BOROUGH OF BELMAR COUNTY OF MONMOUTH, NEW JERSEY REPORT OF AUDIT YEAR ENDED DECEMBER 31, 2017

REPORT OF AUDIT YEAR ENDED DECEMBER 31, 2017

COUNTY OF MONMOUTH TABLE OF CONTENTS FOR THE YEAR ENDED DECEMBER 31, 2017 PART I Page Independent Auditor s Report 1-3 Independent Auditor s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 4-5 CURRENT FUND Comparative Balance Sheets - Regulatory Basis Comparative Statements of Operations and Change in Fund Balance - Regulatory Basis Statement of Revenues - Regulatory Basis Statement of Expenditures - Regulatory Basis Exhibit A A-1 A-2 A-3 TRUST FUND Comparative Balance Sheets- Regulatory Basis Statement of Fund Balance - Trust Assessment Fund - Regulatory Basis B B-1 GENERAL CAPITAL FUND Comparative Balance Sheets - Regulatory Basis Statement of Changes in Fund Balance - Regulatory Basis C C-1 BEACH UTILITY FUND Comparative Balance Sheets - Regulatory Basis Comparative Statements of Operations and Changes in Operating Fund Balance - Regulatory Basis Statement of Changes in Capital Fund Balance - Regulatory Basis Statement of Revenues - Regulatory Basis Statement of Expenditures - Regulatory Basis D D-1 D-2 D-3 D-4 PARKING UTILITY OPERATING FUND Comparative Balance Sheets- Regulatory Basis E Comparative Statementsof Operations and Changes in Fund Balance - Regulatory E-1 Basis Statement of Revenues - Regulatory Basis E-2 Statement of Expenditures - Regulatory Basis E-3

COUNTY OF MONMOUTH TABLE OF CONTENTS (Continued) WATER/SEWER UTILITY CAPITAL FUND Comparative Balance Sheets - Regulatory Basis Comparative Statements of Operations and Changes in Operating Fund Balance - Regulatory Basis Statement of Changes in Capital Fund Balance - Regulatory Basis Statement of Revenues - Regulatory Basis Statement of Expenditures - Regulatory Basis Exhibit F F-1 F-2 F-3 F-4 PUBLIC ASSISTANCE FUND Comparative Balance Sheets - Regulatory Basis G PAYROLL FUND Comparative Balance Sheets - Regulatory Basis H GENERAL FIXED ASSET ACCOUNT GROUP Comparative Statements of General Fixed Assets - Regulatory Basis NOTES TO FINANCIAL STATEMENTS CURRENT FUND I Page 6-47 Exhibit Schedule of Cash and Cash Equivalents A-4 Schedule of Due from State of New Jersey - Senior Citizens and Veterans Deductions A-5 Schedule of Taxes Receivable and Analysis of Levy A-6 Schedule of Tax Title Liens Receivable A-7 Schedule of Revenue Accounts Receivable A-8 Schedule of Investments in General Capital Fund Notes A-9 Schedule of PILOT Receivable A-10 Schedule of Interfunds Receivable/(Payable) A-11 Schedule of Deferred Charges - N.J.A. 40A: 4-55 Special Emergency A-12 Schedule of State and Federal Grants Receivable - Grant Fund A-13 Schedule of Appropriation Reserves A-14 Schedule of Reserve for Encumbrances A-15

COUNTY OF MONMOUTH TABLE OF CONTENTS (Continued) Exhibit CURRENT FUND (continued) Schedule of Prepaid Taxes A-16 Schedule of Tax Overpayments Payable A-17 Schedule of County Taxes Payable A-18 Schedule of Payment In Lieu of Taxes Due to County A-19 Schedule of School Taxes Payable A-20 Schedule of Prepaid Licenses and Fees A-21 Schedule of Various Reserves A-22 Schedule of Accounts Payable A-23 Schedule of Due to State of New Jersey - Various Payables A-24 Schedule of Due to Monmouth County - RCA Program A-25 Schedule of Reserve for Grant Expenditures - Appropriated - Grant Fund A-26 Schedule of Reserve for Grants - Unappropriated - Grant Fund A-27 Schedule of Special Improvement District Payable A-28 TRUST FUND Schedule of Cash B-2 Schedule of Prospective Assessments - Unfunded B-3 Schedule of Police Outside Duty Receivable B-4 Schedule of Interfunds - Trust Other B-5 Schedule of Prepaid Fees - Animal Control Trust Fund B-6 Schedule of Due to/(from) State of New Jersey - Animal Control Trust Fund B-7 Schedule of Interfund - Current Fund - Animal Control Trust Fund B-8 Schedule of Reserve for Animal Control Fund Expenditures - Animal Control Fund B-9 Schedule of Reserve for Tourism - Trust Other Fund B-10 Schedule of Various Reserves - Trust Other Fund B-11 Schedule of Reserve for Prospective Assessments - Unfunded - Trust Assessment Fund B-12 Schedule of Reserve for Encumbrances Animal Control Fund B-13 Schedule of Reserve for Deferred Charges B-14 GENERAL CAPITAL FUND Schedule of Cash C-2 Schedule of Analysis of General Capital Fund Cash C-3 Schedule of Deferred Charges to Future Taxation - Funded C-4 Schedule of Deferred Charges to Future Taxation - Unfunded C-5 Schedule of Grants Receivable C-6 Schedule of Prospective Assessments Raised by Taxation C-7 Schedule of General Serial Bonds C-8 Schedule of Green Trust Loans Payable C-9 Schedule of Bond Anticipation Notes C-10

