as a liability on governmental financial statements. Only current payments to existing retirees were recorded as an expense. GASB 45 requires that state and local governments adopt the actuarial methodologies to determine annual OPEB costs. Annual OPEB cost for most employers will be based on actuarially determined amounts that, if paid on an ongoing basis, generally would provide sufficient resources to pay benefits as they come due. A-4

33 Under GASB 45, based on actuarial valuation, an annual required contribution ( ARC ) is determined for each state or local government. The ARC is the sum of (a) the normal cost for the year (the present value of future benefits being earned by current employees) plus (b) amortization of the unfunded accrued liability (benefits already earned by current and former employees but not yet provided for), using an amortization period of not more than 30 years. If a municipality contributes an amount less than the ARC, a net OPEB obligation will result, which is required to be recorded as a liability on its financial statements. GASB 45 does not require that the unfunded liabilities actually be funded, only that the Village account for its unfunded accrued liability and compliance in meeting its ARC. Actuarial valuation is required every two years for the Village. The Village s funding policy is to contribute the current annual premium (net of employee contributions) for retired participants (i.e. pay-as-you-go). Current New York State law does not permit municipalities to pre-fund medical benefit obligations. For the fiscal year the Village contributed $2,490,000. The Village is in compliance with the requirements of GASB 45. The Village has determined that its unfunded actuarial accrued liability ( UAAL ) for OPEB as of January 1, 2013 was $70,920,000. For the year ended December 31, 2013, the Village's ARC was $6,730,000. The Village s unfunded actuarial accrued OPEB liability could have a material adverse impact upon the Village s finances and could force the Village to reduce services, raise taxes or both. There is no authority in current State law to establish a trust account or reserve fund for this liability. The Village continues funding the expenditure on a pay-as-you-go basis. See Notes to Financial Statements- Note 3-H in the audited financial statements for the year ended December 31, Budgetary Procedure FINANCIAL FACTORS The Village Manager, who is also the budget officer of the Village, submits the tentative budget for the next fiscal year to the Board of Trustees during the first week of November. The Board of Trustees may make such changes or revisions as they deem appropriate subject to the provision of law. A public hearing is held on the budget at the second regularly scheduled board meeting in November. Members of the public may express their views on the budget but there is no provision for a formal vote on the budget. Following the public hearing and on or before the first Wednesday of December the Board adopts the final budget. A copy of such budget must be filed with the Village Clerk and is available for public inspection. Budgetary control is the responsibility of the Village Manager. Formal integration of the budget with the accounting system is used during the year as a management tool to provide control over expenditures. A summary of the adopted budget for the fiscal year ending December 31, 2014 is presented in Appendix B hereto. Independent Audits The Village retained the firm of O'Connor Davies, LLP to audit its financial statements for the fiscal year ending December 31, The Village's audited general purpose financial statements, the notes thereto and the auditors' report thereon for the year ended December 31, 2013 are attached as a part of this Official Statement (see Appendix C, herein). Additional Village audits are on file with the Municipal Securities Rulemaking Board ( or may be obtained by request from the Village or from the Village s Financial Advisor. See Additional Information herein. In addition, the Village is subject to audit by the State Comptroller to review compliance with legal requirements and the rules and regulations established by the State. See The State Comptroller s Fiscal Stress Monitoring System, herein. A-5

34 Summary of Significant Accounting Policies See Notes to Financial Statements- Note 1 in the Audited Financial Statements for the year ended December 31, 2013, herein. Certain Information Obtained from Financial Statements Summary financial statements for the five years ended December 31, 2009 through December 31, 2013 are presented in Appendix B hereto. Such statements were compiled from the audited financial statements of the Village, however, the presentation of these statements has not been audited. The statements are not considered audited under auditing standards generally accepted in the United States of America because the notes to the statements and the auditors' report thereon have been omitted. Copies of the Village's audited financial statements will be made available upon request to the Village s Financial Advisor. Investment Policy Pursuant to Section 39 of the State's General Municipal Law, the Village has adopted an investment policy applicable to the investment of all moneys and financial resources of the Village. The responsibility for the investment program has been delegated by the Village Board to the Treasurer who was required to establish written operating procedures consistent with the Village's investment policy guidelines. According to the investment policy of the Village, all investments must conform to the applicable requirements of law and provide for: the safety of the principal; sufficient liquidity; and a reasonable rate of return. The Village reviews its investment policy each year. Authorized Investments. The Village has designated twelve banks or trust companies which are located and authorized to conduct business in the State to receive deposits of money, including certificates of deposits, from the Village. In addition, the Village is authorized to invest through an investment cooperative. Deposit limits of $7,000,000 to $10,000,000 have been established for these institutions. In addition to bank deposits, the Village is permitted to invest moneys in direct obligations of the United States of America, obligations guaranteed by agencies of the United States where the payment of principal and interest are further guaranteed by the United States of America and obligations of the State. Other eligible investments for the Village include: revenue and tax anticipation notes issued by any municipality, school district or district corporation other than the Village (investment subject to approval of the State Comptroller); obligations of certain public authorities or agencies; obligations issued pursuant to Section 109(b) of the General Municipal Law (certificates of participation) and certain obligations of the Village, but only with respect to moneys of a reserve fund established pursuant to Section 6 of the General Municipal Law. The Village is also authorized to invest moneys with an investment cooperative program. The Village may also utilize repurchase agreements to the extent such agreements are based upon direct or guaranteed obligations of the United States of America. Repurchase agreements are subject to the following restrictions, among others: all repurchase agreements are subject to a master repurchase agreement; trading partners are limited to banks or trust companies authorized to conduct business in the State or primary reporting dealers as designated by the Federal Reserve Bank of New York; securities may not be substituted; and the custodian for the repurchase security must be a party other than the trading partner. All purchased obligations, unless registered or inscribed in the name of the Village, must be purchased through, delivered to and held in the custody of a bank or trust company located and authorized to conduct business in the State. Reverse redemption agreements are not allowed under State law. Collateral Requirements. All Village deposits in excess of the applicable insurance coverage provided by the Federal Deposit Insurance Act must be secured in accordance with the provisions of and subject to the limitations of Section 10 of the General Municipal Law of the State. Such collateral must consist of the eligible securities, as defined in the situation. Eligible securities pledged to secure deposits must be held by the depository or third party bank or trust company pursuant to written security and custodial agreements. The Village's security agreements provide that the aggregate market value of pledged securities must equal the principal amount of deposits, the agreed upon interest, if any, and any costs or expenses arising from the collection of such deposits in the event of a default. Securities not registered or inscribed in the name of the Village must be delivered, in a form suitable for transfer or with an assignment in A-6

35 blank, to the Village or its designated custodial bank. The custodial agreements used by the Village provide that pledged securities must be kept separate and apart from the general assets of the custodian and will not, under any circumstances, be commingled with or become part of the backing for any other deposit or liability. The custodial agreement must also provide that the custodian shall confirm the receipt, substitution or release of the collateral, the frequency of revaluation of eligible securities and the substitution of collateral when a change in the rating of a security may cause ineligibility. An eligible irrevocable letter or credit may be issued, in favor of the Village, by a qualified bank other than the depository bank. Such letters may have a term not to exceed 90 days and must have an aggregate value equal to 140% of the deposit obligations and the agreed upon interest. Qualified banks include those with commercial paper or other unsecured or short-term debt ratings within one of the three highest categories assigned by at least one nationally recognized statistical rating organization or a bank that is in compliance with applicable Federal minimum risk-based capital requirements. An eligible surety bond must be underwritten by an insurance company authorized to do business in the State which has claims paying ability rated in the highest rating category for claims paying ability by at least two nationally recognized statistical rating organizations. The surety bond must be payable to the Village in an amount equal to 100% of the aggregate deposits and the agreed interest thereon. Results of Operations Fiscal Year Ended December 31, 2013 General Fund. For the year ended December 31, 2013, the General Fund recorded a deficit of $394,825 and ended the year with a fund balance of $6,839,529. The Village s 2014 adopted budget provided for a planned draw down of $650,000 in fund balance. The 2013 General Fund balance consisted of unassigned funds of $5,005,802, assigned funds of $754,765, non-spendable funds of $907,779, restricted funds of $165,713 and committed funds of $5,470. Unassigned funds represented approximately 73.2% of fund balance in the General Fund at December 31, The sum of all revenue and other financing sources for the General Fund in 2013 was $30,736,789. Real property tax revenue was $20,007,882 or approximately 65.1% of this total. The Village receives a share of the County sales tax pursuant to special State legislation enacted in For 2013, the Village reported sales tax revenue of $3,525,138 which accounted for approximately 11.5% of the General Fund s total revenue and other financing sources for the year. State aid to the Village of $540,403 made up only approximately 1.8% of all General Fund revenue and other financing sources in Certain other significant municipally generated revenues for 2013 included: intergovernmental charges ($1,341,846), franchise fees and utility gross receipts ($729,094); fines and forfeitures ($433,690), parking and recreation fees ($491,391), and refuse and garbage charges ($371,061). Other financing sources totaled $523,428, including $349,537 from insurance recoveries and $173,891from transfers ($98,891 from the Special Purpose Fund and $75,000 from the Debt Service Fund). General Fund expenditures and other financing uses were $31,131,614 for the year ended December 31, The Village police department, excluding employee benefits, accounted for $6,955,679 or approximately 22.3% of this total. Other major expenditures for the Village during 2013 were: employee benefits ($10,361,154); culture and recreation ($2,550,465); street administration, maintenance, and snow removal ($1,950,021); refuse and garbage ($1,320,738); and debt service ($1,575,232) of which $1,573,690 was recorded as an operating transfer-out to the Debt Service Fund. Water Fund. For the year ended December 31, 2013, the Water Fund recorded a surplus of $356,368 and ended the year with a total fund balance of $5,810,789. For the year fund balance consisted of $5,472,994 in assigned funds, $215,372 in restricted funds, and $122,423 in non-spendable funds. The assigned portion of the fund balance made up approximately 94.2% of total fund balance for The operating surplus for 2013 was primarily a result of favorable budgetary variances in all revenue and expenditure sources. The total favorable budgetary variance for revenue sources was $135,834, $903,796 for expenditures, and $19,915 for other financing sources and uses. A-7

36 Water Fund operations are financed primarily through user charges to customers. The 2013 fiscal year water rates were $6.64 per 100 cubic feet for customers within Village limits and $9.95 per 100 cubic feet for outside Village customers. For 2014, water rates were increased to $6.77 and $10.15 per 100 cubic feet, respectively. Total revenue and other financing sources for the Water Fund in 2013 was $9,179,790 of which $8,987,442 was derived from departmental charges. Delinquent water rents are assessed a 5% penalty. The Village also may terminate water service for non-payment. Current water rent bills which are unpaid for at least six months are relevied as a part of the property owners real property tax in the following year, and the Water Fund is reimbursed 100% by the General Fund. Thereafter, such items are collected and enforced in the same manner as real property taxes (see Real Property Taxes, below). The Village relevied $329,088 of delinquent water rents in 2013 and $358,789 in In addition, in 2013 and 2014 the Town relevied $58,134 and $66,217of delinquent water rents for water customers outside of Village limits, respectively. Sewer Fund. The Sewer Fund recorded a surplus of $220,578 for year ended December 31, 2013 and concluded the year with a total fund balance of $1,487,120. At December 31, 2013 fund balance consisted of $1,467,569 in assigned funds and $19,551 in non-spendable funds. Total revenue recorded by the Sewer Fund in 2013 were $1,201,562. The primary source of income for the fund is generated by departmental fees which totaled $1,188,359 during The 2013 fiscal year sewer rates for in Village customers was $1.44 per 100 cubic foot. For 2014 sewer rates were increased by $0.21 to $1.65. Delinquent sewer bills are assessed a penalty of 5%. Current sewer rent billings which are unpaid for at least one year are relevied on the property owner's tax bill for the next year. The Sewer Fund receives 100% reimbursement from the General Fund for all amounts relevied. Following the relevy, sewer delinquencies are treated and enforced as real property taxes (see Real Property Taxes, below). The Village relevied $67,125 of delinquent sewer rents in 2013 and $73,043 in Revenues The following table sets forth the percentage of General Fund revenue of the Village comprised of real property taxes and sales tax for each of the fiscal years 2009 through 2013, and, as budgeted, for 2014: Real Property Year Total Real Taxes/ Sales Tax/ Ended General Fund Property General Fund General Fund December 31: Revenue (1) Taxes Revenue (%) Sales Tax Revenue (%) 2009 $25,955,971 $16,823, % $2,939, % ,845,117 17,593, ,162, ,698,531 19,034, ,259, ,068,219 19,516, ,306, ,736,789 20,007, ,525, (Budget) (2) 30,880,182 20,875, ,500, (1) Includes other financing sources. (2) Exclusive of the planned use of $650,000 in fund balance. Source: The annual audited financial statements for 2009 through 2013 and the 2014 adopted budget of the Village. The summary itself is not audited. Sales Tax. The Village receives a share of the County sales tax. The County presently imposes a 1 ½% Countywide sales and use tax on all retail sales. Additionally, the State, effective May 1, 2005, imposes a 4% State sales tax and a 3/8% sales tax levied in the Metropolitan Transportation Authority District. The cities in the County have the power under State law to impose by local law and State legislative enactment their own sales and use taxes. At present, such taxes are imposed at a rate of 2½% in the Cities of White Plains, Mount Vernon, New Rochelle, and Yonkers. The Cities of Rye and Peekskill do not impose such a sales tax. A-8

37 In July 1991, the State Legislature authorized an additional 1% sales tax for the County to impose in localities other than cities which have their own sales tax. This additional 1% sales tax became effective on October 15, 1991 and has been extended through May 31, The additional 1% sales tax is to be apportioned between the County (33 1/3%), school districts in the County (16 2/3%) and towns, villages and cities in the County which have imposed sales taxes (50%) In February of 2004, the State Legislature authorized an increase of ½% to the additional 1% 1991 sales tax. The County retains 70% of this amount, the municipalities 20% and the school districts 10%. This increase became effective March 1, 2004 and expires on May 31, State Aid. The Village receives financial assistance from the State. Including other financing sources, State Aid ($540,403) accounted for approximately 1.8% of total General Fund revenue, including other financing sources, during the 2013 fiscal year. If the State should experience difficulty in borrowing funds in anticipation of the receipt of State taxes in order to pay State aid to municipalities and school districts in the State, including the Village, in any year or future years, the Village may be affected by a delay in the receipt of State aid until sufficient State taxes have been received by the State to make State aid payments. Additionally, if the State should not adopt its budget in a timely manner, municipalities and school districts in the State, including the Village, may be affected by a delay in the payment of State aid. The State is not constitutionally obligated to maintain or continue State aid to the Village. No assurance can be given that present State aid levels will be maintained in the future. State budgetary restrictions which eliminate or substantially reduce State aid could have a material adverse affect upon the Village, requiring either a counterbalancing increase in revenues from other sources to the extent available, or a curtailment of expenditures. See also Market Factors Affecting Financings of the State and Municipalities of the State, herein. The following table sets forth total General Fund revenue and State aid received for each of the past five audited fiscal years and the amount budgeted for the most recent fiscal year. General Fund Revenue & State Aid Revenue Total State Aid to Fiscal Year Ended General Fund State General Fund December 31: Revenue (1) Aid Revenue 2009 $25,955,971 $468, % ,845, , ,698, , ,068, , ,736, , (Budget) (2) 30,880, , (1) Includes other financing sources. (2) Exclusive of the planned use of $650,000 in fund balance. Source: The annual audited financial statements for 2009 through 2013 and the 2014 adopted budget of the Village. The summary itself is not audited. (The remainder of this page has been intentionally left blank.) A-9

38 REAL PROPERTY TAXES The Village derives its power to levy an ad valorem real property tax from the Constitution of the State. The Village's power to levy real property taxes, other than for debt service and certain other purposes, are limited by the State Constitution to two percent of the five-year average full valuation of taxable property of the Village. Computation of Real Estate Property Tax Levying Limitation Year Ending December 31, 2014 Year Ended December 31: Full Valuation Of Real Estate 2010 $ 2,206,246, ,040,533, ,928,036, ,823,090, ,775,673,052 Total of Full Valuations 9,773,580,598 Five-Year Average Full Valuation 1,954,716,120 Tax Limit (2% of Average Full Valuation) 39,094, Tax Levy for General Village Purposes 20,875,424 Total of Items Excluded from Tax Limit (1) 2,914,840 Tax Levy Subject to Tax Limit $ 17,960,584 Percentage of Tax Limit Exhausted 45.94% Constitutional Tax Margin $ 21,133,738 (1) Debt service exclusion. Source: Statement of Constitutional Tax Limit for the year ending December 31, (The remainder of this space has been left intentionally blank.) A-10

39 Real Property Taxes, Assessments and Rates Real Property taxes accounted for approximately 65.1% of total General Fund revenue (including other financing sources) for the fiscal year ended December 31, 2013 (See Financial Factors Revenues, herein). The following table shows the trend during the last five years for real property assessments, real property tax and assessment levies, general purpose tax rates. Valuations, Tax Rates and Tax Levies Tax Rate State Per $1,000 Years Ended Assessed Equalization Full Assessed Gross Tax December 31: Valuation Rate (1) Valuation Valuation Levy (2) 2010 $112,959, % $2,206,246,426 $ $18,247, ,453, ,040,533, ,387, ,790, ,928,036, ,122, ,208, ,823,090, ,619, ,689, ,775,673, ,318,312 (1) The ORPTS. (2) Includes water and sewer rent relevies and miscellaneous levies. Source: Statement of Constitutional Tax Limit for the year ending December 31, 2014 and Village Tax Warrants. Tax Collection Procedures The Village Board levies real property taxes pursuant to resolution and such taxes become a lien on the first day of January. Taxes may be paid in two installments in the months of January and July. The first installment may be paid without penalty through January 31. The second installment must be paid by July 31 in order to avoid the penalty. Payments made after the due dates must include a 5% penalty for the first month or fraction thereof and an additional 1% penalty for each month or part of a month thereafter. Unpaid real property taxes are enforced pursuant to Article 11 of the Real Property Tax Law. The State made certain changes to this law in 1995 which eliminated annual tax sales and reduced the period for redeeming unpaid taxes to two years from the lien date. A notice of unpaid taxes is mailed to the property owner approximately 30 days following the last day on which a tax installment payment may be made without penalty. Subsequent notices are mailed periodically through the time the Village records a tax lien on its book. The Village generally records such liens on the first Monday in May in the calendar year following the lien date. If the taxes remain unpaid for a period of two years from the lien date, the Village may foreclose on the related property. A notice of foreclosure is filed with the State Supreme or County Court three months prior to the expiration of the redemption period. The Village may sell any property acquired for taxes to highest bidder at a public auction or in-lieu of such auction by approval of the Village Board. The Village and the Town have a cooperative agreement covering situations where both parties have taken liens for unpaid taxes. Under this agreement, the municipality which conducts the foreclosure actions remits to the other its share of the net proceeds. (The remainder of this page has been left intentionally blank.) A-11

