Township of Spring. Financial Statements and Supplementary Information. December 31, 2016

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1 Township of Spring Financial Statements and Supplementary Information December 31, 2016

2 Township of Spring Table of Contents December 31, 2016 Page INDEPENDENT AUDITOR'S REPORT 1 and 2 FINANCIAL STATEMENTS Balance Sheet Modified Cash Basis 3 Statement of Revenues and Expenditures Modified Cash Basis 4 to 10 SUPPLEMENTARY INFORMATION Debt Statement Modified Cash Basis 11 Statement of Capital Expenditures and Employee Compensation Modified Cash Basis 12

3 Independent Auditor's Report To the Board of Supervisors Township of Spring Berks County, Pennsylvania Report on the Financial Statements We have audited the general fund, special revenue funds, capital project funds, enterprise funds, and trust and agency funds presented in accordance with the reporting framework of the Commonwealth of Pennsylvania Annual Audit and Financial Report Form DCEDCLGS30 of the Township of Spring, Berks County, Pennsylvania, which comprise the modified cash basis balance sheet as of December 31, 2016, and the related modified cash basis statement of revenues and expenditures for the year then ended. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the reporting framework of the Commonwealth of Pennsylvania Annual Audit and Financial Report Form DCEDCLGS30 utilizing the modified cash basis of accounting. This includes determining that the modified cash basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Township'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 Township's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion Broadcasting Road, P.O. Box 7008, Wyomissing, PA Main: Fax: RKLcpa.com

4 Opinion on the Reporting Framework Required by the Commonwealth of Pennsylvania Annual Audit and Financial Report Form DCEDCLGS30 In our opinion, the financial statements referred to above present fairly, in all material respects, the respective modified cash basis financial position of the Township of Spring, Berks County, Pennsylvania, as of December 31, 2016, and the respective changes in modified cash basis financial position thereof for the year then ended in conformity with the reporting framework required by the Commonwealth of Pennsylvania Annual Audit and Financial Report Form DCED CLGS30. Supplementary Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying supplementary information, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from, and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the 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 financial statements as a whole in accordance with the reporting framework of the Commonwealth of Pennsylvania Annual Audit and Financial Report Form DCEDCLGS30. Restriction on Use Our report is intended solely for the information and use of the Board of Supervisors and management of the Township of Spring, the County of Berks, and the Commonwealth of Pennsylvania and others within these entities and is not intended to be, and should not be, used by anyone other than these specified parties. March 30, 2017 Wyomissing, Pennsylvania 2

5 Balance Sheet Modified Cash Basis Assets and Other Debits December 31, 2016 General Fund Governmental Funds Special Revenue (Including State Liquid Fuels) Capital Projects Debt Service Cash and Investments $ 6,697,387 $ 2,755,526 $ 2,511,793 $ Tax Receivable Accounts Receivable (excluding taxes) 130 Due From Other Funds 128,244 26, Other Current Assets Fixed Assets Other Debits Total Assets and Other Debits $ 6,825,631 $ 2,782,327 $ 2,511,793 $ Liabilities and Other Credits Payroll Taxes and Other Payroll Withholdings $ $ $ $ All Other Current Liabilities 230 Due To Other Funds 1,962 28, LongTerm Liabilities Current Portion of LongTerm Debt & Other Credits Total Liabilities and Other Credits $ 1,962 $ 28,537 $ $ Fund and Account Group Equity Contributed Capital $ $ $ $ 290 Investment in General Fixed Assets Fund Balance/Retained Earnings on 12/31 6,823,669 2,753,790 2,511, Other Equity Total Fund and Account Group Equity $ 6,823,669 $ 2,753,790 $ 2,511,793 $ 3