COUNTY OF MONMOUTH TABLE OF CONTENTS (Continued) GENERAL CAPITAL FUND (continued) Exhibit Schedule of Interfunds C-11 Schedule of Improvement Authorizations C-12 Schedule of Reserve for Encumbrances C-13 Schedule of Various Reserves C-14 Schedule of Capital Improvement Fund C-15 Schedule of Bonds and Notes Authorized But Not Issued C-16 BEACH UTILITY FUND Schedule of Cash D-5 Schedule of Analysis of Beach Utility Capital Fund Cash D-6 Schedule of Interfunds D-7 Schedule of Appropriation Reserves D-8 Schedule of Reserve for Encumbrances - Beach Utility Operating Fund D-9 Schedule of Interfunds - Beach Utility Capital Fund D-10 Schedule of Prepaid Revenue D-11 Schedule of Accrued Interest Payable D-12 Schedule of Various Reserves D-13 Schedule of Fixed Capital D-14 Schedule of Fixed Capital Authorized and Uncompleted D-15 Schedule of Interfund - Beach Utility Operating Fund D-16 Schedule of Bond Anticipation Notes D-17 Schedule of Improvement Authorizations D-18 Schedule of Reserve for Encumbrances - Beach Utility Capital Fund D-19 Schedule of Capital Improvement Fund D-20 Schedule of Reserve for Amortization D-21 Schedule of Reserve for Deferred Amortization D-22 Schedule of Bonds and Notes Authorized But Not Issued D-23 PARKING UTILITY OPERATING FUND Schedule of Cash E-4 Schedule of Appropriation Reserves E-5 Schedule of Reserve for Encumbrances E-6

COUNTY OF MONMOUTH TABLE OF CONTENTS (Continued) Exhibit WATER/SEWER UTILITY CAPITAL FUND Schedule of Cash and Cash Equivalents F-5 Schedule of Analysis of Water/Sewer Utility Capital Fund Cash and Cash Equivalents F-6 Schedule of Consumer Accounts Receivable F-7 Schedule of Interfunds - Payroll Fund F-8 Schedule of Interfunds - Water/Sewer Utility Capital Fund F-9 Schedule of Water Meter Installments Receivable F-10 Schedule of Deferred Charges F-11 Schedule of Appropriation Reserves F-12 Schedule of Consumer Overpayments F-13 Schedule of Reserve for Encumbrances - Water/Sewer Operating Fund F-14 Schedule of Due from State F-15 Schedule of Various Reserves F-16 Schedule of Concession Rental Deposits F-17 Schedule of Accrued Interest Payable F-18 Schedule of Fixed Capital F-19 Schedule of Fixed Capital Authorized and Uncompleted F-20 Schedule of Interfund - Water/Sewer Utility Operating Fund F-21 Schedule of Reserve for Excess Proceeds from Bond Anticipation Notes F-22 Schedule of Loans Payable New Jersey Environmental Infrastructure Trust F-23 Schedule of Bond Anticipation Notes F-24 Schedule of Reserve for Debt Service F-25 Schedule of Improvement Authorization F-26 Schedule of Reserve for Encumbrances - Water/Sewer Utility Capital Fund F-27 Schedule of Capital Improvement Fund F-28 Schedule of Reserve for Amortization F-29 Schedule of Reserve for Deferred Amortization F-30 Schedule of Bonds and Notes Authorized But Not Issued F-31 PUBLIC ASSISTANCE TRUST FUND Schedule of Cash G-1 Schedule of Reserve for Public Assistance G-2 Schedule of Prepaid State Aid G-3 GENERAL FIXED ASSET ACCOUNT GROUP Schedule of Investments in General Fixed Assets I-1

COUNTY OF MONMOUTH TABLE OF CONTENTS (Continued) SUPPLEMENTARY DATA Page Comparative Schedule of Tax Rate Information 48 Comparison of Tax Levies and Collection Currently 48 Delinquent Taxes and Tax Title Liens 48 Property Acquired by Tax Title Lien Liquidation 49 Comparison of Water/Sewer Utility Rents Levied 49 Comparative Schedule of Fund Balances 49 Summary of Municipal Debt (Excluding Current and Operating Debt and Type II School Debt) 50 Summary of Statutory Debt Condition - Annual Debt Statement 51 Borrowing Power Under N.J.S.A. 40A:2-6 51 Calculation of Self-Liquidating Purpose - Water/Sewer Utility Per N.J.S.A. 40A:2-45 51 Calculation of Self Liquidating Purpose - Beach Utility Per N.J.S.A. 40A:2-45 52 Officials in Office and Surety Bonds 53 PART II Independent Auditor s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance and New Jersey OMB Circular 15-08 1-3 Schedule of Expenditures of Federal Awards 4 Notes to the Schedule of Expenditures of Federal Awards 5 Schedule of Findings and Questioned Costs 6-8 Summary Schedule of Prior Audit Findings 9 PART III General Comments 1-2 PART IV Schedule of Findings and Recommendations 1-6

COUNTY OF MONMOUTH PART I REPORT OF AUDIT OF FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA FOR THE YEAR ENDED DECEMBER 31, 2017

To the Honorable Mayor and Members of the Borough Committee Borough of Belmar County of Monmouth Neptune, New Jersey INDEPENDENT AUDITOR S REPORT We have audited the accompanying balance sheets-regulatory basis of the various funds and statements of general fixed asset account group of the Borough of Belmar, New Jersey (the Borough ), as of December 31, 2017, and the related statement of operations and changes in fund balance-regulatory basis, statements of revenues-regulatory basis and statements of expenditures-regulatory basis for the year then ended and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the financial reporting provisions of the Division of Local Government Services, Department of Community Affairs, State of New Jersey; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and the audit requirements prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 1

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles As described in Note 1, the financial statements are prepared by the Borough on the basis of the financial reporting provisions of the Division of Local Government Services, Department of Community Affairs, State of New Jersey, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to comply with the requirements of the Division of Local Government Services, Department of Community Affairs, State of New Jersey. The effects on the financial statements of the variances between the regulatory basis of accounting described in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. Adverse Opinion on U.S. Generally Accepted Accounting Principles In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Borough as of December 31, 2017 and 2016, or the results of its operations and the changes in fund balance for the year then ended. Unmodified Opinion on Regulatory Basis of Accounting In our opinion, the financial statements - regulatory basis referred to above present fairly, in all material respects, the financial position regulatory basis of the various funds and fixed asset account group of the Borough of Belmar as of December 31, 2017 and 2016, and the results of its operations and changes in its fund balance of the individual funds for the years then ended and the revenues regulatory basis and expenditures regulatory basis of the various funds for the year ended December 31, 2017, in accordance with accounting principles and practices prescribe by the Division of Local Government Services, Department of Community Affairs, State of New Jersey as described in Note 1 to the financial statements. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that schedule of pension contributions and schedule of net pension liability be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the 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 financial statements, and other knowledge we obtained during our audit of the 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. 2

