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Annual
General-Purpose Financial Statements TOWN
OF EXETER, RHODE ISLAND Fiscal Year Ended June 30, 2002 |
Table of Contents
Page
INDEPENDENT AUDITORS= REPORT..................................................................................................................................... 1
GENERAL-PURPOSE FINANCIAL STATEMENTS
Combined Balance Sheet ‑ All Fund Types, Account
Groups and Component Unit.................................................... 3
Combined Statements of Revenues, Expenditures and
Changes in Fund Balances ‑
All
Governmental Fund Types, Expendable Trust Funds, and Component Unit.................................................. 4
Statement of Revenues and Expenditures - Budget (GAAP
Basis) and Actual - General Fund.................................
5
Combined Statements of Revenues, Expenditures and
Changes in Fund Balances ‑
Nonexpendable Trust Funds.......................................................................................................................................... 6
Combined Statement of Cash Flows - Nonexpendable Trust Funds............................................................................... 7
Notes to Financial Statements................................................................................................................................................ 8
COMBINING STATEMENTS, ACCOUNT GROUPS, AND SUPPLEMENTAL
SCHEDULES
Special Revenue Funds
Combining Balance Sheet...................................................................................................................................................... 21
Combining Statements of Revenues, Expenditures, and
Changes in Fund Balances.................................................. 22
Capital Projects Fund
Combining Balance Sheet...................................................................................................................................................... 23
Combining Statements of Revenues, Expenditures and
Changes in Fund Balances................................................... 24
Fiduciary Trust Funds
Combining Balance Sheet...................................................................................................................................................... 25
Combining Statements of Revenues, Expenditures, and
Changes
in Fund Balances - Expendable Trust Funds.............................................................................................................. 26
Combining Statements of Revenues, Expenditures and
Changes
in Fund Balances -
Nonexpendable Trust Funds..................................................................................................... 27
Schedule of Cash Receipts and Disbursements - Agency Funds................................................................................. 28
Account Group
Statement of General Long-Term Debt - Primary
Government......................................................................................... 29
Schedule of Changes in General Long-Term Debt -
Primary Government..................................................................... 30
Supplemental Schedules
Schedule of Revenues and Expenditures - Budget to
Actual - General Fund............................................................... 31
Schedule of Property Taxes Receivable.............................................................................................................................. 34
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ON
INTERNAL CONTROL
OVER FINANCIAL REPORTING BASED ON AN AUDIT OF
GENERAL-PURPOSE
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS.................................................................................................................... 35
INDEPENDENT AUDITORS' REPORT
The Honorable Members of the Town Council
Exeter, Rhode Island
We have audited the accompanying general-purpose
financial statements of the Town of Exeter, Rhode Island as of and for the year
ended June 30, 2002 as listed in the table of contents. These general-purpose financial statements are
the responsibility of the Town=s management.
Our responsibility is to express an opinion on these general-purpose
financial statements based on our audit.
We did not audit the financial statements of the Exeter-West Greenwich,
Regional School District, which represents the component unit column. Those financial statements were audited by
other auditors whose report has been furnished to us, and our opinion on the
general-purpose financial statements, insofar as it relates to the amounts
included for the component unit column, is based on the report of the other
auditors.
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 general-purpose financial
statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the general-purpose financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall general-purpose financial statement
presentation. We believe that our audit
provides a reasonable basis for our opinion.
The general-purpose financial statements referred to
above do not include financial data of the Exeter Fire Company No. 1, Exeter
Fire Company No. 2, Exeter Emergency Dispatch, nor the Exeter Rescue Corps,
which should be included as additional component units in order to conform with
accounting principles generally accepted in the United States of America. The amounts that should be reported for
these component units have not been determined by management.
Additionally, the general-purpose financial statements
referred to above do not include a general fixed asset account group for the
primary government which should be included in order to conform with accounting
principles generally accepted in the United States of America. The amount that should be recorded in the
general fixed assets account group is not known.
In our opinion, based on our audit and the report of
other auditors, except for the effects on the financial statements by the
omissions described in the preceding paragraphs, the general-purpose financial
statements present fairly, in all material respects, the financial position of
the Town of Exeter, Rhode Island as of June 30, 2002, and the results of its
operations and cash flows of its nonexpendable trust funds for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.
In accordance with Government Auditing Standards,
we have also issued a report dated December 3, 2002 on our consideration of
Town of Exeter's internal control over financial reporting.
Our audit was performed for the purpose of forming an
opinion on the general-purpose financial statements taken as a whole. The information on combining statements,
account groups, and supplemental schedules listed in the table of contents are
presented for purposes of additional analysis and are not a required part of
the general-purpose financial statements.
Such information has been subjected to the auditing procedures applied
in the audit of the general-purpose financial statements and, in our opinion,
except for the effects of the omissions described in the third and fourth paragraphs
above, such information is fairly presented in all material respects in
relation to the general-purpose financial statements taken as a whole.