6 Proprietary Funds Fiduciary Fund Account Groups Total Enterprise Internal Service Trust and Agency General Fixed Assets General Long Term Debt Memorandum Only $ 4,448,637 $ $ 19,546,446 $ $ $ 35,959,789 75, ,362 $ 4,523,954 $ $ 19,546,446 $ $ $ 36,190,151 TOTAL ASSETS AND OTHER DEBITS $ 36,190,151 $ $ $ $ $ $ 199, ,362 $ 199,863 $ $ $ $ $ 230,362 TOTAL LIABILITIES AND OTHER CREDITS $ 230,362 $ $ $ $ $ $ 4,324,091 19,546,446 35,959,789 $ 4,324,091 $ $ 19,546,446 $ $ $ 35,959,789 TOTAL FUND AND ACCOUNT GROUP EQUITY TOTAL LIABILITIES AND FUND AND ACCOUNT GROUP EQUITY $ $ 35,959,789 36,190,151

7 Statement of Revenues and Expenditures Modified Cash Basis December 31, 2016 REVENUES Governmental Funds Special Revenue Taxes General Fund (Including State Liquid Fuels) Capital Projects Debt Service Real Estate Taxes $ 3,561,782 $ 1,570,528 $ $ Occupation Taxes (levied under municipal code) Residence Taxes (levied by cities of the 3rd Class) Regional Asset District Sales Tax (Allegheny County municipalities only) Per Capita Taxes Real Estate Transfer Taxes 663, Earned Income Taxes/Wage Taxes 3,880, Business Gross Receipts Taxes 1,248, Occupation Taxes (levied under Act 511) Local Services Tax** 588, Amusement/Admission Taxes Mechanical Device Taxes Other Local Tax Enabling Act/Act 511 Taxes Total Taxes $ 9,943,136 $ 1,570,528 $ $ Licenses and Permits All Other Licenses and Permits $ 242,335 $ $ $ Cable Television Franchise Fees 536,636 Total Licenses and Permits $ 778,971 $ $ $ Fines and Forfeits Fines and Forfeits $ 72,466 $ $ $ Total Fines and Forfeits $ 72,466 $ $ $ Interest, Rents and Royalties Interest Earnings $ 7,747 $ 18,022 $ 13,383 $ Rents and Royalties 7,200 Total Interest, Rents and Royalties $ 14,947 $ 18,022 $ 13,383 $ ** This tax was known as the Occupational Privilege Tax (OPT) prior to 2005 and the Emergency and Municipal Services Tax prior to

8 Proprietary Funds Fiduciary Fund Total Enterprise Internal Service Trust and Agency Memorandum Only $ $ $ $ 5,132, ,935 3,880,187 1,248, ,281 $ $ $ $ 11,513,664 $ $ $ $ 242, ,636 $ $ $ $ 778,971 $ $ $ $ 72,466 $ $ $ $ 72,466 $ 24,352 $ $ 1,316,535 $ 1,380,039 7,200 $ 24,352 $ $ 1,316,535 $ 1,387,239

9 Statement of Revenues and Expenditures Modified Cash Basis December 31, 2016 Intergovernmental Revenues Governmental Funds Special Revenue Federal General Fund (Including State Liquid Fuels) Capital Projects Debt Service Highways and Streets $ $ $ $ Community Development All Other Federal Capital and Operating Grants National Forest All Other Federal Shared Revenue and Entitlements 285, Federal Payments in Lieu of Taxes Total Federal $ $ $ 285,780 $ State Highway and Streets $ $ $ $ Community Development Recycling/Act , All Other State Capital and Operating Grants Public Utility Realty Tax (PURTA) 13, Motor Vehicle Fuel Tax (Liquid Fuels Tax) and State Road Turnback 829, Alcoholic Beverage Licenses 19, General Municipal Pension System State Aid 310, , Foreign Fire Insurance Tax Distribution 135, Local Share Assessment/Gaming Proceeds Marcellus Shale Impact Fee Distribution All Other State Shared Revenues and Entitlements 75,739 14, State Payments in Lieu of Taxes Total State $ 554,166 $ 1,045,732 $ $ Local Government Units Highways and Streets $ $ $ $ All Other Local Governmental Units Capital and Operating Grants Local Government Unit Shared Payments for Contracted Intergovernmental Services 31, Local Governmental Units, Authorities Payments and Payments in Lieu of Taxes Total Local Government Units $ $ 31,626 $ $ 5