Other Information Our audit was conducted for the purpose of forming opinions on the financial statements of the Borough that collectively comprise the Borough s financial statements. The accompanying financial information listed as supplementary exhibits and supplementary data in the table of contents are presented for purposes of additional analysis as required by the Division of Local Government Services, Department of Community Affairs, State of New Jersey and are not a required part of the financial statements. The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements for Federal Awards (Uniform Guidance) and by New Jersey OMB s Circular 15-08, Single Audit Policy for the Recipients of Federal Grants, State Grants and State Aid, is also presented for the purpose of additional analysis and is not a required part of the basic financial statements. The accompanying financial information listed as supplementary exhibits and supplementary schedules in the table of contents 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 financial statements. Such 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 supplementary exhibits and supplementary data are fairly stated, in all material respects, in relation to the 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 December 10, 2018 on our consideration of the Borough 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 effectiveness of the Borough s 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 Borough s internal control over financial reporting and compliance. Charles J. Fallon CPA RMA Charles J. Fallon Certified Public Accountant Registered Municipal Accountant #506 Hazlet, New Jersey December 10, 2018 FALLON & COMPANY LLP 3

INDEPENDENT AUDITOR S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the Borough Council Borough of Belmar County of Ocean Belmar Borough, New Jersey We have audited, in accordance with the auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, and the audit requirements prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey, the regulatory financial statements of the Borough of Belmar, of the State of New Jersey ( Borough ), as of and for the year ended December 31, 2017, and the related notes to the financial statements, which collectively comprise the Borough s financial statements and have issued our report thereon dated December 10, 2018. We expressed an adverse opinion on the conformity of the statements with accounting principles generally accepted in the United States of America. As described in Note 2, the financial statements are prepared by the Borough on the basis of the financial reporting provisions of the Division of Local Government Services, Department of Community Affairs, State of New Jersey, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Borough s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Borough s internal control. Accordingly, we do not express an opinion on the effectiveness of the Borough s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 4

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did identify certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs that we consider to be a material weakness. (2017-001) Compliance and Other Matters As part of obtaining reasonable assurance about whether the Borough s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we have reported to management of the Borough in the Schedule of Findings and Recommendations section of this report. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards and the audit requirements as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey, in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Charles J. Fallon CPA RMA Charles J. Fallon Certified Public Accountant Registered Municipal Accountant #506 FALLON & COMPANY LLP Hazlet, New Jersey December 10, 2018 5

Exhibit A CURRENT FUND COMPARATIVE BALANCE SHEETS - REGULATORY BASIS As of December 31, Assets Ref. 2017 2016 Liabilities, Reserves and Fund Balance Ref. 2017 2016 Cash and Cash Equivalents A-4 $ 4,922,861.75 $ 2,711,174.74 Appropriation Reserves A-3, A-14 $ 773,860.09 $ 661,337.29 Change Funds A-1, A-4 950.00 880.00 Due to State of New Jersey - Senior Citizens' Investment in General Capital Fund Notes A-9 1,200,000.00 1,375,000.00 and Veterans' Deductions A-5 250.00 250.00 Reserve for Encumbrances A-15 206,918.97 230,937.60 6,123,811.75 4,087,054.74 Interfunds Payable A-11 6,121.21 600.00 Prepaid Taxes A-16 1,982,135.32 275,135.38 Tax Overpayments A-17 575.00 Taxes Receivable A-6 406,966.63 389,906.23 County Taxes Payable A-18 7,485.07 53,501.99 Tax Title Liens Receivable A-7 7,641.51 26,821.81 Due to County for PILOT A-19 14,059.54 Revenue Accounts Receivable A-8 35,142.94 42,568.31 Local District School Tax Payable A-20 0.48 0.48 Payment in Lieu of Taxes A-10 9,273.48 Prepaid Licenses and Fees A-21 222,882.03 50,701.83 Interfunds Receivable A-11 135,993.17 145,601.01 Various Reserves A-22 605,073.79 736,729.86 Accounts Payable A-23 79,939.17 97,778.26 595,017.73 604,897.36 Due to State of New Jersey - Various Payables A-24 3,872.00 3,762.00 Due to Monmouth County - RCA Program A-25 240,635.51 240,635.51 Deferred Charges: 4,143,808.18 2,351,370.20 Emergency Appropriation A-12 168,000.00 210,000.00 Reserve for Receivables and Other Assets A 595,017.73 604,897.36 168,000.00 210,000.00 Fund Balance A-1 2,148,003.57 1,945,684.54 Total Operating Fund 6,886,829.48 4,901,952.10 6,886,829.48 4,901,952.10 Grant Fund: Due to Current Fund A-11 134,049.81 115,705.44 Reserve for Grant Expenditures - Grant Fund: Appropriated A-26 342,334.01 357,904.16 State and Federal Grants Receivable A-13 496,000.00 496,200.00 Reserve for Grants - Unappropriated A-27 19,616.18 22,590.40 496,000.00 496,200.00 496,000.00 496,200.00 Total Assets $ 7,382,829.48 $ 5,398,152.10 Total Liabilities, Reserves and Fund Balance $ 7,382,829.48 $ 5,398,152.10 The accompanying notes are an integral part of this statement.