December 3, 2002
TOWN
OF EXETER, RHODE ISLAND
COMBINED
BALANCE SHEET - ALL FUND TYPES, ACCOUNT GROUPS AND COMPONENT UNIT
June
30, 2002
Fiduciary Account Totals Component Totals Governmental Fund Types Fund
Groups (Memorandum Unit (Memorandum
General Only) Only)
Special Capital Trust Long-term Primary School Reporting
General
Revenue
Projects
and Agency Debt Government District Entity
ASSETS
Cash and cash equivalents $ 1,186,303 $
70,422 $ C $ 107,803 $ C $
1,364,528 $ 540,034 $ 1,904,562
Accounts receivable:
Property taxes 456,619 C C C C 456,619 C 456,619
Tax title property 12,515 C C C C 12,515 C 12,515
Other 39,061 C C C C 39,061 15,487 54,548
Investments
C C C 1,018,518 C 1,018,518 1,456,038 2,474,556
Due from state and other town governments C C C C C C 978,332 978,332
Due from other funds 5,000 396,760 362,137 45,825 C 809,722 352,313 1,162,035
Amount available in the debt service fund C C C C C C 165,287 165,287
Property and equipment C C C C C C 24,846,428 24,846,428
Amount to be provided for the payment of
long-term debt C C C C 1,118,264 1,118,264
12,095,622
13,213,886
TOTAL
ASSETS $
1,699,498 $ 467,182 $ 362,137 $
1,172,146 $ 1,118,264 $ 4,819,227 $ 40,449,541 $ 45,268,768
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable $ 30,157 $ C $ C $ C $ C $ 30,157 $ 2,135,941 $ 2,166,098
Cash overdraft C C C C C C 15,338 15,338
Due to other funds 804,397 5,000 C 325 C 809,722 352,313 1,162,035
Deposits held in custody for others C C C 138,010 C 138,010 83,820 221,830
Accrued compensated absences 46,514 C C C 18,264 64,778 349,185 413,963
Deferred revenue 736,983 C C C C 736,983 C 736,983
Bonds payable C C C C C C 11,940,000 11,940,000
Landfill postclosure care costs C C C C 900,000 900,000 C 900,000
Land acquisition costs C C C C 200,000 200,000 C 200,000
Unamortized bond premium C C C C C C 67,214 67,214
TOTAL
LIABILITIES 1,618,051 5,000 C 138,335 1,118,264 2,879,650 14,943,811 17,823,461
FUND BALANCES
Investment in general fixed assets C C C C C C 24,846,428 24,846,428
Reserved C C C 1,033,811 C 1,033,811 C 1,033,811
Unreserved
Designated 81,447 C 362,137 C C 443,584 C 443,584
Undesignated C 462,182 C C C 462,182 659,302 1,121,484
TOTAL
FUND BALANCES 81,447 462,182 362,137 1,033,811 C 1,939,577 25,505,730 27,445,307
TOTAL
LIABILITIES AND
FUND
BALANCES $ 1,699,498 $ 467,182 $ 362,137 $
1,172,146 $ 1,118,264 $ 4,819,227 $ 40,449,541 $ 45,268,768
See accompanying notes.
TOWN
OF EXETER, RHODE ISLAND
COMBINED
STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES B
ALL
GOVERNMENTAL FUND TYPES, EXPENDABLE TRUST FUNDS, AND COMPONENT UNIT
Year
Ended June 30, 2002
Fiduciary Totals Component Totals Governmental Fund Types Fund (Memorandum Unit (Memorandum
Expendable Only) Only)
Special Capital Trust Primary School Reporting
General
Revenue
Projects
Funds Government District Entity
REVENUES
Property taxes $
7,469,622 $ C $ C $ C $
7,469,622 $ C $ 7,469,622
Assessment to member towns:
Exeter C C C C C 6,550,695 6,550,695
West Greenwich C C C C C 5,809,107 5,809,107
State and federal aid and grants 589,982 271,476 C C 861,458 8,570,831 9,432,289
Departmental revenues 127,135 C C C 127,135 C 127,135
License and permits 134,561 C C C 134,561 C 134,561
Fines and interest on late payments 75,118 C C C 75,118 C 75,118
Interest and other investment income 29,613 C C 27,030 56,643 43,369 100,012
State contribution to pension plan C C C C C 402,040 402,040
Other revenues 35,004 57,442
11,272
2,017 105,735 885,581 991,316
TOTAL
REVENUES 8,461,035 328,918 11,272 29,047 8,830,272 22,261,623 31,091,895
EXPENDITURES
Salaries and wages 637,820 C C C 637,820 C 637,820
Public works 386,074 C C C 386,074 C 386,074
Public safety 578,265 C C C 578,265 C 578,265
Public health and welfare 13,166 C C C 13,166 C 13,166
Community services 34,928 20,010 C C 54,938 C 54,938
General government 482,450 C C C 482,450 C 482,450
Education 6,550,695 C C C 6,550,695 20,477,690 27,028,385
Debt services C C C C C 1,961,369 1,961,369
Other 26,660 395,420 363,676 142,729
928,485 C 928,485
TOTAL
EXPENDITURES
8,710,058 415,430
363,676 142,729
9,631,893 22,439,059
32,070,952
EXCESS
OF REVENUES
OVER
(UNDER) EXPENDITURES (249,023) (86,512) (352,404) (113,682) (801,621) (177,436) (979,057)
OTHER FINANCING SOURCES (USES)
Operating transfers in C 35,000 331,351 C 366,351 42,000 408,351
Operating transfers out (366,351) C C C (366,351) (42,000) (408,351)
EXCESS OF
REVENUES AND OTHER
FINANCING SOURCES OVER (UNDER)
EXPENDITURES AND
OTHER USES (615,374) (51,512) (21,053) (113,682) (801,621) (177,436) (979,057)
Transfers from reserved fund balance C C C C C 18,659 18,659
Fund balances - July 1, 2001 696,821 513,694 383,190 1,004,539
2,598,244 818,079 3,416,323
FUND
BALANCES - JUNE 30, 2002 $ 81,447 $ 462,182 $ 362,137 $ 890,857 $
1,796,623 $ 659,302 $ 2,455,925
See accompanying notes.