40 The following table sets forth the annual real property tax levy and the record of current tax collections of the Village for the last five completed years and the current year through October 20, Real Property Tax Levies and Collections Gross Taxes Collected Collected Uncollected At % Uncollected Years Ended Tax During Current Tax Lien Tax Lien December 31: Levy (1) Current Year (2) Basis (%) Date (4) Date 2010 $18,247,409 $17,626, % $178, % ,387,823 19,016, , ,122,280 19,728, , ,619,302 20,257, (3) 238, ,318,312 20,696,108 (3) (3) N/A N/A (1) Includes water and sewer rent relevies and miscellaneous levies. (2) Includes only principal amount of the current year tax warrant collected. (3) Collections as of October 20, (4) Lien date is May 25 following the year of the tax levy. Source: Village Officials. Ten of the Largest Taxpayers The following table set forth the property assessments of the Village's larger taxpayers as shown on the roll used to levy real property taxes for Larger Taxable Properties in the Village 2013 Tax Roll (For the Collection of 2014 Taxes) Percent of Assessed Total Assessed Taxpayer Classification Valuation (1) Valuation Con Edison Co Of N Y Utility $ 4,553, % Scarborough Manor Owners Co-op Apartments 1,874, Urstadt Biddle Properties Inc (2) Shopping Center 1,840, OLSL Hudson LLC Senior Citizens Housing 1,189, Jefferson House Assoc LLC Apartments 1,080, Parkview Apartments Corp Co-op Apartments 1,045, High Meadow Coop No 1 Co-op Apartments 984, Cortland Ridge LLC Apartments 833, Verizon New York Inc. Utility 785, High Terrace Owners Corp. Co-op Apartments 712, Total $ 14,899, % (1) Total taxable assessed valuations for 2014 are $111,689,835. (2) See Litigation herein for a discussion of pending tax certiorari claims. Many Village taxpayers have had claims pending for one or multiple years. Source: Village Officials. A-12

41 VILLAGE INDEBTEDNESS Constitutional Requirements The State Constitution limits the power of the Village (and other municipalities and school districts of the State) to issue obligations and to contract indebtedness. Such constitutional limitations include the following, in summary form, and are generally applicable to the Village and its obligations. Purpose and Pledge. Subject to certain enumerated exceptions, the Village shall not give or loan any money or property to or in aid of any individual or private corporation or give or loan its credit to or in aid of any of the foregoing or any public corporation. The Village may contract indebtedness only for a Village purpose and shall pledge its faith and credit for the payment of principal of and interest thereon. Payment and Maturity. Except for certain short-term indebtedness contracted in anticipation of taxes or to be paid within three fiscal year periods, indebtedness shall be paid in annual installments commencing no later than two years after the date such indebtedness shall have been contracted and ending no later than the expiration of the period of probable usefulness of the object or purpose as determined by statute or, in the alternative, if substantially level or declining debt service is utilized, the weighted average period of probable usefulness of the several objects or purposes for which it is contracted. No installment may be more than fifty per centum in excess of the smallest prior installment unless the Village Board of Trustees provides for substantially level or declining annual debt service in the manner prescribed by the State Legislature. The Village is required to provide an annual appropriation for the payment of interest due during the year on its indebtedness and for the amounts required in such year for amortization and redemption of its serial bonds and such required annual installments on its notes. Debt Limit. The Village has the power to contract indebtedness for various authorized Village purposes so long as the principal amount thereof shall not exceed seven per centum of average full valuation of taxable real estate of the Village, subject to certain enumerated exclusions and deductions such as water and revenue producing facilities and cash or appropriations for current debt service. The constitutional method for determining full valuation consists of dividing the total assessed valuation of taxable real estate for a specified assessment roll by the final equalization rate established for such assessment roll by the State Office of Real Property Tax Services ( ORPTS ). The State Legislature is required to prescribe the manner by which such rate shall be determined. Average full valuation is determined by taking the sum of the full valuation of such last completed assessment roll and the four preceding completed assessment rolls and dividing such sum by five. Statutory Procedure In general, the State Legislature has authorized the power and procedure for the Village to borrow and incur indebtedness subject, of course, to the constitutional provisions set forth above. The power to spend money, however, generally derives from other law, including the Village Law and the General Municipal Law. Pursuant to the Local Finance Law, the Village authorizes the incurrence of indebtedness, including bonds and bond anticipation notes issued in anticipation of such bonds, by the adoption of a resolution, approved by at least twothirds of the members of the Village Board, the finance board of the Village. Certain such resolutions may be subject to permissive referendum, or may be submitted to the Village voters at the discretion of the Village Board. The Local Finance Law also provides for a twenty-day statute of limitations after publication of a bond resolution (in summary or in full), together with a statutory notice which, in effect, estops thereafter legal challenges to the validity of obligations authorized by such bond resolution, except for alleged constitutional violations. The Village has complied with such procedure for the validation of the bond resolution adopted in connection with this issuance. Each bond resolution usually authorizes the construction, acquisition or installation of the object or purpose to be financed, sets forth the plan of financing and specifies the maximum maturity of the bonds subject to the legal (Constitution, Local Finance Law and case law) restrictions relating to the period of probable usefulness with respect thereto. A-13

42 Each bond resolution also authorizes the issuance of bond anticipation notes prior to the issuance of serial bonds. Statutory law in New York permits notes to be renewed each year provided that principal is amortized and provided that such renewals do not (with certain exceptions) extend more than five years beyond the original date of borrowing. However, notes issued in anticipation of the sale of serial bonds for assessable improvements are not subject to such five year limit and may be renewed subject to annual reductions of principal for the entire period of probable usefulness of the purpose for which such notes were originally issued (see Payment and Maturity under Constitutional Requirements. ) In addition, under each bond resolution, the Village Board may delegate the power to issue and sell bonds and notes to the Treasurer, the chief fiscal officer of the Village. In general, the Local Finance Law contains similar provisions providing the Village with power to issue general obligation revenue anticipation notes, tax anticipation notes, capital notes, deficiency notes and budget notes. Constitutional Debt-Contracting Limitation ORPTS annually establishes State equalization rates for all assessing units in the State, including the Village, which are determined by statistical sampling of market/assessment studies. The equalization rates are used in the calculation and distribution of certain state aids and are used by many localities in the calculation of debt contracting and real property taxing limitations. The Village is not subject to a constitutional real property taxing limitation but has a debt contracting limitation equal to seven percent (7%) of average full valuation (See Constitutional Requirements, Debt Limit, herein). See also Tax Levy Limitation Law herein. The Village determines the assessed valuation for taxable real properties. The ORPTS determines the assessed valuation of special franchises and the taxable ceiling of railroad property. Special franchises include assessments on certain specialized equipment of utilities under, above, upon or through public streets or public places. Certain properties are taxable for school purposes but exempt for Village purposes. Computation of Constitutional Debt Contracting Limitation As of October 16, 2014 For Fiscal Year Ended Assessed Equalization Full December 31: Valuations Rate (1) Valuations 2010 $112,959, % $2,206,246, ,453, ,040,533, ,790, ,928,036, ,208, ,823,090, ,689, ,775,673,052 Total Five-Year Full Valuation $9,773,580,598 Five-Year Average Full Valuation $ 1,954, Debt Contracting Limitations: 7% of Five-Year Average Full Valuation $ 136,830,128 (1) Final rates as established by the New York State ORPTS. A-14

43 The following table, based on information furnished by the Village, presents the debt-incurring power of the Village and shows that the Village is within its constitutional debt limit. Statement of Debt Contracting Power As of October 16, 2014 Amount Percentage Debt Contracting Limitation: $136,830, % Gross debt: Serial Bonds (1) 26,136, Bond Anticipation Notes 3,979, Total Gross Debt 30,115, Less Exclusions: Unexpended Appropriations To Pay Non-Exempt Principal Debt 657, Water Indebtedness (2) Bonds 9,220, Total Exclusions 9,877, Net Indebtedness 20,238, Net Debt Contracting Margin $116,591, % (1) Exclusive of energy performance contract obligation ($924,844 outstanding as of January 1, 2014). (2) Exempt under Article VIII Section 5(b) of the State Constitution. Short-Term Indebtedness The Village is authorized under Local Finance Law to issue short-term notes for various purposes including temporary financing of capital projects, the anticipation of certain operating revenues and emergency funds for budgetary expenditures. Subject to the provisions of the law, notes generally may be renewed from time to time and must be retired within specific time limits which vary, according to the type of note, from one year to five years in the case of bond anticipation notes. The Village has not issued tax anticipation notes or revenue anticipation notes during the last five years and does not anticipate a need for such financing in the foreseeable future. Budget notes have not been issued since The following table presents a summary of short-term notes outstanding at the end of each fiscal year 2009 through Short-Term Indebtedness For Year Ended December 31: Note Type Bond Anticipation Notes $4,581,000 $1,509,000 $891,500 $2,256,533 $3,979,493 A-15

44 Energy Performance Contract Debt The Village, in 2012, entered into a contractual agreement to install energy saving equipment and/or upgrade existing facilities in order to assist the Village in reducing its ongoing energy costs. The terms of the agreement provide for monthly installments of $8,046 through The payments include interest which is based on a variable rate that is re-set every January. Currently, the applicable interest rate is 0.86%. The balance due at December 31, 2013 was $924,844. Bond Anticipation Notes The following table sets forth the total amount of bond anticipation notes outstanding as of October 16, All on the bond anticipation notes mature on November 19, Bond Anticipation Notes As of October 16, 2014 Purpose Notes Outstanding IBW Reservoir Dam $ 1,425,000 Police Vehicles 46,667 SCBA Cylinder Replacement 28,160 Fire Chief's Vehicle 11,666 Sing Sing Kill Brook Sewer Improvements 2,300,000 Police Vehicles 80,000 Fire Chief's Vehicle 48,000 DPW Truck 40,000 (1) (1) (1) (1) (2) (1) (1) (1) $3,979,493 (1) To be redeemed at maturity with proceeds of the Notes and available funds. See Authority of and Purpose for the Notes, herein. (2) To be permanently financed at maturity with proceeds of the Bonds and available funds. See Authority of and Purpose for the Bonds, herein. Trend of Capital Debt The following table sets forth the total amount of bonds outstanding at the end of the last five years. Bonded Debt History Years Ended Bonded December 31: Debt (1) 2009 $21,140, ,780, ,995, ,607, ,396,500 (1) Exclusive of energy performance contract obligation ($924,844 outstanding as of December 31, 2013). A-16

45 Recent Financings. The Village last publicly offered bonds on November 7, 2013 at which time $3,086,500 Public Improvement (Serial) Bonds, 2013 were sold. The bonds bear true interest rates of 3.27% and serially mature on November 1, 2014 and each year thereafter through the year Capital Improvement Plan. The five-year capital plan submitted to the Village Board for the years 2014 through 2018 estimates total capital spending for General, Water, and Sewer purposes will be approximately $18.8 million. Village officials expect the capital improvements will be paid from a combination of debt, grants and internal funds. The Village expects to spend approximately $5.1 million on vehicles and equipment and $8.5 million on various water improvements during the years 2014 through A summary of the five-year plan is presented in the table below. Fund 2014 (1) Total General $ 3,837,000 $ 2,655,000 $1,070,000 $1,775,000 $ 958,000 $10,295,000 Water 3,510,000 1,665, , ,000 3,100,000 8,475,000 Sewer $ 7,347,000 $4,320,000 $1,170,000 $1,875,000 $4,058,000 $18,770,000 (1) Board Approved. Source: The 2014 adopted budget of the Village. Overlapping Debt The real property taxpayers of the Village are responsible for a proportionate share of outstanding debt of the County including special County Districts, the Town and the Ossining Union Free School District. Such taxpayers' share of this overlapping debt is based upon the amount of the Village's equalized property values taken as a percentage of each separate units' total values. The following table presents the estimated amount of overlapping debt and the Village's share thereof; authorized but unissued debt and energy performance contracts debt has not been included. Statement of Net Direct and Overlapping Indebtedness Gross Direct Indebtedness $ 30,115,993 Exclusions and Deductions (9,877,799) Net Direct Indebtedness $ 20,238,194 Net Applicable Net Date of Overlapping Percentage Overlapping Overlapping Units Report Debt Applicable Debt County: (1) General Purpose $615,457, % $ 7,508,585 Sewer Debt 464,891, ,946,733 Refuse Disposal District No. 1 17,814, ,754 Town (2) ,513, ,906,117 Ossining UFSD (3) ,135, ,409,449 Total $37,025,638 (1) Excludes water debt of approximately $10.6 million. (2) Excludes water debt of approximately $0.5 million. (3) Excludes estimated State school building aid of $12.8 million. Source County, Town officials and the Municipal Securities Rulemaking Board. A-17

46 Debt Ratios The following table sets forth certain debt ratios based upon the Village's direct and overlapping debt. Direct and Overlapping Debt Ratios As of October 16, 2014 Debt Per Ratio Debt To Ratio Debt To Per Capita Amount Capita (1) Full Value (2) Income (3) Gross Direct Debt $30,115,993 $1, % Net Direct Debt 20,238, Net Direct and Overlapping Debt 57,263,832 2, (1) The Village's population, according to 2013 interim U.S. Census data, is estimated to be 25,382 persons. (2) The full valuation of the Village for 2014 is $1,775,673,052. (3) According to the US Census Bureau (American Community Survey 5 Year Estimate), the per capita income of Village residents for 2012 was $29,240. Authorized but Unissued Debt Excluding the Bonds and Notes, the Village will have approximately $1.5 million in authorized but unissued debt. Open authorizations will include $1,500,000 for dam and reservoir improvements, $8,907 for sewer purposes, and $50,000 for water purposes. The Village is in the process of developing the tentative budget and capital plan for However, at this time it is to early to determine what the Villages capital needs will be. It is anticipated that they will issue debt to finance a similar amount of projects as in past years. Aside from this, the Village has no borrowing plans in the foreseeable future. (The remainder of this page has been left intentionally blank.) A-18

47 Debt Service Schedule The following table presents the debt service requirements to maturity on the Village's outstanding general obligation bonded indebtedness, including Energy Performance Contract Debt and the Bonds. Outstanding Bonds: Years Total Cumulative Ending Principal Interest Debt % Principal Dec. 31: Payment Payment Service Paid (1) $2,286,500 $ 911,445 $3,197, % ,628, ,269 3,571, ,660, ,431 3,522, ,395, ,706 3,172, ,325, ,781 3,026, ,165, ,269 2,799, ,105, ,781 2,676, ,060, ,444 2,570, ,800, ,969 2,252, ,780, ,275 2,180, ,785, ,400 2,125, ,265, ,969 1,544, ,285, ,925 1,523, ,250, ,175 1,445, , ,163 1,142, ,005, ,144 1,123, ,000 82,400 1,022, ,000 47, , ,000 29, , ,000 15, , ,000 4, ,713 $32,114,500 $8,270,591 $40,385,091 (1) As of October 16, 2014, the Village has paid $1,260,000 in principal and $545,506 of interest serial bond payments due in the fiscal year ending December 31, Population ECONOMIC AND DEMOGRAPHIC DATA Population Trend % Change (1) Village 24,010 25,060 25, % 1.3% County 923, , , State 18,976,457 19,378,102 19,651, (1) Estimate as of July 1, Source: The U.S. Department of Commerce, Bureau of the Census (Population Estimate). A-19

48 Income The following two tables indicate comparative income statistics for the Village, County and State. Per Capita Money Income % Change Village $31,192 $29,240 (6.3)% County 47,814 48, State 30,948 32, Source: The U.S. Department of Commerce, Bureau of the Census (American Community Survey 5 Year Estimate). Median Income of Families Income Groups - % of Families Median Under $25,000 $50,000 $75,000 $100,000 Income $25,000-49,999-74,999-99,999 Or More Village $69, % 17.4% 17.3% 12.5% 34.8% County 103, State 69, Source: The U.S. Department of Commerce, Bureau of the Census (American Community Survey 5 Year Estimate). Employment The following tables provide certain information about the types of jobs in which employees in the County are engaged, employment information for Town residents (inclusive of comparative information at the County and State level) and unemployment rate information. Average Employed Civilian Labor Force % Change Town 17,700 17,500 17,600 (1.1)% 0.6% County 448, , ,500 (1.6) 1.0 State 8,751,400 8,766,800 8,898, Source: The New York State Department of Labor. (The remainder of this space has been left intentionally blank.) A-20

49 Average Unemployment Rates (%) United Year Town County State States % 7.2% 8.3% 9.3% (1) Jan Feb Mar Apr May Jun Jul Aug (1) Monthly Rates. Source: The New York State Labor Department and the U.S. Bureau of Labor Statistics. Total Non-Agricultural Employment by Industry (%) By Major Category Westchester Westchester Rockland Rockland Putnam United Putnam United Counties State States Counties State States Manufacturing 4.6% 5.2% 8.9% 4.4% 5.2% 8.9% Trade, Trans. & Utility Finance Activities Services & Misc Government Construction & Mining Source: The New York State Department of Labor. Trends in Employment by Industry in Westchester/Rockland/Putnam Counties (1) (In 000 s) Natural Resources, Trade, Total Mining, Trans., Finance Serv., Non- Manufac. Constr. Util. Activities Misc. Govt. Agric (1) Non-agricultural workers. Source: Note: The New York State Department of Labor. Totals may not add due to rounding. A-21