Exhibit A-1 Sheet 1 of 2 CURRENT FUND COMPARATIVE STATEMENTS OF OPERATIONS AND CHANGES IN FUND BALANCE -REGULATORY BASIS For the Years Ended December 31, Ref. 2017 2016 Revenue and Other Income Realized: Fund Balance Utilized A-2 $ 1,300,000.00 $ 1,297,816.12 Miscellaneous Revenue Anticipated A-2 6,694,811.61 6,111,181.14 Receipts From Delinquent Taxes A-2 395,917.82 713,242.94 Receipts From Current Taxes A-2 20,068,412.99 20,049,165.79 Non-Budget Revenues A-2 384,613.12 384,689.65 Other Credits To Income: Unexpended Balance of Appropriation Reserves A-14 439,808.40 553,804.35 Prior Year Interfunds A-11 145,601.01 Statutory Excess - Animal Control A-11 1,943.36 Cancellation of Various Reserves A-22 100.00 Cancellation of Marine Basin Sales Tax Payable A-24 2.24 Total Revenues 29,429,164.95 29,111,945.59 Expenditures: Budget Appropriations Within "CAPS" Operations: Salaries and Wages A-3 4,870,200.00 4,596,429.83 Other Expenses A-3 6,548,400.00 6,149,620.00 Deferred Charges and Statutory Expenditures A-3 937,838.74 895,159.13 Budget Appropriations Outside "CAPS" Salaries and Wages A-3 310,000.00 304,000.00 Other Expenses A-3 557,139.44 1,073,985.97 Capital Improvements A-3 100,000.00 Debt Service A-3 1,040,417.15 1,026,250.38 Deferred Charges A-3 182,617.08 257,104.26 14,546,612.41 14,302,549.57 The accompanying notes are an integral part of this statement.

Exhibit A-1 Sheet 2 of 2 CURRENT FUND COMPARATIVE STATEMENTS OF OPERATIONS AND CHANGES IN FUND BALANCE -REGULATORY BASIS For the Years Ended December 31, Ref. 2017 2016 Prior Year Senior Citizens' Disallowed A-5 1,500.00 2,500.00 Interfunds Advanced A-11 135,993.17 131,475.44 Prior Year Payroll Liabilities A-11 8,200.14 10,203.06 County Taxes A-18 4,368,656.13 4,333,925.58 County Share of Added Taxes A-18 7,485.07 53,501.99 Local District School Tax A-20 8,730,959.00 8,518,434.00 Special Improvement District Levy A-28 127,300.00 127,300.00 Adjustment to Change Fund A 140.00 Total Expenditures 27,926,845.92 27,479,889.64 Excess/(Deficit) in Revenue 1,502,319.03 1,632,055.95 Add: Expenditures Included Above Which are by Statute Deferred Charges to Budgets of Succeeding Year: Special Emergency Authorization 210,000.00 Statutory Excess to Fund Balance 1,502,319.03 1,842,055.95 Fund Balance, January 1 A 1,945,684.54 1,401,444.71 3,448,003.57 3,243,500.66 Decreased By: Utilized as Anticipated Revenue A-2 1,300,000.00 1,297,816.12 Fund Balance, December 31 A $ 2,148,003.57 $ 1,945,684.54 The accompanying notes are an integral part of this statement.

Exhibit A-2 Sheet 1 of 4 CURRENT FUND STATEMENT OF REVENUES - REGULATORY BASIS For the Year ended December 31, 2017 Special N.J.S.A. Amount Excess/ Ref. Budget 40A:4-87 Realized (Deficit) Surplus Anticipated A-1 $ 1,300,000.00 $ 1,300,000.00 $ - Miscellaneous Revenues: Licenses: Alcoholic Beverages A-8 21,000.00 25,000.00 4,000.00 Other A-8 42,500.00 75,550.33 33,050.33 Fees and Permits A-8 228,200.00 274,482.48 46,282.48 Fines and Costs: Municipal Court A-8 975,000.00 1,116,748.01 141,748.01 Interest and Cost on Taxes A-8 75,000.00 87,757.14 12,757.14 Concession Rentals A-8 250,000.00 237,006.86 (12,993.14) Marine Basin Slip Rentals A-8 1,020,000.00 1,099,310.60 79,310.60 Gasoline and Fuel Oil For Resale at Marine Basin A-8 900,000.00 984,884.10 84,884.10 Uniform Fire Safety Code 40A:4-45.3g A-8 75,000.00 86,239.00 11,239.00 Uniform Construction Code Fees 75,000.00 129,756.00 54,756.00 Energy Receipts Tax (P.L. 1997. Chapters 162 &167) A-8 423,499.00 423,499.00 - Shared Services Agreement - Borough of Lake Como: Code Enforcement A-8 10,147.00 10,147.00 - Municipal Court A-8 87,994.00 87,994.00 - Shared Services Agreement - Borough of Spring Lake: Finance Officer A-8 33,616.00 33,616.00 - Tax Collector A-8 13,801.00 13,801.00 - Municipal Court A-8 55,204.00 57,340.13 2,136.13 Shared Services Agreement - Borough of Spring Lake Heights: Police Dispatch Services A-8 109,238.00 109,238.00 The accompanying notes are an integral part of this statement.

Exhibit A-2 Sheet 2 of 4 CURRENT FUND STATEMENT OF REVENUES - REGULATORY BASIS For the Year ended December 31, 2017 Special N.J.S.A. Amount Excess/ Ref. Budget 40A:4-87 Realized (Deficit) Uniform Fire Safety Code - LHIF A-8 10,000.00 9,023.54 (976.46) Payment in Lieu of Taxes - Housing Authority A-8 115,000.00 122,083.15 7,083.15 Rental of Buildings A-8 43,500.00 43,500.00 - General Capital Fund Balance A-8 67,047.75 67,047.75 - Reserve for Insurance Proceeds A-8 85,000.00 85,000.00 - Reserve for Recreation Facilities A-8 50,000.00 50,000.00 Reserve for Library Expenditures A-8 175,000.00 175,000.00 - Reserve for Debt Service A-8 137,507.15 137,507.15 - Proceeds from Police Services Contract A-8 1,100,000.00 1,122,689.97 22,689.97 Clean Communities Program A-11 20,326.03 20,326.03 - Body Armor Replacement A-11 2,264.37 2,264.37 - Cops in Shops - LC A-11 6,000.00 6,000.00 - Cops in Shops - Belmar A-11 2,000.00 2,000.00 - Total Miscellaneous Revenues A-1/A-2 6,200,844.30 8,000.00 6,694,811.61 485,967.31 Receipts From Delinquent Taxes A-1/A-2 300,000.00-395,917.82 95,917.82 Amount To Be Raised By Taxes for Support of Municipal Budget A-2/A-6 7,200,126.70 7,296,026.14 95,899.44 Budget Totals 15,000,971.00 8,000.00 15,686,755.57 677,784.57 Non-Budget Revenues A-1/A-2 384,613.12 384,613.12 The accompanying notes are an integral part of this statement.