TOWN OF EXETER, RHODE ISLAND
STATEMENT OF REVENUES AND EXPENDITURES B
BUDGET (GAAP BASIS) AND ACTUAL - GENERAL FUND
Year Ended June 30, 2002
Favorable
Budget
Actual (Unfavorable)
REVENUES
Property taxes current year $
7,466,130 $ 7,245,828 $ (220,302)
Property taxes prior years C 223,794 223,794
State aid 637,354 589,982 (47,372)
Departmental revenues 93,500 127,135 33,635
Transfer station fees 23,350 31,521 8,171
License and permits 78,000 103,040 25,040
Fines and interest on late payments 55,000 75,118 20,118
Interest and other investment income 80,000 29,613 (50,387)
Nonbudgeted revenue C 35,004
35,004
TOTAL
REVENUES 8,433,334 8,461,035 27,701
EXPENDITURES
Salaries and wages 626,946 637,820 (10,874)
Public works 395,514 386,074 9,440
Public safety 578,265 578,265 C
Public health and welfare 22,809 13,166 9,643
Community services 35,950 34,928 1,022
General government 523,155 482,450 40,705
Education 6,550,695 6,550,695 C
Nonbudgeted expenditures C 26,660 (26,660)
TOTAL
EXPENDITURES 8,733,334
8,710,058 23,276
EXCESS
OF REVENUES
OVER
(UNDER) EXPENDITURES (300,000) (249,023) 50,977
Other financing sources (uses)
Transfers to other funds C (366,351)
(366,351)
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES
AND OTHER USES (300,000) (615,374) (315,374)
Transfer from prior year fund balance 300,000
C (300,000)
EXCESS
OF REVENUES
OVER
(UNDER) EXPENDITURES,
OTHER
USES, AND TRANSFER $ C $ (615,374) $
(615,374)
See accompanying notes.
TOWN
OF EXETER, RHODE ISLAND
COMBINED
STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES
IN
FUND BALANCES ‑ NONEXPENDABLE TRUST FUNDS
Year
Ended June 30, 2002
REVENUES
Interest income $ 106
Other investment income 3,009
TOTAL
REVENUES 3,115
EXPENDITURES
Investment expenses 11,989
Contributions and expenses 1,924
TOTAL
EXPENDITURES 13,913
NET
LOSS (10,798)
Fund balances at July 1, 2001 153,752
FUND
BALANCES - JUNE 30, 2002 $
142,954
See accompanying notes.
TOWN
OF EXETER, RHODE ISLAND
COMBINED
STATEMENT OF CASH FLOWS ‑ NONEXPENDABLE TRUST FUNDS
Year
Ended June 30, 2002
OPERATING ACTIVITIES
Investment income $ 3,115
Cash payments for goods and services (13,913)
NET
CASH USED IN
OPERATING
ACTIVITIES (10,798)
INVESTING ACTIVITIES
Proceeds on sale of investments 11,596
NET
INCREASE IN CASH
AND
CASH EQUIVALENTS 798
CASH AND CASH EQUIVALENTS AT JULY 1, 2001 10,299
CASH
AND CASH EQUIVALENTS
AT
JUNE 30, 2002 $
11,097
OTHER INFORMATION
Net loss equals net cash used in operating activities $
(10,798)
See accompanying notes.
TOWN
OF EXETER, RHODE ISLAND
NOTES
TO FINANCIAL STATEMENTS
June
30, 2002
NOTE A‑‑SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
The Town of Exeter, Rhode Island (Town) was founded in
1742. The Town is governed largely
under the 1742 Legislative Charter. In
some matters, including the issuance of short and long-term debt, the Town is
governed by the general laws of the State of Rhode Island. The Town operates under a Town Council form
of government. The Town provides
various services including education, libraries, public fire and rescue
service, public works, social services, and general administrative services.
The financial statements of the Town have been
prepared in conformity with accounting principles generally accepted in the
United States of America (GAAP) as applicable to governmental units. The accounting methods and procedures
adopted by the Town conform to GAAP as applied to governmental entities except
for the omission of the primary government=s
General Fixed Assets Account Group and certain component unit=s financial statements. The more significant of the Town=s
accounting policies are described below.
Financial Reporting Entity: The accompanying financial statements present the
Town=s primary government and certain component units which are financially dependent on the
Town. The Town=s component units are as follows:
Blended component units: The Manton Library is governed by a board of trustees
appointed by the Town Council. The
library=s trustees govern the library in accordance with
applicable state laws. For financial
statement purposes, the Manton Library is reported as if it were part of the
Town=s operations because its purpose is to provide library
services to the citizens of the Town and is dependent upon the Town for its
financial resources.
Discrete component units: Component units (entities) which are legally separate
from the Town, but are financially dependent on the Town and their exclusion
could cause the Town=s financial statements to be misleading or incomplete
include:
Exeter-West Greenwich School District: Three members of the six member governing Board of
the Exeter-West Greenwich School District (School District) are elected by the
voters of each of the Towns of Exeter and West Greenwich. However, the School District is fiscally
dependent upon each town because the School District=s operational and capital budgets are approved
annually by town voters at a joint School District meeting, and apportioned to
the respective towns based on student enrollment. The Town of Exeter is legally obligated to fund their share of
the School District=s budgets as voted.