10 Proprietary Funds Fiduciary Fund Total Enterprise Internal Service Trust and Agency Memorandum Only $ $ $ $ 285,780 $ $ $ $ 285,780 $ $ $ $ 79,264 13, ,636 19,540 13, , ,205 90,099 $ 13,124 $ $ $ 1,613,022 $ $ $ $ 31,626 $ $ $ $ 31,626 TOTAL INTERGOVERNMENTAL REVENUES $ 1,930,428

11 Statement of Revenues and Expenditures Modified Cash Basis December 31, 2016 REVENUES Governmental Funds Special Revenue Charges for Service General Fund (Including State Liquid Fuels) Capital Projects Debt Service General Government $ 226,820 $ 699 $ $ Public Safety 74, Parking All Other Charges for Highway & Streets Services Wastewater/Sewage Charges Solid Waste Collection & Disposal Charge (trash) 1,194, Host Municipality Benefit Fee for Solid Waste Facility All Other Charges for Sanitation Services 327, Health Human Services Culture and Recreation 466, Airports Bars Cemeteries Electric System Gas System Housing System Markets Transit Systems Water System All Other Charges for Service 15, ,025 Total Charges for Service $ 782,785 $ 1,673,703 $ $ Unclassified Operating Revenues Assessments $ 468 $ 447,462 $ $ Escheats (sale of personal property) Contributions and Donations from Private Sectors 61,100 6, Fiduciary Fund Pension Contributions All Other Unclassified Operating Revenues Total Unclassified Operating Revenues $ 61,568 $ 447,462 $ 6,000 $ Other Financing Sources Proceeds of General Fixed Asset Disposition $ 9,015 $ 17,400 $ $ Interfund Operating Transfers 605, ,000 1,876, Proceeds of General LongTerm Debt Proceeds of ShortTerm Debt Refunds of Prior Year Expenditures 298,247 69,579 Total Other Financing Sources $ 912,762 $ 521,979 $ 1,876,365 $ TOTAL REVENUES $ 13,120,801 $ 5,309,052 $ 2,181,528 $ 6

12 Proprietary Funds Fiduciary Fund Total Enterprise Internal Service Trust and Agency Memorandum Only $ 3,000 $ $ $ 230,519 74,237 4,468,295 4,468,295 1,194, , , ,375 $ 4,471,295 $ $ $ 6,927,783 $ $ $ $ 447,930 67,100 1,489,301 1,489,301 $ $ $ 1,489,301 $ 2,004,331 $ $ $ $ 26,415 30,000 2,946,865 32, ,784 $ 62,958 $ $ $ 3,374,064 $ 4,571,729 $ $ 2,805,836 $ 27,988,946

13 Statement of Revenues and Expenditures Modified Cash Basis December 31, 2016 EXPENDITURES Governmental Funds Special Revenue General Government General Fund (Including State Liquid Fuels) Capital Projects Debt Service Legislative (Governing) Body $ 12,000 $ $ $ Executive (Manager or Mayor) 95, Auditing Services/Financial Administration 181, Tax Collection 20,363 20, Solicitor/Legal Services 86, Secretary/Clerk 53, Other General Government Administration 524, ITNetworking Services Data Processing Engineering Services 219, General Government Buildings and Plant 211, ,806 Total General Government $ 1,403,800 $ 20,522 $ 339,806 $ Public Safety Police $ 5,583,091 $ $ 16,191 $ Fire 135,205 2,212, Ambulance/Rescue 368, UCC and Code Enforcement 482, Planning and Zoning 50, Emergency Management & Communications 54, Militia and Armories Examination of Licensed Occupations Public Scales (weights and measures) Other Public Safety Total Public Safety $ 6,673,799 $ 2,212,764 $ 16,191 $ Health and Human Services Health and Human Services $ $ $ $ Public Works Sanitation Recycling Collection and Disposal $ $ 317,088 $ $ Solid Waste Collection and Disposal (trash) 1,225, Weed Control Wastewater/Sewage Collection and Treatment Total Public Works Sanitation $ $ 1,542,148 $ $ 7