Exhibit A-2 Sheet 3 of 4 CURRENT FUND STATEMENT OF REVENUES - REGULATORY BASIS For the Year ended December 31, 2017 Special N.J.S.A. Amount Excess/ Ref. Budget 40A:4-87 Realized (Deficit) $ 15,000,971.00 $ 8,000.00 $ 16,071,368.69 $ 1,062,397.69 Ref. A-3 A-3 Analysis of Miscellaneous Revenue: Revenue Accounts Receivable A-8 $ 6,664,221.21 Grants Receivable A-11 30,590.40 A-2 $ 6,694,811.61 Analysis of Realized Tax Revenue: Allocation of Current Tax Revenues: Allocation of Current Tax Collections: Revenue From Collections A-1/A-6 $ 20,068,412.99 Allocated To School, County and Special District Taxes A-6 13,234,400.20 Balance for Support of Municipal Appropriations 6,834,012.79 Increased By: Appropriation Reserve for Uncollected Taxes A-3 462,013.35 Amount for Support of Municipal Budget Appropriations A-2 $ 7,296,026.14 Receipts from Delinquent Taxes: Delinquent Tax Collections A-6 $ 373,510.51 Tax Title Lien Collections A-7 22,407.31 A-2 $ 395,917.82 The accompanying notes are an integral part of this statement.

Exhibit A-2 Sheet 4 of 4 CURRENT FUND STATEMENT OF REVENUES - REGULATORY BASIS For the Year ended December 31, 2017 Analysis of Non-Budget Revenues Ref. Administrative Fee - Seniors and Veterans $ 735.00 Marine Basin Ramp Fees 51,454.00 Marina Receipts - Miscellaneous 7,610.98 Interest on Investments 21,855.25 Police Reports 12,378.45 Copies Ordinance 97.35 Recreation Fees 100,036.83 Returned Check Fee 245.00 Miscellaneous 77,174.26 Special Events 22,319.00 Summer Basketball 1,860.00 Use of Public Buildings 78,005.00 Proceeds from Sale of Assets 7,675.00 Marriage Licenses 154.00 Certified Copies 3,013.00 A-2/A-4 $ 384,613.12 The accompanying notes are an integral part of this statement.

Exhibit A-3 Sheet 1 of 8 CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS For the Year ended December 31, 2017 Operations - Within "CAPS" Original Balance After Paid or Budget Modification Charged Reserved Cancelled GENERAL GOVERNMENT Administrative and Executive: Salaries and Wages $ 87,500.00 $ 87,500.00 $ 82,932.98 $ 4,567.02 Other Expenses 1,000.00 1,000.00 960.67 39.33 Personnel Office: Salaries and Wages 63,000.00 63,000.00 61,772.95 1,227.05 Other Expenses 500.00 500.00 486.57 13.43 Mayor and Council: Salaries and Wages 18,800.00 18,800.00 18,800.00 - Municipal Clerk: Salaries and Wages 65,000.00 65,000.00 62,535.67 2,464.33 Other Expenses 64,500.00 64,500.00 61,137.60 3,362.40 Financial Administration: Salaries and Wages 62,384.00 62,384.00 62,174.80 209.20 Other Expenses 43,500.00 43,500.00 40,648.02 2,851.98 Audit Services: Other Expenses 31,000.00 31,000.00 2,200.00 28,800.00 Collection of Taxes: Salaries and Wages 16,199.00 16,199.00 13,895.16 2,303.84 Other Expenses 4,250.00 4,250.00 4,117.13 132.87 Liquidation of Tax Title Liens and Foreclosed Property: Other Expenses 500.00 500.00 500.00 Assessment of Taxes: Salaries and Wages 21,000.00 21,000.00 20,431.58 568.42 Other Expenses 6,750.00 6,750.00 5,885.94 864.06 Legal Services and Costs: Salaries and Wages 500.00 500.00 500.00 Other Expenses 216,000.00 416,000.00 397,161.77 18,838.23 Engineering Services: - Other Expenses 50,000.00 85,000.00 78,645.00 6,355.00 The accompanying notes are an integral part of this statement.

Exhibit A-3 Sheet 2 of 8 CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS For the Year ended December 31, 2017 Original Balance After Paid or Budget Modification Charged Reserved Cancelled LAND USE ADMINISTRATION Planning Board (Municipal Land Use Law NJSA 40:55D-1): Salaries and Wages 3,000.00 3,000.00 3,000.00 - Other Expenses 42,500.00 42,500.00 42,484.46 15.54 CODE ENFORCEMENT AND ADMINISTRATION Housing Inspections: Salaries and Wages 49,853.00 44,853.00 40,481.95 4,371.05 Other Expenses 2,500.00 2,500.00 2,089.55 410.45 INSURANCE Liability Insurance 260,000.00 250,000.00 249,583.23 416.77 Worker Compensation Insurance 241,000.00 241,000.00 240,447.52 552.48 Group Insurance for Employees 2,163,000.00 2,163,000.00 2,009,306.60 153,693.40 PUBLIC SAFETY Police Department: Salaries and Wages 2,846,700.00 2,846,700.00 2,793,086.07 53,613.93 Other Expenses 201,000.00 201,000.00 183,796.27 17,203.73 Purchase of Police Vehicles 11,000.00 11,000.00 10,027.37 972.63 Police Radio and Communications: Salaries and Wages 148,762.00 148,762.00 143,090.76 5,671.24 Other Expenses 73,000.00 73,000.00 68,344.67 4,655.33 First Aid Organization: Other Expenses 33,800.00 33,800.00 33,000.00 800.00 Fire: Salaries and Wages 9,000.00 9,000.00 1,950.00 7,050.00 Other Expenses 63,500.00 63,500.00 51,268.27 12,231.73 Uniform Fire Safety Code (40A:4-45.3g): Salaries and Wages 63,000.00 53,000.00 48,201.30 4,798.70 Other Expenses 12,500.00 12,500.00 12,388.32 111.68 The accompanying notes are an integral part of this statement.