50 The largest employer located in the Village is the State Department of Corrections Facility at Sing-Sing which employs approximately 1,000 persons. In addition, there are various other companies or organizations in the Village employing more than 100 persons each. The following table presents a listing of certain major employers situated in the County. The following table presents a listing of certain major employers located in the County. Major Private Sector Employers in the County (2013) Name of Nature of Number of Business The Business Employees * IBM Corporation Computer products and research services 8,825 * Verizon Communications Telecommunications and information products 3,146 * Pepsico, Inc. Soft drinks and snack foods 3,000 * Morgan Stanley Financial services 1,763 * Consolidated Edison Utility services 1,400 J.P. Morgan Chase (1) Commercial and retail banking 1,271 Entergy Energy Provider 1,200 * MasterCard Financial services 1,200 Yonkers Raceway Casino and harness racing 1,200 New York Life Insurance Company (2) Medical diagnostic equipment 936 (1) Information reported in (2) Information Reported in * Headquarters or major branch operations in Westchester. Source: Official Statement of Westchester County, dated November 26, Compiled by the Westchester County Department of Finance, October Figures are as reported by firms. Financial Institutions There are ten commercial banks within the Village. Commercial banks include branches of: Citibank, JPMorgan Chase Bank, Citibank, Emigrant Bank, First Niagara Bank, Key Bank, Mahopac National Bank, Manufacturers & Traders Trust Company, RBS Citizens Bank, TD Bank and Wells Fargo. Total deposits compiled by the Federal Deposit Insurance Corporation for banks located in the Village were approximately $4.4 billion as of June 30, Utilities The residents of the Village receive electric and natural gas services from the Consolidated Edison Company. Under an agreement with the Power Authority of the State of New York, this agency supplies electricity to meet the operational needs of the Village government. Verizon provides telephone and other communication services in the Village. Cablevision and Verizon FIOS provide cable and internet services in the Village. The Village is a part of the County Refuse District No. 1 which operates a mass-burn resource recovery facility located in the City of Peekskill in the northwest corner of the County. Properties located in the County Refuse District are subject to annual assessments to pay service charges for processing solid waste as well as operating and capital expenses of such district. The Village operates a municipal water system. Sewage collection is a Village function, the County provides sewage treatment. A-22

51 Housing Data Comparative Housing Stock Number of Units % Change Village 8,515 8,862 8, % 0.6% County 349, , , (0.2) State 7,679,307 8,108,103 8,102, (0.1) Source: The U.S. Department of Commerce, Bureau of the Census (American Community Survey 5 Year Estimate). Median Housing Values and Rentals 2012 % Median Value Median Rents Vacancy Status Constructed Owner Renter Owner Renter Occupied Units Occupied Units Occupied Occupied Vacant Village 0.0% $412,400 $1, % 44.4% 9.2% County ,000 1, State ,000 1, Source: The U.S. Department of Commerce, Bureau of the Census (American Community Survey 5 Year Estimate). (The remainder of this space has been left intentionally blank.) A-23

52 Construction Activity Major Construction Projects Developer's Name Project Name / Location Size of Project Number of Units New Commercial Space Stage of Project Date Construction Completed Stop and Shop Arcadia Shopping Center X Complete 2007 Estimated Cost Spring Street Spring Street 0.15 ac. 12 units Complete ,000 TD Bank, TD Bank 174 South Highland Ave ac. X Complete , Spring Orchid Condominiums, 73 Spring St ac. 26 units X Complete ,402, Main TB Flats, Main St ac. 12 units X Complete ,100, Terrich Terrich Court 0.86 ac. 3 SF Complete ,000 Dan Sellazzo Central Ave 0.19 ac. 2 units Complete ,000 Atria Senior Living Facility, Atria 321 North Highland Ave ac. X Complete ,200,000 Walgreen's Walgreens Pharmacy, 78 Croton Ave ac. X Complete ,363,000 Frank Crespo 99 Spring Street 0.12 ac. 1 Complete ,000 Pamela Sgroi 204 Croton Ave 0.13 ac. 1 Complete ,000 Atlantic Development 25 State St 0.70 ac. 50 units X Complete ,750,000 IFCA Spring Street 0.67 ac. 6 units Complete ,900 Robert Kyle 26 Noel Dr 0.41 ac. SF Complete ,000 Avalon Bay Communities 217 North Highland Ave ac. 168 units Complete ,000,000 Ralph Williams Prospect Avenue 0.13 ac. SF Complete ,000 1 Liberty Street 0.21 ac. SF Under Construction 7 Still Court 0.21 ac. SF Under Construction Pedro Silva 5 Brandreth Street 0.15 ac. 6 units Complete ,000 Hudson EFT, LLC 80 Main St 1.40 ac. 25 units Approved ZSA Ossining LLC 105 Croton Ave 0.31 ac. 12 units Complete ,500,000 Ginsburg Development Harbor Square 5.50 ac. 188 units Under Construction 32,000,000 Under Main Street 0.33 ac Main Street 31 units X Construction 2,100, State St, Ossining Land LLC 19&21 James St & 27 Hunter St 5.75 ac. 188 units Before Planning Board 173 N. Highland Ave 173 North Highland Ave 4.43 ac. X Approved 31/37 Spring Street 31/37 Spring Street 0.12 sc. 15 units X Under Construction 590,000 Victoria Home 25 North Malcolm 4.22 ac. 120 beds Before Planning Board SF = Single Family Dwelling 78,265,900 Waterfront Development. The Village has a master plan to develop its Hudson River Waterfront. Such plan provides for the residential and commercial development as well as public infrastructure improvements. Hudson Steppe. Hudson Steppe involves the development of one hundred eighty-eight (188) multi-family condominium or rental dwelling units designed to substantially conform to the requirements of the Village s Planned Waterfront zoning -- the applicant is seeking a waiver from the Zoning Code to allow construction on steep slopes and a variance to allow a 5-story, 38-foot building. The proposed mix of dwellings includes studio, one-, and twobedroom units. Nineteen (19) units will be marketed at affordable prices. In addition, the renovated Smith-Robinson House will accommodate three floors (7,500 SF) of live/work office space (consistent with the prior approval). The office space will be marketed primarily to the project tenants for small offices within a short walk from their units. A-24

53 The project includes a small amount of surface parking and features an underground, fully-automated parking facility for most of the parking. The state-of-the-art parking system will allow the site plan to avoid well over an acre of impervious pavement. Site amenities will include a recreation center for project residents with a swimming pool, private garden areas, a 0.5-acre landscaped plaza space in the center of the site, indoor exercise/fitness room, clubhouse and media room, a bicycle storage facility, and green roofs. This project will also include historic restoration of the Smith-Robinson House, streetscape improvement, storm water improvements and water main improvements. Harbor Square. Village officials indicate that the land acquisition and disposition agreement for the Harbor Square project requires the developer to provide certain infrastructure improvements. Such improvements include, among other things, a waterfront park, promenade, beach area, a fishing pier, sidewalks, public parking and river bank stabilization. In addition, the developer will replace and upgrade 2600 linear feet of water main. The developer s revised land acquisition and disposition agreement (LADA) provides for $25,000 for affordable housing in the Village (since the project now includes affordable housing units), and has also contributed $250,000 to the Village for downtown development. This project has received approval from the Village Planning Board and the Village Board of Trustees, and the project s construction of a 188-unit luxury waterfront rental apartment building is currently underway in The project also anticipates a 5,000 square foot restaurant on the waterfront. Village officials and the developer consider the project a key part of the Village s revitalization at the Hudson River and the Village s historic downtown. Avalon Bay Communities, Inc.. In 2014, Avalon Bay Communities, Inc. completed construction of 168 luxury rental apartment homes on an approximately 21 acre site on U.S. Route 9 in the Village of Ossining, which were more than 90% rented as of early October The existing historic Kane House building on the site was rehabilitated and adaptively re-used as leasing and administrative offices for the complex and a club house for residents. Approximately eight acres of open space west of the Kane House was permanently preserved and donated to the Village as additional parkland. Furthermore, Avalon Bay also provided additional parking and a walking trail to connect the public to the Village s already existing trail network found in its Edward M. Wheeler Crawbukie Reserve and the Old Croton Aqueduct, which traverses the Avalon Bay project. Avalon also upgraded the sidewalks and undertook repairs to the sewer line that fronts its property. Source: Village Officials. END OF APPENDIX A A-25

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55 APPENDIX B UNAUDITED SUMMARY OF FINANCIAL STATEMENTS

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57 VILLAGE OF OSSINING GENERAL FUND BALANCE SHEET UNAUDITED PRESENTATION AS OF DECEMBER 31: ASSETS Cash and Equivalents $ 6,696,089 $ 7,174,996 Investments 0 0 Taxes Receivable (Net) 386, ,111 Accounts Receivable 180, ,356 State and Federal Aid Receivable 89, ,564 Due From Other Funds 283,684 0 Due From Other Governments 846, ,502 Inventories 13,584 24,198 Prepaid Expenditures 266, ,733 Total Assets $ 8,762,277 $ 9,326,460 LIABILITIES AND FUND BALANCE Liabilities: Accounts Payable $ 892,443 $ 1,072,096 Accrued Liabilities 392, ,170 Due to Other Funds 43,720 0 Deferred Revenue - Taxes 211, ,393 Deferred Revenues - Other 788, ,213 Bond Anticipation Notes Payable 745,000 0 Total Liabilities 3,074,490 2,827,872 Fund Balance: Reserved: For Prepaid Expenditures 266, ,733 For Crime Control 24,265 52,489 For Future Capitals Projects 72,520 91,759 For Inventories 13,584 24,198 For Encumbrances 194,196 80,228 Unreserved: Designated for Subsequent Year's Expenditures 500, ,000 Contractual Obligations 537, ,333 Designated for Insurance 0 64,382 Undesignated 4,079,215 4,692,466 Total Fund Balance 5,687,787 6,498,588 Total Liabilities and Fund Balance $ 8,762,277 $ 9,326,460 The financial data presented on this page has been excerpted from the audited financial statements of the Village for the years ended December 31, 2009 through Such presentation, however, has not been audited. Complete copies of the Village's audited financial statements are available upon request to the Village. B-1

58 VILLAGE OF OSSINING GENERAL FUND BALANCE SHEET UNAUDITED PRESENTATION AS OF DECEMBER 31: ASSETS Cash and Equivalents $ 7,829,818 $ 8,389,079 $ 7,320,361 Investments Taxes Receivable (Net) 294, , ,571 Accounts Receivable 393, , ,393 State and Federal Aid Receivable 44,101 97, ,571 Due From Other Funds 0 14,949 27,546 Due From Other Governments 874, ,170 1,001,816 Inventories 31,479 22,629 28,835 Prepaid Expenditures 386, , ,944 Total Assets $ 9,853,964 $ 10,518,926 $ 10,072,037 LIABILITIES AND FUND BALANCE Liabilities: Accounts Payable $ 1,095,859 $ 945,223 $ 1,324,578 Accrued Liabilities 1,509, , ,736 Due to Other Funds 81, , ,413 Deferred Revenue - Taxes 214, Deferred Revenues - Other 714, Unearned Revenue 0 280, ,257 Total Liabilities 3,615,380 2,768,570 2,702,984 Deferred Inflows of Resources Taxes Collected in Advance 0 278, ,751 Deferred Tax Revenues 0 237, ,773 Total Liabilities & Deferred Inflows of Resources 3,615,380 3,284,572 3,232,508 Fund Balance: Nonspendable 417, , ,779 Restricted 140, , ,713 Committed 597 2,983 5,470 Assigned 976, , ,765 Unassigned 4,703,355 5,587,937 5,005,802 Total Fund Balance 6,238,584 7,234,354 6,839,529 Total Liabilities and Fund Balance $ 9,853,964 $ 10,518,926 $ 10,072,037 The financial data presented on this page has been excerpted from the audited financial statements of the Village for the year ended December 31, 2011 through Such presentation, however, has not been audited. Complete copies of the Village's audited financial statements are available upon request to the Village. B-2

59 VILLAGE OF OSSINING GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE UNAUDITED PRESENTATION FISCAL YEAR ENDED DECEMBER 31: REVENUES: Real Property Taxes $ 16,823,933 $ 17,593,047 $ 19,034,628 $ 19,516,461 $ 20,007,882 Other Tax Items 138, , , , ,358 Non-PropertyTaxes 3,576,006 3,842,894 3,964,848 3,989,655 4,254,232 Departmental Income 1,500,995 1,597,428 1,540,853 1,592,404 1,648,281 Intergovermental Charges 1,081,165 1,135,208 1,162,586 1,267,166 1,341,846 Use Of Money and Property 341, , , , ,981 Licenses And Permits 212, , , , ,025 Fines and Forfeitures 685, , , , ,690 Sale of Property and Compensation for Loss 42, ,367 9,048 21,308 11,468 Interfund Revenues , ,179 State Aid 468, , , , ,403 Federal Aid 49, , , , ,637 Miscellaneous 95, , , ,625 98,379 Total Revenues 25,015,101 26,453,052 27,667,659 28,685,798 30,213,361 EXPENDITURES: Current: General Government Support 3,166,297 3,296,499 3,893,385 3,474,546 3,082,729 Public Safety 8,622,775 9,018,441 9,013,348 8,867,237 8,926,298 Health 0 2,243 2, ,880 Transportation 1,938,236 1,922,020 2,327,706 2,140,928 2,190,034 Economic Assistance and Opportunity 64,420 63,814 52,841 73, ,247 Culture and Recreation 2,054,086 2,284,730 2,214,942 2,328,660 2,550,465 Home and Community Services 1,661,429 1,726,427 1,751,362 1,726,244 1,836,378 Employee Benefits 6,080,971 6,953,259 8,790,095 8,430,193 10,361,154 Debt Service 49,683 58,910 55,230 57,852 1,542 Total Expenditures 23,637,897 25,326,343 28,101,404 27,100,004 29,057,727 Excess of Revenues Over Expenditures 1,377,204 1,126,709 (433,745) 1,585,794 1,155,634 OTHER FINANCING SOURCES (USES): Bonds Issued 0 690, , ,000 0 Insurance Recoveries , , ,537 Transfers - In 940, , , , ,891 Transfers - Out (a) (1,502,222) (1,707,973) (1,857,131) (1,972,445) (2,073,887) Total Other Financing Sources (Uses) (561,352) (315,908) 173,741 (590,024) (1,550,459) Excess of Revenues and Other Sources Over Expenditures and Other Uses 815, ,801 (260,004) 995,770 (394,825) Fund Balance - Beginning of Year 4,871,935 5,687,787 6,498,588 6,238,584 7,234,354 Fund Balance - End of Year 5,687,787 6,498,588 6,238,584 7,234,354 6,839,529 (a) Debt Service included in Operating Transfers Out is as follows: 2009 ($1,174,332), 2010 ($1,385,934), 2011 ($1,560,592), and 2012 ($1,557,908), and 2013 ($1,573,690) The financial data presented on this page has been excerpted from the audited financial statements of the Village for the years ended December 31, 2009 through Such presentation, however, has not been audited. Complete copies of the Village's audited financial statements are available upon request to the Village. B-3

60 VILLAGE OF OSSINING WATER FUND BALANCE SHEET UNAUDITED PRESENTATION AS OF DECEMBER 31: ASSETS Cash and Equivalents $ 292,562 $ 631,229 Accounts Receivables 2,354,893 2,844,762 State and Federal Aid 0 13,349 Due From Other Governments 0 7,577 Prepaid Expenditures 33,896 48,163 Total Assets $ 2,681,351 $ 3,545,080 LIABILITIES AND FUND BALANCES Liabilities: Accounts Payable $ 272,906 $ 342,692 Accrued Liabilities 66, ,585 Due To Other Funds 291,882 0 Deferred Revenues 0 4,960 Total Liabilities 631, ,237 Fund Balance: Reserved: For Prepaid Expenditures 33,896 48,163 For Future Capital Project 193, ,498 For Encumbrances 20,594 15,677 Unreserved: Designated for Insurance 0 4,980 Designated for Contractual Obligations 98,189 0 Designated for Subsequent Year's Expenditures 0 250,000 Undesignated 1,703,767 2,528,525 Total Fund Balance 2,049,814 3,041,843 Total Liabilities and Fund Balance $ 2,681,351 $ 3,545,080 The financial data presented on this page has been excerpted from the audited financial statements of the Village for the years ended December 31, 2009 through Such presentation, however, has not been audited. Complete copies of the Village's audited financial statements are available upon request to the Village. B-4

61 VILLAGE OF OSSINING WATER FUND BALANCE SHEET UNAUDITED PRESENTATION AS OF DECEMBER 31: ASSETS Cash and Equivalents $ 1,947,499 $ 3,062,135 $ 3,598,911 Accounts Receivables 2,614,870 2,854,541 2,800,813 State and Federal Aid 0 1,385 49,762 Due From Other Funds 0 23,594 3,937 Due From Other Governments 5,430 9,889 7,592 Prepaid Expenditures 41, , ,423 Total Assets $ 4,609,418 $ 6,081,785 $ 6,583,438 LIABILITIES AND FUND BALANCES Liabilities: Accounts Payable $ 469,425 $ 438,654 $ 556,736 Accrued Liabilities 65,196 79,617 98,039 Due To Other Funds 12, ,871 98,075 Unearned Revenue 11,898 4,222 19,799 Total Liabilities 559, , ,649 Fund Balance: Nonspendable 41, , ,423 Restricted 206, , ,372 Committed Assigned 3,801,478 5,109,169 5,472,994 Total Fund Balance 4,049,963 5,454,421 5,810,789 Total Liabilities and Fund Balance $ 4,609,418 $ 6,081,785 $ 6,583,438 The financial data presented on this page has been excerpted from the audited financial statements of the Village for the year ended December 31, 2011 through Such presentation, however, has not been audited. Complete copies of the Village's audited financial statements are available upon request to the Village. B-5