The Town of Exeter is also obligated for their proportional share of the
School District=s bonded debt approved at a joint School District
meeting. The School District is
presented as a governmental fund type.
A complete financial statement of the School District may be obtained
through the Superintendent=s office.
The following discrete component units were not
included as part of the financial reporting entity:
$
Exeter Volunteer Fire
Department No. 1
$
Exeter Volunteer Fire
Department No. 2
$
Exeter Emergency
Dispatch
$
Exeter Rescue Corps
TOWN OF EXETER, RHODE ISLAND
NOTES TO FINANCIAL STATEMENTS
June 30, 2002
Basis of Presentation ‑ Fund Accounting: The accounts of the Town are organized on the basis
of funds or account groups, each of which is considered a separate accounting
entity. The operations of each fund are
accounted for with a separate set of self‑balancing accounts that
comprise its assets, liabilities, fund balance, revenues and expenditures. Government resources are allocated to and
for individual funds based upon the purpose for which they are to be spent and
the means by which spending activities are controlled
Amounts in the ATotals
(Memorandum Only)@ columns in the preceding financial statements
represent a summation of the combined financial statement line items of the
fund types and are presented for analytical purposes only. The summation includes fund types that use
different methods of accounting and include interfund transactions that have
not been eliminated. Consequently,
amounts shown in the ATotals (Memorandum Only)@ columns
are not comparable to a consolidation and do not represent the total resources
available or total revenues and expenditures/expenses of the Town.
The following fund types are used by the Town:
Governmental Fund Types: Governmental Funds are those through which most
governmental functions of the Town are financed. The acquisition, use, and balances of the Town's expendable
financial resources and the related liabilities are accounted for through
governmental funds. The measurement
focus is upon determination of changes in financial position, rather than upon
net income determination. The following
are the Town's governmental fund types.
General Fund - is the general operating fund of the Town. It is used to account for all financial resources except those
required to be accounted for in another fund.
This is a budgeted fund, and any fund balances are considered resources
available for general Town use.
Special Revenue Funds - are used to account for revenues that are legally
restricted to expenditures for specific purposes.
Capital Projects Fund - These funds
are established to account for financial resources to be used for the acquisition
or construction of major capital facilities (other than those financed by trust
funds).
Fiduciary Fund Types: Fiduciary Funds are used to account for assets held by the Town in a
trustee capacity or as an agent for individuals, private organization, other
governmental units, and/or other funds.
They include expendable, non-expendable trust funds, and agency funds.
Expendable trust funds - are
accounted for in the same manner as the Governmental Funds.
Non-expendable trust funds - are
reported in a manner similar to entities found in the private sector. The measurement focus is upon the
determination of net income and capital maintenance.
Agency funds - are accounted for using the modified accrual basis of accounting.
Account Groups:
General fixed assets and long‑term liabilities expected to be financed
from governmental funds are accounted for in this group of accounts. This group is concerned only with the
measurement of financial position; it is not involved with measurement of
results of operations. Because of their
spending measurement focus, expenditure recognition for governmental fund types
is limited to exclude amounts represented by accounting for general fixed
assets and noncurrent liabilities, such as long‑term liabilities relating
to bond issuance. Since they do not
affect net current assets, such long‑term amounts are not recognized as
governmental fund type expenditures or fund liabilities. They are instead reported as in the
following account groups:
TOWN OF EXETER, RHODE ISLAND
NOTES TO FINANCIAL STATEMENTS
June 30, 2002
General Long-Term Debt Account Group - This
account group is used to record the principle balances of general obligation
bonds, deferred compensatory costs, unfunded pension liabilities, and other long-term
debt obligations not reported elsewhere.
General Fixed Assets Account Group - This account group is used to maintain control and
cost information for all fixed assets.
Basis of Accounting: All governmental and expendable trust funds use the flow of current
financial resources measurement focus and the modified accrual basis of
accounting. Under the modified accrual
basis of accounting, revenues are recorded when susceptible to accrual, i.e.,
both measurable and available.
Available means collectible within the current period or soon enough
thereafter to be used to pay liabilities of the current period (see Note D for
property tax revenue policy).
Expenditures, other than interest on long‑term debt, are recorded
when the liability is incurred. Interest on long-term debt is recorded when the liability is
paid. Under this basis, revenues other
than property taxes are recorded as revenues when received in cash because they
are generally not measurable until actually received.
The accrual basis of accounting is utilized by the
non-expendable trust funds. Under this
method, revenues are recorded when earned and expenses are recorded at the time
liabilities are incurred.
Encumbrances:
Encumbrance accounting, under which purchase orders, contracts, and other
commitments for the expenditure of funds are recorded in order to reserve that
portion of the applicable appropriation, is employed in the governmental
funds. Open encumbrances are reported
as reservations of fund balances since the commitments will be honored through
subsequent year=s expenditures.
Encumbrances do not constitute expenditures or liabilities. (See Note B for budgetary reporting of
encumbrances.)
Risk Management:
The Town is exposed to various risks of loss related to torts; theft of, damage
to, and destruction of assets; errors and omissions; injuries to employees; and
natural disasters. The Town maintains
insurance covering each of those risks of loss.
The Town is insured under a statewide municipal risk
management pool. Rhode Island
Inter-Local Risk Management Trust, Inc.