Exhibit A-3 Sheet 3 of 8 CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS For the Year ended December 31, 2017 Original Balance After Paid or Budget Modification Charged Reserved Cancelled Municipal Prosecutor's Office: Salaries and Wages 35,000.00 35,000.00 34,770.06 229.94 Municipal Court: Salaries and Wages 92,102.00 82,102.00 71,187.71 10,914.29 Other Expenses 117,500.00 117,500.00 92,162.36 25,337.64 Public Defender (P.L. 1997, C.256) Salaries and Wages 5,000.00 5,000.00 5,000.00 PUBLIC WORKS Road Repairs and Maintenance: Salaries and Wages 385,000.00 345,000.00 323,056.44 21,943.56 Other Expenses 88,500.00 88,500.00 73,209.11 15,290.89 Snow Removal: Salaries and Wages 40,000.00 10,000.00 10,000.00 Other Expenses 55,000.00 55,000.00 49,400.64 5,599.36 Shade Tree Committee: Other Expenses 3,000.00 3,000.00 2,790.00 210.00 Garbage and Trash Removal: Salaries and Wages 15,000.00 15,000.00 14,538.97 461.03 Other Expenses 238,000.00 238,000.00 236,389.89 1,610.11 Recycling (P.L. 1987 Ch. 74) Salaries and Wages 19,000.00 19,000.00 18,926.38 73.62 Other Expenses 79,500.00 79,500.00 79,286.56 213.44 Public Buildings and Grounds: Salaries and Wages 96,500.00 96,500.00 89,991.40 6,508.60 Other Expenses 58,000.00 73,000.00 72,128.24 871.76 Equipment Repair and Maintenance: Salaries and Wages 74,000.00 74,000.00 71,183.74 2,816.26 Other Expenses 107,500.00 107,500.00 103,561.24 3,938.76 HEALTH AND HUMAN SERVICES Environmental Commission: Other Expenses 2,000.00 2,000.00 2,000.00 - The accompanying notes are an integral part of this statement.

Exhibit A-3 Sheet 4 of 8 CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS For the Year ended December 31, 2017 Original Balance After Paid or Budget Modification Charged Reserved Cancelled Dog Regulations: Other Expenses 17,600.00 17,600.00 17,600.00 - PARKS AND RECREATION Recreation: Salaries and Wages 89,000.00 89,000.00 84,458.01 4,541.99 Other Expenses 60,000.00 50,000.00 40,806.22 9,193.78 Senior Citizen's Program Salaries and Wages 10,000.00 10,000.00 9,745.65 254.35 Other Expenses 20,000.00 20,000.00 19,843.03 156.97 Harbor Commission Salaries and Wages 308,000.00 308,000.00 307,509.38 490.62 Other Expenses 113,000.00 118,000.00 117,583.35 416.65 Parks and Playgrounds: Salaries and Wages 259,000.00 259,000.00 256,834.75 2,165.25 Other Expenses 55,000.00 55,000.00 52,842.80 2,157.20 Historical Commission Other Expenses 2,000.00 2,000.00 691.35 1,308.65 UNCLASSIFIED Hurricane Sandy Expenditures Celebration of Public Events: Other Expenses 6,000.00 11,000.00 10,184.63 815.37 Gasoline and Diesel Fuel for Resale: Other Expenses 1,006,000.00 986,000.00 934,768.03 51,231.97 Uniform Construction Code (N.J.A.C. 5:23-4.17) Construction Code Department Salaries and Wages 82,900.00 82,900.00 82,792.40 107.60 Other Expenses 7,000.00 7,000.00 4,517.00 2,483.00 The accompanying notes are an integral part of this statement.

Exhibit A-3 Sheet 5 of 8 CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS For the Year ended December 31, 2017 Original Balance After Paid or Budget Modification Charged Reserved Cancelled UTILITY EXPENSES AND BULK PURCHASES Electricity 175,000.00 165,000.00 149,536.26 15,463.74 Street Lighting 115,000.00 95,000.00 89,584.53 5,415.47 Telephone 100,000.00 85,000.00 79,862.84 5,137.16 Natural Gas 75,000.00 75,000.00 62,396.34 12,603.66 LANDFILL/SOLID WASTE DISPOSAL COSTS Landfill/Solid Waste Disposal Costs Sanitary Landfill 430,000.00 350,000.00 273,016.69 76,983.31 Total Operations - Within "CAPS" 11,417,600.00 11,417,600.00 10,775,488.18 642,111.82 - Contingent 1,000.00 1,000.00-1,000.00 Total Operations Including Contingent - Within "CAPS" 11,418,600.00 11,418,600.00 10,775,488.18 643,111.82 - Detail: Salaries and Wages 4,965,200.00 4,870,200.00 4,717,348.11 152,851.89 - Other Expenses 6,453,400.00 6,548,400.00 6,058,140.07 490,259.93 - STATUTORY EXPENDITURES Contribution To: Public Employees Retirement System 238,842.40 238,842.40 238,842.40 - Social Security System (O.A.S.I.) 240,000.00 240,000.00 215,759.10 24,240.90 Consolidated Police and Firemen's Pension Fund 6,000.00 6,000.00 5,533.87 466.13 Police and Firemen's Retirement System of NJ 452,996.34 452,996.34 452,996.34 - Total Deferred Charges and Statutory Expenditures - Municipal - Within "CAPS" 937,838.74 937,838.74 913,131.71 24,707.03 - Total General Appropriations for Municipal Purposes - Within "CAPS" 12,356,438.74 12,356,438.74 11,688,619.89 667,818.85 - The accompanying notes are an integral part of this statement.