62 VILLAGE OF OSSINING WATER FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE UNAUDITED PRESENTATION FISCAL YEAR ENDED DECEMBER 31: REVENUES: Departmental Income $ 7,908,849 $ 8,337,174 $ 8,471,178 $ 9,239,934 $ 8,987,442 Use of Money and Property 1,594 1,794 5,038 5,843 6,427 Sale of Property and Compensation for Loss ,176 11,559 26,794 State Aid , Federal aid 0 10,881 14,852 4,843 61,335 Miscellaneous 21,690 21,742 44,245 20,814 21,947 Total Revenues 7,932,133 8,372,575 8,568,489 9,284,607 9,104,790 EXPENDITURES: Current: General Government Support 328, , , , ,167 Home and Community Services 4,000,893 4,252,334 4,512,686 5,010,483 5,546,446 Employee Benefits 668, , , ,403 1,173,758 Debt Service 38,312 16,819 5, , Total Expenditures 5,036,409 5,413,865 5,795,609 6,322,180 7,226,180 Excess (Deficiency) of Revenues Over Expenditures 2,895,724 2,958,710 2,772,880 2,962,427 1,878,610 OTHER FINANCING SOURCES (USES): Transfers - In ,257 1,708 75,000 Transfers - Out (a) (1,921,952) (1,966,681) (1,831,017) (1,559,677) (1,597,242) Total Other Financing Sources (Uses) (1,921,952) (1,966,681) (1,764,760) (1,557,969) (1,522,242) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses 973, ,029 1,008,120 1,404, ,368 Fund Balances - Beginning of Year 1,076,042 2,049,814 3,041,843 4,049,963 5,454,421 Fund Balances - End of Year $ 2,049,814 $ 3,041,843 $ 4,049,963 $ 5,454,421 $ 5,810,789 (a) Includes debt service on bonds: 2009 ($1,711,952), 2010 ($1,649,044), 2011 ($1,392,605), 2012 ($1,324,677), and 2013 ($1,492,944) The financial data presented on this page has been excerpted from the audited financial statements of the Village for the years ended December 31, 2009 through Such presentation, however, has not been audited. Complete copies of the Village's audited financial statements are available upon request to the Village. B-6

63 VILLAGE OF OSSINING SEWER FUND BALANCE SHEET UNAUDITED PRESENTATION AS OF DECEMBER 31: ASSETS Cash and Equivalents $ 636,320 $ 762,742 Accounts Receivable 256, ,644 Due From State and Federal Aid 0 2,309 Due From Other Funds 0 0 Due From Other Governments 2,230 0 Prepaid Expenditures 9,231 15,625 Total Assets $ 904,721 $ 1,102,320 LIABILITIES AND FUND BALANCE Liabilities: Accounts Payable $ 17,026 $ 52,925 Accrued Liabilities 0 0 Due to Other Funds 2,732 0 Total Liabilities 19,758 52,925 Fund Balance: Reserved: For Prepaid Expenditures 9,231 15,625 For Encumbrances 25,607 4,878 Unreserved: Designated for Insurance 0 1,778 Designated for Contractual Obligations 26,243 0 Designated for Subsequent Year's Expenditures 0 0 Undesignated 823,882 1,027,114 Total Fund Balance 884,963 1,049,395 Total Liabilities and Fund Balance $ 904,721 $ 1,102,320 The financial data presented on this page has been excerpted from the audited financial statements of the Village for the years ended December 31, 2009 through Such presentation, however, has not been audited. Complete copies of the Village's audited financial statements are available upon request to the Village. B-7

64 VILLAGE OF OSSINING SEWER FUND BALANCE SHEET UNAUDITED PRESENTATION AS OF DECEMBER 31: ASSETS Cash and Equivalents $ 713,772 $ 903,753 $ 1,242,831 Accounts Receivable 345, , ,544 Due From State and Federal Aid Due From Other Funds 0 30,308 0 Prepaid Expenditures 7,218 24,858 19,551 Total Assets $ 1,066,586 $ 1,327,135 $ 1,565,272 LIABILITIES AND FUND BALANCE Liabilities: Accounts Payable $ 53,184 $ 34,480 $ 60,633 Due to Other Funds 3,430 26,113 17,519 Total Liabilities 56,614 60,593 78,152 Fund Balance: Nonspendable 7,218 24,858 19,551 Assigned 1,002,754 1,241,684 1,467,569 Total Fund Balance 1,009,972 1,266,542 1,487,120 Total Liabilities and Fund Balance $ 1,066,586 $ 1,327,135 $ 1,565,272 The financial data presented on this page has been excerpted from the audited financial statements of the Village for the year ended December 31, 2011 through Such presentation, however, has not been audited. Complete copies of the Village's audited financial statements are available upon request to the Village. B-8

65 VILLAGE OF OSSINING SEWER FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE UNAUDITED PRESENTATION FISCAL YEAR ENDED DECEMBER 31: REVENUES: Departmental Income $ 953,644 $ 1,122,649 $ 1,154,919 $ 1,238,600 $ 1,188,359 Use of Money and Property 5,867 2,631 3,435 1,925 2,185 Sale of Property and Compensation for Loss ,849 3,529 9,148 State Aid ,023 0 Federal Aid 0 1,779 5, ,340 0 Miscellaneous 1,479 2,022 1,809 2,843 1,870 Total Revenues 960,990 1,129,081 1,177,316 1,437,260 1,201,562 EXPENDITURES: Current: General Government Support 128,023 96,660 90, ,697 99,004 Home and Community Services 574, , , , ,556 Employee Benefits 204, , , , ,357 Total Expenditures 907, ,085 1,040,058 1,004, ,917 Excess of Revenues Over Expenditures 53, , , , ,645 OTHER FINANCING SOURCES (USES): Transfers - In 0 183, Transfers - Out (a) (177,228) (176,866) (176,681) (176,252) (25,067) Total Other Financing Sources (Uses) (177,228) 6,436 (176,681) (176,252) (25,067) Excess of Revenues and Other Sources Over Expenditures and Other Uses (123,348) 164,432 (39,423) 256, ,578 Fund Balances - Beginning of Year 1,008, ,963 1,049,395 1,009,972 1,266,542 Fund Balances - End of Year $ 884,963 $ 1,049,395 $ 1,009,972 $ 1,266,542 $ 1,487,120 (a) Includes debt service on bonds: 2009 ($27,228), 2010 ($26,866), 2011 ($26,681) and 2012 ($26,252), and 2013 ($25,067). The financial data presented on this page has been excerpted from the audited financial statements of the Village for the years ended December 31, 2009 through Such presentation, however, has not been audited. Complete copies of the Village's audited financial statements are available upon request to the Village. B-9

66 VILLAGE OF OSSINING 2014 OPERATING BUDGET ESTIMATED REVENUES: General Water Sewer Combined Fund Fund Fund Totals Real Property Taxes $ 20,875, ,875,424 Real Property Tax Overlay (95,000) Real Property Tax Items 184, ,840 Non-Property Tax Items (1) 4,145, ,145,000 Departmental Income 1,651,350 9,184,814 1,166,890 12,003,054 Intergovernmental Services 1,387, ,387,051 Use of Money and Property 752,429 3,000 2, ,429 Licenses and Permits 247, ,000 Fines and Forfeitures 436, ,000 Sale of Property and 0 Compensation for Loss Interfund Revenues 350,555 75, , ,555 State Aid 422, ,608 Federal Aid Miscellaneous 340,000 10,000 1, ,500 Total Estimated Revenues 30,697,257 9,272,814 1,305,390 41,370,461 APPROPRIATIONS: Current: General Government Support 3,853, , ,673 4,472,748 Public Safety 9,008, ,008,177 Health 3, ,125 Transportation 2,162, ,162,627 Economic Assistance and Opportunity 125, ,053 Culture and Recreation 2,420, ,420,571 Home and Community Services 1,792,528 6,124, ,707 8,584,124 Employee Benefits 10,288,612 1,204, ,565 11,789,750 Debt Service 1,791, , ,464 2,081,533 Total Appropriations 31,446,143 7,961,156 1,240,409 40,647,708 Excess (Deficiency) Of Estimated Revenues Over Appropriations (748,886) 1,311,658 64, ,753 OTHER FINANCING SOURCES (USES): Transfers - In 182, , ,575 Transfers - Out (2) (84,039) (1,311,658) (184,311) (1,580,008) Total Other Financing Sources (Uses) 98,886 (1,311,658) (171,661) (1,384,433) Excess (Deficiency) of Estimated Revenues and Other Financing Sources Over Appropriations and Other Financing Uses (650,000) 0 (106,680) (661,680) APPROPRIATED FUND BALANCE $ 650,000 $ 0 $ 106,680 $ 661,680 (1) Includes $3,500,000 County sales tax. (2) Includes debt service transfers. B-10

67 APPENDIX C AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013 * Such Financial Statements and opinion are intended to be representative only as of the date thereof. O'Connor Davies, LLP has not been requested by the District to further review and/or update such Financial Statements or opinion in connection with the preparation and dissemination of this Official Statement.

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69 Village of Ossining, New York Table of Contents Page Independent Auditors' Report Management's Discussion and Analysis Basic Financial Statements Government-Wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet - Governmental Funds Reconciliation of the Governmental Funds Balance Sheet to the Government Wide Statement of Net Position Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General and Water Funds Internal Service Funds Statement of Net Position Statement of Revenues, Expenses and Changes in Net Position Statement of Cash Flows Statement of Assets and Liabilities - Fiduciary Fund Notes to Financial Statements Required Supplementary Information Other Post Employment Benefits Schedule of Funding Progress- Last Three Fiscal Years Combining and Individual Fund Financial Statements and Schedules Major Governmental Funds General Fund Comparative Balance Sheet Comparative Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Schedule of Revenues and Other Financing Sources Compared to Budget Schedule of Expenditures and Other Financing Uses Compared to Budget Water Fund Comparative Balance Sheet Comparative Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Schedule of Expenditures and Other Financing Uses Compared to Budget Debt Service Fund Comparative Balance Sheet Comparative Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual

70 Village of Ossining, New York Table of Contents (Concluded) Page Capital Projects Fund Comparative Balance Sheet Comparative Statement of Revenues, Expenditures and Changes in Fund Balance Project-Length Schedule Non-Major Governmental Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances Sewer Fund Comparative Balance Sheet Comparative Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Schedule of Expenditures and Other Financing Uses Compared to Budget Section 8 Housing Fund Comparative Balance Sheet Comparative Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Special Purpose Fund Comparative Balance Sheet Comparative Statement of Revenues, Expenditures and Changes in Fund Balance Internal Service Funds Combining Statement of Net Position Combining Statement of Revenues, Expenses and Changes in Net Position Combining Statement of Cash Flows Workers' Compensation Benefits Fund Comparative Statement of Net Position Comparative Statement of Revenues, Expenses and Changes in Net Position Comparative Statement of Cash Flows General Liability Claims Fund Comparative Statement of Net Position Comparative Statement of Revenues, Expenses and Changes in Net Position Comparative Statement of Cash Flows Federal Programs Report on Internal Control Over Financing 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 Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards Summary Schedule of Prior Audit Findings Schedule of Findings and Questioned Costs

71 O'CONNOR DAVIES PKF Independent Auditors' Report The Honorable Mayor and Board of Trustees of the Village of Ossining, New York Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the Village of Ossining, New York ("Village") as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the Village's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Village, as of December 31, 2013, and the respective changes in financial position and cash flows, where applicable, thereof, and the budgetary comparison for the General and Water funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. O'CONNOR DAVIES, LLP 500 Mamaroneck Avenue, Suite 301, Harrison, NY I Tel : I Fax: I O'Connor Davi es, LLP is a member firm of the PKF Intern ational Limited net w ork of legally ind ependent firms and does not accept any responsibility or liability for the actions or inactions on th e part of any other individual member firm or firms.

72 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that Management's Discussion and Analysis and the Schedule of Funding Progress - Other Post Employment Benefits be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Village's basic financial statements. The combining and individual fund financial statements and schedules and the schedule of expenditures of federal awards as required by U.S. Office of Management and Budget Circular A-133 Audits of State, Local Governments and Non-Profit Organizations are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules 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 financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 10, 2014 on our consideration of the Village's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Village's internal control over financial reporting and compliance. O'Connor Davies, LLP Harrison, New York May 10,

73 Village of Ossining, New York Management's Discussion and Analysis (MD&A) December 31, 2013 Introduction As management of the Village of Ossining, New York ("Village"), we offer readers of the Village's financial statements this narrative overview and analysis of the financial activities of the Village for the fiscal year ended December 31, It should be read in conjunction with the basic financial statements and accompanying notes to those statements, which immediately follow this section, to enhance understanding of the Village's financial performance. Financial Highlights Key financial highlights for the fiscal year ended December 31, 2013 are as follows:!!! On the government-wide Statement of Net Position, the assets of the Village exceeded its liabilities at the close of the most recent fiscal year by $45,633,232. Of this amount, the unrestricted portion is a deficit of $13,917,657. This deficit resulted primarily from the accrual of certain operating liabilities pursuant to Government Accounting Standards Board (GASB) Statement No. 34, which will be satisfied in future years, including compensated absences and the accrual of the Village's annual other post-employment benefit (OPEB) cost in accordance with the provisions of GASB Statement No. 45. The Village's total net position decreased by $5,693,001 in 2013, from $51,326,233 as of December 31, The total decrease in net position resulted primarily from the increase in the accrual of OPEB obligations, which increased by $4,020,000 in 2013, and a net decrease of $2,713,817 in capital assets. As of the close of the current fiscal year, the Village's governmental funds reported combined ending fund balances of $22,045,846, of which $5,005,802 was unassigned and available for spending at the Village's discretion. The combined ending fund balances of $22,045,846 at December 31, 2013 were $2,251,117 more than the amount reported in the prior year.! At the end of the current fiscal year, unassigned fund balance for the General Fund, $5,005,802, was 16.1% of total General Fund expenditures and other financing uses (of $31,131,614).!!! The Internal Service Funds reported an unrestricted net position deficit of $184,011 as of December 31, During the current fiscal year, the Village issued new serial bonds of $3,086,500 to finance capital projects (of $2,840,000), and to provide permanent financing for capital projects (of $246,500) previously funded through the issuance of short-term obligations (bond anticipation notes (BAN's)). In 2013, the Village retired $2,297,000 of general obligation debt from budgetary appropriations. As of December 31, 2013, the Village had an outstanding bond anticipation note liability of $3,979,493, which was comprised of $2,468,000 for authorized capital projects in 2013, plus $1,511,493 for prior year capital project BAN's. During 2013, the Village had retired $228,540 of BAN's from budgetary appropriations, and converted $246,500 of prior year BAN's to permanent financing through the issuance of serial bonds. 3

74 Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Village's basic financial statements, which are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the Village's finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the Village's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator as to whether the financial position of the Village is improving or deteriorating. The statement of activities presents information showing how the Village's net position changed during the most recent fiscal year. All changes in net position are reported as soon as 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 future fiscal periods (for example, uncollected taxes, depreciation expense, and earned but unused vacation leave and other post-employment benefit obligations ("OPES")). The government-wide financial statements distinguish functions of the Village that are principally supported by taxes and intergovernmental revenues (governmental activities). The governmental activities of the Village include general government support, public safety, health, transportation, economic opportunity and development, culture and recreation, home and community services, and interest. The government-wide financial statements can be found immediately following this discussion and analysis. 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. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and means by which spending activities are controlled. The Village, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Village 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 financial statements focus on near-term inflows and outflows of spendable resources, as well as 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. 4

75 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 fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Village maintains seven individual governmental funds: the General Fund, Water Fund, Sewer Fund, Debt Service Fund, Section 8 Housing Fund, Special Purpose Fund and the Capital Projects Fund. 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, Water, Debt Service and Capital Projects Funds. These funds are considered to be major funds. The Sewer, Section 8 Housing and Special Purpose Funds are not considered major funds and are combined into a single aggregate presentation. The Village adopts annual budgets for the General Fund, Water Fund, Sewer Fund, Debt Service Fund and Section 8 Housing Fund. Budgetary comparison statements have been provided for the General and Water Funds within the basic financial statements to demonstrate compliance with the respective budgets. In the Capital Projects Fund, budgets are established on an individual project basis. Proprietary Funds The Village maintains one type of proprietary fund. These internal service funds are used to accumulate and allocate costs internally among the Village's various functions. The Village uses internal service funds to account for its liability insurance coverage (the General Liability Claims Fund), and its selfinsured workers' compensation benefits (the Workers' Compensation Benefits Fund). These services have been classified as governmental activities in the government-wide financial statements because they predominantly benefit governmental funds. Both internal service funds are combined into a single aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining and individual fund schedules and statements elsewhere in this report. 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 financial statements because the resources of those funds are not available to support Village programs. The Village maintains only one type of fiduciary fund that is known as an agency fund. The Village holds resources in this fund purely in a custodial capacity. The activity in this fund is limited to the receipt, temporary investment and remittance of resources to the appropriate individual, organization or government. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements are located following the basic financial statements section of this report. 5