(the Trust) requires annual premiums based on the pool's
experience. The Trust offers to Rhode
Island cities and towns general liability and workers compensation insurance
which is self-sustaining through member premiums and is reinsured through
commercial companies to reduce its exposure to large losses. The agreement with the Trust states that for
premiums paid by members, the Trust will assume financial responsibility for
members losses up to the maximum amount of insurance purchased, less deductible
amounts. If a single loss is above the
Trust's retention and reinsurance coverage the excess liability reverts to the
member organization against which the claim was originally made
Management believes such coverage is sufficient to
preclude any significant uninsured losses to the Town. Settled claims have not exceeded insurance
coverage in any of the past three fiscal years.
Cash and Cash Equivalents: For the purposes of cash flows, the nonexpendable
trust funds consider all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents. The Town has included a statement of cash flows with its
nonexpendable trust funds. Cash and
cash equivalents includes $1,279,000 invested in highly liquid interest bearing
accounts at June 30, 2002.
Investments:
Investments are carried at fair
value, except for investments meeting the requirements of the Aone year option@ and
nonparticipating interest earning investment contracts (i.e. certificates of
deposit) which are recorded at amortized cost.
Under the Aone year option@,
certain investments (i.e. U.S. Treasury and agency obligations) that have a
remaining maturity at the time of purchase of one year or less may be recorded
at amortized cost.
TOWN OF EXETER, RHODE ISLAND
NOTES TO FINANCIAL STATEMENTS
June
30, 2002
Property and Equipment: All primary
government funds treat the acquisition of property and equipment as current
expenditures. The primary government does
not report property and equipment in a General Fixed Assets Account Group or
keep detailed fixed asset records, as required by GAAP. However, as of July 1, 2000 and as part of
its complete financial statements, the School District records property and
equipment at cost in its General Fixed Asset Account Group.
Long-term debt: Long-term debt obligations of the Town=s primary government are reported in the General
Long-Term Debt Account Group, which, represent landfill postclosure care costs,
land acquisition costs, and certain deferred compensatory costs,
Fund balances: The unreserved fund balances for
governmental funds represent the amount available for budgeting future
operations. The reserved fund balances
for governmental funds represent the amount that has been legally restricted
for specific purposes.
Vacation and Sick leave: Costs of accumulated vacation and personal
leave are recorded as expenditures when incurred. The liability arising from unused sick leave benefits and accrued
vacation has been recognized in the General Fund and General Long-Term Debt
Account groups.
Interfund transactions: All transactions between the primary government and
certain funds (discrete component units) are considered quasi-external
transactions and are accounted for as fund revenues, expenditures or expenses
(as appropriate). Transactions between
the general fund and other funds which constitute reimbursements of a fund for
expenditures or expenses initially made from it which are properly applicable
to another fund are recorded as expenditures or expenses (as appropriate) in
the reimbursing fund and as reductions of the expenditure or expense in the
fund that is reimbursed.
All interfund transactions except advances,
quasi-external transactions and reimbursements are accounted for as
transfers. Nonrecurring or non-routine
transfers of equity between funds are considered equity transfers. All other interfund transactions are treated
as operating transfers.
Amounts to be Provided: Amounts to be provided represent monies to be raised
from future tax levies to retire general long-term obligations and the
liability for compensated absences.
NOTE BBBUDGETARY
PROCESS
Budgetary adoption: It is the responsibility of the Town Council to advertise a proposed
budget for the primary government for the following fiscal year no later than
10 days prior to the Financial Town Meeting held to adopt such budget. Public hearings are conducted on the
recommended budget and the final recommended budget is legally enacted through
an ordinance at the Financial Town Meeting.
All budget appropriations, except an appropriation for capital
expenditures, lapse at the end of the fiscal year. An appropriation for a capital expenditure shall continue in
force until the purpose for which it was made has been accomplished or
abandoned; an appropriation is considered abandoned if two fiscal years
following the date of appropriation pass without any disbursement from or
encumbrance of the appropriation.
Budgetary control: The level of budgetary control for the General Fund (that is, the
level at which expenditures cannot legally exceed appropriations) is fixed by
resolution of the Annual Financial Town Meeting. The resolution authorized the Town Council to spend within the
total sum appropriated for municipal purposes.
While this restriction prohibits spending in excess of the authorized
budget, the policy enables the Town Council to use the Fund Balance within the
overall appropriations budget to offset over expenditures that may arise within
a specific budget account.
Salary departmental expenditures exceeded
appropriation by $10,874 due primarily to the building, electrical and plumbing
inspectors= salaries not originally appropriated.
TOWN
OF EXETER, RHODE ISLAND
NOTES
TO FINANCIAL STATEMENTS
June
30, 2002
NOTE C--CASH DEPOSITS AND INVESTMENTS
Cash: Cash deposits are in various Rhode Island
financial institutions and are carried at cost.
The composition of the cash deposits and investments
fluctuates depending primarily on the timing of state and local receipts and
operating outlays throughout the year.
Carrying
Bank
Amount
Balance
Primary government:
Insured (FDIC) $ 231,513 $ 339,012
Uninsured or uncollateralized 1,132,515 2,385,443
1,364,028 2,724,455
Component unit:
Insured (FDIC) 243,671 298,237
Uninsured or uncollateralized 281,025 636,370
524,696 934,607
Total
Deposits $
1,888,724 $ 3,659,062
Investments: Investments consist primarily of common
stocks, mutual funds, repurchase agreements, and U.S. Government
Securities.