Exhibit A-3 Sheet 6 of 8 CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS For the Year ended December 31, 2017 Original Balance After Paid or Budget Modification Charged Reserved Cancelled Free Public Library: Other Expenses 521,549.04 521,549.04 420,507.80 101,041.24 Total Operations - Excluded From "CAPS" 521,549.04 521,549.04 420,507.80 101,041.24 - Shared Service Agreements: Borough of Lake Como: Salaries and Wages Municipal Court 87,994.00 87,994.00 87,994.00 - Code Enforcement 10,147.00 10,147.00 10,147.00 - Borough of Spring Lake: Salaries and Wages Finance Office 33,616.00 33,616.00 33,616.00 - Tax Collector 13,801.00 13,801.00 13,801.00 - Municipal Court 55,204.00 55,204.00 55,204.00 - Borough of Spring Lake Heights: Salaries and Wages Police Dispatch Services 109,238.00 109,238.00 109,238.00 - Total Shared Service Agreements 310,000.00 310,000.00 310,000.00 - - PUBLIC AND PRIVATE PROGRAMS OFFSET BY REVENUES State of New Jersey - Clean Communities Program Other Expenses 20,326.03 20,326.03 20,326.03 - Body Armor Replacement Grant 2,264.37 2,264.37 2,264.37 - Cops in Shops 8,000.00 8,000.00 - Matching Funds for Grants 5,000.00 5,000.00 5,000.00 Total Public and Private Programs Offset By Revenues 27,590.40 35,590.40 30,590.40 5,000.00 - Total Operations - Excluded From "CAPS" 859,139.44 867,139.44 761,098.20 106,041.24 - The accompanying notes are an integral part of this statement.

Exhibit A-3 Sheet 7 of 8 CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS For the Year ended December 31, 2017 Original Balance After Paid or Budget Modification Charged Reserved Cancelled Detail: Salaries and Wages 310,000.00 310,000.00 310,000.00 - - Other Expenses 549,139.44 557,139.44 451,098.20 106,041.24 - CAPITAL IMPROVEMENTS EXCLUDED FROM CAPS Capital Improvement Fund 100,000.00 100,000.00 100,000.00 - Total Capital Improvements - Excluded From "CAPS" 100,000.00 100,000.00 100,000.00 - - MUNICIPAL DEBT SERVICE EXCLUDED FROM CAPS Payment of Bond Principal 510,000.00 510,000.00 510,000.00 - Payment of Bond Anticipation Notes 215,000.00 215,000.00 215,000.00 - Interest on Bonds 194,456.26 194,456.26 194,454.18-2.08 Interest on Notes 115,545.98 115,545.98 115,454.98-91.00 Green Acres Trust Loan Program: Loan Repayments for Principal and Interest 5,760.15 5,760.15 5,507.99 252.16 - Total Municipal Debt Service - Excluded From "CAPS" 1,040,762.39 1,040,762.39 1,040,417.15-345.24 DEFERRED CHARGES EXCLUDED FROM CAPS Deferred Charges to Future Taxation Unfunded: Bond Ordinance 2004-4 - Marina Improvements 140,617.08 140,617.08 140,617.08-5 Year Emergency Authorizations 42,000.00 42,000.00 42,000.00 - Total Deferred Charges - Excluded From "CAPS" 182,617.08 182,617.08 182,617.08 - - The accompanying notes are an integral part of this statement.

Exhibit A-3 Sheet 8 of 8 CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS For the Year ended December 31, 2017 Original Balance After Paid or Budget Modification Charged Reserved Cancelled Total General Appropriations for Municipal Purposes - Excluded From "CAPS" 2,182,518.91 2,190,518.91 2,084,132.43 106,041.24 345.24 - Subtotal General Appropriations 14,538,957.65 14,546,957.65 13,772,752.32 773,860.09 345.24 Reserve for Uncollected Taxes 462,013.35 462,013.35 462,013.35 - Total General Appropriations $ 15,000,971.00 $ 15,008,971.00 $ 14,234,765.67 $ 773,860.09 345.24 Ref. A-1 A/A-1 Budget as Adopted A-2 $ 15,000,971.00 Added By N.J.S. 40A:4-87 A-2 8,000.00 $ 15,008,971.00 Analysis of Paid or Charged Cash Disbursements A-4 $ 13,493,242.95 Reserve for: Uncollected Taxes A-2 462,013.35 Appropriation for Special Emergency A-12 42,000.00 Encumbrances A-15 206,918.97 Grant Expenditures - Appropriated A-26 30,590.40 $ 14,234,765.67 The accompanying notes are an integral part of this statement.

Exhibit B Sheet 1 of 2 TRUST FUND COMPARATIVE BALANCE SHEET - REGULATORY BASIS As of December 31, Ref. 2017 2016 Assets Animal Control Trust Fund: Cash B-2 $ 4,090.88 $ 7,562.35 Tourism Trust Fund: Cash B-2 88,097.14 89,857.60 Trust Other Fund: Cash B-2 689,364.75 878,635.80 Police Outside Duty Receivable B-4 26,321.71 54,738.45 Interfunds B-5 600.00 850.00 Deferred Charge: Overexpenditure of Trust Reserve B-14 660.00 716,946.46 934,224.25 Trust Assessment Fund: Cash B-2 59.19 82.87 Prospective Assessment - Unfunded B-3 446,500.00 446,500.00 446,559.19 446,582.87 Total Assets $ 1,255,693.67 $ 1,478,227.07 The accompanying notes are an integral part of this statement.

Exhibit B Sheet 2 of 2 TRUST FUND COMPARATIVE BALANCE SHEET - REGULATORY BASIS As of December 31, Liabilities, Reserves and Fund Balance Ref. 2017 2016 Animal Control Trust Fund: Prepaid Fees B-6 $ 36.00 $ 48.00 Due To State of New Jersey B-7 7.40 6.20 Due To Current Fund B-8 1,943.36 1,943.36 Reserves for Encumbrances B-9 150.00 2,928.00 Reserve for Animal Control Trust Fund Expenditures B-9 1,954.12 2,636.79 4,090.88 7,562.35 Tourism Trust Fund: Reserve for Encumbrances B-10 8,148.94 7,901.19 Reserve for Tourism B-10 79,948.20 81,956.41 88,097.14 89,857.60 Trust Other Fund: Reserve for Encumbrances B-11 23,632.90 14,740.01 Interfunds B-5 400.00 Various Reserves B-11 692,293.10 918,863.78 Fund Balance B 620.46 620.46 716,946.46 934,224.25 Trust Assessment Fund: Reserve for Prospective Assessment - Unfunded B-12 446,500.00 446,500.00 Fund Balance B-1 59.19 82.87 446,559.19 446,582.87 Total Liabilities and Reserves $ 1,255,693.67 $ 1,478,227.07 The accompanying notes are an integral part of this statement.