76 Other Information Additional statements and schedules can be found immediately following the notes to the financial statements and include schedules of budget to actual comparisons and the project-length schedule for the Capital Projects Fund. Government-Wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. For the Village, assets exceeded liabilities by $45,633,232 at the close of the 2013 fiscal year, a decrease of $5,693,001 from the prior fiscal year. Net Position December 31, Governmental Governmental Activities Activities Current Assets $ 33,898,684 $ 28,453,166 Capital Assets, Net 73,500,631 76,214,448 Total Assets 107,399, ,667,614 Deferred Outflows of Resources 575, ,557 Current Liabilities 7,594,861 5,679,431 Long-term Liabilities 54,458,313 48,028,637 Total Liabilities 62,053,174 53,708,068 Deferred Inflows of Resources 288, ,870 NET POSITION Net Investment in Capital Assets 51,871,733 53,872,757 Restricted 7,679,156 7,188,226 Unrestricted (deficit) {13,917,657~ {9,734,750~ Total Net Position $ 45,633,232 $ 51,326,233 The largest portion of the Village's net position was its investment in capital assets (land, land improvements, buildings and improvements, infrastructure, machinery and equipment and constructionin-progress), less any related debt outstanding that was used to acquire those assets, $51,871,733. The Village uses these capital assets to provide services to citizens. Consequently, these assets are not available for future spending. Although the Village's investments in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate the debt. A portion of the Village's net position at December 31, 2013, $7,679,156, represented resources that were subject to external restrictions on how they may be used, and are restricted for various purposes such as special revenue funds, debt service, capital projects, workers' compensation benefits and general liability claims. 6

77 The remaining balance of unrestricted net position, which was a deficit of $13,917,657, must be financed from future operations. This deficit does not mean that the Village does not have resources available to meet its obligations in the ensuing year. Rather, it is the result of having long-term commitments, including compensated absences ($1, 139,279), and other post-employment benefit obligations ($20, 180,000), that are greater than currently available resources. Payments for these liabilities will be budgeted in the year that actual payment will be made. At the end of the current fiscal year, the Village was able to report positive net position balances in the government as a whole, and in the governmental funds. 7

78 Change in Net Position Fiscal Year Ended December 31, Governmental Activities REVENUES Program Revenues Charges for Services $ 14,211,822 $ 14,360,809 Operating Grants and Contributions 4,222,816 3,612,272 Capital Grants and Contributions 635,888 1,014,175 General Revenues Real Property Taxes 20,011,523 19,539,384 Other Tax Items 163, ,039 Non-Property Taxes 4,254,232 3,989,655 Unrestricted Use of Money and Property 39,672 34,461 Unrestricted State Aid 428, ,739 Miscellaneous 76, ,646 Donated Assets 6, ,329 Sale of Real Property 160,190 Insurance Recoveries 349, ,152 Total Revenues 44,559,455 43,721,661 EXPENSES Program Expenses General Government Support 5,252,394 4,822,603 Public Safety 17,434, ,898,406 Health 1, Transportation 7,153,598 6,825,929 Economic Opportunity and Development 244, ,688 Culture and Recreation 4,404,261 4,435,718 Home and Community Services 14,906,611 13,433,771 Interest 854, ,527 Total Expenses 50,252,456 47,510,562 Change in Net Position (5,693,001) (3,788,901) NET POSITION Beginning 51,326,233 55,115,134 Ending $ 45,633,232 $ 51,326,233 8

79 Sources of Revenues for 2013 Governmental Activities Unrestricted UseUnrestricted State of Money and Aid Property 1 0% 0.1% Non-Property Taxes 9.5% Other Tax Items ::;:;:;:--~ 0.4% Miscellaneous 0.2% Donated Assets I Sale of Real Property 0.3% Insurance Recoveries % Real Property Taxes 44.9% Capital Grants and Contributions 1.4% Charges for Services 31.9% Operating Grants and Contributions 9.5% Expenses for 2013 Governmental Activities Culture and Recreation 8.8% Home and Community Services Interest 1.7% General Government Support 10.4% Economic Opportunity and Development 0.5% Transportation 14.2% Public Safety 34.7% 9

80 Governmental Activities During 2013, governmental activities decreased the Village's net position by $5,693,001. For the fiscal year ended December 31, 2013, revenues from governmental activities totaled $44,559,455, an increase of $837,794, or 1.9%, over prior year revenues of $43,721,661. Tax revenues ($24,429, 113), comprised of real property taxes, other tax items and non-property taxes, represented the largest revenue source (54.8%). Tax revenues in the prior year totaled $23,737,078 and represented 54.3% of total 2012 revenues. Charges for services revenues in 2013, the second largest revenue source, totaled $14,211,822 and represented 31.9% of total revenues. In 2012, this revenue source aggregated $14,360,809, which was 32.9% of total revenues. Expenses incurred by governmental activities of the Village in 2013 totaled $50,252,456, an increase of $2,741,894 (5.8%) over prior year expenses of $47,510,562. The largest components of governmental activities' expenses were public safety (34.7%), home and community services (29.7%), and transportation (14.2%). This was similar to last year when the largest components of government activities' expenses were public safety (35.6%), home and community services (28.3%), and transportation (14.4%). The major changes in 2013 vs were as follows: Revenue Real property taxes increased by $472, 139; due primarily to the 4.12% real property tax increase in 2013, plus the collection of prior year unpaid property taxes. Operating grants and contributions were $4,222,816 in 2013, which was $610,544 (16.9%) more than the amount received in 2012 ($3,612,272) and is due primarily to developer contributions in lieu of parklands. Non-property taxes increased by $264,577 (6.6%) in 2013, to $4,254,232, due primarily to increased sales tax distribution revenues in Expenses Other employee benefit costs varied significantly from 2012 to 2013, as follows: (1) Retirement system costs increased $401,214 (12.9%) to $3,513,970 in (2) Workers' compensation benefits costs increased $829,288 (68.5%) to $2,040,779 in (3) Health care (hospitalization, prescription drug, medical, and dental) costs increased $1,481,902 (35.1 %) to $5,740,981 in These expenses were spread throughout all program expense functions (other than interest expense). The Village is self-insured for workers' compensation and health care expenses and, as a result, expenses can vary significantly year-to-year. In addition, some of these expenses are offset by stop-loss insurance recovery revenues. Post-employment health care benefit expenses were recorded in 2013 in the amount of $4,020,000, as compared to $4,360,000 in Excluding employee benefits, expenses were generally consistent year-to-year by function category. 10

81 Financial Analysis of the Village's Funds As noted earlier, the Village uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. Governmental Funds The focus of the Village's governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the Village's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Village's governmental funds reported combined ending fund balances of $22,045,846, a net increase of $2,251,117 from the prior year amount of $19,794,729. The non-spendable fund balance component is $1,057,387 at December 31, 2013 ($819,289 in 2012), consisting of amounts representing prepaid expenditures and inventories. The restricted fund balance component of $7,800,529 at December 31, 2013 ($5,676,903 in 2012) indicates that it is not available for new spending because it has been restricted for crime control, capital projects, debt service and trusts. The committed fund balance component, $5,470 at the end of 2013, consists of amounts set aside for economic development ($2,983 in 2012). The assigned fund balance component of $8,176,658 at the. end of 2013 ($7,707,617 in 2012) consists of amounts set aside for purchases on order ($246,443), subsequent year expenditures ($1,085,829), and amounts for Water Fund, Sewer Fund and Section 8 Housing Fund ($6,844,386 total). The remainder of the fund balance at December 31, 2013, $5,005,802 constitutes unassigned fund balance, all of which is in the General Fund. The amount of unassigned fund balance at December 31, 2012 (prior year) was $5,587,937. General Fund - The General Fund rs the primary operating fund of the Village, and the majority of the Village's programs and activities are supported by this fund. At the end of the current fiscal year, unassigned fund balance of the General Fund was $5,005,802, representing 73.2% of the total General Fund balance of $6,839,529. Two useful measures of liquidity are the percentage of unassigned fund balance to total expenditures, and total fund balance to total expenditures. At the end of the current fiscal year, the General Fund showed a healthy 16.1% unassigned fund balance ($5,005,802) to total expenditures and other financing uses ($31,131,614), while total fund balance ($6,839,529) represented 22.0% of that same amount. When the fiscal 2013 General Fund budget was adopted, it anticipated the use of $831,294 of fund balance, which was composed of $650,000 designated from the previous year, plus $184,294 for contract and purchase order commitments to be liquidated. During the year, the budget was amended, including the appropriation of fund balance in the amount of $200,000 for capital project expenditures (for a vital streetscape project that tied the downtown area with the train station), and $232,919 to help increase reserves in the internal service fund for self-insured workers' compensation benefits. Consequently, by year-end, the anticipated use of fund balance was $1,264,213. For the 2013 year, actual results of operations resulted in a decrease in fund balance of $394,825, which was $869,388 less than the decrease anticipated in the modified budget ($1,264,213 less $394,825). Revenues and other financing sources were $30,736,789, which was $350,122 more than the final budget. The primary revenues that were more than estimated in the adopted budget were non-property tax distribution from County (by $275, 138), departmental revenues (by $81,881 ), licenses and permits (by $164,025- mostly for building permits revenues), and state aid (by $167,795- for mortgage tax revenues and a recycling grant). The primary revenues that were less than estimated in the budget were real property taxes (by $145,821 in the modified budget- see discussion in notes to financial statements pertaining to 60 day availability for calculation of current year revenues) and court fines and forfeitures (by $158,710). 11

82 Federal and state emergency management assistance aid in the amount of $349,035 for Superstorm Sandy clean-up expenses which did not meet revenue availability criteria for the 2012 (prior) year were recorded in 2013 when received. Expenditures and other financing uses were $31,131,614, which was $519,266 less than the final budget. Significant expenditure variances were for general government support ($214,233), public safety ($98,020), and transportation ($99,562). With respect to employee benefits, the Village is self-insured for workers' compensation benefits and health care benefits (hospital, medical and dental benefits). Consequently, expenditures can sometimes vary year-to-year, as shown below for the General Fund during the past four years: Year Workers' Compensation $1,208, ,146 1,238, ,035 Hospital, Medical and Dental $5,165,804 3,830,127 4,346,912 3,453,422 In 2013, the Village received and appropriated revenues of $297,868 from stop loss insurance recovery revenues for the hospital, medical and dental benefits expenditures. Water Fund - The fund balance of the Water Fund increased by $356,368 during the year, and totaled $5,810,789 at December 31, Of this amount, the assigned portion available for future year use was $5,472,994 ($5, 109,169 in 2012). It is important to note that water rents receivables at year-end, aggregating approximately $2.80 million, was billed through March 2014, and although included in fund balance, is not available as cash at year-end. Revenues and other financing sources of $9,179,790 were $135,834 more than estimated in the budget. Expenditures and other financing uses of $8,823,422 were $950,708 less than budgeted in 2013, much of which was due to cost savings in the pumping, supply and power appropriations lines. In 2012, the Village started a significant capital project for the mandated reconstruction of the reservoir and dam at the Indian Brook Water Treatment Plant (IBWTP) at an estimated cost of $4.0 million. Sewer Fund- The fund balance of the Sewer Fund increased by $220,578 and aggregated $1,487,120 at December 31, The portion of fund balance that was assigned and available for future year use at year-end was $1,467,569 ($1,241,684 in 2012), and $106,680 was appropriated in the 2014 budget. Similar to the Water Fund, a significant portion of fund balance at year-end ($302,544) is in the form of sewer rents receivables that are billed through March Revenues of $1,201,562 were $42,598 more than estimated in the budget. Fiscal year expenditures and other uses of $980,984 were $194,637 less than budgeted. In 2013, the Village started a significant capital project for the rehabilitation and restoration of the Kill Brook sewer line and stream bed/bank stabilization at an estimated cost of $5.0 million. Debt Service Fund -The Debt Service Fund ended its fiscal year with a fund balance of $1,033,805, an increase of $63,717 from the prior year. While the 2013 adopted budget provided for the appropriation of fund balance in the amount of $222,179, 2013 operations included revenues of $200,000 from the sale of Village-owned land. In accordance with the Village's adopted financial goals and policies, revenues received from the sale of Village surplus properties could be deposited to a type of reserve fund such as this when not otherwise earmarked or legally designated to another fund. Of the total fund balance at year-end, $272,703 was appropriated in the 2014 budget. 12

83 Section 8 Housing Fund - The Section 8 Housing Fund, which provides Housing Assistance Payments (HAP) for eligible tenants, ended its fiscal year with a fund balance of $216,261, a decrease of $93,646 from the prior year, on revenues and other financing sources of $3,024,581. The primary reason for the reduction in fund balance was the planned use of accumulated fund balance for HAP program expenditures. Of the total fund balance at year-end, $56,446 was appropriated in the 2014 budget. Special Purpose Fund - The fund balance of the Special Purpose Fund increased by $524,850 during the year, and totaled $1,701,177 as of December 31, The primary reason for the fund balance increase was recreation impact fees of $615,500 received from developers in lieu of providing parklands. Capital Projects Fund - The Capital Projects Fund ended its 2013 fiscal year with a fund balance of $4,957,165 from a prior year fund balance of $3,383,090. The increase was due primarily to the issuance of serial bond proceeds that had not been expended by year-end. Revenues and other financing sources totaled $4,229,776 for 2013, and expenditures and other financing uses totaled $2,655,701. Proprietary Funds The Village's proprietary funds provide the same type of information found in the government-wide financial statements, but in greater detail. Total net position of the Internal Service Funds at December 31, 2013 was a combined unrestricted net position deficit of $184,011, from an unrestricted net position of $126,078 for While the General Liability Claims Fund had a net position balance of $301,475, the Workers' Compensation Benefits Fund had a net position deficit balance of $485,486 (was a deficit balance of $199,947 at the end of 2012). Total assets were $3,869,989, and total liabilities were $4,054,000 at year-end. In the Workers' Compensation Benefits Fund, total revenues were $1,755,240 and operating expenses were $2,040,779, resulting in a decrease in net position of $285,539. Based on computations from the Village's actuary, the accrued liability at year-end for workers' compensation benefits was increased by $1,07 4,000, as compared to $324,000 at the end of 2012 (prior year). In the General Liability Claims Fund, total revenues were $598,715 and operating expenses were $623,265, resulting in a decrease in net position of $24,550. Following the Village's plan to reduce and eliminate the net position deficit in the Workers' Compensation Benefits Fund, the Village utilized the receipt of insurance recoveries of $285,153 and the transfer of $500,000 from unexpended appropriations for workers' compensation claims in the operating funds (as well as appropriated fund balance), to help reduce the net position deficit in The Village anticipates that continuation of this plan will eliminate the net position deficit in a future year. General Fund Budgetary Highlights For 2013, the difference between the appropriations originally budgeted ($30,925,957) and the final appropriations for the General Fund ($31,650,880) was an increase to the budget of $724,923, for the following purposes: for the appropriation of unanticipated revenues received during the year, $41,479; for excess revenues appropriated for expenditures, $412,657 (including $200,000 for health insurance and $73,012 for high energy and utility expenses); for the appropriation of stop-loss insurance recovery revenues for health insurance, $287,868; 13

84 for the appropriation of fund balance of $200,000 (plus General Fund contingency account funds of $50,000) for a vital streetscape capital project, replacing Community Development Block Grant revenues that became unavailable to the Village; and, for the appropriation of fund balance in the amount of $232,919, for transfer to the Workers' Compensation Benefits Fund to help reduce the net position deficit. In addition to the above budget increases that aggregated $1,17 4,923, the budget was also reduced by a net $450,000 to eliminate serial bond borrowing for tax certiorari claims. When the 2013 budget was adopted, the Village anticipated issuing a serial bond in the amount of $500,000 for tax certiorari claims. As the 2013 year progressed, it became evident that the amount of tax certiorari claims in 2013 would be significantly less. Consequently, the Village decided to not issue such bonds, and to instead use General Fund contingency account funds to pay for the tax certiorari claims. For 2013, tax certiorari claims aggregated $75,702, with $14,952 charged against real property tax revenues (current year portion) and $60,750 charged as expenditures (prior year portion). Water Fund The Water Fund appropriations were increased by $206,663 during 2013, to $9,77 4, 130. Similar to the General Fund, in the Water Fund the Village appropriated stop loss revenues of $23,039 for health insurance expenditures, and appropriated fund balance of $35,624 for transfer to the Workers' Compensation Benefits Fund. The Village also appropriated fund balance in the amount of $148,000 to pay for outside consultant engineering work in preparation for a capital project in 2014 to cement-line and/or replace water mains throughout portions of the Village. Sewer Fund The Sewer Fund budget was also increased during 2013, by $16,885, to $1,175,621, for health insurance stop loss revenues and for transfer to the Workers' Compensation Benefits Fund. Section 8 Housing Fund The budget for the Section 8 Housing Fund was reduced by $100,000 during the year, to $3,168,719, to reflect a reduction in anticipated Federal aid during the year. Capital Assets Capital Assets and Debt Administration The Village's investment in capital assets for governmental activities at December 31, 2013, net of $134,905,081 of accumulated depreciation, was $73,500,631. This investment in capital assets includes land, land improvements, buildings and improvements, infrastructure, machinery and equipment, and construction-in-progress. 14

85 Major capital asset activity during the current fiscal year included the following: Capital Assets December 31, Asset Land Land Improvements Buildings and Improvements Infrastructure Machinery and Equipment Construction-in-Progress Less: Accumulated Depreciation Total (Net of Depreciation) $ $ 2013 Governmental Activities 2012 Governmental Activities 2,475,762 $ 2,515,572 3,328,663 2,807,673 44,381,779 44,100, ,602, ,177,458 15,355,314 14,932,355 1,261,678 1,192,189 (134,905,081) (129,511,348) 73,500,631 =$===7=6:!::::,2=:1:::::!4,~44=8== Long-Term Debt /Short-Term Debt At the end of the current fiscal year, the Village had total bonded debt outstanding of $27,396,500. As required by New York State law, all bonds issued by the Village are general obligation bonds, backed by the full faith and credit of the Village. During the 2013 fiscal year, the Village issued general obligation bonds of $3,086,500 to finance sewer improvements in the Kill Brook area which were mandated by the NYS Department of Environmental Conservation ($2,000,000 - see also BAN's below), fire apparatus ($665,000) and a front-end loader ($175,000). Included in this bond was $246,500 previously funded through the issuance of bond anticipation notes (BAN's). During the year, the Village retired $2,297,000 of general obligation debt from budgetary appropriations. Also during the current fiscal year, the Village issued short-term obligations (bond anticipation notes (BAN's)) of $3,979,493 to finance the Kill Brook sewer improvements ($2,300,000), two police vehicles ($80,000), a fire chief's vehicle ($48,000), and a DPW truck ($40,000), and to renew prior year capital projects BAN's for $1,511,493. The Village retired $228,540 of short-term debt from budgetary appropriations during the year, paid $270,000 from the prior year's BAN that was not needed for the water pump station generator project and, as noted above, converted $246,500 into a serial bond in With the issuance of the serial bonds and BAN, Moody's Investors Service assigned an Aa2 credit rating on the bonds and MIG 1 rating on the notes, and affirmed the Aa2 credit rating on all outstanding debt of the Village. In addition to the bonds and notes described above, during 2013 the Village finalized its agreement with the New York Power Authority in the amount of $924,844 for the installation of an energy-efficient boiler at one of the Village's facilities ($280,056) and replacement pumps with variable frequency drives at the IBWTP ($644, 788). The finalized loan is $82,499 less than the amount estimated for 2012 (prior year). Known as the "constitutional debt limit", and pursuant to New York State Local Finance Law, the Village must limit total outstanding long-term debt to no more than 7% of the five-year average full valuation of real property. As of November 2013 when the serial bond was issued, the Village had exhausted 12.10% of its constitutional debt limit, and had the authority to issue an additional $125,913,116 of general obligation long-term debt. 15