Certain investments are categorized to give an
indication of the level of risk assumed at year-end.
Category 1 includes insured or registered, or securities held by
the government or its agent in the government=s name.
Category 2
includes uninsured and unregistered, with securities held by the counterparty=s trust department or agent in the government=s name.
Category 3
includes uninsured and unregistered with securities held by the counterparty or
by its trust department or agent, but not in the government=s name.
The mutual funds and the municipal plus trust are not
subject to risk categorization.
Carrying
Category
1 Category 2 Category 3
Value
Primary government:
U.S. Government Obligations $ C $ C $ 232,774 $ 232,774
Common stocks C C 267,951 267,951
Mutual funds C C C 517,793
C C 500,725 1,018,518
Component unit:
Repurchase agreements 1,245,000 C C 1,245,000
U.S. Treasury bond 149,235 C C 149,235
Municipal Plus Trust C C C 61,803
1,394,235 C C 1,456,038
$
1,394,235 $ C $ 500,725 $ 2,474,556
TOWN
OF EXETER, RHODE ISLAND
NOTES
TO FINANCIAL STATEMENTS
June
30, 2002
NOTE DBPROPERTY
TAXES
The Town=s
property tax is levied each June 30, for its next fiscal year on the assessed
valued listed as of the prior December 31, for all real property, tangible
property, and motor vehicles located in the Town. Assessed values of real property and tangible personal property
were established by the Town Assessor=s office
at 60% of appraised market value as of December 31, 1992. The Town completed a revaluation of real
property and tangible personal property as of December 31, 1992. The assessed values were effective for the
property tax levy beginning with fiscal year 1993-1994. The assessed value of motor vehicles is
determined annually at 100% of retail market value.
The Town entered into a contractual relationship with
a law firm to act as a collection agency to pursue delinquent tangible and
personal property accounts. The Town
has forwarded past due accounts for collection. At June 30, 2002, no reserve has been established for the
property taxes considered delinquent.
The property tax revenue associated with the delinquent taxes has been
deferred.
An automatic lien is placed on the taxpayer=s property if payment has not been received by the due
date. Interest is charged on past due
accounts at a rate of 12% per annum calculated on the unpaid portion of the
total tax.
The Town recognizes property tax revenues in
accordance with Codification of Governmental Accounting and Financial
Reporting Standards. Unpaid
property taxes at year end are recorded as property taxes receivable and those
property taxes receivable which were not collected within 60 days immediately
following year end are recorded as deferred revenue. Deferred revenue at June 30, 2002 consists of $401,198 of
property taxes not collected within 60 days following year end and $335,785 of
fiscal year 2003 reimbursements from the State of Rhode Island for the phase
out of the motor vehicle excise tax.
Net property taxes levied for the fiscal year 2002
were based on an assessed value of approximately $241,912,625 at December 31,
2000 and amount to $7,480,365 plus addendum billings of $54,019. Total property tax recognized for the fiscal
year, including $55,421 collected within 60 days following year end, amounted
to $7,469,622 which represents 99% of the total 2002 tax levy.
Taxes are due in equal quarterly installments on
September 1-15, December 1-15, March 1-15, and June 1-15 during the fiscal
year.
TOWN OF EXETER, RHODE ISLAND
NOTES TO FINANCIAL STATEMENTS
June 30, 2002
NOTE EBINTERFUND
RECEIVABLES AND PAYABLES
Individual fund interfund receivable and payable
balances at June 30, 2002 are as follows:
Interfund
Interfund
Receivable Payables
General fund $ 5,000 $ 804,397
Special revenue fund:
CDBG C 5,000
Wolf Rock Road project 293,210 C
Revaluation 103,550 C
Fiduciary trust funds:
Cemetery fund 325 C
Reynolds fund C 325
Agency funds 45,500 C
Capital projects fund:
Old Town hall renovation 25,949 C
Vehicle replacement 8,772 C
New library 213,923 C
Public works/roads 112,188 C
Computerized upgrade 1,305 C
809,722 809,722
Component unit:
School district 352,313 352,313
$
1,162,035 $ 1,162,035
NOTE FBREGIONAL
SCHOOL DISTRICT AGREEMENT
The Exeter-West Greenwich Regional School District was
formed by the Towns of Exeter and West Greenwich through an agreement dated
July 1, 1965. In accordance with the
agreement, the Towns of Exeter and West Greenwich are annually assessed an
apportionment of operating and capital expenses. The assessment to the Town of Exeter for fiscal year 2002 was
$6,550,695.
The School District consists of grades Kindergarten
through grade 12. The junior/senior
high school and all other school buildings are owned by the School District.
The Town is contingently liable for a portion of the
debt of the School District based upon its share of student enrollment.