14 Proprietary Funds Fiduciary Fund Total Enterprise Internal Service Trust and Agency Memorandum Only $ $ $ $ 12,000 95, , ,505 40,885 86,074 53, , , ,298 $ 162 $ $ 104,981 $ 1,869,271 $ $ $ $ 5,599,282 2,347, , ,409 50,477 54,238 $ $ $ $ 8,902,754 $ $ $ $ $ $ $ $ 317,088 1,225,060 3,982,859 3,982,859 $ 3,982,859 $ $ $ 5,525,007

15 Statement of Revenues and Expenditures Modified Cash Basis December 31, 2016 EXPENDITURES Governmental Funds Special Revenue Public Works Highways & Streets General Fund (Including State Liquid Fuels) Capital Projects Debt Service General Services Administration $ 819,850 $ $ $ Cleaning of Streets and Gutters 169, Winter Maintenance Snow Removal 323, Traffic Control Devices 115, Street Lighting 9, , Sidewalks and Crosswalks Storm Sewers and Drains 36, Repairs of Tools and Machinery Maintenance and Repairs of Roads and Bridges 290, ,942 43, Highway Construction and Rebuilding Projects Total Public Works Highways & Streets $ 1,765,633 $ 981,297 $ 43,511 $ Public Works Other Services Airports $ $ $ $ Cemeteries Electric System Gas System Markets Parking Storm Water and Flood Control Transit System Water System Water Transport and Terminals Total Public Works Other Services $ $ $ $ Culture and Recreation CultureRecreation Administration $ 879,642 $ $ 235,412 $ Participant Recreation 68, Spectator Recreation Parks 399, Shade Trees Libraries 156, Civil and Military Celebrations Senior Citizens' Centers All Other Culture and Recreation Total Culture and Recreation $ 1,503,880 $ $ 235,412 $ 8

16 Proprietary Funds Fiduciary Fund Total Enterprise Internal Service Trust and Agency Memorandum Only $ $ $ $ 819, , , , ,303 36, ,156 $ $ $ $ 2,790,441 $ $ $ $ $ $ $ $ $ $ $ $ 1,115,054 68, , ,500 $ $ $ $ 1,739,292

17 Statement of Revenues and Expenditures Modified Cash Basis December 31, 2016 EXPENDITURES Governmental Funds Special Revenue Community Development General Fund (Including State Liquid Fuels) Capital Projects Debt Service Conservation of Natural Resources $ $ $ $ Community Development and Housing Economic Development Economic Opportunity All Other Community Development 3,000 Total Community Development $ 3,000 $ $ $ Debt Service Debt Principal (shortterm and longterm) $ 43,843 $ 125,999 $ 817,137 $ Debt Interest (shortterm and longterm) 14, , Fiscal Agent Fees Total Debt Service $ 43,843 $ 140,796 $ 1,799,528 $ Employer Paid Benefits & Withholding Items Employer Paid Withholding Taxes and Unemployment Compensation $ $ $ $ Judgments and Losses Pension/Retirement Fund Contributions Workers Compensation Insurance 101,005 61, Group Insurance and Other Benefits Total Employer Paid Benefits & Withholding Items $ 101,005 $ 61,667 $ $ Insurance Insurance, Casualty and Surety $ 110,237 $ $ $ Unclassified Operating Expenditures Fiduciary Fund Benefits and Refunds Paid $ $ $ $ All Other Unclassified Expenditures Total Unclassified Operating Expenditures $ $ $ $ 9

18 Proprietary Funds Fiduciary Fund Total Enterprise Internal Service Trust and Agency Memorandum Only $ $ $ $ 3,000 $ $ $ $ 3,000 $ $ $ $ 986, ,188 19,405 19,405 $ 19,405 $ $ $ 2,003,572 $ $ $ $ 5, ,125 $ 5,453 $ $ $ 168,125 $ 49,454 $ $ $ 159,691 $ $ $ 1,254,253 $ 1,254,253 $ $ $ 1,254,253 $ 1,254,253