86 Additional information on the Village's long-term and short-term debt can be found in Note 3 in the notes to the financial statements. Next Year's Budgets and Rates In the 2014 General Fund adopted budget, the Village appropriated $650,000 of unassigned fund balance for spending in fiscal The real property tax rate for the 2014 Village General Fund is $ per $1,000 of taxable assessed value, an increase of 2.88% over the prior year 2013 tax rate. For the 2014 budget, the Village Board of Trustees adopted a local law to authorize an override of the property tax levy limitations. Requests for Information This financial report is designed to provide a general overview of the Village of Ossining, New York's finances for all those who are interested. Questions and comments concerning any of the information provided in this report should be addressed to Thomas E. Warren, Village Treasurer, Village of Ossining, 16 Croton Avenue, Ossining, New York 10562, or by to twarren@villageofossining.org. 16

87 Village of Ossining, New York Statement of Net Position December 31, 2013 Governmental Activities ASSETS Cash and equivalents $ 27,675,101 Receivables Taxes, net 308,571 Accounts 3,598,779 State and Federal aid 234,538 Due from other governments 1,024,308 Prepaid expenses 1,028,552 Inventories 28,835 Capital assets Not being depreciated 3,737,440 Being depreciated, net 69,763,191 Total Assets 107,399,315 DEFERRED OUTFLOWS OF RESOURCES Deferred amounts on refunding bonds 575,842 LIABILITIES Accounts payable 2,327,024 Accrued liabilities 734,820 Retained percentages 58,803 Unearned revenues 352,824 Due to other governments 361 Bond anticipation notes payable 3,979,493 Accrued interest payable 141,536 Non-current liabilities Due within one year 2,872,339 Due in more than one year 51,585,974 Total Liabilities 62,053,174 DEFERRED INFLOWS OF RESOURCES Taxes collected in advance 288,751 NET POSITION Net investment in capital assets 51,871,733 Restricted for Crime control 29,341 Future capital projects 351,744 Debt service 1,033,805 General liability claims 301,475 Water 3,161,516 Sewer 999,837 Section 8 Housing 100,261 Trusts 1,701,177 Unrestricted ~13,917,657} Total Net Position $ 45,633,232 The notes to the financial statements are an integral part of this statement. 17

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89 Village of Ossining, New York Statement of Activities Year Ended December 31, 2013 Functions/Programs Governmental activities General government support Public safety Health Transportation Economic opportunity and development Culture and recreation Home and community services Interest $ Expenses Charges for Services 5,252,394 $ 988,294 17,434,029 1,042,821 1, ,153, , ,916 4,404,261 1 '140,590 14,906,611 10,562, ,767 Program Revenues Operating Grants and Contributions $ 20, , ,276 3,439,863 Capital Grants and Contributions $ 102,913 73, ,000 84,116 Net (Expense) Revenue and Changes in Net Assets $ (4,161,187) (16,371 '185) (1,020) (6,603,264) (108,262) (2,637,395) (528,966) (770,651) Total Governmental Activities $ 50,252,456 $ 14,211,822 $ 4,222,816 ~$=:;:::;6;;3;:;;:!5':,;,88;;;8~..:_(3_1.:..._,1_8_:1,_93_0_:_.) General revenues Real property taxes Other tax items Payments in lieu of taxes Interest and penalties on real property taxes Non-property taxes Utilities gross receipts taxes Franchise fees Non-property tax distribution from County Unrestricted use of money and property Sale of property and compensation for loss Unrestricted State aid Miscellaneous Donated assets Sale of real property Insurance recoveries Total General Revenues Change in Net Position Net Position - Beginning Net Position - Ending 20,011,523 34, , , ,918 3,525,138 28,204 11, ,404 76,013 6, , ,537 25,488,929 (5,693,001) 51,326,233 $ 45,633,232 The notes to the financial statements are an integral part of this statement. 18

90 Village of Ossining, New York Balance Sheet Governmental Funds December 31, 2013 Debt General Water Service ASSETS Cash and equivalents $ 7,320,361 $ 3,598,911 $ 992,821 Taxes receivable, net of allowance for uncollectible taxes 308,571 Other receivables Accounts 395,393 2,800,813 State and Federal aid 110,571 49,762 Due from other funds 27,546 3,937 46,570 Due from other governments 1,001,816 7,592 1,535,326 2,862,104 46,570 Prepaid expenditures 878, ,423 Inventories 28,835 Total Assets $ 10,072,037 $ 6,583,438 $ 1,039,391 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities Accounts payable $ 1,324,578 $ 556,736 $ Accrued liabilities 631,736 98,039 Retained percentages Unearned revenues 290,257 19;799 Due to other funds 456,413 98,075 5,586 Due to other governments Bond anticipation notes payable Total Liabilities 2,702, ,649 5,586 Deferred inflows of resources Taxes collected in advance 288,751 Deferred tax revenues 240,773 Total Deferred Inflows of Resources 529,524 Total Liabilities and Deferred Inflows of Resources 3,232, ,649 5,586 Fund balances Nonspendable 907, ,423 Restricted 165, , ,102 Committed 5,470 Assigned 754,765 5,472, ,703 Unassigned 5,005,802 Total Fund Balances 6,839,529 5,810,789 1,033,805 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 10,072,037 $ 6,583,438 $ 1,039,391 The notes to the financial statement are an integral part of this statement. 19

91 Total Capital Other Governmental Projects Governmental Funds $ 9,161,789 $ 3,278,424 $ 24,352, , ,379 3,551,585 73, , ,646 48, ,916 14,900 1,024, , ,942 5,113,347 27,185 1,028,552 28,835 $ 9,427,194 $ 3,709,551 $ 30,831,611 $ 376,635 $ 69,075 $ 2,327,024 5, ,820 58,803 58,803 42, ,824 55, , , ,979,493 3,979,493 4,470, ,993 8,256, , , ,524 4,470, ,993 8,785,765 27,185 1,057,387 4,957,165 1,701,177 7,800,529 5,470 1,676,196 8,176,658 5,005,802 4,957,165 3,404,558 22,045,846 $ 9,427,194 $ 3,709,551 $ 30,831,611 20

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93 Village of Ossining, New York Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position December31, 2013 Fund Balances -Total Governmental Funds $ 22,045,846 Amounts Reported for Governmental Activities in the Statement of Net Position are Different Because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Governmental funds report the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Deferred charges 73,500, ,842 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Real property taxes Internal service funds are used by management to charge the costs of insurance in the governmental funds. The assets and liabilities of the Internal Service funds are included in governmental activities in the statement of net position. Long-term liabilities that are not due and payable in the current period are not reported in the funds. Accrued interest payable Bonds payable Energy performance contract payable Compensated absences Other post employment benefit obligations payable 240,773 (184,011) (141,536) (28, 160, 190) (924,844) (1 '139,279) (20, 180,000) (50,545,849) Net Position of Governmental Activities $ 45,633,232 The notes to the financial statement are an integral part of this statement. 21

94 Village of Ossining, New York Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Year Ended December 31, 2013 Debt General Water Service REVENUES Real property taxes $ 20,007,882 $ $ Other tax items 163,358 Non-property taxes 4,254,232 Departmental income 1,648,281 8,987,442 Intergovernmental charges 1,341,846 Use of money and property 281,981 6,427 84,116 Licenses and permits 354,025 Fines and forfeitures 433,690 Sale of property and compensation for loss 11,468 26,794 lnterfund revenues 792,179 State aid 540, Federal aid 285,637 61,335 Miscellaneous 98,379 21,947 Total Revenues 30,213,361 9,104,790 84,116 EXPENDITURES Current General government support 3,082, ,167 Public safety 8,926,298 Health 1,880 Transportation 2,190,034 Economic opportunity and development 107,247 Culture and recreation 2,550,465 Home and community services 1,836,378 5,546,446 Employee benefits 10,361 '154 1,173,758 Debt service Principal 2,297,000 Interest 1,542 9, ,031 Capital outlay T ota I Expenditures 29,057,727 7,226,180 3,174,031 Excess (Deficiency) of Revenues Over Expenditures 1 '155,634 1,878,610 {3,089,915) OTHER FINANCING SOURCES (USES) Bonds issued Insurance recoveries 349,537 Sale of real property 200,000 Transfers in 173,891 75,000 3,103,632 Transfers out (2,073,887) ( 1,597,242) (150,000) Total Other Financing Sources (Uses) (1,550,459) (1,522,242) 3,153,632 Net Change in Fund Balances (394,825) 356,368 63,717 FUND BALANCES Beginning of Year 7,234,354 5,454, ,088 End of Year $ 6,839,529 $ 5,810,789 $ 1,033,805 The notes to the financial statements are an integral part of this statement. 22

95 Total Capital Other Governmental Projects Governmental Funds $ $ $ 20,007, ,358 4,254,232 1,188,359 11,824,082 1,341,846 4, , , ,690 9,148 47, , ,397 1,071,645 2,927,268 3,274,240 21, , , ,772 4,895,778 44,849,817 99,004 3,677,900 8,926,298 1,880 2,190, , ,545 2,550,465 3,694,783 11,077, ,357 11,815,269 2,297, ,382 2,571,357 2,571,357 2,571,357 4,205,442 46,234,737 (2,019,585) 690,336 (1,384,920) 3,086,500 3,086, , , ,504 85,404 4,029,431 (84,344) (123,958) (4,029,431) 3,593,660 (38,554) 3,636,037 1,574, ,782 2,251,117 3,383,090 2,752,776 19,794,729 $ 4,957,165 $ 3,404,558 $ 22,045,846 23

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97 Village of Ossining, New York Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended December 31,2013 Amounts Reported for Governmental Activities in the Statement of Activities are Different Because: Net Change in Fund Balances- Total Governmental Funds Governmental funds report 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. This is the amount by which depreciation expense exceeded capital outlays in the current period. Capital outlay expenditures Depreciation expense The net effect of various miscellaneous transactions involving capital assets (i.e., sales and donations) is to increase net assets Gain on sale of capital assets Donated capital assets Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Real property taxes Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Also, governmental funds report the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Bonds issued Energy performance contract debt reduction Principal paid on bonds Amortization of loss on refunding bonds and issuance premium $ 2,251,117 2,763,726 (5,443,733) (2,680,007) (39,810) 6,000 (33,810) 3,641 (3,086,500) 82,499 2,297,000 (79,974) (786,975) Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Accrued interest Compensated absences Other post employment benefit obligations Internal Service funds are used by management to charge the costs of risk to individual funds. The net revenue of the Internal Service funds is reported within governmental activities. Change in Net Position of Governmental Activities $ 25,785 (142,663) (4,020,000) (4, 136,878) (310,089) (5,693,001) The notes to the financial statements are an integral part of this statement. 24

98 Village of Ossining, New York Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General and Water Funds Year Ended December 31, 2013 General Fund Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) REVENUES Real property taxes $ 20,103,703 $ 20,153,703 $ 20,007,882 $ (145,821) Other tax items 184, , ,358 (20,751) Non-property taxes 3,925,000 4,125,503 4,254, ,729 Departmental income 1,566,400 1,664,657 1,648,281 (16,376) Intergovernmental charges 1,379,608 1,379,608 1,341,846 (37,762) Use of money and property 279, , ,981 2,205 Licenses and permits 190, , , ,025 Fines and forfeitures 566, , ,690 (132,310) Sale of property and compensation for loss 10,000 10,000 11,468 1,468 lnterfund revenues 782, , ,179 9,901 State aid 372, , , ,795 Federal aid 110, , ,261 Miscellaneous 92,256 92,256 98,379 6,123 Total Revenues 29,451,738 29,955,874 30,213, ,487 EXPENDITURES Current General government support 3,873,218 3,296,962 3,082, ,233 Public safety 8,998,976 9,024,318 8,926,298 98,020 Health 3,000 2,479 1, Transportation 2,321,300 2,289,596 2,190,034 99,562 Economic opportunity and development 87, , ,247 13,743 Culture and recreation 2,384,501 2,559,063 2,550,465 8,598 Home and community services 1,751,438 1,850,398 1,836,378 14,020 Employee benefits 9,656,712 10,431,249 10,361 '154 70,095 Debt service Principal Interest 1,543 1,543 1,542 Total Expenditures 29,078,491 29,576,598 29,057, ,871 Excess (Deficiency) of Revenues Over Expenditures -~_2Z3, ,276 1 '155, ,358 OTHER FINANCING SOURCES (USES) Bonds issued 500,000 Insurance recoveries 10, , ,537 51,669 Transfers in 132, , ,891 40,966 Transfers out (1,847,466) (2,074,282) (2,073,887) 395 Total Other Financing Uses (1,204,541) (1,643,489) (1,550,459) 93,030 Net Change in Fund Balances (831,294) (1,264,213) (394,825) 869,388 FUND BALANCE Beginning of Year 831,294 1,264,213 7,234,354 5,970,141 End of Year $ $ $ 6,839,529 $ 6,839,529 The notes to the financial statements are an integral part of this statement. 25

99 Water Fund Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) $ $ $ $ 8,932,917 8,932,917 8,987,442 54,525 3,000 3,000 6,427 3,427 23,039 26,794 3, ,335 61,335 10,000 10,000 21,947 11,947 8,945,917 8,968,956 9,104, , , , , ,117 6,291,754 6,275,313 5,546, ,867 1,129,618 1 '188,281 1 '173,758 14,523 57,503 60,095 9,809 50,286 7,977,016 8,156,973 7,226, , , ,983 1,878,610 1,066,627 75,000 75,000 75,000 (1,590,451) (1,617,157) (1,597,242) 19,915 (1,515,451) (1,542, 157) (1,522,242) 19,915 (546,550) (730, 174) 356,368 1,086, , ,174 5,454,421 4,724,247 $ $ $ 5,810,789 $ 5,810,789 26

100 Village of Ossining, New York Statement of Net Position Internal Service Funds December 31, 2013 ASSETS Cash and equivalents Accounts receivable Due from other funds Total Assets LIABILITIES Current liabilities Current portion of claims payable Claims payable, less current portion Total Liabilities NET POSITION Unrestricted Governmental Activities - Internal Service Funds $ 3,322,795 47, ,000 3,869, ,200 3,648,800 4,054,000 $ (184,011) The notes to the financial statements are an integral part of this statement. 27

101 Village of Ossining, New York Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds Year Ended December 31, 2013 OPERATING REVENUES Charges for services Insurance recoveries Total Operating Revenues OPERATING EXPENSES Insurance Contractual Employee benefits Judgments and claims Total Operating Expenses Loss from Operations NON-OPERATING REVENUES Interest income Change in Net Position NET POSITION Beginning of Year Governmental Activities - Internal Service Funds $ 2,064, ,153 2,349, , ,490 1,591,156 (67,815) 2,664,044 (314,794) 4,705 (310,089) 126,078 End of Year The notes to the financial statements are an integral part of this statement. $ (184,011) 28

102 Village of Ossining, New York Statement of Cash Flows Internal Service Funds Year Ended December 31, 2013 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from charges for services and insurance recoveries Cash payments to insurance carriers and claimants Net Cash from Operating Activities CASH FLOWS FROM INVESTING ACTIViTIES Interest income Net Change in Cash and Equivalents Cash and Equivalents - Beginning of Year Governmental Activities - Internal Service Funds $ 2,543,819 (1,727,201) 816,618 4, ,323 2,501,472 Cash and Equivalents- End of Year $ 3,322,795 RECONCILIATION OF LOSS FROM OPERATIONS TO NET CASH FROM OPERATING ACTIVITIES Loss from operations Adjustments to reconcile loss from operations to net cash from operating activities Changes in operating assets and liabilities Accounts receivable Due from other funds Accounts payable Claims payable Net Cash from Operating Activities $ $ (314,794) (8, 126) 202,695 (55, 157) 992, ,618 The notes to the financial statements are an integral part of this statement. 29

103 Village of Ossining, New York Statement of Assets and Liabilities Fiduciary Fund December 31, 2013 ASSETS Cash and equivalents Accounts receivable Total Assets LIABILITIES Accounts payable Employee payroll deductions Deposits Total Liabilities The notes to the financial statements are an integral part of this statement. $ $ $ $ Agency 231,287 5, ,350 38,589 7, , ,350 30