TOWN OF EXETER, RHODE ISLAND
NOTES TO FINANCIAL STATEMENTS
June 30, 2002
NOTE GBSCHOOL
DISTRICT LONG-TERM DEBT
Long-term indebtedness of the Exeter-West Greenwich
Regional School District is accounted for in the School District=s General Long-term Debt Account Group as part of its
complete financial statements. The
following schedule reflects the changes in the School District=s General Long-Term Debt Account Group during fiscal
2002:
July 1, 2001 Additions Retirements June 30, 2002
General obligation bonds $ 13,270,000 $ C $ 1,330,000 $ 11,940,000
Certain accrued compensated absences 61,155 266,412
6,658 320,909
Total General and Long-Term Debt $
13,331,155 $ 266,412 $
1,336,658 $ 12,260,909
The debt service through maturity for the above bonds
is as follows:
Fiscal year ending
June
30, Principal
Interest
2003
$ 1,305,000 $
569,041
2004 1,285,000 508,834
2005 1,265,000 448,850
2006 1,245,000 388,649
2007 1,230,000 267,499
2008-2019 5,610,000
1,037,801
$
11,940,000 $
3,220,674
TOWN
OF EXETER, RHODE ISLAND
NOTES
TO FINANCIAL STATEMENTS
June
30, 2002
School District Long-Term Debt
Date
of Interest Date of Authorized Outstanding Outstanding
Issue Rate
Maturity and Issued June 30, 2001
Additions Retirements June 30, 2002
General obligation
bonds payable:
Refunding bonds 3/15/97 3.6-5.4% 11/15/10 $
14,595,000 $ 10,120,000 $ C $
1,155,000 $ 8,965,000
School bonds 1/15/98 4.1-6.5% 09/15/18 3,500,000 3,150,000 C 175,000 2,975,000
Total general obligation
bonds payable $
18,095,000 13,270,000 C 1,330,000 11,940,000
Certain accrued compensated absences 61,155 266,412 6,658 320,909
Total general long term
debt payable $ 13,331,155 $ 266,412 $ 1,336,658 $ 12,260,909
TOWN
OF EXETER, RHODE ISLAND
NOTES
TO FINANCIAL STATEMENTS
June
30, 2002
NOTE HBPRIMARY
GOVERNMENT LONG-TERM DEBT
The following schedule reflects the changes in primary
government=s long-term debt as shown in the general long-term
debt account group during fiscal 2002:
July 1, 2001
Additions Retirements June 30, 2002
Landfill postclosure care costs (Note J) $ 800,000 $ 100,000 $ C $ 900,000
Land acquisition costs 225,000 C 25,000 200,000
Compensated absences 14,828
3,436 C 18,264
Total general and long-term debt $ 1,039,828 $ 103,436 $ 25,000 $
1,118,264
On March 12, 2001, the Town purchased land for
$250,000 through a noninterest bearing note due in annual installments of
$25,000 through 2010.
On April 1, 2002 the Town Council approved the
resolution authorizing the Town to finance the construction of the
Town library by the issuance of not more than $500,000
in bonds. To date no bonds have been
issued.
NOTE IBSCHOOL
DISTRICT PROPERTY AND EQUIPMENT
The following schedule reflects the changes in the School
District=s property and equipment during fiscal 2002:
July 1, 2001 Additions Retirements June 30, 2002
Land $ 655,844 $ C $ C $ 655,844
Buildings and improvements 22,943,769 83,124 C 23,026,893
Motor vehicles 51,370 C C 51,370
Machinery and equipment 1,093,246 55,475
(36,400) 1,112,321
$
24,744,229 $
138,599 $ (36,400) $ 24,846,428
NOTE JBLANDFILL
POSTCLOSURE CARE COSTS
GASB 18, Accounting for Municipal Solid Waste
Landfill Closure and Postclosure Care Costs. requires the recognition of
closure and postclosure costs of landfills as long-term liabilities. State and federal laws and regulations
require that the Town perform certain maintenance and monitoring functions for
30 years after its landfill has been closed.
The Town is designing a landfill closure plan estimated at $900,000,
which liability is reported in the primary government=s financial statements as a long-term debt of
$900,000. The estimated liability for
landfill postclosure care costs as of June 30, 2002 which is based on a total
cost of $90,000 per acre. Additional
costs that might arise from changes in postclosure requirements (due to changes
in technology or more rigorous environmental regulations, for example) may need
to be covered by additional charges to taxpayer in future years.
NOTE KBCOMMITMENTS
AND CONTINGENCIES
At June 30, 2002, the Town had several lawsuits
pending and had been placed on written notice of potential claims. The Town intends to vigorously pursue its
claims and/or defend its position with respect to each matter. In the opinion of the Town=s legal counsel, the Town=s liability with respect to these cases, if any, was
not determinable. It is the opinion of
Town management, based in part on the advice of legal counsel, that settlement
on the above lawsuits will not materially affect the Town=s financial position.
TOWN OF EXETER, RHODE ISLAND
NOTES TO FINANCIAL STATEMENTS
June 30, 2002
NOTE LBSTEWARDSHIP,
COMPLIANCE, AND ACCOUNTABILITY
Compliance:
The Town has no material violations of finance-related legal and contractual
provisions.
Deposits with financial institutions: RIGL 35-10.1, the ARhode
Island Collateralization of Public Deposits Act@
requires that time deposits with maturities exceeding 60 days held in
institutions holding public deposits be 100% collateralized by insurance or
eligible collateral. During the year,
there were no violations of the law noted.
NOTE MBRESTRICTED
FUND BALANCE
On May 21, 2002, at the Town=s financial meeting, the fiscal year 2003 operating
budget was approved. Voters directed
that $400,000 of the accumulated general fund unreserved and undesignated fund
balance from fiscal year 2003 be designated for certain future uses.