19 Statement of Revenues and Expenditures Modified Cash Basis December 31, 2016 EXPENDITURES Governmental Funds Special Revenue Other Financing Uses General Fund (Including State Liquid Fuels) Capital Projects Debt Service Refund of Prior Year Revenues $ 3,989 $ 64,303 $ $ Interfund Operating Transfers 916, , , All Other Financing Uses Total Other Financing Uses $ 920,199 $ 356,803 $ 464,000 $ TOTAL EXPENDITURES $ 12,525,396 $ 5,315,997 $ 2,898,448 $ EXCESS/DEFICIT OF REVENUES OVER EXPENDITURES $ 595,405 $ (6,945) $ (716,920) $ 10

20 Proprietary Funds Fiduciary Fund Total Enterprise Internal Service Trust and Agency Memorandum Only $ $ $ $ 68,292 1,274,155 2,946,865 $ 1,274,155 $ $ $ 3,015,157 $ 5,331,488 $ $ 1,359,234 $ 27,430,563 $ (759,759) $ $ 1,446,602 $ 558,383

21 Purpose GENERAL OBLIGATION BONDS AND NOTES: General Obligation Bond General Obligation Bond REVENUE BONDS AND NOTES: None. Bond (B) Note (N) Issue Date (Year) DEBT STATEMENT MODIFIED CASH BASIS Maturity Date (Year) Original Amount of Issue Outstanding Beginning of Year (1) Principal Incurred This Year (Additions) Principal Paid This Year Current Year Accretion of Compound Interest Bonds Outstanding Year End (1) Plus (Less) Unamortized Premium (Discount) Total Balance B $ 15,120,000 $ 15,100,000 $ $ 5,000 $ $ 15,095,000 $ $ 15,095,000 B ,475,000 5,360, ,000 4,730,000 4,730,000 LEASE RENTAL DEBT/GENERAL LEASES: Vehicle Lease ,623 23,635 23,635 Vehicle Lease ,966 27,823 13,556 14,267 14,267 Vehicle Lease ,462 22,703 11,064 11,639 11,639 Vehicle Lease , ,236 73, , ,440 Vehicle Lease ,379 69,104 69,104 Vehicle Lease ,930 25,733 8,253 17,480 17,480 Vehicle Lease , ,749 37, , ,794 Vehicle Lease ,188 59,253 14,167 45,086 45,086 Vehicle Lease ,586 45,705 22,517 23,188 23,188 Vehicle Lease ,899 27,554 13,772 13,782 13,782 OTHER: County of Berks Radio Loan Fire Dept N ,160 73,807 18,453 55,354 55,354 County of Berks Radio Loan Fire AFG N ,043 7,454 1,864 5,590 5,590 County of Berks Radio Loan Police N , ,119 34, , ,338 County of Berks Radio Loan West Side EMA N ,109 9,243 4,621 4,622 4,622 County of Berks Radio Loan Western Berks Ambulance N ,184 6,873 3,436 3,437 3,437 County of Berks Radio Loan Western Berks Ambulance AFG N ,025 2,010 1,005 1,005 1,005 Total bonds and notes outstanding $ 19,825,000 Capital lease obligations 645,676 Other debt 174,346 TOTAL OUTSTANDING DEBT $ 20,645,022 $ Principal additions per Debt Statement Vehicle leases (noncash) $ Line Proceeds of General LongTerm Debt 11

22 Statement of Capital Expenditures and Employee Compensation Modified Cash Basis Category Capital Purchases Capital Construction Total Community Development $ $ $ Electric Fire 50,127 50,127 Gas System General Government 358,371 1, ,150 Health Housing Libraries Mass Transit Parks 8,975 6,859 15,834 Police 159, ,710 Recreation 230, ,372 Sewer 47, , ,874 Solid Waste Streets/Highways 7, , ,105 Water Other (Please Specify) TOTAL CAPITAL EXPENDITURES $ 2,117,172 EMPLOYEE COMPENSATION Total salaries, wages, commissions, etc. paid this year (including all employees and elected officials)* $ 6,445,898 * USE INCOME FROM BOX 16 OF THE W3 STATEMENT 12