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105 Village of Ossining, New York Notes to Financial Statements December Note 1 - Summary of Significant Accounting Policies The Village of Ossining, New York ("Village") was established in 1813 and operates in accordance with Village Law and the various other applicable laws of the State of New York. The Village Board of Trustees is the legislative body responsible for overall operation. The Village Manager serves as the chief executive officer and the Village Treasurer serves as the chief financial officer. The Village provides the following services to its residents: public safety, health, transportation, economic opportunity and development, culture and recreation, home and community services and general and administrative support. The accounting policies of the Village conform to generally accepted accounting principles as applicable to governmental units and the Uniform System of Accounts as prescribed by the State of New York. The Governmental Accounting Standards Board ("GASB") is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the Village's more significant accounting policies: A. Financial Reporting Entity The financial reporting entity consists of a) the primary government which is the Village, b) organizations for which the Village is financially accountable and c) other organizations for which the nature and significance of their relationship with the Village are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete as set forth by GASB. In evaluating how to define the Village, for financial reporting purposes, management has considered all potential component units. The decision to include a potential component unit in the Village's reporting entity was made by applying the criteria set forth by GASB, including legal standing, fiscal dependency and financial accountability. Based upon the application of these criteria, there are no other entities which would be included in the financial statements. B. Government-Wide Financial Statements The government-wide financial statements (i.e. the Statement of Net Position and the Statement of Activities) report information on all non-fiduciary activities of the Village as a whole. For the most part, the effect of interfund activity has been removed from these statements, except for interfund services provided and used. The Statement of Net Position presents the financial position of the Village at the end of its fiscal year. The Statement of Activities demonstrates the degree to which direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or applicants who purchase, use or directly benefit from goods or services, or privileges provided by a given function or segment, (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment and (3) interest earned on grants that is required to be used to support a particular program. Taxes and other items not identified as program revenues are reported as general revenues. The Village does not allocate indirect expenses to functions in the Statement of Activities. 31

106 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 1 -Summary of Significant Accounting Policies (Continued) Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services in connection with a proprietary fund's principal ongoing operation. The principal operating revenues of the Internal Service funds are charges to customers for services. Operating expenses for the Internal Service funds include the cost of services, administrative expenses and benefit costs. All revenues and expenses not meeting the definition are reported as non-operating revenues and expenses. C. Fund Financial Statements The accounts of the Village are organized and operated on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts, which comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balances/net position, revenues and expenditures/expenses. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance related legal and contractual provisions. The Village maintains the minimum number of funds consistent with legal and managerial requirements. The focus of governmental fund financial statements is on major funds as that term is defined in professional pronouncements. Each major fund is to be presented in a separate column, with non-major funds, if any, aggregated and presented in a single column. Fiduciary funds are reported by type. Since the governmental fund statements are presented on a different measurement focus and basis of accounting than the government-wide statements' governmental activities column, a reconciliation is presented on the pages following, which briefly explain the adjustments necessary to transform the fund based financiai statements into the governmental activities column of the government-wide presentation. The Village's resources are reflected in the fund financial statements in three broad fund categories, in accordance with generally accepted accounting principles as follows: Fund Categories a. Governmental Funds - Governmental Funds are those through which most general government functions are financed. The acquisition, use and balances of expendable financial resources and the related liabilities are accounted for through governmental funds. The following represents the Village's major governmental funds. General Fund - The General Fund constitutes the primary operating fund of the Village in that it includes all revenues and expenditures not required by law to be accounted for in other funds. Special Revenue Funds - Special revenue funds are established to account for the proceeds of specific revenue sources that are legally restricted, committed or assigned to expenditures for certain defined purposes. The major special revenue fund of the Village is as follows: 32

107 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 1 -Summary of Significant Accounting Policies (Continued) Water Fund - The Water Fund is used to record the water operations of the Village which render services on a user charge basis to the general public. The major revenue source of this fund is departmental income. Debt Service Fund - The Debt Service Fund is used to account for and report financial resources that are restricted, committed or assigned to expenditures for principal and interest, and for financial resources that are being accumulated for principal and interest maturing in future years. Capital Projects Fund - The Capital Projects Fund is used to account for and report financial resources that are restricted, committed or assigned to expenditures for capital outlays, including the acquisition or construction of major capital facilities and other capital assets, other than those financed by proprietary funds. The Village also reports the following non-major special revenue funds: Sewer Fund - The Sewer Fund is used to record the sewer utility operations of the Village which render services on a user charge basis to the general public. Section 8 Housing Fund - The Section 8 Housing Fund is used to account for resources received from the U.S. Department of Housing and Urban Development for housing assistance payment purposes. Special Purpose Fund - The Special Purpose Fund is used to account for assets held by the Village in accordance with the terms of a trust agreement. b. Proprietary Funds - Proprietary funds consist of internal service funds. Internal service funds account for operations that provide services to other departments or agencies of the government, or to other governments, on a cost reimbursement basis. The Village has established its Workers' Compensation Benefits and General Liability Claims funds as internal service funds. c. Fiduciary Funds (Not Included in Government-Wide Financial Statements) - The Fiduciary Funds are used to account for assets held by the Village in an agency capacity on behalf of others. The Village's Agency Fund is primarily utilized to account for various deposits that are payable to other jurisdictions or individuals. D. Measurement Focus, Basis of Accounting and Financial Statement Presentation The accounting and financial reporting treatment applied to a fund is determined by its measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources (current assets less current liabilities) or economic resources (all assets and liabilities). The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the Internal Service funds. The 33

108 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 1 - Summary of Significant Accounting Policies (Continued) Agency Fund has no measurement focus but utilizes the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Property taxes are considered to be available if collected within sixty days of the fiscal year end. A ninety day availability period is used for revenue recognition for all other governmental fund revenues. Property taxes associated with the current fiscal period as well as charges for services and intergovernmental revenues are considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. Fees and other similar revenues are not susceptible to accrual because generally they are not measurable until received in cash. If expenditures are the prime factor for determining eligibility, revenues from Federal and State grants are accrued when the expenditure is made. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to certain claims, compensated absences and other post employment benefit obligations are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources. E. Assets, Liabilities, Deferred Outflows/Inflows of Resources and Net Position or Fund Balances Deposits and Risk Disclosure Cash and Equivalents - Cash and equivalents consist of funds deposited in demand deposit accounts, time deposit accounts and certificates of deposit with original maturities of less than three months. The Village's investment policies are governed by State statutes. The Village has adopted its own written investment policy which provides for the deposit of funds in FDIC insured commercial banks or trust companies located within the State. The Village is authorized to use demand deposit accounts, time deposit accounts and certificates of deposit. Permissible investments include obligations of the U.S. Treasury, U.S. Agencies, repurchase agreements and obligations of New York State or its political subdivisions accordingly, the Village's policy provides for no credit risk on investments. Collateral is required for demand deposit accounts, time deposit accounts and certificates of deposit at 100% of all deposits not covered by Federal deposit insurance. The Village has entered into custodial agreements with the various banks which hold its deposits. These agreements authorize the obligations that may be pledged as collateral. Such obligations include, among other instruments, obligations of the United States and its agencies and obligations of the State and its municipal and school district subdivisions. 34

109 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 1 - Summary of Significant Accounting Policies (Continued) Custodial credit risk is the risk that in the event of a bank failure, the Village's deposits may not be returned to it. GASB Statement No. 40 directs that deposits be disclosed as exposed to custodial credit risk if they are not covered by depository insurance and the deposits are either uncollateralized, collateralized by securities held by the pledging financial institution or collateralized by securities held by the pledging financial institution's trust department but not in the Village's name. The Village's aggregate bank balances that were not covered by depository insurance were not exposed to custodial credit risk at December 31,2013. The Village was invested only in the above mentioned obligations and, accordingly, was not exposed to any interest rate risk. Taxes Receivable - Real property taxes attach as an enforceable lien on real property as of January 1st and are levied and payable in two installments due in January and July. The Village is responsible for the billing and collection of its taxes. The Village is also responsible for conducting in-rem foreclosure proceedings. Other Receivables - Other receivables include amounts due from other governments and individuals for services provided by the Village. Receivables are recorded and revenues recognized as earned or as specific program expenditures/expenses are incurred. Allowances are recorded when appropriate. Due From/To Other Funds ~ During the course of its operations, the Village has numerous transactions between funds to finance operations, provide services and construct assets. To the extent that certain transactions between funds had not been paid or received as of December 31, 2013, balances of interfund amounts receivable or payable have been recorded in the fund financial statements. Prepaid Expenses/Expenditures - Certain payments to vendors reflect costs applicable to future accounting periods, and are recorded as prepaid items using the consumption method in both the government-wide and fund financial statements. Reported amounts in the governmental funds are equally offset by nonspendable fund balance, which indicates that these amounts do not constitute "available spendable resources" even though they are a component of current assets. Inventories - lnventoriable items in the General Fund consist of materials and supplies and are recorded at cost on a first-in, first-out basis. These inventories consist primarily of items held for consumption. The cost is recorded as inventory at the time individual inventory items are purchased. The Village uses the consumption method to relieve inventory. Reported inventories are equally offset by nonspendable fund balance in the fund financial statements, which indicates that they do not constitute "available spendable resources" even though they are a component of current assets. Purchases of inventoriable items in other funds are recorded as expenditures at the time of purchase and year-end balances are not material. Capital Assets - Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks and similar items) are reported in the government-wide financial statements. Capital assets are defined by the Village as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. 35

110 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 1 - Summary of Significant Accounting Policies (Continued) In the case of the initial capitalization of infrastructure assets (i.e., those reported by governmental activities), the Village chose to include all such items regardless of their acquisition date or amount. The Village was able to estimate the historical cost for the initial reporting of these assets through backtrending (i.e., estimating the current replacement cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost to the acquisition year or estimated acquisition year). Major outlays for capital assets and improvements are capitalized as projects are constructed. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives is not capitalized. Land and construction-in-progress are not depreciated. Property, plant, infrastructure and machinery and equipment of the Village are depreciated using the straight-line method over the following estimated useful lives. Class Land improvements Buildings and improvements Infrastructure Machinery and equipment Life in Years The costs associated with the acquisition or construction of capital assets are shown as capital outlay expenditures on the governmental fund financial statements. Capital assets are not shown on the governmental fund balance sheet. Unearned Revenues - Unearned revenues arise when assets are recognized before revenue recognition criteria have been satisfied. In government-wide financial statements, unearned revenues consist of amounts received in advance and/or revenue from grants received before the eligibility requirements have been met. Unearned revenues in the fund financial statements are those where asset recognition criteria have been met, but for which revenue recognition criteria have not been met. The Village has reported unearned revenues of $290,257 for parking and other payments received in advance in the General Fund. Unearned revenues of $42,768 are reflected in the Section 8 Housing Fund and $19,799 is reflected in the Water Fund for miscellaneous items. Such amounts have been deemed to be measurable but not "available" pursuant to generally accepted accounting principles. Deferred Outflows/Inflows of Resources -!n addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until then. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. 36

111 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 1 -Summary of Significant Accounting Policies (Continued) The Village reported deferred outflows of resources of $575,842 for a deferred loss on refunding bonds in the government-wide Statement of Net Position. This amount results from the difference in the carrying value of the refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The Village reported deferred inflows of resources of $240,773 for real property taxes in the General Fund. The Village also reported deferred inflows of resources of $288,751 for taxes collected in advance in the General Fund and in the government-wide Statement of Net Position. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. Long-Term Liabilities - In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the Statement of Net Position. Bond premiums and discounts, are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expended as incurred. In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as Debt Service or Capital Projects funds expenditures. Compensated Absences - The various collective bargaining agreements provide for the payment of accumulated vacation and sick leave upon separation of service. The liability for such accumulated leave is reflected in the government-wide Statement of Net Position as current and long-term liabilities. A liability for these amounts is reported in the governmental funds only if the liability matured through employee resignation or retirement. The liability for compensated absences includes salary related payments, where applicable. Net Position - Net position represents the difference between assets and liabilities. Net position is reported as restricted when there are limitations imposed on its use either through the enabling legislation adopted by the Village or through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. Net position on the Statement of Net Position includes, net investment in capital assets, restricted for: crime control, future capital projects, debt service, general liability claims, water, sewer, Section 8 Housing and trusts. The balance is classified as unrestricted. Fund Balances - Generally, fund balance represents the difference between current assets and deferred outflows of resources and current liabilities and deferred inflows of resources. In the fund financial statements, governmental funds report fund classifications that comprise a hierarchy based primarily on the extent to which the Village is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Under this standard the fund balance classifications are as follows: Nonspendable fund balance includes amounts that cannot be spent because they are either not in spendable form (inventories, prepaid amounts, long-term receivables, advances) or they are legally or contractually required to be maintained intact (the corpus of a permanent fund). 37

112 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 1 -Summary of Significant Accounting Policies (Continued) F. Encumbrances Restricted fund balance is reported when constraints placed on the use of the resources are imposed by grantors, contributors, laws or regulations of other governments or imposed by law through enabling legislation. Enabling legislation includes a legally enforceable requirement that these resources be used only for the specific purposes as provided in. the legislation. This fund balance classification is used to report funds that are restricted for debt service obligations and for other items contained in General Municipal Law of the State of New York. Committed fund balance is reported for amounts that can only be used for specific purposes pursuant to formal action of the entity's highest level of decision making authority. The Village Board is the highest level of decision making authority for the Village that can, by the adoption of a resolution prior to the end of the fiscal year, commit fund balance. Once adopted, these funds may only be used for the purpose specified unless the Village removes or changes the purpose by taking the same action that was used to establish the commitment. This classification includes certain amounts established and approved by the Village Board. Assigned fund balance, in the General Fund, represents amounts constrained either by policies of the Village Board for amounts assigned for balancing the subsequent year's budget or the Village Treasurer for amounts assigned for encumbrances. Unlike commitments, assignments generally only exist temporarily, in that additional action does not normally have to be taken for the removal of an assignment. An assignment cannot result in a deficit in the unassigned fund balance in the General Fund. Assigned fund balance in all other governmental funds represents any positive remaining amount after classifying nonspendable, restricted or committed fund balance amounts. Unassigned fund balance, in the General Fund, represents amounts not classified as nonspendable, restricted, committed or assigned. The General Fund is the only fund that would report a positive amount in unassigned fund balance. For all governmental funds other than the General Fund, unassigned fund balance would necessarily be negative, since the fund's liabilities and deferred inflows of resources, together with amounts already classified as nonspendable, restricted and committed would exceed the fund's assets and deferred outflows of resources. In order to calculate the amounts to report as restricted and unrestricted fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. When both restricted and unrestricted amounts of fund balance are available for use for expenditures incurred, it is the Village's policy to use restricted amounts first and then unrestricted amounts as they are needed. For unrestricted amounts of fund balance, it is the Village's policy to use fund balance in the following order: committed, assigned, and unassigned. In governmental funds, encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve applicable appropriations, is generally employed as an extension of formal budgetary integration in the Gemeral, Water, Sewer and Section 8 Housing funds. Encumbrances outstanding at year-end are reported as assigned fund balance since they do not constitute expenditures or liabilities. 38

113 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 1 -Summary of Significant Accounting Policies (Continued) G. Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources and disclosures of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. H. Subsequent Events Evaluation by Management Management has evaluated subsequent events for disclosure and/or recognition in the financial statements through the date that the financial statements were available to be issued, which date is May 10, Note 2 - Stewardship, Compliance and Accountability A. Budgetary Data The Village generally follows the procedures enumerated below in establishing the budgetary data reflected in the financial statements: a) On or before the first regular meeting of the Soard of Trustees in November, the budget officer submits to the Board of Trustees a tentative operating budget for the fiscal year commencing the following January 1st. The tentative budget includes proposed expenditures and the means of financing. b) The Board of Trustees conducts a public hearing on the tentative budget to obtain taxpayer comments at the second regular meeting in November. c) After the public hearing and on or before the first regular meeting in December, the Trustees meet to consider and adopt the budget, at which time they are required to file the document with the Village Clerk. d) Formal budgetary integration is employed during the year as a management control device for General, Water, Sewer, Section 8 Housing and Debt Service funds. e) Budgets for General, Water, Sewer, Section 8 Housing and Debt Service funds are legally adopted annually on a basis consistent with generally accepted accounting principles. The Capital Projects Fund is budgeted on a project basis. Annual budgets are not adopted by the Board of Trustees for the Special Purpose or Proprietary funds. f) The Board of Trustees has established legal control of the budget at the function level of expenditures. Transfers between appropriation accounts, at the function level, require approval by the Board. Any modification to appropriations resulting from an increase in revenue estimates or supplemental reserve appropriations also require a majority vote by the Board. 39

114 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 2 -Stewardship, Compliance and Accountability (Continued) g) Appropriations in the General, Water, Sewer, Section 8 Housing and Debt Service funds lapse at the end of the fiscal year, except that outstanding encumbrances are reappropriated in the succeeding year pursuant to the Uniform System of Accounts promulgated by the Office of the State Comptroller. Budgeted amounts are as originally adopted, or as amended by the Board of Trustees. B. Property Tax Limitation The Village is permitted by the Constitution of the State of New York to levy taxes up to 2% of the five year average full valuation of taxable real estate located within the Village, exclusive of the amount raised for the payment of interest on and redemption of long-term debt. In accordance with this definition, the maximum amount of the levy for the 2013 fiscal year was $40,926,502 which exceeded the actual levy by $20,918,620. On Ju ne 24, 2011, the Governor signed Chapter 97 of the Laws of 2011 ("Tax Levy Limitation Law''). This applies to all local governments. The Tax Levy Limitation Law restricts the amount of real property taxes that may be levied by a Village in a particular year, beginning with the 2012 year. It expires on June 16, The following is a brief summary of certain relevant provisions of the Tax Levy Limitation Law. The summary is not complete and the full text of the Tax Levy Limitation Law should be read in order to understand the details and implementations thereof. The Tax Levy Limitation Law imposes a limitation on increases in the real property tax levy, subject to certain exceptions. The Tax Levy Limitation Law permits the Village to increase its overall real property tax levy over the tax levy of the prior year by no more than the "Allowable Levy Growth Factor," which is the lesser of one and two-one hundredths or the sum of one plus the Inflation Factor; provided, however that in no case shall the levy growth factor be less than one. The "Inflation Factor" is the quotient of: (i) the average of the National Consumer Price Indexes determined by the United States Department of Labor for the twelve-month period ending six months prior to the start of the coming fiscal year minus the average of the National Consumer Price Indexes determined by the United States Department of Labor for the twelvemonth period ending six months prior to the start of the prior fiscal year, divided by (ii) the average of the National Consumer Price Indexes determined by the United States with the result expressed as a decimal to four places. The Village is required to calculate its tax levy limit for the upcoming year in accordance with the provision above and provide all relevant information to the New York State Comptroller prior to adopting its budget. The Tax Levy Limitation Law sets forth certain exclusions to the real property tax levy limitation of the Village, including exclusions for certain portions of the expenditures for retirement system contributions and tort judgments payable by the Village. The Village Board of Trustees may adopt a budget that exceeds the tax levy limit for the coming fiscal year, only if the Village Board of Trustees first enacts, by a vote of at least sixty percent of the total voting power of the Village Board of Trustees, a local law to override such limit for such coming fiscal year. 40