NOTE NBPENSION
PLANS
Primary Government Pension Plan
Plan Description and Funding: The Town maintains a defined contribution plan, the
Town of Exeter Money Purchase Pension Plan, for retirement benefits for all
eligible full-time employees. The plan
was established by the Town Council effective January 1, 1985. The plan provides for employer only contributions with benefits beginning at normal
retirement age. The plan is
administered by Thomas B. Fecteau Associates, Inc. Contributions were at the rate of 5% of base compensation. Eligibility requirements call for employees
to be 21 years of age and have completed 1 year (12 month period and 1,000
hours) of service. Contributions made
by the Town on behalf of eligible employees vest in accordance with a vesting
schedule documented within the retirement plan. The Town expense for to the plan for the year was $21,899. The unpaid balance due was $16,213 at June
30, 2002.
School District Pension Plan
Employees= Retirement System of The State of Rhode Island
Plan Description: For certified personnel, the
School District contributes to the Employees Retirement System (ERS), a
cost-sharing multiple-employer defined benefit plan administered by the
Employees Retirement System of Rhode Island (System). ERS provides retirement and disability benefits, annual
cost-of-living adjustments, and death benefits to plan members and
beneficiaries. Chapter 2334 of the
Rhode Island Public Laws of 1936 establish the provisions of ERS. The System issues a publicly available
financial report that includes financial statements and required supplementary
information for ERS. That report may be
obtained by writing to the State of Rhode Island Retirement Board, 40 Fountain
Street, Providence, RI, 02903.
Funding Policy: Plan members are required to contribute 9.5%
of their annual covered salary and the School District is required to
contribute at an actuarially determined rate.
The current rate is 5.73% of annual covered payroll. The contribution requirements of plan
members and the School District are established and may be amended by the State
of Rhode Island. The School District=s contributions to ERS for the years ending June 30,
2002, 2001, and 2000 were $566,116, $638,782 and $718,806, respectively, equal
to 100% of the required contributions for each year
TOWN OF EXETER, RHODE ISLAND
NOTES TO FINANCIAL STATEMENTS
June 30, 2002
Municipal Employees Retirement System of the State of
Rhode Island
Plan Description: The School District=s defined benefit plan (the Plan) for the noncertified
general employees provides retirement and disability benefits, and death
benefits to plan members and beneficiaries.
The Plan is affiliated with the Municipal Employees Retirement System
(MERS), an agent multiple-employer pension plan administered by the Employees Retirement System of Rhode Island.
Chapter 2784 of the Rhode Island Public Laws of 1951 assigns the authority to
establish and amend the benefit provisions of the plans that participate in
MERS to the State of Rhode Island. The
Employees Retirement System of Rhode Island issues a publicly available
financial report that includes financial statements and required supplementary
information for the Plan. The report
may be obtained by writing to Employees Retirement System of Rhode Island, 40
Fountain Street, Providence, RI 02903-1854.
Funding Policy: The School District=s eligible employees are required to contribute 6%
(additional 1% for a cost of living adjustment benefit) of their annual covered
salary. The School District is required
to contribute at an actuarially determined rate; the current rate is
4.78%. The contribution requirements
are determined by state statue.
Annual Pension Cost: For 2002, the School District=s contribution to the Plan was $75,565. The required contribution was determined as
part of the June 30, 2000 actuarial valuation using the entry age normal cost
method. The actuarial assumptions
included a) a net investment return of 8.25%, compounded annually, b) projected
salary increases, a service component, plus a 3.5% inflation component plus a
general increase, and c) 3% per year cost of living adjustments. The Plan=s
actuarial accrued liability is divided into two pieces: the unamortized initial
base, and the balance. The unamortized
initial base is amortized as level payments over the 25-year period from June
30, 1988. The balance is amortized as a
level percentage of pay for the current group of active participants. The actuarial value of the plan=s assets was determined using techniques that smooth the
effects of short-term volatility in the market value of investments.
Trend Information: Trend information for the Plan is presented below:
Annual Pension Cost
Annual Percentage
Fiscal
Pension of APC Net Pension
Year
Cost (APC) Contributed Obligation
2000 $ C N/A C
2001 $ 63,896 100% C
2002 $ 75,565 100% C
Schedule
of Funding Progress (Unaudited)
Funding
Excess
Actuarial Actuarial
Accrued Funding (Deficiency)
Valuation Actuarial
Value Liability (AAL) Excess Funded Covered as
a Percentage
Date of Assets -Entry Age (Deficiency) Ratio Payroll of Covered Payroll
6/30/98 3,159,153 2,430,984 728,169 130.0 1,263,670 57.6
6/30/99 3,560,029 3,494,652 65,377 101.9 1,481,117 4.4
6/30/00 3,954,906 4,322,374 (367,468)
91.5 1,853,869 (19.8)
TOWN OF EXETER, RHODE ISLAND
NOTES TO FINANCIAL STATEMENTS
June 30, 2002
Other Pension Information
Valuation date 6/30/00
Actuarial cost method Entry
Age Normal Cost
Amortization method Level
percent of payroll - open
Level
dollar - closed
Average amortization period 9 years
Asset valuation method Three
year smoothing of the market value of assets
Actuarial assumptions:
Investment
rate of return 8.25%,
compounded annually
Projected
salary increases An
annual service related component, plus 3.50%
inflation component, plus a general increase
COMBINING STATEMENTS, ACCOUNT GROUPS, AND SUPPLEMENTAL
SCHEDULES
TOWN OF EXETER, RHODE ISLAND
COMBINING BALANCE SHEET - SPECIAL REVENUE FUNDS
June
30, 2002