Exhibit B-1 TRUST ASSESSMENT FUND STATEMENT OF FUND BALANCE - TRUST ASSESSMENT FUND REGULATORY BASIS For the Year Ended December 31, 2017 Ref. Balance, December 31, 2016 B $ 82.87 Increased by: Interest B-2 0.12 82.99 Decreased by: Service Charge B-2 23.80 Balance, December 31, 2017 B $ 59.19 The accompanying notes are an integral part of this statement.

Exhibit C GENERAL CAPITAL FUND COMPARATIVE BALANCE SHEETS - REGULATORY BASIS As December 31, Ref. 2017 2016 ASSETS Cash C-2 $ 110,221.39 $ 6,868.10 Grants Receivable C-6 5,945,475.17 6,894,302.02 Prospective Assessments Raised by Taxation C-7 50,000.00 25,000.00 Deferred Charges To Future Taxation: Funded C-4 5,448,470.27 5,963,978.26 Unfunded C-5 14,668,110.42 13,598,727.50 $ 26,222,277.25 $ 26,488,875.88 LIABILITIES, RESERVES, AND FUND BALANCE General Serial Bonds C-8 $ 5,440,000.00 $ 5,950,000.00 Green Trust Loans C-9 8,470.27 13,978.26 Bond Anticipation Notes C-10 13,510,000.00 11,580,000.00 Interfund-Current Fund C-11 24,029.72 Interfund - Water/Sewer Utility Capital Fund C-2 50,000.00 Improvement Authorizations: Funded C-12 1,422,617.64 5,956,145.48 Unfunded C-12 1,568,778.87 1,133,037.92 Reserve for Encumbrances C-13 3,714,357.22 1,410,328.45 Various Reserves C-14 240,790.00 328,297.15 Capital Improvement Fund C-15 26,011.15 1,011.15 Reserve for Prospective Assessments Raised by Taxation C-7 50,000.00 25,000.00 Fund Balance C-1 191,252.10 67,047.75 $ 26,222,277.25 $ 26,488,875.88 There were bonds and notes authorized but not issued on December 31, 2017 of $870,087.80 (Exhibit C-16) The accompanying notes are an integral part of this statement.

Exhibit C-1 GENERAL CAPITAL FUND STATEMENT OF CHANGES IN FUND BALANCE - REGULATORY BASIS Year ended December 31, 2017 Ref. Balance, December 31, 2016 C $ 67,047.75 Increased By: Premium on Note Sale C-2 191,252.10 258,299.85 Decreased By: Anticipated Revenue in Current Fund C-2 67,047.75 Balance, December 31, 2017 C $ 191,252.10 The accompanying notes are an integral part of this statement.

Exhibit D Liabilities, Reserves and Fund Balances BEACH UTILITY FUND COMPARATIVE BALANCE SHEETS - REGULATORY BASIS As of December 31, Ref. 2017 2016 Operating Fund: Liabilities: Appropriation Reserves D-4/D-8 $ 367,229.02 $ 480,748.32 Interfund - Current Fund D-7 1,243.56 Reserve for Encumbrances D-9 36,773.32 92,051.32 Prepaid Revenue D-11 69,765.00 107,253.50 Accrued Interest Payable D-12 197,333.33 106,333.33 Reserve for: Debt Payments - Flood Insurance Proceeds Debt Payments - Insurance Proceeds Debt Payments - FEMA Proceeds D-13 484,000.00 484,000.00 D-13 2,288,858.35 2,288,858.35 D-13 523,786.28 464,598.58 Debt Payments - Buy -a -Board Funds D-13 704,418.03 704,418.03 4,672,163.33 4,729,504.99 Fund Balance D-1 1,914,591.00 2,237,409.90 Total Operating Fund 6,586,754.33 6,966,914.89 Capital Fund: Bond Anticipation Notes D-17 7,400,000.00 6,000,000.00 Interfund - Beach Utility Operating Fund D-16 1,101,999.49 Improvement Authorizations: Unfunded D-18 70,139.82 202,464.53 Reserve for Encumbrances D-19 268,445.79 699,584.39 Capital Improvement Fund D-20 706,000.00 706,000.00 Reserve for Amortization D-21 862,931.35 798,050.77 Reserve for Deferred Amortization D-22 13,598,111.78 13,098,111.78 Fund Balance D-2 367,894.85 242,760.85 Total Capital Fund 23,273,523.59 22,848,971.81 Total Liabilities, Reserves and Fund Balances $ 29,860,277.92 $ 29,815,886.70 There were bonds and notes authorized but not issued on December 31, 2017 of $1,001,888.22 (Exhibit D-23) The accompanying notes are an integral part of this statement.

Exhibit D-1 BEACH UTILITY OPERATING FUND COMPARATIVE STATEMENTS OF OPERATIONS AND CHANGES IN FUND BALANCE REGULATORY BASIS Year ended December 31, Ref. 2017 2016 Revenue and Other Income Realized: Fund Balance Utilized D-3 $ 2,147,113.50 $ 1,944,041.70 Bathing Fees D-3 2,979,746.56 3,355,703.00 Concession Rents D-3 46,653.20 56,252.71 Parking Meter Fees D-3 200,000.00 234,046.00 Reserve for Debt Payments/FEMA Proceeds D-3 464,598.58 500,000.00 Miscellaneous Revenue Not Anticipated D-3 156,734.74 167,367.35 Other Credits To Income: Appropriation Reserves Lapsed D-8 466,493.43 275,394.28 Total Revenue 6,461,340.01 6,532,805.04 Expenditures: Operating D-4 3,406,000.00 3,502,500.00 Capital Improvements D-4 150,000.00 125,000.00 Debt Service D-4 710,333.33 613,736.11 Statutory Expenditures D-4 370,712.08 401,541.70 Total Expenditures 4,637,045.41 4,642,777.81 Excess/(Deficit) in Revenue 1,824,294.60 1,890,027.23 Fund Balance, January 1 D 2,237,409.90 2,291,424.37 4,061,704.50 4,181,451.60 Fund Balance Utilized D-3 2,147,113.50 1,944,041.70 Fund Balance, December 31 D $ 1,914,591.00 $ 2,237,409.90 The accompanying notes are an integral part of this statement.