115 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 2 -Stewardship, Compliance and Accountability (Continued) C. Application of Accounting Standards For the year ended December 31, 2013, the Village implemented GASB Statement No. 65, "Items Previously Reported as Assets and Liabilities". This statement establishes accounting and financial reporting standards that reclassify, as deferred outflows/inflows of resources, certain items that were previously reported as assets and liabilities. This statement also recognizes as outflows of resources (expenses or expenditures) or inflows of resources (revenues), certain items that were previously reported as assets and liabilities. D. Capital Projects Fund Individual Project Deficits Deficits in certain projects arise in part because of the application of generally accepted accounting principles to the financial reporting of such funds. The proceeds of bond anticipation notes issued to finance construction of capital projects are not recognized as an "other financing source". Liabilities for bond anticipation notes are accounted for in the Capital Projects Fund.. Bond anticipation notes are recognized as revenue only to the extent that they are redeemed. These deficits will be reduced and eliminated as bond anticipation notes are redeemed from interfund transfers from other governmental funds or converted to permanent financing. Other deficits, where no bond anticipation notes were issued or outstanding to the extent of the project deficit, arise because of expenditures exceeding current financing on the projects. These deficits will be eliminated with the subsequent receipt or issuance of authorized financing. E. Workers' Compensation Benefits Fund Deficit The Workers' Compensation Benefits Fund has an unrestricted deficit of $485,486 at December 31, The Village will address this deficit in the ensuing years. Note 3 - Detailed Notes on All Funds A. Taxes Receivable Taxes receivable at December 31, 2013 consisted of the following: Taxes- Current $ 361,655 Taxes - Overdue 289, ,586 Allowance for uncollectible taxes {343,015} $ 308,571 Taxes receivable in the fund financial statements are partially offset by deferred tax revenues of $240,773, which represents an estimate of the taxes receivable which will not be collected within the first sixty days of the subsequent year. 41

116 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 3 - Detailed Notes on All Funds (Continued) B. Due From/To Other Funds The balances reflected as due from/to other funds at December 31, 2013 were as follows: c. Capital Assets Due Due Fund From To General Fund $ 27,546 $ 456,413 Water Fund 3,937 98,075 Debt Service Fund 46,570 5,586 Capital Projects 176,646 55,098 Non-Major Governmental 48, ,744 internal Service Funds Workers' Compensation Benefits 500,000 Changes in the Village's capital assets are as follows: $ 802,916 $ 802,916 Balance Balance January 1, December 31, 2013 Additions Deletions 2013 Capital Assets, not being depreciated Land $ 2,515,572 $ $ 39,810 $ 2,475,762 Construction-in-progress 11192,189 2,290,141 2,220,652 1,261,678 Total Capital Assets, not being depreciated $ 3,707,761 $ 2,290,141 $ 2,260,462 $ 3,737,440 Capital Assets, being depreciated Land improvements $ 2,807,673 $ 520,990 $ $ 3,328,663 Buildings and improvements 44,100, ,230 50,000 44,381,779 Infrastructure 140,177,458 1,425, ,602,516 Machinery and equipment 14,932, ,959 15,355,314 Total Capital Assets, being depreciated 202,018,035 2,700,237 50, ,668,272 Less Accumulated Depreciation for Land improvements 1,789, ,427 1,931,099 Buildings and improvements 15,945,445 1,486,368 50,000 17,381,813 Infrastructure 100,115,069 3,191, ,306,485 Machinery and equipment 11, ,522 12,285,684 Total Accumulated Depreciation 129,511,348 5,443,733 50, ,905,081 Total Capital Assets, being depreciated, net $ 72,506,687 $ (2,743,496) $ $ 69,763,191 Capital Assets, net $ 76,214,448 $ {453,355} $ 2,260,462 $ 73,500,631 42

117 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 3 - Detailed Notes on All Funds (Continued) Depreciation expense was charged to the Village's functions and programs as follows: Governmental Activities: General Government Support Public Safety Transportation Culture and Recreation Home and Community Services Total Depreciation Expense $ 196, ,249 2,913, , $ 5,443,733 D. Health Claim Liabilities The financial statements reflect the liability for health benefit claims. These liabilities are based upon estimates of the ultimate cost of claims (including future claim adjustment expenses) that have been reported, but not settled, and of claims that have been incurred but not reported. The length of time for which such costs must be estimated varies depending on the coverage involved. Because actual claim costs depend on various factors such as inflation, the process used in computing claims liabilities does not necessarily result in an exact amount. A provision for inflation in the calculation of estimated future claim costs is implicit in the calculation because reliance is placed on both actual historical data that reflects past inflation and other factors that are. considered to be appropriate modifiers of past experience. The following health claim liabilities are included within accounts payable in the entity-wide and fund financial statements. An analysis of the activity of unpaid health benefit claim liabilities is as follows: Year Ended December 31, Balance- Beginning of Year- Health Claim Liabilities $ 301,277 $ 408,571 Provision for Claims and Claims Adjustment Expenses 5,740,981 4,259,080 Claims and Claims Adjustment Expenses Paid (5,142,978) {4,366,374} Balance - End of Year - Health Claim Liabilities $ 899,280 $ 301,277 E. Accrued Liabilities Accrued liabilities at December 31, 2013 were as follows: General Fund Water Other Governmental Total Payroll and Employee Benefits $ 631,736 $ 98,039 =$===5,=04=5= $ 734,820 43

118 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 3 - Detailed Notes on All Funds (Continued) F. Pension Plans The Village participates in the New York State and Local Employees' Retirement System ("ERS") and the New York State and Local Police and Fire Retirement System ("PFRS") ("Systems"). These Systems are cost-sharing multiple-employer defined benefit pension plans. The Systems provide retirement, disability and death benefits to plan members. Obligations of employers and employees to contribute and benefits to employees are governed by the New York State Retirement and Social Security Law. The Systems issue a publicly available financial report that includes financial statements and required supplementary information for the Systems. That report may be obtained by writing to the New York State and Local Employees' Retirement System, 110 State Street, Albany, New York Funding Policy - The Systems are non-contributory except for employees in tiers 3 and 4 that joined ERS and have less than ten years of service, who contribute 3% of their salary, employees in tier 5 who also contribute 3% of their salary without regard to their years of service and employees in tier 6 who contribute between 3% and 6% depending on salary levels and also without regard to years of service. Contributions are certified by the State Comptroller and expressed as a percentage of members' salary. Contribution rates are actuarially determined and based upon membership tier and plan. Contributions consist of a life insurance portion and regular pension contributions. Contribution rates for the plans' year ended March 31, 2014 are as follows: Tier/Plan Rate ERS % 3 A A A A PFRS Contributions made to the Systems for the current and two preceding years were as follows: ERS $ 1,738,790 1,596,992 1,270,320 PFRS $ 1,775,181 1,538,378 1,271,287 These contributions were equal to 100% of the actuarially required contributions for each respective fiscal year. 44

119 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 3 - Detailed Notes on All Funds (Continued) The current ERS and PFRS contributions for the Village were charged to the funds identified below. Fund ERS PFRS General $ 1,232,934 $ 1,775,181 Water 416,961 Sewer 61,067 Section 8 Housing 27,828 G. Short-Term Capital Borrowings- Bond Anticipation Notes $ 1,738,790 $ 1,775,181 The schedule below details the changes in short-term capital borrowings. Year of Balance Balance Original Maturity Rate of January 1, New December31, Pu~se Issue Date Interest 2013 Issues Redem~tions 2013 Master Plan % $ 33,000 $ $ 33,000 $ Planning Design Study ,000 8,000 Trailway at Riverwalk ,000 2,000 Recreation Building Generator ,000 65,000 Fire Chief's Vehicle / ,333 11,667 11,666 Indian Brook Water Reservoir and Dam / ,500,000 75,000 1,425,000 Pleasantville Road Pump Station Generator , ,000 Police Vehicles / ,000 23,333 46,667 Sing Sing Channel Improvements/ Flood Centro! / ,000 70,000 Fire Department SCBA Cylinders / ,200 7,040 28,160 Fire Chief's Vehicle / ,000 48,000 Police Vehicles 2012/ / ,000 80,000 DPWTruck / ,000 40,000 Sing Sing Kill Sewer Improvements / ,300,000 2,300,000 $ 2,256,533 $ 2,468,000 $ 745,040 $ 3,979,493 Liabilities for bond anticipation notes are generally accounted for in the Capital Projects Fund. Bond anticipation notes issued for judgments or settled claims are recorded in the fund paying the claim. Principal payments on bond anticipation notes must be made annually. State law requires that bond anticipation notes issued for capital purposes or judgments be converted to long-term obligations generally within five years after the original issue date. However, bond anticipation notes issued for assessable improvement projects may be renewed for periods equivalent to the maximum life of the permanent financing, provided that stipulated annual reductions of principal are made. 45

120 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 3 - Detailed Notes on All Funds (Continued) Interest expenditures/expenses of $22,566 were recorded in the fund financial statements in the following funds and in the government-wide financial statements. Fund Amount General $ 1,542 Water 9,809 Debt Service L 22,566 H. Long-Term Liabilities The following table summarizes changes in the Village's long-term indebtedness for the year ended December 31, 2013: Balance Maturities Balance January 1, New Issues/ and/or December 31, Due Within 2013 Additions Pa:t:ments 2013 One Year Bonds Payable Capital Construction $ 24,609,564 $ 3,086,500 $ 2,192,141 $ 25,503,923 $ 2,172,148 other 1,997, ,859 1,892, ,352 26,607,000 3,086,500 2,297,000 27,396,500 2,286,500 Plus Unamortized premium on bonds 841,235 77, ,690 27,448,235 3,086,500 2,374,545 28,160,190 2,286,500 other Non-Current Liabilities Energy Performance Contract Debt Payable 1,007,343 82, ,844 66,639 Claims Payable 3,062,000 1,523, ,341 4,054, ,200 Compensated Absences 996, , ,000 1,139, ,000 other Post Employment Benefit Obligations Payable 16,160,000 6,510,000 2,490,000 20,180,000 Total other Non-Current Liabilities 21,225,959 8,276,004 3,203,840 26,298, ,839 Total Long-term Liabilities $ 48,674,194 $ 11,362,504 $ 5,578,385 $ 54,458,313 $ 2,872,339 Each governmental fund's liability for claims payable, energy performance contract debt, compensated absences and other post employment benefit obligations are liquidated by the respective fund. The Village's indebtedness for bonds is satisfied by the Debt Service Fund, which is funded by the General, Water and Sewer funds. 46

121 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 3 - Detailed Notes on All Funds (Continued) Bonds Payable Bonds payable at December 31, 2013 are comprised of the following individual issues: Original Year of Issue Purpose Issue Amount Final Maturity Interest Rates Amount Outstanding at December 31, 2013 Refunding Bond 2004 $ 3,945,000 Public Improvements ,706,000 Public Improvements ,454,000 Refunding Bond ,485,000 Refunding Bond ,730,000 Public Improvements ,945,000 Public Improvements ,330,000 Refunding Bond ,430,000 Public Improvements ,772,000 Public Improvements ,086,500 April, 2016 October, 2024 November, 2027 March, 2019 June,2021 November, 2030 November, 2031 October, 2024 November, 2032 November, $ 690, ,000 3,610,000 1,410,000 1,705,000 5,280,000 2,115,000 5,400,000 3,550,000 3,086,500 $ 27,396,500 Interest expenditures of $865,816 were recorded in the fund financial statements in the Debt Service Fund. Interest expense of $832,201 was recorded in the government-wide financial statements. Energy Performance Contract Payable The Village, in 2012, entered into a contractual agreement to install energy saving equipment and/or upgrade existing facilities in order to assist the Village in reducing its ongoing energy costs. The terms of the agreement provide for monthly installments of $8,046 through The payments include interest which is based on a variable rate that is re-set every January. Currently, the applicable interest rate is 0.86%. The balance due at December 31, 2013 was $924,844. The annual requirements to amortize all bonded and energy performance contract debt outstanding as of December 31, 2013, including interest payments of $7,158,841 are as follows: Year Energy Performance Ending Bonds Contract Debt Total December 31, Principal Interest Principal Interest Principal Interest 2014 $ 2,286,500 $ 907,695 $ 66,639 5,775 $ 2,353,139 $ 913, ,315, ,363 89,523 7,028 2,404, , ,335, ,388 90,296 6,255 2,425, , ,070, ,163 91,076 5,476 2,161, , ,060, ,738 91,862 4,689 2,151, , ,560,000 2,174, ,345 11,412 9,031,345 2,186, ,385, ,425 24, ,409, , ,385, ,781 2,385, ,781 $ 27,396,500 $ 7, 118,172 $ 924,844 $ 40,669 $ 28,321,344 $ 7,158,841 47

122 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 3 - Detailed Notes on All Funds (Continued) The above general obligation bonds and energy performance contract debt are direct obligations of the Village for which its full faith and credit are pledged and are payable from taxes levied on all taxable real property within the Village. Claims Payable The Internal Service funds reflect workers' compensation and general liability claim liabilities. These liabilities are based upon estimates of the ultimate cost of claims (including future claim adjustment expenses) that have been reported, but not settled, and of claims that have been incurred but not reported. The length of time for which such costs must be estimated varies depending on the coverage involved. Because actual claim costs depend on such complex factors as inflation, changes in doctrines of legal liability and damage awards, the process used in computing claim liabilities does not necessarily result in an exact amount. Claim liabilities are recomputed periodically using a variety of actuarial and statistical techniques to produce current estimates that reflect recent settlements, claim frequency and other economic and social factors. A provisi.on for inflation in the calculation of estimated future claims costs is implicit in the calculation because reliance is placed both on actual historical data that reflects past inflation and other factors that are considered to be appropriate modifiers of past experience. An analysis of the activity of unpaid claim liabilities is as follows: Year Ended Year Ended December 31, 2013 December 31, 2012 Workers' General Workers' General Com~ensation Liabili~ Com12ensation Liabili~ Balance - Beginning of Year $ 2,458,000 $ 604,000 $ 2,134,000 $ 512,000 Provision for Claims and Claims Adjustment Expenses 1, (67,815) 683, ,748 Expenses Paid ~517,156} p4,185} {359,980} ~18,748} Balance - End of Year $ 3,532,000 $ 522,000 $ 2,458,000 $ 604,000 Current Portion $ 353,000 $ 52,200 $ 245,800 $ 60,400 Compensated Absences In accordance with existing collective bargaining agreements, certain employees are entitled to accumulate up to 275 days of sick leave. Additionally, after three years of service, unused personal time can be accumulated as sick time, to a maximum of 20 days. Upon retirement or termination, those employees with ten years of service will be compensated for accumulated sick leave. The amount of compensation is at the rate of 25% of the amount accumulated. Vacation time for all employees may be accumulated to a maximum of 10 days. It has been the Village's practice to compensate employees for unused vacation time upon separation of service. The value for compensated absences has been reflected in the government-wide financial statements. 48

123 Village of Ossining, New York Notes to Financial Statements (Continued) December Note 3 - Detailed Notes on All Funds (Continued) Other Post Employment Benefit Obligations Payable In addition to providing pension benefits, the Village provides certain health care benefits for retired employees through a single employer defined benefit plan. The various collective bargaining agreements stipulate the employees covered and the percentage of contribution. Contributions by the Village may vary according to length of service. The cost of providing health care benefits is shared between the Village and the retired employees. Substantially all of the Village's employees may become eligible for those benefits if they reach normal retirement age while working for the Village. The cost of other post employment benefit obligations payable is recognized as an expenditure as claims are paid. The Village has recognized revenues and expenditures of $67,699 for Medicare Part D payments made directly to its health insurance carrier on behalf of its retirees. The Village's annual other post employment benefit obligations ("OPES") cost (expense) is calculated based on the annual required contribution, ("ARC"), an amount actuarially determined in accordance with the parameters of GASS Statement No. 45. GASS Statement No. 45 establishes standards for the measurement, recognition and display of the expenses and liabilities for retirees' medical insurance. As a result, reporting of expenses and liabilities will no longer be accounted for under the "pay-as-you-go" approach. Instead of expensing the current year premiums paid, a per capita claims cost will be determined, which will be used to determine a "normal cost", an "actuarial accrued liability", and ultimately the ARC. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. Actuarial valuations for OPES plans involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. These amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Calculations are based on the OPES benefits provided under the terms of the substantive plan in effect at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. In addition, the assumptions and projections utilized do not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. The actuarial calculations of the OPES plan reflect a long-term perspective. The Village is required to accrue on the government-wide financial statements the amounts necessary to finance the plan as actuarially determined, which is equal to the balance not paid by plan members. Funding for the OPES plan has been established on a pay-as-you-go basis. The assumed increase in postretirement benefits is 9.5% for the first year, decreases in years two through ten by.5% per year through year ten then continues at 5% thereafter. The amortization basis is the level percentage of payroll method with an open amortization approach with 26 years remaining in the amortization period. The actuarial assumptions included a 4.5% investment rate of return, a 1.5% inflation rate and a 3.0% annual payroll growth. The Village currently has no assets set aside for the purpose of paying post employment benefits. The actuarial cost method utilized was the projected unit credit method. The number of participants as of January 1, 2013 was as follows: Active Employees Retired Employees Total